Drug cartels are composed of independent drugtrafficking organizations that have pooled their resources and elected to cooperate with each other. They are often incorrectly conceived of as single, organized crime groups with thousands of members, wide geographical scope, and vertical control of the drug business from the point of harvest to the point of retail sales on the streets. To the contrary, the cartels are merely associations of many smaller organized crime groups into a loose confederation of business associates. Some of the syndicates in a cartel may produce raw materials. Others may have well-established modalities for transportation. Still others may have money-laundering operations in place or important political and law enforcement connections to facilitate the creation of corrupt relations.
Drug-trafficking groups may decide to enter into a cartel relationship for any number of reasons. Most commonly, smaller, independent syndicates enter into a franchise relationship with a larger, better organized, and more stable syndicate. Another reason for the creation of a drug cartel is to bring together traffickers with differing strengths in the various aspects of the drug trade. In this arrangement, each of the independent syndicates realizes that it has a weakness that can be compensated for by other syndicates. An organization with strong connections to the growers of a particular plant may need to align with another organization possessing skilled chemists to convert that plant into a high-quality drug. Another organization may be skilled in smuggling, and another criminal network may have access to buyers in another country.
Occasionally, independent drug syndicates come together because of a need for highly specialized services. For example, opium-growing warlords in the Golden Triangle (Burma, Laos, Thailand) of Southeast Asia established working relationships with various Chinese Triads because they needed to move their product to markets worldwide and launder their profits, and an adequate financial structure was not available to them. In cases like these, drug cartels provide “references” and contacts for the establishment of contractual arrangements related to specific tasks.
Finally, a more contemporary form of drug cartel operations involves a simple exchange of goods or services exchanged between independent criminal organizations. An example of this is the relationship between Colombian cocaine syndicates and drugtrafficking organizations in Mexico. To move their cocaine into the United States, Colombian groups contract with Mexican organizations, which take half the load they are smuggling as their fee and distribute it to smaller Mexican drug-trafficking organizations in the United States for retail sale.
Colombian drug-trafficking organizations handle 75% of the world’s cocaine. Colombia’s role as a cocaine producer is geographically determined. It shares borders with Peru and Bolivia, major coca leaf growers. In addition, Colombia is close to its major cocaine market, the United States, which is only a 2 ½-hour flight from Miami. Finally, Colombia is the only country in South America with both Caribbean and Pacific Ocean coastlines, opening up a variety of options for maritime and air-smuggling routes.
Coca leaves are transported to Colombia from Peru and Bolivia along remote mountain trails to hundreds of locations where the rudimentary process of converting them into coca paste is accomplished. The coca paste is then carried in light aircraft to cocaine-producing facilities in the Colombian interior, where it is processed into cocaine hydrochloride, the white crystalline powder. After being “cut,” this is sold to cocaine users.
Colombian cocaine cartels did much of their own smuggling in the 1970s and 1980s, using maritime shipping and both private and commercial aircraft. By the 1990s, however, they had subcontracted the distribution of cocaine to Mexican drug traffickers. The cocaine was moved from Colombia to Mexico, where it was turned over to Mexican organizations for transport to the United States. By the 1990s, most cocaine entering the United States was coming through Mexico. Recently, Colombian drug cartels have made the smuggling process easier by adding chemical compounds to cocaine hydrochloride to produce “black cocaine,” which is undetectable by standard chemical tests or drug-sniffing canines.
Some Colombian cartels continue to be active in the United States. These cartels establish “cells” in specific geographic areas, typically structured around familial relations or long-time friendships. This arrangement impedes infiltration attempts by investigators. Cells are structurally compartmentalized, with a well-defined division of labor. Each cell specializes in a different aspect of the cocaine trade in the geographic location in which it is found. Some cells transport drugs, some are responsible for storing cocaine for future sale, and some engage in money laundering and have no contact with the drug itself. Others are involved in the actual wholesale trading of cocaine to retail drug networks. Cells are made up of 10 employees who have no knowledge about the membership, location, or activities of other cells. Cell structure is characterized by a rigid chain of command in which the head of each cell reports to a regional director for the cartel, and only to that individual. The regional director, in turn, reports to a designated individual in Colombia.
