Cali Cartel

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Cali Cartel
Gilberto Rodríguez Orejuela
Miguel Rodríguez Orejuela
José Santacruz Londoño
Hélmer Herrera Buitrago
Jairo Ivan Urdinola-Grajales
Julio Fabio Urdinola-Grajales
Henry Loaiza-Ceballos
Victor Patiño-Fomeque
Phanor Arizabaleta-Arzayus
Raul Grajales-Lemos
Luis Grajales-Posso
Juan Carlos Ortiz Escobar

The Cali Cartel was a drug cartel based in southern Colombia, around the city of Cali and the Valle del Cauca Department. The Cali Cartel was founded by the Rodríguez Orejuela brothers, Gilberto and Miguel, as well as associate José Santacruz Londoño. Later Cali cartel principals included Hélmer Herrera, Jairo Ivan Urdinola Grajales, Julio Fabio Urdinola Grajales, Henry Loaiza Ceballos, Victor Patiño Fomeque, Phanor Arizabaleta Arzayus, Raul Grajales Lemos, Luis Grajales Posso, Bernardo Saenz and Juan Carlos Ortiz Escobar.[1]

Contents

[edit] Foundation

Gilberto Rodriguez Orejuela
Gilberto Rodriguez Orejuela

At the foundation of the Cali Cartel was the Orejuela brothers and Londoño, all coming from what is described as a higher social background than most other traffickers of the time.[2] The recognition of this social background was displayed in the groups nickname as "Cali's Gentlemen."[3][4]

The group originally assembled as a ring of kidnappers known as Las Chemas, which was led by Luis Fernando Tamayo Garcia. Las Chemas were implicated in numerous kidnappings including that of two Swiss citizens, a diplomat Herman Buff and a student, Werner Jose Straessle. They reportedly received $700,000 dollars in ransom, which is believed to have gone on to fund their drug trafficking empire.[5]

The assembled group first involved itself in trafficking marijuana. Due to the products low profit rate, and larger amount required to traffic to cover resources, the fledgling group decided to shift their focus to the more lucrative drug, cocaine.[5]

In the early 1970's the cartel sent Helmer "Pacho" Herrera to New York City to establish a distribution center. This action came during a time when the United States Drug Enforcement Administration (DEA) was not fully pursuing cocaine, and viewed the drug as less critical than heroin, at one point releasing a report stating of cocaine it "is not physically addictive ... and does not usually result in serious consequences, such as crime, hospital emergency room admissions or both."[5]

[edit] Organization

Miguel Rodriguez Orejuela
Miguel Rodriguez Orejuela

The lax attitude of the DEA on cocaine is believed to be what allowed the group to prosper, but also to develop and organize itself into multiple "cells" that appeared to operate independently, yet reported to a "celeno" or manager, who then reported back to Cali.[4] The independent cell structure is what set the Cali Cartel apart from the more dominant Medellín Cartel. The Cali Cartel operated as a tight group of independent criminal organizations, as opposed to the Medellíns' structure of a central leader, Pablo Escobar.[3][6]

It was believed each cell would report to a larger group, who would then report to the leaders of the cartel. The groups as cited by former Cali accountant Guillermo Pallomari are:[7]

  • Narco-trafficking: Control over processing labs, shipping methods and routes.
  • Military: Control over security, punishment/discipline and bribery in relation to military or police officials.
  • Political: Responsible for forging governmental links, Congressional members, federal officials and local authorities.
  • Financial: Control over money-laundering, front businesses and legitimate business ventures.
  • Legal: Control over representation for captured traffickers, hiring of lobbyists and overseas representation.

The Cali Cartel would eventually go on to be known by then DEA chief Thomas Constantine as "The biggest, most powerful crime syndicate we've ever known."[8][4]

[edit] Activities

[edit] Trafficking

The Cali Cartel, whose brief roots began in trafficking marijuana, soon shifted to cocaine due to its ease of transporting and greater profit margin. The cartel would be known for innovation in trafficking and production by moving its refining operations out of Colombia to Peru and Bolivia, as well as for pioneering new trafficking routes through Panama. The Cartel also diversified into opium and was reported to have brought in a Japanese chemist to help its refining operation.[9][6]

