[CAF Note: I originally published this on Scoop Media on May 3, 2004. Now that Presidential candidate Donald Trump has introduced a former Vice President of CACI as one of his key foreign policy advisors, I thought I would republish here at solari.com]
“And judgment is turned away backward, and justice standeth afar off: for truth is fallen in the street, and equity cannot enter.”
— Isaiah 59:14
by Catherine Austin Fitts
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Neighborhood Financial Transparency – For Defense Contractors Only?
One day last year, while sitting through one of my depositions with the Department of Justice (DOJ), I was impressed by the extraordinary number of documents managed by the litigation support contractor. I asked the gracious young man doing the work who his employer was. He said he worked for CACI. That came as a bit of surprise.
In 1997, my former company, Hamilton Securities was building a software tool, Community Wizard, and related suite of tools. Community Wizard would help communities access information through the Internet about federal sources and uses of taxes, spending, credit and other resources in their neighborhood. The related suite of tools would help Hamilton analyze values of outstanding homebuilding, mortgage and other securities with street level data about communities.
Hamilton was an investor in a data servicing company, Edgewood Technology Services, in a residential community in Washington, DC. The notion was to prototype outsourcing growing taxpayer funded data servicing needs to American communities in a manner that would save money for the government, generate new jobs and skills in communities losing jobs as a result of globalization and generate profits for private real estate and pension fund investors.
At that time, CACI was the leading provider of geographic information systems and data to the federal government. Hamilton was a CACI customer. Richard Armitage, now Deputy Secretary of State was on the CACI board along with numerous board members with decades of experience working in the military and intelligence agencies.
Community Wizard is no more. It was destroyed –as a practical matter –by what appears to be the combined effort of the National Security Council, the Department of Justice Office of Attorney General and Civil Division, the D.C. US Attorneys Office and the HUD Inspector General Office with the help of a government informant, numerous members of the D.C. bar and the federal judiciary. The complicity of the judiciary was quite damaging — particularly the actions of former CIA General Counsel, Judge Stanley Sporkin. If you start to research Iran Contra narcotics trafficking and financial fraud allegations, Stanley Sporkin and Richard Armitage’s names often surface.
Judge Sporkin ordered our digital files seized and held under court control under false pretext for many years in a process where I was not allowed to know who was accusing me and of what I was accused. Sporkin created a process where my company and I could be destroyed without an opportunity to know or address the accusations against us.
After nine years of managing their mess, imagine my delight at hearing that the company paid so much by taxpayers to collect and manage data on all of us was making money by providing litigation support to DOJ’s efforts. In short, CACI had a contract with DOJ to help stop American citizens from getting access to geographic information and the related skills, jobs and equity.
There are numerous reasons why the suppression of citizen access to government funded place based data is important to every American. The most important is that transparency and accountability in government requires that citizens can easily understand in a timely way what is happening with the resources that we give to government. We need access to reliable information about government taxes, spending and credit that conforms to the world that we walk around in and understand. When we are in the dark about how government manages resources in the political jurisdictions in which we live and vote, our money can be stolen without our being able to see how and to stop it.
A combination of The National Security Act of 1947 and The CIA Act of 1949 have created a budget mechanism that allows the CIA to spend as much money as it wants “without regard to the provisions of law and regulations relating to the expenditure of government funds.” In short, the CIA has a way to fund anything –legal or illegal – behind the protection of national security law. Some refer to this as the “black budget.” As a financial matter, the black budget over the last half a century has grown widely out of control. As a political matter, the governance process used to manage the black budget has become the real government that runs America. It is a secret government with zero transparency and accountability.
If communities had tools like the ones that I was building, we could do something about illuminating and transforming the black budget in ways that are safe and practical in our every day lives– like creating jobs and businesses for ourselves and our neighbors and removing narcotics trafficking and the War on Drugs from targeting our children.
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There is Over $3.3 Trillion Missing from HUD and DOD
CACI recently acquired AMS. AMS is the company that is credited with installing and operating computer systems at the Department of Housing and Urban Development (HUD) that failed — resulting in over $59 billion going missing and the agency refusing to produce audited financial statements. AMS was not fired, nor did they return the several hundreds of millions they had been paid. The proposed solution was to buy more products and services from AMS.
AMS is also a leading financial software contractor at the Department of Defense (DOD) where over $3.3 trillion is missing. In response to these problems, DOD has proposed new financial systems lead by IBM, with subcontracts to the firms who were integral to building and operating the systems missing over $3.3 trillion. One of the subcontractors is AMS. Another is CSC DynCorp.
The fact that over $3.3 trillion was missing from the US Treasury care of DOD and HUD was a very big deal until 9-11. After 9-11, the issue was swept under the rug as significant increases in our national defense, intelligence and enforcement budgets funded rich new contracts for contractors such as CACI and CSC DynCorp. The Army took the position that they could not produce audited financial statements for fiscal 2001 as a result of the loss of financial personnel due to 9/11.
