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4 Under
the mask of the war on drugs By
Lars Schall
But then again, it would not
have been possible without the imperial hand of
particular the United States and the intelligence
agencies. There we have that imperial commodity
and imperial connection as well. They didn't work
alone, in all these criminal elements, of course,
there was an imperial hand in much of all of this,
but why it happened, I think, is the matter of
debate.
LS: Catherine Austin
Fitts, a former investment banker from Wall
Street, shared this observation once with me:
Essentially, I would say the
governments run the drug trade, but they're not
the ultimate power, they're just one part, if
you will, of managing the operations. Nobody can
run a drug business, unless
the banks will do their
transactions and handle their money. If you want
to understand who controls the drug trade in a
place, you need to ask yourself who is it that
has to accept to manage the transactions and to
manage the capital, and that will lead you to
the answer who's in control. [2]
What are your
thoughts on this essential equation?
OV: Going back to my
emphasis on the state, coming from a political
science background, this is what some
criminologists would say, that this is
state-organized crime, and the emphasis is the
state. And again if we go back to the global
history of the drug trade, this isn't something
new. If we look at piracy, for example, that was
another form of state-organized crime sanctioned
by the state because it served very similar
means as the drug capital of today serves as
well.
So yes, the state is very much
involved in managing it but it cannot do it
alone. You have the US Drug Enforcement
Administration, for example, which is officially
the law enforcement department of the US state
in charge of combating the drugs; and you also
have other intelligence agencies like the CIA
[Central Intelligence Agency] that are involved
in fighting drugs, but also, as I have seen in
my studies, actually allowing much of the drug
and financial operations to continue.
We
saw recently similar things unfolding in Mexico
with the operation "Fast and Furious", where CIA
arms were making their way to drug cartels in
Mexico. We can draw our own conclusions, but
what we do know is that the state is central to
understanding these operations, involving
governments, their agencies, and banks
fulfilling a role.
LS: How
does the money laundering work and where does
the money primarily go to?
OV: We know that the
estimated value of the global drug trade - and
this is also debated by analysts - is worth
something between US$300 billion to $500 billion
a year. Half of that, something between
$250-$300 billion and over actually goes to the
United States. So what does this say if you use
that imperial political economy approach I've
talked about? It means that the imperial center,
the financial center, is getting the most, and
so it is in no interest for any great power (or
state) to stop this if great amounts of the
profits are flowing to the imperial center.
What I find very interesting and very
valuable are the contemporary events that are
unfolding right now, the reports that even come
out in the mainstream media about Citigroup and
other very well-known money laundering banks
being caught out laundering drug money for drug
traffickers across South America and in Mexico
as well, as the so-called war on drugs is
unfolding.
The global financial crisis
is another example, because the United Nations
Office on Drugs and Crime came out and said it
was thanks to the global drug trade that the
financial system was kept afloat, where all this
money was being pumped in from were from key
imperial financial centers like New York, like
London and Switzerland, and so on. In this case,
money laundering is simply beyond again that
criminology framework; it does involve that
imperial state perspective, and I think that's
the way it remains because of these benefits.
LS: Do you think that "lax
policies" are responsible for the fact that
large multi-national banks are laundering drug
profits? [3]
OV: If you
think again about the criminalized status of
drugs, it's criminalized in society, but when it
comes to the economic and financial sector,
which should be criminalized, it is actually
decriminalized. So we have some kind of
contradiction and paradox where it would be
great if it would be criminalized, but when it
comes to the financial sector, it is actually
fine - it's lax, it's unregulated, and we know
that the US Federal Reserve, for example, can
monitor any deposit over $10,000, so it's not
that they don't know - they know what's going
on.
It rolls back to your previous
question. It continues to benefit the imperial
global architecture, particular in the West, and
so it becomes a lax policy approach towards
these money laundering banks because they
wouldn't have it any other way, there is much
resistance to it.
Since Barack Obama
came to power in 2008 and the financial crisis
took hold thereafter, we've heard a lot of
promises from Western leaders that they would
get tough and so on, yet today we see that
nothing much has changed. We've had now this
episode with Barclays in the UK and the price
fixing [of the important London Interbank
Offered Rate] - this goes on.
Of course,
they prefer to have this contradiction and
paradox in place, because this is in fact what
is allowing the drug profits to come in. If the
government would take this problem seriously and
would actually do something about these
money-laundering banks, we would see a real
effort to fight the drug problem, but that is
not going to happen any time soon.
