While cocaine production ravages countries in Central America, consumers in the US and Europe are helping developed economies grow rich from the profits, a study claims
The vast profits made from drug production and trafficking are overwhelmingly reaped in rich “consuming” countries – principally across Europe and in the US – rather than war-torn “producing” nations such as Colombia and Mexico, new research has revealed. And its authors claim that financial regulators in the west are reluctant to go after western banks in pursuit of the massive amount of drug money being laundered through their systems.
The most far-reaching and detailed analysis to date of the drug economy in any country – in this case, Colombia – shows that 2.6% of the total street value of cocaine produced remains within the country, while a staggering 97.4% of profits are reaped by criminal syndicates, and laundered by banks, in first-world consuming countries.
“The story of who makes the money from Colombian cocaine is a metaphor for the disproportionate burden placed in every way on ‘producing’ nations like Colombia as a result of the prohibition of drugs,” said one of the authors of the study, Alejandro Gaviria, launching its English edition last week.
“Colombian society has suffered to almost no economic advantage from the drugs trade, while huge profits are made by criminal distribution networks in consuming countries, and recycled by banks which operate with nothing like the restrictions that Colombia’s own banking system is subject to.”
His co-author, Daniel Mejía, added: “The whole system operated by authorities in the consuming nations is based around going after the small guy, the weakest link in the chain, and never the big business or financial systems where the big money is.”
The work, by the two economists at University of the Andes in Bogotá, is part of an initiative by the Colombian government to overhaul global drugs policy and focus on money laundering by the big banks in America and Europe, as well as social prevention of drug taking and consideration of options for de-criminalising some or all drugs.
The economists surveyed an entire range of economic, social and political facets of the drug wars that have ravaged Colombia. The conflict has now shifted, with deadly consequences, to Mexico and it is feared will spread imminently to central America. But the most shocking conclusion relates to what the authors call “the microeconomics of cocaine production” in their country.
Gaviria and Mejía estimate that the lowest possible street value (at $100 per gram, about £65) of “net cocaine, after interdiction” produced in Colombia during the year studied (2008) amounts to $300bn. But of that only $7.8bn remained in the country.
“It is a minuscule proportion of GDP,” said Mejía, “which can impact disastrously on society and political life, but not on the Colombian economy. The economy for Colombian cocaine is outside Colombia.”
Mejía told the Observer: “The way I try to put it is this: prohibition is a transfer of the cost of the drug problem from the consuming to the producing countries.”
“If countries like Colombia benefitted economically from the drug trade, there would be a certain sense in it all,” said Gaviria. “Instead, we have paid the highest price for someone else’s profits – Colombia until recently, and now Mexico.
“I put it to Americans like this – suppose all cocaine consumption in the US disappeared and went to Canada. Would Americans be happy to see the homicide rates in Seattle skyrocket in order to prevent the cocaine and the money going to Canada? That way they start to understand for a moment the cost to Colombia and Mexico.”
The mechanisms of laundering drug money were highlighted in the Observer last year after a rare settlement in Miami between US federal authorities and the Wachovia bank, which admitted to transferring $110m of drug money into the US, but failing to properly monitor a staggering $376bn brought into the bank through small exchange houses in Mexico over four years. (Wachovia has since been taken over by Wells Fargo, which has co-operated with the investigation.)
But no one went to jail, and the bank is now in the clear. “Overall, there’s great reluctance to go after the big money,” said Mejía. “They don’t target those parts of the chain where there’s a large value added. In Europe and America the money is dispersed – once it reaches the consuming country it goes into the system, in every city and state. They’d rather go after the petty economy, the small people and coca crops in Colombia, even though the economy is tiny.”
Colombia’s banks, meanwhile, said Mejía, “are subject to rigorous control, to stop laundering of profits that may return to our country. Just to bank $2,000 involves a huge amount of paperwork – and much of this is overseen by Americans.”
“In Colombia,” said Gaviria, “they ask questions of banks they’d never ask in the US. If they did, it would be against the laws of banking privacy. In the US you have very strong laws on bank secrecy, in Colombia not – though the proportion of laundered money is the other way round. It’s kind of hypocrisy, right?”
