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Aired on KPFA 94.1 FM, Berkeley, CA
Friday, October
12, 2001
FAULKNER: On September 29, The San Francisco
Chronicle reported that investors had yet to collect more than
$2.5 million in profits they made trading options in the stock
of United Airlines before the Sept 11 terrorist attacks. The
uncollected money raises suspicions that the unidentified
investors had advance knowledge of the attacks. The securities
and exchange commission is investigating high levels of short
sales and purchases of "put" options, on the stocks of United
Airlines and American Airlines in the three business days
before the attacks. Short sales and put options are bets that
a stock will fall in price.
Meanwhile, the Interdisciplinary Center, a
counter-terrorism think tank headed by former Israeli
intelligence officers, has issued a report on Osama bin
Laden's finances, saying insiders profited by nearly $16
million dollars on transactions involving the two airlines and
the investment banking firm Morgan Stanley, which occupied 22
floors of the World Trade Center. And that report excluded
other unusual trading activity involving insurance companies
with significant exposure to damage claims resulting from the
attacks.
Joining us by phone from Southern California is
Michael C. Ruppert. Ruppert is a former Los Angeles Police
Department field officer and narcotics investigator whom the
CIA twice tried to recruit.
In the course of investigations in the mid
1970s, he came across information the CIA was trading drugs in
order to fund covert operations. He was forced out of the LAPD
in November 1978 after being shot at and threatened for
speaking out about CIA drug activity.
At a Town Hall meeting on November 15, 1996,
Ruppert publicly confronted then-CIA director John Deutsch
with information about three specific CIA drug operations. The
confrontation led to an invitation to appear before the Senate
Select Committee on Intelligence, where he spoke and presented
written evidence concerning the CIA's infiltration of and
illegal relationships with a number of police departments
throughout the country.
Michael Ruppert publishes "From The Wilderness,"
a magazine which deals with the effects of illegal covert
operations on our society.
He's here today to discuss his latest article
for that magazine . . . about the CIA's knowledge of, and
connections to, the suspect trading that occurred in the days
prior to the attacks on the World Trade Center and the
Pentagon.
Michael Ruppert, welcome to "Guns and Butter:
The Economy Watch."
RUPPERT: Good to be here.
FAULKNER: Good to have you. Do you think the CIA
had advance knowledge of the attacks? Did they know a specific
attack was coming?
RUPPERT: I am absolutely convinced that the
Central Intelligence Agency had complete and perfect
foreknowledge of the attacks, down to date, time place and
location, yes.
FAULKNER: Tell us how the CIA monitors the stock
market.
RUPPERT: Well, I have written several stories
about this over the years. One of the primary functions of the
Central Intelligence Agency by virtue of its long and very
close history of relationships with Wall Street, I mean to the
point where the current executive vice president of the New
York Stock Exchange is a retired CIA general counsel, has had
a mandate to track, monitor, all financial markets worldwide,
to look for anomalous trades, indicative of either economic
warfare, or insider currency trading or speculation which
might affect the US Treasury, or , as in the case of the
September 11 attacks, to look for trades which indicated
foreknowledge of attacks like we saw.
One of the vehicles that they use to do this is
a software called Promis software, which was developed in the
1980s, actually 1979, by Bill Hamilton and a firm called
INSLAW, in [the] Washington D.C. area. And Promis is very
unique for two reasons: first of all, it had the ability to
integrate a wide range of databases using different computer
languages and to make them all into one readable format. And
secondly, in the years since, Promis has been mated with
artificial intelligence to even predict moves in markets and
to detect trades that are anomalous, as a result of those
projections. So, as recently as last year, I met with members
of the RCMP [Royal Canadian Mounted Police] national security
staff, who came down to Los Angeles where I am, who are
investigating stolen applications of Promis software and its
applications, and we reconfirmed at that time that, not only
the US, but Israel, Canada, and many other countries use
Promis-like software to track real-time trades in the stock
markets to warn them of these events.
RAMARES: Kellia Ramares here. Mike, is it
possible that the terrorists could have gotten hold of this
software?
RUPPERT: Uh, no, it's, well, it is and it isn't.
