Henry Waxman

Two Brothers and Two Scandals

dlindorff — Thu, 15 Nov 2007 12:38:52 -0500

By Dave Lindorff

The State Department’s top internal investigator, Inspector General Howard Krongard, revealed in a House Oversight and Government Reform Committee hearing Tuesday, that his brother, Alvin B. Krongard, was a member of the advisory board of Blackwater, the very private mercenary company whose bloody, murderous behavior the IG office was supposed to be investigating.

Unmentioned in reports on this tainted relationship was the fact that Alvin Krongard, the former third-ranking leader of the CIA from 2001-2004, has also been the subject of some speculation regarding possible foreknowledge of the 9-11 attacks by some within the intelligence establishment.

Alvin Krongard joined the CIA in 1998, leaving a post at Bankers Trust, which, in 1997 acquired the venerable investment-banking house of Alex Brown. Prior to the acquisition, Krongard had been CEO and chairman of the board of Alex Brown. In the merged firm, he became head of private banking for Bankers Trust, where he was responsible for the bank’s relations with extremely wealthy (and extremely private) clients.

What makes this history of particular interest is that Alex Brown was the investment bank that handled most of the suspicious short-selling “puts” that were placed on the stocks of four companies—United Airlines, American Airlines, Morgan Stanley Dean Witter and Merrill Lynch—that were pummeled by the 9-11 attacks.

As has been reported in Bloomberg Financial News Service reports and in the San Francisco Chronicle, in the several days preceding September 11, 2001, unidentified investors placed an unusual number of “puts” on the stocks of the two airlines whose planes were hijacked that day, as well as on the two investment banks, one of which occupied 22 floors of one of the World Trade Center towers and the other of which owned a building directly across the street which was significantly damaged and forced to close down.

According to news reports, between Sept. 6 and Sept. 9, some 4744 put orders were placed on United Airlines, compared to just 393 calls (bets that the stock would rise). On September 10, 4516 puts were placed for American Airlines stock, vs. only 748 calls. These orders were six times the normal volume of puts and calls on the Chicago Board Options Exchange for those firms. Moreover, there were no such puts placed on any other airlines, and there was no news justifying such orders at the time. In the three days prior to 9/11, 2151 puts were placed on Morgan Stanley shares, and 12,115 puts on Merrill Lynch, companies that also were not at the time the subjects of any negative news.

The stocks of those four companies, following the attacks and the collapse of the Twin Towers, subsequently tanked, making the combined puts worth about $16 million.
According to the San Francisco Chronicle, no one collected the $2.5 million in profits from the puts placed on United Airlines. The identities of the investors in the put orders have never been disclosed by Alex Brown.

Incredibly, there was never any serious investigation of these peculiar and suspicious investments, though they clearly suggest that someone knew something was going to happen that would make those four companies’ stocks plunge in value.

The US corporate news media has never pursued this story or in many cases even reported it, nor was it seriously investigated by the FBI or the 9-11 commission.

Could Krongard, in his role as executive director of the CIA, have had inside information in the days ahead of the attacks, that an attack on the World Trade Center, involving the hijacking of planes operated by UAL and American Airlines, was imminent? Could he have supplied that information to clients of Bankers Trust and its subsidiary Alex Brown, so that the put investments could be made? If so, who else in the federal government knew?

We can’t know, because, amazingly, nobody’s dragged Krongard or officials of the bank before a congressional panel and demanded answers under oath.

So now we see that the Krongard brothers have a level of integrity that is down in the sewer, with one working for a murderous mercenary outfit that has been slaughtering innocent Iraqis in the course of providing “protection” to State Department officials in Iraq, and the other pretending to investigate the activities of that private firm, never mentioning the grotesque conflict of interest of having his brother working for the very firm he’s supposedly investigating.

Maybe, given this sorry picture, House Oversight Committee Chair Rep. Henry Waxman will finally see fit to call Alvin Krongard and other witnesses in to question them under oath about whether he also had a conflict of interest in serving as a top ranking CIA executive while perhaps maintaining links with Alex Brown, and whether he had anything to do with those peculiar puts.
___________________

DAVE LINDORFF is a Philadelphia-based investigative reporter and columnist. His latest book, co-authored by Barbara Olshansky, is "The Case for Impeachment" (St. Martin's Press, 2006 and now available in paperback). His work is available at www.thiscantbehappening.net

Welcome to the Jungle: US Military Psychological Operations and You

Heather Wokusch — Sun, 12 Aug 2007 09:28:41 -0400

"...the people shall become so corrupted as to need despotic Government, being incapable of any other." - Benjamin Franklin, 1787

They say that if you drop a frog into a pot of boiling water it will immediately jump out, but that if you raise the pot's heat gradually, the frog won't react.

