Moral deafness pervades the culture arriving on the back of freely-dispensed taxpayer cash? And whence cometh the bankers?*
By Pam Martens and Russ Martens
November 20, 2014
Shawn D. Miller
Depending on where and when you got your news yesterday on the tragic death of Shawn D. Miller, a Managing Director of Wall Street mega bank, Citigroup, you were either emphatically told he died of a suicide or you were led to believe he was murdered. By late evening yesterday, the story had disintegrated into wild speculation. "The New York Daily News" ran this stunning headline, based on anonymous sources, at 9:22 p.m.: “Banker, 42, slashed his own throat in Manhattan bathtub during drug- and booze-filled bender: sources.”
It is becoming abundantly clear that if you work for a major Wall Street firm and die a sudden death, it will be shaped, molded, twisted and contorted until it fits with the suicide narrative – no matter how strongly the facts argue otherwise.
This is what we can reliably report this morning: Police were called to the scene at 120 Greenwich Street at 3:11 p.m. on Tuesday, November 18, a trendy, upscale area of Tribeca in Lower Manhattan. A friend of Miller’s had become concerned when he could not reach him by phone and called the doorman of the building to ask him to check on him. The doorman found Miller in the tub of his bathroom with knife lacerations to the throat and arms and called the police. EMS responders declared Miller dead at the scene.
All of this occurred on Tuesday afternoon, giving the "New York Post" plenty of time to check and double check their facts with the New York Police Department. In an on line post at the "New York Post" web site at 6:30 a.m. yesterday – Wednesday, the day after the death – the "New York Post" ran the following bold headline: “Banker found dead with throat slit in apparent suicide: cops.” That article reported that the police believed it was a suicide because “a knife was found under his body, sources said.”
But at 3:14 p.m. yesterday, the international wire service, "Reuters," reported that “no weapon was found.”
At 4:05 p.m. yesterday, the "New York Post" ran a new headline: “Hunt on for man last seen with dead Citigroup exec.” This article states that “Police have not yet found the weapon used to cut Miller’s throat,” confirming what was reported by "Reuters" less than an hour earlier.
But then came the outrageous headline at the "New York Daily News" at 9:22 p.m. last evening, based on unnamed sources, suggesting that Miller had gone on a drug- and booze-filled bender and killed himself. The newspaper reported: “When crime scene investigators moved Miller’s body, they discovered a knife under him, leading them to believe he slashed his own throat and collapsed into the tub on top of the weapon, sources said.”
The wild and contradictory reporting instantly reminded us of how the London dailies had reported on the tragic death of JPMorgan Vice President, Gabriel Magee, in January of this year. Magee’s body was found in a pool of blood on a ninth floor landing of JPMorgan’s European headquarters building in London.
The "London Evening Standard" tweeted: “Bankers watch JP Morgan IT exec fall to his death from roof of London HQ,” which linked to their article declaring that “A man plunged to his death from a Canary Wharf tower in front of thousands of horrified commuters today.”
The "London Evening Standard"’s reporting was flatly contradicted by the "Sunday Times," which reported that “Gabriel Magee’s body lay for several hours before it was found at 8am last Tuesday.”
No single witness was ever identified by the police to say they had observed Magee plunging from the top of the building. The ninth floor landing was accessible from an inside stairway of the building, meaning his body could have arrived there through means other than a fall.
Both Citigroup and JPMorgan have paid billions of dollars to settle fraud charges by regulators. Both are also under investigation by the U.S. Justice Department. In addition, both banks hold life insurance on many of their employees. When an employee dies, the death benefit is paid to the corporation tax free.
The practice is called Bank-Owned Life Insurance (BOLI). Just four of Wall Street’s largest banks (JPMorgan, Bank of America, Wells Fargo and Citigroup) hold a total of $68.1 billion in Bank-Owned Life Insurance assets according to their regulatory filings. According to Michael Myers, an expert on BOLI, those assets could potentially mean that just these four banks are holding $681 billion in face amount of life insurance on their workers, or possibly even more.