The key piece of evidence around September 11 is not that the
software would have had any impact. The key evidence, as I
heard you describing, was the trades themselves, the so-called
put options and the short selling of American Airlines, United
Airlines, Merrill Lynch, Morgan Stanley, and a couple of
reinsurance companies in Europe, which are just really off the
maps. You wouldn't need software to look at these trades and
say, "Oh my God, this is directly connected to World Trade
Center."
RAMARES: OK, but hindsight is 20–20. United
Airlines had a lot of trouble last year: labor disputes, lots
of cancellations. We were on a verge of a recession going into
the attacks and Morgan Stanley's an investment banking firm.
Some day traders could have seen some activity and joined the
party entirely innocently. How can you make a prediction of an
attack?
RUPPERT: Herzliyah, International Policy
Institute in Israel which tracks counter-terrorism, also
tracks financial trading. That's a clear cut sign about how
closely the two are related. And their reports are very clear
that between September 6 and 7 the Chicago Board Options
Exchange, CBOE, saw purchases of 4,744 put options on UAL, but
only 396 call options. On September 10, the day before the
attacks, 4,516 put options were placed on American Airlines,
against only 748 calls, calls being bets that the stock will
go up, puts being that the stock will go down. No similar
trading in any other airlines occurred on the Chicago Exchange
in the days immediately preceding Black Tuesday. That means
that someone had advance knowledge that only the stocks of
these two airlines would be adversely impacted. Had it just
been an industry-wide slump, then you would have seen the same
kind of activity on every airline, not just these two. But
what is also very anomalous, very out of whack here, is the
fact that the number of put options placed, that the level of
these trades was up by 1,200 percent in the three days prior
to the World Trade Center attacks.
RAMARES: Give us a brief overview, really, of
the connections between the CIA and the banking and investment
community. Your article suggests there is a revolving door
between Wall Street and the CIA.
RUPPERT: Oh, indeed there is. First of all, it's
very important to note right up front that European
investigators, who are tracking trades in the insurance
companies, as well as the Israeli institute, have disclosed
that the UAL put options were primarily held by Deutsche
Bank-A.B. Brown. And its very important to note that the
current Number Three at CIA, the Executive Director, a man by
the name of A.B. "Buzzy" Krongard, was, until 1998, the
chairman of A.B. Brown. The company went from being owned by
Banker's Trust to being owned by Deutsche Bank. But this is a
man effectively running CIA, who came from the bank that
handled the trades.
Historically speaking, we go back to 1947, we
look at Clark Clifford, who wrote the National Security Act,
in 1947. He was a Wall Street banker, and a lawyer from Wall
Street. He was the chairman of First American Bancshares that
brought BCCI onto US shores in the late 1980s. He was given
the design for the CIA by John Foster and Allen Dulles, two
brothers: John Foster becoming Secretary of State, Allen
becoming director of Central Intelligence, who was fired by
John Kennedy. They were partners in what is until this day the
most powerful law firm on Wall Street: Sullivan Cromwell. Bill
Casey, the legendary CIA director from the Reagan/Iran Contra
years, had been chairman of the Securities and Exchange
commission under Ronald Reagan. He, in fact, was a Wall Street
lawyer and a stockbroker. I've already mentioned Dave Doherty,
the Vice President of NYSE [New York Stock Exchange] who is
the retired CIA general counsel. George Herbert Walker Bush is
now a paid consultant to the Carlyle Group, the
11th largest defense contractor in the nation, very
influential on Wall Street. "Buzzy" Krongard is there. John
Deutsch, the former CIA director, who retired a couple of
years ago, a few years ago, is now on the board of Citibanc or
Citigroup. And his number three, Nora Slatkin, the Executive
Director at CIA is also at Citigroup. And Maurice "Hank"
Greenburg, who is the chairman of AIG insurance, which is the
third largest investment pool of capital in the world, was up
to be the CIA director in 1995 and Bill Clinton declined to
nominate him. So there is an inextricable and unavoidable
relationship between CIA and Wall Street.
FAULKNER: Michael Ruppert, this is Bonnie
Faulkner. Does the CIA itself invest in the stock market?
