SOUTH AMERICA: THE EXPANSION AND MODERNIZATION OF THE ILLICIT COCAINE INDUSTRY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87T01127R000500380004-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 45
• Document Creation Date: December 22, 2016
• Document Release Date: January 24, 2011
• Sequence Number: 4
• Publication Date: March 1, 1986
• Content Type: REPORT

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Directorate of Secret
Intelligence
_
South America: The Expansion
and Modernization of the
Illicit Cocaine Industry
A Research Paper
--Seeret--
GI 86-10016
March 1986
Copy 368
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Directorate of Secret
Intelligence 25X1
South America: The Expansion
and Modernization of the
Illicit Cocaine Industry
A Research Paper
This paper was prepared by Office of
Global Issues, based on contributions from
he Strategic Narcotics/Western
Hemisphere Branch, OGI. It was coordinated with
the Directorate of Operations.
Comments and queries are welcome and should be
addressed to the Chief, Terrorism/Narcotics Analysis
Division, OGI,
Secret
GI 86-10016
March 1986
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Summary
Information available
as of! February 1986
was used in this report.
South America: The Expansion
and Modernization of the
Illicit Cocaine Industry
Intensified narcotics control efforts in South America, particularly in
Colombia, have disrupted trafficking operations and driven up the cost of
doing business. The illicit cocaine industry, however, has shown remark-
able ability to adjust to enforcement efforts, and the large profits from
cocaine sales provide traffickers with the financial resources to relocate
operations. In particular, traffickers take advantage of the differences in
the nature and priority of the governments' control programs.
Cultivating and processing coca are highly attractive to South American
campesinos; no licit crop could approximate the income from drug crops.
We estimate the 1985 harvest at 140,000 to 200,000 metric tons of leaf, or
about 1 metric ton per hectare cultivated. Peru, Bolivia, and Colombia are
the major coca producers, but coca fields have also been found recently in
Brazil, Ecuador, and Venezuela. Better cultivation practices?including
moisture retention schemes, nursery propagation, contour planting, and the
use of modern fertilizers, pesticides, and herbicides?are increasing yields.
Farmers and traffickers have adopted simple technological improvements
for drying and macerating the leaf before initial processing that should
raise cocaine alkaloid yield and minimize loss over traditional methods.
In response to government pressure and market factors, major traffickers
are strengthening their operations through organizational improvements,
such as increasing vertical integration and cooperation among trafficking
organizations. Aggressive attempts to create a mass appeal for cocaine and
to expand the marketplace beyond the United States to Europe and Asia
will help traffickers avoid the consequences of overproduction in the future.
Smuggling techniques are becoming more ingenious in response to interdic-
tion pressure; some large traffickers have insurance schemes to protect
against the loss of the big shipments. Large traffickers can construct
processing laboratories using trained chemists and sophisticated equipment
that can efficiently produce tons of the drug at one site.
Drug control efforts face an uphill battle. Interdiction is difficult because
geography favors the traffickers. Eradication programs, although expand-
ing, are labor and money intensive and have not been able to keep pace
with expanded coca cultivation. Crop substitution, judicial action, control
of essential chemicals, rural development, and public-awareness campaigns
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GI 86-10016
March 1986
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have shown some success in individual countries, but more international
cooperation is needed to prevent growers and traffickers from relocating
their operations.
We judge that the situation in most cocaine trafficking countries will
continue to worsen in the near term, but that this deterioration may well
provoke additional public and official moves to significant action. Rising
domestic drug abuse, violence and corruption, potential insurgent involve-
ment, and the growing power of major drug dealers have already led some
South American leaders to conclude that cocaine is no longer exclusively a
foreign problem. Public opinion also seems to be shifting in favor of more
controls.
Some tentative steps are being taken toward regional cooperation?a key
ingredient to successfully combating cocaine traffickers. If a successful
alliance against drugs can be achieved among the key South American
countries, it will lessen the options open to traffickers for expansion and
evasion of enforcement activities. Traffickers' cross-border tactics, in
particular their ability to flee areas of enforcement to set up shop
elsewhere, could be stymied by the creation of more uniform international
drug suppression mechanisms. Recently, South American leaders have
begun to call for the internationalization of antinarcotics efforts. We
believe a concerted regional South American antidrug effort with broad
international backing would enhance existing national programs in the
area.
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Contents
Page
Summary
iii
Introduction
1
Cultivation: On the Increase
1
Peru: The Preeminent Producer
2
Bolivia: Number Two
2
Colombia: A Poor Third in Cultivation
4
Other Countries: Up and Coming
5
Better Cultivation Practices
5
Processing: Improved Efficiency
6
Trafficking: Strengthening Through Organization
10
Vertical Integration
10
A Cocaine Cartel
10
Expanding the Marketplace
12
Sophistication in Shipping
12
Keeping Up Supply
13
Drug Control Efforts: An Uphill Battle
13
Interdiction
13
Eradication
14
Crop Substitution
15
Control of Chemicals
16
Demand Reduction and Public Awareness
16
Legal Reform
18
Expansion Into Neighboring Countries
18
Obstacles to Control
20
Profits Still Outweigh Losses
20
Political and Practical Constraints
23
Corruption Undermines Effectiveness
24
Lessons Learned
26
Domestic Abuse
26
Violence
26
Challenge to the Establishment
26
Insurgent-Trafficker Collusion
27
Economic Impact
27
Regional Approach
27
The Spillover Countries
28
European Assistance
28
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Figure 1
Coca Cultivation
Caribbean
Sea
AM
Barranqu
Cartagena
Netherlands Antilles
Arubat4 IN.thprland.)
(Nleth ) Bonaire
Curacao
VA
Confirmed cultivation
Suspected cultivation
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aracaiho
CARACAS
390 mometers
300 Miles
Pro ince
Venezuela ?'
North
Pacific
Ocean
*BOGOTA
Guavlare
aa
Vista
Rio Negro
-1
Manaus
South
Pacific
Ocean
Boundary representation is
not necessarily authoritative.
706801 (543485) 2-86
Trinidad
via
Caceres.
nta
CZ
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South America: The Expansion
and Modernization of the
Illicit Cocaine Industr
Introduction
Cocaine?an expensive "elite" drug in the early
1970s?is now the drug of choice for an expanding
group of abusers at all levels of US, West European,
and Australian societies. Cocaine's mystique as the
recreational drug of the rich and famous and its
alleged safety as a physically nonaddictive substance
contribute to its popularity. We judge, however, that
the producing, shipping, and marketing expertise of
South American cocaine entrepreneurs and their traf-
ficking organizations have propelled the international
cocaine explosion. Developed over the past decade, the
infrastructure supporting this expansion is now deeply
entrenched in the political and social fabric of the
major producing countries, where it is sustained by
high profits, fear, and apathy.
Traffickers' operations could easily provoke more
direct confrontations with South American govern-
ments. We judge that the traffickers are too well
equipped and their financial opportunities too great
for them to back down without a fight. Their demon-
strated capacity for innovation and resilience, more-
over, cause concern for the future. Without a concert-
ed international effort against them, the cocaine
entrepreneurs will be positioned to meet the challenge
to boost production, expand the market, and stream-
line the trafficking chain to maximize profits.
Cultivation: On the Increase
Illicit coca cultivation is highly profitable to the South
American farmer, enabling him to earn two to three
times the return he would get from legitimate cash
crops. According to coca cultivation experts in Peru
and US Drug Enforcement Administration (DEA)
field officers, the first harvest from coca bushes takes
as little as 18 months, as compared with three years or
more for the first harvest from substitute crops such
as citrus and coffee.
1
Estimating Procedures
Coca estimates for Bolivia and Colombia were de-
rived by a methodology that uses
Istatistical
techniques to calculate total coca hectarage. Imagery
is used to sample the crop area to determine the
number and average size of fields. This information is
extrapolated to cover the entire growing region. Yield
figures
are multiplied by the planted area to derive produc-
tion. Losses, usually reported by government officials
responsible for eradication and interdiction pro-
grams, are deducted to provide a net production
figure. The accuracy of this process varies depending
on the size of the sampled area, availability and
quality of the imagery,
We believe our 1985 coca
estimate for Bolivia is accurate to within 12 percent
of the actual area cultivated; the Colombian estimate
is accurate to within 25 percent. No formal estimate
has been done on Peru, where we are still trying to
determine the areas where coca is grown. Although
no crop estimating method can be completely accu-
rate, we believe this process provides a good basis for
assessing the extent of drug crop cultivation in specif-
ic regions and countries.
We estimate that coca is cultivated on 140,000 to
200,000 hectares in Peru, Bolivia, Colombia, and
Ecuador, and it is expanding (figure 1).
the labor required for coca cultivation
is roughly one person per hectare, and, when the
grower's dependents are added, as many as 1 million
persons may be directly dependent upon coca cultiva-
tion in South America. We estimate the 1985 coca
leaf production in South America at between 140,000
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and 200,000 metric tons, which could result in nearly
200 metric tons of cocaine hydrochloride available for
export.
Peru: The Preeminent Producer
Peru has emerged during the last decade as a leading
producer of coca leaf. We believe it has more land in
coca cultivation than all the other South American
countries combined, with at least 100,00 hectares
planted to coca in 1985. In our judgment, Peru
produces most of the coca leaf harvested in South
America. The Departments of Cusco and Huanuco
account for most of the leaf production, although
some coca is grown in nearly every administrative
area. only 43,000 hect-
ares is approved for licit production.
For the past several years, the official US Govern-
ment estimate of the area devoted to coca cultivation
in Peru was about 50,000 hectares, but
the cultivated area is much
larger. In 1981 140,000 hectares
devoted to coca countrywide, and recent
Secret
claims as much as 89,000 hectares in the Cusco
growing region alone. The US Embassy estimates
cultivation at 100,000 hectares in 1985. Thus far we
have been unable to do an imagery-based estimate of
Peru's coca hectarage, and until we can do so the
differences of opinion are likely to persist (figure 2).
We judge that processing inefficiencies probably limit
the amount of cocaine hydrochloride produced from
this large area to less than 100 metric tons a year.
Bolivia: Number Two
We estimate Bolivia's 1985 crop at about 32,000
metric tons of dry leaf harvested from some 34,000
hectares. Our estimate of cultivated area is derived
from satellite and high-altitude aircraft imagery. We
believe the coca grown in Bolivia could produce over
80 tons of cocaine hydrochloride. Most of the coca
cultivation is located in the Yungas and Chapare
regions on the eastern slopes of the Andes. Most of
the coca in the Yungas is grown around Chulumani in
terraced fields on steep mountain slopes (figure 3).
