DEA Congressional Testimony
July 16, 1997

DEA Congressional Testimony

Statement by:
James Milford
Deputy Administrator

Drug Enforcement Administration

Before the:
The House International Relations Committee
Subcommittee on the Western Hemisphere

Regarding:
Western Hemisphere

Date:
July 16, 1997

Note: This document may not reflect changes made in actual delivery.

Contents

The Colombian and Mexican Drug Trafficking Alliance

The Colombian Situation-An Industry in Transition

FARC Involvement in the Drug Trade

Law Enforcement’s Response

DEA Bogota

Bolivia "In Country"

Peru Situation Report

Involvement by Terrorist Groups

Riverine Operations

Involvement by Terrorist Groups

Expanding DEA’s Anti-narcotic Efforts in Latin America

 

Mr. Chairman and Members of the Subcommittee: I appreciate the opportunity to appear before you today on the subject of the Anti-narcotic Efforts in Latin America. My comments will entail an assessment of the drug trafficking situation from the source country areas of Bolivia, Colombia and Peru. I will provide an overview of the international crime problem we are facing today with an emphasis on the criminal trafficking groups from Colombia and Mexico. These criminal enterprises control the manufacture, smuggling, and distribution of much of the heroin, cocaine, methamphetamine and marijuana in the Western Hemisphere and into the United States. In light of many of our recent efforts in Latin American countries, this hearing is timely and will enable me the opportunity to explain some of the circumstances that the Drug Enforcement Administration (DEA) faces in the cocaine source countries on a daily basis.

In the global drug trade, the importance of the source countries cannot be minimized or overshadowed by the trafficking groups that are responsible for the distribution of drugs on America’s streets. Although Colombian traffickers still control and facilitate significant portions of the drug trafficking in the Western Hemisphere, the sophisticated criminal groups from Mexico have eclipsed the drug trafficking criminals from Cali and Medellin, Colombia, as the greatest law enforcement threat facing the United States today. The leaders of these groups merely represent the 1990s versions of the traditional organized crime leaders that American law enforcement has fought to defeat since the turn of the century.

  

The Colombian and Mexican Drug Trafficking Alliance

Colombian traffickers gained the attention of American law enforcement in the early 1970s when they became under scrutiny in the Caribbean corridor for using this area and numerous routes through South Florida to smuggle hundreds of tons of cocaine and marijuana into the United States. As a result, they gained notoriety through their acts of brazenness, violence, and intimidation, which served to intensify law enforcement attention and presence in the Caribbean, into Florida and along the Eastern seaboard. This forced the Colombians to turn to the less sophisticated and structured Mexican marijuana traffickers to move their products to growing American drug markets through Mexico and across the U.S. border.

Originally, these Mexican crime families received shipments of cocaine from the Cali traffickers and then smuggled it across the U.S.-Mexico border, where it was turned over to Colombian distribution cells. First paid $1,000 to $2,000 per kilogram for their services, they ultimately began receiving between 40% to 50% of each shipment as payment. Amado Carrillo-Fuentes and the other major traffickers quickly amassed fortunes from the profits of the sale of thousands of kilograms of cocaine and systematically expanded their distribution networks.

The Mexican trafficking organizations mimicked the methods of operation the Colombians had used successfully for such a long period of time. They began to become more structured within their organizations by adopting the Colombian cell system, which compartmentalized and insulated each function of the organization. The Mexican transportation organizations began receiving payment for services rendered in the form of cocaine in lieu of cash, often commanding up to one-half of each shipment being transported across the U.S. border, and turned over to Colombian distribution networks. This arrangement created opportunities for the Mexican trafficking groups to develop their own distribution networks and exponentially increase their profits.

The majority of the cocaine entering the United States continues to come from the source countries of Colombia, Bolivia and Peru, through Mexico and across the U.S.-Mexico border. In addition to the inexhaustible supply of cocaine entering the U.S., trafficking organizations from Mexico are also responsible for producing and trafficking in thousands of pounds of methamphetamine annually.

