By Eric E. Sterling
“The drug war is weakening state institutions, infiltrating judicial systems and undermining rule of law,” all of which is bad for business, César Zamora, Nicaraguan businessman and vice president of the Association of American Chambers of Commerce in Latin America (AACCLA) told the Christian Science Monitor on February 16, 2012.
A criminal cancer is spreading through the global economy, taking its nutrition from the world-wide illegal drug business. In many countries, your travel agent, your lawyer, your banker or your telephone installer is as likely as an assassin or brothel manager to be working for a criminal organization. Almost everywhere, narco-dollars corrupt government officials and business agencies and fuel criminal opportunities.
The global illegal drug economy is not capable of precise measurement, but according to the latest report from the United Nations Office on Drugs and Crime, the retail market in illegal opiates is $68 billion (mostly heroin) and in cocaine, $85 billion. Their last valuation of the cannabis market was $142 billion in 2005.
Excluding the significant markets in methamphetamine, Ecstasy, psychedelics and other drugs, this is a criminal retail market in the range of $300 billion annually. Most of the markup is at the retail level. This enormous market is evidence that our efforts to stop the drug supply create the incentives that have grown a global criminal infrastructure of countless drug prohibition enterprises.
In 1984, 1986 and 1988, Congress injected the U.S. anti-drug effort with legal steroids. As counsel to the House Crime Subcommittee during the “war on drugs,” I helped write many of those laws. But those laws, as well as hundreds of billions of dollars in enforcement, have not protected business from the consequences of drug prohibition. This is in large part because neither Congress nor the business community have ever thought systematically about the drug business, drug enforcement and the economy.
In the early 1980s, I helped Congress investigate how drug money laundering was compromising legal casino gambling as the drug business responded to the Bank Secrecy Act. Congress heard, but did not understand, how our drug laws hurt a sector of American business. Congress pushed currency transaction reporting, for example.
The 8,000 reports filed in 1985 have grown to over 14,800,000 in FY2011. What had been a minor inconvenience is now a major responsibility that costs banks hundreds of millions of dollars annually. Despite this burden, the great untaxed profits of illegal drug sales worldwide have enabled local drug trafficking gangs to transform into global criminal organizations.
Drug prohibition enterprises corrupt bank officers and tellers, accountants, lawyers, financial advisors, real estate brokers, securities dealers, freight forwarders, shipping companies, airline employees, etc. to ship and pay for drugs, and to launder their receipts and profits. In one example, in March 2010, corruption was exposed in the Wachovia unit of Wells Fargo Bank, now the fifth largest U.S. bank by deposits. Wachovia was forced to disgorge $110 million and was fined $50 million for failing to internally police $378 billion in transactions with casas de cambio in Mexico that laundered drug profits. Businesses cannot count on the integrity of their agents or counterparts in such environments, and Wachovia’s shareholders paid an enormous price.
All over the world, drug organizations depend upon corrupting border guards, customs inspectors, police, prosecutors, judges, legislators, cabinet ministers, military officers, intelligence agents, financial regulators, and presidents and prime ministers. Businesses cannot count on the integrity of government officials in such environments.
Illegal drug organizations rely upon violence for conflict resolution, security, employee management, management succession, and influencing policy makers. Over the last two years, countless business leaders and their families have fled drug violence in Monterey, Mexico’s once-safe commercial capital, as the country has been rocked by some 50,000 killings related to control of the drug trade. Violence is pervasive, law enforcement is largely ineffective, and impunity for using violence is rampant. Not only in Mexico, but in Central America, the Caribbean, Colombia, West Africa, and parts of Asia where the prohibition-fueled drug trade is extant, business personnel are frequently in danger.
