TBR News July 19, 2010

Jul 19 2010

The Voice of the White House


            Washington, D.C., July 19, 2010: “The 9/11 attacks were instigated by the Bush people to turn George into a wartime president. The commandeered commercial flight destined to slam into the U.S. Capitol in Washington and take out part of Congress, thus allowing Bush to pass an emergency law permitting him to rule by decree failed, entirely due to the courageous passengers who fought the Saudi-based terrorists and crashed the aircraft into the ground. But the planned increase in the power of the intelligence bureaucracy went right ahead. How many of you can remember the moronic Tom Ridge pontificating about “red days” or “lavender days”? and this did work because the assholes did this scare business just before they needed public support for some idiot project. But when Bush and his gang of thieves left Washington to spend their bribe monies, the intelligence (sic!) communities continued to expand until now they are at a point where they are close to achieving their universal goal: total observation possibility for every American citizen. Note that the immense “no fly” list has the names of many two and three year old children, persons who have been dead for years plus tens of thousands of Americans who have expressed anti-government sentiments at some time in their life and have been denounced by neighbors, spiteful relatives or the vast army of unpaid governmental snitches. Something has to be done about this and I would welcome constructive suggestions. Readers are invited to share their own experiences with the rat-like snoops or disgusting snitches with me. Why not address these to me at:  tbrnews@hotmail.com? Just address them to VOTWH. Unlike WikiLeaks, I promise not to pass anything on to the government!”

DC’s spy establishment in panic mode over Washington Post expose

July 16th, 2010 —

by Daniel Tencer

Washington Post

Washington’s intelligence establishment appears to be in panic mode over an upcoming Washington Post series about runaway growth in defense and intelligence spending.

A State Department email has accused the Post of planning to make public “top secret” information about defense and intelligence contractors working for the US, despite an admission in the same email that the Post‘s information came from “open sources.”

The series, by Pulitzer Prize-winning reporter Dana Priest, will include a TV partnership with PBS’s Frontline and is expected to consist of three articles and an online database of military and intelligence contractors and their projects.

It’s that database of contractors that seems to be worrying Washington the most. Josh Rogin at Foreign Policy reports that the State Department sent out an email Thursday warning all 14,574 Washington-area employees of the upcoming reports.

On Monday July 19, the Washington Post plans to publish a website listing all agencies and contractors believed to conduct Top Secret work on behalf of the US Government,” the email stated. “The website provides a graphic representation pinpointing the location of firms conducting Top Secret work, describing the type of work they perform, and identifying many facilities where such work is done.”

However, the extent to which the Post‘s information will be “top secret” is debatable. The State Department email goes on to say that the information the Post has gathered came from “open sources,” suggesting the information published in the Post‘s database is already publicly available.

The email also tells employees they must “neither confirm nor deny” the claims made in the Post articles.

That line is echoed in a letter to “industry partners” from the Office of the Director of National Intelligence. In a blog posting entitled “Is Wash Post Harming Intelligence Work?”, the Washington Times reprints the letter from the ODNI, which asks contractors to “remind all cleared employees of their responsibility to protect classified information and relationships.”

Marc Ambinder at the Atlantic has obtained a memorandum from the ODNI’s communications chief, Art House, in which House lays out what he expects to see in the Post series, and his predictions paint a negative picture of defense and intelligence spending over the past decade. House said while he “can’t predict the content” of the piece, he expects it will draw several conclusions:

“The intelligence enterprise has undergone exponential growth and has become unmanageable with overlapping authorities and a heavily outsourced contractor workforce.

The IC and the DoD have wasted significant time and resources, especially in the areas of counterterrorism and counterintelligence.

The intelligence enterprise has taken its eyes off its post-9/11 mission and is spending its energy on competitive and redundant programs”.

House also lays out a strategy for an expected public-relations battle after the series’ publication:

It might be helpful as you prepare for publication to draw up a list of accomplishments and examples of success to offer in response to inquiries to balance the coverage and add points that deserve to be mentioned. In media discussions, we will seek to garner support for the Intelligence Community and its members by offering examples of agile, integrated activity that has enhanced performance. We will want to minimize damage caused by unauthorized disclosure of sensitive and classified information.

And Foreign Policy‘s Rogin reports that the Obama administration is already refuting the Post series, even though it won’t launch until Monday.

“A lot of this is explainable,” an unnamed administration official told Rogin. “You want some redundancy in the intelligence community and you’re going to have some waste. These are things we’ve been aware of and in some instances we agree are troubling. However, it’s something we’ve been working on for a year and a half. It’s something we’ve been on top of.”

The official went on to say that “there will be examples of money being wasted in the series that seem egregious and we are just as offended as the readers by those examples.”


A hidden world, growing beyond control

July 19, 2010

by Dana Priest and William M. Arkin

Washington Post

The top-secret world the government created in response to the terrorist attacks of Sept. 11, 2001, has become so large, so unwieldy and so secretive that no one knows how much money it costs, how many people it employs, how many programs exist within it or exactly how many agencies do the same work.

These are some of the findings of a two-year investigation by The Washington Post that discovered what amounts to an alternative geography of the United States, a Top Secret America hidden from public view and lacking in thorough oversight. After nine years of unprecedented spending and growth, the result is that the system put in place to keep the United States safe is so massive that its effectiveness is impossible to determine.

The investigation’s other findings include:

* Some 1,271 government organizations and 1,931 private companies work on programs related to counterterrorism, homeland security and intelligence in about 10,000 locations across the United States.

* An estimated 854,000 people, nearly 1.5 times as many people as live in Washington, D.C., hold top-secret security clearances.

* In Washington and the surrounding area, 33 building complexes for top-secret intelligence work are under construction or have been built since September 2001. Together they occupy the equivalent of almost three Pentagons or 22 U.S. Capitol buildings – about 17 million square feet of space.

            * Many security and intelligence agencies do the same work, creating redundancy and waste. For example, 51 federal organizations and military commands, operating in 15 U.S. cities, track the flow of money to and from terrorist networks.

* Analysts who make sense of documents and conversations obtained by foreign and domestic spying share their judgment by publishing 50,000 intelligence reports each year – a volume so large that many are routinely ignored.

These are not academic issues; lack of focus, not lack of resources, was at the heart of the Fort Hood shooting that left 13 dead, as well as the Christmas Day bomb attempt thwarted not by the thousands of analysts employed to find lone terrorists but by an alert airline passenger who saw smoke coming from his seatmate.

They are also issues that greatly concern some of the people in charge of the nation’s security.

“There has been so much growth since 9/11 that getting your arms around that – not just for the DNI [Director of National Intelligence], but for any individual, for the director of the CIA, for the secretary of defense – is a challenge,” Defense Secretary Robert M. Gates said in an interview with The Post last week.

In the Department of Defense, where more than two-thirds of the intelligence programs reside, only a handful of senior officials – called Super Users – have the ability to even know about all the department’s activities. But as two of the Super Users indicated in interviews, there is simply no way they can keep up with the nation’s most sensitive work.

“I’m not going to live long enough to be briefed on everything” was how one Super User put it. The other recounted that for his initial briefing, he was escorted into a tiny, dark room, seated at a small table and told he couldn’t take notes. Program after program began flashing on a screen, he said, until he yelled ”Stop!” in frustration.

“I wasn’t remembering any of it,” he said.

Underscoring the seriousness of these issues are the conclusions of retired Army Lt. Gen. John R. Vines, who was asked last year to review the method for tracking the Defense Department’s most sensitive programs. Vines, who once commanded 145,000 troops in Iraq and is familiar with complex problems, was stunned by what he discovered.


“I’m not aware of any agency with the authority, responsibility or a process in place to coordinate all these interagency and commercial activities,” he said in an interview. “The complexity of this system defies description.”

The result, he added, is that it’s impossible to tell whether the country is safer because of all this spending and all these activities. “Because it lacks a synchronizing process, it inevitably results in message dissonance, reduced effectiveness and waste,” Vines said. “We consequently can’t effectively assess whether it is making us more safe.”

The Post’s investigation is based on government documents and contracts, job descriptions, property records, corporate and social networking Web sites, additional records, and hundreds of interviews with intelligence, military and corporate officials and former officials. Most requested anonymity either because they are prohibited from speaking publicly or because, they said, they feared retaliation at work for describing their concerns.

