Teflon President? Noose Tightens Around Uribe as Former Death Squad Leaders Spill the Beans

Last month's capture of Colombian drug lord Daniel "El Loco" Barrera by Venezuelan police was hailed as a "victory" in the "War on Drugs."

Barrera, accused of smuggling some 900 tons of cocaine into Europe and the U.S. throughout his infamous career, was described by Colombian President Juan Manuel Santos, who announced the arrest on national television, as "the last of the great capos."

But what of the "capo" who enjoyed high office, is wined and dined by U.S. corporations and conservative think-tanks, owns vast tracks of land, is a "visiting scholar" at a prominent American university (Georgetown) and now sits on the Board of Directors of Rupert Murdoch's News Corporation?

When will they be brought to ground?

A Family Affair

To clarify the questions above, one need look no further than the kid-gloves approach taken by the media when it comes to former Colombian President, the U.S. "Presidential Medal of Freedom" recipient Álvaro Uribe.

Accused by human rights organizations over his role in the forced disappearance of thousands of Colombians during two terms in office (2002-2010), Uribe may still land in the dock as a result of ongoing investigations by Colombia's Supreme Court into official corruption, drug trafficking and mass murder.

Recent arrests by Colombian authorities and revelations by the president's former allies however, are beginning to draw a circle around Uribe and the U.S. secret state in some of the hemisphere's worst human rights abuses of previous decades.

As the net tightens, members of the president's own family are sharply focused in the cross-hairs of investigators. Back in June, Antifascist Calling reported on the arrest of Ana Maria Uribe Cifuentes and her mother, Dolly Cifuentes Villa on drug trafficking and money laundering charges. The U.S Treasury Department froze their assets last year.

Accused by the Justice Department of having trafficked some 30 tons of cocaine into the U.S. as business partners of Sinaloa Cartel boss Joaquín "El Chapo" Guzmán, the women, members of the Cifuentes Villa crime family led by Dolly's brother, Jorge Milton Cifuentes Villa, are prominent members of Colombia's jet-setting narco-bourgeoisie.

According to the Justice Department, the investigation revealed that "the Cifuentes Villa drug trafficking organization was using sophisticated drug trafficking routes to distribute multi-ton cocaine loads from Colombia through Central America, for ultimate distribution in Mexico and the United States." In 2009, some 8.3 tons of cocaine which the family were attempting to export to Mexico were seized by law enforcement officials in Ecuador.

Federal prosecutors charged that the Cifuentes Villa family owns or controls 15 companies operating in Colombia, Mexico and Ecuador involved in a variety of ventures that supported their narcotrafficking enterprise.

Among the firms targeted were Linea Aerea Pueblos Amazonicos S.A.S., a newly-created airline operating in eastern Colombia, Red Mundial Inmobiliaria, S.A. de C.V., a real estate company located near Mexico City, along with Gestores del Ecuador Gestorum S.A., a consulting firm located in Quito, Ecuador.

It is also worth noting that the Cifuentes Villa organization, as the Center of Public Integrity reported, have also profited from illegal mining operations that traffic rare-earth minerals destined for the world market.

Accordingly, the Cifuentes Villa clan employed the same smuggling routes that trafficked cocaine to move precious metallic ores such as coltan and tungsten, used by the communications industry and weapons manufacturers, onto the international market. When the Treasury Department placed family members onto its drug kingpin list they identified their mining fronts as "a money-laundering operation in support of a cocaine-smuggling enterprise."

While U.S. media were mesmerized by the extradition of Sandra Ávila Beltrán, whom the press had dubbed "La Reina del Pacífico" (The Queen of the Pacific), over her lavish lifestyle and family ties to legendary Mexican drug lord Miguel Ángel Félix Gallardo, onetime godfather of the Guadalajara Cartel, Uribe's relatives inexplicably "disappeared" from "court records and authorities were unable to pinpoint the pair's whereabouts," Colombia Reports informed us.

Imagine that.

For his part, the former president denied allegations leveled against his brother Jaime, who died in 2001, and claimed that unnamed "criminals," who conducted "business" from his brother's car phone had cloned it. He also "denied any knowledge of his brother's relationship with Cifuentes or the existence of his niece, despite a birth certificate that was uncovered proving Jaime Uribe was her father," Colombia Reports averred.

What Uribe continues to gloss over however, is the inconvenient fact that brother Jaime had been arrested and interrogated by the Colombian Army after investigators recorded calls \made from his phone to none other than Pablo Escobar, the Nuevo Arco Iris political research center in Bogotá disclosed.

Among the unanswered questions surrounding these recent arrests, investigative journalist Daniel Hopsicker wondered: "Did Álvaro Uribe okay the loading of 3.6 tons of cocaine at an airport he controlled in Rio Negro Colombia onto a 'former' CIA Gulfstream (N987SA) jet from St. Petersburg Florida that crashed in the Yucatan in 2007?"

That fateful crash eventually led to the deferred prosecution agreement between the U.S. federal government and Wachovia Bank, fined $160 million for laundering some $378 billion for Mexico's Sinaloa Cartel, "business associates" of the Cifuentes Villa clan.

More pointedly Hopsicker asked: "Why did two successive U.S. Administrations lavish billions of dollars to stop drug trafficking on a President of Colombia who was himself involved in the drug trade?"

As the investigative net is drawn around the family of the former president, another Uribe brother, Santiago, "is facing a criminal investigation for the alleged founding and leading of a paramilitary group," Colombia Reports disclosed.

Investigations into that group, the notorious death squad the 12 Apostles, again surfaced when The Washington Post revealed that a former police chief, Juan Carlos Meneses, charged that Santiago "led a fearsome paramilitary group in the 1990s ... that killed petty thieves, guerrilla sympathizers and suspected subversives."

Meneses, who fled to Venezuela with his family, disclosed that the "group's hit men trained at La Carolina, where the Uribe family ran an agro-business in the early 1990s." For services rendered, Meneses told the Post "he received a monthly payment of about $2,000 delivered by Santiago Uribe."

The former police official said he came forward "because associates in the security services warned him he would soon be killed for knowing too much."

"The revelations," according to the Post, "threaten to renew a criminal investigation against Santiago Uribe and raise new questions about the president's past in a region where private militias funded with drug-trafficking proceeds and supported by cattlemen wreaked havoc in the 1990s. The disclosures could prove uncomfortable to the United States, which has long seen Uribe as a trusted caretaker of American money in the fight against armed groups and the cocaine trade."

"Uncomfortable" perhaps, but not surprising given the U.S. track record in support of drug-trafficking death squads, especially those which advanced corporate America's geopolitical interests throughout Latin America.

"Meneses," the Post averred, "is the first close collaborator of the 12 Apostles to speak publicly about the group's inner workings. His declarations are also the most extensive recounting by a security services official of how Colombia's militarized police and its army worked in tandem with death squads in one community--a model that investigators of the paramilitary movement say was duplicated nationwide."

For his part, the former president accused human rights' activists who have leveled charges against his family "of being guerrilla stooges who disseminate false accusations against his government."

However, Nobel Peace Prize laureate, Adolfo Pérez Esquivel, who was present when Meneses recounted his story during a taped interview in Buenos Aires, told the Post that the former police chief "'incriminates himself and also the brother of the president who managed the paramilitary group, but also President Uribe'."

Interestingly enough, Uribe's appointment to News Corp's board came while the former president is under investigation for illegally wiretapping human rights activists, journalists, Supreme Court justices and opposition politicians.

His former chief of staff is currently in jail awaiting trial on criminal wiretapping charges and his former secret police chief, Maria Pilar Hurtado, fled Colombia and sought asylum in Panama before similar charges could be filed against her.

And with two more senators now under investigation for suspected ties to paramilitary death squads Colombia Reports averred, Uribe's teflon armor is slowly being chipped away.

Parapolitical Scandal

If, as Voltaire once said, "the history of the great events of this world are scarcely more than the history of crime," what of the powerful actors who have looted entire nations and did so while serving the interests of their imperialist overlords?

Dubbed the "parapolitical scandal" by Colombian media, the investigation was set in motion when leftist opposition politician, Clara López Obregón, formally denounced and provided evidence in 2005 to the Supreme Court of links between drug trafficking organizations, the military/intelligence apparatus, right-wing death squads and members of Congress, including prominent officials of Álvaro Uribe's then-governing coalition.

That investigation gathered steam when a laptop was seized by authorities in 2006 from Rodrigo Tovar Pupo, alias Jorge 40, a leader of the Northern Bloc of the Autodefensas Unidas de Colombia (United Self-Defense Forces of Colombia, or AUC).

The origins of the AUC can be traced to the take-down of the Medellín Cartel and murder of "cocaine king" Pablo Escobar by rival drug organizations, principally the Cali Cartel run by the Rodríguez Orejuela brothers, who were provided logistical support and firepower by the CIA and U.S. Delta Force commandos to eliminate the competition.

An umbrella group comprised of far-right militants and drug capos aligned with Colombia's ruling class, the AUC and splinter groups such as the Águilas Negras, or Black Eagles, and the Ejército Revolucionario Popular Antiterrorista Colombiano (Popular Revolutionary Anti-Terrorist Army of Colombia, ERPAC), derive the bulk of their income from drug trafficking as they wage war against the leftist Fuerzas Armadas Revolucionarias de Colombia (Revolutionary Armed Forces of Colombia, or FARC), trade unionists and land reform activists.

Readers will recall that during the 1980s both the Medellín and Cali cartels were given a leg up by the Reagan administration's CIA as funds derived from the drug trade were diverted to the Nicaraguan Contras as part of the administration's anti-Communist crusade in Central America.

In fact, as the Agency was forced to admit in the wake of "suicided" journalist Gary Webb's "Dark Alliance" investigation, the CIA and Reagan's Justice Department agreed to a Memorandum of Understanding that handed their dope-dealing Contra assets get-out-of-jail-free cards.

As political fallout from the latest "War on Drugs" scandal--the "gun walking" Fast and Furious affair that put thousands of high-powered weapons into the hands of cartel killers in Mexico--hovers like a radioactive cloud over the Justice Department, the old watchword of the 1980s, "drugs in, guns out," is all the more timely.

And like the Contras, the AUC were more than simply an enforcement arm of Colombia's narco-elites; they served as an unofficial though deadly instrument, to preserve the status quo. For Washington policy makers, this meant continued access by U.S. petroleum corporations, mining and agro-business interests to Colombia's vast wealth. If thousands of tons of cocaine entered the United States as the price for stamping out "leftist subversion," then so be it.

