September 10, 2008
The Hidden Bailout Of $1.4 Trillion In Fannie / Freddie Credit-Default Swaps
by Daniel Amerman
Something extraordinary happened on Monday, September the 8th, 2008. The government takeover of Fannie Mae and Freddie Mac triggered the pending settlement of $1.4 trillion in credit-default swaps. This single event could have led to a cascading series of failures that might have bankrupted Wall Street – and much of the rest of the financial world – by the end of the week. That isn’t happening, and indeed, the media is treating this as something close to a non-event. However, a very real $1.4 trillion event happened – whose resolution effectively constitutes one of the largest government bailouts in history. Nobody noticed, for even though this is occurring in “plain sight”, the simple fact is that few people outside of the financial industry understand the $600 trillion derivative securities market. In this article, written the day after the event, we will briefly explain why this hidden, massive bailout – not of Fannie and Freddie but of the financial derivatives industry – is hugely significant, with potentially profound – and arbitragable – implications for the dollar, the markets and your personal financial future.
What Did NOT Happen
(These first several paragraphs in italics do not describe what did happen, but rather what could have happened in an alternate universe in which we actually had a free market that functioned without massive government interventions.)
The financial news of the day was that Fannie Mae and Freddie Mac were both unable to make debt payments and had defaulted on $5 trillion in bonds and mortgage-backed securities. With the US real estate market having fallen $4 trillion in the previous two years (non inflation-adjusted), it should have been no surprise that these two highly leveraged companies were not able to absorb the staggering losses. As this became clear to the markets, Fannie and Freddie lost the ability to borrow – which their survival was based upon – and actual default followed soon after. This default immediately triggered settlements on $1.4 trillion in credit-default swaps (credit derivatives), which had been entered into by major financial firms who had promised – in exchange for lucrative fee income – that if Fannie Mae or Freddie Mac were to default, these guarantor firms would make good on the defaulted bonds.
As the value of Fannie Mae and Freddie Mac debt plunged to 30 cents on the dollar, this meant that there was a 70% loss on the bonds (if one could find a buyer at all). This then triggered a call for settlement on the $1.4 trillion in credit-default swaps outstanding. Because the debt of the two former titans of the financial world was trading at a 70% discount compared to par value, this meant that total credit losses were $1 trillion ($1.4 trillion X 70% = $1 trillion). This meant $1 trillion worth of payments was due from the companies that had guaranteed the value of this debt, through their entering into credit-default swaps.
Settlement was triggered, but as the credit-default swap beneficiaries soon found out, collecting their settlements was an entirely different matter. The financial institutions around the world who had guaranteed Fannie and Freddie in exchange for lucrative corporate fee income (and multi-million dollar individual bonuses) were all highly leveraged themselves (indeed, weaker than the companies they were guaranteeing), and absolutely reliant on the day to day availability of large lines of credit and general borrowing capacity. As the creditors of these financial giants realized that a trillion dollar hit was barreling straight at them, they pulled their financing. Having to repay or replace these loans, without being able to sell massive portfolios of illiquid assets in a market suddenly devoid of buyers, left nearly every major investment bank and commercial bank in the United States and Europe unable to meet their obligations – even before settlement of their trillion dollar credit-default swap losses.
The failure of the major financial firms triggered another massive round of credit-default swap events, with amounts well over $10 trillion by Thursday, and over $20 trillion by Friday. By that time, however, no one was naïve enough to expect actual payment on those swaps, as Wall Street and the rest of the world’s financial hubs had all been insolvent since Wednesday. When the markets eventually opened for business again more than two months later, the official drop in the Dow Jones Industrial Average was over 10,000 points, meaning the index was trading at a level in the 1,000 – 1,500 range.
What Did Happen
“They say there are no atheists in a foxhole. Well, there are no libertarians in a financial crisis, either.”
Jeffrey Frankel, Harvard economist
The above scenario is what might have happened if we took the naïve perspective that markets actually function on their own without government intervention, and that corporations take the consequences for their own bad decisions, in exchange for the profits that come from their good decisions. That is of course a hypothetical world that has little to do with current global financial markets.
If you want a glimpse of the real world future, and what is happening as the same flawed business model that destroyed the $1.2 trillion subprime mortgage derivative securities market now threatens the over $60 trillion credit derivatives market, then we need to look no further than what actually happened with the $1.4 trillion worth of Fannie Mae and Freddie Mac credit default swaps. The companies were taken into conservatorship on September 6th. They have effectively failed even if legally there are some different ways of phrasing it. As reported by Bloomberg on September 8th, that led to a unanimous agreement by 13 Wall Street firms on Monday, September 7, 2008, that settlement of $1.4 trillion in credit default swaps had been triggered.
If Fannie Mae and Freddie Mac had actually failed to make payments on their debt – the consequences would have quite likely destroyed Wall Street right there. As illustrated in the scenario above, there simply isn’t a big enough capital base on Wall Street to absorb a trillion dollars in losses in a week, particularly once your creditors catch on to what is happening. Much smaller losses from subprime mortgage derivatives incrementally dribbling out over the course of the year, still might have taken down Wall Street, had it not been for the ability to hide losses in Tier Three assets (with the full complicity of the government), as well as the reassurances that the Federal Reserve provided by so swiftly bailing out Bear Stearns via JP Morgan, when a creditor driven bankruptcy (as described above) threatened to take down a major player.
Of course, the hypothetical collapse did not happen. The meltdown was averted because the federal government proactively and aggressively intervened to keep a financial disaster from taking down Wall Street (just as it did with Bear Stearns, and Long Term Capital Management the decade before). When the situation started to get bad, the federal government stepped in and – even if they still are hedging a bit legally – effectively guaranteed the debt of Fannie Mae and Freddie Mac.
Which means that they also – and this is crucial – bailed out the firms who had guaranteed the $1.4 trillion in credit derivatives. There may very well be losses, perhaps significant losses, but there would be no catastrophic loss there, that would threaten the viability of the financial system. Because what has really happened is that you have replaced a credit default swap on a quasi-governmental agency, that being Fannie Mae or Freddie Mac, with a credit default swap on the full faith and credit of the United States government. If the US guarantee had not been substituted then it would be a catastrophic failure. But because the US guarantee was substituted, it’s seemingly not a big deal, though much remains to be worked out.
In other words, the biggest beneficiaries of the $1.4 trillion Fannie and Freddie bailout were not Fannie or Freddie at all, but the Wall Street firms whose senior officers just happen to be major political contributors to both political parties – with some of those senior officers also running the Treasury Department on a revolving door basis.
How the ending valuation of the credit default swaps for settlement purposes will work out is a fascinating question. Arguably you could say that the value of Fannie and Freddie debt just rose, not only in comparison to prices during the recent financial turmoil, but also compared to par value. After all, we have just gone from quasi-governmental debt to something that is much closer to being explicitly a full faith and credit obligation of the United States Government, which means we should be losing part of the small spread that Fannie and Freddie traded at as quasi-governmental debt over direct governmental debt yields. From this perspective, one could say that the United States stepping in and taking over actually improves credit quality and the value of the bonds, so there is no loss at all – but a gain.
However there still remains a level of uncertainty, as the debt has not explicitly been made full faith and credit of the United States government. There’s a taint involved, and there could be liquidity issues – as investors typically are not too fond of even small uncertainties. So there’s a good chance the ending value will end up somewhere in the 90s – perhaps very close to par or perhaps a little bit further away. Wherever the ultimate settlement prices, however, it will not be a massive loss, because what has really happened is that a swap has indeed taken place, and the United States government bailed Wall Street out of self-inflicted credit swap-driven destruction, through preemptively swapping its guarantee for the guarantees by Fannie Mae and Freddie Mac.
The real implication of this then is that there is no danger from credit default swaps directly taking down Wall Street, so long as the federal government is willing to aggressively intervene every time there is a potential failure. I think we can see a clear path to the future here.
Where Did That Trillion Come From?
Before going any further, let’s stop and ask a simple question.
Where did the money for the bailout come from?
How did a strapped federal government come up with the trillions (if need be) to make good on all of Fannie Mae and Freddie Mac’s obligations?
