Author Archives: rff_blog_admin

Commercial Mortgage Loan Turmoil

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I mentioned in a June 29, 2011 posting titled Financial Crisis–Part III that one component of the Dodd-Frank law was to create a new regulatory structure for credit rating agencies.  Erroneous credit ratings that were given to mortgage-backed securities resulted in billions of dollars of losses, and were one cause of the financial crisis.  The SEC has not fully staffed the new office mandated by the Dodd-Frank law that is supposed to address this issue, and the provision that would hold credit rating agencies legally liable for their ratings was reported to have been tabled. Of course the government is now angry at Standard & Poors (S & P) for downgrading U.S. debt from AAA. There was a recent event involving S & P that was given very little media attention, but shocked the commercial mortgage-backed security (CMBS) world into disarray. Goldman Sachs and Citigroup pulled a $1.48 billion dollar CMBS offering hours away from settling the issue after S&P announced they would not be able to deliver final ratings on the security. A Wall Street Journal article by Al Yoon quoted a man who has worked in real estate finance since 1995 as saying “I’ve never seen this happen, to the extent where a deal was so far along, ever.”

The process of issuing a CMBS involves issuers working with the rating agencies to determine final pricing based on a preliminary rating, which has been developed after months of diligence. As was the custom, Goldman Sachs and Citigroup priced the recent issue based on the preliminary rating. No rating agency has previously failed to issue the rating when the deal is about to close, but that string has now been broken. S&P muddied the issue even more by saying “…it won’t assign new ratings to transactions based on its current criteria” (whatever that might mean). Other deals had to be recently “sweetened” to reassure investors.

What does this mean, and why should we care? The drama of watching the President and Congress thrash around with how to come up with a way of keeping the government funded followed by a stock market swoon has consumed nearly all of the news reporting. The possibility that the commercial real estate mortgage market is in limbo has been hidden behind the screen of bureaucratic ineptness of our elected officials trying to figure out how to fund overspending by the government. I fear this mostly unnoticed event instigated by what must be a nervous S&P could further cripple an already fragile economy. For those who haven’t been watching, the real estate market hasn’t been doing very well, and killing the commercial market by causing funding to dry up will be harmful. I write that believing that I have mastered the art of understatement. One analyst was quoted as saying, “This is a debacle of epic proportions.”

Osama bin Laden and the CIA

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I’ve posted  of a review in four parts on that link of this web site  about the excellent book, “The Looming Tower, al Qaeda and the Road to 9/11” by Lawrence Wright. The book describes how U.S. intelligence agencies failed to share information after they finally understood the risks presented by al Qaeda. That failure was created by government actions and decrees. According to an MSNBC report, Deputy Attorney General Jamie Gorelick of the Clinton administration issued a memo in 1995 that gave detailed instructions to “…more clearly separate the counterintelligence investigation from…criminal investigations.” That memo resulted in what Attorney General Ashcroft later described as “…a snarled web of requirements, restrictions, and regulations… (that) prevented decisive action by our men and women in the field.” Ashcroft was testifying to the 9/11 Commission, and Jamie Gorelick, the author of the memo, was a member of that Commission. Ashcroft also told the Commission, “Government erected this wall. Government buttressed this wall. And before September 11, government was blinded by this wall.”

The CIA knew twenty months before 9/11 that there were at least two al Qaeda operatives in California and never told the FBI, perhaps because of the “wall” that had been built by the  Gorelick memo. Absent this artificial and strictly bureaucratic “wall” the CIA could have alerted the FBI that they knew al Qaeda members were in the United States and some were learning to fly planes. Absent the Gorelick memo, perhaps more attention would have been given to an e-mail from an FBI agent in Phoenix suggesting that Osama bin Laden was sending al Qaeda members to flight schools in Arizona. There also was a memo from FBI agents in Minneapolis focusing on activities of Zacarias Moussaoui, the only person indicted as part of the 9/11 conspiracy. Perhaps communication between the CIA and FBI, if it had been allowed by law and not been prohibited by the Gorelick memo, would have allowed agents from the two agencies to “connect the dots” and prevent al Qaeda from flying planes into the World Trade Center and Pentagon.