Although Colombian traffickers still dominate the movement of cocaine from the jungles of Bolivia and Peru to the large cocaine hydrochloride (HCL) conversion factories in Southern Colombia, they have lost their stranglehold on the U.S. wholesale market. The ascension to power by the groups from Mexico has garnered them enormous wealth and a demonstrative expansion in their spheres of influence. The organized criminal groups from Mexico now control virtually all cocaine sold int he Western half of the United States and, for the first time, we are seeing a concerted effort on their part to expand into the lucrative East Coast market.

However, the remnants of the Cali group still directed by the Orejeulas, as well as Cali splinter groups such as the Grajales-Urdinolas, have become powerful forces in their own right. New independent traffickers from the Northern Valle del Cauca have risen to prominence and are responsible for the huge volumes of cocaine and heroin being shipped to the United States. With their surge to power, the face of the drug trade has changed.

 

The Colombian Situation-An Industry in Transition

An estimated 15% of the world’s coca leaf is grown in Colombia and the vast majority of the cocaine base and cocaine HCL is produced in laboratories throughout Colombia. The fingerprints of Colombian traffickers are on the vast majority of the cocaine distributed in the United States today. Many of these activities take place in the southern rainforests and eastern lowlands of Colombia. Most of the coca cultivation occurs in the Departments of Guaviare, Caqueta, and Putumayo. Cocaine conversion labs range from small "family" operations to large facilities, employing dozens of workers. Common methods are still used to extract cocaine alkaloids from raw coca leaf and to remove impurities from cocaine base and cocaine HCL. Once the cocaine HCL is manufactured, it is either shipped via maritime or aircraft to traffickers in Mexico, or shipped through the Caribbean corridor, including the Bahama Island chain, to U.S. entry points in San Juan, Puerto Rico, Miami and New York City. The Cali splinter groups and the new groups from Colombia have returned to the traditional smuggling routes in the Caribbean, creating alliances with Dominican and Puerto Rican trafficking groups.

The following new independent traffickers from the Northern Valle del Cauca have risen to prominence:

Jairo Ivan Urdinola Grajales and his brother Julio Fabio Urdinola Grajales head a major drug trafficking organization associated with the so-called Northern Valle del Cauca drug mafias. The Urdinolas are related by marriage to the Henao Montoya family. The CNP arrested Ivan in April 1992, while Fabio later surrendered to Colombian authorities in March 1994. The incarceration of the Urdinola Grajales brothers notwithstanding, their organization reportedly remains active in the drug trade.

The Henao Montoya brothers, Arcangel de Jesus and Jose Orlando, run trafficking operations out of the Northern Valle del Cauca region. The Henao Montoyas run the most powerful of the various independent trafficking groups that comprise the North Valle drug mafia. The major North Valle drug mafia organizations are poised to become among the most powerful drug trafficking groups in Colombia. The Henao Montoya organization has been closely linked to the paramilitary group run by Carlos Castano, a major cocaine trafficker in his own right.

Diego Montoya Sanchez heads a North Valle trafficking organization that transports cocaine base from Peru to Colombia and produces multi-ton quantities of cocaine HCI for export to the United States and Europe. DEA considers Montoya Sanchez to be one of the most significant cocaine traffickers in Colombia today.

In March 1996, Juan Carlos Ramirez Abadia (aka "Chupeta"), surrendered to Colombian authorities. Chupeta is believed to have surrendered, in part, due to his fear for his personal safety and to be eligible for a more lenient prison sentence. In December 1996, Chupeta was sentenced to 24 years in prison, but may actually serve as little as 7 1/2 years due to Colombia’s lenient sentencing laws. DEA and CNP reports indicate that Chupeta continues to direct his drug operations from prison.

