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Sign upMexican Drug Cartels’ Stake in the U.S.: One Trillion Dollars | New America Media
newamericamedia.orgThe six-year War on Drugs that Mexican president Felipe Calderon has waged since 2007 has resulted in one consequence no one anticipated: Mexican drug cartels have sent upwards of $1 trillion to the U.S.
This staggering sum of money has been funneled through U.S. financial institutions, almost always in violation of U.S. laws, and at times even with the cooperation of American federal agencies.
In fact, if the Mexican drug cartels were a sovereign nation, they would qualify to be part of the G-20, ahead of Indonesia (GNP: $845 billion) and behind South Korea (GNP: $1.1 trillion). Yet, this is the cumulative sum of money that Mexican drug cartels have funneled through the U.S. economy.
A New York Times story published last month reporting that federal authorities busted a cartel boss accused of laundering $1 million a month pales in comparison to the hundreds of billions of dollars that drug organizations have moved through U.S. banks.
Who cares about a $12,000,000 a year operation when one American bank was found to have laundered $378,400,000,000 before it was caught? After federal prosecutors started criminal proceedings against the bank, it agreed to hand $110 million over to federal authorities, for allowing banking transactions with proven connections to drug smuggling operations. And the same bank subsequently paid the government a $50 million fine for failing to monitor cash used to ship 22 tons of cocaine.
In other words, the bank paid $160 million to make the case go away. No bank official was ever charged with a crime, and the monies ended up dispersed throughout the United States.
The bank? Wachovia. The year? 2010.
“The [American] authorities uncovered billions of dollars in wire transfers, traveler’s checks and cash shipments through Mexican exchanges into Wachovia accounts,” Ed Vulliamy reported in the Guardian of London on April 2, 2011. “Wachovia was put under immediate investigation for failing to maintain an effective anti-money laundering program… Criminal proceedings were brought against Wachovia, though not against any individual, but the case never came to court.”
“You made a huge mistake in taking one of us. Release him, and if anything happens to him, you will always remember this upcoming Nov. 5.”
—A message from Anonymous • Threatening a Mexican drug cartel with the disclosure of information if they do not release an Anyonymous member taken by the Zetas. Anonymous threatens to release the names of officials, taxi drivers and police officers who have allowed the Zetas to have a run of the region. “We demand his release,” said an Anonymous representative. “We want the army and the navy to know that we are fed up with the criminal group Zetas, who have concentrated on kidnapping, stealing and blackmailing in different ways.” The date is symbolic — it’s Guy Fawkes Day; the representative, speaking in a YouTube video, was wearing a Guy Fawkes mask. Curious to see what happens next. source (via • follow)HSBC Exec Resigns After Report Linking Bank to Drug Cartel Laundering
democracynow.orgA top executive at the banking giant HSBC has resigned in the wake of a report linking the firm to money laundering for Mexican drug cartels. A Senate probe also found loose protections at HSBC’s U.S. unit provided a “gateway for terrorists to gain access to U.S. dollars and the U.S. financial system.” On Tuesday, David Bagley, the head of compliance at HSBC, announced his resignation and apologized in testimony before a Senate hearing.
David Bagley: “I recognize that there have been some significant areas of failure. I have said before, and I will say again, despite the best efforts and intentions of many dedicated professionals, HSBC has fallen short of our own expectations and the expectations of our regulators. This is something that a bank seeking to conduct business in the United States and globally must acknowledge, learn from and, most importantly, take steps to avoid in future.”
The Justice Department has confirmed it is investigating HSBC for criminal wrongdoing. Also speaking on Tuesday, Michigan Democratic Senator Carl Levin noted that the alleged improprieties at HSBC have been ongoing for years.
Sen. Carl Levin: “The recent commitments are welcome. Apologies and commitments to improve are also welcome. But accountability for past conduct is essential, and that’s what’s been missing here.”
The report on HSBC comes amidst widespread scandals in the global financial sector, including news the British bank Barclays manipulated the key global interest rate, Libor.
HSBC pays huge fine over money-laundering allegations
- $1.9B the amount UK-based banking conglomerate HSBC will pay American authorities for their role in a money-laundering scheme, the BBC reports. The bank allegedly assisted drug cartels and countries under sanction launder money. $1.25 billion of the total is money that the company will forfeit — a record — while the rest will be a fine paid to the U.S. government. source
A few thoughts and some background commentary on the root causes of Mexican immigration...
We can trace this so-called “immigration problem” back to the street crime in Mexico that the United States has largely ignored. How bad is crime in Mexico you ask? Every resident has been a victim of crime or has a relative who was a victim. However, there’s a widespread underreporting of crime (around ¾ go unreported) due to corrupt law enforcement and fear of reprisals from criminals and police. Drug trafficking has contributed to the corruption within the police force, military, and judiciary, which I’ll get to later. Police commit a sizeable amount of crime, including kidnapping especially. There is 1 case of kidnapping every 6 hours with an estimated 300,000 a year; however, scholars estimate this number is 3 to 4 times higher due to the widespread underreporting - only 1/3 of kidnappings are reported. There are 10 express kidnappings a day in Mexico City alone, which are not actually considered kidnappings but a violent robbery. Kidnappings aren’t subjected to just citizens either. Prominent businessmen and government officials are often kidnapped to “send a message” to enemies and are forced to live in horrible conditions before they’re killed.
