LATIN AMERICA REVIEW SPECIAL ISSUE: SOUTH AMERICAN NARCOTICS: THE SPILLOVER COUNTRIES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T01184R000301700001-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 28
• Document Creation Date: December 22, 2016
• Document Release Date: January 3, 2011
• Sequence Number: 1
• Publication Date: July 5, 1985
• Content Type: REPORT

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Latin America
Review
Special Issue: South American Narcotics:
The "Spillover" Countries
5 July 1985
ALA LAR 85-015
5 July 1985
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Secret
Review
The "Spillover" Countries
The illegal narcotics industry that has long flourished in Colombia,
Bolivia, and Peru is spreading to Argentina, Brazil, Ecuador,
Paraguay, and Venezuela, which are increasingly serving as bases
for narcotics processing and cultivation.
Since 1980, domestic consumption of illegal narcotics has increased,
trafficking has attained major proportions, and Argentina has
reemerged as an important center for the storage and refining of
cocaine.
Intensified police pressure against the flourishing drug industry in
Colombia and Peru has given new impetus to trafficking in Brazil.
President Febres-Cordero's government is actively pursuing a
narcotics interdiction and eradication program to combat nascent
coca cultivation and trafficking, but will require substantial foreign
assistance to sustain a successful campaign.
Narcotics trafficking has increased dramatically in Paraguay since
the early 1980s, due to the involvement of corrupt officials and a
crackdown on trafficking in neighboring countries
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ALA LAR 85-015
5 July 1985
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Venezuela has become an important trafficking bridge between
Colombia and the United States, and evidence of indigenous drug
cultivation and cocaine processing is beginning to surface.
Articles have been coordinated as appropriate with other offices within CIA.
Comments and queries regarding this publication may be directed to the Chief,
Production Staff, Office of African and Latin American Analysis,
Secret ii
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Overview
The illegal narcotics industry that has long flourished
in Colombia, Bolivia, and Peru is spreading to
neighboring countries in South America. Many of
these countries have been drug transshipment centers
for some time, but they now serve as bases for
narcotics processing and increasingly for cultivation.
This issue of the Latin America Review will analyze
the dispersion of the drug industry by examining the
resurgence and growth of narcotics-related activity in
five countries-Argentina, Brazil, Ecuador,
Paraguay, and Venezuela.
Several factors have contributed to the expansion of
the drug industry. The major impetus in several
countries stems from the shift of trafficker operations
from Colombia, where the assassination last year of
Justice Minister Lara Bonilla precipitated a major
antinarcotics campaign. Moreover, severe economic
difficulties throughout the region, coupled with
growing domestic drug consumption, have increased
the incentives for local producers to enter the
lucrative narcotics trade. Further fostering this
proliferation is the fact that many South American
countries possess characteristics conducive to drug
trafficking, including:
? Vast, isolated, and sparsely populated areas ideal
for illegal activities.
? Climate and terrain suitable for coca, cannabis, and
opium cultivation.
? Long, poorly controlled borders that facilitate illegal
cross-border movement.
? Easy access by air and sea to markets in the United
States and Europe.
? Established banking and financial sectors that can
easily accommodate the movement and laundering
of drug revenues.
Faced with growing drug problems, governments in
four of the five countries-Paraguay is the
exception-have launched energetic antinarcotics
campaigns. New legislation in Venezuela stipulates
harsh penalties for trafficking and offers programs to
combat growing domestic drug abuse. Several
governments have named respected individuals to
direct antinarcotics efforts. These governments also
are strengthening the capability of their security
forces to deal with traffickers and are implementing
active eradication and interdiction programs.
International cooperation is growing-as evidenced,
for example, by increased collaboration between the
Venezuelan and Colombian armed forces and
attempts by Brazil and Venezuela to stem the cross-
border flow of precursor chemicals used in the
production of cocaine.
Nevertheless, the case studies indicate that major
obstacles hamper antinarcotics efforts. Each of the
governments lacks funds and technical expertise and
will continue to look to the United States for
assistance. The performance of security forces against
traffickers suffers throughout the region from
bureaucratic and turf rivalries and inadequately
defined missions. Corruption and official complicity
in the drug trade are also evident, although less
pervasive at this stage than in the major narcotics
trafficking countries. In sum, weaknesses in legal,
judicial, and security institutions in the five countries,
together with the enormous financial resources of the
traffickers and the region's dismal short-term
economic prospects, lead us to conclude that
governments will be hard pressed to prevent the
narcotics industry from continuing to expand.~
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ALA LAR 85-015
5 July 1985
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South
Pacific
Ocean
Chile
Trafficking route
.1': Cocaine-refining laboratories
?------ Provincia boundary
o Provincia capital
tJrugual.
South Atlantic Ocean
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Argentina
Argentina, traditionally on the periphery of the South
American illicit narcotics trade, is now becoming a
more important element in regional drug trade.
Throughout the 1970s cultivation of coca and
marijuana was minimal, Argentines were only
marginally involved in the production and refining of
cocaine, and domestic drug abuse was small scale.
Argentina did serve as a conduit for the export of
Bolivian cocaine to Europe and the United States, as a
transshipment point for European heroin en route to
this country, and as a safehaven for many
international drug dealers. But narcotics trafficking,
according to the DEA, was sharply curtailed by the
military regime that seized power in 1976.
The drug situation in Argentina, in our view, has
steadily deteriorated since 1980. Domestic
consumption of illegal narcotics is up, trafficking has
attained major proportions, and the country is
reemerging as an important center for the storage and
refining of cocaine.
Origins of the Problem
The resurgence of the narcotics trade coincided with
the closing years of the military government that
ruled from 1976 to 1983. Individuals in the Argentine
Army were involved in the 1980 coup that brought the
cocaine-trafficking regime of Gen. Garcia Meza and
Col. Arce Gomez to power in neighboring Bolivia.
