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Allegations Regarding Vince Foster, the NSA, and
Banking Transactions Spying, Part XXV
by J. Orlin Grabbe
What ties together cocaine in Arkansas, an assassinated Vince
Foster, Systematics banking software, NSA codes diverted to the Israelis,
hidden accounts at Pittsburgh's Mellon Bank, Iraq-bound technology from
Westinghouse and Kennametal (perhaps smuggled or escorted by Wackenhut
security), and bipartisan political payola?
One common thread concerns a global money-laundering operation
run out of Lima, Peru.
Just as two banks will not be sufficient to form an efficient
foreign exchange market, neither can a couple of isolated institutions
effectively launder money. Therefore anyone with large amounts of "dirty"
money to process must ultimately intersect with the global market for the
flow of laundered cash. A principal reason has to do with *layering*.
Classical money laundering involves three stages: placement,
layering, and integration. *Placement* is getting cash into the system.
This usually involves a friendly banker who doesn't fill out reporting
forms. *Layering* is a chain of transactions (these are often interbank
transactions) at least one of which needs to be invisible in order to
effectively break the monetary trail. *Integration* is getting the "clean"
money back to the original owner. This may take many forms, including
offshore "loans" which are never repaid.
Here is a thumbnail sketch of some of the money-laundering inter-
connections among the various subjects of discussion that have arisen in
this series of Internet posts.
1. Cocaine smuggled through Mena, Arkansas and elsewhere
(including, currently, the cross-border flow from Canada and
Mexico) generates huge cash profits which must be laundered.
I first learned of the Arkansas drug-related laundry around 1983,
about three years after it had gone into operation. Nicolas Ardito-
Barletta was then a World Bank economist, but one who would
shortly become President of Panama (prior to General Noriega).
Nicolas' brother took my class on international financial markets
at the Wharton School of the University of Pennsylvania, and
afterward wrote his advanced study project paper on Panama as an
international banking center under my supervision. The paper
focused on the economic incentives offered by the Panamanian
banking system. But privately we discussed the obvious demand
for banking services generated by the intercontinental cocaine trade.
The Arkansas laundry was well-known to Panamanian bankers.
2. Prohibitions on the export of weapons or advanced technology
similarly creates a profit opportunity for those willing to subvert
that prohibition. So another source of demand for laundering
services comes from smuggled nuclear technology, nuclear fuel, and
arms shipments.
Pittsburgh--whose environs encompass Kennametal, parts of
Westinghouse, and Mellon Bank--was a focal point for the
latter operation. Kennametal machine tools and Westinghouse
nose cones were shipped up the St. Lawrence to Montreal for
forwarding to Iraq. (Parts of the story of the arming of Iraq
may be found in Alan Friedman's *Spider's Web*; other parts
may be found in *Time*, "A Matter of Honor", June 21, 1993.
There is still much more untold.)
Has Westinghouse just been indicted for price-fixing? What about
Kennametal? Does some of the evidence involve the Mellon Bank
money-laundering operation? Has the money-laundering operation
formerly run through Mellon Bank now been moved to New York?
In the event the exchange involves arms for oil, the oil must
be brokered, sold, and the cash transferred to the relevant party.
The commodity divisions of investment banks are often involved
in this part of the transaction (a number of examples along this
line involve the defunct Drexel Burnham Lambert, one of my former
software clients).
3. Prohibitions on the sharing of "classified" information create a
profit opportunity for those willing to sell restricted information.
This is commonly known as "espionage", and those who commit
it--like Jonathan Pollard, Aldrich Ames, and Vince Foster--often
end up in prison or dead or both.
In this case the amount of money involved is often small.
Concealment is important, nevertheless, so the payoff--if
not in cash--often occurs through channels otherwise used
for the laundry.
Foster received deposits in offshore accounts for selling nuclear
codes. He was paid via covert channels. So also--one suspects--
were the hit men who took him out.
(The fact that Robert Goetzman used the royal "we" in "we did Foster"
on the day of Foster's death--in Debra von Trapp's account--does
not prove to me that he was actually involved in the hit, even if
the conversation occurred exactly as related. After all, there are
probably many people who would like to enhance their prestige by
claiming credit for the Foster assassination. But the timing of the
conversation would indicate Goetzman knew about it at approximately
the time it occurred. Did he have *advance* knowledge of the hit?
Does he even now know the identity of the contract agents involved?)