The Post’s online database of government organizations and private companies was built entirely on public records. The investigation focused on top-secret work because the amount classified at the secret level is too large to accurately track.

Today’s article describes the government’s role in this expanding enterprise. Tuesday’s article describes the government’s dependence on private contractors. Wednesday’s is a portrait of one Top Secret America community. On the Web, an extensive, searchable database built by The Post about Top Secret America is available at washingtonpost.com/topsecretamerica.

Defense Secretary Gates, in his interview with The Post, said that he does not believe the system has become too big to manage but that getting precise data is sometimes difficult. Singling out the growth of intelligence units in the Defense Department, he said he intends to review those programs for waste. “Nine years after 9/11, it makes a lot of sense to sort of take a look at this and say, ‘Okay, we’ve built tremendous capability, but do we have more than we need?’ ” he said.

            CIA Director Leon Panetta, who was also interviewed by The Post last week, said he’s begun mapping out a five-year plan for his agency because the levels of spending since 9/11 are not sustainable. “Particularly with these deficits, we’re going to hit the wall. I want to be prepared for that,” he said. “Frankly, I think everyone in intelligence ought to be doing that.”

  In an interview before he resigned as the director of national intelligence in May, retired Adm. Dennis C. Blair said he did not believe there was overlap and redundancy in the intelligence world. “Much of what appears to be redundancy is, in fact, providing tailored intelligence for many different customers,” he said.

  Blair also expressed confidence that subordinates told him what he needed to know. “I have visibility on all the important intelligence programs across the community, and there are processes in place to ensure the different intelligence capabilities are working together where they need to,” he said.

  Weeks later, as he sat in the corner of a ballroom at the Willard Hotel waiting to give a speech, he mused about The Post’s findings. “After 9/11, when we decided to attack violent extremism, we did as we so often do in this country,” he said. “The attitude was, if it’s worth doing, it’s probably worth overdoing.”

Outside a gated subdivision of mansions in McLean, a line of cars idles every weekday morning as a new day in Top Secret America gets underway. The drivers wait patiently to turn left, then crawl up a hill and around a bend to a destination that is not on any public map and not announced by any street sign.

Liberty Crossing tries hard to hide from view. But in the winter, leafless trees can’t conceal a mountain of cement and windows the size of five Wal-Mart stores stacked on top of one another rising behind a grassy berm. One step too close without the right badge, and men in black jump out of nowhere, guns at the ready.

Past the armed guards and the hydraulic steel barriers, at least 1,700 federal employees and 1,200 private contractors work at Liberty Crossing, the nickname for the two headquarters of the Office of the Director of National Intelligence and its National Counterterrorism Center. The two share a police force, a canine unit and thousands of parking spaces.

Liberty Crossing is at the center of the collection of U.S. government agencies and corporate contractors that mushroomed after the 2001 attacks. But it is not nearly the biggest, the most costly or even the most secretive part of the 9/11 enterprise.

In an Arlington County office building, the lobby directory doesn’t include the Air Force’s mysteriously named XOIWS unit, but there’s a big “Welcome!” sign in the hallway greeting visitors who know to step off the elevator on the third floor. In Elkridge, Md., a clandestine program hides in a tall concrete structure fitted with false windows to look like a normal office building. In Arnold, Mo., the location is across the street from a Target and a Home Depot. In St. Petersburg, Fla., it’s in a modest brick bungalow in a run-down business park.

Every day across the United States, 854,000 civil servants, military personnel and private contractors with top-secret security clearances are scanned into offices protected by electromagnetic locks, retinal cameras and fortified walls that eavesdropping equipment cannot penetrate.

This is not exactly President Dwight D. Eisenhower’s “military-industrial complex,” which emerged with the Cold War and centered on building nuclear weapons to deter the Soviet Union. This is a national security enterprise with a more amorphous mission: defeating transnational violent extremists.

Much of the information about this mission is classified. That is the reason it is so difficult to gauge the success and identify the problems of Top Secret America, including whether money is being spent wisely. The U.S. intelligence budget is vast, publicly announced last year as $75 billion, 21/2 times the size it was on Sept. 10, 2001. But the figure doesn’t include many military activities or domestic counterterrorism programs.

At least 20 percent of the government organizations that exist to fend off terrorist threats were established or refashioned in the wake of 9/11. Many that existed before the attacks grew to historic proportions as the Bush administration and Congress gave agencies more money than they were capable of responsibly spending.

The Pentagon’s Defense Intelligence Agency, for example, has gone from 7,500 employees in 2002 to 16,500 today. The budget of the National Security Agency, which conducts electronic eavesdropping, doubled. Thirty-five FBI Joint Terrorism Task Forces became 106. It was phenomenal growth that began almost as soon as the Sept. 11 attacks ended.

Nine days after the attacks, Congress committed $40 billion beyond what was in the federal budget to fortify domestic defenses and to launch a global offensive against al-Qaeda. It followed that up with an additional $36.5 billion in 2002 and $44 billion in 2003. That was only a beginning.

With the quick infusion of money, military and intelligence agencies multiplied. Twenty-four organizations were created by the end of 2001, including the Office of Homeland Security and the Foreign Terrorist Asset Tracking Task Force. In 2002, 37 more were created to track weapons of mass destruction, collect threat tips and coordinate the new focus on counterterrorism. That was followed the next year by 36 new organizations; and 26 after that; and 31 more; and 32 more; and 20 or more each in 2007, 2008 and 2009.

In all, at least 263 organizations have been created or reorganized as a response to 9/11. Each has required more people, and those people have required more administrative and logistic support: phone operators, secretaries, librarians, architects, carpenters, construction workers, air-conditioning mechanics and, because of where they work, even janitors with top-secret clearances.

With so many more employees, units and organizations, the lines of responsibility began to blur. To remedy this, at the recommendation of the bipartisan 9/11 Commission, the George W. Bush administration and Congress decided to create an agency in 2004 with overarching responsibilities called the Office of the Director of National Intelligence (ODNI) to bring the colossal effort under control.

While that was the idea, Washington has its own ways.

The first problem was that the law passed by Congress did not give the director clear legal or budgetary authority over intelligence matters, which meant he wouldn’t have power over the individual agencies he was supposed to control.

The second problem: Even before the first director, Ambassador John D. Negroponte, was on the job, the turf battles began. The Defense Department shifted billions of dollars out of one budget and into another so that the ODNI could not touch it, according to two senior officials who watched the process. The CIA reclassified some of its most sensitive information at a higher level so the National Counterterrorism Center staff, part of the ODNI, would not be allowed to see it, said former intelligence officers involved.

And then came a problem that continues to this day, which has to do with the ODNI’s rapid expansion.

When it opened in the spring of 2005, Negroponte’s office was all of 11 people stuffed into a secure vault with closet-size rooms a block from the White House. A year later, the budding agency moved to two floors of another building. In April 2008, it moved into its huge permanent home, Liberty Crossing.

Today, many officials who work in the intelligence agencies say they remain unclear about what the ODNI is in charge of. To be sure, the ODNI has made some progress, especially in intelligence-sharing, information technology and budget reform. The DNI and his managers hold interagency meetings every day to promote collaboration. The last director, Blair, doggedly pursued such nitty-gritty issues as procurement reform, compatible computer networks, tradecraft standards and collegiality.

But improvements have been overtaken by volume at the ODNI, as the increased flow of intelligence data overwhelms the system’s ability to analyze and use it. Every day, collection systems at the National Security Agency intercept and store 1.7 billion e-mails, phone calls and other types of communications. The NSA sorts a fraction of those into 70 separate databases. The same problem bedevils every other intelligence agency, none of which have enough analysts and translators for all this work.

The practical effect of this unwieldiness is visible, on a much smaller scale, in the office of Michael Leiter, the director of the National Counterterrorism Center. Leiter spends much of his day flipping among four computer monitors lined up on his desk. Six hard drives sit at his feet. The data flow is enormous, with dozens of databases feeding separate computer networks that cannot interact with one another.

