U.N. crime chief says drug money flowed into banks

[JackRiddler]

Source: IHT (Reuters wire)

VIENNA: The United Nations' crime and drug watchdog has indications that money made in illicit drug trade has been used to keep banks afloat in the global financial crisis, its head was quoted as saying on Sunday.

Vienna-based UNODC Executive Director Antonio Maria Costa said in an interview released by Austrian weekly Profil that drug money often became the only available capital when the crisis spiralled out of control last year. "In many instances, drug money is currently the only liquid investment capital," Costa was quoted as saying by Profil. "In the second half of 2008, liquidity was the banking system's main problem and hence liquid capital became an important factor."

The United Nations Office on Drugs and Crime had found evidence that "interbank loans were funded by money that originated from drug trade and other illegal activities," Costa was quoted as saying. There were "signs that some banks were rescued in that way."

Profil said Costa declined to identify countries or banks which may have received drug money and gave no indication how much cash might be involved. He only said Austria was not on top of his list, Profil said.
Today in Europe

(Reporting by Boris Groendahl; Editing by Charles Dick)

Read more: http://www.iht.com/articles/reuters/2009/01/25/europe/OUKWD-UK-FINANCIAL-UN-DRUGS.php

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AFAIK all that exists on the Web so far is a blurb at the Profil site announcing that the interview is in the current print issue, and the Reuters pick-up as you have it above. It appears at various German sites in near-identical form. Apparently, no further details are released in the print version.

http://www.profil.at/articles/0904/560/231759/wurden-banken-drogengeld-das-investmentkapital

Wurden Banken mit Drogengeld gerettet?
"Das einzige verfügbare Investmentkapital"
profil: UN verfolgt derzeit Hinweise in diese Richtung
UNODC-Chef: "Österreich nicht ganz oben auf Liste"

In einem Interview in der neuen Ausgabe des Nachrichtenmagazins "profil" spricht Antonio Maria Costa, Generaldirektor des UN-Büros für Drogen- und Verbrechensbekämpfung (UNODC) von Hinweisen, dass im Zuge der Wirtschaftskrise Bankinstitute durch Geld aus dem Suchtgifthandel gerettet wurden. "Vielfach ist Drogengeld derzeit das einzige verfügbare liquide Investmentkapital", so Costa: "In der zweiten Hälfte des Jahres 2008 wiederum war Liquidität das größte Problem des Bankensystems, und damit wurde flüssiges Kapital zu einem wichtigen Faktor." Die UNODC habe Anzeichen gefunden, dass "Interbank-Kredite durch Geldmittel finanziert worden, die aus dem Drogenhandel und anderen illegalen Aktivitäten kommen". Es gebe "Hinweise, dass manche Banken auf diese Art und Weise gerettet wurden". Namen wollte Costa gegenüber "profil" nicht nennen: "Aber Österreich steht sicher nicht ganz oben auf meiner Liste, wenn ich an die betroffenen Länder denke."

Lesen Sie die ganze Story im neuen profil!
24.1.2009 17:51

Heh, the contextual ad generator at profil.at is flashing an ad for AXA bank! Should make them wonder whether "all publicity is good publicity."

http://is.blick.ch/img/gen/B/m/HBBm79uD_Pxgen_rc_Ax215,160x215+0+0.jpg

Trans:

Were banks saved with drug money? "The only available investment capital." profil: UN currently following evidence pointing that way. UNODC Chief: "Austria is not quite at the top of the list." (... SNIP: Exact same nothing as in the Reuters item. UN claiming to have found evidence of drug money used to transact interbank loans during the crisis.) Costa did not want to tell Profil any names: "Austria is surely not quite at the top of my list, when I think of the affected countries."

Read the whole story in the new Profil!

Except that is the whole story, for now. Would the UN crime chief choose to announce truly earthshaking findings in this way? The connection is that UNODC is based in Vienna:

http://www.unodc.org/unodc/en/money-laundering/index.html

Or do you think perhaps this is a float to put the scare of exposure into... who? The entire banking sector, as probably most of them are involved in this kind of business? I guess vagueness would serve that purpose!

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[JackRiddler]

1. kick

[crikkett]

2. Wow. all this stuff coming out in the first week of the presidency

makes me think that perhaps these criminals were being protected in the last administration.

[JackRiddler]

3. Problem is: Nothing's come out yet.

[JackRiddler]

4. And so a kick for what we might hope is a sliver of dawn.

[crikkett]

5. Huh? What about what

"UNODC Executive Director Antonio Maria Costa said in an interview"

How's that not coming out with information?

Then there's the absence of Gitmo case files... the announcement of vast amounts of pure water on Mars... stem-cell treatments in development...

[JackRiddler]

7. I mean, actual details of the alleged drug money laundering by banks...

It's very nice that UNODC chief in an interview with an Austrian mag indicates what we all know already: that banks launder hundreds of billions of dollars in drug money every year.

Time for this evidence to be brought forward. Names, ranks, prison serial numbers.

[Frustratedlady]

6. Hmmm! What happened to the practice of shutting down drug operations

and putting the money into crime fighting coffers?

I've always wondered who had control of those skids of wrapped currency they show on the news, from time to time.

[Trillo]

8. I don't think it's about fear

Some rhetorical questions.

What is a drug?

What is trade?

What is drug trade?

What is illicit?

What is illicit trade?

What is illicit drug trade?

What is money?

What is drug money?

What is a bank?

What are banks?

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It seems there are some big hypocrisies that are being pointed out.

[JackRiddler]

9. A friend of mine writes skeptically on this:

Uhhh, there are signs that the entire financial world of Wall Street has existed at the mercy of illegal drug profits for decades. Doy. Without the yearly half a trillion dollars generated by illegal drugs, the Dow Jones index would be sitting at about 2000. Where do you think that money goes? In some Columbian mattress?

This is such old news and such feigned astonishment, I have to think there is an alternative reason for even releasing this statement which will be ignored with a knowing smirk world-wide.

The photo is a classic, NYSE head Grasso meeting with the military leader of the FARC in 2000.

Well, no kidding!

So why is Mr. UNODC saying this, if it doesn't prefigure an actual presentation of hard evidence to back it up and start addressing the insanity of the world money laundering system just a touch?

To get his name in the press, safely, without any danger of being whacked?

Seems plausible to me. Damn.

Another crime solved by Inspector Riddler!

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[DCKit]

10. You've got a smart friend.

Kind'a kills the official spin.

But, personally, I always thought the Colombians put their money in the Pinata and Sombrero markets.