Drug money is an inherent part of the American economy

The CIA has dealt drugs for all 50 years of its existence–50 plus years, even before it was the CIA. And the point is that with 250 billion dollars a year in illegal drug money moved, laundered through the American economy, that money benefits Wall Street. That’s the point of having the prohibitive drug trade, which the CIA effectively manages for the benefit of Wall Street.

The Pentagon arms the Mexican government and the US Drug Enforcement Agency enforces the ‘military solution’, the biggest US banks receive, launder and transfer hundreds of billions of dollars to the drug lords’ accounts, who then buy modern arms, pay private armies of assassins and corrupt untold numbers of political and law enforcement officials on both sides of the border.

Drug profits, in the most basic sense, are secured through the ability of the cartels to launder and transfer billions of dollars through the US banking system. The scale and scope of the US banking-drug cartel alliance surpasses any other economic activity of the US private banking system.

According to US Justice Department records, one bank alone, Wachovia Bank (now owned by Wells Fargo), laundered $378.3 billion dollars between May 1, 2004 and May 31, 2007 (The Guardian, May 11, 2011). Every major bank in the US has served as an active financial partner of the murderous drug cartels.

The major US banks are the financial engines that allow the billion dollar drug empires to operate, the White House, the US Congress and the law enforcement agencies are the basic protectors of these banks.

The Federal Reserve creates an environment in which investors can borrow at 25 to 50 basis points and lend elsewhere at much higher rates, forcing money to flow from the United States into these other opportunities. And bubbles result — worldwide.

Laundering drug money is one of the most lucrative sources of profit for Wall Street; the banks charge hefty commissions on the transfer of drug profits, which they then lend to borrowing institutions at interest rates far above what they pay to drug trafficker depositors. Awash in sanitized drug profits, these US titans of the finance world can easily buy their own elected officials to perpetuate the system.

The purpose of the Agency being involved in the drug trade has been to generate illegal cash, fluid liquid capital, which gives those who can get their hands on it an unfair advantage in the marketplace.

The C.I.A. and Mafia use drug profits to control the FED and rob communities worldwide…

One of the dirty little secrets behind the housing bubble is the long-standing partnership of narcotics trafficking and mortgage fraud and the use of the two in combination to target and destroy communities with highly profitable economic warfare. This model is global. It is operating in counties throughout the world as well as in US communities.

The Federal Reserve engineered the housing bubble. Fannie Mae and Freddie Mac mortgage volumes in low- and moderate-income communities is the FEDs way to increase government mortgage guarantees- most of these mortgages would be pooled and sold as securities to investors. Which would create unserviceable debt loads in communities struggling with the falling incomes from globalization. Homeowners would default on mortgages while losses on mortgage-backed securities would drain retirement savings from 401(k)s and pension plans. Taxpayers would ultimately be hit with a large bill . . . but insiders would make a bundle.

The FEDs unstated goal is to achieve maximum return on the sale of its defaulted mortgage assets by using a widespread process of “privatization” in which assets are, in fact, being transferred out of governments worldwide at significantly below market value in a manner providing extraordinary windfall profits, capital gains and financial equity to private corporations and investors. In addition, government functions are being outsourced at prices way above what should have been market price or government costs — again stripping governmental and community resources in a manner that subsidizes private interests. The financial equity gained by private interests is often the result of financial, human, environmental and living equity stripped and stolen from communities — often without communities being able to understand what had happened or to clearly identify their loss. This is why I now refer to privatization as “piratization.”

Even efficiently and honestly executed privatization transactions such as the HUD loan sales policies which insist on open competition at the highest price are advantaging players who are the most successful at laundering money for the “black budget.”

The Federal Reserve and its long-standing partner, the US Treasury, engineered the housing bubble, including the fraudulent inducement of America as part of a financial coup d’état. Our bankruptcy was not an accident. It was engineered at the highest levels.

Paradigms of Republican vs. Democrat or Conservative vs. Progressive have been designed for obfuscation and entertainment

Attracting capital: Making the world safe for the reinvestment of the profits of organized crime and the war machine. Without growing organized crime and military activities through government budgets and contracts, the economy would stop.