Julio Cesar Nasser David heads a major polydrug trafficking and money laundering organization based out of Colombia’s North Coast. His organization smuggles multi-ton quantities of cocaine and marijuana to the United States via commercial shipments and maritime vessels. In 1994 DEA and Swiss authorities arrested Nasser-David’s wife and seized over 180 million dollars in drug proceeds concealed in secret Swiss bank accounts.

Alberto Orlando Gamboa (aka "Caracal") runs the most powerful drug trafficking organization on the North Coast. Gamboa exploits maritime and air routes to the Dominican Republic, Haiti, Puerto Rico, and other Caribbean islands, to smuggle multi-ton quantities of cocaine and marijuana into the United States.

 

FARC Involvement in the Drug Trade

Adding significantly to the dangers faced by the anti-narcotic forces in Colombia is the protection being afforded to the farmers, who grow the coca and to the traffickers who process it into cocaine base and cocaine HCL, by the Revolutionary Armed Forces of Colombia (FARC) and the National Liberation Army (ELN). The FARC factions continue to raise funds through extortion, by providing security services to traffickers, and charging a fee for each gallon of precursor chemicals and each kilo coca leaf and cocaine HCL moving in their region. Some of these groups have assisted the drug traffickers by storing and transporting cocaine and marijuana within Colombia, and certain FARC units in Colombia may be engaged in localized opiate trafficking.

CNP helicopters and planes used in drug eradication efforts continually receive ground fire when conducting counterdrug operations. Guerilla groups provide security for and aggressively defend coca and poppy fields and the processing laboratories, like the huge HCL conversion complex seized in January of 1997. The FARC, and other guerilla groups, were originally founded and built on ideological beliefs, but profits from the multi-billion dollar drug trade have sparked the guerillas’ interest in selling their services to drug traffickers instead of pursuing ideology. To date, there is little to indicate the insurgent groups are trafficking in cocaine themselves, either by producing cocaine HCL and selling it to Mexican syndicates, or by establishing their own distribution networks in the United States.

 

Law Enforcement’s Response

Cases against the leaders of these criminal groups most often originate from investigations being conducted in the United States. Through what was originally designated our Southwest Border Initiative, but has become a Hemispheric Strategy, we are able to build cases on the bosses and the U.S. based infrastructure of these international drug syndicates and with the assistance of foreign governments, their long-term incarceration leave entire organizations in disarray.

Combining resources from the Federal Bureau of Investigation (FBI), the Department of Justice (DOJ), the United States Attorney’s Office, and other Federal, State, and local agencies, as well as the host country law enforcement agencies, as we did with the CNP, we can ensure that the leaders of these groups will be arrested and hopefully sentenced to prison terms commensurate with their crimes.

 

DEA Bogota

The central focus of the DEA office in Bogota is the identification and investigation of the organized drug syndicates in Colombia that control the growth, manufacturing, and flow of cocaine to the United States. These investigations, conducted with the CNP in support of domestic investigations, target the leadership and U.S. based infrastructure of their distribution cells by attacking the communications systems of their command and control functions in an effort to build criminal cases that will result in their conviction and incarceration in either the United States or Colombia.

In support of this strategy DEA Bogota and the Colombian National Police have developed a series of programs and operations designed to enhance the criminal investigations, attack the weakness of the major criminal groups in Colombia, and inhibit the flow of cocaine through the key source zone located south and east of the Andes Mountains. These support programs have the immediately positive result of seizing cocaine, conversion laboratories, and aircraft. However, the overriding benefit of these programs is the critical intelligence and evidence they provide to our primary program of building cases on the criminal organizations’ leadership and infrastructure. Key programs DEA has been able to either initiate or expand as a result of funding for the Andean Ridge in the FY97 budget are:

* The expansion of the DEA/CNP wire intercept program that is critical to our prime objective of building criminal cases against the leadership of the organized criminal drug organizations in Colombia. This program also provides key information used in our interdiction and disruption strategies.

