Chapter Fifteen

 

THE COKE CONNECTION

 

 

 

 

"Drug money freely mingles with the life force of the world economy,

like a virus in the bloodstream."

 

Time Magazine

 

 

 

 

 

The link between money and drugs is absolute and indisputable.

 

The bulk of dirty money spinning around the world comes from the illicit drugs trade and the whopping success of international drug traffickers is a direct consequence of their ability to launder their profits. As in any business, a certain percentage of turnover must be recycled into the costs of production and distribution. But where drugs are concerned it's a small percentage because the wholesale markup is anywhere from 500-1000 percent.

 

Drug traffickers don’t count their money, they weigh it.

 

Washed, invested in legitimate businesses, then reinvested in criminal activity, drug money moves with a momentum and force of a cyclone. The local economies of small, dusty towns like Atoka, Oklahoma, and Roma, Texas, literally had their backs broken when cash-bearing Mexicans arrived to buy property. In countries like Bolivia, Peru, Ecuador and Colombia, drugs and money laundering have bred violence and corruption, and become such a cancer that they have subverted both the political and the judicial systems.

 

With its horrifying power, the narco-economy has made drug traffickers the most influential special-interest group in the world.

 

The money generated and controlled by traffickers has reached such monstrous totals that dozens of Third World countries could not possibly underwrite their own existence if it were not for the input of drug money. It has become an unofficial form of US foreign aid. Without an income from drug trafficking, the only way Colombia, Bolivia, Ecuador and Peru could remain afloat would be to continue the massive importation of hard currencies, now in the form of outright charity from the west. Not even an oil-producing nation like Venezuela could necessarily survive without it.

 

Following the Cartagena Summit in early 1990, the US government offered to pay $1.5 billion over a five-year period to a group of countries to pay for crop substitution programs. Colombia, Bolivia and Peru all rejected the gift as inadequate. The Bolivian government said it alone would need half that to make such a scheme work. The Peruvians stated they if they got the entire $1.5 billion they still couldn't guarantee success. And yet, even if America paid it and even if Bolivia and Peru did destroy all the coca and did wipe out all of the trafficking that takes place inside their borders, the impact on the world market would be negligible. The demand would be met instantly by any of a dozen producing nations.

 

The sums involved are way beyond anything that is easily comprehensible. A few years ago, the late Colombian cocaine cartel boss Pablo Escobar had to write off $40 million in cash because it rotted in a California basement. He couldn't get it into the washing cycle fast enough. He was already laundering so much that the machinery overheated and the system blew a fuse.

 

When he was caught the first time and word spread that he might be extradited to the United States, Escobar offered to barter for his freedom by personally paying off Colombia's national debt.

*****

 

 

The most massive effort ever mounted against drugs coming into America was secretly launched in mid-1992. For 12 months and at a cost of $1.1 billion, Customs and the Coast Guard joined forces to fortify an electronic net rigged from the southern tip Florida to the south-eastern tip of Texas. They were backed up by the Navy who kept fully armed guided missile cruisers on constant patrol in the Gulf of Mexico and the Caribbean to provide early warning detection. Anything and everything that moved across that invisible barrier was identified. In the air or in the water, if it was deemed to be suspicious, it was stopped. If it was stopped, it was inspected. The US Government was adamantly slamming shut the door through which the bulk of drugs was entering the country.

 

One year and $1.1 billion later, a classified National Security Council document proclaimed that there had not been any detectable difference, whatsoever, in the amount of drugs coming into the United States.

 

Attorney General Janet Reno was forced to admit that interdiction simply doesn’t work. "I've not seen anything since I've been in office which would indicate to me that it's been a cost-effective effort."

 

With more drugs on the streets than ever before, and more money inexorably linked to them, it's little wonder that so many policemen feel they're fighting a losing battle. How do you convince a 14-year-old kid in Harlem that if he comes to school he'll learn a trade and someday earn $10 an hour when for the past two years he’s been selling crack cocaine and pulling down $1500 a day?

 

Dependency lies is at the heart of the problem. Not only the physical dependency that creates demand --- it’s true that if people didn’t want to get stoned, or need to get stoned, there wouldn’t be a market for drugs --- but the economic dependency that comes from supplying that demand. Blaming drug addicts for the problem ignores the realities of Third World economics: To survive you must export; to export you must produce; and, there is more money to be made producing opium poppies and the coca bush than there is in producing oranges, cotton, bananas or coffee.

 

Take the example of sugar cane. It is harvested, refined, packaged, shipped, marketed and finally retailed in supermarkets for say, 60-cents a pound. Then look at heroin. It goes through much the same process of harvesting, refining, packaging, shipping, marketing and finally retailing, except there's no supermarket overhead calculated into the price. And heroin can sell for $20,000 a pound. Given a choice, why would anyone in their right mind want to be in the sugar cane business?

 

What's more, narco-dollars are exogenous and offer a quick fix to the local standard of living. The colossal amounts of money generated through the sale of drugs in North America and Europe come back into the local economy as construction projects or through the importation of luxury goods. Standards of living rise sharply and in a very brief period of time. Of course, prices eventually catch up and drug money destabilizes the economy, creating inflation and making non-drug exports implausibly expensive. Nevertheless, a lot of people in the Third World can't see how putting an end to drug trafficking is in their interest. They’ve never had it better.

 

Trying to convince them otherwise is pointless. Yet, the industrial west is filled with well-meaning souls who try, even though they don't have the slightest clue of what life is like on the rest of the planet. Some years ago, do-gooders hoped to promote a crop substitution plan along the Afghan borders where opium poppy is the main cash crop. They wanted to pay local farmers to grow orchids. Not only were the Afghans against the plan for fundamental economic reasons but the western missionaries never fathomed that orchids couldn't grow there anyway.

