By Alex Constantine
From "Terror on the Right" -- UPDATED
This is the eleventh chapter in my recently-released e-book "Terror on the Right." The research was commissioned by a ranking investment website, based in Los Angeles, in December 2011. In it, I predicted that Armour REIT, a real estate investment trust with CIA ties, would suffer significant financial losses down the road. The story is now appended with a recent update, and my prediction was correct. Dividends issued by the firm -- described in the update as "every income investor's worst nightmare" -- HAVE taken a nosedive, contrary to rosy forecasts offered up by "mainstream" investment media over the past two years. -- AC In December 2011, a little bird informed us that Armour Residential Real Estate Investment Trust (ARR), a broker of mortgage-backed securities, “has routinely raised fresh capital by selling stock to new investors and then turned around and spent considerable sums on generous dividends for old and new investors alike. To some, this strategy actually looks like a glorified Ponzi scheme that could prove unsustainable (with the dividend cut or even cancelled) in the end. Meanwhile, Armour Chairman Dan Staton also doubles as chairman of another company – known as FriendFinder Networks (AC note: NASDAQ: FFN, is the proprietor of an array of porn sites, including Penthouse and bondage.com. FNN board chairman Marc Bell is also an Armour director) – that has already seen its own stock collapse, plummeting from $10 to just 60 cents a share, this year. Could Armour face a looming disaster as well?” ARR has been on the slide for the past two years. In 2010, the firm paid quarterly dividends. In Jan. 2011, ARR began monthly payouts, and the dividend was dropped by two thirds to 12 cents, 11 cents in the third quarter. The firm is increasingly cash strapped, and its debt/eguity ratio has been on the rise for the past five years. Odds are that Armour will inevitably fold under its own internal stresses, but not solely because the firm is engaged in a glorified Ponzi scheme, or even because it peddles the same mortgage-backed securities that brought about the current recession.
“We Rob Banks”
ARR is following in the footsteps of the S&Ls in the ‘80s -- many were looted by the CIA and Mafia, as reported by Pizzo and Fricker, etal. in Inside Job, a book the corporate media did not find newsworthy -- and Fannie Mae in the ‘90s. The presence of Nixon-aide/Marriott exec Fred Malek on Fannie Mae’s auditing committee was a glaring red flag; the fall of the mortgage giant was not the result of poor judgment or incompetence, but deliberate as any Hole-in-the-Wall Gang bank heist. For confirmation that a Ponzi scheme or corporate looting is afoot, one has to look no further than the audit committee -- a select group of directors who fail miserably at spotting irregularities. These dancing partners are paid huge sums in inflated director salaries to look the other way. (In the past, Chicago's Arthur Andersen LLP, formerly on of the "Big Fice" accounting firms, performed this invaluable service, but in 2002 lost its license to practice when it's collaborative role in investment fraud became obvious in the case of Enron.) Three board members make up the audit committee at Armour Residential REIT, and their resumes are a travel guide to one of the darkest recesses of the national security underground:
- Stewart J. Paperin
- John “Jack” P. Hollihan, III
- Robert C. Hain
Dr. Stewart J. Paperin: CEO of Stephen Norris & Co. Capital Partners, also known as Steve Norris Partners, a private equity firm specializing in leveraged buyouts. may have a low name recognition score, but Stephen Norris was a co-founder of the Carlyle Group, the notorious investor in military contractors, haunt of the CIA’s Frank Carlucci and William Barr, George Soros, James Baker III, GHW Bush, the aforementioned Fred Malek, NewsCorp director Saudi Prince Alwaleed bin Talal (Norris’ close friend and investment partner in Euro Disney, Four Seasons Hotel and Citigroup), and a phalanx of other geopolitical heavyweights with intelligence and DoD ties. Norris is also a former member of the Federal Retirement Thrift Investment Board, appointed by President GHW Bush in 1990. From Dr. Paperin’s bio at the the Armour website: “In addition to his role with Stephen Norris & Co., Mr. Paperin has been a Director of Enterprise Acquisition Corp. since July 9, 2007 [Enterprise merged with ARR in 2009], and Executive Vice President of the Soros Foundation since 1996. From 1996 to July 2005, he was a Senior Advisor and Portfolio Manager for Soros Fund Management LLC. He has been Consultant to Soros Fund Management LLC since July 2005.” George Soros" alt="" src="http://www.constantinereport.com/wp-content/uploads/2012/03/George-Soros1-300x300.jpg" width="168" height="168" />George Soros, Dr. Paperin’s boss and an early Carlyle Group financier, is misunderstood