* The recently established Information Analysis/Operations Center plays a vital role in the coordination of U.S. and Colombian information and intelligence related to the interdiction of drugs manufactured and transited through Colombia.

* The lack of a developed transportation infrastructure in the source zone offers a viable target of opportunity. Traffickers are dependent on aircraft and the riverine network to transport chemicals, vital to the processing of cocaine base to HCL and to move cocaine base from Bolivia and Peru to the conversion complexes located mostly in the Departments of Gaviari, Caqueta and Putumayo. Given the paucity of the legitimate traffic on the rivers and the finite number of aircraft available and suitable for trafficker use, a flow reduction strategy will be extremely effective in denying transportation options to traffickers and substantially reducing the movement of cocaine in the source zone.

* Maintain and improve the investigative capabilities of the vetted Special Investigation Units (SIU ) of the CNP that are critical to our wire intercept and other enforcement programs in Colombia

*expansion of operations conducted jointly with the CNP to locate and destroy clandestine laboratories, airstrips, and storage sites. In January of this year, the CNP seized the largest drug processing complex in Colombia’s history, seizing 13.8 tons of cocaine and 455 tons of chemicals from the site hidden in the tropical savanna of Southwest Colombia. Although these complexes are often quite large, they are easily concealable in the triple canopy jungles of Colombia. However, through a variety of intelligence collection techniques we are able to locate and destroy the laboratories that produce thousands of kilograms of cocaine HCL weekly. The pressure to locate and seize cocaine HCL laboratories must be maintained along with efforts to stop the flow of cocaine base, most often via aircraft, from Bolivia and Peru. Equally as important is the seizure of precursor chemicals which are essential to the manufacturing process (none of which are manufactured in Colombia). This strategy is critical to the success of our anti-narcotics program in Colombia.

* Expansion of information collection and investigative activities in support of the International Emergency Powers Act (IEEPA) and money laundering schemes by Colombian trafficking organizations.

 

Bolivia "In Country"

Bolivia remains the world’s second largest producer of coca leaf and cocaine alkaloid (despite being overtaken by Colombia in hectarage under cultivation), but production is now declining. The key to this success has been and will continue to be the focus on identifying and destroying illegal new coca and seedbeds---a problem that was largely overlooked in recent years---while maintaining and building the momentum of the voluntary eradication program for mature coca.

In 1996, the new and mature coca eradication programs destroyed over 7,500 hectares of coca, which was 25% over the United States and Bolivian governments’ established goal. This effort produced a net decline in the estimated amount of coca under cultivation for the first time since 1992. For the first four months of 1997, the pace of eradication was 15% above the pace of a year earlier.

Since the program to prevent new coca planting began in earnest late in 1995, over 1,900 hectares of young coca have been destroyed, along with enough seedbeds to plant over 15,000 hectares. Additionally, in recent months, those found planting new coca are now subject to losing their entire coca crop, including mature plants, and in some cases, face prosecution. These measures have created a disincentive to the planting of new coca.

 Over the past year and into this Fiscal year, Bolivia has continued to make substantial progress in several areas of its counter narcotics performance. FY-1996 was a banner enforcement year for Bolivian drug enforcement. Enforcement efforts in the first three quarters of FY-1997 have already surpassed the results obtained in all of FY-96, despite election year issues.

These successes are borne out of statistical figures which includes drug-related arrests and seizures, as well as through the review of ongoing programs which are focused on long-term institution building, and the development of the Bolivian National Police Counter Narcotics Division, the Fuerza Especiale de la Lucha Contra el Narcotrafico (FELCN). The Intelligence and Special Operations Group (GIOE) is one of Bolivia’s most successful drug enforcement programs. It was developed four years ago as a result of cooperation between DEA and the Bolivian National Police. This unit is responsible for handling sensitive intelligence and conducting the most important complex criminal investigations in Bolivia.

During the first three quarters of this fiscal year, the FELCN had made 1, 53 arrests, seized 8,318 kilograms of cocaine, 234 vehicles and 7 aircraft. Cooperative arrests and seizures in Bolivia during these three quarters have surpassed end of year figures for 1996.

