Inside Stories of
True Conspiracy
by Uri Dowbenko
Just $19.95

Order Form Here

or Charge by Phone
Call Toll FREE

The Patriot
The Skulls

The Conspirators
Rule by Secrecy
Defrauding America
Dark Alliance




BUSHWHACKED: HUD Fraud, Spooks and the Slumlords of Harvard

by Uri Dowbenko

Part 3

The Harvard-Bush Connection

      Since historically the Chinese Opium Trade and the African Slave Trade have provided the financial foundation for the Boston "Bluebloods," it should come as no surprise that the Harvard Endowment Fund and the Harvard Management Corporation are involved in what can be characterized as shady enterprise at best -- or criminal activity at worst.

      In 1989, the Harvard Endowment Fund, became the 50% owner of HUD subsidy (Section 8) and non-subsidy apartment buildings through its purchase of NHP, an apartment management firm, headed by Roderick Heller III.

      Since their plan was to do an Initial Public Offering (IPO) or a merger for NHP, they tried to run up the value by aggressive acquisition of more apartments, preferably with HUD issued mortgage insurance which could be defaulted on -- with little or no consequence.

      Unfortunately for Harvard, HUD had initiated its new open-disclosure and performance-based auction under the direction of Hamilton Securities. When the private market firms battled it out, Harvard was outbid by GE, Goldman Sachs and Black Rock and its sour grapes apparently turned to vengeance.

      In 1996, according to Fitts, Rod Heller told her that the government had a "moral obligation" to him and his investors (Harvard Endowment) to renew or roll over the subsidies with them to maintain their profits.

      In other words, an open auction-free marketplace was not acceptable to the Harvard Boys, since they were operating their business of HUD-backed corporate welfare-subsidies under what Heller claimed was "an understood handshake."

      The HUD portfolio of distressed properties had traditionally been managed to derive profits for private business -- like Harvard Endowment Fund -- and not the US taxpayers. Since Harvard was used to rigging profits through politics, not fair business practices, it started losing income because there were less management fees and the value of its stock started going down.

      In 1991, Harvard and Heller asked Fitts to do an investment bank with them. At the last minute, Harvard Management Company honcho Michael R. Eisenson told her he wanted 20% of her new company's stock, and the deal was shattered.

      On the first large HUD loan sale, Eisenson complained to Fitts, "I don't like this" --referring to Hamilton's use of optimization software to auction HUD mortgages -- "because the only way we can win is by paying more than our competitors. We prefer a bid process where we can win by 'gaming it' because we are 'smarter.'"

      For those unfamiliar with Soviet (or is it Harvard-Mob?) terminology, "smarter" is code language for saying "we can rig it." And "gaming it" means finding a way of manipulating the players to get control of them, rather than using the competitive process of free market capitalism.

      Eisenson was obviously quite at home with the proverbial "fix."

      And who is Mike Eisenson? He was the lead investor who eventually sold Harvard's share of NHP to the Denver-based AIMCO. His other claim to fame is that he was on the board of directors of the infamous Harken Energy which rigged an insider stock deal on behalf of George W. Bush -- not coincidentally a Harvard grad.

      In 1986, a small company called Spectrum 7 (George W. Bush, Chairman and CEO) was acquired by Harken Energy Corp. After Bush joined Harken, the largest stock position and seat on its board was acquired by Harvard Management Co. The oil and gas, real estate and private equity portion of Harvard Endowment also acquired. Warren Buffet's position in NHP, one of the largest owners of HUD Section 8 subsidized properties in 1989.

      Then the Hamilton Securities initiated HUD loan sales were slowed down and cancelled, and, of course, Harvard's capital gains were ensured through an IPO of NHP and through a sale to AIMCO.

      The Harken Board gave the Junior Bush $600,000 worth of company stock, plus a seat on the board, plus a consultancy worth $120,000 a year -- despite suffering losses of more than $12 million dollars against revenues of $1 billion in 1989.

      In 1987 when creditors were threatening to foreclose, the Junior Bush himself made a trip to Arkansas to meet criminal-banking kingpin Jackson Stephens, whose Stephens Inc. arranged financing for the faltering Harken Energy from a subsidiary of the Unon Bank of Switzerland (UBS). Stephens Inc, of course, had ties to the notorious CIA money laundry bank, the Bank of Credit and Commerce International (BCCI), where drug trafficking and arms-smuggling profits mingled freely with looted S&L and fraud-scam proceeds.

