The Voice of the White House

                Washington , D.C. , July 27, 2008 : “The ferocious costs of the Iraq and Afghanistan wars have virtually drained the U.S. Treasury and I learn now that the IRS has been handed its marching papers by the Administration to find and deliver to the aforesaid Treasury, as much money as they can squeeze from delinquent taxpayers. A new bill allows the IRS unlimited access to all American credit card accounts (the government is especially interested in people buying gold) and many, many Americans who are self-employed will be investigated thoroughly. A report just issued says that that there is at least $60 billion in unpaid taxes due. The IRS is now also interested in the field of fine art because many people are “investing” in art in the hopes of protecting assets they do not want the IRS to discover (and tax). One Swiss bank loophole has been closed (but there are still many more ways in which citizens can hide their assets) and more are being worked on, even as I speak. Both gold and the art market are the twin areas of new, intense government interest now so don’t tell anyone about that Rembrandt in your living room and buy your gold in small lots from coin dealers (not the ‘Gold Investment’ firms who love big, splashy ads) and pay cash for it. Rare stamps are another good investment and have the advantage of being very portable and are easy to hide. Oh and insurance companies that insure art are being approached to open their files to the IRS investigators. Next, they will be slapping a tax on sex and you can expect drooling investigators to be hiding under your beds with cameras, tape recorders and rubber gloves!”

Conversations with the Crow: Part 18

Editor’s note: When we ran the first conversation  in this series, there was the question of reader interest and acceptability. It is pleasant to report that our server was jammed with viewers and the only other tbrnews story that has had more viewers was our Forward Base Falcon story that had a half a million viewers in less that two days. We are now going to reprint all of the Crowley conversations, including a very interesting one on John McCain,  in chronological sequence. It is also pleasant to note that two publishers and three reporters have all expressed concrete interest in the Crowley conversations. It is even more pleasurable to note that a number of people inside the Beltway and in McLean , Virginia , have been screaming with rage! Here is a partial listing of documents from Crowley ’s personal files, now being scanned for publication:

DOCUMENT CATALOG

Catalog Number                   Description of Contents            _______________________________________________________________________________

1000 BH                 Extensive file (1,205 pages) of reports on Operation PHOENIX. Final paper dated January, 1971, first document dated  October, 1967. Covers the setting up of Regional Interrogation Centers, staffing, torture techniques including electric shock, beatings, chemical injections. CIA agents involved and includes a listing of U.S. military units to include Military Police, CIC and Special Forces groups involved. After-action reports from various military units to include 9^th Infantry, showing the deliberate killing of all unarmed civilians located in areas suspected of harboring or supplying Viet Cong units. *

1002 BH                 Medium file (223 pages)  concerning the fomenting of civil disobedience in Chile as the result of the Allende election in 1970. Included are pay vouchers for CIA bribery efforts with Chilean labor organization and student activist groups, U.S. military units involved in the final revolt, letter from  T. Karamessines, CIA Operations Director to Chile CIA Station Chief Paul Wimert, passing along a specific order from Nixon via Kissinger to kill Allende when the coup was successful. Communications to Pinochet with Nixon instructions to root out by force any remaining left wing leaders.

1003 BH                 Medium file (187 pages) of reports of CIA assets containing photographs of Soviet missile sites, airfields and other strategic sites taken from commercial aircraft. Detailed descriptions of targets attached to each picture or pictures.

1004 BH                 Large file (1560 pages) of CIA reports on Canadian radio intelligence intercepts from the Soviet Embassy in Ottawa (1958) and a list of suspected and identified Soviet agents or sympathizers in Canada , to include members of the Canadian Parliament and military.

1005 BH              Medium file (219 pages) of members of the German Bundeswehr in the employ of the CIA. The report covers the Innere Führung group plus members of the signals intelligence service. Another report, attached, covers CIA assets in German Foreign Office positions, in Germany and in diplomatic missions abroad.

1006:BH                 Long file (1,287 pages) of events leading up to the killing of Josef Stalin in 1953 to include reports on contacts with L.P. Beria who planned to kill Stalin, believing himself to be the target for removal. Names of cut outs, CIA personnel in Finland and Denmark are noted as are original communications from Beria and agreements as to his standing down in the DDR and a list of MVD/KGB files on American informants from 1933 to present. A report on a blood-thinning agent to be made available to Beria to put into Stalin’s food plus twenty two reports from Soviet doctors on Stalin’s health, high blood pressure etc. A report on areas of cooperation between Beria’s people and CIA controllers in the event of a successful coup. *

1007 BH                 Short list (125 pages) of CIA contacts with members of the American media to include press and television and book publishers. Names of contacts with bios are included as are a list of payments made and specific leaked material supplied. Also appended is a shorter list of foreign publications. Under date of August, 1989 with updates to 1992. Walter Pincus of the Washington Post, Bradlee of the same paper, Ted Koppel, Sam Donaldson and others are included.

1008 BH                 A file of eighteen reports (total of 899 pages) documenting illegal activities on the part of members of the U.S. Congress. First report dated July 29, 1950 and final one September 15, 1992. Of especial note is a long file on Senator McCarthy dealing with homosexuality and alcoholism. Also an attached note concerning the Truman Administration’s use of McCarthy to remove targeted Communists. These reports contain copies of FBI surveillance reports, to include photographs and reference to tape recordings, dealing with sexual events with male and female prostitutes, drug use, bribery, and other matters.

1009 BH                 A long multiple file (1,564 pages) dealing with the CIA part (Kermit Roosevelt) in overthrowing the populist Persian prime minister, Mohammad Mossadegh. Report from Dulles (John Foster) concerning a replacement, by force if necessary and to include a full copy of AJAX operation. Letters from AIOC on million dollar bribe paid directly to J.Angleton, head of SOG. Support of Shah requires exclusive contracts with specified western oil companies. Reports dated from May 1951 through August, 1953.

1010 BH                 Medium file (419 pages) of telephone intercepts made by order of J.J. Angleton of the telephone conversations between RFK and one G.N. Bolshakov. Phone calls between 1962-1963 inclusive. Also copies of intercepted and inspected mail from RFK containing classified U.S. documents and sent to a cut-out identified as one used by Bolshakov, a Russian press (TASS) employee. Report on Bolshakov’s GRU connections.

1011 BH                 Large file (988 pages) on 1961 Korean revolt of Kwangju revolt led by General Park Chung-hee and General Kin-Jong-pil. Reports on contacts maintained by CIA station in Japan to include payments made to both men, plans for the coup, lists of “undesirables” to be liquidated  Additional material on CIA connections with KCIA personnel and an agreement with them  to assassinate South Korean chief of state, Park, in 1979.

1012 BH                 Small file (12 pages) of homosexual activities between FBI Director Hoover and his aide, Tolson. Surveillance pictures taken in San Francisco hotel and report by CIA agents involved. Report analyzed in 1962.

1013 BH                 Long file (1,699 pages) on General Edward Lansdale. First report a study signed by DCI Dulles in  September of 1954 concerning a growing situation in former French Indo-China. There are reports by and about Lansdale starting with his attachment to the OPC in 1949-50 where he and Frank Wisner coordinated policy in neutralizing Communist influence in the Philippines .. Landsale was then sent to Saigon under diplomatic cover and many copies of his period reports are copied here. Very interesting background material including strong connections with the Catholic Church concerning Catholic Vietnamese and exchanges of intelligence information between the two entities.

1014 BH                 Short file (78 pages) concerning  a Dr. Frank Olson. Olson was at the U.S. Army chemical warfare base at Ft. Detrick in Maryland and was involved with a Dr. Gottleib. Gottleib was working on a plan to introduce psychotic-inducing drugs into the water supply of the Soviet Embassy. Apparently he tested the drugs on CIA personnel first. Reports of psychotic behavior by Olson and more police and official reports on his defenstration by Gottleib’s associates. A cover-up was instituted and a number of in-house CIA memoranda attest to this. Also a discussion by Gottleib on various poisons and drugs he was experimenting with and another report of people who had died as a result of Gottleib’s various experiments and CIA efforts to neutralize any public knowledge of these. *

1015 BH                 Medium file (457 pages) on CIA connections with the Columbian-based Medellín drug ring. Eight CIA internal reports, three DoS reports, one FBI report on CIA operative Milan Rodríguez and his connections with this drug ring. Receipts for CIA payments to Rodríguez of over $3 million in CIA funds, showing the routings of the money, cut-outs and payments. CIA reports on sabotaging  DEA investigations. A three-part study of the Nicaraguan Contras, also a CIA-organized and paid for organization.

1016 BH                 A small file (159 pages) containing lists of known Nazi intelligence and  scientific people recruited in Germany from 1946 onwards, initially by the U.S. Army and later by the CIA. A detailed list of the original names and positions of the persons involved plus their relocation information. Has three U.S. Army and one FBI report on the subject.

1017 BH                 A small list (54 pages) of American business entities with “significant” connections to the CIA. Each business is listed along with relevant information on its owners/operators, previous and on going contacts with the CIA’s Robert Crowley, also a list of national advertising agencies with similar information. Much information about suppressed news stories and planted stories

                On October 8th, 2000 , Robert Trumbull Crowley, once a leader of the CIA's Clandestine Operations Division, died in a Washington hospital of heart failure and the end effects of Alzheimer's Disease. Before the late Assistant Director Crowley was cold, Joseph Trento, a writer of light-weight books on the CIA, descended on Crowley 's widow at her town house on Cathedral Hill Drive in Washington and hauled away over fifty boxes of Crowley 's CIA files.

