Only way to stop the Drug Trade is to target the money-laundering Banks behind it

Peter Myers, June 9, 2011.

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(1) Only way to stop the Drug Trade is to target the money-laundering Banks behind it
(2) The case for Decriminalizing Drugs - examples of Portugal, Holland, Switzerland
(3) Portugal eliminates jail for drug users but maintains criminal penalties for dealers - Scientific American
(4) Portugal has has Europe's most liberal drug laws (Dutch don't enforce theirs) - Time
(5) Chomsky advocates Decriminalization
(6) War on Drugs has failed - Global Commission On Drug Policy
(7) Global Commission is partly funded by George Soros's Open Society Foundation
(8) Soros-inspired Drug War "Failure" Story
(9) Drug use increased in Portugal under Decriminalization
(10) Abandoning war on drugs would leave our youth vulnerable
(11) International Drug Policy Consortium, a grantee of Soros' Open Society Institute
(12) Soros' International Drug Policy Consortium: Five Policy Principles
(13) British financier network is apex of the Drug Trade
(14) City of London is a global money laundering centre - French parliamentary report (2001)
(15) Drug cartels launder and transfer billions of $ through the US banking system - Petras
(16) Wells Fargo & Bank of America launder Mexican drug money; gangs "cannot work without a bank"
(17) Drug money "liquid investment capital", saved banks from collapse during GFC - UN advisor
(18) Merrill Lynch and Bear Stearns laundered drug money
(19) Assange yet to deliver on promise to leak Bank of America corrupt dealings
(20) Pentagon using Drug Wars as excuse to build Bases in Latin America
(21) Russian gangsters arrested in Spain after bragging that they "bought" the Uefa Cup
(22) Spanish construction boom was paid for by Russian mafiosi - to launder money
(23) Russian Mafia in Spain used bank accounts to launder money; boss's wife ran a Berlin bank
(24) Expatriate Russian mafia is mostly Jewish, uses Israel as haven; it has no money-laundering laws
(25) The Jewish Laundry of Drug Money - from Maariv, September 2, 1994, translated by Israel Shahak

(1) Only way to stop the Drug Trade is to target the money-laundering Banks behind it - Peter Myers, June 8, 2011

The Global Commission On Drug Policy sounds like a government body; but it's an NGO, partly funded by George Soros via his Open Society Foundation.

This Soros report on the impossibility of Drug Control makes no mention of the role of Banks, Tax Havens and the City of London in Money Laundering.

Such laundering occurs not at the level of street sales, but at the Wholesale level, where wholesalers, as middlemen between producers and consumers, deposit funds into bank accounts or buy assets with them.

The small growers, eg in Afghanistan and Columbia, would not produce their crops unless they were paid for them. Between them and the consumers in the West come several middlemen, who concentrate the supply and distribution. Their role is to buy the crops from the myriad small growers, and send shipments to trade centres such as Dubai, where they are exchanged for cash, and from which they are forwarded to consumer countries..

Ramtanu Maitra writes in item 13, "Besides Dubai, most of the offshore banks are located in former British colonies, and all are involved in money laundering: Legitimizing cash generated from drug sales and other contraband for the "respectable banks" is the lifeblood of these offshore institutions."

A French parliamentary report of 2001 concluded that the City of London is a global money laundering centre (item 14).

The drug cartels "need to move billions of dollars across borders. That's how they finance the purchase of drugs, planes, weapons and safe houses," Senator Gonzalez says of Mexico's gangs.

"They are multinational businesses, after all ... And they cannot work without a bank." (item 16).

James Petras, writes, "Wall Street banks have been the main instruments ensuring the profits of the drug cartels. Every major US bank has been deeply involved in laundering hundreds of billions of dollars in drug profits" (item 15).

Yet, the role of the US banks in facilitating this trade is "largely undocumented" (item 16). That is, undocumented in the media and in academia.

Neither Soros nor Chomsky, in their numerous statements attesting the failure of the War on Drugs, make any mention of the role of banks in the Drug trade.

Western governments are wasting billions of dollars fighting the Drug Wars, while the key middlemen (the banks) are right under their noses.

Petras - perhaps a "neo-Stalinist" - represents the real Left, while Soros and Chomsky, favoured in Trotskyist/Anarchist "Left" circles, are the Fake Left, part of the Establishment.

Chomsky, in putting the case for Decriminalization of Drugs (item 5), argues that the tobacco industry is a model. Tobacco use, although legal, has declined through PR campaigns, punitive taxes, and restrictions on advertising.

But once legalized, the Drug industry would be harder to control. In Australia of recent decades, numerous kinds of gambling have been legalized, at the cost of many ruined lives, and there are now campaigns to save families by banning Poker Machines, but the Gambling industry uses its vast profits to lobby against restraint.

A distinction should be made between herbs and the synthetic products derived from them. Traditional field-grown herbs - cannabis, coca, opium, ephedra - should be legal on a small scale. The refined products, which concentrate the effect, should remain banned - thus Heroin, Cocaine, Amnphetamines etc.

Organic, traditional field-grown marijuana should be legal on a small scale. This would remove the stepping-stone effect to more serious drugs. Hydroponic marijuana and specially bred highly-potency field varieties, the likely cause of the Schizophrenia blamed on marijuana, should remain banned. Coca leaves, as a herbal product used to alleviate altitude sickness, should be legal; but the refined product, cocaine, banned.

The traditional opium poppy, as a herb, should be legal if grown on a small scale, but refined products eg heroin should remain banned, as should modern varieties of the herb, highly-bred to concentrate the active ingedients.

Opium poppies are grown as a legal crop by farmers in Tasmania, to supply the medical industry. They're quite beautiful; I used to live there.

Injectable drugs, being concentrated, should remain banned except on medical prescription.

Whilst this position might seem to approach that of Chomsky and Soros, it's acually quite different. Under this scheme, there would be greater personal autonomy for the little guy, but the high-level Drug industries would be smashed, through government control of the banks, shutting down the tax havens, and seizing the assets of bankers, lawyers and accountants involved in money-laundering.

The best way to attack the Drug Trade is to get rid of the Tax Haven system and seize the assets of the bankers who launder funds.

(2) The case for Decriminalizing Drugs - examples of Portugal, Holland, Switzerland

From: Sadanand, Nanjundiah (Physics Earth Sciences) <> Date: 07.06.2011 01:18 PM

Little wonder the Obama administration rejected the recent report by the Global Commission on Drug policy.

[The "commissioners" including American heavyweights (George Schulz and Paul Volcker), stated that "The money spent by governments on futile drug war efforts could be better spent on different ways to reduce drug demand and the harm caused by drug abuse." "The war on drugs has increased drug usage, it's filled our jails, it's cost millions of taxpayer dollars and it's fueled organized crime," (billionaire British airline owner) Richard Branson said. "It's estimated that over $1 trillion has been spent on fighting this unwinnable battle." The commission recommended that governments experiment with the legal regulation of drugs, especially cannabis, referring to the success in countries such as Portugal, Switzerland and the Netherlands where drug consumption had been reduced.

In 2001, Portugal decriminalized all drug consumption and users now face fines and treatment instead of jail time, while in Holland heroin can be medically prescribed and in Switzerland addicts get free methadone and clean needles.

But the White House Office of National Drug Control Policy said in a statement that making drugs more available would make it harder to keep communities healthy and safe. The United States is the biggest market for illegal drugs.]

However carrying out the recommendations of the Commission would make it impossible for the CIA to use the drug money to fund its nefarious activities worldwide.


And two books that establish the connections:

Dark Alliance: The CIA, the Contras, and the Crack Cocaine Explosion - Paperback (June 8, 1999) by Gary Webb and Maxine Waters

Cocaine Politics: Drugs, Armies, and the CIA in Central America, Updated Edition - Paperback (Apr. 10, 1998) by Peter Dale Scott and Jonathan Marshall

(3) Portugal eliminates jail for drug users but maintains criminal penalties for dealers - Scientific American

5 Years After: Portugal's Drug Decriminalization Policy Shows Positive Results

Street drug related deaths from overdoses drop and the rate of HIV cases crashes

By Brian Vastag

April 7, 2009

In the face of a growing number of deaths and cases of HIV linked to drug abuse, the Portuguese government in 2001 tried a new tack to get a handle on the problemÑit decriminalized the use and possession of heroin, cocaine, marijuana, LSD and other illicit street drugs. The theory: focusing on treatment and prevention instead of jailing users would decrease the number of deaths and infections.

Five years later, the number of deaths from street drug overdoses dropped from around 400 to 290 annually, and the number of new HIV cases caused by using dirty needles to inject heroin, cocaine and other illegal substances plummeted from nearly 1,400 in 2000 to about 400 in 2006, according to a report released recently by the Cato Institute, a Washington, D.C, libertarian think tank.

"Now instead of being put into prison, addicts are going to treatment centers and they're learning how to control their drug usage or getting off drugs entirely," report author Glenn Greenwald, a former New York State constitutional litigator, said during a press briefing at Cato last week.

Under the Portuguese plan, penalties for people caught dealing and trafficking drugs are unchanged; dealers are still jailed and subjected to fines depending on the crime. But people caught using or possessing small amountsÑdefined as the amount needed for 10 days of personal useÑare brought before what's known as a "Dissuasion Commission," an administrative body created by the 2001 law.

Each three-person commission includes at least one lawyer or judge and one health care or social services worker. The panel has the option of recommending treatment, a small fine, or no sanction.

Peter Reuter, a criminologist at the University of Maryland, College Park, says he's skeptical decriminalization was the sole reason drug use slid in Portugal, noting that another factor, especially among teens, was a global decline in marijuana use. By the same token, he notes that critics were wrong in their warnings that decriminalizing drugs would make Lisbon a drug mecca.

"Drug decriminalization did reach its primary goal in Portugal," of reducing the health consequences of drug use, he says, "and did not lead to Lisbon becoming a drug tourist destination."

Walter Kemp, a spokesperson for the United Nations Office on Drugs and Crime, says decriminalization in Portugal "appears to be working." He adds that his office is putting more emphasis on improving health outcomes, such as reducing needle-borne infections, but that it does not explicitly support decriminalization, "because it smacks of legalization."

Drug legalization removes all criminal penalties for producing, selling and using drugs; no country has tried it. In contrast, decriminalization, as practiced in Portugal, eliminates jail time for drug users but maintains criminal penalties for dealers. Spain and Italy have also decriminalized personal use of drugs and Mexico's president has proposed doing the same. ...

(4) Portugal has has Europe's most liberal drug laws (Dutch don't enforce theirs) - Time,8599,1893946,00.html

Drugs in Portugal: Did Decriminalization Work?

By MAIA SZALAVITZ Sunday, Apr. 26, 2009

Pop quiz: Which European country has the most liberal drug laws? (Hint: It's not the Netherlands.)

Although its capital is notorious among stoners and college kids for marijuana haze­filled "coffee shops," Holland has never actually legalized cannabis Ñ the Dutch simply don't enforce their laws against the shops. The correct answer is Portugal, which in 2001 became the first European country to officially abolish all criminal penalties for personal possession of drugs, including marijuana, cocaine, heroin and methamphetamine. ...

