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The U.S. relationship with Saudi Arabia is in fact complicated and it did not begin with by any measure by the Bush dynasty. As explained on this site recently, conflicts and relationships between the United States, Iran and Saudi Arabia have a long convoluted history. Lawsuits for financial reparations regarding terror attacks and or accidents go back a long way.
The United States has been helping equip and train Saudi armed forces since U.S. President Franklin Roosevelt and Saudi King Abdulaziz Al Saud struck an oil-for-security alliance in 1945. (More from Reuters)
If anyone has read former U.S. Senator Graham’s (FL) book, Intelligence Matters published several years ago, the contents of the much debated 28 pages is not new. The deeper details of the Saudis in the country at the time before, during and after 9/11 may or may not have damning evidence of full participation in the attack, yet there are connections with regard to Saudi diplomats providing some assistance to 2 of the hijackers. There are some real questions for sure including if it was known at the time that the 2 hijackers were known to the Saudi embassy personnel to be in fact part of the plot or were they telling another story for the sake of financial aid. You must decide for yourself with what is known in open published source.
At question too is the FBI’s involvement from the beginning and later the effort to classify the 28 pages and why in coordination with the Bush Administration. For sure there is much more required to be included to form a summary with regard to the 28 pages, for that we may need to wait a lifetime as it appears Barack Obama is planning to keep these documents classified if Congress passes the legislation to declassify them.
One of the hijackers is in fact a detainee at Guantanamo Bay and may be designated as a ‘never release’.
Al-Sharbi is one of 80 remaining detainees at Guantanamo Bay. His public record includes his graduation from Embry-Riddle Aeronautical University, reported association with other al-Qaeda members and alleged attendance at training camps in Afghanistan.
He is also among the individuals identified in FBI agent Kenneth Williams’ July 2001 electronic communication, sometimes called the “Phoenix EC” or “Phoenix Memo.” With it, Williams attempted—unsuccessfully—to alert the rest of the bureau about suspicions that Middle Eastern extremists were attending flight schools with ill intent, and to recommend a nationwide investigation of the phenomenon.
While those aspects of al-Sharbi’s story have been widely discussed, the FBI’s reported discovery of his flight certificate inside a Saudi embassy envelope buried in Pakistan has not. More here.
Read the summary below for further details as known and permitted to be in open source. with regard to ‘document 17’.
As President Obama prepares to visit Saudi Arabia on Wednesday, his administration is under increasing pressure to declassify 28 pages that, according to many who’ve read them, illustrate financial links between the Saudi government and the 9/11 hijackers.
Meanwhile, a far lesser-known document from the files of the 9/11 Commission—written by the same principal authors as the 28 pages and declassified last summer without publicity and without media analysis—indicates investigators proposed exploring to what extent “political, economic and other considerations” affected U.S. government investigations of links between Saudi Arabia and 9/11.
Drafted by Dana Lesemann and Michael Jacobson as a set of work plans for their specific parts of the 9/11 Commission investigation, the 47-page document also provides an overview of individuals of most interest to investigators pursuing a Saudi connection to the 2001 attack that killed nearly 3,000 people.
Included in that overview is a previously unpublicized declaration that, after the capture of alleged al-Qaeda operative Ghassan al-Sharbi in Pakistan, the FBI discovered a cache of documents he had buried nearby. Among them: al-Sharbi’s U.S. pilot certificate inside an envelope of the Saudi embassy in Washington, D.C.
Declassified in July 2015 under the authority of the Interagency Security Classification Appeals Panel (ISCAP) pursuant to a Mandatory Declassification Review (MDR) appeal, the document is the seventeenth of 29 released under ISCAP appeal 2012-48, which focuses on FBI files related to 9/11. One of two documents in the series identified as “Saudi Notes,” we’ll refer to it as “Document 17.”
Dated June 6, 2003, Document 17 was written by Lesemann and Jacobson in their capacity as staff investigators for the 9/11 Commission, and was addressed to 9/11 Commission Executive Director Philip Zelikow, Deputy Executive Director Chris Kojm and General Counsel Dan Marcus.
Commission Investigators Posed Two Questions That Linger Today
Lesemann and Jacobson had previously worked together on the 2002 joint congressional 9/11 intelligence inquiry and authored the classified, 28-page chapter on foreign government financing of the attacks. Document 17 outlines how the two investigators proposed to extend their earlier research. The plans include many questions Lesemann and Jacobson felt the investigation should answer.
Two of those questions seem strikingly relevant today, as a declassification review of just 28 pages said to implicate Saudi Arabia in the 9/11 attacks has inexplicably taken three times as long as the entire joint inquiry that produced them, and while a growing number of current and former officials who are familiar with the pages emphatically assert there’s no national security risk in their release.
Lesemann and Jacobson, already veterans of investigating 9/11 with the congressional inquiry, asked:
They are two questions Lesemann wouldn’t be permitted to answer: Zelikow fired her first. Her termination had an apparent Saudi aspect of its own: Impatient with Zelikow’s neglect of her repeated requests for access to the 28 pages, she circumvented him to gain access on her own. When Zelikow discovered it, he promptly dismissed her.
Philip Zelikow
Organizationally set apart from dozens of other questions as among the more important, overarching lines of inquiry for their particular avenue of the commission’s work, the significance of the questions’ presence in Document 17 is amplified by the absence of corresponding answers in the commission’s final report.
At some point—perhaps after Lesemann’s determined interest in Saudi links to 9/11 led to her dismissal—someone apparently determined a public study of those questions was beyond the scope of work.
Zelikow’s appointment over the commission was controversial, given his previous friendship with National Security Advisor Condoleezza Rice and the fact he’d served on the Bush administration’s transition team. That history and, once appointed, his ongoing contacts with Bush political advisor Karl Rove, led some to question whether he was willing or able to achieve the high level of impartiality so essential to his role.
The Bush administration’s lack of cooperation with Saudi-related 9/11 inquiries is well-documented. According to Philip Shenon’s book, The Commission:
(Commission member and former Secretary of the Navy John) Lehman was struck by the determination of the Bush White House to try to hide any evidence of the relationship between the Saudis and al Qaeda. “They were refusing to declassify anything having to do with Saudi Arabia,” Lehman said. “Anything having to do with the Saudis, for some reason, it had this very special sensitivity.” He raised the Saudi issue repeatedly with Andy Card. “I used to go over to see Andy, and I met with Rumsfeld three or four times, mainly to say, ‘What are you guys doing? This stonewalling is so counterproductive.”
The Bush family has a multi-generational relationship with the Saudi royal family, with ties that are both deeply personal and deeply financial. Prince Bandar bin Sultan was the Saudi ambassador to the United States on 9/11, and is considered a personal friend of George W. Bush.
With many investigatory leads pointing toward the Saudi embassy in Washington, some feel Bandar merits thorough investigation—or that he may even be directly implicated in the 28 pages that Bush controversially redacted.
