- Professional Investor?
- Favorite Stock Tickers
- About me
- I'm an undergrad student in honors math.
- Profile Video
- My Profile Video
- Member since
- Tuesday, 06 July 2010 03:43
- Last online
- 76 days ago
- Profile views
- 42122 views
The names of nearly three-quarters of a million individuals have been secretly added to watch lists administered by the United States government, but federal officials are adamant about keeping information about these rosters under wraps.
A report by the New York Times’ Susan Stellin published over the weekend attempted to shine much-deserved light on an otherwise largely unexposed program of federal watch lists, but details about these directories — including the names of individuals on them and what they did to get there — remain as elusive as ever.
More than 12 years after the terrorist attacks of September 11, 2001, federal agencies continue to keep lists on hand containing names of individuals of interest: people who often end up un-cleared to enter or exit the US due to an array of activity that could be considered suspicious or terrorist-related to government officials.
In 2008, the American Civil Liberties Union claimed that an Inspector General of the Department of Justice report found at least 700,000 individual names on the database maintained by the Terrorist Screening Center, the Federal Bureau of Investigation sub-office tasked with overseeing the “single database of identifying information about those known or reasonably suspected of being involved in terrorist activity.” Five years later, that number of suspicious persons is reportedly close to what it was at the time. Half-a-decade down the road, however, Americans and foreign nationals who end up on the government’s radar are offered little chance to find out how they ended there, or even file an appeal.
According to some, that’s just the start of what’s wrong with these lists.
“If you’ve done the paperwork correctly, then you can effectively enter someone onto the watch list,” SUNY Buffalo Law School associate professor Anya Bernstein told Stellin for this weekend’s report. What’s more, though, according to Bernstein, is that “There’s no indication that agencies undertake any kind of regular retrospective review to assess how good they are at predicting the conduct they’re targeting,” suggesting that anyone can be targeted and added to such a list with little oversight to protect them.
“When you have a huge list of people who are likely to commit terrorist acts, it’s easy to think that terrorism is a really big problem and we should be devoting a lot of resources to fighting it,” Bernstein added. With almost no transparency and outrages aplenty, though, she argues that the government’s watch lists are largely flawed and can erroneously ruin an innocent person’s life.
Such is the case with Rahinah Ibrahim, 48-year-old a former Standard University doctoral student who was expected to be in federal court in San Francisco, California Monday morning for the latest hearing in a case that stems from an incident in 2005 that ended with her learning she had been added to a terrorist watch list. Ibrahim was attempting to board a Hawaii-bound plane from San Francisco International Airport in traditional Muslim garb when she was taken into custody and told she had landed herself on a terrorist watch list. Nearly a decade later Ibrahim continues to disavow any connections with terrorism, but the issues surrounding the watch list program has made it seemingly impossible to find out what she did, let alone have her name removed from the list.
“We’ve tried to get discovery into whether our client has been surveilled and have been shut down on that,” Elizabeth Pipkin, a lawyer representing Ms. Ibrahim, added to the Times. “They won’t answer that question for us.”
"She doesn't want this to happen to other people -- to be wrongfully included on these lists that haunt them for years and years," Pipkin said recently to Northern California’s Mercury News.
"No one knows how the targets get on the lists," she said. "The government has never contested this case on the merits. We don't think they have a defense."
But with Monday’s hearing coming nearly a decade after Ibrahim first found herself in trouble, the likelihood of any reform coming soon to the watch list system seems slim-to-none. ACLU lawyer Hina Shamsi even told the Times that the system keeping the watch lists in tact seems to be more flawed than the one guarding over terrorist suspects held at America’s military prison at Guantanamo Bay, Cuba.
“People who are accused of being enemy combatants at Guantánamo have the ability to challenge their detention, however imperfect that now is,” Shamsi told Stellin. “It makes no sense that people who have not actually been accused of any wrongdoing can’t challenge.”
A Terrorist Screening Center official reached for comment by the Times claimed that fewer than one percent of those listed on such rosters are US citizens or legal permanent residents, but as Stellin points out, “there is no way to confirm that number.”
While the rest of the government prepared to shut down this fall, the State Department was busy stocking up on embassy liquor supplies.
In September, the final month of the fiscal year, the State Department spent about $180,000 — and racked up a total of more than $400,000 for the whole year, three times the entire liquor tab for all of 2008.
The liquor bill, split among purchase orders placed at embassies around the world, included some major last-minute pre-shutdown splurges:
• $5,625 in “gratuity wine” at the embassy in Rio de Janeiro on Sept. 29, followed by $5,925 in “gratuity whiskey” on the day the shutdown began.
• $22,416 in wine at the embassy in Tokyo.
**FILE** Bottles of alcohol are seen lining the shelves of a liquor store Aug. 31, 2009, in Springfield, Ill. (Associated Press)
• $15,900 in bourbon and whiskey in Moscow.
U.S. embassies have long served alcohol at diplomatic events under Democratic and Republican administrations alike — and in good economic times as well as bad.
But the booze bill has risen sharply each year since 2008, according to the federal government’s procurement database, which includes a specific code enabling the public to track alcoholic beverage purchase orders.
Those records show the State Department bought $415,000 worth of alcohol in fiscal 2012, which was 25 percent more than the $331,000 spent in 2011 and more than triple the $118,000 spent in 2008.
Saving a few hundred thousand dollars won’t do much to reduce the government’s $17 trillion debt, but any increase in taxpayer dollars spent on wine and whiskey deserves closer scrutiny in tough fiscal times, said Dave Williams, president of the nonprofit Taxpayers Protection Alliance, a watchdog group.
The department went on a buying binge just before the partial federal government shutdown and in the final days of the fiscal year, when many federal agencies try to spend all of the money in their budgets or risk exposing areas for congressional cuts.
“This is what taxpayers don’t understand,” Mr. Williams said. “You have a looming government shutdown but then you have a ‘use-it-or-lose-it’ mentality where someone is spending tens of thousands of dollars because they have to.
“If you’re a family or a business and you’re getting ready for a potential loss of revenue, the first thing you do is get rid of the parties,” he said. “It’s symbolic.”
In a statement to The Times, a State Department representative said “it would be an oversimplification to look at a subset of purchases made by embassies overseas and draw a conclusion about the department’s operational priorities at the time.”
Officials also said, as they did in 2010 when The Times inquired about a sharp increase in alcohol spending, that funds are spent for representational purposes.
Rep. Doug Lamborn (R-CO-5th district)
Rep. Jeff Duncan (R-SC-3rd district)
Rep. Kevin Cramer (R-ND-at large)
Federal Lands Jobs and Energy Security Act (H.R. 1965; 113th Congress)
The Federal Lands Jobs and Energy Security Act (H.R. 1965) is a bill that would require the Bureau of Land Management (BLM) to establish certain fees for activities related to the development of oil and gas on federal lands.
The bill would require the Secretary to collect a $5,000 documentation fee to accompany each protest for a lease, right of way, or application for permit to drill.
Romania riot police clear protesters
PUNGESTI - Hundreds of Romanian riot police armed with batons early on Monday forcibly removed some 100 villagers who had been camping out for weeks in protest of Chevron's plans to drill for shale gas, witnesses said.
The residents of Pungesti in northeastern Romania had set up a protest camp in a privately-owned field next to the site where the US energy giant plans to drill its first exploration well.
"The police arrived, they beat us and dragged us away," said one of the villagers, Elena Privac.
"They forced us out of the camp we had set up and blocked the road, not even school buses are allowed to pass," she added.
Journalists were stopped from going near the scene and the police were not available for comment.
Around 1,000 riot police were involved in the operation, while the police put the number at 300.
The owner of the field where the villagers had been camping out for more than six weeks had agreed to the protest.
Chevron suspended activities in the region after the start of the protests in October and instead launched a door-to-door information campaign about its plans.
Villagers are afraid of the environmental and health impact of the highly controversial drilling method used to unlock shale gas, called hydraulic fracturing or "fracking".
The technique consists of pumping water and chemicals at high pressure into deep rock formations to free oil and gas, with environmentalists warning the process may contaminate ground water and even cause small earthquakes.
Pungesti is one of three villages in Romania's impoverished northeast, along with the country's Black Sea coast, where Chevron has permits to explore for shale gas.
Bankster theft and Welfare abuse are equal crimes!
Lol, sorry Earl
I was hoping the 32,000 pages would get you. Being the speed reader you are.
The Kennedy's are four generations of sexist. I've never met a sexist that wasn't a racist. They got away with rape and murder for at least four generations (and counting).
Assassination- The list is endless. It's not why ?, but Why Not?..
The Irish mafia was put in it's place. There's nothing noble about Kennedy or the clan. Robert and John, fucked around and got popped.
By who? again, Why Not? Who, did they not piss off.
Irish Mafia and Italian Mafia. Bay of Pigs. Marilyn Monroe, c'mon the list goes on generation after generation. Drownings, cars over bridges, golf clubs. The list is endless.
They have a compound fifty miles from where I grew up. It's a joke.
They lobotomized there younger sister, so she wouldn't embarrass them.
Noble people, the Kennedy Clan.
Later, I may tell you were he was shot from. Not the grassy knoll. But really...
Think down, opposite from height.
Biggest Case of “Financial Engineering” in History?
Wednesday, November 27th, 2013
By Michael Lombardi, MBA for Profit Confidential
key stock indicesKey stock indices are roaring higher each day. The S&P 500 is breaking through to new records; the Dow Jones Industrial Average sits above the 16,000 level, and the NASDAQ Composite Index trades at a level not seen since the Tech Boom. Sadly, as all of this happens, the one fundamental that has historically driven stock prices higher—corporate earnings—is missing from the equation.
In these pages, I have often harped on about how companies in key stock indices are buying back their shares at a record pace. I consider this “financial engineering,” because at the very core, what a stock buyback does is make corporate earnings per share look better.
This week, my research team took a look at the Dow Jones Industrial Average companies and how many were buying back their shares. Their findings reveal 28 out of the 30 companies on the index bought back shares over the past 12 months.
From the third quarter of 2012 to the third quarter of 2013, Dow Jones Industrial Average companies collectively bought an outstanding 2.33 billion of their own shares. Effectively, they removed over two billion shares from the market!
What did these stock buybacks do to the companies’ corporate earnings?
Because of the stock buybacks, 70% of all the companies in the Dow Jones Industrial Average were able to show better per-share corporate earnings. For example, for the third quarter of this year, AT&T Inc. (NYSE/T) reported a net income of $0.72 per share, an improvement of 14.3% from the same quarter in 2012. But if AT&T didn’t reduce its share count during that period via its stock buyback program, corporate earnings per share would have been $0.66 in the third quarter of 2013, only 4.7% higher than last year. (Source: AT&T Inc. web site, last accessed November 26, 2013.)
AT&T is just one example where “financial engineering” to prop up per-share corporate earnings has been successful. There are may other cases.
But the trick of buying back stock to push per-share corporate earnings higher is running out of steam. (After all, how much stock can a company buy back before there is no stock left?) Going forward, the stage for key stock indices doesn’t look very stable. As of November 22, 89 companies on the S&P 500 have issued negative guidance about their corporate earnings for the fourth quarter. Meanwhile, only 12 have issued positive guidance. (Source: FactSet, November 22, 2013.)
If there is even a single investor out there who believes the fundamentals are no longer important—that corporate earnings growth isn’t needed for the stock market to rise—they are fooling themselves. At this point, the house of cards can fall at any time.
