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The off-ledger trading programs operated by some
central and international banks launder massive amounts of money and provide
vast sums to fund covert 'black budget' projects.
PART ONE
Project Hammer is all about money. Stupendous
great gobs of money. So much money, in fact, that it will challenge
whatever reality you thought you had about the over-world of banking,
finance and economics. It is also about the nether world of international
banking and finance, a world that is said not to exist in reality. But
exist it does.
More often than not, this never-never-land of
international banking is concealed from public view by the judicious use of
two sets of books. It is also eclipsed from interested investigators by a
never-ending series of real frauds that result in arrest and imprisonment
of numerous scam artists. This creates the clever illusion that the only
thing going on are artful scams designed to fleece the unwary.
Such swindles fall under the general category of
High Yield Investment Programs, Front End Fee frauds and Prime Bank Note
schemes. Numerous law enforcement cases such as these, when twinned with
dire "beware" warnings published on FBI, US Treasury and other
websites, easily lead one to conclude that there are no such things as
"real" trading programs. And the powers that be don't at all
object to this conclusion being reached. It is the old case of hiding trees
in a forest.
A key point to keep to the fore in what follows is
that trading programs operate "off ledger". That is to say, the
banks and central banks that operate them run two sets of books: one set
for public scrutiny, and another set for private viewing only. Another fact
to bear in mind is that authorised programs generate quite spectacular
profits for very little--in fact, minuscule--risk, and those who are
invited to participate as funders accumulate capital at a shockingly rapid
rate. One reason, perhaps, why the wealthy get altogether wealthier as the
poor sink ever lower into the mire of poverty.
The financial, banking and economic shadow-world
in which Project Hammer lived, breathed and manufactured money "out of
thin air" is the dirty little secret of the Western economy. It is a
form of money creation that is effectively unchallenged by any form of
oversight or accountability as we understand it. Hammer and numerous other
transactions like it are based on what are known as Collateral Trading
Programs, although many other descriptive names and terms are also used.1
The reason for such programs is to create vast
pools of ready money that are earmarked for use in sanctioned (authorised)
operations and projects. On the plus side, many beneficial projects
throughout the world get funded as a result of program trading. On the
negative side, there are more shadowy projects. Included in the latter
category are certain black operations.
The amalgamated pool of funds created and now held
in dormant and orphaned bank accounts runs to trillions of dollars,
according to insiders. At the low end of estimates, there is believed to be
enough to pay off the US national debt plus some change. At the higher end,
estimates range up to hundreds of trillions of dollars. I have been
repeatedly told, almost matter-of-factly, that the higher estimates are
closer to the truth. I simply don't know how big the sums amount to, but I
can document US$12 trillion. This sum is revealed in the late Baron Krupp
papers that form part of the exhibits of the companion volume to dossier
The Secret Gold Treaty (http://www.deepblacklies.co.uk).
Many different sources say that programs are also
used to launder money by spinning it through a program cycle until it is
pristine clean. Drugs, guns and the usual array of dirty money transactions
are said to feature.
Since US dollars are the cornerstone of all
program activity, Uncle Sam naturally gets a bite of the action. A
percentage of the proceeds is collected via private tax treaties negotiated
with offshore entities. These treaties also help to shield the reality of
these programs from public awareness. There are unsubstantiated rumours
that some of the tax take occasionally gets "diverted" for altogether
private purposes. It is an allegation that is impossible to stand up,
however.
London and Zurich are key centres for program
activity, although transactions are usually booked through offshore entities.
London and Zurich are also gold centres, and more than one credible source
confirms that "black" gold forms an important part of program
trading activity. There are also good reasons to suppose that part of Uncle
Sam's share of trading profits is credited to the Exchange Stabilisation
Fund. Here it is pooled with other funds and used to shore-up the American
economy by--amongst other manoeuvres--manipulating the gold price to keep
it below a predetermined price.
Trading programs are the preserve of many
governments, their treasury departments and the top international banks
which by their very nature have the necessary mechanisms in place to enable
trading to take place efficiently and secretly. Banks from G7 nations
dominate.
It follows, therefore, that a number of problems
occur as a consequence of the multijurisdictional nature of supervision;
and although safeguards are in place to ensure that "clean" money
is fed into the system, this doesn't always happen. Funds of suspect origin
do enter the system and are made pristine clean by this form of paper
alchemy.