 

And even if orchids could grow on the moon, a peasant doesn't need a degree from the Harvard School of Business to know that if he reaps opium poppy to satisfy a booming market he'll feed his family and if he plants sorghum or sugar or tobacco leaf or orchids, they'll starve.

 

Legitimate commodity prices have plummeted in the past 20 years while Third World debt has skyrocketed. There might once have been a sensible argument for programs designed to replace Third World drug crops with maize, alfalfa or tomatoes, that is as long as there was a flourishing world market for maize, alfalfa and tomatoes. But those days are over. Preaching to some Bolivian, or his compatriot in Colombia or his cousin in Peru on the joys of the simple life in the beetroot trade is an exercise in futility, as illogical as selling that New York City street kid on the commercial benefits of plumbing school.

 

Locked deep inside economic dependency are the vestiges of all that aggressive lending by American and European banks to the developing economies during the 1970s and 1980s. Defaults on those loans almost derailed the western banking system. As the cocaine industry is the major employer in Bolivia, Colombia and Peru, it's hardly surprising that the proceeds of drug trafficking are showing up in the west as loan repayments from Latin America. Those funds, now washed, are the same funds that have buoyed up the liquidity of western banks. How ironic that drug money should now stretch from the valleys of Peru, through several Latin American finance ministries, directly back to hushed boardrooms with views of the East River.

 

As coca production in countries like Peru has increased seven and eight fold over the past five years, assets from the drug trade, at least those finding their way into nations belonging to the Bank for International Settlements, have grown from $350 billion to $500 billion. Something approximating one half of that is said to belong to the major drug cartels. A report to the leaders of the seven largest industrial nations laid bare the fact that 50-70 percent of the proceeds from drug trafficking around the world gets laundered through the western banking system. Drug traffickers operating only in America and Europe are estimated to be washing well in excess of $100 billion a year, a figure that exceeds the gross national product of 90 percent of all the countries currently represented in the United Nations.

 

Officially proclaimed sums must always be taken with a grain of salt because it's standard operating procedure for government agencies throughout the world to exaggerate a threat in order to keep a straight face when asking for an exaggerated budget increase. But, as global assets from the drug trade continue to rise, two facts undeniably stand out:

 

First, random forensic testing in the United States revealed that practically every bill in circulation bears microscopic traces of cocaine. In other words, practically every bill in circulation has at some point been used in a drug deal.

 

Second and perhaps most shockingly of all, more money is spent worldwide on illicit drugs than on food.

*****

 

 

The Medellin and Cali drug cartels used to be referred to as the region's only successful multinational enterprises. But then, they were in a business where the production-profit ratio is staggeringly high. Not quite 20 percent of the wholesale price goes towards cultivation, bribes, smuggling, handling and write-offs for drugs that are confiscated or stolen along the way. The rest is pure profit.

 

If you accept that as much as $300-$400 billion worth of narcotics is coming into the United States alone, roughly equivalent to one-third of all US imports, then the lion's share of $240-320 billion filters back to the drug barons, putting them at the top of the list of the world's wealthiest people. Throughout much of the 1980s, at least three Colombians were purported to be among the five richest men in the world, surpassed only by the Sultan of Brunei and King Fahd of Saudi Arabia. Even the cartels’ lieutenants were worth more than the Queen of England.

 

Only around 10 percent of the world's cocaine is actually grown in Colombia. The cartels purchase most of their product from Peru and Bolivia. They then buy their processing chemicals in Germany, Brazil and, surprisingly, the United States. With approximately 10 percent of Colombia's work force somehow tied to the narcotics trade, Pablo Escobar Gaviria, founder of the Medellin drug cartel, was the nation's largest and most important employer. He personally controlled about 80 percent of the cocaine coming into the United States.

 

The city of Medellin, capital of Antioquia Province in west central Colombia, is 155 miles from Bogota. Dating back to 1675, it sits in a mountain valley 5000 feet above sea level, is the country's second largest city with a population of 1.6 million, and is its principal industrial center. Local manufacturers produce steel, textiles, rubber, electrical goods and tobacco.

 

It used to be the most dangerous city in the western hemisphere. Many crimes in Medellin did not get investigated because the police were so severely intimidated. Even the DEA, which once had an office there, left town because they wanted to keep their operatives alive.

 

Escobar was plump, stood five feet six, had curly black hair and occasionally sported a black mustache. Hardly menacing in appearance --- "He doesn't look so dangerous," a reporter once commented, only to be told by an Escobar associate, "You never saw him smile!" --- he was an entirely ruthless, cold-blooded murderer who'd spent years building a Robin Hood image.

 

Although he told people that he grew up in abject poverty, he was born in 1949 in a working-class suburb of Medellin. His mother was a schoolteacher. His father was a mildly successful farmer. Beginning his own career as a teenaged petty crook, Escobar's first job was as an apprentice to a minor smuggler, dealing in small electronic goods stolen from warehouses along the Panama Canal. He worked his way into heavier crimes but didn't make any real money until the early 1970s when he orchestrated the kidnapping of a local industrialist. From there, he drifted into the drug business.