(5) Chomsky advocates Decriminalization

{visit the webpage to see the video}

Noam Chomsky on the war on drugs

Published: 10 January 2011

Academic and social activist Noam Chomsky speaks about the failures of the war on drugs. He argues that the criminal justice-led approach of current drug policies is immoral and leads to discrimination, violence, destruction and crime, all at great financial cost. Chomsky makes the case that, in contrast, prevention and treatment are by far the most cost-effective and humane means of reducing the harms that drugs can cause.

(6) War on Drugs has failed - Global Commission On Drug Policy

War On Drugs: Report Of The Global Commission On Drug Policy

JUNE 2011


[...] George P. Shultz, former Secretary of State, United States (honorary chair)
Javier Solana, former European Union High Representative for the Common Foreign and Security Policy, Spain
[...] Kofi Annan (Ghana), former Secretary-General of the United Nations
[...] Paul Volcker, former Chairman of the United States Federal Reserve [...]
Richard Branson ... founder of the Virgin Group
Ruth Dreifuss, former President of Switzerland and Minister of Home Affairs
Thorvald Stoltenberg, former Minister of Foreign Affairs and UN High Commissioner for Refugees, Norway


The global war on drugs has failed, with devastating consequences for individuals and societies around the world. ... Vast expenditures on criminalization and repressive measures directed at producers, traffickers and consumers of illegal drugs have clearly failed to effectively curtail supply or consumption. Apparent victories in eliminating one source or trafficking organization are negated almost instantly by the emergence of other sources and traffickers. ...

Our principles and recommendations can be summarized as follows:

End the criminalization, marginalization and stigmatization of people who use drugs but who do no harm to others. Challenge rather than reinforce common misconceptions about drug markets, drug use and drug dependence.

Encourage experimentation by governments with models of legal regulation of drugs to undermine the power of organized crime and safeguard the health and security of their citizens. This recommendation applies especially to cannabis, but we also encourage other experiments in decriminalization and legal regulation that can accomplish these objectives and provide models for others.

Offer health and treatment services to those in need. Ensure that a variety of treatment modalities are available, including not just methadone and buprenorphine treatment but also the heroin-assisted treatment programs that have proven successful in many European countries and Canada. Implement syringe access and other harm reduction measures that have proven effective in reducing transmission of HIV and other blood-borne infections as well as fatal overdoses. Respect the human rights of people who use drugs.

Abolish abusive practices carried out in the name of treatment ­ such as forced detention, forced labor, and physical or psychological abuse ­ that contravene human rights standards and norms or that remove the right to self-determination.

Apply much the same principles and policies stated above to people involved in the lower ends of illegal drug markets, such as farmers, couriers and petty sellers. . ...

{p. 20 of the Report; p. 22 of the pdf file}

Centro Edelstein de Pesquisas Sociais Instituto Fernando Henrique Cardoso
Open Society Foundations
Sir Richard Branson, founder and chairman of Virgin Group (Support provided through Virgin Unite)

Comment (Peter Myers):

Notice the Soros link: "Open Society Foundations" are listed under "SUPPORT" (ie financial support) at p. 20 of the Report ( p. 22 of the pdf file).

Do a search on the word "bank". The report makes no mention of the role of banks in laundering Drug money.

The word "launder" occurs in only one sentence: "Corruption and money laundering, driven by the drug trade, pervert local politics and skew local economies." This implies that laundering happens only at a local or neighbourhood level; there's no mention of banks as middlemen accepting deposits at the wholesale level.

(7) Global Commission is partly funded by George Soros's Open Society Foundation

Panel Calls War on Drugs a Failure By JOSE DE CORDOBA Wall Street Journal JUNE 2, 2011

MEXICO CITYÑAs spiraling drug violence kills thousands in Mexico and police battle gangs for control of Brazil's drug-infested slums, an international panel has concluded that the U.S.-led war on drugs is a failure. ...

The Global Commission is funded by member Sir Richard Branson of Virgin Group Ltd., George Soros's Open Society Foundation, the Instituto Fernando Henrique Cardoso and the Centro Edelstein de Pesquisas Sociais in Brazil.

(8) Soros-inspired Drug War "Failure" Story

Beck's Blaze Gets Burned With Soros-inspired Drug War "Failure" Story

By Cliff Kincaid ­ June 3, 2011

It was a big story on Glenn Beck's popular web site The Blaze: "New Report: 'Global War on Drugs Has Failed' and 'Cannot be Won.'" The problem is that the report came from an organization funded in part by George Soros, the nemesis of Glenn Beck. One of Beck's reporters posted a badly flawed Associated Press story about the report without exploring or even noting the Soros connection.

"The global war on drugs has failed and governments should explore legalizing marijuana and other controlled substances, according to a commission that includes former heads of state, a former U.N. secretary-general and a business mogul," the story began.

The report in question came from the Global Commission on Drug Policy, funded by billionaire George Soros through his Open Society Foundation. Another financial supporter was Richard Branson, the billionaire founder and chairman of Virgin Group. The Soros link is mentioned on page 20 of the report. ...

Portugal's case study is of some interest to lawmakers in the U.S., confronted now with the violent overflow of escalating drug gang wars in Mexico. ...

(9) Drug use increased in Portugal under Decriminalization

[...] In July 2001, Portugal became the first European country to formalize decriminalization of drug possession for personal use, when they introduced Law 30/2000. The law decriminalized the use, possession and acquisition of all types of illicit substances for personal use, defined as being up to ten days' supply of that substance. This was in line with the de facto Portuguese drug policy before the reform. Drug addicts were then to be aggressively targeted with therapy or community service rather than fines or waivers.[6] Even if there are no criminal penalties, these changes did not legalize drug use in Portugal. Possession has remained prohibited by Portuguese law, and criminal penalties are still applied to drug growers, dealers and traffickers.[7][8]

There is no reliable information about drug use, injecting behaviour or addiction treatment in Portugal before 2001, when general population surveys commenced. The only information about drug use before that time was the indicators on lifetime prevalence amongst youth, collected as part of the European School Survey Project on Alcohol and Other Drugs (ESPAD).

Thorough studies on how the various efforts have been implemented have not been conducted, and a causal effect between strategy efforts and these developments cannot be firmly established.[12]There are, however, statistical indicators that suggest the following correlations between the drug strategy and the following developments, from July 2001 up to 2007:

Drug use increased by 4.2%[13]
The percentage of people who have used drugs (at least once) in life, increased from 7.8% to 12% [14]
Increased lifetime use of cannabis from 12.4% to 17%. [15]
Lifetime use of cocaine more than doubled, from 1.3% to 2.8% [16]
Lifetime use of heroin nearly doubled, from 0.7% to 1.1% [17]
Increased lifetime use of Ecstacy from 0.7% to 1.3%[18]
Increased uptake of treatment.[19]
Reduction in HIV diagnoses amongst drug users by 71%[20]
Reduction in drug related deaths. [21]
Homicide increased by 40% (2001 - 2006). It is unknown, however, if this increase is directly related to the change in drug laws. [22] ...

This page was last modified on 1 June 2011 at 04:16.

(10) Abandoning war on drugs would leave our youth vulnerable

By Henry Aubin, Montreal Gazette June 7, 2011

[...] But, for me, the biggest problem in this report and all the others is the lack of attention to a certain demographic: kids.

Most pro-liberalization reports, politicians and pundits don't even mention minors. They simply say only people aged 18 and up could have access to government stores and leave it at that.

Yet if adolescents and teenagers see adults openly consuming drugs, they're going to want to also, more than ever. Forbidden fruit and all that.

The Global Commission is unusually generous: It gives kids three paragraphs. But its recommendations reflect that same magical thinking. It breezily suggests that drugeducation programs (supposedly savvier than those simplistic "just say no" messages) will have a proper preventive effect.

Never mind that the government's sale of drugs will send a signal that they can't be that bad.

I don't care if adults consume drugs (though if I were their employer, I might think differently). It's their business. But I do care about kids. They're prone to making reckless decisions that can ruin their lives. Youth is a time for dealing with reality. Getting off to good start in life is a lot harder if your brain is in la-la land.

A United Nations report, World Drug Report, said in 2007 that Quebec students in grades 7 to 9 smoked more marijuana than their peers in any other province, a behaviour that helped make Canada the No. 1 pot consumer in the industrialized world. It would be hard to imagine this does not factor into Quebec's status as this country's dropout leader.

It's remarkable how little concern society gives the next generation. Countries accumulate huge debts and blithely accelerate climate change with little regard for the inevitable impact on today's youngsters. When it comes to making recommendations on drug policy, the intelligentsia reflects the pattern.

(11) International Drug Policy Consortium, a grantee of Soros' Open Society Institute

The Open Society Global Drug Policy Program aims to broaden, diversify, and consolidate the network of like-minded organizations that are challenging the current state of international drug policy. ==

International Drug Policy Consortium: Five Policy Principles

Date: January 2009

Source: International Drug Policy Consortium

The International Drug Policy Consortium, a grantee of the Open Society Institute Global Drug Policy Program, is a network of NGOs and professional networks that specialize in issues related to illegal drug use. ...

The publication is available below in English, Chinese, Farsi, French, and Russian.

Relevant drug policy publications are almost nonexistent in languages other than English. With the help of leading experts, the Global Drug Policy Program is publishing key documents in translation.

{Comment (Peter Myers): note that this Soros report on the impossibility of Drug Control makes no mention of the role of Banks, Tax Havens and the City of London in Money Laundering. Such laundering occurs not at the level of street sales, but at the Wholesale level, where wholesalers, as middlemen between producers and consumers, deposit funds into bank accounts or buy assets with them. The best way to attack the Drug Trade is to get rid of the Tax Haven system and seize the assets of the bankers who launder funds}

(12) Soros' International Drug Policy Consortium: Five Policy Principles


The International Drug Policy Consortium (IDPC) is a global network of NGOs and professional networks that specialise in issues related to illegal drug use. ...

Following a review of currently available evidence, Consortium members have agreed to promote the following 5 principles in our advocacy work with governments and international agencies.



Ever since the first international drug control agreements in the early 20th Century, the focus of policy has been on tackling the supply of illegal drugs ­ by preventing their production and distribution, and arresting and prosecuting users. ... After 100 years of drug control, there are basically two reasons why this paradigm has become outdated:

- The ability of governments and international agencies to stifle the global market in drugs such as Cannabis, Heroin and Cocaine has been limited. ... On the few occasions when supply of a particular drug from a particular source has been stopped, suppliers quickly move to another source, or users move to another drug. ...

- Governments and local administrations have increasingly implemented policies and programmes that are not directly aimed at reducing the scale of the drug market, but that target specific consequential harms arising from drug use ­ for example, public health measures to prevent overdose deaths and HIV infection, or local action to tackle petty crime associated with drug markets. ...


As long as there is a demand for the products deriving from plant-based drugs such as Opium, Cocaine and Cannabis, and as long as profits can be made from their distribution, these plants will be grown (or alternatives produced synthetically) somewhere in the world. This holds true even for Amphetamines- type Stimulants and Ecstasy that, in spite of their perception of being 'synthetic' drugs, are still largely based on ephedra and sassafras plants. All efforts to stifle the cultivation of these plants have resulted either in failure, the relocation of the pattern of cultivation to another area (the 'balloon' effect), or at best a short term disruption of supply to consumers. Reductions in Coca cultivation in Peru in the early 1990s and in Bolivia in the late 1990s simply shifted more production into Colombia. Similarly, successful action to reduce Opium poppy cultivation in Thailand and Pakistan in the 1990s has led to a higher level of production in Afghanistan. In the light of this experience, it is difficult to see how continued efforts to reduce cultivation of these substances will ever achieve the stated objective of preventing the supply of the concentrated or synthesised products to consumer markets.

