Money-laundering ‘systematic, rife’ almost across the world

A prominent academician has told Mehr English Service all countries have been more or less involved in money-laundering process, a thing which had been carried out since long.
In the second part of the interview, Mr. Chossudovsky delves deep into the processes behind the release of the Panama Papers by a consortium of journalists who themselves were funded by big banks and the Wall Street. Interestingly enough and quite ironically, as professor may agree, the money becoming clean in the offshore havens are pumped into healthy and legitimate economic activities once the individuals receive illicit money as investments in real estate and other sectors:

Professor you have a good history about money laundering, money corruptions and dirty money in some countries, I want to ask you which countries do you think are the best and the worst in fighting corruption and such dirty money?

Well this is a very important question, because if you read the reports of western watch organizations, even the media, there will always points to a certain number of countries, Columbia, Mexico, Russia, and so on but nobody mentions the US mafia, the British mafia, the French mafia. They talk about the Italian mafia, etc. but in effect the main source of corruption comes from the core of the financial establishment to processes of co-optation when they invest in developing country, they will give bribes to the officials, but yet the coverage in the financial media will largely focus on the people receive the corruption money, rather than the people who give the corruption money. So we have such double standards: you can’t have corruption without people at very high level who are willing to pay money in favors. The process of political co-optation, the process of regime change, all, even the founding of NGOs, we find that many NGOs which are supposed to be very progressive, focusing on the oppositions to a particular government or to a particular policy or agenda, they are founded by Wall Street, by major foundations. Now the question is what the dynamics behind it is. If we look at the politicians in the US or in any other countries the level of corruption is more or less normal, and there is honesty in politics anymore! And under those circumstances politicians can be purchased in various ways and then coopted, and the cooptation comes precisely from multibillion dollar conglomerates coming from of banks, defense establishments, from the companies producing weapons. It also comes from the big pharmaceutical companies which coopt the politicians and so on.

When we discuss the issue of offshore banking, we have to understand that that is really part of the banking structure which claims legality but which in practice is very much integrated by criminal elements, implying the laundering of dirty money. Dirty money can actually get cleaned and we are no longer within the stereotype of organized crime as presented in Hollywood movies, the Italian or Irish mafia. The criminal syndicates are in effect sometimes instruments of global capitalism. So in effect what we have is a globalization of crime and criminalization of economic activities. And the lines between organized crime and organized capital are not easy to establish because many families from criminal syndicates that are now legitimate businesses. I’ll give you an example: Much of the textile industry in Thailand comes from proceeds from the opium trade in northern Thailand and then is reinvested in legitimate undertakings. As I mentioned, much of the real estate boom in southern Florida is ultimately tied in to the recycling of drug money through laundering process so it becomes clean, it goes to the Bahamas or the Cayman Islands, then it comes to Florida and with that money they buy hotels, or invest in real state. And of course, the most notorious example is Las Vegas which is a multi-billion-dollar casino complex which initially started out as an organized crime and today it’s owned by respectable corporations, so there’s been a transition where criminal syndicates, in a sense, become legal syndicates, and they no longer have to indulge in the kinds of scenarios that we had in the 1930s in Chicago.

Which countries in your view have been more successful in preventing and fighting corruption?

It’s a very difficult question to answer. We’d have to examine very specifically the policies and so on. I would say the certain countries which are a little bit aloof of these procedures, such as Scandinavian countries, but it’s very difficult to give an answer to that. The problem is we’re no longer dealing with national entities. The structures of trade and finance are integrated to such an extent that they also integrate the patterns of corruption, money laundering and offshore banking. The areas of corruption are such that it really now forecloses the possibility of democracy, because if politicians can be purchased by criminal syndicates or by corporations to act on their behalf rather than on behalf of the population, then we are no longer within the realm of independent governments acting on behalf of people, rather we are in the realm of governments which are acting on behalf of their corporate sponsors. And I think the United States is pretty much moving in that direction; there is very little independent policy-making, it is largely policy on behalf of defense contractors, making weapons, big oil companies, the big banks, the big pharmaceutical companies, and so on. So in effect, through lobbying process, these politicians are co-opted. That is also the part of a broader issue, let’s say, of offshore banking, because the process of co-optation implying money pay-offs, invariably will use the avenues of offshore locations to hide this undeclared wealth. One of the more latent examples is the Prime Minister of Malaysia who had a deposit of $600m in his bank courtesy of Saudi Arabia, which was supposed to be a gift to PM Najib Razak, which raised a big controversy in Malaysia, but that is Prime Minister Najib Razak which raised a big controversy in Malaysia. But I think we have to look at the fact these pay offs to politicians are something which are in essence routine while on the other hand I think what is revealing is that Panama papers do not actually target personalities in the United States; interestingly enough, they target individuals in different countries like Iceland, Russia and so on, but people in the US like politicians who have accounts in offshore locations are simply not mentioned. Most wealthy people in the US as well as politicians will have accounts overseas. Some may have registered for tax purposes while others not and this is something which is so widespread and as it was mentioned in the Panama Papers, they reveal something like 11 million names of individuals. But out all of those 11 million, they chose only a handful for political purposes rather than actually pointing at the architects of these tax heavens. The architects are the major British and American banks as well as Canadian banks. They are all in the tropical Caribbean tax heavens. People who go there can see with their own eyes and in fact the banks in the head offices and in various branches will encourage clients to open accounts in offshore locations. And they will advertise that as I have records of a sample catalogue which suggests this. The advertisement, which is published in online newspapers, says “Why don’t you open an account in an offshore location no questions are asked where your money comes from.” And this is a standard procedure. And we really have to address the broad structural context; namely the fact that the major financial institutions are routinely involved in money laundering including the laundering of drug money, providing a framework for tax evasion as so on. Responsibility does not lie with the customers of these offshore locations; it resides with the presidents and CEOs of these mega banks. There is ample documentation to that affect as I started this already in the 1990s or even in the late 1980s as how the drug money is used under Paris Club or London Club agreements. And in that regard also the fact that the International Monetary Fund is involved in regulating the banking system while they have not regulated the banking system in a way that which would avoid the process of laundering dirty money.

