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$52.6 billion
Black Budget
Covert action
Surveillance
Counterintelligence
The U.S. “black budget” spans over a dozen agencies that make up the National Intelligence Program.
Funding the intelligence program
The CIA, NSA and National Reconnaissance Office (NRO) receive more than 68 percent of the black budget.   The National Geospatial-Intelligence Program’s (NGP) budget has grown over 100 percent since 2004.
The top five agencies, by spending
Central Intelligence Agency
Collect, analyze, evaluate, disseminate foreign intelligence and conduct covert operations.
National Security Agency
Protect the government’s information systems and intercept foreign signals intelligence information.
+56%
+53%
Approximate percentage growth from 2004 to 2013
National Reconnaissance Office
Design, build, and operate the nation’s signals and imagery reconnaissance satellites.
National Geospatial-Intelligence Program
Generate and provide imagery and map-based intelligence, which is used for national security, U.S. military operations, navigation and humanitarian aid efforts.
+12%
+108%
General Defense Intelligence Program
Provide assessments of foreign military intentions and capabilities to policymakers and military commanders. Conduct human and technical intelligence collection, document and media management.
+3%
Four main spending categories
Top secret spending can be divided into four main categories: data collection, data analysis, management, facilities and support and data processing and exploitation. The CIA and NRO are heavy on data collection while the NSA and NGP focus on data processing and exploitation as well as auxiliary functions like management, facilities and support.
The top five agencies, by spending:
$20.1 billion
Warning U.S. leaders about critical events
Warn policymakers, military and civilian authorities of threats, such as economic instability, state failure, societal unrest and emergence of regional powers.
$17.2 billion
Combating terrorism
Monitor and disrupt violent extremists and suspected terrorist groups that plot to inflict harm to the U.S., its interests and allies.
$6.7 billion
Stopping spread of illicit weapons
Prevent the proliferation of weapons of mass destruction.
$4.3 billion
Conducting cyber operations
Prevent cyber intrusions and proliferation of weapons of mass destruction.
$3.8 billion
Defending against foreign espionage
Detect attempts by adversaries to penetrate U.S. government.
© 1996 - 2013 The Washington Post
Logical conclusion that US intelligence knew about the chemical attack before it happened and decided to go along with it, not to stop it happening.
Or they were involved in the beginning with the planning, possibly with other nations.
So they are saying it is some rogue element in the Syrian army that sent the rocket with the chemical gas!
Assume this might be true!
Reading below where the foreknowledge of a pending US attack is given to opposition forces, here there is an obvious conclusion:
The rogue element in the Syrian army were in truth part of the Syrian opposition — Assad knew nothing of it!
But the US did!
Think about that — the US knew before the chemical weapon attack took place!
And — Assad gave no permission, knew nothing of it!
So why are we attacking Assad?
Shouldn't the focus be on those who actually sent the gas.
And on those intelligence agencies in the US who had prior knowledge.
Perhaps even more — these US intelligence agencies were at the core of setting this thing up!
And we want to attack and kill people in Syria who are not the people responsible?
Kewe
    

Mounting evidence raises questions about Syrian chemical weapon attack
by: Yossef Bodansky, Senior Editor, GIS/Defense & Foreign Affairs
August 28th, 2013
There is a growing volume of new evidence from numerous sources in the Middle East — mostly affiliated with the Syrian opposition and its sponsors and supporters — which makes a very strong case, based on solid circumstantial evidence, that the Aug. 21 chemical strike in the Damascus suburbs was indeed a premeditated provocation by the Syrian opposition.
The extent of U.S. foreknowledge of this provocation needs further investigation because available data puts the “horror” of the Barack Obama White House in a different and disturbing light.
On August 13-14, Western-sponsored opposition forces in Turkey started advance preparations for a major and irregular military surge.
Initial meetings between senior opposition military commanders and representatives of Qatari, Turkish, and U.S. Intelligence [“Mukhabarat Amriki”] took place at the converted Turkish military garrison in Antakya, Hatay Province, used as the command center and headquarters of the Free Syrian Army (FSA) and their foreign sponsors.
Very senior opposition commanders who had arrived from Istanbul briefed the regional commanders of an imminent escalation in the fighting due to “a war-changing development” which would, in turn, lead to a U.S.-led bombing of Syria.
Bodies said to have been killed by nerve gas in the Ghouta area of Damascus, Syria, August 21 2013.

