CIA - Financial Intelligence Operations - Part 3
by, Offshore Informant [OffshoreInformant@safe-mail.net]

October 1, 2005

Years ago, Paul Hiram Chappell [See, e.g. FED - International Financial Progressions - Part 2] led the Office of Chief Counsel in the U.S. Internal Revenue Service (IRS) for the U.S. Treasury Department.

On September 10, 2005 he claimed to represent at least two (2) businesses and its affairs for a man named Robert Earl Palm, who Chappell claimed to have known for over 15-years.

Fifteen (15) years ago, Robert Earl Palm began being named by major newspapers in several major countries as having committed numerous financial business crimes, amongst other activities, which included:

- Currency trading fraud (Russia);

- Fraudulent use of ‘counterfeit official government letterheads’ (Russia);

- Fraudulent use of ‘counterfeit official government representative signatures’ (Russia);

- Fraudulent use of ‘official government TELEX communication systems’ (Russia); and,

- Bank securities exchange fraud (China).

PRAVDA, a Russian news agency has been in business for several decades, and was identified by the U.S. Central Intelligence Agency (CIA) as the "KGB Information Agency", an adversary to what the CIA uses known as the "U.S. Information Agency".

From 1991 thru 1992, articles (see below URL links) appearing in PRAVDA contained investigative detail surrounding multiple financial business frauds throughout Soviet Union (now known as, CIS) territories by a man it named as “Robertowi Palmowi” (aka) “Roberta Palma” (in China), however in 1993 THE WALL STREET JOUNAL identified the same man, who was actually named "Robert Earl Palm".

The actual PRAVDA investigative news articles - written in Russian using the Cyrillic alphabet, also saw several English-language named individuals and businesses appear, at:

PRAVDA

http://www.ua-pravda.com/biograph3.shtml

http://www.ua-pravda.com/biograph4.shtml

http://fakt.temnik.com.ua/

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[NOTE: Following the PRAVDA articles (above) in 1991 and 1992, THE WALL STREET JOURNAL carried the article (below) in 1993, which was retrieved in 1998 from Mississippi State University (USA).]

THE WALL STREET JOURNAL

July 22, 1993

International Huge Frauds Hit China ex-Soviet Bloc
Canada Businessman Cited In Schemes Involving Billions In Bank Credit
by Robert Steiner, staff reporter (The Wall Street Journal)

HONG KONG - A portly foreigner turned up at a bank branch in Nanning southern China last year and made a startling offer. He would lend the bank 11-Billion in return for a simple IOU.

Liu Minshan, President of GUANGXI TRUST & INVESTMENT CORPORATION accepted the offer. In China's breakneck economic acceleration, an opportunity to lay hands on foreign currency was too good to pass up, even if his company wasn't supposed to borrow from abroad. He issued a massive Promissory Note but the loan never arrived and Mr. Liu resigned last month.

HALFWAY AROUND THE WORLD MORE THAN 15,000 POLISH POTATO FARMERS ARE STUCK WITH THE NOTE MR. LIU ISSUED. THEIR AGENTS ACCEPTED IT AS PAYMENT FOR MOST OF THEIR 1991 POTATO CROP ONLY TO FIND OUT THE NOTE WAS WORTHLESS.

BEHIND BOTH DEALS, SAY BUSINESSMEN IN CHINA AND POLAND IS A 45- YEAR OLD CANADIAN BUSINESSMAN AND FORMER SMALL TOWN PREACHER, ROBERT EARL PALM. THEY AND SOME OF THE PEOPLE HE DID BUSINESS WITH SAY MR. PALM IS A REMARKABLE PIONEER IN ONE OF THE HOTTEST TRADES TO TOUCH THE FAST EMERGING MARKETS OF THE FORMER SOVIET BLOC AND CHINA. FRAUD.

IN THE CHAOS OF ECONOMIC REFORMS SWEEPING THE COMMUNIST AND EX-COMMUNIST WORLD, OPPORTUNITY FOR FRAUD ABOUNDS. "WESTERN DEMOCRACY HAS COST ME MY LIVELIHOOD," A POLISH POTATO FARMER COMPLAINED TO A CANADIAN TELEVISION CREW IN FEBRUARY.

OTHERS PUT THE BLAME ON MR PALM WHO IS THE TARGET OF AT LEAST THREE [3] LAWSUITS IN THE U.S. AND CANADA. MR. PALM'S ACTIVITIES ALSO HAVE COME UNDER THE SCRUTINY OF THE U.S. FEDERAL BUREAU OF INVESTIGATION.

THROUGH HIS LAWYERS AT ASHTON & LYON, A BRITISH COLUMBIA FIRM, MR PALM REFUSED TO COMMENT FOR THIS ARTICLE.

LAST MONTH IN WHAT APPEARS TO BE ONE OF THE LARGEST FRAUDS IN CHINA, SINCE THE COUNTRY LAUNCHED ITS ECONOMIC REFORM PROGRAM IN 1979, THE COUNTRY'S PUBLIC SECURITY BUREAU DISCLOSED THAT IT HAD ARRESTED TWO [2] AMERICAN'S, FRANCISCO HUNG MOY AND RAYMOND LEE. THEY ARE SUSPECTED OF PERSUADING OFFICIALS OF A RURAL BRANCH OF AGRICULTURAL BANK OF CHINA TO WRITE 10-BILLION IN FRAUDULENT STANDBY LETTERS OF CREDIT [SBLC]. THE COLLATERAL WAS ANOTHER LETTER OF CREDIT [LOC] ISSUED BY UNITED NATIONAL REPUBLIC BANK OF RUSSIA, A BANK THAT OFFICIALS IN MOSCOW SAY, "DOESN'T EXIST IN RUSSIA". [UNRB, COULD BE REGISTERED ANYWHERE ELSE, HOWEVER!]

AGRICULTURAL BANK SAYS THE MEN IDENTIFIED THEMSELVES AS WORKING FOR MR. PALM. BY THE TIME MESSRS HUNG MOY AND LEE WERE ARRESTED, THOUGH THE LETTERS OF CREDIT WERE IN CIRCULATION, SCOTLAND YARD UNCOVERED 22 OF THE CHINESE ISSUED LETTERS WITH A SUPPOSED TOTAL VALUE OF 1-BILLION. SUGGESTING THAT THE REST OF THE 9-BILLION IN WORTHLESS PAPER ARE FLOATING THROUGH THE WORLD'S FINANCIAL SYSTEM, CHINA HAS ISSUED AN INTERNATIONAL WARNING TO BANKERS AGAINST HONORING THE NOTES.

MR. PALM, BALDING WITH A FRINGE OF GRAY HAIR, DOES BUSINESS FROM AN OFFICE IN AN INDUSTRIAL AREA OF THE BRITISH COLUMBIA CAPITAL OF VICTORIA ON CANADA'S PACIFIC COAST. PEOPLE WHO HAVE MET HIM SAY HE SPEAKS INTENSELY ABOUT WHAT HE CALLS THE RELIGIOUS NATURE OF HIS WORK. INDEED HE USED TO BE A PENTECOSTAL MINISTER.

HIS FORMER PARTNERS, IN EASTERN EUROPE, SPEAK SOMEWHAT LESS INSPIRATIONALLY ABOUT THEIR BUSINESS WITH HIM. AMONG THEM IS A UKRAINIAN TRUST COMPANY BATKIVSCHINA, WHICH CLAIMS IN A LAWSUIT FILED IN A U.S. DISTRICT COURT IN CALIFORNIA, THAT MR. PALM AND TWO [2] OTHER MEN OWE IT $311-MILLION, IN PAYMENT FOR RUSSIAN CURRENCY, THE THREE [3] MEN BOUGHT.

A COMPANY IN FINLAND IS SUING MR. PALM AND OTHERS IN THE SUPREME COURT OF BRITISH COLUMBIA IN VANCOUVER OVER ANOTHER CURRENCY TRADE.

THE OWNERS OF MOSCOW'S PARKLAGUNA HOTEL CLAIM THAT MR PALM'S COMPANY OWES $130,000 FOR KEEPING AN OFFICE IN THEIR HOTEL BETWEEN AUGUST AND DECEMBER 1992. "ONLY PROMISES WE HAVE," SAYS SVETLANA LEPESHKOVA FRONT OFFICE MANAGER AT THE HOTEL. "PROMISES, PROMISES, PROMISES. THAT IS ALL. WE TRUSTED THEM BECAUSE AT FIRST THEY PAID."

INDEED SOME OF HIS FORMER BUSINESS CONTACTS AND THEIR LAWYERS SAY THAT MR. PALM, IN DEALING WITH EACH OF THEM, PUT UP MONEY OR COLLATERAL TO ESTABLISH TRUST, THEN GOT CAPITAL ADVANCES FROM THEM. APPROPRIATELY, MR PALM'S VICTORIA [British Columbia, Canada] BASED COMPANY IS NAMED, ADVANCE CAPITAL SERVICES CORP.

A 1992 PROFILE BY DUN & BRADSTREET CORP. - BASED IN PART ON INFORMATION FROM ADVANCE CAPITAL SERVICES - DESCRIBES THE COMPANY'S PRINCIPAL BUSINESS TERRITORY AS INTERNATIONAL, ADDING THAT IT HAS 200 EMPLOYEES 20 BRANCHES AND 25 SUBSIDIARIES. HALF THE COMPANY'S ANNUAL REVENUE OF 18-MILLION, IS LISTED AS COMING FROM FOOD WHOLESALING AND 40 [-MILLION] FROM LUMBER BROKERING AND METAL MINING AND EXPLORATION. MR PALM HAS BEEN WITH THE COMPANY - OF WHICH HE OWNS 25 - SINCE IT INCORPORATED IN 1985, SAYS DUN & BRADSTREET, AND IS ITS ONLY DIRECTOR.

MR. PALM FIRST CHECKED INTO MOSCOW'S PARKLAGUNA HOTEL IN AUGUST 1991. AS RUSSIA WAS REELING FROM THE COLLAPSE OF MIKHAIL GORBACHEV'S GOVERNMENT, THE SUDDEN END TO CENTRAL PLANNING LEFT RUSSIAN CONSUMERS SCRAMBLING FOR FOOD AND NEW RUSSIAN BUSINESSES SCRAMBLING FOR HARD CURRENCY. UNDER SUCH CIRCUMSTANCES, A SEEMINGLY WEALTHY WELL-CONNECTED WESTERN BUSINESSMAN MIGHT EASILY FIND EAGER RUSSIAN PARTNERS.

IN DEALING WITH THE UKRAINIAN TRUST (NAMED, BATKIVSCHINA) MR. PALM SHOWED OFF LETTERS OF REFERENCE, PURPORTEDLY FROM SENIOR RUSSIAN GOVERNMENT OFFICIALS, SAYS BATKIVSCHINA'S LAWYER PHILIP KAUFLER. MR. PALM ALSO BOASTED OF HIS COMPANY'S TIES TO UNITED NATIONAL REPUBLIC BANK OF RUSSIA OR UNRB.

BUT NO SUCH BANK EXISTS IN RUSSIA, SAYS THE COUNTRY'S CENTRAL BANK. [BUT COULD BE REGISTERED ELSEWHERE]

UNRB FINANCIAL STATEMENTS RECEIVED BY HOD IMPEX, LTD. - A POLISH CONCERN - ARE SIGNED AS AUDITED BY MCIVOR & ASSOCIATES, THE VICTORIA ACCOUNTING FIRM THAT AUDITS ADVANCE CAPITAL SERVICES. BUT CANADA'S OFFICE OF THE SUPERVISOR OF FINANCIAL INSTUTITIONS SAYS, THE BANK ISN'T AUTHORIZED TO CONDUCT ANY BUSINESS FROM CANADA [BUT, IT CAN ELSEWHERE]. A BALANCE SHEET ISSUED BY THE BANK SEEMS ABSURDLY LARGE GIVEN UNRB'S OBSCURITY. ITS $18895-BILLION ['TRILLIONS'] IN CLAIMED ASSETS AS OF NOV 1, 1991 WOULD PLACE IT AMONG THE WORLD'S 30 BIGGEST BANKS.

A FINNISH COMPANY ENGINEERING OFFICE, BERTEL ECKENGREN LTD. ALLEGES IN ITS LAWSUIT THAT IT CONTRACTED WITH MR. PALM, ADVANCE CAPITAL SERVICES, AND UNRB TO BUY 430-MILLION RUBLES IN EXCHANGE FOR 249-MILLION IN MAY 1992. BUT, ECKENGREN SAYS, IT RECEIVED ONLY 71-MILLION RUBLES.

SIMILARLY, BATKIVSCHINA CLAIMS - IN ITS LAWSUIT - THAT IT AGREED WITH MR. PALM TO SELL 724-BILLION RUBLES TO A LICHTENSTEIN COMPANY, CARTESA FINANCE CORP., FOR 311-MILLION IN DECEMBER 1991.

WHEN THE DOLLARS HADN'T ARRIVED AT BATKIVSCHINA'S BANK BY MID1992, THE UKRAINIAN COMPANY SAYS MR. PALM OFFERED IT 35-MILLION OF STOCK IN CARTESA, A COMPANY THE UKRAINIANS SAY WAS ALREADY IN LIQUIDATION.

BATKIVSCHINA IS SUING CARTESA, ADVANCE CAPITAL SERVICES, AND AN INDIANA [USA] COMPANY [?] FOR 109-MILLION UNDER U.S. PROVISIONS ALLOWING TRIPLE DAMAGES IN SUITS THAT PROVE ELEMENTS OF RACKETEERING.

BUT THE SCOPE OF THESE DEALINGS PALES IN COMPARISON TO ACTIVITIES LINKED TO MR. PALM IN CHINA SHORTLY AFTER HIS MEETING AT GUANGXI TRUST IN APRIL 1992. ADVANCED CAPITAL SERVICES APPARENTLY TURNED TO AGRICULTURAL BANK OF CHINA, ONE OF CHINA'S FOUR [4] NATIONAL BANKS, WHICH HAS A BRANCH IN HENGSHUI, A TOWN SOUTHWEST OF BEIJING, LIKE GUANGXI TRUST.

AGRICULTURAL BANK OF CHINA (HENGSHUI BRANCH) IS NOT ALLOWED TO CONDUCT INTERNATIONAL BUSINESS, BUT THE BANK SAYS ITS HENGSHUI BRANCH MANAGER WAS OFFERED BY MESSERS HUNG MOY AND LEE A 10-BILLION STANDBY LETTER OF CREDIT [SBLC] FROM UNITED NATIONAL REPUBLIC BANK OF RUSSIA IN EARLY 1993.

IN RETURN MESSRS HUNG MOY AND LEE ASKED THE BRANCH TO WRITE 200 SMALLER STANDBY LETTERS OF CREDIT [SBLC] WITH FACE VALUES TOTALING 10-BILLION. THE LETTERS WERE WRITTEN AND SIGNED, APRIL 1.

ALL THE LETTERS OF CREDIT [LOC] WERE LABELED AS BEING BACKED BY, UNITED ASIA GROUP, A NEW YORK REGISTERED COMPANY OF WHICH MR HUNG MOY IS PRESIDENT.

ACCORDING TO AGRICULTURAL BANK IN MAY, AGRICULTURAL BANK WARNED BANKS WORLDWIDE NOT TO ACCEPT STANDBY LETTERS OF CREDIT [SBLC] FROM ITS HENGSHUI BRANCH. A MONTH EARLIER, IT HAD WARNED THEM NOT TO ACCEPT A STANDBY LETTER OF CREDIT [SBLC] FROM ITS BRANCH IN SANYA, ON THE ISLAND OF HAINAN, [CHINA].

THE SANYA LETTER OF CREDIT [LOC] WAS VALUED AT 80-MILLION WITH A VALIDITY OF 20-YEARS. IT LISTED NO BENEFICIARY.

BUT HOD IMPEX, A BUDDING FIRM OF POLISH FOOD BROKERS, GOT THE WARNING TOO LATE. IT HAD STRUCK A DEAL IN FEBRUARY AND MARCH 1992 TO SELL ADVANCE CAPITAL SERVICES 316-MILLION OF POTATOES AND OTHER FOOD FOR DISTRIBUTION AS HUMANITARIAN AID IN THE FORMER SOVIET UNION.

"THIS WAS THE FIRST CASE FOR OUR COMPANY TO BE INVOLVED IN SUCH BIG BUSINESS," SAYS ANDRZEJ JANICKI, SENIOR ADVISER TO HOD IMPEX'S MANAGEMENT.

BECAUSE HOD IMPEX HAD NEVER HEARD OF ADVANCE CAPITAL, IT ASKED DUN & BRADSTREET TO INVESTIGATE ITS CORPORATE AND PAYMENT HISTORY. A COPY OF THE DUN & BRADSTREET REPORT RECEIVED BY HOD IMPEX INDICATED ADVANCE CAPITAL'S PAYMENTS TENDED TO BE SLOW BY ONLY 11-DAYS.

SO BETWEEN MARCH 30 AND MAY 18 HOD IMPEX SENT 373-MILLION OF FOOD TO THE FORMER SOVIET UNION, MAINLY TO BASES OF DEMOBILIZED SOVIET SOLDIERS.

IT THEN STOPPED THE SHIPMENTS BECAUSE ADVANCE CAPITAL HAD STILL PAID NOTHING ON JUNE 8.

ADVANCE CAPITAL TOLD HOD IMPEX IT COULD DRAW 125-MILLION FROM THE GUANGXI TRUST PROMISSORY NOTE. IT WAS LATER HANDED THE STANDBY LETTER OF CREDIT [SBLC] FROM THE SANYA BRANCH OF THE AGRICULTURAL BANK. THE FOOD BROKER LATER DISCOVERED THAT BOTH DOCUMENTS ARE WORTHLESS.

JULIA LEUNG CONTRIBUTED TO THIS ARTICLE.

- - - -

Reference(s), at:

[NOTE/HINT: When viewing the aforementioned article at the Mississippi State University website, you 'may have to wait for the entire page to load' as there are many articles, afterwhich it is recommended you use your computer browser "Edit/Find" menu and enter a 'keyword' such as "Palm" (leave out quotation marks) to find the location of the specific article on that one (1) text-lengthy webpage.]

Mississippi State University (USA)

http://www.cavs.msstate.edu/hse/ies/publications/courses/ece_8463/projects/1998_spring/data/lm_train...

AND/OR, at:

Mississippi State University (USA)

http://www.isip.msstate.edu/publications/courses/ece_8463/projects/1998_spring/data/lm_training/wsj9...

[NOTE: Should the aforementioned article no longer be available on the internet, go to: [ http://www.archive.org ] and enter the URL (above) to search for the 'approximate date' and URL provided for that article to read it from historical archives if available.]

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[NOTE: The information (below) pertains to Robert Earl Palm, UNITED NATIONAL REPUBLIC BANK (of Russia), and SHERWOOD INVESTMENTS (BAHAMAS) LTD. Although the information (below) was primarily written in the GERMAN-language, it was machine-translated into the ENGLISH-language as well (below)]

January 10, 1994

ICC-REPORT (INTERNATIONALE HANDELSKAMMER, PARIS) [In ENGLISH: (“INTERNATIONAL CHAMBER OF COMMERCE, PARIS”)]

Vorwort [In ENGLISH: “Preface”]

Der nachfolgende Artikel von der ICC ist bereits zeitlich überholt. Wir möchten diesen dennoch dem interessierten Leser gerade in der heutigen Zeit anbieten. In einer Zeit also, in welcher am Kapitalmarkt immer mehr Berater und Anbieter mit Topverbindungen zu extrem günstigen Geschäften im Kapitalanlagebereich auftreten. Anhand dieses Artikels kann man ersehen, dass selbst bei Vorlage von Bankpapieren, welche außerhalb der Banken gehandelt werden, äußerste Vorsicht geboten ist. Wir empfehlen grundsätzlich bei solchen Geschäften eine Bank zu Bank Abwicklung. In der Regel trennt sich dabei sehr oft das "Spreu vom Weizen".

