The Function of the Drug War by J. Orlin Grabbe
Wondering why President Bush ordered Reagan's papers kept still secret? The Unicorn Knows.
"The Pennsylvania State narcotics agents who are suing the federal government - and alleging a conspiracy theory involving defense attorneys, the CIA, the Justice Department, international drug dealers and the State Department - are not alone." [intro paragraph excerpted from second article below]
Now this matter is coming again to public attention in perhaps a nearly "OJ Simpson style" trial in Philadelphia of former "hippie guru" Ira Einhorn recently extradited from France to face upcoming re-trial allowed by the "Ira Einhorn Law" after his in-absentia conviction for the 1978 murder of Holly Maddux (of "The Unicorn Killer" hype TV docudrama's) for which he steadfastly maintains he was framed to shut him up. Could this issue be a factor since Einhorn brought CIA drug smuggling complicity info to attention of PA attorney general in early 1970's? http://groups.yahoo.com/group/ira-einhorn
http://www.citypaper.net/articles/111501/sl.slant.shtml
Philadelphia City Paper November 15-22, 2001
slant
by Catherine Austin Fitts
Ira Einhorn acquaintance Catherine Austin Fitts is a former managing director of Dillon Read & Co Inc., a former assistant secretary of housing in the first Bush administration, and the former president of The Hamilton Securities Group Inc. She is the president of Solari Inc., an investment advisory firm. http://www.solari.com
"The Latin American drug cartels have stretched their tentacles much deeper into our lives than most people believe. It's possible they are calling the shots at all levels of government."
-William Colby, former CIA director, 1995
The Solari Index is my way of estimating how well a place is doing. It is based upon the percentage of people in a place who believe that a child can leave his or her home, go to the nearest place to buy a popsicle and come home alone safely.
When I was a child growing up in the 1950s at 48th and Larchwood in West Philadelphia, the Solari Index was 100 percent. It was unthinkable that a child was not safe running up to the stores on Spruce Street for a popsicle and some pinball. The Dow Jones was about 500 and the Solari Index was 100 percent.
Today, the Dow Jones is over 9,000 and my favorite hairdresser in Philadelphia, Al at the Hair Hut in West Philadelphia, and I just agreed that the Solari Index is in the tank -both in the streets of Philadelphia and throughout America.
Life on the street isn't sweet any more. I watched the slide of the Solari Index as a child. A lot of it had to do with narcotics trafficking and the people that narco dollars put in power on our streets - and in City Hall, in the banks, in Congress and the corporations and investors that surround the city.
Once a month I drive to Philadelphia from my home in Hickory Valley, Tenn., to attend a board meeting. I stay in a lovely little apartment in the first floor of a rowhouse owned by my friend Georgie, not far from where I grew up in West Philadelphia.
Georgie is one of my favorite people in the world. One day, Forest, my dog, and I were up in Georgie's apartment to enjoy a fresh plate of scrapple that Georgie had fried up that morning. The conversation turned to narco dollars. Georgie said that looking at the big picture was simply too overwhelming. Couldn't I explain this in terms of a neighborhood in Philadelphia? So we got out a blank piece of paper and started to estimate.
We assumed that two or three teenagers on a Philadelphia street corner dealing drugs could theoretically do $300 a day of sales each and work 250 days a year. We guessed that their supplier got 50 percent, and maybe ran his net profits of $100,000 through a local fast-food restaurant that was owned by a publicly traded company. Assuming that company had a stock market value of 20-30 times its profits, a handful of teenagers could generate approximately $2 million to $3 million in stock market value for a major corporation, not to mention a nice flow of deposits and business for the Philadelphia banks and insurance companies.
OK, that is what a handful of kids can do. Let's look at all the organized crime profits, narcotics trafficking and everything else. If the Department of Justice is correct about $500 billion to $1 trillion of annual money laundering in the U.S., then about $20 billion to $40 billion is a reasonable estimate for what should move annually through the Philadelphia Federal Reserve district.
