Mar 242012
 
 March 24, 2012  Posted by at 5:01 pm Finance

Russell Lee Rice ParadeOctober 1938
“Boys at the National Rice Festival parade. Crowley, Louisiana”

Both the mainstream and alternative media spend a good amount of time reporting on the excesses of Wall Street, which range from extremely disproportionate levels of compensation to blatantly criminal practices. Whether we are talking about Goldman Sachs defrauding and front-running clients or former New Jersey governor and MF Global CEO Jon Corzine illegally transferring client funds to JP Morgan, there is a certain air of “so whatness” to the entire discussion. How extensive are these occurrences and why should we care?

There is no doubt that these are serious issues/crimes, but, at the end of the day, there is also a limit to how much one can care about extremely rich people stealing money from and screwing over moderately rich people in the markets. Sometimes, there is almost a distracting quality to these discussions, and it helps maintain the tarnished-yet-still-respectable reputation of the major banks. We begin to forget about the systemically cruel ways in which the global banking system affects the lives of billions of innocent people every day.

When high-level drug traffickers have been removed from all contact with operations on the street, including the handling of drugs or any associated violence, they are said to have “become the bank”. They simply use their money to finance drug packages while reinvesting profits into real property and legitimate businesses. Once the traffickers reach this point, there is almost no possible way they can catch a charge and be convicted of any serious crime. The legal distance between them and the street-level dealing and violence has grown much too large, even though none of it would be possible without their money.

In that sense, the phrase “become the bank” is a very apt one. This post is not even meant to draw an analogy between high-level narco-traffickers and the TBTF banks, but rather to sketch a portrait of the literal connection that exists. The large banks are the untouchable source of funds behind almost every illegal (yet highly profitable) industry throughout the world, as well as activities that are technically legal, but still very destructive to society. They are sometimes even aided by Western governments and their intelligence apparatuses, which find valuable policy objectives in doing so.

These institutions help traffick billions worth of drugs and illegal weapons across international borders every year. Just last year, it was revealed that Wachovia (now a part of Wells Fargo) had laundered at least tens of billions of dollars for Mexican drug cartels since the escalation of drug-related violence at the US-Mexico border in 2004. This laundered money has gone towards the purchase of everything from the drugs themselves to the planes used the transport them and the weapons used to kill police and civilians alike. Ed Vulliamy produced an in-depth report on this last year for the Guardian.

How a big US bank laundered billions from Mexico’s murderous drug gangs

 

During a 22-month investigation by agents from the US Drug Enforcement Administration, the Internal Revenue Service and others, it emerged that the cocaine smugglers had bought the plane with money they had laundered through one of the biggest banks in the United States: Wachovia, now part of the giant Wells Fargo.

 

The authorities uncovered billions of dollars in wire transfers, traveller’s cheques and cash shipments through Mexican exchanges into Wachovia accounts. Wachovia was put under immediate investigation for failing to maintain an effective anti-money laundering programme. Of special significance was that the period concerned began in 2004, which coincided with the first escalation of violence along the US-Mexico border that ignited the current drugs war.

 

Criminal proceedings were brought against Wachovia, though not against any individual, but the case never came to court. In March 2010, Wachovia settled the biggest action brought under the US bank secrecy act, through the US district court in Miami. Now that the year’s “deferred prosecution” has expired, the bank is in effect in the clear. It paid federal authorities $110m in forfeiture, for allowing transactions later proved to be connected to drug smuggling, and incurred a $50m fine for failing to monitor cash used to ship 22 tons of cocaine.

 

More shocking, and more important, the bank was sanctioned for failing to apply the proper anti-laundering strictures to the transfer of $378.4bn – a sum equivalent to one-third of Mexico’s gross national product – into dollar accounts from so-called casas de cambio (CDCs) in Mexico, currency exchange houses with which the bank did business.

 

“Wachovia’s blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations,” said Jeffrey Sloman, the federal prosecutor. Yet the total fine was less than 2% of the bank’s $12.3bn profit for 2009. On 24 March 2010, Wells Fargo stock traded at $30.86 – up 1% on the week of the court settlement.

