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Allegations Regarding Vince Foster, the NSA, and
Banking Transactions Spying, Part XXXIII
by J. Orlin Grabbe
So you wanna launder money! Does the process appear
mysterious? It's not. But the only way to understand money
laundering is to think about it in operational terms. What exactly
would you do to get the job done, if your mother told you had to do
it?
Okay. Let's take a simple example. Suppose you had a fried
chicken outlet (let's call it "Tyson's Tasty Tidbits") and you also dealt
heroin on the side. In your chicken business, you fry up Tasty Tidbits,
people come in and give you cash for the chicken, and with the cash you
pay your wages and other expenses. What's left over is profit. In your
accounting records you write up an income statement
that says:
profit = sales - expenses.
So if you took in $1000 and paid out $800 as expenses, leaving $200
profit, you would record:
200 = 1000 - 800.
Now in your heroin business, you sit at the bar of the Capital
Hotel during the evening, and your customers, posing as "friends",
come up to chat with you for a moment. You slip them a packet of
smack and they slip you money. (At 35 percent purity no one need
bother with those nasty needles anymore, they can just snort heroin
like coke.) It's a good evening, and you sell $800 worth, for which
you paid the heroin wholesaler $600. You have $200 heroin profits.
Next, to conceal your heroin profits, to "launder" them, you
walk back to your chicken outlet and put the $200 cash in the cash
drawer. Remember that equation that said profit = sales - expenses?
Now it reads like this:
400 = 1200 - 800.
Wow, the chicken business is good! Way over in New York, a
company analyst working for Goldman Sachs looks at the figures and
writes: "Due to the amazing increases in efficiency at Tyson's Tasty
Tidbits, profits have doubled (from 200 to 400) while sales have only
increased by 20 percent (from 1000 to 1200). Stock in Tyson's is a
recommended buy."
No one is going to ask any questions where you got the money
for that new car, because everyone knows you earned it fair and
square in the chicken business. Your chicken is lip-smacking good!
Your advertiser builds a huge sign depicting a beautiful girl, happily
munching on a drumstick with the caption: "Tyson's Tasty Tidbits:
Smack & Smile!"
Nor will any bank (the government's new spies) wonder where
you got the cash, for yours is a cash-based business. The Banking
Secrecy Act allows your bank to exempt you from filling out currency
transaction reports (CTRs) if your deposits or withdrawals of currency
fall into any of the following categories (see 31 C.F.R.
103.22(b)(2)(1992)):
1) They are made from an existing bank account, and you are
an established U.S. depositor who operates a "retail type of
business". This means that you sell consumer goods for which
payments are substantially in the form of currency, just as long
as you are not an automobile, aircraft, or boat dealer. (Wal-
Mart, for example, can get a bank exemption.)
2) They are made from an existing bank account, and you are
an established U.S. depositor who operates a sports arena,
race track, amusement park, restaurant, hotel, check cashing
service licensed by state or local governments, vending
machine company, theater, regularly scheduled passenger
carrier, or public utility. (The Oaklawn racetrack in Hot
Springs, Arkansas, can get a bank exemption.)
3) You are a local, state or United States governmental agency
or instrumentality. (Both the National Programs Office and
the Arkansas Development Finance Authority can get bank
exemptions.)
4) They are made from an existing bank account, and you are
an established U.S. depositor who regularly withdraws more
than $10,000 to pay your employees in currency. (The
paymaster for the pilots at Mena airport can get an bank
exemption.)
Also exempt from CTR reporting are currency transactions
made with Federal Reserve Banks or Federal Home Loan Banks,
transactions between domestic banks, or transactions between
commercial banks and nonbank financial institutions.
Pretty neat, huh? Now I hear you ask: But what can I do if I
am just Joe Blow, and I don't have a bank or a chicken franchise or a
sports arena? The answer: "Tough luck, Buster. The money-
laundering regs were written for you."
Modern techniques of money laundering began back in the
1920s when Americans decided to rid their fair society of that evil
drug Alcohol. Alcohol was destroying the social fabric of this nation!
