Collateral Damage: U.S. Covert Operations and the Terrorist Attacks on September 11, 2001

building 7From: Collateral Damage

On September 11, 2001 the definition of National Security changed for most U.S. citizens. For an entire postwar generation, “National Security” meant protection from nuclear attack. On that day, Americans redefined that threat. On September 11, 2001 three hijacked airliners hit three separate buildings with such precision and skill that many observers believe those flights were controlled by something other than the poorly trained hijackers in the cockpits.

This report contends that not only were the buildings targets, but that specific offices within each building were the designated targets. These offices unknowingly held information which if exposed, subsequently would expose a national security secret of unimaginable magnitude. Protecting that secret was the motivation for the September 11th attacks. This report is about that national security secret: its origins and impact. The intent of the report is to provide a context for understanding the events of September 11th rather than to define exactly what happened that day.

Initially, it is difficult to see a pattern to the destruction of September 11th other than the total destruction of the World Trade Center, a segment of the Pentagon, four commercial aircraft and the loss of 2,993 lives. However, if the perceived objective of the attack is re-defined from its commonly suggested ‘symbolic’ designation as either ‘a terrorist attack’ or a ‘new Pearl Harbor,’ and one begins by looking at it as purely a crime with specific objectives (as opposed to a political action), there is a compelling logic to the pattern of destruction. This article provides research into the early claims by Dick Eastman, Tom Flocco, V.K. Durham and Karl Schwarz that the September 11th attacks were meant as a cover-up for financial crimes being investigated by the Office of Naval Intelligence (ONI), whose offices in the Pentagon were destroyed on September 11th.1

After six years of research, this report presents corroborating evidence which supports their claims, and proposes a new rationale for the September 11th attacks. In doing so, many of the anomalies – or inconvenient facts surrounding this event – take on a meaning that is consistent with the claims of Eastman et al. The hypothesis of this report is: the attacks of September 11th were intended to cover-up the clearing of $240 billion dollars in securities covertly created in September 1991 to fund a covert economic war against the Soviet Union, during which ‘unknown’ western investors bought up much of the Soviet industry, with a focus on oil and gas. The attacks of September 11th also served to derail multiple Federal investigations away from crimes associated with the 1991 covert operation. In doing so, the attacks were justified under the cardinal rule of intelligence: “protect your resources” 2 and consistent with a modus operandi of sacrificing lives for a greater cause.

The case for detailed targeting of the attacks begins with analysis of the attack on the Pentagon. After one concludes that the targeting of the ONI office in the Pentagon was not random – and that information is presented later 3 – one then must ask: is it possible that the planes that hit the World Trade Center, and the bombs reported by various witnesses to have been set off inside the buildings 1, 6 and 7 and the basement of the Towers, were deliberately located to support the execution of a crime of mind-boggling proportions? In considering that question, a pattern emerges. For the crimes alleged by Eastman, Flocco, Durham and Schwarz to be successful, the vault in the basement of the World Trade Center, and its contents – less than a billion in gold, but hundreds of billions of dollars of government securities – had to be destroyed. A critical mass of brokers from the major government security brokerages in the Twin Towers had to be eliminated to create chaos in the government securities market.

A situation needed to be created wherein $240 billion dollars of covert securities could be electronically “cleared” without anyone asking questions – which happened when the Federal Reserve declared an emergency and invoked its “emergency powers.” that very afternoon.4 The ongoing Federal investigations into the crimes funded by those securities needed to be ended or disrupted by destroying evidence in Buildings 6, 7 and 1.5

Finally, one has to understand and demonstrate the inconceivable: that $240 billion in covert, and possibly illegal government funding could have been and were created in September of 1991. Filling in the last piece of the puzzle requires understanding 50 years of history of key financial organizations in the United States, understanding how U.S. Intelligence became a key source of their off-balance sheet accounts, and why this was sanctioned by every President since Truman.6 With that, a pattern of motivation is defined which allows government leaders and intelligence operatives to ‘rationalize’ a decision to cause the death 3,000 citizens.

World Trade Center

There were three major securities brokers in the World Trade Center: Cantor Fitzgerald, Eurobrokers and Garbon Inter Capital. On the morning of September 11, Flight 11 hit the North Tower at 8:46 right below the floors on which Cantor Fitzgerald was situated. Cantor Fitzgerald was the US largest securities dealer 7 in the US and arguably the primary target.8 Shortly after that, a massive explosion went off just under the FBI offices in the North Tower on the 23rd floor, and Garbon Inter Capital on the 25th floor, and in the basement of Tower 1 as well.