According to reports and testimony of Thomas Constantine to the United States Congress, "Cali would be the dominant group in trafficking South American heroin due to their access to the opium growing areas of Colombia." Debate over the cartels participation in heroin trafficking remains. It is believed the cartels leaders were not involved in heroin trading, however close associates to them were, such as Ivan Urdinola-Grajales.[4] Their relationships it is believed lead to cooperation with heroin distribution centers.[5]

At the height of the Cali Cartel's reign, they were cited as having control over 70% of the worlds cocaine market and, for being directly responsible for the growth of the cocaine market in Europe, controlling 90% of the market.[4] By the mid 1990's the trafficking empire of the Cali Cartel was a multi-billion dollar enterprise.[10][3]

[edit] Financial

Cali Cartel money laundering chart (click to enlarge)
Cali Cartel money laundering chart (click to enlarge)

In order to launder the incoming money of the trafficking operations, the Cali cartel heavily invested its funds into legitimate business ventures as well as front companies to mask the money through. In 1996 it was believed the Cartel was making 7 billion in annual revenue.[3][11][12]

With the influx of cash comes the need to launder the funds. One of the first instances of the Cali Cartel laundering operations came when Gilberto Rodriguez Orejuela was able to secure the position of Chairman of the Board, of Banco de Trabajadores. The bank was believed to be used to launder funds for the Cali cartel, as well as Pablo Escobars' Medellín Cartel. Cartel members were permitted, through their affiliation with Gilberto, to overdraft accounts and take out loans without repayment.[5][11][4]

Capitalizing off of this basis, Gilberto was able to found the First InterAmericas Bank operating out of Panama.[5] In an interview with Time magazine, Gilberto admitted to money being laundered through the bank, however attributed the process to only legal actions. The laundering, which Gilberto states was "in accordance with Panamanian law", is what lead to the US authorities pursuing him. Gilberto later started a the Grupo Radial Colombiano, a network of over 30 radio stations and a pharmaceutical chain named Drogas la Rebaja, which at its height amassed over 400 stores in 28 cities, employing 4200 employees. The pharmaceutical chains value was estimated at $216 million.[13][11][4]

[edit] Bribery

See also: 8000 Process

In contrast to the Medellín Cartel who went to war with the government of Colombia, engaging in narco-terrorism, the Cali cartel attempted instead to gain influence within the government through bribes and favors.[6] Gilberto was once quoted as saying "we don't kill judges, we buy them." It is believed Miguel Orejuela at one point had over 2,800 people on his payroll, from government officials to taxi drivers.[3] The Orejuela's social background is cited as being a contributing factor to their relations with the oligarchy of Colombia. One of the most public revelations of attempted bribery came when it was revealed the presidential campaign of Ernesto Samper had received 6 million from the Cali cartel.[9] As fallout from the revelation, Sampers' 1995 campaign manager, Santiago Medin was forced to retire, as well as three other government ministers for their involvement with the Cali cartel, or accepting money from them.[2][3]

Due to the depths of the Cali cartels bribery and governmental influence, Prosecutor General Alfonso Valdivieso stated "The corruption of the Cali cartel is worse than the terrorism of the Medellín cartel ..."[14]

[edit] Violence

[edit] Discipline

Political violence was largely discounted by the Cali Cartel, as the threat of violence often sufficed. The organization of the cartel was structured so that only people who had family in Colombia would handle operations that involved both Cali and U.S. sites, keeping the family within reach of the cartel. Family members became the cartel's insurance against members going to the officials or refusing payments of product received. The threat of death also hung over those who made mistakes. It is believed the cartel would often kill junior members who made gross errors.[6] While government officials were often spared violence, junior members and the city's poor reportedly were not.[4]

[edit] Social cleansing

In End of Millennium, Manuel Castells states the Cali Cartel had participated in social cleansing of hundreds to thousands of "desechables" (English: Discardables). The desechables included prostitutes, street children, petty thieves, homosexuals and the homeless. Along with members of the local bourgeoisie, the Cali Cartel formed parties self named grupos de limpieza social (English: social cleansing groups) who murdered the "desechables," often leaving them with signs on them stating: "Cali limpia, Cali Linda" (English: Cali clean, Cali beautiful). The bodies of those murdered were often tossed into the Cauca River, which later became known as the River of Death. The municipality of Marsella in Risaralda eventually went broke at the cost of recovering corpses and conducting autopsies.[2][15]

