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The Global Bust-Out Series (Chapter 8): Boris Berezovsky and the “Nexus” Between Organized Crime, Terrorism, and the Global Oligarchy

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The Global Bust-Out Series (Chapter 8): Boris Berezovsky and the “Nexus” Between Organized Crime, Terrorism, and the Global Oligarchy


In earlier chapters of this series, we learned about an incredible enterprise known as the Bank of Credit and Commerce International (BCCI), which was operated by oligarchs with ties to the Muslim Brotherhood in partnership with royal families and government officials who were among the Muslim Brotherhood’s principal sponsors. We also learned that the BCCI enterprise operated with the consent, protection, and involvement of the regime in Washington even though BCCI not only counted among its partners numerous organized crime syndicates and most of the world’s leading terrorist organizations, but also was itself a transnational organized crime syndicate involved in everything from the trafficking of narcotics and nuclear weapons components to the funding of terrorism and the perpetration of destructive financial crime.

In addition, we learned that BCCI counted among its important business partners some of the leading figures of the American establishment, including Michael Milken, who was, during the 1980s, the most powerful financial operator of Wall Street. As we know, Milken and some of his closest associates, in league with the BCCI enterprise, perpetrated the “bust-outs” of numerous savings and loan banks, thereby contributing to the devastating savings and loan crisis that began in the late 1980s, and which ultimately cost taxpayers more than $2 trillion in bailouts—a portent of bigger and better things to come.

Also involved with these bust-outs were (see earlier chapters of this series) some of the nation’s leading organized crime figures, such as Carlos Marcello, who was then the top Mafia boss in the city of New Orleans.  Meanwhile, we know, BCCI was involved with a global network of brokerages, most of them operated by people with ties to organized crime, and most of them specializing in the bust-outs of small to medium-sized publicly listed companies. As a judge remarked after BCCI shut its doors in 1991, the BCCI enterprise singlehandedly “shattered the integrity of the global financial system.”

And, of course, history did not end in 1991, when BCCI was shut down.

That same year, 1991, a Muslim Brotherhood leader named Hasan al-Turabi (also a top official in the government of Sudan) appointed Osama bin Laden to serve as chairman of an outfit called the Islamist International, and Osama bin Laden’s most important mission in that capacity was to help lead a Muslim Brotherhood initiative—“The Financial Jihad”—to replace the BCCI enterprise with a global financial network that would exceed the BCCI enterprise in scope and destructive power. That mission was largely a success, and by 1996, the Muslim Brotherhood (with the help of Osama bin Laden, among others more important than him) had built a global financial network that was also a transnational organized crime syndicate involved in all of the activities—from terrorism and destructive financial crime to the trafficking of narcotics and sophisticated weaponry—that had characterized the earlier BCCI enterprise.

Moving forward, I will sometimes refer not only to the “BCCI network” that operated in the 1980s, but also to the “ongoing BCCI enterprise” that continued to operate in later years. This terminology is, in fact, not quite correct because even prior to 1991, BCCI was just one of many similar outfits in a global market manipulation and money laundering network. In addition, BCCI was not necessarily the most important outfit in the network. But most of the outfits in the network did business with BCCI, and BCCI was a common denominator linking most of the financial operators and criminals in the network. Similarly, in 1996, earnest FBI agents discovered (or, rather, rediscovered) what they described at the time as a “global market manipulation and money laundering network” and most of the people involved with the network had formerly been involved with the BCCI enterprise.

In other words, there existed as of 1996 a global market manipulation and money laundering network that was operated not only by leaders of the Muslim Brotherhood (most of them, including Osama bin Laden, formerly involved with the BCCI enterprise), but also numerous others formerly involved with the BCCI enterprise, among them the leaders of multiple terrorist organizations (spawned by the Muslim Brotherhood), most of the world’s leading transnational organized crime syndicates, numerous rogue intelligence operatives, multiple royal families, some of the most powerful people on Wall Street, and other elements of the global criminal oligarchy. All that had changed since BCCI days was that the network had come to include some new players, notable among them a select number of Russian oligarchs, elements of the Russian intelligence services, and some newer organized crime syndicates (in Russia, the Balkans, and other former east-bloc nations) that had emerged upon the global scene after the fall of the Soviet Union.

In subsequent years, this network remained in business, the only difference being that it came to include still more new and younger players, meanwhile innovating new and eminently more destructive financial weapons (e.g. self-destruct CDOs, an innovation of Michael Milken and associates) that were used to bust out major financial institutions and national economies. Indeed, we will see that this same network contributed mightily to the great meltdown of 2008, and we will see that this same network is presently threatening to deliver a repeat performance. This might be why the president of the United States was, in 2011, moved to take the unprecedented step of formally declaring a state of “National Emergency” in response to certain conditions that currently prevail in the American financial markets.

See Chapter 1 of this series for more on the “National Emergency,” but I will remind readers that President Barack Obama, in 2011, stated that he had formally declared a state of “National Emergency” because there was a clear “nexus” between the world’s leading transnational organized crime syndicates, the world’s leading terrorist organizations, and the intelligence services of several unnamed countries. The president explained further that this was a “National Emergency” because transnational organized crime syndicates (and, we can confirm, others in the “nexus”) had not only “penetrated” the “legitimate” financial sector, but were “undermining markets” to such an extent that they now posed a serious and imminent “threat to the stability of the global financial system.”

The president did not quite put it this way, but what he meant was that there presently exists a global market manipulation and money laundering network (or “nexus”) that is inhabited by transnational organized crime syndicates, leading terrorist organizations, rogue intelligence officials, and “legitimate” financial operators who do business with all of the above. In addition, we can assume that when the president said that miscreants in this network (or “nexus’) were “undermining markets,” he meant that miscreants in the network were, in fact, “undermining the markets.” Put another way, they were perpetrating all manner of schemes that can broadly be defined as short-side market manipulation (i.e. manipulation that was “undermining markets”). And the president was right: this was (and still is) a “National Emergency.”

Unfortunately, the president seems to have declared this “National Emergency” so as to usurp for himself the “emergency” powers to handle the “National Emergency” as he sees fit. Furthermore, it seems that the president intends to handle the emergency by doing precisely nothing whatsoever. For example, the president’s administration has yet to prosecute any of the transnational organized crime syndicates that have (in the president’s words) “penetrated” the “legitimate” financial sector. In addition, the president’s administration has yet to prosecute any “legitimate” financial operators, and nor has the president prosecuted any of the other criminal oligarchs who are (in league with organized crime syndicates, terrorist organizations, and others in the “nexus”)  “undermining markets” to such an extent that they now pose a serious “threat to the stability of the global financial system.”  

Later chapters of this series will discuss in much greater detail our current predicament, but by way of introduction to that discussion, it will be useful for us to first review some history so far as it concerns a Russian oligarch named Boris Berezovksy, who veritably epitomized the “nexus” between transnational organized crime syndicates, terrorism, and the global criminal oligarchy. This history has already been well-documented by others, but it is necessary for me to repeat some of the more salient facts not only because these facts have been widely ignored by the major U.S. news organizations, but also because knowing these facts is essential to any proper understanding of the threat that is presently posed to the stability of the global financial system. Indeed, we will see that this history (like the related history of the BCCI enterprise) is entirely pertinent to any discussion of the great meltdown that occurred in 2008, and the financial crisis that continues to the present day.

* * * * * * * * *

In 2013, Boris Berezovsky died, apparently having committed suicide, at which point the major U.S. news organizations, concerning the life and times of Boris Berezovsky, reported precisely the same party line. According to this party line, Berezovsky had been one of Russia’s most “prominent” and “successful” oligarchs, but had been forced to move to London in 2000 when Russian President Vladimir Putin threatened to press criminal charges against him, not because Berezovsky had committed any crimes, but simply because Putin was a tyrant intent upon persecuting all those who challenged his power.

The major U.S. news organizations suggested further that upon moving to London, Berezovsky ceased to be an oligarch (there are no oligarchs in London, according to the major U.S. news organizations). Instead, Berezovsky (according to the media party line) embarked upon a new career as a Russian “exile” and “dissident” in the mold of the heroic Solzhenitsyn, and during all his years in London (with frequent trips to the U.S.A. where he had purchased many of America’s leading politicians, though the purchased media never mentioned that) Berezovsky was employed full-time  either exposing corruption or otherwise waging his larger campaign for freedom, democracy, and justice for all.

There was, however, more to the story, and much of it had been told by journalist Paul Klebnikov, who, in 2000, published a book (title: “The Godfather of the Kremlin”) reporting that Berezovsky had built his business empire in partnership with leading Russian and Chechen organized crime syndicates. Klebnikov’s book also described the key role that Berezovsky played in orchestrating the rise to power of Vladimir Putin. Indeed, Klebnikov suggested that Berezovsky, who was then the wealthiest and most influential man in Russia, played the most important role in orchestrating Putin’s rise to power, though he had help from other oligarchs and elements of the Russian intelligence services.

Putin had spent his early years working as a Russian intelligence operative in East Germany, and later assumed the leadership of the Federal Security Service (FSB), previously known as the KGB. In 1999, Putin became prime minister, and he was anointed president a few months later. (In 2008, Putin became prime minister again, and in 2012, he was reelected as president). In Russia today, it is almost unanimously accepted that Berezovsky and his allies orchestrated Putin’s rise to power, but it is also true that soon after Putin assumed the presidency in 1999, Putin threatened to file criminal charges against Berezovsky and a few oligarchs who were close allies of Berezovsky, at which point Berezovsky and a few other oligarchs (e.g. Vladimir Gusinsky) left Russia, and settled in foreign countries.

Pundits and journalists in Russia have opposing views about Berezovsky and his “exile” in London. One view has it that Berezovsky elevated Putin to the presidency, but in doing so, he miscalculated, failing to realize  that Putin would not return the favor by allowing Berezovsky and his associates to continue looting Russia, and would, to the contrary, crack down on the oligarchs and strip of them of the power they wielded over the Russian government. The other view has it that Putin’s move against Berezovsky was a ruse, intended only to score political points, and that Putin and Berezovsky secretly maintained close relations. In support of the latter point of view, pundits and media in Russia report that Putin and Berezovsky continued in the years following 2000 to hold secret meetings, and that Berezovsky continued to have business dealings with elements of the Russian intelligence services.

In further support of the latter view, pundits and media in Russia also note that oligarchs and crime syndicates that were among Berezovsky’s closest business partners, and which, along with Berezovsky, played important roles in elevating Putin to the presidency in 1999, continue to this day to operate in Russia with the apparent protection of the Putin government, and in partnership with the powerful Russian intelligence services. Therefore, it cannot be possible, or so it is argued, that Berezovsky, during his years as an “exile” in London, genuinely desired to remove Putin from the presidency.

It might even be (in the view of some Russian pundits) that Berezovsky moved to London not to lead a dissident movement against the Putin government, but to serve Putin as some sort of master spy, seizing control of the dissident movement so as to defuse it, and meanwhile leading the expansion of Russian influence into Britain and other Western nations. Alternatively, some suggest that Berezovsky had been an agent of Western governments at the time when he was the most powerful man in Russia, and Putin became aware of this, one reason why Putin forced Berezovsky to leave Russia, even though it was Berezovsky who had orchestrated Putin’s rise to power. We will see that there is no question that Berezovsky was an asset of Western governments, including the regime in Washington, but the nature of his relationship with Putin after his move to London remains a matter of debate.

Either way, the party line put forth by most major U.S. news organizations is patently false, and it says a lot about the state of the U.S. media that the only mainstream journalist to report the truth about Berezovsky was Paul Klebnikov, author of the 2000 book (“The Godfather of the Kremlin”) and other writings about Berezovsky’s criminality. Even more disturbing is the fact that Klebnikov (who had reported receiving death threats from Berezovsky) was, in 2004, gunned down on a Moscow street, and when he was killed, many of his fellow American journalists did not see fit to report that Klebnikov’s seminal work had linked Berezovsky to organized crime.

For a long time, the last word on Klebnikov’s murder was a 2007 story in Forbes Magazine (the magazine that had employed Klebnikov at the time when he was killed), and this story, authored by a journalist named Gary Weiss, did not even mention Berezovsky’s name, much less the fact that Klebnikov had devoted most of his career to exposing Berezovsky’s criminality. Only after Berezovsky himself was dead did Forbes Magazine publish a story suggesting that Berezovsky had, in fact, been a likely suspect in the murder of Klebnikov. There could be no greater evidence of the timidity of Forbes magazine’s editors than that they could not bring themselves to name a likely suspect in the murder of their own reporter until after the suspect was dead.

All the more appalling was that Forbes had previously given the last word on the subject of Klebnikov’s murder to the journalist Gary Weiss, who was meanwhile helping direct the activities of an outfit called The Klebnikov Project, which had been established by some of America’s most prominent journalists, ostensibly to investigate Klebnikov’s murder, and ostensibly to send a strong message that America’s most prominent journalists would not tolerate the murder of one of their own, and would indeed expose any and all miscreants who would dare so much as threaten a journalist or otherwise seek to infringe upon the freedom of the press. Incredibly, not one of those prominent journalists, in the many stories that they published about Klebnikov’s murder, reported that Berezovsky had threatened to murder Klebnikov, and nor did they report that Klebnikov’s seminal work had not only exposed Berezovsky’s ties to organized crime, but had also linked Berezovsky to multiple murders.

In addition, of course, not one of those prominent American journalists reported that Berezovsky was a likely suspect in Klebnikov’s murder, which was quite in contrast to journalists in Russia, where there is still a free press, and where numerous journalists had not only exposed Berezovsky’s ties to organized crime and had not only indentified Berezovsky as the likely suspect in Klebnikov’s murder, but had also linked Berezovsky to the murders of other journalists besides. All the more incredible was the fact that Gary Weiss, the prominent journalist who helped direct The Klebnikov Project (and who, until after Berezovsky’s death, had the last word in Forbes magazine on Klebnikov’s murder) had previously been employed by the lawyers of none other than…Boris Berezovsky.

Not only that, but Weiss (the journalist who hijacked The Klebnikov Project, an outfit ostensibly devoted to protecting freedom of the press) had been employed by Berezovsky’s lawyers to help quash freedom of the press. More specifically, Weiss (the journalist who also hijacked the Klebnikov Project, which was ostensibly investigating the murder of Paul Klebnikov) had been employed by Berezovsky’s lawyers to provide assistance to a libel lawsuit that Berezovsky had filed against…Paul Klebnikov. In addition, Weiss had been employed (by Berezovsky) to lead a smear campaign aimed at trashing Klebnikov’s reputation.

As part of this campaign, Weiss had authored dozens of anonymous internet reviews trashing Klebnikov’s book, and in these reviews (which DeepCapture reporter and computer technologist Judd Bagley traced to Gary Weiss’s IP address) maintained (falsely) that Klebnikov had fabricated the information in his book linking Berezovsky to organized crime. And if you think we have a free press in this nation, consider that The Klebnikov Project (set up by America’s most prominent journalists to expose those who threaten freedom of the press) not only failed to expose Berezovsky (who threatened the free press), but was, in fact, enthusiastically supported by none other than…Berezovsky.

Meanwhile, many of America’s leading news organizations (e.g. the Wall Street Journal) had come to be owned by people (e.g. Rupert Murdoch) who were among Berezovsky’s closest associates. In addition, the major U.S. news organizations seemed to view with total approval or indifference the fact that Berezovsky (who, after all, was some kind of democracy activist) had meddled in our own democracy, becoming one of the largest  donors (or, rather, buyers) of both the Democratic and Republican parties. Equally important, the major U.S. news organizations completely ignored the massive damage that Berezovsky and his mafia associates did to the U.S. economy during all those years while Berezovsky was ostensibly employed full-time as a Russian “exile” and “dissident” in the mold of the heroic Solzhenitsyn.

* * * * * * * * *

In any event, though the information has never appeared in any major U.S. news organization, it has been widely reported elsewhere, and confirmed to be true by numerous prominent investigators, that Berezovsky did (as Klebnikov reported in his book) build his business empire in partnership with leading Russian and Chechen organized crime syndicates. It has also been confirmed to be true (as Klebnikov reported in his book) that Berezovsky, more specifically, built his business empire in partnership with the Mogilevich organization (led by Semion Mogilevich, often referred to as “the most dangerous mobster in the world”) and a Chechen organized crime syndicate who leaders were (in addition to being mobsters) notorious terrorists, trained by trained by Osama bin Laden’s operation and by U.S. military contractors who took their orders from a faction of the regime in Washington.

Berezovsky himself admitted to investing more than $1 million with a Chechen terrorist named Shamil Basaev, who had once planted a radioactive materials in a Moscow park, informing the Russian police that next time the radioactive materials would be exploded as a so-called “dirty bomb,” thereby afflicting thousands of people with deadly radioactive poisoning. In 2004, Basaev did one better by leading a horrific terrorist attack on an elementary school in Beslan, Russia. That atrocity resulted in the deaths of more than 300 people, most of them young children, though there is debate over whether the children were killed by Basaev and his associates, or by Russian police who stormed the school in a botched attempt to rescue the children whom Basaev was holding hostage.

That same year, 2004, of course, Klebnikov, was murdered. That murder has never been solved, and nor have the murders of numerous Russian journalists who reported extensively on Berezovsky. One of those journalists was named Anna Politkovskaya, and when she was assassinated in 2006, it was widely assumed in Russia that her mistake had been to report the same story that Klebnikov had reported. Politkovskaya had been regarded as being Russia’s best investigative journalist, and the American media establishment conferred upon her numerous awards for her reporting and for her efforts to maintain press freedoms in Russia. However, America’s free press failed to inform the public that Politkovskaya’s seminal investigative reporting had been about Berezovsky’s ties to Chechen organized crime and his role in securing the presidency for Vladimir Putin.

Politkovskaya worked for the Russian newspaper Novaya Gazeta, which is one of the world’s finest media organizations. I cannot help but note the irony of the fact that U.S. newspapers (which operate in a country that boasts of having a “free” press) no longer publish much in the way of investigative reports, and seem to be in large part captured by a ruling oligarchy, while Novaya Gazeta (operating in a nation said by the U.S. media to be something close to a police state) employs dozens of full-time investigative journalists who have not only defied and exposed their own ruling oligarchy, but have done so with little in the way of financial reward.

That is a bitter reality, but, in addition, it seems like something close to absurdity when you consider that the U.S. media gives favorable treatment to the same Russian oligarchs whom Russian journalists have exposed as being criminals and mobsters. Of course, those same Russian oligarchs are also important business partners of America’s leading oligarchs, and make no mistake: the American oligarchy (and their Russian counterparts)  influence what you read in the (American) papers. They also influence what you see on cable news. Strangely enough, the only television news network in the United States that provides accurate and in-depth reporting on important subjects like government corruption and Wall Street miscreancy is RT News, which is operated by… the Russian government.

* * * * * * * *

Paul Klebnikov of Forbes magazine was a rarity. He was an American journalist who investigated the oligarchs. He investigated only Russian oligarchs, but he reported that Russian oligarchs had extensive business in the United States, and their business partners in the United States—certain American oligarchs—were not so different in kind. Klebnikov was an American journalist who knew that all oligarchs (distinct from entrepreneurs) earn their billions from destruction, not from creation. He was a rare American journalist who understood the threat that the global oligarchy posed to the global financial system, and he was the rare American journalist who recognized the threat that the global oligarchy posed to freedom in all the nations of the world.

Klebnikov was, moreover, one of the only American journalists to investigate the ties that bind many oligarchs to transnational organized crime syndicates. He was the rare American journalist who, moreover, understood that there exists what amounts to global organized crime syndicate that has wrought destruction not only in places like Russia, but here in the United States as well. Klebnikov investigated this syndicate and, of course, he was rewarded with death.

The prevailing theory advanced by the Western press was that Klebnikov was murdered by Chechen gangsters who did not appreciate his second book, this one written in Russian and titled “Conversations with a Barbarian,” which was about a Chechen mafia boss named Khozh-Ahmed Nukhaev. Perhaps it was, in fact, Nukhaev who killed Klebnikov, but what the Western press failed to report was that Nukhaev was one of Berezovsky’s most important business partners. Even worse, the major U.S. news organizations failed to report that Nukhaev’s organized crime syndicate (whose other leaders are notorious terrorists, trained by Osama bin Laden’s operation and U.S. military contractors) has a massive presence in the United States, and even operates its own lobbying outfit in Washington.

The lobbying outfit is called the American Committee for Peace in Chechnya, and this lobbying outfit, established by a Chechen organized crime (and terrorism) syndicate, not only operates with the full approval of officials in Washington, but also has a board of directors that includes some of the most prominent former officials of the U.S. government. Which is an important fact related to an important story that Paul Klebnikov published about this same Chechen organized crime syndicate and Boris Berezovsky. This  story was also reported by Politkovskaya, among other Russian journalists who were subsequently killed, and the story goes like this:

In the 1990s, Berezovsky developed close business ties to the Chechen organized crime syndicate, the top leader of which was a mobster named Movladi Atlangeriyev.  Among other things, this organized crime syndicate provided protection services to Berezovsky, helping Berezovsky fight off other organized criminals who threatened the companies– Logovaz and AvtoVaz—that were the early foundations of Berezovsky’s business empire.  One leader of the Chechen syndicate, Mogomed Ismailov, served as the head of Berezovsky’s security service.

Another leader of the syndicate was Nukhaev (the subject of Klebnikov’s second book). Nukhaev was granted a significant stake in LugoVaz, and later the Chechen organized crime syndicate (sometimes referred to as the Lozanskaya Gang, though it goes by other names as well) helped Berezovsky and another oligarch, Roman Abramovich, gain control over the larger portion of Russian’s massive aluminum and other mining industries.

The aluminum industry was so infested with organized criminals that there were pitched gun battles and dozens of murders as competing syndicates fought for control. This was known in Russia as the “aluminum wars” and the winners were organized criminals who handed control to Berezovsky and Abramovich.  One of those organized crime figures was named Michael Chernoy, who remained a partner of Berezovsky and Abramovich. It was widely reported that Chernoy (like Berezovksy)had business ties to not only Russian and Chechen organized crime syndicates, but also elements of the Russian intelligence services.

Notably, Chernoy (like Berezovksy) also had close ties to at least one faction of the regime in Washington.  In addition, Chernoy was the lead sponsor of an organization called The Intelligence Summit, which invited spymasters from around the world to discuss their tradecraft. Former CIA director James Woolsey sat on The Intelligence Summit’s board of advisers until he resigned, citing Chernoy’s ties to Russian organized crime and various murders.

Chernoy, through Berezovsky, was also a business partner of a hedge fund manager and oil trader named Martin Schlaff, who had been one of Vladimir Putin’s closest associates since the 1980s, when Schlaff worked for the East German Stasi in Dresden and Putin was a KGB operative in that city. It has also been widely reported that Schlaff was a key financial advisor to Libyan dictator Muammar Qaddafi, and brokered a deal that saw leading Israeli politicians allowing Qaddafi to provide financial support to Hamas, the jihadist outfit that controlled Gaza. Schlaff has also been alleged to have paid bribes to successive Israeli prime ministers.

All of these people—Schlaff, Berezovsky, and Chernoy—have, in addition, had dealings with Semion Mogilevich, the Russian organized crime boss who is often referred to as “the most dangerous mobster in the world.” A 1996 classified FBI report (since made public) implicated Mogilevich in everything from market manipulation, narcotics trafficking, and prostitution to the proliferation of radioactive materials. European governments and numerous overseas media reports have stated that the Mogilevich organization has extensive ties to Al Qaeda, and the Mogilevich organization, on at least one occasion,  at offered to procure for Al Qaeda highly enriched (bomb grade uranium.

The White House national security staff has identified the Mogilevich organization as one mafia outfit that not only has ties to the Russian intelligence services, but has also “penetrated” the “legitimate” financial sector (i.e. Wall Street), hence our “National Emergency.”

The FBI now lists Mogilevich as one of its ten “Most Wanted” criminals. But while the White House has described the Mogilevich organization as contributing to the present “National Emergency,” the FBI has failed to arrest even one member of the Mogilevich organized crime syndicate, though many members of that crime syndicate reside in the United States, and all members of that crime syndicate are, of course, criminals. Meanwhile, Mogilevich has hired a lobbyist in Washington, and if you think the republic is in great shape, consider that the lobbyist for the world’s most dangerous mobster is William Sessions, formerly head of the FBI (the outfit that publishes those “Most Wanted” lists).

In 2008, Moscow police arrested Mogilevich. There was a brief story in The New York Times, and that was the last time the name “Mogilevich” was mentioned in that newspaper or by any other major American media organization . The American media did not report that the FBI made no effort to extradite its “Most Wanted” criminal. Nor did the U.S. media report that the arrest in Moscow was a farce—that Mogilevich was quickly released, with the Russian Interior Minister announcing that the charges against the world’s most notorious mafia boss were “not of a particularly grave nature.” Indeed, that was true. The only law enforcement agency that has charged Mogilevich with any crime is the U.S. Department of Justice, and the DOJ indicted Mogilevich for nothing more than perpetrating a relatively routine fraud at company called YBM Magnex.

As of 2013, reports from Moscow suggest that Mogilevich may face no charges whatsoever. This is not a surprise, given Mogilevich’s importance to at least some elements of both the Russian government and the regime in Washington. In 1999, Mogilevich was the central figure in a massive scandal that saw Russian organized crime working with not only elements of the Russian intelligence services and Russian oligarchs, including Berezovksy, but also elements of the regime in Washington, to launder upwards of $10 billion through the Bank of New York. Also linked to the Bank of New York scandal, of course, was Berezovksy, and we will see that the money laundering through the Bank of New York was indeed not only condoned, but also facilitated by a faction of the regime in Washington.

* * * * * * * *

There is more to the story that got Klebnikov killed. As mentioned, this same story was reported (in part) by Russia’s leading investigative  journalist, who was also killed. Indeed, more than 30 Russian journalists have been killed since 1999, and many of them had reported elements of the same story. It is a story (also told in Wikileaks diplomatic cables, and by numerous media outlets in Europe and Russia) about the ties that bind Chechen organized crime syndicates to not only the Russian intelligence services, but also to elements of the regime in Washington. It is, moreover, the story of how Boris Berezovsky orchestrated the rise to power of Vladimir Putin, and how he might have done it with help from Chechen mobsters who are also known as “terrorists” with ties to Al Qaeda.

In 2000, Al Qaeda operatives traveled to Russia to meet with a Chechen organized crime (and terrorism) syndicate that had informed Al Qaeda that it was able to acquire nuclear weapons. The Chechens who met with the Al Qaeda operatives (but did not ultimately deliver the nukes) were members of the same syndicate that was then in business with Berezovsky. The meetings between Al Qaeda operatives and the Chechen organized crime syndicate were reported in cables sent to Washington by the U.S. embassy in Moscow, and the FBI subsequently indicted an outfit called Benevolence International, alleging that Benevolence International had been involved with the Chechen organized crime syndicate and its efforts to acquire nuclear weapons for Osama bin Laden.

The director of the Benevolence International office in Chechnya was a man named Saif e-Masry, and he was not only a top Al Qaeda operative, but also a member of the Chechen crime syndicate that had tried to acquire nukes for Osama bin Laden. The headquarters of Benevolence International, meanwhile, was in Chicago, and the FBI reported not only that the Benevolence International office in Chicago was an “Al Qaeda front,” but also that that the Benevolence International office in Chicago had been involved in the effort to acquire nuclear weapons for Osama bin Laden. However, no Benevolence International official ever did any jail time, and Benevolence International was allowed to remain open for business. At the time when it was dealing with the Chechens, Benevolence International was even partly funded by the U.S. government.

Other members of that same Chechen organized crime (and terrorism) syndicate operated in Chechnya under the auspices of an outfit called the International Islamic Relief Organization (IIRO), which was based in the suburbs of Washington, DC. As we know from earlier chapters of this series, both the IIRO and Benevolence International were founded by leaders of the Muslim Brotherhood, most of them Saudi billionaires. One of the IIRO’s co-founders was Osama bin Laden. Another was Abdurrahman Alamoudi, a key figure in Osama bin Laden’s organization who (see earlier chapters) was employed as consultant to multiple U.S. government agencies. During the 1990s, Mr. Alamoudi also worked at the White House as an advisor to President Bill Clinton.

The IIRO, meanwhile, received funding from the U.S. government,  and it, too, remains open for business to this day, despite the fact that the United Nations (and earnest U.S. government investigators) have described IIRO offices in multiple countries as having been “Al Qaeda fronts.”

The most important of the Muslim Brotherhood billionaires (a co-founder of both the IIRO and Benevolence International) was Sheikh Khalid bin Mahfouz, who was not only Saudi Arabia’s most prominent banker, but also one of history’s most destructive financial criminals. In the 1980s, Sheikh Mahfouz had been the largest shareholder and executive director of the Bank of Credit and Commerce International (BCCI), and he was later sentenced to pay a fine of around $250 million (a fraction of what he  had looted) for his BCCI crimes—crimes that had (in the words of the judge who sentenced Sheikh Mahfouz to pay the fine) “shattered the integrity of the global financial system.”

In later years, Sheikh Mahfouz became quite active in Russia, and he was among the oligarchs who, along with Berezovsky and others, looted the Russian financial system, which collapsed in 1997.

Later chapters of this series will describe the looting of Russia in greater detail, and in those chapters we will see that many others linked to the collapse of the Russian financial system were, like Sheikh Mahfouz, formerly involved with the BCCI enterprise. We will also see that numerous American oligarchs were linked to the looting of Russia, and many of those American oligarchs had similarly been involved with the BCCI enterprise during the 1980s. For the purposes of this chapter, though, it is enough to know that one other person linked to the looting of Russia was Adnan Khashoggi, who built his business empire with finance from Sheikh Mahfouz, and who was also a key figure in the BCCI enterprise during the 1980s, when he was linked (along with Sheikh Mahfouz and others) to the savings and loan crisis that devastated the U.S. economy and ultimately cost American taxpayers upwards of $2 billion in bailouts—a portent of bigger and better things to come.

* * * * * * * * *

In 1999, two years after the collapse of the Russian financial system, Berezovsky and few other Russian oligarchs orchestrated the rise to power of Vladimir Putin, and this was accomplished with help from the Chechen organized crime syndicate that was a partner in Berezovsky’s financial empire. Notably, this same Chechen organized crime syndicate had formerly had involvement with the BCCI enterprise, and some of the leaders of this Chechen organized crime syndicate (e.g. Shamil Basaev) were, of course, terrorists, trained by Osama bin Laden and Co. (and also trained by U.S. military contractors who took their orders from a faction of the regime in Washington). This was the same Chechen organized crime syndicate that allegedly worked with Benevolence International (co-founded by Muslim Brotherhood billionaires, some of them formerly involved with the BCCI enterprise) in an attempt to acquire nukes for Osama bin Laden.

Professor Peter Dale Scott, then of the University of California-Berkley, described the various figures involved in the machinations that resulted in Putin gaining the presidency as a “Meta-Group” that resembled the BCCI enterprise. That is to say, Professor Scott noted not only that some of the people in the “Meta-Group” had formerly been involved with the BCCI enterprise, while others (e.g. Berezovsky) were business partners of  former BCCI figures, but the “Meta Group” resembled the BCCI enterprise in that it often pursued political and geopolitical objectives that had the advantage of being profitable (with the profits enabling members of the Meta Group to accumulate further power for themselves, and the power, in turn, delivering still more profits).

I will not repeat everything that has been reported about this “Meta-Group” and its machinations to deliver the presidency to Vladimir Putin, but I will repeat some key facts, and introduce some additional facts, many of which have been noted not only by Professor Scott, but also by Paul Klebnikov, former Russian intelligence officials, officials of numerous countries around the world (none of them in Washington), and leading journalists almost everywhere other than in the United States. In every case, the people who seriously investigated the facts have concluded that Berezovsky and others in the “Meta Group” elevated Putin to the power by instigating the second war in Chechnya, which began in 1999, and which rallied the Russian public behind Putin’s candidacy for the presidency.

Klebnikov and all the others (including former Russian intelligence officials)  alleged that in the lead-up to the second war in Chechnya, elements of the Russian intelligence services orchestrated several terrorist attacks, and attributed them to Chechens. Since then, it has been concluded even by the Russian courts that the Russian intelligence services did stage at least one Chechen “terrorist attack”, a bombing that killed an unspecified number of people and collapsed a bridge. The FSB says that it was merely a training exercise to prepare Russia’s intelligence operatives for real Chechen attacks.

