Media analyst and Hollywood observer James Hirsen tells Newsmax that the Mel Gibson heard ranting and raving against his ex-girlfriend on a series of audiotapes “is not the person that I know.”
Hirsen also cautions that it’s too early to say whether the tapes have destroyed the Oscar-winning actor-director’s career.
Hirsen, who considers himself a friend of Gibson, is a New York Times best-selling author and law professor who writes the Left Coast Report column for Newsmax.
In a Newsmax interview, he was asked about the impact of the series of obscenity-laced tapes released by RadarOnline.com in which Gibson viciously berates Oksana Grigorieva, the mother of his 8-month old daughter, and uses several racial slurs.
“For the moment, all the experts are proclaiming his career over,” Hirsen says.
“But he has his own studio. He is autonomous, so it’s not going to stop his work. It may stop certain people from working with him for some time, but that has to do with what actions he takes in the future.
“He has received a tremendous boost from people like Whoopi Goldberg, Robert Downey Jr., and mostly people who have had some sort of relationship with him and his family and know the man, as opposed to those who are judging him strictly by the stories and the tapes.
“He’s been in the business a very long time and there are tons of people who have worked with him and know him. That person on the tape is not the person that I know or that other people who have worked with Mr. Gibson know. He has a long history of being a tremendous family man, a good father, a generous person, easy to work with, with all kinds of positive attributes.”
Hirsen cites a court statement from Gibson’s soon to be ex-wife wife Robyn saying she was with him for nearly 30 years and he was never abusive. The statement helped persuade a judge not to take away Gibson’s visiting rights with his daughter by Oksana.
“I think we have not heard the other side, and I think we need to wait and hear the other side of the story,” Hirsen says.
Hirsen was asked how the “Braveheart” actor is dealing with the scandal that has erupted over the audiotapes.
“It seems to me, based on my sources, that he’s constructively engaged, that he is dealing with the priorities the way he should,” he tells Newsmax.
“And of course, there is a pending criminal investigation [in a domestic violence case] and a custody dispute in court, so he has a lot of legal issues that he is wrangling with.
“But the person that I know is not the person I hear on tape. He is in a good place and he’s working toward properly interfacing with professionals that are helping him, particularly in the custody case and the pending criminal dispute.”
Grigorieva claims Gibson struck her and damaged two teeth, but the TMZ website reports that her dentist says there is no evidence of a blow to the mouth.
“The dentist who did the repair took a picture and told that same website, TMZ, that he thought the picture was, quote, 100 percent fake, that the picture had been tampered with,” Hirsen says.
Also, forensic experts hired to examine the tapes claim they have been edited, with pieces strung together, Hirsen notes. He adds that if the picture or tapes were doctored, that would allow Gibson’s lawyers to argue that those items of evidence would be inadmissible both in the custody case and a potential criminal charge against Gibson.
Asked if it is known for sure who has been leaking tapes, Hirsen responds: “Oksana says she did not leak them, and that leads to the question, if that’s true, who did?
“It would seem clear that somebody in her camp, whether it’s a lawyer or publicist, gave it to this website RadarOnline.”
© Newsmax. All rights reserved.
Thursday, July 22, 2010
Gold Coin Sellers Angered by New Tax Law
Amendment Slipped Into Health Care Legislation Would Track, Tax Coin and Bullion Transactions
Those already outraged by the president's health care legislation now have a new bone of contention -- a scarcely noticed tack-on provision to the law that puts gold coin buyers and sellers under closer government scrutiny.
The issue is rising to the fore just as gold coin dealers are attracting attention over sales tactics.
Section 9006 of the Patient Protection and Affordable Care Act will amend the Internal Revenue Code to expand the scope of Form 1099. Currently, 1099 forms are used to track and report the miscellaneous income associated with services rendered by independent contractors or self-employed individuals.
Starting Jan. 1, 2012, Form 1099s will become a means of reporting to the Internal Revenue Service the purchases of all goods and services by small businesses and self-employed people that exceed $600 during a calendar year. Precious metals such as coins and bullion fall into this category and coin dealers have been among those most rankled by the change.
This provision, intended to mine what the IRS deems a vast reservoir of uncollected income tax, was included in the health care legislation ostensibly as a way to pay for it. The tax code tweak is expected to raise $17 billion over the next 10 years, according to the Joint Committee on Taxation.
Taking an early and vociferous role in opposing the measure is the precious metal and coin industry, according to Diane Piret, industry affairs director for the Industry Council for Tangible Assets. The ICTA, based in Severna Park, Md., is a trade association representing an estimated 5,000 coin and bullion dealers in the United States.
"Coin dealers not only buy for their inventory from other dealers, but also with great frequency from the public," Piret said. "Most other types of businesses will have a limited number of suppliers from which they buy their goods and products for resale."
