This one particular article stood out to me and I read it, clicked on the links and sub-links etc...and I thought that I would copy and paste it here for you all to read, mainly because I don't know how many of you know about this site, so, I wanted to share this with you all.
Actions Reveal Widespread Advance Knowledge of the Attack
Several events immediately preceding the September 11th attacks suggests many people other than Islamic extremists anticipated the attack. These include the following:
*1-Extremely large purchases of put options on stocks of American Airlines, United Airlines, and other companines hurt by the attack
*A surge in financial transactions on computers in the World Trade Center on the morning of 9/11/01
*Avoidance of the airlines and New York City on September 11th by a number of important people, some admitting to having been warned of an attack
*The behavior of five Israelis who appeared to be celebrating the attack on the World Trade Center as they filmed it from across the Hudson
*Donald Rumsfeld's disclosure on the eve of 9/11 that the Pentagon had lost over 2 trillion dollars
*A warning received by Rudolph Giuliani that the South Tower would collapse ten minutes before the event
*The privatization of the World Trade Center six weeks before the attack
Pre-9/11 Put Options on Companies Hurt by Attack Indicates Foreknowledge
Financial transactions in the days before the attack suggest that certain individuals used foreknowledge of the attack to reap huge profits. 1 The evidence of insider trading includes:
Huge surges in purchases of put options on stocks of the two airlines used in the attack -- United Airlines and American Airlines
Surges in purchases of put options on stocks of reinsurance companies expected to pay out billions to cover losses from the attack -- Munich Re and the AXA Group
Surges in purchases of put options on stocks of financial services companies hurt by the attack -- Merrill Lynch & Co., and Morgan Stanley and Bank of America
Huge surge in purchases of call options of stock of a weapons manufacturer expected to gain from the attack -- Raytheon
Huge surges in purchases of 5-Year US Treasury Notes
In each case, the anomalous purchases translated into large profits as soon as the stock market opened a week after the attack: put options were used on stocks that would be hurt by the attack, and call options were used on stocks that would benefit.
Put and call options are contracts that allow their holders to sell and buy assets, respectively, at specified prices by a certain date. Put options allow their holders to profit from declines in stock values because they allow stocks to be bought at market price and sold for the higher option price. The ratio of the volume of put option contracts to call option contracts is called the put/call ratio. The ratio is usually less than one, with a value of around 0.8 considered normal. 2
American Airlines and United Airlines, and several insurance companies and banks posted huge loses in stock values when the markets opened on September 17. Put options -- financial instruments which allow investors to profit from the decline in value of stocks -- were purchased on the stocks of these companies in great volume in the week before the attack.
United Airlines and American Airlines
Two of the corporations most damaged by the attack were American Airlines (AMR), the operator of Flight 11 and Flight 77, and United Airlines (UAL), the operator of Flight 175 and Flight 93. According to CBS News, in the week before the attack, the put/call ratio for American Airlines was four. 3 The put/call ratio for United Airlines was 25 times above normal on September 6. 4
This graph shows a dramatic spike in pre-attack purchases of put options on the airlines used in the attack. (source: www.optionsclearing.com)
The spikes in put options occurred on days that were uneventful for the airlines and their stock prices.
On Sept. 6-7, when there was no significant news or stock price movement involving United, the Chicago exchange handled 4,744 put options for UAL stock, compared with just 396 call options -- essentially bets that the price will rise. On Sept. 10, an uneventful day for American, the volume was 748 calls and 4,516 puts, based on a check of option trading records. 5
The Bloomberg News reported that put options on the airlines surged to the phenomenal high of 285 times their average.
