TBR News July 5, 2011

Jul 05 2011

The Voice of the White House

Washington, D.C July 5, 2011: “.MERS Inc. is the the most enormous criminal fraud in American history. It was created by the American banking system to cover astronomical ripoffs of the American peo0le and is being protected by all the agencies of the Obama admiistration to avoid having to deal with it and, should they have to do this, to bring about the collapse of our major banks, such as Wells Fargo, the Bank of America, JPMorganChase and the enormous Goldman Sachs. It was the brainchild of one Alan Shapiro- who is an Isreli citizen, now resident in France, who acted as a counsel for JP Morgan Chase, B of A, and Wells Fargo. He was also listed as a private counsel to the Bush White House and in close contact with Vice President Richard Cheney.Mr. Shapiro also was strongly connected to the SEC when the ENRON scandal came down and in that role, had thousands of complaints against ENRON destroyed before they reached competent authority.

Nearly four hundred secret emails sent by Alan Shapiro to top American banking officials, members of the Government, to include President George W. Bush, Vice President Richard Cheney, Congressmen and others of the nation’s prominent have been burgled by a WikiLeaks supporting group. They show, in shocking detail, the depth of the enormous and on-going mortgage swindle and how it is being covered up by frantic political and banking leaders across the national political spectrum.

We will publish the Shapiro documents, first in the ‘Slaughterhouse Informer’ and, later, on the TBR News site. They are a shocking glimpse into the world of high-level fraud that has become the hallmark of American business and political life in the 21st Century. The Bank of America, because of its economic clout, was able to redact the WikiLeaks intercepts of their in-house emails but they cannot stop the release of the Shapiro documents.”

Inside the Anonymous Army of ‘Hacktivist’ Attackers

June 23, 2011
by Cassal Bryan-Low and Sibohan Gorman
Wall Street Journal

‘Anonymous,’ a loosely organized group of young computer experts once focused just on Internet freedom, has turned to more menacing attacks, including not only paralyzing websites but breaking in to steal data. Cassell Bryan-Low explains.

HOOGEZAND-SAPPEMEER, Netherlands— In this sleepy Dutch town last December, police burst into the bedroom  of 19-year-old Martijn Gonlag as he hurriedly pulled on jeans over his boxer shorts. He was hauled away on suspicion of taking part in cyber attacks by the online group calling itself Anonymous.

Mr. Gonlag admits taking part in several attacks on websites, but he recently had a change of heart as some hackers adopted increasingly aggressive tactics.

“People are starting to grow tired of” the hackers, he said in an interview. “People are also starting to realize that Anonymous is a loose cannon.”

Now he appears to be a target himself. A chat room he hosts faces frequent hack attacks, he says.

Mr. Gonlag’s role reversal provides a glimpse of the unruly hunt-or-be-hunted world underpinning a string of online attacks against major companies and government bodies—incidents that have sparked a digital manhunt by law-enforcement agencies in several countries.

What once was just righteous rabble-rousing by Anonymous in the name of Internet freedom has mutated into more menacing attacks, including by a splinter group of Anonymous called LulzSec, which is alleged to have moved beyond paralyzing websites to breaking in to steal data.

The tumult over online agitators like Anonymous comes at a time when the world’s computers are under unprecedented attack. Governments suspect each other of mounting cyber espionage and attacks on power grids and other infrastructure. Criminal gangs using sophisticated viruses cull credit-card and other sensitive data to steal from bank accounts.

Now “hacktivists” who populate groups like Anonymous and LulzSec, mostly young males from their teens to early 30s, have also ignited increasing concern among computer experts over the security of corporate and government systems.

Authorities in the U.K., Netherlands, Spain and Turkey have made more than 40 arrests of alleged Anonymous participants. In the U.S., the Federal Bureau of Investigation has conducted sweeping searches as part of a continuing probe into various attacks. On Wednesday, U.K. police charged a 19-year-old believed to have ties with both Anonymous and LulzSec, a group  whose name is a blend of “lulz,” or laughs, and “security.”

Anonymous and LulzSec pose a problem for law enforcement partly because their membership and operations are difficult to pin down. They are amorphous entities with scant leadership structure or formal process for making decisions.

Anonymous is “an idea” rather than a group, said Gregg Housh, a 34-year-old Web designer from Boston. “There is no one group, no one website. That is what makes it so powerful in my eyes.” Mr. Housh said he helps Anonymous with logistics but doesn’t take part in attempts to shut down websites or do anything illegal.

Waves of infighting spring up periodically within Anonymous, Mr. Housh added. “This is very natural. It’s what happens.”

A watershed in its tactics came in February when it hacked a California-based Internet-security firm called HB Gary Federal LLC, which sells investigative services to companies and government agencies, and released tens of thousands of internal emails.

Types of attacks by Anonymous or LulzSec:

The incident sent a chill through the security industry. “Computer-security specialists are afraid to challenge Anonymous,” said Mikko Hypponen, of computer-security firm F-Secure Corp. “No one is that confident in their own systems.”

Some participants involved in that hack formed the LulzSec splinter group, according to security specialists and participants. LulzSec has claimed credit for a string of computer break-ins, intensifying the response from law-enforcement groups.

Anonymous grew out of an online message forum formed in 2003 called 4chan,

a destination for hackers and game players fond of mischievous pranks. Its nfollowers became more politically focused, embracing an ideology of Internet freedom. In 2008, it made headlines with a campaign against the Church of Scientology, protesting what Anonymous claimed was the religious group’s effort to control information about itself online.

The campaign included “denial-of-service” attacks—bombarding websites with data to try to knock them offline. Later attacks targeted the movie and music industries, because of their efforts to stop piracy.

In December, the group hit on a cause that propelled it into the spotlight: WikiLeaks. Anonymous began attacking organizations and people who tangled with WikiLeaks and founder Julian Assange, who had been arrested in London over sexual-misconduct allegations in Sweden, which he denies.

Anonymous attacks shut or slowed websites of businesses that had cut ties with WikiLeaks, including MasterCard Inc., Visa Inc. and PayPal, a unit of eBay Inc. All said their systems weren’t compromised. PayPal said the attacks temporarily slowed payments via its website but not significantly.

The campaign, Operation Payback, brought Anonymous new followers from around the world. Via online chat forums and social-media websites, participants disseminated instructions about how to download attack software and about sites to target. Software called LOIC, or low-orbit ion canon, was downloaded tens of thousands of times, security specialists


Among recruits was Mr. Gonlag, under the nickname Awinee, an online handle the Dutch youth had used during a lifetime of intensive video-game playing. Spurred by talk of the WikiLeaks campaign in chat rooms, he piled  in, at one point writing: “Fire, fire fire.”

Mr. Gonlag has admitted he participated in attacks including one against the website of a Dutch prosecutor who announced the arrest of a 16-year-old in connection with the WikiLeaks campaign.

Returning home in the early hours of Dec. 10, Mr. Gonlag said in an interview, he typed the address of the prosecutor’s website into the attack software and let his computer fire data for about half an hour.

That afternoon, Dutch police arrested him and seized his desktop computer and phone.

Mr. Gonlag, who awaits trial, is charged with crimes related to destroying a computer network and inciting others to cause an attack, which carry a possible six years in prison.

Tapping at his keyboard recently in jeans and a green T-shirt, Mr. Gonlag said that he took part in several pro-WikiLeaks attacks, which he likened to a “digital sit-in,” but that he wasn’t guilty of the charges because he didn’t destroy or steal anything.

He indicated he grew disenchanted as some arms of Anonymous allegedly moved from paralyzing websites to stealing from them, putting the group in “a very, very bad position.”

Alluding to the cyber attacks he himself now faces, he said that when his computer server that powers the online chat rooms comes under fire, he takes the server offline and waits until his attackers tire of the effort. Then he connects back online again.

