Follow the money

Ronald Buchanan, in this morning’s The (Mexico City) News is shocked, shocked I say:

A counter-intelligence operation has led to the arrest of several very senior police officers who are alleged to have been receiving huge payoffs from the drug gangs. The operation was launched several months after what security sources say was a lucky break. A suspect told Mexican and U.S. officials how he had penetrated the upper reaches of Mexico´s criminal justice system and the law enforcement agencies in the U.S. Embassy in Mexico City.

Since then, the operation – almost certainly with U.S. help – has followed one lead after another, and there is no saying when the arrests will end.

The revelations are appalling. Senior officers at the level of heads of intelligence units were receiving as much as $450,000 a month from the drug gangs.

While no one is particularly surprised (except maybe Buchanan) that police officials can be bought, and what you hear in the way of controlling the narcotics trade either focus on production (the narocotics) or labor issues (the hitmen and their targets). What I don’t see, and what you’d see in any discussion of an industry this large, is their financing and executive compensation.

If the cartels can afford to pay a single consultant 450.000 US Dollars a month (5.4 million per year), we are talking about companies the size of Lehman Brothers or General Motors. That much money cannot be stuffed into mattresses or frittered away on ranches and Humvees. Gangsters, no matter how ostentatious their lifestyle, cannot spend that kind of money.

Where is it, and where is it invested? Although the narcotics industry creates a huge secondary industry — the prison-industrial complex if you like — this money is either “lost” somewhere in the economy, or it’s been invested somewhere. How much of the U.S. bank bailouts, and bailouts of the economy everywhere else is funded by the narcotics trade?

Latin Americans already die to prop up the U.S. lifestyle, usually in unglamourous ways like mining accidents, poor health from putting up with toxic waste exports, and environmental degradation caused by monoculture to support foreign consumption. They can’t be expected to put up with being shot or beheaded to support non-essentials like narcotics.

I don’t think any government (especially in the United States, which may be spending more to prop up the narcotics industry than it is on propping up the banks) wants to know where the money is, but it’s obviously being managed somewhere. “The law in its majesty,” Anatole France wrote, “punishes alike the rich and the poor for sleeping under bridges.” Until the law starts treating the rich — the financial investors and launderers — like the poor — the hitmen and couriers and users — and maybe letting a few heads roll down Wall Street, the narcotics trade is going to continue.