Assuming a 20-percent margin for organized-crime profits and a 20-times multiple on the stock of the companies being used to launder the money, the stock market value that could potentially be "addicted" to organized crime profits flowing through the Philadelphia area from $20 billion to $40 billion in narco- and organized-crime revenues could be as much as $160 billion. If you add all the things you could do with debt and other ways to increase the multiples, you could get that even higher, say $250 billion.
Imagine what would happen if all these teenagers in the Philadelphia area stopped taking and dealing drugs? Now do you understand what Philadelphia mothers and dads are up against when they try and make sure their children are safe?
Last summer, I made a presentation called "How the Money Works on Organized Crime" to a wonderful group of about 100 people at an annual conference for a spiritually focused foundation in Philadelphia. This is a group committed to contributing to the spiritual evolution of our culture.
After walking through the various profits generated by narcotics trafficking, financial fraud and other types of organized crime, as well as the intersection of this money with the stock market and campaign fundraising, for about an hour, I asked the group what would happen to the stock market if we decriminalized or legalized drugs?
The stock market would crash, they said.
What would happen to financing the government deficit if we enforced all money-laundering laws? Since most bank wire transfers are batched and run through the New York Federal Reserve Bank, this should not really be that hard, right?
Their taxes might go up. Worse yet, their government checks might stop, they said.
I then asked them to imagine a big, red button at the front of the lectern.
By the power of our imaginations, if they pushed that button they could decriminalize narcotics trafficking or whatever actions were necessary to stop organized crime and stop all money laundering in the United States.
Who would push the button?
It turns out that in an audience of approximately 100 people committed to spiritually evolve our society, only one person would push the button.
Upon reflection, 99 would not. I asked why. They said that if they pushed the button, their mutual funds would go down and their government checks might stop. I commented that what they were proposing is that an entire infrastructure of people continue to market narcotics to their children and grandchildren to ensure that their mutual and pension funds stay high in value.
They said, yes, that was right.
Which is why I say that America is not addicted to narcotics as much as it is addicted to narco dollars.
Can we face our addiction to narco dollars? Can we do it in a way that entrepreneurs like me can build successful businesses and transactions that profit from getting the Solari Index and the Dow Jones Index to go up together while getting debt to go down?
It's quite possible. Helping the Solari Index rise back to 100 percent is the biggest capital gains opportunity in the Philadelphia area, on real estate as well as what is possible from re-engineering government investment and pooling small-business equity in a manner that provides competitive access to the stock market. Generations of accumulated narco dollars could do very well investing successfully in such a capital gains opportunity.
The creation of a solari, a local knowledge manager/databank that publishes neighborhood financial statements and information and tracks the Solari Index in your place, can make it possible for your neighborhood to create pools of private equity that could channel capital to the profitable opportunities in your area. That is a lot of capital that local entrepreneurs can use to create jobs and to build their businesses - even start new ones.
It's time to face our addiction to narco dollars and to grapple with how to reverse our incentive systems. It is time to figure out how publicly traded companies and our banks and insurance companies can make more money from our kids succeeding than from them failing. Indeed, it can be done.
So here is my message on our addiction to narco dollars. Now that we have run the Solari Index down to near zero percent and increased our dependency on debt while fueling the rise of the Dow Jones about 20 times since I was a kid, the new opportunity is going to be the fortunes to be made on businesses and investment vehicles that fuel the Solari Index rising.
Wouldn't you pay for streets to be sweet for your child once again? Especially if it made you a whole bunch of money on an initial public offering of your neighborhood mutual or venture fund in the stock market?
My money is on Solari rising.
Catherine Austin Fitts is a former managing director of Dillon Read & Co Inc., a former assistant secretary of housing in the first Bush administration, and the former president of The Hamilton Securities Group Inc. She is the president of Solari Inc., an investment advisory firm. http://www.solari.com
If you would like to respond to this Slant or have one of your own (850 words), contact Howard Altman, City Paper interim editor, 123 Chestnut St., Phila., PA 19106 or e-mail altman@citypaper.net .
© Copyright 1995-2001 CP Communications. All rights reserved. Privacy policy
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http://citypaper.net/articles/072700/cs.cover.sidea.shtml
cover story
A Pattern Emerges
The Pennsylvania State narcotics agents who are suing the federal government - and alleging a conspiracy theory involving defense attorneys, the CIA, the Justice Department, international drug dealers and the State Department - are not alone.
