100 Years in Iraq and Afghanistan - Making It So

AEY, Inc - awarded $48.7M from a $298M contract in 2007, U.S. Army - weaponry for Afghani forces.

They may still have contracts in Iraq.

On Friday, a federal grand jury indicted arms dealer AEY and four company officials on charges, among others, that they committed procurement fraud and lied to U.S. officials about the origin of Chinese manufactured ammunition supplied by the company to Afghan forces in Afghanistan pursuant to a U.S. Government contract. Section 126.1 of the International Traffic in Arms Regulations provides that it is the policy of the United States to deny approvals for exports and imports of defense articles originating in China.

Today, Henry Waxman, the Chairman of the House Committee on Oversight and Government Reform, released a letter detailing evidence the Chairman said suggested that John L. Withers, II, the U.S. ambassador to Albania, was involved in efforts to conceal the origin of the Chinese ammunition. The Chinese-made ammunition was being sold to AEY by the Albanian Ministry of Defense through the Military Export Import Company of Albania (MEICO). -- ExportLaw Blog

MEICO is the Albanian piece of the Albanian-Rwandan-Israeli-South-African-United-Kingdom weaponizing of Africa. This has fueled and enabled the genocides and rapes and systematic destruction of the civilian population of Africa.

Efraim Diveroli's AEY Inc., his father Michael Diveroli's Worldwide Tactical, and his uncle Bar-Kochba Botach's Botach Tactical -- are listed in federal contractor databases as "disadvantaged" or "minority owned." Their claim is that they are Hasidic Jews, but in fact, they merely converted for a brief time, and do not follow the proscriptions and practices of the Hasidic order.

The Bountiful, Utah, owner of Vector Arms, Ralph G. Merrill, was also arrested, having provided some management advice to AEY.

Note that the eastern European countries that AEY had obtained ammunition from for the Afghani forces, had offered to DONATE it to Afghanistan: in December 2007 the President of Albania traveled to Iraq and made a personal offer to David Petraeus and Ryan Crocker to provide the ammo free of charge.

See more of Matthew Blake's coverage of this at the Washington Independent -

The Pentagon found earlier this year that AEY had sent crates of rifle cartridges to Afghanistan that had "disintegrated from extensive termite damage." Some of the ammunition was more than 60 years old. Asked by the Pentagon what happened, an unidentified AEY official admitted that he had delivered "shit ammo" to Afghanistan security forces.

AEY was the principle weapons supplier for security forces fighting Al Qaeda and the Taliban. -- AEY Official Admitted Termite-Damaged Ammo Was No Good

Also note Lindsay Beyerstein's historical coverage of AEY, Botach, and Kley Zion.



Summing up: The Pentagon has awarded weapons contracts to a firm, which is, more than likely involved in the weaponizing of Africa, and has provided inferior weaponry and ammo to the native Afghani forces fighting the "former" CIA assets, al Qaeda, and in all likelihood, still have contracts in Iraq, probably supplying the native Iraqi forces, in their fight against those "former" CIA assets.

How better to ensure that your forces will be needed ... for the next 100 years ... than by providing the worst equipment and ammo to the native troops?



ed.: Two Americans killed 3 years ago in Iraq - Dale Stoffel/Wye Oak Technology and Joseph Wemple/CLI - weapons "refurbishment", repurposing, and .... "coal and mineral processing". Is there another "IranContra" effort going on between the DRC and Iraq? Coltan for weapons?

Note - Coltan was a major cargo for Viktor Bout. Bout flew thousands of flights of weapons supplies into Iraq.

How the Bush Administration Uses Intel and Justice Resources

Martin Bright has a good post on his blog on the New Statesman (UK) on a bit of history in the runup to the Iraq War -- The woman who nearly stopped the war. Some interesting history on the use of intelligence to pursue a policy decided upon.

And ... guess who sent the FBI a letter about Spitzer and alleged escapades in Miami? The same Roger Stone responsible for shutting down the 2000 presidential election recount effort in Miami-Dade County. Amy Driscoll has the story on the Miami Herald (Mar 21, 2008, Beach man told FBI of alleged Spitzer sexscapades).

Predatory Lenders' Partner in Crime, How the Bush Administration Stopped the States From Stepping In to Help Consumers by Eliot Spitzer (February 14, 2008, Washington Post).

Interesting use of Justice Department resources to avenge themselves on Spitzer.

Germany's Role in the Iraq War Faulty Intelligence

Spiegel (Germany) has 3 interesting articles from this weekend - How German Intelligence Helped Justify the US Invasion of Iraq - The Real Story of 'Curveball', 'The Germans Share in the Responsibility' - Spiegel interview with Lawrence Wilkerson, and German Intelligence Was 'Dishonest, Unprofessional and Irresponsible' - Spiegel interview with David Kay.

IranContra Redux

IranContra - as was practiced in the 1980s - had an essential element, the drug trade, which was documented by Gary Webb.

IranContra 2.0 - as is practiced now - appears to have a toe in same said niche. See Bill Conroy's Special to The Narco News Bulletin (March 11, 2008, U.S. Cocaine-Plane Invasion Spooking Latin America, Trail of Evidence Points to Major Covert Operation Targeting Venezuela).

In IranContra 1.0, the US sold weaponry to Iran for the Iraq-Iran War (the US also sold weaponry to Saddam Hussein for that war), .... after the Islamic Revolution in Iran in which the US embassy staff were held hostage. Within months of Reagan taking office, the Iranians experienced a miraculous turnaround and began winning battles. The weapons shipments to them may have been payback for "October Surprise" (ceasing all communication with the Carter Administration and not releasing the hostages until after Reagan's inauguration). Adelino Amaro da Costa- defense minister of Portugal objected to the shipments of weaponry from and through Portugal, destined for Iran - was assassinated immediately after going public and threatening to elevate it to the UN. See Paul Mitchell's Portugal: inquiry concludes bomb killed Prime Minister Carneiro in 1980 (10 January 2005) on the World Socialist Website:

A new parliamentary inquiry into the deaths of the Portuguese prime minister and defence minister in 1980 has concluded they were the victims of a bomb blast on board their aircraft....