                Once Trento had his new find secure in his house in Front Royal , Virginia, he called a well-known Washington fix lawyer with the news of his success in securing what the CIA had always considered to be a potential major embarrassment. Three months before, July 20th of that year, retired Marine Corps colonel William R. Corson, and an associate of Crowley , died of emphysema and lung cancer at a hospital in Bethesda , Md.

                After Corson's death, Trento and a well-known Washington fix-lawyer went to Corson's bank, got into his safe deposit box and removed a manuscript entitled 'Zipper.' This manuscript, which dealt with Crowley 's involvement in the assassination of President John F. Kennedy, vanished into a CIA burn-bag and the matter was considered to be closed forever.

                The  small group of CIA officials gathered at Trento 's house to search through the Crowley papers, looking for documents that must not become public. A few were found but, to their consternation, a significant number of files Crowley was known to have had in his possession had simply vanished.

                When published material concerning the CIA's actions against Kennedy became public in 2002, it was discovered to the CIA's horror, that the missing documents had been sent by an increasingly erratic Crowley to another person and these missing papers included devastating material on the CIA's activities in South East Asia to include drug running, money laundering and the maintenance of the notorious 'Regional Interrogation Centers' in Viet Nam and, worse still, the Zipper files proving the CIA’s active organization of the assassination of President John Kennedy..

                A massive, preemptive disinformation campaign was readied, using government-friendly bloggers, CIA-paid "historians" and others, in the event that anything from this file ever surfaced. The best-laid plans often go astray and in this case, one of the compliant historians, a former government librarian who fancied himself a serious writer, began to tell his friends about the CIA plan to kill Kennedy and eventually, word of this began to leak out into the outside world.

                The originals had vanished and an extensive search was conducted by the FBI and CIA operatives but without success. Crowley 's survivors, his aged wife and son, were interviewed extensively by the FBI and instructed to minimize any discussion of  highly damaging CIA files that Crowley had, illegally, removed from Langley when he retired. Crowley had been a close friend of James Jesus Angleton, the CIA’s notorious head of Counterintelligence. When Angleton was sacked by  DCI William Colby in December of 1974, Crowley and Angleton  conspired to  secretly remove Angleton’s most sensitive secret files our of the agency. Crowley did the same thing  right before his own retirement , secretly removing thousands of pages  of classified information that covered his entire agency career.

                Known as “The Crow” within the agency, Robert T. Crowley joined the CIA at its inception and spent his entire career in the Directorate of Plans, also know as the “Department of Dirty Tricks,”: Crowley was one of the tallest man ever to work at the CIA. Born in 1924 and raised in Chicago , Crowley grew to six and a half feet when he entered the U.S. Military Academy at West Point in N.Y. as a cadet in 1943 in the class of 1946. He never graduated, having enlisted in the Army, serving in the Pacific during World War II. He retired from the Army Reserve in 1986 as a lieutenant colonel. According to a book he authored with his friend and colleague, William Corson, Crowley’s career included service in military intelligence and Naval Intelligence, before joining the CIA at inception in 1947. His entire career at the agency was spent within the Directorate of Plans in covert operations. Before his retirement, Bob Crowley became assistant deputy director for operations, the second-in-command in the Clandestine Directorate of Operations.

                One of Crowley ’s first major assignments within the agency was to assist in the recruitment and management of prominent World War II Nazis, especially those with advanced intelligence experience. One of the CIA’s major recruitment coups was Heinrich Mueller, once head of Hitler’s Gestapo who had fled to Switzerland after the collapse of the Third Reich and worked as an anti-Communist expert for Masson of Swiss counterintelligence. Mueller was initially hired by Colonel James Critchfield of the CIA,  who was running the Gehlen Organization out of Pullach in southern Germany . Crowley eventually came to despise Critchfield but the colonel was totally unaware of this, to his later dismay.

                Crowley ’s real expertise within the agency was the Soviet KGB. One of his main jobs throughout his career was acting as the agency liaison with corporations like ITT, which the CIA often used as fronts for moving large amounts of cash off their books. He was deeply involved in the efforts by the U.S. to overthrow the democratically elected government of Salvador Allende in Chile , which eventually got him into legal problems with regard to investigations of the U.S. government’s grand jury where he has perjured himself in an agency cover-up

After his retirement, Crowley began to search for someone who might be able to write a competent history of his career. His first choice fell on British author John Costello (author of Ten Days to Destiny, The Pacific War and other works) but, discovering that Costello was a very aggressive homosexual, he dropped him and tentatively turned to Joseph Trento who had assisted Crowley and William Corson in writing a book on the KGB. When Crowley discovered that Trento had an ambiguous and probably cooperative relationship with the CIA, he began to distrust him and continued his search for an author.

Bob Crowley first contacted Gregory Douglas  in 1993  when he found out from John Costello that Douglas was about to publish his first book on Heinrich Mueller, the former head of the Gestapo who had become a secret, long-time asset to the CIA. Crowley contacted Douglas and they began a series of long and often very informative telephone conversations that lasted for four years. . In 1996, Crowley , Crowley told Douglas   that he believed him to be the person that should ultimately tell Crowley ’s story but only after Crowley ’s death. Douglas , for his part, became so entranced with some of the material that Crowley began to share with him that he secretly began to record their conversations, later transcribing them word for word, planning to incorporate some, or all, of the material in later publications.

In 1998, when Crowley was slated to go into the hospital for exploratory surgery,  he had his son, Greg, ship two large foot lockers of documents to Douglas with the caveat that they were not to be opened until after Crowley ’s death. These documents, totaled  an astonishing 15,000 pages of CIA classified files involving many covert operations, both foreign and domestic, during the Cold War.

After Crowley ’s death and Trento ’s raid on the Crowley files, huge gaps were subsequently discovered by horrified CIA officials and when Crowley ’s friends mentioned Gregory Douglas, it was discovered that Crowley ’s son had shipped two large boxes to Douglas . No one knew their contents but because Douglas was viewed as an uncontrollable loose cannon who had done considerable damage to the CIA’s reputation by his on-going publication of the history of Gestapo-Mueller, they bent every effort both to identify the missing files and make some effort to retrieve them before Douglas made any use of them.

                All of this furor eventually came to the attention of Dr. Peter Janney, a Massachusetts clinical psychologist and son of Wistar Janney, another career senior CIA official, colleague of not only Bob Crowley but Cord Meyer, Richard Helms, Jim Angleton and others. Janney was working on a book concerning the murder of Mary Pinchot Meyer, former wife of Cord Meyer, a high-level CIA official, and later the mistress of President John F. Kennedy.  Douglas had authored a book, ‘Regicide’ which dealt with Crowley ’s part in the Kennedy assassination and he obviously had access to at least some of Crowley ’s papers. Janney was very well connected inside the CIA’s higher levels and when he discovered that Douglas had indeed known, and had often spoken with, Crowley and that after Crowley’s death, the FBI had descended on Crowley’s widow and son, warning them to never speak with Douglas about anything, he contacted Douglas and finally obtained from him a number of original documents, including the originals of the transcribed conversations with Robert Crowley.

                In spite of the burn bags, the top secret safes and the vigilance of the CIA to keep its own secrets, the truth has an embarrassing and often very fatal habit of emerging, albeit decades later.

                While CIA drug running , money-launderings and brutal assassinations are very often strongly rumored and suspected, it has so far not been possible to actually pin them down but it is more than possible that the publication of the transcribed and detailed Crowley-Douglas conversations will do a great deal towards accomplishing this.

            These many transcribed conversations are relatively short because Crowley was a man who tired easily but they make excellent reading. There is an interesting admixture of shocking revelations on the part of the retired CIA official and often rampant anti-social (and very entertaining) activities on the part of Douglas but readers of this new and on-going series are gently reminded to always look for the truth in the jest!

Date: Thursday, September 12, 1996

Commenced:  8:47 AM CST

Concluded:  9:15 AM CST

RTC: This time I called you, Gregory. I hope it’s not inconvenient for you.

GD: No, I’m fine here. If you hear any odd noises, I am trying to adjust the volume on my phone set. I have a hearing problem in one ear. There, I think it’s better now. What can I do for you, Robert?

RTC: I think I mentioned Jim Critchfield to you before.

GD: Ran the Gehlen Org up at Pullach. Yes, we talked about him. As I recall, you are not fond of him.

RTC: No, I am not but Jim doesn’t know that. What I’m calling about, Gregory, is a plan I have to jerk Jim’s chain. Do you think we could work together on this?

GD: I have no problem, Robert. What do you have in mind?

RTC: Well, Jim is a class A asshole as I may have mentioned. I introduced him to his wife which I now regret. Jim is a boor and I was not aware of it at the time. As you know, or perhaps you don’t, he ran your friend Mueller when he worked for us. First he ran him in Switzerland where he was working for Swiss intelligence and then they brought Mueller over here because he was too important to leave in Europe . The Jews know he got away and they’ve been looking for him so we brought him over here. It’s safer that way. You understand that we’re officially bosom buddies with them but actually they hate us because we do business with the Arabs for oil and they don’t like that.