Over three days before terrorists flattened the World Trade Center and damaged the Pentagon, there was more than 25 times the previous daily average trading in a Morgan Stanley "put" option that makes money when shares fall below $45. Trading in similar AMR and UAL put options, which make money when their stocks fall below $30 apiece, surged to as much as 285 times the average trading up to that time. 6
When the market reopened after the attack, United Airlines stock fell 42 percent from $30.82 to $17.50 per share, and American Airlines stock fell 39 percent, from $29.70 to $18.00 per share. 7
Several companies in the reinsurance business were expected to suffer huge losses from the attack: Munich Re of Germany and Swiss Re of Switzerland -- the world's two biggest reinsurers, and the AXA Group of France. In September, 2001, the San Francisco Chronicle estimated liabilities of $1.5 billion for Munich Re and $0.55 bilion for the AXA Group and telegraph.co.uk estimated liabilities of £1.2 billion for Munich Re and £0.83 billion for Swiss Re. 8 9
Trading in shares of Munich Re was almost double its normal level on September 6, and 7, and trading in shares of Swiss Re was more than double its normal level on September 7. 10
Financial Services Companies
Merrill Lynch and Morgan Stanley Morgan Stanley Dean Witter & Co. and Merrill Lynch & Co. were both headquartered in lower Manhattan at the time of the attack. Morgan Stanley occupied 22 floors of the North Tower and Merrill Lynch had headquarters near the Twin Towers. Morgan Stanley, which saw an average of 27 put options on its stock bought per day before September 6, saw 2,157 put options bought in the three trading days before the attack. Merrill Lynch, which saw an average of 252 put options on its stock bought per day before September 5, saw 12,215 put options bought in the four trading days before the attack. Morgan Stanley's stock dropped 13% and Merrill Lynch's stock dropped 11.5% when the market reopened. 11
Bank of America showed a fivefold increase in put option trading on the Thursday and Friday before the attack.
A Bank of America option that would profit if the No. 3 U.S. bank's stock fell below $60 a share had more than 5,900 contracts traded on the Thursday and Friday before the Sept. 11 assaults, almost five times the previous average trading, according to Bloomberg data. The bank's shares fell 11.5 percent to $51 in the first week after trading resumed on Sept. 17. 12
While most companies would see their stock valuations decline in the wake of the attack, those in the business of supplying the military would see dramatic increases, reflecting the new business they were poised to receive.
Raytheon, maker of Patriot and Tomahawk missiles, saw its stock soar immediately after the attack. Purchases of call options on Raytheon stock increased sixfold on the day before the attack.
A Raytheon option that makes money if shares are more than $25 each had 232 options contracts traded on the day before the attacks, almost six times the total number of trades that had occurred before that day. A contract represents options on 100 shares. Raytheon shares soared almost 37 percent to $34.04 during the first week of post-attack U.S. trading. 13
Raytheon has been fined millions of dollars inflating the costs of equipment it sells the US military. Raytheon has a secretive subsidiary, E-Systems, whose clients have included the CIA and NSA. 14
US Treasury Notes
Five-year US Treasury notes were purchased in abnormally high volumes before the attack, and their buyers were rewarded with sharp increases in their value following the attack.
The Wall Street Journal reported on October 2 that the ongoing investigation by the SEC into suspicious stock trades had been joined by a Secret Service probe into an unusually high volume of five-year US Treasury note purchases prior to the attacks. The Treasury note transactions included a single $5 billion trade. As the Journal explained: "Five-year Treasury notes are among the best investments in the event of a world crisis, especially one that hits the US. The notes are prized for their safety and their backing by the US government, and usually rally when investors flee riskier investments, such as stocks." The value of these notes, the Journal pointed out, has risen sharply since the events of September 11. 15
The SEC's Investigation
Shortly after the attack the SEC circulated a list of stocks to securities firms around the world seeking information. 16 A widely circulated article states that the stocks flagged by the SEC included those of the following corporations: American Airlines, United Airlines, Continental Airlines, Northwest Airlines, Southwest Airlines, US Airways airlines, Martin, Boeing, Lockheed Martin Corp., AIG, American Express Corp, American International Group, AMR Corporation, AXA SA, Bank of America Corp, Bank of New York Corp, Bank One Corp, Cigna Group, CNA Financial, Carnival Corp, Chubb Group, John Hancock Financial Services, Hercules Inc., L-3 Communications Holdings, Inc., LTV Corporation, Marsh & McLennan Cos. Inc., MetLife, Progressive Corp., General Motors, Raytheon, W.R. Grace, Royal Caribbean Cruises, Ltd., Lone Star Technologies, American Express, the Citigroup Inc., Royal & Sun Alliance, Lehman Brothers Holdings, Inc., Vornado Reality Trust, Morgan Stanley, Dean Witter & Co., XL Capital Ltd., and Bear Stearns.
