|States Hide Trillions Of Dollars By Keeping Different Sets Of Books|
|by DR. AL OVERHOLT 6/29/98
Republished by Contact, Inc.
P. O. Box 27353
Las Vegas, Nevada 89126
From THE SPOTLIGHT, 6/12/1998: [quoting]
Trillions of dollars are controlled by the politicians and the bureaucrats in little-known county, state and federal "slush" funds in every state in the union and at the federal level. However, through book-keeping gimmicks, the truth about these massive funds (which actually and rightfully belong to the taxpayers) is being kept under wraps -- with the willing cooperation of the major media in this country. Yet citizens are being soaked with continuing tax hikes to finance day-to-day state operations even while these hidden slush funds are bringing vast profits to high-level international financial power brokers that benefit from controlling this huge slush fund.
That's the astounding discovery made by veteran commodity trading advisor and analyst Walter Burien who was a guest on the June 7 broadcast of The SPOTLIGHT's weekly call-in talk forum, Radio Free America, with host Tom Valentine. An edited transcript of the interview with Burien follows. Valentine's questions are in boldface. Burien's responses are in regular text.
You've made some astounding allegations, but these allegations are based on factual information that is actually available to the public if they know where to look and how to look. And you discovered what you did discover quite by accident and it's a remarkable story. Could you give us the background on how you came across this information?
The best way to approach this is to give a chronological accounting of how I became aware of what I call "the biggest game in town" (which goes on across the country).
Let's go back to 1989. I was living in New Jersey and Gov. Jim Florio got elected on a "no new taxes" platform. Yet, as soon as he got into office, there was a $2.8 billion tax increase, the largest in the state's history. That created the proverbial "(bleep) hitting the fan" and one of the local radio stations at that time, 101.5 FM, started doing some rabble-rousing with the public for their input on government waste and misspending and griping about the taxes.
On the first day I listened to a lot of people talking about examples of $5,000, $10,000, etc. The highest figure I heard was $85,000. I then pulled out the budget report and called the show and read out the billions of dollars that the state was dealing with and I pointed out that the highest figure I heard had been $85,000 although the budget was in the billions and if there was fraud and waste going on it was taking place on tens of hundreds of millions of dollars.
The radio show host challenged the listeners to start an organization to repeal the tax increase. Two days later 10 of us got together and I incorporated a group called "Hands Across New Jersey" and within about 14 days we had our first rally in Trenton and about 115,000 people converged on the city and just about shut the city down.
During the time of organizing that rally, I started taking a look over the budget revenue and finances of the state. Up until that point I thought I was a pretty sharp cracker and knew what was going on and I always figured that "the boys" were floating 5 to 10 percent of the revenue and not reporting it to the public. When I looked I found out I didn't have the foggiest clue.
The first thing I did was check the budget report and find the total cost of all services. (This was 1989's report.) They had $11 billion on budget, $6 billion off budget, a total service budget of $17 billion. I then checked the "net, available" on the budget report. That showed a net available of $24 billion, 648 million.
Then I asked the question which is the first question that the IRS asks in an audit: "What are the gross receipts?" I started adding that up and I came up with about $44 billion. I said, "Wait. How can the state have a service budget of about $17 billion, and showing a net available of $24.6 billion, yet I was counting about $44 billion brought in for the year in cash?" I figured those reports had to be available someplace.
And during that rally that followed, I knew about this $44 billion in cash receipts and the budget of $17 billion. I briefed the public on the difference between the budget and the gross receipts.
I had about 15 people come up to me and ask if I wasn't afraid of getting "blown away" saying this on the steps of the New Jersey state capitol building? I said, "No, but if I was one of the boys in a position of trust, I'd give myself about three days. But since I am not one of the boys in a situation of trust and confidence, they are going to start asking how in the heck I figured this out and asking whom I had been speaking to."
