Global Articles on what is going on...posted daily

[sandi66]

Federal Bureau of Investigation: Missile Engineer, Virginia Shootings
By ThirdAge News Staff
Posted October 27, 2010 10:23 AM

Federal Bureau of Investigation officers raided a suburban Boston home owned by an engineer who worked on missile defense programs at Raytheon, an official said.

A spokeswoman for the U.S. Attorney's office declined to identify the target of the search or discuss the reason behind it, The Boston Globe reported Tuesday.

FBI and Immigration and Customs Enforcement agents carted boxes of potential evidence out of the home at 71 Lincoln St. in Melrose on Monday.

Tax records indicate the home is owned by Richard M. and Lori B. Lloyd.

"There is no immediate threat to the public," Christina DiIorio Sterling, spokeswoman for U.S. Attorney Carmen M. Ortiz, told the Globe.

Lloyd is co-holder with Raytheon of a patent for a missile system designed to destroy landmines, public documents indicate.

He is listed on Amazon.com as the author of two books on conventional and nuclear warheads and the physics underlying their successful deployment.

Raytheon said Lloyd was a former employee.

In other FBI news, investigators began a search Tuesday into three shootings at Virginia military locations in the last 10 days that the agency says may be related.

The first shooting occurred on the morning of Oct. 17 and broke upper-story windows at the National Museum of the Marine Corps in Triangle, The Washington Post reported.

The second shooting occurred on the morning of Oct. 19 at the Pentagon's south parking lot area, the Post said.

The FBI announced that those two shootings have been linked to the same gun.

The third shooting, which reportedly occurred early Tuesday, was directed against the Marine Corps Recruiting Station in Chantilly.

Authorities think the third shooting may be related to the first two, but they were waiting for ballistics tests on bullets from the latest attack.

Officials had not yet released any other information about the type of weapon used or of the ammunition because of the ongoing investigation.

The Post said the gunman's motive is unclear, but all three places have close ties to the country's armed forces, and two of them are Marine Corps-related facilities.

The FBI is cooperating in its investigation with the Fairfax and Prince William county police departments and the Pentagon Force Protection Agency.


www.thirdage.com/news/federal-bureau-investigation-missile-engineer-virginia-shootings_10-27-2010

[sandi66]

Diamond Sees ‘Central’ Fed Role in Risk Oversight: Tom Keene
October 27, 2010, 12:11 PM EDT



Oct. 27 (Bloomberg) -- The Federal Reserve will be instrumental in crafting U.S. regulation that helps reduce the chances of another collapse in the global financial system, Nobel-prize winning economist Peter Diamond said.

“There’s now the need to really pay attention to systemic risk,” Diamond, a nominee to the Fed Board of Governors, said in a radio interview today on “Bloomberg Surveillance” with Tom Keene. “The Fed is going to play a central role in thinking through how to change the regulations to cut down the risk of another global meltdown.”

The Financial Stability Oversight Council, which includes Fed Chairman Ben S. Bernanke and is chaired by Treasury Secretary Timothy F. Geithner, was created this year to try to prevent another financial crisis. It has the authority to recommend that the Fed and other agencies toughen rules to reduce risk at banks as well as non-financial institutions. The group is scheduled to meet Nov. 23 and may discuss criteria for identifying companies whose failure could threaten the U.S. economy, Deputy Treasury Secretary Neal Wolin said Oct. 25.

Diamond, who shared the 2010 Nobel Prize in Economic Sciences for research into the difficulties of matching supply and demand, particularly in the labor market, did not make any other comments about the Fed. He said companies will hire when demand picks up.

Unemployment is “overwhelmingly cyclical,” said Diamond, a professor at the Massachusetts Institute of Technology. “I’m troubled by the term structural,” which indicates joblessness is due to mismatches between workers’ skills and the types of positions available.

Monetary Policy

Fed Chairman Ben S. Bernanke on Oct. 15 said that there’s a case for additional monetary stimulus because inflation is too low and unemployment is too high. The central bank may be poised at the Nov. 2-3 meeting for another round of large-scale asset purchases to boost the economy, reduce the cost of borrowing in real terms and increase the rate of inflation.

Those policy makers who say higher joblessness is structural doubt easier monetary policy will have much effect on the labor market. Charles Plosser, president of the Philadelphia Fed, and Minnesota Fed President Narayana Kocherlakota have said that shifts in the labor market may reduce the effectiveness of additional Treasury purchases.

Chicago Fed President Charles Evans and Boston’s Eric Rosengren have downplayed the role of structural unemployment, favoring additional monetary policy action to boost the economy.

‘Small Fraction’

Structural joblessness is “a small fraction of the excess unemployment we’ve got,” Diamond said. “In any business cycle,” the long-term unemployed find it harder to find a job.

The U.S. added 64,000 private jobs in September, fewer than economists had forecast, and the unemployment rate held at 9.6 percent. Including a plunge in government payrolls, total employment fell by 95,000.

“We don’t have any real evidence that the labor market itself is functioning in a radically different way than other recessions” though the contraction was deeper and longer, Diamond said. “Aggregate demand is down, firms have excess capacity, firms are not interested in hiring unless they have demand.”



www.businessweek.com/news/2010-10-27/diamond-sees-central-fed-role-in-risk-oversight-tom-keene.html

[sandi66]

Obama’s Solicitor General Told Fed to Give Up Appeal, Banks Say
By Bob Ivry and Greg Stohr - Oct 27, 2010 12:21 PM ET

The Obama Administration’s top courtroom lawyer directed the Federal Reserve to drop its plan to ask the Supreme Court to block the release of bank bailout records, according to a legal brief filed by a group of the biggest commercial banks.

The Fed did not join the Clearing House Association LLC, a group of 20 banks, which appealed to the high court yesterday. The banks hope to reverse a lower court ruling forcing disclosure of Fed lending programs. Bloomberg LP, the parent of Bloomberg News, sued the central bank for the information.

In papers filed with a federal appeals court in New York, the Clearing House said the Fed had initially sought approval from acting Solicitor General Neal Katyal to petition the Supreme Court.

“The Clearing House was informed on October 22, 2010 -- two business days ago -- that the solicitor general declined to authorize” the appeal, the banks’ group said in the court papers. Katyal declined to comment.

The revelation came in an emergency request by the Clearing House to intervene in a similar case involving News Corp.’s Fox News.

Bloomberg sued the Fed in 2008 after the central bank refused to disclose names of recipients of emergency loans from four programs in response to a request under the Freedom of Information Act, or FOIA. The Clearing House joined the Fed’s defense of the suit after a U.S. District Court judge ruled in Bloomberg’s favor in August 2009. In March, an appeals panel upheld the lower court.

Essential Programs

The Fed’s emergency programs, which were “essential responses to the recent financial crisis,” would be harmed if the central bank is forced to disclose lending records, the Clearing House said in a statement yesterday. “Unless the ruling is overturned by the U.S. Supreme Court, businesses and individuals may decline to participate in these programs, possibly impairing the federal government’s ability to act effectively in times of crisis.”

The New York-based Clearing House, which has processed payments among banks since 1853, includes Bank of America NA, Bank of New York Mellon, Citibank NA, Deutsche Bank Trust Co. Americas, HSBC Bank USA NA, JPMorgan Chase Bank NA, U.S. Bank NA and Wells Fargo Bank NA.

Fox News submitted a FOIA request after Bloomberg’s, seeking information on more lending programs over a longer time frame. Because Fox lost an initial judgment in U.S. District Court, the Clearing House did not intervene in that case, said Greg Berardi, a spokesman for the bank group.

Solicitor General

An appellate court remanded Fox’s case earlier this year. Now that the Fed is no longer appealing Bloomberg’s case, the bank group is trying to intervene in the Fox matter “to make sure its appeal to the Supreme Court is not mooted by the release of the same information to Fox,” Berardi said.

Katyal took over for Elena Kagan after President Barack Obama selected her to serve on the Supreme Court. Like most federal agencies, the Fed must get approval from the solicitor general before filing an appeal at the Supreme Court.

“The court gets about 8,000 petitions and takes only about 75 cases a year,” said Gregory G. Garre, a former solicitor general and now a Washington-based partner at Latham & Watkins LLP. “If the solicitor general is seeking review, the odds the court will agree to take the case go way up. The court takes the large majority of the cases in which the government seeks review.”

Jennifer R. Psaki, a White House spokeswoman, and David Skidmore, a spokesman for the Fed, declined to comment.

The high court is already considering another dispute over corporate privacy rights under FOIA. In that case, which centers on a separate FOIA provision, the solicitor general is urging the release of documents concerning AT&T Inc., the largest U.S. phone company.



www.bloomberg.com/news/2010-10-27/obama-s-solicitor-general-told-fed-to-give-up-appeal-banks-say.html

[sandi66]

New Threat to Banks: Mortgage Security 'Put Backs'?
Treasury Official Dismisses Concern That Investor Demands Could Bring Down Banking System; Panel Member Says Statement Could Prove 'Embarassing'


Oct. 27, 2010

Could the whole U.S. banking system return to the brink if Bank of America is forced to buy back tens of billions in soured mortgage-backed securities?



At a public hearing today on loan modifications and foreclosures, a Treasury official dismissed that concern despite doubts raised by the Congressional Oversight Panel for the Troubled Asset Relief Program, the group charged by Congress with assessing the effectiveness of the federal bank bailout.



Bank of America is facing a demand by investors, including the Federal Reserve Bank of New York, that the bank buy back $47 billion in mortgage-backed securities. The loans backing the securities, investors argue, didn't live up to pledges made about their quality.



At the hearing this morning, Phyllis Caldwell, the Treasury Department's chief of the Homeownership Preservation Office, said that there was "no evidence of systemic risk" posed by such buy back demands -- also known as "put backs."


"It is still early. We are working very closely with 11 regulatory and federal agencies. We are watching this every day and that at this stage, there appears to be no evidence of a systemic risk," Caldwell said.



Her comments were met with skepticism by COP member and AFL-CIO policy director Damon Silvers, who noted that the Federal Reserve said the securities in question in the Bank of America demand have halved in value.



"If the Fed's request to Bank of America is honored, Bank of America, assuming when they buy them back, they mark them to market, Bank of America will take a $23 billion loss," he said.



If the bank were to later face five such requests, it could amount to a loss that exceeds the bank's $115 billion market capitalization, he said.



Silvers urged Caldwell to retract her statement about systemic risk "because these things can be embarrassing later."



Caldwell did later clarify, saying, "we didn't say there was no risk, we said there didn't appear to be evidence of a major systemic risk."



"I hope that if the Treasury comes back to us and is discussing if we need to deploy further public funds to rescue Bank of America, or such other institutions as might be affected by these events that we get a similar kind of indifference to their fate," Silvers responded.



Robosigning Scandal
During questioning by the panel, Caldwell also addressed the fallout over robosigning allegations that employees at mortgage servicers signed foreclosure paperwork without properly reviewing it.



Caldwell said that the department, which pays mortgage servicers to modify loans through its Home Affordable Modification Program, was waiting to get results of investigations into servicers by various government agencies before taking any action. Caldwell said that the controversy has not affected HAMP because the program deals with homeowners who are not yet in foreclosure.



Confronted with the fact that the Treasury still has a $17.2 billion investment in GMAC, one of the servicers named in the robosigning scandal, Caldwell said that the Treasury Department is regularly in touch with GMAC's management.



GMAC, she said, is working "promptly" to correct documentation problems and Treasury officials are "watching that very very closely and take it very seriously."



The COP hearing comes more than two weeks before a scheduled Senate Banking Committee hearing, called by Chairman Chris Dodd, D-Conn., on allegations of foreclosure irregularities. The committee has not yet announced who will testify at the Nov. 16 hearing.



The Congressional Oversight Panel was created by Congress in 2008 to oversee and assess the effectiveness of the bank bailout. Its reports have been largely critical of the government's execution of the bailout, with the panel most recently arguing that the Treasury Department's reliance on private contractors limited transparency -- a charge that the department refuted.



Most of the panel's discussion today focused on the government's mortgage modification program, which President Obama has said is intended to keep 3-4 million homeowners from foreclosure. The U.S. Treasury Department said only 28,000 homeowners in default were able to secure a permanent loan modification in September, well off the pace the government envisioned.



"It's like a major league batter pledging to swing at every pitch – what matters is not how often we swing, but how often you get on base," panel chairman Sen. Ted Kaufman, D-Del., said. "Treasury can't prevent every foreclosure in this country but it should try."



abcnews.go.com/Business/foreclosure-bank-america-highlights-mortgage-security-buy-back/story?id=11981557

[sandi66]

... before any pundit makes a price forecast, and before anyone lucky enough to own gold thinks about selling, they should dwell on this important question: in this extraordinary market where the central banks are at war, where the devil and at what price are we going to find 20,000 tonnes of gold?



www.financeandeconomics.org/Articles%20archive/2010.10.22%20Gold%20unallocated.htm





Where can we find 20,000 tonnes of gold?


October 22, 2010






Having broken out convincingly into new high ground, gold and silver have now paused for breath. Despite the sharpness of this week’s reaction, their performance indicates good underlying strength.



This is not to say there is no speculative froth – of course there is. Rather, speculators play a distant second fiddle in this market. Bullion is still doing what it has been doing for the last year: when the commercials on Comex hit the price it backs off rapidly on little volume, until someone very big takes the opportunity to clean the market out. It becomes another ratchet on the torturer’s rack for the commercial shorts, who find that every time this happens they end up being stretched further.



On last week’s rise there were early signs of panic, as the commercials attempted to reduce their exposure. However, the commercials’ net short position on Comex is still a very high 933 tonnes. Convention suggests that the commercials know best, and even if they have an extreme position, they will still crush you. And indeed, the big commercials, being too big to fail and with the comfort of the Fed’s antipathy to gold, could increase their short positions even further. This is now developing into the biggest game of chicken the markets will probably ever see.



However, the TBTF commercials are not having things all their own way.



Ten years of bull market must have pretty well exhausted the central banks’ bullion supplies, but parting with the physical has not been the only way gold has been suppressed. The very structure of the market might have been designed to neutralise speculative demand: on Comex physical settlement is little more than token, and in London forwards and leases are rolled or closed out by matching transactions. These markets encourage users to avoid delivery of the physical. True demand has been siphoned off into side-bets.



Investors may have been unaware of this, and while wheeling and dealing in these derivatives, they will be unaware that the truly wise long-term players have been quietly hoarding the physical, upon which this house of cards rests. In the ‘80s and ‘90s, central banks leased gold to the market that was then bought and accumulated by oil producers in the Middle East, and when it was ridiculously cheap large amounts were converted into jewellery. In this last decade the central banks themselves in aggregate have begun to accumulate bullion. It is important to understand that none of these earlier buyers will resupply much to the markets at higher prices.



The entry of China, Russia, India and a growing list of other politically-motivated nations into the market as limitless buyers of gold has created enormous difficulties for the old guard of interventionists, and a solution is desperately needed. It has developed into a power-struggle between this old guard, which is trying to manage a way through a crisis of its own making, and the new which so far has not managed to acquire enough bullion.



Furthermore the new is building up excessive amounts of fiat paper issued by members of the old; paper which they know is loosing value at an increasing pace. On this basis gold is simply underpriced in paper currency terms.



The struggle between the old and new guards is illustrated by the IMF’s gold sales, the stated purpose of which was to raise funds to help smaller nations through the credit crisis. The inner circle at the Bank for International Settlements must have been tearing its hair out to see these Keynesian clots gift half this invaluable ammunition to India. And why is the IMF selling bullion to Bangladesh and Sri Lanka, when their policy objective is to provide “concessional finance” to these struggling nations? (These sales were agreed for this purpose at the London G20 summit chaired by none other than Gordon Brown - second time unlucky.)



But what must have really got under the skin of the BIS is that it knows the real value of bullion is considerably in excess of the market price. It knows gold is underpriced, because the BIS and its senior members have been suppressing the price for the last forty years, which has resulted in an acute shortage of stock. But when they embarked on this course in the 1970s they would not have foreseen how gold would be made available to the masses through yet-to-be-invented ETFs; nor could they have foreseen the emergence of Russia and China from deep communism into aggressive capitalist-style development, generating hundreds of millions of new gold-loving savers. Consequently the old-guard BIS members have lost embarrassing quantities of bullion and cannot confess this to the markets. Presumably they had hoped that by withholding this information they could bluff it out; and they might have succeeded had it not been for the very serious financial and economic deterioration in the global economy, which raises the possibility of a Fed-induced dollar crisis, triggering new demand for physical bullion.



As well as these problems there is growing evidence of disruptive intent behind the gold policy of the ex-communist nations. I recently covered this in an article that tied in the relationships of the Shanghai Cooperation Council. In that article I pointed out that the substantial majority of today’s gold-buying nations are members of, or are associated with this organisation. As if to confirm these fears, in the last few days Iran, which is an associate member of the SCO, announced it is now buying gold. Furthermore, China is restricting the export of rare earth metals, which with the energy policies emanating out of the SCO membership, has the appearance of a coordinated attack on the Western economic system. If such a conspiracy exists, gold is central to it.



The result of forty years of gold price suppression is not only the disappearance from the markets of unquantifiable amounts of physical into the firmest of hands, but also an accumulation of claims for physical bullion through the growth of unallocated accounts at the bullion banks; and the secret we would all love to know is how large this commitment has become. In the absence of hard facts, we have to make a reasonable estimate.



The only major bullion bank that declares its bullion holdings is HSBC, which at the end of 2009 held gold valued at $13.757bn (392.6 tonnes). We shall assume that this bullion is held against HSBC’s unallocated accounts and we shall further assume a reasonable fractional reserve multiple of 10, which gives us net uncovered liabilities of 3,533 tonnes for HSBC alone.



However, there are 35 banks listed as full members of the LBMA, and it can be assumed that nearly all of them offer unallocated account facilities[ii]. It is also possible, even likely, that the fractional reserve multiple for many of these banks is higher than 10, because banks have been generally reluctant to hold the one reserve currency that pays no interest.[iii] Furthermore, some of these banks are among the largest in the world. Taking all this into account, it is possible that LBMA members are short of over 20,000 tonnes on their unallocated accounts.



This liability is unlikely to be hedged, because it is difficult to see who would take the other side of such large amounts. And this brings us back to the theme of this article: the key market participants are desperately short of bullion.



As a result, the ratio of turnover in forwards futures and options to the underlying physical has become improbably high, and is still rising. The deteriorating economic outlook for the US, Europe, the UK and Japan is now beginning to generate new hoarding demand all over the world. And all this is before portfolio investors have even begun to invest: the statistics indicate that portfolio exposure is amazingly low at less than 1%, so the point where more hoarding triggers market dislocation cannot be far off. Indeed, a small bullion bank worried about its unallocated exposure would be wise to cover its position on Comex, and demand for long futures from these sources may soon become a market factor.



So, before any pundit makes a price forecast, and before anyone lucky enough to own gold thinks about selling, they should dwell on this important question: in this extraordinary market where the central banks are at war, where the devil and at what price are we going to find 20,000 tonnes of gold?





ty joye

[sandi66]

Bank of America Pricked in Fed Bailout Farce: Jonathan Weil

October 28, 2010

So now we know what it takes for the Federal Reserve to show an interest in rooting out fraud at a too-big-to-fail bank. The Fed must decide that the Fed itself has been defrauded.

Borrowers? Depositors? They can protect themselves. Heaven help a bailed-out bank unlucky enough to be discovered servicing some of the Fed’s junky mortgage bonds, though. Good cops know a victim when they see one. The Fed knows a victim when it is one.

The supposed perpetrator in this unfolding drama is Bank of America Corp. Its accusers are a group of mortgage-bond investors that include the Federal Reserve Bank of New York, Pacific Investment Management Co., and BlackRock Inc., about a third of which happens to be owned by Bank of America.

The bondholders, who are threatening litigation, want Bank of America to buy back untold numbers of soured home mortgages that its Countrywide unit packaged into the loan pools backing more than $47 billion of residential mortgage bonds. Some of those securities landed on the New York Fed’s balance sheet as part of the government’s 2008 rescues of Bear Stearns Cos. and American International Group Inc.

In a letter last week, the bondholders accused Countrywide of failing to service the loans properly, which they say exacerbated their losses. They said Countrywide covered up instances where mortgages that should have been disqualified were included in the loan pools anyway. The investors also accused Countrywide of padding its fees and engaging in a “fraudulent, unauthorized and deceptive effort to supplement its servicing income.”

Endemic Fraud

Strong words, those are. So, where are the police?

If those allegations are true, it can’t be just this one group of bondholders getting fleeced. The fraud would have to be endemic, and probably industry-wide. The Justice Department should be locking up bankers. The Securities and Exchange Commission should be filing lawsuits for ripping off investors. The various banking regulators’ enforcement divisions should be cracking skulls. None of that is happening, of course. And there’s no sign yet that it will.

The Fed isn’t acting in its capacity as a regulator. It’s exercising its rights as an investor protecting its own pecuniary interests and, by extension, those of taxpayers. The two roles don’t mix well.

100 Cents on Dollar

Consider the argument the Fed was making a year ago when asked to explain why it didn’t demand concessions from any of AIG’s counterparties after the Fed bailed out the insurance company. Those would be the banks, such as Goldman Sachs Group Inc., that got paid 100 cents on the dollar for credit-default swaps AIG had sold them.

Demanding they accept less than that “would have been a misuse of our supervisory authority to further a private purpose in a commercial transaction,” the New York Fed’s general counsel, Thomas Baxter, told the Troubled Asset Relief Program’s inspector general in a November 2009 joint letter with the Federal Reserve Board’s general counsel, Scott Alvarez.

A New York Fed spokesman, Jack Gutt, declined to comment.

Perhaps the Fed could argue it had no legal grounds two years ago to seek concessions from AIG’s customers, but that its claims now against Bank of America are solid. Whatever the Fed’s logic, Bank of America says it will defend itself vigorously.

Most claims “don’t have the defects that people allege,” its chief executive officer, Brian Moynihan, said last week. As long as the facts remain unsettled, the Fed can’t pretend it isn’t throwing around its weight as a regulator, or that this isn’t a dispute over a commercial transaction.

Fed Conundrum

It’s a classic Catch-22. If the Fed exercises its rights as an investor, it undermines its credibility as a supervisor. If it doesn’t, it’s abandoning its duty to minimize taxpayers’ losses. This shows why the Fed shouldn’t be allowed to hold mortgage-backed securities of this kind in the first place.

The Fed’s repurchase demands are a small feature of the larger bailout economy. It works something like this: The Treasury each quarter sends new bailout checks to Fannie Mae and Freddie Mac, which the government seized in 2008, to prevent the mortgage giants from falling into mandatory receivership. This ensures the solvency of the Fed, which holds about $1 trillion of mortgage bonds guaranteed by Fannie, Freddie and Ginnie Mae.

The Fed then can go and buy more securities with freshly printed money, which pushes mortgage-interest rates down and keeps housing prices up, propping up the banking industry. The steady payments to Fannie and Freddie also keep the Treasury from having to backstop their guarantees, for now.

Taxpayer Bailouts

This makes it possible for Fannie, Freddie and the Fed to send repurchase demands to Bank of America and other lenders, except they can’t ask for too much. If they do, the taxpayers might have to bail out the banks all over again.

Meanwhile, Fannie, Freddie and the Fed get to say they’re being good stewards of the people’s investments. The charade is part of a neatly circular confidence game. While we can hope this doesn’t end badly, chances are it will eventually.

This country can survive a bad economy. What it can’t live without is the rule of law. If the Fed’s claims are true, that a major bank intentionally defrauded the public on a massive scale, the government should prosecute everyone responsible.

Americans aren’t measuring the success of the bailouts only in dollars and cents. They’re evaluating them in terms of justice. The problem is there hasn’t been any.

www.bloomberg.com/news/2010-10-28/bank-of-america-pricked-in-fed-bailout-farce-jonathan-weil.html

[sandi66]

To: [e-mail], JP Morgan sued for conspiring to drive down silver prices

October 28, 2010

NEW YORK (Reuters) -

The two banks were hit with two lawsuits on Wednesday by investors who accused them of conspiring to drive down silver prices and reaping illegal profits

JPMorgan Chase & Co (JPM.N) and HSBC Holdings Plc (HSBA.L) were hit with two lawsuits on Wednesday by investors who accused them of conspiring to drive down silver prices, and reaping an estimated hundreds of millions of dollars of illegal profits.

The banks, among the world's largest, were accused of manipulating the market for COMEX silver futures and options contracts from the first half of 2008 by amassing huge short positions in silver futures contracts that are designed to profit when prices fall.

"Defendants reaped hundreds of millions of dollars, if not billions of dollars in profits" from the conspiracy, one of the complaints said.

The respective plaintiffs, Brian Beatty and Peter Laskaris, each said they traded COMEX silver futures and options and contracts, and lost money because of the alleged manipulation.

Beatty lives in Connecticut and Laskaris in New York, court records showed. The lawsuits seek class-action status, damages that may be tripled and other remedies. The defendant banks are major participants in the silver market.

JPMorgan declined to comment. An HSBC spokeswoman had no immediate comment.

The lawsuits were filed one day after the Commodity Futures Trading Commission proposed regulations to give it greater power to thwart traders who try to manipulate prices.

The CFTC began probing allegations of silver price manipulation in September 2008.

"Going back to the early 1980s, silver has been an extremely volatile market," said Bill O'Neill, managing partner at Logic Advisors, an Upper Saddle River, New Jersey investment firm specializing in commodities. "I often describe it as a speculative playground. You have to be a big boy to play."

Fraud, Deviousness Alleged

Only once in its 36-year history has the CFTC successfully concluded a manipulation prosecution, in a 1998 proceeding concerning prices for electricity futures.

Speaking on Tuesday, Chairman Gary Gensler said the proposed regulations would give the regulator greater power to police "fraud-based manipulation."

Commissioner Bart Chilton added that there had been "fraudulent efforts to persuade and deviously control" silver prices.

A CFTC spokesman said the regulator does not comment on investigations, and would not discuss the investor lawsuits.

Earlier this year, the CFTC began looking into allegations by a London trader that JPMorgan was involved in manipulative silver trading, the Wall Street Journal said on Wednesday, citing a person close to the situation.

Silver prices have faced regulatory scrutiny in the past, perhaps most prominently after the Hunt brothers in Texas in 1980 attempted to corner the market, driving prices above $50 an ounce. The price later plunged.

Since the CFTC began its probe, spot silver prices XAG= have ranged between $8.42 and $24.90 an ounce, Reuters data show. They traded Wednesday at roughly $23.53. Silver futures prices SIc1 are up 39.1 percent this year.

The cases are Beatty v. JPMorgan Chase & Co et al, U.S. District Court, Southern District of New York, No. 10-08146, and Laskaris v. JPMorgan Chase & Co et al in the same court, No. 10-08157. (Reporting by Jonathan Stempel; Additional reporting by Elinor Comlay, Jonathan Leff, Carole Vaporean in New York and Roberta Rampton in Washington, D.C.; Editing by Steve Orlofsky)

www.silverbearcafe.com/private/10.10/conspire.html

ty nalmann

[sandi66]

www.bloomberg.com/news/2010-10-27/mortgage-lenders-may-meet-with-states-over-foreclosure-probes-this-week.html



Banks `Want to Sit Down' With States to Discuss Foreclosures


By Margaret Cronin Fisk

Oct 28, 2010 12:01 AM ET


A 50-state task force investigating U.S. foreclosure practices may meet with lenders as early as this week, less than a month after JPMorgan Chase & Co. and Bank of America Corp. suspended some home seizures.



“We’ve had several conference calls with major lenders,” Colorado Attorney General John Suthers said in an interview, declining to specify which ones. “The banks want to sit down with the attorneys general. These meetings are being set up,” said Suthers, whose office is a member of the executive committee of the task force.



All 50 states on Oct. 13 announced a coordinated inquiry into whether banks and loan servicers used false documents and signatures to justify hundreds of thousands of foreclosures. The probe came after JPMorgan and Ally Financial Inc.’s GMAC mortgage unit said they would stop repossessions in 23 states where courts supervise home seizures and Bank of America froze foreclosures nationwide.



At least 17 states, including Colorado, are conducting separate investigations to determine whether state laws were broken. Some began investigations months before the coordinated nationwide probe was announced. States have asked lenders to halt foreclosures, requested documents and sought better home- loan modification procedures. Ohio’s attorney general has sued.


“An attorney general will always have a responsibility to deal with their own state laws and statutes that they think might be violated,” said James E. Tierney, director of Columbia Law School’s National State Attorneys General Program in New York. “If the target of the investigation may have done the same thing in several states, then it becomes cost effective and more efficient to work with colleagues in several states.”



State Laws
Each state has its own foreclosure laws, and the lender’s behavior may have differed from state to state or even county to county, which makes reaching a global settlement difficult, Tierney said.

“Our ability to act on behalf of consumers depends in part on the intricacies of state law,” said Janet Mills, Maine’s attorney general. “It is important for the AGs to share what they find out with each other, to monitor what is happening in other states, including the responses from financial entities,” she wrote in an e-mail yesterday.

Colorado’s Suthers said it’s too early to speculate how the probes will end.


“We are cooperating with the attorneys general on their inquiries,” Gina Proia, a spokeswoman for Detroit-based Ally, said in a phone interview yesterday. She declined to comment on any specifics or any possible meetings with attorneys general.



Meeting Today

Members of the attorneys general executive committee have met by phone and “have begun the process of communicating with servicers,” Geoff Greenwood, a spokesman for Iowa Attorney General Tom Miller, said yesterday in an e-mailed statement.



“There is a meeting scheduled for Thursday,” Greenwood said. “It would not be appropriate to disclose the meeting participants, the mechanics of the meeting, or the nature of the planned discussions.”

Bank of America was scheduled to meet with state officials today to discuss the foreclosure process, the Associated Press reported yesterday, citing a person briefed on the matter whom it didn’t name.


“We have been cooperating with the attorneys general and continue to have dialogue and share information with these important stakeholders,” Shirley Norton, a spokeswoman for the Charlotte, North Carolina-based bank, said in an e-mailed statement. She declined to comment on the timing of any meetings.



Tom Kelly, a spokesman for New York-based JPMorgan, declined to comment.



Corrections Needed

“The 50-state investigation is not seeking a nationwide moratorium on all foreclosures,” said Washington Attorney General Rob McKenna, who is also on the task force’s executive committee. “At the same time, foreclosures done improperly have to be corrected. It’s not permissible to violate state law to expedite a foreclosure.”



The states may push for better loan-modification procedures to address consumer complaints, McKenna said. Some homeowners who sought modifications weren’t offered revised payments, ended with the same or higher payments, or were foreclosed on during the process, according to these complaints.

“Loan modifications may be a significant part of the solution,” McKenna said. “If you keep homes out of foreclosure, they don’t depress real estate values.”


Ohio Attorney General Richard Cordray sued Ally Oct. 6, claiming its GMAC mortgage unit violated state consumer law and committed fraud by filing false affidavits in foreclosure proceedings. Cordray yesterday filed a friend-of-the-court brief in another case arguing that an Ohio court can vacate a foreclosure because of affidavit irregularities.



GMAC Lawsuit
Maine’s Mills said she may join a class action filed against GMAC on behalf of homeowners in that state alleging abuse of process and fraud.

“We’re contemplating joining the suit or we could bring our own,” she said. Her office began investigating foreclosure practices this summer, she said.

McKenna of Washington said he doesn’t anticipate filing any lawsuits. His office began an investigation in May after receiving consumer complaints about faulty foreclosure documentation, including instances in which “the same name seemed to be signed by several different people,” he said.

“We’d prefer to settle rather than litigate,” he said. McKenna was one of the leaders in the multistate settlement with Bank of America over the mortgage practices at its Countrywide Financial unit. He said that resolution, in which homeowners received loan modifications, is a possible guide.

Texas Subpoenas

Greg Abbott, the Texas attorney general, has subpoenaed information and documents from nine banks or loan servicers including Bank of America, Ally and JPMorgan.



Abbott’s office sent letters on Oct. 4 to 30 loan servicers, asking them to halt foreclosures in the state, pending a review of their practices. Abbott also asked banks to identify employees who filed faulty affidavits or other documents in the state and to identify foreclosures that used such documents.


South Dakota Attorney General Marty Jackley’s office will investigate some individual complaints, he said in an interview yesterday.

“What we’re seeing nationally didn’t happen here,” Jackley said. “We just don’t see the volume” of foreclosures, compared with other states, he said.


Florida Attorney General Bill McCollum asked on Oct. 12 to meet with a group of banks, including Bank of America and JPMorgan, about their foreclosure practices. He said in an interview on Oct. 15 that he had met with JPMorgan and had a telephone conference with Bank of America. He said the two were “well on their way” to correcting problems in their foreclosure procedures.



Goldman, PNC

McCollum, who sits on the executive committee of the 50- state task force, also has asked to meet with Goldman Sachs Group Inc.’s Litton Loan Servicing LP, PNC Financial Services Group Inc. and GMAC.



“We are in the process of setting up the remaining meetings,” said Shannon Knowles, who works in McCollum’s communications office.

“No subpoenas have gone out to date to any of the banks,” she said yesterday in an e-mail.


“Litton Loan Servicing has been and continues to be responsive to the requests by the state attorneys general,” Donna Marie Jendritza, spokeswoman for the Houston-based company, said in an e-mail. Fred Solomon, of Pittsburgh-based PNC, declined to comment.



“The ball is now in the lenders’ court,” said Columbia’s Tierney. “The AGs have said, ‘We’re here, we’re looking.’ Some people are forthcoming and some people are not. And each lender may decide differently.”



ty joye

[sandi66]

SIBEL EDMONDS: GOING ON RECORD ON LABELING AND LABELERS


www.youtube.com/results?search_query=sibel+Edmonds&aq=f <- below

www.youtube.com/results?search_query=Karl%20Schwarz&search=Search&sa=X&oi=spell&resnum=0&spell=1 <- below


www.veteranstoday.com/2010/10/27/sibel-edmonds-going-on-record-on-labeling-and-labelers/


SIBEL EDMONDS: GOING ON RECORD ON LABELING AND LABELERS


October 27, 2010 posted by Gordon Duff



SIBEL EDMONDS, UNDER BUSH ADMINISTRATION "GAG ORDER" FOR 6 YEARS
Going on Record on Labeling & Labelers
Censorship Fanatics Come from All Walks of Life
By Sibel Edmonds www.boilingfrogspost.com

It is funny and sad at the same time. In the course of one week I have gone from Anti-Semite to Anti-Muslim. Within a week I have been labeled Filthy Jew-Basher and Fear-Mongering Islamophobic. I find it funny since the logic-free arguments of these fanatic labelers who are running around like headless (and brainless) chickens has a priceless comic quality to it; in so many ways it is simply hilarious to watch and listen to them. And I say sad, because the fanatic censorship climate created by these ignoramuses is not limited to their own eco-system; its incestuous multiplication and spread has been swallowing not only their immediate vicinity but the entire society at large via revised encyclopedias, academia, media …and especially the highly polarized forums and blogs.

It began last week when I wrote a piece on how in certain election campaigns candidates have been competing with each other on their degree of loyalty to a foreign country-Israel. And they were doing this openly. Those without blinders and with common sense got my points:



-Shouldn’t these candidates’ electability be about commitment and loyalty to our nation, its interests, and addressing its current humongous problems? We would be raising hell if we heard a candidate pledging their unconditional loyalty to France, Saudi Arabia, or Pakistan; and yes, they are all considered allies whether you agree or not! Then why should it be different when it comes to this particular controversial foreign country, Israel?


-Don’t we all consider foreign contributions to and support for our representatives here something to be truly alarmed about? At least distasteful and disgraceful? Large sums, direct and indirect support, by AIPAC and the like would be just that.
No? Let me put it this way, in case you don’t get it: If the foreign entities were named something like Al-Hasmani Qaliani Fattullah, many would go out of their way to flag them down. AIPAC and the like are no different. They are foreign, with their own sets of interests and agendas; allies or not.



Since one of the candidates in my piece happened to be one with more special background and even more related facts, I went ahead and included some of those important documented facts. Then, the moment I posted the above piece the attacks started pouring from the fanatic left (now pay attention, I am not saying ‘all lefties’ but ‘fanatic left’): I was accused of being Anti-Semite, Anti-Jew, Anti-Liberal, Anti-Democrats, Anti-Socialist…



-I noted that Ms. Schakowsky’s husband is a convicted felon. The courts found him guilty, he confessed to his crimes, and he went to prison. I guess based on the fanatic liberal argument: this documented well-known public fact was caused by Anti-Semite Anti-Jewish Anti-Liberals Anti-Democrats investigators, law enforcement, courts, judges, and yes, even prisons. How dare they investigate, convict and imprison the husband of a Jewish Pro-Israel Democrat Congresswoman?!! Further, how dare I or anyone else talk or write about this during the election campaign?!