The Clinton/Obama Administrations took the groundwork laid by Nixon, Reagan and Bush and embraced and blossomed the expansion and promotion of federal support for police enforcement and the War on Drugs with a passion that was hard to understand unless, and until, you realized that the American financial system was deeply dependent on attracting an estimated $500 billion-$1 trillion of annual money laundering. Globalizing corporations and deepening deficits and housing bubbles required attracting vast amounts of capital.

The Clinton Administration was to govern a doubling of the federal prison population.

Joseph McNamara, a former San Jose police chief from the Hoover Institute at Stanford University, published some really telling figures. In 1972, when Richard Nixon started the War on Drugs, the annual federal budget allocation was 110 million dollars a year for enforcement. In fiscal year 2000, 28 years later, the budget allocation was 17 billion dollars a year, and yet, in the year 2000, there were more drugs in this country, they were cheaper, and more potent than they were in 1972. That has to tell you that there’s some other agenda going on here.

Clark Clifford, who was a Wall Street banker and lawyer, wrote the National Security Act that created the CIA in 1947. He brought us BCCI. John Foster Dulles and Allen Dulles gave both law partners in the Wall Street law firm of Sullivan and Cromwell wrote the outline for the CIA, the design for the Agency, to Clark Clifford. In 1969 after Nixon came in, the Chairman of SEC [Securities and Exchange Commission] was William Casey – who was Ronald Reagan’s Director of Central Intelligence. And the Vice President in charge of enforcement for the New York Stock Exchange was Dave Dougherty, a retired CIA General Counsel. The CIA is Wall Street, and vice versa. When you understand that, and that money is the primary objective, everything else just falls into place.

The distinctions drawn between business, politics, and organized crime are at best artificial and in reality irrelevant. Rather than being dysfunctions, corporate crime, white-collar crime, organized crime, and political corruption are mainstays of American political-economic life.

Narcotics: Second to Oil and the Arms Trade

The UK sponsored crop eradication program is an obvious smokescreen. Since October 2001, opium poppy cultivation has skyrocketed. The presence of occupation forces in Afghanistan did not result in the eradication of poppy cultivation. Quite the opposite.

The Taliban prohibition had indeed caused “the beginning of a heroin shortage in Europe by the end of 2001″, as acknowledged by the UNODC.

Heroin is a multibillion dollar business supported by powerful interests, which requires a steady and secure commodity flow. One of the “hidden” objectives of the war was precisely to restore the CIA sponsored drug trade to its historical levels and exert direct control over the drug routes.

The Afghan narcotics economy was a carefully designed project of the CIA, supported by US foreign policy.

As revealed in the Iran-Contra and Bank of Commerce and Credit  International (BCCI) scandals, CIA covert operations in support of the Afghan Mujahideen had been funded through the laundering of drug money.  “Dirty money” was recycled –through a number of banking institutions (in the Middle East) as well as through anonymous CIA shell companies–, into  “covert money,” used to finance various insurgent groups during the Soviet-Afghan war, and its aftermath:

“Because the US wanted to supply the Mujahideen rebels in Afghanistan with stinger missiles and other military hardware it needed the full cooperation of Pakistan. By the mid-1980s, the CIA operation in Islamabad was one of the largest US intelligence stations in the World. `If BCCI is such an embarrassment to the US that forthright investigations are not being pursued it has a lot to do with the blind eye the US turned to the heroin trafficking in Pakistan’, said a US intelligence officer. (“The Dirtiest Bank of All,” Time, July 29, 1991, p. 22.)

Researcher Alfred McCoy’s study confirms that within two years of the onslaught of the CIA’s covert operation in Afghanistan in 1979,

“the Pakistan-Afghanistan borderlands became the world’s top heroin producer, supplying 60 per cent of U.S. demand. In Pakistan, the heroin-addict population went from near zero in 1979  to 1.2 million by 1985, a much steeper rise than in any other nation.”

The bulk of the revenues associated with the global trade in narcotics are not appropriated by terrorist groups and warlords, as suggested by the UNODC report.

There are powerful business and financial interests behind narcotics. From this standpoint, geopolitical and military control over the drug routes is as strategic as oil and oil pipelines.

However, what distinguishes narcotics from legal commodity trade is that narcotics constitutes a major source of wealth formation not only for organized crime but also for the US intelligence apparatus, which increasingly constitutes a powerful actor in the spheres of finance and banking.

In turn, the CIA, which protects the drug trade, has developed complex business and undercover links to major criminal syndicates involved in the drug trade.

