From Slate Money: “The Business of Black Markets”

Summary

Against the Rules: The Big Short Companion – Slate Money Special

Episode: "The Business of Black Markets" (April 1, 2026)

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Episode Overview

This special episode, shared from Slate Money, features journalist Mariana Van Zeller, an expert on global black and gray markets, in conversation with host Felix Salmon. Van Zeller draws on two decades of immersive reporting—including her series Trafficked (National Geographic) and podcast The Hidden Third—to unpack the scope, operations, and incentives at work in the world’s shadow economies. The conversation illuminates the surprising scale, business parallels, and social complexities of black markets, particularly in the US and globally, while exploring the human stories behind illicit economies.

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Key Discussion Points & Insights

1. What Are Black and Gray Markets?

• Definition & Size:

  • Black markets typically evoke drugs and guns, but actually encompass a broader set of unauthorized activities—including untaxed street vendors and online transactions.
  • Gray markets often refer to untaxed but otherwise legal economic activity (side-of-the-road fruit seller, online sales, undeclared work).
  • Notable Stat: Up to 35% of the global economy comprises black and gray market activities ([04:10]).

• Global vs. US Scope:

  • The US is both the largest consumer of illegal drugs and a major site for unauthorized activity due to high demand ([07:16], [08:20]).

• Quote:

  • “Even if you discount the gray, the black markets alone, these affect every single one of us.” — Mariana Van Zeller [06:10]

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2. How Black Markets Mirror Legitimate Business

• Structure & Operations:

  • Major syndicates operate with complex organizations: HR departments, legal counsel, marketing strategies, and supply chains — all paralleling legal businesses ([07:16], [15:46]).
  • Example: The “King Coyote” operation uses WhatsApp for marketing, employs lawyers and HR, and relies heavily on word-of-mouth and customer experience ([09:17], [15:46]).

• Corporate Tactics, Illegally Applied:

  • Cartels track legal changes and exploit loopholes.
  • Marketing outreach utilizes informal channels:
    • “He would send out WhatsApp messages with his success rate and how many people he managed to get across… It’s all word of mouth.” — Mariana Van Zeller [09:17]

• Risk vs. Reward:

  • Compensation generally scales with risk, mirroring legal sector principles ([12:50]).
  • Example: Illegal gambling is USD 600B/yr globally—outpacing legal gambling, partly due to desire for anonymity and avoiding taxes ([13:34]).

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3. The Incentive Structure & Social Drivers

• Entry Into Black Markets:

  • The vast majority drawn in by lack of opportunity, not innate criminal intent ([11:07]).
  • “Most of what has shocked me has been the talent and the entrepreneurship… For the vast majority of people I speak to, they’re involved in these worlds because of the environments they grow up in or lack of opportunities.” — Mariana Van Zeller [11:07]

• Inequality as a Driver:

  • Persistent or rising inequality creates fertile ground for illicit economies ([33:18]).
  • Black and gray markets often function as economic “arbitrage” between desperately poor regions and wealthier ones ([32:55], [33:18]).

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4. Money Laundering & Corruption

• Mechanics of Laundering:

  • Laundering is “the most complicated part,” and cartels increasingly rely on transnational laundering networks—recently, Chinese launderers have become dominant, charging smaller commissions and moving money rapidly ([15:46], [30:29]).
  • “Making money isn’t the difficult part. Laundering that money is the hard part.” — Mariana Van Zeller [31:22]

• Corruption, Globally and in the US:

  • Corruption is a “multiplier”—critical for the functioning of sprawling illegal supply chains, from Mexico to the US ([26:02], [27:08]).
  • Police and officials in underpaid regions are vulnerable to being “bought,” increasing corruption levels and, therefore, black market activity ([28:42]).
  • “None of these… can operate without corruption and how corruption has fully seeped in into the United States.” — Mariana Van Zeller [26:02]
  • The US has become more corrupt over Van Zeller’s reporting career, shifting perceptions of the system’s integrity ([27:18]).

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5. Human Stories & Ethical Ambiguities

• Why Do Black Market Operators Talk to Journalists?

