The Blinds Spots of the Administration’s New Transnational Organized Crime Program

John Brennan, Eric Holder, Janet Napolitano, and some other Administration bigwigs just rolled out the Administration’s new Strategy to Combat Transnational Organized Crime (TOC). Here’s how they define TOC:

Transnational organized crime refers to those self-perpetuating associations of individuals who operate transnationally for the purpose of obtaining power, influence, monetary and/or commercial gains, wholly or in part by illegal means, while protecting their activities through a pattern of corruption and/or violence, or while protecting their illegal activities through a transnational organizational structure and the exploitation of transnational commerce or communication mechanisms. There is no single structure under which transnational organized criminals operate; they vary from hierarchies to clans, networks, and cells, and may evolve to other structures. The crimes they commit also vary. Transnational organized criminals act conspiratorially in their criminal activities and possess certain characteristics which may include, but are not limited to:

It all sounds like they could be talking about Goldman Sachs or News Corp. But the specific crimes they mentioned are:

  • Drug trafficking
  • Human trafficking
  • Russian, Italian, Japanese mafia (in addition to Mexican drug cartels)
  • Counterfeiting

In other words, this initiative will look at very serious TOCs. But they won’t look at the TOCs that have done the most damage to the US in the last several years: the banksters that, through fraud, intimidation, and political influence managed to loot and then crash the economy. The same banksters that are now–frankly with DOJ enabling them–using their corporate structures to avoid any accountability for having crashed the economy.

That’s a problem. Because imagine what we could do to the banksters if we used any of the several following tools against them:

A new Executive Order will establish a sanctions program to block the property of and prohibit transactions
with significant transnational criminal networks that threaten national security, foreign policy, or economic interests.
A proposed legislative package will enhance the authorities available to investigate, interdict, and prosecute the activities of top transnational criminal networks.
A new Presidential Proclamation under the Immigration and Nationality Act (INA) will deny entry to transnational criminal aliens and others who have been targeted for financial sanctions.
A new rewards program will replicate the success of narcotics rewards programs in obtaining information
that leads to the arrest and conviction of the leaders of transnational criminal organizations that pose the greatest threats to national security.
An interagency Threat Mitigation Working Group will identify those TOC networks that present a sufficiently
high national security risk and will ensure the coordination of all elements of national power to combat them.

We could freeze Goldman and its executives from using their ill-gotten goods. We could recruit new whistleblowers, rather than jailing them. We could throw “all elements of national power” to combat Goldman.

Instead, we’ve been funneling trillions to them.

Now I don’t mean to be glib with this observation. The Administration is about to roll out a law enforcement regime that applies terrorist-like authorities to combat the TOCs it believes are illegitimate. While I haven’t seen the bill the Administration is proposing, it seems that the taint of illegality in one part of the TOC will qualify that TOC for such terrorist-like treatment across the network.

Except if you’re a bankster. Because if you’re a bankster, the government will use all its resources to ignore or settle the crimes that lay at the heart of your TOC, just so it doesn’t have to face the illegitimacy of the TOC as a whole.

But I guess that’s what the Administration expects to drive our economy.

22 replies
  1. emptywheel says:

    Incidentally, of the mafia organizations listed, the Admin folks included the Yakuza. I mean, we weren’t going to get cooperation from, say, Putin, to take down the Russian mafia. But the Japanese are going to be an even more serious issue, not least because the Yakuza proved to be better at rescue ops after the earthquake (as increasingly is the case–if only Goldman would rescue us!)

  2. joberly says:

    EW–Interesting idea. Perhaps that famous Goldman internal email “one shitty deal” needs to be modified to “one shitty transnational deal.” The background is that last week Judge Jones in US District Court (SD-NY)dismissed the lawsuit of the hedge fund based on Grand Cayman Island v. Goldman because the plaintiff could not show the alleged fraud was a “domestic” matter properly before a US court. The Bahamas hedge fund, called “Basis Yield Alpha” had bought $80 million or so of a Goldman CDO called “Timberwolf” which the firm knowingly marketed as “one shitty deal.” In light of Judge Jones’s ruling, it looks like it was one shitty transnational deal.

  3. emptywheel says:


    Superb point. (For those who didn’t read about it, here’s one link.)

    I guess it makes it a lot easier to not call Goldman a TOC if you make trying their crimes impossible.

    Wells Fargo, though, clearly fits the definition, between Wachovia’s money laundering and the fraud they just settled with the SEC on.

    There is no way Wells Fargo is not a TOC. BUt we’re not going to be freezing their assets anytime soon.

  4. EH says:

    The thing is that many multinational corporations are more powerful than any one government, especially the US Gov’t.

  5. klynn says:

    I have not read the report yet.

    Are those the only specific TOCs named? No other organized crime groups?

