Economic Terrorism: The Bush Bust-Out

[Octafish]

Is it history
when something done to us in the past
hurts us in the present?



From way back in 2008:

The Bush Bust-Out, Cont’d

The Opinion Mill
NEWS AND VIEWS FOR THINKING PATRIOTS
March 7, 2008

Thanks to John Cole, I see that while the Republicans try to gin up outrage over whether Barack Obama wears a flag pin on his lapel, one of their favorite politically connected firms, Kellogg Brown & Root, is hard at work patriotically vampirizing the U.S. economy:

More than 21,000 people working for KBR in Iraq - including about 10,500 Americans - are listed as employees of two companies that exist in a computer file on the fourth floor of a building on a palm-studded boulevard here in the Caribbean. Neither company has an office or phone number in the Cayman Islands.

The Defense Department has known since at least 2004 that KBR was avoiding taxes by declaring its American workers as employees of Cayman Islands shell companies, and officials said the move allowed KBR to perform the work more cheaply, saving Defense dollars.

But the use of the loophole results in a significantly greater loss of revenue to the government as a whole, particularly to the Social Security and Medicare trust funds. And the creation of shell companies in places such as the Cayman Islands to avoid taxes has long been attacked by members of Congress.

A Globe survey found that the practice is unusual enough that only one other ma jor contractor in Iraq said it does something similar.

“Failing to contribute to Social Security and Medicare thousands of times over isn’t shielding the taxpayers they claim to protect, it’s costing our citizens in the name of short-term corporate greed,” said Senator John F. Kerry, a Massachusetts Democrat on the Senate Finance Committee who has introduced legislation to close loopholes for companies registering overseas.

With an estimated $16 billion in contracts, KBR is by far the largest contractor in Iraq, with eight times the work of its nearest competitor.

The no-bid contract it received in 2002 to rebuild Iraq’s oil infrastructure and a multibillion-dollar contract to provide support services to troops have long drawn scrutiny because Vice President Dick Cheney was Halliburton’s chief executive from 1995 until he joined the Republican ticket with President Bush in 2000.

I’ve said it before and I’ll keep saying it: the actions of the Bush administration make no sense except when viewed in terms of a “bust-out” — that venerable con in which crooks flim-flam their way into getting access to a company’s name and credit lines, then max out the credit lines with bulk purchases of easily disposable items that can be sold at a fraction of their value. The con-men then walk away, leaving the creditors to get what they can from the hollowed-out shell of what was once a functioning, productive business.

Virtually everything Bush and his cronies have done reinforces the view that the past seven years have been a colossal bust-out. The Iraq invasion was never once conducted in a manner that would suggest Bush believed his own guff about weapons of mass destruction; the “War on Terror” has never been conducted in a way that would suggest it was anything but a means to cow critics and expand presidential power in ways that would make it easier to bust open the cash registers, clear the shelves and empty the bank vault. Five years after its formation the Department of Homeland Security is simply an enormous ATM for contractors, with none of its ostensible goals accomplished.

What makes this bust-out even more disgusting than its low-level sewer rat incarnations is its ideologically self-reinforcing nature. Bush conservatives get to “prove” government doesn’t work by filling government jobes with Bush cronies uninterested in anything except suckling at the federal sugar tit. Bush contractors get to cheat the government out of Social Security payments, while Bush himself delivers speeches about how financially untenable the Social Security program has become. Of course government doesn’t work — conservatives are too busy working the government.

http://theopinionmill.wordpress.com/2008/03/07/the-bush-bust-out-contd/

That was a year ago. We wuzz warned.
And We the People's representatives didn't do boo.



They must think We're some kind of nuts.

[G_j]

1. KBR

so many crooks, while so many work their lives away to pay the crooks.

[Octafish]

5. Bust-out king reveals secrets to a successful scam

(Sung to the tune of Queen's "We Are the Champions":)

We are the Chumpions -- just mopes.

Bust-out king reveals secrets to a successful scam.

By Naff, Kevin C.
Publication: Business Credit
Date: Sunday, January 1 1995

EXCERPT...