There are more than 20 other federal agents and big city cops in other parts of the country who have raised similar allegations.
Former federal agent Joe Occhipinti is scheduled to testify before Congress, today, July 27, in favor of a bill that would create a new agency to investigate misconduct by the Justice Department. A House Judiciary subcommittee will hear testimony on legislation proposed by U.S. Rep. James Traficant Jr. (D-OH) to establish an independent federal agency to investigate allegations of wrongdoing on the part of Justice Department employees. Occhipinti supports the creation of a new federal agency to investigate and prosecute alleged misconduct, criminal activity, corruption and fraud by Justice Department personnel.
Rejected by the New York City Police Department because he was too short to meet their height requirements, Occhipinti joined the Customs Service and in just five years compiled the highest arrest record in the history of the Service. Along the way he bagged a wide range of bad guys from Mafioso to Colombian drug smugglers.
Occhipinti transferred to the Immigration and Naturalization Service. In his 16 years as an INS agent, he became the most highly decorated federal agent in U.S. history, earning 78 commendations and three Attorney General awards for valor and merit.
Occhipinti uncovered evidence that Dominican narco-dealers were buying up grocery stores, called "bodegas," in Washington Heights in order to facilitate drug trafficking and money laundering activities.
In August 1989, Occhipinti initiated "Operation Bodega" to conduct consensual searches - ones agreed to by the owners - of bodegas throughout the Washington Heights area. It was to be the most important investigation of his career.
He found that Dominican-organized crime groups, using bodegas as fronts, were operating an illegal lottery taking in more than $8 million a year. Occhipinti also uncovered evidence of loan sharking, drug dealing, money laundering, food stamp and coupon fraud, and the sale of counterfeit government documents, including INS forms, fake Puerto Rican birth certificates and phony bank letters of credit.
The Occhipinti investigation also uncovered ties between bodega owners with criminal records, members of The Federation of Dominican Businessmen and Industrialists, and a trading company in Greenwich, CT. Among the executives of the trading company was a manager with ties to a Cuban American long suspected by law enforcement officials of being a CIA agent. (Weak banking laws in Connecticut allow trading companies to make loans without a banking license and set interest rates that would be illegal elsewhere.)
By 1989 Project Bodega was a multi-agency task force involving the INS, DEA, U.S. Customs, the IRS and the Manhattan District Attorney's Office, which assigned three full-time prosecutors, including John F. Kennedy Jr., to prosecute the criminals arrested during this investigation.
Operation Bodega resulted in the arrest of 111 people - many of them illegal aliens - and led to the seizure of a large number of weapons, drugs, counterfeit government documents and illegal gambling material.
In March 1990, the leader of the Federation of Dominican Businessmen and Industrialists, Simon Diaz, and others organized a demonstration on the steps of City Hall and enlisted the aid of City Councilman Guilermo Linares. Mayor David Dinkins issued a statement calling Operation Bodega a "Republican-backed conspiracy" to intimidate law-abiding immigrants in the Dominican community and to discourage them from participating in the census, which would lead to loss of federal funding and congressional representation for the city.
Under political pressure, the INS shut down Project Bodega and in 1991 the U.S. Attorney began investigating Occhipinti for allegedly violating the civil rights of some of the alleged drug dealers and bodega operators. Prosecutors produced 12 witnesses who claimed Occhipinti had conducted illegal searches of their establishments. Some witnesses admitted that they gave him permission to search but claimed Occhipinti did not have them sign the INS "consent to search" form until after the search had been conducted. Up until that time Occhipinti had conducted more than 1,000 consensual searches without a single similar complaint.
Occhipinti was the first U.S. law enforcement official in history to be indicted on a criminal charge for an alleged improper search.
Despite a public outcry and evidence which suggested Occhipinti was innocent of the charges, he was found guilty and sentenced to 32 months in jail. He was sent to a maximum-security prison in Oklahoma and placed in general prison population - surrounded by hundreds of convicted drug criminals. Occhipinti's cellmate was a Dominican drug dealer from Washington Heights who immediately recognized Occhipinti.
