The 1972 US Coup Against Australia

Hot Money and the Politics of Debt

RT Naylor

McGill-Queens University Press (2004)

Book Review

Hot Money is about the trillions of dollars of global financial activity that is never recorded in official economic statistics. Corporate money laundering of illegal narcotics profits is the form of “hot money” that gets the most publicity. However according to Naylor, it accounts for a relatively small proportion of “hot money” percolating through offshore banks and dummy corporations.

Most “hot money” starts out as funds generated via “legitimate” business which rich elites sebd offshore to avoid taxes or in anticipation of economic calamity or regime change. All the world’s most ruthless dictators stashed funds in Swiss banks or similar financial havens prior to being deposed.

A sizeable chunk of hot money is generated from other illegal enterprises, such as gun running, illegal arms deals, prostitution, phony charities and religious groups (eg Reverend Moon’s Unification Church and L Ron Hubbard’s Church of Scientology) and government agencies (eg CIA) who use “hot money” to finance coups and insurgencies.

For me, the high point of Hot Money  is the excellent history Naylor provides of the CIA role in the world heroin and cocaine trade, especially their move to make Afghanistan the major global supplier of heroin.

Nalylor also provides a detailed history about the role of the Vatican Bank as a “hot money” center, the rise and fall of Propaganda Due (P2), a secret collaboration between the CIA, Mafia and right wing Masonic lodges that infiltrated all aspects of Italian public life in the 1970s; the role of Nazi war criminals Klaus Barbie and Josef Mengele in setting up Latin American death squads and cocaine networks; the rise and fall of the two biggest CIA banks, Australia’s Nugan Hand Bank and the Bank of Commerce and Credit International;  and the importance of “hot money” in the Iran Contra scandal, in which the Reagan administration illegally sold weapons to Iran to finance the Contra war against Nicaragua.

The most shocking chapter describes the role of the Nugan Hand Bank in funding a bloodless coup US Naval Intelligence carried out against Australia in 1972 – to remove a prime minister whose political views were inconsistent with US interests. Most Americans are totally unaware of this heinous attack against a close US ally. I’ve only learned of it since moving to New Zealand (Australia is New Zealand’s closest neighbor).

An Insider’s View of Drug Smuggling

Smuggler: Roger Reaves a Memoir

by Roger Reaves

Marrie J Reaves Publishing (2016)

Book Review

Smuggler is an extremely unusual memoir by a 73 year old American who is currently serving a life sentence in Australia for drug smuggling. Written over fifteen years, it’s a highly detailed, journal-like memoir painting the author’s journey from excruciating rural poverty to high rolling international drug smuggler.

The reader comes away with the clear sense that despite government efforts to portray Reaves as a dangerous blood thirsty king pin, he was actually a lowly middleman who was regularly cheated and manipulated by the real king pins who engaged his services. While Reeves was highly successful (bringing in millions a month) during the first decade and a half of his career, a pattern emerged in which his clients routinely weasled out of paying him, shortchanged him on the quanity and/or quality of drugs they asked him to traffic, and/or provided him with mechanically faulty and dangerous aircraft and boats. Towards the end of his career, some were actively colluding with the DEA and FBI to entrap him.

Owing to the illegal nature of marijuana and cocaine trafficking a person has no comeback – except murder or serious physical injury – if a colleague cheats them. As the highly personal memoir makes clear, it wasn’t in Reaves’s nature to engage in lethal retaliation. This, perhaps, explains his failure to rise to the ranks of vicious psychopaths like Pablo Escobar.

For me the most interesting part of the book is the section where Reaves talks about his relationship with Barry Seal and the guaranteed “no-interception” cocaine delivery operation he had going at the Mena Airport – with the active approval and support of Arkansas governor Bill Clinton and Vice President George Herbert Walker Bush.

According to Reaves, there were only two delivery points in the US where traffickers could unload a shipment with absolute guarantee that neither Customs nor the DEA would bust them. Mena was one of them.

Reaves believes strongly that the War on Drugs is a racket perpetuated mainly for the benefit of Wall Street and illegal CIA military interventions. He advocates for the US and its allies to follow the example of Portugal, which has decriminalized all drugs. In Portugal, where possession of three grams of any drug is treated as a spot fine, crime rates have plummeted since the policy was implement in 2001 (see The Cato Institute and the Drug War).