The soil is marginal for other agricultural crops but is
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Figure 3. The Yungas region of
Bolivia is dominated by coca
cultivation. Only an estimated
5 percent of the farmland in
this area is used to grow other
crops. The use of terraces al-
lows coca fields to crawl up
hillsides (top) and practically
denude nearby mountains. A
closer view of some of these
terraces (center) shows coca
fields in various stages of ma-
turity. The coca bush (bottom)
grows 2 to 3 feet tall in the
Yungas and can be harvested
three or four times per year.
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adequate for the hardy coca plant. Extensive new
fields have appeared along the road from Chulumani
to Coroico and Coropati, where neatly terraced fields
containing freshly planted seedlings were observed by
US Embassy travelers in October 1985.
Most coca production in the Chapare region is located
east of the town of Cochabamba, where cultivation
began only in the last 25 years with the settlement of
new agricultural lands. Much of the Chapare's agri-
cultural land is devoted to food crops, but increased
income from coca has led to a dramatic expansion of
illicit coca cultivation in the region. Almost all coca in
Bolivia is grown in the open with few attempts to hide
the fields. in 1985
revealed several other coca-growing areas in Bolivia,
including the Yapacani, Apolo, and several other
regions (figure 4).
Colombia: A Poor Third in Cultivation
Colombian growers cultivated some 16,000 hectares
of coca in 1985, according to estimates
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This area would provide enough leaf
to produce about 25 tons of cocaine hydrochloride.
Although Colombian trafficking groups control much
of the cocaine trade, they rely on growers in Peru and
Bolivia to supply most of the coca paste and base for
conversion to cocaine. Coca cultivation in Colombia
has increased steadily over the past several years.
Most fields are in the Llanos and Caqueta area,
remote lowland regions in southeast Colombia that
are part of the Amazon River Basin.
We believe the inferior quality of Colombian-grown
coca plus the government crackdown on drug traffick-
ing that began in 1984 probably have curbed the
expansion of coca cultivation recently. Coca fields
once considered safe from government interference
are now vulnerable to manual eradication operations
by the special narcotics police. In the expectation that
Colombian Government efforts against the cocaine
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industry will continue, we believe many growers are
shifting their coca to the more remote and nontradi-
tional regions of Colombia?such as the Sierra Neva-
da de Santa Marta mountains, a traditional marijua-
na-growing area in northern Colombia?or across the
border into Brazil, Ecuador, and Venezuela. Recent
aerial surveys confirm
coca cultivation in northeastern Colombia and in the
western portion of Brazil's Amazonas State near the
Colombian border.
Other Countries: Up and Coming
Brazil, Ecuador, and Venezuela have the potential to
become important coca producers. The National Nar-
cotics Intelligence Consumers Committee estimates
as much as 1,000 hectares are under cultivation in
Ecuador near the Colombian border. In Brazil, ap-
proximately 50 hectares of coca were destroyed in
1983, and, according to DEA, an additional 840
hectares were eradicated in 1984. This may be just
the tip of the iceberg. Much of the illicit coca grown
in the upper Amazon is planted among the trees,
according to the Embassy, and is therefore difficult to
detect from aircraft. Neither the Embassy
can offer a
reliable estimate of the area under cultivation. Vene-
zuela's National Guard was searching for marijuana
fields when it stumbled on coca fields along the border
with Colombia last March, but we have no informa-
tion about the extent of cultivation.
On the basis of present trends, we expect that coca
cultivation will expand in Bolivia and Peru, and that
new areas will open in Brazil, Venezuela, and Ecua-
dor. We expect new production to occur primarily
through further development in already established
growing regions.
Discovery of large
new areas of cultivation by antinarcotics forces of
countries bordering the big coca producers will drive
up the estimates of total coca production. Altogether,
the potential coca-growing region equals an area
about the size of the western United States, but
difficulty of access and lack of labor make much of
this unlikely for coca cultivation. Even without addi-
tional planting, however, illicit coca leaf output will
probably rise as recently planted bushes mature.
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Table 1
Estimated Coca/
Cocaine Production in 1985 a
Metric tons
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Peru
Bolivia
Colombia
Ecuador
Dry leaf b
130,000
32,000
16,000
1,000
Local consumption
44,000
18,250
NA
NA
Eradication
5,000
NEGL
4,000
NA
Net leaf (available
for conversion)
81,000
13,750
12,000
1,000
Processing efficiency c
0.30
0.55
0.55
0.55
Cocaine base
80
84
24
2.5
Paste
820
218
83
6
Pure cocaine
hydrochloride d
80
84
24
2.5
a This table provides a rough comparison of the relative size of the
coca harvests in South America. The estimates for Bolivia and
Colombia are based on imagery and statistical analysis, and these
are more certain. We are less confident of the estimates for Peru
and Ecuador,
b The amount of coca under cultivation in other countries such as
Brazil and Venezuela is unknown.
d Indicates amount of cocaine hydrochloride that could be produced
from leaf production in that country. Much of the paste and base is
shipped to Colombia for further refining
Better Cultivation Practices
South American farmers' use of modern cultivation
techniques for improving coca leaf yields causes as
much concern as the increases in cultivated area
because, even if control measures reduce coca hectar-
age substantially, total production could remain con-
stant. Modernization techniques include sophisticated
moisture retention schemes; contour planting on
mountain slopes; and the use of fertilizers, pesticides,
and herbicides. Although coca is a hardy plant, its
moisture needs are high. Farmers are building exten-
sive terraces on steep mountain slopes not only to
prevent erosion but also to preserve soil moisture.
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Another cultivation technique, observed in Bolivia,
Colombia, and Peru, is the planting of coca seeds in
nursery plots. This technique assures more efficient
use of seed through better germination and makes it
easier to protect the young plants from the desiccating
effects of the sun until it is time to transplant. In other
locations, farmers propagate stem cuttings?branches
from mature bushes cut and planted in new fields?
thus shortening the time to first harvest.
Coca farmers in Peru are increasingly using commer-
cial fertilizer, the most effective means of improving
production. Tropical soils are extremely poor in the
plant nutrients required to produce consistently
healthy, high-yielding coca bushes. The abundant
rainfall in much of the coca region, although needed
for plant growth and development, also leaches out
many nutrients required to produce high-quality
leaves, sales
of high-quality nitrogen fertilizers have increased
significantly in the Upper Huallaga Valley, a major
coca-growing region. Greater use of these fertilizers
could boost annual coca leaf yields substantially and
thus provide even greater incentives to coca growers.
An additional concern is the impact on licit agricul-
tural production if increasing amounts of fertilizer are
diverted to illicit coca production.
Intercropping or planting coca bushes among trees is
another cultivation technique being used by South
American farmers. Intercropping allows maximum
use of the land, and cultivation near trees helps to
protect the coca from government detection (figure 5).
intercropping is less common in Peru than in Bolivia
and is virtually nonexistent in Colombia. Cultivation
near forest trees appears to be significant in Peru,
especially in the Upper Huallaga Valley, where 50
percent of the coca in some regions is planted among
the trees,
Processing: Improved Efficiency
Minor technological improvements over traditional
paste processing methods are paying major dividends
in production increases. The high bulk of coca leaf
requires that the first stage in the refining process?
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the conversion of leaf to paste?be performed as near
the growing area as possible; therefore, drying and
processing of leaf into paste remain predominantly
backyard operations. We believe most of the leaf
processors are small-time operators who, although
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Coca Leaf Production
More than 250 species of coca have been identified,
but only two?erythroxylum and novagrantense?
contain the cocaine-producing alkaloid. Coca is a
hardy plant, permitting cultivation under a range of
conditions from the relatively dry Yungas region of
Bolivia to the tropical rain forests of the Amazon
River Basin. Coca is normally not grown at altitudes
above 2,000 meters. Unlike opium poppy or marijua-
na, coca is a perennial?usually kept pruned to bush
size, but capable of growing into a tree?and its
leaves can be harvested several times a year. Coca
seeds can be sown directly in cleared fields or started
in nursery seedbeds for transplanting after the first
leaves mature. Subsequent cultivation is simple, re-
quiring little attention until harvesting.
The first harvest can occur as early as 18 months
after planting, but two years from seedling to first
harvest is more normal. The productive life of the
coca bush can be 20 years. Some reports state that
optimum yields occur in fields that are five to 10
years old. Using rudimentary cultivation techniques
without fertilizer and other aids, afield may be
optimally productive for as little as four years, the
usual pattern for most coca growers.
Coca leaves can be picked from two to six times a
year, depending on location and species. Alkaloid
content varies widely from 0.75 to 2.1 percent and is
largely dependent on environmental conditions.
Yields differ somewhat from harvest to harvest and
from country to country; leaves picked during the wet
season (October-May) will be larger and yield more
alkaloid than those picked in the dry season (May-
September). The highest alkaloid content occurs in
the wet season around December and is about 25
percent greater than in the March or September
harvests, and two-thirds more than in June. Care
must be taken during wet season harvests, however,
to prevent leaf rot, which decreases the alkaloid
content and the value of the leaf
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without capital to develop large, modern facilities, are
instituting some improved processing techniques that
will assure higher cocaine alkaloid content in the
finished product. The following techniques have been
observed, but we do not know how widespread their
uses are:
? Drying sheds. Drying leaves in small barns similar
to tobacco sheds shortens drying time and reduces
losses of cocaine alkaloid by as much as 30 percent.
? Mechanization. Mechanical dryers hasten the dry-
ing process and minimize the cocaine alkaloid loss
that occurs when the moisture content in the leaves
remains too high. A small processing lab in Colom-
bia had a mechanical mulcher-grinder, which is a
more efficient method of leaf maceration and one
capable of leaching out more alkaloid than pound-
ing by foot, according to DEA.
? Mobile processing.
paste processors in the area of Tingo Maria, Peru,
drive to drying areas in pickup trucks equipped with
plastic tanks for use in the maceration process.
Rather than scooping precipitate from the usual
maceration pits in the ground alongside drying areas
and straining it through cloth, the precipitating
solution is drained from the bottom of the tank.
? Chemical selectivity. Processors are becoming more
selective about the kerosene they use to make paste.
Sulphur content is a factor in the amount of alkaloid
that can be extracted, and processors in Peru are
showing a preference for the low-sulphur-content
kerosene produced in Tingo Maria over the kerosene
from Cusco or Lima.
? Processing fresh leaf. Cocaine processors in Bolivia
and Colombia are converting freshly picked leaves
into coca paste, thus eliminating the drying stage.
The newly harvested leaves are mulched by hand or
in a grinder and processed immediately. This proce-
dure reduces the alkaloid loss that occurs when
leaves are dried before processing.
