Sludge Report #123 – You Can’t Touch Pug Winokur
Alastair Thompson Friday, 8 February 2002, 11:49 am
Column: C.D. Sludge

In This Edition: Catherine Fitts Response to SEC CIO re SEC’s Relationship With DynCorp and Arthur Andersen/Conflicts of Interest – Scoop Correspondence with Dyncorp Vice President, Corporate & Marketing Communications Charlene A. Wheeless

NOTE: Authors of this report will be anonymous and wide ranging, and occasionally finely balanced. Indeed you are invited to contribute: The format is as a reporters notebook. It will be published as and when material is available. C.D. Sludge can be contacted at The Sludge Report is available as a free email service..Click HERE – to subscribe…

Smug Pug The Cancer Man

Sludge Report #123

You Can’t Touch Pug Winokur

Herbert “Pug” Winokur was the chairman of the Enron Finance Committee that approved the loss hiding and profit boosting accounting measures blamed for the bankruptcy of the largest company in US history.

He is also on the ultra-secretive non-elected Board of Governors of the Harvard Corporation.

And he is a director of DynCorp – a mega-corporation in the security, telecomms and military contracting arena which provides security and communications systems to most of the US Government – including the Department of Justice – and many of the US banks and mega corporations. It also provides mercenaries to the war on drugs in Colombia among other things.

Several members of the George W. Bush cabinet are former executives and shareholders in Enron including the Vice President.

Many also have ties to Dyncorp and George himself went to Harvard.

Pug Winokur is believed to have been involved in the Harken Energy deal that connects George to financing from Osama bin Laden. (See… The GW Bush – Osama Bin Laden Connection

Hopefully you by now have the picture.

Now, according to the US President’s spokesman no special care need be taken with ensuring the Department of Justice investigation into Enron is sufficiently independent.

In Sludge’s view if ever there was a case for having a special counsel appointed for investigation of a President and his Government – ala Kenneth Star – then now is that occasion.

According to the rule of law no-one should be untouchable from investigation.


—–Original Message—–
From: Catherine Austin
Subject: DynCorp Disgrace by Kelly O’Meara, Insight Magazine


From: Bartell, Michael E.
Thursday, February 07, 2002 3:29 PM
Response to email of 1/14

Ms. Catherine Austin Fitts
Via email
Dear Ms. Fitts,

Thank you for your electronic mail message on January 14, 2001 to our Office of the Inspector General. The message was forwarded to me for response. I appreciate your bringing the DynCorp Inc. article in Insight magazine to our attention.

We have had discussions with senior DynCorp officials and understand that the alleged activities noted in the Insight article were thoroughly investigated by both DynCorp and the Department of the Army, and appropriate action has been taken. In addition, the DynCorp organization that provides the SEC with IT infrastructure support is a completely separate organization (Information & Enterprise Technology subsidiary) from the organization referenced in the article, and none of the personnel assigned to the SEC have had any involvement with the referenced contract.

Again, I appreciate your concern and bringing the article to our attention.


Michael Bartell
Securities and Exchange Commission


From: Catherine Austin Fitts
Sent: Thursday, February 07, 2002 4:25 PM
To: Bartell, Michael E.

Subject: SEC’s Relationship With DynCorp and Arthur Andersen/Conflicts of Interest

Mr. Bartell:

Thank you very much for your response.

DynCorp’s lead investor is Herbert S. Winokur’s company, Capricorn Holdings. Mr. Winokur is the former Chairman of DynCorp and currently sits on their board as does his partner, Dudley Mecum. He is currently the chair of DynCorp’s compensation committee. That is the person who leads the process to determine how much all the senior managment gets paid —both salary and stock options. DynCorp’s most recent proxy lists their auditor as Arthur Anderson.

Mr. Winokur is also the chair of the Finance Committee of Enron. This is the person on the board who is most responsible for the board in ensuring that the company’s finances are managed on a sound and prudent basis commensurate with optimizing sharedholder’s value. Mr. Winokur testified before Congress today on behalf of a special committee of the Enron board. He indicated that he and his fellow board members had been mislead by Enron’s management, Enron’s auditor, Arthur Anderson, and their outside general counsel, Vinson & Elkins.

Under these circumstances, I would like your official position on the internal control issues related to:

1. DynCorps management of SEC and Department of Justice computer systems used by the enforcement teams currently investigating criminal and civil allegations regarding fraud and obstruction of justice by Enron, Enron’s board (including Mr. Winokur) and Arthur Anderson, including their admission of document shredding.

2. Use by the SEC of any information systems contractors that have Arthur Anderson as an auditor or critical joint venture partner or subcontractor and the internal control implications to the SEC of doing so.

3. Accessibility through your website of the SEC contract budget so that investors can understand the potential for conflicts of interest created by government outsourcing critical information systems (and access to internal knowledge) to companies whose investors benefit from changes in SEC policies.

I would also like to know what contracts Arthur Anderson has with the SEC and whether or not —given their admission of document destruction and Mr Winokur’s testimony regarding their lying to board members–you plan to continue to use such a company? My understanding is that most government contracts permit an immediate cancellation for convienance.

Thank you very much for your response and attention to this matter. I believe it goes to the heart of the SEC mission of ensuring the transparency of financial information that is an essential prerequsite for free markets. For the SEC to do that it must have the ability to protect its own privacy and the integrity of its information and information systems and its own financial reporting and management.

Good housekeeping starts at home.

Very Truly Yours,

Catherine Austin Fitts
Former Assistant Secretary of Housing, First Bush Administration.