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The War On Waste
2002-01-29, CBS News
http://www.cbsnews.com/stories/2002/01/29/eveningnews/main325985.shtml

On Sept. 10 [2001], Secretary of Defense Donald Rumsfeld declared war. Not on foreign terrorists, "the adversary's closer to home. It's the Pentagon bureaucracy." He said money wasted by the military poses a serious threat. Rumsfeld promised change but the next day—Sept. 11—the world changed and in the rush to fund the war on terrorism, the war on waste seems to have been forgotten. Just last week President Bush announced, "my 2003 budget calls for more than $48 billion in new defense spending." More money for the Pentagon ... while its own auditors admit the military cannot account for 25 percent of what it spends. "According to some estimates we cannot track $2.3 trillion in transactions," Rumsfeld admitted. $2.3 trillion—that's $8,000 for every man, woman and child in America. A former Marine turned whistle-blower is risking his job by speaking out ... about the millions he noticed were missing from one defense agency's balance sheets. Jim Minnery, Defense Finance and Accounting Service ... tried to follow the money trail, even crisscrossing the country looking for records. "The director looked at me and said 'Why do you care about this stuff?' It took me aback. My supervisor asking me why I care about doing a good job," said Minnery. He was reassigned and says officials then covered up the problem. The Pentagon's Inspector General "partially substantiated" several of Minnery's allegations.

Note: To see the CBS video clip of this shocking admission, click here. For another key clip, click here. For other media articles revealing major corruption, click here. Even though originally not reported because of the trauma of 9/11, why wasn't this news broadcast far and wide later? Why isn't it making media headlines now?

Congressional Testimony of DOD Inspector General - Report No. D-2001-120
2001-05-08, Department of Defense Inspector General's Website
http://www.dodig.osd.mil/Audit/reports/fy01/01-120.pdf

Statement of Robert J Lieberman, Deputy Inspector General, Department of Defense, Before the Subcommittee on Governmental Efficiency, Financial Management and Intergovernmental Relations, House Committee on Government Reform of Defense Financial Management. The extensive DoD efforts to compile and audit the FY 2000 financial statements, for the Department as a whole and for the 10 subsidiary reporting entities like the Army, Navy and Air Force General Funds, could not overcome the impediments caused by poor systems and unreliable documentation of transactions and assets. Some examples of the problems in these year-end statements follow. Department-level accounting adjustment entries used to compile the financial statements were $4.4 trillion, with $1.1 trillion of those unsupported by reliable explanatory information and audit trails. This is an improvement from FY 1999, when $7.6 trillion of adjustments were made with $2.3 trillion unsupported, but remains a good indication of the need for wholesale changes to the financial data reporting systems. Accurate reporting of inventory and property remains a continuing challenge for each of the Military Departments and Defense Logistics Agency because of problems in logistics and other feeder systems. Although the DoD has put a full decade of effort into improving its financial reporting, it seems that everyone involved-—the Congress, the Office of Management and Budget, the audit community, and DoD managers—-have been unable to determine or clearly articulate exactly how much progress has been made.

Congress Passes Wide-Ranging Bill Easing Bank Laws
1999-11-05, New York Times
http://www.nytimes.com/1999/11/05/business/congress-passes-wide-ranging-bill-...

Congress approved landmark legislation today that opens the door for a new era on Wall Street in which commercial banks, securities houses and insurers will find it easier and cheaper to enter one another's businesses. The measure, considered by many the most important banking legislation in 66 years, was approved in the Senate by a vote of 90 to 8 and in the House tonight by 362 to 57. The bill will now be sent to the president, who is expected to sign it, aides said. ''Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century,'' Treasury Secretary Lawrence H. Summers said. ''This historic legislation will better enable American companies to compete in the new economy.'' The decision to repeal the Glass-Steagall Act of 1933 provoked dire warnings from a handful of dissenters that the deregulation of Wall Street would someday wreak havoc on the nation's financial system. The original idea behind Glass-Steagall was that separation between bankers and brokers would reduce the potential conflicts of interest that were thought to have contributed to the speculative stock frenzy before the Depression. Consumer groups and civil rights advocates criticized the legislation for being a sop to the nation's biggest financial institutions. The opponents of the measure ... predicted that by unshackling banks and enabling them to move more freely into new kinds of financial activities, the new law could lead to an economic crisis down the road when the marketplace is no longer growing briskly.

Note: Clearly these critics of the elimination of Glass-Steagall have been proven right by the financial crisis which has unfolded less than 10 years later. Note the key role played by President Obama's top economic advisor, Larry Summers. If the players haven't changed, how likely is it that the game has?

New York City Mayor Hylan Foresees A Revolt
1922-12-10, New York Times
http://query.nytimes.com/mem/archive-free/pdf?res=9F07EED6153AEF33A25753C1A96...

One of the most astounding facts about our American life is that the wealth and property of the country and the control of the machinery of government are in the hands of less than 2 per cent of the inhabitants. A small group of excessively wealthy individuals, members of the Republican and Democratic Parties alike, have, through the exercise of powerful, sinister and, too often, unlawful influence, usurped the government and seized public property on such a wholesale scale that they have become ... virtual dictators. A small group of international bankers and money lenders, public utility exploiters and tariff beneficiaries have actually dictated nominations for offices up to the Presidency. They have placed the slickest, cleverest, and most cunning manipulators in official positions, even in the minor posts, where they could be of service when called upon by the invisible power which, utterly devoid of all humanity, seeks but to wallow in riches. So absolute is the power of America's secret dynastic rulers that they have, without hindrance, written the very platforms and pledges of political parties, and because of substantial contributions to campaign chests they have arrogated to themselves the right to dictate the governmental policies of the administration elected to office regardless of party. Woe to the public officials who dare to resent their dictatorship! If there be such public officials who will not submit to their imperious dictation, then the flood-gates of lying press propaganda are released, sweeping the unhappy public servant to an earthly as well as political grave, or compelling him to compromise with his conscience and become their subservient tool to the end of his term.

Note: John F. Hylan was Mayor of New York City from 1918 to 1925. New York has long been the US banking and financial headquarters, with the mayor's office about a half-mile from the New York Stock Exchange. The rest of this important article can be accessed at this link as well as the one above. It is interesting to note that this article was published not long after the Federal Reserve was created, turning over huge amounts of control of the U.S. economy to the most powerful bankers in the country. For more on this, click here.

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