NEXTSecret gold swap has spooked the market
It takes a lot to spook the solid old gold market. But when it emerged last week that one or more banks had lent 380 tonnes of gold to the Bank of International Settlements in return for foreign currencies, there was widespread surprise and confusion
Secret gold swap has spooked the market Photo: EDDIE MULHOLLAND
The news that a mystery bank has just pawned the family jewels gave traders a jolt – nervous about the sudden transfer of almost 20pc of the world's annual gold production and the possibility of a sell-off.
In a tiny footnote in its annual report, the bank disclosed its unusually large holding of gold, compared with nothing the year before. The disclosure was a large factor in the correction of the gold price this week, which fell below $1,200 for the first time in more than a month.
Concerns hinged on whether the BIS could potentially sell on this vast cache of bullion in the event of a default, flooding the market with liquidity. It appears to have raised $14bn for whoever's been doing the swapping – small fry on the currency markets, but serious liquidity in the gold market.
Denominated in euros, gold has fallen 8pc since the beginning of the month and is now trading at a seven-week low of €937 per troy ounce.
The big gold exchange traded funds (ETFs) – having peaked at record inflows in May – have also been showing net outflows over the past few days.
Meanwhile, economists and gold market-watchers were determined to hunt down which bank is short of cash – curious about who is using their stash of precious metal for what looks suspiciously like a secret bailout.
At first it looked like the BIS was swapping gold with a troubled central bank. After all, the institution is the central bankers' bank and its purpose to conduct transactions with national monetary authorities.
Central banks in the troubled southern zone of Europe were considered the most likely perpetrators.
According to the World Gold Council, central banks in Greece, Spain and Portugal held 112.2, 281.6 and 382.5 tons of gold respectively in June – leading analysts to point fingers at Portugal, or a combination of the three.
But Edel Tully, an analyst from UBS, noted that eurozone central banks would be severely limited with what they could do with the influx of extra cash – unable to transfer it straight to governments or make use of the primary bond markets.
She then listed the only other potential monetary authorities with enough gold as the US, China, Switzerland, Japan, Russia, India and Taiwan – and the International Monetary Fund.
This led to musings that the counterparty was the IMF, making sense because the lender of last resort is historically prone to cash shortages and has been quietly selling off gold in the first half of the year.
Renowned gold expert Jim Sinclair adopted this explanation. The panic came when people mistook a lease for a swap, he argues. Far from being a big release of gold into the market, it is simply a commercial arrangement between the IMF and BIS with a favourable rate of interest paid for the foreign currency.
"Gold swaps are usually undertaken by monetary authorities," he writes on his industry blog, MineSet. "The gold is exchanged for foreign exchange deposits with an agreement that the transaction be unwound at a future time at an agreed price.
"The IMF will pay interest on the foreign exchange received. Historically swaps occur when entities like the IMF have a need for foreign exchange, but do not wish to sell the gold. In this case, gold is a leveraging device for needed currency to meet requirements.
"The many reports that characterise the large IMF gold swap as a sale of gold into the markets do not understand the difference between a swap and a lease."
However, the day after original reports about the swaps, BIS emailed a statement saying that the swaps had not been conducted with monetary authorities but purely with commercial banks.
This did nothing to quell the sense of mystery surrounding the deal or deals. It is almost inconceivable that a single commercial bank could have accumulated so much gold alone. And cynics have suggested that the whole affair still looks like a secretive European bailout that a single country wants to keep quiet.
In this case, one or more of the so-called bullion banks – which act as wholesale market-makers and include Goldman Sachs, Deutsche Bank, JP Morgan, HSBC, Barclays, UBS, Societe Generale, Mitsui and the Bank of Nova Scotia – would have agreed to act on behalf of a monetary authority.
This would add an extra layer of anonymity. "So the BIS swaps look like a tripartite transaction," writes Adrian Douglas of the Gold Anti-Trust Association. "The commercial bank or banks made a swap with a central bank or banks and then the commercial bank or banks made a swap with the BIS."
Analysts for Commerzbank note that in the meantime, "The price of gold is tending weaker at present."
Baltic Dry Index still falling
The Baltic Dry Index, a measure of commodity shipping costs, has fallen for the longest period in nine years, due to lower volumes of iron ore being shipped to China.
Surplus steel means manufacturers are relying on stockpiles, rather than shipping in iron ore from abroad.
The index of freight rates on international trade routes fell 38 points, or 2pc, to 1,902 points on Friday in its 31st straight decline.
Charter rates for all types of ships fell.
Buyers angry at 'excessive' cocoa speculation
European cocoa buyers are so concerned about potential speculation in the market that they have written to the London commodities exchange threatening to move their trade to America.