  • Three motivators: ego/pride in skill, impunity (little fear of prosecution), and a human need to be understood ([23:30]).
  • Van Zeller emphasizes nonjudgmental inquiry to uncover why individuals enter these worlds.

• Working Parallels:

  • Even illegal operators need “HR” for employee retention/trust, and employ complex schemes to pay and store large amounts of money (e.g., hiding cash in tires) ([15:46], [17:58]).

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6. Regulation, Enforcement, and (Im)possibility of Eradication

• The Limits of Law Enforcement:

  • Risk is ever-present but varies drastically by activity; dangers and punishment grow with the illicit nature and social harm ([22:36]).
  • Systemic fixes require changing economic incentives and reducing inequality and corruption ([28:42], [32:55]).

• Quote:

  • “As long as inequality exists, there’s going to be violence.” — Mariana Van Zeller [33:18]

• A Glimmer of Optimism:

  • Despite witnessing much suffering, Van Zeller maintains hope in human nature: the real problem is systemic, not personal ([31:40]).
  • “It’s the systems that are broken. If we can tackle those, we’ll—very cliché—but we’ll sort of create a better world.” — Mariana Van Zeller [31:40]

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Notable Quotes & Memorable Moments

• “We tend to think [cartels are] small and underground... but if you look at them, they operate very parallel to the legal economy.” — Mariana Van Zeller [07:16]

• “I’ve spoken to several [cartel lawyers] ... trying to figure out how they can get their product across to the United States.” — Mariana Van Zeller [08:33]

• “Illegal gambling has actually been growing even though it’s been legalized... sometimes you want to gamble and don’t want your loved ones to know.” — Mariana Van Zeller [13:34]

• “Corruption is king. And so they don’t really see a downside to talking to an international journalist.” — Mariana Van Zeller [23:30]

• “Making money isn’t the difficult part. Laundering that money is the hard part.” — Mariana Van Zeller [31:22]

• “The biggest problem of our time... is inequality. We have half the world’s population with less than $7 a day.” — Mariana Van Zeller [33:18]

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Timestamps for Key Segments

• [03:37] Introduction: Mariana Van Zeller & black market topic
• [04:10] Global scope of shadow economies
• [06:10] Everyday impact and hidden connections to black markets
• [07:16] Scale of US black/gray markets and business operations
• [09:17] Marketing tactics of cartels and coyotes
• [12:50] Risk premium and illegal gambling
• [13:34] Fake pharmaceuticals and cartel involvement
• [15:46] HR in illicit organizations and money laundering challenges
• [17:36] Illegal bookmaking and large-scale logistics
• [22:36] Law enforcement risk and journalistic practices
• [23:30] Motivations for black market participants to go on record
• [26:02] Corruption’s centrality in both emerging markets and the US
• [30:29] Money laundering and China’s new role
• [32:55] The structural roots: inequality and system failures

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Conclusions

The episode offers a rare, in-depth look at the underbelly of both global and American economies, revealing just how closely black markets mimic legitimate ones—and how integral factors like corruption, lack of opportunity, and inequality are to their continued existence. The conversation ends on a reflective note: hope in the resilience and basic humanity of individuals behind illegal markets, but a sobering assessment of the systemic changes needed to truly combat the proliferation of black and gray economies.

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Relevant Podcast:

• The Hidden Third by Mariana Van Zeller
• Slate Money hosted by Felix Salmon

(Find both on all major podcast platforms.)

Transcript

[Podcast Producer / Host]

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[Mariana Van Zeller]

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[Mariana Van Zeller]

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[Mariana Van Zeller]

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[Podcast Producer / Host]

it's against the Rules Producer LJ Here we're sharing an episode of Slate Money, a podcast hosted by Felix Salman, Emily Peck and Elizabeth Spires. Each week, they cover the biggest stories in business and finance. In this episode, Felix talks to a journalist, Mariana Van Zeller, about black markets. Black and gray markets make up 35% of the world economy, and yet we hardly know anything about them. Zeller has spent years talking to people who actually work in these markets. And the stuff that she's found out is pretty surprising. On Slate Money, you'll hear all about topics like how might the explosion of prediction markets change our world? Why did the CEO of McDonald's take such a tiny bite out of McDonald's new burger? And what will happen to the US economy if we get on Europe's bad side? If you liked this episode, then be sure to check out and follow Slate Money for more.

