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Money Laundering and the moral world of bankers

In the four years between 2004 and 2007, one of America’s largest banks, Wachovia, now owned by Wells Fargo, accepted $378.4 billion without paying attention to whether it was drug or otherwise ‘dirty’ money.  According to Fincen (The US Treasury’s Financial Crimes Enforcement Network) $20 billion of that has been identified as definitely laundered drug money and they have only just started. So it turns out Wachovia has laundered billions of dollars of Mexican Drug money.

Just to give you an idea of the scale of Wachovia’s criminality, $387 billion is 4147 tons of $100 bills – in four years ( I know it wasn’t all cash. This is just to put the scale in concrete terms).  Wachovia executives say they didn’t spot it. I can see that. A few thousand tons of 100 dollar bills is the sort of thing that probably can slip behind a filing cabinet. 
Of course one of their own anti-money laundering experts, Englishman Martin Woods , an ex Scotland Yard man working in Wachovia’s London office, did warn them.  But they didn’t listen. In fact, as the Observer newspaper reports,
Woods was told by Wachovia’s head of compliance that his latest SAR [Suspicious Activity Report] need not have been filed, that he had no legal requirement to investigate an overseas case and no right of access to documents held overseas from Britain, even if they were held by Wachovia.
Which is how Wachovia became the open mouth for dirty money to enter the banking system. And getting dirty money IN to the system is the first and hardest part of money laundering. Wachovia obliged 378 billion times in four years.
The US 1970 Bank Secrecy Act, which is America’s main anti money laundering law, stipulates that there is a duty upon banks to ‘know your customer’ as the first line of defence against money laundering. As far back as 2004 Wachovia had admitted to investigators that it had been quite well aware of the potential for money laundering in its Mexican business.  That business involved a close relationship with Mexican Currency exchange businesses, Casas de cambio,  – The CASH business of choice for any money launderer wanting to change and bank cash.  As one of the Mexican prosecutors quoted by The Observer said,

 “Wachovia handled all the transfers. They never reported any as suspicious.”

Sadly, despite over 6000 subpoenas served upon Wachovia regarding its Mexican cash transactions, Wachovia did nothing and largely ignored the subpoenas.
The Bank Secrecy act also requires ANY transaction involving  more than $10,000 must be reported to regulators. Now, $378 billion is over 37 million lots of 10,000.  (Again, I know it wasn’t all cash) Which means Wachovia executives DIDN’T report anything suspicious to the regulators about 37 million times.  Was it on their ‘to do’ list? 
Federal investigators spent 22 months compiling their case. In the end, however, no one at all at Wachovia was prosecuted. The ‘Justice’ Department settled the criminal case against Wachovia, in which the Bank admitted at the charges against it, using what is called a “Deferred Prosecution Agreement”. In Deferred Prosecution Agreements the banks pays a fine, promises not to break the law again and not only get to walk away, but after a year the actual criminal prosecution is removed from their record as if it never happened. This is so the  Bank’s reputation and its ability to do business in future, are not impaired. 
So Wachovia paid a fine of $160 million which was less than 2% of its profits for just the year 2009 and walked away. A year later it was scot free. Wachovia refused to say how much profit it had made from all the money laundering. And the day after the court settlement last month, its shares traded up 1%. 
The thing to remember is that much money for that long means this money laundering was a large and sustained part of Wachovia’s income and operation. This was not just ‘a few bad apples’. And it will not have stopped. There are still drugs being sold in the US and therefore there is still the need for the proceeds to be laundered. Which means that flow of several hundred billion dollars will have been accepted in to other banks. Those other banks will know about Wachovia’s operation. They will know who among their clients is likely to be passing drug money. They will, today, willingly launder that money.
Turns out HSBC, Santander and BBVA (Spain’s two largest banks) also dealt with Mexico’s Casas and had dirty money slip through their defences. I think HSBC may have closed their operation. Santander and BBVA are still major players. They both also have US subsidiaries. And both banks need cash like a bleeding man needs blood.

The truth about money laundering is while it only makes the papers now and again, it is a large part of normal everyday banking. It is business as normal for banks. Nearly all the large banks do it. American Express Bank International was caught laundering Mexican drug money twice in the recent past. In 1994 they were found guilty and fined. The bank ‘promised’ not to do it again and with that feather light touch, were allowed to carry on as normal. But sadly the bank did do it again. From 1998 till 2004 the bank was busy making profits from laundering – again. Once again the bankers promised – double promised, crossed their hearts – again the bank walked away and a year later the entire thing was wiped off their record so they could be sold as an upright AAA rated concern to Standard Chartered, for $823 million.

