From the Tucson Sentinel:

The restrictions are in effect for the following state parks and State Trust and Arizona Department of Transportation lands:

• All State Trust Lands and Department of Transportation Lands located outside of municipalities within Cochise County, Santa Cruz County, Pima County, Pinal County south of the Gila River, Graham County south of the San Carlos Reservation, and Greenlee County south of the Apache-Sitgreaves National Forest.
• Manhattan Claims
• Clarence May Memorial Wildlife Area
• Sierra Vista Shooting Range
• White Water Draw Wildlife Area
• Willcox Playa Wildlife Area
• Yarbrough
• Cluff Ranch Wildlife Area
• Catalina State Park in Pima County
• Arivaca Lake and Land in Pima County
• Santa Rita Wildlife Area in Pima County
• Three Points Shooting Range in Pima County
• Tucson Mountain Wildlife Area in Pima County
• Kartchner Caverns State Park in Cochise County
• Roper Lake State Park in Graham County
• Picacho State Park in Pinal County
• Patagonia State Park in Santa Cruz County
• Sonoita Creek State Natural Area in Santa Cruz County
• San Rafael State Natural Area in Santa Cruz County

The BLM also has prohibited the off-road use of motor vehicles, except when parking in an area clear of vegetation within 10 feet of a roadway.

A violation of the fire prevention order could result in a fine of up to $1,000 or as much as 12 months in prison, the BLM said. Federal, state and local law enforcement and firefighters are exempt from the restrictions.

]]> http://bisbee.net/wp/cochise-county-news/fire-restrictions-in-southern-arizona-prohibit-fires-and-smoking-outdoors/feed 0 http://bisbee.net/wp/cochise-county-news/laundered-drug-money-rescued-banks-on-brink-of-collapse http://bisbee.net/wp/cochise-county-news/laundered-drug-money-rescued-banks-on-brink-of-collapse#comments Thu, 12 Apr 2012 20:19:59 +0000 Charles August http://bisbee.net/wp/?p=2068 American Banks helped launder drug money in order to provide liquidity during the 2008 financial meltdown.

…At the height of the 2008 banking crisis, Antonio Maria Costa, then head of the United Nations office on drugs and crime, said he had evidence to suggest the proceeds from drugs and crime were “the only liquid investment capital” available to banks on the brink of collapse. “Inter-bank loans were funded by money that originated from the drugs trade,” he said. “There were signs that some banks were rescued that way.”…

The dismal facts concerning this can be found at the Guardian.

More at Bisbee Net News:

How Banks Launder Drug Money Without Going to Jail

]]> http://bisbee.net/wp/cochise-county-news/laundered-drug-money-rescued-banks-on-brink-of-collapse/feed 0 http://bisbee.net/wp/bisbee-today/border-watch-groups-and-militias-disband-and-disperse-from-busts-and-infighting http://bisbee.net/wp/bisbee-today/border-watch-groups-and-militias-disband-and-disperse-from-busts-and-infighting#comments Mon, 09 Apr 2012 18:46:03 +0000 Charles August http://bisbee.net/wp/?p=2017 After years of emotional demonstrations, rallies, and interviews, the prominence of border watch groups and the nativist militias has diminished as a political force and now is fighting accusations of overt racism and anti-Semitism.

Tim Stellar wrote that the border watch groups and militias have gone from prominent demonstrations, border patrols, and Tea Party activism, to become virtually invisible in this year’s political season.

The Southern Poverty Law Center reports a sharp decline from border activists, and an increase in Tea Party organizations that appear less militant, and more active in politics and candidates. According to Mr. Stellar:

…The center began tracking another category, what it calls “nativist extremist” groups, after the Minuteman movement exploded in the mid-2000s. These groups distinguish themselves from regular anti-illegal-immigration opinion by directly confronting suspected illegal immigrants at the border, at day-labor centers or elsewhere, Beirich said.

The number of active groups in this category hit a peak of 319 in 2010 before declining to 184 last year, the center says.

Infighting, bad press and co-opting of the movement has driven its decline, Beirich said. Groups such as the Arizona-based Minuteman Civil Defense Corps, once the best known of this category, splintered and dissolved. The arrest of one-time Minuteman Shawna Forde, for murdering an Arivaca man and his daughter in 2009, also drove people away.

Most important, Beirich said, anti-illegal-immigrant actions were taken up by state legislatures and absorbed as a major concern by groups such as the tea parties and the Republican Party. Many people who once concerned themselves with border-watch activities moved on to the broader concerns of the tea-party movement, she said.

Another concern was safety as Mexico’s drug traffickers raised their level of violence, said Al Garza, a one-time leader of the Minuteman Civil Defense Corps.

“For anyone on this side to make a stand against them would be foolish,” he said.

Garza’s experience also traced the arc of the border-watch movement. He left the Minuteman Civil Defense Corps in 2009 to form a separate group called the Patriots Coalition but now informally consults with tea-party groups and others who share his concerns about the border and rule of law, Garza said…

Following several stories that refer to the alleged racism and anti-Semitism of Glenn Spencer, his history and associates, Mr. Spencer has threatened legal action against Luis Heredia, Executive Director of the Arizona Democratic Party. John Munger, an experienced Republican political operative is representing Mr. Spencer and has written a letter announcing legal action.

Glenn Spencer has been listed on the Southern Poverty Law Center website as an anti-immmigrant, “vitriolic Mexican-basher and self-appointed guardian of the border who may have done more than anyone to spread the myth of a secret Mexican conspiracy to reconquer the Southwest (an effort supposedly known as “la reconquista”). He is the president and founder of American Border Patrol and is best known for his effort to establish a “shadow Border Patrol” by using citizen patrols and various sensors and surveillance equipment to track the movement of migrants crossing the Mexico-Arizona border...”