Along with incriminating evidence that linked Tovar's gang to 550 murders, it later emerged that Tovar was a close political associate of Jorge Noguera, the former head of DAS, the Departamento Administrativo de Seguridad (Administrative Department of Security), the Colombian equivalent of the CIA.

Noguera's links to Tovar came to light when his deputy, Rafael García Torres, DAS's former chief of Information Technologies, was arrested and charged by Supreme Court investigators of accepting bribes from right-wing sicarios (assassins) and drug traffickers in exchange for erasing their criminal histories, along with those of the Cifuentes Villa clan, from the state intelligence database.

In his testimony, García charged that Noguera, a Uribe crony, collaborated with Tovar's Northern Bloc in a coordinated move by the AUC to support local, regional and national candidates for office who supported their hardline against the left.

More recently, the not-so-hidden hand of the United States emerged.

The Washington Post reported that "American cash, equipment and training, supplied to elite units of the Colombian intelligence service over the past decade to help smash cocaine-trafficking rings, were used to carry out spying operations and smear campaigns against Supreme Court justices, Uribe's political opponents and civil society groups."

Post reporters Karen DeYoung and Claudia J. Duque disclosed that despite billions of dollars of aid supplied by U.S. taxpayers under Plan Colombia, "the DAS under Uribe emphasized political targets over insurgents and drug lords."

In fact, Colombia prosecutors told the Post that the "Uribe government wanted to 'neutralize' the Supreme Court because its investigative magistrates were unraveling ties between presidential allies in the Colombian congress and drug-trafficking paramilitary groups."

Based on "thousands of pages of DAS documents and the testimony of nine top former DAS officials, the prosecutors say the agency was directed by the president's office to collect the banking records of magistrates, follow their families, bug their offices and analyze their court rulings."

These black operations however, were not the work of a few proverbial "bad apples" but were a direct result of projects designed by the CIA.

"Some of those charged or under investigation have described the importance of U.S. intelligence resources and guidance," the Post disclosed, "and say they regularly briefed embassy 'liaison' officials on their intelligence-gathering activities."

"'We were organized through the American Embassy,' said William Romero, who ran the DAS's network of informants and oversaw infiltration of the Supreme Court. Like many of the top DAS officials in jail or facing charges, he received CIA training. Some were given scholarships to complete coursework on intelligence-gathering at American universities."

As with the previous Clinton and Bush regimes, the Obama administration vociferously denies any knowledge of corrupt practices by Colombian officials and in fact, "anti-drug" programs such as Plan Colombia "are viewed as so successful that it has become a model for strategy in Afghanistan," the Post reported.

By 2012 however, some 139 members of Congress were under investigation; five governors and 32 lawmakers, including President Uribe's cousin, Mario Uribe Escobar, a former President of Congress, were convicted of paramilitary ties and subsequently jailed.

In late August, former Colombian senator Jorge Visbal, a Uribe ally, "was charged with the promoting and financing of paramilitary groups, held responsible for tens of thousands of human rights violations," Colombia Reports disclosed.

"Former AUC leader Salvatore Mancuso testified before Colombian prosecutors that Visbal had an 'identical ideology' to the extreme-right paramilitaries and, on behalf of the cattle ranchers, brought 'information and suggestions' to meetings with paramilitary leaders to secure the expansion of paramilitary power in the north of Colombia."

Mancuso, who took over the AUC when Israeli-trained narcotrafficker and death-squad führer Carlos Castaño "disappeared" in 2004, said during recent court proceedings that Uribe was aware that the organization supported his campaign for president in 2002 "economically and logistically," according to Colombia Reports.

Prior to his arrest, the human rights organization Equipo Nizkor reported that Mancuso, the son of Italian immigrants, along with being an AUC "godfather," was also a member of the 'Ndrangheta, "the powerful Calabrian mafia which according to Italian police, exceeds the Sicilian Cosa Nostra in both strength and size."

In fact, when Italian anti-Mafia prosecutor Nicola Gratteri flew to Bogotá to investigate the 'Ndrangheta's Colombian drugs network, Gratteri was told by Mancuso he had spied on him the entire time.

"I was in the center of Bogotá, with lots of security protecting me. I didn't know that all the armored cars that I could see around my hotel belonged to Mancuso," Gratteri told The Daily Beast. "He told me his protection consisted of 600 men! Not even the U.S. President has such an escort. Can you imagine how much money he had?"

Mancuso claimed Uribe was aware of the AUC's backing. "There were previous meetings with members of Álvaro Uribe's campaign, including those delegates that asked us to decrease military operations because it was affecting the campaign and image of the candidate," Mancuso said.

During those same proceedings, another former AUC leader, Jorge Ivan Laverde, alias "El Iguano," said that "no evidence exists of these financial transactions because the groups burned all of their paramilitary records before they demobilized."

Rather conveniently, one might say.

"According to El Iguano," Colombia Reports disclosed, "the support of the ex-president all began when the righthand man of AUC creator Carlos Castaño called all groups to give them the order that they must support the Uribe campaign and spend money where necessary."

The former president denounced these claims and said he would launch "a criminal complaint against the former paramilitary for libel."

However, former Congressman Miguel Alfonso de la Espriella, who was part of Uribe's coalition government and later sentenced for ties to the AUC, told prosecutors in September that Uribe "knew he was receiving support from paramilitary groups during his 2002 election campaign," Colombia Reports disclosed last month.

The now-disgraced politician said that Uribe "never objected" to meeting with the AUC-backed politicians, but "simply maintained a prudent silence."

In a recent interview, de la Espriella told El Espectador that the AUC had donated some $134 thousand to Uribe's 2002 presidential campaign.

The former senator told the paper that Mancuso said "our participation in the self defense forces was to seek a deal with his [Uribe's] government. He [Uribe] did not explicitly reject this possibility or the support. What he did say was that we wait and if he got elected we would talk again."

More recently, Uribe's jailed ex-security chief, Mauricio Santoyo Velasco, accused of illegally ordering driftnet surveillance over electronic communications and the forced disappearance of human rights workers in Medellín, "is willing to officially testify against his old boss and other senior officials," according to Colombia Reports.

Santoyo is presently jailed in the U.S. for collaborating with the AUC and "previously acknowledged accepting bribes from paramilitary members in exchange for giving them information about police operations being carried out against them."

According to "highly credible sources" cited by Colombia Reports, Santoyo "is willing to implicate the ex-president and other top officials," in exchange for a "reduced sentence."

Although U.S. prosecutors previously said that the Santoyo case was the "tip of the iceberg" and an opposition senator accused the former president of bringing "a criminal apparatus" to the presidential palace in 2002, the current director of Colombia's National Police, General José Roberto León Riaño, denied that the U.S. is investigating anyone other than Santoyo.

"Yesterday I personally interviewed the toughest prosecutor of the United States on the matter of drug trafficking, Neil MacBride, who is running the case against [retired general Mauricio] Santoyo," Colombia Reports averred. "He indicated: 'there are bad apples in every institution, Santoyo is an apple that acted on his own, but that can't affect the whole organization'."

While evidence has yet to emerge that Uribe met with Mancuso as the former AUC chief testified, ubiquitous "facts on the ground" in the form of thousands of tons of exported dope, forced "disappearances" and the mass murder of peasants and left-wing activists tell a different tale and point to official complicity amongst Colombian elites and their U.S. "drug war" sponsors.

Back to the Future: U.S. Complicity and Cover-Up

The sordid history of collaboration between Colombian elites, drug gangs, the military and right-wing death squads was known for years by U.S. secret state agencies and federal prosecutors but was covered-up in the interest of "national security."

In declassified documents published by the National Security Archive in 2004, we learned that then Senator "Álvaro Uribe Vélez of Colombia was a 'close personal friend of Pablo Escobar' who was 'dedicated to collaboration with the Medellín [drug] cartel at high government levels,' according to a 1991 intelligence report from U.S. Defense Intelligence Agency (DIA) officials in Colombia."

Researcher Michael Evans revealed that the "newly-declassified report, dated 23 September 1991, is a numbered list of 'the more important Colombian narco-traffickers contracted by the Colombian narcotic cartels for security, transportation, distribution, collection and enforcement of narcotics operations'."

The former president, a "key U.S. partner in the drug war" and a major recipient of billions of dollars of taxpayer-supplied funds for Plan Colombia, "was linked to a business involved in narcotics activities in the United States" and "has worked for the Medellín cartel."

Evans disclosed that "The document is marked 'CONFIDENTIAL NOFORN WNINTEL,' indicating that its disclosure could reasonably be expected to damage national security, that its content was based on intelligence sources and methods, and that it should not be shared with foreign nationals."

One cannot help but ask: whose "national security" was threatened by the disclosure? Certainly not that of thousands of Colombian citizens murdered by drug-linked paramilitary gangsters or the hundreds of thousands of "drug war" victims incarcerated in American gulags for drug use or low-level sales.

"Uribe," the Archive informed us, was "the 82nd name on the list," and appeared "on the same page as Escobar and Fidel Castaño, who went on to form the country's major paramilitary army, a State Department-designated terrorist group now engaged in peace negotiations with the Uribe government. Written in March 1991 while Escobar was still a fugitive, the report was forwarded to Washington several months after his surrender to Colombian authorities in June 1991."

"Most of those on the list are well-known drug traffickers or assassins associated with the Medellín cartel," Evans averred. "Others listed include ex-president of Panama Manuel Noriega [and] Iran-contra arms dealer Adnan Khashoggi."

Four years later in another release of previously classified documents, the Archive revealed that "U.S. espionage operations targeting top Colombian government officials in 1993 provided key evidence linking the U.S.-Colombia task force charged with tracking down fugitive drug lord Pablo Escobar to one of Colombia's most notorious paramilitary chiefs."

"The documents," Evans wrote, "reveal that the U.S.-Colombia Medellín Task Force, known in Spanish as the Bloque de Búsqueda or 'Search Block,' was sharing intelligence information with Fidel Castaño, paramilitary leader of Los Pepes (Perseguidos por Pablo Escobar or 'People Persecuted by Pablo Escobar'), a clandestine terrorist organization that waged a bloody campaign against people and property associated with the reputed narcotics kingpin."