After the rally I said to myself that there was too much money not to be accounted for under one book. My father was personnel manager for the state treasury for about eight years and I had a pretty good knowledge of how to get around and through the different state departments.
The director of the budget, at that time, was on vacation until the following Tuesday. I found out the names of his two lowest-level assistants and I got the lowest one of them on the phone first and said, "I'm working on a report for Richard [the budget director] and I have to have it done by Tuesday I need all the figures on the autonomous agency accounts, interest accounts, investment accounts," and he says, "Oh, you want the comprehensive annual financial report." This was the first time I ever heard of that in my lifetime. I said, "Yeh, how can I get it?" He said, "Talk to Bill." who was the next assistant.
I called Bill, and said, "Hi, this is Walter Burien, I'm working on a report for Richard. I just talked to Jim and I need the comprehensive annual financial report."
I got the report that Friday. It showed liquid investment funds of $188 billion; common stock ownership of $70 billion; on loan to public and private corporations, $10 billion; and insurance company equity participation, $14 billion. This blew me away.
And this was only the state of New Jersey. I realized that day, right on the spot, what was going on. I also learned the definition of syndicated organized crime that day.
Anything that was a cost and an expense on service to the public -- the traditional side of the service budget, such as the Department of Transportation, health and welfare, etc. -- they left under the budget report and the public footed 100 percent of the bill for 100 percent of the services under the budget report. That was $17 billion.
Anything that was a profit center-generated revenue (the Port Authority for New Jersey, the New Jersey Turnpike, an investment account, etc.), or which had the potential for generating revenue was totally restricted by statute for no tie or inclusion whatsoever with the budget report. This is what was disclosed on the comprehensive annual financial report.
My question to myself, as I said, was that question that the IRS asks: What are the gross cash receipts? Here's an example of what I discovered: The 1989 figure in the comprehensive annual financial report on page 174, under the Waste Water Treatment Trust Fund, shows a total of all agency funds. On the "cash" line item they have the beginning balance and ending balance. The beginning balance was $25 billion, 899 million. Their ending balance was $6 billion, 894 million.
Here is the important part. It shows the additions and deduction, which is the amount of the total cash receipts brought in for the year from all state agencies and departments. The service budget was $17 billion. Are you ready for how much cash they brought in for the year? It was $86,775,380,712. That was for 69 autonomous agencies, the budgetary bases, investment accounts, etc.
I immediately went down to radio station 101.5 and gave it to them. For 45 minutes they read out the bottom line figures. I suggested to the listeners this example: suppose you reported your beginning checking account balance at $5,000 at the beginning of the year and you put $40 million through your checking account and you ended your balance at $3,500. That's the game going on here.
On the comprehensive annual financial report you looked through the spread sheet on total revenues and it listed approximately $136 billion, but if you look through the notes on the report, you find another additional $60 billion. On the common stock ownership it listed $32 billion. But I saw little asterisks that referred to a note and on that note it stated that the accounting and balance was determined on purchase price, not on market value.
In other words, if they bought AT&T stock 30 years ago at $1.25 a share and it's worth $3,000 a share now, they still report it at $1.25 a share. I checked my contacts to find out the true market value and it equated to $70 billion.
And these guys raised the taxes on the people of the state of New Jersey when they could have paid them back twice the taxes and still had money left over.
If they had combined the entire operations owned by the state government as a whole, they could have dropped all taxation in the state of New Jersey and if they streamlined everything they could have had a dividend check for every person in the state.
No wonder this is dangerous talk.
I started investigating further. Everyone is familiar with the New Jersey state turnpike and the Garden State Parkway. When they wanted to build those authorities they had to put out a measure for voting upon by the public. They said that they were going to put out a $7.5 billion bond issuance and that they were going to build those authorities and that they would be toll roads until the bonds were paid off.
And until the bonds were paid off, the bondholders would be the owners of that authority. Once the bonds were paid off, the authorities would revert back into the budgetary basis as budgetary groups. They were also restricted at operating for a profit. The public said okay and they built these authorities.