[edit] Retaliation

Jose Santacruz Londoño
Jose Santacruz Londoño

In the early 1980's and 1990's the left-wing paramilitaries had struck at the drug cartels. In 1981 the then paramilitary group, Movimiento 19 de Abril (English: 19th of April Movement) (M-19), kidnapped Marta Nieves Ochoa, the sister of the Medellín Cartels Ochoa brothers, Jorge, Fabio and Juan David. M-19 demanded a ransom of 15 million for the safe release of Marta Nieves, but were rejected. In response to the kidnapping the Medellín and Cali cartels, as well as associated traffickers, formed the group Muerte a Secuestradores (English: Death to Kidnappers) (MAS). Traffickers contributed funds, rewards, equipment and manpower for MAS operations. Leaflets were soon after dropped in a soccer field in Cali announcing the formation of the group. MAS began to capture and torture M-19 members in retaliation. Within 3 days Marta Nieves was released. The group MAS however would continue to operate, with hundreds of killings attributed to them.[16][5]

In 1992 the guerrilla faction Fuerzas Armadas Revolucionarias de Colombia (English: Revolutionary Armed Forces of Colombia) (FARC) kidnapped Christina Santa Cruz, the daughter of Cali Cartel leader José Santacruz Londoño. FARC demanded in exchange for the safe return of Christina a ransom of $10 million. In response the Cali Cartel kidnapped 20 or more members of the Colombian Communist Party, Patriotic Union, the United Workers Union and the sister of Pablo Catatumbo, a representative of the Simón Bolívar Guerrilla Coordinating Board. Eventually, after talks, Christina and the sister of Catatumbo were released. It is unknown what happened to the other hostages taken by the cartel.[16][5][14]

During the narco-terror war waged by Pablo Escobar on the Colombian Government, it is believed a hired assassin attempted to kill Herrera while he was attending a sports event. The gunman opened fire with a machine gun on the crowd where Herrera was sitting, killing 19, however not hitting Herrera. In response to the attempted assassination, the Cali cartel responded by kidnapping and killing Gustavo Gaviria, cousin to Pablo Escobar. Herrera is believed to be a founding member of Los Pepes, a group who operated alongside authorities with the intention of killing or capturing Pablo Escobar.[17]

[edit] Counterintelligence

The counter-intelligence efforts of the Cali Cartel often surprised the DEA and Colombian officials. It was discovered in a 1995 raid of Cali Cartel offices, that the cartel had been monitoring all phone calls made in and out of Bogotá and Cali including the U.S. Embassy in Bogotá and the Ministry of Defense. The laptop, reportedly acquired through Israel, allowed Londoño to eavesdrop on phone calls being made as well as analyze phone lines for wiretaps. While officials were able to discover the use of the laptop, it is reported they were unable to decrypt many of the files due to sophisticated encryption techniques.[2] Londoño was also believed to have a person within the phone company itself, which the officials realized when he was able to recognize a phone tap, one that had been placed directly at the phone company, instead of at his residence. Londoño's lawyer soon sent an official notice requesting the legality and requesting the warrant if one was produced.[18][2]

Included in the list of government officials and officers on the Cali Cartel payroll were a reported 5,000 taxi drivers. The taxi drivers would allow the cartel to know who was arriving in the city and when, as well as where they were staying. By having numerous taxi drivers on the payroll, the cartel was able to monitor the movements of officials and dignitaries. It is reported by Time Magazine, in 1991, DEA and U.S. Customs Service (now ICE) agents were monitoring a shipment being offloaded in Miami, only to find out later that the DEA agents were the target of Cali surveillance at the same time.[18]

[edit] Medellín cartel relations

[edit] First InterAmericas Bank

Jorge Ochoa, a high ranking Medellín financier, and Gilberto Rodriguez had been childhood friends and would years later co-own the Panamanian First InterAmericas Bank. The institution would later be cited by United States officials as a money laundering operation, allowing both the Cali Cartel and the Medellín Cartel to move large amounts of funds through the bank. Only through diplomatic pressure, on then Panamanian President Manuel Noriega, could the U.S. put an end to the banks use as a money laundering front.[16] Gilberto Rodriguez would later in a Time Magazine interview admit to laundering money through the bank, however states no Panamanian laws were broken during the process.[11]