...In December 2004, Nuno Melo, president of the latest commission of inquiry, announced, “We have evidence of an explosive device placed under the floor of the pilot’s cabin, which had sufficient strength to damage control cables and injure the pilots.” Melo explained that chemical analysis of the plane wreckage demonstrated the presence of potassium and lead, which can be used to make a bomb. “It seems sufficiently clear to me that the Cessna 421A crashed at Camarate during the night of December 4, 1980 due to sabotage,” Melo stated.

Melo also suggested that a possible motive for the assassinations was illegal gun running from Portugal to Iran during the 1980 Iranian hostage crisis. The seizure of 52 hostages in the US Embassy in Teheran was the culmination of the Iranian Revolution of 1978/79. Following the overthrow of the last government appointed by the Shah of Iran, Ayatollah Ruhollah Khomeini assumed power. The inability of President Carter to secure the hostages’ release contributed to his unpopularity and helped spell defeat for Ronald Reagan in the 1980 election.

According to the commission, da Costa had cancelled a shipment of guns from Portugal to Iran which then resumed five days after his death. More guns were sent from Portugal to Iran on January 22, 1981—two days after President Reagan’s inaugural speech, during which he announced the release of the hostages.

Other evidence presented to the commission alleges that the guns, re-labelled as farm machinery, were shipped with the help of Army Marshall Costa Gomes, who was Portuguese president from 1974-1976, and Admiral Pinheiro de Azevedo, who was prime minister in 1975. Two former members of the right-wing terrorist group Commandos in Defence of Western Civilisation (Codeco) admitted they knew who had planted the bomb.

The theory that the ministers were assassinated to cover up a secret US arms deal with Iran involving shipments via Portugal has been pursued by Ricardo Sa Fernandez, the lawyer representing the relatives of the crash victims, who is also a former Portuguese finance minister.

In his book, The Crime of Camarate, Sa Fernandez claims the intended victim of the plane crash was actually da Costa. He says da Costa had discovered documents showing that Portuguese army officers secretly helped send arms to Iran in a deal between officials linked to 1980 presidential and vice-presidential candidates Reagan and George Bush Senior, and intended to raise the issue at the United Nations Security Council....

IranContra 1.0 involved selling weaponry to a nation who sanctioned the kidnapping of US personnel (in Tehran and Beirut) ... supposedly our enemies ... and laundering monies through the Savings & Loans ... and buying cocaine from Colombians and distributing it to gangs in major US cities ... in order to support the Contras in Nicaragua ... and negotiate the return of the Beirut hostages (CIA's station chief in Beirut, William Buckley, & others).

We've already identified the 'mortgage industry' as being a good candidate for providing the laundering end of IranContra 2.0. If the same said operation were being executed now, exactly what 'militias' are being trained and supported by the CIA? In the 1980s, it was the Contras, with the 'mujihadeen' in Afghanistan probably also benefitting from a drug-profits slush fund.

What militias seem to have a steady supply of weaponry nowadays? The scale of this operation may not be just for Palestinian civil war.

Perhaps the question will bring it all home when its phrased ... what INSURGENTS seem to have a steady supply of weaponry nowadays? ... Iraq, Afghanistan, and as of lately, Pakistan. Note that particular Baluchs (traditional opposition to the Pakistani government) have reported being trained by both US & UK military and intelligence officials.

What is the ostensible justification for continued US presence in those nations? The Insurgencies and the instability they have brought for Iraq and Afghanistan.

What if there were no insurgency? What if someone threw a war and nobody came to fight? Who was supplying personnel and funds to the insurgency in Iraq? Our old friends from the 'funding the mujihadeen' days ... the Saudis.

Cleanup has already begun ... Viktor Bout was arrested and extradiction is being pursued by the US (from Thailand, "suspicion of attempting to ship arms to American agents who were posing as Farc rebels in Colombia"), and this was supposedly engineered by DEA unbeknownst to the CIA. Uh-huh. Sounds like someone from the CIA dropped a dime on the merchant of death.

Ciara Durkin had seen / discovered something happening at the Bagram Air Base right about the time its airport was upgraded to accommodate C-5's, which enabled the bypassing of all CENTCOM refueling bases - something so out of the norm that she warned her family to investigate, in the event of her untimely death. Had she discovered the weapons and/or the heroin drugs end of IranContra 2.0? She was killed - execution-style - shot to the head - on the secure Bagram Base.

Heroin and/or poppies from Afghanistan, for eventual heroin distribution into the former Soviet Union, Europe and the UK via the CIA's creature in the Balkans - the Kosovars; cocaine runs to the U.S. from Colombia and Venezuela; laundering the cash through the mortgage industry; supplying weapons to insurgencies in at least 3 nations. Seymour Hersch identified one of the operations - The Redirection, (March 5, 2007).

What does this mean? We're funding and supplying folks to fight our troops?

I believe that's called treason in a time of war. Its not the first foray into that for the Bush family (see Ben Aris and Duncan Campbell's How Bush's grandfather helped Hitler's rise to power on The Guardian (UK), and Webster Tarpley's work).

A Corporate State of Mind and Eco-Terrorism

Reuters (March 11, 2008, Four indicted in 1999 U.S. eco-terrorism arson) and the Associated Press (March 11, 2008, 4 Charged in MSU 'Domestic Terrorism' Fire) and the London Times (March 11, 2008, Eco-terrorists top the FBI's threat list after wave of arson attacks) have stories today on the indictment of 4 individuals on arson charges (charges of arson, aggravated arson, and conspiracy to commit arson). Chris Ayres on the Times begins ominously ...

... the Earth Liberation Front - is described as a decentralised al-Qaeda-style network and America's No 1 domestic terrorism threat...

They're labeled domestic terrorists for burning buildings ... where no one was injured or died.


And the corporations who've endangered the health of nine million people in the Great Lakes region - who may face elevated health risks from being exposed to dioxin, PCBs, pesticides, lead, mercury, or six other hazardous pollutants (CARCINOGENS, ENDOCRINE DISRUPTORS) - are protected by the USG.

