One more day on development takes us to all of the Wall Street money flowing into development that takes the US to third world status. First the big picture and then a look locally. I spoke a few years ago about being in a Baltimore Board of Estimates meeting when a developer from out of town spoke loudly to the Pikesville development people about how the money for development was flowing in......green tax credits galore funding building of huge office complexes. All of that money is of course the money stolen by Wall Street from Maryland coming back to build a global structure that takes all control away from the citizens of Maryland. A friend driving outside of Owings Mill said he saw a huge complex that had the opulence of Wall Street in the middle of nowhere filled with financial firms. What investigative journalists are finding is that neo-liberals and neo-cons are no longer sending money off-shore-----the money-laundering is now happening out of these financial buildings being built right in our own country. The US is being made the go-to place for wealth laundering. Why go to the Cayman Islands when Rule of Law is suspended in the US?
Make no mistake------the fact that nothing is being done is not because these financial institutions are too large. All Obama and neo-liberals had to do in 2009 was nationalize those banks, investigate and recover the fraud, and break them down to the regional banks they need to be. DID YOU HEAR YOUR POLS SHOUTING THAT? IF NOT, THEY ARE NEO-LIBERALS WORKING WITH THESE WALL STREET BANKS.
THAT IS WHAT RULE OF LAW DEMANDED. OUR GOVERNMENT COFFERS WOULD BE FLUSH WITH MONEY NOW IF THAT HAPPENED.
Economists and financial analysts are all saying that the US economy would be better now if they had. They didn't because Clinton neo-liberals and Bush neo-cons work for Wall Street as we see in Maryland. Bush and neo-cons allowed the massive corporate frauds to occur and Obama and neo-liberals are making sure justice is suspended. Maryland is ranked at the bottom nationally for this fraud and corruption. The epidemic exists because the US Justice Department is captured as are the state attorney's offices like the Maryland Attorney General's office. Public justice is completely dismantled. It's easy enough to fix-----simply vote out the neo-liberals and neo-cons controlling the party machines at local and state level and reinstate Rule of Law. When the government suspends Rule of Law it suspends Statutes of Limitations.
Big banks take advantage of money laundering epidemic in US
Published time: April 01, 2013 15:13 RT
Banking, Crisis, Economy, USA The attorney general of the United States says the country’s largest banks may be too big to jail, but the former chief economist for the International Monetary Fund isn’t exactly convinced.
Simon Johnson, the former top IMF economist and a current professor at the MIT Sloan School of Management, published a blistering editorial in Bloomberg News this week that makes an argument for imprisoning the banksters responsible for the nation’s last financial crisis — and possibly the next one — much to the chagrin of Attorney General Eric Holder.
Large international banks, writes Simon, are guilty of money laundering to the degree of epidemic proportions. If recent admissions from the biggest name in the American economy are any indication, though, they have nothing to fear.
“Governor Jerome Powell, on behalf of the Board of Governors of the Federal Reserve System, recently testified to Congress on the issue, and he sounded serious. But international criminals and terrorists needn’t worry. This is window dressing: Complicit bankers have nothing to fear from the U.S. justice system,” writes Simon.
Speaking to Congress last month, US Attorney General Eric Holder admitted, "I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy.” Johnson, on the other hand, implores the US Justice Department in his latest op-ed to follow in the footsteps of other countries and to once and for all condemn the corrupt practices that banks have been given a mere slap on the wrist for — and now harsh prosecutions.
In the editorial published Sunday evening, Johnson attacks both the Department of Justice and the Federal Reserve for failing to take action against the big banks.
“There may be fines, but the largest financial companies are unlikely to face criminal actions or meaningful sanctions,” he writes. “The Department of Justice has decided that these banks are too big to prosecute to the full extent of the law, though why this also gets employees and executives off the hook remains a mystery. And the Federal Reserve refuses to rescind bank licenses, undermining the credibility, legitimacy and stability of the financial system.”
Last December, the US government demanded Standard Chartered Bank — the fifth largest bank in the UK—pay up $327 million in fines after being caught guilty of laundering a quarter of a trillion dollars. Bartlett Naylor, the financial policy reform advocate for Public Citizen's Congress Watch, writes for Huffington Post that the sum is “paltry” when put into perspective of what banks should be paying, but even the attorney general — the nation’s top prosecutor — cannot figure a way to pursue much more.
In that regard, writes Simon this week, there’s very little to worry about for banking that may be considering colossal laundering schemes. “[I]nternational criminals and terrorists needn’t worry,” he writes.
Is the US actually becoming a haven for international banks to commit massive money laundering operations? The nations’ top economists seem to admit as much, but why, then, isn’t anything being done? “If you or I tried to launder money, even on a small scale, we would probably go to jail. But when the employees of a very big bank do so — on a grand scale and over many years — there are no meaningful consequences,” writes Johnson.
According to the attorney general, it might just not be possible. "I think that is a function of the fact that some of these institutions have become too large,” Holder said on Capitol Hill last month.
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The Baltimore Board of Estimates now has police on duty because citizens in Baltimore were so angry about money being lost to fraud and corruption and Jack Young makes it clear if anyone speaks out of turn they will be dismissed. Of course the public has no turn and when these meetings are televised there is only a quick in-and-out of Mayor Rawlings-Blake, Jack Young, the Comptroller, and mayor appointees. It seriously looks like something from China------ how corrupt and how silenced the public has been made in all city meetings.
The anger comes from revenue decisions and development decisions all made behind closed doors and with no public input. This is the Wall Street and global corporate capture that has taken Maryland over a few decades. Baltimore Development Corporation and Johns Hopkins is the face of it in the Baltimore region, but Maryland Assembly has been ground zero for this neo-con/neo-liberal takeover. They want people to believe this is the only way to develop but it is a lie. These empire-building people deliberately create chaos and corruption to undermine healthy economies and societies.
Baltimore citizens have been shouting in the streets for years about the injustice and now other counties are seeing their rights usurped. It is not only a class or race issue----it is a dismantling of our US Constitution, Rule of Law, and our status as citizens. Everywhere you go in Maryland citizens are made to write questions down or given a few minutes of time to speak in public meetings that happen too infrequently to allow voice. No one can outline a policy stance in just a few minutes. These pols also make sure there is no way dissent is heard as Maryland media will not allow any coverage outside of a sound bite to hit any media. In the case below you see yet another public facility is being handed to private developers and people wanting local community centers and local services to stay are fighting just as in Baltimore City. There is to be no public sector-----all is being handed to private non-profits controlled by these global corporations.
Police in Baltimore routinely harass and often jail activists for no reason to intimidate dissent......people need to wake up to this growing usurpation of power. It is not about local development----it is about changing US social and government structure.
The article suggests we need to solve our discontent through the political process-----but we see the election rigging and capture by these political machines make that difficult.
Dundalk activists question police scrutiny after public testimony
Two longtime Dundalk community activists say they are troubled that a Baltimore County police official called them at home after they testified against a development proposal at a County Council work session this month.