During the last four years, the GIOE has developed a regional and world-wide reputation for integrity and investigative accomplishments as a result of its multi-jurisdictional cooperative investigations with the elite police units from Colombia, Mexico, Brazil, Argentina, Chile, Paraguay, Holland, Germany, Italy, Israel, and the United States. The success of the GIOE is based, like the DEA’s, on the investigative strategy of targeting and arresting the leadership of major trafficking organizations and thus dismantling the entire infrastructure.

Our success in Bolivia is also the result of the additional financial resources provided to the DEA by the United States Congress for source country enforcement programs. These additional funds have allowed DEA Bolivia to create and finance innovative programs in conjunction with the Bolivian National Police, such as Operation Gatekeeper in the Chapare growing region, the Sensitive Investigations Unit (SIU), the Major Traffickers Task Forces(i.e. GIOE), and the Andean Ridge Programs. The additional sixteen positions approved for DEA Bolivia have been selected and will begin to arrive in country before the end of the fiscal year. This will enable the DEA to augment its strength in La Paz, Cochabamba, and Santa Cruz. These enhancements will, in conjunction with newly reinforced Bolivian National Police units, allow an expansion of counter-narcotic efforts in previously unworked areas.

 

Peru Situation Report

As one of the world’s major producers of coca, Peru is key to an effective counternarcotics effort in the source countries. In 1996, Peru was responsible for the cultivation of approximately two-thirds of the world’s supply of coca. Coca plants can be harvested nearly anywhere in Peru, but most cultivation takes place in the Huallaga Valley, which accounts for 41 percent of Peru’s coca cultivation. The Huallaga Valley is subdivided into three areas: the Upper Huallaga Valley, Central Huallaga Valley and the Lower Huallaga Valley. The Upper Huallaga Valley produces 75 percent of the Valley coca.

In 1996, the total coca cultivation was estimated at 95,600 hectares. This is a 18 percent decrease from the estimate of 115,300 hectares in 1995. If environmental conditions are favorable, an estimated 174,400 metric tons of coca leaf could be produced from 94,400 hectares of coca plants, estimating the harvest could produce 435 metric tons of cocaine hydrochloride (HCL).

Seizure numbers for 1996 were favorable eradicating 3,552 hectares of seed beds and 1,259 hectares of young and mature plants. There were also 18,684 kilograms of cocaine base/paste seized which is almost double the kilogram seizures for 1995s seizures of 9,625 kilograms. There were 1,006 kilograms of cocaine hydrochloride seized, 13 HCL or cocaine base laboratories seized and 286 maceration pits destroyed during 1996. Seizures of marijuana were up 92 percent from 1995.

Large cocaine conversion laboratories have continued to be outnumbered by re-oxidation labs due to the proliferation of "mon and pop" base labs and the increased use of maceration pits by coca farmers. The cocaine base collectors gather their respective shipments from a compilation of suppliers making quality control difficult. Usually all of the collected cocaine base is re-oxidized to produce the uniform product demanded by the Colombian traffickers. The primary destination for cocaine base produced in Peru continues to be Colombia. However, during the past year there appears to have been an increase in shipments from Peru to Ecuador. DEA information has indicated that these shipments are destined for Ecuador-based trafficking organizations with established customers in Mexico and the United States or as an indirect route for passage to Colombia for further processing. Although Colombia has its own capabilities to produce cocaine base, their production totals cannot compare to Peru’s.

Strong political will in counter-narcotics is manifested in actions to control cocaine base and cocaine HCL trafficking by air interdiction of suspect aircraft, destruction of labs, eradication of young and definitive coca, waterway interdiction of suspect transport watercraft, and airport control. Judicial reform continues with tough sanctions against traffickers and all of those who associate with traffickers for profit.

