Missing Money: A Personal History – 1989 to 2019

C. Austin Fitts, Assistant Housing Secretary, conferring with assistants during a break in her testimony
before a Senate subcommittee, 1989. (The New York Times/Andrea Mohin)

~ ~ ~ ~ ~

“The first step in liquidating a people is to erase its memory. Destroy its books, its culture, its history. Then have somebody write new books, manufacture a new culture, invent a new history. Before long that nation will begin to forget what it is and what it was…. The struggle of man against power is the struggle of memory against forgetting.”
~ Milan Kundera

“It’s deja vu all over again.”
~Yogi Berra


Chronologies are valuable tools in understanding the financial system and economy. For chronologies of institutions and events involved in $21 trillion missing from the U.S. government since federal fiscal 1998, see:



I. Prologue: Philadelphia (December 1950–May 1978)

II. Prologue: Wall Street (August 1978–April 1989)

III. Assistant Secretary of Housing-Federal Housing Commissioner U.S. Department of Housing & Urban Development, Bush I (April 1989–August 1990)

IV. Building Hamilton Securities (August 1990–November 1995)

V. The War on Hamilton (November 1995–September 2001)

VI. The War on Everyone (September 11, 2001–January 2006)

VII. The Financial Crisis (January 2006–November 2009)

VIII. Launching The Solari Report (November 2008–November 2012)

IX. Planet Equity; Planet Debt (November 2012–November 2016)

X. Fortress America (November 2016–May 2017)

XI. The Skidmore Report (May 2017–October 2018)

XII. Never Never Land—The Post FASAB 56 World

I. Prologue: Philadelphia
December 1950–May 1978

“Who is that as***le?”
~ Catherine Austin Fitts as a child contemplating a foreclosure sign
by order of the Assistant Secretary of Housing-FHA Commissioner

My childhood home was a brick row house in West Philadelphia at 48th and Larchwood. My father bought our home with a Veterans Administration (VA) insured mortgage after returning from service as a surgeon in WWII. Ours was a city neighborhood filled with families and children who lived and played on our porches, stoops, and sidewalks.

When I was a young girl, there were four boarded-up home foreclosures on the city block catty-corner to our own. The boarded-up houses had been financed with Federal Housing Administration (FHA) insured mortgages. They had large foreclosure signs that boldly announced, “By order of the Assistant Secretary of Housing-Federal Housing Commissioner.”

There was a family of six people living in a one-bedroom apartment in a house across 48th Street. My young mind could not understand why four perfectly good houses could be boarded up and lie empty for years, while six people—who would appreciate and take good care of a home—lived in a one-bedroom apartment. I intuitively understood that dense living conditions and empty homes were harmful for both productivity and equity values in our neighborhood.

Whenever I walked by the foreclosure signs, I would look at the long title, “By the order of the Assistant Secretary of Housing-Federal Housing Commissioner,” and think, “Who is that as***le?” In 1989, when I was sworn in as the Assistant Secretary of Housing-Federal Housing Commissioner in the first Bush Administration, I realized immediately, “Uh-oh, I’m the as***le.”

I saw a great deal destroyed in West Philadelphia. Speculative homebuilder deals that converted quickly to boarded-up foreclosures were one of the classic Housing and Urban Development (HUD) frauds. It was so prevalent through successive housing bubbles throughout my career that it was later immortalized by the TV show, The Sopranos.

In West Philadelphia in the 1950s and 1960s, however, HUD frauds were not our worst problem. Narcotics trafficking and the increased enforcement and covert violence that came with it steadily eroded our community. The lies that flowed glibly through our new television sets eroded our culture. We stopped talking to each other on our stoops and stayed inside to watch the screens that artfully persuaded us to borrow and buy more and trust each other less. Taking on greater mortgage debt, some of our neighbors escaped to bigger homes in the suburbs. People spent a great deal of time and money on the hope that they could “get away” to a place that was safe.

Philadelphia was where I learned to live with the absence of safety and with violence. I tell one of those stories in the 3rd Quarter 2017 Wrap Up: Control 101.

When I was in high school, a series of stabbings occurred near the University of Pennsylvania, emanating towards our area. There was an unusual—and professional—feeling to them. So one day, I took out the newspaper reports and a map to trace the progression. There was indeed a pattern. Each murder was one block south and two blocks west of the previous murder. Each murder occurred after the same regular amount of time. If the pattern continued, the next murder would occur the coming week on the corner where I lived.

Several nights later, my parents were giving a dinner party. I went to visit a friend, and then headed home when the party was expected to wind down. I drove home and parked around the corner. As I parked the car, I saw two men sitting inside the car in front of mine with the motor on and their lights off. I got out of my car, and so did they. I did not see anything else as I ran at Olympic record speed to my house, up the stairs, and up to the front door. The only thing I heard was the sound of footsteps running behind me.

As luck would have it, my father was opening the door for guests returning home. I threw out my arms, gathering all of them with me, as I went flying into the hallway. Presented with a large party of surprised witnesses, the two men took off in a dash. It was one of many times that my appreciation for the thin veil that lies between us and the physical force used to control us may have saved my life. Growing up in a rough neighborhood has had clear advantages.

Ten years later, my mother’s body was found on the roof of our home in February, 1976. I knew my father agreed with me that it was an assassination when he insisted on receiving the insurance. It was too late to protect his wife, but he was not going to allow his family to be cheated out of the insurance monies. It fell to me to arrive on the scene and take charge of the family and funeral arrangements. I believed that if I handled matters discreetly, I could protect my father from a similar fate. However, he died four years later under suspicious circumstances. The lies surrounding their deaths became part of the accumulated lies that eventually destroyed what remained of our family. In the meantime, the machinery that harvests people and neighborhoods with a lethal combination of drugs, media, mortgage fraud, and enforcement kept getting more powerful. I wanted to know why.

One of the things I learned growing up was that the fastest way for me to understand reality was to identify the actual transactions that were happening and estimate the allocation of time and resources, or, “how the money worked.” I was told as a young child that I tested as a math genius. Converting the gruesome or incomprehensible side of life into a mathematical flow seemed to my childlike mind a practical way of unpacking the mysteries of adult behavior. For many situations, it was the only way to make sense of things as I traveled back and forth between multiple cultures and places. I got a better understanding of what was happening by following transactions than if I relied on people’s description of what was happening or depended on the local and national news media. What people said they were doing and what they were actually doing were distinctly different things. Our culture lived in a state of deep denial, and it seemed to grow deeper every year.

This was one of the reasons I attended Wharton—the business school at the University of Pennsylvania—from 1976-78, receiving my MBA in the spring of 1978. Still trying to understand “how the money worked,” I joined Goldman Sachs as an intern for the summmer of 1977 and then, after graduation, headed to New York and a job in investment banking on Wall Street at Dillon Read & Co., Inc.

I was going to learn how the money worked and do something about it.

Related Resources:

Solari Report:

The Devil’s Chessboard with David Talbot

The Deep State: Part I and Part II


Dillon Read & the Aristocracy of Stock Profits


“The Popsicle Index”

“Meditations at the Crossroads”

“My Family”

Catherine Austin Fitts: Resume


II. Prologue: Wall Street
August 1978–April 1989

The partners’ entrance to Dillon Read’s offices on Wall Street at 46 William Street.
(Courtesy Robert Gambee and his book Wall Street

“This game is more fascinating than no-limit stud poker.”
~ Clarence Dillon

One of the things I learned working on Wall Street was about the dangers of working for the federal government. I describe one story in my online book Dillon Read & Co., Inc. & the Aristocracy of Stock Profits:

James Forrestal’s oil portrait always hung prominently in one of the private Dillon Read dining rooms for the eleven years that I worked at the firm. Forrestal, a highly regarded Dillon partner and President of the firm, had gone to Washington, D.C. in 1940 to lead the Navy during WWII and then played a critical role in creating the National Security Act of 1947. He then became Secretary of War (later termed Secretary of Defense) in September 1947 and served until March 28, 1949. Given the central banking-warfare investment model that rules our planet, it was appropriate that Dillon partners at various times led both the Treasury Department and the Defense Department.

Shortly after resigning from government, Forrestal died falling out of a window of the Bethesda Naval Hospital outside of Washington, D.C. on May 22, 1949. There is some controversy around the official explanation of his death—ruled a suicide. Some insist he had a nervous breakdown. Some say that he was opposed to the creation of the state of Israel. Others say that he argued for transparency and accountability in government, and against the provisions instituted at this time to create a secret “black budget.” He lost and was pretty upset about it—and the loss was a violent one. Since the professional killers who operate inside the Washington beltway have numerous techniques to get perfectly sane people to kill themselves, I am not sure it makes a big difference.

Approximately a month later, the CIA Act of 1949 was passed. The Act created the CIA and endowed it with the statutory authority that became one of the chief components of financing the “black” budget—the power to claw monies from other agencies for the benefit of secretly funding the intelligence communities and their corporate contractors. This was to turn out to be a devastating development for the forces of transparency, without which there can be no rule of law, free markets or democracy.

I studied Forrestal’s oil painting with his solemn stare during many a private lunch—each time reminded that government service was an important duty and honor in the Dillon tradition, but it was a dangerous business. Congressional Committees had roughed up Clarence Dillon during the Pecora Commission hearings in 1933 that investigated the cause of the stock market crash. Forrestal had died. Douglas Dillon was Secretary of the Treasury when Kennedy was assassinated.

On Wall Street, I also learned about what is now sometimes referred to as “the deep state.” At the time, Dillon Read was run by our chairman Nicholas F. Brady and president John Birkelund. Here’s more from Dillon Read & Co., Inc. & the Aristocracy of Stock Profits:

One of my favorite Dillon Read officers was the son of a former Dillon chairman and, thus, remarkably wise about the ways of the firm. I sought him out after a Birkelund temper tantrum and said that Birkelund was not at all like a “Brady Man” and that I was surprised at Nick’s choice. My colleague looked at me with surprise and said something to the effect of “Brady did not choose Birkelund. Birkelund is a ‘Rothschild Man.’” I then said something about Dillon being owned by the Dillon partners, so what did the Rothschilds have to do with us? My colleague rolled his eyes and walked away as if I was an interloper out of my league among the moneyed classes—clueless as to who and what was really in charge at Dillon Read and in the world.

I also saw the importance to the partners of Dillon’s relationship with RJR Nabisco and the fight for control of RJR that resulted in the book and movie, Barbarians at the Gate. Many years later in 2002, when the European Union filed a lawsuit against RJR Nabisco for money laundering with numerous factions of transnational organized crime syndicates, the success of the KKR syndicate (another private equity firm) in paying off the leveraged buyout debt made much more sense than it did at the time. I describe these events in the chapter on RJR in Dillon Read & Co., Inc. & the Aristocracy of Stock Profits. From the European Union filing:

“The RJR DEFENDANTS have, at the highest corporate level, determined that it will be a part of their operating business plan to sell cigarettes to and through criminal organizations and to accept criminal proceeds in payment for cigarettes by secret and surreptitious means, which under United States law constitutes money laundering. The officers and directors of the RJR DEFENDANTS facilitated this overarching money-laundering scheme by restructuring the corporate structure of the RJR DEFENDANTS, for example, by establishing subsidiaries in locations known for bank secrecy such as Switzerland to direct and implement their money-laundering schemes and to avoid detection by U.S. and European law enforcement. This overarching scheme to establish a corporate structure and business plan to sell cigarettes to criminals and to launder criminal proceeds was implemented through many subsidiary schemes across THE EUROPEAN COMMUNITY. Examples of these subsidiary schemes are described in this Complaint and include: (a.) Laundering criminal proceeds received from the Alfred Bossert money-laundering organization; (b.) Money laundering for Italian organized crime; (c.) Money laundering for Russian organized crime through The Bank of New York; (d.) The Walt money-laundering conspiracy; (e.) Money laundering through cut outs in Ireland and Belgium; (f.) Laundering of the proceeds of narcotics sales throughout THE EUROPEAN COMMUNITY by way of cigarette sales to criminals in Spain; (g.) Laundering criminal proceeds in the United Kingdom; (h.) Laundering criminal proceeds through cigarette sales via Cyprus; and (i.) Illegal cigarette sales into Iraq.” ~ RJR Nabisco, Dillon Read & Co., Inc. & the Aristocracy of Stock Profits

Investment banking suited me. I developed a reputation for taking on the transactions that others thought could not be done—typically, transactions that involved many different constituencies and financial flows. I liked sorting out highly complicated public-private financial flows. I liked working with people from scores of different industries, places, and worlds. I became a managing director and member of the board of directors in eight years—a record time. I could not imagine that I would ever have a career other than as an equity owner of Dillon Read. I did not love everything and everyone in the environment, but I loved my investment banking work.

While at Dillon Read, I had my first run-in with fraudulent apartment deals and municipal housing bonds with credit dependent on mortgages insured by FHA/HUD on Wall Street, also described in my online book Dillon Read & Co., Inc. & the Aristocracy of Stock Profits. This may have had something to do with Nick Brady’s first comment to me when I informed him that I was going to be nominated as Assistant Secretary of Housing-Federal Housing Commissioner in 1989: “You can’t go to HUD—HUD is a sewer.” My then-husband was a successful securities attorney who specialized in mortgage securities. As the housing bubble exploded through the 1980s, his business boomed. The banker who led the housing deals was recruited by John Birkelund and after leaving Dillon went to Rothschild, Inc., where John had worked before moving to Dillon Read.

I also had my first introduction to the concept of entrainment technology and subliminal programming. I overheard a discussion of this technology in 1984 in anticipation of its rollout on TV. This brief insight was frightening—and was the reason I gave up watching television that year.

The Dillon Read partners sold the firm to Travelers Insurance in 1987, shortly after I became a partner. With Nick leaving to become Secretary of Treasury at the very end of the Reagan administration, the handwriting was on the wall. With John Birkelund assuming control of the firm, I was no longer welcome at Dillon Read. It was not the only thing to come apart. Shortly after the firm was sold, my marriage ended in separation. I was divorced two years later.

I had an offer from another firm to move when our non-compete contracts ended. I anticipated I could have more, as I had turned down inquiries from headhunters on the basis that I would honor my non-compete contract and my promise to Brady that I institutionalize my relationships and book of business before I left the firm. My other option was to go into the Bush administration as several other partners were planning to do.

There were several reasons why I wanted to work in the federal government. I had become convinced after eleven years on Wall Street—with exposure to many different parts of the economy and financial markets—that the U.S. economy was engineered through Washington, by monetary policy engineered by the Federal Reserve and fiscal policy engineered by Congress and the Executive branch. To understand how the money in one neighborhood in West Philadelphia worked—let alone figure out how to get it to work well—I needed to understand federal finances. Another reason was that I was confident that entering government service would ensure that the business I had built would stay at Dillon Read. Keeping this promise to Brady and the firm was very important to me.