Songwriters: PETTY, TOM / STEWART, DAVE
By Tom Petty and David A. Stewart
We got a man on the moon (It ain't nothin' to me)
We got more comin' soon (It ain't nothin' to me)
Got natives in New Guinea with gold in their teeth
Might mean somethin' to you
It ain't nothin' to me
But when you dance I can go right with you
Yeah when you dance I just go right with you
We got smilin' politicians
Got songs from rich musicians
Called Tokyo long distance and the queen came for tea
Might mean somethin' to you
It ain't nothin' to me
I got a dog on my leg
I'm walking on eggs
Missionaries walking backwards
Touch 'em and they bleed
Might mean somethin' to you
It ain't nothin' to me
Notice also how NO FIRST NAME is used, of any kind. We don't really have (personal) identification of any kind -- merely mention of the "House" itself. Can anyone recall seeing any other family used in such a manner...?
Amazing how that works-
First, I don't want you think the topic and the day were ignored.
All you have to do is sit in a Junior High history class and you know even as a pre-teen this was all a lie.
Later in life, you speak too, competition marksmen, former snipers and they will tell you how it was done.
Then you learn about the records burned because they were "so graphic".
How people can STILL say this was the work of one man simply eludes me...
I've never met anyone who believed it. Including the History teacher. All films and no test. For myself, all it ever was, just a few films and on to civil rights. Year after year.
Gold Fix Drawing Scrutiny Amid Knowledge Tied to Eruption
By Liam Vaughan, Nicholas Larkin & Suzi Ring - Nov 26, 2013
Every business day in London, five banks meet to set the price of gold in a ritual that dates back to 1919. Now, dealers and economists say knowledge gleaned on those calls could give some traders an unfair advantage when buying and selling the precious metal.
The U.K. Financial Conduct Authority is scrutinizing how prices are set in the $20 trillion gold market, according to a person with knowledge of the review who asked not to be identified because the matter isn’t public. The London fix, the benchmark rate used by mining companies, jewelers and central banks to buy, sell and value the metal, is published twice daily after a telephone call involving Barclays Plc (BARC), Deutsche Bank AG (DBK), Bank of Nova Scotia, HSBC Holdings Plc (HSBA) and Societe Generale SA. (GLE)
Enlarge image Gold Fix Drawing Scrutiny Amid Knowledge Tied to Daily Eruption
One-kilogram bars of gold are arranged for a photograph. Photographer: Dario Pignatelli/Bloomberg
Enlarge image Barclays and HSBC Holdings Headquarters in London
The headquarters of Barclays Plc and HSBC Holdings Plc in the Canary Wharf business and financial district in London. Photographer: Chris Ratcliffe/Bloomberg
The process, during which gold is bought and sold, can take from a few minutes to more than an hour. The participants also can trade the metal and its derivatives on the spot market and exchanges during the calls. Just after the fixing begins, trading erupts in gold derivatives, according to research published in September. Four traders interviewed by Bloomberg News said that’s because dealers and their clients are using information from the talks to bet on the outcome.
“Traders involved in this price-determining process have knowledge which, even for a short time, is superior to other people’s knowledge,” said Thorsten Polleit, chief economist at Frankfurt-based precious-metals broker Degussa Goldhandel GmbH and a former economist at Barclays. “That is the great flaw of the London gold-fixing.”
The U.K. capital is the biggest center for gold trading in the world, according to the London Bullion Market Association, which said more than $33 billion changed hands there each day in 2012, exceeding the $29 billion of futures traded on Comex, the New York commodities exchange, data compiled by Bloomberg show. Financial instruments including cash-settled swaps and options are priced off the London fix, according to the LBMA website.
In private meetings this year, the U.S. Commodity Futures Trading Commission, which regulates derivatives, discussed reviewing how gold prices are set, according to a person with knowledge of the talks. The FCA review is preliminary and not a formal investigation, another person said. The people wouldn’t say what’s being looked at or if regulators suspect wrongdoing.
Participants on the London call can tell whether the price of gold is rising or falling within a minute or so, based on whether there are a large number of net buyers or sellers after the first round, according to gold traders, academics and investors interviewed by Bloomberg News. It’s this feature that could allow dealers and others in receipt of the information to bet on the direction of the market with a high degree of certainty minutes before the fix is made public, they said.
“Information trickles down from the five banks, through to their clients and finally to the broader market,” Andrew Caminschi, a lecturer at the University of Western Australia in Perth and co-author of a Sept. 2 paper on trading spikes around the London gold fix published online in the Journal of Futures Markets, said by phone. “In a world where trading advantage is measured in milliseconds, that has some value.”
Pat McFadden, an opposition Labour lawmaker who sits on Parliament’s Treasury Select Committee, said British regulators need to probe any possible abuses by dealers.
“The gold market is hugely influential, and there needs to be public trust in the gold price,” McFadden said in an interview. “Question marks have been raised about the benchmark price of gold, and it’s important that regulators investigate.”
Scrutiny of the gold market is taking place as the price of the metal has fallen 26 percent this year, heading for the first annual drop since 2000. Barrick Gold Corp. (ABX), the world’s biggest gold producer, plans to sell, close or curb production at almost half of its mines, and billionaire John Paulson’s PFR Gold Fund lost $630 million since the end of December, according to a person briefed on the returns.
The price of gold at today’s London afternoon fix was $1,247.50 an ounce, down from $1,693.75 on Jan. 2.
Regulators are looking into how benchmarks are set and governed across the financial system after five firms including Barclays and Royal Bank of Scotland Group Plc were fined a combined $3.7 billion for rigging the London interbank offered rate, or Libor. Investigators from Switzerland to Hong Kong are probing currency markets after Bloomberg News reported in June that traders communicated with each other and timed trades to influence foreign-exchange benchmarks and maximize profits.
There’s no evidence that gold dealers sought to manipulate the London fix or worked together to rig prices, as traders did with Libor. Even so, economists and academics say the way the benchmark is set is outdated, vulnerable to abuse and lacking any direct regulatory oversight.
“This is one of the most concerning fixings I have seen,” said Rosa Abrantes-Metz, a professor at New York University’s Stern School of Business whose 2008 paper, “Libor Manipulation?” helped spark a global probe. “It’s controlled by a handful of firms with a direct financial interest in where it’s set, and there is virtually no oversight -- and it’s based on information exchanged among them during undisclosed calls.”
London Gold Market Fixing Ltd., a company controlled by the five banks that administers the benchmark, has no permanent employees. A call from Bloomberg News was referred to Douglas Beadle, 68, a former Rothschild banker, who acts as a consultant to the company from his home in Caterham, a small commuter town 45 minutes south of London by train. Beadle declined to comment on the benchmark-setting process.
Spokesmen for Barclays, Deutsche Bank, HSBC and Societe Generale declined to comment about the London fix or the regulatory probes, as did Chris Hamilton, a spokesman for the FCA, and Steve Adamske at the CFTC.
Joe Konecny, a spokesman for Bank of Nova Scotia, wrote in an e-mail that the Toronto-based company has “a deeply rooted compliance culture and a drive to continually look toward ways to improve our existing processes and practices.”
Stewart Murray, chief executive officer of LBMA, which represents the gold and silver markets and publishes the results of the fix on its website, declined to comment, saying the group has “no jurisdiction or responsibility” for the process or its administration.
A spokesman for the association, Aelred Connelly, said Nov. 22 that the group is reviewing its own benchmarks to see whether they conform to guidelines set by the International Organization of Securities Commissions in July. Those include making prices based on “observable” deals where possible. The LBMA oversees gold forward offered rates, which reflect bullion borrowing costs for different durations and are used in loan agreements.
The fix dates back to September 1919, less than a year after the end of World War I, when representatives from five dealers met at Rothschild’s office on St. Swithin’s Lane in London’s financial district. It was suspended for 15 years, starting in 1939. While Rothschild pulled out in 2004 and the discussions now take place by telephone instead of in a wood-paneled room at the bank, the process remains much the same.
At the start of the call, the designated chairman -- the job rotates annually among the five banks -- gives a figure close to the current spot price in dollars for an ounce of gold. The firms then declare how many bars of the metal they wish to buy or sell at that price, based on orders from clients as well as their own account.
If there are more buyers than sellers, the starting price is raised and the process begins again. The talks continue until the buy and sell amounts are within 50 bars, or about 620 kilograms, of each other. The procedure is carried out twice a day, at 10:30 a.m. and 3 p.m. in London. Prices are set in dollars, pounds and euros. Similar gauges exist for silver, platinum and palladium.
The traders relay shifts in supply and demand to clients during the calls and take fresh orders to buy or sell as the price changes, according to the website of London Gold Market Fixing, which publishes the results of the fix.
Bank of Nova Scotia (BNS) provides clients with updates as the fixing proceeds through a page it makes available through Thomson Reuters Corp. terminals. Thomson Reuters itself only receives and publishes the official fixing price after the call has finished, said Kate Reid, a spokeswoman for the company. Konecny, the Nova Scotia spokesman, didn’t provide any details about the bank’s service. Caminschi, the University of Western Australia professor, said the information on Nova Scotia’s feed is delayed and often incomplete.
Bloomberg LP, the parent company of Bloomberg News, competes with Reuters in providing news and information as well as currency-trading systems.
David Govett, head of precious metals at Marex Spectron Group Ltd., a closely held commodity broker in London, said the benchmark gives clients an opportunity to buy or sell large amounts of gold in a single transaction anonymously, without having to turn to the futures market.
“The fix is a very efficient way of doing it,” he said. “It’s very open, it’s very transparent and it’s a good thing.”
A trader at one of the banks that sets the price defended the process, saying it’s structured to minimize opportunities to exploit the difference between the spot and fixing price of gold. He asked that neither he nor his firm be identified because he wasn’t authorized to speak publicly.
Caminschi and Richard Heaney, a professor of accounting and finance at the University of Western Australia, analyzed two of the most widely traded gold derivatives: gold futures on Comex and State Street Corp.’s SPDR Gold Trust, the largest bullion-backed exchange-traded product, from 2007 through 2012.
At 3:01 p.m., after the start of the call, trading surged to 47.8 percent above the average for the 20-minute period preceding the start of the fix and remained 20 percent higher for the next six minutes, Caminschi and Heaney found. By comparison, trading was 8.7 percent higher than the average a minute after publication of the price. The results showed a similar pattern for the SPDR Gold Trust.
“Intuitively, we expect volumes to spike following the introduction of information to the market” when the final result is published, Caminschi and Heaney wrote in “Fixing a Leaky Fixing: Short-Term Market Reactions to the London P.M. Gold Price Fixing.” “What we observe in our analysis is a clustering of trades immediately following the fixing start.”
The researchers also assessed how accurate movements in gold derivatives were in predicting the final fix. Between 2:59 p.m. and 3 p.m., the direction of futures contracts matched the direction of the fix about half the time.
From 3:01 p.m., the success rate jumped to 69.9 percent, and within five minutes it had climbed to 80 percent, Caminschi and Heaney wrote. On days when the gold price per ounce moved by more than $3, gold futures successfully predicted the outcome in more than nine out of 10 occasions.
“Not only are the trades quite accurate in predicting the fixing direction, the more money that is made by way of a larger price change, the more accurate the trade becomes,” Caminschi and Heaney wrote. “This is highly suggestive of information leaking from the fixing to these public markets.”
For derivatives traders, the benefits are clear: A dealer who bought 500 gold futures contracts at 3 p.m. and knew the fix was going higher could make $200,000 for his firm if the price moved by $4, the average move in the sample. While the value of 500 contracts totals about $60 million, traders may buy on margin, a process that involves borrowing and requires placing less capital for the bet. On a typical day, about 4,500 futures contracts are traded between 3 p.m. and 3:15 p.m., according to Caminschi and Heaney.
The trader at a fixing bank said there’s little money to be made from buying and selling gold derivatives during the process because information from the call is disseminated into the wider market so quickly. Arbitrage opportunities also are limited because the chairman will adjust the price during the call if there are moves in the spot and futures markets, he said.
