Another Day, Another Shameful Ruling on Police State Spying

Recently, federal district court Judge Cormac J. Carney of the Central District of California, dismissed a civil rights lawsuit filed against the Federal Bureau of Investigation (FBI) on grounds of bogus "state secrets privilege" claims made by the Obama administration.

That suit, Fazaga v. FBI, was brought by the American Civil Liberties Union (ACLU) and the Council on American-Islamic Relations (CAIR). The plaintiffs forcefully argued that the Bureau illegally spied on Muslim residents in southern California, targeting them for "special handling" solely on the basis of their religious beliefs.

The atrocity played out in Carney's court against a citizens' right to due process under the Fourth and Fifth Amendments, constitutional guarantees that extend to all government actions and proceedings that can result in harm to an individual either civilly or criminally, is only the latest in a long line of capitulatory rulings by a diminished Judicial Branch.

Under Bush, and now Obama, the Justice Department demanded that Fazaga be thrown out on the most specious grounds: that presidential authority in all matters relating to national security cannot be challenged by those who are the victims of predatory actions, regardless of their egregious nature, by the secret state.


Denouncing Carney's cave-in to the Justice Department, Ahilan Arulanantham, the deputy legal director for the ACLU of Southern California said: "Under today's ruling dozens of law-abiding Muslim Americans in Southern California will never know if the government violated their constitutional rights. Every American should be deeply troubled when the government can win dismissal of a case involving the most basic constitutional rights by claiming that it is acting, in secret, in the interests of national security. The notion that our basic safety requires relinquishing our most cherished liberties is as inconsistent with the Constitution as it is frightening."

But in a collapsing Empire, where the indefinite detention or even the liquidation of "terrorism" suspects, alongside illegal warrantless spying, the trampling of First Amendment rights to free speech and assembly, the persecution of government whistleblowers who bring high state crimes to light, are now deemed unreviewable by any court by a quasi-fascist "Unitary Executive."

According to a case summary posted by the ACLU of Southern California, Peter Bibring informed us: "From the term 'state secrets,' you might think the case involved spies, hush-hush arrangements with foreign governments, or people detained at secret foreign prisons--as some state secrets cases do. But this one involves the FBI's investigation into law-abiding U.S. citizens and residents in Orange County, California, called 'Operation Flex'."

"In June 2006," Bibring wrote, "FBI agents recruited Craig Monteilh, a man with a file full of felony convictions, to pose as a convert to Islam at one of the largest mosques in the area. The FBI paid Monteilh to spend the next fourteen months meeting as many members of the Muslim community as he could. He made audio recordings of every interaction, as he gathered names, telephone numbers, e-mails, political and religious views, travel plans, and other information on hundreds of individuals in the Muslim community. According to Monteilh's own sworn statement, he was told to pay special attention to community leaders and those who seemed especially devout."

FBI snitch Monteilh, a steroid-enhanced "fitness freak" and con man, who the Orange County Weekly reported had once told an unwitting dupe of one of his scams, "my body is my business card," that is, before "liberating" her of tens of thousands of dollars even as he pocketed upwards of a quarter million more from the Bureau, was eventually sent back to state prison for grand-theft.

"When asked if the FBI had particular targets in the Muslim community that they wanted to have investigated, Monteilh said, 'No. They said the targets would come to me.' In other words," Bibring averred, "Operation Flex was a fishing expedition that targeted people because of their religion. But in the end, after Monteilh began incessantly about jihad and violence, members of the community did exactly what you're supposed to do: they reported him to the FBI. After hundreds of hours of Monteilh's time and thousands of taxpayer dollars 'Operation Flex' resulted in zero criminal convictions. No one was ever even charged with a terrorism offense."

Monteilh's "cover" was blown when members of the Islamic Center of Irvine grew increasingly suspicious--and disturbed--by his provocative chatter about "jihad" and "terrorism." Two members of the Orange County mosque contacted Hussam Ayloush, executive director of CAIR's Southern California chapter, and told him that during a car ride Monteilh said he "wanted to blow up buildings."

Ayloush contacted J. Stephen Tidwell, an FBI assistant director who mendaciously told a gathering at the Islamic Center of Irvine in 2006 that the FBI "would never spy on mosques."

"'I am calling to report a possible terrorist'," Ayloush told the assistant director, the Weekly disclosed. "'He is a white convert in Irvine.' As soon as Ayloush uttered those words, he says Tidwell cut him off. 'Okay,' he reportedly replied. 'Thanks for letting us know'."

"Ayloush offered to provide the FBI with the man's name and address, but, he says, Tidwell told him to give the information to the Irvine P.D., which he promptly did. 'Neither the FBI nor the Irvine P.D. ever bothered to talk to the guy after he was reported,' Ayloush says."

Instead of "preventing terrorism" however, Operation Flex like a score of other filthy entrapment exercises run by the FBI worked precisely as intended: as a means to terrorize the Muslim community and let the "hajis" know who's boss.

As Pulitzer Prize winning Associated Press investigative journalists Adam Goldman and Matt Apuzzo reported last week, the New York City Police Department's sinister Demographics Unit, tasked with "spying on Muslim neighborhoods, eavesdropping on conversations and cataloguing mosques ... never generated a lead or triggered a terrorism investigation."

"The Demographics Unit is at the heart of a police spying program," Goldman and Apuzzo wrote, and was "built with help from the CIA." With millions of taxpayer-provided "homeland security" handouts, the unit "assembled databases on where Muslims lived, shopped, worked and prayed. Police infiltrated Muslim student groups, put informants in mosques, monitored sermons and catalogued every Muslim in New York who adopted new, Americanized surnames."

"But in a June 28 deposition as part of a longstanding federal civil rights case," AP reported, "Assistant Chief Thomas Galati said none of the conversations the officers overheard ever led to a case."

"'Related to Demographics,' Galati testified that information that has come in 'has not commenced an investigation'."

But when it comes to evidence of widespread FBI abuse uncovered in Fazaga, we're supposed to believe that none of this can be discussed, let alone litigated in open court, since to do so would let the "terrorists" win!

The court, caving-in to arguments made by Hope and Change™ fraudster Barack Obama's Justice Department, tossed the case on the basis of assertions made by government attorneys that to allow the plaintiffs their day in court "would require or unjustifiably risk disclosure of secret and classified information regarding the nature and scope of the FBI's counterterrorism investigations, the specific individuals under investigation and their associates, and the tactics and sources of information used in combating possible terrorist attacks on the United States and its allies."

In ruling against victims of the Bureau's anti-Muslim witchhunt, Judge Carney averred that "the state secrets privilege is specifically designed to protect against disclosure of such information that is so vital to our country's national security."

"The state secrets privilege strives to achieve a difficult compromise between the principles of national security and constitutional freedoms," Carney wrote.

But as Shahid Buttar, the executive director of the Bill of Rights Defense Committee BORDC), wrote: "First, by invoking the state secrets privilege, the decision extends the judiciary's capitulation to executive lawlessness across the Bush & Obama administrations. Since initially emerging as a narrow evidentiary doctrine (in a 1953 case that ultimately proved to be part of a Pentagon coverup), federal courts have recently accepted the privilege as a wholesale immunity doctrine, a 'get out of jail free' card for executive abuses of various kinds."

If we were inclined to believe the good judge (we're not), with logic worthy of a Monty Python skit, Carney claimed that "The state secrets privilege can only be invoked and applied with restraint, in narrow circumstances, and infused with judicial skepticism. Yet, when properly invoked, it is absolute--the interest of protecting state secrets cannot give way to any other need or interest."

Accordingly, Carney, appointed to the federal bench by that champion of civil liberties and human rights, George W. Bush, asserted that "the proper application of the state secrets privilege may unfortunately mean the sacrifice of individual liberties for the sake of national security."

Seeking to immunize himself from charges that he is little more than a toady for Executive Branch mandarins, Carney went to great lengths to cover his juridical ass-ets: "Plaintiffs raise the specter of Korematsu v. United States... and protest that dismissing their claims based upon the state secrets privilege would permit a 'remarkable assertion of power' by the Executive, and that any practice, no matter how abusive, may be immunized from legal challenge by being labeled as 'counterterrorism' and 'state secrets.' But such a claim assumes that courts simply rubber stamp the Executive's assertion of the state secrets privilege. That is not the case here."

Perish the thought! After all, only anti-patriotic, terrorist-loving, constitutional "extremists" would countenance otherwise! Never mind that the Bush and Obama regimes have raised the specter of "state secrets" to dismiss a score of cases relating to kidnapping and forced disappearance ("extraordinary rendition"), indefinite detention, torture, illegal wiretapping and state murder.

Last year, U.S. Attorney General Eric Holder, filed a declaration on the case which claimed that various aspects of the case would be "too sensitive" to be aired in open court. Indeed, according to Holder several categories of information that would be presented by plaintiffs' attorneys "could reasonably be expected to cause significant harm to the national security."

This is the same Eric Holder who as Deputy Attorney General under President Clinton, pimped himself out to secure the last-minute pardon of fugitive financier and Democratic Party moneyman Marc Rich before the Great Triangulator left office.

Commenting on Holder's role in securing Rich's pardon, investigative journalist Jim Hougan wrote: "Other than Richard Nixon, I can think of no other felon, or quasi-felon, who has been pardoned for his crimes without having first been convicted of them. Perhaps the explanation is that Rich and [Pinky] Green have been helping their countries--the United States and Israel--behind the scenes. Like Hollywood tycoon Arnan Milchan, who is widely alleged to have long used his businesses to help finance the operations of the Mossad, former 20th Century Fox honcho Rich may well have done the same...if not for the Mossad, then perhaps for the CIA."