  6. bmaz says:

    Hello to drones and AfPak like war on the border and into the sovereign nation of Mexico. All in the name of security….

  7. emptywheel says:


    The strategy itself doesn’t name any groups by name.

    One of the people who spoke though–forget who it was (not Holder, Brennan, or Napolitano) did name some names, which is where I got the list of mafias from. And of the drug cartels, he only named one of the several out there.

  8. jo6pac says:

    What no peace loving dirty hippies on the list, big mistake.

    When I read this I thought every corp. fits this to the T.

  9. rugger9 says:

    A couple of observations in addition to the ones raised (all very good): one issue is how to separate the innocent account holders from the bankster-management-crook element. For example, if we froze Wells Fargo’s assets the ones who would be frozen out in all likelihood would be the ordinary folks, and know that the MOTUs there would ensure exactly that outcome. [FWIW, Wells Fargo has been shady and incompetent for years, everyone in college had horror stories at Berkeley, many moons ago, so I won’t bank with them even today] In the case of the Yakuza, et al., the lines of legitimacy are somewhat clearer. So, any action taken to shut these creeps down has to target the creeps, not innocent bystanders.

    The second observation about Murdoch, Inc., not being on the hit list is exactly who decides what the line is for public discourse? In Canada, Fox is banned as a news source because the Canadians determined they weren’t truthful. Our First Amendment and the current makeup of the courts, packed as they are with GOP ideologues that would ensure protection for Rupert. Now, Murdoch, Inc., has engaged in clearly defined and objective illegalities around the world [does anyone really think Rupert stopped at the UK, really?] and that for me is enough. The risk is when one has the tinpot dictator mold (or Putin’s Russia) where criticism of the state is anathema, however “the state” is defined. Again, the creeps must go without collateral damage.

    The third observation covers the ones like the oil companies, where these entities hold significant blackmail opportunities over any attempt to rein them in. This is what the TBTF strategy is, we fought this war over 100 years ago with Teddy Roosevelt against the same enemy, but now they are bigger, and control more governments and empowered trade groups (like the IMF or WTO) to prevent any one country from stopping them this time. This is where arrests and jail time might make some pause, but the corporate culture now is to support the company in all things. One doesn’t have to look too closely to see that an expected response to jailing and other threats to the corporation are met head on with the full throated defense in court and in the media [see NewsCorp and BP, still a bad player and not just in NOLA] to protect their masters. How does one get the creeps and not lay the nation out for blackmail?

    I wish I had better news on those counts.

  10. readerOfTeaLeaves says:

    Okay, driveby with admittedly too little info… but after reading “Treasure Islands” by Shaxson, and “McMafia” by Misha Glenny, plus ‘a stack’ of other books and blogs related to finance, I’m going to swim upstream against what is probably the popular sentiment around this comment section and say, “Three Cheers for the new TOC Program!!”

    I hope the TOCers kick ass. I hope they are the financial equivalent of ‘Special Ops’, and I wish them the greatest success. (It’s too much to hope that they’ll go after the tax havens, but at least it is an acknowledgment that the free flows of global capital are creating some truly horrific problems. That’s progress.)

    At this point, I think there is a lot of overlap between TBTF banksters and TOC organizations — Example A being Wachovia, which appears to have morphed into one huge drug money laundering operation fronting as a legitimate bank. (The ExiledOnline did some breathtaking reporting showing how the horrendous violence in Mexico started AFTER the drug money was being laundered, so going after the money seems key to any hope of regaining civil society.)

    It’s not beyond the realm of imagination that some of these banks, or some of their divisions, are going to end up in the TOC spotlight.

    Anyway, who knows how TOC will pan out.
    But at least it’s acknowledging there’s a grim problem.

  11. emptywheel says:


    Don’t get me wrong–it’s important to go after the TOCs.

    But as Moises Naim has made it clear, there’s really no way to segment off the banksters.

    Until we recognize that our economic system is criminal in some of the same ways (if not to the same degree) as the gangs, we’re never going to make good progress at combatting them, because we’ll be guarding the system that enables them like the crown jewels (so as to keep that system working for the banksters and other multinationals).

    So long as the system is there, we’ll only ever be playing whack-a-mole, and we’ll play it less and less well as the banksters’ crimes continue to destabilize the world.

  12. marc sobel says:

    what about a Bankster that (as a hypothetical) launders TOC money ?

    That’s obviously okay because anything the Bankster touches becomes legitimate.

  13. emptywheel says:


    That’s what Wells Fargo (actually, Wachovia) admitted to have done–they were laundering Mexican drug money into the US.

    And that’s all before you consider their mortgage fraud.

  14. readerOfTeaLeaves says:

    Thanks, EW. Not familiar with Naim, but it appears that he and I are saying similar things (although me, not so clearly 8-p

    sobel @ 7:11 makes a really interesting point, and I’ll highlight it because I think this whole topic gets mighty squishy very fast.