Forman, 54, admits he has no idea where the term "bust-out" originated, but he certainly understands its meaning. A bust-out is a planned bankruptcy or insolvency, often of a phony company that sells merchandise from other companies. By first placing small orders with suppliers, the bust-out artist gradually gains the trust of creditors and eventually works up to larger orders. By selling the products at discounts of 25 percent or more, the bust-out artist can pay for smaller orders until the time is right for the bust-out. Because creditors do not expect payment for 30 to 90 days, the bust-out artist can order and receive bulk shipments without paying right away. And when creditors finally run out of patience, the bust-out artist files for bankruptcy or disappears.

From the early 1970s until his arrest in 1985, Forman mastered the bust-out. In all, his crimes cost creditors about $40 million, averaging $1 to $4 million per bust-out. At the time of his arrest, he was managing bust-outs in Pittsburgh, Rochester, Long Island, and Ft. Lauderdale. By Thanksgiving of 1985, all four operations were in high gear with products coming in by the trailer load.

"All things have a beginning and an end," Forman said. "I really do believe that if I wasn't caught, those four bust-outs were going to be my last."

With creditors, FBI investigators, and the U.S. Postal Service trailing him, Forman was finally arrested and convicted of mail fraud and interstate transportation of stolen property and sentenced to 17 years in prison. He served six of those years and was released in 1991.

How He Did It

According to Forman, there are six necessary components to a good bust-out:

1. capital, preferably $100,000 or more; 2. a capable front man; 3. good location from which to receive and ship merchandise; 4. equipment; 5. financial statement; 6. and a corporation.

CONTINUED...

http://www.allbusiness.com/business-finance/business-loans-business-credit/485018-1.html

Gee. That all sounds familiar. Why Lou Dobbs doesn't get it is a puzzler, though.

It's no joke, we've become the United Slaves of America. Thanks for giving a damn about justice, G_j!

[malaise]

2. These crooks didn't merely loot the treasury

They robbed citizens of several countries of their homes, savings and pension funds.
Bushco was the biggest criminal enterprise in history.

[Octafish]

6. They're still in operation.

Thanks, malaise! You are correct, my Friend. If I might add: they are the biggest CONTINUING criminal enterprise in history.

The Bush Family: A Continuing Criminal Enterprise?

Gary W. Potter, PhD.
Professor, Criminal Justice
Eastern Kentucky University

The S&Ls, the Mob and the Bushs

During the 1980's hundred of Savings and Loan Banks failed. Those bank failures cost U.S. taxpayers over $500 billion to cover federally insured losses, and much more to investigate the bank failures (Pizzo, Fricker, and Muolo, 1989; Brewton, 1992; Johnston, 1990). More than 75% of the Savings and Loan insolvencies where directly linked to serious and often criminal misconduct by senior financial insiders (Pizzo, Fricker and Muolo, 1989: 305). In fact, less than 10 percent of bank failures are related to economic conditions, the rest are caused by mismanagement or criminal conduct (Pizzo, Fricker and Muolo, 1989: 305).

A good example of the Savings and Loan failures can be found in the activities of Mario Renda, a Savings and Loan insider who often worked in close collaboration with organized crime (Pizzo, Fricker and Muolo, 1989: 123-126;302). Renda served as a middle man in arranging about $5 billion a year in deposits into 130 Savings and Loans, all of which failed (Kwitny, 1992: 27). Many of these deposits were made contingent on an agreement that the Savings and Loan involved would lend money to borrowers recommended by Renda, many of whom were organized crime figures or people entirely unknown to the banking institution involved (Kwitny, 1992: 27).

Equally good examples of financial misconduct in the Savings and Loan scandal is found in the activities of the Bush family. In some cases Bush family members helped skim Savings and Loan funds which were delivered to outsiders as a part of deals involving lucrative payoffs to bank directors. In other cases, members of the Bush family intervened to influence decisions involving highly speculative and unsound investments involving loans that would not be repaid if the venture was not profitable. And finally, the Bush family’s political connection served to protect those guilty of misconduct in the Savings and Loan scandal (Kwitny, 1992: 24).

SNIP...