In September 1999, residents of an apartment complex in the Russian city of Ryazan discovered explosives in the basement of their building. The Russian government initially attributed the explosives to “Chechen terrorists” and vowed to arrest the terrorists in short order. But when all evidence pointed to the explosives having belonged to the FSB (the former KGB), Russian government spokesmen admitted that the FSB had planted them.  As in the case of the exploded bridge, however, the spokesmen claimed that the FSB had planted the explosives in Ryazan as a “training exercise” to see if local officials were vigilant in the face of the terrorist threat emanating from Chechnya.

The Russian government also insisted that the explosives were not real, which seemed to contradict the findings of police officers who had initially examined them with equipment that detected Hexogen, an explosive that had been stockpiled by the Russian intelligence services but would have been almost impossible for Islamic terrorists to have obtained without the assistance of rogue officials of some government. Meanwhile, in August 1999, a few weeks prior to the Ryazan incident, an army of several thousand Chechen soldiers had invaded Dagestan, and proclaimed both Chechnya and Dagestan (which neighbored Chechnya) to be independent Islamic Republics.

Citing the alleged terrorist attacks and the invasion of Dagestan as justification, the Russian government ordered the Russian military to invade Chechnya, where the Chechen “rebels” were based, and so began the second war in Chechnya—a war that rallied the Russian public behind strongman Vladimir Putin’s campaign for the presidency.

The invasion of Dagestan was led by two men. One was an Islamic fundamentalist from Saudi Arabia who went by the name Ibn al-Khattab, and who had been trained by Al Qaeda. The other was the notorious Chechen terrorist Shamil Basaev. As noted earlier, Basaev had received training at Al Qaeda camps and he had also received training from U..S. military contractors. Recall also that he had once (in 1995) planted radioactive substances in a Moscow park. When Basaev and Ibn al-Khattab led the invasion of Dagestan, the Russian military invaded neighboring Chechnya, where the rebels were based. This, of course, ignited a terrible war, and as noted by Klebnikov and countless others, there were excellent reasons to believe that this war was orchestrated by Berezovsky and other oligarchs.

One reason we would be justified in at least raising questions about this war is that Berezovsky (who was then the Russian government’s modern-day Rasputin) had, of course, boasted of a long-standing relationship with Basaev. Not only was Basaev a member of the same Chechen organized crime syndicate that had helped Berezovsky build his business empire, but Berezovsky had long led Russia’s negotiations (many of them with Basaev) for the release of people who had been kidnapped for ransom by the Chechens. Berezovsky always insisted that he was just trying to help secure the release of hostages, but as Klebnikov reported, former Moscow police officials who monitored the negotiations concluded that “Berezovsky served as a banker for the Chechen kidnappers, rounding up and transferring the ransom payments from the Russian side…” Klebnikov cited taped conversations that seemed to support the allegation that Berezovsky was essentially helping the Chechens run a kidnapping racket.

Meanwhile, Berezovsky had been forced to admit that he had once “donated” $1 million dollars to Basaev. When pressed to explain this donation, Berezovsky claimed that it was for the “reconstruction of a cement factory.” That is possibly true, but it seemed strange to some people that Berezovsky was building a cement factory in Chechnya for a guy (Basaev) who was one of the world’s most notorious Islamic terrorists, and who was about to lead the invasion of Dagestan, thereby igniting a second war in Chechnya (which was already in ruins as the result of an earlier war).

In 2004, as noted, Basaev ordered what turned out to be one of the most horrific terrorist operations of all time. That operation saw Chechen terrorists take more than 1,000 people hostage at a school in the Russian city of Beslan. Russian security forces stormed the school with tanks, incendiary rockets and other heavy weapons. Ultimately, more 300 people, including 186 children, were killed (either by the terrorists or the Russians, depending on who is telling the story). Nobody has accused the Russian government of complicity in the Beslan hostage-taking, but, of course, elements of the Russian intelligence services were accused of orchestrating the 1999 terrorist attacks that were cited (along with the invasion of Dagestan) as justification for Russia entering into the second Chechen war. We will see that there is some justification for asking whether elements of the regime in Washington were also involved.

As Klebnikov wrote: “The fact that Berezovsky, together with other members of the [then Russian President] Yeltsin inner circle had long maintained a secret relationship with Chechen extremists gave rise to the suspicion that the 1999 apartment bombings had been organized by the Russians themselves.”  Klebnikov suspected the same of the Dagestan invasion, and he was far from the only one. The French newspaper Le Monde reported that the Russian arms export monopoly (now headed by Sergei Chemezov, who features in later chapter of this story, wherein we will discuss his ties to the regime in Washington) had provided Basaev’s men with weapons before they invaded Dagestan..

The French newspaper also reported that in the summer of 1999, just prior to the invasion, Basaev and other Chechen commanders (a.k.a. terrorist/mobsters) had traveled to the French resort town of Biarritz to meet with Berezovsky and Alexander Voloshin, who was then Yeltsin’s chief of staff, and was among those trying to ensure that Putin would be Yeltsin’s successor. Berezovsky responded that he had not met a Chechen commander in Biarritz, but had gone to Biarritz to meet with Vladimir Putin, the president in waiting.

The Le Monde story was remarkably similar to other stories about Basaev meeting with Russian officials in France. For example, the Russian newspaper Versiya reported that the French secret services had monitored a meeting in France between Basaev and Russian government officials, including Alexander Voloshin (the chief of staff named in the Le Monde story). A Russian intelligence official named Aleksander [a.k.a. Anton] Surikov (who was himself placed at the meeting) later corroborated this story, and it was also corroborated in a book (“Blowing up Russia”) that was co-authored by a Boston academic named Yuri Felshtinsky and Alexander Litvinenko, a former Russian intelligence operative who was (at the time when he co-authored the book) employed by Berezovsky. The book asserts that the meetings between Basaev and Voloshin occurred, but unlike some media stories, it does not mention the presence or involvement of Berezovsky.

In addition, the many reports are consistent in stating that the result of this meeting was that Basaev agreed to lead the invasion of Dagestan, while the Russians (including, in most accounts, Berezovksy) at the meeting agreed that they would arrange for the Russian government to respond by invading Chechnya, thereby precipitating a second war in Chechnya. The Russian officials involved in this meeting included not only Alexander Voloshin, but also the above-mentioned Anton Surikov, who was an official of the GRU, Russia’s military intelligence service, and also a board member with company called Far West, LLC. Surikov, as mentioned, has confirmed that the meeting occurred, but he has not elaborated on the outcome.

Others who attended the meeting were, like Surikov, board members of Far West,  LLC. Importantly, Far West, meanwhile, had been linked to the drug trade, and it was, at this time in 1999, operating as joint venture business with Halliburton, the big U.S. contractor. Far West, LLC also had dealings with Diligence, LLC, a U.S. military contractor that was, at this time in 1999, providing training to the Chechen separatists. Those same Chechen separatists were, of course, also mobsters and narco-terrorists, and they had received some additional training from Osama bin Laden & Company.

Notably, U.S. military contractors were, at this time in 1999, also training the Kosovo Liberation Army, and President Clinton had ordered to the U.S. military to go to war in support of the Kosovo Liberation Army’s campaign against the army of Serbian leader Slobodan Milosevic. Like the Chechens, the KLA was a narco-terrorist organization (founded by Albanian organized crime figures) and the KLA received training not only from U.S. military contractors, but also from members of Osama bin Laden’s organization who were operating in the Balkans under the auspices of the IIRO.

Others who attended the meeting with Basaev and Berezovksy in France (all board members of Far West LLC) were: Ruslan Saidov, who had extensive dealings with the Habib Bank, which controls what used to be BCCI’s operation in Pakistan;  Alfonso Davidovich, a Venezuelan banker, who was formerly involved with the BCCI enterprise, and who was widely reported to have business relationships with the Cali Cartel and the FARC (i.e. a narco-terrorist outfit in Colombia); and Yakov Kosman, an Israeli-German businessman who was, at the time, the top financial advisor to Hashim Thaci, leader of the Kosovo Liberation Army (KLA).

Every account further states that the meeting between Basaev, Russian government officials, and the others, including Berezovksy, took place at a villa near the French resort of Nice. And all of these accounts (citing French secret service sources, among others) report that the villa belonged to the former BCCI figure Adnan Khashoggi, a long time associate of Berezovsky. It was Khashoggi who hosted the meeting. And it was likely he who brokered the discussions about the invasion of Dagestan.

Khashoggi, meanwhile, was involved with both the IIRO and  Benevolence International, whose offices in Chechnya were, of course, managed by members of the same Chechen organized crime (and terrorism) syndicate that had invaded Dagestan.  Meanwhile (see earlier chapters of this series), the IIRO’s offices in the Balkans were managed by Al Qaeda operatives who were training the Kosovo Liberation Army, and the White House employed several IIRO officials (including Mr. Alamoudi, who was key figure in Osama bin Laden’s organization) as advisors to President Bill Clinton (who, of course, had just ordered the U.S. military to go to war in support of the Kosovo Liberation Army’s campaign against Serbian President Slobodan Milosevic).

At this time, of course, not only was the Clinton administration quietly sponsoring the Chechens who had invaded Dagestan, but the Chechens had established their lobbying outfit in Washington, and Berezovsky was already one of the biggest donors to both the Democratic and Republican parties. Khashoggi, too, was big donor to the Republican-Democratic Party, and he had been on close terms with every U.S. president since the days of Richard Nixon. Others in the “Meta-Group” had close ties to Washington as well, and it is possible that their goal in orchestrating the invasion of Dagestan was not only to elevate Putin to the presidency, but also to curry favor in Washington.

In any event, the rest was history. Putin unexpectedly cracked down on Berezovsky and some of his associates, including the Chechens, and the U.S. government (along with the official U.S. media) reported that the crackdown was evidence that Russia, under Putin, had become a tyrannical police state. Meanwhile, Berezovsky and his associates, among them the Chechens and a host of former BCCI figures, including Sheikh Mahfouz (one of Osama bin Laden’s most important business partners) and Khashoggi, achieved still greater favor with the U.S. government, which treated them all as if they were themselves prominent members of the American establishment. The U.S. government also welcomed these criminals, mobsters, and terrorists to the United States, where, of course, they were never be arrested for the crimes (such as busting out the global economy) that they perpetrated in partnership (as we shall see) with elements of the regime in Washington and some of America’s leading oligarchs.

* * * * * * * * *

After Putin and Berezovsky allegedly had their falling out, Berezovsky moved to London where he and other “exiles” formed a peculiar group called “The London Circle,” which frequently advocated for reform in Russia and for the removal of Putin from the presidency. Until 2006, one member of “The London Circle” was Alexander Litvinenko, the former intelligence (FSB) operative who was employed by Berezovsky (and who later co-authored a book alleging that Basaev and Russian officials had conspired together in the terrorist attacks and the invasion Dagestan that resulted in the second Chechen war, though this book did not mention Berezovsky’s role in any of these events).

In 1998, while still employed by the FSB, Litvinenko had held a dramatic press conference announcing that the FSB had ordered him to assassinate Berezovsky. Many people (including Klebnikov) found his story improbable, and speculated that it might have been intended to benefit Berezovsky, who had been working closely with Litvinenko in his dealings with the Chechens. At the time, Litvinenko was also moonlighting as Berezovsky’s bodyguard, and Berezovsky had just been embarrassed by the publication of compromising information about some of his business dealings related to his part ownership of the Russian airline Aeroflot.

There were, more specifically, suspicions (never proven) that the compromising information had come from the FSB, and there were reports that Berezovsky’s allies in the Russian government wished to remove the head of the FSB, Nikolai Kovalev, and replace him with someone who was more amenable to the Berezovsky clique’s agenda. The scandal surrounding Litvinenko’s announcement seemed to serve those purposes. When Litvinenko said he had been ordered to kill Berezovsky, Kovalev was forced to resign, and Vladimir Putin was named to replace him as head of the FSB, which was the first big step in Putin’s rise to the presidency a year later.

According to Klebnikov, “most knowledgeable observers concluded that the alleged FSB plot to assassinate Berezovsky was a fabrication.” Sergei Kiriyenko, who was then Russian prime minister, told Klebnikov that it was “some sort of a trick” devised by Berezovsky in furtherance of his ambitions to greater power in Russia. All of which left many observers surprised when Putin and Berezovsky later had their falling out. Most Western media assume that Putin and Berezovsky had become bitter rivals, but some in Russia think that the two men remained secret allies. According to this theory, their dramatic falling out (which occurred immediately after Berezovsky orchestrated Putin’s rise to power) was another conspiratorial “trick” aimed at covering up the true nature of their relationship and the role that Berezovsky and Chechen terrorists played in elevating Putin to the presidency.

Meanwhile, numerous credible sources (including, for example, most Russian accounts of the 1992-1993 war in Abkhazia, where Basaev and other Chechen terrorists had their first exposure to battle) have come close to proving that the Chechens had long-standing ties to the Russian military and intelligence services. This is an opinion shared by earnest U.S. diplomats (distinct from the official spokesmen in Washington), who inadvertently shared their opinions with Wikileaks.

As for the nature of the relationship between Berezovsky and the Russian intelligence apparatus (led by Vladimir Putin), I do not have further insight, except to say that the relationship had a strange history, and it became only more surreal after Berezovsky (once the most powerful oligarch in Russia, the man who made Putin president, and also the man most widely credited with the wholesale corruption of the Russian government, not to mention the bust-out of the Russian economy) suddenly assumed a new identity as a conscientious reformist, dissident, and exile.

The weirdness reached its peak in 2006, when Berezovsky’s employee, Aleksander Litvinenko (the former FSB officer, then living with Berezovsky in British “exile”), was poisoned by radioactive polonium and died. More specifically, Litvinenko was killed with polonium 210, and it was a matter of grave concern that this radioactive substance was smuggled into Britain. In 2003, the Nuclear Regulatory Commission had listed polonium 210 as one of the ten radioactive materials that were of “greatest concern” because they could be used by terrorists to make a “dirty” bomb.  The amount of polonium 210 that killed Litvinenko was enough to have built a bomb that would have been capable of contaminating a large segment of any major city with cancer-causing radioactive poison.

Litvinenko had devoted much of the three years prior to his death to advancing the theory (reported also in his book, “Blowing Up Russia,”) that the Russian intelligence services had ties to Chechen terrorists and orchestrated the 1999 terrorist attacks in Russia and the invasion of Dagestan to elevate Putin in the presidency. However, as I mentioned, Litvinenko did not name his employer, Berezovsky, as having any role in the supposed conspiracy.

Just prior to his death, Litvinenko had promised to release new evidence that (according to Litvinenko) linked the Russian government directly to Al Qaeda. After his death, the Russian government announced that it was Litvinenko and Berezovsky who had ties to Al Qaeda, and that Litvinenko had accidentally poisoned himself with the radioactive polonium while building a dirty “nuclear bomb” for Osama bin Laden. The British government (and most of the Western media) blamed the Litvinenko murder on the Russian government.

Many also blamed the Russian government for the murders of Anna Politkovskaya and other journalists who had close working relationships with Litvinenko and had been killed that same year (2006). However, another theory (and one worth seriously considering) is that Litvinenko was killed by Berezovksy or other agents of the regime in Washington. The British government has reported that the prime suspect was an FSB official named Andrei Logovoy, but he was one of Berezovsky’s long-time coconspirators, with close ties to the regime in Washington. Litvinenko’s father, meanwhile, has reported that Litvinenko feared that he might be killed by Berezovksy, and had been threatened by Berezovsky’s mysterious publicist, Alexander Goldfarb, who was also a microbiologist and “political activist” linked to the Soros Foundation various other U.S. government-sponsored programs to unseat governments in Eastern Europe. (Goldfarb, however, has not been accused of wrongdoing by any law enforcement agency).

Shortly before Litvinenko was killed, Basaev (the Chechen terrorist at center of the supposed conspiracy) was killed, and many of the Chechen organized crime figures that had played a role in building Berezovsky’s business empire were also killed. It seems likely that all of these killings were likely part of larger effort to witnesses to the machinations leading to the Chechen war. This might also explain the mysterious “suicide” of Berezovsky this year.

Nukhaev, the Chechen mafia boss (and Berezovsky business partner) who had featured in Klebnikov’s second book, and whom the Western media suspected of ordering Klebnikov’s murder in 2004, has since  disappeared (his whereabouts remain unknown). However, other members of this same Chechen organized crime syndicate are known to be residents of the United States. They were (and are) still operating their influential lobbying organization (the American Committee for Peace in Chechnya).

Meanwhile, the Russian government has stated repeatedly that Berezovsky had ties to “Chechen terrorists” (many of them trained by Al Qaeda) and that Berezovsky might have coordinated the invasion of Dagestan, but the Russian government insists that Putin was unaware of this at the time when Berezovsky was serving as Putin’s consigliore-in-chief.  Russian Deputy Interior Minister Arkady Yadelev has announced that Litvinenko, prior to his death, had visited Chechnya to kill witnesses who linked Berezovsky to the terrorist leader Basaev.

Previously, of course, Litvinenko (who was then employed by Berezovsky) was among those leading efforts to expose ties between Basaev and the Russian intelligence services.

Since it had been widely accepted by almost everyone that Basaev had ties to Berezovsky, and it has also been widely accepted that Berezovsky worked with elements of Russian intelligence to orchestrate Putin’s rise to power, it is unclear why Berezovsky’s employee (the former intelligence officer Litvinenko) would have advertised Basaev’s ties to Russian intelligence, and it is unclear why the Russian government would have advertised Basaev’s ties to Berezovsky. It seems as if they were all telling basically the same story, and at the same time sowing confusion as to the specifics and their implications.

Meanwhile, the new “Godfather of the Kremlin” is widely reported to be Roman Abramovich, who was Berezovsky’s most important business partner (for a time, Abramovich and Berezovsky effectively ran a joint-venture that controlled many of Russia’s biggest businesses and its most lucrative commodities, including oil and metals) until recently when the ruling family of Abu Dhabi (formerly among the founding shareholders of BCCI) was chosen to broker a division of their assets.

Many reports described Putin and Abramovich has having something like a father-son relationship, with there being some dispute as to who is the father—Abramovich or Putin. Abramovich and Berezovsky, meanwhile, fought a $3.2 billion lawsuit, with Berezovsky claiming that Abramovich forced him to sell his shares in their joint ventures at below-market prices, and Abramovich claiming that he had to pay $2 billion simply to finance Berezovsky’s activities as Russia’s “political godfather.”

More specifically, Abramovich says he had to pay $2 billion in bribes and luxurious gifts that Berezovsky and Abramovich used to cement their relationships with the Russian government. So Abramovich, who is now Putin’s “son” or “father”, claims that he had to pay $2 billion so that his business partner, Berezovsky, could be Putin’s “godfather.” Why Abramovich would admit this remains an unanswered question, but it fits the pattern of admitting to corrupt relationships, while at the same time sowing confusion as to the precise nature of those relationships and their implications.

At any rate, while there remains plenty of confusion with regards to Russia, there is enough clarity to say with a high degree of certainty that Russian oligarchs and associated mobsters and terrorists (all of them either ignored by the major U.S. news organizations or, in the case of the oligarchs, described by the major U.S. news organizations as “prominent businessmen”) pose a threat to what is commonly referred to as “civilization.” In addition, there is no doubt that President Obama was right to say that there remains a “nexus” between Russian organized crime syndicates, the Russian intelligence services, and various terrorist organizations, though the “nexus” seems also to include elements of the regime in Washington and the president himself, not to mention many of Wall Street’s leading lights.

Therefore, we need to examine this “nexus” in greater detail. Indeed, it is matter of some urgency that we identify all of the miscreants in this “nexus” because the “nexus” presently poses what is, without doubt, the single biggest threat to not only the stability of the global financial system, but also pretty much everything else that matters—e.g. our freedom, our democracy, and the future of our kids. This will become more than apparent to readers of the next chapters in this, the Global Bust-Out Series, wherein the other miscreants in the nexus will be identified and more full exposed, while the damage that they have done will be more precisely explicated and quantified. So please stay tuned to DeepCapture.com (motto: “We are the red pill”).

To be continued…

Mark Mitchell spent most of his career working for mainstream news publications before joining DeepCapture.com

 

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“The Global Bust-Out Series (Chapter 7): Michael Milken and the “Insider Trading” Network (as of 2013)

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“The Global Bust-Out Series (Chapter 7): Michael Milken and the “Insider Trading” Network (as of 2013)


This is Chapter 7 of a multi-chapter series. On your right is a Table of Contents to all chapters published so far.

* * * * * * * * *

In earlier chapters of this series, we learned about an incredible enterprise known as the Bank of Credit and Commerce International (BCCI), which was operated by oligarchs with ties to the Muslim Brotherhood in partnership with governments that were among the Muslim Brotherhood’s principal state sponsors. We also learned that the BCCI enterprise operated with the consent and protection of Washington even though it not only counted among its partners numerous mobsters and global terrorists, but was also operating what amounted to a transnational organized crime syndicate involved in everything from the trafficking of narcotics and nuclear weapons components to terrorism and the perpetration of destructive financial crime.

In addition, we learned that BCCI counted among its most important business partners some of the leading figures of the American establishment, including Michael Milken, who was, during the 1980s, the most powerful financial operator on Wall Street. As we know, Milken and some of his closest associates, in league with the BCCI enterprise, perpetrated the “bust-outs” of numerous savings and loan banks, thereby contributing to the devastating savings and loan crisis that began in the late 1980s, and which ultimately cost taxpayers more than $2 trillion in bailouts—a portent of bigger and better things to come.

Also involved with these “bust outs” were (see earlier chapters of this series) some of the nation’s leading organized crime figures, such as Carlos Marcello, who was then the top Mafia boss in the city of New Orleans. Meanwhile, we know, BCCI was involved with a global network of brokerages, most of them operated by people with ties to organized crime, and most of them specializing in the “bust outs” of small to medium-sized publicly listed companies. As a judge remarked after BCCI shut its doors in 1991, the BCCI enterprise singlehandedly “shattered the integrity of the global financial system.”

And history did not end in 1991, when BCCI was shut down.

Most of BCCI’s former principals and their partners (“the larger BCCI enterprise”) continued in the years that followed to involve themselves with similar enterprises, the only difference being that the enterprises came to include some new and younger players, while the enterprises innovated new and more destructive financial schemes. Indeed, we will see that people formerly involved with the BCCI enterprise, along with their newly acquired business partners, contributed significantly to the great meltdown of 2008, and are presently threatening to deliver a repeat performance.

This might be one reason why the president of the United States was recently moved to take the unprecedented step of declaring a state of “National Emergency” in response to certain conditions that currently prevail in the American markets. See Chapter 1 of this series for more on the “National Emergency,” but I will remind readers that in the summer of 2011, President Barack Obama, in explaining why he had declared a “National Emergency,” stated that there was a clear “nexus” between transnational organized crime syndicates, the intelligence services of several unnamed countries, and the world’s leading terrorist organizations.

In addition, the president explained that transnational organized crime syndicates (and, we can confirm, others in the “nexus,”) had “penetrated” the “legitimate financial sector” (i.e. Wall Street). Not only that, but the president stated that this was a “National Emergency” because transnational organized crime syndicates with ties to terrorist organizations (presumably with help from the “legitimate” financial sector on Wall Street) were “undermining markets” to such an extent that they now posed a serious and imminent “threat to stability of the global financial system.”

Unfortunately, officials in Washington have yet to prosecute any of the people (e.g. mobsters, terrorist financiers, and miscreants on Wall Street) who account for our present “National Emergency.” Indeed, as was the case in the 1980s, when BCCI and its partners owned many of America’s leading politicians (including multiple U.S. presidents), it presently seems to be the case that Washington has been “deep captured” by a network (or “nexus,” as the president calls it) that includes the world’s leading mobsters, billionaires with ties to terrorist organizations, and the “legitimate” miscreants on Wall Street who do business with mobsters and terrorists.

In addition, officials in Washington have done little to crack down on the sorts destructive financial weapons (e.g. the “bust outs” of major banks and associated schemes, such as manipulative short selling, self-destruct CDO’s, mortgage fraud, death spiral finance, toxic debt, etc.) that nearly destroyed the world in 2008, and which are now, once again, threatening to collapse the global financial system.

Later chapters of this series will discuss in much greater detail the “global bust-out” that accounts for our current predicament, but first it will be useful to review a bit more history so far as it concerns the network of Michael Milken, formerly known as the most powerful man on Wall Street, later known as one of history’s most destructive financial criminals, and presently known (to readers of the major U.S. newspapers and officials in Washington) as one of Wall Street’s all-time greatest heroes and a “prominent” fixture of the American establishment, worthy of our respect and admiration.

* * * * * * * * *

When Michael Milken was indicted in 1989, the major U.S. news organizations reported that he and one of his co-conspirators, Ivan Boesky, were the central figures in a nationwide “insider trading” network. In addition, the major U.S. news organizations reported that Milken was indicted thanks mostly to the fact that Boesky had cooperated with the government, providing the key evidence that allowed prosecutors to expose the “insider trading” network. It was true that Milken and Boesky were involved in “insider trading,” but the reports by the major U.S. news organizations contained some important omissions.

For starters, Milken and his network were involved in much more than “insider trading.” As we know from earlier chapters of his series, Milken and his closest associates, including Boesky, conspired with the BCCI enterprise and some of the nation’s leading organized crime figures to “bust out” (i.e. loot and destroy) many of the nation’s leading savings and loan banks. We also know that Milken was involved with numerous brokerages (some of them linked to the BCCI enterprise) that specialized in perpetrating the “pump and dump” bust-outs of small to medium-sized publicly listed companies.

In addition, a careful reading of Milken’s 99-count indictment (with many of those counts pertaining to his “bust-outs” of savings and loan banks and other companies, though he pled guilty to only seven counts) reveals that Boesky provided little of the information that was used to prosecute Milken. Instead, the government obtained the vast majority of the evidence used against Milken (and Boesky) in a 1989 raid of a major investment and brokerage operation called Princeton Newport, which had been a key component of the Milken network, involved not only in insider trading, but also the full panoply of other schemes that Milken and his network perpetrated during the 1980s. At the time, Princeton Newport was operated by man named Edward O. Thorpe, who was most famous for having worked with the Genovese Mafia family to develop a method for beating the black-jack tables in Las Vegas (Thorpe has never been charged with any crime, and he is presently one of the nation’s most prominent hedge fund managers).

Pulitzer Prize winning author James Stewart similarly reported in “Den of Thieves” (the seminal work on the government’s prosecution of Milken) that Boesky provided little information to the government. According to Stewart, Boesky told the government that he could not testify against Milken because he was afraid of what might happen to him. As Boesky put it, Milken had “friends in Vegas” – an apparent reference to the Mafia. As Stewart also reported, soon after Boesky expressed his fears, one of Milken’s closest associates, John Mulheren, got into his car and headed towards Boesky’s house. Police officers had been watching Mulheren, and knew that he had a gym bag in his car loaded with two handguns, a 12-gauge shotgun, and a .233 caliber Galil assault rifle.

Suspecting that Mulheren planned to murder Boesky, the cops arrested Mulheren and put him in jail, where Mulheren spent most of his time conversing with Anthony “Fat Tony” Salerno, who had been the top boss of the Genovese Mafia family until he was jailed on charges of manslaughter. Mulheren himself was investigated for his alleged role in Milken’s network, so it is possible that Mulheren thought about killing Boesky to keep Boesky from providing the government with information about his own (Mulheren’s) activities. Alternatively, it is possible, as some have reported, that Mulheren was simply on the wrong psychiatric medications and didn’t know what he was doing.

Either way, Mulheren was never charged for his suspected role in Milken’s insider trading (and “bust out”) network, and nor was he charged for trying to kill Boesky. He was quickly released from prison, and he subsequently reconciled with Boesky. Contrary to the message put forth by Milken’s public relations machine (which maintains that Milken despises Boesky, and that Milken was convicted only because Boesky was a dirty rat who provided the government with false information about Milken’s activities), Milken also reconciled with Boesky, and after Milken was released from prison (he served two years of a ten year sentence), he and Boesky began again to do business together.

Meanwhile, Mulheren c0-founded, with a trader named Izzy Englander, a hedge fund called Millennium Management, and though Mulheren died in 2003, Millennium is presently one of the most powerful hedge funds in the nation.

In 2010, the media began reporting that the FBI was once again investigating what the FBI described as a “network” of financial operators who were involved in “insider trading.” According to the FBI, this was, in fact, the biggest “insider trading” investigation in FBI history. This investigation is presently ongoing, and a key focus of the investigation, according to media reports, is the giant hedge fund SAC Capital, which is run by Steve Cohen. Back in the 1980s, Cohen was investigated by the Securities and Exchange Commission (SEC) for allegedly trading on inside information that he received from Milken’s shop at Drexel Burnham Lambert, and back in the 1980s, Cohen and all the others in Milken’s insider trading “network” were, of course, involved in much else (e.g. manipulative short selling, the “bust-outs” of publicly listed companies, etc.) besides insider trading.

Similarly, the “insider trading network” that the FBI is presently investigating has been involved in much else besides insider trading. Previous DeepCapture stories have provided ample evidence that SAC Capital and other hedge funds in its “network” have perpetrated a great deal of manipulative short selling, and they have, along with others, including Michael Milken (who is. to this day a key figure, along with SAC Capital and others, in an “insider trading” network), perpetrated the “bust-outs” of publicly listed companies. Cohen himself has not been charged with any crime, but multiple traders have been indicted for insider trading that they conducted while working for SAC Capital, and the media has reported that prosecutors are hoping to indict Cohen and SAC Capital, though the media continues to report that SAC Capital’s only alleged offense has been to trade on inside information.

Meanwhile, it is clear from SEC filings that SAC Capital and a larger “network” of other hedge funds (many of which employ former SAC Capital traders, and many of which have ties to Milken going back to the 1908s) regularly trade in the same stocks, and many of these hedge funds have not only coordinated their manipulative short selling attacks, but have also come under closer scrutiny during the course of the FBI’s investigation into what the FBI continues to describe as a “network” of financial operators.

One hedge fund in this “network” is Millennium Management, the outfit that was founded by Mulheren and Izzy Englander. The FBI has not publicly implicated Millennium in the “insider trading” network, but Millennium has acknowledged that it is concerned about the greater scrutiny. Indeed, soon after the FBI investigation became big news, Millennium hired an advisory board whose job is to make sure the hedge fund remains in compliance with regulations. Millennium’s advisory board includes former FBI Director Louis Freeh, former SEC enforcement division chief Stanley Sporkin, and former SEC Chairman Harvey Pitt (who has been a leading advocate of reform to address the problem of manipulative short selling).

Hopefully that advisory board will keep Millennium in compliance with the rules, and it will certainly keep Millennium immune from further scrutiny on the part of the FBI and the SEC, but it is clear that Millennium and SAC Capital, along with others in their “network” of hedge funds, have continued to collaborate with Milken, investing in companies that Milken was promoting, and attacking companies that Milken was seeking to undermine or destroy. Some details can be found in my recently published book (title: “The Dendreon Effect: How Felons, Con-men, and Wall Street Insiders Manipulate High-tech Stocks”) which also provides other information about the techniques used by a network of powerful hedge funds (and Michael Milken) to undermine the markets and hurt individual investors.

As we will see in later chapters of this series, this same crowd (i.e. Milken and the “network” that the FBI is now investigating, though so far with no prosecutions of any big fish) contributed to the meltdown of 2008, and continue to pose a threat to the markets today.

For our present purposes, we need to stress that Boesky was right when he said that Milken had “friends in Vegas.” Milken’s best friend in the world, according to Milken, is Steve Wynn, the Las Vegas casino mogul. Meanwhile, Wynn’s friends, according to Scotland Yard, have included the dons of the Genovese Mafia family. Indeed, according to a declassified report written in the late 1980s by Scotland Yard investigators, Wynn had “been operating under the aegis of the Genovese Mafia since he first went to Las Vegas in the 1960s.” Scotland Yard noted that both Wynn and his father had a long standing relationship with Genovese Mafia boss Anthony “Fat Tony” Salerno (the mobster with whom Mulheren spent most of his time convening during his stint in jail).

Wynn, however, denies any relationships with the Mafia, and he has won a defamation lawsuit against a Las Vegas newspaperman who published a book (title: “Running Scared”) that advertised itself as “explaining why a confidential Scotland Yard report calls Wynn a front man for the Genovese crime family.” Wynn also filed a suit against the book’s publisher, Lyle Stuart, who had published other controversial books, such as the “Anarchist Cookbook,” and “Turner Diaries,” which is a fictional account of home-grown rebels overthrowing the “Zionist” government of the United States. In explaining why he had filed a lawsuit against the publisher, Wynn said, “I want to put Lyle Stuart out of business. Every law enforcement agency has always vouched for me that any suggestion of me and organized crime is preposterous. I know one thing: If anybody says any different, they’re a fucking defendant.”