Another huge American bank Citi went one better than its rivals and simply bought a bank that laundered money – Banamex. Of course Citi had already been indicted itself for laundering. But it makes sense to get local experts as well, I suppose.  The sordid Citi story is well known.

I find it odd that people, I can only really speak of Britain but I cannot believe the same is not generally true, have and accept the concept of ‘institutionally racist’, for example. We accept that one can talk about a culture within an organization. It is not to say that every person in that organization shares the ‘culture’ equally, but that there are a set of norms and practices which are prevalent and have the support of the hierarchy of the organization.  In Britain, government and the law have taken action against what was deemed to be a poisonous culture of racism within an organization – in this case a major Police force in the UK. Yet despite overwhelming evidence that there is a culture of criminality within not just a bank, but within banking as a general enterprise, no one is willing to suggest banks, banking and bankers as a group of people are institutionally corrupt.  Why?

Banking corruption is a global reality. It is a potent force undermining all the laws which we pass. We have laws against drug use and drug pushing. Yet the banks on our high streets enable the trade every day of every week.  They are not yhe only ones of course but that is no defence. Up and down every country, banks accept money which they already know, or could easily find out if they cared to, was drug money. But they chose not to.  Every bank knows there is soft ware which can easily track patterns of deposits and flag up those which are unreasonably cash heavy.  The software exists and the law would allow the banks to use it. They don’t.
Global banker criminality not only undermines our civil society but also operates against our democratically decided foreign policies as well.  The banks ignore international law as freely as they do national ones.

Mexico is one place this happens but lest you think Mexico is the only banker’s narco-playground, let’s look at Burma. In Burma it’s gas and heroin. And would you believe it, there are banks around Burma like flies on shit.  The main players in Burma are France, the UK, America and Singapore. The big banks are PNB Paribas and JP Morgan.

The giant french Bank PNB Paribas is the bank for the Burmese junta’s Yadana gas pipeline project. Nothing wrong with helping a country develop it’s natural resources, you might say. The corporate partners in the gas pipeline are Total, Chevron, the Thai company PTTEP and the Burmese military Junta. However, in a devastating report and several follow up reports by the NGO Earthrights International, that got wide international praise and attention, Earthrights found that less than 1% of Burma’s income from the gas makes it into the state budget. 99% goes to bank accounts off-shore, often in the name of the members of the ruling military dictatorship.
BNP Paribas was, until 2008 (and may still be through subsidiaries or partnership, they won’t say) what is called the Paying Agent for the project and also its main Depositary bank. The paying agent collects the revenues and pays them in to accounts in the Depository bank. The Paying Agent for the Yadana project was a PNB Paribas Jersey Trust in the Channel Islands. The Depository bank was PNB Paribas’ Singapore branch.  The bank collected the cash, divided up and made sure it went to its customer’s accounts. Sadly the Burmese people did not have an account and were not one of the bank’s clients.
But, as the study found, PNB Parisbas’ services did not end there.  

According to our research, the BNP Paribas branch in Singapore was, and may still be, not only the depository bank of the project but also the primary bank of the Burmese regime itself. The Burmese peoples’ gas revenue was transferred from BNP Jersey accounts in the BNP Singapore branch to other accounts at the same bank, accounts held by the military regime. 

What’s more, BNP Jersey acted as trustee for the military regime, holding at least one account for the regime in BNP Jersey’s own name. That means the Burmese military dictatorship relied on an account in the largest French bank to move its funds – funds which should be benefiting the people of Burma.

Burmese money, in a French Bank, via one of the UK’s Channel Island off-shore, tax havens deposited in Singapore. From BNP in Singapore the money then appears to move to two other big Singapore banks Overseas Chinese Banking Corporation and the DBS Group.  My question is why it was left to a small NGO to bring this to light?

But that’s just Burma’s gas. Burma is also one of the world’s largest producers of heroin.  Which, of course, the Junta and some of its special friends control and profit from. The question, of course, is where does all the money go? And the answer is Singapore. How it gets there, where it goes next and with whose help, leads us to the behemoth of American banking, JP Morgan.

