Published on Global Research.ca, by Tom Burghardt, June 15, 2012.
… The Only Liquid Investment Capital:
Earlier this month, The Observer reported that “The vast profits made from drug production and trafficking are overwhelmingly reaped in rich ‘consuming’ countries–principally across Europe and in the US–rather than war-torn ‘producing’ nations such as Colombia and Mexico, new research has revealed.”
Journalist Ed Vulliamy informed us that the authors of that report provide compelling evidence that “financial regulators in the west are reluctant to go after western banks in pursuit of the massive amount of drug money being laundered through their systems.”
Indeed, at the height of the global financial crisis Antonio Maria Costa, then the head of the UN Office on Drugs and Crime told The Observer “he has seen evidence that the proceeds of organised crime were ‘the only liquid investment capital’ available to some banks on the brink of collapse last year. He said that a majority of the $352bn (£216bn) of drugs profits was absorbed into the economic system as a result.”
“In many instances,” Costa said, “the money from drugs was the only liquid investment capital. In the second half of 2008, liquidity was the banking system’s main problem and hence liquid capital became an important factor.”
Inter-bank loans were funded by money that originated from the drugs trade and other illegal activities… There were signs that some banks were rescued that way.” While Costa “declined to identify countries or banks that may have received any drugs money, he said the money is now a part of the official system and had been effectively laundered.
In other words, for dodgy bankers it was “accounts balanced” and an excuse to buy a new Armani suit or two, a case of 20-year-old single malt or that vacation home for the trophy wife, no questions asked.
Selective Prosecutions: … //
… Past as Prologue:
If history is a guide to current practices, the CIA has long-relied on financing black Agency operations through dodgy banks and the bankers who run them.
Amongst the swindlers who have profited from cosy relations with the Agency, readers no doubt are reminded of Paul Helliwell’s Castle Bank Bank & Trust; Michael Hand, Frank Nugan and Bernie Houghton’s Nugan-Hand Bank; Agha Hasan Abedi’s Bank of Credit and Commerce International (BCCI); or more recently, as Antifascist Calling disclosed two years ago, convicted fraudster R. Allen Stanford’s multibillion dollar Ponzi scheme disguised as a “full-service bank,” Stanford International.
That all four banks collapsed in ignominy and scandal as investors were bilked out of billions of dollars in deposits amid charges that these financial black holes were little more than conduits for organized crime and intelligence operations, only underscores the inescapable fact that for secret state outfits like the CIA, crime pays.
Two years after the Wachovia scandal broke amid deafening media silence in the U.S., Daniel Mejía told The Observer: “Overall, there’s great reluctance to go after the big money. They don’t target those parts of the chain where there’s a large value added. In Europe and America the money is dispersed–once it reaches the consuming country it goes into the system, in every city and state. They’d rather go after the petty economy, the small people and coca crops in Colombia, even though the economy is tiny.”
“It’s an extension of the way they operate at home,” Mejía said. “Go after the lower classes, the weak link in the chain–the little guy, to show results. Again, transferring the cost of the drug war on to the poorest, but not the financial system and the big business that moves all this along.”
Given the corrupt trajectory of the “War on Drugs,” this should not surprise anyone. As Peter Dale Scott wrote in Deep Events and the CIA’s Global Drug Connection: “The global drug connection is not just a lateral connection between CIA field operatives and their drug-trafficking contacts. It is more significantly a global financial complex of hot money uniting prominent business, financial and government as well as underworld figures.”
According to Scott, this global criminal-elite nexus “maintains its own political influence by the systematic supply of illicit finances, favors and even sex to politicians around the world, including leaders of both parties in the United States. The result is a system that might be called indirect empire, one that, in its search for foreign markets and resources, is satisfied to subvert existing governance without imposing a progressive alternative.”
Scott’s analysis has certainly been borne out by honest law enforcement officials.
Martin Woods, a former senior detective with London’s Metropolitan police anti-drugs squad joined Wachovia in 2005 as the bank’s chief anti-money laundering investigator and paid a steep price for his diligence.
Hounded out of his position when he refused to stop filing suspicious activity reports to headquarters in Charlotte over dubious deposit practices by Wachovia branches in London and Miami, Woods told The Observer: “New York and London have become the world’s two biggest laundries of criminal and drug money, and offshore tax havens. Not the Cayman Islands, not the Isle of Man or Jersey. The big laundering is right through the City of London and Wall Street.”
“Meanwhile,” Woods said, “the drug industry has two products: money and suffering. On one hand, you have massive profits and enrichment. On the other, you have massive suffering, misery and death. You cannot separate one from the other.”
With hundreds of billions of dollars washing through the system each and every year, there aren’t many incentives to collar the big boys. And you can take that to the bank … (full long text).
(Tom Burghardt is a researcher and activist based in the San Francisco Bay Area. In addition to publishing in Covert Action Quarterly and Global Research, he is a Contributing Editor with Cyrano’s Journal Today. His articles can be read on Dissident Voice, Pacific Free Press, Uncommon Thought Journal, and the whistleblowing website WikiLeaks. He is the editor of Police State America: U.S. Military “Civil Disturbance” Planning, distributed by AK Press and has contributed to the new book from Global Research, The Global Economic Crisis: The Great Depression of the XXI Century. Global Research Articles by Tom Burghardt).