Photo: Reuters
Bodies said to have been killed by nerve gas in the Ghouta area of Damascus, August 21 2013.
Weapons distribution in all opposition camps under U.S. Intelligence
The opposition forces had to quickly prepare their forces for exploiting the U.S.-led bombing in order to march on Damascus and topple the Bashar al-Assad government, the senior commanders explained.
The Qatari and Turkish intelligence officials assured the Syrian regional commanders that they would be provided with plenty of weapons for the coming offensive.
Indeed, unprecedented weapons distribution started in all opposition camps in Hatay Province on Aug. 21-23.
In the Reyhanli area alone, opposition forces received well in excess of 400 tons of weapons, mainly anti-aircraft weaponry from shoulder-fired missiles to ammunition for light-guns and machine guns.
The weapons were distributed from storehouses controlled by Qatari and Turkish Intelligence under the tight supervision of U.S. Intelligence.
These weapons were loaded on more than 20 trailer-trucks which crossed into northern Syria and distributed the weapons to several depots.
Followup weapon shipments, also several hundred tons, took place over the weekend of August 24-25, and included mainly sophisticated anti-tank guided missiles and rockets.
Opposition officials in Hatay said that these weapon shipments were “the biggest” they had received “since the beginning of the turmoil more than two years ago”.
The deliveries from Hatay went to all the rebel forces operating in the Idlibto-Aleppo area, including the Al Qaida affiliated jihadists (who constitute the largest rebel forces in the area).
Weapon deliveries specifically in anticipation for exploiting impact of imminent bombing of Syria by U.S. and Western allies
Several senior officials from both the Syrian opposition and sponsoring Arab states stressed that these weapon deliveries were specifically in anticipation for exploiting the impact of imminent bombing of Syria by the U.S. and the Western allies.
The latest strategy formulation and coordination meetings took place on August 26.
The political coordination meeting took place in Istanbul and was attended by U.S. Amb. Robert Ford.
More important were the military and operational coordination meetings at the Antakya garrison.
Senior Turkish, Qatari, and U.S. Intelligence officials attended in addition to the Syrian senior (opposition) commanders.
The Syrians were informed that bombing would start in a few days.
A Syrian participant in the meeting said.
“The opposition was told in clear terms that action to deter further use of chemical weapons by the Assad regime could come as early as in the next few days.”
Convinced U.S. bombing scheduled to begin on Thursday August 29 even as formally Obama is still undecided
Another Syrian participant said that he was convinced U.S. bombing was scheduled to begin on Thursday, August 29.
Several participants — both Syrian and Arab — stressed that the assurances of forthcoming bombing were most explicit even as formally Obama is still undecided.
The descriptions of these meetings raise the question of the extent of foreknowledge of U.S. intelligence, and therefore, the Obama White House.
All the sources consulted — both Syrian and Arab — stressed that officials of the “Mukhabarat Amriki” actively participated in the meetings and briefings in Turkey.
Therefore, at the very least, they should have known that the opposition leaders were anticipating “a war-changing development”: that is, a dramatic event which would provoke a U.S.-led military intervention.
The mere fact that weapon storage sites under the tight supervision of U.S. intelligence were opened up and about a thousand tons of high-quality weapons were distributed to the opposition indicates that U.S. intelligence anticipated such a provocation and the opportunity for the Syrian opposition to exploit the impact of the ensuing U.S. and allied bombing.
Hence, even if the Obama White House did not know in advance of the chemical provocation, they should have concluded, or at the very least suspected, that the chemical attack was most likely the “war-changing development” anticipated by the opposition leaders as provocation of U.S.-led bombing.
Under such circumstances, the Obama White House should have refrained from rushing head-on to accuse Assad’s Damascus and threaten retaliation, thus making the Obama White House at the very least complicit after the act.
Meanwhile, additional data from Damascus about the actual chemical attack increases the doubts about Washington’s version of events.
Immediately after the attack, three hospitals of Doctors Without Borders (MSF: médecins sans frontières) in the greater Damascus area treated more than 3,600 Syrians affected by the chemical attack, and 355 of them died.
MSF performed tests on the vast majority of those treated.
Even after testing 3,600 patients MSF failed to confirm sarin cause of injuries
MSF director of operations Bart Janssens summed up the findings:
“MSF can neither scientifically confirm the cause of these symptoms nor establish who is responsible for the attack.
However, the reported symptoms of the patients, in addition to the epidemiological pattern of the events — characterized by the massive influx of patients in a short period of time, the origin of the patients, and the contamination of medical and first aid workers — strongly indicate mass exposure to a neurotoxic agent.”
Simply put, even after testing some 3,600 patients, MSF failed to confirm that sarin was the cause of the injuries.
According to MSF, the cause could have been nerve agents like sarin, concentrated riot control gas, or even high-concentration pesticides.
Moreover, opposition reports that there was distinct stench during the attack suggest that it could have come from the “kitchen sarin” used by jihadist groups (as distinct from the odorless military-type sarin) or improvised agents like pesticides.
Some of the evidence touted by the Obama White House is questionable at best.
A small incident in Beirut
A small incident in Beirut raises big questions.
A day after the chemical attack, Lebanese fixers working for the “Mukhabarat Amriki” succeeded to convince a Syrian male who claimed to have been injured in the chemical attack to seek medical aid in Beirut in return for a hefty sum that would effectively settle him for life.
The man was put into an ambulance and transferred overnight to the Farhat Hospital in Jib Janine, Beirut.
The Obama White House immediately leaked friendly media that “the Lebanese Red Cross announced that test results found traces of sarin gas in his blood.”
However, this was news to Lebanese intelligence and Red Cross officials.
According to senior intelligence officials, “Red Cross Operations Director George Kettaneh told [them] that the injured Syrian fled the hospital before doctors were able to test for traces of toxic gas in his blood.”
Apparently, the patient declared that he had recovered from his nausea and no longer needed medical treatment.
The Lebanese security forces are still searching for the Syrian patient and his honorarium.
Syrian army raid of Jobar Damascus tunnels — “kitchen sarin”
On August 24, Syrian Commando forces acted on intelligence about the possible perpetrators of the chemical attack and raided a cluster of rebel tunnels in the Damascus suburb of Jobar.
Canisters of toxic material were hit in the fierce fire-fight as several Syrian soldiers suffered from suffocation and “some of the injured are in a critical condition”.
The Commando eventually seized an opposition warehouse containing barrels full of chemicals required for mixing “kitchen sarin”, laboratory equipment, as well as a large number of protective masks.
The Syrian Commando also captured several improvised explosive devices, RPG rounds, and mortar shells.
The same day, at least four HizbAllah fighters operating in Damascus near Ghouta were hit by chemical agents at the very same time the Syrian Commando unit was hit while searching a group of rebel tunnels in Jobar.
Both the Syrian and the HizbAllah forces were acting on intelligence information about the real perpetrators of the chemical attack.
Damascus told Moscow the Syrian troops were hit by some form of a nerve agent and sent samples (blood, tissues, and soil) and captured equipment to Russia.
Syrian opposition leaders convinced terrorists responsible for August 21, chemical attack
Several Syrian leaders, many of whom are not Bashar al-Assad supporters and are even his sworn enemies, are now convinced that the Syrian opposition is responsible for the August 21, chemical attack in the Damascus area in order to provoke the U.S. and the allies into bombing Assad’s Syria.
Most explicit and eloquent is Saleh Muslim, the head of the Kurdish Democratic Union Party (PYD) which has been fighting the Syrian Government.
Muslim doubts Assad would have used chemical weapons when he was winning the civil war.
“The regime in Syria … has chemical weapons, but they wouldn’t use them around Damascus, five km from the [UN] committee which is investigating chemical weapons. Of course they are not so stupid as to do so.”
Muslim told Reuters on August 27 he believes the attack was:
“Aimed at framing Assad and provoking an international reaction”.
Muslim is convinced that “some other sides who want to blame the Syrian regime, who want to show them as guilty and then see action” is responsible for the chemical attack.
The U.S. was exploiting the attack to further its own anti-Assad policies and should the UN inspectors find evidence that the rebels were behind the attack, then “everybody would forget it”, Muslim shrugged.
“Who is the side who would be punished?
Are they are going to punish the Emir of Qatar or the King of Saudi Arabia, or Mr Erdogan of Turkey?”
And there remain the questions: Given the extent of the involvement of the “Mukhabarat Amriki” in opposition activities, how is it that U.S. intelligence did not know in advance about the opposition’s planned use of chemical weapons in Damascus?
And if they did know and warned the Obama White House, why then the sanctimonious rush to blame the Assad Administration?
Moreover, how can the Obama Administration continue to support and seek to empower the opposition which had just intentionally killed some 1,300 innocent civilians in order to provoke a U.S. military intervention?
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© Copyright 2013. All Rights Reserved. East West Services, Inc.
Central Intelligence Agency headquarters - CIA US secret black budget 52.6 Billlion

Photo: AFP/Brendan Smialowski
CIA US secret black budget 52.6 Billlion
The Negative Return Economy — a discourse on America’s black budget
Fascinating and lucrative
Keep the people frightened
Of things they cannot know
Is the secret of the Tomb
If they knew what you and I know
They would know it is just men
Who rob them, cheat them, kill them
Then start it all again