An October 19 article in the San Francisco Chronicle reported that the SEC, after a period of silence, had undertaken the unprecedented action of deputizing hundreds of private officials in its investigation:
The proposed system, which would go into effect immediately, effectively deputizes hundreds, if not thousands, of key players in the private sector.
In a two-page statement issued to "all securities-related entities" nationwide, the SEC asked companies to designate senior personnel who appreciate "the sensitive nature" of the case and can be relied upon to "exercise appropriate discretion" as "point" people linking government investigators and the industry. 17
Michael Ruppert, a former LAPD officer, explains the consequences of this action:
What happens when you deputize someone in a national security or criminal investigation is that you make it illegal for them to disclose publicly what they know. Smart move. In effect, they become government agents and are controlled by government regulations rather than their own conscience. In fact, they can be thrown in jail without a hearing if they talk publicly. I have seen this implied threat time and again with federal investigations, intelligence agents, and even members of the United States Congress who are bound so tightly by secrecy oaths and agreements that they are not even able to disclose criminal activities inside the government for fear of incarceration. 18
Interpreting and Reinterpreting the Data
An analysis of the press reports on the subject of apparent insider trading related to the attack shows a trend, with early reports highlighting the anomalies, and later reports excusing them. In his book Crossing the Rubicon Michael C. Ruppert illustrates this point by first excerpting a number of reports published shortly after the attack:
A jump in UAL (United Airlines) put options 90 times (not 90 percent) above normal between September 6 and September 10, and 285 times higher than average on the Thursday before the attack.
-- CBS News, September 26
A jump in American Airlines put options 60 times (not 60 percent) above normal on the day before the attacks.
-- CBS News, September 26
No similar trading occurred on any other airlines
-- Bloomberg Business Report, the Institute for Counterterrorism (ICT), Herzliyya, Israel [citing data from the CBOE] 3
Morgan Stanley saw, between September 7 and September 10, an increase of 27 times (not 27 percent) in the purchase of put options on its shares. 4
Merrill-Lynch saw a jump of more than 12 times the normal level of put options in the four trading days before the attacks. 5
3. "Mechanics of Possible Bin Laden Insider Trading Scam," Herzlyya International Policy Institute for Counter Terrorism (ICT), September 22, 2001. Michael C. Ruppert, "The Case for Bush Administration Advance Knowledge of 9-11 Attacks," From the Wilderness April 22, 2002. Posted at Centre for Research and Globalization
4. ICT, op. cit, citing data from the Chicago Board of Options Exchange (CBOE). [...] "Terrorists trained at CBPE." Chicago Sun-Times, September 20, 2001,
5. ICT, op. cit.
Ruppert then illustrates an apparent attempt to bury the story by explaining it away as nothing unusual. A September 30 New York Times article claims that "benign explanations are turning up" in the SEC's investigation. 20 The article blames the activity in put options, which it doesn't quantify, on "market pessimism," but fails to explain why the price of the stocks in the airlines doesn't reflect the same market pessimism.