Saturday, appearing on Michael Smerconish’s CNN program to discuss a Saudi threat to divest itself of some $750 billion in U.S. Treasury securities if Congress passes a law clearing a path for 9/11 victims’ lawsuit against the kingdom, former Senator Bob Graham said, “I believe that there is material in the 28 pages and the volume of other documents that would indicate that there was a connection at the highest levels between the Kingdom of Saudi Arabia and the 19 hijackers.”
A Redacted Question from Document 17
Asked by 60 Minutes if the 28 pages name names, commission member Lehman replied, “Yes. The average intelligent watcher of 60 Minutes would recognize them instantly.”
(If you watched the impactful prime time 60 Minutes segment on the 28 pages that aired last week and don’t remember Lehman’s intriguing statement, it’s because 60 Minutes oddly relegated perhaps their most newsworthy quote of all to this web extra.) There are many more examples of the U.S. government’s thwarting of Saudi-related inquiries, both outside and inside the work of the 9/11 Commission.
A Buried Flight Certificate
The FBI’s 2002 discovery of a U.S. pilot certificate or “flight certificate” inside a Saudi embassy envelope was news to Graham, who co-chaired the joint congressional inquiry that produced the 28 pages.
“That’s very interesting. That’s a very intriguing and close connection to the Saudi embassy,” said Graham, who has been championing the declassification of the 28 pages and a perhaps hundreds of thousands of pages of other documents since 2003.
Since people often re-use envelopes and citizens of any country may have legitimate reasons for correspondence with the embassies of their government in foreign countries they live in, the Saudi embassy envelope isn’t by itself conclusive of anything. 28Pages.org couldn’t find any other history of the FBI’s find or of the government’s evaluation of its significance.
Al-Sharbi is one of 80 remaining detainees at Guantanamo Bay. His public record includes his graduation from Embry-Riddle Aeronautical University, reported association with other al-Qaeda members and alleged attendance at training camps in Afghanistan.
He is also among the individuals identified in FBI agent Kenneth Williams’ July 2001 electronic communication, sometimes called the “Phoenix EC” or “Phoenix Memo.” With it, Williams attempted—unsuccessfully—to alert the rest of the bureau about suspicions that Middle Eastern extremists were attending flight schools with ill intent, and to recommend a nationwide investigation of the phenomenon.
While those aspects of al-Sharbi’s story have been widely discussed, the FBI’s reported discovery of his flight certificate inside a Saudi embassy envelope buried in Pakistan has not.
Additional Excerpts from Document 17
The al-Sharbi paragraph excerpted above is in a section titled, “A Brief Overview of Possible Saudi Government Connections to the September 11th Attacks.” Comprising a list of individuals of interest to the investigators, it begins with names central to the well-reported San Diego cell, including future hijackers Nawaf al-Hazmi and Khalid al-Midhar, purported Saudi government operative Omar al-Bayoumi, Saudi diplomat Fahad al-Thumairy and Osama Bassnan, a former employee at a Saudi mission in Washington, D.C. who received “considerable funding from Prince Bandar and Princess Haifa, supposedly for his wife’s medical treatments.”
Here, we directly excerpt many entries from the list, with an emphasis on those that are more suggestive of a link to the Saudi government. Much of the information is already well-known.
It’s important to note that any given association described in these documents may well be benign, that witness statements aren’t always accurate, and that a previous government assertion of a fact may have already proved or may yet be proved wrong.
Omar Al-Bayoumi: Al-Bayoumi, a Saudi national, provided September 11 hijackers Nawaf al-Hazmi and Khalid al-Mihdhar with considerable assistance after the hijackers arrived in San Diego in February 2000. He helped them locate an apartment, co-signed their lease, and ordered Mohdhar Abdullah (discussed below) to provide them with whatever assistance they needed in acclimating to the United States. The FBI now believes that in January 2000 al-Bayoumi met with Fahad al-Thumairy, a Saudi diplomat and cleric, at the Saudi Consulate in Los Angeles before going to the restaurant where he met the hijackers and engaged them in conversation. Whether or not al-Bayoumi ‘s meeting with the hijackers was accidental or arranged is still the subject of debate. During his conversation with the hijackers, Al-Bayoumi invited them to move to San Diego, which they did shortly thereafter. Al-Bayoumi has extensive ties to the Saudi Government and many in the local Muslim community in San Diego believed that he was a Saudi intelligence officer. The FBI believes it is possible that he was an agent of the Saudi Government and that he may have been reporting on the local community to Saudi Government officials. In addition, during its investigation, the FBI discovered that al-Bayoumi has ties to terrorist elements as well.
Osama Bassnan: Bassnan was a very close associate of al-Bayoumi’s, and was in frequent contact with him while the hijackers were in San Diego. Bassnan, a vocal supporter of Usama Bin Ladin, admitted to an FBI asset that he met al-Hazmi and al-Mihdhar while the hijackers were in San Diego, but denied this in a later conversation. There is some circumstantial evidence that he may have had closer ties to the hijackers, but the FBI has been unable to corroborate this additional reporting. Bassnan received considerable funding from Prince Bandar and Princess Haifa, supposedly for his wife’s medical treatments. According to FBI documents, Bassnan is a former employee of the Saudi Government’s Educational Mission in Washington, D.C.
Fahad Al-Thumairy: Until recently al-Thumairy was an accredited Saudi diplomat and imam at the King Fahad Mosque in Culver City, California. The news media reported that the U.S. Government revoked al-Thumairy’s visa in May 2003 ; the diplomat subsequently returned to Saudi Arabia. The FBI now believes that Omar al-Bayoumi met with al-Thumairy at the Saudi Consulate in Los Angeles before al-Bayoumi went to the restaurant where he met the hijackers. According to witness reporting, al-Hazmi and al-Mihdhar were also taken to the King Fahad Mosque while they were in the United States.
Mohdhar Abdullah: Abdullah was tasked by Omar al-Bayoumi to provide al-Hazmi and al-Mihdhar with whatever assistance they needed while in San Diego. Abdullah, who became one of the hijackers’ closest associates in San Diego, translated for them, helped them open bank accounts, contacted flight schools for the hijackers, and helped them otherwise acclimate to life in the United States.
Osama Nooh and Lafi al-Harbi: Al-Harbi and Nooh are Saudi naval officers who were posted to San Diego while hijackers al-Mihdhar and al-Hazmi were living there. After the September 11th attacks, the FBI determined that al-Hazmi had telephonic contact with both Nooh and al-Harbi while al-Hazmi was in the United States.