Regardless of what might have been if the agencies had been allowed to act responsibly
instead of according to government rules, Osama bin Laden died not knowing that he had succeeded at killing two CIA employees along with several others during the al Qaeda bombing of the U.S. Embassy in Kenya. He had said the embassy was targeted because it was a CIA station. Tom Shah and Molly Huckaby Hardy were working undercover for the CIA in the embassy. Tom Shah was the son of an Indian immigrant father and an American mother.  He had received his doctorate in music from Ball State in Indiana. He was fluent in several languages including Hindi, Arabic, and Russian. He joined the government under the cover of being a diplomat, but was immediately sent for training to become a spy. He had been dispatched to Kenya with the assignment to determine theauthenticity of a senior member of Saddam Hussein’s regime, who had said he wanted to defect. Tom walked to a window at the embassy when he heard shooting, and was killed by shredding glass when the bomb exploded.

Hardy was the other CIA agent killed by the bombing. She was a 51 year old divorced mom who had travelled to Asia, South America, and Africa. She handled finances, including handing out money used to pay sources. She was looking forward to a trip to meet a new grandchild when the bomb killed her.  She and Hardy were listed as State Department employees, but sources said they received private memorial services at CIA headquarters. Leon Panetta said after the death of bin Laden, “Throughout the effort to disrupt, dismantle, and defeat al Qaeda, our fallen colleagues have been with us in memory and in spirit. With their strength and determination as our guide, we achieved a great victory three weeks ago.”

Rocky Flats Site Selection

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I’ve often heard and read that the selection of Rocky Flats as the location where a new nuclear weapons production facility code named “Project Apple” would be constructed was flawed because those doing the selection used wind direction at what was then the Stapleton Field, which led them to believe the wind would frequently blow towards the mountains instead of toward Denver. I recently found a copy of the report prepared by the Austin Company titled “Engineering Survey and Report for Santa Fe Operations Office of the Atomic Energy Commission on the Location and Site for Project Apple” in the archives of the Rocky Flats Museum.  The report, which was submitted on March 27, 1951, says in the cover letter, “As we advised representatives of…the Atomic Energy Commission, the Site Review Committee and representatives of the Dow Chemical Company …on March 14 and 15, we have recommended site 4, at Rocky Flats northwest of Denver, as best satisfying the Site Selection Criteria…” The report states that the location was to be “West of the Mississippi River, North of Texas, but include Panhandle Area, South of the northern boundary of Colorado; East of Utah.” There were nine cities that met the preliminary criteria of being 5 to 25 miles from a city of at or near 25,000 people (from which to recruit a work force). The cities were Oklahoma City, Omaha, Lincoln, Amarillo, Springfield, Topeka, Denver, Colorado Springs, and Pueblo. There were 35 sites investigated in the vicinity of those nine cities. Six additional cities with populations fewer than 25,000 were added to the consideration, but none were judged to provide any advantage that would overcome the smaller population.

The site area was required to “…be a square, two miles on a side. Land presently owned or controlled by the Government is preferable.”  The plant area had to meet some basic suitability requirements for building construction and require a minimum displacement of homes and people. It was desired that the region have living conditions, community facilities, and recreational opportunities that would be attractive to workers. A low humidity climate was a primary consideration, since the plant would require significant air conditioning that was expected to be provided by evaporative cooling. Rail, highway, and air transportation factored into the evaluation as well as availability of power, water, and fuel. It was determined that the three Colorado cities were the only ones to meet the crucial climatic criteria. “Pueblo is less suitable than Denver in being less attractive to workers and in being home of Colorado Fuel and Iron’s vital industrial operations (a possible military target). Colorado Springs has the fundamental disadvantage of being served by a relatively small local electrical utility which has no interconnections with other utilities as emergency sources.”