Action by governments and international agencies to tackle the growing reach and influence of criminal organisations and networks, which derive much of their wealth from the distribution of illegal drugs, is clearly important. However, this challenge should be driven by wider objectives relating to the suppression of organised crime, rather than a simple focus on the amount of drugs intercepted. Similarly, international action to bring stability and prosperity to areas of drug cultivation (currently focussed on Afghanistan and the Andean region of South America) are needed, but the priority within these efforts should be the creation of sustainable livelihoods and improved quality of life for some of the poorest people on earth. This is both a more humane and more effective approach. Poor farmers grow crops used in illicit drug production as a means of basic subsistence. Eradicating their often only source of income prior to the establishment of alternative livelihoods results in a downward spiral of poverty for those affected and ensures that they will replant, leading to the geographical expansion of such crops. The continued promotion of forced eradication programmes in the Andes and Afghanistan cannot be justified either in terms of the prospects for success in reducing overall drug supply, or of their impact on the local situation. Forced eradication programmes are often counter-productive, generating social conflict and political violence and undermining government legitimacy. Aerial spraying negatively impacts on the fragile economies and environment in growing areas, and contribute to the poverty and exclusion of rural communities. This brings the anti-drug policies of the US government, supported by the UNODC, into direct contradiction with the development and human rights policies of other UN agencies such as the UNDP, UNAIDS, FAO, UNESCO and the UNHCR.

A more effective and responsible policy on reducing the supply of illegal drugs would focus on development and conflict-resolution goals in areas of current cultivation, rather than treating entire communities and cultures as criminals, and would more explicitly direct law enforcement attention towards the criminal networks that make the largest profits from synthesising and distributing illegal substances.


The Wold Drug Report 2006 estimated that there were around 200 million current users of illegal drugs ­ around 5% of the adult population. Available surveys suggest that 3 or 4 times that number will have used illegal drugs at some time in their lives. ...

- To the extent that imprisonment is used as a punishment, the effect is to concentrate large numbers of drug users in a closed environment, which creates the conditions for greater peer pressure on non-users, and for drug-related infections and diseases to spread. ...


[...] - The UNDP, UNAIDS, FAO, World Bank, and UNHCR, should be more involved in ensuring that action against drug cultivation, distribution and use is consistent with the human rights and development standards and priorities as laid down in the UN Charter and Millennium Goals with regard to poverty reduction and HIV prevention.

There is a potentially strong and positive role for UNODC and the INCB in a more co-ordinated UN system. The INCB could use its broad mandate in not only criticising member states for any perceived deviation from the enforcement aspects of the drug-control conventions, but helping governments to understand the range of policies and practices that would be appropriate to their implementation of the directives coming from the UN system as a whole. ...

(13) British financier network is apex of the Drug Trade

From: Sandhya Jain <> Date: 16.05.2011 09:17 AM

Bin Laden and Drugs: The real Dope Pushers in Afghan War still at large

Ramtanu Maitra

16 May 2011

Viktor Ivanov, director of Russia's anti-drug agency, announced to reporters on May 5 that "Osama [bin Laden] launched the heroin drug trafficking [in Afghanistan]É. He is gone; that is to say, he was killed. This is a major success of our US partners. However, the drug problem is not solved," as quoted in Itar-Tass May 6.

Was Ivanov correct, if quoted correctly? He was right in claiming that the drug problem is not solved, but he was only partially correct, if indeed he had claimed that bin Laden launched the heroin drug trafficking: There were many other international players, whose active collaboration made Osama's venture a "success." When it comes to bin Laden, the entire herd of policymakers, administrators, academics, news media, and common people, resorts to wild exaggeration without providing a shred of evidence for holding the man (now, dead) in such "high esteem."

As Ivanov should know, the only way that the opium trade is going to be stopped is by going after the financial powers who godfathered it, and sustain it, from the top: the British financier network, which funds and launders the trade for its geopolitical, as well as economic reasons. Within this nexus, bin Laden was just a cog, if a flamboyant one. The main task, of crushing the British international criminal network behind the drug trade, lies ahead.

Opium in Afghanistan

I hate this City, seated on the Plain, The clang and clamour of the hot Bazaar, Knowing, amid the pauses of my pain, This month the Almonds bloom in Kandahar. ÑFrom an unknown Indian poet, translated into English by Laurence Hope in 1906

At present, almonds are not the only flowers in bloom; the provinces of Kandahar and Helmand are awash with opium sap-producing poppies, as well. After two years of steady decline, the United Nations Office of Drugs and Crime (UNODC) predicts a significant growth in opium production in Afghanistan this year. This means one thing, and one thing only: All the international forcesÑfrom the largely British offshore bankers to the dollar-a-trip drug mulesÑwho benefit from the multibillion dollar opium/heroin business that flourishes under the cover of the ongoing war in Afghanistan are alive and kicking, and the insurgents are assured that their financing will remain undisturbed.

That is, however, not to say that opium production in Afghanistan began only with the arrivals of the "foreign devils." It existed before, but the production was nowhere near the level it is today, or what we have seen during the last ten years. At the time the Red Army launched its brutal campaign to annex Afghanistan at the end of 1979, the country was producing less than 100 tons a year, as compared to the 8,000 tons it produced in 2007. In that year, the opium-producing fields of southern Afghanistan were not only thick with poppies, but also with foreign troops, particularly those who serve Britain's Royal Majesty. Following the Soviet invasion of Afghanistan, history recalls the gearing up of the anti-Soviet machinery by the US in particular, and the West in general, to organize the Afghans to give the Red Army a black eye; the West saw an opportunity to bring down the Bolsheviks. But how to finance this? Afghan opium became the mainspring for generating cash to pay for the war.

A deal was struck between Washington and the late Pakistani President Zia ul-Haq, to build a slate of mujahideen groups to fight the Red Army. They found in Gulbuddin Hekmatyar, who headed the Hezb-e-Islami group, a reliable and ardent drug handler. Pakistan and the mujahideen needed a lot of cash. So, Hekmatyar, who now operates in the northeastern part of Afghanistan against the American troops, and is projected widely as a potential arbiter in the resolution of the Afghan conflict, became the Washington man on the scene. A Pushtun, Hekmatyar operated during those days in the opium-growing southern part of Afghanistan on behalf of Washington and Islamabad.

Under Hekmatyar's stewardship, Afghan opium production rose from 250 tons in 1982, to 2,000 tons in 1991, coinciding with Washington's support and funding of the mujahideen. Alfred McCoy, a professor of Southeast Asian history at the University of Wisconsin, says that US and Pakistani intelligence officials sanctioned the rebels' drug trafficking because of their fierce opposition to the Soviets: "If their local allies were involved in narcotics trafficking, it didn't trouble [the] CIA. They were willing to keep working with people who were heavily involved in narcotics." For instance, Hekmatyar, the mujahideen leader who received about half of all the CIA's covert weapons, was known to be a major heroin trafficker. Charles Cogan, who directed the CIA's operation in Afghanistan at that time, later claimed he was unaware of the drug trade: "We found out about it later on," he told the Atlantic Monthly in May 1996.

The other major drug warlord-mujahid was Yunus Khalis. He headed his own faction of the fundamentalist Hezb-e-Islami party and was operating along the borders of eastern Afghanistan. His objective was to get control of Nangarhar province, where poppy had been grown for centuries. While President George W. Bush was braying for Osama's blood, it was reportedly Yunus Khalis who had brought bin Laden into hiding in the Tora Bora mountains bordering Pakistan.

Although both Hekmatyar and Khalis relied on opium-generated money to become powerful, they carefully confined their interactions with the local drug lords who would pay them cash, and carry the stuff away. In other words, compared to what happened in Osama's time, and the International Security Assistance Forces' (ISAF) sojourn in Afghanistan, Khalis and Hekmatyar were indulging in a penny-ante game.

At the time the Afghan opium, being converted into heroin in labs operated mostly by UK-born and -educated chemists, was finding its way to the outside world through Pakistan, the Indian Ocean, and Iran. In 1996, almost seven years after the defeated Red Army trudged back home through the Salang Tunnel, the Afghan Taliban, aided by Saudi Arabia and Pakistan, came to power under Mullah Omar. Those seven years (1989-96) were a terrible period in Afghanistan, where mujahideen, set up, armed, and trained by the West to draw Russian blood, killed each other in large numbers. The arrival of the Taliban, a laboratory product funded by the Saudis and trained by the Pakistani Army, brought a semblance of "order" in Afghanistan. But, that also brought in Osama bin Laden and the building of the drug-trafficking network.

Bin Laden, a Saudi citizen [father of Yemeni origin, mother Syrian], who first came to Pakistan in 1984, and formed an organization called Makhtab al-Khidamat (MaK), recruited and trained Muslim volunteers from the Arab world who were willing to fight the Soviet Army. The West had funded MaK in its anti-Soviet phase; after the Soviets left Afghanistan, Makhtab became al-Qaeda, and began targeting US interests around the world. Riyadh revoked bin Laden's citizenship in 1994 because of his terrorism activities, and under pressure from the United States, Sudan expelled him in 1996. When Saudi Arabia barred his return, bin Laden returned to Afghanistan, where the newly installed Taliban regime, funded by Saudi Arabia and militarily protected by Pakistan, welcomed him.

Osama's Heroin Express: Bout, and Dubai

Hekmatyar, who had opposed the Taliban and fled the country after they took control, was out of the Afghan opium loop in 1996. After his arrival, Osama set about to expand heroin trafficking, most likely with two things in mind. First: to generate enough cash to arm the Taliban against future invaders and protect his own al-Qaeda group; and second, to tap the wide international demand for heroin.

In setting up his network, Osama brought in Dawood Ibrahim, a mafia don from Mumbai, India, in the 1980s and early 1990s. Dawood, with strong links to Mumbai's political and social milieu, was a gold and drug trafficker. He fled India for Dubai following the March 12, 1993 bombings of the Bombay Stock Exchange, which killed hundreds of Indians, and injured over a thousand more. Dawood's syndicate, which was under control of the Pakistani Inter-Services Intelligence (ISI), became a part of British MI6, operating hand-in-glove with money-launderers in Dubai and with bin Laden.

Why was the recruitment of Dawood necessary? While in Afghanistan, one of bin Laden's first moves was to link up his jihadi group with the cash-generating and money-laundering international underground. He took control of the Afghan national airlines, Ariana Airlines. As a former US National Security Council official told a reporter, Ariana Airlines became a "key node in al-Qaeda's infrastructure. The network used Ariana to move everything that was usefulÑmoney, personnel, and matériel." Soon, Ariana Airlines shifted from carrying passengers to carrying cargo. "The planes would come back from the UAE loaded with weapons," said Julie Sirrs, an Afghanistan specialist at the US Defense Intelligence Agency during the Clinton Administration. "It was mostly Soviet weapons, small arms - Kalashnikovs and RPG-7s."

While the weapons came in from Dubai, and later from Sharjah, the planes carried tons of opium back to Dubai. Agents of al Qaeda and Dawood's men would take control of the drugs in Dubai, contact the drug trafficking network, and purchase weapons using some of that money.