Mohammed Quadir-Harunani: Quadir-Harunani has been the subject of an FBI counterterrorism investigation since 1999 and the FBI is currently investigating whether he had contact with the September 11th hijackers. In June 2000 a call was placed from Transcom International, a company owned by Quadir-Harunani, to a number subscribed to by Said Bahaji, one of the key members of the Hamburg cell. Quadir-Harunani is also a close associate of Usama bin Ladin’s half-brother, Abdullah Bin Ladin (discussed below), who was assigned to the Saudi Embassy in Washington, D.C.-E87 2.
Abdullah Bin Ladin: Abdullah bin Ladin (ABL) is reportedly Usama bin Ladin’s half-brother. He is the President and Director of the World Arab Muslim Youth Association (WAMY) and the Institute of Islamic and Arabic Studies in America. Both organizations are local branches of nongovernmental organizations based in Riyadh, Saudi Arabia. According to the FBI, there is reason to believe that WAMY is “closely associated with the funding and financing of international terrorist activities and in the past has provided logistical support to individuals wishing to fight in the Afghan War.” ABL has been assigned to the Saudi Embassy in Washington, D.C. as an administrative officer. He is a close associate of Mohammed Quadir Harunani’s and has provided funding for Transcom International.
Fahad Abdullah Saleh Bakala: According to an FBI document, Bakala was close friends with two of the September 11th hijackers. The document also notes that Bakala has worked as a pilot for the Saudi Royal Family, flying Usama Bin Ladin between Afghanistan and Saudi Arabia during UBL’s exile.
Hamad Alotaibi: Alotaibi was assigned to the Saudi Embassy Military Division in Washington, D.C. According to an eyewitness report, one of the September 11th hijackers may have visited Alotaibi at his residence; another FBI document notes that a second hijacker may have also visited this address.
Hamid Al-Rashid: Al-Rashid is an employee of the Saudi Civil Aviation Authority and was apparently responsible for approving the salary of Omar al-Bayoumi. Hamid al-Rashid is also the father of Saud al-Rashid, whose photo was found in a raid of an al-Qa’ida safehouse in Karachi and who has admitted to being in Afghanistan between May 2000 and May 2001.
Ghassan al-Sharbi: Al-Sharbi is a Saudi student who was taking flight lessons in the Phoenix area before the September 11 attacks and is mentioned in the “Phoenix EC.” The U.S. government captured al-Sharbi in the same location where Abu Zubaida was discovered in early 2002. After Al-Sharbi was captured, the FBI discovered that he had buried a cache of documents nearby, including an envelope from the Saudi embassy in Washington that contained al-Sharbi’s flight certificate.
Saleh Al-Hussayen: According to FBI documents, Saleh Al-Hussayen is a Saudi Interior Ministry employee/official and may also be a prominent Saudi cleric. According to one news article, Saleh Al-Hussayen is the Chief Administrator of the Holy Mosques in Mecca and Medina. An FBI affidavit notes that Saleh Al-Hussayen stayed in the same hotel as three of the hijackers on September 10, 2001. He told the FBI that he did not know the hijackers . The FBI agents interviewing him, however, believed he was being deceptive. The interview was terminated when al-Hussayen either passed out or feigned a seizure and was taken to the hospital; he then departed the country before the FBI could reinterview him. Saleh Al-Hussayen is ‘also the uncle of Sami Al -Hussayen (discussed below).
Mohammed Fakihi: Fakihi is a Saudi diplomat. Until recently he was assigned to the Islamic Affairs Section of the Saudi Embassy in Berlin, Germany. Soon after the September 11th attacks, German authorities searched SECRET 3 SECRET 10 the apartment of Munir Motassadeq, an associate of the hijackers in Hamburg , and found Fakihi’s business card. According to press reports , the Saudis did not respond to German requests for information on Fakihi. More recently, German authorities discovered that Fakihi had contacts with other terrorists; Fakihi was subsequently recalled to Saudi Arabia.
Salah Bedaiwi: Bedaiwi is a Saudi Naval officer who was posted to a U .S. Navy base in Pensacola, Florida. He visited the Middle Eastern Market in Miami, a location frequented by several of the hijackers, and was in contact with at least one of the hijackers’ possible associates. The FBI has been investigating these connections, as well as his ties to other terrorist elements.
Mohammed Al-Qudhaeein and Hamdan Al-Shalawi: Al-Qudhaeein and Al-Shalawi were both Saudi students living in the Phoenix area. Qudhaeein was receiving funding from the Saudi Government during his time in Phoenix. Qudhaeein and Al-Shalawi were involved in a 1999 incident aboard an America West flight that the FBI’s Phoenix Office now believes may have been a “dry run” for the September 11th attacks. Al-Qudhaeein and Al-Shalawi were traveling to Washington, D.C. to attend a party at the Saudi Embassy; the Saudi Embassy paid for their airfare. According to FBI documents, during the flight they engaged in suspicious behavior, including several attempts to gain access to the cockpit. The plane made an emergency landing in Ohio, but no charges were filed against either individual. The FBI subsequently received information in November 2000 that Al-Shalawi had been trained at the terrorist camps in Afghanistan to conduct Khobar Towertype attacks and the FBI has also developed information tying Al-Qudhaeein to terrorist elements as well.
Ali Hafiz Al-Marri and Maha Al-Marri: Ali Al-Marri was indicted for lying to the FBI about his contact with Mustafa Al-Hasawi, one of the September 11th financiers. Ali Al-Marri, who arrived in the United States shortly before the September 11th attacks, attempted to call Al-Hasawi a number of times from the United States. The FBI has recently received reporting that he may also have been an al:.Qa’ida “sleeper agent.” According to FBI documents, Ali Al-Marri has connections to the Saudi Royal Family. The Saudi Government provided financial support to his wife, Maha Al-Marri, after Ali Al-Marri was detained and assisted her in departing the United States before the FBI could interview her.
Re: Preliminary Update—The Fast and Furious Papers
Executive Summary
On January 19, 2016, U.S. District Judge Amy Berman Jackson ordered the Justice Department to produce documents to the Committee related to Operation Fast and Furious. The documents—previously withheld pursuant to the President’s executive privilege claim—detail the Department’s internal deliberations with respect to denying, and eventually admitting, that firearms were trafficked into the hands of Mexican cartel associates during Fast and Furious.
On April 8, 2016, the Department produced 20,500 pages of documents in response to Judge Jackson’s Order.
More than previously understood, the documents show the lengths to which senior Department officials went to keep information from Congress. Further, the documents reveal how senior Justice Department officials—including Attorney General Eric Holder—intensely followed and managed an effort to carefully limit and obstruct the information produced to Congress. Justice Department officials in Washington impeded the congressional investigation in several ways, including:
Presuming that allegations about gunwalking in Arizona were false and refusing to adjust when documents and evidence showed otherwise.
Politicizing decisions about how and whether to comply with the congressional investigation.
Devising strategies to redact or otherwise withhold relevant information from Congress and the public.
2
Isolating the fallout from the Fast and Furious scandal to ATF leadership and the U.S. Attorney’s Office in Arizona.