In that piece I wrote a section on Jan Schakowsky’s role in criminal investigations by the FBI involving Chicago, and provided a link to a related article. This opened up an old wound for blinded ultra partisan Democrats who loved me conditionally: As long as your case involves Dirty Dick & Bush, as long as you point a finger at larva like Republican Hastert, we love you and root for you! Make sure there ain’t no bad democrats involved in your case, ok?



-Well, I talked about that case during my testimony under oath. Considering what side of the DOJ-FBI I’ve been on, even with a minute trace of untruthful response by me under oath they would have landed on me with both feet (wearing combat boots!!).



My piece included quotes from news articles on Jan Schakowsky’s status with AIPAC, and that despite some cosmetic, for-show-only, appearance of glitches between the two, AIPAC has been her supporter for a long time, and that as far as AIPAC is concerned Schakowsky is ‘Kosher.’

Based on the Fanatic Left’s argument; AIPAC (and its support) are considered KaKa-BooBoo-NoNo, if the recipient of the support happens to be Bush Era Bad Men, such as Richard Perle, Douglas Feith, and Paul Wolfowitz. They have always emphasized the evil AIPAC connections of those Bus Era Neocons, and since they reserve the sole right to Fanatic Political Correctness Censorship, no one, I mean no one from the left, accused them of Anti-Semitism. Now, if the same AIPAC happens to be an avid supporter of Democratic candidates, all previous deals are off – based on the pro-censorship fanatic left code. To point out Schakowsky’s Israel & AIPAC ties are considered Anti-Semitic and Anti-Jewish, but to repeatedly publicize Bush-Era Jewish Neocons’ Israel & AIPAC connections and ties are ‘kosher.’ You see what I’m getting at?

A few days ago, and a few days after the Schakowsky-Israel article, I wrote a brief piece on an infamous and controversial preacher, Fethullah Gulen, his documented background and international status, the never-solved or resolved mystery of his $20 billion organization’s net worth, and his new status as the biggest charter school operator in the US, with over 130 charter schools in 25 states. For decades his schools have been known as Madrasas in Turkey and Turkic nations, and now, interestingly and curiously, this man, through a maze of networks-organizations has been taking over US taxpayer funded charter schools.

As soon as I posted the article the attack of the fanatic left began pouring. Now, after being labeled as Anti-Jew, I was being given the new title of Anti-Muslim. Their fanatic blogs have been spitting out labels like machine guns: fear-mongering, Anti-Islam, Tea-Partier, Neo-Nazi Propaganda machine…you name it – And, my Muslim background and ancestry notwithstanding! How comic & moronic! Oh well, that pretty much describes the bunch.

I’ve been having fun watching the correlation between my posts and my follower status on twitter and Facebook. It is one of my pastimes when I have a few idle minutes in life. This is how it goes:



I write a piece on the Turkish military’s bad deeds, and within minutes I see my follower numbers drop by a few; all ultra-national Turkish entities. And a few minutes later it goes up by a few; recipients of abuses by the Turkish Military.
I write a piece on Israel lobby-AIPAC and there it goes; a drastic drop. Within a day or two I get a fresh list of supporters from the Palestinian side.

I write a piece on the some of the awful deeds of the Bush Administration, and if it has the target words-Cheney-Rice-Ashcroft, I become a hit with a few on the left; my numbers go up, and then down by a few departing fanatic Republicans. A few days later I write about the changes on Obama’s promised changes and his awful deeds against civil liberties, transparency and accountability, and a group of blind lefties depart from my list of supporters…



You really get the picture now; no? In a way I get to laugh a bit. The moronic blinded partisanship and biases can be kind of entertaining due to their inherent stupidious nature and even more stupid acts. This is how their reasoning (lack of!)would work if it was turned on them:




Obama says Taliban are bad bad people. Taliban are Muslim, thus, Obama is Anti-Muslim.
Or
Obama’s civilian casualties in Afghanistan-Pakistan are all Muslim, thus, Obama intends to erase Muslims from the earth.



As I’ve repeated several times: the fanatic left’s stupidious reasoning is summarized in the above examples, and how could I take it seriously and not laugh?!

On the other hand, the situation saddens me greatly, because this is exactly what the establishment wants: large numbers of ignoramuses bickering, blinded irrational loyalties, a highly divided society where people are busy spitting at each other and eating one another rather than going after the joint enemies of all …

And finally, I am neither angry or being defensive. I am going to do exactly what I’ve been doing here at Boiling Frogs Post: write it as is, and say it as is. Our vigilant minority club has been expanding, and that’s all I need to keep at this as is. I have never bothered to post at fanatic right or fanatic left websites or blogs, so no worries there; I am not ban-able. I am not after a position with one of the fanatic left or right so-called alternative media outlets, so I don’t care about not being hire-able. I am not promoting a book or an upcoming movie, so having to be diplomatic (worthless by saying actually nothing, doing actually nothing) is not one of my problems. Unfortunately for you members of the moronic ignoramus political correctness censorship fanatics, I’ll be standing where I am and keeping on doing-saying-writing as usual.

Within a few minutes after this post I’ll be checking the status of my Twitter-Facebook membership list, and I’ll be laughing at you allJ
——————————————————


Sibel Edmonds- Founder & Publisher

Sibel Edmonds is the founder and president of the National Security Whistleblowers Coalition (NSWBC), a nonprofit organization dedicated to aiding national security whistleblowers. She has appeared on national radio and TV as a commentator on matters related to whistleblowers, national security, and excessive secrecy & classification, and has been featured on CBS 60 Minutes, CNN, MSNBC, NPR, and in the New York Times, Washington Post, Vanity Fair, The American Conservative, and others. Her book, ‘Shooting the Messenger’, co-authored with Professor William Weaver, is forthcoming from Kansas University Press in the fall of 2010.

PEN American Center awarded Ms. Edmonds the 2006 PEN/Newman’s Own First Amendment Award for her “commitment to preserving the free flow of information in the United States in a time of growing international isolation and increasing government secrecy”. She is also the recipient of the 2004 Sam Adams Foundation Award.

Ms. Edmonds worked as a language specialist for the FBI’s Washington Field Office. During her work with the bureau, she discovered and reported serious acts of security breaches, cover-ups, and intentional blocking of intelligence that had national security implications. After she reported these acts to FBI management, she was retaliated against and ultimately fired in March 2002. Since that time, court proceedings on her issues have been blocked by the assertion of “State Secrets Privilege”, and the Congress of the United States has been gagged and prevented from any discussion of her case through retroactive re-classification issued by the Department of Justice.

Ms. Edmonds began her career in 1993 as Project Director for the Rostropovich Foundation, a non-profit humanitarian organization providing medical and food aid to children of the former Soviet Union. She re-located to St. Petersburg, Russia and managed correspondence, shipments, inventory and security precautions in the largest children’s hospital in St. Petersburg. Later, she worked as the Executive Director & Co-Founder of Edmonds Industries, a Consulting and Holding Company, investing in international business and residential real estate development. Ms. Edmonds also worked as a volunteer for the Alexandria CASA program (Court Appointed Special Advocate) for abused children, and as an instructor for the Alexandria Office on Women’s Domestic Violence Program.

Ms. Edmonds has a MA in Public Policy and International Commerce from George Mason University, a BA in Criminal Justice and Psychology from George Washington University, and AA degree in Science from NVCC. She is certified as a Court Appointed Special Advocate and as an instructor for the Women’s Domestic Violence Program. She is fluent in Turkish, Farsi and Azerbaijani.


www.youtube.com/results?search_query=sibel+Edmonds&aq=f

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Sibel Edmonds Bin Laden Worked for US Right Up Until 9/11 PT1
Former FBI Translator Bombshell: Bin Laden Worked for US Right Up Until 9/11 www.washingtonsblog.com Before you hear what Sibel Edmonds has to say ...

by Steeper33 | 1 year ago | 9,363 views

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Sibel Edmonds. Investigations Thwarted
Why have so many investigations been dropped? Whose interests are being served? Demand hearings. Call Waxman. [phone]. letsibeledmondsspeak ...

by lukery2 | 3 years ago | 42,390 views

10:09 Add to Added to queue
Whistleblower Sibel Edmonds Finally Testifies Under Oath
Former FBI Language Specialist Sibel Edmonds finally gets to testify under oath, after being hit with a gag order. For more information on her and ...

by VRAdmin | 1 year ago | 21,931 views

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Sibel Edmonds PEN Newman Award
PEN American Center has named Sibel Edmonds, a translator who was fired from her job at the FBI after complaining of intelligence failures and ...

by statesecrets | 4 years ago | 41,546 views

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Sibel Edmonds - Behrooz Sarshar - 9-11 Foreknowledge
Sibel Edmonds testified under oath August 8, 2009. This segment covers testimony regarding Behrooz Sarshar, an FBI translator who Edmonds took to ...

by hgartz444 | 1 year ago | 1,168 views

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9/11 Justice: Sibel Edmonds
Thank you Sibel.

by Gold9472 | 2 years ago | 3,312 views

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Sibel Edmonds Speaks Out on Whistleblower "Protections" (1/5)
FBI whistleblower Sibel Edmonds joins The Corbett Report to discuss the explosive information she uncovered while working in the FBI translation ...

by corbettreport | 7 months ago | 4,350 views

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gary hood and the last show ever - "sibel edmonds"
"gary hood and the last show ever" playing their ode to american patriot/whistleblower sibel edmonds - live at bar 169 in NYC january 2006

by oldchicano | 4 years ago | 9,990 views

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Sibel Edmonds. Everybody Knows.
Everybody knows about the details of Sibel Edmonds' case. Except the public. Call Waxman, demand hearings. [phone] www.letsibeledmondsspeak ...

by lukery2 | 3 years ago | 25,724 views

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KTM
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Sibel Edmonds and the heroin connection
Sibel Edmonds discusses Turkey's role in the heroin trade and US media's curious refusal to mention the 'real lords of Afghanistan's poppy fields ...

by lukery2 | 3 years ago | 5,746 views

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Kill the Messenger 1 of 5
Meet Sibel Edmonds, a gagged patriot most of us no nothing about. Now you do. Is her story believable? Who do you believe? Who benefits? What ...

by OurBraveNewWorld | 1 year ago | 6,053 views

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Sibel Edmonds, Daniel Ellsberg
Sibel Edmonds, Daniel Ellsberg discuss 911 Commission. July 04.

by lukery2 | 4 years ago | 4,665 views

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Sibel Edmonds' State Secrets Gallery of Rogues
More rogues can be found at Sibel Edmonds website: justacitizen.com. Please support her efforts to tell the American public what she knows.

by Oilwellian | 2 years ago | 7,606 views

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Who's Afraid of Sibel Edmonds?
The rest of the story can be heard here: sabbah.biz "Sibel Edmonds has a story to tell. She went to work as a Turkish and Farsi translator for the ...

by fischersrt | 11 months ago | 227 views

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Sibel Edmonds - Nuclear Trafficking- US & Turkish Officials & RAND
Sibel Edmonds testified under oath August 8, 2009. This segment covers testimony regarding the involvement of US and Turkish officials in a ...

by hgartz444 | 1 year ago | 1,111 views

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Robert Mueller asked about Sibel Edmonds case
Congresswoman Betty Sutton ask FBI Director Robert Mueller about Sibel Edmonds letsibeledmondsspeak.blogspot.com

by lukery2 | 3 years ago | 5,332 views

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Keith Olbermann, Sibel Edmonds: Government Secrets & Crimes
Keith Olbermann, Sibel Edmonds. National Security, Government Secrecy and State Secrets Privilege. letsibeledmondsspeak.blogspot.com

by lukery2 | 2 years ago | 7,738 views

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UNGAGGED - Sibel Edmonds Talks 1/5
Sibel Edmonds worked as a language specialist for the FBIs Washington Field Office. During her work with the bureau, she discovered and reported ...

by thefifthseal | 1 year ago | 7,690 views

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Sibel Edmonds discusses AIPAC (part one)
Sibel Edmonds discusses AIPAC and the Isreali Embassy

by lukery2 | 3 years ago | 9,955 views

1:26 3:48 5:40
J030 - What Sibel Edmonds Knows
Connect the dots for yourself.

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by jackelliston | 123 videos

•PLAYLIST
9:32 5:24 6:19
911
Terrorist attack? on September 1...

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• Sibel Edmonds. Everybody Knows.
• Keith Olbermann, Sibel Edmonds: Government Secrets & Crimes
by Szymi32 | 56 videos


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Karl Schwarz: 9/11 truth is a nonpartisan issue
Author, businessman and Republican turned Independent Karl Schwarz, demonstrates that the search for 9/11 truth is a nonpartisan issue. Mr ...

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Blood for Oil: Using Our Soldiers to Boost Oil Profits
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9/11 Sinificant Clips After the Fact

• Karl Schwarz: 9/11 truth is a nonpartisan issue
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• Karl Schwarz 9 11 truth and the War for OIL
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by ajhen77 | 32 videos



ty joye

[sandi66]

High Tide: From Nazi Loot In Vatican Vaults to Bribery Tears
•By Samuel Rubenfeld
Bribery:

Many countries are reacting to the Transparency International Index findings: New Zealand won’t be complacent at the top, India dropped in the rankings, more Russia reaction, a Ghana anti-corruption activist laments recent cases and Nigeria stays in the cellar. (Dominion Post, Indian Express, The Moscow News, Joy News, Nigerian Bulletin)

More from the Financial Task Force blog on the Transparency International index. And the FCPA Blog weighs in on the bribes of war.

AOL News puts the U.S. ranking in perspective: The country is tied with Belgium, a country that hasn’t had a government since April.

Is corruption increasing in the U.K.? (Sustainability Forum)

An Australian member of parliament burst into tears as a jury convicted him of bribery. (The Australian)

Jury deliberations in the former Ridgefield, N.J. mayor’s bribery trial stretched into a fourth day. (AP)

Prosecutors released more tapes in the Nogales, Ariz. mayor’s corruption trial. More here. (KVOA-TV, Antimoneylaundering.us)

FCPA Blog looks at seemingly divergent numbers in the Tidewater Inc. FCPA settlement.

Restrictions on the lobbyist at the center of the Alabama bingo bribery scandal are to continue, a judge ruled. (Montgomery (Ala.) Advertiser)

The head of the International Olympics Committee pushed FIFA to clean up its act. Meanwhile, the bidding work continues but a former executive committee member says they should stop until the probe is done. More here. (World Football Insider, USA Today, Reuters, Canadian Press)

The SFO cut a deal with the former PWS Holdings CEO despite a judge saying in a separate case that the agency should not be in the business of seeking plea agreements. (FCPA Blog)

The average size of a Russian bribe is now $1,390. (AFP)

An immaterial disclosure? (FCPAProfessor)

Money laundering:

Holocaust survivors asked the European Commission to investigate money laundering by the Nazis at the Vatican Bank. (Bloomberg)

Nasrullah Khan, who ran a money laundering service for organized crime gangs, received a 10-year prison sentence. (All Voices)

An Emmetsburg, Iowa real estate broker received a 25-count money laundering indictment and could face up to 475 years in prison if convicted on all counts. (Antimoneylaundering.us)

A jury was chosen in the money laundering trial of Tom DeLay, the former U.S. House majority leader. (AP)

Uruguay and the U.S. signed an agreement to cooperate on fighting money laundering and other financial crimes. (People’s Daily)

The FATF removed Azerbaijan from its list of countries requiring special monitoring for money laundering and terrorist financing. (News.Az)

Sanctions:

The U.S. is attempting to bring Iran back to the negotiating table over its nuclear ambitions, hoping that the sanctions have done enough damage to require cooperation. (Wall Street Journal)

Whistleblowers:

GlaxoSmithKline PLC agreed to pay a $750 million fine for manufacturing deficiencies at its Puerto Rico plant, and the whistleblower exposing the act will receive a $96 million payout. (Wall Street Journal, Guardian)

General Anti-corruption:

Afghan President Hamid Karzai appears to be delaying the implementation of his decision to ban private security contractors from the country. Meanwhile, Basirat Construction Firm, an Afghan contractor previously disbarred over corruption allegations, which it denies, was tasked to build police stations, and their product is so poor it is unusable. The company’s president, Obaidur Rahman, said the company bribed a U.S. official to help with an appeal when it was kicked off another contract, but he denied any impropriety. (Al Jazeera, BBC, McClatchy)

Kenya’s foreign minister resigned over an investigation into corruption involving a foreign property. (Voice of America)

The Croatian government faces a “no confidence” vote over the country’s deteriorating economy and lack of anti-corruption enforcement. (Balkan Insight)

Italian Prime Minister Silvio Berlusconi said his immunity from corruption investigations is “essential” because the judges are biased. (Bloomberg)

Corruption is already undermining the U.N. forest protection plan even though it hasn’t started yet. (Guardian Global Development Blog)

Can elections help Tanzania tackle corruption? (BBC)

Is the Kremlin about to be Wikileaked? (Foreign Policy)

Global corruption blocks progress on fighting poverty. (Care2)

Nigeria’s secret police intercepted an illicit arms shipment. (BBC)

blogs.wsj.com/corruption-currents/2010/10/27/high-tide-from-nazi-loot-in-vatican-vaults-to-bribery-tears/




ty nalmann

[sandi66]

Here's Your Talking Points For The Anti-Bank Bailout Revolution

The Daily Bail | Oct. 28, 2010, 8:05 AM


Don't get slapped in the face by the irony.

As you find yourself rooting against the banks, be prepared when the too-big-to-fails come begging for taxpayer help, because as we've been warning, a hastened request for TARP v. 2.0 is on the way. So let's see if we can get everyone following the same playbook before it happens.

This is the issue we need to remain aware of - the more banks suffer from mortgage putbacks and foreclosure fraud, the more likely it becomes that a second round of taxpayer assistance is requested next year by Geithner's replacement at Treasury. Chris Whalen has been warning for weeks -- here, here, and here -- that 2011 will bring another round of bank bailouts.

The strategy is simple, and we've been screaming along these lines since we launched. Punish the bondholders, sack managements, turn operations over to the FDIC, investigate fraud and prosecute.
Bill Black argued -- here and here -- that even our largest banks, that's you Citigroup (nyse:C), and Bank of America (nyse:BAC), could be successfully placed into government receivership, the same as Sheila Bair does for a half-dozen smaller banks every weekend.

Bill Black says that the FASB 157 Hour Of Power, and delusion, is over. Banks are still insolvent, and the Federal Reserve is complicit in the delusion due to massive MBS holdings. Put the banks with the most fraud into government receivership.
"Foreclosure fraud is the only thing standing between banks and Armageddon. The financial media treats Bank of America as if it were a legitimate bank rather than a "vector" spreading the mortgage fraud epidemic throughout much of the Western world."
Speaking of Sheila, she laid out a proposal just last week calling for bank bondholders to be punished in future bailouts.

Bair Proposes New Rules for Failed Banks Requiring Bondholders To Suffer Losses (Finally!)
And Janet Tavakoli made the argument in detail, before anyone else:

An Alternative Bailout -- One that aggressively hurts Bank Bondholders, and Doesn't VIOLATE the Spirit of Democracy

Joe Nocera recognized the irony earlier this week in the NYT:

I admit it: I want to see the banks feel some pain. Most people do, I think. Banks did terrible things during the subprime bubble, and they still haven’t paid any real price. I find myself rooting for judges to rule against banks in foreclosure cases. I would love to see these big investors put the serious hurt on Bank of America, which will encourage other investors to pile on. I know this colors my thinking. I can’t help it.

Yet I also know the flip side. If the foreclosure lawyers start winning a lot of cases, if judges halt foreclosures on a widespread basis, if investors start to extract billions upon billions of dollars from the banks — and if banks become seriously weakened as a result — we’ll be right back where we were two years ago. The banks will need to be saved for the good of the economy. The taxpayers will have to come to the rescue. That’s an appalling prospect too.

Here's more evidence:

William Buiter says bank bondholders must be held accountable - CNBC interview. Not sure how he feels now that he works at Citigroup.

And Arthur Levitt says:

Former SEC Chairman Arthur Levitt: Ban SIVs, Use Mark-To-Market Accounting, & Force Bank Bondholders To Take Losses
So the choice is simple - wait for the inevitable and get another Wall Street bailout jammed down your throat, or prepare wisely by circulating these basic talking points:

Punish the bondholders, sack managements, turn operations over to the FDIC, investigate fraud, find the balance-sheet bombs, then prosecute.
Repeat it over and over. It's even kinda catchy.

##

More proof that another bailout mind warp is on its way...


www.youtube.com/watch?v=cVTfsOPMcns&feature=player_embedded


Watch this. Clip runs 30 seconds. Seminal quote.

"We can either have a rational resolution to the foreclosure crisis or we can preserve the capital structure of the banks. We can't do both."
Let me repeat myself from above:

So the choice is simple - wait for the inevitable and get another Wall Street bailout jammed down your throat, or prepare wisely by circulating these basic talking points:

Punish the bondholders, sack managements, turn operations over to the FDIC, investigate fraud, find the balance-sheet bombs, then prosecute.

Repeat it over and over. It's even kinda catchy.

www.businessinsider.com/anti-bank-bailout-revolution-2010-10

[sandi66]

Fifth Third Processing cuts pricing on $1.78B of term loans
Bloomberg News • October 28, 2010



Fifth Third Processing Solutions LLC, the closely held payment services provider, revised the sizes of and cut pricing on two term loans it's seeking to refinance debt and pay for an acquisition, according to a person familiar with the negotiations.

The company, a joint venture between private-equity firm Advent International Corp. and Cincinnati-based Fifth Third Bancorp, increased the size of its first-lien term loan by $75 million to $1.575 billion and reduced a second-lien term loan's capacity by the same amount to $200 million, said the person, who declined to be identified because the terms are private.

Fifth Third Processing will pay 4 percentage points more than the London interbank offered rate on the first-lien debt, the person said. The company had previously offered a margin of 4.25 percentage points to 4.5 percentage points over Libor, the rate banks charge to lend to each other.

The company cut the spread on its second-lien debt by as much as 0.5 percentage point to 6.75 percentage points over the lending benchmark, the person said. The loans will have a 1.5 percent Libor floor, which is 0.25 percentage point less than previously proposed for the second-lien debt.

Both loans will be issued at 99 cents on the dollar, which is unchanged for the first-lien and 1 cent tighter for the second-lien debt, the person said. So-called original-issue discounts reduce proceeds for the company and boost the yield for investors.
Soft-Call Protection

Lenders to the second-lien loan will have a soft-call protection of 102 cents in year one, the person said, meaning the company would have to pay 2 cents over face value to refinance the debt during its first year. The premium drops to 1 cent over par for the next year.

Goldman Sachs Group Inc., Bank of America Corp., Credit Suisse Group AG, JPMorgan Chase & Co. and Morgan Stanley are arranging the financing, which also includes a $150 million revolving credit line.

Fifth Third Solutions will have a margin of 3.5 percentage points over Libor on revolver borrowings and a 0.5 percent fee on the unused portion of the credit line, which are unchanged, the person said.

Lynn Rhoads, a spokeswoman for Fifth Third Processing, didn't immediately return a message left at her office. The company said Sept. 15 that it will purchase National Processing Co. of Louisville

Moody's Investors Service rated the first-lien loans Ba3 and the second-lien debt B2. Standard & Poor's rated the first- lien term loan due 2016 and revolver maturing 2015 BB- and the second-lien borrowing expiring 2017 B-.

In a revolving credit facility, money can be borrowed again once it's repaid; in a term loan, it can't. First-lien debt is repaid first in a bankruptcy or liquidation, second-lien debt is repaid next.

Fifth Third Processing's total debt to earnings before interest, taxes, depreciation and amortization will be 4.6 times, the person familiar with the talks said. Leverage through the first-lien debt will be 3.9 times.

news.cincinnati.com/article/20101028/BIZ/10290310/Fifth-Third-Processing-cuts-pricing-on-1-78B-of-term-loans

[sandi66]

Your Savings Will Be Funding ForeclosureGate

-- Posted Thursday, 28 October 2010

By Daniel R. Amerman, CFA



Overview



As a result of apparent systemic incompetence coupled with fraud, it appears there is a chance that most real estate foreclosures may come to a screeching halt on a nationwide basis in the United States. What is missing from the headlines is the real impact on you and I, and how we will be the ones bearing the pain. To understand the implications of this extraordinary situation, we must first pierce a triple charade.



The first charade is the joke which the banking industry - and their regulators - in the United States has been making of contracts and the law. The second charade is the idea that the banks will bear the consequences for their gross negligence and lies, when in fact it is the US government and Federal Reserve that will be bearing the full costs (which is to say, you and I). The third charade is the idea that taxes will pay for these extraordinary expenses, when the only credible source of sufficient funds is ultimately the destruction of the value of the US dollar.



The economic bottom line (as is so often the case in the these troubling times) is that a massive redistribution of wealth is underway, and most of the US population has no idea what is going on. Which means that the older savers and investors who will be paying most of the real costs for this fiasco, will never understand what happened – they'll just pay a devastating price as the purchasing power of their life savings plunges. Fully understand what is happening, on the other hand, and you can not only protect yourself, but position yourself so that wealth is redistributed to you rather than away from you.



The Risk Is Taken By You & I, Not The Banks



Most people have little or no idea how the mortgage market actually works in 2010. There is this outdated idea that banks make mortgage lending decisions, and stand to lose if they make bad decisions with the investment of their money. But effectively speaking, the banks don't actually make the decisions about who gets loans, nor do they guarantee the loans, nor do they buy the loans. The government does all of that, as explained in my article "Futile Attempts To Reflate The Housing Bubble & The Deadly Cost", linked below:



danielamerman.com/articles/Reflatep.htm



Large scale US government intervention in the mortgage markets is nothing new, as I wrote in my book, Mortgage Securities (Probus, 1993). The US government has played a crucial role in mortgage credit since the formation of the Federal National Mortgage Association (Fannie Mae) in 1938, followed by the formation of Ginnie Mae and Freddie Mac. However, in the wake of the subprime mortgage crisis, the US government has gone from being a major player - the dominant player - to being almost the only game in town, on an unprecedented number of levels.



Few private lenders want to take genuine mortgage credit risks in today's housing market. So the norm for mortgage bankers is to originate "conforming" loans in as many cases as possible, with the standards for those loans being set by FHA, Fannie Mae and/or Freddie Mac, all of which are currently 100% owned by the US government. Because compliance with government standards is required for a loan to be "conforming", the federal government effectively makes the credit decisions for the overwhelming majority of mortgage originations in the US. It is government-controlled mortgage underwriting criteria which determine who is allowed mortgages, and how much they can borrow.



What gives the federal government the ability to set the criteria is that it takes all the credit risk for conforming mortgages, and guarantees the payment of principal and interest to investors. As soon as they are closed, conforming mortgages are nearly always quickly turned into Fannie Mae, Freddie Mac or Ginnie Mae mortgage securities, which are guaranteed in full by the US Government.



By 2009 and early 2010, however, that extraordinary degree of government intervention was not enough. The US government wanted something else that was without precedent in US financial history: it wanted mortgage rates to be lower than the rates the free market would bear. So the Federal Reserve effectively (on a net basis) bought almost all mortgage originations for over a year, once the mortgages had been securitized and turned into government guaranteed mortgage securities.



So the US government decides who qualifies for mortgages, the US government guarantees the mortgages, and the US government buys the mortgages (using money created directly out of thin air as covered in my article "Creating A Trillion From Thin Air").



danielamerman.com/articles/Trillions.htm



What that means is that when something goes wrong, and money can't be collected from homeowners who are no longer making payments, then it is the citizens of the US who are already essentially taking 100% of the risk. We're the ones guaranteeing the mortgages, and with recent mortgage originations, we're most likely the mortgage security owners as well.



The Banks Have Been Making A Joke Of The Law



When seen from this light then, we can understand that far from providing the money and taking the credit risk, the role of the banking institutions in the mortgage market in the United States is to follow government instructions on the origination and servicing of mortgages, which the US government buys for itself, and guarantees to itself. Unfortunately, the collective banking industry has shown itself to be incapable of handling even these tasks.



With genuine capitalism, in a genuine free market, those employees responsible for the current fiasco - as well as their supervisors and top bank executives - would all pay through losing their jobs, and the shareholders would pay with the loss of their investments. Which would then provide keen motivation for the next round of banking executives and shareholders to make sure they get it right the next time.



If you want to understand a good part of the reason why this crisis exists, it is because that situation of genuine capitalism and free markets does not exist, and obviously has not existed for some time. It was the incompetence and negligence of the nation's major banks that created the mortgage crisis in the first place, with even the most basic due diligence not being performed or acted upon, in the quest for ever larger bonuses for the executives involved.



However, most of those executives remain with their jobs intact, and the banks have not closed their doors. Instead the United States government in a minor role, and the Federal Reserve playing the major role, have made essentially unlimited funds available to bail the bankers out of their mistakes, while still keeping their jobs. In light of this well understood situation, we can get a sense as to how the banks could be behaving so poorly in their basically clerical duties with regard to the mortgage market at this time. No matter how many mistakes they make, no matter how poorly they perform, the banks will be preserved and protected as institutions because it is held to be a national priority to do so. With the rest of the nation's citizens picking up the tab for this.



The Biggest Charade: Saying Taxes Will Pay



Perhaps the biggest and most dangerous charade is the idea that because the US government is guaranteeing the mortgages, and is the owner of so many of the mortgages, that the taxpayer will be taking the hit in the form of higher taxes for the likely huge financial losses that will be associated with this mortgage malfeasance, in one form or another.



But the problem with that assumption, as is the case in so many other areas, is that the US government long ago passed the point where it became reasonable to believe that taxpayers could pay for all the promises. We're already running official deficits well in excess of $1 trillion per year, not accounting for the additional direct monetary creation in even larger amounts by the Federal Reserve. We have no means of paying for the baby boomer retirement promises, nor for the extraordinary international debts we are currently bearing, nor for the ongoing stimulus packages that continue to come out in a series of one after another.



These obligations already add up to over $1 million per non-retired and above poverty line household, as covered in my article "Bailout Lies Threaten Your Savings" ( danielamerman.com/Video/BBL1B.htm ). The only credible means of paying for all of these vast obligations is the same means that nations have used again and again over the course of history:



The government devalues the currency through inflation.



Inflation effectively repays much of the debts, and in the process wipes out the value of government bonds for unfortunate bond investors. Even more profoundly, inflation destroys the value of the life savings for the nation's citizens. Indeed, for savers, there is not a more expensive means of repaying debts than a high rate of inflation, even if it seems like the magical cure to government officials in power at that time.



When we look at this fast developing crisis with extraordinarily expensive implications for millions of problem mortgages across the United States, we need to clearly understand that it is not the banks that will be bearing the cost, nor will it be the taxpayers who are primarily bearing the cost, but rather it will be the savers and investors within the United States as well as foreign investors that hold US dollars or securities. Ultimately the only source that is large enough to pay for this crisis, when added to all of the other crises already in existence, is an accelerated and more complete destruction of the value of the US dollar.



Three Houses & "Following The Money"



Let's consider three houses that have gone into foreclosure, due to each of their homeowners no longer having jobs. Each of the mortgages is for $350,000, and the homes are located in California, Nevada and Florida. In each case, the bank servicing the mortgage has committed fraud in their standard foreclosure process, as an effective matter of bank policy. With the bank having said (in essence) "we don't have to follow these legal technicalities or the letter of the law in general, because well, we're a bank, and that's not our industry-standard."



For the sake of illustration, we will also assume that each one of these foreclosure flaws is effectively "fatal", and the mortgage lender never does get the house. So there is a 100% loss on investment.



The mortgage in California was "conforming", and had been purchased by the Federal Reserve, after having been converted into a Fannie Mae mortgage-backed security. Fannie Mae guaranteed the mortgage – so Fannie Mae (which is 100% owned by the US government) takes a straight up $350,000 loss, and pays the Federal Reserve. In other words, the citizens of the US just took a $350,000 loss. Which the US government can't pay for, so the Federal Reserve creates the money out of thin air, to provide funds to buy the treasury bonds, that give the US government the money to pay the Federal Reserve the $350,000.



(Fannie and Freddie are making noises about going after the banks in these cases, but even if that actually happens we just move to one of the two other categories below.)



The mortgage in Nevada was "non-conforming", with no federal guarantees, and had been thrown into a huge pool with thousands of other mortgages, with a dozen different types of securities then carved out and sold to investors around the world. When this extraordinarily complex financial instrument runs into an unsympathetic and literal minded local judge, it turns out that it is legally unclear who the owner of the mortgage is. So there is no foreclosure, the homeowner keeps his or her house, and the $350,000 that actually funded the purchase of "their" house is a 100% loss to investors.



The next step is a bit unclear and depends on the specifics of the securities offering, but let's assume that the banks involved are legally found to have misrepresented the mortgage securities at the time that they were sold, and required to cover investor losses. So the major banks in the United States have a massive liability which they cannot handle, and would bankrupt them if they had to pay it themselves.



The banks need not worry, as the federal government has already determined that will not be allowed to happen. Instead, the massive losses merely trigger another round of bailouts, and the US government steps forward to cover the $350,000 individual mortgage loss (and hundreds of thousands or millions more like it). Except for that troublesome technicality of the US government not having the $350,000. So again, the Federal Reserve directly creates the $350,000 out of the void, uses the new dollars to buy treasury bonds, which gives the federal government the $350,000, and the federal government gives the $350,000 to the banks which give it to the investors to cover the losses from the banks' mistakes.



The mortgage in Florida is very similar to the mortgage in Nevada, except that the bank is not one of the anointed ones. Perhaps the bank had only been committing small-scale fraud on a local basis, rather than massive national fraud, or perhaps the bank executives have been failing to make their expected congressional campaign contributions. The bank is required to make up investor losses that resulted from the bank's negligence, but can't do so, and it is taken over by the government. With the FDIC covering the losses and paying off the depositors. Governmental accounting aside, the FDIC is just as broke as the rest of the federal government, and doesn't have the $350,000. So the Federal Reserve brings forth $350,000 out of the nothingness, buys $350,000 worth of treasury bonds, the US government takes the new cash and gives it to the FDIC, which uses the money to pay off bank depositor claims. (There is also the interesting question of whether the government would stiff the mortgage security investors and not make good the losses, thereby sending major shockwaves into other corners of the financial world, including already stressed pension funds.)



Do you see a pattern here?



A bank that projects financial expertise to the world turns out to be unable to handle clerical and administrative functions, or maintain clear ownership of assets.



These bank errors result in numerous homeowners across the United States "winning the lottery" and being given the homes they live in, without having to repay the mortgages that paid for their homes.



This leads to massive investor losses. Those losses are covered by the federal government in one form or another, whether it be mortgage security guarantees, further rounds of bailouts, or federal deposit insurance payouts.



The federal government does not have the money to pay for those losses, so they are paid for by direct new monetary creation by the Federal Reserve. This may look like "free money", and is being treated as such by the federal government and Federal Reserve these days, but there is no such thing as free money. Every time the Federal Reserve creates another $350,000, or another billion, or another trillion, it brings forward in time - and increases the severity - of the inflationary explosion that is coming.



Which risks the annihilation of the life savings of all savers in the United States, as well as overseas investors holding US dollars and dollar-denominated securities.



Interpreting The Headlines



Week after week, the financial media have been filled with stories of the trouble the banks have gotten themselves into. These headlines tend to create the impression that those banks are in a lot of trouble. Indeed, they are.



But the banks can't pay for their way out of the trouble that they are in. So the US government will do so, with the only question being the specifics of the form of the payout. Except the US government can't pay for these losses either, as it's already effectively bankrupt, and running huge deficits that can be expected to only grow larger in the future.



So the colossal losses are "paid" by the Federal Reserve creating new money on a fantastic scale. The Federal Reserve, however, possesses neither real economic resources nor taxing authority. Ultimately, all it can do is dilute the money supply.



Which dilutes the value of money. Which brings us back to your savings.



When piercing through the multiple levels of deception, every time you read about another huge problem with Foreclosuregate, understand that it is not the bank that is in deep trouble so much as it is the value of your savings, and your standard of living in future years.



Protecting Yourself



Perhaps the most natural reaction to this article is one of outrage, followed by flight. This is a very understandable reaction. The banks, the US government, and the Federal Reserve have all been behaving in an outrageous fashion that works to the benefit of insiders, while cheating almost the entire rest of the population. The simple solution when the outrage reaches a sufficient point, is to pull all you can out of paper investments and symbolic currencies, put them into gold, and hunker down to survive the still developing crisis.