A frequent stop was Sharjah, one of the Emirates, whose international airport, former US and Afghan officials said, became a hub for drug and arms smuggling by al-Qaeda. The emirate, 20 miles from Dubai, is run by a fundamentalist Islamic regime. Sharjah's airport is studded with numerous "fly-by-night" cargo operations willing to take on any comers, US analysts point out.

In Sharjah, al-Qaeda's benefactor was the notorious Russian mafioso and gun-runner, Victor Bout. Bout, who was arrested in Thailand, and extradited to the United States in November 2010, had developed contacts with the Taliban in August 1995, when the Taliban was in opposition to then-President Burhanuddin Rabbani's government in Kabul. One of Bout's planes, flying under the banner of the Trans Aviation Network (TAN), from Albania, via Sharjah, and transporting small arms and military equipment to Rabbani, was intercepted by a MiG-21 and forced to land in Taliban-controlled territory, according to the International Consortium of Investigative Journalists (ICIJ) investigation.

According to the UN and various intelligence reports, in March 1995, Bout and a Frenchman, Michel Victor Thomas, founded TAN. Between 1995 and 1997, TAN's operating base was Ostend, in Belgium, an airport frequently cited by human rights groups for hosting companies and individuals involved in arms trafficking. TAN also opened offices in Sharjah, one of the Gulf Emirates.

The Ilyushin-76 used to deliver weapons to Afghanistan belonged to Aerostan, a company based in Tatarstan, but leased by Transavia, one of Bout's companies operating out of the UAE. Transavia had started making cargo flights to Kabul, Kandahar, and Jalalabad in May 1995, at the behest of Afghani traders in the Emirates, according to Agence France Presse. The Taliban, who were recruited by the West to fight the Soviets in Afghanistan, now oversee the vast production of opium poppy. Intelligence agencies suspect that arms supplies were transported on an airline, Flying Dolphin, run by one of Bout's business associates, which ran scheduled flights from the UAE into Taliban-ruled Afghanistan, between October 2000 and Jan. 21, 2001, according to reports in the UAE media. Flying Dolphin is owned by Sheikh Abdullah bin Zayed bin Saqr al-Nayhan, a former UAE ambassador to the United States, and a member of the ruling family in Abu Dhabi, who has been described by the UN as a "close business associate of Bout." According to the Dec. 20, 2000 UN report, Zayed's company is registered in Liberia, but its operations office was in Dubai.

The US Treasury Department's description of Dawood says, in part, that his criminal syndicate "is involved in large-scale shipments of narcotics in the UK and Western Europe... The syndicate's smuggling routes from South Asia, the Middle East and Africa are shared with Osama bin Laden and his terrorist network.... Successful routes established over recent years by Ibrahim's syndicate have been subsequently utilized by bin Laden. A financial arrangement was reportedly brokered to facilitate the latter's usage of these routes... In the late 1990s, Ibrahim traveled in Afghanistan under the protection of the Taliban.... Information, from as recent[ly] as Fall 2002, indicates that Ibrahim has financially supported Islamic militant groups working against India, such as Lashkar-e-Tayyiba (LeT)."

Following the US invasion of Afghanistan, and after the poppy fields were transferred from Osama's watch to the British troops' watch, Dawood Ibrahim became a major transporter of drugs from Afghanistan to Dubai by means of his "mules," protected by the intelligence agencies and his beneficiaries. It is said that containers that carry large equipment to Dubai, from Kandahar and elsewhere in southern Afghanistan, for "repair," also contain drugs.

The drugs were converted to cash in Dubai. The tax-free island-city, sitting at a strategic crossroads of the Persian Gulf, South Asia, and Africa, is a major offshore banking center. With the development of the Dubai International Financial Centre (DIFC), the latest free-trade zone there, flexible and unrestricted offshore banking has become big business. Many of the world's largest banks already have a significant presence in DubaiÑAbbey National Offshore, HSBC Offshore, ABN Amro, ANZ Grindlays, Banque Paribas, Banque de Caire, Barclays, Dresdner, and Merrill Lynch all have offices there.

The Money-Launderers

Besides Dubai, most of the offshore banks are located in former British colonies, and all are involved in money laundering: Legitimizing cash generated from drug sales and other contraband for the "respectable banks" is the lifeblood of these offshore institutions. Arguably the most important of the Caribbean offshore financial centers is the Cayman Islands, a British Overseas Territory run by a royal governor appointed by Queen Elizabeth II. The Caymans are mainly a mail drop and regulation-free zone, a place where hot money is welcome, and few questions are asked.

On Oct. 10, 2001, John Henley of the London Guardian, reporting from Paris, pointed to a French parliamentary report which said that up to 40 companies, banks, and individuals based in Britain can legitimately be suspected of maintaining direct or indirect relations with Osama bin Laden. "The convergence of financial and terrorist interests, apparent particularly in Great Britain and in Sudan, does not appear to have been an obstacle with regard to the objectives pursued [by bin Laden]," the report concluded. "The conjunction of a terrorist network attached to a vast financing structure is the dominant trait of operations conducted by bin Laden."

The report, titled "The City of London, Gibraltar and the Crown Dependencies: Offshore Centers and Sanctuaries for Dirty Money," said that criminal organizations "have been able to exploit to their profit the reckless financial deregulation of the 1980s," while Britain has failed to accompany with "the security measures demanded for all too long by the battle against money laundering and financial crime."

It is likely that Osama bin Laden died a pauper, holed up in a house for years under the protection of Pakistani security. Once he went into hiding in 2001, his heroin-generated financial network was taken over by others, and he no longer had access to it. Viktor Ivanov should note that while Osama was gone already in 2001, the entire heroin-trafficking infrastructure has not only remained intact, but it has been strengthened. The only difference between Osama's days in Afghanistan and the post-2001 Afghanistan, is that a new set of profit-makers has emerged. During the period that the Taliban was running the heroin-for-cash-and-arms, Russia was not much of a target for them. Now, Russia is a victim of Afghan heroin, with more than 2 million addicts, and it is likely that that will not change, unless firm steps are taken to eradicate this evil.

The heroin has too many powerful patrons.

The author is South Asian Analyst at Executive Intelligence Review News Services Inc.

(14) City of London is a global money laundering centre - French parliamentary report (2001)

City 'haven' for terrorist money laundering

Report says Bin Laden has extensive interests in UK

Jon Henley in Paris

The Guardian, Wednesday 10 October 2001 00.00 BST

Osama bin Laden's extensive financial interests in Britain are outlined today in a French parliamentary report that says the City is a money laundering haven for billions of pounds of tainted and terrorist money.

Up to 40 companies, banks and individuals based in Britain can legitimately be suspected of maintaining direct or indirect relations with the terrorist, according to a 70-page annexe, The Economic Environment of Osama bin Laden, attached to the French report. Compiled by an independent team of financial experts whose identity the French parliamentarians have undertaken not to reveal, the annexe reveals that the structure of Bin Laden's financial network bears a striking similarity to that used by the collapsed BCCI bank for its fraudulent operations in the 1980s.

"This document clearly shows the great permeability of the British banking and financial system and the fragility of the controls operated at its points of entry," write the authors of the French report, a copy of which has been obtained by the Guardian.

The annexe establishes numerous links between Bin Laden with international arms and oil dealers and even members of the Saudi elite.

It also pinpoints the relationship and its subsquent breakdown between Osama bin Laden and his family's holding company, Saudi BinLadin Group, and its multiple subsidiaries, investments and offshoots in Europe.

Many of the individuals concerned, several with British connections, were also involved in various senior roles with BCCI, the report says. Hundreds of banks and companies are mentioned, from Sudan, Geneva and London to Oxford, the Bahamas and Riyadh.

The names of half a dozen former BCCI clients and officials, including Ghaith Pharaon, wanted by the US authorities for fraud, and Khalid bin Mahfouz, a Saudi banker who was closely involved with the bank before it was closed down by the Bank of England in 1991, recur throughout the annexe and are directly linked to Bin Laden through banks, holding companies, foundations and charities, at least one of which, the International Development Foundation, has its headquarters in London.

"The convergence of financial and terrorist interests, apparent particularly in Great Britain and in Sudan, does not appear to have been an obstacle with regard to the objectives pursued [by Bin Laden]," the annexe concludes. "The conjunction of a terrorist network attached to a vast financing structure is the dominant trait of operations conducted by bin Laden."

The Bin Laden study appears as an appendix to a French parliamentarians' report that blames lax and outdated legislation, inadequate enforcement and the lack of political will to challenge powerful commercial interests for the City's status as a global money laundering centre.

The exhaustive 180-page report is based on interviews with senior Metropolitan police officers, leading City regulators and European judges investigating cross-border financial crimes in Spain, Belgium and France.

"Those responsible for combating financial crime are depressed and discouraged by an archaic and dysfunctional system," said the author, Arnaud Montebourg, a Socialist MP. "The British authorities must realise that they have fallen badly behind." The report, titled The City of London, Gibraltar and the Crown Dependencies: offshore centres and sanctuaries for dirty money, says criminal organisations "have been able to exploit to their profit the reckless financial deregulation of the 1980s", which Britain has failed to accompany with "the security measures demanded for all too long by the battle against money laundering and financial crime".

Between 1986 and 1998, only 357 money laundering cases came to trial in London, compared with 538 in Italy and 2,034 in the United States in 1995 alone.

(15) Drug cartels launder and transfer billions of $ through the US banking system - Petras

Imperialism: Bankers, Drug Wars and Genocide

Mexico's Descent in the Inferno

by Prof. James Petras

Global Research, May 19, 2011

In May 2011, Mexican investigators uncovered another mass clandestine grave with dozens of mutilated corpses; bringing the total number of victims to 40,000 killed since 2006 when the Calderon regime announced its "war on drug traffickers". Backed by advisers, agents and arms, the White House has been the principal promotor of a 'war' that has totally decimated Mexico 's society and economy.

If Washington has been the driving force for the regime's war, Wall Street banks have been the main instruments ensuring the profits of the drug cartels. Every major US bank has been deeply involved in laundering hundreds of billions of dollars in drug profits, for the better part of the past decade.

Mexico 's descent into this inferno has been engineered by the leading US financial and political institutions, each supporting 'one side or the other' in the bloody "total war" which spares no one, no place and no moment in time. While the Pentagon arms the Mexican government and the US Drug Enforcement Agency enforces the "military solution", the biggest US banks receive, launder and transfer hundreds of billions of dollars to the drug lords' accounts, who then buy modern arms, pay private armies of assassins and corrupt untold numbers of political and law enforcement officials on both sides of the border.

Mexico's Descent in the Inferno

Everyday scores, if not hundreds, of corpses ­ appear in streets and or are found in unmarked graves; dozens are murdered in their homes, cars, public transport, offices and even hospitals; known and unknown victims in the hundreds are kidnapped and disappear; school children, parents, teachers, doctors and businesspeople are seized in broad daylight and held for ransom or murdered in retaliation. Thousands of migrant workers are kidnapped, robbed, ransomed, murdered and evidence is emerging that some are sold into the illegal 'organ trade'. The police are barricaded in their commissaries; the military, if and when it arrives, takes out its frustration on entire cities, shooting more civilians than cartel soldiers. Everyday life revolves around surviving the daily death toll; threats are everywhere, the armed gangs and military patrols fire and kill with virtual impunity. People live in fear and anger.