[Felix Salmon]

Hello, welcome to Money Talks from Slate Money. I'm Felix Salmon of Bloomberg, and this is the show where we talk to the most interesting people in the world about the most interesting subjects in the world. And this week I am reunited with my former colleague, Mariana Van Zeller. Mariana, welcome.

[Mariana Van Zeller]

Thank you, Felix. I'm happy to be here.

[Felix Salmon]

Marianna, tell us, who are you, what you do, and most importantly, what is your podcast?

[Mariana Van Zeller]

I have been covering black markets for about 20 years now. I have a show on National Geographic called Trafficked with Mariana Van Zeller. And I recently launched a podcast called the Hidden Third. It's called the Hidden Third because it's estimated 35% of the global economy are black and gray markets and yet we know very little about them.

[Felix Salmon]

I love this so much. So we are going to dive into exactly that. We're going to try and work out what is a black market, what are the incentives, what is the same as a normal market? Where do things go very, very different? You've been covering this, as you say, for decades now, so you are the expert on this and there aren't that many experts on this. So I'm very excited about this. It's all coming up on Money Talk. Marianna, let's start at the top. The Hidden Third. Speaking for myself, I don't think that one third of my annual expenditure goes on black or gray anything. I'd be surprised if it was 100th. So maybe I'm just uncommonly law abiding. But tell me, if it's a third of the global economy, then that means that for everyone like me who just spends on legal things, there's someone else who's almost entirely spending on illegal stuff. Is that right?

[Mariana Van Zeller]

Not so much about the expenditure, it's more about the market share. I mean, when we talk about black markets, we're essentially talking about drugs and guns and illegal products. But we're also talking about gray markets, which is, you know, the man selling fruit on the side of the street. The product that you're selling online and is not taxed. So these are tax revenue that you're not Getting and that ultimately is not being used to pay for better schools and hospitals and infrastructure and all that. And it's in that sense that economists estimate that it's around 30, 35% of the global economy.

[Felix Salmon]

If I'm just paying cash for something, there's a decent chance that that counts as, like, gray market.

[Mariana Van Zeller]

Yeah, it's a gray market because it's untaxed. Right. But you're saying how you are not the person buying these drugs or these illegal or, you know, taking part in this black market. Even if you discount the gr. The black markets alone, these affect every single one of us. You might not see it every day, but whether you're talking about drugs, which is, you know, estimated to be between 300 and 600 billion dollars a year, or scams, we all know people who've been affected by scams and victimized by scams. Illegal immigration. I mean, these are all subject matters that, you know, are on our headlines every day that have a huge impact on our lives. And again, I think we know very little about them.

[Felix Salmon]

So let me first start with where most of the slate money audience is, which is the United States, which is, you know, a very rich country with relatively well developed civil institutions and rule of law and that kind of stuff. Would it be fair to say that the black and gray markets are smaller than in the US Than they are globally, or not so much?

[Mariana Van Zeller]

No. I mean, we're the number one consumer of drugs in the world. Our drug business here in the United States alone brings in $150 billion a year. Again, I've spent time with the cartel, with the Sinaloa cartel in Mexico, and with sort of Coyote operations, a guy called the King Coyote, bringing in immigrants to the United States. And these are two operations that are very different but that essentially operate very much like the legal economy. Like actual legal businesses, they depend on marketing. For example, I will never forget the interview we did with King Coyote where he was talking about how he gains new clients, people wanting to come to the United States by marketing the work that he does. And he has lawyers in the United States. He has a human resources department. I mean, these are businesses that we tend to think, as, you know, small and underground and hidden in the deepest corners of our world, but that if you look at them, they operate. They're very parallel to the legal economy.

[Felix Salmon]

The lawyers in the United States who work for him, are they breaking the law? I feel like one of the things that lawyers do is they represent criminals. You have to be able to do that. Are they Doing anything illicit?

