Chronology

DATEEVENTCATEGORY
19340131Gold Reserve Act creates the Exchange Stabilization Fund (ESF). “The fund began operations as of April 27, 1934, financed by $2 billion of the $2.8 billion paper profit that the government realized from devaluation, that is, from raising the price of gold to $35 an ounce from $20.67. This sum was deposited to its account with the Treasurer of the United States (Treasury AR 1935, Exhibit 40, p. 265). The fund was authorized to deal in gold and foreign exchange in order to stabilize the exchange value of the dollar, to invest any portion of the fund not currently required for stabilization purposes in direct obligations of the United States." [Source: Anna J. Schwartz, “From Obscurity to Notoriety: A Biography of the Exchange Stabilization Fund.”] The ESF is excluded from the Congressional appropriations process and Treasury is not required to justify its expenditures or investments to Congress.law
19410000The War Powers Act authorizes the U.S. Treasury’s Exchange Stabilization Fund to serve as a holding pool for captured Nazi valuables—currency, gold, precious metals, and even stocks and bonds—seized as the Germans or other Axis governments attempt to smuggle them out of Europe.law
19470000The U.S. National Security Act of 1947 approves the "black budget." This legislation also creates the Central Intelligence Agency and the National Security Council.law
19490527CIA Act passes into law. permitting the Central Intelligence Agency to use confidential fiscal and administrative procedures and exempting it from many of the usual limitations on the use of federal funds. The Act (Section 6) also exempts the CIA from having to disclose its “organization, functions, officials, titles, salaries or numbers of personnel employed.” It also creates a program called PL-110 to handle defectors and other “essential aliens” outside normal immigration procedures, as well as give those persons cover stories and economic support.law
19620213The Federal Open Market Committee (FOMC) authorizes open market transactions in foreign currencies for the account of the Federal Reserve System. Before this, the Federal Reserve Bank of New York served as the agent only of the ESF in executing its limited foreign currency transactions. Since that date, it has served both the ESF and the Federal Reserve System.Event law
19680524The Securities and Exchange Commission (SEC) promulgates Rule 240.0-6 shielding classified information and documents from disclosure requirements under federal securities laws and providing for the disclosure of such information privately to the SEC: “Any requirement to the contrary notwithstanding, no registration statement, report, proxy statement or other document filed with the Commission or any securities exchange shall contain any document or information which, pursuant to Executive order, has been classified by an appropriate department or agency of the United States for protection in the interests of national defense or foreign policy.” law
19700000An amendment to the Gold Reserve Act of 1934 allows the Secretary of the Treasury, with authorization of the President, to use ESF funds to “deal in gold, foreign exchange, and other instruments of credit and securities.”law
19720000The Financial Accounting Foundation (FAF) is organized as a non-stock Delaware corporation with the goal of ensuring objectivity and integrity in financial reporting standards. The foundation is responsible for:

Establishing and improving financial accounting and reporting standards;
Educating constituents about those standards;
Overseeing the administration, and finances of its standard-setting Boards, the Financial Accounting Standards Board (FASB) and the Governmental Accounting Standards Board (GASB), and their advisory councils;
Selecting the members of the standard-setting boards and advisory councils; and
Protecting the independence and integrity of the standard-setting process.

The FAF is funded from the accounting support fees paid by public-company issuers of securities, subscription and publication revenues, and investment income. It oversees the FASB and GASB and selects their members. The Board of Trustees of the FAF is selected by a nomination process that involves several organizations from investing, accounting, business, financial, and governmental sectors, but new members are ultimately selected by the existing Board. The selection process was amended in 2008 to reduce private sector influence on the Board of Trustees and its oversight of the FASB and GASB. [Source: Wikipedia]
Corporate law
19730701Formation of the Financial Accounting Standards Board (FASB), the independent, private-sector non-profit standards- setting organization the primary purpose of which is to establish and improve Generally Accepted Accounting Principles (GAAP) within the United States in the public's interest. The Securities and Exchange Commission (SEC) designates the FASB as the organization responsible for setting accounting standards for public companies in the U.S. The FASB replaces the American Institute of Certified Public Accountants' (AICPA) Accounting Principles Board (APB). The FASB is funded by the Financial Accounting Foundation, which also oversees its operations. The FASB was conceived as a full-time body to ensure that Board member deliberations encourage broad participation, objectively consider all stakeholder views, and are not influenced or directed by political/private interests. [Source: Wikipedia]Corporate law
19731220The SEC, in Accounting Series Release No. 150 (ASR 150), states that FASB pronouncements will be considered by the SEC as having “substantial authoritative support.” In that release, the Commission reaffirms an earlier policy statement contained in Accounting Series Release No. 42 (ASR 4) that financial statements, prepared in accordance with accounting principles for which there is no substantial authoritative support, will be presumed misleading, and that footnotes or other disclosures will not avoid this presumption.law
19780000An amendment to the Gold Reserve Act (31 U.S.C.§ 5302 (c) (1)) provides for a monthly statement to the House and Senate Banking Committees by the Treasury "on all agreements made or renewed, all transactions occurring during the month, and all projected liabilities" of the ESF, but the status of the decisions of the Secretary of Treasury as final remains in place. A later amendment provides that Congress, in addition to the President, receives reports on ESF operations. [Source: Schwartz] Law Treasury
19810000President Reagan issues Executive Order 12333 to allow the outsourcing of classified projects to private contractors. The order states:

“Agencies within the Intelligence Community are authorized to enter into contracts or arrangements for the provision of goods or services with private companies or institutions in the United States and need not reveal the sponsorship of such contracts or arrangements for authorized intelligence purposes. Contracts or arrangements with academic institutions may be undertaken only with the consent of appropriate officials of the institution.” (Section 2.7)
law
19811204Issuance of Executive Order 12333, “United States Intelligence Activities” by President Ronald Reagan, which, among other things, prohibits GAO from auditing classified activities.law
19820402Issuance of Executive Order 12356, “National Security Information,” containing U.S. classification policy. Information is considered classified if it concerns:

(1) Military plans, weapons, or operations;
(2) The vulnerabilities or capabilities of systems, installations, projects, or plans relating to the national security;
(3) Foreign government information;
(4) Intelligence activities (including special activities) or intelligence sources or methods;
(5) Foreign relations or foreign activities of the United States;
(6) Scientific, technological, or economic matters relating to the national security;
(7) United States Government programs for safeguarding nuclear materials or facilities;
(8) Cryptology;
(9) A confidential source; or
(10) Other categories of information that are related to the national security and that require protection against unauthorized disclosure as determined by the President or by agency heads or other officials who have been delegated original classification authority by the President. Any determination made under this subsection shall be reported promptly to the Director of the Information Security Oversight Office.
law
19820908The Federal Managers’ Financial Integrity Act (FMFIA) amends the Accounting and Auditing Act of 1950 to require ongoing evaluations and reports of the adequacy of the systems of internal accounting and administrative control of each executive agency. It requires agencies to establish internal control and financial systems that provide reasonable assurance of achieving the three objectives of internal control, which are:

Effectiveness and efficiency of operations;
Compliance with regulations and applicable laws; and
Reliability of financial reporting.