Earlier in March, the Phoenix New Times printed this story entitled:

Glenn Spencer, Nativist Anti-Semite, Lectures State Senate Border Security Committee

The Phoenix Times logged the history of Spencer’s relationship with radical border activist Shawna Forde, now sentenced to death for murdering a father and his daughter during a home invasion robbery during the height of the Tea Party and Arizona militia’s border demonstrations and vigilante styled patrols. According to Stephen Lemon:

…Spencer was linked to minutewoman Shawna Forde, who was convicted and sentenced to death in 2011 for her part in the murders of 9 year-old Brisenia Flores and her father Raul during a botched 2009 home invasion robbery at the Flores home in Arivaca.

Forde had lived on Spencer’s property near the border, and she visited Spencer’s home as she was being pursued by law enforcement. Spencer allowed her to use her laptop at his abode. She was arrested by the FBI shortly after leaving his property.

Spencer’s been vocal in his dislike of both Mexicans and Jews. In a 2001 statement on his American Patrol website, he wrote the following, according to the Southern Poverty Law Center:

“Our country is being invaded by Mexico with hostile intentions. When it blows up, they can’t say we didn’t tell them, when the blood starts flowing on the border and in L.A.”

His anti-Semitism is also well-documented. In a Jew-bashing screed still on his website entitled “Speaking the Unspeakable: Is Jew-Controlled Hollywood Brainwashing Americans?” he discusses how Jews supposedly control the entertainment industry and marks how too many of them, in his opinion, support illegal immigration.

Spencer opines:

“I have many Jewish friends and they have been extremely instrumental in fighting illegal immigration. I fear, however, that this small handful of patriotic Americans are far outnumbered by liberal Jews who now have total control over our media. With my memories of the Hollywood elite, I think it is now time that Americans be forewarned that they are probably subject to clever pro-illegal alien propaganda every time they watch something produced in Hollywood.”…

On February 22, Luis Heredia issued this press release:

“It is appalling that the Tea Party leadership of the Arizona Legislature found it appropriate to call an avowed anti-Semite and purported racist to testify before the Senate this morning. According to the Southern Poverty Law Center, Spencer, the leader of a vigilante militia known as the ‘American Border Patrol,’ is the author of articles such as ‘Is Jew-Controlled Hollywood Brainwashing America?’ who once opined that ‘patriotic Americans are far outnumbered by liberal Jews who now have total control over our media.’ It is a disgrace that the Republicans are wasting taxpayer dollars and sullying the name of Arizona with this charade.”

“Perhaps most disappointing of all is Attorney General Tom Horne, who made a presentation to the committee just before Spencer but said nothing as Democratic senators protested. The fact that the chief law enforcement officer of this state would say nothing about a hearing that sought to legitimize a notorious militia leader is a shocking dereliction of duty. It’s vintage Tom Horne: advocate for public safety until it gets in the way of your radical ideology, and at that point, look the other way.”

“It’s no surprise that even conservatives now disapprove of the extremist Tea Party Legislature. Sylvia Allen and the Republicans owe all Arizonans an apology for wasting taxpayer resources on promoting such a divisive figure.”

Without bothering to research  the rich history of Glenn Spencer’s alleged anti-Semitic and racist rants and associations, John Munger, representing the border activist, wrote a legal letter to Luis Heredia, threatening legal actions and demanding a retraction of Mr. Heredia’s press release. Mr. Munger does not like references to anti-Semitism and the characterization that the American Border Patrol is a ‘vigilante militia.’  According to Mr. Munger, ‘vigilante’ is a pejorative term and that the American Border Patrol has no weapons and conducts no paramilitary activities.

 Dear Mr. Heredia:

This office represents Mr. Glenn Spencer who resides in Cochise County, Arizona. It has come to our attention that, on behalf of the Arizona Democratic Party, you have published, statewide, certain defamatory statements about Mr. Spencer. On March l, 2012, you were quoted in several publications as stating that Mr. Spencer is “an avowed anti-Semite and purported racist.” You have also stated that he is the leader of a “vigilante militia known as the American Border Patrol.” These statements are false and defamatory. As for the allegation that Mr. Spencer is a “avowed anti-Semite and purported racist” your sole evidence of that position is apparently reference to an article Mr. Spencer published which you cite. Any fair reading of that piece however, makes it clear that Mr. Spe11cer’s comments were not anti~Semite but were anti-liberal. Mr. Spencer pointed out in that article that “I have many Jewish friends and they have been extremely instrumental in fighting illegal immigration.” Mr.

Spencer points you to the fact that, in that article, he did not cite problems with Jewish people, per se, but cited problems with liberals who happen to be Jewish. Specifically he referred to an article called “How Jewish is Hollywood?” that was published in the Los Angeles Times and written by a Joel Stein on December 19, 2008. Mr. Stein made the point that he believes Hollywood is controlled by members of the Jewish community. I do not know whether that is a true statement or not. But I do know that Mr. Stein alleged that as a fact, a11d that Mr. Spencer’s comments were in response to Mr. Stein’s allegations that that fact was true. From the basic point made by Mr. Stein, Mr. Spencer simply elaborated that that community controlling Hollywood was also, based upon his personal experience, very liberal and in some cases so far to the left that they were politically prejudiced and operated contrary to a fair perception of American interests, especially in the area of illegal immigration. Thus it was Mr. Stein, not Mr. Spencer, who made the allegations of control of the Jewish community in Hollywood. Mr. Spencer’s only contribution was that this group was, from his personal knowledge, often (but not always) an extremist group of very liberal people.

Mr. Spencer is adamant that there is simply nothing in what Mr. Spencer said that indicates in any manner whatsoever that he is an anti~Semite. Instead, the article simply recited that he is anti-liberal. Your statements to the contrary are untrue and defamatory and must be rescinded immediately.

Moreover, and in any case, Mr. Spencer is not an anti-Semite and statements to the contrary are false and defamatory even if there were a dispute over the meaning of a particular article he wrote. Mr. Spencer, in fact, has close friends, as well as family, who are Jewish and whom he loves and admires. Statements that he is an anti~Semite are directly contradicted by these clear facts, and are defamatory.

