Financial Spying that Might Make Sense
Gar Smith /
July 27, 2006

Shortly after the Los Angeles Times disclosed that Washington's fiscal spooks were spiriting away once-sacrosanct financial data on bank transfers from the Society for Worldwide Interbank Financial Telecommunications (SWIFT), the US Treasury issued the predictable reassurance that the program was "a legal and proper use of our authorities."

Many Americans were still reeling from disclosures that the Bush administration had secretly ordered the country's biggest phone companies to spy on millions of emails and phone calls -- without warrants. Now comes word that Bush's surveillance network is mining the globe's largest financial communications network --12.7 million messages and $6 trillion in transfers per day -- from (among other venues) an office in Manassas, Virginia.

Dick Cheney has called the financial spying operation "absolutely essential" to the "war on terror." Cheney insisted that the secret program was lawful but then criticized the press for revealing the program.

The new rule seems to be that citizens no longer have a right to privacy. Only the Bush administration has an absolute right to absolute secrecy. In both cases, the abuses are justified as necessary for the "war against terrorism."

Congress should put this claim to the test by exercising its oversight role. The US taxpayers are subsidizing Bush's massive and unprecedented surveillance operations. It's only fair to insist that we know that we're getting our moneys-worth.

The American people might be more willing to forgive Bush for electronic eavesdropping and for playing SWIFT-and-loose with the world's financial secrets if the White House opens up and tells us what these investigations have revealed about several nearly forgotten chapters in the "war on terror." We may call these The Big Three.

Number 1: The 9-11 Stockmarket Trades
First: What has Bush's surveillance program revealed about the identity of the mysterious financial traders who bet that both United and American Airlines stocks -- along with two UA and two AA planes -- would take a dive on the morning of September 11?

The San Francisco Chronicle's Christian Berthelsen and Scott Winokur were the first to report "an unusually large jump in purchases of put options on the stocks of UAL Corp. and AMR Corp, in the three business days before the attack.... On one day, UAL put option purchases were 25 times greater than the year-to-date average."

In the weeks before 9/11, shadowy stockmarket investors purchased 4,744 "put options" on United Airlines and 4,516 on American Airlines -- more than six times normal trading volume. "Put options" realize a profit only if the stock value slumps. On September 6, the put options betting against United Airlines peaked at 2,857 times normal trading. No other airline stocks were affected.

John Kinnucan of Broadband Research told the Chronicle that the numbers were "higher than I've seen in 10 years of following the markets." Dylan Ratigan of Bloomberg Business News observed that 'this could very well be insider trading at the worst, most horrific, most evil use you've ever seen in your entire life."

But that wasn't the end of it. Similar "doomsday bets" were placed on the stocks of Morgan Stanley Dean Witter & Co and Merrill Lynch & Co. Morgan Stanley occupied 22 floors in the World Trade Center.

Whoever placed these doomsday bids stood to make at least $15.7 million from the financial repercussions of the terror attacks. A year after 9-11, $2.5 million in put-option profit sits unclaimed and the identity of the "put option" phantoms remains unknown.

Suspicions initially focused on Osama bin Laden's Al Qaeda network. The Interdisciplinary Center (founded and operated by former Israeli intelligence experts) published a study titled, "Black Tuesday: The World's Largest Insider Trading Scam," suggesting that bin Laden was responsible for the doomsday bets and estimating that Al Qaeda had netted close to $16 million.

But, on September 21, 2001, Israel's Herzliyya International Policy Institute for Counterterrorism issued a report that identified Deutsche Bank Alex. Brown (AB Brown) as one of the banks involved in the purchase of these options. AB Brown is the US investment banking arm of Germany's Deutsche Bank. (In 2001, Senator Carl Levin had named AB Brown as one of 20 major US banks involved in laundering drug money.)