    He points out [ironically, I assume] that anything the bankster touches becomes ‘legitimate’. That’s *exactly* what tax havens do — indeed, Shaxson gives a vignette of a Russian user of tax havens who seems to blithely believe there is some kind of ‘money detergent’ out there in Tax Havenville (Caymans, Delaware, Jerseys, wherever…) that just kind of ‘cleans up’ the money — some kind of Currency Spin Cycle Jurisdiction where you put the money into the tax haven and then wheee! it comes out ‘clean’!

    The TBTF banks have been part of that system.
    It’s at the core of their OS.

    The problem with TOC is that if it is serious about the national security implications of black money, then it’s only a matter of time before TOC takes on the banksters and the TBTF institutions. Because those TBTF institutions are so economically predatory and corrupt that *either* TOC will have to fold, *or* else it will have to face the reality that even some of our largest institutions are operating like criminal organizations, with zero regard for national sovereignty.

    So if TOC is a serious response to national security problems posed by financial corruption, then at some point, the TOC would be forced to take on the criminal components of the banksters.

    Unfortunately, the TOC may simply become another Potemkin agency. It may be simply one more excuse to surveil us all.

    But if the TOC maintains at tight national security focus, then it seems to me that the gravitational weight shifts.

    **IF** (and only if) the gravitational weight shifts, then we move from our current whack-a-mole-let’s-offer-up-bullshit-‘issues’-like-debt-ceiling, over to a mode where there really would be consequences for criminal conduct. And in that universe, dealing with the criminality of the banksters would be inevitable.

    Once you recognize that it is a serious risk for national security to have b.s. like AIGFP being ‘overseen’ by the weasely little OCC, then if you get serious about the risks involved, at some point there will be a showdown with banksters, and the criminal nature of the banking system we have at present will have to be confronted.

    Of course, here at EW’s, we can all count on Sen Richard Shelby to figure out a way to gut or screw TOC in order to protect his paymasters in banking. Or turn it into an agency that spies on us all.

    But then, IMVHO, Shelby’s the kind of politician who flourished in the 90s and 2000s on the wings of neoliberal free marketeering. Ditto Phil Gramm. We’re seeing an epic struggle to enforce what remains of that now-discredited vaunted role for ‘finance’.

    I don’t pretend to see the future, and I agree with your point that the banksters have had a free pass, and the government has busied itself with whack-a-mole.

    But with the economic indicators increasingly grim, with the growing signs of social instability, then it seems if you layer on a recognition that banking has ramifications for national security, you might actually get some traction.

    If that happens, it seems to me inevitable that sooner or later the banksters are going to find themselves in a very, very uncomfortable situation.
    At which point, I may be willing to spring for a very good bottle of my favorite Merlot.

  15. joberly says:

    @rugger9 # 12 and EW # 16– Joe Nocera in his *NYT* summer op-ed slot today says he called the US Atty’s office for Southern Iowa (Southern Iowa?) to ask why it was not prosecuting Wells Fargo Financial of Des Moines for fraud. 300,000 sub-prime mortgages between 2004 and 2008 written out of that Wells Financial shop. Good column by Nocera.

  16. merkwurdiglieber says:

    The only source of real cash is the underground, banksters depend on it to meet margin requirements. The UN even released a report on US banks and drug cash flow as essential element of their business model.

  17. Katie Jensen says:

    I am starting to think that the banks want the U.S to default…because then, the USA goes subprime. Doesn’t a lower credit rating, couldn’t it subject the USA to all the same crap in the home mortgages…and couldn’t it finally put a stake in the heart of any power that the USA as a country might have. Couldn’t it, just like the foreclosure of American homes, bring the whole country to it’s knees? What if this is why the banks aren’t lobbying? I got to thinking, that it doesn’t look to me, like O knows the outcome…I sense panic, that seems real. I started looking for another explanation for why the banks aren’t lobbying. I think, knowing what i know as a mortgage holder on a subprime loan, that there is more money to be made, better to gut us with, if our credit rating is lowered. Those 400 hundred or so folks with all the capital are sitting safe…with a lot of power to weld. It could be the final nail…delivered by the Republicans….just as the sub prime mortgages were delivered.

  18. Bob Schacht says:

    [Before reading the comments]
    The first thing I thought of was, could they use this to go after Wikileaks?

    What happens with this kind of tool development is that it leads to other applications either not conceived, or deliberately withheld from the public debate.

    Bob in AZ

  19. CelestialNavigation says:

    In reply to Katie Jensen at #20

    I’m with you. Why else would this process have been drug out so long. Who would have thought the the USA would be joining the ranks of Iceland, Ireland,Portugal,Greece. There is plenty of money for the banks in a default.

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