The fact that $2.5 million of the put options remained unclaimed is not explained at all by market pessimism, and is evidence that the put option purchasers were part of a criminal conspiracy. 21
1. Insider Trading Apparently Based on Foreknowledge of the 9/11 Attacks, London Times, 9/18/01 [cached]
2. Put/Call Ratio, StreetAuthority.com,
3. Profiting From Disaster?, CBSNews.com, 9/19/01 [cached]
4. Prices, Probabilities and Predictions, OR/MS Today, [cached]
5. Exchange examines odd jump, Associated Press, 9/18/01 [cached]
6. SEC asks Goldman, Lehman for data, Bloomberg News, 9/20/01 [cached]
7. Black Tuesday: The World's Largest Insider Trading Scam?, ict.org.il, September 19, 2001 [cached]
8. Suspicious profits sit uncollected Airline investors seem to be lying low, San Francisco Chronicle, 9/29/01 [cached]
9. Profits of doom, telegraph.co.uk, 9/23/01 [cached]
10. Profits of doom ..., 9/23/01
11. Black Tuesday ..., 9/19/01
12. Bank of America among 38 stocks in SEC's attack probe, Bloomberg News, 10/3/01 [cached]
13. Bank of America ..., 10/3/01
14. Raytheon, corpwatch.org,
15. Suspicious trading points to advance knowledge by big investors of September 11 attacks, wsws.org, 10/5/01 [cached]
16. Bank of America ..., 10/3/01
17. SEC wants data-sharing system Network of brokerages would help trace trades by terrorists, San Francisco Chronicle, 9/19/01 [cached]
18. Crossing the Rubicon, , page 243
19. Crossing the Rubicon, , page 238-239,634
20. Whether advance knowledge of U.S. attacks was used for profit, New York Times, 9/30/01 [cached]
21. Suspicious profits ..., 9/29/01
Financial Transactions on WTC Computers Surged Before Attack
Computer systems in the World Trade Center processed an unusual volume of credit card transactions in the minutes before the planes crashed into the towers on 9/11/01. The computer systems were destroyed in the subsequent collapses of the towers. Although details of the surge remain unknown, reports speculate that the transactions may have amounted to more than $100 million in value, with both the volume and sizes of transactions surging. 1 2
In December of 2001, press reports noted that Convar Systeme Deutschland GmbH was working on recovering data from some hard drives extracted from the destroyed computer systems. Unlike conventional data recovery efforts, the German company used laser scanning to read drive surfaces in order to create virtual disks. These virtual disks were then read to recover data. As of December 20th, 2001, Convar had completed processing 39 out of 81 drives, and expected to receive 20 more drives in January. These reports do not indicate how many drives were believed lost or destroyed in the collapses. Companies paid Convar between $20,000 and $30,000 per drive for the work. 3
1. German Firm Probes Final World Trade Center Deals, Reuters, 12/16/01 [cached]
2. The Myth of WTC, Shanghai Star, 12/20/01 [cached]
3. Computer disk drives from WTC could yield clues, CNN.com, 12/20/01 [cached]
People Who Avoided the Airlines and the Twin Towers
Much has been reported about how warnings of attacks by Muslim extremists in the year leading up to 9/11/01 were ignored. So far no official has been fired or otherwise punished for his or her failure to act on such information.
What is more informative than who failed to act on a tip, is who acted on a tip. A number of people apparently knew to stay clear of the World Trade Center on September 11th, 2001.
