UQ Wire: Investment Espionage And The White House

Published: Tue 16 Jul 2002 11:19 PM
Unanswered Questions: Thinking For Ourselves
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Investment Espionage And The White House
Bush Administration Links To Pre-9/11 Insider Trading
by Tom Flocco *
Tuesday, July 16, 2002
There is growing evidence that the FBI and other government intelligence entities are more closely linked to the documented accumulation of pre-9/11 insider trading profits than was originally thought. But thus far the Joint Congressional Intelligence Committee has not publicly referred to prior knowledge of the attacks as it relates to stock transaction profits, while also failing after nine months to publicize the critical Securities and Exchange Commission (SEC) “control list” report tracing what in effect were stock trading profits of death.
Central Intelligence Agency (CIA) spokesman Tom Crispell denied that the CIA was monitoring “real-time,” pre-September 11 stock trading activity within U.S. borders using such software as the Prosecutor’s Management Information System (PROMIS) or the Echelon satellite monitoring system. However, when asked whether the CIA had been scrutinizing world financial markets for national security purposes, Crispell replied, “I have no way of knowing what operations are [being affected by our assets] outside the country.” Given 3,000 deaths, victim family lawyers may want to know.
A January 23, 2002 Houston Chronicle report revealed that Enron Corporation’s top security team, including four former CIA officers and an ex-FBI agent left the company to form a private firm, Secure Solutions International (SSI), while continuing with Enron via a consulting contract. John W. Presley, the FBI agent now heading SSI could not be reached for comment. But the team probed a “variety of allegations of fraud and other kinds of rule-breaking by Enron workers,” according to the Chronicle.
Team member and former CIA agent David M. Cromley’s business biography at Enron listed him as Enron’s director of business analysis, the Chronicle reported, adding that Cromley gave Enron executives “detailed and unique information” allowing them to make “investments, sales of assets, joint ventures and [financial] products.”
But no public information has been forthcoming as to whether such “detailed and unique information” or sensitive CIA software was used in conjunction with Enron’s controversial off-shore investment products, or whether their missing assets may have been employed in what former German Minister of Technology, Andreas von Bulow, estimated at $15 billion in insider trading profits. (Tagesspiegel, Berlin, 1-13-2002) Von Bulow then buttressed his astounding charges: “26 intelligence services in the U.S. with a budget of $30 billion....For 60 decisive minutes, the military and intelligence let fighter jets stay on the ground....48 hours later, however, the FBI presented a list of suicide hijackers. But within ten days, it emerged that seven of them were still alive.”
An examination of SSI’s website reveals that its corporate members have “managed cutting-edge counterterrorism and counterproliferation operations for the CIA, implemented advanced technical information and security programs for the CIA, and conducted a wide range of investigations for the FBI,” while also “overseeing all security arrangements for several large gas pipeline companies.”
It is yet to be determined if Congress will publicly question CIA Director George Tenent as to whether CIA and FBI employees were "loaned" to Enron's corporate espionage program, involved in personal pre-9/11 insider trading, or merely relaying sensitive insider political information to others involved in prior knowledge of the attacks. However, victim family lawyers will likely be forced to subpoena government documents and officials to effectively prosecute any negligence claims against government entities.
The fraud-racked Enron Corporation has had at least 20 CIA agents on the payroll in the last eight years. But while the Houston Chronicle reported the operatives as “former” CIA, a February 26, 2002 National Enquirer story quoted a top Washington insider familiar with several secret investigations into Enron, as reporting that they were given “leaves of absence without pay and put on the Enron payroll.”
The source added that Enron’s CIA members used “info gleaned from a satellite project called ‘Echelon,’ which intercepted emails, phone calls and faxes with detailed business information,” adding that “pure and simple, [taxpayer-funded] U.S. intelligence agents were involved in corporate espionage.” Another Enquirer source with ties to the CIA revealed that "the cozy deal between Enron and the CIA allowed the 'on-loan' undercover operatives to return to the Agency's payroll before Enron's collapse."
Known CIA links traverse a curious variety of unexamined threads in the U.S. financial community. Online Journal’s Larry Chin (2-1-2002), reminded that [mega-money conglomerate] “Citigroup has repeatedly been charged with money laundering. This, as it’s Board of Directors includes John Deutch, former CIA Director, Robert Rubin, former Treasury Secretary and intimate friend of Enron’s Ken Lay, but also former CIA Executive Director Nora Slatkin.”
Even Congress has a close CIA link. Senate Joint Intelligence Co-Chairman Bob Graham and his House Intelligence Co-Chairman and former CIA operative Porter Goss were meeting with the Chief of the Pakistani Intelligence Service on the morning of the Sept.11 attacks, according to published reports. Oh, to be a fly on the wall in that room.