Law enforcement authorities have discovered some
large, highly sophisticated processing facilities. A
Secret
Processing Losses
The lack of available data and samples for analysis
makes it difficult to assess the losses incurred in the
processing of coca leaf into cocaine hydrochloride
and its intermediates. Yet we conclude that overall
drying and processing inefficiencies are responsible
for most of the cocaine losses suffered by illicit
producers and traffickers.
a cocaine loss of 60 to 80 percent in the process of
extracting the cocaine alkaloid from coca leaves in
Peru. Cocaine losses in Bolivia and Colombia are
less, perhaps only 50 to 60 percent.
several principal steps
in the extraction and conversion process account for
most of the loss. The first of these steps is the drying
process: the freshly picked leaves are spread in layers
of two to three inches on concrete drying slabs in the
sun for six to eight hours. Available data indicate an
approximate 60-percent weight reduction during the
drying process and an undetermined but associated
loss in cocaine alkaloid content. Incomplete drying of
the coca leaves early in the processing phase results
in chemical destabilization of the cocaine alkaloid
and accounts for some loss because it gives an end
product of lesser quality with a shorter shelf life. As
technology develops there should be less drying and
more immediate processing of newly picked leaves.
DEA officials believe that substantial losses also
may be incurred when extracting coca paste from
kerosene-soaked leaves. It is unlikely that processors
are able to leach out all the available alkaloid by
using one of the traditional unsophisticated methods,
such as stirring leaves by hand, stepping on leaves, or
merely soaking the leaves. Recovery of alkaloid
precipitate from leaf extract mixed with sulfuric acid
is also highly inefficient and probably accounts for a
large percentage of the loss involved in cocaine
processing.
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Figure 7. Dozens of settling
tanks (above) used in converting
Peruvian and Bolivian base to
cocaine hydrochloride were dis-
covered at a clandestine labora-
tory in Tranquilandia, Colom-
bia. One of the many processing
buildings (below) destroyed in
the March 1984 raid on this
illegal complex.
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laboratory discovered in March 1984 in Tranquilan-
dia, southeastern Colombia, contained electrical gen-
erators, drying tables with heat lamps, and numerous
pieces of chemical processing equipment. Other simi-
lar but smaller sites were recently located near Leticia
in southeastern Colombia.
some processors are importing trained European
chemists to oversee their operations, and some major
traffickers are sending their sons to universities to
learn how to improve refining efficiency. (See table 4
at back of book for production steps.)
Trafficking: Strengthening Through Organization
The most sophisticated?and most significant?inno-
vations are being made farther along the trafficking
chain. The major traffickers are developing increas-
ingly efficient and resilient organizations for getting
their illicit products to market. Mounting pressures of
enforcement, competition from independent small-
scale operators, and the requirements of servicing a
worldwide market seem to be stimulating the evolu-
tion of trafficking "conglomerates."
Vertical Integration
major Colombian
organizations have integrated growing, processing,
transporting, and marketing into large vertical organi-
zations held together by family ties. This began in the
late 1970s as an attempt to counter the rising bargain-
ing power of Bolivian and Peruvian paste brokers and
the increasing demands of independent processors and
pilots. The big traffickers became involved directly in
coca cultivation, first in the Llanos region of Colom-
bia, then in Peru and Bolivia, and now probably in
neighboring countries such as Ecuador and Brazil. At
the same time, traffickers began to extend their
control over additional aspects of the refining and
distribution process, which eliminated profit taking by
independent middlemen, provided better assurance of
supply and more leverage in the market, and reduced
financial risk. These large, integrated operations
could better utilize sophisticated communications,
provide intelligence up and down the trafficking
chain, and more effectively bribe or corrupt key
officials. The heads of these large-scale, integrated
organizations have a better awareness of the dynamics
Secret
of the world market and an understanding of antinar-
cotics activities that improves their ability to identify
and react to changes in demand as well as law
enforcement.
A Cocaine Cartel
Reports on the narcotics situation in Colombia fre-
quently refer to a "Medellin Cartel" or "Cocaine
Cartel" when discussing the activities of the large
Colombian cocaine trafficking organizations. Al-
though the formal organizational structure of a classic
business cartel almost certainly is lacking, competi-
tion among Colombian cocaine trafficking groups
appears to have been all but eliminated in the market-
place and drastically reduced in procurement activi-
ties. Moreover, consolidated shipments strongly imply
the existence of a parallel consolidated financial
structure. Leading Medellin traffickers frequently
meet to discuss matters of mutual interest, and rela-
tions among them are relatively amicable, according
to DEA agent reports. Issues reportedly discussed
include:
? Opposition to US extradition requests.
? Ways to counter interdiction and drug enforcement.
? Consolidation of multikilogram drug shipments.
? Construction and operation of processing laborato-
ries and clandestine airstrips.
? Acquisition and storage of essential processing
chemicals.
? Public relations campaigns to influence attitudes
about cocaine trafficking.
specific instances of opera-
tional cooperation by these traffickers. Among these
are:
? A meeting in 1984 between the major Medellin
traffickers and Colombia's attorney general in
which the drug dealers sought an arrangement with
the government that would grant amnesty to repen-
tant drug traffickers. They offered to cease illegal
drug operations and to help pay off the country's
foreign debt in exchange for immunity from extra-
dition or prosecution and the right to bring their
profits into the country without penalty.
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Figure 8
Model Trafficking Organization
Financiers
Head of criminal
organization
Associates
(inner group)
Production
Distribution Specialization
Pilots
Captains of vehicles
Forgers
Crew
Electronics
Raw materials
Labs
Bankers
Transportation Attorneys
Drug couriers
Chemists
Craftsmen
Money couriers
Lab operators
Farms
Indians
Farm owners
Transporters
307796 1-86
Land
Vehicles
Supply
Air Sea
Private Mother ships
Commercial Other
Cargo
United States head of
distribution organization
Associates
Distribution Specialization
Customers
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? In June 1984 Panamanian authorities destroyed a
multimillion-dollar cocaine processing laboratory
under construction by a group of Medellin traffick-
ers. We judge that Colombian enforcement efforts
probably motivated traffickers to agree to share the
costs of this project.
? In October 1984 the commander of the Colombian
antinarcotics police obtained information that the
major traffickers had pooled a large reserve of cash
to be used for "retaliatory purposes" after the first
Colombian national was extradited to the United
States. Colom-
bian drug kingpins have offered cash rewards for
the kidnaping of a high-level US drug official.
Expanding the Marketplace
Traffickers have adopted a number of strategies to
cope with the cocaine output that has resulted from
expanded growing areas, improved yields, and in-
creased processing efficiency. Lower prices have en-
abled the predominantly Colombian distribution net-
works to attract younger, less affluent, but far more
numerous consumers in the United States and Cana-
da. Colombian traffickers
in Europe are selling cocaine refined from inferior
coca at a reduced price to develop the market there.
Experts quoted in the British press claim that cocaine
smuggling into Western Europe during 1984 was
three times that of 1983. Officials in Spain, France,
West Germany, and the Netherlands have expressed
alarm at the rising cocaine abuse and the associated
influx of criminal trafficking elements. Cocaine also is
reported to be gaining popularity in Nigeria, South
Africa, Australia, and Japan
The cocaine producers are developing products for
less affluent markets closer to home and in the United
States. Traffickers are marketing toxic cigarettes
containing semirefined coca paste or base?interme-
diate products of the initial stages in the cocaine
hydrochloride refining process?among the urban
populations of South America and in US cities, such
as Miami, New York, and Los Angeles. These drug
products sell for much less than cocaine. They cost
little to produce because they do not entail all the
chemical inputs, and, if sold in South America, avoid
the transportation costs and interdiction risks of co-
caine exports abroad.
Secret
Sophistication in Shipping
As enforcement intensifies, large traffickers are dem-
onstrating creativity in developing new routes and
methods for smuggling cocaine. In response to
stepped-up air and maritime interdiction of private
aircraft and vessels, DEA, Customs, and the Coast
Guard report that traffickers are increasingly resort-
ing to commercial cargo carriers. The large volume'
and variety of products exported by air and sea from
Latin America?flowers, clothing, handicrafts, sport-
ing goods, vehicles, and machinery?provide opportu-
nities for traffickers to conceal cocaine within legiti-
mate cargos.
Some Colombian shipyards specialize in the construc-
tion of difficult-to-detect false compartments for
stowing large volumes of illicit goods,
Sometimes traffickers use products
expressly fabricated to hide cocaine, such as the
hollowed-out machine pulleys recently unloaded from
an Aero Peru plane in Miami. Shippers and import-
export middlemen realize they run little risk of being
associated with the illegal contraband if a shipment is
interdicted, a considerable incentive to their coopera-
tion.
Some traffickers try to reduce transportation ex enses
by consolidating shipments of cocaine.
that several traffickers frequently pool
into multikilogram loads that are more efficient than
smaller, individual shipments. Consolidated shipments
also help protect traffickers' anonymity because own-
ership is identified only by coded markings on the
packaging.
The practice of group shipments has led to an insur-
ance system among these large trafficking organiza-
tions to protect against losses from seizure, theft, or
The insurer,
mishap,
usually a large Medellin trafficker,
shipment for a 15- to 20-percent fee.
report that in August 1983 a large cocaine s ipmen
worth $9,000 per kilogram (kg) on Colombia's north-
ern coast was insured at a cost of $2,000 per kg. Upon
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notification of seizure in Florida the insurer duly
reimbursed each shipper in cash or its equivalent in
cocaine.
Traffickers also adjust to changing interdiction pat-
terns. South Florida?in particular Miami?has long
been the principal US port of entry and distribution
center for smuggled goods. It has everything a cocaine
trafficker could want: a long coastline, geographic
proximity to South America, a large Latin population,
frequent international commercial air and maritime
service, a well-developed banking system and services,
and repair and service facilities for aircraft and boats.
In response to intensified interdiction efforts in Flori-
da and its adjacent waters, traffickers are shifting
more shipments to air and land routes across Mexico
and farther north along the US coasts via the eastern
Caribbean. More circuitous routes through Canada
and Europe to the United States are used occasionally
and may become more popular.
Keeping Up Supply
We do not expect the increased supply of cocaine?
because of expanded cultivation, enhanced processing
efficiency, and innovative smuggling, as well as orga-
nizational improvement on the part of the traffick-
ers?will lead to a glut and a precipitate drop in prices
or profits. Opening markets in new countries, such as
Australia and in Western Europe, is well under way
and unless public policy and attitudes change, we
expect these markets to expand steadily in the near
future. Much of the expanded supply of cocaine will
go to establish and service these new customers. The
initial stages of market development involve the popu-
larization of cocaine among a potential user commu-
nity unfamiliar with the substance, often using low-
priced come-ons and occasionally even "giveaways."