Large sums of black gold, cash or other forms of
convertible assets are used as "collateral" to initiate trading
programs. There are also certain classes of government-issued treasury
notes and bonds that are privately lodged with major Western banks. These
"treasuries" are never meant to see the light of day, but are in
turn used by major banks to back the issuance of their own bank debentures
"off ledger" in substantially leveraged amounts that can run into
tens of trillions of dollars--or their foreign currency equivalents.
In turn, this bank "paper" is traded in
pre-arranged "buy/sell" transactions at steep discounts (cents on
the dollar) off the face value of the issued bank debentures. The trading
of the paper between banks--using proxies--is arranged and coordinated so
that the traded obligations effectively "wash out" or are
otherwise cancelled, although other scenarios exist where issued paper is
purchased at a fair market value and held to maturity. In the past, trading
was paper-based, but today everything is electronic
"screen-based" and consequently the credits traded have a life of
milliseconds.
The difference between the buy-and-sell
price--usually known as the "spread" (in the case of Hammer, this
was said to be many percentage points)--generates a "fallout", a
term that implies profit. In other transactions, most notably
"Jacobe", the spread was represented to be at least 10% on a
planned face value issuance of US$27.5 trillion, according to documents I
have seen. This would have created a fallout of US$2.75 trillion. However,
for reasons yet unknown to this writer, it seems that the Jacobe program,
privately hailed as the largest program "ever put together", was--for
reasons that are still inexplicable--only two-thirds completed.
Less grand, but just as interesting in other
respects, was the fallout from Project Hammer, which is said to have
totalled over US$220 billion. In fact, the precise sum is US$223,104,000,008.03.2
THE NUGAN HAND BANK CONNECTION
One of the central characters associated with
Project Hammer was Brigadier General Erle Cocke. Back in 1966, Cocke, along
with his sleeping partner General Eugene Phillips, established the Washington-based
consultancy firm Cocke & Phillips International. This was at the height
of the Vietnam War, and just a few months after Cold Warrior Paul H. Nitze
issued the directive authorising the establishment of the US Navy's
clandestine intelligence collection program more commonly known as
"Task Force 157".
TF 157 would later feature in the Nugan Hand Bank
affair exposed by Wall Street Journal investigative reporter Jonathan
Kwitny in his book The Crimes of Patriots. Task Force 157 came to an end on
the instruction of Admiral Bobby Ray Inman, once he discovered the full
involvement of "rogue" CIA agent Edwin Wilson in the Task Force.
Wilson was responsible for so much intrigue and illegality that one could
shake a stick at it. He was eventually arrested, tried and
imprisoned--where he remains to this day, fighting for release. Many now
believe that he was working on orders from above but in a deniable role and
was cynically sacrificed to save other more prominent players.
During his investigation, Jonathan Kwitny learned
that General Erle Cocke ran Nugan Hand Bank's Washington office. Cocke's
partner General Phillips denied this, saying they had merely rented office
space to Nugan Hand Inc.'s Hawaii President, General Edward Black--a former
OSS, CIA and senior military officer. This proved to be untrue, however.
Kwitny learned that papers filed with the US Treasury listed General Cocke
as the "person in charge" of Nugan Hand's Washington office.
Cocke claimed that someone else must have filed these papers without his
knowledge or consent.
In April 2000, Cocke gave a deposition running to
67 pages concerning his knowledge and involvement in Project Hammer. Ten
days later he died from pancreatic cancer. His explosive deposition reveals
him as a very significant and highly connected player in a world few of us
are familiar with.
Cocke fought in three wars: World War II, Korea
and Vietnam. During WWII he was an artillery officer and a division staff
officer and was a POW under the Germans. He worked for General MacArthur
during the Korean War and for General Westmoreland in the Vietnam War.
Highly decorated for his service, he was awarded a Silver Star, a Bronze
Star and cluster, a Purple Heart with three clusters, a Croix de Guerre
plus the Légion d'honneur from France, and a Medal of Honour from The
Philippines. He was the youngest National Commander of the American Legion
and, prior to his death, became the oldest National Commander. In addition
he was distinguished by the Red Cross with the medal Cruz Roja, and he was
made an Honourable Comrade of the Nationalist Chinese Air Force.