Each online Anonymous forum, such as AnonOps and AnonNet, has multiple chat rooms or “channels,” typically focused on a particular operation or theme.

While there may be a hundred or so active followers of a network on a regular basis, numbers swell into the thousands during popular campaigns.

Many channels are public, but participants can also set up invitation-only chat rooms or send each other private messages. Participants often speak online using audio or camera software, and they also can share videos and other files. Many participants are U.S.-based but there is also a

significant following in Europe and elsewhere.

Discussion ranges from political theory to technical chatter to juvenile banter. In one chat log, a participant promised to push a company “so far into orbit that they’ll transmute into a gravitational dip and exude Hawking radiation.”

Anonymous does have a hierarchy of sorts, with a core group of about 15 leaders who run the online chat rooms, participants say. They can issue sanctions, including banning someone from a channel or an entire network.

“There are nodes of power and authority, but it is pretty decentralized, and no one is calling the shots for all the operations,” said Gabriella Coleman, a New York University academic who follows Anonymous.

The Anonymous attacks turned more ominous in February, when some members broke into HB Gary Federal’s systems.

The Internet-security company’s then-chief executive, Aaron Barr, noticed the problem one morning when he was unable to access corporate email via an iPhone.

He instantly suspected Anonymous, as he had been quoted in a newspaper article saying he had uncovered key participants. Soon, his Twitter account was hijacked and used to post racial slurs and his Social Security number. Then Anonymous announced it had hacked his email and would make the contents public.

“I was shocked and consumed by it,” Mr. Barr said.

By hacking into the company’s public Web page and stealing passwords, attack participants obtained about 70,000 emails, which they posted online. The traffic included details of a proposed effort to gather information on critics of the U.S. Chamber of Commerce in an attempt to prove illegal activity by labor-union members. Mr. Barr said the initiative was only intended to show what information could be retrieved.

The attackers also exposed minutiae of Mr. Barr’s marital issues. He said the personal communications were taken out of context.

Mr. Barr stepped down from his job in late February.

Anonymous participants say the attacks expose weaknesses in the systems of computer-security companies and large organizations. “They should be scared,” said Corey Barnhill, a 23-year-old New Jersey native who uses the online nickname Xyrix and who said he took part in the attack on HB Gary Federal. “You’re college-educated and you can’t secure a server? How hard  is it? They can’t keep a kid out?”

Mr. Barnhill said the HB Gary Federal hack was designed to teach Mr. Barr a lesson for suggesting he could unmask Anonymous. “Whacking him down a peg was pretty funny,” he said.

In April, an Anonymous denial-of-service attack against Sony Corp. was followed by a breach of its computer system that resulted in the theft of names and birth dates and other personal information on about 100 million people who play online video games through Sony’s online gaming services.

Sony shut down its PlayStation online network for nearly a month and has estimated the attack cost it $171 million, including costs for enhanced security.

Sony has said that it isn’t clear that any credit-card data were ever accessed. The company said it has added security to its systems.

Sony told U.S. lawmakers it found a file left on its servers called “Anonymous,” the contents of which said “We are Legion,” a tagline often used by Anonymous.

Anonymous participants claim responsibility for the denial-of-service attacks, in press releases and via their Twitter account. They said the group didn’t orchestrate the data breach but didn’t rule out that someone from the group could have been involved. Meanwhile, the LulzSec group formed.

Security experts who follow LulzSec say it has about 10 core participants and is known for its hacking expertise. In recent weeks it has claimed responsibility for breaking into computer systems of several organizations, including the U.S. Senate and an FBI affiliate called InfraGard.

Last week, LulzSec said it had knocked the Central Intelligence Agency’s website offline for about an hour. The CIA said no internal or classified networks were affected.

A call to a phone number set up by the group, 614-LULZSEC, wasn’t returned. One LulzSec follower called “tflow” responded to a Wall Street Journal reporter in an online chat room, saying: “Unfortunately the gnomes are too busy to pick up your clearly inferior call.”

“For the past month and a bit, we’ve been causing mayhem and chaos throughout the Internet, attacking several targets,” LulzSec said in a statement last week. “This is the Internet, where we screw each other over for a jolt of satisfaction.”

This week, LulzSec claimed to rat out a couple of individuals it said had “tried to snitch” on it. In a document addressed to the “FBI & other law enforcement clowns,” the group appeared to reveal the full names, addresses and other contact information of two U.S. men it claims were involved in some hacks. “These goons begged us for mercy after they apologized to us all night for leaking some of our affiliates’ logs,” according to the document, accessed via a link on LulzSec’s twitter page.

“There is no mercy on the Lulz Boat.”

—Ian Sherr contributed to this article.


Insert: Terms explanation:

Denial-of-service attacks

Computer users bombard website servers with data in the hopes of knocking them offline. Among targets have been companies, such as PayPal and MasterCard, as well as government sites, including the CIA's. Such attacks can cost tens of thousands of dollars for the victim, including the cost of defending against the attacks and improving security.


Break-ins into computer systems, potentially giving access to sensitive data such as customer information and internal emails. A hack into Sony's systems resulted in the theft of personal data of about 100 million online video-game users. Sony shut its popular PlayStation online network for nearly a month, and has estimated the attack cost it about $171 million. Anonymous participants said the group didn't orchestrate the attack, but couldn't rule out that someone involved in the group could be involved.


Involves finding personal information about people and disclosing it online. LulzSec this week claimed to rat out two U.S. individuals it said had "tried to snitch" on the group, apparently disclosing names, addresses and other contact information.

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REMIC investor lacks standing to object to sale of collateral in borrower’s bankruptcy reorganization

May 13, 2011

Seyfarth Shaw LLP

In a recent decision, the Bankruptcy Court for the Southern District of New York concluded that an investor in a Real Estate Mortgage Investment Conduit (“REMIC”) lacked standing to object to the sale of a chapter 11 debtor’s real property, despite that the property served as collateral for loans held in trust by the REMIC for the benefit of its investors.

A Real Estate Mortgage Investment Conduit (“REMIC”) is an investment vehicle that pools together residential and commercial mortgages in a trust, and issues securities to investors in the secondary mortgage market representing beneficial interests in the trust. A REMIC’s non-taxable income includes payments of interest and principal made by borrowers on the underlying mortgage loans. Those cash payments then flow to the REMIC’s investors in the form of taxable distributions.

Typically, REMIC investors are required to enter into a Pooling and Servicing Agreement (“PSA”) that designates a “master servicer” to administer the pooled loans in exchange for a fee. When a loan is in default, administration of the loan is transferred to a “special servicer” whose duty is to maximize recovery on the loan for the collective benefit of all investors.

Disputes regarding proper administration of the REMIC’s assets may arise among the investors and servicers, especially when a substantial percentage of the pooled loans are in default and borrowers file for bankruptcy protection. For example, in the recent chapter 11 reorganization of Innkeepers USA Trust (which owns and develops hotel properties throughout the United States), certain of the debtor’s hotels served as collateral for loans held by a REMIC. The REMIC’s special servicer supported the debtor’s proposed sale of the hotels over the objection of one of its minority institutional investors. The Bankruptcy Court for the Southern District of New York held that the investor lacked standing in its capacity as a REMIC security holder to object to the sale. See In re Innkeepers USA Trust et al., 2011 Bankr. LEXIS 1164, Case No. 10-13800 (Bankr. S.D.N.Y. Apr. 1, 2011).

The court provided three reasons for prohibiting the investor from participating in the sale proceeding. First, the investor was not a creditor of the debtor because the investor had no contractual privity or other relationship with the debtor. The court noted that the investor’s right to distribution payments arose from the PSA and not from the underlying loan documents. Accordingly, although the investor may hold potential claims against the special servicer for breach of the PSA or breach of fiduciary duty, such claims do not constitute a direct pecuniary interest in the outcome of the debtor’s bankruptcy proceeding to establish “party in interest” standing under the Bankruptcy Code.