After Escobar's take-down, Los Pepes morphed into the AUC and led to a strategic realignment "between Colombian intelligence agencies, rival drug traffickers and disaffected former Escobar associates like Castaño, the godfather of a new generation of narcotics-fueled paramilitary forces that still plagues Colombia today."

"The collaboration between paramilitaries and government security forces evident in the Pepes episode is a direct precursor of today's 'para-political' scandal," said Evans. "The Pepes affair is the archetype for the pattern of collaboration between drug cartels, paramilitary warlords and Colombian security forces that developed over the next decade into one of the most dangerous threats to Colombian security and U.S. anti-narcotics programs. Evidence still concealed within secret U.S. intelligence files forms a critical part of that hidden history."

In this context, as Peter Dale Scott observed in Drugs, Oil, and War, "The true purpose of most of these campaigns has not been the hopeless ideal of eradication. It has been to alter market share: to target specific enemies and thus ensure that the drug traffic remains under the control of those traffickers who are allies of the Colombian state security apparatus and/or the CIA."

"Allies" like Álvaro Uribe.

Black Dossier 2: HSBC & the Global Drug Trade

Death penalty doesn't mean anything unless you use it on people who are afraid to die. Like... the bankers who launder the drug money. The bankers, who launder, the drug money. Forget the dealers, you want to slow down that drug traffic, you got to start executing a few of these fucking bankers. White, middle class Republican bankers. -- George Carlin, 'Back in Town Special,' 1996

In a recent investigation I presented the case that British banking and financial giant HSBC conspired with banking institutions with documented links to terrorist financing, including those responsible for helping bankroll the 9/11 attacks.

Drawing upon evidence published by the Senate Permanent Subcommittee on Investigations in their mammoth report, "U.S. Vulnerabilities to Money Laundering, Drugs, and Terrorist Financing: HSBC Case History," we learned that senior HSBC officers, despite misgivings voiced by staff in internal correspondence, choose to continue profitable relations with Saudi Arabia's Al Rajhi Bank, described by U.S. law enforcement agencies as moneymen for the CIA's false flag specialists, Al Qaeda.

The same callous indifference which guided bank policy when it came to financing terrorists was HSBC's modus operandi as they aided and abetted drug money laundering by some of the most violent gangsters on earth.

And with "all criminal proceeds ... likely to have amounted to some 3.6 per cent of GDP (2.3-5.5 per cent) or around US$2.1 trillion in 2009," as the United Nations Office on Drugs and Crime (UNODC) pointed out in that agency's 2011 report, Estimating Illicit Financial Flows Resulting from Drug Trafficking and Other Transnational Crimes, the incentives for big banks to continue inflating their balance sheets with funds derived from global crime are compelling.

A Leg Up for Chapo

While it is oft said that "crime doesn't pay," that's only true if you aren't amongst the privileged few with enough cash and connections to avoid a trip to the slammer.

"Over the last decade," Senate investigators reported, "the U.S. Senate Permanent Subcommittee on Investigations has worked to strengthen U.S. AML efforts by investigating how money launderers, terrorists, organized crime, corrupt officials, tax evaders, and other wrongdoers have utilized U.S. financial institutions to conceal, transfer, and spend suspect funds."

In the wake of the 9/11 attacks, the Subcommittee focused "on how U.S. banks, through the correspondent services they provide to foreign financial institutions, had become conduits for illegal proceeds associated with organized crime, drug trafficking, and financial fraud."

The report underlined the key role that correspondent banking plays in washing illegal proceeds through the system. Senate investigators averred that "Correspondent banking occurs when one financial institution provides services to another financial institution to move funds, exchange currencies, cash monetary instruments, or carry out other financial transactions."

For HSBC's Canary Wharf masters, the U.S. affiliate was a key part of their strategy to expand the bank's tentacles into the lucrative North American market and they did so by standing up HSBC Bank USA N.A. (HNAH), better known as HBUS.

Indeed, a senior executive told the Subcommittee that the bank "acquired its U.S. affiliate, not just to compete with other U.S. banks for U.S. clients, but primarily to provide a U.S. platform to its non-U.S. clients and to use its U.S. platform as a selling point to attract still more non-U.S. clients."

Clients like Chapo Guzmán, the fugitive billionaire who runs Mexico's Sinaloa Cartel.

Investigators found that "until recently," that is, only after top officials were apprised of increased scrutiny by regulators, that "HSBC Group policy instructed its affiliates to assume that all HSBC affiliates met the Group's AML standards and to open correspondent accounts for those affiliates without additional due diligence."

"For years," Senate staff noted, "HBUS followed that policy, opening U.S. correspondent accounts for HSBC affiliates without conducting any AML due diligence. Those affiliates have since become major clients of the bank." In other words, liquidity trumped inconvenient rules and regulations which after all, following Leona Helmsley's maxim, only applied to "little people."

"In 2009, for example, HBUS determined that 'HSBC Group affiliates clear[ed] virtually all USD [U.S. dollar] payments through accounts held at HBUS, representing 63% of all USD payments processed by HBUS.' HBUS failed to conduct due diligence on HSBC affiliates despite a U.S. law that has required all U.S. banks, since 2002, to conduct these due diligence reviews before opening a U.S. correspondent account for any foreign financial institution, with no exception made for foreign affiliates."

One HSBC affiliate which amply illustrated the bank's shady proclivities was HSBC Mexico, known as HBMX. The Subcommittee asserted that "HBUS should have, but did not, treat HBMX as a high risk correspondent client subject to enhanced due diligence and monitoring. HBMX operated in Mexico, a country under siege from drug crime, violence and money laundering; it had high risk clients, such as Mexican casas de cambios and U.S. money service businesses; and it offered high risk products, such as U.S. dollar accounts in the Cayman Islands."

Despite the risks, "from 2007 through 2008, HBMX was the single largest exporter of U.S. dollars to HBUS, shipping $7 billion in cash to HBUS over two years, outstripping larger Mexican banks and other HSBC affiliates."

The Subcommittee noted that "Mexican and U.S. authorities expressed repeated concern that HBMX's bulk cash shipments could reach that volume only if they included illegal drug proceeds. The concern was that drug traffickers unable to deposit large amounts of cash in U.S. banks due to AML controls, were transporting U.S. dollars to Mexico, arranging for bulk deposits there, and then using Mexican financial institutions to insert the cash back into the U.S. financial system."

But as we previously learned when we explored cosy relations between suspected terrorist financiers at the Al Rajhi Bank and HSBC's London Banknotes division, senior managers cared not a whit that billions of dollars entering the United States from Mexico came from laundered drug money.

Gateway for Narcodollars

One "line of business" that proved particularly lucrative for the bank and their drug lord clients was the "Global Banking and Markets" division. Operating in some 60 countries, the office provided a wide range of "'tailored financial solutions' to major government, corporate, and institutional clients."

"This line of business," Senate investigators reported, "includes an extensive network of correspondent banking relationships, in which HBUS provides banks from other countries with U.S. dollar accounts to transact business in the United States. Due to its affiliates in over 80 countries, HSBC is one of the largest providers of correspondent banking services in the world."

What made this division particularly prone to manipulation was its brief to provide "access to the U.S. financial system by handling international wire transfers, clearing a variety of U.S. dollar instruments, including travelers cheques and money orders, and providing foreign exchange services. HBUS Payment and Cash Management (PCM) is a key banking division, located in New York, that supports HBUS' correspondent relationships."

Senate staff reported that until 2010, "HBUS housed the Global Banknotes Department, which used offices in New York City, London, Hong Kong, and elsewhere to buy, sell, and ship large amounts of physical U.S. dollars."

"The Banknotes Department," investigators disclosed, "derived its income from the trading, transportation, and storage of bulk cash, doing business primarily with other banks and currency exchange businesses, but also with HSBC affiliates."

It doesn't take a rocket scientist to suspect that unscrupulous managers, once the wheels were sufficiently greased by clients such as Chapo Guzmán or cartel moneyman Pedro Alatorre, wouldn't bend over backwards to clear dodgy transactions whatever the source.

Despite suspicions that all wasn't well, "for a number of years, HBUS held a contract with the U.S. Federal Reserve Bank of New York (FRBNY) to operate U.S. currency vaults in several cities around the world to assist in the physical distribution of U.S. dollars to central banks, large commercial banks, and businesses involved with currency exchange."

Undoubtedly, readers are aware that current U.S. Treasury Secretary Timothy Geithner, a former employee of Kissinger Associates was past president of FRBNY. From his perch at the New York Fed, Geithner worked assiduously to reduce the capital required to run a bank; an additional factor which led to the mammoth train wreck known as the 2008 capitalist economic crisis.

A protégé of former Treasury Secretary Robert Rubin, a Board Chairman of Goldman Sachs and one-time CEO at drug-tainted Citigroup, Geithner, in addition to a stint as a "Senior Fellow" at the Council on Foreign Relations, oversaw the $350 billion swindle known as the Troubled Asset Relief Program (TARP) which bailed out his good friends at Goldman and AIG in the wake of Lehman Brothers collapse.

As Senate staff reported, HBUS' "'Global Asset Management' line of business offers worldwide investment management services to clients, and currently manages nearly $400 billion in assets. It is one of the largest investment businesses in the world."

Through their correspondent banking and Payments and Cash Management businesses, "HBUS has become one of the largest facilitators of cash transfers in the world. Between 2005 and 2009," investigators informed us, "the total number of PCM wire transactions at HBUS grew from 20.4 million to 30.2 million transfers per year, with a total annual dollar volume that climbed from $62.4 trillion to $94.5 trillion."

In 2008 alone according to Subcommittee findings, "HBUS processed about 600,000 wire transfers per week. In 2009, PCM was the third largest participant in the CHIPS wire transfer service which provides over 95% of U.S. dollar wire transfers across U.S. borders and nearly half of all wire transfers within the United States, totaling $1.5 trillion per day and over $400 trillion in 2011."

How many of these trillions of dollars in wire transfers handled by HBUS were the result of illegal money laundering by drug gangsters? According to United Nations Office on Drugs and Crime estimates, with some 3.6 percent of global GDP resulting from "criminal proceeds," amounting to some $2.1 trillion in 2009 alone, certainly billions in hot money washed through the U.S. financial system while no one was looking.

Shooting the Messenger

While senior officers turned a blind eye to the bank's criminal practices, honest officials who tried to warn HSBC higher-ups that there were severe deficiencies in monitoring dodgy transactions faced retaliation.