Jeb Bush: Influence Peddling for a “Bust-Out” Scam

But, Neil Bush was not the only Bush brother involved in the Savings and Loan collapses. Jeb Bush’s, the current Governor of Florida, curious relationship with Miguel Recarey is another illustration. Recarey was a long-time business associate of Tampa organized crime figure Santos Trafficante. Recarey also fled the U.S. facing three separate indictments for labor racketeering, illegal wiretapping and Medicare fraud (Freedburg, 1988: A1). Recarey’s business, International Medical Centers, was the largest health maintenance organization for the elderly in the U.S. and had been supported from $1 billion in payments from the Medicare program. International Medical Centers went bankrupt in 1988 (Freedburg, 1988: A1; Royce and Shaw, 1988: 4). When International Medical Centers went under it left $222 million in unpaid bills and was under investigation for $100 million in Medicare fraud (Freedbrug, 1988: A1; Frisby, 1992: G1). The U.S. Office of Labor Racketeering in Miami referred to Recarey and his company as “the classic case of embezzlement of government funds ... “a bust-out operation” (Freedburg, 1988: A1)

Jeb Bush’s role in this saga being in 1985 when Recarey’s attempt to create his “bust-out scam” corporation ran into a federal regulation that said no HMO could get more that 50% of its revenue from Medicare (Freedburg, 1988: A1; Royce and Shaw, 1988: 4). Jeb Bush intervened on Recarey’s behalf with Helath Human Services Secretary Margaret Heckler and one of her top aides. Convincing them to waive the regulation in the case of Recarey’s company (Freedburg, 1988: A1; Royce and Shaw, 1988: 4). In addition to Jeb Bush’s intervention, Recarey had paid $1 million to senior Republican lobbyists in Washington, who were also working the staff of Health and Human Services in pursuance of a waiver (Freedburg, 1988: A1; Royce and Shaw, 1988: 4). In addition, Jeb Bush had contacted Secretary Heckler earlier about complaints from doctors over the quality of International Medical Centers’ care and allegations that Recarey had embezzled funds form another hospital (Royce and Shaw, 1988: 4). Jeb Bush told an aide to Secretary Heckler that “contrary to any rumors that were floating around concerning Mr. Recarey, that he was a solid citizen from Mr. Bush’s perspective down there , that he was a good community citizen and a good supporter of the Republican Party” (Royce and Shaw, 1988: 4).

Not surprisingly, in 1988 Recarey’s company gave Jeb Bush’s real estate company $75,000 to help it find a site for a new corporate headquarters (Freedburg, 1988: A1; Royce and Shaw, 1988: 4). It was a bad investment because International Medical Centers had already selected a corporate headquarters location when it hired Jeb Bush (Royce and Shaw, 1988: 4).

Jeb Bush had a role in yet another Savings and Loan fiasco when he defaulted on a loan from Broward Federal Savings and Loan (LaFraniere , 1990: A24). Broward Federal loaned $4,565.000 to J Edward Houston, a real developer in February, 1985. The loan was secured only by Houston’s personal guarantee. On the same day, one of Houston’s company lent the same amount to a partnership made up of Jeb Bush and Armondo Codina for the purpose of purchasing a building in Miami. The Bush-Condina partnership was required to repay the loan only if revenues from the building were sufficient to cover the repayment. Bush and Condina made no payments on the loan at all and in 1987 Houston defaulted on the Broward Federal loan and the Bank sued both Houston and the Bush-Condina real estate partnership. In a sweetheart settlement with the Federal Deposit Insurance Corporation, Bush and Codina only had to repay $500,000 of the $4.5 million loan and got to retain ownership of the building which had been the collateral on the loan. In 1991, the FDIC sued the officers and directors of Broward Federal charging that the loan ultimately used by Bush and Codina was an example of the bank’s negleient lending practices (Frisby, 1992: G1). The Bush-Codina loan played a key part in the failure of Broward Federal which cost taxpayers $285 million (LaFraniere , 1990: A24).

CONTINUED (must-read, copy, distribute, IMO) ...

http://www.critcrim.org/critpapers/potter.htm

Not even Ian Fleming dared dream that one day, crooks would hijack the government of the United States. Unless We the People demand their prosecution, they'll wait out Obama and do their damndest to delay whatever Justice Holder can mete out.

[MagickMuffin]

3. John Kerry has been on to the Bushies for a very very long time

Why do you think they had to steal yet another (S)election!

They know that Kerry knows where the skeletons are buried, and the Bush Crime Family knows how to shelter their behavior from ever seeing the light of day.