[edit] Muerte a Secuestradores

Main article: Muerte a Secuestradores

The two cartels would participate in other joint ventures in later years, such as the founding of MAS, who successfully returned Ochoa's kidnapped sister, Marta Nieves Ochoa. Expanding on the prior success of MAS, the cartels and independent traffickers would meet again. The second meeting is believed to have been the start of organization in trafficking between the primary participants, the Medellín cartel, and Cali cartel. The two cartels divided up the major United States distribution points between themselves, the Cali cartel taking New York City and the Medellín cartel taking South Florida and Miami, Los Angeles was left up for grabs. Through their affiliation in MAS, it is also believed the cartels decided to work together to stabilize prices, production and shipments of the cocaine market. The strategic alliance formed in the foundation of MAS in 1981 was starting to crumble by 1983-1984 due to the ease of competition. As the cartels set up infrastructure, routes, transport methods and bribes, it became easier for competition and establish similar deals, or make use of those already in place by other cartels. By 1987 the cooperation forged by the formation of MAS has no longer existed, contributing factors to this demise was the Medellín cartels' Rodriguez Gacha, who attempted to move in on the New York City market, previously ceded to the Cali cartel and, the 1986 arrest of Jorge Ochoa at a police roadblock, an arrest the Medellín cartel believed was suspicious and attributed partly to the Cali cartel.[16]

[edit] Los Pepes

Main article: Los Pepes

In later years as Pablo Escobars' narco-terror war escalated against the Colombian government, the government began to strike back in ever escalating battles. As the Medellín cartel weakened due to the fighting and constant pressure, the Cali cartel grew in strength, eventually founding Los Pepes or Perseguidos por Pablo Escobar (English: People Persecuted by Pablo Escobar). Los Pepes was specifically formed to target the Medellín cartel and bring about the downfall of Pablo Escobar. It is believed Los Pepes provided information to Bloque de Busqueda (English: Search Bloc) a police/army unit specifically created to track down Medellín leaders. In exchange for information Los Pepes received assistance from the United States counter-terrorism unit, Delta Force, through its links to Search Bloc. By the time of Escobars' capture and eventual death in December 1993, Los Pepes has been responsible for the deaths or executions of over 60 associates or members of the Medellín cartel. The death of Pablo Escobar lead to the dismantling of the Medellín Cartel and the rise of the Cali cartel.[16][19]

[edit] Law enforcement

[edit] Seizures

While the Cali Cartel operated with a degree of immunity early on, due to its ties to the government, and the Medellín Cartel's narco-terrorism war on the Colombian government, they were still subjected to drug seizures. In 1991 alone, law enforcement agencies seized 67 tons of cocaine, 75% originating from the Cali Cartel. In total, U.S. Immigration and Customs Enforcement (ICE) alone has spent 91,855 case hours and 13 years in investigations against the Cali Cartel, seizing 50 tons of cocaine and $15 million in assets.[20]

The involvement of ICE in the Cali Cartels trafficking came in 1991 when a shipment was intercepted with the aide of a drug sniffing dog. The cocaine was hidden inside concrete posts. The interception of the concrete posts at the Miami seaport lead to seizure of 12,000 kilograms of cocaine and several arrests, as well as the beginning of what the ICE would dub "Operation Cornerstone". A year later in another seizure, an ICE wiretap on Harold Ackerman, who's affiliation was derived from the '91 seizure, enabled the arrest of 7 individuals and 6,000 kilograms of cocaine hidden in a load of broccoli.[5] Accounting ledgers were seized in related arrests which allowed the identification of another shipment being sent to Panama hidden in tiles, this information was passed to Panamanian authorities and lead to the seizure of 5,100 kilograms.[20]

The following year in 1993, ICE struck again at the Cali cartel, this time seizing 5,600 kilograms while pursuing Raul Marti, the only member of the defunct Miami cell to remain. It is believed these successive raids forced the cartel to funnel its shipments through Mexico, however that did not stop the ICE. Three maritime ships were intercepted in '93 with a total of 17,000 kilograms. Operation Cornerstone lasted 14 years targeting the Cali cartels drug trafficking operations.[20]

[edit] Major arrests

Miguel Rodriguez-Orejuela being escorted by DEA and ICE agents.
Miguel Rodriguez-Orejuela being escorted by DEA and ICE agents.