See Related Articles:
Profiteering on Banker Deaths: Regulator Says Public Has No Right to Details
Banking Deaths: Why JPMorgan Stands Out
Three New JPMorgan IT Deaths Include Alleged Murder-Suicide
Suspicious Deaths of Bankers Are Now Classified as “Trade Secrets” by Federal Regulator
JPMorgan Vice President’s Death in London Shines a Light on the Bank’s Close Ties to the CIA
Suspicious Death of JPMorgan Vice President, Gabriel Magee, Under Investigation in London
As Bank Deaths Continue to Shock, Documents Reveal JPMorgan Has Been Patenting Death Derivatives
Silicon Valley exec threatens the journalists who cover him. Where does the financing behind him come from? Round up the usual suspects.
*Lockheed learned a number of things from the L-1101 experience. First and foremost, it didn't pay to compete in the private sector. Instead, the company shifted gears; these days 80 percent of its business comes from federal government contracts. Moreover, Lockheed would load the government with its own people and then hire former defense department employees, creating a revolving door that would guarantee friends in the right places. That goal, of course, has been achieved and sustained.
Also in the wake of the L-1011 debacle, Lockheed's business practices became aggressive in the extreme. It charged the Pentagon $646 for a toilet seat and delivered C-5A transport planes - that cost millions of dollars - without installing thousands of essential parts. It paid bribes to foreign officials to help unload planes no one wanted, including giant long-distance transports to Indonesia, the Philippines, Brazil and Italy, until the passage of the Foreign Corrupt Practices Act of 1977 made such actions illegal. Undeterred, in 1995 Lockheed paid an Egyptian official $1.2 million to secure a contract for three C-130 cargo planes.
A Lockheed executive promised a federal judge that the company would henceforth make a "commitment to the highest ethical standards of conduct," but this was not until it was obliged to pay $145.3 million in penalties. Also, in 1994, Lockheed received a $13 million fine under the Arms Export Control Act when it supplied information that could have been used to improve the accuracy of Chinese ballistic missiles. The U.S. government charged Lockheed with 30 violations of arms export laws in connection with having aided Chinese satellite technology.
Lockheed also learned never again to miss out on the chance to gobble up other defense contractors or merge with them on favorable terms. After developing the F-22 (later known as the F/A 22) with General Dynamics and Boeing, Lockheed took over General Dynamics' Forth Worth aircraft division. And in 1995, it made the decision that would change the face of the industry. Lockheed would merge with Martin Marietta, which itself had gobbled up the aerospace division of General Electric. President Clinton wanted the merger so a new, more technologically advanced company could emerge, capable of building a new Joint Strike Fighter supersonic warplane.
Lockheed met secretly with its financial advisor, Morgan Stanley, which considered the deal beneficial, at least to the stock market. Dick Cheney served on the Board of Morgan Stanley. His 2004 financial disclosure statement lists Lockheed stock options and $50,000 in Lockheed stock, but also investments in a number of Morgan Stanley funds. In 2000, "The New York Times" reported that "Mr. Cheney has a much larger brokerage account at Morgan Stanley Dean Witter, on whose board he serves, but he did not report any trades in that account on his and his wife's tax returns.... Mr. Cheney and his wife Lynne had previously disclosed only the first two pages of their tax returns for 1990 through 1999, holding back the supporting documentation that show details of investment income."
Overall, the new Lockheed Martin received about $1 billion from U.S. government coffers for costs related to the merger, which as Geov Parrish noted in Mother Jones, included "approximately $31 million" paid in executive bonuses.
But all did not go well with the merger. Lockheed Martin incurred further debt when it acquired the defense electronics and system integration business of Loral Space & Communications. Joint ventures with Russia to launch satellites also cost Lockheed Martin a considerable amount of money. Lockheed poured almost a billion dollars into the ventures as of 1999 before security issues limited the number of Russian launches of U.S. built satellites to 20.
