The Black Budget Report:
An Investigation into the CIA’s ‘Black Budget’ and the Second Manhattan
Project
©
Michael E.
Salla, PhD
Table of
Contents
This report examines the
existence of a CIA ‘black budget’ and an extensive network of ‘deep black
projects’ that it funds. The report identifies the legal framework established
by the US Congress for the creation of a CIA ‘black budget’ from the
appropriations earmarked for other federal agencies that are siphoned through
the CIA as the sole conduit of black budget funds. The report investigates the
legal challenges to the constitutionality of the CIA’s black budget; how the
CIA uses its legal authority to extract appropriations from government
agencies such as HUD; how the CIA launders non-appropriated money through
other federal agencies; and the efforts the CIA goes to prevent these
financial transfers from being exposed.
Using as a case study the legal difficulties faced by an innovative
mortgage finance company, Hamilton Securities, the report will argue that the
CIA’s covert role in Hamilton’s demise is compelling evidence that the CIA was
involved in funding irregularities in HUD. It will be finally argued that the
size of black budget, the secrecy surrounding it, the extent senior officials
in Federal agencies go to targeting individuals and companies that threaten to
reveal where congressional appropriations are ultimately going, suggest a vast
number of ‘deep black projects’ that collectively form a highly classified
second Manhattan Project whose existence, goals and budget are kept secret.
Dr. Michael E.
Salla has held academic appointments in the School of International Service,
American University, Washington DC (1996-2001), and the Department of Political
Science, Australian National University, Canberra, Australia (1994-96). He
taught as an adjunct faculty member at George Washington University, Washington
DC., in 2002. He was a ‘Researcher in Residence’ at the Center for Global
Peace/School of International Service, American University (2001-2004). He
has a PhD in Government from the University of Queensland, Australia, and
an MA in Philosophy from the University of Melbourne, Australia. He is the
author of The Hero’s Journey Toward a Second American Century (Greenwood
Press, 2002); co-editor of Why the Cold War Ended (Greenwood Press,
1995) and Essays on Peace (Central Queensland University Press, 1995);
and authored more than seventy articles, chapters, and book reviews on peace,
ethnic conflict and conflict resolution. He has conducted research and fieldwork
in the ethnic conflicts in East Timor, Kosovo, Macedonia, and Sri Lanka. He
has organized a number of international workshops involving mid to high level
participants from these conflicts.
The Black Budget
Report: An Independent Investigation of the CIA’s ‘Black Budget’ and the
Second Manhattan Project
Each year the
US Department of Defense (DoD) lists a number of single line items in its
budget that have a program number such as 0605236F, code names like CLASSIC
WIZARD or vague description such as “special evaluation program,” that don’t
refer to any weapons system known to the general public, Congressional
officials or even defense analysts. These single line items are covers for the
creation of a ‘black budget’ - a top secret slush fund set up by the DoD, with
the approval of the US Congress, to apparently fund intelligence organizations
such as the CIA as well as covert operations and classified weapons programs
by the DoD. The ‘black budget’ allows intelligence activities, covert
operations and classified weapons research to be conducted without
Congressional oversight on the grounds that oversight would compromise the
secrecy essential for the success of such ‘black programs’. These ‘black
programs’ are typically classified as ‘Special Access’ or ‘Controlled Access
Programs’ that have a security classification system more rigorous than the
secret-top secret classifications for most government agencies, making such
programs known only to those with a ‘need to know’. This report seeks to
unmask the size of the black budget and the covert world of ‘deep black’
projects it funds by investigating the mechanisms used to transfer money into
the black budget’. Following the money trail and official efforts to keep
secret the size of the black budget and how it is generated, provides the key
pieces of a complex financial and national security jigsaw puzzle.
The ‘black
budget’ funds a covert world of unaccountable intelligence activities, covert
military/intelligence operations and classified weapons programs. The
conventional view is that this covert world is funded by Congressional
appropriations that authorize the DoD to use US Treasury funds for classified
projects and intelligence activities that appear as vague items on the DoD
budget. Subtracting the cost of known weapons systems and programs from the
total DoD budget gives Congressional analysts a means of estimating the size
and scope of operations of the covert world of ‘black projects’, without
knowing their precise budgets or activities. There is however compelling
evidence that the covert world of black programs is primarily funded by a
black budget created by the CIA rather than the DoD. Rather than being a
beneficiary of a Congressionally sanctioned DoD ‘black budget’, the CIA has
its own ‘unofficial’ black budget that acts as a conduit for funds to be
secretly siphoned into the various military intelligence agencies associated
with both the CIA and the DoD for intelligence activities, covert operations
and weapons research.
The CIA has the
unique legal ability among all US government departments and agencies to
generate funds through appropriations of other federal government agencies and
other sources “without regard to any provisions of law” and without
regard to the intent behind Congressional appropriations. [2] Every year, billions of dollars of
Congressional appropriations are diverted from their Congressionally
sanctioned purposes to the CIA and DoD based intelligence agencies without
knowledge of the public and with the collusion of Congressional leaders. The
covert world of ‘black programs’ acts with virtual impunity, overseen and
regulated by itself, funding itself through secret slush funds, and is free of
the limitations that come from Congressional oversight, proper auditing
procedures and public scrutiny.
This report
examines the existence of a CIA ‘black budget’ and an extensive network of
‘black projects’ that it funds. The report identifies the legal framework
established by the US Congress for the creation of a CIA ‘black budget’ from
the appropriations earmarked for other federal agencies that are siphoned
through the CIA as the sole conduit of black budget funds. The report
investigates the legal challenges to the constitutionality of the CIA’s black
budget; how the CIA uses its legal authority to extract appropriations from
government agencies such as HUD; how the CIA even launders non-appropriated
money through other federal agencies; and the efforts the CIA goes to prevent
these financial transfers from being exposed. Using as a case study the legal
difficulties faced by an innovative mortgage finance company, Hamilton
Securities, the report will argue that the CIA’s covert role in Hamilton’s
demise is compelling evidence that the CIA was involved in funding
irregularities in HUD.
The key to
uncovering the true size of the black budget are the chronic accounting
anomalies in the DoD budget that reveal that as much as one trillion US
dollars is annually being siphoned by the CIA into the DoD for secret
distribution to various military intelligence agencies and the ‘deep black’
programs they respectively support. All of this, it will be argued, has
dubious constitutional status but is made legal by the various Congressional
enactments, senior Congressional officials and the Executive Office. It will
be finally argued that the size of black budget, the secrecy surrounding it,
the extent senior officials in Federal agencies go to targeting individuals
and companies that threaten to reveal where Congressional appropriations are
ultimately going, suggest a vast network of ‘deep black projects’ that
collectively form a highly classified second Manhattan Project whose
existence, goals and budget are kept secret.
Birth
of the Black Budget
In 1947, the
National Security Act created the National Security Council, the Central
Intelligence Organization (CIA) and consolidated the US military into one
entity, the Department of Defense (DoD). One of the issues that remained
unresolved from the creation and operation of the CIA was the extent to which
its budget and intelligence activities would remain a secret. According to
Article 1, sec. 9, of the US Constitution, “No money shall be drawn from the
treasury, but in consequence of appropriations made by law; and a regular
statement and account of receipts and expenditures of all public money shall
be published from time to time.” This constitutional requirement conflicted
with the need for secrecy concerning Congressional appropriations for the CIA.
The solution was for Congress to pass legislation approving the secrecy over
the funding mechanisms used for the CIA and its intelligence related
activities. The necessary bill was passed with great haste and minimal debate
causing considerable concern among those few Congressmen brave enough to
openly challenge the constitutionality of the Act. [3] Congressman Emmanuel Celler of New York voted
for the bill but protested: “If the members of the Armed Services Committee
can hear the detailed information to support this bill, why cannot the entire
membership? Are they the Brahmins and we the untouchables? Secrecy is the
answer.” [4] Celler, like the majority of Congressmen,
passed the CIA Act very much like the wealthy father viewed the birth of an
illegitimate child, appropriate care would be taken to provide for the child,
but there would be no official admission of patrimony and the responsibility
that entails.
The 1949 CIA Act comprised
additions to those sections of the 1947 National Security Act that dealt with
the creation of CIA. The 1949 CIA Act gave a Congressional stamp of approval
to the creation of a ‘black budget’ as the following sections make clear:
… any other
Government agency is authorized to transfer to or receive from the Agency
such sums without regard to any provisions of law limiting or
prohibiting transfers between appropriations [emphasis added]. Sums
transferred to the Agency in accordance with this paragraph may be expended
for the purposes and under the authority of sections 403a to 403s of this
title without regard to limitations of appropriations from which
transferred. [5]
This section meant that funds
could be transferred from the appropriations of other government departments
earmarked for specific tasks, “without regard to any provisions of law”. For
example, a Congressional appropriation earmarked for housing subsidies to
low-income workers by Housing and Urban Development (HUD), could be legally
transferred either to the CIA for covert intelligence activities or through
the CIA to a DoD associated intelligence agency for a classified program. Thus
HUD employees might find that their relevant housing programs were lacking the
necessary funds for relief efforts even though Congress had appropriated these
funds for this purpose. Any HUD official unfortunate enough as to enquire into
the location of the missing funds would be deterred from pursuing the issue,
and if these officials persisted, they could be summarily dismissed, and then
exposed to a variety of CIA activities to silence them. [6]
Despite its legal authority to transfer
funds from other federal agencies regardless of what their Congressional
appropriations were for, the conventional wisdom was that the major source of
appropriations for the CIA came through the DoD. This is apparently what
President Truman had in mind when he approved that the "operating funds for
the organization [CIA] would be obtained from the Departments of State, War,
and Navy instead of directly from Congress." [7] This funding arrangement ostensibly assured
that the CIA would be subordinate to the Secretaries of Defense and State who
would be in a better position to influence its covert activities. Four years
after passage of the 1949 CIA Act, the following categories and sums in the
relevant defense force appropriations apparently provided the bulk of the
black budget funding of the CIA.
