ZeroZeroZero (26 page)

This is something drug traffickers know.

But Bebè’s freedom doesn’t last long. On July 5, 2013, he is arrested in a shopping center in Bogotá. In his pocket is a fake Venezuelan ID card, with the name Silvano Martino, which he shows to the police,
denying that he is the narco-trafficker they’re looking for. But the mug shots from the Italian authorities don’t leave room for doubt. On the Colombian news that evening his face appears behind the journalists, who announce the arrest of “one of the most wanted drug lords in Europe
.
” He had four arrest orders for drug trafficking and “mafia association” hanging over his head. Interpol had classified him as a “red alert.” After the ritual photos, in which the Colombian agents show him off like a trophy, Pannunzi is put on a plane for Rome, via Madrid. He’s not the only VIP on board: Raffaella Carrà is on the flight too, Italian television’s most famous showgirl, who, like all the other passengers, is oblivious to the boss’s presence. The photos of his arrival at Fiumicino airport show him wearing the same long-sleeved white polo shirt he’d had on in the video of his arrest in Colombia, the last shirt he put on as a free man. Pannunzi now has to serve twelve years, five months, and twenty-six days in jail. During his criminal career various epithets have been pinned on him— “prince of drug trafficking”; “the most wanted broker in Europe”; “the Italian Pablo Escobar”; “king of evasions”—but I prefer to call him “the Copernicus of cocaine,” because he was the first to understand that it’s not the world of cocaine that must orbit around the markets but the markets that must rotate around cocaine.

His arrest required the collaboration of the Italian security forces, the American DEA, and the Colombian police, as well as about two years of investigations coordinated by the public prosecutor’s office in Reggio Calabria. Perhaps it’s not a coincidence that only two days before his arrest, “il Principe,” Prince Massimiliano Avesani, Bebè’s contact in Spain, was arrested in Rome. He too had a fake ID in his pocket, a driver’s license registered to a Giovanni Battista—who had a clean record—but after he was taken to police headquarters he had to admit his real identity. Avesani, who was considered the pivot between the Calabrian clans and the Roman criminal organizations, had been arrested in Montecarlo in 2011, but he went into hiding in order to avoid a fifteen-year sentence for international drug trafficking. He
didn’t go very far though: His hideout was an elegant apartment in the Torrino neighborhood in the south of Rome, where the police found other blank IDs that would have come in handy for his life as a fugitive. Apparently he congratulated the police officers who arrested him: “Bingo” he allegedly said. In truth, they were still one number shy of bingo, but it arrives two days later with the arrest of Bebè Pannunzi on the other side of the planet. Who knows, maybe it was Avesani himself who extracted the winning number from the tumbler. Pannunzi may have lost his protection once Avesani fell.

Some day I’d like to meet Roberto Pannunzi. To look him in the eye, but without asking him anything, because he wouldn’t tell me anything other than empty chatter fit for a journalist who writes insubstantial fluff. There’s something I’d really like to know, though: Where does he get his inner serenity? You can see he doesn’t look tormented. He doesn’t kill. He doesn’t destroy people’s lives. Like a good drug broker, all he does is move capital and cocaine around, without ever touching the latter. Just as others do with oil or plastic. Don’t they cause car accidents, irreversible pollution all around the world, even wars that go on for decades? Do oil companyexecutives lose sleep over such things? Do plastic manufacturers? Or the heads of multinational IT companies, who surely know how their products are built, or that cornering the coltan market is the root of ongoing massacres in the Congo? I’m sure that’s how Pannunzi rationalizes things. But I’d like to hear what sort of justifications he’d offer, one by one. What does he tell himself in order to say: “I’m just a broker. You give me the money and I’ll give you the goods. Like everyone else.” That’s all. No better or worse.