But wait, there's more!

Proving once again that crime pays, if you're well-connected, upon leaving office Holder, a shrewd operator who knows which side his bread is buttered, joined the white shoe law firm of Covington & Burling. From his D.C. perch, Holder helped negotiate an agreement with the Justice Department over charges that Chiquita Brands International had ponied-up "protection money" to the drug-dealing Colombian death squad, the Autodefensas Unidas de Colombia, or AUC.

Close allies of former Colombian President Álvaro Uribe, three of whose relatives were recently extradited to the United States where they face cocaine trafficking charges, only after American taxpayers had doled out billions of dollars to "fight drugs" under Plan Colombia that is, Chiquita hired far-right AUC killers to murder trade unionists, peasant activists and human rights' campaigners to protect their blood-soaked "investments."

According to case files, Chiquita arranged payments totaling millions of dollars during a 1997 meeting between late AUC, Israeli-trained führer Carlos Castaño and officials from Chiquita subsidiary Banadex.

At the time, Colombia's attorney general, Mario Iguarán, charged that Chiquita had used one of its ships to smuggle some 3,400 AK-47 assault rifles and 4 million rounds of ammunition to AUC drug lords. Although Iguarán had sought the extradition of Chiquita executives over these charges, none were. It is unknown whether or not cocaine was transported into the United States by that ship on its return voyage. In the wake of the $25 million "settlement" with the Justice Department, Holder then represented Chiquita in a civil action that followed the criminal case.

More recently, as financial journalist Matt Taibbi pointed out in Rolling Stone, Holder's "predictable decision" not to criminally pursue Goldman Sachs for massive fraud is "not just because Holder has repeatedly proven himself to be a spineless bureaucrat and obsequious political creature masquerading as a cop, and not just because rumors continue to circulate that the Obama administration--supposedly in the interests of staving off market panic--made a conscious decision sometime in early 2009 to give all of Wall Street a pass on pre-crisis offenses."

"No," Taibbi wrote, "the real reason this wasn’t surprising is that Holder's decision followed a general pattern that has been coming into focus for years in American law enforcement. Our prosecutors and regulators have basically admitted now that they only go after the most obvious and easily prosecutable cases."

Like the persecution of Muslims, antiwar activists, national security whistleblowers or anyone else who's rocked the boat: easy prey for an FBI stitch-up.

Black Dossier: HSBC & Terrorist Finance

It's tough being the world's second largest bank.

HSBC, the London-based British multinational banking and financial services giant operates in 85 countries with 7,200 offices worldwide with assets totaling more than $2.6 trillion (£4.06tn).

They're also caught-up in serial scandals: the Libor interest rate-fixing scam, serious charges of drug money laundering as well as suspicions that bank officers "palled around" with terrorist financiers.

Founded in 1865 when the British Crown seized Hong Kong as a colony in the aftermath of the First Opium War, British merchants (today we'd call them drug lords) needed a bank to handle the brisk trade in the illicit substance and launched the Hongkong and Shanghai Banking Company Limited. Rebranded "HSBC" in 1991, the bank expanded at breakneck speed in the heady days after The Wall fell.

While some might call them a success story, exemplars of financial wizardry in tough economic times, more appropriately perhaps, we might borrow a term from Mafia lore to describe their preeminent position in the capitalist pantheon of corrupt institutions: juiced.

'Sorry, now Go Away'

Today, the "War on Drugs" rivals the "War on Terror" for top spot on the global hypocrisy index.

Moral equivalencies abound. After all, when American secret state agencies manage drug flows or direct terrorist proxies to attack official enemies it's not quite the same as battling terror or crime.

Pounding home that point, a new report by the Senate Permanent Subcommittee on Investigations accused HSBC of exposing "the U.S. financial system to a wide array of money laundering, drug trafficking, and terrorist financing risks due to poor anti-money laundering (AML) controls."

That 335-page report, "U.S. Vulnerabilities to Money Laundering, Drugs, and Terrorist Financing: HSBC Case History," (large pdf file available here) was issued after a year-long Senate investigation zeroed-in on the bank's U.S. affiliate, HSBC Bank USA, N.A., better known as HBUS.

Drilling down, we learned that amongst the "services" offered by HSBC subsidiaries and correspondent banks were sweet deals with financial entities with terrorist ties; the transportation of billions of dollars in cash by plane and armored car through their London Banknotes division; the clearing of sequentially-numbered travelers checks through dodgy Cayman Islands accounts for Mexican drug lords and Russian mafiosi.

From richly-appointed suites at Canary Wharf, London, the bank's "smartest guys in the room" handed some of the most violent gangsters on earth the financial wherewithal to organize their respective industries: global crime.

A case in point. In 2008 alone the Senate revealed that the bank's Cayman Islands branch handled some 50,000 client accounts (all without benefit of offices or staff on Grand Cayman, mind you), yet still managed to ship some $7 billion (£10.9bn) in cash from Mexico into the U.S. Now that's creative accounting!

Playing fast and loose with U.S. banking rules, Subcommittee Chairman Carl Levin (D-MI) said that by exploiting the bank's "poor AML controls, HBUS exposed the United States to Mexican drug money, suspicious travelers cheques, bearer share corporations, and rogue jurisdictions."

Describing a "compliance culture" that was "pervasively polluted for a long time," Levin said it "will take more than words for the bank to change course."

Yet weasel words and butt-covering were all that were proffered to the American people even before Senate hearings began. Bank spokesman Robert Sherman said in an emailed statement that HSBC "will acknowledge that, in the past, we have sometimes failed to meet the standards that regulators and customers expect. We will apologize, acknowledge these mistakes, answer for our actions and give our absolute commitment to fixing what went wrong."

Right on cue, chief compliance officer David Bagley dramatically fell on his sword during those hearings and resigned on camera. It was quite a performance even by Washington's tawdry standards.

Appearing contrite, Bagley told the panel: "Despite the best efforts and intentions of many dedicated professionals, HSBC has fallen short of our own expectations and the expectations of our regulators. ... I recommended to the group that now is the appropriate time for me and for the bank, for someone new to serve as the head of group compliance."

While there's no word yet just how big Bagley's golden parachute will be, it's a sure bet he won't spend a day in jail, nor for that matter will Lord Stephen Green, HSBC's former Chairman and Chief Executive Officer.

Between 2003-2010, Green tilled the helm after serial stints directing The Bank of Bermuda Ltd., HSBC Mexico, SA, HSBC Private Banking Holdings (Suisse) SA and HSBC North American Holdings Inc.; units which feature prominently in the scandal. Sensing perhaps that the jig was up, last year he joined David Cameron's Conservative government as Minister of State for Trade and Investment.

Unlike Pappy Bush who claimed to be "out of the loop" during the Iran-Contra guns-for-drugs affair, Green was fully apprised of bank shenanigans and the Senate published emails which prove it.

Cheekily however, while underlings take the fall, Green told The Daily Telegraph, "I do not believe that I have a case to answer other than in the important sense that as chairman and chief executive I was responsible for what the company did. HSBC has expressed regret for the failures. I share that regret."

The Telegraph noted that Green has not considered resigning from Cameron's government, saying he was "very engaged" with his current plum post.

Ironically enough, the current Baron of Hurstpierpoint is an ordained priest in the Church of England and the author of an inspirational tome, Good Value: Reflections on Money, Morality and an Uncertain World. And no, you can't make this stuff up!

The top spot is now occupied by Stuart Gulliver who, quicker than you can say "we're sorry," admonished employees to "do better" and expressed remorse over his firm's "unacceptable behavior." Never mind that before ascending the throne, Gulliver was director of HBUS, HSBC Latin American Holdings Ltd., and HSBC Bank Middle East Ltd., divisions that have raised more than an eyebrow or two amongst Subcommittee investigators.

Topping Bagley's Kabuki-lite performance with her own rendition of clown car camp, Irene Dorner, HBUS's President and CEO told the Senate: "We deeply regret and apologize for the fact that HSBC did not live up to the expectations of our regulators, our customers, our employees, and the general public. HSBC's compliance history, as examined today, is unacceptable. ... We've worked hard to foster a new culture that values and rewards effective compliance, and that starts at the top."

Bathos aside, it was a polite way of saying "let's move on" and get back to the business of lining our pockets; after all, it's what we do best.

'The past is never dead. It's not even past'

Years before hijackers slammed passenger planes into the World Trade Center and the Pentagon killing nearly 3,000 people, secret state agencies began to exploit the fraternal links between Osama bin Laden's Afghan-Arab database of disposable Western intelligence assets, also known as al Qaeda, and prominent financial institutions.

In his 1999 book, Dollars for Terror, journalist Richard Labévière relates how a former CIA analyst explained: "The policy of guiding the evolution of Islam and helping them against our adversaries worked marvelously well in Afghanistan against the Red Army. The same doctrines can still be used to destabilize what remains of Russian power, and especially to counter the Chinese influence in Central Asia."

Was a new Cold War dawning?

No. In fact, it was the same Cold War. Only this time it was tricked-out in seductive finery by denizens of Western think-tanks and on-the-make NGOs. In the age of spin and endless news cycles, they'd hit upon a splendid formula to pour the "old" imperialist wine into new bottles: "humanitarian intervention" and a "responsibility to protect."