GD: But they don’t have any oil.

RTC: Yes, I know. But to get back to Jim again. He knows about your Mueller books and he and his friends are very worried about what you do, or don’t, know. You have not mentioned Jim’s name yet so he is now on a fishing expedition to see just what you know and, more important, what proof you have Mueller worked for the Company.

GD: I have enough proof. New name, pictures of him and Truman, CIA ID cards and so on.

RTC: Fine, that’s what I believe. Anyway, Jim has ordered your book and wants me to talk him up to you so you will talk to him. He thinks he is very slick and he can pick your brains. I never bothered to tell him that you are twice as smart as he is and are much more likely to pick his brains. And that’s one of the things I want you to do. Jim wants to call you up and make nice with you. You know, praise you without actually committing himself. I suggested he write you a letter first to make introductions so you can expect this in a week or so. After that, he will want to talk to you. Of course he will have one of his friends on the other line and will, 100%, tape you so be very careful what you admit to him. He’s got his reputation to defend here and also he’s writing a book on Gehlen. Now you knew Gehlen…when was that again?

GD: 1951, in the summer.

RTC: Any proof of this?

GD: My memory, which is very good plus two pictures. One is of Gehlen during the war as a general officer and one is a snapshot of both of us standing in front of his house on the lake.

RTC: I believe you, Gregory, but Jim might want proof. Of course he will be very diplomatic about this. Also, he is being told you were in military intelligence under another name. Just be deliberately vague if he wants names or a unit number. You know the usual sort of “That’s still classified because of my work” crap. I’m sure you can pull this off.

GD: Thanks for your confidence, Robert. But I was only 17 at the time.

RTC: I doubt if he’ll ask you for your birthdate. Hint but do not be specific.

GD: Is he a little ex-cavalryman from the Dakotas ?

RTC: The same. Did I tell you that?

GD: No, I met him at Gehlen’s once and I never forget people.

RTC: I’m sure you don’t. Now the way I want to nail him is for you to imply that you have absolute proof Mueller worked for Crichfield and was here in the States.

GD: That’s not any kind of a problem. I should throw Willi Krichbaum in for some spice.

RTC: Willi…?

GD: Krichbaum. He was a Gestapo agent. A full colonel in the SS and Mueller’s standing deputy. In charge of the southwestern border guards which was under the control of the SS. Willi then ran the Secret Field Police for the Army and this was staffed mostly with Gestapo and SD men. When I met Willi there, he was down at Bad Reichenhall as Gehlen’s chief recruiter. Mostly sought out and recruited SS and SD people for the Org.

RTC: And you knew him? Personally? Saw him? Talked with him there?

GD: Oh, yes, very well and if Critchfield asks me I can fill him in on all kinds of physical details. Don’t worry about that.

RTC: That will scare the shit out of him for certain.

GD: Good. I’m better than a laxative. What is the end goal here, Robert?

RTC: To convince him that you know all about him and like him, you too are writing another book. That’ll keep his bowels open. But don’t give away too much. If you mention papers, don’t say you have them at home or he’ll have someone break in and take them. He’s already said so.

GD: Will he shoot me?

RTC: No, but he’d like to. They are very angry with you, Gregory, but they know nothing substantive about you. Wolfe has been filling them with spiteful crap but then they have no respect for him at all. When did Mueller die?

GD: ’83. Buried in Oakland under his own name.

RTC: Don’t tell Jim that or they’ll dig him up or put down another stone. Sound authoritative but play your cards close to the vest. Something like, ‘as we both know” sort of thing. Oh, and by the way, they have another Hebrew stool pigeon working on all of this. Name of Naftali. Works at Yale teaching potential Foggybottom boys about security and so on. He’s a friend of Wolfe and be very careful of him if he calls you. He’d put a knife into you as soon as fart.

GD: Thanks for the heads-up, Robert. I have heard nothing from him yet but when I do, it’s up hill and down dale with the bs express.

RTC: Good.

GD: It’s too bad Mueller is dead. He would genuinely have enjoyed this idiotic crap. We did have some lovely conversations about life and all the insects in it. But given his background, he was a very decent sort of person all in all.

RTC: Yes, that was my impression, too. Correct and very sharp.

GD: And decent. It’s your dime. I can tell you a story about him and what he thought about a few personal things.

RTC: Go on.

GD: One time he asked me why I had such a cynical view of life. Was there a defining moment for me? There was, of course, there always is. I told him about the time when I was in high school and there had been a rash of locker thefts. Money, portable radios, sports equipment and so on was looted. Suddenly, the police called me into the front office and questioned me about this. Then they searched me physically and went into my own locker. I objected to being searched but they informed me I was not an adult and they could do what they liked. Most policemen are very stupid and it does not pay to discuss the law with them. Anyway, they found nothing at all. Then they went to my home and of course my mother welcomed them in and let them tear my room up. They didn’t find anything there, either. But I was blamed for this by everyone. Kids demanded I return their dad’s radio or their money and so on, the teachers made snide remarks about me in front of the classes and my family said that I must have done something wrong or the precious police would never have come by. I can assure you that I had nothing to do with any of this. I had a Russian friend at school and he was known to be very handy with his fists so I never got smacked around but I can guarantee that it was not a pleasant time. So, one day, a janitor came out of a supply closet and saw someone looting a locker. He grabbed him and dragged him to the office. The police came, searched him and his locker and found concrete evidence that he, not I, was the thief. He confessed and the loot was returned except for the cash which his rich parents gave back. He was from a good family, as they say, so instead of juvenile detention center, he was allowed to go to a private school to learn how to become a valued member of society without being caught.

When I told this story to Mueller, he looked at me and asked me to finish the story. I told him I had. He said I had not. What did he mean by that? He asked me if I looked like the thief and I said I did not. Then he asked me if anyone had apologized to me for my harassment and I said no, that no one had ever apologized to me. He said that surely my own family had said something and I said that they had not. And no one at the school ever talked to me again and I am positive that most of them still believe I stole thousands of dollars from their lockers. And then Mueller said that this was, in his opinion, disgusting and said, and I have not forgotten this, that he would apologize to me for those who did not. I told him not to say this because he would never have done this and not to apologize. I thought it was a very decent thing for him to say and I never forgot it.

RTC: Now that’s a terrible experience, Gregory. People are such royal shits, aren't they?

GD: That’s a very perceptive and very true observation, Robert.

RTC: It must be frustrating to realize that there’s nothing you could have done about it.

GD: Oh, I did do something about it, Robert, I did indeed.

RTC: Care to tell me about it?

RTC: Vicarious pleasure for you Robert? Very well, I’ll tell you but I warn you, you might not have any respect for me afterwards. Shall I go on?

RTC: You know my former business, Gregory. I would not condemn you. Given your talents, I would really like to know how you got even.

GD: Very well. Consider yourself warned. I had a friend who was, to be kind, very strange. The so-called normal people didn’t like me. Anyway, I should preface this by saying that at that high school, the students all had to eat lunch in their cafeteria. If your family wrote a note, you could go home for lunch and I had such a letter. One day, about two months after this locker business, my friend and I went downstairs into the cafeteria to see if we could find any cookies. It was later in the afternoon and there was no one about. Nothing. All the cookies, cakes and so on were locked up. But I noticed a very large stock pot slowly bubbling on the range. In one of the unlocked cupboards, I found three gallon jugs of commercial detergent. The label said the contents were odorless and tasteless and designed for use in restaurants to avoid alien tastes getting into prepared foods. I could see at once what to do so without further ado, as they say, I dumped all three gallons into the soup stock pot….

RTC: My God, Gregory!

GD: Well, I told you. Ah, but the best part was the next day. It was a Friday and after I came back to the school when I finished my delicious, nourishing lunch at home, my first afternoon period was a study hall. I and my girlfriend signed in and then took off. I figured that by that time, the student body was primed and ready to go. Of course I didn’t tell her to spare her feelings. We were standing by my locker, right by an exit door, when about one twenty someone ran down the hall and into the only lavatories in the school, right down the hall. This was followed by a few more and then by many more. There was a stampede of sorts. Of course the bathrooms were small and couldn’t handle the traffic. Panic and humiliation, Robert. Accidents in the hall, in doorways, outside the door behind me on the steps. I recall the hero quarterback of our beloved football team, a prime asshole, running frantically down the hall, slipping on a pile of crap and crashing down onto his back. And from his expression, it was obvious that his reason for visiting the jammed john was gone. He got up and walked, bowlegged, for the back door. Humiliation. He should have tied his shoelaces around his ankles to save the floor but at that point, the floor was past saving. It smelt like a cross between a public lavatory in France in July and a cow barn.

RTC: (Laughter)

GD: And I recall my French girl friend pointing to a girl and screaming with laughter. She was pointing at Geneva , a tennis champion on the school tennis team. Geneva was a prime bitch and my girl friend hated her. Poor, vain Geneva . She was wearing a nice white pleated wool tennis skirt and was weeping with shame because she had had a very obvious accident. It looked, Robert, exactly as if she had sat down on a pumpkin pie.