According to the US Embassy, some Army officers
began to cooperate with their Bolivian counterparts in
cocaine production and marketing. When Garcia
Meza and Arce Gomez were ousted in 1982, Arce
Gomez fled across the border and continued to direct
drug operations from Argentina
Details of subsequent Argentine military involvement
in the drug trade are murky. DEA officials have
speculated that the decline in Army discipline and
morale after Argentina's defeat in the 1982 Falklands
war may have aggravated military corruption and
drawn some officers deeper into the narcotics
business.
Although the Bolivian connection and the continuing
Colombian Government crackdown on drug
trafficking provided the immediate impetus for the
growing Argentine involvement in the illicit drug
trade, other factors have also played a role:
? Argentina's strategic location and extensive air and
sea links with Western Europe and the United
States provide excellent channels for smuggling
cocaine.
? The sophisticated Argentine economy offers
traffickers many means to launder money, hide
operations, and acquire and transship chemicals
used in cocaine production.
? The saturation of cocaine markets in the United
States and Europe is forcing drug dealers to seek
new consumers. Argentina's relatively prosperous
and largely middle-class population is a tempting
target.
Dimensions of the Drug Trade
Argentina's main role in the South American cocaine
trade is as a trafficking nation. Cocaine seizures by
Argentine authorities increased from 98 kilograms in
1981 to 560 in 1983. The DEA currently estimates
that upwards of 6,000 kilograms per year of cocaine
are being transshipped through Argentina. According
to US Embassy and press sources, the most widely
used route is from Bolivia to the northwestern
Argentine provinces of Salta and Jujuy by air,
overland to Rosario, Buenos Aires, or other ports, and
then by sea or air to Europe and the United States.
Variations include passage through Paraguay and
northeastern Argentina, as well as via Chile and the
Argentine city of Mendoza, to shipment points on the
Atlantic coast. Little reliable information on
trafficking organizations is available; the Embassy
has reported the activities of a ring associated with
Arce Gomez and Bolivian cocaine magnate Roberto
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ALA LAR 85-015
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Suarez, and of the "South American League," a
loosely organized gang that includes Argentines,
Chileans, Brazilians, and Europeans.
In recent years Argentina has also emerged as a
production and storage center for cocaine. Cultivation
of coca-as well as of opium and marijuana-is
illegal and very limited in scale, according to the
DEA. A more serious development is the use of
Argentina as a refining site, where coca paste and
semirefined cocaine base are converted to finished
cocaine. The DEA believes that there are at least 15
to 20 cocaine-refining laboratories in northwestern
Argentina, as well as an undetermined number in
greater Buenos Aires. US officials now estimate that
roughly 75 kilograms per month of cocaine are refined
in Argentina, just under the amount needed to
categorize the country as a "major producer" by DEA
standards.
A final aspect of the drug trade is expanding domestic
consumption. DEA officials claim that cocaine use is
growing among the affluent and has penetrated the
middle classes in the northwestern provinces. The
press has confirmed widespread abuse of both cocaine
and marijuana in resort areas such as Bariloche and
Mar del Plata. The vast majority of the population,
however, is untouched by cocaine. Basuco-a mixture
primarily of coca paste and marijuana or tobacco that
is smoked largely by the lower classes in other South
American countries-has yet to appear in Argentina.
Drug use is increasing among the Argentine masses
but is mostly limited, according to the press, to glue-
sniffing and abuse of over-the-counter and
prescription medications.
Government Response
We believe that President Alfonsin appreciates the
degree and implications of the growing narcotics
presence in Argentina. The government has attempted
to educate the public about the drug problem through
statements by Alfonsin, official publications, and
cooperation with the media. Success in publicizing the
issue, however, has outstripped enforcement
capabilities. On the federal level alone there are five
separate agencies with drug-related responsibilities,
and coordination among them is poor. Overlapping
jurisdictions and rivalries between federal and
provincial law enforcement bodies further hamper
effective action. Lack of funds for expanded
enforcement activities is also an obstacle that, because
of the government's need to reduce its budget deficit,
will not be easily overcome.
Nevertheless, the US Embassy judges that
enforcement activity is gradually becoming more
effective. The Federal Police-the main antidrug
force-recently reorganized and expanded its
narcotics division. This unit, according to US
Embassy officials, alone seized 94 kilograms of
cocaine during the first 10 months of 1984, compared
to 74 seized the previous year by all Argentine police
agencies combined. The Border Police and customs
authorities have intensified drug interdiction against
operations, particularly chemicals used in cocaine
refining. The government has also established an ad
hoc interagency committee to coordinate drug
enforcement. A more formal coordinating structure is
awaiting presidential approval; if effectively
implemented, we believe it could significantly
enhance Argentina's overall antinarcotics effort.
Official Corruption and Terrorist Links
Effective enforcement is also being ham ered by
official complicity in the drug business.
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Ar entine authorities privately admit
knowledge o activities but claim they lack
enough hard evidence to prosecute successfully. There
are indications that other federal deputies and some
provincial police may be working with traffickers, and
higher level corruption could appear if the Argentine
drug trade develops further.
A problem that afflicts some major cocaine-producing
countries-cooperation between insurgent or terrorist
groups and drug traffickers-does not appear to have
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developed in Argentina. Some unconfirmed reports
allege that the Cubans and the leftist terrorist
Montoneros are implicated in Argentine trafficking,
but we doubt their veracity. Havana, we believe,
wants to maintain good relations with Buenos Aires
and probably would not jeopardize them through
involvement in illicit narcotics. The Montoneros, for
their part, are financially solvent and do not, in our
view, need the extra money-or want the police
attention-that would come from drug dealing.F_
A greater potential for drug money to finance political
activity in Argentina stems, in our view, from the
extreme right. Former members of the military, along
with elements of the civilian far right, could reforge
links with Bolivian traffickers that were established
during the Garcia Meza-Arce Gomez regime. We
have seen no hard evidence that active or retired
military personnel or rightist terrorists are currently
involved in the drug trade, but there exists, in our
view, a real possibility that in the future they could
turn to narcotics to finance destabilizing activities
against the Alfonsin government.