Then what they did was this: say they made a $400 million profit for the year and the actual payment on the bonds was $100 million. They made the $100 million payment for the bonds and took the $300 million and put it into a bond surety escrow account for future liability payments. They wrote it off as a line-item payment and did not declare it as an asset.
In 1990 when I checked on the total bond liability for the turnpike, it was $14.5 billion. Guess how much was in the bond surety escrow accounts? Thirty-eight billion. Enough to pay the bonds off three times over.
The same game was being played with all the autonomous agencies and the bottom line is that they are dealing with hundreds of billions of dollars and the control of those billions is what's the motivating factor, not the benefit of the public. The public is kept in the dark, looking off in left field as they are doing business as usual in right field.
So this is going on in other states, too?
Well, after I found out about New Jersey, it dawned on me what the composite total for all states and the federal government if this was happening all over. I started looking and what I saw floored me.
Take the composite total of city, county, state and federal of common stock ownership. Across the country it comes out to in excess of $32 trillion. That's 53 percent of the entire open interest of all stocks issued. Take California. This state has in excess of $2.5 trillion in common stock ownership.
So we really don't have a national debt then?
They can't pay it because they (say they) are restricted by statutes.
I understand that and it's amazing.
To explain what's going on I can provide several examples. Everyone has heard of Al Capone, the Chicago gangster. He ran a lot of legitimate businesses including newspaper stands, flower shops, etc. He kept one set of books for those legitimate businesses. Let's equate those to the budget report.
For the other businesses (book-making, prostitution, drugs) he ran through those newspaper stands and flower shops, he kept a second set of books that he didn't want anyone knowing about.
On the comprehensive annual financial report (for the state of New Jersey), the vast majority of revenue groups that the government doesn't want the public digging into is on the comprehensive annual financial report. It's like when you hear about the $5 trillion national debt under the federal budget; but you don't hear about the $30-plus trillion in liquid investment funds.
Is this information generally available to the public?
If you know to ask for it. The state auditor generals or the state treasurers offices of the states put the reports out. When I saw these figures 10 years ago, I asked how the public couldn't know about this. But I found that every elected official I spoke to had never heard of the comprehensive annual financial report. The one who did know was Sen. Bill Bradley (D-N.J.).
I showed him the report at a public gathering and he said, "You've got that?" And he said, "See you later." He didn't want to get his picture taken with that report. But other politicians denied knowing about the report.
In Arizona when I got the report for that state, there was a breakfast of county supervisors and former Gov. Evan Mecham was there. I asked him whether he knew of a report that consolidates all of the financial material. He said, "No." I asked him if he had ever heard of the comprehensive annual financial report and he said, "No." Then I produced it and said, "Here it is. This is the same report you signed when you were in office. Here's your signature on the front page." And he said, "Oh I thought you were talking about another year." I said, "Uh-huh."
Do you think he knew what was in the report when he signed it or did some faceless bureaucrat give him the front page to sign and then take it away?
You'll have to give him some sodium pentathol to find that out. Here' s another example: every person should imagine himself the state government of New Jersey. Your salary is $50,000 year and your budget for operating your house is $3,500 per year. You could audit your budget 100 times over. If you spent $4,000 this year on your house and you only had $3,500 allocated, you could go to your neighbor and ask for $500. So what's happened is that structure has been created to allow the gross receipts to be totally hidden from the reality of what's reported on the budget report.
I want to congratulate The SPOTLIGHT and Radio Free America because you are the first news medium to disclose the name of the comprehensive annual financial report to the public.
There is a total news blackout on mentioning of the report. Back in New Jersey I was dealing with hundreds of reporters, but not one newspaper mentioned it. I said: "That's a lot of control." People asked me, "If it's this big, how come we don't hear about it?"