Further, your comment that the American Border Patrol is “a vigilante militia” is also untrue and defamatory. There is no basis in fact for that allegation whatsoever. The term “vigilante” is a purposeful pejorative and misrepresentation of the activities and interests of the American Border Patrol organization and therefore a purposeful misrepresentation of Mr. Spencer’s interests and activities. That organization does not attempt to operate in any manner to enforce the law outside law enforcement authorities, as a vigilante group would do. Moreover, in no sense is it a militia — it has no weapons, and conducts no paramilitary activities. In particular, Mr. Spencer and his organization have often spoken out against vigilante and militia groups, including The Minutemen and its leader, Chris Simcox. Mr. Spencer has decried the use of force at the border or enforcement of the law other than by law enforcement agencies. See http://americanpatrol.com/FEATURES /03 0320-ABP-REJECT-MILITIA~IDEA/030320gFeature.html. Thus, your statements that he is a member of or supports, vigilante militia groups are untrue and defamatory and must be rescinded by you.

Mr. Spencer understands that you do not agree with him on his position on the issues of the day. That does not give you a right, however, to defame him with untrue statements that he is an anti-Semite or that he is a member of a vigilante militia.

Mr. Spencer demands that you retract those statements formally and publicly by issuing a letter of retraction to us as well as to the press generally in Arizona. Mr. Spencer reserves all rights to take further action against you if the comments are not immediately retracted both personally, publicly, and in a manner acceptable to him. In that event we intend to put you to your proof that he is what you have alleged, and we will seek damages on your failure to do so.

Please provide us your response Within ten (10) days.

Very truly yours,

John F. Munger

Tim Stellar and the Arizona Daily Star relays these comments regarding this legal action:

He goes on to criticize Heredia’s claim that Spencer is a “notorious militia leader.” The Star has reported on Spencer’s activities through the years, and indeed they have focused largely on using technology to show apparent insecurity along the Mexican border, not armed patrolling of the border.

In any case, Heredia told the Phoenix New Times he is declining the invitation to retract his statements.

“I stand by my statement as it was released,” Heredia told me today. “The number one thing is, why is the Tea Party Senate inviting a person like Glenn Spencer. He does not deserve the attention he was receiving.”

Update: This afternoon, Munger called me back and said Spencer is being unfairly maligned as racist in a way that is too common these days.

“It’s got to the point where anybody who disagrees with anybody else is called a racist,” Munger said. “It just needs to stop.”

“You can have a view that you want to control the border. That doesn’t make you racist.”

Of course, the accusations of racism against Spencer aren’t as simple as that. Refer to the SPLC bio or New Times story above, along with the American Patrol website, for more details and to make up your own mind.

Glenn Spencer has hunted humans for over a decade, and he has a company dedicated to tracking and hunting humans: Border Technology, Inc.

Outtake from the Farewell Concert of the legendary Cream. Live at the Royal Albert Hall, 26. November 1968.

Hey now, baby
Get into my big black car
Hey now, baby
Get into my big black car
I want to just show you
What my politics are

I’m a political man
And I practice what I preach
I’m a political man
And I practice what I preach
So don’t deny me, baby
Not while you’re in my reach

I support the left
Though I’m leaning, leaning to the right
I support the left
Though I’m leaning to the right
But I’m just not there
When it’s coming to a fight

Hey now, baby
Get into my big black car
Hey now, baby
Get into my big black car
I want to just show you
What my politics are

Some people say a man is made outta mud.
But, a poor man’s made outta muscle and blood.
Muscle and blood and skin and bones.
With a mind that’s weak and a back that’s strong.

You load sixteen tons what do you get?
You get another day older and deeper in debt.
Saint Peter don’t you call me ’cause I can’t go.
I owe my soul to the company store.

Well, I was born one mornin’ when the sun didn’t shine.
I picked up my shovel and I walked to the mine.
I loaded sixteen tons of number nine coal.
And the straw boss said “Well, bless my soul,

“He loaded sixteen tons and what do you get?
Another day older and deeper in debt.
Saint Peter don’t you call me ’cause I can’t go.
I owe my soul to the company store.”

I was born one morning in the drizzlin’ rain
Fightin’ and trouble are my middle name
I was raised in the canebreak by an’ ol’ mama hound
Ain’t no high-tone woman gonna push me around.

You load sixteen tons and what do you get?
You get another day older and deeper in debt.
Saint Peter don’t you call me ’cause I can’t go.
I owe my soul to the company store.

Well, If you see me comin’, you better step aside.
A lotta men didn’t, and a lotta men died.
One fist of iron and the other one of steel,
If the right one don’t get you, then the left one will.

You load sixteen tons and what do you get?
You get another day older and deeper in debt.
Saint Peter don’t you call me ’cause I can’t go.
I owe my soul to the company store.

Wikileaks says that, “On Monday February 27th, 2012, WikiLeaks began publishing The Global Intelligence Files, over five million e-mails from the Texas headquartered “global intelligence” company Stratfor.

The e-mails date between July 2004 and late December 2011. They reveal the inner workings of a company that fronts as an intelligence publisher, but provides confidential intelligence services to large corporations, such as Bhopal’s Dow Chemical Co., Lockheed Martin, Northrop Grumman, Raytheon and government agencies, including the US Department of Homeland Security, the US Marines and the US Defense Intelligence Agency. The emails show Stratfor’s web of informers, pay-off structure, payment laundering techniques and psychological methods.”

Excerpts follow:

Email-ID 1115826

Date 2011-05-05 22:12:26

From friedman**.*.net

To kevin.stech*stratfor.com

I have a cost. It is money spent on something and that has a profit.

Sent via BlackBerry by AT&T

From: “Kevin Stech”

Date: Thu, 5 May 2011 15:07:13 -0500 (CDT)

To: ; ‘Karen Hooper’;

‘Sean Noonan’; ‘Secure List’

Subject: RE: US Bank – Dirty Money

What do you mean by “flow through effect”

From: George Friedman [mailto:friedman@att.blackberry.net] Sent: Thursday, May 05, 2011 15:05

To: Kevin Stech; Karen Hooper; Sean Noonan; Secure List Subject: Re: US Bank – Dirty Money

Those numbers assume a profit margin of 25 percent which is absurdly low.