[In ENGLISH: The following article of the ICC is already temporally outdated. We would like to offer nevertheless these to the interested reader straight in the today's time. In a time thus, in which at the capital market ever more advisor and offerer with Topverbindungen arise to extremely favorable business within the investment range. On the basis this article one can see that even with collecting main of bank papers, which are acted outside of the banks extreme caution is required. We recommend in principle with such business a bank-to-bank completion. Usually thereby "chaff very often separates from wheat".]

. . .

4. Einige Beispiele für Betrug mit "Dokumente erstklassiger Banken"

[In ENGLISH: Some examples of fraud with "documents of first-class banks"]

4.1. Eine Reihe von Ermittlungsverfahren werden zur Zeit von den Strafverfolgungsbehörden auf der ganzen Welt wegen Finanzschwindel im Zusammenhang mit "Dokumente erstklassiger Banken" durchgeführt. Bei den nachstehenden Beispielen handelt es sich um Fälle, über die bereits ausführlich in der Presse berichtet wurde.

[In ENGLISH: A set of preliminary investigations at present by the prosecution authorities in the whole world because of financial swindles in connection with "documents of first-class banks" are accomplished. With the following examples it concerns cases, on which in the press one reported already in detail.]

4.2 Am 16. Februar 1993 kündigte die Heilsarmee, Großbritanniens größte karitative Einrichtung, in einer sorgfältig formulierten Erklärung an, dass sie um über 6 Mio. US-Dollar betrogen worden sei. Das Geld war den Finanzberatern Stuart Ford, einem Geschäftsmann aus Birmingham, und Gamil Naguib, einem in London lebenden Ägypter, übergeben worden, um es in den Kauf und Verkauf von "Standby-Akkreditiven" zu investieren.

[In ENGLISH: February 1993 announced the welfare army, of Great Britain largest karitative mechanism, in a carefully formulated explanation that they betrogen over over 6-million US dollar were. The money was the financial advisers Stuart Ford, a businessman from Birmingham, and Gamil Naguib, handed over to London living Egyptian, in order to invest it into the purchase and sales of "Stand By Letters of Credit".]

4.3 Das Geld wurde von London nach Belgien überwiesen und ohne Wissen der Heilsarmee vom Konto in Belgien abgezogen. Obwohl das belgische Bankkonto vier Zeichnungsberechtigte besaß, darunter die zwei Finanzberater und zwei Führungskräfte der Heilsarmee, waren für Überweisungen vom Konto nur zwei Unterschriften erforderlich. In diesem Fall waren die Unterschriften die von Ford und Naguib.

[In ENGLISH: The money was transferred from London to Belgium and taken off without knowledge of the welfare army from the account in Belgium. Although the Belgian bank account possessed four [4] authorized to sign on it, among them the two [2] financial advisers and two [2] high-level personnel of the welfare army, the account only saw it necessary for two [2] signatures for its transfers. In this case the signatures were from Ford and Naguib.]

4.4 Das Geld lief über Konten bei drei Banken in Luxemburg und verschwand, nachdem es nach Panama und Liechtenstein überwiesen worden war. Ebenfalls unauffindbar war die Islamic Pan American Bank, die angeblich die Standby-Akkreditive ausgestellt hatte. Bis heute ist nur ein kleiner Betrag des Geldes ausfindig gemacht und wiederbeschafft worden.

[In ENGLISH: The money was sent to accounts of three [3] banks, and in Luxembourg it disappeared, after it had been transferred to Panama and Liechtenstein. THE ISLAMIC PAN AMERICAN BANK, which had allegedly issued the Stand By Letters of Credit, was likewise untraceable. Until today only a small amount of the money was ever recovered.]

4.5 Während der Betrug bei der Heilsarmee aufgedeckt wurde, wurde Adrian Powles, Seniorpartner im Londoner Büro der australischen Anwaltskanzlei Allen & Hemsley nach Sydney zurückbeordert, nachdem die Kanzlei entdeckt hatte, dass 20 Mio. US-Dollar an Mandantengeldern fehlten.

[In ENGLISH: While the fraud was uncovered at the welfare army, Adrian Powles, senior partner in the London office of the Sydney Australia law firm of ALLEN & HEMSLEY discovered a back order, after the kanzlei had discovered that 20-million US dollars in mandator funds was missing.]

4.6 Der Großteil der fehlenden Gelder gehörte der Regierung von Nauru, einem Kleinstaat im Südpazifik. Das FBI und die US-Staatsanwaltschaft in New York führen die Ermittlungen in diesem weit reichenden Finanzschwindel. Bisher bleiben 8.5 Mio. US-Dollar an nauruischem Geld unauffindbar.

[In ENGLISH: The majority of missing funds belonged to the government of the Republic of Nauru, a small state in the South Pacific ocean. The FBI and the U.S. public prosecutor's office in New York lead the determinations in this financial swindle handing far. So far 8.5-million U.S. dollars of Nauru money remains untraceable.]

4.7 Das Geld wurde vom Bankkonto des Nauru Phosphate Royalties Trust, Melbourne. Australien, auf Bankkonten weltweit überwiesen. Es sollte für verschiedene Investitionsprojekte verwendet werden, von denen behauptet wurde, dass sie durch "Rahmensicherungsverträge mit erstklassigen Banken" für den Erwerb von "Dokumente erstklassiger Banken" mit einem beträchtlichen Disagio aktiviert würden, die dann wieder mit hohem Gewinn verkauft werden könnten. Die vor der Überweisung von 8,5 Mio. US-Dollar vereinbarte Bedingung besagte, dass das Geld erst bei Aushändigung der Bankdokumente an die Nauruer bei der Powles’Bank freigegeben werden sollte. Die Dokumente wurden nie übergeben.

[In ENGLISH: The money came to the bank account in Nauru from Phosphates Royalties Trust in Melbourne, Australia and was transferred to bank accounts worldwide. It was to be used for different investment projects, by which it was maintained that they were activated by "framework safeguard contracts with first-class banks" for the acquisition of "documents of first-class banks" with a considerable Disagio, which could be sold then again with high profit. The condition agreed upon before the transfer of 8.5-million U.S. dollars meant that the money should be released only when handing the bank documents over in Nauru with the Powles' Bank. The documents were never handed over.]

4.8 Angeblich waren diese Dokumente von der "Commonwealth National Bank of Antigua" ausgestellt, einer "Briefkastenbank", die von Leonard Fruber und Ralph Scheri in New York geleitet wurde. Im Dezember 1992 wurden diese beiden "leitenden Bankangestellten von der Commonwealth National Bank of Antigua" vom New Yorker Bezirksstaatsanwalt wegen versuchter Einlösung eines gestohlenen Schecks im Wert von knapp 1 Mio. US-Dollar angeklagt. Im Juni 1993 wurden die Beiden wegen strafbaren Besitzes von Diebesgut und gefälschten Urkunden verurteilt.

[In ENGLISH: Allegedly these documents were issued by the "COMMONWEALTH NATIONAL BANK OF ANTIGUA", a "mail box bank", which was led by Leonard Fruber and Ralph Scheri in New York. In December 1992 these two [2] "leading bank employees" of COMMONWEALTH NATIONAL BANK OF ANTIGUA were accused in New York by the district public prosecutor of trying to redeem funds using a stolen cheque valued just under 1-million US dollars. In June 1993 the two [2] were condemned and punished for possession of stolen property and falsified documents.]

4.9 Der australische Rechtsanwalt Adrian Powles befindet sich in psychiatrischer Behandlung und muss sich nun in mindestens zehn Betrugsfällen verantworten. Die Polizei in Großbritannien und Australien ermittelt ebenfalls in dieser Betrugssache.

[In ENGLISH: The Australian attorney Adrian Powles is under psychiatric treatment and must answer to charges in at least ten [10] fraud cases. The police in Great Britain and Australia are also looking into this fraud operation.]

4.10 Die Firma Turnberry Underwriters wurde im August 1992 in Florida, USA, gegründet. Sie startete eine umfangreiche Werbekampagne im Wirtschaftsteil europäischer Zeitungen, in der sie sich als Vertreter eines großen Trusts ausgab und sich bereit erklärte, auf Wunsch "Dokumente erstklassiger Banken" für Risikokapital zu liefern. Diese Werbeanzeigen erwiesen sich für kleine Firmen, die dringend auf Kapital angewiesen waren, als besonders attraktiv.

[In ENGLISH: The company TURNBERRY UNDERWRITERS was created in August 1992 in Florida, USA. It started an extensive advertising campaign in European newspapers pertaining to restaurant economics, in which it offered itself as a representative of large trusts and explained it was ready to supply desireable "documents of first-class banks" for risk capital. These advertisements proved particularly attractive for small companies, which were urgently dependent on capital.]

4.11 Die Antragsteller wurden gebeten, den sorgfältig formulierten Vertrag zu unterzeichnen und 2% des erforderlichen Kapitals auf einem Treuhandkonto in Miami zu hinterlegen. Das Konto wurde vom Anwalt Turnberrys, Jerry Breslin, verwaltet, der inzwischen verhaftet und der Verabredung zum Handel mit US-Schatzobligationen, die einem New Yorker Kreditinstitut gestohlen worden waren, beschuldigt wurde. In der Vereinbarung waren den Vertragspartnern Bedingungen über Nichtoffenlegung und Nichtumgehung auferlegt worden.

[In ENGLISH: The applicants were asked to sign the carefully formulated contract and to deposit 2% of the necessary capital on a trust account in Miami. The account was administered by TURNBERRY lawyer Jerry Breslin, who had been accused and arrested while trying to trade U.S. Treasury obligations stolen from the New York Credit Institute. In the agreement, conditions over Nichtoffenlegung and Nichtumgehung had been imposed upon by the contracting parties.]

4.12 Die Antragsteller erhielten zehn Tage Zeit, eine Bankgarantie über 10% des Gesamtdarlehnes als Provision für Turnberry einzuholen, bevor die Gelder freigegeben wurden. Laut Turnberry war dies mit den Geldgebern der Antragsteller so vereinbart worden.


[In ENGLISH: The applicants received ten [10] days time to catch up a bank guarantee over 10% of the Gesamtdarlehnes as commission for TURNBERRY before the funds were released. According to TURNBERRY this had been agreed upon in such a way with the backers of the applicants.]

4.13 Als sich die Antragsteller an ihre Banken wandten, stellten sie fest, dass die Banken Schwierigkeiten hatten, die von Turnberry verlangten Garantien auszustellen. Die gewährte Frist lief bald ab, und Turnberry behauptete, der Antragsteller sei im Verzug und behielt die hinterlegten 2% ein.

[In ENGLISH: When the applicants turned to their banks, they stated that the banks had difficulties in issuing the warranties required by TURNBERRY. The granted period soon lapsed, and TURNBERRY stated the applicant was in default and retained the deposited 2%.]

4.14 Nach Angaben der Financial Times schätzen die US-Behörden, dass die Firma Turnberry und mit ihr verbundene Gesellschaften und Personen bis zu 30 Mio. US-Dollar an Vorschüssen (Anzahlungen) von amerikanischen Firmen erhielten. Sie glauben, dass Firmen außerhalb der Vereinigten Staaten, hauptsächlich aus Großbritannien und Irland, weitere fünf bis zehn Mio. US-Dollar als Anzahlung an Turnberry leisteten. Die britischen Behörden ermitteln nun gemeinsam mit dem FBI in Miami, USA gegen Turnberry und Konsorten.

[In ENGLISH: According to information from the FINANCIAL TIMES, U.S. authorities estimate the company TURNBERRY is connected to societies and persons who received upwards of 30-million US dollasr as advances (pre-payments) from American companies. They believe companies carried outside of the United States, mainly from Great Britain and Ireland, furthered it for five [5] to 10-million US dollars beyond the TURNBERRY pre-payment. The British authorities are determining with the FBI in Miami, USA against TURNBERRY and KONSORTEN.]

4.15 Im Juli 1993 teilte das Büro für Öffentliche Sicherheit in einem der größten Betrugsfälle in China seit Verabschiedung des Wirtschaftreformprogramms des Landes im Jahre 1979 mit, dass es zwei Amerikaner, Francisco Hung Moy und Raymond Lee, festgenommen habe. Die beiden wurden verdächtigt, Beamte einer ländlichen Filiale der Agricultural Bank of China überredet zu haben, 200 Standby-Akkreditive in Höhe von insgesamt 10 Mrd. US-Dollar zugunsten von Sherwood Investment (Bahamas) Ltd. auszustellen.

[In ENGLISH: In July 1993 the Office for Public Security in one of the largest fraud cases communicated in China since verabschiedung of the restaurant reform program of the country in the year 1979, said that it had arrested two [2] Americans, Francisco Hung Moy and Raymond Lee. Officials of a rural branch for the AGRICULTURAL CENTRAL BANK OF CHINA said the two [2] suspects had persuaded the issuance of 200 Stand By Letters of Credit (SBLC) in an amount totalling 10-Billion U.S. dollars in favor of SHERWOOD INVESTMENTS (Bahamas) LTD.]

4.16 Als Sicherheit diente ein Akkreditiv, das die United National Republic Bank of Russia ausgestellt hatte, eine Bank, die nicht existiert. Die Agricultural Bank gab an Banken weltweit eine Warnung heraus, die Standby-Akkreditive nicht honorieren, die bei ihrer Einlösung ein Fünftel der gesamten Devisenbestände Chinas wert wären.

[In ENGISH: As security, a Letter Of Credit (LOC) worth one-fifth (1/5th) of the entire foreign exchange reserves of China (after redemption) had been issued by UNITED NATIONAL REPUBLIC BANK OF RUSSIA, a bank which did not exist. The China Agricultural Central Bank published a worldwide bank warning regarding Stand By Letters of Credit (SBLC) they do not honor.]

4.17 Glücklicherweise führte ein Tipp aus der Unterwelt zur Entdeckung von 188 Urkunden in Großbritannien. Die Standby-Akkreditive waren offensichtlich von einem Nigerianer ins Land gebracht worden, der zuerst zahlreiche Kopien davon angefertigt hatte und diese dann von britischen Rechtsanwälten auf Übereinstimmung mit dem Original beglaubigen ließ. Den eingegangenen Informationen zufolge betrug der gewünschte Platzierungspreis 83% des Nennwertes. Eine britische Brokerfirma war um ihre Platzierung bemüht.

[In ENGLISH: Fortunately a tap led from the underworld to the discovery of 188 documents in Great Britain. The Stand By Letters of Credit (SBLC) had been brought into the country by a Nigerian, who obviously first made numerous copies of it and presented these for authentication to British attorneys for agreement with the original. According to the information received the desired placement price amounted to 83% of the nominal value. A British broker company was endeavoring placement.]

4.18 Im Juni 1993 wurden ca. 20 Mio. Pfund Sterling vom Konto der Managed Opportunities Limited auf Jersey auf das Konto von "The Hanover Bank Limited" auf Zypern überwiesen.

[In ENGLISH: In June 1993 approximately 20-million pounds sterling was transferred from the account of MANAGED OPPORTUNITIES LIMITED in Jersey [Channel Islands] to an account by "THE HANOVER BANK LIMITED" in Cyprus.

4.19 Managed Opportunities Limited, eine auf der Isle of Man gegründete Invetmentfirma, ist eine Tochtergesellschaft von CMI Insurance Company Limited unter der Konzernleitung von Clerical, Medical and General Life Assurance Society of the United Kingdom. Das Geld sollte nach Angaben der Hanover Bank Limited zum An- und Verkauf von "Dokumente erstklassiger Banken" genutzt werden.

[In ENGLISH: MANAGED OPPORTUNITIES LIMITED, on the Isle Of Man created INVETMENTFIRMA, a subsidiary of CMI INSURANCE COMPANY LIMITED under the company line of CLERICAL MEDICAL AND GENERAL LIFE ASSURANCE SOCIETY of the United Kingdom. According to data of THE HANOVER BANK LIMITED the money was to be used on the sales of "documents of first-class banks".]

4.20 The Hanover Bank Limited, eine Offshore-Bank in Form einer Mantelgesellschaft, wurde am 12. August 1992 in Antigua gegründet. Nach Angaben der Hanover sollten die Dokumente von Corporate Financial Investments of London über Kinitor Trading Limited, eine Zypriotische Offshore-Gesellschaft, die am 17. November 1992 von einem zypriotischen Rechtsanwalt gegründet wurde, beschafft werden.

[In ENGLISH: THE HANOVER BANK LIMITED, an offshore bank formed by a shell company, was created on August 12, 1992 in Antigua. According to the data of HANOVER the documents would be procured by CORPORATE FINANCIAL INVESTMENTS OF LONDON over to KINITOR TRADING LIMITED, a Cyprus offshore company, which was created on November 17, 1992 by a Cyprus attorney.]

4.21 Über die Verbindung zwischen Hanover und Corporate Financial Investments ist derzeit noch nichts bekannt. Allerdings wurde festgestellt, dass Tony Fitzpatrick, ein irischer Geschäftsmann und geschäftsführender Direktor von Hanover, dieselbe Londoner Anschrift und Telefonnummer besitzt wie der irische Geschäftsmann Peter Bolger, der Direktor von Corporate Financial Investments ist.

[In ENGLISH: At the present time very little is known about the connection between THE HANOVER BANK LIMITED and CORPORATE FINANCIAL INVESTMENTS OF LONDON. However it was stated that Tony Fitzpatrick, an Irish businessman, and acting director of THE HANOVER BANK LIMITED use the same London address and telephone number as the Irish businessman Peter Bolger, who is a director of CORPORATE FINANCIAL INVESTMENTS OF LONDON.]

4.22 Die Firma Clerical Medical International versucht seit Juli 1993, die 20. Mio. Pfund Sterling wieder aus Zypern zurückzuholen. In dem Fall ermitteln jetzt die britischen und zypriotischen Behörden.

[In ENGLISH: The company CLERICAL MEDICAL INTERNATIONAL has tried since July 20, 1993 to fetch back the 20-million pounds-sterling again from Cyprus. In the case now being determined by British and Cyprus authorities.]

. . .

- - - -

Reference(s), at:

ALPHA CONSULTING GROUP
ALPHA CREDIT
Jahnstrasse 67
D-67659 Kaiserslautern
GERMANY
TEL: +(+49) 06301-71669-0
FAX: + (+49) 06301-71669-9
E-MAIL: alpha-consult-gmbh@t-online.de

http://alpha-credit-web.de/F41_ICC-Report.htm

====

[NOTE: The credit report information (below) refer to the aforementioned ICC report named entities.]

Credit Report Date: 05 March 1997
Credit Report Date: 02 February 2000

SHERWOOD INVESTMENTS (BAHAMAS) LTD. [Report ID: 264502]
SHERWOOD RESTAURANTS LTD. [Report ID: 408530]
BITCO Building
Bank Lane
P.O. Box N 7768
Nassau
BAHAMAS

Reference(s), at:

INTERNATIONAL COMPANY PROFILE (ICP) - Credit Reports
6 - 14 Underwood Street
London N1 7JQ
UK
TEL: +44 (0) 20 7566 8274

ICP is a company of WILMINGTON GROUP PLC., quoted on the London Stock Exchange.

http://www.icpcredit.com/ReportRequest.asp?sCompanyID=115003

====

[NOTE: The information (below) is only a ‘partial list’ of assets SHERWOOD INVESTMENTS (BAHAMAS) LTD provided in two (2) joint venture agreements (below) indicating transaction dates of February 25th 1996, March 27th 1998, November 18th 1998, and July 23rd 1999 for a total value of $51.3-billion with FIRST INTERNATIONAL BANK OF GRENADA LIMITED (a now defunct independent offshore bank), GENESIS HOLDING CORP, and MUTUAL ASSETS LIMITED. Amongst the aforementioned assets (listed below), were several other assets, of which one was a $500-Million letter of credit (LOC) provided by the BANK OF TOKYO MITSUBISHI LTD that Robert Earl Palm saw SHERWOOD INVESTMENTS (BAHAMAS) LTD obtain 50% of the trading profits from via a joint venture contract agreement through trading partners of CHADWICK INVESTMENTS LTD., which were to be shared likewise (50%) - using MUTUAL ASSETS LIMITED trading partners so that FIRST INTERNATIONAL BANK OF GRENADA LTD. could derive its 50% of those traded profits. Unfortunately for FIRST INTERNATIONAL BANK OF GRENADA LTD it later discovered - nine (9) months into that trading - two (2) executives of MUTUAL ASSETS LIMITED absconded with the bank’s share of profits, which law enforcement found stuffed into two (2) MUTUAL ASSETS LTD. executives personal bank accounts. Trading was suspended, and FIRST INTERNATIONAL BANK OF GRENADA LTD never realized its joint venture contract agreement promise to receive 50% of those trading profits.]

