Catherine Fitts
THE ANATOMY OF A COVER-UP
Fri Dec 6 14:56:56 2002
204.189.23.213

THE ANATOMY OF A COVER-UP
A FORMER REPUBLICAN INSIDER TALKS

By: Catherine Fitts
http://www.customscorruption.com/enron.htm

Catherine Austin Fitts is a former Republican insider who was targeted for her success at reengineering government and providing information about ãhow the money worksä and about stock market capital available to small businesses and communities.

Dennis Bernstein (of KPFA in Berkeley) recently interviewed her about the ongoing cover-up, by Congress, the Department of Justice (DOJ) and the Securities & Exchange Commission (SEC), of the Enron criminal enterprise.

Fitts believes that the most damning evidence in the Enron case was allowed to slip away so that political damage to the current administration could be minimized and money stolen protected from recapture. Fitts believes that it is not too late for informed citizens to insist on a successful effort to get back both the monies stolen and the insider trading profits taken by Enronâs board, management and their affiliates, and to prosecute those responsible.

Ms. Fitts is a former managing director and member of the board of directors of Dillon Read & Co, Inc, a former Assistant Secretary of Housing- Federal Housing Commissioner in the first Bush Administration, and the former president of The Hamilton Securities Group, Inc. Ms. Fitts was offered an opportunity to serve as a governor of the Federal Reserve Board and declined, electing instead to build a private network committed to the creation of wealth through a commitment to the rule of law. She is the president of Solari, Inc., an investment advisory firm created to channel equity capital to solaris (community databanks) and their venture capital affiliates. Solari offers risk management services through Sanders Research Associates in London.

THE INTERVIEW:

Dennis: Say a little bit more about the background and the work you did with the Bush administration, and since that time.

Catherine: I was hired by the first Bush administration to help clean up $100 billion sized financial frauds. These had to do with Iran Contra, the S&L crisis, BCCI and the HUD scandal. I was there for 18 months. When I left I was asked to become a governor of the Federal Reserve Board. I declined and instead started an investment bank and financial software firm. In 1996 and 1997, I was targeted by the DOJ and learned much more about Washington fraud and the depth of the financial scandals that the DOJ keeps hidden.

Dennis: Alright Catherine Austin Fitts, do the anatomy of a cover-up for us. If the Justice Department and Congress and the SEC wanted to nail the Enron bandits and money launderers, what should they have done, first, second and third, that they did not do?

Catherine: There are five steps that should have been taken. All five are based on two fundamental principles that you always see working when prosecutors and investigators are doing a competent job.

The first fundamental principle: Make sure you have control of all the data and information about money and how that money is used in the organization. And then, the second fundamental principle: Use that control (of the data and information) to gain control of any cash that was stolen or wrongfully used.

It helps to compare financial fraud to a game of basketball. The ball is the cash and you want to keep your eyes on the ball at all times. Keeping that in mind, let's walk through the five steps of what a competent investigation and prosecution effort would do in a case of major financial fraud.

Let me emphasize at the outset that what we are dealing with here is very definitely a criminal enterprise. Enron and their accountants have already admitted to securities violations, gross negligence, and obstruction of justice. So let's not skirt the issue: we have a self-proclaimed criminal enterprise. I believe that Enron was also engaged in additional financial fraud and money laundering. When there is even a possibility of something like this, the first thing you do is establish control of both the records and cash. Given that there was, early on, clear admission of criminal violations, there was absolutely no excuse for the government not to have promptly exerted this kind of control.

So let's walk through the five steps:

? First, a real investigation gets control of all the documents. And by all the documents I mean all the papers and digital records of Enron and its 3,000 subsidiaries and special purpose entities, both onshore and offshore. You also make sure you get control of all the Enron-related records at their banks, auditors and other vendors, both onshore and offshore. It's impossible for us to tell, from where we are, the exact extent of the subpoena or other discovery actions that have been taken, but clearly there's a great deal that has not been done, particularly offshore, just based on the public record. We know the government has permitted extensive shredding of documents by Arthur Andersen and Enron, something that is incredibly disturbing because it proves that months into an investigation, the SEC and DOJ chose not to assert the initial control that was absolutely essential to the success of any such investigation.

? Second, you never allow the transfer of assets before you assert the appropriate controls. That's why the first thing you need to do is gain control of documents and the cash. And yet we've seen the government readily permit the transfer of Enron Online -- which I believe was a money-laundering and slush fund operation -- to the Swiss bank, UBS, one of their largest creditors. So now it's very possible that a great deal of information that would be needed for a proper investigation is under the protection of the privacy laws of a Swiss bank. And by the way, it's very interesting, and perhaps quite significant, to note that the newest Board member of UBS, the bank that purchased the Enron Online operation, is the former chairman of Arthur Anderson.

Enron was also permitted to have the gold bullion and gold derivatives trading operation transferred. Understand that to be able make these two transfers, as quickly and quietly as they were, in the middle of an initial bankruptcy filing, was nothing short of miraculous based on what I'm told by bankruptcy attorneys. In combination with the shredding, it permitted the coordination of cover-up of two things: money laundering and a lot of financial fraud between the banks and the entity itself. But this will probably be kept hidden because one of the banks now controls what is probably the most likely guilty entity. So that's number two -- the government has allowed the transfer of assets in a way that stops investigational access to the documents (and employees) they would need for a successful investigation.

THE ANATOMY OF A COVER-UP
FULL STORY CLICK HERE:
http://www.customscorruption.com/enron.htm

The Enron scandal was carried into the White House by the Supreme Court-selected Bush II regime. Oh yes, as president, Bill Clinton played golf with Enron Corp. CEO Kenneth Lay. Many members of Congress on both sides of the aisle also had cozy relationships with Enron and benefited from its largesse—some $5.8 million since 1990, according to the Center for Responsive Politics that said three-quarters of that money went to Republicans. This is the age when corporations keep both sides of the bread buttered—perhaps one side buttered a bit more than the other. The Wall Street gang calls that "hedging your bets."

Of the current Congress, 71 senators and nearly half the House have benefited from Enron's handouts. And in return, Enron received such considerations as an exemption for its energy derivatives business under a 2000 act regulating commodity futures trading.
FULL STORY HERE:
http://www.apfn.org/enron/corporate.htm