Cocke was a Shriner Mason of many years' standing
(he held a semi-official voluntary position for that organisation) and a
Grand Commander of the Knights of Malta--the secretive Vatican order that
boasts numerous members who serve, or are closely affiliated with, Western
intelligence and military services. Intriguingly, he claimed to have been
the first Protestant "in 1200 years to be so honoured".
In 1959 and again in 1960 he was a member of the
US delegation to the General Assembly of the United Nations, holding the
rank (and pay grade) of Ambassador. After that, he was the first fulltime
US Alternate Executive Director of the World Bank, a position he held for
four years from 1961&endash;64. Pressed about this in more detail by
his questioner, a Washington attorney, Cocke responded by saying:
"At that time I owned 28 percent of the stock
and, of course, I had all kinds of people in the Treasury tell me what to
do. Don't get me wrong, I made all the decisions. But I was the executor, I
was the delivery."
He also confirmed that he had worked for every US
President:
"...from Truman to date. At some stage of the
game I worked for all of them. I have to admit that some of them were very
minor chores and others were important."
In addition to his many abilities and
accomplishments listed above, Erle Cocke was above all other things a
banker--a profession that ran in the family. His great-grandfather put a
bank "together in 1867", which was then the only bank in Georgia.
His grandfather founded a bank in about 1890, and his father was President
of Fulton National Bank (which became Bank of America) and was at one time
the President of the American Bankers Association and Chairman of the
Federal Deposit Insurance Corporation (FDIC).
Asked about his own knowledge of banking, Cocke
said he had taken all the normal banking courses, and added:
"I understand banking. I can teach
banking--you understand what I am saying--at the college level."
This banking expertise was at the core of his
firm, Cocke & Phillips International, which began life as a:
"...normal American firm, lobbying firm, here
in Washington, and we grew into banking particularly. The UN contacts and
the World Bank contacts--sometimes they help those people for 10
years."
In a similar vein, he undertook all sorts of
"chores" for some of the government intelligence agencies. He
explained this as follows:
"One thing is if they trusted you, they
practically came in and said, 'What do I do?' I mean, you didn't argue with
them. You sort of proceeded with the program and gave them a few choices,
of course. But [they] practically always followed what we did. I was
administrator, arbitrator. I was [the] moderator, bringing people
together."
Asked if that experience "would be true in
the financial and banking world in particular", Cocke replied:
"Oh, yes. I have been able to close things
that other people can't close."
As we shall see, Cocke's ability to
"close" things other people could not close did not extend to
Project Hammer--a financial operation that, according to Cocke, deeply
involved Citibank and its Chairman, John Reed. Cocke said he could get to
see any President without any trouble, but complained that he could not get
to meet John Reed.
COLLATERAL DAMAGE
Having briefly examined General Cocke's
background, let's now return to that stupendous sum of "black"
money mentioned earlier. For purposes of clarity, this amount was
referenced in Erle Cocke's deposition. If, as we have said, this amount was
stealthily "magicked" into being as a result of an exotic form of
financial smoke and mirrors, the question is: where did it go?
According to Cocke, this sum was lodged in
"30-some odd accounts together". Asked where these accounts were
located, Cocke responded by saying, "In almost one solid block at
Citibank".
General Cocke's questioner then asked: "Would
they have been in control of Mr Reed?"--meaning former Citibank CEO
and Chairman John Reed.
Cocke responded as follows, in this exchange with
the attorney: A. Probably not all because there were so many different
participants involved, and in different locations, countries, that I would
say no, he did not have complete control, but everybody recognized it
wouldn't be settled until it got to him. Q. And these were, you say,
accounts for various people around the world? A. Yes. Q. Produced as a
result of what? A. Well, most of them figured that greed in particular was
mighty high. And, if they put up this amount of money, then I am going to
get this kind of money coming back. That's the way practically all of it
was. I hate to use the word "sole", but "present" might
be a better word. Q. Were these accounts for the benefit of people who had
engaged in some kind of trading program? A. They were all to get in the
trading program. I haven't found anybody that didn't go in wanting to
increase their income and their greed in the highest bracket if they could
possibly put up money. Q. What I am understanding from you is that whatever
these individuals, corporate entities, or even government...they believed,
apparently by putting these funds with Citibank as part of this effort,
they would then receive later down the road a pay-off? A. That is correct.
Q. As a result of Citibank's management of these funds, is that fair to
say? A. Yes, basically the whole trading bloc in a nutshell.
