Sunday, December 04, 2011

DEA launders or transports millions in cartel cash, says New York Times

The New York Times reports on the top of page 1, Sunday, Dec. 4, 2011, that agents of DEA and other federal agencies have laundered or transported "millions" of dollars in drug proceeds. Agents have "handled shipments of hundreds of thousands of dollars in illegal cash across borders..."

This is not news nor is it shocking. This is basic undercover work of counter-narcotics investigations. In 1986 and 1988, Congress authorized law enforcement agencies to create fake entities and otherwise engage in stings to fight narcotics trafficking and other crime.

The sums mentioned in the New York Times story, compared to the tens of billions in illegal proceeds that the cartels have to transport and launder every year, are quite insignificant. That some drug traffickers may have benefited from this investigative technique is an intrinsic price of this investigative technique.

Perhaps this is news because of the political "scandal" that BATF allowed weapons that were illegally purchased get transported to Mexico in an attempt to gather intelligence to investigate illegal weapons trafficking in "Operation Fast and Furious." Republican Members of Congress have assumed a mantle of indignation about letting "weapons walk" to attack BATF and Attorney General Eric Holder, and by extension, the Obama Administration.

Law enforcement participation in weapons trafficking or money laundering is little different from the long-time practice of counter-narcotics agents participating in drug transactions in which the drugs get through to the streets and to users as part of an investigation. If DEA seized the drugs in every transaction in which an undercover agent or informant were gathering evidence, those investigations would be infinitely more dangerous and ultimately less successful in reaching their high-level targets.

Allowing the criminals to operate, and working with criminals and assisting in their crimes, is an inherent feature of undercover investigations on the axiom that this is key to earning the trust necessary to burrow deeper into a criminal organization to gather evidence need to identify and convict the criminal leadership. This "collaboration with criminals" is also carried out investigating organizations that are fencing stolen goods, investigating illegal gambling, prostitution, pornography or trademark piracy. Such investigations are inherently "tainted" by their collaboration with criminals. They always have an element that the criminals benefit. Evaluating them always involves a process of balancing evils.

Cops routinely tell lies to suspects. Any interrogation involves misrepresentation, withholding information, bluffing, making false promises and almost every other type of deceit. Officers need to know that they must be, and must be in fact, truthful in their internal reporting and whenever they make a statement under oath or in court. Obviously distinguishing when lying is permissible and impermissible is critical. Developing the ability to resist the temptation to lie when convenient or advantageous when impermissible must be taught and reinforced regularly. Officers are, of course, human beings, and when they fail in this, they must be punished. Norm Stamper writes about these challenges in his excellent book, Breaking Rank.

Is such "collaboration with criminals" necessary? I think so. Sophisticated criminals know that they need to minimize their connection to the evidence and the criminal conduct that they direct. The most powerful, most wealthy criminals are the most insulated. The dangers that they present to to public safety and to the functioning of a democracy and free economy are extensive enough and grave enough that these tools are necessary.

What most of us would find disturbing is when such seductive and trust-winning-betraying techniques are employed against minor offenders or when there is no consensus that the conduct is wrongful and should be punished. And certain kinds of trust winning roles should not be used. Should the government deploy women to seduce criminals into love affairs to learn their secrets and to betray them? I think not. Should the government deploy agents to pretend to be attorneys, priests and clergy, physicians or journalists to gather secrets from their enforcement targets? I don't think so. Trust is an essential glue of any community. And the integrity of certain professions is critical to a functioning democracy and a functioning society.

Drug policy reformers are right to be worried about the democracy-endangering activities of undercover police operations. We are justified in being indignant that unjust or unwise laws are enforced with the most extreme techniques. But we also must concede that society must combat the most dangerous criminals, and that undercover techniques are an essential tool that society must authorize and deploy.

UPDATE, Dec. 5, 2011

Section 1352 of the Anti-Drug Abuse Act of 1986 (P.L. 99-570) created a new federal crime of "Laundering of monetary instruments" (18 U.S.C. 1956) and provided that "(e) Violations of this section may be investigated by such components of the Department of Justice as the Attorney General may direct, and by such components of the Department of the Treasury as the Secretary of the Treasury may direct, as appropriate. Such authority of the Secretary of the Treasury shall be exercised in accordance with an agreement which shall be entered into by the Secretary of the Treasury and the Attorney General." (100 Statutes at Large 3207-20).

Section 6465 of the Anti-Drug Abuse Act of 1988 (P.L. 100-690), "Undercover 'sting' operations in money laundering cases," amended 18 U.S.C. 1956 to create in subsection (a) a new crime in new paragraph (3) of conducting or attempting to conduct a financial transaction involving property represented by a law enforcement officer to be the proceeds of specified unlawful activity [which includes all manner of controlled substance offenses], if the conduct was carried out with the appropriate criminal intent.

Having helped Congress write these provisions in 1986 and 1988, I can say confidently that 25 years ago, Congress contemplated that DEA would be engaged in money laundering investigations.

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1 comment:

Caryn said...

Hi Eric,
Reading your post, I just want to make sure I understand your position on the issue - are you saying that the DEA money laundering is a necessary evil that should be employed only to target high-level dealers, or do you think that this evil of complicity is inherent in Prohibition in general, meaning that it is one more reason why Prohibition should end?

My name is Caryn, and you may remember that I am a second year law student at Duke who interviewed you a couple of months ago for my note about crack cocaine sentencing. Currently my adviser is looking over a draft of it, and hopefully I will have something soon to send to you too!
The more research I do, the more convinced I am that drug prohibition must end.

I am thinking about trying to put together an event at Duke Law about drug legalization, perhaps with speakers from LEAP and other influential reform advocates (maybe you can take a trip down here in the spring?) What do you think?