Government Officials and Business Leaders
There is evidence that a group of Pentagon officials was warned to avoid the attack targets. Newsweek reported:
Three weeks ago there was another warning that a terrorist strike might be imminent - On September 10, Newsweek has learned, a group of top Pentagon officials suddenly cancelled travel plans for the next morning, apparently because of security concerns. 1
A number of business leaders who would normally have been in the World Trade Center, were instead at a meeting hosted by Warren Buffett on September 11th at Offutt Air Force Base in Omaha, Nebraska. That group included Anne Tatlock, CEO of Fiduciary Trust Inc., a company that occupied five floors on or above the 90th floor of the South Tower. 2 3 (This is the same Air Force Base that George W. Bush would fly to later that day. It has an underground command center.) 4
San Francisco Mayor Willie Brown admitted to having received a warning from what he described as his airport security late Monday evening, just hours before the attack. 5
Salman Rushdie, who is under the continuous protection of Scotland Yard, was prevented from flying on September 11th, 2001. 6
On 9/11/01, Jim Pierce, cousin of President Bush, was scheduled to attend a conference on the 105th floor of the South Tower, where his company's New York offices were based. But the conference was moved across the street to the Millennium Hotel, because, the story goes, the group was too large. 7
Another group of people that received warnings in advance of the attack were employees of Odigo, the instant messaging service. Two employees received e-mail messages two hours before the first World Trade Center assault, predicting the attack. 8
According to reporter Christopher Bollyn, Zim American Israeli Shipping Co. broke a lease in order to vacate the World Trade Center just days before the attack. Bollyn's source claims that Zim's lease extended through the end of the year and that the termination cost $50,000. 9
The company heading a consortium that had just obtained a 99-year lease on the World Trade Center was supposedly spared by a last-minute cancellation. According to the New York Times, Silverstein Properties had planned to meet on 9/11/01 on the 88th floor of one of the towers to "discuss what to do in the event of a terrorist attack," but cancelled the meeting Monday night "because one participant could not attend." 10
1. Bush: We're at War, Newsweek, 9/24/01 [cached]
2. '9/11' Facing our Fascist State, I/R Press, 2002, page 52
3. Franklin unit rebuilds after 9/11 tragedy, San Francisco Business Times, 2/1/02 [cached]
4. September 11th: The President's Story, CBS, 9/11/02 [cached]
5. Willie Brown got low-key early warning about air travel, SFGate.com, 9/12/01 [cached]
6. , London Times, 9/27/01 [cached]
7. President's cousin escaped death thanks to schedule change, Ananova, 9/18/01 [cached]
8. Odigo says workers were warned of attack, HAARETZ.com, [cached]
9. Israeli Company Mum About WTC Pullout, American Free Press,
10. Reinsurance Companies Wait to Sort Out Cost of Damage, New York Times, 9/12/01, page C6
Five Men Including Mossad Agents Documented the WTC Attack
On the day of the attack a resident of Jersey City reported suspicious behavior by a group of men who appeared to be celebrating as they filmed the destruction across the Hudson. Mainstream media initially reported that the men, who were arrested around 4:30 PM, were Arabs. In fact the men were Israelis. The FBI released them 71 days later. The FBI also detained other groups of Israelis before and after 9/11/01, concluding some were part of an "organised intelligence-gathering operation" designed to "penetrate government facilities." 1
The following excerpt from a 2003 version of Paul Thompson's 9-11 Timeline summarizes reports of the group of Israelis who filmed the World Trade Center attack from New Jersey. 2
September 11, 2001 (W): Five Israelis are arrested for "puzzling behavior" related to the WTC attacks. They are arrested around 4:30 P.M. after having filmed the burning WTC from the roof of their company's building near Liberty State Park, then shouting in what was interpreted as cries of joy and mockery. They were spotted by a neighbor who called the police and the FBI. The police tracked them down in a van with the words "Urban Moving Systems" written on the side. [ Bergen Record, 9/12/01, Ha'aretz, 9/17/01] One man was found with $4,700 in cash hidden in his sock, another had two passports on him, and a box cutter was found in the van. [ ABC News, 6/21/02] Investigators say that "There are maps of the city in the car with certain places highlighted... It looked like they're hooked in with this. It looked like they knew what was going to happen." [ Bergen Record, 9/12/01] One of these Israelis later says, "Our purpose was to document the event." [ ABC News, 6/21/02] The FBI later concludes at least two are Mossad agents and that all were on a Mossad surveillance mission. The FBI interrogates them for weeks. [ Forward, 3/15/02] They are held on immigration violation charges and released 71 days later. [ ABC News, 6/21/02] Their names are later identified as Sivan and Paul Kurzberg, Oded Ellner, Omer Marmari and Yaron Shmuel. [ Forward, 3/15/02]
1. Five Israelis were seen filming as jet liners ploughed into the Twin Towers on September 11, 2001 ..., SundayHerald.com, 11/2/03 [cached]
2. , Center for Cooperative Research,
Rumsfeld Buries Admission of Missing 2+ Trillion Dollars in 9/10/01 Press Conference
On September 10, 2001, Secretary of Defense Donald Rumsfeld held a press conference to disclose that over $2,000,000,000,000 in Pentagon funds could not be accounted for. Rumsfeld stated: "According to some estimates we cannot track $2.3 trillion in transactions." According to a report by the Inspector General, the Pentagon cannot account for 25 percent of what it spends. 1 2
Such a disclosure normally might have sparked a huge scandal. However, the commencement of the attack on New York City and Washington in the morning would assure that the story remained buried. To the trillions already missing from the coffers, an obedient Congress terrorized by anthrax attacks would add billions more in appropriations to fight the "War on Terror."