During the course of his deposition, General Cocke
was asked if he knew who "created" Hammer "to begin
with". He admitted that he didn't know and was even reluctant to make
a guess, but added that whoever set it in motion "had to have been
somebody at a pretty high level". He then made the interesting
observation that whoever it was who had authorised it, "the original
structure" had "obviously got way out of proportion as time went
by". The implication was that some of the money--the fallout--got
diverted from its original intention.
More than a few of those involved in Project
Hammer at various levels have told me that they believe some of the pool of
money created by the Hammer project was "diverted" and used to
rescue many of the world's major banks, which by the very end of the 1980s
faced insolvency following reckless lending policies throughout the late
1970s and early/middle 1980s. It is certainly true that at that time many
major banks like Citibank, HSBC, Chase, BoNY and others stood teetering on
the very brink of disaster.
Another view is one that has been expressed by
Daniel Hughes, of Hughes Oil Company, a Florida-based corporation. Hughes
had been heavily involved in finding collateral to place in a number of
trading programs over several years. This cost him tens of thousands of
dollars, since most of these were illegitimate rather than genuine. It is a
fate that waits for untold thousands of unsuspecting investors who step
into this shadowy realm unprepared.
Even so, it seems that Hughes did play a part in
attempting to place collateral in Project Hammer. He believes that the
funds diverted from Project Hammer ended up in a CIA-controlled Swiss bank
account in the name of the late Howard Hughes. On the basis of years of
investigation, Daniel Hughes believes that Project Hammer involved the
trading of US$13.6 trillion in debentures, resulting in a
"fallout" of about US$1.1 trillion which was stashed in the
Howard Hughes account in Credit Suisse. Whilst there is no hard
corroboration in support of this claim, it remains an intriguing
possibility. More so, for in his deposition General Cocke indicated that
black money generated by trading programs might be hidden in dormant
accounts, and a Howard Hughes account set up 30 years ago would clearly
fall into that category.
According to Erle Cocke plus others I have spoken
with, Project Hammer began life as an authorised but secretive trading
program aimed at repatriating dollar assets that dated back several
decades. Cocke confirms this when he was asked what the overall objectives
of Project Hammer were:
"Well, it was mainly to bring monies back to
the United States from all types of activities, both legitimately and
illegitimately. Not that they were in the smuggling business per se, but
they were all in the arms business; they were all retracing dollars of one
description or another that had accumulated all through the '40s and '50s
really. And that probably is as broad a definition as I can give you. And
all kinds of nationalities were involved, all kinds of people were
involvedÉ"
Cocke was then asked who would have been behind
the Hammer project. Would it, the questioner asked, have involved
"various agencies of the US Government"?
"Yes. Obviously the CIA, the FBI, the
national security agencies of all types, Pentagon in the broadest sense of
it and as such, and the Treasury, Federal Reserve. Nobody got out of the
act, everybody wanted to get in the act."
But there were numerous other entities involved in
Project Hammer. None more so than the world's big bank, as is made clear by
the following exchange: Q. What other banks and financial institutions were
involved in it? A. Well, if they were, they were still as a correspondent
to CitibankÉ
"Correspondent", in the sense General
Cocke's uses this term, means one bank's account maintained at another
bank. This is used to handle money transfers between both banks, and it
very often denotes a "special relationship" between the the banks
concerned. The questioner then asked: Q. Do you know which of those would
be involved? Was Chase Manhattan one? A. I am sure that every big bank in
every major country at some stage of the game had some of this pass by
them. They had a chance to refuse, or they had a chance to take it up.
CITIBANK, "THE CHEESE"
Cocke was then asked who the "dominant
participant" was in "terms of running this project, this vast
project". The General is in no doubt about his reply when he says
that, based on his own investigation, it was "Citibank of New York, in
both their Athens, Greece, office and in their New York City office".
He also acknowledged that Hammer was part of "an ongoing long-term
kind of project".
Cocke went on to reveal that Citibank were
"Égoing to be the trustees. They were going to be running the program.
They were going to be the disbursing agency. They were the cheese."
Asked to identify which principal officer in
Citibank handled Project Hammer, Cocke responded that "from all
records, communications and contacts, John Reed was Vice President, but he
was the lone coordinator, for a better word".
Reed, who was Citibank's President and Chairman
during this period, has formally denied his involvement in Project Hammer.
