The Real Recovery | December 13, 2009 | 39 comments

Drug money saved banks in global crisis, claims UN advisor

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Future_America
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.

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39 comments // Drug money saved banks in global crisis, claims UN advisor

  • wilkinebrutus
    • 0
      wilkinebrutus  
    • Ok, I'm done. This is um...so frustrating. How can I understand the world when the world doesn't understand themselves? Wait...they do understand---ahhh, special, special interest. Greed. I guess um...American Gangster flick wasn't too far off.

    • 3 years ago
  • DrakelikesNachos
  • 02
  • vladbox
    • 0
      vladbox  
    • Noooooo! Reaaaallly! gee I was too busy getting fat and shopping at wal mart.

      Get a grip people it has been happening since the 70's to finance undercover wars and Banks. Hence Plan Colombia and War against terrorism.

    • 3 years ago
  • KaylaMoon
  • MoonLoon
    • 0
      MoonLoon  
    • Billions in cash and trillions in human misery. No taxes paid, thus forcing tax payers to support criminals. Murders, burglaries, robberies, and undermining of police and legal systems. Corrupt bankers working to hide the illegally gained money. Coke, crack, and heroin are in no way comparative to marijuana. Criminals can only spend the cash or find a crooked banker to help them launder the money and this could be stopped with the proper enforcement. This money is used to influence many other businesses from construction, to waste mgt., to cement manufacture, to the clothing design industry. The damage caused by this money is incalculable to the average non-drug using citizen.

    • 3 years ago
  • Possible_Reality
  • Possible_Reality
    • 0
      Possible_Reality  
    • Possible_Reality:

      No I do understand this. I live in California. I see the effects of "legal marijaunna" everywhere.

      For 200 bucks you can pay any doctor and they'll give you a medical marijaunna card.
      Now how many people do I know that lives are all messed up just because someone else wanted to make some money. In California, honestly I think there's nothing we can do to eradicate pot, it's everywhere. I know 8 year olds who have tried it.

      Knowing all of this, just the factof how much drug money is running the system scares me.

      I'm not for pot smoking, but I'm not for taking away someone's "god given right". Honestly, I think if this economy keeps up much longer (which it probably will) then we will legalize pot

    • 3 years ago
  • J_Jammer
  • cctempo
  • snaganalf
    • 0
      snaganalf  
    • We are in Afghanistan for two reasons. One : The opium, Two : there is an international natural gas pipeline being built through there that the world bankers have a very large interest in money wise. Best way to protect both is a military presence.

    • 3 years ago
  • Vierotchka
    • 0
      Vierotchka  
    • Which is one of the main reasons why we attacked and are occupying Afghanistan and intend to remain there for a very long time - the Taliban had managed to put an end to opium production back in early 2001, so banks and corrupt government officials panicked.

    • 3 years ago
  • 02
    • 0
      02  
    • Pot might get legalized. But society cannot back drugs. To make something legal, society must sanction it.

      And society will not back drugs. It is entirely likely that once legalized, pot may once-again be outlawed.

      Let face it, pot is an outlaw. pot smokers are outlaws.

      Outlaws, pirates and drugs. There you be -

    • 3 years ago
  • Conniepae
    • 0
      Conniepae  
    • 02:

      Abraham Lincoln would be a 'outlaw' today!

      A 'shmuck' like Richard Nixon would have made a hero like Abraham Lincoln a 'outlaw'. That's insane to say the least.

      "Two of my favorite things are sitting on my front porch smoking a pipe of sweet hemp, and playing my Hohner harmonica." - Abraham Lincoln (from a letter written by Lincoln during his presidency to the head of the Hohner Harmonica Company in Germany)

      'Sweet hemp' = cannabis/marijuana

      Stop spinning 'madness'! Abraham Lincoln was a hero. Richard Nixon left office early in shame. Who do you trust?

    • 3 years ago
  • EmperorThan
    • 0
      EmperorThan  
    • 02:

      First of all it's "AN" outlaw.

