Flow of Money (Trillions) – HUD Is a Sewer – Pentagon’s Massive Accounting Fraud – The Mothf*cker Awards
In the following discussion with Catherine Austin Fitts, the speculation is made that when these “disasters” strike like with the ongoing fires in California, it is at a time when mortgage insurance funds with the US government open up and money “flows out in very secret massive ways.” The US Treasury and government financial operations have “wide latitude” during disasters to release money. Catherine Fitts thinks that every time there is a disaster including like the fires in California, “mortgage frauds get written down.”
Catherine Fitts gives the example of when she noticed disturbing financial patterns. She noticed that when there were high mortgage frauds there were fires. The fires appeared to be a “moment in time when a lot of the mortgage fraud could be written down into the fund and surplus funds pulled out. As these funds are building up surplus, there is a fire and the mortgage frauds get written down then the surplus funds are gotten rid of.” Fitts noticed suspicious patterns between money flowing out and fires which just happens to be where mortgage frauds are going on.
The prediction in California is that the fed has $4 trillion which has a lot of the “funny stuff in it like mortgage fraud”, and the fed and New York banks are going to “write down some of this fraud as a result of the fire disaster in California. By writing down these mortgage frauds it essentially “cleans out their books.” The Federal Housing Administration (FHA) on September 28, 2018 said that it will “require reverse mortgage lenders to provide a second property appraisal on loans flagged by FHA as potentially having an inflated property valuation.”
The FHA’s property appraisal program was evaluated by the Department of Housing and Urban Development (HUD) “revealing higher-than-expected losses from the HECM (Home Equity Conversion Mortgage) program, pinpointing a negative net value to the tune of $14.5 billion.” Catherine Austin Fitts doesn’t accept this notion at all suggesting that HUD cannot be trusted and that the $14.5 billion is not believable. At this point few financial analysts believe anything coming out of HUD.
We are Living with Maximum Uncertainty – Catherine Austin Fitts
By Greg Hunter • November 25, 2018 • In Political Analysis • 159 Comments
Financial expert Catherine Austin Fitts has said for years that the economy was not going to crash, but be on a “slow burn.” How long can they make this heavily indebted game last? Fitts says, “Our problem as investors is we don’t know. If you look at all the information we need to make an intelligent assessment, we don’t have access to that information. I have said many times this is a military question. Who has the biggest weapons and who has the ability to deliver force and control? So, we are living with maximum uncertainty. . . . Clearly, we are headed into a new currency world that’s part of a new control system, but the answer is we don’t know when. My fear with many, many commentators is they are underestimating the power and endurance of the system. I am always getting yelled at because people think I am pro-empire. I am not saying I am pro-empire or I am for the things they are doing to keep it going.”
Fits adds that things are so uncertain that “the old system could go five years or five months.”
On introducing a new dollar, Fitts says, “Even if they do introduce a dollar backed by gold, it’s going to start off with a small market share. They are very unlikely to do a big bang thing. These guys are prototypers.”
There is no doubt wealthy people around the world are buying gold. Why? Fitts says, “The reality is . . . in the worst case scenario, gold is a store of value because it is respected globally as a currency or money without the backing of a sovereign government. What is the global currency that has backing without a sovereign government, and gold and silver are one of the few. I think it is one of the reasons I think wealthy people need to have a store of value for the worst case. It is central bank insurance. A core position in gold is not an investment, it is central bank insurance. . . . We continue to see people have a core position in precious metals for the worst case.”
What is the worst case scenario? Fitts says, “The worst case scenario is we are dealing with very serious geophysical risk. Throughout history, we have had things like Noah and the flood where civilization has almost gotten wiped out. . . . There have been radical changes in policy to coalesce huge amounts of money under central control and do secret projects. Why? What is that about? . . . . I don’t know how the governance system on planet earth works. I don’t know why the government is shifting massive amounts of money out of the U.S. government and out of the U.S. economy and taking it dark.”
Please go to USAWatchDog to read the entire article.
Source: The Solari Report
Catherine Austin Fitts – Government Taking Massive Amounts of Money Dark
Lockheed Martin was running HUD’s IT systems until Lockheed Martin sold their IT business to Leidos. Leidos is is an American defense, aviation, information technology, and biomedical research company headquartered in Reston, Virginia, that provides scientific, engineering, systems integration, and technical services.
“During the administration of President George Bush Sr., Catherine Austin Fitts was assistant Secretary at the Department of Housing and Urban Development (HUD). October 19, 2006, she was interviewed on Jefferson Public Radio in Ashland Oregon. She said ‘HUD is being run as a criminal enterprise….it can’t be run as a criminal enterprise unless intentionally run that way’. This was about eighteen months before the collapse of Fannie Mae and Freddie Mac, which were part of HUD’s oversight responsibilities.
