Catherine Austin Fitts

Catherine Austin Fitts

Type	Person
Also known as	Fitts
On the Timeline	4 events, 1999–2017

Catherine Austin Fitts (born 24 December 1950) is an American investment banker and former public official. She was the first woman managing director of the Wall Street firm Dillon, Read & Co., and served as Assistant Secretary of Housing and Urban Development (HUD) for Housing under President George H. W. Bush.^[4] She later founded Hamilton Securities and the firm Solari.^[4][5] She is known for her campaign about "missing money" in U.S. federal accounts, culminating in a 2017 study with the economist Mark Skidmore that reported $21 trillion in "unsupported adjustments" at the Defense Department and HUD (see the $21 trillion unsupported adjustments).^[4][7] In UFO circles she is known for linking that money to a hidden "clandestine military R&D" economy, part of which she believes is UFO-related. She is also known for her account of a 1999 Arlington Institute board meeting at which, she says, a Navy client sought a white paper on a world in which aliens were known to exist (see the Arlington Institute board meeting of 1999).^[9] The accounting problems she points to are real and documented, but her link between them and UFO programs is speculative and disputed by others present.^[7][8][9]

Early life and Wall Street

Fitts was born in Philadelphia. She took an associate degree from Bennett College in 1970 and a history BA from the University of Pennsylvania in 1974. After working briefly as a bartender, she was encouraged by a customer, the Wharton School's director of admissions, to apply to business school, and earned her Wharton MBA in 1978.^[4] At Dillon, Read & Co., in 1982, she organised a novel municipal bond sale of several billion dollars to revitalise the New York subway, the first time a public agency had sold bonds backed by rider fares. In 1986 she became the first woman promoted to managing director in the bank's 156-year history. BusinessWeek called her "Wall Street's foremost champion" of public utilities bonds.^[4]

HUD

Fitts worked on George H. W. Bush's 1988 campaign and was appointed Assistant Secretary for Housing, also known as Federal Housing Commissioner. Her brief was to repair the department's reputation after the savings and loan crisis.^[4][5] She found that HUD had a $300 billion mortgage-insurance portfolio but only one certified actuary. Among her reforms was a plan to sell foreclosed homes to non-profits at a 50 percent discount for use as rentals.^[4] She resigned in 1990 amid reports, denied by Secretary Jack Kemp, that her relationship with him had soured. Neal Peirce wrote that she had been "widely regarded as the best manager he brought in". Fitts says she was then offered a seat on the Federal Reserve Board but declined.^[4]

Hamilton Securities and the investigation

Fitts founded Hamilton Securities, an employee-owned brokerage, which she ran until 1998. In 1993 it won a contract to manage HUD's $500 billion portfolio. There Fitts devised "Community Wizard", location-based mortgage-resale software credited with raising several hundred million dollars for the department.^[4] In 1997 HUD cancelled the contract over alleged accounting errors. Investigations followed by HUD's Inspector General, the FBI and the SEC, and a rival contractor alleged insider dealing and bid-rigging.^[4] Fitts says the investigation was retribution, because the software's data showed that some federally guaranteed mortgage securities may have been fraudulently issued.^[4] In her own writing she described how the government withheld her company's contractually owed money by "common law offset", forcing it to sue. She said the Justice Department had kept any case from trial for more than five years.^[5] In 2002 the investigation was closed, and investigators said they had found no evidence of wrongdoing by Fitts or Hamilton.^[4]

"Missing money" and the $21 trillion study

In columns such as "Mapping the Real Deal" (2003), Fitts described what she called the "American Tapeworm". In her account:^[5]

• Federal deficits were being financed through warfare, borrowing and cuts while trillions vanished from federal accounts.
• That money included "officially documented $3.3 trillion in 'undocumentable adjustments'" at the Defense Department and $59 billion at HUD.
• A senior congressional aide told her in 2000 that HUD was being run "as a criminal enterprise", and she argued that this implicated Treasury, Justice, the New York Fed and contractors.
• Her remedy, the "Solari Solution", was for communities to recover stolen federal funds through local "offsets".