Between June and July of 1995, six of the seven heads of the cartel were arrested.[9] Gilberto was arrested in his home, Henry Loaiza, Victor Patino and Phanor Arizabaleta surrendered to authorities, Jose Santa Cruz Londoño was captured in a restaurant and a month later Miguel Rodriguez was captured in a raid. It was largely believed the cartel continued to operate and run trafficking operations from within prison.[13][14][12]

The Rodríguez brothers would eventually be extradited to the United States, in 2006, and plead guilty in Miami, Florida to charges of conspiracy to import cocaine into the United States. Upon their confession they agreed to forfeit $2.1 billion in assets. The agreement however did not require them to cooperate in other investigations, they were solely responsible for identification of assets stemming from their cocaine trafficking. Colombian officials raided and seized the pharmacy chain Drogas la Rebajas, replacing 50 of the 4200 workers on grounds they were "serving the interests of the Cali Cartel."[13][21]

[edit] See also

[edit] References

  1. ^ DEA - Publications - Major Traffickers and Their Organizations. DEA (republished).
  2. ^ a b c d e Enid Mumford (1999). Dangerous Decisions: Problem Solving in Tomorrow's World. Springer, 81, 83, 84, 85. 
  3. ^ a b c d e f Felia Allum & Renate Siebert (2003). Organized Crime and the Challenge to Democracy. Routledge, 98, 99, 100, 103. 
  4. ^ a b c d e f g h Elaine Shannon Washington. "New Kings of Coke", Times Magazine, July 01, 1991. 
  5. ^ a b c d e f g h i Ron Chepesiuk (2003). The Bullet Or the Bribe: Taking Down Colombia's Cali Drug Cartel. Praeger Publishers, 23-26, 32, 64, 68, 118. 
  6. ^ a b c d Richard Peter Treadwell Davenport-Hines (2004). The Pursuit of Oblivion: a Global History of Narcotics. W. W. Norton & Company, 435. 
  7. ^ Nicholas Coghlan (2004). Saddest Country: On Assignment in Colombia. McGill-Queen's University Press, 132. 
  8. ^ James P. Gray (2001). Why Our Drug Laws Have Failed and What We Can Do About It: A Judicial Indictment of the War on Drugs. Temple University Press, 85. 
  9. ^ a b c Krzysztof Dydynski (2003). Lonely Planet: Colombia. Lonely Planet Publications, 18. 
  10. ^ Juan E. Méndez (1992). Political Murder and Reform in Colombia: The Violence Continues. Americas Watch Committee (U.S.), 76, 82, 83. 
  11. ^ a b c d John Moody, Pablo Rodriguez Orejuela & Tom Quinn. "A Day with the Chess Player", Time Magazine, July 1, 1991. 
  12. ^ a b Kevin Fedarko. "Outwitting Cali's Professor Moriarty", Time Magazine, July 17, 1995. 
  13. ^ a b c "Colombia takes charge of pharmacy chain linked to Cali cartel", USA Today, September 17, 2004. 
  14. ^ a b c Patrick L. Clawson & Rensselaer W. Lee (1998). The Andean Cocaine Industry. Palgrave Macmillan, 58-61. 
  15. ^ Manuel Castells (2000). End of Millennium. Blackwell Publishing, 204. 
  16. ^ a b c d e Kevin Jack Riley (1996). Snow Job?: The War Against International Cocaine Trafficking. Transaction Publishers, 170, 178, 181. 
  17. ^ Dominic Streatfeild (2002). Cocaine: An Unauthorized Biography. Thomas Dunne Books, 360. 
  18. ^ a b Elizabeth Gleick. "Kingpin Checkmate", Time Magazine, June 19, 1995. 
  19. ^ William Avilés (2006). Global Capitalism, Democracy, and Civil-Military Relations in Colombia. SUNY Press, 115. 
  20. ^ a b c "History of the ICE Investigation into Colombia's Cali Drug Cartel and the Rodriguez-Orejuela Brothers", United States Immigration and Customs Enforcement. 
  21. ^ "Transcript of Press Conference Announcing Guilty Pleas by Cali Cartel", United States Department of Justice, September 26, 2006.