Creating a culture of animosity towards congressional oversight.
Factual Background
On December 14, 2010, Customs and Border Patrol Agent Brian Terry, a United States Marine veteran, was killed while on patrol near Nogales, Arizona, just miles from the Mexican border. The only two firearms found at the scene were semi-automatic rifles that were allowed to walk as part of a firearms trafficking case named Operation Fast and Furious. The deadly Fast and Furious operation ultimately was responsible for allowing approximately 2,000 firearms to illegally flow into the hands of Mexican cartel associates.
The case was started by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) Phoenix Field Division in 2009. In January 2010, ATF and the United States Attorney’s Office for the District of Arizona secured funding through the Justice Department’s Organized Crime Drug Enforcement Task Force (OCDETF) program. The OCDETF designation and the use of numerous wiretaps opened the door for significant oversight and supervision by Washington, D.C.-based Justice Department officials.
Congressional Republicans have investigated Fast and Furious since January 2011. Over the course of the investigation, the Justice Department has provided false information, stonewalled document requests, produced scores of blacked-out pages and duplicate documents in order to bolster its page count for public relations purposes, and refused to comply with two congressional subpoenas.
Litigation Background
On February 4, 2011, the Justice Department wrote to Congress and denied that law enforcement officers allowed straw purchasers to buy firearms illegally in the United States with the intent to traffic them without apprehension. On December 2, 2011—nearly ten months later—the Justice Department retracted that letter and confirmed federal investigators let weapons walk away in the hands of straw purchasers, many of whom entered Mexico during Operation Fast and Furious.
On October 12, 2011, the Committee issued a subpoena to then Attorney General Eric Holder to obtain documents and communications related to the Fast and Furious operation. As the investigation proceeded, understanding why, how, and when Justice Department officials determined the February 4 letter was false, and why it took so long for them to correct the record, became a primary focus. The Attorney General refused to produce the documents covered by the subpoena, and the President asserted executive privilege over the documents on June 20, 2012.
On June 28, 2012, the House of Representatives voted to hold the Attorney General in contempt because the President’s assertion of executive privilege was inappropriate and legally deficient. Concurrently, the House passed a civil contempt resolution authorizing a lawsuit 3
against the Justice Department to obtain the documents. The House of Representatives Office of General Counsel filed the lawsuit against the Justice Department on August 13, 2012.
Judge Amy Berman Jackson issued her opinion on January 19, 2016.
January 19, 2016 Order and Opinion
The Committee’s motion to compel the Justice Department to produce all the documents and communications it withheld pursuant to the President’s executive privilege claim asserted that: (1) those records are not deliberative, and therefore not eligible to be withheld under an executive privilege claim; and (2) even if they were, the privilege is outweighed in this instance by the Committee’s compelling need for the material.
Judge Jackson ruled executive branch communications regarding how to respond to congressional inquiries and other public relations communications are indeed eligible for executive privilege protection. However, Judge Jackson determined the privilege is outweighed in cases where Congress has a compelling need for the documents.
In this case, Judge Jackson decided the Committee’s need for the documents outweighed the Department’s need to protect itself from the limited harm that could come from releasing them.
Judge Jackson ordered the Justice Department to produce all documents and communications previously withheld as deliberative, among other things. Judge Jackson’s Order stated:
For the reasons stated above, it is ORDERED that plaintiff’s motion to compel [Dkt. # 103] is GRANTED insofar as it calls for the production of documents responsive to the October 11, 2011 subpoena that concern the Department of Justice’s response to congressional and media inquiries into Operation Fast and Furious which were withheld on deliberative process privilege grounds . . . . In all other respects, it is DENIED. Records subject to this order shall be produced to plaintiff by February 2, 2016.
It is further ORDERED that by February 2, 2016, defendant shall produce to plaintiff all segregable portions of any records withheld in full or in part on the grounds that they contain attorney-client privileged material, attorney work product, private information, law enforcement sensitive material, or foreign policy sensitive material. Whether any additional records or portions of records are to be produced is a matter to be resolved between the parties themselves.1
1 Order and Opinion of Judge Amy Berman Jackson, Comm. on Oversight and Gov’t Reform v. Loretta E. Lynch, Atty. Gen. of the U.S., Civil Action No. 12-1332 (ABJ) (Jan. 19, 2016). 4
The Committee’s Appeal
The House General Counsel filed a notice of appeal of Judge Jackson’s decision on behalf of the Committee on April 8, 2016. The Committee is seeking the remaining documents responsive to the lawsuit and subpoena that are still being inappropriately withheld by the Justice Department for other reasons.
The Justice Department’s Production
Within hours of the notice of appeal being filed, the Justice Department released thousands of documents to the Committee. Assistant Attorney General Peter Kadzik wrote an accompanying letter to the Committee. It stated:
[I]n light of the passage of time and other considerations, such as the department’s interests in moving past this litigation and building upon our cooperative working relationship with the committee and other congressional committees, the department has decided that it is not in the executive branch’s interest to continue litigating this issue at this time. The Department believes that the information provided to the Committee in the referenced production . . . obviates any need for further litigation on this matter.2
2 Letter from Peter Kadzik, Ass’t Atty. Gen., to Hon. Jason E. Chaffetz, Chairman, H. Comm. on Oversight and Gov’t Reform (Apr. 8, 2016).
3 Julian Hattem, Feds hand over ‘Fast and Furious’ docs as House appeals for more, THE HILL, Apr. 8, 2016.
4 DOJ-FF-04906.
In a story about the document production, The Hill wrote: “The decision to hand over documents amounts to an admission of failure for the administration, which had long insisted that many of the records were not eligible for Congress’s oversight.”3 This is true. It is also true, however, that the Justice Department continues to withhold thousands of documents covered by the Committee’s subpoena.
Preliminary Findings
Top Justice Department officials did not take questions from Congress about Fast and Furious seriously. In fact, in response to questions from Congress in January 2011, they presumed gunwalking did not occur and proceeded from there. That pattern persisted throughout the congressional investigation.