Less than six months after Occhipinti went to prison, on Jan. 15, 1993, President George Bush commuted Joe Occhipinti's sentence.
Eight men and women of different racial and ethnic backgrounds - black, white and Hispanic - were members of a Philadelphia police narcotics unit known as Gallo's Squad. The unit was named for its gung-ho lieutenant, John Gallo, and known as the squad with the highest arrest and conviction rates in the city.
Lt. John Gallo had retired but his old squad was arresting up to 30 Dominican dope dealers a week. And then in May, 1998, these eight cops fighting the drug war were yanked off the street. A supervisor told them there was a death threat against the unit. But the cops were puzzled that no patrol cars were posted to guard their families and their homes. More questions from the unit brought evasive answers from their supervisors.
Eventually the squad members learned there had never been a death threat; the whole thing apparently was a ruse to get them off the street and away from their investigations into Dominican narco-dealers.
The cops soon learned why they had been banished to desk jobs. The U.S. Attorney's Office had informed the Police Department that it would no longer prosecute cases made by Gallo's Squad.
Over the next two years, some squad members either retired or reluctntly accepted new assignments. But four filed a grievance with the Fraternal Order of Police against the city. Ken Rocks, Philadelphia FOP vice president, says that at an arbitration hearing in March no credible evidence was offered against the Gallo's Squad cops. And he expects a favorable ruling. "All four should be returned to the narcotics unit," Rocks said. "They're all good, dedicated cops. It's a disgrace what happened to them. The U.S.
Attorney and the Police Commissioner should hang their heads in shame."
Mike Levine worked for the U.S. Drug Enforcement Administration for 25 years. The tough-talking DEA supervisor/inspector was considered a superstar in the agency. Fluent in Spanish, Levine held a number of high ranking-positions, including: inspector of the Drug Enforcement Agency field operations worldwide; desk officer, Cocaine and Heroin Desk, DEA headquarters; DEA Miami airport supervisor, Vice President George Bush's South Florida Task Force; DEA Country Attaché in Argentina and Uruguay and the senior law enforcement officer and Special Operations Officer for South America.
Since his retirement from the DEA Levine has worked as a regular instructor of Undercover Tactics and Informant Handling for the Royal Canadian Mounted Police and the Ontario Provincial Police Academy. He is a guest lecturer for the FBI's Advanced Undercover Seminar, a regular lecturer at the New York State Police Academy and a licensed New York State Police Instructor.
Levine, one tough cop, is also one tough critic of his own government's war on drugs. He has leveled charges that certain branches of the American government committed what amounts to treason in the drug war. In his book, Deep Cover - a New York Times bestseller - Levine claims that an undercover operation investigating a drug cartel's shipment of 15 tons of cocaine had been targeted by agents of the DEA, the CIA and the State Department. Levine says the undercover operation was deliberately exposed by the Justice and State Departments to spare an important American ally in Latin America.
The Big White Lie, Mike Levine's second book, details events that occurred when he was the DEA attaché in Argentina and Uruguay from 1978 to 1992. Levine's exposé documents how the CIA and State Department allegedly destroyed a DEA undercover investigation and supported the takeover of Bolivia by Bolivian military men and politicians who were backed by cocaine traffickers.
Mike Levine will be an expert witness for the BNI agents when their case comes to trial.
In the late 1980s and early '90s, the 34th precinct was known as the murder capital of New York City. A majority of the homicides and other major crimes were committed by Dominican criminals in the Washington Heights area of Manhattan - home to hundreds of thousands of Dominican immigrants. Community activists asked the NYPD for help and they responded by forming an elite anti-crime unit of nine plainclothes officers, drawn from the 34th Precinct. In its first three years the unit arrested more than 700 people and was involved in half a dozen shootouts with violent drug dealers.
A number of Dominicans alleged to be drug dealers and their defense attorneys began to lodge numerous complaints of improper searches against the unit. The U.S. Attorney began an investigation of the anti-crime unit. The squad was disbanded. A two-year investigation by the NYPD Internal Affairs Bureau and the U.S. Attorney's Office for the Southern District of New York yielded not a single indictment.
