Envío Digital
Central American University - UCA  
  Number 462 | Diciembre 2019


Latin America

Drug trafficking is embedded in Latin America’s politics and economy

A detailed look at how drug trafficking has been used in Latin America by both the Right and the Left to achieve their political objectives.

Roberto Orozco

The presence of drug trafficking in politics and the use of words we’re hearing more frequently to classify some governments as “narco-government,” “narco-State” or “narco-dictatorship,” have assumed a special relevance with the fall of Evo Morales’ regime in Bolivia. Accusations directed at governments in ALBA [the Bolivarian Alliance for the Peoples of America] seem to be a relatively recent phenomenon, but drug trafficking, one expression of organized crime, has been taking up political and economic spaces in all Latin American governments since nearly the middle of the last century.

International media are giving more coverage to drug- trafficking links to politics through continually updated stories as former police and state security agents, CIA and FBI members and specialized independent reporters investigate the issue more and more fearlessly. But the ties between drug trafficking and politics are nothing new. And to put it in ideological terms, drug trafficking also has no exclusive relationship with the Left. The Right has also benefited from it and has kicked out and replaced governments with its help.

Drug use is nothing new

An analysis of the causes that have allowed drug trafficking to penetrate into politics and more recently into the financial system and into the global economy as a whole shows us that drug trafficking has become an essential reality to the functioning of all countries and all governments. No government in Latin America or anywhere else in the world, has escaped these ties. They’re so essential that, basing myself on studies by specialists from the United Nations and many others researchers, I would affirm drug trafficking is here to stay.

Nor are drugs themselves, which seem so omnipresent to us today, a new reality. They have always been present in human societies; their use is an ancient human practice. In all human cultures we find the custom of consuming toxic substances that affect the brain to alter emotional states. Wine was called the “elixir of the gods” in Roman and Greeks cultures. Shamans from North America, Meso-America and South America have always consumed stimulating substances to provoke religious ecstasy.

Modern times, with industrialization and the development of transportation, have given access to activities and experiences that previously were exclusively for certain places, moments and persons. Increasingly widespread use and globalization made the trafficking of psychotropic substances big business.

Why does the youth of the USA and Europe use drugs? To get high, to reach ecstasy, to increase the levels of dopamine in their brains, to forget, to escape… all the same reasons as those humans who used them centuries ago, millenniums ago.

What’s changed is that consumption is now massive and availability is global. As a result, drug trafficking has become so embedded into political and economic systems worldwide that these systems could no longer function without this business. The relationship between politics, the economy and drug trafficking is now symbiotic.

Organized crime is a dominant
actor during financial crises

In a not-so-public 1995 public study, given its implications, UN specialists on organized crime and drug trafficking concluded that the mafias (referring to all the various expressions of organized crime, the most important of which are related to drug trafficking) have morphed into important, almost essential actors within the governments’ economic and social politics. How did the United Nations come to this conclusion? The study says it’s because state systems have collapsed under the weight of financial crises.

Today everyone knows Latin American governments are constantly going through financial crises as their national budgets, whose deficits are always greater than revenues, have become a heavy load on them. This also happens in wealthy countries, like the United States, where the deficit gap is also growing.

It was during such increasingly frequent financial crises that organized crime started playing a dominant, even indispensable, role in state economies and politics given the huge profits it generates, especially through drug trafficking. According to calculations by international specialists based on projections, this business produces at least a trillion dollars annually, more than all other expressions of organized crime combined (arms traffic, human trafficking, piracy…).

Everyone wants a piece of
the drug trafficking profits

What is to be done with so much money from illegal origins? Legalize it. Cover it up, making it appear like legal profits by creating companies as fronts or inserting it into the legal financial system. And in the process of covering it up, a legal economic system is structured on the foundation of an illegal economy.

All expressions of organized crime, especially drug trafficking, generate up to ten times more profits than transnationals such as Microsoft, Google or Facebook. By absorbing these huge profits, the formal economy becomes more and more dependent on drug trafficking. That’s the bottom line of why it’s here to stay.

Logically, all governments, all States and private companies, according to this UN study, seek to partake in these profits. They need them. The United States, France, England, Australia, China, Russia, all those countries where the state system is strong, seek to take over this sector of the economy because it allows them to capitalize on, strengthen and increase their economies. This one fact speaks for itself: Each year the US financial system launders US$100 billion from drug trafficking.