Researchers found low birth weights, elevated rates of infant mortality and premature births, and elevated death rates from breast cancer, colon cancer, and lung cancer.

People are dying from the pollution - infants and adults alike. And the corporations are NOT labeled domestic terrorists, nor even criminals, and the report documenting this crime against humanity isn't being released by the US government. Life in the nation of government of the corporation, by the corporation and for the corporation places little value on the lives of the human citizens.

More on the Mortgage Crisis Similarity to the Savings & Loan Scandal

Jonathan Higuera has an interesting look at the history of the media coverage of the mortgage implosion on the Donald W. Reynolds National Center for Business Journalism (Feb 13, 2008, Subpar Subprime Coverage?)

...That’s how Mike Hudson, who broke a story in early 2005 on Ameriquest’s aggressive tactics in selling subprime loans, described the media’s performance.
“There’s been good reporting all along the way, but it’s been intermittent. There just wasn’t a sustained look at the subprime market and the sustained questionable lending practices.”

Had the issue earlier received one-fifth of the media attention it has garnered in the past year and a half, the meltdown could have been averted or lessened considerably, he maintains. The coverage didn’t hammer away at the connection to Wall Street and the capital markets until too late in the game....

...the borrowers often hurt the most were ones that didn’t make good sources for reporters. They were less sophisticated, often living close to the edge economically anyway....

...the financial services industry employed an army of lobbyists and publicists that often squelched the political and regulatory will to be more aggressive in putting a stop to questionable tactics....

.... In 2000, New York Times reporters Diana Henriques and Lowell Bergman wrote a story on the fleecing of subprime borrowers that led to a segment on CBS’ 60 Minutes. The story outlined why Wall Street investment firms had become interested in lending companies that served the subprime market. It also told stories of borrowers burned by the experience.

Perhaps it was too early.

S&L reduxThe parallel to the S&L scandal is alarming, says Stephen Pizzo, co-author of “Inside Job: The Looting of America’s Savings and Loans.” He began writing about suspicious deals by his local S&L bank as early as 1983.

He maintains the repeal of the Glass-Steagall Act in Congress in 1999 set the stage for the current crisis, which will dwarf the S&L scandal in total financial impact. Glass-Steagall served to separate commercial banking from investment banking, prohibiting commercial banks from making investments in the same manner as a Wall Street banking firm.

“It’s a flat learning curve,” said Pizzo. “They did it (deregulate) again. And only five years after the S&L scandal.”...

Dennis Bernstein writes on ConsortiumNews (Feb 28, 2008, Obama's Sub-Prime Conflict):

...My pop gave me a powerful push in the right direction, when it came to savings: A penny saved really was a penny earned.

Unfortunately, this wasn’t the case for the 1,406 people who lost much of their life savings when Superior Bank of Chicago went belly up in 2001 with over $1 billion in insured and uninsured deposits. This collapse came amid harsh criticism of how Superior's owners promoted sub-prime home mortgages. As part of a settlement, the owners paid $100 million and agreed to pay another $335 million over 15 years at no interest.

The uninsured depositors were dealt another blow recently when the U.S. Supreme Court let stand a lower court decision to put any recovered money toward the debt that the bank owners owe the federal government before the depositors get anything.

But this seven-year-old bank failure has relevance in another way today, since the chair of Superior’s board for five years was Penny Pritzker, a member of one of America’s richest families and the current Finance Chair for the presidential campaign of Barack Obama, the same candidate who has lashed out against predatory lending.

During a recent campaign stop in south Texas, Obama met with San Antonio-area residents who had been particularly hard hit by the sub-prime meltdown. He expressed dismay over how lobbyists for the sub-prime lending industry had spent more than $185 million in the last several years for their cause.

“To give you a sense of what that kind of lobbying gets you,” Obama said, a “CEO of the largest sub-prime lender was promised a $100-million severance package at a time when more than two million Americans were facing foreclosure, including nearly 14,000 right here in San Antonio.”

Though Superior Bank collapsed years before the current sub-prime turmoil that is rocking the world’s financial markets – and pushing those millions of homeowners toward foreclosure – some banking experts say the Pritzkers and Superior hold a special place in the history of the sub-prime fiasco.

“The [sub-prime] financial engineering that created the Wall Street meltdown was developed by the Pritzkers and Ernst and Young, working with Merrill Lynch to sell bonds securitized by sub-prime mortgages,” Timothy J. Anderson, a whistleblower on financial and bank fraud, told me in an interview.

“The sub-prime mortgages,” Anderson said, “were provided to Merrill Lynch, by a nation-wide Pritzker origination system, using Superior as the cash cow, with many millions in FDIC insured deposits. Superior’s owners were to sub-prime lending, what Michael Milken was to junk bonds.”

In other words, if you traced today’s sub-prime crisis back to its origins, you would come upon the role of the Pritzkers and Superior Bank of Chicago.

One Failure to the Next

Superior was founded at the tail end of 1988 in the wake of the failed Lyons Savings Bank. The Feds were trying to keep a lid on the magnitude of the S&L post-deregulation crisis and were selling failed or failing thrifts for a song, along with a lucrative package of special benefits.

Chicago’s billionaire Pritzker family and their partners bought Lyons Savings for a quite reasonable $42.5 million, but were also given $645 million in tax credits. The kicker was that the buyers only had to come up with $1 million in cash, and got access to the $645 million, and all the bank’s deposits insured by the Federal Savings and Loan Insurance Corporation (FSLIC).

The Pritzker family’s Superior Bank “started life with enormous tax benefits and a substantial amount of FSLIC-guaranteed assets under a FSLIC assistance agreement,” said financial consultant Bert Ely in a Oct. 16, 2001, statement before the U.S. Senate Committee on Banking, Housing and Urban Affairs.

Ely stated, “Superior’s trick, or business plan” under Penny Pritzker’s leadership was apparently “to concentrate on sub-prime lending, principally on home mortgages, but for a while in sub-prime auto lending, too.” In December 1992, the Pritzkers acquired Alliance Funding, a wholesale mortgage organization.