The US public has been on a slow boil since 2001. This administration's rollbacks have been so consistent and so egregious that it's no surprise many Americans feel apathetic.

And that begs the question: What exactly would it take to get the US public spurred into action?

Sentient World Simulation (SWS) may have an answer. It's a computer-based project designed to "generate alternative futures" and no surprise, the US Defense Department is actively involved.

According to one of the project's developers, Purdue University professor Alok Chaturvedi, "SWS will consist of a synthetic environment that mirrors the real world in all it key aspects - Political, Military, Economic, Social, Information, and Infrastructure." The goal is to copy each person on earth into the SWS parallel universe, and then see how they respond to external events such as natural disasters or political upheavals.

The concept paper Chaturvedi co-authored additionally notes, "SWS provides an environment for testing Psychological Operations (PSYOP)," to help the military "develop and test multiple courses of action to anticipate and shape behaviors of adversaries, neutrals, and partners."

To anticipate and shape behaviors of adversaries, neutrals, and partners.

Blurring the lines between military and civilian Psychological Operations is nothing new. In 1989, US forces in Panama blasted Guns N' Roses' "Welcome to the Jungle" into the Vatican Embassy during negotiations for the handover of General Manuel Noriega, and from 1998-1999, US military PSYOP personnel interned at both CNN and NPR.

More recently, a 2003 Pentagon document called Information Operations Roadmap detailed the US military's approach to exploiting information in order to "keep pace with warfighter needs and support defense transformation." Personally approved by former Defense Secretary Rumsfeld, the document was declassified in 2006 and covers everything from the Pentagon's plans for Computer Network Attack ("We Must Fight the Net") to beefing up the use of Psychological Operations ("We Must Improve PSYOP") to manipulating information through means including: "Radio/ TV/Print/ Web media designed to directly modify behavior and distributed in theater supporting military endeavors in semi or non-permissive environment."

While The Smith-Mundt Act of 1948 forbids US propaganda intended for foreign audiences from being used domestically, Information Operations Roadmap acknowledges that "information intended for foreign audiences, including public diplomacy and PSYOP, increasingly is consumed by our domestic audience and vice-versa."

The 2003 Pentagon document adds, "the distinction between foreign and domestic audiences becomes more a question of USG [U.S. government] intent rather than information dissemination practices."

Perhaps that's why a top US general ordered public affairs to be joined with combat PSYOP into one "strategic communications office" in Iraq in the summer of 2004.

Domestically, it doesn't help that SWS and other developments in military Psychological Operations are accompanied by rollbacks in the right to dissent and bipartisan support of government surveillance of American citizens.

Makes you wish our cyberspace clones could tell us how best to fight the Matrix.

At the very least, we must become more vigilant about the ongoing use of military PSYOP and misinformation – the Pat Tillman case is a perfect example. Holding the Defense Department and media accountable for every mislead regarding the Bush administration's military adventurism is more important than ever.

Action Ideas:

1. For a great database on the Bush Administration's misleads about Iraq, see Rep. Henry A. Waxman's Iraq on the Record. (http://oversight.house.gov/IraqOnTheRecord).

2. One Defense Department group particularly especially interested in these topics is The Defense Advanced Research Projects Agency (DARPA). Its Information Exploitation Office, (http://dtsn.darpa.mil/ixo/) for example, is focused on "shaping the battlespace before conflict" and its site is filled with snappy computer graphics reminiscent of militaristic video games. Taxpayer dollars hard at work.

3. For media watchdog groups, check out Fairness & Accuracy in Reporting (http://www.fair.org) and Media Matters for America (http://mediamatters.org)

4. Had enough? E-mail, call or write the White House, Congress or state and local government at http://www.congress.org/congressorg/home/.

Heather Wokusch is the author of The Progressives' Handbook: Get the Facts and Make a Difference Now series. For a linked version of the article or to contact Heather, visit www.heatherwokusch.com.

Rally TOMORROW 8/7/07 for Impeachment Meeting with Rep. Waxman (CA 30)

Chip — Mon, 06 Aug 2007 15:58:56 -0400

Want to make a difference for impeachment? Check out this event. It's organized on short notice, so please pass it around so we can get as many people there as possible to show support for restoring Constitutional government to our republic:

http://www.democrats.com/node/13902

Going Broke Under Bush - How the US Sent $12 Billion in Cash to Iraq, and Watched it Vanish

CactusPat — Thu, 08 Feb 2007 05:58:43 -0500

How the US sent $12bn in cash to Iraq. And watched it vanish - Special flights brought in tonnes of banknotes which disappeared into the war zone

An armed guard poses beside pallets of $100 bills in Baghdad. Almost $12bn in cash was spent by the US-led authority...