As a result of losses suffered by HSBC's purchase of Household International and its portfolio of bad mortgages, the bank turned down requests to expand personnel at its Anti-Money Laundering division.

Despite the fact that "Compliance and AML staffing levels were kept low for many years as part of a cost cutting measure," Senate investigators learned through HSBC internal correspondence that those charged with monitoring suspicious transactions were "struggling to 'handle the growing monitoring requirements' associated with the bank's correspondent banking and cash management programs, and requested additional staff."

Compliance officer Alan Ketley wrote higher-ups that despite having "very efficient processes," his Compliance team was "handling an average of 3,800 [alerts] per person and [was] becoming overwhelmed thus potentially placing the business and the bank at risk."

"Despite requests for additional AML staffing," the Senate reported, "HBUS decided to hold staff levels to a flat headcount."

"After being turned down for additional staff, Carolyn Wind, longtime HBUS Compliance head and AML director, raised the issue of inadequate resources with the HNAH board of directors. A month after the board meeting, after seven years as HBUS' Compliance head Ms. Wind was fired," Senate investigators disclosed.

Wind, who had met with HNAH's board in October 2007 to discuss staffing, was reprimanded by her supervisor, Regional Compliance Officer and Senior Executive Vice President Janet L. Burak, for raising the issue. In an email to disgraced HSBC Group Compliance chief David Bagley, who dramatically resigned on camera during Senate hearings in July, Burak "expressed displeasure" with Wind. She told Bagley:

"I indicated to her [Ms. Wind] my strong concerns about her ability to do the job I need her to do, particularly in light of the comments made by her at yesterday's audit committee meeting .... I noted that her comments caused inappropriate concern with the committee around: our willingness to pay as necessary to staff critical compliance functions (specifically embassy banking AML support), and the position of the OCC with respect to the merger of AML and general Compliance."

In other words, because Wind had challenged shoddy staffing practices that led the institution into dangerous waters, she was fired by higher-ups more concerned with inflating the balance sheet, and raising their own profiles and salaries in the process, rather than complying with the law.

And despite a mountain of unresolved "alerts" and "suspicious activity reports," and with only eight Compliance officers under "rigorous pressure to complete manual reviews of about 30,000 OFAC [Office of Foreign Assets Control] alerts per week," Senate investigators found serious "deficiencies in the quality of the work" which required "an independent assessment. The independent assessment found that 34% of the alerts supposedly resolved had to be re-done."

While HSBC has cut some 27,000 jobs since 2011, the scandal-plagued bank still managed a 26 percent rise in 2012 first-quarter profits to the tune of $6.8bn (£4.18bn) according to The New York Times, attributed to "growth in its Asian and Latin American banking businesses [that] more than made up for a slump in Europe."

Why if one were inclined to believe various "conspiracy theories," one would almost believe that banks actually sought out dirty money from drug traffickers as a splendid means to bulk-up the bottom line.

Like Spots on a Hyena

As with other banks caught-up in recent money laundering scandals, HSBC's Mexican affiliate is a case study in how banks get away with murder. Senate investigators disclosed that HBMX "illustrates how providing a correspondent account and U.S. dollar services to a high risk affiliate increased AML risks for HBUS."

Created when HSBC Group purchased the Bital bank in 2002, we learned that a "pre-purchase review disclosed that the bank had no functioning compliance program, despite operating in a country confronting both drug trafficking and money laundering."

"For years," the Senate reported, "HSBC Group knew that HBMX continued to operate with multiple AML deficiencies while serving high risk clients and selling high risk products. HSBC Group also knew that HBMX had an extensive correspondent relationship with HBUS and that suspect funds moved through the HBMX account, but failed to inform HBUS of the extent of the AML problems at HBMX so that HBUS could treat HBMX as a high risk account. Instead, until 2009, HBUS treated HBMX as low risk."

As in the case of Wachovia, "HBMX engaged in many high risk activities. It opened accounts for high risk clients, including Mexican casas de cambios and U.S. money service businesses, such as Casa de Cambio Puebla and Sigue Corporation which later legal proceedings showed had laundered funds from illegal drug sales in the United States."

Undeterred by the risks involved, HBMX "offered high risk products, including providing U.S. dollar accounts in the Cayman Islands to nearly 50,000 clients with $2.1 billion in assets, many of which supplied no KYC information and some of which misused their accounts on behalf of a drug cartel."

"HBMX was also the single largest exporter of U.S. dollars to HBUS, transferring over $3 billion in 2007 and $4 billion in 2008, amounts that far outstripped larger Mexican banks and other HSBC affiliates," investigators disclosed.

Indeed, "Mexican and U.S. law enforcement and regulatory authorities expressed concern that HBMX's bulk cash shipments could reach that volume only if they included illegal drug proceeds that had been brought back to Mexico from the United States."

So blatant were HSBC's dodgy practices that for a three-year period between 2006-2009, Senate investigators discovered that "HBUS failed to conduct any AML monitoring of its U.S. dollar transactions with HSBC affiliates, including HBMX, which meant that it made no effort to identify any suspicious activity, despite the inherent risks in large cash transactions."

Proving that crime pays if you're well connected, "HBMX used those accounts to process U.S. dollar wire transfers, clear bulk U.S. dollar travelers cheques, and accept and make deposits of bulk cash, all of which exposed, not only itself, but also HBUS, to substantial money laundering risks."

"HSBC Group also compounded the AML risks by failing to alert HBUS to HBMX's ongoing, severe AML deficiencies," the Senate reported. But why would they? Given Carolyn Wind's firing when she sought to increase staff who might be in position to monitor shady transactions from a very profitable Mexican affiliate, one can only conclude that higher-ups were more than happy to turn a blind eye when it came to illegal practices.

A 2006 State Department International Narcotics Control Strategy Report (INCSR), noted that Mexico is a country of "primary" concern for money laundering, its highest rating.

"The State Department's relentlessly negative assessments of Mexico's drug trafficking and money laundering vulnerabilities continued unabated," Senate investigators observed.

"In 2008, the State Department wrote that 'U.S. officials estimate that since 2003, as much as U.S. $22 billion may have been repatriated to Mexico from the United States by drug trafficking organizations'."

"Four years later, in 2012" Senate staff averred, "the State Department wrote that drug cartels were using Mexican and U.S. financial institutions to launder as much as $39 billion each year: 'According to U.S. authorities, drug trafficking organizations send between $19 and $39 billion annually to Mexico from the United States'."

"As a consequence," of HBMX's "lowest-risk rating" the Senate reported, "under HSBC Group policy, clients from Mexico were not subjected to enhanced monitoring by HBUS, unless they were also designated a Special Category Client (SCC), a relatively rare designation that indicates a client poses high AML risks."
In other words, with upwards of $39 billion washing through the system annually, "enhanced due diligence and account monitoring" by HBUS of their clients wasn't in the cards.

Indeed, in a 2009 risk assessment conducted by HSBC, Mexico was assigned a score of "2," which was "one of the lowest scores."

When queried by Senate investigators about the low score, Ali Kazmy, the HBUS compliance officer responsible for country risk assessments "told the Subcommittee that, since 2006, HBUS' assessments had inadvertently failed to take into account a 2006 FinCEN advisory related to Mexico that would have added 10 points to its score each year. As a result of its low score, Mexico was rated a 'standard' risk, the lowest of the four risk ratings."

As U.S. law enforcement agencies, ironically enough under pressure from Mexican officials to crackdown on money laundering by U.S. banks, "Mexican regulators confronted HBMX with suspicions that drug proceeds were moving through its accounts at HBUS."

In 2009, the Immigration and Customs Enforcement Agency (ICE) "informed the OCC that ICE was investigating possible money laundering activity involving banknote accounts at HBUS. ICE indicated that Mexican drug traffickers appeared to be using the black market peso exchange in New York to transfer funds through a particular Mexican financial institution, which then sent the funds through its U.S. correspondent account at HBUS."

"What U.S. law enforcement officials had found was that, because drug traffickers in the United States were having difficulty finding a U.S. financial institution that would accept large amounts of cash, due to strict U.S. AML controls, many were instead transporting large volumes of U.S. dollars to Mexico, and depositing the dollars at Mexican financial institutions."

"The drug traffickers could then keep their deposits in U.S. dollars through the Mexican financial institution's correspondent account at a U.S. bank, or exchange the dollars for pesos," the Senate reported. "The Mexican banks, casas de cambio, and other financial institutions that were the recipients of the cash typically shipped the physical dollars back to the United States for credit to their own U.S. dollar correspondent accounts at U.S. banks."

In 2009, OCC Deputy Chief Counsel Dan Stipano explained the grift to Sally Belshaw, the OCC Examiner-In-Charge at HBUS:

"The scheme ... is similar to activity that we have seen at Union Bank, Wachovia, and Zions. Basically, the way it works is that drug money is physically hauled across the border into Mexico, then brought back into the United States through wire transfers from casas de cambio or small Mexican banks, or else smuggled across the border in armored cars, etc., before being deposited in US. Institutions. According to AUSA [Assistant U.S. Attorney] Weitz, most U.S. banks, recognizing the risks involved, have gotten out of this business, but HSBC NY is one of the last holdouts (although, interestingly, he said that HSBC-Mexico will no longer accept U.S. currency)." (emphasis added)

HBMX was rocked by scandal when it emerged that one of its biggest clients, the wealthy Chinese-Mexican citizen, Zhenli Ye Gon, was accused by the Drug Enforcement Administration, in a joint operation with Mexican authorities, of high-level drug trafficking. In March 2007, the Mexican Government "seized over $205 million in U.S. dollars, $17 million in Mexican pesos, firearms, and international wire transfer records" from Zhenli's residence.

The cash, hidden in a secret locked room in Zhenli's home was described by the media at the time as the largest cash seizure in a drug-related case in history.

Zhenli, a self-described "prominent businessman," was "the owner of three Mexican corporations involved in the pharmaceutical field, Unimed Pharm Chem Mexico S.A. de C.V.; Constructora e Inmobiliaria Federal S.A. de C.V.; and Unimed Pharmaceutical, S.A. de C.V."

According to Senate investigators, he was accused of using his corporations as fronts "to import, manufacture, and sell chemicals to drug cartels for use in manufacturing methamphetamine, an illegal drug sold in the United States. He was also accused of displaying 'significant unexplained wealth,' despite reporting no gross income for his companies for the years 2005, 2006, and 2007."