Talks between industry participants and Liffe, the London exchange operator, will take place this week, following concerns about the price spike in June.
Futures hit a 32-year high, amid lower production due to diseased crops in Africa and higher demand.
Those who signed the letter claim there has been excessive speculation by hedge funds and want greater transparency about who is buying what and how much.
$500,000 Damages in Genetic Rice Trial
ST. LOUIS (CN) - A federal jury awarded a rice farmer $500,000 for his claim that genetically modified rice contaminated his crop. It was the third of five "bellwether" trials involving hundreds of lawsuits that farmers have filed against Bayer CropScience. The complaints are the result of an August 2006 announcement that LibertyLink, a herbicide-resistant rice, had somehow been released from testing facilities. The rice had not yet been approved for sale for human consumption, causing rice futures to plunge.
The rice has been approved, but is not being commercially marketed.
Denny Deshotels claimed that he and his family lost more than $1 million when the market dropped, and he incurred more costs by switching crops and cleaning his equipment of the LibertyLink rice. He sought $1.5 million in damages.
Bayer lawyers admitted that Deshotels lost some money, but denied he lost as much as he claimed. Bayer's attorneys argued that even though the rice market initially plunged, it quickly recovered and farmers who held their rice until the market recovered suffered few losses.
The five bellwether federal trials were initially set up to allow one case apiece in Missouri, Arkansas, Louisiana, Mississippi and Texas.
The outcomes were to give plaintiffs and defendants an idea about similar pending cases, giving them opportunities to work out settlements. Two of the cases have been consolidated.
Deshotels' attorney, Don Downing, told the St. Louis Post-Dispatch that jurors in two state trials in Arkansas also have ruled in favor of the farmers.
The rice has been approved, but is not being commercially marketed.
Denny Deshotels claimed that he and his family lost more than $1 million when the market dropped, and he incurred more costs by switching crops and cleaning his equipment of the LibertyLink rice. He sought $1.5 million in damages.
Bayer lawyers admitted that Deshotels lost some money, but denied he lost as much as he claimed. Bayer's attorneys argued that even though the rice market initially plunged, it quickly recovered and farmers who held their rice until the market recovered suffered few losses.
The five bellwether federal trials were initially set up to allow one case apiece in Missouri, Arkansas, Louisiana, Mississippi and Texas.
The outcomes were to give plaintiffs and defendants an idea about similar pending cases, giving them opportunities to work out settlements. Two of the cases have been consolidated.
Deshotels' attorney, Don Downing, told the St. Louis Post-Dispatch that jurors in two state trials in Arkansas also have ruled in favor of the farmers.
Money Laundering and the Global Drug Trade Fueled by Capitalist Elites
When investigative journalist Daniel Hopsicker broke the story four years ago that a DC-9 (N900SA) "registered to a company which once used as its address the hangar of Huffman Aviation, the flight school at the Venice, Florida Airport which trained both terrorist pilots who crashed planes into the World Trade Center, was caught in Campeche by the Mexican military ... carrying 5.5 tons of cocaine destined for the U.S.," it elicited a collective yawn from corporate media.
And when authorities searched the plane and found its cargo consisted solely of 128 identical black suitcases marked "private," packed with cocaine valued at more than $100 million, the silence was deafening.
But now a Bloomberg Markets magazine report, "Wachovia's Drug Habit," reveals that drug traffickers bought that plane, and perhaps fifty others, "with laundered funds they transferred through two of the biggest banks in the U.S.," Wachovia and Bank of America.
The Justice Department charge sheet against the bank tells us that between 2003 and 2008, Wachovia handled $378.4 billion for Mexican currency exchanges, "the largest violation of the Bank Secrecy Act, an anti-money-laundering law, in U.S. history."
"A sum" Bloomberg averred, equal to one-third of Mexico's current gross domestic product."
Since 2006, some 22,000 people have been killed in drug-related violence. Thousands more have been wounded, countless others "disappeared," torture and illegal imprisonment is rampant.
In a frightening echo of the Reagan administration's anti-communist jihad in Central America during the 1980s, the Bush and now, Obama administration has poured fuel on the fire with some $1.4 billion in "War on Drugs" funding under Plan Mérida. Much of that "aid" is destined to purchase military equipment for repressive police, specialized paramilitary units and the Mexican Army.
There is also evidence of direct U.S. military involvement. In June, The Narco News Bulletin reported that "a special operations task force under the command of the Pentagon is currently in place south of the border providing advice and training to the Mexican Army in gathering intelligence, infiltrating and, as needed, taking direct action against narco-trafficking organizations."
One former U.S. government official told investigative journalist Bill Conroy, "'Black operations have been going on forever. The recent [mainstream] media reports about those operations under the Obama administration make it sound like it's a big scoop, but it's nothing new for those who understand how things really work'."