On January 31, 2011, U.S. Attorney Dennis Burke wrote to Justice Department officials in Washington to share his concerns about a letter from Senate Judiciary Committee Ranking Member Charles Grassley to ATF Director Kenneth Melson raising questions about whether guns were allowed to traffic into Mexico. Burke wrote: “Grassley’s assertions regarding the Arizona investigation and the weapons recovered at the BP agent Terry murder scene are based on categorical falsehoods. I worry that ATF will take 8 months to answer this when they should be refuting its underlying accusations right now.“4
5
Deputy Assistant Attorney General Jason Weinstein agreed: “This is a really important briefing for ATF – they need to nail it. . . . I’d be happy to work with ATF on the prep for this if it would be helpful.”5
5 DOJ-FF-04906.
6 DOJ-FF-04906.
7 DOJ-FF-04905.
8 DOJ-FF-44015—44018.
9 DOJ-FF-44015—44018.
10 DOJ-FF-44015—44018.
11 DOJ-FF-44015—44018.
12 DOJ-FF-11134.
Weinstein then suggested to Assistant Attorney General for the Criminal Division Lanny Breuer that he email Melson “offering any assistance they need for the Grassley briefing.”6 Weinstein further advised that “ATF can and should strongly refute” that a Fast and Furious weapon was involved in the Brian Terry attack.7
On Friday, June 17, 2011, in response to news reports that firearms used in a high-profile kidnapping and murder were linked to Fast and Furious, Associate Deputy Attorney General Matt Axelrod emailed ATF, asking: “Were two F&F guns actually traced to the scene of this kidnapping? Can you run that down for us?”8 ATF dismissed the connection by responding that day: “[T]o suggest the guns are linked is like saying there was a murder in southeast three weeks ago. Tonight a car load of guys g[o]t caught with guns in southeast. Ergo the guns are linked to the murder.”9
Only after Chairman Issa and Ranking Member Grassley wrote to the Ambassador of Mexico on June 21, 2011 to ask for further details did Axelrod ask more probing questions of ATF.10 Subsequently, on June 22, 2011, Associate Deputy Attorney General Matt Axelrod emailed senior officials, including Deputy Attorney General Jim Cole: “I just heard from ATF. Their initial reporting on this was incorrect. Evidently, when MX law enforcement arrested the kidnappers at their hideout, they seized a number of firearms, two of which tie back to Fast and Furious. I’ll double check Issa’s letter in the morning, but it appears that the allegations in it (and in the Fox News report) are accurate.”11
Top Justice Department officials viewed the congressional investigation through a highly political lens. They constantly made decisions about whether and when to turn over documents based on political and public relations considerations.
On March 9, 2011, Assistant Attorney General for Legislative Affairs Ron Weich forwarded a letter from the National Rifle Association to a group of senior Justice Department officials. The letter urged the House Judiciary Committee to hold hearings on ATF firearms trafficking enforcement tactics. Weich stated: “Chutzpah. The NRA’s now-public involvement in this may be useful in convincing reporters that this is part of the overall effort to discredit ATF.”12
6
On May 4, 2011, Attorney General Holder weighed in on the topic of how to respond to a Wall Street Journal article about Lanny Breuer’s role in Fast and Furious. He asked a group of top Justice Department officials: “If we go out with something do we make it worse?”13 In response to a subsequent email from a Criminal Division lawyer providing additional details about how wiretap applications are reviewed, Holder responded: “Ok- but everyone get ready- this isn’t about facts.”14
13 DOJ-FF-00657.
14 DOJ-FF-00656.
15 DOJ-FF-43037.
16 DOJ-FF-43037.
17 DOJ-FF-43037.
18 DOJ-FF-60096.
19 DOJ-FF-60096.
On June 15, 2011, Stephen Kelly, the top legislative affairs official for the Federal Bureau of Investigation, emailed top Justice Department officials about whether to provide certain material responsive to the Committee’s subpoena:
[T]his is a very bad idea. This will become precedent for Sen. Grassley’s office to seek actual documents from DoJ and the FBI in pending criminal investigations, and there’s a better than 50/50 chance that Sen. Grassley will become Chairman of the Judiciary Committee in the next cycle. If the documents are provided here, we can expect to see specific requests to DoJ and the FBI for documents in pending criminal investigations as a routine matter from Committee chairs, potentially including Sen. Grassley.15
The FBI’s General Counsel, Valerie Caproni, weighed in on Kelly’s assessment with “I agree.”16 Lisa Monaco responded to the group, “I have spoken with folks here on this and think for now we will not be providing this[.]”17
In determining how the Department would describe in a letter to Chairman Issa the information being withheld, on September 19, 2011, DOJ lawyer Paul Colborn suggested “deleting the sentence giving a page count on our memos on memos withholding.”18 He went on to reason, “I think giving a page count is an inappropriate accommodation at this point. They have no legitimate oversight interest in that information.”19
On October 5, 2011, DOJ Office of Public Affairs Director Matthew Miller emailed Attorney General Eric Holder:
If I were you, I would want answers from the entire team ([Deputy Attorney General Jim] Cole, [Associate Deputy Attorney General Steven] Reich, on down), on why the Department let Issa decide what to do with these memos. The whole point of the review is to find things like this and come up with plans for dealing with them. It should have been obvious that these memos were going to be a huge target, and instead of 7
just handing them over, the Department should have put them out to reporters on its own terms, instead of letting Issa do it. Give them to Issa at the same time you give them to the press with an explanation that takes the air out of the balloon. And if the answer is we owe it to Issa to give him this stuff first – well, that’s obviously ridiculous.20
20 DOJ-FF-61875.
21 DOJ-FF-61875.
22 DOJ-FF-12213—12214.
23 DOJ-FF-21337.
24 DOJ-FF-21335.
Holder forwarded the email to his chief of staff, Gary Grindler, with the comment, “I agree.”21
Top Justice Department officials in Washington wanted Congress and the public to have as little information as possible. They carefully chose language to minimize Congress’s and the public’s understanding of the role of the Department’s political staff in Fast and Furious.
On March 16, 2011, an ATF official weighed in on the Justice Department’s response to a letter from House Judiciary Committee Chairman Lamar Smith. Chairman Smith’s letter asked several questions about Operation Fast and Furious, including “How many weapons have been allowed to pass to Mexico under the program known as ‘Fast and Furious’”? The ATF official advised senior Justice Department officials to exclude key information from their response. He wrote: “We would suggest that you pull the sentence that notes how many weapons we’ve recovered. It squares poorly with how many we haven’t.”22
On March 31, 2011, senior Justice Department officials in Washington were discussing an imminent subpoena from Chairman Issa. Assistant Attorney General for National Security Lisa Monaco asked the group: “[W]hat’s the status of the response to [I]ssa that had been discussed to try to buy time?”23 DOJ Office of Public Affairs Director Matthew Miller subsequently drafted a letter to Chairman Issa. Regarding that draft, DOJ lawyer Paul Colborn wrote to Ron Weich: “Ron, Matt’s draft is not a good letter. Much too weak on the open investigation point and suggesting we’ll provide a ‘substantial’ number of documents while withholding only ‘some’ relating to the investigation into the death of the agent. Much more likely, it’s the reverse: we’ll provide only some and withhold a substantial number, and they concern not just the murder investigation but also the longstanding Fast and Furious investigation.”24
On May 3, 2011, top Justice Department officials were discussing whether to give a statement to the Wall Street Journal for an impending story on the Fast and Furious investigation. The Wall Street Journal was preparing to report that Lanny Breuer’s office approved wiretaps which described questionable investigative techniques in March 2010. DOJ Office of Public Affairs Director Matthew Miller recommended against issuing a statement. In an email to Breuer and other top DOJ officials, he wrote: “I think people will accuse us of playing with semantics when we say that you did not authorize Fast and
8
Furious, but they find out that CRM [DOJ’s Criminal Division] did authorize wiretaps.”25