[Mariana Van Zeller]

Not exactly. They're looking at examining what is changing on a federal level, what is changing on a state level in terms of immigration laws, and how they can exploit the system, how they can exploit the loopholes to give advice to their clients, to the King Coyote, on how to bring people across the border. And the same happens with cartels. I mean, cartels in Mexico. I've spoken to several who've talked about hiring people, hiring lawyers in the United States for the exact same purposes, and experts. And obviously we haven't even spoken about corruption and what a big part that plays. But in trying to figure out how they can get their product across to the United States.

[Felix Salmon]

And like the marketing campaigns, what are they using? Some kind of social media? Yeah.

[Mariana Van Zeller]

It's so interesting because it's something that I never heard before. I interviewed King Coyote, but what they do is his company, and they were bringing thousands of people across from southern Mexico all the way to northern Mexico and into the United States. And what they're doing, what he did was that he would send out WhatsApp messages with sort of his success rate and how many people he made, he managed to get across. And then putting out this price points, and he says it's all word of mouth. Most of the marketing campaigns, it's not billboards outside or podcast ads, but it's word of mouth. If you give people a good, enjoyable experience, they're likely to share that contact to other people and other people want to use that service.

[Felix Salmon]

I feel like this is a big opportunity for Slate Money. We should just be selling podcast ads to criminals. Because that's not illegal, right? Like, we would be allowed to do that. And this is the third of the global economy. Like, there's money here.

[Mariana Van Zeller]

I'm not sure if they'd like all that attention. But, yeah, you know, traffic, where basically I get access to these hidden worlds around the world. You know, it's an expensive show to put together, and many times we've thought that we should actually be involved in those black markets. So we've been paying for this expensive show.

[Felix Salmon]

Seriously, like, you've been covering these markets for a long time. They are a massive part of the global economy. Obviously, there is a lot of demand for these services. How often do you find yourself thinking this is a really good product or service? You know, I would quite like to avail myself of it if it wasn't illegal.

[Mariana Van Zeller]

It's not so much about the product. So I don't think I would. You know, I've been to fentanyl labs in Sinaloa. And I've seen they put out some pretty pure product, but that's not the kind of stuff that I'm interested in.

[Felix Salmon]

That's contraindicated. I wouldn't, I wouldn't start like veiling yourself if that one.

[Mariana Van Zeller]

Or counterfeit money. I've spent time in Peru with a counterfeit money group of people that basically make $100 bills that look exactly like the real ones. Those I'd probably be more likely to bring back. But I think, I think most of what has shocked me in my decades of working black markets has been the talent and the entrepreneurship and the creativity behind many of people, these black market operators. And for the vast majority of people I speak to, they're involved in these worlds of crime not because they, you know, were born thinking, oh, that's what I want to be. I want to be a fentanyl chemist or a drug trafficker or a coyote. It's because of the environments they grow up in. You know, if you grow up in Sinalo and your, your whole family is part of the cartel, it's very likely you're going to be end up being part of the cartel or for lack of opportunities. I've interviewed, you know, dozens of people, if not hundreds, who sort of entered, who started selling drugs or became sicarios or, you know, became scammers because of lack of opportunities. And as long as we don't talk about the incentive, it's going to be very hard to change the outcome. And that's what's missing usually in the conversation about these black markets.

[Felix Salmon]

In a normal, like, legitimate market, you know, I get a creative job as, you know, let's say I'm a designer of a fake handbag or a hundred dollar bill or even a pharmaceutical product. And this is a skilled job and I get paid a wage for it and I pay my taxes on it. Tell me about, like, on the one hand, obviously I am breaking the law, so I'm running the risk of being like captured and prosecuted. How does the pay compare? Is it more or less than like someone who does that kind of thing legitimately?

[Mariana Van Zeller]

I think it depends usually on the risk. The higher the risk, and that's very similar with the legal economy as well. The higher the risk, the more generally you are paid. I mean, particularly in the world of black markets. You know, you mentioned gambling, for example, that has now become legalized in the majority of US states. It brings in, I think it's something like $200 billion a year. Illegal gambling has actually been growing even Though it's been legalized black market gambling, it brings in, I think it's something like $600 billion a year. And that's partly because people decide, you know, sometimes you want to g. You don't want your loved ones to know about it, your wife, your parents, whatever it is. So you prefer to do it in websites that people won't find out about it. You don't wanna get fired sometimes you don't want.

