UN head claims drug money saved banks in global crisis

wall street has been a source for laundering drug money for decades. pretty much every large bank is involved in it too.

 

That's not making a lot of sense to me. Is he saying that cartels saw the economic crisis as a good time to put money into banks, and that liquidity was a benefit to the banks? Or, is he merely saying that drug money is always circulating through banks, and the volume is big enough to make a palpable difference in the banks' liquidity. If it is the former, they should have explained why gangs would behave that way. If it is the latter, that's not very noteworthy.

 

It is the latter, and it has been this way for a long time. The only reason it is noteworthy at all is because so many more banks could have folded if not for drug profits.

Of course, those profits (352 billion according to the article) could have been taxed and would have provided a massive boost to many state governments as well as the federal government. In addition, the absence of prohibition would reduce federal budgets by more than a trillion dollars over ten years, more than paying for the entire healthcare reform bill now being considered. I've asked this before in other forms, but why shouldn't recreational drug users subsidize health care?

 

i think its the latter, and its not very noteworthy b/c its not new news - this has been going on for a long time. banks have always laundered money on a massive scale. i think the point is that when 'legitimate' sources of revenue collapsed the banks still had one steady industry they could count on and that was laundering drug money. it literally kept alot of them afloat for a period when the legit economy was in free-fall.

10% of all global trading activity is in illegal drugs - its simply too big a piece of the pie to not be involved in, even for 'reputable' institutions like wall st. and large banks.

 

That doesn't really make it noteworthy. If I were to say more banks would have failed if it wasn't for the $352 bn produced by the rice industry, would that be saying anything? Many industries contribute. That's like saying my vote was the one that put Obama over the top. Or, the electrons produced by my windfarm are the ones powering your computer at this instant.

And, I don't know if it would have mattered anyway in the giant hypothetical of 'if there were no illegal drugs.' If there weren't, capital invested in drugs would have been invested in something else (probably something with a somewhat lower ROI, granted). So, some of that value would have been replaced. Plus, the banks and the economy would not have been grossed up as much without the drug trade, so the liquidity needs of the banks might have been smaller. In other words, the implied hypothetical is so grand as to be ridiculous. Just like eliminating the rice industry from the world would so completely alter the landscape of business, demographics, politics, and history as to be absurd to discuss, so would the elimination of the drug trade.

 

I guess for me the part that makes it worth noting is the fact that politicians treat drug policy like it is beyond discussion. Despite the fact that drug profits make up a substantial percentage of the world economy, there is no talk of taxing it, no discussion of the relative merits of centering our drug policy on healthcare rather than criminal justice, and no talk about the human and monetary capital we keep flushing down the drain like powder in a raid.

 

Okay, but I think this guy's statement was needlessly political. He is, in effect, saying "the narcotics industry is really big." Okay, I agree. But, should we really be making narcotics out to be some kind of savior? Thank god for people blowing their minds out and ruining their lives with illegal drugs; if it weren't for them, a lot of shareholders would have lost their shirts!

There may be a good argument for a legalize-and-tax approach to drugs. But, this is a scare tactic.

 

I smell a sequel coming on. We've already got "Wall Street 2". Now, this:

"Scarface 2 - Say Hello To My Little Friend"

 

To be fair, the vast majority of drug users do not blow their minds out or ruin their lives with illegal drugs. There is a very visible minority, but the percentage of people who actually become addicts is really, really small.

 

That was hyperbole to make a point. I know you have an ax to grind on that point. I am agnostic on how widespread abuse may be among the population of users.

 

Scarface 2

"First you get the cocaine, then you get the money, then you save the Global economy and then you get the woommmennnn!"

 

Making money from over-leveraged investment vehicles is no more honorable than making money from selling drugs.

 

Because it's too radical and people in this country get scared at any change that doesn't move at a snails pace.

We'll get there eventually but in the meantime we'll have to wait for those that plug their fingers in their ears and refuse to debate the pros and cons to die off.

 

Link

I'm Mike Ruppert, and I'm the publisher of From The Wilderness newsletter and an ex-LAPD narc...When you created the newsletter, what were you responding to and what were your intentions?

Well, in March of '98, it was about four months after I confronted CIA Director John Deutch at Locke High School on world television--he had come to Los Angeles to talk about allegations about CIA dealing drugs. I stood up on CNN and ABC Nightline and I said: "I am a former LAPD narcotics detective. I worked South Central and I can tell you, Director Deutch, that the Agency has dealt drugs in this country for a long time." And the room exploded, and what I saw at that time was there was a crying lack of knowledge in the body politic about how much evidence there really was about the criminal activities of the Central Intelligence Agency, specifically about dealing drugs. I said: "Wait a minute; I can pull out a little newsletter and say, 'If you look at this document, here's the proof for that.'" Because a lot of people were running around with the vague notion that maybe the CIA were bad guys and had done some things wrong, and they didn't know how much actual proof there was. So that's been the mission: to present the real proof that's irrefutable about what goes on.