25 DOJ-FF-28895.
26 DOJ-FF-28985.
27 Evan Perez, Lawmakers Step Up Probe of Gun Trafficking Operation, WALL ST. J., May 4, 2011.
28 DOJ-FF-48038.
29 DOJ-FF-00002.
30 DOJ-FF-00002.
Later on May 3, 2011, top officials from DOJ’s Office of Public Affairs and other top DOJ officials were discussing how to respond to press inquiries about Lanny Breuer’s role in authorizing Fast and Furious. Officials from the Criminal Division wanted to issue a definitive denial that Breuer authorized the ATF operation. Office of Public Affairs Director Tracy Schmaler warned her colleagues: “. . . we run the risk of seeming disingenuous to some who will not take our explanation that aspects of the operation are not the same as authorizing the operation.”26 DOJ’s statement to the Wall Street Journal wound up being misleading and minimized Breuer’s role in Fast and Furious: “[The wiretap approvals are] a narrow assessment of whether a legal basis exists to support a surveillance request that ultimately goes before a judge for decision. These reviews are not approval of the underlying investigations or operations.”27
On July 6, 2011, a draft letter to Chairman Issa and Ranking Member Cummings was circulated to senior Justice Department officials. In response, Department official Faith Burton wrote, “I’d stay away from the representation that we’ll fully cooperate in the future . . .” and removed language from the draft letter.28
On August 17, 2011, Associate Deputy Attorney General Matt Axelrod wrote an email to ATF Assistant Deputy Director of the Office of Public and Governmental Affairs Chris Shaefer. In the email, Axelrod provided feedback in response to a draft external communication related to Fast and Furious. Axelrod advised Shaefer the draft “wades further than the last version into details and conclusions about Fast and Furious, which strikes us as unwise given the evolving nature of what we’re still learning about the underlying facts and the risk that what you say will be twisted and taken out of context by agency critics.”29
Axelrod further instructed Shaefer to keep his communications about Fast and Furious “high level.”30
The Justice Department’s political staff in Washington took steps to isolate the fallout from Fast and Furious to ATF and the U.S. Attorney’s Office in Arizona.
On August 28, 2011, Attorney General Holder was strategizing with top officials in Washington about how to announce ATF Director Ken Melson and U.S. Attorney Dennis Burke would resign due to their roles in Fast and Furious. Holder was concerned the news would leak early because Melson had already cleaned out his office. He instructed his staff
9
to have someone at ATF “close the door to his office.”31 Deputy Attorney General Jim Cole worried announcing Melson’s resignation would create the appearance Melson was the only official being removed. He wrote to Holder: “The problem with going earlier than Tuesday is that we won’t have Dennis in the package.“32
31 DOJ-FF-01272.
32 DOJ-FF-01310.
33 DOJ-FF-01310.
34 DOJ-FF-01310.
35 DOJ-FF-01268-69.
36 DOJ-FF-01268.
37 DOJ-FF-01267.
38 DOJ-FF-57853.
39 DOJ-FF-57852.
Holder responded: “Let’s hold all until Tuesday as planned.”33 He replied to his own email: “We have to make known the breadth of the changes- at the top in USAO and ATF. At worker level at USAO and ATF. No one is a fall guy here.”34
Further proof of the coordination by main Justice of the Melson and Burke staff changes occurred when Melson emailed a proposed “draft press release” he “would like to issue from ATF.”35 David O’Neil responded to the chain (with Holder cc’ed):
Ken’s message below reads like he may think he’s giving us a heads-up on the message he plans to send on Monday as opposed to asking for clearance. If we haven’t made clear to him that we want to approve/coordinate any messaging about this, we probably should say that OPA is going to revise the first draft he shared and we’ll get back to him with a new one.36
Stuart Goldberg alerted the email chain: “the DAG [Jim Cole] did tell him the change would be announced on Tuesday,” to which Holder questioned “Did Jim say it in Spanish?” Cole responded, “Further proof of the need for a change.”37
Talking points drafted by Ron Weich to communicate to congressional staff made clear both Melson and Burke were intended to be the scapegoats, noting: “These changes will help us move past the controversy that has surrounded Fast and Furious. Ken Melson and Dennis Burke have both acknowledged mistakes in that area, and it will be useful to turn the page from those mistakes.”38
According to Weich, Holder expected to “have these conversations personally,” but Weich believed “there may be a value in keeping the AG a step removed.”39 10
Top Justice Department officials disingenuously relied on the ongoing investigation by the Inspector General to ward off outside investigations.
On March 15, 2011, Justice Department officials in Washington and the U.S. Attorney’s Office in Arizona discussed “noises that they [the Mexican government] are opening a criminal investigation of ATF for Fast and Furious . . . .”40 DOJ Criminal Division Office of International Affairs Director Molly Warlow advised that the Inspector General’s review “shouldn’t have any interplay at all [with the Mexican government’s investigation], unless we wanted to (or needed to) invoke that as reason (even if disingenuously) to shelve the Mexican inquiry. I can see nothing but mischief (and headaches for us) in the mexicans pursuing this, so I would like to see if there is a way we can turn it off, and the sooner the better.”41
40 DOJ-FF-12160.
41 DOJ-FF-12160.
Going Forward
On April 8, 2016, the Committee filed a notice of appeal to the U.S. Court of Appeals for the D.C. Circuit. House General Counsel will file the appeal on behalf of the Committee, pursuant to the Federal Rules of Appellate Procedure. The purpose of the appeal is to obtain the full range of documents for which the Committee issued a subpoena in 2011 and brought this lawsuit in 2012. We expect those documents—which are still being withheld for inappropriate reasons by the Justice Department—will answer some of the outstanding questions about Operation Fast and Furious.
The emails and other internal Justice Department communications described in this memorandum represent a small subset of the 20,500 pages that the Committee received on April 8, 2016. Committee staff are working vigorously to review the entire set of documents that the Justice Department turned over to piece together how and why senior political officials in Washington obstructed the congressional investigation of Fast and Furious. The Committee will supplement the preliminary findings contained in this memorandum with a more complete report as soon as practicable. 11
APPENDIX: TIMELINE OF KEY DATES
December 14, 2010: Border Patrol Agent Brian Terry was fatally shot.
January 27, 2011: Sen. Charles Grassley wrote a letter to ATF Acting Director Kenneth E. Melson requesting information about the ATF-sanctioned sale of hundreds of firearms to straw purchasers. The letter mentioned a number of allegations that walked guns were found at the scene of the fire fight that killed Border Patrol Agent Brian Terry.