How did a government that is already running over a $400 billion deficit so smoothly and easily come up with an extra trillion dollars or two, if needed? (With the $400 billion being based upon government accounting standards whose usage would get an individual or private firm thrown in prison. The deficit is far, far higher when unfunded retirement obligations are taken into account.)
And, for that matter, now that we’re on the subject – where did the government come up with the money for the $170 billion “tax rebate”?
How about that $59 trillion number for unfunded retirement related government obligations that keeps being bandied around? (The real number is a good bit higher as I cover in my article “The $2 Million Opportunity.”)
Where does the government come up with all that money, anyway?
The answer is simple – there is an unlimited supply of dollars. When you issue your own currency, and you are sufficiently determined, then there is an infinite supply of money available. Which could be a very good thing(?), for the Fannie Mae and Freddie Mac credit-default swaps are only one small part of a much larger market – and much larger risk. As we will discuss later in the article, however, while the supply of money is infinite, the value of that money is a different matter.
Taking Full Advantage Of Implicit Government Guarantees
Once you understand that the supplyof money is effectively infinite for a sufficiently grave emergency, then you are ready for the next step in understanding some recent events which might otherwise seem indecipherable. From some perspectives, this near catastrophe which could have so easily taken down all of Wall Street (had the federal government not intervened), was not a catastrophe at all. It was instead a highly successful experiment. For the many firms which purportedly took on the risk in creating $1.4 trillion of credit-default swaps for Fannie Mae and Freddie Mac did not do so for the fun of it or out of the goodness of their hearts. They did so because they got paid enormous sums of money for purportedly taking on all those risks. With much of that money quite directly passing through to the already wealthy individuals involved.
If Fannie and Freddie had not run into problems then the guarantor financial firms would have just pocketed all of their fees, ultimately as pure profit. Instead of that, a worst case scenario occurred that arguably should have destroyed every one of the firms involved in this business – and would have likely done so if there had genuinely been a free market involved.
What the experiment proved was that as long as the risk that you take is big enough, then the federal government and your former coworkers down at the Treasury Department can be absolutely relied upon to bail you out. Now, Wall Street felt this was likely already the case. It was kind of a shame to lose a firm like Bear Stearns, but the good part about it was it proved that a major derivatives market failure wouldn’t be allowed to occur, as was remarked upon in the article from last month quoted below:
“Government intervention has saved the $62 trillion credit derivatives market from facing the nightmare of counterparty failure during the credit crisis of the past year…
After the government backed rescue of Bear Stearns, the market views other major derivative counterparties as also “too big to fail”, and this implicit support… means the credit derivatives market will likely be spared the ultimate test.”
Reuters (Karen Brettell), August 7, 2008
With the takeover of Fannie Mae and Freddie Mac, the markets have been shown to be correct, and the reliability of the government bailout occurring has now been proven on a much larger scale. If the dollar amount is great enough, then no individual firm has to go down. Instead the United States Treasury and/or Federal Reserve will preemptively step in, and effectively make every one whole (or close thereto), perhaps without even affecting Wall Street bonuses.
The principle is very simple. Take huge risks that you know cannot possibly pay out if you lose. In fact – that’s the key to the whole transaction. The risks have to be so large that you cannot afford to lose, and the economy and markets cannot afford for you to lose. Then one of two things happens. Either the risk event does not come about and you make an extraordinary amount of money as an individual and as a firm for having taken on this huge amount of risk. Or the risk happens and you have to pay out. Except you really don’t, because you can’t afford to pay out and you have effectively blackmailed the rest of the population through being too big to fail. Then the government steps in and bails you out. Except it’s not really the government, because the government can’t truly do that, it is the rest of the population which bails you out.
Situations like this are sometimes referred to as “moral hazard” – a weak and theoretical sounding term for an insider’s game of global economic blackmail that is growing at a rate much faster than the overall global economy. The cozy relationship between Wall Street and regulators is crucial, and much of the massive, hidden derivatives bailout that just occurred can be explained by looking at just who the chief “cop” is. US Treasury Secretary Henry Paulson built his half billion dollar personal fortune as the former head of Goldman Sachs, meaning he was chief executive of one of the world’s leading derivatives players.
Making Sense Of The Irrational
It is only when you understand the game that is being played, that the actions of Wall Street and much of the rest of the financial world after the subprime mortgage crisis becomes clear.
The subprime mortgage derivates experiment failed spectacularly. The firms that were creating these derivative securities and the rating firms who were rating them were making numerous and obvious mistakes. Yet once the fundamentally flawed business model was disproven – the world did not move away from derivative securities. Oh, they stopped creating new subprime mortgage derivatives, but when we look at the arguably much riskier credit derivatives market (this greater risk is explored in my article “Credit Derivatives Dangers In 2008 & Beyond – A Primer”), the market grew from $35 trillion in outstanding credit derivatives in July 2007 — the same time it was becoming clear that something was going very badly wrong in the subprime mortgage derivatives market — to a current level of about $62 trillion. In other words the market reacted to the real world proof that these things don’t actually work, by almost doubling the amount in existence in one year. Indeed, the amount of credit derivatives outstanding grew at an annual rate that was about twice the size of the entire United States economy.
Now if you are an academic modeling a hypothetical world of free markets and rational behavior by sophisticated investors keeping the markets safe and fairly valued for all involved, this would make no sense whatsoever. Rational investment firms ought to be fleeing markets like credit derivatives – not doubling up on an already failed experiment.
The reason? It’s the best game in town. Take a huge amount of risk, be paid exceedingly well for it and if you screw up — you have absolute proof that the government will come in and bail you out at the expense of the rest of the population (who did not share in your profits in the first place).
Investing For The Bailout, Not The Crisis
Once we recognize that what is happening here is not a massive credit default, but a monetization by the US government of those losses on a potentially multi-trillion dollar scale, then our investment strategy changes dramatically. We are no longer investing for the crisis – but for the bailout. The combination of this bailout and the Federal Reserves unprecedented actions in forcing interest rates so far below the rate of inflation creates a “target-rich environment” for the execution of arbitrage strategies by both corporate and individual investors.
The federal government is not going to let the financial system fail. It will create however much money needs to be created to bail out the institutions and attempt to bailout the economy, as it has already shown in real world test after test, from the so-called “tax rebate”, to Bear Stearns, to Fannie Mae and Freddie Mac. Which means that the government is prepared to destroy the dollar, and is not just prepared to, but is currently actively destroying the value of the dollar rather than let those firms fail. So the way you invest for the failure of an out of control derivatives market is to invest for the destruction of the dollar. Which means taking on new tools for a new time.
Four Steps To Creating Wealth From Catastrophe
The first step in creating wealth in an unfair world – is to avoid getting cheated. If you are investing money at short term rates of 1%, 2% or even 5%, while the value of your money is eroding at 9% a year, then you are being deliberately played for a sucker, and cheated out of the value of your money by the Federal Reserve.
Not that secret meetings are being held and an explicit agreement is being made to “get the little guys”. It’s just that sacrifices have to be made for the greater good to try to avert a catastrophic market meltdown, and that means that trusting individual investors get paid a negative interest rate on their money (after adjusting for inflation), while paying taxes on (economically) non-existent income for the privilege. Keep in mind as well that one of the purposes in destroying the value of your money is to keep the prices on financial assets propped above where they would otherwise be, if genuine market forces were setting short term interest rates. Which means that you are systematically overpaying for financial assets compared to actual fundamental values, and are getting played for a sucker there as well, to the extent that you are not being subsidized with below (real) market rates like the banks, investment banks and hedge funds. (See my article “Fed Manipulations Subsidize Wall Street & Cheat Investors” for more on this.)
The second step to turning financial catastrophe into personal wealth requires understanding one simple thing – which most investors do not. Inflation does not destroy real wealth, at least not directly. Inflation redistributes real wealth. Indeed, inflation can be used by individuals to quite directly take real wealth from both financial institutions and other individuals, as I illustrate in my (slightly twisted) morality tale “Inflation Pickpocket”. (To add insult to injury, those doing the pocket picking can often do so tax-free, even while their victims pay real taxes on illusory income.)