The Comptroller of the Pentagon at the time of the attack was Dov Zakheim, who was appointed in May of 2001. Before becoming the Pentagon's money-manager, he was an executive at System Planning Corporation, a defense contractor specializing in electronic warfare technologies including remote-controlled aircraft systems. 3 4 Zakheim is a member of the Project for a New American Century and participated in the creation of its 2000 position paper Rebuilding America's Defenses which called for "a New Pearl Harbor." 5
Estimates of the sums of money missing vary wildly. A 2003 report put the amount missing at "more than a trillion dollars." 6
1. The War On Waste, CBSnews.com, 1/29/02 [cached]
2. Vince Gonzales Investigates The Pentagon's War On Waste, CBSNews,
3. Radar Physics Group, sysplan.com, [cached]
4. Flight Termination System, sysplan.com, [cached]
5. Profile, Dov S. Zakheim, rightweb.irc-online.org, 11/22/03 [cached]
6. Military waste under fire: $1 trillion missing, San Francisco Chronicle, Sunday, May 18, 2003 [cached]
Mayor Giuliani Had Privileged Warning of Unprecedented Collapse
Warnings of the imminent collapse of the South Tower are inherently suspicious, given how unexpected that event was.
No skyscraper in the world had ever collapsed for any reason, other than controlled demolition.
Later revisions notwithstanding, the collapse took almost everyone by surprise.
Firefighters and emergency workers did not receive warnings.
Such warnings indicate foreknowledge, whether or not one believes any of the official theories of the collapses of the Twin Towers.
Rudolph Giuliani's Warning
Rudolph Giuliani, mayor of New York City on 9/11/01, has stated that he was at the base of the Twin Towers just minutes before the explosive collapse of the South Tower and then went to 75 Barclay Street -- where he had a makeshift command center.
QUESTION: Mr. Mayor, just to clarify something that Mr. Kerik said you were about 10 minutes past when you were standing with several of the high ranking officers who you lost and then you went to Barkley [sic] Street, have you thought about that 10 minute gap, how you were 10 minutes from being in a horrible situation?
GIULIANI: I haven't had a chance to think about it.
QUESTION: Then that could of evacuate the 10--you would have been with them 10 minutes earlier before the building collapsed?
GIULIANI: The--some of the people that we lost we saw like Father Judge (ph) and Chief Gansy (ph), Bill Fehan (ph), we saw them about 10 minutes before--before we went over to 75 Barkley [sic] street. And I talked to their families and I explained to them that they were working very hard and they were working at what they loved to do. And I'm sure their efforts will end up having saved other lives and their families can be very proud of them.
In an ABC News interview, Giuliani states that he was "told that the World Trade Center was gonna' collapse," and that it did collapse, referring to the 9:59 destruction of the South Towers, and implies that the warning was not well in advance of the event.
