Catherine Austin Fitts
Catherine Austin Fitts
|Assistant Secretary of Housing and Urban Development for Housing|
|President||George H.W. Bush|
|Preceded by||Thomas Demery|
|Succeeded by||Arthur J. Hill|
|Born||December 24, 1950|
Philadelphia, Pennsylvania, United States
|Education||MBA, University of Pennsylvania|
B.A., University of Pennsylvania
Catherine Austin Fitts (born December 24, 1950) is an American investment banker and former public official who served as managing director of Dillon, Read & Co. and, during the Presidency of George H.W. Bush, as United States Assistant Secretary of Housing and Urban Development for Housing. She has widely written and commented on the subject of public spending and has alleged several large scale instances of government fraud.
Early life and education
Catherine Austin Fitts was born in Philadelphia, Pennsylvania. She earned a bachelor's degree in history from the University of Pennsylvania. After graduating, she briefly worked as a bartender until one of her customers, who was director of admissions at The Wharton School, encouraged her to pursue graduate studies. She received her MBA from Wharton in 1978.
Dillon, Read & Co.
After graduate school, Fitts went to work at Dillon, Read & Co. While there, in 1982, she organized a novel municipal bond sale to raise several billion dollars to revitalize the New York Subway System, marking the first time that a public agency had sold bonds backed by rider fares. In 1986, Fitts became the first woman promoted to managing director of Dillon, Read & Co. in the investment bank's then 156 year history. At the helm of the bank she became what Businessweek described as "Wall Street's foremost champion" of public utilities bonds.
U.S. Department of Housing and Urban Development (HUD)
During the United States presidential election, 1988, she worked on the campaign of George H.W. Bush and was appointed as Assistant Secretary of Housing and Urban Development for Housing in the Bush administration where she was billed as the "cleaning lady of HUD", charged with repairing its reputation in the aftermath of the savings and loan crisis. Among her initial observations upon taking office was that the department had a $300 billion portfolio of mortgage insurance but only employed one certified actuary. The reforms she announced included a plan to sell government-foreclosed homes at a 50-percent discount to non-profit organizations to operate as rentals; previously the government sought to sell residential properties for the highest possible value leading to a large amount of real estate it had to manage at great expense and a shortage of housing stock in some high-density markets.
She resigned her post in 1990, following a report that her relationship with Secretary of Housing and Urban Development Jack Kemp had soured, a report Kemp denied. Fitts' departure prompted criticism of Kemp; she had been – according to Neal Peirce – "widely regarded as the best manager he brought in".
Hamilton Securities and Solari
After leaving government, Fitts founded Hamilton Securities, an employee-owned brokerage house, which she ran until 1998. In 1993, Hamilton Securities won a contract with HUD to manage its $500 billion investment portfolio. While managing HUD's portfolio, Fitts devised a streamlined mortgage selling software program – Community Wizard – that some have claimed saved the department several hundreds of millions of dollars.
In 1997, HUD canceled the Hamilton contract over what it claimed were accounting errors involving the program; an investigation into Hamilton Securities was launched by the HUD Inspector-General, the FBI, and the Securities and Exchange Commission. According to Fitts, the investigation was undertaken as retribution against her; she claims that Community Wizard data revealed that some federally-guaranteed mortgage securities may have been fraudulently issued. One outside complainant, a government contractor, charged insider dealing and bid rigging in its contention that Hamilton Securities had obtained its HUD business due to favoritism, charges Hamilton Securities denied. In 2002 the investigation was closed with prejudice with investigators stating they had found no evidence of wrongdoing by Fitts or Hamilton Securities. However, according to Fitts, all of the company's assets, along with her personal assets, were destroyed defending themselves during the multi-year investigation.
Writing and commentary
Fitts has researched and commented on government spending. In a 2004 study published in World Affairs: The Journal of International Issues, she purported to find "evidence that a very large proportion of the nation's wealth is being illegally diverted since several decades into secret, unaccountable channels and programmes with unspecified purposes, including covert operations and subversions abroad and clandestine military R&D at home. Public institutions have been infiltrated and taken over by shadowy groups in the service of powerful private and vested interests, often at the expense of the common good."