It was a brilliant script. In the blink of an eye our media-saavy masters could "enhance democracy" and "reform markets," magically transforming publicly-owned resources into privately-held assets controlled by banks! That terrorist proxies would serve as walk-ons and help drive the final nail into the coffin of national sovereignty wasn't considered proper conversation in polite company.

Labévière wondered whether "the new forms of terrorism actually embody the highest stage of capitalism?" They did, and "the straw men of the bin Laden Organization's subsidiaries [were] very well received by the business lawyers of Wall Street and the Bahamas, by the wealth managers of Geneva, Zurich and Lugano, and in the hushed salons of the City of London."

Not so curiously perhaps, "the privatization of violence and the privatization of the economy has become paradigmatic." In fact, "apart from any religious purpose," Labévière wrote, "the 'Jihad' is gaining ground as a profitable activity. It becomes liable to all the mafioso devolutions, and sinks into pure banditry. In many cases, Islamist ideology is used as a wonder worker to paper over banditry in all its forms."

Bin Laden as a Mafia capo di tutti capi? It certainly was a novel reading of geopolitical machinations!

More to the point, if an "army marches on its stomach," who then are the money men who put food in their bellies and kalashnikovs in their hands?

Bankrolled by Saudi and Gulf banks with a wink, a nod and logistical support from their old friends, the CIA and the Pentagon, today's Green condottieri once again are on the march, wrecking havoc and sowing chaos, with particular attention paid to states targeted as official enemies by the Global Godfather. Just ask the Iraqis, Libyans and Syrians.

While the Senate report may have disclosed that HSBC turned a blind eye to terrorist financing among it correspondent banks, the Riyadh-based Al Rajhi Bank for one, Saudi Arabia's largest privately-held financial institution, such arrangements hardly flourished in a vacuum.

With assets totaling $59 billion (£92.5bn), the Al Rajhi's are amongst the wealthiest families in the Kingdom. Investigators found that after 9/11 "evidence began to emerge that Al Rajhi Bank and some of its owners had links to organizations associated with financing terrorism, including that one of the bank's founders was an early financial benefactor of al Qaeda."

While the Al Rajhi family deny any role in financing terrorism, they have declined "to address specific allegations made in American intelligence and law-enforcement records, citing client confidentiality," The Wall Street Journal reported back in 2007.

Journalist Glenn R. Simpson averred that "a 2003 CIA report claims that a year after Sept. 11, with a spotlight on Islamic charities, Mr. Al Rajhi ordered Al Rajhi Bank's board 'to explore financial instruments that would allow the bank's charitable contributions to avoid official Saudi scrutiny'."

"A few weeks earlier," the Journal disclosed, the Agency said that "Mr. Al Rajhi 'transferred $1.1 billion to offshore accounts--using commodity swaps and two Lebanese banks--citing a concern that U.S. and Saudi authorities might freeze his assets.' The report was titled 'Al Rajhi Bank: Conduit for Extremist Finance'."

Although U.S. law enforcement and secret state agencies "acknowledge it is possible that extremists use the bank's far-flung branches and money-transfer services without bank officials' knowledge," the Journal noted that CIA analysts had concluded that "senior Al Rajhi family members have long supported Islamic extremists and probably know that terrorists use their bank."

It goes without saying that one should always approach CIA reports with a healthy dose of skepticism, especially in light of the Agency's well-documented history of employing cut-outs such as al Qaeda as terrorist cats' paws.

Such reports however, lay a trail of bread crumbs that policy makers can either act upon or more likely, ignore. That senior Bush and Obama administration officials did nothing with this information, never mind the regulatory agencies charged to enforce anti-money laundering laws, is testament to the corrupt, bipartisan nature of American policy as a whole.

It also beggars belief that Lord Green or the bank's compliance officers were unaware of CIA allegations or that Britain's own foreign intelligence arm, MI6, hadn't apprised top officials of the risks involved. In fact, as we'll see below, HSBC's own internal documents prove otherwise.

Osama's 'Golden Chain'

There were certainly plenty of red flags flying which should have alerted bank officials.

In March 2002, al Qaeda's list of financial benefactors surfaced when computers were seized in Sarajevo at the Bosnian headquarters of the Benevolence International Foundation, "a Saudi based nonprofit organization which was also designated a terrorist organization by the Treasury Department."

Osama bin Laden, who held a Bosnian passport issued by the breakaway government fronted by Western "liberal interventionist" darling Alija Izetbegović during NATO's dismemberment of socialist Yugoslavia, was a supporter of the Nazi SS Handschar Division during World War II. Bin Laden referred to this group of financial angels as his "Golden Chain."

Additional evidence also emerged in 2002 during Operation Green Quest, a Treasury Department effort to "disrupt terrorist financing in the United States."

In March of that year, law enforcement officials raided the Herndon, Virginia offices of the SAAR Foundation "an Al Rajhi-related entity." Indeed, the name "SAAR" was an acronym for the organization's founder, Sulaiman Abdul Aziz Al Rajhi, the controlling partner of the Al Rajhi Bank.

Subcommittee investigators commented that "one of the 20 handwritten names in the Golden Chain document identifying al Qaeda's early key financial benefactors is Sulaiman bin Abdul Aziz Al Rajhi, one of Al Rajhi Bank's key founders and most senior officials."

An affidavit supporting the search warrants "detailed numerous connections between the targeted entities and Al Rajhi family members and related ventures. The affidavit stated that over 100 active and defunct nonprofit and business ventures in Virginia were part of what it described as the 'Safa Group,' which the United States had reasonable cause to believe was 'engaged in the money laundering tactic of 'layering' to hide from law enforcement authorities the trail of its support for terrorists."

Green Quest investigators were particularly keen on unraveling links between the SAAR Foundation and the Swiss Al Taqwa Bank, incorporated in the Bahamas in 1988 for "tax purposes."

Founded by Swiss Nazi sympathizer and convert to Islam, Albert Armand (Achmed) Huber, who professed admiration for both Adolph Hitler and Osama bin Laden, the bank was accused by U.S. officials in helping al Qaeda launder funds. Although the Treasury Department froze its assets in 2001, the investigation was shut down by the Bush administration before deeper linkages could be fully uncovered.

In 2011, a lawsuit was filed by insurance giant Lloyd's of London against Saudi Arabia which sought to recover pay outs to victims of the 9/11 attacks. The suit noted "that two individuals who were former executives at Bank al Taqwa, Ibrahim Hassabella and Samir Salah, were also associated with the SAAR Foundation."

At the time, The Independent reported that the legal claim suggested that defendants "'knowingly' provided resources, including funding, to al-Qa'ida in the years before the attack and encouraged anti-Western sentiment which increased support for the terror group."

According to court briefs, "Absent the sponsorship of al-Qa'ida's material sponsors and supporters, including the defendants named therein, al-Qa'ida would not have possessed the capacity to conceive, plan and execute the 11 September attacks. The success of al-Qa'ida's agenda, including the 11 September attacks themselves, has been made possible by the lavish sponsorship al-Qa'ida has received from its material sponsors and supporters over more than a decade leading up to 11 September 2001."

Senate investigators, citing Green Quest and Lloyd's case files, noted that "Mr. Hassabella was a former secretary of al Taqwa Bank and a shareholder of SAAR Foundation Inc. Mr. Saleh was a former director and treasurer of the Bahamas branch of al Taqwa Bank, and president of the Piedmont Trading Corporation which was part of the SAAR network. The U.S. Treasury Department has stated: 'The Al Taqwa group has long acted as financial advisers to al Qaeda, with offices in Switzerland, Liechtenstein, Italy and the Caribbean.' Regarding Akida Bank, the lawsuit complaint alleged that Sulaiman bin Abdul Aziz Al Rajhi was 'on the board of directors of Akida Bank in the Bahamas' and that 'Akida Bank was run by Youssef Nada, a noted terrorist financier'."

The report went on to state that "HSBC was fully aware of the suspicions that Al Rajhi Bank and its owners were associated with terrorist financing, describing many of the alleged links in the Al Rajhi Bank client profile."

As icing on the cake, a 2007 study published by the Congressional Research Service (CRS) also found that "Saudi individuals and other financiers associated with the Golden Chain enabled bin Laden and Al Qaeda to replace lost financial assets and establish a base in Afghanistan following their abrupt departure from Sudan in 1996."

Assets I might add, that were used to bankroll the 9/11 attacks.

'Keen to maintain the relationships'

HSBC's dubious links to the Al Rajhi Bank didn't end with information discovered in the "Golden Chain" files; it fact, they were the tip of the proverbial iceberg.

After 9/11, the FBI reported that three of the hijackers, Hani Hanjour, Nawaf Alhazmi and Abdulaziz Alomari cashed thousands of dollars in travelers checks and received wire transfers from an unnamed individual drawn on accounts at the Al Rajhi Bank.

As researcher Kevin Fenton pointed out in Disconnecting the Dots, links among most of the hijackers were discovered through their banking transactions. "In this context," Fenton wrote, "it is worth noting that Global Objectives, a British banking compliance company, identified fifteen of the nineteen hijackers as high-risk individuals and established database profiles for them before the attacks. ... The list of high-risk people maintained by Global Objectives was available to dozens of banks," a list that presumably also included HSBC.

While there is no evidence that HSBC, or for that matter the Al Rajhi Bank, had prior knowledge of the 2001 atrocity, the gross indifference exhibited by these institutions through their violation of "know your client" (KYC) rules governing financial transactions reveal a callous disdain for elemental norms as they raced to inflate their balance sheets come hell or high water.

