by Karl Denninger
“From The Guardian: ‘On 10 April 2006, a DC-9 jet landed in the port city of Ciudad del Carmen, on the Gulf of Mexico, as the sun was setting. Mexican soldiers, waiting to intercept it, found 128 cases packed with 5.7 tons of cocaine, valued at $100m. But something else – more important and far-reaching – was discovered in the paper trail behind the purchase of the plane by the Sinaloa narco-trafficking cartel.
During a 22-month investigation by agents from the US Drug Enforcement Administration, the Internal Revenue Service and others, it emerged that the cocaine smugglers had bought the plane with money they had laundered through one of the biggest banks in the United States: Wachovia, now part of the giant Wells Fargo.’
I've gotten at least a dozen emails over the last couple of days frantically asking me to cover this story. Naked Capitalism said: ‘If this news story does not prove that banks are effectively above the law, I don’t know what does. The Guardian, in an account yet to be picked up anywhere in the US media (per Google News as of this posting, hat tip readers May S and Swedish Lex) reports that Wachovia was at the heart of one of the world’s biggest money laundering operations, moving $378.4 billion into dollar-based accounts from Mexican casas de cambio, which are currency exchange firms. While these transfers took place over a period of years, the article notes that it equals 1/3 of Mexican GDP. And the resolution?’
Oh really? Not picked up anywhere in the United States eh? Shall we set the wayback machine? ‘Gee, it's not enough to steal from ordinary Americans, it's not enough to rip off state and city governments, it's not enough to rig bids in the municipal bond markets, we must sit still while these institutions literally make possible funding criminal gangs that are committing murder. There's a name for this folks.’
The Market Ticker did cover this story in detail - nearly a year ago. The real question is why this wasn't picked up by everyone last year, why it wasn't run into the ground, and why only now, when the deferred prosecution agreement expired, are people talking about it. That's right - now the media will cover it, including The Guardian! Mish covered this story in July, incidentally, so it wasn't like The Market Ticker was the only site that was talking about it.
I have one question for everyone, and it's a really important question that bears on exactly how we have gotten to be where we are - that is, where "certain special people and institutions" can do damn near anything they want - law or no law: How'd we get beyond the deferred prosecution boundary before all these supposed journalists "discovered" this story, when in fact not only did I report on it nearly a year ago but so did a few others. Now we have people profess, for the first time, to see that this is "proof that banks are effectively above the law."
Wouldn't the below have been an interesting question for Yves to ask Timmy Geithner during her audience at Treasury in August of 2010 - with many other bloggers present? "How do you defend not attempting to convict Wachovia or any of the bank officers for alleged money laundering on behalf of Mexican drug cartels in the amount of nearly $400 billion - money that we know was used, directly and indirectly, to slaughter both Mexican citizens and Americans? In what form or fashion is it in the public interest to not only allow a tiny fine of less than one tenth of one percent of the loot so-transferred to be paid but to refuse to criminally try the institution and every officer and employee involved in this offense?"
Now that would have been worth being a fly on the wall for. Of course you wouldn't exactly make the Christmas list if you asked such a question, and you might not have been invited at all had you ran the story and asked this question before hand... right?
PS: I'd still like to see that question asked. Hell will freeze first.”