When you get to footnote 199,you will want to start taking notice,as this is where I started running into trouble from my host in adding pictures and graphs to the body of content.First take a closer look at that Bank of New York employee who would have been in position to explain the bank's activity in the following week after the attacks.The odds on him dying were long to begin with, as the bank lost only 3 of over 8000 employees in the attack.But this is the weird part with this gentleman.As I read the file I assumed that Michael Diaz-Piedra died in the Towers.However if you search images of Michael Diaz-Piedra III,in hospital on september 17th 2001,up will pop a picture of a smiling Piedra.I will not speculate what happened in the next dozen days leading up to his passing on the 30th of that month,but given his job, and what he could offer to investigators,it strikes me as odd.The graphs that the author uses in his argument,were found but like the images associated with Piedra,my host at this blog,kept throwing them back at me with error messages,so you will have to go to the PDF link to view them.If you read closely after note 199, you will see that the below prime scam had it's origin in the Federal Reserves shenanigans in the week following the attacks. More to come on this if I can locate Durham's old files,take care all...
The Oligarchs and the West
In the late 1980s, under Gorbachev, Generals Bobkov and Kondaurov sponsored several bright young “Russian’ entrepreneurs, and arranged for them to work with a group of consultants out of Switzerland know as Riggs-Valmet.170 This was the very same Riggs operation set up by George Bush in 1988 under the watchful eye of his brother and former National Security Council director. The names of these first generation oligarchs were
• Mikhail Khordokovsky
• Alexander Konanykhine
• Boris Berezovsky (Berezovskii)
• Roman Abramovich
Alexander Konanykhine would be responsible for up to half of the campaign financing for an unknown Russian Congressman from the remote regions of Russia known as Boris Yeltsin. Yeltsin would win the election and become President of Russia. Under KGB protection, Konanykhine opened a series of banks used for moving Russian money out of Russia, most notably the Russian Exchange Bank, the European Union Bank and his partnership with Mikhail Khordokovsky in the Bank Menatep. The European Union Bank was actually a money laundering operation in Antigua run as an internet bank. The computers used to operate the bank were traced to Val Kulkov, an associate of Konanykhine, at Suite 347, 1429 Pennsylvania Avenue in Washington DC. The internet address for the bank belonged to a block of Internet addresses owned by a company called Aegis.
Thayer Equity Investors, of 1445 Pennsylvania Avenue, which controlled Aegis at the time, is located on the third floor of the same building. Thayer Equity’s address was also used at one time by the Hohlt Group, which now resides at 1433 Pennsylvania Avenue, virtually right down the hallway. Interest is taken in these groups, because the men who control them are major financial power brokers of the U.S. Republican Party: Frederick Malek[L] (Thayer Equity ) and Richard Hohlt[R] (the Hohlt Group). Hohlt is a reported associate of Richard Armitage.
Oligarch Mikhail Khordokovsky would be responsible for setting up the primary financial organization for taking over Russian oil and gas industries, as well as moving money out of the country: Bank Menatep. Over time, Riggs would reduce its control of Bank Menatep from 51% to a public 4%, although total ownership of the institution remains cloaked by offshore privacy allowances. Khordokovsky’s dealings would also involve a takeover of the gas industry: Gazprom, and with it AEB, which had been originally controlled by Palmer and Lauder.
Oligarch Roman Abramovich worked with Valmet-Riggs to buy into the Siberian oil giant Sibneft.171 Abramovich started with an energy trading company called Runicom which was owned totally by Valmet-Riggs. The true beneficial owners of Runicom were never disclosed. 172 Abramovich ran his operations out of the offices of one of the Swiss subsidiaries of Bruce Rappaport, the former BCCI and Iran-Contra banker. Their start-up business was trading oil and gas. As part of his trades, he would soon engage and partner with Oligarch Boris Berezovsky.
Oligarch Boris Berezovsky reportedly received his start as a used car dealer, with strong Mafia connections. He too would be reported to have received guidance from Riggs-Valmet, and would become partners with Roman Abramovich. His role appears to have been providing the ‘muscle’ behind various financial takeovers where there was a reluctance to sell.
The four of them would control the Russian oil and gas industry, and be front men for the hidden beneficiaries set up under the guidance of the consultants of Riggs-Valmet. This report speculates that the hidden beneficiaries, if ever found, would ultimately expose the illegal beneficiaries of the Black Eagle Trust, Project Hammer etc., and would be one and the same as the beneficiaries of the $240 billion security clearance in the aftermath of September 11th.
South of Russia, in Kazakhstan, President Nursultan Nazarbayev was working initially with James Giffen to open the oil flow to western economies. Shortly after Giffen established a foothold, Nazarbayev was working with Shaul Eisenberg, Marc Rich, Dick Cheney and George Soros. The FBI investigation into James Giffen’s activities that might have violated the U.S. Corrupt Practices act had its records stored on the 23rd Floor office of the FBI in the World Trade Center. The scope of the Giffen trial was limited by the court to activities from 1994 and forward, against the protests of Giffen’s lawyers. The lawyers contended they needed the scope of Giffen’s activities opened as far back as 1991, so that Giffen could show he was working under White House directives. Pulitzer prize winner Seymour Hersh reported that there were thousands of illegal oil swaps made during the early years under President Nazarbayev’s – but none of these ever came to light during the Giffen trial. 173
The Great Ruble Scam
With an understanding of the economic war being waged on the Soviet Union, the focus needs to turn to reports that on September 11, 1991, President George Bush was responsible for issuing $240 billion dollars in secretive bonds as a part of this attack.
There are six lines of evidence from eight sources that suggest this was indeed the case. Many of these instances are corroborated with documents available on the internet, presented by those making the claims.174
1. There has been a body of investigative reporting that suggests that between 1991 and 1992, the ruble was under a massive attack, with an unknown source of funding. The capital flight from the Soviet Union in U.S. dollars was estimated by Fidel Castro at $500 billion, and by Gorbachev at one trillion dollars. Somebody had to put up the lion’s share of funding for those dollars. The most authoritative source on the subject, Claire Sterling, writes that unknown intelligence operations were behind the attack.
