[Peace-discuss] Underworld of Finance (lengthy)

[Barry Miller]

This is some very interesting information (to me).

Barry


Rense.com



Project Hammer - Covert Finance
And The Parallel Economy
By David G. Guyatt © 2001
c/- NEXUS Office 55 Queens Road
East Grinstead, W. Sussex RH19 1BG United Kingdom
David Guyatt goldbug at goldbug99.freeserve.co.uk
David Guyatt www.deepblacklies.co.uk
Extracted from Nexus Magazine
Volume 9, Number 1 December-January 2002

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 at 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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