Dangerous tentacles of drug money

Drug trafficking results in corruption, money laundering and criminalisation of the political and legal institutions

Dangerous tentacles of drug money

Pakistan is a destination and transshipment point for diverted shipments of acetic anhydride and other precursor chemicals used in the production of heroin and amphetamine-type stimulants -- International Narcotics Control Strategy Report (INCSR) 2018.

Drug traffickers remit millions of rupees every year from bank accounts maintained in various countries in fictitious names. This money in the hands of drug traffickers has made them invincible, besides making life harder and harder for those who earn from legitimate sources. According to James Petras, Professor of Sociology, Binghamton University, New York, there is a consensus among the US congressional investigators, former bankers and international banking experts that the US and the European banks launder between $500 billion and $1 trillion of dirty money each year, half of which is laundered by the US banks alone.

At the political level, the threat from drugs is even more serious. In Afghanistan the US and Nato forces have claimed fighting a war to eradicate opium but shockingly the production has increased manifold as reconfirmed in International Narcotics Control Strategy Report (INCSR) 2018.

In Pakistan, there have been many instances when drug barons managed to become members of the Provincial and National Assemblies. Drug money has played an important role in no-confidence motions, in securing support to passage of important bills--especially during 1990-1995, when neither the government of Nawaz Sharif nor that of Benazir Bhutto had a clear majority. The evidence of politicians involved in drug trade was documented in the International Narcotics Control Strategy Report, released by the US State Department in 1999, as under:

"The prosecution of prominent drug offenders Sakhi Dost, Jan Notezai, and Munawar Hussain Manj continued to drag out in the courts. Manj is an ex-member of Pakistan’s National Assembly. He was arrested on drug charges in April 1995. His case is being tried in the court of the additional session judge in Lahore. The accused applied for bail, which was rejected by the Supreme Court. Defense attorneys were successful in delaying court proceedings. Notezai is a member of a politically and economically prominent family in Baluchistan. His case has been pending in the courts since 1993. In 1998, Notezai’s appeal to the Supreme Court for a new trial was rejected, which cleared the way for a lower court in Quetta to conclude the trial. Earlier the Baluchistan High Court rejected the same appeal. The decision by the Supreme Court prompted Notezai to appeal to the Federal Shariat (Moslem Law) Court for a "de novo" trial, a request that was denied on July 2, 1999. Meanwhile, on establishment of a district court at Nushki the case has been transferred to a sessions judge there and further delayed."

By 2006, Pakistan had 4.5 million drug addicts and the number by June 15, 2018 has reached nearly 9.5 million. Drug dealers and addicts are also involved in smuggling and prostitution. Drug trafficking has resulted in "organised crime" which is different from the normal criminal activities, as it involves corruption, money laundering and criminalisation of the political and legal institutions. Drug money in Pakistan is used to bribe the entire administrative, political and legal institutions, from the local police to the magistrates.

In the international drug market, the share of Pakistani mafia is around US$ 10-15 billion. According to estimates US$1.5 to 2 trillion of international criminal proceeds are moved internationally and deposited into bank accounts annually. It is estimated that half of that money goes to the United States. The champions of "democracy" and "freedom" do not mind absorption of such dirty money at home, but impose restrictions on others to stop all kinds of money laundering operations.

A former private banker, Antonio Geraldi, in a testimony before the Senate sub-committee projected significant growth in the US bank laundering. "The forecasters also predict the amounts laundered in trillions of dollars and growing disproportionately to legitimate funds." The $500 billion of criminal and dirty money flowing into and through the major US banks far exceeds the net revenues of all the IT companies in the US, not to speak of their profits. Another testimony by John Reed is an eye-opener:

John Reed, Chairman and co-CEO of Citigroup in his testimony before the Senate said: "I am John Reed, Chairman and Co-Chief Executive Officer of Citigroup. I appear today with Todd Thomson, who became the head of our Private Bank about ten days ago, and Mark Musi, the head of the Private Bank’s Compliance and Control Department. Unfortunately, Shaukat Aziz, who ran the Private Bank for the last two years and under whose leadership many of the improvements in our Private Bank’s anti-money laundering programs took place, cannot participate in these hearings. Mr. Aziz would really have been the most appropriate witness today, given his experience and knowledge but as you know, he was called home to serve his country, Pakistan, as Minister of Finance. He left the Bank on October 29. He asked me to submit his statement for the record, and it is attached to my own all financial institutions ……… whether banks, securities firms, or other types of financial intermediaries are potentially vulnerable to money laundering. Private banks are just one subset of the potentially vulnerable institutions. Our Private Bank, for example, is a very small part of Citigroup, accounting for about 2.5% of Citigroup’s business. Private banks in general are no more and no less vulnerable to abuse by the unscrupulous and the dishonest than the much larger parts of most financial institutions".

Today, all the big US banks have multiple correspondent relationships throughout the world so that they may engage in international financial transactions for themselves and their clients in places where they do not have a physical presence. Many of the largest US and European banks located in the financial centres of the world serve as correspondents for thousands of other banks. Most of the offshore banks laundering billions for criminal clients have accounts in the United States. The disclosures in Panama Papers testify to this fact. All the big banks specialising in international fund transfer are called money centre banks, some of the biggest process up to $1 trillion in wire transfers a day.

For the billionaire criminals an important feature of correspondent relationships is that they provide access to international transfer systems -- that facilitate the rapid transfer of funds across international boundaries and within countries. The most recent estimates are that 60 offshore jurisdictions around the world licensed about 4,000 offshore banks that control approximately $35 trillion in assets.

This is the situation on ground whereas we daily observe the official quarters in USA and elsewhere making big claims about stringent measure against money laundering and financing of terrorism. This is all eyewash! In reality all the financial institutions and State structures are subservient to these billionaires, the ruthless drug barons, who know how to move money from one part of the world to another, buy government functionaries, control politicians, law enforcement officials and get the profits they want from the drug trade -- a deal of death for many innocent people around the world.


The writers, lawyers and authors, have studied linkages between drug trade and terrorist financing and social effects of drug abuse. They are author of many articles on these issues and authors of two books on the subject, Pakistan: From Hash to Heroin and its sequel Pakistan: Drug-trap to


Dangerous tentacles of drug money