Information for this article comes from long-time business, finance and political writer and analyst Bob Chapman, who publishes the bi-weekly International Forecaster. It's power-packed with key information and a valued source for this writer, who obtained voluminous material directly from this publication. People need to know it. Read on.
SueAnn Arrigo is the source. She was a high-level CIA insider. Her title was Special Operations Advisor to the Director of Central Intelligence (DCI). She also established the Remote Viewing Defense protocols for the Pentagon in her capacity as Remote Viewing Advisor to the Joint Chiefs of Staff (JCS). Her work earned her a two-star general rank in the military. She called her new ranking a "ploy" so the Pentagon could get more of her time and have her attend monthly Joint Chiefs of Staff meetings. Only high-level types are invited, and she was there from October 2003 to July 2004.
Part of her job involved intelligence gathering on Iraq and Afghanistan—until August 2004, when she refused to spread propaganda about a non-existent Iranian nuclear weapons program and left. She followed in the footsteps of others at the CIA who resigned for reasons of conscience and became critics—most notably Ray McGovern, Ralph McGehee, and Phil Agee.
On May 16, 2008, Arrigo sent extensive government corruption and cover-up information to Henry Waxman, Chairman of the House Oversight and Government Reform Committee—in 12 separate cases. This article covers four of them, or about one-third of what Congress got. The 12 are explosive and revealing, but just the tip of the iceberg. They contain evidence of:
SueAnn Arrigo offers a glimpse of militarism gone mad, and at great personal risk. In August 2001, she says DCI George Tenet told her to assemble "a moving van full of Pentagon documents showing Defense Contractor kickbacks to Pentagon officials." She did as instructed, not exposing the corruption she learned about, but concealing it. She believes now that this was done so the CIA could divert defense business to Halliburton and "Carlyle-related contractors." She stated: "The mood at the CIA and Pentagon was 'war is coming' because the Bush family stands to make billions from it—so get ready."
Arrigo was shocked at what she found and how brazenly the Pentagon wrote it up. The perpetrators must have been feeling untouchable, she thinks, especially since 2001. According to her, the CIA used the material to blackmail or bribe its officials "into 'working on' the Halliburton-Carlyle team." Top CIA types were involved, and Tenet laid it out for Arrigo: she says he told her, "You've given me the keys to the kingdom. [These documents] will make me rich."
Arrigo collected three types of information. Her recent report covers just one of these, but it includes plenty of incriminating evidence. Her precise recall of dates and names is incomplete, but the events she recollects are very revealing about how Washington operates. Perhaps it's always been this way—but never to the degree it reached under George W. Bush. Arrigo exposes the scheme—the systematic looting of the U.S. Treasury to enrich contractors, high-level officials at the Pentagon, and CIA and others well-placed in government. Exact amounts are unknown, but at a mimimum the costs amount to multi-billions, even trillions—at taxpayer expense, diverted from essential social and infrastructure needs.
Arrigo discovered high-level Pentagon corruption that involved bid-rigging and implicated "an Air Force general on the JCS and a Defense Contractor, Boeing." She disclosed it to JCS Chairman Hugh Shelton and DCI George Tenet, and in both instances drew blanks. She also reported it to the Government Accountability Office (GAO), the investigative arm of Congress. Her information leaves unaddressed the larger issue of whether new-generation planes are needed at an enormous cost to taxpayers. Arrigo believed they were not, and several Air Force generals agreed. Not other JCS members, however, who she learned are involved in the corruption.
There's more. They "had the gall to try to force through another unneeded plane contract for Boeing," Arrigo says. At an early 2004 JCS meeting, she says she complained about the previous undelivered order because it didn't meet Pentagon specifications. Yet one general in particular tried "to force the US military to buy another [unneeded] upgrade." One other JCS member backed her to no avail, and the new order went through. Arrigo concluded that the new plane orders were given for the purpose of enriching Boeing and high-level Pentagon types who were getting rewarded for their cooperation.
She also learned how much that cooperation was worth—an average of $22,000 "for each [JCS] meeting vote," she reports, according to their bank records. Not U.S. bank records, but CIA-arranged Swiss accounts set up specifically for this purpose. Everyone at the meeting cashed in, except Arrigo and one dissenting general. More disturbing is that this is standard Pentagon practice—handouts to contractors; kickbacks to complicit brass; and taxpayers swindled out of multi-billions—year after year.
Jeff St. Clair wrote about all this in his 2005 book "Grand Theft Pentagon: Tales of Corruption and Profiteering in the War on Terror." It's an explosive account of how military contractors scam multi-billions at taxpayer expense and not a whiff of it is reported in the mainstream media. It's the reason U.S. annual "defense" spending tops $1.1 trillion (conservatively), once all military, homeland security, veterans, NASA, debt service and other allocations are included.