In a 2002 article in In These Times about Superior Bank’s collapse, business writer David Moberg reported that the bank’s operations were “tainted with the hallmarks of a mini-Enron scandal…And yet the bank’s owners, members of one of America’s wealthiest families, ultimately could end up profiting from the bank’s collapse, while many of Superior’s borrowers and depositors suffer financial losses.”

Moberg wrote that “the Superior story has a familiar ring. … Using a variety of shell companies and complex financial gimmicks, Superior’s managers and owners exaggerated the profits and financial soundness of the bank. While the company actually lost money throughout most of the ’90s, publicly it appeared to be growing remarkably fast and making unusually large profits. Under that cover, the floundering enterprise paid its owners huge dividends and provided them favorable loans and other financial deals deemed illegal by federal investigators.

“Superior’s outside auditor, which doubled as a financial consultant, engaged in dubious accounting practices that kept feckless regulators at bay. Many individuals—disproportionately low-income and minority borrowers with spotty credit records—had apparently been exploited through predatory-lending techniques, including exorbitant fees, inadequate disclosure and high interest rates.”

When it collapsed in 2001, Superior Bank represented the largest failure of a U.S.-insured depository institution for a decade.

“The failure of Superior Bank was directly attributable to the Bank’s Board of Directors and executives ignoring sound risk management principles,” said FDIC Inspector General Gaston Gianni Jr. in a Feb. 7, 2002, report.

Banking whistleblower Anderson noted that “Superior failed at a time of historically low interest rates, high employment, a strong economy, and a growing housing market. … There was no reason for it to fail unless you consider gross negligence, a flawed business plan, and a conspiracy to deceive the regulators who were clearly asleep and were negligent themselves in their duties of protecting the class of underinsured depositors.”

Pioneering WorkAnderson said the bank owners and board members used Superior for their pioneering work in sub-prime lending, developing the financial instruments that helped set the stage for the current sub-prime meltdown.

“The Pritzkers like to say they did sub-prime lending to help the disadvantaged get into the home equity business, [but] it would be more accurate to state they ran a very large nation-wide predatory lending operation,” Anderson said, citing criticism of Superior’s lending practices in a letter written to the Office of Thrift Supervision on July 3, 2002, by the National Community Reinvestment Coalition, an association of more than 600 community-based organizations that promote access to basic banking services.

As an owner and board chair of Superior, Penny Pritzker also was named in a RICO class action suit on behalf of the more than 1,400 depositors at Superior, who initially lost over $50 million of their life savings.

"This is a story of two Americas with two sets of laws, one for the rich and powerful and another for the rest of us,” said Clint Krislov, the depositors’ attorney, in a recent interview. “My clients will all be dead, before they get back their money, given the Supreme Court’s recent decision to uphold the lower court, which put the predatory owners on the front of the line, if any money is recovered.”

The Pritzkers arrayed a powerful and well-connected legal team including former President Bill Clinton’s impeachment lawyer Lanny Davis, two ex-comptrollers of the currency, and two former General Counsels to the FDIC, the American Banker Magazine reported.

Given the political sensitivity of the sub-prime mortgage crisis, Anderson said he believes Penny Pritzker should resign her post as Obama’s Finance Chair, the person who oversees the campaign’s fundraising.

Otherwise, Anderson said, Pritzker’s presence could undercut Obama’s credibility on the issue of predatory lending and create a possible conflict of interest if Obama is elected President and tries to crack down on sub-prime abuses.

Obama campaign spokesman Tommy Vietor had no comment about the controversy surrounding Pritzker, but added: "Barack Obama has already made it very clear that he's going to crack down on fraudulent brokers and lenders."

One might wonder why Hillary Clinton’s campaign hasn’t jumped on this issue. Maybe it’s because Penny’s little brother, J.B. Pritzker, is a mover and shaker in the Clinton campaign.

In May of 2007, Jay Robert, aka, (J.B.) Pritzker, threw his support behind Hillary Clinton, representing a coup for her campaign by wresting the billionaire out of Obama’s home town of Chicago, and better still, the brother of Obama’s Campaign Finance Chair.

J.B. Pritzker announced he would head a new grassroots organization called Citizens for Hillary Clinton. Pritzker told reporters at the time, the new organization would go into states "where we haven't fully organized" and seek out campaign supporters as well as raise funds.

Apparently the Pritzkers will be sitting at the head table at the Inaugural Ball if either Democrat wins.

Mike Colpitts on OpEdNews (Feb 26, 2008, Real Estate Foreclosures Forecast to Double) writes:

...Housing Predictor forecasts foreclosures will nearly double to top a total of 5.6-million through 2011. The forecast is based on a thorough analysis of all 251 housing markets Housing Predictor tracks on a daily basis.

Creative new adjustable rate mortgages and subprime loans have acted to artificially inflate housing markets in the majority of states throughout the country combined with an epidemic of mortgage fraud.

The crisis has gotten so out of hand that nearly 2-million home owners have already been forced from their homes, and millions more fear losing their properties in foreclosure....

...Congress will need to act soon to stem the tsunami of foreclosures and stop the national economy from falling into a depression. Should Congressional action not be taken in major ways, Housing Predictor analysts forecast that the crisis has a 60% chance of developing into a full scale depression with even a higher number of foreclosures....

...More than 175 lenders have already failed as a result of the crisis. Investment manias like the one we have experienced have historically ended in depressions. There have been six depressions since 1837 in the U.S. All have been started by major land buying booms and more people have purchased land either as investments or for speculation since 2000 than ever before.

Meanwhile, Howard Dean of the DNC is running on the fuel of hope that the electorate are stupid and don't read up on the Pritzkers and their double-teaming support of both Democrat leading candidates (see Rebecca Adelman's Dean Ties McCain To Republican 'Culture Of Corruption', National Journal, Feb 21, 2008).

Mike Whitney on The Market Oracle (Feb 26, 2008, Subprime Mortgage Scam Lands US Tax Payer $739 Billion Bailout Bill):

...The financial innovations of the last decade have primarily focused on transforming the liabilities of dubious mortgage applicants into complex debt-instruments which are enhanced with massive amounts of leverage and exotically-named derivatives. The investments banks and brokerage houses fought hard to establish the present system which they call “structured finance”.

