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Connecting The Dots - Insider Trading And 911
Profits Of Death Part One
Part One Of A Three Part Series
by Tom Flocco - Edited by Michael C. Ruppert
Previously Published By From The Wilderness
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IMAGES: http://scoop.co.nz/mason/stories/HL0109/S00061.htm
Who Profited As Manhattan Burned?
Introduction By Mike Ruppert
FTW, December 6, 2001 -- On October 9th, FTW broke a story on insider trading connected to the 9-11 attacks on the World
Trade Center that sparked worldwide controversy. In that story we reported how the Israeli Herzliyya Institute for
Counterterrorism had documented that unknown individuals -- with accurate foreknowledge of the attacks -- had purchased
an obvious and unusually large number of "put" options on United and American Airlines shortly before the attacks.
Additional companies hit hard by the insider trading included Axa Re(insurance) and Munich Re as well as American
investment giants Merrill Lynch and Morgan Stanley.
Put options are essentially a bet that a stock’s price will fall abruptly. The seller, having entered into a
time-specific contract with a buyer, does not need to own the actual shares at the time the contract is purchased.
Therefore, if a holder of the put option has a contract to sell a stock such as American Airlines for (e.g.) $100 a
share on a Friday and the stock falls to $50 on Wednesday, they can purchase the stock, sell it on Friday and double
their money. The person on the other end of the contract (the call) has an obligation to buy the shares at the agreed
upon price. The bank handling the transaction as a broker is the only entity knowing the identities of both parties.
FTW also revealed that the A.B. Brown (Alex Brown) investment arm of the banking giant Deutschebank/A.B. Brown had been
headed until 1998 by the man who is now the Executive Director of the Central Intelligence Agency - A.B. "Buzzy"
Krongard. In fact, Krongard is but one name in a long history of CIA interconnections to stock trading and the world’s
financial markets. We also discussed, in detail, the evidence indicating that the CIA and other intelligence agencies
monitor stock trading in real time for the purpose of identifying potential attacks of any nature that might damage the
U.S. economy.
The original FTW story is located at:
Critics of FTW’s initial story - not having read any of five related stories dating back to an October 2000 piece on
PROMIS software - claimed that we had not made the links to establish culpability. But we knew that the links were
there, that our case was solid, and that new evidence would not go undiscovered for long.
Now, investigative reporter Tom Flocco digs deep and strikes pay dirt in a three-part series that reveals not only
deeper links between the CIA, Wall Street and the insider trades of 9-11, but also discloses that a key executive at
Deutschebank - an American - became, just weeks before the attacks, a convicted felon. His crime: conspiracy to launder
drug money to arrange the purchase of U.S. weapons - in association with two Pakistanis who also attempted to acquire
nuclear bomb components - for use by Islamic fundamentalist terrorists. - MCR
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Connecting The Dots - Insider Trading And 911
Profits Of Death Part One
CIA Does Not Deny Stock Monitoring Outside U.S.
In a returned phone call from the Central Intelligence Agency, press spokesman Tom Crispell denied that the CIA was
monitoring "real-time," pre-September 11, stock option trading activity within United States borders using such software
as the Prosecutor‘s Management Information System (PROMIS).
"That would be illegal. We only operate outside the United States," the intelligence official said.
However, when asked whether the CIA had been using PROMIS beyond American borders to scrutinize 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."
Extensive media reporting confirms that investors at Deutschebank-Alex Brown and other global financial entities may
have profited from prior knowledge of the attacks while purchasing disproportionate pre-attack put option contracts on
targeted U.S. airlines and related insurance or investment firms. All of these firms suffered serious losses resulting
from the September 11th attacks and their stocks abruptly plummeted.
Confirmation that the CIA or other U.S. intelligence agencies were monitoring financial markets and had seen these
trades before the attacks would have staggering implications for thousands of victims’ families.
The CIA official also declined to comment on the actual capabilities of PROMIS. The highly technical software has been
described as a system that "interfaces with any database...as police can input an alleged terrorist’s name or credit
card, and the software will provide details of the person’s movements through purchases...," according to an 11-10-01
Toronto Sun report.
