OG011
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           Allegations Regarding Vince Foster, the NSA, and 
                 Banking Transactions Spying, Part XI

                        by J. Orlin Grabbe

        While Agha Hassan Abedi carried on a crusade to develop a Pakistani
nuclear capability through the tentacles of his global bank--the Bank of 
Credit and Commerce International (BCCI)--BCCI itself played a key role in 
U.S. intelligence gathering.  It did so by providing financial services to 
arms dealers and associated terrorists.  Financial information about who 
was paying whom, presented a fairly clear picture about what was taking 
place in the purchase and movement of armaments and strategic technology.

        If, for example, a check was drawn on the Sitico account at BCCI
Luxembourg and deposited in, say, Raytheon's account at Bank XYZ in Dallas, 
then this information could be combined with the knowledge that Sitico was
an Iraqi front company, and an analyst might conclude that Iraq was purchas-
ing spare parts for the HAWK.  Of course, few (if any) financial transactions 
would be this straight forward, so considerable effort would be needed to 
trace the flow of money.  (This was especially true considering that some of 
BCCI's accounts were kept in longhand and written in Urdu.)

        But, looking forward, the loss of BCCI did considerable damage to 
the process of intelligence collection for:

        "The greatest concern of U.S. decisionmakers in upcoming years
        is likely to be restricting the spread of advanced military
        technologies--particularly nuclear, chemical, biological, and
        ballistic missile technologies--and preventing the use of such
        technologies as have been acquired.  These tasks will require
        monitoring the pursuit and application of those technologies by
        a number of countries--including Israel, India, Pakistan, Iran,
        Iraq, and North Korea.  In addition to monitoring within-country
        activities, attention will have to be directed toward the licit
        and illicit international supply of various components of those
        technologies" (Jeffrey T. Richelson, *The U.S. Intelligence
        Community*, 3rd edition, Westview Press, 1995).

        Moreover, the vast amounts of banking and financial data being sucked 
in and stored for analysis by the NSA mandated a separate facility to analyze 
and process the data.  The volume of financial data was already taxing NSA 
resources.  (NSA's data processing capacity has been recently expanded 
through installation of the world's third fastest supercomputering center 
[according to rating criteria that may, or may not, be valid].  The center 
is located at E-Systems of Dallas, Texas, a company that was purchased in 
April 1995 by Raytheon for $2.3 billion.)

        These concerns, and others, lead to the creation of FinCEN, located 
in Vienna, Virginia.  Because FinCEN was established as a unit of the U.S. 
Treasury, NSA's COMINT and ELINT could be  combined with domestic sources of 
information, including information from the Federal Reserve and the 
Treasury's own data bases, which included various types of financial, tax, 
and customs information.  It also meant the merger of foreign and domestic 
intelligence.  As one cypherpunk has noted, national borders are just speed 
bumps on the information superhighway.
        
        A November 1993 GAO report on FinCEN lists 84 positions (out of 
207 staff members)  referred to as "intelligence analysts", most of whom 
come from the NSA. "FinCEN, planned as a hunter of tax-evaders, has become 
a hunter of economic and financial secrets at home and abroad" (J. Michael 
Springmann, "FinCEN--American Financial Intelligence Service," 
*Unclassified*, No. 33, Summer 1995.)

        "And, it is clear from the March 29, 1995 draft of Clinton's
        executive order on access to classified information, that
        FinCEN's brief has been expanded.  It will, in the future,
        conduct security clearance investigations for all government
        employees and contractors with access to classified infor-
        mation, in the process examining their bank statements, credit
        histories, and foreign travel records" (Springmann).

        FinCEN now issues all regulations under the Banking Secrecy Act, 
the basis of all U.S. money laundering legislation.  

        Section 5313 of the Banking Secrecy Act (BSA) requires a Currency 
Transaction Report (CTR) of  cash deposits or transactions of $10,000 and 
above, which is IRS Form 4789, and a Currency Transaction Report by Casinos 
(CTRC), which is IRS Form 8362.  Section 5316 of BSA also requires a Currency 
or Monetary Instrument Report (CMIR) for transport of $10,000 or more of 
currency in or out of the U.S.  This is Customs Form 4790.  Section 5314(a) 
of BSA requires reporting of foreign bank or financial accounts whose value 
exceeds $10,000 at any time during the preceding year.  This is called a 
Foreign Bank Account Report (FBAR) and is Treasury form TDR 90-22-1.  
Section 60501 of  the IRS Code requires the reporting of business 
transactions involving more than $10,000 cash. These are reported on IRS 
Form 8300.  

        These and other forms are entered into the Treasury Financial Date 
Base (TFDB) and become available on-line in the Treasury Enforcement 
Communications System, TECS II.  The TFDB data are processed through the 
FinCEN Artificial Intelligence (AI) System, which is trained to identify 
suspicious transaction patterns.  

        FinCEN's AI system has now been joined by thousands of 
bio-intelligence (BI) systems also programmed to detect suspicious activity.  
In 1992 Treasury (now operating through FinCEN) was given authority to issue 
regulations on "suspicious transactions" reporting (Title 31, USC Sec. 
5318(g)).  Under this regulation, your banker (a BI system) is required to 
report any suspicious behavior on your part.  (So don't even think of 
looking cross-eyed at him or her.)