Outlook
We believe Buenos Aires's prospects for containing
the narcotics threat will hinge largely on the nation's
overall political and economic health. Better economic
conditions and a period of relative political stability
would probably lead to a substantial improvement in
Argentine enforcement capabilities. The political will
to combat the problem exists, in our view, and
Alfonsin is personally committed to taking action.
Official corruption, while growing, is far from
rampant and can probably be controlled. We believe,
for example, that given adequate evidence the central
government would prosecute drug-tainted individuals
The public is
becoming sensitized to drug-issues and appears to
support a crackdown on narcotics trafficking. Thus, if
the government spends more for drug enforcement
over the next few years and is stable enough to
establish a long-term program, we believe that
Argentina can avoid the serious social and political
ills that have afflicted South American countries
more deeply enmeshed in the drug network.
We are less optimistic about the situation if-as
seems probable-Argentina continues its economic
decline and remains politically unstable.
Notwithstanding Alfonsin's good intentions, we doubt
that a government plagued by labor unrest,
hyperinflation, a large budget deficit, and the threat
of a military coup could effectively focus on drug
enforcement. Under such circumstances official
corruption would probably spread, traffickers and
producers would take advantage of a more tenuous
law-and-order situation to expand their activities, and
domestic consumption probably would rise. Although
it might take four to seven years before the problem
reached crisis proportions, the end result would be
Argentina's full integration into the South American
drug empire.
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Narcotics Activity
GEORGETOWN N a r f H
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Marijuana cultivation area
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Brazil represents a fertile new frontier for traffickers.
Intensified police pressure against the flourishing
drug industry in Colombia and, to a lesser extent,
Peru has given new impetus to trafficking in Brazil.
Numerous drug kingpins have either relocated to
Brazil or have significantly stepped up existing
operations there. According to the US Embassy and
the DEA, evidence of extensive coca cultivation and
processing has surfaced during the last few years, and
marijuana production has increased.
Official and public concern over drug abuse and
trafficking is growing, according to US Embassy
reporting. Numerous articles in the press have called
for increased governmental action to combat rising
addiction and trafficking. The new civilian
government's Justice Minister has promised a
vigorous campaign against drug dealers. Police have
successfully carried out three major enforcement
operations since late last year.
Despite heightened public awareness and official
antinarcotics measures, drug trafficking in Brazil is
likely to increase, in our judgment. Pressing political
and economic concerns probably will divert official
attention and resources from narcotics interdiction.
Brazil's ill-equipped and undermanned police forces
will face an uphill struggle against sophisticated and
wealthy drug rings. At best, they may be able to slow
the rate of growth of the illicit narcotics trade.
Dimensions of the Problem
Brazil presents enormous opportunities for narcotics
dealers. Its climate is well suited for marijuana and
coca cultivation. Its territory, moreover, is too vast to
be patrolled effectively, and thick jungle canopy
makes aerial detection of coca fields and processing
facilities difficult. Chemicals utilized in the refining
process to make cocaine are manufactured locally.
The country's well-developed river transportation
network facilitates trafficking. Finally, the large
population presents a potentially lucrative target for
cocaine dealers, who face a glut in the US and
European markets.
Cultivation. At present there are no reliable statistics
on marijuana and coca cultivation in Brazil.
Marijuana production is concentrated primarily in the
central and northeastern states. Brazilian police
believe that most marijuana is sold in the domestic
market, but some may be shipped to Caribbean
countries, mixed with their production, and then sent
to the United States
western Amazonas state.
=Peruvian and Colombian traffickers have
encouraged local Indian populations to grow and
harvest coca leaf. coca
cultivation, originally confined to small, isolated fields
adjacent to the Colombian border, has grown to the
extent that it now dominates agricultural activity
along several stretches of the Amazon and its
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"completely saturated" with coca.
Processing. Local authorities believe that Brazil's role
in cocaine processing also is expanding. Cocaine base
laboratories-primitive facilities that convert raw
coca leaf into an intermediate product-were present
at nearly every cluster of coca fields discovered by
police during recent operations in western Amazonas
state. Even more important was the discovery of
several cocaine hydrochloride labs-larger, more
sophisticated facilities capable of producing finished
cocaine-and several stockpiles of cocaine-processing
chemicals such as ether, acetone, and hydrochloric
acid. Previously, Brazilian officials had believed that
most such facilities were located near major cities
such as Sao Paulo and Rio de Janeiro.
Trafficking. Brazil has long been a transit area for
processed cocaine from Bolivia, Peru, and Colombia.
Traffickers from those countries have taken
advantage of lax controls on both sides of the borders
with Brazil. According to US Embassy and DEA
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reporting, finished cocaine and cocaine base enters
Brazil in cars, trucks, buses, and private aircraft
flying to clandestine airfields, and on the country's
extensive river system. It is then transshipped to the
United States or Western Europe. Cocaine couriers
from Peru, Bolivia, and Colombia often fly to the
United States from Brazil rather than directly from
their own countries, in an effort to avoid detection by
US customs officials. Although trafficking networks
in Brazil have been dominated primarily by
foreigners, local authorities have noted an increase in
the number of Brazilian participants in recent years.
Consumption. The US Embassy reports that internal
consumption of illicit drugs is increasing in Brazil.
Drug abuse there traditionally has involved marijuana
and patent medicines, but the use of cocaine is now on
the rise, according to the Embassy. Lower prices for
cocaine and marijuana resulting from increased
supplies have led to a sharp upswing in usage among
both the lower and middle classes over the past year
or so.
Government Response
Brazilian antinarcotics enforcement efforts have
increased over the past decade under successive
military regimes and the new civilian government. In
1975 police destroyed 60.3 tons of marijuana. In 1983
they eradicated 1,037 tons, and last year they
destroyed 3,000 tons. Seizures of marijuana rose from
363 tons in 1982 to 4,000 tons in 1984. Similarly,
cocaine seizures grew from 43 kilos in 1975 to
approximately 800 in 1984.