Table 1. CIA –
Location of Budget Funds Fiscal Year 1953 [8]
The
Congressionally sanctioned method of CIA appropriations meant that the $587
million the CIA acknowledged receiving from DoD for its intelligence
operations in 1953 would remain a secret both to rank and file members of
Congress, and the general public. The alleged sum the CIA received from the
DoD in 1953 ($3.4 billion in 2002 terms) was in likelihood already dwarfed, as
will be argued later, by the funds the CIA was transferring through other
government agencies into its black budget. [9]
The
constitutional validity of the CIA’s black budget and its size was something
that did not unduly trouble most Congressmen during the early years of the
Cold War who believed that national security considerations concerning the
Soviet threat merited such an extraordinary practice. However, it did trouble one US citizen
who in 1967 took the CIA to court over the secrecy surrounding the true size
of its black budget.
Legal and Congressional Efforts to Disclose the CIA’s Black Budget
William
Richardson was an ‘ordinary’ citizen who realized the inconsistency between
the Constitution’s requirement that all government appropriations would have
“a regular statement and account of receipts and expenditures” published, and
the CIA’s Act’s secrecy provision concerning the CIA budget. In 1967,
Richardson made an effort to discover the true size of the CIA’s ‘black
budget’ by writing a letter to the US Government Printing Office. He requested
a copy of the CIA budget “published by the Government in compliance with
Article I, section 9, clause 7 of the United States Constitution.” [10] Richardson received replies from the US
Treasury that essentially rebuffed his efforts and he decided to start a
Federal court action against the US government. He argued that the CIA Act was
“repugnant to the Constitution” since it “operates to falsify the regular
Statement and Account of all public Money.” [11] After three years of legal wrangling,
Richardson’s case was dismissed by the Pittsburgh Federal Judge, Joseph P.
Wilson, who decided that Richardson did not have ‘standing’ to sue the Federal
government since he was not directly affected by issue at dispute. In short,
the judge was taking the conservative legal position that a ‘generalized
grievance’ is not a sufficient basis for a private citizen to take a US
Federal Agency to court. Richardson appealed and in 1971, succeeded in having
his case heard before a full bench of the United States Court of Appeals in
Philadelphia (the penultimate legal court in the US). In his legal brief,
Richardson claimed:
Never in the
history of this country has so much money been spent without the traditional
safeguard of openness and in direct defiance of constitutional provisions….
Billions are spent each year by unknown entities and this amount is spread
throughout the Treasury’s reporting system to confuse the public and
belittle the Constitution. [12]
The nine
federal judges ruled in a 6-3 decision in 1972 that Richardson did have legal
standing since the Court reasoned that a
… responsible
and intelligent taxpayer and citizen, of course, wants to know how his tax
money is spent. Without this information he cannot intelligently follow
the actions of the Congress or the Executive. Nor can he properly fulfill
his obligations as a member of the electorate.
[13]
Richardson had won an extraordinary,
though ultimately short lived, legal victory. He had succeeded in arguing
that the ‘black budget’ was inconsistent with his constitutional obligations
and that the CIA Act had doubtful constitutional standing. The 1971 decision
of the Court of Appeals is the closest any US court has come to ruling on
the constitutionality of the CIA Act. The Court had effectively decided
that Congress had no right to deprive American citizens knowledge of the
true size of the appropriated money that was being channeled to the CIA
through other government agencies.
The Federal Government immediately
appealed to the Supreme Court and in July 1974, the nine Supreme Court Justices
ruled in a 5-4 decision, that Richardson did not have the legal standing
to challenge the Federal government.
[14]
Adopting a conservative legal position, the Court argued
that Richardson’s suit was nothing more than a generalized political grievance
by a citizen that needed to be dealt with through the political system,
rather than the legal system. The Supreme Court concluded that it did not
need to examine the merits of Richardson’s case, since he did not have legal
standing to bring the suit to the Court. The Supreme Court thus overturned
the earlier ruling of the US Court of Appeals. The immediate consequence
was that the black budget would remain a secret for some years yet. Despite
the setback, Richardson had demonstrated that the ‘black budget’ and the
CIA Act that created it, had dubious constitutional standing, and only required
a challenge from a party with legal standing to most likely have it struck
from the statute books.
[15]
In the 1970’s the black budget
and its true size became for the first time a subject of intense congressional
scrutiny. In the aftermath of the Vietnam war and the behavior of the
intelligence community in sponsoring private wars throughout Indochina and
elsewhere, the Senate decided in 1976 to elect a committee to investigate the
CIA’s covert activities and the black budget for the intelligence community.
In its final report, the Senate Select Committee on Intelligence (the Church
Committee) found the black budget to be unconstitutional and recommended
public disclosure of its size:
The budget
procedures, which presently govern the Central Intelligence Agency and other
agencies of the Intelligence Community, prevent most members of Congress
from knowing how much money is spent by any of these agencies or even how
much money is spent on intelligence as a whole. In addition, most members of
the public are deceived about the appropriations and expenditures of other
government agencies whose budgets are inflated to conceal funds for the
intelligence community.
The failure
to provide this information to the public and to the Congress prevents
either from effectively ordering priorities and violates Article I, Section
9, Clause 7 of the Constitution…. The Committee finds that publication of
the aggregate figure for national intelligence would begin to satisfy the
Constitutional requirement and would not damage the national security. [16]
Unfortunately, the Church Committee’s
recommendation was never implemented as the CIA Director (DCI), George Bush,
successfully argued for the committee to hold off implementing its decision.
The Committee voted 6-5 to hold off and the recommendation was never brought
to the whole Senate for a decision.
[17]
It would have to wait until
the 1990’s before Congress would once again take up the issue of the black
budget. Ironically it was Congress that had provided the legislation that
would be an effective mechanism to end the secrecy surrounding the size
of the black budget. The Freedom of Information Act (FOIA) was passed in
1966 and made it possible for individuals to gain access to the records
of any federal government agency by making a written request.
[18]
All agencies
are required to disclose requested records except for information that falls
under nine exemptions and three exclusions of the FOIA. The most relevant
of these exemptions for the CIA Act was (b)(1) exemption 1 which says: “This
exemption protects from disclosure national security information concerning
the national defense or foreign policy, provided that it has been properly
classified in accordance with the substantive and procedural requirements
of an executive order.” If an agency refused to release information,
the requestor could ask for a Federal judge to adjudicate whether the information
did or didn’t qualify for the exemption claimed by the agency in withholding
the relevant information.
In 1967 when Richardson first
took legal action, he did not use the newly passed FOIA in requesting information
about the CIA’s ‘black budget’ since he was challenging the constitutional
basis of the black budget and CIA Act, rather than arguing that release
of the figures would not pose a national security threat. Richardson rightly
assumed that the CIA would not release information concerning the black
budget on the grounds of national security, and that it could persuasively
argue this before a federal judge qualifying for exemption from FOIA.
In 1996, President Clinton introduced
a major change in the secrecy over the size of the black budget when he
argued that its disclosure would not threaten national security. The DCI
under Clinton, John Deutsch gave Congressional testimony that President
Clinton was “persuaded that disclosure of the annual amount appropriated
for intelligence purposes would inform the public and not, in itself, harm
intelligence activities.”
[19]
President Clinton had effectively undercut the main legal
barrier to the CIA indefinitely withholding the size of the black budget
from an FOIA request. In 1997 the Federation of Atomic Scientists made an
FOIA request to the CIA, to disclose the secret combined appropriations
for the Intelligence community that comprises the CIA, National Security
Agency (NSA), National Reconnaissance Office (NRO), Defense Intelligence
Agency (DIA), National Imagery and Mapping Agency (NIMA), and intelligence
branches of the Air force, Navy and Army.
[20]
The DCI refused and the case eventually went before a
Federal Court. In a last ditch effort to prevent disclosure of the ‘black
budget’ the DCI persuaded both the Senate
[21]
and the House of Representatives
[22]
to vote against amendments that would have recommended
its disclosure.
The CIA’s efforts
were to no avail and in 1997 the Federal Judge decided in favor of the FAS
that the ‘black budget’ could be disclosed without harming the national security
of the US. In what was the first major crack in the official secrecy surrounding
the CIA’s budget and its intelligence activities, the CIA subsequently decided
to release for the first time the size of its ‘official’ black budget (appropriations
drawn from single line items on the DoD budget), but reserved the right to
not disclose this figure in future. For the fiscal year of 1997, the combined
aggregate appropriations for the Intelligence Community (black budget) was
said to be 26.6 billion dollars.
[23]
The ‘official’ black budget
for the CIA can be estimated by using the percentage of the black budget
for the intelligence community that went to the CIA as opposed to other
intelligence agencies from DoD appropriations. According to Victor Marchetti
and John Marks, the CIA portion of the intelligence black budget was 750
million from 6.228 billion (approximately 12%) for 1973.
[24]
Victor Marchetti and John Marks put the overall intelligence
budget at $6.228 billion for 1973, of which the CIA disposed of $750 million.
According to David Wise
In 1975 the
entire CIA budget was hidden within a $2 billion appropriation for "Other
Procurement, Air Force." The $12 billion total for all U.S. intelligence, much
higher than previous estimates, was indicated in the report of the Senate
intelligence committee. [25]
Wise’s estimate suggests that
the proportion of the intelligence black budget that goes to the CIA is closer
to approximately 16.7% than the 12.0% estimated by Marchetti and Mark. At the
other end, the Federation of Atomic Scientists, using 1998 figures, estimated
that the CIA’s portion of the black budget was 11.5%. [26] If 12% is taken as the more accurate estimate
of the CIA portion of the black budget, then this suggests that of the 26.6
billion dollars Tenet disclosed went to the Intelligence Community from DoD
appropriations, approximately $3.2 billion (12%) was the official ‘black
budget’ of the CIA. The 1998 estimate converts to $3.5 billion in 2002 terms,
and compares quite favorable with the 1953 figures that presumably made up DoD
appropriations for the CIA black budget that can be converted to approximately
$3.4 billion in 2002 using CPI adjustments. [27] Consequently it appears that much of the
mystery surrounding the black budget of the CIA and the intelligence community
had been ended once official figures for the CIA were released through FOIA in
1997.
