While Secretary of State Hillary Clinton was praising the role that the internet played in toppling oppressive regimes (ironically enough, close U.S. allies), the Justice Department was in court in Alexandria, Virginia seeking to invade the privacy and political rights of WikiLeaks supporters even as it shields well-connected "War on Terror" fraudsters.
Scarcely batting an eyelash, Madame Clinton told her audience at George Washington University that "the goal is not to tell people how to use the internet any more than we ought to tell people how to use any public square, whether it's Tahrir Square or Times Square."
Rich with rhetorical flourishes that should have evoked gales of laughter but didn't (this is America, after all), Clinton averred that "together, the freedoms of expression, assembly, and association online comprise what I've called the freedom to connect. The United States supports this freedom for people everywhere, and we have called on other nations to do the same."
Really?
Has the honorable Secretary attended a demonstration of late, or found herself on the receiving end of a police baton, a rubber bullet, a jolt from a taser or ear-piercing blast from a "nonlethal" sonic weapon?
Or perhaps Madame Clinton has been served with a National Security Letter that arrives with its own built-in, permanent gag order, had her organization infiltrated by provocateurs, been the focus of "spear phishing" attacks by a secret state agency, say the FBI or one of their private contractors, who've implanted surveillance software on her laptop or smart phone, or summoned by subpoena to appear before a Star Chamber-like grand jury?
I didn't think so.
The Secretary's hypocrisy and mendacity would be amusing if the American people hadn't already lived through a decade where the cheapening of constitutional rights, particularly First and Fourth Amendment guarantees, hadn't been eroded to the point of savage annihilation by all branches of government and by both capitalist parties.
After all, in the filthy Washington trough where money rules, "liberal" Democrats and "conservative" Republicans alike are joined at the hip and outdo one another in paying obeisance to the National Security State.
Indeed, just a hop, skip and a jump across the icy Potomac, an Alexandria courthouse witnessed the "change" regime's Justice Department move to seize the contents of private Twitter accounts, including those of left-wing Icelandic parliamentarian Birgitta Jonsdottir, and other WikiLeaks supporters.
While Mrs. Clinton hypocritically praised the role of social networking sites in helping to bring down torture-friendly, corrupt regimes in Egypt and Tunisia (close U.S. allies in the multibillion dollar kabuki dance known as the "War on Terror"), a grand jury was investigating whether there are grounds for filing criminal charges against WikiLeaks, its founder Julian Assange, and the heroic Bradley Manning, the incarcerated Army private suspected of leaking compromising files to the organization.
Outraged by revelations of American war crimes in Afghanistan and Iraq, the Apache helicopter gunship murder of a dozen people, including two Reuters journalists, as well as the release of thousands of diplomatic cables, the secret state is bringing the full weight of its formidable machinery down upon anyone, anywhere who have the temerity to challenge the lies of our militarist masters.
Denouncing the Obama regime's latest assault, the American Civil Liberties Union (ACLU) and the Electronic Frontier Foundation (EFF) argued that forcing Twitter to turn over users' data to the government would hand the state a veritable road map of people connected to WikiLeaks, including journalists who may have communicated with the group, and would seriously chill free speech.
EFF Legal Director Cindy Cohn pointed out that "Twitter is a publication and communication service, so the information sought by the government relates to what these individuals said and where they were when they said it. This raises serious First and Fourth Amendment concerns. It is especially troubling since the request seeks information about all statements made by these people, regardless of whether their speech relates to WikiLeaks."
Public knowledge of U.S. Attorney General Eric Holder's criminal probe recently surfaced when U.S. Magistrate Theresa Carroll Buchanan, granted a motion by three Twitter clients that partially unsealed some government filings in the case.
Plaintiffs' attorneys argued that Buchanan should overturn her earlier ruling ordering Twitter "to disclose its clients' data, as well as unseal documents in the case, including requests from prosecutors to get information from other technology companies," the The Washington Post reported.
When news of the federal government's fishing expedition first broke in January, The New York Times reported that what made the case unusual weren't de rigueur secret state subpoenas, but the fact that Twitter challenged the Justice Department's gag order "and won the right to inform the people whose records the government was seeking."
The Times noted that "WikiLeaks says it suspects that other large sites like Google and Facebook have received similar requests and simply went along with the government."
Such demands, and long-suspected capitulation by internet behemoths Google and Facebook, are at the heart of current debates over data retention.
As security analyst and surveillance critic Christopher Soghoian pointed out last month, "The hypocrisy of the government's push for such data retention is clear when compared to the extreme efforts that government agencies go to in order to shield their own communications, documents and other records from the American people."
Particularly when lawbreaking by favored contractors are cloaked by bogus claims of "national security."
Shielding a "War on Terror" Fraudster
One sordid example among hundreds of similar cases which have come to light was recently uncovered The New York Times.
Investigative journalists Eric Lichtblau and James Risen disclosed that for "eight years, government officials turned to Dennis Montgomery, a California computer programmer, for eye-popping technology that he said could catch terrorists."
Montgomery's "eye-popping technology" was a fraud, a multimillion grift that bamboozled the Pentagon's Special Operations Command and other secret state agencies and almost resulted in the 2003 shoot-down of passenger planes heading towards the U.S.
Hardly the "smartest guy in the room," Montgomery is awaiting trial in Nevada on charges "of trying to pass $1.8 million in bad checks at casinos." However, "he has not been charged with wrongdoing in the federal contracts, nor has the government tried to get back any of the money it paid."
In the last few months Obama's Justice Department, Lichtblau and Risen inform us, have "gotten protective orders from two federal judges keeping details of the technology out of court," and "says it is guarding state secrets that would threaten national security if disclosed."
According to the Times, the software suite Montgomery sold the Pentagon was chock-a-block with snake-oil claims that it "could find terrorist plots hidden in broadcasts of the Arab network Al Jazeera; identify terrorists from Predator drone videos; and detect noise from hostile submarines."
These claims "prompted an international false alarm that led President George W. Bush to order airliners to turn around over the Atlantic Ocean in 2003."
In a famous incident of Bush administration fear mongering that coincided with the Christmas holidays for maximum effect, and hyped of course by the media as the latest in a series of "grave threats" to the heimat, Montgomery reported the alarming news to his CIA contacts.
But as Global Research analyst Michel Chossudovsky pointed out at the time, the Bush administration had "chosen the Christmas holiday to wage a campaign of fear and intimidation. Its ultimate objective consists in manipulating Americans into accepting a de facto military government, as a means to 'protect their civil liberties'."
Chossudovsky averred, and facts that came to light years later proved beyond all reasonable doubt that "the terrorist alert was fabricated by the CIA." A cynical deceit facilitated by "War on Terror" fraudster Montgomery.
According to the Times, Montgomery had claimed that "hidden in the crawl bars broadcast by Al Jazeera, someone had planted information about specific American-bound flights from Britain, France and Mexico that were hijacking targets."
CIA officials then "rushed the information to Mr. Bush, who ordered those flights to be turned around or grounded before they could enter American airspace."
"Senior administration officials," the Times revealed, "even talked about shooting down planes identified as targets because they feared that supposed hijackers would use the planes to attack the United States, according to a former senior intelligence official who was at a meeting where the idea was discussed."
While the anonymous official later called the idea "crazy," nevertheless snake-oil salesman Montgomery had convinced intelligence officials that the fabricated threat was "real and credible."
Despite the fact the United States was a hair's breath from blasting commercial airliners from the skies and killing hundreds of innocent people, the CIA "never did an assessment to determine how a ruse had turned into a full-blown international incident, officials said, nor was anyone held accountable."
"In fact," the Times reports, "agency officials who oversaw the technology directorate--including Donald Kerr, who helped persuade George J. Tenet, then the director of central intelligence, that the software was credible--were promoted, former officials said."
""Nobody was blamed," a former CIA official told the Times. "They acted like it never happened."
Kerr, a long-time fixture in the national security establishment, was formerly an executive vice president with the Science Applications International Corporation (SAIC). After serving as the CIA's Deputy Director for Science of Technology, he was rewarded for his role in the "planes incident" fiasco with an appointment by Bush as the Director of the National Reconnaissance Office (NRO), the top secret Pentagon satrapy that flies America's fleet of intelligence satellites. And since being well-connected means never having to say your sorry, Kerr is currently the Deputy Director of U.S. National Intelligence where he continues to labor mightily to "keep us safe."
Despite serious misgivings about Montgomery's firm, eTreppid Technologies, the secret state was eager to buy his company's dodgy software. Why? As it turns out, Montgomery was, as they say, juiced.
Along with partner Warren Trepp, described as a former "top trader for the junk-bond king [and convicted fraudster] Michael Milken," Montgomery's company "with the help of Representative Jim Gibbons, a Republican who would become Nevada's governor and was a longtime friend of Mr. Trepp's, the company won the attention of intelligence officials in Washington."
Some of Montgomery's "friends" also included "Edra Blixseth, a onetime billionaire who with her former husband had run the Yellowstone Club in Montana."
Back in October, the Associated Press reported that the FBI had opened a criminal probe and was investigating the former co-owner of the swank Yellowstone Club, whose members include Bill Gates and former Vice President Dan Quayle, over charges that she bilked creditors at the time of her messy divorce.
A well-connected Republican insider, according to AP, investigators are probing "a massive real estate scheme fueled by greed, fraud and hundreds of millions of dollars in ill-advised loans."
"The current federal inquiry into Edra Blixseth," AP informed us, "involves a series of multimillion dollar loans she took out or guaranteed around the time of her divorce, according to an attorney familiar with the matter."
"Court records show," according to AP, that "she claimed to be worth $782 million at the time of another loan, for $950,000. Within months, she filed for personal bankruptcy owing creditors at least $157 million."
Like her pal Montgomery, Blixseth claims she did "nothing wrong." What's that old saw about birds of a feather?
"Hoping to win more government money," the Times reported, "Ms. Blixseth turned to some influential friends, like Jack Kemp, the former New York congressman and Republican vice-presidential nominee, and Conrad Burns, then a Republican senator from Montana. They became minority stakeholders in the venture, called Blxware."
Burns told the Times he was "impressed" by a video presentation Montgomery gave to an unnamed "cable company." The former senator told Lichtblau and Risen that the security grifter "talked a hell of a game."
For his part, Kemp leveraged his connections with war criminal and then-Vice President Dick Cheney, "to set up a meeting in 2006 at which Mr. Kemp, Mr. Montgomery and Ms. Blixseth met with a top Cheney adviser, Samantha Ravich, to talk about expanding the government's use of the Blxware software."
When Ravich didn't jump fast enough and hand over more taxpayer boodle, Montgomery's former attorney Michael Flynn "sent an angry letter to Mr. Cheney in May 2007" and "accused the White House of abandoning a tool shown to 'save lives'," the Times reported.
But Montgomery and Blixseth still had a card to play and had some powerful friends in the Air Force who helped play them.
Lichtblau and Risen disclosed that "an Air Force contracting officer, Joseph Liberatore," who described himself as a "believer," despite skepticism from other secret state agencies including the CIA, was concerned by "problems with the no-bid contract."
According to an email obtained by the Times, Liberatore wrote that if other agencies examined the deal "we are all toast."
"In 2009," Lichtblau and Risen inform us, "the Air Force approved a $3 million deal for his technology, even though a contracting officer acknowledged that other agencies were skeptical about the software."
As Montgomery's firm crashed and burned, the Bush and now, the Obama administration, sought to cover their ass-ets and "declared that some classified details about the use of Mr. Montgomery's software were a 'state secret' that could cause grave harm if disclosed in court."
"The secrecy was so great that at a deposition Mr. Montgomery gave in November," Lichtblau and Risen report, that "two government officials showed up to monitor the questioning but refused to give their full names or the agencies they worked for."
Bottom line: while the U.S. government affirms that the private communications of American citizens are fair game to be trolled by secret state snoops, fraud and serious crimes carried out under the dark banner of an endless "War on Terror" are treated, like evidence of torture and other crimes against humanity, as if they "never happened."
Criminalizing Whistleblowing
The National Security State's assault on our right to privacy comes hard on the heels on moves in Congress, spearheaded by troglodytic Republicans (with "liberal" Democrats running a close second) to criminalize whistleblowing altogether.
Last week, the Muslim-hating Rep. Peter King (R-NY) introduced the SHIELD Act in the House, a pernicious piece of legislative flotsam that would amend the Espionage Act and make publishing classified information, and investigative journalism, a criminal offense.
Also last week, legislation was introduced in the Senate that "would broadly criminalize leaks of classified information," Secrecy News reported.
Sponsored by Senator Benjamin Cardin (D-MD), the bill (S. 355) "would make it a felony for a government employee or contractor who has authorized access to classified information to disclose such information to an unauthorized person in violation of his or her nondisclosure agreement," Secrecy News disclosed.
In an Orwellian twist, Cardin, who received some $385,000 in campaign swag from free speech advocates such as Constellation Energy, Goldman Sachs and Patton Boggs (Mubarak's chief lobbyist in Washington) according to OpenSecrets.org, said that the bill would "promote Federal whistleblower protection statutes and regulations"!
As Secrecy News points out, the bill "does not provide for a 'public interest' defense, i.e. an argument that any damage to national security was outweighed by a benefit to the nation." In other words, you don't need to know about government high crimes and misdemeanors. Why? Because we say so.
In November, shortly after WikiLeaks began publishing Cablegate files, King fired off a letter to Secretary of State Hillary Clinton and Attorney General Eric Holder demanding that WikiLeaks be declared a "foreign terrorist organization" and the group's founder declared a "terrorist ringleader."
We know the fate reserved for "terrorists," don't we?
As the United States sinks ever-deeper into a lawless abyss where the corporate state is lowering the boom on democracy altogether, is the day far off when Madam Clinton's avowal that we ought not "tell people how to use any public square, whether it's Tahrir Square or Times Square," come back with a vengeance to haunt America's venal ruling class?
Monday, February 21, 2011
Sunday, February 6, 2011
American Police State: FBI Abuses Reveals Contempt for Political Rights, Civil Liberties
As mass revolt spreads across Egypt and the Middle East and citizens there demand jobs, civil liberties and an end to police state abuses from repressive, U.S.-backed torture regimes, the Obama administration and their congressional allies aim to expand one right here at home.
Last week, the Electronic Frontier Foundation (EFF) released an explosive new report documenting the lawless, constitutional-free zone under construction in America for nearly a decade.
That report, "Patterns of Misconduct: FBI Intelligence Violations from 2001-2008," reveals that the domestic political intelligence apparat spearheaded by the Federal Bureau of Investigation, continues to systematically violate the rights of American citizens and legal residents.
A rather ironic state of affairs considering the free passes handed out by U.S. securocrats to actual terrorists who killed thousands of Americans on 9/11, as both WikiLeaks and FBI whistleblower Sibel Edmonds disclosed last week.
Although illegal practices and violations were reported by the FBI to the Intelligence Oversight Board (IOB) after an unexplained two-and-a-half-year delay, a further violation of lawful guidelines, lawbreaking continued unabated; in fact, it accelerated as the Bureau was given a green light to do so by successive U.S. administrations.
The IOB is a largely toothless body created in 1976 by the Ford administration in the wake of disclosures of widespread spying and infiltration of political groups by America's secret state agencies during the sixties and seventies.
Reeling from revelations uncovered by Congress, investigative journalists and citizen activists in the wake of the Watergate scandal, Ford's caretaker government was forced to call a halt to the more egregious practices employed by the FBI to keep the lid on and crafted guidelines governing intelligence and surveillance operations.
In fact, the Attorney General's Guidelines regulating both FBI National Security Investigations and Foreign Intelligence Collection (NSIG) stipulate that "all government intelligence operations occur with sufficient oversight and within the bounds of the Constitution and other federal laws."
While it can rightly be argued these protocols were largely ineffective, and had been breeched more often than not by the 1980s under President Reagan, as revealed during the Iran-Contra scandal, and that antiwar, environmental and solidarity groups continue to be spied upon and destabilized by agents provocateurs and right-wing corporate scum, they were thrown overboard entirely by the Bush regime in the aftermath of the 9/11 attacks.
Today the "looking forward, not backward" Obama administration has whole-heartedly embraced Bushist lawlessness while charting an even more sinister course of their own, now asserting they have the authority to assassinate American citizens the Executive Branch designate as "terrorists" anywhere on earth without benefit of due process or court review.
