Sunday, April 3, 2011

Corporate crime pays

If you had any doubts about that, read Ed Vulliamy's report in today's Observer: "How a big US bank laundered billions from Mexico's murderous drug gangs". Here's a few paragraphs from this long report:
More shocking, and more important, the bank was sanctioned for failing to apply the proper anti-laundering strictures to the transfer of $378.4bn – a sum equivalent to one-third of Mexico's gross national product – into dollar accounts from so-called casas de cambio (CDCs) in Mexico, currency exchange houses with which the bank did business.
"Wachovia's blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations," said Jeffrey Sloman, the federal prosecutor. Yet the total fine was less than 2% of the bank's $12.3bn profit for 2009. On 24 March 2010, Wells Fargo stock traded at $30.86 – up 1% on the week of the court settlement.
The conclusion to the case was only the tip of an iceberg, demonstrating the role of the "legal" banking sector in swilling hundreds of billions of dollars – the blood money from the murderous drug trade in Mexico and other places in the world – around their global operations, now bailed out by the taxpayer.
Naturally, no Wachovia executives went to prison for these trifles.

With financial services provided by guess who

   Economics students will be relieved to know that authors of the mainstream money and banking texts, embarrassed at having neglected to discuss the grim facts of rampant money laundering, corporate crime and sleazy off-short 'tax havens' in their texts to date, are planning whole chapters on the subject in new editions. 

   Just kidding.


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