The shift from small individual shipments to multi-
kilogram consignments means greater losses per sei-
zure and that some of the expanded supply will be
needed to cover increased losses. The relative simplic-
ity of cocaine processing, combined with the fact that
coca leaves can be harvested when needed, facilitates
the trafficker's task in replacing lost shipments as
long as he has the financial resources. The drug can
be literally stored on the bush, unlike opium or
13
marijuana, which must be harvested when the crop
matures and stockpiled in a processed or semipro-
cessed state. A major trafficker with ready access to
growers and processing facilities could make up a lost
shipment in a short time.
Drug Control Efforts: An Uphill Battle
The intensity and effectiveness of the South American
governments' drug control programs directed against
the illegal cocaine trade vary greatly, ranging from
Colombia's, which pressures traffickers to adjust their
operations, to Bolivia's, which gives virtually free rein
to the traffickers. Although drug control efforts en-
compass a combination of enforcement, demand re-
duction, and economic development programs, most
South American governments have concentrated their
limited resources on cocaine interdiction, which is
politically more palatable to some governments than
cracking down on small-time coca growers and peas-
ant farmers. Eradication campaigns, if undertaken in
conjunction with economic development, and crop
substitution programs promise a long-term solution,
but such comprehensive approaches are difficult to
administer and costly to implement.
Interdiction
The lack of government control over?and sometimes
even familiarity with?the drug-producing areas im-
pedes interdiction. Geography favors the traffickers,
who have converted the various river, road, and trail
networks into an intricate?and, to the outsider,
confusing?maze. South American drug enforcement
personnel cannot adequately cover all of the cultiva-
tion, production, and trafficking areas, and thus tend
to concentrate their efforts on transportation choke
points or the major cultivation areas. In Peru and
Colombia, current strategy calls for the establishment
of base camps in the heart of the trafficking regions
from which patrols can be mounted. Authorities hope
this network of base camps will help return control of
these regions to the government.
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One Country's War on Drugs
The assassination of Colombia's Minister of Justice
Rodrigo Lara Bonilla on 30 April 1984 prompted
President Betancur to launch an unprecedented
crackdown on narcotics traffickers and to declare a
"state of siege." The President was personally out-
raged by the killing. This outrage was reinforced by
the high-pitched public reaction, embarrassment over
the harm done to Colombia's international image,
and a desire to demonstrate strong leadership and
rebut opponents' criticism that weak executive sup-
port for Lara 's drug program contributed to his
death. Betancur's initial actions included:
? Publicly declaring war on drug traffickers.
? Reversing opposition to the extradition of Colombi-
an nationals.
? Declaring a countrywide "state of siege"?the 11th
since 1948?that sanctions armed forces involve-
ment in drug control activities, places narcotics
cases under military court jurisdiction, and severe-
ly limits freedom of travel and assembly. In late
1985, however, narcotics cases were again tried in
civilian courts.
? Ordering widespread arrests of narcotics traffickers
and raids on their property.
? Strengthening existing antinarcotics statutes to give
authorities sweeping powers to seize both trefick-
e..s and their assets.
The drug crackdown has disrupted Colombian traf-
ficking activities. Small traffickers have suffered the
most; the major drug kingpins have fled the country
to avoid the possibility of extradition. They continue
to oversee their Colombian operations, however, and
have accelerated expansion and relocation into neigh-
boring countries where the drug enforcement environ-
ment is safer.
Secret
Eradication
Colombia, Peru, Ecuador, Brazil, and recently Vene-
zuela have coca eradication programs, but achieve-
ments have been spotty. Present technology requires a
complement of intensive manpower resources to phys-
ically extract the plant because aerially sprayed herbi-
cides kill only the plant's leaves. Until an environmen-
tally safe, effective herbicide is available for use on
coca bushes, eradication efforts will be unable to keep
pace with present rates of expansion in coca cultiva-
tion. Even limited eradication programs, however, will
serve to keep the pressure on growers and traffickers
and help disrupt operations.
Peru eradicated about 3,800 of the 6,000 hectares
targeted for 1985?a good record as coca eradication
efforts go, but an insignificant amount when mea-
sured against a cultivated area of perhaps as much as
140,000 hectares. Violence against eradication work-
ers and the lack of Army support in the Upper
Huallaga River Valley have hampered progress. Boli-
via's "voluntary eradication" has been delayed by a
lack of police protection in the Chapare and by
disruptive activities on the part of growers and traf-
fickers. This manual eradication program?which has
accomplished little to date?had a 1985 elimination
goal of 4,000 of the 34,000 hectares we estimate to be
under cultivation.
La Paz began manual coca eradication in December
1985 in some new and still small growing areas.
Colombia, in addition to the ongoing manual eradica-
tion efforts, is testing six herbicides in the Llanos
growing region with US Department of Agriculture
(USDA) assistance. Garlon-4 promises to be effective
against the hardy coca bush. The tests have been
successful enough that a trial eradication effort was
begun in December 1985. Ecuador conducted several
eradication operations in 1985, the last one in cooper-
ation with Colombia along the Putumayo River. The
Brazilian police have conducted several coca eradica-
tion operations since late 1983 in the upper Amazon
Basin, and the US Embassy in Brasilia estimates that
more than 800 tons of coca leaf have been destroyed.
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Table 2
Eradication Techniques
Method
Resources Needed Advantages
Disadvantages
Uproot plant
Large labor force 100 percent effective; no health or
environmental hazards.
Time-consuming; difficult in areas
far removed from major transpor-
tation routes.
Cut plant off at ground Large labor force; machetes No health or environmental haz-
level ards.
Same as uprooting plant; plant re-
news growth the following crop
season.
Treat base of plant
chemically
Spray tanks; systemic herbi- Less labor then uprooting/cutting;
cides (glyphosate; 2, 4-D) limited environmental hazard.
Leaves can be used several days
after application; some chemical
release to environment.
Aerial spraying Aircraft; appropriate chemicals
(see basal treatment)
Least time-consuming or labor in-
tensive of all methods; able to reach
remote areas easily; most cost ef-
fective.
Chemical release to environment
with varying residual times in soil.
Chemical drift may cause: destruc-
tion of surrounding stabilizing veg-
etation, resulting in erosion; de-
struction of other cash or
subsistence crops; greater public
opposition.
Venezuela adopted an eradication program after re-
cent confirmation of coca fields along the Colombian
border.
A range of factors limits the effectiveness of manual
eradication. Many coca fields are inaccessible from
major roads or other transportation routes, and the
large labor force required for direct application of
herbicides or manual plant destruction is difficult to
recruit because of the violent action traffickers have
taken against eradication personnel. Violence against
local and foreign government officials and citizens
who support eradication also deters effective imple-
mentation.
To assure eradication of a coca bush, the roots must
be killed or dug up, but most methods merely cut the
plant off at ground level or use herbicides that
damage only the upper plant. Bushes sprayed with
paraquat, for example, can still be harvested up to
three days after spraying and will leaf out again in a
few days. The most cost-effective means of applying
herbicides?aerial spraying?is a politically sensitive
15
issue because of concern about health and environ-
mental risks. Effective eradication programs also de-
pend on availability of chemicals that destroy coca
bushes with little or no damage to the surrounding
vegetation and environment, hence the importance of
the Colombian test program.
Crop Substitution
The expanding international cocaine market contin-
ues to keep the profitability of illicit coca far above
that of substitute crops. This high profitability sub-
stantially undercuts the impact of crop substitution
programs, particularly when enforcement is weak.
Declining world market prices for potential alterna-
tive commercial crops, such as tea, bananas, cacao,
corn, and citrus, make the problem worse. According
to USDA officials, the failure of many crop substitu-
tion programs is also caused by the lack of developed
markets for an alternative crop before cultivation
begins. Beyond this, coca's physiological and morpho-
logical properties enable it to grow in very poor soils,
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make it resistant to many diseases and pests, and
allow it to adapt more readily to environmental
conditions than most substitute crops. The USDA
believes well-drained soil and the absence of frost are
the principal factors in coca growth; rainfall and soil
characteristics are of secondary importance.
only coca can grow well in the
porous soils in the Yungas region of Bolivia.
Coca growers view crop substitution programs as
socially and economically destructive because pro-
posed alternative crops are not feasible replacements
for coca. Some Peruvian agricultural scientists report-
edly believe crop substitution programs are poorly
managed and that technical advisers lack the knowl-
edge and training necessary to address the unique
problems confronting Peruvian farmers.
the local government personnel
involved in establishing crop substitution programs
are frequently reluctant to implement them because
of the lack of support from corrupt officials and the
threat of violence by powerful traffickers. The murder
of a group of Peruvian eradication workers in 1984
dramatically reduced incentives for participating in
any narcotics control efforts.
Coca substitution projects aided by US funding are
currently under way in Bolivia and Peru. In Bolivia,
the Chapare Regional Development Project is at-
tempting to reduce coca cultivation by improving
varieties and yields of indigenous crops such as citrus,
yucca, corn, pineapple, palm, and forest products; a
followup program will introduce nonindigenous crops,
including coffee, cacao, rubber, and bamboo as coca
substitutes. In Peru, officials of the Special Project for
the Upper Huallaga (PEAH) are continuing efforts to
establish alternative crops such as corn, soybeans,
coffee, tea, and rice. UN-funded crop substitution
programs in Colombia and the Yungas region of
Bolivia are in the planning stages, and a similar
program in Peru is under consideration. In none of
these cases, however, is there a credible enforcement
"stick" to go with the substitution "carrot."
Control of Chemicals
International controls on chemicals essential to the
refining of cocaine have impeded traffickers, driving
up the cost of doing business and forcing changes in
Secret
their operations. Some of the chemicals?gasoline,
kerosene, and ammonia?are so common that control
is virtually impossible, but for certain other chemicals
the limited sources, narrow legitimate applications,
and large volumes required make them vulnerable to
government restrictions. A high consumption of ace-
tone, for example, is difficult to justify except in some
industrial applications. Another chemical essential to
the final refining of cocaine hydrochloride?ethyl
ether?has few licit uses outside the medical profes-
sion and the pharmaceutical industry.
The ether used by Colombian traffickers for cocaine
processing before 1983 was obtained largely from the
United States and West Germany. Colombian import
restrictions and a DEA program to control the sale of
essential cocaine processing chemicals worldwide at
the manufacturer level sharply reduced the availabil-
ity of ether to the major processors in Colombia,
causing its price on the illicit market to increase
sharply. The price remains high despite the develop-
ment of processing locations outside Colombia; alter-
nate supply routes through Brazil, Venezuela, Argen-
tina, and Paraguay; and new sources in Mexico and
Brazil. Despite an intent to control, some countries,
such as Brazil, have failed to commit sufficient funds
to police the trade effectively. Others, such as Para-
guay, facilitate questionable chemical transactions for
their own gain, DEA
sources indicate traffickers are taking steps to estab-
lish front organizations to justify chemical imports
and increasingly are moving final processing opera-
tions to places where chemicals are more available?
including the United States.
