'Ethnic
Cleansing' in the USA
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Former
Bush Assistant Secretary for HUD Reveals "Ethnic Cleansing"
Connected
to CIA Drug Dealing in Los Angeles
Government
Spends Millions in Campaign to Silence Former Wall Street Banker, Cover
Up Connections to Dark Alliance Stories & CIA Inspector General
Report on Drug Trafficking
Special to From The Wilderness
by
Contributing
Editor, Catherine Austin Fitts
I was ten years old when the combined
action of HUD housing investment and heroin trafficking destroyed my
West Philadelphia neighborhood. The combined real estate and drug play
destroyed the equity in our homes and businesses. Many of us left. Those
who stayed were embroiled in the increasing stress of what happens as
neighborhoods deteriorate into crime and decay. I decided that I would
learn how money worked. I was too young to understand fully how the
combination of HUD investment and drugs could move control and ownership
from the many people who lived in a community to a few people who lived
outside the community. -- C.A.F.
* * * * *
I'm an investment banker. In the eighties
I was a Managing Director and member of the Board of Directors at the
Wall Street investment bank Dillon, Read & Co., Inc. I managed the
firm's large municipal and government clients. My projects included
the financing of billions of dollars of improvements in New York City's
subway, bus and commuter rail systems. I also organized the financing
for hundreds of millions in renovations to the infrastructures of New
York and New Jersey. I regularly handled hundreds of millions of dollars
in transactions.
I also helped to make tens of millions
of dollars in profits for my firm and I raised tens of thousands of
dollars for the George Bush Presidential campaign in 1988. Nicholas
Brady, who became George Bush's Treasury Secretary, had been my partner
and boss at Dillon Read.
I was a Wall Street insider and a political
insider - or so I thought. I was successful at Dillon Read because I
created new investment models that helped ordinary people while making
a profit. I thought "outside the box." When Iran-Contra came
and went I was oblivious. I had no idea about the drugs. It never entered
my mind. Yet today I am convinced that the illegal drug trade, the enormous
cheap capital it generates, and the CIA's role as enforcer/protector
for the profits of that trade is a dominant factor in the economy of
this country. It is a factor, which is destroying the entire American
culture and is utterly out of control. As an investor and banker and
as a former Cabinet level appointee, I tell you this is true.
My evolution came slowly. In 1989 I was
named Assistant Secretary of Housing-FHA Commissioner under Housing
and Urban Development Secretary Jack Kemp. I managed $300 billion of
mortgage insurance, mortgages and properties of the Federal Housing
Administration and, as Commissioner, I advised the Secretary on another
$1 trillion of mortgage financing. I was fired by Jack Kemp in late
1990 because I would not go along with the questionable political practices,
which seem to be built into HUD's machinery and purpose. But still I
did not see the bigger picture.
In 1990, after leaving HUD, I started my
own investment company, The Hamilton Securities Group, and I devised
new and creative ways to save taxpayers billions of dollars. In 1993,
Hamilton secured contracts with HUD through Secretary Henry Cisneros.
Hamilton saved taxpayers billions of dollars by taking defaulted HUD
housing mortgages, repackaging them and auctioning them on the private
market. Hamilton began putting wealth back into inner city projects
by hiring women living in HUD housing and teaching them how to use computers
to build data bases on how money works in 63,000 neighborhoods throughout
America. Hamilton started a data processing company with these women
in a HUD project (Edgewood Terrace) in Washington. The women who lived
there earned stock in the company. The company made money and proved
the concept of what on-line access in communities could do to build
jobs and businesses. We used the success of that effort to persuade
HUD to fund computer learning centers in other housing projects. Hamilton
was extremely successful. We made millions and we saved the government
billions.
Fulfilling my childhood dream, Hamilton
also created new software and money management tools, which were, for
the first time ever, able to map down to the neighborhood, exactly how
HUD and other federal money worked, who profited when loans defaulted,
and how money came into or left a community. For example, we were often
able to see where HUD was spending $100-250,000 per unit on apartment
buildings when there was single family housing available within walking
distance for $25-50,000.