They spent over $100,000 million lobbying congress to remove the legislative firewall which kept investment and commercial banks separate. Those laws, particularly Glass Steagall, made sure that the public was protected from the Ponzi-scams which proliferated just prior to the Great Depression. But, now, 30 years later, the same scams are back with a vengeance. The cult of free market orthodoxy and Reagan-era flim-flam has put us on track for another stock market crash ala 1929. That's why Bank of America and their buddies in the industry have turned to the administration for a way out. Their flagging balance sheets can't take
another year of rising foreclosures and dwindling assets. They need Big Brother to cover their debts and rebuild their capital-base. Otherwise its curtains.

Other versions of the so-called “Rescue Bill” have been floating around Washington for the last three weeks, but they all follow the same basic guidelines. Under one of the plans, 600,000 subprime mortgage-holders, many of whom are already delinquent on their payments or in some stage of foreclosure, would be able to
refinance their loans under the Federal Housing Authority (FHA) which would
federally guarantee the mortgage in the event of default.

Great idea, eh? So, now the taxpayer is going to have to pay for the people who lied on their applications (and who really can't afford the homes they're in) so the banks can recoup their losses. This plan doesn't make sense....


...Consider this: If the banks didn't know that the mortgages were bogus, than why are all the various types of mortgages; including Alt-As, piggybacks, home equity loans, ARMs, prime, and "interest only"---defaulting at the same time? It is not just subprime mortgages that are failing; it runs the gamut.

The reason is obvious; it's because the banks were making windfall profits and didn't want to rock the boat. They knew they were peddling garbage. How could they not know? The banker's primary task in life is to figure out who can pay him back "with interest". And they're pretty good at it, too. So why did they start handing out hundreds of billions of dollars to anyone who could fog a mirror? In fact, it got so out-of-hand that (according to The New York State Commission of Investigation) "a homeless woman earning $10 an hour was recently approved for a $470,000 adjustable rate mortgage". In a similar incident, two Hispanic migrant workers in Bakersfield, California, who made roughly $45,000 in combined income, were approved for a mortgage on a home valued at $725,000.

These aren't innocent mistakes. They're part of a broader pattern to fudge the paperwork so unqualified "high-risk" loan applicants would look like J. Paul Getty and secure a mortgage. That way, the banks could continue to rake in lavish origination fees and maximize their profits....

...In their present condition, many of the banks will be back for another handout in a matter of months. Next will be commercial real estate (CRE) which is already slumping and on its way down. Then it'll be the $160 billion in private equity deals and leveraged buyouts (LBOs) which need refinancing. Then it'll be the maxed-out credit cards, and delinquent student loans and defaulting car loans all of which are failing at a faster and faster pace. It is not just the “structured investment” market that's unraveling now; it's the whole speculative paradigm of hyper-inflated assets, toxic bonds, over-priced equities and bizarre-sounding derivatives which are crashing down in one great debt waterfall. The investment banks are at the very center of the problems....

Anyone remember in 2000, when the USG was going after the mob for muscling in on Wall St. brokerage firms? The mob was infiltrating and setting up "pump and dump" schemes? That's what the mortgage crisis is, at its very core - pump & dump. The investment banks appear to have adopted that racket.

Investigations into the Savings & Loan scandal (see my previous post) identified - at nearly every institution involved in that - someone with organized crime ties, who had connections to the intel community, and who had connections to another institution).



Meanwhile, the NSA is prying into every aspect of communication for Americans (NSA's Domestic Spying Grows As Agency Sweeps Up Data, SIOBHAN GORMAN, March 10, 2008, Wall St. Journal):

...According to current and former intelligence officials, the spy agency now monitors huge volumes of records of domestic emails and Internet searches as well as bank transfers, credit-card transactions, travel and telephone records. The NSA receives this so-called "transactional" data from other agencies or private companies, and its sophisticated software programs analyze the various transactions for suspicious patterns. Then they spit out leads to be explored by counterterrorism programs across the U.S. government, such as the NSA's own Terrorist Surveillance Program, formed to intercept phone calls and emails between the U.S. and overseas without a judge's approval when a link to al Qaeda is suspected.

The NSA's enterprise involves a cluster of powerful intelligence-gathering programs, all of which sparked civil-liberties complaints when they came to light. They include a Federal Bureau of Investigation program to track telecommunications data once known as Carnivore, now called the Digital Collection System, and a U.S. arrangement with the world's main international banking clearinghouse to track money movements.

The effort also ties into data from an ad-hoc collection of so-called "black programs" whose existence is undisclosed, the current and former officials say. Many of the programs in various agencies began years before the 9/11 attacks but have since been given greater reach. Among them, current and former intelligence officials say, is a longstanding Treasury Department program to collect individual financial data including wire transfers and credit-card transactions....

...NSA gets access to the flow of data from telecommunications switches through the FBI, according to current and former officials. It also has a partnership with FBI's Digital Collection system, providing access to Internet providers and other companies. The existence of a shadow hub to copy information about AT&T Corp. telecommunications in San Francisco is alleged in a lawsuit against AT&T filed by the civil-liberties group Electronic Frontier Foundation, based on documents provided by a former AT&T official. In that lawsuit, a former technology adviser to the Federal Communications Commission says in a sworn declaration that there could be 15 to 20 such operations around the country. Current and former intelligence officials confirmed a domestic network of hubs, but didn't know the number....

If this Treasury Department program is so longstanding, why is it they didn't identify any of the wire transfers to the 9/11 hijackers while they were in this country, for example, the ones from Pakistan to Atta?


What if all this surveillance isn't for what its claimed to be for? What if its for identifying those who would present problems should martial law be declared? Perhaps we should use the Department of Homeland Security's verbage ... when its declared, not should or if.

A century of looting the middle class of their wealth. A century of false-flag operations used to declare war in order to profit from war. In just this nation.

But this time, its different, right?