This story was run by Australian television and The Nation magazine in the US.  Despite denials from JP Morgan the story is true. The proof is that JP Morgan was not able to stop The Nation publishing the story nor sue it once it did. It couldn’t because it is true. This is an old story from 1988. I tell you  it because, as with Mexico, the drug trade has not gone away and therefore neither have the banks laundering the profits. The bank involved may have changed, though there is no reason to suppose a bank would willingly stop a profitable business arrangement.

The short version of the story goes like this: Singapore is a global banking centre. It is right next to Burma. The Burma junta and powerful drug traffickers have Heroin money. They need a bank to put it in, Singapore has banks, which thoroughly enjoy the flow of cash and doing business with the drug traffickers who have all that money.

The Burmese junta also had a ‘Sovereign Wealth Fund’ called the Myanmar Fund.  According to the Nation article,

Singapore’s largest government-controlled financial institution – the Government of Singapore Investment Corporation (GIC) – is listed in the documents along with Morgan Guaranty Trust Bank (a J.P. Morgan subsidiary separate from the Trust Company) as a core shareholder in the Myanmar Fund.

JP Morgan back when the article was written owned 42% of the Myanmar fund. That is 42% of a fund run by a vicious military dictatorship which deals in Heroin on a global scale.  In the War on Drugs whose side, exactly, are JP Morgan on?

The Myanmar fund was registered in – guess where – Jersey, Channel Islands.  The trusts registration was done in – Ireland.  Jersey and Ireland mean secrecy and tax avoidance. The Singapore government fund GIC is itself secret. It publishes no accounts and has no public oversight despite using public funds. But that is the definition of Singapore. Just weeks after the GIC’s shares in the Myanmar Trust were listed on the Irish exchange in late 1994, they disappeared. The Nation discovered they had been re-registered under a company called Ince & Co which, it turns out was set up by JP Morgan to hold the shares. Since then the shares moved again to a company called Hare & Co. A little bit of digging shows Hare & Co have the same address as Bank of New York.  Which is part of Bank of New York Mellon.

Hare and Co. appears to be a company set up to hold titles and may or may not receive payments for a great many companies and deals.  Mellon is a huge player in the Paying Agent market. It is especially big in Ireland. Whether Mellon is doing this for itself, for JP Morgan or another, I don’t and can’t know.  Banking secrecy rules!

The Myanmar Fund, after the bad publicity was placed into Liquidation in 1997. The Singapore government says no other fund has been set up to replace it. So what has happened to all the money and assets in it and what is happening today to the flow of profits and money from Heroin? All that has to have gone somewhere.

There are funds from Myanmar around today. I found one yesterday. Myanmar funds© is the trading name of Myanmar Star Corporation Limited.  It is listed at 71a Knightsbridge. When I called them a worried, Russian sounding woman recognized the company name but said they were no longer there. When I asked if she had ever worked for them and told her I was a journalist, she said she would have to talk to her husband and could I call back in two hours. I’ll let you know how that goes.

Myanmar Star Corporation Limited says it is c/o Brunswick Capital LLP which describes its business as,

The Origination and operation of Close-end Offshore Enterprise/Country Capital Funds.

And the best bit, for me, is their advertising strap line – “The Oligarch’s Choice”. Says it all! But it is also rather eerily accurate. Banks are the oligarchs choice and banks like it that way. Banks love dictators, embezzlers, thieves, drug traffickers and monsters of every kind so long as they have money to bank.  Banking is a world without moral compass ruled by moral cripples.

Just look at the more recent services which European banks have joyously performed for the juntas, dictators and despots of the world.

September 2010 Barclay’s was found guilty of having, for over a decade, done a roaring trade as banker to torturers, embezzlers, dictators and narco-states, systematically disguising and laundering money it was moving for the governments of Gaddafi’s Libya, The military Junta in Burma (Myanmar), Castro’s Cuba, the Mullah’s of Iran and Bashir of Sudan despite it being against US law to do so. No one went to prison. The bank paid a $298 million fine and walked away.