Another paragraph of the UN study points out that the greatest part of the profits collected by criminal organizations is recycled through perfectly normal channels. That’s where the fine line between what is legal and what is illegal is not only blurred, but becomes opaque. And when illegal money crosses that line, it is recycled with the help of other legal parties, according to this report, be they governments or private enterprise. Therefore, a symbiotic relationship is established between legal and illegal. Another bedrock reason why drug trafficking is here to stay.

Banks and government
bonds recycle dirty money

Another conclusion from the report is that dirty and disguised money is deposited in legal commercial banks, and is then used to increase their loans to businesses, government assets and bonds, etc. Therefore, the bonds issued by governments to cover deficits also serve to launder money.

Several Latin American governments have state bond sales. And who is first in line to buy them? Private banks. The report says that through those bonds criminal organizations become creditors of a large part of the public debt and exercise a tacit tactical influence on the government’s macroeconomic policies. One can deduce from this that in countries with the greatest public debt growth also have more money from organized crime.

Banks clearly receive money from different expressions of organized crime and, by accepting it, they “launder” it, making it legal, and later use it to give out loans. That is one way dirty money is recycled. By entering in such enormous quantities it has become essential to the functioning of all economies and all governments. To repeat: here to stay.

Bolivia’s case brings drug
trafficking in to the headlines

We are told, and most of us agree, that the capitalist model has caused the increase in poverty in Latin America. But according to the UN study, it’s no longer capitalism. Now it’s organized crime. The study says drug trafficking and other expressions of organized crime are what are increasing the gap between the rich and the poor in our times. It’s within this context in which all expressions of organized crime are now embedded in the global economic and political systems that we can analyze the most recent Latin American crises, which the Bolivian case has brought to the headlines.

Unconfirmed accusations indicate that a drug-trafficking route that passes through Venezuela, reaches Cuba and later the US, originates in Bolivia. Its traffic starts in the coca-growing region of Chapare, where Evo Morales has been and continues to be the coca growers’ union leader. What come out of Chapare are the raw materials: coca leaves and cocaine paste. Peru has beat Colombia in cocaine production in recent years.
The cocaine hydrochloride paste produced in Bolivia is the purest, almost 100% pure. And this is the most valued paste because it allows for a greater quantity of kilos of cocaine to be made.

The accusations made against Bolivia are being investigated. A multinational investigation has been requested by the Organization of American States’ Inter-American Treaty of Reciprocal Assistance. While a lot of information is already circulating, much investigation still needs to be done. So far the US government has not presented a single piece of evidence that the three governments linked to ALBA—Venezuela, Nicaragua and Bolivia—are directly linked to drug trafficking or have benefited from it. In 2015, a Bolivian coronel, German Cardona, charged that coca growers in the Chapare region led by Evo Morales had created a mini-cartel to provide raw material to Colombian and Peruvian cartels and that Evo inaugurated the Chimoré international airport from which planes loaded with cocaine flew out to Venezuela. This is the only information, so far unofficial, that exists about those ties, and they are yet to be considered evidence.

To get a leg up on the investigations, international media and experts no longer talk about “failed States” in Latin America. They refer to narco-governments and narco-States because, for better or for worse, it has been proven that this symbiosis between organized crime, States and governments keeps the States from actually “failing.” It has also been proven that organized crime ends up governing quite well in those areas where the State no longer exists or functions. In those cases, organized crime is a State within the State because it does what the State should be doing: guarantees social control, regulates the economy and grants protection and security.

Drug-trafficking isn’t just
tied to leftist governments

If the use of drugs is an ancient human activity; ties between drug trafficking and politics in Latin America are also no novelty. Political events and scandals in Latin America from 40, 50 years ago show ties, mutual benefits and an interactive relationship between politics and drug trafficking. Moreover, this relationship is not exclusive to leftist politics, as is claimed these days.

The Right has also used drug trafficking to enthrone itself in political power. For example, in Bolivia in 1980, Major General Luis García Meza came to the presidency through a coup financed by the main worldwide drug lord of those times, Roberto Suárez Gómez, known as the “king of cocaine.” He was Pablo Escobar’s supplier.

García Meza was from the Right, of Latin America’s Liberal indoctrination, a conservative military, responsible for the killing of Marcelo Quiroga and other Bolivian intellectuals. He was accused of crimes against humanity, imprisoned for them and died of a heart attack in prison.

Another case involved Colombian President Ernesto Samper Pizaro, a member of a wealthy and influential aristocratic who won on the Liberal Party ticket in 1994. In this case, officially known as the 8000 Process, his electoral campaign was investigated and financing by the Cali cartel was demonstrated. The attorney general, minister of defense and almost half of Colombia’s congress members, all of them politicians from the Right, were also tried in the 8000 Process for their ties with drug trafficking.

