How To Run Drug Money: Be A (Large) Bank
by ilene - June 30th, 2010 3:32 pm
How To Run Drug Money: Be A (Large) Bank
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Courtesy of Karl Denninger of The Market Ticker
Oh, so the banks don’t just bilk investors and rip off municipalities, they also help Mexican Gangs run drugs?
This was no isolated incident. Wachovia, it turns out, had made a habit of helping move money for Mexican drug smugglers. Wells Fargo & Co., which bought Wachovia in 2008, has admitted in court that its unit failed to monitor and report suspected money laundering by narcotics traffickers — including the cash used to buy four planes that shipped a total of 22 tons of cocaine.
The admission came in an agreement that Charlotte, North Carolina-based Wachovia struck with federal prosecutors in March, and it sheds light on the largely undocumented role of U.S. banks in contributing to the violent drug trade that has convulsed Mexico for the past four years.
That’s nice. Guns and ammunition cost money – lots of it. Getting that money requires some means of transporting it and "laundering" it. For that, we turn to the largest financial institutions in the world, who, it turns out, have never been prosecuted for these felonious acts.
“Wachovia’s blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations,” says Jeffrey Sloman, the federal prosecutor who handled the case.
Blatant disregard? Sounds like something you’d say at a sentencing hearing, right? Well, no….
No big U.S. bank — Wells Fargo included — has ever been indicted for violating the Bank Secrecy Act or any other federal law. Instead, the Justice Department settles criminal charges by using deferred-prosecution agreements, in which a bank pays a fine and promises not to break the law again.
‘No Capacity to Regulate’
Large banks are protected from indictments by a variant of the too-big-to-fail theory.
Indicting a big bank could trigger a mad dash by investors to dump shares and cause panic in financial markets, says Jack Blum, a U.S. Senate investigator for 14 years and a consultant to international banks and brokerage firms on money laundering.
The theory is like a get-out-of-jail-free card for big banks, Blum says.
“There’s no capacity to regulate or punish them because they’re too big to be threatened with failure,” Blum says. “They seem to be willing to do anything that improves their bottom line,
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Border Justice
by ilene - February 2nd, 2010 12:26 pm
This is a chapter from Ryan Grim’s book on drugs, This Is Your Country on Drugs: The Secret History of Getting High in America."
Excerpt from a review "Why we say yes to drugs" by Laura Miller in Salon:
…Yet even politicians inclined to support a treatment-oriented approach to diminishing the American appetite for illegal drugs have opted to emphasize enforcement in order to position themselves as "tough" on crime.
For just this reason, President Clinton replaced his first, reform-minded drug czar, Lee Brown, with retired Gen. Barry McCaffrey, who squandered billions on a scandal-ridden media campaign (planting secret anti-drug messages in prime-time TV dramas) and combating the medical marijuana movement, which is supported by a majority of Americans. Worse yet, overseas enforcement campaigns lead to horrific blowback. Grim points out that aggressive attacks on growers and suppliers cause centralization of the drug trade (only big organizations can afford the losses) and this in turn leads to corruption, as cartel leaders parlay their fortunes into political influence. Not only are we pissing away our own resources on ineffectual enforcement efforts, we have "brought the Mexican government to the brink of collapse, making the prospect of a failed state on America’s southern border a very real possibility."
For Grim, most of these mistakes have roots in an elementary error, the inability to accept that "altering one’s consciousness is a fundamental human desire." The craving to be more relaxed or more alert, more outgoing or more reflective, happier or deeper or even just sillier and less bored — in one form other another, this drive has always been and always will be with us, though many of us refuse to admit it. As a result, our political response to drug problems tends to be blinkered. "In reality, there’s no such thing as drug policy," Grim writes. "As currently understood and implemented, drug policy attempts to isolate a phenomenon that can’t be taken in isolation. Economic policy is drug policy. Healthcare policy is drug policy. Foreign policy, too, is drug policy. When approached in isolation, drug policy almost always backfires, because it doesn’t take into account the powerful economic, social and cultural forces that also determine how and why Americans get high."
Border Justice
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the site