Unfortunately, we live in a complex and deeply unfair world, that makes mincemeat of emotional reactions and simple solutions. As shown in step-by-step, simple – but irrefutable – detail in the article "Hidden Gold Taxes: The Secret Weapon of Bankrupt Governments" linked below, a simple solution of just buying gold leaves you handing a good chunk of your starting net worth - or perhaps even most of your starting net worth - over to the government by the time all is said and done. The way the government under existing laws effectively confiscates the wealth of gold investors in a highly inflationary environment is little understood by most gold investors, but should form the central point for their planning.



danielamerman.com/articles/GoldTaxes1.htm



Let me suggest an alternative approach, which is to study, learn and reposition. Almost all financial and economic articles that you see today are really about the upcoming re-distribution of wealth, whether those words are used in the article or not. Learn not just how wealth will redistribute, but how unfair government tax policies (that can be relied upon to grow still more unfair) will cripple most simple methods of attempting to survive inflation.



Then, yes – buying gold (and perhaps alot of it) can be one key component of a portfolio approach, as discussed in my Gold Out-Of-The-Box DVD set. Use multiple components in a dynamic process over the stages of the crisis, with each component doing what it does best, and position yourself so that wealth will be redistributed to you in a manner that reverses the effects of government tax policy. So that instead of paying real taxes on illusionary income, you're paying illusory taxes on real income. And the more outrageous the government actions – the more your after-inflation and after-tax net worth grows.



Do you know how to Turn Inflation Into Wealth? To position yourself so that inflation will redistribute real wealth to you, and the higher the rate of inflation – the more your after-inflation net worth grows? Do you know how to achieve these gains on a long-term and tax-advantaged basis? Do you know how to potentially triple your after-tax and after-inflation returns through Reversing The Inflation Tax? So that instead of paying real taxes on illusionary income, you are paying illusionary taxes on real increases in net worth? These are among the many topics covered in the free “Turning Inflation Into Wealth” Mini-Course. Starting simple, this course delivers a series of 10-15 minute readings, with each reading building on the knowledge and information contained in previous readings. More information on the course is available at DanielAmerman.com or InflationIntoWealth.com.



Contact Information:



Daniel R. Amerman, CFA



Website: danielamerman.com/



E-mail: [e-mail]



This article contains the ideas and opinions of the author. It is a conceptual exploration of financial and general economic principles. As with any financial discussion of the future, there cannot be any absolute certainty. What this article does not contain is specific investment, legal, tax or any other form of professional advice. If specific advice is needed, it should be sought from an appropriate professional. Any liability, responsibility or warranty for the results of the application of principles contained in the article, website, readings, videos, DVDs, books and related materials, either directly or indirectly, are expressly disclaimed by the author.



Copyright 2010 by Daniel Amerman


-- Posted Thursday, 28 October 2010

news.goldseek.com/GoldSeek/1288294140.php

[sandi66]

October 28, 2010, 1:50 PM ET
Blackstone: FDIC Would Support BankUnited IPO


By Shasha Dai
During a conference call with reporters today to discuss quarterly results, Blackstone Group President Tony James didn’t deny media reports that BankUnited Financial Corp. is contemplating an initial public offering. An IPO filing, which is expected this week, would come just over one year after the acquisition of the bank by a consortium of which Blackstone is part.

When asked about the swift trip to the public market and possible implications given the Federal Deposit Insurance Corp.’s wariness of private investors’ commitment to their bank investments, James said, “We are working closely with the FDIC on this. We wouldn’t do anything that the FDIC isn’t supportive of.”

“The raising of equity capital would strengthen the bank further,” James said. “And the FDIC likes that aspect of things.”

James said being public would also give BankUnited additional currency to purchase failed banks that are too small for stand-alone acquisition. “An IPO would give BankUnited the wherewithal and capital base to do that,” he said.

Andrew Gray, an FDIC spokesman, said he doesn’t have immediate comment on the matter since the IPO isn’t official yet.

Private equity-backed companies are lining up to go public, in part because funds that are nearing the end of their investment period are looking to sell down their holdings and return money to investors. According to a recent report from Ernst & Young LLP, PE-backed companies account for nine of the ten largest pending IPOs. But the huge backlog caused some to wonder whether all the IPO candidates would be table to get out of the gate - and if so, at what prices.

Later on the call, James qualified his comments by saying, “It is not clear whether the IPO will happen. If it doesn’t, we would be acquiring [smaller banks] with a more limited capital base.”

- with reporting by Amy Or.



blogs.wsj.com/privateequity/2010/10/28/blackstone-fdic-would-support-bankunited-ipo/

[sandi66]

Wells Fargo erred in thousands of foreclosures
Oct. 28, 2010, 1:52PM


WASHINGTON — Wells Fargo admitted Wednesday it made mistakes in the paperwork for thousands of foreclosure cases and promised to fix them.

The San Francisco-based bank said it plans to refile documents in 55,000 of the cases by mid-November. The company said not all those cases included errors but didn't say how many thousands did.

Wells Fargo described the mistakes as technical and said it has no plans to halt the foreclosure process.

"We don't believe that there are instances in which the foreclosures would not have occurred otherwise," said Teri Schrettenbrunner, a Wells Fargo spokeswoman. The documents are being refiled in the 23 states where a judge's approval is needed to complete a foreclosure.

Wells Fargo & Co.'s CEO, John Stumpf, has declined to join Bank of America Corp., Ally Financial Inc.'s GMAC Mortgage and other banks in suspending foreclosures because of flawed paperwork that surfaced at several large banks.

On a conference call with investors this month, Stumpf said the bank is "confident that our practices, procedures and documentation" are accurate.

Depositions of two Wells Fargo employees have called the company's foreclosure practices into question. A Fort Mill, S.C.-based Wells employee said in a deposition taken last March that she signed between 300 and 500 foreclosure documents per day,

In another deposition taken in May, another Wells employee said he verified only the dates on up to 150 foreclosure documents he signed daily and relied on co-workers to ensure that other information was correct.

Bank of America is scheduled to meet Thursday with state officials investigating allegations the bank rushed the foreclosure process without properly reviewing documents.

A person briefed on the matter confirmed the parties will have a preliminary discussion about issues related to the foreclosure documents. The person did not give details about the meeting or who will participate. The person who spoke on condition of anonymity was not authorized to speak.

The Charlotte N.C.-based lender said in a statement: "We have been cooperating with the attorneys general and continue to have dialogue and share information with these important stakeholders."

Bank of America resumed foreclosures this week after halting them temporarily to review and fix flawed documents.

Attorneys general in all 50 states and the District are jointly investigating whether paperwork and legal procedures were handled properly in hundreds of thousands of cases.

Bloomberg News reported earlier in the day that state attorneys general were scheduled to meet with lenders this week on the foreclosure-document probe and had conference calls with several lenders, also known as loan servicers.

Iowa Attorney General Tom Miller is leading the multistate probe. Geoff Greenwood, a spokesman for Miller, confirmed that a meeting is scheduled for Thursday. He declined to comment on which banks are expected to attend.

"We have begun the process of communicating," with the industry, he said.


--------------------------------------------------------------------------------


www.chron.com/disp/story.mpl/ap/business/7267052.html

[sandi66]

Homeowners Latest Grind: Foreclosure Mills
October 28th, 2010. By LucyC


It seems that the banks just can’t stay out of the news these days—for all the wrong reasons. In addition to claims that they charge excessive fees and suspect overdraft charges, several banks are now facing lawsuits filed by emboldened homeowners, presumably with nothing left to lose, over their foreclosure procedures. And it looks like the homeowners may just have grounds.

Case in point, Bank of America (BoFA) was hit with a class action lawsuit in New Jersey last week by homeowners who allege the lender disregarded foreclosure process rules. Earlier this month BoFA imposed a nationwide moratorium on foreclosures and the sale of foreclosed homes after a government agency told BoFA it was worried about documentation problems.

Documentation problems? Read on…

It seems the banks have been hiring so-called “robo signers” or “affidavit slaves”—employees who literally sign hundreds of foreclosure documents a day, according to the Wall Street Journal, without carefully reviewing their contents. The Washington Post recently ran a story on a man who has signed as many as 10,000 foreclosure documents in one month. And, the suit brought against BoFA cites a statement made by a bank official in a Massachusetts foreclosure case who admitted signing thousands of foreclosure complaints without reviewing them.

Keep in mind that these people’s signatures—robo signers’ signatures—act as witness to the accuracy of home foreclosure documents.

And, in case you’re wondering—this is not a small problem or uncommon practice, hence the reason for the temporary mortgage foreclosure moratorium. For context, and to quote the WSJ again, “As of August [2010] there were more than 4.4 million home loans that were either in the foreclosure process or 90 days past due,” according to their sources. And “Since 2006, about 6.4 million homes have been lost through the foreclosure process.” That’s a lot of homes, and even more paperwork—not to mention an awful lot of people who have been made homeless—and needlessly so in some cases, it may turn out.

Interestingly, BoFA wasn’t the only bank that halted foreclosure processes. JP Morgan Chase & Co and Ally Financial Inc. also agreed to take a closer look at their paperwork in 23 states where a court approval is required to foreclose on a home. JP Morgan alone reportedly suspended 56,000 foreclosures.

But the moratorium didn’t come out of any sense of good corporate citizenry or initiative to do the right thing, but rather because state attorney generals are investigating wrongdoings on legal paperwork needed to foreclose homes and other properties that may not live up to legal requirements.

That “wrongdoings on legal paperwork” also appears to involve small law firms that act as “Foreclosure Mills”—essentially running the paper work through without due process. Among the allegations made against BoFA in the lawsuit, cited in a recent article by Law.com, is the claim that lawyers called by judges, in this case in New Jersey, to foreclosure case management conferences frequently don’t show up. “Worse still, New Jersey’s judges don’t seem to be bothered by such behavior,” Lawrence Friscia, head of a law firm that counsels distressed homeowners told Law.com. “There’s a shocking deference given to Bank of America on the part of the judicial system.”

One of the plaintiffs in the BoFA case, Jose Grullon of Passaic, NJ, claims that his binding arbitration agreement ending his foreclosure was ignored by BoFA. And Tanya Beals, the named plaintiff in the BoFA suit, also of New Jersey, claims she was found in default by BoFA after she began making mortgage payments at a reduced rate which she had successfully negotiated with the bank.

The named defendants in the BoFA case are Bank of America and two subsidiaries, LaSalle Bank and BAC Home Loans Servicing, and they are accused of “an undisciplined rush to seize homes” through “pervasive and willful disregard of knowledge, facts and statutes.”

But BoFA is not the first bank to face these types of charges. Just a few weeks ago, SunTrust was hit with a class action lawsuit filed by a couple in Ohio who allege that after successfully negotiating mortgage restructuring under the United States Treasury’s Home Affordable Modification Program (“HAMP”) SunTrust then failed to follow through on the agreements, and wrongfully refused the permanent modifications and in some cases forced homeowners into defaults.

At the beginning of October, GMAC was also served with a potential class action over its foreclosure practices. This suit seeks to represent homeowners in Maine. “Depositions of GMAC employees revealed that they do not verify the truth of information necessary to give GMAC the right to foreclose when they sign these court documents and that these improper practices have been in place since at least 2004,” the suit claims.

While some pundits say the moratorium won’t change anything—it’s just delaying the inevitable, I would say that remains to be seen. BoFA reportedly holds one in five mortgages in the US. If even a fraction of those turn out to come under scrutiny, I would think it couldn’t help but have an impact. Most importantly, if you’re a homeowner, and any of the above sounds familiar—take action.



www.lawyersandsettlements.com/blog/homeowners-latest-grind-foreclosure-mills-05493.html

[sandi66]

The best explanation on the ForeclosureGate

www.youtube.com/watch?v=yXrkubSA2SA&NR=1

Foreclosuregate - NOT simply "lost" paperwork! - Karl Denninger discusses in detail - Excellent explanation of the foreclosuregate -fraud

[sandi66]

TRICARE fee increases might actually happen this time

Dr. George Peach Taylor Jr. says he doesn’t yet know if President Barack Obama’s defense budget for fiscal 2012 will propose
higher TRICARE fees for military retirees or any other beneficiary group.

Published: 10/30/1012:05 am


Dr. George Peach Taylor Jr. says he doesn’t yet know if President Barack Obama’s defense budget for fiscal 2012 will propose higher TRICARE fees for military retirees or any other beneficiary group.

If past budget requests are any guide – going back deep into the George W. Bush presidency – then higher TRICARE fees could be sought anew and perhaps now a more deficit-conscious Congress will be receptive.

But in phone interview, Taylor, who serves temporarily as the Defense Department’s top health official, mostly discussed his priorities and those of Defense Secretary Robert Gates. These included sustaining wartime medical support, improving wounded warrior care, and coordinating better delivery of services across the $50-billion-a-year military health system.

That system’s top priority, said Taylor, is ensuring that fighting forces have the medical teams on scene that they need – properly equipped, properly staffed and with the most advanced technology and procedures available anywhere.

A second priority is that warriors get the best possible care to recover from injuries, particularly lost limbs, traumatic brain injury and post-traumatic stress disorder – the signature injuries of current wars.

Meanwhile, field-level policies have been changed to better protect those exposed to bomb blasts, so all receive medical evaluations after an incident and are not returned to the fight with undetected injuries.

Research is advancing to find biomarkers to detect brain injury. DoD and VA continue to partner on psychological health issues, exploring alternative therapies and more effective clinical guidelines to PTSD.

A retired three-star officer and former Air Force surgeon general, Taylor is deputy assistant secretary for force health protection and readiness. But until Congress confirms Dr. Jonathan Woodson, Obama’s nominee to be assistant secretary of defense for health affairs, Taylor is performing those duties. So he is DoD’s top health official and Gates’ principal health advisor on health budget and policy, including TRICARE.

On whether higher TRICARE fees are in the offing, Taylor said, “Every year for most of the years I’ve been around, the department has proposed changes to the benefit structure.”

Congress has blocked most attempts to raise out-of-pocket TRICARE costs, even for working-age retirees and their families. But some key lawmakers are signaling it may be time to allow at least modest fee hikes.

At a Sept. 28 Armed Services Committee hearing, ranking Republican Sen. John McCain of Arizona seemed to be setting the table, asking Deputy Defense Secretary Bill Lynn, “Isn’t the biggest cost escalation to DoD today in health care?”

Lynn conceded medical is the “largest account … growing at a substantial pace” and that in “the fiscal year 2012 budget I think we will be proposing to Congress some ideas about how to restrain health care costs.”

Pressed by McCain, Lynn agreed that health costs are growing “dramatically,” in some recent years by 10 percent or higher.

That same day, at a meeting with reporters, Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, called health care costs “unsustainable” and said that after 15 years it’s time to raise TRICARE fees.

A few days later the Office of Personnel Management announced that health insurance premiums paid by federal civilian workers and retirees will jump in 2011 an average of 7.2 percent. That could apply more political pressure on Congress to accept some sort of TRICARE fee increase.

What might be proposed for the fiscal 2012 budget is still “in department negotiations,” Taylor said. He said he doesn’t yet know what DoD will sign out, or what the White House will accept.

www.thenewstribune.com/2010/10/30/1402033/tricare-fee-increases-might-actually.html

**************************

* Okie Oil Man Post: One Dinar 10/30/10
October 30th, 2010 11:27 pm · Posted in CHATS / POSTS
TIDBIT: This gentleman is a very good friend of mine, and I happen to know who his sources are. Should I see ONE negative comment about him, you will be officially blacklisted from my site. Go ahead… try me! I am at the end of my patience once again with those who are trying to destroy the spirit of collaboration and sharing on this site by simply rendering an opinion that has NO VALUE and is given with the sole purpose of ripping the poster. His post is not meant to “pump” in ANY WAY. I know his intention. He is simply excited about what he was told, and apparently couldn’t contain himself. I never would have shared this openly here, despite knowing what he’s talking about, but since it came FROM him to me, and since HE posted it elsewhere, I feel I should post it here. We wait… – DD

JUNE 6TH 1944 THE ALLIED EXPEDITIONARY FORCE LAUNCHED THE BIGGEST MILITARY OPERATION IN HISTORY. ON THIS COMING WEDNESDAY THE LARGEST FINANCIAL OPERATION SINCE THE MARSHALL PLAN IN EUROPE. AND THE McARTHUR PLAN IN JAPAN IN WORLD WAR 2 WILL OCCUR.

IT WILL INVOLVE A MID-EAST COUNTRY (GUESS WHICH ONE) THAT WILL ALWAY’S BE REMEMBERED IN OUR MIND’S AS OUR D-DAY (LIBERATION DAY FINANCIALLY). THIS INTEL IS FROM THE HIGHEST SOURCE POSSIBLE.

THE DATE AND RATE ARE NOW SET IN STONE. PAST MISTAKES AND MIS-UNDERSTANDING’S HAVE NOW BEEN ALL IRONED OUT. LET’S GIVE PRAISE AND THANK’S FOR THE FORTH-COMING MIRACLE.

theiraqidinar.com/2010/10/30/okie-oil-man-post-one-dinar-103010/

[sandi66]

The Goldsmiths, Part CLXV





-- Posted Friday, 29 October 2010 | Digg This Article | Share this article| Source: GoldSeek.com



By R. D. Bradshaw



On April 11, 2005, Mr Ashley Mote, Member of the European Union Parliament, addressed the Parliament as follows:



Transcript:

“Mote (NI). Mr President, I wish to draw your attention to the Global Security Fund, set up in the early 1990s under the auspices of Jacob Rothschild. This is a Brussels-based fund and it is no ordinary fund: it does not trade, it is not listed and it has a totally different purpose. It is being used for geopolitical engineering purposes, apparently under the guidance of the intelligence services. I have previously asked about the alleged involvement of the European Union’s own intelligence resources in the management of slush funds in offshore accounts, and I still await a reply. To that question I now add another: what are the European Union’s connections to the Global Security Fund and what relationship does it have with European Union institutions?”



Mote’s videotaped request has since been made a matter of the public record. It was at youtube.com on Aug 13, 2009 as well as numerous other sites. Mr Mote did not receive a response to his question. Consequently, he followed up later with a written request. Again, he did not receive a response on the then written request.



Mote’s web site (www.ashleymote.co.uk) gives his biography as follows: “Ashley Mote is an elected Member of the European Parliament. Representing the South Eastern side of England (since 2004) he carries the wishes of the voters to be free from the European Union. He wishes his country to govern itself again. He has made good use of taxpayers’ money to have his own EU paid for Campaign Bus which tours his Region informing everyone of EU waste and corruption. His website is full of video speeches where (he) eloquently does his job in EU Parliament pointing out EU Corruption. The EU is a tool of the New World Order. The UK is fighting back! Discover the real and corrupt face of the European Union.”



Ashley Mote also adds: “I have no quarrel with the people of Europe. My quarrel is solely with their bureaucratic system of unitary government called the European Union. It has nothing in common with that greatest of Anglo-Saxon inventions - an accountable system of parliamentary democracy. The EU's interference in British affairs over the last 30 years or so has wrought great damage on so many aspects of our life and enterprise. It has virtually destroyed the British fishing industry. It has undermined our ability to feed ourselves. It sucks over £1.4 million every hour out of British taxpayers pockets. It has burdened British businesses with more than 30,000 regulations - every one of which we managed perfectly well without before we joined what was supposed to be a Common Market. And whenever I have asked ministers or other EU enthusiasts to tell me what the benefits of EU membership are they fall into a dumb and embarrassed silence.”



Whether it has been Mr Mote’s opposition to the EU or his embarrassing question about the Global Security Fund, something touched off the British government and it responded with a lengthy and detailed investigation into the life of Mr Mote. In time, the British government indicted Mr Mote for fraud and tried him in front of a British jury. He was found guilty of offenses totaling £65,506, occurred between February 1996 and September 2002 while Mote was living in Langley, West Sussex.



On Aug 17, 2007, the Portsmouth Crown court found him guilty of 21 offenses: eight charges of false accounting, eight of obtaining a money transfer by deception, four of evading liability and one of failing to notify a change of circumstances. The 71-year old Mote was sentenced to prison for nine months.



Christopher Edward Harde Story



In time, Mote’s famous short question to the European Parliament evoked some interest from other interested persons and he was asked or prompted to discuss the basis for his question. He traced it to a man he had known for years--Christopher Edward Harde Story of Oxford--a British author of many books, an investigative journalist, and publisher of the following newsletters: International Currency Review, Economic Intelligence Review, Global Analyst, Soviet Analyst, Arab-Asian Affairs, Eastern Europe Analyst, World Reports, and several other occasional titles.



In a later tribute to Story, Mote said that much of Story’s best investigative work was done in the USA, where he had highly valued internal sources of information within the Federal Reserve Bank, the CIA, and within the financial and political communities as a whole. He noted that his speech on the Global Security Fund, made in Brussels, was based on a briefing made to him by Story.



Mote added in his tribute: “Like all speeches in a plenary session it was recorded on videotape and can now be found on literally scores of websites around the world. Even today, almost five years later, new postings of that one-minute speech are regularly uncovered by the Google search-engine.” In Story’s briefing to Mote, he said that while the Global Security Fund is cloaked in secrecy it was made possible by the US Federal Reserve banking system.



After this information leaked out with some of the work of Story, Mr Story died on July 14, 2010 of “liver failure.” Though Mr Mote’s tribute to Story (at the Mote web site) did not raise any questions about the death of Story, many other reporters and analysts have done so. Some have suggested that Story was assassinated with some type of poison which damaged his liver to bring on death.



In the timeframe of Mr Mote’s question to the EU parliament and subsequently with the arrest and conviction of Mote and the death of Story, numerous conspiracy investigators have begun looking seriously at this so called Global Security Fund. It prompted a reader of the Goldsmiths to send me an email with a suggestion that I check into it. I have done considerable research and find the issue to be vast in scope but worthy of my take in this Goldsmiths.



Ronald Reagan



My research suggests that the Global Security Fund started back on Dec 4, 1981 under President Ronald Reagan when he signed Presidential Executive Order 12333 (now Title 18, 6 US Code on Government Intelligence Corporations). Title 18 Section 6 corporations can be owned by the U.S. government, or not, and can be run by intelligence operatives who may legally disguise their intelligence agency affiliations and can deny they exist. The umbrella company involved with the Global Security Fund was called the AmeriTrust Group Inc.



The associated funding was to be held in corporate shell companies in off-balance sheet, off-shore accounts. Companies could be established abroad by U.S. intelligence agents to supposedly identify threats. For example, in most countries if a drug shipment worth $200 million is reported and seized, an informant can earn a percentage of the shipment’s value. Thus, per one internet article, Title 18 Section 6 corporations established by American intelligence agents can earn vast sums of money while reducing international drug traffic. Money laundering and other major crimes can supposedly be identified and prevented by allowing intelligence operatives to establish corporations that appear to participate in those and other illegal activities.



Evidently, the initial funding for the Reagan project came from the US government/Federal Reserve Bank with later additions from up to 200 different foreign and domestic entities to the tune of $27.5 trillion (the fund is now believed to be worth $60 to $70 trillion from investments, financial market manipulations and other activities). While it is not clear who these 200 funding contributors/providers were, suggestions made suggest various other central banks and private investment and commercial banks. One web site has it that the following central banks contributed to the fund:



Banco de la Republica, Colombia

Banco do Brasil

Bank of Uganda

Canco Central de la Republica Argentina

Central Bank of Kenya

National Bank of Hungary

Nepal Rastra Bank

Reserve Bank of Zimbabwe



Although not named, it is highly probable that the Rothschild controlled Bank of England, the Swiss National Bank and various European central banks also made major contributions to the fund.



The purpose of the fund was at first supposedly set up to financially undercut and sabotage the old USSR. In the post Cold War era, the mission changed to influencing and directing the activities of Russia, China and various Eastern European nations for western capitalism (surely to benefit the Rothschild Cabal of bankers). In time, the mission was expanded again to encompass most of the globe in intelligence activities, spying, sabotage, bribery of foreign officials, creating internal disruptions among Rothschild enemies, revolutions, assassinations, manipulating financial markets, etc.



For the initial set-up, CIA agent Leo (or Lee) Emil Wanta was selected. Wanta was both an intelligence and financial expert. He was reportedly the CIA contact man at the Federal Reserve Bank. Wanta went to work and recruited/selected the people needed to run this network. He established numerous businesses around the world. Also, he allegedly owned numerous other businesses as well--legitimate businesses belonging to him. Possibly there was a commingling of funds in Wanta’s personal businesses and those supposedly owned by the Global Security Fund. Now, in more recent years, Mr Wanta and some of his associates have become involved in litigation both in the US and abroad to retrieve or obtain some of the funding involved (as will be explained below).



Dastych web log had an article on the Wanta Plan and Global Security Fund which said: “As a part of the administrative functioning of the Fund, Reagan/his successors adopted and amended as desired a series of protocols to govern the monies raised (possibly in an after effect scenario in the vein of the termination and dissolution of the Fund) which provided that each of the following states should receive five thousand million dollars: Canada, France, Germany, Greece, Italy, Mexico and Spain. Additionally, thirty thousand million dollars were to be paid to the Russian Federation. China, in turn, is owed thirty billion dollars by virtue of other agreements reached with the United States Tax Office relating to the Leo Wanta funds. Apparently this arises from China’s purchase of treasury bonds from the United States.



“The money is reportedly handled by means of instruments known as CHIPS (New York Clearing House Interbank Payments System). During the years of negotiations and court cases, when agreements were reached on various occasions both with Leo Wanta and with the countries involved, the CHIPS turned out to be hollow. That is, they existed as accountancy entries but when it came to liquidate them there was no money backing them. This was because the banks holding them had siphoned off the money to other accounts by means of the false payees we have mentioned, angering the countries who were to be beneficiaries. During the years that Wanta was denied access to the funds, Clinton, Bush and accomplices had used complex financial systems to spirit them away.



“Reports from British analyst Christopher Story indicate that these funds were on the agenda at recent G-8 summits, and that their non-payment has led to China ceasing to use the dollar its oil transactions, essentially, with its main supplier, the Islamic Republic of Iran. Particular reports by Story reveal that last June these funds, supposedly to be used in state terrorism operations should have been returned to Wanta’s jurisdiction, under the supervision of the International Court of Justice of The Hague. Ever since then, however, an endless succession of delays and interruptions have occurred, involving the Rockefeller family, the Rothschild family, Queen Elizabeth II, German Chancellor Angela Merkel, lawyers, judges and political heads of various other countries, all placing obstacles in the way of the liberation of these funds, which would be sufficient to solve the greater part of the problems in the world.



“Currently, many banks worldwide have frozen the secret accounts of these 1,500 operators, so that the conspirators can no longer operate with the funds as before, when they traded using the tax free accounts. British member of the European Parliament, Ashley Mote, is the only such figure to speak out publicly on the issue of these funds. Story’s reports further indicate that these funds, hidden away in secret accounts, are being paid to terrorist organizations.”



As far as Leo Wanta, in later years, he became a representative/ambassador for Somalia in Switzerland where he was arrested and held in prison for fraud. Reportedly, there was an attempt on his life by poisoning while he was in prison.



The US Court Action



The above backdrop promoted a 2002 lawsuit by Leo Wanta in US District Court to liquidate the fund, pay off creditors, return capital contributions to rightful owners and recover his own alleged $4.5 trillion held in the Global Security Fund.



On April 15, 2003 Judge Gerald Bruce Lee, in case number 02-1363-A filed in the United States District Court for the Eastern District of Virginia, issued an Order and Memorandum of Opinion. In it, the Court stated that the Plaintiff, Ambassador Leo E. Wanta, should pursue liquidation of his corporations, recovery of their financial assets, and he should pay all required taxes in accordance with the law. The amount of money involved in the Wanta international corporations to be liquidated was $27.5 trillion.



At worldreports.org on Global Analysis, International Intelligence had this backdrop on the case:



“On or about April 15, 2003 the Honorable Gerald Bruce Lee, in Case Number 02-1363-A filed in the United States District Court for the Eastern District of Virginia, issued an Order and Memorandum of Opinion for the referenced numbered case. As part of the Order and Memorandum of the Court (in the referenced case) the Court stated that the Plaintiff (in the referenced case) should pursue liquidation of corporations, recovery of financial assets and pay all required taxes in accordance with the law.



10. Petitioner initiated contact with numerous third parties, including United States elected, nominated, appointed and career employees plus foreign countries, for the purpose of recovering financial assets.



11. Upon best information and belief in December 2005 and January 2006, Secretary Snow (Secretary of the Treasury at the time) and Chairman Greenspan (Chairman of the Federal Reserve at the time) traveled to the People’s Republic of China. The Chinese required confirmation of Petitioner’s signature to facilitate cooperation of the Chinese in completing the transfer of financial assets referenced herein. Upon best information and belief Snow/Greenspan determined that Chinese officials had the ability and willingness to cooperate with petitioner in the recovery and transfer of substantial financial assets that had been in the care, custody and control of the Chinese for an extended period of time.



12. Premised on the representations of Secretary Snow and Chairman Greenspan, the legal services of Troutman Sanders, LLP and Jenkens & Gilchrist Parker Chapin, LLP (attorneys) were used to complete the preparation and administer the execution of agreements and documents referred to collectively as ‘settlement documents’. The following is a compilation of the significant parties that are represented as either obligors and/or beneficiaries of the settlement documents:



• Petitioner Wanta identified in this petition.

• Central Intelligence Agency (CIA) (including but not limited to Land Baron/Xeno).

• National Security Agency (NSA).

• Department of Homeland Security.

• Director of National Intelligence.

• United States State Department.

• United States Department of the Treasury.

• United States Department of Defense.

• The White House, including but not limited to the Offices of the President and Vice President.

• C.B.I.C. Inc. (Mr William Bonney Sr.).

• China (PRC), France, Great Britain, Germany and other foreign nations participating under one or more international ‘Protocol’ including but not limited to the Reagan-Mitterrand Protocol agreements.

• Others of interest not intentionally omitted as part of this petition. The entirety of the financial assets mentioned in the settlement documents prepared by the above mentioned attorneys concerns approximately $27 Trillion United States Dollars in value. The portion attributable and payable to the petitioner is $4.5 Trillion United States Dollars.



13. In May of 2006 the People’s Republic of China caused a free and unrestricted transfer of $4.5 Trillion United States Dollars through international bank fund transfer facilities to an account at Bank of America located at Richmond, Virginia. The designated beneficiary of the transferred funds from the People’s Republic of China was Petitioner herein. This transfer was made by the People’s Republic of China solely and exclusively as a requirement under the mentioned settlement agreement.



14. Upon best information and belief between the dates of July 31st to August 2nd of 2006 the United States Department of the Treasury, without authorization of either the remitting party or the receiving party removed the People’s Republic of China transferred financial assets from Bank of America Richmond, Virginia to an account in the name of Goldman Sachs at CITIBank New York, New York as the beneficiary holder of the monies transferred by the People’s Republic of China referenced above. This ‘Chip’ (Clearing House Interbank Payment) transfer was facilitated from Virginia domiciled banks to New York domiciled banks via the Federal Reserve Bank Richmond. The Chip transfer did not remove the name of Petitioner as the intended recipient of the transferred money from the People’s Republic of China. The transfer to the Goldman Sachs et al account at CITIBank put a lawless restriction that the funds were not to be released to Petitioner without the authorization of United States Treasury. At or about the time of the unauthorized transfer mentioned in this paragraph 14 Petitioner protested the alleged right of ‘entitlement’ by Secretary Paulson and to facilitate protest of right of ownership under the ‘Securities Acts’ accounts were opened in the name of AmeriTrust Groupe, Inc. at Morgan Stanley, fiduciary client account at CITIBank/NYC to receive direct deposit transfer of Petitioner funds from Goldman Sachs.



15. The Petitioner has been contacted by ‘Compliance Officers’ that are contract employees of the United States Department of the Treasury that the transfer records of the United States Department of the Treasury and the recipient (past and present holder of the funds transferred to Petitioner by the People’s Republic of China) reflect that the accounts opened to receive the financial assets are tagged and coded for the benefit of the Petitioner. Access to the tagged and coded accounts requires lawless authorization to be provided in writing by Secretary Paulson. To date Secretary Paulson refuses to provide the required written authorization to the compliance officers. In addition one or more compliance officer (referenced herein) has been contacted by Secret Service Agents who have advised the compliance officers that the ‘White House’ ordered that the compliance officers cease and desist from communicating in any manner with Petitioner.



16. Upon best information and belief the compliance officers mentioned in paragraph 15 have been in contact with law enforcement officers representing the Central Intelligence Agency and the United States Department of Defense. These mentioned law enforcement officers confirm that the information provided by the compliance officers is true and correct and that upon best information and belief the ‘order’ preventing Secretary Paulson from releasing the ‘tagged and coded’ funds that are the sole and exclusive property of the Petitioner have been either lawlessly and individually controlled by Secretary Paulson and/or restricted through direct participation by other United States of America elected and/or nominated officials.



17. Upon best information and belief Troutman Sanders LLP and Jenkens & Gilchrist Parker Chapin LLP, seeking legal recourse on behalf of C.B.I.C. Inc. (Mr William Bonney Sr.) and the People’s Republic of China obtained an Order to Show Cause Why a Writ of Mandamus Should Not Be Issued from the United States Supreme Court signed by Justice Ginsberg. The People’s Republic of China, as a foreign government, invoked the original jurisdiction authority of the United States Supreme Court to obtain the document signed by Justice Ginsberg. Upon further best information and belief the responding parties to the action filed in the United States Supreme Court are exercising any and all assumed defenses to ward off the issuance of the Writ of Mandamus.



18. The United States Department of Justice and/or any agency or investigative authority contacted has refused to assist Petitioner in the collection of lawful funds. Said parties refuse such assistance irrespective that there is clear and undisputed evidence that the subject funds are identified in official United States government agency documents as being the sole and exclusive property of Petitioner. As of the date of the filing of this Petition, all requests for payment of lawful funds have been ignored by any and all elected and nominated public officials that have the implied and apparent authority to complete all requirements of the settled documents.



19. Petitioner individually and as sole and exclusive controlling shareholder of AmeriTrust Groupe, Inc. certifies as follows:



• The Petitioner has personally had conversations with one or more officials at the United States Department of the Treasury and said officials confirm the sequence of events concerning inward remittance of subject funds from the People’s Republic of China and inter-bank transfers within the United States.

• Petitioner confirms that he has personal knowledge about the ‘Claims and Background’ set out in this Petition and verifies upon penalty of perjury that the same are true and correct.

• Petitioner has fully and completely reviewed the content of this petition and certifies by sworn affidavit attached hereto that the ‘Statement of Claim and Background’ are true and correct.

• Upon best information and belief ‘Respondent’ individuals, agencies, public, private, nominated and/or elected have knowingly, overtly, covertly and with specific intent conspired together to defraud Petitioner. The individual and/or conspiratorial acts amount to a violation of the Securities Acts of 1933 and 1934 (as amended in 1970), the Bank Privacy Act, the Organized Crime Control Act of 1970, specifically R.I.C.O. and applicable international and national money laundering restrictions. In addition it is further the mentioned Respondents’ acting individually and/or ‘acting in concert’ violate Petitioner’s rights under the provisions of H.R. 3723 as the same pertains to private business transactions being protected under both private and criminal penalties.



“Reasonable action has been taken by the Petitioner in an attempt to obtain explanation and/or under what authority Respondents are not allowing the ‘Rule of Law’ and permitting access by Petitioner to the financial accounts referenced herein. Despite continued written notice and request for a response the named parties continue to avoid their legal obligations and continue to commit covert and/or overt acts in furtherance of their knowing and purposeful violation of the statutory references mentioned hereinabove. In furtherance of this petition for the issuance of a Writ of Mandamus Petitioners direct this Court’s attention to the letters and other communications that have been marked as Exhibits A, B and C attached hereto and incorporated herein by this reference as if the same were set out in their entirety in the body of this petition.’



“The petitioner in this case was defined as: LEE E. WANTA, LEO E. WANTA, AMBASSADOR LEO WANTA, Pro_Se, 5516 Falmouth Street, Suite 108 Richmond, Virginia 23230: Petitioner, Telephone: [phone], Telefax: 202 330 5116.