What that means is the government financial system went more widely out of control and was able to take additional steps to prevent the transparency that instills integrity and prevents waste and stealing.
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Richard Armitage’s Standards for Contractor Performance
Last year, the State Department awarded a sole source contract for up to $500 million to CSC DynCorp to manage the police, judiciary and prisons in Iraq. Immediately prior to the contract award, DynCorp’s visibility had been increased by litigation in the United States and the United Kingdom involving employees who had tried unsuccessfully to stop sex slave trafficking by DynCorp employees while working on government contracts, including a contract to provide police and enforcement services. One of the issues involved was the relative lawlessness of private contractors in war-torn areas who are not subject to the same laws and discipline as military personnel.
When questioned about the DynCorp award, Richard Armitage, retired CACI board member, now Deputy Secretary of State, wrote in a letter to Congressman Christopher H. Smith, “It is unfortunate that the actions of a very small number of individuals years ago overshadowed the honorable work of so many others…”
While I was sitting in my DOJ deposition watching CACI profit from document production, I meditated on Armitage’s standards of performance. My company, Hamilton Securities generated $2.2 billion of profits for the government. The government fired us on a pretext that a subcontractor had made a mistake that we had reported to the government long before. The government accused us of gross negligence constituting fraud although privately they admitted, and their expert witness confirmed, there were no damages. Indeed, we had generated far more profits on the sales in question for the government than the government had expected and we were under no contractual obligation to do so. The courts ruled in our favor — there was no breach of the contract other than on the part of the government. However, DOJ refuses to pay us which means CACI is still profiting on the destruction of Hamilton.
As I sat in the deposition after nine years of being terrorized by DOJ, I thought, perhaps if my employee had been buying and selling children with the local mafia and using them as sex slaves instead of creating transparency, saving money for the FHA Fund at HUD and creating software skills and jobs in residential communities, the company would have kept it’s contracts in the Clinton Administration and be wining sole source contracts with Mr. Bush’s Administration today. After all, the Clinton and Bush families were partners during Iran Contra. Indeed, Iran Contra profits seemed to have financed more than a few careers of people who are good at stopping transparency.
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9-11 Profiteering – A Bush Administration Success
If the goal of an Administration is to make money for those who put them in office, the failure to prevent 9-11 and the response to 9-11 has to date been the Bush Administration’s most significant national security accomplishment.
Sweeping the $3.3 trillion plus missing from the US Treasury under the rug was a significant accomplishment achieved on the wings of 9-11 outrage. However, the $3.3 trillion had already disappeared down the black budget hole. The outsourcing of significant new military, intelligence and enforcement contracts was fresh cash for the black budget players.
To understand the profits generated to stock market investors in defense contractors and arms manufacturers, one need only visit the stock charts and stock proxy filed with the Securities & Exchange Commission (SEC) to see why 9-11 was quite successful for the Bush Administration and the Washington status quo.
CACI’s investors, for example, have enjoyed a significant gain on their investment.
One has only to look at the stock charts and annual proxy material available on CACI’s website for the evidence.
CACI International Inc $100.00 $106.82 $ 92.58 $223.15 $362.64 $325.7
Russell 2001 Index 100.00 116.51 116.04 116.70 106.67 104.92
Company Peer Group 100.00 118.67 106.02 111.43 81.08 55.33
Methodology:
The chart shows how $100.00 invested as of June 30, 1998, in shares of CACI common stock would have grown during the five-year period ended June 30, 2003, as a result of changes in the Company’s stock price, compared with $100.00 invested in the Russell 2000 Stock Index, and in the Company-selected peer group of companies (“Company Peer Group”).
The Company Peer Group consists of the following companies: American Management Systems, Inc., Comarco, Inc., Computer Sciences Corporation, Electronic Data Systems Corporation, Keane, Inc., Network Equipment Technologies, Inc., Sourcecorp, Inc., and Titan Corporation.
Source: From October 17, 2003 SEC Filing, CACI Definitive Proxy Statement, available at Investors Relations Link at CACI Website.
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The Profits of Terror
The Guardian UK on April 30th reported photographs showing the torture and sexual abuse of Iraqi prisoners in a US-run prison outside Baghdad. The photo graphs have emerged from a military inquiry. The Guardian stated, “The scandal has brought to light the growing and largely unregulated role of private contractors in the interrogation of detainees.” The article states, “The investigation names two US contractors, CACI International, Inc and the Titan Corporation, for their involvement in Abu Ghraib….According to the military report on Abu Ghraib, both played an important role at the prison.”
There is no mention of CSC DynCorp. Given that CSC DynCorp is being paid up to $500 million to run prisons, judiciary and enforcement in Iraq, I am curious to know exactly how the chain of command and transparency and accountability really works in Iraq.
