Why Mega Banks Are The Modern Cocaine Cowboys

Tyler Durden's picture

In today's episode of blast from the past, Bloomberg's Jonathan Weil takes us on a time journey, which presents the Too Big To Fail bank problem from a different perspective: that of the Cocaine Cowboy roaming the streets of Miami in the late 1970s and early 1980s. Just like today's big banks they were untouchable; just like today's banks they were collaborating and existing in perfect symbiosis with the Federal Reserve; just like today the Cocaine Cowboys existed in an untouchable vacuum courtesy of endless bribes to the local law enforcement and judicial officials, and just like today, the TBTF institution du jour isn't "merely an economic problem. It is a great moral failing of our society that poisons our democracy." Back then, Ronald Reagan stepped in just when Miami (whose real estate market had soared in 1979-1981 courtesy of rampant crime and money laundering: hint hint NAR anti money-laundering exemptions) was about to be overrun, forming a task force that in the nick of time restored law and order. Today we are not that lucky, as there is not a single politican willing to risk it all just to eradicate the modern version of a classic scourge: only this time they don't hand out 8 balls; they give away 0% introductory APR cards and 3 Year NINJA Adjustable Rate Mortgages. Both however get you hooked for life: either on drugs or on debt. Will someone step up this time and form a task force to eliminate the second coming of the Cocaine Cowboy? Sadly, we don't think so. At least not until the next great crash happens.

From Jonathan Weil of Bloomberg:

Cocaine Cowboys Know Best Places to Bank

To grow up in South Florida during the 1970s and 1980s, as I did, wasn’t your typical American childhood experience. Back then the area was known as the most dangerous place in the country.

Carnage from the drug wars filled the local news long before “Miami Vice” became a hit TV show. By elementary school, my friends and I knew some of the lingo. A Colombian necktie wasn’t a piece of clothing, but a gruesome execution method. When I was 7 years old my barber was murdered in his shop, apparently over a drug deal.

It had been a long time since I thought much about those days. By chance I recently came across a fabulous documentary, “Cocaine Cowboys,” by Miami filmmaker Billy Corben. Then last month a Senate panel held a hearing on the U.K. bank HSBC Holdings Plc (HSBA) and its ties to drug lords, money laundering, al- Qaeda and rogue nations such as Iran and North Korea.

Here’s a bank with $2.7 trillion of assets that flouted U.S. laws for a decade, according to the July 17 report by the Senate Permanent Subcommittee on Investigations. HSBC turned a blind eye to organized crime, Mexican drug cartels and overseas terrorism financiers, and gave them access to the U.S. banking system. HSBC’s main U.S. regulator, the Office of the Comptroller of the Currency, for years tolerated its violations of anti-money laundering laws.

For this, HSBC and the OCC apologized. Justice Department fines are likely. It’s an outrage HSBC hasn’t had its U.S. banking licenses revoked, assuming the Senate panel’s report is accurate -- and there’s no reason to believe it isn’t.

Try This

Let’s try out a novel idea: Banks that help drug cartels launder money and give cover to those tied to terrorism should be put out of business. Is that really so hard for everyone to agree on? Free markets have worked in the U.S. because we have the rule of law. It’s why so many investors from other countries want to do business here. When contracts are breached, courts can be accessed to enforce them. When individuals or companies commit crimes, they’re supposed to be prosecuted and punished.

Except we have this mutant species of corporation called too-big-to-fail banks whose collapse might wreck the global economy. No financial institution in the U.S. can survive a felony indictment. So these companies have become un-indictable, creating a perverse nonchalance regarding financial crimes. In 2010, Wachovia paid $160 million to settle criminal allegations of laundering Mexican drug money. By then the bank had been bought by Wells Fargo & Co. (WFC), and the Justice Department let it off with a deferred-prosecution deal. Usually the most that happens to management is someone resigns, as HSBC’s head of compliance, David Bagley, said he would at last month’s Senate hearing.

What would it take for the government to really crack down on wrongdoing in the financial-services industry? What finally prompted the feds to do something about cocaine smuggling into South Florida long ago was the epidemic of violence it spawned.

A defining moment came in July 1979, when drug traffickers went on a shooting spree in broad daylight at the Dadeland Mall in Kendall, southwest of Miami. This was unprecedented. The gunmen arrived in a delivery van that had been converted into an armored personnel carrier. Two people were killed. Bystanders dove for cover. Cars in the parking lot were riddled with bullets from machine-gun fire.

