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Allegations Regarding Vince Foster, the NSA, and Banking Transactions Spying, Part III

by J. Orlin Grabbe


The sequence of events leading the banking software company Systematics (ALLTEL Information Services) to hire a libel attorney to deny it was operating on behalf of the U.S. National Security Agency (NSA) began more than a decade ago.

In the early 1980s, the War on (Some) Drugs and the War on (Some) Terrorists led to various U.S. government initiatives to "follow the money."

A Senate subcommittee recommended that the Treasury Department should work with the "Federal Reserve Board to develop a better understanding of the financial significance and use of currency repatriation data as well as information about foreign depositors' currency deposits." (U.S. Senate Permanent Subcommittee on Investigations, *Crime and Secrecy: The Use of Offshore Banks and Companies*, U.S. Government Printing Office, February 1983.)

Over at the National Security Council, Norman A. Bailey, an economist who understood the electronic flow of money through SWIFT, Fedwire, and CHIPS, urged the involve- ment of the National Security Agency (NSA), the Ft. Meade-based Defense Department agency for signals intelligence and communications security.

Bailey "confirms that within a few years the National Security Agency . . . had begun vacuuming up mountains of data by listening in on bank wire traffic. It became a joint effort of several Western governments with the Israelis playing a leading role, since they were the main target of terrorism" (James R. Norman, "Fostergate").

The NSA proceeded to jack into Fedwire, CHIPS, and Swift. Doing so would be a priority if the aim was to monitor banking transactions. But even while essential, this in itself would be of limited utility without further information. What is the use of monitoring interbank transfers that are DES-encrypted? And even if you break the code, or have the keys, what remains is a money amount transferred from one account number at one bank to another account number at another bank. Who owns the accounts?

One way of finding out was the CIA method: to sneak agents working under cover as computer hardware or software suppliers into computer rooms. Sometimes a lowly computer programmer has more access to banking information than does a senior executive, so this method could enable one to piece together account names and customer information with account numbers. But such an approach is not efficient. Efficient spying implies access at all times.

The evidence indicates that at some point NSA made the logical decision that continual access meant the NSA had to become a major provider of banking software.

James R. Norman, Senior Editor at Forbes--in an article entitled "Fostergate," an article scheduled to appear in the May issue of Forbes, but killed at the last minute by Steve Forbes, apparently through the persuasive urging of Casper Weinberger, the former Defense Secretary who is Publisher Emeritus at Forbes--makes specific allegations about several companies which may have become part of such an NSA operation, and about the role of Vincent Foster:

"Forbes' sources say that since at least the late 1970s, Foster had been a silent, behind-the-scenes overseer on behalf of the NSA for a small Little Rock, Ark., bank data processing company. Its name was Systematics Inc., launched in 1967 [ 1968? ] and funded and controlled for most of its life by Arkansas billionaire Jackson Stephens, a 1946 Naval Academy graduate. Foster was one of Stephens' trusted deal- makers at the Rose Law Firm, where he was partner with Hillary Rodham Clinton, Webster Hubbell and William Kennedy (whose father was a Systematics director). Hubbell also played an overseer role at Systematics for the NSA for some years according to intelligence sources.

"Systematics has had close ties to the NSA and CIA ever since its founding, sources say, as a money-shuffler for covert operations. It is no secret that there were billions of dollars moving around in 'black' accounts--from buying and selling arms to the Contras, Iran, Iraq, Angola and other countries to paying CIA operatives and laundering money from clandestine CIA drug dealing. Having taken over the complete computer rooms in scores of small U.S. banks as an 'outsource' supplier of data processing, Systematics was in a unique position to manage that covert money flow. Sources say the money was moved at the end of every day disguised as a routine bank-to-bank balancing transaction.... ....

"Systematics' money-laundering role for the intelligence community might help explain why Jackson Stephens tried to take over Washington-based Financial General Bankshares in 1978 on behalf of Arab backers of the Bank of Credit and Commerce International. BCCI's links to global corruption and intelligence operations has been well documented, though many mysteries remain.

"According to a lawsuit filed by the Securities and Exchange Commission, Stephens insisted on having then-tiny Systematics brought in to take over all the bank's data processing. Representing Systematics in that 1978 SEC case: Hillary Rodham Clinton and Webster Hubbell. Stephens was blocked in that takeover. But FGB, later renamed First American, ultimately fell under the domination of BCCI through Robert Altman and former Defense Sec. Clark Clifford. According to a technician who worked at First American in Atlanta, Systematics became a key computer contractor there anyway.

"In the 1980s Systematics' business boomed. When it first sold stock to the public in 1983, revenues were $64 million. That had risen to $230 million by the time Stephens arranged Systematics' sale to Alltel Corp., a telephone holding company which then moved its headquarters to Little Rock. Last year Systematics sales hit $861 million--a third of Alltel's total. Stephens now owns more than 8% of Alltel and wields significant influence over the company. ....

"Another curious company is Arkansas Systems, founded in 1974 by Systematics employee and former U.S. Army 'analyst' John Chamberlain. Located just down the road from Systematics, Arkansas Systems specializes in computer systems for foreign wire transfer centers and central banks. Among its clients, Russia and China, according to Arkansas Systems president James K. Hendren, a physicist formerly involved with the Safeguard anti-missile system. Arkansas Systems was one of the first companies to receive funding from the Arkansas Development Finance Authority, an agency created by then Gov. Bill Clinton that is now coming under congressional scrutiny.

"What does Alltel have to say about all this? 'I've never heard anything so asinine in all my life,' steams Joe T. Ford, Alltel's chairman and the father of Jack Stephens' chief administrative aide."

Charles O. Morgan, on the other hand, claims omniscience with respect to what did not happen with respect to Systematics.

[to be continued]

First Posted to the Internet July 3, 1995
Web Page: http://www.aci.net/kalliste/