The importance of PROMIS is that it is not only capable of interfacing with a wide variety of data bases in different
computer languages and then integrating the data, but it has also been modified for intelligence purposes. It has then
been sold throughout the world by spy agencies through third parties to clients such as banks and investment houses
envious of its unique capabilities. One key modification by agencies such as the CIA and Mossad - not disclosed to most
users -- is a secret "back door" that permits those with the right codes to enter databases undetected, retrieve and/or
alter information, and leave without a trace. PROMIS has been extensively reported as being used throughout the world’s
financial markets because of its versatility in facilitating international transactions.
Further clouding the issue of pre-attack stock screening by U.S. intelligence, the Canadian daily revealed that U.S.
police said many of the suspected terrorists were apprehended (and detained) "through use of the state-of-the-art
computer software program PROMIS."
In March 2000, CIA director George J. Tenet told the Senate that Osama bin Laden’s group (Al Q’aeda) was "embracing the
opportunities offered by recent leaps in information technology." A FOX News story and stories in FTW disclosed in
November that Osama bin Laden was believed to have the software.
The issue of CIA monitoring of stock trades follows on the heels of wide reports indicating that investigators are
carefully probing the insider trading with its resultant profits, reported to be in the 10’s of millions of dollars --
some of which a Deutschebank investor has yet to claim.
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A promis is a promis
Crispell also declined comment when asked whether the Treasury Department or FBI had questioned CIA Executive Director
and former Deutschebank-Alex Brown CEO, A.B. "Buzzy" Krongard, about CIA monitoring of financial markets using PROMIS
and his former position as overseer of Brown’s "private client" relations. [Note: Krongard stayed with A.B. Brown to
head "private client" operations after it was acquired by Banker’s Trust in 1997. As Krongard was leaving in 1998 to
join the CIA as counselor to Director George Tenet, Banker’s Trust was acquired by Deutschebank. Banker’s Trust had been
previously criticized by the U.S. Senate and regulators for money laundering. Krongard was promoted to Executive
Director at CIA in March 2001. - MCR]
Wide reports -- including a 9/28/01 story in the Asian Wall Street Journal and a 10/1/01 story in The Guardian --
indicate that investigators are checking Deutschebank’s alleged links to Saudi "private banking," terrorist bank
accounts, and $2.5 million in unclaimed United Airlines (UAL) put options profits; however, no government
acknowledgement had ever been given of CIA’s alleged use of PROMIS software prior to the attacks.
In a recent phone conversation, when asked about alleged terrorist ties to Deutschebank and potential pre-attack CIA
trade monitoring via PROMIS, Treasury Department spokesman Rob Nichols remarked, "This is clearly an interesting line of
questioning regarding conflicts of interest."
However, news searches indicate that no member of Congress has publicly questioned whether wealthy terrorist-connected
Saudi nationals participated in the private client operations of Deutschebank-Alex Brown. Osama bin Laden and almost all
of the alleged 9-11 hijackers are of Saudi nationality. Also, no member of Congress expressed public interest in asking
Krongard about whether or not the CIA affected "real-time" pre-attack trade monitoring using PROMIS software at any
location.
[Note: Under a program known as Echelon, the governments of the U.S., Britain, Canada, Australia and New Zealand
routinely circumvent prohibitions on domestic electronic spying by having the agencies of the other governments do it
for them. - MCR]
Michael Ruppert, editor and publisher of From The Wilderness (FTW) newsletter (www.copvcia.com), has been interviewed
by both the House and Senate for his expertise on illegal covert CIA operations. He said recently that, "It is well
documented that the CIA has long monitored such (suspicious or unusual) trades -- in real time -- as potential warnings
of terrorist attacks and other economic moves contrary to U.S. interests."
Ruppert was the first to point out after 9-11 that CIA Executive Director Buzzy Krongard has extensive past ties to
Deutschebank-Alex Brown. Ruppert added, "There is abundant and clear evidence that a number of transactions in financial
markets indicated specific [criminal] foreknowledge of the September 11 attacks...and the firm which was used to place
put options on UAL stock was, until 1998, managed by the man who is now in the number three position at the CIA."
