City of London - money laundering capital of the world

[TonyGosling]

The man who exposed the lie of the war on drugs
Roberto Saviano already lives under armed guard after writing about the Neapolitan mafia. Now he is determined to uncover capitalism’s complicity with the narco-lords of South America
http://www.theguardian.com/books/2015/dec/26/man-who-exposed-lie-war-o n-drugs-roberto-saviano-ed-vulliamy
Ed Vulliamy

Saturday 26 December 2015 16.00 GMT
Last modified on Sunday 27 December 2015 13.56 GMT
Pablo Escobar was “the first to understand that it’s not the world of cocaine that must orbit around the markets, but the markets that must rotate around cocaine”.

Of course, Escobar didn’t put it that way: this heretical truth was posited by Roberto Saviano in his latest book Zero Zero Zero, the most important of the year and the most cogent ever written on how narco-traffic works. Here is a book that speaks what must be told at the end of another year of drug war spreading further and deeper, that tells what you will not learn from Narcos, Breaking Bad or the countless official reports.

The realisation that cocaine capitalism is central to our economic universe made Escobar the Copernicus of organised crime, argues Saviano, adding: “No business in the world is so dynamic, so restlessly innovative, so loyal to the pure free-market spirit as the global cocaine business.” It sounds simple, but it isn’t – it is revolutionary and, says Saviano, it explains the world.


The City of London is a far more important centre for laundering criminal money than the Cayman Islands
Roberto Saviano


Saviano – who lives in hiding under 24/7 guard, after death threats arising from Gomorrah, his book about the Neapolitan mafia – and I were due to discuss Zero Zero Zero at the Hay Arequipa book festival in Peru this month. But Saviano was unable to make it, because of difficulties in arranging his movements. For eight years, he has lived in undisclosed venues, with a permanent dispatch of seven carabinieri guards, rarely spending more than a few nights in the same bed. A video link to Peru proved too complicated, but what Saviano had to say was too important to let go, too pressing and radical to lose in the ether of the logistics. In the end we spoke by telephone last weekend.

“Capitalism,” says Saviano, “needs the criminal syndicates and criminal markets… This is the most difficult thing to communicate. People – even people observing organised crime – tend to overlook this, insisting upon a separation between the black market and the legal market. It’s the mentality that leads people in Europe and the USA to think of a mafioso who goes to jail as a mobster, a gangster. But he’s not, he’s a businessman, and his business, the black market, has become the biggest market in the world.”
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Roberto Saviano and bodyguards attend the 2013 Giffoni film festival in Italy. Photograph: Stefania D'Alessandro/Getty Images

This is Saviano’s sagacious heresy. For decades, writing on global mafia has presumed a Manichean schism between cops and robbers; our healthy society and law enforcement on one hand battling organised crime on the other (with occasional erring by the former). But the trail blazed by Saviano and very few others demolishes that account, backed by every recent development in Mexico’s narco-nightmare, including and especially the escape, again, of the heir to Escobar’s mantle, Joaquin “Chapo” Guzman, from supposedly maximum-security jail. Narco cartels like Guzman’s are not adversaries of global capitalism, nor even pastiches of it; they are integral to – and pioneers of – the free market. They are its role model.

We hear much these days about the pros and cons of legalising drugs, but very little about narco-traffic as political economy. Now, Saviano articulates and demonstrates what many of us who write about mafia have been trying for years to shout from rooftops, only none of us climbed high enough, cried as loud, or crystallised it like he does. Here it is, the lie of any dividing line between legal and illegal. Here it is, laid bare: cartel as corporation, corporation as cartel; cocaine as pure capitalism, capitalism as cocaine, known in its purest form as zero-zero-zero – a wry reference to the name of the best grade of flour, ideal for pasta.