Second, under the PSA, the investor had delegated authority to the special servicer to act on its behalf and for the benefit of all investors. The PSA contained a “no action” clause that prohibited individual investors from instituting any action or proceeding under the PSA unless three conditions had been met: (1) an investor delivered written notice of a default under the PSA to the REMIC’s trustee, (2) investors holding at least 25% of the voting rights made a written request to the trustee to take specific action, and (3) the trustee failed to take the requested action within sixty days. Because those conditions had not been satisfied, the investor remained subject to the special servicer’s authority to act on its behalf in the bankruptcy proceeding.

Third, if REMIC investors were permitted to advance their individual and conflicting interests in bankruptcy proceedings, then a debtor’s bankruptcy case could be delayed and complicated substantially, and the delegation of authority to special servicers under PSAs would be rendered meaningless. Thus, the court raised concerns regarding the efficient administration of bankruptcy cases and the integrity of the secondary mortgage market to support its conclusion that the investor lacked standing to participate in the debtor’s sale proceeding.

Legal case delaying home sales in Jackson

July 2, 2011

by Chris Gautz

Jackson Citizen Patriot

A family was expecting to close on a house on a Friday. On Thursday night, the sale had to be scuttled.

Fifteen to 20 pending home sales fell apart that one Jackson title company was preparing to handle. Banks started pulling homes for sale off the market.

First, Jackson County’s real estate market suffered from the foreclosure crisis. Lately, it has been going through another convulsion due to a little-known company that has its name all over mortgage documents in Jackson and around the state.

Hundreds of foreclosures that involved the Mortgage Electronic Registration System, or MERS, now are holding up home sales in Jackson and around the state. A legal case over the company that originated in Jackson County may be headed to the state Supreme Court.

“I think it’s just going to be a stalemate for anyone who has MERS in their title,” said Laura Schlecte, broker and owner of Prudential Premier Properties, 761 W. Michigan Ave.

Illegal foreclosures?

MERS, based in Virginia, was created in 1993 by the lending and title insurance industries as a way for banks to quickly buy and sell mortgages without having to physically record the transfers with local register of deeds offices.

In the last decade banks commonly packaged mortages as securities and sold them back and forth. Handling the paperwork electronically sped up the process.

When Summit Township resident Corey Messner defaulted on the mortgage on his home on E. Walmont Road in 2008, MERS acted on behalf of the bank that held the mortgage and began foreclosure.

But when the eviction proceedings began, Messner filed his lawsuit, saying MERS did not have the authority to foreclose because it did not hold the note on his mortgage.

Michigan law states that whoever forecloses on a property must own the debt, and MERS did not. It was simply acting on behalf of the bank that did.

Efforts to reach Messner through his attorney, retired District Court Judge Lysle Hall, now with Jackson Legal, 300 W. Washington Ave., were unsuccessful. A representative at Jackson Legal said Messner did not want to speak publicly.

Jackson’s district and circuit courts ruled against Messner. The case in Jackson was combined with a similar one in Kent County and then taken up by the state Court of Appeals.

In April, the appeals court ruled for the homeowners, finding that MERS did not in fact have the authority under law to execute the foreclosure proceeding.

‘A screeching halt’

Almost immediately after the court’s ruling, nearly every home for sale that had been foreclosed on by MERS became toxic in the eyes of the title insurance industry.

“We’re not insuring any of those,” said Paul Anast, president of Midstate Title Co., 100 S. Jackson St. “We wouldn’t touch one of those with a 10-foot pole.”

In a statement after the appeals ruling, MERS wrote, “Title companies should not have any concerns about closing loans with MERS as the mortgagee.”

But no title company in this area sees it that way.

“I don’t think anyone is going to agree with them on that,” Anast said. “It’s really caused a lot of that stuff to come to a screeching halt. Everyone is taking the ultra-conservative road.”

Thomas Richardson, owner and general counsel of Liberty Title, 110 First St., said having MERS in the chain of title “is a fatal defect.”

He said his office saw 15 to 20 deals fall apart after the appeals ruling, and it will take time before those homes can be sold. “It’s going to gum up the real estate market,” he said.

In the weeks that followed, banks began pulling all of their properties off the market they were attempting to sell that had been foreclosed on by MERS.

“There’s a lot of stuff in limbo right now,” said Ron Ellison, president of American Title Co., 280 W. Cortland St.

Karmela Lejarde, spokeswoman for MERS, said most of the banks her company works with no longer have MERS foreclose for them, and they are in the midst of a rule change at the company to not allow the practice anymore.

While there likely won’t be any new MERS foreclosures, many potential homebuyers and homeowners looking to sell have had their deals stalled.

Jackson County Register of Deeds Mindy Reilly said MERS initiated 744 foreclosure proceedings in the past five years, including 91 last year.

It is not clear how many of those homes have been or still are on the market. Some may have been redeemed by the owner.

What’s next

Ellison said that if banks want title companies to insure home sales that have connections to MERS, they will have to find a way to show they have proper title.

“We don’t want to buy lawsuits,” Ellison said.

The lender will have to either go back and do a new foreclosure, which can take about seven months, or track down the people who were evicted from their homes and get them to sign over their interest in the property.

The latter can be quite difficult because many of those people have left the area.

No one expects those who were evicted after a MERS-initiated foreclosure would get their home back, especially if a new family is living in it after buying it from the bank.

“You can’t undo all these foreclosure sales that went to qualified purchasers,” Ellison said.

Any resolution will be about financial damages, he said.

“Somebody’s going to pay for this,” Ellison said. “This isn’t just going to go away. Somebody’s going to pay money.”

SEC and Morgan Keegan settle action tied to market crisis

June 23 2011

by Thomas O. Gorman

Dorsey & Whitney LLP

The SEC resolved an action with Morgan Keegan and two of its officers based on the fraudulent pricing of subprime real estate mortgage backed securities. In the Matter of Morgan Asset Management, Inc., Adm. Proc. File No. 3-14847 (June 22, 2011). The action was brought in coordination with FINRA and a task force of state regulators from Alabama, Kentucky, Mississippi, Tennessee and South Carolina.

The proceeding named as Respondents: Morgan Asset Management Inc., a registered investment adviser; Morgan Keegan & Co., Inc., a registered broker dealer; James Kelsoe, the senior portfolio manager for Morgan Asset; and Joseph Weller, Morgan Keegan’s Controller and the head of its Fund Accounting Department reported to him. The order alleged violations of Investment Company Act Section 34(b) and Advisers Act Sections 206(1), 206(2) and 206(4) and related rules.

Morgan Asset, through Mr. Kelsoe as Portfolio Manger, managed several Funds from late 2004 through mid 2008. These Funds held varying amounts of securities backed by subprime mortgages. Many of those securities lacked readily available market quotations. Accordingly the Investment Company Act required that they be priced by the Funds’ Board of Directors using fair value methods.

In filings made with the SEC, the Funds stated that the fair value of the securities would be determined by Morgan Asset’s Valuation Committee using procedures adopted by their board of directors. Those valuation procedures required that the securities be valued in good faith by the Valuation Committee. A series of general and specific factors were to be considered. One factor was broker-dealer price confirmations. The prices in those conformations could only be overridden if there was a reasonable basis to believe they were not accurate. If that step was taken the reasons for the override were required to be documented.

In fact the Funds delegated the responsibility for determining fair value to Morgan Keegan which primarily staffed the Valuation Committee. According to the Order, neither Morgan Keegan nor the Valuation Committee reasonably satisfied their responsibilities under the Funds’ procedures.