 

Arrested and convicted in September 1974 for trafficking 90 pounds of cocaine, he bribed enough people to be released after three months and have the charges against him dropped. Over the next five years he continued to be arrested for drug dealing and he continued to be let off. At first, it was the evidence that disappeared. Then it was the witnesses, the arresting officers and the judges. When Carlos Mauro Hoyos, Colombia's Attorney General, advocated extraditing drug traffickers to the US, he was machine gunned in the center of Medellin by three car loads of Escobar's soldiers. In 1989, Escobar blew up an Avianca airliner, taking 107 lives. He was implicated in the assassination of four Colombian presidential candidates, a Supreme Court judge and two dozen lower court judges. He also orchestrated a 1992 bombing campaign against government officials and rival gangs, setting off 300 devices which killed as many people. At the beginning of 1993, his men went on a rampage and murdered 178 local policemen. Yet his conquest of the world of major league drug dealing began slowly, with one old friend and one new cohort.

 

Jorge Luis Ochoa Vasquez was Escobar's childhood companion. Along with brothers Juan and Fabio, Ochoa had pioneered a smuggling route into the US while managing an import-export company called Sea-8 Trading in Miami. Sent there to take charge of a cocaine ring set up by his uncle, by 1978 Ochoa was independently bringing 225 pounds of drugs into Florida every week. The DEA got wise to him and sprung a trap, but he escaped, literally within inches of his life, and hurried home to Colombia. His younger brother Fabio took over the Miami interests.

 

Back in Medellin, Jorge manifested his own ambitions. He ordered the murder of his uncle and stepped in as head of the family business. For Escobar, an association with Ochoa was a natural way to expand, although both were small-time operators until they befriended Carlos Enrique Lehder Rivas.

 

Born in Quinido Province, 180 miles south of Medellin and the same age as Escobar and Ochoa, Lehder had moved with his mother to the United States when he was 15. Ten years later, he was sitting in a federal penitentiary for trafficking marijuana. His cell mate was a convicted dealer from Massachusetts named George Jung, and it was Jung who taught him the finer points of the drug business. Released in 1976, Lehder was deported, settled in Medellin, opened a car dealership and contacted Jung, who was already out. As Jung's parole conditions denied him a passport, he sent his partner Frank Shea to Medellin. The result was a deal whereby Lehder agreed to supply cocaine to Jung and Shea who then distributed it through Jung's old marijuana network. To get product, Lehder turned to Escobar and Ochoa.

 

And the Medellin cartel was open for business.

 

Understanding that a small proportion of their shipments would be seized, Escobar and Ochoa set about conquering the lucrative North American and European markets by bombarding them non-stop with drugs. Escobar’s ego being what it was, he took a big chunk of that larger proportion, then reinvested some of it to concoct an image. He courted the press and posed for photos. When one of his 40 homes was bombed --- a seven-story apartment famous for having two indoor swimming pools --- Escobar rebuilt it exactly as it had been. He constructed an aviary at another house and filled it with 100 cages of mynas, peacocks, toucans and cockatoos.

 

He also turned his $63 million 7000-acre ranch Hacienda Napoles into a private theme park. Some 80 miles east of Medellin in Puerto Triunfo along the Magdalena River, he ordered 20 man-made lakes to be dug, furnished the library with hundreds of books on Colombian birds and stocked the grounds with giraffes, rhinos, hippos, camels and a kangaroo. After adding replicas of dinosaurs to the front lawn, parking Al Capone’s Packard in the drive-way and mounting a light airplane on top of the front gates --- he bragged it was the one he used to smuggle his first shipment of coke into the US --- he opened "Pablo’s Zoo" to the public and drew nearly 60,000 visitors a year.

 

To further enhance his reputation he embarked on a mission of benevolence, straddling drug trafficking with right-wing populist politics. For every plane-load of merchandise he sold, Escobar offered a two kilo kickback to feed, clothe and house Medellin's poor. He supported local football teams and built hundreds of homes. In 1982, the people of Medellin elected him an Alternate Member of Colombia's House of Representatives.

*****

 

 

After being accused of murdering the Minister of Justice in June 1984, Ochoa fled to Madrid where he lived with his family on a false passport in a huge suburban villa. He bought a fleet of cars, invested in land for development and paid for his luxurious lifestyle with money he’d laundered in Europe. But within five months the Spanish police found him. Along with Ochoa, they also arrested the man who would one day steal Escobar’s mantle, Gilberto Rodriguez Orejeula.

 

Warrants had already been issued against both of them in the US on narcotics charges so a formal request was made for extradition. To fight it, the two men hired Madrid’s best lawyers and resisted for 20 months. At one point, when it seemed as if the legal maneuvering could drag on forever, the DEA offered Ochoa a secret deal. If he would testify that Nicaragua's Sandinista government countenanced drug trafficking, the extradition request would be rejected by the Spanish foreign office. Ochoa's response was that he didn't know anything about that particular connection. Of course, he was lying and the Americans knew it because there was plenty of evidence Ochoa had personally negotiated with a high-level Sandinista official to build a cocaine processing lab in Nicaragua. So Washington renewed its call for Ochoa's deportation. But the Spanish courts learned of the DEA's offer and, incensed that the American’s only interest in him seemed to be to discredit the Sandinistas, they denied the request. Ochoa and Orejuela were sent back to Colombia in July 1986.

 

Knowing the fate that awaited Colombian traffickers in the States, Ochoa’s friends threatened to eliminate political leaders one by one if he was handed over to the Americans. The government refused to bow to threats and pledged to prosecute Ochoa. Instead, he was "mistakenly" released. On the run for the next five years, Ochoa was captured again in 1991. By this time, he’d had enough. While awaiting trial, he negotiated a nine-year jail sentence, agreed to surrender some of his property and paid a $9500 fine, probably less than a day's interest on his laundered wealth.