“Wanta filed this AFFIDAVIT with the Court: ‘The undersigned, being fully advised by counsel of the seriousness of the claim of making false statements to a Court and being fully apprised of the consequences for committing perjury (and the associated penalties), hereby make the following statements concerning the petition for Writ of Mandamus being filed on my behalf, by my counsel, in the United States District Court for the Eastern District of Virginia:



1. I am more than twenty-one years of age and I am a citizen of the United States of America.



2. For an extended period of time I am functioning as a representative, investigator, contract employee and/or facilitator of one or more assignments that were either executed and/or performed at the direction and/or under the supervision of one or more persons and/or agencies that were accountable to the Executive Offices of the United States Government.



3. During most recent three to five years I have been attempting to coordinate the repatriating of substantive financial resources from foreign locations to the United States and cause the tax payments owed on the patriated funds to be paid to the United States Treasury. I have substantially completed the stated objective task with the assistance of one or more foreign sources.



4. I have read the entirety of the Petition for Writ of Mandamus prepared by my attorneys. I confirm that I have personally directed communications with the banks, security firms, the United States Department of the Treasury (including one or more individual parties associated with the Treasury that are named as Respondents) and other entities mentioned in the Petition.



5. I have personally confirmed that the financial assets sent by the People’s Republic of China were received by Bank of America in Richmond, Virginia and that upon best information and belief the subject financial assets were ‘tagged’ in my name and transmittal instructions by the People’s Republic of China directed that the same be paid to me without offset or delay.



6. I have been personally advised by agents and/or contract regulation compliance workers, that are accountable to the United States Department of the Treasury, that release of funds sent by the People’s Republic of China for payment to me is being restricted and/or blocked by one or more parties.



7. The exact party and/or parties that are restricting and/or blocking payment of financial assets to my designated accounts is not known absolutely.



8. Upon best information and belief the United States Department of the Treasury has the power and authority to direct release of the funds for my unrestricted use.



9. Despite continued demand for release of financial assets (that were transmitted by the People’s Republic of China) for payment to me personally the demands are ignored and are not rebuked by any responsive communication.



10. I have been personally informed by parties, that have the authority to release the block on funds leveraged against recipient banking accounts established in my name, that directives have been received from known and unknown parties that have the effect of negating my ability to have free and unrestricted access to financial assets that are ‘tagged’ solely and exclusively in my name.



IN WITNESS HEREOF I am causing the above set forth affidavit to be notarized and sworn with full recognition of the penalty of perjury this 11th day of June 2007.



[Signed]

Lee E. Wanta, Leo E. Wanta and Ambassador Leo E. Wanta.”



Apparently, Wanta made efforts to access the money involved but was stalled and obstructed by various parties. This situation prompted another legal action, viz: “(2): Text of the Wanta Petition for a Writ of Mandamus as submitted to the court and published by this service [see archive] on 24th June 2007 and 5th July 2007:



IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF VIRGINIA



ALEXANDRIA DIVISION



Case Number: 1:2007cv00609 – TSE – BRP



Filed: 20th June 2007



Petitioner: Lee E. Wanta



Respondents: Henry M. Paulson, Jr., Robert M. Kimmitt, James R. Wilkinson, Michael Chertoff, Alberto R. Gonzales and Federal Reserve Bank of Richmond



Court: Virginia Eastern District Court

Office: Alexandria Office

County: Richmond



Presiding Judge: District Judge T. S. Ellis III



Referring Judge: Magistrate Judge Barry R. Poretz



Nature of Suit: Other Statutes: Securities/Commodities/Exchanges



Cause: 28: 1361 Petition for Writ of Mandamus



Jurisdiction: U.S. Government Defendant



Jury demanded by: None



Note: This case cannot be sealed until Ambassador Leo E. Wanta has been paid the $4.5 trillion of his Settlement diverted and exploited illegally since June 2006.



The Court has, most unusually, given the Respondents TWO MONTHS to respond.



SIR LEO WANTA’S PETITION FOR A WRIT OF MANDAMUS (1)



The text of the Ambassador’s Petition for a Writ of Mandamus follows:



IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF VIRGINIA



Civil Action no.: 1-07 CV 609



LEE E. WANTA, LEO E. WANTA, AMBASSADOR LEO WANTA (Individually and as sole and exclusive shareholder of AmeriTrust Groupe, Inc., a Commonwealth of Virginia registered corporation)



Petitioner

v.

HENRY M. PAULSON, JR.

SECRETARY OF THE TREASURY

UNITED STATES TREASURY, and



ROBERT M. KIMMITT

DEPUTY SECRETARY OF THE TREASURY

UNITED STATES TREASURY, and



JAMES R. WILKINSON

CHIEF OF STAFF

UNITED STATES TREASURY, and



MICHAEL CHERTOFF
SECRETARY, DEPARTMENT OF HOMELAND SECURITY, and



ALBERTO R. GONZALES, ATTORNEY GENERAL,

UNITED STATES DEPARTMENT OF JUSTICE



FEDERAL RESERVE BANK OF RICHMOND

DIRECTOR AND/OR MANAGER OF OPERATIONS,

RICHMOND, VIRGINIA



Respondents



PETITION FOR A WRIT OF MANDAMUS AND OTHER EXTRAORDINARY RELIEF



A. PARTIES:



1. LEE E. WANTA, LEO E. WANTA, AMBASSADOR LEO WANTA
5516 Falmouth Street
Suite 108
Richmond, Virginia 23230: Petitioner



2. Henry M. Paulson, Jr.
Secretary of the Treasury
1500 Pennsylvania Avenue, N.W.
Washington, D.C. 20220: Respondent



3. Robert M. Kimmitt
Deputy Secretary of the Treasury
1500 Pennsylvania Avenue, N.W.
Washington, D.C. 20220: Respondent



4. James R. Wilkinson
Chief of Staff
United States Treasury
1500 Pennsylvania Avenue, N.W.
Washington, DC 20220: Respondent



5. Michael Chertoff
Secretary of Homeland Security
Washington, D.C.: respondent



6. Alberto R. Gonzales
Attorney General
United States Department of Justice
950 Pennsylvania Avenue N.W.
Washington, D.C. 20530-0001: Respondent



7. Federal Reserve Bank of Richmond
701 East Byrd Street
Richmond, Virginia 23219: Respondent



B. JURISDICTION:



1. The United States District Court for the Eastern District of Virginia has jurisdiction over the subject matter of this cause of action pursuant to the provisions of Title 28 United States Code, Chapter 85, Section 1361 (mandamus), Title 28 United States Code, Chapter 85, Section 1331, and Title 28 United States Code, Chapter 85, Section 1332.



C. VENUE:



2. Venue is proper in this Court pursuant to Title 28 United States Code, Chapter 87, Section 1391, and Title 28 United States Code Chapter 87, Section 1396.



D. STATEMENT OF CLAIM:



3. Mandamus is regarded as an extraordinary writ reserved for special situations. Among its ordinary preconditions are that the agency or official have acted (or failed to act) in disregard of a clear legal duty and that there be no adequate conventional means for review. In re Bluewater Network & Ocean Advocates, 234 F.3d 1305, 1315 (D.C. Cir. 2000); Telecomm. Research & Action Ctr. v. FCC, 750 F.2d 70, 78 (D.C. Cir. 1984). Mandamus will be granted if the Petitioner shows ‘(1) the presence of novel and significant questions of law; (2) the inadequacy of other available remedies; and (3) the presence of a legal issue whose resolution will aid in the administration of justice’, see In re United States, 10 F.3d 229 at 931, 933 (2d Cir. 1993).



4. Petitioner has attempted to access monies that were transferred through international bank monetary clearing systems to financial institutions located in the United States of America. The remitting party was the People’s Republic of China, People’s Bank. The remitting party designated that the transferred funds were for the sole and exclusive use and benefit of Petitioner. The foreign entity that originated the inward remittance designated Petitioner as sole and exclusive recipient for the transferred money/financial instruments.



Irrespective of efforts proffered by Petitioner and/or agents and representatives of Petitioner, private and public individuals and entities, prevent Petitioner from exercising Petitioner’s legal right to the use, transfer and unrestricted ability to freely disburse said financial assets. The acts and/or omissions to act by named and unnamed Respondents prevent Petitioner (and others who are ancillary to this cause of action) from paying their respective tax liabilities to both State and Federal taxing authorities.



5. Upon best information and belief the organizations, entities, departments and individuals that prevent and/or restrict Petitioner’s lawful access to said money and securities include but are not necessarily limited to the following:



• Secretary of the Treasury;

• Attorney General of the United States of America;

• Bank of America;

• J.P. Morgan Chase;

• CITIBANK/CITIGROUP/NYC including but not limited to Mr Charles O. Prince, CITIGROUP Chief Executive Officer;

• Goldman Sachs et al including but not limited to past and present management and executive officers and members of the Board of Directors;

• United States Department of the Treasury including but not limited to Secretary Paulson, Deputy Secretary Kimmitt and other known and/or unknown parties working directly or under contract with the United States Department of the Treasury;

• Secretary Chertoff, Department of Homeland Security and other known and/or unknown parties working directly or under contract with the United States Department of Homeland Security;

• One or more known and/or unknown ‘compliance officers’ that act directly and/or under contract with private bank and/or security brokerage firms to observe rules and regulations of the United States Department of the Treasury and/or other USG investigative and reporting entities;

• Federal Reserve Bank of Richmond, Virginia.



6. Upon best information and belief Respondent acts and/or failures to act constitute a violation of the Securities Acts of 1933 and 1934 (as amended in 1970), the Bank Privacy Act and other non-specified banking regulations.



7. Reasonable action has been taken by Petitioner to obtain an explanation and/or under what authority Respondents are not permitting Petitioner to have access to the foreign transferred private business financial assets referenced herein. Despite written notice and request for a response the named parties avoid their legal obligations. In furtherance of this Petition for the issuance of a Writ of Mandamus Petitioner directs this Court’s attention to the letters and other communications that have been collectively marked as Exhibits A attached hereto (2) and all of which documents, letters and Memorandum are incorporated herein by this reference as if the same were set out in their entirety in the body of this Petition.



8. The material, substantive and immediate financial loss to the Petitioner resulting from loss of financial benefit can not adequately be addressed in conventional judicial proceedings. In one more instances parties in position of knowledge, that can confirm the representations regarding interference in private business dealings, between Petitioner and third parties, have been placed at risk of physical harm by individuals representing to be fiduciaries of one or more of the Respondents. Additionally, the acts and actions of the Respondents prevent immediate payment of Federal taxes in the amount of $1.575 Trillion dollars into the United States Treasury.”



More Issues



Wanta used a Richmond, VA law firm (possibly Troutman Sanders, LLP or Jenkens & Gilchrist Parker Chapin, LLP). The name William Bonney stated above appears incorrect. The London paymaster involved in supposedly disbursing the funds was Lindell H. Bonney. Regardless, Wanta never received the funds. He made numerous attempts to gain control over the funds, pursuant to the Richmond, VA Federal court order (which was not appealed and which still stands valid today). He lost on the above 2007 petition but refiled it again in 2010.



Supposedly, there was a $4.5 trillion payment from China which reached the Richmond, VA Federal Reserve Bank where it was transferred to Citi Bank/Goldman Sachs/New York Federal Reserve Bank. The various websites addressing this case suggest that Wanta tried to get the Fed to honor the court order but was stalled with no satisfactory recovery. In time, the White House intervened and simply refused to honor the court order.



In subsequent years, other parties, like CMKM Diamonds Inc and Michael C. Cottrell (whose company, Cottrell Securities, Ltd in London handled the financial market investments and activities of the Global Securities Fund and is reportedly due $6.2 trillion from the fund), etc all claimed a share of this money and hired a law firm in Pasadena, CA (Hodges and Associates) to recover the monies. Various other institutions and governments per the protocols are entitled to a share of this money. Legal actions have been in the world court and possibly before the BIS in Basel. Numerous articles, letters and follow-up from Hodges and Associates can be found on the Internet.



The World Court Writ



In general, this comes from Hodges with a report that the Chinese went to the World Court to settle the issue in the form of perhaps $47 trillion or more involved in something called the US Dollar Refunding Project/US Gold Badge Signatory, as run form London (under the supervision of Lord Jacob Rothschild). Per Hodges, the World Court issued a writ of Execution and Lien on the US Treasury and the US Federal Reserve Bank called the World Global Settlement to release the $47 trillion due the Chinese and other monies involved (this data from Hodges suggests that the monies involved were at some point in time transferred to the US Treasury or Federal Reserve Bank, which funds may or may not have come into the US as the Treasury/Fed could be holding the money overseas).



This World Court writ reportedly produced a Basel List of beneficiaries (possibly the Basel List was tied to the Bank for International Settlements in some way). It revealed that Mr Lindell H. Bonney, Sr of the UK was chosen by MI 6 to act as paymaster in the matter. Supposedly, the requirements of the Basel List allegedly provided that $47 trillion be paid to the Chinese and possibly $6.2 trillion (separately or a part of the $47 trillion) be paid to Hodges’ client Michael C. Cottrell to an account with Morgan Stanley.



GlobalAnalysis.net addressed this World Court reported action with data from Christopher Story as follows:



“LIEN EXECUTED AGAINST TREASURY AND FEDERAL RESERVE IN THE SUM OF $47 TRILLION.



“Following further intransigent obstruction, the Chinese parties who obtained the necessary World Court Writ of Execution and Lien on the US Treasury and the Federal Reserve, duly exercised their powers and imposed the Lien on or around 6th December 2009. The Lien against the Treasury is in the sum of $47 trillion, which is approximately the aggregate identified by this service in 2007.



“As happened shortly after the ‘lockdown’ of the $14.0+ trillion sovereign funds including the $6.2 trillion LOAN money provided by the British Monarchical Power [referenced again below] on 10th-12th September 2008, when the Editor’s voicemail received a message consisting of a recording of three actual gunshots, two specific threats, mentioned in an Update to the previous posting, were received on Sunday 6th December 2009, the date on which the Lien is believed to have been implemented…



“SPECIAL CONFIRMATION OF THE LIEN OBTAINED BY THIS SERVICE. We have obtained special confirmation of the foregoing Lien intelligence, otherwise, self-evidently, we would not have published this information. Furthermore, we have taken extra precautions to ascertain whether publishing this would be liable to ‘cause any difficulties’, and we have been advised that no impediment to publishing it has even been hinted at, although the fact that we possess the information ‘is known’. Indeed you will have observed that we have waited for a number of days in order to be sure that this shattering intelligence is fully confirmed.



“We have been emphatically and authoritatively advised, since 10th December, that it is. We obtained reiterated confirmation of this intelligence, from New York, on 12th December.



“U.S. HIJACKING OF THE FOREIGN SOVEREIGN FUNDS. Within the $47 trillion is the previously mentioned $14.0+ trillion, and that aggregate in turn embraces the above-noted $6.2 trillion of funds stolen from the British Monarchical Power by the criminal US Government, to which frequent reference has been made in this column. Those funds were transferred by the Bank of England to the criminal enterprise, Bank of New York Mellon (as it became, effective 1st July 2007), on 19th-20th June 2007 under levy, as we reported at the time.



“Instead of disbursing the funds for the on-the-books Dollar Refunding Programme, as required by the sovereign LENDER, the named institution was party to a conspiracy involving other US criminal enterprise financial institutions, to divert and steal those real funds for use as a ‘platform base’ for leveraged financing operations to buttress their self-serving financial carousel.



“SOVEREIGN FUNDS PLACED INTO ‘LOCKDOWN’ ON 10-12 SEPTEMBER 2008. After this had become fully apparent, and in response to this Editor’s strenuous recommendation on 6th September 2008 that the $6.2 trillion, in particular, was being abused in this manner, and that this state of affairs was intolerable – and further, that irrespective of the consequences, the only language these criminals would ever understand would be the removal of the funds from access by them and their associates – the entire $14.0+ trillion (within which total resided OTHER, non-British, sovereign monies) were placed into ‘lockdown’ (i.e. beyond the reach of the criminal operatives at the US Treasury and elsewhere) on 10th-12th September 2008 – a development that triggered the extreme crisis that overwhelmed London and New York at the beginning of October.



“Coincidentally or not, scalar Hurricane IKE which developed on 13th September 2008 was probably intended to destroy the oil refineries and offshore oil platforms in the Houston area – the heart of the US oil industry. A sudden and temporary collapse of oil prices then followed, as did a quadruple witching day for commodities on Friday 19th September. Certain parties who had probably hoped to ‘make a killing’ that week, were wiped out instead.



“BRITISH MINISTERS APPEARED TO HAVE NO IDEA ABOUT THIS BACKGROUND. It has since become apparent that the British Government appeared to have NO CLUE as to these background circumstances concerning the ‘lockdown’ of the $14.0+ trillion, given the subsequent statements by Ministers such as the City Minister, Lord Myners, that the financial system was within hours of disintegration at a critical stage that October.



“A few days after the $14.0+ trillion was placed into ‘lockdown’, the Editor’s voicemail was enlivened (on the morning of 20th September) by a recording of three actual gunshots, as we reported at the time [see above]. This was an intelligence operation, as the recording could not be recaptured after being played the first time. The Editor subsequently received special protection during his visit to Washington and New York for the Annual Meetings of the International Monetary Fund and the World Bank in October 2008…”



The above report from Christopher Story included some speculation which would have tied to the question of the release of the $47 trillion to the US market melt down in Sep 2008. There were also comments allowing the use of these funds in manipulating the derivative markets as will be discussed below.



The CKMX Diamonds Claims



The following backdrop on the CMKX claims of $3.87 trillion (which may be a part of the $47 trillion or a separate claim) apparently comes from data released by its lawyer Hodges and Associates:



“A brief history of THE CMKX SHAREHOLDERS COALITION FOR JUSTICE shows it was formed for real shareholders of CMKM Diamonds Inc. and is currently attempting to force the truth into public. This is regarding the money set aside for them as a result of a multi government sting operation using the company and the shareholders as pawns to catch firms counterfeiting the stock market.



“The COALITION filed complaints with the RCMP, FBI/DOJ, SEC, and Texas State Bar Association. All are fully aware of the situation and the crimes being committed against CMKM Diamonds Inc and its thousands of shareholders. We have contacted INTERPOL, had our evidence forwarded to the Honourable Vic Toews, Minister of Public Safety for Canada, and forwarded to the Honourable Lawrence Cannon, Minister of Foreign Affairs in Canada. They are fully aware of the situation. Shareholders from the United States have put in correspondence to politicians in almost every state and asked for justice by the thousands to the Securities and Exchange Commission; all are fully aware of the situation.



“The authorities and our own company officials, due to non disclosures, were completely hiding the facts of the last six years from the retail shareholders of CMKM Diamonds Inc, so the COALITION filed a RECOL complaint with the RCMP in 2009, and entered evidence to the Nevada FBI in 2009. There was absolutely no real investigation into the allegations put forth, and the thousands of complaints put in by shareholders to the SEC were met with condescension and disrespect.



“The COALITION had already researched other sting operations run by the SEC/FBI/DOJ/RCMP along with other agencies, and had documented not only the inaction of the authorities but of criminal collusion to cover up the largest crime in history, the systematic counterfeiting of the stock market. This included influencing news agencies to cover up the story, which continues to this day. Corroborating evidence is available upon request, or can be viewed at cmkx.info .



“As a result of the inaction of all authorities involved and our own company, the COALITION filed a lawsuit against the SEC in the British Columbia Supreme Court On November 9th 2009, in Kelowna, B.C. for aiding and abetting the mass counterfeiting of the stock market in general and CMKM Diamonds Inc. in particular. We presented clear evidence in that case that the SEC aided and abetted the insiders of CMKM Diamonds Inc. in selling hundreds of billions of counterfeit shares in CMKX stock, and covered up the firms who sold hundreds of billions of counterfeit shares in CMKM Diamonds Inc.



“The lawsuit can be viewed at cmkx.info, and in particular the COALITION evidence against the SEC proves beyond a reasonable doubt the SEC/FBI/DOJ/RCMP and others aided the insiders to sell unregistered shares of CMKX stock, and in the cover up of several well known firms, including TDWaterhouse. Evidence that Canadian firms were not even on the NOBO lists, and that they were warned they were selling illegal shares and continued to do so, is available upon request.



“The COALITON put together several time lines with allegations and corroborating evidence from those involved directly in the fraud. The evidence included a short historical time line of SEC fraud, clearly showing they facilitated the mass counterfeiting of the stock market and its cover up with the authorities who were supposed to protect the public. A package is available upon request which easily proves the Head of Market Regulations at the time worked with the likes of Bernie Madoff to create a system that allowed the mass counterfeiting of the general public and purposely cover it up, lying to the general public.



“Regarding CMKM specifically, a historical timeline of events clearly showed the SEC/FBI had subpoenaed the records they used in current court cases against insiders of CMKM in September of 2004 and the SEC was contacted on each sale by the corrupt insiders of CMKM after September of that year, okaying the sale of the shares each time, hundreds of billions of shares. CMKM was clearly a sting operation or all authorities involved, including the RCMP/FBI/DOJ/SEC and others, aided the fraud. This evidence can be viewed at cmkx.info and can be used by all shareholders as they see fit.



“The fact is, it is easy to prove this was a sting, but for this action the shareholders of CMKM don’t have to prove that, the lawyer that represents them has given public updates that the release of the monies put aside by the perpetrators in the CMKM Diamonds Inc. sting operation was imminent.



“Mr. Al Hodges has said he represents all 50,000 shareholders who are trapped in this intel operation, trapped because officials from the United States government are to this minute are illegally withholding their money earmarked for them and held in trust after the completion of the DOJ sting operation was complete approximately five years ago.



“The imminent release of these monies set aside in frozen trust has been promised now on twenty or more occasions in the last eight months alone, and for years before that, each time raising the hopes of the shareholders that justice would happen finally, that the known crimes would finally stop being committed against them. Each time the authorities from SEVERAL AGENCIES UP TO THE WHITE HOUSE AND CIA have reneged on their word and broke their judiciary duty to thousands of people in CMKM alone.



“We can provide all time lines going back years to show what has gone on, but what is currently happening is what the COALITION would like to ask the authorities to investigate. The COALITION will present a current time line going back to November 2009 to show the crimes that are currently being committed or alleged to be happening to this day to 50,000 shareholders in CMKM. The time line next will show that every shareholder is owed a huge apology by all the authorities involved for the treatment they received during this nightmare of a process, where authorities all the way to the White House are currently committing serious crimes against CMKM shareholders, but have them covered up completely to this day by all involved. The Canadian government are just sitting idle while they have been completely informed of the situation, one in which they signed deals for Canadian perpetrators to stay out of jail, a deal in which the victims have no justice six years later.



“The shareholders of CMKM Diamonds demand the release of our money set aside for us in the Intel operation ran by the DOJ/RCMP and others, one in which plaintiff Allan Treffry says Al Hodges is still working. We ask that the authorities who are investigating this to step in and do their duty and stop the crimes being currently committed against all shareholders. We ask that if our money is not release according to the law, that a full public investigation be initiated immediately into the evidence about to be entered in this complaint.



“The COALITION now enters evidence for investigation, evidence which can be used by all shareholders to demand an investigation into the crimes being currently committed against them. This evidence clearly shows that CMKM Diamonds Inc and its shareholders were used in a government sting operation and that monies due to them are illegally being withheld, and we ask that these crimes be stopped, thank you.



“TIME LINE OF CURRENT FRAUD BEING COMMITTED AGAINST ALL CMKM DIAMONDS SHAREHOLDERS: June 2006 Mark Faulk finished his book regarding CMKM Diamonds Inc. and was waiting on the indictments of corrupt insiders before he could put his book out. At the same time CMKM Diamonds Inc. finished the largest cert pull in history, proving the largest naked short in history. Al Hodges says in the court testimony on Aug. 2nd in California, attached, that the money set aside in the CMKM Diamonds Inc. sting operation, one in which he has a witness to the deals made, was to be released from frozen trust at this point.



“Shareholders sit for years in agony waiting; most knowing this was a sting, in total darkness, no real information from anyone involved, including their own company. Many shareholders lost their homes in this time, didn’t get much needed operations, and many died, all waiting for justice from the authorities, all treated like the perpetrators instead of the victims.



Starting March 2009, The COALITION files complaints with the RCMP and FBI with absolutely no action, the whole time both organizations know that deals made by officials in both countries are not being adhered to. Public officials in both countries, along with all agencies involved in the sting operation knowing the situation and dealing with thousands of letters of complaint from shareholders, but nobody acts. They all just watch while knowing crimes are happening to prevent the money from being released that is held for the victims in the CMKM sting operation.
November 9th 2009, the COALITION takes matter into their own hands as the authorities are not acting, and files a suit in Canada against the SEC for aiding and abetting the insiders of CMKM Diamonds Inc. sell counterfeit shares. Given the authorities would not admit it was a sting, the COALITION proved they aided and abetted the fraud, and entered that as evidence in our case.
Dec 16th, Al Hodges puts out his first update to all CMKM Diamonds Inc shareholders, informing them money is set aside for them in the sting operation they were used in, including money set aside for them from land sales in Saskatchewan, Canada. These land sales totally hidden from public to this day along with the facts of the sting operation, or even the fact it occurred. Mr. Hodges says he will file a Biven class action suit if the money is not released.
December 30/31, 2009 or there about the government says they will release our money, and the United States Treasury takes the taxes out of the money to be released.
January 4th 2010, the shareholders get an update on a public forum from plaintiff Reece Hamilton. He tells everyone they are finally, after all these years of being hung out to dry by the authorities, about to be paid and closure is imminent…


“January 10th, after the government does not release the money to the shareholders of CMKM Diamonds Inc. like promised, even after they took the taxes out of our money, Mr. Hodges is forced to file the Bivens Class Action, and although he has seven named plaintiffs, says he represents all shareholders in public letters. Here is a portion of a press release put out by the COALITION which represents the essence of the case, and again Mr. Hodges claims he has a witness to the perpetrators making these deals and Mr. Hodges is currently an eye witness to the crimes happening in this case that prevent the conclusion of his Bivens Class Action, one in which all bona fide shareholders are a part of as they all have money held in frozen trust for them: A Bivens Class Action law suit seeking $3.87 trillion in damages was filed on January 10, 2010 against five present and five past Security and Exchange Commission commissioners. A. Clifton Hodges of Hodges and Associates, Pasadena, Ca, filed the suit on behalf of seven named plaintiffs and ‘all others similarly situated’.



“The suit alleges CMKM Diamonds, Inc. was used as a vehicle in a joint sting operation conducted by the SEC, the Department of Justice (DoJ) of the United States, Robert A. Maheu and others. The suit contends between June 1, 2004 and October 28, 2005 ‘a total of 2.25 trillion phantom shares of CMKM Diamonds, Inc. were sold into the public market through legitimate brokers, illegitimate brokers and dealers, market-makers, hedge funds, ex clearing transactions and private transactions.’



“The class action suit further alleges the ‘Securities and Exchange Commission and the Department of Justice, with assistance from the Department of Homeland Security (DHS), believed and developed evidence that said short sellers were utilizing their activities to illegally launder moneys, wrongfully export moneys, avoid payment of taxes, and to support terrorist operations.’



“The twenty-page complaint states the SEC, DOJ and the DHS, ‘(c)onsented to, facilitated and supported the conferences between Robert A. Maheu and his associates on the one hand and the wrongdoing short sellers on the other, all for the purpose of settling the potential liability of said wrongdoers with consent of the US Government and a representation of no criminal prosecution for such illegal sales.’



“According to Al Hodges filing, between March 2004 and August 2006 a settlement was reached on behalf of CMKM Diamonds, Inc. by Maheu, with assistance from others, and the alleged wrongdoers who had engaged in naked short selling of CMKM Diamonds, Inc. stock and cellar boxing the company. ‘In exchange for a US Government promise of no prosecution for such sales, the wrongdoers each promised to pay negotiated amounts to a frozen trust for disbursal at a later time.’

[sandi66]

“The suit contends these monies and other monies resulting from the sale of claims to foreign entities were collected for the benefit of the shareholders of CMKM Diamonds Inc., and are being held in a trust, or held in trust by the Depository Trust & Clearing Corporation and the United States Treasury. The $3.87 trillion dollar lawsuit states demands for the release of said monies has been ‘repeatedly’ presented to the SEC and ‘agents and employees of the SEC and the DOJ have represented repeatedly that the release of the monies was imminent.’



“The Al Hodges complaint charges, ‘As a result of the Defendant’s misconduct, each of the named plaintiffs and all of those similarly situated, have been denied their Constitutional rights, including, but not limited to, their Fifth Amendment right to be secure in their property, free from taking without just compensation and without due process of law, and have suffered injuries and property loss in excess of Three Trillion Dollars.’



The COALITON prepares for court February 4th in the Supreme Court of British Columbia, in Kelowna, we are asking for a default judgement against the SEC in our case. Our case has changed now, as every case changed when Mr. Hodges Bivens case was not only filed but the release of the funds promised, it appeared to be a given the money would be released at any moment. The fact that the funds were to be released alone corroborates Mr. Hodges claims in his case that the money was there, and it was supposed to be released to the shareholders. I talked to Mr. Hodges via phone on several occasions and Mr. Hodges verified the update by Reece Hamilton, and that the taxes were taken out of the trust fund. He was willing to do a phone teleconference from his office on February 4th and testify to that fact, if the Supreme Court of British Columbia would allow. Unfortunately, the court did not allow that to happen as the judge said that ‘we have decided’ that you will have to re-serve the SEC before going forward. I felt moving forward on my case was moot due to the fact Mr. Hodges was on the verge of having our money released, but on that day I asked the court to release 50,000 shareholders money that was illegally being withheld from them; they denied that request. As I write this it is September the 4th, exactly seven months later with no resolution for the shareholders and crimes being committed against us daily until this is resolved?
From February 4th to February 15th Mr. Hodges tells me personally and the whole shareholders base that follows on various public forums that the delay cannot go past that February 15th date, as that would go past the 90 days they are allowed given the taxes were taken out on December 31st 2009. Mr. Hodges tells the shareholder base that various international crimes will be committed as soon as it goes past that date. During the weeks leading up to February 15th the government agrees to release the money several times and each time reneges on their deals, until it finally reached the date. Many are now breaking international laws with the full knowledge of all involved, they all sit idle while this happens, all committing crimes themselves for aiding this by not performing their judiciary duty and stopping this. The shareholders do several actions to get the word to authorities, but the authorities are fully aware of the situation, they are the ones that need to be investigated. Corroboration of this is in letters attached as evidence.
February 26th letter to Andrew Cuomo, Attorney General of New York, again Mr. Hodges says payment is on the near horizon at this time: Attorney General of the State of New York120 Broadway, 23rd Floor, New York, NY 10001.


“Dear Ms. Brown:

“Thank you for speaking with me earlier today and explaining that Mr. Markowitz was out for the rest of the day. We discussed briefly the nature of my request and you suggested that I forward the appropriate information to your attention via e-mail for Mr. Markowitz’s review on his return Monday, March 1, 2010. The information is as follows:



• I am a California trial attorney with some 40 years experience in State and Federal Court, as well as other jurisdictions.

• In January of this year I filed a Bivens Class Action against the five sitting SEC Commissions and five past SEC Commissioners seeking some 3.87 Trillion Dollars in damages for the taking of property by unconstitutionally withholding consent to distribute such sums as had previously been collected for the benefit of 50,000 + shareholders of CMKM Diamonds, Inc.; a conformed copy of the complaint is attached.

• The SEC Office of General Counsel has agreed to accept service on behalf of the sitting Commissioners; the other commissioners are currently being served.

• The weight of opinion is that this litigation will not be allowed to proceed into the discovery stages and/or to trial; there is mounting evidence that a distribution of funds to the shareholders is on the near horizon.

• I am advised that a portion of trust funds previously ear-marked for distribution to support the U.S. Domestic Settlement Fund Program currently in process were distributed to the United States Treasury facility in New York City on December 31, 2009 through and with the assistance of the New York Federal Reserve Bank in New York City.

• I am advised that these trust funds totaled 4.2 Trillion Dollars and were paid into the U.S. Treasury as and for taxes due to be paid from the trust(s) upon distribution of the trust assets.

• I am further advised that pursuant to Federal Banking Regulations, New York State Banking Regulations, and the Martin Act, inter alia, the transferred funds could be held without return for a maximum period of time under any circumstances for forty-five days or until midnight February 14, 2010.

• I am further advised that the U.S. Treasury has not remitted these funds, is still possessed of these funds and more importantly the trust(s) assets have not been distributed.

• The above circumstances, upon proof, demonstrate serious criminal violations of the statutes referred to above.

• I represent, at least as the Class Counsel, a number of New York residents who are beneficiaries of these trust(s) and are among the 50,000 + shareholders. I know many of these people on a personal basis in addition to being their counsel of record and can attest to their severe and continuing damage suffered and being suffered as a result of the non-distribution and non-receipt of the afore mentioned trust assets; some of them are also anxious to visit you in person and describe their continuing outrage. Demand is hereby made that your office initiate, at the earliest possible time, an investigation into the criminal activities of those persons within your jurisdiction whom have contributed to and otherwise facilitated these criminal acts. I would be happy to discuss these facts with you at your early convenience. Please feel free to contact me directly at: [phone]. Thank you in advance for your prompt attention to this matter.



1--March 30th, no resolution to the situation despite the fact numerous crimes are occurring daily, no resolution but each week passes with hope given that this may end and authorities may finally do their duties. March 30th Mr. Hodges gives an interview to the Manhattan Examiner, in the article he claims he has an eye witness to the deals made by Robert Maheu, authorities from several agencies, and the perpetrators. Quotes from the article show that Mr. Hodges again feels the shareholders money is about to be released as we speak, it again proved to be false, and again shareholders were given false hope our government would actually follow the law: ‘They [the government] used the shareholders without their consent to perform this ‘sting operation’ for National Security interests, and it wouldn’t have worked the way it worked if they had disclosed it,’ he continued. ‘On the other hand, it isn’t right to bury a company and put them out of business for the purpose of trapping people who are using the company to cheat the government, to line their own pockets, and to fund their operations against the United States.’ As noted above in complaint paragraph 34, and per Hodges, a deal was eventually reached with the aforementioned criminals; they paid the government restitution for documented illegal actions, and in turn, were offered immunity from prosecution. ‘Rob Maheu had all these people in a big room in Las Vegas, and made [an] offer to them,’ he said. ‘Every person, organization and representative in that room stepped up, and either transferred money while they were there, or agreed to transfer money upon some further schedule’ to avoid indictment. Hodges also said, ‘I have a witness who was there, who saw it, and part of the 2.25 trillion phantom shares is documented by that person’s observations of how many shares were represented in that room.’ HOW MUCH MONEY DID THE FEDS REALLY COLLECT FOR RESTITUTION? ‘People are going to laugh and titter about the amount of money that is being claimed, but understand the context of the lawsuit,’ he said, before concluding, ‘we are not asking the government to pay us $3.87 trillion, what we’re asking is for them to release the funds that have been collected for us.’ Thus, the implication is that this sum also incorporates substantial punitive damages. In the end, Hodges believes the U.S. government is going to settle the case before it actually moves to trial. On this possibility, he said, ‘I think it’s in the process of happening as we speak.’



2--April 27th update by by Al Hodges to all shareholders, again Mr. Hodges feels the money will be in the Trustee’s hands by week’s end, again this did not happen.



3--Our Status – We are literally on the thresh-hold. This means that the ‘work’ remaining to be finished will not consume more hours than can be accomplished within one day. We have been at this point now for more than a few weeks.



4--The Delay – Although I could write a book about what’s been going on behind the scenes to cause this additional delay, I’ll try to give you the condensed version: First – Please be aware and understand that there is an economic war raging in the background. Second – The naked corruption that is endemic in D.C. is more than most can comprehend; it is clear that these miscreants have no regard for the US Constitution, Federal Laws and Regulations, nor even any sense of simple morality. They are convinced that they are above any constraint that might apply to lesser mortals and that no enforcement activity will ever successfully address them. I hasten to add that such opinions are not universal; having said that, it is more widespread than not. Third – These miscreants are, in effect, fighting for their lives – at least that part of their lives that establishes an environment in which they can continue to lie, cheat, steal, and mortgage your progeny’s lives, all for their personal gain. Accordingly, they will fight until the doors are all closed by a power that they cannot subvert. That fight continues as I prepare this interim update. Fourth – The good news is, we are winning the battle. The circle within which these bad apples can operate draws inexorably smaller with each attempt to bribe, suborn and otherwise corrupt the system, and the people within it. By way of example, I was advised that over the weekend one State Department person, 10 bankers and 18 Federal Reserve people were arrested and dealt with. Fifth – By what date will we have Economic Receipt, you ask. We will have it when this initial battle phase comes to a successful conclusion. That will be in the very near future in my opinion; the current schedule based on advice I received this afternoon is that it should all be finished, with funds in the Trustee’s hands, by week’s end.