The Free Trade Agreement: The Sparks that lit the Inferno

In the late 1980's, Mexico was in crisis, but the people chose a legal way out: they elected a President, Cuahtemoc Cardenas, on the basis of his national program to promote the economic revitalization of agriculture and industry. The Mexican elite, led by Carlos Salinas of the Institutional Revolutionary Party (PRI) chose otherwise and subverted the election: The electorate was denied its victory; the peaceful mass protests were ignored. Salinas and subsequent Mexican presidents vigorously pursued a free trade agreement (NAFTA) with the US and Canada , which rapidly drove millions of Mexican farmers, ranchers and small business people into bankruptcy. Devastation led to the flight of millions of immigrant workers. Rural movements of debtors flourished and ebbed, were co-opted or repressed. The misery of the legal economy contrasted with the burgeoning wealth of the traffickers of drugs and people, which generated a growing demand for well-paid armed auxiliaries as soldiers for the cartels. The regional drug syndicates emerged out of the local affluence.

In the new millennium, popular movements and a new electoral hope arose: Andres Manuel Lopez Obrador (AMLO). By 2006 a vast peaceful electoral movement promised substantial social and economic reforms to 'integrate millions of disaffected youth'. In the parallel economy, the drug cartels were expanding and benefiting from the misery of millions of workers and peasants marginalized by the Mexican elite, who had plundered the public treasury, speculated in real estate, robbed the oil industry and created enormous privatized monopolies in the communication and banking sectors.

In 2006, millions of Mexican voters were once again denied their electoral victory: The last best hope for a peaceful transformation was dashed. Backed by the US Administration, Felipe Calderon stole the election and proceeded to launch the "War on Drug Traffickers" strategy dictated by Washington .

The War Strategy Escalates the Drug War: The Banking Crises Deepens the Ties with Drug Traffickers

The massive escalation of homicides and violence in Mexico began with the declaration of a war on the drug cartels by the fraudulently elected President Calderon, a policy pushed initially by the Bush Administration and subsequently strongly backed by the Obama ­ Clinton regime. Over 40,000 Mexican soldiers filled the streets, towns and barrios ­ violently assaulting citizens - especially young people. The cartels retaliated by escalating their armed assaults on police. The war spread to all the major cities and along the major highways and rural roads; murders multiplied and Mexico descended further into a Dantesque inferno. Meanwhile, the Obama regime 'reaffirmed' its support for a militarist solution on both sides of the border: Over 500,000 Mexican immigrants were seized and expelled from the US ; heavily armed border patrols multiplied. Cross border gun sales grew exponentially .The US "market" for Mexican manufactured goods and agricultural products shrank, further widening the pool for cartel recruits while the supply of high powered weapons increased. White House gun and drug policies strengthened both sides in this maniacal murderous cycle: The US government armed the Calderon regime and the American gun manufacturers sold guns to the cartels through both legal and underground arms sales. Steady or increasing demand for drugs in the US ­ and the grotesque profits derived from trafficking and sales--- remained the primary driving force behind the tidal wave of violence and societal disintegration in Mexico .

Drug profits, in the most basic sense, are secured through the ability of the cartels to launder and transfer billions of dollars through the US banking system. The scale and scope of the US banking-drug cartel alliance surpasses any other economic activity of the US private banking system. According to US Justice Department records, one bank alone, Wachovia Bank (now owned by Wells Fargo), laundered $378.3 billion dollars between May 1, 2004 and May 31, 2007 (The Guardian, May 11, 2011). Every major bank in the US has served as an active financial partner of the murderous drug cartels ­ including Bank of America, Citibank, and JP Morgan, as well as overseas banks operating out of New York , Miami and Los Angeles , as well as London .

While the White House pays the Mexican state and army to kill Mexicans suspected of drug trafficking, the US Justice Department belatedly slaps a relatively small fine on the major US financial accomplice to the murderous drug trade, Wachovia Bank, spares its bank officials from any jail time and allows major cases to lapse into dismissal.

The major agency of the US Treasury involved in investigating money laundering, the Undersecretary for Terrorism and Financial Intelligence, deliberately ignored the blatant collaboration of US banks with drug terrorists, concentrating almost their entire staff and resources on enforcing sanctions against Iran . For seven years, Treasury Undersecretary Stuart Levey used his power as head of the Department for Terrorism and Financial Intelligence to pursue Israel 's phony "war on terrorism" against Iran , rather than shut down Wachovia's money-laundering operations with the Mexican drug terrorists. In this period of time an estimated 40,000 Mexican civilian have been killed by the cartels and the army.

Without US arms and financial services supporting both the illegitimate Mexican regimes and the drug cartels ­ there could be no "drug war", no mass killings and no state terror. The simple acts of stopping the flood of cheap subsidized US agriculture products into Mexico and de-criminalizing the use and purchase of cocaine in the US would dry up the pool of 'cartel soldiers' from the bankrupted Mexican peasantry and the cut back the profits and demand for illegal drugs in the US market.

The Drug Traffickers, the Banks and the White House

If the major US banks are the financial engines which allow the billion dollar drug empires to operate, the White House, the US Congress and the law enforcement agencies are the basic protectors of these banks. Despite the deep and pervasive involvement of the major banks in laundering hundreds of billions of dollars in illicit funds, the "court settlements" pursued by US prosecutors have led to no jail time for the bankers. One court's settlement amounted to a fine of $50 million dollars, less than 0.5% of one of the banks (the Wachovia/Wells Fargo bank) $12.3 billion profits for 2009 (The Guardian, May 11, 2011). Despite the death of tens of thousands of Mexican civilians, US executive branch directed the DEA, the federal prosecutors and judges to impose such a laughable 'punishment' on Wachovia for its illegal services to the drug cartels. The most prominent economic officials of the Bush and Obama regimes, including Summers, Paulson, Geithner, Greenspan, Bernacke et al, are all long term associates, advisers and members of the leading financial houses and banks implicated in laundering the billions of drug profits.

Laundering drug money is one of the most lucrative sources of profit for Wall Street; the banks charge hefty commissions on the transfer of drug profits, which they then lend to borrowing institutions at interest rates far above what ­ if any ­ they pay to drug trafficker depositors. Awash in sanitized drug profits, these US titans of the finance world can easily buy their own elected officials to perpetuate the system.

Even more important and less obvious is the role of drug money in the recent financial meltdown, especially during its most critical first few weeks.

According to the head of United Nation's Office on Drugs and Crime, Antonio Maria Costa, "In many instances, drug money (was)É currently the only liquid investment capitalÉ. In the second half of 2008, liquidity was the banking system's main problem and hence liquid capital became an important factorÉinterbank loans were funded by money that originated from drug trade and other illegal activitiesÉ (there were) signs that some banks were rescued in that way." (Reuters, January 25,2009. US edition). Capital flows from the drug billionaires were key to floating Wachovia and other leading banks. In a word: the drug billionaires saved the capitalist financial system from collapse!


By the end of the first decade of the 21st century, it has become clear that capital accumulation, at least in North America, is intimately linked to generalized violence and drug trafficking. Because capital accumulation is dependent on financial capital, and the latter is dependent on the industry profits from the multi-hundred-billion dollar drug trade, the entire ensemble is embedded in the 'total war' over drug profits. In times of deep crises the very survival of the US financial system ­ and through it, the world banking system ­ is linked to the liquidity of the drug "industry".

At the most superficial level the destruction of Mexican and Central American societies ­ encompassing over 100 million people ­ is a result of a conflict between drug cartels and the political regimes of the region. At a deeper level there is a multiplier or "ripple effect" related to their collaboration: the cartels draw on the support of the US banks to realize their profits; they spend hundreds of millions on the US arms industry and others to secure their supplies, transport and markets; they employ tens of thousands of recruits for their vast private armies and civilian networks and they purchase the compliance of political and military officials on both sides of the borders

For its part, the Mexican government acts as a conduit for US Pentagon/Federal police, Homeland Security, drug enforcement and political apparatuses prosecuting the 'war', which has put Mexican lives, property and security at risk. The White House stands at the strategic center of operations ­ the Mexican regime serves as the front-line executioners.

On one side of the "war on drugs" are the major Wall Street banks; on the other side, the White House and its imperial military strategists and in the 'middle' are 90 million Mexicans and 40,000 murder victims and counting.

Relying on political fraud to impose economic deregulation in the 1990's (neo-liberalism), the US policies led directly to the social disintegration, criminalization and militarization of the current decade. The sophisticated narco-finance economy has now become the most advanced stage of neo-liberalism. When the respectable become criminals, the criminals become respectable.

The issue of genocide in Mexico has been determined by the empire and its "knowing" bankers and cynical rulers.

(16) Wells Fargo & Bank of America launder Mexican drug money; gangs "cannot work without a bank"

Banks Financing Mexico Gangs Admitted in Wells Fargo Deal

By Michael Smith - Tue Jun 29 04:00:01 GMT 2010

June 29 (Bloomberg) -- Bloomberg Markets Magazine senior writer Michael Smith discusses the use of Wachovia Corp., Bank of America Corp. and others by Mexican drug cartels to launder funds. In the magazine's August 2010 issue, Smith reports that Wells Fargo & Co., which bought Wachovia in 2008, admitted in court that its unit failed to monitor and report suspected money laundering by narcotics traffickers. Smith speaks with Betty Liu on Bloomberg Television's "In the Loop." (Source: Bloomberg)

Just before sunset on April 10, 2006, a DC-9 jet landed at the international airport in the port city of Ciudad del Carmen, 500 miles east of Mexico City. As soldiers on the ground approached the plane, the crew tried to shoo them away, saying there was a dangerous oil leak. So the troops grew suspicious and searched the jet.

They found 128 black suitcases, packed with 5.7 tons of cocaine, valued at $100 million. The stash was supposed to have been delivered from Caracas to drug traffickers in Toluca, near Mexico City, Mexican prosecutors later found. Law enforcement officials also discovered something else.

The smugglers had bought the DC-9 with laundered funds they transferred through two of the biggest banks in the U.S.: Wachovia Corp. and Bank of America Corp., Bloomberg Markets magazine reports in its August 2010 issue.

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. ...

To make their criminal enterprises work, the drug cartels of Mexico need to move billions of dollars across borders. That's how they finance the purchase of drugs, planes, weapons and safe houses, Senator Gonzalez says.

"They are multinational businesses, after all," says Gonzalez, as he slowly loads his revolver at his desk in his Mexico City office. "And they cannot work without a bank."

To contact the reporter on this story: Michael Smith in Santiago, Chile, at

(17) Drug money "liquid investment capital", saved banks from collapse during GFC - UN advisor

Drug money saved banks in global crisis, claims UN advisor

Drugs and crime chief says $352bn in criminal proceeds was effectively laundered by financial institutions

Rajeev Syal

The Observer, Sunday 13 December 2009

Drugs money worth billions of dollars kept the financial system afloat at the height of the global crisis, the United Nations' drugs and crime tsar has told the Observer.

Antonio Maria Costa, head of the UN Office on Drugs and Crime, said 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.

This will raise questions about crime's influence on the economic system at times of crisis. It will also prompt further examination of the banking sector as world leaders, including Barack Obama and Gordon Brown, call for new International Monetary Fund regulations. Speaking from his office in Vienna, Costa said evidence that illegal money was being absorbed into the financial system was first drawn to his attention by intelligence agencies and prosecutors around 18 months ago. "In many instances, 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," he said.

