01 May Drug Trafficking and the Panama Papers

Made in Panama stamp.Addiction is a huge epidemic in America, right now, just as it is in many places around the world. The rates of incredibly dangerous and highly illicit substance abuse continues to climb, and is affecting the lives of every demographic, regardless of class, race, age, or gender. However, this problem doesn’t just come from nowhere. The global drug trafficking industry is enormous, raking in an annual revenue of $400 billion, which is higher than the nominal GDP of all but the top 26 richest countries in the world. To put this in perspective, you could end world hunger twice over with the profits that are made in the illegal drug industry. So, why is this industry allowed to persists, and how does it remain thriving in heavily industrialized countries that should be able to eliminate this issue, financially? One huge recent story gives us a glimpse into how this industry is financed…


The Panama Papers


At the beginning of April, the realizations that were permitted by the Panama Papers, which were a huge series of documents that were leaked about the business dealings of the financial firm, Mossack Fonseca, exposed a multitude of illegal practices that are permitted through the use of shell corporations which are established in regions with little financial oversight. This practice has allowed for companies to continue supplying Syria with weapons and fuel, finances to be moved through the sex trafficking industry, and, most of all, companies and individuals to evade taxes. The Panama Papers is, currently, the largest information leak in digital history, and a testament to the power of investigative journalism.


How shell corporations fuel drug trade


One huge realization that the Panama Papers showed the world was one that was already heavily suspected. Firms like this are able to allow the drug trafficking industry to launder their finances through “shell corporations,” which are empty companies that provide no services, and only exist to move money through. Essentially, individuals and businesses that push illegal substances around the world are able to hide this fact by masking their finances in these shell corporations.


“El Chapo” Guzman


One huge example of the link between offshore financial firms, like Mossack Fonseca, and the drug trafficking industry is through the connections with Mexican drug lord “El Chapo,” who is also known as Joaquin Guzman. The Panama Papers have exposed two huge parts of El Chapo’s drug trafficking organization when it exposed the money laundering activities of Marllory Chacon Rossell, a major money launderer, and Jorge Milton Cifuentes, a drug lord who helps distribute El Chapo’s product. Despite this information, Rossell had already been arrested on drug trafficking charges, but may face further prosecution because of these realizations.

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