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Catherine Austin Fitts: Trillions Missing

Former Ass. Sect. of HUD Reveal Intense Corruption

"I never expected to deal with physical harassment, poisonings, house break-ins, trolls, disinformation shills, limited modified hangout experts, hackers, and the endless, mind-numbing parade of swamp critters that protect the monies rolling out of the back doors of the U.S. government."  ~~  Catherine Austin Fitts, Former Assistant Secretary of HUD on revealing trillions missing from U.S. government coffers

Dear friends,

Catherine Austin Fitts is one of the great unsung heroes of our time. A financial genius of the highest order, she moved up the ranks rapidly first on Wall Street and then in the U.S. government, becoming the Assistant Secretary of HUD (Housing and Urban Development) under George H.W. Bush in 1989.

Yet Fitts has always been a woman of very high ethics and standards. After revealing huge amounts of corruption worth literally trillions of dollars and trying to stanch this egregious loss of taxpayers' money, she was sacked from her government position and later attacked in a variety of ways. Though the evidence is undeniable, very powerful groups don't want the public to know about this massive, ongoing corruption.

Houses are by far the largest purchase many people ever make. By manipulating mortgages and creating bubbles and the ensuing crashes, the powerful elites behind these manipulations gain many billions in profits as home owners lose their homes and hard-earned money to foreclosure. The huge manipulations of mortgages and the housing markets is a big part of what Fitts worked to uncover. Yet her personal story reveals so much more of what's happening behind the scenes.

Below is an incisive summary of a much longer autobiographical essay written by Fitts describing her harrowing journey from growing up in a modest, multi-racial West Philadelphia neighborhood to being partner and managing director of a major Wall Street firm, and then on to the highest levels of government, where she was eventually attacked for exposing major corruption. Ever since leaving government, Fitts has been a tireless crusader not only revealing the depths of depravity of certain very powerful elite groups, but also presenting practical solutions for how to build a better world.

If you want to understand some of the key hidden forces which shape our world, this essay is a must read. Please spread the word, so that we might help to make a real change for the better.

With best wishes for a transformed world,
Fred Burks for PEERS and
Former White House interpreter and whistleblower

Note: The much longer original essay, available on this webpage of her website, is quite riveting. An excellent 82-minute video presentation by Fitts also covers similar topics.

Missing Money: A Personal History
By Catherine Austin Fitts
April 7, 2019

My mother’s body was found on the roof of our home in February 1976. I knew my father agreed with me that it was an assassination. It fell to me to ... take charge of the family and funeral arrangements. I believed that if I handled matters discreetly, I could protect my father from a similar fate. However, he died four years later under suspicious circumstances.

The lies surrounding their deaths became part of the accumulated lies that eventually destroyed what remained of our family. In the meantime, the machinery that harvests people and neighborhoods with a lethal combination of drugs, media, mortgage fraud, and enforcement kept getting more powerful. I wanted to know why.

One of the things I learned growing up was that the fastest way for me to understand reality was to identify the actual transactions that were happening and estimate the allocation of time and resources, or, “how the money worked.” I was told as a young child that I tested as a math genius. Converting the gruesome or incomprehensible side of life into a mathematical flow seemed to my childlike mind a practical way of unpacking the mysteries of adult behavior.

I got a better understanding of what was happening by following transactions than if I relied on people’s description of what was happening or depended on the local and national news media. What people said they were doing and what they were actually doing were distinctly different things.

I attended Wharton – the business school at the University of Pennsylvania – from 1976-78, receiving my MBA in the spring of 1978. Still trying to understand “how the money worked,” I joined Goldman Sachs as an intern for the summer of 1977 and then, after graduation, headed to New York and a job in investment banking on Wall Street at Dillon Read & Co., Inc. I was going to learn how the money worked and do something about it.

Investment banking suited me. I developed a reputation for taking on the transactions that others thought could not be done – typically, transactions that involved many different constituencies and financial flows. I liked sorting out highly complicated public-private financial flows. I liked working with people from scores of different industries, places, and worlds.

I became a managing director and member of the board of directors in eight years – a record time. I could not imagine that I would ever have a career other than as an equity owner of Dillon Read. I did not love everything and everyone in the environment, but I loved my investment banking work.

There were several reasons why I [eventually went] to work in the federal government. I had become convinced after eleven years on Wall Street – with exposure to many different parts of the economy and financial markets – that the U.S. economy was engineered through Washington by monetary policy engineered by the Federal Reserve and fiscal policy engineered by Congress and the Executive branch.