ABN Amro , now owned by RBS, also profited from moving money for Sudan, Iran and Libya. It too paid a fine – $350 million. Credit Suisse was doing the same and also walked away with a fine – $536 million.
If people rob a bank a fine is not an option. They go to gaol. If a bank robs an entire nation, however, by helping drug criminals or abetting dictators and military juntas to steal form their people, a small fine and a promise to behave better in future is considered quite sufficient.  In what way does that make us all equal before the law?  What reason should you and I have for NOT believing the law to be a whore?
To those in the banks who are making the decisions and reaping the bonuses, are the fines they pay, anything more than a simple and, in the grand scale of the profits and bonuses being made, rather trifling business tax on the bank’s ongoing practices?  No one in the banks upper ranks risks any personal punishment, while the authorities seem content simply to take a small share of the profits. 
The fact of the matter is that dictators and military juntas will pay top dollar to a willing bank.  And dollars they have in abundance. The narcotics business is the largest cash business in the world. No one buys their heroin or coke with a debit card. It’s cash, which trickles and flows until someone has so much of it they just have to get it in to a bank.  And if there is one thing all banks love, especially since this banking debacle began, it’s cash.  And all the banks need, in order to get their share, is to have in their employ bankers of a certain moral degeneracy and politicians ready to protect them. 
And that is the world we live in. Even those, like Bloomberg, who cheerlead for the world of finance, admit,

No big U.S. bank — Wells Fargo included — has ever been indicted for violating the Bank Secrecy Act or any other federal law. 

Large banks are protected from indictments by a variant of the too-big-to-fail theory.

According to Mr Jack Blum, who was for 14 years a U.S. Senate investigator and is now a consultant to international banks and brokerage firms on money laundering, the logic is:

Indicting a big bank could trigger a mad dash by investors to dump shares and cause panic in financial markets. There’s no capacity to regulate or punish them because they’re too big to be threatened with failure,” Blum says. “They seem to be willing to do anything that improves their bottom line, until they’re caught.” 

The people at the top of banking are moral cripples and parasites. If we let them, they are intent on remaking our world in their image.

39 Responses to Money Laundering and the moral world of bankers

  1. Ken April 6, 2011 at 9:58 am #

    Well done. Thorough research job. I used to follow this guy a few years ago:
    but haven't kept up lately. His main assertion was that if you were a bank listed on the New York Stock Exchange then the 10,000 rule did not apply (I don't know the absolute truth on this). Thus, US policy, Wall St policy, CIA-sponsored drug running (Ollie North was just the tip of the iceberg) are one and the same thing. Now, what I always suspected was that the so-called bond holders that could not be burned by Irish banks might not just be septuagenarian German savers but a heavier brigade altogether. Not beyond the bounds of possibility reading this.

  2. Whistleblower IRL April 6, 2011 at 11:18 am #


    I may have missed it in the above, but you forgot one vital element that facilitates all of this two-faced banking world – THE 'REGULATORS'.

    For those who would like to read more about it, do check out Golem's recent post:

    Who do the 'regulators' work for?

    UniCredit Ireland's EX Risk-Manager, which makes me a person with close experience of the above…

  3. StevieFinn April 6, 2011 at 11:25 am #

    Amazing stuff, It's some racket, Maya Lansky could only have dreamed of such bounty. Like the mafia's operation, I am assuming that there must be people in high places who are on the take, surely if there wasn't something would have been done about it, or maybe it's the "Too Big" to mess with aspect again, or both.

    Through this blog,I feel like I am investigating the depth of a septic tank with my bare arm, it just gets deeper, I am fast coming to the conclusion that it might be bottomless.

    I suppose there's not much money to be made out of racism.

    Golem, I thought that investigative journalism was more or less dead.

  4. richard in norway April 6, 2011 at 11:25 am #


    did you look at the flattr concept?

    i think it's a good way of supporting bloggers, who seem to be the only investigative journalist's we have, nearly every thing i see in the mainstream, i have seen first on a blogg

  5. Golem XIV - Thoughts April 6, 2011 at 11:35 am #


    Yes I did look and like you thought it looked OK. I'll give it a try.


    The real nasty slime is, as you say, a bit deeper still. I could have gone on to some really sordid stuff. the problem with it is that people start to think you're making it up.

    Suffice it to say, everybody, every kind of organization needs a bank. Take a look at the link to the Citi story and see who was/is on the board of Citi. Every country has at least one bank that serves that purpose. There was/is one is Ireland right now.

  6. Prometheuswrites April 6, 2011 at 11:41 am #

    Well done for 'following the money'.

    The only solution I can conceive of is for a morally scrupulous government being willing to tackle the problem; however given the moral bankruptcy of the UK government (including their junior partners), in the honouring of their election pledges there's not much chance of that happening here in the UK.

  7. Trying to make April 6, 2011 at 12:14 pm #

    I don’t have the link at hand but in relation to the 2007 ‘credit crunch’ wasn’t there a story about how the banks had to rely on Drug cartel money/fund during that time for liquidity?

