Part 3: AIG and the Linkage to the Drug Trade
Although federal authorities threatened Wachovia with criminal prosecution, the case never went to court. Despite its profits from money laundering, Wachovia suffered huge losses in 2008 as a result of the sub-prime fiasco, and was rescued by Wells Fargo for a reported $12.7 billion. The merger happened within days of Wells Fargo’s $25 billion federal bailout—which, notice, means that the US taxpayer footed the bill for the acquisition (and then some). In 2010, Wells Fargo settled with the US government on behalf of Wachovia by paying $160 million in fines and penalties. Wells Fargo agreed to upgrade its money laundering detection efforts; and, after a year’s probation, the federal government dropped all charges in March 2011. Although the $160 million fine was a hefty sum, it was still less than 2% of Wells Fargo’s reported earnings in 2009. Indeed, bank officials probably viewed the fine as just another cost of doing business.
Notes
[1] Gary Webb, Dark Alliance, Seven Stories Press, New York, 1998, p. 482.
[2] Peter Dale Scott and Jonathan Marshall, Cocaine Politics, University of California Press, Berkeley, 1991, p 57.
[3] Gary Webb, “Dark Alliance: The Story Behind the Crack Explosion,” San Jose Mercury News, August 1996. Series archived at http://www.narconews.com/darkalliance/drugs/start.htm
[4] Alexander Cockburn and Jeffrey St. Clair, Whiteout, Verso, New York, 1998, p 29.
[5] Ibid., p. 31.
[6] Dexter Filkins, Mark Mazetti and James Risen, “Brother of Afghan Leader Said to Be Paid by C.I.A.,” New York Times, October 27, 2009. Posted at http://www.nytimes.com/2009/10/28/world/asia/28intel.html?adxnnl=1&adxnnlx=1301436779-la8vOSwZTeQilE0VwwLONQ
[7] Dark Alliance, p. 471-472.
[8] Statement of Frederick P. Hitz, Inspector General CIA before the Permanent Select Committee on Intelligence, US House of Representatives, regarding investigation of allegations of connections between CIA and the Contras in drug trafficking to the US, March 16, 1998. Posted at http://www.fas.org/irp/congress/1998_hr/980316-ps.htm
[9] Dark Alliance, p 482.
[10] Mark Fritz, “The Secret (Insurance) Agent Men,” Los Angeles Times, September 22, 2000.
[11] David Schiff, “AIG’s Relationship with Three Starr Entities,” Schiff’s Insurance Observer, March 30, 2005.
[13] Ronald Shelp, Fallen Giant, John Wiley & Sons, Hoboken, 2006, p.10.
[14] Walter Isaacson, Kissinger: A Biography, New York, Simon & Schuster, 2005, pp. 739-40.
[16] David Schiff, “A Darkness on the Edge of Town,” Schiff’s Insurance Observer, October 1998.
[17] Ibid.
[18] Devon Leonard, “All I Want In LIfe is an Unfair Advantage,” Fortune, August 8, 2005, posted at http://money.cnn.com/magazines/fortune/fortune_archive/2005/08/08/8267642/index.htm
[19] David Schiff, “AIG, Audit Committees, Legends, and P/E Ratios,” Schiff’s Insurance Observer, July 25, 2002; also see Carrie Johnson and Dean Starkman, “Accountants Missed AIG Group’s Red Flags,” Washington Post, May 26, 2005.
[20] Kurt Eichenwald and Jenny Anderson, “How a Titan of Insurance Ran Afoul of the Government,” The New York Times, April 4, 2005.
[21] “All I want in LIfe is an Unfair Advantage.”
[22] David Schiff, “Spitzer sues Marsh: Bid Rigging, Fraud, Collusion,” Schiff’s Insurance Observer, October 15, 2004. Also see Spitzer’s press release, posted at http://www.ins.state.ny.us/press/2005/p0501311.htm
[23] Peter Lattman and Anupreeta Das, “Marsh & McLennan Sells Kroll for $1.3 Billion,” Wall Street Journal, June 8, 2010.
[25] “All I want in LIfe is an Unfair Advantage.”
[26] “Excerpts From Complaint Against A.I.G. by New York,” New York Times, May 27, 2005. Posted at http://query.nytimes.com/gst/fullpage.html?res=9A07E3D61039F934A15756C0A9639C8B63
[27] Ibid.
[28] Ibid.
[30] Timothy O’Brien and Jenny Anderson, “AIG Documents Said to be Altered,” New York Times, April 8, 2005.