The U.S. Attorney failed to prove that there had been any illegal searches, so they expanded their probe. Federal prosecutors cut a deal with a Dominican drug dealer who had been convicted of dealing more than 200 kilos of cocaine and 200 kilos of heroin. The dealer was an occasional informant for the anti-crime squad. The informant had several telephone conversations with Officer Patrick Regan, a highly decorated police officer with almost 10 years' experience on the street. Regan had received numerous commendations, including the NYPD Combat Cross for "heroism at risk of life" after receiving a gunshot wound to the head while making an arrest. (Regan never drew his own gun but instead disarmed the shooter and arrested him.)
Regan was called to testify before a grand jury and was asked about the details of government-contrived conversations with the drug dealer/informant.
Regan could not recall the details of the conversation and was charged with perjury. Regan was found guilty of perjury and sentenced to a year and a day in prison. (Regan has a motion for a new trial based on new evidence he says will clear his name.)
DEA agent Rick Horn, now stationed in New Orleans, is suing the CIA, the National Security Agency and the State Department. Horn claims that when he was a DEA attaché in Burma (now known as Myanmar), the Central Intelligence Agency spied on his operations and undermined DEA efforts to combat international drug traffickers.
Horn found a CIA electronic surveillance device inside his home. When his lawyer filed suit several years ago, the Federal government classified all of the paperwork and forced his lawyer, a former assistant U.S. Attorney, to get a security clearance before he could advance the lawsuit. To this day, the lawsuit remains classified.
-Jim Barry
end
for more info/documentation/stories on above thesis see:
http://www.copvcia.com [research excerpted in article above]
by J. Orlin Grabbe
The function of the Drug War is to create the Drug Crisis. The Drug Crisis involves billions of dollars of hidden cash flow. Addicted to this flow of money are law enforcement agencies, drug producers and distributors, covert agencies who use it as a source of black funding, and politicians and bankers who are hired to protect the drug revenues. Addiction to drug revenues requires that the drug war be fought so as to be lost. Failure thus becomes the criterion of success.
Many state agencies, and federal agencies such as US Customs, the Drug Enforcement Administration, the Department of Justice, and the U.S. Treasury, reward themselves for fighting the Drug War by claiming a portion of the loot seized—helping themselves to cash, bank deposits, securities, boats, automobiles, houses, land, on-going businesses, as well as the readily-marketable drugs themselves. The Drug Warriors' financial focus ("follow the money") requires them to devote their energy in the direction it will be most rewarded—to look for juicy targets flush with success. Such juicy targets consist of those who have created flourishing drug enterprises in the midst of the Drug War. These successful drug enterprises make up the necessary list of worthwhile targets leading to successful busts. Big drug busts involving heretofore lucrative drug businesses are announced in a blaze of publicity—emphasizing the amount of money and drugs seized, and people arrested. Only the failure of the Drug War and the continuing success of drug enterprises can sustain the continuing stream of assets ripe for seizure (off-budget funding) and the beneficial media publicity, such as lurid TV footage of stacks of plastic-wrapped money and cocaine. Thus the failure of the Drug War becomes the measure of the Drug Warriors' success, and the ineffectiveness of the Drug Warriors becomes the continuing justification for their existence. The Drug Warriors are ever justified by the continuing Drug Crisis and the richness of the Drug Warriors' targets. Hence the Drug Warriors must fight the Drug War ever harder in order to ensure that it will be successfully lost.
Producers and distributors of illegal drugs require the Drug War in order to eliminate competition and maintain profit margins. Without the Drug War, a slew of small farmers would take over the growth of marijuana crops and would eventually drive pot prices down to the marginal cost of production. The giant methamphetamine kitchens in Mexico require the Drug-War-inspired monitoring of chemicals to prevent competition from the once pervasive amateur labs in American homes. Cocaine producers and distributors require enforcer watchdogs such as the Drug Enforcement Administration to keep out new lower- cost entrants to the market. General Manuel Noriega received an award from the DEA for his cooperation in the Drug War. Noriega served the Medellin cartel and kept out Cali competitors by turning them in to the DEA. The DEA was happy, Noriega was happy, and the Medellin cartel was happy. By cooperatively fighting the Drug War, the Drug Warriors and Drug Suppliers ensured the continuing flow of money and drugs through Panama. But whenever competition increases, the Drug War must be fought ever more vigilantly to ensure the continuing success of its failure. Only if competition is controlled can the market price of illicit drugs be kept well above their marginal cost of production, thus ensuring the massive profits upon which Drug Suppliers and Drug Warriors depend.