Attacks like that became frequent over the next few years. In 1979 there were 349 murders in South Florida, according to the Justice Department, triple the number of two years earlier. By 1981 murders had climbed to 621. The local police were outgunned, outnumbered, easily corrupted and often stoned. Finally in 1982 President Ronald Reagan formed a task force and devoted hundreds of additional federal agents to South Florida to restore law and order.
Cash Surplus

Back then, too, the cartels’ enablers included dirty banks. As Corben’s film noted, in 1979 the Federal Reserve’s Miami branch reported a $5 billion cash surplus -- more than the country’s other Federal Reserve banks combined. One crucial difference, compared with today, was the drug banks in those days were relatively small. When an outfit such as Sunshine State Bank got busted, it didn’t threaten the economy.

In terms of stray bullets, Miami is a much safer place today. But mainly what the U.S. did was drive the cartels, the turf battles and the killings into Mexico, where the violence is out of mind for most Americans even while much of that country has turned into a narco-state.

Maybe if the bankers were the ones spraying machine-gun fire in the streets, that might spur the U.S. government to take meaningful, punitive action. Short of that, you have to wonder if anything would. Too-big-to-fail isn’t merely an economic problem. It is a great moral failing of our society that poisons our democracy. Something has to give.

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HelluvaEngineer's picture

Fuck you, Bernanke!

veyron's picture

Fuck Ron Paul.  Selling out to Obamney ...

DoChenRollingBearing's picture

Miami is very different than in the old days.  Banks do not willy-nilly launder money anymore.  Most illegal drugs (IIRC) now come over the US - Mexico border.

As far as the banks being the new equivalent of the Cocaine Cowboys, well, OK I accept that.

But, turning to DIFFERENT power centers, my new blog article discusses "The Fractured Elite" that I wrote about in June, and how a recent book I just finished about powerful ExxonMobil strengthens my case that "The Elite" does not control us, yet.  Too many players with different agendas...


AldousHuxley's picture

Mega anything dilutes quality



The 22nd Prime's picture

I was in Miami until the late 90s. I lived near where the FBI agents were killed in 1986. During the 70s and 80s I remember every holiday hearing the AKs firing all over the place. The cops would park under over passes. Your chances of getting hit by errant bullets were slim. These drive by bankers are far more dangerous.

Dr Benway's picture

The misery described in the article is a direct result of drug prohibition, just like the gangster wars during alcohol prohibition over alcohol.


The mindless, unjust, horrible, immoral, ineffective stupid fucking war on drugs needs to be denounced everywhere intelligent discussion is held.


Please, please please no more articles on ZH comparing real criminals (banksters) to bartenders of other drugs than alcohol (dealers)?

Henry Chinaski's picture

+1.  Bad analogy. Victimless crime vs fraud/theft.  Nonetheless, Cocaine Cowboys is riveting video.

malikai's picture

3 words. The Clinton Chronicles.


I do not care that he had sexual relations with that woman.

I care that he and all the rest are a bunch of crooked theives using the government as their cover.

TruthInSunshine's picture

Well, if the government was no longer able to convince the majority of the sheep that the sheep need it (aside from the most basic functions germaine to the social contract consistent with free societies), what would it do?

Control Through Fear
jeff montanye's picture

yes ron paul sold out to obamney and ronald reagan saved us from the cocaine cowboys.


those were close ones.


LMAOLORI's picture



"Fuck you, Bernanke!"


Misplaced Anger

What about Obama shouldn't you be saying FU Obama - the buck stops with him LITERALLY and if he were any kind of a leader he would step up like President Reagan did. Obama kept Bernanke, put in that scumbag Geithner and then there's the corrupt Holder. 

Doublescythe's picture

I loves me some financial nose candy!

Banging secretaries ain't too bad neither.


ACP's picture

And now for the Zen question:

If you snort coke with a rolled dollar bill, what do you roll up to snort dollar bills?

jeff montanye's picture

liking the donkey.  but gold leaf is utterly unnecessary.  need you some fractional banking.


awakening's picture

Smoke 'em, don't snort 'em.

Yen Cross's picture

   Is { dis-deflation} the same as (de-evolution) ?  ':/

akak's picture

No, it is more properly defined as antireundisinflation.

Yen Cross's picture

  anti-re-un(dis-in-flat-ion)!  +1 akak!  LMAO!

SwingForce's picture

Cut off THE FED, starve the ADDICT. How fucking simple is THAT????

PS. Draghi is a piece of SHIT.

Nassim's picture

Look mate, isn't it about time you grew up? HSBC was simply doing what BCCI was doing earlier on.

The Powers That Be are hand-in-glove with the cocaine cartels. They are part-and-parcel of the same package.TPTB need these banks to do these things. They make money that way.

Do you think that the US presence in Afghanistan is unconnected with the fact that it has 90+% of the world's heroin supply? Do you think that these rendition planes that ferry people around to get tortured at convenience in Egypt, Syria, Jordan and so on have empty holds? Guess what they ferry around besides their unfortunate human cargoes? Why do you think these planes don't get checked by customs when they drop in on the UK, Germany and so on?

