Inside the Murky World of Arms Smuggling

May 16, 2012 Leave a comment

By VICTOR THORN | AMERICAN FREE PRESS | MAY 16, 2012

Union Gen. William Tecumseh Sherman once said, “War is hell.” But to those who profit off the sale of weapons, war is big business that brings in huge profits. That explains why, even in these tough economic times, global weapons sales are booming, with U.S. corporations being some of the biggest arms peddlers.

The global arms market can be split into three sectors: First are the legal sales whereupon governments buy arms from corporations. Second are sales on the black market. And third is a legally gray area where governments, militaries and intelligence agencies rub shoulders with shady and corrupt dealers in order to carry out covert agendas such as regime changes and assassinations.

On March 2, Richard Norton-Taylor, reporting for The Guardian, wrote: “Sales of weapons and military services exceeded $400B in 2010 . . . [and] the top 10 arms producing companies account for 56% of total arms sales.”

To Americans, what should be most troublesome is the role the United States plays in bombarding the world with deadly weaponry in this half-trillion dollar market.

In a recent article entitled “America: Arms Dealer to the World,” reporter William Astore wrote, “From 2006 to 2010, the U.S. accounted for nearly 1/3 of the world’s arms exports.” However, in 2010, Astore claimed that, in spite of a recessionary downswing, “The U.S. increased its market share to a whopping 53%.” As the undisputed masters of war, America shipped weapons to 62 different countries.

According to the Stockholm International Peace Research Institute, of the top 20 global weapons dealers, 16 are U.S. corporations. These include: (1) Lockheed Martin, (2) Boeing, (3) Northrop Grumman, (4) General Dynamics and (5) Raytheon.

Rounding out, the biggest arms selling nations in the world include Russia, Germany, France, Britain and China. Taken together with the U.S., these countries supply more than 80% of total weaponry.

If arms are being manufactured and sold, obviously somebody has to be buying them. On March 19, Agence France-Presse provided an analysis of these purchasers. India was far and away the No. 1 importer of weaponry, followed by South Korea, Pakistan, China (which is also a big exporter) and Singapore. Overall, these five countries accounted for 30% of all international arms imports.

But leaders who stock up on weapons can find themselves in serious trouble.

After Libyan leader Muammar Qaddafi surrendered his weapons of mass destruction in 2003, Britain, France and the U.S. began selling him billions of dollars worth of arms. Oddly, at the same time, anti-Qaddafi rebels were tapping the black market for high-tech weaponry such as rocket-propelled grenades and machine guns. As everyone now knows, in 2011, a NATO-led army of the same countries that previously sold weapons to Qaddafi led an attack on Libya, which ultimately resulted in the death of Qadaffi and about 20,000 others.

Arms dealing is “the single most lucrative business there is,” said Houston-based international defense attorney Frank A. Rubino. “It’s unbelievably profitable,” he added.

Rubino should know. As the lead trial counsel for Panamanian strongman Manuel Noriega as well as arguing cases before the U.S. Supreme  Court, Rubino was also involved in the Pan Am 103 bombing trial at The Hague. Such a background allows Rubino to frequently defend individuals involved in the illegal arms business.

During an April 26 interview with this writer, Rubino said: “Black-market arms deals occur in the dark shadows. But the amount of money generated is incredible. We’re talking about millions and millions of dollars, and the profits are extremely high.”

When asked where the hottest spot on the globe is for this type of nefarious activity, Rubino replied: “Africa, because of all the warlords and private armies in countries such as Somalia who are always looking to acquire arms.”

Middle Eastern countries are the world’s No. 2 hot spot for illegal arms sales, he explained.

He broached the subject of last year’s Libyan invasion. “The forces opposing Qaddafi clearly bought their weapons on the black market from individual profiteers,” he said. “They probably originated or were manufactured in Russia or China.”

AMERICAN FREE PRESS inquired as to how much of this Libyan firepower found its way there from America. “I’m not sure how many guns came from the United States,” said Rubino. “That’s a question for the Central Intelligence Agency, not me.”

Rubino pointed out that, “the CIA also puts a lot of weapons on the streets. They give weapons to one side, then the other side so it’s balanced. These countries always get more than they need, so plenty of guns go out the back door”.

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Supposed Underwear Bomber is CIA Informant

May 8, 2012 Leave a comment

AP | MAY 8, 2012

NEWS UPDATE:

U.S. and Yemeni officials say the supposed would-be bomber at the heart of an al-Qaida airliner plot was actually an informant working for the CIA.

The revelation, first reported by The Los Angeles Times, shows how the CIA was able to get its hands on a sophisticated underwear bomb well before an attack was set in motion.

Officials say the informant was working for the CIA and Saudi Arabian intelligence when he was given the bomb. He then turned the device over to authorities. Officials say the informant is safely out of Yemen.

The officials spoke on condition of anonymity to discuss the sensitive intelligence matter.

ORIGINAL REPORT:

In the wake of a failed al-Qaida plot to blow up a U.S.-bound airliner, the Obama administration on Tuesday sought to reassure travelers that security at American airports is as good as it has ever been.

Overseas, where such plots originate, security is a different story.

While airline checks in the United States mean passing through an onerous, sometimes embarrassing series of pat-downs and body scans, procedures overseas can be a mixed bag. The U.S. cannot force other countries to permanently adopt the expensive and intrusive measures that have become common in American airports over the past decade.