Demand Reduction and Public Awareness
Public education campaigns are another cornerstone
of drug control efforts. Destroying the myth that
drugs are solely the consuming nation's problem has
become an important step in convincing source coun-
try governments that they also have a serious prob-
lem. To this end, a number of South American
countries?Colombia, Bolivia, Ecuador, and Peru, for
example?with US assistance have organized cam-
paigns to instill in their people a clear understanding
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Aerial Surveys: Understanding the Problem
Aerial photographic surveys are essential to effective-
ly estimate the amount of drugs under cultivation,
especially in the major coca producing countries?
Peru, Bolivia, and Colombia. Each country has a
different capability to carry out aerial surveys, rang-
ing from a sophisticated mapping agency in Colombia
to almost nothing in Brazil, Ecuador, and Venezuela.
An aerial photographic survey should be implement-
ed in phases. The initial phase is the compilation of a
data base to determine the growing areas. High-
altitude, conventional black-and-white photography
or unclassified satellite imagery can be used to
differentiate the agricultural from the nonagricultur-
al areas and enable the government to concentrate on
the areas most likely to grow coca. In the second
phase, photographic surveys of the agricultural areas
are flown with large-scale, color or color-infrared
(CIR)film. At the same time, ground observations are
made in areas of known cultivation. The ground
photographs are compared with the aerial photogra-
phy to establish photo interpretation keys for identi-
fying coca fields. The third phase consists offollowup
missions to measure eradication, new cultivation, or
recultivation.
A successful survey depends on technological and
environmental factors, the overriding constraint being
weather. All of the countries involved lie within 10
degrees north or south of the equator, where rainfall
and cloud cover are abundant throughout most of the
year. The best weather (relatively) coincides with the
dry season, the time when aerial photographic mis-
sions must be flown.
The following is a brief description of current capa-
bilities to conduct aerial surveys:
? Colombia. The Institute Geographical Agostino
Coddazi is responsible for all the photographic and
mapping projects in Colombia. The institute is
capable of planning, flying, analyzing, and publish-
ing all phases of a mapping project and is probably
the best in Latin America. Mapping requirements
limit the amount of time the institute can devote to
narcotics matters, however. The government flew
one mission in 1983 that covered part of the
marijuana-growing region in northern Colombia.
? Peru. The Peruvian Navy flew a mission over the
eastern portion of the Upper Huallaga Valley in
August 1984 using CIR film. An additional mission
over the western side of the valley was completed in
1985. A full-scale survey remains for the future;
Peru has no processing capability for color or CIR
film and must send the exposed film to the United
States.
? Bolivia. Several pilot projects have been undertaken
by the US State Department's Bureau of Interna-
tional Narcotics Matters. From that study the area
was sampled to estimate coca production. The
Bolivian Air Force has the capability to conduct
comprehensive aerial surveys, but it probably will
not do so without massive US funding.
? Brazil, Ecuador, and Venezuela. These countries
have no active aerial photographic surveys. A sur-
vey in Brazil would be expensive because of the size
of the potential growing area. Furthermore, because
much of the crop is believed to be grown among
trees, an aerial survey may not provide a compre-
hensive understanding of the problem. Domestic
budget constraints limit the ability to carry out
aerial surveys
It is doubtful whether the illicit coca producing
countries have the wherewithal to undertake large
and expensive surveys. Successful surveys will de-
pend heavily on US funding to provide training,
photographic equipment, film, and processing facili-
ties. Regional cooperation is unlikely because each
country would fear that another could use the infor-
mation for intelligence or military purposes.
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of the danger unchecked drug trafficking poses to
their societies. A recent US Information Service poll
suggests many people in South America are beginning
to identify the narcotics trade as a national problem.
Obtaining widespread support is a long-term process,
however, that is not expected to yield substantial
short-term results although it may bolster those gov-
ernment officials able and willing to take a hard line
against traffickers.
Legal Reform
Short of catching a trafficker in actual possession of
the drug, it is almost impossible to obtain a conviction
in any Latin American country, partly because of the
lack of conspiracy laws. Recently concluded US Em-
bassy assessments of the Peruvian and Colombian
legal systems indicate that, although major changes in
their judicial, legal, and penal systems are unlikely,
legislation could be passed to strengthen existing drug
laws. Of particular interest are laws that allow seizure
of assets of drug traffickers, and some South Ameri-
can governments are exploring these as the best way
to attack the large trafficking organizations. Traffick-
ers enter the drug business to acquire wealth and
property, and depriving them of this is seen as the key
to putting them out of business.
In many cases, the courts are simply overwhelmed.
The US Embassy recently assessed Ecuador's judicial
system as suffering from insufficient budget support,
poor professionalism among officials, a severe and
mounting case backlog, reliance on rudimentary in-
vestigative techniques, and a constitutional diffusion
of judicial power. Faced with severe budget con-
straints, the Ecuadoran Government shows no sign of
giving judicial reform priority attention. In Peru, the
Embassy reports that the constitution and legal codes
provide an adequate formal framework, but problems
of crowded court dockets, budget constraints, corrup-
tion, poor security, low-quality legal services, and
public apathy impede the working of the system. Even
when Colombia temporarily shifted responsibility to
military courts during the "state of siege," it re-
mained impossible in many cases to obtain sufficient
evidence or witnesses against major narcotics figures;
no one dared to testify.
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Expansion Into Neighboring Countries
The focus of control efforts in major producing coun-
tries over the past several years is causing coca
growers, processors, and traffickers to expand their
operations beyond the core areas in Peru, Bolivia, and
Colombia. The high profits available from cocaine
trafficking make it possible to absorb the large, short-
term costs such moves entail. Transshipment routes?
both for drugs and essential processing chemicals?
have long been flexible links in the trafficking chain,
but the traffickers also display remarkable capability
to develop new sites for refining laboratories and new
areas of cultivation. By moving operations into coun-
tries that have little previous experience in narcotics
matters, the traffickers can take advantage of poor or
no drug enforcement activities, lack of legal strictures
on participation in drug-related activities, and official
and popular apathy.
We judge that without immediate effective action
Brazil has high potential to become a major cocaine
producing and trafficking country. Suppression opera-
tions in neighboring countries make the Upper Ama-
zon?a largely uninhabited, virtually unpoliced re-
gion?increasingly inviting for cultivation, processing,
and trafficking. Seizure statistics from Brazil suggest
that all aspects of production and abuse have risen
substantially in the last few years. DEA sources
indicate that Colombians, Bolivians, Peruvians, and
Brazilians are encouraging Amazonian Indians to
cultivate "Epadu," the local variety of coca that is
easily propagated among trees in the Amazon jungle.
These reports have not been verified, and the traffick-
ers would have to overcome some major logistic
hurdles to set up operations in these areas.
We do not know at present whether Brazilian coca is
refined locally or shipped as leaf for processing in
neighboring countries. We expect, however, that Bra-
zil may become a popular processing site if raids on
cocaine laboratories in Colombia continue and as
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chemicals needed to process the leaf become increas-
ingly difficult to obtain there. As the leading chemical
producer in South America, Brazil manufactures all
the chemicals needed to process coca into cocaine. It
also has a large and difficult-to-police transportation
network based on the Amazon River. The tribal lands
of the Indians are protected from law enforcement
activities and thus would provide a sanctuary for the
traffickers' operations.
Brazil's antidrug program is in its infancy; public
awareness about narcotics issues is low; and enforce-
ment has been impeded by four years of recession and
government austerity. The Justice Ministry, which is
responsible for narcotics matters, has the smallest
budget of any Brazilian agency, and its narcotics
division has only 25 percent of the funds it needs to
meet the greater enforcement requirements brought
on by an expanding narcotics industry, according to
US Embassy reporting. Brazil undertook some coun-
ternarcotics operations in 1984 including seizures,
coca eradication in the Amazon region (entirely US-
funded), and investigation of ethyl ether and acetone
transactions; it also worked with Colombia to restrict
cross-border shipments of essential chemicals. Brazil's
present enforcement capabilities could not counter a
well-organized cocaine industry. The largely reactive
Federal Police force does not have sufficient resources
to engage in long-term planning; the antinarcotics
staff is small, nonspecialized, and poorly trained; and
strong legal statutes against entrapment and failure to
enforce application of conspiracy laws will hinder
effective prosecution of traffickers.
Argentina is assuming renewed importance as a trans-
shipment and processing site. In the first 10 months of
1984, authorities seized 150 kilograms of cocaine?
five times the average annual seizures for previous
years, according to the US Embassy. Bolivian traf-
fickers, concerned about potential suppression activi-
ties at home and seeking easier access to essential
chemicals, have set up some processing facilities in the
remote northwestern provinces of Argentina. DEA
sources also indicate major cocaine smuggling organi-
zations based in Colombia, Bolivia, and Peru have
started using Argentina as a staging area for large
cocaine shipments en route to the United States and
Europe. This suggests that these organizations may
19
view Argentina as potentially more secure than other
more established routes. Argentina has a reputation
for lenient sentencing and little emphasis on narcotics
enforcement. Enforcement agencies have parallel and
overlapping jurisdictions and lack strong direction.
The government has only just formed an interminis-
terial committee to coordinate antinarcotics efforts?
largely in reaction to the recent, growing activities of
traffickers.
According to DEA sources, Colombian traffickers
have been seeking to establish both processing and
cultivation sites across the border in Panama's heavily
jungled Darien Province, apparently to escape in-
creased enforcement at home. A large cocaine labora-
tory under construction was seized there in 1984, and
the local press reports the presence of "huge" coca
plots. In addition to its proximity to Colombia, Pana-
ma is particularly attractive to the drug trade because
of its longstanding role as a center for money launder-
ing and a transshippment point for drugs and chemi-
cals. Because US currency is legal tender in Panama,
there also are no foreign exchange restrictions on the
private transfer of dollars, the currency of the drug
industry.
Paraguay also has excellent potential as a major
cocaine processing site should intensified enforcement
elsewhere make traffickers uncomfortable. It is al-
ready a significant transit route for essential chemi-
cals, and cocaine laboratories in Paraguay recently
have been reported by the US Embassy. A free trade
zone between Paraguay and Brazil complicates efforts
to control drugs and chemicals in transit. In Septem-
ber 1984 some 49,000 gallons of cocaine processing
chemicals in transit from Brazil were seized and have
not yet been disposed of satisfactorily, according to
the US Embassy. We judge official corruption plays a
major role.