Dr Mejia said: “It’s an extension of the way they operate at home. Go after the lower classes, the weak link in the chain – the little guy, to show results. Again, transferring the cost of the drug war on to the poorest, but not the financial system and the big business that moves all this along.”
With Britain having overtaken the US and Spain as the world’s biggest consumer of cocaine per capita, the Wachovia investigation showed much of the drug money is also laundered through the City of London, where the principal Wachovia whistleblower, Martin Woods, was based in the bank’s anti-laundering office. He was wrongfully dismissed after sounding the alarm.
Gaviria said: “We know that authorities in the US and UK know far more than they act upon. The authorities realise things about certain people they think are moving money for the drug trade – but the DEA [US Drugs Enforcement Administration] only acts on a fraction of what it knows.”
“It’s taboo to go after the big banks,” added Mejía. “It’s political suicide in this economic climate, because the amounts of money recycled are so high.”
Anti-Drugs Policies In Colombia: Successes, Failures And Wrong Turns, edited by Alejandro Gaviria and Daniel Mejía, Ediciones Uniandes, 2011
Comment: Of course the profits flow northwards! What did people think was happening? That the CIA, MI6, the Mossad and banksters in Switzerland and Wall Street were just gonna let the locals rake it in? Like all other industries, the third world is nothing to the international banking mafia but a slave plantation, useful for only one thing: harvesting energy from.
The United Arab Emirates (UAE) last week forced the closure of two non-governmental organizations that promote democracy, mirroring the actions last year of the military-led government in Egypt against the same NGOs.
The first NGO shut down was the U.S.-funded National Democratic Institute (NDI), followed by the Konrad-Adenauer-Stiftung, based in Germany. The UAE did not provide any explanation for the closings.
Both pro-democracy groups had their offices raided and closed in Egypt during 2011. The NDI was created in 1983 and funded through the National Endowment for Democracy.
An official with NDI said the move was disappointing and “arbitrary.” It was pointed out that the NGO had no programs at this time in the UAE, so the closure would have “no serious ramifications for our work.”
On Thursday, the UAE government detained overnight two NDI employees, an American, Patricia David, and a Serb, Slobodan Milic.
On Christmas Day the Obama administration approved $3.5 billion in weapons sales to the UAE royal government, with almost $2 billion going to Lockheed Martin for two Theater High Altitude Area Defense (THAAD) batteries, and. $582.5 million going to Raytheon for radar and services.
Scott Walker Wages War on Women
Amanda Terkel
Scott Walker Quietly Repeals Wisconsin Equal Pay Law
WASHINGTON — A Wisconsin law that made it easier for victims of wage discrimination to have their day in court was repealed on Thursday, after Wisconsin Gov. Scott Walker (R) quietly signed the bill.
The 2009 Equal Pay Enforcement Act was meant to deter employers from discriminating against certain groups by giving workers more avenues via which to press charges. Among other provisions, it allows individuals to plead their cases in the less costly, more accessible state circuit court system, rather than just in federal court.
In November, the state Senate approved SB 202, which rolled back this provision. On February, the Assembly did the same. Both were party-line votes in Republican-controlled chambers.
SB 202 was sent to Walker on March 29. He had, according to the state constitution, six days to act on the bill. The deadline was 5:00 p.m. on Thursday. The governor quietly signed the bill into law on Thursday, according to the Legislative Reference Bureau, and it is now called Act 219.
Walker’s office did not return repeated requests for comment.
State Sen. Dave Hansen (D-Green Bay) and Rep. Christine Sinicki (D-Milwaukee), the authors of the Equal Pay Enforcement Act, criticized Walker on Thursday for not informing the public of his actions on SB 202.
“We are finally starting to see progress here in Wisconsin, yet like their counterparts across the country, Legislative Republicans want to turn back the clock on women’s rights in the workplace,” said Hansen….
Europe‘s sovereign debt crisis exploded back into life on Tuesday, with markets across the continent rocked by a wave of panic selling amid renewed fears about the impact of savage austerity measures in Spain and Italy.