Although Zhenli was indicted in Mexico on drug, firearm and money laundering charges, he "could not be located." Why? Because he had fled to the United States where he awaits extradition to Mexico on drug trafficking charges.

Eventually indicted by U.S. federal prosecutors "for aiding and abetting the manufacture of methamphetamine," two years later "U.S. prosecutors dismissed the charges, after a witness recanted key testimony."

What made Zhenli's arrest particularly embarrassing to HBUS officials was the fact that internal documents revealed that Zhenli's Unimed "accounts were opened by Bital, retained by HBMX, and housed in HMBX's Personal Financial Services (PFS) division, even though the official clients were corporations and should not have been serviced by the PFS division."

Despite the dodgy nature of the accounts, they were not designated "high risk." One top HSBC executive, John Root, told the Senate that although the Unimed account "had attracted the attention" of HBMX regulators and they had been instructed to terminate the account, he and another top official, Susan Wright "did not realize the account was still open, until he and Ms. Wright saw the press articles regarding Unimed in 2007."

Imagine that!

Another Day, Another 'Investigation'

Regulatory "lapses" and half-hearted "investigations" continue.

Recently, The New York Times reported that "federal and state authorities are investigating a handful of major American banks for failing to monitor cash transactions in and out of their branches, a lapse that may have enabled drug dealers and terrorists to launder tainted money."

Citing (who else!) "anonymous officials," regulators "led by the Office of the Comptroller of the Currency, are close to taking action against JPMorgan Chase for insufficient safeguards, the officials said. The agency is also scrutinizing several other Wall Street giants, including Bank of America."

But rather than investigating the role of laundered drug money in inflating the balance sheets of the big banks, the Times, citing "compliance experts," argued that "violations are typically unintentional and often harmless because they aren't always exploited by criminals."

An April cease-and-desist order against drug-tainted Citigroup is instructive in this regard. Charging there were "gaps" in Citi's oversight of cash transactions, the order specified there were "internal control weaknesses including the incomplete identification of high-risk customers in multiple areas of the bank."

According to an unnamed "person close to the bank," Citi's "internal control weaknesses" were attributed "to an accident when a computer was unplugged from anti-money-laundering systems."

Such mendacity is the banking equivalent of "the dog ate my homework," yet for America's "newspaper of record" such fabrications are accepted at face value despite Citigroup's decades-long history of financial fraud, stock manipulation and other crimes, including laundering billions of dollars of drug money.

Today, the stakes are immeasurably higher. As the capitalist system threatens to implode and sinks ever-deeper into a liquidity crisis brought on in no small part by the gross criminality of our masters, a recent study by James Henry, author of The Price of Offshore Revisited, has shown that at least $21-$32 trillion (£13-£20.5tn) has been hidden in tax havens that operate as little more than global money laundering centers.

According to Henry: "The subterranean system that we are trying to measure is the economic equivalent of an astrophysical black hole." Indeed, "The very existence of the global offshore industry, and the tax-free status of the enormous sums invested by their wealthy clients, is predicated on secrecy: that is what this industry really 'supplies' as it competes for, conceals, and manages private capital from all over the planet, from any and all sources, no questions asked."

As former U.S. Customs deep-cover specialist Robert Mazur, the author of The Infiltrator: My Secret Life Inside the Dirty Banks Behind Pablo Escobar's Medellín Cartel, explained to Business Insider, "'the international community is today doing the same thing that BCCI and their officers were doing 20 years ago'--citing the HSBC money-laundering scandal and the tax havens of the super-rich--and told BI that the problem is much larger than the estimated $2.1 trillion that crime generates each year."

According to Mazur, HSBC employed methods "traditionally used by banks in a big way [to] facilitate relationships with people who want to hide money from governments" and explained that bankers provide these services "to entice these people to bank with them" thereby enabling banks to increase their deposits.

More attuned to the needs of their banking "clients" to remain "healthy," regulators are "not as focused on the issue of criminal conduct." In fact, "there's nothing built in the system to engage criminal investigations up front."

"One straightforward way" to deter financial officers from profiting from criminal activities, "would be to crack down on bankers who solicit shady business--like the ones at HSBC--by putting a few 'behind bars for a very long period of time' instead of just giving them a fine," Mazur said.

This is unlikely to happen. After all, the first order of business during a period of unprecedented elite criminality is to shield financial institutions and their officers, deemed "too big to fail or jail" from accountability.

Never mind that such practices facilitate global crime in all their varied forms--from drug trafficking to terrorism and from imperialist wars of conquest to the outright theft of public property for private profit--incentives for regulators to crackdown or for prosecutors to send corporate criminals to prison remain virtually nonexistent.

'Managing' the Plaza: America's Secret Deal with Mexican Drug Cartels

In a story which should have made front page headlines, Narco News investigative journalist Bill Conroy revealed that "A high-ranking Sinaloa narco-trafficking organization member's claim that US officials have struck a deal with the leadership of the Mexican 'cartel' appears to be corroborated in large part by the statements of a Mexican diplomat in email correspondence made public recently by the nonprofit media group WikiLeaks."

A series of some five million emails, The Global Intelligence Files, were obtained by the secret-spilling organization as a result of last year's hack by Anonymous of the Texas-based "global intelligence" firm Stratfor.

Bad tradecraft aside, the Stratfor dump offer readers insight into a shadowy world where information is sold to the highest bidder through a "a global network of informants who are paid via Swiss banks accounts and pre-paid credit cards. Stratfor has a mix of covert and overt informants, which includes government employees, embassy staff and journalists around the world."

One of those informants was a Mexican intelligence officer with the Centro de Investigación y Seguridad Nacional, or CISEN, Mexico's equivalent to the CIA. Dubbed "MX1" by Stratfor, he operates under diplomatic cover at the Mexican consulate in Phoenix, Arizona after a similar posting at the consulate in El Paso, Texas.

His cover was blown by the intelligence grifters when they identified him in their correspondence as Fernando de la Mora, described by Stratfor as "being molded to be the Mexican 'tip of the spear' in the U.S."

In an earlier Narco News story, Conroy revealed that "US soldiers are operating inside Mexico as part of the drug war and the Mexican government provided critical intelligence to US agents in the now-discredited Fast and Furious gun-running operation," the Mexican diplomat claimed in email correspondence.

Those emails disclosed "details of a secret meeting between US and Mexican officials held in 2010 at Fort Bliss, a US Army installation located near El Paso, Texas. The meeting was part of an effort to create better communications between US undercover operatives in Mexico and the Mexican federal police, the Mexican diplomat reveals."

"However," Conroy wrote, "the diplomat expresses concern that the Fort Bliss meeting was infiltrated by the 'cartels,' whom he contends have 'penetrated both US and Mexican law enforcement'."

Such misgivings are thoroughly justified given the fact, as Antifascist Calling reported last spring, that the Mexican government had arrested three high-ranking Army generals over their links to narcotrafficking organizations.

In Conroy's latest piece the journalist disclosed that the "Mexican diplomat's assessment of the US and Mexican strategy in the war on drugs, as revealed by the email trail, paints a picture of a 'simulated war' in which the Mexican and US governments are willing to show favor to a dominant narco-trafficking organization in order to minimize the violence and business disruption in the major drug plazas, or markets."

A "simulated war"? Where have we heard that before? Like the bogus "War on Terror" which arms and unleashes throat-slitting terrorists from the CIA's favorite all-purpose zombie army of "Islamist extremists," Al Qaeda, similarly, America's fraudulent "War on Drugs" has been a splendid means of managing the global drug trade in the interest of securing geopolitical advantage over their rivals.

That major financial powerhouses in Europe and the U.S. (can you say Bank of America, Barclays, Citigroup, Credit Suisse, HSBC, ING and Wachovia) have been accused of reaping the lions' share of profits derived from the grim trade, now a veritable Narco-Industrial Complex, the public continues to be regaled with tales that this ersatz war is being "won."

While the Mexican body count continues to rise (nearly 120,000 dead since 2006 according to the latest estimates published by the Instituto Nacional de Estadística y Geografía, or INEGI, as reported by the Paris daily Le Monde in a recent editorial) the United States is escalating its not-so-covert military involvement in Mexico and putting proverbial boots on the ground as part of the $1.6 billion U.S.-financed Mérida Initiative.

But have such "initiatives" (in actuality, taxpayer-funded boondoggles for giant military contractors), turned the corner in the drug war? Not if estimates published the United Nations are accurate.

According to the 2011 World Drug Report, published by the United Nations Office on Drugs and Crime (UNODC): "US authorities have estimated for the last couple of years that some 90% of the cocaine consumed in North America comes from Colombia, supplemented by some cocaine from Peru and limited amounts from the Plurinational State of Bolivia. For the year 2009, results of the US Cocaine Signature Program, based on an analysis of approximately 3,000 cocaine HCl samples, revealed that 95.5% originated in Colombia (down from 99% in 2002) and 1.7% in Peru; for the rest (2.8%), the origin could not be determined. The trafficking of cocaine into the United States is nowadays largely controlled by various Mexican drug cartels, while until the mid-1990s, large Colombian cartels dominated these operations."

Despite more than $8 billion lavished on programs such as Plan Colombia, and despite evidence that leading Colombian politicians, including former President Álvaro Uribe and his entourage had documented links to major drug trafficking organizations that go back decades, the myth persists that pouring money into the drug war sinkhole will somehow turn the tide.

But drug seizures by U.S. agencies only partially tell the tale.

As UNODC Executive Director Yury Fedotov pointed out in the introduction to the agency's 2011 report, Estimating Illicit Financial Flows Resulting from Drug Trafficking and Other Transnational Crimes, "all criminal proceeds are likely to have amounted to some 3.6 per cent of GDP (2.3-5.5 per cent) or around US$2.1 trillion in 2009."

UNODC analysts disclosed that illicit money flows related to "transnational organized crime, represent the equivalent of some 1.5 percent of global GDP, 70 percent of which would have been available for laundering through the financial system. The largest income for transnational organized crime seems to come from illicit drugs, accounting for a fifth of all crime proceeds."

"If only flows related to drug trafficking and other transnational organized crime activities were considered," UNODC asserted, "related proceeds would have been equivalent to around US$650 billion per year in the first decade of the new millennium, equivalent to 1.5% of global GDP or US$870 billion in 2009 assuming that the proportions remained unchanged. The funds available for laundering through the financial system would have been equivalent to some 1% of global GDP or US$580 billion in 2009."