Thanks Octafish, once again you are a great reminder of the BFEE.

:kick: & RRRRRR ............. Off to the GREATEST

[Octafish]

7. CIA - Can't Investigate Anybody

The Bushes are masters of plausible deniability. Notice how everything they're involved in -- even when caught red-handed -- draws defenders from the woodwork. When their financial and fiscal shenanigans end up in court, they hide behind a facade of "national security" and the case against them gets tossed. Nice scam, that.

Narco-Dollars for Beginners

"How the Money Works" in the Illicit Drug Trade

by Catherine Austin Fitts
Special to the Narco News Bulletin
2001

EXCERPT...

A Real World Example:
NYSE's Richard Grasso and the Ultimate New Business "Cold Call"

Lest you think my comment about the New York Stock Exchange is too strong, let's look at one event that occurred before our "war on drugs" went into high gear through Plan Colombia, banging heads over narco dollar market share in Latin America.

In late June 1999, numerous news services, including Associated Press, reported that Richard Grasso, Chairman of the New York Stock Exchange flew to Colombia to meet with a spokesperson for Raul Reyes of the Revolutionary Armed Forces of Columbia (FARC), the supposed "narco terrorists" with whom we are now at war.

The purpose of the trip was "to bring a message of cooperation from U.S. financial services" and to discuss foreign investment and the future role of U.S. businesses in Colombia.

Some reading in between the lines said to me that Grasso's mission related to the continued circulation of cocaine capital through the US financial system. FARC, the Colombian rebels, were circulating their profits back into local development without the assistance of the American banking and investment system. Worse yet for the outlook for the US stock market's strength from $500 billion -- $1 trillion in annual money laundering -- FARC was calling for the decriminalization of cocaine.

To understand the threat of decriminalization of the drug trade, just go back to your Sam and Dave estimate and recalculate the numbers given what decriminalization does to drive BIG PERCENT back to SLIM PERCENT and what that means to Wall Street and Washington's cash flows. No narco dollars, no reinvestment into the stock markets, no campaign contributions.

It was only a few days after Grasso's trip that BBC News reported a General Accounting Office (GAO) report to Congress as saying: "Colombia's cocaine and heroin production is set to rise by as much as 50 percent as the U.S. backed drug war flounders, due largely to the growing strength of Marxist rebels"

I deduced from this incident that the liquidity of the NY Stock Exchange was sufficiently dependent on high margin cocaine profits (BIG PERCENT) that the Chairman of the New York Stock Exchange was willing for Associated Press to acknowledge he is making "cold calls" in rebel controlled peace zones in Colombian villages. "Cold calls" is what we used to call new business visits we would pay to people we had not yet done business with when I was on Wall Street.

I presume Grasso's trip was not successful in turning the cash flow tide. Hence, Plan Colombia is proceeding apace to try to move narco deposits out of FARC's control and back to the control of our traditional allies and, even if that does not work, to move Citibank's market share and that of the other large US banks and financial institutions steadily up in Latin America.

CONTINUED...

http://www.ratical.org/co-globalize/narcoDollars.html

Even without a free press, America is on to their gangster asses. Thank you for giving a damn and doing all you do, MagickMuffin, to spread the truth and fight these bed-wetting so-and-sos.

[formercia]

4. They say the best way to rob a bank is to own one.

The best way to commit Insurance fraud is to own an insurance company.

You create the scam and insure it with bogus policies then pass laws to make sure the policies get paid by the taxpayer, no matter what.

[Octafish]

8. Thus, the best way to rob a Treasury is to govern a country.

And that is what has happened to the United States.

Control Fraud

Lars Christian Smith
Conservation Finance

James Galbraith mentions in a comment the very useful concept of “control fraud” introduced by William K. Black, see e.g. When Fragile becomes Friable: Endemic Control Fraud as a Cause of Economic Stagnation and Collapse (pdf),

Individual “control frauds” cause greater losses than all other forms of property crime combined. They are financial super-predators. Control frauds are crimes led by the head of state or CEO that use the nation or company as a fraud vehicle. Waves of “control fraud” can cause economic collapses, damage and discredit key institutions vital to good political governance, and erode trust…

Economic theory about fraud is underdeveloped, core neo-classical theories imply that major frauds are trivial, economists are not taught about fraud and fraud mechanisms, and neo-classical economists minimize the incidence and importance of fraud for reasons of self-interest, class and ideology.