Secretary Cisneros had been extremely supportive
of our work. We had unrestricted access to rich quantities of government
financial data that was supposedly public but hard to understand. We
were translating that into useable information so that people in any
community could see how the money flowed through their neighborhood.
We helped HUD get increasing amounts of data up on its web site. An
unforeseen side effect for the women at Edgewood, and for Hamilton,
was that by seeing clearly how the clean money worked, we also began
to see how the dirty money worked.
As an investor for more than twenty years,
I believed that it was actually more profitable for people to own their
own neighborhoods and businesses and to know exactly how the money worked.
The MONEY MAPS we made were so simple to understand that they looked
like comic books.
As it turns out we mapped a great deal
more than we knew.
In 1996, as reporter Gary Webb was busy
writing a series of stories connecting CIA and the Contras to the crack
cocaine epidemic in Los Angeles, I was busy using the money maps in
a way that would help people move people from government subsidies to
home ownership and entrepreneurship.
I was also advocating that U.S. government
investment in communities should be subject to the same public disclosure
rules that private companies are obligated to follow under the Securities
and Exchange Commission Rules. If you are a shareholder in a company,
that company is using your money. The law requires that they use your
money legally and that they do their best to protect your money and
make you more. To earn money, and to do so in a fair, honest and competitive
way, federal and state laws require companies to report performance
and key transactions to you, the shareholder. Every citizen is a shareholder
in the government. If governments worked like they require corporations
to work, they would be required to report to you, in the sunshine, exactly
how the money was working, in your neighborhood, and you could either
approve - or disapprove of the fairness and effectiveness of that, based
upon your understanding of your own needs. That is very threatening
to those who have used agencies like HUD as a trough to pay off political
cronies.
On August 1, 1996, I gave the keynote address
at a Neighborhood Networks conference in Boston, Massachusetts
to 500 owners, managers and tenants in private HUD housing. As part
of the speech I showed a slide of one of our money maps of Los Angeles.
As I put the slide up I made the following statement:
“One of the products that has been
most successful for the first data servicing sites, Edgewood Technology
Services, has been "geo-coding" databases and mapping. I wanted
to show you this map; it's up on the World Wide Web. This is a map of
Los Angeles. Can anyone figure out where south central LA is from looking
at where the HUD properties are on this map? This is the same thing
as the Washington DC map I showed earlier. The little red dots are single
family properties that were financed by (now) defaulted HUD-held
mortgages. This map was geo-coded and designed and programmed by
a woman who, four months before, had been on unemployment compensation
and is a tenant in HUD housing"
If you compare this map with the fact that
Freeway Ricky Ross - the crack cocaine kingpin described in Gary Webb's
Dark Alliance was known for buying up real estate along
the Harbor Freeway and selling drugs throughout this exact area - the
mathematical correlation is staggering. Every dot represents a HUD mortgage
where the taxpayers lost money in a defaulted FHA loan and where somebody
else bought the property for pennies on the dollar. Most of those loans
defaulted as the crack cocaine epidemic ravaged Los Angeles. The taxpayers
bear the costs of not only the defaulted mortgages, but also deterioration
in property value, the crime, and ultimately the depopulation due to
very expensive prison warehousing and welfare.
Exactly who bought and traded in properties
throughout this area should be the subject of congressional hearings
looking into corrupt HUD practices from the period and continuing to
this day. I suspect that many of the same players connected to the Savings
and Loan scandals, who have also been tied to Iran-Contra and CIA's
drugs will surface yet again. Demographically it is also easy to see
now that the racial composition of South Central has changed radically
and that African-Americans have been geographically and politically
fragmented as, I believe, an intended result. Their political power
has been weakened.
Just days after showing this first map,
I received a subpoena from the Office of the Inspector General of HUD
asking for extensive data and records from Hamilton. Suddenly, the loan
sales and Hamilton were under investigation. The HUD IG’s actions
were doubly surprising given their intimate involvement in and positive
feedback about the loan sales program and because a HUD OIG audit team
had just finished an audit of the loan sales program and had informed
our project manager and HUD that our performance was excellent and there
were no problems whatsoever.