A police spokeswoman said the department did not mean to offend the people and that Chief Jim Johnson is reviewing the matter, which the two activists say they viewed as an attempt to intimidate them.
Karen Cruz, president of the Eastfield-Stanbrook Civic Association, and Bob Staab, a former county parks director and state legislator, say a police corporal called them at home a few days after they testified at a July 1 public meeting in Towson. Both had spoken against plans to redevelop the former North Point Government Center in Dundalk.
In the phone call, Cpl. Morgan Hassler talked about wanting to "keep peace" at council meetings, Staab said. Cruz said the corporal wanted to "go over the rules" for public meetings.
Hassler asked to meet with both of them at the local library; when they got to the July 7 meeting, both said, they were met by three police officials.
"I honestly felt like they were trying to intimidate me," Staab said.
Both Cruz and Staab belong to the group Dundalk United, a community organization formed to oppose the sale of the government center.
Police spokeswoman Elise Armacost responded to questions on behalf of the department and the officers. She said Hassler, of the special operations division, asked to meet with the two after plainclothes officers assigned to the work sessions witnessed "some behavior that was a little bit more boisterous than what they typically see at a work session."
Over the past year and a half, police officials have been meeting with advocacy groups — such as an anti-abortion group, animal-rights advocates and Wal-Mart protesters — to explain laws on demonstrations and protests, Armacost said.
"It appears that there was some misunderstanding here about what the purpose of the [library] meeting was," Armacost said. "The Police Department approached them in the same way that they've approached protest groups, which was in a polite and friendly way to discuss concerns about protocols."
The two plainclothes officers filed reports, dated July 8, describing their concerns about the work session. The reports are marked "highly confidential," but the department released them in response to a public-information request by The Baltimore Sun. The reports give a detailed description of the work session. They call the behavior of some attendees "disruptive" and "disrespectful," saying some people were "agitated" that they only had three minutes to speak or when they learned that they couldn't testify if they had not signed up before the work session.
Neither report mentions Staab, but one says Cruz talked longer than the allowed three minutes and later had a loud conversation with another person attending the work session.
One report says some people attending the session shouted questions from their seats, and it characterized the behavior of some at the meeting as showing "a complete lack of respect for the business procedures of the work session."
The reports say Council Chairwoman Cathy Bevins was disrupted because of people talking in the audience, and also detail how one attendee was filming the meeting with his cellphone.
Staab and Cruz said that at the library meeting, the police representatives wanted to talk about demonstrations.
"Nobody talked about any rules at all," Cruz said. "They talked about demonstrating."
The two said they were scratching their heads when they left the meeting, which lasted about 20 minutes.
Cruz said the whole situation "just didn't feel right."
"It felt like we were being targeted, and they were trying to intimidate us," she said.
Asked about the work session, Bevins said some residents were upset that they could not speak. She also said Cruz was disruptive because she kept speaking after her time was up.
"She just kept talking and talking, and then when she sat, she was still talking," said Bevins, a Middle River Democrat.
Councilman David Marks, who also attended the work session, said there was "passionate" testimony on the Dundalk proposal and from the opponents of a student-housing project in Towson, which is in his district. He said he did not witness anything threatening.
"I think they were passionate, but I have seen other witnesses who have also displayed that type of emotion," said Marks, a Perry Hall Republican. "I personally didn't feel threatened."
Armacost said police want to help strike a balance between people exercising their First Amendment rights and ensuring public safety. The department "encourages people to express their views through the democratic process," she said.
She added that one of the officials at the meeting, Maj. Woodland Wilson, felt comfortable discussing the officers' concerns with Cruz because he previously was the North Point captain and knew her as a community leader.
"We are sorry that they appear to have taken this the wrong way," Armacost said. "But this meeting was an extension of our ongoing efforts to reach out to groups to try to help them ensure that these types of opportunities to express their opinions goes smoothly."
I want to use this one case in Baltimore County because I often look at these same issues in Baltimore City.....we need to know these development deals filling space with large restaurant and hotel chains are happening all over the state. It adds nothing to the economy and takes all of our public space.
Special zoning rules and of course Enterprise Zone status means no taxes for this area. As the people said----why are you building businesses that are not succeeding in the downtown Baltimore Enterprise Zones.....restaurants and hotels. The answer----neo-liberals are not interested in a successful economy----they want to control the real estate and job creation. Keep in mind that long-time government researchers say that over 100,000 jobs have been lost in the downtown development and tens of thousands of small businesses displaced by these global corporations that offer nothing to the local economy. That is not a plan for a healthy economy.....
Remember, in Spain and Greece developers did the same----they spent all of the public revenue on useless buildings just to spend it-----sending it to the developers. Large tracts of real estate sit empty because the development had no reason.
In Baltimore, all of the Enterprise Zone restaurants and hotels are leaving, going bankrupt because there are so many that offer nothing people want that it is a musical chairs or forced taxpayer subsidy to keep these national chains afloat. All these businesses create poverty jobs so people are getting poorer. The percentage of people being brought into Baltimore to fill these global corporate jobs do not match the movement of the middle and working class out of Baltimore because of the hostile economic environment. Remember, the economy will crash next year with all this development displacing the working and midde-class----IT IS DELIBERATE FOLKS.
The Middle Class Is Steadily Eroding. Just Ask the Business World.
By NELSON D. SCHWARTZFEB. 2, 2014 New York Times
Photo G.E. Appliances' fastest-growing brand is its Café line of refrigerators and other appliances, which is directed at the high end of the market.
In Manhattan, the upscale clothing retailer Barneys will replace the bankrupt discounter Loehmann’s, whose Chelsea store closes in a few weeks. Across the country, Olive Garden and Red Lobster restaurants are struggling, while fine-dining chains like Capital Grille are thriving. And at General Electric, the increase in demand for high-end dishwashers and refrigerators dwarfs sales growth of mass-market models.
Dundalk residents speak out on government center redevelopment
Critics say retail proposal will reduce recreation, green spaceApril 10, 2014|
By Alison Knezevich, The Baltimore Sun
Dundalk residents filled a high school auditorium Thursday night to speak out about the redevelopment of the North Point Government Center, many saying they fear they will lose out when restaurants and offices replace the community building.
Vanguard Commercial Development wants to build a retail center called Merritt Pavilion at the site on Merritt Boulevard. The firm hosted a community meeting at Dundalk High School that became heated at times, with some speakers shouting at each other.
For years, the community has used the government center for youth sports activities, performing arts events and other recreation activities. Vanguard bought 15 acres of the 27-acre site from the county last year for about $2.1 million. Residents said concerns about the Baltimore developer's proposal involve traffic, the loss of green space and disruption to the adjacent neighborhood.
"I see a lot of empty stores," said resident David Wile, questioning why a new development would attract customers when other businesses in the area are failing.