“The fact that scarcely anyone outside Russia has heard of the Great Ruble Scam may be explained partly by its seemingly unbelievable details, but partly, too, by Western reluctance to touch exquisitely sensitive political nerves. Western governments rejoicing in the collapse of the evil empire wanted to assume, and to all appearances did assume, that all the evils in an emerging democracy emanated from politicians identified with the fallen communist state. Not one was prepared to acknowledge indelicate evidence to the contrary. The ability of three or four characters to mount such a planet wide operation, their extraordinary impact on what was still a world superpower, and their singular immunity from beginning to end suggest the guiding hand of not just one, but several intelligence agencies.”175
Documentation supporting the contention that there was ‘cash’ in this order of magnitude floating around Russia in 1991 and 1992 is also found in Stephen Handelman’s book Comrade Criminal. Handelman, who appears to have had access to KGB files brought back to the U.S. after the collapse of the Soviet Union, notes that prior to 1991, the Russian Communist Party had a reserve of 435 billion rubles of ‘freely convertible hard currency,” and that in the summer after the coup, there were unnamed individuals in Russia who could provide up to 300 billion rubles on a months notice.176 In the former instance 435 billion rubles in July of 1991 converts into $240 billion. This fund was converted and moved out of the Soviet Union, and the ruble scam would have needed to provide hard dollars in that order of magnitude. A year later, Handelman’s second examples suggests criminal individuals had at their disposal $3 to $4.5 billion on short notice.177 By comparison, at the same time, the U.S. Congress could not pass a $10 billion appropriation bill due to mandatory budget ceiling constraints.
2. Andrei Kozlov, First Deputy Head of Russia’s Central Bank, was heading an investigation into the loss and reported the theft at 400 billion rubles from the Central Bank in 1991. (Not to be confused with a similar scam run out of Chechnya in 1992 on a much smaller order of magnitude.) These rubles were stolen by someone putting hard currency securities in remote Chechen banks as collateral for Russian loans and then making the collateral notes disappear from the remote banks at the same time the funds were being withdrawn.178 While the black-market value of a ruble was about $1, the ‘official’ conversion rate at the time was 1.8 rubles/dollar. Using the official US dollar equivalent for 400 billion rubles, the theft converted to $222 billion. Kozlov was gunned down shortly after announcing he was close to understanding where the 400 billion rubles went. The head of the Central Bank at that time – former KGB official Georgy Matyuhin – who authorized these credits, on behalf of Yeltsin and at the request of Yeltsin’s First Deputy, Khasbulatov was retired after he was reported to be a CIA asset. 179
3. Mrs. V.K. Durham, wife of Russell Herman, who was a fund controller for the CIA’s covert fund, has contended in sworn testimony that George H.W. Bush, Oliver North and Alan Greenspan forced her husband into relinquishing the funding for the bonds on that date. They later forged Hermann’s signature on related financial transactions.180 She also claims they were responsible for his death three years later because Hermann believed these funds were the property of the U.S. citizens rather than the private slush fund of the Bush circle, and protested the manner in which they were being used. Wanta has since maintained a similar stance, that the earnings from his covert operations should be public funds rather than a covert slush funds used by U.S. presidents. 181
4. Several sources from the Office of Naval Investigation (ONI) have released over 100 pages of bank transactions detailing transactions in the range of 100s of billions of dollars. These are the same files released also by Derek Vreeland from a Canadian prison, from which he warned his guards about the forthcoming attack on the World Trade Center. Vreeland contended he was an ONI operative.182 The files cover three periods of transactions which correspond to this covert war on the Soviet Union; While the transactions do not directly show securities going to the Soviet Union, they do support the theory that the Bush Vulcans were spending massive amounts of cash in a manner inconsistent with US Federal budget spending caps in effect at the time, and moving massive funding into covert accounts at key trust funds – most notably Pilgrim Investments, to the account of “Jorge” Bush. (Jorge is Spanish for George.)
• the first series of transactions in August to October 1989 coincides with the Mexican and Latin American debt resettlement. During this period it has been contended that Bush was responsible for generating 300 hundred billion dollars in illegal earnings by making other countries debt collateral disappear for a few months, while whoever was holding this collateral profited from August 11 to October 6 on what is known as a period of a rare the “inverted yield curve.”
• the second series of transactions from September 24 to October 10, 1990 period would most likely represent funding for the purchase of the Soviet gold treasury, and the movement of Communist Party funds out of the Soviet Union. Leo Wanta reports having started his efforts at this time.
• the third series of transactions from May 27-28th 1991 would most likely represent funding for his Ruble destabilization program
5. Documents released from Leo Wanta’s files for these bonds provide great detail about the Soviet deals:
• These bonds were used to fund an undesignated “joint venture” with Russia 183 Coincidentally, On 14 September 1991, Vladimir Shcherbakov, the last First Deputy Prime Minister of the Soviet Union, formed the International Foundation for Privatization and Private Investment [FPI] with two other partners. The second partner has never been revealed. The third partner was the now notorious Austrian firm, Nordex GmbH. The International Foundation for Privatization and Private Investment [FPI]. would be one of the major organizations involved in the Bank of New York money laundering scandal and a major crime front. Interpol would be reported as making Marc Rich one of the founders of Nordex. Marc Rich would be pardoned by President William Clinton, presumably for his services to the US in arranging for the collapse of the Soviet Union, although the reasons for his pardon have never been made public.
