2001, and "the day before 9/11 Donald Rumsfeld gave a press conference at the Department of Defense...[announcing] that the Department of Defense was missing $2.3 trillion..."
Fitts was told that one of the offices at the Pentagon that was blown up was the location for the office of Naval Intelligence Research Group, which was investigating the missing money.
"The rest is history," Fitts says. "The Patriot Act had passed, and then the DOD got huge appropriations and nobody really cared about the missing money."
Then, in 2015, the DOD financials came out and "it was the greatest missing money in one year [ever]. The DOD was missing $6.5 trillion in a year..."
At that point, Fitts says, Dr. Mark Skidmore, who was a professor and expert in budgeting at Michigan State University, thought she "must be wrong" because "the Department of Defense can't be missing 10-plus times its total budget in a year." Lo and behold, when he investigated the DOD's financials, he found that "actually, [she] was right."
Fitts subsequently asked that Skidmore have his students do a complete survey "of all the financial statements in all the years from fiscal 1997 to 2015."
He and his students got the total missing money to $21 trillion. They subsequently published a report in 2017, at which point Skidmore and Fitts discovered that "the amount of money missing from the U.S. Treasury was the same amount as the total debt of the United States."
Cut to 2018, and Fitts notes that during the theatrical hearings held during the appointment of Brett Kavanaugh to the U.S. Supreme Court, Congress—including both the Senate and the House, Republicans and Democrats—along with the Trump White House "got together and issued a policy called Federal Accounting Standards Advisory Board Statement 56." (Fitts refers to it as FASAB 56 or, phonetically speaking, 'Faz-B 56.')
"[W]hat FASAB 56 says, very short and simple, is basically the government can keep secret books as a matter of administrative policy, thus refusing to obey all the financial management rules and regulations and laws, including the constitutional provisions for disclosure of financial operations," Fitts says. She adds that "they extended it, along with the classification laws, to private companies and banks doing business with the federal government, which means when you look at the U.S. securities market, the large cap section of the U.S. market...most of the disclosure is meaningless. You have no idea how the money works at many of these companies and the government because they're so intertwined."
Interestingly, the investment banker adds that "the COVID-19 operation could never have happened without that [FASAB 56], because it put the Department of Defense, and [other federal government] agencies in a position to, essentially, access an unlimited amount of secret money."
Fitts says somebody once told her that FASAB 56 is "a wet dream" as it allows for "secret money for secret operations."
"I think it was one month after FASAB 56 passed that suddenly Moderna magically raised $500 million. Quite a coincidence," Fitts adds.
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