$47.5 Billion (Gold Bullion):

1. Investment & Humanitarian Projects Agreement with Transaction code #ATCF- KBUZU 0KA 250296 1147.5US$

Signed by Mr. Kazutoshi Okasaki, Mr. John (Hans) Zuercher, Craig L. Hubner

7 Pages

1.1 Schedule "A"

BANK OF JAPAN Custodial Receipt issued by key test TELEX only

Official Certification B No. 2083/2084 (Certifying signatures of Hans Zuercher and Kazutoshi Okazaki)

4 Pages

1.2 Schedule “B”

Deed of Assignment transaction code #ATCF KBUZU OKA 250296B47.5US$ From Mr. Hisao Sato (Present Owner) and Mr. Kazutoshi Okazaki (Present Owner & Attorney In Fact for Mr. Hisao Sato) For the Benefit of SHERWOOD INVESTMENTS (BAHAMAS) LTD. and / or SHERWOOD INVESTMENTS (BAHAMAS) LTD's duly appointed administrator, MUTUAL ASSETS LIMITED

Addendum to the Investment & Humanitarian Projects agreement with transaction code #ATCF KBUZU OKA 250296 B47.5US$ signed by Mr. Kazutoshi Okasaki, Mr. John (Hans) Zuercher, Craig L. Hubner

Official Certification B No. 2094/2095 (Certifying signatures of Hans Zuercher and Kazutoshi Okazaki)

4 Pages

2. The Joint Venture Agreement under transaction code No. SHER FI JV 181198

Joint Venture Agreement between SHERWOOD INVESTMENTS (BAHAMAS) LTD. and FIRST INTERNATIONAL BANK OF GRENADA, LIMITED

5 Pages

2.1 Amendment to Agreement transaction code No. SHER FI JV 181198

Joint Venture Agreement including SHERWOOD INVESTMENTS (BAHAMAS) LTD and FIRST INTERNATIONAL BANK OF GRENADA LIMITED and GENESIS HOLDING CORP

2 Pages

2.2. Deed of Assignment (made July 23rd, 1999)

Deed of Assignment of 47.5B from SHERWOOD INVESTMENTS (BAHAMAS) LTD to FIRST INTERNAT10NAL BANK OF GRENADA LIMITED

2 Pages

AND,

$3.8 Billion (in Dai Ichi Kangyo Bank Co. Ltd. Bank Cheques)

1. Investment & Humanitarian Projects Agreement with Transaction Code #KBUZU OKA 27398 B3.8$

Agreement between Kazutoshi Okazaki & John (Hans) Zuercher and SHERWOOD INVESTMENTS (BAHAMAS) LTD

B/W Copy of Cheque # 871(AI57602) and 872(AI57602) front and back

B/W Copy of Zurcher's Passport front, back and inside

B/W Copy of Okazaki's Passport

12 pages

1. Schedule "A" Deed of Assignment with transaction code #KBUZU OKA-27398 B3.8$

Deed of Assignment Mr. Kazutoshi Okazaki Present Owner & Attorney In Fact, Mr. John (Hans) Zuercher for the benefit of SHERWOOD INVESTMENT (BAHAMAS) LTD. and / or SHERWOOD INVESTMENT (BAHAMAS) LTD's duly appointed administrator, MUTUAL ASSETS LIMITED

Official Certification B No. 2087/2088 (Certifying signatures of Hans Zuercher and Kazutoshi Okazaki)

3 Pages

3. Deed of Assignment (made November 18th, 1998)

Deed of Assignment from SHERWOOD INVESTMENT (BAHAMAS) LTD. and FIRST INTERNATIONAL BANK OF GRENADA LIMITED of the two DAI-ICHI KANGYO BANK CO. LTD. Cheques No. 871 (Al 57602) and 872(Al 57602)

2 Pages

4. Joint Venture Agreement (made November 18TH, 1998) Transaction code No.
SHER-FI-JV181198

JV between SHERWOOD INVESTMENT (BAHAMAS) LTD. and FIRST INTERNATIONAL BANK OF GRENADA LIMITED under transaction code No. SHER FI JV181198

Amendment to the Agreement under transaction code No. SHER FI JV181198 made July 20th, 1999 adding GENESIS HOLDING CORP to the Joint Venture

7 Pages

5. General Power of Attorney

Showing the authority of Mr. Kazutoshi Okazaki specifically for the two [2] DAI-ICHI KANGYO BANK CO. LTD. Cheques

Showing the authority of Mr. Kazutoshi Okazaki on a total of four [4] different cheques

4 Pages

6. Letter of Intent

Signed by Mr. Takeharu Okitsu, Mr. Tetsuro Saito, and Mr. Kazutoshi Okazaki

1 Page

7. Affidavit

Declaration of Ownership by Mr. Kazutoshi Okazaki

1 Page

8. Certification

Certifies Mr. Kazutoshi Okazaki to have authority over the two [2] cheques signed by two [2] at the FINANCE MINISTRY of JAPAN

1 Page

9. B/W Copy of Cheque # 871(Al57602) and 872(Al57602)

Front and back

2 Pages

10. Confirmation Documentation

Issued to BARCLAYS BANK PLC Confirming Authenticity, Signatory Bank Officers who signed the Cheques, etc. Signed by Ryutaro Hasimoto [aka Ryutaro Hashimoto], The Prime Minister of Japan

Issued to Mr. Karel Timmermans (Confidential) confirming authenticity of the Cheques on behalf of the Japanese Government signed by Ryutaro Hasimoto [aka Ryutaro Hashimoto], The Prime Minister of Japan

Issued to Whom It May Concern Confirming authenticity of the Cheques on behalf of the JAPANESE FINANCE DEPARTMENT signed by Mr. Sadakazut Tanigaki

3 Pages

====

[NOTE: Dan Bobocel was the former President of SHERWOOD INVESTMENTS (BAHAMAS) LTD. - as mentioned in the ICC report (above) - and CHADWICK INVESTMENTS LTD.]. Daniel Bobocel was also named as the President of SHERWOOD-DROLET LTEE [CORP.] (Alberta, Canada) in 2004 (below).]

PARTI PROGRESSISTE-CONSERVATEUR DU CANADA [PROGRESSIVE CONSERVATIVE PARTY OF CANADA]

2004

1(b) Contributions in excess of $100:

SHERWOOD-DROLET LTEE.: 289
DANIEL BOBOCEL: 182

- - - -

Reference(s), at:

http://www.elections.ca/fin/fis/pc.txt

====

THE PHOENIX BUSINESS JOURNAL - EXCLUSIVE REPORTS

October 4, 1996 (print edition)

SEC Files $1.77M Action Against Garcis USA
by Mary Vandeveire, staff writer (The Business Journal)

The Securities and Exchange Commission is taking two Valley residents to court to get back $1.77 million they allegedly gained through fraudulent stock sales.

The SEC complaint, filed in the U.S. District Court in Arizona, names Robert Poirier and Robert Palm and the sales of securities of Garcis USA Inc., an athletic equipment distributor formerly located in Scottsdale.

This is not Poirier's first scrape with the federal agency. An SEC injunction was placed against Poirier about two years after he moved here in 1986 from Oregon, a state where he had left a legacy of dubious business deals.

The SEC action filed Sept. 30 makes charges tied to activities occurring from September 1994 through September 1995.

In what federal officials call a "classic'' pattern, Poirier and Palm, aided by co-defendants Richard Wensel and James Vincent, allegedly took over Garcis, brought it public, kept their own involvement hidden, acquired a large block of shares, pumped the price up and sold the shares.

Along the way, they allegedly engaged in questionable trading activities and dragged such businesses as Southwest Airlines, The Phoenician resort and the Scottsdale Hilton hotel into their muddy scheme with false claims of product orders and contracts.

The SEC alleges that through their firm, Select Financial Corp. -- which was located in the same Scottsdale site as the Garcis office -- Poirier and Palm controlled operations of Garcis, promoted its stock and evaded SEC registration requirements -- such as resale restrictions and disclosure of ownership interest. The underlying motive, according to the SEC, was to sell stock and make money.

"When they were ready to sell, they avoided depressing the price of the stock -- which usually happens when a 'sell' order is placed -- by getting information out that promoted the company or by creating 'volume' in the stock with sales between their own accounts," said Daniel Nathan, assistant director of the SEC's enforcement division.

Nathan said the charges allege the two would also direct contacts and acquaintances to contact brokers, and sold shares out of their accounts directly to customers.

"We have no comment on whether we view the brokers' role in this matter as blameless or not, but the investigation is continuing," Nathan said.

Some of the shares were held in accounts at ADM Securities, which closed its Phoenix office three weeks ago, and Yee Desmond Schrader & Allen of Phoenix, according to the filing.

"If Poirier and Palm are customers, we keep everything about our customers and customer base confidential," said Jim Allen, managing director of Yee Desmond.

A manager from ADM Securities' Chicago office was not available for comment.

Information that Poirier, Palm and Wensel put out to promote Garcis, the filing alleges, included claims that were passed to a stock newsletter writer about orders for product from Southwest Airlines, The Phoenician and the Scottsdale Hilton.

Nathan would not disclose the inquiry, or inquiries, that led to the Sept. 30 filing.

"When you're giving out false information about major American companies, someone's bound to come to us," Nathan said.

An attorney for Southwest Airlines, Don Hood, said the airlines had at one point been trying to contact the principals of Garcis in connection with Southwest's licensing program. "We never got in touch with them, and the next thing we knew, the SEC was in touch with us," Hood said. He added that it was through the SEC investigation that the airline learned of Garcis' claims. A spokeswoman for The Phoenician said managers weren't aware of the claims.

The SEC action against Poirier and the others seeks to relieve the defendants of the profits made in their scheme, assess fines for stock regulation violations and bar Poirier, Palm and Wensel from serving as officers or directors of publicly held companies.

The defendants have 20-days from the filing date to respond. Assistant U.S. Attorney Lee Stein said any trial is at least a year off.

Poirier, a resident of Fountain Hills, came to Arizona in 1986. Stemming in part from federal investigations there, the U.S. District Court in Oregon in 1988 enjoined Poirier, a Canadian citizen, from future violations of securities regulations, citing earlier activities that basically followed the fraud formula allegedly carried out in Phoenix.

Palm, also a Canadian citizen, is listed as a Scottsdale resident.

Vincent lives on the Isle of Man, British Isles, and Wensel is a Scottsdale resident.

Attempts to reach the defendants were unsuccessful.

- - - -

Reference(s), at:

American City Business Journals Inc.

http://www.bizjournals.com/phoenix/stories/1996/10/07/story6.html

====

STATE OF ARIZONA

Secretary Of State

Corporations Department

Arizona File No.: F-0811512-0
Date Assigned: 20JUN97
Last Updated: 17NOV98
County: MARICOPA
Status: REVOKED-MAINTAIN STATUTORY AGENT
Status Date: 11/01/2000
Statutory Agent Status: 14MAY99
Character of Business: Consultants
Stock: 200,000 shares

Robert Palm (President, CEO, Treasurer) [1992]
SELECT FINANCIAL CORP.
8777 N. Gainey Center Drive - #255
Scottsdale, Arizona 85258
USA
TEL: (602) 998-8878

Residence:

Robert Palm
6215 E. Horseshoe Road
Paradise Valley, Arizona 85253
USA

Foreign Address:

675 Fairview Drive - #246
Carson City, Nevada 89701
USA

- - - -

Robert Poirier (Secretary)
8777 N. Gainey Center Drive - #255
Scottsdale, Arizona 85258
USA

Date Assigned: 06/20/1997 Last Updated: 11/17/1998

- - - -

Microfilm

# of Docs Location Date Description

1 1136-001-015 20JUN97 APPLICATION FOR AUTHORITY
2 0211-051-021 11AUG97 PUB OF APPL FOR AUTHORITY
3 1774-003-374 15MAY98 98 ANNUAL REPORT
3 1505-001-116 15SEP98 98 ANNUAL REPORT
2 0242-014-011 14MAY99 AGENT RESIGNATION
1 1354-026-044 04OCT99 REVOCATION/MAIL RETURNED
1 1397-012-006 11APR00 00 ANNUAL REPORT/MAIL RETURNED
2 0264-035-019 01NOV00 CERTIFICATE OF REVOCATION

====

[NOTE: The article (below) was taken from a news article in THE PROVINCE (British Columbia, Canada) dated January 19, 2003 that was later translated into another language, which provides several English-language names (below).]

IYP.ORG

Date: 01-20-03 18:39
Time: 18:39
Autor: W.Glowacki (---.vc.shawcable.net) [Vancouver, British Columbia, Canada]

Tylko kiedy beda pieniadze?

W piatek 17 stycznia 2003, Najwyzszy Sad Prowincji British Columbia w Wiktorii, Kanada, decyzja sedziego SN Allena Melvina, uznal w calosci zadania polskiej spoldzielni rolniczej Hod Impex, wzgledem Advance Capital Services Corp. i jej wlascicielowi Robertowi Palmowi. Suma odszkodowania wynosi US 37 milionow dolarow, chociaz polskiej spolce przysluguje wiecej niz 50 milionow.

Orzeczenie zamyka ponad dziesioletnia sprawe, wytoczona w 1993 przez HOD IMPEX, tyczaca oszustwa jakiego dopuscil sie Palm i jego firma, wzgledem polskiej spolki. Ze wzgledu jednak na fakt, ze Jason Dallas, jego wspolpracownik, rownoczesnie wspolwlasciciel firmy odsiadywal wyrok w Polsce, wyrok zostal orzeczony tylko w stosunku do Roberta Palma, z tytulu odpowiedzialnosci cywilnej za popelnione oszustwa.

W 1991 roku, Robert Palm- jako duchowny pentakostalny , wystepujacy w imieniu "grupy chrzescijanskich biznesmenow" i Jason Dallas, wystapili do Hod Impex z oferta eksportowa do Rosji polskich produktow rolnych w ramach akcji humanitarnej, na ogolna sume US 300 milionow. Na pokrycie swojej oferty zakupu, Palm przedlozyl dokumenty bankowe z United National Republican Bank, wykazujace pokrycie bankowe w wysokosci US 1.88 miliardow dolarow. Na sam poczatek, Hod Impex wyeksportowal produktow rolnych za sume 37 milionow, co mialo byc poczatkiem umowy. Przez kolejne dwa lata, spolka nie otrzymala ani centa zaplaty za dokonany eksport. W 1993 roku, oddano sprawe do sadu.

Jak wykazaly pozniejsze dochodzenia, wspomniany bank istnial tylko na papierze, zas jego szefem byl sam Palm. Okazalo sie nadto, ze zaledwie po roku istnienia banku, nie mozna bylo znalezc ani grosza, zas Palm nie potrafil wiarygodnie udowodnic znikniecia wkladow. Nadto bank nie posiadal zadnej licencji uprawniajacej do jego dzialanosci.

Sedzia w slownym uzasadnieniu wyroku, kilkakrotnie podkreslil "sliskosc, kretactwo, klamstwo, wszystko wystepujace na porzadku dziennym u Roberta Palma....Sluchanie wywodow lub tlumaczen Palma, oraz branie ich za dobra monete, bylo niczym innym, jak proba z jego strony ponizenia czyjejs inteligencji. Robilo sie niedobrze"- zakonczyl sedzia.

Jerzy Winski, prawnik Hod Impex, nie jest jednak az tak zadowolonym z orzeczenia. "Przede wszystkim nie jest wiadomym dokladnie, gdzie jest w tej chwili Palm, jego telefon nie znajduje sie na liscie abonentow Victorii, nie wiadomo tez, czy Palm jest wyplacalna osoba"--konczy polski prawnik. [The Province, 19/01/2003]

(W. Glowacki,Prawy.pl)

- - - -

Reference(s), at:

IYP.ORG

http://www.iyp.org/forum/read.php?f=1&i=4847&t=4847

[NOTE: Should the aforementioned article no longer be available on the internet, go to: [ http://www.archive.org ] and enter the URL (above) to search for the 'approximate date' and URL provided for that article to read it from historical archives if available.]

====

BRITISH COLUMBIA SECURITIES COMMISSION (Canada)

INDEX OF DECISIONS

Date Decision Issued:

February 14, 1992

In The Matter Of:

- ROBERT PALM
- DAVID LYON (ASHTON & LYON – Vancouver Law Firm)
- JASON DALLAS
- MICHAEL DOHERTY
- ADVANCE CAPITAL SERVICES CORPORATION
- GREENWELL RESOURCES CORPORATION
- SUPREME RESOURCES INC.

Date Of Weekly Summary: 02/21/92
Edition Of Weekly Summary: 92:08

GREENWELL RESOURCES CORPORATION [Decision]

The meeting took place during the afternoon of August 25 at the Exchange and was attended by ROBERT PALM of ADVANCE, Alec Lenec, Baker and Irving from GREENWELL and David Anfield of Sobolewski Anfield.

[ http://www.bcsc.bc.ca/historycomdoc.nsf/allbyunid/1c9094dab99e63a2882560a0006ebe61?opendocument ]

[ http://www.bcsc.bc.ca/comdoc.nsf/allbyunid/78dbdbb4c4efc80388256f39006b51ee?opendocument ]

[ http://www.bcsc.bc.ca/historycomdoc.nsf/allbyunid/1c9949d63d217680882561cd00551d71?opendocument ]

- - - -

SUPREME RESOURCES INC.

Registrant Information

Name: Supreme Resources Inc
File Number: X012802
PartyID: 73157
Corporate Name:

Addresses

Business Address:
Branch Address:
Service Address:
Business Phone:

Registration Details

Registration Type: SI: Security Issuer
Registration Status: Historic
Approved Date: 03/09/1984
Effective Date: 03/09/1984
Terminated Date: 01/11/1985
Suspension Start Date:
Suspension End Date:
Expiry Date will be December 31 of the current year, unless specified in restrictions and conditions.

Restrictions and Conditions

Restriction: The following only are authorized to engage in the primary distribution to the public of securities of the companys own issue under this registration (Sec 20(1) SECURITIES ACT)
Restriction: Subject to the conditions attached to and forming part of this certificate

[ http://www.bcsc.bc.ca/BCSCDB/registration/regpublic/Ptrans.asp?pid=73157&did=307189 ]

- - - -

[NOTE: The official information (below) has been ‘removed’ from the official Canadian government website.]

Policy Documents
News Releases

Document No.: 92/02
Subject: Securities Commission Releases GREENWELL / SUPREME [Decision]
Amendments:
Published Date: 02/21/1992
Effective Date:
Released: February 14, 1992
Contact: Ron Messent
660-4800

The British Columbia Securities Commission today released a decision on several applications regarding investigations into trading in the shares of GREENWELL RESOURCES CORPORATION and SUPREME RESOURCES INC.

Temporary cease trade orders were issued against the shares of GREENWELL and SUPREME in 1987. Those orders were extended and remain outstanding.

