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The Global Banking ‘Super-Entity’ Drug Cartel: The “Free Market” of Finance Capital

The Global Banking ‘Super-Entity’ Drug Cartel: The “Free Market” of Finance Capital

By: Andrew Gavin Marshall

HSBC bankers testifying before U.S. Senate on laundering billions in drug money (photo courtesy of The Economist, 21 July 2012)

 

This essay is the product of research undertaken for the first volume of The People’s Book Project. Please donate to help the first volume come to completion: a study of the institutions, ideas, and individuals of power and resistance in a snap-shot of the world today, looking at the global economic crisis, war and empire, repression and the global spread of anti-austerity and resistance movements.

I would like to introduce you, the reader, to some realities of our global banking system, resting on the rhetoric of free markets, but functioning, in actuality, as a global cartel, a “super-entity” in which the world’s major banks all own each other and own the controlling shares in the world’s largest multinational corporations, influence governments and policy with politicians in their back pockets, routinely engaging in fraud and bribery, and launder hundreds of billions of dollars in drug money, not to mention arms dealing and terrorist financing. These are the “too big to fail” and “too big to jail” banks, the centre of our global economy, what we call a “free market,” implying that the global banks – and corporations – have “free reign” to do anything they please, engage in blatantly criminal activities, steal trillions in wealth which is hidden offshore, and never get more than a slap on the wrist. This is the real “free market,” a highly profitable global banking cartel, functioning as a worldwide financial Mafia.

Scientific Research Proves the Existence of a Global Financial “Super-Entity”

In October of 2011, New Scientist reported that a scientific study on the global financial system was undertaken by three complex systems theorists at the Swiss Federal Institute of Technology in Zurich, Switzerland. The conclusion of the study revealed what many theorists and observers have noted for years, decades, and indeed, even centuries: “An analysis of the relationships between 43,000 transnational corporations has identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy.” As one of the researchers stated, “Reality is so complex, we must move away from dogma, whether it’s conspiracy theories or free-market… Our analysis is reality-based.” Using a database which listed 37 million companies and investors worldwide, the researchers studied all 43,060 trans-national corporations (TNCs), including the share ownerships linking them.[1]

The mapping of ‘power’ was through the construction of a model showing which companies controlled which other companies through shareholdings. The web of ownership revealed a core of 1,318 companies with ties to two or more other companies. This ‘core’ was found to own roughly 80% of global revenues for the entire set of 43,000 TNCs. And then came what the researchers referred to as the “super-entity” of 147 tightly-knit companies, which all own each other, and collectively own 40% of the total wealth in the entire network. One of the researchers noted, “In effect, less than 1 per cent of the companies were able to control 40 per cent of the entire network.” This network poses a huge risk to the global economy, as, “If one [company] suffers distress… this propagates.” The study was undertaken with a data set established prior to the economic crisis, thus, as the financial crisis forced some banks to die (Lehman Bros.) and others to merge, the “super-entity” would now be even more connected, concentrated, and problematic for the economy.[2]

The top 50 companies on the list of the “super-entity” included (as of 2007): Barclays Plc (1), Capital Group Companies Inc (2), FMR Corporation (3), AXA (4), State Street Corporation (5), JP Morgan Chase & Co. (6), UBS AG (9), Merrill Lynch & Co Inc (10), Deutsche Bank (12), Credit Suisse Group (14), Bank of New York Mellon Corp (16), Goldman Sachs Group (18), Morgan Stanley (21), Société Générale (24), Bank of America Corporation (25), Lloyds TSB Group (26), Lehman Brothers Holdings (34), Sun Life Financial (35), ING Groep (41), BNP Paribas (46), and several others.[3]

In the United States, five banks control half the economy: JP Morgan Chase, Bank of America, Citigroup, Wells Fargo, and Goldman Sachs Group collectively held $8.5 trillion in assets at the end of 2011, which equals roughly 56% of the U.S. economy. This data was according to central bankers at the Federal Reserve. In 2007, the assets of the largest banks amounted to 43% of the U.S. economy. Thus, the crisis has made the banks bigger and more powerful than ever. Because the government invoked “too big to fail,” meaning that the big banks will be saved because they are very important, the big banks have incentive to make continued and bigger risks, because they will be bailed out in the end. Essentially, it’s an insurance policy for criminal risk-taking behaviour. The former president of the Federal Reserve Bank of Minneapolis stated, “Market participants believe that nothing has changed, that too-big-to-fail is fully intact.” Remember, “market” means the banking cartel (or “super-entity” if you prefer). Thus, they build new bubbles and buy government bonds (sovereign debt), making the global financial system increasingly insecure and at risk of a larger collapse than took place in 2008.[4]

When politicians, economists, and other refer to “financial markets,” they are in actuality referring to the “super-entity” of corporate-financial institutions which dominate, collectively, the global economy. For example, the role of financial markets in the debt crisis ravaging Europe over the past two years is often referred to as “market discipline,” with financial markets speculating against the ability of nations to repay their debt or interest, of credit ratings agencies downgrading the credit-worthiness of nations, of higher yields on sovereign bonds (higher interest on government debt), and plunging the country deeper into crisis, thus forcing its political class to impose austerity and structural adjustment measures in order to restore “market confidence.” This process is called “market discipline,” but is more accurately, “financial terrorism” or “market warfare,” with the term “market” referring specifically to the “super-entity.” Whatever you call it, market discipline is ultimately a euphemism for class war.[5]

The Global Supra-Government and the “Free Market”

In December of 2011, Roger Altman, the former Deputy Secretary of the Treasury under the Clinton administration wrote an article for the Financial Times in which he explained that financial markets were “acting like a global supra-government,” noting:

They oust entrenched regimes where normal political processes could not do so. They force austerity, banking bail-outs and other major policy changes. Their influence dwarfs multilateral institutions such as the International Monetary Fund. Indeed, leaving aside unusable nuclear weapons, they have become the most powerful force on earth.[6]

Altman continued, explaining that when the power of this “global supra-government” is flexed, “the immediate impact on society can be painful – wider unemployment, for example, frequently results and governments fail.” But of course, being a former top Treasury Department official, he went on to endorse the global supra-government, writing, “the longer-term effects can be often transformative and positive.” Ominously, Altman concluded: “Whether this power is healthy or not is beside the point. It is permanent,” and “there is no stopping the new policing role of the financial markets.”[7] In other words, the ‘super-entity’ global ‘supra-government’ of financial markets carries out financial extortion, overthrows governments and impoverishes populations, but this is ultimately “positive” and “permanent,” at least from the view of a former Treasury Department official. From the point of view of those who are being impoverished, the actual populations, “positive” is not necessarily the word that comes to mind.

In the age of globalization, money – or capital – flows easily across borders, with banks, hedge funds and other financial institutions acting as the vanguards of a new international order of global governance. Where finance goes, corporations follow; where corporations venture, powerful states stand guard of their interests. Our global system is one of state-capitalism, where the state and corporate interests are interdependent and mutually beneficial, at least for those in power. Today, financial institutions – with banks at the helm – have reached unprecedented power and influence in state capitalist societies. The banks are bigger than ever before in history, guarded by an insurance policy that we call “too big to fail,” which means that despite their criminal and reckless behaviour, the government will step in to bail them out, as it always has. Financial markets also include credit ratings agencies, which determine the supposed “credit-worthiness” of other banks, corporations, and entire nations. The lower the credit rating, the riskier the investment, and thus, the higher the interest is for that entity to borrow money. Countries that do not follow the dictates of the “financial market” are punished with lower credit ratings, higher interest, speculative attacks, and in the cases of Greece and Italy in November of 2011, their democratically-elected governments are simply removed and replaced with technocratic administrations made up of bankers and economists who then push through austerity and adjustment policies that impoverish and exploit their populations. In the age of the “super-entity” global “supra-government,” there is no time to rattle around with the pesky process of formal liberal democracy; they mean business, and if your elected governments do not succumb to “market discipline,” they will be removed and replaced in what – under any other circumstances – is referred to as a ‘coup.’

Banks and financial institutions provide the liquidity – or funds – for what we call “free markets.” Free markets in principle would allow for free competition between companies and countries, each producing their own comparative advantage – producing what they are best at – and trading with others in the international market, so that all parties rise in living standards and wealth together. The “free market” is, of course, pure mythology. In practice, what we call “free markets” are actually highly protectionist, regimented, regulated, and designed to undermine competition and enforce monopolization. The “free markets” serve this purpose for the benefit of large multinational corporations and banks.

When we use the term “free markets” we are generally referring to the “real” economy, legitimate and legal. When it comes to illegitimate markets, for example, the global drug trade, we do not tend to refer to them as “free markets” but rather, “illegal” and run by “cartels.” Cartels, like corporations, are hierarchically organized totalitarian institutions, where decisions and power and exercised from the top-down, with essentially no input going from the bottom-up. Large multinational corporations, like large international cartels, seek to control their particular market throughout entire nations, regions, and beyond. Often, co-operation between corporations allow them to function in an oligopolistic manner, where the collectively dominate the entire market, carving it up between them. Major oil companies, agro-industrial firms, telecommunications, pharmaceutical, military contractors and water management corporations are well-known for these types of activities.

Cartels have often been known to engage in a similar practice, though typically they are more competitive with each other. When interests are threatened – which is defined as when a corporation or cartel is at risk of losing its total dominance of its market in a particular region – conflict arises, and often violently so, with the potential for coups, assassinations, terror campaigns, and war. This is when the state intervenes to protect the market for the cartel or corporate interests. Thus, a market like the global drug trade functions relatively similar to those of the “legitimate” economy, pharmaceuticals, energy, technology, etc. The illicit trade in drugs is as much a “free market” as is the trade in automobiles or oil. And of course, the money ends up in the same place: the global supra-government of “financial markets.”

Banking Cartel or Drug Cartel… or What’s the Difference?

In 2009, the United Nations Office on Drugs and Crime reported that billions of dollars in drug money saved the major banks during the financial crisis, providing much-needed liquidity. Antonio Maria Costa, the head of the UN Office on Drugs and Crime stated that drug money was “the only liquid investment capital” available to banks on the brink of collapse, with roughly $325 billion in drug money absorbed by the financial system. Without identifying specific countries or banks, Costa stated that, “Inter-bank loans were funded by money that originated from the drugs trade and other illegal activities… There were signs that some banks were rescued that way.”[8]

In 2010, Wachovia Bank (now owned by Wells Fargo) settled the largest action ever under the U.S. bank secrecy act, paying a fine of $50 million plus forfeiting $110 million of drug money, of which the bank laundered roughly $378.4 billion out of Mexico. The federal prosecutor in the case stated, “Wachovia’s blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations.” The fine that the bank paid for laundering hundreds of billions of dollars in drug money was less than 2% of the bank’s 2009 profit, and on the same week of the settlement, Wells Fargo’s stock actually went up. The bank admitted in a statement of settlement that, “As early as 2004, Wachovia understood the risk” of holding such an account, but “despite these warnings, Wachovia remained in the business.” The leading investigator into the money laundering operations, Martin Woods, based out of London, had discovered that Wachovia had received roughly six or seven thousand subpoenas for information about its Mexican operation from the federal government, of which Woods commented: “An absurd number. So at what point does someone at the highest level not get the feeling that something is very, very wrong?” Woods had been hired by Wachovia’s London branch as a senior anti-money laundering officer in 2005, and when in 2007 an official investigation was opened into Wachovia’s Mexican operations, Woods was informed by the bank that he failed “to perform at an acceptable standard.” In other words, he was actually doing his job. In regards to the settlement, Woods stated:

The regulatory authorities do not have to spend any more time on it, and they don’t have to push it as far as a criminal trial. They just issue criminal proceedings, and settle. The law enforcement people do what they are supposed to do, but what’s the point? All those people dealing with all that money from drug-trafficking and murder, and no one goes to jail?[9]

As the former UN Office of Drugs and Crime czar Antonio Maria Costa said, “The connection between organized crime and financial institutions started in the late 1970s, early 1980s… when the mafia became globalized,” just like other major markets. Martin Woods added that, “These are the proceeds of murder and misery in Mexico, and of drugs sold around the world,” yet no one went to jail, asking, “What does the settlement do to fight the cartels? Nothing – it doesn’t make the job of law enforcement easier and it encourages the cartels and anyone who wants to make money by laundering their blood dollars. Where’s the risk? There is none.” He added: “Is it in the interest of the American people to encourage both the drug cartels and the banks in this way? Is it in the interest of the Mexican people? It’s simple: if you don’t see the correlation between the money laundering by banks and the 30,000 people killed in Mexico, you’re missing the point.” Woods, who now runs his own consultancy, told the Observer in 2011 that, “New York and London… have become the world’s two biggest laundries of criminal and drug money, and offshore tax havens. Not the Cayman Islands, not the Isle of Man or Jersey. The big laundering is right through the City of London and Wall Street.”[10]

Just as the “too big to fail” program acts as an insurance policy for the big banks to engage in constant criminal activity, taking ever-larger financial risks with the guarantee that they will be bailed out, the settlements and lack of criminal prosecutions for banks laundering drug money provides the incentive to continue laundering hundreds of billions in drug money, because so long as the fine is smaller than the profit accrued from such a practice, it comes down to a simple cost-benefit analysis: if the cost of laundering drug money is less than the benefit, continue with the policy. The same cost-benefit analysis goes for all forms of criminal activity by banks and corporations, whether bribery, fraud, or violating environmental, labour and other regulations. So long as the penalty is less than the profit, the problem continues.

An article in the Observer from July of 2012 referred to global banks as “the financial services wing of the drug cartels,” noting that HSBC, Britain’s biggest bank, had been called before the U.S. Senate to testify about laundering drug money from Mexican cartels, holding one “suspicious account” for four years on behalf of the largest drug cartel in the world, the Sinaloa cartel in Mexico.[11] In fact, a multi-year investigation into HSBC revealed that the bank was not only a major international drug money-laundering conduit, but also laundered money for clients with ties to terrorism. In July of 2012, as the Senate was publicly investigating HSBC, Antonio Maria Costa stated, “Today I cannot think of one bank in the world that has not been penetrated by mafia money.” The global drug trade is estimated to be worth roughly $380 billion annually, with most of the money made in the consumer markets of North America and Europe. Using the example of the $35 billion per year cocaine market in the United States, only about 1.5% of these profits make their way to the coca-leaf producers (mostly poor peasants) in South America (who became the target of our bombing and chemical warfare campaigns in the “war on drugs”), while the international traffickers get roughly 13% of the profits, with the remaining 85% earned by the distributors in the U.S. HSBC was accused of laundering the profits of the distributors.[12]

The U.S. Senate report concluded that HSBC had exposed the U.S. financial system to “a wide array of money laundering, drug trafficking, and terrorist financing,” including billions in “proceeds from illegal drug sales in the United States.” HSBC acknowledged, in an official statement, that, “in the past, we have sometimes failed to meet the standards that regulators and customers expect.” Among those “standards” that HSBC “sometimes failed to meet,” according to the Senate investigation, were financing provided to banks in Saudi Arabia and Bangladesh which were tied to terrorist organizations, while the bank’s regulator failed to take a single enforcement action against HSBC.[13] Among the terrorist organizations which potentially received financial assistance from HSBC through Saudi banks was al-Qaeda. HSBC put aside $700 million to cover any potential fines for such activities, which is not uncommon for banks to do. Banks like ABN Amro, Barclays, Credit Suisse, Lloyds and ING had all reached major settlements for admitting to facilitating transactions and engaging in money laundering for clients in Cuba, Iran, Libya, Myanmar and Sudan.[14]

As executives from HSBC appeared in the U.S. Senate, the bank’s head of compliance since 2002, David Bagley, resigned as he testified before the committee, commenting, “Despite the best efforts and intentions of many dedicated professionals, HSBC has fallen short of our own expectations and the expectations of our regulators.”[15] As Ed Vulliamy reported in the Observer, in May of 2012, a poor black man named Edward Dorsey Sr. was convicted of peddling 5.5 grams of crack cocaine in Washington D.C. and was given 10 years in jail. Meanwhile, just across the river from where Dorsey had committed his crime, executives from HSBC admitted before the U.S. Senate that they laundered billions in drug money, just as Wachovia had admitted to the previous year, with no one going to prison.[16] The lesson from this is clear: if you are poor, black, and are caught with a couple grams of crack-cocaine, you can expect to go to prison for several years (or in this case, a decade); but if you are rich, white, own a bank, and are caught laundering billions of dollars (or hundreds of billions of dollars) in drug money, you will be fined (but not enough to make such practices unprofitable), and may have to resign. Too big to fail is simply another way of saying “too big to jail.”