Despite a strong antinarcotics stance by Venezuela's
current administration, backed by tough new drug
laws largely inspired by fear of a spillover from
Colombia, the amount of cocaine transiting the coun-
try continues to increase. Seizures were up in 1984 for
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the second year in a row, according to the US
Embassy in Caracas. During the past year, coca was
found in a greenhouse near the Colombian border and
two refining laboratories were discovered. These were
the first known processing sites in Venezuela and
probably indicate that Colombian traffickers wanted
to test the waters there. In March 1985 the Venezue-
lan National Guard discovered a plantation of about
12,000 coca bushes in the Maracaibo region along the
border with Colombia. The coca, camouflaged by
yucca and banana plants, was ready for processing;
the necessary chemicals also were found nearby.
DEA sources say several cocaine laboratories have
been seized in Chile since 1983. A government crack-
down almost eliminated the once-thriving Chilean
drug trade in the 1970s, but official corruption report-
edly has been a factor in the recent comeback.
According to press reports, Bolivians figure promi-
nently in trafficking through Santiago, where one
recently discovered ring was described as a "million
dollar" cocaine operation.
Obstacles to Control
The growing and chewing of coca leaf is a local
tradition dating to pre-Columbian times so that in-
volvement in the coca industry does not raise the
ethical or social issues among South Americans that
influence other Western views of the narcotics trade.
Moreover, although opinion may be shifting, many
cocaine producing and trafficking countries still be-
lieve that illicit production is more beneficial than
harmful to their national economy, and this works
against effective control programs. Most coca produc-
ing and processing operations also occur in areas
largely outside the control of central governments,
and local populations benefit from the drug trade,
making licit agriculture less attractive. Many small
businessmen, from bankers to agricultural supply
salesmen, benefit from the prosperity brought by the
illegal cocaine trade. Drug money buys protection
from enforcement and prosecution, reducing the risks
of involvement in an illegal trade and at the same
time creating another group of people dependent on
the drug trade.
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Profits Still Outweigh Losses
The international trafficking of cocaine probably is
one of the most profitable illicit economic enterprises
in the world today. In spite of increased chemical and
other production costs and record low US wholesale
prices for cocaine, profits are still tremendous. As
little as $300 will purchase enough coca leaf from a
peasant farmer in Peru or Bolivia to produce 1 kg of
cocaine base, which can be sold for $2,000 to $3,000.
After further processing, 1 kg of base yields about 1
kg of cocaine hydrochloride?worth $8,000 to
$12,000 in Colombia and $25,000 to $40,000 in the
United States.
Profits are highest for those running the greatest
risk?exporters and wholesalers, mostly Colombians,
in the United States. A report about a well-known
Medellin trafficker illustrates the size of these profits.
Upon learning that his shipment of 400 kg of cocaine
hydrochloride had been seized in Florida, he told
associates that his personal business losses?including
processing and transportation costs?were $4,500 per
kg. On the basis of current prices, he would have
received about $30,000 per kg wholesale in Florida,
making his return on the investment almost 700
percent.
A wide variety of people benefit from the cocaine
trade, not only the few at the top. US Customs
officials report cocaine trafficking often involves large
trade conspiracies that include exporters, freight for-
warders, truckers, servicers, brokers, consignees, air-
line personnel, warehouse workers, and security per-
sonnel?each getting a cut. Corrupt officials all along
the chain further expand the circle of drug money
beneficiaries. Describing their investigation of a
smuggling operation using the Colombian flower
trade as a cover, US Customs officers noted that
organizers bought, intimidated, or coerced others into
cooperation in their operation. In most cases, recruit-
ment was simple because poorly paid laborers chose
the added financial reward without regard to the legal
consequences. A typical cargo handler in Colombia
earning approximately $220 per month could supple-
ment his income with an additional $1,200 to $5,000
by handling flower boxes containing cocaine.
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Figure 9
Hypothetical 1984 Income Statement of Colombian Cocaine Trafficker
United
States
The
e-Aemas
Andros
Island
Income
? Sale of 162 kg of 90-percent-pure cocaine HCL to US
wholesaler in Miami at $28,000 per kg
Expenses
? ? Payment to boat captain transporting cocaine HCL from Andros
Island to North Miami marina
? ? Payoff to Bahamian authorities
? ? Amortization of Cessna-441 aircraft for Panama to Miami flight
?? Payment to pilot transporting cocaine HCL from Panama to
drop point in The Bahamas
Panama
$4,536,000
20400
30,000
35,000
75,000
? Payoff to Panamanian authorities 30,000
? Payment for use of clandestine airstrip in Panama, including
refueling, Darien Province 3,000
? Amortization of Cessna-441 aircraft for Cali to Panama flight 15,000
? Payment to pilot transporting cocaine HCL from Cali to
to clandestine airstrip in Panama 1.0,000
? ? Payoff of Colombian authorities in Cali area 20,000
?? Rental of truck and driver to transport 405 kg of coca paste
between Cali airstrip and HCL laboratory site 2,000
?? Processing of coca paste into cocaine base and HCL at
clandestine lab site near Cali
- Ether: 14 drums at $5,000 per kg?$70,000
- Miscellaneous processing chemicals including ammonia,
sulfuric acid, potassium permanganate, acetone and
hydrochloric acid ?$40,000
- Chemist: 162 kg HCL at $700 per kg?$113,400 223,400
?? Payment for use of clandestine airstrip near Cali, including
refueling 5,000
?? Payment to pilot transporting coca paste from El Beni to
clandestine airstrip near Cali, Colombia 112,000
?? Amortization of Cessna-44I aircraft for Bolivia to Colombia
flight 25,000
? Payoff to Bolivian authorities 15,000
? Payment for use of clandestine airstrip,
including refueling 54I00
? Purchase of 405 kg of cocaine paste from agent
at clandestine airstrip in the El Beni region
of Bolivia at $1,500 per kg 607,500
706802 3-86
21
Total expenses 1,132,900
Net profit 3,403,100
Ratio of income to expenses 4:1
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Figure 10. Medellin, Colombia. Though we be-
lieve much of the money obtained through illicit
cocaine sales is kept in offshore banks, some of it
is used to finance real estate and other invest-
ments in the country where the traffickers oper-
ate. Drug revenues are believed to be largely
responsible for the current high-rise office and
residential construction boom in Medellin.
The money available from the illegal cocaine trade
allows all involved to enjoy an improved standard of
living. The wealth of the leading cocaine entrepre-
neurs is most obvious because of their conspicuous
consumption. Major traffickers in Medellin, Barran-
quilla, and Cali in Colombia, and Santa Cruz, Bolivia,
use their enormous profits to purchase lavish homes,
ranches, apartments, vacation villas, luxury automo-
biles, airplanes, and yachts. Many also have extensive
holdings in real estate and other investments in many
countries.
The benefits also trickle down. DEA country agents
report that many small laboratory operators and paste
brokers also enjoy lifestyles considerably better than
they could otherwise achieve. The money earned from
illicit coca cultivation improves living standards in
some rural areas of South America. According to US
Agency for International Development officials, sup-
plementing their income from coca allows farmers to
continue growing essential but less profitable food
crops?corn, rice, bananas, and yucca. Record books
show that the lowest order of workers, paid on a piece-
rate basis, can collect three arrobas (about 34 kg) of
coca leaves per day and earn about $10 to $20, as
compared with the $3 to $6 normally earned from
picking other crops. The coca growers can thus afford
popular electronic gadgetry such as radios, televisions,
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Table 3
Crop Yield/Income:
Upper Huallaga Valley, Peru, 1984
?
Yield/Hectare
(kilogram)
Estimated Income
(US $)
Coca leaf
1,000
Illicit
1,800-2,400
Licit
900-1,200
Cacao
500-600
750-900
Rice
4,000
750
Corn
2,000
260
and cassette players; consumables such as canned
foods; improved housing; bicycles, motorbikes, auto-
mobiles, and pickup trucks.
We suspect that the power and longevity of the illegal
narcotics trade in some countries may confer on it a
quasi-legitimate status in the eyes of many people.
Some major traffickers are seen as Robin Hood
figures by campesinos who also benefit from the
trade, and rural communi-
ties protect such kingpins from government drug
sweeps.
A letter from fugitive
trafficker Carlos Lehder to President Betancur was
published in a Bogota newpaper expressing outrage
over the humiliation Colombia suffered because of the
extradition treaty with the United States. Even jour-
nalists receiving no known benefit from narcotics
trafficking sometimes romanticize the successful traf-
ficker as "astute, calculating . . . a special kind of
person, who makes a game out of danger."
The judicious use of some of their profits for political
and media operations has enabled traffickers to un-
dermine control programs and sometimes to prevent
governments from taking action. Coca producers and
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traffickers in Bolivia have organized themselves into a
front group ostensibly representing labor and other
legitimate interest groups to lobby against govern-
ment narcotics control measures. Narcotics money is
also quietly invested in legitimate businesses, such as
the major drug-financed holdings in Colombian hotels
Such
tactics could give drug elements significant power in
the legitimate economy that could provide political
leverage against government drug programs.
We have reports that traffickers have banded together
to promise the governments of some coca producing
countries enormous sums of money in return for
amnesty and the right to bring their profits home
without penalty. Thus far, the offers have been reject-
ed, but it is indicative that holding such meetings was
approved at the highest levels of government, accord-
ing to principals involved. One such meeting occurred
between the president of Bolivia's National Council
Against Drug Trafficking and "Cocaine King" Ro-
berto Suarez Gomez in June 1983. Colombia's attor-
ney general met on the same issue with a group of
major traffickers in Panama in May 1984.
Political and Practical Constraints
Governments face political and practical constraints
in instituting vigorous drug control programs. Poor
economic performance, challenges by leftist insur-
gents, and the perennial problem of staying in power
in a volatile political environment compete for the
attention of national leaders in the major coca grow-
ing and trafficking countries. Narcotics programs
generally receive lower priority than any of these
other issues. Leaders are hesitant to institute eradica-
tion programs that will eliminate the most lucrative
crop, bring appeals for aid from already tight govern-
ment budgets, and risk creating a disaffected rural
population susceptible to insurgent propaganda. At
the same time, traffickers use their profits to undercut
action by corrupting or intimidating civilian and
military officials.
According to assessments by US financial institutions
and embassies, the illicit coca producing countries
face budget constraints that make it difficult to
increase government expenditures for drug programs.
23
In Peru, serious financial difficulties will continue to
limit government antinarcotics efforts regardless of
the intent of the Garcia administration. The 1986
draft budget for Peru calls for increased austerity and
even less spending than in 1985. Under these tight
financial circumstances, most of Peru's budget will go
toward debt service, countering worsening economic
problems, and increasing military expenditures to
fight the insurgency threat.