Privileged communications amongst senior staff revealed they were well aware of the issues and risks involved, yet did worse than nothing, they lobbied that HSBC continue their arrangements with the Al Rajhi Bank.

Suspicions were such that senior staff "classified Al Rajhi Bank as a 'Special Category of Client' (SCC), its highest risk designation." This was done, Senate investigators noted, because the Kingdom was considered a "high risk country" and due to the fact Al Rajhi's largest shareholder, Sulaiman bin Abdul Aziz Al Rajhi was considered "a Politically Exposed Person (PEP)."

Internal HSBC documents also revealed that in 2002, that is, after the 9/11 provocation, "the International Private Banking Department asked to transfer [several] accounts to HSBC's Institutional Banking Department in Delaware which had superior ability to monitor account activity."

In fact, transferring Al Rajhi accounts to the bank's Delaware division would have just the opposite effect and bank officials knew it.

As journalist Nicholas Shaxson noted in his exposé of offshore banking, Treasure Islands, "Delaware is the biggest state provider of offshore corporate secrecy." Shaxson pointed out that Delaware's Chancery Court has a "'business judgement rule' under which courts should not second-guess corporate managers," thereby "granting corporate bosses extraordinary freedoms from bothersome stockholders, judicial review, and even public opinion."

So much for any alleged "superior ability to monitor account activity"!

HBUS's Joseph Harpster wrote an email, stating: "The most recent concern arose when three wire transfers for small amounts ($50k, $3k and $1.5k) were transferred through the account for names that closely resembled names, not exact matches, of the terrorists involved in the 9/11 World Trade Center attack. ... The profile of the main account reflects a doubling of wire transfer volume since 9/01, a large number of travelers checks but with relatively low value and some check/cash deposits. According to the account officer, traffic increased because they have chosen to send us more business due to their relationship with Saudi British Bank and the added strength of HBC versus Republic. ... Maintaining our business with this name is strongly supported by David Hodghinson of [Saudi British Bank] and Andre Dixon, Deputy Chairman of [HSBC Bank Middle East]. Niall Booker and Alba Khoury [of HBUS] also support."

Aside from adverse publicity, the "low value" of the transactions seemed not to have troubled Harpster or his associates in the least. After all, the total "cost" of murdering 3,000 human beings were certainly small compared to the price of a vacation home in the Hamptons or a new Maserati.

Anxious there might be increased scrutiny from regulators (no worries there!), Harpster's email was forwarded by Douglas Stolberg, the head of Commercial and Institutional Banking to Alexander Flockhart, then a senior executive in Retail and Commercial Banking at HBUS. Stolberg noted: "As we discussed previously, Compliance has raised some concerns regarding the ongoing maintenance of operating/clearing accounts for Al Rajhi group." He forwarded recommendations on how to handle the account: "Retain [International Private Banking] as the relationship manager domicile for continuity purposes, and as we understand there is interest in further developing private banking business with family members. ... Domicile the actual accounts with Delaware where HBUS's most robust account screening capabilities reside."

"Screening capabilities" which could be shielded from nosy regulators due to Delaware's strict bank secrecy laws.

Stolberg went on to state: "[T]his has become a fairly high profile situation. Compliance’s concerns relate to the possibility that Al Rajhi's account may have been used by terrorists. If true, this could potentially open HBUS up to public scrutiny and/or regulatory criticism. SABB [Saudi British Bank] are understandably keen to maintain the relationships. As this matter concerns primarily reputational and compliance risks, we felt it appropriate for SMC [Senior Management Committee] members to be briefed ... so that they may opine on the acceptability of the plan. Please advise how you would prefer us to proceed." (emphasis added)

According to Senate staff, "Mr. Harpster reported a week later that Mr. Flockhart had decided to transfer the accounts to HBUS in the Delaware office."

But HSBC weren't the only entities hoping to curry favor with the Kingdom. A 2009 Government Accountability Office (GAO) report went on to note that "certain performance targets set by the State Department had been dropped in 2009, such as the establishment of a Saudi Commission on Charities to oversee actions taken by Saudi charities abroad as well as certain regulations of cash couriers."

Although GAO "recommended that the United States reinstate the dropped performance targets to prevent the flow of funds from Saudi Arabia 'through mechanisms such as cash couriers, to terrorists and extremists outside Saudi Arabia,' the State Department's "most recent annual International Narcotics Control Strategy Report contains no information about Saudi Arabia's anti-money laundering or terrorist financing efforts."

One reason why the State Department's report contains "no information" just might be the Obama administration's policy of supporting Saudi-backed Salafi terrorists soon to come online in Libya and Syria, financed through "Saudi charities abroad" or more directly through "cash couriers."

'You'd better be making lots of money!'

The Senate disclosed that HSBC "provided Al Rajhi Bank with a wide range of banking services, including wire transfers, foreign exchange, trade financing, and asset management services."

"In the United States," investigators learned that "a key service was supplying Al Rajhi Bank with large amounts of physical U.S. dollars, through the HBUS U.S. Banknotes Department."

"The physical delivery of U.S. dollars to Al Rajhi Bank was carried out primarily through the London branch of HBUS, often referred to internally as 'London Banknotes'."

Indeed, "HBUS records indicate that the London Banknotes office had been supplying U.S. dollars to Al Rajhi Bank for '25+ years.' In addition to the London branch, HBUS headquarters in New York opened a banknotes account for Al Rajhi Bank in January 2001. The U.S. dollars were physically delivered to Al Rajhi Bank in Saudi Arabia."

"On one occasion in 2008," Senate staff reported, the head of HSBC Global Banknotes Department told a colleague: 'In case you don't know, no other banknotes counterparty has received so much attention in the last 8 years than Alrajhi.' Despite, in the words of the KYC client profile, a 'multitude' of allegations, HSBC chose to provide Al Rajhi bank with banking services on a global basis."

Even though the Al Rajhi Bank "had not been indicted, designated a terrorist financier, or sanctioned," HSBC's Group Compliance section recommended that affiliates should sever their ties.

After that initial decision however, "HSBC affiliates disregarded the recommendation and continued to do business with the bank, while others terminated their relationships but protested HSBC's decision and urged HSBC to reverse it."

Complaints by lower level staff continued, disregarded by higher-ups, even though a U.S. indictment was issued in February 2005 for two individuals "accused among other matters, of cashing $130,000 in U.S. travelers cheques at Al Rajhi Bank in Saudi Arabia" and then smuggling the cash to CIA-backed terrorists in Chechnya.

Although internal bank documents showed that officials decided to cut their ties to the Saudi financial institution, they reversed themselves when pressure was brought to bear by Al Rajhi officials. Between 2006 and 2010, Al Rajhi received shipments totaling more than $1 billion in physical cash in the lucrative banknotes business from HSBC's U.S. affiliate according to investigators. Officials at the Saudi bank "had threatened to pull all of its business from HSBC if the U.S. banknotes business were not restored."

Senate staff reported that on January 4, 2005, "HBUS AML Compliance head Ms. Pesce sent an email to Daniel Jack, an HBUS AML Compliance Officer who often dealt with the London Banknotes office, instructing him to: '[p]lease communicate that Group Compliance will be recommending terminating the Al Rajhi relationship.' Mr. Jack inquired as to when that recommendation would be made. She responded: 'I expect to see an email from Susan Wright today. She tells me that HBME [HSBC Bank Middle East] does not agree with Compliance and will not be terminating the relationship from the Middle East, but she/David B[agley] recommend that in light of US scrutiny, climate, and interest by law enforcement, we in the US sever the relationship from here'."

At the time, Susan Wright was "the Chief Money Laundering Control Officer for the entire HSBC Group. She reported to David Bagley, head of the HSBC Group's overall Compliance Department."

Senate investigators noted that the "documents do not explain why HSBC Middle East disagreed with the decision or why it was allowed to continue its relationship with Al Rajhi Bank, when HSBC's Group Compliance had decided to sever the relationship between the bank and other HSBC affiliates due to terrorist financing concerns."

It soon became clear however, that "HSBC Group Compliance began to narrow its scope." Shortly thereafter a trader in the Banknotes department wrote, "for us is business as usual." Alan Ketley, HBUS AML Compliance Officer commented on the decision not to include Al Rajhi Trading in their earlier decision to sever all ties: "Looks like you're fine to continue dealing with Al Rajhi. You'd better be making lots of money!"

Meanwhile, "Al Rajhi Bank communicated the threat to 'pull any new business with HSBC' unless given a 'satisfactory explanation' why HSBC had stopped supplying it with U.S. dollars via its relationship managers," the Senate disclosed.

In short order, it was business as usual.

Despite continuing allegations of terrorist financing swirling around Al Rajhi Bank, HBUS "continued to supply, through its London branch, hundreds of millions of U.S. dollars to Al Rajhi Bank in Saudi Arabia. In addition, at Al Rajhi Bank's request, HBUS expanded the relationship in January 2009, by authorizing its Hong Kong branch to supply Al Rajhi Bank with non-U.S. currencies, including the Thai bat, Indian rupee, and Hong Kong dollar." (emphasis added)

When concerns were raised internally once again, Christopher Lok, the head of HSBC's Global Banknotes Department in New York fired back: "This is an on-going debate that will never go away. My stance remains the same, i.e. until it[']s proved we cannot simply rely on the Wall Street Journal['s] reports and unconfirmed allegations and 'punish’ the client'."

Needless to say, Hong Kong's "arrangement" with Al Rajhi went forward.