There is a long explanation for why these databases are still not connected, and it amounts to this: It’s too hard, and some agency heads don’t really want to give up the systems they have. But there’s some progress: “All my e-mail on one computer now,” Leiter says. “That’s a big deal.”

To get another view of how sprawling Top Secret America has become, just head west on the toll road toward Dulles International Airport.

As a Michaels craft store and a Books-A-Million give way to the military intelligence giants Northrop Grumman and Lockheed Martin, find the off-ramp and turn left. Those two shimmering-blue five-story ice cubes belong to the National Geospatial-Intelligence Agency, which analyzes images and mapping data of the Earth’s geography. A small sign obscured by a boxwood hedge says so.

Across the street, in the chocolate-brown blocks, is Carahsoft, an intelligence agency contractor specializing in mapping, speech analysis and data harvesting. Nearby is the government’s Underground Facility Analysis Center. It identifies overseas underground command centers associated with weapons of mass destruction and terrorist groups, and advises the military on how to destroy them.

Clusters of top-secret work exist throughout the country, but the Washington region is the capital of Top Secret America.

About half of the post-9/11 enterprise is anchored in an arc stretching from Leesburg south to Quantico, back north through Washington and curving northeast to Linthicum, just north of the Baltimore-Washington International Marshall Airport. Many buildings sit within off-limits government compounds or military bases.

Others occupy business parks or are intermingled with neighborhoods, schools and shopping centers and go unnoticed by most people who live or play nearby.

Many of the newest buildings are not just utilitarian offices but also edifices “on the order of the pyramids,” in the words of one senior military intelligence officer.

Not far from the Dulles Toll Road, the CIA has expanded into two buildings that will increase the agency’s office space by one-third. To the south, Springfield is becoming home to the new $1.8 billion National Geospatial-Intelligence Agency headquarters, which will be the fourth-largest federal building in the area and home to 8,500 employees. Economic stimulus money is paying hundreds of millions of dollars for this kind of federal construction across the region.

It’s not only the number of buildings that suggests the size and cost of this expansion, it’s also what is inside: banks of television monitors. “Escort-required” badges. X-ray machines and lockers to store cellphones and pagers. Keypad door locks that open special rooms encased in metal or permanent dry wall, impenetrable to eavesdropping tools and protected by alarms and a security force capable of responding within 15 minutes. Every one of these buildings has at least one of these rooms, known as a SCIF, for sensitive compartmented information facility. Some are as small as a closet; others are four times the size of a football field.

SCIF size has become a measure of status in Top Secret America, or at least in the Washington region of it. “In D.C., everyone talks SCIF, SCIF, SCIF,” said Bruce Paquin, who moved to Florida from the Washington region several years ago to start a SCIF construction business. “They’ve got the penis envy thing going. You can’t be a big boy unless you’re a three-letter agency and you have a big SCIF.”

SCIFs are not the only must-have items people pay attention to. Command centers, internal television networks, video walls, armored SUVs and personal security guards have also become the bling of national security.

“You can’t find a four-star general without a security detail,” said one three-star general now posted in Washington after years abroad. “Fear has caused everyone to have stuff. Then comes, ‘If he has one, then I have to have one.’ It’s become a status symbol.”

Among the most important people inside the SCIFs are the low-paid employees carrying their lunches to work to save money. They are the analysts, the 20- and 30-year-olds making $41,000 to $65,000 a year, whose job is at the core of everything Top Secret America tries to do.

At its best, analysis melds cultural understanding with snippets of conversations, coded dialogue, anonymous tips, even scraps of trash, turning them into clues that lead to individuals and groups trying to harm the United States.

Their work is greatly enhanced by computers that sort through and categorize data. But in the end, analysis requires human judgment, and half the analysts are relatively inexperienced, having been hired in the past several years, said a senior ODNI official. Contract analysts are often straight out of college and trained at corporate headquarters.

When hired, a typical analyst knows very little about the priority countries – Iraq, Iran, Afghanistan and Pakistan – and is not fluent in their languages. Still, the number of intelligence reports they produce on these key countries is overwhelming, say current and former intelligence officials who try to cull them every day. The ODNI doesn’t know exactly how many reports are issued each year, but in the process of trying to find out, the chief of analysis discovered 60 classified analytic Web sites still in operation that were supposed to have been closed down for lack of usefulness. “Like a zombie, it keeps on living” is how one official describes the sites.

The problem with many intelligence reports, say officers who read them, is that they simply re-slice the same facts already in circulation. “It’s the soccer ball syndrome. Something happens, and they want to rush to cover it,” said Richard H. Immerman, who was the ODNI’s assistant deputy director of national intelligence for analytic integrity and standards until early 2009. “I saw tremendous overlap.”

Even the analysts at the National Counterterrorism Center (NCTC), which is supposed to be where the most sensitive, most difficult-to-obtain nuggets of information are fused together, get low marks from intelligence officials for not producing reports that are original, or at least better than the reports already written by the CIA, FBI, National Security Agency or Defense Intelligence Agency.

When Maj. Gen. John M. Custer was the director of intelligence at U.S. Central Command, he grew angry at how little helpful information came out of the NCTC. In 2007, he visited its director at the time, retired Vice Adm. John Scott Redd, to tell him so. “I told him that after 41/2 years, this organization had never produced one shred of information that helped me prosecute three wars!” he said loudly, leaning over the table during an interview.

Two years later, Custer, now head of the Army’s intelligence school at Fort Huachuca, Ariz., still gets red-faced recalling that day, which reminds him of his frustration with Washington’s bureaucracy. “Who has the mission of reducing redundancy and ensuring everybody doesn’t gravitate to the lowest-hanging fruit?” he said. “Who orchestrates what is produced so that everybody doesn’t produce the same thing?”

            He’s hardly the only one irritated. In a secure office in Washington, a senior intelligence officer was dealing with his own frustration. Seated at his computer, he began scrolling through some of the classified information he is expected to read every day: CIA World Intelligence Review, WIRe-CIA, Spot Intelligence Report, Daily Intelligence Summary, Weekly Intelligence Forecast, Weekly Warning Forecast, IC Terrorist Threat Assessments, NCTC Terrorism Dispatch, NCTC Spotlight . . .

It’s too much, he complained. The inbox on his desk was full, too. He threw up his arms, picked up a thick, glossy intelligence report and waved it around, yelling.

“Jesus! Why does it take so long to produce?”

“Why does it have to be so bulky?”

“Why isn’t it online?”

The overload of hourly, daily, weekly, monthly and annual reports is actually counterproductive, say people who receive them. Some policymakers and senior officials don’t dare delve into the backup clogging their computers. They rely instead on personal briefers, and those briefers usually rely on their own agency’s analysis, re-creating the very problem identified as a main cause of the failure to thwart the attacks: a lack of information-sharing.

The ODNI’s analysis office knows this is a problem. Yet its solution was another publication, this one a daily online newspaper, Intelligence Today. Every day, a staff of 22 culls more than two dozen agencies’ reports and 63 Web sites, selects the best information and packages it by originality, topic and region.

Analysis is not the only area where serious overlap appears to be gumming up the national security machinery and blurring the lines of responsibility.

Within the Defense Department alone, 18 commands and agencies conduct information operations, which aspire to manage foreign audiences’ perceptions of U.S. policy and military activities overseas.

And all the major intelligence agencies and at least two major military commands claim a major role in cyber-warfare, the newest and least-defined frontier.

“Frankly, it hasn’t been brought together in a unified approach,” CIA Director Panetta said of the many agencies now involved in cyber-warfare.

“Cyber is tremendously difficult” to coordinate, said Benjamin A. Powell, who served as general counsel for three directors of national intelligence until he left the government last year. “Sometimes there was an unfortunate attitude of bring your knives, your guns, your fists and be fully prepared to defend your turf.” Why? “Because it’s funded, it’s hot and it’s sexy.”

Last fall, U.S. Army Maj. Nidal Malik Hasan allegedly opened fire at Fort Hood, Tex., killing 13 people and wounding 30. In the days after the shootings, information emerged about Hasan’s increasingly strange behavior at Walter Reed Army Medical Center, where he had trained as a psychiatrist and warned commanders that they should allow Muslims to leave the Army or risk “adverse events.” He had also exchanged e-mails with a well-known radical cleric in Yemen being monitored by U.S. intelligence.