RTC: (Laughter)

GD: All in all it looked like a painting by Bosch, some ancient view of Hell. Shouts, thundering feet, flatulence, cries of dismay and other really delightful background noises. We finally exited by the door and had to step carefully to avoid the messes on the steps and I distinctly recall legions of the afflicted voiding their watery bowels all over the lawns and into the parking lot. And it was even worse on Monday. You see, they had no idea I had salted the soup so there was another episode on Monday. This time, there was a good deal of profitable work for the local proctologists, not to mention the sudden surge in business for the dry cleaners.

RTC: You are quite mad, Gregory. But remarkable. Was your honor satisfied?

GD: I think so. I haven’t laughed so hard since my evil aunt fell into the septic tank. Mueller didn’t have to apologize after all.

RTC: Did you ever tell him about this? He seemed like such a very serious person.

GD: He laughed even louder than you did a few minutes ago, Robert. I will have no trouble dealing with your Critchfield, Robert, don’t worry about that.

RTC: Remind me to never eat lunch at your house, Gregory.

GD: Well, everything came out in the end, Robert.

RTC: (Laughter)

GD: Are you disgusted with me?

RTC: No, entertained.

GD: The custodians were not amused. One of them told me the lavatories were a real horror show and it took a week to clean everything up. They had to scrape the walls. But my honor was avenged and that’s all that mattered. Of course I could have put something else into the soup pot but I’m not that sort of a person.

(Concluded at 9:15 AM CST )

The 9/11 Timeline

by Brian Harring

Editor’s note: A thick growth of rumor now effectively masks any factual study of the 9/11 terror attacks. This lengthy report was compiled from many reliable period  news sources and is presented here as a matter of general information

August 4-30, 2001 : President Bush spends most of August 2001 at his Crawford, Texas , ranch, nearly setting a record for the longest presidential vacation. While it is billed a “working vacation,” ABC reports Bush is doing “nothing much” aside from his regular daily intelligence briefings. [ABC 8/3/01 ; Washington Post 8/7/01 ; Salon 8/29/01 ] One such unusually long briefing at the start of his trip is a warning that bin Laden is planning to attack in the US , but Bush spends the rest of that day fishing (see August 6, 2001 ). By the end of his trip, Bush has spent 42 percent of his presidency at vacation spots or en route. [ Washington Post 8/7/01 ] At the time, a poll shows that 55 percent of Americans say Bush is taking too much time off. [ USA Today, 8/7/01 ] Vice President Cheney also spends the entire month in a remote location in Wyoming . [ Jackson Hole News and Guide 8/15/01 ]

                    August 6, 2001 : The CIA  presented a warning to the President, explicitly concerned with terrorism inside the United States , indicating that bin Laden might be planning to hijack commercial airliners. The memo read to him is titled “Bin Laden Determined to Strike in US”, and the entire memo focuses on the possibility of terrorist attacks inside the US . [Newsweek, 5/27/02 , New York Times, 5/15/02 ] The actual content of this message has been the subject of considerable debate, with White House officials understandably downplaying its significance.[Sources: Time May 16; New York Times, May 16, 2002 ]

                    August 15, 2001 : An alert civilian instructor at a Minnesota flight school called the FBI and said, "Do you realize that a 747 loaded with fuel can be a bomb?" The next day; Zacarias Moussaoui was arrested. After investigating Zacarias Moussaoui's past, the FBI (with the help of French Intelligence) learned that he had Islamic extremist connections. They also knew that he was interested in flight patterns around New York City, and that he had a strong desire to fly big jets, even though at the time he didn't have so much as a license to fly a Cessna

August 16, 2001 : The FAA issues a warning to airlines concerning disguised weapons. According to later testimony by National Security Advisor Rice, the FAA is concerned about reports that the terrorists have made breakthroughs in disguising weapons as cell phones, key chains and pens [CNN 3/02; Reuters 5/16/02] However, the major airlines later deny receiving such notification. For instance, a Delta spokesperson states: “We were not aware of any warnings or notifications of any specific threats.” [Fox News 5/16/02 ]

August 20, 2001 : the French government made a similar report concerning their knowledge of Muslim terrorist attacks against prominent US targets.

August 8-23, 2001 : Two high ranking Israeli Mossad agents come to Washington to warn the FBI and CIA that up to 200 terrorists have slipped into the US and are planning an imminent major assault in the US . Indications point to a highly visible target. [Sources: Telegraph, 9/16/01 , Los Angeles Times, 9/16/01 , Fox News, 5/17/02 ] The Mossad gives the CIA a list of terrorists. A major Israeli spy ring was hard on the heels of at least four members of the 9/11 hijackers, including lead hijacker Mohammed Atta. [Source: BBC, 10/2/01 ]

August 24, 2001: The head of the Israeli Mossad warned both the CIA and the FBI reported the imminence of an Arab attack against American targets, that as many as 200 al Qaeda members were infiltrating the US and planning "a major assault on the US" against "a large-scale target" in a setting where Americans would be "very vulnerable." and a similar report was made by the same agency on September 7, 2001.

August 24, 2001 : Frustrated with lack of response from FBI headquarters about detained suspect Moussaoui, the Minnesota FBI begins working with the CIA. The CIA sends alerts calling him a "suspect 747 airline suicide hijacker." Three days later an FBI Minnesota supervisor says he is trying keep Moussaoui from “taking control of a plane and fly it into the WTC." [Source: Senate Intelligence (Hill #2), 10/17/02 }] FBI headquarters chastises Minnesota FBI for notifying the CIA. [Source: Time, 5/21/02 ]

August 2001: Britain gives the US another warning about an al-Qaeda attack. The previous warning was vague. This one specifies imminent multiple airplane hijackings by al-Qaeda. [Source: Sunday Herald, May 19, 2002 ]

                Late August, 2001: The CIA asked the INS to put these two of the hijackers  , Khalid al-Midhar and Nawaf Alhazmi, on a watch list because of their ties to the bombing of the U.S. S. Cole. On August 23, 2001 , the INS informed the CIA that both men had already slipped into the country: Immediately thereafter, the CIA asked the FBI to find al-Midhar and Alhazmi. This should not have been difficult in light of the fact that one of them was listed in the San Diego phone book, and the other took out a bank account in his own name, and finally, an FBI informant happened to be their roommate.

August/September, 2001: The Dow Jones Industrial Average drops nearly 900 points in the three weeks prior to the attack. A major stock market crash is imminent.

Sept. 3-10, 2001 : MS-NBC reports on September 16 that a caller to a Cayman Islands radio talk show gave several warnings of an imminent attack on the U.S. by bin Laden in the week prior to 9/11.

                September 7, 2001 : President Bush's plan to visit a Sarasota , Florida elementary school on September 11 is publicly announced. According to a later news article, numerous eyewitnesses see hijackers Atta and Marwan Alshehhi in Sarasota later that evening. They appear to have stayed at a Holiday Inn very close to the place Bush will later stay. [Longboat Observer, 11/21/01 ]

                September 6-7, 2001 : 4,744 put options (a speculation that the stock will go down) are purchased on United Air Lines stock as opposed to only 396 call options (speculation that the stock will go up). This is a dramatic and abnormal increase in sales of put options. Many of the UAL puts are purchased through Deutschebank/AB Brown, a firm managed until 1998 by the current Executive Director of the CIA, A.B. "Buzzy" Krongard. [Source: The New York Times; The Wall Street Journal.]

September 10, 2001 : 4,516 put options are purchased on American Airlines as compared to 748 call options. [Source: above]

September 6-11, 2001 : No other airlines show any similar trading patterns to those experienced by UAL and American. The put option purchases on both airlines were 600% above normal. This at a time when Reuters (September 10) issues a business report stating, "Airline stocks may be poised to take off."

September 6-10, 2001 : Highly abnormal levels of put options are purchased in Merrill Lynch, Morgan Stanley, AXA Re(insurance) which owns 25% of American Airlines, and Munich Re. All of these companies are directly impacted by the September 11 attacks.