Of course, it’s not fair to put all the blame for international drug money-laundering on the shoulders of HSBC and Wachovia, as Bloomberg reported, Mexican drug cartels also funneled money through the Bank of America and even the banking branch of American Express, Banco Santander, and Citigroup.[17] Even the FBI has accused Bank of America of laundering Mexican drug cartel funds.[18] But it’s not just drug money that banks launder; all sorts of illicit funds are laundered through major banks, many of which have been fined or are now being investigated for their criminal activities, including JPMorgan, Standard Chartered, Credit Suisse, Lloyds, Barclays, ING, and the Royal Bank of Scotland, among others.[19] Another major Swiss bank, UBS, has been very consistent in committing fraud and engaging in various conspiracies, a great deal of which was committed against Americans, though the bank was given “conditional immunity” from the U.S. Department of Justice.[20]

Financial Fraud and the ‘Get Out of Jail Free Card’

The major banks of the world have been caught in conspiracies of ripping off small towns and cities across the United States, which allowed banks like JPMorgan Chase, GE Capital, UBS, Bank of America, Lehman Brothers, Wachovia, Bear Stearns, and others, to steal billions of dollars from schools, hospitals, libraries, and nursing homes from “virtually every state, district and territory in the United States,” according to a court settlement on the issue. The theft was done through the manipulation of the public bidding process, something that the Mafia has become experts in with regards to garbage and construction industry contracts. In short, the banking system actually functions like a Mafia cartel system, not to mention, taking money from the Mafia and cartels themselves.[21] Banks like JP Morgan Chase and Goldman Sachs engaged in bribery, fraud, and conspiracies which resulted in the bankruptcy of counties all across the United States.[22] Still, they continue to be ‘respected’ by the political class which refuses to punish them for their criminal activity, and instead, rewards them with bailouts and follows their instructions for policy.

Over the summer of 2012, another major banking scandal hit the headlines, regarding the manipulation of the London inter-bank lending rate known as the Libor. The Libor rate, explained the Economist, “determines the prices that people and corporations around the world pay for loans or receive for their savings,” as it is used as a benchmark for establishing payments on an $800 trillion derivatives market, covering everything from interest rate derivatives to mortgages. Essentially, the Libor is the interest rate at which banks lend to each other on the short term, and is established through an “honour system” of where 18 major banks report their daily rates, from which an average is calculated. That average becomes the Libor rate, and reverberates throughout the entire global economy, setting a benchmark for a massive amount of transactions in the global derivatives market. Whereas the derivatives market is a massive casino of unregulated speculation, the Libor scandal revealed the cartel that owns the casino.

The scandal began with Barclays, a 300-year old bank in Britain, revealing that several employees had been involved in rigging the Libor to suit their own needs. More banks quickly became implemented, and countries all over the world began opening investigations into this scandal and the role their own banks may have played in it. By early July, as many as 20 major banks were named in various investigations or lawsuits related to the rigging of the Libor.[23]

Among the major global banks which are being investigated by U.S. prosecutors are Barclays, Deutsche Bank, Citigroup, JPMorgan Chase, Royal Bank of Scotland, HSBC, UBS, Bank of America, Bank of Tokyo Mitsubishi, Credit Suisse, Lloyds Banking Group, Rabobank, Royal Bank of Canada, Société Générale, and others. Prosecutors in the U.S., U.K., Canada and Japan were investigating collusion between the major banks on the manipulation of the Libor. In June of 2012, Barclays paid a fine to US and UK authorities, admitting its culpability in the rigging with a $450 million settlement.[24] With information and documents pouring out, implicating further banks and institutions in the scandal, a general consensus was emerging that the Libor had been manipulated since at least 2005, though, as one former Morgan Stanley trader wrote in the Financial Times, the rigging had began as early as 1991, if not before. The British Banker’s Association was responsible for setting the Libor rate by polling roughly 18 major banks on their highest and lowest rates daily. Thus, rigging by one bank would require the co-operating of at least nine other banks in purposely manipulating their rates in order to have any effect upon the Libor. Douglas Keenan, the former Morgan Stanley trader, wrote that, “it seems the misreporting of Libor rates may have been common practice since at least 1991.”[25]

Rolf Majcen, the head of a hedge fund called FTC Capital told Der Spiegel that, “the Libor manipulation is presumably the biggest financial scandal ever.” As regulators were using words like “organized fraud” and “banksters” to describe the growing scandal, it was becoming common to refer to the major banks as functioning like a “cartel” or “mafia.”[26] The CEO of Barclays, Bob Diamond, resigned in disgrace, as did Marcus Agius, the Chairman of Barclays (who also serves as a director on the board of BBC, and is married into the Rothschild banking dynasty). The “cartel” manipulated the Libor for a great number of reasons, among them, to appear to be in better health by rigging their credit ratings upwards.[27] The Business Insider referred to the Libor rigging as a “criminal conspiracy” from the start, essentially designed to promote manipulation as the Libor was determined by an “honor system” for banks to properly report their rates.[28] Imagine giving a pile of credit cards to a group of credit card fraud convicts and establishing an “honour system.” Could one truly be surprised if it didn’t work out? Well, the Libor scandal is effectively based upon the same logic, except that the repercussions are global in scope.

Traders at the Royal Bank of Scotland referenced, in internal emails, to their participation in operating a “cartel” that made “amazing” amounts of money through the manipulation of interest rates, with a former senior trader at RBS writing that managers at the bank had “condoned collusion.” The same trader, who was later hung out to dry by RBS as a scapegoat, wrote in an email to a trader at Deutsche Bank that, “It is a cartel now in London,” where the Libor is established.[29]

The cartel, however, did not simply include the major banks, but also required the cooperation or at least negligence of regulators and central banks. Documents released by the Federal Reserve Bank of New York and the Bank of England show correspondence between then-President of the NY Fed Timothy Geithner (who is now Obama’s Treasury Secretary) and Bank of England Governor Mervyn King discussing how Barclays was manipulating the Libor rates during the 2008 financial crisis. While the NY Fed corresponded with both the Bank of England and Barclays itself on the acknowledgment of interest rate manipulation, it never told the bank to stop the rigging practice. An official at Barclays even informed the NYFed in 2008 that the bank was under-reporting the rate at which it could borrow from other banks so that Barclays could “avoid the stigma” of appearing to be weaker than its peers, adding that “other participating banks were also under-reporting their Libor submissions.”[30]

A Barclays employee told the New York Fed in an April 2008 phone call that, “We know that we’re not posting um, an honest Libor… and yet we are doing it, because, um, if we didn’t do it, it draws, um, unwanted attention on ourselves.” The New York Fed official replied: “You have to accept it… I understand. Despite it’s against what you would like to do. I understand completely.” Several months later, a Barclays employee told a New York Fed official that the Libor rates were still “absolute rubbish.”[31]

While the New York Fed expressed sympathy for the poor and helpless global banks need to engage in fraud and interest rate manipulation in order to lie and appear to be healthier than it was, the Bank of England went a step further, when Paul Tucker, the head of markets at the BoE wrote a note to Barclays CEO Bob Diamond in 2008 suggesting that Barclays lower its Libor rate, thus encouraging the rigging itself, instead of just expressing sympathy for the “need” to commit fraud.[32]

The main British banking lobby group, the British Banker’s Association (BBA), which was responsible for overseeing the Libor rate process (no conflict of interest there, right?), was, in late September of 2012, stripped of its right to oversee the Libor, to be replaced with a formal regulator. The BBA’s “oversight” of Libor dates back to 1984, when the City of London (Britain’s Wall Street) had begun an experiment to establish a new way of setting interest rates, asking the banking lobby group to set the rate in 1986 when the Libor began.[33] The BBA’s Foreign Exchange and Money Markets Committee is responsible for setting the Libor, and they meet every two months to review the process in secret without any minutes being published, and even the membership of the Committee is kept a secret. Spokespersons at Credit Suisse, Royal Bank of Scotland, and UBS refused to comment on whether they had any representatives on the committee, while Barclays, Deutsche Bank, HSBC, Bank of America and Citigroup didn’t even respond to emailed inquiries about their involvement with the committee, as Bloomberg reported. A British regulator, in the understatement of the century, stated, “There is an apparent lack of transparency,” adding that the BBA’s committee “doesn’t appear to be sufficiently open and transparent to provide the necessary degree of accountability to firms and markets with a direct interest in being assured of the integrity of Libor.”[34] When the fox guards the henhouse, it takes a great deal of stupidity to be “surprised” when some hens go missing.

In an April 2008 meeting with officials at the Bank of England, Angela Knight, the head of the British Banker’s Association, suggested that the BBA perhaps should no longer be responsible for oversight of “the world’s most important number,” which had become too big for the BBA to manage. No one at the meeting cared enough to do anything about it, however, and so nothing changed.[35] Where was the incentive to change the system, after all? Yes, massive fraud was taking place, and this was well understood by the banks committing it, as well as the regulators and central banks overseeing it. But on the plus side, everyone was getting away with it. So indeed, there was no incentive to change the system. From the point of view of those managing it, the Libor was functioning as it should. A cartel was established because a cartel was desired. The fact that it was all highly illegal, fraudulent, and immoral was – and is – beside the point. Mexican drug cartels do not worry about the legality of their operations because they are, by definition, illegal. They worry simply about getting away with their illegal operations. The same can be said for the global banking cartel. So long as they get away with criminal cartel operations, there is no incentive to change the system, and instead, there is only an incentive to expand and further entrench the cartel’s operations.

Canada’s antitrust regulator began an investigation into the “international cartel” of banks rigging the Libor, focusing on the role played by banks such as JP Morgan Chase, Royal bank of Scotland, Deutsche Bank, HSBC, and Citigroup, among others. A law professor at the University of Toronto who was hired by the regulator to study the case commented that, “international cartels are of a significant concern for the Canadian economy.”[36] We have truly reached an impressive circumstance when the actual regulators of the banks refer to the banking system as an “international cartel.”

A lawsuit was being filed by several homeowners in the U.S. who were attempting to sue some of the world’s largest banks for fraud, as the Libor manipulation sparked increases on their mortgages, resulting in illegal profits for banks. The class action lawsuit filed in New York in October of 2012 accused banks such as Bank of America, Citigroup, Barclays, UBS, JPMorgan Chase, Deutsche Bank and others of fraud over a period of ten years.[37] For U.S. states and municipalities that bought interest-rate swaps before the financial crisis, the Libor rigging was poised to more than double their losses. Banks had sold roughly $500 billion of interest-rate swaps (in the derivatives market) to municipalities before the financial crisis, with roughly $200 billion of those swaps tied to the Libor. As one legal expert who studies derivatives told Bloomberg, “Almost all interest-rate swaps begin with Libor.” This prompted several states in the U.S. to begin their own investigations into how the Libor-rigging may have negatively affected them.[38]

Punishing the World’s Population into Poverty: Life Under the Global Cartel

While the global cartel of criminal banks rig rates, launder drug money, fund terrorists, engage in bribery, fraud and demand multi-trillion dollar bailouts from our governments (effectively selling their bad debts to the public), and then give themselves massive bonuses, they are also demanding – through what is called “market discipline” – that our governments deal with our debts by undertaking policies of “austerity” and “structural reform,” which are euphemisms for impoverishment and exploitation. Thus, after the cartel helped create a massive financial crisis, and after our governments rewarded them for their criminal activity, the cartel now demands that our governments punish their populations into poverty and open their economies, resources and labour up for cheap and easy exploitation by banks and multinational corporations. This is referred to as the “solution” for getting out of the ‘Great Recession,’ and which is sure to great a Great Depression. Greece is now two and a half years into its “austerity” and “adjustment” reforms, with its debt growing as a result, poverty exploding, misery spreading, health, education, welfare rapidly declining, suicide rates and hunger increasing, as the Greek people are subjected to a program of “social genocide.” Market discipline demands austerity and adjustment, or in other words, class warfare creates poverty and exploitation.[39]

Countries that refuse to implement programs of austerity and adjustment are subjected to financial terrorism by the “international cartel,” as financial markets engage in “market discipline” by using the derivatives market to speculate against that particular country’s ability to pay its interest or debt, thus making its credit ratings decrease and borrowing rates increase, plunging the country into a deeper crisis. In any other scenario, this is called terrorism or in the very least, extortion: do what I say or I will punish you and destroy you. This is what former U.S. Treasury official Roger Altman referred to in the Financial Times as the new “global supra-government” who can “force austerity, banking bail-outs and other major policy changes,” and thus, “have become the most powerful force on earth.”[40] Countries, regional, and international organizations all bow down to the dictates of the “international cartel” of the “global supra-government,” and so countries like Greece, Spain, Ireland, Italy, and Portugal, organizations like the European Union, European Central Bank, powerful states like Germany, France, Britain, and the U.S., and other international organizations like the IMF, Bank for International Settlements, and the OECD all demand and implement austerity measures and structural “reforms.” Either they follow the orders of the “cartel” – which we commonly refer to as the “invisible hand” of the “free market – or they directly challenge “the most powerful force on earth.” In the global economy, a small country like Greece standing up to the “global supra-government” is much like a small Greek restaurant trying to stand up to the city Mafia.

In the U.S., states that were defrauded in the billions of dollars by the cartel, and took on major debts as a result, are now the harbingers of austerity in America. Beginning in 2010, roughly 20 states across the U.S. began implementing austerity measures, and have been doing much worse economically as a result (the predicted effect of austerity). Even the institutions which are the most militant in demanding austerity measures, such as the European Union and the IMF, have acknowledged in recent reports that countries which pursue austerity to supposedly reduce their debts end up getting much larger debts as a result, and that such measures are actually extremely damaging to economies. This is not news, of course, since there is a rather large sample of data from the past 30 years of forced austerity and adjustment measures across Africa, Asia, and Latin America (at the behest of the IMF, World Bank, western governments, and of course, the “cartel”), which show quite clearly the effect that austerity and adjustment have in rapidly expanding poverty and facilitating exploitation. As austerity is hitting several U.S. states, jobs are lost and poverty increases with debt, standards of living decline and the recession deepens into a depression. The population is essentially punished for the crimes of the global cartel, while public employees, pensioners, welfare recipients, teachers and workers get the blame.[41]

In late October of 2012, the CEOs of 80 major corporations and banks in the United States banded together (as any well functioning cartel does) in order to pressure Congress, regardless of who the next President is, to pursue an agenda of harsh austerity measures and structural reforms. In a statement to Congress signed by the 80 CEOs, the American branch of the global cartel (its most significant branch), demanded that policies be enacted immediately, though implemented gradually, “to give Americans time to prepare for the changes in the federal budget.” Among the demands are to reform Medicare and Medicaid, healthcare, Social Security, increase taxes, and generally reduce spending. All of this amounts to a large federal program of austerity, to cut social spending and increase taxes on the population, thus impoverishing the population. This, in the words of the letter to Congress, “must be bipartisan and reforms to all areas of the budget should be included.”[42] Among the signatories to the letter were the CEOs of AT&T, Bank of America, BlackRock, Boeing, Caterpillar, Dow Chemical Company, General Electric, Goldman Sachs, JPMorgan Chase, Merck, Microsoft, Motorola, Time Warner, and Verizon, among many others.[43]

This followed roughly one week after a group of 15 major global bank CEOs sent a letter to President Obama and the U.S. Congress lecturing the U.S. political class on “moral authority,” giving their formal orders to the U.S. political establishment, that regardless of Democratic or Republican administrations, they are losing patience with the democratic apparatus of the state, and warned: “The solvency, productive capacity, and stability of the United States, as well as its moral authority as a global leader, require that its fiscal challenges be credibly met.” Among the signatories to the letter were the CEOs of Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo. The Wall Street Journal, reporting on this letter, commented that even for “a dying democracy, it’s embarrassing enough to see bankers telling our government what to do,” but in this letter, “we even see foreign bankers telling our government what to do,” as other CEOs of the global cartel signed the letter, from banks such as UBS, Credit Suisse, and Deutsche Bank. The “consequences of inaction” on the U.S. debt, read the letter, “would be very grave.” In other words, the U.S. political class has received a threat from the global cartel that it is now time to implement austerity and adjustment measures, or to face the consequences of financial terrorism.[44]