How do you feel when, to enter your bank, you have to go through a security door that only lets one person in at a time? What runs through your head while you’re waiting in line to make a money transfer, deposit a check, get some coins and small bills so you can make change for your customers at your bar or shop? When your father, who has a regular salary, has to sign in order for you to get a mortgage on a house, because both you and your wife make do with temp work? What concepts have you learned to associate with words like spread or rating, liquidity or deficit crises? Which of these terms are you familiar with: hedge fund, subprime, credit crunch, swap, blind trust? Can you explain what they mean? Are you too convinced that you belong to the 99 percent whose combined wealth does not even match that of the remaining 1 percent? That financial capitalism is primarily to blame for your increasingly difficult struggle to make ends meet? And do you too believe that the banks, which manage to get billions from the state—from you, in other words—and yet won’t renew your credit, are a giant Moloch controlled by an invisible and untouchable clique of speculators and high-level executives? You’re wrong, at least in part. There’s no secret power trying
to crush you, no specter with degrees from the best universities, dressed in expensive but understated outfits, and displaying calm, sober manners.

Banks and banking power are made up of people, just like everything else. If that power has proved to be deeply destructive, the fault lies not just with greedy cokehead brokers or that one corruptible employee, but with everyone: from the trader licensed to make high-risk deals, to the team of specialists that buys stocks on the global market that will flow into funds offered by the same bank, to the employee who suggests someone to manage your savings, right down to the teller at the window. All together they carry out the bank’s directives, and almost all of them are honest. Honest not merely as in not doing anything illegal, but also in believing they’re acting for the good of the bank without, however, acting for the ill of its clientele. Maybe a little less honest at times, but not because they decide on their own to look after their interests, but because they’re doing what they’ve always done: carrying out tacit directives that are always in the bank’s best interest. And this happens at all levels, high and low, and it forms a system. Which is how we arrive at that global mechanism that might seem to you like some kind of conspiracy but that really works much more along the lines of what has been called “the banality of evil.”

But if the mechanism is made up of many loyal and banal individuals, a little grit can cause the gears to jam. For example, the man who, if it hadn’t been for September 11, would have been kept waiting forever in a damp room at a London police station. The Twin Towers have just fallen and the United States is starting to recover. George W. Bush has introduced the PATRIOT Act, which among other things is supposed to identify and pursue international money laundering and funding for terrorism. The law establishes a series of special measures that U.S. banks are required to adopt when dealing with jurisdictions, institutions, or accounts they suspect are laundering dirty money; it provides greater transparency in financial activities and accountability, limitations on interbank operations, and tougher penalties for transgressors.

Four years later an Englishman with impertinent blond hair crosses the threshold of Wachovia Bank, one of the giants of the American credit system: a man named Martin Woods. He’s just been hired as a senior money-laundering reporting officer in the bank’s London office. Punctilious and precise, maniacal about order. Just the right person for a bank aiming to adhere scrupulously to the new money-laundering protocols. But Martin isn’t merely a zealous employee who is good with numbers and loves double-entry bookkeeping. He is a former agent of the National Crime Squad. This gives him a huge advantage over his banking peers around the world: Martin understands people. He knows how to talk with them, how to read their gestures, how to weigh the nuances of their moods. Money is just one of the many variables, just one of the many color gradations, on his personal grid for evaluating people.

There are already three actors onstage in this drama: a wounded country that’s reacting to attack; a measure that aims to stifle threats by fighting them on the financial front; and a man who wants to do his job. What’s needed now is a fourth, a key character: a DC-9. The airplane lands in Ciudad del Carmen, in the state of Campeche; awaiting it are Mexican soldiers, who find onboard 128 black suitcases containing 5.5 tons of cocaine, worth about a $100 million. A phenomenal bust, a punch in the face of the narcotics trade. But the investigators’ jaws really drop when they discover that the DC-9, which belongs to the Sinaloa cartel, was purchased with money laundered through one of the largest banks in the United States: Wachovia.