Colombian cartels make use of the most sophisticated communications technologies. Particularly important are state-of-the-art encryption devices, which translate communications into indecipherable codes. Encryption technology not only hides information about drug transactions but also obscures financial information related to money laundering.
The first major Colombian cartel appeared in the mid-1970s, headquartered in Medellin and led by the Ochoa brothers, Carlos Lehder, Pablo Escobar, and Jose Rodriguez Gacha. The Medellin Cartel dominated the cocaine trade in New York and Miami. The name “Medellin Cartel” is somewhat misleading, however. The cartel was never a single drug-trafficking organization, but rather a loose organizational confederation of many drug syndicates operating out of Medellin.
Carlos Lehder introduced the idea of moving cocaine on small private aircraft from a transshipment point. In 1976, Lehder bought a sizable portion of the Bahamian island of Norman’s Cay, only 225 miles southeast of Miami. He built an airstrip as a refueling spot for the aircraft that flew cocaine from Colombia and then on to the United States.
The tendency of some of the Medellin Cartel’s associates to use violence as a method of dispute settlement eventually led to the cartel’s downfall. Cartel members were responsible for the 1984 assassination of Rodrigo Lara Bonilla, Colombia’s Minister of Justice, and a subsequent attack on the Colombian Supreme Court. The Colombian government, in response, extradited Lehder to the United States in February 1987. He was convicted of cocaine trafficking and sentenced to 135 years in a federal prison, a sentence that was reduced in return for his cooperation in the prosecution of Panamanian dictator Manuel Noriega. Medellin Cartel violence continued, however, marked by the 1989 bombing of an Avianca commercial airliner that killed 110 people, including two police informants. In addition, Pablo Escobar also placed bounties of $1,000 to $3,000 on police officers in Colombia. In June 1991, Escobar turned himself in to Colombian authorities but escaped confinement in July 1992. In December 1993, after a nationwide manhunt, Escobar was shot to death by Colombian police at a residence in Medellin.
In the 1980s, cocaine trafficking groups based in Cali, a city 200 miles south of Medellin, gained prominence in the cocaine market. The Cali Cartel was not a single organizational entity, but a confederation of syndicates sharing resources and cooperating with each other. Cali Cartel members shunned publicity, avoided violence, and posed as legitimate businessmen. They used sophisticated business techniques to manage their operations and avoid arrest. Thousands of contract employees were used as surrogates to handle the actual cocaine trafficking. Every aspect of the business was insulated from other aspects.
The leaders of the Cali Cartel included the Rodriguez-Orejuela brothers, Jose Santacruz-Londono, “Pacho” Herrera-Buitrago, and Victor Julio Patino-Fomeque. Several Cali leaders were under indictment in the United States in the 1990s, but the Colombian constitution forbade their extradition. Under pressure from the Clinton administration, the Colombians used information developed by U.S. investigations to indict the Cali Cartel’s leadership in Colombia.
One reason that the Colombian cartels passed off much of their wholesaling business of cocaine to Mexican drug organizations was the increasing Colombian role in the production and sale of heroin. Starting in the late 1980s and increasing in the 1990s, Colombian cartels have expanded into the growing and smuggling of high-grade heroin, supplying 65% of the U.S. heroin market. By growing their own opium, Colombian drug organizations have reduced their reliance on Peruvian and Bolivian coca leaf suppliers. The opium poppy grows exceptionally well along the eastern slopes of the Central Andean Mountains in Colombia. Opium growers in Colombia work under contract to a drug cartel. The cartel supplies the growers with seeds and agricultural supplies, and the grower agrees to sell the opium gum to the cartels. Chemists process the opium gum into morphine base and then into heroin. Because heroin is smuggled in small quantities, the methods for smuggling are virtually unlimited. Some smugglers use hollowed-out shoes or sew the drug into the lining of their clothes, some hide it in other shipments of commercial goods, and others swallow it after wrapping it in condoms. The Colombian heroin trade is dominated by a series of new, smaller drug cartels operating independently of the cocaine cartels.