Moreover it fails to take into account that the primary cost is labor which has a massive flow through effect.

The likely profit margin on drugs is about 80 percent for the primary transporter. No one is going to risk his life on a 25 percent margin deal.

Youre better investing in other things without risk.

Dying for a 25 percent return doesnt happen. Smuggle drugs is dramarically more profitable.

Sent via BlackBerry by AT&T

From: “Kevin Stech”

Date: Thu, 5 May 2011 14:58:49 -0500 (CDT)

To: ‘Karen Hooper’; ;

Subject: RE: US Bank – Dirty Money

The $40 bn estimate is revenues, not profits. The common profit estimates you see are in the $10 bn range.

From: Karen Hooper [mailto:hooper*stratfor.com]

Sent: Thursday, May 05, 2011 12:30

To: sean.noonan*stratfor.com; secure*stratfor.com Subject: Re: US Bank – Dirty Money

WF bought wachovia, and yeah, the case was settled last year with no criminal charges pursued. Sounds like Fred’s contact is doing a follow up investigation. I’m less interested in the laundering so much as the size of it and where it ends up. The exit of that much money from Mexico is no small thing. We’re never going to get a full picture of how the drug trade affects the financial system in Mex, but it’s worth tracking the pieces.

Also, the $40 bn estimate of drug profits has always seemed low, and these data points reinforce that.

Sent from my iPhone

On May 5, 2011, at 13:11, “Sean Noonan” wrote:

Btw, if this is new it is wells fargo not wachovia.

WF already paid fines for some of these shenanigans

From: Karen Hooper

Date: Thu, 5 May 2011 11:55:57 -0500 (CDT)

To: ‘Secure List’

Subject: Re: US Bank – Dirty Money

Two different things here: 1) The Wachovia bust detailed in the article I sent out said that Wachovia handled $378.4 bn in transfers from casas de cambio (CDC) in 2004-2007 that they’re calling shady (though they haven’t verified just HOW shady all of it is). 2) Fred’s contact says his contact has seen $70 bn laundered as a part of an ongoing investigation, but we don’t know yet know over what timeframe.

Could be that the CDC transfers are majority legitimate, but why transfer cash TO the United States? Usually the flow of legitimate remittances goes the other way, and that’s the amount the DEA case sanctioned Wachovia for failing to properly monitor under money laundering laws.

I’ll try to dig up more details from the Wachovia investigation.

On 5/5/11 12:43 PM, scott stewart wrote:

Wait, so it was way more than $70B?

Maybe not all of that was cartel cash…

From: Karen Hooper [mailto:hooper*stratfor.com]

Sent: Thursday, May 05, 2011 12:24 PM

To: ‘Secure List’

Subject: Re: US Bank – Dirty Money

Right. What i’m saying is that Wachovia ALONE handled ~$125 billion per year in shady cash from Mexico from 2004-2007. And that doesn’t even count the money that stayed in cash, went to the Bahamas or stayed in Mexico.

That makes the $40 bn per year stat seem pretty miniscule, no?

On 5/5/11 12:00 PM, scott stewart wrote:

That is $40B a year. Not all of it was laundered by one institution.

Some is still physically hauled as bulk cash.

From: Karen Hooper [mailto:hooper*stratfor.com]

Sent: Thursday, May 05, 2011 11:45 AM

To: Secure List

Subject: Re: US Bank – Dirty Money

Any word on the rate of flow? $70 bn is much bigger than the $40 billion estimates that we’ve seen over the years.

The volume of cash handled in the Wachovia case also suggests something on the order of $125 bn per year being laundered by a single method.

That’s a LOT of money, and a lot more than we’ve discussed.

From: burton*stratfor.com

To: “Karen Hooper” , “Secure List”

Sent: Thursday, May 5, 2011 11:25:50 AM

Subject: Re: US Bank – Dirty Money

The money laundered was new, framed as exposing next week or words to that effect.

Sent via BlackBerry by AT&T

From: Karen Hooper

Date: Thu, 5 May 2011 09:39:12 -0500 (CDT)

To: Secure List

Subject: Re: US Bank – Dirty Money

Over what timeframe did your contact handle that $70 billion?

On 5/5/11 10:31 AM, burton*stratfor.com wrote:

The GOM has hired the ex-CIA group to find additional monies laundered by Wachovia. Same group are being used against British Tobacco.

Sent via BlackBerry by AT&T

From: Karen Hooper

Date: Thu, 5 May 2011 09:27:48 -0500 (CDT)

To: Secure List

Subject: Re: US Bank – Dirty Money

Here’s a good one:

How a big US bank laundered billions from Mexico’s murderous drug gangs Ed Vulliamy

The Observer, Sunday 3 April 2011

http://www.guardian.co.uk/world/2011/apr/03/us-bank-mexico-drug-gangs

On 10 April 2006, a DC-9 jet landed in the port city of Ciudad del Carmen, on the Gulf of Mexico, as the sun was setting. Mexican soldiers, waiting to intercept it, found 128 cases packed with 5.7 tons of cocaine, valued at $100m. But something else – more important and far-reaching – was discovered in the paper trail behind the purchase of the plane by the Sinaloa narco-trafficking cartel.

During a 22-month investigation by agents from the US Drug Enforcement Administration, the Internal Revenue Service and others, it emerged that the cocaine smugglers had bought the plane with money they had laundered through one of the biggest banks in the United States: Wachovia, now part of the giant Wells Fargo.

The authorities uncovered billions of dollars in wire transfers, traveller’s cheques and cash shipments through Mexican exchanges into Wachovia accounts. Wachovia was put under immediate investigation for failing to maintain an effective anti-money laundering programme. Of special significance was that the period concerned began in 2004, which coincided with the first escalation of violence along the US-Mexico border that ignited the current drugs war.