But, as numerous investigations by American and Mexican journalists have revealed, there is strong evidence of collusion between the Mexican Army and the Juarez and Sinaloa drug cartels. A former Juarez police commander told NPR in May that "the intention of the army is to try and get rid of the Juarez cartel, so that [Joaquin "El Chapo" Guzman] Chapo's [Sinaloa] cartel is the strongest."
The cosy relations among the world's biggest banks, drug trafficking organizations and the U.S. military-intelligence apparatus is not however, a new phenomenon. What is different today is the scale and sheer scope of the corruption involved. As Michel Chossudovsky points out,
"This trade can only prosper if the main actors involved in narcotics have "political friends in high places." As legal and illegal undertakings are increasingly intertwined, the dividing line between "businesspeople" and criminals is blurred. In turn, the relationship among criminals, politicians and members of the intelligence establishment has tainted the structures of the state and the role of its institutions, including the military." (The Global Economic Crisis: The Great Depression of the XXI Century, Montreal:Global Research, 2010, pp. 195-196)
While the Bloomberg story should cast new light on highly-profitable links amongst major financial institutions and narcotrafficking organizations in what may be protected drug rackets green-lighted by corrupt officials, media silence, particularly by outlets such as The Wall Street Journal and theFinancial Times, threaten to propel what should be an international scandal into a one-off news item scheduled for a trip down the memory hole.
"Cocaine One"
If, as New York Times columnist Thomas Friedman claims "the hidden hand of the market will never work without a hidden fist," then perhaps too, drug cartels work their "market magic" with their own "hidden fist" or, as the Russians like to say akrysha, a web of protectors--and facilitators--drawn from business, finance, organized crime and the secret world of intelligence.
Dubbed "Cocaine One" by Hopsicker, the DC-9 was curious for a number of reasons, not least of which was the fact that "one of the chief shareholders" of a dodgy outfit called SkyWay Aircraft "is a private investment bank in Dallas which also raised funds for a Mexican industrialist with reported ties to a Cali and Juarez Cartel narcotics trafficker."
More curious still, the airline kitted-out its fleet with distinctive colors and a seal "designed to impersonate planes from the U.S. Dept. of Homeland Security." And when he learned that "SkyWay's genesis can be traced to In-Q-Tel Inc., a secretive, Arlington, Va., investment group owned, operated, and financed out of the black box budget of the Central Intelligence Agency," well you can bet corporate media ran themselves ragged investigating that!
To top it off, when another drug plane crash landed in the Yucatan Peninsula eighteen months later and broke apart, a Gulfstream II business jet (N987SA) that spilled "4 tons of cocaine across a muddy field," Hopsicker reported that it had originated from the same network and used the same source for its financing, the "Casa de Cambio Puebla SA, a country-wide network of currency exchanges."
And to make matters even more intriguing from a parapolitical perspective, after searching through FAA records Hopsickerdiscovered that the Gulfstream II business jet "was owned by a secretive Midwestern media baron and Republican fund-raiser, who had a business partner who, incredibly, owned the otherAmerican drug plane, the DC-9, recently busted in Mexico."
In fact, as Bloomberg investigative journalist Michael Smith learned years later, these were the same planes and samecurrency exchange which Hopsicker reported back in 2007 traffickers had used to purchase drug jets with funds laundered through Wachovia.
"One customer that Wachovia took on in 2004 was Casa de Cambio Puebla SA," Smith wrote. The Puebla, Mexico currency exchange was the brainchild of Pedro Alatorre, a "businessman" who "had created front companies for cartels."
Alatorre, and 70 others connected to his network, were seized in 2007 by Mexican law enforcement officials. Authorities discovered that the accused drug money launderer and airline broker for the cartels controlled 23 accounts at the Wachovia Bank branch in Miami and that it held some $11 million, subsequently frozen by U.S. investigators.
In 2008, a Miami federal grand jury indicted Alatorre, now awaiting trial in Mexico along with three other executives, charging them with drug trafficking and money laundering, accusing the company of using "shell firms to launder $720 million through U.S. banks." The Justice Department is currently seeking Alatorre's extradition from Mexico.
According to Bloomberg, "Puebla executives used the stolen identities of 74 people to launder money through Wachovia accounts." Jose Luis Marmolejo, the former head of the Mexican attorney general's financial crimes unit told Smith, "Wachovia handled all the transfers, and they never reported any as suspicious."
Some $300,000 was transferred by Wachovia to a Bank of America branch in Oklahoma City. With cash in hand Bloomberg reports, traffickers "used the funds to buy the DC-9 through Oklahoma City aircraft broker U.S. Aircraft Titles Inc." When queried by Smith about the sale, "U.S. Aircraft Titles President Sue White declined to comment."