5--May 20th 2010, Mr. Hodges to President Obama, Mr. Hodges alleges that settlement monies set aside in the sting operation and money set aside from the sale of land for the benefit of the shareholders of CMKM are now part of the Global Settlement causing further delays in distribution, something in itself that needs to be investigated. He also claims the conclusion of the transfers of Global Settlement monies should have taken place over the last two months and that his paymaster is ready at this moment to finish up that work…



6--August 2nd hearing in California where Al Hodges responds to the defendants (SEC commissioners past and present) motion to dismiss, the defendants were represented by DOJ lawyer Keith Staub, the same DOJ that should be protecting the shareholders of CMKM and enforcing the deals they made years ago: AH: Good Afternoon your Honor, A. Clifton Hodges on behalf of the plaintiffs, two of whom are in the courtroom today, Mr. Hamilton and Mr. _____________

Judge: Good afternoon, welcome.

SEC; Good afternoon your Honor, this is U.S. Attorney Keith Stavron (??) on behalf of the Federal defense.

Judge: Good afternoon Have you had a chance to review the tentative ??

Both say yes your honor

Judge: Mr. Hodges I think I would like to hear from you first please

AH: your Honor, first of all let me concede the point raised in your tentative that this is not your usual Bivens case. That is clear for everyone I think. As a house keeping matter on page one there is a typographical error, in the middle paragraph the Administrative Law Judge’s finding was in 2005 not in 2010.

Judge: Thank you.

AH: Having said that, let me refer you to the second issue raised by the government first. It asks the question whether or not there are property rights at issue in this case. And very simply what we have alleged is , let me back up a second. We have alleged a scheme, in effect a sting operation, judged from the outside not from the inside. Basically the sting operation was an operation put into effect through the Office of Homeland Security, the Department of Justice, and the SEC Commissioners.

What we have alleged is that the SEC Commissioners as opposed to the Agency itself, coordinated with these other institutions and at their request and in concert with them began a program, whereby, this company was raided. The SEC Commission was fully aware, at all times, of the amount of naked shorting going on in this company.

The then Chairman of the commission has been quoted on several occasions as saying this was the most heavily naked shorted company in the history of the world. As we have alleged in our complaint one day, which I believe was in April 2005, some more than 90 billion shares of this company were traded in one day. I have testimony from, which is not alluded to in our current complaint, but I can provide testimony from registered NSASDA companies, that were in business at this time, who report that they were told ‘it’s free money’. You can sell as many shares as you can find buyers for and put all of the money in your pocket. You don’t ever have to buy the share.

They were on a no borrow list to begin with, at that point in time, which was in 2005 primarily. And if you were going to borrow shares as a legitimate broker in that point in time, they had a $2.50 requirement for borrowing. You can imagine with some, I think they averaged during that time 17 billion shares a day being sold, this is an enormous amount of money for people to be borrowing shares to be sold into the market. They were being sold for nothing, that is how they drove this company into the ground.

They did it because there was evidence by the government, and by others, associated both directly and indirectly with the government, that this money was being sent offshore. It was being accumulated by hedge funds offshore, it was being sent to Iraq, it was being sent to Iran, it was being sent to Afghanistan, it was being sent to Hezbollah, this was one of the means in which these terrorist organizations were utilizing them to fund their operations.

Having said that, I recognized when I prepared this complaint at the time the company was being de-listed, and the time this original agreement was made, we did not have a basis to sue the SEC, the SEC commissioners, or anybody else. Because in fact, as the Court correctly points out, in regard to (quoted a case) it said the shareholders don’t have a right, they don’t have a property interest. If they did not have that right at the time the agreement was made, at the time the original ultra _______ criminal acts by these Commissioners took place.

However, what this complaint speaks to is at quite a later date after the company was de-listed in October of 2005, and they stipulated to that delisting, Then we go forward and what immediately happened was a Task Force, including one primary and past board of director members, Mr. Bob Mahue, who is no longer with us unfortunately, became the head of that Task Force. His appointed duties, and the Task Force appointed duties, were to have the shareholders pull copies of their shares, pull certificates for every share that was legitimately then owned because it had been bought and paid for, and based upon that share certificate pull, then turn around and liquidate the company.

At the time the company decided it was going to liquidate itself and distribute its remaining assets to its shareholders the property rights attached to each of the shareholders because at that point in time, this was in early 2006, they had a right to believe that what was in their future was a distribution, a prorate per share distribution of the assets that the company then owned. The company then owned all of these monies that had been accumulated and put into trusts. The company also owned shares of stock in a company called Entourage and they had other assets. They did not have any substantial liabilities.

So the share holders, from that point forward, had a property right that is protectable under the Constitution. It is that claim that we are basing our complaint. Having said that, once we get past the property rights issue, I certainly understand the Courts concern and I have reviewed my complaint, about, perhaps the use of some in artful language when I referred to the SEC rather than specifying that it was the SEC commissioners that we are aiming this at.

The reason we are aiming only at the SEC commissioners is because under the statutory scheme that was set up after the Great Depression, the SEC commission and commissioners individually have the sole and exclusive right to make the decisions. For example with this firm, when this company was de-listed in October of 2005, it was pursuant to an Administrative Law Hearing that took place here in Los Angeles, a full day down in Federal Court, that I attended.

The Administrative Law Judge then rendered a tentative decision. It was her decision but it was tentative in the sense that it had no power and had no effect. The only time that it became effective was when the company became de-listed on October 24th or 25th of that year when the Commission met and together agreed that this company should be de-listed.

They are the only people who have the power to make these kinds of decisions. They are the people who spoke to the other governmental agencies and to the people representing, at least ostensibly the company at that point in time, with this agreement to utilize this company without knowledge to the shareholders as part of a sting operation to trap all of these hedge fund people. That started way back in 2004.

But it was those commissioners acting in an improper and ___________ and probably criminal way because their mandate under the law is to protect the shareholders. They were doing exactly the opposite. They were entering into an agreement they knew way going to damage he shareholders, it was going to drive this company out of business, which it did, and without notice in a big secret. It was only those commissioners who took that action that we are aiming this complaint at.

We have named the commissioners that have sat since that time because it is our position that having denied these people payment these commissioners have signed on ratifying the acts of their fellow criminals or miscreants, at least, and at the end of the day refuse to release this money. Money that has been collected. We are not suing the SEC, we aren’t suing the government.

Judge: who, in your analysis, is the trustee of the funds? Who holds the funds?

AH: There are actually several trustees who hold the funds, one of whom is currently the DTCC. I only say that because I know the funds are on deposit with the DTCC.

Judge: OK spin that out for me.

AH: The deposit for a trust, clearing corporation, they are the clearing house for all the financial transactions basically that they placed in __________

Judge: Privately or publicly?

AH: They are a private company but they act a public one.

Judge: As opposed to governmental

AH: It is not a governmental agency in the same sense that the Federal Reserve Banks are not government.

Judge: What document governs the terms under which they hold those funds?

AH: A trust agreement.

Judge: Between?

AH: Between the people who provisionally set this up

Judge: Who are?

AH: One of whom was Bob Mahue.

Judge: As an employee of the SEC?

AH: Not as an employee of the SEC in any sense of the word, he was at one time on the Board of Directors of the company CMKX Diamonds.

Judge: right

AH: He never acted on behalf of the SEC.

Judge: What control does the sec have over this trust fund?

AH: They don’t have any direct control over the trust fund. The agreement, however, that was originally entered into, as I understand the testimony of my, what I have been able to accumulate without the opportunity to do actual discovery, my understanding is that Bob Mahue and several of his associates entered into a deal first with the Department of Justice, they got the SEC on board through the commissioners by talking to several of them. Primarily Christopher Cox.

Judge: Who is a defendant, a named defendant who used to be the Chairman?

AH: The essence of the agreement they made was that in order to make this sting effective the company would go and pump its stock, which it did, the government would assist in that operation, which it did

Judge: How?

AH: There is evidence that they paid for some of the expenses associated with a car, a drag racing car that had CMKX painted on the outside of it that was being very publicly bandied about the internet and raced in various jurisdictions. One of their ex-employees a gentleman named Roger Glenn, an attorney, he used to be an attorney in New York with the law firm _______________ signed on to increase the stock at the request of the SEC, I am told. He came on to or into CMKX in 2004.

When he arrived there the number of authorized shares for the company some where of 100 or 200 billion, I forget exactly what, when he left some nine or ten months later the number of authorized shares had illegally and improperly, under every law that I am aware of at least, had been raised to 800 billion shares. And this company eventually sold some 700 billion shares of stock. And there is over that many outstanding ____________, 703 billion plus.

Judge: Why isn’t your client against the clearinghouse acting as trustee for these funds?

AH: Because that would be like suing the escrow company.

Judge: Yeah but the escrow company has the funds.

AH: As I started to say, here is the simple answer, your Honor, as I started to say a few minutes ago and I probably did not finish. The original agreement, there was a war that ensued after the sting got under operation because what the sting always contemplated was that Mr. Maheu would collect all of these bad doers, the hedge fund people and people like T.D. Waterhouse and all the other stock brokerage houses around who were naked shorting this company, collect them all in a big room and offer them a deal for two reasons.

First of all to collect money for CMKX for what had been done to them. And second of all to teach these people a lesson that there were people out there watching what was going on. Hopefully that would head them off from continuing in such illicit and illegal and improper behavior. That was in fact done and I have a witness that was there when it was done.

They had a room about three times the size of your courtroom in which they had representative from all of these brokerages from all over the world. They watched a video presentation, because Mr. Mahue, as the court may be aware, was at one time closely associated with the CIA, Howard Hughes and all kinds of other people.

Judge: I was going to ask you whether that was the same Bob Maheu.

AH: It is indeed the same one, a gentleman I happened to make acquaintances with in the 70’s to my good fortune. At any rate all of these people were in this room and were shown a video and a slide presentation of all of the evidence of their wrongdoing and they were offered an opportunity to either step up and sign away your money and pay a reasonable amount for each transaction you did illegally and improperly or go walk out of here and get prosecuted and go to jail because what you did was criminal.

Every single person in that room stepped up and made a deal. After that time there became a big conflict between the SEC commissioners and the other governmental entities who were supporting the SEC commissioners about who was going to have the right to release this money to the shareholders and when. My understanding is that it went on for some number of months but ultimately the SEC commissioners prevailed and convinced Mr. Maheu and his associates that it had to be their decision because only they and the rest of the government could determine when this ting had fulfilled its function.

That was the basis on which he gave them the power to make this decision about when the money is to be released. It is my understanding that every trust that is currently being held for release of this money is being held by a person who is sworn to observe that requirement. That the SEC, the US government whoever ____ this payment, goes first. Since my information is that was the SEC commissioners that have this power, this is why they are the defendants in this case.

Judge: Let’s return to your Bivens theory, it is taking a headpoint

AH: this money was supposed to have been released within a year of the time the company was originally de-listed in October of 2005. This is now almost October of 2010, some 4 years past that time. It is taking only because they refuse, not withstanding information they have continued to give to ____________, they continue to refuse to release this money. If they don’t release they money then it is a taking. Because they are preventing what is rightfully ours for us to receive. That is why it is a taking.

Judge: Thank You

AH: You are welcome

Judge: Mr. Saton (?)

SEC: Thank you your Honor. I have to admit most of what I just heard I heard for the first time because most of it wasn’t in the claim.

Judge: I found it very educational.

SEC: Indeed. True or not I don’t know but we are here to discuss what is in the complaint today. We’re not here to give oral argument and give testimony to facts no one has any idea about, certainly not myself. We are here to talk about what is in the complaint, whether it was properly pled under rule 8, the ___decision and _________. As this Court pointed out in its tentative it is not properly pled.

Judge: Yeah I am satisfied with that in the tentative. The case would be for the plaintiff to dismiss the plead to re-plead. I guess what I am really interested in is whether this is an appearance claim given the nature of the asset raid whether sovereign immunity applies.

SEC: Well I suppose they can sue a government official under Bivens for any violation of civil rights whether it has to do with money or not. I don’t know any distinguishing facts in this case that would prevent them from being sued individually under Bivens if there are sufficient facts.

Judge: Well if you concede in theory that a Constitution violation of the taking clause could be asserted against an individual an individual government worker.

SEC: Well I haven’t researched that so I don’t know the answer to that specifically. We asserted on our brief the original invest property because pursuant to the complaint the SEC had the discretion to release funds, if in fact there are these funds in existence, that discretion alone, under the case law that we cited suggests that they don’t have the property rights. But the answer to your question is I don’t know.

Judge: Well there are two questions I guess. One is there a property right and is the contingent asset, if you will, subject to distribution to the plaintiffs at the will of the commission. But there is a separate issue is whether the nature of the relief sought here is such that it can only be asserted against the commissioners in their official capacity.

SEC: Well, I don’t think the government has a way of stopping the release in official capacity or in any way.

Judge: Well I understand that, the issue is, is there some manner which these crimes could be asserted against the individual defendants in their individual capacities or is the relief sought by definition relief that can only be sought in their official capacity in which case there can be no private claim they would be entitled to sovereign immunity in their official capacity

SEC: That may be the case, I don’t know the answer to that. I think the court is inclined to be consistent with its tentative as far as the pleading requirements. I think the plaintiffs have an opportunity to re-plead to amend the complaint. We will certainly deal with the issue that the Court raised on further briefing, I imagine there will be an additional motion to dismiss in the future. But that being said clearly these are high level government officials, they don’t deserve to be sued and discovery taken of them. I am not specific, obligations have been made by some and none have been made to a distant point.

I hear some issues were addressed during oral argument that I didn’t see in the complaint, even assuming those are true there is nothing specific to these SEC commissioners other than the fact that they some how have the sole discretion to make every single decision at the SEC. I don’t buy that.

Judge: Mr. S—- it might be easier to assess whether claims can be asserted against the commissioners as individuals if we have a complaint that complies with __________.

SEC: That may be true, yes. If it’s in a fact complied and fitting the requirements of _________ and it can pass qualified immunity which also remains in the court obviously doesn’t need to address right now. But if and when the Court decides it’s been properly pled then I think qualified immunity should be addressed.

Judge: Well what I am going to do is dismiss with ________ to re-plead for failure to meet the Rule 8 requirements. Again not to dismiss the claims against them in their official capacity as a matter of sovereign immunity and leave the other issues until we have pleading that passes muster.

AH: Agree you Honor.

SEC: I would only ask you honor the government have 30 days to respond and to ________ people. Thank you.

Judge: Mr. Hodges

AH: I certainly recognize, your Honor, the need to be more specific in the complaint and I appreciate the Courts willingness to give us the opportunity if that is the Courts

Judge: I understand you want

AH: 45 days with the

Judge: any objections?

SEC: None your Honor

Judge: You have 30 days to respond by answering in a motion

AH: That is fine your Honor

Judge: OK we will modify the tentative accordingly.”



Robert A. Maheu cited above may be a present or former employee of the CIA. Hodges and Associates have filed lawsuits against different parties and have written numerous letters to Ben Bernanke at the Fed, President Obama, the Queen of the UK, the British Prime Minister, various officials in the US, etc trying to obtain the monies due CMKX and Cottrell. All efforts so far have been met by US stonewalling and non cooperation. Here is one letter from Hodges to Obama:



“May 27, 2010

Via Facsimile Only: [phone]



Honorable Barack Obama

President of the United States of America

White House

Washington, DC



In re: World Global Settlements



Dear Mr President



I write to you again this afternoon in furtherance of my previous recent correspondence regarding prompt dissemination of the World Global Settlements.



As I have previously stated, I represent some 50,000 shareholders who are to be paid a settlement which consist mainly of monies collected from banks, brokerages, hedge fund corporations, market makers, the Depository Trust Corporation/Federal Reserve, and various billionaire ‘naked-shorter’ individuals, as well as some monies due from the SEC for damages. I have also been involved in the representation of other payees awaiting this distribution and have, in such capacity, been in direct communication with the UK Royal Monarch.



I am currently advised and understand the following:



• A portion of the World Global Settlement funds have been collected and are presently held in the custody of the Bank of America in Richmond, VA.



• Said funds are sufficient to cover all disbursements to be made by the authority of the Paymaster who has now spent more than eight weeks over the past three months, in Richmond, for the purpose of concluding these transfers.



• The Paymaster authority has, at the direction of the Pentagon, London, et al., been present in the Bank in Richmond every day this week to complete the transfers.



• This morning he was advised by ‘both sides’ that each desired this matter to be concluded as soon as possible and that he should be available to enter the bank to consummate the transfers.



• AS OF 6:00 P, EDT, THE PAYMASTER AUTHORITY PERSONALLY ADVISED ME THAT YOU PERSONALLY, MR PRESIDENT, WANTED AND HAD DIRECTED THAT THESE FUNDS BE HELD THROUGHOUT THE COMING HOLIDAY WEEKEND.



• I have previously been advised that you had given specific written authorization of these transfers and confirmed the same verbally just this week.



Mr President, I sincerely hope that my information is incorrect; because, as I am certain you are aware, your personal involvement in delaying this distribution is an ultra vires action which exposes you to personal liability for the sums involved and for accruing interest thereon. I would certainly not want to see you personally involved in the future dénouement of this matter.



As I have previously advised in my communications to you, only your direct intervention will be efficacious in bringing this matter to conclusion.



Mr President, I implore you to facilitate conclusion of this matter forthwith. There is simply no legal basis for any further delay. Please act consonantly with your previous statements and promises.



I would very much appreciate your written confirmation that you will do so immediately; accordingly, I will withhold public distribution of this correspondence until 8:00 pm EDT today.



Sincerely,



Hodges and Associates

[Signed]: A. Clifton Hodges”



More About the purposes of the $27.5 trillion, now $60-$70 trillion Fund



What is important here from the above is that attorney Hodges and his clients repeatedly charge that the monies involved in the Global Securities Fund/Global Settlement Fund were used in investment activities, short selling and to manipulate and control the various world financial markets for the benefit of some secret unidentified party or parties (and since British Lord Jacob Rothschild supervises these funds, it’s not hard to put two and two together and see who has been benefiting from these funds).



Many of us have known for ages that the CIA is exempt from US law and that none of their work can become an issue in US courts (that’s why, since at least 1961, under Kennedy, the CIA become Murder Incorporated (to quote Lyndon Johnson). We don’t know and can’t find out how many people the CIA has assassinated over the years. The Agency made at least 26 attempts on the life of Castro (after 26 attempts to kill him, it is no wonder that Castro hates the US). It is also known by many persons that the CIA has been a key agency in the world drug trade for years. Allegedly, the CIA handles drugs for payoffs from the world ruling drug masters. Ostensibly, the case can be made that the CIA works the drug trade for additional income to supplement its activities beyond black ops appropriations from the Congress and other secret funding from the US Executive branch.



With so many illegal activities going on, it is entirely plausible that the CIA has been heavily involved in the manipulation and control of the world financial markets to supposedly benefit the Federal Reserve Bank and US Treasury (though secretly, we can bank on it that CIA involvement in the markets is really to benefit the secret plutocratic rulers of the US—namely the Rothschild Cabal of bankers).



So while the case can be made that the World Security Fund actively funded intelligence activities, revolutions, assassinations, spying, sabotage, unrest in enemy nations, etc on behalf of its US-Rothschild masters, it is manifestly clear that the Agency has been involved in the manipulation of the global financial markets. From the beginning, this fund has been employed under the supervision of Lord Jacob Rothschild of Britain. Thus, we can be sure that the fund works for the Rothschild Cabal of bankers. There is no other way an intelligent person can believe it (true, blind idiots supporting the status quo of Rothschild rule can go into a trance and start mumbling about US democracy versus the alleged evils of Russia, China, Cuba, Venezuela, Iran, etc).



Since Ronald Reagan first established the Working Group for Financial Stability in 1988 (the Plunge Protection Team), it is entirely plausible that the use of the CIA in manipulating financial markets was clearly a part of the program (it is now admitted that the CIA manipulated the currency markets to bring the Russian Ruble down on more than one occasion).



Interestingly, the fact is that the Rothschild effort to manipulate and control the worldwide financial markets surfaced in a report from the Russian internet site Engforum.pravda.ru in early Oct 2010 in a story on Windsor syndicate in London using Barclays Bank (UK) for scam trades.



This report said: “More from the Casper intel group (US): On Saturday 3rd April 2010, the Elizabeth Windsor (Queen Elizabeth II of England) syndicate and The London Crown Temple delivered executive documents by hand to Barclays Bank (UK) to use the US Prosperity Funds as collateral for under-the-radar derivatives trading in London. Delivery of the Prosperity Funds in the US was deliberately delayed to enable this élite dealing.”



It is not clear to me what the Prosperity Fund is doing (the name sounds like something along the lines of the Plunge Protection Team), but we can bank on it that Britain is involved in manipulating the global financial markets as well as other Rothschild controlled nations. So we have the British government, the US Plunge Protection Team, the US CIA (thru its secret funding of operations like the World Securities Fund), the large private banks controlled by the Rothschild Cabal), and secret insiders like George Soros all busy working together to manipulate and control the world financial markets for their personal gains.



For those persons wondering how the $27.5 trillion invested years ago has turned into some $60 to $70 trillion today, it’s not hard to see how it happened. Again, it appears that only an idiot can sit back and think that all of the works of Britain, the US, the CIA, the Rothschild Cabal of bankers, etc are being done for the benefit of the American, British and other peoples of the world. No, this pap and crap can be sold to idiot people who believe in the tooth fairy or who are in the market to buy a bridge in Brooklyn but I submit intelligent people are going to back off and say “no way.”



Some Questions and the Bottom Line



At this point there must be a ton of questions—which I certainly can’t answer. In fact, I can’t even verify the existence of this fund and the above statements beyond their presence in the various citations and numerous internet references. I do believe that Hodges and Associates are fully committed and that the cited law suits have taken place. The World Court writ of execution and lien is very plausible.



I think the various letters sent to Obama, Bernanke, etc all were sent by Hodges. I further believe that this gang at the Fed and with the US government would do as reported—ignore the requests and do as they please with the full assurance that they are above the law and that nobody can do anything to them since they control the powers of government. This is called the arrogance of power.



So we must logically ask—is the US Federal Reserve Bank/US government holding in some secret account (in the US or off shore) some $47 trillion belonging to the Chinese, $6.2 trillion belonging to Michael Cottrell, $4.5 trillion belonging to Leo Wanta and/or $3.87 trillion belonging to the CMKX Corp? Is some part of these funds being used to pump up the US dollar and US debt on occasion; suppress gold, silver and commodities; and manipulate the markets for the Rothschild Cabal? Well, I don’t know but I do know that where there’s smoke there’s fire.



In this vein, is it not entirely plausible that the US Treasury/Federal Reserve Bank could be holding trillions of dollars legally belonging to other parties—like the Chinese (and why the United States owes China some $47 trillion could be irrelevant at this point in time). If a settlement day ever arrives, what will this reality mean for the US dollar and the future of the US government and the American people?



The other major issue involved is plainly the apparent evidence that the US has been involved along with the Fed, the British, many/most/all agencies of the US government, various central banks, etc in the manipulation and control of the global financial markets for quite some time. Since Lord Jacob Rothschild of Britain is the master of this operation we can be sure that there is a Rothschild Cabal banker conspiracy and collusion of the parties at the top to rip off worldwide investors in the global financial markets.

____________________________________________________________________



Back issues of the Goldsmiths, by the editor of the Analysis of News, can be accessed from a Google or Yahoo search engine by typing in “R. D. Bradshaw” Goldsmiths. Several hundred web sites can be found with the back issues and with translations to Spanish, Italian, German, Dutch, Polish, Chinese, Japanese, Indonesian, Serbian, and other foreign languages. Finally, the “Archives-Goldsmiths” of this website (www.analysis-news.com ) has all of the Goldsmith articles issued to date.



Besides the revelations contained in the Goldsmiths’ articles, the work of the plutocratic financial market manipulators to conspiratorially manipulate and control the financial markets (to make more profits and install a world government under their management) is also addressed at length in the periodic analysis of the news and in other articles produced at www.analysis-news.com. This website has an article of interest to any person interested in understanding the market Manipulators. It is the Hidden Secret of the Manipulators, why they succeed and how to follow their manipulations.



Readers of the above articles are invited to visit www.analysis-news.com and become a subscriber to regularly read some of the material from the world of information which will further reveal how extensive the manipulation, control and dishonesty realities are in the financial, currency and commodity markets, not only in the US but indeed around the world. To go to the Home Page of this web site, click here: www.analysis-news.com.


-- Posted Friday, 29 October 2010

news.goldseek.com/GoldSeek/1288358131.php

[sandi66]

White House Insider: "They were in shock at the president’s behavior

Obama is Lost



Page 1 of 2 newsflavor.com/politics/world-politics/white-house-insider-they-were-in-shock-at-the-presidents-behavior/ or tinyurl.com/2bxkpcv

Page 2 of 2 newsflavor.com/politics/us-politics/white-house-insider-president-obama-is-lost-absolutely-lost/ or tinyurl.com/2a9hxt2


But you said in your email last week that…I know what I said. I know that. You don’t need to repeat what the email said, ok? I’m not the only one who needs to be careful here you know. You are getting too bold with this thing. I don’t mind using you to throw up some balloons, but I don’t want you getting hurt for it – and you’re stepping on some very large feet now with this stuff. I don’t know if you fully appreciate that, or the dangers that come with it.

At least give us an idea on this scandal you indicated earlier. However you wish to say it, I promised my readers information. (Laughs) Your readers! You are really getting into this thing now aren’t you!? Your readers…uh-huh. Don’t forget who gave you this information. Don’t forget who can take it away, ok? And I will. You’re playing your part in this – and I am writing the script. Don’t you -expletive- forget that.
Just tell me about this scandal. (Leans back, folds arms across chest. Looks outside – then back to me) Ok then – I’ll point your nose in the right direction. Enough people are sniffing in the same garbage pile anyways, including the Times. Though I suspect they are burying it at the moment, or trying to. They are still heavily invested in Obama, but that may change soon… Go back to Chicago. That is the key. There is other crap around the White House, other things that could trip them up, but Chicago is where the real heavy deal is that could bring the administration down. Go back and review Blagojevich. Go back and review Rezko, Barton, Stern, Giordano, Carothers, Jarret. It’s one and the same. It’s all connected, and it’s big. And people know. The White House is -expletive- itself over this stuff. Pelosi has it. Clintons have it – more of it than they had in 2008.

[sandi66]

New airline to launch direct London-Baghdad flights Monday, 01 November 2010 02:59
BAGHDAD: The first direct flights between London and Baghdad by a private Iraqi firm will begin next week, a civil aviation official said yesterday.

The Al Nasr company of Iraqi businessman Hussein Al Khawam “will fly its first Baghdad-London flight on November 3, but that date is not finalised,” said Nasser Hussein Badr, civil aviation director at the transport ministry.

A Boeing 737 leased from a European firm would initially fly the route, he said, without specifying what name the airline would bear. Flagship carrier Iraqi Airways said in May that the state-owned company would be dissolved after one of its planes was impounded at London’s Gatwick Airport in relation to a financial row with Kuwait.

Al-Nasr’s announcement came on the same day a plane operated by France’s Aigle Azur landed at Baghdad International Airport, becoming the first flight by a European carrier to arrive in the city since a 1990 international embargo on Iraq.

Aigle Azur’s twice-weekly Paris-Baghdad flights would begin in mid-January, the airline said.

That flight, and the announcement of the route to London, come at a time when foreign companies are demonstrating a growing desire to grab a share in oil-rich Iraq’s post-war reconstruction, following the 2003 US-led invasion.

More than 300 foreign firms are taking part in a 10-day international exhibition that opens in Baghdad on Monday, featuring companies from every sector other than defence.

The interest in aviation and business also indicate the improving security situation in Iraq, where bombs, killings and kidnappings remain routine, but significantly less than a peak in 2006 and 2007. An Iraqi Airways flight to London in May ended in legal nightmare for the carrier, after Kuwait took court action to reclaim more than 1.0 billion dollars it says it is owed.

Kuwait Airways alleged in court that Iraqi Airways owes it $1.2bn (¤900m).

The dispute dates back to executed Iraqi dictator Saddam Hussein’s invasion of Kuwait in 1990, when the airline says 10 of its planes and aircraft parts were plundered after its airport was seized.

A British judge ordered that the Iraqi Airways plane be impounded and the passport of the carrier’s chief executive, Kifah Hassan Jabbar, be seized.

Both the plane and the official later returned to Iraq, but the carrier decided to suspend flights to Europe. Despite that decision, the airline continues to fly routes in the Middle East, Badr said.

The United Nations slapped an embargo on Iraq following as punishment for the Kuwait invasion.



www.thepeninsulaqatar.com/middle-east/131071-new-airline-to-launch-direct-london-baghdad-flights-.html


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Operation Paper: The United States and Drugs in Thailand and Burma
Peter Dale Scott

Japan Focus - Peter Dale Scott - 54 minutes ago, October 31, 2010


This Chapter 3 from my newly published American War Machine describes America’s Operation Paper, a November 1950 program to arm and supply the Kuomintang remnant troops of General Li Mi in Burma. Operation Paper itself was relatively short-lived, but it had two long-term consequences that have not been adequately discussed.

The first is that the CIA was launched into its fifty-year history of indirectly facilitating and overseeing forces engaged in vastly expanding the production of opiates, in successive areas not previously major in the international traffic. This is a history that stretches, almost continuously, from Thailand and Burma through Laos until the 1970s, and then to present-day Afghanistan.

The second is that the resulting drug proceeds helped supplement the CIA’s efforts to develop its own Asian proxy armies, initially defensive but increasingly offensive. This led in 1959 to the initiation of armed conflict in the previously neutral and Buddhist nation of Laos, an unwinnable hot war that soon spread to Vietnam.

The decision to launch Operation Paper was made by a small cabal inside the Office of Policy Coordination (OPC), notably Desmond Fitzgerald and Richard Stilwell in conjunction with former OSS Chief William Donovan, who favored the rollback of communism over the official State Department policy of containment. My book sees the expanding offensive efforts in Southeast Asia, after switching from Li Mi’s forces to the CIA’s Thai proxy army PARU, as a watershed in the conversion of America’s post-war defense establishment, which was concerned above all with preserving the status quo in western Europe, into today’s offensive American War Machine, with actions centered on Southeast and Central Asia.

The writing of American War Machine has given me a clearer picture of America’s overall responsibility for the huge increases in global drug trafficking since World War II. This is exemplified by the more than doubling of Afghan opium drug production since the U.S. invaded that country in 2001. But the U.S. responsibility for the present dominant role of Afghanistan in the global heroin traffic has merely replicated what had happened earlier in Burma, Thailand, and Laos between the late 1940s and the 1970s. These countries also only became factors in the international drug traffic as a result of CIA assistance (after the French, in the case of Laos) to what would otherwise have been only local traffickers. •

It is not too much to conclude that, for such larger reasons of policy, U.S. authorities actually suborned at times an increase of illicit heroin traffic.

An understanding of this phenomenon must inform future scholarly work on drug trafficking in Asia.1

If opium could be useful in achieving victory, the pattern was clear. We would use opium.2

Thailand and Drugs: A Personal Preface

It is now clearly established that in November 1950, President Truman, faced with large numbers of Chinese communist troops pouring into Korea, approved an operation, code-named Operation Paper, to prepare remnant Kuomintang (KMT) forces in Burma for a countervailing invasion of Yunnan. It is clear also that these troops, the so-called 93rd Division under KMT General Li Mi, were already involved in drug trafficking. It is clear finally that, as we shall see, Truman belatedly approved a supply operation to drug traffickers that had already been in existence for some time.



The purpose of this chapter is to explore the process that led up to Truman’s validation of a program to use drug proxies in Burma. It will be an exercise in deep history, raising questions that the archival records presently available cannot definitively answer. Some of most relevant records, chiefly those of the Office of Policy Coordination (OPC) that initiated Operation Paper, are still closed to public view. Others, such as those of the World Commerce Corporation (WCC) or of the Willis Bird import-export firm in Bangkok, would probably tell us little even if we had them. And some of the most important events, such as the path by which Thai Opium Monopoly opium soon reached the streets of Boston, were probably never documented at all.

The topic of this chapter is a major one in the postwar history of China, Southeast Asia, and the global drug traffic. With needed U.S. support, above all in the form of airlift and arms, Li Mi’s irregulars were soon marketing, in the words of their U.S. overseer Richard Stilwell (chief of OPC Far East), “almost a third of the world’s opium supply.”3 Burton Hersh, who transmits Stilwell’s comment, adds his own remark that Li Mi’s troops “developed over time into an important commercial asset for the CIA.” Based on what is currently known, I would express the relationship differently: Li Mi’s drug-trafficking troops continued to be of major importance to the CIA—but as self-supporting, off-the-books allies in the struggle to secure Southeast Asia against communist advances, not as a source of income for the CIA itself.

Overview

In the 1950s, after World War II, the chances seemed greater than ever before for a more peaceful, orderly, legal, and open world. Even the world’s two great superpowers, the United States and the Soviet Union, had agreed on rules and procedures for mediating their serious differences through a neutral body, the United Nations. The United States was then wealthy enough to finance postwar reconstruction in devastated Europe and later fund international programs in fields such as health and agriculture in the newly liberated former colonies of the Third World.

But the United Nations was not destined to remain the theater for the resolution of international conflict. One major reason for this was that the Soviet Union, the United States, and then, after 1949, China all pursued covert policies, low key at first, that brought them increasingly into conflict and proxy war.

The Marxist-Leninist nations of the Soviet Union and China lent support to other Marxist-Leninist parties and movements, some of them insurrectionary, in other parts of the world. Washington’s often inaccurate perception saw these parties and movements as proxies for Soviet and/or Chinese power. Thus, much of the Cold War came to be fought covertly in areas, like Southeast Asia, about which both the United States and the Soviet Union were stunningly ignorant.

From the very beginning of the postwar era, Washington looked for proxies of its own to combat the threat it perceived of world revolution. Some of these proxies are now virtually forgotten, such as the Ukrainian guerrillas, originally organized by Hitler’s SS, who fought an OPC-backed losing battle against Russia into the early 1950s. Some, like the mafias in Italy and Marseille, soon outgrew their U.S. support to become de facto regional players in their own right.

But one of America’s early proxy armies, the remnants of Nationalist Chinese KMT forces in Burma and later Thailand, would continue to receive U.S. support into the 1960s. Like the mafias in Europe and the yakuza in Japan, these drug proxies had the advantage for secrecy of being off-the-books assets, largely self-supporting through their drug dealing, and firmly anticommunist.

The OPC and CIA’s initial support of this program, by reestablishing a major drug traffic out of Southeast Asia, helped institutionalize what became a CIA habit of turning to drug-supported off-the-books assets for fighting wars wherever there appeared to be a threat to America’s access to oil and other resources—in Indochina from the 1950s through the 1970s, in Afghanistan and Central America in the 1980s, in Colombia in the 1990s, and again in Afghanistan in 2001.7



The use of drug proxies, at odds with Washington’s official antidrug policies, had to remain secret. This meant that in practice major programs with long-term consequences were initiated and administered by small cliques with U.S. intelligence ties that were almost invisible in Washington and still less visible to the American people. These cliques of like-minded individuals, at ease in working with traffickers and other criminals, were in turn part of a cabal supported by elite groups at high levels.

The U.S. use of the drug traffic from the KMT troops in Burma had momentous consequences for the whole of Southeast Asia. For the OPC infrastructure for the KMT troops (Sea Supply Inc., see below) was expanded and modified, with support from William Donovan and Allen Dulles, to develop and support an indigenous guerrilla force in Thailand, PARU. PARU, far less publicized than the KMT troops, did as much or more to influence U.S. history. For PARU’s success in helping to guarantee the independence of Thailand encouraged the United States in the 1960s to use PARU in Laos and Vietnam as well. Thus, PARU’s early successes led the United States, incrementally, into first covert and eventually overt warfare in Laos and Vietnam. We shall see that, according to its American organizer James William [“Bill”] Lair, PARU, like the KMT forces, was in its early stage at least partly financed by drugs.

