What answers Jim Leach's House Committee on Banking and Financial Services received from the National Security Agency's (NSA's) Inspector General is not known, but apparently the NSA stonewalled the investigation. On July 23, 1995, Gregory Wierzynski emailed me, asking "Do you have suggestions on how we could verify some of the elements in the Norman story? I've talked to Chuck in Kentucky and am still in touch with him. But his stories have not panned out, even partially. I would be most interested in your ideas." I found this statement remarkable, and knew that Wierzynski was being deliberately obtuse. Moreover, neither I--nor anyone else of my acquaintance--had told Wierzynski that I was talking to Chuck Hayes in Nancy, Kentucky.
Jim Norman had first suggested that I call Hayes-- had even implied that Hayes wanted me to call--but initially I had been reluctant to do so. There were enough people trying to get me off the Internet, and I was dubious of the motives of an ex-intelligence operative. But when I finally did so, we spent a hour and twenty minutes on the phone in a wide-ranging conversation about money- laundering. I jumped around from topic to topic, bringing up numerous obscure connections between the intelligence community and banking. In each case Hayes was right there with me, adding details to what we were discussing. From time to time I would make deliberate mis-statements to see if Hayes would catch the discrepancies. He did. By the end of the conversation it did not matter to me whether Chuck Hayes was just a hillbilly Kentucky junk dealer or an ex-member of CIA's division D. His knowledge spoke for itself. He had an intimate acquaintance with banking wire transfers, bank computer operations, and banking-intelligence connections, as well as detailed insights into current hidden money-laundering channels.
Hayes was already familiar with my article The End of Ordinary Money. He said he had gotten his copy from the CIA library. The CIA had apparently either downloaded it from the Internet, or perhaps had obtained it through Robert Steele. Eric Bloodaxe, a.k.a. Chris Goggans, an ex-Legion of Doom member who edited a hacker publication called Phrack, had suggested I sent copies to Winn Schwartau of Information Warfare fame, and to Robert Steele, whose company Open Source Solutions, Inc., published a newsletter entitled OSS Notices, which advocated some radical changes to the process of intelligence collection. Steele had reviewed them as follows: "J. Orlin Grabbe has produced the first two in a series of three papers on digital cash, and I found them both educational and provocative. . . . He approaches the matter from a civil libertarian/civil disobedience perspective, and I find his perspective on the history of U.S. policy and technology, as well as the alternatives, well-worth review. This is a thoughtful popular perspective on issues of electronic privacy which bears on both the protection of intellectual property and electronic civil defense" (OSS Notices, vol. 3, issue 5, May 31, 1995).
Chuck and I had some differences, to be sure. Hayes was spending much of his time tracking drug- money laundering through the U.S. financial system. I looked at the War on Drugs from an economic perspective: supply restriction leading to vast profit margins, with concomitant political payoffs and political corruption, while in the meantime prisons were being over-crowded with casual drug users. It was an exercise in insanity. Nor was I a fan of the DEA, with its record of civil rights violations. Hayes, by contrast, liked the DEA for their street smarts, which contrasted with the desk- level bureaucrats he was somewhat contemptuous of at the CIA. But Hayes was gunning for the people at the top of the drug-dealing and money-laundering pyramid, and this was fine with me. There was a close association between those administering the War on Drugs, and those profiting from it. In the case of money-laundering, it was even more blatant: it was hard to differentiate the money launderers from those that administered the money- laundering laws. I did not approve of the money- laundering laws themselves with their invasions of personal financial privacy. But on the other hand, hoisting government junkies on their own petard did not perturb me. Over a period of time, Hayes and I developed an information-sharing arrangement.
Hayes was at the moment following the financial flows through Arkansas financial institutions, as well as through Mellon Bank in Pittsburgh. Also involved were New York banks, some members of the Chicago Mercantile Exchange, and at least one important official at the Federal Reserve. On the Arkansas front, Hayes was quite open in telling me he was going to nail Jim Guy Tucker to the wall, and over the following year I watched him do just that. One might assume from such a statement that Hayes was a Republican, out to get Democrats. But in fact Hayes' father had been a local Democrat party official, and Hayes had been a friend and admirer of John Kennedy. Hayes was not political in that sense, any more than I was.
Some people have a strange habit of trying to interpret everything in political terms. When I first spoke to Sarah McClendon, she asked me, "Why are people saying all these things about Clinton, and they aren't saying anything about George Bush?" I refused to bite. I told her I didn't give a shit about the difference between Republicans and Democrats--that this was about criminality, not about partisan politics. Some people-- Republican or Democrat--are honest, and some are not. Sarah herself kept referring to the Clintons (Bill and Hill) as "virgins," which amused me to no end. But my interest was not partisan, and never has been.
