Pubdate: Mon, 16 Aug 2010 Source: Calgary Herald (CN AB) Copyright: 2010 Canwest Publishing Inc. Contact: http://www2.canada.com/calgaryherald/letters.html Website: http://www.calgaryherald.com/ Details: http://www.mapinc.org/media/66 Author: Kevin Brooker LEGALIZE DRUGS TO END LAUNDERING "Money laundering by organized crime groups is rampant at Canadian casinos but police are essentially doing nothing to combat it," Herald readers learned last week. The source was an internal RCMP report that acknowledged, despite being tipped off by financial watchdogs about the existence of suspicious casino transactions worth millions, the police force hadn't made a single arrest. Now, money laundering is far from an average person's consciousness. And even if one is interested enough to pay attention, the laundering process quickly devolves into a financial maze that seems impossible to decipher. For that reason alone, it's no wonder there's a lack of citizen outcry to force authorities to do their jobs. But let's use this casino story to simplify our understanding. Simpler yet, allow me to explain money laundering in a way I heard about during some random bar talk not long ago. "I can't believe the draw of those video poker machines," someone at our table mentioned. "Well," said another, "those guys might be 'on the job.' I used to work with a guy who dealt cocaine on the side and he said that's how he cleaned up his money. He'd have to pour a lot of cash in, but the winning tickets he got back were now legitimately earned." Voila, money laundering at its most primitive. Everyday money laundering also occurs in more prosaic locations. Do you ever notice those video stores and steak-and-pizza restaurants that never seem to have patrons? In fact, their books tell a different story. Yeah, they had some great months this year. Solid earnings. And their taxes are all up to date. Now those legitimate business-folk can use their profits to buy duplexes, and collect rent, and pay more taxes. One can readily see, then, that the economic system as a whole has a disincentive to stop that money train before it leaves the station. If the problem were confined to small-time drug dealers, maybe it wouldn't be so important to combat. In fact, however, money laundering permeates our financial system at the highest levels, creating a culture of corruption that mocks every straight-shooting citizen in the world. Consider, for example, the revelations in this month's Bloomberg magazine about high-level laundering by U.S.-based Wachovia Bank, which in March admitted to authorities that it failed to perform legally required due diligence in absorbing funds from Mexican currency conversion offices between 2004 and 2007. The sum involved: $378.4 billion US. Banks are trusted to vet the origins of such funds. But when Martin Woods, the head of Wachovia's antimoney-laundering unit, alerted company executives to documents showing that drug dealers were funnelling money through Wachovia's branch network, they simply ignored him. Woods eventually quit in disgust, saying, "If you don't see the correlation between the money laundering by banks and the 22,000 people killed in (the drug wars of) Mexico, you're missing the point." Considering the astronomical sums involved, and their inherent ability to bribe regulators or even cops to look the other way, it would be a miracle if governments ever got serious about preventing drug profits from entering the broader financial system. It would also be naive to think that Canada is exempt from this widespread corruption, wherein criminals, banks and the government all play a duplicitous role. I don't often agree with former Mexican president Vicente Fox, but I did last week when he wrote, "We should consider legalizing the production, distribution and sale of drugs. Legalizing in this sense doesn't mean that drugs are good or don't hurt those who consume. Rather, we have to see it as a strategy to strike and break the economic structure that allows the mafias to generate huge profits in their business." That alone would shut down the laundries. - --- MAP posted-by: Richard Lake