So we enacted a constitutional amendment and ushered in the Era of
Prohibition. We had solved our problems in the lawyerly fashion of
passing a law saying they weren't allowed to exist! So they all
disappeared! Paradise was at hand!
Some people, however, saw it as a great opportunity to get
rich. Al Capone, for example. And Joseph Kennedy. And the
Bronfman family of Canada.
Exporting alcohol to the U.S. was not illegal in Canada; it was
only illegal to import it from the U.S. side. Naturally those writing
checks to pay for imported Canadian booze didn't like to be so
obvious as to make them out to Bronfman. So the Bronfmans opened
up an account at the Bank of Montreal under the fictitious name "J.
Norton". Since no one knew anything at all about J. Norton, money
could be wired to this account from the U.S. Or U.S. cash or checks
could be used to purchase a bank draft made out to "J. Norton" at any
branch of the Bank of Montreal. These drafts could then be deposited
into the bank account of any Bronfman-controlled company. The
company treasurer would see the name "J. Norton" and credit the
payments to the company's U.S. Booze account.
Modern laundries are complicated versions of simple
structures like that established by the Bronfmans. The operational
head of the laundry is frequently a lawyer, who deals with the
contracts needed to put the structure into place. Donovan Blakeman,
a Toronto lawyer who handled the finances for an international drug
ring in the 1980s, called his structure "the Spaghetti Jungle". It
involved eleven shell companies in the Channel Islands; fifteen other
shell companies in the Cayman Islands, Switzerland, the Netherlands
Antilles, Liberia, and the British Virgin Islands; fourteen secret bank
accounts in the Channel Islands, Liberia, and other places; and real
estate developments in West Palm Beach, Florida; Barrie, Ontario;
and Kitchener, Ontario. Eventually the drug profits would be used to
purchase real estate. The money for the purchases would come from
"offshore investors"--one of the many "Spaghetti Jungle" shell
companies ultimately owned by the same drug ring.
Blakeman himself would carry currency or monetary
instruments to the offshore bank accounts. But, any way you look at
it, carrying large amounts of currency is inefficient and a pain in the
ass. "Wire transfers" are faster and cheaper. There is no longer any
telegraph "wire" involved, of course, but rather computer
telecommunication links through phone lines, fiber optic cables, and
satellite relays. Most money is just data in a computer that looks like
this:
BANK ACCOUNT AMOUNT
Underwater Mellon XYZ Corp. $1,000,000.
When XYZ Corp. "wires" $250,000 to Pearly Gates Corp. at Bank of
America, the computer data now looks like this:
BANK ACCOUNT AMOUNT
Underwater Mellon XYZ Corp. $750,000
Bank of America Pearly Gates Corp. $250,000
Because money is computer data, getting the money offshore
just means incurring a bigger phone bill. And you can get it offshore
without hardly anyone knowing about it. One way is to "donate"
money to charity, along with a side agreement you get half of it back
in the form of an off-shore account. Let's say your name is Mike
Bilk'em and you give $1 billion to the Israeli Children's Educational
Fund. First the check gets deposited in Bank Hapoalim, Chicago:
BANK ACCOUNT AMOUNT
Bank Hapoalim, Chi Children's Fund $1 billion
Next one-half of the money is transferred to Bank Hapoalim, Tel
Aviv.
BANK ACCOUNT AMOUNT
Bank Hapoalim, Chi Children's Fund $500 million
Bank Hapoalim, Tel Av Children's Fund $500 million
Then the $500,000 in Tel Aviv is transferred to a Bilk'em controlled
account called Lakeside Resources at Credit Suisse in Geneva,
Switzerland:
BANK ACCOUNT AMOUNT
Bank Hapoalim, Chi Children's Fund $500 million
Bank Hapoalim, Tel Av Children's Fund $ 0
Credit Suisse, Geneva Lakeside Resources $500 million
So, at this point, Bilk'em is not only a world-renowned philanthropist,
he has also achieved political diversification of his assets. Naturally
the Children's Fund person who authorized the transfer to Geneva is
not going to talk, because that would cut off donations to the
Children's Fund and she would also lose her well-paying, cushy job.