Saviano writes in his own distinct style of narrative literary reportage, at once factually informative and impressionistic. He opens Zero Zero Zero with a scathing tragicomic reflection on who in your life uses cocaine: “If it’s not your mother or father… then the boss does. Or the boss’s secretary… the oncologist… the waiters who will work the wedding… If not them, then the town councillor who just approved the new pedestrian zones.” Within three-score pages he has stripped bare the system whereby – and why – the white powder got up their noses. “Cocaine,” he concludes, applying the logic of business school, “is a safe asset. Cocaine is an anticyclical asset. Cocaine is the asset that fears neither resource shortages nor market inflation.” Of course, cocaine capitalism – as brazenly as any other commodity, possibly more so – has “both feet firmly planted in poverty… [and] unskilled labour, a sea of interchangeable subjects, that perpetuates a system of exploitation of the many and enrichment of the few”.

“Cocaine becomes a product like gold or oil,” he adds in conversation, “but more economically potent than gold or oil. With these other commodities, if you don’t have access to mines or wells, it’s hard to break into the market. With cocaine, no. The territory is farmed by desperate peasants, from whose product you can accumulate huge quantities of capital and cash in very little time.
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“If you’re selling diamonds, you have to get them authenticated, licensed – cocaine, no. Whatever you have, whatever the quality, you can sell it immediately. You are in perfect synthesis with the everyday life and ethos of the global markets – and the ignorance of politicians in the west to understand this is staggering. The European world, the American world, don’t understand these forces, they don’t have the will to understand narco-traffic.”

In a previous book, soon to be translated, called Vieni Via Con Me – Come Away With Me – Saviano talked about the “ecomafia” for which it is “always fundamental to be looking for terrain and spaces in which to conceal and proliferate itself”, just as a corporation carves out markets. In Zero Zero Zero, he writes about what might be called the genealogy of narco-syndicates, from their paternalistic period of “conservative capitalism” to the lean, mean multinational corporations they have become: buying failing banks, working the credit economy, taking over interbank loans. Permeating the system until they become indistinct from it, until (writes Saviano in Vieni Via Con Me): “democracy is literally in danger”, and we become “all equal, all contaminated… in the machine of mud”.

“So the story of narco-traffic,” he says now, “is not something that happens far away. People like to think of this disgusting violence as something distant, but it’s not. Our entire economy is infused with this narrative.”

For some reason, he says, the Anglo-Saxon world is slower to understand the innate criminality of the “legal” system than Latin societies. “I think the Anglo-Saxon, Anglo-American world is infused by a kind of Calvinist positivism; people want to believe in the health of their society,” says Saviano, even though “what this all means is that, for instance, the City of London is a far more important centre for laundering criminal money than the Cayman Islands”.

The mafia, he argues, has a particular way of entrenching its presence and increasing its strength, in a manner almost Darwinian, evolutionary: “the force of the mafia is this. If a mafioso messes up, he dies – and thus they develop a system of survival. When they make a mistake, they are killed and replaced by someone even more ruthless, so that the organisation becomes even stronger.”

More on this topic
HSBC has form: remember Mexico and laundered drug money | Ed Vulliamy

At the start of this year, writing from New York, Saviano described his threatened life under guard in our sister paper, the Guardian, and in this book that followed he asks himself, poignantly: “Is it really worth it?”

“I write about Naples, but Naples plugs her ears,” he laments. It is, he writes, “my fault if the articles I keep writing about the blood spilled in the cocaine markets fall upon deaf ears”. Any reporter or writer on these subjects feels a version of these feelings, but – apart from our colleagues in Mexico or Colombia – with so much less to pay than Saviano has paid: with his liberty and security.

“Sometimes I think I’m obsessed,” he reflects in the book, but “other times I’m convinced these stories are a way of telling the truth”. Here we have it. Whether obsessed or not, Saviano realises the brutal truth: that to understand narco-traffic is to understand the modern world. “You can’t understand how the global economy functions if you don’t understand narco-traffic”, he says in conversation.

A remarkable passage in Zero Zero Zero explains why: a transcription of an FBI tape recording of a seasoned Italian mafioso in New York schooling young Mexican footsoldiers in the difference between law and “the rules”. Laws are there to be broken, he urges, but the rules of the organisation are sacrosanct, on pain of death. “The law is supposed to be for everybody,” Saviano tells me, “but the rules are made by the so-called men of honour. This is how narco-traffic explains the world, by embracing all the contradictions of the world. To succeed in narco-traffic, you apply the rules to break the law. And today, any big corporation can only succeed if it adopts the same principle – if its rules demand that it break the law.”