Vanguard Principal Len Weinberg said his company wouldn't invest in the project if he didn't think it would succeed. The firm has received interest from national chain restaurants that want to locate there, he said.
He said the company plans to upgrade the center's ball fields and build a 21,000-square-foot arts and recreational facility for community use.
Plans call for more than 60,000 square feet of retail and restaurant space, plus about 16,000 square feet of offices. A group called Dundalk United formed last year to oppose the sale of the center, but the Dundalk Renaissance Corp. supports the proposal, saying it could help revitalize the area.
The center was one of three public properties that County Executive Kevin Kamenetz's administration put up for sale in 2013 for private development. The others were the Towson firehouse and a police substation in Randallstown. Throughout the bidding process, some Dundalk residents complained that county officials were secretive about their plans.
The developers are asking that the project be considered a Planned Unit Development, which gives flexibility in zoning rules if the project provides a community benefit. The County Council has not yet decided whether to grant that status.
On Thursday, many said they were angry not with Vanguard but with county leaders and politicians they felt had not listened to their concerns before the land was sold.
"You are not the bad guy," Linwood Jackson, a retired Sparrows Point shipyard worker, told Weinberg. Jackson said he feared selling off parkland for private interest set a bad precedent for public policy.
Maggie Gregory told the crowd she was disappointed more residents had not spoken out when the County Council was considering the sale.
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LET'S LOOK AT THE BIG PICTURE. WHAT WE SEE ARE WALL STREET BANKS AND DEVELOPERS SENDING IN THIS MONEY AND CONTROLLING DEVELOPMENT HERE IN THE US AS THEY DID IN THIRD WORLD COUNTRIES. ALL OF IT WAS DESIGNED TO SIMPLY MOVE THE NATION'S MONEY TO THESE BANKS. THAT IS WHAT IS BEHIND THE DEVELOPMENT IN MARYLAND.
The next two articles speak how the fraud and corruption that US corporations committed in countries around the world is now coming back to the US as neo-liberals and neo-cons try to dismantle our democracy. The American people are now feeling why 'death to America' sentiment is growing around the world.
Below you see what the Reagan/ Clinton and neo-liberals created when they broke the Glass Steagall wall and deregulated banks and they did it knowing these banks would become too big to control. They were working towards global empires----the Trans Pacific Trade Pact handing a Global Corporate Tribunal control of all laws and enforcement. Hillary will of course be sold by media as the pol ready to save all of us from the very thing she and Bill created. The tag-team Clinton/Bush
The bottom line is we get rid of global control by rebuilding domestic economies in all states-----push global corporations out of Maryland with oversight and accountability and high taxes and replace them with small and regional businesses......CINDY WALSH FOR GOVERNOR OF MARYLAND'S PLATFORM. See why my campaign was censured? The next important issue in resolving this is strengthening the International Criminal Court that Bush and Obama have made sure the US is not a member. The IMF is trying to dismantle it so the citizens cannot use it to recover wealth but International justice agencies are working just the same.
As you see below, Citibank is ground zero for this breakdown and of course it was Clinton's top man---Robert Rubin ----that created Citibank. All of Maryland pols are neo-liberals working for this and that is why Maryland citizens are being treated as if they no longer have a voice---these global corporate pols do not even recognize US Constitution and sovereignty.
Robert Edward Rubin (born August 29, 1938) is an American economist and banking executive. He served as the 70th United States Secretary of the Treasury during the Clinton administration.
His most prominent post-government role was as director and senior counselor of Citigroup
Take this seriously in your community, city, and state.
US Bank Money Laundering -
Enormous By Any Measure
By James Petras Professor of Sociology, Binghamton University 9-1-2
There is a consensus among U.S. Congressional Investigators, former bankers and international banking experts that U.S. and European banks launder between $500 billion and $1 trillion of dirty money each year, half of which is laundered by U.S. banks alone. As Senator Carl Levin summarizes the record: "Estimates are that $500 billion to $1 trillion of international criminal proceeds are moved internationally and deposited into bank accounts annually. It is estimated that half of that money comes to the United States". Over a decade then, between $2.5 and $5 trillion criminal proceeds have been laundered by U.S. banks and circulated in the U.S. financial circuits. Senator Levin's statement however, only covers criminal proceeds, according to U.S. laws. It does not include illegal transfers and capital flows from corrupt political leaders, or tax evasion by overseas businesses. A leading U.S. scholar who is an expert on international finance associated with the prestigious Brookings Institute estimates "the flow of corrupt money out of developing (Third World) and transitional (ex-Communist) economies into Western coffers at $20 to $40 billion a year and the flow stemming from mis-priced trade at $80 billion a year or more. My lowest estimate is $100 billion per year by these two means by which we facilitated a trillion dollars in the decade, at least half to the United States. Including the other elements of illegal flight capital would produce much higher figures. The Brookings expert also did not include illegal shifts of real estate and securities titles, wire fraud, etc. In other words, an incomplete figure of dirty money (laundered criminal and corrupt money) flowing into U.S. coffers during the 1990s amounted to $3-$5.5 trillion. This is not the complete picture but it gives us a basis to estimate the significance of the "dirty money factor" in evaluating the U.S. economy. In the first place, it is clear that the combined laundered and dirty money flows cover part of the U.S. deficit in its balance of merchandise trade which ranges in the hundreds of billions annually. As it stands, the U.S. trade deficit is close to $300 billion. Without the "dirty money" the U.S. economy external accounts would be totally unsustainable, living standards would plummet, the dollar would weaken, the available investment and loan capital would shrink and Washington would not be able to sustain its global empire. And the importance of laundered money is forecast to increase. Former private banker Antonio Geraldi, in testimony before the Senate Subcommittee projects significant growth in U.S. bank laundering. "The forecasters also predict the amounts laundered in the trillions of dollars and growing disproportionately to legitimate funds." The $500 billion of criminal and dirty money flowing into and through the major U.S. banks far exceeds the net revenues of all the IT companies in the U.S., not to speak of their profits. These yearly inflows surpass all the net transfers by the major U.S. oil producers, military industries and airplane manufacturers. The biggest U.S. banks, particularly Citibank, derive a high percentage of their banking profits from serving these criminal and dirty money accounts. The big U.S. banks and key institutions sustain U.S. global power via their money laundering and managing of illegally obtained overseas funds. U.S. Banks and The Dirty Money Empire Washington and the mass media have portrayed the U.S. as being in the forefront of the struggle against narco trafficking, drug laundering and political corruption: the image is of clean white hands fighting dirty money. The truth is exactly the opposite. U.S. banks have developed a highly elaborate set of policies for transferring illicit funds to the U.S., investing those funds in legitimate businesses or U.S. government bonds and legitimating them. The U.S. Congress has held numerous hearings, provided detailed exposés of the illicit practices of the banks, passed several laws and called for stiffer enforcement by any number of public regulators and private bankers. Yet the biggest banks continue their practices, the sum of dirty money grows exponentially, because both the State and the banks have neither the will nor the interest to put an end to the practices that provide high profits and buttress an otherwise fragile empire. First thing to note about the money laundering business, whether criminal or corrupt, is that it is carried out by the most important banks in the USA. Secondly, the practices of bank officials involved in money laundering have the backing and encouragement of the highest levels of the banking institutions - these are not isolated cases by loose cannons. This is clear in the case of Citibank's laundering of Raul Salinas (brother of Mexico's ex-President) $200 million account. When Salinas was arrested and his large scale theft of government funds was exposed, his private bank manager at Citibank, Amy Elliott told her colleagues that "this goes in