My loyalty was not reciprocated. I went to work at HUD despite the fact that Nick Brady, now Secretary of the Treasury in President George H.W. Bush’s administration, blackballed me with the Bush transition team. I now believe that Brady did so for reasons relating to my parents’ deaths, although it took me many years to come to that conclusion. It was not the first time that Brady had blackballed me. He tried to decline supporting me when Ray Price, executive director of the Economics Club, insisted that he support me for membership in the Economics Club. Ray stood his ground, and I did join with Brady’s nominal support. Brady also blackballed our partner Peter Flanigan’s effort to put me up for the Links Club in New York. Peter was surprised and embarrassed and had me accepted at the Bond Club instead.

Former Congressman and incoming Secretary of HUD, Jack Kemp, was willing to override Brady’s veto. A member of the transition team insisted that Kemp and Brady loathed each other, which is how I got the interview with Kemp. Kemp had a HUD scandal on his hands and wanted someone clean with strong financial credentials.

Related Resources:

Solari Report:

Entrainment, Subliminal Programming and Financial Manipulation with Adam Trombley


Blackballed – See first 25 minutes of Dark Journalist interview, August 2018


The “Kemp Tapes” – In the late 1990s, Catherine’s attorneys asked her to record her recollections of working in the Bush Administration. She recorded a series of cassettes that, over time, passed around the Internet.


“The Wonder Woman of Muni bonds,” Business Week, Feb. 23, 1987

“Buffet’s Big Bet on US Federal Mortgage Credit & Housing”

Book Review: “Cotton Candy Land: A review of Nick Brady’s A Way of Going


Dillon Read & Co., Inc. & the Aristocracy of Stock Profits, by Catherine Austin Fitts, March 2006: A comprehensive business-school-quality case study of the Washington-Wall Street relationship depicting the Hamilton litigation and surrounding events in the larger context of the central banking-warfare model and political economy operating in the U.S. today.


III. Assistant Secretary of Housing-Federal Housing Commissioner
U.S. Department of Housing & Urban Development, Bush I
April 1989–August 1990

You can’t go to HUD—HUD is a sewer.
~ Nicholas F. Brady, Secretary of the Treasury, Bush I to Catherine Austin Fitts, 1989

The first Bush administration began at the end of a housing and mortgage bubble during the 1980s that was marked by significant financial fraud—all of which contributed to the collapse of the savings and loan (S&L) industry.

The U.S. Treasury, under the leadership of now Secretary of Treasury Nick Brady, worked with Congress to pass the Federal Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), which created the Resolution Trust Corporation (RTC) to resolve failed savings and loan institutions and related housing and mortgage portfolios and fraud. Of the 3,234 savings and loan associations in the U.S., 1,043 (32%) failed between 1986 and 1995. During this period, the financial controls in the federal mortgage credit programs were overridden, causing a significant influx of defaulted mortgages and foreclosed assets. This included the largest federal mortgage insurance operations in the federal government, the FHA at HUD. Until the creation of the RTC, the FHA had the largest property disposition operation in the country.

I arrived in Washington in April, 1989. I described my responsibilities as Assistant Secretary of Housing in Dillon Read & Co., Inc. & the Aristocracy of Stock Profits:

As Assistant Secretary for Housing-Federal Housing Commissioner, I was responsible for the operations of the Federal Housing Administration (FHA), which was the largest mortgage insurance fund in the world. FHA at that time had annual originations of $50-100 billion of mortgage insurance and an outstanding official portfolio of $320 billion of mortgage insurance, mortgages and properties. (CAF note: Today, it is officially $1.1 trillion.) Leading the FHA necessitated significant understanding of how homes are built, how mortgages finance thousands of communities throughout America and how investors finance the process by buying securities in pools of mortgages. My responsibilities included the production and management of assisted private housing; management of an organization of 7,000 employees in 80 offices nationwide; and development of network information systems and tools. In addition, I served as advisor to the Secretary of HUD on financial markets regulatory responsibilities, including the RTC Oversight Board, Federal Housing Finance Board, Home Loan Bank Board System, and the mortgage GSEs—Fannie Mae and Freddie Mac.

While my experience as Assistant Secretary cleaning up significant mortgage fraud that lost the government billions during the 1980s confirmed that HUD’s financial reputation was deserved, leading the FHA provided invaluable insight into how government management of the economy one neighborhood at a time really harms communities. Hence, access to the “real deal” on real estate and the mortgage markets was an opportunity. If you want to see the real economy in a place, you absolutely want an accurate map of the financial flows in that system—starting with the real estate.

Shortly after arriving at HUD in April 1989, I began to learn about the FHA Coinsurance program. Since 1984, HUD/FHA had allowed private mortgage bankers to issue federal credit to guarantee multi-family apartment projects. After issuing $9 billion in mortgage guarantees, HUD/FHA was to lose something approaching 50% of the value of the portfolio—a level of losses hard to explain with mortal logic. When my staff approached me with a proposal to bail out a mortgage company so they could continue to lose money for us, I asked why we should spend money to lose more money in a way that would harm communities, not to mention the transaction they were proposing was illegal. After a long silence during which 30 staff members intently studied their feet, one brave soul explained to me that the mortgage bank was owned and run by a major Republican donor. Shocked, I said. “I am a major Republican donor,” and pointing to my presidential cuff links that were adorning my French cuffs, “I got a pair of cuff links. You get cuff links. You don’t get $400 million of federal credit to throw down the drain.” My staff looked at me like I was so naive and clueless that there was no point in trying to communicate with me—better to let me learn the hard way.

Within minutes, a screaming Jack Kemp, furious that I had not provided illegal subsidy to keep the mortgage banking company going (despite his orders to stop anything corrupt or illegal), called me on the carpet. The problems were compounded by the opinion of HUD General Counsel Frank Keating, who had joined from DOJ, that we did not have to honor our contracts. Rather we could abrogate contracts and ignore the law. If those who had been harmed sued us, Frank said, by the time they won “we will be gone.” Frank was to help write and pass new laws and administrative policies to use HUD as a player in War on Drugs activities to generate enforcement revenues. After many dirty tricks and much ranting and raving, HUD was to turn the defaulted coinsurance portfolio over to a private contractor named Ervin & Associates, a newly created company founded by John Ervin, a former employee of Harvard’s HUD property management company, NHP, Inc. (formerly National Housing Partnerships.)

The coinsurance program was so corrupt that even the Mortgage Bankers Association lobbied HUD to clean it up. After issuing $9 billion of federal insured multifamily mortgages in five years before I shut it down, the coinsurance was ultimately to have a default rate of 50% despite a rich provision of capitalized interest. I describe what happened in more detail in the “Kemp Tapes.”

My concern for money disappearing illegally from the federal government began when I first arrived at FHA. One way to summarize my professional life since the day of my arrival in Washington in 1989 is that I have watched, documented, and tried to stop money disappearing from the federal government ever since.

There are as many ways to steal money from HUD and the federal government as there are recipes in the Joy of Cooking cookbook. As long as the federal government can collect taxes and sell Treasury securities and the Federal Reserve banks operate a fiat currency system supported by a global military, both without real audits or lawful disclosure by agency and Congressional district, there are always more assets and money that can go missing. The existing federal credit mechanism is a harvesting system—it comes with a license to steal. That is why elections are hotly contested—not because the executive branch controls and governs the U.S. government. Rather, it is because the political officials who control the executive branch control a portion of the private patronage that comes with being the operator of a financially secret operation managing trillions in credit, assets, spending, and related data and regulations.

The FHA mortgage insurance operations are generally divided between two funds. The coinsurance program described above was run from the FHA General Fund, which included the multifamily, hospital, and other high-risk insurance programs. The larger fund was the Mutual Mortgage Insurance (MMI) Fund, which funds the single-family residential mortgage insurance originated by FHA. The official amount of outstanding mortgage insurance in force in the MMI Fund as of fiscal 2018 was approximately $1.1 trillion, with the fiscal 2018 budget requesting authority to issue $400 billion in new mortgage insurance.

The MMI Fund is required by law to be financially self-sustaining; that is, mortgage premiums have to cover losses on defaults and the cost of operations. One of my immediate challenges in 1989 was to determine what our finances actually were. The accountants for the FHA reported to a different Assistant Secretary, and I was not allowed to speak with them. After several months of politicking, I was able to get them moved over to my operation, only to discover that the MMI Fund was losing $11 million a day. It took several more months to determine where the losses were occurring. We were generating a profit in eight of ten federal regions and losing the profits (and more) in the two regions—Regions VI and VIII—defined by S&L and Iran-Contra fraud. Region VI included both Texas and Arkansas.

The management of the single-family operations at FHA is traditionally run by the Deputy Assistant Secretary of Housing-Single Family (DAS-Single Family), who reports to the Assistant Secretary of Housing-Federal Housing Commissioner, who reports to the Secretary of HUD. The HUD Secretary and the Assistant Secretary of Housing-Federal Housing Commissioner are both Presidential appointees. They are nominated by the President and approved by Senate confirmation after an extensive FBI background check.

The Deputy Assistant Secretary of Housing is traditionally recommended for appointment to the Secretary by the Assistant Secretary of Housing, reviewed and approved by the White House, and then appointed by the Secretary after a background check.

When I arrived at HUD in April 1989, before I was confirmed as Assistant Secretary of Housing, one of my first jobs was to review and recommend the people for my four main deputy positions, including the DAS-Single Family. One of the resumes that our transition team forwarded to me was for Ronnie Rosenfeld, who I recommended to HUD Secretary Jack Kemp for appointment as the DAS for Single Family.

Shortly thereafter, I received a call from the executive director of the National Association of Home Builders (NAHB). The message said it was urgent. Could he and the president of NAHB meet with me as soon as possible? Soon enough, I found myself in my small temporary office (I had not yet been sworn in) with the executive director and the president of NAHB.

The NAHB president was quite upset. It seemed, she said, that I had made a terrible error. I had recommended Ronnie Rosenfeld for nomination as DAS for Single Family when in fact that appointment, she said, was hers to make. The DAS for Single Family essentially reported to her. She did not seem to be aware that the growing HUD scandals that were part of the S&L crisis and Iran-Contra signaled a new day. In the meantime, I was beginning to understand why we were not in compliance with our existing financial management laws.

I explained that the new Administration was planning on running things by the book and that the DAS for Single Family was going to be appointed by the Secretary with approval of the White House. I was only going to recommend to the Secretary candidates qualified to do an excellent job based on merit. She needed to understand that the line management of a $320 billion-plus government insurance program would report to government officials—not to the president of the NAHB.

The president stood up, pointed her highly lacquered finger in my face and, using the F-word liberally, explained, “I will have you fired.” I looked her in the eye and said, “You know you probably can, but it will take you a while. In the meantime, I am going to get this operation on a sound financial footing.” I then picked up the phone, called security, and requested that a security guard physically evict her from the building. Inspired by my call, the executive director quickly hustled the spitting and yelling president out of my office and down the hall to the elevators.

Before Ronnie arrived on the job, I moved out from the Single Family office the fellow who was processing land development deals with the company said to be owned by the NAHB president and, with the assistance of now Deputy Assistant Secretary of Housing Ronnie Rosenfeld, shut down the program. I was fired approximately eighteen months later, in part for my refusal to implement illegal orders, but by that time I had the FHA on a sound financial footing. However, that solid financial footing was not to last. If anything, it turned out that I righted the ship so that a new and larger round of stealing with the 1990s housing bubble could begin.

One of my greatest frustrations when leading the FHA was in trying to get reliable data regarding our mortgage insurance programs—particularly breakdowns contiguous to local communities and political jurisdictions. I would consistently find communities where government policies were not coordinated by place—even though the opportunities to do so and to save money were compelling. Accurate data by county or by Congressional district were essentially impossible to get, and more than a few private contractors and accounting firms would turn apoplectic if you tried to get such data. I discovered that “place-based financial data” were the federal government equivalent to cigarettes in a prison. How anyone was supposed to responsibly operate a mortgage insurance portfolio of hundreds of billions of credit risk without reliable property, mortgage, or local economy data was beyond me. Perhaps that was why my position had been held by eight people in the prior eight years. By the time they realized what they needed to do their job, they were gone.

After taking administrative and internal steps to move the FHA Funds and operations to a sound financial footing, I and my team drafted a reform proposal and persuaded the HUD Secretary and the Office of Management and Budget (OMB) to support a Chief Financial Officer for the agency, a Comptroller for FHA mortgage insurance operations, audited financial statements, and reporting of credit and liability programs on an accrual basis. This included proposals that appropriations would be required to originate mortgage insurance and other credit expected to generate losses—the equivalent of a loan loss reserve.

During this time, I received advice and support from the General Accounting Office (now the Government Accountability Office), including the Comptroller General Chuck Bowsher. Chuck was well respected in Congress and within the Administration. He was instrumental in Congress’s passage of the Single Audit Act of 1984, requiring annual audits for state and local governments. My coordination with OMB, on the other hand, involved working with William Diefenderfer, who I described in my article, “William M. Diefenderfer: The financial hit man of student loans” (https://home.solari.com/william-m-diefenderfer-the-financial-hit-man-of-student-loans/). As I explained in that article, having Diefenderfer later serve on my company’s Board of Directors “was one of the worst personnel decisions I have ever made.”

My reforms for the mortgage insurance operations were adopted through the HUD Reform Act of 1989. OMB and Congress then introduced them government-wide with the Chief Financial Officers (CFO) Act of 1990 and the Federal Credit Reform Act of 1990.

The CFO Act was signed into law on November 15, 1990. The CFO Act required annual, audited financial statements for the United States Government and its federal reporting entities. In order to apply the statutes of the CFO Act, Brady as Secretary of the Treasury, Dick Darman as head of OMB, and Chuck as the GAO Comptroller General established the Federal Accounting Standards Advisory Board (FASAB) to develop the “applicable accounting principles” for the newly required financial statements.

No one could have guessed at the time of its creation that the FASAB would be used three decades later to destroy federal financial reporting and Constitutional government through an obscure accounting policy called FASAB Statement 56.