 

Carlos Lehder fared considerably less well. The man who described cocaine as, "The Third World's atomic bomb," was captured in a shoot-out with Colombian troops at his jungle mansion in 1987 and was extradited. His trial in Florida was billed as one of the most important in the history of American law enforcement. The broadsheet press dubbed him the embodiment of a narco-terrorist. The tabloids called him el loquito, the crazy one. Together they detailed every facet of his life from sex and politics --- he’d founded his own political party, the anti-Semitic, neo-Nazi Latin National Movement which had some minor successes in local Colombian elections --- to drugs and charity. Like Escobar, Lehder had also endowed low-cost housing for slum dwellers.

 

The prosecution claimed that in 1978 Lehder purchased the tiny island of Norman's Cay in the Bahamas, rebuilt the airstrip there and used it to transship cocaine from Colombia to America. His former pilot testified that they'd fly drugs into Ft. Lauderdale's Executive Airport, off-load them without any interference from US Customs, take on suitcases filled with cash --- again, no one asked questions --- and head straight back to Norman's Cay for the next load. Another witness described how Fidel Castro introduced Lehder to Robert Vesco and how Vesco taught Lehder the business of money laundering.

 

Lehder's defense hoped to make the jury believe that the 39-year-old coke addict --- who owned a yacht and 19 cars, who bragged about his endless supply of women and who kept a naked, helmeted statue of John Lennon in his private discotheque --- was an otherwise innocent businessman who wanted to build a resort on Norman's Cay but backed off when he found it overpopulated with drug traffickers. He was convicted and sentenced to life imprisonment plus 135 years.

 

Next came Escobar's surrender.

 

The Colombian government wanted him so badly that it was willing to take him any way he'd agree to be taken. Early in the summer of 1991, he said he'd submit himself to protective custody while waiting to stand trial for murder and drug trafficking, but only on two conditions: Bogota had to guarantee that he wouldn't be extradited to the United States; and he had to be held in a prison designed expressly for him.

 

The government accepted his terms, denied America’s request for him and built the Envigado jail to his specifications. Hacienda style in the hills overlooking Medellin, it came complete with a swimming pool, a tennis court, a sauna, telephones and fax machines. Complying with his every wish, he was even permitted to bring his own plastic surgeon into the compound and have his face lifted. Ensconced along with 50 of his own armed guards at a cost to the government of half a million dollars a year, the price did not include an Escobar approved security system that not only kept him in but kept possible assassins out.

 

A year later, with his trial slated to open, he was informed that he would be transferred to an ordinary cell. He refused. Negotiators came to see him and a hostage situation developed. The army arrived and in the confusion, Escobar escaped. A dramatic military and police manhunt searched 15,000 homes to no avail. The US State Department considered Escobar so dangerous that it put $2 million on his head. Coupled with the $1.4 million the Colombian government had already tagged on him, Escobar became the world's most wanted man.

 

After 17 months in hiding, he died as violently as he'd lived for the past 20 years. On December 2, 1993, the day after his 44th birthday, the Bloque de Bosqueda, the elite CIA-trained and DEA-funded "search unit" of the Colombian security police, located him in a residential neighborhood on the edges of Medellin. He was talking on the phone to his 16-year-old son. They burst in on him and, showing no mercy, with a hail of bullets promptly and efficiently gunned him down.

 

His ego was such that he might have liked to be remembered as a businessman who’d once cornered America’s cocaine market. He’d crowed when he’d found himself on both the Forbes and Fortune lists of the world's richest men. His personal wealth was put at over $3 billion, prompting William Bennett, "Drug Czar" to the Bush administration, to remark, "He was richer than Ross Perot and more powerful than Genghis Khan. They said he was invincible." Escobar thought so, too. Except he wasn't any more invincible than he was Robin Hood.

 

Wanted internationally for drug trafficking, kidnapping and murder, his legacy is of a man who ridiculed the Colombian justice system, assassinated his enemies, slaughtered innocent people, threw his country into a long and horribly debilitating political crisis and wreaked havoc throughout the rest of the world, destroying untold numbers of lives with the drugs he sold. But when they killed him, very little changed.

*****

 

 

Cali is the heart of Colombia's agricultural region.

 

A city that pre-dates Medellin by a century, although slightly smaller with 1.4 million people, it lies in the western part of the country in the heart of the Cauca Valley on the Cali River not far from where the river runs into the Pacific Ocean. It is a major distribution point for coffee, livestock, minerals, textiles, chemicals, tobacco and paper products.

 

Where Pablo Escobar and his cronies might have been the most famous traffickers in Colombia, the Cali bunch were without doubt the most dangerous. For a time, their record for gratuitous violence surpassed Escobar's. But when they got smart and started spending their money on bribes, US officials quietly dubbed them the most sophisticated criminal organization in the world.

 

Despite being known as the Cali Cartel, they were never a cartel in the same sense that Escobar’s group was. Run more along the lines of a franchise with a main holding company doling out small parcels to a network of independently owned outlets, the federation was the brain child of Gilberto Rodriguez Orejuela who himself once owned the Chrysler Motors franchise for Colombia. Born in 1939, he got his first job in a Cali drugstore at the age of 15. Five years later, he was the manager. Five years after that he opened his own drugstore and from there, at least according to him, he built his considerable fortune. Known to his friends as "The Chess Player," he is the father of seven children, one of whom has an engineering degree from the University of Tulsa.

