|Meet Sonchai Jitpleecheep|
This is a topic that I would normally avoid. I have no problem writing about money, but the latter topic leaves me ineffably bored. I find that drugs themselves are so very tedious. The debate over drug legalization frankly puts me to sleep, though I do strongly favor the legalization of Foie Gras in California, Britain and around the world (see earlier post, Marijuana and Pate in California, 6/30/12). Escape from reality is so much more pleasantly achieved with a good mystery novel, a kitschy Bond film, or a well-made cocktail. Better still, would be an escape with an airplane ticket, a bike ride or a mountain scramble (now a brief word from our sponsor -- http:/www.altrec.com).
Beyond drugs' intrinsic dullness, it is so darned depressing to think about the consequences of their use! Illegal drugs poison the mind, debilitate the body, and drain the pocketbook. Everyone knows the sad tales of enormous talent destroyed by drug addiction -- John Belushi, Jim Morrison, Janis Joplin, Whitney Houston and millions less famous around the world. Eva Rausing in London, the daughter of a wealthy American Pepsi Cola executive, (http://www.telegraph.co.uk/news/celebritynews/9392206/Money-and-drugs-the-lethal-cocktail-for-Eva-Rausing.html seems to be the latest high profile victim of the drug scourge.
Tales of all-powerful drug lords can make for terrific fiction in books and on the silver screen. John Burdett, the author of Bangkok 8 (http:/amzn.com/1400032903) and other novels (see earlier post, John Burdett's Vulture Peak, 7/12/12), claims that "according to some respectable accounts one third of the money washing around the world is owned by drug lords." But is this really true?
Commander Kelly stands accused of "naivete" and "blindness" on theses matters. Time to do a little research!
There is no question that there is a great deal of money to be made in the illegal drug trade (http://en.wikipedia.org/wiki/Illegal_drug_trade). Many have seen this picture of cash seized from drug lords in Mexico...
|$200 Million in Drug Money, Mexico 2007|
Pablo Escobar (http://en.wikipedia.org/wiki/Pablo_Escobar), the famous Columbian drug lord amassed a fortune which was estimated to be from $9 to $25 billion. While on the lamb, he was reported to have once burned $2 million in cash for personal warmth! He is also said to have once offered to retire Colombia's national debt (about $10 billion at the time) in exchange for immunity! Instead he died in a hail of gunfire on December 2, 1993. One of his houses in Colombia is now a tourist theme park.
The UN estimated in 2003 that the drug trade accounted for $321 billion or just under 1% (0.893% according to Wikipedia) of the total world GDP http://www.boston.com/news/world/europe/articles/2005/06/30/un_report_puts_worlds_illicit_drug_trade_at_estimated_321b/. It would seem that selling a high margin product that is highly addictive is a good business model. Cannabis is, of course, the most popular illegal drug and that has many small scale and home grown producers who hardly count as "drug lord kingpins".
So the illegal drug trade is, without doubt, big business, but still, is it really "a 1/3 of all money washing around the world"?
What if we were to compare the top ten wealthiest people in the world and the top ten wealthiest criminals? What would that tell us?
The top ten wealthiest people in the world (Slim, Gates, Buffett etc.) range from a high net worth of $69 billion to a low of $25.4 billion. Their businesses range from Microsoft to mining. The ten people wealthiest people in the world in aggregate own $395.4 billion. Source: Forbes http://www.forbes.com/billionaires/
Who are the ten wealthiest criminals today?
According to an E-Bandit article from 2011 (http://ebandit.in/the-worlds-richest-criminals), here they are...
1) Dawood Ibrahim Kaskar $6-7b At large Goldrunner, Mumbai mafia
2) Carlos Lehder $2.7b US Jail Drugs
3) Robert Allen Stanford $2.2b US Jail Financial Fraud
4) Joaquin "El Chapo" Guzman $1b At large Drugs
5) Semion Mogilevich $1b At large Fraud, Money laundering
6) Bernie Madoff $800m Duke Medical Center Ponzi Scheme
7) Leo Denis Kozloski $600m US Jail Fraud, Tyco
8) Griselda Blanco $500m At Large / Dead? Drugs
9) John Palmer $477m British Jail Mortgage fraud
10) Brian Wright $160m Undisclosed Jail Drugs
There are several interesting things to note about this list...
1) Only four out of the top ten criminals are actually in the drug business.
2) Six out of ten are either in jail or in hospital.
3) Only 3 out of ten are definitely at large.
4) The total combined net worth of all ten is, at most, $16.4 billion or significantly less that the net worth of the world's tenth richest man, 92 year old Karl Abrecht of Germany who is worth $25.4 billion.
5) The aggregate wealth of the top ten criminals is approximately 1 / 25th the total wealth of the world's top ten richest men.
6) The wealth of the top ten criminals in the world is less than the wealth of Facebook founder Mark Zuckerberg alone which Forbes estimates at $17.5 billion
7) None of today's top ten criminals has amassed anything near the fortune that Pablo Escobar did in 1990's.
|The Napoleon III of Crime...?|
If the top ten richest criminals, only four of whom are actually in the illegal drug business, only account for for about 1 / 25 of the personal wealth of the conventionally wealthy then it would seem to stretch credibility to the breaking point to assume that "one third of the money washing around the world is owned by drug lords".
Commander Kelly says, "Consider this myth busted!"