But none of this reached the one organization charged with handling counterintelligence investigations within the Army. Just 25 miles up the road from Walter Reed, the Army’s 902nd Military Intelligence Group had been doing little to search the ranks for potential threats. Instead, the 902’s commander had decided to turn the unit’s attention to assessing general terrorist affiliations in the United States, even though the Department of Homeland Security and the FBI’s 106 Joint Terrorism Task Forces were already doing this work in great depth.

The 902nd, working on a program the commander named RITA, for Radical Islamic Threat to the Army, had quietly been gathering information on Hezbollah, Iranian Republican Guard and al-Qaeda student organizations in the United States. The assessment “didn’t tell us anything we didn’t know already,” said the Army’s senior counterintelligence officer at the Pentagon.

Secrecy and lack of coordination have allowed organizations, such as the 902nd in this case, to work on issues others were already tackling rather than take on the much more challenging job of trying to identify potential jihadist sympathizers within the Army itself.

Beyond redundancy, secrecy within the intelligence world hampers effectiveness in other ways, say defense and intelligence officers. For the Defense Department, the root of this problem goes back to an ultra-secret group of programs for which access is extremely limited and monitored by specially trained security officers.

These are called Special Access Programs – or SAPs – and the Pentagon’s list of code names for them runs 300 pages. The intelligence community has hundreds more of its own, and those hundreds have thousands of sub-programs with their own limits on the number of people authorized to know anything about them. All this means that very few people have a complete sense of what’s going on.

“There’s only one entity in the entire universe that has visibility on all SAPs – that’s God,” said James R. Clapper, undersecretary of defense for intelligence and the Obama administration’s nominee to be the next director of national intelligence.

Such secrecy can undermine the normal chain of command when senior officials use it to cut out rivals or when subordinates are ordered to keep secrets from their commanders.

One military officer involved in one such program said he was ordered to sign a document prohibiting him from disclosing it to his four-star commander, with whom he worked closely every day, because the commander was not authorized to know about it. Another senior defense official recalls the day he tried to find out about a program in his budget, only to be rebuffed by a peer. “What do you mean you can’t tell me? I pay for the program,” he recalled saying in a heated exchange.

Another senior intelligence official with wide access to many programs said that secrecy is sometimes used to protect ineffective projects. “I think the secretary of defense ought to direct a look at every single thing to see if it still has value,” he said. “The DNI ought to do something similar.”

          The ODNI hasn’t done that yet. The best it can do at the moment is maintain a database of the names of the most sensitive programs in the intelligence community. But the database does not include many important and relevant Pentagon projects.

Because so much is classified, illustrations of what goes on every day in Top Secret America can be hard to ferret out. But every so often, examples emerge. A recent one shows the post-9/11 system at its best and its worst.

Last fall, after eight years of growth and hirings, the enterprise was at full throttle when word emerged that something was seriously amiss inside Yemen. In response, President Obama signed an order sending dozens of secret commandos to that country to target and kill the leaders of an al-Qaeda affiliate.

In Yemen, the commandos set up a joint operations center packed with hard drives, forensic kits and communications gear. They exchanged thousands of intercepts, agent reports, photographic evidence and real-time video surveillance with dozens of top-secret organizations in the United States.

That was the system as it was intended. But when the information reached the National Counterterrorism Center in Washington for analysis, it arrived buried within the 5,000 pieces of general terrorist-related data that are reviewed each day. Analysts had to switch from database to database, from hard drive to hard drive, from screen to screen, just to locate what might be interesting to study further.

As military operations in Yemen intensified and the chatter about a possible terrorist strike increased, the intelligence agencies ramped up their effort. The flood of information into the NCTC became a torrent.

Somewhere in that deluge was even more vital data. Partial names of someone in Yemen. A reference to a Nigerian radical who had gone to Yemen. A report of a father in Nigeria worried about a son who had become interested in radical teachings and had disappeared inside Yemen.

These were all clues to what would happen when a Nigerian named Umar Farouk Abdulmutallab left Yemen and eventually boarded a plane in Amsterdam bound for Detroit. But nobody put them together because, as officials would testify later, the system had gotten so big that the lines of responsibility had become hopelessly blurred.

          “There are so many people involved here,” NCTC Director Leiter told Congress.

“Everyone had the dots to connect,” DNI Blair explained to the lawmakers. “But I hadn’t made it clear exactly who had primary responsibility.”

And so Abdulmutallab was able to step aboard Northwest Airlines Flight 253. As it descended toward Detroit, he allegedly tried to ignite explosives hidden in his underwear. It wasn’t the very expensive, very large 9/11 enterprise that prevented disaster. It was a passenger who saw what he was doing and tackled him. “We didn’t follow up and prioritize the stream of intelligence,” White House counterterrorism adviser John O. Brennan explained afterward. “Because no one intelligence entity, or team or task force was assigned responsibility for doing that follow-up investigation.”

Blair acknowledged the problem. His solution: Create yet another team to run down every important lead. But he also told Congress he needed more money and more analysts to prevent another mistake.

More is often the solution proposed by the leaders of the 9/11 enterprise. After the Christmas Day bombing attempt, Leiter also pleaded for more – more analysts to join the 300 or so he already had.

The Department of Homeland Security asked for more air marshals, more body scanners and more analysts, too, even though it can’t find nearly enough qualified people to fill its intelligence unit now. Obama has said he will not freeze spending on national security, making it likely that those requests will be funded.

More building, more expansion of offices continues across the country. A $1.7 billion NSA data-processing center will be under construction soon near Salt Lake City. In Tampa, the U.S. Central Command’s new 270,000-square-foot intelligence office will be matched next year by an equally large headquarters building, and then, the year after that, by a 51,000-square-foot office just for its special operations section.

Just north of Charlottesville, the new Joint-Use Intelligence Analysis Facility will consolidate 1,000 defense intelligence analysts on a secure campus.

Meanwhile, five miles southeast of the White House, the DHS has broken ground for its new headquarters, to be shared with the Coast Guard. DHS, in existence for only seven years, already has its own Special Access Programs, its own research arm, its own command center, its own fleet of armored cars and its own 230,000-person workforce, the third-largest after the departments of Defense and Veterans Affairs.

Soon, on the grounds of the former St. Elizabeths mental hospital in Anacostia, a $3.4 billion showcase of security will rise from the crumbling brick wards. The new headquarters will be the largest government complex built since the Pentagon, a major landmark in the alternative geography of Top Secret America and four times as big as Liberty Crossing.

Staff researcher Julie Tate contributed to this report.

A Question of Trust

July 12, 2010

by Germar Rudolf

            J. Edgar Hoover, long-time icon and head of the FBI worked for years to build his agency into one with great public acceptance and, most important, trust. Since Hoover’s death, sadly, the once-vaunted Bureau has been sliding slowly downhill. It has become a tool of political special interests as witness the drumfire of accusations, revelations and resignations attendant upon charges of falsified data designed to be used in criminal trials, both Federal and state.

            The Criminal Justice Information Services (CJIS) Division, is currently  located in Clarksburg, West Virginia and was open for business in 1995. The stated  purpose of this sub-organization is to be a central  repository for information. The CJIS controls the programs for the National Crime Information Center (NCIC), Uniform Crime Reporting (UCR), Fingerprint Identification, Integrated Automated Fingerprint Identification System (IAFIS), NCIC 2000, and the National Incident-Based Reporting System (NIBRS). Many, if not most, state and local agencies use these FBI-controlled systems as a source for their own investigations and, in return, contribute to the database using secure communications. FBI provides what then term “tools of sophisticated identification and information” services to local, state, Federal, and international law enforcement agencies.We especially note that foreign agencies are involved in thes programs. In addition to quantifying and qualifying technical investigations, the FBI’s agencies are also responsible for the on-going and massive attempt to build a “universal data base” on each American citizen, domestically and abroad..

