#911Truth WTFact #15: Federal Reserve Economist Fired for Investigating Suspicious Cash Transfers
Did you miss the introduction to this year’s campaign?
William Bergman, a 14 year veteran at the Chicago Federal Reserve Bank, was fired in 2004 abruptly after asking too many questions, actually for asking just the right ones. He worked there from July 1990 until early 2004, serving as an economist for eight years before taking a senior analyst position. More on Bergman via Boiling Frogs:
Bill Bergman has 10 years of experience as a stock market analyst sandwiched around 13 years as an economist and financial markets policy analyst at the Federal Reserve Bank of Chicago. He earned an M.B.A. as well as an M.A. in Public Policy from the University of Chicago in 1990. His research work at the Fed included writing the Chicago Fed contribution to the Federal Reserve “beige book.” Some recent issue areas he has worked on include the implications national emergency and war powers pose for the Federal Reserve, money laundering, and wholesale payment system design, risk, performance and pricing.
In late 2003, he accepted an assignment to help create a tool for the purpose of formulating Fed policy on fighting money laundering. He was required to go through a more detailed background check since he’d be accessing confidential banking information. He says he was told that he was “part of the fight against terrorism” ironically. Part of Bergman’s work was to synthesize research into what could serve as a reference source for the Federal Reserve System on money laundering. This area wasn’t his specialty but he began to make progress quickly.
“There are people at the Federal Reserve that work specifically with money laundering. I was in the payment system risk area, so I had my toes in the water,” he said.
As part of that research, he came across a few strange things, namely an August 2001 letter described as “non-routine” from the Federal Reserve Board of Governors to the 12 regional banks. The letter made a point of reminding the regional banks that the review of Suspicious Activity Reports (SARs) assists in the identification of potential supervisory issues at banking organizations, provides information for determining compliance with relevant laws and regulations, and provides useful info on suspicious activity.
He thought the letter was strange because this was already common knowledge to those it would matter to, it seemed to be one of those “so obvious it’s pointless” memos that companies so often put out. His research then led him to what was at the time, the third largest increase in the currency component of M1 money supply (that’s cash “money” as most of us define it) since 1947. Stranger still, this irregularity was about $5 billion above the average monthly increase and happened to be made up of a lot of $100 bills. See the chart below.
Bergman thought the activity could have been criminality related to the 9/11 attacks. The only two months where the currency growth was higher was right before 2000 when Y2K fears had the business world rattled and in 1991 during the First Gulf War. Bergman noted that there were terrorist threats during both those time periods.
He went to the Board of Governors for some clarity and basically received none. To get a better understanding of the issue Bergman created a list of about 30 questions to research and answer. The question that probably got him fired was “Could the growth in currency, if traceable, provide information regarding the financing of terrorism, and specifically the attacks of Sept. 11, 2001?”
At the urging of his then-supervisor, Bergman went back to the Board of Governors for an answer. About a week after calling the Board to follow up on the question and present more questions, he was told he committed “a serious breach of protocol” and “his assignment was terminated and his credentials were cancelled” (as noted in a 2006 letter to former Federal Reserve Chairman Alan Greenspan from the Government Accountability Project).
Here is Bergman’s experience described in his own words below.
The currency component of M1 (Federal Reserve Notes circulating outside of banks) rose especially rapidly in July and August 2001. In fact, up to and including August 2001, that month (August 2001) was one of the three fastest growing months for the currency component of M1 since 1947, on a seasonally adjusted basis, even on the heels of significantly above-average growth in July 2001. Much of the July-August surge (over $5 billion above-average) seems to have been in the $100 denomination. Among other explanations, persons aware of any imminent terrorist attacks and concerned about possible asset seizures such as those that arose after the 1979 Iranian hostage crisis and the 1998 embassy bombings could have been trying to liquidate their bank accounts in July and August 2001. The money trail could provide important clues about people aware of, if not responsible for, the attacks. I looked at some internal data bearing on this issue that was available to anyone within the Federal Reserve’s internal computer network; after going back to look at this important data again a week or two later, it was no longer freely available, but password protected.
That’s the scene in the movie where the suspense music plays and the character has to run to the bathroom and splash water on his face while he figures out WTF just happened…
About one month after these events, Bill Bergman’s position was terminated, his department was absorbed into another one and he accepted a severance package in March 2004. Maybe we missed something, but that sounds just like a Hollywood conspiracy thriller.
This is just the tip of the 9/11 money iceberg. “The case of M1 money supply is just one of many cases”, noted Professor Paul Zarembka (SUNY Buffalo) in an interview in which he was asked about Bergman.
The litany of financial crimes surrounding 9/11 is something we will be exploring later in this campaign. How much money are we talking about? Understand that we could have done a top 50 list just on the financials.
The case of Bill Bergman is a prime example of why many people don’t ask pointed questions and let potential criminality slide by. If anything, this should be the reason we need a See something, say something” campaign, not for the military veterans, free thinkers and virtually all other types Americans.
Which is more dangerous? Your neighbor that’s possibly upset with the government or the government that stops at nothing to cover its crimes?