The latest al-Qaida plot originated in Yemen and used an upgrade over the bomb that failed to detonate on board an airplane over Detroit on Christmas 2009. Officials said this new bomb was meant to be concealed in a passenger’s underwear, contained no metal and used a chemical _ lead azide _ that was to be a detonator in a nearly successful 2010 plot to attack cargo planes.

Working with an al-Qaida informant and foreign intelligence services, the CIA disrupted the latest plot before the would-be bomber even picked a target or bought his tickets, officials say.

The FBI is still analyzing the sophisticated explosive. But, based on preliminary findings, security procedures at U.S. airports remained unchanged a day after the plot became public.

That was a reflection of both the U.S. confidence in its security systems and a recognition that the government can’t realistically expect travelers to endure much more. Increased costs and delays to airlines and shipping companies could have a global economic impact, too.

“I would not expect any real changes for the traveling public,” said House Intelligence Committee Chairman Mike Rogers, R-Mich. “There is a concern that overseas security doesn’t match ours. That’s an ongoing challenge.”

The Transportation Security Administration sent advice to some international air carriers and airports about security measures that might stave off an attack from a hidden explosive. It’s the same advice the U.S. has issued before, but there was a thought that it might get new attention in light of the foiled plot.

The U.S. has worked for years to try to improve security for U.S.-bound flights originating at international airports. And many countries agree that security needs to be better. But while plots such as the Christmas attack have spurred changes, some security gaps that have been closed in the U.S. remain open overseas.

Officials believe that body scanners, for instance, probably would have detected this latest attempt by al-Qaida to bring down a jetliner. Such scanners allow screeners to see objects hidden beneath a passenger’s clothes.

But while scanners are in place in airports nationwide, their use is scattershot overseas. Even in security-conscious Europe, the European Union has not required full-body imaging machines for all airports, though a number of major airports in Paris, London, Frankfurt and elsewhere use them.

All passengers on U.S.-bound flights are checked against terrorist watch lists and law enforcement databases.

In some countries, U.S. officials are stationed in airports to offer advice on security matters. In some cases, though, the U.S. is limited to hoping that other countries follow the security advice from the Transportation Security Administration.

“Even if our technology is good enough to spot it, the technology is still in human hands and we are inherently fallible,” said Rep. Adam Schiff, D-Calif., a member of the House Intelligence Committee. “And overseas, we have varying degrees of security depending on where the flight originates.”

Al-Qaida has repeatedly tried to take advantage of those overseas gaps. The Christmas 2009 bombing originated in Amsterdam, where the bomber did not receive a full-body scan. And in 2010, terrorists smuggled bombs onto cargo jets, which receive less scrutiny than passenger planes.

In both those instances, the bombs were made by al-Qaida’s master bomb maker in Yemen, Ibrahim Hassan al-Asiri. Officials believe this latest bomb was the handiwork of al-Asiri or one of his students.

The CIA was tipped off to the plot last month by an informant close to al-Qaida, officials said, speaking on condition of anonymity because they were not authorized to discuss the case. The agency recovered the bomb in recent weeks, but it’s not clear what happened to the would-be suicide bomber.

The bomber “is in no position to harm us,” Rogers said.

“Neither the bomb nor any other part of the plot represents an ongoing threat to the U.S.,” Schiff said.

In the meantime, Americans traveled Tuesday with little apparent concern.

“We were nervous _ for a minute,” said Nan Gartner, a retiree on her way to Italy from New York’s John F. Kennedy Airport. “But then we thought, we aren’t going anywhere near Yemen, so we’re OK.”

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Kosovo’s “Mafia State” Sponsors Permanent US Heroin Trade and Money Laundering

April 13, 2012 1 Comment

By F. WILLIAM ENGDAHL | GLOBAL RESEARCH | APRIL 13, 2012

In one of the more bizarre foreign policy announcements of a bizarre Obama Administration, US Secretary of State Hillary Clinton has announced that Washington will “help” Kosovo to join NATO as well as the European Union. She made the pledge after a recent Washington meeting with Kosovan Prime Minister Hashim Thaci in Washington where she praised the progress of the Thaci government in its progress in “European integration and economic development.” 1

Her announcement no doubt caused serious gas pains among government and military officials in the various capitals of European NATO. Few people  appreciate just how mad Clinton’s plan to push Kosovo into NATO and the EU is.

Basic Kosovo geopolitics

The controversial piece of real estate today called Kosovo was a part of Yugoslavia and tied to Serbia until the NATO bombing campaign in 1999 demolished what remained of Milosevic’s Serbia and  opened the way for the United States, with the dubious assist of EU nations, above all Germany, to carve up the former Yugoslavia into tiny, dependent pseudo states. Kosovo became one, as did Macedonia. Slovenia and Croatia had earlier split off from Yugoslavia with a strong assist from the German Foreign Ministry.

Some brief review of the circumstances leading to the secession of Kosovo from Yugoslavia will help locate how risky a NATO membership or EU membership would be for the future of Europe. Hashim Thaci the current Kosovo Prime Minister, got his job, so to speak, through the US State Department and not via free democratic Kosovo elections. Kosovo is not recognized as a legitimate state by either Russia or Serbia or over one hundred other nations. However, it was immediately recognized when it declared independence in 2008 by the Bush Administration and by Berlin.