Worrisome reports link two intelligence leaders in the Senate and House directly to the leader of Pakistan's intelligence arm, The Inter-Services Intelligence (ISI), and indirectly to the leader of the 9/11 Hijackers.
A Times of India (10-12-2001) story by Manoj Joshi revealed that Pakistani ISA Director-General Lt. General Mahmud Ahmad sought retirement after the U.S. attacks -- confirmed by top sources in India, because of evidence produced by India showing his links to Mohammed Atta, the terrorist hijacking leader.
The Times said that "U.S. authorities sought his [Ahmad's] removal after confirming the fact that $100,000 was wired to WTC hijacker Mohammed Atta from Pakistan by Ahmad Umar Sheikh on the instructions of ISI Lt. General Ahmad." Senior [U.S.] government sources "have confirmed that India contributed significantly to establishing the link between the money transfer and the role played by the dismissed ISI chief."
The Times added that "while they did not provide details, they said that Indian inputs, including Sheikh's mobile phone number, helped the FBI in tracing and establishing the link."
Serious questions remain, however, as Senate Joint Intelligence Co-Chairman Bob Graham (D-FL) and his House Intelligence Co-Chairman and former CIA operative Porter Goss (R-FL) were meeting with ISI Chief, Lt. General Mahmud Ahmad, on the very morning of the September 11 attacks, according to published reports. (New York Times, 2-17-2002 & MSNBC-TV, 10-7-2001).
Since Graham and Goss are Co-Chairmen of the Joint-Intelligence Committee investigating the 9/11 attacks, difficulties could arise when the Congressional Open Intelligence Hearings commence in mid-September, and whether other Members will have the courage to seek testimony from the Chairmen of their own Committee, regarding their questionable links to the U.S. terrorism.
Thus far, Graham and Goss will have been able to postpone open hearings for over one year, as they are currently scheduled to start near the end of September. Moreover, devastated and grieving 9/11 victim families have been unable to hold Congress accountable to seek justice, while hearings have continued behind closed doors in a sound-proof room at the Capitol.
Other members of the Joint Intelligence Committee could be placed in the uncomfortable position of having to call Graham and Goss to testify as to why they were meeting -- on the morning of the attacks -- with the Pakistani ISI Chief, who was having money wired into the United States to support the efforts of the leader of the terrorist hijackers while the attacks were in progress!
Other Committee Members would likely be interested in what was said at the meeting with Lt. Gen. Ahmad, and more about his relationship with Graham and Goss, given Ahmad's links to Mohammed Atta.
These and other growing connections indicating prior knowledge of the attacks also make a case for how the profits of death were accumulated by insider trading via the United States Stock Market. This, while the SEC will not release its "Control List" of suspicious stock trades involving companies and airlines directly related to the attacks.
On the heels of alleged CIA involvement in public stock trading and use of sensitive prior knowledge of last fall’s attacks, 13 days ago on May 22, FBI agents Jeffrey A. Royer and Lynn Wingate were charged with racketeering conspiracy, securities fraud, conspiracy, and obstruction of justice. Royer was also charged with extortion, according to an examination of an unsealed federal indictment: United States vs. Elgindy, Royer, Wingate, Cleveland, and Peters, filed in New York District Court by Alan Vinegard, United States Attorney -- all of which clouds either open or secret congressional probes of pre-attack insider trading profits.
Vinegard’s news release said “the allegations reveal a shocking partnership between an experienced stock manipulator and law enforcement agents, undertaken for their illicit personal financial gain.” Moreover, Royer and Wingate allegedly used the FBI’s Automated Case Support database to actually monitor the investigation, passing confidential information about the investigations of companies to participants in a stock manipulation scheme, according to the Washington Post. (5-23-2002)
Assistant U.S. Attorney Kenneth Breen said stock advisor Amr Ibrahim Elgindy, charged in the indictment, called his Salomon Smith Barney broker, trying to sell $300,000 in stock from his children’s trust funds on the afternoon of Sept.10. During the conversation, Elgindy “predicted that the Dow Jones industrial average, which at the time stood at about 9,600, would soon crash to below 3,000,” according to the New York Times, (5-25-2002), thus begging the question whether Congress will publicly disclose other indications of alleged CIA or FBI complicity in prior knowledge of the 9/11 attacks.