"The results," according to UNODC, "also suggest that the 'interception rate' for anti-money-laundering efforts at the global level remains low. Globally, it appears that much less than 1% (probably around 0.2%) of the proceeds of crime laundered via the financial system are seized and frozen."

Commenting on the nexus between global drug mafias and our capitalist overlords, former UNODC director Antonio Maria Costa told The Observer in 2009, "that the proceeds of organised crime were 'the only liquid investment capital' available to some banks on the brink of collapse last year. He said that a majority of the $352bn (£216bn) of drugs profits was absorbed into the economic system as a result."

Would there be an incentive then, for U.S. officials to dismantle a global business that benefits their real constituents, the blood-sucking gangsters at the apex of the capitalist financial pyramid? Hardly.

Nor would there be any incentive for American drug warriors to target organizations that inflate the balance sheets of the big banks. Wouldn't they be more likely then, given the enormous flows of illicit cash flooding the system, to negotiate an "arrangement" with the biggest players, particularly the Sinaloa Cartel run by fugitive billionaire Joaquín "El Chapo" Guzmán?

In fact, as Narco News disclosed last December, a "quid-pro-quo arrangement is precisely what indicted narco-trafficker Jesus Vicente Zambada Niebla, who is slated to stand trial in Chicago this fall, alleges was agreed to by the US government and the leaders of the Sinaloa 'Cartel'--the dominant narco-trafficking organization in Mexico. The US government, however, denies that any such arrangement exists."

Narco News reported that according to "Zambada Niebla, he and the rest of the Sinaloa leadership, through the US informant Loya Castro, negotiated an immunity deal with the US government in which they were guaranteed protection from prosecution in exchange for providing US law enforcers and intelligence agencies with information that could be used to compromise rival Mexican cartels and their operations."

In court pleadings, Zambada Niebla's attorneys argued that "the United States government considered the arrangements with the Sinaloa Cartel an acceptable price to pay, because the principal objective was the destruction and dismantling of rival cartels by using the assistance of the Sinaloa Cartel--without regard for the fact that tons of illicit drugs continued to be smuggled into Chicago and other parts of the United States and consumption continued virtually unabated."

Those assertions seem to be borne out by emails released by WikiLeaks. Conroy disclosed: "In a Stratfor email dated April 19, 2010, MX1 lays out the Mexican government's negotiating, or 'signaling,' strategy with respect to the major narco-trafficking organizations as follows:

The Mexican strategy is not to negotiate directly.

In any event, "negotiations" would take place as follows:

Assuming a non-disputed plaza [a major drug market, such as Ciudad Juarez]:

• [If] they [a big narco-trafficking group] bring [in] some drugs, transport some drugs, [and] they are discrete, they don't bother anyone, [then] no one gets hurt;

• [And the] government turns the other way.

• [If] they [the narco-traffickers] kill someone or do something violent, [then the] government responds by taking down [the] drug network or making arrests.

(Now, assuming a disputed plaza:)

• [A narco-trafficking] group comes [into a plaza], [then the] government waits to see how dominant cartel responds.

• If [the] dominant cartel fights them [the new narco-trafficking group], [then the] government takes them down.

• If [the] dominant cartel is allied [with the new group], no problem.

• If [a new] group comes in and start[s] committing violence, they get taken down: first by the government letting the dominant cartel do their thing, then [by] punishing both cartels.

"MX1," Narco News revealed, "then goes on to describe what he interprets as the US strategy in negotiating with the major narco-trafficking players in Ciudad Juarez--a major Mexican narco-trafficking 'plaza' located across the border from El Paso, Texas:"

... This is how "negotiations" take place with cartels, through signals. There are no meetings, etc. ...

So, the MX [Mexican] strategy is not to negotiate. However, I think the US [recently] sent a signal that could be construed as follows:

"To the VCF [the Vicente Carrillo Fuentes] and Sinaloa cartels: Thank you for providing our market with drugs over the years. We are now concerned about your perpetration of violence, and would like to see you stop that. In this regard, please know that Sinaloa is bigger and better than [the] VCF. Also note that CDJ [Juarez] is very important to us, as is the whole border. In this light, please talk amongst yourselves and lets all get back to business. Again, we recognize that Sinaloa is bigger and better, so either VCF gets in line or we will mess you up."

I don't know what the US strategy is, but I can tell you that if the message was understood by Sinaloa and VCF as I described above, the Mexican government would not be opposed at all.

In sum, I have a gut feeling that the US agencies tried to send a signal telling the cartels to negotiate themselves. They unilaterally declared a winner [the Sinaloa Cartel], and this is unprecedented, and deserves analysis. If there was no strategy behind this, and it was simply a leaked report, then I will be interested to see how it plays out in the coming months.

Keep in mind that this "analysis" is from a senior CISEN officer describing U.S. "strategy" for managing, not putting a stop to the flood of narcotics crossing the border.

"In a separate Stratfor email dated April 15, 2010," Conroy wrote, "MX1's views on the US strategy with respect to the drug organizations in Juarez, essentially favoring the Sinaloa 'Cartel,' is referenced yet again:"

We believe that when the US made an announcement that was corroborated by several federal spokespersons simultaneously (that Sinaloa controlled CDJ [Juarez]), it was a message that the DEA wanted to send to Sinaloa. The message was that the US recognized Sinaloa's dominance in the area [Juarez], although it was not absolute. It was meant to be read by the cartels as a sort of ultimatum: negotiate and put your house in order once and for all.

One dissenting analyst thinks that the message is the opposite, telling Sinaloa to take what it had and to leave what remains of VCF. Regardless, the reports are saying that the US message to the cartels was to negotiate and stop the violence. It says that the US has never before pronounced that a cartel controls a particular plaza, so it is an unusual event.

"Unusual" perhaps, but not surprising given the secret state's documented history of close collaboration with major drug trafficking networks that serve as unofficial, though highly-effective instruments, for advancing U.S. imperial strategies.

In a recent piece published by Global Research, analyst Peter Dale Scott observed that America's two "self-generating wars" on "terror" and "drugs" have "in effect become one."

"By launching a War on Drugs in Colombia and Mexico," Scott wrote, "America has contributed to a parastate of organized terror in Colombia (the so-called AUC, United Self-Defense Forces of Colombia) and an even bloodier reign of terror in Mexico (with 50,000 killed in the last six years)."

And by "launching a War on Terror in Afghanistan in 2001, America has contributed to a doubling of opium production there, making Afghanistan now the source of 90 percent of the world's heroin and most of the world's hashish."

"Americans should be aware of the overall pattern that drug production repeatedly rises where America intervenes militarily--Southeast Asia in the 1950s and 60s, Colombia and Afghanistan since then," Scott noted. "(Opium cultivation also increased in Iraq after the 2003 US invasion.) And the opposite is also true: where America ceases to intervene militarily, notably in Southeast Asia since the 1970s, drug production declines."

"Both of America's self-generating wars are lucrative to the private interests that lobby for their continuance," Scott averred. "At the same time, both of these self-generating wars contribute to increasing insecurity and destabilization in America and in the world."

In this light, Narco News revelations make perfect sense. As the global financial crisis deepens, brought on in no small part by the massive frauds perpetrated by leading capitalist institutions, they have inflated their balance sheets with a veritable tsunami of hot cash generated by the Narco-Industrial Complex.

In turn, the American secret state, working to recapitalize financial markets beset by a seemingly insolvable liquidity crisis resulting from massive bank frauds, turn a blind eye as these same institutions become major centers of organized crime, monopoly enterprises which could not survive without the trillions of dollars of illicit funds parked in offshore accounts.

American Narcos: The Real 'Masters of Paradise'

As the body count climbs across Mexico, the drugs continue flowing across the border by the ton.

Despite the evident disconnect--a "war" on drugs that increases the supply while lowering the price, in the best tradition of our reigning "free market" ideology--the American media regales the public with fairy tales of heroic "warriors" doing battle with murderous gangsters named "Joaquín," "Jorge" and "Amado."

The fact is, more likely than not, the real narcos taking the biggest cut from deep inside the reeking abattoir of the grisly trade have far less prosaic names like "Brett," "Ethan" or "Jason."

'The Only Liquid Investment Capital'

Earlier this month, The Observer reported that "The vast profits made from drug production and trafficking are overwhelmingly reaped in rich 'consuming' countries--principally across Europe and in the US--rather than war-torn 'producing' nations such as Colombia and Mexico, new research has revealed."

Journalist Ed Vulliamy informed us that the authors of that report provide compelling evidence that "financial regulators in the west are reluctant to go after western banks in pursuit of the massive amount of drug money being laundered through their systems."

Indeed, at the height of the global financial crisis Antonio Maria Costa, then the head of the UN Office on Drugs and Crime told The Observer "he has seen evidence that the proceeds of organised crime were 'the only liquid investment capital' available to some banks on the brink of collapse last year. He said that a majority of the $352bn (£216bn) of drugs profits was absorbed into the economic system as a result."

"In many instances," Costa said, "the money from drugs was the only liquid investment capital. In the second half of 2008, liquidity was the banking system's main problem and hence liquid capital became an important factor."

"Inter-bank loans were funded by money that originated from the drugs trade and other illegal activities... There were signs that some banks were rescued that way." While Costa "declined to identify countries or banks that may have received any drugs money, he said the money is now a part of the official system and had been effectively laundered."

In other words, for dodgy bankers it was "accounts balanced" and an excuse to buy a new Armani suit or two, a case of 20-year-old single malt or that vacation home for the trophy wife, no questions asked.

Selective Prosecutions

In stark contrast to the impunity enjoyed by our capitalist overlords, The Wall Street Journal reported that the U.S. Treasury Department "slapped sanctions on two key operatives of the Sinaloa drug cartel" last Thursday.

The Journal informed us that "Kingpin Act sanctions were placed on Maria Alajandrina Salazar Hernandez and Jesus Alfredo Guzmán Salazar, the wife and son of Joaquín "Chapo" Guzmán, the fugitive drug lord who heads the Sinaloa Cartel."

Also last week, the Associated Press reported that Sandra Ávila Beltrán, whom the media dubbed "La Reina del Pacífico" (The Queen of the Pacific), can be extradited to the United States "where she faces cocaine-related charges." Ávila was arrested in Mexico City in 2007 and awaits prosecution on money laundering charges.

