And how does it all work in the greater scheme of things? The insurance business is called one of the five legs of the Military Industrial Complex and the right-wing political cabal that it spawned. ..............

by Al Martin

Secrets of the Insurance (Fraud) Industry: and the End Game (Part 2)

The crux of New York Attorney General Elliott Spitzer’s complaint is that brokers and agents are effectively being paid twice. That is the essence of the scam; that they are being paid a commission plus the annual renewal fee on policies that they sell to the public. Then the company that they work for, whatever that is, the Acme Insurance Company, then resells those policies to AIG or Marsh & McLennan, either resells them outright or reinsures them. Policies in the insurance business are called “paper.” In order to entice the paper (it’s called “bringing in the paper”) Marsh McLennan offeed to pay backhanded commissions. Thus, what happens is Acme Insurance Company is actually getting paid twice in the same policy. Its brokers, its agents are actually getting paid twice.

This also works within the so-called independent insurance business. When you go into a small town, you oftentimes will see an office that says “Independent Insurance.” The Independent Insurance Association of America is a group of independent agents. There’s thousands of them. Now, they get paid the same way; that is, they get paid not only the selling commission plus the annual renewal fee; they get an annual renewal fee, usually 3%, that is, as the policy is renewed every year by the policyholder.

This is what Spitzer is talking about: Then they’re allowed to get a secondary commission either directly or through some association wherein the policies they’ve written have been resold even though they might not have even been aware that the policy had been resold, ultimately. What it does is it gives insurance brokers and agents a conflict of interest. That is the crux of what Spitzer is saying: that, first, it constitutes a conflict of interest for brokers and agents, and second, it increases the cost of insurance, which is another thing that he’s saying. Because ultimately these commissions have to be for by policy holders in the form of higher premiums.

And how does it all work in the greater scheme of things? The insurance business is called one of the five legs of the Military Industrial Complex and the right-wing political cabal that it spawned.

What are those legs? Those legs constitute five sectors of the economy. They are oil and gas; pharmaceuticals/ healthcare which is now number two, displacing the long-held number two, which is defense, which is now number three; number four is finance and banking, which includes insurance; number five is tobacco. Those were the five great legs of the complex, the Military-Industrial complex, as Eisenhower even noted. The purpose was to consolidate power and control within an ever-diminishing circle. That was the original post-war concept.

There were fractions established in each industry for kickbacks to either the RNC directly or individual candidates or Republican interest groups or various forms of offshore Republican trusts, etc. But there were actual fractions established.

Walter Boeing had mentioned this. This was the late Walter Boeing, founder of the Boeing Corporation, who spoke about shortly before his death. He had publicly talked about the F-15 contract.

The F-15, which, net delivered, was $45 million a pop. George Bush would later talk about this in 1984. Actually it was Ronald Reagan that made a slip inadvertently, when he said in 1984 that every $45-million F-15 means $3 million to the Republican Party. And that was literally the fraction for that aircraft.

But all of these 5 industries work on effectively the same type of fraction. If you’re a defense contractor, you have a government contract to produce 400 F-15's, that means it’s $120 million that’s got to go into Republican coffers somehow, somewhere, domestically, offshore, through a large variety of artifices. Oftentimes what happens is the money is funneled to Republican consultant groups that you find tacked onto the end of the contracts, where there’s an endless list of shadowy Republican-controlled consulting groups in McLean, Virginia. There might be 50 of them on one contract.

And this is how it’s financed. It doesn’t actually cost the corporations any money. If it did, they wouldn’t agree to it. Let’s put it that way. How the kickbacks are financed is in the manner in which the contracts are written. In the defense industry, for example, the kickbacks are paid for by unlimited cost-overrun contracts and the ability for the contractor to save money because the contractor does not have to submit or build or provide a finished product that is in accordance with the original specifications of the weapons systems.