It has been documented that the CIA, the Israeli Mossad and many other intelligence agencies monitor stock trading in real time using highly advanced programs reported to be descended from Promis software. This is to alert national intelligence services of just such kinds of attacks. Promis was reported, as recently as June, 2001 to be in Osama bin Laden's possession and, as a result of recent stories by FOX, both the FBI and the Justice Department have confirmed its use for U.S. intelligence gathering through at least this summer. This would confirm that CIA had additional advance warning of imminent attacks. [Sources: The Washington Times, June 15, 2001 ; Fox News, October 16, 2001 ]

  September 10, 2001 : the NSA intercepted two messages in Arabic. One message read: “Tomorrow is zero hour” and the second “The match begins tomorrow.” [Source: New York Times, August 10, 2002 ] [Source: Reuters, June 19, 2002 ] On June 19, 2002 , CNN reported the contents of these two National Security Agency intercepts. Other news outlets, including The Washington Post, also reported on the intercepts.  [Source: New York Times, August 10, 2002 ]

September 10, 2001: A particularly urgent warning was received the night before the attacks, causing some top Pentagon brass to suddenly cancel travel plans for the next morning, apparently because of “sudden security concerns ‘ . [Source: Newsweek September 12, 2001 ] “Why that same information was not available to the 266 people who died aboard the four hijacked commercial aircraft may become a hot topic on the Hill." [Source: Newsweek, 9/13/01 ]

September 10, 2001 : Bush flew to Florida to visit with his brother Governor Jeb Bush. Attorney General Ashcroft rejects a proposed $58 million increase in financing for the bureau's counter-terrorism programs. On the same day, he sends a request for budget increases to the White House. It covers 68 programs, but none of them relate to counter-terrorism. He also sends a memorandum to his heads of departments, stating his seven priorities—none of them relating to counter-terrorism. This is more than a little strange, since Ashcroft stopped flying public airplanes in July due to terrorist threats (see July 26, 2001 ) and he told a Senate committee in May that counter-terrorism was his “highest priority.” [ New York Times, 6/1/02 , Guardian, 5/21/02 ]

September 10, 2001 : Just prior to 9/11, the CIA and FBI don't have enough staff working on al-Qaeda. 17-19 people are working in the FBI's special unit focusing on bin Laden and al-Qaeda. [Senate Intelligence Committee, 9/18/02 ] The FBI has a $4.3 billion anti-terrorism budget, but of its 27,000 employees, just 153 are devoted to terrorism analysis. [Sydney Morning Herald, 6/8/02 ] The FBI's “analytic expertise had been ‘gutted’ by transfers to operational units” and only one strategic analyst is assigned full time to al-Qaeda. The FBI office in New York is very aware of the threat from bin Laden, but many branch offices remain largely unaware. [Senate Intelligence Committee, 9/18/02 ] A senior FBI official later tells Congress that there are fewer FBI agents assigned to counter-terrorism on this day than in August 1998, when the US embassy bombings in Africa made bin Laden a household name. [ New York Times, 9/22/02 ] The CIA has about 35-40 people assigned to their special Bin Laden unit. It has five strategic analysts working full time on al-Qaeda. [Senate Intelligence Committee 9/18/02 ] The CIA and FBI later say some of these figures are misleading. [ New York Times 9/18/02 ] “Individuals in both the CIA and FBI units… reported being seriously overwhelmed by the volume of information and workload prior to September 11, 2001 .” Despite numerous warnings that planes could be used as weapons, such a possibility was never studied, and a Congressional report later blames lack of staff as a major reason for this. [Senate Intelligence Committee, 9/18/02 ] Senator Patrick Leahy (D) also notes: “Between the Department of Justice and the FBI, they had a whole task force working on finding a couple of houses of prostitution in New Orleans . They had one on al-Qaeda.” [CBS 9/25/02 ]

                September 11, 2001 : Employees of Odigo, Inc. in Israel , one of the world's largest instant messaging companies, with offices in New York , receive threat warnings of an imminent attack on the WTC less than two hours before the first plane hits the WTC. Law enforcement authorities have gone silent about any investigation of this. The Odigo Research and Development offices in Israel are located in the city of Herzliyya , a suburb of Tel Aviv which is the same location as the Institute for Counter Terrorism which breaks early details of insider trading on 9-11. [Source: Ha'aretz, 9/26/2001 , Reuters, June 19, 2002 ]

             September 11, 2001 : For 35 minutes, from 8:15 AM until 9:05 AM , with it widely known within the FAA and the military that four planes have been simultaneously hijacked and taken off course, no one notifies the President of the United States . It is not until 9:30 that any Air Force planes are scrambled to intercept, but by then it is too late. This means that the National Command Authority waited for 75 minutes before scrambling aircraft, even though it was known that four simultaneous hijackings had occurred -- an event that has never happened in history. [Sources: CNN, ABC, MS-NBC, The Los Angeles Times, The New York Times.] The responsibility for protecting America 's skies from terrorist attack falls upon the North American Aerospace Defense Command (NORAD, also simply called the "Space Command."). Established in 1958, NORAD is a US-Canadian command that provides warning of missile and air attack against both member nations, according to the organization's Web site. In the Eastern US , NORAD has at its disposal, several Air Force Bases from which F-16s and F-15s can be scrambled at a moment's notice. Among these bases are Otis AFB in Cape Cod, Mass, Hancock AFB in Syracuse, NY -home of the 174 Fighter Wing of F-16's- Andrews AFB just outside DC, and Langley AFB in Eastern Virginia. NORAD's mission statement on its website states:

                    "The Northeast Air Defense Air Sector's area of responsibility covers more than one-half million square miles of airspace including that over New York City ; Washington , D.C. ; Chicago and other major metropolitan areas."

THE CHAIN OF COMMAND DURING A TERRORIST ATTACK:

A: The FAA reports hijackings and other threats to NORAD's First Air Force Commander, who is based in Tyndall , FLA. On Sept. 11, this was Gen. Larry K. Arnold.

B: The First Air Force Commander then relays this info to The Commander in Chief (CINC) of NORAD. On 9/11, this was Gen. Ralph "Ed" Eberhardt

C: In a grave situation where force seems warranted, the CINC reports to the Commander in Chief......George Bush. Also notified are Secretary of Defense Donald Rumsfeld and acting Chairman of the Joint Chiefs of Staff, Richard B. Myers

The fact that NORAD was well aware that a major attack was a possibility is made obvious by the command's planning, well before Sept. 11, for a major exercise, slated for June 4, 2002 .

"On June 4, 2002 , the North American Aerospace Defense Command (NORAD) will sponsor a multi-agency, bi-national exercise, Amalgam Virgo 02, involving an airborne terrorism scenario over the United States and Canada . The exercise, which was planned prior to the events of Sept. 11, is designed to allow many US and Canadian agencies to test, improve and validate their coordination and operational procedures." [NORAD Operational Paper}

Regardless of what warnings Bush may have received, NORAD was well aware of the threat to American skies.

September 11, 2001 : Did the Air Force send up planes after the hijacked aircraft? The Air Force won't say. It says they keep about 20 F-15 and F-16 fighters on duty with Air National Guards along the nation's coastline, ready to inspect unknown aircraft entering U.S. airspace. "We can scramble and be airborne in a matter of minutes," said an Air Force spokesperson. Some airline pilots are wondering whether the FAA did enough to try to prevent the crashes.[Source: Wall Street Journal, September 14, 2001 ]

Department of Defense ( 6/1/01 ) and FAA ( 7/12/01 ) procedure: In the event of a hijacking, the FAA hijack coordinator on duty at Washington headquarters requests the military to provide escort aircraft. Normally, NORAD escort aircraft take the required action. The FAA notifies the National Military Command Center by the most expeditious means. [Sources: DoD.. 6/1/01 , FAA, 7/12/01 , FAA, 7/12/01 ] If NORAD (North American Aerospace Defense Command) hears of any difficulties in the skies, they begin the work to scramble jet fighters [take off and intercept aircraft that are off course]. Between Sep 2000 and June 2001 fighters were scrambled 67 times. [ Source: AP, 8/12/02 ] When the Lear jet of golfer Payne Stewart didn’t respond in 1999, F-16 interceptors were quickly dispatched. According to an Air Force timeline, a series of military planes provided an emergency escort to Payne’s stricken Lear about 20 minutes after ground controllers lost contact with his plane .[Source: Dallas Morning News, 10/26/99]

7:59 AM : American airlines flight 11, a Boeing 767 takes off from Logan Airport in Boston with 92 people, headed for Los Angeles .

8:01AM : United Airline Flight 93, a Boeing 757, bound for San Francisco , is delayed for 40 minutes on run way, with 45 people on Board.

8:13 AM : Boston Ground control loses contact with Flight 11 First red flag for Flight 11.

8:14 AM : United Flight 175, a Boeing 767, takes off from Logan for Los Angeles with 65 passengers.

8:17 AM : American Airlines Flight 77 (Boeing 757) leaves Dulles in D.C. headed for Los Angeles with 64 passengers

8:20 AM (approx.): Air traffic controllers suspect Flight 11 has been hijacked. [Source:  New York Times, 9/15/01 ]

8:20 AM : Flight 11 reaches the Hudson River in NY and stops transmitting its IFF signal. Second Red flag for flight 11. Had Bush put the airlines on high alert after August 6 when he received the warning, there is no doubt at all that these warnings would have evoked at very different response...if, indeed, the hijackers had even gotten that far (under a high alert, they very well may have been apprehended at the airports).

8:24 AM : Hijackers on Flight 11 accidentally broadcasts warning to the passengers over its radio: "Everything will be OK. If you try to make any moves, you'll endanger yourself and the airplane. Just stay quiet." Third Red Flag for flight 11.

8:25 AM : Boston air traffic controllers notify other air traffic control centers of hijacking. Why wasn't NORAD (North American Aerospace Defense Command) notified at this time?

8:27 AM : Flight 11 heads south toward Manhattan ; flight attendant Betty Ong calls American Airlines reservations and reports that two flight attendants had been stabbed and a passenger had had his throat slashed. She identifies the seat numbers of the hijackers. Fourth red flag for flight 11 - this one a BLOODY RED and wildly waving, yet it will be about 10 minutes AFTER THIS before NORAD is notified.

8:33 AM : Last transmission from Flight 11: Hijacker is heard telling passengers not to move.

8:38 AM : Boston Air Traffic control notifies NORAD that Flight 11 has been hijacked.