The collapse of Fannie and Freddie resulted in $6.3 trillion dollars of toxic assets and liabilities being dumped on taxpayers. Ms. Fitts also said ‘there is no government, only large defense contractors and large banks who run a government mechanism’. She cited a Justice Department spokesman who said $500 billion to a trillion dollars from drug cartels, is laundered through the New York Stock Exchange every year.”
The Department of Housing and Urban Development (HUD) is being run by a corporation that does the IT systems work extensively for the United States Department of Defense, the United States Department of Homeland Security, and the United States Intelligence Community including the NSA? How much money has been siphoned off into the dark recesses of the “parallel system of finance” discussed by Catherine Austin Fitts and confirmed by Professor of Economics at Michigan State University Mark Skidmore.
Dr. Mark Skidmore – $21 Trillion “Missing” Money Huge Implications for Dollar
Source: Federal News Network
HUD’s lack of progress with major IT contract vexes industry, lawmakers alike
By Jason Miller • March 13, 2017
It’s been more than a year since the Department of Housing and Urban Development released the last, and what may be the most significant, contract for its IT modernization effort called the HUD Enterprise Architecture Transformation (HEAT).
The systems integration contract, which some estimate could be worth $40 million to $50 million — a major contract for a small agency like HUD — came out in February under the National Institute of Health’s CIO-SP3 governmentwide acquisition contract. Hewlett-Packard Services submitted a pre-award protest in September after initial discussions. HUD took corrective action and then the agency went radio silent. The program started almost 18 months ago when HUD issued the draft RFP in December 2015.
Under the solicitation, HUD is looking for services such as end-user support, disaster recovery integration and understanding how systems are integrated more broadly.
Vendors involved in the bidding for the contract have heard very little from the agency except for three requests for price extensions.
“The price extensions mean they keep expecting to award and then don’t award the contract,” said one vendor source, who requested anonymity in order to talk about an active procurement. “They have not communicated formally or informally about why the award is delayed. We’ve heard that they believe they have weak evaluation criteria and didn’t do a good job in setting up evaluation criteria so now they fear a protest after the award.”
The delays have attracted the attention of three lawmakers.
Sens. Bill Cassidy (R-La.) and Jeff Kennedy (R-La.) and Rep. Mike Johnson (R-La.) wrote a letter to HUD Secretary Ben Carson asking for him to help get the process going.
“This unnecessary delay results in significant opportunity cost and it stalls the advancement of HUD’s objectives through mission-enabling technologies that will provide greater security and more capability, in a more cost efficient manner,” the lawmakers wrote on March 8. “It is our understanding that HUD has exhausted all competitive avenues to extend the current contractors while the new HEAT procurement is adjudicated. Incumbents are in year 12 of a 10-year contract. Delay means HUD continues to use outdated systems and wastes valuable time, let alone taxpayer dollars. We urge the department to ensure the HEAT contract is awarded without delay.”
A HUD spokeswoman said the agency didn’t have a comment about the letter or status of the systems integration contract under HEAT.
The incumbent is Leidos, which bought Lockheed Martin’s IT services unit, and is bidding on the deal, as are HP Services and CSRA, according to sources.
HUD gave Leidos a two-year sole source extension in 2014 that is worth $148 million to continue to support the end-user technologies under the old infrastructure contract called HITS. Lockheed and HP Services initially won HITS in 2005 under a $800 million deal. So any delay benefits Leidos and likely causes HUD to spend more money than it needs to.
Please go to Federal News Network to read the entire article.
Source: This Can’t Be Happening
Exclusive: The Pentagon’s Massive Accounting Fraud Exposed
November 27, 2018 by Dave Lindorff
How US military spending keeps rising even as the Pentagon flunks its audits.
On November 15, Ernst & Young and other private firms that were hired to audit the Pentagon announced that they could not complete the job. Congress had ordered an independent audit of the Department of Defense, the government’s largest single cost center—the Pentagon receives two out of every three federal tax dollars collected—after the Pentagon failed for decades to audit itself. The firms concluded, however, that the DoD’s financial records were riddled with so many bookkeeping deficiencies, irregularities, and errors that a reliable audit was simply impossible.
Deputy secretary of Defense Patrick Shanahan tried to put the best face on things, telling reporters, “We failed the audit, but we never expected to pass it.” Shanahan suggested that the DoD should get credit for attempting an audit, saying, “It was an audit on a $2.7 trillion dollar organization, so the fact that we did the audit is substantial.” The truth, though, is that the DoD was dragged kicking and screaming to this audit by bipartisan frustration in Congress, and the result, had this been a major corporation, likely would have been a crashed stock.