Govett, at Marex Spectron, said it’s common for people to try to exploit the difference between the current price of gold derivatives and the final fix.
In terms of timing and money available from such arbitrage, “it is quite small, but you’d be amazed at the amount of people who try to do it,” said Govett, a trader for 30 years.
Abrantes-Metz, who helped Iosco formulate its guidelines, said the gold fix’s shortcomings may stretch beyond giving firms and clients access to privileged information.
“There is a huge incentive for these banks to try and influence where the benchmark is set depending on their trading positions, and there is almost no scrutiny,” she said.
Abrantes-Metz said the gold fix should be replaced with a benchmark calculated by taking a snapshot of trading in a market where $19.6 trillion of the precious metal circulated last year, according to CPM Group, a New York-based research company.
“There’s no reason why data cannot be collected from actual prices of spot gold based on floor or electronic trading,” she said. “There’s more than enough data.”
In 1969, Pete Townshend, The Who's guitarist, was the catalyst behind the formation of the band. The concept was to create a band to perform songs written by drummer and singer Speedy Keen, who had written "Armenia City in the Sky", the first track on The Who Sell Out. Townshend recruited jazz pianist Andy 'Thunderclap' Newman (a friend from art college), and 15-year-old Glaswegian guitarist Jimmy McCulloch. Keen played the drums and sang the lead.
"Something in the Air" is a song recorded by Thunderclap Newman, written by Speedy Keen who also sang the song. It was a UK #1 single for three weeks in July 1969. The song has been used for films, television and adverts, and has been covered by several artists.
Newman Thunderclap Something In The Air Lyrics
Songwriters: WINWOOD, STEVE / WINWOOD, MUFF / DAVIES, SPENCER
Call out the instigators
Because there's something in the air
We've got to get together sooner or later
Because the revolution's here, and you know it's right
And you know that it's right
We have got to get it together
We have got to get it together now
Lock up the streets and houses
Because there's something in the air
We've got to get together sooner or later
Because the revolution's here, and you know it's right
And you know that it's right
We have got to get it together
We have got to get it together now
Hand out the arms and ammo
We're going to blast our way through here
We've got to get together sooner or later
Because the revolution's here, and you know it's right
And you know that it's right
We have got to get it together
We have got to get it together now
Behind the Pentagon’s Doctored Ledgers, a Running Tally of Epic Waste
November 20th, 2013
Never forget: Trillions:
I would argue that Chalmers Johnson’s estimate was corroborated on September 10, 2001, on the eve of the worst terrorist attack in US history, when Secretary of Defense Donald Rumsfeld acknowledged during a press conference that the Department of Defense (DoD) could not account for $2.3 trillion of the massive Pentagon budget, a number so large as to be incomprehensible. Any remaining hope that the US military might still get its budgetary house in order were dashed at 9:38 am the next morning, when the west wing of the Pentagon exploded in flames and smoke, the target of a terrorist strike. Incredibly, the exact point of impact was the DoD’s accounting offices on the first floor. The surgical destruction of its records and staff, nearly all of whom died in the attack, raises important questions about who benefited from 9/11.
Reader JP notes the original source [mirror] of the $2.3 trillion figure; Secretary of Defense Donald H. Rumsfeld, The Pentagon, Monday, September 10, 2001:
According to some estimates, we cannot track $2.3 trillion in transactions.
For two decades, the U.S. military has been unable to submit to an audit, flouting federal law and concealing waste and fraud totaling billions of dollars.
A designed Pro-tracted war. With a boost to promote "Small Business".
Bless You All,
The Stoner Arms Dealers: How Two American Kids Became Big-Time Weapons Traders
And how the Pentagon later turned on them
By Guy Lawson
The e-mail confirmed it: everything was finally back on schedule after weeks of maddening, inexplicable delay. A 747 cargo plane had just lifted off from an airport in Hungary and was banking over the Black Sea toward Kyrgyzstan, some 3,000 miles to the east. After stopping to refuel there, the flight would carry on to Kabul, the capital of Afghanistan. Aboard the plane were 80 pallets loaded with nearly 5 million rounds of ammunition for AK-47s, the Soviet-era assault rifle favored by the Afghan National Army.
Reading the e-mail back in Miami Beach, David Packouz breathed a sigh of relief. The shipment was part of a $300 million contract that Packouz and his partner, Efraim Diveroli, had won from the Pentagon to arm America's allies in Afghanistan. It was May 2007, and the war was going badly. After six years of fighting, Al Qaeda remained a menace, the Taliban were resurgent, and NATO casualties were rising sharply. For the Bush administration, the ammunition was part of a desperate, last-ditch push to turn the war around before the U.S. presidential election the following year. To Packouz and Diveroli, the shipment was part of a major arms deal that promised to make them seriously rich.
Reassured by the e-mail, Packouz got into his brand-new blue Audi A4 and headed home for the evening, windows open, the stereo blasting. At 25, he wasn't exactly used to the pressures of being an international arms dealer. Only months earlier, he had been making his living as a massage therapist; his studies at the Educating Hands School of Massage had not included classes in military contracting or geopolitical brinkmanship. But Packouz hadn't been able to resist the temptation when Diveroli, his 21-year-old friend from high school, had offered to cut him in on his burgeoning arms business. Working with nothing but an Internet connection, a couple of cellphones and a steady supply of weed, the two friends — one with a few college credits, the other a high school dropout — had beaten out Fortune 500 giants like General Dynamics to score the huge arms contract. With a single deal, two stoners from Miami Beach had turned themselves into the least likely merchants of death in history.
Arriving home at the Flamingo, his sleek condo with views of the bay, Packouz packed the cone of his Volcano, a smokeless electronic bong. As the balloon inflated with vapors from the high-grade weed, he took a deep toke and felt the pressures of the day drift away into a crisp, clean high.
Dinner was at Sushi Samba, a hipster Asian-Latino fusion joint. Packouz was in excellent spirits. He couldn't believe that he and Diveroli were actually pulling it off: Planes from all over Eastern Europe were now flying into Kabul, laden with millions of dollars worth of grenades and mortars and surface-to-air missiles. But as Packouz's miso-marinated Chilean sea bass arrived, his cellphone rang. It was the freight forwarder he had employed to make sure the ammunition made it from Hungary to Kabul. The man sounded panicked.
"We've got a problem," he told Packouz, shouting to be heard over the restaurant's thumping music. "The plane has been seized on the runway in Kyrgyzstan."
The arms shipment, it appeared, was being used as a bargaining chip in a high-stakes standoff between George W. Bush and Vladimir Putin. The Russian president didn't like NATO expanding into Kyrgyzstan, and the Kyrgyzs wanted the U.S. government to pay more rent to use their airport as a crucial supply line for the war in Afghanistan. Putin's allies in the Kyrgyz KGB, it seemed, were holding the plane hostage — and Packouz was going to be charged a $300,000 fine for every day it sat on the runway. Word of the seizure quickly reached Washington, and Defense Secretary Robert Gates himself was soon on his way to Kyrgyzstan to defuse the mounting tensions.
Packouz was baffled, stoned and way out of his league. "It was surreal," he recalls. "Here I was dealing with matters of international security, and I was half-baked. I didn't know anything about the situation in that part of the world. But I was a central player in the Afghan war — and if our delivery didn't make it to Kabul, the entire strategy of building up the Afghanistan army was going to fail. It was totally killing my buzz. There were all these shadowy forces, and I didn't know what their motives were. But I had to get my shit together and put my best arms-dealer face on."
Sitting in the restaurant, Packouz tried to clear his head, cupping a hand over his cellphone to shut out the noise. "Tell the Kyrgyz KGB that ammo needs to get to Afghanistan!" he shouted into the phone. "This contract is part of a vital mission in the global war on terrorism. Tell them that if they fuck with us, they are fucking with the government of the United States of America!"
Packouz and Diveroli had picked the perfect moment to get into the arms business. To fight simultaneous wars in both Afghanistan and Iraq, the Bush administration had decided to outsource virtually every facet of America's military operations, from building and staffing Army bases to hiring mercenaries to provide security for diplomats abroad. After Bush took office, private military contracts soared from $145 billion in 2001 to $390 billion in 2008. Federal contracting rules were routinely ignored or skirted, and military-industrial giants like Raytheon and Lockheed Martin cashed in as war profiteering went from war crime to business model. Why shouldn't a couple of inexperienced newcomers like Packouz and Diveroli get in on the action? After all, the two friends were after the same thing as everyone else in the arms business — lots and lots and lots of money.
"I was going to make millions," Packouz says. "I didn't plan on being an arms dealer forever — I was going to use the money to start a music career. I had never even owned a gun. But it was thrilling and fascinating to be in a business that decided the fate of nations. Nobody else our age was dealing weapons on an international level."
Packouz and Diveroli met at Beth Israel Congregation, the largest Orthodox synagogue in Miami Beach. Packouz was older by four years, a skinny kid who wore a yarmulke and left his white dress shirts untucked. Diveroli was the class clown, an overweight kid with a big mouth and no sense of fear. After school, the pair would hang out at the beach with their friends, smoking weed, playing guitar, sneaking in to swim in the pools at five-star hotels. When Packouz graduated, his parents were so concerned about his heavy pot use that they sent him to a school in Israel that specialized in handling kids with drug problems. It turned out to be a great place to get high. "I took acid by the Dead Sea," Packouz says. "I had a transcendental experience."
Returning home, Packouz drifted through two semesters at the University of Florida. Short of cash, he studied massage because it seemed like a better way to make money than flipping burgers. Nights, he sat around with his high school buddies getting high and dreaming of becoming a pop star. He wrote angsty rock ballads with titles like "Eternal Moment" — but it was hard to get a break in the music industry. With a shaved head and intense blue eyes, Packouz was plenty smart and plenty ambitious, in his slacker fashion, but he had no idea what to do with his life.
Efraim Diveroli, by contrast, knew exactly what he wanted to be: an arms dealer. It was the family business. His father brokered Kevlar jackets and other weapons-related paraphernalia to local police forces, and his uncle B.K. sold Glocks, Colts and Sig Sauers to law enforcement. Kicked out of school in the ninth grade, Diveroli was sent to Los Angeles to work for his uncle. As an apprentice arms dealer, he proved to be a quick study. By the time he was 16, he was traveling the country selling weapons. He loved guns with a passion — selling them, shooting them, talking about them — and he loved the arms industry's intrigue and ruthless amorality. At 18, after a dispute with his uncle over money, Diveroli returned to Miami to set up his own operation, taking over a shell company his father had incorporated called AEY Inc.
His business plan was simple but brilliant. Most companies grow by attracting more customers. Diveroli realized he could succeed by selling to one customer: the U.S. military. No government agency buys and sells more stuff than the Defense Department — everything from F-16s to paper clips and front-end loaders. By law, every Pentagon purchase order is required to be open to public bidding. And under the Bush administration, small businesses like AEY were guaranteed a share of the arms deals. Diveroli didn't have to actually make any of the products to bid on the contracts. He could just broker the deals, finding the cheapest prices and underbidding the competition. All he had to do was win even a minuscule fraction of the billions the Pentagon spends on arms every year and he would be a millionaire. But Diveroli wanted more than that: His ambition was to be the biggest arms dealer in the world — a young Adnan Khashoggi, a teenage Victor Bout.
To get into the game, Diveroli knew he would have to deal with some of the world's shadiest operators — the war criminals, soldiers of fortune, crooked diplomats and small-time thugs who keep militaries and mercenaries loaded with arms. The vast aftermarket in arms had grown exponentially after the end of the Cold War. For decades, weapons had been stockpiled in warehouses throughout the Balkans and Eastern Europe for the threat of war against the West, but now arms dealers were selling them off to the highest bidder. The Pentagon needed access to this new aftermarket to arm the militias it was creating in Iraq and Afghanistan. The trouble was, it couldn't go into such a murky underworld on its own. It needed proxies to do its dirty work — companies like AEY. The result was a new era of lawlessness. According to a report by Amnesty International, "Tens of millions of rounds of ammunition from the Balkans were reportedly shipped — clandestinely and without public oversight — to Iraq by a chain of private brokers and transport contractors under the auspices of the U.S. Department of Defense."