The third step is to understand that wealth redistribution on a massive scale creates personal opportunity on a massive scale. John Paulson (no relation to Treasury Secretary Henry Paulson) saw the crisis that was coming in subprime mortgages, researched and educated himself on this area (which had not been his field of expertise), and he turned the crisis into a $3-$4 billion personal payday in 2007. If you’re not a hedge fund manager like John Paulson, you may not have the tools that he used to turn a market crisis into personal billions. That’s OK, because Paulson didn’t start with the tools either. He started with educating himself and learning about a new area, until he came up with a novel way to profit from disaster. A method that wasn’t in the financial textbooks, and that he didn’t find by reading a financial columnist in the paper.
Next you need to understand that you personally may have more tools than you may think, some of which may surprise you. Tools which can give you the opportunity to turn financial disaster into personal net worth. There are ways you can use those tools to turn the destruction of the currency into perhaps the greatest real wealth-building opportunity of your life, on a long-term and tax-advantaged basis. But, if you want this to happen –you will need to start with learning. That is the irreplaceable fourth step. You are going to have to educate yourself, and work to not just understand, but to master some of the financial forces and methods in play here. You will have to learn how to turn the destruction of paper wealth into real wealth. With Turning Inflation Into Wealth being the key to this next step. My best wishes to you for turning this challenge into an extraordinary personal opportunity.
“SPIN” how television is used as a tool of social control to distort and limit the American public’s perception of reality.
Artist Brian Springer spent a year scouring the airwaves with a satellite dish grabbing back channel news feeds not intended for public consumption. The result of his research is SPIN, one of the most insightful films ever made about the mechanics of how television is used as a tool of social control to distort and limit the American public’s perception of reality.
Take the time to watch it from beginning to end and you’ll never look at TV reporting the same again. Tell your friends about it. This extraordinary film released in the early 1990s is almost completely unknown. Hopefully, the Internet will change that.
Twenty-Five Ways To Suppress Truth: The Rules of Disinformation
by H. Michael Sweeney
(c) 1997, 2000, 2001 All rights reserved
Permission to reprint/distribute hereby granted for any non commercial use provided information reproduced in its entirety and with author information in tact. For more Intel/Shadow government related info, visit the Author’s Web site: http://www.proparanoid.com
Built upon Thirteen Techniques for Truth Suppression by David Martin, the following may be useful to the initiate in the world of dealing with veiled and half-truth, lies, and suppression of truth when serious crimes are studied in public forums. This, sadly, includes every day news media, one of the worst offenders with respect to being a source of disinformation. Where the crime involves a conspiracy, or a conspiracy to cover up the crime, there will invariably be a disinformation campaign launched against those seeking to uncover and expose the truth and/or the conspiracy. There are specific tactics which disinfo artists tend to apply, as revealed here. Also included with this material are seven common traits of the disinfo artist which may also prove useful in identifying players and motives. The more a particular party fits the traits and is guilty of following the rules, the more likely they are a professional disinfo artist with a vested motive. People can be bought, threatened, or blackmailed into providing disinformation, so even “good guys” can be suspect in many cases.
A rational person participating as one interested in the truth will evaluate that chain of evidence and conclude either that the links are solid and conclusive, that one or more links are weak and need further development before conclusion can be arrived at, or that one or more links can be broken, usually invalidating (but not necessarily so, if parallel links already exist or can be found, or if a particular link was merely supportive, but not in itself key) the argument. The game is played by raising issues which either strengthen or weaken (preferably to the point of breaking) these links. It is the job of a disinfo artist to interfere with these evaluation… to at least make people think the links are weak or broken when, in truth, they are not… or to propose alternative solutions leading away from the truth. Often, by simply impeding and slowing down the process through disinformation tactics, a level of victory is assured because apathy increases with time and rhetoric.
It would seem true in almost every instance, that if one cannot break the chain of evidence for a given solution, revelation of truth has won out. If the chain is broken either a new link must be forged, or a whole new chain developed, or the solution is invalid an a new one must be found… but truth still wins out. There is no shame in being the creator or supporter of a failed solution, chain, or link, if done with honesty in search of the truth. This is the rational approach. While it is understandable that a person can become emotionally involved with a particular side of a given issue, it is really unimportant who wins, as long as truth wins. But the disinfo artist will seek to emotionalize and chastise any failure (real or false claims thereof), and will seek by means of intimidation to prevent discussion in general.
Twenty-Five Rules of Disinformation ~
1. Hear no evil, see no evil, speak no evil
2. Become incredulous and indignant
3. Create rumor mongers
4. Use a straw man
5. Sidetrack opponents w name calling, ridicule
6. Hit and Run
7. Question motives
8. Invoke authority
9. Play Dumb
10. Associate opponent charges with old news
11. Establish and rely upon fall-back positions
12. Enigmas have no solution
13. Alice in Wonderland Logic
14. Demand complete solutions
15. Fit the facts to alternate conclusions
16. Vanish evidence and witnesses
17. Change the subject
18. Emotionalize, Antagonize, and Goad
19. Ignore facts, demand impossible proofs
20. False evidence
21. Call a Grand Jury, Special Prosecutor
22. Manufacture a new truth
23. Create bigger distractions
24. Silence critics
Eight Traits of The Disinformationalist ~
6. Artificial Emotions
8. Newly Discovered: Time Constant
It is the disinfo artist and those who may pull their strings (those who stand to suffer should the crime be solved) MUST seek to prevent rational and complete examination of any chain of evidence which would hang them. Since fact and truth seldom fall on their own, they must be overcome with lies and deceit. Those who are professional in the art of lies and deceit, such as the intelligence community and the professional criminal (often the same people or at least working together), tend to apply fairly well defined and observable tools in this process. However, the public at large is not well armed against such weapons, and is often easily led astray by these time-proven tactics. Remarkably, not even media and law enforcement have NOT BEEN TRAINED to deal with these issues. For the most part, only the players themselves understand the rules of the game.
This why concepts from the film, Wag-The-Dog, actually work. If you saw that movie, know that there is at least one real-world counterpart to Al Pacino’s character. For CIA, it is Mark Richards, who was called in to orchestrate the media response to Waco on behalf of Janet Reno. Mark Richards is the acknowledged High Priest of Disinformation. His appointment was extremely appropriate, since the CIA was VERY present at Waco from the very beginning of the cult to the very end of their days — just as it was at the People’s Temple in Jonestown. Richards purpose in life is damage control.
For such disinformationalists, the overall aim is to avoid discussing links in the chain of evidence which cannot be broken by truth, but at all times, to use clever deceptions or lies to make select links seem weaker than they are, create the illusion of a break, or better still, cause any who are considering the chain to be distracted in any number of ways, including the method of questioning the credentials of the presenter. Please understand that fact is fact, regardless of the source. Likewise, truth is truth, regardless of the source. This is why criminals are allowed to testify against other criminals. Where a motive to lie may truly exist, only actual evidence that the testimony itself IS a lie renders it completely invalid. Were a known ‘liar’s’ testimony to stand on its own without supporting fact, it might certainly be of questionable value, but if the testimony (argument) is based on verifiable or otherwise demonstrable facts, it matters not who does the presenting or what their motives are, or if they have lied in the past or even if motivated to lie in this instance — the facts or links would and should stand or fall on their own merit and their part in the matter will merely be supportive.
Moreover, particularly with respects to public forums such as newspaper letters to the editor, and Internet chat and news groups, the disinfo type has a very important role. In these forums, the principle topics of discussion are generally attempts by individuals to cause other persons to become interested in their own particular position, idea, or solution — very much in development at the time. People often use such mediums as a sounding board and in hopes of pollination to better form their ideas. Where such ideas are critical of government or powerful, vested groups (especially if their criminality is the topic), the disinfo artist has yet another role — the role of nipping it in the bud. They also seek to stage the concept, the presenter, and any supporters as less than credible should any possible future confrontation in more public forums result due to their early successes. You can often spot the disinfo types at work here by the unique application of “higher standards” of discussion than necessarily warranted. They will demand that those presenting arguments or concepts back everything up with the same level of expertise as a professor, researcher, or investigative writer. Anything less renders any discussion meaningless and unworthy in their opinion, and anyone who disagrees is obviously stupid — and they generally put it in exactly those terms.