  8. guidoromero April 6, 2011 at 12:33 pm #

    All true. But, once again, it is necessary.

    It is necessary to the extent that we have been sold and have accepted this monetary system.

    As this particular monetary system is predicated on inflation and as inflation conform to the law of diminishing marginal utility, it follows that fraud must be (and is) enshrined in the monetary logic.

    Purely from the point of view of upholding this particular variety of monetary system, banks are really doing God's work.

    It should not be a surprise.

  9. guidoromero April 6, 2011 at 1:57 pm #

    My post may be somewhat vague.

    Essentially, money laundering as indeed, counterfeiting currency, are tools to inject inflation into the system by stealth.

    Counterfeiting particularly if carried out with the printing machines the USA had supplied the likes of the Shah of Iran with, is helpful in that it effectively increases the stock of money in circulation without appearing on the books of the state.

    Money laundering is helpful to the extent that it helps boost the velocity of circulation of the currency because laundered money must by definition be forced through several stages of buying and settling whatever phantom transactions in order to be "laundered".

    Presto. Inflation receives a boost.

  10. Pascal April 6, 2011 at 3:30 pm #


    are you going to be able to get any of this onto TV? I'd like to think production companies would be biting your hand off for some of this stuff (but then I am a naive fool that is constantly disappointed that everyone else isn't as pissed of as me)

  11. thrawn pop April 6, 2011 at 4:44 pm #

    Hey Golem
    how about an email address where we can discretely flag up typos. I don't necessarily want to be pedantic and do it here in the comments, but I feel the quality of your posts would benefit from the crowdsourcing. This would mean that if you're quoted subsequently they'll ne no annoying "sic"s.
    Just a thought.

  12. Golem XIV - Thoughts April 6, 2011 at 5:46 pm #

    thrawn pop,

    all corrections are gratefullly received. My email is in my profile.
    But just for you – golemxivg@gmail.com
    Thanks in advance.

  13. Pat Flannery April 6, 2011 at 5:48 pm #


    I agree with Pascal, you should get this on TV.

    As it happens I was in Tijuana yesterday and will be there again tomorrow. I live ten minutes from the border. The two economies of Mexico and the U.S. are so intertwined that those of us who live on the border hardly know where one starts and the other finishes. Unfortunately we are all too aware that "Mexican drug money" is a constant menace in our lives.

    I walked across the border yesterday because only the day before, two American men were "executed" in their car while waiting in the usual long line crossing into the U.S. The pedestrian line is always over an hour long but the images of Monday's shooting made it particularly long yesterday. I, however, had a dental appointment in Tijuana which has some of the best dentists in the world at a fraction of the U.S. cost and I was not about to reschedule it. Life goes on.

    Despite the constant killings I feel comfortable south of the border. The Mexican people are friendly and caring and remind me of Irish people, or at least the ordinary Irish. Greed is the contagion that threatens both.

    The San Diego/Tijuana border crossing is the busiest in the world. It is almost exclusively poor Mexican workers such as cleaning ladies, gardeners etc. who live in T.J. and have daily passes to act as servants to the San Diego middle class.

    As for "Casa de Cambio", yes you see their offices at the border, in fact the pedestrian line runs right by one just before the crossing. But I never see anybody going in or out of there. I doubt they would do $10,000 worth of business in a month. They may be just a front. People change their money at their own banks north or south of the border. Besides, the U.S. dollar is the de facto currency in border towns.

    One gets the feeling here living on the border that all the drug trafficking and money laundering takes place way above our heads. The ordinary people practically ignore the murders. It is a very private war between shady people in high places. Reminds one a little of the banking crisis, doesn't it?

    As for law enforcement, it is a joke. All the sniffer dogs and all the document checking is merely for show and to give employment to young American men who love a gun and a badge. I have no doubt that the real "merchandise" is waved through in big eighteen-wheeler trucks at the separate truck crossing.

    Any real investigations will have to be carried out by the Michael Moore's and the David Malone's of this world. Neither law enforcement nor the mainstream media have any interest in going up against the political elite.

    In my opinion the Mexicans are more interested in doing something about it than the Americans. I also think that the current Mexican President Felipe Calderón is a hero, unlike some of his predecessors.

    If somebody wants to do a documentary the place to start is with him, not in the United States.