Morgan Asset adopted its own procedures to determine fair value to assign to portfolio securities and to validate those values periodically. Those procedures required that each quarter a list of fair value securities be furnished to the board with explanatory notes for their review. Morgan Asset failed to fully implement this provision.

As the subprime market declined in the first half of 2007 Mr. Kelsoe furnished Fund Accounting with price adjustments to various portfolio securities. In some instances in making these price adjustments Mr. Kelso ignored broker dealer price confirmations. The reason for these actions was not documented. With regard to one broker dealer Mr. Kelsoe is alleged to have “screened” the price quotes. Some of his price adjustments were higher than the prices obtained from broker dealers. Ultimately many of his price adjustments were arbitrary and did not reflect fair value according to the Order. As a result of these actions Mr. Kelsoe fraudulently prevented a reduction in the NAVs of the funds according to the Order.

Mr. Weller, as a member of the Valuation Committee, knew, or was reckless in not knowing, that the valuation policies were not being properly implemented. He failed to take steps to correct these deficiencies. Indeed, Morgan Keegan largely failed to implement the Funds’ valuation policies. As a result Morgan Keegan did not calculate current NAV for the Funds. Nevertheless, the firm published daily NAVs of the Funds. Shares were sold and redeemed based on those NAVs despite the fact that Morgan Keegan did not know if they were accurate.

Each of the Respondents settled the action. Under the terms of the settlements:

Morgan Keegan was censured and a cease and desist order was entered based on Section 34(b) of the Investment Company Act. The firm will jointly and severally, along with Morgan Asset, disgorge $20,500,000 along with prejudgment interest and pay a civil penalty of $75 million to the SEC. The firm agreed to implement a series of undertakings as part of the settlement. In addition, the firm is paying $100 million into a state fund for investors.

Morgan Assets was also censured and a cease and desist order was entered based on Sections 206(1), (2) and (40 of the Advisers Act and Section 34(b) of the Investment Company Act. The firm also agreed to implement a series of undertakings.

Respondent Weller was ordered to cease and desist with respect to Rules 22c-1 and 38a-1 of the Investment Company Act. He was also suspended from association in a supervisory capacity in the industry and from participating in any penny stock offering for twelve months. In addition, he is denied the privilege of appearing and practicing before the Commission as an accountant with a right to reapply after two years. Mr. Weller also agreed to pay a civil penalty of $50,000.

Respondent Kelsoe was ordered to cease and desist with respect to Sections 206(1), (2) and (4) of the Advisers Act and Section 34(b) of the Investment Company Act. He was also barred from the industry and from participating in any penny stock offering. Mr. Kelsoe will pay a civil penalty of $250,000 to the SEC and $500,000 in penalties overall.

The disgorgement, prejudgment interest and penalties paid to the SEC will be paid into a Fair Fund for investors.

15 Food Companies That Serve You ‘Wood’

March 2, 2011

by Miriam Marcus Reimer in New York.

The recent class-action lawsuit brought against Taco Bell raised questions about the quality of food many Americans eat each day.

Chief among those concerns is the use of cellulose (read: wood pulp), an extender whose use in a roster of food products, from crackers and ice creams to puddings and baked goods, is now being exposed. What you’re actually paying for — and consuming — may be surprising.

Cellulose is virgin wood pulp that has been processed and manufactured to different lengths for functionality, though use of it and its variant forms (cellulose gum, powdered cellulose, microcrystalline cellulose, etc.) is deemed safe for human consumption, according to the FDA, which regulates most food industry products. The government agency sets no limit on the amount of cellulose that can be used in food products meant for human consumption. The USDA, which regulates meats, has set a limit of 3.5% on the use of cellulose, since fiber in meat products cannot be recognized nutritionally.

“As commodity prices continue to rally and the cost of imported materials impacts earnings, we expect to see increasing use of surrogate products within food items. Cellulose is certainly in higher demand and we expect this to continue,” Michael A. Yoshikami, chief investment strategist at YCMNet Advisors, told TheStreet.

Manufacturers use cellulose in food as an extender, providing structure and reducing breakage, said Dan Inman, director of research and development at J. Rettenmaier USA, a company that supplies “organic” cellulose fibers for use in a variety of processed foods and meats meant for human and pet consumption, as well as for plastics, cleaning detergents, welding electrodes, pet litter, automotive brake pads, glue and reinforcing compounds, construction materials, roof coating, asphalt and even emulsion paints, among many other products.

Cellulose adds fiber to the food, which is good for people who do not get the recommended daily intake of fiber in their diets, Inman said. It also extends the shelf life of processed foods. Plus, cellulose’s water-absorbing properties can mimic fat, he said, allowing consumers to reduce their fat intake.

Perhaps most important to food processors is that cellulose is cheaper, he added, because “the fiber and water combination is less expensive than most other ingredients in the [food] product.”

Indeed, food producers save as much as 30% in ingredient costs by opting for cellulose as a filler or binder in processed foods, according to a source close to the processed food industry who spoke with TheStreet on the condition of anonymity.

Inman said that in his 30 years in the food science business, he’s seen “an amazing leap in terms of the applications of cellulose fiber and what you can do with it.” He said powdered cellulose has a bad reputation but that more of his customers are converting from things like oat or sugar cane fibers to cellulose because it is “snow white in color, bland and easy to work with.”

Most surprising, said Inman, is that he’s been able to remove as much as 50% of the fat from some cookies, biscuits, cakes and brownies by replacing it with powdered cellulose — but still end up with a very similar product in terms of taste and appearance.

“We’re only limited by our own imagination,” Inman told TheStreet. “I would never have dreamed I could successfully put 18% fiber in a loaf of bread two years ago.”

He said cellulose is common in processed foods, often labeled as reduced-fat or high-fiber — products like breads, pancakes, crackers, pizza crusts, muffins, scrambled eggs, mashed potato mixes, and even cheesecake. Inman himself keeps a box of Wheat Thins Fiber Selects crackers, manufactured by Kraft Foods(KFT_)’ Nabisco brand, at his desk, and snacks on them daily, clearly unmoved by the use of wood pulp in its ingredients.

“Most consumers would be shocked to find these types of filler products are used as substitutes for items that they believe are more pure,” Yoshikami said. “We would expect increased disclosure to follow increased use of cellulose and other filler products as the practice increases in frequency.”

To that end, TheStreet rounded up a list of popular foods that use cellulose. It’s by no means an exhaustive list, and we suggest consumers read food labels carefully. Still, click through the slideshow to find out if your favorite foods contain the “all-natural” wood pulp…

(Please note the following lists are not exhaustive. Some companies list all ingredients on their Web sites. Other items were found in a local grocery store near TheStreet’s headquarters on Wall Street in New York City.)