Some of the evidence put before his office indicated that gang money was used to save some banks from collapse when lending seized up, he said.

"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." Costa declined to identify countries or banks that may have received any drugs money, saying that would be inappropriate because his office is supposed to address the problem, not apportion blame. But he said the money is now a part of the official system and had been effectively laundered.

"That was the moment [last year] when the system was basically paralysed because of the unwillingness of banks to lend money to one another. The progressive liquidisation to the system and the progressive improvement by some banks of their share values [has meant that] the problem [of illegal money] has become much less serious than it was," he said.

The IMF estimated that large US and European banks lost more than $1tn on toxic assets and from bad loans from January 2007 to September 2009 and more than 200 mortgage lenders went bankrupt. Many major institutions either failed, were acquired under duress, or were subject to government takeover.

Gangs are now believed to make most of their profits from the drugs trade and are estimated to be worth £352bn, the UN says. They have traditionally kept proceeds in cash or moved it offshore to hide it from the authorities. It is understood that evidence that drug money has flowed into banks came from officials in Britain, Switzerland, Italy and the US.

British bankers would want to see any evidence that Costa has to back his claims. A British Bankers' Association spokesman said: "We have not been party to any regulatory dialogue that would support a theory of this kind. There was clearly a lack of liquidity in the system and to a large degree this was filled by the intervention of central banks."

(18) Merrill Lynch and Bear Stearns laundered drug money

Strauss-Kahn: Bad "Timing" for His Alleged Crime

By Edward Manfredonia

06-03-11 Strauss-Kahn...the Frenchman might have eluded the arms of the law years ago

In another era Dominique Strauss-Kahn might have gotten away.

In a previous column,"Strauss-Kahn: No Friends In the Right Places In New York," which was published in The Black Star News On May 25, 2011, I contrasted the different treatment accorded by two different Manhattan District Attorneys --over different periods-- to two individuals suspected of rape and sexual assault.

Dominique Strauss-Kahn, former Managing Director of the International Monetary Fund and a leading French Socialist, has denied sexually assaulting an African maid at the Sofitel Hotel.

Robert VanCaneghan, a member of the Board of the American Stock Exchange, admitted to members of the Board of the American Stock Exchange, that he had sexually assaulted his female employees.

The District Attorney at the time was Robert Morgenthau-- today the DA is Cyrus Vance Jr.

The members of the Board of the Amex at the time of VanCaneghan's transgressions, included such luminaries as Harvey Silverman, a billionaire and managing director of Spear Leeds and Kellogg; Paul Volcker, former Chairman of the Federal Reserve System, Burton Malkiel, Professor of Finance at Princeton; and Martin Feldstein, Professor of Economics at Harvard University. The board did not press an investigation of VanCaneghan.

In this they were fully backed by Arthur Levitt, former Chairman of the American Stock Exchange and then soon to be Chairman of the Securities and Exchange Commission at the time, and Mary Schapiro, then acting Chair of the Securities and Exchange Commission. (Levitt, incidentally, raised in excess of $4 million for Bill Clinton's first Presidential campaign.)

The tentacles of the octopus were beginning to spread and encompass the power elite of New York City.

There was also no action taken by the United States Attorney for the Southern District of New York at the time, Mary Jo White, a former partner in Debevoise and Plimpton. For many years the Amex had been ably represented by Robert Carswell of Shearman and Sterling. But the Amex wanted a law firm, which was more politically connected--so in 1992 the Amex approached Debevoise and Plimpton.

There was at the time a stock fruad that involved elements of the Italian mafia and it also involved several players: Two members of the Amex Board, Louis Miceli and Robert VanCaneghan; Steven Lister, Senior Vice President of Compliance at the Amex; and Al Avasso, a former Amex member who was barred from the securities business for falsifying options trades. (This will be covered in another series of columns.)

The Amex through its examination of the financial statements of the Amex specialist firm, Miceli-VanCaneghan, as required by federal statute knew that Miceli and VanCaneghan were laundering drug money via their specialist account at Spear Leeds and Kellogg, which was represented on the Amex Board by Harvey Silverman.

At the time drug money laundering on Wall Street by firms was not unusual. Merrill Lynch was laundering drug money via its Wagner Stott subsidiary; and Bear Stearns had laundered drug money for VanCaneghan and Miceli before they changed their clearing firm to Spear Leeds and Kellogg.

The federal government became aware of all these activities described above --I wrote detailed letters and sent them via certified mail to relevant federal officials. I even participated in an operation together with the FBI in gathering information about some of the crimes.

On the other side however were powerful institutions such as the Securities and Exchange Commission, then led by Levitt and Schapiro.

With such prevailing permissive environment, who could be surprised by the eventual financial crises on Wall Street and subsequently globally?

Manfredonia was a Wall Street trader who was thrown out and banished from the street after he became a whistleblower.

(19) Assange yet to deliver on promise to leak Bank of America corrupt dealings

WikiLeaks founder Julian Assange: we'll leak corrupt dealings of a major US bank

From: Denver Media Service <> Date: 30.11.2010 10:54 AM

WikiLeaks founder Julian Assange: Our next leak will expose secrets of a major financial institution


Monday, November 29th 2010, 9:30 PM

After spilling information on everything from the love life of a dictator to top state secrets, WikiLeaks has a new target: a major U.S. financial firm.

In an interview with Forbes published on Monday, WikiLeaks founder Julian Assange said the site would release tens of thousands of documents in early 2011 that he claimed would be comparable to the Enron trial.

"It will give a true and representative insight into how banks behave at the executive level in a way that will stimulate investigations and reforms, I presume," he promised.Assange confirmed to Forbes that the upcoming leaks were about a U.S.-based financial institution, but refused to give any more detail about which bank it was.

While WikiLeaks made its name on publishing secret military and government documents, Assange says he has a huge amount of documents revealing private sector secrets too ­ in fact, he told Forbes, 50 percent of "whistleblower" submissions he has received are non-governmental documents.

The WikiLeaks founder warns that the next batch of documents he'll release will reveal flagrant violations, unethical practices and internal executive decision making structures.

"You could call it the ecosystem of corruption," he told Forbes. ... ==

Exclusive: Assange suggests bank documents are a snore

LONDON (Reuters) -The bombshell that WikiLeaks founder Julian Assange has said could "take down a bank or two" may in fact be something of a dud.

By Mark Hosenball

LONDON | Wed Feb 9, 2011 5:02pm EST

[...] In the Forbes interview, Assange wouldn't identify which U.S. bank the material came from. ...

But in an interview with Computerworld magazine in October, 2009, he said "We are sitting on 5GB from Bank of America, one of the executive's hard drives."

(20) Pentagon using Drug Wars as excuse to build Bases in Latin America

From: Sadanand, Nanjundiah (Physics Earth Sciences) <> Date: 07.06.2011 01:18 PM

Sunday 5 June 2011 by: John Lindsay-Poland, New America Media

Under the auspices of the drug war, the United States is returning to its historical pattern of using Central America and the Caribbean for its own military and strategic purposes.

Even as a growing chorus of voices throughout Latin America argue that military responses to drug trafficking are ineffective against the narcotics trade and exacerbate existing human rights abuses and official corruption, the U.S. military presence in the region is growing.

U.S. military construction in Central and South America has more than doubled in the last two years, while a U.S. buildup on military bases in Colombia continues, despite a Colombian court ruling last summer that struck down an agreement for U.S. use of the bases.

Construction of military facilities is slated for this summer in Guatemala, Nicaragua, Ecuador and Belize, funded from an account for "counter-narco-terrorism" operated by the U.S. Southern Command (SouthCom), the Pentagon's operations arm for Latin America, according to the Army Corps on Engineers plans. But the biggest Pentagon investments are in Panama and at the U.S. air base in Soto Cano, Honduras. [see interactive map for details]

The surge in U.S. military investment in the region parallels statements by SouthCom commanderDouglas Fraser that the triangle formed by Honduras, El Salvador and Guatemala "is possibly the most violent place on Earth today." ...

(21) Russian gangsters arrested in Spain after bragging that they "bought" the Uefa Cup

The Sweeper: Diego Tristan, Mark Viduka, Sol Campbell

Matt Dickinson, Chief Sports Correspondent

October 2, 2008

[...] Russian gangsters have been arrested in Spain after bragging that they "bought" the Uefa Cup for Zenit St Petersburg in May. In phone calls tapped by police, Gennadios Petrov, the head of an underworld gang, claimed that up to ¤ 40 million (about £31.6 million) in bribes was spent to ensure victory in the semi-final matches against Bayern Munich and the final against Rangers.

(22) Spanish construction boom was paid for by Russian mafiosi - to launder money

From: ReporterNotebook <> Date: 02.12.2010 08:41 AM Subject: The Russian mafia in Spain From: Manuel Sotil <>

The Russian mafia in Spain

Manuel Sotil <>

DEC 1, 2010

The traveler / tourist in Spain, will not fail to notice the number of modern buildings that are half or totally empty.

In the last 10+ years, there has been a construction and real estate boom in Spain similar to the construction / real estate bubble that busted here in the US. The preferred mode of ownership is the condominium, usually in high rise building.

The cost of such units is not cheap. In the Madrid area (suburbs) for instance, a condominium unit of about 1,000 square feet will easily go from 300,000 euros (and up). Looking at the newspaper ads, one will find plenty of units for sale, but little if any is being given away.

The difference is that in Spain, there are no distress sales, no fire-sales or foreclosures that visible to the casual observer. Banks have been severely affected by their (one can say greedy or ill advised) purchase of garbage "AAA" US securities, like those packaged by Goldman Sachs, but not because of reckless real estate loans. So it appears that the housing units will sit there until eventually buyers show up with money in their hands.

The reason for this is that much of that construction boom was paid for in cash by Russian mafiosi. They are just laundering and parking money, even though they probably were not planning on waiting that long for their money to come out of the laundry. So the building boom was paid for in cash (brought in suitcases into the country?). No construction / real estate loans.

Spanish authorities have arrested more than 60 suspects, including the top four mafia bosses outside Russia. ...

(23) Russian Mafia in Spain used bank accounts to launder money; boss's wife ran a Berlin bank

The Russian Mafia in Spain: Operation Troika

Posted by Gangsters Inc. on November 3, 2010 at 2:39pm

By David Amoruso

Posted on November 9, 2008

Copyright ©

Every Friday the 13th people will remind you that it is a day you need to be extra careful. That particular day brings bad luck. Countless of horror movies have etched that belief into our brains. Of course every now and then some people will actually have a very bad day on Friday the 13th. People like the twenty members of an organized crime group from St Petersburg, Russia who were living the good life in sunny Spain.

On that Friday the 13th of June 2008, in an operation named "Troika", hundreds of Spanish police officers raided several locations throughout Spain. Police were looking for some very rich and very feared Russian men that were said to be part of the Tambovskaya-Malyshevkaya gang that has its origin in St Petersburg and its surrounding villages.

The leader of the group is said to be Alexander Malyshev who moved to Malaga, Spain in the early 2000s. His organization was fighting a war for control of the St Petersburg underworld, and after several attempts on his life Malyshev decided he needed to find a safer place to spend his spare time. That is not to say that this kind of stress was new to him. In the past he has been charged with murders, gangsterism and illegal possession of weapons. Safe to say he had enough of the dangerous and cold life in Russia.

