The 'Mexicanization' of America

We are witnessing the ‘Mexicanization’ of America.

No, it’s not immigration that’s the problem. It’s institutionalized corruption, corruption at every level of government.

How has it happened? Money. Much of it Dirty Money.

In Mexico, the combination of cocaine from Colombia, the privatization of public companies, and the passage of NAFTA created a wholesale transfer of wealth to corrupt ‘businessmen’ and the politicians they kept in office. The public pinnacle of this corruption was the presidency of Carlos Salinas who was forced to flee Mexico but who remains a free man.

Salinas, a poster boy for free trade and privatization, was the top candidate—promoted by America—to head the World Trade Organization until his brother Raúl went to prison for murder. The brothers institutionalized corruption in Mexico at an unprecedented scale based on their dealings with the bosses of drug cartels.

Although the use of illicit drugs has been around forever, wealth generated by drug trafficking into America exploded in Mexico as a result of:

• The CIA’s use of drug money to pay for its clandestine adventures, especially Nicaragua
• Free trade agreements, especially NAFTA
• Communications technology and the increasing sophistication of traffickers and their money launderers.

US Banks: $1 Trillion a Year from Drug Money

Drug money enriches American banks by as much as $1 trillion a year. Our bankers are keeping traffickers—drugs, arms, human traffickers—in business.

This dirty money is now a fundamental part of the American economy. Much of that dirty money is being spent to win American elections for politicians who support ‘free market,’ anti-regulatory policies thanks to the Supreme Court’s anti-democratic Citizens United vs. FEC decision.

None of the players—the billionaire and multi-millionaire business executives, the politicians greedy for campaign contributions and cushy jobs after they leave public office, and the professional enablers: accounting firms, law firms, public relations and ‘strategy’ firms who are paid to shield and/or promote the activities of those executives and politicians—none of them wants to see the illicit money tap closed.

The best way to keep the money flowing is to oppose a regulatory environment that might expose corruption—money laundering, bribery, trafficking.

No Conspiracy Theory--Just Business

Trafficking is now a business and like any other business, it depends on financial services—accounting, banking, investment—and technology. The best way to control trafficking is to impose transparency on financial services.

This isn’t a conspiracy theory. The players in this corruption don’t coordinate their activities as conspirators do. They’re all independent, each out to get as much as he can for himself, but they all need the same thing: a global trade and financial system that resists regulatory oversight.

If you don’t think it’s ‘all about the money,’ consider these facts from Public Citizen:

• Senators who supported Wall Street’s position on the two most important financial service bills of the last two sessions of Congress—the 2008 Troubled Asset Relief Program (TARP) and the 2010 financial reform bill—got an average of $879,803 from Wall Street interest groups. Senators who opposed Wall Street got $63,569 each—a difference of nearly 14 to 1.
• Earlier this year, the Senate voted on whether to extend billions of dollars in taxpayer subsidies to Big Oil. The 48 senators who supported subsidies each got an average of over $370,000 in campaign contributions from the industry. The 52 senators who opposed subsides each got only about $72,000.
• Last year, 43 members of the politically conservative New Democrat Coalition sent a letter urging House-Senate negotiators to weaken the financial reform bill’s regulation of derivatives. On average, they received 44% more in campaign contributions from the financial services sector in the 2010 election cycle than the 25 coalition members who did not sign the letter.
• During a recent 18-month period the financial services industry sent 1,447 former federal employees to lobby Congress and federal agencies on financial reform, among them 73 former members of Congress, people who had personal relationships with current members and staff. Do citizens have that kind of access in the halls of power?
• Unaccountable, outside groups favored the winning candidates in 58 of the 74 races in which political power changed hands in the 2010 congressional elections, thanks to the democracy-destroying Supreme Court decision Citizens United v. FEC which permits contributions from corporations and wealthy individuals to be made secretly—the same way bribes are paid. (For more on these issues, see Public Citizen.)