In the new millennium, the Cali Cartel no longer dominates the cocaine market. Law enforcement efforts against the Medellin and Cali Cartels had the effect of further segmenting and decentralizing the drug trade in Colombia, making it harder than ever to control. A number of veteran drug traffickers who had operated under the aegis of the Cali Cartel have become significant powers in their own right.
As of 2002, much of the cocaine traffic in Colombia is centered in the northern Valle del Cauca region, of which Cali is the capital city. Cocaine traffickers in this region operate independently of each other and have passed some of the major responsibilities for cocaine smuggling and wholesaling on to drug-trafficking syndicates in Mexico. Among the new drug organizations in this region are the Henao-Montoya syndicate, the Montoya-Sanchez organization, and the Urdinola-Grajles network. These groups are closely allied with right-wing death squads and paramilitary units in the region under the control of Carlos Castano.
In Cali, Victor Patino-Fomeque, a Cali Cartel leader, continues to direct a drug syndicate from prison. The Cali-based Herrera-Vasquez organization moves large quantities of cocaine to the United States via Central America and Mexico. The Herrera organization also launders drug money destined for Colombia through Panama and Mexico. In Bogota, “Juvenal” Bernal-Madrigal provides transportation services for Mexican Colombian traffickers. He is responsible for multi-ton shipments of cocaine and the transportation of large amounts of drug money from Colombia to Mexico. Finally, in Medellin, the Ochoa brothers are also back in the cocaine business.
Mexican drug syndicates have been trafficking marijuana and heroin for decades. In the 1990s, they entered the cocaine market, first as surrogates for Colombian syndicates and then as partners. Mexico’s 2,000-mile border with the United States, much of which is in isolated rural areas with rugged terrain, makes it an obvious transshipment site for drugs. Its extensive coastal and inland mountain systems create perfect havens for growing marijuana and opium poppies. In addition, there is an enormous flow of legitimate commerce across the U.S.-Mexican border every day. By 1999, 295 million people, 88 million automobiles, and 4.5 million trucks and railcars were entering the United States from Mexico. That volume of commerce creates many opportunities for drug smuggling. Mexico is also a haven for drug trafficking because of widespread corruption in its law enforcement and judicial systems and the lack of resources available to Mexican police.
In the 1980s, Mexican drug syndicates acted as transshipment agents for Colombian organizations. By the 1990s, Mexican traffickers were paid 50% of each shipment. This arrangement allowed them to enter the wholesale cocaine business. By 1995, Mexican cartels dominated the wholesale cocaine market in the midwestern and western United States.
Mexican cartels are compartmentalized and have a strong chain of command emanating from Mexico. The cartels have surrogates throughout the United States that manage day-to-day activities. Unlike other drug syndicates, which have insulated their home base operations by granting greater autonomy to cells in foreign countries, Mexican syndicates still retain a system whereby Mexican-based leaders provide specific instructions to their foreign-based operatives on issues such as warehousing drugs, transportation services, and money laundering.
Two thirds of the cocaine sold in the United States is transshipped from Mexico. Cocaine comes into Mexico from Colombia by air or boat and is transported by truck to repositories in Juarez or Guadalajara. From these repositories, cocaine is driven across the border, most commonly to Los Angeles, Chicago, and Phoenix. Surrogates in those cities have contractual arrangements with trucking companies to move the cocaine across the country to smaller warehousing facilities closer to the point of sale. Individuals working in these “stash houses” guard the supplies and make arrangements for their distribution by wholesalers.
Mexican cartels also play a large role in the U.S. methamphetamine market. They engage in the largescale production of methamphetamine, operating clandestine laboratories in Mexico and California capable of producing hundreds of pounds of the drug.
Mexican heroin makes up about 29% of the U.S. heroin supply. The cartels produce 6 metric tons of heroin a year for sale in the United States. Because of crude refining methods, Mexican heroin is frequently dark in color and sticky or gummy, resulting in its name, “black tar” heroin.