And this time when you attempt to contact anyone to gather up a little band of folks to stand up to tyranny, "My Space" on the supercomputers at the NSA have already IDENTIFIED your potential cohorts, everyone you've ever phoned/emailed/faxed, where everyone lives, where they bank, where they shop, what they buy, what they look like, what they drive, what they wear, etc.

Makes you wonder what their excuse is going to be come the next 9/11?

The Mortgage Crisis & Organized Crime & .... Oh, The Places We'll Go ...

David Prosser reports on the Independent (UK) (March 6, Organised crime turning to mortgage fraud):

... The Acpo report says corrupt property professionals including surveyors, mortgage brokers and solicitors are facilitating frauds. Common crimes include surveyors deliberately over-valuing properties, applications made on the basis of forged documentation and the use of fraudulent lease contracts to inflate the value of commercial property artificially.

The police report follows a similar warning from the Financial Services Authority last month. The UK's chief City regulator, which has now established a joint intelligence operation with City of London police to investigate mortgage-related crime, said it was increasingly concerned about the problem.

The FSA said it had received more than 200 referrals from lenders suspicious about potentially fraudulent mortgage brokers over the past 18 months. It is currently investigating more than 70 firms and individuals. The regulator believes the average fraud is for £45,000.

See also Gilmore's article on the Times (UK) (March 5, Mortgage fraud is funding terrorism, say police).

Which brings back memories of that "premeditated conspiracy to move covert funds out of the country for use by the U.S. Intelligence Agency", the Savings & Loan scandal of the Reagan/Bush years. From Gary W. Potter, Eastern Kentucky University:

...summarizing the most blatant examples of collaboration between financial institutions, the mob, and the intelligence community.

First National Bank of Maryland: For two years, 1983-1985, the First National Bank of Maryland was used by Associated Traders, a CIA proprietary company, to make payments for covert operations. Associated traders used its accounts at First National to supply $23 million in arms for covert operations in Afghanistan, Angola, Chad, and Nicaragua (Bainerman, 1992; 276-277; Covert Action 35, 1990).

The links between the First National Bank of Maryland and the CIA were exposed in a lawsuit filed in Federal District Court by Robert Maxwell, a high-ranking bank officer. Maxwell charged in that suit that he had been asked to commit crimes on behalf of the CIA. Specifically, he charged that he was asked to conceal Associated Traders' business activities, which by law he was required to specify on all letters of credit. Maxwell alleged that he had been physically threatened and forced to leave his job after asking that his superiors supply him with a letter stating
that the activities he was being asked to engage in were legal. In responding to Maxwell's lawsuit, attorneys for the bank state that "a relationship between
First National and the CIA and Associated Traders was classified information
which could neither be confirmed nor denied (Bainerman, 1992: 276-277; Washington Business Journal, February 5, 1990).

Palmer National Bank: The Washington, D.C.-based Palmer National Bank was founded in 1983 on the basis of a $2.8 million loan from Herman K. Beebe to Harvey D. McLean, Jr. McLean was a Shreveport Louisiana businessman who owned Paris (Texas) Savings and Loan. Herman Beebe played a key role in the savings and loan scandal. Houston Post reporter Pete Brewton linked Beebe to a dozen failed S & L's, and Stephen Pizzo, Mary Fricker, and Paul Muolo, in their investigation of the S & L fiasco, called Beebe's banks "potentially the most powerful and corrupt banking network ever seen in the U.S." Altogether, Herman Beebe controlled, directly or indirectly, at least 55 banks and 29 S & L's in eight states. What is particularly interesting about Beebe's participation in these banks and savings
and loans is his unique background. Herman Beebe had served nine months in federal prison for bank fraud and had impeccable credentials as a financier for New Orleans-based organized crime figures, including Vincent and Carlos Marcello (Bainerman, 1992: 277-278; Brewton, 1993: 170- 179).

Harvey McLean's partner in the Palmer National Bank was Stefan Halper. Halper had served as George Bush's foreign policy director during the 1980 presidential primaries. During the general election campaign, Halper was in charge of a highly secretive operations center, consisting of Halper and several ex- CIA operatives who kept close tabs on Jimmy Carter's foreign policy activities, particularly Carter's attempt to free U.S. hostages in Iran. Halper was later linked both to the "Debategate" scandal, in which it is alleged that Carter's briefing papers for his debates with Ronald Reagan were stolen, and with "The October Surprise," in which it is alleged that representatives of the Reagan campaign tried to thwart U.S. efforts to free the Iranian hostages until after the presidential election. Halper also set up a legal defense fund for Oliver North.

During the Iran-Contra Affair, Palmer National was the bank of record for the National Endowment for the Preservation of Liberty, a front group run by Oliver North and Carl "Spitz" Channell, which was used to send money and weapons to the contras.

Indian Springs Bank: Another bank with clear connections to the CIA was the Indian Springs Bank of Kansas City, Kansas (Bainerman, 1992: 279-280; Brewton, 1993: 197-200). The fourth largest stockholder in Indian Springs was Iranian expatriate Farhad Azima, who was also the owner of an air charter company called Global International Air. The Indian Springs bank had made several unsecured loans to Global International Air, totaling $600,000 in violation of the bank's $349,00 borrower limit. In 1983 Global International filed for bankruptcy, and Indian Springs followed suit in 1984. The president of Indiana Springs was killed in 1983 in a car fire that started in the vehicle's back seat and was regarded by law enforcement officials as of suspicious origins.

Global International Air was part of Oliver North's logistical network which shipped arms for the U.S. government on several occasions, including a shipment of 23 tons of TOW missiles to Iran by Race Aviation, another company owned by Azima. Pete Brewton, in his investigation of the Indian Springs bank collapse was told that FBI had not followed up on Indian Springs because the CIA informed them that Azima was "off limits" (Houston Post, February 8, 1990). Similarly the assistant U.S. Attorney handling the Indian Springs investigation was told to "back off from a key
figure in the collapse because he had ties to the CIA."