 

The conclusion to the case was only the tip of an iceberg, demonstrating the role of the “legal” banking sector in swilling hundreds of billions of dollars – the blood money from the murderous drug trade in Mexico and other places in the world – around their global operations, now bailed out by the taxpayer.

Common sense tells us that the first time a bank gets caught in the middle of such a blatantly obvious practice is not its first time around the block. Indeed, the evidence clearly shows that Wachovia executives were previously made aware of the illegal money laundered through their institutions by several different sources and, instead of acting to remedy the situation, sought to bury the whistleblowers six feet under a pile of disinformation and bureaucracy.

That is simply what they do, and they never catch a criminal charge, or anything beyond a symbolic slap on the wrist, for any of it – they are beyond reproach. A couple hundred million dollars in fines to their companies is a cruel joke on the millions of lives that have been destroyed by the drug trade. More importantly, it does nothing to stop these practices from occurring and destroy millions of additional lives in the future.

When it comes to profiting from murderous and destructive activities, though, nothing ranks higher for the banks than the global arms trade. This type of financing can be carried out in the open for the most part, since governments around the world sanction and engage in the export and procurement of weapons manufactured by the leading companies. Of course, everyone knows that these “legal” arms deals are also fueling the rampant armed conflict in poorer parts of the world. A good portion of the “foreign aid” given to developing nations is recycled right back into the coffers of the large weapons manufacturers and their banks.

“Every gun that is made, every warship launched,every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children.” –Dwight D. Eisenhower

The London-based charitable organization “War on Want” produced a report a few years back highlighting the ways in which major U.K. banks have financed the arms trade through the provision of banking services for the weapons industry, direct investments in arms companies and the provision of credit to these companies through loan syndicates. These include investments in cluster bombs and depleted uranium projectiles, which are universally recognized as inflicting an unacceptably high injury/death toll on civilian populations during and after war.

 

A section of the map showing the locations of unexploded munitions around Basra in southeast Iraq

 

Banking on Bloodshed

 

In 2006 the UK government approved sales by UK arms companies to 19 of the 20 countries identified by the Foreign and Commonwealth Office as ‘countries of concern’ for human rights abuses. These countries included Saudi Arabia, Israel, Colombia, China and Russia.21 Colombia, Russia and Israel are also countries in conflict. Deals have been approved in other conflict countries including Algeria, Turkey, Pakistan, Afghanistan, Indonesia and Georgia. In 2007 the UK government, in defiance of an arms embargo, allowed UK companies to sell Zimbabwe £1 million in cryptography equipment and software.

 

Israel is a regular customer of the UK arms industry, despite its flagrant violations of international law, including the military occupation of the Occupied Palestinian Territories. In 2006 the government approved for sale to Israel a laundry list of military hardware: helicopters, military aircraft cockpit displays, unmanned vehicles, anti-armour missiles and other electronic warfare equipment. BAE Systems makes subsystems, or components, for the F-16 fighter jet, of which Israel has 236. F-16s have been deployed by Israel against civilian populations in both Lebanon and Gaza.

 

 

The Iraq and Afghanistan conflicts have been a boon to arms companies in the US and the UK. One UK company that has benefited particularly from the surge in demand from the Iraq war has been Chemring, which manufactures niche products such as missile countermeasures and flares. Profits have risen each year since the start of the occupation in 2003. In 2006 returns were almost 500% higher than in 2002, and share prices have followed.

 

BAE supplies many weapons to the US and UK that have been used in the Iraq and Afghanistan conflicts, including V-22 guns and armoured fighting vehicles. BAE also recently won a contract from the UK Ministry of Defence to service its Tornado jets in Iraq for £10 million apiece.29 Lockheed Martin also supplies extensively to the US and UK governments to fulfil demand from the ongoing conflicts in Iraq and Afghanistan. These supplies include military ground vehicles and sniper targeting pods for fighter aircraft, amongst other products.