So, as you read any such discussions, particularly so in Internet news groups (NG), decide for yourself when a rational argument is being applied and when disinformation, psyops (psychological warfare operations) or trickery is the tool. Accuse those guilty of the later freely. They (both those deliberately seeking to lead you astray, and those who are simply foolish or misguided thinkers) generally run for cover when thus illuminated, or — put in other terms, they put up or shut up (a perfectly acceptable outcome either way, since truth is the goal.) Here are the twenty-five methods and seven traits, some of which don’t apply directly to NG application. Each contains a simple example in the form of actual (some paraphrased for simplicity) from NG comments on commonly known historical events, and a proper response. Accusations should not be overused — reserve for repeat offenders and those who use multiple tactics. Responses should avoid falling into emotional traps or informational sidetracks, unless it is feared that some observers will be easily dissuaded by the trickery. Consider quoting the complete rule rather than simply citing it, as others will not have reference. Offer to provide a complete copy of the rule set upon request (see permissions statement at end):
Twenty-Five Rules of Disinformation ~
Note: The first rule and last five (or six, depending on situation) rules are generally not directly within the ability of the traditional disinfo artist to apply. These rules are generally used more directly by those at the leadership, key players, or planning level of the criminal conspiracy or conspiracy to cover up.
(1) Hear No Evil, See No Evil, Speak No Evil ~ Regardless of what you know, don’t discuss it — especially if you are a public figure, news anchor, etc. If it’s not reported, it didn’t happen, and you never have to deal with the issues.
Example: Media was present in the courtroom (Hunt vs. Liberty Lobby) when CIA agent Marita Lorenz ‘confession’ testimony regarding CIA direct participation in the planning and assassination of John Kennedy was revealed. All media reported was that E. Howard Hunt lost his libel case against Liberty Lobby (Liberty Lobby’s newspaper, The Spotlight, had reported Hunt was in Dallas that day and were sued for the story). See Mark Lane’s remarkable book, Plausible Denial, for the full confessional transcript.
Proper response: There is no possible response unless you are aware of the material and can make it public yourself.. In any such attempt, be certain to target any known silent party as likely complicit in a cover up. In this case, it would be the entire Time-Warner Media Group, among others. This author is relatively certain that reporters were hand-picked to cover this case from among those having intelligence community ties.
(2) Become Incredulous and Indignant ~ Avoid discussing key issues and instead focus on side issues which can be used show the topic as being critical of some otherwise sacrosanct group or theme. This is also known as the ‘How dare you!’ gambit.
Example: ‘How dare you suggest that the Branch Davidians were murdered! the FBI and BATF are made up of America’s finest and best trained law enforcement, operate under the strictest of legal requirements, and are under the finest leadership the President could want to appoint.’
Proper response: You are avoiding the Waco issue with disinformation tactics. Your high opinion of FBI is not founded in fact. All you need do is examine Ruby Ridge and any number of other examples, and you will see a pattern of abuse of power that demands attention to charges against FBI/BATF at Waco. Why do you refuse to address the issues with disinformation tactics (rule 2 – become incredulous and indignant)?
(3) Create Rumor Mongers ~ Avoid discussing issues by describing all charges, regardless of venue or evidence, as mere rumors and wild accusations. Other derogatory terms mutually exclusive of truth may work as well. This method which works especially well with a silent press, because the only way the public can learn of the facts are through such ‘arguable rumors’. If you can associate the material with the Internet, use this fact to certify it a ‘wild rumor’ from a ‘bunch of kids on the Internet’ which can have no basis in fact.
‘You can’t prove his material was legitimately from French Intelligence. Pierre Salinger had a chance to show his ‘proof’ that flight 800 was brought down by friendly fire, and he didn’t. All he really had was the same old baseless rumor that’s been floating around the Internet for months.’
Proper response: You are avoiding the issue with disinformation tactics. The Internet charge reported widely is based on a single FBI interview statement to media and a similar statement by a Congressman, neither of which had actually seen Pierre’s document. As the FBI is being accused in participating in a cover up of this matter and Pierre claims his material is not Internet sourced, it is natural that FBI would have reason to paint his material in a negative light. For you to assume the FBI to have no bias in the face of Salinger’s credentials and unchanged stance suggests you are biased. At the best you can say the matter is in question. Further, to imply that material found on Internet is worthless is not founded. At best you may say it must be considered carefully before accepting it, which will require addressing the actual issues. Why do you refuse to address these issues with disinformation tactics (rule 3 – create rumor mongers)?
(4) Use a Straw Man ~ Find or create a seeming element of your opponent’s argument which you can easily knock down to make yourself look good and the opponent to look bad. Either make up an issue you may safely imply exists based on your interpretation of the opponent/opponent arguments/situation, or select the weakest aspect of the weakest charges. Amplify their significance and destroy them in a way which appears to debunk all the charges, real and fabricated alike, while actually avoiding discussion of the real issues.
Example: When trying to defeat reports by the Times of London that spy-sat images reveal an object racing towards and striking flight 800, a straw man is used. The disinformationalist, later identified as having worked for Naval Intelligence, simply stated: ‘If these images exist, the public has not seen them. Why? They don’t exist, and never did. You have no evidence and thus, your entire case falls flat.’
Proper response: ‘You are avoiding the issue with disinformation tactics. You imply deceit and deliberately establish an impossible and unwarranted test. It is perfectly natural that the public has not seen them, nor will they for some considerable time, if ever. To produce them would violate national security with respect to intelligence gathering capabilities and limitations, and you should know this. Why do you refuse to address the issues with such disinformation tactics (rule 4 – use a straw man)?’
(5) Sidetrack Opponents with Name-Calling and Ridicule ~ This is also known as the primary ‘attack the messenger’ ploy, though other methods qualify as variants of that approach. Associate opponents with unpopular titles such as ‘kooks’, ‘right-wing’, ‘liberal’, ‘left-wing’, ‘terrorists’, ‘conspiracy buffs’, ‘radicals’, ‘militia’, ‘racists’, ‘religious fanatics’, ‘sexual deviates’, and so forth. This makes others shrink from support out of fear of gaining the same label, and you avoid dealing with issues.
Example: ‘You believe what you read in the Spotlight? The Publisher, Willis DeCarto, is a well-known right-wing racist. I guess we know your politics — does your Bible have a swastika on it? That certainly explains why you support this wild-eyed, right-wing conspiracy theory.’
Proper response: ‘You are avoiding the issue with disinformation tactics. Your imply guilt by association and attack truth on the basis of the messenger. The Spotlight is well known Populist media source responsible for releasing facts and stories well before mainstream media will discuss the issues through their veil of silence. Willis DeCarto has successfully handled lawsuits regarding slanderous statements such as yours. Your undemonstrated charges against the messenger have nothing to do with the facts or the issues, and fly in the face of reason. Why do you refuse to address the issues by use of such disinformation tactics (rule 5 – sidetrack opponents with name calling and ridicule)?’
(6) Hit and Run ~ In any public forum, make a brief attack of your opponent or the opponent position and then scamper off before an answer can be fielded, or simply ignore any answer. This works extremely well in Internet and letters-to-the-editor environments where a steady stream of new identities can be called upon without having to explain criticism reasoning — simply make an accusation or other attack, never discussing issues, and never answering any subsequent response, for that would dignify the opponent’s viewpoint.
Example: ”This stuff is garbage. Where do you conspiracy lunatics come up with this crap? I hope you all get run over by black helicopters.’ Notice it even has a farewell sound to it, so it won’t seem curious if the author is never heard from again.
Proper response: ‘You are avoiding the issue with disinformation tactics. Your comments or opinions fail to offer any meaningful dialog or information, and are worthless except to pander to emotionalism, and in fact, reveal you to be emotionally insecure with these matters. If you do not like reading ‘this crap’, why do you frequent this NG which is clearly for the purpose of such discussion? Why do you refuse to address the issues by use of such disinformation tactics (rule 6 – hit and run)?’
(7) Question Motives ~ Twist or amplify any fact which could be taken to imply that the opponent operates out of a hidden personal agenda or other bias. This avoids discussing issues and forces the accuser on the defensive.
Example: ‘With the talk-show circuit and the book deal, it looks like you can make a pretty good living spreading lies.’