Zero Zero Zero is published by Allen Lane (£20). Click here to order a copy for £16
This article was amended on 27 December 2015, to correct the spelling of the word “threats”

[TonyGosling]

London is now the global money-laundering centre for the drug trade, says crime expert
Gomorrah author Roberto Saviano says 'the British treat it as not their problem'
James Hanning, David Connett |
http://www.independent.co.uk/news/uk/crime/london-is-now-the-global-mo ney-laundering-centre-for-the-drug-trade-says-crime-expert-10366262.ht ml

The City of London is the money-laundering centre of the world’s drug trade, according to an internationally acclaimed crime expert.

UK banks and financial services have ignored so-called “know your customer” rules designed to curb criminals’ abilities to launder the proceeds of crime, Roberto Saviano warned. Mr Saviano, author of the international bestseller Gomorrah, which exposed the workings of the Neapolitan crime organisation Camorra, said: “The British treat it as not their problem because there aren’t corpses on the street.”

His warning follows a National Crime Agency (NCA) threat assessment which stated: “We assess that hundreds of billions of US dollars of criminal money almost certainly continue to be laundered through UK banks, including their subsidiaries, each year.”

Last month, the NCA warned that despite the UK’s role in developing international standards to tackle money laundering, the continued extent of it amounts to a “strategic threat to the UK’s economy and reputation”. It added that the same money-laundering networks used by organised crime were being used by terrorists as well.


Roberto Saviano's 'Gomorrah' has sold 10 million copies around the world (Teri Pengilley)



Interviewed by The Independent on Sunday, Mr Saviano said of the international drugs trade that “Mexico is its heart and London is its head”. He said the cheapness and the ease of laundering dirty money through UK-based banks gave London a key role in drugs trade. “Antonio Maria Costa of the UN Office on Drugs and Crime found that drug trafficking organisations were blatantly recycling dirty money through European and American banks, but no one takes any notice,” he said. “He found that banks were welcoming dirty money because they need cash, liquidity during the financial crisis. The figures are too big to be rejected …. Yet there was no reaction.”

Referring to HSBC’s record $1.9bn (£1.2bn) US fine for money laundering for the Mexican Sinaloa drugs cartel in 2012, Mr Saviano said: “The biggest UK bank! Yet it has scarcely been written about. The British treat it as not their problem, because there aren’t corpses on the streets.

“They think it’s all happening ‘over there somewhere’, so they needn’t worry about it. Sure, HSBC has been reported but there has been no debate. You need to fill the papers. The intellectuals have said nothing. [David] Cameron has said nothing. It’s his country. How can he say nothing on such a piece of news?”







Read more
Is the Camorra in control of the Granite City?
London property used for money laundering
Scale of UK-based Colombian crime syndicate revealed

US justice officials concluded HSBC was guilty of “stunning failures of oversight – and worse, that led the bank to permit narcotics traffickers and others to launder hundreds of millions of dollars through HSBC subsidiaries and facilitate hundreds of millions more in transactions with sanctioned countries”, including money banked for Middle East terror groups.

He accused the British Government, together with Austria, of consistently blocking anti-money-laundering moves by the European Union. “They will carry on like that until someone gets killed here by the Russians or the Italians. ” he said. Mr Saviano said he feared one reason was because banks are a key source of political funding.

“Every time there’s an election campaign, I wonder if someone will come forward and start a campaign on money laundering ... but it never happens. The reason, I am convinced but I don’t have the proof, is that a good part of the money that comes from money laundering goes into the election campaign. Not illegally, legally, because it can come in because of a lack of regulation.”


Labour MP David Lammy is worried about London’s dirty money (Getty)



Twenty years ago, drug money was laundered offshore because the top international banks “were afraid of opening their doors to dirty money, they were afraid of losing control”, he said. “The more criminal capital comes in, the more criminals there are on the boards. The Mafia set up its own bank, Michele Sindona’s Banca Privata Finanziaria, and the other banks would have nothing to do with them,” he said. “Not any more. Now, because of the problem of cash, they can’t wait to get the Mafia organisations in.”