RUPPERT: That's unknown. What is known, and what
was disclosed by hearings chaired by Senator Frank Church in
1976, is that the CIA was known and proven in the
Congressional Record to operate proprietary companies, some of
which do trade their stock on Wall Street. One of these,
Southern Air Transport, excuse me, was at it during the Iran
Contra years. There are others: Evergreen Air, which may or
may not be a proprietary, but has strong CIA connections;
there are tons of these companies out there. It's not known if
CIA manipulates markets, although I really believe that they
do.
FAULKNER: Is the CIA's budget public
knowledge?
RUPPERT: No. By law. Under the National Security
Act of 1947 the CIA's budget is hidden in the budgets of all
the other departments of government. We've never been able to
pin down, because it's a secret, exactly how much money CIA
gets. But the best estimates available—and these are from very
good sources—are that it's around 30 billion dollars a
year.
FAULKNER: So I'm assuming then that no one knows
where they keep their budget. I mean, do they keep it in the
bank drawing interest? I guess we don't know.
RUPPERT: Well, no, the way it would work under
the NSA—National Security Act—is that if the budget is $30
billion , $10 billion may be in the Department of Defense,
five in the Department of Justice, three in US Treasury.
That's how they hide the funds.
RAMARES: Michael, Kellia Ramares again. You've
laid out a scenario which would suggest that the CIA is so
involved in Wall Street, they knew these trades were
happening; they knew why. Why would the CIA let such a
horrendous thing happen if they knew about it? All the loss of
life, all the economic damage that we led off our show with
that's going to happen to everyday people, state and local
governments, small investors, businesses. Why did they let it
happen if they knew?
RUPPERT: Well, first of all, let's look at
history. I'm a great addict of the History Channel and all
this year on "The Secrets of World War II," one of their
series, they have run maybe three, four, five times, a
documentary showing clearly that Franklin Roosevelt had
absolute knowledge that the Japanese were going to attack
Pearl Harbor on December the seventh. Navy had broken the
codes. That information was made Top Secret. And Roosevelt
allowed the attacks to happen with the express purpose of
bringing the US into World War II. So there is historical
precedent for this. What I have been writing in "From the
Wilderness" for more than two years, and we've been publishing
four years now, was of huge economic inconsistencies, bubbles
that were about to burst, about a pending collapse of the US
economy that was going to happen anyway.
Just two days before the attacks, I sent a
bulletin to my subscribers saying there's a monstrous
derivatives bubble, to the tune of about 20 trillion dollars
that's about to burst. The price of gold has been manipulated,
and the stock market's ready to crash. And in fact, we had
seen the Dow drop by almost 900 points in the three weeks
prior to the attack. So, in point of fact, the economic crash
was going to happen anyway. As a result of the attacks, now
there are two benefits for the government: Number One, there
is a convenient enemy upon whom to place the blame for the
economic crash. And second, the legislation passed by Congress
has unleashed a torrent of short term, and what are going to
be extremely expensive, solutions which are keeping the US
economic bubble inflated. This incentive: now it's about 100
billion dollars so far I believe, between 40 for the military
and another 60 in tax cuts, is robbing Peter to pay Paul. And
I am absolutely convinced that Social Security is toast and
this was their way to get their foot in the door on that.
RAMARES: Yes, but what about their plans to
privatize Social Security? I don't want my retirement in the
stock market after what you've said and even what I saw
before.
RUPPERT: I sure don't either. You have to
remember that the current Bush administration is a
reincarnation of the administration we saw during Iran-Contra,
and during the years of President Bush's presidency from '89
to '93. These are the people who brought us the savings and
loan crisis, which took $500 billion dollars out of US
taxpayer pockets. These guys know how to loot an economy.
There are very credible, well-documented stories from GAO
[General Accounting Office] that have been written even in the
Washington Times [a very conservative newspaper] showing that
the Department of Defense has, and this is the right word, has
lost more than three trillion dollars in the last two
years. That money is not lost; it's been stolen.
More than 59 billion dollars has been taken out
of HUD [US Department of Housing and Urban Development]. There
are monstrous economic costs which are going to fall on the
American taxpayer. But they will not fall on the
administration or its allies on Wall Street.