In short, some Americans had a predictable and almost continuous habit of turning to the drug traffic for off-the-books assets. This recourse began as a curious exception to the larger U.S. policy of seeking political resolution of international conflicts through the United Nations. It also pitted the regular U.S. diplomats of the State Department against the Cold Warriors of the secret agency, OPC, that had these drug assets at its disposal. This was not the only time that a small U.S. bureaucratic cabal, facing internal opposition but enjoying high-level backing, could launch an operation that became far larger than originally authorized. The pattern was repeated, with remarkable similarities, in Afghanistan in 1979. Once again, as in Thailand, the original stated goal was the defense of the local nation and the containment of the communist troops threatening to subdue it. Once again this goal was achieved. But once again the success of the initial defensive campaign created a momentum for expansion into a campaign of offensive rollback that led to our present unpromising confrontation with more and more elements of Islam.8

The cumulative history of these U.S. interventions, both defensive (successful) and offensive (catastrophic), has built and still builds on itself. Successes are seen as opportunities to move forward: it is hard for mediocre minds not to draw bad lessons from them. Failures (as in Vietnam) are remembered even more vividly as reasons to prove that one is not a loser.

It is thus important to analyze this recurring pattern of success leading to costly failure, to free ourselves from it. For it is clear that the price of imperial overstretch has been increasing over time.

With this end in mind, I shall now explore key moments in the off-the-books story of Southeast Asian drug proxies and the cliques that have managed them, a trail that leads from Thailand after World War II to the U.S. occupations of Iraq and Afghanistan today.

The Origins of the CIA Drug Connection in Thailand

To understand the CIA’s involvement in the Southeast Asian drug traffic after World War II, one must go back to nineteenth-century opium policies of the British Empire. Siamese government efforts to prohibit the smoking of opium ended in 1852, when King Mongkut (Rama IV), bowing to British pressures, established a Royal Opium Franchise, which was then farmed out to Siamese Chinese.9 Three years later, under the terms of the unequal Bowring Treaty, Siam accepted British opium free of duty, with the proviso that it was to be sold only to the Royal Franchise. (A year later, in 1856, a similar agreement was negotiated with the United States.) The opium farm became a source of wealth and power to the royal government and also to the Chinese secret societies or triads that operated it. Opium dependency also had the effect of easing Siam into the ways of Western capitalism by bringing “peasants into the cash economy as modern consumers.”10

Until it was finally abolished in 1959, proceeds from the Opium Franchise (as in other parts of Southeast Asia) provided up to 20 percent of Siamese government revenue.11 This is one reason why the opium franchise ceased to be farmed out to Chinese businessmen in 1907 and became (as again in other parts of Southeast Asia) a government monopoly. Another was the desire to reduce the influence of Chinese secret societies and encourage Chinese assimilation into Siam. As a result, the power of the secret societies did generally decline in the twentieth century, except for a revival under the Japanese occupation during World War II. By this time the KMT, operating under cover, was the most powerful force in the Bangkok Chinese community, with overlapping links to Tai Li’s KMT intelligence network and also the drug traffic.12

Although the official source of opium for the Siamese franchise was India, the relatively high cost of Indian opium encouraged more and more smuggling of opium from the Shan states of eastern Burma. With the gradual outlawing of the opium traffic in the early twentieth century, the British banned the use of Shan opium inside Burma but continued to tax the Shan states as before. In this way the British tacitly encouraged the export of Shan opium to the Thai market.13

When Thailand declared war against Britain in January 1942, Shan opium became the only source for the lucrative monopoly. This helps explain the 1942 invasion of the opium-producing Shan states by the Thai Northern (Prayap) army, in parallel to the Japanese expulsion of the British from Burma.14 In January 1943, as it became clearer that Japan would not win the war, the Thai premier Phibun Songkhram used the Northern Army in Kengtung, with its control of Shan opium, to open relations with the Chinese armies they had been fighting, which had by now retreated across the Yunnan–Burma frontier.15 One of these was the 93rd Division, at Meng Hai in the Thai Lü district of Sipsongphanna (Xishuangbanna) in Yunnan.16 The two sides, both engaged in the same lucrative opium traffic, quickly agreed to cease hostilities. (According to an Office of Strategic Services [OSS] observer, the warlord generals of Yunnan, Lung Yun, and his cousin Lu Han, commander of the 93rd Division, were busy smuggling opium from Yunnan across the border into Burma and Thailand.17)

An OSS team of Seri Thai (Free Thais), led by Lieutenant Colonel Khap Kunchon (Kharb Kunjara) and ostensibly under the direction of OSS Kunming, made contact with both sides in March–April 1944.18 When Khap arrived at the 93rd Division Headquarters, “he discovered that an informal ceasefire had been observed along the border between southern Yunnan and the Shan States [in Burma] since early 1943 with the arrangement being cemented from time to time by gifts of Thai whisky, cigarettes and guns presented to officers of the 93rd Division by their Thai counterparts.”19

Khap, with the permission of his OSS superior Nicol Smith, sent a message from Menghai to a former student of his now with the Thai Northern Army in Kengtung.20 “The letter stressed the need for Thai forces to switch sides at the appropriate moment and asked for the names of Thai officers in the area who would be willing to cooperate with the Allies.”21 Khap’s letter, with its apparent OSS endorsement, reached Phibun in Bangkok and led to an uninterrupted postwar collaboration between the Northern Army and the 93rd Division.22

Khap, however, was a controversial figure inside OSS, mistrusted above all for his dealings with Tai Li. We learn from Reynolds’s well-documented history that Tai Li and Khap, in conjunction with the original OSS China chief Milton Miles, had been concertedly pushing a plan to turn the Thai Northern Army against the Japanese.23 But John Coughlin, Miles’s successor as OSS chief in China, consulted some months later with Donovan in Washington and expressed doubts about the scheme. A follow-up memo to Donovan questioned Khap’s motives:

I . . . doubt that he can be trusted. . . . I feel that he will make deals with Tai Li of which I will not be informed. . . . I am at a loss to figure out Tai Li’s extreme interest in him, unless there is some agreement between them that I know nothing about.24

Like his sources, Reynolds’s archival history is tactfully silent on the topic of opium. But Tai Li’s opium connection to the KMT in Thailand and Burma was well known to OSS and may well have been on Coughlin’s mind.25



The Northern Army–93rd Division–KMT connection had enormous consequences. For the next three decades, Shan opium would be the source of revenue and power for the KMT in Burma and both the KMT and the Northern Army in Bangkok. All of Thailand’s military leaders between 1947 and 1975—Phin Chunhawan, his son-in-law Phao Sriyanon, Sarit Thanarat, Thanom Kittikachorn, Prapat Charusathien, and Kriangsak Chomanand—were officers from the Northern Army. Successively their regimes dominated and profited from the opium supplied by the KMT 93rd Division that after the war reestablished itself in Burma.26 This was true from the military coup in Bangkok of November 1947 until Kriangsak’s resignation in 1980.27 A series of coups d’état—in 1947, 1951, 1957, and 1975—can be analyzed in part as conflicts over control of the drug trade.28

As in Indonesia and other Asian countries, the generals’ business affairs were handled by local Chinese. The Chinese banking partner of Phin Chunhawan and Phao Sriyanon was Chin Sophonpanich, a member of the Free Thai movement who in the postwar years enabled Phao to die as “one of the richest men in the world.”29 When in 1957 Sarit displaced Phao and took over both the government and the drug trade, both Phao and Chin had to flee the country.30

The United States Helps Rebuild the Postwar Drug Connection

To appreciate the significance of the connection we are discussing, we must keep in mind that, by 1956, the KMT had been driven from the Chinese mainland and that Chinese production of opium, even in remote mountainous Yunnan, had been virtually eliminated. The disruptions of a world war and revolution had created an opportunity to terminate the opium problem in the Far East. Instead, U.S. covert support for the Thai and KMT drug traffickers converted Southeast Asia, for more than two decades, into the world’s major source of opium and heroin.

The origins of the U.S. interface with these drug traffickers in Thailand and Burma are obscure. They appear, however, to have involved principally four men: William Donovan; his British ally Sir William Stephenson, the organizer with Donovan of the World Commerce Corporation (WCC); Paul Helliwell; and Willis Bird (both veterans of OSS China). After World War II, Sir William Stephenson’s WCC “became very active in Bangkok,” and Stephenson himself established a strong personal relationship with King Rama IX.31

Stephenson recruited James Thompson, the last OSS commander in Bangkok, to stay on in Bangkok as the local WCC representative. This led to the WCC’s financing of Thompson’s Thai Silk Company, a successful commercial enterprise that also covered Thompson’s repeated trips to the northeastern Thai border with Laos, the so-called Isan, where communist insurrection was most feared and where future CIA operations would be concentrated.32 One would like to know whether WCC similarly launched the import-export business of Willis Bird, of whom much more shortly.

In the same postwar period, Paul Helliwell, who earlier had been OSS chief of Special Intelligence in Kunming, Yunnan, served as Far East Division chief of the Strategic Service Unit, the successor organization to OSS.33 In this capacity he allegedly “became the man who controlled the pipe-line of covert funds for secret operations throughout East Asia after the war.”34 Eventually, Helliwell would be responsible for the incorporation in America of the CIA proprietaries, Sea Supply Inc. and Civil Air Transport (CAT) Inc. (later Air America), which would provide support to both Phao Sriyanon of the Northern Army in Thailand and the KMT drug camps in Burma. It is unclear what he did before the creation of OPC in 1948. Speculation abounds as to the original source of funds available to Helliwell in this earlier period, ranging from the following:

1. The deep pockets of the overworld figures in the WCC. Citing Daniel Harkins, a former USG investigator, John Loftus and Mark Aarons claimed that Nazi money, laundered and manipulated by Allen Dulles and Sir William Stephenson through the WCC, reached Thailand after the war. When Harkins informed Congress, he “was suddenly fired and sent back [from Thailand] to the United States on the next ship.”35

2. The looted gold and other resources collected by Admiral Yamashita and others in Japan36 or of the SS in Germany.

3. The drug trade itself. Further research is needed to establish when the financial world of Paul Helliwell began to overlap with that of Meyer Lansky and the underworld. The banks discussed in the chapter 7, which are outward signs of this connection (Miami National Bank and Bank of Perrine), were not established until a decade or more later. Still to be established is whether the Eastern Development Company represented by Helliwell was the firm of this name that in the 1940s cooperated with Lansky and others in the supply of arms to the nascent state of Israel.37

Of these the best available evidence points tentatively to Nazi gold. We shall see that Helliwell acquired a banking partner in Florida, E. P. Barry, who had been the postwar head of OSS Counterintelligence (X-2) in Vienna, which oversaw the recovery of SS gold in Operation Safehaven.38 And it is not questioned that in December 1947 the National Security Council (NSC) created a Special Procedures Group “that, among other things, laundered over $10 million in captured Axis funds to influence the [Italian] election [of 1948].”39 Note that this authorization was before NSC 10/2 of June 18, 1948, first funded covert operations under what soon became OPC.

What matters is that, for some time before the first known official U.S. authorizations in 1949–1950, funds were reaching Helliwell’s former OSS China ally Willis Bird in Bangkok. There Bird ran a trading company supplying arms and materiel to Phin Chunhawan and Phin’s son-in-law, Phao Sriyanon, who in 1950 became director-general of the Thai Police Department. By 1951 OPC funds for Bird were being handled by a CIA proprietary firm, Sea Supply Inc., which had been incorporated by Paul Helliwell in his civilian capacity as a lawyer in Miami. As noted earlier, Helliwell also became general counsel for the Miami bank that Meyer Lansky allegedly used to launder proceeds from the Asian drug traffic.

Some sources claim that in the 1940s, Donovan, whose link to the WCC was by 1946 his only known intelligence connection, also visited Bangkok.40 Stephenson’s biographer, William Stevenson, writes that because MacArthur had cut Donovan out of the Pacific during World War II, Donovan “therefore turned Siam [i.e., Thailand] into a base from which to run [postwar] secret operations against the new Soviet threat in Asia.”41

William Walker agrees that by 1947–1948, the United States increasingly defined for Thailand a place in Western strategic policy in the early cold war. Among those who kept close watch over events were William J. Donovan, wartime head of the OSS, and Willis H. Bird, who worked with the OSS in China. . . . After the war, Bird, . . . still a reserve colonel in military intelligence, ran an import-export house in Bangkok. Following the November [1947 Thailand coup] Bird . . . implored Donovan: “Should there be any agency that is trying to take the place of O.S.S., . . . please have them get in touch with us as soon as possible. By the time Phibun returned as Prime Minister, Donovan was telling the Pentagon and the State Department that Bird was a reliable source whose information about growing Soviet activities in Thailand were credible.42

Bird’s wishes were soon answered by NSC 10/2 of June 18, 1948, which created the OPC. Washington swiftly agreed that Thailand would play an important role as a frontline ally in the Cold War. In 1948, U.S. intelligence units began arming and training a separate army under General Phao, which became known as the Thai Border Police (BPP). The relationship was cemented in 1949 as the communists captured power in China. The generals demonstrated their anticommunist credentials by echoing U.S. propaganda and killing alleged leftists. At midyear a CIA [OPC] team arrived in Bangkok to train the BPP for covert support of the Kuomintang in its continuing war against the Chinese communists on the Burma-China border. Later in the year the United States began to arm and train the Thai army and to provide the kingdom general economic aid.43

Walker notes how the collapse of the KMT forces in China led Washington to subordinate its antinarcotics policies to the containment of communism: By the fall of 1949 . . . reports reached the State Department about the inroads communism was making within the Chinese community in Thailand as well as the involvement of the Thai army with opium. Since the army virtually controlled the nature of Thailand’s security relationship with the West, foreign promotion of opium control had to take a back seat to other policy priorities.44

On March 9, 1950, when Truman was asked to approve $10 million in military aid for Thailand, Acheson’s supporting memo noted that $5 million had already been approved by Truman for the Thai “constabulary.”45 This presumably came from the OPC’s secret budget: I can find no other reference to the $5 million in State Department published records, and two years later a U.S. aid official in Washington, Edwin Martin, wrote in a secret memo that the Thai Police force under General Phao “is receiving no American military aid.”46

Cliques, the Mob, the KMT, and Operation Paper

The U.S. decision to back the KMT troops—the so-called Li Mi project or Operation Paper—was made at a time of intense interbureaucratic conflict and even conspiratorial disagreement over official U.S. policy toward the new Chinese People’s Republic. As the historian Bruce Cumings has shown, both the KMT-financed China Lobby and many Republicans, like Donovan, as well as General MacArthur in Japan, were furious at the failure of Secretary of State Dean Acheson to continue support for Chiang Kai-shek after the founding of the People’s Republic in October 1949.47 Up until the June 1950 outbreak of war in Korea, Acheson refused to guarantee even the security of Taiwan.48



The key public lobbyist for backing the KMT in Burma and Yunnan was General Claire Chennault, original owner of the airline the OPC took over. Chennault deserves to be remembered as an early postwar proponent of using off-the-books assets: his “Chennault Plan” envisaged essentially self-financing KMT armies, backed by a covert U.S. logistical airline, in support of U.S. foreign policy.49 Because by this time Chennault was serving in Washington as Chiang Kai-shek’s military representative, he was viewed by U.S. officials with increasing suspicion if not distaste.50 Yet his longtime associate, friend, and business ally Thomas (“Tommy the Cork”) Corcoran, who after 1950 was a registered foreign agent for Taiwan, managed to put Chennault in contact with senior OPC officers, including Richard Stilwell, chief of the Far East Division of the OPC.51

There were other private interests with a stake in Operation Paper. In 1972 I noted that the two principal figures inside the United States who backed Chennault, Paul Helliwell and Thomas Corcoran, were both attorneys for the OSS-related insurance companies of C. V. Starr in the Far East.52 (Starr, who had operated out of Shanghai before the war, helped OSS China establish a network both there and globally.53) The C. V. Starr companies (later the massive AIG group) allegedly had “close financial ties” with Chinese Nationalists in Taiwan,54 and in any case they would of course have had a financial interest both in restoring the KMT to power in China and in consolidating a Western presence in Southeast Asia.55 At the time of Corcoran’s lobbying, Starr’s American International Assurance Company was expanding from its Hong Kong base to Malaysia, Singapore, and Thailand. In 2006, that company was “the No. 1 life insurer in Southeast Asia.”56 And its parent AIG, before AIG’s spectacular collapse in 2008, was listed by Forbes as the eighteenth-largest public company in the world.

Corcoran was also the attorney in Washington for Chiang Kai-shek’s brother-in-law T. V. Soong, the backer of the China Lobby who some believed to be the “wealthiest man in the world.”57 It is likely that Soong and the KMT helped develop the Chennault Plan. A complementary plan for supporting the remnants of General Li Mi’s KMT armies in Burma was developed in 1949 by the army’s civilian adviser, Ting Tsuo-shou, after discussions on Taiwan with Chiang Kai-shek.58

Like Chiang Kai-shek, Chennault also had support from Henry Luce of Time-Life in America and both General MacArthur and his intelligence chief, Major General Charles Willoughby, in Japan. Their plans for maintaining and reestablishing the KMT in China were in 1949 already beginning to diverge significantly from those of Truman and his State Department.59 Former OSS Chief William Donovan, now outside the government and promoting the KMT, also promoted both Chiang Kai-shek and Chennault,60 as did Chennault’s wartime associate William Pawley, a freewheeling overseas investor who, like Helliwell, reputedly had links to mob drug traffickers.61

Donovan’s support for Chennault was part of his general advocacy of rollback against communism and his interest in guerrilla armies—a strongly held ideology that, as we shall see, led to his appointment as ambassador to Thailand in 1953. His intellectual ally in this was the former Trotskyite James Burnham, another protégé of Henry Luce by then in the OPC (and a prototype of the neoconservatives half a century later). Burnham wrote in his book (“published with great Luce fanfare in early 1950”) of “rolling back” communism and of supporting Chiang Kai-shek to, at some future point, “throw the Communists back out of China.”62

The Belated Authorization of Operation Paper

In the midst of this turmoil, OPC Chief Frank Wisner began in the summer of 1948 to refinance and eventually take over Chennault’s airline, CAT, which Chiang Kai-shek’s friend Claire Chennault had organized with postwar UN relief funds to airlift supplies to the KMT armies in China. Wisner “negotiated with Corcoran for the purchase of CAT [in which Corcoran as well as Chennault had a financial interest]. In March [1950], using a ‘cutout’ banker or middleman, the CIA paid CAT $350,000 to clear up arrearages, $400,000 for future operations, and a $1 million option on the business.”63

Richard Stilwell, Far Eastern chief of the OPC and the future overseer of Operation Paper, dickered with Corcoran over the purchase price.64 The details were finalized in March 1950, shortly before the outbreak of the Korean War in June generated for CAT Inc. a huge volume of new business.65 Alfred Cox, OPC station chief in Hong Kong and the chief executive officer (CEO) of CAT Inc., directed the supply operation to Li Mi.66

According to an unfavorable assessment by Lieutenant Colonel William Corson, a former marine intelligence officer on special assignment with the CIA, the OPC,

in late summer 1950, recruited (or rather hired) a batch of Chinese Nationalist soldiers [who] were transported by the OPC to northern Burma, where they were expected to launch guerrilla raids into China. At the time this dubious project was initiated no consideration was given to the facts that (a) Truman had declined Chiang’s offer to participate in the Korean War . . . (b) Burmese neutrality was violated by this action; and (c) the troops provided by Chiang were utterly lacking in qualifications for such a purpose.67

Shortly afterward, in October 1950, Truman appointed a new and more assertive CIA director, Walter Bedell Smith. Within a week Smith took the first steps to make the OPC and Wisner answerable for the first time, at least on paper, to the CIA.68 Smith ultimately succeeded in his vigorous campaign to bring Wisner and the OPC under his control, partly by bringing in Allen Dulles to oversee both the OPC and the CIA’s rival Office of Special Operations (OSO, the successor to the Strategic Service Unit).69 Yet in November 1950, only one month after his appointment as director, Smith tried and failed to kill Operation Paper when the proposal was belatedly submitted by the OPC (backed by the Joint Chiefs) for Truman’s approval:

The JCS [Joint Chiefs of Staff] in April 1950 issued a series of recommendations, including a programme of covert assistance to local anti-communist forces. This proposal received additional stimulus following the Korean War and especially after Communist China entered that conflict. Shortly after the People’s Republic’s (PRC’s) intervention, the Central Intelligence Agency’s (CIA’s) Office of Policy Co-ordination (OPC) proposed a programme to divert the PRC’s military from the Korean peninsula. The plan called for U.S. aid to the 93rd, followed by an invasion of Yunnan by Li’s men. Interestingly, the CIA’s director, Walter Bedell Smith, opposed the plan, considering it too risky. But President Harry S. Truman saw merit in the OPC proposal and approved it. The programme became known as Operation Paper.70

It is not clear whether, when Truman approved Operation Paper in November 1950, his secretary of state, Dean Acheson, was even aware of it. It is a matter of record that the U.S. embassies in Burma and Thailand knew nothing of the authorization until well into 1951, when they learned of it from the British and eventually from Phibun himself.71 The scholar Victor Kaufman reports that he “was unable to turn up any evidence at the Truman Library, the National Archives or in the volumes of FRUS [Foreign Relations of the United States] to determine whether in fact Acheson knew of the operation and, if so, at what point.”72

Both MacArthur and Chennault had ambitious designs for the CAT-supported KMT troops in Burma. With the outbreak of the Korean War in 1950, CAT played an important role in airlifting supplies to the U.S. troops.73 But both MacArthur and Chennault spoke publicly of trapping communist China in what Chennault called a “giant pincers”—simultaneous attacks from Korea and from Burma.74

The OPC kicked in by helping to build up a major airstrip at the chief KMT base at Mong Hsat, Burma, followed by a regular shuttle transport of American arms.75 However, Li Mi’s attempts to invade Yunnan in 1951 and 1952 (three according to McCoy, seven according to Lintner) were swiftly repelled by local militiamen with heavy casualties after advances of no more than sixty miles.76 CIA advisers accompanied the incursions, and some of them were killed.77

American journalists and historians like to attribute the CIA’s Operation Paper, in support of Li Mi and the opium-growing 93rd Division in Burma, to President Truman’s authorization in November 1950, following the outbreak of the Korean War in June 1950 and above all the Chinese crossing of the Yalu River.78 But as historian Daniel Fineman points out, Truman was merely authorizing an arms shipments program that had already begun months earlier:

Shortly after the writing of the [April 1950] JCS memorandum, the United States began supplying arms and matériel to the [KMT] troops. [The Burmese protested in August 1950 that they had discovered in northern Burma an American military officer from the Bangkok embassy in Burma without authorization.79] In the fall, the . . . Office of Policy Coordination (OPC) drafted a daring plan for them to invade Yunnan. The CIA’s director, Walter Bedell Smith, opposed the risky scheme, but Truman [in November 1950] rejected his warning. . . . In January 1951, the CIA initiated its project, code-named Operation Paper. It aimed to prepare the Kuomintang (KMT) forces in Burma for an invasion of Yunnan.80

The futility of Li Mi’s military jabs against China was obvious to Washington by 1952. Yet Federal Bureau of Narcotics (FBN) Chief Harry Anslinger continued to cover up the Li Mi-Thai drug connection for the next decade. The annual trafficking reports of the FBN recorded one seizure of distinctive Thai Government Monopoly opium in 1949 and on “several occasions” more in 1950. But after the initiation of Operation Paper in 1951, the FBN over a decade listed only one seizure of Thai drugs (from two seamen), until it began reporting Thai drug seizures again in 1962.81

Meanwhile, Anslinger, who “had established a working relationship with the CIA by the early 1950s . . . blamed the PRC [People’s Republic of China, as opposed to their enemy the KMT] for orchestrating the annual movement of some two hundred to four hundred tons of opium from Yunnan to Bangkok.”82 This protection of the world’s leading drug traffickers (who were also CIA proxies) did not cease with Anslinger, nor even when the FBN, by then thoroughly corrupted from such cover-ups, was replaced in 1968 by the Bureau of Narcotics and Dangerous Drugs and finally in 1973 by the Drug Enforcement Administration. As I write in 2010, the U.S. media are blaming the drug traffic in Afghanistan on the Taliban-led insurgency, but UN statistics (examined later in this book) suggest that insurgents receive less than 12 percent of the total drug revenues in Afghanistan’s totally drug-corrupted economy.



As we saw in the previous chapter, Anslinger’s tenure at the FBN was when the CIA also forged anticommunist drug alliances in Europe in the 1940s with the Italian Mafia in Sicily and the Corsican Mafia in Marseilles. The KMT drug support operation was longer lived and had more lasting consequences in America as well as in Southeast Asia. It converted the Golden Triangle of Burma–Thailand–Laos, which before the war had been marginal to the global drug economy, into what was for two decades the dominant opium-growing area of the world.

Did Some People Intend to Develop the Drug Traffic with Operation Paper?

The decision to arm Li Mi was obviously controversial and known to only a few. Some of those backing the OPC’s support of a pro-KMT airline and troops may have envisaged from the outset that the 93rd Division would continue, as during the war, to act as drug traffickers. The key figure, Paul Helliwell, may have had a dual interest, inasmuch as he not only was a former OSS officer but also at some point became the legal counsel in Florida for the small Miami National Bank used after 1956 by Meyer Lansky to launder illegal funds.83 We shall see in the next chapter that Helliwell also went on to represent Phao’s drug-financed government in the United States and to receive funds from that source.84

It is possible that in the mind of Helliwell, with his still ill-understood links to the underworld and Meyer Lansky, Li Mi’s troops were not being used to invade China so much as to restore the war-dislocated international drug traffic that supported the anticommunist KMT and the comprador capitalist activities of its supporters throughout Southeast Asia.85 (As a military historian has commented, “Li Mi was more Mafia or war lord than Chinese Nationalist. Relying on his troops to bring down Mao was an OPC pipe dream.”86)

It is possible also that other networks associated with the drug traffic became part of the infrastructure of the Li Mi operation. This question can be asked of some of the ragtag group of pilots associated with Chennault’s airlines in Asia, some of whom were rumored to have seized this opportunity for drug trafficking.87 According to William R. Corson (a marine colonel assigned at one point to the CIA),

The opium grown by the ChiNat guerrillas . . . was transported by OPC contract aircraft from the forward base to Bangkok for sale to buyers from the various “connections.” The pilots who flew these bushtype aircraft and often served as agents or go-betweens with the guerrilla leaders and the opium buyers were a motley band of men. Some were ex-Nazis, others part of the band of expatriates who emerge in foreign countries following any war.88

The FBN by this time was aware that Margaret Chung, the attending physician to the pilots of Chennault’s wartime airline, was involved with Bugsy Siegel’s friend Virginia Hill “in the narcotic traffic in San Francisco.”89 During World War II, when the Office of Naval Intelligence through the OSS approached Dr. Chung for some specific intelligence on China, she “volunteered that she could supply detailed information . . . ‘from some of the smugglers in San Francisco.’”90

One has to ask what was in the mind of Chennault. Chennault himself was once investigated for smuggling activities, “but no official action was taken because he was politically untouchable.”91 I have no reason to suspect that Chennault wished to profit personally from the drug traffic. But his objective in opposing Chinese communists was to split off ethically divergent provinces like Xinjiang, Tibet, and above all Yunnan.

Chennault’s top priority was Yunnan, with its long-established Haw (or Hui) Muslim minority, many of whom (especially in southwestern Yunnan) traditionally dominated the opium trade into Thailand.92 The troops of the reconstituted 93rd Division were principally Haws from Yunnan.93 To this day, one Thai name for the KMT Yunnanese minority in northern Thailand is gaan beng gaaosipsaam (“93rd Division”), and visitors to the former base of the KMT general Duan Xiwen in Thailand (Mae Salong) are struck by the mosque one sees there.94

I suspect that Chennault may have known that none of the elements in the reconstituted 93rd Division “had made great records of military accomplishment” during World War II,95 that the 93rd had been engaged in drug trafficking when based at Jinghong during World War II,96 and that when the 93rd Division moved into northern Burma and Laos in 1946, it was “in reality, to seize the opium harvest there.”97 That the 93rd Division settled into managing the postwar drug traffic out of Burma should have come as no surprise. Chennault was close to Madame Chiang Kai-shek, T. V. Soong, and the KMT, which had been supporting itself from opium revenues since the 1930s.98 Linked to drug trafficking both in Thailand (through the Tai Li spy network) and in America, the KMT, after expulsion from Yunnan, desperately needed a new opium supply to maintain its contacts with the opiumtrafficking triads and other former assets of Tai Li in Southeast Asia.99

From the time of the inception of the KMT government in the 1920s, KMT officials had been caught smuggling opium and heroin into the United States.100 As noted earlier, an FBN supervisor reported in 1946 that “in a recent Kuomintang Convention in Mexico City a wide solicitation of funds for the future operation of the opium trade was noted.” In July 1947 the State Department reported that the Chinese Nationalist government was “selling opium in a desperate attempt to pay troops still fighting the Communists.”101 The New York Times reported on July 23, 1949, the seizure in Hong Kong of twenty-two pounds of heroin that had arrived from a CIA-supplied Kuomintang outpost in Kunming.102 But the loss of Yunnan in 1949–1950 meant that the KMT would have to develop a new source of supply.

The key to the survival of the KMT was of course its establishment and protection after 1949 on the island of Taiwan. Chennault and his airline CAT helped move the KMT leadership and its resources to its new base and to deny the new Chinese People’s Republic the Chinese civil air fleet (which became embroiled in a protracted Hong Kong legal battle where CAT was represented by William Donovan).103 By 1950 one of Chennault’s wartime pilots, Satiris (or Soteris or Sortiris) Fassoulis ran a firm, Commerce International China, Inc., that privately supplied arms and military advisers to Chiang Kai-shek on Taiwan. Bruce Cumings speculates that he may have done so for the OPC at a time when Acheson was publicly refusing to commit the United States to the defense of Taiwan.104

Finally, all those handling Operation Paper in and for the OPC (Fitzgerald, Helliwell, Joost, CAT Inc. CEO Alfred Cox, and Bird) had had experience in the area during World War II. If they had not wanted Li Mi and CAT to be- come involved in restoring the KMT drug traffic, it would have been imperative for them to ensure that the KMT on Taiwan had no control over CAT’s operations. But Wisner and Helliwell did the exact opposite: when they took over the CAT airline, they gave majority control of the CAT planes to the KMT-linked Kincheng Bank on Taiwan.105 Thereafter for many years CAT planes would fly arms into Li Mi’s camp for the CIA and then fly drugs out for the KMT.

The opium traffic may well have seemed attractive to OPC for strategic as well as financial reasons. As Alfred McCoy has observed, Phao’s pro-KMT activities in Thailand “were a part of a larger CIA effort to combat the growing popularity of the People’s Republic among the wealthy, influential overseas Chinese community throughout Southeast Asia.”106 I have noted elsewhere that the KMT reached these communities in part through triads and other secret societies (especially in Malaya) that had traditionally been involved in the opium traffic. Thus, the restoration of an opium supply in Burma to replace that being lost in Yunnan had the result of sustaining a social fabric and an economy that was capitalist and anticommunist.107

I would add today that the opium traffic was an even more important element in an anticommunist strategy for Southeast Asia as a source of income. We have already seen that for a century, the Thai state had relied on its revenues from the state opium monopoly; in 1953 “the Thai representative at the April CND [Commission on Narcotic Drugs] session had admitted that his country could not afford to give up the revenue from the opium business.”108

Just as important was the role of opium profits in promoting capitalism among the Chinese businessmen of Southeast Asia (the agenda of Sir William Stephenson and the WCC). Whether the Chinese who dominated business in the region would turn their allegiance to Beijing depended on the availability of funds for alternative business opportunities. Here Phao’s banker, Chin Sophonpanich, became a source of funds for top anticommunist businessmen not only in Thailand but also in Malaysia and Indonesia:

Chin Sophonpanich created the largest bank in south-east Asia and one that was extremely profitable. A report by the International Monetary Fund in 1973 claimed that Bangkok Bank’s privileged position allowed it to make returns on its capital in excess of 100 per cent a year (a claim denounced by Chin’s lieutenants). What was not in dispute was that the bank’s bulging deposit base could not be lent out at optimum rates in Thailand alone. This is where Chin revolutionised the south-east Asian banking scene. He personally travelled between Hong Kong, Singapore, Kuala Lumpur and Jakarta, identifying and courting the new generation of putative post colonial tycoons. . . . Chin banked the key godfathers outside Hong Kong—Robert Kuok in Malaysia, Liem Sioe Liong [Sudono Salim] in Indonesia, the Chearavanonts in Thailand—as well as other players in Singapore and Hong Kong. . . . Chin was closely linked to the Thai heroin trade through his role as personal financier to the narcotics kingpin Phao Sriyanon, and to other politicians involved in running the drug business.109

Chin thus followed the example of the Khaw family opium farmers in nineteenth-century Siam, whose commercial influence also eventually “extended across Siam’s southern borders into Malaya and the Netherlands East Indies” into legitimate industries, such as tin mines and a shipping company.110

America had another reason to accept Li Mi’s smuggling activities: as a source of badly needed Burmese tungsten. According to Jonathan Marshall, there is fragmentary evidence that OPC/CIA support for his remnant army was “also to facilitate Western control of Burma’s tungsten resources.”111

Creation of an Off-the-Books Force without Accountability

The OPC aid to Thai police greatly augmented the influence of both Phao Sriyanon, who received it, and Willis Bird, the OSS veteran through which it passed and who was already a supplier for the Thai military and police. Seeing the gap between the generals who had organized the military coup of 1947 and U.S. Ambassador Stanton, who still worked to support civilian politicians, Bird worked with Phao and the generals of the 1947 Coup Group to create in 1950 a secret “Naresuan Committee.” Bypassing the U.S. embassy altogether, the Naresuan Committee created a parallel, parastatal channel for U.S.–Thai governmental relations between OPC and Phao’s BPP:

Bird organized in 1950 a secret committee of leading military and political figures to develop an anticommunist strategy and, more importantly, lobby the United States for increased military assistance. The group, dubbed the Naresuan Committee, included police strongman Phao Sriyanon, Sarit Thanarat, Phin Choonhawan, Phao’s father-in-law, air force chief Fuen Ronnaphakat, and Bird’s [Anglo-Thai] brother-in-law, [air force colonel] Sitthi [Savetsila, later Thailand’s foreign minister for a decade]. . . . Bird and the generals established their committee to bypass the ambassador and . . . work through [Bird’s] old OSS buddies now employed by the CIA [sic, i.e., OPC].112

Thomas Lobe, ignoring Bird, writes that it was the “Thai military clique” who organized the committee. But from his own prose we learn that the initiative may have been neither theirs nor Bird’s alone but in implementation of a new strategy of support to the KMT in Burma, designed by the OPC and JCS in Washington:

A high-ranking U.S. military officer and a CIA [OPC] official came to Bangkok [in 1950] to review the political situation.113 . . . Through the “[Naresuan] Anti-Communist Committee,” secret negotiations ensued between Phao and the CIA [OPC]. The U.S. representative explained the need for a paramilitary force that could both defend Thai borders and cross over into Thailand’s neighbors— Vietnam, Laos, Burma, Cambodia, and China—for secret missions. . . . The CIA’s new police were to be special: an elite force outside the normal chain of command of both the Thai security bureaucracy and the TNPD [Thai National Police department]. Phao and Phibun agreed to this arrangement because of the increase in armed power that this new national police meant vis-à-vis the armed forces.114

This was in keeping with the JCS call in April 1950 for a new “program of special covert operations designed to interfere with Communist activities in Southeast Asia,” noting “the evidences of renewed vitality and apparent increased effectiveness of the Chinese Nationalist forces.”115

Action was taken immediately:

[Bird’s] CIA [i.e., OPC] contacts sent an observer to meet the committee and, impressed with the resolve the Thais manifested, got Washington to agree to a large covert assistance program. Because they considered the matter urgent, planners on both the Thai and American sides decided to forgo a formal agreement on the terms of the aid. Instead, Paul Helliwell, an OSS friend of Bird [from China] now practicing law in Florida [as well as military reserve officer and OPC operative], incorporated a dummy firm in Miami named the Sea (i.e. South-East Asia) Supply Company as a cover for the operation. The CIA [OPC], the agency on the American end responsible for the assistance, opened a Sea Supply office in Bangkok. . . . By the beginning of 1951, Sea Supply was receiving arms shipments for distribution. . . . The CIA [OPC] appointed Bird’s firm general agent for Sea Supply in Bangkok.116

Sea Supply’s arms from Bird soon reached not only the Thai police and BPP but also, starting in early 1951, the KMT 93rd Division in Burma, which was still supporting itself, as during the war, from the opium traffic.117 General Li Mi, the postwar commander of the 93rd Division, would consult with Bird and Phao in Bangkok about the arms that he needed for the KMT base at Mong Hsat in Burma and that had already begun to reach him months before the creation of the Bangkok Sea Supply office in January 1951.118 The airline supplying the KMT base at Mong Hsat in Burma from Bangkok was Helliwell’s other OPC proprietary, CAT Inc., which in 1959 changed its name to become the well-known Air America. The deliberately informal arrangement for Sea Supply served to mask the sensitive arms shipments to a KMT opium base.119



In the complex legal takeover of Chennault’s airline, his assets developed into three separate components: planes (the Taiwanese civilian airline In the complex legal takeover of Chennault’s airline, his assets developed into three separate components: planes (the Taiwanese civilian airline Civil Air Transport or CATCL), pilots (later Air America), and ground-support operations (Air Asia). Of these the planes only 40 percent were owned by the CIA; the remaining 60 percent continued to be owned by KMT financiers (with alleged links to T.V. Soong and Mme. Chiang K ai-shek), who had relocated to Taiwan and were associated with the Kincheng Bank.120 The Kincheng Bank was under the control of the so-called Political Science Clique of the KMT, whose member Chen Yi was the first postwar KMT governor of Taiwan.121

The OPC’s organizational arrangements for its proprietary CAT, which left 60 percent of the company owning the CAT planes in KMT hands, guaranteed that CAT’s activities were immune to being reined in by Washington.122

In fact Helliwell, Bird, and Bird’s Thai brother-in-law Sitthi Savetsila all avoided the U.S. embassy and instead plotted strategy for the KMT armies at the Taiwanese embassy. There the real headquarters for Operation Paper was the private office of Taiwanese Defense Attaché Chen Zengshi, a graduate of China’s Whampoa Military Academy.123

Bird’s energetic promotion of Phao, precisely at a time when the U.S. embassy was trying to reduce Phao’s corrupt influence, led to a 1951 embassy memorandum of protest to Washington about Bird’s activities. “Why is this man Bird allowed to deal with the Police Chief [Phao]?” the memo asked.124 The question, for which there is no publicly recorded reply, was an urgent one. Bird’s backing of the so-called Coup Group (Phin Choonhavan, Phao Sriyanon, and Sarit Thanarat), reinforced by the obvious U.S. support for Bird through Operation Paper and Sea Supply, encouraged these military men, in their November 1951 “Silent Coup,” to defy Stanton, dissolve the Thai parliament, and replace the postwar Thai constitution with one based on the much more reactionary constitution of 1932.125

The KMT Drug Legacy for Southeast Asia

When the OPC airline CAT began its covert flights to Burma in the 1950s, the area produced about eighty tons of opium a year. In ten years’ time, production had at least quadrupled, and at one point during the Vietnam War, the output from the Golden Triangle reached 1,200 tons a year. By 1971, there were also at least seven heroin labs in the region, one of which, close to the CIA base of Ban Houei Sai in Laos, produced an estimated 3.6 tons of heroin a year.126

The end of the Vietnam War did not interrupt the flow of CIA-protected heroin to America from the KMT remnants of the former 93rd Division, now relocated in northern Thailand under Generals Li Wenhuan and Duan Xiwen (Tuan Hsi-wen). The two generals, by then officially integrated into the defense forces of Thailand, still enjoyed a special relationship to and protection from the CIA. With this protection, Li Wenhuan, from his base in Tam Ngob, became, according to James Mills, “one of the most powerful narcotics traffickers on earth . . . controlling the opium from which is refined a major percentage of heroin entering the United States.”127

From the very outset of Operation Paper, the consequences were felt in America itself. As I have shown elsewhere, most of the KMT-Thai opium and heroin was distributed in America by KMT-linked tongs with long-term ties to the American mafia.128 Thus, Anslinger’s rhetoric served to protect the primary organized crime networks distributing Asian narcotics in America. Far more than the CIA drug alliances in Europe, the CIA’s drug project in Asia contributed to the drug crisis that afflicted America during the Vietnam War and from which America still suffers. Furthermore, U.S. protection of leading KMT drug traffickers led to the neutralization of domestic drug enforcement at a high level. It has also inflicted decades of militarized oppression on the tribes of eastern Myanmar (Burma), perhaps the principal victims of this story.