Then, in 1999, with profits tumbling, Vance Coffman, the chairman and now CEO, shook up the company, reorganizing its management structure to create what it described as a "new customer focused organizational realignment." In short, it was a strategy designed to respond to another lesson learned in the course of doing business: By becoming part of the decision-making process, Lockheed Martin could ensure that defense budgets would expand and not contract.
The shakeup got into high gear as the price of its shares tumbled to its all-time low of $16.375. Executives left in droves. Lockheed Martin announced the retirement of Peter Teets, the company's president and chief operating officer. (Two years later Teets was appointed as undersecretary of the Air Force in the Bush administration.) Coffman chaired a search committee for new blood, eventually appointing as CFO (and in 2001, CEO) Robert J. Stevens, formerly a vice president of Lockheed Martin's strategic development organization. Stevens, says Jackson, is "as straight arrow as you get, an all-American guy," who "polishes his own shoes."
While working as head of strategic planning, Stevens had devised a strategy he could implement as CEO to turn Lockheed Martin around and make it the master of its fate. And as he served on Bush's Commission to Examine the Future of the United States Aerospace Industry from 2001 to 2002, he had the president's ear.
In 1999, when Stevens left strategic planning to become chief financial officer, Jackson became vice president for strategy and planning, their careers intersecting at a crucial time. Stevens developed the strategy for Lockheed to outpace Boeing, General Dynamics, Raytheon and Northrop Grumman as the top Pentagon contractor through aggressively pursuing federal contracts while eschewing the risks of the marketplace in the private sector. He started pouring large sums of PAC money to members of Congress to garner their cooperation and hired the armies of lobbyists for which Lockheed Martin became famous.
According to Jackson, Lockheed Martin has hired "200 lobbyists," who in turn "hire other lobbyists" to work on Lockheed accounts. (One of them is Katherine Armstrong, daughter of a policy aide to Ronald Reagan. It was Katherine Armstrong who hosted the infamous Dick Cheney hunting party at Armstrong Ranch where Cheney accidentally shot a leading Republican lawyer.) Fees to lobbyists in a given year likely exceed $10 million.
When the United States gives military aid to its allies, the benefits accrue to Lockheed Martin, too. Israel, for example, spends much of the $1.8 billion a year it receives in military aid from the U.S. on planes and missile systems from Lockheed - and that's in years when it is not actively at war with Hezbollah. Lockheed's market is worldwide, selling F-16 fighters, surveillance software and other equipment to more than 40 countries. The United Arab Emirates, forced to give up its deal to run American ports through its state-run Dubai entity, has been a major customer, spending more than $6 billion on F-16 fighters in 2000 as it looked forward to the Bush presidency. No wonder Bush threatened to veto legislation barring the ports deal.
Stevens has boasted that Lockheed Martin not only creates the technology, it makes military policy as well. He told "The New York Times" in November of 2004 that Lockheed stands at "the intersection of policy and technology," which, he observed, "is really a very interesting place to be. We are deployed, entirely in developing daunting technology" that "requires thinking through the policy dimensions of national security as well as technology." He acknowledges "this is not a business where in the purest economical sense there's a broad market of supply and demand."
And although he may shine his own shoes, Stevens is paid $7 million a year, not counting bonuses and stock options. In 2002, Stevens left Bush's aerospace commission, becoming a member of the influential Council on Foreign Relations, and Jackson left Lockheed Martin to work on the Project on Transitional Democracies and the Committee for the Liberation of Iraq. Stevens and Jackson were tag team wrestlers, Mr. Inside and Mr. Outside, of Team Lockheed. And, increasingly, the distinction between Lockheed Martin and the government began to blur as the war in Iraq became inevitable.
With the 2002 election over and Democrats increasingly hawkish on Iraq, Bush made his State of the Union address on January 29, 2003, uttering this now famous line: "The British government has learned that Saddam Hussein recently sought significant quantities of uranium from Africa." The threat of Saddam Hussein was established and the American people bought it. And the person claiming responsibility for leaving that line in was Hadley.