In other words, intelligence agencies and powerful business syndicates allied with organized crime, are competing for the strategic control over the heroin routes. The multi-billion dollar revenues of narcotics are deposited in the Western banking system. Most of the large international banks together with their affiliates in the offshore banking havens launder large amounts of narco-dollars.

Former British Ambassador to Uzbekistan, Craig Murray, wrote in a 2007 article in the UK Daily Mail, that what has been achieved in Afghanistan is “the highest harvests of opium the world has ever seen.”[19] Murray elaborated that, “Our economic achievement in Afghanistan goes well beyond the simple production of raw opium. In fact Afghanistan no longer exports much raw opium at all. It has succeeded in what our international aid efforts urge every developing country to do. Afghanistan has gone into manufacturing and ‘value-added’ operations.” This means that Afghanistan “now exports not opium, but heroin. Opium is converted into heroin on an industrial scale, not in kitchens but in factories. Millions of gallons of the chemicals needed for this process are shipped into Afghanistan by tanker. The tankers and bulk opium lorries on the way to the factories share the roads, improved by American aid, with NATO troops.” Murray explains that this was able to happen because “the four largest players in the heroin business are all senior members of the Afghan government.” Murray stated that, “Our only real achievement to date is falling street prices for heroin in London.”[20]

Want more?

CNN: CIA admits it overlooked Contras’ links to drugs

Afghanistan supply’s about 90% of the worlds opium. We arrived in 2001. In the following nine years opium production has surged 700%. Recording all time record harvests beginning around 2010.

During the time opium production was being ramped up in Afghanistan, Mexico was retooling their ability to convert ever larger supply’s of opium into increasingly potent heroin and developing new infrastructure to transport it.

During the decade or so all this was going on in Afghanistan and Mexico, scripts here in America for Oxycontin, Fentanyl, Hydrocodone and the like were wildly available to any person claiming chronic pain. Nothing was done to confirm the claims of pain, sorta like the stated income, liar loans that set up the housing collapse. Basically scripts were available to almost anyone for the asking.

That all ended one day in 2011.

Almost overnight The Oxycontin and Fentanyl was turned into useless plastic and millions of scripts across the country were shut down with the exception of those few in truly chronic pain.

Simultaneously and amazingly as if by magic, that very day every city in America suddenly had a fresh two ton supply of high quality vary affordable heroin. In fact the prices have never been lower and the quality never higher.

Heroin smuggled by “CIA people” into the U.S. was channeled by Mafia distributors primarily to African-American communities. Local narcotic agents then targeted disenfranchised blacks as an easy way of preserving the white ruling class’s privileges.

“We didn’t need a search warrant,” explains New Orleans narcotics officer Clarence Giarusso. “It allowed us to meet our quota. And it was on-going. If I find dope on a black man, I can put him in jail for a few days. He’s got no money for a lawyer and the courts are ready to convict. There’s no expectation on the jury’s part that we have to make a case.

“So rather than go cold turkey, the addict becomes an informant, which means I can make more cases in the neighborhood, which is all we’re interested in. We don’t care about Carlos Marcello or the Mafia. City cops have no interest in who brings dope in. That’s the job of the federal agents.”

In 2002, former Additional Secretary in the Cabinet Secretariat of the Government of India wrote that, in regard to the failure to combat the rise in opium production, “this marked lack of success in the heroin front is due to the fact that the Central Intelligence Agency (CIA) of the USA, which encouraged these heroin barons during the Afghan war of the 1980s in order to spread heroin-addiction among the Soviet troops, is now using them in its search for bin Laden and other surviving leaders of the Al Qaeda.”[21]

In 1995, the former CIA director of the Afghan operation, Charles Cogan, admitted the CIA had indeed sacrificed the drug war to fight the Cold War. ‘Our main mission was to do as much damage as possible to the Soviets. We didn’t really have the resources or the time to devote to an investigation of the drug trade,’ I don’t think that we need to apologize for this. Every situation has its fallout. There was fallout in terms of drugs, yes. But the main objective was accomplished. The Soviets left Afghanistan.’”(McCoy, op cit)