• These bonds were backed by Swiss gold held in vault in the free trade zone in Kloten, Switzerland 184. The Kloten repository resides at the Zurich airport, which the Marcos gold hoard as well as the stolen Soviet treasury gold was reported as being stored at. "… tons of the loot was liberated by Ferdinand Marcos before his ouster. Billions of dollars worth were shipped overseas by American intelligence agents and the Mafia. Much of the horde was cabbaged away in a high-security, subterranean storage cache buried beneath the Zurich airport.185
• The bonds were made conditional to loan acceptance by government officials in the USSR 186
• These bonds provided, in part, of payments of currency from Lehman of at least $100 million per day for an indefinite period of time 187
• These bonds provided, cash funneled to Russia through the Deutschebank 188
6. Depositions on Project Hammer seems inextricably linked to the same banks and funds as the information being documented by Vreeland, ONI and Wanta:
• General Earl Cock’s deathbed deposition in April 2000 describes Citibank’s and John Reed’s central involvement in Project Hammer in the last quarter of 1991 as being funded with $223 billion dollars, of mostly CIA moneys. Cocke also references the use of baby bonds to collateralize these funds, which are 10 year bonds. Cocke describes the source of these funds as “accounts, participants or players” with the accounts converting to bank ownership upon the death of the controlling party, and then to the government. This matches exactly what Sterling and Peggy Seagrave claim happens to the gold accounts opened by agents of the US;189 [Those 10 year bonds are the key,and they have old man Bush and September 11th,1991 as their origin D.C]
• Roelfo Van Rooyen’s deposition in 1995 describes Project Hammer as a 1991 CIA operation.190
Information and documents released from 9 independent sources all merge into the same story
1. Leo Wanta – imprisoned on trumped up tax charges to keep him quiet.
2. U.S. Office of Naval Intelligence – destroyed on September 11 to keep them quiet.
3. Derek Vreeland– imprisoned to keep him quiet, now in hiding.
4. Major Colonel Erle Cocke – deathbed confession of co-conspirator.
5. Andrei Kozlov– Russian Central Bank director, gunned down to keep him quiet.
6. Claire Sterling – international correspondent co-opted and hired by CIA to keep her quiet. Deceased.
7. V.K. Durham – ignored, but not silenced.
8. Sterling and Peggy Seagrave – authors and historians, received multiple death threats to prevent publication. of their book on the Marcos Gold– now in hiding;
9. David Guyatt, independent reporter and published author.
The September 11th Cover-up of the
Black Eagle Trust and Project Hammer
With the bonds out in the market, they sat for ten years, like a ticking time bomb. At some point, they had to be settled -or cashed in, on September 11, 2001. The two firms in the U.S. most likely to be handling them would be Cantor Fitzgerald and Eurobrokers – the two largest government securities firms in the U.S. The federal agency mostly involved in investigating those transactions was the Office of Naval Intelligence.
On that day, those same three organizations: the two largest government securities brokers and the Office of Naval Intelligence in the US took near direct hits. Actually, the jetliners hit immediately below the targeted offices, assuring that the flames would engulf the floors above. This targeting strategy was also used on the 23rd floor of the North tower, which was an FBI evidence repository holding information on allegedly illegal gold transactions.
The attacks had a related agenda. It seems that the covert Cold War operation started in 1989 had resulted in a series of foreign and U.S. allegations of financial impropriety, and as a result there were at least nine federal investigations being conducted into bank accounts related to these operations. All of these investigations were initiated, in 1997-98 timeframe, which was the same year that Osama Bin Laden - after twenty years of recruiting Mujahadeen for the U.S. covert wars - announced a fatwa against the US. (A key understanding here is that federal investigations are preceded by a period of ‘quiet’ investigation before an official investigation is publicly announced.)
1) The Marcos Gold Hearing began in Los Angeles, in August 1997. The banks and accounts involved in that hearing, were the Swiss banks: UBS, and Bank Julius Baer.
2) The Eizenstatz Report and a public campaign waged by the Simon Wiesenthal Center launched suits against three Swiss banks.
3) The Reginald Howe suit- in which the U.S. bullion banks were accused of dumping U.S. Treasury gold on the market illegally. The Reginald Howe & GATA Lawsuit was filed on Jan 8, 2000 naming Deutschebank (a.k.a. Deutschebank Alex Brown), U.S. Treasury, Alan Greenspan, Federal Reserve, Citibank, Chase, as defendants. Also mentioned as having non-public knowledge of the scheme are Gerald Corrigan and Barrick Gold. (The 2000 filing suggests investigations began long before.)
4) The Bank of New York money laundering scandal: the Department of Justice was under pressure to investigate accounts of multiple individuals who benefited from these transactions: Loutchansky, Marc Rich and Berezovsky (Berezovskii.) The FBI investigation started in the Fall of 1998, The investor lawsuit was opened in September 1999. These investigations involved accounts at Credit Suisse, Union Bank of Switzerland (UBS), Dresdner Bank, Westdeutsche Landesbank and Banque Internacionale of Luxembourg All of these individual would at some point be mentioned as playing a role in the money laundering scandal at the Bank of New York, that would ultimately be reopened in 2002, after being buried for three years by federal prosecutor Mary Jo White, a first cousin to former President George Bush.
5) The Avisma lawsuit was filed Aug 19, 1999 naming as defendants Bank Menatep, Harvard Institute for International Development, and the Bank of New York;
6) The federal investigation of Konanykhine’s European Union Bank: The Konanykhine investigation was begun by the INS in February 1999. Other banks included in that investigation would have been the European Union Bank and Bank Menatep.
7) Richard Giffen/Mobil Oil scandal- The FBI Probe began in 1999, and would have involved accounts at Credit Suisse, Bank of New York, Cayman Islands, and the Deutsche Bank (a.k.a. Deutschebank Alex Brown).,
8) Yeltsin’s UBS accounts were being investigated for bribery.
9) Kevin Ingram would testify that he had advised Bob Graham in advance that the World Trade Center was to be attacked. This Deutsche Bank executive was convicted of laundering money for weapons purchases for Muslim terrorists through Pakistani agents; The Ingram investigation was begun by the FBI as early as July 1999, and involved the Deutschebank (a.k.a. Deutschebank Alex Brown).
The records for some of these investigations resided in Building Six, Building Seven and on the 23rd Floor FBI office in the North Tower. The account structure set up by the U.S. intelligence operations was besieged by investigations from nine different directions, any one of which may have exposed the source of that funding, and traced it to its Black Eagle Fund origins. Those investigations needed to be diverted.