A third-generation drug trafficker, Ávila is the niece of of Miguel Ángel Félix Gallardo, onetime godfather of the Guadalajara Cartel now serving a 40-year prison term for the 1984 murder of DEA agent Enrique Camarena. Camarena was kidnapped and tortured to death after he uncovered evidence linking the CIA and Oliver North's sordid "Enterprise" to drug trafficking Nicaraguan Contras during the Reagan administration.

And just this week, The Guardian reported that two relatives of former Colombian President Álvaro Uribe, "are awaiting extradition to the US over claims they had ties to the world's most wanted drug lord."

"Ana Maria Uribe Cifuentes and her mother, Dolly Cifuentes Villa, were arrested last year after a request from a US federal court for alleged ties to the head of Mexico's Sinaloa Cartel, Joaquín 'El Chapo' Guzmán."

According to the Drug Enforcement Administration (DEA), "both women are alleged to belong to the Cifuentes Villa clan," which DEA claims "trafficked at least 30 tonnes of cocaine to the US between 2009 and 2011, and laundered the proceeds in several Latin American countries including Colombia."

Drug trafficking allegations have long swirled around the Uribe family. A 1991 Defense Intelligence Agency report published by The National Security Archive pointedly stated that during his tenure in the Colombian Senate, Uribe was a "close personal friend of Pablo Escobar" and was "dedicated to collaboration with the Medellín [drug] cartel at high government levels."

The document went on to assert that before becoming a key U.S. "partner in the drug war," and rewarded with some $3 billion under Plan Colombia to "fight drugs," Uribe "was linked to a business involved in narcotics activities in the United States" and "has worked for the Medellín cartel."

Although the U.S. government disavowed that report, for purely political reasons I might add, several members of Uribe's family, including the president's cousin, Mario Uribe Escobar, the former President of the Colombian Congress, was convicted and removed from office over his close ties to the far-right, drug trafficking paramilitary death squad, the Autodefensas Unidas de Colombia, or AUC.

In announcing sanctions against the Guzmán clan, Adam Szubin, the director of Treasury's Office of Foreign Assets Control, said in a statement: "This action builds on Treasury's aggressive efforts, alongside its law enforcement partners, to target individuals who facilitate Chapo Guzmán's drug trafficking operations and to pursue the eventual dismantlement of his organization, which is culpable in untold violence."

While Chapo, Inc. earned honorable mention at No. 1153 on Forbes "World's Billionaires List," and may very well be responsible for the estimated 25% of illegal drugs trafficked into the United States as the DEA alleges, his place at No. 55 on Forbes list of "The World's Most Powerful People," sandwiched between PIMCO founder and "Bond King" Bill Gross and Ahmed Shuja Pasha, Director-General of Pakistan's Inter-Services Intelligence agency, speak volumes about the rather interesting juxtapositions (parapolitically speaking, that is!) between the worlds of finance, crime and covert operations.

Citing findings by two Colombian academics, Alejandro Gaviria and Daniel Mejía in their study, Anti-Drugs Policies In Colombia: Successes, Failures And Wrong Turns, Ed Vulliamy disclosed "that 2.6% of the total street value of cocaine produced remains within the country, while a staggering 97.4% of profits are reaped by criminal syndicates, and laundered by banks, in first-world consuming countries."

Gaviria told The Observer, "Colombian society has suffered to almost no economic advantage from the drugs trade, while huge profits are made by criminal distribution networks in consuming countries, and recycled by banks which operate with nothing like the restrictions that Colombia's own banking system is subject to."

Co-author Daniel Mejía added: "The whole system operated by authorities in the consuming nations is based around going after the small guy, the weakest link in the chain, and never the big business or financial systems where the big money is."

Where, inquiring minds can't help but wonder, are Treasury's "aggressive efforts" when it comes to those simple, yet readily demonstrable facts?

But like drug cartels, banks and the "old boy" networks who run them have names. I'll give you a hint: they're not self-styled "Lords of the Heavens," though they just might think of themselves as proverbial "Masters of the Universe."

A case in point. Back in 2000 when Narco News publisher Al Giordano and Mario Menéndez, a reporter for the Mexican newspaper Por Esto! were sued in a New York court for libel by Banamex-Citigroup, Giordano wrote that "The true bosses of the illegal drug trade do not appear on the FBI 'Most Wanted' list."

No, Giordano averred, "The Chief Operating Officers of drug trafficking are not Mexicans, nor Colombians: they are US and European bankers, those who launder the illicit proceeds of drug trafficking. Institutions like Citibank of New York--as this report documents--are the true beneficiaries of the prohibition on drugs and its illegal profits."

While Chapo Guzmán's family are now targets of Treasury Department sanctions, what can we learn from recent reporting on Justice Department inaction when it came to prosecuting officers of America's fourth largest bank, Wachovia, bought by Wells Fargo & Co. in 2008 at the height of the capitalist financial meltdown?

Charlotte: The World's Narco Capital?

In landmark exposés of corporate greed, criminality and corruption, Bloomberg Markets Magazine and The Observer revealed in 2010 and 2011 respectively, that Wachovia was up to its eyeballs in laundering hot money for Colombian and Mexican drug cartels.

As I reported in 2010 on Wachovia's foray into money-laundering for Chapo Guzmán's Sinaloa Cartel (see: "All in the 'Family.' Global Drug Trade Fueled by Capitalist Elites," Antifascist Calling, July 20, 2010) then-CEO, G. Kennedy "Ken" Thompson, a former president of the Federal Reserve Board's Advisory Committee and Bush Ranger who raised some $200,000 for W's 2004 presidential campaign, was buying up competing banks faster than you can say "credit default swaps."

By the time Wells Fargo bought Wachovia at the fire-sale price of $12.8 billion, the bank and Thompson, who had "retired at the request of the board," were in deep trouble.

Prior to the takeover, Wachovia had embarked on a veritable shopping spree. After the firm's 2001 merger with First Union Bank, Wachovia merged with the Prudential Securities division of Prudential Financial, Inc., with Wachovia controlling the lion's share of that firm's $532.1 billion in assets. Following this coup, the bank then bought-out Metropolitan West Securities, adding a $50 billion portfolio of securities and loans to their Lending division. In 2004, Wachovia followed-up with the $14.3 billion acquisition of SouthTrust Corporation.

Apparently flush with cash and new market clout, Wachovia set it sights on acquiring California-based Golden West Financial. Golden West operated branches under the name World Savings Bank and was the nation's second largest savings and loan. At the time of the buy-out, Golden West had over $125 billion in assets. For Wachovia and Thompson, it was a deal too far.

A cash-crunch soon followed. Now exposed to risky loans, including toxic adjustable rate mortgages acquired as a result of the Golden West deal, which Thompson had described as Wachovia's "crown jewel," the firm's loan portfolios were hammered by heavy losses during the subprime mortgage meltdown.

While the bank had reported some $2.3 billion in earnings during the first quarter of 2007, by 2008 they were reporting heavy losses that topped $8.9 billion by the fourth quarter. It was panic time in Charlotte.

And where did some of that "liquid capital" come from which enabled Wachovia's reckless expansion?

"One customer that Wachovia took on in 2004 was Casa de Cambio Puebla SA," Bloomberg Markets reported. The Puebla, Mexico currency exchange was the brainchild of Pedro Alatorre Damy, a "businessman" who "had created front companies for cartels."

Alatorre, and 70 others connected to his network were arrested in 2007 by Mexican law enforcement officials. Authorities discovered that the accused money launderer and airline broker for the Sinaloa Cartel controlled 23 accounts at the Wachovia Bank branch in Miami and that it held some $11 million, subsequently frozen by U.S. regulators.

In 2008, a Miami federal grand jury indicted Alatorre, now awaiting trial in Mexico along with three other executives, charging them with drug trafficking and money laundering, accusing the company of using "shell firms to launder $720 million through U.S. banks." The Justice Department is currently seeking Alatorre's extradition from Mexico.

Despite the fact that Wachovia's Miami office had been designated by federal investigators a "high-intensity money laundering and related financial crime area," in a "high-intensity drug trafficking area," The Observer reported that even in the face of internal warnings from their own anti-money laundering investigators, Wachovia did nothing to stop the illicit flow of hot funds.

With America's housing bubble now fully-inflated, and warning signs that the speculative boom would soon go bust, one can only surmise that the need for liquidity at any price, had driven Wachovia to play dumb where shady, yet highly-profitable "arrangements" with Casa de Cambio Puebla SA were concerned.

Bleeding cash faster than you can say "mortgage backed securities," Wachovia was on the hook for their 2006 $26 billion buy-out of Golden West Financial at the peak of the bubble, a move that Bloomberg Businessweek reported generated "resistance from his own management team" but ignored by Thompson.

Why? "Because no one outside of Thompson and Golden West CEO Herb Sandler seemed to like the deal from the moment it was announced," a company insider told Businessweek.

(An alert reader pointed out when my piece appeared in 2010, that Herb Sandler, who sold Golden West at the top of the market saying he wanted to devote himself to "philanthropy," "now owns ProPublica, a Left gatekeeper that goes after easy targets like racist cops ... but which will not examine Sandler's wing of the power elite. Michael Barker wrote a great series on this outfit and its Establishment handlers called "Investigating the Investigators--A Critical Look at ProPublica.")

While the buy-out may have given Thompson "the beachhead in California he had long desired ... the ink was barely dry on the Golden West deal in late 2006 when the housing bubble in markets including California and Florida began to deflate."

Hammered by the housing bust, Wachovia's share price, which had risen to $70.51 per share when the Golden West deal was announced had slid to $5.71 per share by October 2008. In other words Wachovia, along with the rest of the world's economy was circling the proverbial drain.

In their Deferred Prosecution Agreement with the Justice Department, Wells Fargo agreed not to contest charges brought against Wachovia in the federal indictment.

Banking giant Wells was forced to admit: "On numerous occasions, monies were deposited into a CDC [Casa de Cambio] by a drug trafficking organization. Using false identities, the CDC then wired that money through its Wachovia correspondent bank accounts for the purchase of airplanes for drug trafficking organizations. On various dates between 2004 and 2007, at least four of those airplanes were seized by foreign law enforcement agencies cooperating with the United States and were found to contain large quantities of cocaine."

As Ed Vulliamy reported in The Observer, although investigators from DEA and the IRS uncovered evidence that Wachovia had laundered as much as $378.4 billion, "a sum equivalent to one-third of Mexico's gross national product--into dollar accounts from so-called casas de cambio (CDCs) in Mexico," and later paid federal authorities $110 million in forfeiture, including a $50 million fine "for failing to monitor cash used to ship 22 tons of cocaine," no criminal proceedings were ever brought against bank officers.

