The Real Deal: HUD Sec. Mel Martinez' Hotseat

The Runaway Black Budget

This month, Alan Greenspan, Chairman of the Federal Reserve Bank, indicated that the United States government may have to cut Social Security benefits. His subliminal threat was – let us finance corporations with the federal credit – aka, “piratization of federal retirement flows” -- or else we will cut or cancel your retirement income.

Greenspan's intimation was that something had to fund tax cuts, potential insolvency in the mortgage markets and deficit financing of negative return on investment global empire.

Destined for decades, the two most politically powerful entitlements on the planet – the US black budget and Social Security – are squaring off against each other overtly in the appropriations and federal credit allocation process. With the 9-11 wind in their “War on Terrorism “sails, the private investors that hide behind the black budget are moving the black budget from behind the covert veil of the National Security Act of 1947 and the CIA Act of 1949 and successive legislation, executive orders and judicial decisions and into the overt growth of the military, intelligence and enforcement budgets. In the process, their harvesting of communities and investors--- both foreign and domestic -- is accelerating to finance the engorgement.

Wealthy Welfare is declaring a “gross first lien” on the cash flows of governmental financial apparatus throughout the world. In a free press, the headlines would read:

Seeing and Transforming the Black Pearl “Piratization” Ship

Alas, some believe that preserving retirement benefits and creating new skills and jobs in the English speaking nations is hopeless in the face of this financial juggernaut. They equate our current G-8 economic warfare leadership to the capital markets equivalent of the Black Pearl pirate ship in the movie “Pirates of the Caribbean.”

If you have seen the movie, you know why things are far from hopeless. The pirates back up as soon as the folks who they are stealing from pierce the mystery of the fog that surrounds them. Without the mystery of how they are stealing and getting away with it – the pirates' power is reduced to a token force. This is in part because pirates crave admiration and are disloyal to each other. They get irritated when events illuminate their imperfections – including how much they dislike and are stealing from each other. As we lose our fear of them and learn how to encourage their divisions to our benefit.

A moral of the story is that pirate booty can be traced and seized as the mystery of who is doing this and how they are doing this becomes widely understood.

So let's start by defining the difference between privatization and “piratization.”

"Privatization" is the transfer of government assets to private interests at market price – i.e. fair market value. This includes transferring subsidies, tax benefits and credit at a subsidized price where the private parties are held accountable to provide the public goods and services that warranted the subsidy.

"Piratization" as opposed to privatization is when you transfer government assets to private interests at below market prices – i.e. simply allowing the pirates to steal from government coffers. This occurs when you transfer rich subsidies, tax benefits and credit at a subsidized price where the public purpose is simply a public relations pretext for the giveaway to the pirates. This also occurs when you rig government contracts at prices not justified by performance.

Piratization is the most profitable business on the planet. We are privitizing federal, state and local government by stealing everything.

One of the dangers of doing so, is that we then become ever more dependent on borrowing money to finance our Government deficits from the people who are creating those deficits by stealing from our pension funds and government.

If you wanted to write a “Joy of Piratization” cookbook for how to make money on stealing from government and communities, there is no better place to see all the recipes than the US Dept. of Housing & Urban Development's (HUD's) $trillion portfolio of Federal Housing Administration (FHA) mortgage insurance, defaulted mortgages and Ginnie Mae mortgage backed securities.

HUD – using forms providing at essentially all home sales and financings – has the richest databases on most American's land, homes, apartments, nursing homes, hospitals and other real estate. In short, HUD is a treasure chest of intelligence on “how the money works” in U.S. communities. Access and control of this information reminds us of what Nicholas Negroponte said, “data about money is worth more than money.”

Keep in mind that the chief strategic advantage of the pirates is their ability to mobilize global capital in liquid stock markets. However, that means they have a serious vulnerability. The liquidity of their financing mechanism depends on a widespread notion that they are not pirates. They need a Myth of the Rule of Law to keep their financial spigot working. Why would someone put money in a bank if they thought it would be stolen? Put the integrity of their financial arrangements in question in the popular mind, and the Black Pearl pirate ship sinks.

Introducing Mel Martinez

Mel Martinez is a pirate. Mel Martinez's core competency is making sure that piracy has a respectable face on one hand, while ensuring that the stealing goes on unencumbered with the other hand. Mel Martinez is an attorney so he understands the power of moving sensitive information behind the veil of “attorney-client privilege” and “national security law.”

In 2000, Mel Martinez was the co-chair of the Florida campaign for George W. Bush, brother to Florida Governor Jeb Bush. That was the campaign that delivered the presidency by cleansing the voter rolls of legitimate voters. Florida was actually won by a recount and legal team financed in part with money and jet services from Enron.

Enron was more than paid back when the Florida pension funds, chaired by Jeb Bush, enjoyed a $340million loss buying Enron stock after the new team took the White House. This Floridian purchase and loss ---engineered by a money manager who sat on the Enron board and finance committee --- just happened to coincide with large insider sales by Enron's board, management and Bush Administration insiders right before Enron hit the wall.

The rape of Florida pensioners by Enron insiders was one of the more overt transfers of our retirement savings to fund pirates. However, it pales in comparison with Greenspan's recent reminder that our Social Security assets had already been bootied out the black budget federal credit back door even before pending piratization proposals for the Social Security program are adopted and used to further pump and dump global stock markets. Engineering these new piratization proposals on threat of maintaining benefits is no doubt where Greenspan is going.

Mel was rewarded with a cabinet appointment as Secretary of the Department of Housing & Urban Development (HUD). HUD is the agency with responsibility for the health and lawfulness of the US mortgage markets. When Greenspan intimated the other day that the largest US mortgage government sponsored enterprises, Fannie Mae and Freddie Mac, may be insolvent, he was alluding to Mel Martinez's regulatory support in helping the pirates loot investors and homeowners in the mortgage markets.

IN PART II

Where is the $59 Billion Missing from HUD & What Does that Have to do with Drug Running & Cuba?

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For all links for events described in this column, see links at the Mel Martinez Hotseat.

For all inquiries about the Mel Martinez Hotseat, e-mail friends@whereisthemoney.org or leave at the forum link provided at the Hotseat.

Catherine Austin Fitts is the President of Solari, Inc., a founding member of UnAnsweredQuestions.org, whereisthemoney.org? and member of the Advisory Board of Sanders Research Associates. Ms. Fitts is former Assistant Secretary of Housing-Federal Housing Commissioner in Bush I and a former managing director and member of the board of directors of Dillon Read & Co. Inc.

Henri Poole is a software activist and internet campaign strategist. He is the founder of affero, civicactions.com and whereisthemoney.org? Henri is a member of the board of the Free Software Foundation.

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