What happened inside the buildings of the World Trade on September 11 is difficult, but not impossible to discern. The government has put a seal on the testimony gathered by the investigating 911 Commission, and instructed government employees to not speak on the matter or suffer severe penalties, but there are a number of personal testimonies posted on the internet as to what happened in those buildings that day. Careful reconstruction from those testimonies indicates the deliberate destruction of evidence not only by a targeted assault on the buildings, but also by targeted fires and explosions. In the event that either the hijacking failed, or the buildings were not brought down, the evidence would be destroyed by fires. In addition to the investigative evidence being destroyed, the Federal Register reported that the physical securities held by the brokers in their vaults had been destroyed.
What would be even more revealing would be the actions of the Federal Reserve Bank and the Securities and Exchange Commission on that day, and in the immediate aftermath. As one of many coincidences on September 11, the Federal Reserve Bank was operating its information system from its remote back-up site rather than it’s downtown headquarters. The SEC and Federal Reserve system remained unfazed by the attack on September 11. All of their systems continued to operate. The two major security trading firms had their trade data backed up on remote systems. Nevertheless, the Commission for the first time invoked its emergency powers under Securities Exchange Act Section 12(k) and issued several orders to ease certain regulatory restrictions temporarily.
The Federal Reserve
Suspends the Rules
On the first day of the crisis, the SEC lifted “Rule 15c3-3 - Customer Protection--Reserves and Custody of Securities,” which set trading rules for the following processes:
The seller is not permitted to substitute other securities for those subject to this agreement an therefore must keep the buyer's securities segregated at all times, unless in this agreement the buyer grants the seller the right to substitute other securities
Notification in the event of failure to make a required deposit.
Physical possession or control of securities.
Required Disclosure
Control of securities/Requirement to reduce securities to possession or control.
Simply, GSCC was allowed to substitute securities for the physical securities destroyed during the attack.
“…collateral substitutions can and should be made with regard to immediately maturing collateral.” 191
Subsequent to that ruling, the GSCC issued another memo expanding blind broker settlements. A “blind broker” is a mechanism for inter-dealer transactions that maintains the anonymity of both parties to the trade. The broker serves as the agent to the principals' transactions.
“The only repo transactions entered into by blind brokers should be those done in direct furtherance of clean-up and reconciliation efforts. No new blind brokered business should be executed.” 192
At this point in time, the Federal Reserve and its GSCC had created a settlement environment totally void of controls and reporting – where it could substitute valid, new government securities for the mature, illegal securities, and not have to record where the bad securities came from, or where the new securities went – all because the paper for the primary brokers for US securities had been eliminated.
This act alone, however was inadequate to resolve the problem, because the Federal Reserve did not have enough “takers” of the new 10 year notes. Rather than simply having to match buy and sell orders, which was the essence of resolving the “fail” problem, it appears the Fed was doing more than just matching and balancing – it was pushing new notes on the market with a special auction. It appears some of the beneficiaries wanted to cash out!
“Acute settlement problems with the on-the-run ten-year note led the U.S. Treasury to reopen the issue on October 4 and hold an unusual “snap” auction of new ten-year securities.”193
If the Federal Reserve had to cover-up the clearance of $240 Billion in covert securities, they could not let the volume of capital shrink by that much in the time of a monetary crisis. They would have had to push excess liquidity into the market, and then phase it out for a soft landing, which is exactly what appears to have happened. In about two months, the money supply was back to where it was prior to 9/11. How the Federal Reserve managed this feat is explained in the following section.
The Federal Reserve and
the Three Card Monte
On of the most common scams on the streets of urban America is a set up of three card Monte. The intricacies of the scam are legion, but essentially, the dealer’s sleight of hand which fools the mark is covered by a rapid rotation of the three cards. It was the rapid rotation of the securities settlement fails in the aftermath of September 11th that appears to have allowed the Bank of New York and the Federal Reserve to engage in a securities refinancing that resulted in the American taxpayer refinancing the $240 billion originally used for the Great Ruble Scam.
A review of the explanations for the actions of the Federal Reserve after September 11th exposes an amazingly complex web of analysis and speculation. The reports published by the Federal Reserve argue that the Federal Reserve’s actions increasing the monetary supply by over $300 billion were justified to overcome operational difficulties in the financial sector. While impressive as the reports are, what is noted by the casual reader is that all of the Federal Reserve analysis is speculative and suggestive, using phraseology such as “may have,” “likely,” “presumably,” or “should have.” There are few - if any - definitive statements about root cause and the appropriateness of the Federal Reserve response. [In other words the 300 billion was not for what they said it was DC]
The general perspective of the industry is captured in such comments as:
“The destructive force of the attacks themselves caused severe disruptions to the U.S. banking system, particularly in banks’ abilities to send payments. The physical disruptions caused by the attacks included outages of telephone switching equipment in Lower Manhattan’s financial district, impaired records processing and communications systems at individual banks, the evacuation of buildings that were the sites for the payments operations of large banks, and the suspended delivery of checks by air couriers.” 194
“Following September 11, open market operations were aimed at satisfying the financing needs of the severely disrupted government securities dealer community, leaving to the discount window the task of elastically providing balances to satisfy demand at the target rate. The huge additions of funds following September 11 were therefore a by-product of operating procedures designed to target the overnight funds rate.[3]”195
“Fails rose initially because of the destruction of trade records and communication facilities. They remained high because the method typically used to avert or remedy a fail—borrowing a security through a special collateral repurchase agreement—proved as costly as failing to deliver the security.”196
Reading statements like this are suggestive that there were massive, wide spread disruptions in the system. These were the conditions that “led policymakers to depart so significantly from previous debt management practices.” 197
While the facts presented by the Federal Reserve analyst’s reports are true, as presented they tend to distort what really happened in the aftermath of the attack. In truth, while the analysts reported disruptions at over 800 banks, a deeper look at the reports indicated that only “a few’ were seriously disrupted. The order of magnitude of disruption at any bank was never quantified, with the exception of one. Even that statement however, detracts from the data which suggest that the disruptions were essentially concentrated in one bank – the Bank of New York. (The same Bank of New York was being investigated for money laundering charges in relation to the economic pillaging of Russia by criminal oligarchs who were financed with the covert securities purportedly being laundered in the aftermath of September 11th.) This is because while the Fed was reporting outstanding account balances over $100 billion per day (while not identifying the banks involved), the Wall Street Journal reported:
“At one point during the week after September 11, BoNY publicly reported to be overdue on $100 billion in payments.”198
The Deutschebank, which sat inside the World Trade Center and was totally decimated, reported no such account balance increase, and JP Morgan, the other of only two clearing banks which uses the same traders and communications hub, reported no such increase in its account balance. No one has publicly asked: why is it that these other two banks were not seriously disrupted, while the Bank of New York – which had no structural damage, seemed unable to operate? Understanding what was happening at the BoNY becomes critical to understanding the securities settlement issues:[Hell of a good question D.C]
“GSCC and several dealers could not verify what came into and what left their custodial accounts at BoNY, they could not advise BoNY of securities they expected to receive, and they could not give BoNY instructions for delivering securities. Additionally, GSCC was unable to verify the movement of funds into and out of its account at BoNY (GSCC Important Notice GSCC068.01).”199
In a world of coincidences, The Bank of New York (which had over 8,000 employees in its downtown location), lost three employees that day. One of those three employees was a man who was in the best position to explain how the attacks would have impacted BoNY. His name was Michael Diaz-Piedra III, a former West Point graduate and son of a Cuban exile. Michael was the Vice-President of Disaster Recovery Planning for the Bank of New York. In the aftermath of September 11, he was reported as being an employee of Bank of America, or holding another position at the BoNY.