To understand how the money in one neighborhood in West Philadelphia worked – let alone figure out how to get it to work well – I needed to understand federal finances. Another reason was that I was confident that entering government service would ensure that the business I had built would stay at Dillon Read. Keeping this promise to [Dillon Read chairman Nick] Brady and the firm was very important to me.

My loyalty was not reciprocated. I went to work at HUD despite the fact that Nick Brady, now Secretary of the Treasury in President George H.W. Bush’s administration, blackballed me with the Bush transition team. I now believe that Brady did so for reasons relating to my parents’ deaths, although it took me many years to come to that conclusion.

A member of the transition team insisted that [incoming Secretary of HUD, Jack] Kemp and Brady loathed each other, which is how I got the interview with Kemp. Kemp had a HUD scandal on his hands and wanted someone clean with strong financial credentials.

As Assistant Secretary for Housing-Federal Housing Commissioner, I was responsible for the operations of the Federal Housing Administration (FHA), which was the largest mortgage insurance fund in the world. FHA at that time had annual originations of $50-100 billion of mortgage insurance and an outstanding official portfolio of $320 billion of mortgage insurance, mortgages and properties. (Note: Today, it is officially $1.1 trillion.)

Leading the FHA necessitated significant understanding of how homes are built, how mortgages finance thousands of communities throughout America and how investors finance the process by buying securities in pools of mortgages. My responsibilities included the ... management of an organization of 7,000 employees in 80 offices nationwide; and development of network information systems and tools. In addition, I served as advisor to the Secretary of HUD on financial markets regulatory responsibilities.

Shortly after arriving at HUD in April 1989, I began to learn about the FHA Coinsurance program. Since 1984, HUD/FHA had allowed private mortgage bankers to issue federal credit to guarantee multi-family apartment projects. After issuing $9 billion in mortgage guarantees, HUD/FHA was to lose something approaching 50% of the value of the portfolio – a level of losses hard to explain with mortal logic.

When my staff approached me with a proposal to bail out a mortgage company so they could continue to lose money for us, I asked why we should spend money to lose more money in a way that would harm communities, not to mention the transaction they were proposing was illegal. After a long silence during which 30 staff members intently studied their feet, one brave soul explained to me that the mortgage bank was owned and run by a major Republican donor.

Shocked, I said, “I am a major Republican donor,” and pointing to my presidential cuff links that were adorning my French cuffs, “I got a pair of cuff links. You get cuff links [for a big donation]. You don’t get $400 million of federal credit to throw down the drain.” My staff looked at me like I was so naive and clueless that there was no point in trying to communicate with me – better to let me learn the hard way.

Within minutes, a screaming [HUD Secretary] Jack Kemp, furious that I had not provided illegal subsidy to keep the mortgage banking company going (despite his orders to stop anything corrupt or illegal), called me on the carpet. The problems were compounded by the opinion of HUD General Counsel Frank Keating, who had joined from DOJ, that we did not have to honor our contracts. Rather we could abrogate contracts and ignore the law. If those who had been harmed sued us, Frank said, by the time they won “we will be gone.”

There are as many ways to steal money from HUD and the federal government as there are recipes in the Joy of Cooking cookbook. As long as the federal government can collect taxes and sell Treasury securities and the Federal Reserve banks operate a fiat currency system supported by a global military, both without real audits or lawful disclosure by agency and Congressional district, there are always more assets and money that can go missing.

I never intended to spend 30 years of my life trying to prevent U.S. federal financial fraud [and] warning my fellow citizens and investors about it. I never expected to spend countless hours, year after year for three decades, reading complex, purposefully obtuse federal financial audits. I never expected to deal with physical harassment, poisonings, house break-ins, trolls, disinformation shills, limited modified hangout experts, hackers, and the endless, mind-numbing parade of swamp critters that protect the monies rolling out of the back doors of the U.S. government.

Those were never on my list of life goals. I did it because the federal finances are at the heart of the matter – a door that every American citizen has to walk through if we are going to be able to survive, let alone be healthy and free.

When I started Hamilton [after leaving my government position], I wanted to build an investment bank that would create real wealth – that would take new technology and apply it in practical ways that would help individuals, families, businesses, and communities be more productive. Indeed, our prototyping at Hamilton indicated that the wealth potential was explosive. That is how we end poverty – by creating wealth.

Those hopes ended with the failure of the Clinton administration and Congress to reach a budget deal and with the U.S. federal government shutdown at the end of 1995. As the president of CalPERS, the largest pension fund in the country, explained to me in the spring of 1997, “They have given up on the country. They are moving all the money out starting in the fall.”