At the same time, we got calls from a team
of reporters from US News & World Report. They had been assured
“at the highest levels” of the HUD Inspector General’s
office that we were guilty of criminal action and that I and would soon
be indicted. The recent favorable audit disappeared. Investigators started
doing interviews where they did more seed planting than information
gathering.
The "investigators" at HUD started
suggesting to reporters that bid rigging had occurred in the loan sales.
This was just after members of the HUD IG audit team had actually sat
in on one sale, and concluded that bid rigging was impossible. They
had also concluded that there was no way that "rigging" could
have taken place because in a sealed-bid auction, you cannot favor one
bidder when all bidders have access to the same information. That audit
report was suppressed while the IG investigators pushed the exact opposite
notion to reporters.
On August 10, Bob Dole announced Jack Kemp
as his running mate. Meantime, the Republican appropriations committee,
chaired by Republican Congressman Jerry Lewis of San Bernardino, gave
Susan Gaffney, the HUD IG a large appropriations increase for her program
Operation Safe Home, which targeted black communities for visible media
“wag-the-dog” roundups of drug offenders. At the same time,
our model for computer learning and data processing by people who had
a stake in the company that did the work was adopted by Unicorp. Unicorp
is the Department of Justice private business that markets prison labor
to federal agencies.
Suddenly, the black people who were apparently
not smart enough to do database and software development near their
children and parents were more than competent enough to do it in prison.
The prison investment boom was taking off, fueled by new and longer
mandated sentences. We at Hamilton felt like we were walking around
with a big bullseye on our back because we wanted the communities of
America to know what we knew, which was how to make maps that tracked
the money flow in their own home towns.
I was not the only one dealing with Inspector
General inquiries. The HUD officials working with me were also inundated
with an investigation marked by leaks and dirty tactics. The former
Deputy Assistant Secretary for Multifamily at HUD, Helen Dunlap, was
one of the people targeted. She was from California and had previously
run the California Housing Partnership. She had lots of experience in
real estate and community development in Los Angeles. Gary Squier, the
Housing Commissioner of LA, on loan from Los Angeles, who was not involved
in mortgage sales with Hamilton, nonetheless found himself dealing with
similar probes from the HUD OIG. He was later to be turned down for
a position by the White House despite impeccable credentials. No one
could figure out why.
Suddenly I was persona non grata to long
time friends and business relations in and around the government. I
believe the leak campaign was far more sophisticated than something
the HUD Inspector General could or would do on her own. It appeared
that major economic and political powers had ordered that Hamilton be
destroyed. More importantly, they wanted the evidence of what we knew
- the maps - destroyed. That is also why, to this day, we believe the
Federal government has destroyed many, but not all, of our tools and
databases.
We didn't realize it at the time, but I
am now convinced that in the summer of 1996, our software and mapping
techniques uncovered evidence of ethnic cleansing on Los Angeles. Hamilton's
map revealed that one of the most significant effects of the crack cocaine
epidemic was that black homeowners, faced with payments on unlivable
and unsellable properties, simply defaulted and fled the city to get
away from the shootings and the drugs. Those properties: industrial,
residential and commercial were scooped up for pennies on the dollar.
Wouldn't it be fascinating to know who bought the properties and how
much money has been made on them since?
Thanks to people like Gary Webb, Peter
Dale Scott (Cocaine Politics), Alex Cockburn (Whiteout),
Mike Ruppert, brave DEA Agents like Celerino Castillo - and now to the
CIA's own reports - we can prove that the CIA knew full well what it
was doing. And, as is his particular gift, Mike Ruppert, who gives us
permission to see the obvious, has established that blacks were targeted
by CIA and that the people who control our intelligence agencies are
the same ones who control our economy and Wall Street. Mike has taken
great pains to document these things in previous issues of From The
Wilderness.