Finally, with respect to the Bank of New York operations and the level of disruption experienced on September 11th, an important element needs to be highlighted. Disruptions to the financial system were attributed to the loss of the communications hub in downtown Manhattan. The telephone network operations center (NOC) or hub was decimated when the WTC collapsed onto it. However, the BoNY Funding Transfer operations, which reportedly could not communicate with the Fed, were located in Utica, New York, and had none of its communication abilities impaired. Moreover, the four BoNY back-up data centers were all located within 46 miles of Manhattan, and could and did deliver data on tape regularly to the Fed via courier.
In a reported setting of half truths and speculation by Federal Reserve analysts made to appear as facts, review of the reports of the financial aftermath of September 11th suggest:
• The disruptions to the U.S. financial system were not as widespread as the reports from the Federal Reserve would have the public believe, but that the public had to be made to perceive a widespread need for declaring a national financial emergency, suspending key provisions of the Federal Reserve Act and driving the ‘ten-year special rate’ to almost zero.
• Certain key unknown figures in the Federal Reserve may have ‘conspired’ with key unknown figures at the Bank of New York to create a situation where $240 billion in off balance sheet securities created in 1991 as part of an official covert operation to overthrow the Soviet Union, could be cleared without publicly acknowledging their existence.
• These securities, originally managed by Cantor Fitzgerald, were cleared and settled in the aftermath of September 11th through the BoNY. The $100 billion account balance bubble reported by the Wall Street Journal as being experienced in the BoNY was tip of a three day operation, when these securities were moved from off-balance-sheet to the balance sheet. (The off-balance-sheet process is described by banking advisor to the US Presidents Earl Cocke, who admitted under sworn testimony to managing Project Hammer funds – the suspected source of these illegal securities.)
• By reducing the ‘ten-year special rate’ to almost zero, the Fed structurally increased the number of refinancing (Repo) settlement fails. Under the umbrella of this artificially created statistical bump of fails, the high level of fails due to the laundering of the $240 billion was able to be processed unnoticed.
• The cover for this bubble is found in the footnotes to the BoNY annual and quarterly reports, which report that the BoNY took over $330 billion of commercial securities business from U.S. Trust between June and October of 2001, although the assets under control of U.S. Trust in 2000 were reported by two sources as $80 or $86 billion.200
Federal Reserve Management
of the Aftermath of September 11
There were two key disruptions reported in the financial markets:
1) Excessive account balances in a few banks reportedly contributing to an increase in the account balance in a wide array of banks which required a massive infusion of credit to stabilize the Federal Reserve system. These accumulations started appearing on September 12th and ran through the 18th,. They resulted in the addition of $300 billion to the US monetary supply, which initiated the on-set of the sub-prime market. [And we know what that sub-prime market led to seven years later in 2008,don't we DC]
2) A reported excessive number of fails in securities settling requiring the lifting of controls on settlements. There were two reasons reported for these fails:
• Missing trade data due to loss of communications and data;
• Refinancing (Repo) settlements had lost any financial incentive to avoid fails because the special rate for 10 year notes was dropped to almost zero.
The first wave of fails is attributed to the BoNY situation.
“In the absence of complete information on deliveries into and out of its account at BoNY on September 11, and as a result of its assumption of settlement fails on the starting legs of blind-brokered RPs, GSCC recorded (after the close of business on September 11) $266 billion in transactions that apparently failed to settle.… Continuing connectivity problems prevented GSCC from giving BoNY delivery instructions after the close of business on September 11 and prevented it from acquiring information on activity in its account at BoNY during the day on September 12. Consequently, GSCC recorded $440 billion in settlement fails as of the close of business on September 12.”201
Excessive Balances Increasing
the Supply of Money
On over-riding consideration in the Fed’s management of the aftermath of September 11th was the concentration in account balances at the Federal Reserve.
“It is clear that the concentration in account balances at the Federal Reserve—rising more than fourteen fold from its normal levels on the days following the terrorist attacks—was a most unusual event…. If a large proportion of the balances in the banking system concentrate in one bank’s account, then other banks will face, all else being equal, higher costs of making payments, or alternatively may face liquidity constraints on their borrowing, which could preclude their submission of further payments.”202
It may seem a small detail, but note the qualifying statement: “all else being equal.” An alternative explanation could be to move off-balance sheet liabilities to the balance sheet and claim the offsetting claims are in the rubble of the World Trade Center.