Despite "troubling information" which should have led to HSBC's quick exit from the banknotes market, the Senate reported that "HBUS continued to supply U.S. dollars to the bank, and even expanded its business, until 2010, when HSBC decided, on a global basis, to exit the U.S. banknotes business."

• • •

In conclusion, one needn't be a "conspiracy buff" to posit a link from HSBC to Al Rajhi to "cash couriers" operating across the Middle East in support of a multitude of U.S.-Saudi-backed "regime change" gambits in play today; policies which "worked marvelously well in Afghanistan against the Red Army."

As investigative journalist Ed Vulliamy pointed out in The Observer, the issues involved here are wider than drug money laundering or terrorist finance. "It is about where banks, law enforcement officers and the regulators--and politics and society generally--want to draw the line between the criminal and supposed 'legal' economies."

Commenting on the HSBC scandal, Robert Mazur, a former Customs Department deep-cover specialist and author of The Infiltrator, who penetrated Medellín cartel money laundering operations during the prosecution and collapse of BCCI in 1991, told The Observer that "the only thing that will make the banks properly vigilant to what is happening is when they hear the rattle of handcuffs in the boardroom."

"The stark truth is," Vulliamy wrote, "the notion of any dichotomy between the global criminal economy and the 'legal' one is fantasy. Worse, it is a lie. They are seamless, mutually interdependent--one and the same."

NSA Spying: 'If We Tell You, We'll Have to Kill You'

When Congress passed the FISA Amendments Act (FAA) in 2008, a privacy-killing law that gutted First, Fourth and Fifth Amendment protections for Americans while granting immunity to giant telecoms that assisted the National Security Agency's (NSA) warrantless wiretapping programs, we were assured that the government "does not spy" on our communications.

Yet scarcely a year after FAA was signed into law by President Bush, The New York Times revealed that under Hope and Change™ huckster Barack Obama, NSA continued the previous regime's illegal practices, intercepting "private e-mail messages and phone calls of Americans in recent months on a scale that went beyond the broad legal limits established by Congress last year."

The wholesale vacuuming-up of private communications by the sprawling Pentagon bureaucracy were described by unnamed "senior officials" as the "'overcollection' of domestic communications of Americans;" in other words, a mere technical "glitch" in an otherwise "balanced" program.

But what most Americans are blissfully unaware of is the fact that they carry in their pockets what have been described as near-perfect spy devices: their cellphones.

Earlier this week, The New York Times disclosed that "cellphone carriers reported that they responded to a startling 1.3 million demands for subscriber information last year from law enforcement agencies seeking text messages, caller locations and other information in the course of investigations."

The report by carriers, made in response to congressional inquiries "document an explosion in cellphone surveillance in the last five years, with the companies turning over records thousands of times a day in response to police emergencies, court orders, law enforcement subpoenas and other requests."

"I never expected it to be this massive," said Rep. Edward J. Markey (D-MA), the co-chair of the Bipartisan Congressional Privacy Caucus, "who requested the reports from nine carriers, including AT&T;, Sprint, T-Mobile and Verizon."

Markey told the Times that the prevalence of cellphone surveillance by law enforcement agencies raised the specter of "digital dragnets" that threaten the privacy of most customers.

While the sheer volume of requests by local, state and federal police for user data may have startled Congress, which by-and-large has turned a blind eye when it comes to privacy depredations at all levels of government, it is hardly a complete picture of the pervasive nature of the problem.

In 2009 security watchdog Christopher Soghoian reported on his Slight Paranoia web site that just one firm, Sprint Nextel, "provided law enforcement agencies with its customers' (GPS) location information over 8 million times between September 2008 and October 2009. This massive disclosure of sensitive customer information was made possible due to the roll-out by Sprint of a new, special web portal for law enforcement officers." (emphasis added)

According to Soghoian, "Internet service providers and telecommunications companies play a significant, yet little known role in law enforcement and intelligence gathering."

"Government agents routinely obtain customer records from these firms," Soghoian averred, "detailing the telephone numbers dialed, text messages, emails and instant messages sent, web pages browsed, the queries submitted to search engines, and of course, huge amounts of geolocation data, detailing exactly where an individual was located at a particular date and time."

While there are indeed "exigent circumstances" which may require law enforcement to demand instant access to GPS data or other customer records--a kidnapping or child abduction in progress--in the main however, it appears that most warrant-free requests fall under a more sinister category: fishing expedition.

Commenting on congressional revelations, ACLU legislative counsel Christopher Calabrese informed us that data supplied to the Times represents "a vast undercount of the number of Americans who have been affected by this tracking. Sprint disclosed that it received approximately 500,000 subpoenas in 2011 (a subpoena is a written request for information from law enforcement that isn't reviewed by a judge) and that 'each subpoena typically requested subscriber information on multiple subscribers.' In addition, several carriers disclosed that they sometimes provide all the information from a particular cell tower or particular area."

Although several geolocation privacy bills that require warrants to obtain records are pending in Congress, it should be clear there is no consensus among ruling class elites for protecting the privacy rights of Americans or reining-in overly-intrusive police agencies.

In fact, the opposite is the case.

Under Obama, illegal surveillance programs once hidden behind code-named black projects such as STELLAR WIND and PINWALE have been greatly expanded. Indeed, the bipartisan consensus which encourages and permits the secret state to carry out warrantless wiretapping and data mining have been "regularized" to such a degree (under the rubric of "keeping us safe") they're no longer even regarded as controversial.

More than three years ago, Obama promised to "fix" illegal policies which surfaced under the previous Bush government. However, an anonymous "senior official" told the Times there were certain "technical problems" that led the agency "to inadvertently 'target' groups of Americans and collect their domestic communications without proper court authority. Officials are still trying to determine how many violations may have occurred."

It was further revealed that some of the groups "inadvertently" targeted by NSA and other spy satrapies (CIA, DHS, FBI, et. al.) included Muslim Americans, anarchist and socialist groups, libertarians, civil liberties organizations, antiwar activists as well as individual supporters of the secrecy-spilling web site WikiLeaks.

Just last week the Bradley Manning Support Network disclosed that "A letter dated May 18, 2012, which purports to originate from the US Army Criminal Investigative Division (CID), rejects a Freedom of Information Act (FOIA) request submitted for data the government has collected on the Bradley Manning Support Network. The letter states that 'an active investigation is in progress with an undetermined completion date'."

As readers recall, Manning is the Army private accused by the government of releasing hundreds of thousands of secret files to WikiLeaks. He currently faces charges that could lead to decades of incarceration.

"At this time," Network supporters wrote, "it is unclear whether the investigation cited in the FOIA denial simply refers to the government's ongoing legal retaliation against Bradley Manning, or whether there is actually some other separate investigation targeting the Support Network."

It's a sure bet, given the administration's ongoing war against whistleblowers, that the Army as well the Justice Department has the Manning Support Network--along with WikiLeaks--in their gun sights.

And with the construction of NSA's giant $2 billion Utah Data Center nearing completion, as James Bamford reported in Wired Magazine in March, the agency's ability "to intercept, decipher, analyze, and store vast swaths of the world's communications as they zap down from satellites and zip through the underground and undersea cables of international, foreign, and domestic networks" will soon take a qualitative leap forward--at our expense.

With FAA currently up for renewal, and with congressional grifters on both sides of the aisle pushing for a five-year, amendment-free extension as demanded by the administration, the secret state is refusing to provide privacy advocates--both in and outside government--with any information whatsoever on how just many violations have occurred on a regular basis under the law's admittedly loose guidelines.

In May, senators Ron Wyden (D-OR) and Mark Udall (D-CO), members of the Senate Select Committee on Intelligence asked NSA to divulge information about how many Americans communications have been spied upon by the agency.

The Office of the Director of National Intelligence responded by saying that it was "not reasonably possible to identify the number of people located in the United States whose communications may have been reviewed under the authority of the FAA."

Both senators oppose FAA's extension on civil liberties grounds and in the face of the government's stonewall, Wyden placed a "hold" on the legislation.

In a statement published on his web site Wyden explained why he was blocking unanimous consent requests to pass FAA's five-year extension.

"The purpose of this 2008 legislation was to give the government new authorities to collect the communications of people who are believed to be foreigners outside the United States, while still preserving the privacy of people inside the United States," Wyden wrote.

"Before Congress votes to renew these authorities it is important to understand how they are working in practice. In particular, it is important for Congress to better understand how many people inside the United States have had their communications collected or reviewed under the authorities granted by the FISA Amendments Act."

"I am concerned, of course, that if no one has even estimated how many Americans have had their communications collected under the FISA Amendments Act," Wyden averred, "it is possible that this number could be quite large. Since all of the communications collected by the government under section 702 are collected without individual warrants, I believe that there should be clear rules prohibiting the government from searching through these communications in an effort to find the phone calls or emails of a particular American, unless the government has obtained a warrant or emergency authorization permitting surveillance of that American."

Ludicrously enough, in response to the senator's requests I. Charles McCullough, the Inspector General of the Office of the Director of National Intelligence wrote that the NSA Inspector General "and NSA leadership agreed that an IG review of the sort suggested would itself violate the privacy of U.S. persons." (emphasis added)

McCullough's irony-rich obfuscation, published by Wired, argued that even providing an estimate on how many Americans were spied upon would be "beyond the capacity" of the NSA's in-house watchdog. "I defer to [the NSA inspector general's] conclusion that obtaining such an estimate was beyond the capacity of his office and dedicating sufficient additional resources would likely impede the NSA's mission."