Throughout the process of implementing these reforms, my relationship with Secretary Kemp deteriorated steadily. Kemp was challenged by the operational complexity of HUD and the desire to say he was running HUD according to the law, on the one hand, while, on the other hand, managing the political necessity of keeping the money flowing out the back door. This engendered multiple personality disorder management of the first order—with Kemp giving me an order to do something and then ordering one of my deputies in confidence to make sure I failed. He demanded that people be fired or framed arbitrarily, which I would not do—and he would insist that I take responsibility for whatever their supposed foible was. I received complaints that my skirts were too short and that my house was bigger than his house—he would not come over if invited as he would “find it castrating.” My greatest offense, however, did not come directly from me. The word got around Washington that if you wanted anything accomplished in the operations at HUD, you had to see Fitts, not Kemp. There was a great deal of truth to that statement. Kemp’s refusal to learn the operations or respect the laws and regulations that bound the bureaucracy, and his attempts to override the complexity with temper tantrums and bullying had inspired a backlash of passive-aggressive behavior. One particularly long temper tantrum was laced with the comment, “The law? The law? I don’t have to obey the law. I report to a higher moral authority!” Whatever “get-out-of-jail-free card” Kemp had, the people who worked for him did not share it.

This period provided me with tremendous insight on the media. I was dealing at the heart of the cash and credit flows involving hundreds of billions of dollars of government resources that were driving trillions in the capital markets. What was happening in the financial flows was entirely divorced from what was being described in the national and global media. The numbers did not lie, but the nightly news did. More important were the material omissions of what was not discussed. At one point, a top investigative reporter from the New York Times contacted HUD, requesting permission to write a policy piece about the work I was doing. She had heard about it from members of the OMB team. After some resistance from the Secretary’s office, she proceeded with the piece. She then proceeded to run into resistance for weeks from her editor who kept asking her to run down false rumors about me and my operation. Finally, she submitted the story, only to receive a call from the print shop in New York. The editor was changing the article under her byline without telling her—adding in things that were not true. She reported this to the New York leadership. The result was that she resigned from the New York Times and never worked as a reporter again. I found out later that the source of the false stories—the person who had lobbied the Washington editor for weeks—was Roger Stone, then a partner at Black, Manafort & Stone, a lobbying firm rumored to be the ultimate in “swamp critters.” I assume he was acting on behalf of Kemp and his staff.

When the Bush Administration went to war with Iraq, it was time for me to go. I left convinced that for communities to work, taxpayers, small businesses, and entrepreneurs would need to build private data, systems, and economics. Get the federal government out—and keep them out. New technology meant entrepreneurs and markets could help create higher learning metabolisms and productivity in communities. We could end poverty without spending government resources—indeed, we could lower taxes.

I did not yet understand that pouring government subsidies and loans into places was often about central control and private profits, not about sound investment. As long as you could print money, let the party and the waste roll on.

Related Resources:


C-SPAN – HUD Reform Press Conference
HUD Reform Press Conference


The “Kemp tapes” – In the late 1990s, Catherine’s attorneys asked her to record her recollections of working in the Bush Administration. She recorded a series of cassettes that, over time, passed around the Internet.


“Loss of $4 billion is found in audit of mortgage fraud” by Jeff Gerth, The New York Times, Sept. 28, 1989

“It’s hard out here for a pimp: Kemp, Cuomo & Pedophilia in Bush I”

“Austin Fitts better be good with hammer and nails,” Business Week, Nov. 27, 1989

“My experience with FHA-HUD: Background information for understanding tapeworm economics” – In 2003, I was challenged to document my statement that HUD was “not working.” In fact, it was the official story of how it was supposed to work that was a lie—it was working as it was supposed to work, with billions flowing out the back door. The proof was to be seen in the fact that numerous legitimate reform efforts had been systematically stopped. When the material was reviewed in detail with a business leader who had been instrumental in the smear attack on me and Hamilton, I was told that he realized how he had been used and had to excuse himself to go to the men’s room—he was that upset.

“The U.S. statutes creating modern constitutional financial management and reporting requirements and the government’s failure to follow them” https://constitution.solari.com/the-u-s-statutes-creating-modern-constitutional-financial-management-and-reporting-requirements-and-the-governments-failure-to-follow-them/

Related Reading:

HUD Reform Act of 1989 (see, in particular, Subtitles B and C on Management and FHA Reform)

Wikipedia: “Savings and loan crisis”

Wikipedia: “Iran-Contra affair”


IV. Building Hamilton Securities
August 1990–November 1995

“F**k you!”
~ Mike Eisensohn of Harvard Management to Catherine Austin Fitts after learning of her competitive bidding design for the first $750 million HUD auction, which included defaulted mortgages on properties managed by NHP, Harvard’s HUD management company

“As long as I can get government subsidies, what do I care if people have education or jobs?”
~ Dick Ravitch, Chairman, AFL-CIO Housing Trust and later Lt. Governor of New York

Working in the Bush Administration had made two things clear about the reforms underway to reengineer the financial system. My first observation was that the securities markets were going to grow, including the securitization of the mortgage and real estate industry. This was confirmed after I left HUD, when Richard Breeden, Chairman of the Securities and Exchange Commission, asked me to join his Emerging Markets Task Force. After approaching countries throughout Eastern Europe and Asia about starting stock markets, his staff had discovered that their priority was also to start liquid mortgage markets. The second thing that was abundantly clear to me was that the Internet and digital communications would have a dramatic impact on all aspects of the global and domestic economies.

I was approached by National Housing Partnership (NHP), a large multifamily property manager owned by the Harvard Endowment and an investment company run by one of Harvard’s board members, “Pug” Winokur. The CEO of NHP asked me to start an investment banking company to handle a major portion of NHP’s investment banking transactions. My research indicated that—thanks to advances in digital software and database technology—the cost of starting an independent investment banking operation had dropped dramatically.

I finalized a written contract with NHP and its CEO, proceeding with a verbal commitment and shaking of hands. To my surprise, Harvard’s representative then interceded and tried to renegotiate and then abrogated the contract. When I insisted that NHP honor its contract for one transaction underway, I ended up poisoned, barely able to walk for months until enough water and sleep put me back on my feet—no doctor being able to figure out what in the world was wrong. I proceeded without the NHP contract, instead winning a competitive bid for my new company, Hamilton Securities Group, to serve as lead financial advisor to the FHA/HUD.

Growing up in Philadelphia, I occasionally interacted with the Italian mafia and their children. Throughout my career, I have also interacted with the Harvard Endowment and its representatives. When it comes to mobsters and fraudsters, I prefer the Italian mafia to Harvard. In my experience, the Italian mafia puts on fewer airs and has more respect for families.

After starting Hamilton Securities, I was asked by Secretary Brady to join the Federal Reserve as a governor. When I declined, John Sununu, then chief of staff to President Bush, arranged for the President to appoint me to the board of directors of the Student Loan Marketing Association (Sallie Mae). While on that board, the Chairman invited me to join the Council on Foreign Relations but wanted me to ask Nick Brady to sponsor me. I declined to do so.

One of Hamilton’s earliest assignments was the recapitalization of Battery Park City Authority in New York City—a success story of which I became particularly proud. Harry Albright, former chairman of the Dime Savings Bank, was the Chairman of Battery Park City Authority. I developed tremendous respect for Harry, who then invited me to join the board of the First American Bank after District Attorney Morgenthau appointed him to clean up the situation following the failure of the Bank of Credit and Commerce International (BCCI). First American and the Department of Justice (DOJ) were in litigation over the assets in the financial carcass. The first thing Harry did was have First American’s Washington litigation counsel send out thousands of pages of legal documents in a Brinks truck to my home in McLean, Virginia.

I will never forget the long weekend I spent reading those legal documents. I had rented a modern home in Virginia that stood on a butte overlooking the Potomac River. The living room was all glass, and the local hawks and one eagle regularly entertained me with flybys in front of the windows. Being a speed reader, I consumed legal documents for three days straight in my sunny solitude. When it was over, my paradigm had shifted.

I understood that the banking shenanigans at First American and BCCI could only have happened with the help and approval of the U.S. government, including enforcement, intelligence, and central banking agencies—and no doubt the G7 central banks as well. The financial fraud flowing out of the Iran-Contra years was a top-down phenomenon. Given the harm done, it was particularly egregious for the DOJ to claim the carcass for their asset forfeiture fund at the cost of the First American depositors. Helping Harry protect the depositors was certainly worth doing.

When I left the board several years later, I had dinner with Harry in New York. He talked about the extent to which the United States economy had become dependent on arms sales and financial engineering. Harry was too discreet to say “financial fraud”; however, after dealing with DOJ on the BCCI/First American scandal, we both know what he meant when he said “financial engineering.” He was deeply worried about where America was heading. My own worries included the rumors that the asset forfeiture fund at DOJ was financing secret, highly classified intelligence operations.

As financial advisor to FHA/HUD, Hamilton Securities designed and led $10 billion of mortgage auctions for FHA. By improving the recovery rates on defaulted mortgages from 35% to an above-industry-average of 70% to 90%, loan sales were able to generate $2.2 billion of savings for the FHA Funds. According to reviews by the GAO, the results were favorable for the real estate and local communities. However, the improvements for FHA Fund performance were not popular with the people who had been profiting from low recovery rates, such as NHP and the Harvard Endowment. Government and community failure is very profitable for those invested in it—a bigger group than you might think. I describe these issues in greater detail in the “Hamilton Securities Group” chapter of Dillon Read & Co., Inc. & the Aristocracy of Stock Profits (https://dillonreadandco.com/hamilton-securities-group/).

The beneficiaries of failure included servicers on the defaulted portfolios such as John Ervin & Co. Without HUD’s large portfolios of defaulted mortgages, Ervin would have no business. Another beneficiary included the HUD Inspector General’s (IG’s) office. Distressed mortgages held by HUD meant the IG’s office could make money doing enforcement actions and applying civil money penalties. When FHA staff explained to the HUD IG that the money they were making was less than the FHA Fund was losing by not selling, the IG explained that they did not care about the FHA Funds or the taxpayers—they cared only about what they could make. In other words, the agency’s own auditor was financially vested in keeping more money flowing out the back door to developers who were not paying their debt service. This was, in part, thanks to the Congressional appropriators who were willing to increase government budgets as a result of their rising penalties, fines, asset forfeitures, and seizures—and the settlements that could be negotiated on threat of these actions and indictments.

The DOJ and the enforcement arm of government agencies were now—thanks to the U.S. Congress—Sheriff of Nottingham style moneymakers. “Just-us” racketeering was open for business, supported by plans to build private prisons and rendition centers globally. “Play ball or else” was the implicit threat.

Unfortunately, Hamilton’s goals of decentralized wealth creation conflicted with the numerous efforts underway to centralize control of capital and wealth, reflected in the push for globalization, the rejection of place-based development, the expansion of the private prison model, and the subversion of pension funds.

Globalization: The Clinton administration was committed to globalization, implementing NAFTA and the next round of GATT, which led to the creation of the World Trade Organization (WTO) at the end of 1994. While Hamilton’s work on place-based economic development focused on helping the American people succeed in the face of globalization, the administration rejected our proposals and instead encouraged significant increases in consumer, mortgage, student loan, and government debt. When Sir James Goldsmith came to America to try to prevent the adoption of these globalist policies, he provided a brilliant description of the inhuman policies underway.

Sir James Goldsmith’s 1994 globalization warning:

Rejection of Place-Based Development: Hamilton proceeded to build software tools that would allow the general population to map out government financial flows in their neighborhood and Congressional district. We also continually found opportunities to save the federal government money by reengineering financial flows locally. Our due diligence showed that HUD could use the FHA’s foreclosed inventory to create three to five homes for the price of one new construction public housing unit. However, we were met with the complaint, “But how would we generate fees for our friends?”

Private Prison Expansion: Hamilton invested in a company to build local training and data servicing companies in low-income communities. Unfortunately, this threatened narcotics trafficking operations, related asset seizures, penalities and fines, as well as gentrification. As one Deputy Assistant Secretary of Housing in the Clinton administration explained to us, “Black people are hopeless. We are moving them out, and moving the Hispanics in.” One member of the HUD IG communicated that his colleague rejected our ideas as “computers for ni**ers.” HUD teamed up with the DOJ to start dropping SWAT teams into African-American neighborhoods as stock market investors started to speculate on private prison stocks. Ultimately, the DOJ’s for-profit subsidiary (created to market federal prison labor to federal agencies) created a dedicated data servicing division. The people who could have been doing data servicing in their community and generating taxes were instead in a private prison. The staggering cost to taxpayers was estimated in 1996 by the GAO to be approximately $154,000 per prisoner. (To learn more about the costs to taxpayers and profits to private prison investors, see the case study of Cornell Corrections in Dillon Read & Co., Inc. & the Aristocracy of Stock Profits.)

Pension Fund Subversion: One of Hamilton’s subsidiaries worked with a group of pension fund leaders on the feasibility and advisability of environmental, social, and governance (ESG) investing. We concluded that our economic problems were caused by federal investment having a negative return on investment. The solution was not for pension funds to change but rather for government to reengineer its investments to a positive return in a way that would make the pension funds money. Unfortunately, the pension funds were used instead to engineer a “financial coup d’état”—starting with a housing bubble. Over the next decade, Americans built and bought larger homes that they could not afford, financed with their own retirement savings.

By the end of this period, FHA had made enormous progress in cleaning out its portfolio of distressed mortgages, inspiring Barron’s Washington editor to publish an article titled, “At last, HUD does something right.” The traditional HUD constituents, however, were not happy with fiscal and financial responsibility at FHA. A lot less money was flowing out the back door.

Related Resources:

Solari Report:

Hamilton Securities with Jon Rappoport

Navigate the Housing Bubble, Parts I and II


The “Kemp tapes” – In the late 1990s, Catherine’s attorneys asked her to record her recollections of working in the Bush Administration. She recorded a series of cassettes that, over time, passed around the Internet.


“Sub-prime mortgage woes are no accident”

“About Hamilton Securities”

“Edgewood Technology Services (Part One)”
“Edgewood Technology Services (Part Two)”
“Edgewood Technology Services (Part Three)”

“My experience with FHA-HUD: background information for understanding tapeworm economics”


Dillon Read & Co., Inc. & the Aristocracy of Stock Profits, by Catherine Austin Fitts, March 2006: A comprehensive business-school-quality case study of the Washington-Wall Street relationship depicting the Hamilton litigation and surrounding events in the larger context of the central banking-warfare model and political economy operating in the U.S. today.


V. The War on Hamilton
November 1995–September 2001

“Everybody has a plan until they get punched in the face.”
~ Mike Tyson

I never intended to spend 30 years of my life trying to prevent U.S. federal financial fraud or, when I needed help to prevent it or the harm it was causing, warning my fellow citizens and investors about it. I never expected to spend countless hours, year after year for three decades, reading complex, purposefully obtuse federal financial audits. I never expected to deal with physical harassment, poisonings, house break-ins, trolls, disinformation shills, limited modified hangout experts, hackers, and the endless, mind-numbing parade of swamp critters that protect the monies rolling out of the back doors of the U.S. government. Those were never on my list of life goals. I did it because the federal finances are at the heart of the matter—a door that every American citizen has to walk through if we are going to be able to survive, let alone be healthy and free.