The federal police have carried out three successful
operations against drug dealers since late last year:
Operating principally in Amazonas State, they
mounted their largest eradication effort ever in late
1984, destroying more than 2 million coca plants
and over 125 coca plantations.
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? In "Operation Eccentric" early this year, police in
six states netted scores of Brazilian, Colombian,
Peruvian, and other traffickers; seized large
quantities of processing chemicals and documentary
evidence; and razed three processing laboratories.
? Police in Sao Paulo made a major arrest in June
1985, seizing pure cocaine valued by the Sao Pauli
authorities at $3.5 million and apprehending five
suspects, including a well-known Bolivian trafficker.
Brazil also is attempting to improve cooperation with
neighboring countries in narcotics interdiction. The
US Embassy reports that the Brazilian police have
made arrangements for intelligence sharing with
Colombian authorities on trafficking activities in the
border area. According to the Embassy, the Brazilians
are confident that cooperation with Colombia will
increase. Although they are less sanguine about
prospects for collaboration with the Peruvians and
Bolivians, they plan to hold discussions with
representatives of those countries on joint methods for
combating trafficking.
Outlook
We believe that the Brazilian authorities may be able
to slow the expansion of the illegal narcotics trade,
but they will have to increase resources devoted to the
problem significantly if they are to suppress it. The
overall financial difficulties facing the new
government probably will complicate attempts to
allocate sufficient funds to launch a massive antidrug
effort. Continued reliance on the police-now plagued
with organizational problems, poor training, and
limited resources-will continue to hinder detection
and interdiction at both the federal and state levels.
Moreover, legal prohibitions against wiretapping and
plea bargaining will further restrict investigative and
enforcement efforts.
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In what we regard as a less likely, worst case scenario,
the narcotics problem might well become acute if
Brazil's economic and political situation deteriorates
sharply. Economic deterioration also would spur the
trend among backlands peasants toward substitution
of coca for other crops. Official drug-related
corruption, apparently not widespread to date,
probably would increase sharply. In addition, in a
worsening economic and political climate, Brazil
could experience a resurgence of terrorist and
guerrilla movements. Such groups might establish
links with narcotics traffickers, as insurgents have
done in other countries.
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For years, Ecuadorean officials did not regard the
growing drug trafficking in the region as posing a
serious threat to their country's basic institutions.
Recently, however, they have initiated tentative
efforts to halt trafficking and cultivation. The
assassination of the Colombian justice minister by
drug traffickers in April 1984 and the ensuing war
against drugs there served to sensitize the
Ecuadoreans. The realization that Ecuador provides a
refuge for traffickers fleeing Colombia, together with
growing concern about domestic drug abuse, also
helped persuade officials in Quito of the need for
action. Coming to office last August, President
Febres-Cordero has moved swiftly to mobilize
government resources against the traffickers. His
government is actively pursuing a narcotics
interdiction and eradication program to combat its
nascent coca cultivation and trafficking problem, but
will require substantial foreign assistance to sustain a
successful campaign.
The Nature of the Problem
Ecuador traditionally has served as a natural land
bridge for coca products moving from Peru and
Bolivia to Colombia for final processing and
distribution. Security along Ecuador's porous borders
is inadequate and traffickers are able to move their
contraband with little risk, according to the United
Stats, Embassy. DEA estimates that 4 to 6 tons of
cocaine paste, cocaine base, and hydrochloride transit
Ecuador annually. Some 75 percent of the coca
derivatives are destined for Colombia, while the
remainder is processed in local laboratories and then
shipped to markets in the United States, Canada, and
Europe, according to the Embassy.
Coca has been grown in Ecuador for at least the past
four years, but recent discoveries of widespread
cultivation-particularly in the remote jungle region
centering in Napo Province and running along the
border with Colombia-have caused DEA to rank the
country as a major narcotics producer. DEA estimates
that 1,000 hectares of coca were under cultivation
nationwide in 1984, with an average yield of 1,000
kilograms per hectare. The potential amount of
cocaine hydrochloride that could be produced from
this crop is estimated at 2 metric tons. A government
eradication effort earlier this year that led to the
discovery of at least 2,000 hectares-and perhaps as
much as 5,000 hectares-of cultivated coca suggests
that these estimates probably are understated. 25X1
No opium cultivation has been detected and
marijuana production is minimal, according to the
Embassy. Ecuadoreans rely on Colombian marijuana
for domestic consumption because it is cheaper and of
higher quality.
Unlike Bolivia, coca growers are not well organized,
according to the US Embassy. A major reason for this
presumably is the large percentage of Colombians and
Peruvians who reportedly own Ecuadorean coca
plantations. Because of the continuing crackdown by
Colombian authorities, as well as the ideal growing 25X1
conditions and relatively lax enforcement procedures
in Ecuador, we believe that the number of foreigners
involved in cultivating and processing coca in Ecuador
is likely to increase.
Coca Trafficking
In contrast to coca growers, domestic coca traffickers
are well organized and often participate in
interrelated and mutually supportive networks. The
Mayon Jurado clan is illustrative of how a large
Ecuadorean trafficking organization operates.
Aquilino Mayon Jurado and his brothers transport
300 to 500 kilograms of cocaine base each month,
after purchasing cocaine base from extended family
members in northern Peru. They transport the cocaine
to their operations center in southwestern Ecuador by 25X1
speedboats, which are too fast for either the Peruvian
or Ecuadorean Coast Guard to intercept. The family
also uses the Payana Islands, near Ecuador's
southernmost coastline, to store cocaine before
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moving it via small boats to larger fishing boats
waiting in the open sea. The cocaine is then
transported to such coastal ports as Posorja,
Guayaquil, or Manta
Traffickers also are involved in purchasing legitimate
businesses to cover their operations and to facilitate
money laundering. For example, Victor Hugo Reyes,
a major trafficker who operates in Loja Province,
laundering his money, Reyes formed his own bank in
1983,
Trafficker/Terrorist Links
We have not been able to substantiate Febres-
Cordero's claims that that the Alfaro Vive, Carajo!