 

When he and Ochoa were sent back from Spain, Orejuela was put on trial and very quickly found not guilty. He just as quickly consolidated his position as chairman of the Cali cartel and used his laundered money to create an aura of legitimate affluence. He built Drogas La Rebaja into a national chain of drug stores, owned a bank in Colombia and another in Panama plus a consortium that ran 30 radio stations.

 

His partner was his attorney brother, Miguel. Five years younger, four times married with eight children, he is an obsessive soccer fan who bought Cali’s America team and poured so much money into it, paying outrageous salaries to the best players in Latin America, that he inadvertently capsized the entire league because none of the other teams could compete. Sometimes called "Patricio", sometimes called "Manolo," but mostly called, "El Senor," he ran the day to day affairs and managed the various groups they did business with around the world.

 

The number three man was the very violent Jose Santacruz Londono. A year older than Miguel and nicknamed "Don Chepe," he preferred the more macho handle, "07." Before joining up with the Orejuelas, he’d earned a reputation in the business shipping cocaine from Guatemala to Miami hidden in crates of frozen vegetables. It was his expertise in smuggling that completed the inner circle.

 

An engineer by trade, Londono had been on the DEA's most wanted list since 1980. One of the aliases he’d used was Victor Crespo but in 1981 the DEA hadn’t yet associated the two. On a tip that Crespo was coming to New York, agents stopped a fellow who’d gotten off a flight from Latin America. They checked his passport and because the name in it wasn’t Crespo, they allowed the man who was called Jose Londono to go about his business.

 

In 1990, two of his laundrymen were arrested in Luxembourg. One of them, Jose Franklin Jurado Rodriguez, was a professional money manager with a degree from Harvard. He and his partner, Edgar Alberto Garcia Montilla spent four years in jail in Luxembourg fighting extradition, but lost and were sent to the US to stand trial. According to them, Londono’s money laundering cycle began in Panama, where cash was deposited in the bank owned by Gilberto. From there, it was wired around the world to banks in Britain, France, Holland, Italy, Germany, Monaco, Hungary, Finland and Luxembourg before being sent back to Colombian companies owned by Londono, his family and his friends.

 

At times considered the most dangerous man in Latin America, Londono was also thought to be the wealthiest of the Cali bunch. Legend has it that in the 1980s, he was refused admittance to the Club Colombia, an exclusive address for local industrialists, so he built an exact replica of it. Among his assets are thousands of apartments in Colombia. Along with the extradition of Jurado and Garcia, $30 million belonging to Londono were frozen in banks around the world. There could be anywhere from three to fifteen times as much still hiding in European banks.

 

Besides drug trafficking and money laundering, Londono ordered the 1992 murder in New York of Cuban-born journalist Manuel de Dios Unanue who’d been writing about him. Constantly fearing for his own life, carrying a $600,000 price on his head, Londono lived in bedrooms with bulletproof windows.

 

Gilberto started by moving cocaine into New York in the early 1907s, then expanding to LA and Miami. He and Miguel first came to prominence in November 1975 when police at Cali’s airport discovered 1400 pounds of powder hidden in a small plane that had just landed. The pilot and co-pilot were arrested. That weekend, 40 people were murdered. Some few years later, Escobar was told that Ochoa's near-arrest in Miami had come as the result of a tip-off from the Cali cartel. A wave of murders followed. The Orejuelas and their camp immediately sought revenge. Escobar and his cronies might have been the most famous traffickers in Colombia but the Cali bunch were without doubt the most dangerous. Their taste for gratuitous violence even surpassed Escobar's and for a while, Colombia's cartel cities averaged 10-15 murders a day.

 

Eventually Orejuela got smart and started spending more money on bribes than bullets. That’s when US officials quietly dubbed the Cali cartel the most sophisticated criminal organization in the world. That’s also when Gilberto funded the vigilante group PEPES, People Persecuted by Pablo Escobar. Although the group killed more than 60 of Escobar’s relatives and associates, they vindictively helped the authorities hunt him down. In return, Colombian prosecutors took a more live-and-let-live attitude towards the Cali faction, rationalizing their stance by saying that the Orejuelas were not terrorists, they way Escobar was. In fact, it was the Orejuelas who supplied critical information on Escobar’s whereabouts that led the Bloque de Bosqueda to him. They’d already taken away a giant share of his business, now seeing him dead merely handed them the rest of it.

 

In those days, the Cali cartel’s annual profits were estimated at around $7 billion, more than three times as much as General Motors.

 

At one point, they were moving $50 million monthly out of New York. Computer logs impounded after a 19-month covert operation led to the arrest of their top guy there, Ramiro Herrera, whose brother Pacho worked for the Orejuelas back home. In addition to apprehending 37 other cartel soldiers stationed in the States, the police grabbed 1.3 tons of cocaine and confiscated $16 million in cash. But it turned out to be little more than a hiccup on the cartel’s ledgers.

 

By 1990, the Chess Player, El Senor and Don Chepe were the world's dominant cocaine traffickers.

 

Long before they’d plundered Escobar’s market share, they’d already begun to distance themselves from the retail side of the drug business. They’d lost interest in smuggling. They’d recognized that their future was in wholesale.

 

Because anybody with collateral in Colombia can become a drug dealer, the Orejuelas offered to subcontract to the mini-cartels. All an aspiring trafficker had to fill out a very detailed form which listed all his relatives so that the Orejuela brothers knew who to kill if someone tried to betray them, then come up with enough cash or collateral to pay for the shipment up front. The brothers continued to buy directly from the producers but they sold on to these smaller groups, letting other people worry about the transport, marketing, sales and money laundering. If cargoes were intercepted, it wasn’t the Orejuelas' product. If cash was confiscated, it wasn’t the Orejuelas' money. The deck was stacked in their favor, structured to guarantee that they couldn’t lose. And yet as many as 300 mini-cartels rushed into business with them.