 

There are some weapons that have come under particular criticism for their toll on civilian life even long after a war has ended. Cluster munitions are one such weapon. They are designed to scatter dozens to hundreds of smaller bomblets over a large area and can cause high levels of civilian casualties both during attacks because of their indiscriminate, wide-area effects, and long afterwards, since unexploded ordnance turns fields, roads and even schools into minefields. One in four cluster munitions victims are children.

 

 

The arms trade provides the destructive hardware used in conflicts across the world. This report has exposed, for the first time, the extent to which the five main British high street banks are funding this violent trade. High street banks are using our money to fund companies that sell arms used against civilians in wars across the world, including conflicts in Iraq and Afghanistan. They are financing an industry that sells arms to countries committing human rights abuses such as Israel, Colombia and Saudi Arabia. Money from our savings and current accounts is being used to fund companies that produce pernicious weapons like depleted uranium and cluster bombs.

 

Faith in the banking sector is already at an all-time low. The revelation that high street banks are investing in weaponry will add to this public mistrust. Barclays, Halifax Bank of Scotland, HSBC, Lloyds TSB and Royal Bank of Scotland are all complicit. Barclays stands out for the sheer scale of its investments. Royal Bank of Scotland is the most active in lending to the arms sector. HSBC shows its glaring hypocrisy by having claimed to divest from the arms trade while actually continuing its holdings.

 

Whilst the complicity of high street banks is the focus of this report, War on Want believes that the arms trade should ultimately be abolished. However, with governments such as the US and UK determined to pursue military adventures around the world, the arms trade remains big business. War on Want believes that now is the time to act to put an end to high street banks’ support for arms companies.

 

ukarmsshares

 

While Congressional panels hold symbolic hearings about which banks sold what toxic investment to which defrauded clients, or who knew what about which funds were transferred to what location, the systemic financing of death and destruction around the world continues on unimpeded. These activities are not only outside the scope of any serious investigation, they are officially sanctioned and effectively immune from regulation or prosecution.

These are the same institutions which have been granted virtually unlimited backstops by American and European taxpayers, in one form or another. More to the point, they are the institutions which many of us use to store our money, take out loans, invest in markets or make purchases. As long as we continue to do so, we are telling them that we are OK with how they conduct themselves around the world; that we are willing to accept their status as the untouchable elite.

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  • #8581
    ashvin
    Participant

    Russell Lee Rice ParadeOctober 1938 “Boys at the National Rice Festival parade. Crowley, Louisiana” Both the mainstream and alternative media spend a
    [See the full post at: Becoming the Bank]

    #1971
    jal
    Participant

    Blank post.

    #1972
    ashvin
    Participant

    jal post=1571 wrote: Blank post.

    jal, you can find the actual article on the front page.

    #1975
    TheTrivium4TW
    Participant

    Excellent article Ashvin.

    The crooks really are running the show… and it is even worse… Wachovia launders Sinaloa drug cartel money, The ATF funnels thousands of guns to Sinaloa and the government cuts deals with Sinaloa to bring in tons of cocaine free and clear (while traveling Grannies get stripped searched and a Miss USA contestant gets sexually assaulted).

    And if all that weren’t enough, Big Finance Capital (Owners and controllers of the Federal Reserve the mega banks and the multi-nationals) also owns and controls the mega prisons and they lobby the people they financed into office for draconian drug laws to put their subjects into prison in order to maximize their prison investment. Oh, and they own the hotels right next to the prisons, too, so when you go to visit people busted for using their product, you pay them for the privilege, too.

    And they own the media, so nobody will put this all together…

    And no, I don’t expect anyone to just believe me (I’m not the “news!” -lol-), so here are the references…

    Startpage.com the following titles (links “disappeared” post, my post felt like it had been NDAAed)

    “How a big US bank laundered billions from Mexico’s murderous drug gangs”

    “Documents: Feds allegedly allowed Sinaloa cartel to move cocaine into U.S. for information”

    “Youtube We Tolerate The Cultivation of Opium Poppies”

    “FACTBOX: Some facts about Afghanistan’s opium crop”

    Folks, 90% of the world’s heroin is coming from Afghanistan and it isn’t being transported via mule. Try C-130s or similar.

    https://en.wikipedia.org/wiki/Lockheed_C-130_Hercules

    America isn’t running the drugs, the Big Finance Capital (BFC) interests that hijacked America are controlling the drug flow in the hopes of robbing their American subjects (America doesn’t have citizens any more – but I think most know that here), hooking them on drugs and then monetizing them as they enslave them in their prison work brigades.