 Membership into the EU for Kosovo would be welcoming another failed state, something which may not bother US Secretary Clinton, but which the EU at this juncture definitely can do without. Best estimates place unemployment in the country at as much as 60%. That is not just Third World level. The economy was always the poorest in Yugoslavia and today it is worse. Yet the real issue in terms of the future of EU peace and security is the nature of the Kosovo state that has been created by Washington since the late 1990’s.

 Mafia State and Camp Bondsteel

 Kosovo is a tiny parcel of land in one of the most strategic locations in all Europe from a geopolitical standpoint of the US military objective of controlling oil flows and political developments from the oil-rich Middle East to Russia and Western Europe. The current US-led recognition of the self-declared Republic of Kosovo is a continuation of US policy for the Balkans since the illegal 1999 US-led NATO bombing of Serbia—a NATO “out-of-area” deployment never approved by the UN Security Council, allegedly on the premise that Milosevic’s army was on the verge of carrying out a genocidal massacre of Kosovo Albanians.

 Some months before the US-led bombing of Serbian targets, one of the heaviest bombings since World War II, a senior US intelligence official in private conversation told Croatian senior army officers in Zagreb about Washington’s strategy for former Yugoslavia. According to these reports, communicated privately to this author, the Pentagon goal already in late 1998 was to take control of Kosovo in order to secure a military base to control the entire southeast European region down to the Middle East oil lands.

 Since June 1999 when the NATO Kosovo Force (KFOR) occupied Kosovo, then an integral part of then-Yugoslavia, Kosovo was technically under a United Nations mandate, UN Security Council Resolution 1244. Russia and China also agreed to that mandate, which specifies the role of KFOR to ensure an end to inter-ethnic fighting and atrocities between the Serb minority population, others and the Kosovo Albanian Islamic majority. Under 1244 Kosovo would remain part of Serbia pending a peaceful resolution of its status. That UN Resolution was blatantly ignored by the US, German and other EU parties in 2008.

 Germany’s and Washington’s prompt recognition of Kosovo’s independence in February 2008, significantly, came days after elections for President in Serbia confirmed pro-Washington Boris Tadic had won a second four year term. With Tadic’s post secured, Washington could count on a compliant Serbian reaction to its support for Kosovo.

 Immediately after the bombing of Serbia in 1999 the Pentagon seized a 1000 acre large parcel of land in Kosovo at Uresevic near the border to Macedonia, and awarded a contract to Halliburton when Dick Cheney was CEO there, to build one of the largest US overseas military bases in the world, Camp Bondsteel, with more than 7000 troops today.

 The Pentagon has already secured seven new military bases in Bulgaria and Romania on the Black Sea in the Northern Balkans, including the Graf Ignatievo and Bezmer airbases in Bulgaria and Mihail Kogalniceanu Air Base in Romania, which are used for “downrange” military operations in Afghanistan and Iraq. The Romanian installation hosts the Pentagon’s Joint Task Force–East. The US’s colossal Camp Bondsteel in Kosovo and the use and upgrading of Croatian and Montenegrin Adriatic harbors for US Navy deployments complete the militarization of the Balkans.[ii]

 The US strategic agenda for Kosovo is primarily military, secondarily, it seems, narcotics trafficking. Its prime focus is against Russia and for control of oil flows from the Caspian Sea to the Middle East into Western Europe. By declaring its independence, Washington gains a weak state which it can fully control. So long as it remained a part of Serbia, that NATO military control would be politically insecure. Today Kosovo is controlled as a military satrapy of NATO, whose KFOR has 16,000 troops there for a tiny population of 2 million. Its Camp Bondsteel is one of a string of so-called forward operating bases and “lily pads” as Donald Rumsfeld called them, for military action to the east and south. Now formally bringing Kosovo into the EU and to NATO will solidify that military base now that the Republic of Georgia under US protégé Saakashvili failed so miserably in 2008 to fill that NATO role.

 Heroin Transport Corridor

 US-NATO military control of Kosovo serves several purposes for Washington’s greater geo-strategic agenda. First it enables greater US control over potential oil and gas pipeline routes into the EU from the Caspian and Middle East as well as control of the transport corridors linking the EU to the Black Sea.

 It also protects the multi-billion dollar heroin trade, which, significantly, has grown to record dimensions in Afghanistan according to UN narcotics officials, since the US occupation. Kosovo and Albania are major heroin transit routes into Europe. According to a 2008 US State Department annual report on international narcotics traffic, several key drug trafficking routes pass through the Balkans. Kosovo is mentioned as a key point for the transfer of heroin from Turkey and Afghanistan to Western Europe. Those drugs flow under the watchful eye of the Thaci government.

 Since its dealings with the Meo tribesmen in Laos during the Vietnam era, the CIA has protected narcotics traffic in key locations in order partly to finance its covert operations. The scale of international narcotics traffic today is such that major US banks such as Citigroup are reported to derive a significant share of their profits from laundering the proceeds.

 One of the notable features of the indecent rush by Washington and other states to immediately recognize the independence of Kosovo is the fact that they well knew its government and both major political parties were in fact run by Kosovo Albanian organized crime.