Gov. James Florio appointed 16 editors and reporters to directorships in state government. The guy they pitted against me was Harvey Fisher who was one of the Bergen Record reporters prior to the Florio campaign and he was appointed assistant treasurer of the state of New Jersey (even though he had no formal financial background whatsoever). I thought about that.
As a reporter he was making $35,000 per year. As assistant treasurer he was making $65,000 a year. I checked his expense account. He had a carte blanche expense account of $125,000 with basically discretionary funds.
Now I knew that there was a data search department in the state run for four individuals which tied all agencies and departments together. I called up the department and asked for a data search on all key-level directorships and supervisory positions for all agencies, whether they be budgetary or from the autonomous agencies, and they came up with some 3,500 names. Close to 1,800 of these people were former editors or reporters. And if you do a comparable search in other states you'll find that the more money involved you'll find a higher amount of editors and reporters. That's a phenomenal amount of control.
So the media is part of the cover-up here?
Yes, and the comprehensive annual financial reports are sent to all of the major newspapers and editors but they refuse to make one mention of it. It's a cooperative effort going on. Once you know how much money is out there and where it's coming from and where it's going, the game is over. When we went on the air on radio 101.5, a few days later they were being threatened with having their broadcasting license pulled and they almost had to shut down.
People should contact their local newspapers and make a simple mention of the comprehensive annual financial report for their states and ask the papers to show their readers the total revenue shown in that report, whether restricted by statute or the like. It would be interesting to find out how many newspapers will even make simple mention of this.
Always remember the key difference between the budgetary basis and the restricted-by-statute groups. The public has been played as a sap.
In New Jersey alone there's maybe $80 or $90 billion that's there. Somebody is handling all of that money in New Jersey and elsewhere and they can use it to make a bundle.
That's right. Here's an example: say that you're a comptroller in California and you're controlling $700 billion. Say I'm the chairman of Shearson Lehman Hutton banking group. You have $140 billion with my firm. That will generate about $10 billion a year for my firm.
You call me up and say: "My brother needs a $49 million unsecured loan in Argentina for a sugar cane development energy project," and I'd have a loosely-connected subsidiary company make the loan. Your brother defaults on the loan and walks away with $49 million and the company writes it off. The payola that takes place here is unfathomable. Any politician anywhere can be paid off anywhere around the world.
Through these investment funds, government has been taking over "private" insurance and medical firms, etc., and the public has no idea that these firms are [effectively] owned by the government. Any corporation can be targeted by these investment funds and totally taken over. Period. And they have been.
As I mentioned, 53 percent of all outstanding stocks are owned by government. The public is looking in left field and all the trillions are in right field. This structure is a virus and it has nothing to do with the interests of the public. It all has to do with financial conquest and the public has to be as naive as possible. It's not something that has happened this year or last year. And the press is culpable in all of this.
What do people need to do to bring this out into the open?
People need to start asking questions about their various state comprehensive annual financial reports and demanding complete accountability by the politicians. I believe that this is the jugular vein of the corruption in this country. If all of this is disclosed openly, the game comes to an end. People need to start focusing on "gross receipts, total investments, total trust funds," whether restricted by statute or the like. You can see this in the comprehensive annual financial reports. [End quoting]
WOW!! And thank you Tom Valentine for having the guts and courage to put this on your radio talk-show.
Are we just going to sit on this or are millions of us going to rise up and confront these hoodlums? Do you realize what this amount of funds can accomplish for this nation? -- and it all belongs to us!!
Please get on the phones, faxes, Internet, etc. and spread this word. God gives us the tools or instruments, but it is up to us to use them. He said the truth will come out in the end-times -- once more.
It's YOUR money, YOUR property, YOUR future, YOUR country and YOUR employees. What are YOU going to do about it?
Walter J. Burien, Jr.
P.O. Box 11444
Prescott, AZ 86304
Voice 1(520) 717-1994
Copyright © 1997-99 TLH/FWO All rights reserved.
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