While investigators dig through the past of the DC-9 that landed in Mexico, Martin is already picking scrupulously through Wachovia’s clients’ records. That’s what investigators and money-laundering reporting officers do. Stick their noses into piles of papers, poison themselves with numbers and dates, then put it all together and see if there are any discrepancies. Martin discovers that there’s something not quite right about a bunch of traveler’s checks issued in Mexico. A tourist couldn’t possibly need that much money. Then his eyes fall on the
numbers, which are strangely sequential. And the various signatures, why do they all look so much alike? He reports his suspicions to his superiors; many of the checks involve
casas de cambio
,
Mexican currency exchange agencies. Martin spends hours on the phone, he sends e-mails, requests meetings to discuss the reports he keeps sending with stubborn determination. He smells a rat, and the news from Mexico and the United States only confirms his suspicion. The American authorities’ constant scrutiny of the bank’s activity pushes Wachovia to sever relations with some
casas de cambio,
and the ones that survive the cut decide to take a step back. Under fire from the outside, the banking giant vacillates at first, but then responds with a cleanup operation. Inside the bank, however, all is quiet. Silence and isolation are the most effective forms of “mobbing” (workplace bullying). Martin goes on writing new suspicious activity reports. When people point out that he’ll never get a reply, and that he’ll get himself in trouble if he keeps it up, he responds in his usual manner: He lowers his eyes and smiles. After his umpteenth report falls on deaf ears he receives an office communication: His most recent write-up was irregular, because his authorized range of action does not extend as far as the United States and Mexico. It’s the beginning of the end for Martin’s work: The spokes in his wheels multiply, office life is awful, he no longer has access to important files. The silent treatment his coworkers give him isn’t enough: Wachovia is staging a counterattack; it has to do something to shut up this incorrigible busybody.

On the other side of the Atlantic the investigators looking into the DC-9 discover that since 2004 several billion dollars have moved from the Sinaloa cartel “cash box” to Wachovia bank accounts. It emerges that for three years the bank did not respect money-laundering protocols when transferring $378.4 billion. Of this at least $110 million were from drug trafficking, which had entered international banking circuits in this way. That’s how it worked. The money entered through the
casas de cambio.
The world’s richest cartel was sending money as if it were an army of
mamacitas
with their savings stitched into the lining of their
clothes or of old men selling off a plot of land to help out their grandchildren in the United States. Those same exchange agencies then opened accounts at a Miami branch of Wachovia Bank. Millions of dollars in cash were deposited in Mexico and then wired to Wachovia accounts in the United States to buy stocks or property. On numerous occasions the drug cartels themselves were the ones making the deposits. For example, about $13 million were deposited and transferred to Wachovia accounts to purchase airplanes for drug trafficking. More than twenty tons of cocaine were seized from these planes.

In English there’s a lovely word for denouncing or exposing wrongdoing: whistle-blowing
.
Martin blew his whistle with all his might, and at a certain point Wachovia realized that if they wanted to silence the piper they’d have to muzzle him. The freeze-out at the office intensifies. Martin, close to a nervous breakdown, goes to see a psychiatrist. He’s out of the game, but with his remaining strength he makes one last attempt. He finds out that there will be a meeting at Scotland Yard, where he hopes to find some colleagues open-minded enough to listen to him. He’s sat at the same table with a representative from the American DEA, a jovial type with a curious gaze. Martin doesn’t think twice before pouring out his story to him. Putting all his trust in a total stranger, he pushes a rock down the escarpment in hopes of starting an avalanche. And the rock rolls. It rolls until March 16, 2010, when the vice president of Wachovia Bank signs a plea bargain in which the bank admits it provided banking services to twenty-two
casas de cambio
in Mexico, from which it accepted money in the form of wire transfers and traveler’s checks.

More or less what Martin Woods had reported four years earlier, much to his detriment. Woods filed suit against the bank for retaliating against a whistle-blower. That lawsuit was finally settled by Woods’ leaving the bank in exchange for an undisclosed sum and an agreement to keep the terms of the settlement confidential.A sad epilogue, at least until March 2010, a few days after Wachovia signed the plea bargain, when Martin at last gets some recognition. He receives a letter from
John Dugan, comptroller of the currency of the United States, who handles bank monitoring for the U.S. Treasury Department: “Not only did the information that you provided facilitate our investigation, but you demonstrated great personal courage and integrity by speaking up. Without the efforts of individuals like you, actions such as the ones taken against Wachovia would not be possible.”