 There was, of course the ‘Carnivore’ program of evil memory. Carnivore  was an electronic evesdropping software system implemented by the FBI during the Clinton administration. It was designed to monitor email and electronic communications, in the main of perfectly innocent American citizens. After prolonged negative coverage in the press, the FBI was forced to change the name of its system from “Carnivore” to the more benign-sounding “DCS1000.” DCS is reported to stand for “Digital Collection System”; the system has the same functions as before. At the core of what the critical experts were alleging is the poor practice, and deliberate falsification that we know throughly permeates  the FBI forensic labs as well as a significant arera of most forensic science in the United States.

Examiners have proved remarkably loath to write up their bench notes in any adequate scientific manner. No names, no chain of custody history, no testing chronology, no details of supervisory oversight, no confirmatory tests, no signatures — such omissions are quite normal in FBI lab reports. What they do contain is obfuscation and overstated conclusions written in an often-incomprehensible style that some experts have termed “forensonics.” Terms like “match” or “consistent with” are common; chronicled scientific procedures and protocols to justify them are not.

The motive seems to be to say as little as possible as unintelligibly as possible with what passes for scientific jargon and process. Our numerous conversations with former FBI lab personnel and attorneys have left no doubt why. Since lab reports are discoverable and have to be provided to the defense, the FBI lab believes that as little as possible should be given away. The approach to research is no different. The publication of findings or methodologies might be used to undermine the prosecution of cases, so no dissemination has been the rule. In short, the FBI’s interpretation of the adversarial approach on which the U.S. judicial system is based, works to serve neither science nor truth.

As such, the FBI lab’s reports have shocked those outside the U.S. forensic science community. “If these are the ones (reports) to be presented to court as evidence then I am appalled by the structure and information content.…[T]he structure of the reports seems to be designed to confuse,” concluded Professor Brian Caddy, head of the forensic science unit at Strathclyde University in Scotland on being shown the FBI lab’s forensic reports in the Oklahoma City bombing case.

Much the same goes for protocols or established procedures. Traditionally, many FBI forensic scientists have not used protocols – the recipes for analyses and the touchstones of scientific procedure — despite the fact that all scientists accept that not using them produces only experimental, not proven outcomes. Indeed, in some crime labs, established protocols do not even exist. “Basically what we’ve got is a kind of oral tradition, like medieval English, the Venerable Bede, instead of a regular scientific protocol manual,” claims Steven Jones, Timothy McVeigh’s first defense lawyer in the Oklahoma City bombing case, who has looked into FBI lab procedures in some depth. “The advantage of the oral tradition of course is that no one knows what it is.”

Such shortcomings are often accentuated in court. Here pressure from prosecutors is direct. All too often the important caveats that punctuate forensic science, phrases such as “including but not excluding,” “possible but not certain,” “compatible with but not incompatible with” are forgotten. All too often “could” becomes “did”, an opinion becomes a fact, tests that only suggest are said to “prove.” Even if the forensic scientist is sufficiently guarded, prosecutors or even judges are often less so.

It was a scandal that has kept on growing, affecting hundreds, and more realiztically thousands of lives. A scandal of atrocious deliberate falsification of  criminal forensic science that has not only threatened to punish the innocent but to free the guilty.

In the 1990s, the fingerprint, DNA, and explosive units of the Federal Bureau of Investigation Laboratory had written reports confirming local police department theories without actually performing the work. Or in falsifying the reports to assist prisecutorial staff in their prosecutions

Such laws and regulatory procedures stipulating the conditions under which evidence can be handled and manipulated fall under a body of due process statues called chain of evidence rules. It is crucial for law enforcement agencies to scrupulously collect, handle and transfer evidence in order to avoid its falsification. In most jurisdictions, chain of evidence rules require that the transfer of criminal evidence be handled by as few persons as possible. To prevent error or improper tampering, chain of evidence rules also stipulate that those authorized to experiment with collected evidence document the nature, time, date and duration of their handling.

In a harsh rebuke to the Federal Bureau of Investigation, the U.S. Department of Justice Department released its report on the question of the fundamental competence and honesty of many employees and supervisory personnel at the FBI crime laboratory.

            Many hundreds of cases in which results of tests conducted by the FBI labs were used in evidence have been, and are being, under review..


No Letup in Foreclosures

1 million-plus homes apt to be forfeited in 2010

July 16, 2010

by Alex Veiga


LOS ANGELES – More than 1 million US households will probably lose their homes to foreclosure this year as lenders work their way through a huge backlog of borrowers who have fallen behind on their loans.

Nearly 528,000 homes were taken over by lenders in the first six months of the year, a rate that is on track to eclipse the more than 900,000 homes repossessed in 2009, according to data released yesterday by RealtyTrac Inc., a foreclosure listing service.

“That would be unprecedented,” said Rick Sharga, a senior vice president at RealtyTrac.

Lenders have historically taken over about 100,000 homes a year, Sharga said.

The surge in home repossessions reflects a foreclosure crisis that remains a crippling drag on the housing market, despite having shown signs of leveling off in recent months.

The pace at which homeowners fall behind in payments and enter the foreclosure process has slowed as banks continue to let delinquent borrowers stay longer in their homes, rather than add to the glut of foreclosed properties on the market. At the same time, lenders have stepped up repossessions in an effort to clear out the backlog of distressed inventory on their books.

The number of households facing foreclosure in the first half of the year climbed 8 percent, versus the same period last year, but dropped 5 percent from the last six months of 2009, according to RealtyTrac, which tracks notices for defaults, scheduled home auctions, and repossessions.

In all, about 1.7 million homeowners received a foreclosure-related warning between January and June. That translates to one in 78 US homes.

Foreclosure notices posted monthly declines in April, May, and June, but Sharga said not to read too much into that.

“The banks are really sort of controlling or managing the dial on how fast these things get processed so they can ultimately manage the inventory of distressed assets on the market,” he said.

On average, it takes about 15 months for a home loan to go from being 30 days late to the property being foreclosed and sold, according to Lender Processing Services Inc., which tracks mortgages.

Assuming the US economy does not worsen, Sharga projects it will take lenders through 2013 to resolve the backlog of distressed properties they have on their books right now.

And a new wave of foreclosures could be coming in the second half of the year, especially if the unemployment rate remains high, mortgage-assistance programs fail, and the economy does not improve fast enough to lift home sales.

Foreclosed homes are typically sold at steep discounts, lowering the value of surrounding properties.

“The downward pressure from foreclosures will persist, and prices will be very weak well into 2012,” said Celia Chen, at Moody’s Economy.com.

She projects home prices will fall as much as 6 percent over the next 12 months from where they were in the first quarter.

Economic woes, such as unemployment or reduced income, continue to be the main catalysts for foreclosures. Initially, lax lending standards were the culprit. Now, homeowners with good credit who took out conventional, fixed-rate loans are the fastest-growing group of foreclosures.

There are more than 7.3 million home loans in some stage of delinquency, according to Lender Processing Services.

The Obama administration’s $75 billion foreclosure prevention effort has made only a small dent in the problem. Over a third of the 1.2 million borrowers who have enrolled in the mortgage modification program have dropped out.

Holding Bankers’ Feet to the Fire

July 16, 2010

by Gretchen Morgenson
New York Times

Kudos to the Federal Housing Finance Agency, overseer of Fannie Mae and Freddie Mac, the crippled mortgage finance giants. While some in Washington have continued to coddle the big banks even after they drove our economy into the ditch, this agency seems serious about recovering money for taxpayers by holding bad financial actors to account.

The agency announced last Monday that it had issued 64 subpoenas to a throng of unidentified financial services institutions, seeking documents related to mortgage securities that Fannie and Freddie bought from Wall Street during the boom years.

The subpoenas are designed to tell the agency what many of us want to know: How did Wall Street package and sell private-label mortgage securities to investors, even though the nature and quality of some of the loans crammed inside those tidy little packages were, at best, suspect?

Once that question has been answered, Fannie and Freddie can force the institutions that sold the securities to repurchase the improper loans, allowing taxpayers to recover some of the losses they’ve swallowed on Fannie’s and Freddie’s federal bailout.

Investigating this aspect of the mortgage mess seems a pretty logical step for a regulator. But in the topsy-turvy world of Washington, the housing finance agency’s move is unusually aggressive. Edward J. DeMarco, its acting director, seems to be that rarity — a regulator who not only talks about looking out for the taxpayer, but actually does something about it.