Just as the Bush administration scotched citizen lawsuits that demanded accountability from the nation's telecommunication providers over their collaboration with NSA's illegal programs, so too has the Obama regime sought to derail government accountability by invoking an alleged "state secrets privilege."

Recently, the Electronic Frontier Foundation reported that "Three whistleblowers--all former employees of the National Security Agency (NSA)--have come forward to give evidence in ... EFF's lawsuit against the government's illegal mass surveillance program, Jewel v. NSA."

In a July 2 motion filed in U.S. District Court in San Francisco, "the three former intelligence analysts confirm that the NSA has, or is in the process of obtaining, the capability to seize and store most electronic communications passing through its U.S. intercept centers, such as the 'secret room' at the AT&T; facility in San Francisco first disclosed by retired AT&T; technician Mark Klein in early 2006."

Those three former NSA officials--William E. Binney, Thomas A. Drake and J. Kirk Wiebe--were themselves targets of government persecution over allegations that they provided information to The New York Times in their 2005 revelation of illegal domestic spying by the Agency.

Drake, who pled guilty last year to a misdemeanor after the Justice Department's Espionage Act charges collapsed, was initially prosecuted by the administration--as a spy no less--for providing evidence to The Baltimore Sun of massive waste, fraud and corruption in NSA's Trailblazer program.

The $1.2 billion corporate boondoggle, overseen by the Science Applications International Corporation (SAIC) and project partners Boeing, Computer Sciences Corporation and Booz Allen Hamilton was eventually shut down in 2006.

In the wake of initial reporting by the Times, USA Today disclosed that NSA "has been secretly collecting the phone call records of tens of millions of Americans, using data provided by AT&T;, Verizon and BellSouth."

In fact, the same firms who assisted the Agency in creating "'a database of every call ever made' within the nation's borders," are busy as proverbial bees providing geolocational information to law enforcement and secret state agencies.

As EFF averred, "Jewel v. NSA is back in district court after the 9th U.S. Circuit Court of Appeals reinstated it in late 2011. In the motion for partial summary judgment filed today, EFF asked the court to reject the stale state secrets arguments that the government has been using in its attempts to sidetrack this important litigation and instead apply the processes in the Foreign Intelligence Surveillance Act that require the court to determine whether electronic surveillance was conducted legally."

While EFF should be commended for their efforts, prospects for a full accounting of serious state constitutional violations of Americans' right face an uphill battle.

As the World Socialist Web Site pointed out Monday, "The latest revelations about cell phone monitoring, when added to the long record of antidemocratic attacks carried out since the declaration of the 'war on terror'--from the establishment of the Guantanamo Bay prison camp to the Obama administration's assertion of the right to summarily execute anyone, including US citizens, anywhere in the world—provide chilling evidence of the real and growing threat of an American police state."

Efforts in that direction by the Obama administration are gathering steam.

The Electronic Privacy Information Center (EPIC) also reported Monday that "The White House has released a new Executive Order seeking to ensure the continuity of government communications during a national emergency."

That Executive Order, issued July 6 by the White House, grants new powers to the Department of Homeland Security, "including the ability to collect certain public communications information," EPIC averred.

But it does far more than that. "Under the Executive Order the White House has also granted the Department the authority to seize private facilities when necessary, effectively shutting down or limiting civilian communications."

As researcher Peter Dale Scott disclosed in numerous analyses on so-called "Continuity of Government" planning, COG is code for the suspension of constitutional guarantees and the imposition of martial law by the National Security State.

In 2010, Scott pointed out in Japan Focus: "Clearly 9/11 met the conditions for the implementation of COG measures, and we know for certain that COG plans were implemented on that day in 2001, before the last plane had crashed in Pennsylvania. The 9/11 Report confirms this twice, on pages 38 and 326. It was under the auspices of COG that Bush stayed out of Washington on that day, and other government leaders like Paul Wolfowitz were swiftly evacuated to Site R, inside a hollowed out mountain near Camp David."

In fact, the first ninety days after 9/11 "saw the swift implementation of the key features attributed to COG planning ... in the 1980s: warrantless detentions, warrantless deportations, and the warrantless eavesdropping that is their logical counterpart. The clearest example was the administration's Project Endgame--a ten-year plan, initiated in September 2001, to expand detention camps, at a cost of $400 million in Fiscal Year 2007 alone. This implemented the central feature of the massive detention exercise, Rex 84, conducted by Louis Giuffrida and Oliver North in 1984."

The proposed five-year extension of the FISA Amendments Act, coupled with indefinite detention provisions of the 2012 National Defense Authorization Act (NDAA), the president's "kill list" and now, a new Executive Order granting DHS the power to "seize" private communications' facilities in the wake of a "national emergency" have accelerated these dictatorial trends.

American Narcos: The Real 'Masters of Paradise'

As the body count climbs across Mexico, the drugs continue flowing across the border by the ton.

Despite the evident disconnect--a "war" on drugs that increases the supply while lowering the price, in the best tradition of our reigning "free market" ideology--the American media regales the public with fairy tales of heroic "warriors" doing battle with murderous gangsters named "Joaquín," "Jorge" and "Amado."

The fact is, more likely than not, the real narcos taking the biggest cut from deep inside the reeking abattoir of the grisly trade have far less prosaic names like "Brett," "Ethan" or "Jason."

'The Only Liquid Investment Capital'

Earlier this month, The Observer reported that "The vast profits made from drug production and trafficking are overwhelmingly reaped in rich 'consuming' countries--principally across Europe and in the US--rather than war-torn 'producing' nations such as Colombia and Mexico, new research has revealed."

Journalist Ed Vulliamy informed us that the authors of that report provide compelling evidence that "financial regulators in the west are reluctant to go after western banks in pursuit of the massive amount of drug money being laundered through their systems."

Indeed, at the height of the global financial crisis Antonio Maria Costa, then the head of the UN Office on Drugs and Crime told The Observer "he has seen evidence that the proceeds of organised crime were 'the only liquid investment capital' available to some banks on the brink of collapse last year. He said that a majority of the $352bn (£216bn) of drugs profits was absorbed into the economic system as a result."

"In many instances," Costa said, "the money from drugs was the only liquid investment capital. In the second half of 2008, liquidity was the banking system's main problem and hence liquid capital became an important factor."

"Inter-bank loans were funded by money that originated from the drugs trade and other illegal activities... There were signs that some banks were rescued that way." While Costa "declined to identify countries or banks that may have received any drugs money, he said the money is now a part of the official system and had been effectively laundered."

In other words, for dodgy bankers it was "accounts balanced" and an excuse to buy a new Armani suit or two, a case of 20-year-old single malt or that vacation home for the trophy wife, no questions asked.

Selective Prosecutions

In stark contrast to the impunity enjoyed by our capitalist overlords, The Wall Street Journal reported that the U.S. Treasury Department "slapped sanctions on two key operatives of the Sinaloa drug cartel" last Thursday.

The Journal informed us that "Kingpin Act sanctions were placed on Maria Alajandrina Salazar Hernandez and Jesus Alfredo Guzmán Salazar, the wife and son of Joaquín "Chapo" Guzmán, the fugitive drug lord who heads the Sinaloa Cartel."

Also last week, the Associated Press reported that Sandra Ávila Beltrán, whom the media dubbed "La Reina del Pacífico" (The Queen of the Pacific), can be extradited to the United States "where she faces cocaine-related charges." Ávila was arrested in Mexico City in 2007 and awaits prosecution on money laundering charges.

A third-generation drug trafficker, Ávila is the niece of of Miguel Ángel Félix Gallardo, onetime godfather of the Guadalajara Cartel now serving a 40-year prison term for the 1984 murder of DEA agent Enrique Camarena. Camarena was kidnapped and tortured to death after he uncovered evidence linking the CIA and Oliver North's sordid "Enterprise" to drug trafficking Nicaraguan Contras during the Reagan administration.

And just this week, The Guardian reported that two relatives of former Colombian President Álvaro Uribe, "are awaiting extradition to the US over claims they had ties to the world's most wanted drug lord."

"Ana Maria Uribe Cifuentes and her mother, Dolly Cifuentes Villa, were arrested last year after a request from a US federal court for alleged ties to the head of Mexico's Sinaloa Cartel, Joaquín 'El Chapo' Guzmán."

According to the Drug Enforcement Administration (DEA), "both women are alleged to belong to the Cifuentes Villa clan," which DEA claims "trafficked at least 30 tonnes of cocaine to the US between 2009 and 2011, and laundered the proceeds in several Latin American countries including Colombia."

Drug trafficking allegations have long swirled around the Uribe family. A 1991 Defense Intelligence Agency report published by The National Security Archive pointedly stated that during his tenure in the Colombian Senate, Uribe was a "close personal friend of Pablo Escobar" and was "dedicated to collaboration with the Medellín [drug] cartel at high government levels."

The document went on to assert that before becoming a key U.S. "partner in the drug war," and rewarded with some $3 billion under Plan Colombia to "fight drugs," Uribe "was linked to a business involved in narcotics activities in the United States" and "has worked for the Medellín cartel."

Although the U.S. government disavowed that report, for purely political reasons I might add, several members of Uribe's family, including the president's cousin, Mario Uribe Escobar, the former President of the Colombian Congress, was convicted and removed from office over his close ties to the far-right, drug trafficking paramilitary death squad, the Autodefensas Unidas de Colombia, or AUC.