In July 1990, a member of the Commission ordered an investigation into the affairs of Greenwell, Supreme and others, based on allegations that certain ‘persons had traded shares’ of GREENWELL and SUPREME ‘in the United States subsequent to the cease trade orders’.

Four of those under investigation, ROBERT PALM, ADVANCE CAPITAL SERVICES CORPORATION, JASON DALLAS, and MICHAEL DOHERTY, applied to have the investigation order revoked. They argued that the cease trade orders were invalid, the investigation order had not been properly issued and the investigation was beyond the Commission's jurisdiction.

The Commission dismissed these applications.

In October 1990, a member of the Commission ordered an ‘investigation into the affairs’ of GREENWELL and DAVID LYON, who was ‘alleged to have traded shares’ of GREENWELL ‘subsequent to the cease trade order’.

LYON requested a hearing and review, and asked that the investigation order be revoked, making similar arguments to those by the other applicants. He argued in the alternative that the investigation order was too broad and vague.

The Commission decided to vary the ‘October 1990 investigation’ order to provide a more appropriate specification of the ‘scope of the investigation’.

Copies of the Commission's decision (18 pages) may be obtained in person at 1100 - 865 Hornby Street, Vancouver, British Columbia.

[ http://www.bcsc.bc.ca:8080/comdoc.nsf/0/9ffb7949fab99744882563010062e0f8?OpenDocument&Click= ]

[NOTE: The official information (above) has been ‘removed’ from the official Canadian government website.]

- - - -

Policy Documents
Notices and Interpretation Notes - History

Document No.: 93/03
Subject: Decisions of the British Columbia Securities Commission
Amendments:
Published Date: 01/08/1993
Effective Date: 01/07/1993
Repealed Date: 05/11/1995
Repealed Reason: Lapsed

This notice is accompanied by a list of the decisions of the British Columbia Securities Commission for the years 1987, 1988, 1989, 1990, 1991 and 1992.

The list, which is intended as a reference guide, provides the dates and decisions were issued, the names of the respondents or applicants, and the dates and edition number of the Weekly Summary in which the decisions were published.

DATED at Vancouver, British Columbia, on January 7, 1993.

Douglas M. Hyndman
Chairman

INDEX OF DECISIONS OF THE BRITISH COLUMBIA SECURITIES COMMISSION

January 8, 1993

Date Date of Edition
Decision Weekly of
Issued Summary Weekly
(mm/dd/yy) In the Matter of: (mm/dd/yy) Summary

. . .

02/14/92 ROBERT PALM, DAVID LYON, JASON DALLAS, MICHAEL DOHERTYGREENWELL RESOURCES CORPORATION, and SUPREME RESOURCES INC.

02/21/92 ROBERT PALM, DAVID LYON, JASON DALLAS, MICHAEL DOHERTYGREENWELL RESOURCES CORPORATION, and SUPREME RESOURCES INC. 92:08, (Page 5)

. . . .

[ http://www.bcsc.bc.ca:8080/historycomdoc.nsf/Historycomdoc.nsf/webpolicies/1C9094DAB99E63A2882560A00... ]

- - - -

[NOTE: The following information (website link provided immediately below) has been ‘erased’ by the British Columbia Securities Commission website. Hence, the reason for only providing a ‘portion’ (below) of its eighteen (18) pages, which is now only obtainable in-full if requested ‘in-person’ (see note further below).]

British Columbia Securities Commission

Chapter 2 - Hearing Decisions
Weekly Summary, Edition 89:125

Indexed as: Greenwell Resources Corp. (Re)

IN THE MATTER OF the Securities Act, S.B.C. 1985, c. 83

AND IN THE MATTER OF Greenwell Resources Corporation
AND IN THE MATTER OF Harold Dale Baker and Thomas Rodney Irving

Decision and Reasons
D.M. Hyndman, E.L. Lien, J.P.H. McCall

Heard: November 22, 1988
Decision: June 19, 1989

COUNSEL:

Boris W. Tyzuk, for the Superintendent of Brokers.
Kenneth W. Ball, for Harold Dale Baker.
Douglas R. Garrod, for Thomas Rodney Irving.

DECISION AND REASONS:-- The matters that were the subject of this hearing were first set out in a Notice of Hearing dated July 29, 1988. In this notice the Superintendent of Brokers sought an order under section 145 of the Securities Act (the "Act") to remove the trading exemptions of Harold Dale Baker ("Baker"), the corporate secretary of Greenwell Resources Corporation ("Greenwell"), and Thomas Rodney Irving ("Irving"), a director of Greenwell. The Commission was asked to determine whether, in connection with purchases of Greenwell's shares, Baker and Irving had breached section 68(1) of the Act, which prohibits a person in a special relationship with a reporting issuer from purchasing or selling securities of the issuer with knowledge of a material fact or material change in its affairs that he knows or ought reasonably to know has not been generally disclosed.

In an Amended Notice of Hearing dated October 26, 1988, the Commission was asked to consider whether a sale of Greenwell shares by Baker was also in breach of section 68(1). The Superintendent also sought additional orders in the Amended Notice, firstly, that Baker and Irving be prohibited from acting as directors or officers of an issuer under section 145.1 of the Act and, secondly, that they pay the costs of the hearing under section 154.2 of the Act. Sections 145.1 and 154.2 were added to the Act by an amendment which came into force in August 1988.

BACKGROUND

Greenwell was a reporting issuer listed on the Vancouver Stock Exchange ("the Exchange") throughout the period when the critical events took place between October 1986 and August 1987. Greenwell had completed a public financing in September 1986 to raise $194,000, of which $75,000 was spent on a Nevada gold property. Greenwell had three employees at that time.

On October 1, 1986 Greenwell issued a news release stating that a letter of intent had been signed for the acquisition of $100 million of assets in exchange for the issuance of convertible preferred shares (the "Acquisition"), subject to shareholder and regulatory approval. Further news releases confirming the Acquisition were issued on November 17, 1986 and February 12, 1987. These were followed up with a President's Message to Shareholders, dated March 2, 1987, issued in connection with Greenwell's annual meeting. This document provided no more detailed information about the Acquisition than the previous releases, other than to describe the assets as U.S. real estate.

Michael Gilley ("Gilley"), a listings officer at the Exchange, testified that on April 21, 1987 he advised Greenwell verbally that it was in breach of its listing agreement because it had failed to provide a Reverse Takeover Information Statement and back-up documentation in the required 30 days from the date of the letter of intent. This advice was confirmed in a letter from the Exchange dated May 12. Greenwell provided the required documentation to the Exchange on June 12.

The Acquisition contemplated the purchase of U.S. real estate assets, including a large ranch in Texas. Gilley reviewed the proposed transaction and was concerned about the value shown for the ranch. With Greenwell's agreement, the Exchange retained a consultant to review the appraisal reports. A report was received from the consultant on July 27,

In a letter dated July 28 Gilley posed to Greenwell a number of questions regarding the deficiencies he had identified in the Acquisition disclosure documents. Specifically he was concerned because the ranch had been appraised at a value which appeared to be excessive, it was not owned by Advance Capital ("Advance"), the proposed vendor, and it was encumbered with debt approximately equivalent to the appraised value.

Following further communications between Gilley and counsel for Greenwell, Gilley presented the Acquisition to the Exchange's Listings Committee on August 19. In a letter dated August 20 to Sobolewski Anfield, counsel for Greenwell, Don Gordon ("Gordon"), Manager of Policy and Planning for the Exchange, conveyed the Listings Committee's unanimous decision that the submission "be withdrawn from further review as the extent of the deficiencies that remain unresolved is so grave that it is impractical for further detailed comments to be issued by the Vancouver Stock Exchange." It was the Committee's opinion that Greenwell had failed to provide "full true and plain disclosure" of the Acquisition. Greenwell was instructed in the August 20 letter to immediately submit a news release disclosing that the Exchange had withdrawn the Acquisition and setting out Greenwell's plans to either proceed with or withdraw from the Acquisition. This decision is described as "the Initial VSE Position".

Gordon testified that it was the practice of Exchange personnel to phone when letters such as the August 20 letter were available for pick-up. He stated that Sobolewski - Anfield had offices two floors above the Exchange and had two pick-ups each day.

The price of Greenwell's common shares had remained close to $0.30 prior to March 1987. In March, when the annual meeting was held, there was a significant increase in volume and the price rose as high as $2.25. After increasing to $2.60 in May, it declined to $1.11 in June. However, by early August it had increased again to $2.80, dropping back to $2.40 when the Listings Committee held its meeting on August 19.

On August 21, by way of tickets time-stamped between 6:53 a.m. and 9:14 a.m., Baker sold 4,500 shares of Greenwell through his account at Levesque Beaubien Inc. at a price of $2.20 in four trades. According to Baker's August insider report filed with the Commission and dated September 15, these were the first shares he had sold since August 12 and were the last of some 7,500 shares he had owned at the end of July.

After the August 20 letter was issued, officers of Greenwell and Advance did not submit or issue the news release requested by the Exchange but instead contacted the Exchange to register their objection to the Initial VSE Position. As a result Gordon, who was then acting in the temporary capacity of Vice President, Listings, agreed to meet with Greenwell representatives to hear new information that he was told had become available.

* * *

The meeting took place during the afternoon of August 25 at the Exchange and was attended by Robert Palm of Advance, Alec Lenec, Baker and Irving from Greenwell and David Anfield of Sobolewski Anfield. Gordon was the only executive officer attending for the Exchange and was accompanied by a secretary to record the proceedings. At the meeting major problems were reviewed but no new information was presented, according to Gordon, who said a tense atmosphere developed and the Greenwell representatives threatened to delist Greenwell from the Exchange. Gordon then suggested an alternate approach which, if adopted, would permit the Exchange to give its approval. He suggested converting the deficiencies identified by the Exchange into risk factors to be included in the disclosure documents. This approach would have had the effect of reversing the decision of the Listings Committee but required the approval of the President of the Exchange. Gordon testified that he had said he would recommend this approach. The immediate response from those present, according to Gordon, was "an audible sigh of relief" and a reduction in tension. The effect of the August 25 meeting was to keep the file open and to breathe new life into the Acquisition. Gordon's alternate approach is described as "the Revised VSE Position."

* * *

On August 24 and 25, Greenwell's shares traded at prices between $2.21 and $2.50, closing at $2.30 on August 25. On August 26 the shares traded as high as $3.05 before trading was halted at 8:13 a.m. The last trade was at $2.95, an increase of $0.65 on the day, and 93,400 shares were traded during the short period before the stock was halted. This halt remained in effect until September 8.

One third of the trading on August 26 was accounted for by Baker and Irving. Levesque Beaubien Inc. entered a market buy order for Baker's account for 10,000 Greenwell shares at 6:25 a.m. The order was filled at prices between $2.40 and $2.60. At 6:58 a.m. West Coast Securities Ltd. entered a market buy order for Irving's account for 20,000 Greenwell shares. It was filled at prices ranging from $2.60 to $2.90. Baker reported the purchase of the 10,000 shares in his August insider report. Irving did not include his purchase of 20,000 shares in his August insider report filed September 23, nor in the September report filed on October 28, nor the October report filed on November 16.

Gordon documented the Revised VSE Position in a letter dated August 27 to Sobolewski Anfield. Greenwell subsequently prepared a draft news release dated August 31, which incorporated the elements of the Revised VSE Position. This draft news release was never issued.

When Gordon consulted the President of the Exchange about the Greenwell matter, the President advised him that he was not prepared to accept Gordon's recommendation and that the decision of the Listings Committee should stand. On September 8, 1987 Greenwell issued a news release stating that it had made application to have its shares voluntarily delisted from the Exchange and that it intended to proceed with the Acquisition. Greenwell also said that it was making application to list its shares on the Alberta Stock Exchange.

Trading in Greenwell's shares resumed at the market open on September 8, following the issue of the news release. During the four days of trading which remained in the week, trading volume was higher than it had been since the week ending July 31, 1987 and the closing price was $2.43, a decline of $0.52 from the pre-halt price. The price declined further over the following two weeks and closed at $1.85 on September 25.

DECISION

We have been asked to determine whether Baker and Irving have breached section 68(1) of the Act, which reads in part as follows:

"68(1) No person in a special relationship with a reporting issuer shall


(a) purchase or sell securities of the reporting issuer with knowledge of a material fact or material change in the affairs of the reporting issuer that he knows or ought reasonably to know has not been generally disclosed ..."


We must first determine whether Baker and Irving were in a special relationship with Greenwell.

Section 3(1) of the Act states:

"a person is in a special relationship with a reporting issuer where he ...


(b) is a director, officer or employee of


(i) the reporting issuer ..."

We find that Baker and Irving were in a special relationship with Greenwell, Baker as corporate secretary and Irving as a director.

We will next consider whether the Initial VSE Position was a material fact or material change and, if so, whether Baker contravened section 68(1) when he sold Greenwell securities on August 21. Material change and material fact are defined in section 1 of the Act as follows:

"material change" means, where used in relation to the affairs of an issuer, a change in the business, operations, assets or ownership of the issuer that would reasonably be expected to have a significant effect on the market price or value of any of the securities of the issuer and includes a decision to implement that change made by


(a) senior management of the issuer who believe that confirmation of the decision by the directors is probable, or

(b) the directors of the issuer;


"material fact" means, where used in relation to securities issued or proposed to be issued, a fact that significantly affects, or could be reasonably expected to significantly affect, the market price or value of those securities;


Mr. Tyzuk, counsel for the Superintendent, argued that the Initial VSE Position was a material change. Greenwell's listing agreement with the Exchange requires, in paragraph 6:

"That the Company shall give to the Exchange prompt notice of each proposed material change in the general character or nature or organization of its business, property or affairs, and, without limiting the generality of the foregoing, this shall include:



...


(c) every proposed acquisition or disposition (by one transaction or a series of transactions) of real or personal property at (i) a cost or for a price exceeding $50,000 where the cost or price requires payment in shares ...


The Company shall not proceed with any of the foregoing transactions without the prior acceptance of the Exchange."

The Acquisition certainly required Greenwell to give notice to the Exchange and it did so. Mr. Tyzuk submitted that the Exchange's acceptance or rejection of the Acquisition would affect the assets, operations, business or perhaps the ownership of the issuer and would reasonably be expected to have a significant effect on the market price of Greenwell's shares.

Mr. Tyzuk further submitted that the price of Greenwell's shares, since it began climbing from $0.30 in February to the $2.20 level prevailing in August, had become primarily a function of investor expectations of Greenwell's prospects after the Exchange's approval of the Acquisition. He argued that a rejection of the Acquisition would reasonably be expected to have a significant effect on price.

Mr. Garrod, counsel for Irving, argued that the Initial VSE Position was neither an acceptance nor a rejection of the Acquisition, since the Exchange simply requested Greenwell to withdraw its submission, nor was it a withdrawal on the part of the Exchange. We disagree, and find the meaning of the Exchange's letter of August 20 to be quite clear: "...it was unanimously decided... that the Company's submission be withdrawn from further review..." Although the wording does not accord with that used in Greenwell's listing agreement, which requires that Greenwell shall not proceed with a transaction of this type without the prior acceptance of the Exchange, the Initial VSE Position was clearly a decision not to accept the Acquisition.

Mr. Garrod further argued that the Initial VSE Position was not a material change since it did not result in the issuance of an Exchange notice nor did the Exchange halt trading in Greenwell's shares. No evidence was placed before us that an event such as the Exchange's decision to withdraw the Acquisition from review requires a notice to members. The Exchange's position on halting trading is set out in Greenwell's listing agreement in paragraph 12, which states that at any time and without notice the Exchange may suspend or halt trading in Greenwell's shares. It is evident that the Exchange chose not to exercise its discretion in this case and instead elected to order Greenwell to issue a news release. We do not consider the fact that the Exchange did not issue a notice or halt trading relevant to whether the Initial VSE Position was a material change in the affairs of Greenwell.

The Initial VSE Position was a decision of the Exchange to deny the required regulatory approval for a proposed transaction that was the major business interest of Greenwell. There can be no doubt that the Initial VSE position was a change in the business, operations and assets of Greenwell that would reasonably have been expected to have a significant effect on the market price of Greenwell's securities. We therefore find that the Initial VSE Position was a material change in the affairs of Greenwell.

The Initial VSE Position was communicated to Greenwell's solicitors, Sobolewski Anfield, by a letter dated August 20. By normal practice, the Exchange telephones to advise that such letters are available for pick up by the solicitors. Sobolewski Anfield has offices in the Exchange Tower and normally makes two pick-ups per day. On the morning of August 21, Baker sold all of his remaining shares of Greenwell.

Based on this evidence, we find, on a balance of probabilities that Sobolewski Anfield received the August 20 letter on August 20, that Baker learned of the Initial VSE Position from Sobolewski Anfield on August 20 and that Baker knew, or ought reasonably to have known, that the Initial VSE Position had not been generally disclosed.

We therefore find that, in selling Greenwell shares on the morning of August 21, while he was in a special relationship with Greenwell, Baker breached section 68(1).

Next, we will consider whether Baker and Irving breached section 68(1) when they purchased Greenwell shares on August 26.

The Revised VSE Position was developed by Gordon during the August 25 meeting to provide an alternative approach for dealing with the concerns raised by the Listings Committee. Unlike the Initial VSE Position it was not a decision of the Exchange. To become a decision, it would require the approval of the President of the Exchange.

The importance and potential impact of the Revised VSE Position is clear. Had it been subsequently approved as an Exchange decision it would have allowed Greenwell to proceed with the Acquisition, its major business interest, and would undoubtedly have had a significant effect on the price or value of Greenwell's shares. It is also important to note that Gordon's intention to recommend the Revised VSE Position to the appropriate levels of authority at the Exchange was perceived very positively by those attending the August 25 meeting. We have Gordon's evidence that there was a relaxation of the tension that had been present when the meeting began and a general air of relief. It was evident that the company representatives, Baker and Irving among them, perceived it to be a reversal of their misfortune or, as Gordon put it, as breathing new life into the Acquisition. That the Greenwell representatives saw it as a credible proposal is further evidenced by the draft news release which they proceeded to prepare. This was dated August 31 and contained full disclosure of the matters which Gordon had proposed should be dealt with as risk factors.

Gordon's decision to recommend the Revised VSE Position is critical to our determination. Even though the Revised VSE Position could not be implemented without further approval, the fact that it would be recommended by Gordon, a senior official of the Exchange, would undoubtedly be perceived by the market as a positive development in the attempt to get approval for the Acquisition. It was therefore a fact that could reasonably be expected to significantly affect the market price or value of Greenwell's shares. Accordingly, we find that Gordon's decision to recommend the Revised VSE Position, was a material fact in the affairs of Greenwell.

That Baker and Irving had knowledge of Gordon's decision there can be no doubt. They were in the room and it was the focus of the meeting. Nor can there be any doubt that they knew it had not been generally disclosed when they purchased Greenwell shares during the first hour of trading the very next day.

We therefore find that Baker and Irving, while in a special relationship with Greenwell, purchased its securities with knowledge of a material fact in the affairs of Greenwell which they knew had not been generally disclosed. As a result they breached section 68(1) on August 26.

The Superintendent of Brokers has requested that the Commission issue an order under section 145 of the Act to remove the trading exemptions of Baker and Irving for a period of between two and five years. The Superintendent has also requested that Baker and Irving be removed as officers and directors of all issuers and be prohibited from so acting for a similar period by way of an order under section 145.1 of the Act. In addition the Superintendent sought an order for costs under section 154.2 of the Act.