However, it will now be argued
that the figures released by Tenet in 1997 for the ‘official black budget’ for
the intelligence community, and earlier estimates dating from 1953 data,
committee reports in the 1970’s, is disinformation intended to steer analysts,
Congress and the general public away from the true size of the CIA’s black
budget. It will be argued that the ‘unofficial’ CIA black budget, in terms of
Congressional appropriations and other funds the CIA transfers through other
government departments and agencies far exceeds the ‘official’ black budget
(DoD appropriations earmarked for the intelligence community), and has been
well disguised as a major purpose of the CIA ever since its creation. The
major purpose of the CIA is to act as a funnel for the combined black budgets
of the intelligence community and the Department of Defense. This is
the reverse of the conventional wisdom behind the ‘official’ black budget that
the DoD funds the CIA. In fact it
is the CIA that funds secret projects run by the various military and
intelligence services in the DoD. Using the testimony of whistleblowers of
other federal government agencies and testimony of DoD Inspector Generals, I
will argue that billions of dollars are annually extracted from these agencies
by the CIA, topped up by revenue from other sources used by the CIA, and then
siphoned to the military intelligence agencies within the DoD for distribution
to ‘deep black projects’ outside of the regular appropriations and oversight
process mandated by Congress for ‘black projects’.
HUD’s Missing Money, Catherine Fitts, Hamilton Securities and the
CIA.
In 1989
Catherine Austin Fitts became Assistant Secretary for Housing in Department of
Housing and Urban Development (HUD). She began to notice money was not
properly tracked as it moved between different HUD departments and there was a
lack of proper accounting mechanisms to deal with discrepancies in revenue
indicated fraud at an alarming level. [28] She attempted to put in place some credible
financial tracking mechanisms to identify where the money was going and to
identify the responsible individuals and HUD departments, but after 18 months
on the job she was suddenly fired by the Bush administration. Fitts was told the day after she left that her
financial reforms through ‘place-based financial accounting and statements’
would also be terminated. [29]
Fitts
subsequently created her own investment company, Hamilton Securities Group
that used specially created computer software for tracking financial flows in
the mortgage industry. In 1993, Hamilton Securities Group won a contract
with HUD to manage its $500 billion portfolio. As a result of its innovative
computer tracking of finances called ‘Community Wizard’, Hamilton Securities
saved Federal Taxpayers $2 billion and according to Fitts "took the world's
breath away." [30] Carolyn Betts, a former Hamilton Securities
employee said:
The HUD field office people went
absolutely crazy when they saw it. You could go in with a pointer on a map
and get to information on expenditures by each HUD program. It was a pretty
beautiful program and would have become unbelievably powerful. [31]
Fitts’ innovative program was so successful
that it was earning special attention from Congressmen with one chairman of
an oversight committee in October 1997 favorably commenting on the
"eye-popping" results.
[32]
Fitts’ program had the potential to revolutionize the way
in which large multibillion dollar portfolios were managed. Vice President
Al Gore's Reinventing Government Initiative gave her firm the Hammer Award
for Excellence in Re-engineering Government. Fitts innovation also came to the attention
of powerful individuals who viewed it as a threat to existing way in which
finances were tracked in HUD and other federal government agencies that apparently
allowed corporations to reap large profits from government inefficiency.
Fitts’ pioneering work came crashing down
around her in June, 1996 when a qui tam (whistleblower) suit was
brought against her firm by a rival HUD contractor John Ervin who alleged
Fitts committed fraud against HUD to the tune of $3.8 million. According
to the Federal False Claims Act,
a qui tam suit has 60 days to be investigated before a federal judge
has to reach a conclusion on the substance of the suit and unseal the qui
tam so that the defendant can respond to the allegations. Instead, the
HUD Inspector General together with the federal judge in charge of the case
took four years before another judge decided the allegations lacked substance,
unsealed the qui tam in July 2000, and the government decided to
end its role in the case.
[33]
In the meantime, Fitts’ firm was subjected to 18 audits
and investigations, multiple subpoenas for thousands of documents, not paid
money owed to it by HUD while the ‘investigation’ was underway, subjected
to media leaks and a smear campaign that frightened away potential investors,
and ultimately raided by Department of Justice agents in 1998. The raid
effectively destroyed the Community Wizard program and put an end to Hamilton
Securities’ efforts to survive the legal onslaught that involved steep legal
costs. At the end, Fitts company went bankrupt, Fitts was emotionally exhausted,
but continued to fight for her reputation, repayment from HUD, and exposure
of wrong doing by the HUD Inspector General in allowing the qui tam law
suit to proceed for four years on a ‘fishing expedition’, while simultaneously
leaking false information.
[34]
After her
experiences in both working with HUD as an employee (1988-1989) and as a
contractor (1993-1997) and observing at first hand the chronic state of
finances that could not be accounted for under normal accounting rules, Fitts
concluded that HUD was being run as a ‘criminal enterprise’:
In the summer
of 2000, a member of the staff for the Chairman of the Senate appropriation
subcommittee (with jurisdiction over HUD …) confided to me that they believed
that HUD was being run as "a criminal enterprise." I responded that I "did not
disagree." Reaching that conclusion was a long time coming. It took many years
of experience implementing practical and sound reforms to the FHA mortgage
system, only to have the system reject any and all efforts to have it become
anything other than an integral part of a significant mortgage bubble and a
pork and slush fund operation. [35]
The fraudulent
movement of finances through HUD were made possible by poor auditing standards
that enabled as much as tens of billions of dollars to go annually missing. [36] In a March 2000 report, the HUD Inspector
General, Susan Gaffney, reported a high number of ‘adjustments’ that had to be
made to account for $59 billion that could not be located in 1999:
At the time
we discontinued our audit work, a total of 42 adjustments totaling about
$17.6 billion had been processed in this manner to adjust fiscal year 1998
ending balances. An additional 242 adjustments totaling about $59.6 billion,
were made to adjust fiscal year 1999 activity. [37]
Gaffney argued that the
‘adjustments’ were caused by HUD’s difficulties in reconciling different
computer systems. An unnamed official within HUD dismissed the idea of the
adjustments being solely problems associated with different computers
systems:
Everything
that has transpired at HUD is not an accident, and it sure isn't a computer
glitch. When you take the different material violations of the most basic
financial-management rules and compare them to the time and effort put in to
have first-rate systems, it is impossible to explain it as anything other
than significant financial fraud. [38]
Such fraud
would not have been possible without collusion at the highest level, the
Director of HUD, Mario Cuomo. Confirmation that the missing $59 billion for
1999 was known to Cuomo was disclosed by the unnamed source in
HUD:
The
losses could be far greater than $59 billion, but they don't know for sure
because the audit isn't completed. Secretary Cuomo is a very smart control
freak, so it's ludicrous to think that he doesn't know what is going
on. [39]
Confirmation
that losses from HUD were an endemic problem rather than peculiar to 1998
and 1999 comes from the General Accounting Office of Congress that released
a report in 2003 stating that in January 2003, “for the 12th year in a row,
the HUD OIG [Office of Inspector General] cited the lack of an integrated
financial-management system as a material weakness in its audit of the department's
financial statements.”
[40]
In
short, billions of dollars were annually missing from HUD and no one knew
where the money was going.
Fitts analysis of the fraudulent
movement of funds through HUD, her initial firing as an Assistant Secretary,
subsequent difficulties her company had with HUD
[41]
, indicated that she had stumbled on to one of the strategies
used by the CIA to generate its secret black budget. Fitts ultimately came
to the conclusion that HUD was being run as a money laundering operation
to fund black projects.
[42]
The sums for HUD alone, $59 billion for 1999, were far
greater than the official $3.5 billion annual estimated budget of the CIA
that came from DoD appropriations. Missing funds from HUD, the participation
of the HUD Director in permitting the funds to go missing, and the difficulties
suffered by Fitts, point to the CIA being behind the missing HUD funds.
The CIA is the only government agency that has the legal authority to co-opt
Federal Agency Directors in permitting billions of dollars to go missing
from or laundered through their budgets for transfer into a ‘black budget’.
It is worth investigating the destruction of Fitts company, Hamilton Securities
Group to identify any CIA fingerprints in covering up the secret transfer
of HUD funds into what will be argued to be the CIA’s ‘unofficial’ black
budget.
The individual who brought the lawsuit against
Fitts, John Ervin, has been described as “notorious for filing nuisance
lawsuits and "bid protests’.”
[43]
His small mortgage
investment firm apparently had, according to one inside source, “up
to 17 in-house personnel working full time on mountains of paperwork regarding
this and other cases.”
[44]
Ervin may simply have been a small time contractor with
a chip on his shoulder from losing the HUD mortgage contract to Fitts’ company.
However, the large number of legal cases his firm was involved in suggests
he may have been simply a front for more powerful actors threatened by Hamilton’s
Securities who wished to cripple it through a damaging court process. More
revealing was the behavior of the federal judge in charge of Fitts’ case
that eventually presided over the case. According to court transcripts,
the initial judge had indicated in 1996 that it would be inappropriate to
extend the seal [on the qui tam] without evidence and that unless
evidence was produced he would not extend the seal again. The case was then
transferred to Judge Stanley Sporkin of the District of Columbia’s District
Court. According to Uri Dowbenky, Sporkin “managed to illegally keep a qui
tam lawsuit sealed for almost 4 years. That could be a ‘judicial’ record.”
[45]
Sporkin had given multiple 60-day extensions to further
investigate the allegations that he claimed were not limited to the False
Claims Act limit of 60 days that applied to Department of Justice investigations,
since the HUD Inspector General had independent subpoena power and chose
to continue the investigation.
[46]
Extending the qui tam in this highly dubious manner
meant that it was kept sealed thus preventing Hamilton from responding to
the allegations, and thus prolonged an elaborate ‘fishing expedition’ that
would financially exhaust Hamilton Securities.
A significant background fact
about Judge Sporkin was that he was the General Counsel for the CIA (1981-86)
before being appointed as a federal judge to the District of Columbia District
Court by Ronald Reagan in 1985.