In February of 2003, Jackson helped draft a declaration for the 10 Eastern European foreign ministers - all countries up for NATO membership and associated with Jackson's expansion efforts - that became known as the "Vilnius Ten," rebuking French President Jacques Chirac's opposition to attacking Iraq. The declaration stated: "The newest members of the European community agree that we must confront the tyranny of Saddam Hussein and that the United Nations must act now." Jackson achieved this success when he attended a dinner party at the Slovak embassy in Washington and told assembled diplomats from the countries, according to The American Prospect's John B. Judis, that signing the declaration would help win U.S. approval of their membership.
On March 20, 2003, America attacked Iraq. "Shock and Awe" began at night, with Lockheed Martin Stealth F-117 Nighthawks leading the assault. Looking like gigantic, venomous black bats, the V-shaped killers with their sharply spiked tail wings swept over Baghdad in search of the concrete shelters and reinforced bunkers where it was believed Saddam Hussein and his inner circle were concealed. Light ground forces moved swiftly toward Baghdad. An American blitzkrieg had been launched.
The F-117 had been reconfigured to carry a 2,000-pound bunker buster bomb, accurately guided by new technology to hit its target at a vertical impact angle with a warhead called the BLU-109. The Lockheed Missiles and Space Company manufactured it. Lockheed's Keyhole and Lacrosse satellites beamed images from the war back to the military, employing its Theater Battle Management Core Systems, specialized software used to coordinate communications between intelligence systems and ground forces to assist the air campaign. Lockheed U-2 and the SR-71 Blackbird spy planes joined with its F-16 and the F/A 22 jet fighters in support of the F-117s. Army and Marine ground troops unleashed Lockheed Hellfire laser-guided anti-armor missiles to demolish helicopters and land attack vehicles, and PAC-3 missiles, a highly agile, "hit-to-kill" interceptor, to provide air defense for ground combat forces. Lockheed Javelin portable missiles were used to considerable effect, particularly later in the invasion of Fallujah. Lockheed's "arsenal of democracy" was in full display.
Five days later, Bush asked Congress for $74.7 billion to pay for six months of combat, separate from the regular defense budget. But by June, it had become obvious that the "uranium from Africa" intelligence had been deeply flawed and erroneous. Acknowledging the CIA had warned him in two separate memos that the Agency would not stand by the information suggesting Iraq was trying to buy yellowcake uranium in Niger to reconstitute a nuclear weapons program, Stephen Hadley had this to say about it: "When the language in the drafts of the State of the Union referred to efforts to acquire natural uranium, I should have either asked that they - the 16 words given to that subject - be stricken, or I should have alerted DCI Tenet. And had I done so, this would have avoided the whole current controversy. And in my current position, I am the senior-most official within the NSC staff, directly responsible for the substantive review and clearance of presidential speeches. The president and the national security advisor look to me to ensure that the substantive statements in those speeches are the ones in which the president can have confidence. And it is now clear to me that I failed in that responsibility in connection with the inclusion of these 16 words in the speech that he gave on the 28th of January."
Yet when Colin Powell resigned as secretary of state and National Security Advisor Condoleezza Rice took his place, Stephen Hadley was promoted to take her position as national security advisor. Hadley's "error" had enabled Bush to go to war, the big payoff for Lockheed Martin.
But how had the British government gotten the intelligence on the African uranium so wrong? How had MI6, the most fabled intelligence service in the world, allowed itself to be misled by dubious sources? While Tony Blair and his government deny any pressure was put on its intelligence services, the stakes were high for Britain to join America in the war. And here again Lockheed loomed large.
In October of 2001, the Pentagon announced it was awarding Lockheed Martin a nearly $20 billion contract for the next phase of the development of the Joint Strike Fighter, called the F-35. To the industry, it was "the deal of the century," despite the fact that the century had only just begun. In beating out Boeing, Lockheed asserted itself as the undisputed leader of military contractors for decades to come, if not forever.
