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Has the Government Legalized Secret Defense Spending?

Has the Government Legalized Secret Defense Spending?

While a noisy Supreme Court fight captivated America last fall, an obscure federal accounting body quietly approved a system of classified money-moving

UNITED STATES - SEPTEMBER 24: Aerial view of the Pentagon building photographed on Sept. 24, 2017. (Photo By Bill Clark/CQ Roll Call)

Aerial view of the Pentagon building.     Bill Clark/CQ Roll Call/Getty Images

October 4th, 2018, was a busy news day. The fight over Brett Kavanuagh’s Supreme Court nomination dominated the cycle. The Trump White House received a supplemental FBI report it said cleared its would-be nominee of wrongdoing. Retired Justice John Paul Stevens meanwhile said Kavanaugh was compromised enough that he was “unable to sit as a judge.”

#NationalTacoDay trended on Twitter. Chris Evans told the world production wrapped on Avengers 4.

The only thing that did not make the news was an announcement by a little-known government body called the Federal Accounting Standards Advisory Board — FASAB — that essentially legalized secret national security spending. The new guidance, “SFFAS 56 – CLASSIFIED ACTIVITIES” permits government agencies to “modify” public financial statements and move expenditures from one line item to another. It also expressly allows federal agencies to refrain from telling taxpayers if and when public financial statements have been altered.

To Michigan State professor Mark Skidmore, who’s been studying discrepancies in defense expenditures for years, the new ruling — and the lack of public response to it — was a shock.

“From this point forward,” he says, “the federal government will keep two sets of books, one modified book for the public and one true book that is hidden.”

Steven Aftergood of the Federation of American Scientists’ Project on Government Secrecywas one of the few people across the country to pay attention to the FASAB news release. He was alarmed.

“It diminishes the credibility of all public budget documents,” he says.

I spent weeks trying to find a more harmless explanation for SFFAS 56, or at least one that did not amount to a rule that allows federal officials to fake public financial reports.

…click on the above link to read the rest of the article…

How $21 Trillion in U.S. Tax Money Disappeared. “Full Scope Audit” of the Pentagon

This is part of our series on the unaccounted for $21 Trillion in taxpayer money. As unbelievable and absurd as that sounds, the actual total of unaccounted for money at the Pentagon is most likely significantly more than $21 trillion. The First ever “full-scope audit” of the Pentagon is presently underway. Read the first report from this series here.

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According to the Department of Defense Inspector General and the Defense Finance and Accounting Service, $21 Trillion in Taxpayer Funding Is Unaccounted For.

To help people comprehend the scale of this, $1 Trillion is $1000 Billion. This means that $21,000 Billion in taxpayer money has gone missing.

Image: a stack of one trillion dollars. Multiply that by 21

How can this be possible?

We outlined the “Unaccountable System of Global War Profiteers” in detail here.

For further understanding, we are featuring another mind-blowing Department of Defense Inspector General (DOD IG) report.

The following are highlights from the DOD IG “Summary of DOD Office of the Inspector General Audits of Financial Management”:

  • The financial management systems DOD has put in place to control and monitor the money flow don’t facilitate but actually “prevent DOD from collecting and reporting financial information… that is accurate, reliable, and timely.” (p. 4)
  • DOD frequently enters “unsupported” (i.e. imaginary) amounts in its books (p. 13) and uses those figures to make the books balance. (p. 14)
  • Inventory records are not reviewed and adjusted; unreliable and inaccurate data are used to report inventories, and purchases are made based on those distorted inventory reports. (p. 7)
  • DOD managers do not know how much money is in their accounts at the Treasury, or when they spend more than Congress appropriates to them. (p. 5)18
  • Nor does DOD “record, report, collect, and reconcile” funds received from other agencies or the public (p. 6),

…click on the above link to read the rest of the article…

Yes, But at What Cost?

Yes, But at What Cost?

This is how our entire status quo maintains the illusion of normalcy: by avoiding a full accounting of the costs.

The economy’s going great–but at what cost? “Normalcy” has been restored, but at what cost? Profits are soaring, but at what cost? Our pain is being reduced–but at what cost?

