This is your brain; this is your brain on drugs...

Still there? Any questions? Huh?


In 1969, Wall Street and Mad Ave got married – again – to put over a new chapter in an old, old American story.

A group of highly placed ad executives got together with their employers and funded the Partnership for a Drug-Free America with $300,000 in seed money. The government had just enacted a new battery of tough federal law against narcotics and dangerous drugs. Marijuana headed the list as a Schedule One Narcotic, right up there with heroin, meth, and cocaine.

It was time to go to work in the heady atmosphere of the new prohibition.


Without a doubt, there had been oodles of preconditioning.

The media had spent the better part of the late 50's to mid-60's propagating the glamor and sparkle of the drug-fueled lifestyle, peddling the false panache of everything from marijuana to the extremely harsh disorientation tactical drug LSD in the pages of magazines, on television, in popular songs, and in the movies.

The ad agencies brought the techniques of the marketplace to the problem through focus groups, market and demographic research, longitudinal studies, and selective spots in order to “change the behavior by changing atitudes.”

Gina Marston of the Ted Bates Agency set up an agency with all the trappings of any other on the 18^th floor of the Chrysler Building, complete with research, art, copywriting, traffic and production departments. With a bequest from the Johnson Pharmaceuticals fortune, and a transplant of that multinational's recently retired CEO, they were in business.

They started writing and producing ads to fit a certain marketing strategy. The coup of the decade, it's a legend on Mad Ave.

Today, more than a million people are serving time for drug offenses.

But that's just part of the story. It goes like this. Here is what it looks like and what it sounds like when a narcotics cop confronts the Director of the CIA in a high school in South Central Los Angeles about the agency's connections to crack cocaine and how it got on the streets of LA.

Mr. Ruppert was quick to follow up on revelations of a CIA-Contra War connection in the importation of crack cocaine into the ghettos of America, first broken in the pages of the "San Jose Mercury-News."(click here for a rundown on the story's publishing history)


“There's an old maxim – the best time to rob a bank is in the middle of a war,” said a Vietnam veteran, a banker who went rogue and washed, dried, folded and packaged billions upon billions of narco-dollars in legitimate businesses worldwide – until an associate got caught and gave him up, he went to prison and got recruited there.

Today, he works as a consultant helping international banking compliance officers – those who will listen, or are even interested – catch money launderers in the act so they can reject their ill-gotten gains.

It's a problem so big that such august organizations as the Senate Committee on Homeland Security focuses its investigative efforts on money laundering.

For instance, on Tuesday, London-based HSBC, a multinational conglomerate with its tentacles in hundreds of countries throughoutthe world, endured the humiliation of being caught out in a detailed 400-some-odd page report released on Capitol Hill.

A high-ranking executive publicly apologized and the head of group compliance, David Bagley, resigned in the course of the hearing, admitting he had funneled about $15 billion into the bank in bulk cash transactions from drug cartels during the years 2006-09 alone. He's been in that slot since 2002.

The British press was all a'twitter about the fact that Mr. Bagley had no real control, that the heads of – let's say – HSBC's Mexican branch was actually in charge, a raj of a little fiefdom, etc. Didn't help Mr. Bagley in any way. He was publicly sacked in any case.

Most savvy players see international drug peddling, manufacturing, smuggling, cultivation – the whole sordid lot – as nothing more than another opportunity for Wall Street to get its innings in – what else – laundering the proceeds.

This is the kind of banking where you pay the bank to put your money in an account, and not the other way around.

Wall Street banks are just big dry cleaners and launderers that wash, press, fold and package dirty money, ship it to safe places on the globe, and make it presentable to the tax man.

There are three steps, according to the expert. Here's how it works.

First, there is the placement of the cash proceeds from, let's say, sales of Afghani heroin in American ghettos, or, even better, crack cocaine or marijuana, crystal meth in working man's neighborhoods, or pain pills in impoverished rural pockets of Appalachia or the drought-ridden southwest.

The cash is merely smuggled in ways similar to the methods used to get the dope into the U.S. It goes to tax haven countries in shipping containers, the holds of freighters, airplanes, or speed boats to places like the Bahamas, the Caymans, Lichtenstein or Switzerland.

Secondly, there is an intermediate step designed to throw off the hounds, an electronic transfer to Taiwan or Hong Kong. That step is called “layering” because it breaks up and splinters, shatters and mixes the direct flow of the cash proceeds from the drug lords to the bankers who will ultimately invest in legitimate enterprises.

The third and final step is to set up some kind of bogus financial company which lends the money to an even phonier real estate or construction company to buy or build hotels, condos, shopping malls, homes, farm land, or commercial real estate.

There are refinements, some more vicious than others.

For instance, there is the practice of generating mortgage debt-backed securities – derivatives - trading them, then buying high cost insurance against the possibility that the worthless paper that is based on inflated, underwater prices of financed housing that is worth a fraction of the stated appraised worth, will ultimately fail.

Once the foreclosures go through, the crooked bankers buy up the vacant housing for as little as 20 to 40 cents on the dollar, then refinance it at inflated prices and let other suckers have a go at mortgages they know will fail.

Who benefits? No need asking that question.

Who pays?

The taxpayers. It's called the Troubled Assets Relief Program, and it cost the U.S. Treasury $250 billion to buy “senior preferred shares.”


Both the City of Los Angeles and the U.S. Department of Justice have sued Deutsche Bank and U.S. Bank for fraudulent practices in attempting to take advantage of government programs that insure mortgage-backed debt.(click here for an American Bar Association analysis of the suits)

It's not a war on drugs; it's a war of drugs – pure and simple – because of the generation of huge cash flow.

Forinstance, according to Rodney Stich in his Book “Drugging America:A Trojan Horse,” in the early 90's, the Texas National Guard wasgiven a role in drug interdiction along the border. Mr. Stich relateshow a seasoned investigator for the Grimes County District Attorney'soffice named George McCullough and a security specialist at the TexasGuard's headquarters in Austin at Camp Mabry uncovered some knottyproblems with using the Guard for that particular duty.(click here to read an excerpt)

The problem was simple enough, certain officers in Brownsville had relatives in Matamoros who were highly placed in the Gulf Cartel. The result was even simpler; with access to classified databases that contained all kinds of information on convicted criminals on both sides of the border, the crooked officers were able to ease the drug shipments on through at a higher and more secure rate than ever.

Meanwhile, thousands of M-16's, millions of rounds of .223 Remington, and thousands of fragmentation grenades began to disappear from Guard armories statewide.

The investigators' complaints fell on deaf ears from the Governor's office to the crime bureaus of the federal government. It looks like Wall Street bankers have a high priority pull to get more and more illicit drug funds into the American underworld and the coffers of crooked bankers, where the money has its supreme use – to multiply at exponential rates while the Treasury devalues the American dollar and lowers the standard of living of the average American dude or dudette to the point where that government ad agency called “The Partnership for a Drug Free America” peddles them more glitz, glamour and glory through their lame schtick on the boob tube.

Such a deal.

- The Legendary