    Startpage.com the following headlines…

    “Fast and Furious weapons were found in Mexico cartel enforcer’s home”

    “Taxpayers Paid For “Fast And Furious” Plan To Arm The Sinaloa Drug Cartel”

    And nobody gets in trouble EXCEPT…

    The ATF whistle blowers…

    The Wachovia whistle blower who just did his job.

    Folks, we aren’t in Kansas any more. Perhaps we never were.

    And the BFC controlled “media?” Nowhere to be found.

    Corzine was just implicated in criminal theft and perjury, but I doubt there is even an investigation because he’s a BFC oligarch asset.

    America has a classic case of Tyranny.

    The scary part is that these criminals are so confident, they are demolishing the Bill of Rights and flaunting their illegal wars, hatred for democracy (Greece – unelected criminal bankster suspending elections) and their mountain of criminal acts including bribery (Jefferson County), drug money laundering, and Corzine robbing $1.6 billion and lying under oath to cover it up.

    An O’Reilly and Obama both shilling for their masters and saying no crimes were committed…

    https://www.youtube.com/watch?v=8wsxXYDcHiE

    https://www.youtube.com/watch?v=tUBUw3e2Gk4&t=0m8s

    Note that O’Reilly never invites Bill Black or Karl Denninger on his show… and Obama says “some” of the acts weren’t illegal, but fails to mention that the criminal acts he admits to (some is not all) won’t be prosecuted… nor does Obama mention that there is not a single “or else” penalty in FinReg (per Denninger’s reading – I haven’t read it) – so they could all break every “law” in FinReg 1,000,000 times each AND NOTHING HAPPENS.

    Just like the Fed has broken Section 2A of the Federal Reserve Act for 25 years running and NOTHING HAPPENS (and not 1 in 100 even know what its TRUE mandate is since the Fed and the media lie about it).

    Even though Alan Greenspan openly admits the criminal fraud and the it was admitted to under oath by Citibank’s chief underwriter…

    https://www.youtube.com/watch?v=RM1wRcr7XeY

    It’s a cesspool.

    #1976

    Fun. A topic with all Blank Posts. This is getting old.

    Anyhow, this is nothing new. Did Al Capone go to jail for any of the inumerable murders he was responsible for? Hell No. He went to Jail for Tax Evasion. That only because he wasn’t an insider on the system. In his immortal words, “Capitalism is the Legitimate Racket of the Ruling Class”.

    RE

    #1978
    ashvin
    Participant

    TheTrivium4TW,

    Did you try to post an image in your post? If so, that’s why it didn’t show up. If not, we will look into what else could be going on.

    Please, people, just refrain from posting images for the time being…

    RE – You’re right, it’s nothing new, but it’s much more deeply ingrained and just as under-emphasized as it ever was.

    #1979

    ashvin post=1578 wrote:

    RE – You’re right, it’s nothing new, but it’s much more deeply ingrained and just as under-emphasized as it ever was.

    Agreed, which is why we need a wholesale overhaul of the legal system and should scrap English Common Law for the Law of the Inquisition. Let’s face it here, the legal system as it exists is a wholesale failure insofar as dispensing Justice is concerned. We don’t need Perp Walks and Fines for Banksters, it does nothing to fix the problem. What we need is Torture and an excruciatingly Slow Trip into the Great Beyond. You know, something that would make Lloyd Blankfein really think twice before he empties the Pensions of 10,000 Widows and cuts the SNAP Card allowance of 10,000 Orphans.