There are also examples from Mexico. Members of the Institutional Revolutionary Party (PRI), a center-right party, committed a series of political assassinations in 1994. The killing of PRI presidential candidate Luis Donaldo Colosio stands out. It was broadcasted live on TV, where we saw a hitman shoot Colosio in the head during a closing campaign act. Raúl Salinas de Gortari, brother of Carlos Salinas de Gortari, Mexico’s President at the time of the crime, was accused of the murder and during the trial all the connections between Raúl, his buddies and drug trafficking came out into the open.

There’s also proof, back in the 1980s, of drug-trafficking ties with both the Right and the Left, as the Pablo Escobar Gaviria case illustrates. From 1982 to 1983 he was a congressional representative of the rightwing Liberal Alternative. After being separated from his position, he got close with those on the Left. His passing through Nicaragua and his ties with leaders of the Nicaraguan revolution during the 1980s are amply documented.

The FARC and drug trafficking

The turning point to analyze the Left’s ties with drug trafficking, to understand what we’re seeing in other governments of our region, has to be sought out in the Revolutionary Armed Forces of Colombia (FARC). Everyone knows about that guerrilla organization’s relationship with drug trafficking over time through everything the Colombian government and independent authors have investigated.

Starting in the early 1980s, the FARC received coca leaves and coca paste from Bolivia and escorted the drug shipments and cargo that Escobar and other Colombian drug lords transported to the US. The FARC also provided security to guarantee the trafficking deals. Doing this was made easy by the control it had over the territories where it had armed presence.

The FARC started by selling these services to drug traffickers. However, the moment came during those years when they realized that with their acquired experience it was more profitable for them to become drug traffickers than to provide services to others. From then until they demobilized through the peace accords in 2016, they became the main organized crime structure in Colombia; particularly the country’s main drug dealers, surpassing the sales of both the Medellín and Cali cartels.

The bulk of their income came from the distribution and transfer of drugs to North America and Europe, although drug trafficking was not their only source of financing—they also obtained earnings from kidnappings and extortions. The extradition of many FARC leaders has been requested by US justice for delivering hundreds of kilos of drugs over the years.

Colombia’s attorney general revealed a couple of years ago, that by his calculations and those of the Colombian Army, the FARC’s fortune at the time of its demobilization was US$21 billion to be laundered and disguised through “cooperation” projects. While that is only alleged, what has been proven with abundant evidence is that the root of the Left’s close ties with drug trafficking is to be found in the FARC’s relationships with Venezuela, Cuba and with Latin America’s leftist movements.

Drug trafficking is
now a leftist strategy

Due to the huge amount of wealth it produces, drug trafficking has been seen as an opportunity both by the Right and the Left in Latin America to achieve one or another of their political objectives, be it to reach power, kick someone out of power or any other objective.

There’s a big difference between the two ideological visions, however, and it is best explained by the current phenomenon. While the Right saw drug trafficking as a factor for a specific opportunity, the Left saw it as a long-term factor of strategic opportunities. Returning to the example of García Meza, he used drug trafficking to reach power and, once there, paid the drug traffickers who financed him by letting them continue with their business.

The Left has always gone further. It has taken ownership of drug trafficking, secured its power in it and made it its business. This was made clear by Carlos Lehder, one of the three founders of the Medellín cartel, with Pablo Escobar and Gonzalo Rodríguez Gacha, alias “the Mexican.” Later the Ochoa brothers were added to this cartel. Back in 1985, in a TV interview in Colombia, Lehder declared: “Cocaine is Latin America’s atomic bomb.” Latin America’s revolutionary movements were being born thanks to the market the United States apparently needs to function.

Back then, Lehder had no problem revealing that cocaine was being used to finance leftist movements in Latin America. So we can see that the strategy of using drug trafficking to seek power, win power, take over power and stay in power has been present in Latin America’s leftist movements for decades. On this issue, like many others, we must have historic memory and review the past, because the past defines the present and the present defines the future.

Central American governments
also have connections

We’ve now seen examples in Mexico and South America, but there are obviously also connections between politics and drug trafficking in Central America. In fact, there’s an abundance of examples. Recently the Discovery Channel broadcasted a documentary that can be considered a testimony about the presence of Pablo Escobar in Nicaragua. Carlos Lehder also came here. After killing Rodrigo Lara Bonilla, the Colombian minister of justice, Lehder and other Colombian drug traffickers lived in Nicaragua during the years of the revolution. Many testimonies that speak about the presence of drug trafficking in Nicaragua during the 1980s, the embryo of the presence drug trafficking now has in our country.