— Orville X
Black Budget?   What Black Budget?
At the time of the attack on the World Trade Center and the Pentagon in September 2001 according to the Government Accounting Office (GAO), Pentagon had incurred $3.4 trillion of “undocumentable transactions,” that is to say that there were $3.4 trillion worth of financial transactions for which there was no discernible purpose.
Blood drips on the floor
Green Zone, Baghdad, Iraq
Doctors treat seriously injured U.S. soldier
The day before the attack, Secretary of Defense Donald Rumsfeld warned that the lack of control over its budget was a greater danger to the national security of the United States than terrorism.
After the attacks, the government stopped publicly disclosing information about “undocumentable transactions”.
Blame the Bookkeeper
The problem is not restricted to the Pentagon but affects the entire spectrum of government agencies and departments from the Bureau of Indian Affairs to the Defense Department.
For a number of years the GAO has compiled a parallel set of books for the Federal Government called the Financial Report of the United States.
This report attempts to impose “Generally Accepted Accounting Principles” to the government’s financial reporting process in order to give a clearer picture of the government’s actual assets and liabilities and thereby enable better planning.   Neither the Pentagon nor the Department of Housing and Urban Development (HUD), to name just two, have ever been able to pass a GAO audit on this basis.
Significantly, the government does not employ double entry bookkeeping in the preparation of its accounts.
This has been standard accounting practice since the seventeenth century, which classifies and tracks sources and uses of funds to create an accurate picture of a business (or public) enterprise.
Today the Pentagon utilises no accountable means of tracking money authorised by Congress from its initial authorisation to its use, say in developing a fighter plane.
Running a 21st century military machine using antique accounting methods is an anomalous situation with interesting implications, not least of which is that government agencies cannot, or will not, explain what they are doing with the money that is appropriated for their operations by Congress.
A similar state of affairs prevails at the Department of Housing and Urban Development (HUD).
It exists primarily, at least in law, to ensure that low income Americans have access to affordable housing, which HUD provides as well as both credit and credit insurance on a nationwide scale.
U.S. soldier lifts burned hand
Green Zone, Baghdad, Iraq
Doctors treat seriously injured U.S. soldier
Yet HUD has never compiled information on its activities so that it or anyone else can see, by place, whether or not its activities in that place make money, lose money, or are simply irrelevant.
Conflict of Interests
Few Americans are probably aware that Lockheed Martin, builder of the F22 air superiority fighter, is also a major outside contractor supplying financial control and accounting systems to the Pentagon.
The Pentagon for its part is Lockheed Martin’s biggest customer.
This example is by no means unique.
Lockheed also has a subsidiary employed by HUD to administer housing in American cities, an unusual diversification for a corporation the majority of whose business is done with the military and intelligence agencies. [ii]
Similarly Dyncorp (recently acquired by Computer Sciences Corporation) is another contractor that, like Lockheed, derives almost all its revenue from government security and military contracts.
It is also a contractor supplying information technology to a variety of government agencies including the Pentagon, HUD, the Securities and Exchange Commission (SEC) and the Department of Justice.
At the Department of Justice it manages the case management software used by DOJ lawyers to manage investigations. [iii]
A prime example of overlapping interests is Herbert “Pug” Winokur.   Not only was he on Dyncorp’s board of directors but he is also the Enron director in charge of that company’s risk management committee, and a long-standing board member of the Harvard Management Corporation, which invests in HUD projects.
AMS Inc., a computer software firm hired by HUD in 1996 to take over the management of its internal software for accounting and financial control, presided in two short years over an explosion in undocumentable transactions of nearly $76 billion.   AMS violated fiduciary and control practices by installing its own equipment and software with no parallel runs against the legacy software and accounting system.
In those same two years, HUD’s management more than tripled the volume of loan and insurance business being pushed through the system.   Anyone familiar with running such systems in a bank or an insurance company immediately understands that a decision such as this (for it had to be a decision) would result in huge losses. [iv]
Is this incompetence or design?   Only the credulous would believe accident: the reward for Charles Rossotti, president of AMS, was to be named Internal Revenue Service (IRS) Commissioner at the Department of the Treasury, from which position he oversaw significant Treasury contract amendments to AMS.
He was a direct beneficiary of this as a special White House waiver permitted Rossotti and his wife to retain their AMS stock.
Government’s response to criticism
The reaction of many people to the sorts of facts related above is to dismiss them as no more than evidence of incompetence and accident.
Two US soldiers
Green Zone, Baghdad, Iraq
Doctor places blanket over seriously injured U.S. soldiers
The government does little to resist this sort of interpretation; on the contrary, it encourages it.
For example, in response to calls for an investigation of its financial control, the Pentagon countered with an offer to investigate credit card abuse.
Complaints about the performance of outside contractors such as AMS have been answered by a government-wide contract award to IBM for the standardisation of IT systems and practices.
IBM, in turn, has awarded subcontracts to AMS, Lockheed, Dyncorp, SAIC and Accenture (formerly spun out from Arthur Andersen of Enron fame).
It is these firms that have failed to provide systems that can pass a GAO audit.
This manoeuvring and the government’s justifications affront common sense and are unethical.
As private sector firms, they have to pass audits before their own accounts can be approved and reported to shareholders.   Yet they routinely fail to meet the same standard for the government.
Often the government blames the previous, outgoing administration.
However, consider that the incoming Bush administration replaced all the senior Clinton political appointees except: the Comptroller of the Currency, John D. Hawke; IRS commissioner Charles Rossotti (formerly of AMS); Comptroller General David Walker (Formerly of Arthur Andersen [v] and CIA director George Tenet.
(see: http://www.npr.org/programs/npc/2001/010423.dwalker.html)
In short, the key positions necessary for the control of the federal credit, financial control, audit and intelligence.
Comptroller of the Currency, John D. Hawke ---->control of the federal credit
IRS commissioner Charles Rossotti ----> financial control
Comptroller General David Walker ----> audit
CIA director George Tenet ----> intelligence
This undisturbed transition from Democratic to Republican administrations represents a remarkable cross-party consensus, and highlights the real positions of power.   With the exception of Rossotti, all these men are still in place in 2004.   And Rossotti?   He left the IRS to become a senior adviser to the Carlyle Group for information technology.   A more richly symbolic and meaningful job move could scarcely be imagined.
Carlyle’s business is global venture venture capital, which is to say it invests in corporate acquisitions all over the world with a speciality in arms manufacturers and technology.
The large levels of undocumentable transactions at HUD and the Department of Defense inevitably inspire curiosity.
Where is the money associated with those transactions?
It is no great leap of imagination to wonder equally where the Carlyle Group raises the money with which to finance its acquisitions. [vi]
The trusts are dead.   Long live the trusts
The cartelisation of the American economy was for all intents and purposes completed by the end of the first decade of the twentieth century. [vii]
38-year old Indian contractor
Green Zone, Baghdad, Iraq
Seriously wounded by mortar round at pizza shop at U.S military base Baghdad
In 1889, America’s leading banker JP Morgan held a meeting at his 5th Avenue mansion in New York.   Its purpose was to reach a consensus whereby the owners of America’s railroads merged their competing interests. [viii]
This was no mere group of transportation executives agreeing to fix prices.   The railroads also controlled the nation’s coalfields and oil supplies, and were tightly bound to the nation’s largest banks.
The creation of the Federal Reserve in 1914 completed this process of consolidation.
In effect, Congress ceded control of the US currency system and the federal credit to the banks, thereby officially recognizing the cartel.
This placed a relatively small number of men in a position to set prices across the economy with a degree of control heretofore unknown in US history.
The banking cartel’s interest in war
American foreign policy and the wars that America has fought over the course of the twentieth century (including the Spanish American War in 1898 [ix] and the present War on Terror) have successfully extended the cartel’s control over the world economy.
The American Civil War was fought to determine control of the US economy. [x]   Most Americans would explain the last 150 years of warfare as sadly necessary for reasons beyond America’s control.
The implication is that America has accumulated its preponderant international position by some providential accident and not by design.
Arguments for a contrary view elicit derisive accusations of falling victim to “conspiracy theory.”
Reassuringly, they believe that self-interested individuals and organisations are incapable of collaboration to achieve common ends.
When JP Morgan sat the owners of America’s railroads around a table and hammered out a non-compete agreement, it was no accident.   Similarly, neither have America’s wars been accidents; they have been far more profitable than is widely understood.
The US confiscated billions of dollars worth of German and Japanese war treasure at the end of World War Two.   President Truman made a conscious decision to not reveal this to the public or repatriate it.
Instead, it was used to finance covert operations. [xi]
Command economy
Popular myth has it that the trusts were broken up in the first decade of the twentieth century thanks to the crusade of Theodore Roosevelt on behalf of the middle class.
Roosevelt certainly used his public stance against “big business” to successfully bid for campaign money from the very businessmen whom he was attacking.
This perhaps explains why he subsequently signed legislation repealing criminal penalties for those same businessmen.
This is a common trait of “liberal” or “progressive” presidents.
The second Roosevelt, Franklin, is remembered as the champion of the downtrodden, who put an end to the Great Depression.
It was he who established the nation’s social security system which in reality was (and is) funded by a highly regressive tax on its beneficiaries.
Matching contributions from business were allowed to be deducted as a business expense before tax which simply extended the regressive nature of the program by financing business’ share out of foregone tax revenue.