    I go on Record as being in favor of only LEGAL means of Retribution for Crimes Against Humanity. I just think we need an Upgrade of the Legal System here to account for some exceedingly EVIL VERMIN scurrying about our society at the moment. Public Executions of Banksters would be a good start here.

    RE
    https://www.doomsteaddiner.org

    #1984
    pipefit
    Participant

    “Sometimes, there is almost a distracting quality to these discussions, [about banks]…”

    Agreed. Part of the problem is the scale. Most people cannot really understand the concept of a billion dollars. $50 thou a year for 20 years is a million dollars, so the average person can understand a ‘million’ dollars. But 1000 times as much, a ‘billion’? Doubt it.

    And now we are into trillions, which is a million times a million. If Ben Bernanke said tomorrow that he would write a check for $100 trillion, to pay off the national debt, plus fund all the unfunded liabilities of social security, medicare, etc., the average person would think, “yeah, good idea, write that check, why the heck not.”

    Obviously, since us serious types are hoping for an orderly unwinding of this world order ponzi scheme, often referred to as ‘post Bretton-Woods’ financial regime, we’re hoping he doesn’t write that check just yet. What is frustrating is that there doesn’t appear to be any progress on an alternate course of action.

    #1986

    pipefit wrote: If Ben Bernanke said tomorrow that he would write a check for $100 trillion, to pay off the national debt, plus fund all the unfunded liabilities of social security, medicare, etc., the average person would think, “yeah, good idea, write that check, why the heck not.”

    If he could in fact do that, it might not be such a bad idea, but he cannot do that, at least not under the rules of double-entry bookkeeping Da Fed works under. If HB created $100T in FRNS, he would simulataneously create another $100T Liability on the Balance sheet of Da Fed. There is no way for him to create $100T in notes without creating such a Liability. HB cannot pay off any old debt, all he can do is Roll It Over into new debt.

    The debt cannot be paid off through the issuance of new debt, its impossible. Creation of non-debt money is not within the purview of Da Fed to do, only Treasury could do that, and then only in Theory really. To Naked Print $100T is simply an elimantion of the value structure of interest through the system. It would destroy the value of the currency done in those kind of numbers. Its not a choice Helicopter Ben really has here at the moment.

    RE

    #1991
    Glennda
    Participant

    Ash said
    “The large banks are the untouchable source of funds behind almost every illegal (yet highly profitable) industry throughout the world, as well as activities that are technically legal, but still very destructive to society.”

    Ash – I think El G had it right about the TBTF banks, they are untouchable; they are Too-Big-To-Jail.

    RE said
    “We don’t need Perp Walks and Fines for Banksters, it does nothing to fix the problem. What we need is Torture and an excruciatingly Slow Trip into the Great Beyond.”

    RE – You would like the idea of the death penalty for corporate persons. In this plan a corporation could be held in limbo by the govt and any money it made collected by the govt, for lesser crimes. I guess being Nationalized would be the death penalty. If they are people, they should be allowed to pay the ultimate penalty. Though I suppose we could allow for some waterboarding, if you insist.

    Perhaps the best we can hope for is – if people get too angry at the Banks, it might be expedient for a political figure like the president to throw a Bankster to the wolves as a sop to OWS and Tea Party.

    But what would signal that point? What would constitute “too angry”?

    #1997
    TheTrivium4TW
    Participant

    Glennda post=1591 wrote: Perhaps the best we can hope for is – if people get too angry at the Banks, it might be expedient for a political figure like the president to throw a Bankster to the wolves as a sop to OWS and Tea Party.

    Hi Glennda, I’m getting a vibe that they simply have no respect for their subjects any more so they will continue to commit crimes and won’t even bother to pretend any more.

    They are out saying they are using electronics to spy on people, that they want to make infanticide “liberal” and demonize anyone who thinks that is outrageous… They bribe, they rob, they put derivatives ahead of FDIC depositors… BofA goes, they get all the money first now…

    These people have “flown the coup,” as it were and the populace turned subjects are just emotionally incapable of admitting the obvious at this point…

    We are entering a very dangerous time and our only hope is a hopelessly apathetic populace. In general, of course – lots of people are waking up every day… and that’s a good sign, but it is also why the criminals enact more criminal “law” and commit more crimes in an effort to deal with their true political opponents – those who see the entire system as a cesspool of Big Finance Capital corruption.