In a 2004 study in World Affairs she claimed to find "evidence that a very large proportion of the nation's wealth is being illegally diverted… into secret, unaccountable channels and programmes". She listed among them "covert operations and subversions abroad and clandestine military R&D at home".^[4] She has argued that HUD serves partly as a fundraising mechanism for military and intelligence agencies through Ginnie Mae securities. In her view it overpays to rehabilitate public housing and funnels the difference into unaudited "black budget" programs.^[4]

In 2017 Mark Skidmore of Michigan State University heard Fitts cite a report showing $6.5 trillion in unsupported adjustments for the Army in fiscal 2015, 54 times its $122 billion budget. He assumed she meant billion, checked, and found the figure was correct.^[7] He and Fitts then worked together. Over the summer two graduate students searched Inspector General documents back to 1998 and found a total of $21 trillion in undocumented adjustments at Defense and HUD over 1998–2015.^[7][4] At one point the Inspector General's office disabled the links to the key documents, but the team had already downloaded them.^[7] Days after Skidmore discussed the findings in December 2017, the Defense Department announced its first department-wide independent audit. It did not say what prompted it.^[7][9] Skidmore and Laurence Kotlikoff wrote in Forbes that the "gargantuan nature" of the undocumented spending "should be a great concern to all taxpayers".^[7] Earlier reporting had already exposed the Pentagon's use of accounting "plugs", fake figures entered to balance the books. One Defense Finance and Accounting Service office in Columbus, Ohio, made at least $1.59 trillion in errors with $538 billion in plugs.^[8] In 2015 Navy Secretary Ray Mabus said the Navy could not account for all its spending because of the Pentagon's finance agency.^[6] The MSU release describes the totals both as "unauthorized spending" and as "undocumented adjustments", that is, accounting entries lacking supporting documentation.^[7] The earlier version of this article said her claims "draw on real accounting problems", and that is confirmed by these reports.

UFO connections

Fitts sat on the advisory board of the Arlington Institute, a defence-industry non-profit founded by John L. Petersen, from June 1998 to June 2000.^[4] The institute grew out of a national security study group Petersen co-led in 1986–87. Petersen advised senior defence officials, including the Under Secretary of the Navy and the Chief of Naval Operations, and the institute's board included the former CIA director James Woolsey.^[1] A 1994 Stargate remote-viewing document records that Petersen, a retired Army colonel once assigned to Army intelligence at Fort Meade, had told the Under Secretary of the Navy of the program's "probable existence" during a briefing on non-lethal warfare. That led to a request for a briefing on the program (see the Stargate Project).^[3] Woolsey has since spoken about UFOs in interviews with The Black Vault.^[2]

According to Michael Shellenberger's UAP timeline, minutes of an Arlington Institute board meeting on 3 December 1999 record that the group "had been approached" by a client to publish a white paper on life beyond Earth. Those present included Woolsey, Fitts and several media and financial executives.^[9] Fitts later said:^[9]

• The client. It was the Under Secretary of the Navy, who wanted to help the Navy "adjust their operations for a world in which it was commonly known that aliens exist and live among us".
• Alien bodies. Petersen had told her she could see alien bodies.
• The money. Her time at HUD and as a HUD contractor had exposed her to signs of slush funds connected to the Federal Housing Administration and HUD. Some of the illegally diverted money, she believes, went to clandestine military R&D, some of it UFO-related.

Petersen denied Fitts's allegations, and the board member Joe Firmage did not recall the meeting described in the minutes.^[9] The timeline notes links between Petersen, Firmage, Hal Puthoff and Robert Bigelow, whom Jacques Vallée connected to a series of futurist talks on UFOs in 1999. It considers the meeting significant because former officials were allegedly discussing how to shape public perception of UFOs with media executives present (see Catherine Austin Fitts and the missing money).^[9] The earlier version of this article described the link between missing money and UFO programs as speculative. The sources read here contain no documentary evidence connecting the unsupported adjustments to UFO work.^[7][9]

Politics and later activities

As of 2003 Fitts was a founding member of UnAnsweredQuestions.org and on the advisory board of Sanders Research Associates.^[5] She has donated to Democrats Cynthia McKinney and Marcy Kaptur and Republicans Rand Paul and Thomas Massie. She supported Donald Trump in 2016, and he retweeted one of her posts in December 2020.^[4] According to the Washington Post, during the COVID-19 pandemic she worked with Robert F. Kennedy Jr. "to promote unfounded claims about the pandemic and to oppose lockdown measures", and appeared at length in the 2020 film Planet Lockdown, which the Post said parroted "false claims about the pandemic".^[4] In alternative media she has alleged that "21 trillion dollars have been stolen" and that the 2020 and earlier U.S. elections involved "massive fraud".^[4]

On the UAP Timeline

• Arlington Institute board meeting (1999) (3 December 1999) — A defense think tank with former CIA chief James Woolsey holds a board meeting.
• Catherine Austin Fitts and the missing money (June 2004) — Catherine Austin Fitts writes that huge sums are being diverted into secret programs.
• Pentagon accounting plugs (18 November 2013) — A defense accountant says she was told to enter false numbers in Navy budgets.
• $21 trillion unsupported adjustments (11 December 2017) — Catherine Austin Fitts and an economist report $21 trillion in unsupported government spending.

References

Facts in this article are drawn in part from the Wikipedia article “Catherine Austin Fitts”, available under the CC BY-SA 4.0 licence.