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Thread: UN Drug Watchdog: In many instances, drug money is currently the only liquid investment capital

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    Apr 2007

    Default UN Drug Watchdog: In many instances, drug money is currently the only liquid investment capital

    Vienna-based UNODC Executive Director Antonio Maria Costa said in an interview released by Austrian weekly Profil that drug money often became the only available capital when the crisis spiralled out of control last year.

    "In many instances, drug money is currently the only liquid investment capital," Costa was quoted as saying by Profil. "In the second half of 2008, liquidity was the banking system's main problem and hence liquid capital became an important factor."

    The United Nations Office on Drugs and Crime had found evidence that "interbank loans were funded by money that originated from drug trade and other illegal activities," Costa was quoted as saying. There were "signs that some banks were rescued in that way."

    Profil said Costa declined to identify countries or banks which may have received drug money and gave no indication how much cash might be involved. He only said Austria was not on top of his list, Profil said.


    Costa's blog:

    Not only have bankers created monstrous financial instruments whose size, complexity and ownership nobody could understand or master. So many of them have engaged in something both stupid and diabolic. They have allowed the world's criminal economy to become part of the global economy. Investment bankers, fund managers, commodity traders and realtors - together with auditors, accountants and lawyers - have assisted syndicates to launder the proceeds from crime and become legitimate partners to business. In most cases the predicated crime was mafia-type: namely, violence against individuals, business and property. In other cases the predicated crime was corruption: namely, a silent yet pernicious violence against national treasuries and against public services that remain unfunded.

    Greedy banks have taken in and hidden this blood money. Complex financial instruments have made financial markets deliberately less transparent and more accessible to wrong-doing. Thanks to bankers, accountants and lawyers, criminal groups have become multinational corporations: a sort of mafia borghese, or white collar syndicate. Today, the financial crisis is providing an extraordinary opportunity for even greater mafia penetration of cash-strapped financial houses: with the banking crisis choking lending, these cash-rich criminal groups have emerged as the only sources of credit. Nobody seems to have challenged Roberto Saviano's assertion, made in the book and film Gomorra, that "it is not the Camorra that chooses finance, it is finance that chooses the Camorra".


    April 1, 1985 (FORTUNE Magazine)

    Federal probers are trying to track down some of the estimated $100 billion they believe is laundered through financial institutions every year. Nor are the investigators looking only at banks. Brokerage houses in Boston and New York are under the magnifying glass too. And Congress has just passed a law that will make gambling casinos, long suspected of being used by launderers, subject to the same reporting requirements as banks and brokerage houses. Laundering is the art of moving ''suitcase money'' from illegal businesses into legitimate financial channels to conceal its unsavory origins. Once underworld characters receive clean money in exchange--most often bank cashier's checks--they can invest in other businesses or splurge on yachts and fur coats. A big chunk of the elusive $100 billion seems to come from illegal gambling, prostitution, and other such enterprises. More than a third, though, probably arises from the drug trade.


    If it was $100 billion in 1985, what's the figure in 2009?

    Catherine Austin Fitts since as far back as (at least) 2001 has referred to a US DOJ estimate of $500 billion to $1 trillion...
    Last edited by Slimprofits; 03-18-09 at 01:25 AM.

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