4. The Cabazon Indian nation comes into the story because, being
a sovereign nation, it was a way to avoid export restrictions and
to develop new weapons technology. It was also one of the sites
where Michael Riconosciuto helped create a backdoor version of the
PROMIS software. Even those sources who tell me that Riconosciuto
"lies a lot" confirm that he worked on the PROMIS software to
develop a mechanism for covert telecommunications access.
The PROMIS software enters the story in three ways: it is a
mechanism for tracking people, a mechanism for tracking money,
and a useful tool for managing a global laundry.
5. The early 1980s mandate to track terrorists (a "terrorist" being
defined as anyone who does things normally reserved for government
agencies) involved tracking the money and tracking the people.
PROMIS was designed to track people. It was especially useful
in tracking spies and other outsiders, the natural users of the
parallel monetary system, the global laundry. Sales of the PROMIS
software to security organization around the world were made by Earl
Brian, recently indicted in California and, reportedly, also Canada
(along with the noted alleged con artist, Ari Ben-Menasche).
6. The PROMIS software was modified to track money, and sold
to bank back-offices across the country and around the world by a
Little Rock company called Systematics (now Alltel Information
Services). The telecommunications backdoor in the software was
intended by the NSA to be used to spy on bank transactions in
real time. But there were also other possibilities, soon apparent
to enterprising souls.
If you run the back offices of banks, then you are in a position to
make--and keep track of--covert transfers through the "backdoor"
mechanism of PROMIS. That is, such transfers could take place
in such a way that one would not leave an audit trail, and in
such a way that the funds would never show up in the ordinary
accounting reports. That is, the same software was an
excellent way to manage the global laundry.
7. Despite the distributed nature of the software-controlled
back-office operation, the laundry in the U.S. has been mostly
concentrated in a couple of dozen financial institutions.
How could this escape the scrutiny of the Federal Reserve? The
answer is: Through complicity at a very high level. What does Alan
Greenspan have to say about all this? (Did you get the letter?)
8. But the back-door created a massive security hole in the
operation of banking cash-management and wire-transfer
services. Banks had gone out and purchased a software vault
with a massive steel door on the front, but a secret entrance
and exit to be used by enterprising thieves.
Did Alltel Information Services recently hire four more law
firms to represent it in the inevitable lawsuits to come?
Is this why Ross Perot is getting into the banking software
business?
Swiss Bank Corp. recently acquired a 24.9 percent stake in
Perot Systems Corp., which will form a new division called
Perot Systems Global Financial Services to run the bank's
computer operations. Perot Systems in turn is taking a 40
percent stake in Systor, a Swiss Bank Corp. subsidiary that
provides banking software.
Meanwhile, a 28-year-old Vladimir "Vova" Levin of St. Peterburg,
Russia, was recently reported to have, in connection with some
others, penetrated Citicorp's cash management services in New York,
and transferred more than $10 million to banks in six other countries
(including Switzerland and Israel). Although the hackers were caught,
due to excessive greed, a hefty $400,000 was not recovered.
How were they able to bypass Citibank's security procedures? "Is
there a mole in Citibank?" a *Wall Street Journal* headline recently
asked. A more perceptive headline would have asked, "Is there a
*hole* in Citibank software?" Some people think the hackers utilized
the PROMIS system backdoor (the "Greek" method).
Some people who are totally devoid of expertise in banking tech-
nology have questioned the ability of a group of (possibly CIA) "Fifth
Column" hackers to clean out accounts in Switzerland using a computer,
whether Cray or otherwise. Well, duuuuuh, let's see, a Russian graduate
student with modest equipment accomplished the same thing from *St.
Petersburg* using the *Russian phone system*. Just think of what he might
have been able to do if he had had some advantages . . .
Others wonder why Swiss banks haven't been publicly screaming
about a missing billion or two. Well, their computers thought the transfers
were duly authorized. Do you really expect the banks to worry about making
restitution? (We are not dealing with pissant ATM theft here.) Secondly,
Switzerland houses much of the world's flight capital. Wonder what would
happen to a lot of it, if Swiss banks admitted to a hacker vulnerability?
But not to worry. Anyone can get his money back by identifying
the amount, the account number, and signing a *sworn* statement that the
account in question belonges to him . . .
Finally, others question the ability of anyone to saunter through
the Mossad's files. Why? You might not even need a computer. If you think
much of the U.S. government is for sale, you should take a good look
at Israel's. And, at any rate, the Mossad is currently a third-rate
intelligence organization in chaos. Hardly a fortress on a hill.
[to be continued]
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