8/7/02 11:26:36 PM Pacific Daylight Time

Geoff Metcalf interviews Walter Burien on hidden public money
Sunday, August 6, 2000


Are local and state governments strapped with severe budgetary constraints?
Far from it, WorldNetDaily columnist Geoff Metcalf recently interviewed
researcher W. Burien (CAFR1@aol.com ) about his work in educating the
taxpaying public.

BURIEN: I was a commodities broker on Wall Street for 15 years. I was one of
the first tenants in the World Trade Center. I did an international newsline
coast to coast on commodities. I thought I knew what was going on; I thought
I was one of those sharp little crackers. I always thought government was
maybe hiding 5 to 10 percent maximum of the revenue and not reporting it to
the public. There was a governor who got elected named Jim Florio in New
Jersey back in 1990 on a new tax platform. As soon as he got into office,
there was a $2.8 billion tax increase -- the largest in the state's history.
The public was not too happy, and a couple of DJs, John and Ken out in Los
Angeles, they started doing some rabble-rousing and taking calls from
listeners on examples of waste and misspending in government. I heard small
figures -- $15,000, $25,000. The highest figure I heard was $85,000.

Q: Chump change.

A: Right. Being a commodity-trading adviser, I pulled out the Budget Report,
which was the only thing I was aware of at the time. They had $11 billion
on-budget, $6 billion off-budget, so the total service budget was $17 billion
for the year. Net available: $25.6 billion. So I called into the radio show
and said, "Come on guys; you're missing the whole point. The state is dealing
with billions of dollars. The highest figure I heard was
$85,000." I said if there is fraud, waste and misspending taking place, it's
taking place on the order of tens of billions if not hundreds of billions. The
DJs challenged us to start an organization. So, the next day, I got
together with nine other people and incorporated a group called "Hands Across
New Jersey." We rabble-roused and, when we had our first rally, 115,000 people
converged on Trenton and shut the Capitol down. I decided to start looking at
the budget revenue and finance so if I were approached with questions, I'd
know what I was talking about.

Q: So where did you look?

A: When I looked at the budget, which was all I knew about, I noticed large,
cash-cow investment agencies of state government were not on the report, the
New Jersey Turnpike, the Port Authority of New York and New Jersey -- no large
returns from investment funds. Now they gave mention of the different agencies
on the report but not the revenue.

Q: Don't state treasurers have to report this stuff when they are investing on
Wall Street?

A: Here's where it broke down. I knew the director of the budget was on
vacation until the following Tuesday of the next week. I called his office and
found out who his two lower assistants were. I said, "Hi. This is Walter
Burien. I'm working on a report for Richard (the boss) and I have to have it
done by Tuesday when he gets back from vacation. I need all the figures on all
the autonomous agency accounts and trust accounts and investment
accounts." And he said, "Oh, you want the Comprehensive Annual Financial
Report." I said, "Could I have a copy?" He said I'd better ask Mark (the next
one down the line from the budget director).

Q: Notwithstanding your 15 years on Wall Street, you had never heard of this
animal before?

A: First time. But I played the cards as they were dealt. I knew it was the
most important thing I needed to get my hands on. So, I called Mark and said,
"Hi Mark, this is Walter Burien. I just got off the phone with Jim. I'm
working on a report for Richard and I have to have it done by Tuesday. I need
a copy of the Comprehensive Annual Financial Report." He said, "Oh, where do
you want it sent to?" I gave him my office address. UNBELIEVABLE though it may
be I got it that Friday and started crunching numbers. Here's a state with a
declared service budget of $17 billion showing a net available on their budget
report of $24 billion. The year's totals investments held on the Comprehensive
Annual Financial Report: $188 billion.

Q: $188 billion!?

A: Correct. Investment funds, assets and so forth. The income I started
looking for was total cash gross receipts -- the number one item the IRS asks
you for in an audit.

Q: Would this be interest on investments?

A: Total income. Whether it be cash collected by state agencies, federal
grants, the whole nine yards -- total income. I found it on page 174 of the
1989 Comprehensive Annual Financial Report under cash additions. Here's a
state with a declared service budget of $17 billion that was bringing in, "in
cash," $86,799,000,000. I learned the definition of syndicated organized crime
on the spot and the principle of operation. Anything that was a cost and an
expense, an outright cost on a budgetary basis, the public footed 100 percent
of the bill for 100 percent of the services. Anything that was a substantial
profit center was totally restricted by statute from inclusion
whatsoever with the budgetary basis.