Azima did indeed have ties to the CIA. His relationship with the agency goes back to the late 1970s when he supplied air and logistical support to EATSCO (Egyptian American Transport and Services Corporation), a company owned by former CIA agents Thomas Clines, Theodore Shackley, and Richard Secord. EATSCO was prominently involved in the activities of former CIA agent Edwin Wilson, who shipped arms illegally to Libya. Azima was also closely tied to the Republican party. He had contributed $81,000 to the Reagan campaign.

Global International also had other unsavory connections. In 1981, Global International made a payment to organized crime figure Anthony Russo, a convicted felon with a record that included conspiracy, bribery, and prostitution charges. Russo was the lawyer of Kansas City organized crime figures, an employee of Indian Springs, and a member of the board of Global International. Russo later explained that the money had been used to escort Liberian dictator Samuel Doe on a "goodwill trip" to the U.S.

Global International's planes based in Miami were maintained by Southern Air Transport, another CIA proprietary company. According to Franck Van Geyso, an employee of Global International, pilots for Global International ferried arms into South and Central America and returned to Florida with drugs. Indian Springs also made a loan of $400,000 to Morris Shenker, owner of the Dunes Hotel in Las Vegas, former attorney for Jimmy Hoffa, and close associate of Nick Civella and other
Kansas City organized crime figures. At the time the loan to Shenker was made,
he, Civella, and other Kansas City mobsters were under indictment for skimming $280,000 from Las Vegas' Tropicana Casino.

Vision Banc Savings: In March, 1986, Robert L. Corson purchased the Kleberg County Savings and Loan of Kingsville, Texas, for $6 million, and changed its name to Vision Banc Savings (Bainerman, 1992: 280-281; Brewton, 1993: 333-351). Harris County, Texas, judge Jon Lindsey vouched for Corson's character in order to gain permission from state regulators for the bank purchase. Lindsey was the chairman of the Bush campaign in 1988 in Harris County and later received a $10,000 campaign contribution and a free trip to Las Vegas from Corson (Houston Post, February 11, 1990).

Corson was well-known to federal law enforcement agents as a "known money launderer" and a "mule for the agency," meaning that he moved large amounts of cash from country to country. When Corson purchased Vision Banc, it had assets in excess of $70 million. Within four months it was bankrupt. Vision Banc engaged in a number of questionable deals under Corson leadership, but none more so that its $20 million loan to Miami Lawyer Lawrence Freeman to finance a real estate deal (Houston Post, February 4, 1990). Freeman was a convicted money launderer who had cleaned dirty money for Jack Devoe's Bahamas-to-Florida cocaine smuggling syndicate and for Santo Trafficante's Florida- based organized crime syndicate. Freeman was a law partner of CIA-operative and Bay of Pigs paymaster Paul
Helliwell. Corson, in a separate Florida real estate venture costing $200 million, was indicted on a series of charges.

Hill Financial Savings: Vision Banc was not the only financial institution involved in Freeman's Florida land deals. Hill Financial Savings of Red Hill, Pennsylvania, put in an additional $80 million (Brewton, 1993: 346-348) . The Florida land deals were only one of a series of bad investments by Hill Financial which led to collapse. The failure of Hill Financial, alone, cost the U.S. treasury $1.9 billion.

Sunshine State Bank: The cast of characters surrounding the Sunshine State Bank of Miami also included spies, White House operatives, and organized criminals (Bainermann, 1992: 281; Brewton, 1993: 310- 312, 320-323). The owner of the Sunshine State Bank, Ray Corona, was convicted in 1987 of racketeering, conspiracy, and mail fraud. Corona purchased Sunshine in 1978 with $1.1 million in drug trafficking profits supplied by Jose Antonio "Tony" Fernandez, who was subsequently indicted on charges of smuggling 1.5 million pounds of marijuana into the U.S.

Among Corona's customers and business associates were Leonard Pelullo, Steve Samos, and Guillermo Hernandez-Cartaya. Pelullo was a well-known associate of organized crime figures in Philadelphia, who had attempted to use S & L money to broker a major purchase of an Atlantic City Casino as a mob frontman. Pelullo was charged with fraud for his activities at American Savings in California. Steve Samos was a convicted drug trafficker who helped Corona to set up Sunshine State Bank as a drug money laundry. Samos also helped set up front companies that funneled money and weapons to the Contras. Guillermo Hernandez-Cartaya was a veteran CIA operative who had played a key role in the Bay of Pigs of invasion. He also had a long career as a money launderer in the Caribbean and in Texas on behalf of both the CIA and major drug trafficking syndicates.

Mario Renda, Lender to the Mob: Mario Renda was a Long Island money broker who brokered deposits to various savings and loans in return for their agreement to loan money to phony companies (Brewton, 1993: 45-47; 188-190; Pizzo et al. 1989: 466-471). Renda and his associates received finders fees of 2 to 6 percent on the loans, most of which went to individuals with strong organized crime connections who subsequently defaulted on them. Renda brokered deals to 160 Savings and Loans throughout the country, 104 of which eventually failed. Renda was convicted of $16 million from an S & L and for tax fraud.

Renda also served CIA and National Security Council interests as a money broker helping arrange for the laundering of drug money through various savings and loans on behalf of the CIA. He then obtained loans from the same S & L's, which were funneled to the Contras. An organized crime-related stockbroker, a drug pilot, and Renda were all convicted in the drug money laundering case.

Full-Service Banking: All told at least twenty-two of the failed S & L's can be tied to joint money laundering ventures by the CIA and organized crime figures (Glassman, 1990: 16-21; Farnham, 1990: 90-108; Weinberg, 1990: 33; Pizzo, et al., 1989: 466-471). If the savings and loan scandals of the 1980s reveal anything, they demonstrate what has often been stated as a maxim in organized crime research: that corruption linking government, business, and syndicates is the reality of the
day-to-day organization of crime.

Looking at The Mortgage Graveyard, I can't help but wonder, if thorough investigations were done on these companies, as was done on the Savings & Loans, what nepharious players would emerge? What connections to organized crime and the intelligence community would emerge from company to company?

Given that IranContra is being run again (see David Rose's The Gaza Bombshell, Vanity Fair, April 2008 edition) .... what are the odds that Junior exhumed yet another one of daddy's schemes? My guess - better odds than the sun rising tomorrow morning.