But it did not go it alone. It brought in on the deal not only Northrop Grumman, but also the beleaguered BAE Systems, Britain's, and Europe's, largest defense contractor. Under the terms of the contract, BAE was responsible for building the aft fuselage and the tails; Lockheed the forward fuselage and wings; and Northrop the middle fuselage.
On September 30, 2005, following Britain's participation in the invasion of Iraq and with its ground troops still on the ground as other coalition partners, such as Spain, pulled out their troops, according to John A. Smith of Lockheed's Fort Worth operation: "Lockheed Martin and the U.S. Department of Defense formalized a $25.7 billion Joint Strike Fighter system development and demonstration contract that effectively replaces the $19.7 billion SDD contract under which the JSF was operating previously." As this was all covered by the fiscal year 2005 Congressional budget, it "requires no additional Congressional funding."
Smith explains that nine countries will use the F-35 - the United States, the U.K., Italy, the Netherlands, Turkey, Canada, Australia, Denmark and Norway - with all nine negotiating for what they will buy in the future, with sales worth $257 billion. (Israel has recently indicated its intention of converting its air force to F-35s in a deal worth $5 billion.) He explains that this is the fifth year of 12 in the systems development stage. Smith further explains that there is "no fixed percentage" as to how the three participating companies receive money, which is paid out on an "as needed" basis.
Bush couldn't go into Iraq without a major ally and Lockheed knew it. To sweeten the pot for Blair, Lockheed dragged BAE Systems into the F-35 deal. When BAE still struggled prior to the war (Goldman Sachs reported that BAE would have to cut its dividend), Lockheed began renegotiating the contract - with the new version unveiled in 2005, giving BAE billions more to be paid "as needed." This put BAE back on its feet, able to build the Typhoon jet fighter for sale to Saudi Arabia in a $70 billion deal, saving 10,000 BAE jobs and 4,000 Rolls-Royce jet engine building jobs.
Meanwhile, a government accountability office report for Congress says the Defense Department is investing too heavily in the F-35 without knowing whether the aircraft will work properly. The report criticizes the Pentagon plan to spend $49 billion on 424 fighters before full testing on the stealth plane is completed in 2013. "Starting production before ensuring the design is mature through flight testing significantly increases the risk of costly design change that will push the program over budget and behind schedule," the report concludes. But that is all light years away, as far as Lockheed and BAE are concerned. As Bob Elrod, a senior executive at Lockheed's fighter plane division boasted, "We're looking at world domination of the market."
To make things even better for Blair, Lockheed brought the British in on the new presidential helicopter deal, notwithstanding the loud protests of then-Democratic Senator Joseph Lieberman from Connecticut, where Sikorsky - America's leading helicopter manufacturer and the losing bidder - is located.
Meanwhile Jackson closed down the Committee for the Liberation of Iraq in June 2003 because its human rights rationale for the war had been abandoned.
"We were cut out," Jackson explains, "after the whole thing went to Rumsfeld. The Department of Defense didn't want anyone looking over their shoulder. Rumsfeld took it all away from State." Jackson had lined up people like Vaclav Havel of the Czech Republic, Natan Sharansky of Israel and Carl Bildt, the prime minister of Sweden, to support the Committee for the Liberation of Iraq, but Bush and Rumsfeld took off in another direction. Stephen Hadley explained to Jackson that "terrorism and WMDs" were now the rationale for the war, not human rights.
News of torture at Abu Ghraib prison undermined all of Jackson's efforts and, to his credit, he called for Rumsfeld's resignation. He acknowledges that things are not going well in Iraq, but still sees the removal of Saddam Hussein as morally justified. He declines to predict how it will all end.
Poland, one of the countries Bruce Jackson helped gain membership in NATO, also joined the "coalition of the willing," sending troops to Iraq as a desperate Bush scrambled to find allies in the war. Poland also spent 976 million Euros (more than $1.6 billion) in 2006 upgrading its military, almost all of it going to Lockheed Martin for the first eight F-16 warplanes to be delivered this year, part of a total of the 48 F-16s it has ordered. Mounted on a wall in Jackson's apartment is a glass case containing an ornate antique Polish sword and scabbard, a gift in appreciation of his efforts. Lockheed Martin must have been appreciative, as well: Jackson can tell you the exact price of Lockheed Martin shares.