As I read the report, I meditate on how to communicate with the millions of people who want to end this war. I remember as a child seeing a movie in which the general explained to his staff that the way to stop an army was to cut off the gas that their tanks, trucks, planes and jeeps required. One way to stop a group of people who are conducting themselves outside the boundaries of the law is to shut off their financing. In the context of economic warfare, money is the gas.
Which brings me back to some of the critical unanswered questions of our day.
1. Who has the more than $3.3 trillion missing from the US government?
2. With $3.3 trillion missing, are the US Treasury and Ginnie Mae engaged in securities fraud? Indeed, how many US Treasury and Ginnie Mae securities can $3.3 trillion buy?
3. How many elections, rigged voting computer systems, foundations, media, land and companies can $3.3 trillion buy?
4. With no financial transparency and accountability, can any President of the United States get elected or manage with integrity?
How do we help Americans understand the incredible opportunity we have to shut off the financing of war and create new jobs if we will organize to bring transparency to government resources in our neighborhoods and start to “vote with our money” for honest leadership? For with no transparency, there will be no equity – not under divine law or the laws of science and financial wealth. Indeed, in a healthy culture and economy such laws are one and the same.
I once had a partner who said the companies like CACI were the information equivalent of roach motels. The data went in but it never came out. At the time I thought he was being a little rough. Looking at the pictures of prisoners tortured in Iraq, I’m thinking he was too nice.
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LINKS FOR CACI:
CACI
http://www.caci.com/
For CACI stock price charts
http://www.shareholder.com/caci/chart.cfm
U.S. Military in Iraq Torture Scandal
by Jeffrey S. Kaye
https://truthout.org/articles/iraqi-torture-scandal-touches-highest-levels-of-nato/
LINKS FOR HAMILTON SECURITIES:
The Story of Edgewood Technology Services
by Catherine Austin Fitts
http://www.scoop.co.nz/mason/stories/HL0207/S00101.htm
Hamilton Litigation Background
Dillon Read and Co.
The Myth of the Rule of Law: The Destruction of Hamilton Securities
by Catherine Austin Fitts
November 2001
Dillon Read and Co.
The Real Deal on Enron: An Interview with
Catherine Austin Fitts by Dan Armstrong
http://www.scoop.co.nz/mason/stories/HL0304/S00031.htm
LINKS FOR RICHARD ARMITAGE:
Letter from Deputy Secretary Richard Armitage
re: Award of Sole Source Contract to DynCorp to
Provide Police, Judiciary and Prisons in Iraq:
Richard Armitage Quietly Confirmed as
Deputy Secretary of State
http://www.copvcia.com/free/politics/armitage_SS.html
Behind the Bushes
by Sam Smith
See Section on Richard Armitage
http://prorev.com/bush3.htm
LINKS FOR STANLEY SPORKIN
Stanley Sporkin: Bio & Selected Iran Contra Background
http://www.scoop.co.nz/stories/HL0405/S00014.htm
LINKS FOR CSC DYNCORP:
Time to Take Action?
by Kelly Patricia O’Meara
http://www.insightmag.com/news/2003/11/11/World/Time-To.Take.Action-540029.shtml
CSC DynCorp and the Economics of Lawlessness
by Catherine Austin Fitts
http://www.scoop.co.nz/mason/stories/HL0304/S00158.htm
LINKS FOR AMS:
Why is $59 Billion Missing from HUD? by Kelly O’Meara (November 2000):
http://civic.net/civic-values.archive/200010/msg00012.html
Cuomo leaves HUD in Shambles, by Kelly O’Meara (March 2001)
http://www.insightmag.com/main.cfm?include=detail&storyid=210881
Inside HUD’s Financial Fiasco, by Kelly O’Meara (June 2001)
http://www.insightmag.com/main.cfm?include=detail&storyid=161113
HUD’s Financial Woes Continue, by Kelly O’Meara (April 18, 2003)
http://www.insightmag.com/main.cfm?include=detail&storyid=421370
Federal Lawsuit Adds to AMS Woes Company Also Faces Trouble in Ohio, Vermont
Washington Technology, July 2001
https://missingmoney.solari.com/government-contractors/
A Taxing Dilemma
Insight Magazine, April 2001
http://www.insightmag.com/main.cfm?include=detail&storyid=126235
IRS Boss Snagged a Clinton Waiver
Insight Magazine, May 2001
http://www.insightmag.com/main.cfm?include=detail&storyid=126262
News Alert: Eizenstat Explains Why He Gave Waiver to IRS Commissioner
Insight Magazine, May 2001
http://www.insightmag.com/main.cfm?include=detail&storyid=126257
How Can Rossotti Reform the IRS?
Insight Magazine, May 2001
http://www.insightmag.com/main.cfm?include=detail&storyid=125994
News Alert: Grassley Questions Rossotti’s Ties to AMS
Insight Magazine
http://www.insightmag.com/main.cfm?include=detail&storyid=210982
Rossotti Hires Raise Red Flags
Insight Magazine, September 20001
http://www.insightmag.com/main.cfm?include=detail&storyid=84966
