Dillon Read (19): Through the Via Dolorosa
A Serialised Story - Part 19 of 20 (publishing August/September 2007)
Dillon Read & Co. Inc.
And the Aristocracy of Stock
By Catherine Austin
Chapter 18: Through the Via Dolorosa
The Via Dolorosa is the street in the Old City of Jerusalem which Jesus is said to have walked on the way to his crucifixion. It means “the way of grief.”
I believe if Dillon’s Chairman John Birkelund and I were free to speak openly about his investment in Cornell Corrections, he would say that decisions had been made to significantly grow narcotics trafficking, War on Drugs arrests and incarcerations and to privatize many aspects of government, including prisons. He was simply investing based on the directions that things were going to go. On the other hand, Hamilton’s investments in communities were “fighting the tape.” The expression “never fight the tape.” is a Wall Street saying. It means never try to oppose the market — always go with the market's trend and direction.
John and I would not discuss the reality of what would happen if there were an application of criminal law to the officers and directors of Dillon Read of the kind that was applied to me and to all the young people regularly rounded up by Operation Safe Home during that time. I worked at Dillon Read for over a decade. I remember the department head that tried to persuade me to help engineer an insider-trading scheme. I remember the trader coming up in the elevator just after having gone outside to snort cocaine. I remember the gossip about drug use in certain parties in the Hamptons. I remember my office mate complaining that Moet & Chandon had given John Haskell cases of champagne to give the associates who worked on Moet’s private placement and that Haskell had kept them for himself. I remember the head trading partner confiding to me that Dillon’s capital had been below our required National Association of Securities Dealers capital requirements, but that Nick had insisted that we not report honestly.
Did I think of these as alleged felonies at the time? Of course not. I thought of them as humans muddling through equally difficult or unpleasant options, of people making mistakes — most of which got fixed. The trader got fired, our capital was increased, and my office mate had a nice life on a nice salary without free champagne. The reality is, however, that in my personal experience, the personal “lawfulness” of the people at Dillon Read was no more or less than the young people being rounded up by HUD and DOJ on Operation Safe Home and the War on Drugs. Indeed, I have generally found the poor to be more careful in their legal transgressions than the well-to-do or rich.
Then, of course, there is the question of what Dillon Read’s liabilities would have been in an evenhanded application of the law for its investment banking services to RJR. In the case of money laundering, saying you don’t know may not be enough to get you off the hook. And if you did know, that’s supposed to be serious jail time and disgorgement of profits, not to mention the physical takeover of your premises as was done to Hamilton Securities. Last but not least are the many unanswered questions I have about what role, if any, Dillon and former Dillon partners and their investment partners and network played in AMS, the HUD accounting software contractor. This includes questions about the $59 billion plus that went missing from HUD, billions lost through HUD mortgage fraud and how those cash and financing flows related to the money that bought Dillon’s Cornell Correction stock and other private prisons stocks and bonds.
John Birkelund and I would not discuss all of this because we would both understand that enforcement has nothing to do with law as described in civics classes. Enforcement is a game — a deadly game meant to maximize insider’s organized crime profits and operations worldwide, and to organize and implement class privilege and ensure that the insiders win in the game of “winner-takes-all” economic warfare. If I did bring it up, John would most likely get frustrated with me the way he used to in the old days. Because John does not have the power to change the rules of the game, just to play within them. John knows how hard it is to make money even when you do your very best to go with the flow. That is why the safe thing to do is to rig cash flow through government laws, regulations and contracts and to arrange for government to get rid of your enemies. This is one of the reasons why the blur of people cycling between high-level Wall Street and Washington positions at some point helps us to understand the extent to which there is no longer any sovereign government.
If I were to sit down with Al Gore, Elaine Kamarck, Jamie Gorelick and Chris Edley, I would expect their explanations would involve more obfuscating policy discussions but it would ultimately come down to a similar notion of going with the flow. As would the hundreds of thousands of highly credentialed, well-paid Americans who have actively lead the day-to-day implementation of policies that — when we pierce the veil — are really dictated by powerful private interests outside of the law as most believe it to be. All these policies and actions add up to genocide — of our families and communities and of all living things, both throughout America and around the world.
Toward the end of the Clinton Administration, I sat down with a piece of paper and made a list of all the people who I believed had died as a result of actions by the U.S. banks, corporations, government and our allies — including economic warfare in Russia and Latin America, narcotics trafficking and War on Drugs both in the U.S. and abroad as well as limited military engagements. I estimated that in a decade, we were intentionally responsible for the death of many millions of people throughout the world. For example, note this interview from May 1996 about the death of children in Iraq:
Lesley Stahl, 60 MINUTES: "We have heard that a half million children have died [because of sanctions against Iraq]. I mean, that's more children than died in Hiroshima and you know, is the price worth it?
U.S. Secretary of State Madeleine Albright: "I think this is a very hard choice, but the price… we think the price is worth it."
I have not repeated this exercise for the current Bush Administration. I expect, if I did, that it would show that the killing machine is steadily growing hungrier — as it has for every Administration for a long time. And with $4 trillion missing from the U.S. government and more missing from a "pump and dump" of U.S. stock and other markets, I suspect that the private offshore deposits have continued to rise with the falling of the Popsicle Index.