Labour MP David Lammy, who met Mr Saviano last week, said the UK needed to take “very seriously” his claims about its financial services’ role in the international drugs trade. Mr Lammy, who is seeking to become Mayor of London in 2016, said: “We are rightly proud of our financial services industry in this country, but we cannot afford to be complacent.

“I am particularly concerned that London’s inflated property prices are fuelled by dirty money and I will do everything in my power as mayor to ensure that money laundering and tax evasion are rooted out by the authorities.”

http://truthfrequencyradio.com/podcasts/covertreport/covertreport.2016 -02-14.mp3

[Whitehall_Bin_Men]

When a mafia expert tells us Britain is the most corrupt country in the world, it's time to start listening

In London, the financial mafia don't take out death warrants on truth tellers, but powerful financial firms will destroy the lives and reputations of whistleblowers. Newsnight found they have a 100 per cent success rate

Joel Benjamin Tuesday 31 May 201613 comments
http://www.independent.co.uk/voices/when-a-mafia-expert-tells-us-brita in-is-the-most-corrupt-country-in-the-world-its-time-to-start-a7057686 .html

Mafia expert Roberto Saviano was right this week when he said that it’s Britain, rather than Afghanistan, the South of Italy or Nigeria, which is the most corrupt country in the world. The fact of the matter is that the British public think they are detached from the mafia problem and corruption, yet London is the drug money laundering capital of the world, and 90 per cent of drug cash ends up in the US and Europe via London.

In Saviano's native Italy, the Naples based Camorra have a warrant out for Roberto's life, after he exposed the inner workings of members of the mafia in his book Gomorrah. He is a man willing to risk his own life for truth – and we should listen.

In London, the financial mafia don't take out death warrants on truth tellers, but powerful financial firms will destroy the lives and reputations of whistleblowers without a moment’s hesitation, ensuring they never work in the financial services sector again.

It turns out Britain's perceptions of corruption, which are based on the NGO Transparency Internationals global corruption perceptions index only measure perceived corruption based upon the abuse of public office for private gain, i.e. the payment of bribes.

I grew up in New Zealand, a country ranked 4th top in TI's index, above Great Britain in 10th. Comparatively, Britain generally, and London specifically, feels more corrupt than New Zealand. Britain's institutionalised corruption is grounded in the so-called "old boys’ network" that runs the political establishment and controls the City of London.

John Key, a close political ally of David Cameron, and a former Executive at Merrill Lynch London, trading foreign exchange, is now Prime Minister running New Zealand, promising to turn NZ into the "Jersey of the South Pacific."

In other words, a tax haven, styled on Britain, and a node in the British-run network of global tax havens. While nepotism and subservience to finance capital is rife in Britain and its overseas dependencies, it is not illegal.

Many of the criminal corporate activities within the City of London which have dominated the headlines over the past decade are not classified as corruption by Transparency International.

Instead, the media and financial regulators refer to these institutionalised corporate crimes as "inappropriate conduct" or “mis-selling”.

As an alternative metric for financial corruption, the Financial Secrecy Index developed by the Tax Justice Network instead ranks countries based on the number of tax havens and financial secrecy jurisdictions, with Britain and its spider web of crown dependencies and overseas territories including Jersey, Guernsey, Bermuda, the Cayman Islands and British Virgin Islands finishing top of the list.

What we need now is firm action from David Cameron, who talks a big game when it comes to transparency and accountability, yet has singularly failed to deliver it.

Rather than cleaning up the UK’s global network of offshore secrecy jurisdictions and tax havens under British jurisdiction which allow criminal cash to flood into London property, instead Cameron is planning to privatise the UK Land Registry which tracks the (often foreign) ownership of UK properties.

An investigative journalist hired by 38 degrees found the four companies (General Atlantic, Hellman and Friedman, OMERS and Advent International) in line to buy up the UK Land Registry are all based in or have close links to the offshore tax havens of Jersey, Cayman Islands or Delaware.

Before we make London an unliveable city – something it’s hurtling its way towards because of this culture of corruption and secrecy – we must hold the Prime Minister to account for the consequences of such decisions. He can talk about transparency until he’s blue in the face, but actions speak louder than words.