By the end of 1951, Truman, convinced that the KMT forces in Burma were more of a threat to his containment policy than an asset, “had come to the conclusion that the irregulars had to be removed.”129 Direct U.S. support to Li Mi ended, forcing the KMT troops to focus even more actively on proceeds from opium, soon supplemented by profits from morphine labs as well. But nevertheless, in June 1952, as we shall see, 100 Thai graduates from the BPP training camp were in Burma training Li Mi’s troops in jungle warfare.130 After a skirmish in 1953, the Burma army recovered the corpses of three white men, with no identification except for some documents with addresses in Washington and New York.131 Operation Paper was by now leading a life of its own, independent not just of Ambassador Stanton but even of the president.

A much-publicized evacuation of troops to Taiwan in 1953–1954 was a charade, despite five months of strenuous negotiations by William Donovan, by then Eisenhower’s ambassador in Thailand. Old men, boys, and hill tribesmen were airlifted by CAT from Thailand and replaced by fresh troops, new arms, and a new commander.132

The fiasco of Operation Paper led in 1952 to the final absorption of the OPC into the CIA. According to R. Harris Smith,

Bedell Smith . . . summoned the OPC’s Far East director, Richard Stilwell, and, in the words of an agency eyewitness, gave him such a “violent tongue lashing” that “the colonel went down the hall in tears.” . . . [T]he Burma debacle was the worst in a string of OPC affronts that confirmed his decision to abolish the office. In 1952 he merged the OPC with the CIA’s Office of Special Operations [to create a new Directorate of Plans].133

[sandi66]

What precipitated this decision was an event remembered inside the agency as the “Thailand flap.” Its precise nature remains unknown, but central to it was a drugs-related in-house murder. Allen Dulles’s biographer recounts that in 1952 Walter Bedell Smith “had to send top officials of both clandestine branches [the CIA’s OSO and OPC] out to untangle a mess of opium trading under the cover of efforts to topple the Chinese communists.”134 (I heard from a former CIA officer that an OSO officer investigating drug flows through Thailand was murdered by an OPC officer.135) Years later, at a secret Council on Foreign Affairs meeting in 1968 to review official intelligence operations, former CIA officer Richard Bissell referred back to the CIA–OPC flap as “a total disaster organizationally.”136
But what was an organizational disaster may be seen as having benefited the political objectives of the wealthy New York Republicans in OPC (including Wisner, Fitzgerald, Burnham, and others) who constituted an overworld enclave committed to rollback inside the Truman establishment committed to containment. (Recall that Wisner had surrounded himself in the OPC with men who, in the words of Wisner’s ex-wife, “had money enough of their own to be able to come down” to Washington.137) This enclave was already experimenting with attempts to launch the rollback policy that Eisenhower and John Foster Dulles would call for in the 1952 election campaign.138
Truman, understandably and rightly, mistrusted this enclave of overworld Wall Street Republicans that the CIA and OPC had injected into his administration. The four directors Truman appointed to oversee central intelligence—Sidney Souers, Hoyt Vandenberg, Roscoe Hillenkoetter, and Walter Bedell Smith—were all from the military and all (like Truman himself) from the central United States.139 This was in striking contrast to the six known deputy directors below them, whose background was that of New York City or (in one case) Boston, law and/or finance, and (in all cases but one) the Social Register.140
But Bedell Smith, Truman’s choice to control the CIA, inadvertently set the stage for overworld triumph in the agency when, in January 1951, he brought in Allen Dulles (Wall Street Republican, Social Register, and OSS) “to control Frank Wisner.”141 And with the Republican election victory of 1952, Bedell Smith’s intentions in abolishing the OPC were completely reversed. Desmond Fitzgerald of the OPC, who had been responsible for the controversial Operation Paper, became chief of the CIA’s Far East Division.142 American arms and supplies continued to reach Li Mi’s troops, no longer directly from OPC but now indirectly through either the BPP in Thailand or the KMT in Taiwan.
The CIA support for Phao began to wane in 1955–1956, especially after a staged BPP seizure of twenty tons of opium on the Thai border was exposed by a dramatic story in the Saturday Evening Post.144 But the role of the BPP in the drug trade changed little, as is indicated in a recent report from the Asian Human Rights Commission in Hong Kong. Meanwhile, for at least seven years, the BPP would “capture” KMT opium in staged raids, and turn it over to the Thai Opium Monopoly. The “reward” for doing so, one-eighth the retail value, financed the BPP.143
The police force that exists in Thailand today is for all intents and purposes the same one that was built by Pol. Gen. Phao Sriyanond in the 1950s. . . . It took on paramilitary functions through new special units, including the border police. It ran the drug trade, carried out abductions and killings with impunity, and was used as a political base for Phao and his associates. Successive attempts to reform the police, particularly from the 1970s onwards, have all met with failure despite almost universal acknowledgment that something must be done.145
The last sentence could equally be applied to America with respect to the CIA’s involvement in the global drug connection.

Peter Dale Scott, a former Canadian diplomat and English Professor at the University of California, Berkeley, is the author of Drugs Oil and War, The Road to 9/11, The War Conspiracy: JFK, 9/11, and the Deep Politics of War. His American War Machine: Deep Politics, the CIA Global Drug Connection and the Road to Afghanistan from which the present article is excerpted, has just been published.
Recommended citation: Peter Dale Scott, "Operation Paper: The United States and Drugs in Thailand and Burma," The Asia-Pacific Journal, 44-2-10, November 1, 2010.
Notes
1 William O. Walker III, “Drug Trafficking in Asia,” Journal of Interamerican Studies and World Affairs 34, no. 3 (1992): 204.
2 William Peers [OSS/CIA] and Dean Brellis, Behind the Burma Road (Boston: Little, Brown, 1963), 64.
3 Burton Hersh, The Old Boys: The American Elite and the Origins of the CIA (New York: Scribner’s, 1992), 300.
4 Peter Dale Scott, “Mae Salong,” in Mosaic Orpheus (Montreal: McGill-Queen’s University Press, 2009), 45.
5 Peter Dale Scott, “Wat Pa Nanachat,” in Mosaic Orpheus, 56.
6 Note Omitted.
7 I write about this practice in Drugs, Oil, and War: The United States in Afghanistan, Colombia, and Indochina (Lanham, MD: Rowman & Littlefield, 2003).
8 There are analogies also with the history of U.S. involvement in Iraq, though here the analogies are not so easily drawn. The most relevant point is that U.S. success in the defense of Kuwait during the 1990–1991 Gulf War once again produced internal pressures, dominated by the neoconservative clique and the Cheney–Rumsfeld–Project for the New American Century cabal, which ultimately pushed the United States into another rollback campaign, the current invasion of Iraq itself.
9 G. William Skinner, Chinese Society in Thailand: An Analytical History (Ithaca, NY: Cornell University Press, 1957), 166–67; Alfred W. McCoy, The Politics of Heroin: CIA Complicity in the Global Drug Trade (Chicago: Lawrence Hill Books/Chicago Review Press, 2003), 101; Bertil Lintner, Blood Brothers: The Criminal Underworld of Asia (New York: Palgrave Macmillan, 2002), 234.
10 Carl A. Trocki, “Drugs, Taxes, and Chinese Capitalism in Southeast Asia,” in Opium Regimes: China, Britain, and Japan, 1839–1952, ed. Timothy Brook and Bob Tadashi Wakabayashi (Berkeley: University of California Press, 2000), 99.
11 McCoy, The Politics of Heroin, 102; James C. Ingram, Economic Change in Thailand, 1850–1970 (Stanford, CA: Stanford University Press, 1971), 177.
12 Skinner, Chinese Society in Thailand, 166–67, 236–44, 264–65.
13 Cf. Robert Maule, “British Policy Discussions on the Opium Question in the Federated Shan States, 1937–1948,” Journal of Southeast Asian Studies 33 (June 2002): 203–24.
14 One often reads that the Northern Army invasion of the Shan states was in support of the Japanese invasion of Burma. In fact, the Japanese army (which may have had its own designs on Shan opium) refused for some months to allow the Thai army to move until the refusal was overruled for political reasons by officials in Tokyo. See E. Bruce Reynolds, Thailand and Japan’s Southern Advance: 1940–1945 (New York: St. Martin’s, 1994), 115–17.
15 McCoy, The Politics of Heroin, 105. Cf. E. Bruce Reynolds, “‘International Orphans’—The Chinese in Thailand during World War II,” Journal of Southeast Asian Studies 28 (September 1997): 365–88: “In an effort to distance himself from the Japanese, Premier Phibun initiated secret contacts with Nationalist China through the Thai army in the Shan States and developed a scheme to transfer the capital to the northern town of Petchabun with the idea of ultimately turning against the Japanese and linking up militarily with Nationalist China.” Under orders from Thai Premier Phibun, rapprochement of the Northern Army in Kengtung with the KMT began in January 1943 with a symbolic release of prisoners followed by a cease fire (“Thailand and the Second World War”).
16 E. Bruce Reynolds, Thailand’s Secret War: The Free Thai, OSS, and SOE during World War II (Cambridge: Cambridge University Press, 2005), 170–71.
17 McCoy, The Politics of Heroin, 162–63, citing Archimedes L. A. Patti, Why Vietnam (Berkeley: University of California Press, 1980), 216–17, 265, 354–55, 487. Lung Yun’s son, Lung Shing, denied to James Mills that his father was a smuggler: “My family’s been painted as the biggest drug runner. This is nonsense. The government in the old days put a tax on opium, which is true. It’s been doing that for the past hundred years. You can’t pin it on my family for that” (James Mills, The Underground Empire: Where Crime and Governments Embrace [New York: Dell, 1986], 737).
18 The directions given by Washington to the OSS mission were to establish contact with Phibun’s political enemy, Pridi Phanomyong. However, the mission’s leader, Khap Kunchon, was secretly a Phibun loyalist with a history of sensitive missions, and this complication helps to explain Khap’s motive and success in promoting the Thai–KMT talks (Nigel J. Brailey, Thailand and the Fall of Singapore: A Frustrated Asian Revolution [Boulder, CO: Westview Press, 1986], 100).
19 Judith A. Stowe, Siam Becomes Thailand: A Story of Intrigue (Honolulu: University of Hawai‘i Press, 1991), 282. The border itself, a product of Sino–British negotiations in the nineteenth century, was an artifact, dividing the historically connected principalities of the Thai Lü in Sipsongpanna (southern Yunnan) from those of the Thai Yai (Shans) in Burma (Stephen Sparkes and Signe Howell, The House in Southeast Asia: A Changing Social, Economic and Political Domain [London: RoutledgeCurzon, 2003], 134; Janet C. Sturgeon, Border Landscapes: The Politics of Akha Land Use in China and Thailand [Seattle: University of Washington Press, 2005], 82).
20 Stowe, Siam Becomes Thailand, 282–83. I have discovered no indication as to whether Nicol Smith, the American leader of the OSS mission, was aware of the implications of the talks for the future of the Shan opium trade.
21 Reynolds, Thailand’s Secret War, 171, 175–76.
22 Reynolds, Thailand’s Secret War, 171; Brailey, Thailand and the Fall of Singapore, 100; Maochun Yu, OSS in China: Prelude to Cold War (New Haven, CT: Yale University Press, 1996), 117; John B. Haseman, The Thai Resistance Movement (Chiang Mai: Silkworm Books, 2002), 62–63; Stowe, Siam Becomes Thailand, 282; Nicol Smith and Blake Clark, Into Siam: Underground Kingdom (Indianapolis: Bobbs-Merrill, 1946), 146. According to Smith, General Lu himself took responsibility for delivering a message from OSS promising amnesty to the Northern Army; according to Haseman, the letter “was delivered to front-line Thai positions, who passed it in turn to Sawaeng [Thappasut, a former student of Khap’s], MG Han [Songkhram], LTG Chira [Wichitsongkhram], and to Marshal Phibul.”
23 Miles, Donovan’s first OSS chief for China, became more and more closely allied with the controversial Tai Li in a semiautonomous network, SACO. In December 1943 Donovan, alerted to the situation, replaced Miles as OSS China chief with Colonel John Coughlin (Richard Harris Smith, OSS: The Secret History of America’s First Central Intelligence Agency [Berkeley: University of California Press, 1972], 246–58).
24 Reynolds, Thailand’s Secret War, 191–92, citing documents of September 1944, cf. 175; Stowe, Siam Becomes Thailand, 270.
25 Cf. Jonathan Marshall, “Opium, Tungsten, and the Search for National Secu- rity, 1940–52,” in Drug Control Policy: Essays in Historical and Comparative Perspective, ed. William O. Walker III (University Park: Pennsylvania State University Press, 1992), 96: “Americans . . . knew that [Tai Li’s] agents protected Tu’s huge opium convoys”; Douglas Valentine, The Strength of the Wolf: The Secret History of America’s War on Drugs (London: Verso, 2004), 47: “It was an open secret that Tai Li’s agents escorted opium caravans from Yunnan to Saigon and used Red Cross operations as a front for selling opium to the Japanese.”
26 After the final KMT defeat of 1949, the 93rd Division received other remnants from the KMT 8th and 26th Armies and a new commander, General Li Mi of the KMT Eighth Army (Bertil Lintner, Burma in Revolt: Opium and Insurgency since 1948 [Chiang Mai: Silkworm Books, 1999], 111–15).
27 McCoy, The Politics of Heroin, 106, 188–91, 415–20.
28 Thomas Lobe, United States National Security Policy and Aid to the Thailand Police (Denver: Graduate School of International Studies, University of Denver, 1977), 27.
29 Lintner, Burma in Revolt, 192.
30 Lintner, Blood Brothers, 241–44. After Sarit died in 1963, Chin was able to return to Thailand.
31 William Stevenson, The Revolutionary King: The True-Life Sequel to The King and I (London: Constable and Robinson, 2001), 4, 162, 195. The king personally translated Stevenson’s biography of Sir William Stephenson into Thai.
32 Anthony Cave Brown, The Last Hero: Wild Bill Donovan (New York: Times Books, 1982), 797; Stevenson, The Revolutionary King, 162. In 1970, Thompson’s biographer, William Warren, described the funding of Thompson’s company in some detail but made no reference to the WCC (William Warren, Jim Thompson: The Unsolved Mystery [Singapore: Archipelago Press, 1998], 66–67). Former CIA officer Richard Harris Smith wrote that Thompson was later “frequently reported to have CIA connections” (Smith, OSS, 313n). Joe Trento, without citing any sources, places Jim Thompson at the center of this chapter’s narrative: “Jim Thompson . . . (who in fact was a CIA officer) had recruited General Phao, head of the Thai police, to accept the KMT army’s drugs for distribution” (Joseph J. Trento, The Secret History of the CIA [New York: Random House/Forum, 2001], 346). Thompson disappeared mysteriously in Malaysia in 1967; his sister, who investigated the disappearance, was brutally murdered in America a few months later.
33 Valentine, The Strength of the Wolf, 155. Helliwell in Kunming used opium, which was in effect the local hard currency, to purchase intelligence (Wall Street Journal, April 18, 1980).
34 Sterling Seagrave, The Marcos Dynasty (New York: Harper and Row, 1988), 361.
35 John Loftus and Mark Aarons, The Secret War against the Jews (New York: St. Martin’s, 1994), 110–11.
36 The best evidence of this, the M-fund reported on by Chalmers Johnson, is discussed in the next chapter. Cf. Sterling and Peggy Seagrave, Gold Warriors: America’s Secret Recovery of Yamashita’s Gold (London: Verso, 2003), 3. The Seagraves link Helliwell to the movement of Japanese gold out of the Philippines, and they suggest, by hearsay but without evidence, that both Sea Supply Inc. and Civil Air Transport were thus funded (147–48, 152). Although many of their startling allegations are beyond my competence to assess or even believe, there are at least two that I have verified from my own research. I am persuaded that in the first postwar months when the United States was already supporting and using the SS war criminal Klaus Barbie, the operation was paid by SS funds. And I have seen secret documentary proof that a large sum of gold was indeed later deposited in a Swiss bank account in the name of a famous Southeast Asian leader, as claimed by the Seagraves.
37 Leonard Slater, The Pledge (New York: Pocket Books, 1971), 175. An attorney once made the statement that Burton Kanter (Helliwell’s partner in the money-laundering Castle Bank) “was introduced to Helliwell by General William J. Donovan. . . . Kanter denied that. ‘I personally never met Donovan. I believe I may have spoken to him once at Paul Helliwell’s request’” (Pete Brewton, The Mafia, CIA and George Bush [New York: S.P.I. Books, 1992], 296).
38 In the course of Operation Safehaven, the U.S. Third Army took an SS major “on several trips to Italy and Austria, and, as a result of these preliminary trips, over $500,000 in gold, as well as jewels, were recovered” (Anthony Cave Brown, The Secret War Report of the OSS [New York: Berkeley, 1976], 565–66).
39 Amy B. Zegart, Flawed by Design: The Evolution of the CIA, JCS, and NSC (Stanford, CA: Stanford University Press, 1999), 189, citing Christopher Andrew, For the President’s Eyes Only (New York: HarperCollins, 1995), 172; see also U.S. Congress, Senate, 94th Cong., 2nd sess., Select Committee to Study Governmental Operations with Respect to Intelligence Activities, Final Report, April 26, 1976, Senate Report No. 94-755, 28–29.
40 Stevenson, The Revolutionary King, 50. Douglas Valentine claims that in mid-1947, Donovan intervened in Bangkok politics to resolve a conflict between the police and the army over the opium traffic. In 1947, Donovan was a registered foreign agent for the civilian Thai government, representing them in negotiations over the post-war border with French Indochina. Valentine reports that in mid-1947, “Donovan traveled to Bangkok to unite the squabbling factions in a strategic alliance against the Communists” and that the KMT businessmen in Bangkok who managed the flow of narcotics from Thailand to Hong Kong and Macao “benefited greatly from Donovan’s intervention” (Valentine, The Strength of the Wolf, 70). He notes also that “by mid-1947 Kuomintang narcotics were reaching America through Mexico.” What actually happened in November 1947 in Thailand was the ousting of Pridi’s civilian government in a military coup. Soon afterward the first of Thailand’s postwar military dictators, Phibun, took office. Not long after Phibun’s accession, Thailand quietly abandoned the antiopium campaign announced in 1948, whereby all opium smoking would have ended by 1953 (Francis W. Belanger, Drugs, the U.S., and Khun Sa [Bangkok: Editions Duang Kamol, 1989], 75–90).
41 Stevenson, The Revolutionary King, 50–51.
42 William O. Walker III, Opium and Foreign Policy: The Anglo-American Search for Order in Asia, 1912–1954 (Chapel Hill: University of North Carolina Press, 1991), 184–85, citing letters from Bird, April 5, 1948, and Donovan, April 14, 1948 (Donovan Papers, box 73a, Military History Institute, U.S. Army, Carlisle Barracks, Pennsylvania).
43 Paul M. Handley, The King Never Smiles: A Biography of Thailand’s Bhumipol Adulyadej (New Haven, CT: Yale University Press, 2006), 105.
44 Walker, Opium and Foreign Policy, 185.
45 Foreign Relations of the United States, 1949–1951 (hereinafter FRUS) (Washington, DC: Government Printing Office), vol. 6, 40–41; memo of March 9, 1950, from Dean Acheson, secretary of state.
46 FRUS, 1952–1954, vol. 12, 651, memo of October 7, 1952, from Edwin M. Martin, special assistant to the secretary for mutual security affairs, to John H. Ohly, assistant director for program, Office of the Director of Mutual Security (emphasis added).
47 Shortly before his dismissal on April 11, 1951, MacArthur in Tokyo issued a statement calling for a “decision by the United Nations to depart from its tolerant effort to contain the war to the area of Korea, through an expansion of our military operations to its coastal areas and interior bases [to] doom Red China to risk the imminent military collapse” (Lintner, Blood Brothers, 237).
48 Bruce Cumings, The Origins of the Korean War, vol. 2 (Princeton, NJ: Princeton University Press, 1990). Donovan in this period became vice chairman of the Committee to Defend America by Aiding Anti-Communist China.
49 Martha Byrd, Chennault: Giving Wings to the Tiger (Tuscaloosa: University of Alabama Press, 1987), 325–28; William M. Leary, Perilous Missions: Civil Air Transport and CIA Covert Operations in Asia, 1946–1955 (Tuscaloosa: University of Alabama Press, 1984), 67–68; Scott, Drugs, Oil, and War, 2.
50 Jack Samson, Chennault, 62.
51 John Prados, Safe for Democracy: The Secret Wars of the CIA (Chicago: Ivan R. Dee, 2006), 125. Cf. Los Angeles Times, September 22, 2000: “Newly declassified U.S. intelligence files tell the remarkable story of the ultra-secret Insurance Intelligence Unit, a component of the Office of Strategic Services, a forerunner of the CIA, and its elite counterintelligence branch X-2. Though rarely numbering more than a half dozen agents, the unit gathered intelligence on the enemy’s insurance industry, Nazi insurance titans and suspected collaborators in the insurance business. . . . The men behind the insurance unit were OSS head William “Wild Bill” Donovan and California-born insurance magnate Cornelius V. Starr. Starr had started out selling insurance to Chinese in Shanghai in 1919. . . . Starr sent insurance agents into Asia and Europe even before the bombs stopped falling and built what eventually became AIG, which today has its world headquarters in the same downtown New York building where the tiny OSS unit toiled in the deepest secrecy.”
52 Peter Dale Scott, The War Conspiracy: JFK, 9/11, and the Deep Politics of War (Ipswich, MA: Mary Ferrell Foundation Press, 2008), 46–47, 263–64. William Youngman, Corcoran’s law partner and a key member of Chennault’s support team in Washington during and after the war, was by 1960 president of a C. V. Starr company in Saigon.
53 Smith, OSS, 267.
54 Smith, OSS, 267n.
55 It is possible that other backers of the Chennault Plan allied themselves, like Helliwell, with organized crime. In those early postwar years, one of the C. V. Starr companies, U.S. Life, was the recipient of dubious Teamster insurance contracts through the intervention of the mob-linked business agents Paul and Allan Dorfman (Scott, Drugs, Oil, and War, 197; Scott, The War Conspiracy, 279). One of the principal supporters of Chennault’s airline on the U.S. West Coast, Dr. Margaret Chung, was suspected of drug trafficking after her frequent trips to Mexico City with Virginia Hill, a courier for Meyer Lansky and Bugsy Siegel. See Ed Reid, The Mistress and the Mafia: The Virginia Hill Story (New York: Bantam, 1972), 42, 90; Peter Dale Scott, “Opium and Empire: McCoy on Heroin in Southeast Asia,” Bulletin of Concerned Asian Scholars, September 1973, 49–56.
56 Ronald Shelp with Al Ehrbar, Fallen Giant: The Amazing Story of Hank Greenberg and the History of AIG (Hoboken, NJ: Wiley, 2006), 60.
57 Encyclopaedia Britannica. The money splashed around in Washington by the “China Lobby” was attributed at the time chiefly to the wealthy linen and lace merchant Joseph Kohlberg, the so-called China Lobby man. But it has often been suspected that he was fronting for others.
58 Lintner, Burma in Revolt, 111–14. As early as 1950, Ting was also actively promoting the concept of an Anti-Communist League to support KMT resistance (134, 234). The KMT’s ensuing Asian Peoples’ Anti-Communist League (later known as the World Anti-Communist League) became intimately involved with support for the KMT troops in Burma. In 1971 the chief Laotian delegate to the World Anti-Communist League, Prince Sopsaisana, was detained with sixty kilos of top-grade heroin in his luggage (Scott, Drugs, Oil, and War, 163, 194–95).
59 MacArthur advised the State Department in 1949 that the United States should place “500 fighter planes in the hands of some ‘war horse’ similar to Chennault” and further support the KMT with U.S. volunteers (memo of conversation, September 5, 1949, FRUS, 1949, vol. 9, 544–46; Cumings, The Origins of the Korean War, 103; Byrd, Chennault, 344). Chennault in turn told Senator Knowland that Congress should ap- point MacArthur a supreme commander for the entire Far East.
60 Donovan suggested that Chennault become minister of defense in a reconstituted KMT government. At some point Chennault and Donovan met privately with Willoughby in Japan (Cumings, The Origins of the Korean War, 513).
61 Valentine, The Strength of the Wolf, 260; Cumings, The Origins of the Korean War, 133.
62 Cumings, The Origins of the Korean War, 119–21, 796; James Burnham, The Coming Defeat of Communism (New York: John Day, 1951), 256–66.
63 David McKean, Peddling Influence: Thomas “Tommy the Cork” Corcoran and the Birth of Modern Lobbying (Hanover, NH: Steerforth, 2004), 216.
64 Hersh, The Old Boys, 299.
65 McKean, Peddling Influence, 216; Christopher Robbins, Air America (New York: Putnam’s, 1979), 48–49, 56–57, 70; Byrd, Chennault, 333; Alan A. Block, Masters of Paradise: Organized Crime and the Internal Revenue Service in the Bahamas (New Brunswick, NJ: Transaction, 1991), 169.
66 Curtis Peebles, Twilight Warriors: Covert Air Operations against the USSR (Annapolis, MD: Naval Institute Press, 2005), 88–89.
67 William R. Corson, The Armies of Ignorance: The Rise of the American Intelligence Empire (New York: Dial Press/James Wade, 1977), 320–21.
68 Hersh, The Old Boys, 284. Cf. Samuel Halpern (a former CIA officer) in Ralph S. Weber, Spymasters: Ten CIA Officers in Their Own Words (Wilmington, DE: Scholarly Resources, 1999), 117: “Bedell suddenly said, ‘They’re under my command.’ . . . He did it, and he did it in the first seven days of his tenure as DCI [director of the CIA].”
69 Corson, The Armies of Ignorance, 319; Daniel Fineman, A Special Relationship: The United States and Military Government in Thailand, 1947–1958 (Honolulu: University of Hawai‘i Press, 1997), 137; Henry G. Gole, General William E. DePuy: Preparing the Army for Modern War (Lexington: University Press of Kentucky, 2008), 80: “CIA Director Walter Bedell Smith opposed the plan, but President Truman approved it, overruled the Director, and ordered the strictest secrecy about it.”
70 Victor S. Kaufman, “Trouble in the Golden Triangle: The United States, Taiwan and the 93rd Nationalist Division,” China Quarterly, no. 166 (June 2001): 441, citing Memorandum, Bradley to Secretary of Defense, April 10, 1950, and Annex to NSC 48/3, “United States Objectives, Policies, and Courses of Action in Asia,” May 2, 1951. President’s Secretary’s File, National Security File—Meetings, box 212, Harry S. Truman Library, Independence, Missouri. Cf. Sam Halpern, in Weber, Spymasters, 119: “The Pentagon came up with this bright plan, as I understand it; at least, I was told this by my [CIA/OSO] boss, Lloyd George, who was Chief of the Far East Division at the time.”
71 Kaufman, “Trouble in the Golden Triangle,” 442–43; Fineman, A Special Relationship, 141–42.
72 Kaufman, “Trouble in the Golden Triangle,” 443: “Whether . . . Secretary of State Dean Acheson . . . knew of Operation Paper is uncertain. Acheson was present at discussions regarding the use of covert operations against China. . . . Yet since mid-1950, the secretary of state had been working to remove the irregulars. Therefore, either Acheson knew of the operation and did not inform his subordinates, or he too did not have the entire picture.” In apparent contradiction, William Walker writes that “Acheson had participated from the start in the decision-making process relating to NSC 48/5, so he was familiar with the discussions about using covert operations against China’s southern flank” (Opium and Foreign Policy, 203). But NSC 48/5, primarily a policy paper on Korea, dates from May 17, 1951, half a year later.
73 Leary, Perilous Missions, 116–17.
74 Lintner, Blood Brothers, 237, citing MacArthur on March 21, 1951, in Robert H. Taylor, Foreign and Domestic Consequences of the Kuomintang Intervention in Burma (Ithaca, NY: Cornell University Southeast Asia Program, Data Paper no. 93, 1973), 42; Chennault on April 23, 1958, in U.S. Congress, House Committee on Un-American Activities, International Communism (Communist Encroachment in the Far East), “Consultations with Maj.-Gen. Claire Lee Chennault, United States Army,” 85th Cong., 2nd sess., 9–10.
75 Leary, Perilous Missions, 129–30. Leary states that U.S. personnel delivered the arms only as far as northern Thailand, with the last leg of delivery handled by the Thai Border Police. But there are numerous contemporary reports of U.S. personnel at Mong Hsat in Burma who helped unload the planes and reload them with opium (Scott, Drugs, Oil, and War, 60; Corson, The Armies of Ignorance, 320–22). Lintner reproduces a photograph of three American civilians who were killed in action with the KMT in Burma in 1953 (Lintner, Burma in Revolt, 168). On April 1, 1953, the Rangoon Nation reported a captured letter from Major General Li’s headquarters, discussing “European instructors for the training of students.”
76 McCoy, The Politics of Heroin, 169–71; Lintner, Blood Brothers, 238. Despite this military fiasco, the KMT troops contributed to the survival of noncommunist Chinese communities in Southeast Asia both by serving as a protective shield and by sustaining the traditional social fabric of drug-financed KMT Triads in Southeast Asia. See McCoy, The Politics of Heroin, 185–86; Scott, Drugs, Oil, and War, 60, 192–93.
77 Donald F. Cooper, Thailand: Dictatorship of Democracy? (Montreux: Minerva Press, 1995), 120.
78 E.g., McCoy, The Politics of Heroin, 165–69. Cf. Tim Weiner, Legacy of Ashes: The History of the CIA (New York: Doubleday, 2007), 60: “The final theater for the CIA in the Korean War lay in Burma. In early 1951, as the Chinese Communists chased General MacArthur’s troops south, the Pentagon thought the Chinese Nationalists could take some pressure off MacArthur by opening a second front. . . . The CIA began [sic] flying Chinese Nationalist soldiers into Thailand . . . and dropping them along with pallets of guns and ammunition into northern Burma.” Cf. Walker, Opium and Foreign Policy, 200: “Some aid was already reaching KMT forces in Burma . . . months before the January 1951 NSC meeting.”
79 Fineman, A Special Relationship, 289n25.
80 Fineman, A Special Relationship, 137.
81 U.S. Treasury Department, Bureau of Narcotics, Traffic in Opium and Other Dangerous Drugs (Washington, DC: Government Printing Office, 1949), 13; (1950), 3; (1954), 12. Through the same decade, the FBN, by direction of the U.S. State Department, acknowledged to UN Narcotics Conferences that Thailand was a source for opium and heroin reaching the United States (Scott, Drugs, Oil, and War, 191, 203, citing UN Documents E/CN.7/213, E/CN.7/283, 22, and E/CN.7//303/Rev.1, 34; cf. Walker, Opium and Foreign Policy, 201 [State Department]). When the FBN Traffic in Opium reports began to acknowledge Thai drug seizures again in 1962, the Kennedy administration had already initiated serious efforts to remove the bulk of the KMT troops from the region (Kaufman, “Trouble in the Golden Triangle,” 452).
82 Walker, Opium and Foreign Policy, 206, cf. 213–15. Cf. also Valentine, The Strength of the Wolf, 133, 150–52. Anslinger was not alone in blaming heroin flows on mainland China. He was joined in the attack by two others with CIA connections: Edward Hunter (a veteran of OSS China and OPC who in turn was fed information regularly by Chennault) and Richard L. G. Deverall of the American Federation of Labor’s Free Trade Union Committee (under the CIA’s labor asset Jay Lovestone).
83 Scott, Drugs, Oil, and War, 7, 60–61, 198, 207, citing Penny Lernoux, In Banks We Trust (Garden City, NY: Anchor/Doubleday, 1984), 42–44, 84.
84 Fineman, A Special Relationship, 215.
85 I explore this question in Scott, Drugs, Oil, and War, 60–64.
86 Gole, General William E. DePuy, 80.
87 Chennault himself was investigated for such smuggling activities, “but no official action was taken because he was politically untouchable” (Marshall, “Opium, Tungsten, and the Search for National Security, 1940–52,” 92); cf. Barbara Tuchman, Stilwell and the American Experience in China, 1911–1945, 7–78; Paul Frillmann and Graham Peck, China: The Remembered Life (Boston: Houghton Mifflin, 1968), 152.
88 Corson, The Armies of Ignorance, 322.
89 Valentine, The Strength of the Wolf, 71, quoting Reid, The Mistress and the Mafia, 42.
90 Marshall, “Opium, Tungsten, and the Search for National Security, 1940–52,” 98, citing OSS CID 126155, April 19, 1945.
91 Marshall, “Opium, Tungsten, and the Search for National Security, 1940–52.”
92 Andrew Forbes and David Henley, The Haw: Traders of the Golden Triangle (Bangkok: Teak House, 1997).
93 Cooper, Thailand, 116.
94 Wen-chin Chang, “Identification of Leadership among the KMT Yunnanese Chinese in Northern Thailand, Journal of Southeast Asian Studies 33 (2002): 125. Chang calls this name “a popular misnomer” on the grounds that the KMT villages have been expanding and “slowly casting off their former military legacy.”
95 Taylor, Foreign and Domestic Consequences of the Kuomintang Intervention in Burma, 10.
96 McCoy, The Politics of Heroin, 162–63.
97 Sucheng Chan, Hmong Means Free: Life in Laos and America (Philadelphia: Temple University Press, 1994), 1942; cf. John T. McAlister, Viet Nam: The Origins of Revolution (Garden City, NY: Doubleday, 1971), 228; Scott, The War Conspiracy, 267.
98 Timothy Brook and Bob Tadashi Wakabayashi, eds., Opium Regimes: China, Britain, and Japan, 1839–1952 (Berkeley: University of California Press, 2000), 261–79; Jonathan Marshall, “Opium and the Politics of Gangsterism in Nationalist China, 1927–1945,” Bulletin of Concerned Asian Scholars, July–September 1976, 19–48; Laura Tyson Li, Madame Chiang Kai-shek: China’s Eternal First Lady (New York: Atlantic Monthly Press, 2006), 107, citing Nelson T. Johnson to Stanley K. Hornbeck, May 31, 1934, box 23, Johnson Papers, Library of Congress.
99 In global surveys of the opium traffic, one regularly reads of the importance of Teochew (Chiu chau) triads in the postwar Thai drug milieu (e.g., Martin Booth, Dragon Syndicates: The Global Phenomenon of the Triads [New York: Carroll and Graf, 1999], 176–77; McCoy, The Politics of Heroin, 389, 396). Although triads are central to trafficking in Hong Kong, and today possibly inside China, I question whether the Teochew in Thailand, although they certainly are prominent in the drug trade there, are still as dominated by triads as they were before World War II. Cf. Skinner, Chinese Society in Thailand, 264–67.
100 Valentine, The Strength of the Wolf, 14, citing Melvin L. Hanks, NARC: The Adventures of a Federal Agent (New York: Hastings House, 1973), 37, 162–66; Brook and Wakabayashi, Opium Regimes, 263. For an overview of U.S. knowledge of KMT drug trafficking, see Marshall, “Opium and the Politics of Gangsterism in Nationalist China, 1927–1945.”
101 Valentine, The Strength of the Wolf, 72–73, citing Terry A. Talent report of November 15, 1946; Douglas Clark Kinder and William O. Walker III, “Stable Force in a Storm: Harry J. Anslinger and United States Narcotics Policy, 1930–1962,” Journal of American History, March 1986, 919.
102 Valentine, The Strength of the Wolf, 77.
103 Victor S. Kaufman, Confronting Communism: U.S. and British Policies toward China (Columbia: University of Missouri Press, 2001), 20–21.
104 Cumings, The Origins of the Korean War, 508–25; Robert Accinelli, Crisis and Commitment: United States Policy toward Taiwan, 1950–1955 (Chapel Hill: University of North Carolina Press, 1996), 271–72; Ross Y. Koen, The China Lobby in American Politics (New York: Harper and Row, 1974), 46, 48–51. Elsewhere I have described Commerce International China as a subsidiary of the WCC. Since then, I have learned that it was a firm founded in Shanghai in 1930. I now doubt the alleged WCC connection. Later, Fassoulis was indicted in a huge organized crime conspiracy to defraud banks in a stock swindle (New York Times, September 12, 1969; Peter Dale Scott, Deep Politics and the Death of JFK [Berkeley: University of California Press, 1998], 168–69, 178). By 2005, Fassoulis was worth $150 million as chairman and CEO of CIC International, the successor to Commerce International China; his company, now supplying the U.S. armed services, was predicted to do $870 million of business (“The 50 Wealthiest Greeks in America,” National Herald, March 29, 2008). There have been speculations that the “U.S. Central Intelligence Agency . . . may actually support CIC International, Ltd. so it remains in business as one of its many brokers for arms, technology components, logistics on transactions significant to intelligence operations” (Paul Collin, “Global Economic Brinkmanship”).
105 Scott, Drugs, Oil, and War, 188.
106 McCoy, The Politics of Heroin, 185.
107 Scott, Drugs, Oil, and War, 192–93. Anslinger’s protection of the KMT traffic had the additional consequence of strengthening and protecting pro-KMT tongs in America. In 1959, when a pro-KMT Hip Sing tong network distributing drugs was broken up in San Francisco, a leading FBN official with OSS–CIA connections, George White, blamed the drug shipment on communist China while allowing the ringleader to escape to Taiwan (Scott, Drugs, Oil, and War, 63; Valentine, The Strength of the Wolf, 195).
108 Walker, Opium and Foreign Policy, 214.
109 Joe Studwell, Asian Godfathers: Money and Power in Hong Kong and Southeast Asia (New York: Atlantic Monthly Press, 2007), 95–96.
110 J. W. Cushman, “The Khaw Group: Chinese Business in Early Twentieth- Century Penang,” Journal of Southeast Asian Studies 17 (1986): 58; cf. Trocki, “Drugs, Taxes, and Chinese Capitalism in Southeast Asia,” 99–100.
111 Marshall, “Opium, Tungsten, and the Search for National Security, 1940–52,” 106. The KMT obtained the tungsten from Karen rebels controlling a major mine at Mawchj in exchange for modern arms provided by the CIA.
112 Fineman, A Special Relationship, 133, 153. Bird at the time was a “private aviation contractor” (McCoy, The Politics of Heroin, 168), and aviation was the key to the BPP strategy of defending the Thai frontier because the Thai road system was still primitive in the border areas. Because Bird included in this committee his brother-in-law, Air Force Colonel Sitthi Savetsila, Sitthi became one of Phao’s closest aides-de-camp and his translator. In the 1980s he served for a decade as foreign minister in the last Thai military government.
113 I have not been able to establish the identity of this OPC officer. One possibility is Desmond Fitzgerald, who became the overseer and champion of Sea Supply, Operation Paper, the BPP, and (still to be discussed) PARU. Another possibility is Paul Helliwell.
114 Lobe, United States National Security Policy and Aid to the Thailand Police, 19–20.
115 Fineman, A Special Relationship, 137; McCoy, The Politics of Heroin, 165.
116 Fineman, A Special Relationship, 134, emphasis added.
117 McCoy, The Politics of Heroin, 168–69: Sherman Joost, the OPC officer who headed Sea Supply in Bangkok, “had led Kachin guerrillas in Burma during the war as a commander of OSS Detachment 101.”
118 Walker, Opium and Foreign Policy, 200, 205.
119 McCoy, The Politics of Heroin, 168.
120 Scott, Drugs, Oil, and War, 187–89, 201–2; Robbins, Air America, 48–49, 56–57, 70; Leary, Perilous Missions, 110–12.
121 Chen Han-Seng, “Monopoly and Civil War in China,” Institute of Pacific Relations, Far Eastern Survey 15, no. 20 (October 9, 1946): 308.
122 Scott, Drugs, Oil, and War, 187–89. CAT was not the only airline supplying Li Mi. There was also Trans-Asiatic Airlines, described as “a CIA outfit operating along the Burma-China border against the People’s Republic of China” and based in Manila (Roland G. Simbulan, “The CIA in Manila,” Nathan Hale Institute for Intelligence and Military Affairs, August 18, 2000). On April 10, 1948, an operating agreement was signed in Thailand between the new Thai government of Phibun and Trans-Asiatic Airlines (Siam) Limited (Far Eastern Economic Review 35 [1962]: 329). Note that this was two months before NSC 10/2 formally directed the CIA to conduct “covert” rather than merely “psychological” operations and five months before the creation of the OPC in September 1948.
123 Lintner, Burma in Revolt, 146.
124 FRUS, 1951, , vol. 6, pt. 2, 1634; Fineman, A Special Relationship, 150–51. The memo described Bird as “the character who handed over a lot of military equipment to the Police, without any authorization as far as I can determine, and whose status with CAS [local CIA] is ambiguous, to say the least.”
125 Fineman, A Special Relationship, 133, 153. Handley’s otherwise well-informed account wholly ignores Bird’s role in preparing for the coup (The King Never Smiles, 113–15).
126 Scott, Drugs, Oil, and War, 40, citing McCoy, The Politics of Heroin, 162, 286–87. McCoy’s estimate of the KMT’s impact on expanding production is ex- tremely conservative. According to Bertil Lintner, the foremost authority on the Shan states of Burma, “The annual production increased from a mere 30 tons at the time of independence [1945] to 600 tons in the mid-1950s” (Bertil Lintner, “Heroin and Highland Insurgency,” in War on Drugs: Studies in the Failure of U.S. Narcotics Policy, ed. Alfred W. McCoy and Alan A. Block [Boulder, CO: Westview Press, 1992], 288). Furthermore, the KMT exploitation of the Shan states led thousands of hill tribesmen to flee to northern Thailand, where opium production also increased.
127 Mills, Underground Empire, 789. Mills also quotes General Tuan as saying that the Thai Border Police “were totally corrupt and responsible for transportation of narcotics.” Mills comments, “This was of some interest, since the BPP, a CIA creation, was known to be controlled by SRF, the Bangkok CIA station” (Mills, Underground Empire, 780). For details on the CIA–BPP relationship in the 1980s, see Valentine’s account (from Drug Enforcement Administration sources), The Strength of the Pack, 254–55.
128 Scott, Drugs, Oil, and War, 62–63, 193.
129 Kaufman, “Trouble in the Golden Triangle,” 443.
130 Fineman, A Special Relationship, 141.
131 Rangoon Nation, March 30, 1953; Cooper, Thailand, 123; McCoy, The Politics of Heroin, 174; Lintner, Burma in Revolt, 139.
132 McCoy, The Politics of Heroin, 174–76; Leary, Perilous Missions, 195–96; Lintner, Blood Brothers, 238; Life, December 7, 1953, 61.
133 McCoy, The Politics of Heroin, 177–78.
134 Peter Grose, Gentleman Spy: The Life of Allen Dulles (Boston: Richard Todd/ Houghton Mifflin, 1994), 324.
135 According to McCoy (The Politics of Heroin, 178), a CAT pilot named Jack Killam “was murdered in 1951 after an opium deal went wrong and was buried in an unmarked grave by CIA [i.e., OPC] agent Sherman Joost”—the head of Sea Supply. Joseph Trento, citing CIA officer Robert Crowley, gives the almost certainly bowd-lerized version that two “drunk and violent” CAT pilots “shot it out in Bangkok” (Trento, The Secret History of the CIA, 347). According to William Corson, “Several theories have been advanced by those familiar with the Killam case to suggest that the trafficking in drugs in Southeast Asia was used by the CIA as a self-financing device to pay for services and persons whose hire would not have been approved in Washington . . . or that it amounted to the actions of ‘rogue’ intelligence agents” (Corson, The Armies of Ignorance, 323). One consequence of these intrigues was that, as we have seen, OPC was abolished. At this time OPC Far East Director Richard Stilwell was rebuked severely by CIA Director Bedell Smith and transferred to the military. In the Pentagon, “by the end of 1981, Stilwell was running one of the most secret operations of the government” in conjunction with ex-CIA officer Theodore Shackley, a protégé of Stilwell’s former OPC deputy, Desmond Fitzgerald (Joseph J. Trento, Prelude to Terror: The Rogue CIA and the Legacy of America’s Private Intelligence Network [New York: Carroll and Graf, 2005], 213). Stilwell was advising on the creation of the U.S. Joint Special Operations Command.
136 Marchetti and Marks, CIA and the Cult, 383.
137 Hersh, The Old Boys, 301, quoting Polly (Mrs. Clayton) Fritchey. Other men prominent in the cabal responsible for Operation Paper were also Republican activists. One was Paul Helliwell, who became very prominent in Florida Republican Party politics, thanks in part to funds he received from Thailand as the Thai consul general in Miami. Harry Anslinger was a staunch Republican and owed his appointment as the first director of the FBN to his marriage to a niece of the Republican Party magnate (and Treasury Secretary) Andrew Mellon (Valentine, The Strength of the Wolf, 16). Donovan, married to a New York heiress and an OPC consultant in the late Truman years, had a lifelong history of activism in New York Republican Party politics.
138 A perhaps unanswerable deep historical question is whether some of these men, and especially Helliwell, were aware that KMT profits from the revived drug traffic out of Burma were funding the China Lobby’s heavy attack on the Truman administration in general and on Dean Acheson and George C. Marshall in particular. (We shall see that in the later 1950s, Donovan and Helliwell received funds from Phao Sriyanon for the lobbying of Congress, supplanting those of the moribund China Lobby. Cf. Fineman, A Special Relationship, 214–15.) Citing John Loftus and others, Anthony Summers has written that Allen Dulles, before joining the CIA, had contributed to the young Richard Nixon’s first election campaign and possibly had also supplied him with the explosive information that made Nixon famous: that former State Department officer Alger Hiss had known the communist Whittaker Chambers (Anthony Summers with Robbyn Swann, The Arrogance of Power: The Secret World of Richard Nixon [New York: Viking, 2000], 62–63).
139 Sydney Souers (the first director, Central Intelligence Group, 1946) was born in Dayton, Ohio. Hoyt Vandenberg (director, Central Intelligence Group, 1946–1947) was born in Milwaukee, Wisconsin. Roscoe Hillenkoetter (the third and first director of the CIA, 1947–1949) was born in St. Louis. Walter Bedell Smith (the fourth director of the CIA, 1949–1953) was born in Indianapolis.
140 For the details, see Scott, The War Conspiracy, 261. The one from Boston, Robert Amory, was no less Social Register, and his brother, Cleveland Amory, wrote a best-seller, Who Killed Society, 1960).
141 Weiner, Legacy of Ashes, 52–53. It may be relevant that Bedell Smith himself was a right-wing Republican who reportedly once told Eisenhower that Nelson Rockefeller “was a Communist” (Smith, OSS, 367).
142 McCoy, The Politics of Heroin, 165–78; cf. Trento, The Secret History of the CIA, 71.
143 McCoy, The Politics of Heroin, 184.
144 Darrell Berrigan, “They Smuggle Drugs by the Ton,” Saturday Evening Post, May 5, 1956, 42.
145 “Thailand: Not Rogue Cops but a Rogue System,” a statement by the Asian Human Rights Commission, AHRC-STM-031-2008, January 31, 2008.