Pepsi(PEP) uses cellulose in the following products:

# Aunt Jemima Frozen Blueberry Pancakes
# Aunt Jemima Original Syrup
# Aunt Jemima Original Syrup

Kellogg(K) uses cellulose in the following products:

# MorningStar Farms Chik’n Nuggets
# MorningStar Farms Chik Patties Original
# MorningStar Farms Buffalo Wings Veggie Wings
# Eggo Nutri-Grain Blueberry waffles
# Eggo Strawberry Waffles
# Eggo Blueberry Waffles
# Cinnabon Pancakes Original
# Cinnabon Pancakes Caramel
# Cinnabon Snack Bars Original
# Cinnabon Snack Bars Baked Cinnamon Apple

Weight Watchers International (WTW) uses cellulose in the following products:

# Vanilla Ice Cream Sandwich
# English Toffee Crunch Ice Cream Bar
# Giant Cookies & Cream Ice Cream Bar

General Mills(GIS) uses cellulose in the following products:

# Fiber One Ready-To-Eat Muffins (Wild Blueberry & Oats; Mixed Fruit, Nuts & Honey; Apple Cinnamon Bun, Banana Chocolate Chip)
# Fiber One Original cereal
# Fiber One Chewy Bars (90 Calorie Chocolate, 90 Calorie Chocolate Peanut Butter)
# Fiber One baking products (Apple Cinnamon Muffin Mix, Banana Nut Muffin Mix, Blueberry Muffin Mix)
# Pillsbury Moist Supreme Classic Yellow Cake Mix
# Pillsbury Mozzarella and Pepperoni Pastry Puffs
# Pillsbury Cheese and Spinach Crescent Pastry Puffs
# Pillsbury Artichoke and Spinach Bread Bowl Bites
# Pillsbury Buffalo Chicken Crescent Pastry Puffs
# Pillsbury Cream Cheese and Jalapeno Bread Bowl Bites
# Betty Crocker whipped frostings (Strawberry Mist, Chocolate, Cream Cheese)
# Betty Crocker Vanilla Amazing Glazes
# Duncan Hines Cake Mixes (Devil’s Food Cake Mix, Dark Chocolate Fudge, Strawberry Supreme, Fudge Marble, Classic Yellow, French Vanilla)

McDonald’s (MCD) uses cellulose in the following products:

# Fish Filet Patty
# McRib
# Premium Caesar Salad
# Chipotle BBQ Snack Wrap
# Premium Southwest Salad with Grilled Chicken
# Southern Style Chicken Biscuit
# Strawberry Sundae
# Natural Swiss Cheese (used in McRib, Quarter Pounder with Cheese, Angus Mushroom & Swiss, Premium Grilled Chicken Club Sandwich, Premium Crispy Chicken Club Sandwich, Angus Mushroom & Swiss Snack Wrap)
# Shredded Cheddar/Jack Cheese (used in Ranch Snack Wrap (Crispy and Grilled), Honey Mustard Snack Wrap (Crispy and Grilled), Chipotle BBQ Snack Wrap (Crispy and Grilled), Premium Southwest Salad with Grilled Chicken, Premium Southwest Salad with/without Crispy/Grilled Chicken, Premium Bacon Ranch Salad with/without Crispy/Grilled Chicken, McSkillet Burrito with Sausage)
# Barbeque Sauce
# Sweet ‘N Sour Sauce
# Shredded Parmesan Cheese (used in Premium Caesar Salad with/without Crispy/Grilled Chicken)
# Biscuit (Large and Regular) (used to make Bacon, Egg & Cheese Biscuit, Sausage Biscuit with Egg, Sausage Biscuit, Southern Style Chicken Biscuit, Big Breakfast with/without Hotcakes)
# Vanilla Reduced Fat Ice Cream (used in Strawberry Sundae, Hot Caramel Sundae, Hot Fudge Sundae, McFlurry with M&M’S Candies, McFlurry with OREO Cookies, Chocolate Triple Thick Shake, Strawberry Triple Thick Shake, Vanilla Triple Thick Shake)
# Sugar Free Vanilla Syrup (used in Premium Roast Coffee, Espresso)

Sara Lee(SLE) uses cellulose in the following products:

# Jimmy Dean Frozen Breakfast Bowl (Sausage & Gravy)
# Jimmy Dean D-lights Turkey Sausage Breakfast Bowl
# Jimmy Dean D-lights Turkey Sausage Croissant
# Jimmy Dean Breakfast Entrée (Scrambled Eggs with Bacon/Sausage and Cheese Diced Apples & Seasoned Hash)

Yum’s Brands’(YUM) Taco Bell uses cellulose in the following products:

# Southwest Chicken
# Caramel Apple Empanada
# Corn Tortilla
# Enchilada Rice
# Nacho Chips
# Red Strips
# Strawberry Topping
# Zesty Dressing

Jack in the Box(JACK) uses cellulose in the following products:

# Cheese, Cheddar, Shredded (used in Grilled Chicken Salad, Chicken Club Salad with Crispy Chicken, Meaty Breakfast Burrito, Hearty Breakfast Bowl)
# Cheese, Pepper Jack, Shredded (used in Chicken Fajita Pita, Southwest Chicken Salad with Grilled Chicken, Meaty Breakfast Burrito)
# Honey Mustard Dipping Sauce
# Ice Cream Shake Mix
# Log Cabin Syrup
# Mini Funnel Cake
# Mozzarella Cheese Sticks (also part of Sampler Trio)
# Smoothie Base (Mango, Strawberry, Strawberry Banana)
# Tortilla, Flour (used for Chorizo Sausage Burrito, Steak & Egg Burrito, Meaty Breakfast Burrito)
# White Cheese Sauce (used in Breakfast Bowl (Hearty and Denver))

Kraft Foods(KFT) uses cellulose in the following products:

# Wheat Thins Fiber Selects
# Frozen Bagel-Fuls
# Macaroni & Cheese Thick ‘n Creamy
# Kraft Macaroni & Cheese Three Cheese W/mini-shell Pasta

Yum’s Brands’(YUM) Pizza Hut uses cellulose in the following products:

# Parmesan Romano Cheese
# Taco Bean Sauce
# Shredded Cheddar (for Taco Pizza)
# Breadstick Seasoning (used to make Cheese Breadsticks)
# WingStreet Bone-In (in the batter)
# Meatballs (for pasta products, sandwiches)
# White Pasta Sauce (used for PastaBakes Marinara, PastaBakes Meatball Marinara, PastaBakes Primavera, PastaBakes Chicken Primavera)
# Alfredo Sauce (used for PastaBakes Marinara, PastaBakes Meatball Marinara, PastaBakes Primavera, PastaBakes Chicken Primavera)
# Fat Free Ranch Dressing

Wendy’s Arby’s(WEN) uses cellulose in the following products:

# Asiago Cheese (used in Spicy Chicken Caesar Salad, Asiago Ranch Chicken Club, Caesar Side Salad)
# Fat Free French Dressing (for Apple Pecan Chicken Salad, Baja Salad, Spicy Chicken Caesar Salad, BLT Cobb Salad)
# Blue Cheese Crumbles (used in Apple Pecan Chicken Salad, BLT Cobb Salad)
# Cheddar Pepper Jack Cheese Blend, Shredded
# Chocolate Sauce
# Coffee Toffee Twisted Frosty (Chocolate, Vanilla)
# Frosty (Chocolate and Vanilla)
# Frosty Shake (Frosty-cino, Chocolate Fudge, Strawberry, Vanilla Bean)
# Milk, 1% Low Fat Chocolate Milk

Sonic(SONC) uses cellulose in the following products:

# Ice Cream
# Sonic Blast
# Banana Split
# Ice Cream Cone

Dole Food(DOLE) uses cellulose in the following products:

# Peaches & Crème Parfait
# Apples & Crème Parfait

Yum’s Brands’(YUM) KFC uses cellulose in the following products:

# KFC Cornbread Muffin
# Apple Turnover
# Honey Mustard BBQ Sauce
# Lil’ Bucket Strawberry Short Cake Parfait
# Lil’ Bucket Lemon Crème Parfait
# Lil’ Bucket Chocolate Crème Parfait
# Oreo Cookies and Crème Pie Slice
# Reese’s Peanut Butter Pie Slice
# Popcorn Chicken
# Strawberry Cream Cheese Pie Slice

Nestle(NSRGY) uses cellulose in the following products:

# Hot Cocoa Mixes (Mini Marshmallows, Rich Milk Chocolate, Chocolate Mint, Chocolate Caramel)

Wikileaks to sue Visa, Mastercard over “financial blockade”

July 1, 2011

CBS News

WikiLeaks said late Friday that it intends to sue Visa and Mastercard for blocking donations to the service, an action it described as “an unlawful, U.S. influenced, financial blockade.”