The DINANDRO, the anti-drug directorate of the Peruvian National Police (PNP), is a component of the Ministry of Interior and is the sole entity with authority to investigate drug crimes. The directorate is made up of more than 1,500 PNP officers sub-divided into three tactical field unit known as DIOTADs and an investigative unit based in Lima. The PNP officers assigned to the investigations unit are divided into chemical control, financial investigations, international investigations, domestic investigations, and intelligence. During the past year the Government of Peru has initiated, participated in or concluded the following significant counter-drug operations:

* The apprehension of Willer ALVARADO Linares in Quito, Ecuador, and eighty members of his organization. Subsequent investigation identified assets totaling an estimated $1,832.000(USC) and 100 bank accounts. During 1996, approximately 2,500 kilograms of cocaine were seized.

* Enforcement operations against the CACHIQUE organization are being disruptive, seizing approximately 1,141 kilograms of cocaine base in 1996.

 

Involvement by Terrorist Groups

The Sendero Luminoso(SL) and the Movimiento Revolucionario Tupac Amaru (MRTA) are the two know terrorists organizations that have operated in Peru for over two decades and are native to the country. The MRTA was responsible for the hostage takeover of the Japanese Ambassador’s residence in December, 1996. Although the MRTA advocate violence, it is considered relatively mild when compared to the SL activities. The SL is among the world’s most dangerous and ruthless terrorist groups following the teachings of Mao Tse Tung. SL believes that every institution in Peru is corrupt. SL members tend to be unyielding in their beliefs and will brutally kill without provocation. Although a large percentage of SL’s leaders and founders have been jailed and the former structure of the organization has changed, the SL is striving for power by heavily recruiting through fear tactics and force.

Almost all information available on the MRTA and the SL indicates that the both have used drug trafficking as a source of revenue. Most of the income they earn is from "war taxes" they levy on drug trafficking organizations. Intelligence also suggests that the terrorists earn money by providing security for various drug operations. The Lima Country Office has no indication that these terrorists groups are routinely involved in manufacture or transportation of cocaine base.

Base on Peru invoking it sovereign right to protect its airspace from unidentified aircraft, Operation Air bridge continues to have a drastic effect on the number of suspected trafficker aircraft entering Peru. The PNP officers also track the amount of trafficker flights that have entered Peruvian airspace and avoided interception. The 1996 statistic demonstrated a 73 percent reduction in detected flights and an eighty percent reduction in exported cocaine base/HCL compared to 1995. The majority of these detected flights originated from clandestine strips in Colombia and Brazil.

 

Riverine Operations

The Peruvian waterways have always been exploited by traffickers to transport illicit chemicals and drugs. In 1996, a number of choke points were identified and funding was supplied by the Government of Peru for the PNP river force and sixty patrol boats. In 1996, approximately 6,402 kilograms of cocaine base were seized on the rivers by the PNP.

 

Expanding DEA’s Anti-narcotic Efforts in Latin America

In 1996, Congress appropriated nearly $60 million dollars to expand DEA efforts primarily in Latin America as part of DEA’s strategy of investigating drug-related crime. Our initiatives are designed to disrupt the internationally-based continuum of narcotics trafficking by coordinating domestic and international narcotics investigations. DEA facilitate this process by focusing its international efforts on investigative leads developed during major domestic investigations. Concomitantly, intelligence developed abroad will be utilized by domestic offices to dismantle the U.S.-based infrastructure of these hemispheric trafficking organizations.

DEA’s foreign initiatives are designed to disrupt trafficking organizations by targeting their leadership, improving our response capabilities and investigative abilities in host nations, and building international support for drug law enforcement efforts. To be effective, our offices in Latin America develop intelligence for drug law enforcement to attack foreign-based organized criminal organizations. DEA also provides assistance to host nations to enhance their drug law capabilities thorough training and other forms of technical assistance. Our foreign efforts also assist domestic DEA offices in investigations and prosecutions of drug cases linked to Latin America.

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