You could call it contractual fraud, or fraud by contract.Where this specific category of cost overruns is involved – every effort the Democrats have ever made at DoD procurement reform when it came to cost overruns, when it came to having the GAO certify and audit the actual performance of the weapons systems, every Democratic effort to do that failed.

The only headway they were ever able to make was on the question of weapons performance and delivery date. But the cost overruns? No. Even the Democrats know that’s getting too close to the way everything works in the post-war regime. Like Jeb Bush used to tell me: You don’t mess with people’s cost overruns.

George used to say, “You want to know what the quickest route is to the cemetery? You mess with the Republicans’ cost overruns.” In other words, what happens in every case is that these 5 sectors, business-industrial sectors, simply act as facilitators to transfer money from the U.S. Treasury, i.e., the American people–to the Republican Party and its interest groups. What the American people have to understand is that everyone in the nation is a Republican.

If you live in this nation and if you’re a taxpayer, then you’re a Republican.

This isn’t a monopoly though since a monopoly would imply a fixed number of businesses. It’s actually an oliogopoly, a Corporate Republican Oligopoly (CRO). There is the Ace, the Acme and the XYZ Insurance Company. They set all of the rates. They set contract conditions. And that’s all there is. And the rates, essentially, are fixed by backhanded agreement of bid riggings. But, in fact, that’s the wrong characterization.

A cabal is always willing to let someone new in as long as they understand the rules and are willing to play by them. It is a flexible cartel; it has to be because otherwise it would become too obvious. If you had the Ace and Acme and XYZ Corporations submitting the same bids for the delivery of goods and services to some government agency or some municipality or something for 20 or 30 or 40 consecutive years, the same handful of companies, it would become too obvious.

It is based on a mutual interest, a mutual control of a group of families, but all with one agenda. It is a group of families, oftentimes who are related by blood, although that relationship in some cases may go back for centuries, may go back to Mother England. I think the more important thing is what is the purpose of this. The purpose is what George Bush Sr. said it was (and we’ve said it a hundred times) “the continuous consolidation of power and money into higher, tighter and righter hands.” That is the game; that’s what it’s all about. That is the agenda.

And this is what it all means. When a cabal acts to continuously consolidate money and power over a long period of time through the commission of endless frauds, both directly against the people in the people’s capacity as workers, taxpayers, investors, savers, debtors, shareholders and consumers, then uses government as a secondary source of fraud, it is almost like reinsurance?

“We’ll use the U.S. Treasury as a re-fraud vehicle.” That is, the U.S. Treasury becomes a facilitator of Republican cabalist fraud in that it is the organ of government which collects taxes. The government then becomes the insurer, through its various agencies, of last resort.

Therefore, if you want to commit a multibillion dollar real estate scam, you’re going to want some agency or quasi-agency or something connected with the U.S. Treasury insuring it. But the endgame is that eventually this can no longer be sustained. It wasn’t meant to be.

There was a very, very oblique comment made by Henry Kissinger in 1985 in an interview with Barbara Walters. She had interviewed Zbigniew Brzezinski in the same show. And a very oblique comment that Kissinger had made to Barbara Walters about the consolidation of wealth and power in the United States. He said that when that fraction reaches 70%, in other words, when the top 1% of the nation owns 70% of all of the private wealth of the nation and effectively control the public wealth as well by extension, then the great post-war regime cannot be sustained beyond that point.

In other words, there is no longer enough liquidity in enough dispersed hands to make the whole system work, to make an economy work, to make a planet work. That was the whole idea. Right now, as we’ve been saying, the top 1% of the nation now controls 68.9% of all of the private wealth in the nation.

Within the second term of the Bush-Cheney regime, the 70% fraction will be hit. It should not come as any surprise to anyone that this fraction being hit coincides with, for instance, the GAO stating that, hey, by 2009 the game is over.

The United States will no longer be able to service its debt. By the U.S. Treasury proffering gold confiscation, currency restrictions, in other words, the government is preparing the people for life in a post-economically-collapsed environment because the end of the game is coming. That’s when the government will need “Patriot Act” powers to control the rabble. The game then comes to an end in that form.

