Too-big-to-fail is a much bigger problem than you thought. We've all read damning accounts of the government saving banks from their risky subprime bets, but it turns out that the Wall Street privilege problem is far more deeply ingrained in the U.S. legal system than the simple bailouts witnessed in 2008. America's largest banks can engage in flagrantly criminal activity on a massive scale and emerge almost completely unscathed. The latest sickening example comes from Wachovia Bank: Accused of laundering $380 billion in Mexican drug cartel money, the financial behemoth is expected to emerge with nothing more than a slap on the wrist thanks to an official government policy which protects megabanks from criminal charges.
Bloomberg's Michael Smith has penned a devastating expose detailing Wachovia's drug-money operations and the government's twisted response. The bank was moving money behind literally tons of cocaine from violent drug cartels. It wasn't an accident. Internal whistleblowers at Wachovia warned that the bank was laundering drug money, higher-ups at the bank actively looked the other way in order to score bigger profits, and the U.S. government is about to let everyone involved get off scott free. The bank will not be indicted, because it is official government policy not to prosecute megabanks. From Smith's story:
No big U.S. bank . . . has ever been indicted for violating the Bank Secrecy Act or any other federal law. Instead, the Justice Department settles criminal charges by using deferred-prosecution agreements, in which a bank pays a fine and promises not to break the law again . . . . Large banks are protected from indictments by a variant of the too-big-to-fail theory. Indicting a big bank could trigger a mad dash by investors to dump shares and cause panic in financial markets.
This is several steps beyond what most of us think about when we debate too-big-to-fail. The government isn't shielding Wachovia from losses on risky bets in the capital markets casinos-- it's shielding the bank from the prosecution of outright criminal behavior. The drug money business did not pose risks to the financial system, and Wachovia wasn't losing money on it. Wachovia is simply being shielded from what ought to be the ordinary functioning of the justice system.
Think about what would happen if you or I were accused of laundering $380 billion in drug money. We could not simply settle the allegations out of court in exchange for an apology and a fine. We'd spend the rest of our lives in jail for financing a ruthless, bloody and illegal business. About 22,000 people have been killed in the Mexican drug trade since 2006, and the drug trade itself can't happen without extensive money laundering operations. Moving the money is one of the most difficult and critical elements of any criminal enterprise--without ways to convert crooked cash into seemingly innocuous funds, crooks simply can't operate. Wachovia was doing top-level dirty work for drug dealers.
On the streets of American cities, the mere possession of these drugs can land you with a multi-year prison sentence. But financing multi-billion-dollar drug empires? Don't do it again, pretty please.
Too-big-to-fail isn't just a matter of systemic risk and mathematical models gone haywire, It's about the basic functioning of our democracy. You cannot have a functional democracy in which an entire privileged class of bankers can get away with anything--and if you can get away with laundering hundreds of billions of dollars in drug money, there's not much you can't get away with.
Congress is poised to pass a decent Wall Street reform bill, but that legislation will not end this criminal imbalance. If the bill will really end too-big-to-fail, the Justice Department could immediately end its special immunity policies for large financial institutions. That isn't going to happen. The public deserves tougher prosecutors, but we also need further legislation to break up the megabanks so that they can't use their economic clout to bully everyone in Washington.
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AIG has also been accused of money laundering for organized crime. I know, I am one of their accuser and am on file with the Justice Department and the FBI as having made those accusations.
It boggles the mind that the press has up until now not given this issue more coverage. The Bloomberg article and this article are a good first start.
I can guarantee the government would have treated Wachovia very differently if it had been aiding Al Qaeda operating thousands of miles away than is it treating the Bank for aiding the drug cartels that are slaughtering people right on the other side of our border. I think that anti-terrorism, not anti-money laundering, laws should apply.
As backdrop, and despite lacking mention as to its timeframe, one is able to discern the magnitude of money laundered by Wachovia Bank nonetheless – representing a whopping 119% of 2009’s annual illicit-drug trade industry. Meanwhile, much negative media impressions are bantered about concerning foreign narco-politico governments while America’s banking systems act as a huge washing machine accruing billions in US dollars of ill-gotten gains to banksters.