This was the "gray market" that Diveroli wanted to penetrate. Still a teenager, he rented a room in a house owned by a Hispanic family in Miami and went to work on his laptop. The government website where contracts are posted is fbo.gov, known as "FedBizOpps." Diveroli soon became adept at the arcane lingo of federal contracts. His competition was mostly big corporations like Northrop Grumman, Lockheed and BAE Systems. Those companies had entire departments dedicated to selling to the Pentagon. But Diveroli had his own advantages: low overhead, an appetite for risk and all-devouring ambition.
In the beginning, Diveroli specialized in bidding on smaller contracts for items like helmets and ammunition for U.S. Special Forces. The deals were tiny, relatively speaking, but they gave AEY a history of "past performance" — the kind of track record the Pentagon requires of companies that want to bid on large defense contracts. Diveroli got financing from a Mormon named Ralph Merrill, a machine-gun manufacturer from Utah who had worked for his father. Before long, Diveroli was winning Pentagon contracts.
Like all the kids in their pot-smoking circle, Packouz was aware that Diveroli had become an arms dealer. Diveroli loved to brag about how rich he was, and rumors circulated among the stoners about the vast sums he was making, at least compared with their crappy part-time jobs. One evening, Diveroli picked Packouz up in his Mercedes, and the two headed to a party at a local rabbi's house, lured by the promise of free booze and pretty girls. Diveroli was excited about a deal he had just completed, a $15 million contract to sell old Russian-manufactured rifles to the Pentagon to supply the Iraqi army. He regaled Packouz with the tale of how he had won the contract, how much money he was making and how much more there was to be made.
"Dude, I've got so much work I need a partner," Diveroli said. "It's a great business, but I need a guy to come on board and make money with me."
Packouz was intrigued. He was doing some online business himself, buying sheets from textile companies in Pakistan and reselling them to distributors that supplied nursing homes in Miami. The sums he made were tiny — a thousand or two at a time — but the experience made him hungry for more.
"How much money are you making, dude?" Packouz asked.
"Serious money," Diveroli said.
"This is confidential information," Diveroli said.
"Dude, if you had to leave the country tomorrow, how much would you be able to take?"
"Cold, hard cash."
Diveroli pulled the car over and turned to look at Packouz. "Dude, I'm going to tell you," he said. "But only to inspire you. Not because I'm bragging." Diveroli paused, as if he were about to disclose his most precious secret. "I have $1.8 million in cash."
Packouz stared in disbelief. He had expected Diveroli to say something like $100,000, maybe a little more. But nearly $2 million?
"Dude," was all Packouz said.
Packouz started working with Diveroli in November 2005. His title was account executive. He would be paid entirely in commission. The pair operated out of a one-bedroom apartment Diveroli had by then rented in Miami Beach, sitting opposite each other at a desk in the living room, surrounded by stacks of federal contracts and a mountain of pot. They quickly fell into a daily routine: wake up, get baked, start wheeling and dealing.
Packouz was about to get a rare education. He watched as Diveroli won a State Department contract to supply high-grade FN Herstal machine guns to the Colombian army. It was a lucrative deal, but Diveroli wasn't satisfied — he always wanted more. So he persuaded the State Department to allow him to substitute Korean-made knockoffs instead of the high-end Herstals — a swap that instantly doubled his earnings. Diveroli did the same with a large helmet order for the Iraqi army, pushing the Pentagon to accept poorer-quality Chinese-made helmets once he had won the contract. After all, it wasn't like the military was buying weapons and helmets for American soldiers. The hapless end-users were foreigners, and who was going to go the extra mile for them?
The Pentagon's buyers were soldiers with little or no business experience, and Diveroli knew how to win them over with a mixture of charm, patriotism and a keen sense of how to play to the military culture; he could yes sir and no sir with the best of them. To get the inside dirt on a deal, he would call the official in charge of the contract and pretend to be a colonel or even a general. "He would be toasted, but you would never know it," says Packouz. "When he was trying to get a deal, he was totally convincing. But if he was about to lose a deal, his voice would start shaking. He would say that he was running a very small business, even though he had millions in the bank. He said that if the deal fell through he was going to be ruined. He was going to lose his house. His wife and kids were going to go hungry. He would literally cry. I didn't know if it was psychosis or acting, but he absolutely believed what he was saying."
Above all, Diveroli cared about the bottom line. "Efraim was a Republican because they started more wars," Packouz says. "When the United States invaded Iraq, he was thrilled. He said to me, 'Do I think George Bush did the right thing for the country by invading Iraq? No. But am I happy about it? Absofuckinglutely.' He hoped we would invade more countries because it was good for business."
That spring, when mass protests broke out in Nepal, Diveroli frantically tried to put together a cache of arms that could be sold to the Nepalese king to put down the rebellion — heavy weapons, attack helicopters, ammo. "Efraim called it the Save the King Project, but he didn't give a shit about the king," Packouz says. "Money was all he talked about, literally — no sports or politics. He would do anything to make money."
To master the art of federal contracts, Packouz studied the solicitations posted on fbo.gov. The contracts often ran to 30 or 40 pages, each filled with fine print and legalese. As Diveroli's apprentice, Packouz saw that his friend never read a book or a magazine, never went to the movies — all he did was pore over government documents, looking for an angle, a way in. Diveroli called it squeezing into a deal — putting himself between the supplier and the government by shaving a few pennies off each unit and reselling them at a markup that undercut his competitors. Playing the part of an arms dealer, he loved to deliver dramatic one-liners, speaking as if he were the star of a Hollywood blockbuster. "I don't care if I have the smallest dick in the room," he would say, "as long as I have the fattest wallet." Or: "If you see a crack in the door, you've got to kick the fucker open." Or: "Once a gun runner, always a gun runner."
"Efraim's self-image was as the modern merchant of death," says Packouz. "He was still just a kid, but he didn't see himself that way. He would go toe-to-toe with high-ranking military officers, Eastern European mobsters, executives of Fortune 500 companies. He didn't give a fuck. He would take them on and win, and then give them the finger. I was following in his footsteps. He told me I was going to be a millionaire within three years — he guaranteed it."
At first, Packouz struggled to land his own deals. Bidding on contracts on fbo.gov was an art; closing a deal was a science. At one point, he spent weeks obsessing over an $8 million contract to supply SUVs to the State Department in Pakistan, only to lose the bid. But he finally won a contract to supply 50,000 gallons of propane to an Air Force base in Wyoming, netting a profit of $8,000. "There were a lot of suppliers who didn't know how to work FedBizOpps as well as we did," he says. "You had to read the solicitations religiously."
Once a week or so, the pair would hit the clubs of South Beach to let off steam. Karaoke in a basement bar called the Studio was a favorite. Packouz took his performances seriously, choosing soulful music like U2's "With or Without You" or Pearl Jam's "Black," while Diveroli threw himself into power ballads and country anthems, tearing off his shirt and pumping his fists to the music. Between songs, the two friends would take hits of the cocaine that Diveroli kept in a small plastic bullet with a tiny valve on the top for easy access. Packouz was shy around girls, but Diveroli cut right to the chase, often hitting on women right in front of their boyfriends.
All the partying wasn't exactly conducive to running a small business, especially one as complicated and perilous as arms dealing. As AEY grew, it defaulted on at least seven contracts, in one case failing to deliver a shipment of 10,000 Beretta pistols for the Iraqi army. Diveroli's aunt — a strong-willed and outspoken woman who fought constantly with her nephew — joined the two friends to provide administrative support. She didn't approve of their drug use, and she talked openly about them on the phone, as if they weren't present.
"Mark my words," she told Diveroli's mother repeatedly, "your son is going to crash and burn."
"Shut up!" Diveroli would shout, the coldblooded arms dealer giving way to the pissed-off teenager. "You don't know what you're talking about! I made millions last year!"
"Crash and burn," the aunt would say. "Mark my words — crash and burn."
In June, seven months after Packouz started at AEY, he and Diveroli traveled to Paris for Eurosatory, one of the world's largest arms trade shows. Miles of booths inside the Paris Nord Villepinte exhibition center were filled with arms manufacturers hawking the latest instruments of death — tanks, robots, unmanned drones — and serving up champagne and caviar to some of the most powerful political and military officials on the planet. Packouz and Diveroli were by far the youngest in attendance, but they tried to look the part, wearing dress pants, crisp shirts and sales-rep ties. "Wait until I am really in the big time," Diveroli boasted. "I will own this fucking show."
At a booth displaying a new robotic reconnaissance device, Diveroli and Packouz met with Heinrich Thomet, a Swiss arms dealer who served as a crucial go-between for AEY. Tall and suave, with movie-star looks and an impeccable sense of fashion, Thomet had blond hair, light-blue eyes and an eerily calm demeanor. He spoke fluent English with a slight German accent, adding "OK" to the beginning and end of every sentence ("OK, so the price on the AKs is firm, OK?"). He seemed to have connections everywhere — Russia, Bulgaria, Hungary. Serving as a broker, Thomet had created an array of shell companies and offshore accounts to shield arms transactions from official scrutiny. He had used his contacts in Albania to get Diveroli a good price on Chinese-made ammunition for U.S. Special Forces training in Germany — a deal that was technically illegal, given the U.S. embargo against Chinese arms imposed after the Tiananmen Square massacre in 1989.
"Thomet could get body armor, machine guns, anti-aircraft rockets — anything," Packouz recalls. "He was one of the best middlemen in the business, a real-life Lord of War."
Like Diveroli, Thomet had been in the business since he was a teenager, and he recognized that the two young upstarts could be useful to him. Thomet was singled out by Amnesty International for smuggling arms out of Zimbabwe in violation of U.S. sanctions. He was also under investigation by U.S. law enforcement for shipping weapons from Serbia to Iraq, and he was placed on a "watch list" by the State Department. Given the obstacles to selling directly in the United States, Thomet wanted to use AEY as a front, providing him an easy conduit to the lucrative contracts being handed out by the Pentagon.
With Thomet on their side, Diveroli and Packouz soon got the break they were looking for. On July 28th, 2006, the Army Sustainment Command in Rock Island, Illinois, posted a 44-page document titled "A Solicitation for Nonstandard Ammunition." It looked like any other government form on fbo.gov, with blank spaces for names and telephone numbers and hundreds of squares to be filled in. But the document actually represented a semi-covert operation by the Bush administration to prop up the Afghan National Army. Rather than face a public debate over the war in Afghanistan, which was going very badly indeed, the Pentagon issued what is known as a "pseudo case" — a solicitation that permitted it to allocate defense funds without the approval of Congress. The pseudo case wasn't secret, precisely, but the only place it was publicized was on fbo.gov. No press release was issued, and there was no public debate. The money was only available for two years, so it had to be spent quickly. And unlike most federal contracts, there was no dollar limit posted; companies vying for the deal could bid whatever they wanted.
Based on the numbers, it looked like it was going to be a lot of money. The Army wanted to buy a dizzying array of weapons — ammunition for AK-47 assault rifles and SVD Dragunov sniper rifles, GP 30 grenades, 82 mm Russian mortars, S-KO aviation rockets. The quantities were enormous — enough ammo to literally create an army — and the entire contract would go to a single bidder. "One firm fixed-price award, on an all-or-none basis, will be made as a result of this solicitation," the tender offer said.