[31] “All I want in LIfe is an Unfair Advantage.”
[32] Ron Shelp, Fallen Giant, John Wiley & Sons, Hoboken, 2006, p.173.
[33] http://lawprofessors.typepad.com/whitecollarcrime_blog/aig/
[34] “All I want in LIfe is an Unfair Advantage.”
[35] Andrew Simpson, “Greenberg: AIG’s Risky Subprime Activity ‘Exploded’ After He Left,” Insurance Journal, October 10, 2008.
[37] Elizabeth MacDonald, “American Inconscionable Group,” FOX Business, March 17, 2009. Posted at http://www.foxbusiness.com/markets/2009/03/17/american-inconscionable-group/
[38] “All I want in LIfe is an Unfair Advantage.”
[39] David Schiff, “AIG and the Art of Financial Prestidigitation,” Schiff’s Insurance Observer, April 4, 2005, p.3.
[40] http://www.fromthewilderness.com/free/ciadrugs/part_2.html
[41] Gary Webb, Dark Alliance, Seven Stories Press, New York, 1998.
[42] Bill Moushey, “Protected Witness,” Pittsburgh Post-Gazette, June 15, 1996. Posted at http://www.fear.org/carlos1.html
[43] Ibid.
[44] McCoy also pointed out in the same interview that Panama, once part of Columbia, is home to a miniature version of Wall Street. Panama City has a number of large banks, whose primary purpose is to launder money for Columbia drug lords. In short, the replacement of Noriega was an administrative move. The flow of drugs and drug money through Panama hardly paused, and may even have increased.
An Interview with Alfred McCoy by David Barsamian, conducted at University of Wisconsin-Madison, February 17,1990. Posted at http://www.druglibrary.org/schaffer/heroin/McCoy2.htm
[45] William Engdahl, Gods of Money, Engdahl Press, Wiesbaden, 2009, p. 272.
[46] To view a copy of the memo go to David Schiff, “Have We Got a Deal for You,” Emerson, Reid’s, March 1996, p. 7. Posted at http://www.insuranceobserver.com/PDF/1996/030196.pdf
[47] David Schiff, “Coral Re: AIG’s $1-Billion Secret,” Emerson, Reid’s, July 1996, pp. 10-13.
[48] The 1999 repeal legislation was known as the Gramm-Leach-Bliley Act.
[49] Matthew Leising and Roger Runningen, “Brooksley Born `Vindicated’ as Swap Rules Take Shape,” Bloomberg, November 13, 2008. Posted at http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aVYf8XDXiSZM&refer=home
[51] Mike Ruppert, Crossing the Rubicon, New Society Publishers, 2004, p.79.
[52] Rajeev Syal, “Drug money saved banks in global crisis, claims UN advisor,” Guardian (UK), December 13, 2009. Posted at http://www.guardian.co.uk/global/2009/dec/13/drug-money-banks-saved-un-cfief-claims
[53] Joshua Gallu and Donal Griffin, “SEC Says Prince, Rubin Knew of Losses on Assets at Suit’s Focus,” Bloomberg, September 9, 2008. Posted at http://www.bloomberg.com/news/2010-09-09/prince-rubin-knew-assets-at-focus-of-sec-claim-fueled-losses-agency-says.html
[54] Martha Graybow, “Investors accuse Citi execs of ‘suspicious’ trades,” Reuters, December 3, 2008. Posted at http://www.reuters.com/article/idUSTRE4B26JN20081203
Also see Zach Carter, “Why Robert Rubin and Citibank Execs Should Be in Deep Trouble,” Alternet, September 9, 2010.
[55] Michael Smith, “Banks Financing Mexico Gangs Admitted in Wells Fargo Deal,” Bloomberg, June 28, 2010. Posted at http://www.bloomberg.com/news/2010-06-29/banks-financing-mexico-s-drug-cartels-admitted-in-wells-fargo-s-u-s-deal.html
[56] Ed Vulliamy, “How a big US bank laundered billions from Mexico’s murderous drug gangs,” The Observer, April 3, 2011. Posted at http://www.guardian.co.uk/world/2011/apr/03/us-bank-mexico-drug-gangs
[57] Banks Financing Mexico Gangs Admitted in Wells Fargo Deal.”
[58] “How a big US bank laundered billions from Mexico’s murderous drug gangs,”
[59] Ibid.
[60] “Banks Financing Mexico Gangs Admitted in Wells Fargo Deal,”