the very, very top of the corporation, this was known...on the very top. We are little pawns in this whole thing" (p.35). Citibank, the biggest money launderer, is the biggest bank in the U.S., with 180,000 employees world-wide operating in 100 countries, with $700 billion in known assets and over $100 billion in client assets in private bank (secret accounts) operating private banking offices in 30 countries, which is the largest global presence of any U.S. private bank. It is important to clarify what is meant by "private bank." Private Banking is a sector of a bank which caters to extremely wealthy clients ($1 million deposits and up). The big banks charge customers a fee for managing their assets and for providing the specialized services of the private banks. Private Bank services go beyond the routine banking services and include investment guidance, estate planning, tax assistance, off-shore accounts, and complicated schemes designed to secure the confidentiality of financial transactions. The attractiveness of the "Private Banks" (PB) for money laundering is that they sell secrecy to the dirty money clients. There are two methods that big Banks use to launder money: via private banks and via correspondent banking. PB routinely use code names for accounts, concentration accounts (concentration accounts co-mingles bank funds with client funds which cut off paper trails for billions of dollars of wire transfers) that disguise the movement of client funds, and offshore private investment corporations (PIC) located in countries with strict secrecy laws (Cayman Island, Bahamas, etc.) For example, in the case of Raul Salinas, PB personnel at Citibank helped Salinas transfer $90 to $100 million out of Mexico in a manner that effectively disguised the funds' sources and destination thus breaking the funds' paper trail. In routine fashion, Citibank set up a dummy offshore corporation, provided Salinas with a secret code name, provided an alias for a third party intermediary who deposited the money in a Citibank account in Mexico and transferred the money in a concentration account to New York where it was then moved to Switzerland and London. The PICs are designed by the big banks for the purpose of holding and hiding a person's assets. The nominal officers, trustees and shareholder of these shell corporations are themselves shell corporations controlled by the PB. The PIC then becomes the holder of the various bank and investment accounts and the ownership of the private bank clients is buried in the records of so-called jurisdiction such as the Cayman Islands. Private bankers of the big banks like Citibank keep pre-packaged PICs on the shelf awaiting activation when a private bank client wants one. The system works like Russian Matryoshka dolls, shells within shells within shells, which in the end can be impenetrable to a legal process. The complicity of the state in big bank money laundering is evident when one reviews the historic record. Big bank money laundering has been investigated, audited, criticized and subject to legislation; the banks have written procedures to comply. Yet banks like Citibank and the other big ten banks ignore the procedures and laws and the government ignores the non-compliance. Over the last 20 years, big bank laundering of criminal funds and looted funds has increased geometrically, dwarfing in size and rates of profit the activities in the formal economy. Estimates by experts place the rate of return in the PB market between 20-25% annually. Congressional investigations revealed that Citibank provided "services" for 4 political swindlers moving $380 million: Raul Salinas - $80-$100 million, Asif Ali Zardari (husband of former Prime Minister of Pakistan) in excess of $40 million, El Hadj Omar Bongo (dictator of Gabon since 1967) in excess of $130 million, the Abacha sons of General Abacha ex-dictator of Nigeria - in excess of $110 million. In all cases Citibank violated all of its own procedures and government guidelines: there was no client profile (review of client background), determination of the source of the funds, nor of any violations of country laws from which the money accrued. On the contrary, the bank facilitated the outflow in its prepackaged format: shell corporations were established, code names were provided, funds were moved through concentration accounts, the funds were invested in legitimate businesses or in U.S. bonds, etc. In none of these cases - or thousands of others - was due diligence practiced by the banks (under due diligence a private bank is obligated by law to take steps to ensure that it does not facilitate money laundering). In none of these cases were the top banking officials brought to court and tried. Even after arrest of their clients, Citibank continued to provide services, including the movement of funds to secret accounts and the provision of loans. Correspondent Banks: The Second Track The second and related route which the big banks use to launder hundreds of billions of dirty money is through "correspondent banking" (CB). CB is the provision of banking services by one bank to another bank. It is a highly profitable and significant sector of big banking. It enables overseas banks to conduct business and provide services for their customers - including drug dealers and others engaged in criminal activity - in jurisdictions like the U.S. where the banks have no physical presence. A bank that is licensed in a foreign country and has no office in the United States for its customers attracts and retains wealthy criminal clients interested in laundering money in the U.S. Instead of exposing itself to U.S. controls and incurring the high costs of locating in the U.S., the bank will open a correspondent account with an existing U.S. bank. By establishing such a relationship, the foreign bank (called a respondent) and through it, its criminal customers, receive many or all of the services offered by the U.S. big banks called the correspondent. Today, all the big U.S. banks have established multiple correspondent relationships throughout the world so they may engage in international financial transactions for themselves and their clients in places where they do have a physical presence. Many of the largest U.S. and European banks located in the financial centers of the world serve as correspondents for thousands of other banks. Most of the offshore banks laundering billions for criminal clients have accounts in the U.S. All the big banks specializing in international fund transfer are called money center banks, some of the biggest process up to $1 trillion in wire transfers a day. For the billionaire criminals an important feature of correspondent relationships is that they provide access to international transfer systems - that facilitate the rapid transfer of funds across international boundaries and within countries. The most recent estimates (1998) are that 60 offshore jurisdictions around the world licensed about 4,000 offshore banks which control approximately $5 trillion in assets. One of the major sources of impoverishment and crises in Africa, Asia, Latin America, Russia and the other countries of the ex-U.S.S.R. and Eastern Europe, is the pillage of the economy and the hundreds of billions of dollars which are transferred out of the country via the corresponding banking system and the Private Banking system linked to the biggest banks in the U.S. and Europe. Russia alone has seen over $200 billion illegally transferred in the course of the 1990s. The massive shift of capital from these countries to the U.S. and European banks has generated mass impoverishment and economic instability and crises. This in turn has created increased vulnerability to pressure from the IMF and World Bank to liberalize their banking and financial systems leading to further flight and deregulation which spawns greater corruption and overseas transfers via private banks as the Senate reports demonstrate. The increasing polarization of the world is embedded in this organized system of criminal and corrupt financial transactions. While speculation and foreign debt payments play a role in undermining living standards in the crisis regions, the multi-trillion dollar money laundering and bank servicing of corrupt officials is a much more significant factor, sustaining Western prosperity, U.S. empire building and financial stability. The scale, scope and time frame of transfers and money laundering, the centrality of the biggest banking enterprises and the complicity of the governments, strongly suggests that the dynamics of growth and stagnation, empire and re-colonization are intimately related to a new form of capitalism built around pillage, criminality, corruption and complicity. James Petras is a Professor of Sociology at Binghamton University in Binghamton, New York. He is the author of 57 books. His latest, Globalization Unmasked: Imperialism in the New Millenium
Make no mistake------the fact that nothing is being done is not because these financial institutions are too large. All Obama and neo-liberals had to do in 2009 was nationalize those banks, investigate and recover the fraud, and break them down to the regional banks they need to be. DID YOU HEAR YOUR POLS SHOUTING THAT? IF NOT, THEY ARE NEO-LIBERALS WORKING WITH THESE WALL STREET BANKS.