The solicitation was only up for a matter of minutes before Diveroli spotted it, reading the terms with increasing excitement. He immediately called Packouz, who was driving along the interstate.
"I've found the perfect contract for us," Diveroli said. "It's enormous — far, far bigger than anything we've done before. But it's right up our alley."
The pair met at Diveroli's apartment to smoke a joint and discuss strategy. Supplying the contract would mean buying up hundreds of millions of dollars worth of ammunition for the kind of Eastern Bloc weapons that the Afghans used. Because such weapons were traded in the gray market — a world populated by illegal arms dealers, gun runners and warlords — the Pentagon couldn't go out and buy the ammo itself without causing a public relations disaster. Whoever won the contract to arm the Afghans would essentially be serving as an official front operation, laundering shady arms for the Pentagon.
Normally, a small-time outfit like AEY wouldn't have a shot at such a major defense contract. But Diveroli and Packouz had three advantages. First, the Bush administration had started its small-business initiative at the Pentagon, mandating that a certain percentage of defense contracts go to firms like AEY. Second, the fledgling arms dealers specialized in precisely the sort of Cold War munitions the Pentagon was looking for: They had the "past performance" required by the contract, and they could fulfill the order using the same supply lines Diveroli had developed through Thomet. Third, the only requirement in the contract was that the ammunition be "serviceable without qualification." As Diveroli and Packouz interpreted it, that meant the Pentagon didn't care if they supplied "shit ammo," as long as it "went bang and went out of the barrel."
For the two friends, it was a chance to enter a world usually reserved for multinational defense contractors with armies of well-connected lobbyists. "I knew it was a long shot," recalls Packouz. "But it seemed like we might be able to actually compete with the big boys. I thought we actually had a chance. If we worked hard. If we got lucky."
Bidding on defense contracts is a speculative business — laborious, time-consuming, with no prize for second place. As they passed a joint back and forth, Diveroli decided it was time for Packouz to step up and take on a larger role.
"I don't really have time to source all these things," he told Packouz. "But I've got good contacts for you to start with. I want you to get on the Internet and get a price from everyone and his mother. Any new sources you bring to the table, I'll give you 25 percent of the profit."
This was Packouz's big chance. That night, he went online and searched defense databases for every arms manufacturer in Eastern Europe he could find — Hungary, Bulgaria, Ukraine, any place that might deal in Soviet-era weapons. He e-mailed or faxed or called them all. The phone connection was often bad, and Packouz had to shout to be heard. If the person who answered didn't speak English, he would say "English! English! English!" and then spend minutes on hold while they tracked down the one guy in the outfit who spoke a few words. "Da, da," they would tell Packouz. "You buy, you buy." When he managed to make himself understood, he told the manufacturers that the ammunition had to "work." It also had to "look good," and not be in rusty boxes or exposed to the elements.
For six weeks, Packouz worked through the night, sleeping on Diveroli's couch and surviving on weed and adrenaline. He located stockpiles of ammunition in Eastern Europe at good prices. At the same time, Heinrich Thomet sourced a massive amount of ammunition through his Albanian connections. As the date for the final bid neared, Diveroli agonized. He paced day and night, a cloud of smoke over his head as he smoked joint after joint, muttering, worrying, cursing.
"Efraim was conflicted about whether to put a nine percent or 10 percent profit margin on top of our prices," Packouz recalls. "The difference was more than $3 million in cash, which was huge — but with either margin, profits were going to be more than $30 million. He figured everyone else was going to take 10 percent, but what if another bidder had the same idea as him and put in nine percent? So maybe he should go with eight percent. But then we might be leaving money on the table — God forbid!"
Finally, at the last possible moment, Diveroli went for nine percent. He scribbled a number on the form: $298,000,000. It was an educated guess, one he prayed wouldn't be undercut by the big defense contractors. There were just 10 minutes left before the application deadline. The two friends jumped in Diveroli's car and sped through the quiet residential streets of Miami Beach, making it to the post office with only seconds to go.
The Pentagon can be a slow-moving bureaucracy, a place where paperwork goes to die. But because the Afghanistan solicitation was a "pseudo case," it had been designed to move swiftly. On the evening of January 26th, 2007, Packouz was parking his beat-up old Mazda Protege when Diveroli called.
"I have good news and bad news," Diveroli said.
"What's the bad news?" Packouz asked.
"Our first order is only for $600,000."
"So we won the contract?" Packouz asked in disbelief.
"Fuck yeah!" said Diveroli.
The two friends, still in their early twenties, were now responsible for one of the central elements of the Bush administration's foreign policy. Over multiple bottles of Cristal at an upscale Italian restaurant, the pair toasted their amazing good fortune. Throughout the meal they passed Diveroli's cocaine bullet back and forth under the table, using napkins to pretend to blow their noses.
"You and me, buddy," Diveroli said. "You and me are going to take over this industry. I see AEY as a $10 billion company in a few years. These fat cats in their boardrooms worrying about the stock prices of their companies have no idea what is about to hit them."
"General Dynamics isn't going to be too happy right now," Packouz agreed.
Despite the celebratory air, they both knew that their work had just begun. They had already managed to clear three different government audits, hiring an accountant to establish the kind of basic bookkeeping systems that any cafe or corner store would have. Now, a few weeks after winning the contract, AEY was suddenly summoned to a meeting with the purchasing officers at Rock Island.
Diveroli asked Ralph Merrill, the Mormon gun manufacturer from Utah, to come along. An experienced businessman in his sixties, Merrill had provided the financial backing needed to land the contract, pledging his interest in a piece of property in Utah. Diveroli had also shown auditors his personal bank balance, by then $5.4 million.
The meeting with Army officials proved to be a formality. Diveroli had the contracting jargon down, and he sailed through the technical aspects of the transaction with confidence: supply sources, end-user certificates, AEY's experience. No one ever asked his age. "We were supremely confident," says Packouz. "I just think it never occurred to the Army people that they were dealing with a couple of dudes in their early twenties."
In reality, the Pentagon had good reason to disqualify AEY from even vying for the contract. The company and Diveroli had both been placed on the State Department "watch list" for importing illegal firearms. But the Pentagon failed to check the list. It also ignored the fact that AEY had defaulted on prior contracts. Initially rated as "unsatisfactory" by the contracting office, AEY was upgraded to "good" and then "excellent."
There was only one explanation for the meteoric rise: Diveroli had radically underbid the competition. In private conversations, the Army's contracting officers let AEY know that its bid was at least $50 million less than its nearest rival. Diveroli's anxiety that his bid of nearly $300 million would be too high had failed to consider the corpulent markups employed by corporate America when it deals with the Pentagon. For once, at least, taxpayers were getting a good deal on a defense contract.
The first Task Order that AEY received on the deal was for $600,000 worth of grenades and ammunition — a test, Diveroli surmised, to make sure they could deliver as promised. Make a mistake, no matter the reason, and the Pentagon might yank the entire $298 million contract.
After their celebratory dinner the night they received the contract, the two friends headed for Diveroli's brand-new Audi. As Diveroli arranged a line of coke on the dashboard, he warned Packouz not to make any mistakes with the grenades.
"You've got the bitch's panties off," Diveroli said, adopting his best movie-star swagger. "But you haven't fucked her yet."
Diveroli and Packouz needn't have worried. They had barely gotten started on the order for grenades when the second Task Order arrived. This time, it was for more than $49 million in ammunition — including 100 million rounds of AK ammo and more than a million grenades for rocket launchers. There was no question now. The Pentagon was ecstatic to award the contract to a tiny company like AEY, which helped fulfill the quota set by Bush's small-business initiative.
Packouz calculated that even with the tight margins, he stood to make as much as $6 million on the contract. But he wasn't so sure that AEY was going to be able to deliver. Diveroli had already hit the road, traveling to the Ukraine, Montenegro and the Czech Republic in search of suppliers. So Packouz would have to tend to most of the Afghanistan contract by himself — a job that any conventional defense contractor would have assigned to dozens of full-time, experienced employees.
In February 2007, saddled with a gargantuan task, Packouz went by himself to the annual International Defense Exhibition in Abu Dhabi to look for suppliers. "It was bizarre," he says. "I was just a kid, but I was probably the single biggest private arms dealer on the planet. It was like Efraim had put me into the movie he was starring in." To look the part of an international arms dealer, Packouz carried a silver aluminum briefcase and wore wraparound shades. He also had business cards printed up with an impressive new title, considering he was part of a two-man operation: vice president.
In Abu Dhabi, Packouz hoped to find a single supplier big enough to meet most of AEY's demands. The obvious candidate was Rosoboron Export, the official dealer for all Russian arms. The company had inherited the Soviet Union's global arms-exporting empire; now, as part of Vladimir Putin's tightly held network of oligarchic corporations, Rosoboron sold more than 90 percent of Russia's weapons. The firm was so big that Packouz could have just given them the list of ammunition he needed and they could have supplied the entire contract, a one-stop weapons shop.
But there was a catch, the kind of perversity common in the world of arms dealing: Rosoboron had been banned by the State Department for selling nuclear equipment to Iran. The U.S. government wanted Russian ammo, just not from the Russians. AEY couldn't do business with the firm — at least, not legally. But for gun runners, this kind of legal hurdle was just that — a hurdle to be jumped.
Packouz went to the main Russian pavilion every day to try to get an appointment with the deputy director of Rosoboron. The giant exhibit was like a souk for arms dealers, with scores of Russian generals in full-dress uniform meeting with businessmen and sheiks. Finally, on the last day, Packouz was given an appointment. The deputy director looked like he was ex-KGB — big and fat, in his sixties, with thick square glasses. As Packouz spoke, the man kept surveying the pavilion out of the corner of his eye, as if he were checking to see if he was being watched. Packouz showed him the list of munitions he needed, along with the quantities. The director raised his eyebrows, impressed by the scale of the operation.
"We have very good interest in this business," he said in a thick Russian accent. "You know we are only company who can provide everything."
"I'm aware of that," Packouz said. "That's why we want to do business with you."
"But as you know, there is problem. State Department has blacklist us. I don't understand your government. One month is OK to do business, next month is not OK. This is very not fair. Very political. They just want leverage in dealing with Kremlin."
"I know we can't do business with you directly," Packouz said. Then he hinted that there was a way to get around the blacklist. "If you can help us do business with another Russian company, then we can buy from them."
"Let me talk to my people," the Russian said, taking one of Packouz's newly printed business cards.
It was the last Packouz ever heard from the Russian. Several weeks later, as he was arranging supply routes for the deal, Packouz was informed that AEY would not be given overflight permission for Turkmenistan, a former Soviet satellite that had to be crossed to reach Afghanistan. "It was clear that Putin was fucking with us directly," Packouz says. "If the Russians made life difficult for us, they would get taken off the American blacklist, so they could get our business for themselves."
Packouz managed to obtain the overflight permission through a Ukrainian airline — but the episode was an ominous reminder of how little he understood about the business he was in. "There was no way to really know why the heads of state were doing things, especially when it came to something like invading Iraq," he says. "It was such a deep game, we didn't know what was really happening."
With the flights to Kabul arranged, Packouz hit the phones looking for more ammunition. The cheaper the better: The less the ammo cost, the more he and Diveroli would pocket for themselves. They didn't need quality; antique shells, second-rate mortar rounds — all of it was fine, as long as it worked. "Please be advised there is no age restriction for this contract!!!" AEY advised one potential supplier in an e-mail. "ANY age ammunition is acceptable."
Of course, if the Pentagon really cared about the Afghan National Army, it could have supplied them with more expensive, and reliable, state-of-the-art weapons. The Bush administration's ambivalence about Afghanistan had manifested itself in the terms of the contract: The soldiers of Kabul and Kandahar would not be abandoned in the field, but nor would they be given the tools to succeed.