It was determined that a site near Denver would be selected, and dozens of potential sites were evaluated. It is frequently asked why anyone would build a plant manufacturing plutonium components near a major metropolitan area. The report makes it clear that proximity to Denver was a positive consideration to those doing the evaluation. “The field survey reduced (the number of sites) to seven sites which lie nearest to the City of Denver and could be economically served with power, water, railroads, and highways.” (Emphasis added) The seven sites were:

North of and adjacent to the Rocky Mountain Arsenal

Six and a half miles northeast of Brighton

Gunbarrel Hill seven miles northeast of Boulder

Rocky Flats

South of the Federal Center

South of Marston Lake, two miles from Littleton, by the South Platte River

Two miles south of Littleton by the South Platte River

The selected site was Rocky Flats and the alternate was the one by the Rocky Mountain Arsenal. It is interesting that an “advantage” of the Arsenal location was it was nearer to present residential areas and considerably nearer to Stapleton Field. The advantages were overcome by “…the undesirable reaction of the public to having this additional ‘secret’ project close to the civilian installations northeast of Denver and in the South Platte Valley.” One mention of wind direction was in a table that lists “Unfavorable Factors” for the sites south of Marston Lake and the one south of Littleton that the prevailing wind was toward Denver.

I wrote in my book “An Insider’s View of Rocky Flats, Urban myths debunked,” that I found arguments that Rocky Flats shouldn’t have been selected because wind directions were misinterpreted to be “tedious.” The Stapleton Field wind rose shows the wind blowing in all directions, including to the north just under a fourth of the time and to the south a tenth of the time. I predict no one who thought or thinks Rocky Flats was a poor place to build a nuclear weapons plant would have endorsed any of the seven Denver locations or the 35 original sites near other cities.

Soviet Support to Western Peace Organizations

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This subject was first discussed in a post dated February 25, 2011 after I had received comments from a senior DOE official about my book, “An Insider’s View of Rocky Flats, Urban Myths Debunked.” One of the comments was about the massive support the Soviet Union had given to groups that protested places such as Rocky Flats. My most recent post was about an organization named Citizens Against Nuclear Disinformation In Denver (CANDID) that was formed by nuclear scientists and engineers frustrated by the flood rhetoric being spread by the ill-informed mainstream media and anti-nuclear groups following the highly publicized FBI raid of the Rocky Flats nuclear weapons plant in June 1989. There was a CANDID article authored by Dr. Michael R. Fox titled “The Counterfeit Peace Makers” published in December 1993 that discusses the work by the Communists to influence the “peace movements.” Dr. Fox mentions that a good scouting report would be useful to understand “…the values, agendas, tactics and influence on some to the participants. Specifically, the peace groups could stand a little more glare of scrutiny.”

“That these critics have reveled in portraying Rocky Flats workers as being a collection of careless devils incarnate, RF employees and friends may still be amazed as to how their critics could have reached such conclusions. A scouting report is thus provided.”

“To understand the Western Peace Movement (WPM)…it is best to understand the World Peace Council (WPC). The FBI has identified this organization as ‘the largest and most active Soviet international front organization, with affiliates in approximately 140 countries.’ The WPC worked through its U.S. supporting groups:  the U.S. Peace Council (USPC) and the Communist Party of the United States (CPUSA). Since the ‘C-word’ turns off many Americans, the WPM developed into many nice-sounding appealing organizations. Most of them were either controlled or influenced by the WPC. Since most of these groups contain members having undiluted contempt for the U.S., for capitalism, for individual freedom, and especially the U.S. military capabilities, it is not essential for the KGB or other Soviet agents…to control them. Without external control and minimum external influence they voluntarily performed their men-spirited missions, including discrediting Rocky Flats workers. All of this, of course, is done in the name of ‘peace.'”

“The WPM, almost since its inception in the 1920s, has been cursed with infiltrators from the political left, including infiltrations from the CPUSA. The pursuit of peace by true pacifists was conducted in such a way as to be willing to criticize and oppose all belligerents in…conflicts. Not so the WPM. Its motivations were and still are to discredit and dismantle the U.S. military capabilities, not those of the Soviets…”

“A major player in all of this anti-American activity is the Institute for Policy Studies (IPS)…This group has been very influential in promoting a decidedly anti-American agenda among the media, churches and clergy, and the Western Peace Movement on any number of issues has enjoyed the support of 100-200 members of Congress. It is no accident that these groups appear to be anti-American and critical of RF employees. They appear that way because they are that way, by design, training, and ideology.”