According to EFF, more than 2,500 documents obtained under the Freedom of Information Act revealed that:
But FBI lawbreaking didn't stop there. Citing internal documents, EFF revealed that the Bureau also "engaged in a number of flagrant legal violations" that included, "submitting false or inaccurate declarations to courts," "using improper evidence to obtain federal grand jury subpoenas" and "accessing password protected documents without a warrant."
In other words, in order to illegally spy on Americans and haul political dissidents before Star Chamber-style grand juries, the FBI routinely committed perjury and did so with absolute impunity.
Reviewing the more than 2,500 documents EFF analysts averred that they had "uncovered alarming trends in the Bureau's intelligence investigation practices" and that the "documents suggest the FBI's intelligence investigations have compromised the civil liberties of American citizens far more frequently, and to a greater extent, than was previously assumed."
According to EFF, the "documents show that the FBI most frequently committed three types of intelligence violations--violations of internal oversight guidelines for conducting investigations; violations stemming from the abuse of National Security Letters; and violations of the Fourth Amendment, Foreign Intelligence Surveillance Act (FISA), and other laws governing intelligence investigations."
"Based on statements made by government officials and the proportion of violations occurring in the released reports," EFF estimates that "the FBI may have committed as many as 40,000 intelligence investigation violations over the past ten years."
The civil liberties' watchdogs revealed that the type of violation occurring most frequently involved the Bureau's abuse of National Security Letters (NSLs), onerous lettres de cachet, secretive administrative subpoenas with built-in gag orders used by the FBI to seize records from third-parties without any judicial review whatsoever.
Although National Security Letters have been employed by investigators since the 1970s, after 9/11 Congress passed the repressive USA PATRIOT Act which "greatly expanded the intelligence community's authority to issue NSLs."
"During the course of a terrorism or counterintelligence investigation," EFF writes, "NSLs can be used to obtain just three types of records: (1) subscriber and 'toll billing information' from telephone companies and 'electronic communications services;' (2) financial records from banks and other financial institutions; and (3) consumer identifying information and the identity of financial institutions from credit bureaus."
Abuses have been well-documented by the Justice Department's own Office of the Inspector General. In their 2008 report, the OIG disclosed that the FBI issued some 200,000 requests and that almost 60% were for investigations of U.S. citizens and legal residents.
Given the symbiosis amongst American secret state agencies and grifting corporations, EFF discovered that "the frequency with which companies [received] NSLs--phone companies, internet providers, banks, or credit bureaus--contributed to the FBI’s NSL abuse."
"In over half of all NSL violations reviewed by EFF, the private entity receiving the NSL either provided more information than requested or turned over information without receiving a valid legal justification from the FBI."
In fact, "companies were all too willing to comply with the FBI's requests, and--in many cases--the Bureau readily incorporated the over-produced information into its investigatory databases."
This too is hardly surprising, given the enormous profits generated by the surveillance state for their corporate beneficiaries. As The Washington Post revealed in their investigative series, Top Secret America, more than 800,000 corporate employees have been issued top secret and above security clearances. Beholden to their employers and not the public who foots the bill and is the victim of their excesses, accountability is a fiction and oversight a contemptible fraud.
In a follow-up piece, Monitoring America, investigative journalists Dana Priest and William M. Arkin revealed that the FBI "is building a database with the names and certain personal information, such as employment history, of thousands of U.S. citizens and residents whom a local police officer or a fellow citizen believed to be acting suspiciously."
In other words, in order to "keep us safe" unaccountable securocrats are constructing a Stasi-like political intelligence system that has overthrown the traditional legal concept of probable cause in favor of a regime rooted in fear and suspicion; one where innocent activities such as taking a photograph or attending an antiwar rally now serves as a pretext for opening a national security investigation.
According to Priest and Arkin, the Bureau database "is accessible to an increasing number of local law enforcement and military criminal investigators, increasing concerns that it could somehow end up in the public domain," and used by employers to terminate political dissidents or other "undesirable" citizens merely on the basis of allegations emanating from who knows where.
As Antifascist Calling reported in October, "predictive behavior" security firms, generously funded by the CIA's venture capitalist arm, In-Q-Tel, have increasingly turned to monitoring social media sites such as Blogger, Facebook, Flickr, Twitter and YouTube and are exploiting powerful computer algorithms for their clients--your boss--thereby transforming private communications into "actionable intelligence" that just might get you fired.
In one case, EFF discovered that the FBI "requested email header information for two email addresses used by a U.S. person." In response, researchers averred "the email service provider returned two CDs containing the full content of all emails in the accounts. The FBI eventually (and properly) sequestered the CDs, notified the email provider of the overproduction, and re-issued an NSL for the originally requested header information; but, in response to the second NSL, the email provider again provided the FBI with the full content of all emails in the accounts."
To make matters worse, "third-parties not only willingly cooperated with FBI NSLs when the legal justification was unclear, however: they responded to NSLs without any legal justification at all."
In conclusion, EFF wrote that "while the reports documenting the FBI's abuse of the Constitution, FISA, and other intelligence laws are troubling, EFF's analysis is necessarily incomplete: it is impossible to know the severity of the FBI's legal violations until the Bureau stops concealing its most serious violations behind a wall of arbitrary secrecy."
This sordid state of affairs is likely to continue given Congress's utter lack of interest in protecting Americans' constitutionally-protected right to privacy, free speech and assembly.
With new moves afoot in Congress to pass a data retention law that requires internet service providers to retain records of users' online activity or, as in the repressive Egyptian U.S. client state, handing the Executive Branch a "kill-switch" that would disconnect the American people from the internet in the event of a "national emergency," the U.S. oligarchy is planning for the future.
As the World Socialist Web Site points out, "The US government is well aware that the Internet provides a forum for rapid communication and organization, as demonstrated by the events in Egypt this week. In an attempt to block communication within Egypt and with the external world, US-backed dictator Hosni Mubarak cut off the country's access to the Internet altogether."
"Similarly," left-wing journalist Patrick Zimmerman writes, "the fundamental goal of the US government in its attempts to gain control of the Internet and monitor user activity has nothing to do with the 'war on terror' or prosecuting criminals. Under conditions of growing social inequality, government austerity, and expanding war abroad, the government anticipates the growth of social opposition in the United States."
The Bush regime's "preemptive war" doctrine has been fully incorporated into the Obama administration's "homeland security" paradigm. The formidable police state apparatus that accompanies America's imperial adventures abroad are now deployed at home where they have devastating effects on an already dysfunctional democracy sliding ever-closer towards an authoritarian abyss.
Last week, the Electronic Frontier Foundation (EFF) released an explosive new report documenting the lawless, constitutional-free zone under construction in America for nearly a decade.
That report, "Patterns of Misconduct: FBI Intelligence Violations from 2001-2008," reveals that the domestic political intelligence apparat spearheaded by the Federal Bureau of Investigation, continues to systematically violate the rights of American citizens and legal residents.
A rather ironic state of affairs considering the free passes handed out by U.S. securocrats to actual terrorists who killed thousands of Americans on 9/11, as both WikiLeaks and FBI whistleblower Sibel Edmonds disclosed last week.
Although illegal practices and violations were reported by the FBI to the Intelligence Oversight Board (IOB) after an unexplained two-and-a-half-year delay, a further violation of lawful guidelines, lawbreaking continued unabated; in fact, it accelerated as the Bureau was given a green light to do so by successive U.S. administrations.
The IOB is a largely toothless body created in 1976 by the Ford administration in the wake of disclosures of widespread spying and infiltration of political groups by America's secret state agencies during the sixties and seventies.
Reeling from revelations uncovered by Congress, investigative journalists and citizen activists in the wake of the Watergate scandal, Ford's caretaker government was forced to call a halt to the more egregious practices employed by the FBI to keep the lid on and crafted guidelines governing intelligence and surveillance operations.
In fact, the Attorney General's Guidelines regulating both FBI National Security Investigations and Foreign Intelligence Collection (NSIG) stipulate that "all government intelligence operations occur with sufficient oversight and within the bounds of the Constitution and other federal laws."
While it can rightly be argued these protocols were largely ineffective, and had been breeched more often than not by the 1980s under President Reagan, as revealed during the Iran-Contra scandal, and that antiwar, environmental and solidarity groups continue to be spied upon and destabilized by agents provocateurs and right-wing corporate scum, they were thrown overboard entirely by the Bush regime in the aftermath of the 9/11 attacks.
Today the "looking forward, not backward" Obama administration has whole-heartedly embraced Bushist lawlessness while charting an even more sinister course of their own, now asserting they have the authority to assassinate American citizens the Executive Branch designate as "terrorists" anywhere on earth without benefit of due process or court review.
According to EFF, more than 2,500 documents obtained under the Freedom of Information Act revealed that:
* From 2001 to 2008, the FBI reported to the IOB approximately 800 violations of laws, Executive Orders, or other regulations governing intelligence investigations, although this number likely significantly under-represents the number of violations that actually occurred.
* From 2001 to 2008, the FBI investigated, at minimum, 7000 potential violations of laws, Executive Orders, or other regulations governing intelligence investigations.
* Based on the proportion of violations reported to the IOB and the FBI's own statements regarding the number of NSL [National Security Letter] violations that occurred, the actual number of violations that may have occurred from 2001 to 2008 could approach 40,000 possible violations of law, Executive Order, or other regulations governing intelligence investigations. (Electronic Frontier Foundation, Patterns of Misconduct: FBI Intelligence Violations from 2001-2008, January 30, 2011)
But FBI lawbreaking didn't stop there. Citing internal documents, EFF revealed that the Bureau also "engaged in a number of flagrant legal violations" that included, "submitting false or inaccurate declarations to courts," "using improper evidence to obtain federal grand jury subpoenas" and "accessing password protected documents without a warrant."
In other words, in order to illegally spy on Americans and haul political dissidents before Star Chamber-style grand juries, the FBI routinely committed perjury and did so with absolute impunity.
Reviewing the more than 2,500 documents EFF analysts averred that they had "uncovered alarming trends in the Bureau's intelligence investigation practices" and that the "documents suggest the FBI's intelligence investigations have compromised the civil liberties of American citizens far more frequently, and to a greater extent, than was previously assumed."
According to EFF, the "documents show that the FBI most frequently committed three types of intelligence violations--violations of internal oversight guidelines for conducting investigations; violations stemming from the abuse of National Security Letters; and violations of the Fourth Amendment, Foreign Intelligence Surveillance Act (FISA), and other laws governing intelligence investigations."
"Based on statements made by government officials and the proportion of violations occurring in the released reports," EFF estimates that "the FBI may have committed as many as 40,000 intelligence investigation violations over the past ten years."
The civil liberties' watchdogs revealed that the type of violation occurring most frequently involved the Bureau's abuse of National Security Letters (NSLs), onerous lettres de cachet, secretive administrative subpoenas with built-in gag orders used by the FBI to seize records from third-parties without any judicial review whatsoever.
Although National Security Letters have been employed by investigators since the 1970s, after 9/11 Congress passed the repressive USA PATRIOT Act which "greatly expanded the intelligence community's authority to issue NSLs."
"During the course of a terrorism or counterintelligence investigation," EFF writes, "NSLs can be used to obtain just three types of records: (1) subscriber and 'toll billing information' from telephone companies and 'electronic communications services;' (2) financial records from banks and other financial institutions; and (3) consumer identifying information and the identity of financial institutions from credit bureaus."
Abuses have been well-documented by the Justice Department's own Office of the Inspector General. In their 2008 report, the OIG disclosed that the FBI issued some 200,000 requests and that almost 60% were for investigations of U.S. citizens and legal residents.
Given the symbiosis amongst American secret state agencies and grifting corporations, EFF discovered that "the frequency with which companies [received] NSLs--phone companies, internet providers, banks, or credit bureaus--contributed to the FBI’s NSL abuse."
"In over half of all NSL violations reviewed by EFF, the private entity receiving the NSL either provided more information than requested or turned over information without receiving a valid legal justification from the FBI."
In fact, "companies were all too willing to comply with the FBI's requests, and--in many cases--the Bureau readily incorporated the over-produced information into its investigatory databases."
This too is hardly surprising, given the enormous profits generated by the surveillance state for their corporate beneficiaries. As The Washington Post revealed in their investigative series, Top Secret America, more than 800,000 corporate employees have been issued top secret and above security clearances. Beholden to their employers and not the public who foots the bill and is the victim of their excesses, accountability is a fiction and oversight a contemptible fraud.
In a follow-up piece, Monitoring America, investigative journalists Dana Priest and William M. Arkin revealed that the FBI "is building a database with the names and certain personal information, such as employment history, of thousands of U.S. citizens and residents whom a local police officer or a fellow citizen believed to be acting suspiciously."
In other words, in order to "keep us safe" unaccountable securocrats are constructing a Stasi-like political intelligence system that has overthrown the traditional legal concept of probable cause in favor of a regime rooted in fear and suspicion; one where innocent activities such as taking a photograph or attending an antiwar rally now serves as a pretext for opening a national security investigation.
According to Priest and Arkin, the Bureau database "is accessible to an increasing number of local law enforcement and military criminal investigators, increasing concerns that it could somehow end up in the public domain," and used by employers to terminate political dissidents or other "undesirable" citizens merely on the basis of allegations emanating from who knows where.
As Antifascist Calling reported in October, "predictive behavior" security firms, generously funded by the CIA's venture capitalist arm, In-Q-Tel, have increasingly turned to monitoring social media sites such as Blogger, Facebook, Flickr, Twitter and YouTube and are exploiting powerful computer algorithms for their clients--your boss--thereby transforming private communications into "actionable intelligence" that just might get you fired.
In one case, EFF discovered that the FBI "requested email header information for two email addresses used by a U.S. person." In response, researchers averred "the email service provider returned two CDs containing the full content of all emails in the accounts. The FBI eventually (and properly) sequestered the CDs, notified the email provider of the overproduction, and re-issued an NSL for the originally requested header information; but, in response to the second NSL, the email provider again provided the FBI with the full content of all emails in the accounts."
To make matters worse, "third-parties not only willingly cooperated with FBI NSLs when the legal justification was unclear, however: they responded to NSLs without any legal justification at all."
In conclusion, EFF wrote that "while the reports documenting the FBI's abuse of the Constitution, FISA, and other intelligence laws are troubling, EFF's analysis is necessarily incomplete: it is impossible to know the severity of the FBI's legal violations until the Bureau stops concealing its most serious violations behind a wall of arbitrary secrecy."
This sordid state of affairs is likely to continue given Congress's utter lack of interest in protecting Americans' constitutionally-protected right to privacy, free speech and assembly.
With new moves afoot in Congress to pass a data retention law that requires internet service providers to retain records of users' online activity or, as in the repressive Egyptian U.S. client state, handing the Executive Branch a "kill-switch" that would disconnect the American people from the internet in the event of a "national emergency," the U.S. oligarchy is planning for the future.
As the World Socialist Web Site points out, "The US government is well aware that the Internet provides a forum for rapid communication and organization, as demonstrated by the events in Egypt this week. In an attempt to block communication within Egypt and with the external world, US-backed dictator Hosni Mubarak cut off the country's access to the Internet altogether."
"Similarly," left-wing journalist Patrick Zimmerman writes, "the fundamental goal of the US government in its attempts to gain control of the Internet and monitor user activity has nothing to do with the 'war on terror' or prosecuting criminals. Under conditions of growing social inequality, government austerity, and expanding war abroad, the government anticipates the growth of social opposition in the United States."
The Bush regime's "preemptive war" doctrine has been fully incorporated into the Obama administration's "homeland security" paradigm. The formidable police state apparatus that accompanies America's imperial adventures abroad are now deployed at home where they have devastating effects on an already dysfunctional democracy sliding ever-closer towards an authoritarian abyss.
Thursday, January 27, 2011
Dirty Work in the Balkans: NATO's KLA Frankenstein
The U.S. and German-installed leadership of Kosovo finds itself under siege after the Council of Europe voted Tuesday to endorse a report charging senior members of the Kosovo Liberation Army (KLA) of controlling a brisk trade in human organs, sex slaves and narcotics.
Coming on the heels of a retrial later this year of KLA commander and former Prime Minister, Ramush Haradinaj, by the International Criminal Tribunal for the Former Yugoslavia (ICTY) in The Hague, an enormous can of worms is about to burst open.
Last month, Antifascist Calling reported that Hashim Thaçi, the current Prime Minister of the breakaway Serb province, and other members of the self-styled Drenica Group, were accused by Council of Europe investigators of running a virtual mafia state.
According to Swiss parliamentarian Dick Marty, the Council's Special Rapporteur for Human Rights, Thaçi, Dr. Shaip Muja, and other leading members of the government directed--and profited from--an international criminal enterprise whose tentacles spread across Europe into Israel, Turkey and South Africa.