Roosevelt, a superb politician, won a landslide victory on a platform of reform which he adroitly sidestepped fulfilling.
Instead, he declared a national economic emergency, short-circuiting any constitutional challenge to his power in the court.
He promptly defaulted on the gold clause in the government’s bond contracts, and established the Exchange Stabilisation Fund (ESF) in 1934.
Ostensibly meant to promote dollar stability in the foreign exchanges, the Fund in practice was and is something quite different.
It is exempt from reporting to Congress and is answerable only to the President and Secretary of the Treasury.
It is, in short, an undisclosed fund that can tap federal credit.
Apparatus of a Command Economy
The establishment of the ESF was an extension of the same logic behind the creation of the Federal Reserve in 1914.
The latter, the Fed, was also created in response to a crisis: the crash of 1907.
The Wall Street legend credits JP Morgan’s genius and patriotism with saving the Nation.
In reality, the crash and resulting depression enabled Morgan to destroy his competitors, buy up their assets and in the process revealed to the nation and the world just how powerful the banks and Morgan were.
Not all were grateful, and some demanded legislative action to bring the federal credit and national monetary system under public oversight and control.
In a campaign of masterful political legerdemain, the Federal Reserve was created in 1912 by an act of Congress to do just this.
But by creating it as a private corporation owned by the banks, Congress effectively ceded to the banks a position even stronger than they had occupied before.
Even today it is not widely understood that the Fed is a privately held business owned by the very interests that it nominally regulates.
Thus the control of federal credit and the US monetary system and the rich flow of insider information that results from that control are veiled from public view and are privately controlled in secret which rather explains the Delphic nature of the Fed’s chairman.
The extension of secret control was not limited to finance.
The National Security Act of 1947 created the Central Intelligence Agency (CIA) and the National Security Council (NSC) and consolidated control of the three armed services under one roof at the Pentagon.
This merely served to extend this principle of secrecy to the field of “national security.”
Like the Fed, the CIA was exempted from public disclosure of its budget and was given budgetary control over the entire intelligence community, while the National Security Council was set up as a policy-making body separate from the existing organs of state policy such as the State Department and the military commands reporting directly to the president.
The CIA Act of 1949 created a budget mechanism that allowed the CIA to spend as much money as it wanted “without regard to the provisions of law and regulations relating to the expenditure of government funds.”
In short, the CIA has a way to fund anything — legal or illegal — behind the protection of national security law. [xii]
Implementation
Having created the bureaucratic means to conceive and make policy in secret, the next development was to create the means to implement it.
The main issue was how to control money flows in the national economy.
The government’s solution was to assume a commanding position in the credit markets.
To that end, it created first the Federal Housing Authority in 1934 (forerunner of HUD and now part of HUD) [xiii] and subsequently Ginnie Mae and then Fannie Mae and Freddie Mac, which are government sponsored enterprises (GSEs) to supply mortgage finance and insurance for homebuyers.
The underlying political purpose is more subtle.
Combined with the power of the Federal Reserve (i.e. the cartel) to set the price of money, the ESF, the GSEs, and latterly the Department of Housing and Urban Development (HUD), have proven to be a powerful force for regulating money flows and demand in the US economy.
The military, too, was reformed with the adoption for the first time in American history of a wartime military budget and force structure in peacetime.
In the early 60s this was fine tuned with the adoption of an explicit cost-plus acquisition process.
The justification for this was, as usual, national security.
This military budget has proven as effective in regulating the industrial sector as control over home finance has proven in regulating credit.
Together they confer virtual control over the economy as conventionally measured in terms of money GDP.
Credit, credit, and more credit
A few moments reflection on the institutional structure briefly outlined above makes clear the central importance of the federal credit in underwriting it.
Aged 22
Died from wounds caused by roadside bomb
The federal government underwrites the GSEs by extending to them a subsidised line of credit from the Treasury.   An additional indirect subsidy in the form of lower borrowing costs flows from the belief in the marketplace that this constitutes an implicit government guarantee of their solvency.
While this subject from time to time excites controversy, the truth is that the GSEs are not the only corporate entities benefiting from government support.
Since the failure of Continental Illinois in the early 80s, the government has informally made it clear that it stands behind the banking system.     This was made even more explicit with the bailout of Citibank in the early 90s and the implicit subsidy that the entire banking industry received as a result.
Nor are financial institutions the only ones to enjoy this kind of support.
Both Lockheed Martin and Chrysler have been effectively saved from insolvency by the taxpayer in the past, presumably due to their status as major defence contractors.
Such a system places a significant value premium on sheer size, if for no other reason than what the banking system cheerfully and disingenuously refers to as the “too-big-to-fail” doctrine.
But for industrial firms, too, there is significant value in having a contracting relationship with the Pentagon.
Not only is there the economic nirvana of cost-plus contracting but, if you are big enough, your fundamental business risk is underwritten for national security reasons.
Thus, there is a tendency for firms to migrate their businesses to military rather than purely civilian markets; today the Boeing Company is a perfect case study of this in action.
And a result is that civilian business in sector after sector has been driven into insolvency or into acquisition by the very national security industry that is ostensibly protecting them. [xiv]
The dynamics of cost-plus contracting are such that profits rise as costs rise. [xv]   This explains a great deal about the size of American military budgets, which have risen inexorably over the years even as military preparedness has fallen. [xvi]
But as we have seen, the losses in terms of lower productivity are felt across wide swaths of the economy as non-military contracting competition is squeezed out or acquired.
Obviously these losses in the real economy have to be financed, producing a higher demand for credit than would otherwise be the case.
Given declining productivity and a narrowing production base, it was inevitable that at some point net exports would become negative, a condition that the US entered in 1982 and which has intensified since.
Today the US net foreign debt [xvii] is on the order of $3,000 billion (30% of GDP) and is increasing at a rate of some $500 billion per year (5% of GDP). [xviii]
Concentrating capital
To finance such a large foreign borrowing requirement without currency depreciation requires both the ability to control as much of the national cash flow as possible as well as the collaboration of at least a few key foreign countries to achieve the same sort of control over international cash flows.
US attack helicopter
In the latter case, this takes the form, in part, of ever larger amounts of intervention on the part of those countries running dollar surpluses and strong net export positions to prevent the markets from driving the dollar lower.
In practice this means that they accumulate more and more dollars, which they in turn invest in US Treasury securities.
Foreigners now own some 45% of US Treasury debt outstanding.
In January this year the Bank of Japan intervened in the currency markets on behalf of Japan’s Ministry of Finance, purchasing a whopping $69 billion in that month alone, or more than 30% of its total intervention in 2003 which was itself a record year.
Current trends
All of this may seem to have little to do with the black budget, which most people associate with intelligence covert “black” operations.
The truth, however, is that the black budget cannot be understood in isolation without understanding the political, historical and economic context from which it springs.
One way of understanding this is by comparing trends.
For example, in 1950 the Dow Jones Industrials stood at 200, and today the Dow is at 10,600.
In 1950 narcotics trafficking was a relatively unknown crime in the United States.
Today it is endemic, and not only in cities but in smaller towns and rural communities as well.
In 1950 the US possessed most of the world’s gold and was the world’s biggest creditor.
Today it is the world’s biggest debtor.
In 1950 the US was a major exporter of industrial goods to the rest of the world.
On current trends the US is not self-sufficient in manufactured goods and will not even have a manufacturing industry worth the name by 2020.
Then And Now
1950 Dow Jones Industrials at 2002004 Dow Jones Industrials 10,600
1950 Drug trafficking virtually unknown 2004 Drug trafficking endemic
1950 US had the largest gold reserves2004 Gold reserves …
1950 US world’s biggest creditor2004 US world’s biggest debtor
1950 US industrial giant 2004 US no longer self-sufficient
Narcotics trafficking and the stock market
Is there a connection between these trends or are they random?
It may seem strange to think of a positive correlation between narcotics trafficking and the stock market, but consider: in the late 90s the US Department of Justice estimated that the proceeds of such trade entering the US banking system were between $500 and $1.000 billion annually, or more than 5-10% of GDP.
Now the proceeds of crime need to find a way into legitimate, that is legal, channels or they are worthless to the holders.
If one further imagines that the banking system earns a fee of 1% for handling this flow (rather low considering that money laundering is a seller’s market) then the profits for the banks from this activity are on the order of $5 to $10 billion.
Applying Citigroup’s current stock market multiple of 15 or so to this yields a market capitalisation of anywhere from $65 to $115 billion.
Load rocket onto attack U.S. helicopter
One can thus readily see the importance of the illegal drug trade to the financial services industry.
As it happens, this trade in illegal profits is concentrated in four states: Texas, New York, Florida and California, or four Federal Reserve districts: Dallas, New York, Atlanta and San Francisco.
Can anyone seriously suppose that the Fed is unaware of this if the Department of Justice is?
It, after all, handles the flows.
Narcotics trafficking and the National Interest
One reason for the Fed’s silence is that agencies of the government itself have been involved in drug trafficking for sixty years or more. [xix]
For the purposes of understanding the black budget, one needs to be aware of the American practice of opening the American consumer market for drugs to foreign exporters in order to pursue strategic objectives abroad.
The portability of narcotics and the huge price mark up from production to point of sale makes them a particularly useful source of financing for covert operations.