The subpoenas went to companies that act as trustees for mortgage pools or that service the loans in them. The housing finance agency wants to see loan files and transaction documents related to those pools, including mortgage applications and property appraisals. Recipients of the subpoenas have 30 days to produce the requested documents. Additional subpoenas may follow, it said.

The agency had to resort to subpoenas, it said, because when it asked the institutions for the records it got nowhere for many months. “Difficulty in obtaining the loan documents has presented a challenge to the enterprises’ efforts” to ascertain whether losses at the companies are the responsibility of others, its press release said.

Fannie and Freddie bought only the highest-rated pieces of these deals, but they bought buckets of them. During 2006-7, these entities bought $294 billion of so-called private-label securities. Not all of these purchases are under scrutiny, the agency said.

It is clearly turning up the heat on the major players in mortgage servicing and securitization. Among the bigger trustees in the business are Deutsche Bank and the Bank of New York, while loan servicers include Bank of America and many more. None of the banks would confirm if they had received subpoenas.

Fannie and Freddie played pivotal roles in the housing market by buying mortgages from banks that issued them so the banks could turn around and lend even more. After both companies overindulged in the mortgage frenzy they nearly collapsed, prompting the federal rescue. Since then, the government has continued to use the firms to buttress a shaky housing market.

In the immediate aftermath of a government takeover of Fannie and Freddie, the companies were persistent in seeking to recover money from the estates of Lehman Brothers and other defunct lenders related to dubious loans. But more recently, they have ratcheted up their buyback requests of the banks with which they continue to do business. Last March, for example, Freddie said it had submitted $4.8 billion in repurchase requests to such banks, up from $3.8 billion at the end of 2009.

Generating actual money from these requests, however, takes time and effort. While Fannie and Freddie can point to a borrower’s misstatements on a loan application as reason for a buyback, the banks often counter these requests with arguments that some borrowers are defaulting because they have lost their jobs or suffered other woes — not because they originally lied on their loan applications about their income and finances. As a result, these can be lengthy and testy negotiations.

But there is a big difference between recovering on loans that were contractually improper versus those that involved fraud. And the subpoenas suggest that officials at the Federal Housing Finance Agency believe that there are large numbers of loans that fall into the latter category.

Mr. DeMarco would not comment further on the subpoenas. But he appears to be taking a fairly literal approach to the agency’s role as conservator of Fannie and Freddie — because the taxpayers own these companies, it must conserve their assets and get money back where it is owed.

“Most or all of our conservatorship actions are taken to minimize further taxpayer losses,” Mr. DeMarco said last week in an interview. He pointed to the agency’s effort on foreclosure prevention, which “minimizes losses on seriously delinquent loans and provides greater stability to neighborhoods.”

But Mr. DeMarco has also barred Fannie and Freddie from entering new businesses and, according to people briefed on the discussions, was behind Fannie’s new and aggressive approach to combat so-called strategic defaulters — borrowers who can afford to pay their mortgages but stop doing so to get out of their obligations. Last month, Fannie said it would deny access to a government-backed mortgage for seven years to those defaulters.

A career government official, Mr. DeMarco was appointed acting director of the agency in September 2009; he spent 10 years at the Treasury Department, beginning in 1993.

For seven of those years he oversaw public policy analysis involving Fannie, Freddie and other financial institutions. As a result, he had a front-row seat for Fannie’s and Freddie’s aggressive growth years, when they routinely strong-armed their regulators and bashed their critics.

Those days are over, thankfully, but taxpayers are still on the hook for the mess those practices wrought. At least we now seem to have a strong cop on the Fannie and Freddie beat, someone who genuinely cares about the taxpayers’ losses and is working hard to stanch them.



Changing Stance, Administration Now Defends Insurance Mandate as a Tax

by Robert Pear

July 16, 2010

New York Times

             WASHINGTON — When Congress required most Americans to obtain health insurance or pay a penalty, Democrats denied that they were creating a new tax. But in court, the Obama administration and its allies now defend the requirement as an exercise of the government’s “power to lay and collect taxes.”

            And that power, they say, is even more sweeping than the federal power to regulate interstate commerce.

             Administration officials say the tax argument is a linchpin of their legal case in defense of the health care overhaul and its individual mandate, now being challenged in court by more than 20 states and several private organizations.

            Under the legislation signed by President Obama in March, most Americans will have to maintain “minimum essential coverage” starting in 2014. Many people will be eligible for federal subsidies to help them pay premiums.

            In a brief defending the law, the Justice Department says the requirement for people to carry insurance or pay the penalty is “a valid exercise” of Congress’s power to impose taxes.

Congress can use its taxing power “even for purposes that would exceed its powers under other provisions” of the Constitution, the department said. For more than a century, it added, the Supreme Court has held that Congress can tax activities that it could not reach by using its power to regulate commerce.

            While Congress was working on the health care legislation, Mr. Obama refused to accept the argument that a mandate to buy insurance, enforced by financial penalties, was equivalent to a tax.

            “For us to say that you’ve got to take a responsibility to get health insurance is absolutely not a tax increase,” the president said last September, in a spirited exchange with George Stephanopoulos on the ABC News program “This Week.”

            When Mr. Stephanopoulos said the penalty appeared to fit the dictionary definition of a tax, Mr. Obama replied, “I absolutely reject that notion.”

Congress anticipated a constitutional challenge to the individual mandate. Accordingly, the law includes 10 detailed findings meant to show that the mandate regulates commercial activity important to the nation’s economy. Nowhere does Congress cite its taxing power as a source of authority.

Under the Constitution, Congress can exercise its taxing power to provide for the “general welfare.” It is for Congress, not courts, to decide which taxes are “conducive to the general welfare,” the Supreme Court said 73 years ago in upholding the Social Security Act.

Dan Pfeiffer, the White House communications director, described the tax power as an alternative source of authority.

“The Commerce Clause supplies sufficient authority for the shared-responsibility requirements in the new health reform law,” Mr. Pfeiffer said. “To the extent that there is any question of additional authority — and we don’t believe there is — it would be available through the General Welfare Clause.”

The law describes the levy on the uninsured as a “penalty” rather than a tax. The Justice Department brushes aside the distinction, saying “the statutory label” does not matter. The constitutionality of a tax law depends on “its practical operation,” not the precise form of words used to describe it, the department says, citing a long line of Supreme Court cases.

Moreover, the department says the penalty is a tax because it will raise substantial revenue: $4 billion a year by 2017, according to the Congressional Budget Office.

In addition, the department notes, the penalty is imposed and collected under the Internal Revenue Code, and people must report it on their tax returns “as an addition to income tax liability.”

Because the penalty is a tax, the department says, no one can challenge it in court before paying it and seeking a refund.

Jack M. Balkin, a professor at Yale Law School who supports the new law, said, “The tax argument is the strongest argument for upholding” the individual-coverage requirement.

Mr. Obama “has not been honest with the American people about the nature of this bill,” Mr. Balkin said last month at a meeting of the American Constitution Society, a progressive legal organization. “This bill is a tax. Because it’s a tax, it’s completely constitutional.”

Mr. Balkin and other law professors pressed that argument in a friend-of-the-court brief filed in one of the pending cases.

Opponents contend that the “minimum coverage provision” is unconstitutional because it exceeds Congress’s power to regulate commerce.

“This is the first time that Congress has ever ordered Americans to use their own money to purchase a particular good or service,” said Senator Orrin G. Hatch, Republican of Utah.

In their lawsuit, Florida and other states say: “Congress is attempting to regulate and penalize Americans for choosing not to engage in economic activity. If Congress can do this much, there will be virtually no sphere of private decision-making beyond the reach of federal power.”

In reply, the administration and its allies say that a person who goes without insurance is simply choosing to pay for health care out of pocket at a later date. In the aggregate, they say, these decisions have a substantial effect on the interstate market for health care and health insurance.

In its legal briefs, the Obama administration points to a famous New Deal case, Wickard v. Filburn, in which the Supreme Court upheld a penalty imposed on an Ohio farmer who had grown a small amount of wheat, in excess of his production quota, purely for his own use.

The wheat grown by Roscoe Filburn “may be trivial by itself,” the court said, but when combined with the output of other small farmers, it significantly affected interstate commerce and could therefore be regulated by the government as part of a broad scheme regulating interstate commerce.