What destroyed my family and my neighborhood, as well as millions of other families and neighborhoods? I came to understand that it all led back to the nature of the governance system and its ability to operate above the law—with all of us financing the machinery of lawlessness. This was a core issue at the heart of what was needed to bring real solutions—whether to heal the environment, end war without ceasing, heal the divide-and-conquer culture wars, fund our pension and retirement obligations, provide decent educations at reasonable cost, move from a debt to equity model and sound money, or address our health care issues. I had come to realize that all roads lead back to this one overriding financial mechanism.

When I started Hamilton, I wanted to build an investment bank that would create real wealth—that would take new technology and apply it in practical ways that would help individuals, families, businesses, and communities be more productive. Indeed, our prototyping at Hamilton indicated that the wealth potential was explosive. That is how we end poverty—by creating wealth.

Those hopes ended with the failure of the Clinton administration and Congress to reach a budget deal and with the U.S. federal government shutdown at the end of 1995. As the president of CalPERS, the largest pension fund in the country, explained to me in the spring of 1997, “They have given up on the country. They are moving all the money out starting in the fall.”

The financial coup d’état had begun. Among many other things, that meant bubbling the housing market in a manner that would generate significant funds and doing so with a significant round of new mortgage fraud. This was a coordinated effort by the leading member banks of the New York Federal Reserve and the federal agencies involved in housing and finance, including Treasury, the DOJ, and HUD.

Hamilton and the honest government officials we worked for at HUD represented one set of obstacles getting in the way of attempts to significantly increase mortgage fraud. Another was Gary Webb’s Dark Alliance story, which brought transparency to drug trafficking during the Iran-Contra period. Hamilton’s software tools and databases showed suspicious patterns of mortgage defaults in communities such as South Central Los Angeles, which threatened to expose even more about these fraudulent operations.

For example, following HUD’s initial attempts to produce audited financial statements as required by the CFO Act, I had a mortgage banker show up in my office at Hamilton insisting that the FHA’s outstanding mortgage insurance in force was many multiples of what was shown on the newly issued FHA/HUD balance sheet.

In short, financial transparency of federal financial flows in local communities threatened many constituencies—from narcotics operations to mortgage fraud to traditional political patronage. Failure generated many “fees for our friends,” as long as more government debt was available to finance it. Transparency about the extent of the global mortgage fraud could halt liquidity in the U.S. mortgage and fixed income markets. As the derivatives markets grew, the danger of such a liquidity event grew.

To clear the honest government officials and Hamilton out of HUD, the loan sale program was targeted by a series of fabricated investigations and qui tam (whistleblower) and related civil lawsuits. Hamilton Securities ultimately managed 18 audits and investigations, 12 tracks of civil litigation, endless smear campaigns, and targeting and harassment of employees and vendors. The multitude of covert tactics and dirty tricks my team and I encountered was mind-boggling—it was quite an education. The intentions and allegations were phony—although it took eleven years and many millions of dollars to prove it. Ultimately, my investment in building a website to document what was happening was a major factor in our success. No indictments were ever forthcoming and no penalties ever assessed. The process in such cases is designed to reverse the notion that the accused should have an opportunity to address their accuser before irreparable harm is done. Instead, the goal was to engage in irreparable harm so that the accuser would never have to back up their phony allegations and would have plenty of time for a fishing expedition, which was bound—or so the thinking went—to find something, anything.

To try and head off an extended litigation process, I made a significant investment of time working with reporters from the Washington Post. The reporters, who had been lobbied extensively by John Ervin (the government’s so-called “whistleblower”), did a significant amount of investigation. One reporter told me their conclusion that Hamilton’s “guilt” was for making money for the taxpayers. However, the HUD IG apparently had insisted that we were guilty of criminal acts. When I asked the reporters why they would not run with that story, one said, “In an office that leaks like a sieve, why will they not produce any evidence?”

I later became convinced that private corporations managing the PROMIS software system at DOJ had falsified documentation to help start the investigation. Such documentation would be classified—one explanation for why the HUD IG might not leak it. It would also explain why one phase of the investigation collapsed after we produced records from Hamilton Securities and my bank under subpoena discovery. There was no trail to any bogus offshore accounts.

The Washington Post reporters did indeed write a story. I was told it was quite favorable to us. However, it was pulled the night before it was supposed to run—and the reporters stopped speaking with us. I was later snubbed by Post publisher Katherine Graham at a party at her house. It was immediately thereafter that DOJ and HUD felt free to seize our offices on a false pretext. While inside Hamilton’s offices, the HUD IG General Counsel tried to engineer another false frame. The story of how it failed is one of the many miracles that occurred during that time.

After my New York Times experience in the Bush administration and this experience with the Washington Post, I turned my back on corporate media. From then on, my plan was to communicate directly with people. As for the corporate media, “Fool me once, shame on you. Fool me twice, shame on me.” When it came to money being stolen from the federal government, I was confident that the corporate media worked for the team doing the stealing. Indeed, Warren Buffet was on the Washington Post board and continued to enjoy mysteriously above-market returns as the housing bubble and financial fraud grew.

After our offices and copies of all of our software and databases were seized, including our place-based disclosure tool called Community Wizard, a contact called to tell me that all of Hamilton’s materials had been reviewed for integration into the design for a new search engine that would be launched by the CIA; it would be named Google. I just marked it as covert gossip, although I noticed that when Google emerged and eventually went public, they were using a similiar A/B share stock model that Hamilton had used, which had—I believed—literally saved my life. Even more noteworthy was what happened with Facebook. When my CFO at Hamilton had wanted to invest in a human resources software system, I had insisted instead that employees learn HTML and proceed to create and maintain their own files on the in-house intranet. When Facebook later launched, I realized that it solved the intelligence agencies’ data servicing problems; our research had showed that federal data servicing needs were skyrocketing—Facebook solved their problem by getting as many global citizens as possible willingly to update and maintain their own files.

When the Hamilton offices were seized, I sold my family farmland to my uncle Robin Willits to pay an attorney to help me. Our insurance company was refusing to honor their contracts at the time. The result was that Robin received a threatening phone call. A team of HUD IG and FBI enforcement people showed up at his New Hampshire home at night with a subpoena. In the middle of these events, he insisted he would support me and persuaded my family not to “drop me.” His courage and integrity made the difference then and for years to come as he refused to allow me to be wrongly isolated. Robin taught me many things – one was the extraordinary difference that one righteous man can make to maintain the divide between a lawful society and lawlessness.

As money gushed out of the federal government, it gushed into the buyout and private equity firms and into the stock market. It was the global investment equivalent of “supermarket sweepstakes” where the contestants have five minutes to fill up their shopping baskets. When I still had hopes of continuing business activities, I headed to a conference for the technology and related venture industry in Arizona organized for subscribers of Esther Dyson’s newsletter. I found venture capitalists throwing enormous amounts of early stage financing at companies that had no chance of succeeding. They were insisting that companies raise many multiples of what they needed to finance their operations. Only when the Internet bubble burst several years later did I understand what was happening. The venture capitalist invests $1MM. The company is then plumped up for an IPO. They sell the stock to the pension funds and retail investors for $100MM. Then the company goes bust—but the early investors walk away with $99MM. For all I know, they increase their winnings by shorting the stock when it goes down. It is called a “pump and dump.”

There were days it felt like the entire leadership of the U.S. financial system had gone mad. Everyone was interested in nominal—and, with rare exception, no one was interested in real.

I was offered an opportunity to settle my litigation in 1998—after several efforts to falsely frame us had failed—but under conditions that would let the bogus allegations hang in the marketplace. I decided instead to fight and force the government and its so-called “whistleblower” John Ervin into court, requiring them to put forward a shred of evidence to back up their smears. Hamilton sued the government to collect outstanding bills and finally sued Ervin for tortious interference. It’s a shaggy dog story that is much easier to understand now that the world has watched the FBI and the Department of Justice try to falsely frame the President of the United States with a salacious dossier cooked up by a former British intelligence agent with funding from the Clinton campaign. It used to be hard to believe that the Department of Justice would simply make stuff up—now, it’s common knowledge.

The decision to fight necessitated selling my home and moving out of Washington. The physical harassment was interfering with my personal life and health. I felt I would be better off living on an unpredictable schedule in multiple places—thus dramatically increasing the cost of surveillance and harassment. My hope was that it would require the DOJ, HUD, or whatever agency was funding the surveillance or harassment to request a contract reauthorization—something I believed would be difficult to get, given the failure of the phony frames. I sold my house and began a multiple-year process of liquidating my art, antiques, furniture, and library. eBay had just started, and I was able to provide work for former employees who started an eBay business liquidating Hamilton and my possessions. My company Solari, launched in March 1998, leased three SUVs, and we rotated them between my remaining employees and me while I proceeded to begin a decade-long process of driving hundreds of thousands of miles around America trying to understand what was happening in the real economy. I wanted to meet and get to know others who were trying to understand how to bring real solutions, and see what we could do about it. It also afforded me the opportunity to meet and spend time with the elder generation in my family. Before they passed away, I downloaded an extraordinary amount of family history. Between the wise elders in my family and the intelligence gathered from doing “pro formas” on how the money works in thousands of communities in all fifty states, I emerged with a much deeper understanding of the real economy.

In 1999, I was finally interviewed by one of the HUD and DOJ investigation teams (several had cycled off when they could not find anything wrong). It became clear that the people leading the investigation had no understanding of the relevant programs and facts. I spent most of the interview teaching them and then helping them formulate their questions so they made sense. The Assistant U.S. Attorney (AUSA) afterwards apologized to my attorneys and said that he would recommend that the process come to an end. However, when I called an attorney I was working with, who was an expert on black budget litigation, he explained that the DOJ would demote the AUSA and assign a new “hit man.”

Sure enough, the sympathetic AUSA was demoted, and a new AUSA, Rudy Contreras, was assigned. Meanwhile, however, I had been inspired by Gary Webb’s use of the Internet to make all of his underlying legal documents accessible, and we had decided to launch a website. By publishing chronologies, dockets, legal documents, and summaries, our team could simplify and explain a highly complex legal and financial situation, thus making it manageable for a variety of parties. After almost five months of round-the-clock work scanning documents and writing legal summaries, we launched the Solari website on the litigation. Shortly thereafter, the qui tam was unsealed, and the Judge who had maintained the qui tam under seal for many years without any evidence of wrongdoing resigned suddenly from the bench. Judge Stanley Sporkin was the former general counsel of the CIA, when the CIA and DOD entered into a Memorandum of Understanding regarding narcotics trafficking by CIA assets. I was so appalled at some of his later escapades that we published a hot seat dedicated just to Judge Sporkin.

In the process of trying to get to the bottom of things, Hamilton’s general counsel Carolyn Betts discovered that billions were going missing from HUD. It started with the HUD IG testimony in March 22, 2000, indicating that there were $59 billion in undocumentable adjustments from HUD during fiscal year 1999, with many more billions missing from the open balance (meaning fiscal 1998). Despite this testimony, no effort would ever be made to determine what had happened or to get any missing money back, and no audit would be completed (https://www.whereisthemoney.org/59billion.htm).

This money at HUD had gone missing during the period when the world was distracted by Monica Lewinsky and stories of sex in the oval office. However, it was clear to my team that honest people were being forced out by criminal means so that billions in assets could be shifted out of the government—and in a manner that would communicate to the wider Washington bureaucracy that it would be dangerous to stand in the way of the federal financial fraud tsunami. We set to work with a series of reporters and researchers to help investigate and warn investors and citizens that the government coffers at both HUD and DOD were being emptied and that the housing bubble was threatening the financial health of millions of investors and citizens around the world. We called it a “financial coup d’état.” One of the best-known efforts was Kelly Patricia O’Meara’s outstanding “Missing Money” series for Insight magazine that was published from 2000-2004. You can find that series at our Missing Money website at https://missingmoney.solari.com.

In 2000, I met with the Chief of Staff to the Chairman of the Senate Subcommittee that oversees HUD appropriations. The mortgage bubble was in full bubble mode. The staff member asked me what I thought was going on at HUD. I deferred my response and asked them the same question in return. The staff member looked me dead in the eye and said, “HUD is being run as a criminal enterprise.” HUD’s matrix structure means that the majority of its operations are run by large defense contractors, New York Fed member banks, the U.S. Treasury, and the Department of Justice—and those parties indeed were intentionally running HUD as a criminal enterprise.

Paul Rodriguez, editor of Insight, published “Thankless Task” in May, 2001 about the targeting of Hamilton Securities Group. His first article went up on the Internet on Friday afternoon. By Tuesday, the HUD Inspector General was “retired.” Several weeks later, Rodriguez’s associate, investigative reporter Kelly Patricia O’Meara, sent a series of questions to the HUD Inspector General’s office about their latest fiscal 2000 financial audits (which I had just extensively reviewed), which declined to publish the amount of undocumentable adjustments. Two hours later, the HUD Inspector General’s office faxed a message to Hamilton’s attorneys informing them that the investigation of Hamilton was closed. Rodriguez’s second Insight article, in July 2001, described the successful outcome: “HUD Gives Up With Fitts.” However, HUD Secretary Andrew Cuomo cut a deal with Ervin to make sure he would have funds sufficient to continue to litigate against Hamilton by himself. It was, after all, still a business—making sure the money could flow freely out HUD’s back door.

One of my challenges was that globalization was by then well underway—and the climate of frenetic greed again made it feel like we were living in a “supermarket sweepstakes,” with everyone trying to fill up their shopping basket with foreign and privatized assets. America was also enjoying the housing bubble. There was widespread support for the bubble and criminal cash flows to continue.

I and my team kept counting more money going missing from federal coffers. In the fall of 2001, I was working with Kelly Patricia O’Meara on a cover story in Insight about what was, by then, $3.3 trillion missing from DOD and HUD. The story was scheduled to publish on Friday, September 14th and would be delivered to every Congressional office. On Monday, September 10th, Donald Rumsfeld held a press conference at the Department of Defense, confessing that DOD was missing $2.3 trillion. Kelly and I assumed he was trying to get ahead of her blockbuster story. That night I said to Kelly, “nothing can stop this story from going mainstream now.”

Those were “famous last words.” I learned on September 11, 2001 never to say “never,” especially when it came to trillions missing from the U.S. government.

