The numerous allegations regarding fraud, government sponsored narcotics trafficking and black budget funding over the
last two decades at the Department of Defense and the Department of Housing and Urban Development are deeply disturbing.
Originally published in Global Outlook, a magazine published by Centre for Research on Globalisation
The Real Deal on 9:11: Rewarding Failure
BY CATHERINE AUSTIN FITTS*
On September 11, America experienced a national security failure. Despite America’s annual investment of approximately
$350 billion in what is supposed to be the world's finest military and intelligence capacity, some 3,000 people died as
the world watched helplessly. An hour after the first act of war, the Department of Defense could not protect its own
Shortly after 9-11, American taxpayers were informed that this failure was a result of our having too much freedom and
not enough military and intelligence capacity and resources. We underwrote a $48 billion increase in the defense budget
and passed legislation that removed many constitutionally guaranteed freedoms. Meantime, the press reported efforts by
foreign governments to warn us of the impending attacks as well as pre-9-11 reports of insider trading patterns in
stocks of companies adversely impacted by these tragic events — and no similar trading patterns in other stocks in the
Soon after 9-11 came the Enron bankruptcy and revelations of massive fraud by a company that played a pivotal role in
determining American energy and foreign policy — indeed, even being delegated the power to interview and choose the
government official who would be its regulator. Until the Enron revelations, it was hard for most Americans to
comprehend the magnitude of Washington’s corruption. Conservatives create conservative justifications to give out
government contracts and subsidies that reward the powers that be. Progressives create progressive justifications to do
the same. Government “policy” is engineered to generate those contracts, subsidies and regulations that fatten banking
and corporate profits and “pump and dump” the stock market. When the Enron game was up, insiders sold their stock at the
top of the market to our pension plans, which take the losses when the stock goes bust.
The estimated $500 billion to $1 trillion of money laundering each year through the US financial system translates into
significant influence in all sectors of our economy and government. In 1998, the CIA Inspector General issued a
report that confirmed the complicity of the CIA and Department of Justice in marketing narcotics into American cities. A
deeper look reveals that the Clinton and Bush families were partners in bringing in Iran Contra arms and drugs through a
little airport in Mena, Arkansas. The very same Wall Street investment houses and banks that acted as investors in, and
lenders to, fraudulent Enron ventures also fed at the Mena, Arkansas trough. Numerous of the current Bush appointees
were complicit in these Iran-Contra activities. Whether Democrat or Republican, we have a government controlled by
people who financed their rise to power by threatening the lives of innocent civilians. Are these the type of people who
worry about the safety of ordinary Americans? I think not.
The financial questions are troubling, as the federal financial books appear to be as “cooked” as Enron’s. US citizens
pay federal taxes of $5,324 every year for every man, woman and child. Of that amount, $4,835, or approximately 85%
is spent by eleven agencies that cannot produce reliable financial systems or audits. The Departments of Defense
(DOD) and Housing and Urban Development (HUD), with Lockheed Martin as their lead contractor, are missing over $3.3
trillion between fiscal 1998-2000. The numerous allegations regarding fraud, government sponsored narcotics
trafficking and black budget funding over the last two decades at both DOD and HUD are deeply disturbing.
In the summer of 2000, a senior staffer for the Senate HUD appropriations subcommittee asked me what I thought was going
on at HUD. I deferred. The staffer said, “HUD is being run as a criminal enterprise.” HUD cannot be run as a criminal
enterprise without Lockheed taking a lead role. With Lockheed’s stock up over 60% since 9-11, as a result of new War on
Terrorism- related contracts, it is time to ask where the loyalty of government contractors lies.
We are awarding rich financial bonuses to those who failed 3,000 men, women and children and their families and the
country which it was their sacred duty to defend. The time has come for Americans to investigate what happened on 9-11,
including the reports of prior knowledge and insider trading. We must insist on full Internet access and disclosure of
all federal contracts and bank accounts, by both agency and geographical location, and ownership of all private
government contractors and U.S. Treasury bank depositories.
The time has come to hold those in control accountable to the citizens whom they are paid to serve. The time has come to
stop rewarding failure.
* + * + *
1. Estimate by the U.S. Department of Justice.
2. Based on 1999 IRS statistics and the April 2000 Census.
3. Agencies based on Senator Fred Thompson’s report “Government on the Brink” and Congressman Horn’s annual report card
on federal agency audits in fiscal 2000. Amounts based on the President’s 2002 budget before the 9-11 increases.
4. Secretary of Defense Rumsfeld confirmed in a Congressional testimony that the Department of Defense had
undocumentable adjustments in one year of $2.3 trillion.
- * Catherine Austin Fitts is the President of Solari, Inc. ( http://solari.com
) and a former Assistant Secretary of Housing – Federal Housing Commissioner in the first Bush Administration. She
publishes a column on Scoop which is distributed for free by email - see... Free My Scoop
to sign up.
- ** Learn more about Global Outlook and the Centre for Research on Globalization.
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