In a deposition sworn in December 2000, Reed stated that he had "no
recognition or knowledge of anything purportedly known as Project
Hammer". Nor did he have "any recognition or knowledge" of
any person named Erle Cocke. His deposition goes on to list a number of
other items, people and allegations that he also had "no recognition
or knowledge" about.
For their part, Citibank, in a letter dated
December 12, 2000, state that they "never issued commercial
instruments on the basis of its possession of quantities of gold made
available to it by agencies of the US Government and the Federal Reserve in
order to ensure the solvency of Citibank in the '80s and other bullion
banks".
This denial, although emphatic, is interesting.
Research shows that gold recovered by the forerunner to the CIA--the Office
of Strategic Services (OSS)--was deposited in Citibank (and many other
banks, too), not in the name of the OSS or CIA but in the name of one of
their operatives, Severino Garcia Santa Romana.
On his death in 1974, some--but not all--of
Romana's "assets" appear to have been illegally acquired by
former Philippines President Ferdinand Marcos, who was at one time Santa
Romana's attorney. According to Santa Romana's widow, her husband gave Marcos
a limited Power of Attorney for use solely in the Philippines, since he
travelled abroad regularly. It seems that Marcos somehow made use of this
to gain control over Santa Romana's gold and other assets.
It also appears likely, based on documents in this
writer's possession, that considerable quantities of gold once held by
Santa Romana were later placed under the control of former CIA covert
operator Major-General Edward Lansdale. However, these assets were lodged
with the Union Bank of Switzerland. Again, it is worthy of note that they
were placed in Ed Lansdale's name, not in the name of a US Government
agency. These assets are very clearly off the books.
Large quantities of gold held by Citibank remained
in the account names of Severino Garcia Sta. Romana and José Antonio Diaz
de la Paz (the latter being a well-known alias for Santa Romana) under
reference codes "Fanerst King Fisher" and "Burgst Harbor
King" respectively.3 These have been the subject of a legal wrangle
between Santa Romana's heirs and Citibank's John Reed.
The fact that the gold held by Citibank and others
may not have been in the name of the Central Intelligence Agency or the
Federal Reserve--but, rather, was in Santa Romana's name--may have been all
Citibank needed to wriggle out of a poorly crafted question.
___
Continued in next issue here:
http://www.nexusmagazine.com/hammer2.html
Endnotes
1. Other terms that have been used are: Credit
Enhancement Business; and Capital Accumulation & Structured Debt Programs.
2. Others involved believe this sum represents a part of the fallout from
the Jacobe transaction, and not Hammer. 3. This information is drawn from a
letter dated December 20, 1995, from C. E. (Jim) Brown (the second husband
of Santa Romana's widow, Luz), addressed to the US Justice Department. Sta.
Romana also used J. Antonio Diaz as another alias. In fact, he used many
different names and entities to conduct his business.
About the Author
Following a 28-year career in investment banking (member,
AIBD) based in the City of London, David Guyatt's last position was
Associate Director and Treasurer of the forfaiting (an arcane banking term
meaning "to discount without recourse") division of a major
international bank. David is married with three children and now pursues a
career in journalism, writing for a variety of media and researching and
producing factual material on awide range of associated subjects. This is
his ninth article for NEXUS, the most recent ones published in 8/01 and
7/05. In addition to his feature writing, David has prepared background
papers on Anti-Personnel Electromagnetic Weapons for the International
Committee of the Red Cross (ICRC), was a contributing member of ICRC's
SIrUS Project that sought to define criteria for judging "abhorrent
weapons", and has written for the World Development Movement on his
"insider's knowledge" of international weapons financing. He has
been a consultant on Swiss and UK TV documentaries exposing the threat of
non-lethal weapons and Britain's weapons trail to Indonesia. He is
presently assisting the US-based law firm Easton & Levy in its lawsuit
against the Vatican for the restitution of the Nazi Croatian Treasury which
was illicitly transferred to the Vatican and elsewhere at the end of World
War II. David has recently completed an in-depth investigation into the
black market of gold and has published it as an electronic book, The Secret
Gold Treaty, available through his home page www.deepblacklies.co.uk. ___
Extracted from Nexus Magazine, Volume 9, Number 1
(December-January 2002) PO Box 30, Mapleton Qld 4560 Australia.
editor@nexusmagazine.com Telephone: +61 (0)7 5442 9280; Fax: +61 (0)7 5442
9381 From our web page at: www.nexusmagazine.com
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