In December, British police arrested WikiLeaks founder Julian Assange on a Swedish warrant seeking his detention for questioning in a sex-crimes investigation. Assange, who angered Washington by spilling thousands of government secrets on the Internet, has described his arrest as politically-motivated. Assange earned the ire of U.S. officials for publishing a secret State Department inventory of sites across the world deemed vital to American security.

Wikileaks said that it plans to file its complaint with the European Commission but indicated that “further actions in other jurisdictions will follow,” according to the statement..

In a statement, Wikileaks described last December’s decision by the companies to block credit card transactions to WikiLeaks and DataCell as “a serious violation of the Competition Rules of the EU (Article 101(1) and 102).” It also said that the companies violated Danish merchant laws by terminating the payment services and by their refusal to reinstate them.

The lawsuit, which will be joined by Wikileaks’ credit card processing partner, Datacell, comes in response to the move last year by the financial services companies to stop payments to Wikileaks. At the time, the companies said they stopped processing donations over concerns that WikiLeaks may have broken the law in the way that it obtained and published secret documents on the Internet.

Other companies which took similar action included PayPal and Amazon. They were not mentioned in the press release put out by Wikileaks.

The Crooked Cross: What are the End Days? A study in deception

July 4, 2011

Frederick Norris

‘Armageddon’ is actually purported to be a battle. According to Pentecostal interpretations, the Bible states that Armageddon will be a battle where God finally comes in and takes over the world and rules it the way it should have been ruled all along. After this vaguely-defined battle of Armageddon, Pentecostals firmly believe that there will follow 1000 years of peace and plenty which, according to their lore and legend, will be the sole lot of their sect and no other.

The actual scene of the fictional battle is referred to by Pentecostals as being clearly set forth in Revelation 16:14-16. It is not. The specific citation reads, in full:

  • “14. For they are the spirits of devils, working miracles, which go forth unto the kings of the earth and of the whole world, to gather them to the battle of that great day of God Almighty.
  • “15. Behold, I come as a thief. Blessed is he that watcheth, and keepeth his garments, lest he walk naked, and they see his shame.
  • “16. And he gathered them together into a place called in the Hebrew tongue Armageddon.”

This sparse mention of Armageddon has given rise to the elaborate but entirely fictional legend of the Final Battle between the forces of good and evil. There is no mention in Revelations 16: 14-15 whatsoever of Parusia or the second coming of Jesus, the apocryphal Anti-Christ, the Rapture or the many other delightful inventions designed to bolster the Pentecostal elect and daunt their adversaries. These adversaries consist of all other branches of the Christian religion with especial emphasis placed on Jews and Catholics. The Pentecostals also loathe Muslims, Buddhists, agnostics, atheists, and an endless list of anyone and everyone whose views clash with theirs, such as scientists and any academic who views the evolutionary theories of Charles Darwin and Gregor Mendel as anything but tissues of lies.

The Antichrist

The Antichrist is described by Pentecostals as the “son of perdition” and the “beast”!

They claim that this interesting creature will have great charisma and speaking ability, “a mouth speaking great things”.

The Antichrist, they allege, will rise to power on a wave of world euphoria, as he temporarily saves the world from its desperate economic, military & political problems with a brilliant seven year plan for world peace, economic stability and religious freedom.

The Antichrist could well rise out of the current chaos in the former Soviet Union. The prophet Ezekiel names him as the ruler of “Magog”, a name that Biblical scholars agree denotes a country or region of peoples to the north of Israel. Many have interpreted this to mean modern day Russia. It could also be Turkey, Greece, Macedonia, Croatia, Hungary, Poland, perhaps one of the Baltic States or even the lewd and dissolute Socialist Sweden.

His power base will include the leading nations of Europe, whose leaders, the Bible says, will “give their power & strength unto the beast.”

The Bible even gives some clues about his personal characteristics. The prophet Daniel wrote that the Antichrist “does not regard the desire of women.” This could imply that he is either celibate or a homosexual. Daniel also tells us that he will have a “fierce countenance” or stern look, and will be “more stout than his fellows”–more proud and boastful.

Unfortunately, the so-called Book of Daniel was written during the reign of the Roman Emperor Nero, not many decades earlier as its proponents claim, and has been extensively modified by early Christian writers to predict the arrival of their personal Messiah, or Christ, on the Judean scene. The so-called “wonderful” prophetic statements put into the mouth of Daniel are absolutely and wondrously accurate…up to the reign of Nero and then fall as flat as a shaken soufflé afterwards

It is well known that Pentecostals loathe homosexuals, among many other groups not pleasing to them, and would like nothing better than to shove them into a bottomless pit filled with Catholics, rock and roll fans, teenaged mothers, Communists, gun control advocates, Tarot card readers, Christian Scientists, abortionists, Wayne Newton fans, Asians, Jews, African-Americans and Latino Surnamed Hispanics.

The seven year peace-pact (or covenant) that is engineered by the Antichrist is spoken of a number of times in the Bible, and may even have already been signed in secret. The historic peace agreement signed between Israel and the PLO at the White House on September 13, 1993, vividly illustrates how dramatically events in the Middle East are presently moving in this direction eager Pentecostals, awaiting their Celestial Omnibus, will inform anyone who is interested and a greater legion of those who are not.

Under the final terms of the fictional Covenant, Jerusalem will likely be declared an international city to which Judaism, Islam and Christianity will have equal rights. Scripture indicates that the Jews will be permitted to rebuild their Temple on Mt. Moriah, where they revive their ancient rituals of animal sacrifice.

According to modern prophecy the Antichrist will not only be a master of political intrigue, but also a military genius. Daniel describes several major wars that he fights during his 7-year reign, apparently against the U.S. and Israel, who will oppose him during the second half of his reign.

For awhile, most of the world is going to think the Antichrist is wonderful, as he will seem to have solved so many of the world’s problems. But, three-and-a-half years into his seven year reign he will break the covenant and invade Israel from the North.

At this time he will make Jerusalem his world capitol and outlaw all religions, except the worship of himself and his image. The Bible, according to the Pentecostals, says that the Antichrist will sit in the Jewish Temple exalting himself as God and demanding to be worshipped. If this passage, and many others of its kind, actually appears in the King James Version of the Bible, no one has ever been able to find it

It is at this time that the Antichrist imposes his infamous “666” one-world credit system.

It must be said that the Antichrist does, in point of fact exist. He can be seen on a daily basis on the walls of the Cathedral at Orvieto, Italy in the marvelous frescos of Lucca Signorelli. He looks somewhat like a Byzantine depiction of Christ with either a vicious wife or inflamed hemorrhoids .

Pentecostals strongly believe that U.S. public schools “departed from the faith” when in 1963 the Bible and prayer were officially banned. Now, Pentecostals believe with horror, thousands of these same schools are teaching credited courses in “the doctrines of devils”–the occult and Satanism.

Even a cursory check of curriculum of a number of American public school districts does not support this claim but then the Pentecostals have stated repeatedly that they represent 45% of all Protestants in America. The actual number, excluding the Baptists, is more like 4%.

What they lack in actual numbers they more than compensate for by their loud and irrational views so that at times it sounds like the roar of a great multitude when in truth, it is only a small dwarf wearing stained underwear and armed with a bullhorn, trumpeting in the underbrush

Frantic Pentecostals estimated that according to their private Census for Christ there are over 200,000 practicing witches in the United States and allege there are literally millions of Americans who dabble in some form of the occult, psychic phenomena, spiritualism, demonology and black magic. Their statistics claim that occult book sales have doubled in the last four years.

What is seen by terrified Pentecostals as The Occult today is no longer the stuff of small underground cults. They believe that many rock videos are an open worship of Satan and hell that comes complete with the symbols, liturgies, and  rituals of Satanism, and the Pentecostals firmly and loudly proclaim to anyone interested in listening, that “millions of young people” have been caught in their evil sway.