[Felix Salmon]

Yeah, you don't wanna get taxed on this huge amount of money you're winning on your gambling.

[Mariana Van Zeller]

That's exactly it. You don't wanna get taxed. So sometimes it's about tax incentives and wanting to make more money, but a lot of times it's also actual need. You spoke about fake pharmaceuticals. It's a huge, massive business. I think it's something like 20 million Americans or something that can't afford their life SA so they have to go online to pharmacies. Most of them are in India or to Mexico. They cross the border into Mexico to buy their pharmaceuticals. And yes, because they are much cheaper there. The problem is that there's not as much quality control. A lot of the pharmaceuticals being made in Mexico are actually made by the cartel. Little fact that most people don't know. We did a story about this for trafficked. And so there's little quality control. And it can end in, you know, a lot of harm, sometimes death. So incredibly dangerous as well.

[Felix Salmon]

So the drug cartels are really in the drug business writ large. Not just illegal drugs, but even pharmaceuticals.

[Mariana Van Zeller]

Yes, to some extent. In our reporting we realized, and actually the LA Times did incredible investigative reporting about this, how they started analyzing a lot of the medications that are sold at pharmacies on the border in Mexico and realized that some of them were tainted with fentanyl and meth and crazy other products. And so we started investigating this and trying to understand why this was happening. And essentially, I mean, wherever the cartel figures out that they can make some money, they'll be in that business, you know, whether it's illegal fishing or drugs, as we know, immigration, and in this case, fake pharmaceuticals. So what we found out was that the cartels had figured out how they could create their own products, hire actual chemists to create products. And sometimes because of lack of quality control, they'd get tainted with other illegal products and then sell them and even force pharmacies to sell their. Their products so they can make money from them.

[Felix Salmon]

Tell me about like the HR operation. I'm fascinated by this. Like, these are large organizations with large numbers of employees, and presumably a lot of those employees are just, like, on payroll and need to get paid a certain amount of money every two weeks or whatever, just like any normal people. Like, how do they get paid? And do they then need to start worrying about, how do I launder this and make it legitimate?

[Mariana Van Zeller]

Mm, absolutely. The laundering is always the most complicated part. One of the things that I remember King Coyote telling us was why HR was important. Why was it important to make sure that your people are working for you in these sort of large organizations, why you need to keep them happy and why you need to keep your clients happy. And it's all, again, it's word of mouth. Right. And if, as a client, if you're not treating them well, if they're not providing you a good experience of bringing them across the US or providing them the drugs that ultimately won't kill them, you're keeping your clients happy, and that's good. If you're not treating well your employees, there's a high risk. Trust is incredibly important because there are no court systems. You know, you don't have the legal system. But also, you know, threats are everywhere in black markets.

[Felix Salmon]

Do you find yourself very often or ever talking to people who had the choice between like, I could do this illegally and make more money, or I could do it legally and make less money and choose the illegal option?

[Mariana Van Zeller]

Not very often. More often than not, it is really lack of opportunity and lack of choice, but that's not always. I interviewed for my podcast, the bookie involved in Yotani scandal. I'm not sure if you remember that big scandal.

[Felix Salmon]

Yeah, we talked about it on the show. He was, like, stealing a bunch of money from Shohei Ohtani and gambling interpreter.

[Mariana Van Zeller]

That's right. Through a bookie called Matt Boyer, who we interviewed on the podcast. And this is a guy who's incredibly smart, who had ob a ton of other opportunities, but who decided. And in fact, he was working legally before. And then he realized that this actually, he loved doing this. He wanted to run an illegal booking operation. It became massive. He was moving, I think it was something like $40 million. Every Monday, he had to figure out how to get that money to the better. And it's insane. $40 million. And all of this had to be done sort of under the COVID Right. It wasn't legal money.

[Felix Salmon]

How does he do it? I mean, he's not paying them in cash. Right.

[Mariana Van Zeller]

He had couriers. He had dozens, if not of people working for him around the country. It was a combination of cash and Money transfers and, you know, venmos and all of it. It's insanity. I would not be able to sleep at night if I had much responsibility.