by both the left and the right. His reputation as an open society philanthropist/progressive Hitlerite are cover stories. Beneath the veil of left-wing causes and media distractions, Covert Action Quarterly notes, Soros “thrusts himself upon world statesmen and they respond. He has been close to Henry Kissinger, Vaclav Havel and Poland's General Wojciech Jaruzelski.” When anti-globalization demonstrators marched in the frozen rain at the World Economic Forum in 2002, Soros was inside delivering an address: “As the police forced protesters into metal cages on Park Avenue, Soros was extolling the virtues of the ‘Open Society’ and joined Zbigniew Brzezinski, Samuel Huntington, Francis Fukuyama and others.” Tellingly, one of the Soros foundations “runs CIA-created Radio Free Europe/Radio Liberty jointly with the U.S. and RFE/RL.” Soros is a CIA collaborator, and the Soros Foundation is a front. One can only conclude that Dr. Paperin of the ARR audit committee, the right arm of George Soros, is also, without question, a CIA collaborator if not a full-fledged asset. Dr. Paperin’s bio continues: “ … He was Financial Officer of Pepsico Corporation from 1980 to 1985 …” To the national security elite born. Pepsico: The soft drink bottler, journalist Alfred McCoy reported decades ago in The Politics of Heroin in Southeast Asia, operated an opium refinery in Laos for the CIA during the Vietnam War period – with the lobbying assistance of Richard Nixon, no less. Ray Hunt, the son of domestic fascist H.L, Hunt, also sits on the Pepsico board. Pepsico was a driving force in the overthrow of Salvador Allendé and rise of Operation Condor. Reporter Greg Palast has noted in the London Observer that the coup plot "against Chile’s President-elect Salvador Allende, using CIA sub-machine guns and ammo, was the direct result of a plea for action a month earlier by Donald Kendall, chairman of PepsiCo, in two telephone calls to the company’s former lawyer, President Richard Nixon. Kendall arranged for the owner of the company’s Chilean bottling operation to meet National Security Adviser Henry Kissinger on September 15. Hours later, Nixon called in his CIA chief, Richard Helms, and, according to Helms’s handwritten notes, ordered the CIA to prevent Allende’s inauguration." John “Jack” P. Hollihan and Robert C. Hain: The other “watchdogs” on ARR’s audit committee. Jack Hollihan is chairman of Litchfield Capital Holdings (ARR co-chair Scott J. Ulm was CEO of Litchfield from 2005 to 2009), recently gobbled up by Gramercy Capital, a trustee of the American Financial Realty Trust. Jack Hollihan’s career began in the 1970s as an attorney at Donovan Leisure Newton & Irvine. Donovan, Leisure was founded in 1929 by William J. “Wild Bill” Donovan, widely recognized as “the father of the CIA.” Donovan formed the Office of Strategic Services (OSS) in 1942 to engage in spying and sabotage in Europe and Asia during WW II. Donovan himself hailed from Wall Street, and so did many of the operatives who served under his command. In 1947, when Donovan’s OSS was restructured and renamed the Central Intelligence Agency under the direction of his protégé, Allen Dulles, Wall Street continued to serve as a teeming recruitment pool. Goldman Sachs CEO Lloyd Blankfein started out at Donovan Leisure. The list of notable alumni also includes CIA Director William Colby, former SEC chairman Roderick M. Hills, and RCA executive and Gulf Oil Director Samuel Murphy, Jr. Before the firm folded in 1998, Donovan Leisure represented some of the most powerful CEOs and corporations in the country, including Walt Disney, General Electric, Kodak, Mobil Oil, American Cyanamid and American Home Products.
As noted, Hollihan went on to chair Litchfield Capital Management, a firm that recalls the name Josh Stampfli, who left Litchfield in 1999, joined Gale Technologies, an online brokerage that marketed Stampfli’s Liquidity Engine technology, incorporating AI to radically expedite NASDAQ trade stocks at the rate of 300,000 transactions per day. When Gale went belly up in the 2000-2002 market decline, Stampfli was hired by Bernie Madoff, the big-ticket Ponzi swindler. It was an enduring relationship. On October 27, 2007, Madoff addressed a colloquium at New York’s Philoctetes Center on the future of the stock market. Beside him sat technological wunderkind Josh Stampfli, director of Madoff’s automated market division, creator of the Liquidity Engine. Together, they duped investors by claiming that the technology automated BLM Investment Securities LLC non-existent stock trades.
According to Madoff, Josh Stampfli conceived "the trading logic to manage position risk and handle the order flow inherent to the firm’s business of providing liquidity to its customers.”In 2010, after the fall of Madoff, Stampfli was hired by Credit Suisse to direct its Advanced Execution Services (AES) division, a leading marketer of electronic trading tools.