A key consideration is the pre-9/11 daily average for this balance: “For commercial banks, these balances consist of either required reserve balances, excess reserve balances, or service-related balances.3 These balances and service-related balances for August 2001 averaged $14.65 billion per day.4 203 This makes the actual surges due to the attack show a net impact of $352 billion on the account balance over the remainder of the week .
Federal Reserve Balance adjusted for
normal daily average to
reflect true impact of attack. Reported Balance (Billions)
Adjusted Balance Due to
Attack (Billions of Dollars)
September 12 44 29
September 13 104 89
September 14 121 106
September 15 111 96
September 16 46 31
What appears to be the case is that the Federal Reserve imbalances reported on three consecutive days in the aftermath were largely concentrated at the Bank of New York, which is reported to represent over 90% of the imbalance, suggesting the Bank had been the recipient of massive fund transfers, and unable to send out transfers.
“At one point during the week after September 11, BoNY publicly reported to be overdue on $100 billion in payments."204
This supposedly was due to major communication and system failures.
“The crucial government bond processing, for example, had a system in which a second computer was receiving and processing all the data going into the main computer, making it ready to pick up at a moment's notice…. As it turned out, though, even the expensive backup system was unable to get the government bond business up and running smoothly. That is largely because of problems maintaining the communications links that receive information on trades from its customers and report their positions back to them. ''In many cases our backup sites were dealing with our customers' backup sites,'' Mr. Renyi said. And though the bank had established communications lines in advance connecting these various backup centers, they often were of low capacity and typically had not been fully tested and debugged. Even a week after the attack, the Bank of New York was having trouble with some crucial communications links, like its connection to the Government Securities Clearing Corporation, a central part of the government bond market. On several days that week, the bank had to drive computer tapes with its trades to G.S.C.C. offices.”205
“On September 11, we were able to continue processing, as our funds transfer business unit is in Utica, New York, until the telecommunications lines went down later in the day in lower Manhattan. After that, excess liquidity quickly built up because we were unable to process all securities and cash transactions in a normal manner. The increase in the balance sheet went away very quickly, however, as we returned to normal processing by Friday and handled the backlog over the weekend.”206
In fact, none of the BoNY’s systems failed or went non-operational.
“Bank executives argue that some of the criticism has taken on some aspects of urban legend, especially the notion that the bank was in disarray because the main backup for its computer center in Lower Manhattan was at another location in Lower Manhattan. The bank says that all of its several computer centers in Manhattan were always set to revert to centers outside the city in case of emergency, and they did on Sept. 11.” 207
Even more to the point, the Bank’s Fund Transfer operations are located in Utica New York, and its communication systems remained untouched.
Where the inconsistent reporting gets interesting is that Todd Gibbons of the BoNY reported an “increase” in the volume of securities on September 11.
“The contingency site must be able not only to accommodate normal business loads, it must be able to accommodate extreme business surges, such as we saw in the first day in the equities market. Our contingency plans had included the ability to handle a great amount of excess capacity; and we were able to handle the increase in volumes….”208
However, the overall volumes for the day were 25% less than normal and one third of the volume or $400 billion came in after normal business hours in very few transactions. As seen in the chart below, overall transactions for the day were seemingly down even more significantly than volume, but the transactions that came in after closing were extremely large, averaging in size in packages of $35million or more. This would be consistent with a hypothesis that $240 billion of securities were being pushed surreptitiously into the money supply. Additionally, the conflicting information from the BoNY and Fed suggest the activity in the bank was different that that being reported to the public.
“August 2001, the value of Fedwire funds transfers averaged more than $1.6 trillion per day, while banks held about $15 billion on account.11 ….The value of funds sent on September 11 was $1.2 trillion, about three-fourths of the average for the benchmark period. However, unlike volume, the value of funds sent had returned to normal levels on the twelfth and was then at elevated levels for the next seven business days.” 209
The Federal Reserve, without providing the detail required to substantiate it’s claims, would have the public believe that there were widespread liquidity issues, when in fact the issues were very concentrated primarily, if not singularly, in the BoNY, which has been the subject of an ongoing major money-laundering investigation for many years. These account balance issues resulted in the defacto expansion of the monetary supply, details of which are no longer reported by the Federal Reserve. The reported cause of this market malfunction is seemingly suspect. By comparison, the Deutschebank which sat inside the World Trade Center reported no such account balance increase, and JP Morgan, the other of two clearing banks which uses the same traders and communications hub reported no such increase in account balance. Additionally, while problems were being documented between the BoNY and GCSS, no other institution had those problems.
“…it is worth noting that settlements occurred at the major large-value private sector settlement systems (the Depository Trust & Clearing Corporation and the Clearing House Inter-bank Payments System [CHIPS]) on the eleventh and subsequent days.”210
There is every reason to believe activities in the BoNY in the aftermath of September 11th are worthy of suspicion.
The Fails
In the aftermath of September 11th, the analysts at the Fed attributed the security settlement failures to two causes:
• the initial inability to match up trades with correspondent data, and
• the use of ‘strategic’ fails by brokers in the aftermath, when the special rate on securities was so low that there was no incentive to avoid the refinancing fail. This reduction in the special rate was attributed to operations to increase liquidity in response to excess balance issue discussed in the section above.
One key Federal Reserve researcher summarized it accordingly:
“Fails rose initially because of the destruction of trade records and communication facilities. They remained high because the method typically used to avert or remedy a fail—borrowing a security through a special collateral repurchase agreement—proved as costly as failing to deliver the security. The U.S. Treasury responded to the fails problem by reopening the on-the-run ten-year note. The increased supply made borrowing the note more attractive than failing.”211
The standard remedy for a fail—borrowing a security through a special collateral repurchase agreement— fell apart when the Fed dropped the special rate to nearly zero. As a result, a second, ongoing ‘wave’ of ‘fails’ was created by removing the incentive for regular traders to avoid fails. It is this structurally created second wave that masked the underlying wave of fails due to the loss of the covert funding notes.