Thank you very much professor, it was great. If there is anything you want to add, I’m open to it.

I just want to mention that I worked on this issue quite a number of years back and I’m just saying that it is more of a political-economic issue and I think we need to look at the data. Another important thing is the role of the intelligence because the US intelligence has been linked up with drug trade. In other word, if you look at Afghanistan which now produces more than 90 per cent of the world’s heroin, which is estimated to amount to 200 billion a year; that trade initially started with the CIA back in the late 1970s as it financed the so-called Soviet-Afghan war and it allowed for the recruitment of Al-Qaeda Mujahedeen which was a CIA project and it used the proceeds of drugs to finance it. Now today, this multibillion dollar industry is protected by the US military and the US intelligence, the narcotics goes out, the opium goes out, sold, and is transformed into heroin and sold in western markets. It is also backed by the banks, because otherwise you still have to launder money. I think it is interesting to point out that since the surge in opium production in Afghanistan, there has been a dramatic surge in cases of addiction to heroin in the US, and in fact there is a certain causality. Heroin has always existed in the US, but not on a massive scale, and in fact large part of it is sold in other markets, especially in EU markets, but the thing is we have a multibillion drug trade which hinges on protection at the level of intelligence agencies, but also on avenues for laundering drug money which is very very large, and for that they need the complicity of the large banks and the locations in offshore havens, but they are part of, and let say, branches of western banks.

Professor, considering the fact that US military and intelligence are involved in dirty money, we don’t have any American names in Panama Papers. So, do you see any political motivation behind the release of the list, for example a motivation by US to damage the name of Russia or other countries, especially there has been evidence that Soros Foundation had been funding the Panama Papers.

Well, a number of foundations which are behind the Panama Papers is a consortium of journalists, they receive money from Ford Foundation (with known links to CIA), and they have support from Rockefeller Foundations, and from other foundations. When Wall Street funds critical journalism it is not to support an analysis of Wall Street role in offshore banking, Wall Street and City of London are the main architects of offshore banking, tax havens, and money laundering. The consortium of journalists is found by foundations which are linked precisely to Wall Street. And what they want is to divert attentions from the fact that ultimately they are the people who are responsible for these tax havens. Big banks and institutions fund the consortium of journalists to focus what they want which is to smear politicians for particular reasons, and given the prevalent dynamics of co-optation and corruption – which characterizes the world today – we can see that this is something which has been selective in its impacts and purpose. Now, I should mention something from my own writing on this, exactly three years ago, it was April 5, 2013 the same consortium of journalists released some names, and they chose exactly the same day for their second release and it has very little to do with an understanding of these offshore banking institutions, it is not only the Panama, there is 50 of them; I am not sure, perhaps the figures may change, the Cayman Island was set to be one of the largest banking markets in the world in terms of deposits after London, New York, and a couple of other places and so, in the realm of electronic banking, this money moves from one place to another, so in effect, it escapes the counting process which may apply in certain countries with regard to money laundering and criminality and other various restrictions, but the money laundering procedures implemented by various governments are absurd, because they don’t really look at how the banks themselves will money around and how will themselves create for transactions between offshore locations and headquarters in London or New York.

Leave a Reply

Your email address will not be published. Required fields are marked *