Let's talk about your experience on the beat and what you confronted as a citizen trying to do right in the streets--must be pretty wild as it is.

I haven't been a policeman now for a long time. I graduated from the LA Police Academy class of 11/73, hit the streets in January of '74 in South Central Los Angeles. It was a vastly different world then; there was no cocaine and we had six-shooters and straight batons and nobody had a radio that you carried around with you. But the world has changed enormously. I specialised in narcotics quickly, and heroin was the predominant drug on the street in my area; it was Mexican brown heroin in those days.

And what happened to me was that I met and fell in love with a woman who was a contract CIA agent, a career agent. Now, I come from a CIA family and they had tried to recruit me, so this was not unexpected to me, but I began to see that she was protecting drug shipments and that the Agency was actively involved in dealing drugs. This happened with her in Hawaii, Mexico, Texas and New Orleans, and I kept saying I'm a narc, that I'm not going to overlook drug shipments. That's what basically set me on the irreversible course of events that determined the rest of my life. That was 1977.

You imagine someone in the CIA as thinking about protecting the country, or at least imagine the intelligence community as something that's ordered around national security. What do you think it is that triggers them to want to reconcile drug shipments in the country in line with that pursuit?

Well, they don't even have to reconcile it. That's what took so long to figure out, but what we teach now with From The Wilderness is that it wasn't just CIA dealing some drugs to fund covert operations. It is that drug money is an inherent part of the American economy. It has always been so, as it was with the British in the 1600s when they introduced opium into China to fund the triangular trade with the British East India Company.

The point about the drug trade is not that the CIA dealt a few drugs during the Contra years to fund the covert operation that Congress didn't want it to engage in. The CIA has dealt drugs for all 50 years of its existence--50 plus years, even before it was the CIA. And the point is that with 250 billion dollars a year in illegal drug money moved, laundered through the American economy, that money benefits Wall Street. That's the point of having the prohibitive drug trade, which the CIA effectively manages for the benefit of Wall Street.

Just before the Contra war, the annual cocaine consumption in this country was about 50 metric tons a year; let's say back in 1979. By 1985, it was 600 metric tons a year. We are still consuming 550 metric tons of cocaine a year in this country, and the money that's generated from that is used...let's say some drug dealer in Colombia calls General Motors and buys a thousand Suburbans--GM doesn't ask where it came from. Philip Morris is now being sued by 28 departments (the same thing as states) in Colombia for smuggling two billion dollars worth of Marlboro cigarettes into Colombia and getting paid for it with cocaine money! That money boosts Philip Morris's stock value on Wall Street; General Electric the same way...it's documented in the US Department of Justice.

So the purpose of the Agency being involved in the drug trade has been to generate illegal cash, fluid liquid capital, which gives those who can get their hands on it an unfair advantage in the marketplace.

So when you hear the term "War on Drugs"...

Well, it's not a War on Drugs. It's a War on People. Consider this: Joseph McNamara, a former chief of San Jose from the Hoover Institute at Stanford University, published some really telling figures. In 1972, when Richard Nixon started the War on Drugs, the annual federal budget allocation was 110 million dollars a year for enforcement. In fiscal year 2000, 28 years later, the budget allocation was 17 billion dollars a year, and yet, in the year 2000, there are more drugs in this country, they are cheaper, and they are more potent than they were in 1972. That has to tell you that there's some other agenda going on here.

Going back to the idea of China and the Opium War, it is described also as a war on the people of China, to bring them to a state of passivity where they couldn't actually be a force. Do you see in some way the drugs that come in satisfying a racist goal--with the crack laws especially in black inner city populations?

There are a number of ways to look at that. For the British, the introduction of opium into China was a means to an end. China was a homogeneous culture. When the British arrived there, they were these Caucasian heathens. The Chinese didn't want anything to do with them; they didn't want to give up their tea, they didn't want to give up their silk, and the British said "We can't have this". They went to India and grew the opium poppy in east India, in the foothills of the Himalayas, and smuggled it to China. And what they did over the course of a hundred years was they converted China from a homogeneous culture that was unified, into a society of warlords fighting for turf to see who had which drug-dealing regions.

If you look at what happened in South Central LA in the 1980s, the model is exactly the same; it didn't change. When I talk about narcotics, I come from several different angles. It's not just that I am a former narcotics investigator with the LAPD; I am also a recovering alcoholic who has sponsored men in recovery for 17 years. I've served on the board of directors of the National Council on Alcoholism. Alcohol is a drug. I have written more than 35 articles in the US Journal of Drug and Alcohol Dependence on treatment of addiction, recovery from addiction. The issue with drugs is this: people are going to get addicted no matter what you do, and a certain percentage of any population will always get addicted.