    #1998
    scandia
    Participant

    Ash,Just this week friends and I have been discussing war and armament manufacturing…No public discourse mind. Just private chat.
    I was wondering how many people are employed making instruments of death, how many towns would be bankrupt without these industries? Does anyone know what percentage of Cdn GDP depends on weapons manufacturing,even lowly items such as bullet proof vests? Never mind old fashioned vests. One can now buy a well tailored bullet proof sports jacket or suit.And are the workers at these sites even bothered ? Just glad to have a job I expect. Proud to be serving their country, proud to have earned security clearance…And what about the ” women and children “? How many of them now work in these industries? Equal opportunity legislation in play ( snarc on ).
    I think it was Voltaire who said behind every great fortune there is a crime. We could say behind every successful economy there is war.

    #1999
    Golden Oxen
    Participant

    @”Public execution of the banksters.” How about bringing back the ever popular Guillotine, with a large steel replica of a credit card for a blade; and a bucket full of foreclosure notices for the gentlemen to peruse as they prepare for the blades descent?

    #2004
    ashvin
    Participant

    Reverse Engineer post=1579 wrote: I go on Record as being in favor of only LEGAL means of Retribution for Crimes Against Humanity. I just think we need an Upgrade of the Legal System here to account for some exceedingly EVIL VERMIN scurrying about our society at the moment. Public Executions of Banksters would be a good start here.

    OK, but are we drawing the line at BoD, CEOs, CFOs, the 23yr old quant trader, where? And do we have to actually prove that they were intentionally involved in these horrendous practices, beyond a reasonable doubt in a court of law? I imagine we are going to have to make some fundamental exceptions to Constitutional protections in order to get that result, at least anytime in the near future. We could try to update the entire thing and make it easier for banksters to flow through the system and into the guillotine, but that’s bound to have some unintended consequences – ones that I’m not sure I’d want to live with.

    #2040
    TheTrivium4TW
    Participant

    ashvin post=1604 wrote:
    OK, but are we drawing the line at BoD, CEOs, CFOs, the 23yr old quant trader, where?

    Therein lies the rub, nobody cares where we draw the line.

    Heck, we can’t even keep our liberties safe from these rogue criminals, let alone punish them in any way whatsoever.

    100 year on and Debt Dollar Tyranny is still asset stripping our society and pushing all the power into the hands of the criminal asset strippers.

    #2089
    alfbell
    Member

    I think we need to respond to the big banking institutions the same way that we do with government people and institutions.

    Do you really think that pulling your money out of the bank and putting it into a local credit union or some such is going to effect these people and their plans?

    We are in FASCISM now and the banks, big corporations and government have all joined forces and become one to some degree.

    The US government, Congress, The Federal Reserve, etc. are all totally locked into their memes (false data, false ideologies, unworkable or inapplicable policies, etc.).

    The hubris, stubborness, self-interests, hidden agendas and “need to be right” will prevent any change from ever occurring.

    The only way for there to be a chance for reform is when our “leaders” finally run us into an unsolveable crisis socially, fiscally, or monetarily (and of course all of these collapses are on the horizon).

    So the best strategy to follow in my opinion is to not waste your time with “how things should be” or “how can we fix this”, etc. because we are on a runaway train that won’t stop until it hits a wall.

    The strategy is to understand these government leaders and institutions to the best of your ability. Be alert to every change and policy action they make and then quickly decide how you can use it to your advantage or how you can avoid the consequences of it. Follow very carefully what the goverment is doing and act accordingly to protect yourself.

    This is no way for a citizen to have to live but for now it is the only way to have a chance of surviving or thriving.

    Let’s just hope that after the collapse that it is a benevolent person or group that steps in to pick up the pieces and not another Adolf.

    #2525
    boko
    Member

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