Now the problem with laundering money through banks is
those snoopy bank regulators. Not that they actually mind someone
laundering: after all, it gives them something to investigate, and they
need something to do when they are not busily "solving" the latest
banking crisis. But they can look at your records and muddy up the
money cleansing process. In the U.S., for example, national banks are
regulated by a hodge-podgely overlapping structure of the
Comptroller of the Currency, the Federal Reserve, and the Federal
Deposit Insurance Corporation (FDIC). Snoop. Snoop. Snoop. And if
you have publicly-traded stock, you also have SEC reporting
requirements, and probably have to file financial statements audited
by some major accounting firm like Arthur Anderson. All this
increases your cost of doing business, especially if you have to pay off
a lot of people to get the job done the way you want it done.
Consider poor Christopher Drogoul at Banca Nazionale del
Lavoro (BNL) in Atlanta, Georgia. He found a money machine in
making guaranteed loans to Iraq. One day Continental Grain came to
him and said, How would you like to loan money to Iraq, so they can
buy some of our grain? It turned out the U.S. was gung-ho in getting
food and arms to the Iraqis, and the Commodity Credit Corporation
(CCC) said, We'll guarantee the loans. If Iraq defaulted, the CCC
would pay BNL 98 cents on the dollar (the 98 cents coming, naturally,
from the American taxpayer). Hey, this was great! Drogoul had
entered the world of international lending, and there was virtually no
risk involved! He kept lending more and more until one day he gave
the Iraqis a CCC-backed $556 million line of credit that the bank head
office in Italy hadn't approved. They denied approval when asked.
Instead of reneging on the loan, Drogoul simply made it
disappear. At the end of the month when he submitted his report to
headquarters, he simply took the loan (and its funding source) off the
books. The next day, the loan went back on the books. He called this
"skipping". But the unapproved loans kept getting bigger, until
Drogoul took them off the bank's books entirely, and put them in a
separate set of "gray books" kept in a closet. The gray books were a
sort of separate "bank within a bank". When auditors were scheduled
to visit, the gray books were removed out of the building entirely.
Eventually BNL, Atlanta, was able to amass $2.1 billion in
"agricultural" loans to Iraq.
Calling them "agricultural" loans allowed for CCC guarantees,
but in fact loan proceeds can be laundered just like money. The
transshipment point for goods going to Baghdad was the port of
Aqaba in Jordan. The port was controlled by the Jordanian
commodity trader Wafai Dajani, and he would simply swap the grain
for weapons, electronic goods, or whatever else Iraq was in the market
for. (Other purchases would simply be mislabeled, such as the "300
tons of yarn" that Entrade shipped to the Iraqi Atomic Energy
Commission.)
Well, this all came crashing down on Drogoul's head because
of his inability to continue to conceal information about his "bank
within a bank" from bank regulators. What was needed was a better
system. What was needed was a system for setting up a bank within a
bank that even the bank's managers didn't know about. What was
needed was a whole network of banks to launder money in such a way
that the banks concerned wouldn't even know what was going on. If
ignorant, they couldn't say the wrong thing to the regulators or the
auditors. If ignorant, they couldn't say no to the laundry.
You would then be in the right position to provide laundering
services to drug dealers, arms smugglers, and the covert agencies of
the U.S. and foreign governments. The provision of services to covert
agencies was a very important aspect of the process, because when
you got into trouble you could quash the investigation with appeals to
"national security".
What was needed was a laundry controlled by computer
software. What was needed was Jackson Stephens' software firm
Systematics to sell and install a network of interlocking banking
software, and a Rose Law Firm management team to ultimately
oversee the process--people like Vince Foster, Webster Hubbell, and
Hillary Rodham Clinton.