      Then 1990 Bahrain awarded an exclusive drilling rights contract to Harken and the Bass brothers added more equity to the deal. Six months later George Bush Jr. sold off 212,140 shares grossing him $848,560.

      When Saddam Hussein invaded Kuwait the Harken stock dropped suddenly. The SEC was not notified, and no action for insider trading was taken against the Junior Bush. Why? SEC chairman Richard Breeden was a faithful Bush loyalist.

      Today Eisenson, formerly one of the lead investors in NHP and Harken and one of the primary portfolio managers of Harvard Management, runs a private equity portfolio called Charlesbank Capital Partners LLC, Boston which manages $1.4 billion in real estate investments for the Harvard Endowment.

      One of the partners of a company doing business with NHP, Scott Nordheimer actually admitted to Fitts in June 1996 -- "We tried to get you fired through the White House and that didn't work. So now the Big Boys got together, and you're going to jail." Shortly thereafter the qui tam lawsuit with the bogus whistle-blower charges was filed against Hamilton.

      In this complicated story, there's another part of the puzzle which needs exposure. The Hamilton Bushwhack involved Cargill personnel falsely accusing the following companies of financial improprieties: Hamilton Securities, as well as investment bankers Goldman Sachs and Black Rock Financial, a subsidiary of PNC.

      Goldman Sachs has been touted as one of the largest contributors to the Democratic National Committee and the Clinton-Gore Presidential Campaign.

      Was the Hamilton Bushwhack just another outward sign of a covert power struggle? Because of its implications, it had the potential to lead to Clinton's impeachment on serious fund raising violations -- a much more significant charge than the Monica Lewinsky Sexcapades used in the Ken Starr Coverup.

More Spooky Harvard Connections

      The key to the mystery of the Hamilton Bushwhack may ultimately be found in the relationship between 1) government guaranteed/insured mortgages, 2) asset seizure/forfeitures, and 3) the private companies whose profits derive from an inside track with both government programs.

      More lucrative than mere corporate subsidies, there are entire segments of mega-business which depend on these government insider deals.

      For example, besides Harvard, the other primary investor in apartment management company NHP was Capricorn Investments and Herbert S. "Pug" Winokur, Jr.

      Winokur, former Executive Vice President and Director of Penn Central Corp, CEO of Capricorn Holdings Inc. and managing partner of three Capricorn Investors Limited Partnerships, is one of those insiders who may have benefited from the outrageous assault on Hamilton's open bid auction for defaulted HUD mortgages.

      Not incidentally, from 1988 to 1997, because of his large investments, Winokur was also the Chairman and CEO of DynCorp, a US government contractor whose customers include Department of Defense, NASA, Department of State, EPA, Center for Disease Control, National Institute of Health, the US Postal Service and other US Government agencies.

      Most importantly, according to SEC registration documents (S-1), DynCorp is the prime servicer on the Department of Justice Asset Forfeiture Fund, having procured a five year contract with the Department of Justice worth $217 million from 1993 to 1998. This 1000 person contract required staffing at over 300 locations in the US and involved support of DoJ's drug-related asset seizure program. According to SEC documents, DynCorp's personnel supports "US Attorney Offices that are responsible for administering the federal asset forfeiture laws."

      In other words, DynCorp could have profited first from a successful seizure of HUD loan sales. Then, DynCorp could have also profited from HUD "Operation Safe Home" seizures, which target low-income tenants, mortgage holders and apartment owners. And, since the company has the expertise and personnel, DynCorp could also have targeted these communities with private surveillance teams and non-lethal weapons to effect asset seizures using the phoney War on Drugs as a rationale.

      By all accounts, there is at least a major conflict of interest in Winokur's investments in HUD low income housing and his role in Department of Justice seizures.

      Imagine -- if you're Winokur, you can make money on defaulted HUD mortgages, guaranteed by US taxpayers, as well as by kicking out low-income housing tenants because of drug-related "asset seizures." The criminal-corporate-government scams don't get any better.