It is true that law enforcement agencies (other than Scotland Yard) have vouched for Wynn. Indeed, former FBI Director Louis Freeh (the same fellow who is employed by Millennium Management) is presently employed by Wynn. Freeh is helping Wynn investigate one of Wynn’s former business partners, a Japanese billionaire named Kazuo Okado. Meanwhile, Wynn has won multiple other defamation lawsuits against people and journalists who have accused him of having ties to the Mafia. For example, Wynn has successfully sued Joe Francis, creator of the “Girls Gone Wild” porn empire. Francis had said that Wynn wanted to “hit me in the back of the head with a shovel and bury me in the desert.” Wynn said that was a “terrible lie,” and that his friend, the Dalai Lama, taught him to be a man of peace and calm.

The takeaway, we must conclude, is that Wynn has no ties to the Mafia. As for Milken’s other closest friends and business partners, however, there can be no doubt that many of them have ties to the Mafia. As we know from earlier chapters of this series, Milken’s closest business partner is Gene Phillips, who was the central figure in the junk bond merry-go-round that Milken operated in the 1980s, and which was a key component of the larger operation to “bust-out” savings and loan banks. Phillips operated (and still does operate) an outfit called Southmark Corporation, which was the largest recipient of Milken junk bond finance in the 1980s. The largest subsidiary of Southmark in the 1980s, meanwhile, was San Jacinto Savings and Loan, which was “busted-out” with help from such Mafia luminaries as Herman Beebe and Carlos Marcello (the top boss of the New Orleans Mafia).

The man whom Gene Phillips appointed as the chief loan officer of San Jacinto Saving and Loan was named Joseph Grosz. Aside from being a banker, Grosz was a leading mobster, affiliated with the Chicago Syndicate, according to prominent journalist Pete Brewton, who is one of the nation’s leading experts on the involvement of organized crime in the savings and loan crisis. Brewton has also reported that San Jacinto’s parent, Southmark, was “used as a mob dumping ground to buy the investments of mobsters,” including not only Herman Beebe and Carlos Marcello, but also organized crime figure Harry Wood, and Morris Shenker, a former lieutenant of Meyer Lansky, then the most powerful mobster in the nation.

In 2000, Phillips was arrested and charged with manipulating stock prices in league with other leading figures in La Cosa Nostra. More specifically, Phillips was arrested as part of Operation Uptick, which was described by FBI spokesmen as the largest Mafia bust in U.S. history. More than 120 people, all with ties to organized crime, were arrested in Operation Uptick, and FBI officials described them as being part of nationwide “network” of stock manipulators, some of whom had committed various other crimes, which included (according to an FBI statement): “controlling and infiltrating broker-dealers…and employing tactics of violence, including threats, extortion, physical intimidation, and the solicitation of murder…”

Some of the 120 people arrested in Operation Uptick were members of Russian organized crime syndicates, while others were, variously, described by the FBI as having ties to each of La Cosa Nostra’s five major families—Genovese, Colombo, Gambino, Bonanno, and Lucchese. Among the 120 defendants, aside from Phillips, were: Robert “Little Robert” Lino, a capo in the Bonanno crime family; Anthony Stropoli, a soldier in the Colombo crime family; Frank “Frankie” Persico, a Colombo Mafia family capo; Sebastian “Sebbie” Rametta, an associate of the Colombo crime family; Robert Gallo, an associate of the Genovese crime family; and John Black, an associate of the Lucchese crime family.

The DOJ charged that Phillips, in league with various members of La Cosa Nostra, had manipulated the stock of one of his companies, an outfit called Transcontinental. Aside from Phillips, the largest shareholder in that company was Michael Milken. Meanwhile, the Dallas Business Journal reported that Phillips “allegedly met with two associates of New York’s legendary Bonanno organized crime family to discuss a plan to bilk a couple of ‘very friendly’ union pension funds through the sale of inflated stock.” However, Phillips was acquitted on all charges. In addition, most of the other people who were arrested as part of Operation Uptick got off with nothing worse than small fines, though this was the biggest Mafia bust in history, according to then FBI director Louis Freeh (who, of course, is now employed by Wynn and Millennium Management).

That same year, 2000, the media reported that an outfit called Sinex Bank was linked to the Bank of New York scandal, which saw the Bank of New York laundering upwards of $10 billion ($3.9 billion of which passed through Sinex Bank) for organized crime syndicates. The syndicate most closely linked to that scandal was the Mogilevich organization, the leader of which was (and is) a Russian (actually Ukranian, but he is a Russian citizen) named Semion Mogilevich, widely known as “the most dangerous mobster in the world.” What the media did not report was that the money laundering involved a network of brokerages that first invested dirty cash into the “bust outs” of publicly listed companies, with the money coming out partially cleaned as short selling profits that were delivered onwards to cooperative banks, including Sinex Bank and the Bank of New York.

Also linked to that money laundering was a brokerage called Sinex Securities, which was a subsidiary of Sinex Bank. Sinex Securities was controlled by Gene Phillips, though it was registered in the name of his son, Brad Phillips (Sinex changed its name to National Alliance Securities when it was linked to the Bank of New York scandal). SEC filings show that Transcontinental (the Phillips outfit whose largest shareholder was Milken, and which was at the center of the Operation Uptick charges) had placed more than 700 thousand of its shares with Sinex as “collateral for borrowings”. That is to say, a chunk of the cash that went through Sinex was delivered, as collateral, to Transcontinental shareholders. However, neither Sinex nor Phillips were charged with any crime related to the Bank of New York scandal.

With the exception of Mogilevich himself, nobody else of any significance was charged with any crime related to the Bank of New York scandal, and Mogilevich (“the most dangerous mobster in the world”) subsequently hired a lobbyist in Washington. Mogilevich’s lobbyist is William Sessions, formerly director of the FBI. The FBI still lists Mogilevich as one of the “Ten Most Wanted” criminals in the world, but there is no evidence that the FBI has ever tried to arrest Mogilevich, and others in the Mogilevich organization continue to this day to operate openly in the United States.

Some of them, we will see, are key figures in the Milken network.

* * * * * * * * *

Back in the 1980s, another of Milken’s closest business associates was Fred Carr, who, like Phillips, was a central figure in the junk bond merry-go-round that was part of the larger scheme (that had help from BCCI) to “bust out” numerous savings and loans banks. Fred Carr used Milken junk bond finance to seize control of Executive Life, and that financial institution (like most of the other savings and loans that Milken’s closest associates took over with Milken junk bond finance) was subsequently looted and demolished (that is, “busted out”).

Prior to taking control of Executive Life, Carr had been a principal with Investors Overseas Service, which had ties to BCCI, and which was, at the time, the biggest Ponzi scheme in history. Investors Overseas had been founded by a financier named Bernard Cornfield, and later involved a criminal named Robert Vesco, who subsequently fled to Cuba and became involved (according to CIA reports) in trafficking drugs with Cuban dictator Fidel Castro. (Castro later claimed that Vesco had been imprisoned in Cuba).

One of Investors Overseas Services’ key “feeders” (that is, one of the people who “fed” the Ponzi much of its money) was Sylvian Ferdman, a Genovese Mafia courier, who routed money into the Investor’s Overseas racket from clients in South America. Another Investors Overseas feeder was John Pullman, whom the U.S. government had named as a close associate of Genovese Mafia boss Anthony “Fat Tony” Salerno. That’s the same “Fat Tony” who was later conversing with Mulheren in prison, and whom the Scotland Yard report linked to Wynn (The Scotland Yard report, however, was false, according to Wynn, and U.S. law enforcement officials have not accused Wynn of having ties to organized crime).

Another key component of Milken’s junk bond merry-go-round in the 1980s was MDC Global, an insurance and savings and loan company that (see Chapter 6 of this series) had been co-founded by a BCCI subsidiary. MDC Global, meanwhile, controlled a brokerage called Blinder Robinson, which specialized in “busting out” small to medium-sized publicly listed companies. MDC Global, of course, was itself “busted out,” and in 1989, Blinder Robinson was indicted, along with its founder, Meyer Blinder.

Blinder Robinson was known as “Blind’em and Rob’em” because it was not only a key player in a nationwide stock manipulation network, but also among the most crooked brokerages in America. Among the miscreants who manipulated stocks in league with Blinder Robinson were (according to various indictments) Thomas Quinn and Arnold Kimmes, both of whom (as we know from earlier chapters) had operated a number of brokerages linked to BCCI. Quinn, recall, was an associate of the Genovese Mafia family, while Kimmes had been identified in a 1973 FBI report as a “major organized crime figure.”

When Kimmes was arrested, he escaped prison by ratting on Meyer Blinder, who did not escape prison (though he was quickly released). In 2000, Richard Walker, then the SEC’s director of enforcement, gave testimony to Congress in which he described Blinder Robinson as being part of a “network” of brokerages — including D.H. Blair, Rooney Pace, FN Wolf, A.R. Baron, and many others – that were tied to organized crime. Most of these brokerages had been financed by Michael Milken and/or his close associates.

The proprietor of Rooney Pace, which was financed directly by Milken, was Randolph Pace, who was later indicted for running a $200 million stock manipulation scheme with a man named Judah Wernick. Many of the other brokerages mentioned in the SEC’s Congressional testimony – including D.H. Blair, A.R. Baron, and FN Wolf — were financed by Zev Wolfson, a Milken business associate who also financed Millennium, the hedge fund co-founded by Boesky’s prospective assassin John Mulheren.

D.H. Blair was particularly close to Milken. It was founded by Morty Davis, and run with help from Davis’s son-in-law, Lindsay Rosenwald, who served as vice chairman. After Milken went to prison in 1991, one of Milken’s top Drexel Burnham employees, Richard Maio, became president of D.H. Blair. In 2000, D.H. Blair was charged on multiple counts of stock manipulation and forced to shut its doors. To describe the full extent of D.H. Blair’s relations with La Cosa Nostra and Russian organized crime, I would have to bore you with a list of names so long that this story would begin to read like a telephone directory. But to give you just a small sampling, I will mention that the people indicted in just one of the hundreds of stock manipulation schemes perpetrated by D.H. Blair included: Frank Coppa, a capo in the Bonanno Mafia family; Edward Garafola, a soldier in the Gambino Mafia family; Daniel Persico, a capo in Colombo Mafia family; and Ernest Montevecchi, a soldier in the Genovese Mafia family.

After Milken got out of prison, he hooked up again with D.H. Blair’s former vice chairman, Lindsay Rosenwald, who is now one of the most powerful hedge fund managers in America, and perhaps the single biggest player in the world of biotech stocks. As described in my book (“The Dendreon Effect”), Milken and Rosenwald have sought to destroy biotech companies that were developing promising medicines while promoting dubious companies (financed by Rosenwald and Milken) whose medicines were killing people.

Many other powerful hedge fund managers operating today got their start in the 1980s working for Milken-financed brokerages with ties to organized crime. SEC filings and other evidence compiled by DeepCapture show with perfect clarity that all of the hedge fund managers in this network regularly trade in unison, investing in (or, more often, attacking) the same companies.

This does not mean that they have necessarily broken any laws, but, again, press reports suggest that some of the biggest players in this “network” are currently the targets a massive FBI investigation said to be targeting a “network” of financial operators suspected of insider trading. As I mentioned, one of them is SAC Capital’s Steve Cohen, who was investigated in the 1980s for trading on inside information that he allegedly received from Milken’s shop at Drexel. Cohen has been described by BusinessWeek magazine as “The Most Powerful Trader on the Street.”

When Cohen was investigated for trading on inside information that he received from Drexel, he was not yet a famous hedge fund manager, but he was among the select traders who effectively ran Gruntal & Company , a Mafia-tied brokerage that received much of its finance from Michael Milken.

There were just a few other traders who had special partnership agreements with Gruntal, and who effectively ran the place. I will name most of them, beginning with Maurice Gross, who handled the accounts of the Gambino Mafia family. Gross later founded his own operation with a Pakistani trader and former BCCI figure named Mohammad Ali Khan, who (according to a case filed by the New York attorney general) alighted with some of the Gambino family’s cash. This was no doubt much to the dismay of Gruntal CEO, Howard Silverman, who had come to depend on the Mafia’s good graces.

As of 2008, Silverman was running one of the nation’s biggest “dark pool” trading platforms, an outfit that enabled his hedge fund clients to conduct trading in total anonymity. It should be a matter of concern that a guy who once ran a brokerage with ties to the Mafia went on to run a major “dark pool”–especially since experts such as the authors of a report (see Chapter 1 of this series for details) commissioned by the Department of Defense say that such platforms could easily be deployed to do serious damage to the markets.

One of the people Silverman brought in to help run his brokerage – another of the select traders with special partnerships at Gruntal – was a fellow named Felix Sater, who was (and is) a Russian mobster and a member of the Mogilevich organization (controlled by Semion Mogilevich, often described as the “most dangerous mobster in the world”). While still at Gruntal, Sater was charged with stabbing a Wall Street trader in the face with the broken stem of a wine glass (actually, it was martini glass, according to a man who witnessed the attack).

While still at Gruntal, Sater and several other former Gruntal traders founded a brokerage called White Rock Partners. Most of White Rock’s employees were former Gruntal employees, and there is no doubt that White Rock’s partners all had ties to organized crime. In 1996, the FBI discovered a locker at a Manhattan Mini-Storage in Soho that belonged to Evgeny Klotsman, a White Rock principal who was formerly among the select traders who had effectively run the Milken-financed Gruntal & Company. The FBI announced that the locker contained guns and documents that linked Klotsman and Sater to a “global market manipulation and money laundering network controlled by Russian organized crime.”

In 1999, White Rock (renamed State Street Capital Partners) was indicted for orchestrating stock manipulation schemes in league with the above-mentioned D.H. Blair and A.R. Baron (financed by Zev Wolfson) and five members of La Costa Nostra, including a Genovese Mafia soldier named Ernest Montevechi, and Danny Persico, a capo in the Colombo Mafia family (and the son of Alphonse “Allie Boy” Persico, the top boss of the Colombo Mafia family). White Rock’s principals, in fact, included some of the top bosses of the Colombo Mafia family, among them not only Danny Persico (who was arrested, along with Gene Phillips, in Operation Uptick), but also a Colombo Mafia capo named Greg Scarpa, to whom we will return.

According to one of Felix’s White Rock partners (and according to The New York Times, which lent credence to the story), Felix escaped indictment (he was named only as an unindicted co-conspirator in the White Rock case) because Felix and his other partner, Evgeny Klotsman , had ties to the Russian intelligence services, and promised the U.S. government that they could work with Russian intelligence to buy Osama bin Laden’s stockpile of Stinger missiles (thereby preventing Al Qaeda from using the missiles to shoot down commercial airlines).

It should not be surprising that Felix Sater, a member of the Mogilevich organization, would have ties to Russian intelligence, and it is equally unsurprising that he would be capable of cutting a deal with Al Qaeda. As the White House national security staff made clear in August 2011, when the president announced that organized crime had “penetrated” the financial system (thereby inspiring the president to officially declare an “Emergency Order”), the Mogilevich organization has close ties to both the Russian intelligence services and to multiple terrorist organizations, including Al Qaeda.

A 1996 classified FBI report (since made public) noted that the Mogilevich organization was involved in everything from major league market manipulation to prostitution, Afghan heroin, and trafficking in nuclear weapons materials. This is why Semion Mogilevich sits high on the FBI’s list of “Ten Most Wanted” criminals. But, of course, Mogilevich has a good lobbyist (i.e. a former director of the FBI, the outfit that publishes that “Most Wanted” list), and few, if any, members of the Mogilevich organization are presently in jail. Many of them are residents of the United States, and we will see that many of them, including Sater, remain active in the U.S. markets.

Multiple reports from law enforcement, the United Nations, non-governmental organizations in Russia, and the mainstream media in London (distinct from the mainstream media in the United States, which has a peculiar reluctance to publish anything interesting) state unequivocally that members of the Mogilevich organization have been selling conventional weapons to Al Qaeda for many years. On at least one occasion, the Mogilevich organization tried to sell highly enriched (nuclear bomb grade) uranium to Al Qaeda. This is a matter of dispute for some “experts”, but European Union officials confirm that it is true, and there is evidence that members of the Mogilevich organization did, at a minimum, claim in meetings with Al Qaeda operatives in Europe that they could obtain the nuclear materials.

Felix, through Russian intelligence, was prepared to cut a deal with Osama bin Laden, but the CIA balked when Klotsman demanded that the U.S. government pay him and Felix $3 million for each Stinger missile. Nonetheless, Felix escaped doing jail time, and some of his other associates say that this is because he and his Russian intelligence associates promised that their relationship with Al Qaeda would eventually be put to use for the U.S. government. However, if American officials believe Felix is helping the U.S. government, they are certainly mistaken. Indeed, it is a bit unsettling that this dangerous criminal is still on the loose. Not only was Felix once charged with stabbing a Wall Street trader in the face with the broken stem of a wine glass (actually, a martini glass), but Felix has also threatened to kill multiple other people. For example, Felix Sater has threatened to kill DeepCapture founder Patrick Byrne.

According to one of Felix’s White Rock partners (who has written about this in a book called “The Scorpion and the Frog”), Felix also once threatened to kill a short seller named Alain Chalem, who then ran a brokerage called Taluca Pacific in partnerships with DeCalvacante Mafia capo Phil Abramo, who was widely known at the time as “The King of Wall Street.” As we know from earlier chapters of this series, Abramo had formerly been involved with brokerages linked to the BCCI enterprise.

Felix’s partner says that Felix did not ultimately kill Chalem, and we should assume that he did not, but soon after the threat (in late 1999), Chalem was, in fact, murdered, execution-style, in his New Jersey mansion. The FBI has yet to prosecute anyone for the murder, but media reports have suggested that one suspect was Danny Persico, the Colombo Mafia capo who was a partner in Felix’s White Rock Partners. Other media have reported that the FBI believes the murder was related to Chalem’s dealings with Russian organized crime.

In later years, Felix co-founded a real estate and mortgage outfit called Bayrock. As we will see in later chapters, Bayrock played a role in the larger “bust out” of the mortgage markets, but for the purposes of this chapter, I will note that Bayrock’s former CFO, Jody Kriss, has alleged that Bayrock is a massive money laundering operation. In 2009, Kriss filed a lawsuit to this effect, and noted that Felix had once threatened to have him (Kriss) tortured and then murdered.

One of Bayrock’s co-founders was Tevfik Arif. In 2011, Arif was arrested in Turkey after Turkish commandos raided a party that Arif was holding on a yacht that had once belonged to Mustafa Kemal Ataturk, Turkey’s founding president. Arif, a native of Kazakhstan, was arrested along with a small harem of prostitutes and some unnamed government officials from Central Asia. (It is unclear why the commandos raided the yacht; the media has reported that Arif was charged only with illegally hiring prostitutes, a crime that does not usually result in commando raids).

Another Bayrock partner was Tamir Sapir, a billionaire real estate investor whose real estate portfolio was managed by a man named Frederick Contini, whom the government has named as an associate of the Genovese Mafia family. In 2008, Contini entered a secret plea to racketeering. He has also faced charges for stabbing a man in the face with the stem of a broken wine glass. It seems to be the thing to do.

As Tamir Sapir himself has admitted, he spent his formative years running a company that specialized in selling high-tech electronics equipment to KGB operatives in New York. As Sapir has not admitted (though public records show that it is true), Sapir’s partner in his espionage operation was Semyon Kislin, who was (according to the FBI) a “member” of the Russian organized crime syndicate run by Vyacheslav Ivankov, then the top boss of the Russian mafia in the United States. In 2009, Ivankov was assassinated on a Moscow street, but not before admitting that his organized crime syndicate (which had close ties to the Mogilevich organization) had long been employed by the Russian intelligence services.

It is clear that Felix Sater has maintained relationships that he developed while working as a trader for Gruntal & Company. For example, he remains a close associate of SAC Capital’s Steve Cohen, and a man involved with a private investigation of Felix’s Bayrock says that Felix has laundered money for Cohen and other hedge fund managers. (Cohen presumably would deny this, and he has not been charged with any wrongdoing).

Meanwhile, Bayrock has had partnerships with several investment funds, nearly every one of which is controlled either by Milken’s former top employees at Drexel Burnham, or by others among the small band of people who are Milken’s closest associates. One of Bayrock’s partners, for example, is Apollo Real Estate, part of Apollo Management, a private equity fund controlled by Leon Black, who is one of the most powerful investors in America. Leon Black is the son of Eli Black, who was, in the 1970s, the head of United Brands, formerly known as United Fruit, a company that was accused of everything from bribing tin-pot dictators to dealing with La Cosa Nostra and funneling money to Latin American narco-terrorists.

In 1975, Carl Lindner, another of Milken’s closest associates and a key participant in Milken’s junk-bond merry-go-round and “bust out” scheme , used Milken finance to take over United Brands. In the midst of this takeover, Eli Black crashed through a plate glass window on the 44th floor of the Pan Am Building in New York, and fell to his death (the death was reported as a suicide). After this incident, Eli’s son, Leon Black, was named head of mergers and acquisitions at Drexel Burnham, the investment bank effectively controlled by Milken. The two men became friends, and after Milken’s criminal indictments, Black insisted that Drexel defend his friend at all costs. Even after Milken’s indictments resulted in Drexel’s collapse, Black continued to insist that Milken was innocent, and today the two men are close friends, involved together in multiple business ventures (some described in my book). Milken’s son, Lance, is a partner at Apollo, the Leon Black fund.

Another of the most powerful financiers in America (and also among Milken’s closest associates) is Carl Icahn. In the early 1980s, Icahn was the head of the options department at Gruntal & Company (the outfit whose key clients included the Gambino Mafia family, and whose key traders, such as Felix Sater and Evgeny Klotsman, were major Russian organized crime figures). After leaving Gruntal, Icahn started his own investment outfit, funded mostly by Michael Milken and Zev Wolfson (Wolfson being the guy who funded Mulheren and the above-mentioned Mafia-tied brokerages, which were indicted for schemes they perpetrated with La Cosa Nostra and Felix Sater).

As soon as he launched his investment fund, Carl Icahn hired several key employees: Harvey Houtkin, Allen Barry Witz, Gary Siegler, and Alan Umbria. Meanwhile, Umbria, who represented Icahn on the floor of the American Stock Exchange, served as the front-man for the Genovese Mafia in a New York restaurant called Crisci’s, which was featured in the movie “Donnie Brasco”—a movie about an undercover FBI agent who infiltrates the Mob. Umbria was also the Mafia’s front-man in another New York restaurant — The Court of the Three Sisters.

One day in the late 1980s, Umbria’s close business associate walked into The Court of the Three Sisters and found Umbria presiding over a meeting in one of the restaurant’s private rooms. The business associate was asked to leave before he could hear what was discussed at this meeting, but the businessman knows who was in attendance – namely, Alan Umbria, a collection of Genovese Mafia thugs, and Louis Micelli, who was a stock broker until his untimely death in 2005. In addition to being a stock broker, Micelli was a major league narco-trafficker with deep connections to the drug cartels of Colombia, and to a Paraguay cell of Hezbollah, the jihadist outfit that takes its directions from the regime in Iran.

It was the Paraguay cell of Hezbollah that helped Iran blow up a synagogue in Argentina, and for a long time, this cell trafficked in cocaine from bases in Ciudad del Este and other cities in the “tri-border” region where Brazil, Argentina, and Paraguay meet. That region has since come under greater scrutiny, so Hezbollah’s drug kingpins have moved deeper inside Paraguay, but they continue to traffic coke, working with Hezbollah jihadis resident in North America – especially in Toronto, Detroit, New York, and my hometown, Chicago. Hezbollah’s trafficking operation continues to be a partnership with La Cosa Nostra, the Russian mafia, and (yes) some stock brokers, more of whom we will meet later.

* * * * * * * * *

Back to Gruntal & Company, the brokerage that was financed by Milken.

As we know, there were just a few traders who had special partnerships with Gruntal, and who effectively ran the place. In addition, we know, all of these traders had close ties to Milken. One of them, of course, was Steve Cohen, future founder of SAC Capital. Another was the Russian crime figure Evgeny Klotsman. And yet another, of course, was the Russian mobster Felix Sater, who, along with Klotsman, was, in 1996 linked to what the FBI described as a “global market manipulation and money laundering network controlled by Russian organized crime.” Other key figures in that “global market manipulation and money laundering network” were, of course, members of La Cosa Nostra, several of whom were involved, along with Felix, Klotsman and other Gruntal principals, in White Rock Partners.

There were just a few other traders who effectively ran Gruntal, and one of them was Andrew Redleaf, whose wealthy family did a lot of business with Milken’s operation at Drexel. Redleaf got his job at Gruntal on Milken’s recommendation. After leaving Gruntal, Redleaf invested in Sun Country Airlines in partnership with Tom Petters, who was arrested in 2008 and indicted for orchestrating a massive Ponzi scheme in cahoots with Michael Catain, the son of a famous Genovese Mafia enforcer named Jack Catain. Redleaf currently runs a large hedge fund called Whitebox Partners, another of the hedge funds that regularly trade in unison with SAC Capital and others in the network. (Neither Whitebox nor its principals has been charged with any crime).

Another one of the hedge funds in this network is the massive and eminently powerful Cerberus Capital, run by Stephen Feinberg and Ezra Merkin. In the early 1980s, Feinberg was one of Michael Milken’s top employees at Drexel Burnham. In the mid-1980s, Milken asked Feinberg to move to Gruntal & Company to help the others (namely, Russian mafia boss Felix Sater, Evgeny Klotsman, Gambino Mafia broker Maurice Gross, and Steve Cohen, among a few others) oversee Gruntal’s operations, which had become important to Milken’s nationwide network. But aside from the SEC’s investigation of Steve Cohen, regulators did not catch on to Gruntal’s criminality until the mid-1990s, when it was forced to pay the largest fines in SEC history after a series of scandals that saw some of its other managers charged with embezzlement and cooking the books. By then, the traders who really ran the place in the 1980s had moved on to much bigger projects, one of which, we know, was Feinberg’s Cerberus Capital.

In 2006, Mainichi Shimbun, Japan’s most respected business newspaper, reported that Cerberus was tied to the Japanese Yakuza. Feinberg said it wasn’t true and he sued the Japanese newspaper for libel, but there is no doubt that Mafia outfits worldwide are becoming more closely intertwined, and I think we would be justified in asking whether Feinberg came into contact with various Mafia outfits while working for Gruntal & Company (which was effectively controlled by a select number of traders, some of whom were mobsters). Feinberg’s partner in Cerberus, Ezra Merkin, meanwhile, has been charged with civil fraud for his role in the massive “Ponzi” scheme (in fact, it was not just a “Ponzi” scheme, but more on that later) perpetrated by the infamous Bernie Madoff. One of Merkin’s other funds, Ascot Partners, was the second biggest “feeder” to the Madoff criminal operation.

Other big “feeders” to Madoff’s operation were, according to court documents, “made” members of the Mafia. One of them was Ralph Mafrici, who had a joint account with Madoff’s investment fund in the name of Eleanor Cardile, a relative of Madoff’s right hand man, Frank DiPascali. Mafrici was a Genovese Mafia capo who allegedly ordered the assassination of another Mob boss named Albert Anastasia. Since Anastasia was getting his hair cut at the time, the assassination was famously dubbed “The Barber Shop Hit.” In fact, Madoff’s operation had extensive ties to organized crime, as we will see in later chapters, wherein we will also see that Madoff’s brokerage was a key component of the Milken network (and had, in the 1980s been a key component of the larger BCCI enterprise). First, though, let us meet some of the other characters in the “network” that will feature in our later discussion of the 2008 meltdown.

Another of the traders who, in the 1980s, effectively ran Gruntal & Company was Sam Israel, who later became the proprietor of a criminal hedge fund called Bayou. When Israel was indicted in 2008, Bayou was said to be the “biggest Ponzi scheme in history.” Before that, the biggest Ponzi schemes in history had been the Ponzi schemes run by the above-mentioned Fred Carr and Tom Petters. Unfortunately, in December of 2008, Sam Israel’s Ponzi was topped by Bernard Madoff, who turned himself in to the FBI and announced that his “Ponzi” scheme (which absconded with upwards of $65 billion) was bigger.

When it came time for Israel to show up for prison, Israel instead parked his car on a bridge and left a note in the window that said, “Suicide is Painless.” Then he ran away.

After that, Israel had second thoughts and decided to turn himself in. Meanwhile, it emerged that Israel had been in business with Robert Booth Nichols, whom the FBI had identified as a close associate of both the Gambino and Genovese Mafia family and perhaps the key U.S. contact for the Japanese Yakuza. Back in the 1980s, Nichols had been involved with BCCI, and he was tied to a big scandal surrounding a software program called Promis.

The developers of Promis alleged that the software was stolen from them by the U.S. government, which (according to the developers) modified it so that it included a back door feature that would allow the U.S. government to access information on computers that had installed the software. At the time, the media gave considerable credence to this story, and suggested that the U.S. government had sold Promis software to multiple foreign governments. What has not been widely reported is that Mafia-tied Robert Booth Nichols also managed to gain rights to sell Promis software, and Nichols handed those rights to the famous Saudi arms dealer and market manipulator Adnan Khashoggi, who had been a key figure in the larger BCCI enterprise.

As a document obtained by DeepCapture shows, Khashoggi, in turn, licensed the software to Sheikh Khalid bin Mahfouz, then the largest shareholder of BCCI and executive director of the bank. (Recall from earlier chapters of this series that Sheikh Mahfouz was, until his death in 2009, also one of Osama bin Laden’s most important business partners). Mahfouz proceeded to sell this software to major banks around the world, raising the question of whether he used its back-door feature to obtain confidential information from the computer systems of banks that used the software.

The bizarre nature of the business that Nichols and Israel later did together has been reported in an entertaining book called “Octopus: Sam Israel, the Secret Market, and Wall Street’s Wildest Con,” which suggests that Israel was conned by Nichols into believing that he, Israel, could recoup his hedge fund losses by tapping into a “secret market” that was, according to Nichols, controlled by 13 powerful families who also controlled the whole world. The book, of course, casts doubt on the notion that the 13 families actually control a secret market, much less the whole world, and the book reports further that Israel was scammed by Nichols into paying a large sum of money to get his hands on U.S. Treasury notes with a face value worth billions.

The Treasury notes were said to be linked to “Yamashita’s gold,” which was reputed to be gold that had ostensibly been stashed in the Philippines by the Japanese just prior to the end of World War II, and later recovered by a secret U.S. government operation. This, too, seems an unlikely proposition, but there might, in fact, be more to this story than a tale of a hapless hedge fund manager (Sam Israel) who lost millions to a clever con-man (Nichols). Which is not to say that 13 families actually control the world (though, of course, anything is possible), but as court documents obtained by DeepCapture show, Nichols and Israel had, in fact, obtained U.S. Treasury notes valued at $250 billion (as in a quarter-of-a-trillion dollars).

Israel and Nichols told people that their $250 billion in Treasury notes were secured by 2,500 metric tons of gold (serial number SC 3040-20) at the Atlanta Federal Reserve. In fact, physical gold in this quantity was not sitting with the Federal Reserve, but Nichols and Israel said the Atlanta Federal Reserve had issued a serial number in confidence that the gold would be forthcoming, much of it from the Philippines.

More specifically, Nichols and Israel told people that many of their $250 billion in Treasury bonds were secured by “Yamashita gold” that had been located years earlier by then Philippine dictator Ferdinand Marcos, who had moved the gold to a new hiding place in the jungles of Mindanao, an island at the south end of the Philippine archipelago. According to Nichols, Adnan Khashoggi (who was once indicted for laundering money on behalf of Imelda Marcos, then widow of the former dictator) had reported that this gold was now in the possession of the Abu Sayyaf terrorist group on Mindanao, and that his associates were traveling to the Philippines to retrieve the gold.

Nichols later changed the story and said that the $250 billion in U.S. Treasury bonds were related to long-standing U.S. government obligations to the offspring of Chinese nationalist leader Chiang Kai-shek. Specifically, Nichols said the obligations had been confirmed by Tansri Teong, a representative of the Maiwah family, descendents of Chiang Kai-shek who lived in Luxembourg. However, Nichols began telling the Chiang Kai-shek story after Israel was arrested, perhaps to distract investigators from the fact that their scheme revolved primarily around Khashoggi’s assurances concerning the Yamashita gold in the Philippines.