  14. Golem XIV - Thoughts April 6, 2011 at 6:05 pm #


    Thank you. I would love to do a documentary about those few real leaders who try to make a difference. What makes them who they are?

    I once filmed people trying to cross the border exactly where you crossed. It is a few years ago now. Should you care to see it, it is the last 10 or so minutes of a film I made called Icon Earth. You can find it at –


  15. Pat Flannery April 6, 2011 at 6:33 pm #

    Golem, please re-check the link as it is not working for me. Pat

  16. Pat Flannery April 6, 2011 at 6:46 pm #

    Golem, it's OK, I found it by a search. Watching it now. Pat

  17. Golem XIV - Thoughts April 6, 2011 at 6:47 pm #

    Click here to go to Icon Earth.

  18. Pat Flannery April 6, 2011 at 9:53 pm #

    Wow! You made that film? Excellent! Imagine if England shared a border with Morocco and it ran right through Surrey, that is where I live, right on top of the San Andreas Fault of Globalization.

    You have a great talent for selecting and putting together pieces of information in a meaningful way. "Icon Earth" fully displays that talent.

    Watching it I started to wonder if, because like the Earth the financial system is indeed a system, instead of more regulation we simply need all the information available to the banks made available to everybody. In other words neither we nor the banks can be mere regulators or even observers, together we ARE the system. Isn't that what your film shows us regarding Earth?

    Just as we have discovered that the earth is not a thing, it is a system, of which we ALL are a vital part and in order to participate intelligently we all need vital information in real time, we now know that the financial system is not a thing apart from us, but that together we all comprise that system. Therefore we must all be fully aware and informed in order to intelligently participate. Otherwise we are all flying blind.

    Information is power. That is why vital financial information is being withheld from us.

    Watching Irish TV recently I get the strong impression that the Fine Gael people knew the reality of the financial situation and knew that they would be forced to do exactly the same as the disgraced Fianna Fail Party. They just wanted Office.

    The truth is that powerful bank people were in the Irish Prime Minister's office on that fateful night in September 2008 when the international money lenders told the frightened Irish Prime Minister and his Minister for Finance at 1:00 A.M. to pick up the phone and get the entire Irish Cabinet to agree to a blanket guarantee to the "Irish" banks who were in fact controlled by foreigners. Was the person in the Prime Minister's office that night a foreigner? He was certainly representing foreigners. Is that the dirty secret of this whole thing?

    The Irish media should investigate and determine who was in the Irish Prime Minister's office on that shameful night. Perhaps they already know but are not telling.

    We have recently learned from a disgruntled former Cabinet Member Willie O'Dea, that Prime Minister Brian Cowan called the members of his cabinet at 1:00 A.M. and told them that the bank guarantee could not wait until morning. That is terrorism. Its legality must be challenged by the media.

    Is the real threat to world order, not blunt terrorism like 9/11, but financial terrorism like what happened, and continues to happen, in Dublin?

    You Golem have amply demonstrated your ability to communicate. You are an important part in creating a new "people's global information network" to counter the monopoly of the "business global Information network" you describe in your film.

    I hope you can find the financial sponsorship to do what urgently needs to be done.

  19. StevieFinn April 6, 2011 at 11:43 pm #

    Michael Meacher seems to be heading in the right direction.


    Just for entertainment value, Tory boy 2 squirming as he is forced into admitting that the deficit is not the biggest in the universe.


  20. Greg April 7, 2011 at 12:58 am #

    I'm no fan of Gideon, but debt is not deficit

  21. Greg April 7, 2011 at 1:05 am #

    I'll also add that I love this blog golem, it's one of my standard morning reads upon getting into work. But isn't saying they laundered 378 billion a bit misleading? they've been busted for 110 million and 20 billion seems suspicious. Whilst i'm sure they would've happily laundered that much if they thought they could get away with it, that kind of thing leaves you open to being dismissed with handwaving
    see :

    keep going though, i refer lots of people to your posts instead of trying to explain things myself

  22. wirplit April 7, 2011 at 6:39 am #

    Too big to Fail? Too big to bust.

    Thanks for this Golem… this is a great bit of collected research… its like wading through offal but we have to understand and gen up on it. Why people in general are not more interested baffles me but perhaps once the dots of deficits and bank criminality and the ordinary economy start to join up maybe ….

  23. Fungus FitzJuggler III April 7, 2011 at 7:11 am #

    REALLY excellent stuff!

