Collapse of the Capital Markets.

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Over the past six-eight years the MildGreens have often made the claim that were illicit drugs to be globally legally regulated, the capital markets would collapse. (cf: Narcodollars for Dummies, introduced to NZ’s SCOOP by the MildGreens). While our comment was aimed at the fiscal risk created by pump and dump when black money is laundered, the destabilised banking markets we see today are inseparable.

In a ringing endorsement of that claim the following headline substantially agrees.

U.N. crime chief says drug money flowed into banks
Reuters
Sunday, January 25, 2009

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.”

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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.

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Trillions Ron, Trillions.

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New Zealand First MP Ron Mark today (Sept 13) released an email alleging that gangs were highly valued corporate customers of big banks, getting preferential treatment and good interest rates with no questions asked about where the money came from.

Hardly surprising news Ron, The USA banking boondoggle and taxpayer welfare to Wall Street pales beside the revelations that a Trillion dollars a year* is laundered in India primarily ‘drug money’. What self respecting bank manager wouldn’t welcome that liquidity. (*from the 2008 International Narcotics Control Strategy Report, prepared by the US Department of State)

Mr Mark gave details in Parliament of the allegations. Cabinet Minister Phil Goff responded he would be willing to investigate the claims. “I would be very concerned if the information contained in that email is correct; that corporate people are facilitating the laundering and banking of money by gang members.”

The email released to NZPA was written by a man who said he used to be a corporate banker.
“It’s not common knowledge but most of the major gangs are corporate customers (the biggest and best) of the trading banks, with their own managers, exchange and money market dealers, enjoying risk grade A (the best) interest rates. And their key staff enjoy preferential services and interest rates too.”

The man said that in the late 1980s and early 1990s when only major companies could afford financial information services such as Reuters, which gives up to the minute foreign exchange and shares information, “the Mongrel Mob was so equipped”.

“Of course gangs run legitimate operations, which presumably are fantastic ways to launder money.”

He said far tougher measures were needed to get at the money behind organised crime. Mr Mark said life should be made difficult for gangs by outlawing them and have high level investigations into the money side of organised crime. Mr Goff said the Government was watching closely how effective the serious and organised crime legislation that had just come into effect in Australia was.

He said the Government had tightened controls on financial institutions to clamp down on money laundering and taken other measures. The email writer said he had had to move his business because of a Headhunters gang pad next door. Source: Stuff

However, consider…..

Financial institutions are facing costs in the “hundreds of millions” to comply with new money laundering legislation, but the effort will have little effect and cost IT organisations dearly, according to Kiwibank CEO Sam Knowles.

The laws, aimed at preventing money-laundering and the financing of terrorism, and other regulations governing big-money transactions have yet to be finalised. It is proposed that the regime apply not just to financial institutions but to other big-money businesses such as real-estate and jewellery sales.

However, speaking at the government’s Managing Identity conference, held in Wellington last month, Knowles said that policing such transactions will cost hundreds of millions of dollars and will have “little result”. The task of checking the provenance of large transactions is likely to rebound on bank ICT departments as well as on other business units.

The Ministry of Justice has commissioned a report from consultancy Deloitte on the financial impact of complying with the proposed regime, but this will likely lead to just minor tweaks to the regulations, according to the department’s spokesman, Gregor Allen.

The ministry has consulted fully with industry over more than a year so any amendment to the core legislation is unlikely, he says.

“The banks understand that a lot of this is mandated by international agreement,” says Allen. And for a New Zealand bank to decline to “follow in the slipstream” would be to risk being cast adrift from vital international banking links.

The anti-laundering push is being coordinated by an inter-governmental body called the Financial Action Task Force (FATF).

Most New Zealand based banks are already coming under pressure from their Australian owners to quickly put in place policies that the Australians have implemented since about 2005, says Allen.

Kiwibank is, of course, New Zealand-owned and, coincidentally, is running an advertising campaign depicting the bank as part of a resistance movement against foreign domination. (Yahoo! A Republican Bank / Blair)

Deloitte’s report is expected to be completed in a week or two, says Allen.

This will then set in motion the time-frame for policy to be approved by Cabinet around mid-year and legislation to be passed before the end of the year.

http://computerworld.co.nz/news.nsf/scrt/7A7BB9A1918F0357CC257447006E1546

Blair Anderson ‹(•¿•)›

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Cannabis dealer can keep farm

An Orinoco man convicted of drug dealing and money laundering has won his fight to keep his farm, which is potentially worth $1.5 million, but has been ordered to pay $200,000 to the Crown instead.

The Crown had applied for the 107ha property in Thorpe-Orinoco Rd to be forfeited after wood merchant Graham Donald Sturgeon, 50, was found guilty by a jury in July 2005 of 13 charges. These involved cultivating cannabis at the property between 1997 and 2002, selling cannabis to people over 18, possessing cannabis for supply, money laundering and possessing offensive weapons.
Sturgeon, a former Nelson Bays representative rugby player, was sentenced to five years’ imprisonment in September 2005, and is now out of jail.

In a written decision, Judge David McKegg dismissed the solicitor-general’s application, saying forfeiting Sturgeon’s property would cause undue hardship to him, his partner, and to Sturgeon’s father, who planned to eventually move to the farm with his wife so they could have some oversight because of physical disability.

“The impact on Mr Sturgeon at 50 years of age of being deprived of his home, his future livelihood and his only asset is, in my view, distinctly out of the ordinary,” Judge McKegg said.

“In submissions, it is put to me that such an order could force a man who is capable of supporting himself and his wife into a state dependence circumstance and would be a disruption to the entire family.”

Sturgeon bought the property which includes a two-bedroom home and farm buildings in 1991 for $145,000, and worked hard to develop it. 4MORE SEE Local News – The Nelson Mail – Printable

[see also ‘five years for his clandestine trade’ Stuff.co.nz September 3rd 2005]

While people were looking up to Orinoco man Graham Donald Sturgeon as an example to youth and a “pillar of the community”, the former leading sportsman was secretly growing and dealing in drugs. Now, he’s been sent to prison for five years for his clandestine trade.
Sturgeon, 47, a wood merchant, was sentenced in the Nelson District Court on Thursday on 13 charges a jury found him guilty of in July. They were three counts of cultivating cannabis, two of selling cannabis, a charge of possessing cannabis for sale, two charges of possessing offensive weapons – two loaded semi-automatic rifles – and five counts of money laundering. Judge David McKegg sentenced Sturgeon to five years’ prison and ordered that $20,000 found by police in a freezer at his Orinoco home be forfeited, Full Forfeit….

This man would otherwise be conducting his farming practices as per normal if it wasn’t for prohibition.

It is a myth that legalised cannabis would encourage dealers to move onto other criminal activities.

Indeed… this is but one more arrest statistic that speaks of prohibitions failure. The perverse claims by Police ‘forfeiture’ by over over stating the values ‘only created by prohibition’ such vociferous assertions bring the Police into disrepute. There are 500,000 cannabis consumers and many other libertarian minded folk who in all likely hood say Sturgeon’s a hero. He faces the same kind of risks that confronted Tony Stanlake (hence the precautionary weapons, not required at bottle stores or dairy’s selling cigarettes) so see this, amongst many other things about this case for the absurdity it is.

Besides, how can property be guilty of anything?

No wonder the Judge saw the bigger picture. However, it is still double jeopardy and that doesn’t make it right.

Blair Anderson
http://mildgreens.blogspot.com

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