Hiding the Loot: The Offshore Economy in the Age of the Global Plutonomy

While people are being forced into poverty to pay off the bad debts of the “super-entity” global banking cartel of drug-money laundering banks which make up the “global supra-government,” the richest people in the world have been hiding their wealth in offshore tax havens, and of course, with the help of those same banks. James Henry, a former chief economist at McKinsey, a major global consultancy, published a major report on tax havens in July of 2012 for the Tax Justice Network, compiling data from the Bank for International Settlements (BIS), the IMF and other private sector entities which revealed that the world’s superrich have hidden between $21 and $32 trillion offshore to avoid taxation. Henry stated: “This offshore economy is large enough to have a major impact on estimates of inequality of wealth and income; on estimates of national income and debt ratios; and – most importantly – to have very significant negative impacts on the domestic tax bases of ‘source’ countries.” John Christensen of the Tax Justice Network commented that, “Inequality is much, much worse than official statistics show, but politicians are still relying on trickle-down to transfer wealth to poorer people… This new data shows the exact opposite has happened: for three decades extraordinary wealth has been cascading into the offshore accounts of a tiny number of super-rich.” Roughly 92,000 of the super-rich, globally, hold at least $10 trillion in offshore wealth. In many cases, the worth of these offshore assets far exceeds the debts of the countries that they flow from, the same debts that are used to keep these countries and their populations in poverty and a constant state of exploitation.[45]

The estimated total of hidden offshore wealth amounts to more than the combined GDP of the United States and Japan, hidden in secretive financial jurisdictions like Switzerland and the Cayman Islands. The process of hiding this wealth is largely facilitated by the major global banks, which compete with one another to attract the assets of the world’s super-rich. James Henry explained that the wealth of the world’s super-rich is “protected by a highly paid, industrious bevy of professional enablers in the private banking, legal, accounting and investment industries taking advantage of the increasingly borderless, frictionless global economy;” more of that “free market” magic. The top ten banks in the world, which include UBS and Credit Suisse (based in Switzerland) as well as Goldman Sachs in the United States, collectively managed roughly $6.4 trillion in offshore accounts for 2010 alone. As the report revealed, “for many developing countries the cumulative value of the capital that has flowed out of their economies since the 1970s would be more than enough to pay off their debts to the rest of the world,” debts which are largely illegitimate as it stands. This trend is exacerbated in the oil-rich states of the world such as Nigeria, Russia, and Saudi Arabia. The report stated: “The problem here is that the assets of these countries are held by a small number of wealthy individuals while the debts are shouldered by the ordinary people of these countries through their governments.” With roughly half of the world’s offshore wealth belonging to the top 92,000 richest individuals, they represent the top 0.001%, a far more extreme global disparity than that which is invoked by the Occupy movement’s 1% paradigm. Henry commented: “The very existence of the global offshore industry, and the tax-free status of the enormous sums invested by their wealthy clients, is predicated on secrecy.”[46] Remember, “free market” means that those who own the market (the global cartel), and free to do anything they please.

A 2005 report from Citigroup coined the term “plutonomy,” to describe countries “where economic growth is powered by and largely consumed by the wealthy few,” and specifically identified the U.K., Canada, Australia, and the United States as four plutonomies. Keeping in mind that the report was published three years before the onset of the financial crisis in 2008, the Citigroup report stated: “Asset booms, a rising profit share and favourable treatment by market-friendly governments have allowed the rich to prosper and become a greater share of the economy in the plutonomy countries,” and that, “the rich are in great shape, financially.”[47] It’s only everyone else that is suffering, which by definition, is a “well functioning” economy. As the Federal Reserve reported, “the nation’s top 1% of households own more than half the nation’s stocks,” and “they also control more than $16 trillion in wealth — more than the bottom 90%.” The term ‘Plutonomy’ is specifically used to “describe a country that is defined by massive income and wealth inequality,” and that they have three basic characteristics, according to the Citigroup report:

1. They are all created by “disruptive technology-driven productivity gains, creative financial innovation, capitalist friendly cooperative governments, immigrants…the rule of law and patenting inventions. Often these wealth waves involve great complexity exploited best by the rich and educated of the time.”

2. There is no “average” consumer in Plutonomies. There is only the rich “and everyone else.” The rich account for a disproportionate chunk of the economy, while the non-rich account for “surprisingly small bites of the national pie.” [Citigroup strategist Ajay] Kapur estimates that in 2005, the richest 20% may have been responsible for 60% of total spending.

3. Plutonomies are likely to grow in the future, fed by capitalist-friendly governments, more technology-driven productivity and globalization.[48]

Kapur, who authored the Citigroup report, stated that there were also risks to the Plutonomy, “including war, inflation, financial crises, the end of the technological revolution and populist political pressure,” yet, “the rich are likely to keep getting even richer, and enjoy an even greater share of the wealth pie over the coming years.”[49]

In February of 2011, Ajay Kapur, the author of the Citigroup report who is now with Deutsche Bank, gave an interview in which he explained that, “the world economy is even more dependent on the spending and consumption of the rich,” and that, “Plutonomist consumption is almost 10 times as volatile that of the average consumer.” He further explained that increased debt levels are a sign of plutonomies:

We have an economy today where a large fraction of the population doesn’t pay federal income taxes and, because of demand for entitlements, we have a system of massive representation without taxation. On the other hand, you have plutonomists who protect their turf and the taxation amounts are not enough to pay for everyone’s demand. So I’ve come to the conclusion that budget deficits are biased toward getting bigger and bigger. Budget deficits are going to become a manifestation of a plutonomy.[50]

The plutonomy is largely characterized by a lack of a consuming and vibrant middle class. This is a trend that has been accelerating for several decades, particularly in North America and Britain, where the middle class population is heavily indebted. The middle class has existed as a consumer class, keeping the lower class submissive, and keeping the upper class secure and wealthy by consuming their products, produced with the labour of the lower class.

The most advanced plutonomies in the world are the most advanced industrial and technological nations, where the major corporations and banks are highly subsidized and protected by the state, as is typical for a state-capitalist society. While the industrial and rich northern state-capitalist societies were able to industrialize and grow rich through highly protectionist measures, the poor south of the world (Africa, Asia, Latin America) were subjected to “free market” policies which opened up their economies to be exploited and plundered by the rich northern nations. No country has ever become an industrial power by implementing free market policies, but rather, by doing the exact opposite: heavy subsidies and state protection for key industries, technologies, and corporate entities.

While the ‘Third World’ was forced to implement “free market” policies in order to get loans, the predictable result took place: mass impoverishment and exploitation. The ‘Third World’ states were run by tiny elites who dominated the countries politically and economically, and who hid their stolen wealth in foreign banks and offshore tax havens. Now, in the midst of the global economic crisis which has been ravaging the world for the past four years, the rich northern countries are themselves implementing the same “free market” policies, though designed to subject their populations to “market discipline” while maintaining – and in fact increasing – the protectionist and subsidized policies for the multinational corporations and banks. It is important to note that “market discipline” and actual “free market” policies are exclusively designed for the general population, not the elite. Workers, students, the elderly, the poor and the many are to be subjected to “market discipline” while the banks and multinational corporations continue to be heavily subsidized (as the largest national welfare recipients) and protected by the state. Thus, just as our banks and corporations have plundered the Third World with rapacious delight over the past three decades, now they will be able to do the same to the populations of the rich nations themselves. The state will transform, as it did in the ‘Third World’, into a typically totalitarian institution which is responsible for protecting the super-rich and controlling, oppressing, or, in extreme cases of resistance, eliminating the ‘problem populations’ (i.e., the people).

Welcome to the global plutonomy in the age of austerity, the result of living under – and tolerating – a global “super-entity” corporate-financial cartel. Truly, one must pause and, if only for a moment, appreciate the ability of this global cartel to function so effectively in spite of its blatant criminal activities, and face almost absolutely no repercussions. Something truly is wrong with a society when a poor black man caught with 5 grams of crack-cocaine goes to prison for ten years, while rich white bank executives admit to laundering billions of dollars in drug money and receive only a fine and a slap on the wrist (maybe).

The lesson is clear: if you are a thief, steal by the billions or trillions, and then no one can do anything about it. If you are in the drug trade: handle only billions (or hundreds of billions) in drug money, and then you will get away with it. If you don’t want to pay taxes, be a member of the top o.oo1% of the world’s super-rich and hide your billions in offshore tax-free accounts. If you want more, create a global economic crisis, demand to be saved by the state to the tune of tens of trillions of dollars, and then, tell the state to punish their populations into poverty in order to pay for your mistakes.

In other words, if you want to indulge your criminal fantasies, lie and steal, profit from death and drugs, dominate and demand, be king and command, become the highly-functioning socially-acceptable sociopath you always knew you could be… think big. Think BANK. Serial killers, bank robbers and drug dealers go to jail; bankers get bailouts and get an unlimited insurance policy called “too big to fail.”

Andrew Gavin Marshall is an independent researcher and writer based in Montreal, Canada, writing on a number of social, political, economic, and historical issues. He is also Project Manager of The People’s Book Project. He also hosts a weekly podcast show, “Empire, Power, and People,” on BoilingFrogsPost.com.

 

Notes

[1]       Andy Coghlan and Debora MacKenzie, “Revealed – the capitalist network that runs the world,” New Scientist, 24 October 2011:

http://www.newscientist.com/article/mg21228354.500-revealed–the-capitalist-network-that-runs-the-world.html

[2]       Ibid.

[3]       Ibid.

[4]       David J. Lynch, “Banks Seen Dangerous Defying Obama’s Too-Big-to-Fail Move,” Bloomberg, 16 April 2012:

http://www.bloomberg.com/news/2012-04-16/obama-bid-to-end-too-big-to-fail-undercut-as-banks-grow.html

[5]       Dean Baker, “The eurozone crisis is not about market discipline,” Al-Jazeera, 18 December 2011:

http://www.aljazeera.com/indepth/opinion/2011/12/2011121874651469307.html

[6]       Roger Altman, “We need not fret over omnipotent markets,” The Financial Times, 1 December 2011:

http://www.ft.com/intl/cms/s/0/890161ac-1b69-11e1-85f8-00144feabdc0.html#axzz1fnNHC8YP

[7]       Roger Altman, “We need not fret over omnipotent markets,” The Financial Times, 1 December 2011:

http://www.ft.com/intl/cms/s/0/890161ac-1b69-11e1-85f8-00144feabdc0.html#axzz1fnNHC8YP

[8]       Rajeev Syal, “Drug money saved banks in global crisis, claims UN advisor,” The Observer, 13 December 2009:

http://www.guardian.co.uk/global/2009/dec/13/drug-money-banks-saved-un-cfief-claims

[9]       Ed Vulliamy, “How a big US bank laundered billions from Mexico’s murderous drug gangs,” The Observer, 3 April 2011:

http://www.guardian.co.uk/world/2011/apr/03/us-bank-mexico-drug-gangs

[10]     Ibid.

[11]     Ed Vulliamy, “Global banks are the financial services wing of the drug cartels,” The Observer, 21 July 2012:

http://www.guardian.co.uk/world/2012/jul/21/drug-cartels-banks-hsbc-money-laundering

[12]     John Paul Rathbone, “Money laundering: Taken to the cleaners,” 20 July 2012:

http://www.ft.com/intl/cms/s/0/702a64a6-d25e-11e1-ac21-00144feabdc0.html#axzz2ALt54B7K

[13]     Agustino Fontevecchia, “HSBC Helped Terrorists, Iran, Mexican Drug Cartels Launder Money, Senate Report Says,” Forbes, 16 July 2012:

http://www.forbes.com/sites/afontevecchia/2012/07/16/hsbc-helped-terrorists-iran-mexican-drug-cartels-launder-money-senate-report-says/

[14]     Roberto Saviano, “Where the Mob Keeps its Money,” The New York Times, 25 August 2012:

http://www.nytimes.com/2012/08/26/opinion/sunday/where-the-mob-keeps-its-money.html?pagewanted=all&_r=0

[15]     Dominic Rushe, “HSBC ‘sorry’ for aiding Mexican drugs lords, rogue states and terrorists,” The Guardian, 17 July 2012:

http://www.guardian.co.uk/business/2012/jul/17/hsbc-executive-resigns-senate

[16]     Ed Vulliamy, “Global banks are the financial services wing of the drug cartels,” The Observer, 21 July 2012:

http://www.guardian.co.uk/world/2012/jul/21/drug-cartels-banks-hsbc-money-laundering

[17]     Michael Smith, “Banks Financing Mexico Gangs Admitted in Wells Fargo Deal,” Bloomberg, 29 June 2010:

http://www.bloomberg.com/news/2010-06-29/banks-financing-mexico-s-drug-cartels-admitted-in-wells-fargo-s-u-s-deal.html

[18]     Alexander Eichler, “Mexican Drug Cartel Laundered Money Through BofA, FBI Alleges,” The Huffington Post, 9 June 2012:

http://www.huffingtonpost.com/2012/07/09/los-zetas-laundered-money-bank-america_n_1658943.html

[19]     Jessica Silver-Greenberg and Edward Wyatt, “In Laundering Case, a Lax Banking Law Obscured Money Flow,” The New York Times, 8 August 2012:

http://www.nytimes.com/2012/08/09/business/how-a-lax-banking-law-obscured-money-flow.html?pagewanted=all;

Jessica Silver-Greenberg and Ben Protess, “

Money-Laundering Inquiry Is Said to Aim at U.S. Banks,” The New York Times, 14 September 2012:

http://www.nytimes.com/2012/09/15/business/money-laundering-inquiry-said-to-target-us-banks.html?pagewanted=all&_r=0

[20]     James B. Stewart, “For UBS, a Record of Averting Prosecution,” The New York Times, 20 July 2012:

http://www.nytimes.com/2012/07/21/business/ubss-track-record-of-averting-prosecution-common-sense.html?pagewanted=all

[21]     Matt Taibbi, “The Scam Wall Street Learned From the Mafia,” Rolling Stone, 21 June 2012:

http://www.rollingstone.com/politics/news/the-scam-wall-street-learned-from-the-mafia-20120620

[22]     William D. Cohan, “How Wall Street Scams Counties Into Bankruptcy,” Bloomberg, 1 July 2012:

http://www.bloomberg.com/news/2012-07-01/how-wall-street-scams-counties-into-bankruptcy.html

[23]     “The Libor Scandal: The Rotten Heart of Finance,” The Economist, 7 July 2012:

http://www.economist.com/node/21558281

[24]     Shahien Nasiripour, “Nine more banks added to Libor probe,” The Financial Times, 26 October 2012:

http://www.ft.com/intl/cms/s/0/6f4e7960-1f1a-11e2-be82-00144feabdc0.html#axzz2ARAog5NE

[25]     Douglas Keenan, “My thwarted attempt to tell of Libor shenanigans,” The Financial Times, 26 July 2012:

http://www.ft.com/intl/cms/s/0/dc5f49c2-d67b-11e1-ba60-00144feabdc0.html#axzz2ARAog5NE

[26]     “The Cartel: Behind the Scenes in the Libor Interest Rate Scandal,” Der Spiegel, 1 August 2012:

http://www.spiegel.de/international/business/the-libor-scandal-could-cost-leading-global-banks-billions-a-847453.html

[27]     Matt Taibbi, “Why is Nobody Freaking Out About the LIBOR Banking Scandal?” Rolling Stone, 3 July 2012:

http://www.rollingstone.com/politics/blogs/taibblog/why-is-nobody-freaking-out-about-the-libor-banking-scandal-20120703

[28]     Raúl Ilargi Meijer, “LIBOR Was A Criminal Conspiracy From The Start,” The Business Insider, 11 July 2012:

http://www.businessinsider.com/libor-was-a-criminal-conspiracy-from-the-start-2012-7

[29]     Steven Swinford and Harry Wilson, “RBS traders boasted of Libor ‘cartel’,” The Telegraph, 26 September 2012:

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9568087/RBS-traders-boasted-of-Libor-cartel.html