But Jackson and Hadley - promoted to national security advisor despite his "error" on the uranium - weren't the only beneficiaries among the core group of war advocates. In Washington, the revolving door is already working to the benefit of many involved. Randy Scheunemann, for instance, the president of the Committee for the Liberation of Iraq, became president of the Mercury Group, which lobbied for Lockheed Martin and other corporate clients, before setting up his own firm, Scheunemann and Associates, and then Orion Strategies, which, among other things, consults with companies and countries seeking to do business in Iraq. Rend Al-Rahim Francke, member of the Committee for the Liberation of Iraq and founder of the Iraq Foundation that facilitated the film Voices of Iraq, was appointed Iraqi ambassador to the United States in November of 2003.
When Assistant Secretary of Defense Powell Moore left the government in 2005, though not an attorney, he joined the powerful international law firm McKenna Long & Aldridge, which specializes in aerospace and defense, as managing director of federal government relations.
According to the firm's description of its activities, it provides "legal services to some of the largest and fastest growing companies in the aerospace, electronics and information technology field, names such as Lockheed Martin, Boeing, Northrop Grumman, SAIC and TRW."
Edward C. Aldridge, who was the undersecretary of defense for acquisitions, technology and logistics responsible for the November 2001 approval of the Lockheed contract to build F-35, left government in 2003 and now serves on Lockheed's board of directors. That's Washington in an era when the war companies run things.
What, if anything, can be done about the oligarchy of the war companies and the K Street lobbyists pulling the strings in our capital? Is there no way to break the iron triangle? Jackson agrees that contractors doing business with the government should be prohibited by law from making political contributions. He says the contractors would favor this because the situation is not as most people think it is. He insists it's the elected officials who "shake down" the contractors for contributions and not the other way around. Of course, this may be the best indicator, in a roundabout way, of just how powerful the war companies are - in the name of special interest reform the legislators would be cut out of the action from the flow of defense money they can apparently no longer control.
Former Long Island Democratic Representative Otis Pike, who served in the Marines and was a hawk on Vietnam, once said privately, while still in office, that the only solution was to "nationalize" the defense industry. Pike's attitude regarding national security evolved as a result of experiences chairing the Pike Committee investigating abuses by the CIA in the 1970s. Since half of Lockheed Martin's business now comes from its IT division, there is no reason why it should not be broken up under the anti-trust laws into two separate companies, without any damage to its ability to innovate. Also, a war-profits tax of the type imposed by Britain on its military contractors during World War I to help pay for the cost of the war - since they were profiting from it - might be in order.
But none of this is the concern of the beautiful and the brilliant young techies, black, white, brown and yellow, male and female, gay and straight, who throng to Washington to work for the subcontracting firms locating there in droves. In March of 2005, Lockheed Martin acquired Sytex, which provides "personnel and technological solutions to the Pentagon's Northern Command, the Army Intelligence and Strategic Command and the Department of Homeland Security," making Lockheed one of the biggest recruiters of private interrogators, "unaccountable to any legal authority or disciplining procedure," as Corpwatch puts it.
In March of 2006, Lockheed Martin won the lion's share of a $20 billion contract by the U.S. Army to develop cutting-edge technology to support the Army's "reconnaissance, communications, surveillance and intelligence gathering in combat situations." According to Lockheed spokeswoman Wendy Owen this was a "major victory" for Lockheed Martin, which has been aggressively promoting its systems and information technology divisions, which account for half of its business. It already provides surveillance services for United States ports.
That night, March 16, when the local press announced the $20 billion contract, Cafe Citron, off Dupont Circle, was packed with revelers. Latin music throbbed as they laughed and shouted, partying with abandon, knocking down the drinks. For those in the war business, life is good.