Related Resources:

Solari Report:

Coming Clean with Eunice Boston

The CIA, NSA & Google with Nafeez Ahmed

Hamilton Securities with Jon Rappoport

Navigate the Housing Bubble, Parts I and II


“Buffet’s big bet on US federal mortgage credit & housing”

“HUD ethnic cleansing and the Dark Alliance allegations”

“The Fed did indeed cause the housing bubble” [letter to the editor, Wall Street Journal]

Missing Money series by Kelly Patricia O’Meara, Insight, 2000-2004

Missing Money archive (including Kelly Patricia O’Meara’s Missing Money series)

“Narco-dollars for beginners: how the money works in the illicit drug trade” by Catherine Austin Fitts, Narco News, Oct. 24, 2001

“Hamilton Securities litigation”

Hamilton Securities litigation – Summary of Events as of February 2001 (including documentation of HUD IG General Counsel falsification of documents in Hamilton’s offices)

Stanley Sporkin hotseat

“Robin Launches a New Era: Meditations on My Uncle Robin at His Memorial Service at the Dover Quaker Meeting House


Dillon Read & Co., Inc. & the Aristocracy of Stock Profits, by Catherine Austin Fitts, March 2006: A comprehensive business-school-quality case study of the Washington-Wall Street relationship depicting the Hamilton litigation and surrounding events in the larger context of the central banking-warfare model and political economy operating in the U.S. today.

Related lawsuits:

Qui tam filed against Harvard regarding Russian privatization


VI. The War on Everyone
September 11, 2001–January 2006

Rush hour cometh!
~ Reverend Melvin Bufford, opening of Sunday sermon, September 16, 2001

Cui bono?
~ Title of Catherine’s first article on 9/11, published on September 17, 2001

As the propagandists love to say, on September 11, 2001, “the world changed.” Suddenly, money could pour out of both the front and back doors of the U.S. government into the military-industrial complex with abandon. America was going to war, and money was no object. DOD won an immediate $48 billion increase in appropriations. Suddenly, no one cared that there was $3.3 trillion missing from DOD and HUD. The spigot was open for fresh new cash. A recent estimate by Neta C. Crawford published by the Watson Institute at Brown University calculates that America has spent $5.9 trillion to date on the War on Terror, including war in the Middle East.

Costs of war: United States budgetary costs of the post-9/11 wars through FY2019: $5.9 trillion spent and obligated

The Corbett Report did an excellent video to help illuminate the “financial coup d’état” aspects of 9/11. A great deal happened that day to make sure the trail on the money missing from DOD and HUD went cold, including bombing the offices of the largest mortgage and government securities dealers in the country, SEC and FBI offices in New York with ongoing investigations of Wall Street firms involved in the mortgage and securities fraud, as well as Office of Naval Intelligence (ONI) offices at the Pentagon that were investigating the missing money.

9/11 trillions: Follow the money

Working with a firm in London, I published a series of articles about the financial coup d’état underway. This was also part of presentations I made to members of the investment community and global citizens in Europe and Asia during this period. Many years later, in 2009, I told the story of my first presentation in London after 9/11.

Financial Coup d’Etat
By Catherine Austin Fitts

In the fall of 2001 I attended a private investment conference in London to give a paper, The Myth of the Rule of Law or How the Money Works: The Destruction of Hamilton Securities Group.

The presentation documented my experience with a Washington-Wall Street partnership that had:

  • Engineered a fraudulent housing and debt bubble;
  • Illegally shifted vast amounts of capital out of the U.S.;
  • Used “privatization” as a form of piracy—a pretext to move government assets to private investors at below-market prices and then shift private liabilities back to government at no cost to the private liability holder.

Other presenters at the conference included distinguished reporters covering privatization in Eastern Europe and Russia. As the portraits of British ancestors stared down upon us, we listened to story after story of global privatization throughout the 1990s in the Americas, Europe, and Asia.

Slowly, as the pieces fit together, we shared a horrifying epiphany: the banks, corporations, and investors acting in each global region were the exact same players. They were a relatively small group that reappeared again and again in Russia, Eastern Europe, and Asia accompanied by the same well-known accounting firms and law firms.

Clearly, there was a global financial coup d’état underway.

The magnitude of what was happening was overwhelming. In the 1990s, millions of people in Russia had woken up to find their bank accounts and pension funds simply gone—eradicated by a falling currency or stolen by mobsters who laundered money back into big New York Fed member banks for reinvestment to fuel the debt bubble.

Reports of politicians, government officials, academics, and intelligence agencies facilitating the racketeering and theft were compelling. One lawyer in Russia, living without electricity and growing food to prevent starvation, was quoted as saying, “We are being de-modernized.”

Several years earlier, I listened to three peasant women describe the War on Drugs in their respective countries: Colombia, Peru, and Bolivia. I asked them, “After they sweep you into camps, who gets your land and at what price?” My question opened a magic door. They poured out how the real economics worked on the War on Drugs, including the stealing of land and government contracts to build housing for the people who are displaced.

At one point, suspicious of my understanding of how this game worked, one of the women said, “You say you have never been to our countries, yet you understand exactly how the money works. How is this so?” I replied that I had served as Assistant Secretary of Housing at the U.S. Department of Housing and Urban Development (HUD) in the United States where I oversaw billions of government investment in U.S. communities. Apparently, it worked the same way in their countries as it worked in mine.

I later found out that the government contractor leading the War on Drugs strategy for U.S. aid to Peru, Colombia, and Bolivia was the same contractor in charge of knowledge management for HUD enforcement. This Washington-Wall Street game was a global game. The peasant women of Latin America were up against the same financial pirates and business model as the people in South Central Los Angeles, West Philadelphia, Baltimore, and the South Bronx.

Later, courageous reporting by several independent investigative reporters confirmed in detail that the privatization and economic warfare model I discussed in London had deep roots in Latin America. This included Greg Palast’s coverage of IMF and World Bank policies in 2002. https://library.solari.com/greg-palast-secrets-from-imf-and-world-bank-in-latin-america/

We were experiencing a global “heist”: capital was being sucked out of country after country. The presentation I gave in London revealed a piece of the puzzle that was difficult for the audience to fathom. This was not simply happening in the emerging markets. It was happening in America, too.

I described a meeting that had occurred in April 1997, more than four years before that day in London. I had given a presentation to a distinguished group of U.S. pension fund leaders on the extraordinary opportunity to reengineer the U.S. federal budget. I presented our estimate that the prior year’s federal investment in the Philadelphia, Pennsylvania area had a negative return on investment.

We presented that it was possible to finance places with private equity and reengineer the government investment to a positive return and, as a result, generate significant capital gains. Hence, it was possible to use U.S. pension funds to significantly increase retirees’ retirement security by successfully investing in American communities, small business, and farms—all in a manner that would reduce debt, improve skills, and create jobs.

The response from the pension fund investors to this analysis was quite positive until the President of the CalPERS pension fund—the largest in the country—said, “You don’t understand. It’s too late. They have given up on the country. They are moving all the money out in the fall [of 1997]. They are moving it to Asia.”

Sure enough, that fall, significant amounts of money started leaving the U.S., including illegally. Over $4 trillion went missing from the U.S. government. No one seemed to notice. Misled into thinking we were in a boom economy by a fraudulent debt bubble engineered with force and intention from the highest levels of the financial system, Americans were engaging in an orgy of consumption that was liquidating the real financial equity we needed urgently to reposition ourselves for the times ahead.

The mood that afternoon in London was quite sober. The question hung in the air, unspoken: once the bubble was over, was the time coming when we, too, would be “de-modernized”?

In 2009—more than seven years later—this is a question that many of us are asking ourselves.

The explosion in size and scope of the budget for the national security state led me to focus more attention on the black budget and to follow reports of extensive underground bases and a secret space program. In part, this was inspired by an effort of the U.S. Navy and an affiliated think tank in 1997-1999 to try to persuade me that “aliens exist and live among us.”

See 2015 Secret Space Program Panel (story from 1:48-1:56)

The general theory involved is a theme that runs through many justifications for government secrecy. The idea is that the U.S. and other global militaries are dealing with unusual and dangerous phenomena. Consequently, the proponents of this premise call for secrecy, making it essential to centralize control over all aspects of the government and economy, with no expense spared and no questions asked. However, they never offer any explanation for why this has to come with trillions of dollars of waste and destructive corruption by insiders. Allowed to grow for decades, secrecy misused accumulates significant legal liabilities while generating huge and hideous profits. This is why I often say that secrecy has become a financial addiction.

It is a very similar dynamic to the one being used currently for climate change. “There is a terrible threat. Be afraid, be very afraid. Turn over more money to us, and we can fix it. Don’t ask questions—you don’t want to know. This is an emergency—just give us your money.”

I attended a speech in my community given by a Tennessee Republican Congressman running for Governor during the 2002 campaign. He was on the budget and defense appropriations committee. He admitted that he knew that there was $3.3 trillion missing from HUD, but stated there was nothing he could do about it. That led me to organize a local group to support me in sending detailed information to his office about what he could do—along with launching a letter-writing campaign to all Tennessee media outlets. The story about the missing money started to get traction because a group of veterans in the Knoxville area who were supporting themselves, they said, by finding and returning soda pop bottles, realized the story’s import and started to blanket their email lists. Suddenly, numerous Republicans announced for the Democrat, and the story got nixed.

“Saving Tennessee: Tennessee’s Get Our Money Back Campaign 2002” (including letter to Congressman Van Hilleary and related cartoons)

Meanwhile, I continued to work on civil litigation on behalf of Hamilton, all the while tracking the money that kept going missing from HUD and DOD and the continued mortgage fraud and mortgage bubble. My research into Enron—which I suspected of laundering money going missing from HUD and DOD—drew attention when Enron went under.

Kelly Patricia O’Meara’s powerful series on the Missing Money came to an end in 2004 after she left Insight. However, her efforts had proved the extent to which DOD and HUD would protect the private corporations and banks running their accounting, payment, and banking systems.

After Kelly left Insight, I had the opportunity to work with Congresswoman Cynthia McKinney and her staff to help prepare questions for DOD Secretary Rumsfeld about the missing money. McKinney’s courage was significant and was rewarded by her being pushed out of government. Trillions in missing money can fund a great deal of political and covert operations.

“Cynthia McKinney grills Rumsfeld on Pentagon’s missing trillions”

Throughout these years, much of my writing on the missing money and related topics was published by Scoop Media in New Zealand. Scoop’s publisher, Alastair Thompson, understood the implications and risks to global citizens of the explosive growth in a secret U.S. national security state. He made a major contribution in providing coverage, given that a platform was lacking in the United States. Not surprisingly, during this period I received a call from a former CIA officer warning me, “The CIA does not like your friends at Scoop.”

To keep up with all the missing money, we put up a website with the help of some entrepreneurs in California to help people fathom how much money this was—it had a counter to show how much money went missing every second for $1.1 trillion to go missing in a year. You can still see the counter running at Where Is the Money?.

With the war in the Middle East, a new phase of money going missing opened up as the U.S. military continued to globalize through the War on Terror. Investigative journalism duo Donald Barlett and James Steele, famous for their reporting on the demise of the U.S. middle class and local economies, brought considerable gravitas to the stories of missing money in Iraq—but the money just kept on disappearing.

As the reports of missing money kept coming, we created a special site at Solari.com just to publish the stories. This has now become https://missingmoney.solari.com. We try to make it easy for investors and citizens who are challenged to understand that this problem has been growing for 30 years without them being aware of it—and that it explains a surprising number of events during their lifetime.

After Hamilton finally won its case in the court of claims as well as the vast majority of allegations in the qui tam while pursuing Ervin, the federal government threw in the towel and requested a global settlement at the end of 2005. I was pretty sure that meant the deep state was ready to pull the plug on the mortgage bubble at long last. Keeping it going as long as they had was a remarkable feat of financial engineering. The financial coup was a huge success. Trillions more continued to disappear while the offshore havens grew ever more replete with assets. The need to make an example out of honest players like me and Hamilton Securities was over.

I was right that Wall Street and Washington were about to pull the plug on the mortgage bubble—but I underestimated how much more could be stolen in the bailouts ahead. Now that trillions in fraudulent securities had been issued globally to help finance the financial coup d’état, it was time to pull the plug and make top investors whole by sticking the bill to the taxpayers—essentially rolling them over through Treasury and the Federal Reserve into the Treasury market.

Related Resources:

Solari Report:

The Many Faces of Secrecy with Amy Benjamin


C-SPAN — Gold Standard

C-SPAN — 9-11 Victims Family Hearings

America: Freedom to Fascism (documentary by Aaron Russo) – Catherine describes $3.3 trillion missing from DOD and HUD

Audios and Interviews:

“America’s black budget and the manipulation of mortgage & financial markets,” Catherine Austin Fitts, May 2004

“Enron: The anatomy of a cover-up,” Catherine Austin Fitts, March 2002

“The real deal about Enron, Parts 1–7”


“The myth of the rule of law or how the money works: The destruction of Hamilton Securities Group” by Catherine Austin Fitts – Published by Sanders Research Associates in London in the fall of 2001, this article was one of my efforts to warn the global financial community about collateral fraud in the U.S. mortgage market.

“Where is the collateral?” by Chris Sanders of Sanders Research Associates in London, Scoop Media, Oct. 2003 – This article connects the dots through the litigation, the missing money, questionable HUD deals, the impact on investors, with Sanders’ sequel titled: “So, where is the collateral?”.

“The negative return economy: a discourse on America’s black budget” by Chris Sanders and Catherine Austin Fitts, August 2004

“William M. Diefenderfer: The financial hit man of student loans”

“Saving Tennessee: Tennessee’s Get Our Money Back Campaign 2002” (including letter to Congressman Van Hilleary)

“An open letter to Condoleezza Rice”

“Billions over Baghdad” by Donald L. Barlett and James B. Steele, Vanity Fair, September 2007


Where Is the Money?

The Missing Money


Top Secret America

Trading Truth: A Report on Harvard’s Enron Entanglements, a HarvardWatch report, Jan. 31, 2002


VII. The Financial Crisis
January 2006–November 2009

“I really didn’t believe the figure [of total commitments made during the financial crisis] until I saw the backup documents that had been provided by each of the agencies themselves. This total commitment was almost double the entire economic output of the United States. If there were ever a single number that demonstrated the panic felt by the regulators during the financial crisis, it was that $23.7 trillion.”
~ Neil Barofsky, Special Inspector General to the TARP Program, U.S. Department of Treasury

Hamilton Securities settled outstanding civil litigation with the Department of Justice and HUD in January 2006. With the settlement completed and the monies owed Hamilton returned, less attorney fees, I began the process of cleaning up the mess created by my descent from wealth to poverty as a litigant and social outcast with high regulatory and corporate litigation expenses and no income. The first step was to pay Hamilton’s taxes. I called our CPA and told them I wanted to pay the taxes immediately—I did not want to wait for the tax due dates. I would be paying out significant amounts to those who had helped me survive—lending either time or money—and I wanted to make sure I took care of any taxes first. My CPA called me back and said, “You are not going to believe this, but your files have disappeared.”