“The Desk “had to accept the vast majority of propositions – even those offered at rates well below the new 3 percent target level – in order to arrange RPs of sufficient size.” (Markets Group of the Federal Reserve Bank of New York 2002, p. 24) On Wednesday, the Desk accepted all propositions submitted, the lowest of which was ¾ percent: see Table 2. The effective federal funds rate sank to 1¼ percent on Tuesday and below that on Wednesday”212
“The incentive of a seller to borrow securities to avoid or cure a fail declines with the specials rate for the security. When the specials rate is near zero, a seller has little to gain lending money (at nearly no interest) to borrow the needed securities.13 This suggests that market participants may have little incentive to break daisy chains and round robins when the specials rate for a security is near zero. This aspect of the market is important to understanding the fails problem after September 11…. the specials rate for a security will be driven to its lower limit more frequently when the fed funds rate, and hence the general collateral rate, is lower. This follows because the gross compensation earned by a lender of securities at any given specials rate is the difference between the general collateral rate and the specials rate.”213
As shown in the following chart, the specials rate dropped by 200 -300 basis points, creating a disincentive to resolve short term, repo fails and creating a statistical flurry of fails.
The response of the Fed in bringing a new issue to the market at this time seems to have inadvertently (an assumption which should be challenged) been the source of continued lower “special rates” on the ten year note, and exacerbated the fail problem through the end of the year. In the extended condition of a high level of settlement fails, it would require little effort to ‘statistically hide’ the settlement of the remaining $240 billion that may not have been cleared in the immediate aftermath. The three week lull of fails in October could easily represent the 30 day short term refinancing of the debt. As the debt came back to the market for permanent refinancing, a shortage of investors would result in more fails.
The critical perspective here is that in making the original paper on $240 Billion in covert notes disappear in the rubble of the World Trade Center, it would be implausible to refinance them in a few days without the financial world taking note. Notes could conceivably be refinanced for 30 days in the repo market, and the final refinancing extended for weeks, possibly months.
There is a contention that at the core of the September 11th attack, someone was planning to cover the 1991 issuance of $240 billion in covert securities used to finance the collapse the Soviet Union. The facts surrounding the financial aftermath of September 11 suggest this is not only possible, but that reports describing the aftermath have deliberately been misleading.
• The US dollar money supply was significantly increased in the aftermath of 9/11;
• The bank at the core of the illegal money laundering by ex-Soviet criminals was the source of the increased money supply (BoNY);
• The generally disseminated rationale for BoNY’s operational problems seems to have affected no other bank in a similar manner or magnitude and is inconsistent with reports on the BoNY operations in the aftermath;
• A key witness who might provide insight to these issues is a statistically aberrant death;
• The source of the BoNY’s $330 billion increase in assets is cloaked under the privilege of “private banking;”
• The only alleged “severe” disruption to the financial systems was the Federal Reserves account balance and the securities trading fails – both systems required to hide the laundering of $240 billion in covert securities.
This is not a ‘proof’ that $240 billion was laundered, but it provides probable cause for paying serious attention to Durham’s claim that it was indeed what happened. When one looks deep enough into the murky cloud of black ops and secret financing – the world of Durham’s husband - her claims regarding 1991 and 2001 begin to gather credibility.
Mohammed Atta’s Affiliations
with Western Intelligence
Finally, if one looks at the affiliations of the attack leader and financiers, one will see multiple linkages to US covert operations and U.S. intelligence allies.
• Mohammed Atta, reportedly responsible for coordinating the attacks, trained his men and himself at the Huffman Aviation -Flight Training school. That school was funded by Wally Hilliard, with Oryx Corporation.214 Oryx was founded by Adnan Khashoggi and Sheik Kamal Adham, director of Saudi intelligence (1963-79). Khashoggi was the individual that brokered the meeting between terrorists and the Yeltsin Family. 215 Khashoggi was also extensively involved in the following Bush operations: October Surprise, Iran-Contra, Azerbaijan, Barrick Gold, Marcos Gold.
• Mohammed Atta during his time in the U.S. remained a close friend of Wolfgang Bohringer, an apparent CIA agent.216
• Hilliard, nominal owner of the training facility which acted as cover for the terrorists, is a significant investor in a small California defense/electronics company (Spatialight, Inc.) with Farhad Azima, another of the Iran-Contra/Azerbaijan group. Azima’s role had been to coordinate air transportation for covert US intelligence operations for Iran-Contra and Azerbaijan.
• Hilliard is reported as a close friend of CIA agent Mark Schubin, whose father was a KGB colonel.217
• Hilliard is also strongly linked to the Jeb Bush political machine in Florida, and has had his commercial transport operations endorsed by that group.218
• Mohammad Atta, as can best be determined, received funding from three foreign intelligence agencies aligned with the US: Pakistan, Syria and Germany. His father contended he actually worked for a fourth – the Mossad!