[30]     Jill Treanor and Dominic Rushe, “Timothy Geithner and Mervyn King discussed Libor worries in 2008,” The Guardian, 13 July 2012:

http://www.guardian.co.uk/business/2012/jul/13/tim-geithner-mervyn-king-libor

[31]     Mark Gongloff, “New York Fed’s Libor Documents Reveal Cozy Relationship Between Regulators, Banks,” The Huffington Post, 13 July 2012:

http://www.huffingtonpost.com/2012/07/13/new-york-fed-libor-documents_n_1671524.html

[32]     Chris Giles, “Libor scandal puts BoE in line of fire,” The Financial Times, 17 July 2012:

http://www.ft.com/intl/cms/s/0/68605a86-d02a-11e1-bcaa-00144feabdc0.html#axzz2ARAog5NE

[33]     Jill Treanor, “British Bankers’ Association to be stripped of Libor rate-setting role,” The Guardian, 25 September 2012:

http://www.guardian.co.uk/business/2012/sep/25/bba-libor-setting-role-stripped-banks

[34]     Liam Vaughan, “Secret Libor Committee Clings to Anonymity Following Scandal,” Bloomberg, 21 August 2012:

http://www.bloomberg.com/news/2012-08-20/secret-libor-committee-clings-to-anonymity-after-rigging-scandal.html

[35]     David Enrich and Max Colchester, “Before Scandal, Clash Over Control of Libor,” The Wall Street Journal, 11 September 2012:

http://online.wsj.com/article/SB10000872396390443847404577631404235329424.html

[36]     Andrew Mayeda, “Canada Regulator Says Has Power to Probe Libor ‘Cartel’,” Bloomberg, 22 June 2012:

http://www.bloomberg.com/news/2012-06-22/canada-regulator-says-has-power-to-probe-libor-cartel-.html

[37]     Halah Touryalai, “Banks Rigged Libor To Inflate Adjustable-Rate Mortgages: Lawsuit,” Forbes, 15 October 2012:

http://www.forbes.com/sites/halahtouryalai/2012/10/15/banks-rigged-libor-to-inflate-adjustable-rate-mortgages-lawsuit/

[38]     Darrell Preston, “Rigged Libor Hits States-Localities With $6 Billion: Muni Credit,” Bloomberg, 9 October 2012:

http://www.bloomberg.com/news/2012-10-09/rigged-libor-hits-states-localities-with-6-billion-muni-credit.html

[39]     Andrew Gavin Marshall, “Austerity, Adjustment, and Social Genocide: Political Language and the European Debt Crisis,” Andrewgavinmarshall.com, 24 July 2012:

https://andrewgavinmarshall.com/2012/07/24/austerity-adjustment-and-social-genocide-political-language-and-the-european-debt-crisis/

[40]     Roger Altman, “We need not fret over omnipotent markets,” The Financial Times, 1 December 2011:

http://www.ft.com/intl/cms/s/0/890161ac-1b69-11e1-85f8-00144feabdc0.html#axzz1fnNHC8YP

[41]     Ben Polak and Peter K. Schott, America’s Hidden Austerity Program,” The New York Times, 11 June 2012:

http://economix.blogs.nytimes.com/2012/06/11/americas-hidden-austerity-program/;

Jason Cherkis, “A Thousand Cuts: Austerity Measures Devastate Communities Around The World,” The Huffington Post, 17 July 2012:

http://www.huffingtonpost.com/2012/07/12/austerity-measures-a-thousand-cuts_n_1666309.html;

Editorial, “The Austerity Trap,” The New York Times, 23 October 2012:

http://www.nytimes.com/2012/10/24/opinion/the-austerity-trap.html?_r=0;

Derek Thompson, “American Austerity: Why the States Cutting Spending Are Doing Worse,” The Atlantic, 21 June 2012:

http://www.theatlantic.com/business/archive/2012/06/american-austerity-why-the-states-cutting-spending-are-doing-worse/258825/

[42]     “CEOs Deficit Manifesto,” The Wall Street Journal, 25 October 2012:

http://online.wsj.com/article/SB10001424052970203937004578076254182569318.html?mod=googlenews_wsj

[43]     “Executives Who Signed the Fix the Debt Declaration,” The Wall Street Journal, 25 October 2012:

http://online.wsj.com/article/SB10001424052970203897404578077251928040508.html

[44]     Al Lewis, “Bankers Face the Abyss,” The Wall Street Journal, 21 October 2012:

http://online.wsj.com/article/SB10000872396390444734804578064840879262594.html?mod=googlenews_wsj

[45]     Heather Stewart, “Wealth doesn’t trickle down – it just floods offshore, research reveals,” The Observer, 21 July 2012:

http://www.guardian.co.uk/business/2012/jul/21/offshore-wealth-global-economy-tax-havens

[46]     Heather Stewart, “£13tn hoard hidden from taxman by global elite,” The Observer, 21 July 2012:

http://www.guardian.co.uk/business/2012/jul/21/global-elite-tax-offshore-economy

[47]     We’re living in a plutonomy, The Telegraph, 2 April 2006:

http://www.telegraph.co.uk/finance/2935809/Were-living-in-a-plutonomy.html

[48]     Robert Frank, Plutonomics, The Wall Street Journal, 8 January 2007:

http://blogs.wsj.com/wealth/2007/01/08/plutonomics/

[49]     Ibid.

[50]     Gus Lubin, Deutsche Bank Says The ‘Global Plutonomy’ Is Stronger Than Ever, And That Means 10X More Volatility, Business Insider, 17 February 2011:

http://www.businessinsider.com/ajay-kapur-plutonomy-2011-2

 

The Predatory Global Empire in Panama: Punishing the Poor

The Predatory Global Empire in Panama: Punishing the Poor

By: Andrew Gavin Marshall

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Establishing a New War Doctrine

The war on Panama presents an interesting case to study. Taking place in 1989, it was the first war and intervention (whether covert or overt) which was not justified on the basis of a ‘Communist threat’. As such, it has been deemed as the first post-Cold War war. However, the justifications for the intervention, which was incredibly violent and destructive, especially upon the poor majority of Panama, were confused and inconsistent. Like all wars, conflicts, and interventions, it was made necessary through imperial logic: a once-client regime and puppet leader became too autonomous from the United States, its leader (and his nefarious connections with the American elite) became a liability and an embarrassment, and the tiny country of Panama threatened American strategic interests in the region, notably with the Panama Canal and the American military bases present to protect it. More importantly, perhaps, Panama was experiencing the development and growth of a populist-nationalist movement, particularly among its poor black and brown population, who had been previously ruled by a tiny white elite of European descent. In the imperial paradigm, the greatest threat to empire is the political, social, and economic mobilization of the people over whom the empire dominates.

Of course, it is a challenge to publicly justify a foreign intervention and war on the premises of a small nation and its people threatening the strategic imperial interests of America; after all, in the eyes and minds of most Americans, America is not an empire, but a bright shining beacon of freedom and bastion of democracy to lead the ‘free world.’ Thus, to sell a war requires the maintenance of more lies to fit in with the prevailing mythology. Yet, in the strategic vacuum created by the ending of the Cold War, and thus the disappearance of ‘Communism’ as the prevailing global boogeyman to serve as an excuse for any and all atrocities committed by America and the West, Panama was subjected to a far less eloquently articulated and designed justification. The threat of Communism was briefly attempted, and then the strategy quickly switched into the realm of the U.S. ‘War on Drugs,’ with many other failed attempts at justification thrown in for fair measure.

While the war was ultimately successful at removing the imperial ‘threat’, the politics surrounding the event were so disjointed that the war fails to stand up to any half-decent examination of the conflict as legitimate, and is, in fact, slightly embarrassing. There is a reason why it is a largely ‘forgotten’ war in terms of the collective memory of the American people having overlooked that ‘incident’ in recent history. People tend to remember only the wars they are reminded about and told to remember. This one, however, is worth remembering, not least because of the great loss of life it incurred on an incredibly poor and innocent people.

The Jimmy Carter administration, in 1978, signed an agreement with Panama allowing the country to regain control of the Panama Canal by 2000. The canal no longer had the same strategic importance it once held for the United States, as it did in the early 20th century. Long considered by American strategists to be “America’s back yard,” Latin America has been subjected to overt and covert U.S. interventions, coups, and wars more frequently than any other region of the world. In 1823, the Monroe Doctrine was written, which “asserted the pre-eminent and unilateral claim of the United States to hegemony in the Western hemisphere.” This document projected “near-absolute strategic control” over Latin America, thus justifying literally dozens of interventions in Latin America and the Caribbean. With the Cold War, the ‘doctrine’ was that of anti-Communism. With the end of the Cold War, “foreign policy managers [were] bereft of a national security doctrine and severely constrained by the greater volatility and suspicion of North American public opinion in foreign policy matters, and congressional and public fear of future Vietnam-style interventions.”[1]

In 1903, President Theodore Roosevelt “forcibly separated Panama from Colombia by sending in the U.S. Navy and Marines.” In 1904, he announced an updated version of the Monroe Doctrine with “a U.S. right to intervene unilaterally in the affairs of neighboring republics” in order to “prevent chronic wrongdoing.” Thus, in 1912, U.S. Marines entered Nicaragua’s civil war on the side of wealthy land owners; in 1914 the Navy bombarded and briefly occupied Veracruz, Mexico; in 1915, U.S. Marines occupied Haiti, establishing a military government and remaining there for over a decade; that same year U.S. Marines also occupied the Dominican Republic, also remaining there for over a decade. In 1926, the U.S. invaded Nicaragua again, destroying the agrarian rebel movement threatening domestic and international elite interests. Throughout the 1920s, the U.S. intervened in Panama, Honduras, and Cuba.[2]

The Reagan and Bush administrations (1981-1993) dramatically increased U.S. militarism and interventions around the world, such as in Lebanon, Afghanistan, El Salvador, Honduras, the covert war against the Sandanistas in Nicaragua, the Iran-Contra conspiracy, the invasion of Grenada, invasion of Panama, the Gulf War, and the 1992 intervention in Somalia. As Waltraud Queiser Morales wrote, “the Panamanian case can be seen as an important transition from ‘Monroe militarism’ and Reagan’s ‘containment militarism’ to Bush’s ‘New World Order militarism’.” This was characterized less by anti-Communist rhetoric, which was only partially (at least initially) used in the justification for the Panama invasion, but largely “projected ahead to an era of future global lawlessness in the ‘strategic slums’ of the Third World, where the US faced the chronic danger of ‘prolonged security operations’.”[3]

National Security Doctrines (NSDs) are important for American administrations to establish and articulate, as they deflect dissent and justify state actions with an aura of credibility and most notably by employing the notion that the end justifies the means. The Reagan doctrine for Latin America employed such a technique: “The national security of all the Americas is at stake in Central America. If we cannot defend ourselves there, we cannot expect to prevail elsewhere. Our credibility would collapse, our alliances would crumble, and the safety of our homeland would be put at jeopardy.”[4]

The Reagan doctrine was largely realized through its support of anti-Soviet and virulent anti-Communist “freedom fighters” in the Third World, as well as “friendly anti-Communist authoritarians.” This strategy defined the U.S. intervention in Afghanistan, the largest covert operation in history, but had the Reagan administration particularly preoccupied with Central America; most notably, El Salvador and Nicaragua. The new strategic doctrine defined low intensity conflict (LIC) as a principle means for implementing this vision. LIC was defined by the Pentagon in 1985 as, “a limited politico-military struggle to achieve political, social, economic, or psychological objectives,” often using methods of insurgency and terrorism. The war, however, is waged in three key areas: the field, within the administration in Washington, and in the media. During the Reagan years, the “War on Drugs” emerged as a potentially powerful new National Security Doctrine (NSD).[5]

Between 1986 and 1988, U.S. policy-makers employed a conscious rhetorical effort to associate the flourishing global drug trade with leftist guerillas in the Third World. The acceleration of employing the “war on drugs” in defining National Security interests increased as U.S. (largely covert) efforts experienced setbacks in Central America. Thus, Presidential directives were signed which increased efforts on the part of intelligence and military personnel against drug operations. Thus, still employing the method of a Low Intensity Conflict (LIC), “militarized drug operations provided a laboratory to project US power, train local militaries in the new strategic doctrine, transfer military hardware and gather intelligence.” The drug war could thus be used “to generate public support behind a resurgent, interventionist US foreign policy in Latin America.”[6]

Of course, missing from this discourse is the very-well documented facts revolving around how the United States has covertly – directly following World War II – supported the drug trade around the world, largely through efforts of the CIA. This was especially the case in Southeast Asia during the Indochina War, where heroin was the principle prize for these covert efforts; Afghanistan and Pakistan during the Soviet-Afghan war (and in the present occupation of Afghanistan), which then came to replace Southeast Asia as the main producer of heroin in the world, and of course, South and Central America (particularly during the Reagan years onward) in terms of the cocaine trade. The role of the CIA and other covert elements has been extensively documented by professors Alfred McCoy and Peter Dale Scott in various books and publications, most notably, The Politics of Heroin (McCoy) and American War Machine: Deep Politics, the CIA Global Drug Connection, and the Road to Afghanistan (Scott).

The Destabilization of Panama

General Omar Torrijos, Panama’s military strongman, “was a populist reformist” who had negotiated the Panama Canal Treaties with the United States in the late 1970s. While the Canal held less strategic significance for the United States than in previous times, the 14 military bases present in Panama remained incredibly significant in strategic circles, particularly with the Pentagon’s Southern Command headquarters based in Panama, “which was the site for U.S. military and covert operations in Latin America and the Caribbean.” In 1981, Torrijos died mysteriously when his plane blew up in midair, and he was subsequently replaced by the head of Panama’s military intelligence, General Manuel Noriega. Noriega had long been supported by the United States, going back to when George H.W. Bush was Director of the CIA in the Ford administration, at which time the CIA paid Noriega $200,000 a year.[7]

Following the death of Torrijos, “US relations became cosy with his successor and head of the Panamanian Defence Forces, General Manuel Antonio Noreiga, who had associations with the CIA, the Drug Enforcement Agency (DEA), and the Southern Command (Southcom), housing over 14,000 US troops in Panama at 14 US military bases worth some $5 billion.” Noriega was a longtime participant in the drug trade, particularly with the Colombian drug cartel, which was all well-known to the U.S. Embassy, Southcom, and the CIA. Yet, in 1987, letters from the DEA and the US Justice Department referred to Noriega’s cooperation with those agencies in the drug war as “superb.” It was ‘superb’ in the true sense of intent and methods, whereby the U.S. was an active organizational participant in the drug trade. Noreiga and many others in the Panamanian military “facilitated drug smuggling and laundered millions in drug money with the complicity of the DEA, Southcom and the CIA.” When cash reserves were high in Panama in 1986, “deposits of $1.3 billion in laundered drug monies were easily transferred from Panama’s central bank to the Federal Reserve Bank in Miami.” Further, large sums of drug money were diverted to the Nicaraguan Contras (death squad terrorists) fighting a war against the Sandanistas on behalf of the CIA. The operation of support for the Contras in their brutal war in Nicaragua were exposed in Congressional hearings and investigations known as the ‘Iran-Contra Affair,’ which was made public in the late 1980s. The scandal, by no means exclusive to the case of Nicaragua, involved the CIA and Pentagon covertly funding, training, and arming the Contras with money earned from illegal arms sales to Iran as well as money from the drug trade. The investigations revealed a complex network of relationships and actors, centered in the National Security Council (NSC), and directly involving CIA Director William Casey, Lt. Col. Oliver North, and then Vice President George H.W. Bush.[8]

Yet, despite Noriega’s “cosy” relationship with these agencies and individuals in the United States, “there were limits to [his] willingness to serve Washington.” As political scientist Michael Parenti explained:

He reasserted Panama’s independence over the control of the Canal Zone and the leases for U.S. military bases. He reportedly refused to join an invasion against Nicaragua and maintained friendly relations with both Managua and Havana. Before long, hostile reports about him began appearing in the U.S. media. In 1987, the Justice Department indicted Noriega for drug smuggling. A crippling economic embargo was imposed on Panama, a country of two million people, causing a doubling of unemployment and a drastic cutback in social benefits.[9]

The initial aim, then, of US intervention in Panama, “was to destabilize Noriega and install in his place a more pliant right-wing commander, but US military leaders feared an even greater threat in the nationalistic Panamanian Defence Forces [PDF].” Further, with the exposure of the Iran-Contra Scandal, “Noriega became a potential domestic political embarrassment and threat to higher-ups in the government, including Bush himself.”[10] Subsequently, “a media blitz demonized the Panamanian leader as a drug dealer, thus preparing the U.S. public for the ensuing invasion.”[11] Thus, “in the end, the drug war served as the public excuse for invasion. But it was not the real reason.”[12]

As Waltraud Queiser Morales wrote, just as was done elsewhere (such as Chile, Grenada, and Nicaragua), the United States promoted the destabilization of Panama, as “economic sanctions, pro-democracy and electoral manipulation, and confrontational military exercises worked to intimidate and provoke incidents that could provide pretexts for intervention.” The pro-democracy and electoral strategy employed by the United States (part of America’s “democratization” project), involved the “Bush administration, the CIA, and the National Endowment for Democracy [which] funneled more than $10 million to opposition candidates – Guillermo Endara, Guillermo Ford and Ricardo Arias Calderon – in the 1989 Panamanian national elections.” With Endara having won, amidst claims of vote fraud by the Panamanian Defence Forces (PDF), and with Noriega subsequently annulling the elections and staying in power, riots and protests erupted. Images of US-supported politicians being beaten and attacked by the PDF and Noriega’s supporters erupted in the American media, which ultimately “damaged Noriega’s regime and enhanced the opposition’s image in Panama and the United States.” Noriega, however, annulled the elections on the basis of “foreign interference,” which, as a direct result of millions of US dollars funding opposition candidates, is an accurate claim of “interference.”[13] Imagine the notion of a foreign power throwing tens of millions of dollars at domestic American politicians in a national election. The idea alone is reprehensible, not to mention illegal. But this is how America “promotes democracy” around the world: through buying the politicians.