Proper response: ‘You are avoiding the issue with disinformation tactics. Your imply guilt as a means of attacking the messenger or his credentials, but cowardly fail to offer any concrete evidence that this is so. If you think what has been presented are ‘lies’, why not simply so illustrate? Why do you refuse to address the issues by use of such disinformation tactics (rule 6 – question motives)?’
(8) Invoke Authority ~ Claim for yourself or associate yourself with authority and present your argument with enough ‘jargon’ and ‘minutia’ to illustrate you are ‘one who knows’, and simply say it isn’t so without discussing issues or demonstrating concretely why or citing sources.
‘You obviously know nothing about either the politics or strategic considerations, much less the technicals of the SR-71. Incidentally, for those who might care, that sleek plane is started with a pair of souped up big-block V-8’s (originally, Buick 454 C.I.D. with dual 450 CFM Holly Carbs and a full-race Isky cams — for 850 combined BHP @ 6,500 RPM) using a dragster-style clutch with direct-drive shaft. Anyway, I can tell you with confidence that no Blackbird has ever been flown by Korean nationals nor have they ever been trained to fly it, and have certainly never overflown the Republic of China in a SR or even launched a drone from it that flew over China. I’m not authorized to discuss if there have been overflights by American pilots.’
Proper response: ‘You are avoiding the issue with disinformation tactics. Your imply your own authority and expertise but fail to provide credentials, and you also fail to address issues and cite sources. You simply cite ‘Jane’s-like’ information to make us think you know what you are talking about. Why do you refuse to address the issues by use of such disinformation tactics (rule 8 – invoke authority)?’
(9) Play Dumb ~ No matter what evidence or logical argument is offered, avoid discussing issues except with denials they have any credibility, make any sense, provide any proof, contain or make a point, have logic, or support a conclusion. Mix well for maximum effect.
Example: ‘Nothing you say makes any sense. Your logic is idiotic. Your facts nonexistent. Better go back to the drawing board and try again.’
Proper response: ‘You are avoiding the issue with disinformation tactics. You evade the issues with your own form of nonsense while others, perhaps more intelligent than you pretend to be, have no trouble with the material. Why do you refuse to address the issues by use of such disinformation tactics (Rule 9 – play dumb)?’
(10) Associate Opponent Charges with Old News ~ A derivative of the straw man — usually, in any large-scale matter of high visibility, someone will make charges early on which can be or were already easily dealt with – a kind of investment for the future should the matter not be so easily contained.) Where it can be foreseen, have your own side raise a straw man issue and have it dealt with early on as part of the initial contingency plans. Subsequent charges, regardless of validity or new ground uncovered, can usually then be associated with the original charge and dismissed as simply being a rehash without need to address current issues — so much the better where the opponent is or was involved with the original source.
Example: ‘Flight 553’s crash was pilot error, according to the NTSB findings. Digging up new witnesses who say the CIA brought it down at a selected spot and were waiting for it with 50 agents won’t revive that old dead horse buried by NTSB more than twenty years ago.’
Proper response: ‘You are avoiding the issue with disinformation tactics. Your ignore the issues and imply they are old charges as if new information is irrelevant to truth. Why do you refuse to address the issues by use of such disinformation tactics (rule 10 – associate charges with old news)?’
(11) Establish and Rely Upon Fall-Back Positions ~ Using a minor matter or element of the facts, take the ‘high road’ and ‘confess’ with candor that some innocent mistake, in hindsight, was made — but that opponents have seized on the opportunity to blow it all out of proportion and imply greater criminalities which, ‘just isn’t so.’ Others can reinforce this on your behalf, later, and even publicly ‘call for an end to the nonsense’ because you have already ‘done the right thing.’ Done properly, this can garner sympathy and respect for ‘coming clean’ and ‘owning up’ to your mistakes without addressing more serious issues.
Example: ‘Reno admitted in hindsight she should have taken more time to question the data provided by subordinates on the deadliness of CS-4 and the likely Davidian response to its use, but she was so concerned about the children that she elected, in what she now believes was a sad and terrible mistake, to order the tear gas be used.’
Proper response: ‘You are avoiding the issue with disinformation tactics. Your evade the true issue by focusing on a side issue in an attempt to evoke sympathy. Perhaps you did not know that CIA Public Relations expert Mark Richards was called in to help Janet Reno with the Waco aftermath response? How warm and fuzzy it makes us feel, so much so that we are to ignore more important matters being discussed. Why do you refuse to address the issues by use of such disinformation tactics (rule 11 – establish and rely upon fall-back positions)?’
(12) Enigmas Have No Solution ~ Drawing upon the overall umbrella of events surrounding the crime and the multitude of players and events, paint the entire affair as too complex to solve. This causes those otherwise following the matter to begin to loose interest more quickly without having to address the actual issues.
Example: ‘I don’t see how you can claim Vince Foster was murdered since you can’t prove a motive. Before you could do that, you would have to completely solve the whole controversy over everything that went on in the White House and in Arkansas, and even then, you would have to know a heck of a lot more about what went on within the NSA, the Travel Office, and the secret Grand Jury, and on, and on, and on. It’s hopeless. Give it up.’
Proper response: ‘You are avoiding the issue with disinformation tactics. Your completely evade issues and attempt others from daring to attempt it by making it a much bigger mountain than necessary. You eat an elephant one bite at a time. Why do you refuse to address the issues by use of such disinformation tactics (rule 12 – enigmas have no solution)?’
(13) Alice in Wonderland Logic ~ Avoid discussion of the issues by reasoning backwards or with an apparent deductive logic which forbears any actual material fact.
Example: ‘The news media operates in a fiercely competitive market where stories are gold. This means they dig, dig, dig for the story — often doing a better job than law enforcement. If there was any evidence that BATF had prior knowledge of the Oklahoma City bombing, they would surely have uncovered it and reported it. They haven’t reported it, so there can’t have been any prior knowledge. Put up or shut up.’
Proper response: ‘You are avoiding the issue with disinformation tactics. Your backwards logic does not work here. Has media reported CIA killed Kennedy when they knew it? No, despite their presence at a courtroom testimony ‘confession’ by CIA operative Marita Lornez in a liable trial between E. Howard Hunt and Liberty Lobby, they only told us the trial verdict. THAT, would have been the biggest story of the Century, but they didn’t print it, did they? Why do you refuse to address the issues by use of such disinformation tactics (rule 13 – Alice in Wonderland logic)?’
(14) Demand Complete Solutions ~ Avoid the issues by requiring opponents to solve the crime at hand completely, a ploy which works best with issues qualifying for rule 10.
Example: ‘Since you know so much, if James Earl Ray is as innocent as you claim, who really killed Martin Luther King, how was it planned and executed, how did they frame Ray and fool the FBI, and why?’
Proper response: You are avoiding the issue with disinformation tactics. It is not necessary to completely resolve any full matter in order to examine any relative attached issue. Discussion of any evidence of Ray’s innocence can stand alone to serve truth, and any alternative solution to the crime, while it may bolster that truth, can also stand alone. Why do you refuse to address the issues by use of such disinformation tactics (rule 14 – demand complete solutions)?
(15) Fit the Facts to Alternate Conclusions ~ This requires creative thinking unless the crime was planned with contingency conclusions in place.
Example: ‘The cargo door failed on Flight 800 and caused a catastrophic breakup which ruptured the fuel tank and caused it to explode.’
Proper response: The best definitive example of avoiding issues by this technique is, perhaps, Arlan Specter’s Magic Bullet from the Warren Report. This was eloquently defeated in court but media blindly accepted it without challenge. Thus rewarded, disinformationalists do not shrink from its application, even though today, thanks in part to the movie, JFK, most Americans do now understand it was fabricated nonsense. Thus the defense which works best may actually be to cite the Magic Bullet. ‘You are avoiding the issue with disinformation tactics. Your imaginative twisting of facts rivals that of Arlan Specter’s Magic Bullet in the Warren Report. We all know why the impossible magic bullet was invented. You invent a cargo door problem when there has been not one shred of evidence from the crash investigation to support it, and in fact, actual photos of the cargo door hinges and locks disprove you. Why do you refuse to address the issues by use of such disinformation tactics (rule 15 – fit facts to an alternate conclusion)?’