8:40 AM : NORAD is notified of hijacking. [Sources: New York Times, 10/16/01 , Washington Post, 9/15/01 ]

8:42 AM : Flight 175 is hijacked. It begins to make a U-turn over New Jersey , reading for its northward assault on Manhattan .

8:42 AM : Flight 93 takes off from Newark International Airport , headed for San Francisco .

8:43 AM : FAA notifies NORAD that Flight 175 has been hijacked.

8:44 AM : Two F-15 eagles are ordered scrambled out of Otis Air National Guard Base in Cape Cod . If NORAD had been notified at 8:27 , when the plane was obviously hijacked and heading to NYC, an F-16 from Otis or Griffis would have been about 10 minutes from Manhattan at this point. In addition, since the WTC was high on the list of known targets, and since some of the warnings to Bush indicated airplanes could be used as "bombs," the WTC should have been given an alert and the building evacuated. If evacuation had started at 8:30 , there would have been no one in the upper floors when the first plane hit and the loss of life would have been minimized.

8:45 AM : Flight 11 strikes WTC's north tower at the 80th floor.

8:46 AM : Flight 175 stops transmitting beacon signal.

8:52 AM : Two F-15s take off from Otis Air Force Base. [ Source: Washington Post, 9/15/01 ]  They go after Flight 175. Major General Paul Weaver, director of the Air National Guard, states "the pilots flew like a scalded ape, topping 500 mph but were unable to catch up to the airliner. We had a nine-minute window, and in excess of 100 miles to intercept 175,'' he said. ''There was just literally no way.'' [ Source: Dallas Morning News, 9/15/01 ] F-15's fly at up to 2.5 times the speed of sound [1875 mph or 30+ miles a minute or 270+ miles in nine minutes] and are designed for low-altitude, high-speed, precision attacks. [ Source: BBC]

8:56 AM : Flight 77's transponder is cut and it is evident that Flight 77 is lost. The FAA, already in contact with the Pentagon about the two hijackings out of Boston , reportedly doesn’t notify NORAD of this until 9:24 , 28 minutes later. [Source: New York Times, 10/16/01 ] If F-15s had been scrambled from Otis at 8:27 , they would now be in a position to engage the hijacked flight 175 headed for the WTC.

9:00 AM : United Airlines learns that Flight 93 flying over western PA may be in process of being hijacked.

9:00 AM : Flight 77 makes U turn and heads back for Washington . This is when the FAA should have notified NORAD, and NORAD should have ordered F-16s into the air FROM ANDREWS. If they had, by 9:15 , F-16s may have been in a position to deflect Flight 77 AWAY from DC altogether.

9:03 AM : Flight 175 crashes into the south WTC tower at the 60th floor. [23 minutes after NORAD notified, 43 minutes after air traffic control lost contact with pilots] [Sources: New York Times, 9/12/01 , CNN, 9/12/01 ]

9:10 AM : Major General Paul Weaver states Flight 77 came back on the (radar) scope at 9:10 in West Virginia . [ Source: Dallas Morning News, 9/15/01 ] Another report states the military was notified of Flight 77 several minutes after 9:03 . [Source:  Washington Post, 9/1/01 ]

9:16 AM : FAA informs NORAD that Flight 93 may have been hijacked.

9:17 AM : Federal Aviation Administration closes all airports.

9:24 AM : The FAA, who 28 minutes earlier had discovered Flight 77 off course and heading east over West Virginia , reportedly notifies NORAD.   A Pentagon spokesman says, "The Pentagon was simply not aware that this aircraft was coming our way." [Sources: Newsday, 9/23/01 , New York Times, 9/23/01 ]Yet since the first crash, military officials in a Pentagon command center were urgently talking to law enforcement and air traffic control officials about what to do. [Source: New York Times, 9/1/01 ] NORAD orders three F-16s scrambled from Langley . There is not enough time for either a jet from Langley , which will be 10 minutes too late, or one from Andrews, which would have had just about 3 minutes between reaching the airspace over D.C. and dealing with the incoming Boeing 757.

9:25 AM : Air traffic controllers notify Secret Service as Flight 77 makes dramatic maneuver just south of the Pentagon.

9:28 AM : Air traffic control learns that Flight 93 has been hijacked. [Source:  MSNBC, 7/30/02 ]

9:29 AM : While the al Qaeda attack was in progress our Commander-In-Chief was busily engaged in reading a goat story with second-graders at the Emma E. Booker School in Sarasota , Florida , and was allegedly informed that an "apparent terrorist attack"  was under way. No orders are give to evacuate any buildings in D.C., or to even urge residents and workers to seek shelter. According to Gwen Rigell, principal of the Booker School , Verizon installed 49 telephone lines at the school just prior to Bush’s supposedly routine visit.

9:38 AM : Flight 77 crashes into the Pentagon. [42 minutes or more after contact was lost, one hour after NORAD notification of first hijacking] [Sources: New York Times, 10/16/01 , CNN, 9/12/01 ]

9:40 AM : Three F-16s take off from Langley . They reach Washington by 9:55 , moving at least 550 mph. - the trip takes 14 minutes. The time from Andrews to D.C.: under 2 minutes. The time from Bolling: almost instantaneous.. Here is a description of Andrews from its website: "Training for air combat and operational airlift for national defense is the 113th's primary mission. However, as part of its dual mission, the 113th provides capable and ready response forces for the District of Columbia in the event of a natural disaster or civil emergency."

9:43 AM : Plane crashes into Pentagon - a full 40 minutes after being reported hijacked and the likelihood of its being used as a weapon of mass destruction obvious. You will notice that now, everything seems to start happening - it seems as if everything were put on hold until the Pentagon was struck.

9:45 AM : White House evacuates.

9:57 AM : Bush leaves Florida grammar school event along with his personal staff.

10:05 AM : South Tower of World Trade Center collapses.

10:08 AM : Armed agents deployed around White House.

10:10 AM :. Flight 93 crashes in Pennsylvania . [42 minutes after contact was lost][Source:  CNN, 9/12/02 ]. Part of Pentagon collapses

10:13-10:45 AM : All Federal buildings in D.C. evacuated.

10:28 AM : WTC north tower collapses.

10:46 AM : Colin Powell heads for D.C. from Latin America . It should be noted here that  Secretary of State Colin Powell is in Latin America,  President George Bush is in Florida, Attorney General John Ashcroft in Missouri, and Secretary of Defense Donals Rumsfeld in the part of the Pentagon most remote from the impact point.

1:04 AM : Bush speaks from Barksdale Air Force Base in Louisiana .

1:27 AM : State of emergency declared in D.C.

1:44 AM : U.S. Naval units from Norfolk are deployed to protect coastline.

2:00 AM :  Bush at Offutt AFB in Omaha NE. Also at Offutt that day from 8:00 AM , are several  important American CEOs -attending a  purported charity event (not disclosed) that is interestingly held at a  secure Air Force base well-removed from Washington and New York .

6:54 AM : Bush back in White House.

8:30 AM : Bush addresses nation

Comment: There is no question that the Bush administration should have been amply warned of a pending terrorist attack but it did nothing to prerpare for it. This is either the result of utter stupidity or connivance at silence to allow the attack to proceed for political reasons.  Brian Harring

Fraud and the subprime bubble
July 24, 2008

by George Pugh

Asia Times

                The subprime crisis is ending in massive losses, bare balance sheets and wilted capitalizations: a true rite of spring. Early theories blamed the crash on corporate greed, bad product design, poor analytics, rating agency failures, and fraud, in various combinations.

                The US Federal Reserve Board is now asking for tighter regulation of the brokerage industry, while in truth fraud started with the mortgage originators, which helped cause the collapse of the market, while the firms that are now being blamed are actually the victims rather than the perpetrators of the fraud.

                The Sarbanes Oxley Act of 2002, with its supporting regulations, was supposed to curb fraud at the company level by improvinginternal controls and emphasizing management responsibility for accurate financial reporting: in that aspect it is a signal failure.

The subprime mortgage-based CDO

                Germany 's President Horst Koehler has blamed the subprime crisis on highly leveraged investments in complex financial instruments. Actually the subprime instruments were the result of increased investor sophistication. The firms held product inventories not for speculation but rather as a service to their customers for collateralized debt obligations (CDOs) and to provide general liquidity in a counter-party market.

                CDOs were first issued in the late 1980s by the now defunct Drexel Burnham Lambert of junk-bond fame. The CDO is an entity that holds collateral and sells cash flows, with varying seniorities organized into tranches broken down by asset-quality risk. They are popular because they can be large, meet the demand for cash-flow only products and are more profitable for the issuer than traditional debt instruments: they are a legitimate product filling an actual demand rather than being a speculative tool.

                Banks have long issued CDOs collateralized by mortgage-backed securities (MBS) containing prime mortgages, that is, in the US , ones eligible for Fannie Mae, Freddie Mac and Ginnie Mae guarantees. Subprime mortgages have no such protection, so for that lack alone they are at once more risky because of the range of borrower credit quality.

                Many have terms that give the borrower the ability to pick a payment size - full (principle and interest), interest only or some mix of the two. In addition, many are adjustable-rate mortgages (ARMs) that switch from a fixed to variable rate after the first two years, called the "2-28" option. The variable rate is set at say 5% over the 12-month London interbank offered rate after the initial fixed period. There is generally a very high cap, say 15% on the rate. Developing the common risk profile needed to create CDOs is both expensive and difficult for these assets because of the wide range of terms and uninsured asset risk (mortgages).