The Reagan and Bush administrations had hoped to encourage a coup by the Panamanian Defence Forces (PDF). The Reagan administration began to encourage this option in 1988, as Ronald Reagan continuously refused to employ the option of a direct military intervention. However, additional US forces were sent to their bases in Panama as an indication to Noriega of the increasingly threatening posture of the United States. On March 16, 1988, the Panamanian Chief of Police, Colonel Leonidas Macias, attempted to orchestrate a coup against Noriega, which ultimately failed.[14] The Reagan administration was split internally on the potential to use the military option. The State Department supported the option, while the Defense Department and the Joint Chiefs of Staff (JCS) had opposed military intervention. Elliot Abrams, the Assistant Secretary of State for Inter-American Affairs, in March of 1988, suggested using limited force, “a commando raid to capture Noriega and to bring him to trial in the United States, accompanied by 6,000 American soldiers to defend… against any PDF retaliations,” yet the Pentagon remained opposed to the option.[15]

In anticipation that Reagan would eventually adopt Abrams’ suggestion, the Pentagon launched a public counter-attack to discredit Abrams and his suggestions, which included leaking many of his ‘suggestions’ to the press. The Reagan administration attempted to negotiate a deal with Noriega, offering to drop the drug-related charges against him which were brought forward in US courts in 1988. Vice President Bush, however, firmly opposed negotiations with Noriega, as he was campaigning for the presidency, Bush did not want to appear soft on Noriega, as he had suffered the public image of a ‘wimp.’[16] Bush’s victory in the Presidential elections in 1988 allowed for the development of a new strategy for Panama, and with a change in administration personnel, the administration could become more unified in their position.[17]

On October 1, 1989, the United States was informed about a future coup attempt by a member of Noriega’s inner circle, Moises Giroldi, and asked for U.S. assistance in blocking roads to protect the family of the coup plotter. The United States Defense Secretary, Dick Cheney, agreed to help, and when the coup took place two days later, on October 3, the U.S. blocked the requested roads. However, Noriega outmaneuvered the coup plotters, getting help from a special military unit, and the U.S. refused to intervene to ensure the success of the coup. Thus, the plotter was killed, and Noriega began to purge the PDF of dissenting elements. The failure of the U.S. to ensure the success of the coup led to many domestic political leaders criticizing Bush and his strategy.[18] However, this was actually part of a larger strategy. The coup was not supported because there were internal complications within the Bush administration as well as a larger overall strategy. Two top military commanders were replaced days before the coup took place. The chief of Southcom was replaced three days prior to the coup, and the next day, Colin Powell (Reagan’s National Security Adviser), became Chairman of the Joint Chiefs of Staff. The men that these two replaced – General Woerner and Admiral Crowe, respectively – had opposed direct military intervention in Panama, and thus preferred a coup option. Thurman and Powell, however, wanted the change of government to take place “on a U.S. timetable,” and Powell stated that he didn’t like the idea of “a half-baked coup with a half-baked coup leader.” Powell advocated, instead, not simply for replacing Noriega, but that the United States would have to employ a strategy of “destroying and replacing his entire regime.”[19]

What was needed, then, was a pretext for a full-scale invasion in order to crush the regime and destroy the PDF. As the Independent Commission of Inquiry on the U.S. Invasion of Panama revealed, “over 100 instances of U.S. military provocations in 1989 were documented by the Panamanian government. These included U.S. troops setting up roadblocks, searching Panamanian citizens, confronting PDF forces, occupying small towns for a number of hours, buzzing Panamanian air space with military aircraft, and surrounding public buildings with troops.”[20] Again, simply imagine if a foreign military in the United States, which had over a dozen major bases around the country, was engaging in such provocative actions within America. This would be construed as a direct military threat and interpreted as a foreign occupation.

In December of 1989, a Panamanian soldier was injured by U.S. troops.[21] Subsequently, on 15 December, the Panamanian National Assembly declared Panama to be in a state of war with the United States.[22] This, however, was “interpreted” in the U.S. media as a declaration of war against the United States by the tiny Central American nation of Panama. Ted Koppel of ABC “reported that Noriega had declared war in the United States.” Yet, as Noriega himself stated, America “through constant psychological and military harassment, has created a state of war in Panama.”[23] In mid-December, the United States achieved its goal of provoking Panamanian Defence Forces to act, as PDF soldiers stopped a U.S. military patrol car, holding the police officer at gunpoint, and on 16 December, “they fired at an American vehicle in a checkpoint and killed” a U.S. Marine. On 17 December, “a U.S. officer shot a PDF policeman.”[24]

On that same day, the Bush administration discussed their options in Panama. Colin Powell “advocated a large scale intervention whose goal would be to destroy the PDF and the entire Noriega regime and not just [aim to achieve] the capture of Noriega.” Powell reasoned, “that it could be difficult to find Noriega and arrest him at the beginning of the operation, but destroying the PDF would ensure Noriega’s capture.” Thus, Powell concluded, “the PDF’s destruction would be required to establish democracy in Panama.” Subsequently, “Bush agreed and approved the plan for large-scale military intervention in Panama.”[25]

On December 20, 1989, George Bush launched a midnight attack on Panama with an invasion of 26,000 US troops. The invasion took place amidst “a complete media blackout,” allowing for great atrocities to take place with no independent voices or visuals emerging from the nation. The “three-day intervention” known cynically as “Operation Just Cause” was heaped with praise in the United States, as Bush’s reputation as a ‘wimp’ was erased and his popularity shot up. As Bush declared war, the publicly pronounced reasons were “to protect American lives and bring the drug-indicted dictator to justice.”[26]

The True ‘Threat’ in Panama: The Poor

In reality, there were far greater reasons for the war, dictated not by humanitarian, legal, or moral claims; instead, the true reasons were ardently imperial in nature. There were of course the strategic considerations: more reliable client states and puppet leaders, more indirect control over the Canal and maintenance of the fourteen military bases as a launching point for counter-revolutionary operations around Central America, and to install a “democratic” regime based upon party politics as opposed to potentially problematic military leaders who may stand up to the United States. However, there was also a far greater threat, which wove through all the other reasons: Panama was in the midst of a nationalist popular movement, consisting largely of the poor black majority who had for centuries been repressed by a tiny white elite of European descent, as has been the case across all Latin America.

Before Noriega, the military dictatorship of General Omar Torrijos established itself during a period where the issues of race and class were becoming more public and vocal. Torrijos, who ruled Panama from 1968 until 1981 (when he died in a mysterious plane explosion), “sought to legitimize his military regime by seeking support from all social groups for his populist-nationalist project.” The Panamanian Black movement, which had begun in earnest some decades before, truly began to flourish during the Torrijos regime, and played a large part in creating the heated nationalistic sentiments and public demands for the Carter-Torrijos Panama Canal Treaties in the 1970s. As George Priestley and Alberto Barrow wrote:

It was within this new political environment of military led populism and nationalism that racial discrimination and racism was weakened in Panama as progressive and Black groups emerged to gain greater visibility, challenged racial stereotypes, and forged transnational bonds.[27]

The movement was helped along in no small part due to Afro-Panamanian organizations based in the United States, which were directly engaged with the Torrijos government to build support for the “nationalist struggle for the recuperation of the Panama Canal and Panamanian sovereignty.” When Torrijos was killed in the plane explosion, the CIA’s man in Panama, Noriega, back-tracked on many of Torrijos’ programs, including “interventionist” state measures in the economy which “had brokered the populist-nationalist alliance and eased social and racial tensions.” Noriega, instead, embraced the Western neoliberal policies of ‘structural adjustment,’ which antagonized the growing popular movement in Panama. As Noriega failed to become a “responsible” leader in the eyes of the United States, he faced two increasing problems: antagonizing the United States and the Panamanian Black movement simultaneously. However, there were still several remnants of the Torrijos reforms, and the populist-nationalist sentiments which had been fostered by the Torrijos military regime remained strong in the military ranks of the PDF itself. With the U.S. invasion and occupation (and the subsequent media blackout), the true intent of the war became clear to those who suffered in it:

A disproportionate number of those who were affected economically by Noriega’s structural adjustment policies, and who lost their lives because of the U.S.’s Low Intensity Conflict and invasion were from El Chorillo, Colon, and San Miguelito, [poor] communities whose residents are predominantly Black and brown.[28]

These communities, along with the PDF itself, had to be targeted in the war. While Noriega’s economic structural adjustment policies had weakened the populist movement for social justice and equality, the movement continued to struggle and the PDF remained an ideological ally in the promotion of nationalism. This is ultimately the real reason why the United States could not simply support another military coup, as it would still take place from within the ranks of an intensely nationalistic and somewhat left-leaning military, just as was the case with Noriega. This explains why the U.S. Chairman of the Joint Chiefs of Staff, Colin Powell, claimed that it was not enough to remove Noriega from power, but that the U.S. had to have a strategy of “destroying and replacing his entire regime.”[29] Destroying the regime is just what the U.S. did. As Morales wrote in Third World Quarterly:

The invasion victimized thousands of innocent Panamanians and left densely populated areas devastated. Local and international eye witnesses said civilians and residential areas were deliberately targeted. Perhaps 18,000 Panamanians were displaced and thousands remain[ed] in refugee camps in 1993. Local reports had 7000 Panamanians, primarily progressives and labour activists, arrested. Charges of summary executions and secret mass graves also emerged. The Panamanian National Human Rights Committee claimed that 4000 persons were killed in the invasion; regional human rights agencies and the United Nations Human Rights Commission reported over 2500 deaths. The US military admitted only 250; later the Pentagon released the figure of 516 Panamanians killed, over 75% civilian.[30]

The United States media, for its part, “covered Operation Just Cause like a U.S. Army recruitment film,” explained Michael Parenti. American audiences were shown “helicopters landing, planes dive-bombing, troops trotting along foreign streets, the enemy’s headquarters engulfed in flames, friendly Panamanians welcoming the invaders as liberators.” Of course, Parenti elaborated, there was no mention in the media that “the Panamanians interviewed were almost always well dressed, light skinned, and English speaking, in a country where most were poor, dark skinned, and Spanish speaking. Also left out of the picture were the many incidents of armed resistance by Panamanians.” As for the actual bombings and indeed, the virtual ‘scorched-earth’ policies of burning down El Chorillo along with several other working-class poor black neighbourhoods, the media treated “these aerial attacks on civilian populations as surgical strikes designed to break resistance in ‘Noriega strongholds’.”[31]

Following the invasion, the United States installed their favoured candidates from the previously held elections (whom the US – through the CIA and NED financed with $10 million) as Panama’s new “democratic” leaders: President Guillermo Endara, Vice President Guillermo Ford, and Attorney General Rogelio Cruz. As it turned out, unsurprisingly, “all three of these rich, white oligarchs were closely linked to companies, banks, and people heavily involved in drug operations or money-laundering.”[32] After invading, the U.S. “abolished the Panamanian Defense Forces and crushed the popular movement, creating conditions for the consolidation of a right of center party system and the growth of an economy based on neoliberal policies that have exacerbated socio-economic inequalities and increased racial/ethnic exclusion of Afro-Panamanians.”[33] As Priestly and Barrow wrote:

The U.S. invasion and the so-called transition to democracy had negative effects on popular organizing. During and immediately after the invasion, Black and brown communities were devastated; their organizations negatively affected, and their leaders killed or jailed, or otherwise persecuted. Political parties regained center stage in the electoral process and many Black and popular militants were co-opted into these organizations, reducing the organizational capabilities of some organizations and eliminating others.[34]

Only months after the invasion “did a few brief reports appear regarding mass graves of Panamanians dead buried hastily by U.S. Army bulldozers,” while the American media focused on the sideshow of the pursuit of Noriega, who ultimately turned himself in early January. No footage was shown of the poor neighbourhoods destroyed by U.S. bombing, such as El Chorillo’s “total devastation,” and no mention “of the many lives lost in what amounted to a saturation terror-bombing of a civilian neighborhood.”[35] As Michael Parenti wrote:

With the U.S. military firmly controlling Panama, conditions in that country deteriorated. Unemployment, already high because of the U.S. embargo, climbed to 35 percent as drastic layoffs were imposed on the public sector. Pension rights and other work benefits were lost. Newspapers and radio and television stations were closed by U.S. occupation authorities. Newspaper editors and reporters critical of the invasion were jailed or detained, as were all the leftist political party leaders. Union heads were arrested by the U.S. military, and some 150 local labor leaders were removed from their elected union positions. Public employees not supporting the invasion were purged. Crime rates rose dramatically, along with poverty and destitution. Thousands remained homeless. Corruption was more widespread than ever. More money-laundering and drug-trafficking occurred under the U.S.-sponsored Endara administration than under Noriega.[36]

Noriega was taken to the United States and convicted of drug smuggling in 1992. The United States conveniently ignored the drug-trafficking by Panama’s new “democratic” Endara administration, not to mention “its infringement of civil liberties and democracy.” The U.S. Congress received George Bush with a standing ovation when he declared, “One year ago the people of Panama lived in fear under the thumb of a dictator. Today democracy is restored. Panama is free.” Endara, however, “was extremely unpopular in Panama,” seen as “just another pliant US puppet.”[37] In June of 1990, the Washington Post had declared that the Endara regime, against all evidence, improved human rights and “press freedoms have been restored.”[38]

Conclusion

The struggles of the once-popular resistance and Black movement continued well into the 21st century, and up to the present day. The war on Panama represented the true nature of what was to come in the post-Cold War world, as it was the first war the United States undertook without Cold War rhetoric. Its principle aim was to destroy a popular people’s movement, remove a non-compliant dictator, and establish more control over the country and the region. Of course, among our political leaders and media in the West, this is referred to as “restoring democracy.” Thus, the threat of the Communist boogeyman faded, and the benevolent aim of ‘democracy’ resurfaced, as it initially did following World War I when Woodrow Wilson declared that the world must be made safe for democracy. For all the rhetoric of Western leaders and media, the greatest crime a leader or people can commit is to support themselves, or simply seek to do so; to provide for the poor and needy, to attempt to industrialize and develop their own country as they see fit, and to create an educated, free, healthy and stable population and society. This, above all else, is the ultimate sin in the world of “international politics.”

Logic thus dictates, then, that the greatest potential for true change and hope in this world is solidarity among all people’s movements the world over, and for a resurgence of populist movement, ideally not nationalistic in character, but simultaneously local and global: seeking local autonomy (moving around the nation-state, an easily corrupted and contemptuous institution), and seeking solidarity globally, to align itself with all such movements around the world, achieving strength in numbers, interaction of ideas, articulation of strategies, and advancement of all peoples in all places.