[47]
Sporkin’s CIA background and the continued extensions
of the qui tam case that had questionable legal standing and which
was finally unsealed and dropped by a new Federal judge appointed to the
case after Sporkin’s retirement in 2000 point to a CIA covert program to
destroy Hamilton Securities. One conclusion that emerges is that Fitts company
was targeted since it threatened to undermine and even expose the way the
CIA secretly extracted congressional appropriations from or laundered funds
through HUD and other government agencies.
[48]
The CIA was using its unique legal
status of being able to lawfully transfer Congressional appropriations
or ‘laundered money’ through other federal government agencies, to fund
projects administered by the intelligence community, and to destroy any
individual or company that threatened to reveal such a process.
The wide extent
of chronic auditing irregularities for most government agencies suggested that
it was not just HUD that was used by the CIA as vehicle for siphoning money
into its ‘unofficial’ black budget. A Senate Committee on government reform
investigated the auditing practices of federal government agencies in 2001,
and the Committee Chairman, Senator Fred Thompson, released a report that
found that ineffectual auditing practices were endemic and led to billions of
dollars going annually missing from most government agencies. [49] Rather than restricting itself to the
appropriations through the DoD (the ‘official’ black budget), something
Congress was aware of and tolerated, the accounting irregularities of many
government agencies were possible evidence that the CIA was accumulating a
sizable portion of the ‘actual’ black budget from other government agencies.
The Ultimate Beneficiary of the CIA ‘Black Budget’: The Intelligence
Community and the Second Manhattan Project
The covert role of the CIA in
destroying Hamilton Securities suggests that the $59 billion missing from
HUD in 1999 was some of the money transferred to the CIA’s ‘unofficial black
budget’. The ‘legal’ status of such a secret transaction on the basis of
national security meant that the CIA could do this and be sure that senior
officials in HUD and the Department of Justice would cooperate in keeping
these transfers a secret. The legal onslaught suffered by Hamilton Securities
was indicative of a covert CIA operation that involved cooperation by senior
officials in HUD, the DOJ, a federal judge and a former HUD contractor,
in destroying a domestic US company that had developed technology that threatened
to reveal where the missing HUD money was really going.
Estimates of the CIA’s ‘official’
black budget have been shown earlier to be in the vicinity of $3.5 billion
and thought to be extracted from DoD appropriations. If the CIA was the
recipient of the missing HUD money, this meant that the CIA was in fact
a conduit for appropriated federal funds and non-appropriated funds being
channeled through HUD and the CIA. Rather than the CIA being a recipient
of DoD funds, as commonly thought, the CIA was more likely secretly funding
intelligence activities and covert operations conducted through the intelligence
community associated with the DoD. It is worth exploring how the CIA could
be siphoning money to those elements of the intelligence community associated
with the DoD, and how these funds could in turn be used by the DoD and the
intelligence community to fund a large number of ‘deep black projects’ that
operate outside of the oversight system that had been developed for regular
classified projects funded by Congressional appropriations. These regular
classified programs are ‘waived’ Special Access Programs in the DoD, and
‘waived’ Covert Access Programs in the CIA.
[50]
I turn now to examine events surrounding the inception
of the CIA and its relationship with the DoD in jointly running and funding
the intelligence community associated with the DoD.
The end of the Second World
witnessed the dissolution of the CIA’s predecessor, Office of Strategic
Services (OSS) that had been established in June 1942, and headed by a former
civilian, William Donovan.
[51]
Donovan put together an assortment of adventurers, intellectuals,
and military personnel that carried out a number of intelligence activities
and covert operations during the war that had limited success. The OSS,
however, was not trusted with the most sensitive war intelligence by the
two main US military intelligence services - the Office of Naval Intelligence
(ONI) and the Army’s G-2, nor by the Joint Chiefs of Staff. The war’s end
meant that foreign intelligence and covert operations were again dominated
by the different military services, the State Department and the FBI (the
FBI had extensive operations in Latin America) who would be very protective
when it came to their most sensitive intelligence data.
The post-war structure of the
national security system was debated, and the military services were on
the record for being opposed to the formation a civilian agency that would
play a leading role in foreign intelligence gathering or covert operations.
[52]
Indeed, the idea of the different military intelligence
services being headed by a civilian agency would have been quite a challenge
for President Truman and his advisors to argue due to the major role played
by US military intelligence in successfully conducting the war, and the
peripheral role played by the OSS. Despite the wartime experience and the
conventional wisdom that the military were more than capable of handling
intelligence related activities, the passage of the National Security Act
in 1947, led to the formation of a unified defense bureaucracy, the Department
of Defense, three main military services (US Army, Navy and Air Force),
and the creation of the National Security Council and the CIA.
[53]
The CIA became the formal head of the US intelligence
Community responsible for coordinating and providing leadership on all intelligence
related activities. This meant that an organization based on the wartime
model of a relatively small organization that conducted covert operations
(the OSS) would be formally responsible for all US intelligence activities
both military and civilian. This represented a major shift for the different
military services yet they acquiesced to Truman’s request, but did so in
a way that meant the DoD through its various associated intelligence services
maintained considerable bureaucratic power in running the intelligence community
in association with the CIA.
The Director of the CIA (DCI)
would be the formal head of the Intelligence Community comprising the CIA, the
National Security Agency, National Reconnaissance Office, the various military
intelligence agencies and intelligence services of civilian agencies such as
the FBI and the State Department. [54] Importantly, the DCI would play a key role in
the budget allocations for agencies within the intelligence community to be
funded by the black budget. [55] The DCI has statutory power to move funds in
the intelligence community with the approval of the Secretary of Defense as
described in the following:
No funds made available under the National Foreign Intelligence Program may be reprogrammed by any element
of the intelligence community without the prior approval of the Director of Central Intelligence except in
accordance with procedures issued by the Director. The Secretary of Defense shall consult with the Director
of Central Intelligence before reprogramming funds made available under the Joint Military Intelligence Program.[56]
In theory, this meant that the
DCI would have some leverage despite what was conventionally thought to
be the budgetary power of the DoD over the DCI since the ‘official’ black
budget would comprise DoD appropriations in one form or another. If the
CIA, however, were able to get more significant sources of funds than DoD
appropriations, then the CIA would control the money flow that sustained
the intelligence community associated with the DoD, and their various intelligence
activities, covert programs and classified technologies associated with
these.
Leadership of the Intelligence
Community is not exercised solely by the Director of the CIA (DCI), but is
shared with the Secretary of Defense, who is responsibly for ensuring that
budget needs are met for DoD associated intelligence agencies, and who also
appoints key personal in these agencies. This power sharing and the extensive
funding arrangement that involves the CIA in DoD operations, is evidenced in
terms of the relevant statutory provision for funding military intelligence
agencies:
The Secretary of Defense, in consultation with the Director of Central Intelligence, shall--
(1) ensure that the budgets of the elements of the intelligence community within the Department of Defense are
adequate to satisfy the overall intelligence needs of the Department of Defense, including the needs of the
chairman \1\ of the Joint Chiefs of Staff and the commanders of the unified and specified commands …[57]
One of clauses of this statute
worth emphasizing is that the CIA has a ‘consultative role’ in satisfying
the funding needs of the ‘Joint Chiefs of Staff and the commanders of the
unified and specified commands.” Such a clause provides legal justification
for the Secretary of Defense to transfer funds provided by the CIA’s black
budget to an extensive number of military services, commands and operations.
As far as appointments are concerned,
the Secretary of Defense has the power to nominate the Directors of military
related intelligence agencies such as the NSA, NRO and National Imagery
and Mapping Agency, even in cases where the DCI does not approve of the
Secretary’s choice.
[58]
Thus the Secretary of Defense has considerable bureaucratic
power over the main military intelligence agencies in terms of senior appointments
and how funds would be spent.
[59]
Consequently, leadership of the intelligence community
is shared between the Director of the CIA (DCI) and the Secretary of Defense
who share decisions concerning appointments, programs and budgetary allocations
for the US intelligence community.
While the CIA is the junior
partner to the DoD when it comes to intelligence activities and covert
operations, it has one major bureaucratic advantage to the DoD. This concerns
‘black budget’ allocations for highly classified projects. It would be far
easier for the Congress to accept the idea of an ‘official’ black budget
sanctioned by law, if it was a civilian agency that was formally in charge of
this unusual budgetary mechanism that would require an extraordinary degree of
trust by Congress that such budgetary power was not being abused. As far as
the DoD was concerned, Congress was quite adamant that all appropriations to
the DoD would be spent in ways that were consistent with the law, i.e.,
Congressional resolutions and enactments. [60] After all, this is what distinguished
American style democracy from an authoritarian police state. This meant that
the DoD’s power to create a ‘black budget’ would be circumscribed by relevant
Congressional provisions governing the ‘unacknowledged’ Special Access
Programs (‘black projects’) this funded. [61] The CIA provided the ideal cover for the
creation of an ‘unofficial’ black budget that could legally transfer the
appropriations of, or launder funds through, non-DoD federal government
agencies, not to the CIA as Congress intended in the CIA Act, but directly to
‘deep black projects’ institutionally located within the NSA, NRO, NIMA, DIA,
the different military intelligence services of the Army, Navy, and Air Force;
and to the various special projects and commands overseen by the Joint Chiefs
of Staff.
The CIA’s ‘official’ black
budget is a cover for the large network of projects run by the different
military intelligence agencies, the CIA and Joint Chiefs of Staff, that used
government appropriations from, and money laundered through, different federal
agencies. The CIA could provide for sufficient funding for an extensive number
of ‘deep black projects’ that would be entirely separate to regular DoD
appropriations and the oversight process developed for DoD classified
projects, without Congressional budget analysts and the general public being
aware of how the different military intelligence services were secretly
housing projects funded by the CIA siphoned funds.
