Part III

A gulf exists between the stated and intended aims of the drug war’s legislative matrix. This disparity was illustrated in the initial sections of the essay We will now move to examine whether the war’s efforts have been directed towards the international drug trade with the same draconian zeal reserved for petty usage.

A cursory evaluation of the issue paints a dispiriting picture, one which reveals the absolute failure of drug policy to bear meaningful relation to its stated aims; the international drug trade is a huge, stable and unhindered market. The UNODC estimates that up to 8% of all international trade is accounted for by the drug market, which is worth $400 billion. Cocaine trafficking is worth $80 billion per annum. The drug trade operating within the US is the single biggest beneficiary of the cocaine market, receiving a higher quantity of the drug than the entire sum of European and North American countries, no mean feat. Supply is utterly unencumbered by the drug war.

In order to explain the rude health of the drug trade, we may turn in part to the lack of regulatory framework in the international business and financial sectors which act as vital organs to the business. In a 1989 hearing before the ‘Select Committee on Narcotics Abuse and Control’, several DEA representatives reported of having been aware, for a number of years, that the majority of vital precursor materials used for Cocaine production in Latin America had been purchased from the US. It was estimated that 90% of the precursor methyl ethyl ketone (MEK) used in Latin American cocaine production was sourced directly from US suppliers. Douglad Jehl, reporting in the LA times in 1989, wrote of MEK;

It is an ordinary solvent, best-suited for producing rubber cement. Colombian customers bought up thousands of tons of the chemical last year–about 12% of U.S. exports. The trouble is that Colombia doesn’t make any rubber cement. Nor does it make nearly enough smokeless powder, varnish or other products to account for the mounting deliveries of MEK and other solvents to its shore

Unfazed by the far reaching implications, the Government failed to relent in its aggressive efforts against the powerless consumers of drugs. While there may not be evidence to suggest complicity on the parts of companies who sold precursor materials to drug manufacturers in bulk, it should come as no surprise that demand is met where it exists; market logic conceives of ethical and legal concerns as external to the ultimate goal of shareholder return. Consequently, blind eyes abound in the business community and a situation of systemic favour arises among those who seek to gain from illicit activity, where regulation is lax. Among the many devastating externalities of the cocaine trade in Latin America are de facto rule of cartels, widespread political corruption, murder, poverty, and flagrant degradation of the environment; the UNODC reports that

[D]estruction of Amazonian forests for coca cultivation contributes to the loss of rare plant species from which future pharmaceutical drugs and other human benefits may be developed. One in six prescription drugs has a tropical plant source as its active chemical…The intensification of coca cultivation in the Huallaga flood plain and adjacent low hills, as well as vigorous expansion into highland forest environments, is responsible for the annihilation of nearly one million hectares of tropical forest resources.

In addition to this, the trade has been responsible for a bloody Mexican drug war that has laid waste to over 150,000 lives since 2006. The cartels that enjoy political primacy in Mexico are greatly bolstered by the liberalisation of international finance, and poorly enforced anti-money laundering (AML) procedures in banks, which allows for wide scale laundering of drug money. A government waging an aggressive war against the drug trade would obviously target their efforts at the agents and bodies of money laundering, although this can be seen to be far from the case; Dylan Murphy, writing for Global Research, notes that

HSBC, Western Union, Bank of America, JP Morgan Chase&Co, Citigroup, Wachovia amongst many others have allegedly failed to comply with American anti-money laundering (AML) laws

On those occasions whereby substantial money laundering by a large bank has been established, the treatment of those responsible has been especially lenient. In 2010, Wachovia was found after a lengthy DEA investigation to have laundered up to $378.4 billion of Mexican cartel money over a period of several years. The inception of this fruitful relationship was quickly followed by the first eruption of violence in Mexico’s drug war. Criminal proceedings were brought to Wachovia as a bank, but not to any individual. However, the proceedings against Wachovia were little more than a formality; the case was not brought to court, and a comparatively tiny fine of $160 million was levied against the bank as part of a deferred prosecution agreement. Such behaviour is not endemic to American banks; in 2012 the US Senate Committee on Homeland Security and Governmental Affairs issued a long report detailing allegations of laundering by the British bank HSBC. Among the many accusations was that Mexico’s Sinaloa cartel and Colombia’s Norte del Valle cartel had between them laundered up to $881 million through HSBC and its affiliates HBUS (in America) and HMEX (in Mexico). The report details the systemic inadequacies of liberated capital in international banking:

From 2007 through 2008, HBMX was the single largest exporter of U.S. dollars to HBUS, shipping $7 billion in cash to HBUS over two years, outstripping larger Mexican banks and other HSBC affiliates. Mexican and U.S. authorities expressed repeated concern that HBMX’s bulk cash shipments could reach that volume only if they included illegal drug proceeds. The concern was that drug traffickers unable to deposit large amounts of cash in U.S. banks due to AML controls were transporting U.S. dollars to Mexico, arranging for bulk deposits there, and then using Mexican financial institutions to insert the cash back into the U.S. financial system. … high profile clients involved in drug trafficking; millions of dollars in suspicious bulk travelers cheque transactions; inadequate staffing and resources; and a huge backlog of accounts marked for closure due to suspicious activity, but whose closures were delayed

In December of 2012, a record fine of $1.9 billion was imposed on HSBC by the Department of Justice, a sum which did not even constitute a tenth of the profits the Bank had made the previous year. Again, no criminal prosecutions were brought to any individual, and sanctions remained solely financial. The failure of courts to punish with any potency those huge institutions which constitute a most significant facet of the drug trade betrays an punitive antipathy reserved primarily for the powerless and impoverished.

Any industry that accounts for nearly a tenth of Global GDP will by its significance act as a structural column for the prevailing economic order; accordingly, it has been suggested that the drug trade acted as the proverbial adrenaline shot to the heart of the financial industrial following the great recession of 2008. The former director of the UNODC, Antonio Maria Costa speaking to The Observer in 2009, is quoted as saying that certain banks on the precipice of collapse during the period could only rely upon the liquid investment capital of illicit trade, and that consequently “inter-bank loans were funded by money that originated from the drugs trade and other illegal activities…a majority of the $352bn drugs profits was absorbed into the economic system as a result”.

If such claims are of any truth, they suggest that criminal prosecution against money laundering banks could destabilise the entire international banking system. If so, the deeply entrenched vested interests in a healthy drug trade will attempt to preserve its good health at all cost. So too will the deeply entrenched interests in a drug war which imprisons and enslaves poor black people en masse, subsidising untold businesses along the way. These interests will reign supreme until public awareness of the issue is sufficient enough to properly affect policy and establish effective regulation. Alas, such a day may be some way off; media classes remain obsequious to state power, and continue to obfuscate the issue, focussing their efforts disproportionately toward the demonisation of drug users and dealers, ignoring the structural constituents of the trade.

Gary Webb, the investigative journalist who broke the story of the murky links between US foreign policy and the introduction of crack cocaine in the 1980’s was marginalised by his trade, defamed and ridiculed by the liberal press. He was eventually driven to suicide as the result of a long depression, caused by his inability to attain employment at any paper, deemed toxic by those whose role should be to hold institutions of power to account.

Drug trade and policy is a complex of monolithic interdependence, one which eviscerates human life and dignity and bespoils the Earth with unrelenting zeal with each of its many outstretched limbs. Matt Taibbi, writing in Rolling Stone encapsulates the frustrating predicament of the situation; “An arrestable class and an unarrestable class. We always suspected it, now it’s admitted. So what do we do?”. ma i


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s