"Bank of Credit and Commerce International (BCCI)"


Let's get real

Acet's picture

The whole purpose of the War On Drugs is to create this huge pool of money outside the normal economy, not to mention create massive amounts of State jobs for the boys in law enforcement, juicy contracts for suppliers and a huge prision population to feed the profits of the private companies that run most prisions.

If every man's right to put in his own body whatever the fuck he wanted was respected and drugs were legal, do you really think it would be possible for criminal groups to afford to pay for masses of heavilly armed "soldiers" out of the profit margins from legal products made out of vegetables which are easier to grow than lettuce?


r00t61's picture

The original "War on Drugs" - Prohibition - created the rise of the gansters like Al Capone, as it quickly became clear that bootlegging in the black market was a profitable venture (one made possible only by the government attempting to legislate alcohol consumption out of existence in the first place).

It also gave the government the excuse to pass the National Firearms Act of 1934, an attempt to regulate weapons, justified on the basis of the criminal activities of the gangsters that Prohibition allowed to flourish.

Disenchanted's picture




Not to mention Castle Bank & Trust, Nugan Hand, etc....or Continental Bank of Chicago...or Riggs Bank, Wash. DC


These 'banks' come and they go...

Matt's picture

When the Pope is arrested and charged for aiding and abetting child molesters, then I will believe in the rule of law. Until then, there are layers of law that stratify us into different tiers of how much the law applies to us, depending on how connected we are. It's a nice fantasy, but I doubt anything will ever come of it.

WTFx10's picture

Criminal Law, The criminals get to make the laws and we have to follow. The Laws vary according to the criminal enterprise making the law. The higher up the criminal ladder the more freedom you have. Structured Organized Crime, it's a great system when you're a part of it,not so good if you're not. 99.99% are not. The .01% is Don Corleone (Rothschild's) and the five families. Just like in the Godfather Rothschild's Vito meets with the heads of the Five Criminal(banking) Families.

Why is it that these folks never make the richest people in the world list? Because they own stole it. The golden rule! He who owns the gold makes the rules. He who makes the fiat and gets the fools to use it while stealing their gold with fiat, makes the rules. 

Elite no, wealthy no, just plain con men and thieves who happen to be mostly jewish and not italian.

Paul Atreides's picture

I don't do cocaine, I just like the smell of it.


"I didn't have sexual relations with that women." ~  Hee Haw

Theosebes Goodfellow's picture

LOL, thanks Paul, that reminds me what I said to myself when I quit it so many years ago.

"No one should love anything as much as I love cocaine." The trick to not doing it is....

don't do the first line.

Deathrips's picture

Anyone know what happens to sissies that play tough in violent games like the cocaine cowboys...? they end up dead. THese bankers are playing pretty tough behind someone elses muscle. Thing is that muscle doesnt respect them in increasing numbers. Pretty soon they are all going to be targets. And they are going to remember getting punked in grade school and have no mommy to cry to.

Fuck you sissy ass bitches.

Fuck you bernake.

Fuck us all for letting this happen.


damn im pissed now....again.

toomanyfakeconservatives's picture

You area dead on. The pussies who have been pissing on the Constitution for so many years are softies. When the MASS ARRESTS occur they are going to be dragged away in handcuffs, crying and grovelling... http://tinyurl.com/cd5cyjo/

Bunga Bunga's picture
Get over it, it's the legalized branch of crime. HSBC: The World’s Dirtiest Bank


disabledvet's picture

I like my rich outrageous, scandalous and beyond the pale. I've been highly disappointed this go around. Where are they in the news? Bailouts? Like that sells. Having said that I have a soft spot in my heart for government types who "use excessive force, break the law in order to enforce it and generally create a climate of who the hell elected you." can't say...well actually I CAN say now that I think about. And that guy just got released! Anywho I imagine...no wait...I KNOW that's how the Fed's operated back in those days. "The arm of the law is long" and while it might take awhile for Omar the Sheerif to wind up his arresting arm...once it's unleashed I think these Anarchists of Finance are in for a rude awakening.

LostWages's picture

time for term limits and caps on election spending.  once the politicians cannot be bought , just maybe we get some loyal americans to make the tough decisions and put the needs of the country ahead of their own selfish interests about being reelected. put the criminal banksters out of business and in jail.  it would only take one big fish to make the rest swim in formation

TrustWho's picture

On local radio, an ex-CIA agent who worked on money laundering crimes was mad as hell that no one from HSBC was being criminally prosecuted. He said bank management had to have a plan to collect and move the cash every day. I forget the specifics but he spoke of tons of cash bills that moved through a few banks every day. Since no one goes to jail, the government is complicit in the crime as their civil damages are just a cut of the business just like the Mafia collecting their protection money.  

q99x2's picture

We have Eric Holder, the guy that runs the drugs, as the head of operations. I'd think you'd have to get him out of the way but you can't because Obama is covering for him. A difficult situation requires a person of courage and of sound mind.