Criminal proceedings were brought against Wachovia, though not against any individual, but the case never came to court. In March 2010, Wachovia settled the biggest action brought under the US bank secrecy act, through the US district court in Miami. Now that the year’s “deferred prosecution” has expired, the bank is in effect in the clear.

It paid federal authorities $110m in forfeiture, for allowing transactions later proved to be connected to drug smuggling, and incurred a $50m fine for failing to monitor cash used to ship 22 tons of cocaine.

More shocking, and more important, the bank was sanctioned for failing to apply the proper anti-laundering strictures to the transfer of $378.4bn – a sum equivalent to one-third of Mexico’s gross national product – into dollar accounts from so-called casas de cambio (CDCs) in Mexico, currency exchange houses with which the bank did business.

“Wachovia’s blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations,” said Jeffrey Sloman, the federal prosecutor. Yet the total fine was less than 2% of the bank’s $12.3bn profit for 2009. On 24 March 2010, Wells Fargo stock traded at $30.86 – up 1% on the week of the court settlement.

The conclusion to the case was only the tip of an iceberg, demonstrating the role of the “legal” banking sector in swilling hundreds of billions of dollars – the blood money from the murderous drug trade in Mexico and other places in the world – around their global operations, now bailed out by the taxpayer.

At the height of the 2008 banking crisis, Antonio Maria Costa, then head of the United Nations office on drugs and crime, said he had evidence to suggest the proceeds from drugs and crime were “the only liquid investment capital” available to banks on the brink of collapse.

“Inter-bank loans were funded by money that originated from the drugs trade,” he said. “There were signs that some banks were rescued that way.”

Wachovia was acquired by Wells Fargo during the 2008 crash, just as Wells Fargo became a beneficiary of $25bn in taxpayers’ money.

Wachovia’s prosecutors were clear, however, that there was no suggestion Wells Fargo had behaved improperly; it had co-operated fully with the investigation. Mexico is the US’s third largest international trading partner and Wachovia was understandably interested in this volume of legitimate trade.

Jose Luis Marmolejo, who prosecuted those running one of the casas de cambio at the Mexican end, said: “Wachovia handled all the transfers. They never reported any as suspicious.”

“As early as 2004, Wachovia understood the risk,” the bank admitted in the statement of settlement with the federal government, but, “despite these warnings, Wachovia remained in the business”. There is, of course,the legitimate use of CDCs as a way into the Hispanic market. In 2005the World Bank said that Mexico was receiving $8.1bn in remittances.

During research into the Wachovia Mexican case, the Observer obtained documents previously provided to financial regulators. It emerged that the alarm that was ignored came from, among other places, London, as a result of the diligence of one of the most important whistleblowers of our time. A man who, in a series of interviews with the Observer, adds detail to the documents, laying bare the story of how Wachovia was at the centre of one of the world’s biggest money-laundering operations.

Martin Woods, a Liverpudlian in his mid-40s, joined the London office of Wachovia Bank in February 2005 as a senior anti-money laundering officer. He had previously served with the Metropolitan police drug squad. As a detective he joined the money-laundering investigation team of the National Crime Squad, where he worked on the British end of the Bank of New York money-laundering scandal in the late 1990s.

Woods talks like a police officer – in the best sense of the word:punctilious, exact, with a roguish humour, but moral at the core. He was an ideal appointment for any bank eager to operate a diligent and effective risk management policy against the lucrative scourge of high finance: laundering, knowing or otherwise, the vast proceeds of criminality, tax-evasion, and dealing in arms and drugs.

Woods had a police officer’s eye and a police officer’s instincts – not those of a banker. And this influenced not only his methods, but his mentality. “I think that a lot of things matter more than money – and that marks you out in a culture which appears to prevail in many of the banks in the world,” he says.

Woods was set apart by his modus operandi. His speciality, he explains,was his application of a “know your client”, or KYC, policing strategy to identifying dirty money. “KYC is a fundamental approach to anti-money laundering, going after tax evasion or counter-terrorist financing. Who are your clients? Is the documentation right? Good, responsible banking involved always knowing your customer and it still does.”

When he looked at Wachovia, the first thing Woods noticed was a deficiency in KYC information. And among his first reports to his superiors at the bank’s headquarters in Charlotte, North Carolina, were observations on a shortfall in KYC at Wachovia’s operation in London,which he set about correcting, while at the same time implementing what was known as an enhanced transaction monitoring programme, gathering more information on clients whose money came through the bank’s offices in the City, in sterling or euros. By August 2006, Woods had identified a number of suspicious transactions relating to casas de cambio customers in Mexico.

Primarily, these involved deposits of traveller’s cheques in euros. They had sequential numbers and deposited larger amounts of money than any innocent travelling person would need, with inadequate or no KYC information on them and what seemed to a trained eye to be dubious signatures. “It was basic work,” he says. “They didn’t answer the obvious questions: ‘Is the transaction real, or does it look synthetic? Does the traveller’s cheque meet the protocols? Is it all there, and if not, why not?’”

Woods discussed the matter with Wachovia’s global head of anti-money laundering for correspondent banking, who believed the cheques could signify tax evasion. He then undertook what banks call a “look back” at previous transactions and saw fit to submit a series of SARs, or suspicious activity reports, to the authorities in the UK and his superiors in Charlotte, urging the blocking of named parties and large series of sequentially numbered traveller’s cheques from Mexico. He issued a number of SARs in 2006, of which 50 related to the casas decambio in Mexico. To his amazement, the response from Wachovia’s Miami office, the centre for Latin American business, was anything but supportive – he felt it was quite the reverse.

As it turned out, however, Woods was on the right track. Wachovia’s business in Mexico was coming under closer and closer scrutiny by US federal law enforcement. Wachovia was issued with a number of subpoenas for information on its Mexican operation. Woods has subsequently been informed that Wachovia had six or seven thousand subpoenas. He says this was “An absurd number. So at what point does someone at the highest level not get the feeling that something is very, very wrong?”