The US flew nearly $12bn in shrink-wrapped $100 bills into Iraq, then distributed the cash with no proper control over who was receiving it and how it was being spent... (more)

The staggering scale of the biggest transfer of cash in the history of the Federal Reserve has been graphically laid bare by a US congressional committee.

In the year after the invasion of Iraq in 2003 nearly 281 million notes, weighing 363 tonnes, were sent from New York to Baghdad for disbursement to Iraqi ministries and US contractors. Using C-130 planes, the deliveries took place once or twice a month with the biggest of $2,401,600,000 on June 22 2004, six days before the handover.

Details of the shipments have emerged in a memorandum prepared for the meeting of the House committee on oversight and government reform which is examining Iraqi reconstruction. Its chairman, Henry Waxman, a fierce critic of the war, said the way the cash had been handled was mind-boggling. "The numbers are so large that it doesn't seem possible that they're true. Who in their right mind would send 363 tonnes of cash into a war zone?"

The memorandum details the casual manner in which the US-led Coalition Provisional Authority disbursed the money, which came from Iraqi oil sales, surplus funds from the UN oil-for-food programme and seized Iraqi assets.

"One CPA official described an environment awash in $100 bills," the memorandum says. "One contractor received a $2m payment in a duffel bag stuffed with shrink-wrapped bundles of currency. Auditors discovered that the key to a vault was kept in an unsecured backpack.

"They also found that $774,300 in cash had been stolen from one division's vault. Cash payments were made from the back of a pickup truck, and cash was stored in unguarded sacks in Iraqi ministry offices. One official was given $6.75m in cash, and was ordered to spend it in one week before the interim Iraqi government took control of Iraqi funds."

The minutes from a May 2004 CPA meeting reveal "a single disbursement of $500m in security funding labelled merely 'TBD', meaning 'to be determined'."

The memorandum concludes: "Many of the funds appear to have been lost to corruption and waste ... thousands of 'ghost employees' were receiving pay cheques from Iraqi ministries under the CPA's control. Some of the funds could have enriched both criminals and insurgents fighting the United States."

According to Stuart Bowen, the special inspector general for Iraq reconstruction, the $8.8bn funds to Iraqi ministries were disbursed "without assurance the monies were properly used or accounted for". But, according to the memorandum, "he now believes that the lack of accountability and transparency extended to the entire $20bn expended by the CPA".

To oversee the expenditure the CPA was supposed to appoint an independent certified public accounting firm. "Instead the CPA hired an obscure consulting firm called North Star Consultants Inc. The firm was so small that it reportedly operates out of a private home in San Diego." Mr Bowen found that the company "did not perform a review of internal controls as required by the contract".

However, evidence before the committee suggests that senior American officials were unconcerned about the situation because the billions were not US taxpayers' money. Paul Bremer, the head of the CPA, reminded the committee that "the subject of today's hearing is the CPA's use and accounting for funds belonging to the Iraqi people held in the so-called Development Fund for Iraq. These are not appropriated American funds. They are Iraqi funds. I believe the CPA discharged its responsibilities to manage these Iraqi funds on behalf of the Iraqi people."

Bremer's financial adviser, retired Admiral David Oliver, is even more direct. The memorandum quotes an interview with the BBC World Service. Asked what had happened to the $8.8bn he replied: "I have no idea. I can't tell you whether or not the money went to the right things or didn't - nor do I actually think it's important."

Q: "But the fact is billions of dollars have disappeared without trace."

Oliver: "Of their money. Billions of dollars of their money, yeah I understand. I'm saying what difference does it make?"

Mr Bremer, whose disbanding of the Iraqi armed forces and de-Ba'athification programme have been blamed as contributing to the present chaos, told the committee: "I acknowledge that I made mistakes and that with the benefit of hindsight, I would have made some decisions differently. Our top priority was to get the economy moving again. The first step was to get money into the hands of the Iraqi people as quickly as possible."

Millions of civil service families had not received salaries or pensions for months and there was no effective banking system. "It was not a perfect solution," he said. "Delay might well have exacerbated the nascent insurgency and thereby increased the danger to Americans."
David Pallister
Thursday February 8, 2007
The Guardian

Also see the original Guardian report from March '06 - 'Iraq was awash in cash. We played football with bricks of $100 bills' and one of my earliest blog posts here at democrats.com - "Dem. Policy Cmte. Exposes "Wild West" Fraud in Iraq Reconstruction". Now let's see if any indictments flow...