Even more important is that the proceeds from narcotics sales fall completely outside conventional, constitutional channels of funding.
This helps explain the ubiquitous presence of narcotics trafficking in zones of conflict around the world, from Columbia to Afghanistan. [xx]
Little examined, however, is the impact of narcotics trafficking on communities and economies at the point of sale.
Consider, for example, the impact on real estate markets and financial services.
Real estate is an attractive area in which to employ the cash surplus resulting from narcotics sales because it is, as an industry, entirely unregulated with respect to money laundering.
Because cash is an acceptable and in some places familiar method of payment, large sums can be disposed of easily and with little comment.
This can and does result in considerable distortion to local demand, and in turn provide fuel for real estate speculation and increased credit demand to finance it along with considerable opportunities for speculation and fraud. [xxi]
The Iran Contra episode during the 1980s contained all these elements; although many are familiar with the sale of arms to Iran to provide cash to finance CIA backed guerrillas in Nicaragua and death squads in El Salvador, less well-known is the systematic looting of local financial institutions and narcotics sales in the US.
Banking allows the application of leverage to the cash that is generated by “illegal” activity while simultaneously making it possible to launder the funds.
And when a bank fails, it is the shareholders, uninsured depositors and the taxpayer who pick up the bill.
The point here us that narcotics trafficking creates a milieu in which the incentives to engage in uneconomic activity are greater than those to engage in economic activity.
In a word, the profits from stealing are higher than the profits from playing by the rules.
What counts from a public policy point of view in the cartelised economy is the ability to control and concentrate cash flows of any kind.
To this end, it is less important that a bank fails than that the federal credit is available to make good the losses.
In doing so, the cash cost of losses is shifted, or socialised, to the national taxpayer base.
As long, therefore, as there are willing lenders to the Federal Government, the game can go on.
Technology gives an edge
Government’s power combined with advancing computer technology has over the last thirty years vastly simplified the task of managing the national — and by extension the international — cash flow.
Politically, the American victory in the Second World War meant that the entire West and its dependencies were co-opted into the International Monetary Fund (IMF) negotiated at Bretton Woods in 1944.
Forty-five years later, the collapse of the Soviet Union in 1989 meant that for the first time in history there was no alternative monetary or political choice in the international arena.
The British Empire had surrendered to the Americans precisely because America, represented an alternative to sterling, namely the dollar.
Today the US presides over a more or less fully closed global monetary system centred on the dollar.
In practice this means that those countries within the system must exchange real value in the form of manufactures and commodities with the US cartel in exchange for dollars, which are no more than an accounting entry created out of thin air.
This is analogous to a company with no assets exchanging watered stock for cash, and indeed this is no accident.
It was a favoured technique by which the JP Morgans of the nineteenth century successfully financed the consolidation of American industry and finance.
Today their heirs are busily dong the same thing, but on a global scale.
The diagram is a stylized representation of the relationship between the cartel and its allies outside the United States.   Flows are both concrete and abstract.
Concrete flows are manufactures, narcotics and commodities (mainly oil) inwards and arms outwards.
Abstract flows are money outwards in payment for concrete flows inwards, which profits are recycled inwards where they both finance the inflation of the Federal Credit as well as buying political influence.
Technology has transformed the possibilities for creative management in banking.
Its sheer number-crunching power has rendered the cost of iterative calculations to more or less zero.
This has enabled the creation of a new sector in the industry, the derivatives business, which is nothing more than the breaking down of financial instruments such as stocks and bonds into their constitutive parts.
Loads rocket onto attack U.S. helicopter
This has increased the power of the banks many-fold, thanks to the cooperation of the Federal Reserve and Congress, who have allowed the banks to not only self-regulate their derivatives portfolios and businesses but have enacted rules to force other banks to use derivatives to “control” risk.
In practice this has meant that the most profitable business of the banks has been moved off balance sheet, in effect creating a high level of secrecy in their business.
It also confers a huge advantage on the largest banks to whom the others have to come for their derivatives.
This has, in part, fuelled the manic consolidation in banking over the last twenty five years and has been applied with tremendous success internationally thanks to the imposition of the Basel Accords on money and banking which have forced other country’s financial institutions to either cooperate, which in practice has largely meant be acquired, or go out of business.
The banks’ tactics have been copied and refined by industry.
An excellent example of this is the case of Enron, nominally an industrial company engaged in the production and transport of petroleum and natural gas, but which was transformed into a highly leveraged financial operation with a huge off balance sheet business trading derivatives.
It secured a release from regulatory oversight by the time-tested method of purchasing lawmakers and by suborning its auditors.
This gave it the power to restate earnings, virtually at will, simply by changing the assumptions on future interest rates embedded in the options, swaps and futures contracts constituting its unregulated derivatives book.
Enron is a model also of the increasingly blurred distinction between the public and private sector.
It employed as many as twenty CIA officers.
One of its senior executives, Thomas White, was an army general before joining Enron and then left Enron to become Secretary of the Army.
Enron executives were intimately involved with Vice President Richard Cheney’s energy task force.
It is difficult to avoid concluding that Enron was anything other than a money-laundering operation employed in the interest of “National Security” on behalf of the cartel. [xxii]
The US has embarked on a costly global military adventure the outcome of which is anything but certain.
This marks the culmination of more than fifty years of nearly continuous overt and covert warfare.
In this it is supported by the most sophisticated financing apparatus in history, capable of mobilising the cash generated from a wide variety of activities both open and covert.
The price has been the progressive hollowing out of the American economy itself, and the progressive erosion of civil liberties and the rule of law.
The black budget is not the cause of this but the means.
(rearranged by TheWE.name — originally at beginning of page)
Introduction
The United States government has operated a secret budgeting and spending program for decades outside the framework of the American Constitution.   The institutional and political roots of this system of clandestine finance reach back to at least a century.
The turn of the 19th and 20th centuries saw the consolidation of American industry and banking under the control of a restrictive cartel that for all practical purposes assumed control of the economy.   The great magnates of American industry and finance in the late nineteenth century were superb practitioners of covert operations.
Carry rocket to U.S. attack helicopter
Witness to this fact are the institutions set up during the twentieth century through which their descendants maintain control.
This paper is a summary of the structure of the American political economy which fits the facts better than the official model.
Officially, American capitalism is characterised by democracy, opportunity, self-improvement, open and free markets, and constructive regulation for the public good, in short, happiness.
Under this construct America has never fought a war of aggression and harbours no designs to do so.
Its leaders have the nation’s interests at heart, and its politicians listen to their constituencies.
The truth is different.
Why the United States is so widely misunderstood is due in part to a controlled educational system and media.
As the system evolved over the decades, time lent it legitimacy spanning the political spectrum.
Gustavus Meyers, author of the seminal work History of the Great American Fortunes and no panegyrist, believed — following Marx as did many on the left — that the consolidation of American industry was inevitable and that the men who accomplished it were acting their part in a predetermined historical evolution.
Once monopoly control had been achieved, the proletariat would rise and its dictatorship would begin.
We shy away from such determinism; nothing happens but as a consequence of what men do and choose to do.
If Meyers were alive today, he would still be waiting.
Published in Scoop: Thursday, 26 August 2004
About the authors
Catherine Austin Fitts — http://www.solari.com is the founder of Solari, Inc and a member of the advisory board of Sanders Research Associates.
Ms. Fitts is a former managing director and member of the board of directors of Dillon Read & Co, Inc, a former Assistant Secretary of Housing-Federal Housing Commissioner in the first Bush Administration, and President of The Hamilton Securities Group, Inc.
She is a graduate of the University of Pennsylvania and The Wharton School.
Chris Sanders — http://www.sandersresearch.com is a principle of Sanders Research Associates in London.
Mr. Sanders has been a banker and asset manager for 21 years, and is a visiting professor in international finance at the School of Public Administration at the University of Göteburg in Sweden.
He has degrees from in political science from Duke University and Arabic literature from the University of Michigan.   He began his financial career as a private banker with Citibank in Saudi Arabia in 1979.
Since 1984, he has lived in London and worked in the international investment management industry.   He founded Sanders Research Associates in 1997.
Sanders Research Associates Ltd. provides international strategic planning and risk management services to both corporate and private clients.   SRA also publishes a webzine available by subscription.   Visit http://www.sandersresearch.com to get a good feel for the real deal.
FOOTNOTES:
Loads rocket onto attack U.S. helicopter
[i] Remark attributed to a Wall Street broker in 1895 describing J.P. Morgan.   Gustavus Meyers (2002). History of the Great American Fortunes. University Press of the Pacific, Volume 3, p.225.
Morgan, regularly portrayed as a patriot, was at the time deeply engrossed in relieving the government of its gold reserve.
[ii] Lockheed’s contract was recently terminated by HUD — an action that the company is contesting.
[iii] Dyncorp was appointed as well to run the Department of Justice’s asset forfeiture program in 1993, winning a $60 million five year contract to do so.
[iv] For an insider’s account of the problems at HUD, see Catherine Austin Fitts, The Myth of the Rule of Law at www.sandersresearch.com.
[v] See http://www.npr.org/programs/npc/2001/010423.dwalker.html

