Published on Global Research.ca, by Tom Burghardt, July 21, 2010.
… Greasing the Wheels:
The United Nations Office on Drugs and Crime (UNODOC) state in their 2010 Annual Report that “money-laundering is the method by which criminals disguise the illegal origins of their wealth and protect their asset bases in order to avoid suspicion of law enforcement and to prevent leaving a trail of incriminating evidence,” and that financial institutions, particularly U.S. and European banks are key to efforts to choke-off illicit profits from the grisly trade.
The trouble is these institutions, along with U.S. intelligence agencies, are the problem.
UNODOC estimate that profits derived from narcotics rackets amount to some $600 billion annually and that up to $1.5 trilliondollars in drug money is laundered through seemingly legitimate enterprises.
Part of the fallout from capitalism’s economic meltdown has been that “drugs money worth billions of dollars kept the financial system afloat at the height of the global crisis,” The Observer disclosed late last year.
Antonio Maria Costa, UNODOC’s director, told the British newspaper he saw evidence that proceeds from the illicit trade were “the only liquid investment capital” available to some banks on the brink of collapse last year and that “a majority of the $352bn (£216bn) of drugs profits was absorbed into the economic system as a result.”
The UN drugs chief said that in “many instances, the money from drugs was the only liquid investment capital.” And with markets tanking and major bank failures nearly a daily occurrence, “liquidity was the banking system’s main problem and hence liquid capital became an important factor.”
According to Costa, “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.”
Web of Corruption: … //
… Fallout? What Fallout:
In the wake of Wachovia’s admission to federal prosecutors, Wells Fargo will pay “$160 million in fines and penalties, less than 2 percent of its $12.3 billion profit in 2009.”
“If Wells Fargo keeps its pledge,” Bloomberg reports, then “according to the agreement [the federal government will] drop all charges against the bank in March 2011.”
Why might that be? Large banks are immune from vigorous prosecution for violating the Bank Secrecy Act “by a variant of the too-big-to-fail theory.”
Veteran Senate investigator Jack Blum, who led probes into the Iran-Contra drug connection and the CIA’s favorite shadow bank during the 1980s, the Bank of Credit and Commerce (BCCI) toldBloomberg, “the theory is like a get-out-of-jail-free card for big banks.”
“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, until they’re caught.”
Meanwhile as the bodies pile up, there’s no jail time for executives and the assets of firms that could charitably be described as part of a “continuing criminal enterprise” haven’t been seized; only a slap on the wrist and a promise to “do better next time.” (full long text).