ETHNIC
CLEANSING IN LOS ANGELES
Ethnic cleansing is a bit trickier in South
Central Los Angeles than it is in South Central Europe. It is essential
in a “democracy” to have people do it in a way that makes
it look like they're "doing it" to themselves. You need a
socially induced suicide.
So how do you get people to commit suicide?
You make it very attractive for their children to make money doing something
illegal. Then you arrest them for it in a very visible way (Remember
the battering rams and armored cars?). You
design stories to make people blame themselves
for what has happened. This is how branding works. Pepsi = tastes good,
Black people = cause illegal drugs and crime. Support all this by a
national media owned by defense contractors and other corporate interests.
That way the nightly news has lots of moneymaking incentives to cover
HUD OIG sponsored drug raids in black communities rather than doing
a story on CIA drug trafficking.
The most efficient ethnic cleansing is
self-financed or, better yet, profitable. Drugs and alcohol are excellent
tools toward this end, especially when they are combined with easy access
to guns. Sell large amounts of addictive substances to a group of people
in an area you want to take over, then use the cash flow to buy up their
homes and commercial real estate for 10 cents on the dollar, without
much competition, while you enjoy the full value of their cash flow.
You can then afford the long holding period required to make the land
profitable again after the cleansing period is over.
I believe that if the Federal government
would make citizens' data (and it is our data) available, instead of
trying to suppress it, it would prove that taxpayers are losing money
to fund ethnic cleansing while the people in South Central LA are losing
their lives. And I believe that it was the effectiveness of our maps
which threatened to expose the deeper financial agendas of the eighties.
I believe our current model, the Solari Investment Model, (www.solarivillage.com)
which I am still developing, may well tie Iran-Contra, The Savings and
Loan Scandals and the HUD scandals of the late 1980s into one big economic
package designed to benefit a very few. The way to start to do this
is to look closely at all the government investment, credit and regulations
in Los Angeles since 1980.
Our maps suggest to me and others that
the crack cocaine epidemic, created by the CIA was, I believe, just
as much a program of ethnic cleansing and land grabbing economic warfare
as it was about a bunch of rebels in Central America who were not
the equivalent of our Founding Fathers. But this kind of ethnic
cleansing was hard to contain and it spread to other races and classes.
It reached the rural and suburban neighborhoods of places like Iowa,
Ohio and Tennessee. By the end of the 1980’s it had reached all
my friends and relatives who listen to Rush Limbaugh, voted for George
Bush and donated money to Oliver North - not knowing that, according
to CIA's own reports, the networks he controlled were the key to the
supply of drugs flowing to their kids and communities. As Michael Ventura
once wrote, “We all live in the South Bronx now.” White families
all across America were hurt by drugs and violence and their pocketbooks
also got drained, even as the media reinforced the notion that drugs
were a black problem.
MAP SHOWN BY C.A. FITTS AT BOSTON
HUD CONFERENCE - 8/1/96
© Copyright 1999. From The Wilderness Publications
MOST OF THESE HUD/FHA SINGLE
FAMILY LOANS DEFAULTED BETWEEN 1982 AND 1990.
THE HARBOR FREEWAY, WHICH
GAVE "Freeway" RICKY ROSS HIS NAME, IS THE VERTICAL LINE RUNNING
STRAIGHT THROUGH THE CENTER OF THE MARKS COVERING SOUTH CENTRAL
After the 1996 election, Secretary Cisneros
was asked to resign from HUD. The choice of Cisneros' successor seemed
strange and somehow connected to Hamilton's predicament. The Afro-American
mayor of Seattle was widely considered to be a shoe-in. After the White
House floated his name, another investigation by the HUD OIG into possible
misuse of HUD monies in Seattle caused him to be dropped. Two days later
we were assured that an Afro-American woman from Los Angeles, Yvonne
Braithwaite-Burke, was the President’s leading candidate. Then
suddenly, she disappeared from the radar screen and Andrew Cuomo was
announced with surprisingly strong bipartisan support for someone with
such a partisan history.