A secret funding arrangement between the
CIA and the different military intelligence services in a manner that bypassed
budgetary restraints on DoD associated activities would offer considerable
mutual advantages to the CIA and the military intelligence services if they
wanted to create deep black projects outside of both the normal Congressional
appropriation system and the regular DoD oversight process. First, the CIA had
the legal power to transfer appropriations from other government agencies,
keeping this secret and moving these funds to whatever operations it deemed
necessary. The 1949 CIA Act describes this power as follows:
The sums made
available to the Agency may be expended without regard to the provisions of
law and regulations relating to the expenditure of Government funds; and for
objects of a confidential, extraordinary, or emergency nature, such
expenditures to be accounted for solely on the certificate of the
Director. [62]
As the clause makes clear,
the CIA Director may use funds from the black budget “without regard to the
provisions of law.” This means that the DCI has enormous power in funding
‘deep black programs’ and disregarding any legal or budgetary restrictions
where he deems a project to be of “extraordinary” or “emergence nature”.
Unlike other agencies, the Director of the CIA would be able to prevent the
Inspector General of the CIA - an independent official appointed by Congress -
from conducting a thorough audit of the CIA’s budget and exposing the actual
size of the black budget. The relevant statute from the CIA Act is worth
quoting since it is unique restriction not found in the case of the power of
Inspector Generals of other federal agencies:
The Director may prohibit the Inspector General from initiating, carrying out, or completing any audit, inspection,
or investigation, or from issuing any subpoena, after the Inspector General has decided to initiate, carry out,
or complete such audit, inspection, or investigation or to issue such subpoena, if the Director determines that
such prohibition is necessary to protect vital national security.[63]
The above clause directly
contradicts the relevant federal statute that governs Inspector Generals in
other government departments and agencies: “Neither the head of the
establishment nor the officer next in rank below such head shall prevent or
prohibit the Inspector General from initiating, carrying out, or completing
any audit or investigation, or from issuing any subpoena during the course of
any audit or investigation. [64]
A second advantage from
having the CIA act as the unofficial funding source, was that the various
military intelligence agencies and Joint Chiefs of Staff would be able to
provide the physical and personnel infrastructure for deep black projects
to be funded by the CIA’s black budget which comprised some funds from the
appropriations of other government departments and agencies. This enabled
the DoD associated intelligence services to circumvent the Congressional requirement
that no appropriations for DoD activities be expended “unless funds therefor
have been specifically authorized by law”.
[65]
In essence, the DoD and DCI were collaborating in
circumventing Congressional intent designed to prevent DoD ever using funding
sources outside of the Congressional appropriation process.
A third mutual advantage was
that the CIA could play a significant consultative role in the various DoD
associated intelligence agencies in both intelligence activities and covert
operations that would be outside of the regular oversight process in Congress,
the Executive Office and even the DoD. This would enable security professionals
within the military intelligence agencies, rather than political appointees
in Congress, the Executive Office and DoD to make key decisions in the oversight
of the ‘deep black projects’ that could run on whatever ‘unofficial’ black
budget funding the CIA could raise. The only restraint was the willingness
of directors of different government agencies to allow some of portion of
their budget allocations to go to the CIA and DoD agencies in the intelligence
community, and to cover up the movement of significant sums of money that
the CIA had raised elsewhere and were ‘laundering’ through these agencies.
Most disturbingly, there is a growing body of evidence that a portion of
the funds laundered through government agencies such as HUD by the CIA comes
from organized crime and the drug trade.
[66]
Organized Crime, Drugs, and the CIA
Allegations of links between
the CIA and the drug trade first came to public attention in the 1970’s
when a number of public officials came forward with evidence of such links.
One of these was a former police officer in the Los Angeles Police Department
(LAPD), Michael Ruppert. In 1977, as a result of his official investigation
into the drug trade in Los Angeles, Rupert uncovered evidence that the CIA
was playing an active role in bringing drugs into New Orleans and Los Angeles.
When Rupert disclosed this information to his superiors in the LAPD, he
became a target for surveillance, harassment and burglaries that eventually
led to his resignation.
[67]
Another key official is a retired
Drug Enforcement Agency agent, Celerino Castillo III, who was the lead DEA
agent in Guatemala and discovered that the CIA was involved in the drug
trade to raise finances for its covert operations. In a written statement
to the House Permanent Select Committee on Intelligence Castillo gave detailed
information on a number of drug running operations that involved cooperation
between the CIA and organized crime cartels.
[68]
Celerino claimed:
The
key to understanding the "crack cocaine" epidemic, which exploded on our
streets in 1984, lies in understanding the effect of congressional oversight
on covert operations. In this case the Boland amendment(s) of the era, while
intending to restrict covert operations as intended by the will of the
People, only served to encourage C.I.A., the military and elements of the
national intelligence community to completely bypass the Congress and the
Constitution in an eager and often used covert policy of funding prohibited
operations with drug money. [69]
Another prominent official was
Marine Colonel James Sebow, the third in command of the El Toro Airbase,
California, who discovered evidence that C-130 cargo flights coming into the
airbase from Central America were filled with drugs. Sebow communicated his
finding to the base commander, Col Joseph Underwood, and then found himself
along with Col Underwood, subject to investigations for minor offenses,
relieved of command and threatened with Court Martial if he did not cooperate
with the investigation. On January 22, 1991, Sebow was found dead, apparently
by suicide, but an investigation by family members and supporters revealed
evidence that he in fact was murdered for what he had discovered. [70] On the day before his death, Sebow’s widow
recalled a conversation Sebow had with Col Underwood who had stopped by for a
visit:
Underwood
stopped by and repeatedly tried to talk Jimmy into accepting an early
retirement to avoid a court-martial. Jimmy objected strongly. At this,
Underwood became quite angry. Sally stated, "I have never seen such a
vicious face as Joe's when Jimmy said he would not retire and would take the
entire matter to a court-martial if necessary. Underwood jumped up and said,
"You'll never go to a court-martial, and I mean never!" [71]
The
events surrounding Sebow’s death support allegations that he had uncovered
a CIA supported drug running operation into
the US, and was murdered to prevent this from being exposed.
In
the July 12, 1985 personal notes of Oliver North, used by his legal defense
during his various trials and Congressional hearings over his role in selling
US weapons to Iran to fund the Nicaraguan Contras, North reported that at
a meeting involving a number of NSC and CIA officials, $14 million was mentioned
as the funds the Contra rebels would raise from the drug trade.
[72]
North’s admission did not get serious press coverage
despite the apparent confirmation that the CIA was complicit in the use
of drugs as revenue for covert operations.
[73]
It can be inferred that North’s efforts were an amateurish
effort
by an NSC ‘basement team’ to raise revenue for NSC covert operations that
was modeled on a far more successful effort by the CIA to use revenue from
the drug trade.
The best known case of an alleged
link between the CIA and the drug trade emerged from the pioneering investigative
journalism of Gary Webb in 1996 who published the “Dark Alliance” series
in the San Jose Mercury during Summer 1996.
[74]
Webb presented a compelling case that the CIA played a
role in allowing drug money to be used to fund the Contra rebels in Nicaragua.
While Webb’s series was focused on the proceeds of drug activities going
to the Contras, his conclusion that the CIA colluded in this endeavor supported
broader allegations of the CIA using the drug trade to finance covert operations.
Webb’s series of articles generated intense national interest until the
publication of ‘independent’ investigation by the Washington Post on October
4, 1996, claimed there was insufficient evidence to support Webb’s allegations.
[75]
The New York Times and Los Angeles Times followed up on
October 20 with equally critical articles.
[76]
Criticisms began to mount and eventually led to the editors
of the San Jose Mercury apologizing for ‘errors’ in Webb’s Dark Alliance
series, and had Webb transferred to a less prominent news bureau.
[77]
Webb resigned in disgust in November, 1997, ending a nineteen
year career as a journalist. It was subsequently learned that one of the
two writers of the Washington Post article, Walter Pincus was once a CIA
asset, suggesting that the Post had been co-opted into a covert campaign
to undermine Webb’s work. The
critical stories in the New York Times and Los Angeles Times relied on similar
‘unnamed sources’ to the Post article indicating that Webb had become a
victim of a covert CIA operation through the ‘establishment’ newspapers
to discredit his findings.
[78]
In January 1998, the Inspector General of the CIA released
a report exonerating the CIA of any role in the drug trade.
[79]
Having so far
determined the existence of a black budget created by the CIA that circumvents
Congressional intent on the use of appropriations of different federal
departments and agencies, and/or involves laundering of funds possibly gained
from organized crime and the drug trade, it is worth estimating the size of
the CIA’s black budget and what it is used for.
Estimating the Size of the CIA’s ‘unofficial’ Black
Budget
Using Fitts estimates of money
missing from HUD, and knowledge of the appropriations process, a more accurate
figure of the CIA’s ‘unofficial’ black budget that feeds the intelligence
community associated with DoD can be estimated. It should be emphasized
that it is only the CIA that has Congressional authority to draw appropriations
through other government agencies without ‘without regard to any provisions
of law’ or ‘intended use of appropriations’. This means that money missing
from the Congressional appropriations of other agencies would be initially
being siphoned through the CIA and no other intelligence agency. Other agencies
in the intelligence community gather their appropriations through the DOD
that generates the ‘official’ black budget through fictitious line items
on its annual budget. Consequently, it can be concluded that appropriated
money channeled through HUD and other agencies is going into the CIA’s ‘unofficial’
black budget that in turn goes directly into deep black programs within
the DoD associated intelligence agencies and specialized programs of the
Joint Chiefs of Staff.