      And second, pot will never be legalized to begin with. A lot of people in this country keep talking like they think it will soon, and though I think it should be, it won't happen. Not now not ever. This country has a bigger industry to keep it illegal than it would have if it was legalized. Or at least that's what the people who make the rules think. A drug dog costs 50,000 dollars to train PER DRUG. Do you realize 60 percent of all people in prison in this country are there for drugs, and 90% of that is for pot. Do you think the people paying for those expensive drug dogs or getting free taxpayer money for the prisons are going to say "Oh well, easy come easy go." It won't happen. Weed will never ever ever ever be legal. In fact I bet alcohol and cigarettes will soon BECOME illegal.

      I don't use pot and actually advocate against it. I want weed to be legal because kids below 18 have no right to do it and legalizing it would get it out of their hands for the most part. I also advocate against alcohol, cigarettes, and drinking draino. But I'm not going to force you (an adult) to do what I say. Because we live in a FREE FUCKING COUNTRY. Despite what our laws say.

    • 3 years ago
  • 02
    • 0
      02  
    • 02:

      My points were that they may well legalize it - in at least several places. But regardless of how much these potheads love the idea of anything pot, everything pot, - this country is not going to place drugs and intoxication as an ok thing to do nor to espouse - nor teach to children.
      Period.

      It just isn't seemly.

    • 3 years ago
  • 02
    • 0
      02  
    • 02:

      How many countries, in history, have an "ok" for pot? You know, there is the National Flag and Banner, that National Anthem - ...and pot - ?

      Hippie communes - that's it. It's a weak discussion even for Current

    • 3 years ago
  • Conniepae
    • 0
      Conniepae  
    • 02:

      First of all ‘don’t waste your time on my grammar. I had just reread my comment and was going to edit it, but read on to realize you already had. Thank you.

      Second, I do appreciate your comment and sadly agree. But, in my heart of hearts, I do hope the ‘voices of reason’ stand up and work to get cannabis re-scheduled, away from heroin and other destructive drugs. Cannabis is far less dangerous to the individual, or their families, than heroin.

      Today in America, parents are doing double speak to their children. Their children know they smoke cannabis. They are forced to be ‘apparent’ criminals, due to ‘madness’ and spin, perpetuated by corporate America, industries which fear the competition of a natural plant, which grows like a weed. If parents are honest with their children, they have already explained the ‘madness’ of politicians who spin for political gain. Politics over people. It’s a fact. They know the facts, which is why they avoid an actual factual conversation. Cannabis has history. Positive history. If they don’t tell ordinary Americans, they think they won’t find out? Too late, the facts are readily available and documented.

      Jack Herer wrote a book, “The Emperor Wears No Clothes” complete with facts and documentation. I would like to hear them protest the facts contained in the book. I read it almost 20 years ago and have yet to hear any challenge of the facts contained in the book. One would think if the book were wrong, they would want to prove it? Bring their own facts and challenge Jack Herer’s book?

      Please excuse any grammar, or spelling errors. I have a limited time and don’t have time to critique my writing. Sorry!

    • 3 years ago
  • EmperorThan
    • 0
      EmperorThan  
    • "So the next time you see a drug dealer in uniform on the street, say thank you for your service to this country."

      "YO STEP OFF MANG!" *gunfire*

    • 3 years ago
  • urbanwolf
    • 0
      urbanwolf  
    • Somehow, "I told you so" doesn't seem to do this piece justice. How much longer until the UN wakes up?!

      This isn't news, Prohibition Fails.

    • 3 years ago
  • bombastinator
  • ras_menelik
    • 0
      ras_menelik  
    • 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."

      http://www.youtube.com/watch?v=7-ZLX4PpEso&feature=youtube_gdata

    • 3 years ago
  • bombastinator
  • ras_menelik
  • FlexSF
  • ENDIF
    • 0
      ENDIF  
    • Now if only we could remove the violence and corruption from the equation, and keep all of that capital.. like if drugs were legalized, regulated, and taxed, and users educated and treated free on demand.