In addition to requiring federal agencies to establish internal control over their programs, financial reporting, and financial management systems, the FMFIA requires the agency head to provide an annual Statement of Assurance on whether the agency has met these requirements.
HUD
19840000The Government Accounting Standards Board (GASB), an independent, non-political organization formed for the purpose of performing functions like the FASB for state and local governments, establishes rules that require state and local governments to report clear, consistent, and transparent financial information to their constituents. The GASB is one component of a non-profit standard-setting group that is autonomous of any corporate or government body. This group includes the Financial Accounting Foundation (FAF), the Financial Accounting Standards Board (FASB), the Financial Accounting Standards Advisory Council (FASAC), and the Governmental Accounting Standards Advisory Council (GASAC). GASB standards are recognized by governments and the accounting profession as the official source of U.S. Generally Accepted Accounting Principles (U.S. GAAP) for state and local governments. Event Law
19860000The Uruguay Round of the General Agreement on Tariffs and Trade (GATT) begins, lasting until 1993.law
19861028The Government Securities Act of 1986 authorizes the Secretary of the Treasury to regulate brokers and dealers of government securities in conjunction with the SEC.Treasury
19820908Enactment of the Federal Managers’ Financial Integrity Act, requiring agencies to establish internal control and financial systems that provide reasonable assurance that the three objectives of internal control are achieved:

Effectiveness and efficiency of operations;
Compliance with regulations and applicable laws; and
Reliability of financial reporting.
law
19880106A series of unsuccessful federal efforts to assist the Farm Credit System eventually leads to the enactment of the Agriculture Credit Act (P.L. 100-233) on this date. This act provides federal financial assistance to prevent the Farm Credit System from defaulting on its debt. law
19901115The Federal Credit Reform Act of 1990 requires Federal agencies to set aside the subsidy cost of new credit assistance provided in the form of direct loans or loan guarantees. The subsidy cost will be the estimated long-term cost to the government of the loan or loan guarantee. The subsidy cost associated with each direct loan or loan guarantee, which the Administrator must set aside, may be funded by Federal appropriations, direct payment of a credit risk premium by the applicant, or a non-Federal infrastructure partner on behalf of the Applicant, or any combination thereof.law
19901115President George H.W. Bush signs the Chief Financial Officers (CFO) Act into law. According to the Government Accountability Office (GAO), this is the most comprehensive and far-reaching financial management improvement legislation since the passage of the Budget and Accounting Procedures Act of 1950. The CFO Act lays a foundation for comprehensive reform of federal financial management, establishing a leadership structure, providing for long-range planning, requiring audited financial statements, and strengthening accountability reporting.law
19901126Adoption of Federal Credit Reform Act of 1990.law
19930120Lloyd Bentsen becomes Secretary of the Treasury and serves until September, 1994.Treasury
19930808Enactment of Government Performance and Results Act (GPRA)—one of a series of laws designed to improve government performance management. The GPRA requires agencies to engage in performance management tasks such as setting goals, measuring results, and reporting their progress. To comply with the GPRA, agencies produce strategic and performance plans and conduct gap analyses of projects. The GPRA establishes project and strategic planning and sets up a reporting framework for agencies to show the progress they make toward achieving their goals. [Source: Wikipedia]law
19940900Sir James Goldsmith is interviewed by Charlie Rose. Goldsmith lobbies Congress not to pass the latest round of GATT or create the World Trade Organization (WTO).media
19941013Government Management Reform Act (GMRA) enacted. The CFO Act of 1990 mandated the preparation of audited annual financial statements for certain funds and accounts from a number of executive branch agencies, with 10 agencies selected to provide audited annual financial statements for all agency accounts. In the GMRA, the latter provision expands to every agency covered under the CFO Act (commonly referred to as "CFO agencies") and later to every executive agency in the Accountability of Tax Dollars Act of 2002. GMRA requires the Secretary of the Treasury to provide government-wide annual consolidated financial statements to be audited by the GAO. [Source: GAO]law
19950100The U.S. Treasury loans Mexico $12 billion from the ESF as part of a rescue package. What makes the loan notorious is that it does not require Congressional authorization but is made at the discretion of the Secretary of the Treasury, with the approval of the President.Treasury
19950101Creation of the World Trade Organization (WTO), replacing GATT (although GATT still exists as a treaty within WTO).event
19950111Robert E. Rubin becomes Secretary of the Treasury and serves until July 2, 1999.Treasury
19950129The Washington Post pulls from publication “The Crimes of Mena” by Sally Denton and Roger Morris. The article illuminates the arms trafficking operation run by Barry Seal at the Intermountain Regional Airport at Mena, Arkansas, while Clinton was governor and George H.W. Bush was Vice President and in charge of the National Security Council (NSC) run by Oliver North during Iran-Contra. Seal, who was assassinated in Feb. 1986, was carrying a personal phone book that included George H.W. Bush’s private phone number. Allegations are supported by IRS Agent Bill Duncan, Arkansas State Policy Investigator Russell Welch, and numerous documents, witnesses, and investigations. Duncan testifies before Congress that the IRS “withdrew support for the operations" (i.e., his investigations) and directed him to withhold information from Congress and perjure himself. Daniel Hopsicker is later to report in “Barry and the Boys” that Seal's operation at Mena grosses as much as $5 billion. The article is later published in Penthouse—reporting that western Arkansas had been a center of international drug smuggling during the 1980s and the headquarters of perhaps the biggest drug smuggling operation in history.Media, enforcement
19950419Oklahoma City bombing takes place, destroying HUD loan files for Region 6 (Arkansas and Texas included).event, HUD
19960200Treasury Department announces that it is suspending payment of interest on government securities in the Exchange Stabilization Fund’s portfolio in order to create additional borrowing power for the government under the debt ceiling that Congress is refusing to raise. This action, together with the use of the Fund for the Mexican rescue, brings the Fund to public notice after it had remained so long in obscurity. [Source: Anna Schwartz]Treasury
19960606The “Dark Alliance” series by Gary Webb starts running in the San Jose Mercury News, exposing the role of the CIA in cocaine trade through Mena, Arkansas into South Central Los Angeles. The Hamilton Securities Community Wizard geocoded software program includes maps showing a high concentration of HUD mortgage defaults in South Central LA.Media, enforcement
19960930The Federal Financial Management Improvement Act (FFMIA) builds on the CFO Act by emphasizing the need for agencies to have systems that can generate timely, accurate, and useful information with which to make informed decisions and ensure accountability on an ongoing basis. FFMIA requires the 24 major departments and agencies covered by the CFO Act to implement and maintain financial management systems that comply substantially with (1) federal financial management systems requirements, (2) applicable federal accounting standards, and (3) the U.S. Standard General Ledger (SGL) at the transaction level. FFMIA also requires auditors to report in their CFO Act financial statement audit reports whether the agencies’ financial management systems comply with FFMIA’s requirements. [Source: GAO]law
19961019Enactment of Government Accountability Act of 1996.law
19961105Re-election of Bill Clinton.event
19970000William J. Clinton Foundation is founded. The Clinton Foundation (founded as the William J. Clinton Foundation and, from 2013 to 2015, briefly renamed the Bill, Hillary & Chelsea Clinton Foundation) is a non-profit organization under section 501(c)(3) of the U.S. tax code. Former President of the United States Bill Clinton establishes the foundation with the stated mission to "strengthen the capacity of people in the United States and throughout the world to meet the challenges of global interdependence.” [Source: Wikipedia]event
19970000An amendment to the Gold Reserve Act (31 U.S.C.§ 5302(b)) provides that an ESF loan or credit to a foreign entity or government for more than six months in any twelve-month period requires the President to give Congress "a written statement that unique or emergency circumstances require the loan or credit for more than six months." [Source: Schwartz]Law
19970400Hamilton Securities Group holds an Advisory Board meeting at Safeguard Scientific. While there, President (Bill Crist) of the CalPERS pension fund—the largest in the country—says, “You don’t understand. It’s too late. They have given up on the country. They are moving all the money out in the fall [of 1997]. They are moving it to Asia.” He does not say who “they” are but indicates that it is urgent that Catherine Austin Fitts see Nick Brady (Chairman of Dillon Read, where Catherine was a partner, and Secretary of Treasury under Reagan and George H.W. Bush and her former supervisor at Dillon Read), as Hamilton Security Group’s data indicating that there is hope for the country might make a difference. (Catherine Austin Fitts thought at the time that he meant that the pension funds and other institutional investors would be shifting a much higher portion of their investment portfolios to emerging markets.)Event, Hamilton
19971014Hamilton Securities receives letters from HUD (1) canceling, (2) seizing funds owed to Hamilton for work performed, and (3) demanding the return of all HUD portfolio data. Although HUD’s letter states that the contract cancellation is “for convenience of the government,” newspaper accounts relate it to bid issues. Hamilton had reported to HUD in 1996 that the AT&T/Bell Labs error had been addressed by the appropriate HUD staff and dismissed as not material. There are intimations that Hamilton proprietary software programs like Community Wizard belong to HUD and that HUD should receive a free copy. All work, including Community Wizard and community databanks, comes to a halt; all efforts to encourage Congress to pass requirements for place-based disclosure stop. Shortly thereafter, Nicolas Retsinas (FHA Commissioner) falsely alleges to the press that Hamilton is under criminal investigation.Hamilton
19980121Stories on Monica Lewinsky proliferate in the general news. The Washington Post "postpones" its front-page investigative story about Hamilton Securities, which never runs.media
19980308Judge Stanley Sporkin approves seizure of the Hamilton Securities offices by the Department of Justice.Hamilton
19980309Counsel for Inspector General of HUD, Judith Hetherton, attempts to obstruct justice by throwing Hamilton’s paper copies of its accounting records into the building trash bin.Hamilton
19980309Hamilton files suit against HUD in Court of Federal Claims in an effort to recover amounts withheld for services rendered under its HUD contract represented by Claude Goddard. [Hamilton Securities Advisory Services, Inc. v. The United States (98-CV-169), U.S. District Court, United States Court of Federal Claims, Judge Marion Blank Horn]
Hamilton Sec Advisory Serv Inc. v. the US
Hamilton
19980422Hamilton files an affidavit in the pending case before Judge Sporkin, signed by Hamilton’s building property manager, stating that Judith Hetherton had moved paper copies of Hamilton’s accounting records into the building trash and taken photographs of it with her camera.Hamilton, enforcement
19980600Dark Alliance, by Gary Webb, is published by St. Martin’s Press.Media, enforcement
199809301998 FY end. $17.6B in undocumentable adjustments against Treasury at HUD and $1.7T at DOD.event, Treasury DOD HUD
19981218S.C. Gwynne, with reporting by Adam Zagorin, report in “Just Hide Me the Money” (Time Magazine) regarding the October, 1998 Citicorp/Travelers merger and the world of offshore banking:

