The federal Inspector General’s Office recently reported the Pentagon can not account for $100 billion dollars. No surprise there considering the incestuous relationship the Pentagon has with the Military-Industrial Complex.
When President Truman was preparing his departure speech, he originally described the ominously increasing influence of the Political-Military-Industrial Complex (PMI) but was “persuaded” by high ranking members of Congress to omit the inclusion of “Political” in his warning.
Truman had witnessed the growth of the PMI during the Post WW II drawdown. One has to wonder if the PMI didn’t create a crisis by influencing the Pentagon to withdraw troops from Korea against the repeated warnings of on-scene commanders and detailed intelligence Indicators & Warnings informing the CIA and Congress of North Korea‘s intent to invade the South a year prior to actually doing so. After leaving the White House, Truman wrote the Korean War was the “most avoidable war in American history.”
The first step in recovering not just the Pentagon’s missing billions but all the taxpayers’ funds wasted in fraud, waste and abuse (the IG’s mission) is to grant IG inspectors law enforcement authority – to take sworn testimony, filing charges and indictments, and arrest authority. As it stands now, every elected official and bureaucrat in the federal government can lie to the IG‘s office with impunity, refuse to cooperate and ignore its’ findings because it is a toothless tiger.
The second step in recouping lost billions is to follow up on a whistleblower named Catherine Austin-Fitts‘ claim of the Defense Department hiding funds within Department of Housing and Urban Development.
Catherine Fitts earned an AA degree from Bennett College in 1970 and a BA degree in history from the University of Pennsylvania in 1974. After graduating, she briefly worked as a bartender until one of her customers, who was director of admissions at the Wharton School, encouraged her to pursue graduate studies. She received her MBA from Wharton (the same school as Trump) in 1978.
After graduate school, Fitts went to work at Dillon, Read & Co. While there, in 1982, she organized a novel municipal bond sale to raise several billion dollars to revitalize the New York Subway System, marking the first time that a public agency had sold bonds backed by rider fares. In 1986, Fitts became the first woman promoted to managing director of Dillon, Read & Co. in the investment bank’s then 156-year history. During her time as managing director, Businessweek described Fitts as “Wall Street’s foremost champion” of public utilities bonds.
During the 1988 United States presidential election, Fitts worked on the campaign of George H. W. Bush and was appointed as Assistant Secretary of Housing and Urban Development for Housing in the Bush administration, where she was charged with repairing the department’s reputation in the aftermath of the savings and loan crisis. Among her initial observations upon taking office was that the department had a $300 billion portfolio of mortgage insurance but only employed one certified actuary. The reforms she announced included a plan to sell government-foreclosed homes at a 50-percent discount to non-profit organizations to operate as rentals. Previously, the government had sought to sell residential properties at the highest possible value, which resulted in a glut of real estate in its portfolio that had to be managed at great expense, as well as in shortages of housing stock in some high-density markets.
She resigned her post in 1990, following a report her relationship with Secretary of Housing and Urban Development Jack Kemp had soured, a report Kemp denied. Fitts’ departure prompted criticism of Kemp; she had been – according to Neal Peirce – “widely regarded as the best manager he brought in” (See also: Enemy Of The State – The Catherine Fitts Story, Tuesday, 5 February 2002, 11:18 am; Article by Uri Dowbenko). According to Fitts, she was offered an appointment to the Federal Reserve Board of Governors after her departure from HUD but declined, preferring to return to the private sector instead.
After leaving government, Fitts founded Hamilton Securities, an employee-owned brokerage house, which she ran until 1998. In 1993, Hamilton Securities won a contract with HUD to manage its $500 billion investment portfolio. While managing HUD’s portfolio, Fitts devised a location-based mortgage debt resale software program that may have resulted in an increase in department revenue of several hundreds of millions of dollars. In 1997, HUD canceled the Hamilton contract over what it claimed were accounting errors involving the program; an investigation into Hamilton Securities was launched by the HUD Inspector-General, the FBI, and the Securities and Exchange Commission. According to Fitts, the investigation was undertaken as retribution against her; she claimed that Community Wizard data revealed that some federally-guaranteed mortgage securities may have been fraudulently issued. One outside complainant, a government contractor, charged insider dealing and bid rigging in its contention that Hamilton Securities had obtained its HUD business due to favoritism. In 2002 the investigation was closed, and investigators stated they had found no evidence of wrongdoing by Fitts or Hamilton Securities.
Fitts has researched and commented on government spending. In a 2004 study published in World Affairs: The Journal of International Issues, she purported to find “evidence that for several decades a very large proportion of the nation’s wealth is being illegally diverted into secret, unaccountable channels and programs with unspecified purposes, including covert operations and subversions abroad and clandestine military R&D at home. Public institutions have been infiltrated and taken over by shadowy groups in the service of powerful private and vested interests, often at the expense of the common good.”
In 2017 Fitts co-authored a report, with Michigan State University economist Mark Skidmore, that claimed to find $21 trillion in “unauthorized spending” by the U.S. Department of Defense and U.S. Department of Housing and Urban Development over a 17-year period. Fitts has claimed that HUD’s mission of spurring economic growth is secondary to what she contends is its use as a fundraising mechanism for military and intelligence agencies involving a complex securities scheme using HUD-backed Ginnie Mae investments. According to Fitts, HUD overpays to rehabilitate public housing and funnels the difference into unaudited black budget programs at the behest of national security agencies.
One of these may be the Pentagon‘s plan to convert military airborne SIGINT platforms into civilian-looking aircraft like those flying over the truckers’ cross-country protest convoy intercepting the truckers’ communications – a blatant violation of the 4th Amendment and Posse Comitatus by the Biden Administration.
(See: this blog site www.LigonClanLaw.com “Flash! Another Weapon in Democrats’ War on Americans!” dated March 21, 2022)
If President Trump is going to drain the swamp, he needs to give law enforcement authority to those charged with government efficiency – like the Inspector General’s Office and others. Otherwise, we’ll see more agency bureaucratic obfuscation before permanently feckless congressional committees. There needs to be a statutory nexus and executive authority between the sanitized FBI, the Department of Government Efficiency, and every existing investigatory agency already existing but toothless if it too doesn’t want to become another ignored Grace Report. (See: “Fiscal “Cliff” Solutions – Remember the Grace Report? “It’s the Fraud, Waste and Abuse, Stupid!” March 2, 2013.
P.S. Reinstating a Reagan-style, National Fraud, Waste and Abuse Hotline would create an open pipeline for actionable FW&A information.