But it might be possible if there is a financial/noteriety motive. Maybe a bounty.

Motorhead's picture

And to think about the shit the Left gave John Ashcroft.  This fukcing system is broke beyond repair.

SubjectivObject's picture

Why?  Because we the efking peons are too fearful and distracted to do anything about it.

They pay themselves to to set this shit up.  Anyone who opposes them have to work on discretionary time and capital. 

Let's keep it simple for our impoverished asses.  Let's simply agree that they, and their enforcers, are the enemy.  And let's tolerate each other's imature ignorant stink just enough to organize any an all forms of attrition against the status quo of their power.  

Things will get funky, in any case, but let's work for freedom amid the funk.


km4's picture

You mean like Goldman Sachs 

Accidentally Released - and Incredibly Embarrassing - Documents Show How Goldman et al Engaged in 'Naked Short Selling'

The People vs. Goldman Sachs
Matt Taibbi: A Senate committee has laid out the evidence. Now the Justice Department should bring criminal charges

The Great American Bubble Machine
From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since the Great Depression -- and they're about to do it again

Read more: http://www.businessinsider.com/goldman-sachs-5-reasons-us-economy-q3-2012-8#ixzz22RS17yez

Hype Alert's picture

Naive.  Not sure what else to say.


We have an administration that gets caught funneling guns to drug cartels and he thinks the same administration is going to clean up the banks?  I think I'll just call it a day after that one.

JR's picture

“Then last month a Senate panel held a hearing on the U.K. bank HSBC Holdings Plc (HSBA) and its ties to drug lords, money laundering, al- Qaeda and rogue nations such as Iran and North Korea.” – Jonathan Weil of Bloomberg

The developments in the Middle East, especially with regard to the increasing belligerence of Israel even nearly saturating the campaigns leading to the November election and causing the Obama Administration to openingly support one side of the Syrian Civil War (for Israel) and with Romney versus Obama on who loves Israel more, the nomenclatures of the Middle East have changed.

Specifically, the term rogue nation has become no more than a neo-con Zionist propaganda definition with the slippery slope plan for attacking what has now been shown to be a peaceful nuclear program.

In the face of this despicable war propaganda and the rogue category, one man stands against it all. On the floor of the Congress, Texas Congressman Ron Paul identified for any who care to listen the absolute truth about Iran.

http://www.lewrockwell.com/blog/ -  Ron Paul vs. the Murderous Evil of Sanctions Against Iran

Speaking of rogues, we have our very own rogue, the newsmaker and mayor of Chicago, Rahm Emanuel, who was on the job when Fast and Furious moved automatic weapons to the drug cartels in Mexico. And anyone who doesn’t believe he was part of this project hasn’t been paying attention. And before we’re through with Rahm Emanuel, his news making has branched into intolerance bordering on restrictions of Constitutional guarantees.

Now Chicago’s Jewish Mayor is attempting to silence the Christian values and freedom of speech espoused by a fast food chain by blocking it from expanding in his city, saying “Chick-fil-A’s values are not Chicago values.”

Yes. Chicago’s values are Rahm Emanuel’s values. Every other word uttered by the man is the  “f” word. The man whose severed middle finger “which almost rendered him mute” is a caricature of human venality, a symbol of the shoddy cesspit of intolerance and value corruption that has become D.C. where he was Obama’s chief of staff, and now Chicago.

His are Chicago’s values. And Chicagoans should settle down and like it. When you elect someone like Emanuel, those are your values. If you want to be Democrats and get someone like Emanuel, live with it. That’s your mayor; that’s you! When we think of Chicago, that you once were the meat packer of the world, you are now the Jewish symbol of the world.

What do you mean those aren’t your values?  Swim in it, enjoy it, rub it on your ears. Chicago’s different now; it used to a proud city. Not anymore. There aren’t many cities around the world that have a mayor like Rahm Emanuel. You got him. He’s yours.

Bazza McKenzie's picture

Most of your comments may be valid.  But seriously, any country that buries nuclear development activities under mountains is pursuing something other than a peaceful nuclear program.  One might almost think they were displaying Chicago values.

malikai's picture

<-- Emmanuel

<-- Daley

Who is more crooked? I know, it's a tough one!

WTFx10's picture

Are you talking about Israel who has stolen nukes and has never signed an international treaty or iran who has followed all international laws?