  24. Golem XIV - Thoughts April 7, 2011 at 8:48 am #


    I'm glad you liked the film. I made that back in 1996. I had asked teh BBC if I could make a film about GATT. They said "Never heard of it. No." So I made Icon instead. It was my attempt to warn about globalization within the restrictions I was under.

    Yes, I was trying to say we are all part of a system we make by being part of it. And we do bneed tounderstand our role in it. We made it. We can change it. But right now we are flying blind.


    Yes I wondered about the figures. The Observer article says,

    "… 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."

    Now as Pat says, very few ordinary Mexicans have money they need to change. People spend what they have and if they do change they will do so unofficially. Thus you have to ask who could generate such large sums. 110 billion identified as definitely drug money. What was the rest?
    It certainly wasn't tourists or locals.

    What transnational business passes repatriates its foreign profits through a bureau de change? The rest 'may not' have been drug money but I doubt it was straight either.

    That was why I went with teh higher amount.

    BUT, I agree with your point about being taken seriously. So while it pains me no end to give Wachovia, Wells Fargo and their regulators the benfit of the doubt, I will go and change th epost to sue teh $110 billion figure. Though I will grimace as I do so.

  25. bill April 7, 2011 at 9:56 am #

    Further information on how drug money poured into the banks here http://www.guardian.co.uk/global/2009/dec/13/drug-money-banks-saved-un-cfief-claims

    and far more in depth PDF Warning here.http://www.larouchepub.com/eiw/public/2009/2009_1-9/2009_1-9/2009-8/pdf/35-37_3608.pdf

  26. bill April 7, 2011 at 9:58 am #

    Sorry i should have added that this refers to bank liquity during the crisis, and that Tim Worstall can generally be relied upon to be wrong about everything.


  27. Con April 7, 2011 at 11:50 am #

    It is great to see real journalism again. From the Irish side of the water we only have Golem, Namawinelake and Gavin from Gavin's blog. Only know of one MSM journalist in Ireland who is a serious journo and that is Kathleen Barrington.

    To the subject. A terrific post and a description of the 21st century version of the Miami Vice banks of the 1980s and the laundering they did of cocaine money back then.

    In Europe of course and with a lively Irish connection there is a pipeline for moneylaundering stretching from Croatia and Albania via Austria to the Dublin International Financial Services Centre and the brassplaque banks there.

    When Anglo Irish bank's former Chairman and CEO stepped down the last act they carried out was to shepherd the books of an Austrian subsidiary called Anglo- Irish Austria AG off the group's books to a bank called Valartis who are very much a central and eastern european focused operation.

    Anglo Irish Austria AG was carrying over 600million euros in liquid assets and almost no borrowings or liabilities. A strange sale when one considers that the parent company in Dublin was cash starved at the time and collapsing into the arms of the taxpayer there.

    Even stranger when one considers that Anglo paid Valartis a sweetener on an already very sweet deal of 24million euros to hasten the subsidiary on its way.

    Anyone would think that the Chairman and CEO couldn't get shot of that subsidiary fast enough … and they'd be right in thinking that.

    The buyer Valartis announced proudly via their lawyers in Vienna that the purchase of Anglo Irish Austria AG would add considerably to Valartis' business in eastern Europe.

    A bit of an indicator where exactly Anglo Irish Austria AG's customer base was, no?

    Valartis specialise in funding for corporate deals as far east as Moscow.

    One wonders whether the current investigations in Dublin by Garda Joe include sending out a warrant or demand for a look at that subsidiaries' books but knowing the close collegiate nature of Irish authorities with the bank that likes to say 'Fianna Fail yeah no probs heres loads of money and shure never mind the oul' paperwork' this may not occur.

    One last thing. The connection between currency speculators and traders behind ostensibly legal street companies is a lively and interesting one and it is worth remembering that of the advisors who were whipering in the hapless Irish Minister of Finance's ear on the night of the infamous bank guarantee in Sept 2008 three of them are known to have made large sums of money as 'currency speculators' and the others were representatives of banks- including Peter Sutherland of Goldman Sachs.

    None of them pay income tax in Ireland. We creep closer and closer to the truth.

  28. Con April 7, 2011 at 12:00 pm #

    By the way Goldman Sachs make a regular feature of using the system in the states of paying a large fine to male legal embarrassment go away.