“An extraordinary debate about the nature of Pacifism has continued for 5 decades. A recent analysis of the debate was authored by Guenther Lewy…Lewy concludes, ‘While at one time pacifists were single-mindedly devoted to the principles of non-violence and reconciliation, today most pacifists groups defend the moral legitimacy of the armed struggle and guerrilla warfare, and they praise and support the Communist regimes emerging from such conflicts…”

“Finally, it comes as a surprise to many examining the peace issues to discover the existence of hundreds of peace groups in Eastern Europe. It is through their eyes that one can more clearly see the moral bankruptcy of the Western Peace Movement. People in these Eastern peace groups risked death itself fighting for their freedom through the use of the spoken and written word, and to rid themselves of their bestial tormentors, jailers, and murderers. Because the WPM is so heavily infused with Soviet apologists, it did not demand liberty, freedom, and civil rights for the people of Eastern Europe as a condition of nuclear disarmament of the West. In fact, the WPM ignored the appeals for human rights from Eastern groups….some leaders of the WPM forbade criticism of the Soviets.”

Citizens Against Nuclear Information in Denver (CANDID)

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CANDID was formed by nuclear scientists and engineers frustrated by the flood of anti-Rocky Flats Plant rhetoric being spread by the ill-informed mainstream media and anti-nuclear groups following the highly publicized FBI raid in June 1989. The federal search warrant that authorized the raid quickly made it into news reports and articles that popularized allegations of midnight burning of plutonium contaminated wastes and illegal discharges of toxic wastes. Of course none of the allegations were found to be true, and none of them were mentioned in the guilty plea “bargain” the government forced on Rockwell to save the reputations of those who organized the raid. (A full discussion is available in my book “An Insider’s View of Rocky Flats, Urban Myths Debunked.) CANDID tried to balance the inaccuracies with fact-based articles and analysis.

The raid and allegations did succeed at poisoning the reputation of the plant and the people who worked there producing nuclear weapons components, including plutonium triggers. The people who protested the mission of the plant were encouraged to increase their rhetoric, and the news media fed it all to the readers and watchers. CANDID was established in the early 1990s in this atmosphere, and began publishing newsletters to present technical responses to refute some of the disinformation. This posting will discuss the purpose of CANDID from an article titled “Whether/Whiter CANDID?” published as Volume 2/Issue 10 in July 1992. There will be future postings based on many other articles that continue to have relevance today. There is consideration to making a link to the body of work by CANDID. The following are quotes from the CANDID article.

“Let’s revisit the original purpose of CANDID. As Citizens Against Nuclear Disinformation in Denver, we have attempted to correct some of the disinformation about Rocky Flats and its mission, as well as to bring scientific fact to bear on a lot of unscientific fiction. Our purpose has been to try to get the public, the politicians, and anti-nuclear/defense groups to approach technical issues with as little emotion as possible and to apply the scientific method to these technical problems. This has been extremely difficult, given the highly emotional issues of the morality of nuclear deterrence, the diversion of federal funds from other needs to the military/industrial complex, etc. Some folks have simplistically assumed that if they are ‘for’ peace, then anyone who disagrees with them is ‘for’ war, or at least greedy enough to take the chance of having a war for money…”

“But presumably these arguments are behind us. Now that the mission of Rocky Flats has changed from production of plutonium triggers for nuclear weapons to cleaning up the plant, the weapons issue has been eliminated…The planning process and actual cleanup in some areas has begun.”

“So what need is there for CANDID? This is easily answered. The technical issues still remain. The residue and backlog and waste backlog still remains. These materials must be processed at Rocky Flats or shipped elsewhere for processing. Every option is encumbered with seemingly insurmountable problems. People don’t want the material stored or processed at Rocky Flats, but don’t want it shipped on the highways or by railroad to any other site either…”

“All of which brings me to my main concern. The weapons issue is gone, but the environmental issues remain. The same mind-set exists with some environmental activists as with peace activists; if you’re not for their environmental package, you are against the environment…Making it impossible for RFP to operate has been the intent in the past during the Cold War years…with some of the ‘green movement’ devotees. As Petra Kelly of the German green movement put it, ‘Our objective is to make the Western democracies ungovernable.’ Hopefully, that is no longer the desire of any of the greens…we should be working towards the same end…But we are far apart on the means to accomplish this goal.”