(16) Vanish Evidence and Witnesses ~ If it does not exist, it is not fact, and you won’t have to address the issue.
Example: ‘You can’t say Paisley is still alive… that his death was faked and the list of CIA agents found on his boat deliberately placed there to support a purge at CIA. You have no proof. Why can’t you accept the Police reports?’ This is a good ploy, since the dental records and autopsy report showing his body was two inches too long and the teeth weren’t his were lost right after his wife demanded inquiry, and since his body was cremated before she could view it — all that remains are the Police Reports. Handy.
Proper response: There is no suitable response to actual vanished materials or persons, unless you can shed light on the matter, particularly if you can tie the event to a cover up other criminality. However, with respect to dialog where it is used against the discussion, you can respond… ‘You are avoiding the issue with disinformation tactics. The best you can say is that the matter is in contention ONLY because of highly suspicious matters such as the simultaneous and mysterious vanishing of three sets of evidence. The suspicious nature itself tends to support the primary allegation. Why do you refuse to address the remaining issues by use of such disinformation tactics (rule 16 – vanish evidence and witnesses)?’
(17) Change the Subject ~ Usually in connection with one of the other ploys listed here, find a way to side-track the discussion with abrasive or controversial comments in hopes of turning attention to a new, more manageable topic. This works especially well with companions who can ‘argue’ with you over the new topic and polarize the discussion arena in order to avoid discussing more key issues.
Example: ‘There were no CIA drugs and was no drug money laundering through Mena, Arkansas, and certainly, there was no Bill Clinton knowledge of it because it simply didn’t happen. This is merely an attempt by his opponents to put Clinton off balance and at a disadvantage in the election: Dole is such a weak candidate with nothing to offer that they are desperate to come up with something to swing the polls. Dole simply has no real platform.’ Assistant’s response. ‘You idiot! Dole has the clearest vision of what’s wrong with Government since McGovern. Clinton is only interested in raping the economy, the environment, and every woman he can get his hands on…’ One naturally feels compelled, regardless of party of choice, to jump in defensively on that one…
Proper response: ‘You are both avoiding the issue with disinformation tactics. Your evade discussion of the issues by attempting to sidetrack us with an emotional response to a new topic — a trap which we will not fall into willingly. If you truly believe such political rhetoric, please drop out of this discussion, as it is not germane, and take it to one of the more appropriate politics NGs. Why do you refuse to address the issues by use of such disinformation tactics (rule 17- change the subject)?’
(18) Emotionalize, Antagonize, and Goad Opponents ~ If you can’t do anything else, chide and taunt your opponents and draw them into emotional responses which will tend to make them look foolish and overly motivated, and generally render their material somewhat less coherent. Not only will you avoid discussing the issues in the first instance, but even if their emotional response addresses the issue, you can further avoid the issues by then focusing on how ‘sensitive they are to criticism.’
Example: ‘You are such an idiot to think that possible — or are you such a paranoid conspiracy buff that you think the ‘gubment’ is cooking your pea-brained skull with microwaves, which is the only justification you might have for dreaming up this drivel.’ After a drawing an emotional response: ‘Ohhh… I do seem to have touched a sensitive nerve. Tsk, tsk. What’s the matter? The truth too hot for you to handle? Perhaps you should stop relying on the Psychic Friends Network and see a psychiatrist for some real professional help…’
Proper response: ‘You are avoiding the issue with disinformation tactics. You attempt to draw me into emotional response without discussion of the issues. If you have something useful to contribute which defeats my argument, let’s here it — preferably without snide and unwarranted personal attacks, if you can manage to avoid sinking so low. Your useless rhetoric serves no purpose here if that is all you can manage. Why do you refuse to address the issues by use of such disinformation tactics (rule 18 – emotionalize, antagonize, and goad opponents)?’
(19) Ignore Proof Presented, Demand Impossible Proofs ~ This is perhaps a variant of the ‘play dumb’ rule. Regardless of what material may be presented by an opponent in public forums, claim the material irrelevant and demand proof that is impossible for the opponent to come by (it may exist, but not be at his disposal, or it may be something which is known to be safely destroyed or withheld, such as a murder weapon.) In order to completely avoid discussing issues, it may be required that you to categorically deny and be critical of media or books as valid sources, deny that witnesses are acceptable, or even deny that statements made by government or other authorities have any meaning or relevance.
Example: ‘All he’s done is to quote the liberal media and a bunch of witnesses who aren’t qualified. Where’s his proof? Show me wreckage from flight 800 that shows a missile hit it!’
Proper response: ‘You are avoiding the issue with disinformation tactics. You presume for us not to accept Don Phillips, reporter for the Washington Post, Al Baker, Craig Gordon or Liam Pleven, reporters for Newsday, Matthew Purdy or Matthew L. Wald, Don Van Natta Jr., reporters for the New York Times, or Pat Milton, wire reporter for the Associated Press — as being able to tell us anything useful about the facts in this matter. Neither would you allow us to accept Robert E. Francis, Vice Chairman of the NTSB, Joseph Cantamessa Jr., Special Agent In Charge of the New York Office of the F.B.I., Dr. Charles Wetli, Suffolk County Medical Examiner, the Pathologist examining the bodies, nor unnamed Navy divers, crash investigators, or other cited officials, including Boeing Aircraft representatives a part of the crash investigative team — as a qualified party in this matter, and thus, dismisses this material out of hand. Good logic, — about as good as saying 150 eye witnesses aren’t qualified. Then you demand us to produce evidence which you know is not accessible to us, evidence held by FBI, whom we accuse of cover up. Thus, only YOU are qualified to tell us what to believe? Witnesses be damned? Radar tracks be damned? Satellite tracks be damned? Reporters be damned? Photographs be damned? Government statements be damned? Is there a pattern here?. Why do you refuse to address the issues by use of such disinformation tactics (rule 19 – ignore proof presented, demand impossible proofs)?’
(20) False Evidence ~ Whenever possible, introduce new facts or clues designed and manufactured to conflict with opponent presentations — as useful tools to neutralize sensitive issues or impede resolution. This works best when the crime was designed with contingencies for the purpose, and the facts cannot be easily separated from the fabrications.
Example: Jack Ruby warned the Warren Commission that the white Russian separatists, the Solidarists, were involved in the assassination. This was a handy ‘confession’, since Jack and Earl were both on the same team in terms of the cover up, and since it is now known that Jack worked directly with CIA in the assassination (see below.)
Proper response: This one can be difficult to respond to unless you see it clearly, such as in the following example, where more is known today than earlier in time… ‘You are avoiding the issue with disinformation tactics. Your information is known to have been designed to side track this issue. As revealed by CIA operative Marita Lorenz under oath offered in court in E. Howard Hunt vs. Liberty Lobby, CIA operatives E. Howard Hunt, James McCord, and others, met with Jack Ruby in Dallas the night before the assassination of JFK to distribute guns and money. Clearly, Ruby was a coconspirator whose ‘Solidarist confession’ was meant to sidetrack any serious investigation of the murder AWAY from CIA. Why do you refuse to address the issues by use of such disinformation tactics (rule 20 – false evidence)?’
(21) Call a Grand Jury, Special Prosecutor, or Other Empowered Investigative Body ~ Subvert the (process) to your benefit and effectively neutralize all sensitive issues without open discussion. Once convened, the evidence and testimony are required to be secret when properly handled. For instance, if you own the prosecuting attorney, it can insure a Grand Jury hears no useful evidence and that the evidence is sealed an unavailable to subsequent investigators. Once a favorable verdict is achieved, the matter can be considered officially closed. Usually, this technique is applied to find the guilty innocent, but it can also be used to obtain charges when seeking to frame a victim.
Example: According to one OK bombing Federal Grand Juror who violated the law to speak the truth, jurors were, contrary to law, denied the power of subpoena of witness of their choosing, denied the power of asking witnesses questions of their choosing, and relegated to hearing only evidence prosecution wished them to hear, evidence which clearly seemed fraudulent and intended to paint conclusions other than facts actually suggested.