In 2017 Fitts co-authored a report, with Michigan State University economist Mark Skidmore, that claimed to find $21 trillion in unauthorized spending by the U.S. Department of Defense and U.S. Department of Housing and Urban Development over a 17-year period. Four days following the report's release, the Department of Defense announced it would undertake the first independent financial audit in its history. The report was subsequently cited by United States Representative Alexandria Ocasio-Cortez as evidence of government funding that could be redirected to healthcare programs.
Fitts has claimed that HUD's mission of spurring economic growth is secondary to what she contends is its use as a fundraising mechanism for military and intelligence agencies involving a complex securities scheme using HUD-backed Ginnie Mae investments. According to Fitts, HUD overpays to rehabilitate public housing and funnels the difference into unaudited black budget programs at the behest of national security agencies.
During the United States presidential election, 2016, Fitts supported the campaign of Donald Trump. On December 8, 2020, Trump retweeted one of Fitts' tweets which linked to an article on Breitbart. She has donated to political campaigns of Democrats Cynthia McKinney and Marcy Kaptur, and Republicans Rand Paul and Thomas Massie.
Solari Report and Website
Fitts is the lead contribuor for the online news, marketing journal, Solari Report. Solari also publishes,"The Solari Report" magazine which is part of their subscription plan. It is a quarterly wrap up of the market activities and news events of the period
- "Nomination of C. Austin Fitts To Be an Assistant Secretary of Housing and Urban Development". American Presidency Project. University of California Santa Barbara. Retrieved December 8, 2020.
- Bianco, Anthony (February 23, 1987). "The Wonder Woman of Muni Bonds". BusinessWeek.
- "Austin Fitts Better Be Good with Hammer and Nails". Businessweek. November 27, 1989.
- Kane, Mari (September 5, 2002). "On the Money Trail". Metro Silicon Valley. Retrieved December 8, 2020.
- Kerch, Steve (January 21, 1990). "Venerable FHA Seeking to Escape Cloud at HUD". Asbury Park Press. Chicago Tribune News Service. Retrieved December 8, 2020 – via newspapers.com.(subscription required)
- Hilzenrath, David (November 24, 1989). "HUD to Sell Foreclosures". Northwest Herald. The Washington Post News Service. Retrieved December 8, 2020 – via newspapers.com.(subscription required)
- Brown, Mike (August 18, 1990). "Schiff's Swearing In Ceremony Called a Joyous Occasion by HUD Secretary". Courier-Journal. Retrieved December 8, 2020.
- Pearce, Neil (November 19, 1990). "Jack Kemp's Small Circle of Advisers the Target of Loud Criticism". The Clarion-Ledger. National Journal. Retrieved December 8, 2020 – via newspapers.com.(subscription required)
- "Community Oriented Finance Expert Leading Free Workshop". Independent Coast Observer. June 21, 2002. Retrieved December 8, 2020 – via newspapers.com.(subscription required)
- Rodriguez, Paul. "HUD Gives Up with Fitts". Insight on the News.
- Havemann, Judith (October 28, 1997). "Firing of Outside Financial Advisory Only Adds to Furor". The Washington Post. Retrieved December 8, 2020.
- "Resume". solari.com. Solari. Retrieved December 8, 2020.
- Fitts, Catherine Austin (2004). "The Black Budget of the United States". World Affairs: The Journal of International Issues. 8 (2): 17–34. JSTOR 48504790.
- "MSU scholars find $21 trillion in unauthorized government spending; Defense Department to conduct first-ever audit". msu.edu. Michigan State University.
- "AP Fact Check: Trump's Trade Claims". The Times-News. Associated Press – via newspapers.com.(subscription required)
- Phillips, Kendall (March 2018). ""The safest hands are our own": cinematic affect, state cruelty, and the election of Donald J. Trump". Communication and Critical/Cultural Studies. 15 (1): 85–89. doi:10.1080/14791420.2018.1435082. S2CID 150353986.
- "Twitter". Factba.se. Retrieved December 8, 2020.
- "Donor Lookup". opensecrets.org. Open Secrets. Retrieved December 8, 2020.
- Coast to Coast guests: Catherine Austin Fitts