I .. I went down to the scene and we set up a headquarters at 75 Barkley Street, which was right there with the Police Commissioner, the Fire Commissioner, the Head of Emergency Management, and we were operating out of there when we were told that the World Trade Center was gonna' to collapse. And it did collapse before we could actually get out of the building, so we were trapped in the building for 10, 15 minutes, and finally found an exit, got out, walked north, and took a lot of people with us.
Who warned Giuliani? To our knowledge, no reporter working for any mainstream media organization has put that question to Giuliani. However there are passages from the Oral Histories of emergency responders that shed light on the question. The account of Richard Zarillo contains the following:
As I was walking towards the Fire command post, I found Steve Mosiello. I said, Steve, where's the boss? I have to give him a message. He said, well, what's the message? I said the buildings are going to collapse; we need to evac everybody out. With a very confused look he said who told you that? I said I was just with John at OEM. OEM says the buildings are going to collapse; we need to get out.
He escorted me over to Chief Ganci. He said, hey, Pete, we got a message that the buildings are going to collapse. His reply was who the f___ told you that? Then Steve brought me in and with Chief Ganci, Commissioner Feehan, Steve, I believe Chief Turi was initially there, I said, listen, I was just at OEM. The message I was given was that the buildings are going to collapse; we need to get our people out. At that moment, this thunderous, rolling roar came down and that's when the building came down, the first tower came down. 2
Although Zarillo describes being directly questioned, both by Fire Marshal Steven Mosiello and by Chief Peter Ganci, about who told him that the buildings were going to collapse, he does not clarify the source of the message beyond the OEM (Office of Emergency Management), where he was "just with John."
Steven Mosiello's account corroborates Zarillo's:
A. At that point I don't know exactly when the Commissioner and Mayor had left. It was pretty soon after they had left that Richie Zarillo, who works with EMS -- I believe he's an OEM liaison -- came running up to me. I was not on the ramp at this time. I was like almost at the sidewalk location.
He said Steve, where's the Chief? I have to tell him, you know -- I said tell him what, Richie? These buildings are in imminent danger of collapse. I said how do you know that, you know? So he ran with me. I ran over and grabbed Chief Ganci and said Chief, these buildings are in imminent danger of collapse. He looked up at me. 3
1. Text: Giuliani on Rescue Efforts, WashingtonPost.com, 9/12/01 [cached]
2. World Trade Center Task Force Interview: EMT Richard Zarrillo, New York Times, 10/25/01
3. World Trade Center Task Force Interview: Fire Marshal Steven Mosiello, New York Times, 10/23/01
Ownership, Control, and Insurance of The World Trade Center
The World Trade Center complex came under the control of a private owner for the first time only in mid-2001, having been built and managed by the Port Authority as a public resource. The complex was leased to a partnership of Silverstein Properties and Westfield America. 1 2 The new controllers acquired a handsome insurance policy for the complex including a clause that would prove extremely valuable: in the event of a terrorist attack, the partnership could collect the insured value of the property, and be released from their obligations under the 99-year lease. 3
Author Don Paul investigated this and related issues for his 2002 book, which contains the following passage detailing financial aspects and ownership changes of the complex preceding the attack.
On April 26 of 2001 the Board of Commissioners for the Port Authority of New York and New Jersey awarded Silverstein Properties and mall-owner Westfield America a 99-year-lease on the following assets: The Twin Towers, World Trade Center Buildings 4 and 5, two 9-story office buildings, and 400,000 square feet of retail space.
The partners' winning bid was $3.2 billion for holdings estimated to be worth more than $8 billion. JP Morgan Chase, a prestigious investment-bank that's the flagship firm of its kind for Rockefeller family interests, advised the Port Authority, another body long influenced by banker and builder David Rockefeller, his age then 85, in the negotiations.