The financial coup d’état had begun. Among many other things, that meant bubbling the housing market in a manner that would generate significant funds and doing so with a significant round of new mortgage fraud. This was a coordinated effort by the leading member banks of the New York Federal Reserve and the federal agencies involved in housing and finance, including Treasury, the DOJ, and HUD.

In 2000, I met with the Chief of Staff to the Chairman of the Senate Subcommittee that oversees HUD appropriations. The mortgage bubble was in full bubble mode. The staff member asked me what I thought was going on at HUD. I deferred my response and asked them the same question in return. The staff member looked me dead in the eye and said, “HUD is being run as a criminal enterprise.” HUD’s matrix structure means that the majority of its operations are run by large defense contractors, New York Fed member banks, the U.S. Treasury, and the Department of Justice – and those parties indeed were intentionally running HUD as a criminal enterprise.

As the propagandists love to say, on September 11, 2001, “the world changed.” Suddenly, money could pour out of both the front and back doors of the U.S. government into the military-industrial complex with abandon. America was going to war, and money was no object. DOD won an immediate $48 billion increase in appropriations. Suddenly, no one cared that there was $3.3 trillion missing from DOD and HUD. The spigot was open for fresh new cash. 

A great deal happened that day to make sure the trail on the money missing from DOD and HUD went cold, including bombing the offices of the largest mortgage and government securities dealers in the country, SEC and FBI offices in New York with ongoing investigations of Wall Street firms involved in the mortgage and securities fraud, as well as Office of Naval Intelligence (ONI) offices at the Pentagon that were investigating the missing money.

Slowly, as the pieces fit together, we shared a horrifying epiphany: the banks, corporations, and investors acting in each global region were the exact same players. They were a relatively small group that reappeared again and again in Russia, Eastern Europe, and Asia accompanied by the same well-known accounting firms and law firms. Clearly, there was a global financial coup d’état underway.

The general theory ... is that the U.S. and other global militaries are dealing with unusual and dangerous phenomena. Consequently, the proponents of this premise call for secrecy, making it essential to centralize control over all aspects of the government and economy, with no expense spared and no questions asked. However, they never offer any explanation for why this has to come with trillions of dollars of waste and destructive corruption by insiders. Allowed to grow for decades, secrecy misused accumulates significant legal liabilities while generating huge and hideous profits. This is why I often say that secrecy has become a financial addiction.

As the reports of missing money kept coming, we created a special site at just to publish the stories. This has now become We try to make it easy for investors and citizens who are challenged to understand that this problem has been growing for 30 years without them being aware of it – and that it explains a surprising number of events during their lifetime.

“I really didn’t believe the figure [of total commitments made during the financial crisis] until I saw the backup documents that had been provided by each of the agencies themselves. This total commitment was almost double the entire economic output of the United States. If there were ever a single number that demonstrated the panic felt by the regulators during the financial crisis, it was that $23.7 trillion.” ~ Neil Barofsky, Special Inspector General to the TARP Program, U.S. Department of Treasury

In April, 2006, I published Dillon Read & Co. Inc. & the Aristocracy of Stock Profits. The response to the book was quite gratifying. However, every time I tried to publish it in hard copy, the headwinds would begin. I interpreted the third and final threat as one that threatened a family member. I decided not to publish it in book form but to keep it online. Feelings were still too raw. Among other things, I had to make a choice between my pathway and my family. If I was going to continue on this path, I had to do it alone and put more space between myself and my family.

My first job helping individuals and families was helping people navigate the financial crisis. Wall Street had started to quietly bet against the subprime mortgage market in 2006, with the market collapsing in 2007. Events blossomed into the financial crisis in 2008. The leadership who runs the U.S. Treasury and Federal Reserve brought it up – and then they brought it down.

When it comes to missing money, it’s a global world in which things are never what they seem. But for as long as I have lived, the more money that goes missing, the more money is available to lobby, legislate, enforce, and fund more secrecy.

“The two candidates that we have just had offered to us in [the 2016] election, both of them made comments and one of them had a profession that dictated this … that they were going to continue to play by that playbook. Now one wonders what one of them is going to do because he [Trump] is bouncing all over the place. Is he going to rewrite the playbook? Is he going to play by the playbook? Is he going to throw it out the door? What’s going to happen?

That uncertainty certainly unnerved the markets initially, [but then] they recovered. And they will continue to recover as long as [Trump] remains somewhat conciliatory and doesn’t look like he is going to throw the playbook out. Just imagine if he suddenly decided that he would – and it might be beneficial to the country that he did. Then you see what I am talking about now because the markets will go all over the place again. Because the markets are part of this state.