THAT IS WHAT RULE OF LAW DEMANDED. OUR GOVERNMENT COFFERS WOULD BE FLUSH WITH MONEY NOW IF THAT HAPPENED.
Economists and financial analysts are all saying that the US economy would be better now if they had. They didn't because Clinton neo-liberals and Bush neo-cons work for Wall Street as we see in Maryland. Bush and neo-cons allowed the massive corporate frauds to occur and Obama and neo-liberals are making sure justice is suspended. Maryland is ranked at the bottom nationally for this fraud and corruption. The epidemic exists because the US Justice Department is captured as are the state attorney's offices like the Maryland Attorney General's office. Public justice is completely dismantled. It's easy enough to fix-----simply vote out the neo-liberals and neo-cons controlling the party machines at local and state level and reinstate Rule of Law. When the government suspends Rule of Law it suspends Statutes of Limitations.
Big banks take advantage of money laundering epidemic in US
Published time: April 01, 2013 15:13 RT
Banking, Crisis, Economy, USA The attorney general of the United States says the country’s largest banks may be too big to jail, but the former chief economist for the International Monetary Fund isn’t exactly convinced.
Simon Johnson, the former top IMF economist and a current professor at the MIT Sloan School of Management, published a blistering editorial in Bloomberg News this week that makes an argument for imprisoning the banksters responsible for the nation’s last financial crisis — and possibly the next one — much to the chagrin of Attorney General Eric Holder.
Large international banks, writes Simon, are guilty of money laundering to the degree of epidemic proportions. If recent admissions from the biggest name in the American economy are any indication, though, they have nothing to fear.
“Governor Jerome Powell, on behalf of the Board of Governors of the Federal Reserve System, recently testified to Congress on the issue, and he sounded serious. But international criminals and terrorists needn’t worry. This is window dressing: Complicit bankers have nothing to fear from the U.S. justice system,” writes Simon.
Speaking to Congress last month, US Attorney General Eric Holder admitted, "I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy.” Johnson, on the other hand, implores the US Justice Department in his latest op-ed to follow in the footsteps of other countries and to once and for all condemn the corrupt practices that banks have been given a mere slap on the wrist for — and now harsh prosecutions.
In the editorial published Sunday evening, Johnson attacks both the Department of Justice and the Federal Reserve for failing to take action against the big banks.
“There may be fines, but the largest financial companies are unlikely to face criminal actions or meaningful sanctions,” he writes. “The Department of Justice has decided that these banks are too big to prosecute to the full extent of the law, though why this also gets employees and executives off the hook remains a mystery. And the Federal Reserve refuses to rescind bank licenses, undermining the credibility, legitimacy and stability of the financial system.”
Last December, the US government demanded Standard Chartered Bank — the fifth largest bank in the UK—pay up $327 million in fines after being caught guilty of laundering a quarter of a trillion dollars. Bartlett Naylor, the financial policy reform advocate for Public Citizen's Congress Watch, writes for Huffington Post that the sum is “paltry” when put into perspective of what banks should be paying, but even the attorney general — the nation’s top prosecutor — cannot figure a way to pursue much more.
In that regard, writes Simon this week, there’s very little to worry about for banking that may be considering colossal laundering schemes. “[I]nternational criminals and terrorists needn’t worry,” he writes.
Is the US actually becoming a haven for international banks to commit massive money laundering operations? The nations’ top economists seem to admit as much, but why, then, isn’t anything being done? “If you or I tried to launder money, even on a small scale, we would probably go to jail. But when the employees of a very big bank do so — on a grand scale and over many years — there are no meaningful consequences,” writes Johnson.
According to the attorney general, it might just not be possible. "I think that is a function of the fact that some of these institutions have become too large,” Holder said on Capitol Hill last month.
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The Baltimore Board of Estimates now has police on duty because citizens in Baltimore were so angry about money being lost to fraud and corruption and Jack Young makes it clear if anyone speaks out of turn they will be dismissed. Of course the public has no turn and when these meetings are televised there is only a quick in-and-out of Mayor Rawlings-Blake, Jack Young, the Comptroller, and mayor appointees. It seriously looks like something from China------ how corrupt and how silenced the public has been made in all city meetings.
The anger comes from revenue decisions and development decisions all made behind closed doors and with no public input. This is the Wall Street and global corporate capture that has taken Maryland over a few decades. Baltimore Development Corporation and Johns Hopkins is the face of it in the Baltimore region, but Maryland Assembly has been ground zero for this neo-con/neo-liberal takeover. They want people to believe this is the only way to develop but it is a lie. These empire-building people deliberately create chaos and corruption to undermine healthy economies and societies.
Baltimore citizens have been shouting in the streets for years about the injustice and now other counties are seeing their rights usurped. It is not only a class or race issue----it is a dismantling of our US Constitution, Rule of Law, and our status as citizens. Everywhere you go in Maryland citizens are made to write questions down or given a few minutes of time to speak in public meetings that happen too infrequently to allow voice. No one can outline a policy stance in just a few minutes. These pols also make sure there is no way dissent is heard as Maryland media will not allow any coverage outside of a sound bite to hit any media. In the case below you see yet another public facility is being handed to private developers and people wanting local community centers and local services to stay are fighting just as in Baltimore City. There is to be no public sector-----all is being handed to private non-profits controlled by these global corporations.
Police in Baltimore routinely harass and often jail activists for no reason to intimidate dissent......people need to wake up to this growing usurpation of power. It is not about local development----it is about changing US social and government structure.
The article suggests we need to solve our discontent through the political process-----but we see the election rigging and capture by these political machines make that difficult.
Dundalk activists question police scrutiny after public testimony
Two longtime Dundalk community activists say they are troubled that a Baltimore County police official called them at home after they testified against a development proposal at a County Council work session this month.
A police spokeswoman said the department did not mean to offend the people and that Chief Jim Johnson is reviewing the matter, which the two activists say they viewed as an attempt to intimidate them.
Karen Cruz, president of the Eastfield-Stanbrook Civic Association, and Bob Staab, a former county parks director and state legislator, say a police corporal called them at home a few days after they testified at a July 1 public meeting in Towson. Both had spoken against plans to redevelop the former North Point Government Center in Dundalk.