In either case, while Khashoggi had spoken of this gold in the past, many considered the story to be rather implausible. Of course, anything is possible, but it is equally possible that the $250 billion Treasury bonds were a fake. Nonetheless, according to journalist Cheryl Seymour (who first reported parts of this story, though not the information about the gold in the Philippines), bankers around the world were convinced that the Treasury notes were real. And, again, they had a face value of a quarter trillion dollars—which is around 60% of what the U.S. government pays each year in interest on the national debt. It’s also around 60% of the U.S. government’s annual defense expenditures. Moreover, Nichols and Israel circulated the story about this supposed massive obligation just as the U.S. financial system was beginning to weaken.

That is, just as the system was weakening in 2008, Israel and Nichols claimed that they were going to cash in notes that would (if it they were real) effectively bankrupt the U.S. government and fuel panic with regard to any major banks that had liens on Treasury notes. As one banker told Seymour, this “shook the financial foundation around the world.” Other bankers reiterated that statement: Sam Israel’s claim (whether true or false) to have $250 billion in Treasury bonds linked to a stash of gold in the Philippines actually rocked the global financial system (though, of course, there were other activities that did quite a lot more to rock the global financial system).

After Israel was arrested, he and Nichols filed lawsuits against each other. Soon after, in 2009, reports emerged that Nichols had been found dead in Switzerland. People close to Nichols insist that Nichols faked his own death, but the truth remains unknown. It is also unlikely that we will learn whether the U.S. Treasury notes were fake because soon after Nichols and Israel filed their lawsuits, the notes vanished. They had been briefly entered into the public record, but they are not there anymore. There is no doubt, though, that the notes (whether they were counterfeit or not) did exist. And some bankers apparently did take them seriously.

No doubt I will be ridiculed as a conspiracy theorist simply because I have told this true (albeit weird) story, but I have been accused of worse, and I will note that an almost precisely similar story (though with a different set of protagonists) was recently discussed on the floor of the British parliament.

* * * * * * * *

Before he got involved with the bizarre $250 billion Treasury note scheme, and after he left Gruntal & Company, Israel spent time working for one of Michael Steinhardt’s hedge funds. In that capacity, Israel helped Steinhardt corner the market for U.S. Treasuries, posing a threat to economic stability until the government threatened to press criminal charges, convincing Steinhardt to back off.

John Lattanzio, the manager of Steinhardt’s hedge fund, was extremely secretive. There wasn’t much information on him until a court case revealed that Lattanzio once proposed marriage to a Russian hooker and gave her a $289,275 diamond ring. Nothing wrong with that (marriage is a wonderful thing), but the interesting development in this case was that the lovers quarreled, Lattanzio wanted his ring back, and the prospective wife told the judge that Lattanzio had big-time Mafia connections. She also said that Lattanzio “would not hesitate to use [the Mafia] to harm me.” Which is not surprising because the man who launched Lattanzio’s career, Michael Steinhardt, also has big-time Mafia connections.

When it became evident that Steinhardt’s ties to the Mafia might become public, Steinhardt preemptively published a book in which he revealed (as if were no big deal) that his father, Sol “Red” Steinhardt, had done time in Sing-Sing prison because he was, in the words of a Manhattan district attorney, the “biggest Mafia fence in America.” In fact, as noted in earlier chapters of this series, Steinhardt’s father was effectively the chief financial officer for the Genovese Mafia family. In his book, Steinhardt admitted that the first and most important investors in his first hedge fund were: the Genovese Mafia family; Ivan Boesky (Milken’s most famous criminal co-conspirator); and Marc Rich (who then shared office space with Boesky).

In previous chapters of this series, I discussed Marc Rich’s ties to BCCI and the Iranian regime, noting that Steinhardt’s lobbying helped convince President Bill Clinton to pardon Rich from his indictment for illegal trading with Iran. Although Rich was pardoned, he still owes the U.S. government taxes, so he lives in Switzerland, where his palatial home is guarded by a private army of mercenaries.

Rich has done quite a lot of business with companies, such as Highland Capital, that were under the control of Russian organized crime boss Semion Mogilevich, and Rich was linked to the late 1990s scandal that saw Russian organized crime syndicates (most notably the Mogilevich organization) launder more than $10 billion through the Bank of New York. This was the same scandal that involved Sinex, which handled around $3.9 billion of that money, most of it belonging to the Mogilevich organization. Rich was not charged in the Bank of New York affair, and nor were any of the other oligarchs (many of them previously linked to the BCCI enterprise) who were implicated in the Bank of New York affair.

Of course, Steinhardt was also among Milken’s closest associates. Nowadays, Steinhardt runs a big exchange traded fund (ETF) outfit called Wisdom Tree Investments. His partner in that operation is Jonathan Steinberg, son of Saul Steinberg, who was a key player in the junk bond “bust out” scheme that Milken ran in the 1980s. Steinberg used Milken junk bonds to seize Reliance, a giant insurance and financial services firm, which was subsequently looted and destroyed (i.e. “busted out”). Steinberg was not charged with any crime.

As noted in Chapter 6 of this series, a Wall Street Journal story published in 1985 (read it, as it was the last serious investigative report on short-side market manipulation published before the media started describing these miscreants as heroes worthy of our admiration) identified Steinhardt as being part of a “network” of short sellers who regularly attacked public companies using unscrupulous tactics, such as posing as journalists to obtain inside information and conspiring to cut off victim companies’ access to credit.

Among the others identified as being part of that “network” was Jim Chanos, who is now the proprietor of a famous hedge fund called Kynikos Capital, and the head lobbyist for the hedge fund industry. Chanos is also a favorite source for the New York financial media, one reason why the media no longer publishes stories about short-side market manipulation (which does not occur, according to the lobby headed by Chanos). When DeepCapture first started reporting on Chanos’s ties to Michael Milken and associates, Chanos went to lengths to distance himself from Milken, telling journalists that he had identified the fraud at Milken-financed companies.

In an email to some of his associates (the email was obtained by lawyers for the Canadian financial institution called Fairfax Financial, and later obtained by DeepCapture), Chanos outlines the party line, suggesting to the recipients of the email (namely, a long list of Milken-tied hedge fund operators and billionaires, such as Carl Icahn, who owed their careers to Milken) that they communicate the fact that he, Chanos, had been a short seller of companies financed by a “certain junk bond king” (i.e. Milken). But while Chanos, Steinhardt, and others in their “network” were certainly short sellers of Milken-financed companies, their short selling was always beneficial to Milken, and was simply the tail-end of the “bust-out” schemes that I have described, noting that every “bust-out” ends in a wave of short selling.

Indeed, as was revealed in the 1985 Wall Street Journal story, Chanos got his big start by shorting a company called Baldwin United. According to this story, Chanos went so far as to go to Baldwin’s bankers with false information that convinced the bankers to cut off Baldwin’s access to credit. As a result, Baldwin went bankrupt, and Milken got himself named as the advisor to the bankruptcy. According to a well-known and highly respected businessman who was involved in the bankruptcy proceedings, Milken abused his advisory role and ensured that all of Baldwin’s assets were delivered to his cronies at firesale prices. This success brought Chanos to the attention of Michael Steinhardt.

At the time, Chanos (who is now revered by The Journal) was working for a Mafia-tied brokerage called Gilford Securities. In 2000, five Gilford brokers were arrested (along with Phillips) in Operation Uptick, which was, of course, then the biggest Mafia bust in the history of the FBI. Gilford’s brokers were charged with manipulating stocks in league with ten members of La Cosa Nostra and a corrupt New York cop. By then, though, Chanos had left Gilford to start his own hedge fund, receiving his initial finance from Steinhardt (son of the biggest Mafia fence in America) and Steinhardt’s limited partner, Ivan Boesky (Milken’s most famous co-conspirator). Steinhardt’s other limited partner, Marty Peretz, introduced Chanos to Dirk Ziff, another powerful hedge fund manager (Och-Ziff Capital and Ziff Brothers), and for a while Chanos ran his hedge fund out of Ziff’s offices.

While Chanos was launching his hedge fund, future CNBC reporter Jim Cramer (who had once planned to work in partnership with Boesky) was running a hedge fund out of Steinhardt’s offices. Later, Cramer and Chanos were the biggest fundraisers for the political campaign of New York Governor Elliot Spitzer, who had been Cramer’s college roommate. For a time, Spitzer’s favorite hooker, “Ashley Dupree” lived (rent free) at Jim Chanos’s beachside villa. She called him “Uncle Jim.” As Patrick Byrne once said, Ashley should be ashamed of herself for associating with this crowd.

SEC filings make it clear that Chanos regularly trades in league with other hedge funds in the Milken network, and in 2006 they were attacking Fairfax Financial, one of the largest financial institutions in Canada. Fairfax filed a lawsuit against others in his “network,” including SAC Capital, and some of its affiliates, such as Exis Capital and Sigma Capital. (A judge has ruled that SAC Capital should be dropped from the suit, but Sigma and Exis are still in litigation, and Fairfax has appealed the ruling).

Emails obtained by Fairfax’s lawyers make it clear that these hedge funds were using the same tactics (such as trying to cut off the company’s access to credit) that they had been using since the 1980s.In one email, an employee of Exis Capital (a SAC Capital subsidiary) wrote that “the way to get this thing [Fairfax] down is to get them where they eat, like the credit analysts and holders. We’re taking this baby down for the count.” This email was addressed to Jonathan Kalikow, son of Peter Kalikow, who had, in the 1980s, been one of largest investors in Ivan Boesky’s criminal arbitrage fund (or “hedge fund,” as it would now be called).

Kalikow is also a former owner of The New York Post. At the time, the newspapers’ fleet of delivery trucks was controlled by La Cosa Nostra. The operation was run by Bonanno Mafia soldier Richard “Shellack-head” Cantrella. Soon enough, the New York Post delivery fleet began transporting cargos of smuggled weaponry and cocaine, in addition to newspapers. (Kalikow was not charged with any crime, and it is possible he was unaware that his delivery trucks were controlled by the Mob).

At any rate, back in 2006, this network was going to take Fairfax “down for the count.” Fortunately, though, Fairfax was a strong company. Its bankers did not cut off access to credit, and it had the good luck to buy a lot of credit default swaps that massively boosted its profits.

However, two years later, Bear Stearns, Lehman Brothers, and other banks were taken “down for the count.” The public attack on Lehman began in May, 2008 with a speech by David Einhorn, a famous short seller who got his start working for Gary Siegler, one of the first people whom Carl Ichan hired after leaving Gruntal & Company. Einhorn is, for all intents and purposes, Ichan’s boy, and when he gave his Lehman speech, he was standing by Icahn’s side, just as he was standing by Ichan’s side when he initiated previous attacks on public companies.

In his speech and subsequent media tour, Einhorn cited data from a strange firm called The Markit Group to support his exaggerated contention that Lehman had improperly accounted for the value of its property and collateralized debt obligation holdings. See my earlier DeepCapture story, “The Markit Group: A Black Box Company that Devastated Markets,” which notes that this company was founded by a few hedge funds, which the company refuses to identify. It was, in 2008, run by two former Canadian bankers and a developer of Bulgarian property, and seemed to cherry-pick its data, which was provided by a few investment banks that are passive investors in the company.

The Markit Group is wholly without transparency, and yet it essentially dictates perceptions of market prices for collateralized debt obligations and other instruments (including credit default swaps) that are important barometers of health in the banking sector. And during the crisis of 2008, it consistently churned out wildly overstated valuations on credit default swaps, while valuing all collateralized debt obligations based on a sampling of CDOs that included only the worst of the worst (or more specifically, the “synthetic” CDOs that had been designed by short sellers to self-destruct).

The Markit Group’s wildly off-base statistics fueled the panic that helped bring down Bear Stearns, and it was a useful tool for Einhorn, when he initiated his attack on Lehman. That attack was akin to the launch of a new Ipod, with much-hyped speeches and a whirlwind media tour handled by a public relations firm, which presented Einhorn as the boy-wonder fraud-buster who had proved his mettle in an earlier battle with a financial services firm called Allied Capital. (See DeepCapture’s story, “Notes on David Einhorn: The Predator in a Cute T-Shirt,” for a fuller deconstruction of Einhorn’s blatantly dishonest attack on Allied Capital, which was perpetrated in league with Michael Milken and Carl Icahn).

While Einhorn was on his media tour, most of the other hedge funds in his network initiated a short selling attack on Lehman. After Lehman’s collapse, the bank’s creditors filed a lawsuit against the above-mentioned Steve Cohen and Dirk Ziff, alleging that the two hedge fund managers (along with Citadel Investment) helped destroy Lehman with manipulative short selling.

To be continued…Click here to read Chapter 7

Mark Mitchell is a journalist who spent most of his career working as a correspondent for mainstream media publications before joining DeepCapture.com. Mitchell is the author of a recently published book: The Dendreon Effect: How Felons, Con-men, and Wall Street Insiders Manipulate High-tech Stocks, which is available from most major online booksellers.

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The Global Bust-Out Series (Chapter 5): Monzer al-Kassar, Model Citizen

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The Global Bust-Out Series (Chapter 5): Monzer al-Kassar, Model Citizen


This is Chapter 5 of a multi-chapter series. On your right is a Table of Contents to all chapters so far published.

* * * * * * * * *

In this chapter of the Global Bust-Out Series, we learn more about the Bank of Credit and Commerce and International (BCCI) and its business partners (the “larger BCCI enterprise”). Although this might seem like ancient history, it is history that we must not forget because the people who were involved with the BCCI enterprise did not simply disappear when BCCI collapsed in 1991. To the contrary, most of them remained in business and only one BCCI figure (Abbas Gokal) did any jail time. This despite the fact that Manhattan District Attorney Robert Morgenthau had described BCCI as “the largest banking fraud in world financial history.”

Recall, too, that the larger BCCI enterprise did more than operate “the largest banking fraud in world financial history.” It also deployed a variety of schemes to “bust-out” publicly listed companies, some of them among the largest savings and loan banks in the United States. This contributed to the savings and loan crisis that began in the late 1980s, and which ultimately cost American tax-payers upwards of $1 trillion in bail-outs—a portent of bigger and better things to come.

The larger BCCI enterprise “busted out” (i.e. looted and destroyed) other national economies as well, and when a few BCCI principals were brought to trial (they were sentenced to pay nothing more than fines that were fraction of what they had looted), the sentencing judge correctly remarked that the BCCI enterprise had single-handedly “shattered the integrity of the global financial system.”  They had also shattered the integrity of Washington, where officials went to lengths to protect them from prosecution.

Because the BCCI enterprise was never seriously prosecuted (or exposed in the media), the people who had been involved with BCCI and the larger BCCI enterprise continued during all the years that followed not only to remain in business, but also to operate an almost precisely similar enterprise, the only difference being that the enterprise came to include some new and younger players, while people involved with the enterprise innovated new and more destructive financial schemes. More specifically, they innovated new ways to “bust-out” publicly listed companies and national economies.

Indeed, as we will see, they contributed to the great meltdown of 2008, and they are presently threatening to deliver a repeat performance.

It is no overstatement to say that miscreants who were formerly involved with BCCI and the larger BCCI enterprise presently pose the single biggest threat to the stability of the global financial system and our economic well-being.  More than that, they pose a serious threat to the future of our democracy and to political stability in many other nations as well.  This is, in other words, the history that accounts for our present predicament, and it is the history that has (already to the great detriment of our democracy) been covered up by officials in Washington, and ignored by the major U.S. news organizations (some of them owned by people previously linked to the BCCI enterprise).

* * * * * * * * *

The BCCI enterprise, we know, had extensive business with a great many of the most prominent fixtures of the American establishment. That is to say, some of the world’s most destructive financial criminals (i.e. people formerly involved with BCCI and the larger BCCI enterprise) have had extensive business with not only some of the leading lights on Wall Street, but also with numerous politicians and officials in Washington, including nearly every U.S. politician who has ever so much as considered running for president, every politician who has ever served as president, and multiple people who have held cabinet-level positions in Washington.

In earlier chapters of this series, we discussed relationships between the BCCI enterprise and two sitting presidents, Richard Nixon and Jimmy Carter. As has been well-documented elsewhere, the BCCI enterprise also had extensive dealings (the Iran-Contra affair being only one example) with the administration of President Ronald Reagan, and his vice president (later President) George Bush, Sr.

Meanwhile, in the 1980s, various BCCI figures had business with George Bush, Jr., who would, of course, later serve as president. For example, a businessman named James Bath fronted investments that a Saudi sheikh and billionaire named Khalid bin Mahfouz made in an oil company called Harken Energy, which was then controlled by George Bush, Jr. Sheikh Mahfouz was the largest shareholder in BCCI, and he served as executive director of the bank throughout the 1980s. In 1985, Sheikh Mahfouz also purchased (at a premium to the market price) the Texas Commerce Bank Tower, which was then Houston’s tallest skyscraper, from James Baker, who was then President Ronald Reagan’s Secretary of the Treasury, and later Secretary of State under President George Bush, Sr.

We have already seen that key figures in the larger BCCI enterprise later played a key role in delivering the presidency to Bill Clinton. One of those BCCI figures, we know, was an American oligarch named Jackson Stephens. Another was a man named Michael Steinhardt, known as one of the nation’s most prominent hedge fund managers, and also known as the son of Sol “Red” Steinhardt, said by a Manhattan district attorney to be the “biggest Mafia fence in America.” It was at Steinhardt’s urging that President Clinton pardoned a criminal oligarch named Marc Rich, who had previously had extensive involvement with the BCCI enterprise, and who had been sentenced to prison for doing business (through BCCI figures) with the Iranian regime during the 1979-1980 Iran hostage crisis.

We can add to this list of captured presidents our present leader, Barrack Obama, who has faced allegations of shady dealings with a man named Nadhmi Auchi, who is widely regarded as representing the interests of Adnan Khashoggi, formerly one of the most important figures in the larger BCCI enterprise (and one of history’s most destructive financial criminals). We will return to Auchi, but it suffices to say that his business (which continues to be conducted without interference from the Obama administration) has not been good for the country. Hedge fund manager George Soros, who played a key role in delivering the presidency to Obama, also previously had dealings with the BCCI enterprise.

Therefore, it is important for us to remember that the BCCI enterprise (which had extensive links to the Muslim Brotherhood) was notable for having waged a “Financial Jihad” against Western civilization (albeit a jihad waged in partnership with some of the self-anointed leaders of Western civilization). I will remind the reader that Yossef Bondansky, who served a director of the House Task Force on Terrorism from 1988 to 2005, described the BCCI mission as follows: “providing ‘special services’ in support of worthy causes—from laundering money for terrorists, Muslim intelligence services, and mujahedeen; to clandestinely funding deals for conventional weapons, weapons of mass destruction…to shipping around and laundering huge sums embezzled by corrupt leaders.”

As we also know, the BCCI enterprise’s larger mission (i.e. “The Financial Jihad”) was: 1) to build a global financial empire that could compete with Western financial institutions; and 2) to deploy financial weapons of mass destruction to undermine the global financial system that was perceived as being dominated by the West.

Recall that numerous global terrorists (also known as prominent bankers) were directly involved with the larger BCCI enterprise, and among them were Osama bin Laden and his associate, the Blind Sheikh. Osama bin Laden, of course, was later alleged to have perpetrated the September 11 attacks on the World Trade Center and the Pentagon. The Blind Sheikh was alleged to have been involved in the 1993 bombing of the World Trade Center. In addition, we know, the Blind Sheikh (co-founder of Faisal Islamic Bank, which was the most important affiliate of BCCI during the 1980s) issued a famous fatwah suggesting that it would be a good idea for his fellow jihadis (and bankers?) to “tear down the edifices of capitalism” and to “destroy their (our) economies.”  Which, of course, the BCCI enterprise had already done.

In 1991, the same year that BCCI collapsed, we know, a Muslim Brotherhood leader named Hasan al-Turabi appointed Osama bin Laden to help lead a Muslim Brotherhood initiative to replace the BCCI enterprise with a global financial network that would exceed the BCCI enterprise in scope and destructive power. Bodansky (then director of the House Task Force on Terrorism) reported in 2000: “Turabi urgently needed an expert to salvage whatever was possible and rebuild a global financial system [to replace the BCCI enterprise]. By then Osama bin Laden was the most qualified individual in Khartoum to untangle this financial mess. In late summer 1991, Turabi approached bin Laden and asked for help.”

Osama bin Laden agreed to help—and he pursued his task with enthusiasm. By 2000, he had played a key role in helping the Muslim Brotherhood rebuild a global financial network and he had done more than merely replace the BCCI enterprise. He and other Muslim Brotherhood billionaires had built what was, without doubt, one of the greatest financial empires the world has ever known. That financial empire remains in business today—and it is not only one the most powerful financial empires on the planet, but also one the world’s leading transnational organized crime syndicates, involved in all of the activities—from narco trafficking and the smuggling of radioactive materials, to the perpetration of destructive financial crime—that characterized the BCCI enterprise of the 1980s.

In addition, the global financial network/organized crime syndicate that Osama bin Laden helped build, like the BCCI enterprise before it, was operated in partnership with some elements of the American establishment, and with the full connivance of officials in Washington.

* * * * * * * * *

The director of the House Task Force on Terrorism reported (in 2000) that Osama bin Laden built a global financial network in collaboration with what he referred to as “The Brotherhood Group,” a close-knit network of no less than 130 extremely wealthy financial operators in the Persian Gulf states. The director of the House Task Force on Terrorism reported further that: “The key members of the Brotherhood Group have a well-known and established financial presence in the West—sixty five of them have major companies and businesses in the United States.”

In Chapter 2 of this series, we met some of those billionaires, noting that some of them (e.g. Sheikh Mahfouz) had not only been involved with the BCCI enterprise in the 1980s, but had been among the founding fathers of Osama bin Laden’s terrorist organization. In later chapters of this series, we will learn more about the global financial network that Osama bin Laden helped build, but by way of introduction to that discussion, we should meet another former BCCI figure—a man named Monzer al-Kassar—because Monzer al-Kassar veritably epitomized both the BCCI enterprise and the global financial network that Osama bin Laden and other billionaires (including Monzer al-Kassar) built to replace the BCCI enterprise.

Monzer al-Kassar was not officially an executive of BCCI, but he brokered many of BCCI’s most important business relationships (including relationships with leading figures of the American establishment), and he played a key role in many of the initiatives (including the “Financial Jihad”) that made the BCCI enterprise so special. That is to say, Monzer al-Kassar was not only a global terrorist, but also the world’s leading narcotics kingpin, a dangerous mobster, a mercenary, a murderer, an arms dealer, an intelligence asset, a sophisticated financial operator, a billionaire several times over, and one of the world’s most prominent oligarchs, famous for the lavish cocktail parties that he held for the rich and famous.

Monzer al-Kassar was, indeed, one of the most important people in the world.

Therefore, the remainder of this chapter will be devoted to Monzer al-Kassar’s long and amazing career–his immense influence over the course of world events and his many assaults on the stability of the global financial system. And we can begin by examining the contents of every single article that was published about Monzer al-Kassar by the major U.S. news organizations during the years leading up to 2008, when Monzer al-Kassar’s career came to a strange and untimely end.

* * * * * * * * *

The major U.S. news organization did not publish any articles about Monzer al-Kassar.

One exception to this rule was my favorite publication, People magazine, which published fairly regular reports about the fabulous parties—attended by Hollywood celebrities, glamorous billionaires, European royalty, Saudi princes, sheikhs and emirs, not to mention Western diplomats and some of Wall Street’s leading lights–that Monzer al-Kassar hosted at his white, Parthenon-like mansion in the Spanish resort town of Marbella. People magazine described Monzer al-Kassar as “The Prince of Marbella,” and that is how he was known to his powerful and influential friends, all whom were, no doubt, avid readers of People magazine.

Another exception to the rule was Forbes Magazine, which regularly listed Monzer al-Kassar as one of the 50 “Most Powerful” people in the world. However, the Forbes list of “Most Powerful” people didn’t include much information about what, exactly, made those people so powerful. Indeed, Forbes Magazine didn’t even provide its readers with any information about Monzer al-Kassar’s parties in Marbella, and unlike People magazine, Forbes Magazine did not inform its readers as to the purchase prices of Monzer al-Kassar’s sports cars, beautiful lady friends, and cutlery.

To be fair, Forbes Magazine is, in fact, the best mainstream business publication in the United States. It is also the only major news publication to devote space (see, for example, ground-breaking stories by Forbes reporters Nathan Vardi and Liz Moyers) to some of the most important issues (e.g. manipulative short selling and the involvement of organized crime) affecting the markets. In addition, aside from its list of “Most Powerful” people, Forbes Magazine did publish one story that at least mentioned Monzer al Kassar’s name in passing, noting that he had ties to Osama bin Laden.

Aside from that, though, the major U.S. news organizations reported nothing about Monzer al-Kassar prior to 2008, when Monzer al-Kassar’s career came to a strange and untimely end, at which point the U.S. media published a few stories about him, most of those stories being false. Not just false, but false to the extent that the major U.S. news organizations completely covered up the true (and scandalous) story of Monzer al-Kassar. Indeed, this cover-up was a conspiracy of significant proportions, or at least it was a cover-up to rival the media’s cover ups of just about every other major scandal in recent history.

That is not to say that the media has been a witting accomplice to any conspiracy. To the contrary, the American media has no wits. It is also, of course, not to say that the media has ever investigated or published any story about a conspiracy. Most major media journalists simply have no time to do anything other than take dictation from official government spokesmen and other professionals in the fields of black propaganda and disinformation. (I confess, I was once a mainstream journalist, and in that capacity, I unwittingly authored plenty of disinformation and devious party lines, though I did, at least, manage to have myself permanently ousted from that profession, thereby saving myself, were it not for so many other sins, from the eternal fires of hell).

At any rate, it is inadvisable to rely on the major U.S. news outfits for stuff like…news.

Fortunately, there are other sources of information, and there is, indeed, a vast amount of information about Monzer al-Kassar contained in the following: 1) mainstream publications of just about every civilized nation other than the United States;  2) a variety of documents that can be found in the public record; 3) some excellent American blogs (see, for example, BoilingFrogsPost.com, whose authors include former U.S. national security officials turned whistleblowers, all of whom are known to rant about the abysmal state of the American media).

In addition, many of the more salient facts concerning Monzer al-Kassar can be found in books by (among others) the following people: former U.S. Department of Justice prosecutor John Loftus, former Defense Intelligence Agency employee Lester Coleman; former Israeli intelligence official Ari Ben Menashe; former Israeli intelligence official Victor Ostrovsky; and Patrick Seale, the most eminent biographer of a terrorist named Abu Nidal, who was sponsored by Monzer al-Kassar. In addition, former Israeli intelligence official turned private investigator named Juval Aviv has revealed some important information about Monzer al-Kassar.

The best book on Monzer al-Kassar is a book written in the German language, and aptly titled “Des Pates des Terrors” (translation: “The Godfather of Terror,” which is different from “The Prince of Marbella”). This book (available on Amazon to anyone who can read German) was authored under a pseudonym by a German intelligence official who quotes extensively from the files of the German intelligence services, Interpol, and other intelligence agencies that tracked (and, in some case, employed) Monzer al-Kassar. There exists an English-language translation of this book, but it has been acquired by the U.S. government, which seems disinclined to allow the translation to be published in the United States.

In other words, so far as the English-speaking citizens of the U.S.A. are concerned, this book has not yet been burned, but it has, effectively, been banned.

We will get to the story of Monzer al-Kassar in a moment (and this might seem like an overly long prelude to that story) but it is first necessary to stress that every one of the above sources has been smeared in one way or another by official U.S. government spokesmen and major U.S. news organizations. These smears are always ad hominem—the facts themselves are never addressed. And others who have attempted to relate some of the facts have been accused of weaving outlandish conspiracy theories. But because this is such an important story, it must be stressed: all of the above sources have (independently of each other) related many of the same facts, and I myself have been able to confirm certain facts to be true.

There is, moreover, a near consensus among just about everyone who has investigated Monzer al-Kassar (including many earnest employees of the U.S. government’s national security agencies, though not the official U.S. government spokesmen) as to the broad outlines of the Monzer al-Kassar story.

The story goes like this:

Monzer al Kassar was the son of a Syrian government official and a close confidant of both Hafez al-Assad, who served as president of Syria from 1971 to 2000, and Bashar al-Assad, who replaced his father as president in 2000. As of this writing in 2013, Bashar al Assad is still president, but his army is fighting “Arab Spring” rebels who are (with the support of the U.S. government and its allies) attempting to overthrow the government of Syria. The “Arab Spring” rebels have ties to the Muslim Brotherhood and associated jihadi terrorist organizations, some of which were sponsored by the Syrian government until 2008, at which point the jihadi outfits (and Washington) turned on the Syrian government, and Monzer al Kassar’s career came to strange and untimely end—but we are getting ahead of ourselves.

In the beginning, Monzer al-Kassar and his family, in partnership with, and with the protection of the Syrian government, became involved in the heroin trade out of Syria and Lebanon. By the 1980s, Monzer al-Kassar was not only the world’s leading narcotics kingpin, but also a global terrorist and the proprietor of an organized crime syndicate that was closely intertwined with the operations of leading terrorist organizations (which is to say that the terrorists were also key figures in Monzer al-Kassar’s transnational organized crime syndicate).

Among the terrorist organizations intertwined with Monzer al-Kassar’s organized crime (and terrorism) syndicate were several that had been founded by people who had once been key figures in the Palestinian Liberation Organization (PLO), but who had split with PLO leader Yasser Arafat to found their own, more radical, terrorist outfits. These included: the Palestinian Liberation Front; the Popular Front for the Liberation of Palestine–Special Command (PLFP-SC); the Popular Front for the Liberation of Palestine–General Command (PLFP-GC); and Fatah, Revolutionary Council (also known as Black September and the Arab Revolutionary Brigades), whose leader, Abu Nidal, was the world’s most notorious terrorist before Osama bin Laden achieved notoriety in the 1990s.

Monzer al Kassar’s closest friend (going back to their childhoods together) was Abu Abbas, leader of the Palestinian Liberation Front. Meanwhile, Monzer’s brother, Ghasshan, was a top official of the PLFP-SC, and various other members of Monzer’s family were members, at various times, of the PLFP-SC and the other PLO splinter outfits (i.e. all of the above). In addition, Monzer al-Kassar, in his capacity as a Syrian intelligence asset, played an important role in directing the operations of at least one faction of Hezbollah, the world’s largest terrorist organization, based in Lebanon, with operations in numerous nations across the globe, most notably in Latin America and Africa, though Hezbollah also operated (and still does operate) quite openly in a few major U.S. cities, such as Detroit and my hometown, Chicago.

All of the leaders of these terrorist organizations, and Monzer al-Kassar himself, had close ties to the Muslim Brotherhood, and in 1991, they all became key figures in the Islamist International, the outfit that was founded that year by Muslim Brotherhood leader Hasan al-Turabi, and whose chairman, of course, was Osama bin Laden. This runs contrary to the official party line that Osama bin Laden’s organization and the Muslim Brotherhood were comprised entirely of Sunnis who could not tolerate other Muslim sects. The truth is that the Muslim Brotherhood membership includes Muslims of many different sects, and the Islamist International, which was founded by the Muslim Brotherhood, included some people who were not even Muslims. For example, the leader of the PLFP-SC, George Habash, was a Marxist and an atheist.

Some accounts suggest that Hezbollah, which is a Shiite outfit, may even have been founded as a Shiite wing of the Muslim Brotherhood, and it is certainly the case that Hezbollah was a key component of the Islamist International. In addition, Hezbollah has carried out at least one violent terrorist attack (in 1996, on a building housing U.S. troops in Saudi Arabia) on the orders of Osama bin Laden. Presently, Hezbollah claims to have sided with the Syrian government against the Muslim Brotherhood and Al Qaeda (i.e. Muslim Brotherhood) rebels in Syria, but for reasons to be discussed, there are excellent reasons to believe that Hezbollah and the rebels share a common interest in fomenting chaos in that country.

Monzer al-Kassar, meanwhile, ascribes to Marxist tenets, and he might properly be regarded as an atheist, though he was born a member of the Alawite sect. According to most accounts, Sunni Muslims regard the Alawites as heretics, which might be true, but such theological differences are largely academic. For the purposes of our discussion, it is enough to know that the heretics, atheists, Sunnis, Shiites, and other figures in the Islamist International (one of them being Monzer al-Kassar) were united behind what a famous Muslim Brotherhood document (authored upon the founding of the Islamist International in 1991) described as a “Grand Jihad in eliminating and destroying the [sic] Western civilization from within…”  Perhaps more important, they were all businessmen and criminals who understood that there was money to be made by undermining not just Western civilization, but all civilization, as that concept is universally understood by law-abiding people in every nation of the world.

