Back in October 2011, the Obama administration made a startling announcement – the US government had uncovered a conspiracy initiated by the Iranian government to assassinate officials of the Saudi Arabian government on US soil. Their method of choice? Paying killers from the Mexican drug cartels to carry out killings of the Saudi ambassador to the United States; an operation that would have taken the lives of innocent civilians in the immediate vicinity. According to the US government’s accounts, the culprits were also planning to attack the Israeli embassy in Washington, as well as the Israeli and Saudi embassies in Argentina. The Attorney General of the US, Eric Holder, assured the public that swift action would be taken to catch the perpetrators of this murderous conspiracy, and prevent any loss of life or damage to property.

Here was incontrovertible evidence, so the US administration said, of the murderous intent of the Iranian regime. Another reason why the US war drive against Iran should be welcomed in the court of public opinion. Here was another example of the sinister, evil machinations of the Iranian regime, and the Obama administration’s tireless quest to oppose this evil must be supported. A terrible atrocity was averted by the ever-vigilant US authorities – or perhaps not. Even the corporate-owned press began to cast doubts on the official version of events. The Qods Force of the Islamic Revolutionary Guard Corps, an elite fighting force in Iran, had plotted with failed used-car salesman Iranian-American Mansoor Arbabsiar, to blow up the Saudi embassy in Washington, using paid hitmen from Mexican drug cartels. As veteran commentator Glenn Greenwald stated in an opinion piece written the day after the revelations, “the most difficult challenge in writing about the Iranian Terror Plot unveiled yesterday is to take it seriously enough to analyse it.” Bands of terrifying Mexican drug cartel killers let loose in the United States to kill Saudi Arabian government personnel is something more akin to a Hollywood production than to an actual criminal plot.

The details of the plot become murkier when it is revealed that the plot, such as it is, was agreed between Arbabsiar and a member of the Mexican drug cartel Los Zetas, who also just happened to be an undercover agent of the Drug Enforcement Agency (DEA). In a convoluted case that is sounding more like entrapment by the minute, the undercover DEA informant and Arbabsiar discussed payment options for the contract killing of the Saudi ambassador. The only evidence that the US Attorney’s office provided was the testimony of the undercover DEA agent. Gareth Porter covers the case in some detail, set in the context of ever-increasing use of entrapment tactics by DEA and Federal Bureau of Investigations (FBI) officers especially in terrorism-related cases. The FBI has been announcing in recent years that it foiled several terrorist plots – after confirming that the alleged perpetrators were undercover FBI agents targeting the Islamic communities in various cities. Various FBI sting operations have entraped members of the already heavily-surveilled and intimidated Muslim communities in the United States.

But there is one aspect that requires further examination. The US authorities, upon announcing the discovery of this alleged conspiracy, moved determinedly to construct their case, publicise the findings and pursue the alleged culprits. The motivation of the US legal authorities to catch people guilty of serious crimes, especially using financial means to incite terrorism, is beyond reproach – isn’t it? As Glenn Greenwald wrote, the US government made clear their determination to hold those responsible to account. So the US federal agencies pursue those who would conspire to commit murder, especially cracking down on the Mexican drug cartels, known for their violence and reckless disregard for human life, right?

Well that is interesting, because back in April 2011, six months before the Iran bomb plot, Ed Vulliamy ran a story in The Observer newspaper (republished in the Guardian in Britain) detailing how the murderous Mexican drug cartels laundered billions of dollars through a large US bank. When an investigator, Martin Woods, an employee of the US bank, raised this issue to the proper authorities, he was ignored, his evidence sidelined, and his integrity attacked by the highest levels of management of the US bank.

Wachovia, currently absorbed by the Well Fargo bank, had been laundering billions of dollars through various methods – wire transfers, traveler’s cheques and cash shipments. The money was laundered through intermediaries on behalf of Mexican drug cartels, criminal enterprises that make their money through narco-trafficking and maintain their businesses through murder, torture and thuggery. Over a period of 22 months, the DEA, the Internal Revenue Service and other US agencies amassed evidence that Wachovia was the conduit for the drug money handled by the Mexican criminal syndicates. Three hundred and seventy eight billion dollars was funneled through Wachovia to launder the ill-gotten proceeds of the Mexican drug trade.

What is even more surprising is that while criminal charges were brought against the Wachovia bank, the case never saw the light of day. Wachovia had violated the banking regulations systematically through a prolonged period, washing billions of dollars worth of drug money that had been obtained at the cost of lives, and Wachovia simply paid an amount in compensation through the district court in Miami. The condition was that Wachovia had to promise they would not violate banking laws – in other words, simply promise not to do anything naughty again, and the prosecution would be deferred.

Martin Woods, an employee of Wachovia located in London, began to raise concerns about financial irregularities from his London office. The bank’s directors simply ignored the increasing evidence of financial impropriety, and Woods own position in the bank was threatened. Woods was basically hung out to dry for pointing out the failure of his superiors to apply anti-money laundering procedures. In March 2010, the senior vice-president of Wachovia, Douglas Edwards, signed off on a settlement where the bank admitted its role in the money-laundering, but agreed to abide by the law for one year after which the charges would be dropped – the deferred prosecution scenario.

The money laundering case at Wachovia bank raises serious questions about the lack of regulatory governance over the entire financial system. How is it possible for banks to launder billions of dollars with such impunity for so long? Enormous profits from the narco-trafficking industry are based on the suffering, broken lives and misery of millions of drug addicts. Governments have not only become unwilling to apply basic financial regulation when the big banks and multinational firms are wasting billions, but are actively compliant in creating a climate where corporate criminality is encouraged. Monopoly capitalism, arising from the late nineteenth and early twentieth centuries, has transformed into monopoly-finance capital, where making money from money is more important and prominent than creating wealth through productive industrial or manufacturing activity. The financialization of capital, as John Bellamy Foster puts it, has created the conditions where dominant finance-capital, owning enormous amounts of financial assets, and leaving the stagnation-afflicted economy to its own devices, is the overwhelming feature of this latest state of decaying, imperialist capitalism.

Even the New York Times, the mouthpiece of the American ruling class, admitted in a recent article that the Securities and Exchange Commission (SEC), the main body responsible for investigating corporate criminality, regularly grants legal waivers and exemptions for the largest firms to escape punishment and liability. Goldman Sachs, JP Morgan, Bank of America and other leading financial institutions would not have been able to get away with billions in profits and bailouts were it not for the machinations of the SEC to shield bankers and executives from criminal prosecution. The corrupt and incestuous relationship between the large Wall Street firms and the regulatory authorities is all the more reason to support the 99 percent, occupy wall street, and sweep away this entire system of criminality that is responsible for the orgy of speculation and graft that makes economic crashes, like the 2008 financial collapse, unavoidable.