Missing money, missing tax files—I lived in a world where things just kept going missing. During the settlement negotiations, my attorneys had informed me that the Department of Justice had repeatedly underscored that the settlement did not constitute a waiver of their right to pursue Hamilton on issues related to taxes. I found the fact that Hamilton’s Northern Virginia CPA reported our files missing to be a remarkable coincidence.

Thus began a long, slow, and extremely time-consuming and expensive process of finding and reassembling our financial and tax records. These events constitute another long shaggy dog story. The end result was that Hamilton finished the process of tax compliance in 2010. Hamilton’s total tax liabilities were $0, but our accounting, CPA, and legal bills to file our federal, state, and local tax returns were approximately $150,000. Complexity is expensive—purposefully so.

In January 2006, the Bush administration had two more years to run. I was doing more and more Internet and radio shows to explain what was happening in America—with regular attention to the missing money and its relationship to mortgage fraud and the black budget. One of the things I encouraged people to do was to bank local, an effort I had started in 2004 with a campaign called, “Where would Jesus bank?” One of my slogans at the time was, “Who’s your banker, who’s your farmer, where’s your money?” I hoped that it would focus my audience on the importance of financing reliable farmers and bankers and decentralizing the sources of their food and financial transactions.

I also made several unsuccessful attempts at creating tools to help Americans map out their local financial ecosystems. However, the online hacking problems were significant. Moreover, the resistance to developing local financial literacy was surprisingly strong in our audience. Between 2004–2006, I took what was left of Hamilton’s legacy software and databases after I got them back from court control (the most valuable pieces were mysteriously missing) to a number of institutions in the hopes that they would make them public. No one wanted to touch them—too dangerous.

In April, 2006, I published Dillon Read & Co. Inc. & the Aristocracy of Stock Profits. I wrote it for several reasons. First, it had become clear to me by 2005 that much of the financial fraud and corruption was being engineered through the Federal Reserve and the federal government—but most Americans did not understand the economic model. I felt that it could help to provide a case study that showed how government funding was being used to promote expensive and unproductive public-private partnerships that generated big profits on Wall Street and kickbacks in the form of campaign contributions. Second, I had come to believe my promotion of small business in low-income communities had created a competition with the investors benefiting from private prisons and gentrification, and again, I wanted to explain the model. Finally, I needed to help people understand why I had been targeted. The whole, long noisy affair had left a question mark in the marketplace: Why was it so important to make an example out of Catherine Austin Fitts and Hamilton Securities? To understand what had happened, you needed to understand the financial coup d’état underway.

The response to the book was quite gratifying. However, every time I tried to publish it in hard copy, the headwinds would begin. I interpreted the third and final threat as one that threatened a family member. I decided not to publish it in book form but to keep it online. Feelings were still too raw. Among other things, I had to make a choice between my pathway and my family. If I was going to continue on this path, I had to do it alone and put more space between myself and my family. Bringing transparency to the financial coup underway was not their choice. They certainly did not choose to have their lives threatened.

In the process of doing more Internet and radio shows, I received repeated requests to provide investment advisory services. In 2007, I started Solari Investment Advisory Services, LLC. For the next ten years, I provided individual investment advisory services and then converted the business to providing ESG (environmental, social, and governance) investment screens to other investment advisors.

My first job helping individuals and families was helping people navigate the financial crisis. Wall Street had started to quietly bet against the subprime mortgage market in 2006, with the market collapsing in 2007. Events blossomed into the financial crisis in 2008. The leadership who runs the U.S. Treasury and Federal Reserve brought it up—and then they brought it down.

One of the radio shows I was doing regularly was a spot called “Community Business” on Flashpoints/KPFA radio in the San Francisco Bay Area that ran between 5:00 and 6:00 pm on weekdays—prime time for commuters on their way home. The host was Dennis Bernstein, who had extensive experience with mortgage fraud and the Iran-Contra scandal. Dennis and I had done a long series on Enron, and it was his reporting with Congresswoman McKinney and myself that brought repeated attention to the missing money and the very serious financial problems at HUD and DOD. The undocumentable adjustments kept piling up (see https://missingmoney.solari.com/dod-and-hud-missing-money-supporting-documentation/), but no one seemed to care or understand the practical implications. Dennis did understand, and I deeply appreciated his interest.

Occasionally, a member of the independent media would publish a tally, and numbers began floating around the Internet that the undocumentable adjustments were up to $8.5 trillion. However, the real number was hard to ascertain because HUD refused to publish its undocumentable adjustments.

As the subprime mortgage markets—and then the mortgage markets—were melting down by the summer of 2008, Hank Paulson, former Chairman of Goldman Sachs and at the time Secretary of the Treasury, was arranging one package after another to transfer vast amounts of taxpayer resources to private banks in exchange for massive amounts of questionable if not fraudulent securities. In the summer of 2008, I was suddenly attacked by spurious allegations and thrown off of KPFA radio in what was clearly a pretext. It’s another shaggy dog story. Right after I was thrown off the radio, guess what happened next?

The Bohemian Grove met for its annual gathering north of San Francisco—and then the U.S. government announced that Freddie Mac and Fannie Mae, the mortgage government-sponsored enterprises (GSEs), would be nationalized. Among many other global investors, the Russian interests were protected, as we will see momentarily.

Shortly thereafter, one of the top San Francisco money managers published a comment on their webpage. They had invested approximately $1 billion in Fannie Mae stock that April—several months before. They said they had done extensive due diligence, yet they had no idea there was a problem. Apparently, statements over the previous five years by the former Assistant Secretary of Housing—several times a month on San Francisco Bay Area radio—that there was a serious, system-threatening problem had taken place in a parallel universe. Every trucker I met or spoke to in America knew the mortgage market was on thin ice, but we were in a world where we the “deplorables” lived in reality, while the East and West Coasts were swimming in a parallel universe of Federal Reserve and U.S. Treasury money in which nothing could go wrong.

The potential Freddie and Fannie collapses would have had major international implications because both their stock and bonds were held globally. In 2005, an advisor to Putin had tried to recruit me when I was in Canada, arguing that I would forever be an outcast in America and that the Russian Orthodox team leading Russia was more aligned with my values and vision of a human future. He was most persuasive. I explained, however, that no one likes a traitor; as despised and dishonored as I might be in America, for me, there was no “away.” I was an American, and it was my job to help my team get better.

When I returned home, I kept having a nagging feeling that I was missing something. I got online, and after much research, I realized that Russia was the second largest foreign holder of Freddie Mac securities. Russia and its institutions held major positions in U.S. mortgage securities. It felt to me like someone was making a last-ditch effort to get out of paying Hamilton the money the U.S. government owed me. Shortly thereafter, the Department of Justice approached my attorneys to negotiate the settlement that closed in January, 2006.

In the scheme of the trillons going missing, the $2.2 million plus interest accounts payable that the U.S. owed Hamilton Securities might seem like tiny dollars. Indeed, it was significantly less than the cost of the litigation. However, DOJ fought for every penny—as if every penny awarded us was proof that Hamilton’s transactions were as accomplished and significant as they were, and as if I was right about the money that had been and now was disappearing out of HUD’s back door—which I was.

There is no doubt that if the litigation had not been settled before the mortgage market bubble was finally crashed, starting with Goldman’s big short in the third quarter of 2006, the liability of DOJ and HUD (and whomever was engineering from behind the scenes) would have been significantly increased. Mine, too—if the poisoning in 2004 had threatened my life, I can only imagine what could have happened if I had still been in negotiations with the litigation open in 2007-2009. Of course, if I was in Moscow working with the Russians, I would have had no credibility—no need to settle with a traitor in that case. It is one of an increasing number of situations where the U.S. establishment and media play “the Russian card” to their advantage. Who needs facts? Just play the Russian card.

When it comes to missing money, it’s a global world in which things are never what they seem. But for as long as I have lived, the more money that goes missing, the more money is available to lobby, legislate, enforce, and fund more secrecy.

Related Resources:

Solari Report:

“Enforce the U.S. Constitution” | Dr. Cynthia McKinney
Just a Taste:
Full Report:


See Congressman Alan Grayson Interviews – Missing Money Video


“$29,000,000,000,000: A detailed look at the Fed’s bailout of the financial system,” Levy Economics Institute, December 2011

“Censored” (letter to KPFA)

“The Housing and Economic Recovery Act of 2008” by Catherine Austin Fitts, August 2008 – This article describes U.S. mortgage fraud within the context of the global political economy.

“Freddie and Fannie become penny stocks”

“Where would Jesus bank?”

“How to find a good local bank”


VIII. Launching The Solari Report
November 2008–November 2012

“A financial coup d’état? I could agree with that…. Because the people here really aren’t in charge. Wall Street is in charge.”
~ Congresswoman Marcy Kaptur when asked if the bailouts constituted a financial coup d’état

I launched The Solari Report in December of 2008 from a chair in a hospital room in Philadelphia, where I was caring for a friend, Georgie LaRue, who was recovering from surgery. It was an unusual evening. I was quite worried that Georgie might not make it—but she did. The prayers from Solari readers lifted our spirits, as did the new subscriptions streaming in on my laptop. It was another reminder that no matter how dark things seem, moving forward is the best direction.

The mood in the financial markets was ominous. Bernie Madoff was arrested a week later. You could feel the liquidity shortages pulling the plug on a growing number of operations. Because of my understanding of the federal finances and the securities markets, I knew the world was in serious trouble. I had most of my clients out of major stock market positions. Money had continued to disappear, financed in part by significant mortgage securities fraud. If the mortgage securities fraud was as bad as it was, I believed it was more than likely that U.S. Treasuries were being issued off balance sheet as well.

Years before, a researcher had sent me documents of a private placement of U.S. Treasuries allegedly issued off-books to mobster Meyer Lansky when he was running the deep state’s money laundering operations. The bonds were signed by a former Dillon Read partner and Wilmer Cutler associate who had served as the Assistant Secretary of Domestic Finance at Treasury. He was famous at Dillon Read for being slick with the truth. It was said he had been thrown out of prep school for lying. He seemed to have some hook into our Chairman Nick Brady—I never knew what it was. He now ran a large publicly traded accounting firm. The researcher who contacted me wanted to know: Were the documents authentic? I could not confirm them—but I would have bet money that they were.

It was clear that the American people would never have supported President Bush in sticking the bill for trillions in securities fraud and related derivatives to the taxpayer. However, when I got a load of the Obamas and the level of entrainment and mind control used to get Obama elected President of the United States, I knew that this was a profiled character and couple that could do what the Bushes could not. They could get the young people on board for harvesting what remained of their parents’ and grandparents’ financial security and wealth—and their inheritance. Imagine a politician who could lead progressives to transfer the equivalent of America’s retirement savings as a combination of gifts and loans to the banks and private investors. It was a remarkable political feat, which speaks volumes regarding the success of the media and telecommunications industries in doing targeted surveillance, entrainment, and mind control.

How many control files created with pornography, financial fraud, and other forms of entrapment did it take to make this level of financial fraud go?

Despite the financial horror and the next round of the financial coup d’état, there was relief in facing an Obama presidency. For many decades previously, I had spent presidential elections listening to why I should support the Bushes or the Clintons or another person associated with the assassination of someone in my family or the destruction of Hamilton Securities. In my piece, “Meditations at the Crossroads,” published in 2004 (when I had reason to express my irritation with the latest round of cheap, lawless tricks related to the litigation), I reflected on some of the conclusions that I had finally reached about my mother’s death.

Meditations at the Crossroads

Yet, friends and colleagues would still argue that I should support the “responsible” syndicates. Politics in America always left me baffled. Why the refusal to shun? Why the willingness to treat my loved ones as expendable? Why the willingness to excuse killers who win by killing? Why the willingness to allow the equivalent of America’s entire retirement savings to be given away? When 9-11 occurred, America’s pension funds were fully funded. Now they are 70% funded and falling.

No matter how dreadful he was, Obama saved us from four or eight more years of the Clintons. Yes, he doubled down on the financial coup d’état and the stealing of the remaining wealth of the United States, but he did so with a gracious, stylish manner! The Clinton and Bush death lists slowed down.

The bailouts ended up completely trumping the missing money—totaling over $24 trillion—and Obama won the Nobel Peace Prize. I assume that award expressed the gratitude of the European banks, who knew that the initial refusal of Congress to bail out the phony mortgage paper would have stuck them with the losses. Obama played an essential role in turning that initial vote, building popular support for continuing bailouts and the launching of successive rounds of quantitative easing by the Federal Reserve.

Having launched The Solari Report, I now had a catbird seat to monitor events, publish my commentary, and try to help my clients and subscribers navigate through uncertain times. Throughout this period, I observed a direct competition as to which company would be the number-one user on our website that day—it would always be either the Federal Reserve, Fannie Mae, or Goldman Sachs. The only exception was when a firm went under, and then that firm (such as Bear Stearns or Lehman Brothers) would, for a short time, take first place as the largest user. A pattern emerged where I was asked to comment on the latest news by Internet shows, only to see my various phrases pop up almost immediately in the financial press.

In the meantime, I regularly heard from members of the Internet audience that I was not a credible source. Based on my webstats, I figured most of them were well-paid Cointelpro. After all, I was writing a surprising number of establishment scripts—they just were not paying me for it.

Related Resources:

Solari Report:

JP Madoff with Helen Chaitman


Missing money video collection – See Congressman Alan Grayson (~4:30)

Congresswoman Marcy Kaptur: “It’s a financial coup d’état”

Infowars: The Looting of America – An interview of Catherine Austin Fitts with Aaron Dykes


“Bailout mo’ money”

Book review: Bailout by Neil Barofsky

“Where did the people go?”

“Where is the money? Let’s get it back!”

“Missing you, Georgie…”

The Financial Coup in Comic Relief:


IX. Planet Equity; Planet Debt
November 2012–November 2016

“In a recent online survey asking for votes on the top story of 2014, I voted for the Alibaba IPO…. English teacher Jack Ma started Alibaba in the mid-1990s in his living room in China. Twenty years later he launched the largest IPO in the history of the world for a company that has a market valuation which is larger than the GDP of many countries. Alibaba’s story speaks to the growth of Asia, of the online market exploding in size with smartphones and mobile payment systems, and of the access and liquidity these developments offer millions of small businesses and consumers. In the process, despite running what is one of the largest companies in the world, Jack Ma spoke to a global media audience and to the largest, most influential investors in the world about the importance of serving the dreams and aspirations of the little guy.” Catherine Austin Fitts, Planet Equity, 2014 Annual Wrap Up

When trade stops, war starts.” ~ Jack Ma

Having gutted our way through the fiscal crisis without a plausible explanation of what had happened, let alone why no one had been held accountable, many citizens and investors realized that something was more than amiss. It was challenging for many of us to get our minds around a full-blown financial coup d’état—despite the fact that there were financial signals everywhere. The Middle East wars and the War on Terror were on their way to spending a total of $5.9 trillion by 2019, not including the money that was going missing in Iraq and Afghanistan. At the same time, the funding ratios on American pension funds—near fully funded in 2001—were dropping at alarming rates.