"The conclusion to the case," Vulliamy wrote, "was only the tip of an iceberg, demonstrating the role of the 'legal' banking sector in swilling hundreds of billions of dollars--the blood money from the murderous drug trade in Mexico and other places in the world--around their global operations, now bailed out by the taxpayer."

While Chapo Guzmán and other leaders of Mexican drug trafficking organizations face federal charges that could land them in prison for the rest of their lives, contrast the kid gloves approach taken by the government when it comes to American narcos.

Despite serious federal money-laundering charges against Wachovia, "smartest guy in the room" Thompson was paid $15.6 million in total compensation by the board in 2007, fully a year after that fatal Golden West deal went south. Nor did subsequent losses, and an impending criminal indictment (against the bank, not its officers), stop Wachovia from showering Thompson with a severance package worth nearly $8 million.

Now that's juice!

'Air Cocaine'

Following extensive, years' long reporting in the trenches by MadCow Morning News investigative journalist Daniel Hopsicker and Narco News' Bill Conroy into the origins of two aircraft seized in Mexico with some ten tons of cocaine on board, we learned that as many as 100 planes had been purchased with hot money laundered through Wachovia Bank.

And when "mainstream" journalists Michael Smith and Ed Vulliamy picked up the trail of breadcrumbs assiduously laid out by Hopsicker and Conroy (always without attribution, mind you), they did however, advance some previously unknown facts surrounding this sordid case.

"Just before sunset on April 10, 2006," Bloomberg's Michael Smith reported, "a DC-9 jet landed at the international airport in the port city of Ciudad del Carmen, 500 miles east of Mexico City."

When Army troops grew suspicious after the crew tried to "shoo them away, saying there was a dangerous oil leak," they did what good law enforcement officials should do: they searched the plane.

On board, they found 128 identical black suitcases "packed with 5.7 tons of cocaine, valued at $100 million. The stash was supposed to have been delivered from Caracas to drug traffickers in Toluca, near Mexico City, Mexican prosecutors later found. Law enforcement officials also discovered something else."

"The smugglers," Smith wrote, "had bought the DC-9 with laundered funds they transferred through two of the biggest banks in the U.S.: Wachovia Corp. and Bank of America Corp."

But in breaking that story six years ago, (long before Bloomberg and The Observer joined the hunt), Hopsicker revealed that "One of the two owners of the DC-9 (tail number N900SA) busted at an airport in Ciudad del Carmen in the state of Campeche, Mexico last week freighted 5.5 tons of cocaine had been appointed in 2003 to the Business Advisory Council of the National Republican Congressional Committee by then-Congressional Majority Leader Tom Delay, The MadCow Morning News can exclusively report."

That plane, Hopsicker disclosed, was tricked-out by owner Brent Kovar to impersonate a jet flown by the U.S. Transportation Security Administration. An official-looking seal read "Sky Way Aircraft, Protection of America's Skies," complete with the "image of a federal eagle clutching the familiar olive branch in its talons."

And when he searched FAA and corporate records, Hopsicker learned that "A close look at [shell company] Royal Sons reveals evidence indicating that the firm is part of a cluster of related air charter firms being used as dummy front companies to provide 'cover' for CIA flights."

"The companies involved," Hopsicker averred, "include Royal Sons, Express One International, Genesis Aviation and United Flite Inc."

"All four companies appear to be engaged in an interlocking and time-honored Agency scheme going back 50 years: using frequent cosmetic transfers of aircraft title to make positively identifying the ownership of any one plane at any given time as difficult as finding the pea under the shell in a game of three-card Monte."

Subsequent reporting by Hopsicker revealed that the second plane, a Gulfstream II business jet (N987SA) which crash landed on the Yucatán peninsula in 2007 with four tons of coke on board, was registered to a "Donna Blue Aircraft, Inc." (DBA, or "doing business as") and was previously employed as a "private charter" that did "terrorist" rendition flights for, who else, the CIA!

As Narco News journalist Bill Conroy revealed in 2008, "At the center of that controversy are allegations that the downed cocaine jet was part of a CIA-backed narco-trafficking operation."

According to Conroy, the "key to the ill-fated Gulfstream II cocaine shipment is a prolific Colombian narco-trafficker and U.S. government informant named Jose Nelson Urrego Cardenas--who was recently arrested by police in Panama. Urrego allegedly played a major role in organizing the cocaine shipment as part of [Immigration and Customs Enforcement's] Mayan Express operation."

"For those who might wonder why ICE would pursue an operation like the Mayan Express," Conroy wrote, "it pays to keep in mind that Charles E. Allen, under-secretary for the Office of Intelligence and Analysis at the Department of Homeland Security (DHS), also happens to be a veteran of the CIA and was a major player in the Iran/Contra scandal that played out during the Reagan administration."

"One facet of Iran/Contra, as you might recall, allegedly involved the use of CIA resources to run drugs in order to raise money to fund the purchase of arms for the Contra rebels who were seeking to overthrow the Sandinista government in Nicaragua."

"For ICE to be cleared to operate a high-profile overseas mission like the Mayan Express, which allegedly involved coordination with the CIA, it is very likely that Allen, DHS' chief intelligence guru, had to be clued into the operation--since ICE is part of DHS."

More recently, in keeping with the dirty history of the CIA's role in managing, not eliminating, the global drug trade, Narco News disclosed that the Agency had a "quid-pro-quo" arrangement with Chapo Guzmán's Sinaloa Corporation's "leadership and US government agencies seeking to obtain information on rival narco-trafficking organizations."

In fact, as Narco News revealed last April, the federal indictment against Jesus Vicente Zambada Niebla claims "he served as the 'logistical coordinator' for the 'cartel,' helping to oversee an operation that imported into the U.S. 'multi-ton quantities of cocaine ... using various means, including but not limited to, Boeing 747 cargo aircraft, private aircraft ... buses, rail cars, tractor trailers, and automobiles'."

Indeed, one of the "private aircraft" used in Chapo Guzmán's drug importation schemes was none other than that ill-fated Gulfstream II (N987SA) which crash-landed in the Yucatán in 2007. Purchased with funds laundered through Wachovia Bank, the business jet was subsequently linked by Council of Europe investigators to CIA ghost flights.

Despite facts laid out in Zambada's federal indictment "the alleged deal," Conroy wrote, "assured protection for the Sinaloa Cartel's business operations while also undermining its competition--such as the Vicente Carrillo Fuentes organization out of Juárez, Mexico, the murder capital of the world."

"At the same time," Narco News reported, "the information provided by the Sinaloa Cartel to US agencies against its rivals assures a steady flow of drug busts and media victory headlines for US agencies and for the Mexican government."

Conroy pointed out, "That propaganda is necessary for hoodwinking their citizens into believing that progress is being made in the drug war and thereby assuring the continued funding of bloated drug-war budgets and support for failed policies that have cost the lives of some 50,000 Mexican citizens since late 2006 and ended any hope of a productive life for hundreds of thousands of US citizens--most wasting away in US prisons and not a small number the victims of street homicides linked to drug deals gone bad."

Call it business as usual in "God's country," that "shining city upon a hill."

Past as Prologue

If history is a guide to current practices, the CIA has long-relied on financing black Agency operations through dodgy banks and the bankers who run them.

Amongst the swindlers who have profited from cosy relations with the Agency, readers no doubt are reminded of Paul Helliwell's Castle Bank Bank & Trust; Michael Hand, Frank Nugan and Bernie Houghton's Nugan-Hand Bank; Agha Hasan Abedi's Bank of Credit and Commerce International (BCCI); or more recently, as Antifascist Calling disclosed two years ago, convicted fraudster R. Allen Stanford's multibillion dollar Ponzi scheme disguised as a "full-service bank," Stanford International.

That all four banks collapsed in ignominy and scandal as investors were bilked out of billions of dollars in deposits amid charges that these financial black holes were little more than conduits for organized crime and intelligence operations, only underscores the inescapable fact that for secret state outfits like the CIA, crime pays.

Two years after the Wachovia scandal broke amid deafening media silence in the U.S., Daniel Mejía told The Observer: "Overall, there's great reluctance to go after the big money. They don't target those parts of the chain where there's a large value added. In Europe and America the money is dispersed--once it reaches the consuming country it goes into the system, in every city and state. They'd rather go after the petty economy, the small people and coca crops in Colombia, even though the economy is tiny."

"It's an extension of the way they operate at home," Mejía said. "Go after the lower classes, the weak link in the chain--the little guy, to show results. Again, transferring the cost of the drug war on to the poorest, but not the financial system and the big business that moves all this along."

Given the corrupt trajectory of the "War on Drugs," this should not surprise anyone. As Peter Dale Scott wrote in Deep Events and the CIA's Global Drug Connection: "The global drug connection is not just a lateral connection between CIA field operatives and their drug-trafficking contacts. It is more significantly a global financial complex of hot money uniting prominent business, financial and government as well as underworld figures."

According to Scott, this global criminal-elite nexus "maintains its own political influence by the systematic supply of illicit finances, favors and even sex to politicians around the world, including leaders of both parties in the United States. The result is a system that might be called indirect empire, one that, in its search for foreign markets and resources, is satisfied to subvert existing governance without imposing a progressive alternative."

Scott's analysis has certainly been borne out by honest law enforcement officials.

Martin Woods, a former senior detective with London's Metropolitan police anti-drugs squad joined Wachovia in 2005 as the bank's chief anti-money laundering investigator and paid a steep price for his diligence.

Hounded out of his position when he refused to stop filing suspicious activity reports to headquarters in Charlotte over dubious deposit practices by Wachovia branches in London and Miami, Woods told The Observer: "New York and London have become the world's two biggest laundries of criminal and drug money, and offshore tax havens. Not the Cayman Islands, not the Isle of Man or Jersey. The big laundering is right through the City of London and Wall Street."

"Meanwhile," Woods said, "the drug industry has two products: money and suffering. On one hand, you have massive profits and enrichment. On the other, you have massive suffering, misery and death. You cannot separate one from the other."

With hundreds of billions of dollars washing through the system each and every year, there aren't many incentives to collar the big boys. And you can take that to the bank...

(Image courtesy of Daniel Hopsicker's MadCow Morning News)