February 4, 2011: The Justice Department responded to Sen. Grassley and denied that law enforcement officers allowed straw purchasers to buy firearms illegally in the United States and take them into Mexico without being apprehended.
March 16, 2011: Chairman Issa wrote to then-Acting ATF Director Kenneth E. Melson requesting documents and information regarding Fast and Furious.
March 22, 2011: President Obama appeared on Univision and spoke about the “gunwalking” controversy. The President said neither he nor Attorney General Holder authorized Fast and Furious. He also stated, “There may be a situation here in which a serious mistake was made, and if that’s the case then we’ll find out and we’ll hold somebody accountable.”
March 31, 2011: The Committee issued a subpoena to Melson. The Department produced zero pages of non-public documents pursuant to that subpoena until June 10, 2011, on the eve of the Committee’s first Fast and Furious hearing.
October 12, 2011: Chairman Issa issued a subpoena for documents to the Justice Department. That subpoena, and its successors, is the subject of the ongoing litigation between the Committee and the Justice Department.
November 8, 2011: Holder stated for the first time in testimony before the Senate Judiciary Committee that “gunwalking” occurred in Fast and Furious.
December 2, 2011: The Justice Department retracted the February 4 letter and confirmed that federal investigators did in fact permit weapons to enter Mexico during Operation Fast and Furious.
June 20, 2012: The President asserted executive privilege over some of the documents being withheld by the Attorney General.
June 28, 2012: The House of Representatives voted (255-67) to hold the Attorney General in contempt because the President’s assertion of executive privilege was invalid, among other reasons. The House also passed (258-95) a civil contempt resolution that authorized a lawsuit against the Justice Department to obtain the documents. 12
August 13, 2012: The House of Representatives Office of General Counsel filed the lawsuit against the Justice Department.
January 19, 2016: Judge Amy Berman Jackson issued her order and opinion.
April 8, 2016: The House General Counsel filed a notice of appeal of Judge Jackson’s order so the Committee can secure the full range of documents for which it brought the lawsuit.
The Justice Department provided 20,500 pages of documents in response to Judge Jackson’s order.
Congressional failures just forced the Marines to raid a museum for aircraft parts
MilitaryTimes: Marine aviation squadrons are salvaging aircraft parts from museums in order to keep planes flying, according to anecdotes from a key congressional leader.
During a recent trip to several Southern U.S. military bases, Marines told House Armed Services Committee Chairman Mac Thornberry, R-Texas, that they’ve been paying for their units’ supplies like pens and paper towels, and were forced to raid decommissioned aircraft for parts.
“I have heard firsthand from service members who have looked me in the eye and told of trying to cannibalize parts from a museum aircraft … getting aircraft that were sent to the boneyard in Arizona back and ready to fly missions, pilots flying well below the minimum number of hours required for minimal proficiency,” Thornberry said.
Lawmakers are livid about the fiscal shortfalls, even if their budget infighting in Congress is partly to blame.
At issue are military readiness accounts stretched thin by more than a decade of war and four years of defense penny pinching. Earlier this month, chiefs from each of the four services told lawmakers that those two stressors have led to belt-tightening headaches for units across the military, in some cases deferring long-term needs in favor of short-term solutions.
PhotoCamel
Thornberry would not identify which Marine air station had the parts shortage, and Marine Corps officials at the locations he visited would not confirm the stories.
But Joint Chiefs Chairman Gen. Joseph Dunford did not dispute and seemed to confirm the incidents when confronted with the anecdotes at a March 22 hearing.
“What you saw in the Marine Corps I think reflects in some part what you’ll see in all the services, perhaps not to the same degree as Marine aviation,” he told the chairman. “But that same dynamic exists in each one of the services.”
The Marine Corps has about 180 F/A-18A-Ds, said Marine Corps spokesman Maj. Clark Carpenter. Typically, 43 F/A-18s from deployable squadrons and nine from training squadrons are in depot for maintenance at any given time. That leaves only about 60 percent of the deployable aircraft in flyable, “fight tonight” status.”
Lt. Gen. Glen Walters, the Corps’ deputy commandant for programs and resources, told lawmakers earlier this month that budget cuts have left the entire service “under-resourced” for spare parts.
The Marine Corps has requested $460 million from Congress in fiscal 2017, some of which would buy spare parts for aircraft, but aviation readiness is not expected to fully recover until at least 2020.
Thornberry said the museum salvage attempt he learned about didn’t work, and the Marines were forced to find another fix to get the aircraft ready for an overseas mission.
“The part they took off the museum aircraft did not fit the aircraft they were trying to keep flying,” he said. “But they’re looking for whatever they can do to keep these things up in the air. It’s just amazing.”
Earlier this month, Marine Commandant Gen. Robert Neller blamed some of the maintenance and repair woes on the continued high tempo of operations.
“The fight in ISIL continues to put stress on equipment, particularly aviation,” he told lawmakers, using an acronym for the Islamic State group. “We’re in the process of resetting our equipment and then you’re trying to maintain legacy gear, and at the same time modernize every model type series of aircraft.”
Other service officials have echoed similar problems. Dunford and Defense Secretary Ash Carter point to Congress’ defense spending caps, which have limited maintenance and investment accounts in recent years, and begged for relief in upcoming budgets.
But committee members have questioned the Pentagon leaders’ assessments that the White House’s fiscal 2017 budget request is truly enough to fix the deep-seated problems, criticizing their promises that next year’s spending caps will be enough to right the force.
Thornberry said that several service members have told him they’ve started buying “basic supplies” like pens and cleaning products “because otherwise it would take three to four months to get them if they could get them at all.”
“I’d say my concern level was very high when I hear [anecdotes] like that. You have folks out there doing their job and they can’t get a pen from the federal government procurement system.
“It just makes you think ‘my gosh, can’t we do better than this?’”
BostonGlobe: New Balance is renewing its opposition to the far-reaching Pacific Rim trade deal, saying the Obama administration reneged on a promise to give the sneaker maker a fair shot at military business if it stopped bad-mouthing the agreement.
John Tlumacki/Globe Staff/File
New Balance has several Northeast factories, including in Lawrence.
After several years of resistance to the Trans-Pacific Partnership, a pact aimed at making it easier to conduct trade among the United States and 11 other countries, the Boston company had gone quiet last year. New Balance officials say one big reason is that they were told the Department of Defense would give them serious consideration for a contract to outfit recruits with athletic shoes.
But no order has been placed, and New Balance officials say the Pentagon is intentionally delaying any purchase.
New Balance is reviving its fight against the trade deal, which would, in part, gradually phase out tariffs on shoes made in Vietnam. A loss of those tariffs, the company says, would make imports cheaper and jeopardize its factory jobs in New England.
The administration has made the pact a priority. It could be voted on by Congress later this year, though possibly not until after the November elections.