Counsel for the respondents argued against the imposition of orders under section 145.1 and 154.2 on the ground that the sections came into force after the events that were the subject of the hearing and after the original notice of hearing and, therefore, that the requested orders would be retrospective in effect. The Commission has previously addressed this question in a decision in the matter of Marathon Minerals et al. (British Columbia Securities Commission, Weekly Summary, March 17, 1989, pages 24 to 26). The panel in that hearing decided in similar circumstances to impose orders under section 145.1 on the basis that the purpose of such orders is to protect the public interest, not to penalize past actions. The panel did not impose orders under section 154.2, because it determined that such orders would be unfair in view of the fact that the hearing began before the enactment and coming into force of the new section. There is no such concern in this case, as the hearing began after the amendments came into force and the amended notice of hearing stated that orders would be sought under sections 145.1 and 154.2.

Section 68(1) is one of the key provisions of the Act. It is intended to make the market operate more fairly by prohibiting trading in securities by certain persons having possession of certain information that has not been disclosed to the public. We have found that there were two breaches of section 68(1) by Baker and one by Irving. Although their trading did not involve large sums of money, the violation of this fundamental prohibition requires that the Commission make appropriate orders to protect the public interest in a fair trading market. These orders should serve as a clear message to other participants in the marketplace about the activities the legislation is intended to prevent.

We order, under section 145(1), that the exemptions described in sections 30 to 32, 55, 58, 81 and 82 of the Act do not apply for a period of two years from the date of this decision to Baker or Irving, provided that, for a period of 30 days from the date of this order, Baker or Irving may trade, through a registered dealer, securities that they hold at the date of this order, for the sole purpose of liquidating their holdings, and all such trades shall be reported to the Secretary of the Commission.

We order, under section 145.1(1), that Baker and Irving resign any positions that they hold as directors and officers of reporting issuers and that they are prohibited from becoming or acting as directors or officers of any reporting issuers for a period of two years from the date of this decision.

We order, under section 154.2, that Baker and Irving pay prescribed fees or charges for the costs of or related to the hearing, the amounts to be determined following further submissions by the parties to be made within thirty days of the date of this decision.

D.M. HYNDMAN, Chairman
E.L. LIEN, Member
J.P.H. McCALL, Member

[ http://www.bcsc.bc.ca/comdoc.nsf/allbyunid/78dbdbb4c4efc80388256f39006b51ee?opendocument ]

[ http://www.bcsc.bc.ca/Enforcement/eol/greenwellres.htm ]

[NOTE: The website link (provided immediately above) has been ‘erased’ by the British Columbia Securities Commission website. Hence, the reason for providing a portion of its eighteen (18) pages, which is only obtainable in-full, if requested ‘in-person’ (as stated below).]

- - - -

Reference(s), at:

BRITISH COLUMBIA SECURITIES COMMISSION (Canada)

[NOTE: Refer to the official Canadian government British Columbia Securities Commission individual website URL references (above), but realize that at least one (1) of the official referenced URLs containing the information (above) was 'removed from the internet' and subsequently placed into Canadian government British Columbia Securities Commission 'archives'. Should any of the aforementioned referenced official Canadian government information references no longer be available on the internet, try the website named ARCHIVE.ORG [ http://www.archive.org ] by entering the URL (with the missing official government information) and search the 'approximate date' the URL provided that official information, and read it if available from historical 'internet archives', or obtain missing official information in-person from the 'Canadian government British Columbia Securities Commission archived records'.]

====

Submitted by,

Offshore Informant

[E-MAIL: OffshoreInformant@safe-mail.net]

/

/

FED - International Financial Progressions - Part 2
by, Offshore Informant [OffshoreInformant@safe-mail.net]

October 1, 2005

A few revelations came to me, which may be newsworthy. You're the 'experts' so, you tell me.

While international financial revolutions and counter-revolutions haven't reached epic proportions on a global scale between banks and people since 1929 when the U.S. stock market collapsed and the Great Depression set in, I think it's time for a 'heads-up' on what could be all our new horizons.

I'll let you be the judge, after reading my current research . . .

1928 and 1929 saw U.S. Army Colonel Edward C. Harwood (1900-1980) publish articles in professional journals admonishing others that the 'speculative boom' at the 'stock and commodity exchanges' was primarily caused by 'excessive money supply expansion', asserting that the failure to stop that inflationary process would entail an all-out bankruptcy. And sure enough, in 1929 the U.S. witnessed its stock exchange crash followed by the Great Depression.

Harwood fought against the printing of 'paper money', seeing it as an 'excessive money supply expansion technique' to finance 'U.S. public debt' that was steadily increasing, which was a U.S. policy he interpreted as a 'fraud committed to the detriment of the citizen' whose savings were 'annihilated by inflation'.

Harwood viewed 'gold' and a 'currency linked to gold standards' as a 'guarantee' whereby a 'stability-oriented monetary policy' could act as a 'safeguard against U.S. government excessive financing demands'.

World developments between the 1920s and 1930s convinced Harwood that U.S. 'existing knowledge' of 'economic interrelations' was 'insufficient' with respect to 'methods used by applied research'. So, he increasingly focused on 'improving the scientific methodology of research'.

As the World watched Adolph Hitler rise to power in Germany, in 1933 from inside an office at the Massachusetts Institute of Technology (MIT) in Cambridge, Massachusetts a 'unique' organization was conceived to 'enhance by scientific technical means', the flow of U.S. 'economic information'.

Dr. Vannevar Bush (MIT vice-president) encouraged U.S. Army Colonel Edward C. Harwood (1900-1980) in 1933 to establish a 'scientific technical economic prediction organization, which became known as the AMERICAN INSTITUTE FOR ECONOMIC RESEARCH (AIER).

AMERICAN INSTITUTE FOR ECONOMIC RESEARCH (1933)
AMERICAN INVESTMENT SERVICES INC. (1978)
P.O. Box 1000
Great Barrington, Massachusetts 01230
USA
TEL: (413) 528-1216
FAX: (413) 528-0103
E-MAIL: info@aier.org
E-MAIL: aisinfo@americaninvestment.com
WWW: http://www.aier.org
WWW: http://www.americaninvestment.com

Just before the end of World War II, Harwood took AIER to Berkshire County, Massachusetts at the same time the Office of Strategic Services (OSS) was formally ordered by the U.S. President to split-up its secret Economic Collections Unit (ECONIC), which had been designed to collect information and seize funds from banks around the world where the U.S. saw its enemy [Germany's wealthiest war support families] hiding their wealth 'before' an end to war.

Only a 'portion' of ECONIC was merged into the successor organization of the OSS named the Central Intelligence Group (CIG), which later became known as the Central Intelligence Agency (CIA), while other portions went to the U.S. Treasury Department, State Department, Department of War (Department of Defense), but 'where' the rest of ECONIC went was never publicly revealed.

In 1962, the secret center of AIER was in a 10,000 square-foot scientific technical economic research center known to insiders as "The Annex", which now today is known as the E. C. HARWOOD LIBRARY and principal offices of AIER.

Near the conclusion of the Viet Nam War, Colonel Harwood had left the U.S., taking-up residency in Lugano [canton of Ticino], Switzerland to see another 'information collection and analysis organization' known as the PROGRESS FOUNDATION begun.

The PROGRESS FOUNDATION location remains hidden, as AIER once was, and is sheltered by its Trustee in Zurich, Switzerland today.

PROGRESS FOUNDATION (1973)
c/o HONOLD TREUHAND AG
Claridenstrasse 25
CH-8002 Zürich
SWITZERLAND
TEL: 01 - 289 25 30
TEL/FAX: 01 - 289 25 50
E-MAIL: progress@treuco.ch
WWW E-MAIL: czlovek@post.cz
WWW: http://www.progressfoundation.ch/english/index.htm

Mailing:

Postfach 562
CH-8027 Zürich
SWITZERLAND

Directors, are:

- Dr. Marcel Studer, President
- Dr. Gerhard Schwarz, Vice-President
- John D. Aldock (Bethesda, Maryland, USA)
- Dr. Konrad Hummler
- Sidney Rose (Marblehead USA)

PROGRESS FOUNDATION appears shrouded in "furthering scientific research", but does not reveal 'what' area of "research" its "aims" are toward, except for the following quote:

"Progress Foundation aims at furthering scientific research in the area of civilization's development with the specific objective to identify the pertinent favorable and alternatively the restraining factors as well as to make available to the public at large the knowledge and insights thus gained."

Providing no clear definition of what area of research it's interests lie, but pursuing it nevertheless, PROGRESS FOUNDATION claims it may "hold seminars and congresses", "issue publications", "resort to the cooperation of expert scientists and support them".

PROGRESS FOUNDATION goes on record as being "fully independent in political, economic and ideological respect", however it links itself to a 'think-tank' for international "market economics", "politics", and "philosophies", named:

LIBERALES INSTITUT (1979)
Vogelsangstrasse 52
CH-8006 Zurich
SWITZERLAND
TEL: + 41 (0) 1 364 16 66
WWW: http://eng.libinst.ch/
WWW: http://www.libinst.ch/

FOUNDATION BOARD

Chairman: Ulrich Pfister - lic. phil., Publicist

Martin Lendi - Professor Emeritus of Law, Fed. Inst. of Technology Zurich

Jörg Baumberger - Professor of Economics, University of St. Gallen

Daniel Thürer - Professor of Constitutional Law, University of Zurich

Walter Frey - Businessman

Toni Cipolat - Businessman

Eric Honegger - Dr. philosophy, Former Regional Parliament Member

Peter Forstmoser - Professor of Commercial Law, University of Zurich, Lawyer

Rudolf Wehrli - Dr. theology, Dr. phil., CEO Gurit-Heberlein

Max Fritz - Management Consultant

Beat Badertscher - Dr. iur., Attorney

Georg Kohler - Professor of Philosophy, University of Zurich

Martin Meyer - Dr. phil., Features Editor, NZZ newspaper

Peter Ruch - Reverend

Gerhard Schwarz - Dr. oec., Economics Editor, NZZ newspaper

Suzette Sandoz - Professor of Private Law, University of Lausanne

Ulrich Siegrist - Dr. iur., National Councillor

Roland Söllner - Dr. med. dent., Dentist

Christian Steinmann - Dr. iur., Lawyer

Thomas Wagner - Dr. iur., Dr. med., Former Zurich City Councillor

BANK INFORMATION

BANK VONTOBEL
Zürich
SWITZERLAND

Bankleitzahl: 8757
Kontonummer: LIBERAL IN

Liberales Institut

PC-Account: 80-36338-2

After the LIBERALES INSTITUT chairman's name and background in its Foundation Board, the next eight (8) members (above) appear in-keeping with AIER founder U.S. Army Colonel Edward C. Harwood, et al. strategic international monetary system philosophies.

AND,

SCHWEIZER MONATSHEFTE
Vogelsangstrasse 52
CH-8006 Zürich
SWITZERLAND
TEL: + 41 (0) 44 361 26 06
TEL/FAX: + 41 (0) 44 363 70 05
E-MAIL: info@schweizermonatshefte.ch
WWW: http://www.schweizermonatshefte.ch

Interestingly, SCHWEIZER MONATSHEFTE and LIBERALES INSTITUT share the same office address.

Moving right along now . . .

AIER director Walker Fowler Todd holds a significant background, from the U.S. FEDERAL RESERVE BANK in New York and Ohio (USA), known best for his past 'legal counsel' and 'research' positions at both.

Walker Fowler Todd (Attorney At Law)
1164 Sheerbrook Drive
Chagrin Falls, Ohio 44022
USA
TEL: (216) 338-1169
FAX: (216) 338-1537
E-MAIL: westodd@en.com

AND,

TRUTH IN MONEY INC.
P.O. Box 30
Chagrin Falls, Ohio 44022
USA

J.D. degree from Boston University School of Law (USA) in 1974
B.A. degree from Vanderbilt University (USA)
M.A. degree University of Wisconsin-Madison (USA) in French language.
Ph.D. degree from Columbia University (USA) in French language

1974-1985, began as an attorney in the Legal Department of the FEDERAL RESERVE BANK in New York where in 1980 he became Assistant Counsel. While there, in 1981, he became one of the members of the U.S. government negotiating team, which obtained the release of 52 U.S. hostages from Iran, and established a plan for an 'international tribunal' at the Hague, Netherlands for the adjudication of claims against Iran. He finally left the FEDERAL RESERVE BANK in New York in 1985.

1985-1994, was Assistant General Counsel and Research Officer at the FEDERAL RESERVE BANK in Cleveland, Ohio. He has published extensively on banking, central banking, and monetary topics, especially those related to international debt and the regulation of the banking system and financial markets.

1994-1995, was named as being "Of Counsel", within the Finance & Public Law Department, for the law firm of BUCKINGHAM, DOOLITTLE & BURROUGHS (Cleveland, Ohio, USA).

1995, began his private law practice as an 'attorney' and 'economic consultant' in Chagrin Falls, Ohio, USA (an eastern suburb of Cleveland, Ohio, USA).

Served as an adjunct faculty member in the Cleveland-Marshall College of Law, Cleveland State University, since 1988.

Member of the lawyers Bar Association in Ohio and New York.

Admitted to practice in Ohio and New York U.S. District federal courts.

Admitted to practice before 2nd and 6th federal Circuit Court of Appeals.

Admitted to practice before the U.S. Supreme Court.

Published extensively on banking, central banking, and monetary topics, especially those related to 'international debt' and the 'regulation of the banking system' and 'financial markets'.

Areas of specialization included:

Legal aspects of discount window and emergency lending, bankers acceptances, and letters of credit (LOC).

1968-1969, lived in Paris, France during his college dissertation research year.

Todd also teaches AIER students on the history and origins of property rights in Western thought, through the arrival of modern 'political economy models' in the 'late 18th and early 19th Centuries'.

But, AIER's Todd is also a member of another Foundation and organization (see below), which not only sees eye-to-eye with its founder (U.S. Army Colonel Edward C. Harwood) of AIER, but has been conducting meetings trying to see the IRS dissolved, which until U.S. President George Herbert Walker Bush Jr. publicly announced to the national press service - a few months ago (2005) - his interest in "doing away with the IRS" in favor of an across-the-board "national tax", would have otherwise been considered a fringe group of anti-tax radicals.

Targeted by considerable controversy, and as seen on the U.S. investigative television series "60 MINUTES", "CNN", and even online at QUATLOOS.COM [ http://www.quatloos.com/Tax-Forums/viewforum.php?f=8 ], is Todd's other Foundation and organization, named:

WE THE PEOPLE FOUNDATION FOR CONSTITUTIONAL EDUCATION INC.
WE THE PEOPLE CONGRESS INC. (WTPC)
WE THE PEOPLE INC. (WTP)
GIVEMELIBERTY.ORG [ http://www.givemeliberty.org ]
BOSTON TEA PARTY II [ http://www.bostonteapartyii.org ]
Annapolis, Maryland
USA

One of Todd's close acquaintainships at WTP is with director, member, and spokesperson Paul Hiram Chappell, former Chief in the Office of Legal Counsel for the U.S. Internal Revenue Service (IRS) of the U.S. Treasury Department.

Former U.S. Vice-President Al Gore, American movie actor Mel Gibson, Pat Buchanan, and others are spokespersons for WTC.

Like Walker Fowler Todd of AIER, Chappell's background in the U.S. Government had been without the faintest hint or scintilla of inappropriate psychological behavior at the level of their positions.

Paul Chappell is a more interesting WTC activist.

Residences, of record:

Stafford, Virginia, USA
Woodbridge, Virginia, USA
Fredericksburg, Virginia, USA

Business Address:

One Chester Mill Court
Silver Spring (Montgomery County), Maryland
USA
TEL: (540) 374-1283
FAX: (540) 374-1284
E-MAIL: pclaw@crosslink.net

Mailing Address:

c/o Linda C. McCreary
1406 Princess Anne St.
Fredericksburg, VA 22401
USA
TEL: (540) 371-9555 (Linda C. McCreary)

- Legally blind.

- Physically challenged; ambulatory via wheelchair.

- Born 1929. (Age: 76-yrs. old)

- Admitted to Maryland State Bar (Maryland, USA), in 1954.

- B.S. and LL.B. degree from AMERICAN UNIVERSITY, which provides 'correspondence courses' out of Washington D.C.

- 10-yrs. staff member (judge's clerk) for the IRS U.S. Tax Court.

- 7-yrs. staff member, for the IRS Office of Chief Counsel, writing legal opinions on corporate tax matters.

- 1973 Private legal practice began.

- Represents defendants and plaintiffs before the IRS U.S. Tax Court and other U.S. federal courts.

- Began re-examining U.S. statutory and constitutional bases for the individual U.S. income tax enforcement system when a Washington D.C. law firm sent him to Capitol Hill to cover the 'House Ways and Means' and 'Senate Finance' Committee hearings on the drafting of the 1954 Internal Revenue Code.

- Current spokesperson for the entity WE THE PEOPLE FOUNDATION FOR CONSTITUTIONAL EDUCATION INC. affiliated with WE THE PEOPLE CONGRESS INC. (WTPC) in Annapolis, Maryland, USA.

- Client is, Robert Earl Palm (59-yrs. old), claiming friends who work for the U.S. FEDERAL RESERVE BANK, of whom Walker Fowler Todd (above) is suspect, where through THE CHINA FOUNDATION in Hong Kong, promises for accessing the ILMS System and activating a software program (CHEIP) is available for interested parties who only have ties to the U.S. FED and U.S. Administration, which Chappell claims Palm has access to. [e-mail me (below) direct, for 'proof'!];

- Client is, Charles A. Spradlin (56-yrs. old), of EXOUSIA FOUNDATION LTD.

Charles A. Spradlin
16209 Oak Ridge Road
Westfield, Indiana 46074
USA
TEL: (317) 896-9354
TEL: (317) 867-4181

EXOUSIA FOUNDATION LTD.
16209 Oak Ridge Road
Westfield, Indiana 46074
USA
TEL: (317) 896-9354
TEL: (317) 867-4181

SONSHIP INDUSTRIES
P.O. Box 264
Westfield, Indiana 46074
USA
TEL: (317) 896-9354
TEL: (317) 867-2442
FAX: (317) 867-3431
E-MAIL: cs1@sonshipindustries.com
E-MAIL: info@sonshipindustries.com
Contact: Charles A. Spradlin
WWW: http://www.5linx.net/sonship/HTML3/mycontactinfo.html or,
WWW: http://216.239.59.104/search?q=cache:tQKWNybl5zIJ:www.5linx.net/sonship/HTML3/mycontactinfo.html+%22...
WWW: http://www.sonshipindustries.com

Sonship Industries is an Authorized Registered Worldwide Dealer of The Research and Development Groups of America (TR&DGofA).

- In 2004, the U.S. Internal Revenue Service U.S. Tax Court case of HILLIAN vs. [IRS] COMMISSIONER [court case docket #1441-03L (2004)] Paul H. Chappell represented a Plantiff. Chappell, on behalf of the Plantiff who lost the original U.S. Tax Court case, was personally ordered by the U.S. Court to pay a $14,000 (USD) 'fine' when it was adjudged by the U.S. Court that he had filed a "frivolous appeal" with the U.S. Court. [See, e.g. http://www.irs.gov/newsroom/article/0,,id=121380,00.html ]

- In 2005, refocused his interest toward IRS 'procedural regulations and requirements' for 'collecting taxes' via 'liens' and 'property seizures', mathematics record system, tax assessments, and allegations against the IRS regarding searches and seizures.

My post closes on an interesting perspective . . .

What will people see banks do, if the IRS sees its last days?

What will people see banks do, if 'paper money' is ditched?

According to SWISS AMERICA TRADING CORP. [ http://www.swissamerica.com/article.php?=SID&art=09-2005/200509080849f.txt ] gold is to skyrocket in 2006 to $850 (USD) per ounce. If Craig R. Smith is who I think he is, then perhaps those at the CIA gave him that tip for a reason.

I recommend you take time 'now' to read the following eleven (11) chapter report, at:

http://usa-the-republic.com/banks/federal%20reserve.txt

I've retained a personal copy of the report (as above), and not that the report may be taken offline anytime soon, as long as everything holds together with our current international monetary system of currency usage, but if it disappears, simply e-mail me direct (for a copy of it), at: [offshoreinformant@safe-mail.net]

Am interested in reading your comments here (on-board) or via e-mail (off-board).