Cuomo moved into the Secretary’s office
at HUD from his then current position as Assistant Secretary for Community
Development and Planning. Rumors started to float around the HUD networks
about minorities and people sympathetic to minorities being moved out.
Meantime, the new Secretary made it clear that his top priority was
enforcement and it appeared that the Secretary and the OIG were going
to compete for an ever-growing budget via media-worthy enforcement actions.
So, then came the Urban Fraud Initiative and increased funding for Operation
Safe Home, targeting tenants, real estate owners and managers in black
communities. At the time, we made no connection between these actions
and the promotion of prison privatization by Vice President Gore’s
National Performance Review. New Federal sentencing guidelines helped
increase black inmates to approximately 50% of a rapidly expanding prison
population. All this at an extraordinary cost to taxpayers.
As the audits of Hamilton continued, forcing
us to spend hundreds of thousands on legal fees, Secretary Cuomo and
the Inspector General’s staff, who were later to withhold $2 million
in payments, became obsessed with seizing our data and software. This
was software we were planning on giving away via the web! The critical
issue from October 1997 through the following March seemed to be - our
knowledge! In October, great emphasis was placed on our returning all
of our HUD databases, including those that were supposed to be publicly
available, and certifying that we had done so. In the following months,
the HUD OIG tried to seize all of our documents, including originals,
with no basis in law. After demanding physical access to our computers,
government employees made back-ups of our data which, whether intentionally
or not, seriously damaged it.
And no one has yet officially accused us
of any wrongdoing. We were, and are to this day, only being investigated.
It is clear to us that the intent of this campaign was to drive the
company into bankruptcy. The leak campaign against the company and me
has since reached new heights of absurdity. As the HUD IG keeps assuring
the media that that I am guilty of criminal violations they now have
investigators focusing on my sex life! Worse still, HUD IG agents recently
showed up at the home of my 72 year old uncle with a subpoena for records
of a family owned farm house that doesn't even have indoor plumbing,
implying some kind of fraudulent transaction. Members of my family have
reduced or cut off communications, fearing they could be targeted too.
After court battles and negotiation, in
March of 1998 HUD insisted that all of our computers be scrubbed. We
were not going to be allowed to transfer our own proprietary data and
the Federal District Court Judge, Stanley Sporkin, appointed a Special
Master as trustee to manage all our digital and paper records. Inexplicably,
HUD was quite upset when they found we had taken our main server with
us and not sold it, in spite of the government's destruction of its
files. The HUD investigator made it clear that we could not keep the
server because - “We were not allowed to have any of the knowledge”.
We could not explain this bizarre position and neither could they.
What I did not know until approximately
a year later, after reviewing tapes of Mike Ruppert's lectures, was
that hearings were held on Volume I of the CIA Inspector General’s
report on the Dark Alliance allegations on March 16 of 1998. At the
same moment the government was trying to steal Hamilton's data and knowledge.
We also did not notice in February when
Vice President Al Gore announced that Secretary Cuomo was bestowing
an empowerment zone and $300 million in tax credits on Maxine Water’s
congressional district. That was just before the March 16th
hearing where Maxine Waters performed brilliantly against CIA in a show
that nobody watched. We were busy, at the time, moving our computers
over to our law firm to protect the MONEY MAPS from a series of break-ins
and other harassment around my home.
Our growing fear of being set up in an
asset forfeiture case, after the Department of Justice threatened my
assets personally, dominated our lives and does so to this day.
And so we did not notice when the damning
Volume II of the CIA Inspector General's report was released on October
8th, one hour after Henry Hyde's Committee started the Impeachment
inquiry. And we did not notice that Maxine Waters' voice suddenly fell
almost silent as Bill Clinton saved his presidency by blackmailing the
Republicans with Volume II and its contents. I made efforts to communicate
with Maxine Waters in November and December 1998 about possible connections
between our case and CIA drug dealing but, aside from an initial contact,
our calls were not returned. [FTW placed telephone and e-mail requests
to both the LA and Washington offices of Maxine Waters to ascertain
whether the $300 million tax credit award in March, 1998 was spontaneous
or the result of a previously submitted request. As of press time we
have received no response. - ED]
To date we estimate that the HUD Inspector
General investigation targeting my companies and me has cost the American
taxpayer $35MM. To date we have not been successful in getting the Department
of Justice or the HUD OIG to tell us what they are investigating or
even who is in charge of the investigation. The investigation continues
with no end in site. We have multiple lawsuits filed against HUD and
are filing more. We continually hear Judge Stanley Sporkin, rule against
us with statements that he disagrees with the law so we should take
it up with Congress.