Arrigo refers to the Pentagon's Receiving Department "swing shift" personnel. Only that group is involved in the scheme, says Arrigo, so other shifts are shut out and can't report it. As a CIA insider, she checked and found damning evidence—about "the military [not] getting supplies to the troops on time." She also learned that Halliburton has its "representative to the CIA," and one at the Pentagon as well. Both get federal salaries, but neither was "hired by CIA or the military through their personnel departments. Neither had done military training or trained at the [CIA's] 'Farm' as a spy." Arrigo was disturbed by what she learned, but was ordered to back off by superiors.
Things got worse. Arrigo worked at the CIA for over 30 years, reporting directly to Tenet. But she wasn't prepared for what she found—a new section at the Agency that existed without her knowledge. It employed 40 people, all working for Halliburton "while being paid by the US taxpayer as if they were CIA." The section was secret. No files were set up on them. From what Arrigo determined, they were never interviewed, never vetted. She concluded: "CIA had a back door in its security to let Halliburton put anyone they wanted in [its] hallways. It was an outrageous [breach] of US National Security," especially in a post-9/11 "war on terrorism" climate.
Shocked, Arrigo told Tenet about the section. His reply: "Yes, I know." The head of CIA building security also knew. Arrigo asked what he'd do about it. His answer: "Keep my mouth shut so I can stay alive, and I suggest you do the same." She says she asked asked if he, the CIA or Halliburton might kill her if she talked. He said he didn't think so.
Arrigo dug deeper. She got inside Halliburton's area and asked questions. Why, she sought to learn, was the company shipping half the contracted-for amounts and shortchanging the troops and taxpayers? Halliburton, she alleges, "set up the same corrupt system of swing shift receivers [for] at least three continents. They received the cartons and signed [off] that the goods were all received properly. Then the shortages later were chalked up to thefts or war damage, etc."
Arrigo again informed Tenet. His answer: "This is nothing new," then added: "Have a report about it on my desk before Christmas ." Arrigo told Tenet he was responsible for "correct(ing) Halliburton's short-shipping and its invasion of the CIA." He said he couldn't, because the White House tied his hands. Call Congress, Arrigo said, urging Tenet to be "a man of courage." Tenet ignored her, so Arrigo faxed documents revealing Halliburton fraud to the GAO—omitting national security secrets. One of the documents bragged about the scheme's profitability, asserting that having high-level officials involved made it foolproof.
The scheme was clever indeed, and even more devious than Arrigo imagined at first. Halliburton uses each shortage complaint as a new order. "In that way," she says, "[it] never [loses] by having to make good for [what's] missing," and it gets paid double for the same merchandise.
By now Arrigo knew too much, and had taken risks to learn it. What she says happened next, however, is shocking: Halliburton's "CIA Representative" confronted her, tore out her phone, ransacked her office, removed every shred of paper, and hauled her off bodily "to a prison cell" inside basement offices. She says she was intimidated and threatened, and thought she might be killed. The message was clear. She says she complained to Tenet, and showed him her bruises. According to her, he responded dismissively: "There, there, everything will be all right in the morning."
GAO still has Arrigo's files. It began investigating, but stopped. She thinks that Congress has the authority to resume the investigation and asked Waxman to do it. That's where things now stand.
In 2002, Arrigo tried a new tack—ingratiating herself with "Halliburton's Man" and using the relationship to her advantage. She offered cooperation for access to his space and made him think she was on his side. It worked, went on for four and one-half months through late May, and paid off with plenty of insider knowledge "about Halliburton and how it works." Enough to fill a book, she says, but her account sticks to highlights.
First off, according to Arrigo, is that Dick Cheney never stopped running Halliburton. "He called in orders to the man I worked for almost every day, and sometimes two or more times a day. He remained [Halliburton's] functional head in all but name. No one....had the power to override his orders." Second, Cheney never divested himself of Halliburton profits, according to Arrigo. "He merely hid how [he got them] through a series of shell companies."
One of Arrigo's jobs was to liaison between Halliburton and CIA's "creative accounting departments." In other words, their co-conspiratorial Treasury-looting efforts, and Arrigo got insider access to them. Her advanced math and computer software training qualified her. In a few months, she became expert in how the CIA and Halliburton hid what she calls their "financial illegalities."