Jack Hollihan’s bio boasts that he is “head of Global Project Finance … for Morgan Stanley International,” an investor in solar, wind and other emergent green technologies. The CIA wasn’t far away. In fact, the executive director is GPF is Loren Ambinder, an alumni of GE Finance and Millbank, Tweed, Hadley & McCloy LLP – another firm on intimate terms with Langley. Millbank Tweed’s website notes, “since the office opened its doors in 1980, our partners have included federal cabinet-level secretaries and heads of the CIA and FBI, and others who have served in significant government posts.” Former DCI’s John J. McCloy and William Webster both hailed from Millbank Tweed. Robert C. Hain, the third ARR director on the auditing committee, is a Hollihan partner at City Financial Investment Company Limited, and serves as chairman. Hain, an ARR director since 2009, has had seats on the boards of financial services, business, arts, health and social services organizations at the national and local levels in Toronto, Zurich, Winnipeg, Halifax and London. His close association to Hollihan assures that he is an insider, and represents no threat to ARR’s financial shenanigans. But the audit committee isn’t the only “watchdog” at Armour with numerous of CIA ties. On September 30, 2011, ARR announced that it had appointed Deloitte & Touche LLP “as the Company's independent registered public accounting firm, replacing the Company's previous independent registered public accounting firm, EisnerAmper LLP.”
Augusto Pinochet’s Favorite Bank
A few of the symbiotic CIA connections lurking at Delloitte & Touche: * D&T was the liquidator of BCCI, the Agency’s key money laundering bank prior to its collapse. * Mention of D&T evokes the name A.B. “Buzzy” Krongard, former CIA executive director and Blackwater board member, appointed by George Tenet on March 16, 2001. Krongard, per his corporate bio, was general counsel at the firm. He was general counsel of Deloitte Haskins & Sells, prior to its combination with Touche Ross and Co. in 1989, “responsible for all legal matters affecting a multi-billion-dollar international professional partnership. Previously, he was Associate General Counsel and a Member of Peat Marwick Mitchell, and an associate at Cravath Swaine & Moore [another firm often associated with the CIA] in its New York and Paris offices, where he specialized in corporate finance, mergers and acquisitions, SEC matters, and European financings.” His Wiki entry notes that Krongard has been “a longtime consultant to DCIs.” * Deloitte & Touch did business with, and protected, Chilean dictator Augusto Pinochet (recalling the aforementioned role of Pepsico in his rise to power). On August 23, 2009, the UK’s Independent reported that D&T used simple ruses to disguise the fact that “the banks were dealing with the Pinochet family fortune. Accounts were opened which were designated by any combination of his Christian names or initials – Augusto Jose Ramon – and the surnames of his father, Pinochet, or his mother, Ugarte, and those of his wife, Lucia Hiriart Rodriguez. Some bankers preferred to call him Joe (from Jose), or APU (Augusto Pinochet Ugarte). The practice made the tracing of information about him as difficult as, say, looking for Griff Rhys Jones under ‘Jones.’” Richard Evans, a former representative of D&T, was alleged by the Brilac report “to have acted in connection with Ashburton Trust, which was created by Riggs and whose beneficiaries included Pinochet's five children, who each had a 20 per cent share. Mr Evans was also listed by Brilac as a director of Althorp Investment Trust, another repository for Pinochet family funds. It said he was active in promoting businesses in Argentina and was being investigated for money-laundering. Deloitte spokesman Ignacio Tena said: ‘Deloitte & Touche Corporate Services was contracted by Riggs Bank and Trust Company (Bahamas) to render administrative services for Riggs and some of its clients. Riggs did the due diligence, and gave all the information related to its clients, in accordance with the usual commercial practice and the Bahamas' law." ARR has no shortage of national security dancing partners. The CIA ties are numerous, and we haven’t detailed all of them here. If the fall of the go-go thrifts in the ‘80s have taught us anything, it is that CIA reprobates are busily engaged in corporate looting. ARR appears to be but one current example of an unknown number of targeted Wall Street firms. Buyer beware.
Don't Be Lured In By Armour Residential REIT's Monthly Dividends
2014 Expected Dividends Announcement
On December 18, Armour announced its fiscal year 2014 expected monthly cash dividend rate. As can be seen below, the company expects its 2014 monthly dividends to hold steady at $0.05 per share, unchanged from Q4 2013 levels. http://seekingalpha.com/article/1927741-dont-be-lured-in-by-armour-residential-reits-monthly-dividends