His alleged 'underboss' is Mikhail Rabo. Besides being the gang's second in command he also represented their interests in Germany from his base in Berlin. Rabo was arrested near his office in West Berlin and charged with money laundering, falsifying corporate documents and racketeering.

The third top dog of this Russian Mafia group is Gennady Petrov. Like Malyshev Petrov, too, was arrested in Spain. Petrov and Malyshev were living as kings in Spain. And Rabo was living just as luxurious in Germany, with slightly worse weather of course. ...

The group is alleged to have used five-hundred bank accounts to launder tens of millions euros a year. Money that was earned back in St Petersburg where the group is involved in drug dealing, the hotel and restaurant business, and had a lot of influence over banking institutions. Mikhail Rabo's wife heads the Berlin branch of a Latvian Parex Bank. ...

(24) Expatriate Russian mafia is mostly Jewish, uses Israel as haven; it has no money-laundering laws

Johnson's Russia List #4695 18 December 2000

#9 The New York Review of Books November 16, 2000 The Russians Are Coming! By RAYMOND BONNER [DJ: Footnotes not here.]

Red Mafiya: How the Russian Mob Has Invaded America by Robert I. Friedman 296 pages, $25.95 (hardcover) published by Little, Brown

Robert Friedman's book is the first to describe in detail the Russian mobsters who have established criminal enterprises throughout the world. ...

The "Russian mafia," as Friedman describes it, is not a single organization, but rather a catchall phrase for mobsters who come from the former Soviet Union. ...

It is often said that Russian mobsters started to become active internationally when the Berlin Wall came down and the Soviet Union disintegrated. But Friedman traces their beginnings back to the 1970s, when the Soviet Union, under pressure from Washington, permitted Jews to emigrate. The Communist leaders, Friedman writes, "took this opportunity to empty its jails of thousands of hard-core criminals, dumping vast numbers of undesirables...on an unsuspecting America, as well as on Israel and other Western nations." ...

Along with thousands of legitimate Russian-Jewish immigrants, these and other criminals established their first base in Brighton Beach in Brooklyn. From there they moved on to Miami, in a big way, and to a lesser degree to Los Angeles. ...

Such tales about the criminal escapades of the Russian mobsters raise the question of what is being done to combat them. ... In general, Friedman writes,

state and federal law enforcement agencies were loath to go after Russian mobsters, instead devoting their energies to bagging Italian wiseguys, a traditional route to promotion. And because the Russian mob was mostly Jewish, it was a political hot potato, especially in the New York area, where the vast majority of refugees were being resettled by Jewish welfare agencies. ...

Whatever the American laws, a successful campaign against Russian mobsters will require the cooperation of other governments, particularly those of Russia and Israel, the two countries that are now the principal residences of most Russian crime bosses. ...

"Of all the nations where the Russian mob has established a presence, none has been more deeply compromised than the State of Israel," Friedman writes, adding that the Russian mafia has "become a grave threat to the stability of Israel." Although this may be a bit hyperbolic, the Russian mafia does have a strong, safe base in Israel - a story that American and Israeli journalists have largely overlooked. One FBI report observes, for example, that most members of Mogilevich's criminal organization have Israeli passports. And Jonathan Winer told Friedman (when Winer was still the State Department's crime expert), "There is not a major Russian organized crime figure whom we are tracking who does not also carry an Israeli passport."

The Russian mobsters have taken advantage of the right of any Jew to become an Israeli citizen, and of the country's desire to attract capital. Israel has no money-laundering laws. Its open banking system, a US official told me, was "developed for good motives," but was "perverted by the Russian mafia types. One could pick up a passport and a bank account, and operate like you couldn't in the rest of the Western world." ...

In Israel, the Russian mob leaders have bought protection from senior government officials, and have poured so much money into political campaigns there that they have been able to name candidates for local and national office. The admired former Soviet dissident Natan Sharansky, who has become active in Israeli politics, has admitted taking campaign contributions from Nordex, in spite of pleas from American officials to cut his links with Loutchansky.

When Loutchansky invited a list of prominent Russian mobsters to his birthday party in Israel in 1996, the Israeli police began to grow alarmed. And an Israeli police official told me that they have begun to look more closely at how the Russian mobsters got their citizenship. A naturalized Israeli citizen can't be deprived of citizenship if he commits a felony, but he can if he has obtained that citizenship by fraud, such as falsely claiming to have Jewish ancestors. Late last year, the Israelis revoked the citizenship of Sergei Mikhailov, the mob leader acquitted in Switzerland; an Israeli police official recently told me that others' will also be revoked. ... ==,7340,L-3559177,00.html

Former senior member of Berlin Jewish community arrested for allegedly heading one of Russia's largest organized crime groups

Published: 06.23.08, 14:48 / Israel Jewish Scene

Eldad Beck

BERLIN ­ Mikhail Rabo was a senior member of the Jewish community in Berlin and for a short while even represented it in Germany's Jewish communities committee. But it seems Rabo was also busy heading another organization ­ the Russian mob.

Rabo, 55, was arrested last Thursday in Germany's capital under a European arrest warrant issued against him following a large-scale raid on 20 Russian mobsters in Spain commissioned by the Spanish police.

During the extensive police operation, the Berlin police detained 20 members of the Tambov-Malyshev (Tambovskaya-Malyshevskaya) gang, considered the largest mafia organization in Russia and one of the four largest organized crime organizations in the world. According to German newspapers, Rabo was the gang's deputy chief as well as its Berlin representative.

(25) The Jewish Laundry of Drug Money - from Maariv, September 2, 1994, translated by Israel Shahak

Foreword by Israel Shahak

In contrast to the lack of any meaningful discussion of the organized American Jews and their power, which in my view is due to their great political influence in general and their predominance in the media in particular, the Hebrew press does not have such inhibitions. This is due, among other reasons, also to the fact that the power of the State of Israel depends to a considerable extent on its ability to use the organized American Jews and their power for its own interests. The first article translated here describes the power of the Jews at what can be described as Clinton's court. The second describes the predominant part which the Haredi [ultrapious] New York Jews play in laundering the drug money. Their ability to do so for quite a long time with relative impunity is connected in my opinion with the great political influence or the Jews described in the first article

All notes mine.

Israel Shahak

The Jewish Laundry of Drug Money

By: Maariv´s New York correspondent Ben Kaspit

Maariv, Tel Aviv, September 2, 1994

Rabbi Yosef Crozer fell because of his big mouth. "I launder money, a lot of money", he once told an acquaintance. "Every day I take $300,000 from 47 Street in Manhattan, bring it to the synagogue, give a receipt and then take a commission". The man who heard that story from Crozer was, how sad, an undercover Jewish agent of the U.S. agency for fighting drug use, DEA. A month later, in February 1990, Crozer was arrested by agents on his way from 47 Street to Brooklyn. They found on him prayer books, five passports, and also $280.000 dollars in cash in the trunk of his car. He traveled that route every day. He would arrive at the gold trading oflice on 47 Street in the afternoon, and leave shortly later, carrying suitcases and bags loaded with cash. From there he drove to the "Hessed Ve'Tzadaka" ["Mercy and Charity"] synagogue in Brooklyn, which was turned into an instrument for laundering millions of dollars, the revenue from drug sales in the New York area.

That was how Crozer made his living. Assuming that the commission for laundering money ranged in the area of 2-6%, Rabbi Crozer can be presumed not to have suffered from hunger. The investigators who questioned him faced a simple task, A respectable and pious Jew who never imagined that he will be interrogated, a son of a highly respected rabbi who headed a large yeshiva in city of New Square, Crozer broke down and cooperated. But then his lawyer, Stanley Lupkin, argued that his client, a pious Jew, had no idea that he was laundering drug money. Crozer, according to his lawyer, believed that he was laundering money for a Jewish diamond trader "who trades in cash and not for Gentile drug traders, and was using the situation to make some extra money just for his synagogue. It seems that this argument had some effect since Crozer was sentenced to one year and one day imprisonment. In exchange for a lenient sentence, he supplied his interrogators with valuable information which helped them to capture a person whom they had been seeking for a long time: Avraham Sharir, another pious Jew, the owner of a gold trading office on 47 Street, who was really one of the biggest sharks of laundering drug money in New York City. Sharir, an Israeli Jew aged about 45, to whom we will later return, subsequently confessed to having laundered $200 million for the Colombian drug cartel of Kali.

The drug trade is considered to be tbe most profitable branch of crime in the world. The profit margin ranges in the area of 200% for cocaine and 1, 200% for heroin. The amounts of money circulated in the branch are larger than the budgets of many small states. The temptation is great. The main problem of the Colombian drug barons who control a significant part of world drug trade is how to get rid of the money. It is a problem of the rich, but a nagging one. Two major Colombian drug cartels operate in the U.S.: the Kali cartel and the Medellin cartel. The killing of the head of the Medellin cartel, Pablo Escovar, by Colombian authorities in December 1993, greatly weakened this cartel, which had controlled the drug trade in the New York area. The Kali people, in contrast, hold a monopoly over the Los Angeles and Miami area markets. At present, the Kali people distribute about 80% of the world's cocaine and a third of heroin. The Kali drug cartel makes $25 billion each year within the U.S. alone. The money must somehow be shipped out of the U.S. without arousing the attention of the American authorities. Besides, the cash must be given a seal of approval and, one way or another, become legitimized. Around this complex issue a mega-business has sprung up: laundering and smuggling drug money. American customs investigators have found millions of dollars in containers supposed to have contained dried peas, in double-sided gas tanks, in steel boxes attached to freight ships. In 1990 they found $14 million in cash in a shipment of cables, supposed to have been sent from a Long Island warehouse to Colombia. According to records found on the site, that was shipment no.234 (multiplied by 14 million, calculate it yourselves). The same year, at Kennedy Airport, in a warehouse, 26 large containers were found which were supposed to have contained bull sperm. The latter was not there, but there were $6.5 million. In May of this year American investigators raided a bowling ball plant in Long Island. They picked the balls, cut them in half and found within 210,000 dollars, in used $100 bills.

Despite their active imagination, the drug barons find it hard to keep up. $25 billion is a lot of money and it must fill a lot of space, since most of the money gained in drug deals conies in bills of $10-20. And that is how the match was made between the drug cartels and the 47 Street in Manhattan, That street is the world center for trading diamonds, gold, jewels and precious stones. Hundreds of businesses are crowded in there, between Fifth and Sixth Avenue, Shops, businesses, display halls. In the back rooms and on the top floors, far from public access, the action takes place. That is where the major traders sit, that is where the deals are made. Diamonds, gold and jewels pass from hand to hand, with a handshake. The frantic activity there offers an ideal cover for illegal transfers of money. "In fact, even legitimate business appears, on 47 Street, to be dark and mysterious", said a customs official. "Merchandise arrives constantly, boxes, suitcases and packages are constantly opened, everything arrives in armored cars, under heavy security and a shield of secrecy. Now, go find the black money".