Packouz sat on the couch in Diveroli's apartment, bong and lighter handy, and called U.S. Embassies in the "stans" — the former Soviet satellites — and asked to speak to the defense attache. Deepening his voice and adopting a clipped military inflection, Packouz chatted them up, made them laugh, asked about how things were in Kazakhstan, described how sunny it was in Miami. Whenever possible, he threw in military lingo designed to appeal to the officers: He was working on an essential contract in the War on Terror, he explained, and the United States military was counting on AEY to complete the mission. "I said it was part of the vital process of nation building in the central front of the War on Terror," Packouz recalls. "Then I would tell them the specifics of what I was after — mortar rounds, the size of ammo, the amount. They were all eager to help."
Every day, Packouz spoke with military officials, sending volleys of e-mails to Kabul and Kyrgyzstan and the Army depot in Rock Island. The contracting officers he dealt with told him that there was a secret agenda involved in the deal. The Pentagon, they said, was worried that a Democrat would be elected president in 2008 and cut the funding for the war — or worse, pull U.S. troops out of Afghanistan entirely.
"They said Bush and Rumsfeld were trying to arm Afghanistan with enough ammo to last them the next few decades," Packouz recalls. "It made sense to me, but I didn't really care. My main motivator was making money, just like it was for General Dynamics. Nobody goes into the arms business for altruistic purposes."
It didn't take long for AEY to strike cut-rate deals that vastly improved its profit margin. The nine percent planned for in the original bid was soon pushing toward 25 percent — enough to provide Packouz and Diveroli with nearly $85 million in profits. But even such a jaw-dropping sum didn't satisfy Diveroli. He scoured FedBizOpps for even more contracts and landed a private deal to import Lithuanian ammo, determined to turn AEY into a multibillion-dollar company.
To cope with the increased business, AEY leased space in a larger and more expensive office building in Miami Beach. The company hired an office manager and two young secretaries they found on Craigslist. Diveroli brought in two more friends from the synagogue, including a guy fluent in Russian, to help fulfill the contracts. "Things were rolling along," Packouz recalls. "We were delivering on a consistent basis. We had suppliers in Hungary and Bulgaria and other countries. I had finally arranged all the overflight permits. We were cash positive."
Packouz had yet to be paid a cent, but he was convinced he was about to be seriously rich. Anticipating the big payday, he ditched his beater Mazda for a brand-new Audi A4. He moved from his tiny efficiency apartment to a nice one-bedroom overlooking the pool at the Flamingo in fashionable South Beach. Diveroli soon followed, taking a two-bedroom in the central tower. It was convenient for both — their drug dealer, Raoul, lived in the complex.
"The Flamingo was a constant party," Packouz says. "The marketing slogan for the building was 'South Beach revolves around us,' and it was true. There was drinking, dancing, people making out in the Jacuzzi — sometimes more than just making out. Outside my balcony there was always at least a few women sunbathing topless. People at parties would ask us what we did for a living. The girls were models or cosmetologists. The guys were stockbrokers and lawyers. We would say we were international arms dealers. 'You know the war in Afghanistan?' we would say. 'All the bullets are coming from us.' It was heaven. It was wild. We felt like we were on top of the world."
In the evenings, Packouz and Diveroli would get high and go to the American Range and Gun Shop — the only range near Miami that would let them fire off the Uzis and MP5s that Diveroli was licensed to own. "When we let go with our machine guns, all the other shooters would stop and look at us like, 'What the fuck was that?' Everyone else had pistols going pop pop. We loved it. Shooting an automatic machine gun feels powerful."
The biggest piece of the Afghan contract, in terms of sheer quantity, was ammunition for AK-47s. Packouz had received excellent quotes from suppliers in Hungary and the Czech Republic. But Diveroli insisted on using the Swiss arms dealer Heinrich Thomet's high-level contacts in Albania. The move made sense. The Albanians didn't require a large deposit as a down payment, which made it easier for AEY to place big orders. And Albania's government could certainly handle the volume: Its paranoid communist leaders had been so convinced they were going to be attacked by foreign powers that they had effectively transformed the nation into a vast military stockpile, with bunkers scattered throughout the countryside. In fact, AK-47 ammunition was so plentiful that Albania's president had recently flown to Baghdad and offered to donate millions of rounds to Gen. David Petraeus.
The structure for AEY's purchase of the Albanian ammo was standard in the world of illegal arms deals, where the whole point is to disguise origins and end-users. It was perfectly legal, but it had the stench of double-dealing. A shell company called Evdin, which Thomet had incorporated in Cyprus, would buy the ammo from Albania's arms-exporting company. Evdin would then resell the rounds to AEY. That way Thomet got a cut as broker, and AEY and the U.S. government were insulated from any legal or moral quandaries that came with doing business in a country as notoriously corrupt and unpredictable as Albania.
There was only one snag: When Diveroli bid on the contract, he had miscalculated the cost of shipping, failing to anticipate the rising cost of fuel. The Army had given him permission to repackage the rounds into cardboard boxes, but getting anything done in a country as dysfunctional as Albania wasn't easy. So Diveroli dispatched another friend from their synagogue, Alex Podrizki, to the capital city of Tirana to oversee the details of fulfilling the deal.
Despite the hands-on approach, signs of trouble emerged immediately. When Podrizki went to look at a cache of ammunition in one bunker, it was apparent that the Albanians had a haphazard attitude about safety; they used an ax to open crates containing live rounds and lit cigarettes in a room filled with gunpowder. The ammunition itself, though decades old, seemed to be in working order, but the rounds were stored in rusty cans and stacked on rotting wooden pallets — not the protocol normally used for such dangerous materiel. Worst of all, Podrizki noticed that the steel containers holding the ammunition — known as "sardine cans" — were covered in Chinese markings. Podrizki called Packouz in Miami.
"I inspected the stuff and it seems good," Podrizki told him. "But dude, you know this is Chinese ammo, right?"
"What are you talking about?" Packouz said.
"The ammo is Chinese."
"How do you know it's Chinese?"
"There are Chinese markings all over the crates."
Packouz's heart sank. There was not only an embargo against selling weapons manufactured in China: The Afghan contract specifically stipulated that Chinese ammo was not permitted. Then again, maybe AEY could argue that the ammunition didn't violate the ban, since it had been imported to Albania decades before the embargo was imposed, back when Albania's communist government had forged an alliance with Mao. There was precedent for such an argument: Only the year before, the Army had been delighted with Chinese ammo that AEY had shipped from Albania. But this time, when Diveroli wrote the State Department's legal advisory desk to ask if he could use Chinese rounds made prior to the embargo, he received a curt and unequivocal reply: not without a presidential decree.
Given the deadline on the contract, there was no time to find another supplier. The Hungarians could fill half the deal, but the ammunition would not be ready for shipment until the fall; the Czechs could fill the entire order, but they wanted $1 million. Any delay would risk losing the entire contract. "The Army was pushing us for the ammo," says Packouz. "They needed it ASAP."
So the two friends chose a third option. As arms dealers, subverting the law wasn't some sort of extreme scenario — it was a routine part of the business. There was even a term of art for it: circumvention. Packouz e-mailed Podrizki in Albania and instructed him to have the rounds repackaged to get rid of any Chinese markings. It was time to circumvent.
Alone in a strange city, Podrizki improvised. He picked up a phone book and found a cardboard-box manufacturer named Kosta Trebicka. The two men met at a bar near the Sky Tower in the center of town. Trebicka was in his late forties, a wiry and intense man with thick worker's hands. He told Podrizki that he could supply cardboard boxes strong enough to hold the ammunition, as well as the labor to transfer the rounds to new pallets. A week later, Podrizki called to ask if Trebicka could hire enough men to repack 100 million rounds of ammunition by taking them out of metal sardine cans and placing them in cardboard boxes. Trebicka thought the request exceedingly odd. Why go to all that trouble? Podrizki fibbed, saying it was to lighten the load and save money on air freight. After extended haggling with Diveroli back in Miami, Trebicka agreed to do the job for $280,000 and hired a team of men to begin repackaging the rounds.
As he worked at the warehouse, however, Trebicka grew even more suspicious. Concerned that something nefarious was happening, he called the U.S. Embassy and met with the economic attache. Over coffee at a cafe called Chocolate, Trebicka confided that the ammunition was covered in Chinese markings. Was that a problem? Not at all, the U.S. official replied. The embassy had been trying to find the money to pay for demolishing the ammunition, so sending the rounds to Afghanistan would actually do them a favor. AEY appeared to be in the clear.
But greed got the better of Diveroli. In a phone call from Miami, he asked Trebicka to use his contacts in the Albanian government to find out how much Thomet was paying the Albanians for the ammunition. AEY was giving the Swiss arms broker just over four cents per round and reselling them to the Pentagon for 10 cents. But Diveroli suspected that Thomet was ripping him off.
He turned out to be right. A few days later, Trebicka reported that Thomet was paying the Albanians only two cents per round — meaning that he was charging AEY double the asking price, just for serving as a broker. Diveroli was enraged. He asked Trebicka to meet with his Albanian connections and find a way to cut Thomet out of the deal entirely.
Trebicka was happy to help. The Albanians, he thought, would be glad to deal with AEY directly. After all, by doing an end run around Thomet, there would be more money for everyone else. But when Trebicka met with the Albanian defense minister, his intervention had the opposite effect: The Albanians cut him out of the deal, informing AEY that the repackaging job would be completed instead by a friend of the prime minister's son. What Trebicka had failed to grasp was that Thomet was paying a kickback to the Albanians from the large margin he was making on the deal. Getting rid of Thomet was impossible, because that was how the Albanians were being paid off the books.
Diveroli flew to Albania and tried to intervene to help Trebicka keep the job, but he didn't have enough clout to get the decision reversed. Trebicka was stuck with the tab for the workers he had hired to repackage the rounds, along with a warehouse full of useless cardboard boxes he had printed to hold the ammo. Furious at being frozen out, he called Diveroli and secretly recorded the conversation, threatening to tell the CIA what he knew about the deal. "If the Albanians want to still work with me, I will not open my mouth," he promised. "I will do whatever you tell me to do."
Diveroli suggested that Trebicka try bribing Ylli Pinari, the head of the Albanian arms-exporting agency that was supplying the ammunition. "Why don't you kiss Pinari's ass one more time," Diveroli said. "Call him up. Beg. Kiss him. Send one of your girls to fuck him. Let's get him happy. Maybe we can play on his fears. Or give him a little money, something in his pocket. And he's not going to get much — $20,000 from you."
When Trebicka complained about being muscled out of the deal, Diveroli said there was nothing he could do about it. There were too many thugs involved on the Albanian end of the deal, and it was just too dangerous. "It went up higher, to the prime minister and his son," Diveroli said. "This mafia is too strong for me. I can't fight this mafia. It got too big. The animals just got too out of control."
With things up in the air in Albania, Packouz was starting to feel the pressure. He was stressed out, working around the clock, negotiating multimillion-dollar purchases and arranging for transportation. It felt like AEY was under siege from all directions. So when the cargo plane had finally taken off from Hungary on its way to Kabul loaded with 5 million rounds of ammunition, Packouz had breathed a sigh of relief. Then the plane had been abruptly seized in Kyrgyzstan — and Packouz had been forced to swing into action once more, working the phones for weeks to get the ammo released. Fortunately, AEY had friends in high places. When Packouz contacted the U.S. Embassy in Kyrgyzstan, the military attache immediately wrote to the Kyrgyz government, explaining that the cargo was "urgently needed for the war on terrorism being fought by your neighboring Afghan forces." Two weeks later, Defense Secretary Robert Gates traveled to Kyrgyzstan on a mission to keep supplies flowing through the airport there. Under pressure from top U.S. officials, the ammo was eventually released.