Over 10,000 drug-related murders have taken place since president Calderón took office in 2006 – over 8,000 happened in 2008 alone. The drug cartels have started using guerilla style techniques such as sending in small armies to attack police stations, assassinating police officers, government officials, and journalists, intimidating enemies by displaying their victims in public, and uploading videos of sickening beheadings to YouTube.
This escalation of violence has a lot to do with Mexico’s current transition to a democracy and economic globalization. The PRI party ruled Mexico for over 70 years as sort of a “perfect dictatorship.” For the most part, things were stable. Like every transitioning or new democracy, Mexico’s state is fragile and the transition of power has led the corruption to go uncontrolled. The PRI developed patron-client relationships to control and subdue dissidents – drug cartels gained their power this way. Prohibition introduced these gangs and units of organized crime and the PRI was able to limit violence due to the mutually beneficial relationship they developed. During the late 1980s and 1990s, as opposition parties started to gain more power within Mexico, the PRI lost control over the drug cartels and violence started to surge – the PRI regime was truly broken as Vicente Fox (of the PAN party) was elected president in 2000. The drug cartels learned that sharing a border with the United States had an advantage during Prohibition when they developed strategies to send alcohol and marijuana north. In the 1980s and 1990s while the PRI model was breaking down, the surge in drug trafficking to the United States increased.
Mexican citizens are furious that the government seems completely incapable of effectively combating street crime. Providing safety is a number one priority to the average person. What matters most to Mexican citizens is being liberated from the constant preoccupation with regard to personal security - and this can’t happen unless the law enforcement and judiciary systems are held accountable and become fully functioning. A large number of police officers are actually wanted for crimes but the warrants for their arrest are usually disregarded because they’re protected by superior officers. Simply firing the offending officers wouldn’t solve the problem either since they’d go on committing crimes as citizens with impunity. Much of the problem with corrupt police officers has to do with poor pay and very little training. The probability of a criminal being caught, convicted, and serving fair prison time is so low that it doesn’t serve as a deterrent to committing a crime. I believe in 2001, only 25 out of 100 crimes were reported, 1.2 went to trial, and only 0.4 cases ended with a jail sentence of more than 2 years. Mexicans have little to no faith in their justice system.
Poverty has made a huge impact on the escalation of crime as well. 50% of the population is currently living in poverty and 1/5 is living in extreme poverty, which by standards from the World Bank means living on less than $1 a day. In rural areas, more than 70% are classified as living in extreme poverty. The rate of infant mortality in these areas is about 50% higher than the national average. In rural areas especially, the frequency of poverty has become a reliable source of prediction for homicides. Furthermore, there’s an extreme unequal distribution of income due to the patron-client relationships set up by the PRI. The PRI would reward the political elite for their contributions to their power and stability. The cost of the PRI’s strategy to stay in power was the unfair distribution of capital that impoverished the majority of the population. The general idea was to weaken the masses to remain in control, which allowed no viable competition as a result. The policies and poor investment decisions of Mexico’s post-revolutionary governments established much of the unequal development. For instance, basic social services have been implemented incredibly slowly, if they were implemented at all, because the government’s main priority has always been to aid business and the political elite first. I’m sure this is sounding eerily familiar to you right now.
Because of everything previously mentioned, Mexicans have fled to the United States in growing numbers as citizens lose faith in their government’s capability of combating crime and implementing sound policies focused on the redistribution of wealth. If we want to find a solution to this problem, then Mexico and the United States need to work together and broaden their focus beyond immediate security measures – they must attack the very policies that are allowing for such inequality and violence. For example, over 90% of the guns seized in Mexico come from the United States. Illicit profits (estimated to be between $15-25 billion) cross the U.S. border and find their way to Mexican drug cartels each year. Targeting illicit funds is essentially one of the most effect ways in dealing with drug trafficking as money buys power (more specifically, guns and people). The drug cartels launder the money through illegal business fronts to U.S. bank accounts. Perhaps the FTATC that we pumped with funding after 9/11 could go after illicit funds… just a thought. The U.S. needs to reassess the war on drugs and instead of going after perpetrators of drug related crimes, shift policy toward reducing demand, which has proved to be vastly more effective. We promised $1.4 billion through the Merida Initiative, yet Mexico has seen very little of that money – over $600 million has gone to Colombia which plays a much smaller role in drug-related problems in the U.S.
We’re not going to solve immigration problems by forcing people to return to Mexico. We’re Mexico’s #1 trading partner and they’re our #2 after Canada. Generally, international trade increases diplomatic and democratic relations between countries but we haven’t provided sufficient help to thwart Mexican crime and poverty. We’ve done a lot more taking than we have giving. Perhaps, if the tea baggers and republicans were more concerned with the well-being of these people, so many Mexican citizens wouldn’t feel the need to illegally enter the United States. Honestly, if you lived in a country where you weren’t safe and were not guaranteed basic social needs, would you want to live there?
More commentary to come later….
TLDR; Mexico is a shitty place to live right now and the U.S. isn’t doing a damn thing to help.