Jeffrey Sloman, the federal prosecutor who handled the Wachovia case said in a press release that "Wachovia's blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations."
Yet, as Hopsicker wrote nearly three years ago, "the politically-explosive implications of the scandal may explain why American officials have been reluctant to move against, or even name, the true owners of the planes and basically 'turned a blind eye' to the American involvement exposed by the drug trafficking seizures."
As of this writing, no Americans have been criminally charged in the cash-for drug planes banking conspiracy.
"Troubled Assets" or Something More Sinister?
When Wells Fargo bought Wachovia, once America's fourth largest bank in 2008 at the fire-sale price of $12.8 billion, the bank and its former CEO, Kennedy "Ken" Thompson, who "retired at the request of the board" before the full-extent of the financial meltdown hit home, were in deep trouble.
Before the Wells takeover, Wachovia had been on a veritable shopping spree. After the firm's 2001 merger with First Union Bank, Wachovia merged with the Prudential Securities division of Prudential Financial, Inc., with Wachovia controlling the lion's share of the firm's $532.1 billion in assets. This was followed by the bank's purchase of Metropolitan West Securities, adding a $50 billion portfolio of securities and loans to the bank's Lending division. In 2004, Wachovia followed-up with the $14.3 billion acquisition of SouthTrust Corporation.
Apparently flush with cash and new market clout, Wachovia set it sights on acquiring California-based Golden West Financial. Golden West operated branches under the name World Savings Bank and was the nation's second largest savings and loan. At the time of the buy-out, Golden West had over $125 billion in assets. For Wachovia however, it was a deal too far.
With an enormous housing bubble fully inflated, and a new speculative merger-mania in full swing, one can only surmise that the need for liquidity at any price, had driven banking giants such as Wachovia to play dumb when shadier, yet highly-profitable transactions, such as the "arrangement" with Casa de Cambio Puebla SA, were involved.
Bleeding cash faster than you can say "mortgage backed securities," Wachovia was on the hook for their 2006 $26 billion buy-out of Golden West Financial at the peak of the housing bubble, a move that BusinessWeek reported generated "resistance from his own management team" but ignored by Thompson.
Why? "Because no one outside of Thompson and Golden West CEO Herb Sandler seemed to like the deal from the moment it was announced," a company insider told BusinessWeek.
While the buy-out may have given Thompson "the beachhead in California he had long desired ... the ink was barely dry on the Golden West deal in late 2006 when the housing bubble in markets including California and Florida began to deflate."
Hammered by the housing bust, Wachovia's share price, which had risen to $70.51 per share when the Golden West deal was announced had slid to $5.71 per share by October 2008. In other words, Wachovia, along with the world's economy, began circling the proverbial drain.
However you slice it, although it was clear that the Golden West deal had gone south quicker than you can say "credit default swaps," this didn't seem to stop Wachovia from paying "smartest guy in the room" Thompson $15.6 million in total compensation in 2007, a year after the fatal Golden West transaction. Nor did these losses stop the bank from showering Thompson with a severance package worth nearly $8 million.
But was something else going on here?
Wells Fargo bank admitted in a signed Deferred Prosecution Agreement with the federal government that they would not contest charges brought by the Justice Department in itsindictment of the bank.
The banking giant was forced to admit charges by prosecutors that "On numerous occasions, monies were deposited into a CDC [Casa de Cambio] by a drug trafficking organization. Using false identities, the CDC then wired that money through its Wachovia correspondent bank accounts for the purchase of airplanes for drug trafficking organizations. On various dates between 2004 and 2007, at least four of those airplanes were seized by foreign law enforcement agencies cooperating with the United States and were found to contain large quantities of cocaine."
Bloomberg reported that Wells Fargo, in the wake of the settlement "declined to answer specific questions, including how much it made by handling $378.4 billion--including $4 billion of cash--from Mexican exchange companies."
There was however, more than "troubled assets" and charges of money laundering to the story. In fact, the purchase of these drug planes have been tied to some of the Bush administration's most secretive "War On Terror" programs.
Drug Flights, CIA Renditions. Just Another Day at the Office!
Replicating a pattern used by the Central Intelligence Agency during the Iran-Contra scandal of the 1980s, the secret state used a network of cut-outs and legitimate businesses to transport prisoners to Agency black sites for "special handling."
During Iran-Contra it was "guns in, drugs out." Today one might say its "drugs in, tortured prisoners out." The results however, were the same; egregious crimes and lawbreaking on a staggering scale.
Subsequent investigations by Narco News revealed that "this particular Gulfstream II (tail number N987SA), was used between 2003 and 2005 by the CIA for at least three trips between the U.S. east coast and Guantanamo Bay, home to the infamous 'terrorist' prison camp," Bill Conroy reported.