[Felix Salmon]

So he is another one of these people who needs a whole, like, HR operation.

[Mariana Van Zeller]

Right. And also where to store the money. Right. He also was paying, he said, when he was arrested, when the FBI came looking for him, he had money stuffed everywhere, including. He would pay this guy in his town, where he lives, to hide millions of dollars in cash or hundreds of thousands of dollars of cash in tires. It was like this tire shop and, yeah, basement under his mattress, everywhere.

[Felix Salmon]

It strikes me that if I'm struggling with opening up legitimate bank accounts, not raising any red flags with the banking system, I'm hiding cash in tires and all of this kind of stuff. In a weird way, if I'm just owed a million dollars by some rich gambler guy in Los Angeles, everyone's asset is someone else's liability. You know, if I put a million dollars in the bank, that means I'm owed a million dollars by the bank. That's problematic. If I'm owed a million dollars by some rich guy, then that's still my asset. Like, I don't need to realize that asset. I don't need to extract that money from him. If I ever want to pay for something, I can always just go up to that guy and be like, pay this for me, and that will discharge your debt. Maybe if I'm in this line of business, having a bunch of people who owe me money in town, those are all assets. Those are all, like, accounts payable, you know?

[Mariana Van Zeller]

Right.

[Felix Salmon]

And I can use those assets to pay for things. I can be like, if you pay for this, then that debt is expunged.

[Mariana Van Zeller]

Yeah, in a sense, that is true. I mean, it's a little bit like how the cartel operates in the United States. They have their distributors here in the United States. And. And I interviewed a guy called El Gringo, an American guy, doesn't speak a word of Spanish. He's one of the main distributors for the Sinalo cartel here in the US and one of the things the cartel does sends him drugs. It's not as if he can say, I want X amount of fentanyl or meth. It's whatever the cartel has. And they always send way more than the guy can pay for. And the idea is that you keep somebody on the hook. So that guy, he owes money to the cartel, so you're going to keep him on the hook and he's going to keep working for the cartel because he's always going to owe money to the cartel. They're always offering him more product than he is able to pay for. So you're always keeping that person on the hook, which is a very classic tactic that the cartel has.

[Felix Salmon]

We need to take a very quick break to hear from some very legal companies that are not in the black market at all. But when we come back from these ads, we will talk more about all of the violence and crime that is part of this market.

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[Felix Salmon]

about the way that people in these industries think about the risk of getting caught by law enforcement. Is this like something they're constantly worried about? Is there always like this cat and mouse game or is it something that they just kind of live their lives and then one day there's a knock on the door?

[Mariana Van Zeller]

It depends on the level of risk and the type of black market, right? If you're dealing fentanyl, you're going to be sentenced and spend a long time in prison, right? But if you're putting in an illegal bet in or, you know, the likelihood of you actually spending time in prison is very low. So it depends. But I would say that's always on the back of your mind, which is why every single person we interview, we need to make sure that we're hiding their identity. When we're talking about some of these black markets, at least on camera and not on the podcast, but on the show, we're hiding their identity. We're making sure that we're not disclosing the location. I mean, we spend months, sometimes even years convincing people to talk to us. It's the hardest part of my job. And when they do, we have to make sure that we're protecting their identities because obviously they've become our sources. It's our job as journalists to protect our sources.

[Felix Salmon]

So to ask the obvious question, like,

[Mariana Van Zeller]

why do they talk to us?

[Felix Salmon]

Do they talk to you?

[Mariana Van Zeller]

Yeah, I think three main reasons. It's ego. A lot of these people work in these black markets. They're the best counterfeiters and traffickers and scammers. And sometimes their families don't even know what they do. And they have an opportunity behind a mask to sort of boast about what they're so good at doing. I think it's impunity. In a lot of these places in the world, corruption is king. And so they don't really see a downside to talking to an international journalist that comes in from National Geographic and wants to talk to them. And then I think the most important reason is a very human characteristic that we all share of wanting to be understood. And I think I give people that opportunity. I tell them, I'm here not to judge you. I'm here to try to understand why you do what you do. And I think that goes a long way. And it goes back to the incentives. I'm trying to understand when I'm doing all these stories, the human side of it. I'm trying to get people to connect with the folks, consider the worst of the worst, right. The people operating these black markets, because only by understanding what are the incentives and why they join and why they work on operating these black markets will we be able to prevent these black markets from existing. And I think sometimes we keep tackling these problems with law enforcement and building walls and not actually trying to understand the root cause behind all these black markets.