In a contrary vein, Jack Blum, who recently joined Jim Leach's House Committee on Banking as an investigator (and who quickly recommended they drop their Mena investigation), told Marianne Gasior that I was a right-wing nut because of what I had written about Bill and Hillary Clinton. Marianne said, "I don't think so," and read off my resume. Blum's response: "You're kidding." Gasior was politically a liberal Democrat, and when she was pursuing a case against Kennametal, which had done business with Iraq during the Gulf War, she received some support from Democrat politicians, because the issue was embarrassing to Republican interests. Time Magazine did a write-up of her efforts ("A Matter of Honor," June 21, 1993). But when she began to ask questions about what Hillary Clinton was doing on the board of Lafarge Corporation, which was part of the same smuggling network, Democrat support for her research quickly evaporated (see "Whatever Happened to Iraqgate?", The American Spectator, November 1996.) To the average political hack, partisanship always takes precedence over the search for truth.
In Wierzynski's case, while supposedly investigating money-laundering for the House Committee, he seemed to be actually serving other interests--perhaps the Pentagon's, perhaps someone else's. Hayes had come up with financial records showing that fifty to seventy million dollars a day of drug-related money was being laundered through the institutions he was looking at. Wierzynski couldn't understand how such a thing was possible. He wanted "proof" in a neat little package, say a memo entitled "Today's Money-Laundering Report". He seemed to expect to ask a few questions, and then voila!-- the darkest secrets of American political life would be exposed. So it is not surprising that Wierzynski's investigation had gone nowhere before Jack Blum arrived to call the whole thing off. Meanwhile, Wierzynski's son, in school in England, had been indicted for supplying information to a group of Russian hackers in St. Petersburg, who had pulled off a heist of Citibank funds.
Both Wierzynski and Stephen Gannis, the Counsel for the House Committee on Banking and Finance, were in touch with a San Francisco attorney named Charles O. Morgan. Systematics (now a subsidiary of Alltel) had hired Morgan to lie about its relationship to the NSA, and Morgan proceeded to do just that. In an April 5, 1995, letter to Michael Geltner, an attorney for Agora, Inc., Morgan wrote: "None of ALLTEL's operations or subsidiaries has ever had any connection in any capacity with the Central Intelligence Agency, the National Security Agency, or any other similar agency in the United States Government; . . ." But recent documents obtained under the Freedom of Information Act by The Washington Weekly from NSA show that, for example, that "The Arkansas-based security contractor Systematics Inc. on September 14, 1990 was awarded a $166,000 NSA contract to build a 'Sensitive Compartmented Information Facility' (SCIF) in Ft. Gillem, Georgia" (The Washington Weekly, Nov. 11, 1996).
Morgan similarly denied any connection between Web Hubbell and Systematics, writing, "Webster Hubbell never served as an attorney or in any other capacity for ALLTEL Corporation, or for any of its operations or subsidiaries, other than a single instance in 1983, when Systematics, Inc., engaged Mr. Hubbell to pursue a competitor that was using Systematics, Inc.'s propriety software without authorization; . . ." But it is a matter of public record that when in 1978 Jackson Stephens tried to take over First American bank (later acquired by BCCI), that the bank sued Systematics along with BCCI, Bert Lance, and Jackson Stephens. Filing briefs for Systematics were Webster Hubbell, along with C.J. Giroir and Hillary Rodham Clinton. (Hubbell subsequently went to the Justice Department, and then to jail, after receiving a $500,000 payment for unspecified legal services from Indonesia's Lippo Group. C.J. Giroir left the Rose Law Firm and set up a consulting firm to arrange deals between the Lippo Group and Arkansas-based firms. Hillary Clinton recently declared her friendship for ex- Lippo employee and Democrat fund-raiser John Huang, and was also indicted by grand juries in Little Rock and in New York in October 1996. These indictments have not yet been made public.)
But the non-pursuit of the drug-money laundering trail by the Leach Committee was not surprising. It stepped on too many toes. Hayes and I agreed that the U.S. was being rapidly transformed into a narco-republic. The drug cartels had penetrated the highest levels of the Justice Department and the FBI, elements of the intelligence community, and were additionally bribing a broad assortment of state and federal government employees and politicians. Even more alarming, the cartels were now making inroads into the White House. And the Clinton administration, with lax security stemming largely from a variety of drug-related issues, along with a pre-existing legacy of political corruption in Arkansas, had created a free-for-all playground for foreign agents. Everything was for sale, from trade policy to nuclear codes. Moreover, Bill Clinton (or perhaps those he surrounded himself with, while he partied on the side) was making rapid progress in turning the FBI and the Secret Service into a private political police force--a Gestapo whose duty was to investigate and harass (and even kill) his political opponents, and to cover up evidence of his own bad deeds.
Extraordinary times required extraordinary measures. Enter the Fifth Column.
November 12, 1996
Web Page: http://www.aci.net/kalliste/