As for Monzer al-Kassar, he was a key figure in the jihad, as were the other terrorists in his organized crime syndicate. In addition, of course, he played a key role, along with Osama bin Laden and other Muslim Brotherhood leaders, in building a global financial network to replace the BCCI enterprise. And one purpose of that global financial network was to launder money that Osama bin Laden, Monzer al Kassar’s organized crime syndicate, and other key figures in the Islamist International, including a jihadi warlord named Gilbuddin Hekmatyar, were making from the trafficking of heroin and other narcotics.

As the director of the House Task Force on Terrorism (in 2000) reported in 2000: “Hekmatyar was getting ready to ship drugs from Afghanistan to the West and divert profits from this drug trade to support the fledgling terrorist networks [of the Islamist International]. Another system of money laundering was required for this. Bin Laden adopted a twin-track approach [using standard money laundering techniques through major banks and brokerages]…”

During the 1980s, Hekmatyar had received the greater share of the weapons and money that the U.S. government supplied for the mujahedeen’s war against the Soviets. The official party line from Washington has it that U.S. support for Hekmatyar was a basically innocent blunder, with naïve U.S. government officials unaware that Hekmatyar was not only the most virulent and anti-American warlord in Afghanistan, but also one of the world’s leading narcotics kingpins. However, many researchers (see, for example, the work of University of California-Berkley professor Peter Dale Scott) have provided ample evidence that U.S. officials were, in the 1980s, well aware that Hekmatyar and other jihadi warlords who received support from Washington were leading narco-traffickers.

By the end of the 1980s, more than 80 percent of the world’s heroin traffic originated (and still does originate) from just a few countries, namely Afghanistan, Pakistan, Syria, and Lebanon. In addition, most of that heroin was (and still is) supplied by a relatively few people, namely the leading jihadi warlords, terrorists, and organized crime bosses in those countries. Throughout the 1980s, most of these narco-traffickers were closely involved with the BCCI enterprise. And the role of BCCI was not merely to launder money for these narco-traffickers. During the 1980s, many of those narco-traffickers (e.g. Monzer al-Kassar) were themselves key figures in the larger BCCI enterprise.

Meanwhile these same narco-traffickers, along with other key BCCI figures, formed business relationships with many of the world’s leading transnational organized crime syndicates, including the Sicilian Mafia, La Cosa Nostra, and the Columbian drug cartels, all of which were themselves closely involved with the BCCI enterprise. In addition, as of the 1980s, there existed a global network of brokerages linked to the BCCI enterprise, and many of these brokerages were operated in partnership with leading organized crime figures. Later chapters of this series will examine these brokerages in greater detail (not least because their proprietors presently operate some of the biggest brokerages in the world), but for now it is enough to know that they specialized in perpetrating so-called “pump and dump” schemes.

See Chapter 1 of this series for fuller description of pump and dump schemes, but the short of it is that the objective is to first “pump” up the stock price of a public company, and then “dump” the stock into the market while attacking the stock with manipulative short selling. Sometimes the companies are fraudulent companies to begin with. Sometimes they are legitimate companies until such time as miscreants gain a degree of control over the company and/or its stock price. Either way, the end result is the same: the target company is “busted out” (i.e. destroyed), with the miscreants making most of their money on the “dump” end of the equation.

For reasons that are discussed in Chapter 1, the “bust-outs” of public companies not only undermine the financial system (one goal of the “Financial Jihad), but they have the added advantage of being a highly effective way in which to launder money for terrorists, drug traffickers, and other organized criminals.

Therefore, it is not surprising that some terrorist organizations, jihadi warlords, drug traffickers, and organized criminals were involved with the global network of brokerages that were linked to the BCCI enterprise in the 1980s. The terrorist organizations and jihadi warlords had grown immensely wealthy from the drug trade, and, of course, they used some of this money to fund their wars and violent terrorism. However, many terrorists and warlords were also businessmen involved not only in the trafficking of drugs, but also in the full panoply of crimes that we normally associate with transnational organized crime syndicates.

In addition, many of these terrorists were sophisticated financial operators who not only laundered money through BCCI, but also were among the BCCI figures who, along with the larger BCCI enterprise, perpetrated the various crimes that ultimately “shattered the integrity of the global financial system.”

And again: one of the most important of these BCCI figures was Monzer al-Kassar.

* * * * * * * * *

As already mentioned, Monzer al-Kassar was, as of the 1980s, the world’s leading narco-trafficker. In the mid-1980s, Monzer al Kassar formally merged his drug trafficking cartel (which, of course, included leading terrorist organizations) with the operations of the Ochoa family, co-founders of the Medellin cartel in Colombia. Monzer-al Kassar had, to some extent, also integrated his narco-trafficking and associated banking operations with those of other leading syndicates, including the Sicilian Mafia, the Corsican Mafia, Turkish and Israeli syndicates, the leading syndicates and jihadi warlords in Afghanistan and Pakistan, the multiple crime families collectively known as La Cosa Nostra, and others to be discussed.

All of these syndicates operated independently of each other, and all of them, to some extent, competed with each other, but they also collaborated to such an extent that it is proper to describe them as having established what amounted to a global cartel that controlled much of the world supply of heroin, coke, crack, hashish, pot, pills, and other drugs, much as the big oil companies of the early 20th century were independent businesses that competed with each other to some extent, but also collaborated to establish a cartel that effectively controlled the global supply of oil.

Meanwhile, of course, Monzer al-Kassar, being a global terrorist, was, along with others in his syndicate, linked to multiple terrorist atrocities that killed hundreds of people, including many Americans.

Some of these terrorist attacks were perpetrated to advance political agendas (i.e. in the name of jihad, Karl Marx, the destruction of Israel, socialism, the destruction Lebanon, and various other agendas, depending on the occasion), but we will see that at least some of the terrorist attacks were perpetrated for money. That is to say, terrorism was another line of business, and the terrorists in Monzer al-Kassar’s syndicate were more than happy to rent themselves out as mercenaries to the highest bidder, whatever the bidder’s politics or religion might be.

At other times they perpetrated violent acts of terrorism to create conditions that were more conducive to their other criminal enterprises, especially the trafficking of drugs out of Afghanistan and Lebanon (where the narco-trade expanded exponentially as the nation descended into chaos during the 1980s, with much of the chaos caused by Monzer al-Kassar and his terrorist associates). Meanwhile, Monzer al-Kassar and his global crime syndicate (including those terrorist organizations), along with the syndicates that cooperated with Monzer al Kassar to control the drug trade, were involved together in other lines of business, including grand theft auto, sex slavery, murder for hire, and the trafficking of liquor, cigarettes, sophisticated weaponry, radioactive materials, and components for the manufacture of nuclear bombs.

In addition, of course, Monzer al Kassar and associated organized crime syndicates were involved together in the perpetration of destructive financial crime. Not only were Monzer al-Kassar involved with the global network of brokerages linked to BCCI, but Monzer al-Kassar (often in league with associated organized crime syndicates) perpetrated everything from securities fraud and market manipulation to mortgage fraud, Ponzi schemes, and sophisticated derivatives scams. All of which is to say: Monzer al-Kassar was precisely the sort of fellow one would expect to be employed by the government of the U.S.A.

And Monzer al-Kassar was employed by the regime in Washington. Or perhaps it is more correct to say that the regime in Washington was employed by Monzer al Kassar.

In any event, officials in Washington and Monzer al Kassar’s syndicate (including some of those terrorist organizations) had a profitable business relationship, going back to at least the late 1970s, when an American official named Edwin Wilson cut a deal with Monzer al Kassar that saw Monzer supplying American weapons to the regime of Moammar Qadaffi in Libya, while Wilson and other U.S. government officials (all of whom, notably, were also operating private businesses that profited from these deals) were supplying American troops (recruited from within the ranks of the American military) to help the Qadaffi regime train the PLFP-GC, one of the terrorist organizations in Monzer al-Kassar’s syndicate.

In 1981, Wilson was indicted for supplying explosives (indeed, he supplied almost the entire existing stockpile of C-4 military explosives then available in the United States) to the Qaddafi regime, at which point the regime in Washington denied that Wilson was an employee of the U.S. government, and also denied that Wilson had been acting in any official capacity, much less at the direction of Washington. The major U.S. news organizations, taking their cues from U.S. officials, reported that Wilson was a “former” U.S. government employee who had gone rogue, and that the U.S. government had nothing to do with Wilson’s dealings with Qaddaffi, terrorists, and Monzer al-Kassar.

It is important for us to specifically identify the U.S. officials who were most closely involved in the investigation of Wilson and the party line that was fed to the media, because these same officials have been the central players in numerous other events that will feature in later sections of the story that you are now reading, and these events will pertain to our later discussion of the global financial system in its present and deteriorating condition. There are, in fact, numerous officials whom we need to discuss in this context, but for now it will suffice for the reader to remember three names: Oliver “Buck” Revell, who was the FBI’s chief of counter-terrorism; a DOJ and FBI official named Robert Mueller (who is now director of the FBI); and Lindley Devecchio, who was chief of the FBI’s organized crime task force, and who led the FBI’s investigation of Wilson.

These were the officials who reported that Wilson was a “former” U.S. government employee who had gone rogue, and that the U.S. government had nothing to do with Wilson’s dealings with Libya and Monzer al-Kassar. And when Wilson attempted to correct the record, the FBI and the DOJ (at the direction of those same three officials) went to all lengths to discredit and destroy him. As a result, Wilson was sentenced to prison in 1982, and he remained in jail for the next 22 years, all the while protesting that his activities had been conducted in his capacity as an employee of the U.S. government, and all the while filing Freedom of Information Act requests for documents that, he said, would prove that he was telling the truth.

Ultimately, Wilson obtained enough documents to convince a judge that he was, in fact, telling the truth, and in 2004, the judge ordered his release from prison. Since then, it has been established that Wilson (who died in 2012) had, in fact, been employed as an agent of the U.S. government, and that many of his dealings—including his dealings with Monzer al-Kassar and associated terrorists—had been sanctioned by officials working at the highest levels of government in Washington. It has also been established that the Department of Justice and the FBI, among other U.S. government agencies, covered up the truth regarding Edwin Wilson and his dealings with Monzer al-Kassar.

In addition, it is now more than evident that other officials of the U.S. government continued to maintain increasingly profitable business relationships with Monzer al-Kassar in all the years following Wilson’s indictment in 1981. For example, not long after Wilson was sentenced to prison, the U.S. government hired Monzer al Kassar to work with a man named Bill Buckley, who was then the chief of the CIA station in Lebanon. Buckley seems to have been an honorable man, and it is possible that he was unaware of Monzer al-Kassar’s pedigree, but one day he found himself instructed by his superiors to work with Monzer al-Kassar to devise a scheme to kidnap militia leaders who were operating in Lebanon and Syria. As it happened, though, that plan was not carried out and Buckley himself was kidnapped by terrorists.

More specifically, Buckley was kidnapped by a Hezbollah faction that took its directions from none other than Monzer al-Kassar. And soon after kidnapping Buckley, the same terrorists kidnapped many other Americans. But that did not deter Washington from continuing to work with Monzer al-Kassar. To the contrary, Monzer al Kassar became the single most important partner of the U.S. government in the many business dealings and machinations that later culminated in what is now known as the Iran-Contra scandal. That scandal was, in fact, largely covered up by the major U.S. news organizations and by top officials in Washington—including the same DOJ and FBI officials who covered up the earlier Wilson scandal. However, much of the truth can be found elsewhere in the public record. We are especially indebted to a former DOJ prosecutor named John Loftus for some of the key facts that follow, though the facts come from a variety of sources (including those named above), and the reader is encouraged to seek out the dozens of books about the Iran-Contra scandal for a fuller picture.

In any event, it is not the purpose of this story to discuss the Iran-Contra scandal at length, but the short version is that somebody hatched a plan for the U.S. government to sell (through brokers) sophisticated American weaponry to the regime in Iran, ostensibly in exchange for the Iranian regime’s agreement to secure the release of the Americans (including Bill Buckley, the former CIA chief in Lebanon) who had been taken hostage by terrorists—namely Hezbollah terrorists, all presumed to be proxies of the Iranian government. Meanwhile, U.S. officials, having sold the weapons to the regime in Iran, used some of the proceeds to illegally fund and arm the so-called “Contras,” a collection of rebel armies that were fighting to overthrow an ostensibly Marxist regime in Nicaragua.

That, anyway, is the official story as it has been related by the major U.S. news organizations, which have provided little in the way of detail, and which have left the American public with only a vague awareness that the Iran-Contra scheme involved some mild skullduggery on the part of a few otherwise patriotic American officials who desired nothing more than to secure the release of American hostages and secretly lend support to rebels who were fighting the Communist menace in Latin America. There is, however, more to the story—and it is principally a business story. It is a story about a dubious cast of characters who made a boatload of money. That is to say, it is story about (what else?)—the famous and ever-present BCCI enterprise. Indeed, the Iran-Contra scheme was one of BCCI’s most successful initiatives.

* * * * * * * * *

It is difficult to discern through the haze of disinformation who, precisely, masterminded the Iran-Contra scheme, but most accounts cite the involvement of the Saudi billionaire and BCCI figure Adnan Khashoggi and an Iranian arms dealer named Manucher Gorbinafar. They were no doubt at the center of the Iran-Contra dealings, but so too was Monzer al-Kassar, and it was certainly Monzer al-Kassar who earned the greatest profits from the Iran-Contra dealings, though the larger BCCI enterprise (and multiple U.S. government officials who were also proprietors of private companies that were in business with Monzer al-Kassar and the larger BCCI enterprise) profited as well.

In addition, there is no doubt that U.S. officials regarded Monzer al-Kassar not only as their most important business partner, but also as their point man for the political machinations that were necessary for the proper effectuation of the Iran-Contra disaster.

Indeed, Monzer al-Kassar handled every end of the operation, and from every end of the operation, he earned a massive profit for himself and his partners. It was Monzer al-Kassar who sold most of the American weapons that U.S. officials supplied to the Iranian regime, and it was Monzer al-Kassar who sold most of the weapons that U.S. officials supplied to the Contras in Nicaragua. In supplying weapons to the Contras, Monzer al-Kassar also expanded his drug empire, with the Contras and associated drug cartels supplying him with ever greater quantities of cocaine, and the coke smuggled into the United States on the same airplanes that were transporting weapons to the Contras in Latin America. The planes would fly into Latin America with weapons, and return to the U.S. loaded with coke.

All of this business was transacted in partnership with other BCCI figures as well, and much of Monzer al-Kassar’s arms dealing was conducted in partnership with not only BCCI, but also with U.S. government agents who had established private companies as proprietaries of the U.S. government (though the government agents themselves, and not the taxpayers, pocketed the profits from these companies). Monzer al-Kassar was also the man who handled the vast money laundering operation associated with the Iran-Contra dealings, and most of that money laundering was transacted through BCCI.

Meanwhile, of course, BCCI was conspiring with a cast of criminal oligarchs and mobsters to “bust out” major savings and loan banks in the United States. Some of the loot from those “bust-outs” was used to finance the Iran-Contra dealings, and a lot of that loot ended up in the pockets of Monzer al-Kassar. Still greater sums of the money that BCCI looted from the global financial system was, of course, also delivered to the world’s leading terrorist organizations, including the terrorist outfits that were intertwined with Monzer al-Kassar’s organized crime syndicate.

At the center of all this activity, we know, was Adnan Khashoggi.

At Khashoggi’s urging, U.S. officials appointed Monzer al-Kassar as the point man in the supposed effort to secure the release of the U.S. hostages (i.e. the hostages whose capture by terrorists justified the massive Iran-Contra enterprise to begin with). And, naturally, the terrorists had originally taken the American hostages on the orders of…Monzer al-Kassar.

Unsurprisingly, most of those hostages were not released, and indeed, the more weapons that U.S. officials delivered (mostly through Monzer al-Kassar and his BCCI associates, though others arms dealers were involved) to the Iranian regime, the more hostages were taken. Ultimately, a few hostages were released, but the most important of them (including Buckley, the CIA chief) were tortured and killed.

There is, moreover, some doubt as to the sincerity (or at least, some doubt as to the wisdom) of the U.S. officials who believed that they would secure the release of the hostages by supplying the Iranian regime with weapons because the Iranian regime had no control over the Hezbollah terrorists who had taken the hostages. The terrorists who took the hostages all belonged to a Hezbollah faction that took its orders not from Iran, but rather from Syria, and more specifically, from one of Syria’s most important intelligence assets…Monzer al-Kassar.

Meanwhile, Monzer al-Kassar was employed by the Soviet intelligence service, the KGB, and he was, of course, keeping the KGB apprised of Washington’s dealings with the Iranian regime and the Contras. In addition, Monzer al-Kassar and others in the BCCI enterprise, including Adnan Khashoggi, were helping the Soviets in their efforts to prop up the ostensibly Marxist regime in Nicaragua (i.e. the regime whose existence ostensibly justified the massively profitable enterprise to support the Contras by selling them guns, and buying their cocaine for resale at marked up prices in the United States).

Some chroniclers of these machinations, including former U.S. prosecutor John Loftus and the author of the German-language biography of Monzer al-Kassar, suggest that Monzer al Kassar had also taken “deep capture” to new levels—i.e. that he not only had lucrative business relationships with U.S. officials, but had also blackmailed some top U.S. officials. That is, he threatened to expose everything from their early involvement in the Edwin Wilson affair and the illegal scheme to kidnap people in Lebanon, to the subsequent Iran-Contra adventure. And to avoid exposure, officials in Washington were obliged to not only provide full protection and immunity to Monzer al-Kassar and his organized crime syndicate, but to pursue policies that were favorable to the Palestinian terrorist movement.

It might or might not be true that U.S. officials were blackmailed, but there is a vast body of evidence to support the contention that the regime in Washington did, in fact, afford its protection to not only Monzer al-Kassar but also the terrorist outfits that were part of his organized crime syndicate. This first became apparent in 1985, at the height of the Iran-Contra dealings, when Monzer al-Kassar was linked to multiple terrorist atrocities, including the hijacking that year of a luxury cruise ship called the Achille Lauro. Multiple foreign governments and news organizations reported that Monzer al-Kassar had sponsored the hijacking, and that the hijacking was perpetrated by Abu Abbas, leader of the Palestinian Liberation Front (and Monzer al-Kassar’s closest friend since childhood).

After the Palestinian Liberation Front terrorists seized control of the ship, they killed an elderly and handicapped American passenger named Leon Klinghoffer, and dumped his body into the sea. Subsequently, the ship docked at Port Said, in Egypt, and from there the terrorists were able to negotiate safe passage for themselves on a flight that was scheduled to land in Tunisia. The flight was reportedly intercepted by U.S. fighter jets, which forced the plane to land at Sigonella, a NATO base in Italy. But for some reason, Abu Abbas, who had been on the plane, was not arrested when he landed at the NATO base. And for reasons that were never explained, the Italians permitted Abu Abbas to board another civilian passenger flight, and this flight reached its scheduled destination in Yugoslavia.

The regime in Washington publicly requested the extradition of Abbas from Yugoslavia, but U.S. officials did not pursue their request with any particular enthusiasm, and Abu Abbas remained a free man. Abbas later ended up in Iraq (then an American ally) but still he was not arrested.

Some years later, Ari Ben Menashe, a former top Israeli military intelligence official, among others, alleged that the Achille Lauro hijacking and other terrorist attacks had been paid for by Israeli intelligence as part of an ongoing propaganda campaign aimed at gaining sympathy for Israel’s sometimes brutal war against the Palestinians. Meanwhile, a large cast of Israeli officials and arms dealers were involved with Monzer al-Kassar in the Iran-Contra dealings.

* * * * * * * *

Some have cast doubt on Ari Ben Menashe’s claims regarding the Achille Lauro, but there is no doubt the Israeli government was at the time funding and even arming some of the terrorist outfits that were part of Monzer al-Kassar’s crime and terrorism syndicate. The Israelis sponsored these terrorist outfits (most of them PLO splinter groups) believing (correctly as it turned out) that the more radical terrorists would harass and suck support away from Yasser Arafat and the mainstream PLO, which the Israeli government regarded as Enemy Number One.

For the same reasons, the Israelis (and their allies in Washington) sponsored the Muslim Brotherhood, and in 1988, they began to sponsor Hamas, which had been founded that year by the Brotherhood. Both the Muslim Brotherhood and Hamas, of course, had stated that their most important mission was to eliminate the state of Israel, but Israel anticipated (correctly, as it turned out) that the Brotherhood and Hamas would not only steal support from the PLO, but also destabilize countries (e.g. Egypt, Tunisia, Libya, Syria, Jordan) that Israel considered to be enemy states.

Presently, Israel is expressing concern that the Muslim Brotherhood has seized power in some of those countries, but Israel’s prior support for the Brotherhood and Hamas is not surprising, and many analysts suggest that there was more to it than just a desire to derail the PLO and enemy states. Indeed, there is much to give credence to reports that right-wing Israeli politicians and the more radical Palestinian terrorist organizations agree that maintaining the status quo of low-intensity conflict is not just politically advantageous, but also financially lucrative for both Israeli politicians and the Palestinian terrorists.

One reason to believe this might be the case is related to the emergence of powerful Russian organized crime syndicates that accompanied the collapse of the Soviet Union, beginning in the late 1980s. Many leaders of these Russian organized criminals set up shop in Israel and obtained Israeli citizenship, and as detailed in diplomatic cables made public by Wikileaks, the major Russian organized crime syndicates quickly became among the largest funders of the same Israeli politicians who have provoked conflicts in Palestine and Lebanon. Those Russian crime syndicates were (and are) also important partners (involved in all of the lines of business already discussed) of the Palestinian terrorist outfits, including those that were part of Monzer al-Kassar’s organized crime operation.

The Russian mobsters are, in addition, big players in Israel’s flourishing “homeland security” industry, which profits from selling services that purport to provide Israel with protection from those same terrorists. The homeland security businesses (and many other businesses, including narco-trafficking and financial crime), of course, benefit from the continuing state of low-intensity conflict and chaos in Palestine and neighboring Lebanon. They also benefit so long as the Israeli government remains focused on conflict, rather than cracking down on organized crime.

Beginning in the 1980s, Monzer al-Kassar himself had developed relationships with Israeli intelligence, and this relationship might similarly have been as much about business as politics. Among other ventures, Monzer al-Kassar brokered deals (financed by BCCI) that saw Israeli intelligence selling weapons to Iran at the same time when he was leading BCCI efforts to provide a full suite of services to Palestinian terrorist organizations that were ostensibly fighting Israel.

Owing to Monzer al-Kassar, BCCI had a particularly strong relationship with Abu Nidal, who was the most murderous of all the terrorists operating at that time. Over the course of few years in the 1980s, Abu Nidal’s terrorist organization killed more than 900 innocent people (some of them Americans) in more than 20 separate terrorist attacks. During some of that time, Abu Nidal was working out of an office at BCCI headquarters in London.

Abu Nidal’s most in-depth biographer, Patrick Seale, has written that Abu Nidal had, for a time, been employed by the Mossad (Israel’s intelligence service), and that some of his terrorist attacks had been paid for by the Israelis. Indeed, by all accounts, Abu Nidal was a mercenary willing to hire himself out to the highest bidder. During the 1980s, Abu Nidal was paid by Syrian intelligence to help the Syrian government crush a rebellion that was led by the Muslim Brotherhood, and a few years later, Abu Nidal, who had been mentored by leading Muslim Brotherhood clerics, was among the terrorists who had joined the Islamist International, the outfit that was founded by Muslim Brotherhood leader Hasan al-Turabi, and whose chairman was Osama bin laden.

In subsequent years, Syria’s government became a key sponsor of the Muslim Brotherhood and Hamas (which of course was founded by the Muslim Brotherhood), though, of course, the Muslim Brotherhood and Hamas are now once again (with the support of the U.S. government and its allies, including Israel) fighting to overthrow the Syrian government.

During the late 1980s, many of the top leaders of Hamas were involved with the BCCI enterprise, and during most of the 1980s and 1990s, many of them resided in the United States. For example, Mousa Abu Marzook, political chief of Hamas (and a key figure in the Islamist International) resided in Texas, and operated quite openly there even though earnest FBI agents had linked him to the 1993 bombing of the World Trade Center. In 1996, the FBI briefly arrested Marzook, but he was immediately released at the request of the Israeli government, which issued a statement saying that Marzook was “important to the peace process.”

The truth was that those earnest FBI agents had learned in 1993 that Marzook and other Hamas leaders in the United States had undertaken a major initiative to sabotage the peace process, and more specifically to undermine the 1993 Oslo Peace Accords that the Israeli government had signed with the PLO. Many Israeli politicians were similarly displeased with the Oslo Accords because they believed the Accords granted too much legitimacy to Yasser Arafat, the PLO leader. In other words, many Israeli politicians shared the ambition to sabotage the peace process. Meanwhile, of course, the Israeli government, or at least one faction of the Israeli government, was providing support in the form of money and even weapons to Hamas, hoping that a stronger Hamas would undermine Arafat’s authority.

Presently, Marzook resides in Qatar (one of Washington’s closest allies), where he not only has the full protection of the Qatari ruling family, but is also helping the Qataris (and Washington) support the activities of the “Arab Spring” rebels in Syria. However, back in 1996, Marzook was more friendly with the Syrian government, and at that time, Washington also had friendly relations with Syria. After he was released by the FBI in 1996, Marzook moved to Syria, where (at the request of Washington) the Syrian government provided him with full protection.

As of 2000, the director of the House Task Force on Terrorism was reporting that Marzook was among those who, along with Osama bin Laden and other key figure in the Islamist International were plotting to perpetrate a “spectacular” terrorist attack inside the United States. At the time, of course, Marzook and other key figures in the Islamist International had already been linked to the 1993 bombing of the World Trade Center. One of them was the Blind Sheikh (co-founder of Faisal Islamic Finance, formerly BCCI’s most important affiliate). Others were terrorists who were part of Monzer al-Kassar’s organized crime syndicate, the most notable among them being Abu Nidal.

Abu Nidal had dispatched one his deputies, Mohammed Ajaj, to participate in the 1993 World Trade Center bombing, after which the distinguished journalist Robert Friedman reported in the Village Voice that Ajaj was, at that time, an agent of the Israeli intelligence service. Also linked to the 1993 World Trade Center bombing was a fellow named Mohammed Salameh, and the International Herald Tribune reported that the telephone number and apartment address used by Salameh were registered in the name of one Josie Hadas, who had been identified as an agent of the Mossad. This is not to say that Israel was necessarily involved in the 1993 WTC bombing, but it is to say that numerous terrorists were on the payroll of not only the Israeli government, but also the U.S. government (which was, at the time, funding not just Monzer al-Kassar, but also Abu Nidal and the Blind Sheikh).

Some years later, in 2000, Abu Nidal was reported to be among those who were, along with Osama bin Laden and others in the Islamist International, plotting to perpetrate a “spectacular” terrorist attack inside the United States. After a spectacular terrorist attack occurred on September 11, 2001, some major news organizations reported that Abu Nidal had been operating an Al Qaeda training camp in Iraq in cahoots with Iraqi leader Saddam Hussein. According to these reports, Abu Nidal had personally overseen the training of Mohammed Atta, identified by U.S. officials as the terrorist who piloted the first airplane that had crashed into the World Trade Center. We can, however, hope those reports were not true because it has since been revealed that Abu Nidal was, at the time, an employee of the United States government.

That Abu Nidal was an agent of the U.S. government was first reported by prominent British journalist Robert Fisk, whose reporting on terrorism and the Middle East should be required reading for all Americans because Fisk is one of several mainstream journalists (too few of them Americans) whose reporting is usually true. In 2009, Fisk, then writing for The Independent, a newspaper in England, reported that he, Fisk, had obtained a report from Iraq’s “Special Intelligence Unit M4” confirming that Saddam’s regime had killed Abu Nidal after discovering that Abu Nidal was employed by the U.S. government.

According to Fisk, the regime in Washington (using Kuwaiti and Egyptian intelligence as intermediaries) paid Abu Nidal to provide information to the American government about Iraq’s ties to Al Qaeda. Fisk did not specify as to the nature of the information provided by Abu Nidal, but we might assume that Abu Nidal either provided authentic information that Mohammed Atta received training in Iraq, or that he, Abu Nidal, helped fabricate this information, which U.S. officials proceeded to leak to the media in support of their contention that Saddam had ties to Al Qaeda.

A similar story was subsequently published by Janes, a respected national security journal, which revealed that Saddam Hussein’s regime sentenced Abu Nidal to death in 2002 after discovering that Abu Nidal had in his possession classified U.S. government documents outlining plans for the U.S. invasion of Iraq–leading Saddam to conclude that Abu Nidal was an American spy. Which was a reasonable assumption in light of all we know about the U.S. governments relationship with Monzer al-Kassar’s organized crime and terrorism operation, which, of course, included Abu Nidal.

* * * * * * * * *

Back in 1988, Monzer al-Kassar was linked to another terrorist atrocity—the bombing of Pan Am Flight 103 over Lockerbie, Scotland. The fact that al-Kassar was linked to the Pan Am Flight 103 bombing was reported at the time by a collection of mainstream journalists, most of them in Britain, but those journalists were viciously smeared by some U.S. government officials and journalists who were bent on pinning the bombing on Libyan dictator Muammar Qadaffi.

To this day, the cowed U.S. media reports that only “conspiracy theorists” believe that anyone other than Qaddaffi was involved in the Flight 103 atrocity, but the evidence is overwhelming that terrorists who worked for Monzer al-Kassar’s organized crime syndicate were the perpetrators.

In fact, it was not just “conspiracy theorists” who believed that al-Kassar was involved in the Pan Am Flight 103 bombing. It was, among others, numerous U.S. government officials, government investigators in Germany (where the bomb was loaded on to Flight 103), lawyers for Pan Am, members of Congress, a private investigator named Juval Aviv (formerly of the Mossad, with extensive experience tracking terrorist organizations) who was hired by Pan Am to investigate the bombing, and a former Defense Intelligence Agency asset named Lester Coleman.

When Coleman blew the whistle on the true story of Flight 103, he was indicted by the DOJ on trumped up charges that he had applied for a passport using false documents, and then he was smeared relentlessly by U.S. officials and journalists who described him as a con-man and a criminal. Meanwhile, U.S. officials denied that Coleman had anything to do with the U.S. intelligence community. As a result, he was forced to flee the United States, and he became the first American ever to receive political asylum in a foreign country (Sweden).

A reporter named Steve Emerson was among those who did the most to discredit Coleman, leading some to accuse Emerson of being a government stooge. Since then Emerson has done excellent research into terrorism (some of which I have borrowed for my own stories), so I don’t think he is a stooge, but he probably got the Flight 103 story wrong. Coleman has since proven that he did, in fact, work for the Defense Intelligence Agency (and that it was CIA officials who ordered him to apply for a passport using false documentation).

Coleman’s story about Pan Am Flight 103 (laid out in book called “Trail of the Octopus”) is more than plausible, and is, in fact, now widely acknowledged to be true. Meanwhile, the official story from the U.S. government has been thoroughly discredited–and notably, the official story emanated from many of the same officials—e.g. FBI counter-terrorism chief Oliver “Buck” Revell, Robert Mueller (now director of the FBI), top FBI official Lindsey Devecchio– who were involved in covering up the Edwin Wilson and Iran-Contra affairs.

The official story was that a Libyan intelligence officer named Abdelbaset al-Megrahi (on orders from Muammar Qaddafi) planned and carried out the bombing of Flight 103. This story was based almost entirely on the claims of the FBI and MI5 (Britain’s domestic spy service) that a shop-keeper in Malta had sold clothes that were found in the same suitcase that contained the bomb. The shop-keeper, Tony Gauci, was located by the FBI, and he fingered al-Megrahi as the man who had bought the clothes.

However, several documentaries have presented evidence that the U.S. Department of Justice paid Gauci, the shop keeper, at least $1 million in exchange for his agreement to name al-Megrahi. In 2009, lawyers for al-Megrahi (who was serving a life sentence in Scotland, owing largely to information provided by the FBI and DOJ) were about to present evidence of the pay-off and additional evidence pointing to the real perpetrators, but before they were able to do so, the Scottish released al Megrahi on compassionate grounds, saying that he had advanced cancer and only weeks left to live. (Three years later, al Megrahi died of cancer, in Libya).