"In addition," Conroy wrote, "the two SkyWay companies are associated with individuals who have done highly sensitive work for the Department of Defense or U.S. intelligence agencies, public records show and Narco News sources confirm."
According to AFP, the Mexican daily El Universal said "it had obtained documents from the United States and the European Parliament which 'show that that plane flew several times to Guantanamo, Cuba, presumably to transfer terrorism suspects,'" the French newswire reported.
The plane was carrying "Colombian drugs" bound for the U.S. for the "fugitive leader of Mexico's Sinaloa cartel, Joaquin 'Chapo' Guzman," when it crashed in the Yucatan.
According to El Universal, the Federal Aviation Administration's "logbook registered that the plane had traveled between US territory and the US military base in Guantanamo," and that its last registered owner was "Clyde O'Connor in Pompano Beach, Florida."
The Independent confirmed separately in January of this year that "Evidence points to aircraft--familiarly known as 'torture taxis'--used by the CIA to move captives seized in its kidnapping or 'extraordinary rendition' operations through Gatwick and other airports in the EU being simultaneously used for drug distribution in the Western hemisphere."
Hugh O'Shaughnessy, confirming earlier reporting by Bill Conroy and Daniel Hopsicker said that "a Gulfstream II jet aircraft N9875A identified by the British Government and the European Parliament as being involved in this traffic crashed in Mexico in September 2008 while en route from Colombia to the US with a load of more than three tons of cocaine."
While O'Shaughnessy got the tail-number and date wrong, he's correct when he states that U.S. intelligence assets "continue the drug dealing they indulged in during the Iran-Contra affair of the Reagan years."
Narco News, citing DEA sources, learned that the crashed Gulfstream loaded with four tons of cocaine "was part of an operation being carried out by a Department of Homeland Security agency."
However in a later report, Mark Conrad, a former supervisory special agent with ICE's predecessor agency, U.S. Customs, toldNarco News that the crashed Gulfstream used to transport drugs and prisoners was controlled by the CIA and "that the CIA, not ICE ... [was] actually the U.S. agency controlling the ... operation. If this were the case, then "any individuals or companies involved in a CIA-backed operation, even ones that are complicit in drug trafficking, would be off limits to U.S. law enforcers due to the cloak of national security the CIA can invoke."
In other words, a jet purchased by drug traffickers with funds laundered through an American bank and used in the CIA's "extraordinary rendition" program may have been part of aprotected drug operation by U.S. intelligence agencies. An operation furthermore, whose purpose is still unknown.
This report tracks closely with evidence uncovered by Peter Dale Scott. In a recent piece in Japan Focus Scott wrote that "it is not surprising that the U.S. Government, following the lead of the CIA, has over the years become a protector of drug traffickers against criminal prosecution in this country."
"A recent spectacular example" Scott tells us, drawing on research from his forthcoming book, is the curious case of CIA Venezuelan asset, General Ramon Guillén Davila.
Scott adds that "the United States never asked for Guillén's extradition from Venezuela to stand trial; and in 2007, when he was arrested in Venezuela for plotting to assassinate President Hugo Chavez, his indictment was still sealed in Miami. Meanwhile, CIA officer Mark McFarlin, whom DEA Chief Bonner had also wished to indict, was never indicted at all; he merely resigned."
But the stench of Iran-Contra, like that of the CIA's torture program, as with earlier secret state machinations with drug cartels never went away; in fact, like a cancer, one managed drug operation seamlessly metastasized into another.
Greasing the Wheels
The United Nations Office on Drugs and Crime (UNODOC) state in their 2010 Annual Report that "money-laundering is the method by which criminals disguise the illegal origins of their wealth and protect their asset bases in order to avoid suspicion of law enforcement and to prevent leaving a trail of incriminating evidence," and that financial institutions, particularly U.S. and European banks are key to efforts to choke-off illicit profits from the grisly trade.
The trouble is these institutions, along with U.S. intelligence agencies, are the problem.
UNODOC estimate that profits derived from narcotics rackets amount to some $600 billion annually and that up to $1.5 trilliondollars in drug money is laundered through seemingly legitimate enterprises.
Part of the fallout from capitalism's economic meltdown has been that "drugs money worth billions of dollars kept the financial system afloat at the height of the global crisis," The Observer disclosed late last year.
Antonio Maria Costa, UNODOC's director, told the British newspaper he saw evidence that proceeds from the illicit trade were "the only liquid investment capital" available to some banks on the brink of collapse last year and that "a majority of the $352bn (£216bn) of drugs profits was absorbed into the economic system as a result."
The UN drugs chief said that in "many instances, the money from drugs was the only liquid investment capital." And with markets tanking and major bank failures nearly a daily occurrence, "liquidity was the banking system's main problem and hence liquid capital became an important factor."