Ruppert also confirmed that two October 17 calls to the FBI resulted in spokespersons declining to give their names
after revealing that "the FBI has discontinued use of the PROMIS software." Moreover, on October 24, Justice Department
spokesperson Loren Pfeifle declined to answer any questions about where, when, or how PROMIS had been used and would
only say, "I can confirm that the DOJ has discontinued use of the program." This followed almost 17 years of denials by
the FBI and the Department of Justice -- in court and under oath -- that they used the software at all in a law
enforcement or intelligence capacity.
Krongard’s current lofty intelligence community position, combined with his prior leadership of a financial institution
allegedly connected to terrorist hijacker bank accounts [see Part II], suspicious UAL options contracts, and "private
banking" is so controversial that it has not as yet sparked any official investigation. That said, the evidence is
substantial enough to potentially expose the prior-knowledge issue -- if Congress chooses to act.
And while Treasury Department official Rob Nichols agreed that unresolved conflict of interest questions remain, the
CIA Executive Director is still currently charged with supervision of the U.S. intelligence investigation of his former
firm and its "private banking" operations.
Reuters has reported that Krongard "was [also] involved in setting up the CIA experiment into investing in high-tech
companies with the goal of acquiring innovative technology for its own use."
Commenting on the CIA’s venture capital firm In-Q-Tel, started in 1999 to encourage development of private-sector
technologies for use in the intelligence world, Krongard said on August 1, 2001 -- just 5 weeks before the Trade Center
attacks -- "I think In-Q-Tel’s a wonderful model...in accessing the capabilities of the private sector."
On October 16, Fox News reported that, according to sources, accused Russian spy and FBI agent Robert Hanssen sold
high-tech PROMIS software to Russia, and that Osama bin Laden allegedly purchased it from Russian organized crime
sources.
Fox reported that, "Government officials suspect bin Laden may have the highly sophisticated U.S. government software
that has been used by several other governments, including the United States, for classified intelligence and law
enforcement information."
The admission by U.S. government officials that PROMIS was widely used by a number of governments further blurs the
pre-attack stock monitoring issue since intelligence officials will likely continue to decline comment, save for
closed-door congressional oversight hearings or challenges by those victims’ families choosing to bypass settlements
adjudicated by the Attorney General’s office in favor of direct intervention by the courts.
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The buck stops where?
Tom Crispell, the CIA official, was cooperative while attempting to maintain intelligence confidentiality in the face
of what he termed as "ongoing investigations surrounding the Twin Towers tragedies by the CIA, FBI, Justice, and
Treasury Departments." However, this was in great contrast to an FBI spokesperson who refused to offer either his first
or last name, while declining comment on any matter related to events of September 11.
During a series of calls, some spokespersons quickly attempted to defer and deflect questions to another government
agency, i.e. "We don’t deal with that issue. Call the other [entity]."
However, many would agree, given the evidence, that the 9-11 terrorism is closely linked to economic issues. President
Bush has stated that this is "economic warfare." Yet few appear to be questioning an apparent paucity of critical
information sharing among key government agencies on the issue.
As U.S. investigators retrace the financial trails connecting the Twin Towers, terrorist hijackers and their
accomplices, many of whom may still be in the country, evidence is being turned up by FBI, CIA, Justice, Treasury and
NSA that does involve global banking conglomerate Deutschebank-Alex Brown.
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$2.5 million unclaimed UAL investor profits
For example, according to a 10-19-2001 Wall Street Journal report, an unnamed investor purchased 2,000 United Airlines
(UAL) put option contracts through Deutsche Bank-Alex Brown on September 6 -- betting the stock would shortly plummet.
And USA Today reported that an individual purchased 810 UAL puts on August 6.
A Baron’s source claimed on 10-8-2001 that the pre-attack UAL order placed through Deutsche Bank was for 2,500
contracts which were "split into 500 chunks each, directing each order to different U.S. exchanges around the country
simultaneously."
According to San Francisco Chronicle reporters Christian Berthelsen and Scott Winokur a source familiar with the UAL
trades said investors have yet to claim $2.5 million in profits on contracts purchased before United airliners crashed
into a New York Trade Tower and a deserted Pennsylvania field on September 11.
The Chronicle source also identified Deutschebank-Alex Brown as the investment firm used to purchase some of the UAL
options; and Rohini Pragasam, a bank spokeswoman, declined to comment on the transaction.