According to investigative journalist and former LA police officer Michael Ruppert, AB Brown, "was, until 1998, managed by the man who is now in the number three position at the CIA." Ruppert's reference was to AB Brown's Vice-Chair, "Buzzy" Krongard, who left the bank to become Counsel to CIA Director George Tenet. In March 2001, George W. Bush promoted Krongard to the post of CIA Executive Director.

The Chronicle reporters also received a tip that the some of the United purchases were placed through Deutsche Banc Alex. Brown. The Chronicle quoted Ernst Welteke, the President of the German Central Bank, who said an initial study suggested the purchases constituted "terrorism insider trading."

It is estimated that the secret investors would have pocketed more than $2.5 million on the UAL stock options alone. "This smells bad," a stock market insider told the Chronicle, "Usually, if someone has a windfall like that, you take the money and run." The fact that the stock exchange was ordered closed for four days may have denied the conspirators the opportunity to make a quick get-away.

Securities and Exchange Committee Chair Harvey Pitt vowed that the SEC was "pursuing all credible leads" but, nearly five years later, the identities of these mysterious traders remain unknown to the public. The Chronicle reported at the time that "experts were quick to point to possible candidates -- all presumed to be affluent residents of Arab nations." But the most haunting phrase from the Chronicle's September 29, 2001 story is the line that referred to "the investors -- whose identities and nationalities have not been made public." In short: their identities are known but they have not been released.

Congress should demand that the White House make available its intelligence records on these critical financial transactions and identify the individuals who tried to profit off their apparent foreknowledge of the 9-11 attacks.

Number 2: Foreknowledge of 9-11
Since the horrific events of September 11, the unelected Bush administration has been busy crafting a legacy of suspended civil liberties, dragnet arrests, suppression of public documents, obstruction of congressional investigations, and attempts to derail independent investigations into the causes of the September 11 terror attack.

Records of White House phone calls might shed light on the following failures to protect the US from terrorists:

  • Why were the FBI's terrorist experts from investigating Saudi Arabian ties to Al Qaeda prior to 9/11? This interference prompted FBI Deputy Director John O'Neill to resign only two weeks before the attack. Did O'Neill make any calls to the Oval Office?

  • What did Bush say to Pentagon officials where he ordered the Naval Strike Force monitoring bin Laden's activities in Afghanistan to 'stand down' prior to 9/11?

  • Did Bush make any follow-up calls after Italian, German, French, Russian and Israeli intelligence officials warned Washington about an imminent terror attack on the US -- including specific warnings of plans for 'suicide attacks' with hijacked airliners?

  • How did Bush explain his order to US counterterrorism agencies to lower their readiness posture -- despite repeated warnings from the CIA? (Bush ordered US counterterrorism agencies to 'stand down' from a high level of alert that had been in existence until August 6, 2001.)

  • Does the White House have a transcript of the phone calls in which former Pakistani Foreign Secretary Niaz Naik informed BBC reporters that he was 'told by senior American officials in mid-July that military action against Afghanistan would go ahead by the middle of October -- before the snows started falling"?

  • Michael Springmann, the former head of the visa section at the US Consulate in Jeddah, Saudi Arabia, has testified that, during the covert war against the Soviets in Afghanistan, CIA agents posing as consular officials routinely overrode visa denials to spirit mujahadeen terrorists into the US to be trained to fight against Soviet troops.

    Does the NSA have any transcripts of phone calls from the 15 named 9-11 hijackers who received their visas from the "CIA consulate" in Jeddah?

  • According to Agence France-Presse, several weeks before the 9-11 attack, $100,000 was "wired to WTC [World Trade Center] hijacker Mohammed Atta from Pakistan, by Ahmad Umar Sheikh, at the instance [sic] of General Mahmoud [Ahmad]." Ahmad was not a member of al Qaeda: he was the director general of Pakistan's Inter-Services Security Agency, Pakistan's equivalent of the CIA.

    Have the White House's spies managed to obtain the details of this very critical financial transaction?