The CIA’s ‘unofficial’ black
budget would therefore not appear on the DoD budget as single line items
but would be annually moved through the DoD budgetary mechanisms in a way
that cannot be financially tracked. A description of the way this is done
appears is described by Tim Weiner, author of Blank Check: The Pentagon’s
Black Budget:
One way the
form [Form 1080, Voucher for Transfer Between Appropriations and/or Funds]
is used to allow money to flow from the Treasury to the Army, or from one
Army account to another, is for an officer to fill out the 1080. The bursar
then signs the form and issues a Treasury check. The 1080 vouches that the
money has been used to pay for the costs of authorized programs. It creates
an audit trail - a paper path showing money flowing. [80]
An estimate of the size of the
CIA’s black budget, would therefore be unaccounted movement of funds through
the DoD. According to an investigative journalist, Kelly O’Meara, the use of a
range of accounting mechanisms such as "unsupported
entries," "material-control weakness," "adjusted records," "unmatched
disbursements," "abnormal balances" and "unreconciled differences" are
evidence of large sums of money that are moved through the DoD that cannot be
accounted for. [81] Since the Inspector
General of DoD has a certain degree of independence, traces of the CIA black
budget would appear in auditing anomalies using some of the terms O’Meara
describes. David K. Steensma, Acting Assistant Inspector for auditing DoD
wrote in a 2002 report that “DoD
processed $1.1 trillion in unsupported accounting entries to DoD Component
financial data used to prepare departmental reports and DoD financial
statements for FY 2000.” [82] Elaborating on the significance of the DoD
Inspector General reports, O’Meara has written:
[T]he deputy IG [Inspector General] at the Pentagon
read an eight-page summary of DOD fiduciary failures. He admitted that $4.4
trillion in adjustments to the Pentagon's books had to be cooked to compile
the required financial statements and that $1.1 trillion of that amount
could not be supported by reliable information. In other words, at the end
of the last full year on Bill Clinton's watch, more than $1 trillion was
simply gone and no one can be sure of when, where or to whom the money
went. [83]
According to the Office of the
Inspector General, the accounting irregularities for fiscal year 1999 were
even larger and added up to 2.3 trillion dollars; and for fiscal year 1998,
these irregularities were 1.7 trillion (see table 2).
Table 2. Department of Defense (DoD) – Unsupported Accounting
Entries 1998-2003
The Inspector General reports
are important evidence that trillions of dollars were siphoned through the
Department of Defense (DoD) for the fiscal years 1998-2002.
[89]
Using the Inspector General reports of accounting anomalies,
it can be estimated that Fitts and O’Meara’s estimates of missing money
from the DoD is a close approximation to the CIA’s ‘unofficial’ black budget.
Consequently, the CIA black budget is annually in the vicinity of 1.1 trillion
dollars – a truly staggering figure when one considers that the DoD budget
for 2004 will be approximately 380 billion dollars.
[90]
This suggests that the vast size of the DoD in terms of
its personnel, weapons systems and research into ‘conventional weapons systems’,
is dwarfed by something that in funding terms is almost three times larger
than the entire conventional military system funded by the DoD budget.
The vast size of the estimated
CIA ‘unofficial’ black budget is strong evidence of a collective effort
by the CIA and DoD associated military intelligence agencies and the Joint
Chiefs of Staff, to fund a network of highly classified projects so large
in scope that they collectively dwarf the original Manhattan project conducted
at Los Alamos National Laboratories during the Second World War.
[91]
Since the original Manhattan project aimed to develop
an atomic bomb for use in the war against Nazi Germany, it can be inferred
that the network of projects funded by the CIA’s black budget aims to develop
a range of advanced weapons systems and intelligence capabilities for use
against an adversary whose existence and identity still remains classified.
[92]
I will henceforth refer to this network of highly classified
projects as the second Manhattan Project - ‘Manhattan II’ is the ultimate
beneficiary of the CIA’s ‘unofficial’ black budget.Conventional
Oversight System for the CIA’s and DoD’s Classified
Programs
Oversight of the Manhattan II
would predictably have been a major concern for the Truman administration
that was instrumental in the passage of the National Security Act of 1947
and the CIA Act of 1949 that institutionalized the black budget that would
fund Manhattan II. Major considerations of the Truman administration would
have been to create an oversight body dominated by professionals that would
not be affected by the partisan political process or by the new political
appointees that came and went with each Presidential administration. Consequently,
an oversight system would have evolved comprising individuals appointed
either due to the technical abilities (e.g., scientists), political skills
(e.g., international diplomacy experts), or military expertise (e.g., J-2
& J-3 directorates in the Joint Chiefs of Staff). This oversight system
would have most likely evolved in a manner that was independent of the conventional
oversight system for classified projects. Consequently, before considering
how oversight of the Black Budget and Manhattan II are conducted, it is
worth exploring how the conventional oversight system works for classified
programs in the CIA and DoD.
This conventional oversight
system for highly classified intelligence activities and/or covert projects
concerns Controlled Access Programs (CAPs) of the intelligence community
or Special Access Programs (SAP) of the DoD. CAPs/SAPs are programs that
have additional security measures attached to them over and above the normal
classificatory system (confidential, secret, top-secret) attached to most
classified information and programs.
[93]
CAPs/SAPs are divided into two classes ‘acknowledged’
and ‘unacknowledged’ as described in a 1997 Senate Commission Report: “Publicly
acknowledged programs are considered distinct from unacknowledged programs,
with the latter colloquially referred to as “black” programs because their
very existence and purpose are classified.”
[94]
A ‘waived’ CAP/SAP is so sensitive that only
eight members of Congress (the chairs and ranking members of the four intelligence
[or defense] committees divided between the House of Representatives and
Senate) are notified of a waived CAP/SAP without being given any information
about it.
[95]
This would
enable them to truthfully declare no knowledge of such a program if asked,
thereby maintaining secrecy of this CAP/SAP. If unacknowledged CAPs/SAPs
are ‘black programs’, then ‘waived’ unacknowledged CAPs/SAPs are ‘deep black’.
The most secret of the intelligence and covert operations conducted by the
CIA are ‘deep black’ CAPs.
CAPs are funded through the
‘official’ black budget and in theory are subject to both Executive and
Congressional oversight.
[96]
In practice though, Congressional oversight in the case
of waived acknowledged CAPs is nominal as revealed by the 1997 Senate Commission
Report. President Clinton’s Executive Order 12958 issued on April 17, 1995,
reformed how CAPs/SAPs would in future be created and oversight established.
The main component of the Executive Order was that only the Director of
Central Intelligence or the Secretaries of State, Defense and Energy (or
their principal deputies) could create a CAP/SAP. CAPs/SAPs would be kept
to an “absolute minimum”; and would be created when “the vulnerability of, or threat to, specific information
is exceptional,” and their secrecy cannot be protected by the normal classification
system.
[97]
As far as oversight was concerned,
the key clause in Executive Order 12958 was an effort by the Clinton administration
to coordinate oversight through a central executive office (Information
Security Oversight Office) that would be responsible to the National Security
Council (NSC) and annually report to the President.
[98]
The President’s effort to centralize and coordinate
oversight features of CAPs/SAPs was resisted by both the Defense and Intelligence
communities. While in theory, oversight coordination occurs in the Information
Security Oversight Office set up in the NSC that issues an annual report
to the President; the power to approve or terminate a CAP/SAP lies with
the respective intelligence community and DoD committees and executive officers.
In general, Executive Office oversight of CAPs/SAPs has been described as
“nothing more than a sop used to placate anyone who questions the propriety
of an administration’s covert action policy.”
[99]
Oversight of CAPs/SAPs is performed
by a committee comprising officials from the Intelligence Community, the
Controlled Access Program Oversight Committee (CAPOC); and a similar committee
in the DoD, the Special Access Program Oversight Committee (SAPOC).
[100]
CAPOC reviews CAPs and Sensitive Compartmented Information
(intelligence data) in the intelligence community annually and can recommend
their ‘compartmentation’ or termination.
[101]
It is however, only the Director or Deputy Director of
the CIA that has the authority to “create, modify, or terminate controlled
access programs.”
[102]
:
While
CAPOC provides more direct oversight and coordination of CAPs, it is not ultimately
the body that oversees the CIA’s most secret projects conducted in collaboration
with the military intelligence community. The exclusion of some CIA CAPs from
CAPOC is indicated in the following Directive from the Director of the CIA
(DCI): “The DCI or DDCI may waive review by the CAPOC for programs covered
by equivalent oversight mechanisms, or when review by the CAPOC is unnecessary
to carry out the DCI's responsibilities.”
[103]
Essentially, if the DCI deems it unnecessary for CAPOC to
provide oversight information of a CAP, then CAPOC plays no role in monitoring
the program.
While the DCI
is legally obliged to verbally notify Congress of the CIA’s most sensitive
CAPs without providing specific budgetary or operational details, there is
no independent way of confirming if he indeed is doing so. Similarly, the
DCI could similarly withhold information of the CIA’s most sensitive CAPs
to the National Security Council’s ‘Information Security Oversight Office”
(ISOO). The extent to which
authority is vested in the different security agencies is the way in which
program managers of CAPs/SAPs have the authority to come up with their own
rules concerning access and security. A 1994 Commission Report stated:
The special access system gave the program
manager the ability to decide who had a need-to-know and thus to strictly
control access to the information. But elaborate, costly, and largely separate
structures emerged. According to some, the system has grown out of control
with each SAP [CAP] program manager able to set independent security rules.
[104]
Program
managers of CAPs/SAPs have the power to restrict access and information to the
heads of Congressional Intelligence Oversight Committees, and even to the
NSC’s Information Security Oversight Office. Consequently, operational control
of CAPs and SAPs is firmly maintained by CAP/SAP program managers who answer
only to their immediate superiors despite the fact that they are funded by the
CIA’s unofficial black budget with the explicit support of the DCI.
Consequently there are two categories of waived CAPs/SAPs or ‘deep black
programs’: those CAPs/SAPs where oversight is exercised by the relevant
oversight committees in the CIA, DoD and the Executive Office; and those CAPs
where the program managers answer to an entirely different oversight body. I
now explore whom it is that does provide oversight of the CIA’s ‘unofficial’
Black Budget and Manhattan II.
Oversight of the CIA’s ‘Unofficial’ Black Budget & Manhattan
II
Considering the vast size and
unconventional funding source for Manhattan II, it is worth exploring how
oversight of both the CIA’s ‘unofficial’ black budget and of Manhattan II
has evolved, and whom program managers for projects funded by the CIA’s
unofficial black budget actually answer to. The vastness and secrecy surrounding
Manhattan II from its inception sometime during the Truman administration
places it outside of the conventional political process where the appointment
of key civilian leaders is subject to partisan politics that could compromise
the secrecy of Manhattan II and the black budget that funds it. In contrast,
the conventional political process has little direct influence on the appointment
of senior military personal who undergo a process of first being recommended
to the President by the relevant DoD promotions boards, then appointed by
the President and finally confirmed by the Senate. While the military leadership
of the DoD is outside the partisan political arena, this is not the case
for the appointment of the civilians who take on key positions as Secretaries,
Deputy Secretaries, and Undersecretaries of the different military services
in the DoD with each new administration.