Covert agencies are increasingly tasked with supplying intelligence on the illegal drug trade, such as in the US where drugs have been designated a national security problem. The best vantage point from which to gather intelligence on the illegal drug market is to be in the illegal drug business. Thus covert agencies must deal drugs in order to assist the War on Drugs. Moreover, being covert requires covert monies for financing, and the most obvious source of "black market" funding is drug money. Drug money is obtained by supplying services to the drug trade. Here in Costa Rica the CIA provides air transport to "the brothers" who run a lucrative trade in illicit substances. In other locations other agencies are similarly involved. The NSA, through the NPO (National Programs Office), provided secure storage for cocaine in its network of secure warehouses across the US. In another country, the DIA operates a drug manufacturing facility. Similar statements can be made about the British, French, and Israeli intelligence services. The Drug War provides black market funding for the covert agencies, and justifies the need for them to provide intelligence to fight the Drug War. The Drug War must be fought harder to ensure the requisite funds and intelligence to fight the Drug War.
The Drug War provides a political rationale for the continuing production and sale of military equipment and consulting services in the absence of obvious enemies. Just recently the US sold Guatemala a sophisticated electronic fence to protect its border. Similar sales have been made to other countries. References to drug traffickers and smugglers form as much a part of the political justification for these expenditures as do references to the threat of invasion. In the case of Guatemala, what the US did not tell the local military was that it is now a matter of US national security policy to only install fences with holes in them. The electronic holes are intended to ensure that US bombers can reach their destinations unimpeded by surveillance. When someone informed the Guatemalan military of this fact, they angrily demanded of the US to know if this were true. Yes, there are holes, the US admitted; but the US also claimed that no one would be able to find them, because of the ultra-sophisticated top secret technology involved. It was a lie. A consultant showed the Guatemalans the location of the holes using only a few hundred dollars of off-the-shelf electronic equipment. There were 12 holes, each roughly a quarter mile wide, providing an air corridor open from the ground to the heavens. The location of such holes is usually sold to drug couriers in a matter of a few weeks. Thus the drugs continue to flow through the fences unimpeded, helpfully keeping alive the original rationale for military involvement in the Drug War. (In the case of Guatemala, the same drugs might show up at the Guatemalan airport, where security is provided by Wackenhut. Wackenhut is a private security firm supplying security services to top- secret US military and nuclear facilities. In some of these facilities, computer hard drives containing nuclear secrets may appear and disappear behind copying machines much like drug planes may appear and disappear on either side of electronic fences with well- designed security holes.)
Drug propaganda supplies an essential ingredient in the Drug War. We see an endless parade of TV shows in which photogenic actors and actresses protect the young and innocent from the big bad drug dealers, along with just-say-no campaigns of mindless emotionalism. A cigarette looks silly in your ear; it looks sillier in your mouth. Don't think, just be embarrassed and believe. Here are pictures of crack babies; aren't they revolting? The cooperation of the news media in government propaganda creates a pervasive background of Pavlovian conditioning which can be stirred up to a hysterical boil whenever the Drug War is threatened, or when it needs to be reinvigorated. The public will then "demand something be done", and the hired politicians will smoothly respond with the needed legislation.
Take George W. Bush and Al Gore, for example. Whichever man is elected, he will call for a new effort to sustain the Drug War's vigor, whether it be called "Reinventing the Drug War" or the "Drug War with Compassion", or something entirely different. Because, like other hired politicians, the new President will know the Drug War must be fought harder to keep the money and drugs flowing, and everyone happy. Only in failure will there be success.
Reproduced gratefully from: http://www.orlingrabbe.org/drugwar.htm