The markets are part of waging war. They are part of the warfare state. Our entire financial system now is geared to this warfare state. That’s how it survives. That’s how it makes a lot of its profits. Not for nothing was HSBC found out for laundering drugs. You know where a lot of those drugs were coming from? …Afghanistan. This is a vicious many-headed animal that we have allowed to grow up – as Eisenhower predicted – and if we are not careful it is going to eat all of our lunches before it is through with us.” ~ Colonel Lawrence Wilkerson

If it’s not a problem for $21 trillion to go missing from DOD and HUD and it is possible to come up with more than $20+ trillion to give or loan to the banks when there is no legal obligation to do so, and when we can transfer trillions of the most valuable technology in the world to private corporations at zero cost to them and great cost to the taxpayers, I assure you that fixing whatever pension fund problem there is, is not difficult. However, the political will must exist. If we can print money to give $20+ trillion to the banks and let $21 trillion go missing from the federal government, why is it a problem to print $5 trillion to fund the pension funds?

I would add that this also holds true for addressing the fraudulent inducement of American students with $1 trillion of student loan debt or the bankrupting of millions of Americans with an overly expensive health care system and suppression of economic health care treatments, among other items.

The missing money issue came to a head in October 2018. DOD was struggling to complete an audit. Before they finalized the process – as they could not complete an audit – the Federal Accounting Standards Advisory Board (FASAB) issued its Statement 56 with adoption by the GAO and OMB – essentially authorizing secret books with the approval of both the Trump administration in the White House and the Republican and Democratic leadership in the House and Senate.

In a nutshell, Statement 56, in combination with other classification and black budget laws, gives government agencies and private corporations the ability to make their financial information secret, resulting in financial statements that are misleading, provided that they do so based on an argument that the information they are leaving out or doctoring is related to a national security concern. DOD exercised the use of FASAB 56 before finalizing the audit process. What that meant is that the financial report DOD published at the completion of its non-audit was essentially meaningless.

No one noticed the adoption of FASAB 56 on October 4, 2018 to end federal financial reporting – essentially shredding the Constitution. Two days earlier, Jamal Khashoggi, a journalist for the Washington Post ... was assassinated at the Saudi consulate in Istanbul. In addition, Congress was in the middle of the Kavanaugh nomination hearings and related allegations over the sexual practices of teenagers. Whether murder or sex, the shriek-o-meter made sure the most important story of the year was not mentioned or noticed, let alone understood.

The adoption of FASAB 56 in October 2018 has dramatic implications that most Americans and global investors are struggling to fathom. In frustration, I sent the following description to Matt Taibbi as he was writing a piece on FASAB 56 for Rolling Stone:

“The story is simple. [It's] about secret financing for secret armies. The U.S. government just officially changed its governance model from a constitutional republic to fascism through an obscure accounting policy. The U.S. Treasury is free to tax and then borrow from our pension funds and global and domestic investors and then transfer the money and assets ... to private corporations and investors without compensation or oversight. Think of this as the extension of the bailouts to a permanent open bailout structure.

The White House and Congress just opened a pipeline into the back of the U.S. Treasury and announced to every private army, mercenary, and thug in the world that we are open for business. Every mercenary on the planet is now generating proposed schemes to create business for themselves that pumps up U.S. corporate profits and campaign contributions. Why do you think Mattis is suddenly out and ads are suddenly running that ‘Blackwater is Coming’? My advice? Ask now former DOD Secretary Mattis – who opposed mercenary armies – how he feels about using his credibility to arrange significant increases in DOD appropriations and then getting the boot as soon as the mechanism to finance secret private armies goes into place.”

In December [2018], the ascension of the Bush team and neocons continued. William Barr, Attorney General during the George H.W. Bush administration, was nominated for Attorney General in the Trump administration. Barr served in the office of legal counsel at the CIA in 1976 when George H.W. Bush was confirmed as Director of Central Intelligence as a result of support from Dick Cheney, the Chief of Staff, and Donald Rumsfeld, then Secretary of Defense.

Barr’s job included helping Bush shut down the Church Committee hearings. As his confirmation hearings proceeded, I wondered, did he see the lists of Americans scheduled for assassination to shut the Church Committee hearings down? Did he see my mother’s name on the list? It’s amazing how events keep coming back around to a few simple things. Perhaps time is circular.

Note: The much longer original essay, available on this webpage of her website, is quite riveting. An excellent 82-minute video presentation by Fitts also covers similar topics.

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