(AVC) terrorist group is involved in drug trafficking.
The US Embassy has received unconfirmed reports of
AVC involvement in coca cultivation in Esmeraldas
Province, and we do not rule out this possibility.
Nevertheless, the fact that Esmeraldas is not a major
coca-producing region, coupled with ongoing efforts
by the AVC to generate revenue through bank
robberies, kidnapping, and extortion, suggests that the
group has not yet become involved in trafficking.
Government Interdiction and Eradication Efforts
Under Febres-Cordero the government has
demonstrated a strong commitment to drug
eradication and interdiction. Heading this effort is a
national drug coordinator, Army Col. Mario
Montesinos, who supervises enforcement activity
carried out by government agencies.
The workhorse of the eradication and interdiction
effort is the National Police Narcotics and Interpol
Service, a unit of the Ecuadorean National Police.
The National Directorate for the Control of Illicit
Narcotics, which is the enforcement and intelligence
gathering arm of the Attorney General's Office, has
tended to compete with the police for control of drug
enforcement. The US Embassy reports that Colonel
Montesinos plans to eliminate the directorate's police
functions and limit it to drug prevention programs.
The Border Interdiction Agency of the Customs
Military Police traditionally has been ineffective in
drug enforcement due to corruption and apathy, but
Montesinos is trying to revitalize the agency.
Last September the government launched its first
coca eradication attempt-an 11-day mission into
Napo Province labeled "Operation Santiago."
Contingents from the Army, which provided
helicopter support, joined the National Police and
DEA in destroying approximately 30 hectares of
cultivated coca and eight coca paste laboratories.
They also arrested a number of Colombians and
Ecuadoreans. The security forces found plants of both
the Colombian and Peruvian leaf variety averaging 6
to 8 feet in height, but with some as tall as 12 feet,
among the largest in South America.
and DEA reports.
"Operation Santiago II" began last November and
covered an area farther east along the Putumayo
River on the border with Colombia. It resulted in the
destruction of 83 hectares of mature coca and 19 coca
paste laboratories, according to DEA. In February a
third eradication campaign was mounted in the
Putumayo river area that destroyed 152 hectares of
cultivated coca and 18 coca paste laboratories. In
addition, 995 grams of cocaine paste were seized and
19 Colombians arrested, according to US Embassy
In March, the largest cocaine seizure in Ecuadorean
history was made when an Interpol officer during a
routine highway interdiction operation in Esmeraldas
Province discovered 640 kilos of cocaine
hydrochloride in a truck. The Embassy reports that
this was the last of four shipments from Colombia and
was to have been consolidated with the earlier
shipments and flown out of Ecuador to the United
States.
Other Antinarcotics Measures
In Ecuador as elsewhere pervasive corruption among
law enforcement and judicial officials is a serious
impediment to countering drug trafficking effectively.
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Senior police officials have been particularly
susceptible to corruption as have lower court judges.
Indeed, the Supreme Court concluded in a study in
1983 that low salaries for court officials, coupled with
a poor record of convicting judges for accepting
bribes, greatly complicate efforts to eliminate
corruption in the judicial system.
The Febres-Cordero administration is working
diligently to control this problem, according to the US
Embassy. Law enforcement officers linked to
traffickers are being removed. In addition, the
President has vowed to investigate members of
Congress believed to be involved with the traffickers.
Febres-Cordero has indicated that he is willing to sign
an extradition treaty with the United States that
would include the extradition of US and Ecuadorean
citizens charged with narcotics-related offenses.
Ecuador probably will conclude a similar treaty with
Colombia this year. In addition, both countries have
signed a protocol calling for increased cooperation in
exchanging information on traffickers, conducting
joint police operations along the border, and
establishing import controls on precursor chemicals.
Outlook
We believe that there are a number of factors that
may allow the government to control the coca
trafficking and cultivation problem before it reaches
the proportions of Colombia's and Peru's. Febres-
Cordero's strong commitment to drug enforcement,
coupled with the successful interdiction campaigns in
Napo Province, are positive signs. The fact that there
is no traditional indigenous use of coca and that only a
small number of peasants rely on it as a cash crop,
should lessen the resistance to government eradication
programs. Moreover, Bogota's willingness to
cooperate against the traffickers will facilitate border
interdiction operations.
In our judgment, evicting Colombian plantation
owners from the border area probably is feasible
because they operate primarily within a narrow strip
in Napo Province along the border with Colombia.
Also, they do not appear to have developed the kind of
sophisticated intelligence, trafficking, and processing
network that supports their operations in Colombia.
Cracking down on Ecuadorean coca traffickers will be
more difficult because they have well established
family support nets and have been in business for
many years. Curbing domestic coca cultivation and
conversion may pose the greatest challenge because of
the lure of large profits. In any event, Ecuadorean
officials will remain heavily dependent on US
financial and technical support as they press forward
with antinarcotics measured
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Narcotics Activity
Bolivia
Trafficking route
Cocaine-refining laboratories
Marijuana cultivation area
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Paraguay
Paraguay has long served as a transshipment route for
cocaine produced illicitly in neighboring Bolivia.
Corrupt Paraguayan military and civilian officials
have played key roles in expediting this traffic. No
coca cultivation takes place in Paraguay, according to
US Embassy reporting, F_ -1
processing
facilities for cocaine have been established at several
locations on Paraguayan soil. A limited amount of
marijuana is cultivated illegally by Paraguayan
farmers for domestic consumption and export.
According to the US Embassy, narcotics trafficking
in Paraguay has increased dramatically since the
early 1980s, following a lull that began in the mid-
1970s. The resurgence appears to be partly a result of
the scaling down of a large Paraguayan-Brazilian
hydroelectric project that had been a major source of
revenue for Paraguay in general and for corrupt
officials in particular. Government measures taken in
neighboring countries against narcotics traffickers
also help account for the rise in trafficking in
Paraguay,
Dimensions of the Drug Problem
Tra ficking. Paraguay's role in South American
cocaine trafficking stems from the country's
contiguous border with coca-producing Bolivia. Some
traffickers in Bolivia use small planes to transport
narcotics into Paraguay's thinly populated Chaco
region, while
some coca reportedly is shipped downriver from
Bolivia to the Paraguayan town of Bahia Negra.
