"Undocumented": U.S. Banks Servicing Drug Cartels

"Undocumented": U.S. Banks Servicing Drug Cartels

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The vital role of U.S. banks in moving billions of dollars for Mexican drug cartels--enabling their latest five-year killing spree—has largely been “undocumented.”

Wachovia, now owned by Wells Fargo, is prominently featured on the list of financial institutions that have helped move money for Mexican cartels. The list also includes Bank of America, American Express, as well as the Mexican offices of Citigroup and the European HSBC and Banco Santander, and money-transfer giant Western Union.

Two feature stories published nine months apart explain Wachovia’s laundering of $378.4 billion, processed through money exchangers, plus $4.7 billion handled in bulk cash, in the three-year period of 2004 to 2007: Bloomberg’s Wachovia's Drug Habit and the UK’s The Observer: How a big US bank laundered billions from Mexico's murderous drug gangs.

The latter marks a memorable anniversary: Wachovia’s amnesty after one year of good conduct. In March 2011 the U.S. government formally dropped all charges against the bank as part of a settlement agreement reached at a U.S. District Court in Miami a year ago.

The bank was sanctioned “for failing to apply the proper anti-laundering strictures,” giving international cocaine cartels “a virtual carte blanche to finance their operations,” according to federal prosecutor Jeffrey Sloman.

Were their dealings undocumented? Not at all. Wachovia’s misdeeds as well as those of other prominent financial institutions have been followed closely for decades, in the United States alone by the Treasury, the DEA, the IRS, and the Justice Department.

Money laundering by the banking industry has also been documented by foreign government agencies in the UK, Mexico, and Colombia, as well as by the United Nations Office on Drugs and Crime. The former head of that office, Antonio Maria Costa, revealed in 2008 that “inter-bank loans were funded by money that originated from the drugs trade…there were signs that some banks were rescued that way.”

“No big U.S. bank has ever been indicted for violating the Bank Secrecy Act or any other federal law. Instead, the Justice Department settles criminal charges by using deferred-prosecution agreements, in which a bank pays a fine and promises not to break the law again,” reported Bloomberg’s Michael Smith in his damning feature article, “Wachovia’s Drug Habit.”

The bankers’ “allegiance was to smugglers, what they thought about during work was, ‘How may I please my highest-spending customers the most?’” stated Arizona Assistant Attorney General Cameron Holmes.

What is preventing the White House from seizing $383 billion from Wachovia?

Why can’t the powers that be stem once and for all the free flow of drug money to drug cartels, thus paralyzing gun, drug and human trafficking?