In addition, it has since been widely acknowledged (as Pan Am’s lawyers, Coleman, German authorities, some CIA officers, Juval Aviv, and many others argued at the time) that the Pan Am 103 atrocity was the work of terrorists who were linked to Monzer al-Kassar, and who were also important figures in a heroin trafficking ring that was overseen by al-Kassar and protected by the U.S. government.

According to former Defense Intelligence Agency officer Coleman and others, the Drug Enforcement Agency and the FBI had made arrangements at the Frankfurt Airport that allowed al Kassar’s terrorist network to smuggle heroin on to airplanes (including Flight 103) without problems from airport security. There is no evidence that the DEA itself was (as some have said) dealing in heroin. These were so-called “controlled deliveries.” In other words, the DEA and other American government agencies (including the Defense Intelligence Agency) had recruited al-Kassar’s men as agents, allowing them to smuggle heroin into the United States in exchange for their cooperation in other investigations. Once the heroin was smuggled into the U.S., the DEA monitored its distribution to learn more drug dealers who were operating in the United States.

Meanwhile, of course, the U.S. government had employed Monzer al Kassar in many other capacities.

Unfortunately, according to Coleman and many others, one of the controlled deliveries contained not only the usual narcotics, but also a bomb—namely, the bomb that blew up Flight 103. That is, U.S. government agencies had created the conditions that allowed terrorists (who were, meanwhile, working as DEA informants and were employed by the U.S. government in other capacities ) to smuggle a bomb onto an airplane. In a frantic effort to cover up the U.S. government’s negligence, the FBI’s chief of counter-terrorism and the Department of Justice persecuted just about everyone who tried to reveal the truth.

Eventually, Coleman was convicted of perjury, at which point he publicly apologized and said that he had made up some elements of the story to get attention for himself. But his conviction was overturned on appeal, and Coleman recanted his apology. The court documents outlining the reasons why the conviction was overturned were sealed. Meanwhile, a general consensus emerged that Coleman was, at a minimum, correct to say that terrorists with links to Monzer al-Kassar were responsible for the bombing, and that top officials of the U.S. government covered up the involvement of Monzer al-Kassar and associated terrorists.

We might never know the full truth about the Pan Am Flight 103 bombing, but if we are to believe the majority opinion of former national security officials who investigated the bombing, and who have since come forth to challenge the official party line, Monzer al-Kassar was hired by either the Iranian regime or Syrian intelligence to organize the terrorist attack, and the terrorists who (on Monzer al-Kassar’s orders) carried out the attack were members of either Abu Nidal’s Black September or the PFLP-GC (the latter being the outfit that had, in the late 1970s, been trained by Edwin Wilson’s operation).

Whatever the truth, the bombing of Pan Am Flight 103 and the resulting liabilities soon resulted in Pan Am declaring bankruptcy. And it might or might not be noteworthy that Monzer al-Kassar and some key figures in the larger BCCI enterprise (whom I will not name because I cannot say with certainty that they should be implicated in a terrorist atrocity, though it is perhaps a possibility worthy of further investigation by others more capable than I am) earned a handsome profit from the bankruptcy of Pan Am, and these same BCCI figures made money on the later bankruptcy of TWA airlines.

TWA was forced into bankruptcy as a result of liabilities that it accrued from a series of disasters between 1985, when a TWA airliner was hijacked (by the Hezbollah faction that took orders from Monzer al-Kassar) en route from Cairo to Athens, and 1996, when TWA Flight 800 exploded soon after taking off from New York’s JFK international airport, destination Paris. The FBI and DOJ ruled that the explosion of TWA Flight 800 was the result of mechanical failure, but the general consensus among former U.S. government investigators is that TWA Flight 800 was bombed by terrorists whose identities remain unknown.

* * * * * * * * *

In 1991, we know, Monzer al0Kassar and the other terrorists in his syndicate had joined the Islamist International, whose chairman was, of course, Osama bin Laden. The first order of business was to replace the BCCI enterprise with something even better, and, of course, Monzer al-Kassar played a key role in this effort—the effort known as “The Financial Jihad.” Monzer al-Kassar also lent his full support to the more general “Grand Jihad in eliminating and destroying Western civilization,” meanwhile establishing new business relationships with major banks and hedge funds in the United States, and committing a host of destructive financial crimes with some of Western civilization’s leading oligarchs.

As Monzer al-Kassar continued to perpetrate eminently destructive financial crimes and operate his terrorism and organized crime syndicate, he apparently remained protected by the U.S. government, which certainly did nothing to stop him until 2008, when he was arrested in Spain and extradited to the U.S., where he presently faces trial for the one crime that he did not commit. That is to say, the DOJ has charged Monzer al-Kassar only with selling weapons to the FARC (a narco-terrorist paramilitary outfit in Colombia), but he did not actually sell weapons to the FARC. He merely agreed to sell weapons to undercover DEA agents who were posing as FARC representatives.

It is nice to know that Monzer al-Kassar has been arrested and that he is no longer described as the “Prince of Marbella,” but in charging him only with the one crime that he did not commit, the DOJ seems to be covering up (or at least neglecting to publicize, much less prosecute) the many crimes (from terrorist atrocities to narco-trafficking and destructive financial crime perpetrated against the American economy) that he did commit during his long and colorful career as one of the world’s most prominent oligarchs.

In addition, it is possible that Monzer al-Kassar was finally arrested in 2008 only because of his importance to the Syrian government (he was, indeed, one of Syrian President Assad’s most important associates), and because the U.S. government had decided at that point to lend its support to the jihadi guerrillas who were then already gearing up to overthrow the Syrian government. Those jihadis, of course, are now (with U.S. support) fighting the Syrian military under the banner of an “Arab Spring” campaign for freedom and democracy.

In any event, Monzer al-Kassar accomplished much over his career, and with few exceptions, the major U.S. news organizations have yet to give him any credit for these accomplishments. One exception, as I mentioned before, was Forbes Magazine. In 2004, Forbes (without otherwise providing the details of Monzer al-Kassar interesting biography) reported that Monzer al-Kassar not only had ties to Osama bin Laden, but was involved, along with two British citizens—Jared Brook and Lincoln Fraser—with a “high flying financial outfit” called Imperial Consolidated Group.

Imperial Consolidated was involved in multiple destructive financial crimes, most of them involving pump and dump schemes and the “bust-outs” of publicly listed companies in Europe and the United States. All told, Imperial Consolidated looted at least $300 million from the Western financial system. The British miscreants were charged for their involvement in this monumental criminal enterprise, and, meanwhile, they had sued Monzer al Kassar for slander, accusing him of telling people that Imperial Consolidated had fronted arms sales to Osama bin Laden. The merits of that lawsuit remain unclear, but it is clear that Monzer al-Kassar was himself involved with Imperial Consolidated (though he has never been charged on any count other then selling weapons to undercover DEA agents).

Meanwhile (to cite just one more accomplishment), Monzer al-Kassar had long been one of the world’s leading counterfeiters of American currency. His fake U.S. $100 bills were of such high quality that they were known as “Supernotes,” and he created such vast quantities of them that they had a negative impact on the value of the U.S. dollar. As early as 1996, Kenneth Timmerman, a reporter for Time magazine and The Wall Street Journal, prepared an official document for U.S. Congressman Spencer Bacchus outlining the details of Monzer al-Kassar’s counterfeiting operation. This report was promptly deposited in a trash can somewhere in Washington.

In addition, so far as I can tell, Timmerman’s employers at Time Magazine and The Wall Street Journal did not see fit to publish any stories about Timmerman’s important findings.

To be continued…Click here to read Chapter 6

Mark Mitchell is a journalist who spent most of his career working as a correspondent for mainstream media publications before joining DeepCapture.com. He is the author of the book entitled “The Dendreon Effect: How Felons, Con-Men and Wall Street Insiders Manipulate High-Tech Stocks”.

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The Global Bust-Out Series (Chapter 4): The BCCI Enterprise: Prelude to Our Present Predicament

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The Global Bust-Out Series (Chapter 4): The BCCI Enterprise: Prelude to Our Present Predicament


This is Chapter 4 of a multi-chapter series. On your right is a Table of Contents to all chapters so far published.

* * * * * * * * *

Henry Kissinger, who served the Nixon administration as national security advisor and secretary of state, has commented that the 1973 oil embargo was “one of the pivotal events in the history of the [twentieth] century.”

Kissinger did not refer specifically to the Bank of Credit and Commerce International (BCCI) in that statement, but there is no doubt that one of the most important outcomes of the oil embargo was to fill the coffers of BCCI, making it one of the more powerful financial institutions in the world. There is also no doubt that the idea for the oil embargo was hatched by the ruler of Abu Dhabi (then one of BCCI’s controlling shareholders) in consultation with other BCCI principals, including BCCI founder Agha Hasan Abedi. Also playing a role in implementing the oil embargo was BCCI principal Sheikh Kamal Adham (who served concurrently as chief of Saudi intelligence) and the Saudi royal family, which had involvement with the BCCI enterprise.

Others who helped implement the oil embargo included Sheikh Ahmad Turki Yamani, then the Saudi minister of petroleum; and Sheikh Abdel Hadir Taher, then governor of the Saudi state oil company Petromin, both of whom we met in chapter 2 of this series, wherein it was noted that Sheikh Yamani and Sheikh Taher were among the select few billionaires (another being Sheikh Khalid bin Mahfouz, BCCI’s largest shareholder in the 1980s) whom Osama bin Laden referred to as his “Golden Chain.”

All of those sheikhs also had close ties to the Muslim Brotherhood, and the ruler of Abu Dhabi (who masterminded the oil embargo) was one of the leading sponsors of the Muslim Brotherhood. In addition, we know, BCCI had close ties to the Muslim Brotherhood, and we might consider the founding of BCCI in 1972 and the enforcement of the oil embargo a year later to have marked the beginning of what Muslim Brotherhood leaders now (see earlier chapters of this series) describe as “The Financial Jihad.”

As noted in an earlier chapter of this series, Muslim Brotherhood leaders say that the manipulation of oil prices are an important component of the “Financial Jihad.Muslim Brotherhood leader Yussuf al Qardawi, for one, has spoken often of the imperative to deploy  Silah al Naft – i.e. “the weapon of oil” – against the U.S. economy. This was precisely in line with the thinking of Osama bin Laden, who stressed  “the absolute necessity to use the oil weapon.”  And according to a report that was prepared for the Department of Defense, the oil weapon was deployed against the U.S. economy in the years leading up to the great meltdown of 2008.

Indeed, the report for the Defense Department (see chapter 1 of this series) concluded that while a variety of financial weapons have been deployed against the U.S. economy, much of the destruction of 2008 could be attributed to two particularly effective financial weapons: 1) the manipulation of the oil markets that caused oil prices to nearly quadruple in the five years leading to 2008; and 2) the manipulative short selling that was one (though not the only) component of the “bust-outs” (i.e. destruction) of some major financial institutions, including Bear Stearns, Lehman Brothers, and others.

Similarly, the oil embargo of the 1970s quadrupled the price oil, and a few years later, the BCCI enterprise helped “bust out” some of America’s largest savings and loan banks, contributing to the savings an loan crisis that began in the late 1980s, eventually costing U.S. tax-payers billions of dollars (a mighty sum at the time) in bailouts.

* * * * * * * * *

The 1973 oil embargo was an act of economic warfare against the United States, said to be retaliation for America’s support of Israel in the 1973 Arab-Israeli war. Henry Kissinger was no doubt justified in describing this economic warfare as “one of the pivotal events in the history of the [twentieth] century,” but what Kissinger failed to mention was that he and then President Richard Nixon opted to do nothing in response to the economic warfare that was waged against our nation.

This might have been partly because higher oil prices benefited U.S. oil companies and partly because the Gulf states had agreed to use some of the new oil wealth that they were to acquire as a result of the oil embargo to support the U.S. dollar. Nixon would also have been aware that the oil embargo was transforming BCCI into a global powerhouse, and that BCCI and its owners would become important business partners for certain elements of the American establishment, including America’s leading weapons manufacturers, and some of the most powerful people on Wall Street.

In addition, BCCI and/or its partners effectively “captured” Washington. One famous story describes a BCCI partner named Adnan Khashoggi visiting Nixon in the Oval Office, and “accidentally” leaving behind his briefcase, which was found to contain $1 million in cash. The story might be apocryphal, but there is no question that Khashoggi was one of the largest financiers of Nixon’s political war chest. Khashoggi would also later establish himself as one of history’s most destructive financial criminals, but he would remain on close terms with officials in Washington, including multiple U.S. presidents.

Not long after Nixon left power, BCCI employed (as a consultant) a man named Bert Lance, who would soon be appointed director of the office of management and budget in the administration of President Jimmy Carter. Lance brokered BCCI’s secret acquisition of a prominent financial institution called National Georgia Bank, and that acquisition likely had something to do with the fact that National Georgia Bank was the principal financier to Carter’s family peanut business.

After Carter left office, the former president traveled the world with BCCI founder Aga Hasan Abedi. BCCI was also the largest donor to the Carter Presidential Library. The major U.S. news organizations, however, found nothing untoward about this relationship, and after BCCI was revealed to be (in the words of Manhattan District Attorney Robert Morgenthau) “the largest banking fraud in world financial history,” the major U.S. news organizations (and some books on the BCCI scandal) suggested that Carter was oblivious to the fact that BCCI was a criminal enterprise. Some reports also maintained the party line that one of BCCI’s missions was to end global poverty, and so it was natural that Carter, who also desired to help the poor, would join forces with BCCI in this philanthropic endeavor.

Anyone who believes this party line is either dangerously innocent, or guilty of the sort of apathy and lack of inquisitiveness that poses a threat to our democracy. It is possible that Carter genuinely believed that BCCI (which had helped kleptocratic government leaders  “bust out” the economies of poverty stricken nations in the non-developing world) was on a “philanthropic” mission to end global poverty, but that is beside the point. Or, rather, it is  precisely the point. Because if you genuinely believe that the perpetrators of the “largest banking fraud in world financial history” are engaged in a philanthropic mission, you are, by definition, so friendly with those perpetrators as to be wholly incapacitated.

This is the essence of what we call “deep capture.”

One of BCCI’s most important business partners in the 1980s was a leading oligarch named Jackson Stephens, who was one of the largest contributors to both the Democratic and Republican parties. Stephens was also one of Bill Clinton’s closest associates, and Stephens would later figure in some of the scandals that plagued the Clinton presidency. One of the more famous Clinton scandals saw a Chinese spy donating large sums to Clinton campaign coffers and stealing U.S. nuclear weapons secrets, all the while working in some capacity for a brokerage called Stephens, Inc., which had been founded by Jackson Stephens, and which, in the 1980s, had maintained a close business relationship with BCCI. Stephens had, in the 1980s, also been among those who brokered BCCI’s “secret” acquisition of a financial institution called First General Bankshares, later renamed First American Bankshares.

First American Bankshares was the most prominent financial institution in Washington, DC, and it counted among its clients a large number of America’s leading politicians. In addition, First American Bankshares had extensive ties to the U.S. national security community, and it was no accident that BCCI principals controlled First American in partnership with a man named Clark Clifford, whom BCCI also appointed to run the day-to-day operations of First American and its affiiliates. Clifford, a former Secretary of Defense, was, at the time, one of the most influential people in Washington, and he was the eminence gris of the Democratic Party.

After BCCI collapsed in 1991, the major U.S. news organizations focused almost exclusively on BCCI’s “secret” acquisition of First American Bankshares as being the most salient feature of the BCCI scandal, though the major U.S. news organizations seemed to find nothing more scandalous about it than the fact that the acquisition was “secret,” and therefore illegal. Many earnest U.S. government investigators (including Manhattan District Attorney Robert Morgenthau), meanwhile, had determined that there was nothing particularly “secret” about it. Top officials in Washington were aware that BCCI had acquired First American Bankshares, and it is likely they were also aware (as even the whitewashed Congressional report on the BCCI scandal would suggest) that BCCI principals (including the chief of Saudi intelligence) had acquired First Commerce as a way to peddle influence in Washington.

Meanwhile, of course, the BCCI enterprise was carrying out other missions, one of which was to provide a full package of services to leading jihadi terrorist organizations, another of which was to wage the “Financial Jihad” against the American economy. But, of course, captured regulators  in Washington allowed BCCI and its partners to “bust-out” the American economy, and the major U.S. news organizations published not a word about it.

Noteably, the Congressional report into the BCCI scandal also revealed that a BCCI subsidiary called Capcom Financial (whose principals included Saudi intelligence official Sheikh Kamal Adham) had formed business relationships with leading American telecommunications and media companies, including CNN, likely for the purposes of influencing (through the media organizations) American public opinion. Unsurprisingly, the major U.S. news organizations, including CNN, did not report on this aspect of the BCCI scandal. Nor, for some reason, did the major U.S. news organizations report the Congressional finding that Capcom Financial had meanwhile transacted around $90 billion (an astounding sum in those days) in illegal “wash” trades through the trading desk of Michael Milken, who was then the most prominent and powerful financial operator on Wall Street.

Such “wash trades” are usually accompanied by manipulative short selling, and they do extensive damage to the markets. In addition, “wash” trades are usually a component of larger money laundering schemes (hence the term “wash”), and it should be stressed that nearly every serious investigator of the BCCI scandal (including the Manhattan District Attorney; the director of the Senate committee tasked with investigating BCCI; the director of the House Task Force on Terorrism; and others) has reported that one of BCCI’s principal lines of business was to launder money not for the world’s leading terrorist organizations, but also for leading transnational organized crime syndicates. Some of BCCI’s executives, including  Ziuddin Ali Akbar, who served as BCCI’s treasurer and as director of Capcom Financial, were indicted for laundering money that belonged to Colombian drug cartels.

Aside from Milken, another of BCCI’s most important business partners in the 1980s was Bank of America, which was, in fact, among BCCI’s founding shareholders. According to the party line delivered to the public by the major U.S. news organizations (and by some books on BCCI), Bank of America sold its shares in BCCI in the 1970s because Bank of America had concluded at that early date that BCCI was a criminal enterprise. But this failed to explain why Bank of America did not report the criminality. And more recently, in 2007, Morgenthau (who was still district attorney) concluded that Bank of America had laundered huge sums for drug dealers in Latin America who had ties to Hezbollah and Al Qaeda. Most of the major U.S. news organizations failed to report this news.

Meanwhile, the major U.S. news organizations seemed to believe that people like Jackson Stephens and Michael Milken (i.e. one of history’s most destructive financial criminals) were prominent figures of the American establishment, deserving of our respect and admiration. Thus,we are left to contemplate the state of the republic.

To be continued…Click here to read Chapter 5

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The Global Bust-Out Series (Chapter 3): The BCCI Enterprise and The Financial Jihad

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The Global Bust-Out Series (Chapter 3): The BCCI Enterprise and The Financial Jihad


This is Chapter 3 of a multi-chapter series. On your right is a Table of Contents to all chapters so far published.

* * * * * * * * * *

In Chapter 2 of this series, we began to discuss an outfit called the Bank of Credit and Commerce International (BCCI)  which collapsed in 1991, at which point the Manhattan district attorney called it “the biggest banking fraud in world financial history.”  It will be useful for us to further review the amazing history of BCCI because most of BCCI’s former principals and their former partners in crime remain in business today. Moreover, we will see, they have, along with some new and younger players, built a financial network that presently poses a significant threat to the stability of the global financial system.

Unfortunately, the public knows little about the BCCI scandal other than what was published by the major news organizations during the brief period after the scandal broke in 1991, and according to the major U.S. news organizations, BCCI’s most significant crime was to have secretly acquired  a financial institution called First American Bankshares in contravention of rules prohibiting foreign ownership of American financial institutions. The major U.S. news organizations also reported that a few BCCI executives were indicted for laundering money that belonged to Colombian drug cartels, but the media left the public to believe that this was not evidence of any larger conspiracy on the part of BCCI and its partners (which I will refer to as the “larger BCCI enterprise”).

The major U.S. news organizations did transcribe the Manhattan District Attorney’s statement that BCCI was the “largest banking fraud in world financial history,” but most U.S. media failed to properly quantify the magnitude of the fraud or the damage that had been done to the global financial system. So far as the fraud was concerned, the major U.S. news organizations reported only that BCCI’s executives had failed to properly account for a few billion dollars, while BCCI’s depositors had lost a total of around $20 billion when the bank collapsed.

Not only that, but some reports suggested that unlike other major financial institutions, BCCI had pursued a mission that was largely “philanthropic” in nature. According to this narrative, the founder of BCCI, a Pakistani businessman named Aga Hasan Abedi, ascribed to the same  “mystical” brand of Sufi Islam that was favored by some American hippies, and guided by these “mystical” religious beliefs, Abedi and other BCCI executives set out to eliminate global poverty and contribute to the economic advancement of the world’s disenfranchised nations, though a few billion dollars had apparently vanished into the ether of this ultimately misguided and “mystical” mission.

By contrast, Yossef Bondansky, who served as director of the House Task Force on Terrorism and Unconventional Warfare during the years 1988-2005, reported (in his 2000 seminal book on Osama bin Laden) that BCCI’s “philanthropic” mission included the following:  “providing ‘special services’ in support of worthy causes—from laundering money for terrorists, Muslim intelligence services, and mujahedeen; to clandestinely funding deals for conventional weapons, weapons of mass destruction…to shipping around and laundering huge sums embezzled by corrupt leaders.” Bodansky continued: “In the process of sponsoring these Islamist ‘causes,’ the BCCI’s management not only did not keep any books…[but also] BCCI had become a hollow entity with a lot of unaccounted for and dirty money moving around the world…”

In fact, the mission was grander than all that, and to understand the larger mission, we must recall that leaders of the Muslim Brotherhood presently speak of a mission called “The Financial Jihad.”  To some extent, the “Financial Jihad” involves Muslim Brotherhood banks providing “special services” to jihadi terrorist organizations, but a report prepared for the Department of Defense (see chapter 1 of this series) suggests (as do other experts) that the “Financial Jihad” has two additional objectives: 1) to build a global financial empire that can serve as an alternative to the prevailing financial order dominated by the West; and 2) to deploy financial weapons of mass destruction to undermine the prevailing financial order dominated by the West.

The financial institution that spearheaded the “Financial Jihad” was BCCI. It was not known as the “Financial Jihad” back then, but there can be no doubt that BCCI’s mission had little to do with a “mystical” mission to eliminate global poverty. It was true that BCCI founder Aga Hassan Abedi ascribed to a “mystical” brand of Sufi Islam, but it was also true (contrary to the media reports that the Muslim Brotherhood was an entirely Sunni outfit) that some key Muslim Brotherhood figures, including several of the people who originally founded the Brotherhood, ascribed to the “mystical” brand of Sufi Islam. Although it is  not known whether Abedi himself was a member of the Muslim Brotherhood, he and other BCCI executives had relationships with Muslim Brotherhood leaders, and it is clear that he and the Muslim Brotherhood had a common vision of what they referred to at the time as “Islamic finance.”

BCCI also counted among its founding shareholders and top executives current and former officials of governments that were among the Muslim Brotherhood’s principal state sponsors. One of the largest shareholders of BCCI was the ruler of Abu Dhabi (in the United Arab Emirates), and other key shareholders included the ruling families of Dubai (also in the UAE) and Oman. In addition, the Saudi royal family had close involvement with BCCI, and one of BCCI’s most important shareholders (and a key hands-on executive of the bank) was Sheikh Kamal Adahm, who was chief of the Saudi intelligence service at the time when BCCI was founded in 1972 until he retired from that position in 1977.

When Sheikh Adahm resigned as chief of Saudi intelligence, he was replaced by Prince Turki bin al-Faisal, who was also closely involved with some of BCCI’s important initiatives. Meanwhile, many of BCCI’s top executives were “former” top officials of Pakistan’s intelligence service, the ISI, which itself had extensive ties with the Muslim Brotherhood, while other BCCI executives were among the closest associates (including the son) of Muhammad Zia-ul-Haq, who was the leader of Pakistan until his death in 1988. Some accounts of the BCCI enterprise described BCCI as being effectively an arm of both the Saudi intelligence service and the Pakistani intelligence service (with Pakistan’s government being, to some significant extent, a proxy of the Saudis).

All of these governments had been engaged in a program (a program that continues to this day) to grow the Muslim Brotherhood into a powerful and global political movement. An important component of this program was (and is) to help the Muslim Brotherhood build an impressive financial empire, and as of the 1980s, a centerpiece of this financial empire was an outfit called Faisal Islamic Bank, which was one of BCCI’s most important affiliates. BCCI itself might properly be regarded as having been an important component of the Muslim Brotherhood financial empire, and this was especially the case in the 1980s, when a Saudi billionaire named Sheikh Khalid bin Mahfouz became BCCI’s largest shareholder and an executive director of the bank.

As we know from Chapter 2 of this series, Sheikh Mahfouz had extensive ties to the Muslim Brotherhood, and he was later a key sponsor of the terrorist organization that we now know as “Al Qaeda.” He was, in fact, one of the select few billionaires whom Osama bin Laden referred to as his “Golden Chain.” And, of course, Osama bin Laden was himself a prominent Saudi billionaire, so it should surprise nobody to learn that Osama bin Laden himself was also involved with the BCCI enterprise.

It has been reported that Osama bin Laden was a mere client of BCCI, and perhaps he was nothing more, but it is important to understand that Osama bin Laden was not just the leader of a violent terrorist organization, but also a sophisticated financial operator. In addition,  as Yossef Bondansky (then director of the House Task Force on Terrorism) reported in his 2000 book on Osama bin Laden, soon after BCCI collapsed in 1991, a Muslim Brotherhood leader named Hasan al-Turabi assigned Osama bin Laden to help lead a Muslim Brotherhood initiative to replace the BCCI enterprise with a similar banking network that could serve the jihad. Also involved with this effort was Omar Abdul Rahman, otherwise known as the Blind Sheikh, and he was one of Osama bin Laden’s closest associates.

Presently, the media reports that the Blind Sheikh is a fringe fanatic and terrorist who was jailed for his involvement in the 1993 bombing of the World Trade Center. However, the Blind Sheikh is also a leader of the Muslim Brotherhood and he was (prior to his arrest on terrorism charges) an eminently prominent banker who co-founded several major  financial institutions, including an outfit called Faisal Islamic Bank, which (recall) was BCCI’s most important affiliate (delivering much of its depositors’ money to BCCI, with BCCI looting some significant portion of that money).

The Blind Sheikh and Osama bin Laden were not the only terrorists who had involvement with BCCI. Another was Abu Nidal, leader of a terrorist organization called Black September (among other names). Abu Nidal was the most notorious terrorist of his era, and according to numerous reports, including one in Time magazine, Abu Nidal worked for a while out of BCCI offices in London.

Abu Nidal, too, was reportedly a mere client of BCCI, but his terrorist organization was closely intertwined with a transnational organized crime (and terrorism) syndicate operated by a global terrorist and mobster named Monzer al Kassar, and al-Kassar played a role in brokering some of BCCI’s important business ventures. (Aside from being a global terrorist and mafia kingpin, Monzer al Kassar was a prominent businessman and oligarch often referred to as “The Prince of Marabella” because of the lavish parties he held at his mansion in Marabella, Spain).

Rachel Ehrenfeld, now director of the Economic Warfare Institute, has written that the  “religious convictions of the founders of BCCI coincided with those of the Muslim and Arab leaders who sponsored terrorism. It was also the extension of this belief that led [BCCI founder] Agha Hassan Abedi to immerse BCCI in terrorist activities.”  Ehrenfeld continued: “Funding revolutions, terrorism, and other subversive activities is expensive and difficult. An Iranian web of international financial institutions was created, with BCCI as one of the most prominent strands. The bank not only facilitated direct contact between terrorist networks, it also provided cover and deniability for the sponsoring states.”

All true, but more than that, the BCCI enterprise (contrary to the notion that its “mystical” mission was to eliminate global poverty) contributed to the further impoverishment of the world.  Not only did the BCCI enterprise steal billions from its depositors (many of whom were citizens of poverty-stricken nations), but BCCI also helped numerous kleptocratic government leaders “bust out” (i.e. loot and destroy) the economies of destitute nations in Africa and Latin America. In addition, the BCCI enterprise “busted out” a significant chunk of the American economy, which is to say that it achieved one objective of what is now known as the “Financial Jihad.”

However, it should be noted that the BCCI enterprise perpetrated much of its destructive crime in partnership with prominent figures of the American establishment.  And presently, Muslim Brotherhood financial institutions  (many with links to former BCCI principals, or operated by former BCCI principals) count among their important business partners some of Wall Street’s most notable (and notorious) brokerages and investment houses. In other words, Swiss author and political scientist Richard Labeviere (who is one of the world’s more astute observers of the jihad and the Muslim Brotherhood) was correct to report (in 2000) that the jihad and political Islam (led by the Muslim Brotherhood)  “is less likely to produce a ‘clash of civilizations’…than to consolidate mafia channels of organized crime and the far-reaching networks of businesses built under globalized capitalism.”

Another astute (and independent) observer of the jihad is Robert Dreyfuss, who has spent much of his long career in the Middle East, and who has served as national security correspondent for Rolling Stone magazine, which is mostly about hip music bands, but which is, unfortunately for civilization, the only major U.S. media outfit that consistently publishes in-depth stories (see also stories by Matt Taibbi and Greg Palast) that approximate the truth on important subjects such as Wall Street, Washington, the jihad, and other things that make the world the way it is. Dreyfuss, who has studied the Muslim Brotherhood since the 1970s, and is the author of two excellent books (one on Iran, the other on political Islam) has correctly observed that the “real Muslim Brothers are the secretive bankers and financiers…whose genealogy places them in the oligarchical elite…”

Dreyfuss has also reported (correctly) that: “the Muslim Brotherhood is money. Together, the Brotherhood probably controls several tens of billions of dollars in immediately liquid assets, and controls billions more in day-to-day business operations in everything from oil trade and banking to drug-running, illegal arms merchandising, and gold and diamond smuggling. By allying with the Muslim Brotherhood, the Anglo-Americans [i.e. the oligarchical elite of the West] are not merely buying into a terrorist-for-hire racket; they are partners in a powerful and worldwide financial empire that extends from numbered Swiss bank accounts to offshore financial havens….”

Dreyfuss continued: “Need a few hundred million dollars to bail out [a] bank? Try the Muslim Brotherhood. Is a major London conglomerate seeking partners to invest a few billion in an African raw materials extraction venture? Try the Muslim Brotherhood. Does an Anglo-American bloc of banking houses want to start a run on the French franc? Try the Muslim Brotherhood.”

* * * * * * * * *

While the major U.S. news organizations regularly cited $20 billion as being the extent of the BCCI fraud, that figure represented only the sum that BCCI’s depositors lost when BCCI collapsed. By perpetrating a host of other destructive financial crimes (i.e. financial terrorism), BCCI and its partners looted far more—at least two trillion dollars—from the global financial system. Some of this looting was accomplished by a global network of BCCI-affiliated brokerages that specialized in perpetrating so-called “pump and dump” schemes, and we will see in later chapters that  most of those brokerages were not only linked to BCCI, but also operated by prominent financial operators (e.g. a fellow named Thomas Quinn) with ties to La Cosa Nostra and other organized crime syndicates.

See Chapter 1 of this series for a fuller description of “pump and dump” schemes, but the basic idea is that miscreants gain control over the stock of a publicly listed company, and sometimes gain a degree of control of the company itself. The miscreants then “pump” the share price, and as the share price rises in value, the miscreants lure in ordinary investors. Once the share price reaches sufficient heights, the miscreants then “dump” shares into the market, meanwhile bombarding the stock with manipulative short selling that causes the stock to go into a death spiral from which the stock does not recover.

Sometimes the companies targeted in these schemes are fraudulent companies to begin with, at other times the companies are legitimate until such time when the miscreants seize control of the companies and begin manipulating their stock, meanwhile looting their cash. Either way, the end result is aways the same: the companies are “busted out” (i.e. destroyed) and the death spiral caused by the “dump” and the manipulative short selling ensures that the stock price hits zero before ordinary shareholders have the opportunity to exit the stock and recoup some of their losses.

The global network of BCCI-linked brokerages “busted out” mostly small to medium sized companies, but the larger BCCI enterprise used similar methods to “bust out” some important American savings and loan banks. In later chapters of this series, we will see that BCCI also played a key role in the operations of Michael Milken, then the most powerful man on Wall Street. In addition, we will see, BCCI helped Milken and some of his closest associates “bust out” Lincoln Savings and Loan, then one of the most important financial institutions in the nation. Indeed, BCCI and the Milken operation were major contributors to the savings and loan crisis that began in the late 1980s, and which ultimately cost U.S. taxpayers billions of dollars in bailouts—a portent of bigger and better things to come.