In announcing sanctions against the Guzmán clan, Adam Szubin, the director of Treasury's Office of Foreign Assets Control, said in a statement: "This action builds on Treasury's aggressive efforts, alongside its law enforcement partners, to target individuals who facilitate Chapo Guzmán's drug trafficking operations and to pursue the eventual dismantlement of his organization, which is culpable in untold violence."

While Chapo, Inc. earned honorable mention at No. 1153 on Forbes "World's Billionaires List," and may very well be responsible for the estimated 25% of illegal drugs trafficked into the United States as the DEA alleges, his place at No. 55 on Forbes list of "The World's Most Powerful People," sandwiched between PIMCO founder and "Bond King" Bill Gross and Ahmed Shuja Pasha, Director-General of Pakistan's Inter-Services Intelligence agency, speak volumes about the rather interesting juxtapositions (parapolitically speaking, that is!) between the worlds of finance, crime and covert operations.

Citing findings by two Colombian academics, Alejandro Gaviria and Daniel Mejía in their study, Anti-Drugs Policies In Colombia: Successes, Failures And Wrong Turns, Ed Vulliamy disclosed "that 2.6% of the total street value of cocaine produced remains within the country, while a staggering 97.4% of profits are reaped by criminal syndicates, and laundered by banks, in first-world consuming countries."

Gaviria told The Observer, "Colombian society has suffered to almost no economic advantage from the drugs trade, while huge profits are made by criminal distribution networks in consuming countries, and recycled by banks which operate with nothing like the restrictions that Colombia's own banking system is subject to."

Co-author Daniel Mejía added: "The whole system operated by authorities in the consuming nations is based around going after the small guy, the weakest link in the chain, and never the big business or financial systems where the big money is."

Where, inquiring minds can't help but wonder, are Treasury's "aggressive efforts" when it comes to those simple, yet readily demonstrable facts?

But like drug cartels, banks and the "old boy" networks who run them have names. I'll give you a hint: they're not self-styled "Lords of the Heavens," though they just might think of themselves as proverbial "Masters of the Universe."

A case in point. Back in 2000 when Narco News publisher Al Giordano and Mario Menéndez, a reporter for the Mexican newspaper Por Esto! were sued in a New York court for libel by Banamex-Citigroup, Giordano wrote that "The true bosses of the illegal drug trade do not appear on the FBI 'Most Wanted' list."

No, Giordano averred, "The Chief Operating Officers of drug trafficking are not Mexicans, nor Colombians: they are US and European bankers, those who launder the illicit proceeds of drug trafficking. Institutions like Citibank of New York--as this report documents--are the true beneficiaries of the prohibition on drugs and its illegal profits."

While Chapo Guzmán's family are now targets of Treasury Department sanctions, what can we learn from recent reporting on Justice Department inaction when it came to prosecuting officers of America's fourth largest bank, Wachovia, bought by Wells Fargo & Co. in 2008 at the height of the capitalist financial meltdown?

Charlotte: The World's Narco Capital?

In landmark exposés of corporate greed, criminality and corruption, Bloomberg Markets Magazine and The Observer revealed in 2010 and 2011 respectively, that Wachovia was up to its eyeballs in laundering hot money for Colombian and Mexican drug cartels.

As I reported in 2010 on Wachovia's foray into money-laundering for Chapo Guzmán's Sinaloa Cartel (see: "All in the 'Family.' Global Drug Trade Fueled by Capitalist Elites," Antifascist Calling, July 20, 2010) then-CEO, G. Kennedy "Ken" Thompson, a former president of the Federal Reserve Board's Advisory Committee and Bush Ranger who raised some $200,000 for W's 2004 presidential campaign, was buying up competing banks faster than you can say "credit default swaps."

By the time Wells Fargo bought Wachovia at the fire-sale price of $12.8 billion, the bank and Thompson, who had "retired at the request of the board," were in deep trouble.

Prior to the takeover, Wachovia had embarked on a veritable shopping spree. After the firm's 2001 merger with First Union Bank, Wachovia merged with the Prudential Securities division of Prudential Financial, Inc., with Wachovia controlling the lion's share of that firm's $532.1 billion in assets. Following this coup, the bank then bought-out Metropolitan West Securities, adding a $50 billion portfolio of securities and loans to their Lending division. In 2004, Wachovia followed-up with the $14.3 billion acquisition of SouthTrust Corporation.

Apparently flush with cash and new market clout, Wachovia set it sights on acquiring California-based Golden West Financial. Golden West operated branches under the name World Savings Bank and was the nation's second largest savings and loan. At the time of the buy-out, Golden West had over $125 billion in assets. For Wachovia and Thompson, it was a deal too far.

A cash-crunch soon followed. Now exposed to risky loans, including toxic adjustable rate mortgages acquired as a result of the Golden West deal, which Thompson had described as Wachovia's "crown jewel," the firm's loan portfolios were hammered by heavy losses during the subprime mortgage meltdown.

While the bank had reported some $2.3 billion in earnings during the first quarter of 2007, by 2008 they were reporting heavy losses that topped $8.9 billion by the fourth quarter. It was panic time in Charlotte.

And where did some of that "liquid capital" come from which enabled Wachovia's reckless expansion?

"One customer that Wachovia took on in 2004 was Casa de Cambio Puebla SA," Bloomberg Markets reported. The Puebla, Mexico currency exchange was the brainchild of Pedro Alatorre Damy, a "businessman" who "had created front companies for cartels."

Alatorre, and 70 others connected to his network were arrested in 2007 by Mexican law enforcement officials. Authorities discovered that the accused money launderer and airline broker for the Sinaloa Cartel controlled 23 accounts at the Wachovia Bank branch in Miami and that it held some $11 million, subsequently frozen by U.S. regulators.

In 2008, a Miami federal grand jury indicted Alatorre, now awaiting trial in Mexico along with three other executives, charging them with drug trafficking and money laundering, accusing the company of using "shell firms to launder $720 million through U.S. banks." The Justice Department is currently seeking Alatorre's extradition from Mexico.

Despite the fact that Wachovia's Miami office had been designated by federal investigators a "high-intensity money laundering and related financial crime area," in a "high-intensity drug trafficking area," The Observer reported that even in the face of internal warnings from their own anti-money laundering investigators, Wachovia did nothing to stop the illicit flow of hot funds.

With America's housing bubble now fully-inflated, and warning signs that the speculative boom would soon go bust, one can only surmise that the need for liquidity at any price, had driven Wachovia to play dumb where shady, yet highly-profitable "arrangements" with Casa de Cambio Puebla SA were concerned.

Bleeding cash faster than you can say "mortgage backed securities," Wachovia was on the hook for their 2006 $26 billion buy-out of Golden West Financial at the peak of the bubble, a move that Bloomberg Businessweek reported generated "resistance from his own management team" but ignored by Thompson.

Why? "Because no one outside of Thompson and Golden West CEO Herb Sandler seemed to like the deal from the moment it was announced," a company insider told Businessweek.

(An alert reader pointed out when my piece appeared in 2010, that Herb Sandler, who sold Golden West at the top of the market saying he wanted to devote himself to "philanthropy," "now owns ProPublica, a Left gatekeeper that goes after easy targets like racist cops ... but which will not examine Sandler's wing of the power elite. Michael Barker wrote a great series on this outfit and its Establishment handlers called "Investigating the Investigators--A Critical Look at ProPublica.")

While the buy-out may have given Thompson "the beachhead in California he had long desired ... the ink was barely dry on the Golden West deal in late 2006 when the housing bubble in markets including California and Florida began to deflate."

Hammered by the housing bust, Wachovia's share price, which had risen to $70.51 per share when the Golden West deal was announced had slid to $5.71 per share by October 2008. In other words Wachovia, along with the rest of the world's economy was circling the proverbial drain.

In their Deferred Prosecution Agreement with the Justice Department, Wells Fargo agreed not to contest charges brought against Wachovia in the federal indictment.

Banking giant Wells was forced to admit: "On numerous occasions, monies were deposited into a CDC [Casa de Cambio] by a drug trafficking organization. Using false identities, the CDC then wired that money through its Wachovia correspondent bank accounts for the purchase of airplanes for drug trafficking organizations. On various dates between 2004 and 2007, at least four of those airplanes were seized by foreign law enforcement agencies cooperating with the United States and were found to contain large quantities of cocaine."

As Ed Vulliamy reported in The Observer, although investigators from DEA and the IRS uncovered evidence that Wachovia had laundered as much as $378.4 billion, "a sum equivalent to one-third of Mexico's gross national product--into dollar accounts from so-called casas de cambio (CDCs) in Mexico," and later paid federal authorities $110 million in forfeiture, including a $50 million fine "for failing to monitor cash used to ship 22 tons of cocaine," no criminal proceedings were ever brought against bank officers.

"The conclusion to the case," Vulliamy wrote, "was only the tip of an iceberg, demonstrating the role of the 'legal' banking sector in swilling hundreds of billions of dollars--the blood money from the murderous drug trade in Mexico and other places in the world--around their global operations, now bailed out by the taxpayer."

While Chapo Guzmán and other leaders of Mexican drug trafficking organizations face federal charges that could land them in prison for the rest of their lives, contrast the kid gloves approach taken by the government when it comes to American narcos.

Despite serious federal money-laundering charges against Wachovia, "smartest guy in the room" Thompson was paid $15.6 million in total compensation by the board in 2007, fully a year after that fatal Golden West deal went south. Nor did subsequent losses, and an impending criminal indictment (against the bank, not its officers), stop Wachovia from showering Thompson with a severance package worth nearly $8 million.