According to Costa, "Inter-bank loans were funded by money that originated from the drugs trade and other illegal activities... There were signs that some banks were rescued that way."
Web of Corruption
Although the UN's top anti-narcotics official declined to identify either the countries or banks that have benefited from the murderous trade, a web of corruption envelops the entire financial sector of the capitalist economy as the quest for "liquid assets" trumps everything.
Martin Woods, once director of Wachovia's anti-money-laundering unit in London told Bloomberg, "It's the banks laundering money for the cartels that finances the tragedy." Woods told the magazine he "quit the bank in disgust" after executives "ignored his documentation that drug dealers were funneling money through Wachovia's branch network."
Despite warnings from the Treasury Department since 1996 that Mexican currency exchanges were laundering drug money through U.S. banks, "Wachovia ignored warnings by regulators and police, according to the deferred-prosecution agreement,"Bloomberg reported.
"As early as 2004, Wachovia understood the risk," the bank admitted in court. "Despite these warnings, Wachovia remained in the business."
At the bank's anti-money laundering unit in London, Woods and his counterpart Jim DeFazio in Charlotte, NC told Smith "they suspected that drug dealers were using the bank to move funds."
Former Scotland Yard investigator Woods, said he "spotted illegible signatures and other suspicious markings on traveler's checks from Mexican exchange companies," and that he sent copies of his report to the U.K.'s Financial Services Authority, the DEA and U.S. Treasury Department.
But rather than being rewarded for his diligence, Woods told Smith "his bosses instructed him to keep quiet and tried to have him fired." In one meeting, "a bank official insisted Woods shouldn't have filed suspicious activity reports to the government, as both U.S. and U.K. laws require."
According to a whistleblower suit filed with an employment tribunal in London, Barrons reported last year before the Wachovia scandal broke, that Woods claimed "his bosses bullied and demoted him, then withdrew his reports of other suspicious activities in Eastern Europe."
It gets worse. Woods' complaint alleges "that Wachovia staff may have even tipped off Mexican-exchange clients about his laundering suspicions," and the veteran investigator told Wachovia officials "he feared for his safety."
In response, bank spokesperson Mary Eshet said at the time, "Wachovia believes that it has acted appropriately in its business dealings, and Mr. Woods' claims to the contrary are without merit."
Meanwhile, on the American side of the pond, 21-year FBI veteran DeFazio said "he told bank executives in 2005 that the DEA was probing the transfers through Wachovia to buy the planes." The bank ignored his warnings and continued along on their merry way until their indictment.
The law enforcement veteran told Bloomberg, "I think they looked at the money and said, 'The hell with it. We're going to bring it in, and look at all the money we'll make'."
The former Scotland yard investigator added, "If you don't see the correlation between the money laundering by banks and the 22,000 people killed in Mexico, you're missing the point."
But Wachovia wasn't the only large financial institution "missing the point." Bloomberg also revealed that Bank of America and the London-based "HSBC Holdings Plc, Europe's biggest bank by assets," American Express Bank, Banco Santander SA, Citigroup Inc., as well as "the world's largest money transfer firm," Western Union were also up to their eyeballs in dubious transactions.
In 1994 for example, American Express paid $14 million to settle with the federal government after "two employees were convicted in a criminal case involving drug trafficker Juan Garcia Abrego."
Yet between 1999-2004, Bloomberg reported "the bank failed to stop clients from laundering $55 million of narcotics funds, the bank admitted in a deferred-prosecution agreement in August 2007 ... and paid $65 million to the U.S. and promised not to break the law again." Charges were dismissed a year later under terms of the agreement.
And back in 2004, The Independent disclosed that "HSBC, the UK's largest bank, have been slammed for lax money-laundering procedures in a report by a US Senate subcommittee."
Journalists Hugh O'Shaughnessy and Paul Lashmar revealed that "the UK-based multinational stands accused of laxity in the fight against money laundering, drug trafficking, corruption and terrorism, notably in the oil-rich African state of Equatorial Guinea."
"In one of the few cases" when the scandal-plagued and now-shuttered Riggs Bank "seems to have properly followed US anti-money-laundering legislation," Riggs formally asked HSBC and a Spanish bank, Banco Santander, "to divulge the identities of the owners of two companies that kept accounts with them and that were receiving suspicious wire transfers totalling in excess of $35m (£20m). The banks refused to say who the owners were."
Bloomberg disclosed that "federal agents caught people who work for Mexican cartels depositing illicit funds in Bank of America accounts in Atlanta, Chicago and Brownsville, Texas, from 2002 to 2009." Authorities contend that "Mexican drug dealers used shell companies to open accounts at London-based HSBC."