In recent years the International Commission against Impunity in Guatemala and more recently the Mission to Support the Fight against Corruption and Impunity in Honduras have uncovered the connections these two countries’ governments and business elite have with drug trafficking.

Today the Honduran government is facing a serious problem because President Juan Orlando Hernández’s brother, who was a congressman, has been tried and sentenced in the US for drug trafficking crimes. In El Salvador, the Texis cartel, with broad connections in that country’s executive and legislative branches, are being investigated for drug trafficking crimes.

All this shows that drug trafficking is part of political life, government life and in the life of the Sate in Central and South American countries. This activity, whether promoted or allowed by the region’s governments, is also the main threat to US security.

Nayib Bukele is facing a huge challenge

Despite multiple accusations against the ALBA countries, only one expression of ties with organized crime is being investigated judicially in Central America. It is being done in the Fourth Court of Peace of El Salvador, which received concrete accusations based on investigations from the US of ties with Alba Petróleos of El Salvador, a company alleged to be involved in money laundering crimes to the tune of US$3.2 billion. The accusation could be proven in this judicial process. The individual accused is the FMLN secretary general, José Luis Merino—known as “Coman¬dante Ramiro” during that country’s civil war—who has¬ been the main administrator of Venezuelan cooperation in El Salvador.

Salvadoran President Nayib Bukele is facing a huge challenge which, if handled successfully, could have a positive influence in the politics of the other Central American governments. The challenge is to proceed judicially against those in the FMLN who acted corruptly during the ten years they were in the government. Bukele is requesting the extradition of former President Mauricio Funes, who fled several pending trials for corruption by seeking refuge in Nicaragua. He and his children now receive salaries from Nicaraguan State institutions and he was even granted Nicaraguan citizenship.

But that’s only one case. For us to be able to see Bukele’s commitment to freedom and democracy, he has to start digging deeper and investigate those corruption problems the Left bequeathed his country.

Narco-governments or
US destabilizing tactics?

Drug trafficking is present today in the political and economic endeavors of all Central America. Panama has been a tax haven where money is laundered for some time now. The economic growth experienced by Central American countries is due largely to the injection of illegal money from drug trafficking into several sectors of the economy: construction, tourism, transport and the like. Many economic activities depend on this money today. Everyone in Central America knows someone who was simply a hotel owner, a truck driver or a banker and all of the sudden became a millionaire.

There are many accusations of ALBA countries as “narco-governments.” They include secret reports from within the governments themselves, leaked information that has reached the US, but has yet to be proven true. I want to be clear: so far there is no proof of the participation of any of these governments in drug trafficking. There’s only leaked information and accusations made in international media. In all this tangled mess of accusations and finger-pointing at the ALBA countries, only one process is in the works, one that started in El Salvador in the middle of this year.

Before all the accusations and the volume of information currently circulating, governments of the “socialist” countries pointed to as “narco-governments” accused the US of creating fake information to destabilize them. It could be true, but the Left has been using this same argument since the 1970s to discredit any investigation of real cases.

By now nobody can deny the ties the FARC has or at least had with drug trafficking in Colombia and how that guerrilla group became the main drug-trafficking cartel in the country. It has been proven with thousands of files from judicial processes against its members. In the concrete case of the FARC, there’s enough evidence to definitively say that it’s not a CIA-US government conspiracy to destroy the leftist revolutionary movements. It has been demonstrated that it’s a strategy of leftist revolutionary movements to link themselves to drug trafficking to obtain resources for their political objectives. The responsibility is theirs.

I also want to point out that I know of no statement from intellectuals of the new Left, the renovated Left, which is so critical of caudillos or the cooption of social movements by leftist governments, that has addressed what the ties to drug trafficking means to Latin American leftists. I haven’t read any leftist writer analyzing the political and ethical consequences of these ties. Nor do I know of any proposals from the Left in response to the drug trafficking phenomenon.

Drug trafficking generates violence

One of the leftist justifications for using this strategy was already mentioned by Carlos Lehder when he called cocaine “our atomic bomb.” It’s another way of saying Let’s flood the US with drugs; if the gringos want to kill themselves, let ’em… but we’ll end up with the money.

The trouble is they’re not just killing themselves by using drugs. Organized crime always generates an amount of violence directly proportional to the “criminal density,” defined by the number of criminal organizations in a specific territory, which provoke enormous amounts of violence in the struggle to dominate the market. The UN Office on Drugs and Crime draws up maps, which they publish, of the “criminal density” in Mexico, Colombia, Peru and Bolivia. They don’t only map out crops and production but also the structures and organizations.