She explained, "Computers are good ways to fool most people because [they don't] look inside of them." They can be programmed "to print out one set of books for regulators, another for Defense Contractors, another for the Pentagon, another for the taxpayer," and so forth. It's simple. Decide what you want, and machines will create it in any desired form. The trick is doing it expertly. Most criminals can't do this, so they need professionals to do it for them. This means such crimes are never secret; computer experts know about them. The CIA thus is more vulnerable than ever before to exposure by people of conscience like Arrigo.
She says Halliburton has less expertise than the CIA, so the CIA took charge to make their two computer systems compatible. This took several years and involved over 100 programmers. They came, left for other jobs, and took insider knowledge with them, thus risking more leaks about the corruption of Halliburton, other contractors, the CIA, the Pentagon, high-ups in government, and such financial institutions as the Basel-based Bank of International Settlements.
Many investigations are ongoing, but huge pressure is exerted to quash them. Leaks, it is feared, may unravel the whole scheme. For now, though, cover-up software hides it, while taxpayers fund it. Amounts involved, already up to unimaginable levels, keep growing.
Arrigo gives an example of how the system works. Suppose Halliburton sold product A in 100 Lot Sizes, in Quantity X at Price Y to the Pentagon on a given date. Most civilian invoices disclose such details. Pentagon invoices don't. This provides contractors with a chance to cheat. and can allow Pentagon brass to profit. Missing information conceals whether all merchandise was delivered, as there is nothing to indicate quantities shipped. Further, repackaging also hides proper amounts. Just omitting the price conceals whether a shipment was shorted, but the CIA is more clever than that. It experimented with "tested receivers" at some of its "front companies" to learn how best to deceive. What works best, she says they have found, is "shifting prices around like random noise"—one day this cost, another day a different one, and so forth.
Ledger entries are inflated, undercut, omitted, added, or varied in amounts of similar transactions. Like a "professional crime institution," Arrigo alleges, the CIA is expert at falsifying books so no one catches on.
Another example, according to Arrigo, is that the CIA varies its front company prices monthly. Suppose, she suggests, Halliburton made a purchase "when it [used] a cost inflation idea of cheating. Halliburton [has] an incentive to inflate the cost of its purchases [to] justify [its] high [price] to the military." So, as standard practice, it uses the CIA's highest price and claims that amount for its cost.
But comparing two sets of books can reveal the scheme, and methodology, therefore accounting entries had to become more sophisticated to conceal it. Halliburton, says Arrigo, can take CIA prices and double them on its books. It can then claim the Agency recorded half the charge "accidentally," saying its front company promised a 50% discount, but never delivered. This makes the CIA look bad, and it can balk. No matter. Halliburton still does it, she reports, but she notes that the CIA has "lots of fronts with lots of customers and worse problems [to hide] than merely jacking up prices. Some fronts [are] fictitious and [make] no products." Others, she says, have real customers plus fake ones to launder money.
In early 2002, the GAO received damning evidence: that Halliburton overbills and short-ships—deliberate fraudulent acts—as standard company practice. The GAO can expose the fraud by examining Halliburton and Pentagon invoices that don't match and are grossly inflated. Further, the GAO can show that payments exceed amounts billed.
One document Arrigo provided to the GAO lists Halliburton's CIA and Pentagon staff, what little official records disclose about them, their secret office locations, and their private security staff. Arrigo discovered that Halliburton's 'top CIA man' served prison time for felony fraud. Another, at the Pentagon, was convicted as well—for stealing Army vehicles, then profiteering by shipping them overseas.
Arrigo says Dick Cheney knew about these security breaches and blocked background checks to conceal them, but she found out about them, just as she learned about the Pentagon fraud that followed. She says she has a handwritten Cheney memo instructing "his man" "to make sure that the Pentagon pays us all that it owes us and then some." Arrigo claims that the CIA's forgery department verified that the writing is Cheney's.
Arrigo says she also has a letter from Halliburton's "Pentagon man" to his CIA counterpart. In it, he brags how he's "getting more than we bargained for [from] the Pentagon" and suggested they get together to compare notes. They did, and Arrigo taped their conversation. The evidence, once more, is damning—about how easy it is to scam the system at the Pentagon; befriend accounting personnel; install company programmers; check bills supposedly behind in payments; and install a special software code for higher amounts.
Arrigo informed George Tenet about what she was learning, expecting he'd "stop Halliburton from ripping off the American taxpayer via the CIA and the Pentagon." Tenet, she says, appeared unperturbed, responding: "Well, you certainly have done a thorough job, as usual." He then offered to inform the White House to "correct the problem." Arrigo did that herself, and informed the GAO as well. Only later did she learn that the Bush administration blocked an investigation.
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