“Citibank’s private-banking unit holds more than $100 billion, which makes it about the same size as the entire bank was in 1982. These funds are in turn part of a $17 trillion global pool of money belonging to what bankers euphemistically call ‘high-net-worth-individuals’—a pool that generates more than $150 billion a year in banking revenue. The numbers are impressive when you consider that except at a few sleepy British and Swiss institutions, the private-banking industry didn’t exist until the 1980s. Citibank predicted early this year that it would reach $1 trillion—that’s trillion with a T—in private-banking assets by the year 2010. And it faces some 4,000 competitors, from global dreadnoughts like Switzerland’s UBS to secretive banks in the tiny principality of Andorra to brokerages in Miami and accountancy firms in the Channel Islands.”
media, corporate
19990000Richard Grasso, Chairman of the New York Stock Exchange, travels to a rebel-held village in Colombia to meet with a Revolutionary Armed Forces of Colombia (FARC) commander. At that time, the GAO reported that FARC had assumed control of a majority market share of the Colombian cocaine trade.Event
19990625Hamilton Securities files complaint against Ervin & Associates in District of Columbia Superior Court.Hamilton
19990629DC Superior Court case by Hamilton Securities against Ervin & Associates is removed to U.S. District Court for the District of Columbia (1:99-cv-01698-LFO), Judge Stanley Sporkin, who later turns down Hamilton’s motion to remand the case to DC Superior Court.Hamilton
19990702Lawrence H. Summers becomes Secretary of the Treasury and serves until January 20, 2001.Treasury
19990812Daniel Hawke withdraws as counsel to Ervin & Associates to later take a position with the enforcement division of the Securities and Exchange Commission formerly run by Stanley Sporkin and is replaced by attorneys Craig Stephen Brodsky and Mark Polston.Hamilton
199909301999 FY end. $59.6B in undocumentable adjustments against Treasury at HUD and $2.3T at DOD.event, Treasury DOD HUD
20000322HUD Inspector General (IG) Gaffney testifies before House Committee on Government Reform, Subcommittee on Government Management, Information and Technology regarding $59B in undocumentable adjustments against Treasury:

“HUD used a financial statement report consolidation software called Hyperion Enterprise to prepare the financial statements. Reconciliation processes to identify discrepancies with Treasury fell behind schedule, and HUD had to make numerous adjustments to the general ledger fund balance with Treasury balances to make them agree with Treasury records. These adjustments were not made via the normal general ledger posting process. Rather, they were made directly to Hyperion Enterprise. At the time we discontinued our audit work, a total of 42 adjustments totaling about $17.6 billion had been processed in this manner to adjust fiscal year 1998 ending balances. An additional 242 adjustments totaling about $59.6 billion were made to adjust fiscal year 1999 activity."
HUD
20000500Testimony of the HUD Inspector General House Government Reform Committee: Statement
20000510Hamilton’s case against Ervin & Associates is reassigned to Judge Louis F. Oberdorfer.Hamilton
20000721Judge Oberdorfer grants Hamilton’s motion to unseal the qui tam case, revealing Ervin & Associates as relator.Hamilton
200009302000 FY end. $320B in undocumentable adjustments against Treasury at the Air Force and $161.6B at Navy and $1.1T (includes $320.8 billion from Air Force).Event, Treasury
20001100Kelly O’Meara story in Insight Magazine: “Why Is 59 Billion Missing from HUD?” Media, HUD
20001130Hamilton’s case against Ervin & Associates and its qui tam case are consolidated.Hamilton
20001231During the Clinton Administration, the Harvard Endowment grew from $4B to nearly $20B. After serving as Secretary of Treasury during the Clinton Administration, Bob Rubin returns to the Board of Harvard Corporation/Harvard Management. After serving as Secretary of Treasury during the Clinton Administration, Lawrence Summer returns to Harvard as President. After serving as Assistant Secretary of Housing-Federal Housing Commissioner, Nicholas Retsinas becomes head of the Harvard Center for Housing Studies.corporate
20010000William J. Clinton Foundation begins work when Clinton leaves the presidency, primarily to raise funds for the Clinton Library. David Resnick, formerly an accountant with Resnick, Fedder and Silverman specializing in HUD matters and a HUD and Hamilton contractor, serves as the Foundation’s CPA.corporate
20010120Paul H. O’Neil becomes Secretary of the Treasury and serves until December 31, 2002.Treasury
20010120George W. Bush becomes 43rd President of the United States after defeating Al Gore.event
20010223Qui tam case discovery assigned to Magistrate Alan Kay.Hamilton
20010300Kelly O’Meara story in Insight Magazine: “Cuomo Leaves HUD in Shambles.”Media,
HUD
20010600Kelly O’Meara story in Insight Magazine: “Inside HUD’s Financial Fiasco.”media, HUD
20010700Kelly O’Meara story in Insight Magazine: "A Financial Fiasco Is in the Making.”Media, DoD
20010900Kelly O’Meara story in Insight Magazine: “Rumsfeld Inherits Financial Mess.”DoD, media
20010910Secretary of Defense Donald Rumsfeld delivers remarks on Monday, September 10, 2001, at the Pentagon: “According to some estimates, we cannot track $2.3 trillion in transactions. We cannot share information from floor to floor in this building because it's stored on dozens of technological systems that are inaccessible or incompatible."Media, DoD
20010911World Trade Center (WTC) buildings collapse and Pentagon is hit. Among the offices at the Pentagon that are hit are the Office of Naval Intelligence (ONI) office that was investigating the $3.3T in undocumentable adjustments at DOD. Among the losses at the WTC are the largest Treasury dealer Cantor Fitzgerald: 658 employees; Marsh & McLennan: 295 employees; Aon Corporation: 175 employees; and Fiduciary Trust International: 87 employees. Large Treasury and mortgage securities dealer Solomon’s offices are destroyed in destruction of WTC Building 7.Media, Treasury
20010930Independent Auditors’ Report on FY 2001 DOD Annual Financial Report and Report on Internal Controls and Compliance with Laws and Regulations “DoD eliminated billions of dollars of intradepartmental expenses, revenue, accounts payable and other liabilities and accounts receivable and other assets that could not be verified. For FY 2001, DoD acknowledged that, for the most part, the DoD accounting systems did not capture trading partner information at the transactional level. Therefore, current systems could not produce the data necessary for reconciliations between buyers and sellers.” DOD processed $1.1T in unsupported accounting entries. Accountants identified $17.3B in inconsistencies that affected the Fund Balance with Treasury, including $12.4B in disbursement disparities.Treasury, DoD
20011013President George H.W. Bush signs the USA PATRIOT Act into law.law
20011100Chris Sanders and Catherine Austin Fitts publish “The Myth of the Rule of Law,” Sanders Research Associates.media
20011128Enron collapses after Dynegy backs out of contract to purchase it for $6B after finding accounting problems.Event
20011200Kelly O’Meara story in Insight Magazine: “Bureaucrats Circle Their Wagons.”Media
20020108Dan Briody writes in “Carlyle’s way: making a mint inside 'the iron triangle' of defense, government, and industry” (Red Herring, 2002):

