Tuesday, February 15, 2011
United Nations' drugs and crime tsar says that Drugs money worth billions of dollars kept the financial system afloat at the height of the global crisis, so doesn't that include British Columbia?
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Drug money saved banks in global crisis, claims UN advisor
Drugs and crime chief says $352bn in criminal proceeds was effectively laundered by financial institutions
By Rajeev Syal
The Observer (U.K.) 13 December 2009
Drugs money worth billions of dollars kept the financial system afloat at the height of the global crisis, the United Nations' drugs and crime tsar has told the Observer.
Antonio Maria Costa, head of the UN Office on Drugs and Crime, said 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.
This will raise questions about crime's influence on the economic system at times of crisis. It will also prompt further examination of the banking sector as world leaders, including Barack Obama and Gordon Brown, call for new International Monetary Fund regulations. Speaking from his office in Vienna, Costa said evidence that illegal money was being absorbed into the financial system was first drawn to his attention by intelligence agencies and prosecutors around 18 months ago. "In many instances, 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," he said.
Some of the evidence put before his office indicated that gang money was used to save some banks from collapse when lending seized up, he said.
"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." Costa declined to identify countries or banks that may have received any drugs money, saying that would be inappropriate because his office is supposed to address the problem, not apportion blame. But he said the money is now a part of the official system and had been effectively laundered.
"That was the moment [last year] when the system was basically paralysed because of the unwillingness of banks to lend money to one another. The progressive liquidisation to the system and the progressive improvement by some banks of their share values [has meant that] the problem [of illegal money] has become much less serious than it was," he said. [That choking sound was BC Mary ... "less serious" because it's so well hidden ... um, err ... "integrated" ... ?]
The IMF estimated that large US and European banks lost more than $1tn on toxic assets and from bad loans from January 2007 to September 2009 and more than 200 mortgage lenders went bankrupt. Many major institutions either failed, were acquired under duress, or were subject to government takeover.
Gangs are now believed to make most of their profits from the drugs trade and are estimated to be worth £352bn, the UN says. They have traditionally kept proceeds in cash or moved it offshore to hide it from the authorities. It is understood that evidence that drug money has flowed into banks came from officials in Britain, Switzerland, Italy and the US.
British bankers would want to see any evidence that Costa has to back his claims. A British Bankers' Association spokesman said: "We have not been party to any regulatory dialogue that would support a theory of this kind. There was clearly a lack of liquidity in the system and to a large degree this was filled by the intervention of central banks."
Source:
http://www.guardian.co.uk/global/2009/dec/13/drug-money-banks-saved-un-cfief-claims
Drug money saved banks in global crisis, claims UN advisor
Drugs and crime chief says $352bn in criminal proceeds was effectively laundered by financial institutions
By Rajeev Syal
The Observer (U.K.) 13 December 2009
Drugs money worth billions of dollars kept the financial system afloat at the height of the global crisis, the United Nations' drugs and crime tsar has told the Observer.
Antonio Maria Costa, head of the UN Office on Drugs and Crime, said 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.
This will raise questions about crime's influence on the economic system at times of crisis. It will also prompt further examination of the banking sector as world leaders, including Barack Obama and Gordon Brown, call for new International Monetary Fund regulations. Speaking from his office in Vienna, Costa said evidence that illegal money was being absorbed into the financial system was first drawn to his attention by intelligence agencies and prosecutors around 18 months ago. "In many instances, 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," he said.
Some of the evidence put before his office indicated that gang money was used to save some banks from collapse when lending seized up, he said.
"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." Costa declined to identify countries or banks that may have received any drugs money, saying that would be inappropriate because his office is supposed to address the problem, not apportion blame. But he said the money is now a part of the official system and had been effectively laundered.
"That was the moment [last year] when the system was basically paralysed because of the unwillingness of banks to lend money to one another. The progressive liquidisation to the system and the progressive improvement by some banks of their share values [has meant that] the problem [of illegal money] has become much less serious than it was," he said. [That choking sound was BC Mary ... "less serious" because it's so well hidden ... um, err ... "integrated" ... ?]