"The match between the drug barons and 47 Street", an American customs investigator told "Maariv", " is ideal." The gold and diamonds industry circulates large amounts of cash. The diamond traders are accustomed to transporting large amounts of money in cash, from one state to another, efficiently and without leaving a trace. Large amounts of money pass from hand to hand on 47 Street, without arousing suspicion. A diamond trader might launder $5 million every day, without arousing special attention. It is difficult to monitor the deals, to locate the sources of the money and it is very difficult to infiltrate that closed field, which is based on personal acquaintance and trust. Added to it is the fact that in the course of the past five years, the diamond industry on 47 Street has been in a deep slump, which led many traders into bankruptcy. "A trader like that", said an investigator, "faces the choice of bankruptcy or making easy, quick and relatively safe money. Not everyone is strong enough to withstand the temptation".

All of that would not have been of interest to us if not for the massive Israeli or Jewish presence on 47 Street. "At least 50% of the diamond traders there are Israelis", so an Israeli diamond merchant who wishes to remain anonymous, told "Maariv.". 'Not a few Israelis also operate in the field of jewels, precious stones and gold. All of them came to New York to make fast money, conquer the market, get their big break. Not all of them succeeded, especially not recently". But Jewish presence on 47 Street is much greater than that. Experts in the field estimate that 75-80% of the active traders on the street are Jews. A large part of them are very talous Orthodox Jews, mainly Hassids. There is also a respectable representation of Jews from Iran and Syria, usually also very pious. One can get along fine in Hebrew on 47 Street. There are many more kosher restaurants in the area than in the entire Tel-Aviv. The place is also the biggest laundry for drug money in the U.S..

The expansion of the phenomenon of laundering drug money in the U.S. in general and on 47 Street in particular, led to the establishment of a special American task force, to combat the phenomenon. The unit is called Eldorado ... The target of the Eldorado agents is money, and money alone. They are not interested in drug imports, drug deals or drug dealers. "We want to put our hands on the money. To hit their pockets", say members of the unit.

The task is difficult. In America there is no law that prohibits possessing money. On the other hand, when a large amount of cash is found in the possession of a launderer, the agents confiscate the money. If the person can prove that the source of the money was legitimate, he gets it back. That does not happen. The launderers are experienced. When one of them is caught and several million dollars are found in his possession, he willingly hands over the money, but asks for a receipt. "The money is not mine, I want you to confirm that you took it," is the common request. Incidently, their lives depend on that receipt. It is not a simple matter to trail them. The eyes of a typical launderer are glued to his rear-view mirror. He makes sudden stops, moves from one lane to another, chooses long and twisted routes from one place to another. Eldorado has an answer. The investigators follow their targets with eight, ten, sometimes 12 vehicles. If necessary they use one or two helicopters. There is also sophisticated equipment, the wonders of American technology in the fields of tapping. surveillance and code-breaking. In the first two years of its operations, Eldorado captured 60 million dollars and arrested 120 launderers. Compared to the scope of overall laundering, that is peanuts. "That is not the point," say the Eldorado agents. "Obviously, it is impossible, with the existing legal restrictions, to put an end to the phenomenon. Our warfare is psychological". Incidently, Eldorado is not the only agency combatting money laundering. The DEA, the American Drug Enforcement Agency, and the FBI, also conduct lively activity in that field. Not always is that activity coordinated.

In recent months the Eldorado agents discovered a new center of operations. It is termed The Cocaine Triangle. Its sides are: Colombian drug barons, Israeli-Jewish money launderers. Jewish-Russian mafiosi. The Colombians funnel the money, the Israelis launder it, the Russian mafiosi (who have recently overrun New York in droves), provide the security and the muscle. A New York journalist recently told "Ma'ariv"; "The Israeli Jews are gaining notoriety in the money laundering market. You need only look at the list of arrests and the inditements of the past 3 years, in order to grasp the enormous scope of Israeli involvement in that field".

One reason for the growing power of the Jews in the laundering drug money business is the Law of Return with its easy possibility of escape to Israel. In May 1993, five members of Jewish international laundering which had worked with the Kali cartel were arrested. The ring was exposed following an FBI 'sting' operation ...

In the course of the investigation, FBI agents recorded hundreds of hours of conversations in Hebrew among the Israeli suspects. For the purpose of translating the material, they employed, among others, Neil Elefant, a Jewish resident of New Jersey who had lived in Israel for some time and who spoke fluent Hebrew. Elefant translated and translated, until one day in May 1992 he was amazed to discover among the speakers a friend, Jack Zbeida, an Jewish antique dealer from Brooklyn. Elefant was in a difficult dilemma. He approached his rabbi, Elazar Teitz, who told him that his religious duty is to warn Zbeida. Elefant then secretly met Zbeida and told him that he was targetted by the FBI. Alex Ajami, an Israeli Jew who was one the heads of the gang, was also present. Zbeida and Ajami hurried to the FBI offering to cooperate, turning in Elefant, who was arrested and charged with interfering with legal procedures. He argued that one of the reasons for his decision to warn Zbeida was the zealousness, almosst approaching anti-Semitism, which he found among the FBI agents trying to involve State of Israel in drug affairs. Judge Kevin Duffy sentenced Elefant to 18 months imprisonment. In the meantime the FBI was forced to hurriedly arrest all those involved in the affair. In spite of the hurry, many involved Israeli Jews fled to Israel. Some few of the tens Israeli and American Jews who fled on this occasion to Israel are: Raymond Shoshana, Adi Tal, David Va'anunu, his nephew Yishai Vanunu, Ya'akov Cohen. Most of them came out of the affair with a lot of money which they also took to Israel. The Americans know that the chances of any one of them being extradited to the U.S. are close to nil. ...

An important member of Tal's laundering ring was Rabbi Shalom Leviatan, a Lubavitch Hassid, head of the branch in Seattle. It is assumed that all the considerable political power of of these Hassids and of their rebbe (then alive), were exerted in favor of that laundering ring. "My intentions were good" Leviatan said after he was captured. "A person learns from experience", he added. According to him, he did not know that he was laundering drug money, and he was certain that he helps Iranian Jews trying to smuggle their money out of Iran. Leviatan got out cheaply and was sentenced to 30 days community service. Tal, who confessed to laundering $10 million, was sentenced to 52 months imprisonment. He served his sentence at Danbury jail in Connecticut, but did not learn his lesson. When he was released, he joined a gang which was captured in the FBI's 'sting' operation. This time he managed to flee to Israel where he apparently remains, to this day.

The gold and diamond industry has recently become the favorite of the drug barons, due to the numerous possibilities for laundering which it contains. One of the popular methods is laundering by means of trading in gold. This is how it works: the drug money is converted into gold, which is smuggled to Colombia, from where it is exported to Milano and used to make jewellry which then legitimately returns to 47 Street. "The funniest thing in this business", say the investigators, "is that the jewellry comes here under favored import conditions because the gold seemingly originates from Colombia, and that state has favored trade conditions with the U.S." There are also other methods. Drug money is deposited in the accounts of diamond merchants as though it were their profits and is later transferred to Colombia. Sophisticated diamond deals are made between various parties with the aim of 'releasing' large amounts of money on the side. Sums of less than $10,000 are deposited in various bank accounts, converted into travellers' checks and are then transported to their final destination. But in spite of the ingenuity, undoubtedly one of the most popular and successful ways to launder money is through Jewish religious institutions, such as yeshivas and synagogues. Since the majority of the 47 Street gold and diamond merchants are religious Jews the process is made easier. The Jewish religious institutions badly need funds. The Colombians drug traders can be generous. They transfer their drug money "us {should be "as"} donations, which go to the Jewish religious institutions one way and come out by the other way back to the donors. On the way the synagogue or yeshiva obtain a respectable percentage for its pious uses. Everyone is happy: the drug barons who launder their money quickly and efficiently and the synagogue or yeshiva which makes easy money.

The first laundering operation in which a Jewish institute in New York was involved was exposed already in 1984. A ring which laundered about $23 million while making a profit of $2 million operated at the oldest yeshiva in the city, "Tifereth Yerushalayim", located in Manhattan. The laundering was performed for the Kali cartel. The contact man was David Va'anunu, mentioned in the context of the Prism affair, who worked with the cartel's major launderer, Jose Sairo. The yeshiva's representative was a very pious Hassid, Mendel Goldenberger who daily received cash from Va'anunu and deposited the money in the yeshiva's accounts. Goldenberger, who claimed not to have known the source of the money, was convicted of forging bank documents and given five years suspended imprisonment. Vanunu was convicted, sentenced to eight years imprisonment but released much earlier after he became an informer for the DEA. Later, as was stated, he ran into trouble again and fled the U.S.. Nine persons were convicted in that affair, including Rabbi Israel Eidelman, Vice President of the yeshiva, and some of its dignitaries. Tiferet Yerushalayim faced financial difficulties at that time. Its leaders attempted to maintain the number of students by paying them from the laundering drug profits.

That phenomenon, incidently, is very common among the New York Jews. Many Jewish congregations are dying out because their members are leaving the city or their former neighborhoods. Thus, they are losing their sources of income and facing large debts. In that situation the road is short for the synagogue or yeshiva to launder drug money as a pious duty, since it means easy money, and lots of it. "Laundering money is extremely beneficial to the yeshivas and other Jewish religious institutions", said a source close to the investigation. "They are in a difficult situation and therefore they turn a blind eye to the drug problem. They don't ask what is the source of the money as long as it keeps coming in". The attitude of the pious Jewish community, according to the same source, is "drugs are sold anyway. As long as it does not harm our own community and only does good for it, it doesn't matter if we benefit from drug trade". The role of the Israel is is, in many cases, to make the connection between the religious Jewish communities of New York and the Colombians.

The Colombians are more satisfied with this method of laundering than with any other because, for political reasons, it is a relatively secure way which could be assumed initially not to be forcibly investigated by the U.S. authorities. Only in July 1990 the situation began to change. The Federal authorities renewed an investigation of some Williamsburg's Hassids, owners of jewellry shops on 47 Street, who were suspected of laundering drug money. The investigation focussed on brothers Naftali, Miklosh and Yitzhak Shlesinger, and on Ya'akov Shlesinger (Naftali's son) and Milon Jakoby his nephew. The investigators found evidence of close connections between the Shlesingers and the Andonian brothers, members of a Colombian family accused of laundering almost one billion dollars. The Shlesingers were suspected of laundering money by means of a subsidiary called Bali, through checks drawn from the account of "Camp Yereim" [Camp of the Pious"] - a Hassidic summer camp in the Catskills. Camp Yereim denies any connection with those checks. On April 7 of this year, Rabbi Abraham Lau, a prominent Hassid from "Magen Abraham" synagogue in Los Angeles was convicted of conspiring to launder drug money. Lau is married to the niece of the Satmar Rebbe, Moshe Teitlebaum who wields enormous political influence in New York State. Unfortunately, Lau told an undercover FBI agent about a "sacred network" of Satmar Hassids in which other Orthodox Jews had also participated. The "sacred network", whose membership was strictly limited to pious Jews, operated in the 47 Street area in New York and was capable of laundering up to $5 million weekly, thanks to its widespread contacts with Jewish charitable institutions.

Unfortunately, law enforcement agents in New York do not believe that the "sacred network" and the many other Jewish laundering rings have any sanctity. In the past year the Federal activity concerning Israelis and Jews on 47 Street has greatly increased. The investigators now employ the services of many Hebrew translators since the rings, even if composed of native American Jews, employ only "the sacred language" (i.e. Hebrew] for their operations. ...


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