The "back offices" of banks are the guts of the monetary
system. It is here that the actual money "flows", as money is switched
between accounts and between banks. Systematics supplied software
to banks either for them to do the operation themselves, or for
Systematics to do back office processing on their premises ("on-site
outsourcing"), or for Systematics to process transactions from remote
locations ("remote outsourcing").
Was Jackson Stephens really interested in money laundering?
Well, first of all, he helped engineer the BCCI takeover of First
American Bank, thereby giving it a foothold in the United States.
Jackson Stephens' first foreign bank purchase (with Mochtar Riady)
was Seng Heng Bank in Macao, the "Oriental Las Vegas", where
gambling is the primary source of government revenue. Systematics
also supplied software to the Banco Nacional Ultramarino, the cashier
and treasury bank of the Macao government and the bank that issues
the local currency. Macao is conveniently located less than 40 miles
from Hong Kong, the center of the heroin trade. Add to this Stephens
Panama connections, and his effective control of Arkansas' largest
bank-holding company, Worthen Banking Corp., with its provable
involvement in the money-laundering process, and draw your own
conclusions.
Why would he think he could get away with it? Because he
had covert agencies running interference. The National Security
Agency is that Great Whore who recently tried to impose the "clipper
chip" for encrypted communications as a way of ensuring it could
access all private American conversations. Systematics operated its
"bank within a bank" operations on behalf of the NSA. The NSA also
runs the secure facilities of the National Programs Office where
weapons flow out of the U.S. and drugs flow in (not only at Mena in
the 1980s, but also at other locations in the 1990s).
Mena began as the brain-child of CIA's Bill Casey, operated
by CIA pilots flying out of NSA-controlled facilities. But the process
became an NSA institution, a vast money-making enterprise by the
nation's largest, best-financed intelligence agency. And they've been
making too much money to stop.
No, the Systematics project overseen by Vince Foster wasn't
just a matter of NSA spying on U.S. domestic transactions (the data
turned over to analysts at FinCEN). It was a vast project that also
involved the oversight of money for covert operations, and the
laundering of the proceeds of drugs and arms sales. When Vince
Foster spooked, the NSA was one of several parties who had a good
reason to want him dead.
Is that why when Vince Foster left the White House at
approximately 1 p.m. on July 20, 1993, approximately two hours
before his death, he met with a man whose Arkansas license plates
were registered to a company that builds signals collection facilities
for the National Security Agency?
Why did the Rose Law Firm begin shredding files upon
hearing of the death of Vince Foster? What was Foster involved in
that made it necessary to destroy the files? Why did two Rose Law
Firm lawyers show up at Foster's house and remove approximately
eight boxes of records? What happened to those records? Why did
Foster keep them in his basement? What was in the envelope
addressed "eyes only, not to be opened, William Kennedy" that
Deborah Gorham testified Vince Foster kept in Bernard Nussbaum's
safe?
Why have the U.S. Park Police been guarding the grave of
Vince Foster in Hope, Arkansas? Have they done the job with the
same bungled skill they demonstrated at Ft. Marcy Park? Or are they
there simply to keep the Wackenhut Corporation from stealing the
body?
Why has someone reportedly put out a murder contract on Lt.
Com. Alexander Martin? Who would have an incentive to see him
dead? Is NSA's National Programs Office involved? Is an ex-Vice-
President of the United States involved? Does it have to do with a
little company he has an interest in common with General Secord?
Why is the Mossad, like the White House, in panic mode over
the reopening of the investigation into Foster's death? What is it they
don't want the U.S. public to find out? Why did the operating code
for a new computer developed by NSA-subcontractor E-Systems of
Dallas, Texas, end up in the hands of the Israelis within one month?
Did Vince Foster sell it to them? Why are two LAKAM representatives
offering a fee of $75,000 plus 1 percent of the proceeds to recover
money from Swiss Bank Corporation? Is it because Vince Foster is not
around to release it for them? Or did the armed raid on Mossad
headquarters by U.S. contract agents within the past year create so
much confusion someone just forgot the authorization codes?
If Bill Clinton resigns, will the sealed indictment against
Hillary Rodham Clinton for espionage become public information?
[to be continued]
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