The status quo delights in celebrating gains, but the costs required to generate those gains are ignored for one simple reason: the costs exceed the gains by a wide margin. As long as the costs can be hidden, diluted, minimized and rationalized, then phantom gains can be presented as real.

Exhibit One: the US public debt. If you borrow and blow enough money, it’s not too difficult to generate a bit of “growth”–but at what cost?

Exhibit Two: opioid deaths. One of the few metrics that’s climbing as fast as the national debt is the death rate from prescription and synthetic opioids:

Exhibit Three: student loan debt. Here’s a chart of debt that is federally originated but paid by individual students: the infamous student loan debt that has shot up over $1 trillion in a few years.

You see the point: the cost are skyrocketing but the gains are diminishing. The costs of maintaining the illusion of “normalcy”–for example, that going to college is “still affordable”– are soaring, while the gains of a college education are declining as credentials and diplomas are is oversupply. (What’s scarce are the real-world skillsets employers actually need.)

Americans are in pain, and the cartel-sickcare “solution”–“non-addictive opioids”–is reaping a horrendous toll on all who trusted the sickcare system to deliver non-addictive painkillers. Should the newly addicted sufferer no longer be able to get the synthetic opioid prescribed, the option of choice is street smack (heroin), and this is why heroin deaths are soaring along with deaths caused by synthetic opioids.

…click on the above link to read the rest of the article…

 

Bean counters: Lost in Paradise

Long before the Paradise Papers, or the Panama Papers, the Enron scandal, Savings and Loan crisis, WorldCom, and the Global Financial Crisis, governments in the US, UK and Australia were colluding with the world’s biggest banks and their clients using aggressions dynamics not to defeat but to suborn the controls of the supposedly independent professionals: The accountants.

Illustration by Rachael Bolton

The great swathes of coverage being given to the Paradise Papers largely focuses attention on its beneficiaries and the specialised offshore marketers of the schemes, but scant attention has been directed towards The Big Four global accounting firms like Pricewaterhouse Coopers (PWC), Ernst & Young (EY), Deloitte and KPMG, that enabled tax dodging by aggressively marketing schemes in Luxembourg, Panama, Jersey, the Cayman Islands and the British Virgin Islands to their clients using firms like Appleby as conduits.

Long before the Paradise Papers, or the Panama Papers, the Enron scandal, Savings and Loan crisis, WorldCom, and the Global Financial Crisis (GFC) governments in the United States, the UK and Australia were colluding with the world’s biggest banks and their clients using aggressions dynamics not to defeat but to suborn the controls of the supposedly independent professionals: The accountants.

They aren’t just designing new tax avoidance schemes the likes of which feature in the Paradise and Panama Papers. The Big Four accountancy firms are lobbying for and directly drafting the very regulations and loopholes that enable them.

How to run a control fraud

The best way to run a control fraud is to turn the independent professionals that provide internal and external controls – auditors, appraisers, and credit ratings agencies – into allies, and use their reputation, alleged professionalism and independence to assist you in convincing the victims of your fraud, to trust you.

…click on the above link to read the rest of the article…

US government’s new ‘rule’ allows banks to completely make sh*t up

US government’s new ‘rule’ allows banks to completely make sh*t up

In 1494, a 47-year old Franciscan friar named Luca Pacioli invented something that was revolutionary.

Pacioli was, in fact, a friend and contemporary of Leonardo da Vinci, and the two collaborated frequently.

So you’re probably guessing that Pacioli was a co-designer in Leonardo’s famed flying machine, or a new architectural technique.

On the contrary.

Pacioli’s invention was the double-entry accounting system; in fact he’s known by bean counters today as the father of accounting.

This was a major and much needed innovation at the time.

In the 15th century, Italy was dominating global trade and commerce.

Yet unlike in the centuries before where merchants were primarily transporters and traders of exotic goods, 15th century merchants had essentially become proto-bankers whose primary business was extending and trading credit.

This was a major change in the way that business was done, and it absolutely demanded a new way to keep track of it all.

That’s exactly what Pacioli invented. And his system of accounting is still being used today, over 500 years later.

…click on the above link to read the rest of the article…

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