It is very likely that the senior
military officials in key bodies such as the Joint Chiefs of Staff, are
aware of Manhattan II without having detailed knowledge of the black budget
that funds it. It is likely that the politically appointed leaders of the
DoD have little substantive knowledge of Manhattan II, and have as their
chief task the goal of ensuring secrecy of Manhattan II and of the CIA generated
‘black budget’ that feeds it. Thus the Secretary of Defense would play no
formal oversight of Manhattan II, far less of the black budget that sustains
it. The operational side of Manhattan II, in terms of product testing and
application, is most likely be controlled by the Joint Chiefs of Staff and
the Directorates for Intelligence (J-2) and Operations (J-3) that are responsible
for intelligence and operational functions of the DoD.
It is unlikely that the Director
of the CIA (DCI) is made fully aware of the extent of the ‘unofficial’ black
budget, the activities used to raise money for it, and the second Manhattan
project it funds. The DCI like all agency and department heads appointed
by the President and confirmed by the Senate is subject to the partisan
political process. Up to the Carter administration, the tradition was that
the appointment DCI would not be politicized. However, President Gerald
Ford effectively abandoned this with the appointment of George Bush as DCI
in 1975.
[105]
President Carter appointed Admiral Stansfield Turner as
the new DCI in 1977, who in turn was replaced by William Casey as the new
DCI by President Reagan in 1981. Given the partisan political nature of
the DCI since Bush, it is likely much of the budgetary authority of the
DCI was secretly delegated by executive authority to a body that formally
plays the key oversight role for the ‘unofficial’ black budget, and the
covert projects it funds that make up Manhattan II.
[106]
The delegated powers would most likely have derived from
the Truman administration in the form of an executive order and/or National
Security Council directive not published in the US Federal Gazette that
is required for all executive orders, and thereby remains secret.
[107]
Such an executive order/NSC directive would been reconfirmed
and gradually expanded by subsequent administrations so that ultimate oversight
of the black budget and of Manhattan II remained firmly outside of the conventional
oversight process.
Consequently, effective oversight
of Manhattan II, comes from an ‘executive committee’ especially established
in a way that would make it immune to the partisan political process thus
ensuring strict secrecy can be preserved, and politically motivated leaks
prevented. The power and resources delegated to this ‘executive oversight
committee’ for Manhattan II by the Executive Office, and its role in ensuring
that ‘black budget’ funds are correctly used and kept secret from the general
public, justifies a description of it as a ‘shadow government’.
The method used
in guiding the analysis in this report is to simply follow the money trail
created by the CIA’s black budget that enables a number of important insights
to be drawn by the institutions playing key roles in generating, protecting
and distributing black budget funds. Critical in this analysis has been the
experience of individuals and companies such as Catherine Fitts and Hamilton
Securities that experienced what evidence indicates was a CIA orchestrated
covert campaign to discredit the financial tracking reforms that threatened to
make more transparent the financial flows of HUD and other government
agencies. The systematic accounting problems experienced by HUD and other
agencies points to the existence of an unofficial black budget of up one
trillion dollars annually. The size of the black budget and the CIA activities
used to generate funds for it, point to a vast secret network of projects that
is funded outside of the normal Congressional appropriation process. Consequently, what follows is a
discussion of some of the primary conclusions that can be drawn and arguments
made concerning the CIA’s ‘unofficial’ black budget and the Manhattan II
project it has been argued to fund.
It is worth repeating that the
CIA is legally authorized by Congress to transfer, “without regard to any
provisions of law”, funds from other government agencies for the generation
of a black budget. There is strong evidence that the CIA uses this power
to disregard law to complement whatever funds it can generate through Congressional
appropriations, with funds gained through the drugs trade and organized
crime that is laundered through different government agencies. The total
annual sum of the black budget is best estimated in the form of accounting
anomalies in the main departmental recipient of all black budget funds,
the DoD, and is in the vicinity of 1.1 trillion dollars that funds a network
of classified intelligence activities and covert operations that collectively
form a second Manhattan Project.
The oversight of Manhattan project
occurs outside of the conventional oversight system that can be easily compromised
by partisan politics. The oversight system that has evolved has been very
successful in dividing different functions for Manhattan II in ways that
balance institutional rivalries between national security organizations
without compromising secrecy. Thus the CIA generates the black budget that
in turns transfers these funds to projects that are institutionally located
in the military intelligence and special operations units of the DoD. The
various military intelligence agencies in turn hire private contractors
and/or provide the necessary military resources for these covert programs
to be conducted in national laboratories, military bases, private corporations
or other classified locations. The program managers of each of the classified
projects associated with Manhattan II answer directly to an ‘executive committee’
that is outside of the regular oversight process in DoD, CIA, Congress and
the Executive Office. The Joint Chiefs of Staff have control of the testing
and applications of Manhattan II products that are conducted in collaboration
with the intelligence community. The respective intelligence, defense and
appropriations committees in the US Congress provide legitimacy for Manhattan
II and the black budget that funds it by not revoking the budgetary powers
allocated to the CIA through the 1949 CIA Act. Finally, the Executive Office
through the National Security Council issues the necessary executive orders/NSC
directives to coordinate the functions and activities in all the branches
of government in order to secretly run Manhattan II. Thus each branch of
the national security system plays an important role in Manhattan II, without
being fully in control of it, thereby insuring a division of powers according
to different functions required for Manhattan II. Effective oversight of
Manhattan II, however, comes from an ‘executive committee’ that is immune
to the partisan political process and whose oversight power and control
of resources makes it virtually a ‘shadow government’.
It needs to be emphasized that
the ‘unofficial’ black budget and Manhattan Project have legally evolved
in ways to respond to a national security contingency that is yet to be
revealed to the American public. The classified adversary that this elaborate
secret system has been developed to respond to is arguably a potential threat
that warrants an extraordinary network of covert programs that dwarf the
original Manhattan Project and annually consume as much as 1.1 trillion
dollars in a non-transparent manner. More disturbingly, the importance of
Manhattan II is such that the CIA has evidently used organized criminal
networks and the drug trade as sources to partially fund Manhattan II.
It is unclear when the full
scope and impact of Manhattan II will be disclosed to the American public.
However, the consequences in terms of increased loss of trust in federal
government agencies, loss of morale among senior agency officials instructed
to cover up black budget transactions, non-transparency in the flow of government
appropriations, targeting of policy makers and business leaders who discover
the fraudulent accounting and money laundering that occurs with the black
budget, all warrant a serious examination of the need for maintaining the
secrecy of Manhattan II and the black budget that funds it. Finally, the
classified adversary against whom Manhattan II is directed requires immediate
declassification due to the inherent dangers of dealing with what appears
to be an undisclosed security threat in a non-transparent and unaccountable
manner, and totally outside of the moral/legal restrictions that emerge
from vigorous public debate in democratic societies.
[1]
I wish to acknowledge H.M. for his hospitality, intellectual
stimulation and research facilities for the completion of this paper. Many
thanks to A.M. for his assistance in printing and distributing this report. I
wish to further thank Mike Schaefer and an anonymous reader for alerting me to
errors in an earlier verion of this paper.
[3]
See Tim Weiner, Blank Check: The Pentagon’s Black Budget
(Warner Books, 1990) 118
[4]
95
Congressional Record 1945 (1949). Also quoted in Weiner, Blank
Check, 119
[6]
This occurred to Catherine Austin Fitts whose work in
detailing the black budget will be examined later.
[10]
Quoted in Weiner, Blank Check,
218.
[11]
Quoted in Weiner, Blank Check,
219.
[12]
Quoted in Weiner, Blank Check,
220-21.
[13]
Quoted in Weiner, Blank Check, 222. Richardson v.
U.S. 465 F. 2d 844, 853, United States Court of Appeals for the Third
Circuit, 1972.
[14]
For the courts
ruling as well as dissenting opinions, see U.S. v. Richardson (418 U.S. 166)
167-202.
[15]
For further
discussion see “The CIA’s Secret Funding and the Constitution,” 84 Yale Law
Journal 613 (1975).
[16]
See Senate Select Committee on Intelligence, Whether
Disclosure of Funds for the Intelligence Activities of the United States Is in
the Public Interest, Report No. 95-274, 94th Congress,
2nd Session, June 16, 1977 (Government Printing Office, 1977). Also
quoted in Weiner, Blank Check, 137-38
[17]
See Weiner, Blank Check, 138.
[18]
FOIA was enacted in 1966 as Title 5 of the United States Code, section 552. For
online information, see
http://www.usdoj.gov/04foia/referenceguidemay99.htm
[19]
See “FAS Sues CIA for Intelligence Budget Disclosure,”
http://www.fas.org/sgp/foia/ciafoia.html
[21] See Intelligence Authorization Act for Fiscal Year 1998, Amendment No.416 Congressional Record: June 19, 1997 (Senate) p. S5963-S5978]; Available online at: http://www.fas.org/sgp/congress/s858.html
[22]
“House
Debate on Intelligence Budget Disclosure,” Intelligence Authorization Act for
Fiscal Year 1998, Congressional Record: July 9, 1997 (House)] p. H4948-H4985.
Available online at: http://www.fas.org/sgp/congress/hbudg.html
[23]
See “Statement of the Director of Central Intelligence
Regarding the Disclosure of the Aggregate Intelligence Budget for Fiscal Year
1997,” http://www.fas.org/sgp/foia/victory.html
[24]
Marchetti and Marks, The CIA and the Cult of Intelligence
(Alfred Knopf, 1974) 61, 81.
[25]
Wise, The American Police State (Random House, 1976)
185.