        Private companies are also jumping onto the AI bandwagon to build 
products to analyze banking transactions:

        ". . . UK software company InterAcess Risk Management
        has unveiled Syfact, a software package designed to analyse
        the relationships between apparently unrelated accounts and
        spot potential irregularities between them.

        "The package can run through an entire bank's account
        holders, allowing compliance officers to build a diagram
        of laundering patterns of fraudulent activity, which,
        InterAccess says, would normally take months to construct.

        "The system logs suspicious transactions for investigation 
        against other events, either within the bank's own systems
        or in collaboration with other organisations.  It also is
        designed to be used by criminal intelligence agencies for
        the same purpose" ("Technology to aid and curb crime," 
        *Money Laundering Bulletin*, July 1995).

        FinCEN's director, Stanley Morris, has targeted Internet
banking and "cyberlaundering" as one of his top priorities.  

        "The term 'cyberspace' may send chills down the spines of many,
        but money launderers are probably not among them.  It is likely
        they delight in the murky potential it provides for plying
        their trade beyond the scrutiny of the government agents who
        pursue them. . . .

        "Stanley Morris, director of the Treasury Department's Financial 
        Crimes Enforcement Network, has targeted cyberspace banking 
        as one of FinCEN's highest priorities. . . .

        "All [cyberspace banks] operate in an environment where identities 
        are often concealed, national borders do not exist and transactions
        are instantaneous and potentially untraceable. . . .

        "Cyberspace banking will attract money launderers because of
        its potential to aid them in the three classical areas of money
        laundering [placement, layering, and integration]....

        "If cyberbanking permits person-to-person cash-like transfers,
        with no involvement of cash, existing U.S. currency reporting
        regulations technically will not apply." (" 'Cyberlaundering' poses 
        threat to controls," *Money Laundering Alert*, April 1995.)

So now money launderers join child pornographers, terrorists, conspiracy
theorists, and hacker-crackers in the government litany of alleged Internet 
evils. To some extent, the apparent concern may be duplicitous.  *For the 
NSA is heavily involved in several of the enterprises that are rushing to 
become "cyberspace" banks.*  The NSA was late getting into the financial 
services game, but it is now attempting to seize the initiative in the area 
of its comparative advantage:  information technology. 

        And in another respect, FinCEN's brief  to catch money launderers 
is certainly duplicitous.  For who is better posed to run an undetected 
money laundering operation than the FinCEN money laundering cops?  

        The integration of human, communications, and electronic intelligence
(HUMINT, COMINT, and ELINT) in FinCEN-type environments required the 
construction of a common data base standard so that information could easily 
be transferred between different agencies and different applications.  The 
standard that was decided on was originally implemented at the Justice 
Department in a software system for federal prosecutors to keep track of the 
vast amounts of data involved in a legal case.  This was the PROMIS system 
partly developed and enhanced through a contract between the Justice 
Department and a Washington-D.C.-based firm called Inslaw.  

        This data standard, embodied in the PROMIS software, was implemented
at the Justice Department, the NSA, the CIA, and the NSC.  PROMIS was also 
sold to the Federal Emergency Management Agency to keep track of individuals 
(in a data base called MAINCORE) who were to be rounded up and incarcerated
in the event of certain types of "national emergencies".  It is also at the 
heart of FinCEN's data collation efforts.  

        The PROMIS software--whether equipped with a Trojan horse and sold 
to foreign intelligence organization, or similarly modified to spy on banking 
transactions--provides the key to a scandal that links the covert collection 
of data on individuals, money laundering in Arkansas and elsewhere, defense 
payola around the nation, and nuclear espionage at the White House, to the 
deaths of Danny Casolaro and Vince Foster.
 
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        INTERMISSION:  POP QUIZ WITH RESPECT TO PREVIOUS 
                        AND FUTURE POSTS

        1.  John Steuri, Chairman and CEO of Alltel Information Services
        (formerly Systematics), says in a memo to Jim Norman, "We have 
        no present or prior relationship whatsoever with any company 
        called E-Systems."  Is he willing to swear to this under oath?  
        
        2.  If Caspar Weinberger's name is allegedly on account number
        KPFBMMBODE at the Union Bank of Switzerland , then what six names 
        are allegedly on account number KPFBMMBODB at the same bank? Is the 
        name of a U.S. senator in any way linked to this second account 
        number?

        3.  Who was the president of Panama whose brother wrote a paper 
        "Panama as an International Banking Center" at the Wharton School 
        of the University of Pennsylvania under my supervision?

        4.   What major U.S. bank is in danger of losing the entirety of 
        its equity base because of money laundering and RICO violations?

        5.  What top Federal Reserve official is also involved in money 
        laundering?

        6.  What secret government communication division is located in 
        Manassas, Virginia?  Why was one of their employees named Standorf 
        found beaten to death in his car at National Airport?  Was it 
        because he had delivered to Danny Casolaro computer printouts that 
        showed the details of wire transfers from BCCI London and the World 
        Bank to accounts in the Cayman Islands and Switzerland?  Did some of 
        these transfers represent payments to U.S. government officials for 
        sales of the PROMIS software to foreign governments? 

        7. Does Harry C. Wechsler of Boston Systematics have MAINCORE
        clearance?

        8.  What document concerning Systematics was given to Vince Foster 
        by Webster Hubbell the night before Foster died?  

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                          [To be continued]