For his part, Thaçi has repudiated the allegations and has threatened to sue Marty for libel. Sali Berisha, Albania's current Prime Minister and Thaçi's close ally, dismissed the investigation as a "completely racist and defamatory report," according to The New York Times.
That's rather rich coming from a politician who held office during the systematic looting of Albania's impoverished people during the "economic liberalization" of the 1990s.
At the time, Berisha's Democratic Party government urged Albanians to invest in dodgy pyramid funds, massive Ponzi schemes that were little more than fronts for drug money laundering and arms trafficking.
More than a decade ago, Global Research analyst Michel Chossudovsky documented how the largest fund, "VEFA Holdings had been set up by the Guegue 'families' of Northern Albania with the support of Western banking interests," even though the fund "was under investigation in Italy in 1997 for its ties to the Mafia which allegedly used VEFA to launder large amounts of dirty money."
By 1997, two-thirds of the Albanian population who believed fairy tales of capitalist prosperity spun by their kleptocratic leaders and the IMF, lost some $1.2 billion to the well-connected fraudsters. When the full extent of the crisis reached critical mass, it sparked an armed revolt that was only suppressed after the UN Security Council deployed some 7,000 NATO troops that occupied the country; more than 2,000 people were killed.
Today the Berisha regime, like their junior partners in Pristina, face a new legitimacy crisis.
As the World Socialist Web Site reported, mass protests broke out in Tirana last week, with more than 20,000 demonstrators taking to the streets, after a nationally broadcast report showed a Deputy Prime Minister from Berisha's party "in secretly taped talks, openly negotiating the level of bribes to back the construction of a new hydroelectric power station."
As is the wont of gangster states everywhere, "police responded with extreme violence against the demonstrators; three people died and dozens were injured."
While the charges against Thaçi and his confederates are shocking, evidence that these horrific crimes have been known for years, and suppressed, both by the United Nations Interim Administration in Kosovo (UNMIK) and by top American and German officials--the political mandarins pulling Balkan strings--lend weight to suspicions that a protective wall was built around their protégés; facts borne out by subsequent NATO investigations, also suppressed.
Leaked Military Intelligence Reports
On Monday, a series of NATO reports were leaked to The Guardian. Military intelligence officials, according to investigative journalist Paul Lewis, identified Kosovo Prime Minister Hashim Thaçi as one of the "'biggest fish' in organised crime in his country."
Marked "Secret" by NATO spooks, Lewis disclosed that the 2004 reports also "indicate that the US and other western powers backing Kosovo's government have had extensive knowledge of its criminal connections for several years."
According to The Guardian, the files, tagged "'USA KFOR' ... provide detailed information about organised criminal networks in Kosovo based on reports by western intelligence agencies and informants," and also "identify another senior ruling politician in Kosovo as having links to the Albanian mafia, stating that he exerts considerable control over Thaçi, a former guerrilla leader."
As noted above, with the Council of Europe demanding a formal investigation into charges that Thaçi's criminal enterprise presided over a grisly traffic in human organs and exerted "violent control" over the heroin trade, it appears that the American and German-backed narco statelet is in for a very rough ride.
In the NATO reports, The Guardian revealed that Thaçi "is identified as one of a triumvirate of 'biggest fish' in organised criminal circles."
"So too," Lewis writes, "is Xhavit Haliti, a former head of logistics for the KLA who is now a close ally of the prime minister and a senior parliamentarian in his ruling PDK party."
The reports suggest "that behind his role as a prominent politician, Haliti is also a senior organised criminal who carries a Czech 9mm pistol and holds considerable sway over the prime minister."
Described as "'the power behind Hashim Thaçi', one report states that Haliti has strong ties with the Albanian mafia and Kosovo's secret service, known as KShiK."
The former KLA logistics specialist, according to The Guardian, suggest that Haliti "'more or less ran' a fund for the Kosovo war in the late 1990s, profiting from the fund personally before the money dried up. 'As a result, Haliti turned to organised crime on a grand scale,' the reports state'."
Such information was long known in Western intelligence and political circles, especially amongst secret state agencies such as the American CIA, DEA and FBI, Germany's Bundesnachrichtendienst, or BND, Britain's MI6 and Italy's military-intelligence service, SISMI, as Marty disclosed last month.
In 1994 for example, The New York Times reported that the Observatoire Géopolitique des Drogues released a report documenting that "Albanian groups in Macedonia and Kosovo Province in Serbia are trading heroin for large quantities of weapons for use in a brewing conflict in Kosovo."
According to the Times, "Albanian traffickers were supplied with heroin and weapons by mafia-like groups in Georgia and Armenia. The Albanians then pay for the supplies by reselling the heroin in the West."
A year later, Jane's Intelligence Review reported that "if left unchecked ... Albanian narco-terrorism could lead to a Colombian syndrome in the southern Balkans, or the emergence of a situation in which the Albanian mafia becomes powerful enough to control one or more states in the region."
Following NATO's 1999 bombing campaign that completed the sought-after break-up of Yugoslavia, that situation came to pass; Kosovo has since metastasized into a key link in the international narcotics supply chain.
NATO spooks averred that Haliti is "highly involved in prostitution, weapons and drugs smuggling" and that he serves as Thaçi's chief "political and financial adviser," and, according to the documents, he is arguably "the real boss" in the relationship.
Like Haradinaj, Haliti "is linked to the alleged intimidation of political opponents in Kosovo and two suspected murders dating back to the late 1990s, when KLA infighting is said to have resulted in numerous killings," Lewis reports.
In 2008, Haradinaj and Idriz Balaj were acquitted by the U.S.-sponsored ICTY "victors tribunal" of charges of war crimes and crimes against humanity. Lahi Brahimaj, Haradinaj's uncle, was sentenced to six years' imprisonment for the torture of two people at KLA headquarters.
A retrial was ordered last summer after evidence emerged that Haradinaj, long-suspected of running a parallel organized crime ring to Thaçi's that also trafficked arms, drugs and sexual slaves across Europe, a fact long-known--and similarly suppressed--by the mafia state's closest allies, Germany and the United States, may have intimidated witnesses who had agreed to testify against his faction of the KLA leadership.
A former nightclub bouncer who morphed into a "freedom fighter" during the 1990s, Haradinaj has been accused by prosecutors of crimes committed between March and September 1998 in the Dukagjin area of western Kosovo.
According to The Guardian, "Haradinaj was a commander of the KLA in Dukagjin, Balaj was the commander of the Black Eagles unit within the KLA, and Brahimaj a KLA member stationed in the force's headquarters in the town of Jablanica."
The appeals court ruled that "in the context of the serious witness intimidation that formed the context of the trial, it was clear that the trial chamber seriously erred in failing to take adequate measures to secure the testimony of certain witnesses."
The indictment charges that the KLA "persecuted and abducted civilians thought to be collaborating with Serbian forces in the Dukagjin area and that Haradinaj, Balaj, and Brahimaj were responsible for abduction, murder, torture and ethnic cleansing of Serbs, Roma and fellow Albanians through a joint criminal enterprise, including the murder of 39 people whose bodies were retrieved from a lake," The Guardian disclosed.
But in a case that demonstrates the cosy relations amongst KLA leaders and their Western puppetmasters despite, or possibly because of their links to organized crime, German Foreign Policy revealed that "high ranking UN officials helped intimidate witnesses due to testify in The Hague against Haradinaj."
This charge was echoed by Special Rapporteur Dick Marty. He told Center for Investigative Reporting journalists Michael Montgomery and Altin Raxhimi, who broke the Kosovo organ trafficking story two years ago, that his investigation "could be hindered by witness safety and other security concerns."
"If, as a witness, you do not have complete assurance that your statements will be kept confidential, and that as a witness you are truly protected, clearly you won't talk to these institutions," Marty said.
Such problems are compounded when the leading lights overseeing Kosovo's administration, Germany and the United States, have every reason to scuttle any credible investigation into the crimes of their clients, particularly when a serious probe would reveal their own complicity.
Eyes Wide Shut
The Haradinaj cover-up is just the tip of the proverbial iceberg.
According to German Foreign Policy, "the structures of organized crime in Kosovo, in which Haradinaj is said to play an important role, extend all the way to Germany. It is being reported that German government authorities prevented investigations of Kosovo Albanians residing in Germany."
Investigative journalist Boris Kanzleiter told the left-leaning online magazine that the UN administration in Kosovo (UNMIK) and its newest iteration, the European Rule of Law Mission in Kosovo (EULEX) "maintains very close ties to Haradinaj."
The former head of UNMIK, Sören Jessen-Petersen, referred to him as a "close partner and friend." Kanzleiter said that "Jessen-Petersen's successor, the German diplomat, Joachim Ruecker, also has a close relationship to him."
Kanzleiter told the journal, "accusations were made that high-ranking UNMIK functionaries were directly involved in the intimidation of witnesses."
These reports should be taken seriously, especially in light of allegations that even before Haradinaj's first trial, a witness against the former Prime Minister was killed in what was then described as "an unsolved auto accident."
"Back in 2002," German Foreign Policy reported, "three witnesses and two investigating officials were assassinated in the context of the trial against Haradinaj's clan."
Similar to the modus operandi of Thaçi's enterprise, the newsmagazine reported that the BND had concluded that Haradinaj's "network of [drugs and arms] smugglers were operating 'throughout the Balkans', extending 'into Greece, Italy, Switzerland and all the way to Germany'."
Not that any of this mattered to Germany or the United States. German Foreign Policy also reported that despite overwhelming evidence of KLA links to the global drugs trade, political circles in Berlin vetoed official investigations into KLA narcotics trafficking.
In 2005 "the State Offices of Criminal Investigation of Bavaria and Lower Saxony tried to convince the Federal Office of Criminal Investigation to open a centralized investigation concerning the known [Kosovo-Albanian] clans and individuals in Germany" because "many criminal culprits from the entourage of the KLA have settled in Germany."
The author noted "this demand was refused." Indeed, "even though the Austrian Federal Office of Investigation and the Italian police strongly insisted that their German colleagues finally initiate these investigations, the rejection ... according to a confidential source in the Austrian Federal Office of Criminal Investigation, came straight from the Interior Ministry in Berlin."
As we have since learned, Haliti and other top KLA officials have also been linked to organized crime in Marty's report. The human rights Rapporteur accused Haliti, like Haradinaj, of having ordered "assassinations, detentions, beatings and interrogations" of those who ran afoul of Thaçi's underworld associates.
In 2009, German Foreign Policy reported yet another "new scandal" threatened to upset the apple cart. "A former agent of the Kosovo intelligence service explained that a close associate of Kosovo's incumbent Prime Minister, Hashim Thaçi, had commissioned the assassinations of political opponents."
"The newest mafia scandal involving Pristina's secessionist regime was set in motion by the former secret agent Nazim Bllaca," the magazine disclosed.
According to the publication, "Bllaca alleges that he had been in the employ of the secret service, SHIK, since the end of the war waged against Yugoslavia in 1999 by NATO and the troops of Kosovo's terrorist UCK [KLA] militia."
The former secret state agent claimed "he had personally committed 17 crimes in the course of his SHIK activities, including extortion, assassination, assaults, torture and serving as a contract killer."
Marty told the Center for Investigative Reporting that "Bllaca's experience did not bode well for other insiders who are considering cooperating with the authorities." EULEX officials only placed Bllaca under protective custody a week after he went public with his allegations, in what could only be described as an open-ended invitation for an assassin's bullet.
Despite such revelations, diplomatic cables unearthed by WikiLeaks show that the U.S. Embassy views their Frankenstein creations in an entirely favorable light.
A Cablegate file dated 02-17-10, "Kosovo Celebrates Second Anniversary with Successes and Challenges," 10PRISTINA84, informs us that "two years have seen political stability that has allowed the country to create legitimate new institutions," but that the narco state "must use its string of economic reforms and privatizations as a springboard to motivate private-sector growth."
Such as auctioning-off the Trepca mining complex at fire-sale prices. As The New York Times reported back in 1998, the Trepca mines are "the most valuable piece of real estate in the Balkans, worth at least $5 billion."
Summing up the reasons for NATO's war, one mine director told Times' reporter Chris Hedges: "The war in Kosovo is about the mines, nothing else. This is Serbia's Kuwait--the heart of Kosovo. We export to France, Switzerland, Greece, Sweden, the Czech Republic, Russia and Belgium.
"We export to a firm in New York, but I would prefer not to name it. And in addition to all this Kosovo has 17 billion tons of coal reserves. Naturally, the Albanians want all this for themselves."
Judging by the flood of heroin reaching European and North American "markets," one can only conclude that if fleets of armored Mercedes and BMWs prowling Pristina streets are a growth metric then by all means, America and Germany's "nation building" enterprise has been a real achievement!
In light of reports of widespread criminality that would make a Wall Street hedge fund manager blush, we're told by the U.S. Embassy that the Thaçi government "must prioritize the rule of law and the fight against corruption."
Laying it on thick, despite damning intelligence reports by their own secret services, the Embassy avers that "Kosovo's independence has been a success story." Indeed, "the international community and the Kosovars, themselves, can feel good about the positive steps that have occurred over the past two years."
That is, if one closes one's eyes when stepping over the corpses.
Coming on the heels of a retrial later this year of KLA commander and former Prime Minister, Ramush Haradinaj, by the International Criminal Tribunal for the Former Yugoslavia (ICTY) in The Hague, an enormous can of worms is about to burst open.
Last month, Antifascist Calling reported that Hashim Thaçi, the current Prime Minister of the breakaway Serb province, and other members of the self-styled Drenica Group, were accused by Council of Europe investigators of running a virtual mafia state.
According to Swiss parliamentarian Dick Marty, the Council's Special Rapporteur for Human Rights, Thaçi, Dr. Shaip Muja, and other leading members of the government directed--and profited from--an international criminal enterprise whose tentacles spread across Europe into Israel, Turkey and South Africa.
For his part, Thaçi has repudiated the allegations and has threatened to sue Marty for libel. Sali Berisha, Albania's current Prime Minister and Thaçi's close ally, dismissed the investigation as a "completely racist and defamatory report," according to The New York Times.
That's rather rich coming from a politician who held office during the systematic looting of Albania's impoverished people during the "economic liberalization" of the 1990s.
At the time, Berisha's Democratic Party government urged Albanians to invest in dodgy pyramid funds, massive Ponzi schemes that were little more than fronts for drug money laundering and arms trafficking.
More than a decade ago, Global Research analyst Michel Chossudovsky documented how the largest fund, "VEFA Holdings had been set up by the Guegue 'families' of Northern Albania with the support of Western banking interests," even though the fund "was under investigation in Italy in 1997 for its ties to the Mafia which allegedly used VEFA to launder large amounts of dirty money."
By 1997, two-thirds of the Albanian population who believed fairy tales of capitalist prosperity spun by their kleptocratic leaders and the IMF, lost some $1.2 billion to the well-connected fraudsters. When the full extent of the crisis reached critical mass, it sparked an armed revolt that was only suppressed after the UN Security Council deployed some 7,000 NATO troops that occupied the country; more than 2,000 people were killed.
Today the Berisha regime, like their junior partners in Pristina, face a new legitimacy crisis.
As the World Socialist Web Site reported, mass protests broke out in Tirana last week, with more than 20,000 demonstrators taking to the streets, after a nationally broadcast report showed a Deputy Prime Minister from Berisha's party "in secretly taped talks, openly negotiating the level of bribes to back the construction of a new hydroelectric power station."
As is the wont of gangster states everywhere, "police responded with extreme violence against the demonstrators; three people died and dozens were injured."
While the charges against Thaçi and his confederates are shocking, evidence that these horrific crimes have been known for years, and suppressed, both by the United Nations Interim Administration in Kosovo (UNMIK) and by top American and German officials--the political mandarins pulling Balkan strings--lend weight to suspicions that a protective wall was built around their protégés; facts borne out by subsequent NATO investigations, also suppressed.
Leaked Military Intelligence Reports
On Monday, a series of NATO reports were leaked to The Guardian. Military intelligence officials, according to investigative journalist Paul Lewis, identified Kosovo Prime Minister Hashim Thaçi as one of the "'biggest fish' in organised crime in his country."
Marked "Secret" by NATO spooks, Lewis disclosed that the 2004 reports also "indicate that the US and other western powers backing Kosovo's government have had extensive knowledge of its criminal connections for several years."
