Catherine Austin Fitts on the Missing Trillions
My commentary on Fitts' recent appearance on Tucker Carlson
A few days ago Tucker Carlson interviewed former Wall Street insider Catherine Austin Fitts of
, where she discussed, among many interesting topics, the disappearance of 21 Trillion dollars from the accounting ledgers of the US federal government over a 17- year time span (1998-2015). I’ve tracked Fitts’ work on this subject for over ten years and I summarized it in a section in my new book, The Coming World Nation, which I’m sharing below.In an interesting synchronicity, her appearance on Tucker’s show came right as I was doing my final edit of the chapter this passage is contained within - it’s chapter 11 of 12 in the book, titled “The Shadow Economy and the Black Budget.” I have one more chapter left to edit plus the conclusion, and then I’ll finally be ready to post the book on Amazon and kickstart the podcast again!
Check out the full interview if you can - if you’ve never followed Fitts’ work before it’s a great listen!
Because the American Empire is “unofficial” - meaning, not overtly acknowledged by the US government - the Deep State factions that manage its operations cannot rely entirely on “official” government budgetary allocations to finance their activities. For projects that are highly covert and which operate completely outside of legal boundaries, independent revenue streams must be cultivated, ones existing entirely outside of the framework of constitutional law while offering large, consistent returns. This hunger for off-the-books, unregulated income streams gives the Deep State an inherent thirst for black budget funding sources. While this thirst is considerable, it is dwarfed in comparison with the black projects underworld that America began rapidly developing after WWII.
The scale of financing required by this black projects apparatus is exponentially larger than anything the CIA might require for its covert-ops. To feed this insatiable appetite, a much larger off-the-books financing source is required than what drug trafficking or illicit arms sales can provide (these being two primary sources of income that the CIA has traditionally relied upon). Instead, an industrial-scale system of financial fraud is needed, one capable of funneling not billions but trillions of dollars into the coffers of the underground black projects world.
Joseph P. Farrell observes that, “so long as the need for secret research continues, then so long will the need to maintain a fraudulent system of finance to support it, by force of arms if necessary. This implies, bluntly, that a move to a ‘free’ market or open system of money … is an impossibility, since such a system would compromise the integrity of the secrecy of the technologies being developed. To put it succinctly: secret technologies cannot be financed by non-secret and open sources of funding.”
The tremendous financial requirements of this secret technological apparatus demands that a supersized black budget economy be created - one whose scale and extent goes well beyond the normal fraud and criminality practiced by the CIA. To fund the buildout of things like deep-underground military bases (DUMBs) and the exotic technologies being developed in them (including UFOs), trillions of dollars of covert funds would be needed on a permanent, non-transparent basis. This is an operation requiring great ingenuity to pull off.
In 2017, former Wall Street insider and government official Catherine Austin Fitts joined forces with Dr. Mark Skidmore, an economics professor at Michigan State University, to conduct a comprehensive analysis of federal financial records. Their investigation uncovered a significant hidden funding source for this black projects underworld: systemic, large-scale accounting fraud embedded within the ledgers of major US government agencies, including the Department of Housing and Urban Development (HUD) and the Department of Defense (DoD).
Between 1998 and 2015, Fitts and Skidmore calculated that the total sum of money that has disappeared into the black budget through this type of accounting fraud adds up to the unbelievable sum of $21 trillion. As Fitts explains in her 2019 Solari Report article titled “The Real Game of Missing Money”, “between fiscal years 1998 and 2015, $21 trillion of un-documentable adjustments were identified in the financial statements of the DoD and HUD. These adjustments represent money that cannot be accounted for and appear to be part of a larger system of financial opacity.”
Fitts concludes that “the missing trillions point to the existence of a black budget economy, which operates outside of any accountability framework and funds projects that the public is entirely unaware of.” These include “the development of secret technologies, underground facilities, and classified space programs, creating an infrastructure that bypasses democratic governance.”
In a follow-up article also published in The Solari Report (“Should We Care about Secrecy in Financial Reporting?”), Skidmore discussed how the government responded to the publication of their research findings, revealing that the response was to immediately eliminate the paper trail leading to the disappeared money. In particular, “Pentagon officials turned to the Federal Accounting Standards Advisory Board (FASAB) for advice. Several months (later), FASAB posted a new document (FASAB 56), which recommended that the government be allowed to misstate and move funds in order to conceal expenditures if it is deemed necessary to protect national security interests.”
The federal government formally implemented FASAB 56’s new accounting standard on October 4, 2018 - conveniently, just in time for it to be applied to an ongoing financial audit being conducted on the Department of Defense - one of the core federal agencies complicit in this accounting fraud scheme.
Discussing the implications of FASAB 56, lawyers Michele Ferri and Jonathan Lurie, also writing in The Solari Report, highlight that the new accounting standard “allows federal agencies to modify their financial statements in the name of national security, effectively creating a system where entire sections of the federal budget can be hidden from public and congressional oversight.” This will have the effect of permanently institutionalizing “a shadow financial system within the government, allowing for the permanent misallocation of taxpayer resources into covert operations.”
Fitts and Skidmore emphatically warn how dangerous and unconstitutional the regulatory changes that FASAB 56 specifies are, explaining that they “override the last 230 years of US Constitution and financial management laws and accounting conventions.” Specifically, “this policy allows approximately 1170 federal reporting entities to shift amounts from line item to line item, and sometimes even omit spending entries altogether in their financial statements, if ‘national security’ purposes make it necessary to avoid revealing classified information.” For example, “the finances of a division of the Navy could be deleted from the Navy’s financial statements and moved into the Army’s financial statements. Or, presumably, part of the Army’s finances could be moved into the operations of HUD or NASA or any other reporting entity.”
Fitts states the dangers of FASAB 56 in simple and direct terms: “Essentially, the federal government has adopted an accounting and public reporting policy that allows a small group of unelected individuals with security clearances and ‘need-to-know’ access to information to engage in secret processes to establish and maintain separate sets of classified secret books in most federal agencies and ‘component’ entities. It also allows members of this group to purge from publicly available financial statements anything the group deems to be worthy of national security protection.” This means that “from this point forward, the federal government will keep two sets of financial reports, one modified set for the public and one true set that will remain undisclosed.”
As a further component of this new accounting policy, “the national intelligence branch of government has the authority to exempt (private) companies from standard reporting requirements. Again, investors and the general public have no way of knowing which companies have altered financial statements.” By implication, “the greater part of the US securities market has now effectively gone dark,” since there is no way to honestly evaluate the ledgers of corporations engaging in these types of accounting practices.
Without transparent financial reporting by the federal government or their private contractors, neither democracy nor capitalism can function as they’re designed to - government agencies can’t be held accountable to regulators or voters, and financial investors cannot accurately evaluate the accounting ledgers of corporations seeking their investment.
What emerges instead is a a system in which, as Catherine Austin Fitts cautions, the National Security State “can borrow as much money as it wants globally, and print as much money as it wants globally, using citizens credit and the federal credit, and give that money to private corporations for the most powerful secret projects on the planet in terms of technology. And they don't have to report to anybody. And it's completely secret and nontransparent.”
She concludes: “You're basically creating a secret source of an infinite amount of government money to pay corporations to develop and own the most powerful weapons, technology and space programs on the planet. And it is completely out of control and not under congressional supervision.”