Friday, January 25, 2008

Following the money in search of American drug bosses

I've wondered frequently before who are the "drug kingpins" on the US side of the border, and speculated that the best way to find out would be to follow the money.

The most important money laundering connection yet discovered in the ongoing fight against Mexican drug cartels was revealed last year when, according to Forbes ("Banking on Drugs," Nov. 15, 2007):
In September, a U.S. registered Gulfstream II business jet carrying 3.3 tons of cocaine crashed in Mexico's Yucatán Peninsula. A year earlier, a DC-9 aircraft loaded with 5.7 tons of cocaine from Venezuela was seized in Mexico by Mexican soldiers.

Both of the planes were purchased through a Mexican exchange house called Casa de Cambio Puebla, and that's turning into a problem for Wachovia, the fourth biggest bank in the United States, and Harris Bank, the Chicago unit of Canada's BMO Financial Group.
One of the two planes turns out to have flown in and out of Guantanamo Bay a few times, which has led some to speculate straight up US government involvement in drug smuggling, since only someone with significant government clearance would be allowed in the restricted airspace.

Then, in November 2007, seventy employees of Casa de Cambio Puebla were taken into custody in Mexico City, and accounts were frozen at Wachovia (Miami) and Harris Bank (Chicago). In an indictment released over the holidays, the Mexican Attorney General alleges that money from the currency exchange was used to purchase a fleet of 50 American-registered aircraft, including the two captured full of cocaine in Mexico.

The use of currency exchanges to launder money appears to be fairly common practice, though I'm certain it's not the only method. A Chilean smuggler laundered Euros through his own chain of Casas de Cambio, funneling tens of millions of dollars through accounts at Israel Discount Bank of New York; Harris Bank in Chicago; and J.P. Morgan Chase in Dearborn, Mich., the Wall Street Journal reported recently.

It's hard not to notice Harris Bank cropping up in both scandals, isn't it? (When it comes to following money trails, I'm not a big believer in "coincidence.") Harris Bank was also one of ten institutions named by Sen. Carl Levin in 2001 as a "significant gateway" for money laundering.

Meanwhile, I've been harping on WFAA reporter Byron Harris' reports out of Dallas that the Ex-Im Bank gave massive loans to cartel figures, and criticizing new Ex-Im Bank guidelines for failing to make preventive anti-corruption measures mandatory. It turns out the Chairman of Ex-Im Bank's advisory commitee is Wachovia's General Counsel, a former Marine and Naval Academy graduate Mark Treanor.

Again, it's hard not to notice that Wachovia's top lawyer finds himself in a uniquely central position in two different federal investigations. Not only must his legal team react to allegations of Wachovia's money laundering involvement, at the same time the Ex-Im Bank, whose advisory committee he chairs, is allegedly loaning money to drug cartel figures.

Interestingly enough, Mr. Treanor has been selling off quite a bit of Wachovia stock over the past couple of years. Perhaps he knows something we don't?

No conclusions to be drawn here yet, I'm just looking at recent, published reports hoping to connect a few dots. But if there really are "American drug lords" out there, I'm starting to think maybe they're bankers.

6 comments:

Anonymous said...

A la Tony Montana and his bankers in Scarface. Yeah, U.S. bankers funnel plenty of money.

Anonymous said...

Grits you really need to stop smoking that dope.

Gritsforbreakfast said...

So you don't believe there are any American drug kingpins?

Anonymous said...

For a taste of what the future of this investigation might look like, I would suggest the curious review what's been happening to Sibel Edmonds. The US government has been using everything in its' power to prevent that woman from divulging what she knows regarding certain Very Important People's involvement in both drug smuggling and money laundering. I suspect that something very similar may happen here with this; it's just too pat, all these connections between narcos, bankers, spooks, politicians, etc. can't be waved away...except by the demonstrably and willfully ignorant.

Anonymous said...

Yes "Follow the Money". It works everytime Grits, but I have been telling you this for months. Look for the most money in the US say a banking corp. for instance. See who really calls the shots at the banking corp. and who they work for. Things don't just happen when millions of dollars are involved. Fortunes are built on planning and hard work even if it is the drug business.

FTM

kaptinemo said...

Forgive me, but every time we have some major investigation into the connections between drug cartels, law enforcement and political personages, what usually happens is that an enormous amount of stonewalling and foot-dragging takes place the higher that trail leads up the political food chain.

Most people reading this have probably forgotten a little something called the "Kerry Commission". The then much-younger Senator John Kerry was probing the financial connections of drug cartels. He didn't get very far, largely because he was meeting a lot of resistance, not so much in the countries where the drugs were being produced, but right here in the good ol' US of A...from some of the people who should have been helping. That those people were later tied to the BCCI banking scandal should have come as no surprise, seeing as BCCI was a major money launderer.

As the old saying goes, "Pull a string and get a snake". The problem is the d**n thing's a rattler, and it will bite the person pulling its' tail. This is what usually happens to people who get too close to the real power behind much of the drug trade...as people such as Gary Webb tried to tell us...and paid a terrible price for doing so.