Deja Vu View – $59 Billion Missing from HUD

Inspired by an insight from our attorney, Carolyn Betts, and the practice of one of our favorite journalists, Sam Smith at Progressive Review, we are going to republish bits and pieces of previous articles, adding commentary and occasionally taking the liberty of updating or polishing them. We will call these posts “Deja Vu View.”

Here is our first one.

As the news continues to unfold regarding the declines in global housing and stock markets, a false impression is left that our society is short on resources. Nothing could be further from the truth. True, if one sits in an office flushing money down a toilet all day, it is possible to run out of money. First, you are not spending your time doing anything productive. Second, investors are less likely to keep financing you if their money is destined to be flushed down the toilet unless you can offer them something credit worthy — in our case the promise of perpetual money creation supported by perpetual war.

The solution is not to find a way to keep the money game going. What is called for is a plan to stop flushing money down a toilet, to instead start generating value doing productive activities and to put on some strong gloves and boots and head for the sewer to get back the money that has been flushed or the offsetting assets held by those who enjoyed the flushing and use those resources to bankroll your plan to do productive things.

With that opportunity in mind, I would like to make some comments on the $59 billion that went missing at HUD in fiscal 1999.

If you want to understand the housing bubble, you have only to answer the questions, “who has the $59 billion missing from HUD and how do we get it back ?” Now, you are probably thinking, “I don’t care, because we have no power to get it back.” Indeed, under common law, the government contractors and depositories who are responsible for that disappearance are fully liable, so there is indeed a way to get that money back through common law offsets without tracing and effecting international seizures.

Here is an excerpt from my case study Dillon, Read & the Aristocracy of Stock Profits. If you are interested in how the housing bubble really got going, it is a must read. Among other things, it tells the story of how Andrew Cuomo, now Attorney General of New York, helped to destroy the internal controls at the Department of Housing and Urban Development.

. . .“Then on October 8th, an hour after the House of Representatives voted to move forward with the Clinton impeachment hearings, the CIA quietly posted Volume II of the CIA Inspector General report on the “Dark Alliance” allegations on their website. Volume II included a copy of the Memorandum of Understanding between DOJ and CIA. As Mike Ruppert has hypothesized, the message from President Clinton to the Republicans was simple and clear. You take me down and I will take everyone down.”

“Literally the next day, October 9th, Secretary Andrew Cuomo issued a series of sole–source contracts through Ginnie Mae, the mortgage securities operation at HUD, to John Ervin’s company (the same company leading the qui tam lawsuit against Hamilton) and to Touchstone Financial Group, a firm apparently started by a former Hamilton Securities Group employee who brought on a series of former Hamilton people to do some of the Hamilton work for HUD. One can only make a list of more unanswered questions of the political deals that may have been happening behind the scenes. After all, October 1, 1998 was the beginning of the fiscal year in which HUD was missing $59 billion from its accounts — for which the HUD OIG was to refuse to provide an audit as required by law. This amount of money translates into $4.9 billion per month, $1.2 billion per work week or $30.7 million per work hour. This was somebody’s payback time.”

From Financial Coup d’ Etat, Dillon Read & the Aristocracy of Stock Profits

For the supporting documentation on the $59 billion missing from HUD, see:

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