Submitted by,

Offshore Informant

[E-MAIL: OffshoreInformant@safe-mail.net]

/

/

ECONIC - Histories Foretelling Futures - Part 1
by, Offshore Informant [OffshoreInformant@safe-mail.net]

October 1, 2005

The U.S. Department Of The Treasury sees today its FinCEN foreign-based Financial Intelligence Units (FIU) hold more of an interesting history behind what was publicly announced concerning the Egmont Group at Bretton Woods.

International financial business professionals are not fully aware of FIU history when they were named ECONIC (Economic Intelligence Collection Units) serving similar functions, but from within a different branch of government.

You will find no flurry of public details about FIU activities today inside foreign government departments.

Found was an international government financial business historical analysis report inside the files of the U.S. Directorate of Central Intelligence (DCI) that takes a peek inside offices located down some shadowy hallways.

From 1946 when the U.S. government decided to shift responsibilities away from the U.S. Office of Strategic Services (OSS), Special Intelligence Branch, Economic Intelligence Collection Units (ECONIC), to the Central Intelligence Group (CIG), the predecessor of the Central Intelligence Agency (CIA) and other U.S. departments, however no one knew precisely whatever became of ECONIC.

After September 11, 2001 the U.S. quietly announced what it saw from meetings held by the Egmont Group at Bretton Woods when "FinCEN" and "Financial Intelligence Units" (FIU) were brought back out of the shadows to prove to the public the U.S. was doing at least 'something' with their tax monies to protect them from terrorist attacks.

Operational activities, however were never detailed publicly concerning FinCEN and its global network of foreign based FIUs.

There is 'no' government providing running tallies of foreign (offshore) bank account monies and/or other holdings that have been confiscated and liquidated, which as I understand it, is an even more 'quieter' process than the collection side of the official global affairs.

The biggest financial business operation in the world, begs an 'answer' with these two (2) questions, from those who are funding it:

1.) "Which government treasuries are making a 'profit' or 'loss' from 'both' (a.) Tax monies.; and, (b.) Private interest expenditures, which have been supporting the 'collection processes' worldwide?

2.) "What is the breakdown in amounts of 'both' (a.) Monies and holdings realized.; and, (b.) How and where is it all being distributed and by whom, for all countries involved since this 'type' of U.S. government economic intelligence collection process began?"

To know 'when' those processes began and 'understand which' companies and banks were used in those processes from the very beginning, one must look at the official analysis report (below).

Viewed by some today as the re-surfacing of hidden ECONIC and its Projects (including, JETSAM) of long ago, which was to identify and confiscate (offshore) foreign bank accounts and holdings belonging to enemies of the US & UK, FinCEN and FIUs appear to be that reincarnation.

FIUs today, as ECONIC was, are positioned 'inside' many foreign government departments around the world. One of the smaller examples today is the FIU located within the Grenada Royal Police Force, which many have been unaware of until recently.

Files today, found within the United States Directorate of Central Intelligence (DCI), hold the aforementioned historical analysis report (below):

====

The OSS and Project SAFEHAVEN

By the fall of 1944, it was obvious that the war in Europe was in its final year. In France, British and American forces had broken out of Normandy and were driving toward Paris and the Rhein. In the East, the Soviet Army was expanding its control westward across Europe. All over the Continent, Allied domination of the air was complete, and in the North Atlantic the back of the German U-Bootwaffe was finally broken.

Policymakers had started to think of the peace. Future stability seemed to depend on taking measures to ensure that Germany would not provoke a third world war. Already the "German problem" was dominating Allied political thinking.

In the United States, the War Department and the Department of Justice were making plans and drawing up lists for the postwar war crimes trials. At the Department of the Treasury, Secretary Henry Morgenthau had completed his scheme for the wholesale destruction of Germany's military and industrial power and its re-creation as a feudal, agrarian state. More immediately, in the wartime Foreign Economic Administration (FEA), a small group of policymakers were putting the finishing touches on Project SAFEHAVEN, an operation designed to root out and neutralize German industrial and commercial power wherever it might be found.

The origins of SAFEHAVEN are to be found in two memorandums sent from the FEA to the Departments of State and Treasury on 5 and 17 May 1944, proposing an interagency program to track down and block German assets in neutral and nonbelligerent countries throughout Europe and the Americas.1

The fear was that the German political and economic leadership, sensing defeat, would act to transfer secretly blocs of industrial and fiscal capital to neutral countries, thereby escaping confiscation and the reparations bill. If this happened, German economic and industrial power would be largely intact and would act as a power base from which an unrepentant German leadership could build a resurgent Fourth Reich in 20 years. The military defeat of Germany thus would again be meaningless.

An Ambitious Program

The overriding goal of SAFEHAVEN was to make it impossible for Germany to start another war. Its immediate goals were to force those neutrals trading with Nazi Germany into compliance with the regulations imposed by the Allied economic blockade and to identify the points of clandestine German economic penetration. Implementation of SAFEHAVEN depended on action in four major areas:

· To restrict German economic penetration outside the borders of the Reich.

· To prevent Germany from sequestering assets in neutral countries.

· To ensure that German assets would be available for postwar reparations and the rebuilding of Europe.

· To prevent the escape of those members of the Nazi ruling elite who had already been marked down for war crimes trials.2

In August and September 1944, directives were sent out to American legations throughout Europe and the Americas setting forth the goals of SAFEHAVEN and instructing Embassy officials to take steps to implement them.3

It is quite clear that SAFEHAVEN planners had a good idea of what they wanted to achieve, but it also is apparent that they did not have the slightest idea of how to do it. Although it was evident from the outset that SAFEHAVEN would be primarily an intelligence-gathering problem, it does not appear to have occurred to anyone to consult the intelligence services, which were excluded from the planning and implementation of SAFEHAVEN until the end of November 1944.4 Bureaucratic rivalries predominated. Indeed, SAFEHAVEN was nearly destroyed by internecine quarrels among the FEA, State, and Treasury, each of which wanted to control the program and to exclude the other two from any participation.

State Versus Treasury

The antagonism between the State Department and the Treasury was particularly rancorous and derived from deeper, fundamental differences over postwar policy toward Germany.

Reflecting the views of Secretary Morgenthau, opinion in the Treasury Department favored a punitive peace that would destroy German military and industrial power once and for all.

The State Department was fundamentally opposed to this, arguing that a powerful but pacified Germany was necessary to maintain stability in Europe and to contain the USSR. Because it cut across political as well as economic and fiscal lines of substance, SAFEHAVEN brought out these differences in a forum in which they were incapable of resolution.

Jockeying for position reached a peak in August, when FEA official Samuel Klaus set out on a factfinding tour of Allied and neutral capitals accompanied only by State Department official Herbert J. Cummings, with the Treasury Department deliberately excluded from participation.5 It found out anyway, and two Treasury officials set out in hot pursuit of the Klaus mission, catching up with it in London. Klaus grudgingly allowed them to accompany him to Stockholm, but he refused to permit them to continue further with his delegation. Undeterred, the two Treasury Department officials followed Klaus to Spain. This was too much for Klaus, who canceled the remainder of his trip and returned to Washington.

In his report, filed on 21 October 1944, Klaus criticized efforts to implement SAFEHAVEN to date and cited his belief that Embassy personnel were not devoting sufficient energy to the project. The situation was worse in Spain, where US Ambassador Carlton J. Hayes was accused of actively blocking implementation of SAFEHAVEN, although Spain was "beyond question the country in which the most damaging SAFEHAVEN activities are going on and may be expected."6 Both Treasury and State rejected Klaus's report for their separate reasons, and a flurry of bureaucratic maneuvering dominated SAFEHAVEN for the rest of the year.

OSS Becomes Involved

Although the end result of the bureaucratic battle was the emergence of the State Department as the organization principally responsible for SAFEHAVEN, from the intelligence standpoint the most important step taken was to centralize intelligence and data collection in the US Embassy in London.7

As a part of this move, the decision was finally taken to invite the formal participation of the OSS. Once the OSS was brought into the SAFEHAVEN fold, all the advantages of a centralized intelligence organization were brought to bear. Most important, dissemination of intelligence improved, as did evaluation of the sources from which the raw intelligence data was collected.

Within the OSS, SAFEHAVEN fell largely under the aegis of the Secret Intelligence (SI) Branch, responsible for the gathering of intelligence from clandestine sources inside neutral and German-occupied Europe. But the unique character of SAFEHAVEN, which was both an attempt to prevent the postwar German economic penetration of foreign economies and an intelligence-gathering operation, meant that the OSS counterintelligence branch, X-2, also had an important role to play. SAFEHAVEN thus emerged as a joint SI/X-2 operation shortly after its inception, especially in the key OSS outposts in Switzerland, Spain, and Portugal, with X-2 not infrequently playing the dominant role.8 X-2 was particularly active in reporting on clandestine German projects to acquire important economic and industrial assets in neutral countries. These efforts intensified as Germany's military fortunes waned, especially from September 1944 onward, as the advance of Allied armies threatened to sever Germany's land links with important sources of strategic materials in southeastern Europe and the Iberian Peninsula.

In fact, the inception of SAFEHAVEN meant little more than a redirection of intelligence assets already dedicated to the collection of economic intelligence. The OSS had been collecting economic intelligence similar to that required by SAFEHAVEN since 1942 as a part of the general effort to understand the functioning of the German war economy. Gold transfers in particular were a key part of that economy. Suffering from an acute shortage of certain key strategic resources since the proclamation of the Four-Year Plan and the onset of autarky in 1936, the German armaments industry increasingly had had to resort to specie payments or barter agreements to pay for imports of these materials since before the outbreak of the war. Conquest of Europe had done little to alleviate most of these shortages.

Moreover, due to the inefficiency of the Nazi regime--full mobilization for war production had not been achieved until 1944--the war production index for that year was nearly three times that of 1941, itself a significant increase over 1939-40.9 Paradoxically, therefore, the German appetite for oil, high-grade iron ore, wolfram (tungsten ore), and other strategic materials grew insatiably, even as German industry reeled under the onslaught of the Allied strategic bombing campaign and the territory under German control shrank.

In their search for war materials, Nazi leaders extended their net throughout Europe. High-grade iron ore and copper was imported from Sweden; iron ore from Poland, Austria, and Spain; wolfram from Portugal and Spain; and chromium from Turkey. Voluntarily or involuntarily, every nation in Europe fed the German war machine with the raw materials it needed to function. Switzerland, however, was the central connecting link.

The Importance of Switzerland

In Nazi Europe, neutral Switzerland carried out business as usual, providing the international banking channels that facilitated the transfer of gold, currencies, and commodities between nations. Always heavily dependent on Swiss cooperation to pay for imports, the Reich became even more so as the ultimate defeat of the National Socialist regime became obvious and neutrals grew more wary of cooperating with the Axis belligerents. Since early 1943, Swiss cooperation had become essential as other neutrals responded to Allied pressure and refused to exchange war materials for specie. As defeat loomed, neutrals also became increasingly reluctant to accept payment in Reichsmarks. This left payment in foreign currency, of which Nazi Germany had precious little after nearly a decade of autarky and war.

In this critical situation, the Swiss banks acted as clearinghouses whereby German gold--much of which was looted from occupied countries--could be converted to a more suitable medium of exchange. An intercepted Swiss diplomatic cable shows how, allegedly without inquiring as to its origin, the Swiss National Bank helped the German Reichsbank convert some $15 million in (probably) looted Dutch gold into liquid assets:

In May 1943 (the Swiss National Bank) sold to the Turkish CENTRAL BANK 256 bars (of gold) amounting to 14.8 million francs, which were taken over previously from the German REICHSBANK. This gold was sold back to the German REICHSBANK by the Turkish CENTRAL BANK. Later the German REICHSBANK sold 13.8 million francs of this gold to the BANCO DE PORTUGAL in Lisbon, and one million to the BANK FOR INTERNATIONAL SETTLEMENTS.10

Initially carried out through more or less routine channels of exchange, German efforts to acquire foreign currency and convert it to war materials became increasingly covert as Allied victory approached. Long-term exchange agreements became impossible, with neutrals willing to trade only on a "cash-and-carry" basis and frequently seeking a means of distancing themselves from their Nazi trading partners. To Allied observers, these covert German activities looked like a conspiracy to build an underground economy--an activity that would have profound implications for SAFEHAVEN. In fact, such efforts represented little more than the desperate attempts of the Nazi leadership to preserve access to vital sources of raw materials and had little to do with visions of a resurgent Fourth Reich. Then, too, individual Germans and German corporations were taking steps to conceal assets in foreign countries to protect them against destruction or seizure by the victorious Allied armies.11 Although, from the perspective of 50 years, the real motivations behind such efforts seem obvious, to SAFEHAVEN planners they were evidence of a grand conspiracy, one that encompassed the transfer of millions of Reichsmarks' worth of gold as well as the purchase of individual automobiles in Stockholm and hotels and bank accounts in Portugal.12 In the end, of course, these fears were groundless.

The intelligence collected for SAFEHAVEN, however, proved to be of enormous value in the postwar settling of accounts at Nurnberg and elsewhere and later provided basic building blocks for a historical understanding of the Nazi war economy.

Because the August and September directives implementing SAFEHAVEN treated it as a departmental program--and, to some degree, an intergovernment matter--cooperation on the part of the OSS at first was on an informal basis. Not until 30 November 1944 were instructions sent out to OSS stations alerting them to the intelligence requirements expected to be generated by SAFEHAVEN.13 To a large extent, therefore, the collection of SAFEHAVEN material simply piggybacked onto other programs for the collection and processing of raw economic intelligence from sources already in place.

Allen Dulles in Bern

Under these circumstances, it is scarcely surprising that implementation of SAFEHAVEN measures depended largely upon the personalities of the OSS chiefs of mission and the conditions under which they operated. In Bern, the heart of the Swiss banking and German gold transfer activity, the OSS chief was Allen W. Dulles, later (1953 to 1962) Director of Central Intelligence. An East Coast brahmin with extensive prewar ties to European banking circles, Dulles spent his tenure in Bern constructing an "old-boy" network of sources that extended throughout neutral and Axis-occupied Europe. It was an astonishingly successful system, ideally suited to his situation in neutral Switzerland and well conceived to gain access to European government and business circles. For example, Dulles counted among his close personal friends no less a personage than Thomas B. McKittrick, President of the Bank for International Settlements (BIS), in Basel. A multinational corporation created to manage international currency and gold exchanges, BIS was the single-largest channel for gold transfers in prewar and wartime Europe.

McKittrick also was an OSS source who provided Dulles with "comfortable access" to thinking of the bankers most responsible for moving German assets throughout Europe.14 Among other kinds of information, McKittrick kept Dulles informed of the comings and goings of Reichsbankvizepräsident Emil Puhl, the architect of the German gold transfer arrangements.15

Other well-placed sources available to Dulles in high European financial circles included Dr. Eduard Waetjen, Abwehr agent, member of the German resistance, and commercial adviser to the German Consul General from 15 February 1945;16 Maurice Villars, General Director of the Zurich Electro-Bank; and Swedish economist and Economic Adviser to the BIS, Dr. Per Jacobsson, who was close to (the surprisingly extensive) Japanese diplomatic and business circles in Switzerland. In 1945, Jacobsson provided information that helped to scuttle a Japanese attempt to buy vitally needed ball bearings in Sweden and later served with Maurice Villars as a mediator for Japanese peace feelers put forward in Switzerland.17

Such contacts were clearly important, but it also seems clear that the high value Dulles attributed to them--whether because of his social prejudices or his concern for the intelligence they provided--made him wary of intelligence activities such as SAFEHAVEN. Moreover, Dulles looked forward to a postwar settlement that envisioned the United States working closely with European business and banking circles to reshape Western and Central Europe according to American interests. Finally, Dulles could legitimately claim that his staff was already overburdened by the collection of strategic and military intelligence. On 28 December 1944, following receipt of the OSS memorandum regarding cooperation with State's SAFEHAVEN project, he cabled Washington:

Work on this project required careful planning as it might defeat direct intelligence activities and close important channels for German SI.... Today we must fish in troubled waters and maintain contacts with persons suspected of working with Nazis on such matters. For example,...both 49618 and X-2 here can be useful under cover but believe idea of working practically as agents of Commercial Attache and Consul General Zurich, on this project would be unwise. Further, to deal effectively with matter, it would require special staff with new cover.... At present we do not have adequate personnel to do effective job in this field and meet other demands.19

Strategic Intelligence

In part because Dulles was already fully occupied with his existing requirements for strategic intelligence reporting, in part, no doubt, because of his unwillingness to give SAFEHAVEN material the attention Washington believed it deserved, responsibility for this task in Bern was delegated to X-2.20 Fortuitously, the restoration of access to Switzerland through France in November 1944 made it possible for the first X-2 operative in Switzerland to enter the country by the end of the year.21 By January 1945, X-2 was up and running in Switzerland, and by April it was able to provide OSS Washington with an extensive summary of Nazi gold and currency transfers arranged via Switzerland through most of the war.22 According to X-2, these included:

· Gold and bonds looted by the Nazis from all over Europe and received by certain Swiss banks.

· Funds sent by the Deutsche Verkehrs-Kreditbank of Karlsruhe to Basel.

· Securities held in Zurich by private firms for the Nazi Party.

· Large quantities of Swiss francs credited to private accounts in various Swiss banks.

· Money and property held in Liechtenstein.

· More than 2 million francs held by the Reichsbank in Switzerland.

· Forty-five million Reichsmarks held in covert Swiss bank accounts.

Apart from the obvious official transactions, these sums were brought in by German and Swiss banks and business organizations. X-2 reported only a few cases where private individuals, some of whom were believed to be with German intelligence organizations, participated. Methods used included smuggling, diplomatic pouches, undercover exchange of foreign currencies, Swiss bank accounts and trusts, sales of paintings and other valuables, and the black market.23

From the end of 1944, SAFEHAVEN reporting originated by X-2 appeared alongside other reporting provided by Dulles's SI operation in Bern. Although Dulles's SI organization provided substantial SAFEHAVEN intelligence material,24 it was swamped in a sea of other reporting on strategic and military topics:

- War damage to German industry; the status of German synthetic oil refining operations; how the German Reichsbahn was maintaining rail services despite extensive bomb damage;

- Order-of-battle and operational intelligence on German forces in Italy and on the Western Front (for which Bern was the principal source);

- Political intelligence on the Fascist Italian Social Republic (the puppet regime founded in 1944 after Mussolini's fall from power and subsequent rescue by German commandos);

- Contacts with the German resistance; and--not least--

- From March 1945, the negotiations leading to the surrender of Axis forces in Italy.25

Lieutenant Casey's Activities

By the end of 1944, reporting on the Reich from OSS Bern was being augmented by material from the SI mission in London.

Dependent on agent reporting from within Germany itself, the intelligence collection by the sources available to SI London of necessity was somewhat problematic until mid-September 1944, when the liberation of Paris and much of France provided new avenues for attacking the German target. SI London moved to Paris, where it was designated SI European Theater of Operations (ETO). Its chief was then-Navy Lt. William J. Casey. The son of a Tammany Hall politician, Casey was a feisty Irishman who lacked the family connections of his counterpart in Bern.

Casey's vision of the postwar world saw the United States playing business interests in Germany against each other and against Communist and Socialist-led labor unions.26 He welcomed an opportunity to collect intelligence showing Nazi connections to supposedly neutral business circles as a means of influencing these same circles in the postwar world. As a result, Casey launched into SAFEHAVEN with such enthusiasm that he had to be restrained by Washington, in a cable dispatched on 18 January 1945:

...(W)hile SAFEHAVEN Project has certain present and potentially greater future value, no SI personnel which can possibly be used in connection agent penetration Germany...should be used for any SAFEHAVEN purpose. For this project we can be one of many supporting agencies Department State which has assumed control and direction.