In the phone call, Cpl. Morgan Hassler talked about wanting to "keep peace" at council meetings, Staab said. Cruz said the corporal wanted to "go over the rules" for public meetings.
Hassler asked to meet with both of them at the local library; when they got to the July 7 meeting, both said, they were met by three police officials.
"I honestly felt like they were trying to intimidate me," Staab said.
Both Cruz and Staab belong to the group Dundalk United, a community organization formed to oppose the sale of the government center.
Police spokeswoman Elise Armacost responded to questions on behalf of the department and the officers. She said Hassler, of the special operations division, asked to meet with the two after plainclothes officers assigned to the work sessions witnessed "some behavior that was a little bit more boisterous than what they typically see at a work session."
Over the past year and a half, police officials have been meeting with advocacy groups — such as an anti-abortion group, animal-rights advocates and Wal-Mart protesters — to explain laws on demonstrations and protests, Armacost said.
"It appears that there was some misunderstanding here about what the purpose of the [library] meeting was," Armacost said. "The Police Department approached them in the same way that they've approached protest groups, which was in a polite and friendly way to discuss concerns about protocols."
The two plainclothes officers filed reports, dated July 8, describing their concerns about the work session. The reports are marked "highly confidential," but the department released them in response to a public-information request by The Baltimore Sun. The reports give a detailed description of the work session. They call the behavior of some attendees "disruptive" and "disrespectful," saying some people were "agitated" that they only had three minutes to speak or when they learned that they couldn't testify if they had not signed up before the work session.
Neither report mentions Staab, but one says Cruz talked longer than the allowed three minutes and later had a loud conversation with another person attending the work session.
One report says some people attending the session shouted questions from their seats, and it characterized the behavior of some at the meeting as showing "a complete lack of respect for the business procedures of the work session."
The reports say Council Chairwoman Cathy Bevins was disrupted because of people talking in the audience, and also detail how one attendee was filming the meeting with his cellphone.
Staab and Cruz said that at the library meeting, the police representatives wanted to talk about demonstrations.
"Nobody talked about any rules at all," Cruz said. "They talked about demonstrating."
The two said they were scratching their heads when they left the meeting, which lasted about 20 minutes.
Cruz said the whole situation "just didn't feel right."
"It felt like we were being targeted, and they were trying to intimidate us," she said.
Asked about the work session, Bevins said some residents were upset that they could not speak. She also said Cruz was disruptive because she kept speaking after her time was up.
"She just kept talking and talking, and then when she sat, she was still talking," said Bevins, a Middle River Democrat.
Councilman David Marks, who also attended the work session, said there was "passionate" testimony on the Dundalk proposal and from the opponents of a student-housing project in Towson, which is in his district. He said he did not witness anything threatening.
"I think they were passionate, but I have seen other witnesses who have also displayed that type of emotion," said Marks, a Perry Hall Republican. "I personally didn't feel threatened."
Armacost said police want to help strike a balance between people exercising their First Amendment rights and ensuring public safety. The department "encourages people to express their views through the democratic process," she said.
She added that one of the officials at the meeting, Maj. Woodland Wilson, felt comfortable discussing the officers' concerns with Cruz because he previously was the North Point captain and knew her as a community leader.
"We are sorry that they appear to have taken this the wrong way," Armacost said. "But this meeting was an extension of our ongoing efforts to reach out to groups to try to help them ensure that these types of opportunities to express their opinions goes smoothly."
I want to use this one case in Baltimore County because I often look at these same issues in Baltimore City.....we need to know these development deals filling space with large restaurant and hotel chains are happening all over the state. It adds nothing to the economy and takes all of our public space.
Special zoning rules and of course Enterprise Zone status means no taxes for this area. As the people said----why are you building businesses that are not succeeding in the downtown Baltimore Enterprise Zones.....restaurants and hotels. The answer----neo-liberals are not interested in a successful economy----they want to control the real estate and job creation. Keep in mind that long-time government researchers say that over 100,000 jobs have been lost in the downtown development and tens of thousands of small businesses displaced by these global corporations that offer nothing to the local economy. That is not a plan for a healthy economy.....
Remember, in Spain and Greece developers did the same----they spent all of the public revenue on useless buildings just to spend it-----sending it to the developers. Large tracts of real estate sit empty because the development had no reason.
In Baltimore, all of the Enterprise Zone restaurants and hotels are leaving, going bankrupt because there are so many that offer nothing people want that it is a musical chairs or forced taxpayer subsidy to keep these national chains afloat. All these businesses create poverty jobs so people are getting poorer. The percentage of people being brought into Baltimore to fill these global corporate jobs do not match the movement of the middle and working class out of Baltimore because of the hostile economic environment. Remember, the economy will crash next year with all this development displacing the working and midde-class----IT IS DELIBERATE FOLKS.
The Middle Class Is Steadily Eroding. Just Ask the Business World.
By NELSON D. SCHWARTZFEB. 2, 2014 New York Times
Photo G.E. Appliances' fastest-growing brand is its Café line of refrigerators and other appliances, which is directed at the high end of the market.
In Manhattan, the upscale clothing retailer Barneys will replace the bankrupt discounter Loehmann’s, whose Chelsea store closes in a few weeks. Across the country, Olive Garden and Red Lobster restaurants are struggling, while fine-dining chains like Capital Grille are thriving. And at General Electric, the increase in demand for high-end dishwashers and refrigerators dwarfs sales growth of mass-market models.
Dundalk residents speak out on government center redevelopment
Critics say retail proposal will reduce recreation, green spaceApril 10, 2014|
By Alison Knezevich, The Baltimore Sun
Dundalk residents filled a high school auditorium Thursday night to speak out about the redevelopment of the North Point Government Center, many saying they fear they will lose out when restaurants and offices replace the community building.
Vanguard Commercial Development wants to build a retail center called Merritt Pavilion at the site on Merritt Boulevard. The firm hosted a community meeting at Dundalk High School that became heated at times, with some speakers shouting at each other.
For years, the community has used the government center for youth sports activities, performing arts events and other recreation activities. Vanguard bought 15 acres of the 27-acre site from the county last year for about $2.1 million. Residents said concerns about the Baltimore developer's proposal involve traffic, the loss of green space and disruption to the adjacent neighborhood.
"I see a lot of empty stores," said resident David Wile, questioning why a new development would attract customers when other businesses in the area are failing.
Vanguard Principal Len Weinberg said his company wouldn't invest in the project if he didn't think it would succeed. The firm has received interest from national chain restaurants that want to locate there, he said.
He said the company plans to upgrade the center's ball fields and build a 21,000-square-foot arts and recreational facility for community use.
Plans call for more than 60,000 square feet of retail and restaurant space, plus about 16,000 square feet of offices. A group called Dundalk United formed last year to oppose the sale of the center, but the Dundalk Renaissance Corp. supports the proposal, saying it could help revitalize the area.