The Hindu reported in 2008 that, “90 per cent of the heroin sold in Russia comes from Afghanistan,” and Putin was quoted as saying, “Unfortunately, they (NATO) are doing nothing to reduce the narcotic threat from Afghanistan even a tiny bit,” and that the coalition forces were “sitting back and watching caravans haul drugs across Afghanistan to the former Soviet Union and Europe.” The article then reported that, “according to unconfirmed reports the U.S. military transport aviation is used for the delivery of drugs from Afghanistan to the American airbases, Ganci in Kyrgyzstan and Incirlik in Turkey,” and that, “It has been reported earlier that the CIA is involved in Afghanistan’s opium production, or is at least protecting it.” One Russian journalist quoted anonymous Afghan officials as saying, “85 per cent of all drugs produced in southern and southeastern provinces are shipped abroad by U.S. aviation.”[22]

Drug trafficking is the largest global commodity in profits after the oil and arms trade, consequently, “immediately following the October 2001 invasion opium markets were restored. Opium prices spiraled. By early 2002, the domestic price of opium in Afghanistan (in dollars/kg) was almost 10 times higher than in 2000.”[15] The Anglo-American invasion of Afghanistan successfully restored the drug trade. The Guardian recently reported that, “In 2007 Afghanistan had more land growing drugs than Colombia, Bolivia and Peru combined.”[16].

Michel Chossudovsky describes the heroin trade as a “hierarchy of prices,” with the drug’s street price, (what it is sold for in largely Western cities around the world), is 80 to 100 times the price paid to the farmers who cultivate it in Afghanistan.[25] The IMF reported that in the late 1990s, money laundering accounted for 2-5% of the world’s GDP, and that a large percentage of the 590 billion to 1.5 trillion dollars in annual money laundering is “directly linked to the trade in narcotics.” This lucrative trade in narcotics produces profits which are “laundered in the numerous offshore banking havens in Switzerland, Luxembourg, the British Channel Islands, the Cayman Islands and some 50 other locations around the globe.” These offshore havens “are controlled by major Western banks and financial institutions” which “have a vested interest in maintaining and sustaining the drug trade.”[26]

An example of the interest of Wall Street and London bankers in the international drug trade, we can look to Colombia and the FARC rebel group. In “1999, NYSE [New York Stock Exchange] Chairman Dick Grasso traveled to Colombia and met with the leader of the FARC rebels controlling the southern third of the country.” “Grasso had asked the Colombian rebels to invest their profits in Wall Street.”[27] The Associated Press reported that Grasso told the rebel leader to, “make peace and expect great economic benefits from global investors,” and invited the rebel leader to visit Wall Street.[28] To allow for drug investment in Western financial institutions, “major banks like Citigroup, Bank of America, Morgan Stanley, Deutsche Bank, and JPMorgan Chase all offer private client services for the very wealthy with very few questions asked.”[29]

This recycling of drug money was used to finance the post-Cold War insurgencies in Central Asia and the Balkans including Al Qaeda. (For details, see Michel Chossudovsky, War and Globalization, The Truth behind September 11, Global Outlook, 2002,

The revenues generated from the CIA sponsored Afghan drug trade are sizeable. The Afghan trade in opiates constitutes a large share of the worldwide annual turnover of narcotics, which was estimated by the United Nations to be of the order of $400-500 billion. (Douglas Keh, Drug Money in a Changing World, Technical document No. 4, 1998, Vienna UNDCP, p. 4. See also United Nations Drug Control Program, Report of the International Narcotics Control Board for 1999, E/INCB/1999/1 United Nations, Vienna 1999, p. 49-51, and Richard Lapper, UN Fears Growth of Heroin Trade, Financial Times, 24 February 2000). At the time these UN figures were first brought out (1994), the (estimated) global trade in drugs was of the same order of magnitude as the global trade in oil.

The IMF estimated global money laundering to be between 590 billion and 1.5 trillion dollars a year, representing 2-5 percent of global GDP. (Asian Banker, 15 August 2003). A large share of global money laundering as estimated by the IMF is linked to the trade in narcotics.

Based on figures from 2003, drug trafficking  constitutes “the third biggest global commodity in cash terms after oil and the arms trade.” (The Independent, 29 February 2004).

Moreover, the above figures including those on money laundering, confirm that the bulk of the revenues associated with the global trade in narcotics are not appropriated by terrorist groups and warlords, as suggested by the UNODC report.

There are powerful business and financial interests behind narcotics. From this standpoint, geopolitical and military control over the drug routes is as strategic as oil and oil pipelines.