[Felix Salmon]

When you talk about the impunity, which countries in the world would you say, ah, yeah, like, that is a place where you can operate an illegal operation and obviously have impunity. You're never going to need to worry about that.

[Mariana Van Zeller]

That's what black market operators are really good at. Right. They're trying to make as much money as they can and lower the risk. And so they're always going to try to find a place where they can do that and maximize their profit. And we filmed, and I've done reporting in Myanmar, for example, where there are these massive scam compounds with tens of thousands of people working day and night to scam Americans and Europeans and Western folks that have more money and that are more likely to hand over their money. And these. What was shocking was finding out that a lot of these people that are there are forced labor. They go, they apply for jobs that they think they're going to be working in a legal job. And instead when they get there, they take away their passport. The bosses, the owners of these compounds, scam compounds, take away their passports, beat them, torture them, electric shocks. It's horrific what's happening there, and it's complete and total impunity. We actually had the opportunity to go inside and visit one of these scam cities.

[Felix Salmon]

Is that part of the junta is to the profits from that flow up to the government?

[Mariana Van Zeller]

Yeah. There are several different military groups in the area that are fighting for control of this area against the junta, the military junta. And they're making a lot of money also from these compound. So it's not in their interest to make sure that they're closed down. And in Mexico, the same thing. I mean, I've spent more time in Sinaloa than I think anywhere else in the world outside of the United States. As a reporter, you know, there's enormous corruption and one of the biggest problems. We did a story for Traffic this last season called Cartel usa, where we sort of looked at what the presence of the cartel in the United States. And I think most people just, they think cartel, they think violence, they think drugs, but they don't understand how none of these. They can't operate without corruption and how corruption has fully seeped in into the United States. So I spoke to law enforcement agents, I spoke to drug distributors, and every single one of them in every single interview I did pointed to corruption as being sort of the multiplier. And without it, they wouldn't be able to operate at the scale that they do.

[Felix Salmon]

You've been covering this, as we've mentioned, for a while. Over the course of your career, would you say that the United States has become significantly, visibly more corrupt?

[Mariana Van Zeller]

Yes. It's not me saying it's law enforcement people, folks that I've been talking throughout the years. I mean, in this case particularly, we started our investigation with a woman who was tortured and killed inside a cabin in Georgia in a little town in the middle of nowhere in the woods. And again, I think those people think drugs and cartels, violence. They think big cities, they're everywhere. And they're only allowed to operate because of corruption and the amount of money that is being paid to local officials, to law enforcement, even to federal agents. I've worked extensively on the border. I've seen fentanyl. I've seen a woman crossing into the United States with 5 kilos of fentanyl. And we did a story about how a lot of the fentanyl that comes across. I think you know this well, too, Felix doesn't come through, you know, the Pacific in fishing boats. The majority of the drugs that come into the United States come through official ports of entry, and a lot of it is done through corruption.

[Felix Salmon]

If I, you know, put you in charge of America for a few weeks, what would be the main sort of policy response that you would try and implement in order to reduce the amount of corruption in this country?

[Mariana Van Zeller]

This is why I'm not running for president.

[Felix Salmon]

All right, all right, let me rephrase the question. Is there a good example important than you can think of? Maybe somewhere else in the world where the degree of corruption has come down significantly over the years you've been reporting about this?

[Mariana Van Zeller]

Yeah, absolutely. If you look around the world, places where there is more corruption is places where police force isn't well paid, government officials aren't well paid. Right. So there's a bigger incentive. If you're risking your life as a police officer every day, going out on the streets and you're paying pennies, there's an enormous. And then suddenly, you know, a guy, a drug trafficker, comes up and says, look, I'll pay you this amount more, which is, you know, whatever amount you get paid in a year or more for you to work with us, the incentive is there. It's all about changing the incentives, giving people the pay that they deserve and, yeah, making sure that civil servants and law enforcement are paid well and that there is no incentive there for them to turn to the black market ultimately.

