Drug Money Props Up Banks During Recession

Drug Money Props Up Banks During Recession

“The secret of grand fortunes without apparent cause is a crime forgotten, for it was properly done.” These are the words of renowned French author, Honore de Balzac in his book, Pere Goriot. While Balzac is often quoted, never were the words so timely as those quoted above. In an astonishingly overlooked article published in the U.K. newspaper, the Guardian in December 2009, the head of the United Nations Office on Drugs and Crime declared that billions of dollars in illicit drug money sustained the global financial system during the zenith of the worldwide recession.

Antonio Maria Costa reported to the Guardian that he has seen convincing evidence that the cash profits made from the global trafficking of drugs were “the only liquid investment capital” available to many of the world’s largest banks during 2008. He inferred from this information that much of the $352 billion derived from these illegal activities percolated through these legitimate banks and into the fiscal streams of most of the nations of the world.

“In many instances,” Costa said, “the money from drugs was the only liquid investment capital. In the second half of 2008, liquidity was the banking system’s main problem and hence liquid capital became an important factor.” These accusations arouse many questions regarding the participation, whether tacit or direct, of the leaders of the world and the world’s banks in the systematic laundering of drug money through the washing machines of legitimate enterprise.

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