For agent penetration Germany for strategic information and for proper briefing such agents US Government can look to OSS SI only to accomplish its characteristic mission.27

This meant that SI ETO would largely confine its SAFEHAVEN activities to the areas already under Allied control. This was already the most fruitful area because, by definition, SAFEHAVEN involved assets outside Germany. By the end of the month, Casey was able to report that the "gold project" was under way in Paris, with other plans for SAFEHAVEN work in France, Belgium, and Holland. Because these areas were already occupied by Allied forces, however, the special intelligence techniques that distinguished OSS operations proved unnecessary. Casey did not give up, though; two months later, he reported that "SAFEHAVEN work with State has shown area to be a valuable field of endeavor, especially because of the potential for leverage with German financial circles, etc., in the future," and "Fagan SAFEHAVEN man for Embassy...feels us absolutely necessary to his work."28 Nevertheless, SI activity in this area remained a footnote to the efforts of State Department and other personnel already on the ground. An X-2 "Art Looting Investigation Unit" produced similar results.29

The Iberian Peninsula

Switzerland remained the financial heart of German gold and currency transactions, but without question, for OSS the most productive areas of SAFEHAVEN activity were the other neutral centers of German commercial activity, Sweden and the Iberian Peninsula. The OSS mission in Madrid in particular had had economic intelligence as a principal function since its creation in April 1942, despite being "very considerably hampered" until shortly after VE Day by an Ambassador and diplomatic staff hostile to OSS activities.30 Most OSS operatives in Spain were handled out of Lisbon under nonofficial cover because the diplomatic staff in Madrid made a practice of identifying intelligence agents to the Spanish police.31 Considering espionage against a "friendly" [sic] country32 to be "un-American," Ambassador Carlton J. Hayes resented the OSS presence in Spain and insisted on censoring all incoming and outgoing OSS message traffic to Washington. "For a good many months," the Embassy would not allow OSS Madrid to pass on SAFEHAVEN material, or even economic reporting, to Washington.33

OSS Madrid nonetheless managed to provide extensive documentation of German commercial transactions throughout the war.34 Bills of lading or manifests covering all merchandise shipped to France (and thence to Germany) were provided weekly, including everything from orange juice to wolfram and steel rails.35 Equally important was documentation of the flagrant cooperation given the German war effort by the Spanish authorities, including the use of Spanish airfields by German aircraft, the covert supply of German submarines in Spanish harbors (Operation MORO), and in matters of espionage and counterespionage by all grades of Spanish officials.36 From 1945, X-2 Madrid was able to document German economic penetration in Spain, illegal currency transfers, smuggled works of art, and plans by French collaborators, pro-Nazi individuals, and covert organizations to use Spain as a postwar hideout--as well as integration of German technicians into the Spanish military. Nearly 50 Spanish firms were identified by X-2 as having been used by Germany for espionage purposes. By VE Day, X-2 had identified some 3,000 agents in Spain and more than 400 members of enemy clandestine services.37

Operations in Portugal were made easier by that country's traditionally pro-British stance (despite having an authoritarian regime on good terms with Franco). The local authorities provided OSS Lisbon with access to enemy safe-deposit boxes held in every bank in Portugal except four (which were covered by the British).38 In January 1945, the Research and Analysis Branch (R&A) of the OSS used this material to document German gold and foreign currency transactions from January 1943 to December 1944.39 The Portuguese authorities were willing to extend cooperation to direct action as well. Acting on information largely provided by X-2, at the end of the war the Portuguese Government sealed up the German Embassy and withdrew recognition from German diplomatic and consular representation.40 By war's end, X-2 files in Lisbon listed 1,900 enemy agents and 200 enemy officials.41

Sweden

Much as in Spain and Portugal, economic reporting was a staple of intelligence activities in Sweden from the outset of American involvement in the war. Despite its liberal democratic traditions, Sweden was Nazi Germany's largest trading partner during the war and almost the sole source of high-grade iron ore and precision ball bearings for the German war machine. Imports of the latter from Sweden were especially important following the destruction of the VKF ball bearing plant (itself Swedish-owned) at Schweinfurt by the US Eighth Air Force in August and October 1943.42 OSS operatives in Swedish southern and east coast ports monitored the ore traffic and were able to provide extensive reporting on the rate and size of Swedish shipments to Germany.43

From December 1943 until his arrest in May 1944, an OSS agent working in the shipping office of the SKF ball bearing plant in Goteborg supplied reports on ball bearing shipments to Germany, including serial numbers and quantities. Using this information, the Klaus Mission was able to extract an agreement from the Swedish Government to stop all future shipments of ball bearings to Germany. Intelligence data collected on iron ore shipments and exports of ball bearings were not, of course, directly related to SAFEHAVEN, but, because they accounted for much of Germany's foreign trade with Sweden, they provided important indices that could be used to calculate specie and currency transfers.

By late 1944, German economic planners were desperate enough to try exporting crude petroleum (itself in short supply) to Sweden as a substitute for the specie payments that had funded the iron ore and ball bearing transactions.44 Eric Erickson, an American-born Swede working for the OSS, penetrated the German synthetic oil industry and, in addition to reporting extensively on that industry, was able to provide information on German gold and currency transactions--perhaps the best example of how it was possible to derive SAFEHAVEN material from existing OSS sources of economic and industrial intelligence.45

By April 1945, X-2, using SI sources as well as its own, was able to document German transactions converting Swedish Kronar 100,000,000 (about $25 million) in gold and currency into German goods (chiefly chemicals, drugs, and textiles) stored in Swedish warehouses. From at least August 1944, low-grade reporting depicted the German legation in Stockholm selling diamonds looted from the Dutch State Bank on orders from the German Reichsbank.46 Additional activity, probably involving individuals and private firms, was documented whereby German gold was either smuggled into Sweden or converted to gasoline or salable goods.47 This latter activity was discounted--probably correctly--in a postwar message that documented German wartime gold transfers to Sweden with official data from the Swedish Riksbank.48 More difficult to document was the role of Stockholms Enskilda Bank, owned by the powerful Wallenberg family, which received more than $4.5 million from the Reichsbank between May 1940 and June 1941 and was suspected of having acted as a purchasing agent (through intermediaries) for the German Government in buying up German bonds and securities held in New York.49

More OSS Participation

By the spring of 1945, OSS collection on the SAFEHAVEN project was extensive enough to warrant more formal treatment in the OSS hierarchy. The 30 March 1945 State Department circular warning neutral governments not to trade with Nazi Germany prompted a resurgence of effort on the part of the OSS in the collection of SAFEHAVEN material. A circular memorandum from the acting Director of Strategic Services, Edward Buxton, called on OSS to "make a substantial contribution to this program," albeit with the caveat that "the collection of military, political, and other types of intelligence will continue to be an important function of this agency." In fulfillment of this goal, OSS chiefs of mission were instructed to report on the status of SAFEHAVEN operations in their area. To better direct OSS participation in the program, an Economic Intelligence Collection Unit (ECONIC) was created under John A. Mowinckel, reporting directly to the Director's office.50 This unit monitored and, on occasion, synthesized SAFEHAVEN reporting into detailed reports on specific topics--for example, a massive report prepared at the request of the State Department on the activities of the Swiss firm Johann Wehrli & Co., A. G. (Wehrlibank), a private Swiss banking house with global interests then under investigation by the Justice Department for its role in transferring private German assets overseas.51 [FILE: RG 226, Entry 183, Box 21, "Wehrli combine," n.d.; The economic report was based on intelligence data to complement an audit of the Wehlibank books by the U.S. firm Price, Waterhouse & Co., conducted under joint British and American auspices.]

Donovan's Objective

This move by OSS Washington probably did not have much impact on the SAFEHAVEN intelligence effort in the field, which had been operating for more than three months. Rather, it should be seen as a part of the effort by OSS Director Brig. Gen. William J. Donovan, to carve out a place for his organization in the postwar world. Two reports were filed in the Director's office at this time that were relevant to SAFEHAVEN, both of which were critical (at least by implication) of the State Department's efforts in this area. One, written by R&A, correctly placed German import and transfer activity in context with the development of the German war economy since 1933, in effect discrediting the whole notion of a concerted program to fund a resurgent Fourth Reich using assets concealed in neutral countries.52 The other, prepared by X-2, launched a direct attack on SAFEHAVEN. Noting that "There are many problems in the SAFEHAVEN program, mainly due to the inexperience and general lack of comprehension on the part of State Department personnel," the X-2 report argued that the project consumed personnel and resources that might better be used elsewhere. The basic flaw in the program was that it failed to distinguish between transactions that were part of "German power politics" and those that occurred in another, albeit related context--that is, the actions of individuals and individual corporations. Asserting that "the defeat of the Axis will not end the game of power politics between nations," the report projected that "SAFEHAVEN may turn out to be less important than the collection of economic, political, and social intelligence in connection with other problems and other foreign countries.... SAFEHAVEN should be the starting point for large-scale and permanent economic intelligence for the protection and promotion of our economic and political interests abroad."53

In the intelligence requirements generated by SAFEHAVEN, Donovan clearly saw an argument for the existence of a central intelligence organization like the OSS after the end of the war. With this in mind, he passed the reports along to Senator Harley Kilgore, then heading a Senatorial investigation of the elimination of German war resources. Nonetheless, such action could hardly overcome the opposition that had been building to Donovan's idea of a postwar central intelligence organization since his first proposal was ventilated in September 1943.

Postwar Restructuring

Thus it was that on 20 September 1945 the OSS was abolished by Executive Order and its component parts absorbed by various agencies in the Washington bureaucracy. R&A was absorbed by the State Department's Interim Research and Intelligence Service, while SI and X-2 were moved into the War Department as the Strategic Services Unit (SSU). On 22 January 1946, President Truman created a temporary Central Intelligence Group (CIG) as a body for the coordination of intelligence activities on the national level. Clandestine human-source collection remained in the War Department until the creation of the CIA in 1947.

With the end of the war in Europe, first the OSS and then the SSU began to shift resources away from support of the SAFEHAVEN program into other areas, especially collection against the Soviet Union.54 Efforts by FEA and State Department representatives in Europe to revitalize SAFEHAVEN ran up against the stone wall of budgetary limitations. On 20 July 1945, SI Paris cabled OSS Washington:

Original definition of Safe Haven, namely tracking down German capital and assets abroad, has been very substantially broadened by (Klaus) of FEA now in Washington and Fagen of Embassy, they claim under instructions of Washington. They have asked that under Safe Haven we should now gather intelligence on "external security" namely, all German activities abroad, cultural and political as well as economic and financial, in short, the entire non-military SI field of activity.... We pointed out that we were presently contracting, not expanding, our activities and that his wishes and the particular targets he was suggesting required substantial additional personnel.55
Noting that "We would be happy to undertake intelligence operation (of this kind) and are physically equipped to do so," Washington replied that "...no funds (are) available," and recommended that State "officially urge OSS to procure additional funds for such purposes...."56 No such pressure was forthcoming; to the contrary, although SAFEHAVEN remained important, with the end of the war in Europe the role of intelligence reporting in the project began to diminish. That same month, lack of Treasury and State interest prompted OSS to begin rolling up economic reporting networks in the Iberian Peninsula.57 OSS and SSU reporting on sequestered German assets continued under the rubric of Project JETSAM, but at a much lower level of effort.

The haste with which the United States detached itself from its first central intelligence organization at the end of the war thus was replicated in Project SAFEHAVEN. As elsewhere in the government, however, the trend away from a general reliance on intelligence sources almost immediately reversed itself in the postwar follow-on to SAFE-HAVEN, as the Western Allies sought to use the information collected in wartime to seek restoration of those assets looted by Nazi Germany.

Settling Accounts

Geography and chance had left the Western Allies in control of the Reichsbank archives, as well as the vast bulk of the gold reserves remaining in Germany at the end of the war. With virtually all of Europe economically devastated and dependent on US aid for the most basic requirements of sustenance, the Western Allies thus were presented with both the opportunity and the means to compel a general settling of accounts. Switzerland was the most obvious target.58 The Swiss had profited mightily from World War II, having taken in (by Allied estimate) $781-785 million in Nazi gold, of which $579 million (or 74 percent) had been looted from the victims of Nazi aggression.59 Indeed, the postwar prosperity of Switzerland was based largely on the immense profits made from Nazi Germany in the war. On the other hand, for the Swiss, the situation in the immediate postwar period was potentially dire.

Having been geographically and economically isolated from non-Nazi Europe for nearly five years, the Swiss desperately need to reconstruct the export-based economy that had existed before World War II. This, in large measure, depended on the willingness of the United States and its Allies to negotiate the trade agreements necessary to sustain a viable export economy. Moreover, Switzerland was unable to feed itself and depended totally on the Allies for the imports of food and fuel it needed to survive. Thus, there was little the Swiss Government could do to prevent the Western Allies from imposing the most punitive settlement necessary to obtain the restoration of looted German gold, should they wish to do so.

In this, the Swiss were indeed fortunate that they were negotiating with the Western Allies and not their wartime trading partners. Although the Swiss Government was haunted by fear of the economic pressure that might be imposed throughout its negotiations with the United States, at no point did the Allies make use of their position to compel an agreement. In the end the settlement negotiated with the Swiss Government fell afoul of the Cold War and the consequent shift in postwar priorities away from the problems created by Nazi Germany. The settlement ultimately reached was essentially unsatisfactory for the Allies: the Swiss agreed to a token payment of $58 million, and a 50-percent share of the value realized from liquidating German assets in Switzerland.

The negotiations with the Swiss Government were nonetheless noteworthy as this was perhaps the first time that US diplomacy was supported by a system of national intelligence reporting. Although the surviving documentation is fragmentary, it is clear that the Allied negotiators were fully supported by the nascent SSU and possibly also by communications intelligence provided by the Army Security Agency, predecessor of the National Security Agency.60

Complicated Negotiations

Although preliminaries were under way as of the summer of 1945, the negotiations themselves did not begin until early the next year. In addition to the intelligence collected for SAFEHAVEN, the Allies had access to the extensive files of the Reichsbank and the Auswartiges Ämt, the German Foreign Office. They thus had full documentation of the movement of looted German gold, and especially gold looted from the Belgian National Bank into Switzerland. The Allies were particularly indignant over an exchange of letters between the Swiss National Bank and Reichsbankvizepräsident Emil Puhl revealing that the Swiss had been conducting commercial negotiations with the Nazi government at the same time that they were making an agreement with the Allies to block German assets in Switzerland.61

As negotiations got under way, the chief of the SSU, Gen. John A. Magruder, finally mobilized the SSU Mission in Bern to obtain reporting on Swiss negotiating goals and tactics. The head of the Swiss delegation to Washington, Dr. Walter Stucki, was an especially important target. Priority tasking began in March 1946. Two urgent messages were dispatched from SSU Washington that month: on the 14th, requesting "...any possible information on instructions particularly general line of defense given Stucki," followed by a "priority" request on the 19th for "...instructions to Stucki delegation re willingness Suisse permit Allied seizure German funds for use for reparations.... Was committee allowed latitude for decision here?"62

Responding to this task, SSU Bern contacted a "reliable source" close enough to the Swiss Foreign Office to report on the thinking of Max Petitpierre, head of the Political Department and the man ultimately responsible for negotiating an agreement with the Western Allies. The reporting showed Petitpierre and a majority of the Swiss Federal Council to be "convinced" that granting Allied claims to German assets was "indispensable." Petitpierre, a Radical Democrat, was said to be particularly concerned for the coming Swiss elections and apprehensive of a conservative reaction to Swiss resumption of diplomatic relations with the Soviet Union. On 21 March, he told the SSU source that he earnestly desired to settle "the present misunderstanding with the United States to counterbalance this gesture of friendship toward the East."

The Swiss were further prepared to accede to the demand that Allied representatives be admitted to Switzerland to track down concealed German assets, which the socialist segment of the Council admitted considerably exceeded the official estimate. According to this report, the most important Swiss demand was for reimbursement for approximately SFr 500,000,000 in unpaid-for goods shipped to Germany during the war. This they planned to take from the outstanding balance of a prewar German loan for building the Gotthard Tunnel and from German investments in the Swiss railway system.63

Although this intelligence was passed to State Department on 22 March, it is far from clear that it had any immediate effect on the progress of the negotiations. For a long time, the two sides were too far apart for any progress to be made. Dr. Stucki, the head of the Swiss delegation, was a hard bargainer whose attitude contrasted sharply with the more conciliatory posture adopted by the Swiss Foreign Office in Bern. He had considerable latitude in negotiating with the Allies, and he was determined to make the best possible deal. Frustrated by the lack of progress, Stucki nevertheless retreated slowly and cautiously to his final negotiating position, apparently adhering strictly to what must have been his instructions before he left Bern.64 He never once surrendered any moral ground. On the other hand, the intelligence that came out of SSU Bern is strong evidence that Petitpierre and the Federal Council were willing to be more flexible than they appeared in Washington--possibly even to the extent of increasing the sum they were willing to offer as restitution.65 Moreover, the Swiss were concerned the Allies might exploit their considerable economic leverage to force them into an agreement on unfavorable terms.

It was difficult for Washington to resolve the contrast between the more flexible posture on the gold issue reportedly adopted by the Swiss Foreign Office in Bern with the firm stance taken by Walther Stucki in Washington. On 27 March, SSU chief General Magruder complained to Bern, "Everything [that the] Swiss delegation has said to date," contradicted the information that had been received from the field, and requested that SSU Bern immediately confirm its previous reporting:

"Much depends on it."66

At the end of the month, Stucki returned to Switzerland to discuss the progress of the negotiations with the Foreign Office. He spent about a week in Bern. On 10 April 1946, SSU Washington cabled Bern placing an "urgent" requirement for "Information re Stucki's new instructions and report of his activities during the week he spent in Switzerland...."67 By this point, however, SSU Bern was reporting all intelligence obtained on German assets in Switzerland directly to the Ambassador and was mute on the subject in its communications with SSU Washington.68 No reply has been found.69

Reaching Agreement

Over the next two weeks negotiations became acrimonious, with both sides still far apart. On 15 April, Stucki expressed his concern that the United States was obtaining information on his instructions directly from a source in Bern.70 On 23 April, negotiations collapsed, Stucki having walked out of a session at which the Allies demanded $130 million for the reconstruction of Europe. Almost immediately, however, Stucki countered with an offer of SFr 200,000,000 ($46.4 million).71 The next day he voiced his conviction that the State Department was leaking information from Bern to the American press corps on how far the Swiss were willing to go in making restitution.72 While each leaks are impossible to confirm, the negotiators in Washington probably were receiving further reporting on the Swiss negotiating posture, with information likely being provided directly to the Ambassador as it was received. On 30 April, Magruder cabled the Bern again, "What instructions were given to Stucki on gold? How far can he go and how much has he been authorized to pay?"73 The following day the Allies rejected the Swiss offer, upon which Stucki made his final proposal: SFr 250,000,000 ($58.1 million) and half the proceeds from liquidating the German assets in Switzerland.74 Again, no human source reporting has been found in response to Magruder's cable to Bern, but this time the American head of delegation, Randolph Paul, apparently was persuaded that there was no point to further negotiations.75 After much discussion, on 21 May 1946 the Allies accepted Stucki's final offer.

Renewed Interest

With the conclusion of the Allied-Swiss negotiations, the files on Projects SAFEHAVEN and JETSAM were closed, and the operations themselves all but forgotten until, just over half a century later, a new generation of researchers discovered them in a renewed search for "Nazi gold."76 In an effort prompted by the passing of the generation chiefly victimized by the Holocaust and World War II, a team of government historians revisited the ground covered by the OSS in its efforts to track down underground sources of German industrial and commercial power. Their task was to find out what the US Government knew about Nazi efforts to exploit gold and other valuables looted from conquered countries and stolen from individual victims of the Holocaust to feed the German war effort. What they found in the SAFEHAVEN files was a mother lode of intelligence reporting on German international commercial and fiscal transactions in 1944 and 1945.