“The bottom line is that we have a formidable task ahead of us…We all presumably have the same goal now, that of environmental remediation and economic conversion of the plant site. We are not going to have infinite resources to accomplish our goal. Let’s hope we can work together. Otherwise, we are going to spend all our resources on litigation and paper work, and the benefit to the environment–and mission transition at Rocky Flats–will only receive pocket change.”

“The greatest obstacle to progress is not ignorance but the illusion of knowledge.” (Historian Daniel Boorstein)

Military Reunion After Action Report

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I was one of the 240 young men who reported to the 52nd Company of the U.S. Army Infantry Officers Candidate School (OCS) in September 1966.  Candidates were assigned to platoons mostly alphabetically, and I had the good fortune to be assigned to the Third Platoon. I say good fortune, because the platoon had an incredible assortment of talented candidates led by the most demanding Tactical (TAC) Officer, Lt. Paul R. Longgrear. The platoon dominated the weekly honor platoon competition, and scored the highest in other training competitions. About half of the candidates made it through the intensive six months of training and were commissioned as Second Lieutenants in a graduation ceremony held March 7, 1967.

Most of the new Army officers were assigned to the Infantry, but some of us were given commissions in branches such as the Chemical Corp, Army Intelligence Service, Military Police, and Finance. Most would serve at least one tour in Vietnam. A few of my fellow OCS graduates began working a few years back to locate everyone and gathering as many as possible for reunions. They especially wanted us to remember and honor the eleven young men, including one TAC officer, who died in combat.

Some of my fellow candidates from the Third Platoon recently arranged a reunion at a wonderful location in the area of Colorado that was the setting for a Zane Grey book “Riders of the Purple Sage.”  Ray and Kathy Heaton have a wonderful bed and breakfast about 6 miles from Dove Creek in Southwestern Colorado called Winterhawk Lodge B&B. The attendees were, alphabetically, Carl Jones, Kathy and Ray Heaton, Sheryl and I, Bob and Margarette (Butch) Holt, Dave Huebner, and Allen Hyman.  Carl and Dave won the distance driving award with their 2300 mile round trip. The Heatons provided us wonderful meals beginning with chili-frito pie the first evening (chili on top of fritos and topped with an assortment of condiments), cooked to order breakfasts including farm fresh eggs, sandwiches for lunch, and a delicious brisket the second evening. There was always plenty of coffee, tea, and lemonade. The hummingbirds were busy at the feeders all day, and a small herd of deer arrived one evening. You could safely say we had escaped the hustle and bustle of the city.

Winterhawk is in the center of much Southwest Colorado history. Ancient Puebloans had numerous settlements in the area, and Ray gave a tour to Hovenweep (a Ute/Paiute word that means deserted valley) National Park. There are remains of cut stone buldings estimated to have been constructed in the 1200’s. (Someone commented that the ancient ruins brought TAC officer Longgrear to mind.) The Anasasi (a Navajo word meaning Ancient ones or Ancient enemy, and a name not preferred by modern Puebloans) continue to have an influence on modern day Colorado. Beans cultivated from a several hundred year old stash left by the former residents are still grown in the area. The grain elevator in Dove Creek has a large painted sign that says, “Adobe Milling, Home of the Anasazi Beans.” Locals of the Dove Creek area say that the beans are good cooked with “collards and critters.”

Ray led another tour to Dolores Canyon Overlook, which is called the “Grand Canyon of Colorado.” We happened on Ray’s cousin Al Heaton with some ‘wannabe’ cowboys on a trail ride. Al operates the “East Pines Ranch,” which is over 100,000 acres. His crown jewel offering to guests is to let them do the hard work of helping him and his real cowboys move his cattle to winter range on a five day trip down the Dolores River (which brings to mind the two “City Slickers” movies).

Sheryl commented it was interesting to hear conversations about different memories of specific experiences during our six months together. There were also fasinating stories of what the different attendees did in service of the country and afterward. It was an honor to be with a few of my comrades for a short time again. Winterhawk is an ideal destination, and we will have fond memories of the reunion. I will close by quoting some words from the front of the pamphlet from the 40th anniversary reunion that was held at Fort Benning, “All gave some…some gave all.”