If a popular movement in a tiny little nation like Panama was such a threat to the massive American Empire, the largest, most militarily advanced, and most globally expansive empire in all of human history, this is actually a source of hope for all humanity. If Panama was such a threat that the United States saw fit to invade and occupy the small country, then imagine the threat which would be posed if all people, everywhere in the world, simultaneously sought a populist liberation struggle; not divided by nations and regions, but acting locally – for local autonomy from domestic elites and liberation from the empire – and interacting globally, with other such movements around the world. This is truly the greatest threat ever known to a global empire. This threat has been articulated by one of the empire’s most prominent strategists, Zbigniew Brzezinski, as the “Global Political Awakening.” Thus, it is in the interest of all peoples, everywhere, always and eternally, to seek and support all liberation struggles, to advance the “Awakening” and bring in a new concept of democracy, one which lives up to the rhetoric of our current system: “of, by, and for the people”; a democracy void of predatory elites. This is true freedom, true liberation, and no other philosophy or ideology is so capable of uniting the people of the world under one banner than that of the ‘ultimate liberation’: of, by, and for the people.

Andrew Gavin Marshall is an independent researcher and writer based in Montreal, Canada, writing on a number of social, political, economic, and historical issues. He is co-editor of the book, “The Global Economic Crisis: The Great Depression of the XXI Century.” His website is http://www.andrewgavinmarshall.com

Notes

[1]            Waltraud Queiser Morales, “U.S. Intervention and the New World Order: Lessons from Cold War and post-Cold War cases,” Third World Quarterly (Vol. 15, No. 1, 1994), page 77.

[2]            Charles Maechling, Jr., “Washington’s Illegal Invasion,” Foreign Policy (No. 79, Summer 1990), pages 113-114.

[3]            Waltraud Queiser Morales, “U.S. Intervention and the New World Order: Lessons from Cold War and post-Cold War cases,” Third World Quarterly (Vol. 15, No. 1, 1994), page 78.

[4]            Waltraud Quesler Morales, “The War on Drugs: A New US National Security Doctrine?” Third World Quarterly (Vol. 11, No. 3, July 1989), page 151.

[5]            Ibid, page 152.

[6]            Ibid, pages 154-155.

[7]            Michael Parenti, “A Devil in Panama,” Peace Review (Vol. 5, No. 1, 1993), page 45.

[8]            Waltraud Queiser Morales, “U.S. Intervention and the New World Order: Lessons from Cold War and post-Cold War cases,” Third World Quarterly (Vol. 15, No. 1, 1994), page 82.

[9]            Michael Parenti, “A Devil in Panama,” Peace Review (Vol. 5, No. 1, 1993), pages 45-46.

[10]            Waltraud Queiser Morales, “U.S. Intervention and the New World Order: Lessons from Cold War and post-Cold War cases,” Third World Quarterly (Vol. 15, No. 1, 1994), page 83.

[11]            Michael Parenti, “A Devil in Panama,” Peace Review (Vol. 5, No. 1, 1993), page 46.

[12]            Waltraud Queiser Morales, “U.S. Intervention and the New World Order: Lessons from Cold War and post-Cold War cases,” Third World Quarterly (Vol. 15, No. 1, 1994), page 83.

[13]            Ibid.

[14]            Eytan Gilboa, “The Panama Invasion Revisited: Lessons for the Use of Force in the Post Cold War Era,” Political Science Quarterly (Vol. 110, No. 4, Winter 1995-1996), page 547.

[15]            Ibid, page 548.

[16]            Ibid, page 549.

[17]            Ibid, page 551.

[18]            Ibid, pages 554-555.

[19]            Ibid, page 556.

[20]            The Independent Commission of Inquiry on the U.S. Invasion of Panama, The U.S. invasion of Panama: the truth behind operation ‘ Just Cause’ (South End Press, 1991), page 24.

[21]            Ibid.

[22]            Eytan Gilboa, “The Panama Invasion Revisited: Lessons for the Use of Force in the Post Cold War Era,” Political Science Quarterly (Vol. 110, No. 4, Winter 1995-1996), page 558.

[23]            Michael Parenti, “A Devil in Panama,” Peace Review (Vol. 5, No. 1, 1993), page 46.

[24]            Eytan Gilboa, “The Panama Invasion Revisited: Lessons for the Use of Force in the Post Cold War Era,” Political Science Quarterly (Vol. 110, No. 4, Winter 1995-1996), page 558.

[25]            Ibid, pages 558-559.

[26]            Waltraud Queiser Morales, “U.S. Intervention and the New World Order: Lessons from Cold War and post-Cold War cases,” Third World Quarterly (Vol. 15, No. 1, 1994), pages 83-84.

[27]            George Priestley and Alberto Barrow, “The Black Movement in Panama: A Historical and Political Interpretation, 1994-2004,” Souls (Vol. 10, No. 3, 2008), page 231.

[28]            Ibid, pages 231-232.

[29]            Eytan Gilboa, “The Panama Invasion Revisited: Lessons for the Use of Force in the Post Cold War Era,” Political Science Quarterly (Vol. 110, No. 4, Winter 1995-1996), page 556.

[30]            Waltraud Queiser Morales, “U.S. Intervention and the New World Order: Lessons from Cold War and post-Cold War cases,” Third World Quarterly (Vol. 15, No. 1, 1994), page 84.

[31]            Michael Parenti, “A Devil in Panama,” Peace Review (Vol. 5, No. 1, 1993), page 46.

[32]            Ibid, page 48.

[33]            George Priestley and Alberto Barrow, “The Black Movement in Panama: A Historical and Political Interpretation, 1994-2004,” Souls (Vol. 10, No. 3, 2008), page 232.

[34]            Ibid, page 234.

[35]            Michael Parenti, “A Devil in Panama,” Peace Review (Vol. 5, No. 1, 1993), pages 46-47.

[36]            Ibid, page 49.

[37]            Waltraud Queiser Morales, “U.S. Intervention and the New World Order: Lessons from Cold War and post-Cold War cases,” Third World Quarterly (Vol. 15, No. 1, 1994), page 84.

[38]            Michael Parenti, “A Devil in Panama,” Peace Review (Vol. 5, No. 1, 1993), page 49.

The Imperial Anatomy of Al-Qaeda: The CIA’s Drug-Running Terrorists and the “Arc of Crisis”

The Imperial Anatomy of Al-Qaeda: The CIA’s Drug-Running Terrorists and the “Arc of Crisis”
Part I
Global Research, September 5, 2010

Introduction

As the 9th anniversary of 9/11 nears, and the war on terror continues to be waged and grows in ferocity and geography, it seems all the more imperative to return to the events of that fateful September morning and re-examine the reasons for war and the nature of the stated culprit, Al-Qaeda.

The events of 9/11 pervade the American and indeed the world imagination as an historical myth. The events of that day and those leading up to it remain largely unknown and little understood by the general public, apart from the disturbing images repeated ad nauseam in the media. The facts and troubled truths of that day are lost in the folklore of the 9/11 myth: that the largest attack carried out on American ground was orchestrated by 19 Muslims armed with box cutters and urged on by religious fundamentalism, all under the direction of Osama bin Laden, the leader of a global terrorist network called al-Qaeda, based out of a cave in Afghanistan.

The myth sweeps aside the facts and complex nature of terror, al-Qaeda, the American empire and literally defies the laws of physics. As John F. Kennedy once said, “The greatest enemy of the truth is not the lie – deliberate, contrived, and dishonest – but the myth – persistent, pervasive, and unrealistic.”

This three-part series on “The Imperial Anatomy of Al-Qaeda” examines the geopolitical historical origins and nature of what we today know as al-Qaeda, which is in fact an Anglo-American intelligence network of terrorist assets used to advance American and NATO imperial objectives in various regions around the world.

Part 1 examines the origins of the intelligence network known as the Safari Club, which financed and organized an international conglomerate of terrorists, the CIA’s role in the global drug trade, the emergence of the Taliban and the origins of al-Qaeda.

The Safari Club

Following Nixon’s resignation as President, Gerald Ford became the new US President in 1974. Henry Kissinger remained as Secretary of State and Ford brought into his administration two names that would come to play important roles in the future of the American Empire: Donald Rumsfeld as Ford’s Chief of Staff, and Dick Cheney, as Deputy Assistant to the President. The Vice President was Nelson Rockefeller, David Rockefeller’s brother. When Donald Rumsfeld was promoted to Secretary of Defense, Dick Cheney was promoted to Chief of Staff. Ford had also appointed a man named George H.W. Bush as CIA Director.

In 1976, a coalition of intelligence agencies was formed, which was called the Safari Club. This marked the discreet and highly covert coordination among various intelligence agencies, which would last for decades. It formed at a time when the CIA was embroiled in domestic scrutiny over the Watergate scandal and a Congressional investigation into covert CIA activities, forcing the CIA to become more covert in its activities.

In 2002, the Saudi intelligence chief, Prince Turki bin Faisal gave a speech in which he stated that in response to the CIA’s need for more discretion, “a group of countries got together in the hope of fighting Communism and established what was called the Safari Club. The Safari Club included France, Egypt, Saudi Arabia, Morocco, and Iran [under the Shah].”[1] However, “The Safari Club needed a network of banks to finance its intelligence operations. With the official blessing of George H.W. Bush as the head of the CIA,” Saudi intelligence chief, Kamal Adham, “transformed a small Pakistani merchant bank, the Bank of Credit and Commerce International (BCCI), into a world-wide money-laundering machine, buying banks around the world to create the biggest clandestine money network in history.”[2]

As CIA director, George H.W. Bush “cemented strong relations with the intelligence services of both Saudi Arabia and the shah of Iran. He worked closely with Kamal Adham, the head of Saudi intelligence, brother-in-law of King Faisal and an early BCCI insider.” Adham had previously acted as a “channel between [Henry] Kissinger and [Egyptian President] Anwar Sadat” in 1972. In 1976, Iran, Egypt, and Saudi Arabia formed the Safari Club “to conduct through their own intelligence agencies operations that were now difficult for the CIA,” which was largely organized by the head of French intelligence, Alexandre de Marenches.[3]

The “Arc of Crisis” and the Iranian Revolution

When Jimmy Carter became President in 1977, he appointed over two-dozen members of the Trilateral Commission to his administration, which was an international think tank formed by Zbigniew Brzezinski and David Rockefeller in 1973. Brzezinski had invited Carter to join the Trilateral Commission, and when Carter became President, Brzezinski became National Security Adviser; Cyrus Vance, also a member of the Commission, became Secretary of State; and Samuel Huntington, another Commission member, became Coordinator of National Security and Deputy to Brzezinski. Author and researcher Peter Dale Scott deserves much credit for his comprehensive analysis of the events leading up to and during the Iranian Revolution in his book, “The Road to 9/11”,* which provides much of the information below.

Samuel Huntington and Zbigniew Brzezinski were to determine the US policy position in the Cold War, and the US-Soviet policy they created was termed, “Cooperation and Competition,” in which Brzezinski would press for “Cooperation” when talking to the press, yet, privately push for “competition.” So, while Secretary of State Cyrus Vance was pursuing détente with the Soviet Union, Brzezinski was pushing for American supremacy over the Soviet Union. Brzezinski and Vance would come to disagree on almost every issue.[4]

In 1978, Zbigniew Brzezinski gave a speech in which he stated, “An arc of crisis stretches along the shores of the Indian Ocean, with fragile social and political structures in a region of vital importance to us threatened with fragmentation. The resulting political chaos could well be filled by elements hostile to our values and sympathetic to our adversaries.” The Arc of Crisis stretched from Indochina to southern Africa, although, more specifically, the particular area of focus was “the nations that stretch across the southern flank of the Soviet Union from the Indian subcontinent to Turkey, and southward through the Arabian Peninsula to the Horn of Africa.” Further, the “center of gravity of this arc is Iran, the world’s fourth largest oil producer and for more than two decades a citadel of U.S. military and economic strength in the Middle East. Now it appears that the 37-year reign of Shah Mohammed Reza Pahlavi is almost over, ended by months of rising civil unrest and revolution.”[5]

With rising discontent in the region, “There was this idea that the Islamic forces could be used against the Soviet Union. The theory was, there was an arc of crisis, and so an arc of Islam could be mobilized to contain the Soviets. It was a Brzezinski concept.”[6] A month prior to Brzezinski’s speech, in November of 1978, “President Carter named the Bilderberg group’s George Ball, another member of the Trilateral Commission, to head a special White House Iran task force under the National Security Council’s Brzezinski.” Further, “Ball recommended that Washington drop support for the Shah of Iran and support the fundamentalist Islamic opposition of Ayatollah Khomeini.”[7] George Ball’s visit to Iran was a secret mission.[8]

Throughout 1978, the Shah was under the impression that “the Carter administration was plotting to topple his regime.” In 1978, the Queen and Shah’s wife, told Manouchehr Ganji, a minister in the Shah’s government, that, “I wanted to tell you that the Americans are maneuvering to bring down the Shah,” and she continued saying that she believed “they even want to topple the regime.”[9] The US Ambassador to Iran, William Sullivan, thought that the revolution would succeed, and told this to Ramsey Clark, former US Attorney General under the Johnson administration, as well as professor Richard Falk, when they were visiting Sullivan in Iran in 1978. Clark and Falk then went from Iran to Paris, to visit Khomeini, who was there in exile. James Bill, a Carter adviser, felt that, “a religious movement brought about with the United States’ assistance would be a natural friend of the United States.”[10]

Also interesting is the fact that the British BBC broadcast pro-Khomeini Persian-language programs daily in Iran, as a subtle form of propaganda, which “gave credibility to the perception of United States and British support of Khomeini.”[11] The BBC refused to give the Shah a platform to respond, and “[r]epeated personal appeals from the Shah to the BBC yielded no result.”[12]

In the May 1979 meeting of the Bilderberg Group, Bernard Lewis, a British historian of great influence (hence, the Bilderberg membership), presented a British-American strategy which, “endorsed the radical Muslim Brotherhood movement behind Khomeini, in order to promote balkanization of the entire Muslim Near East along tribal and religious lines. Lewis argued that the West should encourage autonomous groups such as the Kurds, Armenians, Lebanese Maronites, Ethiopian Copts, Azerbaijani Turks, and so forth. The chaos would spread in what he termed an ‘Arc of Crisis,’ which would spill over into the Muslim regions of the Soviet Union.”[13] Further, it would prevent Soviet influence from entering the Middle East, as the Soviet Union was viewed as an empire of atheism and godlessness: essentially a secular and immoral empire, which would seek to impose secularism across Muslim countries. So supporting radical Islamic groups would mean that the Soviet Union would be less likely to have any influence or relations with Middle Eastern countries, making the US a more acceptable candidate for developing relations.

A 1979 article in Foreign Affairs, the journal of the Council on Foreign Relations, described the Arc of Crisis, saying that, “The Middle East constitutes its central core. Its strategic position is unequalled: it is the last major region of the Free World directly adjacent to the Soviet Union, it holds in its subsoil about three-fourths of the proven and estimated world oil reserves, and it is the locus of one of the most intractable conflicts of the twentieth century: that of Zionism versus Arab nationalism.” It went on to explain that post-war US policy in the region was focused on “containment” of the Soviet Union, as well as access to the regions oil.[14] The article continued, explaining that the most “obvious division” within the Middle East is, “that which separates the Northern Tier (Turkey, Iran, Afghanistan) from the Arab core,” and that, “After World War II, Turkey and Iran were the two countries most immediately threatened by Soviet territorial expansionism and political subversion.”[15] Ultimately, “the Northern Tier was assured of a serious and sustained American commitment to save it from sharing the fate of Eastern Europe.”[16]

While Khomeini was in Paris prior to the Revolution, a representative of the French President organized a meeting between Khomeini and “current world powers,” in which Khomeini made certain demands, such as, “the shah’s removal from Iran and help in avoiding a coup d’état by the Iranian Army.” The Western powers, however, “were worried about the Soviet Union’s empowerment and penetration and a disruption in Iran’s oil supply to the west. Khomeini gave the necessary guarantees. These meetings and contacts were taking place in January of 1979, just a few days before the Islamic Revolution in February 1979.”[17] In February of 1979, Khomeini was flown out of Paris on an Air France flight, to return to Iran, “with the blessing of Jimmy Carter.”[18] Ayatollah Khomeini named Mehdi Bazargan as prime minister of the Provisional Revolutionary Government on February 4, 1979. As Khomeini had demanded during his Paris meeting in January 1979, that western powers must help in avoiding a coup by the Iranian Army; in that same month, the Carter administration, under the direction of Brzezinski, had begun planning a military coup.[19]

Could this have been planned in the event that Khomeini was overthrown, the US would quickly reinstate order, perhaps even place Khomeini back in power? Interestingly, in January of 1979, “as the Shah was about to leave the country, the American Deputy Commander in NATO, General Huyser, arrived and over a period of a month conferred constantly with Iranian military leaders. His influence may have been substantial on the military’s decision not to attempt a coup and eventually to yield to the Khomeini forces, especially if press reports are accurate that he or others threatened to withhold military supplies if a coup were attempted.”[20] No coup was subsequently undertaken, and Khomeini came to power as the Ayatollah of the Islamic Republic of Iran.