[28]
See Mari Kane, “On the Money Trail: The dangerous world of Catherine Austin
Fitts,” North Bay Bohemian, September 5-11, 2002:
http://www.metroactive.com/papers/sonoma/09.05.02/fitts-0236.html
[29]
See Kane, “On the Money Trail,” North Bay Bohemian
(September 5-11, 2002). Available online at:
http://www.metroactive.com/papers/sonoma/09.05.02/fitts-0236.html
[30]
See Kane, “On the Money Trail,”
http://www.metroactive.com/papers/sonoma/09.05.02/fitts-0236.html
[31]
See Kane, “On the Money Trail,”
http://www.metroactive.com/papers/sonoma/09.05.02/fitts-0236.html
[32]
See Uri Dowbenky, “HUD Fraud, Spooks and the Slumlords of
Harvard,” Bushwacked: Inside Stories of True Conspiracies (National Liberty Press, 2003) 1-18. Available online at:
http://www.conspiracydigest.com/bushwhacked.html
[33]
Paul
M. Rodriquez, “Mortgage Scandal - HUD Gives Up With Fitts,” Insight On the
News, available online at:
http://www.insightmag.com/main.cfm?include=detail&storyid=161204 .
However, a civil suit by John Ervin & Associates was allowed to continue
by the government even though it had the ability to end the case since it
found no evidence of wrong doing. This effectively meant that Ervin Associates
would continue to tie up Hamilton Securities and Catherine Fitts in the court
system.
[34]
See Fitts, “Summary of Events As of February, 2001:
http://www.solari.com/media/summary.html
[35]
Catherine Austin Fitts,
“Experience with FHA-HUD Background Information for Unanswered Questions,”
June 2003. Available online at:
http://solari.com/gideon/fhalist.htm
[36]
See Kelly Patricia O’Meara, “Why Is $59 Billion Missing From
HUD?” Insight on News (Nov 6, 2000). Available online at:
http://www.insightmag.com/main.cfm?include=detail&storyid=246245
[38]
Quoted in Kelly Patricia O’Meara, “Why Is $59 Billion
Missing From HUD?” Insight on News (Nov 6, 2000).
http://www.insightmag.com/main.cfm?include=detail&storyid=246245
[39]
Quoted in Kelly Patricia O’Meara, “Why Is $59 Billion
Missing From HUD?” Insight on News (Nov 6, 2000).
http://www.insightmag.com/main.cfm?include=detail&storyid=246245
[40]
“HUD’s Financial Woes Continue,” Insight On the News
(April 18, 2003). Available online at:
http://www.insightmag.com/news/421370.html
[41]
For discussion of the difficulties encountered by Fitts’
company, see Paul Rodriquez, “Thankless Task,” Insight on the News (May
21, 2001). Available online at:
http://www.insightmag.com/main.cfm/include/detail/storyid/210955.html
[42]
Catherine Fitts, “The Myth of the Rule of Law or How Money
Works: The Destruction of Hamilton Securities.” SRA Quarterly: Third
Quarter Commentary (London,
2001) 2. Available online at:
http://www.solari.com/gideon/q301.pdf
[43]
Dowbenky, Bushwacked, available online at:
http://www.conspiracydigest.com/bushwhacked.html
[44]
Dowbenky, Bushwacked, available online at:
http://www.conspiracydigest.com/bushwhacked.html
[45]
Dowbenky, Bushwacked, available online at:
http://www.conspiracydigest.com/bushwhacked.html
[46]
See Fitts, “Summary of Events,”
http://www.solari.com/media/summary.html
[47]
For background information
on Judge Sporkin, see “Stanley
Sporkin, Bio & Selected CIA Iran Contra Background,” http://www.solari.com/media/SporkinBio.html
[48]
Fitts’ own conclusion was that the CIA was indeed involved
in the destruction of Hamilton, but her view was that HUD was being used to
launder money from the illicit drug trade. Catherine Fitts, “The Myth of the
Rule of Law or How Money Works,” SRA Quarterly, 5.
[49]
Report of Senator Fred Thompson, Chairman, Committee on Governmental Affairs, on
Management Challenges Facing the New Administration (US
Senate, 2002) available online at:
http://www.senate.gov/~gov_affairs/vol1.pdf
[50]
Special Access and Covert Access programs will be described
later in this report.
[51]
For history of OSS, See Michael Warner, “Office of Strategic
Services,” http://www.cia.gov/cia/publications/oss/foreword.htm
[54]
The Intelligence Community website is:
http://www.intelligence.gov/
[60]
10 USC114. Available online at:
http://www4.law.cornell.edu/uscode/10/stApIch2.html
[61]
The relevant Congressional statutes for SAPs is
10
U.S.C.119
[65]
10 U.S.C.114. Available online at:
http://www4.law.cornell.edu/uscode/10/stApIch2.html
[66]
See Gary Webb, The Dark Alliance (Seven Stories
Press, 1998). For online information on the connection between the CIA and the
drug trade, see Michael Rupert’s ‘From The Wilderness’ website: http://www.fromthewilderness.com/
[67]
For a brief
summary of Rupert’s background, see “Opening Remarkks of Michael C. Rupert for
the
Senate Select Committee on Intelligence,” available online at
http://www.fromthewilderness.com/free/ciadrugs/ssci.html
[68]
“Written Statement of Celerino Castillo III (D.E.A.,
Retired) to the House Permanent
Select Committee on Intelligence,” April 27, 1998. Celerino’s statement
is available online at:
http://www.fromthewilderness.com/free/ciadrugs/contra1.html
[69]
Castillo, “Written
Statement,” available at:
http://www.fromthewilderness.com/free/ciadrugs/contra1.html
[71]
Gary Null, “The Strange Death of Col Sabow,”
http://www.garynull.com/documents/sabow.htm
[73]
See Michael Ruppert, “A CIA Confession: Oliver North
Exposed,” From the Wilderness, October 21, 1998. Available online at:
http://www.fromthewilderness.com/free/ciadrugs/volii.html
[74]
Webb subsequently wrote the book, Dark Alliance
(Seven Stories Press, 1998).
[75]
See Robert Suro and Walter Pincus, “The CIA and Crack:
Evidence is Lacking of Alleged Plot,” Washington Post, October 4, 1996.
See also Webb, Dark Alliance, 448-50.
[76]
See “Tale of CIA and Drugs Has Life of Its Own,” New York
Times, October 20, 1996. The Los Angeles Times articles ran over three
days beginning October 20. See also Webb, Dark Alliance,
452-55.
[77]
See Webb, Dark Alliance, 461-65.
[78]
Webb, Dark Alliance, 450-52.
[79]
Inspector General, CIA, “Report of
Investigation: Allegations of Connections Between CIA
and The Contras in
Cocaine Trafficking to the United States (Office of Inspector General
Investigations Staff, CIA, January 29, 1998) Vols 1-2. Available online at:
http://www.cia.gov/cia/reports/cocaine/report/index.html
[80]
Weiner, Blank Check, 178-79.
[84]
Independent Auditor's Report on the Department of Defense
Fiscal Year 2002 Agency-Wide Principal Financial Statements (1/15/03) Project
D2002FI-0104.000, part III, p. 225,
http://www.dodig.osd.mil/Audit/reports/
[85]
Independent Auditor's Report on the Department of Defense
Fiscal Year 2001 Agency-Wide Financial Statements (02/26/02), Report No.
D-2002-055, http://www.dodig.osd.mil/Audit/reports/
[86]
Office
of the Inspector General, Compilation of the FY 2000 DoD Agency-Wide Financial
Statements -- Report No.
D-2001-181(PDF)-Project
No. D2001FI-0018.003 http://www.dodig.osd.mil/Audit/reports/
[87]
Department
of Defense, Office of the Inspector General – Audit, “Department-Level
Accounting Entries for FY 1999” Report No.
D-2000-179 (PDF)
http://www.dodig.osd.mil/Audit/reports/
[88]
Testimony: Statement of Eleanor Hill, Inspector General,
Department of Defense, Before the Subcommittee on Readiness and Management
Support Senate Armed Services Committee, United States Senate on Defense
Financial Management (04/14/99)
http://www.dodig.osd.mil/Audit/reports/
[89]
See
Fitts, “Real Deal, Saving Tennessee,” Scoop UQ Wire (July 4, 2002). Available
online at:
http://www.scoop.co.nz/mason/stories/HL0207/S00031.htm#a
Fitts
has a website with a number of resources describing how more than a trillion
dollars are annually unaccounted for in a number of government agencies. Go to
http://www.solari.com
[90]
“Fiscal 2004 Department of Defense Budget Release,”
Defense Link, February 03, 2003. Available online at:
http://www.defenselink.mil/news/Feb2003/b02032003_bt044-03.html
[91]
See Leslie R. Groves, Now It Can Be Told: The Story of
the Manhattan Project (Da Capo Press, 1983).
[92]
For an intriguing description of what the black budget funds
and the ‘classified adversary’, see Catherine Fitts, “The $64 Question: What's
Up With the Black Budget? – The Real Deal,” Scoop: UQ Wire (23 September, 2002).
Available online at: http://www.scoop.co.nz/mason/stories/HL0209/S00126.htm
. For a more conventional assessment of potential future adversaries, see Judy
Chizek, “Military Transformation: Intelligence, Surveillance and
Reconnaissance” (Congressional Research Service, Library of Congress, May
2002). Available online at:
http://www.fas.org/irp/crs/RL31425.pdf
[96]
For a slightly though still excellent overview of oversight
mechanisms for the CIA, see “The Need to Know: The Report of the Twenthieth
Century Fund Task Force on Covert Action and American Democracy” (The
Twentieth Century Fund Press, 1992).
[98]
Executive Order
#12958
(April
17, 1995). Available online at:
http://foia.state.gov/eo12958/part4.asp#rtt
[99]
“The Need to Know: The Report of the Twentieth Century Fund
Task Force on Covert Action and American Democracy,” 71.
[105]
John Helgerson, CIA
Briefings with Presidential Candidates (Central
Intelligence Agency, 1996,) ch. 5, available online at:
http://www.cia.gov/csi/books/briefing/cia-8.htm
[106]
See Harold Relyea, “Presidential Directives: Background and
Overview,” available online at:
http://www.fas.org/irp/crs/98-611.pdf
[107]
For an overview of Presidential Directives and executive
power to create new bodies and delegate authority without Congressional
approval, see Harold Relyea, “Presidential Directives: Background and
Overview” (Congressional Research Service, Library of Congress, February 2003)
Available online at:
http://www.fas.org/irp/crs/98-611.pdf