Domestically, there are additional consequences. In the 1980s, America’s crime rates were near historic highs. Congress took for granted that we needed to fight drugs with long sentences. Now crime rates are profoundly lower, but most analysts conclude long prison sentences have not been a major factor. The political dynamic of being tough on crime and drugs led to a dramatic expansion of the population with a criminal record. Those records are accessible by nearly every employer. Yet, few analysts have calculated the full impact of expanded criminal punishment that has reduced opportunities for education, job training, employment, credit, marriage, and ultimately, American productivity and consumer buying power.
Comments
I noticed that the President of Costa Rica has called for discussions of drug legalization in her country: http://www.bloomberg.com/news/2012-03-01/costa-rica-calls-for-debate-on-drug-legalization-amid-record-trafficking.html
Take a look at my recent blog post
http://justiceanddrugs.blogspot.com/2012/03/should-western-hemisphere-legalize.html
You can read the original, full interview with AACCLA’s Cesar Zamora here http://www.nicaraguadispatch.com/interviews/will-private-sector-propose-legalization-of-drugs/1340
The “DRUG WAR” is probably the biggest piece of shit the world has ever seen.
I give the USA government this ultimatum: You’ve got thirty days to “win” this war, or I am going to shut you down and close your doors.
At this time I am 68 years and have heard and seen a few things. People in positions you wouldn’t think use drugs. Even those that would surprise you – like a probation officer or a CD counselor. Then so many with business on both sides of the law. What a two-faced world we live in! We need desperately to wise up and alter our present drug policy. But then I have been hoping this for decades now.
This guy gets it. Its almost criminal to support the war on drugs. That doesnt mean you are pro drugs yourself or that everyone should take them if you feel the same. It just means that you are willing to admit that corruption is the natural course for prohibition to follow. Prohibition of Alcohol alone propped up criminal legacies still around today. There are no easy answers to doing this right but its easy to see we are not yielding any results other than disenfranchising our citizens and destroying neighborhoods. The money spent enforcing this war is astronomical and grows more violent offenders all the time because policing gets smarter and the stakes get higher. If there were really a war on drugs we’d have army bases and ships docked on every piece of land. The war is only a paper threat and it will never do what its supposed intention was.
The war on drugs illicits a breed of corruption too pervassive to combat anymore. Those so attached to it must be turned already or brainwashed. Disassembling it will prove difficult because of this. There are companies and banks that live off this war. From the companies that develop and sell tactical gear to the banks that shift dirty money in and out, all the way to the government agencies paid to fight this war. What Forbes should be addressing is how we figure out the cost of dismantling this war and how removing hundreds of billions from the global economy could damage a lot of influential peoples porfolios. Knowing this number, would the “business community” be concerned over reversing this war? Or would they diversify to adjust their positions? After all any drug dealer will tell ya…if it dont make dollars it dont make sense.
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Good article but you should have mentioned that in places that have legalized all drugs, drug use has gone down.
Portugal is a prime example.
Hard core addicts in Portugal go to a doctor who wants them to quit, not a dealer who wants them to buy more.
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I couldn’t agree more!! Legalization could tear the world of illegal drug sales to shreds. No more heartless pushers trying to sell to a nine year old on the street, no more deaths from a drug that was much more potent than was expected, sales conducted at legally licensed stores which would demand ID before a sale. The sale would consist of a drug with a known potency and conducted by a legally sanctioned agent trained for such sales. Records of sales would be required. Let’s tear their world to peices!!!
The second biggest business during alcohol prohibition in 1920s Detroit was liquor, at $215 million a year and employing an estimated 50,000 people. Authorities were not only helpless to stop it, many were part of the problem. During just one raid, the state police arrested Detroit Mayor John Smith, Michigan Congressman Robert Clancy, and Sheriff Edward Stein.
Just like their counter-parts of the 1920s, Drug cartels are eager and ready to show, that when it comes to business, they too, are completely non-partisan. They will buy-out and threaten politicians of any party; making deals with whoever can benefit them, and killing those who are brave or foolish enough to get in their way.