....Vanity Fair has obtained confidential documents, since corroborated by sources in the U.S. and Palestine, which lay bare a covert initiative, approved by Bush and implemented by Secretary of State Condoleezza Rice and Deputy National Security Adviser Elliott Abrams, to provoke a Palestinian civil war. The plan was for forces led by Dahlan, and armed with new weapons supplied at America’s behest, to give Fatah the muscle it needed to remove the democratically elected Hamas-led government from power. (The State Department declined to comment.)

But the secret plan backfired, resulting in a further setback for American foreign policy under Bush. Instead of driving its enemies out of power, the U.S.-backed Fatah fighters inadvertently provoked Hamas to seize total control of Gaza.

Some sources call the scheme “Iran-contra 2.0,” recalling that Abrams was convicted (and later pardoned) for withholding information from Congress during the original Iran-contra scandal under President Reagan. There are echoes of other past misadventures as well: the C.I.A.’s 1953 ouster of an elected prime minister in Iran, which set the stage for the 1979 Islamic revolution there; the aborted 1961 Bay of Pigs invasion, which gave Fidel Castro an excuse to solidify his hold on Cuba; and the contemporary tragedy in Iraq....

Ask and find: Broderick Perkins on The Realty Times (December 20, 2005, Organized Crime In Mortgage Industry Worsens In 2005) reported:

The pandemic of mortgage fraud, which last year reached organized-crime levels of collusion and conspiracy, worsened in 2005 and, along with the easy-money lure of rising home prices, real estate and banking officials are getting some of the blame.

No matter who ultimately goes down for the crime, consumers are advised to be on the look out suspicious mortgage activity including pressure tactics, failed disclosures, unsubstantiated home values, homes recently purchased and sold again, and other red flags that fraud may be packaged with the deal.

The Federal Bureau of Investigation announced 21,994 reports of "suspicious" real estate activity, including mortgage fraud, in fiscal 2005, up from 17,127 the previous year. The 2004 number was nearly two a half times 2003's levels.

The FBI statistics also reveal 721 pending mortgage fraud investigations in numerous states, up from 534 in 2004 and more than three times the number in 2003. The 2003 numbers, at the time, was the agency's largest ever nationwide enforcement operation directed at financial institution fraud, including mortgage fraud.

As the effort has grown, more suspects are walking.

There were 170 related convictions in 2005, down from 172 in 2004 and 206 indictments in 2005, down from 241 in 2004.

Fewer convictions contribute to the growth in costs related to the crime -- $429 million in 2004 to $1.014 billion in 2005.

Along with the FBI and Department of Justice, the Secret Service, U.S. Postal Inspection Service, Office of the Inspector General, Internal Revenue Service, Department of Housing and Urban Development, state attorneys general, and other law enforcement agencies are investigating the crime from street-beat level to task force efforts.

FBI investigators said lenders must be more diligent about checking Social Security numbers and signatures on loan applications to make sure they are legitimate. FBI investigators also continued to hammer banking officials about verifying appraisals. Some types of mortgage fraud would be impossible without over-inflated appraisals.

Chris Swecker, assistant director of the FBI, said while the hot real estate market is attracting legitimate buyers and investors, they are being duped by a growing number of "industry insiders" who comprise 80 percent of all reported fraud losses by using collaboration or collusion to siphon cash from rising home values.

Earlier this year Grant D. Ashley, assistant director of FBI law enforcement services, said the criminal actions can strip borrowers of their cash, homes and favorable credit standing. Lenders are victims too as bad loans end up in foreclosure. With real estate as a cornerstone of the national economy, the economy suffers too.

A first-cousin to predatory lending, mortgage fraud, according to the FBI, is defined as "a material misstatement, misrepresentation, or omission relied upon by an underwriter or lender to fund, purchase, or insure a loan."

"Typically, their M.O. (method of operation) is revolving equity, falsely inflating property values, or issuing loans based on fictitious properties," Ashley said.

Ashley also said property flipping is a hot mortgage fraud tactic. It's legal to buy a property and sell it soon after for a profit based on real market forces. Illegal flippers, however, buy properties and then conspire with appraisers to artificially
inflate their value before reselling. Ashley said flipped properties are repurchased for 50 percent to 100 percent of their original value.

Equity skimming is another trend -- insiders persuade unaware borrowers to repeatedly refinance their mortgages every few months. With each refinance, the rate may be slightly lower but the come-on includes a higher loan amount necessary to cover the origination fees and other costs of refinancing. After the perps repeatedly skim equity in the form of origination fees, the loans become too large for the borrower and he or she defaults.

"Many people want to believe their homes are worth more than they are, and the recent housing booms across the U.S. have attracted criminals who want to exploit the situation to make a quick profit," Ashley said.

On the MortgageFraudBlog (07/22/05, Two Charged with Violation of Colorado Organized Crime Control Act):

A grand jury in Denver, Colorado indicted Luis Vagle, former head First Financial Corp., and Lawrence M. Rosenberg, on charges they violated the Colorado Organized Crime Control Act in an alleged mortgage fraud scheme that resulted in foreclosures. Losses to home sellers and lenders are estimated at $1 million....

There's also this post (January 2, 2008, Mortgage Meltdown: Defending Your Property: Strategies) on the LivingLies Blog ... scroll down to read Stephen G. Bishop's analysis in the comments. And lots more ... just google "mortgage industry" "organized crime".

How many BILLIONS have now been lost? Where are our little FBI friends? Especially given the sheer numbers of perps that have been walking away from their crimes. Surely, it can't take the ENTIRE FBI to make excuses before Congress for having "improperly accessed Americans' telephone records, credit reports and Internet traffic in 2006, the fourth straight year of privacy abuses resulting from investigations aimed at tracking terrorists and spies." Surely, it can't take the ENTIRE FBI to track my internet postings, especially, given that the NSA has had its supercomputers doing that for four years, with the help of AT&T.

Perhaps they're - again - covering for their BFFs in the White House and those a bit down the George Washington Parkway ... at Langley ... in the George H. W. Bush Center for Intelligence?