 

Further diversifying, they nurtured a Mexican connection and franchised-out some of their US markets, unsuspectingly designating their own heir apparent.

 

Suddenly the Feds were faced with a new problem. They would seize a ton of cocaine knowing that the drugs originated with the Orejuelas, but the seizure did no damage to them because there was a broker in the middle. The one or two or three guys making up a mini-cartel might have had to give up ranches and other property to pay for the lost drugs, but the Orejuelas were still alive and well in Cali.

 

As wealthy as Escobar ever was, the Orejuelas proved themselves more resourceful. For example, just to keep the CIA from intercepting their phone and fax communications, Gilberto almost got away with buying his own satellite. They were also better educated and spent a fortune on pragmatic matters, such as friends in high places.

 

One of their friends was Gustavo Enrique Pastrana Gomez, an attaché at the Colombian Embassy in Uruguay. Arrested at the end of 1993 as the result of DEA sting operation in Miami, he’d been washing Orejuelas' money through the purchase of polo ponies and automatic car washes in Argentina. The cousin of a nationally prominent Colombian politician, he bragged to an American undercover agent that he could launder $2 million a week through his network of banking contacts in Montevideo.

 

The Orejuela brothers spent money successfully to lobby for a constitutional ban on extraditing traffickers to the United States. They spent money successfully to lobby for a law which allows traffickers to turn themselves in, to exchange guilty pleas for light sentence, to demand the outright dismissal of more serious charges and to be sent prisons where they had whatever they needed to continue doing business. They spent money building police stations in poor neighborhoods to help reduce street crime and spent money paying off the judiciary.

 

One of their judges in Bogota released three Cali laundrymen, saying there were no charges to answer because the prosecutor never showed up. He’d been told to appear in one courtroom after the cartel's lawyers had moved the case. Another judge, this one in Cali, ordered the release of a trafficker who’d been caught red handed. It created such an outrage that an appeal was rushed into the Supreme Court which promptly overthrew the acquittal. But no one ever bothered re-arresting the man. A third judge even smuggled drugs for them. Esperanza Rodriguez-Arevalo was arrested in Miami when she flew in with a couple of pounds of uncut heroin in her luggage. The Orejuelas had convinced her she could net upwards of $250,000 wholesaling the drugs, which was more than she could expect to earn on the bench in her entire lifetime.

*****

 

 

The Colombian government halfheartedly moved against both cartels in 1992 by levying a 10 percent tax on any cash imported into the country and deposited locally. It also permitted banks to increase their fees by about one-third for handling cash. In response, both cartels took a leisurely side-step and turned Venezuela into their newest amusement park. Within eighteen months, 75 percent of all Colombian cocaine was being exported through Venezuela and banks there held $14 billion for the drug dealers. More money was now being washed through Venezuela than the country earned in oil revenues. Nearly half a billion dollars arrived in the past three years, most of it from the US, as cash cashiers’ checks and bank transfers.

 

The long and rugged border that Colombia shares with Venezuela is a smuggler's utopia. From mountains in the north to flatlands and jungles in the south, the boundary is just about impossible to patrol. Cash and drugs move freely. What’s more, Venezuela and Colombia are active trading partners and banks from one country have branches in the other. Communications between the two are also good, making wire transfers easy. With relatively sophisticated financial markets, currency brokers have boomed. So has the Caracas stock exchange, which quickly found itself transformed by narco-economics into an oversized sink. Likewise, banks have done a flourishing business in short-term treasury bills. Until recently, there were no prescribed penalties in either country for failing to report large cash transactions, even if banks and brokers had good reason to suspect the money was derived from drug trafficking.

 

The laws in Venezuela have since been amended. But the laissez faire attitude that continues to characterize sections of its financial community remains prevalent throughout Latin America.

 

Argentina, is another example of a country ready and willing to pick up any slack. 0nce thought of as too far off the beaten path, drug traffickers have started using the country's newly won economic stability to wash money. Access in and out, for both product and funds, is easy. The border with Bolivia presents little difficulties for smugglers. And the markets of Buenos Aires present almost-unlimited opportunities for turning cash into investments. Under the old regime, wealthy Argentines kept their money hidden overseas. They're now bringing much of it back. That influx, coupled with foreign investments, sparked off by the privatization of state-owned enterprises, means that whatever drug money gets shuffled into the deck is virtually-impossible to spot. Furthermore, Argentina's cultural ties to Europe, notably Spain because of its shared language and Italy because nearly half of all Argentines are of Italian extraction, makes for near-unencumbered access to European markets, money and criminal expertise.

 

Brazil has become a staging post for drugs on their way to Europe and the economies of Recife and Sao Paulo, plus the drug problems of Rio, are testimony to that. While Paraguay is buoyant with foreign exchange. $66 billion moved through the markets in 1994, eight times the country’s gross domestic product. It has also become an alternative smuggling route, used as an end run to get drugs from Colombia the long way around into the US.

 

Peru is the world's largest producer of coca, and a working agreement that binds drug barons to local Maoist guerrillas has made the cocaine trade there bigger than ever. It's estimated that 10 percent of the entire population, more than two million people, are regular coca chewers. The most important producing region is the Upper Huallaga Valley, where today there are there are just as many banks doing business in dollars as there are in many small American cities. On any given day along Ocona Street, the heart of Lima's informal foreign exchange market, $3-$5 million in cash changes hands.