As Republican Senator Charles Grassley of Iowa, a frequent critic of DoD’s financial practices, said on the Senate floor in September 2017, the Pentagon’s long-standing failure to conduct a proper audit reflects “twenty-six years of hard-core foot-dragging” on the part of the DoD, where “internal resistance to auditing the books runs deep.” In 1990, Congress passed the Chief Financial Officers Act, which required all departments and agencies of the federal government to develop auditable accounting systems and submit to annual audits. Since then, every department and agency has come into compliance—except the Pentagon.
Please go to This Can’t Be Happening to read the entire article.
On the Money Trail – The dangerous world of Catherine Austin Fitts
By Mari Kane • 5 September 2002
Enron. Arthur Anderson. WorldCom. Global Crossing. Some of the biggest players in corporate America, and what do they have in common? They are all perpetrators of reporting fuzzy numbers as revenue to pump their stock prices. But in the realm of creative accounting run amok, one institution stands apart as the mother of all financial fraud — the Department of Housing and Urban Development.
Although HUD’s mission involves “spurring economic growth in distressed neighborhoods,” the reality is that HUD is an agency run and managed by the departments of Treasury and Justice, Lockheed Martin, JPMorgan Chase, Dyncorp, Harvard, AMS, Arthur Anderson, and others that use the agency for their own for-profit interests.
All this according to Catherine Austin Fitts, the self-described “cleaning lady” whose job it was to clean up financial messes such as the savings and loan scandal at HUD. Few people know more than Fitts about how the money works in Washington — and now that Enronitis is spreading, Fitts has found a willing audience for her insight on how complicated financial schemes get cracked and implemented at the highest corporate and governmental level. The software she has developed, if implemented, is poised to revolutionize the way communities and individuals use their money.
When Fitts left the Wall Street firm of Dillon Read and joined HUD in 1989 as Assistant Secretary of Housing, what she found was an agency awash in conflicts of interest and fraud that was subservient to the big-money people in the financial community.
Moreover, she discovered that HUD had never tracked its financial results on a location-specific basis, so each field office had no idea how the money worked in its jurisdiction. By putting together a crude place-based cash-flow map, she found that HUD’s business had been substantially distorted by the way the data had been presented. Her numbers proved that S&L and HUD fraud were perpetrated by the same networks, in the same places, and involved the same use of federal credit.
“In Washington, everyone was talking about the S&L and HUD scandals as if they were separate, but it was clear that place-based financial data would have told us what had happened, who had profited, and how to prevent it from happening again,” Fitts recalls. “It also became apparent that our investments in communities conflicted with the other federal, state, and local investments in that place.”
Fitts was fired by the Bush administration in 1990 after only 18 months on the job. She was told the day after she left that the preparation of place-based financial accounting and statements had also been terminated.
Out of work, Fitts decided to dedicate herself to the concept of helping communities finance themselves. Fitts founded a new company, Hamilton Securities Group, which in 1993 won a contract with HUD to manage its $500 billion portfolio.
After her discouraging experience in the employment of HUD, the things that gave Fitts the most hope were digital technology and the advent of the Internet, which were both becoming more and more accessible to the public. Hamilton’s contract with HUD provided an invaluable opportunity to draw from what Fitts describes as “the richest database in the world on how the money works in neighborhoods.”
When HUD decided to auction off a portfolio of defaulted mortgage loans, Hamilton introduced a proprietary place-based bidding software and an online database of information so that the portfolio could be bid upon in an open, competitive auction. With it, little guys were able to compete with big, publicly traded players for the first time.
The problem, she found, was that the model was too effective. In 1995, Fitts’ team auctioned $950 million worth of multifamily mortgages in the Southeast. It was estimated that by selling them the old-fashioned way the sale would bring $350 million, but thanks to the innovations implemented at Hamilton’s recommendations, the loans sold for $710 million and, according to Fitts, “took the world’s breath away.”
Although the sale hurt some big players, it helped taxpayers save $2 billion in defaulted loan sales. That accomplishment raised eyebrows and sent a loud message to HUD that all this time they had been dealing with low bidders.
One of the reasons Hamilton was called in to help with the sale is because HUD needed to raise its loan recovery rates in order to issue more mortgage insurance without congressional appropriations. Hamilton came in with its optimization software, blew away the market with wildly successful loan sales, brought HUD’s recovery rates up from 35 percent to 70 percent and 90 percent, and HUD was able to generate $2.2 billion in new revenue and new credit.