Narcotics are then transshipped to Argentina and
Brazil, and ultimately to the United States and
Western Europe. Both cocaine and marijuana pass
into Brazil through the border towns of Puerto
Presidente Stroessner and Pedro Juan Caballero. In
addition, according to the US Embassy, cocaine
couriers increasingly are using Asuncion's
international airport.
Processing. US Embassy, DEA,
have reported in recent years that processing of
Bolivian coca products is taking place at a number of
been established near the town of San Estanislao on
land owned by government officials. The US Embassy
reported in late 1984 that the information on
processing inside Paraguay was still unconfirmed, but
in our view there is a strong likelihood that such
facilities have been established.
Marijuana Cultivation. Illicit production of
marijuana provides subsistence income for hundreds
of tenant farmers in eastern Paraguay, according to
the US Embassy. Paraguayan government statistics
indicate that almost 4,000 tons of marijuana were
harvested in 1984-a 22-percent increase over the
1983 level. The cultivation of marijuana has replaced
fiber and food crops in some areas. Some of the
marijuana is consumed locally, but most reportedly is
exported to Brazil and Argentina.
Consumption. Drug use historically has not been
widespread in Paraguay. Reports from a number of
sources suggest, however, that consumption of both
marijuana and cocaine may be increasing. According
to the US Embassy, marijuana consumption is
concentrated in the lower socioeconomic classes, while
cocaine use is limited almost exclusively to the upper
class.
Official Corruption
Paraguayan military and civilian officials historically
have participated both directly and indirectly in a
wide range of contraband activities, and this has
increasingly included narcotics trafficking over the
last few years.
leading military officers provide protection for
narcotics operations and that some engage directly in
narcotics trafficking ventures themselves. According
to the US Embassy, major private traffickers are
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immune to prosecution because of their political,
financial, and family connections with Paraguayan
officials.
blocked for several months the extradition to the
United States of heroin kingpin Auguste Ricord, who
was arrested while using Paraguay as a major
transshipment center in the 1970s. Since 1983 the
Embassy has received reports it regards as reliable
indicating furnishes protection for
traffickers of cocaine and cocaine-processing
chemicals. According to Embassy and
steady stream of reports since late 1983 indicating
rovides rotection to cocaine
traffickers
Seizure of Cocaine-Processing Chemicals
In September 1984, Paraguayan customs officials at
Puerto Presidente Stroessner impounded a large
shipment of hydrochloric acid, acetone, and ether-
chemicals used in the production of cocaine.
According to the US Embassy, the amounts seized,
reportedly totaling some 140 tons, far surpass
Paraguayan medical or industrial needs. The
Embassy reported that the chemicals came from West
Germany and were being transshipped through Brazil
and Paraguay to Bolivia. The intended recipient in
Bolivia, was the drug
ring headed by Roberto Suarez
At US urging, Paraguayan judicial authorities have
ordered that the chemicals be destroyed. The
government, however, has delayed taking action-an
indication that influential Paraguayans associated
with narcotics traffickers may be trying to block
destruction. Paraguayan proposals that the United
States purchase the chemicals have been rejected by
Washington, and the issue has become a significant
bilateral irritant. According to the US Embassy,
Paraguay may resolve the problem by returning the
chemicals to the West German company that
manufactured them.
Government Antinarcotics Efforts
The National Department of Narcotics and
Dangerous Drugs (DNNDP), which is part of the
Ministry of Interior, is charged with controlling
narcotics in Paraguay. High-level DNNDP officials
receive training from DEA. The DNNDP's
capabilities are severely restricted by a lack of
adequate funding and by the widespread corruption
among government and judicial officials, which
enables well-connected traffickers to avoid arrest and
prosecution. The DNNDP is most effective when
investigating low-level, relatively unimportant cases,
according to the US Embassy.
Outlook
Although President Stroessner may take limited steps
against drug trafficking in response to Western
pressure, we believe he would crack down seriously
against traffickers only if he became convinced that
domestic narcotics consumption were on the rise and
could lead to social problems. No one other than
Stroessner has the power to curb the influential
generals and others who profit from Paraguayan
trafficking. In our judgment, moreover, it would be
difficult even for the President to take action against
these powerful people-particularly General
Rodriguez. Stroessner did move against narcotics
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because of heavy international media attention
but th
array of people now involved in drug trafficking in
Paraguay would pose a major obstacle to any serious
new effort to bring the problem under control. F-
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Trafficking Routes
Refined cocaine
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Venezuela has become an important drug trafficking
bridge between Colombia and the United States in
recent years. Moreover, evidence of indigenous drug
cultivation and cocaine processing is beginning to
surface, and conditions for a flourishing drug industry
clearly are present. Faced with rising cocaine
consumption at home, the Lusinchi government has
launched a vigorous drug control campaign.
Nevertheless, strict enforcement of its tough new
antidrug law will be hampered by interagency
rivalries, inadequate resources, and official
corruption. Although cooperation with neighboring
countries-especially Colombia and Brazil-should
aid Caracas's efforts to reduce the inflow of drugs and
refining chemicals, we believe that Venezuela will
continue to be a major transshipment center. F___-]
The Venezuela Springboard
Until recently, Venezuela had not been seriously
affected by the narcotics epidemic in the Andean
region. The discovery of a shipment of cocaine worth
approximately $300 million in a private plane at an
airport near Caracas in September 1983, however,
underscored to Venezuelan leaders the extent to
which their country had become a transshipment
center. During the following six months, raids and
confiscations netted more than 1.6 metric tons of
cocaine eight times the 1982 total.