The Conversations with the Crow

                When the CIA discovered that their former Deputy Director of Clandestine Affairs, Robert  T. Crowley, had been talking with author Gregory Douglas, they became fearful (because of what Crowley knew) and outraged (because they knew Douglas would publish eventually) and made many efforts to silence Crowley, mostly by having dozens of FBI agents call or visit him at his Washington home and try to convince him to stop talking to Douglas, whom they considered to be an evil, loose cannon.

             Crowley did not listen to them and Douglas made through shorthand notes of each and every one of their many conversation. TBR News published most of these (some of the really vile ones were left out of the book but will be included on this site as a later addendum ) and the entire collection was later produced as an Ebook.

            Now, we reliably learn, various Washington alphabet agencies are trying to find a way to block the circulation of this highly negative, entertaining and dangerous work, so to show our solidarity with our beloved leaders and protectors, and our sincere appreciation for their corrupt and coercive actions, we are going to reprint the entire work, chapter by chapter. (The complete book can be obtained by going to:


Here is the fourteenth chapter:


Conversation No. 14

Date:  Friday, May 10, 1996

Commenced:  10:03 AM CST

Concluded:    10:21 AM CST

GD: Good morning, Mrs. Crowley. Is Robert available?

EC: Oh good morning, Gregory. Yes, he’s right here.

GD: Thank you.

RTC: Hello, Gregory. I’ve dug out quite a bit of material on the Kennedy business for you and once I get it collated, I’ll send it on.

GD: Any surprises there?

RTC: Wait until you’ve read it and I would prefer not to discuss this on the telephone. There are aspects of this that should be kept very private and, let me add, I would request that you not address this in print until after I am gone.

GD: Understood but that could be ten years from now.

RTC: Oh, I doubt that. I’m getting older by the day. I might hold out for a few more years but not much longer. Emily has been at me to have more X-rays because the last ones showed some spots on my lungs but I think that if it was cancer, I would be dead by now. After all, we took those some years ago.

GD: You smoke?

RTC: A small sinful pleasure but not as much. That and coffee kept me going and these get to be ingrained habits. At any rate, eventually I ought to have more tests but I really don’t worry too much about this.

GD: Just one brief question about Kennedy if it’s all right.

RTC: Ask me and I’ll make a judgment call.

GD: Was it Oswald?

RTC: No, he was a patsy. Had nothing to do with it and that answers that question. Now, on to other things if you don’t mind.

GD: Thank you and go ahead.

RTC: I was thinking about the Pollard business we talked about a few days ago. Looking over some of my files, I am certain you were accurate about tipping them off. There was an unspecified confidential source and I suppose if I had someone dig into it further, it would cinch it all up. We thought it was someone from the Israeli side with a guilty conscience.

GD: No, just a peeved WASP.

RTC: Of course, what was the worst aspect of this Pollard business is that the little traitor passed an enormous amount of very, very sensitive information to Israel, among which were reams of top level coded material. We found out later that all of this was sent to Russia, to the KGB and the GRU within hours of it getting to Tel Aviv.

GD: Did they work with the Russians?

RTC: No, some of the refuseniks that went to Israel were Soviet plants and they took with them enough information to convince the Israelis that they would be good agents. That’s the terrible thing about the Pollard matter, Gregory. It cost us millions upon millions to rework our codes but that only covered on-going matters. My God, the Soviets were reading all our top level messages. The damage that little shit caused is not to believe. Weinberger wanted to shoot him out of hand but that never happened. Pollard will never get out of prison alive. Did you know that the Israelis made him an honorary member of their Knesset and deposited large sums of money into a bank account they opened for him there?

GD: That’s a bit gross, isn’t it?

RTC: Figure it. And they have been bombarding Clinton to pardon him but that will never happen, even if his wife is Jewish. I don’t much care for Clinton but he is certainly a smart man. He moves with the tides, Gregory, and if he dared to pardon Pollard, there would be serious problems for him. It’s been said that if this looked like it might go through, the BoP people would have one of their convicts stick a knife into him while he was taking the air in the prison yard. I think he should be found hanging in his cell some morning and then we can pickle him, put him in a box and ship him off to Israel, collect.

GD: Frau Clinton is Jewish?

RTC: Family came from Lodz in Poland, went to Manchester in England, changed their names and some of them came over here. Her branch ended up in the cloth business in Chicago. They don’t talk about this but it’s something to consider. One thing I can say about the Clintons. They both are really too fond of women.

GD: When I lived in California, I had a friend in the state police in Sacramento and he was telling me that Hillary left law school at Yale and interned with Bob Treuhaft in Oakland. He’s a communist labor lawyer. His wife is Decca Mitford who wrote the book on funeral home ripoffs. Decca’s sister was Unity Mitford, who was one of Hitler’s lady friends. Anyway, he said that Hillary worked with the Black Panthers in Oakland and got involved with their descent on the legislators in Sacramento. They all had guns and everyone freaked out. Apparently, the police went around rounding them all up and they found Frau Clinton naked in bed with a black woman. It’s all in a report he copied. And he said that about a week after Clinton became President, the FBI swooped down and grabbed the original files on all of this.

RTC: Too bad there’s no copy.

GD: Oh, there is. I sent a copy of it around to the media but all I got was complete silence. But note that Herb Caen, a columnist for the Chronicle, wrote about this and I don’t think the FBI can do much about that. Of course, people forget very quickly, Robert. Cold beer in the fridge and a sports game on the tube and they’re contented. Consider the bulk of the public as if it were a hibernating bear in Alaska. Now if the far right and the far left stand in front of his den, screeching at each other and throwing dung and snowballs at each other, the bear is oblivious. But supposing they decide to move into the den and continue their petty squabbles. And if by accident, one of them managed to kick brother bear squarely in the balls, then we see something else. The bear awakes with a roar, promptly kills both of the invaders of his bedroom and goes back to sleep again. That, Robert, is what happens when the public is aroused and that is why politicians are careful to keep out of the bear’s den.

RTC: An interesting analogy.

GD: Revolutions don’t start overnight. The French Revolution had its roots in the determination of a burgeoning middle class to obtain equal rights along with the monarchy, the clergy and the nobility. Things got out of control and the mob woke up and wreaked bloody havoc on France for some time. Read Carlisle on this subject. Or read Eric Hoffer. I recommend The True Believer for a very penetrating analysis of mass movements and their fanatic adherents. We don’t have this problem here, at least now, but things change and if we don’t change with them, then there are problems.

RTC: I think the older we get, the less we welcome change.

GD: Routine can be comforting at that. But suppose some stuffy bureaucrat got up one morning, shoved the family cat into the microwave, turned it on, drove his van across the neighbor’s lawn and crushed the stone dwarves and then ran all the red lights on the way to the office? And when he got to his work pen, he set the contents of his desk on fire and ran around the office buck naked?

RTC: I have a feeling he would be locked up somewhere for some time. You have a very active imagination, Gregory, or did you do this?

GD: No but when I see the automatons on the road or marching in lockstep on the sidewalks of the financial district, such thoughts are not unnatural to me. I love to do the unexpected. I recall once when a friend’s father, who ran a local Penney store, gave me a half a dozen obsolete window dummies. My God, sir, did I have my fun. We took a little girl, cute thing with pigtails, cut a hole in her back and filled her insides with lots of raspberry Jello. Then we put a pinafore and a pair of nice shoes and socks on her, took her down to the SP tracks and set her up just this side of the railroad bridge. My Russian friend and I sat in the bushes and when the Del Monte Special, filled with the idle rich, came down the line doing 80, the headlights picked up the little darling on the tracks, illuminating her winsome form for the people stopped by the track gates. Horns blowing, howling drivers, panic and then when the train hit her squarely, a great fan of red Jello and papier-mâché body parts descended on the stopped cars. Now that was something to remember, Robert. Engineer slammed on the breaks, dropped sand, skidded with many sparks and blaring air horn into the local station and I will always remember the idle rich flying all over the interior of the illuminated club car. We got away with it but only barely. Booted police stamping all around our bushes, looking for the fiends. We didn’t do that one again but believe me, it was worth it.

