It is an amazement to me that we can be approaching the election and people can fail to know who John Kerry is. I doubt there is much I can do to compensate for that but I might as well try.
Let’s just take an example that’s very relevant to the mess in the Middle East.
BCCI was a bank run out of one of Arab gulf states. The quotes below are from the Senate investigation’s final report on BCCI.
These oil rich gulf states are an organizational pain the neck. When the wealth of a nation flows thru a few very easily controlled bottlenecks it’s almost impossible to avoid extremely severe distributions of wealth. So you get dictators. A handful of men with nothing that can counter act their power; particularly nothing at home. It breeds the worst kinds of societies. Oppression, slavery, prostitution, terrorism, powerful wealthy bad-actors. The typical mess you get when the distribution of wealth becomes so severe that nothing prevents abuse of the little guys while at the top the competition becomes vicious.
And it’s a mess that tends to spread. Because the money and power buys friends and the vicious local culture when exported can find the liberal democratic culture easy prey. BCCI was a perfect example of this kind of spreading cancer.
BCCI’s criminality included fraud by BCCI and BCCI customers involving billions of dollars; money laundering in Europe, Africa, Asia, and the Americas; BCCI’s bribery of officials in most of those locations; support of terrorism, arms trafficking, and the sale of nuclear technologies; management of prostitution; the commission and facilitation of income tax evasion, smuggling, and illegal immigration; illicit purchases of banks and real estate; and a panoply of financial crimes limited only by the imagination of its officers and customers.
Nice people huh?
While BCCI was an ugly mess. But of course such things aren’t hard to find. Here are a few examples: Enron, WorldCom, the California energy debacle, the 80s Savings and Loan mess, the War in Vietnam, the fouled up process of going into Iraq, the apparent institutional breakdown in the days leading up to 9/11, Love Canal, Abu Ghraib, Somilia, Reconstruction after our Civil War.
These are society’s equivalent of natural disasters. They are like a Hurricane sweeping across the Florida pan handle, or the 6 story waves that recently hit the populated coast line of Japan. But these aren’t, entirely, acts of nature and on our good days we learn from these. We toughen up the building codes, we set the buildings back from the shoreline. We remove for the scene those folks who were failed to do the building inspections. We fine the builders that cut corners. We punish those that bribed or took the bribes.
Societies learn. Sometimes one of these comes along and we discover a failure modality that we haven’t seen before – the Asian currency crisis in the 90s was one of these. With luck we figure it out and then lay in regulatory mechanisms – building codes – to temper the risk it will happen again.
Social disasters like these sometimes have bad actors at their core. These actors who labor to overcome society’s defenses.
In 1977, BCCI developed a plan to infiltrate the U.S. market through secretly purchasing U.S. banks while opening branch offices of BCCI throughout the U.S., and eventually merging the institutions. BCCI had
significant difficulties implementing this strategy due to regulatory barriers in the United States designed to insure accountability. Despite these barriers, which delayed BCCI’s entry, BCCI was ultimately successful in acquiring four banks, operating in seven states and the District of Colombia, with no jurisdiction successfully preventing BCCI from infiltrating it.
When these social disasters happen it is very rare for them to go entirely unnoticed. For example the CIA knew what BCCI was up to.
By early 1985, the CIA knew more about BCCI’s goals and intentions concerning the U.S. banking system than anyone else in government, and provided that information to the U.S. Treasury and the Office of the Comptroller of the Currency, neither of whom had the responsibility for regulating the First American Bank that BCCI had taken over. The CIA failed to provide the critical information it had
gathered to the correct users of the information — the Federal Reserve and the Justice Department.
After the CIA knew that BCCI was as an institution a fundamentally corrupt criminal enterprise, it continued to use both BCCI and First American, BCCI’s secretly held U.S. subsidiary, for CIA operations.
It is also a very common pattern that as these disasters unfold the coordination problems between societies institutions (rivalry for example) frustrate pulling together an appropriate response. For example the various parts of the justice department didn’t seem to be able work together on BCCI.
Justice Department personnel in Washington, Miami and Tampa obstructed and impeded attempts by New York District Attorney Robert Morgenthau to obtain critical information concerning BCCI in 1989, 1990, and 1991, and in one case, a federal prosecutor lied to Morgenthau’s office concerning the existence of such material. Important failures of cooperation continued to take place until William P. Barr became Attorney General in late October, 1991.
Cooperation by the Justice Department with the Federal Reserve was very limited until after BCCI’s global closure on July 5, 1991.
We almost always get to watch the good guys getting confused about what their job is. Acting to assure their local benefit rather than doing their job.
Some public statements by the Justice Department concerning its handling of matters pertaining to BCCI were more cleverly crafted than true.
One way the bad guys manage to pull off something like BCCI is to buy their way into the elite fabric of the societies they are undermining. Much the way the Enron’s Ken Lay was Bush’s largest donor last time around, or the local TV broadcast stations use are so friendly with those who regulate them, or the local savings and loan banks were so friendly with their regulators in the 80s.
BCCI’s systematically relied on relationships with, and as necessary, payments to, prominent political figures in most of the 73 countries in which BCCI operated. BCCI records and testimony from former BCCI officials together document BCCI’s systematic securing of Central Bank deposits of Third World countries; its provision of favors to political figures; and its reliance on those figures to provide BCCI itself with favors in times of need.
…
The result was that BCCI had relationships that ranged from the
questionable, to the improper, to the fully corrupt with officials
from countries all over the world, including Argentina, Bangladesh,
Botswana, Brazil, Cameroon, China, Colombia, the Congo, Ghana,
Guatemala, the Ivory Coast, India, Jamaica, Kuwait, Lebanon,
Mauritius, Morocco, Nigeria, Pakistan, Panama, Peru, Saudi Arabia,
Senegal, Sri Lanka, Sudan, Suriname, Tunisia, the United Arab
Emirates, the United States, Zambia, and Zimbabwe.
While that kind of relationship building is well worth it as the cancer spreads it has a much more serious consequence.
When the disaster finally becomes obvious every one of those partners in crime becomes an ally for a cover up. These are powerful people.
To stand up to that power takes guts.
Who led the Senate investigation on BCCI? John Kerry.
Could there be any experience that makes a man better suited to understanding what is really unfolding in the Middle East?
Do you want a president with that experience?
This power adaptor claims to be very conformant.
I think I’ll try out the Brad DeLong technique and bring your attention to something by quoting the entire article. Let’s see if I get this right.
If I had a EAN.UCC Company Prefix of my very own (only $750