Nexus - 0304 - New Times Magazine-pages

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A quarter of the massive funds circulating the globe each year are the illicit proceeds of gun-running, drug-trafficking and money- laundering operations. ver since the Nugan Hand Bank affair of the late 1970s, bank crashes have fol- lowed a slick and familiar template. Narcotics trafficking, gun running, CIA covert ops, money laundering and fraud on a massive scale are just some of the ingredients that have sent bank after bank crashing to its knees. Once the smoke clears, bank depositors and shareholders are left picking up the tab. With a spate of billion-dollar financial scandals hitting the headlines, 1995 wasn't such a good year for harassed bank regulators and shareholders. Calls for tougher regulation of the burgeoning financial markets in the wake of the Daiwa, Barings and other debacles are little more than PR palliatives designed to calm the nerves of a cynical public who still form the hard backbone of bank depositors. With the best will in the world, regulators can't keep pace with an evolving and sophisticated money machine that daily shuffles upwards of 24 billion E-bucks around the globe in the blink of an eye.' Yet tough regulation, even when emplaced, is easily and regularly evaded. Banking and crime are Cimmerian handmaidens for the simple reason that banks are where the money is. Having access to the money and being ‘connected’ is the name of the game where the stakes are other people's money. This is the dark side of the financial commu- nity, a hidden face that largely goes unreported—auntil, that is, a major banking scandal hits the front pages. Squirming under the glare of public attention, successive bank dis- closures have revealed the sinister connections that leading banks have with organised crime and the intelligence community. The money-shufflers of 'Spooksville’ need ‘black funds’ to finance covert operations and appear happy to exchange guns and military hard- ware for dope that is, in turn, peddled for dollars used to finance other black operations. This happy-go-lucky ‘Ferris wheel’ approach to money-raising on the part of the intelli- gence community reveals a Jong history of entanglements with the Mafia. Organised crime syndicates are now the single largest business sector on the planet and are set to grow. They just love banking. Having accumulated a staggering US$820 bil- lion from investment interest over the last decade, the Mafia is now estimated to eam US$250 billion a ycar from its legitimate investments.’ Dozens of nations who maintain strict bank secrecy laws are, de facto, providing full banking services to these mandarins of dirty money. A large number of banks are actually owned by Mafia syndicates.’ Some of the largest and most respectable appear content to turn a blind eye and earn massive commissions from laundering dirty money.‘ The prudent image of bankers is just that: an image. Banking survives purely on depositor confidence, making it the biggest ongoing “confidence trick"’ the world has ever witnessed. That confidence has been dented by one scandal following on the heels of another. THE CIA'S HEROIN CONNECTION One of the earliest scandals was the Nugan Hand Bank affair. Michael Hand, an ex- CIA operative from the Bronx, joined up in 1973 with Frank Nugan, an Australian play- boy and inheritor of a Mafia fortune, and incorporated the Nugan Hand Bank. The bank sported an interesting and exclusive board of directors. President of the bank was (Retired) Rear Admiral Earl Yates, former chief of the US Navy's strategic planning. Legal counsel was the CIA's William Colby, and Walter McDonald, former deputy direc- tor of the spook agency, was listed as a consultant. An in-house commodity trader on the bank's payroll was also a leading heroin importer, while Richard Secord, later to be impli- cated in the Iran-Contra affair, was said to have a business connection. Seven years later, the bank collapsed following the discovery of Frank Nugan's body slumped in his Mercedes. Clutching a gun in one hand and sporting a hole through the by David G. Guyatt ©1996 5 Mucking Hall Cottages Mucking Hall Road Barling Magna, Essex SS3 ON) England, UK Phone/Fax +44 (0)1702 21 7523 JUNE-JULY 1996 NEXUS ¢ 21