The mood of uneasy calm seen across Europe since the Greek bailout in February was shattered as financial markets took fright at evidence of a double-dip recession and growing popular opposition to welfare cuts and tax increases.
Italy and Spain, the euro-zone’s third and fourth biggest economies, were at the centre of the market turmoil, with investors demanding an increasingly high premium for holding their bonds.
“Spain is right in the center of a European storm,” admitted finance minister Luis de Guindos, who declined to rule out an eventual bailout but insisted it could be avoided.
In Italy, Mario Monti’s coalition government is facing growing hostility to reforms of its labor market, while the sheer size of the country’s public debt made it an obvious target for nervous traders. The prospect of Greek voters rejecting austerity and the French electorate denying Nicolas Sarkozy a second term as president was also weighing on the markets.
No one can say the U.S. hasn’t been generous towards Israel since it was founded in 1948.
Over a period of 64 years (including the 2013 budget request), the U.S. has given Israel more than $115 billion in military and foreign aid, which averages out to about $4.9 million a day.
American and Israeli officials are currently negotiating a new aid deal that would provide more money for a new missile defense program, Iron Dome. Previous funding requests approved $205 million for the project, and Israel is trying to secure at least that much if not more for future years.
Although some Republicans have tried to portray President Barack Obama as soft on Israel, his budget for Fiscal Year 2013 includes $3.1 billion in military aid for Israel, the most in 13 years.
U.S. Defines Its Demands for New Round of Talks With Iran
By DAVID E. SANGER and STEVEN ERLANGER
WASHINGTON — The Obama administration and its European allies plan to open new negotiations with Iran by demanding the immediate closing and ultimate dismantling of a recently completed nuclear facility deep under a mountain, according to American and European diplomats.
They are also calling for a halt in the production of uranium fuel that is considered just a few steps from bomb grade, and the shipment of existing stockpiles of that fuel out of the country, the diplomats said.
That negotiating position will be the opening move in what President Obama has called Iran’s “last chance” to resolve its nuclear confrontation with the United Nations and the West diplomatically. The hard-line approach would require the country’s military leadership to give up the Fordo enrichment plant outside the holy city of Qum, and with it a huge investment in the one facility that is most hardened against airstrikes.
The US War on Drug Cartels in Mexico Is a Deadly Failure
Mark Karlin, Truthout:
“There is no end game here. The United States is using all its vast powers to do what urban police do in American cities: chase the corner drug dealers out of one area and into another, through the use of temporary intensive ‘enforcement’ – and then chase them back again at a later date…. Meanwhile, in the United States, controlling the demand side appears to be interpreted as throwing people – particularly minority men – in jail for drug offenses, leading to the highest incarceration rate in the world.”
“Afghanistan and the United States signed an agreement on Sunday on night military raids that would hand responsibility for carrying out the operations to Afghan forces but allow continued American involvement. The agreement clears the way for the two countries to move ahead with a more comprehensive long-term partnership agreement, say Afghan and American officials.”
While the Sahel security crisis continues to deteriorate following Tuareg rebels’ declaration of an independent state in Mali’s troubled northern territory [1], recent events in Nigeria indicate a potential for increased regional instability. Boko Haram, a Salafist organization seeking to overthrow the secular administration of Nigerian President Goodluck Jonathan, has recently killed 38 civilians in a suicide car bomb targeting nearby churches holding Easter services in the northern city of Kaduna [2]. As part of an ongoing campaign of sectarian violence, the group has strived to implement sharia law through the establishment of an Islamic State in northern Nigeria [3]. The group’s belligerent acts of violence claimed more than 500 lives during 2011 [4], prompting President Jonathan to call the current security crisis more dire than that experienced during 1967’s Biafran civil war, adding that jihadi sympathizers have successfully infiltrated his government and security agencies [5].