In April and May 2007, Wachovia – as a result of increasing interest and pressure from the US attorney’s office – began to close its relationship with some of the casas de cambio. But rather than launch an internal investigation into Woods’s alerts over Mexico, Woods claims Wachovia hung its own money-laundering expert out to dry. The records show that during 2007 Woods “continued to submit more SARs related to the casas de cambio”.

In July 2007, all of Wachovia’s remaining 10 Mexican casa de cambio clients operating through London suddenly stopped doing so. Later in2007, after the investigation of Wachovia was reported in the US financial media, the bank decided to end its remaining relationships with the Mexican casas de cambio globally. By this time, Woods says, he found his personal situation within the bank untenable; while the bank acted on one level to protect itself from the federal investigation into its shortcomings, on another, it rounded on the man who had been among the first to spot them.

On 16 June Woods was told by Wachovia’s head of compliance that his latest SAR need not have been filed, that he had no legal requirement to investigate an overseas case and no right of access to documents held overseas from Britain, even if they were held by Wachovia.

Woods’s life went into freefall. He went to hospital with a prolapsed disc, reported sick and was told by the bank that he not done so in the appropriate manner, as directed by the employees’ handbook. He was off work for three weeks, returning in August 2007 to find a letter from the bank’s compliance managing director, which was unrelenting in its tone and words of warning.

The letter addressed itself to what the manager called “specific examples of your failure to perform at an acceptable standard”. Woods,on the edge of a breakdown, was put on sick leave by his GP; he was later given psychiatric treatment, enrolled on a stress management course and put on medication.

Late in 2007, Woods attended a function at Scotland Yard where colleagues from the US were being entertained. There, he sought out a representative of the Drug Enforcement Administration and told him about the casas de cambio, the SARs and his employer’s reaction. The Federal Reserve and officials of the office of comptroller of currency in Washington DC then “spent a lot of time examining the SARs” that had been sent by Woods to Charlotte from London.

“They got back in touch with me a while afterwards and we began to put the pieces of the jigsaw together,” says Woods. What they found was – as Costa says – the tip of the iceberg of what was happening to drug money in the banking industry, but at least it was visible and it had a name: Wachovia.

In June 2005, the DEA, the criminal division of the Internal Revenue Service and the US attorney’s office in southern Florida began investigating wire transfers from Mexico to the US. They were traced back to correspondent bank accounts held by casas de cambio at Wachovia.

The CDC accounts were supervised and managed by a business unit of Wachovia in the bank’s Miami offices.

“Through CDCs,” said the court document, “persons in Mexico can use hard currency and … wire transfer the value of that currency to US bank accounts to purchase items in the United States or other countries. The nature of the CDC business allows money launderers the opportunity tomove drug dollars that are in Mexico into CDCs and ultimately into the US banking system.

“On numerous occasions,” say the court papers, “monies were deposited into a CDC by a drug-trafficking organisation. Using false identities,the CDC then wired that money through its Wachovia correspondent bank accounts for the purchase of airplanes for drug-trafficking organisations.” The court settlement of 2010 would detail that “nearly$13m went through correspondent bank accounts at Wachovia for the purchase of aircraft to be used in the illegal narcotics trade. From these aircraft, more than 20,000kg of cocaine were seized.”

All this occurred despite the fact that Wachovia’s office was in Miami,designated by the US government as a “high-intensity money laundering and related financial crime area”, and a “high-intensity drug trafficking area”. Since the drug cartel war began in 2005, Mexico had been designated a high-risk source of money laundering.

“As early as 2004,” the court settlement would read, “Wachovia understood the risk that was associated with doing business with the Mexican CDCs. Wachovia was aware of the general industry warnings. As early as July 2005, Wachovia was aware that other large US banks were exiting the CDC business based on [anti-money laundering] concerns … despite these warnings, Wachovia remained in business.”

On 16 March 2010, Douglas Edwards, senior vice-president of Wachovia Bank, put his signature to page 10 of a 25-page settlement, in which the bank admitted its role as outlined by the prosecutors. On page 11, he signed again, as senior vice-president of Wells Fargo. The documents show Wachovia providing three services to 22 CDCs in Mexico: wire transfers, a “bulk cash service” and a “pouch deposit service”, to accept “deposit items drawn on US banks, eg cheques and traveller’s cheques”, as spotted by Woods.

“For the time period of 1 May 2004 through 31 May 2007, Wachovia processed at least $$373.6bn in CDCs, $4.7bn in bulk cash” – a total of more than $378.3bn, a sum that dwarfs the budgets debated by US state and UK local authorities to provide services to citizens.

The document gives a fascinating insight into how the laundering of drug money works. It details how investigators “found readily identifiable evidence of red flags of large-scale money laundering”. There were“structured wire transfers” whereby “it was commonplace in the CDC accounts for round-number wire transfers to be made on the same day or in close succession, by the same wire senders, for the … same account”.

Over two days, 10 wire transfers by four individuals “went though Wachovia for deposit into an aircraft broker’s account. All of the transfers were in round numbers. None of the individuals of business that wired money had any connection to the aircraft or the entity that allegedly owned the aircraft. The investigation has further revealed that the identities of the individuals who sent the money were false and that the business was a shell entity. That plane was subsequently seized with approximately 2,000kg of cocaine on board.”

Many of the sequentially numbered traveller’s cheques, of the kind dealt with by Woods, contained “unusual markings” or “lacked any legible signature”. Also, “many of the CDCs that used Wachovia’s bulk cash service sent significantly more cash to Wachovia than what Wachovia had expected. More specifically, many of the CDCs exceeded their monthly activity by at least 50%.”

Recognising these “red flags”, the US attorney’s office in Miami, the IRS and the DEA began investigating Wachovia, later joined by FinCEN,one of the US Treasury’s agencies to fight money laundering, while the office of the comptroller of the currency carried out a parallel investigation. The violations they found were, says the document,“serious and systemic and allowed certain Wachovia customers to launder millions of dollars of proceeds from the sale of illegal narcotics through Wachovia accounts over an extended time period. The investigation has identified that at least $110m in drug proceeds were funnelled through the CDC accounts held at Wachovia.”