Q: This is above and beyond the off-budget stuff?

A: Whenever you hear the word "off-budget," that is something that is
inclusive in the budget. When you look at the Comprehensive Annual Financial
Report, you will see complete separate areas totally restricted by statute for
inclusion with the budgetary basis. A lot of people would refer to it as "two
sets of books," although it's not exactly two sets of books. The budget report
is in one book, and the Consolidated Annual Financial Report is THE
book, the showing of the complete pizza pie.

Q: There are two things I want us to make real clear. You conducted your
investigation in New Jersey. But this is not unique to New Jersey.

A: I'm going back 10 years. When I found out about New Jersey, especially when
I found out they had approximately $80 billion in common-stock ownership, as a
commodity trading adviser.

Q: You wanted them as a client?

A: That was actually true to a certain extent. But I was mad more than I was
greedy. I said, "How could I have not heard of this?" Here's New Jersey
holding $80 billion in common stock. I was a commodity-trading adviser. I
dealt with a lot of the CEOs of some of the major investment firms and I never
heard it mentioned -- in any circles. I found out when I called the mailroom
of the Department of Treasury for New Jersey. It was sent out to every editor
of every paper up and down the East Coast. It was sent to the directors and
CEOs of ABC, CBS, NBC and CNN. And now I'm getting mad. I was seeing a
cooperative effort at non-disclosure and it wasn't as if it was just created
that year and the word hadn't gotten around.

Q: This Comprehensive Annual Financial Report, is it just a stack of numbers
or is it something that has an executive summary and can actually be read and

A: The CAFR is set up to be a simple, quick evaluation book to show: total
income, total assets, total investments, total net worth. What's been going on
in this country for the last 65 years is government will always focus the
public's attention -- intentionally so -- on the budgetary basis of the budget
report. And the only thing the budget report is, is their annual operating

Q: Give me an example.

A: Say it cost us $30,000 a year to maintain our house. Say our salary or
income was $100,000 a year and we had a million dollars in investments, and
say our total net worth was $3 million. What if we talked about our $30,000
budget as being our net worth? It would be ludicrous.

Q: So this is an intentional scam?

A: You've had a shell game played on the public where governments are
constantly talking their budget, their budget, and their budget. They just
happen to leave out the decades and decades and decades of investment wealth
that has been building up, the decades and decades and decades of enterprise
and venture projects they have created separate from the budgetary basis.

Q: Just how ubiquitous are these Comprehensive Annual Financial Reports?

A: The Comprehensive Annual Financial Report was created by a group called
Government Financial Officers Association in 1946. It was a program created to
standardize accounting in all local governments so the federal government
could easily see what the true picture was. In 1981, the federal government
mandated that all local governments prepare a CAFR or, in the alternative, a
combined financial statement. To qualify this, there are over 54,000 separate
corporations within local government.

Q: What kind of corporations are you talking about?

A: A city is a corporation; a state is a corporation; a school district is a
corporation. Each is filing their own separate report, each with their own
investments. I've had a lot of people looking at their state reports. They see
the tens of billions of dollars they never knew existed -- and they are
floored. Then I bring to their attention: "You're just looking at the state

Q: Give us an example.

A: I'll use the state of Washington as an example. It lists $64 billion in
liquid investment funds. Now the state of Washington has 2,300 separate local
government corporations filing their own separate reports: cities,
counties, school districts, and authorities. You have 2,300 other reports.

Q: And still no one does anything about this?

A: Recently, a person was running for city council in Corona, Calif., with a
center city population of about 10,000. He saw the video I put out called "The
Biggest Game in Town." This individual is an attorney. He'd been
pressing the county on different issues concerning financial fraud. He saw the
video and said, "Nah, this can't be." But he saw it on the weekend and it
motivated him to check. He discovered the city had a Comprehensive
Annual Financial Report. He got a copy of it. He didn't see any large numbers
in the combined financial columns, but he observed in the notes of the report
that it directed you to four other areas outside the report. The
first area he looked into, he found $144 million in U.S. Treasury Bonds
sitting there. Now divide that by a population of 10,000. That's $14,000 for
every man, woman and child. [Population within the county under the cities
jurisdiction 87,000] (NOTE: i.e. classrooms, roads fixed, libraries funded,
Free Clinics implemented, Senior feeding programs, special education provided
for mentally marginal, soup kitchens for homeless, cheese giveaways, etc. all
not getting funded NOW).

Q: How do they report the income?