The center was one of three public properties that County Executive Kevin Kamenetz's administration put up for sale in 2013 for private development. The others were the Towson firehouse and a police substation in Randallstown. Throughout the bidding process, some Dundalk residents complained that county officials were secretive about their plans.
The developers are asking that the project be considered a Planned Unit Development, which gives flexibility in zoning rules if the project provides a community benefit. The County Council has not yet decided whether to grant that status.
On Thursday, many said they were angry not with Vanguard but with county leaders and politicians they felt had not listened to their concerns before the land was sold.
"You are not the bad guy," Linwood Jackson, a retired Sparrows Point shipyard worker, told Weinberg. Jackson said he feared selling off parkland for private interest set a bad precedent for public policy.
Maggie Gregory told the crowd she was disappointed more residents had not spoken out when the County Council was considering the sale.
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LET'S LOOK AT THE BIG PICTURE. WHAT WE SEE ARE WALL STREET BANKS AND DEVELOPERS SENDING IN THIS MONEY AND CONTROLLING DEVELOPMENT HERE IN THE US AS THEY DID IN THIRD WORLD COUNTRIES. ALL OF IT WAS DESIGNED TO SIMPLY MOVE THE NATION'S MONEY TO THESE BANKS. THAT IS WHAT IS BEHIND THE DEVELOPMENT IN MARYLAND.
The next two articles speak how the fraud and corruption that US corporations committed in countries around the world is now coming back to the US as neo-liberals and neo-cons try to dismantle our democracy. The American people are now feeling why 'death to America' sentiment is growing around the world.
Below you see what the Reagan/ Clinton and neo-liberals created when they broke the Glass Steagall wall and deregulated banks and they did it knowing these banks would become too big to control. They were working towards global empires----the Trans Pacific Trade Pact handing a Global Corporate Tribunal control of all laws and enforcement. Hillary will of course be sold by media as the pol ready to save all of us from the very thing she and Bill created. The tag-team Clinton/Bush
The bottom line is we get rid of global control by rebuilding domestic economies in all states-----push global corporations out of Maryland with oversight and accountability and high taxes and replace them with small and regional businesses......CINDY WALSH FOR GOVERNOR OF MARYLAND'S PLATFORM. See why my campaign was censured? The next important issue in resolving this is strengthening the International Criminal Court that Bush and Obama have made sure the US is not a member. The IMF is trying to dismantle it so the citizens cannot use it to recover wealth but International justice agencies are working just the same.
As you see below, Citibank is ground zero for this breakdown and of course it was Clinton's top man---Robert Rubin ----that created Citibank. All of Maryland pols are neo-liberals working for this and that is why Maryland citizens are being treated as if they no longer have a voice---these global corporate pols do not even recognize US Constitution and sovereignty.
Robert Edward Rubin (born August 29, 1938) is an American economist and banking executive. He served as the 70th United States Secretary of the Treasury during the Clinton administration.
His most prominent post-government role was as director and senior counselor of Citigroup
Take this seriously in your community, city, and state.
US Bank Money Laundering -
Enormous By Any Measure
By James Petras Professor of Sociology, Binghamton University 9-1-2
There is a consensus among U.S. Congressional Investigators, former bankers and international banking experts that U.S. and European banks launder between $500 billion and $1 trillion of dirty money each year, half of which is laundered by U.S. banks alone. As Senator Carl Levin summarizes the record: "Estimates are that $500 billion to $1 trillion of international criminal proceeds are moved internationally and deposited into bank accounts annually. It is estimated that half of that money comes to the United States". Over a decade then, between $2.5 and $5 trillion criminal proceeds have been laundered by U.S. banks and circulated in the U.S. financial circuits. Senator Levin's statement however, only covers criminal proceeds, according to U.S. laws. It does not include illegal transfers and capital flows from corrupt political leaders, or tax evasion by overseas businesses. A leading U.S. scholar who is an expert on international finance associated with the prestigious Brookings Institute estimates "the flow of corrupt money out of developing (Third World) and transitional (ex-Communist) economies into Western coffers at $20 to $40 billion a year and the flow stemming from mis-priced trade at $80 billion a year or more. My lowest estimate is $100 billion per year by these two means by which we facilitated a trillion dollars in the decade, at least half to the United States. Including the other elements of illegal flight capital would produce much higher figures. The Brookings expert also did not include illegal shifts of real estate and securities titles, wire fraud, etc. In other words, an incomplete figure of dirty money (laundered criminal and corrupt money) flowing into U.S. coffers during the 1990s amounted to $3-$5.5 trillion. This is not the complete picture but it gives us a basis to estimate the significance of the "dirty money factor" in evaluating the U.S. economy. In the first place, it is clear that the combined laundered and dirty money flows cover part of the U.S. deficit in its balance of merchandise trade which ranges in the hundreds of billions annually. As it stands, the U.S. trade deficit is close to $300 billion. Without the "dirty money" the U.S. economy external accounts would be totally unsustainable, living standards would plummet, the dollar would weaken, the available investment and loan capital would shrink and Washington would not be able to sustain its global empire. And the importance of laundered money is forecast to increase. Former private banker Antonio Geraldi, in testimony before the Senate Subcommittee projects significant growth in U.S. bank laundering. "The forecasters also predict the amounts laundered in the trillions of dollars and growing disproportionately to legitimate funds." The $500 billion of criminal and dirty money flowing into and through the major U.S. banks far exceeds the net revenues of all the IT companies in the U.S., not to speak of their profits. These yearly inflows surpass all the net transfers by the major U.S. oil producers, military industries and airplane manufacturers. The biggest U.S. banks, particularly Citibank, derive a high percentage of their banking profits from serving these criminal and dirty money accounts. The big U.S. banks and key institutions sustain U.S. global power via their money laundering and managing of illegally obtained overseas funds. U.S. Banks and The Dirty Money Empire Washington and the mass media have portrayed the U.S. as being in the forefront of the struggle against narco trafficking, drug laundering and political corruption: the image is of clean white hands fighting dirty money. The truth is exactly the opposite. U.S. banks have developed a highly elaborate set of policies for transferring illicit funds to the U.S., investing those funds in legitimate businesses or U.S. government bonds and legitimating them. The U.S. Congress has held numerous hearings, provided detailed exposés of the illicit practices of the banks, passed several laws and called for stiffer enforcement by any number of public regulators and private bankers. Yet the biggest banks continue their practices, the sum of dirty money grows exponentially, because both the State and the banks have neither the will nor the interest to put an end to the practices that provide high profits and buttress an otherwise fragile empire. First thing to note about the money laundering business, whether criminal or corrupt, is that it is carried out by the most important banks in the USA. Secondly, the practices of bank officials involved in money laundering have the backing and encouragement of the highest levels of the banking institutions - these are not isolated cases by loose cannons. This is clear in the case of Citibank's laundering of Raul Salinas (brother of Mexico's ex-President) $200 million account. When Salinas was arrested and his large scale theft of government funds was exposed, his private bank manager at Citibank, Amy Elliott told her colleagues that "this goes in the very, very top of the corporation, this was known...on the very top. We are little pawns in this whole thing" (p.35). Citibank, the biggest money launderer, is