According to The Guardian, the files, tagged "'USA KFOR' ... provide detailed information about organised criminal networks in Kosovo based on reports by western intelligence agencies and informants," and also "identify another senior ruling politician in Kosovo as having links to the Albanian mafia, stating that he exerts considerable control over Thaçi, a former guerrilla leader."
As noted above, with the Council of Europe demanding a formal investigation into charges that Thaçi's criminal enterprise presided over a grisly traffic in human organs and exerted "violent control" over the heroin trade, it appears that the American and German-backed narco statelet is in for a very rough ride.
In the NATO reports, The Guardian revealed that Thaçi "is identified as one of a triumvirate of 'biggest fish' in organised criminal circles."
"So too," Lewis writes, "is Xhavit Haliti, a former head of logistics for the KLA who is now a close ally of the prime minister and a senior parliamentarian in his ruling PDK party."
The reports suggest "that behind his role as a prominent politician, Haliti is also a senior organised criminal who carries a Czech 9mm pistol and holds considerable sway over the prime minister."
Described as "'the power behind Hashim Thaçi', one report states that Haliti has strong ties with the Albanian mafia and Kosovo's secret service, known as KShiK."
The former KLA logistics specialist, according to The Guardian, suggest that Haliti "'more or less ran' a fund for the Kosovo war in the late 1990s, profiting from the fund personally before the money dried up. 'As a result, Haliti turned to organised crime on a grand scale,' the reports state'."
Such information was long known in Western intelligence and political circles, especially amongst secret state agencies such as the American CIA, DEA and FBI, Germany's Bundesnachrichtendienst, or BND, Britain's MI6 and Italy's military-intelligence service, SISMI, as Marty disclosed last month.
In 1994 for example, The New York Times reported that the Observatoire Géopolitique des Drogues released a report documenting that "Albanian groups in Macedonia and Kosovo Province in Serbia are trading heroin for large quantities of weapons for use in a brewing conflict in Kosovo."
According to the Times, "Albanian traffickers were supplied with heroin and weapons by mafia-like groups in Georgia and Armenia. The Albanians then pay for the supplies by reselling the heroin in the West."
A year later, Jane's Intelligence Review reported that "if left unchecked ... Albanian narco-terrorism could lead to a Colombian syndrome in the southern Balkans, or the emergence of a situation in which the Albanian mafia becomes powerful enough to control one or more states in the region."
Following NATO's 1999 bombing campaign that completed the sought-after break-up of Yugoslavia, that situation came to pass; Kosovo has since metastasized into a key link in the international narcotics supply chain.
NATO spooks averred that Haliti is "highly involved in prostitution, weapons and drugs smuggling" and that he serves as Thaçi's chief "political and financial adviser," and, according to the documents, he is arguably "the real boss" in the relationship.
Like Haradinaj, Haliti "is linked to the alleged intimidation of political opponents in Kosovo and two suspected murders dating back to the late 1990s, when KLA infighting is said to have resulted in numerous killings," Lewis reports.
In 2008, Haradinaj and Idriz Balaj were acquitted by the U.S.-sponsored ICTY "victors tribunal" of charges of war crimes and crimes against humanity. Lahi Brahimaj, Haradinaj's uncle, was sentenced to six years' imprisonment for the torture of two people at KLA headquarters.
A retrial was ordered last summer after evidence emerged that Haradinaj, long-suspected of running a parallel organized crime ring to Thaçi's that also trafficked arms, drugs and sexual slaves across Europe, a fact long-known--and similarly suppressed--by the mafia state's closest allies, Germany and the United States, may have intimidated witnesses who had agreed to testify against his faction of the KLA leadership.
A former nightclub bouncer who morphed into a "freedom fighter" during the 1990s, Haradinaj has been accused by prosecutors of crimes committed between March and September 1998 in the Dukagjin area of western Kosovo.
According to The Guardian, "Haradinaj was a commander of the KLA in Dukagjin, Balaj was the commander of the Black Eagles unit within the KLA, and Brahimaj a KLA member stationed in the force's headquarters in the town of Jablanica."
The appeals court ruled that "in the context of the serious witness intimidation that formed the context of the trial, it was clear that the trial chamber seriously erred in failing to take adequate measures to secure the testimony of certain witnesses."
The indictment charges that the KLA "persecuted and abducted civilians thought to be collaborating with Serbian forces in the Dukagjin area and that Haradinaj, Balaj, and Brahimaj were responsible for abduction, murder, torture and ethnic cleansing of Serbs, Roma and fellow Albanians through a joint criminal enterprise, including the murder of 39 people whose bodies were retrieved from a lake," The Guardian disclosed.
But in a case that demonstrates the cosy relations amongst KLA leaders and their Western puppetmasters despite, or possibly because of their links to organized crime, German Foreign Policy revealed that "high ranking UN officials helped intimidate witnesses due to testify in The Hague against Haradinaj."
This charge was echoed by Special Rapporteur Dick Marty. He told Center for Investigative Reporting journalists Michael Montgomery and Altin Raxhimi, who broke the Kosovo organ trafficking story two years ago, that his investigation "could be hindered by witness safety and other security concerns."
"If, as a witness, you do not have complete assurance that your statements will be kept confidential, and that as a witness you are truly protected, clearly you won't talk to these institutions," Marty said.
Such problems are compounded when the leading lights overseeing Kosovo's administration, Germany and the United States, have every reason to scuttle any credible investigation into the crimes of their clients, particularly when a serious probe would reveal their own complicity.
Eyes Wide Shut
The Haradinaj cover-up is just the tip of the proverbial iceberg.
According to German Foreign Policy, "the structures of organized crime in Kosovo, in which Haradinaj is said to play an important role, extend all the way to Germany. It is being reported that German government authorities prevented investigations of Kosovo Albanians residing in Germany."
Investigative journalist Boris Kanzleiter told the left-leaning online magazine that the UN administration in Kosovo (UNMIK) and its newest iteration, the European Rule of Law Mission in Kosovo (EULEX) "maintains very close ties to Haradinaj."
The former head of UNMIK, Sören Jessen-Petersen, referred to him as a "close partner and friend." Kanzleiter said that "Jessen-Petersen's successor, the German diplomat, Joachim Ruecker, also has a close relationship to him."
Kanzleiter told the journal, "accusations were made that high-ranking UNMIK functionaries were directly involved in the intimidation of witnesses."
These reports should be taken seriously, especially in light of allegations that even before Haradinaj's first trial, a witness against the former Prime Minister was killed in what was then described as "an unsolved auto accident."
"Back in 2002," German Foreign Policy reported, "three witnesses and two investigating officials were assassinated in the context of the trial against Haradinaj's clan."
Similar to the modus operandi of Thaçi's enterprise, the newsmagazine reported that the BND had concluded that Haradinaj's "network of [drugs and arms] smugglers were operating 'throughout the Balkans', extending 'into Greece, Italy, Switzerland and all the way to Germany'."
Not that any of this mattered to Germany or the United States. German Foreign Policy also reported that despite overwhelming evidence of KLA links to the global drugs trade, political circles in Berlin vetoed official investigations into KLA narcotics trafficking.
In 2005 "the State Offices of Criminal Investigation of Bavaria and Lower Saxony tried to convince the Federal Office of Criminal Investigation to open a centralized investigation concerning the known [Kosovo-Albanian] clans and individuals in Germany" because "many criminal culprits from the entourage of the KLA have settled in Germany."
The author noted "this demand was refused." Indeed, "even though the Austrian Federal Office of Investigation and the Italian police strongly insisted that their German colleagues finally initiate these investigations, the rejection ... according to a confidential source in the Austrian Federal Office of Criminal Investigation, came straight from the Interior Ministry in Berlin."
As we have since learned, Haliti and other top KLA officials have also been linked to organized crime in Marty's report. The human rights Rapporteur accused Haliti, like Haradinaj, of having ordered "assassinations, detentions, beatings and interrogations" of those who ran afoul of Thaçi's underworld associates.
In 2009, German Foreign Policy reported yet another "new scandal" threatened to upset the apple cart. "A former agent of the Kosovo intelligence service explained that a close associate of Kosovo's incumbent Prime Minister, Hashim Thaçi, had commissioned the assassinations of political opponents."
"The newest mafia scandal involving Pristina's secessionist regime was set in motion by the former secret agent Nazim Bllaca," the magazine disclosed.
According to the publication, "Bllaca alleges that he had been in the employ of the secret service, SHIK, since the end of the war waged against Yugoslavia in 1999 by NATO and the troops of Kosovo's terrorist UCK [KLA] militia."
The former secret state agent claimed "he had personally committed 17 crimes in the course of his SHIK activities, including extortion, assassination, assaults, torture and serving as a contract killer."
Marty told the Center for Investigative Reporting that "Bllaca's experience did not bode well for other insiders who are considering cooperating with the authorities." EULEX officials only placed Bllaca under protective custody a week after he went public with his allegations, in what could only be described as an open-ended invitation for an assassin's bullet.
Despite such revelations, diplomatic cables unearthed by WikiLeaks show that the U.S. Embassy views their Frankenstein creations in an entirely favorable light.
A Cablegate file dated 02-17-10, "Kosovo Celebrates Second Anniversary with Successes and Challenges," 10PRISTINA84, informs us that "two years have seen political stability that has allowed the country to create legitimate new institutions," but that the narco state "must use its string of economic reforms and privatizations as a springboard to motivate private-sector growth."
Such as auctioning-off the Trepca mining complex at fire-sale prices. As The New York Times reported back in 1998, the Trepca mines are "the most valuable piece of real estate in the Balkans, worth at least $5 billion."
Summing up the reasons for NATO's war, one mine director told Times' reporter Chris Hedges: "The war in Kosovo is about the mines, nothing else. This is Serbia's Kuwait--the heart of Kosovo. We export to France, Switzerland, Greece, Sweden, the Czech Republic, Russia and Belgium.
"We export to a firm in New York, but I would prefer not to name it. And in addition to all this Kosovo has 17 billion tons of coal reserves. Naturally, the Albanians want all this for themselves."
Judging by the flood of heroin reaching European and North American "markets," one can only conclude that if fleets of armored Mercedes and BMWs prowling Pristina streets are a growth metric then by all means, America and Germany's "nation building" enterprise has been a real achievement!
In light of reports of widespread criminality that would make a Wall Street hedge fund manager blush, we're told by the U.S. Embassy that the Thaçi government "must prioritize the rule of law and the fight against corruption."
Laying it on thick, despite damning intelligence reports by their own secret services, the Embassy avers that "Kosovo's independence has been a success story." Indeed, "the international community and the Kosovars, themselves, can feel good about the positive steps that have occurred over the past two years."
That is, if one closes one's eyes when stepping over the corpses.
Monday, January 17, 2011
White House Plans to Launch Internet ID System, Further Eroding Civil and Political Rights
Urged by one and all to "tone down" what media pundits and political elites describe as "strident," even "violent" rhetoric that has "poisoned" our "national conversation" and "sharply polarized" the population, the shooting rampage in Tucson which claimed six lives, including that of a nine-year-old girl is, in fact, emblematic of the moral bankruptcy and utter hypocrisy of those selfsame capitalist elites.
Faced with an unprecedented economic crisis that has destroyed the lives of tens of millions our fellow citizens, not to mention aggressive wars which have cratered entire societies and murdered hundreds of thousands of people who have done us no harm, when, pray tell, will the "conversation" turn to the unprecedented annihilation of democratic institutions and the rule of law which exonerates, even celebrates, those who murder, maim and torture on an industrial scale?
Just last week, the Obama administration announced plans to roll-out an "identity ecosystem" for the internet. Although passed over in silence by major media, at the risk of being accused of "incivility," particularly when it comes to the "hope" fraudster and war criminal in the Oval Office, Americans need to focus--sharply--on the militarists, political bag men and corporate gangsters working to bring George Orwell's dystopian world one step closer to reality.
Earlier this month, CNET disclosed that the administration "is planning to hand the U.S. Commerce Department authority over a forthcoming cybersecurity effort to create an Internet ID for Americans."
White House Cybersecurity Coordinator Howard Schmidt said that the secret state's latest move to lower the boom on privacy and free speech will embed the surveillance op at the Commerce Department. Schmidt, speaking at the Stanford Institute for Economic Policy Research said Commerce is "the absolute perfect spot in the U.S. government" to centralize these efforts.
According to CNET, the move "effectively pushes the department to the forefront of the issue, beating out other potential candidates, including the National Security Agency and the Department of Homeland Security."
Really? I don't think so.
NSA Clearly in the Frame
Last week, Government Computer News reported that the secretive Pentagon spy shop broke ground on a "massive new National Security Agency cyber intelligence center in Utah."
The multibillion dollar facility (cost overruns not included) "will have 100,000 square feet of raised-floor data center space and more than 900,000 square feet of technical support and administrative space" that "will support the Comprehensive National Cybersecurity Initiative."
In September, NextGov reported that then Deputy Director of National Intelligence for Collection, Glenn Gaffney, said the new data center "would support the intelligence community in providing foreign intelligence about cybersecurity threats and protect Defense Department networks."
Back in 2009, investigative journalist James Bamford wrote in The New York Review of Books that "the mammoth $2 billion structure will be one-third larger than the US Capitol and will use the same amount of energy as every house in Salt Lake City combined."
While corporate media tell us that the center will "enhance" the nation's capacity to thwart "cyber threats" the fact is, Bamford wrote, the complex will "house trillions of phone calls, e-mail messages, and data trails: Web searches, parking receipts, bookstore visits, and other digital 'pocket litter'." In other words, the vast data repository will serve as "spy central" for our digital minders.
"Just how much information will be stored in these windowless cybertemples?" Bamford wondered. According to a report prepared for the Pentagon by the ultra-spooky MITRE Corporation, "as the sensors associated with the various surveillance missions improve, the data volumes are increasing with a projection that sensor data volume could potentially increase to the level of Yottabytes (10 to the 24 Bytes) by 2015."
This is "roughly equal to about a septillion (1,000,000,000,000,000,000,000,000) pages of text, numbers beyond Yottabytes haven't yet been named," Bamford avers.
Leaving aside disinformational pyrotechnics by media cheerleaders that the NSA's data equivalent of a Wal-Mart supercenter will primarily exist for "cybersecurity," "foreign intelligence" and protecting "Defense Department networks," Bamford counters that "once vacuumed up and and stored in these near-infinite 'libraries,' the data are then analyzed by powerful infoweapons, supercomputers running complex algorithmic programs, to determine who among us may be--or may one day become--a terrorist."
"In the NSA's world of automated surveillance on steroids" Bamford avers, "every bit has a history and every keystroke tells a story."
Or as Cryptohippie puts it far less delicately, every keystroke or cellphone ping is "criminal evidence, ready for use in a trial."
Just what are they up to? Even Congress, always willing to give the Executive Branch a free pass when it comes to blanket surveillance, doesn't know. Last week the Associated Press reported that "the Pentagon failed to disclose clandestine cyber activities in a classified report on secret military actions that goes to Congress."
Citing "gaps" in reporting requirements on clandestine operations, "emerging high-tech operations are not specifically listed in the law," AP averred. After all, "cyber oversight is still a murky work in progress for the Obama administration."
Perhaps AP and other media outlets should look more closely at what's hidden inside that "murky work" and where its authority comes from. "Oversight" is certainly not part of the equation.
Cybersecurity's Brave New World
As Antifascist Calling previously reported, the operational nuts-and-bolts of the Comprehensive National Cybersecurity Initiative (CNCI) is a closely-held state secret that derives authority from classified annexes of the National Security Presidential Directive 54, Homeland Security Presidential Directive 23 (NSPD 54/HSPD 23) issued by our former "decider."
Those 2008 orders are so contentious that both the Bush and Obama administrations have refused to release details to Congress, prompting a Freedom of Information Act lawsuit by the Electronic Privacy Information Center (EPIC) demanding the full text of the underlying legal authority governing "cybersecurity" be made public.
Details on the "trusted identity" scheme are scarce, but back in July Antifascist Calling reported that the secret state had deployed New York Times reporter John Markoff as a conduit for administration scaremongering.
Schmidt told the "Gray Lady" that administration plans involved "a 'voluntary trusted identity' system that would be the high-tech equivalent of a physical key, a fingerprint and a photo ID card, all rolled into one."
According to the Times, "the system might use a smart identity card, or a digital credential linked to a specific computer, and would authenticate users at a range of online services."
U.S. Commerce Secretary Gary Locke was quick to downplay the more sinister implications of the hustle saying, "We are not talking about a national ID card."
CNET reported Locke's claim that "we are not talking about a government-controlled system. What we are talking about is enhancing online security and privacy, and reducing and perhaps even eliminating the need to memorize a dozen passwords, through creation and use of more trusted digital identities."