Although we judge only a small fraction of the
enormous revenues from the cocaine trade flows back
to source countries, we suspect that what does return
helps shelter some local and regional economies from
the impact of economic depression. As a result, local
officials would be reluctant to crack down in bad
economic times. Peru, Bolivia, and Colombia lack the
resources needed to cushion the economic and politi-
cal impact in rural areas of a shutdown of the cocaine
trade.
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Narcotics traffickers exploit these concerns. Drug
suppression programs alienate campesinos. Where
chewing coca leaf is part of the cultural heritage and
its cultivation is either legal?as in parts of Bolivia? 25X1
or permitted under the theoretical control of a nation-
al monopoly?as in Peru?the political problems of
suppression are compounded. Traffickers in Bolivia
have infiltrated campesino organizations to encourage
protests against crop reduction plans and even to
stimulate an increase in cultivation,
In response to the
security and antinarcotics campaign in the Chapare
region in 1984, the rural population blockaded high-
ways, staged a hunger strike, and accused government
forces of "human rights violations, excesses, and
abuses" in widely reported statements to the press.
Getting on the bandwagon, leaders of Bolivia's power-
ful labor movement?representing more than 40
union organizations claiming more than 25,000 agri-
cultural workers among their members?successfully
forced the government to withdraw and provide
compensation.
Peru and Colombia, which have active insurgencies,
must take into account that aggressive antinarcotics
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operations without rural development could cause
increased rural disaffection with the government.
With the exception of the recent state of siege in
Colombia, all South American countries depend on
police forces to implement eradication and interdic-
tion operations. These forces are poorly trained and
equipped for their task, as compared with the military
forces engaged in similar counterinsurgent and securi-
ty operations.
In Peru, counterinsurgent operations take priority
over antinarcotics activities and over police antinarco-
tics operations, which can also suffer from military
interference. The US Embassy reported that, during
counterinsurgent operations in the Upper Huallaga,
the military commander confined the mobile narcotics
police to their barracks, leading indirectly to the
slaying of unprotected eradication personnel.
the military
avoids confrontation with traffickers to avert the
possibility that traffickers might join forces with
insurgents against a common military enemy. The
military even uses contacts with narcotics traffickers
to develop information on the whereabouts of insur-
gents,
Senior Colombian military attaches posted to
Washington say the military mission, as they see it, is
to pursue insurgents, not to waste resources fighting
drugs. They argue that guerrillas would like nothing
better than to see the military deeply involved in
antinarcotics operations because it would reduce pres-
sure on the insurgents.
Reports from several countries indicate that the mili-
tary forces generally denigrate police units and their
personnel and do not like working with them. As
expressed by a Peruvian regional commander, the
Army's primary role in joint operations is to assure
that the antinarcotics police refrain from extorting the
local citizenry. In a statement that could characterize
police forces throughout the region,
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poorly led, ill-equipped, and inept force not held in
high esteem by the public. Obsolete arms, poor com-
munications, and lack of mobility limit their effective-
ness. In a recent meeting with US Embassy officials,
Colombia's Minister of Justice expressed his opinion
that the traffickers' "army" of at least 2,000 well-
armed men in his country is more powerful and
efficient than the government security forces arrayed
against them. We believe the same is also true for
Bolivia.
Corruption Undermines Effectiveness
The money available to drug traffickers assures a
level of corruption, especially at the local level, that
undercuts national counternarcotics programs.
A Colombian Navy lieutenant re-
portedly was arrested in January 1985 for passing
confidential information to traffickers concerning ship
positions during a major interdiction effort. Special
narcotics police are particular targets of drug traffick-
ers.
after remaining relatively clean for the first few
months of the Siles government, Bolivian narcotics
police succumbed to temptation?a turn of events
described as "perhaps inevitable." President Victor
Paz Estenssoro, who took office in August 1984, has
pledged to eliminate such corruption, but the political
and law enforcement hierarchies remain vulnerable to
influence buying by wealthy traffickers.
Traffickers do not rely exclusively on the greed of
targeted officials, but rather use a highly effective
carrot-and-stick approach.
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Traffickers ensure that their money buys acquies-
cence above the field enforcement level as well. Cases
throughout the region demonstrate the point:
? The chief of Quito's National Police unit has point-
ed publicly to the existence of ties between traffick-
ers and Ecuadorean political figures, including
members of congress.
? Even after the end of the infamous Garcia Meza
regime?in which government officials actively par-
ticipated in the drug trade?allegations of corrup-
tion surfaced against members of former Bolivian
President Siles's administration up to the cabinet
level. It is not yet clear whether President Paz
Estenssoro will be able to carry out his pledge to
eliminate such corruption.
Paraguayan military and civilian officials historical-
ly have participated in a wide range of smuggling,
which increasingly includes drug trafficking.
leading military
officers provide protection for narcotics operations
and engage in trafficking themselves. According to
US Embassy reporting, major private traffickers are
immune to prosecution because of their political,
financial, and family connections with Paraguayan
officials.
? Effective drug enforcement in Argentina is ham-
pered by official complicity in the drug business.
The best documented case involves the Governor of
25
Salta Province who, along with a federal senator
and several provincial officials, is linked to a major
Bolivian drug ring, according to DEA sources.
? President Garcia of Peru recently fired 37 generals
in the Peruvian high command as well as several
commanders of the police's narcotics division for
corruption. In one instance, Peruvian Army helicop-
ters were being used to transport coca paste to
clandestine airfields for forward shipment to refin-
ing sites. Moreover, Peru's Civil Guard, responsible
for narcotics interdiction and enforcement, is one of
the most corrupt law enforcement organizations in
the country,
There is no evidence of high-level military or civilian
complicity in drug trafficking in Brazil. Serious eco-
nomic difficulties exist, however, and the administra-
tion has imposed austerity measures that will cause
cuts in many government activities. Under these
circumstances, the temptation to indulge in narcotics
trafficking or to receive bribes may overcome Brazil-
ian officials.
Some military leaders in South America resist an
antinarcotics role for their forces precisely because
they fear their men will fall prey to corruption.
Ecuador's
military officers typically eschew drug suppression
because they are afraid that their subordinates will
succumb to corruption, as have the police. Peru's
military leaders in September 1984 recommended to
President Belaunde a major force withdrawal from
the Upper Huallaga Valley because frequent contact
with traffickers there was resulting in the corruption
of underpaid Army troops. Although the problem is
greatest at the bottom, corruption is found at all
levels. Field-grade Bolivian officers continue to bene-
fit from drug payoffs, perpetuating the ties to traffick-
ers established under revious militar re ime
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Corruption and intimidation are particularly evident
in the courtroom. The local press is filled with stories
of the power of narcotics money to corrupt judicial
officials. Seized drugs disappear, traffickers vanish in
transit between prison facilities, and entire case re-
cords are "lost." Preferential treatment, such as spe-
cial food and permission to leave prison at night, is
commonplace. A Peruvian newspaper described a
"golden prison" where, on a judge's recommendation,
incarcerated traffickers declared "ill" enjoy a hospital
atmosphere, family visits, and conditions typical of a
private clinic. In Bolivia, the press claims that most
drug traffickers do not serve their full sentences, but
rather leave prison with simple medical certificates in
hand. Although such accounts undoubtedly cause a
degree of public indignation, they also demonstrate to
the public the strength of major traffickers.
Lessons Learned
We anticipate that illegal cocaine trafficking in Peru,
Bolivia, Colombia, and some of the adjoining coun-
tries will continue to expand over the short term, and
as it does public and official indignation could be
provoked, leading to more serious attempts at narcot-
ics control. Growing awareness of domestic drug use,
insurgent involvement, drug-related violence and cor-
ruption, and the political and economic influence of
major traffickers could impel authorities to greater
action across the board. Before any intensified control
measures can begin, there has to be public support;
there are signs that some Latin Americans now
recognize illegal narcotics production and trafficking
as a national problem. In a recent US Information
Service public opinion survey conducted among the
urban populations in Bolivia, Brazil, Colombia, Costa
Rica, and Venezuela, participants from Bolivia, Co-
lombia, and Venezuela selected international narcot-
ics as the second most important international prob-
lem after foreign debt. This is just a beginning,
however, and getting the rural population on board
may be another matter.
not only do the campesinos of Peru's
Upper Huallaga Valley see coca eradication as a
North American imperialist effort to bring about the
economic and social demise of the region, but, more
important, most of the military personnel posted there
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share the anti-US sentiment and oppose participating
in narcotics control.
Domestic Abuse
The rising domestic abuse of coca products, which has
reached serious proportions in the cities of some coca
producing countries, is focusing attention on narcotics
as a serious national health problem.
Colombia is already on the verge of an
uncontrollable epidemic of drug abuse among its
youth. Colombia's Minister of Health claims 600,000
persons under 18 regularly smoke cheap coca paste
cigarettes. This paste can contain impurities, such as
caustic soda, sulfuric acid, and kerosene, and users
run the risk of permanent brain damage after only one
try. Abuse of refined coca products was unheard of a
few years ago in traditional coca leaf chewing coun-
tries. Today, authorities estimate there are more than
150,000 users of cocaine products in Peru and 40,000
to 60,000 habitual smokers of paste in Bolivia?and
the numbers are growing rapidly. Evidence that drug
abuse is no longer exclusively a foreign problem
should help impel South American governments to
enact enforcement programs for domestic reasons.
Violence
Even in societies inured to violence, certain acts still
have the capacity to arouse outrage and spur in-
creased government action. The murder of Colombia's
Minister of Justice in April 1984 had such an effect.
The military "state of siege" subsequently proclaimed
by President Betancur and the reversal of his resis-
tance to extradition drove major traffickers into exile
and disrupted drug operations. Traffickers have re-
sponded to heightened antinarcotics efforts with in-
creased violence and threats, including death threats,
against heads of state and foreign diplomatic person-
nel. These have been luridly reported by the local
press, demonstrating to a broader segment of the
population the domestic consequences of an en-
trenched drug industry.
Challenge to the Establishment
Some evidence suggests the traditional economic and
political elites in the illicit coca producing countries
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are growing uneasy at the ability of cocaine traffick-
ers to buy influence, status, and position. Even though
most large traffickers keep much of their wealth
offshore, they also invest in legitimate businesses at
home as part of their quest for respectability. Newly
rich major traffickers can easily acquire all of the
trappings of the ruling class. The great wealth of the
drug kingpins enables them to dominate some enter-
prises, and recognition of this fact could lead the
traditional establishment to try to curtail their power.
The key to greater government commitment to nar-
cotics control may well be accelerating an apprecia-
tion by influential opinion makers?political leaders,
cabinet ministers, church officials, labor leaders, me-
dia figures?of the negative effects of a narcotics
industry. A number of public information drug aware-
ness programs?some with US assistance?are al-
ready under way in South America.
