On the 29th of October, a trial begins in a Federal courtroom in Washington DC. The defendant in the case is our own distinguished advisory board member Catherine Austin Fitts. The plaintiff in the case is one John Ervin of Ervin Associates, a mortgage servicer for HUD. Ervin has brought the case using a Federal whistle blower statute (qui tam) [i] that allows private citizens to bring suit against parties alleged to have defrauded the government, and rewards them with a percentage of the recovered money. Ervin began eight years ago with more than 30 offences alleged against Fitts. He is now down to a handful, technical and immaterial in their financial impact one way or another on the government, Fitts, or anyone else. The case is ironic in many respects. Fitts, a HUD contractor, was fired "for convenience," which does not mean that she was terminated for wrongdoing. Ervin and Asscoiates themselves were fired some time back by HUD "for cause," meaning that they were fired for non-performance under a contract. Yet here Ervin is taking Fitts to court, ostensibly on behalf of the government and taxpayer. (...) Hamilton made the process of default resolution more transparent and less cosy and raised the cost of buying defaulted loans considerably. No wonder that Fitts angered certain people and institutions. If you stop and reflect on what Hamilton's actions meant from the standpoint of cash flow and profit, you will see what I mean. The impact was to raise the amount recovered by HUD (i.e. the taxpayer) by over $2 billion, which means in effect, to reduce the profit that would have gone to the likes of the Blackstone Group, Goldman Sachs, GE and Harvard by at least that much. Stick a multiple of say, eighteen on the stock price of the exchange traded firms and you begin to see what sort of impact that would have. And one can surmise from the reaction of Harvard's Eisenson quoted above what the impact on Harvard's investment in its HUD servicing companies NHP and WMF would be. www.scoop.co.nz/stories/HL0310/S00223.htm