What is the ultimate agenda? The ultimate agenda is for the 1% to control the planet, which is effectively what they would do in a post-economically-collapsed environment. If the top 1% constituting the ruling Republican cabal, which is, in effect, what the top 1% represents, if they have 70% of all the private wealth of the nation, and God knows what fraction of the private and public wealth of other nations, in a post-economically-collapsed environment where suddenly resource-producing assets are now going to cost 95% less than they did prior to economic collapse, if you have 70% of the planet’s money, then it’s not going to be long before you control everything, all industry, all remaining resource production.

You could call it high-tech feudalism. You (or rather they) will control everything. Plus you will have sufficient capital to pick it all up again a second time, to effectively recapitalize the planet, because it can be done so cheaply.

In a post-economically-collapsed environment, the entire planet could be reconstituted for $10 trillion. That happens to be approximately the consolidated net worth of the top 1% of the nation. You could pick up, in a post-economically-collapsed environment, for $10 trillion of hard money.

Remember dollars ain’t gonna cut the mustard. Hard money will be gold, silver, oil, commodities. $10 trillion of hard money recapitalizes the entire planet at 5 cents on the dollar. There’s the fraction. And see it all coming together either next year, in `05, or certainly by `06. The magic 70% fraction would be reached.

The GAO already says that if this regime remains in power, then by 2009 the United States will no longer be able to service its debt. Thereby either it has to re-monetize debt, which I don’t think the option would exist at that time. Or simply, it’s a repudiation, and that’s it.

It doesn’t do any good to re-monetize. That’s not the thing to do. If you’re the ruling Republican cabal, if you’re that top 1%, you don’t want to see a re-monetization effort in order to keep the whole show going. What you want to see is an utter, utter collapse.

You could call it a “Planetary Fire Sale,” where there is no longer a medium of exchange being maintained, where all capital markets have broken down, public infrastructure has broken down, the militaries around the planet are now in control. As the leading 1%, you control the militaries. You can, then, repurchase all remaining assets, effective resource, or income, or what can be returned to income-producing assets at 5 cents on the dollar by recapitalizing the entire planet for $10 trillion. Then you control everything.

Regarding the conspiracy bugaboo, a One World Order, the conspiracy theorists got that all intermingled with all sorts of sub-conspiracies. The individual nation-states are still going to be maintained. They would have to be. It’s the only way you could pick everything up again. Otherwise there would be resistance. You want to maintain the same political infrastructure that existed before the collapse because that’s what people are used to.It is the infrastructure that already exists, that already has organs of state power, that already has its own infrastructure.

What you have is the world would be exactly the same as it was before, once it was picked up from a post-economically-collapsed environment, except everything would be a sham. All governments would effectively be puppet governments. They would be corporatized puppets. But there’d have to be names behind those puppets to deceive the people into thinking that, “Well, the planet’s been picked up again. We’re beyond the collapse and we’re coming back.” And that’s how you do it. You have to continue to deceive the people -- by maintaining what is familiar.

* AL MARTIN is an independent economic-political analyst with 25 years of experience as a trader on NYMEX, CME, CBOT and CFTC. As a former contributor to the Presidential Council of Economic Advisors, Al Martin is considered to be a source of independent analysis for financially sophisticated and market savvy investors.

After working as a broker on Wall Street, Al Martin was involved in the so-called "Iran Contra" Affair as a fundraiser for the Bush Cabal from the covert side of government aka the US Shadow Government.

His memoir, "The Conspirators: Secrets of an Iran Contra Insider," provides an unprecedented look at the frauds of the Bush Cabal during the Iran Contra era. His weekly column, "Behind the Scenes in the Beltway," is published weekly on Al Martin Raw.com, which also publishes a bimonthly newsletter called "Whistleblower Gazette."

His memoir, "The Conspirators: Secrets of an Iran Contra Insider:

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