The settlement concludes by discussing Wachovia’s “considerable co-operation and remedial actions” since the prosecution was initiated,after the bank was bought by Wells Fargo. “In consideration of Wachovia’s remedial actions,” concludes the prosecutor, “the United States shall recommend to the court … that prosecution of Wachovia on the information filed … be deferred for a period of 12 months.”

But while the federal prosecution proceeded, Woods had remained out in the cold. On Christmas Eve 2008, his lawyers filed tribunal proceedings against Wachovia for bullying and detrimental treatment of a whistleblower. The case was settled in May 2009, by which time Woods felt as though he was “the most toxic person in the bank”. Wachovia agreed to pay an undisclosed amount, in return for which Woods left the bank and said he would not make public the terms of the settlement.

After years of tribulation, Woods was finally formally vindicated,though not by Wachovia: a letter arrived from John Dugan, the comptroller of the currency in Washington DC, dated 19 March 2010 -three days after the settlement in Miami. Dugan said he was “writing to personally recognise and express my appreciation for the role you played in the actions brought against Wachovia Bank for violations of the bank secrecy act … Not only did the information that you provided facilitate our investigation, but you demonstrated great personal courage and integrity by speaking up. Without the efforts of individuals like you, actions such as the one taken against Wachovia would not be possible.”

The so-called “deferred prosecution” detailed in the Miami document is a form of probation whereby if the bank abides by the law for a year, charges are dropped. So this March the bank was in the clear. The week that the deferred prosecution expired, a spokeswoman for Wells Fargo said the parent bank had no comment to make on the documentation pertaining to Woods’s case, or his allegations. She added that there was no comment on Sloman’s remarks to the court; a provision in the settlement stipulated Wachovia was not allowed to issue public statements that contradicted it.

But the settlement leaves a sour taste in many mouths – and certainly in Woods’s. The deferred prosecution is part of this “cop-out all round”, he says. “The regulatory authorities do not have to spend any more time on it, and they don’t have to push it as far as a criminal trial. They just issue criminal proceedings, and settle. The law enforcement people do what they are supposed to do, but what’s the point? All those people dealing with all that money from drug-trafficking and murder, and no one goes to jail?”

One of the foremost figures in the training of anti-money laundering officers is Robert Mazur, lead infiltrator for US law enforcement of the Colombian Medellin cartel during the epic prosecution and collapse of the BCCI banking business in 1991 (his story was made famous by his memoir, The Infiltrator, which became a movie).

Mazur, whose firm Chase and Associates works closely with law enforcement agencies and trains officers for bank anti-money laundering,cast a keen eye over the case against Wachovia, and he says now that “the only thing that will make the banks properly vigilant to what is happening is when they hear the rattle of handcuffs in the boardroom”.

Mazur said that “a lot of the law enforcement people were disappointed to see a settlement” between the administration and Wachovia. “But I know there were external circumstances that worked to Wachovia’s benefit, not least that the US banking system was on the edge of collapse.”

What concerns Mazur is that what law enforcement agencies and politicians hope to achieve against the cartels is limited, and falls short of the obvious attack the US could make in its war on drugs: go after the money. “We’re thinking way too small,” Mazur says. “I train law enforcement officers, thousands of them every year, and they say tome that if they tried to do half of what I did, they’d be arrested. But I tell them: ‘You got to think big. The headlines you will be reading in seven years’ time will be the result of the work you begin now.’ With BCCI, we had to spend two years setting it up, two years doing undercover work, and another two years getting it to trial. If they want  to do something big, like go after the money, that’s how long it takes.”

But Mazur warns: “If you look at the career ladders of law enforcement,there’s no incentive to go after the big money. People move every two to three years. The DEA is focused on drug trafficking rather than money laundering. You get a quicker result that way – they want to get the traffickers and seize their assets. But this is like treating a sick plant by cutting off a few branches – it just grows new ones. Going after the big money is cutting down the plant – it’s a harder door to knock on, it’s a longer haul, and it won’t get you the short-term riches.”

The office of the comptroller of the currency is still examining whether individuals in Wachovia are criminally liable. Sources at FinCEN say that a so-called “look-back” is in process, as directed by the settlement and agreed to by Wachovia, into the $378.4bn that was not directly associated with the aircraft purchases and cocaine hauls, but neither was it subject to the proper anti-laundering checks. A FinCEN source says that $20bn already examined appears to have “suspicious origins”. But this is just the beginning.

Antonio Maria Costa, who was executive director of the UN’s office on drugs and crime from May 2002 to August 2010, charts the history of the contamination of the global banking industry by drug and criminal money since his first initiatives to try to curb it from the European commission during the 1990s. “The connection between organised crime and financial institutions started in the late 1970s, early 1980s,” he says,“when the mafia became globalised.”

Until then, criminal money had circulated largely in cash, with the authorities making the occasional, spectacular “sting” or haul. During Costa’s time as director for economics and finance at the EC in Brussels, from 1987, inroads were made against penetration of banks by criminal laundering, and “criminal money started moving back to cash,out of the financial institutions and banks. Then two things happened:the financial crisis in Russia, after the emergence of the Russian mafia, and the crises of 2003 and 2007-08.

“With these crises,” says Costa, “the banking sector was short of liquidity, the banks exposed themselves to the criminal syndicates, who had cash in hand.”

Costa questions the readiness of governments and their regulatory structures to challenge this large-scale corruption of the global economy: “Government regulators showed what they were capable of when the issue suddenly changed to laundering money for terrorism – on that,they suddenly became serious and changed their attitude.”

Hardly surprising, then, that Wachovia does not appear to be the end of the line. In August 2010, it emerged in quarterly disclosures by HSBC that the US justice department was seeking to fine it for anti-money laundering compliance problems reported to include dealings with Mexico.