In 1993, when a few BCCI principals were brought to trial, the presiding judge correctly noted that the BCCI had singlehandedly “shattered the integrity of the global financial system.” And perhaps it is no coincidence that the Blind Sheikh (co-founder of a key BCCI’s affiliate, Faisal Islamic Bank, which had played an important role in shattering the integrity of the global financial system) not only was linked that same year to the bombing of the World Trade Center (i.e. the first attempt to topple the twin totems of the global financial system), but also subsequently issued one of the most famous of all fatwahs–a fatwah that was cited by Osama bin Laden in his declaration of war against the United States, and a fatwah that is quoted with admiration by Muslim Brotherhood leaders everywhere.

The Blind Sheikh’s fatwah (issued from his jail cell) was the first fatwah (or, at least, the first fatwah issued by a terrorist who was also a prominent banker) to publicly suggest that it would be good idea for his fellow jihadis (and fellow bankers?) to “tear down the edifices of capitalism.” And, to be sure, the Blind Sheikh was no friend of “capitalism” as that noble idea was formerly understood, with free and fair markets unfettered by a ruling oligarchy and governed by a minimal rule of law. To the contrary, the Blind Sheikh was a criminal oligarch.  And though the World Trade Center was no doubt one “edifice of capitalism” that the the Blind Sheikh wished to “tear down,” the Blind Sheikh made it clear in his fatwah that the objective was not merely to destroy a building in the heart of the New York financial district.

The Blind Sheikh stated that there was a larger objective. This is the objective we now know as “The Financial Jihad,” but back then, the Blind Sheikh did not mince his words. He stated it emphatically. He stated it bluntly. He stated it as a formal command:  “Destroy their [our] economies…”

To be continued…Click here to read Chapter 4

Mark Mitchell is a journalist who spent most of his career working for mainstream media publications before joining DeepCapture.com.

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The Global Bust-Out Series (Chapter 2): The “Money Weapon” and The Jihad Bigger than Bin Laden

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The Global Bust-Out Series (Chapter 2): The “Money Weapon” and The Jihad Bigger than Bin Laden


This is Chapter 2 of a multi-chapter series. On your right is a Table of Contents to all chapters so far published.

* * * * * * * * *

Al Qaeda’s supporters are “aware of the cracks in the Western financial system as they are aware of the lines in their own hands.”

— Osama bin Laden, in a 2001 interview with a Pakistani Journalist

* * * * * * * *

In the summer of 2003, customs agents at London’s Heathrow airport inspected the luggage of a man named Abdurrahman Alamoudi and found hidden in a secret compartment of one of his suitcases a total of $350,000 in cash. Mr. Alamoudi failed to adequately explain why he was hauling large stacks of $100 bills in a secret compartment, so there was an investigation. This investigation yielded some interesting facts.

Mr. Alamoudi, a member of a wealthy family in Saudi Arabia, had been a long time resident of the United States, where he was among the most prominent members of the Muslim community. He was also a leader of the Muslim Brotherhood, and an outspoken supporter of Hamas and Hezbollah. In addition, he counted among closest friends and business associates people like Sami al Arian, a leader of Palestinian Islamic Jihad, and Mousa Abu Marzook, political chief of Hamas.

Some people believe that groups like Palestinian Islamic Jihad, Hamas, and the Muslim Brotherhood are focused on faraway lands, but all of these groups (we will see) have ties to Al Qaeda, and all of them are united in their hostility to the United States. Moreover, they pay close attention to the U.S. markets – and they see the economy as key to undermining American power.

When the financial crisis hit in 2008, Hamas leaders reacted with glee and issued an official statement proclaiming that the economic cataclysm marked the “End of the American Empire.” Meanwhile, leaders of the Muslim Brotherhood regularly preach the glory of Al Jihad bi-al-Mal, or the “Financial Jihad.”

A report (see Chapter 1) commissioned by the Defense Department’s Irregular Warfare Support Program suggests that the “Financial Jihad” has two key objectives: 1) building a global financial network that can serve as an alternative to the prevailing financial order dominated by the West; 2) perpetrating destructive financial crimes that can be described as “financial terrorism” because the crimes are, to some extent, politically motivated and meant to undermine the global financial system, which is viewed by leaders of the Financial Jihad as being a product of the West.

Muslim Brotherhood leader Hamud bin Uqla al-Shuaibi implied as much when he stated in 2007 that jihadis must resist the West, but do not necessarily need to do so with violence. He suggested that “Financial Jihad” was a viable alternative to violence and was indeed “more important than self sacrificing [in armed battle].” He did not specify what he meant by “Financial Jihad” but he was certainly not talking about giving to charity. Rather, he said, “Money is a weapon of Jihad.”

Similarly, Muslim Brotherhood spiritual leader Yussuf al Qardawi has spoken of the need for Muslims to deploy  Silah al Naft – i.e. “the weapon of oil” – against the U.S. economy. This was precisely in line with the thinking of Osama bin Laden, who stressed  “the absolute necessity to use the oil weapon.”

In another typical manifesto, Osama bin Laden and his deputy wrote that “it is very important to concentrate on hitting the U.S. economy through all possible means.” In 2007, bin Laden released a video on which he taunted the U.S. for having too much mortgage debt.

Although Osama bin Laden is dead, his words remain important. Indeed, among jihadis, the words of the fallen “martyr” might have more resonance than ever. And the jihad is bigger than bin Laden. It is a global movement that has clearly articulated its goals, and remains intent upon achieving them.

Al Qaeda and many other outfits have repeated over and over that jihadis should wage economic warfare any way they can. They don’t mean knocking down buildings – they mean wiping out the markets. As Al Qaeda operative Monin Khawaja wrote in 2003, “We have to come up with a way that we can drain their economy of all its resources, cripple their industries, and bankrupt their systems…”

Then there is the Muslim Brotherhood document, which is quoted all too frequently, and often to the wrong purposes. It says that Muslims “must understand that their work in America is a kind of Grand Jihad in eliminating and destroying the Western civilization from within and `sabotaging’ its miserable house by the hands of the believers…”

When I say that the document is quoted to the wrong purposes, I am referring to those who point to it as evidence that radical Islamism is taking over America, which it is not. Certainly, we should not be hysterical about Muslims calling America a “miserable house”, which is an accurate description of our current state of affairs. However, it is possible that jihadis are, in fact, “sabotaging” our miserable house from within.

As early as 2003, the Department of Homeland Security warned that Al Qaeda  was interested in infiltrating American financial institutions, and that Al Qaeda operatives possibly had already obtained jobs at American brokerage houses and banks. Said DHS spokesman David Wray: “There is new intelligence that indicates specific interest [on the part of Al Qaeda] in financial services and indirect indication…that led us to believe that threats could come from within as well as without.”

Osama bin Laden, meanwhile, liked to brag (as he did in the statement with which I opened this chapter) that his supporters understand the weaknesses in the American financial system. In another statement, he was even more explicit, saying not only that his supporters knew how to “exploit” the “cracks inside the Western financial system”, but also that the “faults and weaknesses are like a sliding noose strangling the [American economy].”

Which brings us back to Mr. Alamoudi, the fellow caught with $350,000 stuffed in his suitcase. Mr. Alamoudi was a central figure in what FBI investigators used to call the SAAR Network, or sometimes the Safa Group, a complex web of companies, investment funds, banks and charities alleged to have funded a host of jihadist outfits, including Al Qaeda. Shortly after the 9-11 attacks in 2001, the SAAR Network became the principal target of Operation Green Quest, the U.S. government’s effort to shut down the flow of money to terrorists. (Operation Green Quest led to few indictments and was disbanded in 2003, but its findings remain relevant).

One SAAR Network outfit was called the Ficq Council, where Mr. Alamoudi served as a trustee. The founder of the Ficq Council, Taha Jaber Al-Alwani, was named as an “unindicted co-conspirator” in the government’s case against Mr. Alamoudi’s friend, Sami al-Arian, who was himself a central figure in the SAAR Network until he was jailed for his activities as U.S. leader of Palestinian Islamic Jihad. (Sami al-Arian was also suspected of providing support to the 9-11 hijackers, but he was never charged for doing so).

The secretary and board director of the Ficq Council was a man named Sheikh Yusuf Talal DeLorenzo, who is another one of Sami al Arian’s close associates. Sheikh DeLorenzo and Mr. Alamoudi (the fellow with the suitcase full of cash), meanwhile, co-founded a SAAR Network outfit called the Graduate School of Islamic and Social Sciences (GSISS).

Sheikh DeLorenzo himself has not been implicated in the funding of terrorism, and for a time, GSISS had a contract from the U.S. Department of Defense to screen and hire Muslim Army chaplains, some of whom accompanied U.S. troops to Afghanistan. That, however, was before Mr. Alamoudi was caught at Heathrow with $350,000 in cash hidden in a secret compartment of his suitcase. The investigation that ensued revealed that Mr. Alamoudi had received the cash from Libyan dictator Moammar Qaddafi, and that he planned to use it to finance a plot that he had hatched to assassinate then Crown Prince Abdullah of Saudi Arabia. In 2004, the Treasury Department issued a press release stating that Mr. Alamoudi had ties to Al Qaeda and was one of Osama bin Laden’s most important funders.

After it became clear that Mr. Alamoudi (who is now serving a 23-year prison sentence) had ties to Al Qaeda, the U.S. Senate held a hearing to discuss how it came to be that GSISS (the outfit co-founded by Mr. Almoudi and Sheikh DeLorenzo) was hiring chaplains to accompany American troops to Afghanistan. Echoing the words of most everyone else at that hearing, Senator Jon Kyl of Arizona said that it was pretty “remarkable” that  “people who have known connections to terrorism are the only people to approve these chaplains.”

The Defense Department also concluded that it was remarkable, and ultimately concluded that the GSISS had probably been inserting Al Qaeda spies into the U.S. Army. At least one of the chaplains that GSISS hired for the Army was eventually charged and convicted for passing U.S. military secrets to Al Qaeda. Other GSISS clerics were suspected of espionage and merely fired.

Three years later, a lot of people still thought it was “remarkable GSISS (co-founded by Mr. Alamoudi, a key funder of Al Qaeda) had managed to insert spies into the U.S. military. but that didn’t stop GSISS’s other co-founder, Sheikh DeLorenzo (a sophisticated financier) from seeking permission from the Securities and Exchange Commission to set up a trading platform called Al Safi Trust, the ostensible purpose of which was to enable Muslim traders to engage in short selling without violating shariah law.

In 2007, the SEC granted permission, which is pretty “remarkable” because Al Safi Trust creates precisely the sort of “crack” in the financial system that would likely be exploited by people looking to crash the markets.

Traders who engage in legal short selling (as opposed to naked short selling) first borrow stock, then sell it, hoping the price will fall. This is a legitimate practice when it is not meant to intentionally manipulate the markets. The stock that is borrowed and then sold is real stock; it is not phantom stock that artificially increases supply and drives down prices. When Sheikh DeLorenzo set up Al Safi Trust, however, he explained that Muslim traders cannot borrow stock because shariah law prohibits paying interest.

This claim is, to begin with, not entirely true. Shariah law (by a strict reading of the Koran) does not ban interest. It merely warns against “excessive” interest, or usury. Nobody in modern times ever said that Muslims cannot pay interest until the Muslim Brotherhood’s “Financial Jihad” began to take off in the 1970s. This is about politics, not religion. Regardless, the interest problem could have been resolved in any number of ways. For example, Al Safi Trust could have worked out a fee structure whereby the prime broker, rather than the traders themselves, paid the interest on the borrowed stock.

Instead, Al Safi Trust provides an altogether novel service, known as Arboon, the amazing feature of which is that nobody locates or borrows any real stock. The clients of Al Safi Trust can simply sell as much stock as they like even if there is no stock available to sell.

Of course, if there is no stock available, they are not selling actual stock. They are simply hitting the “sell” buttons on their computers, indicating to the markets that stock has been sold, and creating phantom supply that drives down prices. According to Sheikh DeLorenzo, Al Safi Trust’s short sellers enter into an agreement to eventually buy stock so that they can deliver what they have sold.  But an agreement to buy stock  at some indeterminate point in the future is a far cry from having actual stock before selling it.

Presumably, Al Saft Trust’s clients do fulfill their agreements by eventually purchasing stock and delivering it to whomever bought it. But by that time, the phantom stock that was sold would have already done its damage to the markets. With the damage done, Al Safi Trust’s traders can buy shares at lower prices, deliver them, and then unleash another blast of phantom stock, further driving down prices.

In short, Al Safi Trust is nothing more than a cloak for another form of naked short selling, embroidered in Islamic jurisprudence so that regulators will not see through it. Because it is condoned by regulators, there is no evidence that Al Safi Trust itself has broken any laws. However, criminals  (or, for that matter, financial terrorists) looking to inflict damage on the markets now have a service, Al Safi Trust, that would enable them to conduct their mischief without fear that American regulators would pay even the least bit of attention to what they are doing.

I shudder to think who the clients of Al Safi Trust might be, but we should probably consider the possibilities. And towards that end, maybe we should know more about Sheikh DeLorenzo’s background.

* * * * * * * *

Sheikh DeLorenzo was born in Massachusetts as Anthony DeLorenzo, the son of upper-class parents, and the grandson of Italian immigrants from Sicily. At the age of twenty, he dropped out of Cornell University, and converted to Islam. Soon after, he moved to Pakistan, gradually making his way to Karachi, where he spent several years receiving religious training at Jamiah Ulum Islamia, a maddrassah led by scholars who, like the Taliban, subscribe to the strict Deobandi school of Islam.

According to the International Crisis Group, a well-known non-profit organization that studies war zones and political conflict, the Jamiah Islamia maddrassah has “carried the mantle of Jihadi leadership,” since the days of the Soviet invasion of Afghanistan, and now serves as “the fountainhead of Deobandi militancy countrywide.”

The International Crisis Group notes further that the Jamiah Islamia “boasts close ties with the Taliban” and has played a “major role in helping to establish and sustain” Pakistan’s most violent jihadist outfits, including Harkat ul-Mujahideen, Jaish-e-Mohammed, and Sipah-e-Sahaba. All of these groups have close ties to Al Qaeda, and Jaish-e-Mohammed, along with the intimately affiliated Lashkar-e-Tayiba, have become, for all intents and purposes, Al Qaeda subsidiaries.

As evidence of this, investigators note, as just one example, that Omar Sheikh, a leading member of Jaish-e-Mohammed, wired money to Mohammed Atta, the ring-leader of the Al Qaeda hijackers who carried out the 9-11 attacks. Omar Sheikh was also responsible for kidnapping Wall Street Journal reporter Daniel Pearl, who was subsequently killed, his head sliced off with an ornate, Yemeni knife and held up to be filmed for a jihadi propaganda video. Khalid Sheikh Mohammed, the mastermind of the September 11 attacks, has said that he committed the murder himself.

This was a great tragedy because Daniel Pearl was one of the few journalists to understand the threat to the United States is not just Al Qaeda, but a much larger, complex web of interlinking jihadist groups, shady financiers, agents of rogue states, narcotics smugglers, nuclear weapons traffickers, and Mafia kingpins. We’ll dig into that web in future chapters, but I’ll note now that Jaish-e-Mohammed, one of the outfits spawned by Sheikh DeLorenzo’s madrassah, has been implicated in multiple terrorist plots, including one to fire Stinger missiles at passenger planes in New York.

This is not to suggest that Sheikh DeLorenzo himself is a terrorist.  But there is no question that Sheikh DeLorenzo — who is also known as Usama DeLorenzo, and Usama a-Ali, and Usama Ashraf Ali, and other names — is on familiar terms with jihadist groups. Indeed, in the 1980s, Sheikh DeLorenzo worked as a key advisor to Zia ul-Haq, who was then the leader of Pakistan, and Sheikh DeLorenzo’s job was to help implement the Pakistani government’s most pernicious program — the further development of the country’s network of madrassahs in order to strengthen relationships between the government and jihadist paramilitaries, including many that are now plotting the demise of the West.

As part of Sheikh DeLorenzo’s program, many of these jihadist groups became closely intertwined with Pakistan’s spy agency, Inter-Services Intelligence (ISI). It should be said that the madrassah program also received support from the U.S. government, which was then hoping that the jihadist movement would serve as bulwark against the Soviet Union. But nowadays, of course, the jihadist paramilitaries are enemies of the United States, and their entanglements with the ISI cause endless problems for U.S. government officials who rely on Pakistan as an American ally.

The nexus between the ISI, the jihadis, and also key Mafia figures (such as the Indian Mafia kingpin Dawood Ibrahim, who lives under the protection of the ISI and is a key money man for Al Qaeda, according to multiple U.S. government reports) is a genuine threat to global stability, and to the financial system that underlies the American economy. Ibrahim himself is a serious threat. Aside from being involved in multiple violent terrorist attacks, he is reportedly the biggest trader on the Karachi stock exchange. Forbes Magazine ranks Ibrahim as one of the 50 most powerful people in the world.

The extent to which Sheikh DeLorenzo remains part of the Pakistani nexus is unclear, but his experience in Pakistan might be less worrying than his time in America, where he came to be on close terms not only with Sami al-Arian (a leader of Palestinian Islamic Jihad) and Mr. Alamoudi (his Al Qaeda-tied partner in  GSISS) but many other important jihadis, most of them key figures in the SAAR Network of alleged terrorist financiers. Indeed, though Sheikh DeLorenzo has never been charged with any crime, he held key positions with multiple SAAR Network organizations, and it should be stressed that all these organizations were operated by the Muslim Brotherhood, and all were said (by U.S. law enforcement agencies) to have ties to terrorist organizations (e.g. Hamas, Palestinian Islamic Jihad, Al Qaeda, and others) that were spawned by the Brotherhood.

For example, in addition to his high-level positions with the Ficq Council, Sheikh DeLorenzo was a board member at the International Institute of Islamic Thought (IIIT), another outfit identified by FBI investigators as being part of the SAAR Network. Other top officials of IIIT have been linked directly to Al Qaeda and provided logistical support to at least two of Al Qaeda’s biggest achievements – the 1998 simultaneous attacks on the U.S. embassies in Tanzania and Kenya; and the bombing, in 2000, of the USS Cole, an American destroyer that was parked at the Yemeni port of Aden. One IIIT officer, Tarik Hamdi, hand delivered the satellite phone that Osama bin Laden used to order the assault on the USS Cole. The IIIT was also the largest “donor” to the World and Islam Studies Enterprise, which simply handed the money over to Sami al-Arian’s Palestinian Islamic Jihad and other terrorist groups.

After Sami al Arian’s arrest, the secretary general of the Palestinian Islamic Jihad, Ramadan Shallah (who was once a professor, along with Sami Al-Arian, at the University of South Florida, and is now based in Syria) identified IIIT as the Palestinian Islamic Jihad’s most important source of funding. In 2000, Youseff Bondansky, then director of the House Task Force on Terrorism, published a book reporting that Shallah and other terrorists had attended meetings with Osama bin Laden to plan a “spectacular” terrorist attack inside in the United States. (Again, Sheikh DeLorenzo himself has not been implicated in terrorism, but his relationships with some terrorists might be pertinent).

Sheikh DeLorenzo was also a top executive (and continues to serve as a consultant for) a large SAAR Network investment fund called the Amana Trust, which is interesting on several levels. For one, the Amana Trust was founded by a Muslim Brotherhood figure named Yaqub Mirza, who was the most important U.S.-based operative in the SAAR Network of terrorist financiers. In 2001, U.S. government agents raided the offices of not just Mr. Mirza, but also at least three other Amana Trust officials because they (and Amana Trust) were suspected of funding terrorism. (Neither Mr. Mirza nor any other Amana Trust officials were ever charged with any crime, and nor were most of the other key figures in the SAAR Network who were targeted by Operation Green Quest investigators).

After raiding Mr. Mirza’s offices, U.S. law enforcement officials said that Mr. Mirza was the incorporator or manager of more than a dozen SAAR Network hedge funds, charities, and financial entities, including Mar-Jac Investments, Mena Investments, Sterling Management Group, and Reston Investments. In addition, Mr. Mirza ran the SAAR Network’s centerpiece, an outfit called the SAAR Foundation, which advertised itself as a charity, but was allegedly an important vehicle for laundering money raised in the United States for jihadist groups. (Again, no convictions were forthcoming, and Mr. Mirza is innocent until proven guilty, but I will report the allegations of government investigators, and let readers make up their own minds).

In 1998, the SAAR Foundation reported that it had an astounding $1.8 billion in annual revenue. After the 9-11 attacks, when the authorities began investigating the foundation for alleged ties to jihadist terrorist groups, the foundation (as first reported by terrorism expert Steve Emerson) issued new books that stated that it had zero income. In other words, $1.8 billion simply vanished, and officials suspected (though never proved) that the money ended up in the hands of terrorist outfits. In another instance, the SAAR Foundation transferred $9 million to an off-shore account held in the name of Humana Charitable Trust, an entity that did not exist.

Mr. Mirza has also been named by FBI investigators and terrorism experts as the principal U.S.-based bagman for Yasin al-Qadi, a Saudi billionaire and Muslim Brotherhood leader who was one of a select number of people labeled (in 2001-2002) by the U.S. government as a “Specially Designated Global Terrorist.” Yasin al Qadi ran an “Al Qaeda front” called the Muwafaw Foundation, which was, according to the U.S. Treasury Department, one of Osama bin Laden’s sources of funding.

However, the U.S. government has refused to hand over evidence to prosecutors and Yasin al Qadi has yet to be convicted of any crime. This has been lamented by some investigators, including former FBI special agent Robert Wright, who insists that Yasin al Qadi was “Al Qaeda’s banker” and that the U.S. government has failed to go after him and others in deference to the government of Saudi Arabia. The U.S. Treasury Department no longer refers to Yasin al Qadi as a “Specially Designated Global Terrorist.” Instead, he and thousands of others are referred to as “Specially Designated Nationals” who are suspected of financing terrorism.

In the late 1990s, Yasin al-Qadi was a major investor, along with a man named Sulaiman al-Ali, in a Chicago company called Global Chemical, which was ostensibly involved in warehousing chemicals for the manufacturing of soap. But when Global Chemical was raided in 1997, government experts said that the chemicals were likely for use in manufacturing explosives or even chemical weapons. (Again, Yasin al Qadi was not charged).

The president of Global Chemical was Mohammed Mabrook, who used the alias Mohamed Elhazeri, and who was, in the 1990s, the director of an outfit called Mercy International. One of Mercy’s board members was Mr. Alamoudi (Sheikh DeLorenzo’s GSISS partner), and Mercy International has been linked to 1) the terrorists who carried out the 1998 bombings of two U.S. embassies in Africa); 2) the masterminds of both the 1993 World Trade Center bombing and the September 11 conspiracy; and 3) Osama bin Laden himself.

Meanwhile, Global Chemical co-investor Sulaiman al-Ali incorporated, along with Yasin al-Qadi’s bagman, Mr. Mirza (Sheikh DeLorenzo’s partner in Amana Trust), a company called Sana-Bell Inc. Sana-Bell’s principal purpose, according to government investigators, was to generate and manage money for the U.S. arm of the International Islamic Relief Organization (IIRO). Mr. Alamoudi was one official of the IIRO in the U.S.

Among the principals of the IIRO’s overseas offices was Mohammed al-Zawahiri, the leader of the military wing of Egyptian Islamic Jihad (which has since merged with al Qaeda). Mr. al-Zawahiri is also the brother of Ayman al-Zawahiri, who was Osama bin Laden’s deputy, and is now the new leader of Al Qaeda. Ayman al-Zawahiri trained jihadi paramilitaries in the Balkans under the auspicies of the IIRO.

Given these connections, it should not be surprising to learn that IIRO  has been identified by authorities as an organization that funds terrorism. The United Nations, at one point, officially declared that the IIRO’s branch offices in the Philippines and Indonesia were Al Qaeda subsidiaries. For a long time, the Philippines office was directed by Mohammad Jamal Khalifa, a high-ranking Al Qaeda figure who was Osama bin Laden’s brother in law.

The IIRO, meanwhile, is a subsidiary of the Muslim World League, which Osama bin Laden identified (in a recorded conversation with Al Qaeda lieutenant Jamal Ahmed al-Fadl) as one of his primary sources of funding. The Muslim World League, which was (according to government investigators) also a big backer of Sami al Arian’s Palestinian Islamic Jihad, Hamas and other jihadist outfits, was incorporated in the United States by Yasin al-Qadi’s bagman, Mr. Mirza. (Despite the official accusations, the IIRO and the Muslim World League have not been convicted of any crimes, and remain in operation today).

While Mr. Mirza handled affairs in the U.S., the Muslim World League’s Peshawar office was managed by Wael Jalaidan, one of Al Qaeda’s founding members. The Muslim World League’s vice president in the U.S., Hassan Bahfazallah, was a member, along with Mr. Mirza, of Sana-Bell’s board of directors.

Mr. Bahfazallah, meanwhile, was also the executive director of an outfit in Chicago called Benevolence International, which received considerable support from Yasin al-Qadi. Benevolence’s overseas offices, including its office in Chechnya, were reported by U.S. officials to be “Al Qaeda fronts” directed by top Al Qaeda operatives, and the DOJ accused the Benevolence office in Chicago (including Mr. Bahfazallah) of having contacts with a Chechen organized crime (and terrorism) syndicate that was trying to obtain nuclear bombs for Al Qaeda.

Nuclear bombs are weapons of mass destruction.

Sheikh DeLorenzo’s Al Safi Trust naked short selling platform is a financial weapon of mass destruction.

* * * * * * * * *

I do not know whether Yasin al-Qadi, Mr. Mirza and the other alleged terrorist financiers are clients of Al Safi Trust, but they have been in other lines of business with Sheikh DeLorenzo, and their relationships deserve scrutiny, just as we should scrutinize business relationships between gun dealers and the mentally disturbed. The difference here being that Yasin al Qadi (“Al Qaeda’s banker”) and Mr. Mirza (Yasin al Qadi’s bagman in the United States) are not mentally disturbed. They are sophisticated hedge fund managers with experience in the U.S. market, and they might be of service to the “Financial Jihad.”

Both Sheikh DeLorenzo and Mr. Mirza were also involved with an outfit called Saturna Capital, and tax returns show that Saturna Captital was a funder of the Holy Land Foundation, named by U.S. prosecutors as the principal U.S. front for Hamas. Prosecutors in the Holy Land Foundation trial were the first to unveil the document outlining a “grand jihad in eliminating and destroying Western civilization…”

Sheikh DeLorenzo also helped run (and continues to serve as a consultant to) the Saturna Brokerage, which, like Saturna Capital, was a unit of the Islamic Society of North America (ISNA), a Saudi funded outfit tied to the Muslim Brotherhood.  Amana Trust also operates under the ISNA umbrella, as does the NAIT investment bank and (see chapter 1 of this series) trader Zuhair Karam’s Bridegview Mosque, whose directors help run the operations of all of these financial entities.(The mosque was also a contributor to the Holy Land Foundation, according to those tax returns).

As of 2010, the president of Saturna Brokerage was Monem Abdul Salam, who was formerly a principal at Dickinson & Co., a brokerage that was a unit of the Stotler Group, which received a pile of subpoenas in 1989 as part of Operation Sour Mash and Operation Hedge Clipper – two famous FBI investigations into financial firms suspected of laundering money for narcotics kingpins and organized crime.

Mr. Salam was not directly implicated in those investigations, but there is no doubt that Dickinson was a dubious brokerage. Several of its leading traders left to found MB Trading, which never bothered to register itself with the authorities until it became the first brokerage ever sanctioned by the U.S. government for catering to a customer in Iran in violation of laws that prohibit doing business with state sponsors of terrorism.

As of 2008, the president of ISNA (the outfit that controls NAIT, Saturna, and Amana Trust) was Muzammil Siddiqi, who also served as president of the Ficq Council, where Sheikh DeLorenzo served as secretary and as a director of the board.  Mr. Siddiqi has since been named as an unindicted co-conspirator in the Holy Land Foundation terrorist financing case.

There are many other reasons to be concerned about the brokerages and other financial outfits operating under the ISNA banner, one of which is that ISNA was co-founded by Palestinian Islamic Jihad leader Sami al Arian, who (we know) has been accused of (though never charged for) providing support to the 9-11 hijackers, and was (according to court documents) taking directions from agents of the Iranian regime operating out of the UN headquarters in New York. This is one reason why NAIT, the multi-billion dollar investment outfit, was named as an unindicted co-conspirator in the government’s case against Sami al-Arian.

ISNA, meanwhile, was named as an unindicted co-conspirator in the government’s case against the Holy Land Foundation. According to United Press International, U.S. government investigators also believed that ISNA had transferred money directly to Al Qaeda, but ISNA has not been charged on that account and likely won’t be charged, perhaps in deference to the Saudi government, which is one of ISNA’s big donors and would be embarrassed by any association with Al Qaeda. The best the FBI can do, apparently, is occasionally mention ISNA officials as  “unindicted co-conspirators” in cases related to Al Qaeda.  As one example, former ISNA vice president Siraj Wahhaj was named by the U.S. government as an “unindicted person who may be alleged” to have participated in the 1993 “Day of Terror” plot, hatched by a diverse assortment of jihadis, all with ties to Al Qaeda.

The mastermind of both the “Day of Terror” plot and the 1993 bombing of the World Trade Center was a religious scholar and Muslim Brotherhood cleric named Omar Abdel Rahman, otherwise known as the “Blind Sheikh” – and he is one of the most important people in the world because his words, more than those of any other Islamic clerics, have inspired the actions of Al Qaeda and other leaders of the grand jihad. He was, before his arrest, also a sophisticated financial operator, and he had co-founded several major financial institutions. For example, he was a co-founder (with Mr. Alamoudi, Mr. Mirza, Yasin al Qadi, among others) of an outfit in Geneva called Bank al Taqwa, which established the Milan Cultural Center said (in 2001) by the U.S. Treasury Department to have been “Al Qaeda’s main operating base in Europe for the movement of men, weapons, and money around the world.”

The Blind Sheikh was until his imprisonment the leader of Al-Gama’a al-Islamiyya, an Egyptian terrorist group. It was long assumed that Al-Gama’a al-Islamiyya was a fierce rival of Egyptian Islamic Jihad, led by Ayman al-Zawahiri, who merged his outfit with Al Qaeda (and is now leader of Al Qaeda). To be sure, al-Zawahiri and the Blind Sheikh had their differences when it came to tactics and strategy (especially with regard to Egypt), but they were nonetheless united in their hatred for the United States. Meanwhile, many jihadis (including Mr. Alamoudi, who often gave speeches calling for the Blind Sheikh’s release from prison) are united in their admiration for the Blind Sheikh because his PhD. from Egypt’s prestigious Al Azhar University, the fount of Muslim Brotherhood thought, gives his fatwahs legitimacy.

Moreover, his fatwahs are bolder than those of any cleric, and they have a particular ring to them. “Tear the Americans and Jews to pieces!  And kill them wherever you find them. Ambush them. Take them hostage…Kill these infidels! Until they witness your harshness. Fight them, and God will torture them…”

And so on…

In his most famous fatwah, the Blind Sheikh was the first to call for the use of airplanes as weapons. In this same fatwah (issued from his prison cell after the 1993 attack on the World Trade Center) the Blind Sheikh was also the first prominent jihadi to publicly declare that jihadis the world over should  join forces to attack the American economy.

The lengthy fatwah is worth a read, but one line can give you a general idea. The Blind Sheikh began with the usual command to “tear [the Americans and Jews] to pieces”. He then specified how this could be done: “destroy their economies, burn their corporations, destroy their peace, sink their ships, shoot down their planes and kill them on air, sea, and land.”

At the 1998 press conference where Osama bin Laden announced his declaration of war against the United States, the Al Qaeda leader gave the assembled journalists laminated cards printed with a photo of the Blind Sheikh and a few words of his famous fatwah – namely, the words that I quoted above. Meanwhile, many other polished jihadist financiers in the SAAR Network had advocated for the Blind Sheikh’s release from prison.

That was in the 1990s, and nobody paid much attention. Given what we now know, however, maybe the SEC or somebody should pay attention to jihadist financiers who might, indeed, be working to  “destroy [our] economies” and “burn [our] corporations” – not with fire, but with the weapons of high-finance.