                CDOs are designed to provide separate cash flows, risk defined by the tranche from which each is drawn. The complicating factor is that the underlying instruments, MBSs funded by subprime mortgages, do not have easily estimated cash flows. [1]

Doing the math

                Despite initial reactions in the news, the firms in question managed their risks extremely well, considering the unanticipated element of fraud, which thanks to the Sarbanes Oxley reforms they had no rational expectation of encountering. The best single assessment of the firms' response quality is found in "Observations on Risk Management Practices during the Recent Market Turbulence" by the Senior Supervisors Group of the Bank of International Settlements, dated March 6, 2008 . Though the study did not include the whole universe of firms involved, it covered 11 of the largest banking and security firms, along with an additional five present at the round table discussion, which were all there to the end.

This report outlines supervisors' observations on the risk-management practices that may have enabled some firms to weather the financial market turmoil better than others from summer 2007 through year-end 2007. Specifically, supervisors focused on practices related to the following:

·  The role of senior management oversight in assessing and responding to the changing risk landscape;

·  The effectiveness of market- and credit-risk management practices in understanding and managing the risks in retained or traded exposures, and

·  The effectiveness of each firm's liquidity-risk management practices in assessing its vulnerability to that risk in a stressed environment and taking appropriate action. [2]

The key was management quality, which in this case turned on the ability to properly allocate capital and a solid understanding of market conditions.

Firms that managed their funding liquidity needs more successfully through year-end 2007 encouraged individual business lines to assess and communicate their likely needs for funding to the treasury function and to price those internal claims on liquidity appropriately in light of actual market conditions. [3]

These efforts were strongly related to intellectual flexibility and timely decisions. The more-successful firms were willing to revisit their assumptions and sometimes revert to simpler, risk-reducing measures.

In light of some firms' uncertainty about the accuracy of assumptions underlying their risk measures during the current period of turbulence, several firms cited the usefulness of revisiting simple notional limits to highlight potential concentrations of risk. [4]

These firms faired better than those that relied on assumptions that might not have been true. Some, by holding to their initial assumptions, finally lost sight of their total risk and did not do as well as others for that reason.

                There were other problems that required adjustment, which related to the tools used. One of the more important was related to value at risk (VaR):

Nevertheless, firms indicated that VaR, as a backward-looking measure of risk dependent on historical data, may never fully capture severe shocks that exceed recent or historical norms. ... Most of these exceptions were generated by much higher market volatility and realized asset price correlation than the historical data series implied. [5]

Data quality and an over-reliance on historical activity are always problematic. The data may have been smoothed by removing outliers, or not have taken in enough data to include extremes. Put another way, VaR data does not necessary reflect the current situation because of the number of prior periods used (generally five years) hiding the true level of volatility at the time.

                The firms also had to cope with the fact there was a confusion between the risk of CDOs and those of debt instruments, which were assumed to be equivalent and weren't.

In general, the construction of CDOs tends to make them more sensitive to systematic shocks. In contrast, highly rated corporate debt issuances tend to be more sensitive to "idiosyncratic" risk, or risks associated with characteristics specific to the corporation that issued the debt. [6]

The second problem is more profound: firms made assumptions about their CDOs that simply were not true. The only thing they have in common is the rating. Corporate debt is unique, being tied to one set of unique assets. The CDOs use fungible collateral, making them risky as a class. That is, if a corporation has problems, its debt value and rating may fall, but others in the class may not: it is company specific. For CDOs, if anything happens to the perception of the collateral, the shock will be universal. Management simply could not or would not see this simple difference and acted as if it didn’t exist because their models did not take the difference into account or did not recognize it.

                Though firms varied in how effectively the used their risk-management tools, good management simply used very similar ones better. In fact, considering that the tools handled the fraudulent collateral (mortgages) which was in no way anticipated, it can be said that any additional regulation at this level would be nugatory, except as political display. Mortgage fraud at this level was the sign of serious problems not of their making.

The subprime mortgage as an asset

 The subprime CDO was a remarkable new instrument. It was not until 2001 that any CDO pricing became cost effective, thanks to the adoption of Gaussian cupola models developed by David Xi. The models are simpler and cheaper to use than the Monte Carlo simulation method. The math was by no means suspect and it will be of note that the tool itself came under no criticism. [7]

                What made subprime-backed MBSs more problematic was the lack of guarantees concerning the underlying mortgage obligations by the US government. In this instance, the firms decided to purchase ratings for these instruments from the rating agencies. It must be noted that Moody's and the other rating companies were doing their risk assessment on the originator documents, and not on the underlying facts represented. Moody's structured-finance group grew to account for about 43% of Moody's revenue in 2006, up from 28% in 1998. By 2006, the firm had more revenue from structured finance - US$881 million - than its entire revenue had been in 2001. [8]

                More to the point, Moody's in particular was way overcommitted to the line of business and was subject to customer pressure very early on.

Consider a Bank of America mortgage deal in early 2001. As in most such deals, the vast majority of the securities based on the pool of mortgages would be rated triple-A. The question was how big a chunk would be rated lower - paying a higher interest rate and bearing the brunt of any defaults that occurred.

                A rating committee at Moody's voted to require that the issuer put about 4.25% of the deal's value in the lower-rated section, to provide extra protection for buyers of the top-rated section. But after Bank of America complained and said it might go with a different rating firm, Moody's reduced the size of the lower-rated chunk slightly, saving the issuer some interest costs, according to people with knowledge of the matter. [9]

The problem was twofold: first, Moody's regularized its business before the subprime market in all its forms really began to grow, and they were rating the terms and more importantly the component tranches rather than the mortgages that backed the MBSs. Lastly, there was fraud, and Brian Clarkson, the architect of Moody's role in this market, offers the following:

We knew that there was fraud. We may have thought it was X; [it turns out] it was X to the 10th power. We knew the risks were increasing, so we increased the protection. It was completely dwarfed. We were preparing for a rainstorm and it was a tsunami. We saw the increased risk, but we didn't see what appears to be an 18-month period where anything went. I hate going through this because it sounds defensive, but the fact is that there were people who were supposed to be doing due diligence on this who just didn't do it. [10]

The problem was that they were simply not there to find fraud nor were they looking for it, simply because that was not what they were hired to do, which was to review the tranches and the associated originator-provided credit scores.

The first tremor that rattled Merrill's profitable business of underwriting mortgage securities came at the end of 2005. As it repackaged mortgage bonds into securities called CDOs, Merrill had a key partner in insurer American International Group Inc. An AIG unit bore the default risk of the CDOs' largest and highest-rated chunk, known as the "super-senior" tranche, normally sold to big investors such as foreign banks.

                But AIG was keeping a close eye on the housing boom because it had another unit that made subprime loans, those to home buyers with weak credit. AIG did a review of the market. Concerned that home-lending standards were getting too lax, AIG at the end of 2005 stopped insuring mortgage securities. [11]

The problem or question about getting timely information alonemight have discouraged entry and certainly became a problem during the crisis. Not only were there questions about performance but actual fraud became much more of a concern, or should have.

In calendar year 2006, financial institutions filed 37,313 SARs citing suspected mortgage loan fraud, a 44% increase from the preceding year, compared to a 7% overall increase of depository institution SAR filings. One reason for this increase may be that lenders are increasingly identifying suspected fraud prior to loan approval and reporting this activity. Suspected fraud was detected prior to loan disbursements in 31% of the mortgage loan fraud SARs filed between April 1, 2006 , and March 31, 2007 , compared to 21% during the preceding ten years. Total SAR filings in 2006 on suspected mortgage loan fraud, when divided by the subject’s state address,2 showed the greatest increases in Illinois (75.80%), California (71.29%), Florida (53.04%), Michigan (51.50%), and Arizona (48.73%). [3]

                Mortgage brokers initiated the loans reported on 58% of the SARs sampled for this report. SAR reporting includes examples of brokers acting both as active participants in the reported fraudulent activity, and as intermediaries that did not verify information submitted on the loan application, according to the Financial Crimes Enforcement Network (FinCEN). [12]

Put another way, mortgage fraud "suspicious activity reports" (SARs) increased from 3,515 in 2000 to 25,898 in 2005 and in 2006 to 37,313. [13] Thus mortgage fraud was growing very rapidly during the period, and most firms took no action, with the exception of AIG and that was probably because AIG had special knowledge coming from another subsidiary that wrote subprime mortgages.

                The firms that collateralized CDOs were about the last to appreciate the fraud risks in the MBSs they used. Nonetheless they reacted to them as yet another unanticipated risk and in the majority of cases brought it under some control. Checking for fraud was not in their mandate, though it was in their interest to do so.

                Despite all the information available and the amount of money in play it is clear that any efforts at the originator level were meaningless, and that no one had thought about the issues even though it is clear that mortgage fraud was not a new issue.

Who's to blame?