“Wachovia had my resume, they knew who I was,” says Woods. “But they did not want to know – their attitude was, ‘Why are you doing this?’ They should have been on my side, because they were compliance people, not commercial people. But really they were commercial people all along.

We’re talking about hundreds of millions of dollars. This is the biggest money-laundering scandal of our time.

“These are the proceeds of murder and misery in Mexico, and of drugs sold around the world,” he says. “All the law enforcement people wanted to see this come to trial. But no one goes to jail. “What does the settlement do to fight the cartels? Nothing – it doesn’t make the job of law enforcement easier and it encourages the cartels and anyone who wants to make money by laundering their blood dollars. Where’s the risk?There is none.

“Is it in the interest of the American people to encourage both the drug cartels and the banks in this way? Is it in the interest of the Mexican people? It’s simple: if you don’t see the correlation between the money laundering by banks and the 30,000 people killed in Mexico, you’re missing the point.”

Woods feels unable to rest on his laurels. He tours the world for a consultancy he now runs, Hermes Forensic Solutions, counselling and speaking to banks on the dangers of laundering criminal money, and how to spot and stop it. “New York and London,” says Woods, “have become the world’s two biggest laundries of criminal and drug money, and offshore tax havens. Not the Cayman Islands, not the Isle of Man or Jersey. The big laundering is right through the City of London and Wall Street.

“After the Wachovia case, no one in the regulatory community has sat down with me and asked, ‘What happened?’ or ‘What can we do to avoid this happening to other banks?’ They are not interested. They are the same people who attack the whistleblowers and this is a position the[British] Financial Services Authority at least has adopted on legal advice: it has been advised that the confidentiality of banking and bankers takes primacy over the public information disclosure act. That is how the priorities work: secrecy first, public interest second.

“Meanwhile, the drug industry has two products: money and suffering. On one hand, you have massive profits and enrichment. On the other, you have massive suffering, misery and death. You cannot separate one from the other.

“What happened at Wachovia was symptomatic of the failure of the entire regulatory system to apply the kind of proper governance and adequate risk management which would have prevented not just the laundering of blood money, but the global crisis.”

On 5/4/11 9:29 PM, Sean Noonan wrote:

this is in OS.

Many big stories on it.

On 5/4/11 7:53 PM, Fred Burton wrote:

One of my trusted former CIA cronies reports Wachovia laundered $70 billion (yes billion) for the MX drug cartels per an on-going  investigation. His company has been hired by the MX govt to look for drug money.

–

Sean Noonan

Tactical Analyst

Strategic Forecasting, Inc.

www.stratfor.com

…

All you have to do, is make a deal that the local FBI can’t refuse, like say cooperating with both drug distribution and money laundering, while drawing an honest salary from the FBI. They will allow you to profit, and continue your enterprise. You need to be willing to deal enough weed to make a federal case. And then you can target your enemies and competitors while preserving your market share.

In exchange, you will be allowed to operate with a sanction worth as much as James Bond’s OO7 ‘license to kill’.

This cooperation with the FBI is perpetual, as is the drug war that proliferates from the profits and police work that weave into snitches and their government handlers. With enough coaching, you can become a National Security Asset, and you will be an Untouchable!

The Story from USA Today:

Mexican cartel suspects targeted in the troubled gun-trafficking probe known as Operation Fast and Furious were actually working as FBI informants at the time, according to a congressional memo that describes the case’s mission as a “failure.”

…

The memorandum from staffers with the House Committee on Oversight and Government Reform says the FBI and Drug Enforcement Administration were investigating a drug-trafficking organization and had identified cartel associates a year before the ATF even learned who they were. At some point before the ATF’s Fast and Furious investigation progressed — congressional investigators don’t know when — the cartel members became FBI informants.

“These were the ‘big fish,’” says the memo, written on behalf of Rep. Darrell Issa, R-Calif., and Sen. Charles Grassley, R-Iowa. “DEA and the Federal Bureau of Investigation (FBI) had jointly opened a separate investigation targeting these two cartel associates….Yet, ATF spent the next year engaging in the reckless tactics of Fast and Furious in attempting to identify them.”

According to Issa and Grassley, the cartel suspects, whose names were not released, were regarded by FBI as “national-security assets.” One pleaded guilty to a minor offense. The other was not charged. “Both became FBI informants and are now considered unindictable,” the memo says. “This means that the entire goal of Fast and Furious — to target these two individuals and bring them to justice — was a failure.”

…

In an emailed statement, Rep. Elijah Cummings of Maryland, ranking Democrat on the Oversight committee, disputed GOP conclusions and stressed that Issa “has repeatedly made unsubstantiated allegations against law- enforcement agencies” while investigating Fast and Furious. Cummings agreed that the ATF was hampered by communication breakdowns, but he rejected implications that other agencies had similar failures.

Fast and Furious was launched by the ATF in November 2009. At the same time, the memo says, FBI and DEA agents who were conducting a narcotics investigation identified a suspected ringleader of the gun-trafficking organization, Manuel Celis-Acosta. According to federal records, DEA supervisors shared their discovery with ATF agents, but the suspect was not arrested until a year later, when guns from Fast and Furious were linked to the murder of U.S. Border Patrol Agent Brian Terry.

At that point, the memo says, Celis-Acosta gave names of his Sinaloa cartel associates to ATF agents, who learned that they already were working for the FBI. The associates are not identified in the congressional memo.

The overlap reflects the spiderweb nature of trafficking organizations in Arizona and the labyrinth of law-enforcement agencies pursuing them.

Celis-Acosta was indicted by a federal grand jury in January 2011 with 19 other suspects on charges related to firearms and marijuana trafficking, conspiracy and money laundering. He is awaiting trial in U.S. District Court.

We now know that the ATF helped proliferate guns, the DEA helped launder cartel money, the FBI protected cartel operatives, while the drug war got worse in Mexico. Coincidence? Or great law enforcement and intelligence?