Two individuals with close intelligence ties told the Boston Globe (10-27-2001) that since September 11, the super secret National Security Agency (NSA), acting on the advice of their lawyers, have been destroying data collected on American citizens and corporations,
angering other intelligence agencies seeking leads in the anti-terrorist probe. Two calls by American Free Press to Joint-Congressional Intelligence Committee Ranking Member, Senator Richard Shelby, to confirm details revealed by the sources were unreturned.
Since the October Globe report, no other media outlet has examined the heated discussions with the CIA and intelligence committee staff members, as NSA lawyers turned down requests to preserve the intelligence because regulations prohibit data collecting on Americans, inviting lawsuits, according to the two former senior U.S. officials. However, Vincent Cannistraro, former CIA Director of Counter-terrorism, told Scoop Media that “the law allows [intelligence officials] exceptions in certain circumstances.” Both the CIA and FBI had declined comment.
Cannistraro added that “If American citizens are believed to be involved in some way in a foreign intelligence operation that could lead to terrorism against this country, I believe the NSA is required to save or maintain the information.” When asked about the NSA and the 9/11 attacks, the former CIA official told Scoop. “In this case, I believe they should have saved the surveillance data.” Congress has been tight-lipped, and government investigators are extremely frustrated that many possible leads stemming from the Sept.11 attack were not being followed because of the NSA position.
According to the San Francisco Chronicle (10-19-01), the SEC privately asked North American securities firms to participate in an information-sharing system to trace “large numbers of trades in securities of companies [directly] affected by the attacks. Curiously, however, the SEC asked companies “to designate senior personnel who appreciate ‘the sensitive nature’ of the case [pre-attack insider trading], and can be relied upon to ‘exercise appropriate discretion,’ as ‘point’ people linking government investigators and the [securities] industry.” Then the SEC asked for the names, titles, phone numbers and e-mail of the designated senior personnel, according to reporter Scott Winokur.
On October 2, 2001, Canadian securities officials confirmed that the SEC had asked firms to review records for 38 companies, suggesting that some buyers and sellers might have had advance knowledge of the attacks, according to Winokur. A Scoop examination of the Center for Public Integrity’s financial records of the top 100 Bush Administration officials reveals ownership of millions of dollars in these 38 stocks which would not be different from any other wealthy American.
However, Congress has thus far refused to make public what the Chronicle reported as an SEC “control list” containing confidential information about transactions, individuals, relationships, and entities identified by the FBI and other law enforcement agencies in the probe. The existence of the SEC list would still be a secret if not for an accidental leak via the Canadian securities officials.
There is as yet no reporting regarding whether the “entities” were SPE’s linked to Enron. The SEC added, “Because the control list contains confidential information, we ask that you disseminate it within your institution only on a need-to-know basis.” But Congress or the Courts may ultimately decide whether the families of Sept.11 also need to know the identities of individuals with prior knowledge -- allegedly involved in the profits of death.
The Wall Street Journal (10-2-2002) reported that the Secret Service was also probing an unusually high volume of five-year U.S. Treasury note purchases made prior to the attacks -- one purchase included a single $5 billion trade. The Journal called Treasury notes among the best investments in the event of a world crisis, with their value having risen substantially since September 11. Moreover, the Associated Press reported that a German Central Bank study strongly pointed to “terrorism insider trading” not only in airline and insurance companies but also in gold and oil futures. Will Congress chalk it up to coincidence?
The evidence linking Deutschebank to the terrorists and insider trading is clearly quite extraordinary: 1) The lead hijacker pilot and two accomplices had bank accounts at its Hamburg branch, 2) One of its unnamed private investors never claimed $2.5 million in United Airlines put option contract profits following the attacks, 3) Its global “private banking” chief Mayo Shattuck III, resigned the day following the attacks in the middle of a three-year $40 million contract, 4) It hired away SEC enforcement and investigation chief Richard Walker just 20 days after the attacks, 5) Its recent senior investment banker Kevin Ingram pled guilty to money laundering involving Stinger missiles and multiple varieties of arms sales to Pakistani and Egyptian citizens just 14 days prior to Sept.11, and 6) Deutschebank was heavily involved in the 9/11 insider trading but Congress has not questioned former Alex (A.B.) Brown division head A. B. “Buzzy” Krongard -- appointed by George Bush as Executive Director (number three) of the CIA -- regarding intelligence and “real-time” stock trade monitoring.