Why bother with privacy when surrendering your rights is so convenient!
Touted as a warm and fuzzy "identity ecosystem," Government Computer News reported that the National Institute of Standards and Technology (NIST) has even launched a dedicated website hawking the National Strategy for Trusted Identities in Cyberspace (NSTIC).
According to NIST, "NSTIC envisions a cyber world--the Identity Ecosystem--that improves upon the passwords currently used to login online."
We're informed that the "Identity Ecosystem will provide people with a variety of more secure and privacy-enhancing ways to access online services. The Identity Ecosystem enables people to validate their identities securely when they're doing sensitive transactions (like banking) and lets them stay anonymous when they're not (like blogging). The Identity Ecosystem will enhance individuals' privacy by minimizing the information they must disclose to authenticate themselves."
Government Computer News tells us that the "identity ecosystem" isn't envisaged as a "national Internet ID to track online activities." The devil's in the details and what little we do know should set alarm bells ringing.
The program office will "support and coordinate interagency collaboration" and "promote pilot projects and other implementations." Which agencies are we talking about here? What pilot projects and "other implementations" are being alluding to? We don't know.
We do know however, that the National Security Agency and Department of Homeland Security have forged a Memorandum of Agreement which will increase Pentagon control over America's telecommunications and electronic infrastructure.
In fact, as the Electronic Frontier Foundation disclosed in October, DHS has been tracking people online and that the agency even established a "Social Networking Monitoring Center" to explicitly do so.
Documents obtained by the civil liberties watchdog group revealed that the agency has been vacuuming-up "items of interest," systematically monitoring "citizenship petitioners" and analyzing "online public communication."
Wouldn't an "identity ecosystem" greatly facilitate online spying, despite administration claims to the contrary?
While the system is "voluntary" and individuals will not be compelled to sign up, the secret state is lusting after a sure fire means to identify the billions of computers, smart phones and other digital devices that plague us.
And even if you choose not to "opt in," well, plans are already afoot by advertising pimps and their partners in the national security state "to collect the digital equivalent of fingerprints from every computer, cellphone and TV set-top box in the world," The Wall Street Journal recently disclosed.
As with all other aspects of the "War on Terror" threatscape, the closer one looks at the Obama regime's "identity ecosystem" the less warm and fuzzy it becomes.
Faced with an unprecedented economic crisis that has destroyed the lives of tens of millions our fellow citizens, not to mention aggressive wars which have cratered entire societies and murdered hundreds of thousands of people who have done us no harm, when, pray tell, will the "conversation" turn to the unprecedented annihilation of democratic institutions and the rule of law which exonerates, even celebrates, those who murder, maim and torture on an industrial scale?
Just last week, the Obama administration announced plans to roll-out an "identity ecosystem" for the internet. Although passed over in silence by major media, at the risk of being accused of "incivility," particularly when it comes to the "hope" fraudster and war criminal in the Oval Office, Americans need to focus--sharply--on the militarists, political bag men and corporate gangsters working to bring George Orwell's dystopian world one step closer to reality.
Earlier this month, CNET disclosed that the administration "is planning to hand the U.S. Commerce Department authority over a forthcoming cybersecurity effort to create an Internet ID for Americans."
White House Cybersecurity Coordinator Howard Schmidt said that the secret state's latest move to lower the boom on privacy and free speech will embed the surveillance op at the Commerce Department. Schmidt, speaking at the Stanford Institute for Economic Policy Research said Commerce is "the absolute perfect spot in the U.S. government" to centralize these efforts.
According to CNET, the move "effectively pushes the department to the forefront of the issue, beating out other potential candidates, including the National Security Agency and the Department of Homeland Security."
Really? I don't think so.
NSA Clearly in the Frame
Last week, Government Computer News reported that the secretive Pentagon spy shop broke ground on a "massive new National Security Agency cyber intelligence center in Utah."
The multibillion dollar facility (cost overruns not included) "will have 100,000 square feet of raised-floor data center space and more than 900,000 square feet of technical support and administrative space" that "will support the Comprehensive National Cybersecurity Initiative."
In September, NextGov reported that then Deputy Director of National Intelligence for Collection, Glenn Gaffney, said the new data center "would support the intelligence community in providing foreign intelligence about cybersecurity threats and protect Defense Department networks."
Back in 2009, investigative journalist James Bamford wrote in The New York Review of Books that "the mammoth $2 billion structure will be one-third larger than the US Capitol and will use the same amount of energy as every house in Salt Lake City combined."
While corporate media tell us that the center will "enhance" the nation's capacity to thwart "cyber threats" the fact is, Bamford wrote, the complex will "house trillions of phone calls, e-mail messages, and data trails: Web searches, parking receipts, bookstore visits, and other digital 'pocket litter'." In other words, the vast data repository will serve as "spy central" for our digital minders.
"Just how much information will be stored in these windowless cybertemples?" Bamford wondered. According to a report prepared for the Pentagon by the ultra-spooky MITRE Corporation, "as the sensors associated with the various surveillance missions improve, the data volumes are increasing with a projection that sensor data volume could potentially increase to the level of Yottabytes (10 to the 24 Bytes) by 2015."
This is "roughly equal to about a septillion (1,000,000,000,000,000,000,000,000) pages of text, numbers beyond Yottabytes haven't yet been named," Bamford avers.
Leaving aside disinformational pyrotechnics by media cheerleaders that the NSA's data equivalent of a Wal-Mart supercenter will primarily exist for "cybersecurity," "foreign intelligence" and protecting "Defense Department networks," Bamford counters that "once vacuumed up and and stored in these near-infinite 'libraries,' the data are then analyzed by powerful infoweapons, supercomputers running complex algorithmic programs, to determine who among us may be--or may one day become--a terrorist."
"In the NSA's world of automated surveillance on steroids" Bamford avers, "every bit has a history and every keystroke tells a story."
Or as Cryptohippie puts it far less delicately, every keystroke or cellphone ping is "criminal evidence, ready for use in a trial."
Just what are they up to? Even Congress, always willing to give the Executive Branch a free pass when it comes to blanket surveillance, doesn't know. Last week the Associated Press reported that "the Pentagon failed to disclose clandestine cyber activities in a classified report on secret military actions that goes to Congress."
Citing "gaps" in reporting requirements on clandestine operations, "emerging high-tech operations are not specifically listed in the law," AP averred. After all, "cyber oversight is still a murky work in progress for the Obama administration."
Perhaps AP and other media outlets should look more closely at what's hidden inside that "murky work" and where its authority comes from. "Oversight" is certainly not part of the equation.
Cybersecurity's Brave New World
As Antifascist Calling previously reported, the operational nuts-and-bolts of the Comprehensive National Cybersecurity Initiative (CNCI) is a closely-held state secret that derives authority from classified annexes of the National Security Presidential Directive 54, Homeland Security Presidential Directive 23 (NSPD 54/HSPD 23) issued by our former "decider."
Those 2008 orders are so contentious that both the Bush and Obama administrations have refused to release details to Congress, prompting a Freedom of Information Act lawsuit by the Electronic Privacy Information Center (EPIC) demanding the full text of the underlying legal authority governing "cybersecurity" be made public.
Details on the "trusted identity" scheme are scarce, but back in July Antifascist Calling reported that the secret state had deployed New York Times reporter John Markoff as a conduit for administration scaremongering.
Schmidt told the "Gray Lady" that administration plans involved "a 'voluntary trusted identity' system that would be the high-tech equivalent of a physical key, a fingerprint and a photo ID card, all rolled into one."
According to the Times, "the system might use a smart identity card, or a digital credential linked to a specific computer, and would authenticate users at a range of online services."
U.S. Commerce Secretary Gary Locke was quick to downplay the more sinister implications of the hustle saying, "We are not talking about a national ID card."
CNET reported Locke's claim that "we are not talking about a government-controlled system. What we are talking about is enhancing online security and privacy, and reducing and perhaps even eliminating the need to memorize a dozen passwords, through creation and use of more trusted digital identities."
Why bother with privacy when surrendering your rights is so convenient!
Touted as a warm and fuzzy "identity ecosystem," Government Computer News reported that the National Institute of Standards and Technology (NIST) has even launched a dedicated website hawking the National Strategy for Trusted Identities in Cyberspace (NSTIC).
According to NIST, "NSTIC envisions a cyber world--the Identity Ecosystem--that improves upon the passwords currently used to login online."
We're informed that the "Identity Ecosystem will provide people with a variety of more secure and privacy-enhancing ways to access online services. The Identity Ecosystem enables people to validate their identities securely when they're doing sensitive transactions (like banking) and lets them stay anonymous when they're not (like blogging). The Identity Ecosystem will enhance individuals' privacy by minimizing the information they must disclose to authenticate themselves."
Government Computer News tells us that the "identity ecosystem" isn't envisaged as a "national Internet ID to track online activities." The devil's in the details and what little we do know should set alarm bells ringing.
The program office will "support and coordinate interagency collaboration" and "promote pilot projects and other implementations." Which agencies are we talking about here? What pilot projects and "other implementations" are being alluding to? We don't know.
We do know however, that the National Security Agency and Department of Homeland Security have forged a Memorandum of Agreement which will increase Pentagon control over America's telecommunications and electronic infrastructure.
In fact, as the Electronic Frontier Foundation disclosed in October, DHS has been tracking people online and that the agency even established a "Social Networking Monitoring Center" to explicitly do so.
Documents obtained by the civil liberties watchdog group revealed that the agency has been vacuuming-up "items of interest," systematically monitoring "citizenship petitioners" and analyzing "online public communication."
Wouldn't an "identity ecosystem" greatly facilitate online spying, despite administration claims to the contrary?
While the system is "voluntary" and individuals will not be compelled to sign up, the secret state is lusting after a sure fire means to identify the billions of computers, smart phones and other digital devices that plague us.
And even if you choose not to "opt in," well, plans are already afoot by advertising pimps and their partners in the national security state "to collect the digital equivalent of fingerprints from every computer, cellphone and TV set-top box in the world," The Wall Street Journal recently disclosed.
As with all other aspects of the "War on Terror" threatscape, the closer one looks at the Obama regime's "identity ecosystem" the less warm and fuzzy it becomes.
Sunday, January 9, 2011
Allen Stanford's Trial Indefinitely Delayed. Suspected CIA Banker Became "Drug Dependent" -- in Federal Custody
The strange case of accused swindler and suspected CIA banker R. Allen Stanford became a whole lot stranger last week.
During a preliminary hearing in Houston, U.S. District Judge David Hittner ruled that Stanford, charged with orchestrating an $8 billion dollar Ponzi scheme that defrauded thousands of investors, cannot be tried until he undergoes detoxification for a drug addiction acquired after his incarceration in a federal detention facility.
Talk about a convenient turn of events!
"Nothing can be done until the medical aspect is cleared up," Hittner told defense lawyers and prosecutors during an all-day hearing that examined Stanford's mental competence to stand trial, Bloomberg News reported.
The banker's court-appointed defense team is seeking a two-year delay, citing the mountain of evidence, some two million pages at last count, they must review before the trial can proceed. Stanford's apparent inability to participate in his own defense would certainly complicate matters.
With a net worth once estimated at $2 billion, the accused fraudster was declared indigent last fall after his assets were seized and (known) accounts frozen following his 2009 arrest and indictment.
In October, U.S. District Judge Nancy Atlas ruled that Stanford and codefendants Laura Pendergest-Holt, Gilberto Lopez, Mark Kuhurt and Leroy King, the former chief regulator of the Bank of Antigua, cannot tap a $100 million Lloyds of London insurance policy to pay attorney fees.
According to the ruling, "lawyers for Lloyds had proven at a trial in August that it was likely that Stanford had committed money laundering." The court declared "that the policy's money laundering exclusion applies to justify underwriters' denial of insurance coverage at this time," Reuters reported.
Indicted eighteen months ago on 21 civil and criminal counts, including mail, wire, securities fraud and money laundering, Stanford is also suspected of running another in a long line of "full service banks" for American secret state agencies, including the CIA.
Interestingly enough, one of Stanford's early defense teams was led by none other than Robert S. Bennett, the high-powered attorney who successfully fought off prosecution for his client, Jose A. Rodriguez, the former head of the CIA's clandestine division, accused of destroying 92 torture videotapes of prisoners held at Agency "black sites."
This latest twist in the sleazy affair raise uncomfortable questions for prosecutors: just how does one become drug addicted while in federal custody?
According to Bloomberg, "three psychiatrists, one working for the government and two working for the defense, testified that Stanford's dependency on prescription anti-anxiety medication and the after-effects of a head injury he sustained in a jailhouse beating left him unfit for the trial" which was slated to begin later this month.
Victor Scarano, a defense psychiatrist testified that the banker's dependency on the anti-anxiety drug clonazepam, along with the powerful anti-depressant mirtazapine, was the result of "overmedication" by his jailers.
Scarano testified that for more than a year Stanford "has been taking 3 milligrams a day of the anti-anxiety drug clonazepam, and that a normal dose is up to 1 milligram a day for no longer than two weeks," the Houston Chronicle disclosed.
The psychiatrist told the court that "he is unable to work effectively and rationally with his attorneys in his defense against the charges."
"He is unable to focus, he's unable to keep a train of thought," Scarano testified.
A second psychiatrist, Steven Rosenblatt, hired by the government, "testified that Stanford is suffering from delirium, likely brought on by the medication."
During Thursday's hearing, Stanford's attorney Ali Fazel, told the court that his client had been assaulted while in federal custody, severely beaten and that it was prison physicians who prescribed the medications to which the accused swindler is now addicted. "It's the government that caused the problem," Fazel said.
The Independent averred this will raise "fresh and disturbing questions about the deterioration of Stanford's mental and physical health in the 18 months he has already spent behind bars."
Among the questions likely to be raised is why, for some unknown and still unexplained reason prison doctors dispensed triple the normal dose of a suite of drugs known to produce untoward side effects.
According to Wikipedia, clonazepam is used to treat epilepsy, anxiety disorder and panic disorder, and in combination with lithium and haloperidol, it is also used for the initial treatment of mania or acute psychosis.
This is certainly a curious choice for long-term treatment of a concussion. While Stanford may be a notorious huckster who believed he could do no wrong, even as he allegedly robbed investors blind, there is no evidence he suffered a psychotic break with reality. In fact, the evidence suggests quite the opposite.
Clonazepam is characterized by its "fast onset of action and high effectiveness rate and low toxicity in overdose but has drawbacks due to adverse reactions including paradoxical effects, drowsiness, and cognitive impairment."
According to scholarly literature cited by Wikipedia, "cognitive impairments can persist for at least 6 months after withdrawal of clonazepam; it is unclear whether full recovery of memory functions occurs. Other long-term effects of benzodiazepines include tolerance, a benzodiazepine dependence as well as a benzodiazepine withdrawal syndrome occurs in a third of people treated with clonazepam for longer than 4 weeks."
Common side effects include drowsiness, interference with cognitive and motor performance, irritability and aggression, psychomotor agitation, lack of motivation, loss of libido, hallucinations, short-term memory loss, and what are described as "anterograde amnesia (common with higher doses)" or, the "loss of the ability to create new memories ... leading to a partial or complete inability to recall the recent past."
The second drug dispensed to Stanford, the anti-depressant mirtazapine, is used in the treatment of depression, anxiety, obsessive-compulsive disorders and is said to "exacerbate some patients' depression or anxiety or cause suicidal ideation," Wikipedia informs us.
While "the potential for dangerous drug interactions with mirtazapine is considered to be very low," the drug may "increase the effects of ... benzodiazepines," e.g. clonazepam, the apparent drug of choice deployed by Stanford's jailers as part of his "treatment."
Attorneys and psychiatrists told the court that the accused swindler was treated for more than a year with triple the "normal dose" of a drug known for producing "paradoxical effects" including "a partial or complete inability to recall the recent past."
The question is why?
While Stanford's "overmedication" may have an innocent explanation, we cannot dismiss the possibility that someone or some entity perhaps, say an intelligence agency with decades of pharmacological knowledge derived from illicit human experiments might be interested in inducing permanent "cognitive impairment" in the dodgy banker.
A simpler explanation however, such as gross negligence on the part of his jailers cannot be ruled out. It is even quite possible, as assistant U.S. attorney Gregg Costa asserted, that Stanford "could have been faking the delirium in order to be let out of jail before facing trial" as The New York Times reported.