the biggest bank in the U.S., with 180,000 employees world-wide operating in 100 countries, with $700 billion in known assets and over $100 billion in client assets in private bank (secret accounts) operating private banking offices in 30 countries, which is the largest global presence of any U.S. private bank. It is important to clarify what is meant by "private bank." Private Banking is a sector of a bank which caters to extremely wealthy clients ($1 million deposits and up). The big banks charge customers a fee for managing their assets and for providing the specialized services of the private banks. Private Bank services go beyond the routine banking services and include investment guidance, estate planning, tax assistance, off-shore accounts, and complicated schemes designed to secure the confidentiality of financial transactions. The attractiveness of the "Private Banks" (PB) for money laundering is that they sell secrecy to the dirty money clients. There are two methods that big Banks use to launder money: via private banks and via correspondent banking. PB routinely use code names for accounts, concentration accounts (concentration accounts co-mingles bank funds with client funds which cut off paper trails for billions of dollars of wire transfers) that disguise the movement of client funds, and offshore private investment corporations (PIC) located in countries with strict secrecy laws (Cayman Island, Bahamas, etc.) For example, in the case of Raul Salinas, PB personnel at Citibank helped Salinas transfer $90 to $100 million out of Mexico in a manner that effectively disguised the funds' sources and destination thus breaking the funds' paper trail. In routine fashion, Citibank set up a dummy offshore corporation, provided Salinas with a secret code name, provided an alias for a third party intermediary who deposited the money in a Citibank account in Mexico and transferred the money in a concentration account to New York where it was then moved to Switzerland and London. The PICs are designed by the big banks for the purpose of holding and hiding a person's assets. The nominal officers, trustees and shareholder of these shell corporations are themselves shell corporations controlled by the PB. The PIC then becomes the holder of the various bank and investment accounts and the ownership of the private bank clients is buried in the records of so-called jurisdiction such as the Cayman Islands. Private bankers of the big banks like Citibank keep pre-packaged PICs on the shelf awaiting activation when a private bank client wants one. The system works like Russian Matryoshka dolls, shells within shells within shells, which in the end can be impenetrable to a legal process. The complicity of the state in big bank money laundering is evident when one reviews the historic record. Big bank money laundering has been investigated, audited, criticized and subject to legislation; the banks have written procedures to comply. Yet banks like Citibank and the other big ten banks ignore the procedures and laws and the government ignores the non-compliance. Over the last 20 years, big bank laundering of criminal funds and looted funds has increased geometrically, dwarfing in size and rates of profit the activities in the formal economy. Estimates by experts place the rate of return in the PB market between 20-25% annually. Congressional investigations revealed that Citibank provided "services" for 4 political swindlers moving $380 million: Raul Salinas - $80-$100 million, Asif Ali Zardari (husband of former Prime Minister of Pakistan) in excess of $40 million, El Hadj Omar Bongo (dictator of Gabon since 1967) in excess of $130 million, the Abacha sons of General Abacha ex-dictator of Nigeria - in excess of $110 million. In all cases Citibank violated all of its own procedures and government guidelines: there was no client profile (review of client background), determination of the source of the funds, nor of any violations of country laws from which the money accrued. On the contrary, the bank facilitated the outflow in its prepackaged format: shell corporations were established, code names were provided, funds were moved through concentration accounts, the funds were invested in legitimate businesses or in U.S. bonds, etc. In none of these cases - or thousands of others - was due diligence practiced by the banks (under due diligence a private bank is obligated by law to take steps to ensure that it does not facilitate money laundering). In none of these cases were the top banking officials brought to court and tried. Even after arrest of their clients, Citibank continued to provide services, including the movement of funds to secret accounts and the provision of loans. Correspondent Banks: The Second Track The second and related route which the big banks use to launder hundreds of billions of dirty money is through "correspondent banking" (CB). CB is the provision of banking services by one bank to another bank. It is a highly profitable and significant sector of big banking. It enables overseas banks to conduct business and provide services for their customers - including drug dealers and others engaged in criminal activity - in jurisdictions like the U.S. where the banks have no physical presence. A bank that is licensed in a foreign country and has no office in the United States for its customers attracts and retains wealthy criminal clients interested in laundering money in the U.S. Instead of exposing itself to U.S. controls and incurring the high costs of locating in the U.S., the bank will open a correspondent account with an existing U.S. bank. By establishing such a relationship, the foreign bank (called a respondent) and through it, its criminal customers, receive many or all of the services offered by the U.S. big banks called the correspondent. Today, all the big U.S. banks have established multiple correspondent relationships throughout the world so they may engage in international financial transactions for themselves and their clients in places where they do have a physical presence. Many of the largest U.S. and European banks located in the financial centers of the world serve as correspondents for thousands of other banks. Most of the offshore banks laundering billions for criminal clients have accounts in the U.S. All the big banks specializing in international fund transfer are called money center banks, some of the biggest process up to $1 trillion in wire transfers a day. For the billionaire criminals an important feature of correspondent relationships is that they provide access to international transfer systems - that facilitate the rapid transfer of funds across international boundaries and within countries. The most recent estimates (1998) are that 60 offshore jurisdictions around the world licensed about 4,000 offshore banks which control approximately $5 trillion in assets. One of the major sources of impoverishment and crises in Africa, Asia, Latin America, Russia and the other countries of the ex-U.S.S.R. and Eastern Europe, is the pillage of the economy and the hundreds of billions of dollars which are transferred out of the country via the corresponding banking system and the Private Banking system linked to the biggest banks in the U.S. and Europe. Russia alone has seen over $200 billion illegally transferred in the course of the 1990s. The massive shift of capital from these countries to the U.S. and European banks has generated mass impoverishment and economic instability and crises. This in turn has created increased vulnerability to pressure from the IMF and World Bank to liberalize their banking and financial systems leading to further flight and deregulation which spawns greater corruption and overseas transfers via private banks as the Senate reports demonstrate. The increasing polarization of the world is embedded in this organized system of criminal and corrupt financial transactions. While speculation and foreign debt payments play a role in undermining living standards in the crisis regions, the multi-trillion dollar money laundering and bank servicing of corrupt officials is a much more significant factor, sustaining Western prosperity, U.S. empire building and financial stability. The scale, scope and time frame of transfers and money laundering, the centrality of the biggest banking enterprises and the complicity of the governments, strongly suggests that the dynamics of growth and stagnation, empire and re-colonization are intimately related to a new form of capitalism built around pillage, criminality, corruption and complicity. James Petras is a Professor of Sociology at Binghamton University in Binghamton, New York. He is the author of 57 books. His latest, Globalization Unmasked: Imperialism in the New Millenium
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