The
last time we ever heard there was a serious
effort to do this was in the 1980s and only
because of much pressure, where George Bush Sr
was forced to act in what was known as
"Operation Greenback".
What happened was
that they started to find an increasing number
of drug money-laundering receipts in Florida and
other southern parts of the United States. This
started to work, they put pressure on the
financial companies which were actually involved
in that process - and then he suspended it all,
the whole investigation. That would have been an
opportunity to actually do something, but of
course it was suspended, and ever since we
haven't seen any serious effort, despite the
rhetoric, to actually do something.
LS: Why is it that the
[George W] Bush and Obama Departments of Justice
have spent trillions of dollars on a war on
terrorism and a war on drugs, while letting US
banks launder money for the same people that the
nation is supposedly at war with"? [4]
OV: That is another issue
that is part of the contradiction of
imperialism, or the process that I call
"narco-colonialism". The stated objectives are
very different to the real objectives. They may
claim that they are fighting a war on drugs or
on terror, but in fact they are fighting a war
for the drug financial revenue through terror,
and by doing that they have to make alliances
with the very same people who are benefiting
from the drug trade as we see in Colombia.
The main landlords and the business
class who own the best land have connections
with right-wing paramilitaries, which the DEA
knows are actually exporting the drugs, and have
direct connections to various governments and
presidencies throughout recent Colombian
history. These are the same people who are
actually being given carte blanche to fight the
war on terror in the Western hemisphere - yet
this is a contradiction that no one ever
questions.
So I think it's not about
fighting the real terrorists, it's about
fighting and financing resistance to that
problem, and in Colombia there has been a civil
war for quite a number of years. It's really the
same paradox; it's funding the very same state
mechanisms to allow the whole thing to continue.
LS: What should our
readers know about the political economy of the
drug trade created by the war on drugs?
OV: What we should know is
that there needs to be a complete restructure
and revision in the way we examine the drug
trade. First of all, it's not crime that is at
the center of the political economy, but it is
the state, imperialism and class - that I think
is essential, or at least I find it very useful
in examining the drug trade.
We can see
that clear in Colombia, where you have a
narco-bourgeoisie which is essentially the main
beneficiary there. These aren't just the
landlords, these are also the paramilitaries,
key members of the police, the military and the
government; but also the connection to the
United States, which is a political
relationship, which is financing them to fight
their common enemy, which is at this point in
time the left-wing guerrillas, predominantly the
Revolutionary Armed Forces of Colombia, the
FARC.
So this again goes back to your
previous question about this contradiction: why
are trillions of dollars being waged to fight
the drug trade in Colombia, but also in
Afghanistan, when like in Colombia, everybody
knows Afghanistan has a very corrupt regime and
many of them are drug lords themselves who are
the main beneficiaries in that country?
It has little to do with drugs, it has
little to do with terrorists, it has everything
to do with empire building, of which the main
beneficiary is the United States.
LS: Since you already
mentioned it, what is the major importance of
the narco-bourgeoisie in Colombia seen from a
market perspective?
OV:
This goes again back to the notion of who is
managing the drug trade, and Catherine Austin
Fitts' perspective includes the government, and
I sympathize with that approach, but we must
bring class to that political economy of drugs.
Why is class important? Why is a
narco-bourgeoisie important? Well, it's because
without a class that not only is growing,
producing, and distributing the drugs and has
the state resources to do so thanks to US
financial assistance and military training and
operations, we would not have a cocaine trade.
So the narco-bourgeoisie is essential
and the main connection to that imperial
relationship that the United States has. Without
that kind of arrangement there would be no
market in Colombia. So from a market
perspective, these are the people who are
essentially arranging and managing the drug
trade in order to let the cocaine trade actually
flourish. In the past, the same kind of people
were fighting communists; today they are
fighting "terrorists" supposedly.
LS: You are arguing in
your book that the war on drugs is no failure at
all, but a success. How do you come to that
conclusion? OV: I come to
that conclusion because what do we know so far
about the war on drugs? Well, the US has spent
about US$1 trillion throughout the globe. Can we
simply say it has failed? Has it failed the drug
money-laundering banks? No. Has it failed the
key Western financial centers? No. Has it failed
the narco-bourgeoisie in Colombia - or in
Afghanistan, where we can see similar patterns
emerging? No. Is it a success in maintaining
that political economy? Absolutely.
So I
have to say when we are looking at it from that
political economy / class basis approach with
this emphasis on imperialism and the state
rather than simply crime, it has been a success
because what it is actually doing is allowing
that political economy to thrive.
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