Proper response: There is usually no adequate response to this tactic except to complain loudly at any sign of its application, particularly with respect to any possible cover up. This happened locally in Oklahoma, and as a result, a new Grand Jury has been called to rehear evidence that government officials knew in advance that the bombing was going to take place, and a number of new facts which indicate it was impossible for Timothy McVeigh to have done the deed without access to extremely advanced explosive devices such as available ONLY to the military or intelligence community, such as CIA’s METC technology. Media has refused to cover the new Oklahoma Grand Jury process, by they way.
(22) Manufacture a New Truth ~ Create your own expert(s), group(s), author(s), leader(s) or influence existing ones willing to forge new ground via scientific, investigative, or social research or testimony which concludes favorably. In this way, if you must actually address issues, you can do so authoritatively.
Example: The False Memory Syndrome Foundation and American Family Foundation and American and Canadian Psychiatric Associations fall into this category, as their founding members and/or leadership include key persons associated with CIA Mind Control research. Read The Professional Paranoid or Phsychic Dictatorship in the U.S.A. by Alex Constantine for more information. Not so curious, then, that (in a perhaps oversimplified explanation here) these organizations focus on, by means of their own “research findings”, that there is no such thing as Mind Control.
Proper response: Unless you are in a position to be well versed in the topic and know of the background and relationships involved in the opponent organization, you are not well equipped to fight this tactic.
(23) Create Bigger Distractions ~ If the above does not seem to be working to distract from sensitive issues, or to prevent unwanted media coverage of unstoppable events such as trials, create bigger news stories (or treat them as such) to distract the multitudes.
Example: To distract the public over the progress of a WTC bombing trial that seems to be uncovering nasty ties to the intelligence community, have an endless discussion of skaters whacking other skaters on the knee. To distract the public over the progress of the Waco trials that have the potential to reveal government sponsored murder, have an O.J. summer. To distract the public over an ever disintegrating McVeigh trial situation and the danger of exposing government involvements, come up with something else (Flight 800?) to talk about — or, keeping in the sports theme, how about sports fans shooting referees and players during a game and the focusing on the whole gun control thing?
Proper response: The best you can do is attempt to keep public debate and interest in the true issues alive and point out that the ‘news flap’ or other evasive tactic serves the interests of your opponents.
(24) Silence Critics ~ If the above methods do not prevail, consider removing opponents from circulation by some definitive solution so that the need to address issues is removed entirely. This can be by their death, arrest and detention, blackmail or destruction of their character by release of blackmail information, or merely by destroying them financially, emotionally, or severely damaging their health.
Example: As experienced by certain proponents of friendly fire theories with respect to flight 800 — send in FBI agents to intimidate and threaten that if they persisted further they would be subject to charges of aiding and abetting Iranian terrorists, of failing to register as a foreign agents, or any other trumped up charges. If this doesn’t work, you can always plant drugs and bust them.
Proper response: You have three defensive alternatives if you think yourself potential victim of this ploy. One is to stand and fight regardless. Another is to create for yourself an insurance policy which will point to your opponents in the event of any unpleasantness, a matter which requires superior intelligence information on your opponents and great care in execution to avoid dangerous pitfalls (see The Professional Paranoid by this author for suggestions on how this might be done). The last alternative is to cave in or run (same thing.)
(25) Vanish ~ If you are a key holder of secrets or otherwise overly illuminated and you think the heat is getting too hot, to avoid the issues, vacate the kitchen.
Example: Do a Robert Vesco and retire to the Caribbean. If you don’t, somebody in your organization may choose to vanish you the way of Vince Foster or Ron Brown.
Proper response: You will likely not have a means to attack this method, except to focus on the vanishing in hopes of uncovering it was by foul play or deceit as part of a deliberate cover up.
Eight Traits of the Disinformationalist
by H. Michael Sweeney <HMS@proparanoid.com>
copyright (c) 1997, 2000 All rights reserved(1) Avoidance ~ They never actually discuss issues head-on or provide constructive input, generally avoiding citation of references or credentials. Rather, they merely imply this, that, and the other. Virtually everything about their presentation implies their authority and expert knowledge in the matter without any further justification for credibility.
(2) Selectivity ~ They tend to pick and choose opponents carefully, either applying the hit-and-run approach against mere commentators supportive of opponents, or focusing heavier attacks on key opponents who are known to directly address issues. Should a commentator become argumentative with any success, the focus will shift to include the commentator as well.
(3) Coincidental ~ They tend to surface suddenly and somewhat coincidentally with a new controversial topic with no clear prior record of participation in general discussions in the particular public arena involved. They likewise tend to vanish once the topic is no longer of general concern. They were likely directed or elected to be there for a reason, and vanish with the reason.
(4) Teamwork ~ They tend to operate in self-congratulatory and complementary packs or teams. Of course, this can happen naturally in any public forum, but there will likely be an ongoing pattern of frequent exchanges of this sort where professionals are involved. Sometimes one of the players will infiltrate the opponent camp to become a source for straw man or other tactics designed to dilute opponent presentation strength.
(5) Anti-Conspiratorial ~ They almost always have disdain for ‘conspiracy theorists’ and, usually, for those who in any way believe JFK was not killed by LHO. Ask yourself why, if they hold such disdain for conspiracy theorists, do they focus on defending a single topic discussed in a NG focusing on conspiracies? One might think they would either be trying to make fools of everyone on every topic, or simply ignore the group they hold in such disdain. Or, one might more rightly conclude they have an ulterior motive for their actions in going out of their way to focus as they do.
(6) Artificial Emotions ~ An odd kind of ‘artificial’ emotionalism and an unusually thick skin — an ability to persevere and persist even in the face of overwhelming criticism and unacceptance. This likely stems from intelligence community training that, no matter how condemning the evidence, deny everything, and never become emotionally involved or reactive. The net result for a disinfo artist is that emotions can seem artificial. Most people, if responding in anger, for instance, will express their animosity throughout their rebuttal. But disinfo types usually have trouble maintaining the ‘image’ and are hot and cold with respect to pretended emotions and their usually more calm or unemotional communications style. It’s just a job, and they often seem unable to ‘act their role in character’ as well in a communications medium as they might be able in a real face-to-face conversation/confrontation. You might have outright rage and indignation one moment, ho-hum the next, and more anger later — an emotional yo-yo. With respect to being thick-skinned, no amount of criticism will deter them from doing their job, and they will generally continue their old disinfo patterns without any adjustments to criticisms of how obvious it is that they play that game — where a more rational individual who truly cares what others think might seek to improve their communications style, substance, and so forth, or simply give up.
(7) Inconsistent ~ There is also a tendency to make mistakes which betray their true self/motives. This may stem from not really knowing their topic, or it may be somewhat ‘freudian’, so to speak, in that perhaps they really root for the side of truth deep within. I have noted that often, they will simply cite contradictory information which neutralizes itself and the author. For instance, one such player claimed to be a Navy pilot, but blamed his poor communicating skills (spelling, grammar, incoherent style) on having only a grade-school education. I’m not aware of too many Navy pilots who don’t have a college degree. Another claimed no knowledge of a particular topic/situation but later claimed first-hand knowledge of it.
(8) Time Constant ~ Recently discovered, with respect to News Groups, is the response time factor. There are three ways this can be seen to work, especially when the government or other empowered player is involved in a cover up operation: (1) ANY NG posting by a targeted proponent for truth can result in an IMMEDIATE response. The government and other empowered players can afford to pay people to sit there and watch for an opportunity to do some damage. SINCE DISINFO IN A NG ONLY WORKS IF THE READER SEES IT – FAST RESPONSE IS CALLED FOR, or the visitor may be swayed towards truth. (2) When dealing in more direct ways with a disinformationalist, such as email, DELAY IS CALLED FOR – there will usually be a minimum of a 48-72 hour delay. This allows a sit-down team discussion on response strategy for best effect, and even enough time to ‘get permission’ or instruction from a formal chain of command. (3) In the NG example (1) above, it will often ALSO be seen that bigger guns are drawn and fired after the same 48-72 hours delay — the team approach in play. This is especially true when the targeted truth seeker or their comments are considered more important with respect to potential to reveal truth. Thus, a serious truth sayer will be attacked twice for the same sin.
