UN crime chief: Was the bailout the largest drug money laundering operation in history?

by Corrente

A very interesting story noticed by Susie. Very, very interesting. Reuters:

United Nations' crime and drug watchdog has indications that money made in illicit drug trade has been used to keep banks afloat in the global financial crisis, its head was quoted as saying on Sunday.

(Notice the lack of agency in that sentence. "Has been used." Used by whom? And when?)

Vienna-based UNODC Executive Director Antonio Maria Costa said in an interview released by Austrian weekly Profil that drug money often became the only available capital when the crisis spiralled out of control last year.

"In many instances, drug money is currently the only liquid investment capital," Costa was quoted as saying by Profil. "In the second half of 2008 [that is, when Pelosi, Obama, Reid, Bush, and Paulson got TARP passed] liquidity was the banking system's main problem and hence liquid capital became an important factor."*

The United Nations Office on Drugs and Crime had found evidence that "interbank loans were funded by money that originated from drug trade and other illegal activities," Costa was quoted as saying. There were "signs that some banks were rescued in that way."

Profil said Costa declined to identify countries or banks which may have received drug money and gave no indication how much cash might be involved. He only said Austria was not on top of his list, Profil said.

Makes you think, doesn't it?

Because if hundreds of billions of drug money were used to rescue the banks, that would make the bailout the largest money laundering operation in the history of the world. Although not without precedent. (Somebody who really knows how this stuff works would have to tell me whether this would be in addition to TARP and the rest of the two trillion, or if the banks got a "short term loan" from the drug lords, later repaid by taxpayer dollars, or what. I guess we have to assume that "financial innovation" is just as prevalent in the drug world as it is in on Wall Street, so for all I know there were tranches, hedges, computer models, and everything else.)

http://correntewire.com/was_bailout_largest_drug_money_laundering_operation_history