Neo-classical economics’ understanding of fraud is so weak that its policy prescriptions, if adopted wholly, produce strongly criminogenic environments that cause waves of control fraud. Neo-classical policies simultaneously make control fraud easier and more lucrative, dramatically reduce the risk of detection and prosecution by maximizing “systems capacity” problems, and encourage crime by making it easier for fraudsters to “neutralize” the social and psychological constraints against deceit and fraud. Thus the paradox: neo-classical economic triumphs produce tragedy…

William K. Black is also the author of the book The Best Way to Rob a Bank Is to Own One.

SOURCE: http://conservationfinance.wordpress.com/2007/03/06/control-fraud

Here's why crooks should never be allowed to be above the law. The end result is a nation bankrupted from within -- the ultimate bust-out.

[formercia]

9. Amen, brother

The Third World has nothing on US.

[leftchick]

11. you know what is so sad to me

my family, my children really do not have a decent future. Perhaps we never did. It was all an illusion.

:cry:

[formercia]

12. From American Dream to American Nightmare

We were just a crop to them. They let us grow, build up our assets and then it was time for the harvest.

They used to do this to Jews in the old days, but now, even the Gentiles are fair game.

[formercia]

10. Bush Family Control Fraud

http://journals.democraticunderground.com/formercia/241

This will bake your noodle: The Bush-AIG connection.
Posted by formercia in General Discussion
Sat Mar 21st 2009, 10:02 AM
http://www.uniset.ca/lloydata/pravda_engfo...

"The central charge against AIG and its offshore subsidiaries like Coral Reinsurance is that they were used to offset bogus losses in the same manner that Enron did. And, of course, there are numerous Bush connections in this. AIG used its offshore subsidiary, Coral Reinsurance, to issue, or to resell bogus reinsurance policies to Swiss Re
That was the real connection. And it's what put Swiss Re into trouble. Swiss Re is the biggest reinsurer on the planet."

"Reinsurance is simply excess and surplus insurance called E&S excess and surplus. They purposely would underestimate the risk in writing AIG's original policies in order to be able to steal the bids from everybody else. They would purposely underbid. Then they would go to their offshore subsidiary Coral, which was a reinsurance company and get Coral to sell a reinsurance policy on a contract on insurance policy or contract or fidelity instrument or guaranty instrument, etc. They would get Coral to write a reinsurance policy and get Swiss Re to buy it. But it wasn't worth anything because they had underbid the original insurance contract. So the reinsurance contract effectively wasn't worth anything.

--snip--

"The Bush connection into all this is that they controlled a variety of insurance companies, National Heritage Life, for instance. The Bush family also controlled Cardinal Life and Kentucky Life. What they kept doing is underbidding,underbidding, underbidding, purposely giving out cheap quotes that the companies themselves didn't have the reserves to back. They would then purchase from Coral a reinsurance guaranty, a fidelity and guaranty instrument that was completely bogus. It wasn't worth anything because they had so severely underestimated the potential liabilities. The actuarial tables they used didn't make any sense. When National Heritage or Century or Cardinal sold insurance policy, they would make assumptions that, for instance, in 30 years the median life span was going to be 110. Using an actuarial table that was Bushonian fantasy, they would come up with an estimated value of a policy over time that wasn't worth anywhere near what they claimed.

--snip--

[annabanana]

13. Why didn't more people recognize this earlier?

An example of a "bust out" was on TV just as the real crime was getting underway!


an old post of mine:

A question for businessmen & Soprano fans..
Posted by annabanana in General Discussion
Sat Nov 25th 2006, 09:41 AM
There was a story arch, early in the Soprano saga, that entailed the "busting out" of a sporting goods store. The victim was deep in hock, the mob took over the store, made him borrow on all his assets, and liquidated all his merchandise, leaving him broke, in trouble with his legitimate debtors, homeless and alone.

I feel that this is what the administration, with the help of the Repub leadership in Congress, has done to what was the Government of the United States.

[spanone]

14. funny, no outrage for the billions pissed away and stolen in iraq....or, not funny really