I am still amazed when I hear comments that the U.S. housing bubble started in this decade. In November 2001, I presented a paper at an investment conference in London in one of many attempts from 1997 on to warn Americans and the global financial community about what was happening:

The Myth of the Rule of Law

Solutions begin with the truth. Mortgage fraud did not begin with George W. Bush. It did not begin with the Clinton administration or with the first Bush administration. Nor did financing America with genocide begin with bringing narcotics into American cities after WWII. Remember, the land you and I live on was settled by killing and pushing off those who were here when our ancestors arrived. Much of the capital used to build this country was pooled through the use of slave labor and warfare.

It is essential to understand that U.S. mortgage fraud has a very old and deep history. For those of us who cleaned up mortgage fraud in 1989, Iran-Contra was not just about HUD fraud. It was about getting money to fund American power.

Some things never change.

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2 Comments

  2. Catherine,

    Doesn’t this smell of a “business as usual for
    the elite” drug smuggling/laundering enterprise
    fronting as a weapons supplier?

    The company committed fraud at the tax payer’s
    expense.
    Isn’t the Justice Department (as you’ve said
    involving the Enron case)
    obligated to seize the company’s profits or
    assets to return them to the US treasury?

    article:
    http://www.nytimes.com/2008/03/27/world/asia/27ammo.html?pagewanted=1&_r=1&ref=asia

    excerpt summary:
    ”
    This week, after repeated inquiries about AEY’s performance by The Times, the Army suspended the company from any future federal contracting, citing shipments of Chinese ammunition and claiming that Mr. Diveroli misled the Army by saying the munitions were Hungarian.

    As part of the suspension, neither Mr. Diveroli nor his company can bid on any further federal work until the Army’s allegations are resolved. But he will be allowed to provide ammunition already on order under the Afghan contract, according to internal military correspondence

    Public records show that AEY’s contracts since 2004 have potentially been worth more than a third of a billion dollars. Mr. Diveroli set the value higher: he claimed to do $200 million in business each year.

    Several military officers and government officials, speaking on condition of anonymity because of the investigations, questioned how Mr. Diveroli, and a small group of men principally in their 20s and without extensive military or procurement experiences, landed so much vital government work.

    “A lot of us are asking the question,” said a senior State Department official. “How did this guy get all this business?”

    To be accepted, the company had to be, in Army parlance, “a responsible contractor,” which required an examination of its financial soundness, transport capabilities, past performance and compliance with the law and government contracting regulations.

    Both the Army and AEY have treated the sources of the ammunition the company purchases as confidential matters, declining to say how and where the company obtained it, the prices paid or the quantities delivered.

    But records provided by an official concerned about the company’s performance, a whistle-blower in the Balkans and an arms-trafficking researcher in Europe, as well as interviews with several people who work in state arsenals in Europe, show that AEY shopped from stocks in the old Eastern bloc, including Albania, Bulgaria, the Czech Republic, Hungary, Kazakhstan, Montenegro, Romania and Slovakia.

    Some arsenals contain ammunition regarded in munitions circles as high quality. Others are scrap heaps of abandoned Soviet arms.

    The Army’s contract did little to distinguish between the two.

    NATO rules require ammunition to be tested methodically over its life.

    The Soviet Union, which designed the ammunition that AEY bought, developed similar tests, which are still in use. But when the Army wrote its Afghan contract, it did not enforce either NATO or Russian standards.

    It told bidders only that the munitions must be “serviceable and issuable to all units without qualification.”
    “

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