 Hashim Thaci, Prime Minister of Kosovo and head of the Democratic Party of Kosovo, is the former leader of the terrorist organization which the US and NATO trained and called the Kosovo Liberation Army, KLA, or in Albanian, UCK. In Kosovo crime circles he is known as Hashim “The Snake” for his personal ruthlessness against opponents.

 In 1997, President Clinton’s Special Balkans Envoy, Robert Gelbard described the KLA as, “without any question a terrorist group.” It was far more. It was a klan-based mafia, impossible therefore to infiltrate, which controlled the underground black economy of Kosovo. Today the Democratic Party of Thaci, according to European police sources, retains its links to organized crime.

 A February 22, 2005 German BND report, labeled Top Secret, which has since been leaked, stated, “Über die Key-Player (wie z. B. Haliti, Thaci, Haradinaj) bestehen engste Verflechtungen zwischen Politik, Wirtschaft und international operierenden OK-Strukturen im Kosovo. Die dahinter stehenden kriminellen Netzwerke fördern dort die politische Instabilität. Sie haben kein Interesse am Aufbau einer funktionierenden staatlichen Ordnung, durch die ihre florierenden Geschäfte beeinträchtigt werden können.“ (OK=Organized Kriminalität). (Translation: “Through the key players—for example Thaci, Haliti, Haradinaj—there is the closest interlink between politics, the economy and international organized crime in Kosovo. The criminal organizations in the background there foster political instability. They have no interest at all in the building of a functioning orderly state that could be detrimental to their booming business.”3

 The KLA began action in 1996 with the bombing of refugee camps housing Serbian refugees from the wars in Bosnia and Croatia. The KLA repeatedly called for the “liberation” of areas of Montenegro, Macedonia and parts of Northern Greece. Thaci is hardly a figure of regional stability to put it mildly.

 The 44 year old Thaci was a personal protégé of Clinton Secretary of State Madeleine Albright during the 1990s, when he was a mere 30-year old gangster. The KLA was supported from the outset by the CIA and the German BND. During the 1999 war the KLA was directly supported by NATO. At the time he was picked up by the USA in the mid-1990s, Thaci was founder of the Drenica Group, a criminal syndicate in Kosovo with ties to Albanian, Macedonian and Italian organized mafias.  A classified January 2007 report prepared for the EU Commission, labeled “VS-Nur für den Dienstgebrauch” was leaked to the media. It detailed the organized criminal activity of KLA and its successor Democratic Party under Thaci.

 A December 2010 Council of Europe report, released a day after Kosovo’s election commission said Mr Thaci’s party won the first post-independence election, accused Western powers of complicity in ignoring the activities of the crime ring headed by Thaci: “Thaci and these other ‘Drenica Group’ members are consistently named as ‘key players’ in intelligence reports on Kosovo’s mafia-like structures of organised crime,” the report said. “We found that the ‘Drenica Group’ had as its chief – or, to use the terminology of organised crime networks, its ‘boss’ – the renowned political operator … Hashim Thaci.” 4

 The report stated that Thaci exerted “violent control” over the heroin trade. Dick Marty, the European Union investigator, presented the report to European diplomats from all member states. The response was silence. Washington was behind Thaci.5

 The same Council of Europe report on Kosovo organized crime accused Thaci’s mafia organization of dealing in trade in human organs. Figures from Thaçi’s inner circle were accused of taking captives across the border into Albania after the war, where a number of Serbs are said to have been murdered for their kidneys that were sold on the black market. In one case revealed in legal proceedings in a Pristina district court in 2008 organs were said to have been taken from impoverished victims at a clinic known as Medicus – linked to Kosovo Liberation Army (KLA) organ harvesting in 2000.6

 The question then becomes, why are Washington, NATO, the EU and inclusive and importantly, the German Government, so eager to legitimize the breakaway Kosovo? A Kosovo run internally by organized criminal networks is easy for NATO to control. It insures a weak state which is far easier to bring under NATO domination. Combined with NATO control over Afghanistan where the Kosovo heroin controlled by Prime Minister Thaci originates, the Pentagon is building a web of encirclement around Russia that is anything but peaceful.

 The Thaci dependence on US and NATO good graces insures Thaci’s government will do what it is asked. That, in turn, assures the US a major military gain consolidating its permanent presence in the strategically vital southeast Europe. It is a major step in consolidating NATO control of Eurasia, and gives the US a large swing its way in the European balance of power. Little wonder Moscow has not welcomed the development, nor have numerous other states. The US is literally playing with dynamite, potentially as well with nuclear war in the Balkans.

*F. William Engdahl is author of Full Spectrum Dominance: Totalitarian Democracy in the New World Order. He may be contacted via his website, www.engdahl.oilgeopolitics.net

Notes

1 RIA Novosti, US to Help Kosovo Join EU NATO: Clinton, April 5, 2012, accessed in
http://en.rian.ru/world/20120405/172621125.html.

 2 Rick Rozoff, Pentagon and NATO Complete Their Conquest of The Balkans, Global Research, November 28, 2009, accessed in
www.globalresearch.ca/index.php?context=va&aid=16311.

 3 Tom Burghardt, The End of the Affair: The BND, CIA and Kosovo’s Deep State, accessed in

http://wikileaks.org/wiki/The_End_of_the_Affair%3F_The_BND%2C_CIA_and_Kosovo%27s_Deep_State.