Traffickers encounter fewer obstacles bringing drugs
into Venezuela than taking them out.
raw coca leaves are harvested in
Bolivia and Peru, converted to a coca paste and base,
and brought to Colombian refineries, many of which
are situated in or near the Ilanos region that stretches
across Colombia's frontier with Venezuela. In this
remote, sparsely inhabited, and essentially unpoliced
area, traffickers can cross an unguarded border nearly
600 miles long with impunity. On the Venezuelan side
of the border, there are no control towers for
monitoring air traffic, and private aircraft can use
hundreds of crude landing strips. The governor of the
Venezuelan state adjoining the Colombian llanos has
told US officials that the state capital, San Fernando,
located on the upper Orinoco River, is becoming an
important center for Colombian-based drug
trafficking.
There are multiple avenues for funneling cocaine out
of the country. Shallow-draft boats transport it from
the upper Orinoco River to Ciudad Bolivar, where
they link up with ships bound for Europe and the
United States. Commercial airlines operate daily
from Venezuela's six international airports to major
US cities, including Miami and New York.
Alternatively, small aircraft operating from the
interior can easily reach the offshore Venezuelan
island of Margarita or such Caribbean islands as
Aruba and Trinidad and Tobago for refueling en
route to the United States. Trinidad, in particular, is
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small planes frequently stop there, unload their
contraband, and return directly to the mainland,
according to the US Embassy. Also, reports in the
local press identify San Jose de Amacuro in the delta
area of the Orinoco River-a short distance from
Trinidad and Tobago-as a major trafficking
crossroad.
Drug smugglers also take advantage of Venezuela's
1,750-mile-long coastline. It is serviced by six major 25X1
and 17 minor official ports and poses serious
surveillance and enforcement problems for the
Venezuelan Coast Guard.
traffickers frequently make airdrops along
Venezuela's northern shore where mother ships
retrieve them.
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In addition to cocaine, which accounts for nearly 85
percent of the value of the country's drug trade, the
DEA reports that Venezuela also has become a major
transshipment point for chemicals used to refine coca
into cocaine base and hydrochloride. When the
Colombian Government began controlling the
importation of ether and acetone in 1983, Colombian
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traffickers apparently turned to Venezuelan
intermediaries. To stem such activity, the Lusinchi
government began last November to require importers
of refining chemicals to obtain a government permit.
In a 90-day period following this move, Venezuelan
authorities impounded over 230,000 gallons of ether
and acetone. These chemicals-mainly Brazilian in
origin-could have been used to produce over 48
metric tons of cocaine hydrochloride, according to
DEA analysts. In all, an estimated 500 metric tons of
precursor chemicals were shipped from Brazil to
Venezuela in 1984. As part of a joint antidrug effort
initiated late last year by Brazil and Venezuela,
Brasilia now reports directly to Venezuelan
authorities on this activity and is pushing new
legislation to control trade in drug-processing
chemicals.
The Domestic Drug Scene
Production and Processing. According to DEA, coca
cultivation was confirmed for the first time on 5
March 1985 when the Venezuelan National Guard
reported finding approximately 12,000 coca bushes,
intercropped with banana and yucca plants, growing
on about 15 acres of land located in a remote region of
the Perija Mountains near Venezuela's western
border with Colombia. This discovery lends credence
to reports that Colombian traffickers are expanding
coca cultivation outside of traditional growing areas.
According to press reports, in July 1984 the
Venezuelan intelligence service shut down a cocaine-
processing laboratory allegedly operated by
Colombian trafficker Gustavo Duran Batista. In
November 1984 the National Guard, using
information supplied by DEA
seized a cocaine-processing site containing 1,300
drums of acetone, 200 drums of ether, and 130 drums
of hydrochloric acid, as well as cocaine-processing
apparatus, in the western state of Tachira near the
Venezuelan-Colombian border. In March 1985 the
National Guard raided an operational cocaine-
processing laboratory in Apure and seized 850 grams
of cocaine following the arrest of Pedro Jesus
Ramirez.
Consumption. Rising consumption, rather than large-
scale production or processing, remains Venezuela's
most important indigenous drug problem. Although
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estimates of the number of drug offenders in
Venezuela vary widely, a drug treatment adviser to
the Youth Minister believes users may number up to 5
percent of the population, or about 750,000 people.
Reflecting the fact that drug abuse is especially acute
among teenagers, a survey by the Youth Ministry of
drug use in high schools indicated that 55 percent of
students in Caracas had tried cocaine at least once,
while 10 percent claimed to be regular users. Even if
the survey overestimates the problem, the results
corroborate other reports that teenage cocaine use is
on the rise. the Caracas
Psychiatric Hospital's drug treatment division says
that the majority of his cases involve cocaine. Most of
his patients are youths, and the number of cases
handled by his unit nearly doubled between 1982 and
1984. In addition, there is mounting evidence of
widespread drug abuse among armed forces
personnel.
Commercial and Economic Implications. A report by
the Venezuelan Congress indicates that the country's
burgeoning drug business amounts to $1 billion a
year-roughly equivalent to the combined value of all
nonpetroleum exports. Press reports set the figure at
over $3 billion. Moreover, Venezuela apparently has
become an important banking center for South
American drug traffickers in need of money-
laundering facilities, but there are no reliable
estimates regarding the amount of money involved.
The growth of drug trafficking in Venezuela coincides
with a severe downturn in the country's economic
fortunes due to the world oil glut of recent years.
Economic problems associated with shrinking oil
revenue-which accounts for more than 90 percent of
the country's export earnings-have increased the
incentives for Venezuelans to become involved in the
lucrative drug trade. By the same token, the
prolonged recession is hampering the government's
ability to allocate the funds necessary for an effective
drug enforcement effort.