[vi] See Dan Briody (2003), The Iron Triangle, Inside the Secret World of the Carlyle Group.   John Wiley & Sons: Hoboken.   ISBN 0-471-28108-5.

Carlyle’s phenomenal success as an investment firm owes a great deal to its ability to lure former political figures and senior industry executives onto its executive team and advisory board.
Examples are former US President George H.W. Bush and former British Prime Minister John Major; Frank Carlucci, former deputy director of the CIA and former Secretary of Defense; James Baker III, former Secretary of State; Richard Darman former director of the Office of Management and Budget; Colin Powell, former Chairman of the Joint Chiefs of Staff and present Secretary of State (a Carlucci protégé); William Kennard, former head of the Federal Communications Commission; Arthur Levitt, former chairman of the Securities and Exchange Commission; Park Tae Joon, former Prime Minister of the Republic of Korea, and Louis Gerstner, former chairman of IBM.
Of some interest as well has been the involvement of the Bin Laden family as major private investors in the Carlyle Group, represented by Shafiq Bin Laden, a brother of Osama Bin Laden.
Brother and brother's six year old daughter Zahraa in coffin
Killed by US attack helicopter
Sleeping on the roof of their house in 3.00 AM raid
[vii] For a brilliant history of the rise of America’s elite and its disenchantment with democracy and free markets, see Sven Beckert (2001).   The Monied Metropolis. Cambridge University Press: Cambridge. ISBN 0521790395.
[viii] Gustavus Meyers (2002).   History of the Great American Fortunes, Volume 3.   University Press of the Pacific: Honolulu.   (Reprint of the 1910 edition), p.225.
[ix] See Walter Karp ((1979).   The Politics of War.   Harper & Row: New York) for an analysis of the move to war in the case of both the war with Spain and WWI.
Of particular interest here is Woodrow Wilson’s extension of a domestic security apparatus ostensibly to deal with a supposed foreign threat during war time.
In fact, the draconian legislation and executive orders that created the FBI as a new appendage of the Department of Justice was hardly used during wartime, but were deployed after the war against domestic political opponents in the labour unions and the Progressive Movement.
[x] See Beckert, op. cit.
[xi] See Tim Weiner ((1990) Blank Check: The Pentagon’s Black Budget, Warner Publishing) and Sterling and Peggy Seagrave ((2003) Gold Warriors, Verso Press: New York).   There is ample evidence that these funds were invested and have grown substantially in the years since, and are still used to further political and personal agendas.
[xii] Seagrave, Sterling and Peggy, op. cit., pp 119-120.
The use of National Security as a rationale for acts that would otherwise be considered unconstitutional and illegal has become embedded in the America legal system, a curious inversion of original intent.
Franklin Roosevelt declared a national economic emergency in the 30s which was used to justify extraordinary measures by the executive, including the abrogation of the government’s obligations to redeem government debt I gold.
The Supreme Court refused to hear a case contesting the administration’s action.
More recently, the government intervened in a labour dispute between the International Longshoremen Workers Union and the Pacific Maritime Association, citing the Patriot Act of 2001 and equating the union’s position to economic “terrorism”.
In fact, rather than the union striking, the PMA locked the union out of the ports.
Government intervention was in the form of the direct intercession of Tom Ridge, head of the Department of Homeland Security to force the union to accede to PMA demands.
[xiii] Notably, this is the same year in which the Exchange Stabilisation Fund was set up.
[xiv] In a similar fashion, manufacturing firms have migrated into finance, finding it easier to make money by arbitrage than by competition.
Thus General Motors manufactures cars as collateral for its leasing business; similarly GE or Boeing make as much or more money out of financing the purchase of their products than from making them.
[xv] This is to say nothing of the wholesale transfer gratis of research undertaken at the taxpayer’s expense; for example nuclear technology transferred to the power industry.
[xvi] See Franklin Spinney, The Defense Death Spiral, www.d-n-i.net for an in depth analysis of the micro economics of military procurement and its impact on force readiness.
Father and six year old sister Zahraa killed by US
Killed by US attack helicopter
Sleeping on the roof of their house in 3.00 AM US raid
[xvii] This is the cumulative borrowing from abroad to finance net exports (or the trade deficit if you prefer).
[xviii] The annual rate of increase is the current account deficit.
[xix] See Alfred McCoy (1991).   The Politics of Heroin in South East Asia.   2nd ed. Lawrence Hill Books: Brooklyn. ISBN 1556521251.
McCoy documents thoroughly the genesis of US wartime cooperation with the mafia in Italy during WWII and its post-war toleration of narcotics trafficking in the US as a quid pro quo for the cooperation of Corsican and Italian organised crime in its covert war against the Communist Party in France and Italy.
In Asia, it supported the opium and heroin business of a Chinese nationalist army in Burma after the Chinese Revolution in 1948.
In Indochina the US supplanted French colonial rule after the French defeat at Dien Bien Phu, inheriting in the process French covert ties to opium production amongst the Hmong hill tribes.
With overt American intervention in 1965 the importance of this traffic grew enormously, financing an escalation of the ground war in Laos.
See also Seagrave, Sterling and Peggy, op. cit.
There is ample international precedent for American involvement in narcotics trafficking, beginning with the British organisation of opium production in Bengal two centuries ago and of its illegal distribution into China.
For that matter, Japan turned Manchuria under its occupation into the biggest producer of opium and refined opiates in the world, the cash flow from which proved to be immensely useful to the operations of Japan’s Manchurian Army and intelligence services.
[xx] Peter Dale Scott (2003).   Drugs, Oil and War: the United States in Afghanistan, Columbia and Indochina.   Rowman & Littlefield Pub: Oxford.   ISBN 0742525228.
[xxi] See Roger Morris ((1999) Partners in Power: The Clintons and Their America, Regnery Publishing) for a case study of the interaction of covert operations, narcotics trafficking, financial markets and politics in Arkansas during the governorship of Bill Clinton.
[xxii] See Catherine Austin Fitts and Daniel Armstrong, The Real Deal About Enron at www.sandersresearch.com.
Copyright (c) 2004 Scoop Media
"An imminent response is not likely!"
It's not true of course.
Those black ops boys and girls — you know the one's funded by your taxpaying dollars....
The unaccounted billions passed through the US budget by authorization of your Congress person.
The US black budget that starts it all — that pays for the growth of the cells.
The billions perhaps trillions missing — events coming from the cells....
Even drug money traded out of Columbia and Afghanistan....
They have more than enough to attack America.
Have they done it before?
Is red the color of blood?
Over time I was increasingly shocked by the speed and ease with which many intelligent and seemingly competent members of the CFR [ Council on Foreign Relations ] appeared to eagerly justify policies and actions that supported growing corruption.
The regularity with which many CFR members would protect insiders from accountability regarding another appalling fraud surprised even me.
Many of them seemed delighted with the advantages of being an insider while being entirely indifferent to the extraordinary cost to all citizens of having our lives, health and resources drained to increase insider wealth in a manner that violated the most basic principles of fiduciary obligation and respect for the law.
In short, the CFR was operating in a win-lose economic paradigm that centralized economic and political power.
I was trying to find a way for us to shift to a win-win economic paradigm that was — by its nature — decentralizing.
Catherine Austin Fitts — Dillon Reid and Co. Inc. And the Aristocracy of Stock Profits
 