Insurgent-Trafficker Collusion
If authorities in Colombia and Peru decide that drug
traffickers and insurgents are cooperating on a large
scale, they might make more direct use of military
forces against narcotics centers.
Colombian insurgents tax narcotics opera-
tions in their operating territories, and guerrilla
camps have been discovered near cocaine processing
sites. Some government ministers in Peru have told
the press that similar connections exist between insur-
gents and traffickers, but the US Embassy reports
that not all officials?especially ranking military fig-
ures?are convinced that a significant link exists. At
present, both governments consider the problem of
combating the drug trade primarily a police matter.
Economic Impact
Drug money brings economic problems as well as
benefits. Money returned to the producing countries is
spent mainly for nonproductive activities, such as real
estate speculation and imported luxury goods, or for
expansion of the illegal drug business. Earnings from
narcotics can have a destabilizing effect on national
fiscal and monetary situations. The contribution to
inflationary pressures is the most generally acknowl-
edged detriment, but erratic drug money influxes are
27
also destabilizing to local exchange markets in those
areas with minimum controls. In other areas, like
Colombia, where exchange transactions are rigidly
controlled, clandestine narcodollar movements fi-
nance a pervasive underground economy that is com-
pletely outside government purview. One of the more
insidious features of such illicit gray economic activity
is the ease with which scarce capital can flee through
underground banking channels.
Regional Approach
Because drug trafficking is a cross-border, multina-
tional operation, emerging efforts at a regional ap-
proach offer the potential for the bigger payoff.
Leaders of South America's major coca producing
countries and officials from newly affected areas
publicly acknowledge the need for cooperation and
multilateral initiatives on narcotics suppression, but
bilateral mistrust still undercuts complete coopera-
tion. Neighbors wrangle over longstanding border
disputes, suspect each other's intelligence gathering
designs, and even doubt the sincerity of the antinarco-
tics commitment in adjacent countries. The interna-
tionalization of antinarcotics activity entails some
risks, such as a tendency to evade individual responsi-
bility, to let others carry the fight, or to duplicate
bureaucratic structures unnecessarily. Nevertheless,
we detect signs that countries may be ready to do
more than pay lipservice to a regional approach as the
most effective way to fight drugs.
Meeting in Ecuador in August 1984, the presidents of
Venezuela, Ecuador, Bolivia, and Colombia, along
with representatives of Panama, Nicaragua, and Peru,
issued the "Quito Declaration" calling for an interna-
tional fund to combat drug trafficking in Latin Amer-
ica and urging the United Nations to pass a resolution
condemning drug trafficking as a crime against hu-
manity. Venezuela's President Lusinchi, a prime mov-
er behind the declaration, believes it improves on
existing regional antinarcotics mechanisms because it
calls for stronger international supervision of individ-
ual government drug enforcement and drug control
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efforts. Venezuela also proposed a new draft conven-
tion on drug trafficking to the United Nations and to
the Organization of the American States for consider-
ation.
Officials from Colombia, Ecuador, Brazil, and Bolivia
met in September 1984 to plan cooperative measures
to control the spread of illicit drugs. They proposed to
reactivate regional and bilateral drug control agree-
ments and to negotiate new accords to interdict
regional trafficking and deny safehavens to traffick-
ers. Items suggested for future discussion included: a
regional police cooperation network; communications
links and intelligence sharing; controls on transport,
chemicals, and questionable bank accounts; and more
timely extradition and prosecution. Despite the coop-
erative spirit, real programs remain slow in develop-
ing. At the second International Drug Enforcement
Conference in Brasilia, Venezuela, Colombia, Brazil,
Panama, Bolivia, Ecuador, and Peru could reach only
a vague agreement to establish a regional communica-
tion and information center.
On the bilateral front, Colombia and its neighbors are
developing stronger antidrug ties. An agreement
reached with Ecuador last year calls for increased
cooperation, including the return of fugitives. A joint
commission with Venezuela continues to meet periodi-
cally at alternate sites along the border to discuss
mutual drug problems. Brazilian police likewise have
increased cooperation with Colombia; officials of the
two countries have established procedures for interac-
tion in the frontier area and an acetone-ether control
task force was created toward the end of 1984. In
August 1985 Colombian and Peruvian forces
launched surprise raids against processing centers
located near the remote border town of Leticia.
The Spillover Countries
We believe that the greatest successes in regional
cooperation can be achieved in the "spillover coun-
tries" where the illicit cocaine trade is just beginning
to take hold. Affected countries include Brazil, Ecua-
dor, Argentina, Venezuela, Panama, and Paraguay,
all faced in varying degrees with a developing drug
problem. In these areas, trafficking organizations as
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yet are smaller, less sophisticated, relatively unversed
in co-opting local authorities, and therefore more
vulnerable than their well-established counterparts in
the major cocaine countries. The forces arrayed
against the traffickers in the "spillover countries"
are undermanned, underfunded, ill-equipped, and un-
schooled because they have never faced a serious drug
problem before. An encouraging indicator, however, is
the expressed willingness of the governments to imple-
ment preemptive antidrug campaigns, notably in Bra-
zil, Venezuela, Ecuador, and Argentina. In fact,
among the newly affected areas only Paraguay is a
prominent holdout.
We conclude that attacking the spreading cocaine
problem on its developing periphery offers an immedi-
ate opportunity to curtail the traffic. If a successful
alliance of a group of South American countries
united against narcotics trafficking can be achieved,
at a minimum it will lessen the options open to
traffickers for expansion and evasion of enforcement
activities. Furthermore, attacking the cocaine connec-
tion where it is still relatively weak leaves more room
for the testing of programs necessary to evolve a
workable model for effective regional cooperation.
Perhaps most important, if such a model can be
devised among several "spillover countries," it may
serve as a prototype for the large cocaine producing
countries as well. Eventually, cooperation across the
continent could leave drug traffickers without the
convenient and essential safehavens that exist today.
European Assistance
The lack of resources remains a problem for countries
committed to fight drugs. Broader internationaliza-
tion of the anticocaine campaign would help in this
area. A positive sign is the increasing willingness of
European countries, where concern is growing over
the expansion of the cocaine market, to assist in what
has thus far been a US bilateral affair. Pending host
government approval, Narcotics Liaison Officers from
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the Federal Republic of Germany are to be assigned
to Brazil, Peru, Colombia, and Bolivia. The United
Kingdom also is considering placing narcotics inter-
diction specialists in various South American coun-
tries. Such efforts can be maximized by international
oversight and coordination. Ultimately, organizations
such as the United Nations could help erode national-
ist sensitivities among the regional players, leading to
better cooperation and more uniform suppression
measures.
Above all, a concerted regional South American
antidrug effort with international backing would serve
to highlight and enhance US bilateral measures in the
area. Not only would US-sponsored suppression pro-
grams receive broader support, but a worldwide audi-
ence increasingly would focus the heat of critical
public and official attention on the coca region as
well. When cocaine was considered a problem of the
United States it was easier for coca countries to
ignore, but the risk of appearing as international
outcasts could provide the extra stimulus to action
that is needed.
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Table 4
Steps in Production of Cocaine Hydrochloride and Intermediates
Process
Input
Output
Description of Output
Other Chemicals Required
Possible Substitutes
Description of Step
Where Performed
Remarks
Extraction
Coca leaves
Coca paste, also termed crude
cocaine base, masa, sulfato
(about 40 percent cocaine)
A dull white or brownish pow-
der with a sweet smell. Varies
from a semiliquid, acid-oozing
waffle batter to a crumbly
cookie dough formed into what
looks like a slightly used golf
ball.
Kerosene
Sodium bicarbonate
Sulfuric acid
Gasoline, toluol, benzene
Sodium carbonate
Hydrochloric acid
Sodium hydroxide
Dried coca leaves are soaked in a solution of sodium
bicarbonate for three or four days. Kerosene is added
to mixture and stirred well. This kerosene extract is
then drained and placed in a second container.
Hydrochloric acid is then added very slowly and a
precipitate is formed. Residue is allowed to dry in the
sun for about a day to form coca paste.
In makeshift "factories" or
"kitchens" near sources of
leaves.
The extraction step is often con-
ducted near coca-growing areas
because there is a substantial
weight reduction (about 60:1,
but variable), and only rudi-
mentary knowledge and equip-
ment are required.
Purification
Coca paste
Coca base, also termed purified Similar to above.
cocaine base (about 90 percent
cocaine)
Sulfuric acid
Potassium permanganate
Ammonium hydroxide
Hydrochloric acid
Potassium dichromate
Sodium hydroxide
Cocaine paste is dissolved in sulfuric acid. It is cooled
and filtered to remove solid impurities. Potassium
permanganate solution is added until pink color
remains. After standing four to six hours until solu-
tion is filtered to remove solids, ammonia water is
added to precipitate purified cocaine base. Precipi-
tate is washed with water and sun dried.
In "laboratories" sometimes
called "crystal labs" that may
be located in areas far removed
from area of origin?in Colom-
bia, Ecuador, Brazil, Argenti-
na, and Chile?but not in the
United States.
Crystallization and conversion to Coca base
cocaine hydrochloride
Cocaine hydrochloride, also
termed pure cocaine (99 per-
cent)
A white, crystalline, slightly
volatile powder with a slightly
bitter taste. The finished prod-
uct will take the form of flake
or rock. Pure flake appears
translucent and crystalline,
sometimes with a rose color.
Bolivian rock has a yellow tint.
Byproduct alkaloids produce a
chalky appearance.
Ethyl ether
Acetone
Hydrochloric acid
Chloroform, acetone
Methyl ethyl ketone
Hydrogen chloride gas
Cocaine base is dissolved in ethyl ether and filtered to
remove solid impurities. A mixture of ether, acetone,
and concentrated hydrochloric acid is added to pre-
cipitate cocaine hydrochloride. Precipitate is dried
carefully, using bright lights, and packaged for sale.
Same as above.
Ether is extremly flammable
and explosive, and fires in lab-
oratories have been reported.
"Cutting" or dilution
Pure cocaine
Street cocaine
White powder highly variable
dependent upon purity and na-
ture of adulterants.
Many adulterants are employed. Inert ingredients include manni-
tol, lactose, glucose, dextrose, inositol, boric acid, cornstarch, and
sodium bicarbonate. Methamphetamine, benzedrine, dexedrine,
caffeine, phencyclidine, and other drugs are also used.
Varies. The middleman "import step" may be performed
by reducing the cocaine and adulterant(s) to liquid and
reconstituting it to a rock. When adulterated at the
consumer level, most often the adulterant is mixed with
the cocaine and passed through a screen to distribute it
evenly.
In the United States by middle-
men in secret "coke mills."
Lower level dealers may also
cut the product, termed a
"kitchen hit."
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