 

Across the border in Bolivia, the market in coca and coca paste makes up more than three-quarters of that nation's source of dollars. And, for many years, Bolivian drug baron Jorge Roca Suarez was Pablo Escobar's primary source of cocaine paste.

 

Roca directed his worldwide operations from a 19-room mansion in San Marino, California. Escobar converted his paste into powder, smuggled it into the United States, sold it and used part of the revenue to pay Roca. For supplying more than a ton of paste a week over the course of a couple of years, Roca earned $50 million. In the beginning he shipped the money back to Bolivia with couriers. Later, his sister and his housekeeper found that they could get cash to Bolivia by hiding it inside appliances, stuffing as much as $200,000 in a stereo speaker, $400,000 in a vacuum cleaner and $2 million in a freezer. Arrested and convicted of conspiracy to manufacture cocaine, conspiracy to export currency, conspiracy to evade taxes, tax evasion and money laundering, Roca was sentenced to 35 years. But Roca is not the problem, he’s a symptom of it.

 

Under Bolivian law, it is perfectly legal to grow coca. The Bolivians chew it, smoke it and use it in cooking. And they've done so since before the Inca culture took hold. Although coca derivatives are forbidden, to keep the tradition alive the government has designated that coca may be grown in the Yunga region of La Paz. To keep the tradition under control, it has set about trying to destroy coca bushes everywhere else in the country. However, herbicide spraying renders large areas of the country barren and it's years before other crops can take hold. The CIA has been provided satellite intelligence to help locate farms, but there are limitations. Coca bushes show up when they're covering very large areas. Small plantations can't always be spotted. So, for every big farm put out of business, half a dozen smaller ones take its place. The Bolivians have also set about trying to locate and destroy the thousands of chemical labs scattered around the country where the leaf is converted into cocaine.

 

Needles in haystacks are easier to find.

*****

 

 

Colombian President Ernesto Samper came into office in August 1994 riding on a law and order platform. However his election was met with appropriate skepticism in Washington. Narco-dollars had already undermined much of the legal infrastructure, heavily influencing the Colombian Congress, politicians, prosecutors, jurists and penal-code reform. For instance, a 1993 act stipulated that a trafficker who turns himself in can have his sentence reduced by as much as two-thirds and any additional pending charges will be dismissed. Under that law, the Orejuela brothers had been trying to negotiate their surrender in exchange for a 3-4 year term. It’s believed that the deal would have gone through under Samper had Washington not strenuously objected.

 

He was long on rhetoric but dogged by persistent rumors that the Cali cartel had contributed money to his campaign. The day after his election, a weekly news magazine revealed that the Orejuela brothers had contributed $3.7 million. Although he strenuously denied those rumors, Samper didn’t allay American suspicions when he transferred General Rosso Serrano, head of the national police’s anti-narcotics division and a relentless enemy of the cartels, to Washington as a military attaché. He was also quick to emphasize that Colombia would not extradite drug traffickers to the US.

 

Samper followed that with a call to the Orejuela family. A Colombian army unit had received a tip-off that Miguel Orejuela planned to attend his daughter’s communion party at a Cali hotel, so they raided it. When they came up empty handed, Samper personally apologized to the Orejuelas for having disrupted the celebrations and ordered Colombia's defense minister to stop "arbitrary operations."

 

Understandably concerned, the Clinton administration worried about the growing acreage of coca plantations in Colombia and the sentence reductions granted to confessed drug traffickers. A secret memorandum was sent from the State Department to Colombia’s Foreign Minister. Because it was so highly critical, the Foreign Minister took the unprecedented step of publicly rebuking the State Department for the communiqué, although the details of the letter were not released.

 

Fighting back with sound bites, Samper vowed to prevent the United States to turn Colombia into "a kind of Vietnam in the fight against drugs." He added, "It is unacceptable that some consumer countries come here and wage a war that they haven't been able to win inside their own borders."

 

It’s true that the Colombians had seized two Boeing 727s that were being used by the cartel for transporting drugs. But one estimate put their aviation fleet at 40 long-range passenger jets, some of which could carry nearly $2 billion worth of cocaine. Two planes out of 40 wasn’t a very good percentage. So Clinton indicated that if Samper didn’t act more decisively, Colombia risked losing a portion of its $40 million aid program unrelated to counter-narcotics efforts, as well as certain trade benefits plus future membership in the North American Free Trade Agreement. A pair of Republican Senators on the Foreign Relations Committee --- Jesse Helms of North Carolina and Connie Mack of Florida --- upped the stakes by threatening to shut down relations with Colombia within a year unless Samper implemented a series of very ambitious anti-narcotics programs.

 

Although the committee softened the measure, making the provisions discretionary rather than mandatory, by January 1995 Serrano was brought back to Bogota to be chief of the Colombian national police. Fearing that certain units had been infiltrated, he fired 3000 policemen, including 500 in Cali. He also ordered that the offensive against the cartel be commanded from Bogota and that it be kept so highly secret the police in Cali would never know when a raid was coming down.

 

Next, Samper appointed Alfonso Valdivieso, a tough talking prosecutor who would refuse to negotiate with the traffickers, to be attorney general. He also permitted the CIA and the DEA to bolster their intelligence operations in-country and move into Cali.

 

 

To support Serrano, the CIA bugged the traffickers’ cellular phones and flew surveillance flights to track their movements. They also helped to decipher nearly 600 computer floppy-disks that the Colombian police had seized in various raids. The DEA handled the shoe-leather part of the operation, gathering on-the-ground intelligence, helping to plant operatives in offices, staking out safe houses and following suspects.