 4 The Telegraph, Kosovo’s prime minister ‘key player in mafia-like gang,’ December 14, 2010, accessed in
http://www.telegraph.co.uk/news/worldnews/europe/kosovo/8202700/Kosovos-prime-minister-key-player-in-mafia-like-gang.html.

 5 Ibid.

 6  Paul Lewis, Kosovo PM is head of human organ and arms ring Council of Europe reports, The Guardian, 14 December 2010.

 F. William Engdahl is a frequent contributor to Global Research.  Global Research Articles by F. William Engdahl

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Google’s ‘Ambient Background’ Spy Tech

March 23, 2012

By PAUL JOSEPH WATSON | INFOWARS.COM | MARCH 23, 2012

Six years ago we warned readers that Google was planning to use the ambient background noise of a person’s environment to spy on their activities in order to direct targeted advertising at them through technological devices. That has now come to fruition with the search engine giant filing a petition for “Advertising based on environmental conditions.”

“As that title implies, it’s not just background sounds that could be used to determine what adverts you seen on your mobile phone. The patent also describes using ‘temperature, humidity, light and air composition’ to produced targeted adverts,” reports the Daily Mail.

In other words, Google is going to spy on your private conversations, music preferences, TV watching habits, your choice of radio station, and whatever else is happening in your immediate environment, in order to build a psychological profile of your entire life.

The current patent relates to smart phones, but any Inter-connected device could ultimately be used for the same purpose.

Indeed, back in 2006 when we first reported on the issue, Google was already finalizing plans to spy on an individual’s ambient background environment by means of the microphone embedded in their personal computer.

In an article entitled Government, Industry To Use Computer Microphones To Spy On 150 Million Americans, we reported how Google was “planning to use microphones in the computers of an estimated 150 million-plus Internet active Americans to spy on their lifestyle choices and build psychological profiles which will be used for surveillance and minority report style invasive advertising and data mining.”

Google’s efforts to spy on users via their cell phones is part of the wider move towards the ‘Internet of things’ where virtually every technological appliance will be connected to the web, opening a pandora’s box of surveillance opportunities.

Given that the private industry is already licking its lips at the commercial prospects for this technology, don’t be naive to think that the state isn’t too far behind.

CIA Director David Petraeus recently lauded this development as “transformational” because it would open up a world of new opportunities for “clandestine tradecraft,” or in other words, make it easier for intelligence agencies and governments to spy on you via your dishwasher.

Petraeus said the emergence of so-called ‘smart’ devices would “change our notions of secrecy,” allowing authorities to track individuals via their household appliances.

“Once upon a time, spies had to place a bug in your chandelier to hear your conversation. With the rise of the “smart home,” you’d be sending tagged, geolocated data that a spy agency can intercept in real time when you use the lighting app on your phone to adjust your living room’s ambiance,” reports Wired.

“Items of interest will be located, identified, monitored, and remotely controlled through technologies such as radio-frequency identification, sensor networks, tiny embedded servers, and energy harvesters—all connected to the next-generation Internet using abundant, low cost, and high-power computing—the latter now going to cloud computing, in many areas greater and greater supercomputing, and, ultimately, heading to quantum computing,” Petraeus told attendees at a meeting for the CIA’s venture capital firm In-Q-Tel.

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September 11, 2001 Insider Trading – Here are the Facts

March 21, 2012

By LARS SCHALL | GLOBAL RESEARCH | MARCH 21, 2012

Is there any truth in the allegations that informed circles made substantial profits in the financial markets in connection to the terror attacks of September 11, 2001, on the United States?

Arguably, the best place to start is by examining put options, which occurred around Tuesday, September 11, 2001, to an abnormal extent, and at the beginning via software that played a key role: the Prosecutor’s Management Information System, abbreviated as PROMIS. [i]

PROMIS is a software program that seems to be fitted with almost “magical” abilities. Furthermore, it is the subject of a decades-long dispute between its inventor, Bill Hamilton, and various people/institutions associated with intelligence agencies, military and security consultancy firms. [1]

One of the “magical” capabilities of PROMIS, one has to assume, is that it is equipped with artificial intelligence and was apparently from the outset “able to simultaneously read and integrate any number of different computer programs or databases, regardless of the language in which the original programs had been written or the operating systems and platforms on which that database was then currently installed.” [2]

And then it becomes really interesting:

What would you do if you possessed software that could think, understand every major language in the world, that provided peep-holes into everyone else’s computer “dressing rooms”, that could insert data into computers without people’s knowledge, that could fill in blanks beyond human reasoning, and also predict what people do – before they did it? You would probably use it, wouldn’t you? [3]

Granted, these capabilities sound hardly believable. In fact, the whole story of PROMIS, which Mike Ruppert develops in the course of his book Crossing the Rubicon in all its bizarre facets and turns, seems as if someone had developed a novel in the style of Philip K Dick and William Gibson. However, what Ruppert has collected about PROMIS is based on reputable sources as well as on results of personal investigations, which await a jury to take a first critical look at.