      In the case of Hamilton's open-bid auction process on defaulted HUD mortgages, the potential $4.7 billion seizure of HUD loan sales would have been a major plum for DynCorp as the prime servicer of the DoJ Asset Forfeiture Fund.

      By the way, Winokur also had the "foresight" not to board the ill-fated flight to war-torn Yugoslavia, which took Secretary of Commerce Ron Brown's life.

      There are other spooky connections. According to Newsweek (Feb. 15, 1999), Reston, Virginia based DynCorp is a $1.3 billion firm, which also trains police in Haiti and works on coca eradication in Colombia, where three of its American pilots have died since 1997.

      Reliable sources allege this shadowy outfit may be a CIA-military proprietary, in other words, a privatized entity useful for "plausible deniability." At any rate, it also provides "Yankee Mercenaries" for the Colombian campaign against drug trafficking. Employing about 30 US Vietnam War veterans, DynCorp has a $600 million contract to run and maintain the planes and helicopters used in "anti-drug" efforts in Peru, Bolivia and Colombia, according to the World Press Review (Nov. 1, 1998).

      Postscript: Who says (corporate) crime doesn't pay? According to the Harvard University Gazette, in June 2000, Herbert S. Winokur Jr. was named to join the seven-member Harvard Corporation, the University's executive governing board.

Doing Business with the Feds

      Imagine having to wait more than 4 years to get paid on an invoice.

      For more than $2 million.

      From the US Government.

      That, in short, is what happened to Hamilton Securities.

      Doing business with the US Federal Government should come with a warning label.

WARNING: Saving money for the taxpayers can be hazardous to your health.

      "HUD is withholding about $2 million of funds owed to Hamilton for services performed for HUD," says Hamilton's President Catherine Austin Fitts. "We also understand that this with-holding is at the request of the Justice Department and the HUD Investigator General."

      "As the lead investment banker on $10 billion of loan sales, we have been able to preserve the integrity of these transactions. We intend to take whatever steps necessary to recover our shareholders" and employees value as we have done for the US taxpayers. The unsealing of the qui tam lawsuit should free HUD to meet its outstanding contractual obligations to Hamilton as quickly as possible."

Toward a Positive Future

      And what is Catherine Austin Fitts doing now?

      Besides trying to recover her life, she's moving ahead with her new company called Solari Inc., and her vision, the Solari Investment Model, community-based programs for local equity building and investment.

      "Solari is an investment advisory service, which plans to re engineer investment and financial structures at a local level, so that new technology can be integrated into communities to increase jobs and ownership," says Fitts.

      "Over the last ten years, we have prototyped a substantial number of transactions, venture capital and portfolio strategy to determine the ideal way to refinance communities in the stock market," she continues. "Our intention is to create a fund which can finance local development -- and maintain local control -- through an investment model geared for breakthrough transformations with individual, organizational and community change."

      Her far-reaching vision is an inspiration. "By creating one or two Solari Stock Corporations (one for real estate and one for venture capital) through a community offering, and swapping non-voting stock for outstanding debt," says Fitts, "the community can lower short term debt service and realign interests between numerous constituents who can be positioned in a win-win financial model."

      The problem, in one sense, is simple. The old model -- the Soviet-inspired centralized command & control system which rules Washington, its agencies and the beltway bandits feeding at the trough of corporate subsidies -- must give way to the new paradigm of the neighborhood investment model. It's a foregone conclusion: the corrupt system which guarantees profits to insiders will be swept into the ashcan of history, just as the Soviet Union and its proxies' brand of communism has been discredited forever. It's just a matter of time.

      In the end -- by building an alignment between spirituality and the material world -- Catherine Austin Fitts believes that "everyone can prosper through actions which integrate our spiritual principles in the material world in which we live and work."

      For more information of the Solari Model of Investment and community-based profitability, click on http://www.solari.com.

Copyright 2000 Uri Dowbenko.
All Rights Reserved.

Uri Dowbenko can be reached by e-mail at u.dowbenko@mailcity.com

This aricle is included in the new book
by Uri Dowbenko
"Bushwhacked: Inside Stories of True Conspiracy"
Available Now  (Click here for more information)

Part 1  |  Part 2

Main Page

Know Better.  Read Conspiracy Digest


©2000 Conspiracy Digest   All Rights Reserved