Drugs, thugs, and banks
Poppy cultivation in Afghanistan is close to record levels a year after being nearly wiped out under the hard-line Taliban regime, the U.N.’s Food and Agriculture Organization (FAO).
“It is estimated that 2,952 tons of opium will be produced (in 2002),” the FAO said, referring to the usual drug producing regions in the southwest.
One would have to be terminally naive to believe the current Afghanistan government wasn’t deeply involved in this. Hey, if Dubya is so anti-drug, why isn’t he demanding they end heroin production?
Burma, not to be left behind, is busily making speed and heroin. Burma, of course, is home to probably the nastiest, most repressive government in the world (and there’s some serious competition). It’s a given their government and army is behind the drugs production.
The production capacity of 40-50 methamphetamine factories in Burma and between 20-30 plants in Laos would total 800 million speed pills or more this year, he said.
He added that heroin production capacity would this year increase 20% to about 90 tonnes _ 72 tonnes in Burma and 18 tonnes in Laos. About six tonnes of raw opium was expected to come from Thailand this year.
Federal agents arrested 10 people in Sacramento on Monday in what authorities called the first significant U.S. bust involving Ya Ba, a powerful methamphetamine from Asia that is gaining favor among teens and young adults on the West Coast. Methamphetamine, a stimulant, is highly addictive. Confiscated Ya Ba pills also have included ephedrine and caffeine.
And so, much of these drugs end up here. The U.S. is the biggest market for illegal drugs. Which leads me to money laundering. Much money is made and circulated from illegal drugs, so it has to be laundered somewhere. Check this useful explanation for details on money laundering.
There’s lots of friendly little governments with bank secrecy laws that facilitate the process. Construction projects are known for being handy ways to both launder money and to produce off-the-books money. Michelle Sidona, a financier/money launderer of huge scale, in a prison interview (Power on Earth by Nick Tosches, 1986) detailed how there existed large accounting firms in Europe whose sole purpose was to create double sets of books for construction projects. This insured that everyone got their kickbacks and that the money got cleaned.
Are there such firms in the U.S.? Are there banks in the U.S. whose primary purpose is money laundering? It would appear so. Citibank, the same Citibank that is being investigated now for possibly corrupt involvement in AOL and ATT Wireless stock deals, has been implicated in money-laundering.
An investigation by the United States Congress has concluded that it is not difficult for foreigners to use US banks for money laundering.
The report, by the General Accounting Office (GAO) – the investigative arm of Congress – found questionable transactions involving more than $1bn at Citibank and Commercial Bank of San Francisco.
At the climax of one of the biggest undercover money-laundering investigations in United States history, federal agents seized $1.8 million in 1998 from Citibank accounts in New York that were held by a mysterious Cayman Islands bank that had no corporate offices anywhere in the world.
But despite indications that the money had come from drug dealers in Mexico, Citibank continued to do business with the Caymans bank for almost two years, moving another $300 million through the accounts before they were finally closed by Citibank.
Until the Enron etc. scandals exploded, the U.S., it was claimed our financial systems was the cleanest, most transparent in the world. I doubt anyone would be boasting that now.
So where does drug money go? And why can’t governments find it?