Unfortunately, none of the intelligence collected for SAFEHAVEN was useful in identifying assets that had been stolen from Jews and other victims of the Holocaust and Nazi aggression.

Because of the nature of the transactions, because key records remained closed, and because the Nazis went to great lengths to conceal the origins of the gold, currencies, and other valuables transferred into neutral countries, these assets were more or less anonymous by the time they came under the purview of SAFEHAVEN collectors. There was voluminous reporting concerning transfers of gold and currency among Nazi Germany, Switzerland, Spain, Sweden, and other countries; efforts to conceal German-owned assets in neutral and nonbelligerent countries at the end of the war; and attempts to transfer assets through Spain and Portugal to South America. Although it is nearly certain that gold and other valuables stolen from European Jews figured in these transactions, these assets probably could never be separated from the much larger quantity of booty looted from Europe as a whole. Nevertheless, apart from documenting the major channels of German economic activity, these findings were valuable in that they showed US secret intelligence organizations to have been assiduous in their support of US Government policy. In the final analysis, that is what is most important.

Notes:

1 Foreign Relations of the United States (hereafter cited as FRUS), 1944, Vol. II, pp. 215-16.

2 US and Allied Efforts to Recover and Restore Gold and Other Assets Stolen or Hidden by Germany During World War II (hereinafter Eizenstat Report), Preliminary Study (May 1997), p. 15.

3 Arthur L. Smith, Jr. Hitler's Gold: The Story of the Nazi War Loot, (Oxford: Berg Publishers, 1989, 1996), p. 68.

4 Eizenstat Report, p. 15.

5 Ironically, the FEA was administratively subordinated to the Treasury Department and made up principally of Treasury Department officials. Klaus's formal title was "Special Assistant to the General Counsel of the Treasury Department."

6 Klaus Report to Currie, Coe, and Cox, Franklin D. Roosevelt Library, Franklin D. Roosevelt Papers. Quoted in the Eizenstat report, pp. 16-17. See also Margaret Clarke, The Safehaven Project, Foreign Economic Administration Study #5 (Washington, DC, 1945), p. 46.

7 Eizenstat Report, p. 21.

8 In Bern, for example, SAFEHAVEN was almost exclusively the responsibility of X-2, SI being preoccupied with political, economic, and military reporting. In Madrid, the hostility of the US Ambassador to intelligence collection meant that X-2 assumed the task by default. OSS War Report, Vol. II, pp. 31-35, 283. All citations to this document refer to the declassified two-volume version in the possession of the CIA History Staff. The entire War Report is available in one-volume form in Anthony Cave-Brown, The Secret War Report of the OSS (New York: Berkeley, 1976).

9 Alan S. Milward, The German Economy at War, London: The Athalone Press, 1965; pp. 192-94. See also, idem., "The Reichsmark Bloc and the International Economy" in H. W. Koch, ed., Aspects of the Third Reich (New York: St. Martin's, 1985), pp. 331-59.

10 Bern #246 to Washington, 23 April 1946. Intercepted Swiss diplomatic traffic also shows that the Swiss knew that they had accepted SFr 378,000,000 in looted Belgian gold. This gold had been deposited with the Bank of France in 1939 and was turned over to the German Government by the puppet Vichy regime. Swiss justification for this was that "the only way in which Belgian gold got into German hands was through the Laval government." Washington #256, to Bern; 25 April 1946.

11 A fundamental error committed by the planners of SAFEHAVEN (as well as X-2) was the assumption that the actions of individual German corporations and Nazi leaders necessarily represented the policy of the National Socialist regime. Although there were some attempts by parts of the regime to plan for underground activities after the war (such as the half-mythical Werwolf program), they were far less important than ever imagined by the SAFEHAVEN planners. The vast bulk of the attempts to conceal wealth in foreign countries detected by the SAFEHAVEN program were initiated by individuals and individual corporations anticipating the imminent collapse of the Reich. RG 226, Entry 116, Records of the Office of Strategic Services; Office of the Director, Microfilm Publication 1642, Reel 108; Murphy to Mowinckel, 4 June 1945, "X-2 Case Materials Illustrating German SAFEHAVEN Practices."

12 RG 226, Entry 116, Records of the OSS; Office of the Director, Microfilm Publication 1642, Reel 108; Murphy to Mowinckel, 4 June 1945, 66 "X-2 Case Materials Illustrating German SAFEHAVEN Practices."

13 RG 226, Entry 116, Records of the OSS; Office of the Director, Microfilm Publication 1642, Reel 108. Cable: Washington 16234. To 148 from Callisen, 19 December 1945.

14 Peter Grose, Gentleman Spy. The Life of Allen Dulles, (Boston: Houghton Mifflin & Co., 1994), pp. 169-70.

15 RG 226, Entry 99, Box 13, Folder 41-1 OSS History Office, Cable Digest; 23 March 1945, #7387 21 March 1945, 110 (Dulles) to Washington.

16 Neal H. Petersen, ed.; From Hitler's Doorstep: The Wartime Intelligence Reports of Allen Dulles, 1942-1945, (University Park, PA: Pennsylvania State University Press, 1996, p. 561.)

17 Ibid., pp. 464, 524, 633.

18 Nb., 496 was OSS source Maurice Villars, a General Director of the Zurich Electro-Bank.

19 RG 226, Entry 116, Records of the Office of Strategic Services, Office of the Director, Microfilm Publication 1642, Reel 108. Cable: Bern 2677, 28 December 1944.

20 Because Switzerland was surrounded by Axis territory, it was impossible to provide OSS Bern with personnel to take on additional tasks for most of the war. Until the end of 1944, OSS Bern had a staff of just three intelligence officers, including Dulles. OSS War Report, Vol. II, p. 273.

21 Ibid., Vol. II, p. 283

22 In Operation LAURA, under way by February 1946, X-2 was able to document quantities of gold shipped from Switzerland to the Iberian Peninsula. Unfortunately, none of the reporting appears to have been preserved. CIA Job 79-00332A, Box 191, Folder 14, Joyce from Blum "(Bern) X-2 Progress Report," 1 February 1946.

23 RG 226, Entry 116, Records of the OSS; Office of the Director, Microfilm Publication 1642, Reel 108; Murphy to Mowinckel, 4 June 1945, "X-2 Case Materials Illustrating German SAFEHAVEN Practices."

24 Examples: on 26 February 1945, Bern reported that Nazi funds were being sent abroad, not through ordinary banking channels, but through other banks, to include the Dresdenerbank, the Fromberg Bank in Berlin, and the Wehrlibank in Switzerland (Robert Louis Benson and Michael Warner, ed. Venona: Soviet Espionage and the American Response (Washington, DC: National Security Agency & Central Intelligence Agency, 1996), pp. 219-20); Dulles provided photos of clandestinely obtained German reports documenting a December 1944 trip to Bern by Reichsbank Vice President Emil Puhl; plans for the manufacture of Nebelwerfer (rocket launchers) in Switzerland (both RG 226, Entry 123, Box 2 Folder 5); similar documents describing how German gold and Reichsmarks might be converted to Portuguese escudos through Switzerland (RG 226, Entry 123, Box 2 Folder 26); on 23 March 1945 a report describing how quantities of German gold were converted into lire by exploiting loopholes in Swiss currency laws (RG 226, Entry 108, Bern B-2118: 23 March 1945); on 16 April 1945, a report documenting German penetration of the Swiss consumer goods industry (RG 226, Entry 108, Report B-2472 16 April 1945).

25 RG 226, Entry 108, boxes 4-10 OSS Bern files, passim.

26 William Casey, The Secret War Against Hitler (Washington, DC: Regnery Gateway, 1988) , pp. 236-37.

27 RG 226, Entry 116, Records of the OSS, Office of the Director, Microfilm Publication 1942, Reel 108. Cable: 4174, to 908 and Casey from 154 (Shepardson) 18 January 1945.

28 RG 226, Entry 116, Records of the OSS, Office of the Director, Microfilm Publication 1642, Reel 108. Cable: Paris 9804, 154 (Shepardson) from Casey, Cassady, Acheson; 8 March 1945.

29 OSS War Report, Vol. I, p. 196.

30 RR 226, Entry 116, Records of the OSS, Office of the Director, Microfilm Publication 1542, Reel 108. Cable: Paris 9804, 154 (Shepardson) from Casey, Cassady, Acheson; 8 March 1945.

31 OSS War Report, Vol. I, p. 196.

32 Although frequently referred to as such, Spain was not a neutral in World War II, but was a "non-belligerent" power allied with Germany, Italy, and Japan. In November 1940, Franco's Foreign Minister, Ramon Serano Suner, signed a secret protocol by which Spain became an "adherent" of the Tripartite Pact signed on 27 September 1940 by Germany, Italy, and Japan (the so-called Rome-Berlin-Tokyo Axis). Spain also agreed to enter the war at some unspecified future date. Documents on German Foreign Policy, Series D, volume XI, The War Years: September 1, 1940-January 31, 1941; pp. 466-67, 479. See also Malcolm Muggeridge, ed.; Ciano's Diplomatic Papers (London: Odhams Press, Ltd., 1948) , pp. 405-08.

33 RG 226, entry 99, Box 20, Folder 64 Lisbon 329 Elton from 983: "Present Status of Safe Haven in Madrid; and Elaboration of King 58 of May 26, 1945."

34 For Spain's place in the Nazi war economy, see Herbert Feis, Spanish Story (New York: Alfred A. Knopf, 1948) .

35 OSS War Report, Vol. II, p. 32.

36 Charles B. Burdick, "'MORO:' the Resupply of German Submarines in Spain, 1939-1942," Central European History (1970): OSS War Report, Vol. II, p. 32.

37 RG 226, Entry 116, Records of the OSS; Office of the Director, Microfilm Publication 1642, Reel 108; Murphy to Mowinckel, 4 June 1945, "X-2 Case Materials Illustrating German SAFEHAVEN Practices."

38 OSS War Report, Vol. II, p. 37.

39 RG 226, Entry 116, Records of the OSS, Office of the Director, Microfilm Publication 1642, Reel 108. Memorandum: Donovan from Despres, 29 November 1944.

40 RG 226, Entry 116, Records of the OSS, Office of the Director, Microfilm Publication 1642, Reel 108. Cable: Lisbon 7247, 6 May 1945.

41 OSS War Report, Vol. II, p. 36.

42 The German VKF, Vereinigte Kugellagerfabriken, A. G., was a subsidiary of Svenska Kullagerfabriken, (SKF), owned by the Swedish Stockholms Enskilda Bank. Although German requirements were met by a combination of domestic production and imports from Sweden, about two-thirds of the ball bearings used in the German war effort were, in effect, produced by the same company. See Martin Fritz, "Swedish Ball Bearings and the German War Economy," Scandinavian Economic History Review, (1975).

43 OSS War Report, Vol. II, p. 261. For the importance of high-grade Swedish iron ore to the German war economy, see Martin Fritz, German Steel and Swedish Iron Ore, 1939-1945 (Goteborg: Ekanders Boktryckeri Artiebolag, 1974) and an exchange among Martin Fritz, Jorg-Johannes Jager, Rolf Karlbom, and Alan S. Milward in Scandinavian Economic History Review (1965, 1967, 1968, 1973).

44 The Germans also envisaged the plan as a means of avoiding Allied strategic bombing attacks on the German oil industry: refinery production above and beyond Sweden's requirements would be re-exported to Germany. RG 226, Entry 116, Records of the OSS, Office of the Director, Microfilm Publication 1642, Reel 108. Cable: Enclosure No. 1 to Stockholm 4393, 28 October 1944.

45 OSS War Report, Vol. II, pp. 262-63. Erickson's career (with many fictional details) is the subject of Alexander Klein's Counterfeit Traitor (New York: Henry Holt, 1958) .

46 RG 226, Entry 108, Box 316, Folder T-2200, "Germans Selling Diamonds in Stockholm," 11 August 1944. All wartime intelligence reporting was graded according to the reliability of the information and the source from which it was obtained. This report is graded "C-3," almost the lowest possible rating.

47 RG 226, Entry 116, Records of the OSS; Office of the Director, Microfilm Publication 1642, Reel 108; Murphy to Mowinckel, 4 June 1945, "X-2 Case Materials Illustrating German SAFEHAVEN Practices." For examples, see RG 226, Entry 108, Box 316, Folder T-2200; "Enemy Capital in Sweden," 14 August 1944--also a low-grade intelligence report, but typical of the kind of information obtained.

48 RG 226, Entry 108, Box 25, Folder 143. Dispatch: Stockholm 7063 Secretary of State from Ravndal, "Transmission of Information Concerning Shipments of Gold Between Sweden and Germany" SAFEHAVEN, 20 May 1946.

49 RG 226, Entry 183, Box 27, Folder 157; London 165: SAFEHAVEN No. 413, "Financial Contraband, Stockholm, Enskilda Bank, Stockholm," 8 May 1946. See also Gerard Aalders and Cees Wiebes, The Secret Collaboration and Protection of the German War Industry by the Neutrals: The Case of Sweden (Amsterdam: Amsterdam University Press, 1996).

50 RG 226, Entry 116, Records of the OSS, Office of the Director, Microfilm Publication 1642, Reel 108. Circular Memorandum for All Strategic Services Officers and Chiefs from Acting D/SS (Acting Director of Strategic Services), 16 April 1945.

51 RG 226, Entry 183, Box 21, "Wehrli combine," n.d. The economic report was based on intelligence data to complement an audit of the Wehlibank books by the US firm Price, Waterhouse & Co., conducted under joint British and American auspices.

52 RG 226, Entry 116, Records of the OSS, Office of the Director, Microfilm Publication 1642, Reel 108. Memorandum: Donovan from Neumann via Langer, "German Economic Penetration Abroad," 2 June 1945.

53 RG 226, entry 116, Records of the OSS, Office of the Director, Microfilm Publication 1642, Reel 108. Memorandum: Donovan from George, "RE Rebuilding of German Economic, Political, and Military Power Positions Abroad by the Evasion of Allied Controls over the Exit of German Assets and Personnel from Germany (SAFEHAVEN)," n.d., but context places it in April-June 1945.

54 Topics were sometimes similar: in June 1946, Bern was tasked to report on the Russian interests of the Swiss-owned Oerlikon Company, earlier a target of SAFEHAVEN reporting because of its connections with Germany. SSU Washington #1119, 18 June 1946.

55 RG 226/Entry 134A, Box 9, Folder 26. Paris #22534: Shepardson from Sherman, 20 July 1945.

56 RG 226/Entry 134A, Box 9, Folder 26. OSS Washington #23584: Horton for Sherman from 154, 28 July 1945.

57 RG 226/Entry 134A, Box 9, Folder 26. Lisbon #7687: Patina from Grant and Elton, 19 July 1945; OSS Washington #8817. JETSAM. Grant and Elton from Patina, 23 July 1945.

58 From Sweden, Spain, Portugal, Turkey, and Argentina, the Western Allies sought and obtained the restoration of gold and other assets looted by the Germans. These countries were, however, generally cooperative and the necessary agreements were more easily obtained.

59 Eizenstat Report, pp. xi-xii. To approximate 1997 gold values, multiply these figures by 9.74. But given the devastation of Europe and the wild variations in the standard of living from country to country and from day to day, there is no simple way to quantitatively measure the purchasing power of this amount of gold or its impact on the world economy as a whole.

60 In what apparently was a continuation of collection programs established in wartime, the ASA collected and read all Swiss diplomatic telegrams sent in from the summer of 1945 to the summer of 1946. The Swiss used a variant of the same ENIGMA cipher machine used by the European Axis in World War II. Their diplomatic traffic thus could be read by the means used to read German ENIGMA ciphers. This frequently took time, however, and it is not clear that these messages were read in time to be useful to the Allied negotiators.

61 Eizenstat Report, pp. 68-69.

62 RG 226/Entry 134A, Box 9, Folder 26. SSU Washington #WASH 2083 (Bern) BRUCC from Magruder (14 March 1946); #WASH 2159: (Bern) BRUCC for Joyce from Magruder (19 March 1946).

63 RG 226/Entry 108A, Box 1, Folder 9. Walter S. Surrey, Esq.; Division of Economic Security Controls, Department of State from Chairman, Reporting Board SSU; 22 March 1946.

64 On 26 April, he cabled Bern, "The American methods of carrying on negotiations are strange and hardly comprehensible to us. You should tell the Allies that the Delegation has received final instructions without mentioning a figure or hinting at one in any way." Bern (Politique) from Washington (Swiss legation) #310 (26 April 1946) Army Security Agency Diplomatic Translations #H-23017 (29 March 1946), #H-231119 (25 April 1946), #H-231208 (26 April 1946), #H-231271 (25 April 1946), #H-232235 (12 April 1946), #H-234376 (15 April 1946).

65 Army Security Agency Diplomatic Translation #H-232244 (4 May 1946).

66 SSU Washington #WASH 2434: (Bern) BRUCC from Magruder, 27 March 1946.

67 RG 226/Entry 134A, Box 9, Folder 6. SSU Washington #WASH 2829: (Bern) BRUCC from War Department Strategic Services Unit, 10 April 1946.

68 RG 226/Entry 134A, Box 9, Folder 26. SSU Bern #438: War Department Strategic Services Unit from (Bern) BRUCC, 11 APRIL 1946.

69 On 25 March, SSU Washington cabled Bern, "State considers Bern 337...valuable and timely. Congratulations. Cable any further developments" (RG 226/Entry 134A/Box 9/Folder 26. SSU Washington #WASH 2352: (Bern) BRUCC from Magruder, 26 March 1946). "Bern 337," which apparently was sent between 14 and 21 March must have been the basis for the intelligence report that was provided to Walter Surrey at the State Department (RG 226/Entry 108A, Box 1, Folder 6. Walter S. Surrey, Esq.; Division of Economic Security controls, Department of State from Chairman, Reporting Board SSU; 22 March 1946). The original cable, however, has not yet been found in the Archives. We do not know whether further information was obtained from this source, but SSU Washington cabled Bern on 10 April, "Memo from Walter Surrey of State rates your original material re Stucki of utmost value," suggesting that some additional (as opposed to the "original") intelligence material was obtained later on (RG 226/Entry 134A, Box 9, Folder 26. SSU Washington #WASH 2829: (Bern) BRUCC from Quinn, 10 April 1946.

70 Army Security Agency Diplomatic Translation #H-234376 (15 April 1946).

71 Army Security Agency Diplomatic Translation #H232831 (25 April 1946).

72 Stucki went on to opine that perhaps some diplomatic correspondence "which went by ordinary airmail in spite of warnings, was opened by censorship...." Bern (Politique) from Washington (Swiss legation) #305 Army Security Agency diplomatic Translation #H232831 (25 April 1946).

73 RG 226/Entry 134A/Box 9/Folder 26. SSU Washington #WASH 3427: (Bern) BRUCC from War Department Strategic Services Unit, 30 April 1946.

74 Arthur L. Smith, Jr. Hitler's Gold: The Story of the Nazi War Loot (Oxford: Berg, 1996), p. 82.

75 Eizenstat Report, pp. 81-83.

76 The results were published in the Eizenstat Report. See above, fn. 2.

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An interesting excerpt from the aforementioned, is found immediately below:

"...The economic report was based on intelligence data to complement an audit of the Wehlibank books by the U.S. firm Price Waterhouse & Co., conducted under joint British and American auspices...."

Historical background information is interesting in-lieu of what can witness today. "Price Waterhouse & Co." (above) became "PriceWaterhouseCoopers", whose 'audit and accounting branch headquarters' (Nova Scotia, Canada) became "IBM BUSINESS SERVICES".

Submitted by,

Offshore Informant

[E-MAIL: OffshoreInformant@safe-mail.net]

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