The corruption and rot is at the core of our financial system. Large US banks are funneling money to Mexico drug cartels. But there are no criminal prosecutions, just civil. Do we still have rule of law here or is our legal and financial system as compromised as in Mexico?
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.
It’s the banks laundering money for the cartels that finances the tragedy,” says Martin Woods, director of Wachovia’s anti-money-laundering unit in London from 2006 to 2009. Woods says he quit the bank in disgust after executives ignored his documentation that drug dealers were funneling money through Wachovia’s branch network.
“If you don’t see the correlation between the money laundering by banks and the 22,000 people killed in Mexico, you’re missing the point,” Woods says.
Why are there are no criminal prosecutions? Because of the Too Big Too Fail. Were a big bank to be severely punished for criminality, then it could fail, damaging the world financial system. Apparently it’s better to let criminals run rampant than to prosecute them.
“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.”