And given the wretched conditions that exist in American gulags, where control of prison populations through overmedication is the norm not the exception, this could also be a mitigating factor in Stanford's case. As Human Rights Watch points out, prisoners adjudged mentally ill often receive "inappropriate kinds or amounts of psychotropic medication that further impairs their ability to function."
On the other hand, Allen Stanford's high-profile, his close proximity to drug-fueled intelligence operations, decades of hastily-closed investigations into alleged security frauds and a "stand down" by the SEC "at the request of another federal agency" as The New York Times disclosed, coupled with drugs investigations that "lie buried in the paperwork" gathered by the SEC as the Houston Chronicle averred, however one cares to slice it, a drug addiction acquired in federal custody does open a new, and highly suspicious, chapter in the Stanford drama.
The maddeningly complex character of Allen Stanford's operations as the Financial Times revealed, and what role other giant banks including Bank Julius Baer, Credit Suisse and HSBC, which acted as SIB's correspondent bank for all European deposits played in the affair, may never be unraveled if he cannot stand trial.
In this respect, a permanent "inability to recall the recent past" induced by federal prison authorities may be just what the doctor ordered.
During a preliminary hearing in Houston, U.S. District Judge David Hittner ruled that Stanford, charged with orchestrating an $8 billion dollar Ponzi scheme that defrauded thousands of investors, cannot be tried until he undergoes detoxification for a drug addiction acquired after his incarceration in a federal detention facility.
Talk about a convenient turn of events!
"Nothing can be done until the medical aspect is cleared up," Hittner told defense lawyers and prosecutors during an all-day hearing that examined Stanford's mental competence to stand trial, Bloomberg News reported.
The banker's court-appointed defense team is seeking a two-year delay, citing the mountain of evidence, some two million pages at last count, they must review before the trial can proceed. Stanford's apparent inability to participate in his own defense would certainly complicate matters.
With a net worth once estimated at $2 billion, the accused fraudster was declared indigent last fall after his assets were seized and (known) accounts frozen following his 2009 arrest and indictment.
In October, U.S. District Judge Nancy Atlas ruled that Stanford and codefendants Laura Pendergest-Holt, Gilberto Lopez, Mark Kuhurt and Leroy King, the former chief regulator of the Bank of Antigua, cannot tap a $100 million Lloyds of London insurance policy to pay attorney fees.
According to the ruling, "lawyers for Lloyds had proven at a trial in August that it was likely that Stanford had committed money laundering." The court declared "that the policy's money laundering exclusion applies to justify underwriters' denial of insurance coverage at this time," Reuters reported.
Indicted eighteen months ago on 21 civil and criminal counts, including mail, wire, securities fraud and money laundering, Stanford is also suspected of running another in a long line of "full service banks" for American secret state agencies, including the CIA.
Interestingly enough, one of Stanford's early defense teams was led by none other than Robert S. Bennett, the high-powered attorney who successfully fought off prosecution for his client, Jose A. Rodriguez, the former head of the CIA's clandestine division, accused of destroying 92 torture videotapes of prisoners held at Agency "black sites."
This latest twist in the sleazy affair raise uncomfortable questions for prosecutors: just how does one become drug addicted while in federal custody?
According to Bloomberg, "three psychiatrists, one working for the government and two working for the defense, testified that Stanford's dependency on prescription anti-anxiety medication and the after-effects of a head injury he sustained in a jailhouse beating left him unfit for the trial" which was slated to begin later this month.
Victor Scarano, a defense psychiatrist testified that the banker's dependency on the anti-anxiety drug clonazepam, along with the powerful anti-depressant mirtazapine, was the result of "overmedication" by his jailers.
Scarano testified that for more than a year Stanford "has been taking 3 milligrams a day of the anti-anxiety drug clonazepam, and that a normal dose is up to 1 milligram a day for no longer than two weeks," the Houston Chronicle disclosed.
The psychiatrist told the court that "he is unable to work effectively and rationally with his attorneys in his defense against the charges."
"He is unable to focus, he's unable to keep a train of thought," Scarano testified.
A second psychiatrist, Steven Rosenblatt, hired by the government, "testified that Stanford is suffering from delirium, likely brought on by the medication."
During Thursday's hearing, Stanford's attorney Ali Fazel, told the court that his client had been assaulted while in federal custody, severely beaten and that it was prison physicians who prescribed the medications to which the accused swindler is now addicted. "It's the government that caused the problem," Fazel said.
The Independent averred this will raise "fresh and disturbing questions about the deterioration of Stanford's mental and physical health in the 18 months he has already spent behind bars."
Among the questions likely to be raised is why, for some unknown and still unexplained reason prison doctors dispensed triple the normal dose of a suite of drugs known to produce untoward side effects.
According to Wikipedia, clonazepam is used to treat epilepsy, anxiety disorder and panic disorder, and in combination with lithium and haloperidol, it is also used for the initial treatment of mania or acute psychosis.
This is certainly a curious choice for long-term treatment of a concussion. While Stanford may be a notorious huckster who believed he could do no wrong, even as he allegedly robbed investors blind, there is no evidence he suffered a psychotic break with reality. In fact, the evidence suggests quite the opposite.
Clonazepam is characterized by its "fast onset of action and high effectiveness rate and low toxicity in overdose but has drawbacks due to adverse reactions including paradoxical effects, drowsiness, and cognitive impairment."
According to scholarly literature cited by Wikipedia, "cognitive impairments can persist for at least 6 months after withdrawal of clonazepam; it is unclear whether full recovery of memory functions occurs. Other long-term effects of benzodiazepines include tolerance, a benzodiazepine dependence as well as a benzodiazepine withdrawal syndrome occurs in a third of people treated with clonazepam for longer than 4 weeks."
Common side effects include drowsiness, interference with cognitive and motor performance, irritability and aggression, psychomotor agitation, lack of motivation, loss of libido, hallucinations, short-term memory loss, and what are described as "anterograde amnesia (common with higher doses)" or, the "loss of the ability to create new memories ... leading to a partial or complete inability to recall the recent past."
The second drug dispensed to Stanford, the anti-depressant mirtazapine, is used in the treatment of depression, anxiety, obsessive-compulsive disorders and is said to "exacerbate some patients' depression or anxiety or cause suicidal ideation," Wikipedia informs us.
While "the potential for dangerous drug interactions with mirtazapine is considered to be very low," the drug may "increase the effects of ... benzodiazepines," e.g. clonazepam, the apparent drug of choice deployed by Stanford's jailers as part of his "treatment."
Attorneys and psychiatrists told the court that the accused swindler was treated for more than a year with triple the "normal dose" of a drug known for producing "paradoxical effects" including "a partial or complete inability to recall the recent past."
The question is why?
While Stanford's "overmedication" may have an innocent explanation, we cannot dismiss the possibility that someone or some entity perhaps, say an intelligence agency with decades of pharmacological knowledge derived from illicit human experiments might be interested in inducing permanent "cognitive impairment" in the dodgy banker.
A simpler explanation however, such as gross negligence on the part of his jailers cannot be ruled out. It is even quite possible, as assistant U.S. attorney Gregg Costa asserted, that Stanford "could have been faking the delirium in order to be let out of jail before facing trial" as The New York Times reported.
And given the wretched conditions that exist in American gulags, where control of prison populations through overmedication is the norm not the exception, this could also be a mitigating factor in Stanford's case. As Human Rights Watch points out, prisoners adjudged mentally ill often receive "inappropriate kinds or amounts of psychotropic medication that further impairs their ability to function."
On the other hand, Allen Stanford's high-profile, his close proximity to drug-fueled intelligence operations, decades of hastily-closed investigations into alleged security frauds and a "stand down" by the SEC "at the request of another federal agency" as The New York Times disclosed, coupled with drugs investigations that "lie buried in the paperwork" gathered by the SEC as the Houston Chronicle averred, however one cares to slice it, a drug addiction acquired in federal custody does open a new, and highly suspicious, chapter in the Stanford drama.
The maddeningly complex character of Allen Stanford's operations as the Financial Times revealed, and what role other giant banks including Bank Julius Baer, Credit Suisse and HSBC, which acted as SIB's correspondent bank for all European deposits played in the affair, may never be unraveled if he cannot stand trial.
In this respect, a permanent "inability to recall the recent past" induced by federal prison authorities may be just what the doctor ordered.
Sunday, January 2, 2011
U.S. Embassy Turned a Blind Eye as Suspected CIA Banker Allen Stanford Bilked Investors, Secret Cables Reveal
While R. Allen Stanford was happily ensconced on the Caribbean island of Antigua, allegedly bribing officials there as he expanded his banking empire, secret cables released by the whistleblowing web site WikiLeaks revealed that U.S. Embassy officials held themselves at arm's length even as they provided the accused fraudster with political cover.
As Antifascist Calling reported last summer, Stanford International Bank (SIB) and Stanford Financial Group (SFG), once conservatively valued at $50 billion, were no more legitimate than penny stock frauds or advance fee scams on the internet. To make matters worse, for years federal regulators turned a blind eye towards the bank's reckless practices.
As it turns out, so too did the U.S. Embassy.
Cablegate file 06BRIDGETOWN755, "Cricket Breakfast Serves Up First Encounter with Allen Stanford," dated 03 May 2006, revealed that "Ambassador Kramer met controversial Texan billionaire Allen Stanford for the first time at an April 21 'Legends of Cricket' breakfast in Barbados."
The confidential embassy cable reported that "Stanford bent the Ambassador's ear concerning his significant new tourism and property investments in Antigua and plans for his Caribbean Star and Caribbean Sun airlines."
The occasion for the meeting, an inadvertent encounter if the embassy's account is to be believed, was an April 21, 2006 breakfast at the Barbados Hilton.
Stanford, who went on to donate some $20 million to the England and Wales Cricket Board, attended the lavish affair in the company of Barbados Prime Minister Owen Arthur, U.S. Ambassador Mary E. Kramer, assorted sports stars and local luminaries.
The cable averred that "Allen Stanford is a controversial Texan billionaire who has made significant investments in offshore finance, aviation, and property development in Antigua and throughout the region. His companies are rumored to engage in bribery, money laundering, and political manipulation."
Rumored by whom, one might reasonably ask? An important point since this was certainly not general knowledge at the time, particularly amongst those who were being fleeced.
But rather than blowing the whistle when it could have mattered most to investors and Antiguan citizens, the Bush-appointed official took cover. "Embassy officers do not reach out to Stanford" we read, "because of the allegations of bribery and money laundering. The Ambassador managed to stay out of any one-on-one photos with Stanford during the breakfast."
Why would Kramer have done otherwise? After all, as Secretary of State Hillary Clinton piously intoned last month denouncing WikiLeaks, "this is the role our diplomats play in serving America."
A "Unique Investment Strategy"
When "Sir Allen" was arrested in 2009, the federal indictment charged that the high-flying Texan had sold more than $7 billion in fraudulent certificates of deposit and some $1.2 billion in mutual funds.
The centerpiece of SIB's "unique investment strategy" were financial instruments that were claimed to be safe, liquid and redeemable at a moment's notice.
According to a blurb on the "Sir Allen Stanford" web site, the Stanford Financial Group "provides private and institutional investors with global expertise in asset allocation strategies, investment advisory services, equity research, international private banking and trust administration, commercial banking, investment banking, merchant banking, institutional sales and trading, real estate investment and insurance."
The reality was far different, however. In fact, the majority of Group "assets" were in very illiquid real estate holdings and private accounts managed by just two individuals, Allen Stanford and his college roommate, James M. Davis, the bank's chief financial officer.
According to federal prosecutors, accounts were divided into three tiers, I, II and III with Tier III accounts representing "more than 80% of the purported total value of SIBL's investments."
"STANFORD and DAVIS" the charge sheet reads, "directed, managed, and monitored ... the Tier III investments. According to internal SIBL documents, as of June 30, 2008, these Tier III investments comprised the majority of the purported value of SIBL's investment portfolio. Approximately 50% of the purported value of Tier III (approximately $3.2 billion) included investments in artificially valued real estate and approximately 30% of the purported value of Tier III (approximately $1.6 billion) included notes on personal loans to STANFORD. STANFORD, DAVIS and others did not disclose to, and actively concealed from, investors, SGC and SIBL employees, and others the fact that approximately $4.8 billion in purported Tier III investments consisted of such artificially valued real estate and notes on personal loans to STANFORD."
A sweet deal if you're in on the fix.
Lured by "high rates that exceed those available through true certificates of deposits offered by traditional banks," thousands of investors were indelicately relieved of their life savings. Of the more than $8 billion hoovered up by the banker and his cronies, only about $500 million has been recovered.
This raises the question: where did all that money go? Did it just simply vanish into thin air, secret Stanford accounts, or perhaps, was it diverted elsewhere by the banker's silent partners in a certain three-lettered agency?
When asked during a 2009 interview by CNBC's Scott Cohn whether he had been "helpful" to U.S. authorities in Latin America, Stanford replied, "Are you talking about the CIA?" Cohn: "Well, you tell me?" Stanford: "I'm just not going to talk about that."
Stanford's reticence to discuss possible Agency connections are certainly understandable.
We do know however, that like many dubious banking ventures before it, Stanford Financial Group had powerful friends in high places, in the White House, Congress, amongst regulatory agencies and, plausibly, the CIA; all of whom tripped over themselves furnishing Stanford's "family" of companies with a watertight "roof."
The More Things "Change"
According to available evidence, why would the banker have believed his shady empire was on the brink of collapse in 2009, or that well-connected friends wouldn't come to the rescue? After all, it happened before.
Last year The New York Times disclosed that Stephen J. Korotash, an associate regional director of enforcement at the Ft. Worth, Texas office of the Securities and Exchange Commission (SEC) said the regulatory agency "stood down" their investigation "at the request of another federal agency, which he declined to name."
A curious admission all the more damning for regulators considering that suspicions, and hastily-closed investigations, have dogged the bank for the better part of two decades.
Damning perhaps, but not surprising.
Nearly a quarter century before charges were laid against Allen Stanford, the late investigative reporter Penny Lernoux recounted in her still-timely book, In Banks We Trust, a fraudulent scheme by Citibank (now Citigroup) to evade paying taxes while cooking the books and dodging "legal requirements on bank reserves, liquidity, and lending limits." And, similar to the Stanford grift, the SEC did worse than nothing.
Lernoux averred that even after a whistleblower and former bank vice president proved "conclusively" that Citibank had "systematically" violated the law, "the SEC's enforcement staff refused to take any action against the bank on the ground that its pursuit of unlawful profits accorded with 'reasonable and standard business judgement'."
Here's the kicker. Lernoux wrote that the "SEC also concluded that Citibank's management had no duty to disclose improper actions since the bank had never claimed its top officers possessed 'honesty and integrity'." Sound familiar?
Fast forward to the era of the Bush crime family and we learn that in 2006, BusinessWeek revealed that the president "bestowed on his intelligence czar ... broad authority, in the name of national security" to excuse companies from "their normal accounting and securities-disclosure obligations" if they revealed "certain top-secret defense projects."
Would such "broad authority" also cover financial institutions accused of laundering drug money for select "War on Terror" allies?
Interestingly enough, Bush's "intelligence czar" at the time, John D. Negroponte, was U.S. Ambassador in Honduras during the 1980s at the height of the Reagan administration's anticommunist jihad in Central America.
In addition to covering for the CIA as the Agency stood-up death squads in Honduras, Negroponte, as The Baltimore Sun revealed in 1995, turned a blind eye as America's "freedom fighters," the Nicaraguan Contras, financed their terrorist insurgency against the leftist Sandinista government by importing billions of dollars of cocaine into the United States with a major assist from their ideological soul-mates, the Medellín and Cali drug cartels.
Recall that during this period of intensified U.S. covert operations, the Reagan Justice Department signed a Memorandum of Understanding with the CIA. That 1982 memo, brokered between U.S. Attorney General William French Smith and CIA Director William Casey, absolved the Agency from reporting drug smuggling by their assets, the Nicaraguan Contras and Afghan mujahideen.
Leveraging their anticommunist bona fides to import massive quantities of drugs into the United States, and laundering the proceeds through a spider's web of U.S. and offshore banks including, as several investigative reports have alleged, a Stanford bank, one can only wonder whether similar cosy arrangements are in force today.
Recall also that illegal activities by institutions as diverse as Paul Helliwell's Castle Bank and Trust in the Bahamas, Frank Nugan and Michael Hand's Nugan Hand Bank in Sydney, Saudi Arabia and the Cayman Islands, or the far-flung, crooked empire of Agha Hasan Abedi's Bank of Credit and Commerce International, were all financial black holes where organized crime, drug-fueled intelligence operations and geopolitical intrigue freely intermixed.