The explosion caused the 22nd through 25th floors above to collapse into an inferno.9 Fires were reported on the 22nd floor at 8:47.10 Shortly, thereafter, at 9:03, Flight 175 hit the South Tower right below the floors on which Euro Brokers was situated. (See Chart on Twin Tower Casualties Tab.) In all three cases, the explosive, fiery destruction consumed the offices in the several floors above. At 9:37 Flight 77 hit the Pentagon, targeting one of the few offices that had been moved in the newly remodeled section of the Pentagon: the Office of Naval Intelligence.11

Agents of the Office of Naval Intelligence had been investigating the financial transactions which in this report are linked to securities being managed by those security dealers in the World Trade Center that were targeted. 12 Fortunately, most other agencies had not yet been moved back into the targeted section of the Pentagon. 41% of the fatalities in the Twin Towers came from two companies that managed U.S. government securities: Cantor Fitzgerald and Eurobrokers.13 31% of the 125 fatalities in the Pentagon were from the Naval Command Center that housed the Office of Naval Intelligence. 39 of 40 Office of Naval Intelligence employees died. In the vaults beneath the World Trade Center Towers, any certificates for bonds were destroyed.14

Building 7 was evacuated somewhere between 9:00 and 9:30, depending on various claims. Fires and explosions spontaneously began at multiple locations inside the building prior to the collapse of either Tower. This observation is critical in that the official explanation for the fire is that they started when objects from the collapsing towers caused the fires to ignite. Witnesses leaving the building claim to have seen fires already starting, and dead bodies.15 The Building ultimately was destroyed in what many unofficial observers now believe was a controlled demolition. Building Seven housed the following agencies critical to investigation of financial crimes related to this history:

  • Export-Import Bank of the US Floor 6
  • US Secret Service Floors 9 & 10
  • Securities and Exchange Commission Floors 11,12 &13
  • Internal Revenue Service Floors 24 & 25
  • CIA Floor 25
  • Department of Defense Floor 25

“All the evidence that we stored at 7 World Trade, in all our cases, went down with the building," according to US Secret Service Special Agent David Curran -- the number three guy in that office. "We lost our network, we lost all our computers, we lost all the equipment that we use as Secret Service Agents. Everything from machine guns to our shotguns to our electronic equipment that we use." A lot of cases had to be closed as a result of losing that building.”16 (See note for additional references.)

In the midst of all this, Building 6 was destroyed by explosions from within, before being buried in the rubble of the Towers.17 FEMA, the agency charged with investigating the disaster, did not collect any data on this building.

Building 6 was home to the U.S. Customs agency and the El Dorado Task force, an interagency money-laundering group from 55 agencies created in 1992. The El Dorado Task force was responsible for coordinating all major money-laundering investigations in the U.S. In the immediate aftermath of September 11, these groups would be redirected to investigate terrorist financing.18 On the same day, the Securities and Exchange Commission declared a national emergency and for the first time in U.S. history invoked its emergency powers under Securities Exchange Act Section 12(k) and eased regulatory restrictions for clearing and settling security trades for the next 15 days.

These changes would allow an estimated $240 billion in covert government securities to be cleared upon maturity without the standard regulatory controls around identification of ownership.19 (The manner in which this was accomplished is explained later in the report.)