The lead partner and spokesperson for the winning bidders, Larry Silverstein, age 70, already controlled more than 8 million square feet of New York City real estate. WTC 7 and the nearby Equitable Building were prime among these prior holdings. Larry Silverstein also owned Runway 69, a nightclub in Queens that was alleged 9 years ago to be laundering money made through sales of Laotian heroin. 4
In December 2003, the Port Authority agreed to return all of the $125 million in equity that the consortium headed by Silverstein originally invested to buy the lease on the World Trade Center. The Port Authority rejected a request by the Wall Street Journal to review the transaction. 5 A press report from November 2003 about the same transaction noted that it would allow Silverstein to retain development rights. 6
The lease deal didn't close until July 24th, just 6 weeks before the attack. 7
Don Paul also documented the money flows surrounding the loss of Building 7.
In February of 2002 Silverstein Properties won $861 million from Industrial Risk Insurers to rebuild on the site of WTC 7. Silverstein Properties' estimated investment in WTC 7 was $386 million. So: This building's collapse resulted in a profit of about $500 million. 8
The insurance money flows involved in the destruction of the original six World Trade Center buildings were far greater. Silverstein Properties, the majority owner of WTC 7, also had the majority interest in the original World Trade Center complex. Silverstein hired Willis Group Holdings Ltd. to obtain enough coverage for the complex. Willis undertook "frenetic" negotiations to acquire insurance from 25 carriers. The agreements were only temporary contracts when control of the WTC changed hands on July 24. 9
After the attack, Silverstein Properties commenced litigation against its insurers, claiming it was entitled to twice the insurance policies' value because, according to a spokesman for Mr. Silverstein, "the two hijacked airliners that struck the 110-story twin towers Sept. 11 were separate 'occurrences' for insurance purposes, entitling him to collect twice on $3.6 billion of policies." This was reported in the Bloomberg News less than one month after the attack. 10
The ensuing legal battle between the leaseholders and insurers of the World Trade Center was not about how the 9/11/01 attack on the WTC could be considered two attacks, when the WTC was only destroyed once. Rather it seemed to revolve around whether the beneficiaries thought it was one or two "occurrences." The proceedings before U.S. District Judge John S. Martin involved a number of battles over the insurers' discovery rights regarding conversations about this issue between insurance beneficiaries and their lawyers. 11 12
In December 2004, a jury ruled in favor of the insurance holders' double claim. 13
To put these events in perspective, imagine that a person leases an expensive house, and immediately takes out an insurance policy covering the entire value of the house and specifically covering bomb attacks. Six weeks later two bombs go off in the house, separated by an hour. The house burns down, and the lessor immediately sues the insurance company to pay him twice the value of the house, and ultimately wins. The lessor also gets the city to dispose of the wreckage, excavate the site, and help him build a new house on the site.
1. Westfield Nabs Trade Center mall, ICSC.org, 6/2/2001 [cached]
2. Governor Pataki, Acting Governor DiFrancesco Laud Historic Port Authority Agreement to Privatize World Trade Center, Port Authority on NY & NJ, 7/24/01 [cached]
3. Reinsurance Companies Wait to Sort Out Cost of Damage, New York Times, 9/12/01, page C6
4. Facing Our Fascist State, I/R Press, 2002, page 38
5. MetLife Will Sell Sears Tower, Wall Street Journal Online, 3/12/04 [cached]
6. Most of WTC Down Payment to Be Returned, 11/22/03 [cached]
7. Insurers Debate: One Accident or Two?, Bloomberg News, 10/10/01
8. Facing Our Fascist State, , page 47
9. Double Indemnity, law.com, 9/3/02 [cached]
10. Judge John S. Martin Jr.'s Latest Opinion in Swiss Re v. WTC., Newsday, 09/25/02 [cached]
11. Twin Tower Insurers Win Discovery Fight, 6/20/02 [cached]
12. World Trade Center's Mortgage Holder Loses Discovery Fight, 7/8/02 [cached]
13. Jury Awards $2.2 Billion in 9/11 Insurance, United Press International, 12/6/04 [cached]
Is it just me, or does this all sound just a little bit TOO coincidental that all these transactions and avoidences just so happened to take place only days and hours BEFORE the attacks?