The IMF estimated that large US and European banks lost more than $1tn on toxic assets and from bad loans from January 2007 to September 2009 and more than 200 mortgage lenders went bankrupt. Many major institutions either failed, were acquired under duress, or were subject to government takeover.
Gangs are now believed to make most of their profits from the drugs trade and are estimated to be worth £352bn, the UN says. They have traditionally kept proceeds in cash or moved it offshore to hide it from the authorities. It is understood that evidence that drug money has flowed into banks came from officials in Britain, Switzerland, Italy and the US.
British bankers would want to see any evidence that Costa has to back his claims. A British Bankers' Association spokesman said: "We have not been party to any regulatory dialogue that would support a theory of this kind. There was clearly a lack of liquidity in the system and to a large degree this was filled by the intervention of central banks."
Source:
http://www.guardian.co.uk/global/2009/dec/13/drug-money-banks-saved-un-cfief-claims
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Mary that figure is 352 billion POUND STERLING = just under CAD $562 billion.
They're talking about actual bags of cash transferred through banks into the regular economy. Money in BC has been laundered in many ways, notably in real estate and in retail service operations (lots of really really slow businesses around that seem to last despite no business huh? - but also just buying bling/toys) and in other more direct ways than bags of cash dumped on banker's desks. Real estate? Yeah, sure - how many times do you recall 3/4 of a subdivision being discovered to contain grow-ops. Who do you think built the subdivision?? Construction is quite often a cash business, at least residential housing if not the big towers (but even then....), but do you think a a realtor really cares where that suitcase full of cash came from to buy that house, whether it's someone fresh-arrived from Asia or the Middle East, or somebody local? Do you think a credit card or mortgage company cares where their payments come from?
Party memberships and campaign donations, yeah, sure, why not? Especially if it's in grandma's name....it's also known to have benefitted culture and artists; there are endless stories of this or that indie film production or gallery that folded when the grow-op funding it got busted....and without naming names, there's a certain large theatre in the Fraser Valley where the benefactors were connected to one of the largest grow-ops in BC history, which was hidden inside an old cannery. Largesse from drugs isn't all about bailing out banks, or buying guns.....in fact some drug people seem to do more for the arts, and education (helping people with their tuition/living costs/student loans) than our governments do. Same with health costs no longer covered by government plans. Or rather, they do it for family and friends because of what the government has done to the system.
If BC's drug trade is worth $6 billion - that's a conservative estimate, and kinda old - or $12 billion (also old), then the sudden absence of that money from our economy, if it were really to occur (or was possible to stop), would grind our economy to a halt. Restaurants and retail outlets would fold, housing values would necessarily plummet, a LOT of people would be out of work as a result. Continental legalization would have a similar effect (it couldn't be us alone, or it wouldn't be tolerated), as drug prices would drop, and the cash flow with it....I honestly think this is one reason the charade of the War On Drugs is kept up - to keep the market value of the contraband up so as to not overly hurt the economy by inflicting its sudden legalization, which would have dire economic consequences.
They're talking about actual bags of cash transferred through banks into the regular economy. Money in BC has been laundered in many ways, notably in real estate and in retail service operations (lots of really really slow businesses around that seem to last despite no business huh? - but also just buying bling/toys) and in other more direct ways than bags of cash dumped on banker's desks. Real estate? Yeah, sure - how many times do you recall 3/4 of a subdivision being discovered to contain grow-ops. Who do you think built the subdivision?? Construction is quite often a cash business, at least residential housing if not the big towers (but even then....), but do you think a a realtor really cares where that suitcase full of cash came from to buy that house, whether it's someone fresh-arrived from Asia or the Middle East, or somebody local? Do you think a credit card or mortgage company cares where their payments come from?
Party memberships and campaign donations, yeah, sure, why not? Especially if it's in grandma's name....it's also known to have benefitted culture and artists; there are endless stories of this or that indie film production or gallery that folded when the grow-op funding it got busted....and without naming names, there's a certain large theatre in the Fraser Valley where the benefactors were connected to one of the largest grow-ops in BC history, which was hidden inside an old cannery. Largesse from drugs isn't all about bailing out banks, or buying guns.....in fact some drug people seem to do more for the arts, and education (helping people with their tuition/living costs/student loans) than our governments do. Same with health costs no longer covered by government plans. Or rather, they do it for family and friends because of what the government has done to the system.