It should come as little surprise considering the US knowingly spent US$783 million per 1994 Rand study on foreign illegal-drug eradication/interdiction efforts for every US$34 million it could spend on achieving a 1% success rate with drug treatment. Yes, 20 times more was spent on a failed strategy whilst 50% of 12th grade students in 1999 reported "fairly easy" or "very easy" access to cocaine if they wished, up from 33 percent in 1975.
Once more proving the War on Drugs serves more masters than one. Where drugs, wars and weapons situate – global bankers circle like vultures.
All of the giant corporations must be broken up, just as we did to Bell Telephone back in the day. New laws would restrict the size a company can grow to before it would be forced to break up. The idea of capitalism must be reframed with humans and the environment at the center.
WIth banks, the idea of unfettered corporate greed, and capitalism, finds it's most heinous expression. The FED controls the value of the dollar, the banks control the flow of the dollars, and the growth of capital through interest.
We now see, since the so-called liquidity crisis, that the bedrock of our financial system is actually the trade in illegal drugs. The best, most popular drugs, the ones that give relief from pain, depression, and apathy, are tightly controlled by a consortium of drug cartels, bank cartels and military/intelligence operations.
The way the system is rigged, the average person doesn't have much chance these days. We are watching our democracy be destroyed minute by minute, day by day, by gigantic corporations, whose only reason for existing is to make a profit - without regard for human beings, or for the very earth we stand on.
There is only one solution that I can see.
People in every single town across the nation must stand up and start shouting for the end of the corporation as a legal entity, the end of corporations as entities, period.
You won't see it published in your local newspaper. In small and large towns across the nation, police departments have become drug dependent - that is, they are dependent on the money that the federal government hands them for going after marijuana consumers.
No matter what laws the locals pass to protect their cannabis growers and consumers, the local cops, hungry for money, take the federal dollars and go after the poor people, especially the poor sick ones, like medical marijuana patients.
Because of these unconstitutional drug laws, their are two classes of people now - those who have used cannabis (and understand how the system operates, and those who have never tried it, and have no knowledge of the drug and are simply victims of the propaganda and disinformation network sponsored by the government.
In this case Wachovia/Wells Fargo became a faceless bureaucracy who feels very bad about those rogue elements of their big corporation and they pay a fine that is passed on the the rest of America and promise it won't happen again...until you forget about it next year.
If our government representatives don't fix this, all bets are off.
If you want respect for the law, make respectable laws. For everyone and not just those of us on the outside of the "power" structure.
Drugs and Drug Cartel operations are sponsoring the Prison Industrial System (PIS) which employs many people, houses many other people, and supports many crooked politicians. It's just another branch of the Military Industrial Complex, which Ike warned the American People about. Hillary Clinton mischaracterized what we are up against as a vast right wing conspiracy, when in fact, it's ancient politics of the ethical wasteland of criminally minded leadership.
So, it should come as no surprise that in a Nation where our Supreme Court ("Supreme" only because it's the court of last resort - NOT supreme in terms of any insight, ethics, or intelligence) thinks that first amendment rights of fictional legal entities (corporations) trump the right of the people to free and fair elections, that in that Nation, the interest of a megabank's profits might outweigh the need for safety of the people from known dangerous violent kidnapping and victims' body dissolving gangs of well armed wealthy thugs who use those megabanks to maintain their evil businesses.
Because the conservative people have approved it, it is done in their name.
Ready availability of the "white powder" drugs in rehabilitation clinics, available to any patient presenting at the door along with counseling regarding the underlying social/psychological problems that led to using the drugs in the first place, eliminates the black-market profits that maintain the trade in the first place.
Wholesale legalization of marijuana, which carries virtually no social or serious psychological consequences greater than either alcoholic beverages or cigarettes, and allowing local cottage industry to produce our national consumption, will eliminate more than half the profits generated by the Mexican cartels.
Now perhaps we understand why our federal government has been so adamant in keeping drug use in the US illegal. When Wachovia generates perhaps $100 Billion in profits through illegally laundering $400 Billion in drug money from Mexico, I'm guessing they've been lobbying VERY hard to maintain the status quo, regardless of the consequences to the citizens of both the US and Mexico...
Trading drugs and guns was simply a way to circumvent the Boland Amendment that tied the hands of the Reagan administration by making it impossible to fight communism in the Americas.
a business student came to class and she said 'why not follow the drug money?'
in some cities like Medellin they build big luxury buildings, the source of the money is a mystery