Government Efforts
Since assuming office in February 1984, President
Lusinchi has responded to the growing problem by
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Accused drug traffickers (left to right) Ciro Martinez, Edgar Diaz,
and Rick John Kaminsky are awaiting trial in an Anzoategui jail.
taking several significant steps to strengthen
Venezuela's counternarcotics capabilities. Most
notably, he has established a multiagency drug
intelligence center, concluded a treaty with Colombia
aimed in part at stopping cross-border drug
movements, and shepherded through Congress a strict
antidrug law. F___-]
The legislation for the first time defines drug offenses,
assigns penalties of up to 30 years in prison for
offenders, breaks new legal ground by incorporating
drug offenses into the military code, and creates the
legal status of "witness for the prosecution." The new
law should help authorities combat the spillover of
trafficking activity from Colombia. The law also gives
magistrates the option of permanently expelling
foreigners convicted of drug offenses.
The new antidrug law was exercised for the first time
in early June 1985 when two Venezuelans-Ciro
Martinez and Edgar Diaz-and an American, Rick
John Kaminsky, were arrested and charged with drug
smuggling following an investigation that began in
February 1984 after 36 small airplanes were captured
at various unregistered airstrips in Venezuela.
According to press accounts, Martinez, known
internationally as the "Venezuelan drug czar," is
reputed to have strong ties with Colombian
traffickers.
Law enforcement efforts against the traffickers have
been hampered somewhat, however, by turf fighting
among the three security force units that share
responsibility for drug enforcement. The Technical
Judicial Police, which is responsible to the Ministry of
Justice, is the lead agency. It carries most of the drug
caseload, but its 25-member antidrug unit in Caracas
is severely understaffed and has no field offices or
local agents to share the burden. Justice Minister
Manzo's dissatisfaction with the performance of the
judicial police recently caused him to revamp its
entire senior leadership, and new director Pedro
Torres Agudo is committed to a vigorous antidrug
effort, according to the US Embassy.
The National Guard has no specific drug enforcement
unit, but, as a multipurpose law enforcement agency,
conducts raids and other counternarcotics operations
and maintains records on drug seizures. Under Maj.
Gen. Alfredo Sandoval Hernandez-reportedly a
close Lusinchi confidante-the National Guard has
assumed an increasingly important role in controlling
drug traffic, especially along the Venezuela-Colombia
border. Cooperation between the Venezuelan and
Colombian armed forces is the centerpiece of the two
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countries' joint program to curtail drug movements.
Military units on both sides of the border share radio-
frequencies, and commanders at the battalion level
and below meet regularly to exchange information.
The Division of Intelligence and Security Services is
charged with intelligence collection on national
security matters and investigation of crimes against
the state, but also is responsible for investigating the
illegal transfer of drugs. Because it suffers from a lack
of both personnel and an independent indictment
authority, it is forced to coordinate all prosecutions
with its bureaucratic archrival, the judicial police.
The public image of the intelligence and security
services, which are housed within the Ministry of
Interior, has been tarnished because of superficial
resemblances to the "political police" that served past
Venezuelan dictatorships, according to the US
Embassy.
The Lusinchi government has augmented its drug
enforcement efforts by relying on the Ministry of
Youth to give greater attention to drug treatment and
drug education. In keeping with the 1984 antidrug
law, the government has established several treatment
centers and plans to open others. It also has
established a youth foundation to promote sports and
recreational activities as an alternative to drug use.
Despite these efforts, authorities acknowledge that
much remains to be done. For example, Venezuela
has the capacity to treat only about 200 drug users on
an inpatient basis, and its public elementary schools
have no regular drug education programs.
The government's antidrug efforts are impeded by
official corruption. Venezuelan drug enforcement
officers told US officials last January that members
of the three security forces involved in drug
enforcement, as well as several judges, were accepting
bribes from an organization involved in supplying
chemicals to cocaine-processing laboratories in
Colombia
The potentially most serious aspect of drug-related
corruption involves the military. According to the US
Embassy, Venezuelan authorities believe a retired
Navy lieutenant, who is now a fugitive, may have
headed a trafficking ring that was responsible for the
huge cocaine shipment seized near Caracas in
September 1983. Police are seeking a retired Air
Force major in connection with a sizable cocaine
discovery in February 1984. Justice Minister Manzo
publicly has linked this officer to the trafficking
organization of Colombian drug kingpin Carlos
Lehder. The murder of a member of the judicial
police who was probing allegations of police
involvement in cocaine smuggling, apparently by
members of his own force, lends credibility to the
widely held belief that traffickers have bought off
some police officials.
Information Gaps
In recent months, the Lusinchi government has
reported a growing number of drug seizures, but
trafficking in Venezuela may be more extensive than
local officials acknowledge. The Intelligence
Community's ability to monitor narcotics-related
activity is limited by the absence of consistent,
detailed special intelligence reporting on trafficking in
the llanos region of Venezuela or Colombia. We also
lack comprehensive imagery coverage of likely coca
production and processing areas in the region along
Venezuela's border with Colombia. Improved
collection of information about drug trafficking
networks in Venezuela and their possible links to
Colombian traffickers and insurgent groups also is a
priority. In addition, the extent of money-laundering
services performed wittingly or unwittingly by
Venezuelan banks remains unclear
Outlook
The Venezuelan Government has several advantages
as it grapples with the growing drug problem. In
contrast to other Andean countries, especially Bolivia
and Peru, there is no deeply entrenched tradition of
drug cultivation or use. Consequently, Venezuela has
no politically powerful coca growers' associations to
deal with or large rural populations economically
dependent on or culturally attached to coca or
cannabis production. We believe the Lusinchi
administration's antidrug measures will help impede
the formation of an indigenous cocaine-processing
industry. The 1984 antidrug law will serve as a
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deterrent to domestic drug dealing, and the
government's drug-education program should slow the
growth of domestic consumption
Nevertheless, the spillover from the crackdown in
Colombia will continue to challenge the Lusinchi
administration's ability to respond. If the Betancur
government and its successor in Colombia continue a
full-scale effort against domestic traffickers,
Venezuela will become increasingly attractive not
only for transshipment but also for cocaine
production. Should Colombian-based drug
organizations succeed in insinuating themselves into
the local economies of Venezuela's border states-an
effort that already is under way-the government's
task will be magnified significantly.
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