    • 3 years ago
  • bombastinator
    • 0
      bombastinator  
    • ENDIF:

      It wasn;t that it was drug money specifically, it was that it was illegal money. If drugs were legalised drug money wouldn't have been available because it would have gone down with the rest of the economy. Instead the very same support would have come from other illegal activities like gun running and human trafficking.

      In this case I suspect there would also be someone suggesting that if we only re allowed slavery and taxed that then there wouldn't be a problem.. ad infinitum.

    • 3 years ago
  • ENDIF
    • 0
      ENDIF  
    • ENDIF:

      @ unclepete813
      Ridiculous claims.

      - Had illegal drugs been decriminalized, the legal companies that would take the markets away from the violent cartels would have been paying in taxes and employing people, providing a significant economic buffer against the losses in the housing and financial markets.

      - You compare decriminalization of a faux-morality victimless 'crime' with slavery. Spew hyperbole much?

    • 3 years ago
  • 02
  • bombastinator
    • 0
      bombastinator  
    • ENDIF:

      No I compare them to the other things that organized crime is into. The major revenue sources of modern orgainzed crime are:

      drug smuggling
      human trafficking
      cyber and identity crime.
      traditional systems (protection, loan sharking, etc...).

      I just picked number 2 since number 1 had been removed. To reiterate: It's not the drugs, it's the illegal that made it work. This has nothing to do with drugs.

    • 3 years ago
  • 02
  • unclepete813
    • 0
      unclepete813  
    • why dont the law when they have a big siesure of money put it back into the community, sinse they use our tax dollars. but they never put it back in communitys, they buy more shit for themselves. this is a big scam, get rid of DEA. it will be more money flowing around usa. and in the pockets of more,

    • 3 years ago
  • 02
    • 0
      02  
    • unclepete813:

      This is precisely the truth. Essentially, the more cash is in circulation, the better our economy - for everyone, top and bottom. Financial world has been violating this for years - taking cash for their own investment strategies. They sent our cash overseas and created phony businesses to sell phoney products back to us at our higher market. The whole time, middling our wealth to foreign shores.
      If we had the cash, we would produce, we would be strong, - we would be expanding and thriving.

      But no, business and financial people raped this country -

      After all, why should we, Americans have our money when they wanted it.

    • 3 years ago
  • bombastinator
    • 0
      bombastinator  
    • unclepete813:

      wrong. It is put back in the economy. The law enforcement agencies use the stuff to do things like buy equipment, so it is effectively turned directly into tax money we don't have to pay.

      I think you misread the article though, or at least one of us did. It might have been me.

      What I gathered was that the liquid money in question was not seized drug money but illegal drug profits. The banks were forced to effectively launder drug money in order to keep afloat.

    • 3 years ago
  • evertre
  • ryan8566
  • unclepete813
    • 0
      unclepete813  
    • i been telling people this for a long time. in the 90's until bush got in office the economy was great, dope was on the streets everyone had money. the dope dealer spends his money in the economy, all business people boom. from car lots to small business like clothing shops, and more. the money keeps going around. when the so call war on drugs. no money going directly back to the communitys. cause the big elites dont like the smaller people to live, they want every one broke, I say let the coke come in and the money flows back tru small business. i know, cause im retired from the game. i can see the difference in towns. peace out.

    • 3 years ago
  • bombastinator
    • 0
      bombastinator  
    • unclepete813:

      that might make sense if it wasn't the same elites in control in high drug use periods. The people didn;t change though. IMHO The natural progression of uncontrolled capitalism is to an oligarchy and then finally a caste system. This is what happened. I doubt how much pressure being put on the system made much difference in this except to possibly accelerate it and or help decide which group wound up filling which caste.

    • 3 years ago
  • aquamammal
    • 0
      aquamammal  
    • unclepete813:

      It would be fine also if not for the fact drugs fuck you up.

      I'm all for legalization of everything, but that's only a means to an end for higher levels of drug education and awareness. We should be taxing and regulating substances, not just driving them into the black market.

      XVX for life, R.A.S.H. 'til death.

    • 3 years ago
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