'Jail Drug Mules? Then jail the bankers laundering billions of dirty money for cocaine barons too, says writer Tom Feiling', Sunday Mail, 25.8.13


PERHAPS Michaella McCollum and Melissa Reid are just naive, foolhardy youngsters who got in over their heads.


Or maybe they really were kidnapped by Colombian gangsters on the island of Ibiza and forced to travel to Peru to become drug mules.


Whatever the truth, Peruvian authorities say that the British women’s case is unlikely to come to trial for at least three years. If they are found guilty, they face the prospect of spending up to 15 years in jail.


The pair stand accused of trying to smuggle 11kg of cocaine on to a plane bound for Madrid.


Smuggling drugs into the EU is the riskiest part of the cocaine business, which is why it is also the most lucrative.


It accounts for the largest part of the 15,800 per cent mark-up on a gram of cocaine between the laboratory in Peru, Bolivia or Colombia and its retail sale in the UK.

By way of comparison, the difference in the price of coffee beans between source and sale is just 223 per cent.


The arrest of British drugs mules might make headlines but it makes little difference to the traffickers. In 2007, the Home Office conducted a survey of drugs traffickers in UK jails. One estimated that one in four of his mules didn’t get through Customs.


Yet, despite losing a quarter of his merchandise, he was still able to keep a healthy balance sheet.


You might think that being behind bars would be proof enough that crime doesn’t pay. But most of those who took part in the survey believed the risk of arrest to be low and the threat of prison “not a serious deterrent”.


Such is the profit margin on illegal drugs, the United Nations say that Customs officers around the world would have to intercept 75 per cent of the cocaine produced to have a serious impact on the drugs business.


Despite years of well-publicised interventions, current efforts are thought to intercept no more than 40 per cent of cocaine shipments. Europeans consume about 124 tons of cocaine every year.


Most of it enters the EU hidden in shipping containers but 30 tons are thought to come in via mules on commercial flights.


While big traffickers have the funds to bribe their way through ports, the small fry don’t.

This is why they need mules, who are usually gullible, greedy, or desperate. And, maybe, terrorised.


Despite the risks they run, drug mules rarely see much of the profits. They certainly don’t get a 20 per cent cut, which seems to be the going rate for laundering drug money.

Of course, bankers don’t like to use such terms, preferring to call them “speciality services”. But their skill in making dirty money clean is an essential part of the drugs trade.


In December 2012, HSBC were forced to admit they had laundered billions of dollars for Mexican and Colombian drugs cartels. It was the biggest drug money laundering case ever heard in an American court.


Yet the official response was far from tough. The US Department of Justice fined the bank $1.9billion – about £1.2billion – which equates to five weeks’ profit.


Nobody from HSBC went to jail. Why? Because the DoJ were worried that anything more than a slap on the wrist might undermine one of the pillars of the world economy.

One of the many ironies of drug prohibition is that despite the well-publicised arrests of small-time mules and dealers, the bigger fish always seem to get away. That’s because prohibition has made the trade in what are basically cheap crops eye-wateringly profitable.


And despite all the rhetoric about fighting a war on drugs, the profits from the trade come in handy when profits from legal businesses dry up.


Antonio Maria Costa, former head of the UN Office on Drugs and Crime, has said that when the financial crisis hit in 2008, the proceeds of organised crime were “the only liquid investment capital” available to some banks.


As a result, most of the £216billion of profits generated by the global drugs trade that year was absorbed into the legal economy.


Whether McCollum and Reid are victims of coercion or willing participants in a smuggling racket, their story is set to generate more headlines than the bankers’ complicity in the trade ever did. And that really is a scandal.


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Tom Feiling is the author of Candy Machine: How Cocaine Took Over The World, published by Penguin.