RTC: (Laughter)

GD: I see you do have a sense of humor, Robert. There were other dummies to be put to good use. Sometime later I can give you more cheerful anecdotes to make your day.

RTC: I hope all of that is behind you, Gregory.

GD: Oh yes, long ago but not forgotten. By the way, speaking of things behind, can you give me one word that describes what happened when a very fat woman backed into a rotating airplane propeller?

RTC: Not offhand.

GD: Disaster.

RTC: Are you smoking something illegal?

GD: No, too much coffee and too many fond memories. Let me go back to the book and leave you thinking about the chaos inside the Embassy when you turn on your noise box.

RTC: That’s probably enough for now.

GD: ‘Sufficient unto the day is the evil thereof,’ Robert, and I will talk to you later.

(Concluded at 10:21 AM CST)



Dramatis personae:

James Jesus Angleton: Once head of the CIA’s Counterintelligence division, later fired because of his obsessive and illegal behavior, tapping the phones of many important government officials in search of elusive Soviet spies. A good friend of Robert Crowley and a co-conspirator with him in the assassination of President Kennedy

James P. Atwood: (April 16, 1930-April 20, 1997) A CIA employee, located in Berlin, Atwood had a most interesting career. He worked for any other intelligence agency, domestic or foreign, that would pay him, was involved in selling surplus Russian atomic artillery shells to the Pakistan government and was also most successful in the manufacturing of counterfeit German dress daggers. Too talkative, Atwood eventually had a sudden “seizure” while lunching with CIA associates.

William Corson: A Marine Corps Colonel and President Carter’s representative to the CIA. A friend of Crowley and Kimmel, Corson was an intelligent man whose main failing was a frantic desire to be seen as an important person. This led to his making fictional or highly exaggerated claims.

John Costello: A British historian who was popular with revisionist circles. Died of AIDS on a trans-Atlantic flight

James Critchfield: Former U.S. Army Colonel who worked for the CIA and organizaed the Cehlen Org. at Pullach, Germany. This organization was filled to the Plimsoll line with former Gestapo and SD personnel, many of whom were wanted for various purported crimes. He hired Heinrich Müller in 1948 and went on to represent the CIA in the Persian Gulf.

Robert T. Crowley: Once the deputy director of Clandestine Operations and head of the group that interacted with corporate America. A former West Point football player who was one of the founders of the original CIA. Crowley was involved at a very high level with many of the machinations of the CIA.

Gregory Douglas: A retired newspaperman, onetime friend of Heinrich Müller and latterly, of Robert Crowley. Inherited stacks of files from the former (along with many interesting works of art acquired during the war and even more papers from Robert Crowley. Lives comfortably in a nice house overlooking the Mediterranean.

Reinhard Gehlen: A retired German general who had once been in charge of the intelligence for the German high command on Russian military activities. Fired by Hitler for incompetence, he was therefore naturally hired by first the U.S. Army and then, as his level of incompetence rose, with the CIA. His Nazi-stuffed organizaion eventually became the current German Bundes Nachrichten Dienst.

Thomas K. Kimmel, Jr: A grandson of Admiral Husband Kimmel, Naval commander at Pearl Harbor who was scapegoated after the Japanese attack. Kimmel was a senior FBI official who knew both Gregory Douglas and Robert Crowley and made a number of attempts to discourage Crowley from talking with Douglas. He was singularly unsuccessful. Kimmel subsequently retired and lives in retirement in Florida

Willi Krichbaum: A Senior Colonel (Oberführer) in the SS, head of the wartime Secret Field Police of the German Army and Heinrich Müller’s standing deputy in the Gestapo. After the war, Krichbaum went to work for the Critchfield organization and was their chief recruiter and hired many of his former SS friends. Krichbaum put Critchfield in touch with Müller in 1948.

Heinrich Müller: A former military pilot in the Bavarian Army in WWI, Müller  became a political police officer in Munich and was later made the head of the Secret State Police or Gestapo. After the war, Müller escaped to Switzerland where he worked for Swiss intelligence as a specialist on Communist espionage and was hired by James Critchfield, head of the Gehlen Organization, in 1948. Müller subsequently was moved to Washington where he worked for the CIA until he retired.

Joseph Trento: A writer on intelligence subjects, Trento and his wife “assisted” both Crowley and Corson in writing a book on the Russian KGB. Trento believed that he would inherit all of Crowley’s extensive files but after Crowley’s death, he discovered that the files had been gutted and the most important, and sensitive, ones given to Gregory Douglas. Trento was not happy about this. Neither were his employers.

Frank Wisner: A Founding Father of the CIA who promised much to the Hungarian and then failed them. First, a raging lunatic who was removed from Langley, screaming, in a strait jacket and later, blowing off the top of his head with a shotgun.

Robert Wolfe: A retired librarian from the National Archives who worked closely with the CIA on covering up embarrassing historical material in the files of the Arcnives. A strong supporter of holocaust writers.


Required to report to IRS all gold and silver coin purchases and sales over $600

July 9, 2010


            Starting on January 1st in 2012, U.S. federal law will require coin and bullion dealers to report to the Internal Revenue Service all gold and silver coin purchases and sales greater than $600.

            A blizzard of paperwork could be about to hit numismatics.

             Passage by Congress of the national health care legislation has had an unintended consequence to the nation’s coin collectors, vest-pocket dealers who buy and sell coins, and larger dealers who are frequent buyers of coins that collectors periodically liquidate as they trade up their collections for better coins, or simply sell to take a small profit or loss.

            What has happened is that effective Jan. 1, 2012, the whole system of giving and receiving Internal Revenue Service 1099 forms will be turned on its head and all persons (including corporations) who are in business will now have to give 1099 tax reporting forms for coins and other goods that they sell as well as buy.

            The responsibility for issuing forms kicks in at $600 for coins or bullion – not a very high level and one that has already started sounding alarm bells. It doesn’t matter in what form payment is made, whether cash, check, credit card, or Yap stone money, the $600 threshold applies.

            There’s a bill introduced by Rep. Dan Lungren (H.R. 5141), which has gathered over 80 members of Congress as co-sponsors to repeal this section. Evidently, however, the drafters of the provision think there is a $17 billion loophole that this plugs.

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            The Industry Council for Tangible Assets is alerting member dealers and the public at large in the hope that some sense of outrage will lead to a ready modification before the law becomes operational in 2012.

            Form 1099 is used to report independent contractor income, income from dividends, income from other things – and is one of the reasons why children receive tax bills for work or labor or services performed.

            Section 9006 of the Patient Protection and Affordable Care Act (Public Law 111-148, signed into law by President Obama this spring) turns 1099 forms into reporting forms not only for independent contractor’s income – what they have long been used for – but also to show sales, gains and losses on purchases and sales of goods as part of a trade or business.

            The section reads (in relevant part) “SEC. 9006. EXPANSION OF INFORMATION REPORTING REQUIREMENTS. (a) IN GENERAL. – Section 6041 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsections:

            ‘‘(h) APPLICATION TO CORPORATIONS. – Notwithstanding any regulation prescribed by the secretary before the date of the enactment of this subsection, for purposes of this section the term ‘person’ includes any corporation that is not an organization exempt from tax under section 501(a).

            ‘‘(i) REGULATIONS. – The secretary may prescribe such regulations and other guidance as may be appropriate or necessary to carry out the purposes of this section, including rules to prevent duplicative reporting of transactions.’’


             Subsection (a) of section 6041 of the Internal Revenue Code of 1986 is amended –

            (1) by inserting ‘‘amounts in consideration for property,’’ after ‘‘wages,’’
            (2) by inserting ‘‘gross proceeds,’’ after ‘‘emoluments, or other’’, and
            (3) by inserting ‘‘gross proceeds,’’ after ‘‘setting forth the amount of such.’’

            The property section means that if B. Max Mehl was selling coins to another major dealer of that era, a 1099 would have to be issued. When he bought from the public, the same thing is also required. The “report” does not necessarily measure profit or loss, but it does show activity.

            The old exemption against corporations is also gone. If you buy or sell more than $600 of coins, or whatever, from, to or with a bullion dealer, for example, you have an obligation under the new law to issue 1099s.

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