The source (who requested anonymity) said, "Usually, if someone has a windfall like that, you take the money and run.
Whoever did this thought the Exchange [NYSE] would not be closed for four days. This smells real bad."
The German news weekly Der Spiegel revealed that Deutschebank also handled accounts worth about $100 million for Osama
bin Laden's family. These were part of 10 accounts it suspected were linked to terrorists or terrorist activities and
which it later handed over to German authorities after the attacks, according to a report in Britain’s The Guardian. But
no further comments have been forthcoming from the financial giant.
German Central Bank President Ernst Welteke said a study -- concerning principal hijack subjects residing in Germany
and unusual patterns in short-selling of insurance, airline and other financial company shares -- pointed to "terrorism
insider trading" in those stocks.
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The SEC Is Investigating
A phone interview with Securities and Exchange Commission (SEC) press spokesman John Nester, of the Washington, DC
office, revealed that the Commission, "has already forwarded a general request to Deutschebank-Alex Brown and other
investment firms for unspecified information related to the suspicious put option contracts placed prior to the attacks
on the Trade Towers and the Pentagon." But the spokesman declined comment regarding the identities of complying banks or
the contents of any information obtained.
Nester augmented his response by adding that "according to SEC Associate Director of Enforcement Bill Baker -- who just
spoke on a panel outside New York last week -- our SEC probe is much broader than investigations made by countries in
Europe (who also lost citizens), many of whom have already closed their financial investigations of investment banks
like Deutschebank." No results of those probes have been made public.
While the SEC media director said "the investigation is still ongoing with no current conclusions," Nester (speaking
for the SEC), had difficulty explaining the job description of current New York Stock Exchange (NYSE) Executive Vice
President for Enforcement, David P. Doherty. He would only say that the NYSE "regulates itself as an SRO or
self-regulating organization...." This vague answer is all the more provocative because Doherty is a retired General
Counsel of the Central Intelligence Agency.
Nester added, "The SEC has oversight responsibility regarding the NYSE, and we are also working with Justice, Treasury,
and the FBI, having set up professional point men at each firm we are looking at -- so we don‘t have to reinvent the
wheel every time we call a company [related to the attacks] to get an answer to a question."
The "reinvent the wheel" statement raised an eyebrow regarding the level of corporate cooperation in the investigation,
although Nester declined to add further comment.
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In Spite of CIA Ties the NYSE Is Little Help
When asked about the status of the investigation into the disproportionate pre-attack stock option trades involving
United and American Airlines, Merrill Lynch, Marsh and McLennan Insurance, Morgan Stanley, Citigroup, Bear Stearns, and
American Express, etc. -- all icons of American capitalism -- NYSE Communications Director Ray Pellecchia said, "We
don't even confirm that there is an ongoing investigation."
"We report to the SEC as a matter of course," Pellecchia added. But after being referred to as a "persistent piece of
work," this writer asked Pellecchia to discuss Doherty’s role in the investigations. He said, "We stand by this
statement."
And after pressing for information about what the NYSE is actually doing to investigate the suspicious trades on behalf
of thousands of victims’ families who may be concerned about the "prior-knowledge" issue, Pellecchia still declined to
confirm that Doherty's enforcement office had even sent a report to the SEC.
When asked why so many former key CIA executives currently hold, or have held in the past, top level executive
management positions connected in some way to the stock market via either the SEC, NYSE, or other investment banking
entities, Pellecchia replied tersely, "I am quite aware of Mr. Doherty's background and experience."
Pellecchia also declined to discuss anything related to current CIA Executive Director A.B. "Buzzy" Krongard and his
past relationship with Alex Brown.
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Expecting Miracles?
Questions remain as to who will ultimately take center stage in investigating conflicts of interest or the real-time
monitoring of world financial markets by U.S. intelligence entities to protect national security; let alone terrorist
ties to wealthy Saudi private clients at global financial institutions having direct access (via correspondent banking
relationships) to U.S. banks.
For 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.
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© Copyright 2001, 2002 Thomas Flocco and Michael Ruppert. Used with permission.
- Tom Flocco is an independent investigative journalist. Contact him via email at: TomFlocco@cs.com