[note: all evidence in the above paragraph is sourced in the "Profits of Death" series on pre-9/11 criminal insider trading, Parts I, II, III, at -- Sept. 11 Section]
European reporters found that most of the suspicious pre-attack trades passed through Deutschebank and especially via CIA Executive Director A.B. Krongard’s former Alex Brown investment division by means of a procedure called portage, which assures the anonymity of individuals making the transactions. But Congress has not publicly revealed whether they will call Krongard and other Alex Brown traders to testify in open hearings, or whether they will subpoena the pre-attack documents in question., an online site for corporate executives, revealed on 1-28-2002 that Deutschebank was a limited partner in either the controversial Enron special purpose entities (SPEs), LJM or Chewco -- those off balance sheets and off-shore products heavily involved in Enron’s demise, and run by Enron CFO Andrew Fastow. This begs the question as to whether Congress or the Courts will determine whether missing funds from Enron were possibly part of a scheme to develop funds to profit from the air attacks -- given the many interwoven ties between Enron and Deutschebank. also revealed that a former Enron employee prepared an SEC filing, having deleted Deutschebank’s name from LJM version sent to the SEC. But curiously, “that deletion was made at the behest of William McLucas, former SEC enforcement director, hired by Enron after the attacks on October 31. The former employee also claims to have received instructions to destroy the draft of the SEC filing. But not a public word from Congress.
John P. Schmitz, George H.W. Bush’s former Deputy Counsel during the Elder’s Vice-Presidency and Presidency, will likely be a key player if Americans force Congress to become serious about its 9/11 probe. Some may remember Schmitz from the Iran/contra investigation, when the Office of the Independent Counsel (OIC) reported that each witness interviewed regarding document production complied except for Schmitz, who asserted that his documents were privileged work product.
Schmitz, fluent in German and a Partner in global-law firm Mayer, Brown & Platt, has clients that include Bayer AG (German maker of the antibiotic Cipro which fights Anthrax, about which Larry Klayman and Judicial Watch (JW) will have keen interest. Recently, JW filed suit seeking the Administration’s anthrax documents to ascertain why the White House starting taking heavy doses of Cipro the day of the attacks -- nearly a month before anthrax was even discovered on Capitol Hill, and while postal workers continued to sort mail in contaminated offices -- some dying in the process.
But John Schmitz’s Mayer-Brown profile also reveals that he represents Enron, adding that “we were active in Germany [with Enron] until the end....It [bankruptcy] surprised me as well as anyone else,” according to Reuters (1-4-2002). Moreover, Mayer-Brown also represents Deutschebank on a regular basis regarding its electronic commerce activities; and curiously, Schmitz’s law firm maintains an office in Tashkent, Uzbekistan along with Enron -- if only to make sure oil is well in the Caspian Sea basin.
Even many 9/11 victim families will even come to recognize Mayer-Brown; for conveniently, the firm also happens to represent United Airlines against 9/11 family lawyers Mary Schiavo and Donald Nolan. And given partner John P. Schmitz’s close former relationships with the Bush family, Mayer-Brown’s many water coolers may become intriguing conduits when Miss Schiavo and Mr. Nolan begin their respective legal discovery initiatives regarding who will be subpoenaed or deposed and what evidence is or is not revealed.
In an interview with Scoop Media, former Washington, DC United States Attorney Joseph de Genova took a hard line, saying “If the Congress does not want to get answers to these critical questions regarding who profited [from prior knowledge of the attacks], then it needs to be litigated.” And asked whether Americans have a right to know who sold large blocks of stock shares in companies and airlines directly affected by the attacks or purchased billions in ultra-safe Treasury notes directly prior to 9/11, de Genova added, “I believe someone will litigate the Freedom of Information Act (FOIA) issue related to the Ashcroft memo, if government agencies keep obstructing the media -- the sooner, the better.”
While thousands of American families, victimized by terrorism, still remain numb with grief, information is being advanced daily regarding what could be described by some as casual, if not negligent, long-term slipshod governmental responsiveness to fundamental internal national security and safety questions -- or worse. But even if they come out of their secret, sound-proof Capitol bunker into the light of open hearings, questions still remain as to whether they have the courage to forcefully seek answers to the real unanswered questions.
Yes, we’ve come a long way from those pre-attack United and American Airline put and call ratio arguments about “lucky bets”-- for the evidence regarding profits of death is intriguing. This is real serious stuff. But curiously, both the President and Vice-President have lobbied mightily for only one joint investigative committee instead of multiple and bicameral, Enron-style hearings. Maybe we’ll get a stacked-deck, wink-and-a-nod, “blue ribbon” panel. Only time will tell. But as the First Lady always reminds us: “Don’t worry. Just tell your children they’re safe.”
© Copyright by Thomas Flocco. Used with permission.
* - Tom Flocco is an independent investigative journalist. Contact him via email at: / Kyle F. Hence contributed additional research regarding the SEC Control List section.

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