The reader can appreciate why Wall Street would welcome someone as accommodating as Gorelick at Fannie Mae.
This was a period when the profits rolled in from engineering the most spectacular growth in mortgage debt in U.S. history.
As one real estate broker said, “They have turned our homes into ATM machines.”
Fannie Mae has been a leading player in centralizing control of the mortgage markets into Washington D.C. and Wall Street.
And that means as people were rounded up and shipped to prison as part of Operation Safe Home, Fannie was right behind to finance the gentrification of neighborhoods.
And that is before we ask questions about the extent to which the estimated annual financial flows of $500 billion–$1 trillion money laundering through the U.S. financial system or money missing from the US government are reinvested into Fannie Mae securities.
Catherine Austin Fitts — Dillon Reid and Co. Inc. And the Aristocracy of Stock Profits
James Forrestal
James Forrestal’s oil portrait always hung prominently in one of the private Dillon Read dining rooms for the eleven years that I worked at the firm. Forrestal, a highly regarded Dillon partner and President of the firm, had gone to Washington, D.C. in 1940 to lead the Navy during WWII and then played a critical role in creating the National Security Act of 1947.

He then became Secretary of War (later termed Secretary of Defense) in September 1947 and served until March 28, 1949.

Given the central banking-warfare investment model that rules our planet, it was appropriate that Dillon 
partners at various times lead both the Treasury Department and the Defense Department.

Shortly after resigning from government, Forrestal died falling out of a window of the Bethesda Naval Hospital outside of Washington, D.C. on May 22, 1949.

There is some controversy around the official explanation of his death — ruled a suicide.

Some insist he had a nervous breakdown. Some say that he was opposed to the creation of the state of Israel.

Others say that he argued for transparency and accountability in government, and against the provisions instituted at this time to create a secrete “black budget.”

He lost and was pretty upset about it — and the loss was a violent one.

Since the professional killers who operate inside the Washington beltway have numerous techniques to get perfectly sane people to kill themselves, I am not sure it makes a big difference.

Approximately a month later, the CIA Act of 1949 was passed.

The Act created the CIA and endowed it with the statutory authority that became one of the chief components of financing the “black” budget — the power to claw monies from other agencies for the benefit of secretly funding the intelligence communities and their corporate contractors.

This was to turn out to be a devastating development for the forces of transparency, without which there can be no rule of law, free markets or democracy.

Catherine Austin Fitts — Dillon Reid and Co. Inc. And the Aristocracy of Stock Profits