Please go to radical.org to read the entire article.
7. Hud Is a Sewer
by Catherine Austin Fitts
C. Austin Fitts, Assistant Housing Secretary, conferring with assistants during a break in her testimony before a Senate subcommittee. She was seeking higher limits on Government-backed loans. From left, Russ Davis, Peter Monroe, and Steve Britt. (The New York Times / Andrea Mohin)
As Assistant Secretary for Housing-Federal Housing Commissioner, I was responsible for the operations of the Federal Housing Administration (FHA), which was the largest mortgage insurance fund in the world. FHA at that time had annual originations of $50-100 billion of mortgage insurance and an outstanding portfolio of $320 billion of mortgage insurance, mortgages and properties. Leading the FHA necessitated significant understanding of how homes are built, how mortgages finance thousands of communities throughout America and how investors finance the process by buying securities in pools of mortgages. My responsibilities included the production and management of assisted private housing; management of an organization of 7,000 employees in 80 offices nationwide; and development of network information systems and tools. In addition, I served as advisor to the Secretary of HUD on financial markets regulatory responsibilities, including the RTC Oversight Board, Federal Housing Finance Board and Home Loan Bank Board System, Fannie Mae and Freddie Mac.
When I told Nick Brady in 1989 that I was going to work at HUD, he said, “You can’t go to HUD — HUD is a sewer.” While my experience as Assistant Secretary cleaning up significant mortgage fraud that lost the government billions during the 1980s confirmed that HUD’s financial reputation was deserved, leading the FHA provided invaluable insight into how government management of the economy one neighborhood at a time really harms communities. Hence, access to the “real deal” on real estate and the mortgage markets was an opportunity. If you want to see the real economy in a place, you absolutely want an accurate map of the financial flows in that system — starting with the land and real estate. My favorite description of HUD was to come many years later from staff to the Chairman of the Senate HUD appropriation subcommittee — Senator Kit Bond. When asked what was going on at HUD, the Congressional staffer said, “HUD is being run as a criminal enterprise.”
Catherine Austin Fitts being sworn in as Assistant Secretary of Housing in April 1989 by Jack Kemp, the Secretary of HUD. Catherine’s childhood friend, Georgie LaRue, is holding the Bible. (Photo courtesy Catherine Austin Fitts)
Shortly after arriving at HUD in April 1989, I began to learn about the FHA Coinsurance program. Since 1984, HUD/FHA had allowed private mortgage bankers to issue federal credit to guarantee multi-family apartment projects. After issuing $9 billion in mortgage guarantees, HUD/FHA was to lose something approaching 50% of the value of the portfolio — a level of losses hard to explain with mortal logic. When my staff approached me with a proposal to bail out a mortgage company so they could continue to lose money for us, I asked why we should spend money to lose more money in a way that would harm communities. After a long silence during which 30 staff members intently studied their feet, one brave soul explained to me that the mortgage bank was owned and run by a major Republican donor. Shocked, I said. “I am a major Republican donor,” and pointing to my presidential cufflinks that were adorning my French cuffs, “I got a pair of cuff links. You get cuff links. You don’t get $400 million of federal credit to throw down the drain.” My staff looked at me like I was so naive and clueless that there was no point in trying to communicate with me — better to let me learn the hard way.
Within minutes, a screaming Jack Kemp, furious that I had not provided illegal subsidy to keep the mortgage banking company going (despite his orders to stop anything corrupt or illegal), called me on the carpet. The problems were compounded by the opinion of HUD General Counsel Frank Keating, who had joined from DOJ, that we did not have to honor our contracts. Rather we could abrogate contracts and ignore the law. If those who had been harmed sued us, Frank said, by the time they won “we will be gone.” Frank was to help write and pass new laws and administrative policies to use HUD as a source of War on Drugs activities and enforcement revenues. After many dirty tricks and much ranting and raving, HUD was to turn the defaulted coinsurance portfolio over to a private contractor named Ervin & Associates, a newly created company founded by John Ervin, a former employee of Harvard’s HUD property management company, NHP.
George H.W. Bush and Catherine Austin Fitts, raising money for the Bush campaign in 1988 — Catherine got a pair of Presidential cuff links. (Photo courtesy Catherine Austin Fitts)
In the process of cleaning up the coinsurance portfolio, I got a chance to learn more about some of the tax-exempt housing bond deals that involved FHA mortgage insurance. Examples of these deals were those done through one of the Connecticut state housing authorities by a Dillon Read banker, Jewelle Bickford, during the 1980s. Bickford had a lot of support from two of the largest future Dillon Read investors in Cornell Corrections — Ken Schmidt and Birkelund — which was hard for me to fathom. Bickford was one for shortcuts and what sounded to me like more than little white lies. Schmidt shared an intelligence background with Birkelund. He served with Air Force Intelligence early in his career as Birkelund had served in the Office of Naval Intelligence (ONI). When I later realized the role of the intelligence agencies in the HUD portfolio their comfort with HUD deals in Connecticut with high default rates seemed somehow more logical.
