The brutal war
between the Mexican Government and the drug cartels (as well as the war between
these cartels themselves) continues to claim an ever-increasing number of lives
of civilian victims.
Even as these killings escalate, evidence continues to pile up of the complicity of US and international banks in the financing and arming the international drug syndicates, particularly, the Sinaloa Cartel.
In March 2010, Wachovia Bank, revealed it had 'laundered' US$ 378.4 billion dollars for the Sinaloa Cartel, through a network of exchange houses, or casas de cambio, between 2004 and 2007.
Wachovia, now part of Wells Fargo Bank, avoided prosecution by paying
US$160 million; a very small sum considering the laundered amount corresponds to
A recent article in the British Sunday Observer based on recently uncovered documents traces a sinister chain that connects Wachovia and other financial institutions, to the Pacifico (aka Sinaloa) drug cartel. The leader of that cartel, "Chapo" Guzman, who was rated by Forbes magazine as one of the 68 "most powerful people in the world."
The Sinaloa Cartel is by far the largest of the drug syndicates that
Despite the magnitude of the bank's money-laundering crime, the US
District Court in
The Observer quoted Jeffrey Sloman, who works for the
The case against Wachovia is just one example (the 'tip of the iceberg' according to the Observer) of an extraordinary relationship between transnational financial institutions and the international criminal organizations, such as the Pacifico.
As early as August 2006, an employee at Wachovia's
Among the transactions that aroused Woods' suspicions were sequentially numbered travelers checks for very large amounts of Euros, with dubious signatures. The transactions were linked to Mexican casas. Not only did Wachovia management ignore Woods' memos (suspicious activity reports, or SARs) it ordered Woods to abandon his investigation and began a campaign of harassment against the whistleblower, who finally left the bank in 2009.
While the Wachovia operation is the largest money laundering operation on record, it is by no means the only one. Another transnational financial institution, HSBC, came under investigation in August 2010. Meanwhile, Citibank's role in helping former President Carlos Salinas loot the Mexican treasury in the 1980s has been well documented.
Modern money laundering involves sophisticated operations, well
beyond the backroom dealings of the past. Money is often transferred among
dozens of "shell", or empty corporations, a process that has been compared to
the Russian Babushka dolls, with multiple layers. According to Woods, these
transactions no longer take place through tax havens such as the Cayman Islands
In Woods' own words: "These are the proceeds of murder and misery in
Woods continued: "Is it in the interest of the American people to
encourage both the drug cartels and the banks in this way? Is it in the interest
of the Mexican people? It's simple: if you don't see the correlation between the
money laundering by banks and the 30,000 people killed in
Woods added that after the settlement of the Wachovia case, "no one in the regulatory community has sat down with me and asked, 'What happened?' or 'What can we do to avoid this happening to other banks?'"
"They are not interested," he said. "They are the same people who attack the whistleblowers and this is a position the [British] Financial Services Authority at least has adopted on legal advice: it has been advised that the confidentiality of banking and bankers takes primacy over the public information disclosure act. That is how the priorities work: secrecy first, public interest second."
He charged that the practices at Wachovia were "symptomatic of the failure of the entire regulatory system to apply the kind of proper governance and adequate risk management which would have prevented not just the laundering of blood money, but the global crisis."
The US Office of the Comptroller of the Currency is allegedly still examining the Wachovia settlement to determine whether any officials are to be charged with a crime. In reality, this agency, charged with regulating the banks, is itself controlled by Wall Street and no serious indictments are expected.
The vast sums involved in the laundering of drug money helped provide liquidity for financial institutions during the 2008 financial crisis. According to Antonio Mara Costa, who heads the United Nations office on drugs and crime, the flow of crime syndicate money represented the only "liquid investment capital" available to banks at the height of the crisis. "Inter-bank loans were funded by money that originated from the drugs trade," he said. "There were signs that some banks were rescued that way."
The ever more intimate connection between the criminal mafias and
global financial institutions began in the late 1970s and early 1980s. Acosta
attributes the relationship between the criminal bosses and the financial