"I never did find out what really happened, or why the plane was seized," says Packouz. "It was how things were done in international arms dealing. The defense industry and politics were extremely intertwined — you couldn't do business in one without dealing with the other. Your fate depended on political machinations behind the scenes. You don't even know whose side you were on — who you were helping and who you were hurting."
With the plane released and the Albanian supply line secured, Packouz and Diveroli thought they finally had everything under control. Cargo planes filled with ammunition were taking off from airports across Eastern Europe. The military officials receiving the ammo in Kabul had to know it was Chinese: Every round is stamped with the place of manufacture, as any soldier knows. But the shipments were routinely approved, and there were no complaints from the Afghans about the quality of the rounds. The ammo worked, and that was all that mattered. Millions of dollars were being transferred via wire from the Pentagon into AEY's accounts, and the $300 million contract was moving along smoothly. Diveroli was rich. Packouz was going to be rich. They had it made.
But it didn't take long for success to drive a wedge between the two friends. The exhausted Packouz no longer had to work 18 hours a day to track down suppliers. He started coming in late and knocking off early. Diveroli, who owed him commission but had yet to cut a check to his partner, started to argue with him about his hours.
"Efraim started looking at me differently," Packouz says. "I could tell he was working things over in his head. There was real money in the bank — millions and millions. He was about to be forced to pay me a huge chunk of change. He said he didn't want to 'give' me all that money. That was how he put it. Not like I had earned the money."
One day, Diveroli finally made his move. He wanted to renegotiate the deal. Packouz knew he was in a bad bargaining position. The money coming in from the Army went directly to AEY. Packouz had no written contract with Diveroli, only an oral agreement. The handshake deal they had made was worth just that — a handshake.
In an effort to protect his interests, Packouz demanded a meeting with lawyers present. Before the session, the two friends had a quick exchange.
"Listen, dude, if you fuck me, I'm going to fuck you," Packouz warned.
"Whatever," said Diveroli.
"It's going to be war," Packouz said. Then he played his trump card. "You don't want the IRS starting to come and look around."
Diveroli's face went white.
"Calm down," Diveroli said. "Don't throw around three-letter words like IRS. We can find a settlement."
"I know all of your contacts, and I can send them the actual documents showing what the government is paying," Packouz said. "You'll lose your entire profit margin."
"Take it easy," said Diveroli.
"We both know you're delivering Chinese," Packouz said.
A deal was struck, with Packouz agreeing to a fraction of the commission he had been promised. He figured he had something more precious than money: He knew how to work FedBizOpps. To compete with his former partner, he opened up his own one-man shop, Dynacore Industries, claiming on his website that his "staff" had done business with the State Department, the Pentagon, and the Iraqi and Afghan armies. "Sometimes you have to fake it until you make it," Packouz says. "People won't do business with you unless you have experience, but how can you get experience if they won't do business with you? Everyone has got to lie sometimes." Fearing that Diveroli might decide it was cheaper to have him killed than to pay him, Packouz also bought a .357 revolver as insurance.
It turned out that Packouz had bigger things to worry about. Winning the Afghan contract had earned AEY powerful enemies in the industry. One American arms dealer had complained to the State Department, claiming that AEY was buying Chinese-made AK-47s and shipping them to the Iraqi army. The allegation was false, but it had apparently triggered a criminal investigation by the Pentagon. On August 23rd, 2007 — the very day Packouz was supposed to sign the settlement papers with Diveroli — federal agents raided AEY's offices in Miami Beach. Ordering everyone to step away from their computers, the agents seized all of the company's hard drives and files.
The raid led agents directly to the e-mails about the Chinese markings on the ammunition from Albania, and the conspiracy to repackage it. "The e-mails were incredibly incriminating — they spelled out everything," Packouz says. "I knew once they saw them we were in trouble. We were so stupid. If we didn't e-mail, we could probably have denied the whole thing. But there were the names and dates. It was undeniable. I realized I was going to get caught no matter what I did, so I turned myself in. When the agents came to my lawyer's office to interview me, they were joking about how they had seen all the e-mails and notes. They were laughing."
To avoid indictment, Packouz agreed to cooperate, as did Alex Podrizki. But Diveroli went right on shipping Chinese ammo to Afghanistan — and the Army went right on accepting it. By now, though, the repackaging being done in Albania was getting even sloppier. Some of the crates were infested with termites, and the ammunition had been damaged by water. Tipped off by an attorney for Kosta Trebicka, who had begun a crusade against corruption in Albania, The New York Times ran a front-page story in March 2008 entitled "Supplier Under Scrutiny on Arms for Afghans."
Before the Times story ran, Packouz had been led to believe that he wasn't going to be charged for shipping pre-embargo Chinese ammunition. But after the article appeared, he and Podrizki and Diveroli were indicted on 71 counts of fraud. Faced with overwhelming evidence, all pleaded guilty. The Mormon gun manufacturer from Utah, Ralph Merrill, pleaded not guilty and was convicted in December. Heinrich Thomet simply vanished; according to rumors, he was last seen somewhere in Bosnia.
After the story broke, Kosta Trebicka traveled to the United States to talk to congressional investigators and federal prosecutors in Miami. He soon became terrified that the U.S. government was going to indict him as well. But back in Albania, he also became the lead witness in a case that targeted Albanian thugs and gangsters with ties to the prime minister. Then one afternoon in September 2008, Trebicka was killed in a mysterious "accident" when his truck somehow managed to flip over on a flat stretch of land outside Tirana. He was found alive by villagers, but medical crews and the police were slow to arrive. One of the first officials on the scene, in fact, was the Albanian prime minister's former bodyguard. "If it was an accident," says Erion Veliaj, an Albanian activist who worked with Trebicka, "it was a very strange kind."
Through all the chaos, Diveroli and Packouz had done a huge amount of business with the U.S. military. All told, AEY made 85 deliveries of munitions to Afghanistan worth more than $66 million, and had already received orders for another $100 million in ammunition. But the fiasco involved more than a couple of stoner kids who made a fortune in the arms trade. "The AEY contract can be viewed as a case study in what is wrong with the procurement process," an investigation by the House Committee on Oversight and Government Reform later concluded. There was a "questionable need for the contract," a "grossly inadequate assessment of AEY's qualifications" and "poor execution and oversight" of the contract. The Bush administration's push to outsource its wars in Iraq and Afghanistan, in short, had sent companies like AEY into the world of illegal arms dealers — but when things turned nasty, the federal government reacted with righteous indignation.
In January, Packouz was sentenced to seven months of house arrest after he stood before a federal judge in Miami and expressed his remorse for the "embarrassment, stress and heartache that I have caused." But his real regret is political: He believes that he and Diveroli were scapegoats, prosecuted not for breaking the law but for embarrassing the Bush administration. No one from
I was gonna post this under the fourth reich thread. But, just too much of a "circus".
Breaking! George Zimmerman’s Girlfriend is An Eric Holder and D.O.J. Plant
U.S. Attorney General Eric Holder said yesterday (11-19-2013) the Justice Department will announce a decision on whether to file civil rights charges against George Zimmerman in the self-defense shooting of Trayvon Martin.
What he didn’t announce, is that behind the curtains of the corrupt regime in which he, Holder, serves, the powers that be have already gone after Zimmerman.
Eric Holder, with help from the ACLU and the NAACP and the left-wing media system has been hounding and harassing Zimmerman since the day he was found not guilty, after having been tried for killing a common street thug who would have killed him had he not acted in self-defense, in a court case that is nothing more than an embarrassment to the U.S. justice system. Had Zimmerman been black, the case would have never made its way to court. But since he was a “white Mexican”- whatever the hell that is- the trial became a public spectacle and a form of entertainment the world over. Though the rest of the world, outside the borders of the U.S., were more entertained by the mockery the U.S. was making of itself.
It appears that things are not as they seem, yet again, in the world of reality vs. fiction. At the beginning of this week, George Zimmerman was arrested for allegedly pulling a gun on his “girlfriend” Samantha Scheibe. He has since been charged with assault.
However, who is Ms. “Scheibe?” And what is her relation to U.S. Attorney General Eric Holder.
In several interviews, Scheibe, if that’s even her real name, has claimed that Zimmerman has tried to kill himself many times. Could it be that Ms. Scheibe is merely following a canned script, written by Holder? Setting him up to appear unstable, so that on the time and date of Holder’s choosing, which apparently was this past Monday, they could call for the final act? Set Zimmerman up on assault charges, conveniently, only days before Holder is to announce that he WILL go after Zimmerman in a civil rights hearing? (Mark our words).
This is not a “conspiracy.” This is how the administration under U.S. President Barack Hussein Obama works, and this is merely one more scandal. Many are afraid to call Eric Holder out on his treacherous ways, in fear of being labelled a racist.
If the powers that be can make us believe that an animal called a “white Mexican” actually exists, they can make us believe anything. This story may or may not be satire, and we may never know .
McDonald’s Advice to Underpaid Employees: Sell Your Christmas Presents for Cash
By Adam Peck
Nation of Change
Tis the season for holiday spirit: Yule logs, egg nog, festive lights and exchanging gifts with loved ones. If you work for McDonald’s, though, be sure to save those receipts.
McDonald’s McResource Line, a dedicated website run by the world’s largest fast-food chain to provide its 1.8 million employees with financial and health-related tips, offers a full page of advice for “Digging Out From Holiday Debt.” Among their helpful holiday tips: “Selling some of your unwanted possessions on eBay or Craigslist could bring in some quick cash.”
Elsewhere on the site, McDonald’s encourages its employees to break apart food when they eat meals, as “breaking food into pieces often results in eating less and still feeling full.” And if they are struggling to stock their shelves with food in the first place, the company offers assistance for workers applying for food stamps.
McDonald’s corporate officers have a history of offering questionable advice to their low-wage workers. Four months ago, the company partnered with Visa to distribute a sample “budget.” In it, the chain suggested that workers needn’t pay for such frivolous expenses like their heating bills, and factored in a monthly rent of $600. To workers living in New York City (home of 350+ stores) and other expensive metropolises, that number is almost comical.
McDonald’s employees are some of the most underpaid workers in the country. The company’s cashiers and “team members” earn, on average, $7.75 an hour, just 50 cents higher than the federal minimum wage. Responding to rising living costs, many stores have staged walk-outs, strikes and protests, demanding a living wage. In Europe, where the minimum wage for employees is $12, customers pay just pennies more than their American counterparts for the same menu items, while the stores themselves typically bring in higher profit margins than ones in the United States.
Of course, McDonalds has shown little willingness to negotiate higher salaries for their poorest workers even as labor rights groups up the pressure. Instead, their website has another piece of advice for people who are stressed about their meager paychecks: “Quit complaining,” the site suggests. “Stress hormones levels rise by 15 percent after 10 minutes of complaining.”
Strontium 90 - a radioactive isotope - is known to destroy the spinal cord because it deposits in the bones and then the beta radiation destroys the cells.
If the minority of U.S. gun-owners who still retain their sanity don't want to see TOTAL gun-confiscation in the U.S.; they still have one, last chance at SANE Gun-control.
a) Remove all quasi-military weapons from this civilian population.
b) Get all guns out of the hands of OBVIOUSLY DISTURBED individuals.
c) Begin an immediate campaign for SANE laws regarding the use of these deadly toys.
d) Educate the population so they understand that shooting your Neighbour is not the FIRST STEP in "conflict resolution."
Those who are in power and control are psychopaths with wet dreams of population reduction and genocide and you want to disarm the population ?
Didn't you know that the Obama Regime has already labled all veterans as OBVIOUSLY DISTURBED (all have supposedly MPD).
I do not know if the first part of the following article is true, but it is worth reading because of the historical occurrences.