New symptoms of the financial coup d’état appeared regularly. When you spend your life being disbelieved by almost everyone around you, related to something that seems fairly obvious to you, you appreciate those charming anomalies that bring hope that others may get to thinking.

First, even though the mortgage bubble had burst, mortgage servicing fraud kept going strong. At one point it was so bad that one popular financial blogger wrote a post, “If this is true, kaboom!” His post started with, “Catherine Austin Fitts has been saying this for a long time….” He then proceeded to describe the extraordinary levels of mortgage servicing fraud and the possibility that the collateral fraud was as significant as I had been saying. His post was quite insightful and funny. I linked to it and sent him an invitation to join me on The Solari Report. He took the post down and never replied to my invitation.

Shortly thereafter, I drove over to Franklin Sanders’ office at The Moneychanger to record the next precious metals market report for The Solari Report. I remarked to him how surprising it was that it had taken this blogger over ten years to figure out that the collateral fraud was as bad as I said. After all, when the bailouts of a mortgage bubble require an amount greater than 300% of the outstanding single-family residential mortgages in the United States, you know there is a collateral fraud problem.

To my amazement, Franklin confessed that he had not believed me either. I was shocked that he had not asked me to unpack the issues with him as we worked together for many years. I would have thought the process of helping him understand why I knew what I knew would be helpful to both of our analyses.

I started to talk it through with him and realized that Franklin could not fathom the extent of the financial coup—in part because he did not understand the impact of covert surveillance and operations in our day-to-day life and how the control systems work. He had not worked in Washington or on Wall Street and did not have a background on how this much worthless mortgage and fixed income paper could be kept afloat. Good men struggled to see and understand what had become a parallel universe—some people were calling it a “breakaway civilization.”

It reminded me of the time Franklin could not understand his neighbors’ reluctance to object to government policies at a local meeting. Franklin lives in a very rural part of Tennessee, so I got him online and showed him the agricultural subsidy database (see EWG Farm Subsidy Database at https://farm.ewg.org) and other online systems (the best of which have been taken private, except for the Comprehensive Annual Financial Reports at https://en.wikipedia.org/wiki/Comprehensive_annual_financial_report.) They documented the extent to which his neighbors and his county were all receiving significant subsidy from the U.S. government. He was stunned. I know I had explained this many times, but he needed to see the hard data on his county and specific neighbors active in farming. I am not picking on Franklin—to this day, it is at most one in a thousand who will take a few hours and dig into the publicly available information of how the money works around them in their town, county, and state, or spend time dealing with local budgets.

It was one of those times when I was reminded that there would be very few people in the wilderness who could or would help me. I would simply need to keep sticking to the truth as best I could see or estimate it and understand that good people could not fathom the invisible invasion that digital technology and AI made possible and that was underway. The hardest thing to do is look in the mirror and say, “I’m the patsy.” I had to do it to stay alive. I could see why others not under life-and-death pressure would avoid doing so.

A second indication that the financial coup d’état had succeeded was that fear porn messaging escalated to distract people from paying attention and those who became hooked on it continually were disappointed when the collapse never came. Fear porn is media that encourages people to fear the future with a goal of inspiring behavior that reduces the viewer’s power, assets, and ability to succeed. The establishment prefers for its citizens to buy bonds and stocks that finance establishment companies and government agencies. However, if a citizen is anti-establishment, an effort is made to channel them into behavior and investments that will weaken them, preferably in a manner that makes money for operations set up or encouraged for that purpose. The thinking is to find profitable ways of liquidating those who do not support you.

Fear porn operations had cost many people a great deal of time and money, yet these operations still held sway. Fear porn promised accountability—the bad guys were going to “get theirs.” Everything was going to fall apart in a giant global collapse and then those big bad banks and corrupt politicians would be in real trouble. My pointing out that the bad guys not only had just successfully made off with trillions in missing money and bailouts but were more powerful than ever did not make people feel very good.

By 2012, I was convinced that we were in for growth in long-term equity markets. It was clear that part of the financial coup included moving money from the G7 countries for global investment. What better way to proceed than by creating U.S. dollars with Treasury bonds or mortgage securities and using them to buy up and securitize all the equity around the world? To attract investors, prices were likely to rise.

As part of the bailouts, global debt had exploded. The developed world was highly leveraged coming into the bailouts, and now the emerging nations had joined the highly leveraged club. The way to manage this increase in debt was to grow the equity. Since fiat currency could keep printing more monetary and fiscal stimulus, a lot of equity could be securitized and generate essentially an infinite rate of return to the insiders.

Ultimately, we were looking at the equivalent of a debt-for-equity swap. The leadership had three choices. They could write off the debt, write up the equity, or go to war—or some combination of all three. My bet was that writing up the equity as much as possible was a no-brainer—and a great way to channel excess monetary stimulus to keep inflation low. This meant creating and securitizing equity throughout the emerging markets and securitizing a much greater volume of global real estate.

Proposing strong equity markets made me persona non grata to the anti-establishment crowd, the fear porn believers, and the gold bugs. Nor did it endear me to the establishment folks who were clearly committed to secrecy. I suspect that my success in the litigation had resulted in some sore losers—I was clearly “out” for good. I continued to have run-ins with various forms of expensive and draining covert harassment. The financial and emotional drain of these events were offset by the courage and leadership of the Solari team that continuously “turtled forth” in the face of mysteriously failing computers, mail, printers, courier services, and electrical systems, as well as endless website and social media cybersecurity challenges and more—the list is endless.

My favorite example during this period was when we published the 2015 Annual Wrap Up – Space, Here We Go!. Because the printer’s printer had mysteriously broken down, occasioning a major delay, I asked our graphic designer to FedEx me the first 50 copies off the press from Los Angeles to Hickory Valley. The box never got to Hickory Valley. Nineteen days later, it showed up in Los Angeles, returned with only 16 copies in it—34 copies were gone. The graphic designer called me saying, “You don’t understand. This can’t happen.” I told him not to worry—this Solari Report was so good that the military-industrial establishment had insisted on hard copies. He should take it as a compliment and proof that our position was accurate—investment in space was scheduled to grow. When we shipped the rest of the Wrap Ups by a different courier, they refused to deliver them, insisting they could not “due to snow.” We drove to the local office—no snow in sight—and insisted they give them to us since the tracking showed they had them in their warehouse. When they refused, we threatened to call the sheriff—and they relented. As Allard Lowenstein once said, “People who have nothing to hide do not lie, cheat, and smear to hide it.”

If the people who controlled the courier services understood the importance of our investment in space, so could the independent financial media. For several years, I made a concerted effort to get the independent financial community to understand the black budget and related investment in space and integrate it into their analysis. If they had done so before 2012, they would have understood that gold prices were not going to skyrocket and that the establishment—replete with $50 trillion of fresh resources—was in strong shape. This commitment to raising awareness about the black budget led to my speech at the Secret Space Program (SSP) conference in 2014.

Shortly after the conference, I experienced a sting operation in California that was particularly sordid, arranged by someone who I met at SSP 2014 who I had mistakenly thought was a credible researcher. I shut down what I was doing in California and gave up hope of coexisting with the corporate media and the U.S. intelligence agencies. It appeared that Hollywood and Silicon Valley’s dependence on the low-cost capital of organized crime and black budget technology was too great. No doubt the plan was good for the insiders, as tech stocks continued to fly.

I also had to separate The Solari Report from Foster and Kimberly Gamble of Thrive. They tried to persuade me in the summer of 2014 that the U.S. dollar was about to collapse. I believed that they had been sold a bill of goods based on so-called “inside information” and that the narrative they were promoting could do significant financial harm to anyone who listened, which could include my subscribers. Such narratives, along with similar fear porn, were being promoted significantly that summer. I was convinced the U.S. dollar was about to rise strongly—which it did. I ended up having quite a heated dialogue with Greg Hunter on USAWatchdog, resulting in a $1 bet. I have that dollar framed with his nice card in my office.

Those who had been harmed in the financial crisis wanted the dollar to go down, gold to go up, and stocks to drop. They wanted the establishment to fail. However, the financial coup had succeeded, and the Chinese were years away from building out significant global liquidity for their currency, bonds, and payment systems. They had only one aircraft carrier and did not yet have a global GIS satellite system. The long-term threats to the dollar were significant—but for now, the dollar was “dangerous but dominant.” The U.S. establishment’s strength was a reality that needed to be faced if we were to navigate the road ahead. While I insisted the economy would slow burn forward, many in the independent financial media declined to integrate the black budget into their analyses and kept promoting the notion that the economy and financial markets were on the brink of collapse.

As the equity markets rose in size and price, colleagues and clients pressured me to provide an ESG (environment, social, governance) screen. After a review of the ESG industry, which I published in the 3rd Quarter 2016 Wrap Up, I grew convinced that the industry was screening without an adequate understanding of organized crime, the covert economy, and their intersection with government and the global financial markets. The result was that Solari Investment Advisory Services, LLC developed investment screens, which we continued after shutting down our individual advisory business in 2018.

With my commitment to spend time in California behind me, I continued to spend time in the heartland of the United States and began spending more time in Europe and Asia. My investment screens and The Solari Report would benefit from more on-the-ground intelligence globally. The way I can best understand what is happening in an economy is by moving around inside of it. Whenever I am criticized for spending too much time outside of the United States, I try to explain that the dividing line in this stuggle is between human and inhuman. I am, first and foremost, for humanity. For humans to achieve and maintain a human civilization on our planet, this will involve all of us.

For much of this period, there was nothing more to say about money that was going missing. HUD continued to refuse to publish its undocumentable adjustments. Occasionally, someone would nail DOD for failing—yet again—to produce an audit. However, what else could you say? There were trillions missing. Most people did not consider the story relevant to their lives.

And then the financials for fiscal 2015 were published. DOD had undocumentable adjustments of $6.5 trillion—by a multiple of three times, their biggest annual adjustments yet. HUD, silent since fiscal 1999, ‘fessed up to $278.5 billion of undocumentable adjustments for fiscal 2015. What was particularly shocking was that Lockheed Martin, lead supplier of payment and information systems to DOD, spun its IT division out to Leidos after fiscal 2015 ended and before the financial statements were published. This inspired me to publish a comment on The Solari Report on August 15th, “Lockheed Cuts and Runs.” I then started to speak and comment regularly on what was now $12-plus trillion missing from HUD and DOD and tried to get the issue injected into the campaign discussions. Congressional races are an ideal time for Americans to press their representatives on this topic.

I was in the Netherlands the night of the 2016 presidential election. I initially was appalled at the idea of Donald Trump being considered a serious candidate for the Republican nomination. As Don Coxe so wisely put it, the Presidency of the United States is not an entry-level position. However, Trump worked hard on his campaign and seemed to listen and learn. The choice came down to Hillary Clinton and Trump. When Trump threatened to have Clinton jailed during one of the debates, I decided I would vote for Trump and donate to his campaign. The person who persuaded me of the soundness of this decision was Michael Moore, who stated in his presentation before the election that Trump’s election would be the biggest “F**k You” in recorded history. I realized that if a system has a negative return on investment, and everything that has been tried to fix it has failed, you might as well break it. If Trump could not recruit a team that could fix it, he might break it. Whatever happened, it would be better than Hillary Clinton. If a society continues to support the organized crime that is destroying it, there is no hope. No matter how slim, Trump offered some hope.

Immediately after the election, I stopped in Dublin on the way back from Europe to the United States. As I had breakfast in my hotel, I read a wide selection of newspapers from around the world. The outpouring of shock regarding the election underscored that there was very little understanding of why Trump had won and of the deeper economic and policy issues at work.

I took a deep breath and decided I would explain the “real deal” on the election. I wrote The Productivity Backlash. I strongly recommend it to you if you do not yet understand what is happening in the heartland of America—in the flyover country ignored by the richly subsidized coastlines of America. If and when the U.S. dollar market share starts to decline significantly, it may help you to understand what it means if the subsidy gets pulled.

I headed home grateful that the steady growth of the Clinton death list had been halted. The chances that I and my colleagues would be added to it, at least, were diminished. But years of wasteful culture wars and fake news lay ahead, laid down like flak in the war for more central control.

Related Resources:

Solari Report:

Planet Debt: 1st Quarter 2015 Wrap Up

Planet Equity: 2014 Annual Wrap Up

Unpacking Divide and Conquer with Junious Ricardo Stanton

Homan Square: Is Someone Prototyping Domestic Rendition? With Junious Ricardo Stanton and Congresswoman Cynthia McKinney

Unpacking Baltimore with Junious Ricardo Stanton


“Open letter to my Congressman” (on place-based financial transparency)

“Coming clean: Beyond the fiscal cliff”

“Lockheed cuts and runs”

“Crazy man versus criminal: Cut and run, Monica Lewinsky II, & real trouble ahead”

“The productivity backlash”


Secret Space Program 2014 – Catherine on the Black Budget and Dr. Joseph Farrell on the Hidden System of Finance


X. Fortress America
November 16, 2016–May 2017

“The two candidates that we have just had offered to us in this election, both of them made comments and one of them had a profession that dictated this…that they were going to continue to play by that playbook. Now one wonders what one of them is going to do because he [Trump] is bouncing all over the place. Is he going to rewrite the playbook? Is he going to play by the playbook? Is he going to throw it out the door? What’s going to happen? That uncertainty certainly unnerved the markets initially, they recovered today. And they will continue to recover as long as he remains somewhat conciliatory and doesn’t look like he is going to throw the playbook out. Just imagine if he suddenly decided that he would and it might be beneficial to the country that he did. Then you see what I am talking about now because the markets will go all over the place again. Because the markets are part of this state. The markets are part of waging war. They are part of the warfare state. Our entire financial system now is geared to this warfare state. It has an umbilical cord extending from it. That’s how it survives. That’s how it makes a lot of its profits…directly or indirectly. Not for nothing was HSBC found out for laundering drugs. You know where a lot of those drugs were coming from? …Afghanistan. This is a vicious many-headed animal that we have allowed to grow up–as Eisenhower predicted–and if we are not careful it is going to eat all of our lunches before it is through with us.” ~ Colonel Lawrence Wilkerson, during the 2016 election

Returning to the United States after the election, I dove into the publication of the 2016 Annual Wrap Up – Global Harvest and What It Means to Investors. I was and am convinced that the politics of food are going to grow steadily more important and powerful. I wanted to make sure our subscribers understood the changes underway and were prepared to ensure that they and their family secured quality food supplies over the next two decades and adjusted their investments accordingly. I then published the 1st Quarter 2017 Wrap Up – The Clash of Civilizations on whether the new Administration could address the fundamental problems facing the United States—including the missing money.