As tensions increased among the population within Iran, the US sent “security advisers” to Iran to pressure the Shah’s SAVAK (secret police) to implement “a policy of ever more brutal repression, in a manner calculated to maximize popular antipathy to the Shah.” The Carter administration also began publicly criticizing the Shah’s human rights abuses.[21] On September 6, 1978, the Shah banned demonstrations, and the following day, between 700 and 2000 demonstrators were gunned down, following “advice from Brzezinski to be firm.”[22]

The US Ambassador to the UN, Andrew Young, a Trilateral Commission member, said that, “Khomeini will eventually be hailed as a saint,” and the US Ambassador to Iran, William Sullivan, said, “Khomeini is a Gandhi-like figure,” while Carter’s adviser, James Bill, said that Khomeini was a man of “impeccable integrity and honesty.”[23]

The Shah was also very sick in late 1978 and early 1979. So the Shah fled Iran in January of 1979 to the Bahamas, allowing for the revolution to take place. It is especially interesting to understand the relationship between David Rockefeller and the Shah of Iran. David Rockefeller’s personal assistant, Joseph V. Reed, had been “assigned to handle the shah’s finances and his personal needs;” Robert Armao, who worked for Vice President Nelson Rockefeller, was sent to “act as the shah’s public relations agent and lobbyist;” and Benjamin H. Kean, “a longtime associate of Chase Manhattan Bank chairman David Rockefeller,” and David Rockefeller’s “personal physician,” who was sent to Mexico when the shah was there, and advised that he “be treated at an American hospital.”[24]

It is important to note that Rockefeller interests “had directed U.S. policy in Iran since the CIA coup of 1953.”[25] Following the Shah’s flight from Iran, there were increased pressures within the United States by a handful of powerful people to have the Shah admitted to the United States. These individuals were Zbigniew Brzezinski, former Secretary of State Henry Kissinger, John J. McCloy, former statesman and senior member of the Bilderberg Group, Trilateral Commission and the Council on Foreign Relations, who was also a lawyer for Chase Manhattan, and of course, David Rockefeller.[26]

Chase Manhattan Bank had more interests in Iran than any other US bank. In fact, the Shah had “ordered that all his government’s major operating accounts be held at Chase and that letters of credit for the purchase of oil be handled exclusively through Chase. The bank also became the agent and lead manager for many of the loans to Iran. In short, Iran became the crown jewel of Chase’s international banking portfolio.”[27]

The Iranian interim government, headed by Prime Minister Bazargan, collapsed in November of 1979, when Iranian hostages seized the US Embassy in Teheran. However, there is much more to this event than meets the eye. During the time of the interim government (February, 1979 to November, 1979), several actions were undertaken which threatened some very powerful interests who had helped the Ayatollah into power.

Chase Manhattan Bank faced a liquidity crisis as there had been billions in questionable loans to Iran funneled through Chase.[28] Several of Chase’s loans were “possibly illegal under the Iranian constitution.”[29] Further, in February of 1979, once the interim government was put in power, it began to take “steps to market its oil independently of the Western oil majors.” Also, the interim government “wanted Chase Manhattan to return Iranian assets, which Rockefeller put at more than $1 billion in 1978, although some estimates ran much higher,” which could have “created a liquidity crisis for the bank which already was coping with financial troubles.”[30]

With the seizure of the American Embassy in Iran, President Carter took moves to freeze Iranian financial assets. As David Rockefeller wrote in his book, “Carter’s ‘freeze’ of official Iranian assets protected our [Chase Manhattan’s] position, but no one at Chase played a role in convincing the administration to institute it.”[31]

In February of 1979, Iran had been taking “steps to market its oil independently of the Western oil majors. In 1979, as in 1953, a freeze of Iranian assets made this action more difficult.”[32] This was significant for Chase Manhattan not simply because of the close interlocking of the board with those of oil companies, not to mention Rockefeller himself, who is patriarch of the family whose name is synonymous with oil, but also because Chase exclusively handled all the letters of credit for the purchase of Iranian oil.[33]

The Shah being accepted into the United States, under public pressure from Henry Kissinger, Zbigniew Brzezinski and David Rockefeller, precipitated the hostage crisis, which occurred on November 4. Ten days later, Carter froze all Iranian assets in US banks, on the advice of his Treasury Secretary, William Miller. Miller just happened to have ties to Chase Manhattan Bank.[34]

Although Chase Manhattan directly benefited from the seizure of Iranian assets, the reasoning behind the seizure as well as the events leading up to it, such as a hidden role for the Anglo-Americans behind the Iranian Revolution, bringing the Shah to America, which precipitated the hostage crisis, cannot simply be relegated to personal benefit for Chase. There were larger designs behind this crisis. So the 1979 crises in Iran cannot simply be pawned off as a spur of the moment undertaking, but rather should be seen as quick actions taken upon a perceived opportunity. The opportunity was the rising discontent within Iran at the Shah; the quick actions were in covertly pushing the country into Revolution.

In 1979, “effectively restricting the access of Iran to the global oil market, the Iranian assets freeze became a major factor in the huge oil price increases of 1979 and 1981.”[35] Added to this, in 1979, British Petroleum cancelled major oil contracts for oil supply, which along with cancellations taken by Royal Dutch Shell, drove the price of oil up higher.[36] With the first major oil price rises in 1973 (urged on by US Secretary of State Henry Kissinger), the Third World was forced to borrow heavily from US and European banks to finance development. With the second oil price shocks of 1979, the US Federal Reserve, with Paul Volcker as its new Chairman, (himself having served a career under David Rockefeller at Chase Manhattan), dramatically raised interest rates from 2% in the late 70s to 18% in the early 80s. Developing nations could not afford to pay such interest on their loans, and thus the 1980s debt crisis spread throughout the Third World, with the IMF and World Bank coming to the “rescue” with their Structural Adjustment Programs (SAPs), which ensured western control over the developing world’s economies.[37]

Covertly, the United States helped a radical Islamist government come to power in Iran, “the center of the Arc of Crisis,” and then immediately stirred up conflict and war in the region. Five months before Iraq invaded Iran, in April of 1980, Zbigniew Brzezinski openly declared the willingness of the US to work closely with Iraq. Two months before the war, Brzezinski met with Saddam Hussein in Jordan, where he gave support for the destabilization of Iran.[38] While Saddam was in Jordan, he also met with three senior CIA agents, which was arranged by King Hussein of Jordan. He then went to meet with King Fahd in Saudi Arabia, informing him of his plans to invade Iran, and then met with the King of Kuwait to inform him of the same thing. He gained support from America, and financial and arms support from the Arab oil producing countries. Arms to Iraq were funneled through Jordan, Saudi Arabia and Kuwait.[39] The war lasted until 1988 and resulted in over a million deaths.

This was the emergence of the “strategy of tension” in the “Arc of Crisis,” in particular, the covert support (whether in arming, training, or financing) of radical Islamic elements to foment violence and conflict in a region. It was the old imperial tactic of ‘divide and conquer’: pit the people against each other so that they cannot join forces against the imperial power. This violence and radical Islamism would further provide the pretext for which the US and its imperial allies could then engage in war and occupation within the region, all the while securing its vast economic and strategic interests.

The “Arc of Crisis” in Afghanistan: The Safari Club in Action

In 1978, the progressive Taraki government in Afghanistan managed to incur the anger of the United States due to “its egalitarian and collectivist economic policies.”[40] The Afghan government was widely portrayed in the West as “Communist” and thus, a threat to US national security. The government, did, however, undertake friendly policies and engagement with the Soviet Union, but was not a Communist government.

In 1978, as the new government came to power, almost immediately the US began covertly funding rebel groups through the CIA.[41] In 1979, Zbigniew Brzezinski worked closely with his aid from the CIA, Robert Gates (who is currently Secretary of Defense), in shifting President Carter’s Islamic policy. As Brzezinski said in a 1998 interview with a French publication:

According to the official version of history, CIA aid to the Mujahadeen began during 1980, that is to say, after the Soviet army invaded Afghanistan, 24 Dec 1979. But the reality, secretly guarded until now, is completely otherwise: Indeed, it was July 3, 1979 that President Carter signed the first directive for secret aid to the opponents of the pro-Soviet regime in Kabul. And that very day, I wrote a note to the president in which I explained to him that in my opinion this aid was going to induce a Soviet military intervention.[42]

Brzezinski elaborated, saying he “Knowingly increased the probability that [the Soviets] would invade,” and he recalled writing to Carter on the day of the Soviet invasion that, “We now have the opportunity of giving to the USSR its Vietnam war. Indeed, for almost 10 years, Moscow had to carry on a war unsupportable by the government, a conflict that brought about the demoralization and finally the breakup of the Soviet empire.” When asked about the repercussions for such support in fostering the rise of Islamic fundamentalism, Brzezinski responded, “What is most important to the history of the world? The Taliban or the collapse of the Soviet empire? Some stirred-up Moslems or the liberation of Central Europe and the end of the cold war?”[43]

As author Peter Dale Scott pointed out in, The Road to 9/11:*

For generations in both Afghanistan and the Soviet Muslim Republics the dominant form of Islam had been local and largely Sufi. The decision to work with the Saudi and Pakistani secret services meant that billions of CIA and Saudi dollars would ultimately be spent in programs that would help enhance the globalistic and Wahhabistic jihadism that are associated today with al Qaeda.[44]

Hafizullah Amin, a top official in Taraki’s government, who many believed to be a CIA asset, orchestrated a coup in September of 1979, and “executed Taraki, halted the reforms, and murdered, jailed, or exiled thousands of Taraki supporters as he moved toward establishing a fundamentalist Islamic state. But within two months, he was overthrown by PDP remnants including elements within the military.”[45] The Soviets also intervened in order to replace Amin, who was seen as “unpredictable and extremist” with “the more moderate Barbak Karmal.”[46]

The Soviet invasion thus prompted the US national security establishment to undertake the largest covert operation in history. When Ronald Reagan replaced Jimmy Carter in 1981, the covert assistance to the Afghan Mujahideen not only continued on the path set by Brzezinski but it rapidly accelerated, as did the overall strategy in the “Arc of Crisis.” When Reagan became President, his Vice President became George H.W. Bush, who, as CIA director during the Ford administration, had helped establish the Safari Club intelligence network and the Bank of Credit and Commerce International (BCCI) in Pakistan. In the “campaign to aid the Afghan rebels … BCCI clearly emerged as a U.S. intelligence asset,” and CIA Director “Casey began to use the outside – the Saudis, the Pakistanis, BCCI – to run what they couldn’t get through Congress. [BCCI president] Abedi had the money to help,” and the CIA director had “met repeatedly” with the president of BCCI.[47]

Thus, in 1981, Director Casey of the CIA worked with Saudi Prince Turki bin Faisal who ran the Saudi intelligence agency GID, and the Pakistani ISI “to create a foreign legion of jihadi Muslims or so-called Arab Afghans.” This idea had “originated in the elite Safari Club that had been created by French intelligence chief Alexandre de Marenches.”[48]

In 1986, the CIA backed a plan by the Pakistani ISI “to recruit people from around the world to join the Afghan jihad.” Subsequently:

More than 100,000 Islamic militants were trained in Pakistan between 1986 and 1992, in camps overseen by CIA and MI6, with the SAS [British Special Forces] training future al-Qaida and Taliban fighters in bomb-making and other black arts. Their leaders were trained at a CIA camp in Virginia. This was called Operation Cyclone and continued long after the Soviets had withdrawn in 1989.[49]

CIA funding for the operations “was funneled through General Zia and the ISI in Pakistan.”[50] Interestingly, Robert Gates, who previously served as assistant to Brzezinski in the National Security Council, stayed on in the Reagan-Bush administration as executive assistant to CIA director Casey, and who is currently Secretary of Defense.

The Global Drug Trade and the CIA

As a central facet of the covert financing and training of the Afghan Mujahideen, the role of the drug trade became invaluable. The global drug trade has long been used by empires for fuelling and financing conflict with the aim of facilitating imperial domination.

In 1773, the British colonial governor in Bengal “established a colonial monopoly on the sale of opium.” As Alfred W. McCoy explained in his masterful book, The Politics of Heroin:

As the East India Company expanded production, opium became India’s main export. [. . . ] Over the next 130 years, Britain actively promoted the export of Indian opium to China, defying Chinese drug laws and fighting two wars to open China’s opium market for its merchants. Using its military and mercantile power, Britain played a central role in making China a vast drug market and in accelerating opium cultivation throughout China. By 1900 China had 13.5 million addicts consuming 39,000 tons of opium.[51]

In Indochina in the 1940s and 50s, the French intelligence services “enabled the opium trade to survive government suppression efforts,” and subsequently, “CIA activities in Burma helped transform the Shan states from a relatively minor poppy-cultivating area into the largest opium-growing region in the world.”[52] The CIA did this by supporting the Kuomintang (KMT) army in Burma for an invasion of China, and facilitated its monopolization and expansion of the opium trade, allowing the KMT to remain in Burma until a coup in 1961, when they were driven into Laos and Thailand.[53] The CIA subsequently played a very large role in the facilitation of the drugs trade in Laos and Vietnam throughout the 1960s and into the 1970s.[54]

It was during the 1980s that “the CIA’s covert war in Afghanistan transformed Central Asia from a self-contained opium zone into a major supplier of heroin for the world market,” as:

Until the late 1970s, tribal farmers in the highlands of Afghanistan and Pakistan grew limited quantities of opium and sold it to merchant caravans bound west for Iran and east to India. In its decade of covert warfare against the Soviet occupation of Afghanistan, the CIA’s operations provided the political protection and logistics linkages that joined Afghanistan’s poppy fields to heroin markets in Europe and America.[55]

In 1977, General Zia Ul Haq in Pakistan launched a military coup, “imposed a harsh martial-law regime,” and executed former President Zulfiqar Ali Bhutto (father to Benazir Bhutto). When Zia came to power, the Pakistani ISI was a “minor military intelligence unit,” but, under the “advice and assistance of the CIA,” General Zia transformed the ISI “into a powerful covert unit and made it the strong arm of his martial-law regime.”[56]

The CIA and Saudi money flowed not only to weapons and training for the Mujahideen, but also into the drug trade. Pakistani President Zia-ul-Haq appointed General Fazle Haq as the military governor of Pakistan’s North-West Frontier Province (NWFP), who would “consult with Brzezinski on developing an Afghan resistance program,” and who became a CIA asset. When CIA Director Casey or Vice President George H.W. Bush reviewed the CIA Afghan operation, they went to see Haq; who by 1982, was considered by Interpol to be an international narcotics trafficker. Haq moved much of the narcotics money through the BCCI.[57]

In May of 1979, prior to the December invasion of the Soviet Union into Afghanistan, a CIA envoy met with Afghan resistance leaders in a meeting organized by the ISI. The ISI “offered the CIA envoy an alliance with its own Afghan client, Gulbuddin Hekmatyar,” who led a small guerilla group. The CIA accepted, and over the following decade, half of the CIA’s aid went to Hekmatyar’s guerillas.[58] Hekmatyar became Afghanistan’s leading mujahideen drug lord, and developed a “complex of six heroin labs in an ISI-controlled area of Baluchistan (Pakistan).”[59]

The US subsequently, through the 1980s, in conjunction with Saudi Arabia, gave Hekmatyar more than $1 billion in armaments. Immediately, heroin began flowing from Afghanistan to America. By 1980, drug-related deaths in New York City rose 77% since 1979.[60] By 1981, the drug lords in Pakistan and Afghanistan supplied 60% of America’s heroin. Trucks going into Afghanistan with CIA arms from Pakistan would return with heroin “protected by ISI papers from police search.”[61]

Haq, the CIA asset in Pakistan, “was also running the drug trade,” of which the bank BCCI “was completely involved.” In the 1980s, the CIA insisted that the ISI create “a special cell for the use of heroin for covert actions.” Elaborating:

This cell promoted the cultivation of opium and the extraction of heroin in Pakistani territory as well as in the Afghan territory under Mujahideen control for being smuggled into Soviet controlled areas in order to make the Soviet troops heroin addicts.[62]

This plan apparently originated at the suggestion of French intelligence chief and founder of the Safari Club, Alexandre de Marenches, who recommended it to CIA Director Casey.[63]

In the 1980s, one program undertaken by the United States was to finance Mujahideen propaganda in textbooks for Afghan schools. The US gave the Mujahideen $43 million in “non-lethal” aid for the textbook project alone, which was given by USAID: “The U.S. Agency for International Development, [USAID] coordinated its work with the CIA, which ran the weapons program,” and “The U.S. government told the AID to let the Afghan war chiefs decide the school curriculum and the content of the textbooks.”[64]

The textbooks were “filled with violent images and militant Islamic teachings,” and “were filled with talk of jihad and featured drawings of guns, bullets, soldiers and mines.” Even since the covert war of the 1980s, the textbooks “have served since then as the Afghan school system’s core curriculum. Even the Taliban used the American-produced books.” The books were developed through a USAID grant to the “University of Nebraska-Omaha and its Center for Afghanistan Studies,” and when the books were smuggled into Afghanistan through regional military leaders, “Children were taught to count with illustrations showing tanks, missiles and land mines.” USAID stopped this funding in 1994.[65]

The Rise of the Taliban

When the Soviets withdrew from Afghanistan in 1989, the fighting continued between the Afghan government backed by the USSR and the Mujahideen backed by the US, Saudi Arabia, and Pakistan. When the Soviet Union collapsed in 1991, so too did its aid to the Afghan government, which itself was overthrown in 1992. However, fighting almost immediately broke out between rival factions vying for power, including Hekmatyar.