I close with the first paragraph of the introduction to my unpublished book, Fatal Rebirth:
Truth cannot live on a diet of secrets, withering within entangled lies. Freedom cannot live on a diet of lies, surrendering to the veil of oppression. The human spirit cannot live on a diet of oppression, becoming subservient in the end to the will of evil. God, as truth incarnate, will not long let stand a world devoted to such evil. Therefore, let us have the truth and freedom our spirits require… or let us die seeking these things, for without them, we shall surely and justly perish in an evil world.
(1) Chase, Stuart: Guides to Straight Thinking; New York: Harper and Brothers, 1956.
(2) Combs, James & Nimmo, Dan: The New Propaganda: The Dictatorship of Palavar in Contemporary Politics; New York: Longman Publishing Group, 1993.
(3) Doob, Leonard: Propaganda: Its Psychology and Technique; New York: Henry Holt and Company, 1935.
(4) Edwards, Violet: Group Leader’s Guide to Propaganda Analysis; New York: Columbia University Press, 1938.
(5) Ellul, Jacques: Propaganda: The Formation of Men’s Attitudes; New York: Vintage Books, 1965.
(6) Hummel, William & Huntress, Keith: The Analysis of Propaganda; New York: William Sloane Associates, 1949.
(7) Institute for Propaganda Analysis: Propaganda Analysis; New York: Columbia University Press, 1938.
(8) Institute for Propaganda Analysis: The Fine Art of Propaganda; New York: Harcourt, Brace and Company, 1939.
(9) Lee, Alfred McClung: How to Understand Propaganda; New York: Rinehart and Company, 1952.
(10) Lowenthal, Leo & Guterman, Norbert: Prophets of Deceit; 1949. Palo Alto: Pacific Books Publishers, 1970.
(11) Miller, Clyde: The Process of Persuasion; New York: Crown Publishers, 1946.
(12) Pratkanis, Anthony & Aronson, Elliot: Age of Propaganda: The Everyday Use and Abuse of Persuasion; New York: W.H. Freeman and Company, 1991.
(13) Rank, Hugh: Language and Public Policy; New York: Citation Press, 1974.
(14) Thum, Gladys & Thum, Marcella: The Persuaders: Propaganda in War and Peace; New York: Atheneum, 1972.
Pentagon’s PSYOPs: Information Warfare Using Aggressive Psychological Operations
By Brent Jessop
Information Operation Roadmap Part 4
The Pentagon’s plans for psychological operations or PSYOP in the global information environment of the 21st century are wide ranging and aggressive. These desires are outlined in the 2003 Pentagon document signed by Donald Rumsfeld in his capacity as the Secretary of Defense called the Information Operation Roadmap.
More detail about the origins and purpose of this document can be read in the first part of this series here. Also, a description of the Pentagon’s desire to dominate the entire electro-magnetic spectrum and their need to “fight the net” as outline in the Information Operation Roadmap were previously described.
What is a PSYOP?
A PSYOP is not specifically defined in this document but it does provide some insight into the wide ranging activities that are considered PSYOP.
“The customary position was that “public affairs informs, while public diplomacy and PSYOP influence.” PSYOP also has been perceived as the most aggressive of the three information activities, using diverse means, including psychological manipulation and personal threats.” [emphasis mine] – 26
“One result of public affairs and civil military operations is greater support for military endeavors and thus, conversely these activities can help discourage and dissuade enemies, which PSYOP does more directly with its own tactics, techniques and procedures.” [emphasis mine] – 10
“PSYOP messages disseminated to any audience except individual decision-makers (and perhaps even then) will often be replayed by the news media for much larger audiences, including the American public.” [emphasis mine] – 26
“A PSYOP force ready to conduct sophisticated target-audience analysis and modify behaviour with multi-media PSYOP campaigns featuring commercial-quality products that can be rapidly disseminated throughout the Combatant Commanders area of operations.” [emphasis mine] – 63
“PSYOP products must be based on in-depth knowledge of the audience’s decision-making processes and the factors influencing his decisions, produced rapidly at the highest quality standards, and powerfully disseminated directly to targeted audiences throughout the area of operations.” [emphasis mine] – 6
“Better depiction of the attitudes, perceptions and decision-making processes of an adversary. Understanding how and why adversaries make decisions will require improvements in Human Intelligence (HUMINT) and open source exploitation, as well as improved analytic tools and methods.” [emphasis mine] – 39
“SOCOM [Special Operations Command] should create a Joint PSYOP Support Element to coordinate Combatant Command programs and products with the Joint Staff and OSD [Office of the Secretary of Defense] to provide rapidly produced, commercial-quality PSYOP product prototypes consistent with overall U.S. Government themes and messages.” [emphasis mine] – 15
“SOCOM’s ongoing PSYOP Advanced Concept Technology Demonstration and modernization efforts should permit the timely, long-range dissemination of products with various PSYOP delivery systems. This includes satellite, radio and television, cellular phones and other wireless devices, the Internet and upgrades to traditional delivery systems such as leaflets and loudspeakers that are highly responsive to maneuver commanders.” [emphasis mine] – 15
“PSYOP equipment capabilities require 21st Century technology. This modernization would permit the long-range dissemination of PSYOP messages via new information venues such as satellites, the Internet, personal digital assistants and cell phones:
– (U) PSYOP ACTD. Commencing in FY04, SOCOM [Special Operations Command] initiates an Advanced Concept Technology Demonstration (ACTD) to address dissemination of PSYOP products into denied areas. The ACTD should examine a range of technologies including a network of unmanned aerial vehicles and miniaturized, scatterable public address systems for satellite rebroadcast in denied areas. It should also consider various message delivery systems, to include satellite radio and television, cellular phones and other wireless devices and the Internet.” [emphasis mine] – 65
“Rapid, fully integrated nodal and network analysis providing Combatant Commanders with holistic kinetic and non-kinetic solutions for a full range of electromagnetic, physical and human IO [information operations] targets.” [emphasis mine] – 39
“Capabilities such as physical security, information assurance, counter intelligence and physical attack make important contributions to effective IO.” [emphasis mine] – 23
Third Party PSYOP
The Pentagon is also willing to use third parties for their PSYOP.
“Identify and disseminate the views of third party advocates that support U.S. positions. These sources may not articulate the U.S. position the way that the USG [US Government] would, but that may nonetheless have a positive influence.” [emphasis mine] – 27
Under recommendation number 48 – “Create a Joint PSYOP Support Element” – is the following:
“Contract for commercial sources for enhanced product development.” [emphasis mine] – 64
The use of third party advocates or front groups for the dissemination of US government propaganda is well documented. A couple of recent examples include the illegal payment of $1.6 billion for domestic fake news and similar activities in Iraq using the Lincoln Group among others.
Not only is the Pentagon exploiting new and old technology for aggressive behavior modification, they can also practice and refine their techniques in a virtual simulation of the entire world.
From an article by Mark Baard:
“U.S defense, intel and homeland security officials are constructing a parallel world, on a computer, which the agencies will use to test propaganda messages and military strategies.”
“Called the Sentient World Simulation, the program uses AI routines based upon the psychological theories of Marty Seligman, among others. (Seligman introduced the theory of “learned helplessness” in the 1960s, after shocking beagles until they cowered, urinating, on the bottom of their cages.)”
“Yank a country’s water supply. Stage a military coup. SWS will tell you what happens next.”
“The sim will feature an AR avatar for each person in the real world, based upon data collected about us from government records and the internet.”
How useful do you think your new MySpace or Facebook account is in helping the Pentagon develop a detailed psychological profile of you? Do you think they would be shy in exploiting such a valuable source of personal data?
PSYOP in the past, however, often was used to support U.S. Government public diplomacy and information objectives with non-adversarial audiences. These actions include counter-drug, demining and AIDS awareness programs in friendly countries.” [emphasis mine] – 25
It is a minor point in the context of this document, but it is worth reflecting on why US military PSYOP were used for AIDS awareness.
Are There Any Limits to Information Warfare?
An obvious question arises from the description of PSYOP described by the Information Operation Roadmap, are there any limits? Can PSYOP be conducted on the American public or just foreign audiences? On adversaries or non-adversaries? Can they be performed during peacetime? My next article will attempt to show just how few limits there actually are.