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The White House "Big Brother" Data Base & How Jackson Stephens Precipitated a Banking Crisis

by J. Orlin Grabbe


Score another coup for Jackson Stephens' Systematics (Alltel Information Services). It provided the software for the White House's "Big Brother" data base system, and now the White House is in a panic that there may be secret methods of accessing its computer.

The existence of the White House computer system and data base--known as WHODB, White House Office Data Base, and containing as many as 200,000 names--was revealed by Paul Rodriguez in the Washington Times. Some of the information was developed by Insight's Anthony Kimery, soon to be managing editor of the electronic publication SOURCES eJournal. Kimery is a writer whose articles in The American Banker and Wired were among the first to report U.S. government spying on domestic banking transactions. (Kimery was also fired from one magazine for looking into the death of Vince Foster.)

Now things have come full circle. The chief government effort to spy on U.S. domestic banking transactions was directed by the electronic spy agency, the National Security Agency (NSA), working in connection with the Little Rock software firm Systematics. Systematics, half-owned by billionaire Jackson Stephens (of Stephens Inc. fame), has been a major supplier of software for back office clearing and wire transfers. It was Stephens' attempt to get Systematics the job of handling the data processing for the Washington-D.C. bank First American that led to the BCCI takeover of that institution. Hillary Clinton and Vince Foster represented Systematics in that endeavor, and later Foster became an overseer of the NSA project with respect to Systematics.

Working together, the NSA and Jackson Stephens' Systematics developed security holes in much of the banking software Systematics sold. Now we face a crisis in banking and financial institution security, according to John Deutch, Director of the CIA. "One obstacle is that banks and other private institutions have been reluctant to divulge any evidence of computer intrusions for fear that it will leak and erode the confidence of their customers. Deutch said 'the situation is improving' but that more cooperation was needed from major corporations, and said the CIA remains willing to share information with such firms about the risks they might face." (The Washington Post, June 26, 1996, page A19.)

What Deutch failed to mention was that this "banking crisis" in large part was itself created by one of the U.S. intelligence agencies--the NSA in cahoots with Stephens' software firm Systematics. The Citibank heist by Russian hackers, for example, took advantage of a back door in Citibank's Systematics software. (The Russian hackers were apparently aided by the son of one of Jim Leach's House Banking Committee investigators.) Have any major banks thought of instituting lawsuits over this deliberate breach of security on the part of a software supplier?

John Deutch has a proposed solution for this and other computer security problems: the creation of an "Information Warfare Technology Center". Guess where he wants to put the Center: in the National Security Agency itself, naturally. That is, the government wants money budgeted for a new bureaucracy to solve the problem another bureaucracy spent money creating. You have to admire the sheer chutzpah of this kind of con--one which would also leave the NSA fox guarding the banking chicken coop.

Meanwhile, over at the White House, senior aides are in a panic. Is the WHODB system related to the PROMIS software? they want to know. Is there a back door into the system? Have files been download?

It just goes to show that given the right incentive, even the White House will begin spouting conspiracy theories. Perhaps Charles O. Morgan (see part 2 of my Vince Foster series) should write the White House a threatening letter.