  • On September 4, 2001, Gen. Mahmoud Ahmad flew to the US for a series of meetings with top-level Bush officials including CIA Director Tenet, Secretary of State Colin Powell, Deputy Secretary of State Richard Armitage, Under-Secretary of State Marc Grossman, and Senate Foreign Relations Committee Chair Joseph Biden (D-DE).

    Does the NSA have transcripts of phone conversations between these principles? (Congressional investigators might wish to review the minutes of those meetings.)

    At the very moment the World Trade Center was being attacked, Gen. Ahmad was being treated to a breakfast meeting with Senate Intelligence Committee Chair Bob Graham (R-FL) and House Intelligence Committee Chair Porter Goss (R-FLA).

    Did the NSA tap into any of the phone conversations between these gentlemen? If so, what did the intercepts reveal?

    Graham and Goss were subsequently entrusted with heading the investigations into the CIA's 9-11 intelligence failures. The fact that Gross is a former CIA employee with ten years' service in "clandestine operations," prompted fellow Republican Richard Shelby (R-AL) to suggest that Goss might not be the most impartial man to head the investigation.

    Can the NSA tell us what phone conversations preceded Goss' nomination and confirmation?

    Ahmad's extraordinary meeting with Graham and Goss was reported only in one Florida newspaper and in a September 14, 2001 article on It was not until May 18, 2002 that the New York Times mentioned the meeting in an article profiling Goss. The Times article mentioned that ISI Chief "Ahmad ran a spy agency notoriously close to Osama bin Laden and the Taliban."

    In May 2002, Newsweek broke the story that, 36 days before 9-11, Bush was warned that Al Qaeda was going to "bring the fight to America." On May 19, the New York Times revealed the existence of a 1999 warning from the National Intelligence Council that 'suicide bomber(s) belonging to Al Qaeda's martyrdom Battalion could crash-land an aircraft packet with high explosives into the Pentagon, the headquarters of the [CIA] or the White House."

    On May 16, 2002, White House National Security Advisor Condoleezza Rice called a press conference to apply some "damage control." An Indian journalist asked Rice the following question:

    "Are you aware of the reports at the time that the ISI chief was in Washington on September 11th, and on September 10th, $100,000 was wired from Pakistan to these groups here in this area? And why was he here? Was he meeting with you or anybody in the administration?

    Rice replied: "I have not seen that report and he was certainly not meeting with me."

    Both the White House and CNN versions of Rice's comments were inexplicably censored. While transcripts from the Federal News Service contained the reference to the ISI chief, the White House transcript replaced the words "ISI chief" with "-----?." In the CNN version, the phrase "ISI chief" was replaced with "(inaudible)."

    Can the NSA provide the American people with any intercepted phone calls that prompted these strange deletions?

    On October 9, 2001, the Times of India reported that Gen. Ahmad had been fired as the head of ISI on his return to Pakistan. According to the Times, the FBI "sought his removal after confirming that $100,000 had been wired to WTC hijacker Mohammed Atta" at Gen. Ahmad's order.

    Does the NSA have a tape of that phone call from FBI headquarters to the ISI that it would like to share with the American people?

    And While They're at It...
    Maybe the NSA's spooks and sleuths could solve a few other lingering mysteries, including:
  • Disclosing the identity of the Anthrax Killer who terrorized Washington in the aftermath of 9/11
  • Compiling a list of the corporate leaders who attended Dick Cheney's secret energy task force meeting and a summary of the agreements that were reached,
  • Detailing what the Pentagon did with $7 billion in "missing" funds, and
  • Revealing which intelligence officials were responsible for misappropriating $742.5 billion from special US Treasury accounts and shipping the funds to what the International Currency Review describes as "offshore bank accounts belonging to so-called Title 18, Section 8, US Government intelligence community corporations."

    If the government's snooping were providing answers to questions like these, there might be more support for the program.

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