Then there was the PUBLICLY "anti-gay" Republican who was caught in some sleazy, gay trist in a men's washroom.
He bought an "Eight Ball" of Cocaine. Probation..WOW
Florida Republican congressman Trey Radel appeared in a Washington, D.C., court today and pled guilty to one count of cocaine possession.
Radel, who admitted to being an addict, was placed on one year probation with "minimal supervision." He promised to seek treatment.
"Your honor, I apologize for what I've done," the congressman said to Judge Robert Tignor in a low voice. "I have hit the bottom ... I realize I need help and have aggressively sought the help... I am so sorry to be here. I know that I've let my constituents down, my country down, and most importantly my family, including my 2-year-old who doesn't know it yet."
Radel, 37, said he is seeking treatment so he can "be a better man, a better husband, and continue serving this country."
The freshman congressman was the target of an undercover sting operation, prosecutors told the court.
Radel, according to sources, first came on the radar of federal authorities when a suspected cocaine dealer under investigation by a joint Drug Enforcement Administration and FBI task force told agents that one of his customers was the Florida congressman.
According to prosecutors, confidential sources told authorities that Radel had purchases cocaine "on several occasions" for his own use, and "on occasion" would share that cocaine with others.
About 10 p.m. on Oct 29, Radel met a confidential source and an undercover law enforcement officer at a Washington restaurant, prosecutors said. At the restaurant, Radel told the two that he had cocaine back at his apartment and said they could go back and use some, according to testimony.
They declined the offer to share coke with Radel, but the undercover officer said he could sell 3.5 grams to Radel, prosecutors said. Outside the restaurant, Radel gave the undercover $260, and then inside a car, the undercover gave Radel the cocaine, according to prosecutors.
When Radel stepped outside of the car, federal authorities approached him. He dropped the bag of cocaine on the street. Radel admitted to authorities that he bought cocaine. Ultimately he and authorities went back to his apartment, where Radel retrieved another vial of cocaine and gave it to authorities, they told the court.
"What did you believe you were purchasing?" the judge asked Radel.
Florida Rep. Trey Radel Pleads Guilty To Cocaine Possession (ABC News)
"A drug. Cocaine. I plead guilty," the congressman replied.
Radel's lawyer David Schertler told the court, "He has a disease... He recognizes that this isn't a problem that is going away overnight."
DEA Special Agent in Charge Karl Colder said in a statement after Redal's court appearance, We want young people to see the price people pay for drug abuse and trafficking in cases like this so they will resolve to live drug-free lives."
In sentencing Radel to probation, Tignor noted that the congressman it was a first-time offense and probation gives Radel and others like him an opportunity "to prove themselves."
This happened to be the first article I read after your commentary-
North Texas Drivers Stopped at Roadblock Asked for Saliva, Blood
Fort Worth police apologize for its role in federal survey
Some drivers along a busy Fort Worth street on Friday were stopped at a police roadblock and directed into a parking lot, where they were asked by federal contractors for samples of their breath, saliva and even blood.
It was part of a government research study aimed at determining the number of drunken or drug-impaired drivers.
"It just doesn't seem right that you can be forced off the road when you're not doing anything wrong," said Kim Cope, who said she was on her lunch break when she was forced to pull over at the roadblock on Beach Street in North Fort Worth.
The National Highway Traffic Safety Administration, which is spending $7.9 million on the survey over three years, said participation was "100 percent voluntary" and anonymous.
But Cope said it didn't feel voluntary to her -- despite signs saying it was.
"I gestured to the guy in front that I just wanted to go straight, but he wouldn't let me and forced me into a parking spot," she said.
Once parked, she couldn't believe what she was asked next.
"They were asking for cheek swabs," she said. "They would give $10 for that. Also, if you let them take your blood, they would pay you $50 for that."
At the very least, she said, they wanted to test her breath for alcohol.
She said she felt trapped.
"I finally did the Breathalyzer test just because I thought that would be the easiest way to leave," she said, adding she received no money.
Fort Worth police earlier said they could not immediately find any record of officer involvement but police spokesman Sgt. Kelly Peel said Tuesday that the department's Traffic Division coordinated with the NHTSA on the use of off-duty officers after the agency asked for help with the survey.
"We are reviewing the actions of all police personnel involved to ensure that FWPD policies and procedures were followed," he said. "We apologize if any of our drivers and citizens were offended or inconvenienced by the NHTSA National Roadside Survey."
NBC DFW confirmed that the survey was done by a government contractor, the Pacific Institute for Research and Evaluation, which is based in Calverton, Md.
A company spokeswoman referred questions to the National Highway Traffic Safety Administration.
An agency spokeswoman sent an email confirming the government is conducting the surveys in 30 cities across the country in an effort to reduce impaired-driving accidents.
She did not respond to another email from NBC DFW asking specific questions about the program..
But a Fort Worth attorney who is an expert in civil liberties law questioned whether such stops are constitutional.
"You can't just be pulled over randomly or for no reason," said attorney Frank Colosi.
He also noted the fine print on a form given to drivers informs them their breath was tested by "passive alcohol sensor readings before the consent process has been completed."
"They're essentially lying to you when they say it's completely voluntary, because they're testing you at that moment," Colosi said.
He also questioned the results of the "voluntary" survey -- speculating that drivers who had been drinking or using drugs would be more inclined to simply decline to participate.
Cope said she is troubled by what happened.
"It just doesn't seem right that they should be able to do any of it," she said. "If it's voluntary, it's voluntary, and none of it felt voluntary."
Asked Tuesday if she accepted the police department's apology, Cope said she would wait to see what the review showed.
"They need to make sure this doesn't happen again," she said.
Trey Radel, Busted On Cocaine Charge, Voted For Drug Testing Food Stamp Recipients
WASHINGTON -- In September, Rep. Trey Radel voted for Republican legislation that would allow states to make food stamp recipients pee in cups to prove they're not on drugs. In October, police busted the Florida Republican on a charge of cocaine possession.
“It’s really interesting it came on the heels of Republicans voting on everyone who had access to food stamps get drug tested," House Minority Leader Nancy Pelosi (D-Calif.) told BuzzFeed Tuesday. "It’s like, what?”
The House over the summer approved an amendment by Rep. Richard Hudson (R-N.C.) that would let states drug test people on food stamps. The amendment passed by voice vote, meaning members' individual yeas and nays were not recorded. Radel later voted in favor of a broader food stamps bill that included Hudson's measure.
In support of his drug testing legislation, Hudson cited the many state legislatures around the country that had considered similar requirements for other means-tested programs in recent years.
"This is a clear and obvious problem in our communities as nearly 30 states have introduced legislation to drug test for welfare programs," Hudson said. "We have a moral obligation to equip the states with the tools they need to discourage the use of illegal drugs."
Most of the state legislation was authored by Republicans. Oftentimes, state Democrats responded by suggesting lawmakers should be subject to tests as well. If the government's going to make sure recipients of taxpayer-funded benefits are clean, the argument went, then why not also make sure the recipients of taxpayer salaries are clean, too?
In June, Rep. Jim McGovern (D-Mass.) made that very suggestion when he questioned why recipients of crop insurance and other government benefits weren't also targeted for drug tests like people on food stamps.
"Why don't we drug test all the members of Congress here," McGovern said shortly before the drug-testing measure passed. "Force everybody to go urinate in a cup or see whether or not anybody is on drugs? Maybe that will explain why some of these amendments are coming up or why some of the votes are turning out the way they are."
The fate of the food stamp drug testing provision is in the hands of a House-Senate conference committee hashing out differences between food stamp and farm legislation that passed the two chambers. It's got a chance. Last year, Congress passed a law to let states drug-test some unemployment insurance recipients.
Radel apologized Tuesday for his cocaine bust and said he'd seek treatment.
"I struggle with the disease of alcoholism, and this led to an extremely irresponsible choice," he said.
WASHINGTON — Rep. Trey Radel, R-Fla., was caught buying drugs as part of a federal investigation into a Washington, D.C., drug ring last month and is being charged with cocaine possession, according to a senior Drug Enforcement Administration official.
The official, who was not authorized to speak publicly about the case, said several federal agencies working as part of a task force arrested a dealer who told them one of his cocaine customers was a congressman. The dealer, working with federal agents, set up a buy on Oct. 29, and Radel, a freshman congressman first elected last year, purchased the cocaine, the official said.
FBI agents later went to Radel's apartment, where they detained him, the official said. Radel hired a defense attorney who negotiated charges with a prosecutor, the official said. Law enforcement agents never handcuffed Radel or took him to jail, the official said.(I imagine he got to keep his stash too- Earl).
Radel will appear Wednesday in District of Columbia Superior Court to face the misdemeanor cocaine possession charge. Charging documents from the U.S. attorney's office say Radel "unlawfully, knowingly and intentionally" possessed "a quantity of cocaine."
The charge is a misdemeanor and carries a maximum of 180 days in prison and/or a fine of $1,000, according to the U.S. attorney's office.
"I'm profoundly sorry to let down my family, particularly my wife and son, and the people of Southwest Florida," Radel said in a statement released Tuesday. "I struggle with the disease of alcoholism, and this led to an extremely irresponsible choice. As the father of a young son and a husband to a loving wife, I need to get help so I can be a better man for both of them."
Radel continued: "Believe me, I am disappointed in myself, and I stand ready to face the consequences of my actions. However, this unfortunate event does have a positive side. It offers me an opportunity to seek treatment and counseling. I know I have a problem and will do whatever is necessary to overcome it, hopefully setting an example for others struggling with this disease."
Radel, 37, represents Florida's 19th Congressional District, centered in the Fort Myers-Naples area, in a seat that was vacated by Republican Connie Mack when he made an unsuccessful bid for the U.S. Senate.
Radel is a former radio host, TV reporter and newspaper owner who was swept into office with Tea Party support. He was born and raised in Cincinnati, where his family owned a funeral home company.
A spokesman for House Speaker John Boehner, R-Ohio, said the incident is "between Rep. Radel, his family and his constituents."
"Members of Congress should be held to the highest standards and the alleged crime will be handled by the courts," Boehner spokesman Michael Steel said.
Wow, Earl, that was different!!
Love that rendition of Bohemian Rhapsody...
Actually, it was to lighten the mood- LOL
I, love a "live" band. There interpretations always make me smile.
They, have this story about a car going over the cliff, of a mountain and hearing the eight track player still going.
LOL- Do you remember the eight track player ???
They said it was dragging and repeating and they heard "music, we'd never heard before".
LOL- sounds like an eight track player to me.
Remember, how the eight track would cut off your favorite song???
Well, mine dragged too, and I kept that thing in the garage and played it, over and over and over, till the tapes wore out. Sloowwly.
Sloowly, I learned guitar riff's like this-
My twitter updates
My kunena updates
Re: Are Americans too dumb for democracy? Scientists.. in Geopolitcal News Talk on Sunday, 04 March 2012 18:31
Limiting Executive Compensation: the Swiss Example
[quote]Those CEOs are paid peanuts compared to Hed...
Limiting Executive Compensation: the Swiss Example
Those CEOs are paid peanuts compared to Hedge Fund...
Limiting Executive Compensation: the Swiss Example
[quote] I've read a statistic that says that a CEO...
Limiting Executive Compensation: the Swiss Example
I've read a statistic that says that a CEO of one ...
Limiting Executive Compensation: the Swiss Example
...But I also note a change in our favourite bulli...
Limiting Executive Compensation: the Swiss Example
Yes, it is deplorable what our CEOs can get away w...
The Fourth Reich
Great article Jeff, I fear that you are very proph...
The Fourth Reich
Owatica, I agree with your comments to dgierl. Als...
The Fourth Reich
For those interested in discussing this rather con...
The Fourth Reich
To dgierl... I do not believe the People stopped ...