RAMARES: Speaking of Wall Street, it doesn't
feel like it's a level playing field for the small investor,
the person who has their kid's college fund in something in
Wall Street to try to make it grow.
RUPPERT: No. It absolutely is not. In 1929, some
15 percent of all the stock in circulation was owned by
households. In 2001, 75 percent of the stock in circulation
was owned by households. That tells you who's carrying the
burden.
If you look at some of the market activity in
recent years, for example, two years ago, Goldman Sachs went
public. And that means that households bought their stock but
Goldman Sachs took the money and cashed out. There has been a
strong trend in the movement of money by the very rich
offshore, out of the country, into safe havens, so that when
the bubble does break, it'll be the taxpayer holding the
bag.
RAMARES: Is Congress knocking on your door to
look more into this? Are we going to see congressional
hearings into possible knowledge of the CIA of the attacks? I
mean we're talking about they let mass murder happen.
RUPPERT: Yes . . . I have spoken confidentially
to two members of the House of Representatives. And I have to
tell you that my take on their view, and these are members who
I consider to be allies and very progressive and awake:
they're basically frightened. The climate is one of near
hysteria. There is an overwhelming attitude in the general
public of wave the flag and kill the bad guys. And it's not
politically wise, I guess, in their viewpoint, to risk their
careers by raising questions. But some of them have to and
some of them must.
Everyday, there are more and more holes in all
of the stories surrounding September 11, and this avoids
people from looking at a broader agenda in Central Asia, which
has to do with the drug trade and the oil. Bear in mind that
Senator Carl Levin (D-Mich.) has documented that 300 billion
dollars a year in drug money moves through the US banking
system. And that was in a minority report to the Senate
Banking Committee released this February, I believe it was.
But that money is now an integral component to sustaining the
bubble. And that's why we're seeing CIA operatives moving
willy-nilly into Uzbekistan, to give us immediately another
Laos, just like we had in the Vietnam era with Air America
planes flying with tons of heroin to markets in the US and
Western Europe. And that's what's coming out of this. Also,
there's a huge grab for oil and a major pipeline to run from
Uzbekistan down to the Pakistani coast, which will weaken
Russia's grip on the region. And I believe, long term, the
economic motive is to Balkanize Russia. But members of
Congress now faced with this are kind of overwhelmed. There
have been a few voices speaking up here and there to oppose
civil rights legislation that was punitive, to address issues
of the war-making powers. But Congress needs to find its legs
and its lungs real quickly.
FAULKNER: Michael Ruppert, this is Bonnie
Faulkner. We have one minute left. You've mentioned when the
bubble is going to burst. A lot of people think that the
bubble has already burst . . .
RUPPERT: Oh no.
FAULKNER: What do you expect to see?
RUPPERT: I was already predicting that the Dow
would be at 8,000 or below by the end of October. Now the . .
. who knows what the short-term impacts of all of the money
that's being poured out of the Treasury are going to have. But
bear in mind there is still a huge bubble. According to
Russian economists—I was in Russia in March—there's 300
trillion dollars in derivatives waiting to pop. Now what that
means is one more good terrorist attack and we could really
understand what a bubble is.
RAMARES: And the FBI has said watch out for
terrorist attacks in the next few days and the CIA says that
we're at 100 percent risk of terrorist attacks. Give us your
web site and little bit about your magazine for those who
might be interested in learning more.
RUPPERT: OK, the web site is www dot cop v like
in Victor CIA dot com. Copvcia.com. "From the Wilderness" is a
newsletter we publish 11 times a year. We're read in 17
countries, by 16 members of the US Congress, including the
Intelligence Committees of both houses, as well as by
professors at 11 universities in the US and Canada. It's a
monthly subscriber. The web site is free; the subscribers get
a little more information and a little newer. But we take
great pride in the fact that we document everything that we
publish so we don't ask anybody to take anything on faith.
RAMARES: OK, Thank you very much for joining us.
You have been listening to Michael C. Ruppert, publisher of
"From the Wilderness" magazine and author of an article on the
CIA, the stock market and the terrorist attacks. Again his web
site is www.copvcia.com. Again, thank you for joining us.
RUPPERT: My pleasure. |