Director of the ISI (Pakistani) Intelligence (director-general Lt-Gen Mahmud Ahmad. The week of September 11, General Ahmad was meeting with Bob Graham, Porter Goss and Richard Armitage.219 Gen Mahmud Ahmad was responsible for having $100,000 transferred to Mohammed Atta.220
− While in Germany, Atta worked as an employee of Tatex Trading which was owned primarily by Mohamad Majed Said, a former head of Syria's General Intelligence Directorate,221
− In coming to Germany, Atta was funded with a scholarship and employed as a tutor by an organization known as Carl Duisberg Gesellschaft.222 Subsequent Internet reports linked the Carl Duisberg Society to administration by the U.S. Information Agency, but this had not been verified by any government documentation. There are Internet reports that the scholarship was jointly funded by US AID. The more interesting aspect of Carl Duisberg Gesellschaft is that it’s Managing Director is Bernd Schleich, the same individual who is Managing Director of InWEnt (Internationale Weiterbildung und Entwicklung. If one investigates the activities and research of InWEnt, it appears to be a commercial intelligence operation that does studies on such matters as money-laundering, weapons trades, drug smuggling, and anthrax control in such places as South America, Central Asia and Africa. 223 Carl Duisberg Gesellschaft has a fellowship funded by Alpha Group, the Russian Bank represented in the U.S. by former George H.W. Bush administrators Ed Rogers and Lanny Griffith.224
− Mohammed Atta’s father claimed his son was working for the Mossad.225 Supporting this view, Atta was reported as having left phone records of call to a company named “Virtual Prototypes.”226 Virtual Prototypes Inc. would later change its name to eNGENUITY Technologies. It seems as though the type of work done at eNGENUITY was of more interest to the Israeli government, than it might be of use to a group such as Al Qaeda, as the Israelis made significant purchases from eNGENUITY three years later.227
• Mohammed Atta would be discovered to be a legal business partner to Hassan Erroudani, who through the Moroccan American Chamber of Commerce would be associated with the Allied Media Group, a major recruiter for US Defense organization and private security firms.228 Their customers would include:
- USAF
− US Army
− FBI
− US Treasury
− Department of Justice
− Department of State
− CACI
− Young & Rubicam
− Burson Marsteller
Atta and his sponsor’s were not jihadists. As a “terrorist pilot” he spent his last year in the U.S. in the companionship of two CIA pilots (Schubin and Bhoringer). He trained his team at a facility financed by a known financier for CIA operations (Khashoggi). He was a business partner with a CIA recruiter (Erroudani). He was funded by up to four pro-CIA intelligence agencies.229
Conclusion
History has many interpretations, and this report has been just one of many – an interpretation pieced together from the bold admissions and revelations of insiders, whose stories have been ignored and suppressed by the major media organizations. It is an interpretation of history that suggests a few determined men strove to change the world in defense of western capitalism in ways which they felt needed to be hidden from the public. Whatever emotion or logic that was adequate to cause them to hide their actions from the public was not strong enough to prevent them from committing the acts. In changing the world, crimes were committed for the good of the American public, without the American public having a say in what it thought was in its best interest. To cover-up these crimes, thousands of innocent people had to be murdered. Hundreds of thousands of people across the globe have been subjected to the terrors of wars funded by this operation. The ‘few good men’ responsible for these events make sure no one knows who is responsible, because in their hearts, they know that what they do is not acceptable to the American public. The alleged statements by Bush and Reagan are testimony to that point:
Sarah McClendon: "What will the people do if they ever find out the truth about Iraq-gate and Iran contra?
George H.W. Bush: "Sarah, if the American people ever find out what we have done, they will chase us down the streets and lynch us."230
“If such a story gets out, we’ll all be hanging by our thumbs in front of the White House….”231
It might be fair to rationalize their crimes as collateral damage in a war to preserve the American standard of living, and that because they risk their lives to serve the American public, they are ‘entitled’ to reap the spoils of war. If thousands had to die to enrich the life and secure liberty for millions, is that not an acceptable sacrifice?
It might also be fair to suggest that these agents are nothing more than a criminal association of sociopaths and psychopaths, out to enrich themselves by means of violence, and who have murdered thousands, destroyed the livelihoods of tens of thousands, and caused endless misery, pain and death for millions in foreign lands. As a brotherhood always at war, they live under a motto of ‘results at any cost’ and they spin a web of deceit which allows the American public to tolerate their crimes.
It might be fair to view the politicians who use them as ‘realists,’ who accept the existence of both kinds of men, and use them to preserve and protect the American public, and like generals in war, be forced to make the ‘hard decisions’ on behalf of the citizenry.
It might also be fair to view the politicians as ‘opportunists’ who use the agents for their own personal gain. Most of these politicians made their fortunes by capitalizing on the death and misery of war which they forced others into unwillingly, and through deception. They have insider trading knowledge of secret funds that in actuality belong to the American public, and unlimited personal access to those funds.
Regardless of any personal interpretation, the process for ascertaining truth which has held consistent with the values of the American public has been a trial by jury, where the prosecutors and defense abide by the law to conduct a fair and impartial hearings of the facts. This report is based on hearsay evidence, and as a result, proves nothing. Hopefully, what it does is define hypotheses to be proven by subsequent archive research.
Americans had a chance in the 1980s to set the system straight, to enforce the law and prosecute those responsible for the Iran-Contra crimes. Americans could have sent a message that criminal behavior by its leaders is unacceptable. By not stopping this organization at that time, Congress and the American public allowed this criminal syndicate of American ‘heroes’ to continue to wreak even more havoc on the world in the name of the American public. This assault on the Constitution, freedom, democracy, the Geneva Convention, and the rule of domestic and international law has continued unabated for over 50 years. By refusing to re-open the widely discredited inquiry called the 9/11 Commission, and by refusing to address the covert funding that feeds this syndicate without accountability, the Congress seemingly becomes co-conspirator to past and future crimes. Ronald Reagan was correct: “….America will never make concessions to terrorists; to do so would only invite more terrorism. Once we head down that path, there would be no end to it, no end to the suffering of innocent people, no end to the bloody ransom all civilized nations must pay.”232
Before his death, Erle Cocke testified that he though the whole operation had become too big for anyone to determine how to bring closure to it, and that those who wanted to see it ended just gave up. Given the thousands of people who have been murdered to keep this secret, and given the way witnesses that could implicate this group are treated, maybe those that gave up were encouraged to do so. Two questions remain: 1) Does the American public want to bring an end to this covert war, and 2) Is there a way to bring this to closure?
Two American Presidents – Kennedy and Carter – tried to bring this organization under control, and both were beaten by the machine. Hopefully, the lessons of their shortcomings will provide success in a third attempt.
From the Hagakure:
To tell others that
It is a rumor
Will not do.
When your own heart asks,
How will you respond?
EP Heidner
28 June, 2008
Author’s Note: This is the condensed version of this story. The author cannot vouch for the accuracy of the source materials, although efforts have been made to validate the consistency of the story line with as many references as possible. There is no single fact or reference that this story is dependent on. The author expects some of the details to be disputed, and possibly disproved, but contends that the story line will hold true regardless.
Source and footnotes for both parts as well as 3 graphs that my host will not allow me to add to the content without getting an error message when I try to insert them DC]
2 comments:
if you need the subprime related text's file https://wikispooks.com/w/images/2/24/Collateral_Damage_-_part_2.pdf
Thank you morlock
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