1     WTC Attack Destroyed Criminal Evidence , Dick Eastman,, October 26,      
    2001, see also Tom Flocco Interviews VK Durham – Financial Terrorism, Tom Flocco, November 26, 2006, ; see also Part 4: More reasons to not investigate 9-11, Karl W. B. Schwarz. (Schwarz’s      
    four part series is no longer at it’s original website, and can be located via search engine.)      
2     See Casey: The Lives and Secrets of William J. Casey From OSS to the CIA, Joseph E. Persico, Penguin      
    Books, 1990, p. 408.      
3     See page 3 of the report.      
4     See page 29 of the report to understand Federal Reserve actions.      
5     See page 28 of the report, listing the investigations.      
6     Brigadier General Erle Cocke’s deposition in US District Court, Southern District of New York, April 13, 2000,      
    April 13, 2000, (as provided in photostat version in Guyatt’s Project Hammer Files), is a critical starting point      
    for understanding the fund. In page 10 of the deposition, Cocke testifies he has reported to every President since      
    Truman. See In Gold Warriors: America’s Secret Recovery of Yamashita’s Gold, Sterling and Peggy Seagrave,      
    Verso, 2005, pp 96-99, the Seagraves explain the origins of the fund and how Secretary of War proposed the      
    trust to Roosevelt.      
7     see “Wall Street counts the cost,” September 13, 2001, BBC News: “Bond trader Cantor Fitzgerald -the largest      
    dealer in US government bonds -appears to have suffered the heaviest losses for a single firm….ICAP,      
    formerly Garban-Intercapital, the world's largest inter-dealer broker….” From “Intra-Day Behavior of the      
    Federal Funds Market’, Leonardo Bartolini, Svenja Gudell, Spence Hilton, Krista Schwarz, Federal Reserve      
    Bank of New York, May 2005 one finds: “Euro Brokers, one of the largest brokers of federal funds.”      
8     As the largest trader of US securities, over time, most of these securities would end up being held by Cantor, on      
    behalf of their owners. There are however, additional activities identified at Canto-Fitzgerald which suggests a      
    very strong connection to the US Intelligence world.      
    a. Cantor Fitzgerald has what is described in the press as a long-standing relationship with the Office of Naval      
    Intelligence, the one and only intelligence group that had offices remaining in the section of the Pentagon that      
    was struck by the attacking flight. see At The Pentagon, Quirky PowerPoint Carries Big Punch: In a World of      
    'Gap' States, Mr. Barnett Urges Generals To Split Forces in Two, Greg Jaffe, Staff Reporter Of The Wall      
    Street Journal, May 11, 2004      
    b. A group of Cantor Fitzgerald executives and traders had been the primary ‘financial/private sector’      
    participants in economic war games the year earlier, and in 1997 as well. These war games had been set up,      
    and participated in by various U.S. intelligence agencies and the Council on Foreign Relations, and run out of      
    the Cantor Fitzgerald offices. It is of notable coincidence that the few published notes on the games indicated      
    the primary trades analyzed during the games were trades in government securities, oil and gold. The      
    coincidence is rooted in the observation that it is these three types of assets that have become the focal point      
    of nearly any and all contrarian theories explaining the events of 9/11.See CFR Bankers Plan for Financial      
    Crash, Richard Freeman, Executive Intelligence Review, July 28, 2000; Thomas P.M. Barnett, the Pentagon's      
    New Map      
    c. At least seven of the top Cantor Fitzgerald executives were absent from the office at the time of the attack.      
    The President of Cantor Fitzgerald was taking his child to a first day of kindergarten, and six more executives      
    were scheduled for a fishing trip that day. The trip was reportedly cancelled due to inclement weather at 8:00      
    am, but every picture of the WTC that day shows cloudless skies. One of the three, Retired Admiral William      
    (a.k.a. Bud or Bill) Flanagan, is identified as a member of the Board of Directors of the Washington Group      
    International. Bill Flanagan’s role in this theory is of import because he seems to have 1) had a major role in      
    the ‘economic war games’ which may have been conducted from the Cantor offices simultaneously with the      
    other six simulations being executed that day, 2) had corporate responsibility for two firms that benefited      
    financially from the tragedies of 9/11 (Titan and CACI), and 3) had responsibility for a third firm that may      
    have played a role in the actual attack (Raytheon) see: Fort Collins, Colorado, May 26, 2005,  Flanagan would then become a VP of Titan Corp., the Defense contractor responsible for      
    those contractors charged in the Abu Ghraib torture cases.      
9     The issue of explosions within the WTC is contentious, although most of the literature focuses on Building 7.      
    Little focus is placed on the events in the North Tower, 22nd through 25th floors. The initial contention that the      
    FBI offices on the floor were destroyed by explosives to cover up evidence crimes by US officials were initially      
    made by Dick Eastman. [See WTC Attack Destroyed Criminal Evidence , Dick Eastman, , 10/26/2001.] He references a report by Peter Jennings about the discrete FBI      
    offices in the building, not listed on the formal occupant roster. The facts which support his theory are