Will legalization reduce violence?

There are currently many schools of thought about how to decrease the violence generated by drug trafficking, most of which consider the most effective route to be to legalize drugs instead of banning and fighting them. The International Commission on Drugs, created in Bogota and to which many former Latin American Presidents belong, first promoted that idea. They did so because their governments have been fighting them and, like the US, have had no success with their effort.

I believe legalizing drugs could be one of the immediate solutions to the drug trafficking problem and the violence it generates. Studies about the consequences of ending the alcohol prohibition in the US and its legalization in the 1920s are often pointed to as a precedent. They looked at the effects of legalizing alcohol on public safety, on families, and on different sectors. Those studies could serve as a base to suggest what effects legalizing drugs could have.

We know one of the immediate effects of legalizing drugs in Latin America when marihuana was legalized in Uruguay. That drug repaid the State in this country, which now taxes them as it does for the sale of cigarettes. In California and other parts of the US, marijuana was also legalized and is taxed. In all these places the legalization has had no significant negative impact on public security. Taking the profit hegemony away from the big traffickers could be a solution. At least they won’t be the only ones making money; so would the State.

Drug trafficking is here to stay

The problem here is a conflict of interests. Because the truth is that the interdiction of drugs generates much more money for the State than the taxes it could produce by legalizing the sale of drugs. That’s why the US went from having a single anti-drug agency—when it created its war on drugs policy—to now having 72 agencies. Many States resist legalizing drugs for economic reasons, because of this conflict of interests. And that’s why I say drugs are here to stay.

Another reason for arguing that they’re here to stay is the get-rich-quick attraction drug trafficking offers the youth. It’s an opportunity that attracts many common and ordinary people. Pablo Escobar’s case is exemplary. He was a peasant living in a remote region of Colombia. To improve his position, he first got into common crime and later into drug trafficking because he saw the opportunity for immediate wealth. Following this route, he became a magnate who offered to pay off Colombia’s entire external debt.

Pablo Escobar fell, but business continues. Drug trafficking has always been very fluid. Traffickers are always rotating, being substituted. There are drug traffickers who survive the violence and reach a certain age to become personally legal, laundering their economy and properties, inserting their companies into the legal economic system and retiring under the law of “omertá,” which means the commitment not to reveal any of the businesses’ secrets. Some take advantage of the collapse of the structures where they operate to leave, to say they are retiring, sometimes they serve time, but continue to be business owners, businessmen or legal representatives. Many invest their money in stocks and continue to earn profits through savings or investments or loans, but those who reach old age and decide to do this can be counted on the fingers of one hand.

Others immerse themselves in the violence; it swallows them and they die along the way. But drug trafficking networks remain very much alive because there are always those who replace the ones who become legit or who die. This makes drug trafficking a very dynamic business, always renewing itself. They killed Pablo Escobar, the Medellín cartel was broken up and five new cartels were born. They caught the Rodríguez Orejuela brothers, imprisoned them, broke up the Cali cartel and five new cartels emerged. In Mexico, only the Sinaloa cartel has not dispersed. Other Mexican cartels—the Michoacana Family and the El Golfo cartel—dispersed into other smaller cartels or were absorbed by the Sinaloa cartel.

Drug trafficking is embedded
into worldwide economy

What happens if a government decides to confront drug trafficking? The result could be worse: more violence. Mexico is proof. Calderón succeeded Vicente Fox, and after a period of certain tolerance of drug trafficking activities, Calderón began the “war against drug trafficking” due to foreign pressure, mainly from the US government, and we’ve seen the results.

The government allied with one cocaine cartel so it would fight other cartels to exterminate them under the premise that it’s better to fight one enemy than five or six. This allowed the Sinaloa cartel to become so strong it became the number one drug trafficking power worldwide with a presence in 152 countries and with drug traffickers who appear in the list of multimillionaires published by Forbes magazine.

In conclusion, we have to admit that the widespread growth of drug trafficking generated by globalization has allowed this illegal economy to become embedded in formal economies worldwide, to the extent that today, the legal economy can’t exist without it because a symbiosis, or co-dependency, has been created.

We also have to understand that the widespread increase of transportation allows drugs and illegal money to quickly reach any corner of the world today. It isn’t a Machiavellian plan of domination. It actually responds more to a factor of opportunity, which is what allows us to affirm that drug trafficking, is here to stay.

As for the argument that the crisis of leftist Latin American governments is the product of US destabilizing efforts, we need a little more time to see if there’s any truth to it. Time alone will unmask absolutely everything, eventually.

Roberto Orozco is a researcher and expert in security and organized crime.

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