Mexico: A Case Study

        Where does so much money come from? Consider what happened in Mexico as a case study, as described by Charles Bowden in Down by the River:

Salinas ... sold off over three hundred government industries, including the banking industry and the telephone company. Telemex, the phone company, then raised its rates 247 percent. Wages only went up 18 percent. The phone company remained as before, a monopoly. (251)

When the state-owned businesses were sold:

the number of billionaires rose from two to twenty-four (between 1991 and 1994), this without any appreciable increase in the nation’s gross domestic product, an achievement almost without precedent in economic history. (253)

What did Salinas want these billionaires to do? Pay for his party’s political campaigns:

The dinner ends at midnight with $750 million pledged by the [billionaire] guests. Mexico, with an economy of about 5 percent that of the United States, had managed to raise for its ruling party over dinner five times what the Democratic Party spent to elect Bill Clinton in 1992. (251)

Billionaire ‘businessmen’ are connected to a network of banks and illicit global trade—arms, drugs, human trafficking. Bowden describes the case of one such billionaire family and how the U.S. government protected them:

The target of the probe is the Hank family and their billion-dollar fortunes and their deep ties to all the presidents of Mexico since the 1970s. The operation reveals endless connections to cartels and to straight businesses .... the Gulf cartel, the Tijuana cartel, U.S. banks, and on and on.

The operation is shut down. But the files are shared with the National Drug Intelligence Center . . . and it cobbles together a report on the Hanks that paints them as a major criminal threat to the United States. This report is finally leaked to the American press in 1999 and briefly noted.

When the Hank family protests both the leak of the report and all of its allegations through its mouthpiece, former Republican U.S. Senator Warren Rudman, he gets results. Rudman at the time is a member of the president’s Foreign Intelligence Advisory Board. Janet Reno, the attorney general of the United States, retracts the report by issuing a statement: “The analysis and any conclusions and inferences contained in the report have not been adopted as official views and positions of the NDIC, the Department of Justice, or the various federal, state and local law-enforcement and regulatory authorities that may have provided information to the drafters of the report.” (298)

Of course, it isn’t just about Mexico. Another anti-democratic promoter of privatization and free trade was General Augusto Pinochet:

In the late 1990s, General Augusto Pinochet, the dictator of Chile from 1973 until 1990, suffers the embarrassment of arrest in Britain. Then it comes to light that the general has over $1 million in a bank account in Washington, D.C. This is serious thrift for a man whose yearly salary as commander of the Chilean army was $16,000.... What becomes clear is that Chile through its secret police was moving billions of dollars’ worth of cocaine into Europe in the mid-1980s. A former U.S. Marine and CIA operative was the crucial element in this work. (309-310) [Pinochet actually had secret accounts in multiple U.S. banks totaling millions, as exposed by a U.S. Senate investigation in 2005, three years after Bowden’s book was published.]

Who managed the coup that put Pinochet in office? The U.S. government. Who has spent hundreds of millions of dollars to support Mexico in its notoriously unsuccessful ‘war on drugs?’ The American taxpayer. Who profits? American banks.

In early 1998, U.S. Customs agents are deep into a money-laundering investigation of Mexican cartel players. They have already washed $60 million for drug merchants as a way of getting entrée into this hidden financial world. Apparently, the drug merchants are impressed.... They come with a new laundry order: $1.5 billion. They say the money must be cleansed for the general who heads Mexico’s Ministry of Defense. The drug representatives are worried at times about the money, since, they explain some of the take belongs to the president of Mexico, Ernesto Zedillo. The CIA denies that the general is in league with the drug business, as does the Mexican government. Within weeks of this offer, the Clinton administration shuts down the investigation, once called Operation Casablanca. The probe is decried by the secretary of state, Madeleine Albright, and by the U.S. drug czar, General Barry McCaffrey. The Mexican government also denounces the probe. In the end, a herd of Mexican bankers are arrested in Nevada. Though they have funneled money through numerous U.S. banks, none of the cooperating U.S. financial institutions are charged or held culpable for moving drug money. It is assumed that they did not know who their clients really were. (330)

The above quotes are from Down by the River, by Charles Bowden, Simon & Schuster (2002). Bowden, a First Amendment Award Honoree, is the recipient of a Lannan Literary Award for Nonfiction, and the Sidney Hillman Prize. He is the critically acclaimed author of many books, including Murder City, Down by the River, A Shadow in the City, and co-editor of El Sicario. He is a contributing editor of GQ and Mother Jones magazine, and writes for other magazines, including Harper's Magazine and Aperture.