What the Agency has done (and I have written specifically on this; it's on my website), through institutions like the Rand Corporation and UCLA's Neuropsychiatric Institute and a number of academic projects which the CIA has funded, is they have deliberately engaged in pharmacological research to find out which drugs are most addictive. For example, in 1978-79, long before the cocaine epidemic hit here in the United States, research scientists from UCLA's Neuropsychiatric Institute, some of whom, like Louis Jolly West, who were very closely tied to the MK-ULTRA program, were doing research in South America where South American natives were smoking basuco, which has the same effect as crack cocaine. And the addiction was so strong that they were performing lobotomies and the people were still smoking the basuco or the paste in Colombia; and they knew that because NI and the Rand Corporation brought that data back.

So the CIA knew in 1980 exactly what the effects of crack were going to be when it hit the streets.

Who benefits most from an addicted inner-city population?

It's not just who benefits most; it's how many people can benefit on how many different ends of the spectrum.

We published a story in my newsletter From The Wilderness in May of 1998 that was written by Catherine Austin Fitts, a former Assistant Secretary of Housing [and Urban Development, HUD]. She produced a map in 1996, August of 1996--that's the same month that the Gary Webb story broke in the San Jose Mercury News. It was a map that showed the pattern of single family foreclosures or single family mortgages--HUD-backed mortgages--in South Central Los Angeles. But when you looked at the map all of these HUD foreclosures, they were right in the heart of the area where the crack cocaine epidemic had occurred. And what was revealed by looking at the HUD data was that, during the 1980s, thousands of middle-class African American wage-earning families with mortgages lost their homes. Why? There were drive-by shootings, the whole neighbourhood deteriorated, crack people moved in next door, your children got shot and went to jail and you had to move out. The house on which you owed $100,000 just got appraised at $40,000 because nobody wanted to buy it and you had to flee; you couldn't sell it, so you walked on it. And what Catherine's research showed was that someone else came along and bought thousands of homes for 10 to 20 cents in the dollar in the years right after the crack cocaine epidemic.

So the economic model is the same one that's always been in play for the ruling elite: use the poor people's money to steal their own land. You get the poor people to buy the drugs, using their money; you take that money to bring in more drugs, which destroys their property value, and then you steal it back. And the same thing has happened not only in Los Angeles; it has happened in Washington Heights in New York. As a matter of fact, it's been documented by a fabulous researcher, Professor John Metzger at the University of Michigan, who is one of my subscribers; he has a doctorate of urban planning. It was discussed in the Kerner Commission Report in 1967 after the Detroit riots, where it became US government policy that no more than a quarter of the population of any major inner city should be minority. "Spatial deconcentration" they call it, which really sounds Nazi to me, but it's in the Kerner Commission Report.

So the plan is literally to kill, loot...let me make it real simple...it's "Kill the Indians, take the land, take the wealth". So it is something of a misnomer or a misconception to believe that all of the cocaine or all of the crack cocaine was only used by African Americans. There was almost as much crack being used by whites as there was by African Americans, certainly in terms of total consumption.

Whites probably consumed more cocaine than African Americans, but they consumed powder. And what we saw was a deliberate effort by the Agency or Agency-related organisations to make sure that the large quantities of the cocaine, and the high-quality cocaine, got into the inner cities like Los Angeles. It was protected. And that's what I saw with the LAPD. I saw the hands-on working relationship, the interface between local police departments and the CIA.

I was first recruited when I was a senior at UCLA. The Agency flew me to Washington and said: "Mike, we want you to become a CIA case officer. You've already interned for LAPD for three years, you interned for the chief, your family was CIA, your mother was NSA. We want you to go back to the LAPD, and being an LAPD cop will just be your cover."

Now the Agency has done that; we've documented it in New Orleans, in New York, in police departments all across the country. And I've seen the interface where the CIA will deal very quietly with local agencies to protect their drug operations. That's one of the reasons they have to do it; it weeds out competition.

Now the people who go on from CIA training and become police officer covers, are they not inherently crooked? Is it for money or do they actually believe there's a benefit here?

Well, we were talking earlier before about Lenny Horowitz and his great book, Emerging Viruses. He has a quote in the front of that book that's one of my favourite quotes of all time; it's from Alexander Solzhenitsyn. And Solzhenitsyn says that men, in order to do evil, must first believe that what they are doing is good, otherwise they can't do it.

Now, not everybody in a local police department who connects with the CIA is a case officer. The Agency will use contractors. They'll approach guys who have military specialties and they'll hire them on the side. There are some like LAPD Chief Daryl Gates, who I believe was a case officer his whole life--and we can go there later if you want to. Others are just contract employees, but they brainwash themselves. And it's easy to believe--it's one of the worst human vices of all--that if you're making all this money and you have power, then you're doing it for a good cause. So there's an aspect of delusion about it, but it is one that becomes extremely vicious when you try to bring it out of denial.