Popular music is termed “sounds of horror and torment” that Pentecostals firmly believe is literally “driving young people insane and seducing them into a life of drugs, suicide, perversion and hell.” It is forgotten now but the same thing was once said about ragtime and later, jazz. If this had been true, perhaps the real reason behind the First World War, the 1929 market crash, the rise of Franklin Roosevelt and the lewd hula hoop can be attributed to Scott Joplin and Ella Fitzgerald.

It is also to be noted that the immensely popular Harry Potter series of children’s books are loudly proclaimed as Satanic books designed to lure unsuspecting children into the clutches of the Evil One. Any sane person who has read these delightful fantasy books will certainly not agree with these hysterical strictures. In point of fact, it would be exceedingly difficult to locate any person possessing even a modicum of sanity who would believe any of the weird fulminations of the Pentecostals.

Outraged Pentecostals now firmly state that in the beginning years of the Twenty First Century, “even the most shameless acts of blasphemy and desecration are socially acceptable.”

“Acts of blasphemy and desecration” sound like human sacrifices carried out on nuns at bus stops during the noontime rush hour or lewd acts with crucifixes performed by drug-maddened transvestites on commercial airlines.

In his weird Book of Revelation the lunatic John of Patmos claimed he foresaw that in the last days the world would turn away from God in order to worship and follow Satan.

Such a prophecy would have seemed believable to previous generations, but not so in our more enlightened and secular humanist day. Hard-core Satanism has been called by rabid Pentecostals noise-makers as: “the fastest-growing subculture among America’s teens”, and the revival of witchcraft & the occult is “one of the World’s fastest growing religions!”

Mob Figure May Unearth Corruption of Lawmen

June 30, 2011

by Michael Cooper and Richard A. Oppel

New York Times

During the 16 years James (Whitey) Bulger spent on the lam, several of his former partners in crime testified that he had made payoffs to two dozen Boston police officers and half a dozen F.B.I. agents over his long criminal career — giving them thousands of dollars and rings, a Meerschaum pipe and Lalique glass.

But few lawmen — with the notable exception of John Connolly, his longtime handler at the F.B.I. — were ever convicted of corruption.

Now that he is back in custody after his capture last week in Santa Monica, Calif., the looming question is whether Mr. Bulger, a longtime informant — who fed information about his rivals to the F.B.I. for years in return for their protection — will squeal again.

“I think there are a whole bunch of people out there he could probably name” who are worried what he might say, said Robert Fitzpatrick, who was an assistant special agent in charge of the Boston office of the F.B.I. in the 1980s, and who has testified that he tried unsuccessfully to end Mr. Bulger’s run as an informant.

The Bulger saga has been explored in trials, Congressional hearings, reams of newsprint and a shelf of books. But a review in recent days of hundreds of pages of trial transcripts and court decisions, along with interviews with several former law enforcement officials and lawyers connected with the case, shows that, despite all the scrutiny, there has never been a full official reckoning of the public corruption that allowed Mr. Bulger to thrive. His partners have testified that former F.B.I. agents were on the take, and named names, but in many cases, the agents simply denied it and nothing happened. A report promised years ago by a special prosecutor was never issued. It is unclear even now whether the government wants to reopen old wounds.

“It’s not always just the guy pulling the trigger who is guilty,” said Tom Foley, a retired state police commander who pursued Mr. Bulger with Ahab-like intensity for years, only to see him elude capture thanks to help from his F.B.I. friends. “It’s also the people who set that up and allowed it to happen, and especially the people who had a responsibility to put a stop to it.”

Even if Mr. Bulger, 81, decides to talk, it is not clear that he has much to bargain with: he stands accused of 19 murders, and some of his closest associates have implicated him. The statute of limitations has passed for most crimes he could talk about, and most former investigators are retired or dead. But former F.B.I. agents and lawyers connected to the case say that Mr. Bulger may decide that he wants to settle a few scores.

For much of the 1980s, he turned the world of Boston law enforcement upside down.

The F.B.I. considered him and his partner Stephen (the Rifleman) Flemmi “top echelon” informants, but the pair seemed to get more from the bureau than they gave. Federal agents helped them by locking up rivals, protected them from other investigators and tipped them off when witnesses threatened to implicate them. Those would-be witnesses quickly wound up dead, sometimes with their teeth removed to make it harder to identify the bodies.

In those days it was not just the lawmen who referred to the gangsters with colorful nicknames like Whitey and the Rifleman. Mr. Bulger had his own nicknames for the F.B.I. agents he wined and dined and used, associates testified: Zip, Agent Orange, The Pipe, Doc and Vino.

John Connolly was the F.B.I. agent who handled both Mr. Bulger and Mr. Flemmi, using their information to build high-profile cases against the Mafia. Mr. Bulger called him Zip because they came from the same South Boston housing project and had shared a ZIP code. But Mr. Connolly grew too close to his source. He was convicted of racketeering and obstruction of justice in 2002, in part for tipping Mr. Bulger off in 1994 when he was finally about to be indicted. Then he was convicted of second-degree murder in 2008 for warning Mr. Bulger in 1982 that a man named John Callahan was likely to implicate him in several murders connected with an attempt to profit from World Jai Alai, a company with frontons in Connecticut and Florida. Mr. Callahan’s body was found in the trunk of a car at Miami International Airport, after an attendant noticed blood dripping from it.

A lawyer for Mr. Connolly, James E. McDonald, said that Mr. Bulger’s capture could stir things up. “If I were the Department of Justice prosecutors, I’d be nervous, because if Bulger starts to talk, the whole edifice they have created about John being the corrupt agent will have holes you could drive a truck through,” he said.

Mr. Connolly did not act alone.

His supervisor at the F.B.I., John Morris, called Vino, admitted to taking $7,000 in bribes from Mr. Bulger and Mr. Flemmi — beginning when he asked them to pay for his mistress to fly to a training session he was attending in Georgia. Mr. Bulger and Mr. Flemmi took to calling him Vino after a 1981 dinner at the Hotel Colonnade in Boston, where he drank a great deal of wine. They later sent him a case, with $1,000 in it. But Mr. Morris was granted immunity when he agreed to cooperate with the government.

Still, he may have the most to fear. Mr. Morris admitted that in 1988 he leaked information to the The Boston Globe, which has long done ground-breaking reporting on the Bulger saga, that Mr. Bulger was an F.B.I. informant. His lawyer, Michael A. Collora, said that Mr. Morris did so in the hopes that exposing the troubled relationship would end it. But Mr. Bulger’s brother William M. Bulger, a former president of the Massachusetts State Senate, saw a more sinister motive. He testified before Congress in 2003 that the leak’s purpose was “bringing about the death of James Bulger.”

After Whitey Bulger became a fugitive, he called Mr. Morris with a threat: he vowed to take Mr. Morris with him if he went down. But Mr. Collora noted in an interview this week that Mr. Morris, who he said worked part-time at a wine store, had already admitted wrongdoing and had been granted immunity. The statute of limitations has run its course for most crimes, he said, and there are serious questions about what kind of witness Mr. Bulger would make. “A situation where you have a man who’s been on the lam for 16 years, who says now I’ll help you out, even though he’s done 19 murders?” he asked.

One memo that has received little scrutiny shows how officials in Washington were warned that the F.B.I.’s Boston office was too close to Mr. Bulger. It was written in 1982, after the jai alai murders were linked to Mr. Bulger’s group, known as the Winter Hill Gang. An agent in the Miami office warned officials in Washington that local investigators were cutting the F.B.I. out of the loop, in part because they believed “that some agents in the Boston F.B.I. would not pursue allegations against the Winter Hill Gang vigorously.” Sean M. McWeeney, who was in charge of the bureau’s organized crime section, wrote that he held meetings in Washington and Tulsa, Okla., to reassure local investigators.