japanfocus.org/-Peter_Dale-Scott/3436

[sandi66]

Illuminati Cash 'Slush Fund'
Estimated At $65 Trillion
Illegal Federal Reserve At Heart Of Problem
As Minnesota Judge Allegedly Poisened In
1969 After Ruling Against Corrupt Banksters

By Greg Szymanski
3-23-6

The Illuminati's cash cow, grazing freely on the world wide pasture of greenbacks, isn't called "Elsie" but instead is called the Global Security Fund, a name actually meaning in the secret cult's language Global Terrorist Fund.

In simple terms, it's a gigantic illegal trust fund, estimated by undercover overseas financial investigators at 65 trillion dollars, set-up for "Illuminati rainy days" and established when it is desperately needed in a pinch for bribery, assassinations and sponsoring world wide terrorist activities.

Recently, Ashley Mote of the European Union (EU) asked this volatile question in a public EU meeting, a question never answered, as Mr. Mote merely by asking it was immediately scratched from the White House Christmas card list and placed on its top ten hit list:

"Mr President, I wish to draw your attention to the Global Security Fund, set up in the early 1990s under the auspices of Jacob Rothschild. This is a Brussels-based fund and it is no ordinary fund: it does not trade, it is not listed and it has a totally different purpose. It is being used for geopolitical engineering purposes, apparently under the guidance of the intelligence services.

"I have previously asked about the alleged involvement of the European Union's own intelligence resources in the management of slush funds in offshore accounts, and I still await a reply. To that question I now add another: what are the European Union''s connections to the Global Security Fund and what relationship does it have with European Union institutions?

Although the fund is cloaked in secrecy and made possible by the Western civilization's Federal Reserve banking system, investigators trying to pry into the Illumnati's secret treasure trove have uncovered some interesting facts.

Before looking at some of the startling information behind how the "Illuminati banksters" create money out of thin air, ask why the 1968 Minnesota Trial Court's decision holding the Federal Reserve Act unconstitutional and void and holding the National Banking Act unconstitutional and void was never appealed or vacated?

The answer is even the legal manipulators and corrupted high court judges can't get around this decision, figuring it better to just let the case of the First National Bank of Montgomery v. Jerome Daly die in the cold Minnesota snow along with Justice Martin V. Mahoney who was found suspiciously poisoned to death six months after he issued the ruling that exposed the illegality of what has been called the Queen of England's illegal banking scam.

This decision, which is still good law, has the effect of declaring all private mortgages on real and personal property, and all U.S. and State bonds held by the Federal Reserve, National and State Banks to void.

According to legal scholars and Bill Drexler, who worked on the case with Judge Mahoney, "This amounts to an emancipation of this nation from personal, national and State debt purportedly owed to this banking system. Every True American owes it to himself/herself, to his or her country, and to the people of the world for that matter, to study this decision very carefully and to understand it, for upon it hangs the question of freedom or slavery."

Saying this was the most important jury decision of modern times, Drexler who was present in the Minnesota courtroom the day the decision came down, added:

The banker testified about the mortgage loan given to Jerome Daly, but then Daly cross examined the banker about the creating of money "out of thin air," and the banker admitted that this was standard banking practice. When Justice Mahoney heard the banker testify that he could "create money out of thin air," Mahoney said, "It sounds like fraud to me." I looked at the faces of the jurors, and they were all agreeing with Mahoney by shaking their heads and by the looks on their faces.

"Both Jerome Daly and Justice Martin V. Mahoney are truly the greatest men that I have ever had the pleasure to meet. The Credit River Decision was and still is the most important legal decision ever decided by a Jury."

Daly, a small town mortgage holder who had taken on and defeated the Federal Reserve Banking System and money lenders, had this to say about the decision the Illumnati big shots kill for, as well as making any enterprising young lawyer think twice about tackling the Federal Reserve.

The following is Daly's own written statement about Judge Mahoney's 1968 ruling:

"The above Judgment was entered by the Court on December 9, 1968. The issue there was simple - Nothing in the law gave the Banks the right to create money on their books. The Bank filed a Notice of Appeal within 10 days. The Appeals statutes must be strictly followed, otherwise the District Court does not acquire Jurisdiction upon Appeal. To effect the Appeal the Bank had to deposit $2.00 with the Clerk within 10 days for payment to the Justice when he made his return to the District Court. The Bank deposited two $1.00 Federal Reserve Notes.

"The Justice refused the Notes and refused to allow the Appeal upon the grounds that the Notes were unlawful and void for any purpose. The Decision is addressed to the legality of these Notes and the Federal Reserve System. The Cases of Edwards v. Kearnzey and Craig vs Missouri set out in the decision should be studied very carefully as they bear on the inviolability of Contracts. This is the Crux of the whole issue. Jerome Daly.

"Justice Mahoney denied the use of Federal Reserve Notes, since they represent debt instruments, not true money, from being used to pay for the appeal process itself. In order to get this overturned, since the bank's appeal without the payment being recognized was out of time, it would have required that the Bank of Montgomery, Minnesota bring a Title 42, Section 1983 action against the judicial act of Justice Mahoney for a violation of the Constitution of the United States under color of law or authority, and if successful, have the case remanded back to him to either retry the case or allow the appeal to go through.

"But the corrupt individuals behind the bank(s) were unable to ever elicit such a decision from any federal court due to the fact that because of their vile hatred for him and what he had done to them and their little Queen's Scheme, had him murdered (same as them murdering him) just about 6 months later. And so, the case stands, just as it was.

"Amazingly, if they hadn't been so arrogant about the value of their federal reserve notes and paid the Justice just 2 measly silver dollars, or else 4 measly half dollars, or else 8 measly quarters, or else 20 measly dimes, or else 40 measly nickels, or else 200 measly pennies, they could have had their appeal and would not have had to get blood on their hands.

"As it is, they are now known for their bloody ways, and the day will come when the American people will reap vengeance upon them for such a heinous and villainous act. Amen."

Now almost 40 years later, the Illuminati banksters are still creating trillions out of thin air, keeping the American people and the western world in bondage and what amounts to financial slavery.

However, one man who may hold the key to exposing much of the illegal banking fraud and recently released from a 20 year jail term, is former Russian and CIA operative, Ambassador Leo Emil Wanta.

Although unavailable for comment at the time of publication but according to another European bank fraud investigator, Marco Saba, Wanta has been released "to active duty" and is holding 25 USD trillion in foreign bank accounts and money that needs to the U.S. Treasury Department.

"I am trying to help him to accomplish this operation," said Saba Wednesday from his home in Milan, Italy.

In a valiant attempt to get at the root of the Illuminati's global slush fund, author Christopher Story's work shines a brilliant light on the Illuminati's shady and dark financial underworld. However, when the mainstream press in England and America were alerted about Story's findings, management at a leading London newspaper had this to say about printing the financial expose:

"We won't touch this subject with a thousand-foot barge pole!"

But Saba who is investigating the shady financial trail for the Observatory of Organized Crime in Switzerland had this to say about his investigation as well as highlighting Story's findings:

"In 1992, the Illuminati orchestrated the raising of a targeted $27.5 trillion from at least 200 international institutions, in the biggest, secretive private placement financing operation in world history.

"The mainstream media unfortunately failed to report this operation so the general public is ignorant of it. The aim was to provide finance for the imposition of the New World Order, a.k.a., the New Underworld Order, for its use throughout the 21st century.

"The euphemism for this program is the "global security environment". The consequent monumental "Global Security Fund", which is managed in Brussels, and is directed on behalf of the global Illuminati controller's by financial intelligence operatives, now disposes of secret financial resources of approximately $65 trillion for this purpose, probably far more.

"Equipped with such limitless resources, the directors of the New Underworld Order have now amassed sufficient finance to bribe every leader, ruler, policymaker, intelligence operative and political figure worldwide, for the rest of this century, in pursuit of their aims. The New Underworld Order addresses the greatest crisis the world has ever faced namely, the globalization of criminalism. What this means is that governments, and the revolutionary New World Order cabal seeking global governance (or control), are increasingly in the hands of criminal gangs and corrupt power cliques that hide behind formal government positions.

"Many of the main Illuminati figures on the world stage today are compromised or vulnerable to blackmail and other "Black Ops" forms of control. During the giga-fund-raising operation, truly unbelievable sums of money were stolen, mis-routed or misappropriated. Indeed, the ransacking and pillaging that took place was so colossal, and the impasse while this was occurring so extended (in 1989-91), that the international banking and financial systems nearly collapsed. Other funding resources resulting from creative financial warfare and scamming operations are hidden in accounts held by offshore corporations controlled by international intelligence, which is extensively criminalized and thus increasingly engaged in mafia-style global gangland warfare .

"A brilliant light is focused by the Author into this contemporary universe of darkness. Christopher Story's sensational new exposé provides chapter and verse on the dark forces behind the New Underworld Order, gives detailed financial audit trails showing where and how colossal sums have vanished, identifies the international institutions that have had their trust abused by globalist criminals or have themselves been corrupted by them, shows how secret Financial Warfare operations and scams conducted by the great powers are driving the world to catastrophe, and generally lifts the veil covering the global financial intelligence war which the pressured mainstream media declines to monitor and report. So exposure of these matters is obviously overdue and the New Underworld Order performs this needed forensic function, revealing dark actors playing games."

For more informative articles and information on the federal reserve banking system, go to www.arcticbeacon.com


www.rense.com/general70/cash.htm



ty joye, wyatt, and nalmann

[sandi66]

U.S., India Eye Afghan Collaboration

November 1, 2010, 12:44 PM IST

When President Barack Obama visits India later this week, one elephant in the room will be Afghanistan and growing concern in New Delhi that the U.S. will not look out for India’s interests as it seeks a way out.

The U.S. is looking to reassure India with some cooperation in civilian aid programs.

New Delhi’s concerns are being stoked by the fact that Pakistan last month received $2 billion in U.S. military aid and U.S. Gen. David Petraeus, commander of coalition forces in Afghanistan, announced that NATO was providing logistical support for peace talks with the Taliban.

Pakistan is accused of harboring the insurgency’s leaders and would likely play an important role in any peace negotiations with the Afghan government much to the chagrin of India, which fears Pakistan could use the insurgency against it and is fearful of the return of a Taliban regime in Kabul.

“The Indians are more paranoid now than they have been in years,” said a U.S. official working in the region. “The combination of the recent military aid package the U.S. gave to Pakistan and reports of NATO transporting Taliban leaders from Quetta (Pakistan) to Kabul are adding to India’s fears.”

One possible way the U.S. is contemplating reassuring India that its participation in Afghanistan is welcome and crucial is through civilian collaboration.

The U.S. has approached the Indian government about cooperating on development projects in Afghanistan. In a spring trip to the Indian Embassy in Kabul, Timothy Roemer, the U.S. Ambassador to New Delhi, proposed the collaboration through the U.S. Agency for International Development, according to Indian and Afghan officials. A spokeswoman for the U.S. Embassy in New Delhi had no immediate comment.

A USAID official said they have “nothing new to announce at this time,” while an Indian official in Kabul described talks as “nascent.”

The U.S. expressed particular interest in India’s Self Employed Women’s Association, an organization that has provided embroidery and handiwork training to women in Afghanistan. USAID may collaborate with SEWA to bring accounting or computer literacy programs to Afghan women, the Indian official said.

It remains unclear whether the collaboration will be mentioned by Mr. Obama, who arrives in Mumbai at the end of this week but it may be one way in which he will publicly seek to convince India that the U.S. wants it to continue to be closely involved in shaping Afghanistan’s future.

Afghanistan, barack obama, NATO, Pakistan, Taliban, U.S. Ambassador to India Timothy Roemer, USAID

blogs.wsj.com/indiarealtime/2010/11/01/us-india-eye-afghan-collaboration/

[sandi66]

Federal Reserve to unveil economic stimulus
1 Nov 2010

This week at a Federal Reserve policy meeting, Ben Bernanke will take the US central bank into perilous monetary waters for only the second time since he became chairman in 2006.

He will back measures to buy Treasury bonds in a bold move to encourage consumer spending and to help the world’s biggest economy to grow at a faster pace.

Bernanke’s money-printing programme – a move that would flood the market with dollars – aims to bring down the high US unemployment rate, which stands at an eye-watering 9.6%, and to fend off a potential deflationary spiral.

Estimates for the size of the asset-purchase programme range from $1 trillion (£630 billion) at Bank of America-Merrill Lynch Global Research to $2 trillion at Goldman Sachs. However, the Wall Street Journal said the Fed is likely to unveil a series of Treasury bond purchases worth only a few hundred billion dollars over several months, as opposed to the $1.75 trillion of securities the bank bought under its first programme of quantitative easing.

The Fed’s monetary policy deliberations begin tomorrow and end on Wednesday. The danger is that once the bank kindles price increases through its asset-buying plan, inflation will be difficult to control.

A report from the Commerce Department on Friday that showed US gross domestic product expanded at a 2% annual rate reinforced financial market expectations the Fed will announce a second round of bond purchases this week.

The Fed’s much-anticipated round of quantitative easing will put downward pressure on the dollar and upward pressure on the prices of gold, oil and other commodities. It might even give the stock market a boost, if the easing is more substantial than analysts and others have assumed.

In a recent speech, William Dudley, president of the New York Fed and vice chairman of the Federal Open Market Committee, repeated that current levels of inflation and the unemployment rate are “unacceptable” and said the Fed needs to take action, even though expanding the balance sheet is not a “perfect tool”.

“To the extent that we can do things to improve the economic environment, we certainly owe it to the millions of people who are unemployed to do so,” Dudley said in response to audience questions after a speech in Ithaca, New York.

Economists Jan Hatzius at Goldman Sachs and Ethan Harris at Bank of America predict the Fed will spread an initial $500bn in asset purchases over six months. Dudley mentioned the same figure in his speech and said $500bn in purchases could have the same effect as cutting the benchmark federal funds rate by as much as a 0.75 percentage points. The fed funds rate stands at zero to 0.25%.

The meeting of the rate-setting Federal Open Market Committee could be lively, with some FOMC members openly opposed to Mr Bernanke’s Treasury-buying measures.

Regional bank presidents such as Charles Plosser of Philadelphia and Richard Fisher of Dallas, who are not members of the FOMC this year, have joined some of the panel’s voting members to express concern in public about a potential second round of asset purchases. Mr Plosser said on October 20 that high unemployment may not be “amenable to monetary-policy solutions” and added that he was “less inclined to want to follow a policy that is highly concentrated on raising inflation and raising inflation expectations”.

Mr Fisher said central bank officials must be mindful of the effect their actions are having on the dollar.

Dominique Strauss-Kahn, the head of the International Monetary Fund, has warned that the US soft-money policy has the potential to destabilise global finances. Some of America’s closest allies are worried about what they see as contradictory monetary policies.

At a recent meeting of G20 finance ministers in South Korea, Treasury Secretary Timothy Geithner warned leaders of major economies against manipulating and devaluing their currencies to gain trade advantages. Countries such as the United States that have large current account deficits should increase their savings, Geithner said, while countries with large surpluses should stimulate domestic demand.

Yet the Fed’s easing will do exactly what Geithner said a country like the United States should not do.

In Britain, meanwhile, the Bank of England’s Monetary Policy Committee, which also meets this week, will likely stay its hand on an expansion of its £200bn programme of gilt purchases – a programme similar to the Fed’s – because the Office for National Statistics said on October 26 that the economy grew 0.8% between July and September. This is down from a nine-year high of 1.2% in the second quarter but twice the 0.4% most economists had expected. The combination of above-trend growth and above-target inflation mean the Bank of England would struggle to justify an expansion of its “quantitative easing” to support the economy.

Speculation the central bank might pump more money into the economy gathered pace this month after one policymaker, Adam Posen, broke ranks to vote for additional easing. However, Andrew Sentance, the committee’s most hawkish member, lost no time in reiterating his belief that interest rates should now start to rise – albeit gradually.

City economists said the data was likely to make the Bank of England keep policy unchanged for longer.

“For the Bank of England, the GDP strength probably minimises, for the time being, the risk of others joining Adam Posen in voting for another round of QE,” said George Buckley at Deutsche Bank.



www.heraldscotland.com/business/markets-economy/federal-reserve-to-unveil-economic-stimulus-1.1065037

[sandi66]

US and The EU World's Two Largest Economies and Financial Systems

Published: October 31, 2010

U.S. Treasury Secretary Tim Geithner and European Commissioner Michel Barnier met today and reaffirmed their strong determination to continue cooperating closely in strengthening the global financial system and in promoting and putting in place the G-20 financial reform agenda.

They reiterated the fact that the United States and the European Union, as the world's two largest economies and financial systems, have a special responsibility to promote and implement stronger global financial standards, reduce further the scope for regulatory arbitrage and work toward greater regulatory convergence and consistency.

They reviewed the progress in implementing the G-20 financial regulatory commitments. In particular, they noted the significant achievements reached on both sides of the Atlantic - in the United States with the enactment of a vast set of financial reforms in the Dodd-Frank Act and in Europe with the approval of several legislative measures and an extensive on-going legislative agenda. They look forward to a productive trans-Atlantic dialogue among their new supervisory structures.

They welcomed the agreement reached in the Basel Committee on Banking Supervision on September 12, 2010 on stronger capital and liquidity requirements. They reaffirmed their intention to implement the agreement in the respective jurisdictions in accordance with the internationally-agreed timing. Both sides agreed to a December 2011 implementation date for the Basel trading book rules.

They agreed on the importance of robust crisis management mechanisms and to implement strong resolution regimes, as endorsed by G-20 Leaders in Toronto, which require additional resolution powers and expanded institutional capacity. They reiterated that no firm is too big or too complicated to fail and that taxpayers should not bear the costs of resolutions. They agreed that systemically important global financial institutions must improve their capacity to absorb losses and be subject to enhanced supervision and regular stress tests.

They reaffirmed their commitment to continue their strong and close bilateral co-operation on regulatory reform in the OTC derivatives markets. This co-operation has allowed for the proposed new rules regarding the clearing of over-the-counter derivatives and the development and supervision of derivatives infrastructure to be consistent and implemented in an open, convergent, and non-discriminatory manner. They confirmed their commitment to achieve convergence during the implementation and the finalisation of all the OTC derivatives reforms on both sides of the Atlantic. They reaffirmed their support for the G-20 Leaders' commitments on accounting convergence.

Finally, while welcoming the important step made by the European Member States and the European Parliament in negotiations on the Alternative Investment Fund Management Directive, they reaffirmed their on-going commitment to the principle of non-discrimination in current discussions as well as in the future development and implementation of rules for fund managers and funds, in recognition of the importance of maintaining a global level playing field.

newsblaze.com/story/20101031082632govt.nb/topstory.html

[sandi66]

Acting outside the Constitution

Posted: Monday, November 1, 2010 2:00 am

It’s been nearly two years since TARP was created in the dark smoky halls of Washington, and Sen. Kent Conrad is now giving us his justification of why it was necessary and how it has been a success.

What Sen. Conrad fails to acknowledge is that in his oath to uphold the Constitution of the United States, he accepted that Congress has “the power of the purse.”

He admits that (Treasury Secretary Timothy) Geithner and (former secretary Henry) Paulson said they were not seeking approval for TARP, but they were doing it, anyway.

The Constitution states that Congress has the authority to assume debt on behalf of the United States. The dynamic duo of Paulson and Geithner fired up the printing press and put us further into debt.

However, we have come to see that much of what the U.S. Congress does is outside of the U.S. Constitution, just as the North Dakota Legislature lends money and gives incentives to business (ethanol plants, commodity groups, manufacturers), and this, too, is outside of the North Dakota Constitution.

www.bismarcktribune.com/news/opinion/mailbag/article_af14d086-e3e3-11df-ac08-001cc4c03286.html

[sandi66]

Problem Banks Increasing in Number: This May Continue for Quite a While

November 01, 2010

Calculated Risk maintains an unofficial problem bank list compiled from publicly available records. The list has now reached 894. The FDIC has an offical list of troubled banks and the number of troubled banks was last released August 31 when the total was 829. The FDIC does not make the names of troubled banks on their list public.

CNN Money has the following graph showing how the number of troubled banks on the FDIC list has grown during the financial crisis.



The relationship between the FDIC number and the Calculated Risk list can be seen in the following graph (click to enlarge).



The clear implication is that when the next number (as of Q3 2010) of troubled banks is announced by the FDIC at the end of November it is likely to be between 850 and 900.

The number of banks that have failed under FDIC receivership in this crisis is thus far 307. See the following graphic from Calculatorplus.com:



Of course, the FDIC asset total is far less than the total dollar cost of this financial crisis, as was documented last year here and here.

Quoting from last year:

The relationship of the current banking crisis to the size of the economy is more than seven times greater than the worst year of the Great Depression (1933). This crisis is 19 times larger with respect to GDP than the next worst year, 1989, in the S&L crisis.

Now we have to see how the aftershocks and the financial system structure weakened by the "big one" interact in the coming years. I did not say months; it will take years to repair the effects of an event of this seismic magnitude.

These are astounding relationships. We have been and still are in unchartered territory. The Great Depression may not be repeated, but, in some ways, we have exceeded it to the downside. The ability of the U.S.and the world economy to withstand such a shock amazes me.

The above was written in the first year of the crisis, hence the reference to the size of the crisis compared to the worst years of previous crises.

The stress on the banks is now being compounded by questions of just how much of the securitized debt they created and underwrote may be forced back on their books at par when it is found to have been misrepresented and improperly documented as to title. The current value of much of this debt is far below par. The exposure of the banks in this regard is pretty much a hooded and unquantified monster this Halloween.

In the words of Robert Frost, we still have "miles to go before we sleep". If we add the 894 from the Calculated Risk problem bank list to the 307 already collapsed into the FDIC receivership, the total is 1,201 banks. This may be half way to the end or it may not be there yet. Chris Whalen estimated in 2009 that more than 1,800 banks would fail in the current crisis. The Congressional Oversight Panel chaired by Elizabeth Warren estimated in February 2010 that commercial real estate loans would be problematic eventually for solvency of nearly 3,000 banks.

The bank failure parade may not peak until some time in 2011. If it doesn't peak until 2012, then the Whalen estimate will certainly be too low and the Warren panel estimate may come into play.

seekingalpha.com/article/233686-problem-banks-increasing-in-number-this-may-continue-for-quite-a-while