September 11, 2001: Destruction of Financial Accountability

Investigative Briefing: Destruction of Financial Evidence on September 11, 2001

1.0 Introduction: Scope and Objective

This briefing provides a consolidated analysis of the destruction of critical financial audit and enforcement records at the Pentagon and World Trade Center 7 (WTC 7) on September 11, 2001. The objective is to serve as a reference for investigators by outlining the specific government functions, active case files, and evidence infrastructure that were physically eliminated, based exclusively on the provided source material. The analysis focuses on the functional impact of this loss on national financial oversight.

2.0 The Pentagon: Decapitation of the Financial Audit Function

The strike on the Pentagon occurred at a moment of critical strategic importance for the Department of Defense's financial management. The attack coincided with the peak of the fiscal year-end accounting cycle and followed the Department's public admission of significant, unresolved financial discrepancies.

Event Timeline and Context

• September 10, 2001: Secretary of Defense Donald Rumsfeld announced that the Department of Defense (DoD) could not trace $2.3 trillion in transactions, categorized as "unsupported adjustments."

• September 11, 2001 (9:37 AM): American Airlines Flight 77 struck Wedge 1 of the Pentagon, the section housing the primary teams tasked with resolving these financial discrepancies.

Analysis of the Target: Wedge 1

The impact zone was not a random administrative area; it contained the specific units responsible for the Army's financial reconciliation. The affected personnel were non-uniformed DoD financial management specialists. The strike exclusively targeted the civilian component responsible for financial reconciliation, not uniformed command staff. The primary units affected were:

• Resource Services Washington (RSW): The accountants managing the financial operations of the Army.

• The Army Budget Office (ABO): The analysts preparing the Army’s annual budget and tasked with reconciling the very "unsupported adjustments" that constituted the $2.3 trillion discrepancy announced the prior day.

The unique structural characteristics of Wedge 1 were a critical factor in the event's outcome. It was the only section of the building that had been fully renovated and reinforced. Key features included:

• A newly installed steel superstructure.

• Kevlar catch mesh lining the interior walls.

• Blast-resistant glazing on all windows.

Consequences and Functional Impact

The structural reinforcements, while preventing a wider collapse, transformed the impact zone into a "contained furnace." The blast-resistant windows and Kevlar mesh prevented the explosion from venting outward, containing the intense heat and pressure. This effect guaranteed the thermal destruction of all paper records, magnetic media, and electronic equipment within the impact zone.

The event resulted in the decapitation of the Army's financial management cadre and the erasure of the institutional memory underpinning its accounting systems. The physical destruction of the unfinished reconciliation work for Fiscal Year 2001 was total. Ultimately, the strike did not destroy a building so much as it destroyed a critical government function—the Pentagon's primary internal audit and financial reconciliation capability. This loss of the audit function was compounded by the simultaneous destruction of the enforcement evidence needed to act on such audits.

3.0 World Trade Center 7: Erasure of Federal Enforcement Archives

World Trade Center 7 (WTC 7) was a critical, centralized hub for federal law enforcement and regulatory oversight. The building housed the physical evidence and working files for hundreds of high-stakes financial and criminal investigations, making its destruction an event of profound consequence for federal enforcement capabilities.

Event Timeline and Context

WTC 7 collapsed at 5:20 PM on September 11, 2001. According to the source material, no aircraft struck the building, and debris from the collapse of the Twin Towers did not cause its structural compromise.

Inventory of Destroyed Investigative Records by Agency

The collapse resulted in the systemic erasure of the physical evidence underpinning hundreds of active federal investigations into financial crime and corruption. The following is an inventory of the key agencies and the documented records lost.

3.1 Securities and Exchange Commission (SEC) - Floors 11, 12, 13

This location served as the SEC's Northeast Regional Office, the primary enforcement arm for Wall Street. The collapse destroyed the physical evidence repository for hundreds of active cases.

• General Evidence Lost: Trading tickets, deposition notes, whistleblower statements, internal memos, email printouts, and physical "redweld" folders containing active fraud case files.

• Major Investigations Compromised:

    ◦ Enron: Files related to investigations into "enabler banks." The source clarifies the significance: "Enron did not collapse merely because executives lied; it collapsed because banks structured the lies." The destroyed files centered on Citigroup's "prepay" transactions, which functioned as disguised loans.

    ◦ WorldCom: Emails documenting improper coordination between analysts at Salomon Smith Barney and WorldCom executives.

    ◦ IPO Spinning: Physical allocation ledgers detailing how preferential IPO shares were distributed to executives in exchange for investment banking business.

Critically, the SEC was later forced to request that companies under investigation "resubmit documents lost in the collapse." The source notes that compliance with these requests was selective.

3.2 Secret Service - Floors 9, 10

This office housed the El Dorado Task Force, described as the premier money-laundering investigation unit in the United States.

• Evidence Lost: Surveillance logs, the identities of confidential informants, seized counterfeit series-1934 instruments, seized bearer bonds, and financial maps tracing cartel intermediaries.

3.3 Internal Revenue Service (IRS) - Floors 24, 25

This was the location of the IRS Regional Counsel, the legal division supporting IRS Criminal Investigations.

• Files Lost: Litigation files for major tax shelter cases, corporate audit strategies, and internal legal memoranda related to high-value enforcement actions.

3.4 Other Federal and Private Entities

A number of other key entities lost critical records and operational facilities in the collapse of WTC 7.

Entity	Description of Records/Function Lost
CIA	Covert New York Station (Floor 25).
EEOC	Over 10,000 civil rights case files (Floor 18).
Salomon Smith Barney (Citigroup)	Internal corporate records of a firm actively under SEC investigation (Floors 15–17, 28–45).

4.0 Consolidated Impact Assessment: The Simultaneous Loss of Oversight

The strategic significance of these events lies not merely in each individual loss, but in the simultaneous and complementary nature of the destruction. On a single day, the Department of Defense's primary financial audit function was physically eliminated, while Wall Street's primary regulatory enforcement archive was erased.

Summary of Key Functions and Evidence Infrastructure Lost on September 11, 2001

• Pentagon Financial Audit Capability: The Army's dedicated team of accountants and budget analysts, along with their institutional knowledge and FY2001 reconciliation work.

• SEC Enforcement Archive: The primary physical evidence repository for the SEC's Northeast Regional Office, including hundreds of active Wall Street fraud investigations.

• IRS Litigation Hub: The case files and legal strategies for the IRS Regional Counsel's criminal tax investigations.

• Secret Service Money Laundering Evidence Vault: The surveillance logs, informant identities, seized instruments, and financial network maps of the El Dorado Task Force.

• Specific Investigative Paper Trails: Key evidence for major corporate fraud cases including Enron, WorldCom, and illegal IPO spinning practices involving Citigroup.

Analysis of Consequences for Financial Accountability

The consolidated loss of these distinct but related capabilities created what the source material describes as a "de facto amnesty event for financial crime." The destruction of both the Pentagon's internal auditors and Wall Street's external regulators on the same day created a profound "evidence vacuum." This is starkly illustrated by the fact that the SEC was forced to ask the subjects of its own investigations to voluntarily resubmit incriminating documents, a process with limited success.

The consolidated impact was the systemic dismantling of the nation's financial oversight architecture. The morning's decapitation of the Pentagon's audit function was followed by the afternoon's erasure of Wall Street's enforcement archives. This sequence neutralized the primary mechanisms of financial accountability at the exact moment a new era of unprecedented military expenditure was initiated.