Like many criminal organizations in the early stages of establishing control of an illicit market, Mexican syndicates engage in widespread violence. Examples include the 1998 killings of 22 people in Baja California Norte carried out by rival drug traffickers; and 300 murders took place in Tijuana in 1998, 75% of which were attributable to drug-trafficking disputes (DEA, 2002).
Major Mexican cartels include the Arellano-Felix organization, based in Tijuana, which moves multi-ton quantities of cocaine and marijuana and significant amounts of heroin and methamphetamine. The Caro-Quintero syndicate is based in Sonora and specializes in trafficking in cocaine and marijuana. The Juarez Cartel is heavily involved in the trafficking of cocaine, heroin, and marijuana. The Amezcua-Contreras organization is based in Guadalajara. It is a massive methamphetaminetrafficking syndicate and a major supplier of precursor chemicals to other methamphetamine syndicates. This syndicate controls much of the legitimate trade in chemicals in Mexico as well.
The Dominican Republic is one of the poorest countries in the world. Dominican drug traffickers began as retail cocaine dealers in emigrant communities in the United States. The most famous of these communities was the Washington Heights area of New York City. In the mid-1970s, Dominican immigrants moved into this community and began handling Colombian-supplied cocaine. Soon, their trafficking activities had spread into New Jersey, Connecticut, and some of the affluent suburbs of New York.
In the 1990s, Dominican traffickers entered the wholesale cocaine market by offering Colombian suppliers a better deal than Mexican syndicates, a smuggling fee of only 25% of the load. Using drug distribution systems already established in emigrant communities, two major Dominican drug syndicates emerged. One, operating out of the Dominican Republic, provides “stash sites” for cocaine shipments. Cocaine is transported into the Dominican Republic in small boats or by airdrops. Dominican traffickers then smuggle the drugs into Puerto Rico in boats, repackage the drugs, and ship them to the continental United States in containerized maritime cargo ships or on routine commercial air flights. Once in New York City, the cocaine is distributed by a second syndicate of ethnic Dominicans that operates along the East Coast. Dominican syndicates rotate members in the United States. Typically, they move operatives in for a 2-year stay and then retire them to the island.
The opium-growing regions of Burma and Laos have made Southeast Asia the second-largest source region for the world’s supply of heroin. Cultivating the opium poppy is still the economic mainstay of the many hill tribes living in isolated, rural, impoverished areas of Southeast Asia. Heroin is often smuggled on fishing boats down the Gulf of Thailand and then transferred to the major international maritime shipping centers of Singapore and Hong Kong. In addition to Thailand, Cambodia is being increasingly used as a transshipment route for heroin.
Massive criminal organizations, virtually immune from law enforcement interference because of widespread corruption in the governments and business communities of Southeast Asia, have been able to work in close collusion with police, the military, politicians, and businessmen to spawn a massive drug-and-sex trade empire in the region. Drug trade profits are the source for most new commercial and business investments in the region.
Heroin production is dominated by ethnic drug-trafficking armies operating mostly in Burma’s remote opium-producing region. The drug-trafficking armies had begun as insurgent groups, often supported by the CIA. Over the years, however, these armies have primarily engaged in heroin trafficking and in other illicit and lucrative economic activities, including gem smuggling, illegal logging, and timber smuggling. As a result of its continuing political repression, the military regime in Burma has negotiated treaties with most of these armies, which allows the regime to fight any social or political changes in the country in return for free rein for drug traffickers.
Ethnic Chinese criminal organizations and some Thai criminal networks act as brokers, financial backers, and transporters in the Southeast Asian heroin trade. Operating out of major regional commercial centers in Bangkok, Hong Kong, Singapore, and Taiwan and using a wide array of interchangeable front companies and legitimate businesses, Chinese and Thai criminal networks also arrange financing and transportation of drugs, routing drugs through many different ports, largely by commercial shipping, to their final destinations.
Drug Trade; Organized Crime: Transnational
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