[Felix Salmon]

One of my favorite ever episodes of Slate Money was when we had Yuan Yuan ang on talking about the history of corruption in China and how it, like, kind of helped a little bit with development for a while until it became harmful. And then there was this big corruption crackdown. I think a similar story can be told about Indonesia, where, you know, it's useful until it's harmful. Tell me a little bit about China though, I'm sure just such a sort of superpower in so much of the global economy right now. Certainly we had a great interview quite recently with Joe Salama about money laundering and they seem to be like the number one source of demand for dollars in the world. Like they will launder your dollars for much less than anyone else because they want those dollars for various reasons. Do you think that the, the rise of China as a part, as its share of the global economy has coincided with rise in the black and gray markets?

[Mariana Van Zeller]

Yes, it's interesting on the ground, you know, because I've been reporting on this for so many years. Five, six years ago I started hearing about Chinese money launderers and before the cartel would figure out other ways of laundering their money. And suddenly it seems like it's not only here in the United States. I've heard it's in the UK and in Europe, all around where these operations were with Chinese folks ready to launder your money and that it's become much easier, they take a much smaller share and that they're everywhere. So yeah, I mean, it's usually the cog in the system, right? It's the biggest headache. I think for many of these black market operators. Making money, as they say, isn't the difficult part. Laundering that money is the hard part. So if you have a country like China and folks here in the United States from China ready to launder that money and making it easy and fast, that's only gonna grow. Whatever black market you're involved in, done.

[Felix Salmon]

Are you relatively sort of, I don't know, realistic, pessimistic, I don't know what the word is like, you've been doing this for a long time. It sounds like it's only really got worse over that time. Do you ever feel like you're just chronicling the slow decline of civilization here?

[Mariana Van Zeller]

The more I report on these black markets, the more I understand that it's the systems that are broken. It's not so much human beings. When I'm Talking to a 16 year old kid who travels through the mountains of Peru with 30 kilos of cocaine on his back because he wants to one day be able to afford college to become a dentist. This is a story of a kid that we met and interviewed, you realize that it's not. This kid is not doing this because he wants to. He's doing this because he has no alternatives and that these kids and these mothers that I've spoken to and People. All around the world there are people, human beings just like you and I. They have goals and aspirations. They're our neighbors, they're mothers, they're fathers. And it's because of lack of opportunities they end up. They do. And so that has given me sort of enormous hope in humanity, knowing that even when I'm meeting face to face, these sicarios and traffickers and scammers, that they can still find humanity and that there is still redemption possible there. But it's the systems that are broken. And so if we can tackle those, then, you know, will very cliche, but we'll sort of create a better world. And so that's given me a lot of optimism in humanity in the world.

[Felix Salmon]

Yeah, I'm probably taking the other side of that one because it strikes me that what you're really talking about is inequality, where there's a massive difference between the poverty in somewhere like Peru or Myanmar and the riches that you can find in the UK or the US Then there will be criminals who try to sort of arbitrage that and take advantage of. And so long as inequality is going up, we're not going to make a lot of progress on this front.

[Mariana Van Zeller]

I 100% agree. I know, but again, it's the system, right? It's what's put in place. It's not the human beings. Biggest problem of our time, I really believe, is inequality. We have half of the world's population with less than $7 a day and that's just unattainable. As long as there's inequality, there's going to be violence.

[Felix Salmon]

Marianne Van Zelle, thanks so much for coming on Money Talks. It's slightly pessimistic conclusion, but a fascinating conversation all the same. Remind us of your podcast and presumably we can find it wherever you get your podcast. As they always say.

[Mariana Van Zeller]

I'm gonna do my podcast voice you can watch on YouTube. Marianna Van Zeller or listen to the Hidden Third wherever you get your podcast.

[Felix Salmon]

Thank you so much for coming on. Thank you so much to Justin and Molly and Jayna rocks for producing and we will be back on Saturday with a regular episode of Sleep Money.

[Podcast Producer / Host]

This is an iHeart podcast. Guaranteed Human.