It took two decades for the full story to get out — including Mr. Connolly’s role in the murders.

John McIntyre was another witness who never made it to the stand. He was a 32-year-old fisherman who agreed to cooperate with investigators in 1984 about Mr. Bulger’s involvement in drug and gun shipments. Tipped that there was an informer, Mr. Bulger and Mr. Flemmi chained Mr. McIntyre to a chair and made him confess. They then tried to strangle him with a rope, and when that did not work, Mr. Flemmi testified, they shot him and removed his teeth.

A federal judge awarded Mr. McIntyre’s estate $3.1 million, finding that the federal government was liable for his death because Mr. Connolly had leaked Mr. Bulger and Mr. Flemmi enough information for them to identify him as an informer. Steven Gordon, the Concord, N.H., lawyer who represented the estate, said the government’s defense showed a continued refusal to come clean. “They allowed a whole city to come under siege,” he said.

When Mr. Bulger fled, some joked that he should be on the F.B.I.’s “least wanted” list. In a 1999 ruling after hearings that helped expose the F.B.I.’s dealings with Mr. Bulger, a Federal District Court judge, Mark L. Wolf, cited evidence that “raises questions concerning whether the F.B.I. has consistently made its best efforts to apprehend” him. He noted that agents waited 15 months before approaching Theresa Stanley, the first girlfriend Mr. Bulger fled with, who returned to Boston in 1995 because she disliked life on the road. Judge Wolf began his decision with a quotation by Lord Acton, who wrote in 1861 that “every thing secret degenerates, even the administration of justice.”

“This case,” the judge wrote, “demonstrates that he was right.”

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 (no one else ever does, either) 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 eighty-sixth chapter

Conversation No. 86

Date: Monday, June 2, 1997

Commenced: 8:30 AM CST

Concluded: 8:50 AM CST

RTC: Hello, Gregory. Up and at ‘em today?

GD: I wish. I should have stayed in bed today. Some days I get up at six and work through fourteen hours almost without stopping and the next day, I have a hard time reading the paper. Well you play the hand you get dealt. Some bonehead called me last night with the thrilling news that Vulva Press was interested in the Mueller story and wanted to do a book on me. Isn’t that thrilling? Another asshole emerges from the sewer.

RTC: Oh, yes, I know about some of this. The Company is terrified about this Mueller business. If he is linked with us, we will have the wrath of Judea down upon us. You know, Gregory, I am filled up to the top with the Jews wailing and gnashing their teeth over matters that no one else gives a fuck about. Of course we used the Gestapo and other nasty people after the war. They didn’t object then but now they do. After all, we are not sensitive to their needs.

GD: Oh, Jesus, spare me. Every cunt I  have ever lived with starts moaning about her needs. Like I care about her needs. The only thing I care about is what she has between her legs and one gets tired of the same old stories. ‘Give me this,’ ‘give me that,’ ‘you don’t love me because if you did, you’d let my 800 pound brother come and stay with us when he gets out of the home.’

RTC: (Laughter) Well, I thank God I don’t have to put up with that.

GD: No, and neither do I. When I get tired of the increasingly looser love canal, I get a hold of them like a bowling ball and escort them out of my apartment, along with the sleazy clothes, the pictures of spastic relatives and all the little pieces of lower middle class crap they carry around with them like hermit crabs. They make latex devices that you can fill with warm water that pass very well and you don’t have to put up with some dumb slut putting your expensive shaving cream all over her legs and then trying to shave with your once functioning electric razor and don’t laugh, one did this. If …And one time, I came home from work, tired as hell and my little miss whiner asked me, when I was in the head, if I wanted beans for dinner. Yes, I told her, beans would be fine. Ten minutes later a large explosion from the other side of the door, followed by screaming. Outside with my pants around my ankles. What? Rubber-thighs had put a can of beans on the gas but, brilliant as she was, she never bothered to open it first and dump the contents into a pan. The beans were now all over the kitchen walls and ceilings. I made her clean the kitchen with her toothbrush and sat there watching her. Jesus, what a stupid trull. We went to the store and she bought about ten TV dinners. Back home she started screaming that she had been ripped off. It seems that the picture on the top of the box showed a plate and knife and fork. She could not find them inside the box. I pointed out to her that it said ‘serving suggestion’ under the picture but she didn’t get that either. Oh no, that’s isn’t the end of that one, Robert. About ten minutes later, the apartment filled with smoke. What had she done? Why, she put the TV dinner into the oven at 350 degrees without bothering to take it out of the box.

RTC: Gregory, wherever did you find her?
GD: Down at the city garbage dump fighting with the rats over chicken parts.

RTC: (Laughter)

GD: Well, that one went her way, in tears. I swore I would buy a sheep but of course I found another one. This one loved to get into the bathroom about five minutes before I took my shower to go to work. On the weekend when I didn’t work, the lazy cunt never got up before noon but when I absolutely had to shower and shave, she always got there first and whined when I told her to get out. Robert, it is by the grace of God that I never killed one of them. I know the perfect revenge on these rampant whiners, Robert, but civility makes me hesitate to mention it to you.

RTC: Try me.

GD: That’s what the chubby one said one night out by the pool when I was taking out my trash. Take trash out one trip and bring it back on the return. Anyway, for the perfect revenge Robert, always make them sleep on the wet spot.

RTC: (Laughter) You can be exceedingly crude sometimes, Gregory, and yet ten minutes later, very civil and correct. You’ve been married twice?
GD: God, won’t you let me forget? Fine looking women, Robert, but always the whining demands. If I like to visit a library every Saturday, whine because they want me to take them to see their obese Mother or their Uncle Einar in the nursing home. Fine. I take them and suffer the smells of urine and body odor. I change my library visits to Sunday. Oh, then the whining starts about why they now want to visit Uncle Einar and listen to him talk with long dead realtives on Sunday, not Saturday. What do I do? I tell them to bend over and I will drive them home. God, more weeping and so on. What most women need is not a huge zucchini but a leather belt applied to the buttocks five times a day. And ten times a day on Sunday because God wants it. Jesus, all I really want is peace and quiet and some reasonable order without having to listen to non-stop bitching, whining, demanding and terrible atrocities in the kitchen, bathroom and dining room. And I can do without the soap operas on television that go on until I have thought about tossing the set out of the window. Along, of course, with my tender and loving roommate. Ah, but why make you jealous by hearing of my tender moments?

RTC: Well, you don’t have to invite them in, do you?
GD: Point taken. No, I do not. But one does like company but Jesus, the price I have had to pay for it. Believe me, dogs are much better friends. I would rather deal with the occasional mess on the floor than five pounds of hair jammed into the bathtub drain or a nice sanitary napkin in the sink. I mean a used one. For dead babies in the toilet, I call the police. And the idiot cousins or brothers who just got out of quod because of some incident in a gay bar with a 700 pound transvestite and their pimp. Peace and quiet, Robert, peace and quiet. I can well understand why some people commit murder but it really isn’t worth it. Out the door, holding them like a bowling ball, out with the clothes and everything else, wash the hands carefully with Lysol, turn off the fucking soap operas and get a good night’s sleep. Oh well, a consummation devoutly to be wished, Robert. This has been such an elevated conversation. Next time, I ought to regale you about my bowel habits. On the other hand, I can discuss my friend Eric Hoffer’s writings with you.

RTC: That might be much more interesting but I take no offense with your letting off steam, Gregory. At least you don’t run amok in the streets with an UZI.

GD: No, I prefer a white man’s gun, Robert, not an UZI.

(Concluded at 8:50 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, and fatal, “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 to the United States.

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, lives in Florida, and works for the CIA as an “advisor.”

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 Hungarians 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 Archives. A strong supporter of holocaust writers specializing in creative writing. Although he prefers to be called ‘Dr,’ in reality he has no PhD.

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