I continued to speak publicly about the extraordinary amounts of money that had gone missing at HUD and DOD in fiscal 2015 and from 1998 to date. Many people did not believe me. In response, I kept sending or posting links to the underlying government financial documents. It is always a remarkable experience to quote directly from public government reports and have people refuse to believe you and refuse to take the time to read the reports. As luck would have it, I have a group of intelligent subscribers. Some had the interest to dig in and read them and confirm my basic points.

In May 2017, I got an email from Dr. Mark Skidmore at Michigan State University. He had heard me describe the 2015 undocumentable adjustments. Knowing I must be wrong, he checked the DOD documents and confirmed I was right. He offered to help. The result was a decision for Dr. Skidmore and his students to do a thorough survey of HUD and DOD financial statements from 1998 to 2015 to establish a more reliable count of the missing money for the period. I had one condition—that I store and republish all documents on the Solari servers before we published anything.

I think Dr. Skidmore thought I was being overly cautious. In fact, I just had 28 years of experience with the lies, cheating, hacking, trickery, and violence that occurred in and around this issue. As I suspected, the government removed many of the financial reports that we downloaded and which supported the case of missing money. When the DOD and HUD IGs took down the documents, our copies continued to publish. Likely embarrassed by the fact that we had not depended on their website and Dr. Skidmore’s public shock, they republished the previously deleted reports on different URLS. They said they happened to be “reorganizing” their websites. Miraculously, both the DOD and HUD IGs decided to reorganize their web documents at precisely the same time. What a coincidence!

Related Resources:

Solari Report:

Edward Bernays & the 10 Big Lies of the 21st Century with Junious Ricardo Stanton

Exchange Stabilization Fund with Rob Kirby

Interest Rate Swaps with Rob Kirby

“The financial coup & missing money: Quotes”

“U.S. Army fudged its accounts by trillions of dollars, auditor finds”

“The productivity backlash”


XI. The Skidmore Report
May 2017–October 2018

“Let me tell you: You take on the intelligence community—they have six ways from Sunday of getting back at you.”
~ Senate Minority Leader Chuck Schumer

Thus began the process of Dr. Skidmore and his students reviewing the public financial reports of HUD and DOD for the federal fiscal years 1998-2015. While I had identified a total of $12-plus trillion of undocumentable adjustments, they kept finding more. Each time I received a call from Dr. Skidmore, I would hear him say in amazement, “We found another trillion.” Finally, the total count went to $21 trillion, more than the outstanding U.S. debt.

Finally on September 28, 2017, Dr. Skidmore published his report on the findings. It was published on The Solari Report with copies of supporting documentation and links to the HUD and DOD websites where the original documentation had been sourced. It was followed by seven updates as DOD scrambled to justify their absence of audits. During this period, both Dr. Skidmore and I did regular radio and Internet shows to describe the situation.

Right after the report was published, the New York press reported a fire at the New York Fed on a Saturday. The first report I read said that someone was using an old fireplace. I should have kept a copy. Lockheed could spin out its liabilities to a new company, but the other part of the payment systems run by the New York Fed as depository for the U.S. government and manager of the Exchange Stabilization Fund could not. Meanwhile, DOD announced its new audit—as if this was a new thing.

With sufficient attention on the missing money, I believed it was time to connect the dots to what was happening to our pension funds. I researched and published our 2017 Annual Wrap Up – Does Your Pension Fund Have a Deep State Drain? on the state of the U.S. pension funds. Shortly after I published it, our site went down. The situation was so bad, I made the 2017 Annual Wrap Up public and proceeded with our team to build a new website rather than fix the old one. Our business—which had been growing steadily at 20%-25%—dropped dramatically until we had the new site back up and running. We continue to bring up our full library—the amount of work and expense have been significant. I say this to underscore the importance of connecting the dots between the missing money and our retirement savings.

Here is an excerpt from The State of Our Pension Funds in the 2017 Annual Wrap Up:

“If it’s not a problem for $21 trillion to go missing from DOD and HUD and it is possible to come up with more than $20+ trillion to give or loan to the banks when there is no legal obligation to do so and when we can transfer trillions of the most valuable technology in the world to private corporations at zero cost to them and great cost to the taxpayers, I assure you that fixing whatever pension fund problem there is, is not difficult. However, the political will must exist and want to. That is the problem. If we can print money to give $20+ trillion to the banks and let $21 trillion go missing from the federal government, why is it a problem to print $5 trillion to fund the pension funds?”

One of the reasons is because the pension funds are a SOURCE of revenues to finance the missing money and bailouts. It is challenging when your source becomes a use. Where will you source the revenues instead? As the German finance minister explained at the G20 meeting in China in 2017, “The debt finance growth model is over. There are no changes that aren’t real reforms.”

I would add that this also holds true for addressing the fraudulent inducement of American students with $1 trillion of student loan debt or the bankrupting of millions of Americans with an overly expensive health care system and suppression of economic health care treatments, among other items.

One of the things that became apparent after Dr. Skidmore’s report was published was that investors, reporters, researchers, and interested citizens were not able to follow the story without a deeper understanding of the federal laws related to both monetary and fiscal operations in the U.S. government. Consequently, I commissioned attorneys Michele Ferri and Jonathan Lurie to research and publish a series of seven articles to make the federal laws in this area easier to understand. You can find their work in U.S. Federal Finances: The Law in this 2018 Annual Wrap Up and at our Missing Money website.

In early 2018, the state of Tennessee audited Solari Investment Advisory Company, LLC. It was part of a three-year cycle in which the state audited all of the investment advisory companies in the state. Based on the hourly rates the SEC uses for such situations, the legal and bookkeeping costs of the audit exceeded our expected revenues for the year. Coming as it did approximately two weeks after the Solari Report site was destroyed and during a period when I was scheduled to be in Australia and New Zealand, the costs were particularly demanding. In addition, the proposals requiring us to adopt cybersecurity software, I believed, would badly compromise clients’ privacy regarding their private assets held outside of banks, insurance, and brokerage firms—including cash and precious metals. One concern was that the state had recently hired as their IT contractor a firm I have had personal experience with—and have found to be highly unethical in repeated dealings. Consequently, I closed the individual investment advisory side of the business to focus the company on investment screens. Given the uncertainty ahead, anything I and the Solari team could do to reduce our regulatory requirements and risk was essential.

The missing money issue came to a head in October 2018. DOD was struggling to complete an audit. Before they finalized the process—as they could not complete an audit—the Federal Accounting Standards Advisory Board (FASAB) issued its Statement 56 with adoption by the GAO and OMB—essentially authorizing secret books with the approval of both the Trump administration in the White House and the Republican and Democratic leadership in the House and Senate. In a nutshell, Statement 56, in combination with other classification and black budget laws, gives government agencies and private corporations the ability to make their financial information secret, resulting in financial statements that are misleading, provided that they do so based on an argument that the information they are leaving out or doctoring is related to a national security concern. DOD exercised the use of FASAB 56 before finalizing the audit process. What that meant is that the financial report DOD published at the completion of its non-audit was essentially meaningless.

No one noticed the adoption of FASAB 56 on October 4, 2018 to end federal financial reporting—essentially shredding the Constitution. Two days earlier, Jamal Khashoggi, a journalist for the Washington Post and former general manager and editor-in-chief of Al-Arab News Channel, was assassinated at the Saudi consulate in Istanbul. In addition, Congress was in the middle of the Kavanaugh nomination hearings and related allegations over the sexual practices of teenagers. Whether murder or sex, the shriek-o-meter made sure the most important story of the year was not mentioned or noticed, let alone understood.

Is it possible that one of the reasons for such noisy events was to slip through FASAB 56 without comment? With the Bush faction and the neocons working their way into the Department of Justice, the courts, and the nuts and bolts mechanisms of the deep state, their mastery of the machinery was evident. How many wars can be started by funneling money under the umbrella of FASAB 56 to foreign militaries and mercenaries? Now that we have spent 18 years and $5.9 trillion on war in the Middle East, is the seven-countries plan back in play?

Related Resources:

Solari Report:

2017 Annual Wrap Up: Does Your Pension Fund Have a Deep State Drain? see The State of Our Pension Funds

The Missing Money – $21 Trillion in Undocumentable Adjustments and Counting with Dr. Mark Skidmore

The Missing Money – How Would You Write the Movie? With Rob Kirby


FASAB Statement 56 – Understanding New Government Financial Accounting Loopholes


XII. Never Never Land – The Post FASAB 56 World

“Glory glory, hallelujah
Since I laid my burden down
Glory glory, hallelujah
Since I laid my burden down”

~ Lay My Burden Down, old gospel song

The adoption of FASAB 56 in October 2018 has dramatic implications that most Americans and global investors are struggling to fathom. In frustration, I sent the following description to Matt Taibbi as he was writing a piece on FASAB 56 for Rolling Stone:

“The story is simple and obvious. What is it about secret financing for secret armies that you do not understand? The U.S. government just officially changed its governance model from a constitutional republic to fascism through an obscure accounting policy. No need to bother with a Constitutional convention. The U.S. Treasury is free to tax and then borrow from our pension funds and global and domestic investors and then transfer the money and assets financed and technology found or created without limit or oversight to private corporations and investors without compensation or oversight. This is privatization by the “just do it method.” Think of this as the extension of the bailouts to a permanent open bailout structure. The White House and Congress just opened a pipeline into the back of the U.S. Treasury and announced to every private army, mercenary, and thug in the world that we are open for business. Every mercenary on the planet is now generating proposed schemes to create business for themselves that pumps up U.S. corporate profits and campaign contributions. Why do you think Mattis is suddenly out and ads are suddenly running that ‘Blackwater is Coming’? My advice? Ask now former DOD Secretary Mattis—who opposed mercenary armies—how he feels about using his credibility to arrange significant increases in DOD appropriations and then getting the boot as soon as the mechanism to finance secret private armies goes into place.”

I should have added General Kelly as well. With large appropriations achieved, the General—who also had the good sense to oppose mercenary armies—was replaced by the head of OMB who had led the Administration approval for FASAB 56.

As the Department of Defense and the U.S. government were failing once again in 2018 to supply audited financials as required by law, U.S. Treasury debt grew by 6%. U.S. Treasury debt is expected to grow by 8% in 2019. That is despite many years of what is being called an “economic recovery.” If the economy slows or goes into recession, the debt growth is going to accelerate. If you add unfunded liabilities, the picture deteriorates further.

One important question is, who will buy this debt? Especially if they know that assets are free to transfer out through the back door? As I write this, U.S. Secretary of the Treasury Steve Mnuchin is being sued for his role as a private investor in allegedly asset stripping Sears before it went under. Given the power of FASAB 56 to implement a similar process in the U.S. government, it is telling that Treasury did not stop the implementation over concern for the credit or marketability of the U.S. debt.

Currently, U.S. investors own 33% of U.S. Treasuries, the Federal Reserve Bank owns 11%, and the U.S. government owns 27%, for a total of 71% owned domestically. That leaves 29% owned by foreign investors who are currently net sellers. In addition, the U.S. government holdings are expected to shrink as the cash flow in the Social Security Trust Fund goes negative, and in the next two years, markets will experience a significant volume of corporate maturities. Given high global government debt levels, the competition for capital is going to be fierce.

In December, the ascension of the Bush team and neocons continued. William Barr, Attorney General during the George H.W. Bush administration, was nominated for Attorney General in the Trump administration. Barr served in the office of legal counsel at the CIA in 1976 when George H.W. Bush was confirmed as Director of Central Intelligence as a result of support from Dick Cheney, the Chief of Staff, and Donald Rumsfeld, then Secretary of Defense. Barr’s job included helping Bush shut down the Church Committee hearings. As his confirmation hearings proceeded, I wondered, did he see the lists of Americans scheduled for assassination to shut the Church Committee hearings down? Did he see my mother’s name on the list? It’s amazing how events keep coming back around to a few simple things. Perhaps time is circular.

As I pondered the challenges of explaining to global investors and citizens the importance of integrating FASAB 56 into their strategies, I decided to focus the Solari Report 2018 Annual Wrap Up on the $21 trillion missing money. We needed a hard copy that integrated important material on these events. Investors also needed to take responsibility for what was underway. We have always known this day would come. Now it’s here.

I called my attorney, Carolyn Betts, and we wrote “Caveat Emptor: Why Investors Need to Do Due Diligence on U.S. Treasury and Related Securities.”

It is long, it is dense, and it is important. You should read it.

The time has come for me to pass the baton to you. I am not going anywhere. However, I stopped financing this machinery as much as possible decades ago. So have lots of other people. You probably are financing it—as are our banks, insurance companies, pension funds, towns, states, countries, money managers, churches, charities, and families. Your political leadership is certainly financing it.

Name everything you don’t like that the U.S. government is doing, that it is financing, or that you think its military and intelligence are probably doing. You are likely financing it. And you have the power to stop financing it—or to finance less of it. You also have the power to start asking questions of all the institutions who represent you and have access to your financial resources—including your bank, your pension fund, your state and local representatives, your money managers, your insurance company, and the charities and endowments you support.

If you won’t stop financing it, and if you won’t ask questions, there is little more I can do.

The U.S. government has undocumentable adjustments of $21 trillion. That is $65,000 for you and each of your family members, friends, and neighbors. Add the debt and the bailouts, and it keeps rising.

It’s your money. Your assets are on the line. It’s your life. Your future and your children’s and grandchildren’s future is on the line. It’s your action.

Whatever you decide to do, the Solari team and I will be here doing our best to help.

Related Resources:

Solari Report:

Caveat Emptor: Why Investors Need to Do Due Diligence on U.S. Treasury and Related Securities


USAWatchdog with Greg Hunter Interviews Dr. Mark Skidmore on FASAB 56, January 2019


“Has the government legalized secret defense spending?”

Want more? Stay current at Solari’s Missing Money website: https://missingmoney.solari.com
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  1. Catherine
    While you were cleaning up the HUD mortgage fraud, people like Bill Simon, Henry Kissinger & Preston Martin were flying around together picking up S&L’s for pennies. If my memory serves me ostrich farms & jojoba oil were being pushed hard for investments by a few S&L’s. I guess the poster child in the S&L’s was Charles Keating of Lincoln Savings who went to jail for fraud. When I think of Keating I think of John McCain.

  2. Buy no U.S. government bonds! Less evil, but still dubious from a shaky finances perspective, are state and municipal bonds. Could be about 1 in 7 S&P 500 corporations are a 1% interest rate hike away from not being able to cover their debt servicing too. I have not done the work to inquire what my bank, credit unions and insurance companies keep as assets and wonder if they would even tell me, much less change. Then there are “prudent” pension rules requiring a certain percentage of “risk free” government bonds assets…

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