Again, this is not to suggest that Sheikh DeLorenzo or others in this story are guilty by virtue of their relationships, some of which are once removed. The point is not that Sheikh DeLorenzo himself is a terrorist. It is that some terrorists would likely be aware of Sheikh DeLorenzo’s phantom stock machine, also known as Al Safi Trust, and all the financial entities under the ISNA umbrella. But to the extent that the SEC does pay attention to ISNA (or to the former ISNA officials who are alleged accomplices or associates of Al Qaeda and the Blind Sheikh), it is only to give the SEC stamp of approval to ISNA’s financial empire.

* * * * * * * *

The leaders of the jihad are often portrayed as primitive bumpkins who live in caves and are armed with nothing more dangerous than a few maniacs willing to blow themselves up. This is to ignore the power of the jihadist ideology, which is articulated with great eloquence by countless people who are eminently learned scholars of both Islam and global politics. It is also to ignore the jihad’s fighting capabilities. The jihadis have done much more than dispatch a few terrorists here and there. They have organized and commanded insurgent armies with thousands of soldiers. And these armies have fought, with considerable success, two all-out wars (Afghanistan and Iraq) against the world’s most powerful military.

Perhaps even more important, the notion that jihadis are backward thinkers right out of the seventh century grossly underestimates the jihad’s sophistication as a modern-day global financial operation. And it is not just sophisticated; it is a massive criminal undertaking that has, according the United Nations, laundered more than $1 trillion through the global banking system in the last five years alone.

As one report prepared for the French Directorate of Military Intelligence explains, “the financial network of [Osama] bin Laden, as well as his network of investments, is similar to the network put in place in the 1980s by BCCI [Bank of Credit and Commerce International] for its fraudulent operations, often with the same people…The dominant trait of bin Laden’s operations is that of a terrorist network backed up by a vast financial structure.” [Italics are mine.]

For those who do not know, the Bank of Credit and Commerce International (BCCI) was a massive and complex financial institution, founded by a Pakistani wheeler-dealer named Agha Hasan Abedi in partnership with Sheikh Zayed bin Sultan al-Nahyan, then leader of Abu Dhabi. Among the other key figures in BCCI and its satellites were the Gokal family of Pakistan; Kamal Adham, former head of Saudi intelligence; a close-knit network of Saudi billionaires (some later known to be funders of Al Qaeda); and the ruling family of Dubai, which is (like Abu Dhabi) part of the United Arab Emirates.

In 1991, BCCI was forced to close its doors after New York District Attorney Robert Morgenthau declared that it was the “largest bank fraud in world financial history.” Eventually, prosecutors demonstrated that it had done illegal business with everyone from La Cosa Nostra and Colombian drug cartels to shady arms dealers, terrorist groups, and foreign intelligence agencies. BCCI, as we will see, was also a player, along with “legitimate” U.S. financiers, in the savings and loan “bust-outs” that wrought havoc on the U.S. economy in the late 1980s. Meanwhile, several of BCCI’s affiliates specialized in manipulating the U.S. markets.

We will discuss BCCI at greater length in later chapters of this series, but for now it is enough to know that it is a tenet off both Salafi Islam (the brand of Islam subscribed to by many of the sheikhs involved with both BCCI and the Muslim Brotherhood) and Shiite Islam (subscribed to by a number of BCCI’s key executives) that Muslims should fight their enemies by “plundering their money.” And regardless of  what the motives of BCCI’s founders were in the past, it is clear that most of them are, to this day, major players in the global financial system. They have more than enough firepower to inflict damage on the U.S. markets. And, as the report for French intelligence noted, “directors and cadres of the bank [BCCI] and its affiliates, arms merchants, oil merchants, Saudi investors” have been among the most important financial supporters of America’s Enemy Number One – Al Qaeda.

By way of introducing just a few former BCCI figures who have supported Al Qaeda, I need to relate a story about Benevolence International, the Al Qaeda front that was accused by the U.S.. government of having contacts with people trying to obtain nuclear weapons for Osama bin Laden.

* * * * * * * *

In 2002, U.S. soldiers stationed in Sarajevo raided the local offices of Benevolence International and found a document that referred to the “Golden Chain” – an elite club of twenty Saudi billionaires whom Osama bin Laden had identified as his most important financiers. These financiers not only delivered large sums of money to the prospective nuclear weapons proliferators at Benevolence International, but can correctly be understood to have been among Al Qaeda’s founding fathers.

Some highly regarded authors, such as Steve Coll, who is otherwise reliable, have suggested that the Golden Chain members funded Al Qaeda only in its early years. This is false. Most of them continued to support Al Qaeda after bin Laden declared war against the United States, and there is evidence that at least one of them was funding Al Qaeda as of this writing in 2013.

Regardless of the degree to which they continue to fund Al Qaeda today, it can be safely assumed that the Golden Chain billionaires remain hostile to the United States. It is possible that, for the time being, they no longer financially support violent terrorism against the United States, but there should be no question that they are entirely supportive of the arguably more important “Financial Jihad” and other components of the non-violent “grand jihad in eliminating and destroying Western civilization…”

The Golden Chain document has, meanwhile, received virtually no attention from the media, perhaps because it would seem a bit “crazy” to suggest that the jihad’s most important operatives are not rag-tag fringe fanatics living in caves, but rather the crème de la crème of Saudi society – the people who control much of the world’s oil wealth, the people who own the most powerful manufacturing conglomerates, and the biggest Saudi banks, and the biggest hedge funds, and the biggest stock brokerages, and the Saudi stock exchange itself.

There is something in the wiring of American brains that makes it impossible for even the smartest people in this nation to accept surprising or unpleasant realities. There are a few exceptions, such as Glenn Simpson, who was once The Wall Street Journal’s finest investigative reporter, and who did write about the Golden Chain. But Simpson has left The Journal, and the newspaper has since failed to investigate Saudi ties to terrorism. In fact, it has failed to investigate much of anything at all.

In any event, there is a vast body of additional evidence that most of the people identified as members of the Golden Chain have actively participated in the movement of radical jihad on multiple fronts. And the Golden Chain document has been confirmed to be authentic by, among others, American intelligence officials, multiple FBI agents, Al Qaeda’s most reliable defector Jamal al-Fadl, and the nation’s most learned terrorism experts, including Steve Emerson of the Investigative Project for Terrorism, which possesses the world’s largest non-governmental database of intelligence on Al Qaeda and other jihadist outfits. (Much of the information in this chapter about the “SAAR Network” can be found in various of Emerson’s excellent books).

So we must know more about Al Qaeda’s Golden Chain. For starters, we must understand that these extremely wealthy financiers are bound together by the sorts of relationships that many Americans do not understand. These are not mere business relationships. They are the bonds of brotherhood and blood. They are the bonds of fervor and ancient grievances. They are, moreover, the bonds between people who are united in their disdain for the prevailing order, and whose financial activities have, in many cases, helped subvert that order.

One billionaire member of the Golden Chain, according to the Benevolence International document, was Sheikh Khalid Bin Mahfouz, who had been among the key shareholders of BCCI, and had paid more than $200 million to settle charges for his role in that massive criminal enterprise. Sheikh Mahfouz, who passed away in 2009, had also founded National Commercial Bank, which is the single largest financial institution in the Middle East.

Some of Sheikh Mahfouz’s companies – such as Al Khaleejia, SEDCO, and the Saudi Sudanese Bank – have done business directly with companies that were founded by Osama bin Laden. And it was Sheikh Mahfouz who originally set up the Muwafaq Foundation, the outfit that was managed by Yasin al-Qadi until the U.S. government declared Muwafaq to be an “Al Qaeda front” and labeled Yasin al-Qadi as a “Specially Designated Global Terrorist.”

While he was alive, Sheikh Mahfouz denied any involvement with Al Qaeda, and filed lawsuits against journalists and researchers (including the prominent Rachel Ehrenfeld, now director of the Economic Warfare Institute, and author of an excellent book, “Funding Evil”) who reported his ties to the Muwafaq Foundation, Benevolence International and other Al Qaeda fronts. After the lawsuits, Sheikh Mahfouz’s name rarely appeared in print.  Meanwhile, some American pundits claimed that Saudi billionaires like Sheikh Mahfouz had donated to Al Qaeda only to avoid being attacked, like frightened shop owners paying protection money to the local Mafia thug. These pundits misunderstand the nature of Saudi society, the two most important features of which are Salafi Islam (one of the foundations of the jihadist ideology) and the inviolability of personal relationships.

Sheikh Mahfouz  not only believed in the grand jihad, but his relationship with the bin Laden family went back decades. Osama bin Laden’s father, Mohammed, and Sheikh Mahfouz were best friends, and it was Sheikh Mahfouz who provided the original finance that allowed Mohammed to build Saudi Arabia’s largest construction company. When Sheikh Mahfouz filed lawsuits against the few journalists who sought to expose his ties to Al Qaeda, the families of the victims of the 9-11 attacks filed lawsuits against Sheikh Mahfouz for providing financial support to the people who killed their loved ones.

And I am thinking I might file a lawsuit against Sheikh Mahfouz’s estate seeking damages for all the stress that I have endured as a result of learning that Sheikh Mahfouz and his friends not only were (and, in most cases, still are) among the world’s destructive financial criminals, but also had billions of dollars, some of which ended up in the hands of people like  Mohamed Loay Bayazeed, who tried, according to the FBI, to “obtain uranium for Osama bin Laden for the purpose of developing a nuclear weapon.”

* * * * * * * *

Another member of the Golden Chain was Sheikh Saleh Abdullah Kamel, owner of Dallah Albaraka, a conglomerate involved in banking, stock trading, construction, and jihadist media. In addition, Sheikh Kamel, who is linked to the Muslim Brotherhood and has financed Sami Al-Arian’s Palestinian Islamic Jihad, owns the powerful Saudi al-Baraka Bank, which, according to U.S. government investigators, provided much of Al Qaeda’s financial infrastructure in Sudan during the 1990s. Sheikh Kamel also gave Hamas, the jihadist outfit that controls the Gaza strip, more than $20 million so that Hamas could open a bank of its own.

The new Hamas financial institution, which is called al-Aqsa Bank, quickly formed a joint venture with Citibank. That joint venture was quite lucrative for Citibank, which may have been willing to turn a blind eye to illicit financial transactions. In 2001, the U.S. Treasury Department advised Citibank that it was operating a joint venture with a bank controlled by Hamas, and the U.S. Treasury Department advised Citibank that it might want to disband this joint venture. Citibank, however, ignored the advice. (Neither Sheikh Kamel nor any other Golden Chain billionaire has been charged with any crime related to the financing of terrorism).

U.S. authorities have taken no substantive action against Sheikh Ibrahim Muhammad Afandi, a Golden Chain billionaire who owns some of Saudi Arabia’s most influential businesses, including the Saudi Industrial Services Company, the Great Saudi Development & Investment Company, and the Arabian Company for Development and Investment Limited. Sheikh Afandi also controls BSA Investments, a big private equity fund active in the U.S.

Then there is Abdel Qader Faqeeh, a member of the Golden Chain club and chairman of major corporations and financial institutions, including Bank Al Jazeera and the Savola Group, which recently merged with Azizia Panda to become Saudi Arabia’s 13th largest company. A business partner of Sheikh Faqeeh is Golden Chain member Sheikh Saleh al-Din Abdel Jawad, who is the CEO of the blue chip General Machinery Agencies manufacturing company in Jeddah.

Sheikh Faqeeh also had a joint venture business with the above-mentioned Sheikh Mahfouz. Indeed, each Golden Chain member has some sort of business partnership with each of the other Golden Chain members – one reason why I say that these people need to be viewed as not just a club, but as a family. I will not bore the reader with a long recitation of every financial transaction that ties these jihadist financiers together, but I will mention a few, just to erase any question as to whether the relationships exist.

For example, National Commercial Bank, owned until recently by Sheikh Mahfouz, is a partner in a multi-billion dollar investment outfit called the Middle East Capital Group, which is partly controlled by Sheikh Rahman Hassan Sharbatly – who was another member of Golden Chain club. Sheik Sharbatly is also a partner, with Sheikh Faqeeh, in a unit of Sheikh Faqeeh’s Savola Group. In addition, Sheikh Sharbatly is a board member and major shareholder of Beirut Ryad Bank SAL, Egyptian Gulf Bank, and several other major financial institutions.

Meanwhile, Sheik Sharbatly and Sheikh Mahfouz were both board members of the Saudi Arabian Refinery Company, which refines much of the world’s oil supply. This brings to mind the report that I mentioned at the outset of this story – the one commissioned by the U.S. Defense Department’s Irregular Warfare Support Program.  That report speculates that one component of the possible financial attack on the U.S. economy in 2008 might have been the manipulation of oil prices to excruciating highs in the summer of that year.

That seems like a possibility that is worth considering, especially in light of Osama bin Laden’s proclamations about the “absolute necessity of using the oil weapon.” Another reason to ask whether oil prices might have been manipulated is that the membership of the elite Golden Chain club included Sheikh Abdel Hadir Taher and Sheikh Ahmad Turki Yamani – two former Saudi officials who were among the masterminds of the 1973 oil embargo that crippled the U.S. economy–retaliation for America’s support of  Israel in the 1973 Yom Kippur War.

Sheikh Taher, in addition to being a Golden Chain member and the former governor of the Saudi state oil company Petromin, has also served as director of Saudi European Bank, a big financial institution that is important to the stability of global economic order.  Al Qaeda Golden Chain member Sheikh Yamani is a former Saudi minister of petroleum. He is also a former director of Saudi Aramco, which is the largest oil company in the world.

In addition, Sheikh Yamani presides over Investcorp, an investment firm that he founded. Actually, it’s not just an investment firm; it’s a market-moving behemoth – one of the largest hedge fund and private equity outfits in the world, with more than $50 billion under management. Investcorp has made a deep imprint in the American markets, and has been involved in everything from short selling to the trading of self-destruct CDOs. As for what sort of short selling Investcorp engages in, we need only know that Ivestcorp is a client of Sheikh DeLorenzo’s Al Safi Trust phantom stock machine.

Investcorp was also a pioneer, and continues to be one of the few major players in the world of so-called PIPEs deals, also known as “death spiral” finance. Investcorp has not been implicated in any crime related to its PIPEs deals, and I am not suggesting that Ivestcorp has done anything technically illegal, but PIPEs deals generally are considered to have been a major scourge on the American markets. PIPEs, or “Private Investments in Public Equity” are simply transactions that see the investors buying stock directly from companies rather than on the open markets. But PIPEs investors often end up destroying the company to which they are supposedly serving as benefactors.

Since PIPEs finance dilutes shareholder value, a company that does a PIPEs deal often sees its stock price decline. When this happens, short sellers (often naked short sellers who are colluding with the outfit that provided the PIPEs finance) attack the company, causing its stock price to drop. The more it drops, the greater the number of shares are owed to the PIPEs financier. The greater number  of shares, the greater that drop; and so on. Hence the term,  “death spiral” finance. Once the stock price of a PIPEs victim is mauled, the finance is cut off, and the company goes bankrupt, delivering big profits to the short sellers (i.e. profits that far exceed the cost of providing the PIPEs finance in the first place).

Again, this is not to suggest that Investcorp has necessarily done anything illegal, and we cannot say with certainty that its PIPEs business follows the same modus operandi of most other PIPEs dealers. But the emergence of the PIPEs industry has, without doubt, been a scourge on the markets. As numerous court cases attest, it has destroyed countless companies and countless jobs. Basically, it is a not-insignificant reason why America’s “miserable house” (as that Muslim Brotherhood document called it) is, in fact — miserable.

* * * * * * * * *

Sheikh Sulaiman Abdul Aziz al-Rajhi is not miserable. He’s the patriarch of the wealthiest family in Saudi Arabia, and thus one of the 100 richest people in the world. He is jolly and well. So, naturally, he was also a member of the Golden Chain, the elite club of Al Qaeda’s 20 most important financiers.

Maybe because the twenty members of the Golden Chain club are the most prominent people in Saudi Arabia, the U.S. government does not label them as financiers of the grand jihad.  It does not take steps to shut down their bank accounts or bar them from trading in the U.S. markets. It does not even dare utter their names, perhaps because to do so would embarrass the Saudi government, which is ostensibly a U.S. ally.

When Congress issued its final report on the Al Qaeda attacks on New York and Washington, it contained 28 pages that reportedly detailed Saudi ties to Al Qaeda. But when the report was released to the public, the 28 pages about the Saudis were censored, so ordinary people could not read them. A full 28 pages – with no words; nothing but big blocks of black ink. Thus, it is left to independent jihad experts to sort out many of the connections. Steve Emerson and his Investigative Project on Terrorism have done especially hard work in this regard. Some former top government officials have said that Emerson is better informed about the jihad than the government itself. But Emerson and other people who have done excellent research are largely ignored by the media, which will not report the facts unless they have been stated explicitly by some official spokesman. And the official spokesmen have nothing bad to say about Saudi billionaires, regardless of whether they fund terrorism.

Indeed, Saudi billionaires with ties to terrorism have deployed their wealth to “capture” some elements of Washington. This “deep capture” has been the state of affairs since at least the 1980s, when Sheikh Mahfouz (the future founder of what the U.S. Treasury Department called an “Al Qaeda front”) and other BCCI figures began investing in banks and other companies with prominent figures in both the Democratic and Republican parties. When the BCCI scandal broke, it was widely reported that Sheikh Mahfouz and other Saudis (some, such as Kamal Adham, with links to Saudi intelligence) had invested with prominent figures of the American political establishment in order to gain influence over American government policy. But nothing was done about it, and the influence increased exponentially in the years that followed.

Therefore, it is not an exaggeration to say that some elements of Washington have been “captured” by billionaires who are not only destructive financial criminals, and who are not merely casual financiers of terrorism, but who are also regarded as being among the leaders of “The Financial Jihad” and what that famous Muslim Brotherhood document described as the larger “Grand Jihad in eliminating and destroying Western civilization from within…”

At any rate, you won’t read about it in the media, but it is clear that Sheikh al-Rajhi, the wealthiest man in Saudi Arabia (and an honorary member of the American establishment) is an important leader of the grand jihad. Aside from having been an Al Qaeda Golden Chain member, he was the principal force behind the U.S.-based SAAR Network of jihadist entities (many of which were named in that Muslim Brotherhood document as being precisely those entities that were meant to lead the “Grand Jihad in eliminating and destroying Western civilization from within…”). In fact, the SAAR Network was named after Sheikh al-Rajhi himself. The initials, S.A.A.R., stand for Sulaiman Abdul Aziz al-Rajhi.

Most of the other Golden Chain members were also involved with the SAAR Network financiers operating in the United States. For example, Sheikh Afandi and Sheikh Kamel were board members of Sana-Bell, the outfit run by “Specially Designated Global Terrorist” Yasin al Qadi’s bagman, Mr. Mirza (who, as I mentioned, was the central U.S.-based figure in the SAAR Network). Also a board member of Sana-Bell, you will recall, was Mr. Bahfzallah, head of Benevolence International, the outfit that was dealing with people who were shopping for nukes.

Yasin al Qadi’s lawyer, Cherif Sedky also worked for Sheikh Mahfouz. And this same lawyer represented Sheikh Rajhi when the FBI began to ask how it came to be that $1.8 billion dollars from the SAAR Foundation disappeared, most likely into the hands of other jihadis.

Given his important role in the jihad, it is fair to assume that Sheikh al-Rajhi harbors some disdain for not just Western civilization, but also the prevailing economic order. At the same time, Sheikh al-Rajhi is one of the most important players in the global financial order, a person who is perfectly capable of transforming or even undermining it. Indeed, it is fair to say that few men have more sway over “the system” than Sheikh Sulaiman Abdul Aziz Rajhi.

Said to be a whiz with numbers, Sheikh Rajhi directs multiple hedge funds that manage many billions of dollars, several stock brokerages, and the massive Al Rajhi Bank, which is the most venerable of the elite financial institutions that control the Stock Exchange of Saudi Arabia, also known as the Tadawul. A 2013 report issued by a U.S. Senate investigative committee revealed that Al Rajhi Bank was still (as of 2013) dealing with Al Qaeda, and that it was laundering Al Qaeda money through HSBC, the prestigious British bank, but, of course, Al Rajhi has been charged with no crime on that account (HSBC paid a relatively small fine for this and other money laundering infractions).

Sheikh Rajhi’s companies have around $100 billion in cash at their disposal. All told, the financial fire power of the Golden Chain exceeds that of most mid-sized nations.

But, rest assured, jihadis are just bumpkins in caves.

* * * * * * * * *

Despite the death of Osama bin Laden, the jihad’s sophisticated financial operation remains entirely in place. Moreover, it is doubtful that the Securities and Exchange Commission is monitoring the activities of the billionaire financial wizards who were members of Al Qaeda’s Golden Chain. Certainly, it has never prevented any member of the Golden Chain from engaging in financial schemes (such as self-destruct CDOs and “death spiral” finance) that have done damage to the U.S. economy.

Indeed, as we know, the SEC has made it easier for these people to legally manipulate the markets by allowing people such as Sheikh DeLorenzo (who, as a prominent member of the SAAR Network, was certainly on good terms with the Golden Chain) to operate trading platforms, such as Al Safi Trust’s naked short selling operation, that damage the U.S. markets. Meanwhile, Wall Street’s largest brokerage and investment houses stumble over themselves to do business with the Golden Chain, and with other financial behemoths that might not be entirely committed to keeping the U.S. economy in good health.

One such behemoth is the financial empire of Dubai’s ruler, Sheikh Mohammed bin Rashid Al Maktoum — or “Sheikh Mo,” as he is affectionately called in the West.  Sheikh Al Maktoum, whose family members were among the controlling shareholders of BCCI’s criminal enterprise, now operates, among other entities, the Dubai International Finance Center, which houses Sheikh DeLorenzo’s Al Safi Trust (set up in partnership with Sheikh Mo) and countless hedge funds, many of them intertwined with Dubai’s sovereign wealth fund.

The Dubai International Finance Center’s stated mission is to advance shariah compliant finance (such “compliance” being defined by the Muslim Brotherhood), and it has at its disposal more than a trillion dollars. Frank Gaffney, former assistant secretary of defense for international security and one of the nation’s leading experts on the Muslim Brotherhood, correctly insists that shariah compliant financial products “threaten what is left of the integrity of our free market system. Worse yet, they – and the theo-political-legal doctrine, Shariah, from which they spring – pose a real threat to our society and form of government.”

On the surface, it seems that there is nothing wrong with people creating shariah compliant financial products, even if they cater to a radical interpretation of Islam. People have a right to be radical and to create radical financial products. Indeed, it took me a long time to believe that shariah finance posed any threat whatsoever. My instinct was to believe that it was merely an effort to cater to people who are devoutly religious, no more dangerous than Halal beefsteak.

However, it is prudent to consider whether there is more than religion behind the astounding growth of shariah compliant finance in recent years. Indeed, we must understand that the new and radical interpretation of shariah “compliance” is overtly anti-American, and has been developed by leaders of the jihad as a means to challenge the U.S. financial order. This was well-documented in a book called “Understanding Sharia Finance”, by Patrick Sookhdeo, then director of the Institute for the Study of Islam and Christianity.

Paul Bracken, professor of management and political science at Yale University, notes that shariah compliant finance has become a powerful force and raises “the prospect that Wall Street could be knocked out of action [with] strategic implications for the United States and for the entire global system of finance.”

As for Sheikh Al Maktoum, the eminence grise of shariah “compliant” finance, many in Washington consider him to be an important ally of the United States. But it is also true that Sheikh Al Maktoum considers one of his most important allies to be the regime in Iran, which would like to see the United States obliterated. Meanwhile, Sheikh Al Maktoum and his family have been among the biggest supporters of organizations that are carrying out the “Financial Jihad.”

For example, Sheikh Al Maktoum’s family, along with the Muslim Brotherhood, the Golden Chain Saudis, and some factions of the Saudi government are among the biggest contributors to ISNA, an organization whose depredations I have partially described. A charity founded by Sheikh Al Maktoum also donated $50 million to the Council on American Islamic Relations, an ISNA-tied outfit that grew out of the Islamic Association of Palestine, which was the U.S. propaganda arm of Hamas. Numerous CAIR officials have been alleged to have ties to the jihad, which might explain why CAIR has plotted ways to secure the release from prison of the Blind Sheikh.

In Europe, where Sheikh Al Maktoum is received warmly (the BBC recently called him an “enlightened dictator”), Muslim Brotherhood spiritual leader Yousef al-Qaradawi (the cleric who has issued calls for “Financial Jihad”) runs the European Council for Fatwa and Research, which has played a key role in fostering the development of shariah “compliant” finance. That outfit was funded almost entirely by Sheikh Al Maktoum and his family until it was implicated by authorities for having ties to violent jihadists. (Despite their accusations, authorities did not file charges against the organization).

Meanwhile, Dubai, with Sheikh Al Maktoum’s acquiescence, has long served as an important operational hub for some the world’s most notorious organized crime figures, some with direct ties to jihadist groups. For example, Indian mafia kingpin Dawood Ibrahim was, until he moved to Karachi to live under the protection of the Pakistani intelligence service, one of Dubai’s most honored and ostentatious residents, regularly holding lavish parties at his landmark white mansion – parties attended by prominent figures in the world of high finance (some of whom I will introduce in upcoming chapters), and also by members of Dubai’s ruling family.

Mr. Ibrahim had the full protection of Sheikh Al Maktoum until Dubai was pressured by the international community to send him packing. And Mr. Ibrahim was no ordinary mobster. He was, as I mentioned, intimately intertwined with the operations of Al Qaeda and other jihadist groups – the only person in the world to be labeled by the United States government as both a “Global Narcotics Kingpin” and a “Specially Designated Global Terrorist.”

Former ABC News journalist Gretchen Peters, a friend and work colleague of mine when we both lived in Cambodia, has published an excellent book about the nexus between jihadists and the heroin trade. One CIA official whom Peters interviewed for the book noted that  “if you want to know what Osama bin Laden is up to, you have to understand what Dawood Ibrahim is up to.”

Another close friend of Sheikh Al Maktoum was Viktor Bout, a Russian organized crime figure who was, for a long time, flying cargo planes filled with weapons from Dubai to Taliban and Al Qaeda  redoubts in Afghanistan and Pakistan. Viktor Bout, like Dawood Ibrahim, operated with the full support and protection of the Dubai government until Interpol put out an arrest warrant for him. Then he moved to Moscow, where he enjoyed the protection of Russian prime minister Vladimir Putin until he was lured to Thailand and arrested by the FBI.

Viktor Bout was also closely tied to Abu Dhabi’s ruling family, whose leading members (like Dubai’s ruling family) probably first came into contact with the underworld while they were presiding over the criminal operations of BCCI. Some cargo planes that Bout used to smuggle weapons to Afghanistan were registered as belonging to a company called Flying Dolphin, which was owned by Sheikh Mansour Al Nayan, the present ruler of Abu Dhabi.

Then there is the famous story (widely reported by U.S. officials) of why President Bill Clinton failed to kill Osama bin Laden. Soon after Al Qaeda’s 1998 attacks on U.S. embassies in Tanzania and Kenya, the CIA located Osama bin Laden and reported that the Emir of Jihad was hosting some of his closest friends at a party in a remote corner of Afghanistan. The Al Qaeda leader and his friends were spending their days hiking in the mountains and hunting with falcons, then retreating to an Al Qaeda training camp to drink tea and (perhaps) talk of subversive notions.

Figuring that there would not be much time before Osama would vanish again, the U.S. military told President Clinton that this was the ideal moment to blow the Al Qaeda leader to smithereens with a precision-guided Hell-Fire cruise missile. The generals were ready to pull the trigger, but Clinton and his cabinet stopped them. They aborted the mission because Osama bin Laden and his friends were having a party.  And these friends were all from Dubai. In fact, they were among the most prominent members of Dubai’s ruling family.

Sheikh Al Maktoum’s family and the leaders of Al Qaeda had finished hunting and were relaxing in the tents that the Dubai royals had brought with them to Afghanistan – house-sized luxury tents equipped with giant electricity generators, and decorated with fine carpets, and fabrics laced in gold. No doubt, Osama bin Laden regaled the Dubai ruling family with stories of his exploits, and the Dubai ruling family members perhaps responded with praise for their host’s victories against the United States.

At any rate, the CIA watched the satellite images. The generals asked Bill Clinton if they should fire the missile. And Bill Clinton said, “No” — because, of course, Dubai’s royals were American allies. As George Tenent, who was then the director of the CIA, later put it, Clinton could not take this rare opportunity to kill Osama bin Laden because the missile strike “might have wiped out half the royal family of the UAE.”

Put differently, one might say that “half the royal family of [our ally] the UAE” was partying with Osama bin Laden.

That’s some ally.

Well, never mind, say America’s elite – if Sheikh Al Maktoum is supporting jihadis, it is only a matter of political expediency. Perhaps. But, in the end, it doesn’t matter whether the politics are expedient or not. What matters is the end result. And it is probably safe to assume that the Dubai royals who went on hunting expeditions in Afghanistan with Osama bin Laden may be (at least to some extent) sympathetic to the jihad. That is, they have, to a degree, been possessed by a subversive notion – that “the system”, as epitomized by the United States, can be undermined.

But the billionaire sheikhs of the Middle East – whether they be members of ruling families, funders of the SAAR Network, or members of Al Qaeda’s Golden Chain – are not the only potential threats to America’s economic well-being. As I mentioned at the outset of this story, the president’s national security staff has suggested that there is “nexus” between jihadist financiers, organized crime, agents of rogue states, and “legitimate” financial operators in the United States. This “nexus” has contributed to the great meltdown of 2008, and to the instability of the global financial system that continues to this day.

Before we discuss our present predicament, however, we need to understand more about the nexus. And to do that, we must first go back in history. We must, for starters, further examine the BCCI enterprise. We must, in addition, consider what occurred after BCCI collapsed in 1991.

One thing that occurred soon after BCCI collapsed in 1991, of course, was that BCCI was revealed to be the biggest banking fraud in the history of world finance. More important, that same year, 1991, a Muslim Brotherhood leader named Hasan al Turabi (then also a top official in the government of Sudan) founded an outfit called the Islamist International, appointing Osama bin Laden to serve as chairman. The purpose of the Islamist International was to unite the Muslim Brotherhood, affiliated terrorist organizations, and their state sponsors behind a common mission.

That mission was partly articulated in the famous Muslim Brotherhood document (published that same year, 1991) outlining plans to wage a “Grand Jihad in eliminating and destroying Western civilization from within…” There were also numerous violent terrorist attacks planned at meetings of the Islamist International. However, Osama bin Laden’s most important mission as chairman of the Islamist International was not to plan acts of violent terrorism. His most important mission–“The Financial Jihad”–was to help lead a Muslim Brotherhood initiative to replace the BCCI enterprise with an enterprise that would be similar in every respect except that it would exceed BCCI in scope and destructive power.

Yossef Bondansky, then director of the House Task Force on Terrorism, reported in his seminal 2000 book on Osama bin Laden: “The collapse of the BCCI and the shock waves that were still reverberating throughout the Muslim world could not have come at a worse time. Turabi had always known the importance of a reliable financial system to support and sustain Islamist activities.”  The Islamist International “urgently needed an expert to salvage whatever was possible and rebuild a global financial system [to replace the BCCI enterprise]. By then Osama bin Laden was the most qualified individual in Khartoum to untangle this financial mess. In late summer 1991, Turabi approached bin Laden and asked for help.”

This, of course, raises some questions.

For example: What, exactly, was BCCI, and why was it so important? What, exactly, did Osama bin Laden do after he was appointed to deal with the collapse of BCCI? Precisely what sort of “global financial system” did Osama bin Laden and his associates build from the remains of BCCI, and what is the status of that global financial system today? The director of the House Task Force on Terrorism noted that this financial network—a global financial empire that was built by Osama bin Laden, among others more important than him—eventually extended all the way from Osama bin Laden’s cave in the Hindu Kush to the caverns of Wall Street, but what else do we know about it? And why has this story never appeared in The Wall Street Journal?

In fact, Osama bin Laden played a role in building what is not only one of the greatest financial empires the world has ever known, but also one of the world’s most destructive transnational organized crime (and terrorism) syndicates, so we really ought to ask: precisely what lines of business (aside from terrorism) did this amazing enterprise pursue? What lines of business is it pursuing today? And is this good news for the American economy?

Those are questions that will be answered in later chapters of his series.

To be continued…Click here to read Chapter 3 of this series

Mark Mitchell is a journalist who spent most of his career working as a correspondent for mainstream media publications before joining DeepCapture.com.

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