Sources:

[1] Stephen Fidler, UN alarm at spread of Afghan opium. Financial Times: March 4, 2008: http://us.ft.com/ftgateway/superpage.ft?news_id=fto030420081933091960

[2] Bill Blum (translator). The CIA’s Intervention in Afghanistan. Global Research: October 15, 2001: http://www.globalresearch.ca/articles/BRZ110A.html

[3-4] Peter Dale Scott, The Road to 9/11: Wealth, Empire, and the Future of North America. University of California Press: 2007, page 124

[5] Peter Dale Scott, Ibid, page 122-23

[6] Peter Dale Scott, Ibid, page 123

[7] Steve Coll, Ghost Wars: The Secret History of the CIA, Afghanistan, and Bin Laden, From the Soviet Invasion to September 10, 2001. Penguin Books, New York, 2004: Page 328

[8] Steve Coll, Ibid, page 293

[9] Steve Coll, Ibid, pages 293-294

[10] Steve Coll, Ibid, pages 295-296

[11] Times of India, CIA worked in tandem with Pak to create Taliban. Times of India Online: March 7, 2001: http://www.multiline.com.au/~johnm/taliban.htm

[12] Michel Chossudovsky, America’s War on Terrorism, 2nd ed. Center for Research on Globalization: Québec, 2005: Page 226

[13] Michel Chossudovsky, Ibid, page 227

[14] Robert Scheer, Bush’s Faustian Deal With the Taliban. The Nation: June 4, 2001: http://www.thenation.com/doc/20010604/20010522

[15] Michel Chossudovsky, Op cit, page 228

[16] Patrick Wintour, Opium economy will take 20 years and £1bn to remove. The Guardian: February 6, 2008:     http://www.guardian.co.uk/world/2008/feb/06/afghanistan.politics

[17] Justin Huggler, Afghan minister quits over opium trade. The Independent: September 28, 2005: http://www.independent.co.uk/news/world/asia/afghan-minister-quits-over-opium-trade-508664.html

[18] Robert Fox, CIA is undermining British war effort, say military chiefs. The Independent: December 10, 2006: http://www.independent.co.uk/news/world/middle-east/cia-is-undermining-british-war-effort-say-military-chiefs-427848.html

[19-20] Craig Murray, Britain is protecting the biggest heroin crop of all time. UK Daily Mail: July 21, 2007: http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id=469983&in_page_id=1770&in_page_id=1770&expand=true

[21] B. Raman, Assassination of Jaki Abdul Qadeer in Kabul. South Asia Analysis Group: Paper no. 489, August 7, 2002: http://www.southasiaanalysis.org/papers5/paper489.html

[22] Vladimir Radyuhin, Russia: victim of narco-aggression. The Hindu: February 4, 2008: http://www.hindu.com/2008/02/04/stories/2008020453271000.htm

[23-24] Jerome Starkey, Revealed: British plan to build training camp for Taliban fighters in Afghanistan. The Independent: February 4, 2008: http://www.independent.co.uk/news/world/asia/revealed-british-plan-to-build-training-camp-for-taliban-fighters-in-afghanistan-777671.html

[25] Michel Chossudovsky, Op cit, page 230

[26] Michel Chossudovsky, Ibid, page 233

[27] Michael C. Ruppert, Crossing the Rubicon: The Decline of the American Empire at the End of the Age of Oil. New Society Publishers: Canada, 2004: Page 57

[28] CBS MarketWatch, NYSE’s Grasso met with Colombia’s FARC. AP: June 29, 1999: http://www.marketwatch.com/news/story/-nyses-grasso-met-colombias/story.aspx?guid=%7B571A6F96-E694-4D58-A7A9-F5DBFF132F4A%7D

[29] Michael C. Ruppert, Op cit, page 61

From The Wilderness

Organized Crime and American Power (University of Toronto Press, 2001)

How Drug Profits saved Capitalism James Petras, Global Research

Dillon Read & the Aristocracy of Stock Profits (http://www.dunwalke.com)

Covert Action, Summer 1992.

http://coat.ncf.ca/our_magazine/links/issue43/articles/mone_laundering_for_contras.htm

www.infomanage.com/secrets/bios/bushes.html

campaignwatch.org/more1.htm

Mike Ruppert

1980s, USA: Money Laundering for Contras, the Mob and the CIA

By Gary W. Potter, Eastern Kentucky University.

The Quiet Coup by Simon Johnson