The company I founded, Hamilton, was liquidated
a year ago to pay the bills of the ongoing campaign to discredit us.
As a result of the persecution we have lost more than one hundred million
dollars. I have sold my home, lost millions of dollars in unpaid HUD
contracts, endured eighteen audits, burglaries, physical harassment
and an unending smear campaign which has produced not a single complaint
or indictment after almost three years. I believe this is because I
have the pieces to help prove that what Gary Webb stumbled upon was
ethnic cleansing - American style.
My bottom-line? For those of you pushing
for testimony on Volume II, let’s try another tactic. Let’s
push for a Congressional and GAO investigation on how all the federal
investment, credit and regulation worked in Los Angeles from 1980 to
1994. Let’s look at how our government was used, from CIA to DEA
to HUD, to destroy and loot our communities. The key is HUD. Let’s
look at how the Section 8 owners, managers and tax partnership beneficiaries
worked along side the drug traffickers. Let’s look for patterns
of loan brokering, money laundering, cleansing and other relationships
between real estate, land, prison growth and privatization and the kind
of investors who control CIA and intelligence networks. Then let’s
look how this ties in to campaign fundraising.
The present economic and political system
is not sustainable and must collapse - or change. New investment models
in the information age will show us that integrity, honesty and win-win
investment models, rooted in community and place based autonomy are
actually more profitable than the liquidate and destroy models currently
operating. Like the auto mechanic said to the car owner who needed repairs,
"You can either pay some now - or pay a lot more later."
But we have to solve some problems first. Finding the will to do that
is made easier for me as I recall the words of Bishop Alfred Owens of
the Greater Mount Calvary Holy Church, "If we can face it. God
can fix it."
After a lifetime of study, from Wharton
to the inner sancta of government, I believe I have found the solution
to a very real corruption which neither Congress nor Wall Street presently
possess the ability to stop. It is a new investment model, born of the
Information Age, which will save both the just and the unjust alike
by turning the current Industrial Age investment model upside down and
making what was once secret - available to all. As the edge of the precipice
approaches and as our economic snake eats its own tail it shouldn't
be long before those who have scoffed at the truth-tellers recognize
that we are the ones with the maps to lead them out of the jungle.
You can learn more about the Solari investment
model by visiting www.solarivillage.com.
---------------
Catherine Austin Fitts, is a 1978 Graduate
of the Wharton School of Business with an MBA in Finance. From1978 to
1989, at the Wall Street investment bank Dillon, Read & Co she served
in the Corporate Finance, Energy Finance, Mergers and Acquisitions and
Public Finance Departments. From 1986-9 Fitts was a Managing Director
and member of the Board of Directors.
From 1989-90 Fitts served as Assistant
Secretary of Housing - Federal Housing Commissioner at the Department
of Housing and Urban Development. From 1991-7 she served as President/CEO
of the Hamilton Securities Group with aggregate revenues of $50 million,
an employee base of 50 and portfolio strategy responsibilities for $400
billion of financial assets.
She is now President and CEO of Solari,
Inc; a Washington consulting firm specializing in equity based neighborhood
investment models for the Information Age.
CLICK
HERE FOR THE COPvCIA STORE:
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The Wilderness
Michael C. Ruppert
P.O. Box 6061-350, Sherman Oaks, CA 91413 * (818)788-8791 * fax(818)981-2847 *
mruppert@copvcia.com
© COPYRIGHT 1998 - 2001, MICHAEL C. RUPPERT. ALL RIGHTS RESERVED.