Prohibition comes with great human cost. If you support it you’re either a black market profiteer, a corrupt politician, a terrorist, a sadomoralistic fake-conservative, or an authoritarian wing-nut-socialist. As a prohibitionist, you’ve helped create a black market with massive incentives to hook both adults and children alike, while making these dangerous substances freely available in schools and prisons.
You’ve triggered the worst crime wave in history (ramping up extortion, kidnapping, carjacking and other crimes that directly prey on civilians), raised gang warfare to a level not seen since the days of alcohol bootlegging, and helped evolve local gangs into transnational enterprises with intricate power structures that reach into every corner of society, with significant social and military resources at their disposal.
Your insistence that only criminals should sell drugs has put previously unknown, dangerous, contaminated concoctions on our streets. Your aberrant ignorance has diverting scarce law-enforcement resources away from protecting peaceful citizens from YOUR ever-escalating prohibition-engendered mega-violence. – These are the very same citizens that you falsely claim to represent.
How can you even sleep at night, knowing that your actions are preventing the sick and dying from obtaining safe and effective medication? Knowing you are responsible for the horrific racial disparities which have bred generations of incarcerated and disenfranchised Afro Americans? Or knowing you’re promoting a policy which kills our children, endangers our law enforcement and military personnel, counteracts our foreign policy, and reduces much of the developing world to anarchy? Mexico has become “Afghanistan with margaritas” – the situation in both of these countries is a direct result of your beloved policy of prohibition!
Are you damn proud of your putrid prison-for-profit synergy with drug lords? Are you gung-ho happy that you’ve helped to escalate the number of people on welfare, who can’t find employment due to their felony status? Are you totally smug and satisfied now that our state and local governments have turned into one big gargantuan organized crime syndicate, interested only in protecting it’s own corrupt interests?
Neurotics build castles in the sky, psychotics live in them; the concept of a “Drug-Free Society” is a neurotic fantasy and Prohibition’s ills are the very product of this psychotic delusion. It is nothing less than a grotesque dystopian nightmare. if you support it then you’re either ignorant, stupid, brainwashed, corrupt, or criminally insane.
And even if you’re just willing to stand idly by while others ransack the church, prepare yourself for even more death, mutilation, corruption, unemployment, homelessness, the total and utter negation of The Bill of Rights, and a complete loss of the rule of law.
“All this is unmistakable progress in the ”war.” A year ago, some liberals predicted defeat because the emphasis was on law enforcement rather than addict treatment. Some conservative economists joined in the defeatism, waving the white flag of legalization – a route that would put cheap, mind-destroying chemicals in millions of school knapsacks.”
http://www.nytimes.com/1990/01/22/opinion/essay-state-of-the-drug-war.html
That was William Safire (1929-2009), writing in the New York Times way back in 1990 – the same guy who wrote (concerning Irak) that “freed scientists” wo
Friend, who were you writing to? Who were you screaming at?
I wonder if you were not confused about the views of the author of this piece. http://www.cjpf.org/about/biography
Good column.
Look at the damage the Bill of Rights has suffered under the guise of fighting drugs.
And the “War on Terror” compounds the problem.
Take a look at this speech presented to the Colorado Bar Association, “Is the Bill of Rights a Casualty of the War on Drugs?”
http://www.cjpf.org/old/drug/colorado_print.html
If drug policy were subject to the same sort of rigorous, evidence-based evaluations as say, building codes, the war on drugs would have ended long ago (by which I mean “ended” in a literal sense, not in the Drug Czar lying-through-his-teeth sense).
Given the intransigence of the federal government, I think the best way to go about ending prohibition would be to put a ballot initiative before the voters of California calling for the formation of a commission, composed exclusively of physicians and trained experts in public health, charged with evaluating the costs and benefits, to both public health and safety, of our current drug policy. Said commission would produce a package of recommended legislative changes to be put before the voters in a referendum.
The evidence of the last fifteen years suggests that the electorate is less hostile to science-based drug policy than is our political class.