The story of Cornell Corrections is not a story of powerful evil men doing racist and sexist things. I have known truly evil men. My former partners at Dillon Read are not among them. With rare exception, they were people that I liked and respected when I worked with them. Like the senior appointees in the Clinton Administration, they are well-to-do and well educated people who embrace “the way things are.” Conversion to a war economy and migration from democracy to authoritarianism are “the way things are.” There are big bucks and jobs at Harvard and universities like it for people like Elaine Kamarck who will give this force a socially respectable face with complex partisan distractions which help obfuscate how the Harvard Endowment continues to profit from something far deeper and far more malevolent than most of us — most likely including Elaine — are willing to face.
The power of the killing machine rests in part in the broad based popular support it receives through the investment system and the financial markets. How are we to plead ignorance if the profits and growth in our 401(k) plans and investment portfolios have been enriched from prison stocks and the securities of the banks, homebuilders, property managers, mortgage bankers and other groups who managed this process of ethnic and economic cleansing and the gentrification it made possible? What can our “socially responsible” investment managers say when they invest in the stocks of banks, like Citibank and JP Morgan-Chase, and government contractors, like IBM and AT&T, who are running critical parts of government as these manipulations occur — including the disappearance of $4 trillion from government bank accounts and the manipulation of the gold markets and inventory in a silent financial coup d’etat? What can all those who benefited financially in the stock market, or from cheap mortgage and consumer loans or reduced ATM and checking fees say? We disassociated the source of our financial benefits from what we saw happening around us that we knew was wrong.
In the summer of 2000, I asked a group of 100 people at a conference of spiritually committed people who would push a red button if it would immediately stop all narcotics trafficking in their neighborhood, city, state and country. Out of 100 people, 99 said they would not push such red button. When surveyed, they said they did not want their mutual funds to go down if the U.S. financial system suddenly stopped attracting an estimated $500 billion-$1 trillion a year in global money laundering. They did not want their government checks jeopardized or their taxes raised because of resulting problems financing the federal government deficit. Our financial profiteering and complicity is not limited to aristocrats and the elites who do their bidding. Our financial dependency on unsustainable economics is broad, ingrained and deep.
Are minorities, women and children being impacted disproportionately? Yes, but that is merely because those with little or no power are easiest to steal from or kill. However, the survival of a parasite dictates that it must keep on eating when the easy pickings are done. After the U.S. Government’s intentional decision to provide no relief in New Orleans in the early days after Katrina, a faster way to set the stage for urban gentrification then the War on Drugs and private prisons, the first female African-American Secretary of State Condoleezza Rice went shopping for $200 shoes while men and women of all ages and backgrounds — black, brown and white — lost businesses, homes, families and lives together in the floods. This is the true face of the New World Order.
When Hamilton’s offices were seized, I found myself before a battery of new attorneys brought in by our insurance company. At one point, one of them suggested that we shift the responsibility for an action to a corporate subcontractor in a manner that would abrogate our verbal contract with them. When I made clear I would not do that, they said I had no choice. If I did not do what they said, the insurance carrier would pull their representation and with no attorneys -- like the young people being rounded up by Operation Safe Home -- I would go to jail. And so I decided it was time to lay down a few ground rules that would help newcomers understand what was involved with working with me. I said:
“Gentlemen, I am obedient to the laws of God and there is nothing that you can say or do that will cause me to violate them. If that means that I am going to jail, then I am going to jail, if only to organize the last group of entrepreneurs I need to run the country when the government collapses. Because if people like me are going to prison, then it is only a matter of time until this government fails.”
Interestingly enough, the lawyer who threatened me, told me many months later that this was the moment in which he realized that we were going to win.
Here is my prediction for the New World Order. I don’t know when. I don’t know where. I don’t know how many satellite systems, electromagnetic weapons, subliminal programming broadcasters, computer hackers, bio weapons labs, cocaine plantations and how much environmental destruction they will enlist along the way. I don’t know how many patents on fundamental life process that Monsanto will claim sufficient to not let me cough without paying them a fee. I don’t know how many people the New World Order will reduce to poverty, assassinate and torture before they fail. I just know that they will fail. Because ultimately large complex systems cannot be held together by greed, technology and fear alone. Suspicion, lawlessness and smallness of mind ultimately cause implosion from within.
Seeing the New World Order as they are accelerates their failure, particularly as it inspires withdrawing our resources from their control and shifting investment to alternatives to govern our global resources on a responsible, wealth creating basis. That is why we gather power for life as we withdraw from people, organizations and efforts that are not authentic and shift our social affirmation, our time and attention, our currency and deposits, and our investments and our donations to authentic people, enterprises and decentralizing solutions.
There was a time in my life when I believed that I was part of a culture of people — call us the English speaking people — who were excellent. The way of grief was the path through which I learned that we have not yet achieved this standard. Long ago, I made a promise that I would never act against the best interests or the excellence of my own people — that I would do my best to ensure that we were worthy of the stewardship of our world and that we did our best to leave a better world for generations yet to come. To make and keep such a promise is to understand that money and position are tools, not goals, and that death is not the worst thing that can happen. John Birkelund would probably accuse me of “fighting the tape” and not being “good at the game.” I would tell John that now is not the time in the history of our people for a failure of imagination.
Mapping The Real Deal is a column on Scoop supervised by Catherine Austin Fitts. Ms Fitts is the President of Solari, Inc. http://www.solari.com/. Ms. Fitts is the former Assistant Secretary of Housing-Federal Housing Commissioner during the first Bush Administration, a former managing director and member of the board of directors of Dillon Read & Co. Inc. and President of The Hamilton Securities Group, Inc.