This seems all the more urgent if you add to the PROMIS capabilities “that it was a given that PROMIS was used for a wide variety of purposes by intelligence agencies, including the real-time monitoring of stock transactions on all the world´s major financial markets”. [4]

We are therefore dealing with a software that
a) Infiltrates computer and communication systems without being noticed.
b) Can manipulate data.
c) Is capable to track the global stock market trade in real time.

Point c is relevant to all that happened in connection with the never completely cleared up transactions that occurred just before September 11, [5] and of which the former chairman of the Deutsche Bundesbank Ernst Weltke said “could not have been planned and carried out without a certain knowledge”. [6]

I specifically asked financial journalist Max Keiser, who for years had worked on Wall Street as a stock and options trader, about the put option trades. Keiser pointed out in this context that he “had spoken with many brokers in the towers of the World Trade Center around that time. I heard firsthand about the airline put trade from brokers at Cantor Fitzgerald days before.” He then talked with me about an explosive issue, on which Ruppert elaborated in detail in Crossing the Rubicon.

Max Keiser: There are many aspects concerning these option purchases that have not been disclosed yet. I also worked at Alex Brown & Sons (ABS). Deutsche Bank bought Alex Brown & Sons in 1999. When the attacks occurred, ABS was owned by Deutsche Bank. An important person at ABS was Buzzy Krongard. I have met him several times at the offices in Baltimore. Krongard had transferred to become executive director at the CIA. The option purchases, in which ABS was involved, occurred in the offices of ABS in Baltimore. The noise which occurred between Baltimore, New York City and Langley was interesting, as you can imagine, to say the least.

Under consideration here is the fact that Alex Brown, a subsidiary of Deutsche Bank (where many of the alleged 9/11 hijackers handled their banking transactions – for example Mohammed Atta) traded massive put options purchases on United Airlines Company UAL through the Chicago Board Option Exchange (CBOE) – “to the embarrassment of investigators”, as British newspaper The Independent reported. [7]

On September 12, the chairman of the board of Deutsche Bank Alex Brown, Mayo A Shattuck III, suddenly and quietly renounced his post, although he still had a three-year contract with an annual salary of several million US dollars. One could perceive that as somehow strange.

A few weeks later, the press spokesperson of the Central Intelligence Agency (CIA) at that time, Tom Crispell, declined all comments, when he was contacted for a report for Ruppert´s website From the Wilderness, and had being asked “whether the Treasury Department or FBI [Federal Bureau of Investigation] had questioned CIA executive director and former Deutsche Bank-Alex Brown CEO [chief executive officer], A B ‘Buzzy’ Krongard, about CIA monitoring of financial markets using PROMIS and his former position as overseer of Brown’s ‘private client’ relations.” [8]

Just before he was recruited personally by former CIA chief George Tenet for the CIA, Krongard supervised mainly private client banking at Alex Brown. [9]

In any case, after 9/11 on the first trading day, when the US stock markets were open again, the stock price of UAL declined by 43%. (The four aircraft hijacked on September 11 were American Airlines Flight 11, American Airlines Flight 77 and UAL flights 175 and 93.)

With his background as a former options trader, Keiser explained an important issue to me in that regard.

Max Keiser: Put options are, if they are employed in a speculative trade, basically bets that stock prices will drop abruptly. The purchaser, who enters a time-specific contract with a seller, does not have to own the stock at the time when the contract is purchased.

Related to the issue of insider trading via (put or call) options there is also a noteworthy definition by the Swiss economists Remo Crameri, Marc Chesney and Loriano Mancini, notably that an option trade may be “identified as informed” – but is not yet (legally) proven – “when it is characterized by an unusual large increment in open interest and volume, induces large gains, and is not hedged in the stock market”. [10]

Open interest describes contracts which have not been settled (been exercised) by the end of the trading session, but are still open. Not hedged in the stock market means that the buyer of a (put or call) option holds no shares of the underlying asset, by which he might be able to mitigate or compensate losses if his trade doesn’t work out, or phrased differently: one does not hedge, because it is unnecessary, since one knows that the bet is one, pardon, “dead sure thing.” (In this respect it is thus not really a bet, because the result is not uncertain, but a foregone conclusion.)

In this case, the vehicle of the calculation was “ridiculously cheap put options which give the holder the ‘right’ for a period of time to sell certain shares at a price which is far below the current market price – which is a highly risky bet, because you lose money if at maturity the market price is still higher than the price agreed in the option. However, when these shares fell much deeper after the terrorist attacks, these options multiplied their value several hundred times because by now the selling price specified in the option was much higher than the market price. These risky games with short options are a sure indication for investors who knew that within a few days something would happen that would drastically reduce the market price of those shares.” [11]

Software such as PROMIS in turn is used with the precise intent to monitor the stock markets in real time to track price movements that appear suspicious. Therefore, the US intelligence services must have received clear warnings from the singular, never before sighted transactions prior to 9/11.

Of great importance with regard to the track, which should lead to the perpetrators if you were seriously contemplating to go after them, is this:

Max Keiser: The Options Clearing Corporation has a duty to handle the transactions, and does so rather anonymously – whereas the bank that executes the transaction as a broker can determine the identity of both parties.