Now that's juice!

'Air Cocaine'

Following extensive, years' long reporting in the trenches by MadCow Morning News investigative journalist Daniel Hopsicker and Narco News' Bill Conroy into the origins of two aircraft seized in Mexico with some ten tons of cocaine on board, we learned that as many as 100 planes had been purchased with hot money laundered through Wachovia Bank.

And when "mainstream" journalists Michael Smith and Ed Vulliamy picked up the trail of breadcrumbs assiduously laid out by Hopsicker and Conroy (always without attribution, mind you), they did however, advance some previously unknown facts surrounding this sordid case.

"Just before sunset on April 10, 2006," Bloomberg's Michael Smith reported, "a DC-9 jet landed at the international airport in the port city of Ciudad del Carmen, 500 miles east of Mexico City."

When Army troops grew suspicious after the crew tried to "shoo them away, saying there was a dangerous oil leak," they did what good law enforcement officials should do: they searched the plane.

On board, they found 128 identical black suitcases "packed with 5.7 tons of cocaine, valued at $100 million. The stash was supposed to have been delivered from Caracas to drug traffickers in Toluca, near Mexico City, Mexican prosecutors later found. Law enforcement officials also discovered something else."

"The smugglers," Smith wrote, "had bought the DC-9 with laundered funds they transferred through two of the biggest banks in the U.S.: Wachovia Corp. and Bank of America Corp."

But in breaking that story six years ago, (long before Bloomberg and The Observer joined the hunt), Hopsicker revealed that "One of the two owners of the DC-9 (tail number N900SA) busted at an airport in Ciudad del Carmen in the state of Campeche, Mexico last week freighted 5.5 tons of cocaine had been appointed in 2003 to the Business Advisory Council of the National Republican Congressional Committee by then-Congressional Majority Leader Tom Delay, The MadCow Morning News can exclusively report."

That plane, Hopsicker disclosed, was tricked-out by owner Brent Kovar to impersonate a jet flown by the U.S. Transportation Security Administration. An official-looking seal read "Sky Way Aircraft, Protection of America's Skies," complete with the "image of a federal eagle clutching the familiar olive branch in its talons."

And when he searched FAA and corporate records, Hopsicker learned that "A close look at [shell company] Royal Sons reveals evidence indicating that the firm is part of a cluster of related air charter firms being used as dummy front companies to provide 'cover' for CIA flights."

"The companies involved," Hopsicker averred, "include Royal Sons, Express One International, Genesis Aviation and United Flite Inc."

"All four companies appear to be engaged in an interlocking and time-honored Agency scheme going back 50 years: using frequent cosmetic transfers of aircraft title to make positively identifying the ownership of any one plane at any given time as difficult as finding the pea under the shell in a game of three-card Monte."

Subsequent reporting by Hopsicker revealed that the second plane, a Gulfstream II business jet (N987SA) which crash landed on the Yucatán peninsula in 2007 with four tons of coke on board, was registered to a "Donna Blue Aircraft, Inc." (DBA, or "doing business as") and was previously employed as a "private charter" that did "terrorist" rendition flights for, who else, the CIA!

As Narco News journalist Bill Conroy revealed in 2008, "At the center of that controversy are allegations that the downed cocaine jet was part of a CIA-backed narco-trafficking operation."

According to Conroy, the "key to the ill-fated Gulfstream II cocaine shipment is a prolific Colombian narco-trafficker and U.S. government informant named Jose Nelson Urrego Cardenas--who was recently arrested by police in Panama. Urrego allegedly played a major role in organizing the cocaine shipment as part of [Immigration and Customs Enforcement's] Mayan Express operation."

"For those who might wonder why ICE would pursue an operation like the Mayan Express," Conroy wrote, "it pays to keep in mind that Charles E. Allen, under-secretary for the Office of Intelligence and Analysis at the Department of Homeland Security (DHS), also happens to be a veteran of the CIA and was a major player in the Iran/Contra scandal that played out during the Reagan administration."

"One facet of Iran/Contra, as you might recall, allegedly involved the use of CIA resources to run drugs in order to raise money to fund the purchase of arms for the Contra rebels who were seeking to overthrow the Sandinista government in Nicaragua."

"For ICE to be cleared to operate a high-profile overseas mission like the Mayan Express, which allegedly involved coordination with the CIA, it is very likely that Allen, DHS' chief intelligence guru, had to be clued into the operation--since ICE is part of DHS."

More recently, in keeping with the dirty history of the CIA's role in managing, not eliminating, the global drug trade, Narco News disclosed that the Agency had a "quid-pro-quo" arrangement with Chapo Guzmán's Sinaloa Corporation's "leadership and US government agencies seeking to obtain information on rival narco-trafficking organizations."

In fact, as Narco News revealed last April, the federal indictment against Jesus Vicente Zambada Niebla claims "he served as the 'logistical coordinator' for the 'cartel,' helping to oversee an operation that imported into the U.S. 'multi-ton quantities of cocaine ... using various means, including but not limited to, Boeing 747 cargo aircraft, private aircraft ... buses, rail cars, tractor trailers, and automobiles'."

Indeed, one of the "private aircraft" used in Chapo Guzmán's drug importation schemes was none other than that ill-fated Gulfstream II (N987SA) which crash-landed in the Yucatán in 2007. Purchased with funds laundered through Wachovia Bank, the business jet was subsequently linked by Council of Europe investigators to CIA ghost flights.

Despite facts laid out in Zambada's federal indictment "the alleged deal," Conroy wrote, "assured protection for the Sinaloa Cartel's business operations while also undermining its competition--such as the Vicente Carrillo Fuentes organization out of Juárez, Mexico, the murder capital of the world."

"At the same time," Narco News reported, "the information provided by the Sinaloa Cartel to US agencies against its rivals assures a steady flow of drug busts and media victory headlines for US agencies and for the Mexican government."

Conroy pointed out, "That propaganda is necessary for hoodwinking their citizens into believing that progress is being made in the drug war and thereby assuring the continued funding of bloated drug-war budgets and support for failed policies that have cost the lives of some 50,000 Mexican citizens since late 2006 and ended any hope of a productive life for hundreds of thousands of US citizens--most wasting away in US prisons and not a small number the victims of street homicides linked to drug deals gone bad."

Call it business as usual in "God's country," that "shining city upon a hill."

Past as Prologue

If history is a guide to current practices, the CIA has long-relied on financing black Agency operations through dodgy banks and the bankers who run them.

Amongst the swindlers who have profited from cosy relations with the Agency, readers no doubt are reminded of Paul Helliwell's Castle Bank Bank & Trust; Michael Hand, Frank Nugan and Bernie Houghton's Nugan-Hand Bank; Agha Hasan Abedi's Bank of Credit and Commerce International (BCCI); or more recently, as Antifascist Calling disclosed two years ago, convicted fraudster R. Allen Stanford's multibillion dollar Ponzi scheme disguised as a "full-service bank," Stanford International.

That all four banks collapsed in ignominy and scandal as investors were bilked out of billions of dollars in deposits amid charges that these financial black holes were little more than conduits for organized crime and intelligence operations, only underscores the inescapable fact that for secret state outfits like the CIA, crime pays.

Two years after the Wachovia scandal broke amid deafening media silence in the U.S., Daniel Mejía told The Observer: "Overall, there's great reluctance to go after the big money. They don't target those parts of the chain where there's a large value added. In Europe and America the money is dispersed--once it reaches the consuming country it goes into the system, in every city and state. They'd rather go after the petty economy, the small people and coca crops in Colombia, even though the economy is tiny."

"It's an extension of the way they operate at home," Mejía said. "Go after the lower classes, the weak link in the chain--the little guy, to show results. Again, transferring the cost of the drug war on to the poorest, but not the financial system and the big business that moves all this along."

Given the corrupt trajectory of the "War on Drugs," this should not surprise anyone. As Peter Dale Scott wrote in Deep Events and the CIA's Global Drug Connection: "The global drug connection is not just a lateral connection between CIA field operatives and their drug-trafficking contacts. It is more significantly a global financial complex of hot money uniting prominent business, financial and government as well as underworld figures."

According to Scott, this global criminal-elite nexus "maintains its own political influence by the systematic supply of illicit finances, favors and even sex to politicians around the world, including leaders of both parties in the United States. The result is a system that might be called indirect empire, one that, in its search for foreign markets and resources, is satisfied to subvert existing governance without imposing a progressive alternative."

Scott's analysis has certainly been borne out by honest law enforcement officials.

Martin Woods, a former senior detective with London's Metropolitan police anti-drugs squad joined Wachovia in 2005 as the bank's chief anti-money laundering investigator and paid a steep price for his diligence.

Hounded out of his position when he refused to stop filing suspicious activity reports to headquarters in Charlotte over dubious deposit practices by Wachovia branches in London and Miami, Woods told The Observer: "New York and London have become the world's two biggest laundries of criminal and drug money, and offshore tax havens. Not the Cayman Islands, not the Isle of Man or Jersey. The big laundering is right through the City of London and Wall Street."

"Meanwhile," Woods said, "the drug industry has two products: money and suffering. On one hand, you have massive profits and enrichment. On the other, you have massive suffering, misery and death. You cannot separate one from the other."

With hundreds of billions of dollars washing through the system each and every year, there aren't many incentives to collar the big boys. And you can take that to the bank...

(Image courtesy of Daniel Hopsicker's MadCow Morning News)