In the early 1990s, an obscure group of “Pashtun country folk” had become a powerful military and political force in Afghanistan, known as the Taliban.[66] The Taliban “surfaced as a small militia force operating near Kandahar city during the spring and summer of 1994, carrying out vigilante attacks against minor warlords.” As growing discontent with the warlords grew, so too did the reputation of the Taliban.[67]

The Taliban acquired an alliance with the ISI in 1994, and throughout 1995, the relationship between the Taliban and the ISI accelerated and “became more and more of a direct military alliance.” The Taliban ultimately became “an asset of the ISI” and “a client of the Pakistan army.”[68] Further, “Between 1994 and 1996, the USA supported the Taliban politically through its allies Pakistan and Saudi Arabia, essentially because Washington viewed the Taliban as anti-Iranian, anti-Shia, and pro-Western.”[69]

Selig Harrison, a scholar with the Woodrow Wilson International Centre for Scholars and “a leading US expert on South Asia,” said at a conference in India that the CIA worked with Pakistan to create the Taliban. Harrison has “extensive contact” with the CIA, as “he had meetings with CIA leaders at the time when Islamic forces were being strengthened in Afghanistan,” while he was a senior associate of the Carnegie Endowment for International Peace. As he further revealed in 2001, “The CIA still has close links with the ISI.”[70] By 1996, the Taliban had control of Kandahar, but still fighting and instability continued in the country.

Osama and Al-Qaeda

Between 1980 and 1989, roughly $600 million was passed through Osama bin Laden’s charity front organizations, specifically the Maktab al-Khidamat (MAK), also known as Al-Kifah. The money mostly originated with wealthy donors in Saudi Arabia and other areas in the Persian Gulf, and was funneled through his charity fronts to arm and fund the mujahideen in Afghanistan.[71]

In the 1980s, the British Special Forces (SAS) were training mujahideen in Afghanistan, as well as in secret camps in Scotland, and the SAS is largely taking orders from the CIA. The CIA also indirectly begins to arm Osama bin Laden.[72] Osama bin Laden’s front charity, the MAK, “was nurtured” by the Pakistani ISI.[73]

Osama bin Laden was reported to have been personally recruited by the CIA in 1979 in Istanbul. He had the close support of Prince Turki bin Faisal, his friend and head of Saudi intelligence, and also developed ties with Hekmatyar in Afghanistan,[74] both of whom were pivotal figures in the CIA-Safari Club network. General Akhtar Abdul Rahman, the head of the Pakistani ISI from 1980 to 1987, would meet regularly with Osama bin Laden in Pakistan, and they formed a partnership in demanding a tax on the opium trade from warlords so that by 1985, bin Laden and the ISI were splitting the profits of over $100 million per year.[75] In 1985, Osama bin Laden’s brother, Salem, stated that Osama was “the liaison between the US, the Saudi government, and the Afghan rebels.”[76]

In 1988, Bin Laden discussed “the establishment of a new military group,” which would come to be known as Al-Qaeda.[77] Osama bin Laden’s charity front, the MAK, (eventually to form Al-Qaeda) founded the al-Kifah Center in Brooklyn, New York, to recruit Muslims for the jihad against the Soviets. The al-Kifah Center was founded in the late 1980s with the support of the U.S. government, which provided visas for known terrorists associated with the organization, including Ali Mohamed, the “blind sheik” Omar Abdel Rahman and possibly the lead 9/11 hijacker, Mohamed Atta.[78]

This coincided with the creation of Al-Qaeda, of which the al-Kifah Center was a recruiting front. Foot soldiers for Al-Qaeda were “admitted to the United States for training under a special visa program.” The FBI had been surveilling the training of terrorists, however, “it terminated this surveillance in the fall of 1989.” In 1990, the CIA granted Sheikh Omar Abdel Rahman a visa to come run the al-Kifah Center, who was considered an “untouchable” as he was “being protected by no fewer than three agencies,” including the State Department, the National Security Agency (NSA) and the CIA.[79]

Robin Cook, a former British MP and Minister of Foreign Affairs wrote that Al-Qaeda, “literally ‘the database’, was originally the computer file of the thousands of mujahideen who were recruited and trained with help from the CIA to defeat the Russians.”[80] Thus, “Al-Qaeda” was born as an instrument of western intelligence agencies. This account of al-Qaeda was further corroborated by a former French military intelligence agent, who stated that, “In the mid-1980s, Al Qaida was a database,” and that it remained as such into the 1990s. He contended that, “Al Qaida was neither a terrorist group nor Osama bin Laden’s personal property,” and further:

The truth is, there is no Islamic army or terrorist group called Al Qaida. And any informed intelligence officer knows this. But there is a propaganda campaign to make the public believe in the presence of an identified entity representing the ‘devil’ only in order to drive the ‘TV watcher’ to accept a unified international leadership for a war against terrorism. The country behind this propaganda is the US and the lobbyists for the US war on terrorism are only interested in making money.[81]

The creation of Al-Qaeda was thus facilitated by the CIA and allied intelligence networks, the purpose of which was to maintain this “database” of Mujahideen to be used as intelligence assets to achieve US foreign policy objectives, throughout both the Cold War, and into the post-Cold War era of the ‘new world order’.

Part 2 of “The Imperial Anatomy of al-Qaeda” takes the reader through an examination of the new imperial strategy laid out by American geopolitical strategists at the end of the Cold War, designed for America to maintain control over the world’s resources and prevent the rise of competitive powers. Covertly, the “database” (al-Qaeda) became central to this process, being used to advance imperial aims in various regions, such as in the dismantling of Yugoslavia. Part 2 further examines the exact nature of ‘al-Qaeda’, its origins, terms, training, arming, financing, and expansion. In particular, the roles of western intelligence agencies in the evolution and expansion of al-Qaeda is a central focus. Finally, an analysis of the preparations for the war in Afghanistan is undertaken to shed light on the geopolitical ambitions behind the conflict that has now been waging for nearly nine years.

* [Note on the research: For a comprehensive analysis of the history, origins and nature of al-Qaeda, see: Peter Dale Scott, The Road to 9/11: Wealth, Empire and the Future of America, which provided much of the research in the above article.]

Notes

[1]        Peter Dale Scott, The Road to 9/11: Wealth, Empire, and the Future of America. University of California Press: 2007: page 62

[2]        Ibid, page 63.

[3]        Ibid, page 62.

[4]        Ibid, pages 66-67.

[5]        HP-Time, The Crescent of Crisis. Time Magazine: January 15, 1979:
http://www.time.com/time/magazine/article/0,9171,919995-1,00.html

[6]        Peter Dale Scott, op. cit., page 67.

[7]        F. William Engdahl, A Century of War: Anglo-American Oil Politics and the New  World Order. London: Pluto Press, 2004: page 171

[8]        Manouchehr Ganji, Defying the Iranian Revolution: From a Minister to the Shah to a Leader of Resistance. Greenwood Publishing Group, 2002: page 41

[9]        Ibid, page 39.

[10]      Ibid, page 41.

[11]      Ibid.

[12]      F. William Engdahl, A Century of War: Anglo-American Oil Politics and the New  World Order. London: Pluto Press, 2004: page 172

[13]      Ibid, page 171.

[14]      George Lenczowski, The Arc of Crisis: It’s Central Sector. Foreign Affairs: Summer, 1979: page 796

[15]      Ibid, page 797.

[16]      Ibid, page 798.

[17]      IPS, Q&A:  Iran’s Islamic Revolution Had Western Blessing. Inter-Press Service: July 26, 2008:
http://www.ipsnews.net/news.asp?idnews=43328

[18]      Michael D. Evans, Father of the Iranian revolution. The Jerusalem Post: June 20, 2007:
http://www.jpost.com/servlet/Satellite?cid=1181813077590&pagename=JPost/JPArticle/ShowFull

[19]      Peter Dale Scott, op cit., page 89.

[20]      George Lenczowski, The Arc of Crisis: It’s Central Sector. Foreign Affairs: Summer, 1979: page 810

[21]      F. William Engdahl, op cit., page 172.

[22]      Peter Dale Scott, op cit., page 81.

[23]      Michael D. Evans, Father of the Iranian revolution. The Jerusalem Post: June 20, 2007:
http://www.jpost.com/servlet/Satellite?cid=1181813077590&pagename=JPost/JPArticle/ShowFull

[24]      Peter Dale Scott, op cit., page 83.

[25]      Ibid, page 84.

[26]      Ibid, page 81.

[27]      Ibid, pages 85-86.

[28]      Ibid.

[29]      Ibid, page 87.

[30]      Ibid, pages 88-89.

[31]      Ibid.

[32]      Ibid, pages 87-88.

[33]      Ibid, page 85.

[34]      Ibid, page 86.

[35]      Ibid, page 88.

[36]      F. William Engdahl, A Century of War: Anglo-American Oil Politics and the New  World Order. London: Pluto Press, 2004: page 173

[37]      Andrew Gavin Marshall, Controlling the Global Economy: Bilderberg, the Trilateral Commission and the Federal Reserve. Global Research: August 3, 2009:
http://www.globalresearch.ca/index.php?context=va&aid=14614

[38]      Peter Dale Scott, The Road to 9/11: Wealth, Empire, and the Future of America. University of California Press: 2007: page 89

[39]      PBS, Secrets of His Life and Leadership: An Interview with Said K. Aburish. PBS Frontline:
http://www.pbs.org/wgbh/pages/frontline/shows/saddam/interviews/aburish.html

[40]      Michael Parenti, Afghanistan, Another Untold Story. Global Research: December 4, 2008:
http://www.globalresearch.ca/index.php?context=va&aid=11279

[41]      Oleg Kalugin, How We Invaded Afghanistan. Foreign Policy: December 11, 2009:
http://www.foreignpolicy.com/articles/2009/12/11/how_we_invaded_afghanistan

[42]      ‘’Le Nouvel Observateur’ (France), Jan 15-21, 1998, p. 76:
http://www.ucc.ie/acad/appsoc/tmp_store/mia/Library/history/afghanistan/archive/brzezinski/1998/interview.htm

[43]      Ibid.

[44]      Peter Dale Scott, The Road to 9/11: Wealth, Empire, and the Future of America. University of California Press: 2007: page 73

[45]      Michael Parenti, Afghanistan, Another Untold Story. Global Research: December 4, 2008:
http://www.globalresearch.ca/index.php?context=va&aid=11279

[46]      Peter Dale Scott, op cit., page 78.

[47]      Ibid, page 116.

[48]      Ibid, page 122.

[49]      Ibid, page 123.

[50]      Ibid,.

[51]      Alfred W. McCoy, The Politics of Heroin: CIA Complicity in the Global Drug Trade. (Lawrence Hill Books: Chicago, 2003), page 80

[52]      Ibid, page 162.

[53]      Ibid.

[54]      Ibid, pages 283-386.

[55]      Ibid, page 466.

[56]      Ibid, page 474.

[57]      Peter Dale Scott, The Road to 9/11: Wealth, Empire, and the Future of America. University of California Press: 2007: page 73

[58]      Alfred W. McCoy, op cit., page 475.

[59]      Peter Dale Scott, op cit., page 74.

[60]      Ibid, pages 75-76.

[61]      Ibid, page 124.

[62]      Ibid, pages 75-76.

[63]      Ibid, page 124.

[64]      Carol Off, Back to school in Afghanistan. CBC: May 6, 2002:
http://www.cbc.ca/news/background/afghanistan/schools.html

[65]      Joe Stephens and David B. Ottaway, From U.S., the ABC’s of Jihad. The Washington Post: March 23, 2002:
http://www.washingtonpost.com/ac2/wp-dyn/A5339-2002Mar22?language=printer

[66]      Steve Coll, Ghost Wars: The Secret History of the CIA, Afghanistan, and Bin Laden, From the Soviet Invasion to September 10, 2001. Penguin Books, New York, 2004: Page 328

[67]      Steve Coll, Ghost Wars: The Secret History of the CIA, Afghanistan, and Bin Laden, From the Soviet Invasion to September 11, 2001. (London: Penguin, 2005), page 285

[68]      Steve Coll, “Steve Coll” Interview with PBS Frontline. PBS Frontline: October 3, 2006:
http://www.pbs.org/wgbh/pages/frontline/taliban/interviews/coll.html

[69]      Robert Dreyfuss, Devil’s Game: How the United States Helped Unleash Fundamentalist Islam. (New York: Metropolitan Books, 2005), page 326

[70]      ToI, “CIA worked in tandem with Pak to create Taliban”. The Times of India: March 7, 2001:
http://www.multiline.com.au/~johnm/taliban.htm

[71]      Robert Dreyfuss, Devil’s Game: How the United States Helped Unleash Fundamentalist Islam. (New York: Metropolitan Books, 2005), pages 279-280

[72]      Simon Reeve, The New Jackals: Ramzi Yousef, Osama bin Laden, and the Future of Terrorism. (London: André Deutsch Ltd, 1999), page 168

[73]      Michael Moran, Bin Laden comes home to roost. MSNBC: August 24, 1998:
http://www.msnbc.msn.com/id/3340101/

[74]      Veronique Maurus and Marc Rock, The Most Dreaded Man of the United States, Controlled a Long Time by the CIA. Le Monde Diplomatique: September 14, 2001: http://www.wanttoknow.info/010914lemonde

[75]      Gerald Posner, Why America Slept: The Failure to Prevent 9/11. (New York: Random House, 2003), page 29

[76]      Steve Coll, The Bin Ladens. (New York: Penguin, 2008), pages 7-9

[77]      AP, Al Qaeda Financing Documents Turn Up in Bosnia Raid. Fox News: February 19, 2003:
http://www.foxnews.com/story/0,2933,78937,00.html

[78]      Peter Dale Scott, The Road to 9/11: Wealth, Empire, and the Future of America. University of California Press: 2007: pages 140-141

[79]      Ibid, page 141.

[80]      Robin Cook, The struggle against terrorism cannot be won by military means. The Guardian: July 8, 2005:
http://www.guardian.co.uk/uk/2005/jul/08/july7.development

[81]      Pierre-Henri Bunel, Al Qaeda — the Database. Global Research: November 20, 2005:
http://www.globalresearch.ca/index.php?context=viewArticle&code=BUN20051120&articleId=1291