After Bickford’s housing bonds were embroiled in the coinsurance crash and burn, Jewelle somehow managed to get promoted up — landing at Birkelund’s old firm, Rothschild Inc. Which always made me wonder exactly whose bank accounts ended up with the $4 billion emptied out of the FHA mutual funds at HUD as a result of coinsurance, not to mention the billions more lost in the single family FHA programs. Over $2 billion was lost by FHA/HUD in the Texas region in fiscal 1989 alone. The Texas region had included Arkansas, where the state agency, ADFA was so bad they had been disqualified at one point according to the HUD Fort Worth regional leadership. It was this state agency which was alleged to have laundered the local profit share of the arms and drug trafficking channeled through Mena, Arkansas.
For comparisons sake, $4 billion is about the amount of money that would buy you a controlling lead position in taking over one of the world’s premiere money laundering networks. When KKR raised the war chest in 1987 that gave them the wherewithal to bid and win RJR Nabisco, it amounted to $5.6 billion.
Money is like the Pillsbury Doughboy. When you squeeze down on one part, it pops up someplace else.
Wall Street Lessons: Dillon Read’s James Forrestal
James Forrestal, President of Dillon Read & Secretary of Navy and Secretary of War (Photo courtesy Wikipedia)
James Forrestal’s oil portrait always hung prominently in one of the private Dillon Read dining rooms for the eleven years that I worked at the firm. Forrestal, a highly regarded Dillon partner and President of the firm, had gone to Washington, D.C. in 1940 to lead the Navy during WWII and then played a critical role in creating the National Security Act of 1947. He then became Secretary of War (later termed Secretary of Defense) in September 1947 and served until March 28, 1949. Given the central banking-warfare investment model that rules our planet, it was appropriate that Dillon partners at various times lead both the Treasury Department and the Defense Department.
Shortly after resigning from government, Forrestal died falling out of a window of the Bethesda Naval Hospital outside of Washington, D.C. on May 22, 1949. There is some controversy around the official explanation of his death — ruled a suicide. Some insist he had a nervous breakdown. Some say that he was opposed to the creation of the state of Israel. Others say that he argued for transparency and accountability in government, and against the provisions instituted at this time to create a secret “black budget.” He lost and was pretty upset about it — and the loss was a violent one. Since the professional killers who operate inside the Washington beltway have numerous techniques to get perfectly sane people to kill themselves, I am not sure it makes a big difference.
Please go to dunwalke.com to read the entire essay.
Financial fraud in the mortgage market (Part 1)
Financial fraud in the mortgage market (Part 2)
A concerning development with HUD is the connection to “megacities” and how these cities are going to be developed. Naved Jafry who called for “radical privatization to fix America’s cities”, stepped down following allegations of fraud and having a false biography about his past experience. Jafry was contracted to work for President Trump’s Department of Housing and Urban Development (HUD). Jafry is advocating for “microcities”, the idea where “managers privately set their own laws and taxes away from central government.” Catherine Austin Fitts describes how there is a major push now to get people out of ownership into rentals to develop income. These “megacities” would produce rental yield in a world where investment yields are going down.
City-State Conversion Planning
What else do you think Lockheed Martin already has flying around up there and where does the money come from to pay for all this? X technology?
Quiet Supersonic X-Plane
Good anecdotal work being done by others on these predatory corporations some of which are mentioned in the published material above.
Celebrating the companies that fuck Mother Earth the hardest…
December 4, 2018 • The Miracle
Accepting awards on behalf of these categories on December 4, 2018:
• Air – For making the atmosphere more visible.
• Water – For taking the biggest piss in the global pool.
• Spirit – For efforts to break the human spirit.
• Reality – For the best mindfuck.
There are already plenty of awards that celebrate efforts to protect the natural environment. But Mother Earth is losing, and it’s time the winners got their due. The Motherfucker Awards celebrate the companies that fucked Mother Earth the hardest in 2018. Categories include Land, Water, Air, Fire, Spirit, and Reality.
At a gala on December 4 at The Miracle Theater in Inglewood, comedians represent companies responsible for the most impressive damage in 2018. Journalists and activists prompt the comedians with basic facts about their companies’ “achievements,” and the comedians create their own acceptance speeches.