Nevertheless, neither bank were accused of wrongdoing by the federal government and both firms denied any involvement in money laundering schemes.
Bank of America spokeswoman Shirley Norton told Smith that they "strictly follow the government rules." Norton said, "Bank of America takes its anti-money-laundering responsibilities very seriously," a fact not readily apparent from Bloomberg Marketsinvestigation.
Both Norton and HSBC spokesman Roy Caple told Smith that "[privacy] laws bar them from discussing specific clients."
And so it goes.
Fallout? What Fallout!
In the wake of Wachovia's admission to federal prosecutors, Wells Fargo will pay "$160 million in fines and penalties, less than 2 percent of its $12.3 billion profit in 2009."
"If Wells Fargo keeps its pledge," Bloomberg reports, then "according to the agreement [the federal government will] drop all charges against the bank in March 2011."
Why might that be? Large banks are immune from vigorous prosecution for violating the Bank Secrecy Act "by a variant of the too-big-to-fail theory."
Veteran Senate investigator Jack Blum, who led probes into the Iran-Contra drug connection and the CIA's favorite shadow bank during the 1980s, the Bank of Credit and Commerce (BCCI) toldBloomberg, "the theory is like a get-out-of-jail-free card for big banks."
"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."
Meanwhile as the bodies pile up, there's no jail time for executives and the assets of firms that could charitably be described as part of a "continuing criminal enterprise" haven't been seized; only a slap on the wrist and a promise to "do better next time."
Job losses in Gulf region could reach 100,000 or more
A July 19 report by Moody’s Analytics estimates that as many as 100,000 jobs and $7.4 billion could be lost in the Gulf region as a direct result of the BP oil spill. These numbers represent the high end of the estimated impact of the BP oil spill in the Gulf, according to the company.
This more pessimistic assessment assumes that that oil continues gushing and that President Obama’s new deepwater drilling moratorium continues through December. A more optimistic assessment, that the spill is completely halted within the next month and that none of the beaches on the Florida panhandle will be closed, leads the report to estimate that at least 17,000 jobs and $1.2 billion could be lost.
The economic impact of the oil spill, the report states, would be felt most heavily in Louisiana and Florida. Louisiana’s $3 billion fishing industry and Florida’s tourism industry, which reports nearly 70 million visitors yearly and $57 billion in revenues, both have been decimated as a direct result of the spill.
The Moody’s estimates, however, may significantly underestimate the economic impact of the spill. They do not include many of the secondary impacts and costs of the spill as it reverberates throughout the economy.
A June report by Dr. Sean Snaith, Director of the University of Central Florida Institute for Economic Competitiveness, estimated that in a “nightmare” scenario—a 50 percent drop in tourism from the Florida panhandle to the Keys—195,000 jobs could be lost and costs could be as high as $10 billion in the state of Florida alone.
In a more modest estimate, including a 10 percent drop in tourism, Snaith estimated 39,000 jobs lost and costs of $2.2 billion in the state of Florida.
Speaking to the WSWS, Snaith said that if the news that the spill has been stopped is true, the numbers could be closer to the more modest estimate from his report. “The negative impact on much of the panhandle,” he said, “has already been established. Much of the tourism revenue for the year in that area is lost.” Cities like Pensacola will be particularly hurt.
Asked about claims facility administrator Kenneth Feinberg’s decision to rule out settlement claims by those who have been “indirectly” affected by the spill, Snaith said that he is not surprised. The losses in industries that will be indirectly affected are difficult to quantify. “Individuals will have little to no legal recourse against BP, but class action suits may have more of a chance,” he added.
Feinberg has already warned fishermen in Louisiana against civil suits, saying that they will have greater luck going through the settlement process. Given the amount of claims that have been rejected and reduced due to strict documentation requirements, the high-powered attorneys BP will undoubtedly bring to the table, and the experience of those affected by the Exxon-Valdez spill, the civil route will offer little recourse for workers in the Gulf.
“Another area of the Florida’s economy that could be badly hurt,” Snaith said, “is real estate, though the data is still unclear.” Snaith said home values will likely face further decline. Florida’s real estate market has already been devastated by foreclosures—the state is second in the nation in foreclosures behind California—and steep drops in median home values.
Snaith concluded that much uncertainty still exists over how large an impact the spill will have on the lives of workers and the economy of the Gulf region.
Unemployment numbers in four of the five Gulf-region states have all risen since the spill began on April 20 (with Louisiana’s remaining even). Tourism and fishing would normally bring higher seasonal employment in much of the region. Economists, however, have warned that the official numbers don’t yet reveal the full impact of the spill.
The devastation of the Gulf is occurring in a region that has never recovered from the damage of Hurricane Katrina in 2005, and comes in the midst of the greatest economic crisis to hit the US since the Great Depression.
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