Photo: Wikipedia     

President Franklin Delano Roosevelt appointed Forrestal as an administrative assistant on June 22, 1940, then nominated him as Undersecretary of the Navy six weeks later. In the latter post, Forrestal would prove to be very effective at mobilizing industrial production for the war effort.
He became Secretary of the Navy on May 19, 1944, following the death of his immediate supervisor Frank Knox from a heart attack. Forrestal then led the Navy through the closing year of the war and the demobilization that followed.   What might have been his greatest legacy as Navy Secretary was an attempt that came to nought.   He, along with Secretary of War Henry Stimson and Under Secretary of State Joseph Grew, in the early months of 1945, strongly advocated a softer policy toward Japan that would permit a negotiated face-saving surrender.   His primary concern was "the menace of Russian Communism and its attraction for decimated, destabilized societies in Europe and Asia", and, therefore, keeping the Soviet Union out of the war with Japan.   Had his advice been followed, Japan might well have surrendered before August 1945, precluding the use of the atomic bomb on Hiroshima and Nagasaki.   So strongly did he feel about this matter that he cultivated negotiation attempts that bordered closely on insubordination toward the President.
Forrestal opposed the unification of the services, but even so helped develop the National Security Act of 1947 that created the National Military Establishment (the Department of Defense was not created as such until August 1949), and with the former Secretary of War Robert P. Patterson retiring to private life, Forrestal was the next choice.
His 18 months at Defense came at an exceptionally difficult time for the U.S. military establishment:   Communist governments came to power in Czechoslovakia and China; West Berlin was blockaded, necessitating the Berlin Airlift to keep it going; the war between the Arab states and Israel after the establishment of Israel in Palestine; and negotiations were going on for the formation of NATO.   His reign was also hampered by intense interservice rivalries.
In addition, President Harry Truman constrained military budgets billions of dollars below what the services were requesting, putting Forrestal in the middle of the tug-of-war.   Forrestal was also becoming more and more worried about the Soviet threat.   Internationally, the takeover by the Communists of Eastern Europe, their threats to the governments of Greece, Italy, and France, their impending takeover of China, and the invasion of South Korea by North Korea would demonstrate the legitimacy of his concerns on the international front as well.
Photo and description: Wikipedia
James Forrestal’s oil portrait always hung prominently in one of the private Dillon Read dining rooms for the eleven years that I worked at the firm. Forrestal, a highly regarded Dillon partner and President of the firm, had gone to Washington, D.C. in 1940 to lead the Navy during WWII and then played a critical role in creating the National Security Act of 1947.
He then became Secretary of War (later termed Secretary of Defense) in September 1947 and served until March 28, 1949.
Given the central banking-warfare investment model that rules our planet, it was appropriate that Dillon partners at various times lead both the Treasury Department and the Defense Department.
Shortly after resigning from government, Forrestal died falling out of a window of the Bethesda Naval Hospital outside of Washington, D.C. on May 22, 1949.
There is some controversy around the official explanation of his death — ruled a suicide.
Some insist he had a nervous breakdown. Some say that he was opposed to the creation of the state of Israel.
Others say that he argued for transparency and accountability in government, and against the provisions instituted at this time to create a secrete “black budget.”
He lost and was pretty upset about it — and the loss was a violent one.
Since the professional killers who operate inside the Washington beltway have numerous techniques to get perfectly sane people to kill themselves, I am not sure it makes a big difference.
Approximately a month later, the CIA Act of 1949 was passed.
The Act created the CIA and endowed it with the statutory authority that became one of the chief components of financing the “black” budget — the power to claw monies from other agencies for the benefit of secretly funding the intelligence communities and their corporate contractors.
This was to turn out to be a devastating development for the forces of transparency, without which there can be no rule of law, free markets or democracy.
Catherine Austin Fitts — Dillon Reid and Co. Inc. And the Aristocracy of Stock Profits
What Briody does not mention is allegations regarding Brown & Root's involvement in narcotics trafficking. Former LAPD narcotics investigator Mike Ruppert once described his break up with fiance Teddy — an agent dealing narcotics and weapons for the CIA while working with Brown & Root, as follows:
“Arriving in New Orleans in early July, 1977 I found her living in an apartment across the river in Gretna. Equipped with scrambler phones, night vision devices and working from sealed communiqués delivered by naval and air force personnel from nearby Belle Chasse Naval Air Station, Teddy was involved in something truly ugly.
She was arranging for large quantities of weapons to be loaded onto ships leaving for Iran.
At the same time she was working with Mafia associates of New Orleans Mafia boss Carlos Marcello to coordinate the movement of service boats that were bringing large quantities of heroin into the city.
The boats arrived at Marcello controlled docks, unmolested by even the New Orleans police she introduced me to, along with divers, military men, former Green Berets and CIA personnel.
“The service boats were retrieving the heroin from oil rigs in the Gulf of Mexico, oil rigs in international waters, oil rigs built and serviced by Brown and Root.
The guns that Teddy monitored, apparently Vietnam era surplus AK 47s and M16s, were being loaded onto ships also owned or leased by Brown and Root.
And more than once during the eight days I spent in New Orleans I met and ate at restaurants with Brown and Root employees who were boarding those ships and leaving for Iran within days.
Once, while leaving a bar and apparently having asked the wrong question, I was shot at in an attempt to scare me off.”
Source: "Halliburton’s Brown and Root is One of the Major Components of the Bush-Cheney Drug Empire" by Michael Ruppert, From the Wilderness
Catherine Austin Fitts — Dillon Reid and Co. Inc. And the Aristocracy of Stock Profits
The Clinton Administration took the groundwork laid by Nixon, Reagan and Bush and embraced and blossomed the expansion and promotion of federal support for police, enforcement and the War on Drugs with a passion that was hard to understand unless and until you realized that the American financial system was deeply dependent on attracting an estimated $500 billion-$1 trillion of annual money laundering.
Globalizing corporations and deepening deficits and housing bubbles required attracting vast amounts of capital.
Attracting capital also required making the world safe for the reinvestment of the profits of organized crime and the war machine.
Without growing organized crime and military activities through government budgets and contracts, the economy would stop centralizing.
The Clinton Administration was to govern a doubling of the federal prison population.
Catherine Austin Fitts — Dillon Reid and Co. Inc. And the Aristocracy of Stock Profits
Classified Spending On the Rise
By Dan Morgan
Washington Post Staff Writer
Wednesday, August 27, 2003; Page A23
"Black," or classified, programs requested in President Bush's 2004 defense budget are at the highest level since 1988, according to a report prepared by the independent Center for Strategic and Budgetary Assessments.
The center concluded that classified spending next fiscal year will reach about $23.2 billion of the Pentagon's total request for procurement and research funding.
When adjusted for inflation, that is the largest dollar figure since the peak reached during President Ronald Reagan's defense buildup 16 years ago.
The amount in 1988 was $19.7 billion, or $26.7 billion if adjusted for inflation, according to the center.
"It's puzzling. It sets the mind to wondering where the money's going and what sort of politically controversial things the administration is doing because they're not telling anybody," said John E. Pike, director of GlobalSecurity.org, a research group in Alexandria that has been critical of the administration's defense priorities.
Pike said part of the surge in the classified budget probably can be explained by increases for the Central Intelligence Agency's covert action programs, which are central to the war on terrorism.
Traditionally, Pike said, much of the funding for the CIA is hidden in Air Force weapons procurement accounts.
But unlike the 1980s, when it was widely known that the 'black' budget was going to the development of stealth aircraft such as the B-2 bomber and F-117 fighter, the uses of the classified accounts today are far murkier, Pike said.
The Center for Strategic and Budgetary Assessments is a Washington research group that analyzes many aspects of the defense budget.
Steven Kosiak, who prepared the report on classified spending, said he reached his conclusions by comparing sums requested for 'open,' or nonclassified, programs with the total Defense Department request for fiscal 2004.
Some black spending in the Pentagon budget is designated for code-named programs such as the Army's "Tractor Rose" and the Navy's "Retract Larch."
But sources said some names may be accounting fictions that do not stand for actual programs.
Other classified spending is accounted for under such bland headings as "special activities."
Officials at the Pentagon and in Congress declined to comment on the center's report, which was compiled earlier this summer.
Key congressional defense committees will meet in the next several weeks to resolve differences over the 2004 Pentagon spending plan, including those involving classified programs.
According to the Kosiak analysis, the Air Force's classified weapons procurement budget has jumped from $7 billion in 2001 to almost $11 billion as requested for 2004.
In dollar terms, total classified spending in the Pentagon budget request has almost doubled since the mid-1990s, according to tables provided by Kosiak.
Kosiak said in his report that performance in the classified programs has been mixed.
He noted that highly successful weapons systems such as the F-117 and the B-2 were initially developed within the classified budget.
But so was the Navy's A-12 medium attack plane, which was canceled in 1991 after a series of technical problems and cost increases.
After it was canceled, manufacturers complained that secrecy in the program kept them from acquiring critical data needed to head off some of the problems.
"Restrictions placed on access to classified funding have meant that the Defense Department and Congress typically exercise less oversight over classified programs than unclassified ones," Kosiak wrote.
In the case of the new defense budget, it is anybody's guess where most of the classified money is going, Pike said.
But he said it is a good bet that some of it is going to programs that the administration is known to strongly favor, such as missile defense and the development of hypersonic planes that can fly beyond Earth's atmosphere.
"This is an administration that likes to play I've got a secret," he said.
"The growth of the classified budget appears to be part of a larger pattern of this administration being secretive."
© 2003 The Washington Post Company
In 2000 the US merchandise trade deficit with China became larger than the chronic US trade deficit with Japan.
By 2003 the US trade deficit with China was almost twice as large as the US deficit with Japan: $124 billion versus $66 billion.
2004 the US trade deficit with China was $162 billion, a 30.9% increase.
Published on Monday, July 4, 2005 by CommonDreams.org
by Sheldon Drobny
Justice O'Connor's decision in Bush v. Gore led to the current Bush administration's execution of war crimes and atrocities in Iraq, Afghanistan, and other places in the Middle East that are as egregious as those committed by the Third Reich and other evil governments in human history.
US destroyed Fallujah as it tries to destroy the rest of Iraq
The lesson is clear.
Those people who may be honorable and distinguished in their chosen profession should always make decisions based upon good rather than evil no matter where their nominal allegiances may rest.
Justice O'Connor was quoted to have said something to the affect that she abhorred the thought of Bush losing the 2000 election to Gore.
She was known to have wanted to retire after the 2000 election for same reason she is now retiring.
She wanted to spend more time with her sick husband.
Unfortunately, she tarnished her distinguished career with the deciding vote in Bush v. Gore by going along with the partisan majority of the Court to interfere with a democratic election that she and the majority feared would be lost in an honest recount.
She dishonored herself and the Supreme Court by succumbing to party allegiances and not The Constitution to which she swore to uphold.
And the constitutional argument she and the majority used to justify their decision was the Equal Protection Clause.
The Equal Protection Clause was the ultimate basis for the decision, but the majority essentially admitted (what was obvious in any event) that it was not basing its conclusion on any general view of what equal protection requires.
The decision in Bush v Gore was not dictated by the law in any sense—either the law found through research, or the law as reflected in the kind of intuitive sense that comes from immersion in the legal culture.
The Equal Protection clause is generally used in matters concerning civil rights.
The majority ignored their basic conservative views supporting federalism and states' rights in order to justify their decision.
History will haunt these justices down for their utter lack of justice and the hypocrisy associated with this decision.
Sheldon Drobny is Co-founder of Air America Radio.
Unspeakable grief and horror
                        ...and the circus of deception continues...
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Circus of Torture   2003 — now
He says, "You are quite mad, Kewe"
And of course I am.
Why, I don't believe any of it — not the bloody body, not the bloody mind, not even the bloody Universe, or is it bloody multiverse.
"It's all illusion," I say.   "Don't you know, my lad, my lassie.   The game!   The game, me girl, me boy!   Takes on interest, don't you know.   T'is me sport, till doest find a better!"
Pssssst — but all this stuff is happening down here
Let's change it!
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Mother her two babies killed by US
More than Fifteen million
US dollars given by US taxpayers to Israel each day for their military use
4 billion US dollars per year
Nanci Pelosi — U.S. House Democratic leader — Congresswoman California, 8th District
Speaking at the AIPAC agenda   May 26, 2005
There are those who contend that the Israeli-Palestinian conflict is all about Israel's occupation of the West Bank and Gaza.   This is absolute nonsense.
In truth, the history of the conflict is not over occupation, and never has been:  it is over the fundamental right of Israel to exist.
The greatest threat to Israel's right to exist, with the prospect of devastating violence, now comes from Iran.
For too long, leaders of both political parties in the United States have not done nearly enough to confront the Russians and the Chinese, who have supplied Iran as it has plowed ahead with its nuclear and missile technology....
In the words of Isaiah, we will make ourselves to Israel 'as hiding places from the winds and shelters from the tempests; as rivers of water in dry places; as shadows of a great rock in a weary land.'
Pelosi
 
 
US servicemen
The stovepipe — instructions [were sent] from the Top Man [Saddam]—“give them everything.”
       Civilian Death Toll in Iraq May Top 1 Million     
            —  ORB, a British polling agency, September 2007          
China EU countries Russia Japan lending money to US to the tune of $2 billion (2,000,000,000.00) daily
— Bleeding Bush strategy
US Congress debt
Am I going insane?
Kennedy slams CIA chief        
  Iraq analysis wildly inconsistent        
     Senator we did not clear the document
Trailers
Cheney: Assessment done by department of defense
Iraq analysis wildly inconsistent
Flames of war spread into Pakistan
Murder, though it hath no tongue.
 
 
 
 
Faith Fippinger
The Book of Merlyn
The beating of the drum
 
 
 
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