Guns, drugs and vice have always been the bread and butter of organised crime.
Of all the things that your average cartel boss has to consider, number one is what to do about the money. There is just so much of it and it all has to be laundered.
United Nations Office on Drugs and Crime (UNODC) World Drug Report 2020, 5% of the global population uses illicit drugs. While the mix of factors are complex, the drug trade is worth about 1% of global GDP annually.
One percent of world GDP (which at the second quarter of this year was US$19.4 trillion) is about US$194 billion.
Shifting $194 billion in contraband requires a lot of armed security, as shown by the United Nations Office of Drugs and Crime (UNODC) Global Study on Firearms Trafficking 2020.
According to the Stockholm International Peace Research Institute (SIPRI), the illicit firearms trade is booming, and is estimated to be worth at least $95 billion, likely higher. That’s about $300 billion just in illegal arms trading and illicit drugs alone.
As for vice, in all there are 52 crime types which make up the transnational organised crime cohort, estimated to be about 3.6% of the entire global economy.
The Council for Foreign Relations report The Global Regime for Transnational Crime estimates the global cost of money laundering to be 2% of global GDP. That’s roughly $388 billion. Every. Single. Year.
Groundhog day
In February 2019, 13 years after the AML CTF Act was introduced, the final report from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry was tabled in federal parliament.
It laid bare the extent to which banks remain complicit: bribery, fraud, money laundering and child exploitation. Like FTRA and AML CTF before it, what the royal commission has taught the banks is just how much they can get away with.
So when Buzzfeed News broke the FINcen files story in September, no one should have been surprised it included The Australia Report targeting 57 individuals over several hundred pages of transactions.
The global leak revealed that five global banks — JPMorgan, HSBC, Standard Chartered Bank, Deutsche Bank and Bank of New York Mellon — moved dirty money for people and companies, and are tied to the wide-scale looting of public funds in Malaysia, Venezuela and the Ukraine.
The investigation by the International Consortium of Investigative Journalists found that these banks profited from powerful players, including Paul Manafort, a former campaign manager for US President Donald Trump.
Over a decade, JPMorgan processed more than US$50 million in payments for Manafort.
It is proof positive of what many of us had long since suspected: that the banks themselves have become the biggest cartel of all.
The difference is that, in banking, nobody goes to jail.