“Among those associated with Carlyle are former U.S. president George Bush Sr., former U.K. prime minister John Major, and former president of the Philippines Fidel Ramos. And Carlyle has counted George Soros, Prince Alwaleed bin Talal bin Abdul Aziz Alsaud of Saudi Arabia, and Osama bin Laden's estranged family among its high-profile clientele. The group has been able to parlay its political clout into a lucrative buyout practice (in other words, purchasing struggling companies, turning them around, and selling them for huge profits)—everything from defense contractors to telecommunications and aerospace companies. It is a kind of ruthless investing made popular by the movie Wall Street, and any industry that relies heavily on government regulation is fair game for Carlyle's brand of access capitalism. Carlyle has established itself as the gatekeeper between private business interests and U.S. defense spending. And as the Carlyle investors watched the World Trade towers go down, the group's prospects went up.”
Media
20020131“Trading Truth: A Report on Harvard’s Enron Entanglements: A HarvardWatch Report” reports that Herbert “Pug” Winokur, then a member of the Harvard Corporation (the University’s 7-member governing committee) and longtime member of the board of directors and chairman of the Finance Committee of Enron, approved the creation of more than 3,000 partnerships and subsidiaries allegedly illegally used by Enron to hide debt and avoid taxation. During the period when company executives touted Enron’s stock to employees, Harvard’s main private investment fund (Highfields Capital) short-sold several million shares of Enron stock for an estimated profit of $50MM.Media
20020300Kelly O’Meara story in Insight Magazine: “What Does It Take to Lose a Contract?”Media, DoD
20020325Congresswoman Cynthia McKinney appears on KPFA radio after asking for federal contracting budgets and the DOD contracts and payment systems, but her request is refused.
Media, DoD
20020409Comptroller General/Director of General Accounting Office (GAO) testifies before the House Subcommittee on Government Efficiency, Financial Management, and Intergovernmental Relations, Committee on Government Reform: “For fiscal year 2001, 18 of the 24 Chief Financial Officers (CFO) Act agencies were able to attain unqualified audit opinions on their financial statements, which is the same number of agencies as last year and up from 6 agencies for fiscal year 1996 ” and that “for fiscal year 2001, reports of inspectors general and their contract auditors indicated that 20 of the CFO Act agencies’ financial management systems were not in substantial compliance with at least one of FFMIA’s three federal financial management systems requirements, compared to 19 such agencies for fiscal year 2000.” His testimony also states: "The President’s Management Agenda frames the problem this way: 'A clean financial audit is a basic prescription for any well-managed organization, yet the federal government has failed all four [now five] audits since 1997. Moreover, most federal agencies that obtain clean audits only do so after making extraordinary labor-intensive assaults on financial records. Without accurate and timely financial information, it is not possible to accomplish the president’s agenda to secure the best performance and high measure of accountability for the American people.’”event
20020429Kelly O’Meara story in Insight Magazine, “Government Fails Fiscal Fitness Test.” (This article cites both the $1.1 trillion at DOD and the $59 billion… at HUD.)Media, Treasury
20020522Catherine Austin Fitts questions Congressman Van Hilleary of Tennessee (who was then running for Governor) regarding the missing money in the Federal government. In response, he says there is nothing he can do about it. Catherine Austin Fitts writes a letter to Van Hilleary published by Scoop Media (link) and as an article in The Solari Report (“The Real Deal”). It addresses the failure of federal agencies to produce Independent annual certified financial statements and reliable financial systems; $3.3 trillion of undocumented adjustments at HUD and DOD for fiscal 1998-2000.Media, DoD, HUD
20020522Catherine Austin Fitts, Solari Report, “Letter to Congressman Van Hilleary.”Media
20020702Sarbanes-Oxley Act signed into law to protect stakeholders and investors by improving the dependability and precision of corporate financial disclosures. The legislation also creates the Public Company Accounting Oversight Board (PCAOB) and includes a mandate that public companies pay accounting support fees that operate as one of the funding sources for the Financial Accounting Standards Board (FASB).law
20020828Sealed transcripts filed in qui tam case from period before the case was unsealed. Transcripts for several hearings are missing.Hamilton
200209302002 FY end. $500.1B in undocumentable adjustments against Treasury at Army. DoD, Treasury
20021101HBO's The Sopranos, episode 46: “Watching Too Much Television” (Scamming the Feds); Brian lays out a way to use bogus real estate deals to con money out of HUD.Media, HUD
20021107Enactment of the Accountability of Tax Dollars Act, which expands the types of federal agencies that are required to prepare audited financial statements.law
20021200Paul O'Neill is fired as Secretary of Treasury for his public disagreement with the Administration regarding costs and mechanisms of starting the Iraq War. The controversy relates to a report commissioned in 2002 by O'Neill while Treasury Secretary documenting total outstanding debt and liabilities of the U.S. federal government. The report suggests the United States faces future U.S. federal budget deficits of more than $500BB and that sharp tax increases, massive spending cuts, or both will be unavoidable if the United States is to meet benefit promises to its future generations.Treasury
20030203John W. Snow becomes Secretary of the Treasury and serves until June 30, 2006.Treasury
20030210Rudolf Contreras replaced as opposing counsel in the qui tam case by attorney Brian J. Sonfield in representing the U.S. Government.Hamilton
20030418Kelly O’Meara story in Insight Magazine: “HUD’s Financial Woes Continue.”Media, HUD
20030501Judge Oberdorfer denies Hamilton’s motion to dismiss claims related to the optimization error by Hamilton’s contractor, AT&T/Bell Labs in the qui tam case.Hamilton
20030526Scoop Media article, “US’ Missing Trillions Make Mainstream At Last.” For the original missing trillions stories, see, "Government Fails Fiscal-Fitness Test" posted on April 29, 2002 (link). The elevation of this blockbuster story into the mainstream comes after the San Francisco Chronicle runs a front-page investigative piece a week before. The full text of this article is included below for archival and educational purposes. After publication of the Chronicle article, several more mainstream mentions are made of the story in other media, including CBS News (see below) and The Guardian in the United Kingdom.Media
20030821Kelly O’Meara story in Insight Magazine: “‘High Risk Finance at the Federal Level: The US Government Reports That Its Financial Management Systems Are Seriously Unreliable….”Media, Treasury
200309282003 FY end. $268.3B in undocumentable adjustments against Treasury at Army.Media, DoD Treasury
20030930Kelly O’Meara story in Insight Magazine: “Treasury Checks and Unbalances: The 2003 Financial Statements Mark the Seventh Year in a Row That the Federal Government Could not Audit, Let Alone Balance, Its Books.”Media, Treasury
20031001Hamilton files a motion for summary judgment in the Court of Federal Claims case.Hamilton
20031028Chris Sanders, “Where Is the Collateral?” Sanders Research Associates, republished from Scoop Media.Media
20040324The Court of Federal Claims enters a memorandum opinion denying Hamilton's motion for summary judgment and denying the government's motion for summary judgment because the Court determines that Hamilton did not breach its contracts. The Court invites the government to amend is counterclaim.Hamilton
20040330The government declines to amend its counterclaim in the Court of Federal Claims case.Hamilton
20040409Catherine Austin Fitts sends a letter to National Security Advisor Condoleezza Rice (cc to Bush and Cheney) regarding comments on Rice's testimony under oath before the National Commission on Terrorist Attacks on the United States. After the letter goes viral, Halliburton is the largest user on the Solari website for several days, and then Catherine is seriously poisoned, taking years to recover.Media, Hamilton
20040419Final judgment entered in favor of Hamilton Securities (subsequently merged into Solari, Inc.) in the amount of $1.505MM plus interest in the Court of Federal Claims case and, thus, there is no need for trial previously scheduled for April 22, 2004.Hamilton
20040604Request to John Hawke, Comptroller of the Currency, to help get Hamilton paid Court of Federal Claims case, with copies to Congress. No replies.Hamilton
20040705Chris Sanders, “So Where Is the Collateral?” Sanders Research Associates on the extent of the corruption at HUD and the mortgage markets. Media
20040816Partial judgment against Hamilton Securities on Count IX (North and Central sale) in the amount of $1.5MM and in favor of Hamilton on Counts II (single-family offering), XIII and XIV (re: Williams Adley contract), XV and XVI (re: cross-cutting contract) entered in qui tam case.Hamilton
200408192004 FY end. $258.1B in undocumentable adjustments against Treasury at the Department of the Army.DoD Treasury
20041016MSNBC: “US Probes $100 Million Missing in Iraq.”Media, DoD
20041102George W. Bush is re-elected President of the United States, defeating John Kerry.Event
20050301Hamilton files an appeal of the qui tam case order.Hamilton
20050310Before House of Representative hearings on the FY 2006 defense budget, Congresswoman Cynthia McKinney questions Donald Rumsfeld and Joint Chiefs of Staff Chairman Richard Myers on DynCorp and 9/11 War Games, revealing answers about lack of oversight over DynCorp's practice of sex slave trafficking and lack of accuracy and missing money regarding DOD finances. McKinney demands a list of contractors and payments related to DOD transaction, payment, and accounting systems. DoD
20050500Ed Harriman writes in “So, Mr. Bremer, Where Did All the Money Go?” (The Guardian):