Separated in time and geography, what all three banks had in common was their close proximity to international drug trafficking networks and the CIA, particularly in areas of acute interest to U.S. policy planners. Did Stanford International Bank have an analogous relationship with the Agency?
After all the Stanford bank, like Castle, Nugan Hand and BCCI before it had been focal points of unseemly financial practices for years. Indeed, nearly thirty years ago investigative journalist Nancy Grodin reported in CovertAction (Number 16, March 1982), that like SIB, Nugan Hand enticed prospective investors "with offers of private banking services, high interest rates (higher than anywhere else in the region), tax-free deposits and complete secrecy."
Across the decades, investigations revealed that leading figures in Castle, Nugan Hand and BCCI had actively conspired with drug traffickers to import narcotics into the United States.
Top bank officials Helliwell, Nugan, Hand and Abedi worked alongside organized crime figures and former intelligence and Pentagon officials, including a past director of the CIA. And when the chips were down, all managed to evade being held to account for the most serious charges: drug trafficking, money laundering, arms smuggling, murder, terrorism, even nuclear proliferation, precisely because such exposure would have revealed "sensitive intelligence operations."
While some might argue that in the broad scheme of things considering the depth of capitalism's economic meltdown, Stanford's alleged grift was mere chump change compared to the trillions of dollars plundered by even bigger fish.
From a parapolitical perspective however, the multiple obfuscations, smokescreens and outright falsehoods surrounding the scandal indicate this is no simple case of greed or another tawdry example of "elite deviance."
Rather, as researcher Peter Dale Scott has assiduously documented over the years, the vicissitudes of "L'affaire Stanford" may be emblematic of "continuous U.S. involvement in the global drug connection," a "global financial complex of hot money uniting prominent business ... and government as well as underworld figures" for purposes of "achieving and maintaining global American dominance."
Drug Links Covered-Up
While Ambassador Kramer may have avoided having her photo snapped with the accused fraudster, her rather pedestrian concerns pale in comparison to the fact that Stanford has been the subject of multiple drugs investigations over a 20-year period that have all been scrupulously covered-up.
Indeed, years before the federal government ran SIB to ground, earlier probes, including those investigating drug-money laundering during the Iran-Contra period were killed.
Stanford's Montserrat-based Guardian International Bank, a suspected conduit for Contra drug funds, short-circuited investigators when it pulled-up stakes, surrendered its banking license and left the island.
By 1986, evidence emerged that top Contra officials and the Agency enjoyed cosy ties with both Pablo Escobar and the Orejuela brothers, respective kingpins of the Medellín and Cali drug cartels.
Under pressure from the Reagan administration however, Congress and corporate media buried the drug angle to the investigation, as Consortium News journalist Robert Parry has documented in a series of groundbreaking reports.
After his departure from Montserrat under a cloud, the banker trained his sights on Antigua and Barbuda where he developed a close relationship with former prime minister Lester Bird.
The Independent reported that during the course of a joint Scotland Yard-FBI investigation, the bank "was suspected of laundering drug money from the notorious Medellin and Cali drug cartels run by Pablo Escobar and the Orejuela brothers."
"Under the Bird family leadership" The Independent disclosed, "the island was widely regarded as one of the most corrupt in the Caribbean, with well-documented links to arms and drug smuggling and money laundering."
The former FBI agent who led the Guardian probe, Ross Gaffney, told The Independent "we suspected that Stanford's bank was involved in money laundering." Gaffney said that even after Guardian closed, the FBI "continued to take an interest in Stanford and set up a second inquiry into that bank after receiving intelligence that it continued to launder money for the Medellin and Cali cartels."
The former federal agent said, "We had hard intelligence about what he was doing and we began to develop it" but that investigation died or more likely, was deep-sixed, by officials higher-up the food chain.
According to The Observer, a second FBI source "confirmed the agency was looking at links to international drug gangs as part of the huge investigation into Stanford's banking activities."
Other sources "in the US Drug Enforcement Administration" The Observer reported, "also confirmed that while the investigations into Stanford's affairs were 'with the FBI and Securities Exchange Commission, there may well have been a trail connecting his Mexican affairs to narco-trafficking interests'."
But even after the stench of Iran-Contra faded from the headlines, drug probes targeting the bank continued well into the 1990s. The Houston Chronicle reported that according to court documents "operatives of the Juarez cartel began opening accounts at Stanford's Antigua-based bank in an effort to launder money amassed under one of Mexico's most vicious drug lords, Amado Carrillo Fuentes."
"Together," the Chronicle disclosed, "they used Stanford International Bank to open 10 accounts and deposit $3 million--a small sliver of the cartel's fortunes but enough to pique authorities' interest."
Despite long-running investigations, federal sources told the Chronicle, "any alleged Stanford connection to drug cartels and their money could lie buried in the paperwork gathered for the Security and Exchange Commission's civil inquiry."
Federal officials claimed, despite probes that resulted in stiff fines for illicit practices by other U.S. banks including, most recently, Wachovia, as Bloomberg Markets magazine reported, that tracing drug profits laundered through offshore banks like Stanford's "is difficult to document."
That is, acutely "difficult" if investigators are ordered to look away, and evidence suggests they were. How else would one interpret the statement by The Observer's DEA source who told the British newspaper, "I think we'll find that any possible drug-related trail and SEC priorities are not all in the same frame."
When the scandal broke, Cablegate file 09BRIDGETOWN114, 18 February 2009, "Antigua: Upheaval on the Eve of Elections," informs us that the 17 February announcement of new parliamentary elections "was almost immediately overshadowed by an announcement by the Securities and Exchange Commission of action being taken against U.S.-Antiguan citizen Sir Allen Stanford for 'massive, on-going fraud'."
The Embassy informed the State Department that "local fears over Stanford indictment have led to a run on the Stanford Financial Group's subsidiary the Bank of Antigua, with depositors lining up for an hour or more to withdrawal their money."
As reported above, through a series of maneuvers and what were alleged to be illicit payments to former Antiguan Prime Minister Lester Bird, Stanford set up shop on the Caribbean island in 1990, and gobbled up prime real estate, acquired dual citizenship and a knighthood, and eventually took control of the Bank of Antigua in a highly-dubious "reorganization."
The ripples from the indictment spread like a rogue wave across Antigua and the Eastern Caribbean. Antiguan officials, and the U.S. Embassy, were concerned that once the depth of the fraud sank in, "unrest" would follow in its wake.
Shortly after that 2009 embassy cable, The Guardian, reported that an investigation by the Antiguan government uncovered "large payments ... in Isle of Man bank accounts controlled by Antiguan politicians."
According "to documents seen by The Guardian, HSBC bank, in the Isle of Man, accepted $3.2m (£2.3m) on behalf of Asot Michael, once chief of staff to the former Antigua prime minister Lester Bird."
"The cash under investigation" the British newspaper disclosed, "came via an Israeli businessman, Bruce Rappaport, who is alleged to have diverted Antiguan funds into his own pocket while making payments to local politicians."
HSBC denied all wrongdoing and "would publicly neither confirm nor deny information about individual Manx accounts," saying the bank "has robust anti-money laundering policies and clearly defined policies and procedures concerning politically exposed persons."
"It is unclear" the Embassy averred, "if either party will try hard to use the Stanford indictment as an election issue--Stanford amassed his fortune under an ALP [Antiguan Labor Party] government, and was knighted by a UPP [United Progressive Party] government, so all hands are likely equally dirty."
"Many worry that these issues [crime, fraud and violence] could not only spell disaster for the UPP, but for the country's economy as a whole, leading to a severe economic depression and intolerable unemployment creating more violence and a cycle of less tourism, more unemployment and more crime."
Curiously, while corporate media have focused on Stanford's lavish lifestyle, girlfriends and upscale island properties, nary a word has been whispered about the banker's alleged links to notorious drug cartels or to some of the CIA's dirtiest operations.
Even at this late date, it appears that the dodgy banker has well-connected friends who want to bury this angle of a scandal that has defrauded thousands and wrecked entire economies.
The question is, why?
Follow the Money, but Where?
Investors in the Stanford Ponzi scheme have lost their shirts, and its likely they'll never recover even a fraction of their losses.
"In the past two years" the Houston Chronicle reported, "Stanford himself has ceased to be the story. The most amazing aspect of the Stanford saga is how little money has been recovered. As the court-appointed receiver has chased assets around the globe, he's found Stanford's accounts stunningly empty."
During the investigation that led to the indictments, auditors learned that that funds were moved through Stanford-controlled accounts to offshore banks, including HSBC London; Bank Julius Baer, Zurich; Credit Suisse, United Kingdom; SG Private Banking, Geneva; Banque Franck Galland & Cie S.A., Geneva; RBS Coutts, Zurich; Coutts Bank Von Ernst, Geneva and Toronto Dominion Bank, Canada; banks which have figured in past money laundering or tax-avoidance scandals. In all, 28 numbered accounts were listed by prosecutors, veritable black holes that escaped regulatory scrutiny.
Nearly a decade ago, investigative journalist Stephen Bender wrote in Z Magazine that "an understanding of the drug trade's machinations is incomplete without an analysis of the crucial role transnational banks play in the laundering of drug proceeds."
The House Permanent Subcommittee on Investigations reported back in 2000: "Despite increasing international attention and stronger anti-money laundering controls, some current estimates are that $500 billion to $1 trillion in criminal proceeds are laundered through banks worldwide each year, with about half of that amount moved through United States banks."
Recall that at the height of capitalism's current global economic meltdown, Antonio Maria Costa, the director of the United Nations Office on Drugs and Crime told The Observer that "drugs money worth billions of dollars kept the financial system afloat at the height of the global crisis."
Costa told the British newspaper he saw substantial evidence that that proceeds from the illicit trade were "the only liquid investment capital" available to some banks on the brink of collapse last year and that "a majority of the $352bn (£216bn) of drugs profits was absorbed into the economic system as a result."
The UN drugs chief said that in "many instances, the money from drugs was the only liquid investment capital." And with markets tanking and major bank failures a near daily occurrence, "liquidity was the banking system's main problem and hence liquid capital became an important factor."
If only a tiny portion of these illegal proceeds were siphoned-off by secret state agencies, including the CIA, funds available for covert operations and other dubious purposes, such as suborning treason amongst foreign officials to spy on their own governments, as WikiLeaks diplomatic cables revealed, the amounts would be staggering.
Bender informed us that one conduit for laundering drug profits is the private banking system.
"U.S.-based private banks" Bender wrote, "operate in a regulatory twilight zone enabling the laundering of drug profits as confirmed by the GAO. Private banks are 'not subject to the Bank Secrecy Act,' thus exempting banks from complying with 'specific anti-money-laundering provisions...such as the one requiring that suspicious transactions be reported to U.S. authorities'."
And with "international private banking" a prominent selling-point of the Stanford firm's dark web, one might reasonably surmise that drug traffickers would also view this regulatory black hole in the most favourable light.
Indeed, this "twilight zone" was precisely where Allen Stanford operated. As The Miami Herald reported, state and federal regulators allowed SIB to move "vast amounts of money offshore--without reporting a penny to regulators."
SIB's arrangements with the Florida Office of Financial Regulation were so lax that the company "was allowed to sell hundreds of millions in bank notes without allowing regulators to check for fraud." Indeed, Florida regulators granted Stanford's bank "sweeping powers never given to a private company."
But what if that "private company" were handed an exemption from "their normal accounting and securities-disclosure obligations" as BusinessWeek reported, on grounds of "national security," and investigations into that firm were squashed "at the request of another federal agency," wouldn't this also suggest that Stanford's Ponzi scheme may have also been a cover for ongoing U.S. intelligence operations?
And once the scope of the fraud became too large to ignore, it wouldn't be a stretch to conclude that the Agency decided to cut their losses and "move on"?
As investigative reporters Jonathan Beaty and S.C. Gwynne uncovered in their stunning exposé, The Outlaw Bank, it wouldn't be the first time.
For years the CIA had concealed their close involvement with the crooked Bank of Credit and Commerce International (BCCI), tied to everything from drug trafficking to money laundering and from nuclear proliferation to the financing of terrorist groups, including those that morphed into Al-Qaeda.
And when they "came clean" to Treasury Department officials in a report that remains classified to this day, "suddenly, and for no apparent reason," Beaty and Gwynne wrote, Treasury "lost all interest in BCCI."
Perhaps for similar reasons too, in the years ahead we'll find that "any alleged Stanford connection to drug cartels and their money could lie buried in the paperwork gathered for the Security and Exchange Commission's civil inquiry," where its likely to stay buried.
As Antifascist Calling reported last summer, Stanford International Bank (SIB) and Stanford Financial Group (SFG), once conservatively valued at $50 billion, were no more legitimate than penny stock frauds or advance fee scams on the internet. To make matters worse, for years federal regulators turned a blind eye towards the bank's reckless practices.
As it turns out, so too did the U.S. Embassy.
Cablegate file 06BRIDGETOWN755, "Cricket Breakfast Serves Up First Encounter with Allen Stanford," dated 03 May 2006, revealed that "Ambassador Kramer met controversial Texan billionaire Allen Stanford for the first time at an April 21 'Legends of Cricket' breakfast in Barbados."
The confidential embassy cable reported that "Stanford bent the Ambassador's ear concerning his significant new tourism and property investments in Antigua and plans for his Caribbean Star and Caribbean Sun airlines."
The occasion for the meeting, an inadvertent encounter if the embassy's account is to be believed, was an April 21, 2006 breakfast at the Barbados Hilton.
Stanford, who went on to donate some $20 million to the England and Wales Cricket Board, attended the lavish affair in the company of Barbados Prime Minister Owen Arthur, U.S. Ambassador Mary E. Kramer, assorted sports stars and local luminaries.
The cable averred that "Allen Stanford is a controversial Texan billionaire who has made significant investments in offshore finance, aviation, and property development in Antigua and throughout the region. His companies are rumored to engage in bribery, money laundering, and political manipulation."
Rumored by whom, one might reasonably ask? An important point since this was certainly not general knowledge at the time, particularly amongst those who were being fleeced.
But rather than blowing the whistle when it could have mattered most to investors and Antiguan citizens, the Bush-appointed official took cover. "Embassy officers do not reach out to Stanford" we read, "because of the allegations of bribery and money laundering. The Ambassador managed to stay out of any one-on-one photos with Stanford during the breakfast."
Why would Kramer have done otherwise? After all, as Secretary of State Hillary Clinton piously intoned last month denouncing WikiLeaks, "this is the role our diplomats play in serving America."
A "Unique Investment Strategy"
When "Sir Allen" was arrested in 2009, the federal indictment charged that the high-flying Texan had sold more than $7 billion in fraudulent certificates of deposit and some $1.2 billion in mutual funds.
The centerpiece of SIB's "unique investment strategy" were financial instruments that were claimed to be safe, liquid and redeemable at a moment's notice.
According to a blurb on the "Sir Allen Stanford" web site, the Stanford Financial Group "provides private and institutional investors with global expertise in asset allocation strategies, investment advisory services, equity research, international private banking and trust administration, commercial banking, investment banking, merchant banking, institutional sales and trading, real estate investment and insurance."
The reality was far different, however. In fact, the majority of Group "assets" were in very illiquid real estate holdings and private accounts managed by just two individuals, Allen Stanford and his college roommate, James M. Davis, the bank's chief financial officer.
According to federal prosecutors, accounts were divided into three tiers, I, II and III with Tier III accounts representing "more than 80% of the purported total value of SIBL's investments."
"STANFORD and DAVIS" the charge sheet reads, "directed, managed, and monitored ... the Tier III investments. According to internal SIBL documents, as of June 30, 2008, these Tier III investments comprised the majority of the purported value of SIBL's investment portfolio. Approximately 50% of the purported value of Tier III (approximately $3.2 billion) included investments in artificially valued real estate and approximately 30% of the purported value of Tier III (approximately $1.6 billion) included notes on personal loans to STANFORD. STANFORD, DAVIS and others did not disclose to, and actively concealed from, investors, SGC and SIBL employees, and others the fact that approximately $4.8 billion in purported Tier III investments consisted of such artificially valued real estate and notes on personal loans to STANFORD."
A sweet deal if you're in on the fix.
Lured by "high rates that exceed those available through true certificates of deposits offered by traditional banks," thousands of investors were indelicately relieved of their life savings. Of the more than $8 billion hoovered up by the banker and his cronies, only about $500 million has been recovered.