If BC's drug trade is worth $6 billion - that's a conservative estimate, and kinda old - or $12 billion (also old), then the sudden absence of that money from our economy, if it were really to occur (or was possible to stop), would grind our economy to a halt. Restaurants and retail outlets would fold, housing values would necessarily plummet, a LOT of people would be out of work as a result. Continental legalization would have a similar effect (it couldn't be us alone, or it wouldn't be tolerated), as drug prices would drop, and the cash flow with it....I honestly think this is one reason the charade of the War On Drugs is kept up - to keep the market value of the contraband up so as to not overly hurt the economy by inflicting its sudden legalization, which would have dire economic consequences.
Skookum1,
I have no idea how money-launderers "feel" ...
but I'm pretty darn sure that honest people don't carry bags or brief-cases full of $1,000. bills ... and so
the question remains: how do they pass these bags and bundles of cash off to banks, real estate companies, and Yr Friendly Neighbourhood Building Supply Yard?
It's visible, at some critical point. Is there a chain, along which everyone is an accomplice and paid accordingly?
And btw, that $6Billion a year cash revenue (2003 estimate) was the BC take only on marijuana alone; not taking all the other rackets into account.
And the longer it's delayed, the more difficult a clean-up will be. And no kidding, the clean-up [PUBLIC INQUIRY] is obviously being delayed.
It's a horrible thought to imagine laying down our pens and pitchforks and admitting that British Columbia has surrendered to Organized Crime ... but if that's what it takes????
.
I have no idea how money-launderers "feel" ...
but I'm pretty darn sure that honest people don't carry bags or brief-cases full of $1,000. bills ... and so
the question remains: how do they pass these bags and bundles of cash off to banks, real estate companies, and Yr Friendly Neighbourhood Building Supply Yard?
It's visible, at some critical point. Is there a chain, along which everyone is an accomplice and paid accordingly?
And btw, that $6Billion a year cash revenue (2003 estimate) was the BC take only on marijuana alone; not taking all the other rackets into account.
And the longer it's delayed, the more difficult a clean-up will be. And no kidding, the clean-up [PUBLIC INQUIRY] is obviously being delayed.
It's a horrible thought to imagine laying down our pens and pitchforks and admitting that British Columbia has surrendered to Organized Crime ... but if that's what it takes????
.
We live in a shameful society when our economies are controlled by white collar and black collar criminals.
# posted by 
: February 15, 2011 at 11:13 a.m.
: February 15, 2011 at 11:13 a.m.
I've often wondered what folks DO with thousand dollar bills. Brian Mulroney was paid off with them. Did Mila take one over to the Safeway to pay for groceries? Has anybody ever SEEN a $1000 bill?
Ray Blessin
Kamloops
Ray Blessin
Kamloops
# posted by : February 15, 2011 at 4:12 p.m.
: February 15, 2011 at 4:12 p.m.
We don't call Campbell and the BC Liberals, the crime family for nothing. If there's a buck to be made, Campbell will be up to his neck in corruption, to get his share. He will walk away, a multi-millionaire. Drugs and politics go hand in hand all over the globe. The drug trade, is rampant in BC. The drug wars between rival gangs, will continue to, war on. There is just too much money to be had, in the drug trade. Was it not the drug raid, that orchestrated the finding of, the corrupt sale of the BCR?
# posted by : February 16, 2011 at 11:39 a.m.
: February 16, 2011 at 11:39 a.m.
You got that right, 11:39.
It was when police listened to the wiretaps allegedly between Dave Basi and his cousin Jasmohan Bains, that they began to hear about the hanky-panky involving BC Rail.
But maybe, as we speak, The Globe and Mail will be winning the contest in BC Supreme Court today, to see those transcripts.
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It was when police listened to the wiretaps allegedly between Dave Basi and his cousin Jasmohan Bains, that they began to hear about the hanky-panky involving BC Rail.
But maybe, as we speak, The Globe and Mail will be winning the contest in BC Supreme Court today, to see those transcripts.
.
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