69 The Real Game of Missing Money After months of working with a variety of parties at HUD, OMB and in the Ad- ministration, and with much support from GAO, the accounting group was moved over to my area and legislation was introduced and passed that required a comp- troller for the FHA Funds, a chief financial officer for the department, and a legal requirement for annual audited financial statements and actuarial statements. When we got access to our financial information, it turned out that we were losing $11 million a day in the single-family fund, the Mutual Mortgage Insur- ance Fund, and more in the multifamily and special risk fund called the General Insurance Fund. What is more, I discovered that we had never tracked our finan- cial results on a place-based basis. In other words, ten regional and eighty field offices had no idea how they were doing. So we put together crude place-based cash flows. What we found was simply astonishing. First, the national data on which the portfolio was based turned out to be the irrelevant product of averaging. A look at all ten regions and eighty field offices showed that no one part of the portfolio fit the image depicted by the national averages. Our vision of our business had been substantially distorted by the way in which the data had been presented. Second, it turned out that over 100% of our losses were generated in two regions. The first was headquartered in Texas, and included Oklahoma, Louisiana and Arkansas. We discovered that the Texas region had lost over $2 billion the year before. They had no idea. The second was headquartered in Colorado. What the numbers showed was that S&L fraud and HUD fraud were perpetrated by the same networks and in the same places involving the use of federal credit. Catherine Austin Fitts, “The Myth of the Rule of Law” at https://www. dillonreadandco.com/gideon/q301.pdf. How does Congress make choices or educate and align constituencies without reliable, indepen- dent feedback regarding their financial and economic decisions? It’s difficult—and in turn, many decisions are made based on inaccurate information. Legality A significant portion of federal government spending operates in violation of the laws governing federal financial management and reporting and the United States Constitution, which stipulates that no payments can be made that are not provided for in an appropriations bill approved by Congress. Specifically, Article 1, Clause 7 states: “No Money shall be drawn from the Treasury but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.” Let me give you some examples from my own experience: We [my company, Hamilton Securities Group] were blessed with an advisory board of very capable and committed pension fund leaders. In April 1997, we had an advisory board meeting….I gave a presentation on the extraordinary waste in the federal budget. As an example, we demonstrated why we estimated