    It is highly likely that they hedge against having to make such payments to US authorities such as the $550million they lobbed casually over the fence when the American legal system took exception to Goldman's habit of advising one set of customers to 'buy, buy, buy' aboslute junk and in a department further down the hall warning another customer to sell … of course GS were left in the middle going long or short on what their clients would do next.

    Both ends against the middle and the asymmetric bet writ large. Throw the sherriff half a percent and he snoozes off again in his rockin' chair.

    I'm not surprised Lloyd Bankfein thinks he's doing 'gods work'. For a bent little spiv he seems to be able to walk away from jailtime just by waving his wallet.

    Bernie Madoff was in the wrong end of the game.

  29. Greg April 7, 2011 at 4:39 pm #

    I definitely see where you're joining the dots Golem, it's seems more than highly suspicious. Sadly though the article reports that it is only 110 MILLION not billion, that they have definitely identified as drug money, so you are left with an even larger amount "left over" that apparently comes from your average Mexicans changing their money. yeah right

  30. Golem XIV - Thoughts April 7, 2011 at 6:11 pm #


    Actually the Observer report says $20 billion has been identified by Fincen as definitetly laundered drug money and according to their source they have only just got started. The $110 million was the forfeiture Wachovia paid.

    Sorry for the confusion. But as you say, what the hell was the rest then?

  31. StevieFinn April 7, 2011 at 10:16 pm #


    Icon Earth. Amazing, made in 1995, you were way ahead of most of us. It must give you no satisfaction to have gotten it right despite the unpredictability.

    Always good to see James Lovelock, I have thought for quite a while that we must feel like a rash to the Earth, & that she might start scratching.

    I liked the comment about politicians thinking that they can bend the Earth to their will, I think Tory boy is a prime example of that.

  32. Hawkeye April 8, 2011 at 7:45 am #


    Watched Icon Earth last night, and what a gem! As Stevie says, ahead of its time, and still VERY relevant now.

    I loved the quote about Globalisation just being another word for Imperialism.

    Spotted the seeds for "Mathematics of Choas" in there. I admire your patience in bringing that to full fruition some twelve years later.

    Looking forward to whatever you've got in the pipeline.

  33. Rebecca April 8, 2011 at 9:51 am #

    Hi this is just a check comment cos I've lost three.

  34. Rebecca April 8, 2011 at 9:56 am #

    Thought so – I wish it would let you know as your writing if your comment is toooo looong. Instead of letting you go on and on like a fool only to discover you've been writing only to yourself!

    Anyway just wanted to say that I think Icon Earth should get its own post – in case anyone missed it- actually I wish it could be shown on TV again – it is more likely to paid attention now.

    And then I said a lon winded thing about full information and nearness to perfect markets and the transfer of spending power from old western middle classes to new developing world ones and blah blah which Google decreed wasn't worth it

  35. Trying to make April 8, 2011 at 10:11 am #

    Re: my previous comment.

    Funnily enough the roll of drug money in the financial collapse and resuscitation (and the specific story I was alluding too) is discussed at the beginning of this (Max) Keiser Report .

  36. Golem XIV - Thoughts April 8, 2011 at 11:06 am #


    Sorry about your comments. I am trying to move the blog to wordpress but it's taking a while because I have some pressing thiings at home to deal with.

    In the mean time the only solution is to post long comments in several parts. It's clunky but works. And I think I speak for many here when I say we rather like your loooong comments.

  37. Golem XIV - Thoughts April 8, 2011 at 11:13 am #

    Hawkeye, glad you liked Icon. I have a soft spot for that film. The BBC, and my boss there at the time, made it clear they hated the film. He told me he would never allow such a film again. He was true to his word. Although I did manage to make "Darwin – The Legacy" which he also disliked.

    Sadly, most of my better films have never had a second showing.

    You're right about The seeds of "The Mathematics of Chaos" film. Most of my films are related in one way or another. All trying to sketch out tools for seeing that the world is not the command and controllable machine our leaders still seem convinced it is.

  38. Mrs Patrick Campbell April 10, 2011 at 12:54 pm #

    Some say that Nelson Rockefeller actually met his end via a bullet to the head due to some large deposits to Chase Manhattan – from certain Colombian clients – that somehow 'went missing',,,,


  1. When Irish people do what their government won't » Golem XIV - Thoughts - August 15, 2013

    […] a few months ago, after it had declined to press criminal charges against a string of banks (Citi, Wachovia and HSBC), that ‘Too Big To Fail’ meant while such institutions could be investigated […]

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