THE WORLD WOULD EXPERINCE ECONOMIC COLLAPSE WITHOUT DRUG MONEY!!! so i suppose it's good that overpaid supply side law enforcement is against legalisation.
cop welfare
cop welfare
Ciudad Juarez: The Drug Economy Floods the World with Cash
by John Murray posted @2:33 PM
Obama's Drug Czar, Gil Kerlikowske, announced a few weeks ago that the
federal government would begin to shift its strategy in the War on
Drugs, to a focus on prevention, treatment and the public health
aspects of domestic drug use and addiction. A lot of people applauded
the policy shift as a step in the right direction. It reflects the
thinking that the best way to fight drugs isn't a frontal assault on
supply, but instead a campaign to reduce demand. This sort of tactic
is important, because it's less about stopping the drug trade itself
and more about trying to root out its causes.
But if the reasons for demand are the willingness of Americans to pay
money for drugs, the causes on the supply side are the willingness of
cartels to sell drugs for money. And when the profits they generate
are so substantial, the addiction to drug money is just as potent as
the addiction to drugs.
Right now, just over our border, there are several illicit, ultra-
violent, multi-billion dollar business entities operating on the scale
of transcontinental corporations. They employ hundreds of thousands of
people, and benefit hundreds of thousands more when the capital they
generate is disseminated into the larger economy. They wield enormous
power and influence in a country where the monetary output of their
illegal activity actually stacks up with the biggest legal industries
and exports.
When the recent war between these organizations first began, it was
ostensibly over territorial disputes within the industry. But now the
rhetoric of that fight has shifted, in places like Juarez and
Tamaulipas especially, to actually being about literal control of
those areas: about owning them.
There's no better example of how powerful the cartels are than the
fact that the Mexican government felt the need to declare 'war' on
them, as they might against a domestic rebellion or armed political
insurrection. And yet for the cartels, there is absolutely nothing
ideological or political at stake.
This is what makes the violence in Mexico categorically different from
any of the other conflicts we see in the world today. The cartels are
ultra-capitalists, willing to do whatever it takes to dominate an
industry where there are no rules, no oversight and no limits. Drugs
are illegal, but people still want them, and that makes them an
extremely profitable commodity. That's the way it was when Mexican
entrepreneurs first began smuggling and it's the way it is today.
Legalization aside then, the problem of drugs, while it should be
considered a public health issue, is an economic one.
Our streets are flooded with Mexican drugs; Mexico is flooded with
American drug money. And that money doesn't just stay in the hands of
criminals, sitting in a vault in some fortified mansion on a
hillside.
Legitimizing money is a big logistical problem for organized crime,
but that's less so in Mexico, where 75% of the economy is based on
cash transactions. Without any real system in place to track large
cash purchases, drug money is easily laundered into real estate and
business investments. There are countless businesses throughout
Mexico, including retails shops, car dealerships, dairies, farms,
restaurants and distribution companies that are run almost purely with
drug money.
But that money still gets paid out to employees, contributes to
legitimate enterprises and finds its way into the larger economy.
That's the danger that drug money presents. If the economy becomes
dependent on it, if people's livelihoods are at stake, it can be
extremely difficult to extricate.
And that's not just a Mexican problem. Recently, a former governor of
the state of Quintana Roo (home to Cancun), Mario Villanueva, was
extradited to the US on charges of accepting bribes and aiding the
operations of the Juarez cartel during his term as governor during the
1990s. It was a big arrest, and was seen as very good for the image of
the drug war, because it showed that even if it takes a decade, this
kind of corruption is eventually prosecuted and dealt with. It looked
especially good set against the current slow demise of the Juarez
cartel he once, apparently, worked for.
But even more distressing than his functional assistance to the cartel
may have been what he did with his earnings. Beginning in 1995 up
until the turn of the century, Villanueva laundered over $19 million
through various bank and brokerage accounts at Lehman Brothers. Some
of these accounts were in 'safe' locations like Switzerland and
Panama, but a great deal was also held in US accounts. Worse still, a
Lehman broker named Consuela Marquez admitted to knowingly laundering
the money for Villanueva and even to later liquidating $7 million of
it for him as he prepared to go on the run when his term ended amid
suspicion of his heavy involvement in drugs.
The case points to an imbalance between our views of drug crime and
our view of the financial crime necessary to sustain it. Villanueva
faces up to life in prison for his crimes of accepting bribes and
turning a blind eye to drug traffickers in his country. Marquez, for
willfully taking on millions in drug money and hiding it in licit
financial institutions for someone she knew was dirty, received
probation and one year of house arrest.
This is not an isolated incident. Raul Salinas, brother of former
Mexican president Carlos Salinas, was discovered to have $75 million
stashed in Swiss bank accounts when he was arrested on charges
stemming from a political assassination. Wachovia just settled for
$160 million in a suit claiming that their anti-money laundering
checks were inadequate, and that their accounts were used to launder
over $100 million in drug money. The UN representative in charge of
the office of Drugs and Crime even asserted that the world financial
system was saved, after its latest meltdown, by the presence of liquid
drug money in banks.
And what about the War on Drugs itself? If the cartels have
contributed to the world economy through the trickle-down effects of
the immense profits of the drug trade, then the US has contributed to
it through the money we've spent trying to stop the drug trade. We
allocate billions every year for tracking and prosecuting drug
criminals. We created the giant bureaucracy of the DEA, we send
billions in aid to Colombia and Mexico to attempt in vain to stop the
flow of drugs north. We've created an entire industry around trying to
stop an industry.
It's going to be just as important for us to wean our economy off the
support of drug money as it is to wean addicts off of drugs themselves
if we want to have a chance of actually reducing the impact of the
cartels and the violence they're able to create. Going after their
ability to hide, move and get access to their money is ultimately
going to be more effective than trying to stop them from earning it.
If we can devalue drug money by making it harder for it to be used,
even a little bit, it will be a big detriment to their ability to
operate. If we're serious about stopping them, we should be forcing
them to bury their money in backyards instead of at Lehman Brothers
and Wachovia.
Nowadays, money is ever more important for the cartels. As
technological advances in surveillance and weaponry have helped the
authorities become more vigilant in the fight against drug gangsters
over the years, the cartels have had to find ways to adapt, and that
takes enormous sums of money. The overhead it takes to avoid detection
in moving drugs from South America through Mexico into the US is
astronomical. It involves bribes, logistics, equipment. Then there's
the cost of defending yourself from competitors. Without an enormous
flow of cash, it wouldn't be possible for the cartels to operate. And
if we make it harder for drug money to be effective in buying the
things the cartels need to survive by doing a better job of tracking
and going after it, we'll make it harder for them to use it to bribe
and buy the right to exist.
John Murray is a lover of obscurity. He lives and writes in Arizona