Drugs money worth billions of dollars kept the financial system afloat at the height of the global crisis, the United Nations’ drugs and crime tsar has told the Observer.

Antonio Maria Costa, head of the UN Office on Drugs and Crime, said he has seen evidence that the proceeds of organised crime were “the only liquid investment capital” available to some banks on the brink of collapse last year. He said that a majority of the $352bn (£216bn) of drugs profits was absorbed into the economic system as a result.

Presented with a crime, it is reasonable to ask who benefits from it. Material gain is a motive, after all. This much is familiar to anyone who watches crime drama or reads crime novels. Perhaps, then we should apply this principle to the millions of crimes that together constitute what the American government calls the War on Drugs.

Undercover American narcotics agents have laundered or smuggled millions of dollars in drug proceeds as part of Washington’s expanding role in Mexico’s fight against drug cartels, according to current and former federal law enforcement officials.

The high-risk activities raise delicate questions about the agency’s effectiveness in bringing down drug kingpins, underscore diplomatic concerns about Mexican sovereignty, and blur the line between surveillance and facilitating crime.

In what will likely be seen as something of a Freudian slip by the US Secretary of State, Hillary Clinton said recently in a Mexican news interview that the United States cannot legalize drugs as a means of fighting the black market because “there is just too much money in it.”

The smugglers had bought the DC-9 with laundered funds they transferred through two of the biggest banks in the U.S.: Wachovia Corp. and Bank of America Corp., Bloomberg Markets magazine reports in its August 2010 issue.

This was no isolated incident. Wachovia, it turns out, had made a habit of helping move money for Mexican drug smugglers. Wells Fargo & Co., which bought Wachovia in 2008, has admitted in court that its unit failed to monitor and report suspected money laundering by narcotics traffickers – including the cash used to buy four planes that shipped a total of 22 tons of cocaine.