Citibank stressed over Mexican pot? Was the bogus collateral a $400 million dollar farm loan, or what?
What happens when drug money corruption consumes banks deemed too big to fail? One more reason to reschedule marijuana both nationally and internationally.
Excerpt from: Stress and the Citi, by Charles R. Morris writing for Reuters on April 7, 2014:
“In late February, Citi had announced that its Mexican subsidiary, known as Banamex — the jewel of its international network — was out $400 million because of a garden-variety fraud operation. …”
“Soon after, Citi announced that it had been served with subpoenas for a potential criminal prosecution for money laundering and other violations at Banamex. The Federal Deposit Insurance Corporation and the Securities and Exchange Commission sent related subpoenas. Federal authorities have long been unhappy with Banamex’s money-laundering controls. Whether the loan fraud is connected to money laundering is not known… But it’s easy to construct scenarios in which large short-term oil-related loans could be used to create seemingly legitimate conduits to process drug money in and out of Mexico.”
Excerpt from: Public Broadcasting System quoting from Money Laundering Alert:
“Citibank’s policies on knowing its “private banking customers extends to the point of “visit(ing) our clients 10 to 12 times a year in their country.” “This is why we go to their homes, this is why we visit with their family, this is why we go to their business, this is why we remember birthdays…. It’s too risky not to do due diligence, not to know who you’re dealing with…,” she testified.”
… “The “know your client,” at least in our bank, is part of the culture. It’s part of the way you do things. It’s part of the way you conduct yourself. If you come in with a prospect and/or name of a prospect, you will be sure to be asked, “Who is this person, what do they do, who introduced them to you,” by at least three or four people higher than you. It’s just the way it is….”
JE Says: Just to be fair, Citi is just the most recent (and out of control) case. There was Wachovia, Hell’s Cargo and HSBC and actually several others in what is becoming a regular pattern of converting black market proceeds into investment capital. We’re talking about hundreds of billions of dollars. Keene used to speak of evil fairies doing great good, I wonder if this is what he meant. Here’s a bit more of that recent history.
And contrast this trend to the treatment that medical marijuana clubs in California receive after following the state law and organizing themselves into legal business structures to serve patients and pay taxes yet they continue to grovel and beg for permission to use banking services in a normal manner. It does tend to rattle ones confidence in the US banking industry and government regulatory objectivity in general.
The folks over in London at the Guardian are doing real journalism raising some excellent questions and so we’ll close with a final reference to Gabriel Matthew Schivone from his April 10, 2014 story:
“Why aren’t we putting US agencies on trial for financing El Chapo’s drug war? — From Capone to Mexico’s captured cocaine king, the villains we love to hate obscure the truth about America’s secret support”