‘’At the end of the Iraq war, vast sums of money were made available to the US-led provisional authorities, headed by Paul Bremer, to spend on rebuilding the country. By the time Bremer left the post eight months later, $8.8bn of that money had disappeared.”
Media, DoD
20060100Hamilton Securities Group enters into a global settlement with DOJ (on behalf of HUD in the Court of Claims) and Ervin (with respect to civil pursuit of qui tam case after DOJ declined to Adopt), resolving the qui tam case (in which, after 10 years, there was no finding of wrongdoing by anyone other than the mistake by Hamilton’s sub-contractor, AT&T/Bell Labs) and Hamilton’s lawsuit against HUD for payment of contracting fees owed by HUD to Hamilton for work completed in 1996 (in which the judge found in favor of Hamilton) and Hamilton’s lawsuit against Ervin for tortious interference of contract (Ervin’s insurance firm has to pay). Department of Justice insists that settlement does not waive the rights to pursue Hamilton regarding taxes. Tax filings require 4 years and $150,000 of accounting and attorneys fees to file after Hamilton’s accountant reports that Hamilton’s files have disappeared. Hamilton owes $0 in taxes.Hamilton
20060209Kai Ryssdal, Marketplace, “Negroponte (Director of National Intelligence) Given Power to Waive SEC Rules.” The federal government provides waivers to private companies so they do not have to comply with SEC rules as more money goes missing from the U.S. government and immediately before the Financial Crisis begins.Media, Corporation
20060400The Solari Report publishes Dillon Read and Co., Inc. and the Aristocracy of Stock Profits by Catherine Austin Fitts explaining how the federal government engineered the housing bubble and that trillions are being transferred out of government accounts.Media, HUD
20060505In the Memorandum on Assignment of Function Relating to Granting of Authority for Issuance of Certain Directives, President G.W. Bush waives the SEC reporting requirements for contractors. The SEC Act itself grants the authority to any president to exempt contractors from reporting via 15 U.S. Code § 78m(b)(3)(A), which states:

“With respect to matters concerning the national security of the United States, no duty or liability under paragraph (2) of this subsection shall be imposed upon any person acting in cooperation with the head of any Federal department or agency responsible for such matters if such act in cooperation with such head of a department or agency was done upon the specific, written directive of the head of such department or agency pursuant to Presidential authority to issue such directives. Each directive issued under this paragraph shall set forth the specific facts and circumstances with respect to which the provisions of this paragraph are to be invoked. Each such directive shall, unless renewed in writing, expire one year after the date of issuance.” [Source: Wikipedia]
Law, Corporate
20060614
Daniel Gros, “Discrepancies in America’s Accounts Hide a Black Hole” (Financial Times article).Media, DoD
20060700DOD Inspector General reports on $6.5MM of Army spending allocated by Pentagon with no paper trail, and no DOD audit for past two decades to resolve this; says Pentagon “money pit” goes back to 1991.DoD
20060710Henry M. Paulson, Jr. becomes Secretary of the Treasury and serves until January 20, 2009.Treasury
20060926Enactment of the Federal Funding Accountability and Transparency Act requiring information about Federal awards to be posted on a single, searchable website that is open for public access.law
20060929The Credit Rating Agency Reform Act of 2006 is enacted. This law requires the SEC to establish clear guidelines for determining which credit rating agencies qualify as nationally recognized statistical rating organizations (NRSROs). It also gives the SEC the power to regulate NRSRO internal processes regarding record-keeping and how they guard against conflicts of interest and makes the NRSRO determination subject to a Commission vote (rather than an SEC staff determination). Notably, however, the law specifically prohibits the SEC from regulating an NRSRO's rating methodologies.law
20061210Goldman Sachs meets to determine how to short the market in mortgage-backed securities—the start of triggering the Financial Crisis.Corporate
20070320In GAO testimony before the Subcommittee on Government Management, Organization, and Procurement, Committee on Oversight and Government Reform, House of Representatives, U.S. Comptroller General David Walker testifies:

“For the 10th consecutive year, certain material weaknesses in financial reporting and other limitations on the scope of our work resulted in conditions that continued to prevent us from being able to provide the Congress and the American people an opinion as to whether the consolidated financial statements of the U.S. government were fairly stated in conformity with U.S. generally accepted accounting principles (GAAP).”
event
20070825
2007 FY end. $1.1T in undocumentable adjustments against Treasury at Department of the Army.DoD Treasury
20070930Donald L. Barlett and James B. Steele, “Billions over Baghdad,” (Vanity Fair): “Between April 2003 and June 2004, $12 billion in U.S. currency—much of it belonging to the Iraqi people—was shipped from the Federal Reserve to Baghdad, where it was dispensed by the Coalition Provisional Authority. Some of the cash went to pay for projects and keep ministries afloat, but, incredibly, at least $9 billion has gone missing, unaccounted for, in a frenzy of mismanagement and greed.”Media, DoD
20070930Goldman reports $11B income during FY 1997, $4B of which is from shorting of the subprime mortgage-backed securities market.Corporate
20080000
Bear Stearns collapses, kicking off the 2008 Financial Crisis, a housing crisis that results in a 31.8% drop in housing prices and the Great Recession.Event, Corporate
20080300
Tony Blair Faith Foundation is formed.Corporate
20080500Lehman Brothers files for bankruptcy protection after Treasury Secretary Paulson announces there will be no more bailouts. Lehman’s becomes the largest bankruptcy in U.S. history.Corporate Event, Treasury
20080725Catherine Austin Fitts is thrown off of KPFA radio in Berkeley, California on a pretext, shortly before the Freddie Mac and Fannie Mae takeover and as the Bohemian Grove starts their annual meeting. Shortly thereafter, a large San Francisco money manager announces it has lost the $1 billion it invested in Fannie Mae that April, saying it had "no idea" there was a problem. Catherine Austin Fitts had been on KPFA radio at 5pm for years explaining the problem to the entire San Francisco Bay Area audience.Media
20080906Takeover of Fannie and Freddie, when the director of the Federal Housing Finance Agency (FHFA), James B. Lockhart III, announces his decision to place the two government-sponsored enterprises (GSEs) into a conservatorship run by the FHFA.Corporate, HUD, event
200809152008 FY end. $595.8B in undocumentable adjustments against Treasury at Army.DoD
20080916AIG is bailed out when the Federal Reserve provides an $85 billion two-year loan to prevent its bankruptcy and further stress on the global economy. In return, the Fed takes ownership of 79.9 percent of AIG's equity. In the end, the government turns a $23B profit on the sale of its AIG shares acquired in the bailout. Bernanke is quoted as saying AIG took risks with unregulated products like hedge funds while using cash from people's insurance policies. “AIG had become a major seller of credit default swaps in an attempt to boost its profit margin. These swaps insured the assets that supported corporate debt and mortgages. If AIG went bankrupt, it would trigger the bankruptcy of many of the financial institutions that had bought these swaps.” The AIG bailout occurs one day after U.S. Treasury Secretary Henry Paulson says there will be no further Wall Street bailouts. That move forced investment bank Lehman Brothers into bankruptcy. [Kimberly Amadeo, “AIG Bailout, Cost, Timeline, Bonuses, Causes, Effects: Why It Made Bernanke Angrier Than Anything Else in the Recession,” The Balance, updated November 5, 2018]Corporate,
Treasury, Media
20080930Enactment of Emergency Economic Stabilization Act of 2008 (the “bailout” of the U.S. financial system)—Establishes the Troubled Asset Relief Program (TARP) for funding most U.S. banks through the purchase of toxic assets and equity from financial institutions to strengthen the financial sector. Passed by a Democratic-controlled Congress and signed into law by President George W. Bush.Law
20081003Bernard Madoff, the former NASDAQ Chairman and founder of the Wall Street firm Bernard L. Madoff Investment Securities LLC, admits that the wealth management arm of his business was an elaborate Ponzi scheme.Event, Corporate
20090120Barack Obama becomes 44th President of the United States after defeating John McCain.Event
20090126
Timothy F. Geithner becomes Secretary of the Treasury and serves until January 25, 2013.
Treasury
20090200The SEC promulgates amended regulations designed to address concerns about the integrity of the process by which NRSROs rate structured finance products, particularly mortgage-related securities.law
20090500Congressman Alan Grayson at a Congressional hearing questions Federal Reserve Chairman Ben Bernanke on $550B of loans to foreigners (or "central liquidity swaps" in Federal Reserve-ese). Which financial institutions received this money? Bernanke's answer: I don't know. As the Fed was lending this money, the dollar increased by 30% in value. Grayson asks, was this a coincidence? Bernanke's answer: yes. Bernanke says Congress approved this in 1913 in the Federal Reserve Act, and this facility has been used repeatedly over the years.Event
20090629Paul Tharp, “US Official Sees $23.7 Trillion Rescue Tab” (New York Post). TARP IG Neal Barofsky reports that $23.7T will need to be expended on TARP. Media, Treasury
200907092009 FY end. $311.3B in undocumentable adjustments against Treasury at Army.DoD Treasury
20091229President Barack Obama issues Executive Order 13526, “Classified National Security Information,” which redefines the procedures for classified information. law
201003082010 FY end. $874.8B in undocumentable adjustments against Treasury at Army.DoD Treasury
20100416
SEC charges Goldman Sachs with fraud in structuring and marketing of a collateralized debt obligation (CDO) tied to subprime mortgages. “The Securities and Exchange Commission today charged Goldman, Sachs & Co. and one of its vice presidents for defrauding investors by misstating and omitting key facts about a financial product tied to subprime mortgages as the U.S. housing market was beginning to falter. The SEC alleges that Goldman Sachs structured and marketed a synthetic collateralized debt obligation (CDO) that hinged on the performance of subprime residential mortgage-backed securities (RMBS). Goldman Sachs failed to disclose to investors vital information about the CDO, in particular the role that a major hedge fund played in the portfolio selection process and the fact that the hedge fund had taken a short position against the CDO.” [Source: SEC website]Corporate, Enforcement
20110806Zachary A. Goldfarb, “S&P downgrades U.S. credit rating for first time” (to AA+), Washington Post. The downgrade to AA+ occurs four days after Congress votes to raise the debt ceiling of the federal government by means of the Budget Control Act. Later, the U.S. government commences an investigation into S&P's role in the rating of several mortgage-backed securities that played a role in the 2008 Financial Crisis. To mend its relationship with the U.S. government, S&P asks its then-CEO [Devin Sharma] to step down, 18 days after the U.S. was downgraded. [Source: Wikipedia]Media, Treasury
201109112011 FY end. $14.6B in undocumentable adjustments against Treasury at the Department of the Army.DoD Treasury
201207192012 FY end. $110.9B in undocumentable adjustments against Treasury at the Department of the Army.DoD Treasury
20120721“£13tn hoard hidden from taxman by global elite”: The Guardian reports that a global super-rich elite has exploited gaps in cross-border tax rules to hide an extraordinary £13 trillion ($21tn) of wealth offshore—as much as the American and Japanese GDPs put together—according to research commissioned by the campaign group Tax Justice Network.Corporate, Media
201209302014 FY end. $1.9B in undocumentable adjustments against Treasury at HUD. HUD
20121106Barack Obama is re-elected President of the United States, defeating Mitt Romney.Event
20130205
DOJ files a lawsuit against S&P.Enforcement, Corporate
20130228Jacob J. Lew becomes Secretary of the Treasury and serves until January 20, 2017.Treasury
20130426Catherine Austin Fitts and John Rappoport discuss Hamilton Securities, its Community Wizard database, and the Hamilton Securities litigation in a special Solari Report on the relationship between the Oklahoma City bombing and West of the Mississippi (Region 6 defaulted loans) HUD loan sale documents.Media, Hamilton, HUD,
20130927SAIC changes its name to Leidos and spins off a new and independent $4 billion government services and information technology company that retains the Science Applications International Corporation name. [Source: Wikipedia]Corporate
20140509Enactment of the Digital Accountability and Transparency (DATA) Act. The DATA Act's goals are to:
(1) Expand the Federal Funding Accountability and Transparency Act of 2006 (31 U.S.C. 6101 note) by disclosing direct Federal agency expenditures and linking Federal contract, loan, and grant spending information to programs of Federal agencies to enable taxpayers and policy-makers to track Federal spending more effectively;
(2) Establish government-wide data standards for financial data and provide consistent, reliable, and searchable government-wide spending data that are displayed accurately for taxpayers and policy-makers on USASpending.gov (or a successor system that displays the data);
(3) Simplify reporting for entities receiving Federal funds by streamlining reporting requirements and reducing compliance costs while improving transparency;
(4) Improve the quality of data submitted to USASpending.gov by holding Federal agencies accountable for the completeness and accuracy of the data submitted;
(5) Apply approaches developed by the Recovery Accountability and Transparency Board to spending across the Federal Government.
law
201409302014 FY end. $1.9B in undocumentable adjustments against Treasury at HUD.HUD Treasury
20141223Financial Improvement and Audit Readiness (FIAR) Plan Status Report issued by the Comptroller of DOD prepared in accordance with section 1003 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2010. The Report addresses issues impeding the reliability of the Department of Defense financial statements. Among findings:
• “Moving from audit readiness into audit is a tremendous accomplishment for the Department. Going under audit will highlight remaining deficiencies through an auditor’s lens so that corrective actions can be implemented and full audit readiness achieved by FY 2018.”
• DOD OIG rescinds a clean audit opinion on USMC (United States Marine Corps) on March 23, 2015, after learning of USMC transactions in U.S. Treasury suspense accounts that had not been previously reported and included in the audit. There will not be an SBA (General Fund schedules of budgetary activity) audit in FY 2015.
• Department does not achieve the September 30, 2014, SBR (statement of budgetary resources) deadline but “progress has been made.”
• Nearly 90 percent of the total DOD General Fund appropriations are under audit. The remainder of General Fund appropriations not under audit are undergoing examinations or audit readiness activities.
• Most legacy systems were originally designed to address operational or mission requirements. Additionally, many were built prior to the Federal Financial Management Improvement Act (FFMIA) of 1996 (Public Law 104-208), which requires financial systems to comply with the U.S. Standard General Ledger (USSGL) and Treasury Financial Manual. As a result, these systems were not designed to meet federal standards for financial systems.
Attracting and retaining qualified personnel to help the Department achieve audit readiness and sustain an audit ready state has been an ongoing challenge.
DoD
20150203S&P settles the lawsuit by the Department of Justice and nineteen states’ attorneys general and the District of Columbia for $1.375B.Corporate, Enforcement
20150500
015 FY end. $6.5T in undocumentable adjustments against Treasury at Army.DoD Treasury
20150930The Inspector General’s report for the Army in fiscal year 2015 reports $6.5 trillion in unsupported journal voucher adjustments. Unsupported journal voucher entries and adjustments, as the result of agencies’ failure to correct system deficiencies, are considered red flags for potential fraud. Of note, on the asset side of the Army General Fund is an increase of $794B in Fund Balance with Treasury and, on the liabilities side, an increase of $929 billion in Accounts Payable. There is a net $1T increase in assets resulting from unsupported journal voucher adjustments and a $1T increase in net liabilities due to unsupported journal voucher adjustments. More than 16,000 records that might reveal either the source or the destination of some of that $6.5 trillion have been “removed.”DoD
20150930HUD “material errors” in reporting are $278.5 billion, nearly eight times the size of HUD's $36 billion budget. The explanation given in the report is as follows (see https://www.hudoig.gov/sites/default/files/3-16-2017-HouseHearing-Wriien-Tes[monyPDF.pdf, page 4): Of the $278.5 billion in errors, $159.4 billion was due primarily to (1) incorrect data entry, (2) omission of restated balances, or (3) incorrect data provided by HUD’s component entities (FHA and Ginnie Mae). The remaining $119.1 billion were due to inappropriate rounding adjustments. We found several instances in which rounding was performed to the nearest billion and hundred billion instead of the nearest million as required.DoD
20160116Leidos Holdings Inc. announces it has entered into a definitive agreement with Lockheed Martin pursuant to which Leidos would combine with Lockheed Martin's realigned Information Systems & Global Solutions business in a Reverse Morris Trust transaction.Coporate, DoD
20160700Thomas Hedges, “The Pentagon Has Never Been Audited, That’s Astonishing” (The Guardian).
Media, DoD
20160815“Lockheed Cuts and Runs” [Solari Report]—Lockheed Martin spins out its Information Systems & Global Solutions division to Leidos for $4.6B. The merger deal closes and is implemented immediately prior to the latest DOD Inspector General audit. With Lockheed having been the largest provider of information systems, including accounting and payments systems, to DOD and U.S. government agencies, this merger now makes Leidos the largest IT provider in the federal market.Media, Corporate, DoD
20170120Donald Trump becomes 45th President of the United States after defeating Hillary Clinton.Event
20170213Steven T. Mnuchin becomes Secretary of the Treasury.Treasury
20170309
Catherine Austin Fitts and Rob Kirby present a Solari Report interview on the Exchange Stabilization Fund.Media
20170320Senator Charles Grassley of Iowa, a frequent critic of the DOD’s financial practices, says on the Senate floor that the Pentagon’s longstanding failure to conduct a proper audit reflects “twenty-six years of hard-core foot-dragging” on the part of the DOD, where “internal resistance to auditing the books runs deep.” DoD
20170900Deadline set in 2009 by Congress for Pentagon to subject itself to full audit.DoD
20170928Interview with Dr. Mark Skidmore on The Solari Report, “Summary Report on ‘Unsupported Journal Voucher Adjustments’ in the Financial Statements of the Office of the Inspector General for the Department of Defense and the Department of Housing and Urban Development.”Media, DoD, HUD
20170928Launch of website at missingmoney.solari.com to make public DOD and HUD financial statements and documentation. Media
20170930
Although OIG audit reports in previous years were always made available online without restriction or censorship, a DOD OIG report on a U.S. Navy financial statement for FY 2017 suddenly appears in heavily redacted form—not just the numbers it contains, but even its title! Only bureaucratic sloppiness enable one to see that the report concerns Navy finances: Censors missed some of the references to the Navy in the body of the report. A request to the Office of Inspector General to have the document uncensored is met with the response: “It was the Navy’s decision to censor it, and we can’t do anything about that.” At the request of The Nation, Senator Grassley’s office also asks the OIG to uncensor the report. Again, the OIG refuses. [See David Lindorff article, 11/27/18] DoD
20171005The Solari team discovers that the Solari Report link to the report “Army General Fund Adjustments Not Adequately Documented or Supported” has been disabled by the DOD and HUD Offices of Inspectors General.DoD, HUD
20171005
DOD News, “DOD Announces Agency Wide Audit” [Spoiler alert: DOD’s independent accountants were not able to produce a clean audit of 2018 financial statements]Media, DoD
20171008The Solari team learns that key documents have been reposted on the OIG website, but with different URLs. Enforcement, Media
20171008Fire at the New York Federal Reserve.
Event
20171211United Press International, “Trump Signs $700 Billion Defense Budget” (Defense News).Media, DoD
20171212In late May 2018, a graduate student at Michigan State University finds on the OIG website the most recent report for the DOD, which summarizes unsupported adjustments for fiscal year 2017. However, this document differs from all previous reports in that all the numbers relating to unsupported adjustments are redacted.DoD,
20180112
Special Solari Report article published: “The Black Budget: The Crossroads of (Un)Constitutional Appropriations and Reporting.”Media
20180112Special Solari Report article published: “The Appropriations Clause: A History of the Constitution’s (As of Yet) Underutilized Clause.”Media
20180123Special Solari Report article published: “The U.S. Statutes Creating Modern Constitutional Financial Management and Reporting Requirements and the Government’s Failure to Follow Them.”Media
20180314Comments due on the exposure draft of FASAB Statement 56.law
20180330
Special Solari Report article published: “The History and Organization of the Federal Reserve: The What and Why of the United States’ Most Powerful Banking Organization.”Media
20180500
Dr. Mark Skidmore publishes “Update on the $21 Trillion in Unsupported Adjustments at the Department of Housing and Urban Development and the Department of Defense” [Solari Report], reporting that over the past several months, he has repeatedly tried to contact the Office of the Inspector General (OIG) in an effort to obtain additional information regarding the nature of the unsupportable adjustments at DOD, but the OIG is no longer responding to inquiries.Media, HUD, DoD, enforcement
20180606FASAB proposes two possible alternatives for disclosure/disclaimer requirements under Standard 56.Law
20180712FASAB issues a classified exposure draft of the first Statement 56 Interpretation: “Interpretation of Federal Financial Accounting Standards 56: Classified Activities with comments due by August 13, 2018."law
20180712
Dr. Lawrence Kotlikoff and Dr. Mark Skidmore, “Is Our Government Hiding $21 Trillion in Spending?” (Forbes).Media, DoD, HUD
20180721Comments due on disclosure/disclaimer requirements under FASAB Standard 56.law
20180726Federation of American Scientists, “Bid to Rectify the ‘Black Budget’ Fails“: A bill in the Senate to remove “pass-through” funds from the Air Force budget and include them in Defense-wide appropriations fails. “In fiscal year 2018, the Air Force pass-through budget amounted to approximately $22.0 billion, or just less than half of the total Air Force procurement budget. The committee believes that the current Air Force pass-through budgeting process provides a misleading picture of the Air Force’s actual investment budget.” law
20180904First round of Kavanaugh confirmation hearings begins.Event media
20180904FBI report on Kavanaugh is sent to Senate Judiciary Committee.Event media
20180927Ford testimony is added to the Kavanaugh confirmation hearings.Event media
20180930Deadline DOD gave itself for producing auditable financial statements.DoD
20181004Final Statement 56 is published, with little if any change from the exposure draft.Law
20181004Several months after beginning the promised FY 2018 DOD audit, the government accepts the recommendations of the Federal Accounting Standards Advisory Board: https://fas.org/sgp/news/2018/07/fasab-review.pdf (see page 3 for a summary). The statement allows government officials to misstate and move funds around to hide expenditures if it is deemed necessary for national security purposes, and the rule applies to all agencies, not just the black budget. Here is an excerpt from the report:

"This Statement permits modifications that do not affect net results of operations or net position. In addition, this Statement allows a component reporting entity to be excluded from one reporting entity and consolidated into another reporting entity, and the effect of the modification may change the net results of operations and/or net position."

From this statement, it seems that only a few people with high-level security clearances have the authority to determine what is a national security issue, and these same people will now be allowed to restate budgets to hide activity. No one but those few people would ever know that expenditures on a given activity are hidden in completely different area of government.
DoD
20181006Kavanaugh is confirmed as Justice of the Supreme Court by the U.S. Senate.Event media
20181010Hurricane Michael, the third-most intense Atlantic hurricane to make landfall in the contiguous United States in terms of pressure, behind the 1935 Labor Day hurricane and Hurricane Camille of 1969, hits the East Coast of the U.S., distracting news watchers from the finalization of FASAB Statement 56 on October 4, 2018.event
20181027Ernst & Young and other private accounting firms announce they cannot complete DOD 2018 FY audit. “The firms concluded...that the DoD’s financial records were riddled with so many bookkeeping deficiencies, irregularities, and errors that a reliable audit was simply impossible.”DoD
20181127“Exclusive: The Pentagon’s Massive Accounting Fraud Exposed: How US military spending keeps rising even as the Pentagon flunks its audit” (The Nation). The reporter, Dave Lindorff, notes that Ernst & Young and other accounting firms have given up on trying to perform a 2018 FY audit: “The firms concluded . . . that the DoD’s financial records were riddled with so many bookkeeping deficiencies, irregularities, and errors that a reliable audit was simply impossible.” The tab for the attempted audit reportedly was $900MM. According to Lindorff, “1,200 auditors went through Pentagon books for a year and they came up with nothing. The only things they were able to audit well—and this is significant—is the retirement plan and the payroll.” The Nation further states: "For decades, the DoD’s leaders and accountants have been perpetrating a gigantic, unconstitutional accounting fraud, deliberately cooking the books to mislead the Congress and drive the DoD’s budgets ever higher, regardless of military necessity. DoD has literally been making up numbers in its annual financial reports to Congress—representing trillions of dollars’ worth of seemingly nonexistent transactions—knowing that Congress would rely on those misleading reports when deciding how much money to give the DoD the following year, according to government records and interviews with current and former DoD officials, congressional sources, and independent experts." The author then proceeds to misrepresent Dr. Skidmore on national radio, promoting the $21 trillion as not real money, just a “plug.”Media, DoD
20181127“Green New Deal” proposed by Alexandria Ocasio-Cortez, creating a non-accountable 15-member Congressional Committee to manage enormous amounts of money and assets dedicated to “green” enterprises with little accountability.Law
20190100Laurence Kotlikoff publishes, “Holding U.S. Treasurys? Beware: Uncle Sam Can't Account For $21 Trillion” (Forbes, January 9, 2019). Kotlikoff (Dr. Mark Skidmore's coauthor on other missing money articles) writes, “Typically, undocumentable transactions are a just small fraction of authorized spending. How could a $122 billion Army financial statement generate undocumentable adjustments that were 54 times authorized spending?” Kotlikoff also writes, “. . . both Skidmore and Lindorff requested that the OIG provide more detailed information about the nature of 170 transactions that generated $2.1 trillion in undocumentable transactions (see page 6 of the OIG report). Why would the Army make up such huge phony numbers, as Lindorff and his sources assert? And yet is difficult to imagine that such huge sums could flow in and/or out of the Army financial statement in a way that was unauthorized. It is impossible to verify without greater transparency.”Media, DoD
20190124Links

DeVries, D. D., & Kiger, J. E. (2004). “Journal entries and adjustments? Your biggest fraud danger.” Journal of Corporate Accounting & Finance, 15(4): 57–62. link

“Classified Activities” link, Statement of Federal Financial Accounting Standards 56 10/4/18

Testimony of the HUD Inspector General House Government Reform Committee, May 2000

Corbett Report, “9/11 Trillions: Follow the Money,” link

Poteshman A.M. (2006). “Unusual Option Market Activity and the Terrorist Attacks of September 11, 2001.” Journal of Business, 79 (4): 1703-1726. link

Chesney M. (2001). “Detecting Abnormal Trading Activities in Option Markets.” Swiss Finance Institute Research Paper No. 11-38, posted 9/22/01, revised 4/1/15, link

Ryan K. (2010). “Evidence for Informed Trading on the Attacks of September 11.” Foreign Policy Journal, 11/18/10, link