The authorities grant Wachovia Bank a deferred prosecution; that is, the charge is delayed till the end of a probation period: If the bank adheres to the law for a year and meets all its plea bargain obligations, the charges will be dropped. The authorities probably think they are acting responsibly. In such a delicate moment, with the country struggling to recover from the most serious financial crisis since 1929, they can’t risk another big bank collapsing and disaster striking again. The probation period ends in March 2011: From that moment Wachovia is clean, everything’s okay. They had to pay the government a $110 million forfeiture for accepting transactions linked to drug trafficking, and thus violating anti-money-laundering norms, plus a $50 million fine. An enormous sum but ridiculous compared to the earnings of a bank like Wachovia, which in 2009 were about $12.3 billion. Money laundering pays. Not one bank employee or director had to see the inside of a jail cell, even for a single day. No one is guilty; no one is responsible. Merely a scandal, which quickly sinks into oblivion.

We need to read between the lines, however, and go back to the story of Martin, who with his courageous stubbornness managed to obtain much more than what the sentence contains. The reticence of the authorities shows that there is a very tight link between the banks and the tens of thousands of deaths in the Mexican drug war. But that’s not all. Martin stirred up troubled waters, he dirtied his hands with numbers in order to reactivate the American banking system’s protections. A single lightning bolt in a cloudless sky. But there are thunder and lightning on the horizon. Controls grew very rigid after September 11, but with the financial crisis that exploded in the midst of Martin’s investigation, the climate changed. Hence the verdicts that send the
megaswindler Bernie Madoff to prison for 150 years, and the French trader Jérôme Kerviel for 5, along with repaying Société Générale nearly €5 billion, the amount he’d burned through. These men, who often describe themselves as sacrificial lambs of the system, nevertheless caused enormous harm to individuals, companies, and society as a whole. But the narco-dollars that flow into coffers don’t seem to cause any damage; in fact, they provide that life-giving oxygen known as liquidity. So much so that in December 2009 Antonio Maria Costa, then head of the United Nations Office on Drugs and Crime, made a shocking statement: He had been able to ascertain that criminal organizations’ earnings were the only liquid investment capital some banks had to keep from failing. The International Monetary Fund’s data is grim: From January 2007 to September 2009 the total of toxic stocks and bad loans in the United States and Europe reached $1 trillion. And alongside these losses were the failures and temporary receiverships of credit institutions. By the second half of 2008 cash flow had become the banking system’s principal problem. As Antonio Maria Costa emphasized, “That was the moment when the system was basically paralyzed because of the unwillingness of banks to lend money to one another.” Only criminal organizations seemed to have enormous quantities of cash to invest, to launder.

No doubt by this point some of you are starting to think that I’m obsessed. The problem, you might say, isn’t so much mafia money as it is the financial system. Money expands like gas. If that bubble bursts, the nebula will vanish so quickly that incoming narco-dollars will pale in comparison. Which is what happened on September 15, 2008, with the avalanche the Lehman Brothers bankruptcy set in motion, an avalanche that only billions in public funds managed to stop. But the mess I’m talking about—born amid the skyscrapers of Wall Street, and thus, to all appearances, far from simple Calabrian villages, the Colombian jungle, and even the perennially crumbling, blood-soaked towns along the Mexican border—in truth isn’t a mess at all. It is well known that Lehman Brothers had invested vast sums in subprime mortgages, which
were nothing other than a stroke of genius, a way of reselling mortgages that many signers could not possibly pay, as profitable investments. Profit derived from debt. When the rope snapped and the game ended, lots of people who bought homes this way ended up in the street. And above all, that time, it was decided that the bank bloated with hot air could fail too. No sooner were the catastrophic consequences of this decision unleashed than all the other banks and insurance companies that had more or less behaved like Lehman Brothers had to be saved. Yet U.S. government aid was only an emergency stopgap for a system based on those dynamics. The crux of the matter is that banks need to ingest a sufficient amount of solid food in order to produce the immense wealth that swells their bellies, which they have to be able to rid themselves of as soon as someone asks them for money, in whatever form. That is the problem with liquidity. The alchemy of contemporary finance is based on the transubstantiation of money from a solid to a liquid and gaseous state. But that solid/liquid mix proves systematically never to be enough. In the advanced West they’ve closed the factories, and consumption is nourished through forms of debt such as credit cards, leasing, installment payments, and financing. Who, on the other hand, earns the biggest profits from merchandise that must be paid for in full right away? Narco-traffickers. Real mafia money can make the difference to the survival of the financial system. That’s the danger.