A: On the CAFR. That's why it's noted to refer to other reports for an

Q: So there is no way this money gets applied to the general fund for

A: When you look at the general-purpose funds, they have very stringent rules
on managing taxpayer dollars. For example, you can only invest in Treasury
bills, triple rated bonds, 4.5, 5 percent max. The game has been over the past
25 years in whatever way, shape or form, to shift revenue outside of the
general-purpose operating fund. Whether it be through a local-government
investment pool, bond refinancing accounts, insurance company equity
participation -- anything that will be outside the general purpose operating
fund, which is very restrictive. (NOTE: meaning that if hue and cry raised by
PTA's in every school, creating an amendment to city codes, a vote, then that
huge cash is avail. for public welfare!)

Q: Two questions I've always wanted to ask you and never gotten around to: 1)
Is there anyone providing oversight for all these things, and 2) if there is,
do they get a piece of the action?

A: I get a lot of phone calls, and folks ask, "Where's all the money sitting?
What account is it in? And who's managing it?" I would say, this is the
principle of operation. There are over 54,000 separate corporations.
The public left the vault door open. I give the example: If you had 12 and
13-year-old boys and you gave them carte blanche to let them write their own
allowance check every week, and you make $1,200 a week, within no time, they
would be cutting a check for $1,000 a week. If you told them you were going to
cut them back to $800 a week, they would scream, holler, kick and use any
logic available to them to justify how 12 and a 13-year-old boys could not
survive on just $800 per week. There's no difference here -- you just have
bigger boys and sharper players. People mention conspiracies and so forth. I
say there is no conspiracy here. You just have the vault door wide open.
The public allowed it. The bank left the doors open over the weekend with cash
lying on the counter and no one guarding it.

Q: So who is the primary beneficiary of this vast wealth?

A: No one. No person. Only the investment revenue, itself. There is $60
trillion in investment revenue. You have tens of thousands of little empires
being built all over the country, people controlling those monies that are
invested. You know when you go to the bank and you get a mortgage on your
house, you think you are borrowing private funds. When I look at the
[government] revenue flows, I see hundreds of billions in different pension
funds, investment funds, invested with the local banks under their mortgage
division. The banks are acting as the "in between" agent getting a half a
point or two-thirds of a point for cutting the loan.

Q: Walter, there is a mountain of information you have that we won't have time
to get to. So please let our readers know how they can find more information
on this chilling topic.

A: The e-mail address is cafr1@aol.com and if anyone wants to send or show a
VIDEO of all this to a reporter, PTA president, friend, or have a showing of
it, I'd gladly send anyone a copy of the video "The Biggest Game in Town,"
just put in the subject line "requesting video" and I'll send back an order
form for the video. I also include various links for getting assorted
information. It behooves the people to legislate to get this money back
into flow. Invested in the children, the future, we will have a happier, more
productive society. There's so much that people need to have a good life.
College, food giveaways,coupons for vitamins maybe, or what would be wrong
with food coupons for everyone except the upper middle class? Right now, the
amount of starvation, poverty, addiction to CIA distributed drugs or other
uppers for the nutritionally marginal, and all the birth defects going on in
the first country in the world is astonishing. How much worse off than US are
poorer economies? So this new 'churn the cream' gambit would be a model for
all societies. As always, the US will go first with its city, state
governments, Then maybe with the Federal gov!

AUTHOR's note: "I have interviewed Burien a few times over the past two or
three years. His information is remarkable. The CAFR has been around for over
half a century and, despite the vast money involved, this story
has remained virtually ignored by the mainstream. Sarah Foster of
WorldNetDaily wrote about this shortly after I first put Walter on the air in
San Francisco.

Read her stories at these URLS. (Click on them right now, save to cache as
html, (NOT TEXT), print it out for your PTA or civic group, all your hotshot
local reporters, congressman, city councilman.) Better yet, SEND it to
their email, so they can visit the URLS BELOW and pass it on to publishers,
congressmen, etc.



Secret GOV Scams!

Go to TalkNetDaily: http://www.wnd.com/talknetdaily/

And go to:


CAFR link Pages: http://www.financenet.gov/state/cafr.htm

http://www.financenet.gov/state/reports.htm and

and http://www.fms.treas.gov/cfs/index.html

and a good '101' learning site http://www.cafrman.com

THEN, loaded for bear, find ALL THE ACE REPORTERS at your daily paper, get
their email by phoning them, then forward this to their email. You must SAVE
IT first, as an html file (extension) so that the live links inside it will
stay ALIVE. Write down directory where you set it, and the path as in