But that may have hardly ever been the intention of the regulatory authorities when the track led to, amongst others, Alvin Bernard “Buzzy” Krongard, Alex Brown & Sons and the CIA. Ruppert, however, describes this case in Crossing the Rubicon in full length as far as possible. [12]

In addition, there are also ways and means for insiders to veil their tracks. In order to be less obvious, “the insiders could trade small numbers of contracts. These could be traded under multiple accounts to avoid drawing attention to large trading volumes going through one single large account. They could also trade small volumes in each contract but trade more contracts to avoid drawing attention. As open interest increases, non-insiders may detect a perceived signal and increase their trading activity. Insiders can then come back to enter into more transactions based on a seemingly significant trade signal from the market. In this regard, it would be difficult for the CBOE to ferret out the insiders from the non-insiders, because both are trading heavily.” [13]

The matter which needs clarification here is generally judged by Keiser as follows:

Max Keiser: My thought is that many (not all) of those who died on 9/11 were financial mercenaries – and we should feel the same about them as we feel about all mercenaries who get killed. The tragedy is that these companies mixed civilians with mercenaries, and that they were also killed. So have companies on Wall Street used civilians as human shields maybe?

According to a report by Bloomberg published in early October 2001, the US Securities and Exchange Commission (SEC) began a probe into certain stock market transactions around 9/11 that included 38 companies, among them: American Airlines, United Airlines, Continental Airlines, Northwest Airlines, Southwest Airlines, Boeing, Lockheed Martin Corp., American Express Corp., American International Group, AXA SA, Bank of America Corp., Bank of New York Corp., Bear Stearns, Citigroup, Lehman Brothers Holdings Inc., Morgan Stanley, General Motors and Raytheon. [14]

So far, so good. In the same month, however, the San Francisco Chronicle newspaper reported that the SEC took the unprecedented step to deputize hundreds, if not even thousands of key stakeholders in the private sector for their investigation. In a statement that was sent to almost all listed companies in the US, the SEC asked the addressed companies to assign senior staff for the investigation, who would be aware of “the sensitive nature” of the case and could be relied on to “exercise appropriate discretion”. [15]

In essence, it was about controlling information, not about provision and disclosure of facts. Such a course of action involves compromising consequences. Ruppert:

What happens when you deputize someone in a national security or criminal investigation is that you make it illegal for them to disclose publicly what they know. Smart move. In effect, they become government agents and are controlled by government regulations rather than their own conscience. In fact, they can be thrown into jail without a hearing if they talk publicly. I have seen this implied threat time after time with federal investigators, intelligence agents, and even members of United States Congress who are bound so tightly by secrecy oaths and agreements that they are not even able to disclose criminal activities inside the government for fear of incarceration. [16]

Among the reports about suspected insider trading which are mentioned in Crossing the Rubicon/From the Wilderness is a list that was published under the heading “Black Tuesday: The World’s Largest Insider Trading Scam?” by the Israeli Herzliyya International Policy Institute for Counterterrorism on September 21, 2001:

  • Between September 6 and 7, the CBOE saw purchases of 4,744 put options on United Airlines, but only 396 call options. Assuming that 4,000 of the options were bought by people with advance knowledge of the imminent attacks, these “insiders” would have profited by almost $5 million.
  • On September 10, 4,516 put options on American Airlines were bought on the Chicago exchange, compared to only 748 calls. Again, there was no news at that point to justify this imbalance; again, assuming that 4,000 of these options trades represent “insiders”, they would represent a gain of about $4 million.
  • [The levels of put options purchased above were more than six times higher than normal.]
  • No similar trading in other airlines occurred on the Chicago exchange in the days immediately preceding Black Tuesday.
  • Morgan Stanley Dean Witter & Co, which occupied 22 floors of the World Trade Center, saw 2,157 of its October $45 put options bought in the three trading days before Black Tuesday; this compares to an average of 27 contracts per day before September 6. Morgan Stanley’s share price fell from $48.90 to $42.50 in the aftermath of the attacks. Assuming that 2,000 of these options contracts were bought based upon knowledge of the approaching attacks, their purchasers could have profited by at least $1.2 million.
  • Merrill Lynch & Co, with headquarters near the Twin Towers, saw 12,215 October $45 put options bought in the four trading days before the attacks; the previous average volume in those shares had been 252 contracts per day (a 1200% increase). When trading resumed, Merrill’s shares fell from $46.88 to $41.50; assuming that 11,000 option contracts were bought by “insiders”, their profit would have been about $5.5 million.
  • European regulators are examining trades in Germany’s Munich Re, Switzerland’s Swiss Re, and AXA of France, all major reinsurers with exposure to the Black Tuesday disaster. (Note: AXA also owns more than 25% of American Airlines stock, making the attacks a “double whammy” for them.) [17]

Concerning the statements of the former chairman of the Deutsche Bundesbank Ernst Welteke, their tenor in various press reports put together is as follows:

German central bank president Ernst Welteke later reports that a study by his bank indicates, “There are ever clearer signs that there were activities on international financial markets that must have been carried out with the necessary expert knowledge,” not only in shares of heavily affected industries such as airlines and insurance companies, but also in gold and oil. [Daily Telegraph, 9/23/2001] His researchers have found “almost irrefutable proof of insider trading”. [Miami Herald, 9/24/2001] “If you look at movements in markets before and after the attack, it makes your brow furrow. But it is extremely difficult to really verify it.” Nevertheless, he believes that “in one or the other case it will be possible to pinpoint the source”. [Fox News, 9/22/2001] Welteke reports “a fundamentally inexplicable rise” in oil prices before the attacks [Miami Herald, 9/24/2001] and then a further rise of 13 percent the day after the attacks. Gold rises nonstop for days after the attacks. [Daily Telegraph, 9/23/2001] [18]

Related to those observations, I sent a request via e-mail to the press office of the Deutsche Bundesbank on August 1, 2011, from which I was hoping to learn:How did the Bundesbank deal with this information? Did US federal agencies ask to see the study? With whom did the Bundesbank share this information? And additionally:

1. Can you confirm that there is such a study of the Bundesbank concerning 9/11 insider trading, which was carried out in September 2001?
2. If Yes: what is the title?
3. If Yes: who were the authors?
4. If Yes: has the study ever been made available to the public?

