The war on drugs is a massive paramilitary and military operation involving the US working with the military of various countries armed forces that can erupt into in gunfights with drug cartels. But as the excellent program Cartel Bank in the Netflix documentary series Dirty Money points out, there is a weak link in the drug business that can be more easily targeted but is not being done. The real pressure point that can be applied to stop or at least limit the drug trade is to choke off the money flow because, after all, the drug cartels are in it for the money not for any ideology.

Drug dealing involves massive amounts of money but at its source it is a small denomination, cash-based business because ultimately, the money is obtained by selling drugs illicitly for cash, often on the street. This results in the tens of thousands of pounds (in weight) of cash that is collected from the end users of drugs. That money has to be taken off the streets and converted from cash into bank deposits so that it can be then wired to various tax havens and shelters to be laundered from which it emerges as ‘clean’ money. It is all part of the system that was described in the Moneyland book I reviewed earlier.

Here’s how the system currently works. Drugs are smuggled into the US from Mexico, sold here, and the resulting large amounts of cash are smuggled back into Mexico. While US customs officials tend to be vigilant about checking for drugs in vehicles driving across the border into the US, they do not check the cars that are leaving the US to see if they have large quantities of cash, and so the stacks of currency flow out easily

Once in Mexico, the cash can begin to be laundered. Banks are an essential part of this laundering process and they are supposed to be on the alert for people with dubious backgrounds opening accounts in which large amounts of money pass through. Low-level bank managers in Mexico are bribed or their families can be threatened with death by the cartels if they do not open accounts for drug dealers or their fronts, so they are often helpless But even then, the banks are supposed to have internal red flags in the system that should be raised when large amounts of money are being transferred between various accounts, institutions, and countries.

This is where HSBC comes in. It essentially acted as the bank that laundered the drug money by turning a deliberate blind eye to the vast amounts of questionable money that entered through its doors and then was transferred elsewhere. But it was worse than just ignoring the red flags. In some cases, there seemed to be deliberate attempts by bank official to hide the identities of the senders and recipients even when they were known to be associated with drug cartels or narco-terrorists. This was because this money flow was profitable to the banks.

But the US government does not seem to want to crack down hard on the banks because these banks are too big to jail and, as Matt Taibbi says in the documentary, the bank executives who commit these massive crimes are white people who drive nice cars and live in fancy houses in Connecticut so it would be in bad taste to put them in jail. They also all move in the same social circles as top government officials. It is much easier to stage shootouts with drug cartel members and arrest street drug dealers in highly publicized made-for-TV drug busts that give the illusion that the government is doing something about the drug epidemic, when it could have a much bigger impact by following the money trail, and going after the banks and choking off the money laundering process.

A US attorney in West Virginia who, in the case of investigating the drug epidemic that was ravaging the state, felt that he had enough evidence to indict HSBC for its role in the money laundering scheme but he was told by his superiors in the Obama justice department headed by Eric Holder and Lanny Breuer to stand down and the case was handed over to Loretta Lynch, a US attorney in a different jurisdiction who was later appointed by Obama to succeed Holder as attorney general. She negotiated a deal with the bank that involved HSBC only paying a $1.92 billion fine and Holder and Breuer signed off on the deal. That looks large but amounted to only about five weeks of profit for the bank so it could be easily discounted as the cost of doing business. The key point is that no bank executives were charged with any crime, let along going to jail. That would be the real deterrent.

Of course, Holder and Breuer later left the justice department and became highly paid partners at the big law firm Covington and Burling, a firm that has big banks as clients. Wasn’t that convenient? Lynch went on to become a partner at another big law firm Paul, Weiss that defends corporate giants like ExxonMobil over charges that it lied about its knowledge about the impact of fossil fuels on climate change. Meanwhile the Trump administration has moved to drop all charges against HSBC.

So, in short, the US’s war on drugs only extends as far as going after street dealers, cartels in Mexico, and small growers. It leaves alone the people who are key players in the process, the banks that launder the money.

More evidence, if you need it, that big banks and Wall Street are our overlords and are above the law.

Here’s the trailer for the Dirty Money series that has six episodes of big frauds of which the HSBC case is just one.