 Clearly fraud played a very important role in this bubble, and that fraud began with the originators. The last time fraud was an issue, we later found that not all "cures" stand the test of time. The demand for preventative action always comes in the wake of a costly financial crisis like this one and the last one that had fraud in the mix. Retired Congressman Michael Oxley told of his dissatisfactions in an interview, highlighting also the role of the Public Company Accounting Oversight Board (PCAOB) which the Sarbanes Oxley Act established to oversee and discipline accounting firms in their roles as auditors of public companies:

The main thing is the enormous cost that was driven by the outside audit. It was Auditing Standard No 2 [the standard for auditing internal controls over financial reporting], promulgated by the PCAOB that started all the problems. Of the complaints you hear [about Sarbanes Oxley], 99.9% are about 404 [the section requiring management and an external auditor to report on the adequacy of a company's internal control over financial reporting]. It was two paragraphs long, but by the time the PCAOB was done, it was 330 pages of regulations. It was far too prescriptive and [more] expensive than anyone anticipated. [14]

The author of Sarbox thought that it was poorly designed, costly and in need of change after its full effects could be seen, so there is a need for any new rules to be well thought out to prevent similar problems in the future. Fraud was a major factor in this bubble and collapse, and Sarbox provided no amelioration or warning. It seems that Mr Oxley's misgivings were well placed. In this case, all the new rules and regulations which were in effect and evidenced in the SEC filings simply did not work as promised.

There is reason to doubt how seriously the SEC has taken the PCAOB. All the members of the predecessor Public Accounting Board and industry groups resigned in the face of then SEC chairman Harvey Pitt's plans for a new regulatory body which evolved into PCAOB.

                William Webster was appointed as first PCAOB chairman in 2002 and a few weeks later newspapers reported that he had served on the audit committee of US Technologies, which was being investigated for accounting irregularities. One of the SEC members, Harvey Goldschmid, had already claimed that the PCAOB candidates were not properly vetted and with that both Pitt and Webster resigned in November 2002. It is clear that the whole enterprise was ill-omened and had the elements of putting on a proper show rather than doing anything to lessen the opportunities for fraud:

·  Both the SEC and the American Institute of Certified Public Accountants, before the PCAOB took over the rule-making function, had incorporated the Treadway Commission Report (into fraudulent financing reporting) into their work. A critical rule is that the auditors make a revenue fraud and rebuttable presumption. That rule didn't seem to make any difference, based on the FinCEN figures quoted above.

·  The subprime loan instruments are only subject to limited recourse based on the retention of residual interest, and the recourse is limited to that interest. Absent demonstrable fraud, the originators gave only limited recourse to the buyers.

                Was there really fraud involved or are we just seeing name calling? First the firms themselves took definitive action to control the situation: Such actions show genuine surprise and a desire to solve the problem and in no way demonstrate mens rea, which ignoring the problem might.

... rigorous internal processes requiring critical judgment and discipline in the valuation of holdings of complex or potentially illiquid securities. These firms were skeptical of rating agencies' assessments of complex structured credit securities and consequently had developed in-house expertise to conduct independent assessments of the credit quality of assets underlying the complex securities to help value their exposures appropriately. [15]

This is probably the best proof that fraud caused the problem at the lowest level and that the people who received them were as much victims as others.

                The US Attorney General Michael Mukasey has issued a statement on the subject:

Yesterday, AG Mukasey rejected the idea of a national task force to combat the national mortgage crisis, leaving it to local prosecutors to oversee separate FBI investigations. According to this report in the New York Times, Mukasey called the problem a localized one akin to 'white-collar street crimes' and distinguished it from the Enron collapse, for which a task force was created. [16]

From both items it is clear that the frauds started with the people making fraudulent mortgage applications which were not caught by the people issuing the mortgages. The second conclusion is that the firms were only later involved and did not try to hide the problems in a meaningful way; though there may have been instances in some firms, it was by no means generalized.

Fraud and bubbles
               

It seems proper to make a brief detour and discuss how fraud plays an intimate roll in the creation of bubbles. Fraud distorts market signals for demand and more importantly growth in demand and price. In this instance, increased mortgage financing bid up existing stock and created a multiplier effect among existing home owners, who sought to reinvest their gains in larger properties. These price increases encouraged builders to build for the increased demand which was debt financed. Mortgage lenders were eager to keep up, and lowered their standards, even if no fraud was involved, to keep their competitive position. The risks were passed on to the purchasers, so the mortgage originators and their auditors simply did not see the contingent risk as large. It really doesn't take a lot of increase in demand to increase the growth in prices, feeding building and speculation.

                Up to this point, it is clear that mortgage fraud fed the bubble and that subprime loans were in the center ring. There is strong evidence that the firms that stayed in the market behaved well when contending with the fraud involved in the underlying instruments. It is also clear that SEC regulations, especially Sarbanes Oxley, are totally worthless in preventing or detecting fraud. It appears that the politicians want to further regulate the firms rather than look to their own regulatory failures.

Notes
1. This section was derived and condensed from general  internet sources, ‘Collateralized debt obligation’. 

2. Senior Supervisors Group of the Bank of International Settlements Observations on Risk Management Practices during the Recent Market Turbulence March 6, 2008 .
3. ibid p10

4. ibid p14
5. ibid p14
6. ibid p15
7. Mark S Joshi: Applying Importance Sampling to Pricing Single Tranches of CDOs in a one-factor Li Model.
 8. Lucchetti, Aaron. "Rating Game: As Housing Boomed, Moody's Opened Up", The Wall Street Journal, April 11, 2008 , pA1.
9. ibid
10. "Interview Excerpts: Moody's Executives Ratings Agency's Clarkson, McDaniel: 'We Make Assumptions With Losses'", Wall Street Journal, April 11, 2008 .
11. Pulliam, Susan; Ng, Serena; Smith, Randall. "Merrill Upped Ante as Boom In Mortgage Bonds Fizzled Fresh $6 Billion Hit Is Expected as Toll", The Wall Street Journal, April 16, 2008 ; pA1.
12. FinCEN (Financial Crimes Enforcement Network), Mortgage Loan Fraud April 2008.
13. FinCEN (Financial Crimes Enforcement Network) Mortgage Loan Fraud November 2006.
14. Taub, Stephen, CFO Magazine. "Oxley: I'm Not Happy with Sarbox" April 6,2007 .
15. Senior Supervisors Group of the Bank of International Settlements Observations on Risk Management Practices during the Recent Market Turbulence March 6, 2008 .
16. Law Blog, "Mukasey Sums Up Mortgage Crisis: Enron or No Enron?" The Wall Street Journal, June 6, 2008 ; pA1.


                George Pugh is president of George Pugh & Co, a New Jersey-based consulting firm. He is a Certified Public Accountant, has an MA from The Paul H Nitze School of Advanced International Studies (SAIS ) of The Johns Hopkins University, and an MBA from Rutgers University. Prior to that, he was a naval intelligence officer, brokerage auditor at PricewaterhouseCoopers, and lending officer at HSBC and NatWest.

ARTFRAUD

                We are pleased to initiate a long series of factual articles by Claude du Plessis, an art expert and specialist on art frauds. M du Plessis has written on many topics which include: Counterfeit Asian art, Jackson Pollack fakes, Frederic Remington remakes, Louis XV and XVI furniture, the secrets of the ’rare’ coin market, reproduction Monets, Renoirs and Picassos, counterfeit Russian icons, the great ‘Elmali hoard’ of fake Greek coins, modern ‘Etruscan’ art, the great ‘1804 U.S. silver dollar’ hoax and many more entertaining stories of past and current fraud and fakery, and a lengthy dissection of the ‘art as investment’ scams. Foreign and domestic art auction houses and galleries are dissected and the truth of the origins of a number of famous pieces are professionally dissected and presented to our readers for their interest and entertainment. Our first chronicle was an exposé of the once desirable bronzes by Auguste Rodin and this study is about the fake ‘art-as-investment’ scam and includes a warning about new IRS investigations. Ed.

The ‘Investment’ that isn’t: And a warning!

July 26, 2008

by Claude du Plessis

                I would like to talk a little about 'art-as-an-investment'  After all, we all know here that a 'signed and numbered' print by some hyped-up and third rate artist will never increase in value and in fact, a color print about 30" square, machine-signed and given an arbitrary print number is worth about $5 in manufacturing costs. 

                Why pay, say, $300, for such a print on the totally false assumption that "only 1000 [the standard ploy] will ever be issued!' ? (Note that if the print run is successful, the merchandisers have the plates and can run off thousands more. This would make an “exclusive” print utterly worthless.)  This is the 'Franklin Mint approach' to art marketing and because it is linked to the powerful [currently] art market, no one will talk about it critically. 

                I will. 

                When I was last in Europe, I bought many prints from excellent print shops, almost all of them of far better quality than the junk churned out by the American market and all of them under $50 but, of course, none were machine-signed and numbered or otherwise tagged so I suppose that's the reason I got such bargains. These prints being marketed, often with machine-signed signatures and spurious print editions, are not fakes but copies and they are worth only a few dollars and will never increase in value. In point of fact, if the owner has the print decently framed, the frame is worth far more than the print  

                Also, a specific warning. There are now rumors coming from informed sources in the United States that a plan either has been, or is being, instituted to gather information from holders of art pieces. The IRS is most interested in this hitherto untapped source of taxable property so all collectors are warned to be very careful about giving out or listing any specific information about valuable pieces of art in their possession. The U.S. government is in deep debt because of the Iraq war and the IRS has been ordered to find money wherever it can. CdP