 

Still under pressure from Washington, Samper offered cash rewards on national television for information leading to the capture and arrest of named traffickers. That triggered a purge. Fearing for their own lives, lesser cartel members went on a killing spree to eliminate other cartel members whom they believed could not be trusted. In turn, some of those lesser cartel members started coming forward. The walls that had protected the Cali bunch, were starting to crumble.

 

In mid-1995, around the same time that the Colombians finally got around to outlawing money laundering, they caught up with Gilberto. Serrano’s men, with help from the DEA, had been monitoring the offices of the Orejuelas’ lawyers. Contacts there helped to narrow the search for both brothers. On June 9, the police raided a house in Cali, arrested four people and discovered Orejuela hiding behind a false wall.

 

The likelihood that Gilberto would now try to barter a lighter sentence plainly worried some of his cronies. Within ten days, Henry "The Scorpion" Loaiza Ceballos, the cartel's military leader turned himself in at an army base in Bogota. One of the most hard-line members, he is known to have ordered violent revenge attacks and now stands accused of the chain saw slaughter of 107 peasants in southwestern Colombia who’d refused to cooperate with the cartel. On June 24, Victor "The Chemist" Patino Fomeque, a former policeman and head of the cartel's naval smuggling operation came out of hiding. He’d once commanded a mini-fleet of ships, including three submarines, which the cartel had used to smuggle drugs into the US.

 

Others followed. Julio Fabio Urdinola and Jonier Ospina Montoya, men whose names were not widely known outside Colombia but who were already the object of international arrest warrants, negotiated surrenders.

 

Then, on July 4, the police scored another major victory by capturing Londono. The search for him had intensified around Cali. Instead, a man fitting his general description was spotted by an off-duty cop dining at a restaurant in Bogota. It was known that Londono had a skin condition and because of that never wore socks. But it wasn’t until the suspect stood up that the policeman noticed he wasn’t wearing socks. Serrano was called and without any fanfare Londono was taken into custody. One newspaper later reported that before he left with the police, he insisted on paying for his dinner.

 

Shortly there after, Londono escaped and went on the run, only to be cornered by the police and killed in a shoot-out.

 

Four days after Londono's original arrest, Phanor Arizabaleta Arzayuz surrendered. A former cattle rancher, the 67 year old was responsible for purchasing the chemicals the cartel used to process cocaine. A warrant had been issued against him for the murder of a police chief.

 

Still on the run were Helmer "Pacho" Herrera Buitrago, a 43 year old smuggler from a long family of smugglers who headed up the cartel’s military wing, and Miguel Orejuela. But their days were numbered.

 

Miguel was known to sleep during the day and work at night. So Serrano began looking for apartments in some of Cali’s more luxurious neighborhoods where lights were on all night. After watching one for several nights, at four o’clock on the afternoon of August 6, Serrano and his men broke through the door.

 

Startled out of a sound sleep, Miguel dashed for the safety of a secret closet. They arrested him in his underpants.

 

While all this was going on, Santiago Medina, President Samper’s campaign treasurer, was also arrested. And Medina swore that it was Samper’s campaign manager who knew all about the Cali cartel’s $3.7 million gift, having laundered most of the money in American banks.

 

There must have been ironic sneers on the faces of jailed cartel bosses when they heard that Samper’s campaign manager had been arrested. He was Serrano’s boss, Defense Minister Fernando Botero.

 

Faced with a fight for political survival, Samper fired 51 senior police officials in Cali after their names were discovered on a cartel payroll. He suspended eight senators from his own party who’d been accused of having ties to the cartels, then froze bank accounts owned by three Orejuela family businesses.

 

To remind Samper that America took this seriously, President Clinton ordered all US-based assets belonging to 33 companies thought to be owned by the Cali cartel to be frozen and forbade American companies to do business with them. He also froze the assets of 47 US citizens identified as shareholders in those companies, and the Botero bank accounts in the States.

 

Coinciding with that, US Customs announced an investigation into 105 American companies that had accepted money from the Cali cartel for electronics, auto parts and other goods shipped to Colombia. A separate inquiry was launched into small costume jewelry exporters in midtown Manhattan who were suspected of accepting drug cash.

 

Next, the Samper administration identified some of the mini-cartel bosses, naming cousins Raul and Luis Grajales as the most powerful of the new leaders in the Cali region. Other stars waiting in the wings are Archangel Henao, Diego Montoya and Luis Gomez. And while Samper seemed willing to bet that the mini-cartels haven’t yet secured the international contacts or the political clout that could put them into the big leagues, they key word becomes "yet."

 

Of course, if the Mexican drug traffickers have their way, they’ll soon do to Colombia’s mini-cartels what the Orejuela brothers did to Pablo Escobar.

*****

 

 

The game is not over.

 

Nor is it likely to end soon.

 

It’s like putting out brush fires. You get one and two more start. Then again, just because the Orejuelas and their pals might be spending the rest of the their lives in jail, it doesn’t mean they’re necessarily out of business. There are people in America who run some pretty significant criminal organizations from jail and it’s fair to assume that if it’s possible in the States, it’s probable in Colombia. Yet, even if they have grown to old for any more of this and have finally decided to hang up their spikes, there’s a long list of people who have been waiting for their turn at the plate. Many of them are just as good as the Orejuelas, know the business just as well, and are smart enough to have learned from the Orejuelas' mistakes.

 

In 1990 opium poppies were planted in the Andes mountains. Within five years, Colombia became the world's fourth biggest producer of heroin.

 

*****