OV: If you are looking at the true pioneers who started much of the cocaine trade in South America, these were drug traffickers from places like Bolivia, which had a clear monopoly of coca production, and also at the people that formed the cartels in the 1980′s like the Medellin cartel or the Cali cartel and other groups, I think they were not aware of the way things would eventually turn out.
But the other element, the state element, which made it part of their imperial interests to allow the drug trade to flourish, I think they perhaps had some sense – just looking at things in retrospective, of course – that this would be a very profitable business within that arrangement.
At the time of the 1980s in Latin America, it was pretty much seen as a means to fund operations, and at that time these were essentially counter-insurgency operations in the context of the Cold War. There was no real big ambition to say “We will create the drug trade because it is a very large business opportunity.” I think it just became that because it was something that was of convenience – and that’s exactly what we see now in how the banks operate today: it’s of financial convenience, why get rid of it? Out of these historical patterns it has become what it has become, but for different reasons.
I don’t think that even Pablo Escobar would have imagined just how enormous the global drug trade would become. They were largely driven by self-interests and their own profits. But then the state made it much bigger and made it into a regional institutionalized phenomenon that we see to this day. And we can see also how the state in parts of South America, like Bolivia with the 1980 Cocaine Coup as it was known, and also the rampant institutionalization of cocaine in Colombia, has become very much part of this arrangement.
But then again, it would not have been possible without the imperial hand of particular the United States and the intelligence agencies. There we have that imperial commodity and imperial connection as well. They didn’t work alone, in all these criminal elements, of course, there was an imperial hand in much of all of this, but why it happened, I think, is the matter of debate.
LS: Catherine Austin Fitts, a former investment banker from Wall Street, shared this observation once with me:
Essentially, I would say the governments run the drug trade, but they’re not the ultimate power, they’re just one part, if you will, of managing the operations. Nobody can run a drug business, unless
the banks will do their transactions and handle their money. If you want to understand who controls the drug trade in a place, you need to ask yourself who is it that has to accept to manage the transactions and to manage the capital, and that will lead you to the answer who’s in control. 
What are your thoughts on this essential equation?
OV: Going back to my emphasis on the state, coming from a political science background, this is what some criminologists would say, that this is state-organized crime, and the emphasis is the state. And again if we go back to the global history of the drug trade, this isn’t something new. If we look at piracy, for example, that was another form of state-organized crime sanctioned by the state because it served very similar means as the drug capital of today serves as well.
So yes, the state is very much involved in managing it but it cannot do it alone. You have the US Drug Enforcement Administration, for example, which is officially the law enforcement department of the US state in charge of combating the drugs; and you also have other intelligence agencies like the CIA [Central Intelligence Agency] that are involved in fighting drugs, but also, as I have seen in my studies, actually allowing much of the drug and financial operations to continue.
We saw recently similar things unfolding in Mexico with the operation “Fast and Furious”, where CIA arms were making their way to drug cartels in Mexico. We can draw our own conclusions, but what we do know is that the state is central to understanding these operations, involving governments, their agencies, and banks fulfilling a role.
LS: How does the money laundering work and where does the money primarily go to?
OV: We know that the estimated value of the global drug trade – and this is also debated by analysts – is worth something between US$300 billion to $500 billion a year. Half of that, something between $250-$300 billion and over actually goes to the United States. So what does this say if you use that imperial political economy approach I’ve talked about? It means that the imperial center, the financial center, is getting the most, and so it is in no interest for any great power (or state) to stop this if great amounts of the profits are flowing to the imperial center.
What I find very interesting and very valuable are the contemporary events that are unfolding right now, the reports that even come out in the mainstream media about Citigroup and other very well-known money laundering banks being caught out laundering drug money for drug traffickers across South America and in Mexico as well, as the so-called war on drugs is unfolding.
The global financial crisis is another example, because the United Nations Office on Drugs and Crime came out and said it was thanks to the global drug trade that the financial system was kept afloat, where all this money was being pumped in from were from key imperial financial centers like New York, like London and Switzerland, and so on. In this case, money laundering is simply beyond again that criminology framework; it does involve that imperial state perspective, and I think that’s the way it remains because of these benefits.
LS: Do you think that “lax policies” are responsible for the fact that large multi-national banks are laundering drug profits? 
OV: If you think again about the criminalized status of drugs, it’s criminalized in society, but when it comes to the economic and financial sector, which should be criminalized, it is actually decriminalized. So we have some kind of contradiction and paradox where it would be great if it would be criminalized, but when it comes to the financial sector, it is actually fine – it’s lax, it’s unregulated, and we know that the US Federal Reserve, for example, can monitor any deposit over $10,000, so it’s not that they don’t know – they know what’s going on.
It rolls back to your previous question. It continues to benefit the imperial global architecture, particular in the West, and so it becomes a lax policy approach towards these money laundering banks because they wouldn’t have it any other way, there is much resistance to it.
Since Barack Obama came to power in 2008 and the financial crisis took hold thereafter, we’ve heard a lot of promises from Western leaders that they would get tough and so on, yet today we see that nothing much has changed. We’ve had now this episode with Barclays in the UK and the price fixing [of the important London Interbank Offered Rate] – this goes on.
Of course, they prefer to have this contradiction and paradox in place, because this is in fact what is allowing the drug profits to come in. If the government would take this problem seriously and would actually do something about these money-laundering banks, we would see a real effort to fight the drug problem, but that is not going to happen any time soon.