The group has claimed responsibility for the August 2011 bombing of the United Nations headquarters in the Nigerian capital, Abuja [6], and its adoption of sophisticated tactics indicate that Boko Haram is receiving arms and training from abroad. Mainstream outlets can now be seen readying public opinion for an increased presence in Africa under the Right to Protect Doctrine (R2P) by warning of increased terrorist attacks in Europe, following shifts in Islamist activity away from Iraq and Afghanistan, to the “ungoverned spaces” of the Sahel [7]. While the ongoing War on Terror provides the needed justification for the US Africa Command (AFRICOM) to expand its base of operations throughout the Sahel and the troubled regions of east and central Africa, the modus operandi of Boko Haram indicates foreign nurturing in numerous mediums.
Iraqi Prime Minister Nouri al-Maliki has demonstrated an increasingly authoritarian rule as he consolidates power over the country’s institutions and security forces. He has marginalized his political opponents through force and coercion, which has stoked sectarian tensions and even threatened a break-up of the nation. And Obama is supporting all of it.
Maliki, a Shiite, ordered the arrest of his Sunni Vice President Hashemi just as the last U.S. troops left Iraq. The U.S. ambassador to Iraq expressed approval in January of this quest to detain Iraq’s vice president on trumped up terrorism charges, despite a virtual consensus that it was a blatant attempt to eliminate a political rival.
Alaa Mekki, a senior lawmaker with the mostly Sunni Iraqiya bloc, said of the U.S., “Their goal of a united, democratic Iraq is now under threat because of what we describe as the dictatorship attitude.” Angered Kurds and Sunnis say their disenfranchisement has never been greater.
While bilateral initiatives have dominated North American issues over the last couple of years, the trilateral relationship has suffered. With a series of high-level meetings, the U.S., Canada and Mexico are taking steps to boost the NAFTA partnership. First, the defense ministers met to discuss shared continental security threats. This was followed by a leaders summit which pledged to deepen trade, regulatory, energy and security cooperation. The recent meetings have caused some to once again take notice of the incremental efforts to merge all three countries into a North American Union.
In what was hailed as an historic event, U.S. Secretary of Defense Leon Panetta, Canadian Defense Minister Peter MacKay, Mexican Secretary of National Defense Guillermo Galvan, and Mexican Secretary of the Navy Mariano Mendoza recently held the Inaugural Meeting of North American Defense Ministers. As part of a framework they agreed to, “ Develop a joint trilateral defense threat assessment for North America to deepen our common understanding of the threats and challenges we face. Explore ways to improve our support to the efforts of civilian public security agencies in countering illicit activities in our respective countries and the hemisphere, such as narcotics trafficking. Explore how we can collaborate to increase the speed and efficiency with which our armed forces support civilian-led responses to disasters. Continue to work together to strengthen hemispheric defense forums.” The ministers also committed to enhancing cooperation in the fight against transnational criminal organizations. The trilateral defense meeting is part of the ongoing efforts to establish a fully integrated North American security perimeter.
In another example of the two tiered justice system for the globe’s financial elite, Goldman gets a measly £25,000 fine after getting caught manipulating oil prices.
If a Muslim were caught doing this it would be condemned as an act of Financial Terrorism and be responded to with the swift deployment of predator drones and intercontinental ballistic missiles.
But when the people in the good old boys network get caught they get a fine that was most likely much less than they made off the illegal trades.
But don’t you dare pick up a protest sign and demand accountability for these kind of acts or you just may find yourself beaten and arrested.
You, me and everyone else pay for this kind of crap directly at the gas pump.
Via The ICE Futures Investment Exchange, here is the full text of the sanctions letter.
First Man Arrested With Drone Evidence Vows to Fight Case
Court must decide if police are allowed to use drones to help make arrests
The tiny town of Lakota, N.D., is quickly becoming a key testing ground for the legality of the use of unmanned drones by law enforcement after one of its residents became the first American citizen to be arrested with the help of a Predator surveillance drone.
The bizarre case started when six cows wandered onto Rodney Brossart’s 3,000 acre farm. Brossart, an alleged anti-government “sovereignist,” believed he should have been able to keep the cows, so he and two family members chased police off his land with high powered rifles.
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