On August 2, I was then informed: “Your mail has been received by us and is being processed under the number 2011 / 011551.” Ultimately, however, the press office of the Deutsche Bundesbank was only available for an oral explanation on the phone. With this explanation, I then turned to the press office of the federal financial regulator in Germany, the Bundesanstalt fur Finanzdienstleistungsaufsicht, BaFin, with the following e-mail – and that because of obvious reasons:

Yesterday, I sent a request (see end of this e-mail) to the press office of the Deutsche Bundesbank relating to insider trading connected to the terrorist attacks on September 11, 2001, and respectively relating to an alleged study carried by the Deutsche Bundesbank. The request carries the reference number 2011 / 011551.

The press office or respectively Mr Peter Trautmann was only available for an oral explanation. I repeat this now, because it is related to your entity. This will be followed by my further questions.

According to an oral explanation from the press office of the Deutsche Bundesbank, there has never been a detailed and official study on insider trading from the Bundesbank. Rather, there has been probably ad-hoc analysis with corresponding charts of price movements as briefings for the Bundesbank board. In addition, it would have been the duty of the Bundesfinanzaufsicht to investigate this matter. The press office of the Bundesbank was also not willing to give out any written information, not even after my hint that this alleged study by the Bundesbank has been floating around the Internet for years without any contradiction. That was the oral information from the Bundesbank press office, or respectively from Mr Peter Trautmann.

Now my questions for you:

1. Has the BaFin ever investigated the 9/11 insider trading?
2. With what result? Have the results been made public?
3. Have there not been any grounds for suspicion that would have justified an investigation, for example as damaged enterprise: Munich Re, and as buyers of put options of UAL’s United Airlines Company: Deutsche Bank/Alex Brown?
4. Has the Deutsche Bundesbank ever enquired with BaFin what information they have regarding the 9/11 insider trading – for example for the creation of ad-hoc analysis for the Bundesbank?
5. Have the US federal agencies ever inquired if the BaFin could cooperate with them in an investigation?

Could you reply to me in writing, unlike the Deutsche Bundesbank, please? I would be very grateful for that!

The next day I did indeed receive an e-mail concerning this topic from Anja Engelland, the press officer of the BaFin in which she answered my questions as follows:

1. Yes, the former Bundesaufsichtsamt fur Wertpapierhandel, BAWe (federal supervisory for securities trading), has carried out a comprehensive analysis of the operations.
2. As a result, no evidence of insider trading has been found. Their approach and results have been published by the BAWe or BaFin in the annual reports for the years 2001 (cf S 26/27) and 2002 (cf p 156 above first paragraph). Here are the links. [See here and here.]
3. See annual reports 2001 and 2002. Put options on United Airlines were not traded on German stock exchanges (the first EUREX options on US equities were introduced only after the attacks on 9/11/2001); there were warrants on UAL and other US stocks, but those traded only in low volumes.
4. I personally do not know about such a request. Furthermore, the Bundesbank itself would have to comment on this.
5. BaFin is fundamentally entitled to the exchange of information with foreign supervisory authorities, like SEC, on the basis of written agreements, so-called memoranda of understanding (MoU). Regarding potential inquiries from foreign supervisory authorities, the BaFin can unfortunately not comment, this would be a matter of respective authority. For this I ask for understanding.

Then I wrote another brief note to BaFin, “in order to prevent any misunderstanding: your answers refers, as far as I understand, solely to the financial markets in Germany and Frankfurt, or not?” The reply from BaFin:

The answers refer to the German financial market as a whole and not only on the Frankfurt Stock Exchange. In terms of the assessment of foreign financial markets, the relevant authorities are the competent points of contact.

In my inquiries, I mentioned, among other things, a scientific study by US economist Allen M Poteshman from the University of Illinois at Urbana-Champaign, which had been carried out in 2006 regarding the put option trading around 9/11 related to the two airlines involved, United Airlines and American Airlines. Poteshman came to this conclusion: “Examination of the option trading leading up to September 11 reveals that there was an unusually high level of put buying. This finding is consistent with informed investors having traded options in advance of the attacks.” [19]

TO READ THE COMPLETE ASIAN TIMES ARTICLE CLICK HERE

Lars Schall is a German financial journalist. This article published by the Asian Times is a slightly modified and updated excerpt from the book Mordanschlag 9/11. Eine kriminalistische Recherche zu Finanzen, Ol und Drogen (Assassination 9/11: A criminalistic research on finance, oil and drugs), published in Germany by Schild Verlag.

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