“We swallowed the poison pill that is TPP so we could have a chance to bid on these contracts,” said Matt LeBretton, New Balance’s vice president of public affairs. “We were assured this would be a top-down approach at the Department of Defense if we agreed to either support or remain neutral on TPP. [But] the chances of the Department of Defense buying shoes that are made in the USA are slim to none while Obama is president.”
The administration says the issues of foreign tariffs and of whether the Pentagon should be required to buy shoes made domestically are entirely separate.
New Balance disagrees. Though most of the company’s shoes are made overseas, domestic manufacturing is a big priority for owner Jim Davis, a longtime Republican donor.
FreeBeacon: The address “1209 North Orange Street” in Wilmington, Del., has become known in recent years as the epicenter of U.S. corporate secrecy. The squat, split-level building is the official address of over 285,000 companies, many of which are looking to take advantage of Delaware’s Panama-like secrecy rules, tax incentives, and business-friendly case law.
In the wake of the recent “Panama Papers” scandal, this unassuming brick office has received renewed scrutiny from the Washington Post, the New York Times, the Telegraph, and advocates for corporate tax reform.
But one of its tenants may come as a surprise—a company owned by Democratic presidential frontrunner Hillary Clinton.
Hillary and Bill Clinton quietly set up two shell companies listed at “1209 North Orange Street” in 2008 and 2013, the Washington Free Beacon has found. The names of the companies, but not their location, were first made public in tax filings released by Hillary Clinton last year.
According to records, one of the Clintons’ “1209 North Orange Street” companies is WJC, LLC, which was set up by Bill Clinton in 2008 as a pass-through for his consulting fees.
Another company at the same location, ZFS Holdings, LLC, was set up in February 2013, one week after Hillary Clinton left the State Department. Hillary Clinton received $5.5 million from her book publisher, Simon & Schuster, through the company.
The “1209 North Orange Street” building is the headquarters for the Corporation Trust Company. The firm acts as a registered agent for thousands of corporations that are not actually located in Delaware, including the Clintons’ companies.
Anti-secrecy advocates say the building is prime evidence that Delaware has become a corporate haven that’s comparable to more well-known, offshore locales.
“If you imagined a building with 1,000 corporations in it, you’d imagine a building like the Empire State building,” said Richard Phillips, a senior policy analyst with Citizens for Tax Justice. “But apparently 285,000 companies claim [1209 North Orange Street] is their address.”
“What this shows is this is not really the address of companies that are doing real business. This is the address of a lot of companies that are just shell companies,” he added. “In this case, it doesn’t even look like they have mailboxes. They just claim that address as the places they’re doing business, even though they’re not doing business there.”
Similar registered agents have come under scrutiny in recent years. While campaigning in 2008, President Obama slammed the “Ugland House,” a five-story building in the Cayman Islands that is reportedly home to over 18,000 companies.
“That’s either the biggest building in the world, or the biggest tax scam on record,” said Obama.
The Clinton campaign declined to comment on why the Clintons, who live in New York and have no evident residential ties to Delaware, set up companies in the state. But the presidential candidate isn’t alone. Experts say Delaware is the most popular place to register a company in the United States, due in part to its established system of business case law and tax incentives for intellectual property and real estate holdings.
One of the biggest draws may be the state’s lack of disclosure requirements—businesses can be created completely anonymously, allowing the owners to avoid public detection and even hide income from U.S. authorities.
According to advocates for corporate tax reform, Delaware’s laws rival well-known secrecy havens like the Cayman Islands and Panama.
“General secrecy laws and the ability of these corporations to hide the identities of those who own it, that’s what makes [Delaware] an onshore tax haven, and that’s what makes it just as bad as the Cayman Islands,” said Phillips.
Hillary Clinton has promised to crack down on tax havens on the campaign trail. Referring to the Panama Papers last Wednesday, Clinton condemned “outrageous tax havens and loopholes that super-rich people across the world are exploiting in Panama and elsewhere.”
The Clinton Foundation also has three shell companies in Delaware, according to its amended financial disclosures released last year.
One is the Acceso Fund, LLC, which was registered by the Corporation Trust Company at 1209 North Orange Street in 2009. The Clinton Foundation has used the company to channel money to its Colombia-based private equity fund, Fondo Acceso.
The private equity fund, which is run out of the Clinton Foundation’s Bogota office, has invested in telecom and food processing companies in Colombia, the Free Beaconreported last November.
Another Clinton Foundation company, Acceso Worldwide Fund, Inc., was registered in 2013 by the Corporation Services Company, located in Wilmington, Delaware.
A third company, the Haiti Development Fund, LLC, was registered in 2010 by National Corporate Research, Ltd, located in Dover.
In Delaware, limited liability companies such as WJC, LLC, and ZFS, LLC, are not required to file annual statements disclosing their directors or owners. The Clintons also registered both companies in New York after they were established.
There is no evidence the Clintons are using the entities for any nefarious purposes, and it is perfectly legal for non-residents to set up corporations in Delaware. But even if corporations stay within the law, critics say Delaware shell companies can sometimes be used to legally circumvent taxes in other states.
According to a report published last December by the Institute on Taxation and Economic Policy, Delaware’s popularity as a hub for shell companies is “responsible for the loss of billions of dollars in revenue in other U.S. states.”
“It’s legal tax avoidance,” said Phillips. “We would say it’s immoral, or not the best thing for the country.”
Anti-secrecy advocates also say the laws make it easier for criminals to evade federal taxes or finance terrorism, all under the radar of the public and U.S. authorities.
“Some anonymous shell companies have financed terrorism and supported corruption and human trafficking and Delaware is a traditional hub for creating these fake companies,” said Andrew Hanauer, campaign director at the Jubilee USA Network.
Jubilee USA Network and other groups have been advocating for legislative reform. Sen. Sheldon Whitehouse (D., R.I.), Rep. Peter King (R., N.Y.), and Rep. Carolyn Maloney recently put forward legislation that would force U.S. companies to disclose their actual owners.
The Clinton campaign did comment on whether Hillary Clinton supports the legislation. The campaign also did not comment on whether she or Bill Clinton have any other companies registered in Delaware.
But the concerns over corporate secrecy and tax avoidance have trickled into the Democratic presidential race, with Sen. Bernie Sanders incorporating it into his stump speeches. Clinton has also railed against tax havens on the trail and vowed to take action.
“Some of you may have just heard about these disclosures about outrageous tax havens and loopholes that super-rich people across the world are exploiting in Panama and elsewhere,” said Clinton during a campaign event last Wednesday.
“Now some of this behavior is clearly against the law, and anyone who violates the law anywhere should be held accountable,” she added. “But it’s also scandalous how much is actually legal.”
Al-Sharbi is one of 80 remaining detainees at Guantanamo Bay. His public record includes his graduation from Embry-Riddle Aeronautical University, reported association with other al-Qaeda members and alleged attendance at training camps in Afghanistan.
John Tlumacki/Globe Staff/File