This raises the question: where did all that money go? Did it just simply vanish into thin air, secret Stanford accounts, or perhaps, was it diverted elsewhere by the banker's silent partners in a certain three-lettered agency?
When asked during a 2009 interview by CNBC's Scott Cohn whether he had been "helpful" to U.S. authorities in Latin America, Stanford replied, "Are you talking about the CIA?" Cohn: "Well, you tell me?" Stanford: "I'm just not going to talk about that."
Stanford's reticence to discuss possible Agency connections are certainly understandable.
We do know however, that like many dubious banking ventures before it, Stanford Financial Group had powerful friends in high places, in the White House, Congress, amongst regulatory agencies and, plausibly, the CIA; all of whom tripped over themselves furnishing Stanford's "family" of companies with a watertight "roof."
The More Things "Change"
According to available evidence, why would the banker have believed his shady empire was on the brink of collapse in 2009, or that well-connected friends wouldn't come to the rescue? After all, it happened before.
Last year The New York Times disclosed that Stephen J. Korotash, an associate regional director of enforcement at the Ft. Worth, Texas office of the Securities and Exchange Commission (SEC) said the regulatory agency "stood down" their investigation "at the request of another federal agency, which he declined to name."
A curious admission all the more damning for regulators considering that suspicions, and hastily-closed investigations, have dogged the bank for the better part of two decades.
Damning perhaps, but not surprising.
Nearly a quarter century before charges were laid against Allen Stanford, the late investigative reporter Penny Lernoux recounted in her still-timely book, In Banks We Trust, a fraudulent scheme by Citibank (now Citigroup) to evade paying taxes while cooking the books and dodging "legal requirements on bank reserves, liquidity, and lending limits." And, similar to the Stanford grift, the SEC did worse than nothing.
Lernoux averred that even after a whistleblower and former bank vice president proved "conclusively" that Citibank had "systematically" violated the law, "the SEC's enforcement staff refused to take any action against the bank on the ground that its pursuit of unlawful profits accorded with 'reasonable and standard business judgement'."
Here's the kicker. Lernoux wrote that the "SEC also concluded that Citibank's management had no duty to disclose improper actions since the bank had never claimed its top officers possessed 'honesty and integrity'." Sound familiar?
Fast forward to the era of the Bush crime family and we learn that in 2006, BusinessWeek revealed that the president "bestowed on his intelligence czar ... broad authority, in the name of national security" to excuse companies from "their normal accounting and securities-disclosure obligations" if they revealed "certain top-secret defense projects."
Would such "broad authority" also cover financial institutions accused of laundering drug money for select "War on Terror" allies?
Interestingly enough, Bush's "intelligence czar" at the time, John D. Negroponte, was U.S. Ambassador in Honduras during the 1980s at the height of the Reagan administration's anticommunist jihad in Central America.
In addition to covering for the CIA as the Agency stood-up death squads in Honduras, Negroponte, as The Baltimore Sun revealed in 1995, turned a blind eye as America's "freedom fighters," the Nicaraguan Contras, financed their terrorist insurgency against the leftist Sandinista government by importing billions of dollars of cocaine into the United States with a major assist from their ideological soul-mates, the Medellín and Cali drug cartels.
Recall that during this period of intensified U.S. covert operations, the Reagan Justice Department signed a Memorandum of Understanding with the CIA. That 1982 memo, brokered between U.S. Attorney General William French Smith and CIA Director William Casey, absolved the Agency from reporting drug smuggling by their assets, the Nicaraguan Contras and Afghan mujahideen.
Leveraging their anticommunist bona fides to import massive quantities of drugs into the United States, and laundering the proceeds through a spider's web of U.S. and offshore banks including, as several investigative reports have alleged, a Stanford bank, one can only wonder whether similar cosy arrangements are in force today.
Recall also that illegal activities by institutions as diverse as Paul Helliwell's Castle Bank and Trust in the Bahamas, Frank Nugan and Michael Hand's Nugan Hand Bank in Sydney, Saudi Arabia and the Cayman Islands, or the far-flung, crooked empire of Agha Hasan Abedi's Bank of Credit and Commerce International, were all financial black holes where organized crime, drug-fueled intelligence operations and geopolitical intrigue freely intermixed.
Separated in time and geography, what all three banks had in common was their close proximity to international drug trafficking networks and the CIA, particularly in areas of acute interest to U.S. policy planners. Did Stanford International Bank have an analogous relationship with the Agency?
After all the Stanford bank, like Castle, Nugan Hand and BCCI before it had been focal points of unseemly financial practices for years. Indeed, nearly thirty years ago investigative journalist Nancy Grodin reported in CovertAction (Number 16, March 1982), that like SIB, Nugan Hand enticed prospective investors "with offers of private banking services, high interest rates (higher than anywhere else in the region), tax-free deposits and complete secrecy."
Across the decades, investigations revealed that leading figures in Castle, Nugan Hand and BCCI had actively conspired with drug traffickers to import narcotics into the United States.
Top bank officials Helliwell, Nugan, Hand and Abedi worked alongside organized crime figures and former intelligence and Pentagon officials, including a past director of the CIA. And when the chips were down, all managed to evade being held to account for the most serious charges: drug trafficking, money laundering, arms smuggling, murder, terrorism, even nuclear proliferation, precisely because such exposure would have revealed "sensitive intelligence operations."
While some might argue that in the broad scheme of things considering the depth of capitalism's economic meltdown, Stanford's alleged grift was mere chump change compared to the trillions of dollars plundered by even bigger fish.
From a parapolitical perspective however, the multiple obfuscations, smokescreens and outright falsehoods surrounding the scandal indicate this is no simple case of greed or another tawdry example of "elite deviance."
Rather, as researcher Peter Dale Scott has assiduously documented over the years, the vicissitudes of "L'affaire Stanford" may be emblematic of "continuous U.S. involvement in the global drug connection," a "global financial complex of hot money uniting prominent business ... and government as well as underworld figures" for purposes of "achieving and maintaining global American dominance."
Drug Links Covered-Up
While Ambassador Kramer may have avoided having her photo snapped with the accused fraudster, her rather pedestrian concerns pale in comparison to the fact that Stanford has been the subject of multiple drugs investigations over a 20-year period that have all been scrupulously covered-up.
Indeed, years before the federal government ran SIB to ground, earlier probes, including those investigating drug-money laundering during the Iran-Contra period were killed.
Stanford's Montserrat-based Guardian International Bank, a suspected conduit for Contra drug funds, short-circuited investigators when it pulled-up stakes, surrendered its banking license and left the island.
By 1986, evidence emerged that top Contra officials and the Agency enjoyed cosy ties with both Pablo Escobar and the Orejuela brothers, respective kingpins of the Medellín and Cali drug cartels.
Under pressure from the Reagan administration however, Congress and corporate media buried the drug angle to the investigation, as Consortium News journalist Robert Parry has documented in a series of groundbreaking reports.
After his departure from Montserrat under a cloud, the banker trained his sights on Antigua and Barbuda where he developed a close relationship with former prime minister Lester Bird.
The Independent reported that during the course of a joint Scotland Yard-FBI investigation, the bank "was suspected of laundering drug money from the notorious Medellin and Cali drug cartels run by Pablo Escobar and the Orejuela brothers."
"Under the Bird family leadership" The Independent disclosed, "the island was widely regarded as one of the most corrupt in the Caribbean, with well-documented links to arms and drug smuggling and money laundering."
The former FBI agent who led the Guardian probe, Ross Gaffney, told The Independent "we suspected that Stanford's bank was involved in money laundering." Gaffney said that even after Guardian closed, the FBI "continued to take an interest in Stanford and set up a second inquiry into that bank after receiving intelligence that it continued to launder money for the Medellin and Cali cartels."
The former federal agent said, "We had hard intelligence about what he was doing and we began to develop it" but that investigation died or more likely, was deep-sixed, by officials higher-up the food chain.
According to The Observer, a second FBI source "confirmed the agency was looking at links to international drug gangs as part of the huge investigation into Stanford's banking activities."
Other sources "in the US Drug Enforcement Administration" The Observer reported, "also confirmed that while the investigations into Stanford's affairs were 'with the FBI and Securities Exchange Commission, there may well have been a trail connecting his Mexican affairs to narco-trafficking interests'."
But even after the stench of Iran-Contra faded from the headlines, drug probes targeting the bank continued well into the 1990s. The Houston Chronicle reported that according to court documents "operatives of the Juarez cartel began opening accounts at Stanford's Antigua-based bank in an effort to launder money amassed under one of Mexico's most vicious drug lords, Amado Carrillo Fuentes."
"Together," the Chronicle disclosed, "they used Stanford International Bank to open 10 accounts and deposit $3 million--a small sliver of the cartel's fortunes but enough to pique authorities' interest."
Despite long-running investigations, federal sources told the Chronicle, "any alleged Stanford connection to drug cartels and their money could lie buried in the paperwork gathered for the Security and Exchange Commission's civil inquiry."
Federal officials claimed, despite probes that resulted in stiff fines for illicit practices by other U.S. banks including, most recently, Wachovia, as Bloomberg Markets magazine reported, that tracing drug profits laundered through offshore banks like Stanford's "is difficult to document."
That is, acutely "difficult" if investigators are ordered to look away, and evidence suggests they were. How else would one interpret the statement by The Observer's DEA source who told the British newspaper, "I think we'll find that any possible drug-related trail and SEC priorities are not all in the same frame."
When the scandal broke, Cablegate file 09BRIDGETOWN114, 18 February 2009, "Antigua: Upheaval on the Eve of Elections," informs us that the 17 February announcement of new parliamentary elections "was almost immediately overshadowed by an announcement by the Securities and Exchange Commission of action being taken against U.S.-Antiguan citizen Sir Allen Stanford for 'massive, on-going fraud'."
The Embassy informed the State Department that "local fears over Stanford indictment have led to a run on the Stanford Financial Group's subsidiary the Bank of Antigua, with depositors lining up for an hour or more to withdrawal their money."
As reported above, through a series of maneuvers and what were alleged to be illicit payments to former Antiguan Prime Minister Lester Bird, Stanford set up shop on the Caribbean island in 1990, and gobbled up prime real estate, acquired dual citizenship and a knighthood, and eventually took control of the Bank of Antigua in a highly-dubious "reorganization."
The ripples from the indictment spread like a rogue wave across Antigua and the Eastern Caribbean. Antiguan officials, and the U.S. Embassy, were concerned that once the depth of the fraud sank in, "unrest" would follow in its wake.
Shortly after that 2009 embassy cable, The Guardian, reported that an investigation by the Antiguan government uncovered "large payments ... in Isle of Man bank accounts controlled by Antiguan politicians."
According "to documents seen by The Guardian, HSBC bank, in the Isle of Man, accepted $3.2m (£2.3m) on behalf of Asot Michael, once chief of staff to the former Antigua prime minister Lester Bird."
"The cash under investigation" the British newspaper disclosed, "came via an Israeli businessman, Bruce Rappaport, who is alleged to have diverted Antiguan funds into his own pocket while making payments to local politicians."
HSBC denied all wrongdoing and "would publicly neither confirm nor deny information about individual Manx accounts," saying the bank "has robust anti-money laundering policies and clearly defined policies and procedures concerning politically exposed persons."
"It is unclear" the Embassy averred, "if either party will try hard to use the Stanford indictment as an election issue--Stanford amassed his fortune under an ALP [Antiguan Labor Party] government, and was knighted by a UPP [United Progressive Party] government, so all hands are likely equally dirty."
"Many worry that these issues [crime, fraud and violence] could not only spell disaster for the UPP, but for the country's economy as a whole, leading to a severe economic depression and intolerable unemployment creating more violence and a cycle of less tourism, more unemployment and more crime."
Curiously, while corporate media have focused on Stanford's lavish lifestyle, girlfriends and upscale island properties, nary a word has been whispered about the banker's alleged links to notorious drug cartels or to some of the CIA's dirtiest operations.
Even at this late date, it appears that the dodgy banker has well-connected friends who want to bury this angle of a scandal that has defrauded thousands and wrecked entire economies.
The question is, why?
Follow the Money, but Where?
Investors in the Stanford Ponzi scheme have lost their shirts, and its likely they'll never recover even a fraction of their losses.
"In the past two years" the Houston Chronicle reported, "Stanford himself has ceased to be the story. The most amazing aspect of the Stanford saga is how little money has been recovered. As the court-appointed receiver has chased assets around the globe, he's found Stanford's accounts stunningly empty."
During the investigation that led to the indictments, auditors learned that that funds were moved through Stanford-controlled accounts to offshore banks, including HSBC London; Bank Julius Baer, Zurich; Credit Suisse, United Kingdom; SG Private Banking, Geneva; Banque Franck Galland & Cie S.A., Geneva; RBS Coutts, Zurich; Coutts Bank Von Ernst, Geneva and Toronto Dominion Bank, Canada; banks which have figured in past money laundering or tax-avoidance scandals. In all, 28 numbered accounts were listed by prosecutors, veritable black holes that escaped regulatory scrutiny.
Nearly a decade ago, investigative journalist Stephen Bender wrote in Z Magazine that "an understanding of the drug trade's machinations is incomplete without an analysis of the crucial role transnational banks play in the laundering of drug proceeds."
The House Permanent Subcommittee on Investigations reported back in 2000: "Despite increasing international attention and stronger anti-money laundering controls, some current estimates are that $500 billion to $1 trillion in criminal proceeds are laundered through banks worldwide each year, with about half of that amount moved through United States banks."
Recall that at the height of capitalism's current global economic meltdown, Antonio Maria Costa, the director of the United Nations Office on Drugs and Crime told The Observer that "drugs money worth billions of dollars kept the financial system afloat at the height of the global crisis."
Costa told the British newspaper he saw substantial evidence that that proceeds from the illicit trade were "the only liquid investment capital" available to some banks on the brink of collapse last year and that "a majority of the $352bn (£216bn) of drugs profits was absorbed into the economic system as a result."
The UN drugs chief said that in "many instances, the money from drugs was the only liquid investment capital." And with markets tanking and major bank failures a near daily occurrence, "liquidity was the banking system's main problem and hence liquid capital became an important factor."
If only a tiny portion of these illegal proceeds were siphoned-off by secret state agencies, including the CIA, funds available for covert operations and other dubious purposes, such as suborning treason amongst foreign officials to spy on their own governments, as WikiLeaks diplomatic cables revealed, the amounts would be staggering.
Bender informed us that one conduit for laundering drug profits is the private banking system.
"U.S.-based private banks" Bender wrote, "operate in a regulatory twilight zone enabling the laundering of drug profits as confirmed by the GAO. Private banks are 'not subject to the Bank Secrecy Act,' thus exempting banks from complying with 'specific anti-money-laundering provisions...such as the one requiring that suspicious transactions be reported to U.S. authorities'."
And with "international private banking" a prominent selling-point of the Stanford firm's dark web, one might reasonably surmise that drug traffickers would also view this regulatory black hole in the most favourable light.
Indeed, this "twilight zone" was precisely where Allen Stanford operated. As The Miami Herald reported, state and federal regulators allowed SIB to move "vast amounts of money offshore--without reporting a penny to regulators."
SIB's arrangements with the Florida Office of Financial Regulation were so lax that the company "was allowed to sell hundreds of millions in bank notes without allowing regulators to check for fraud." Indeed, Florida regulators granted Stanford's bank "sweeping powers never given to a private company."
But what if that "private company" were handed an exemption from "their normal accounting and securities-disclosure obligations" as BusinessWeek reported, on grounds of "national security," and investigations into that firm were squashed "at the request of another federal agency," wouldn't this also suggest that Stanford's Ponzi scheme may have also been a cover for ongoing U.S. intelligence operations?
And once the scope of the fraud became too large to ignore, it wouldn't be a stretch to conclude that the Agency decided to cut their losses and "move on"?
As investigative reporters Jonathan Beaty and S.C. Gwynne uncovered in their stunning exposé, The Outlaw Bank, it wouldn't be the first time.
For years the CIA had concealed their close involvement with the crooked Bank of Credit and Commerce International (BCCI), tied to everything from drug trafficking to money laundering and from nuclear proliferation to the financing of terrorist groups, including those that morphed into Al-Qaeda.
And when they "came clean" to Treasury Department officials in a report that remains classified to this day, "suddenly, and for no apparent reason," Beaty and Gwynne wrote, Treasury "lost all interest in BCCI."
Perhaps for similar reasons too, in the years ahead we'll find that "any alleged Stanford connection to drug cartels and their money could lie buried in the paperwork gathered for the Security and Exchange Commission's civil inquiry," where its likely to stay buried.
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