Cocaine Confidential (3 page)

The small growers at the start of the cocaine food chain – often indigenous people encouraged by shadowy South American criminals to expand their production in exchange for guns, machetes and clothing – rarely make much money. Pickers in the Amazon region might expect to receive £1 for a kilo of leaves.

A family unit processing the leaves is likely to make little more than £9 profit on each batch of 40 grams of cocaine paste, and assuming all goes well, can produce three batches a week.

Further up the scale are the carefully integrated operations in the eastern plains and jungles of Peru and Colombia, which can produce over 10 tons of cocaine a month. They can rely on a large labour force, a constant supply of chemicals, clandestine airstrips and enough weaponry to equip a small army.

Ever-higher mark-ups are introduced at every stage. A kilo of cocaine in Bogotá currently averages around $8,000 when sold in bulk. On delivery to the United States the price jumps
to about $30,000 a kilo. In other countries it is higher. If the approximate value of South America's cocaine export trade, before distribution, is $5 billion, the full commercial value (taking into account the fact that it will be ‘cut' – i.e. its purity reduced by being mixed with extraneous substances – often by more than 50 per cent by the time it hits the streets) is over $25 billion.

These days, cocaine shipments from South America to the US (despite steadily declining cocaine usage statistics, the most powerful nation on earth remains the world's leading consumer of the drug) are often transported through Mexico and Central America over land or by air via staging sites in northern Mexico. The cocaine is then broken down into smaller loads for smuggling in land vehicles across the US/Mexico border. Sixty-five per cent of cocaine enters the United States through Mexico, and the vast majority of the remainder enters via Florida.

The infamous Sinaloa and Zetas cartels, operating out of the north of Mexico, have something close to a stranglehold over the international cocaine trade as it passes through their territory. They exert ruthless control while at the same time outsourcing more routine tasks such as transportation, killings and vendettas to smaller local gangs, including the mafia-like families known as Maras. Their dominance, and the epic violence that has accompanied it, is believed to be another indirect result of America's attacks on Colombian traffickers and their Caribbean air and sea routes. In other
words, Mexico has been turned into the main hub for South American cocaine through no fault of its own.

Cocaine traffickers from Colombia and Mexico have now rebuilt and re-established an additional labyrinth of new smuggling routes throughout the Caribbean, the Bahamas island chain and South Florida. They often hire smugglers from Mexico or Central American countries to transport the drug. The traffickers use a variety of smuggling techniques to ensure cocaine gets to those lucrative US markets. These include airdrops in the Bahamas or off the coast of places like Puerto Rico, mid-ocean boat-to-boat transfers, and the commercial shipment of tons of cocaine through the port of Miami.

Bulk cargo ships are also often used to smuggle cocaine to staging sites in the western Caribbean/Gulf of Mexico area. These vessels are typically 150–250-foot coastal freighters, carrying an average cocaine load of approximately 2.5 tons. Commercial fishing vessels are also used for these smuggling operations. In other sea-lanes with a high volume of recreational traffic, smugglers use pleasure vessels, such as go-fast boats, identical to those used by the local population.

One recent development has been the use of sophisticated ‘narco-submarines' to bring cocaine north from Colombia and Peru. Originally, such vessels were viewed as a quirky sideshow in the drug war. But now they've become faster, more seaworthy, and capable of carrying bigger loads of drugs than earlier models, according to narcotics enforcement officers in South and Central America.

Across the Atlantic, increasingly large shipments of cocaine continue to surge through Europe and the former Soviet Union as it emerges as the drug of choice for tens of millions.

Today cocaine not only generates luxurious houses, expensive cars and large property portfolios for criminals, it also fuels the construction industry, financial groups and other businesses that provide perfect cover for money laundering, which in turn encourages economic power to buy political influence and threaten democratic institutions.

But who are these shady underworld characters inhabiting the world of
Cocaine Confidential
?

Read on and you will find out …

 

Cocaine's traditional connections to South America have been well documented, but my research for this book has uncovered an area of Central America that has been secretly developed by Latin American gangsters who are plotting for it to eventually become a major producer of cocaine.

Central America is already the world's latest cocaine transit hot-spot: up to 90 per cent of the South American coke bound for the US now passes through the region, predominantly the ‘northern triangle' of Guatemala, Honduras and El Salvador, before ending up in Mexico. These small, weak republics, many struggling with rocketing murder rates, endemic corruption and the baleful legacy of years of civil war, have been further destabilised as the powerful Mexican cartels have moved into vast amounts of territory over which their respective governments are too feeble and impoverished to exert any kind of meaningful control. In other words, they can't even afford the police forces needed to catch the narcos. The consequences of this power vacuum are chilling. These countries of the northern triangle have suffered 33,000 homicides since 2010, the vast number of which have been perpetrated by the cocaine cartels and the
maras
 – the vicious family groups who control so much of the movement of cocaine in the region.

But further south, in the Central American nation of Panama there is a quietly booming cocaine trade thriving thanks to huge shipments coming through the country en route for the US and Europe plus a discreetly nurtured cocaine ‘production line', which has been allowed to expand without any apparent interference from authorities.

Panama City's Casco Viejo – ‘Old Compound' – embodies many of the contradictions that make visiting this settlement such a sensory overload. During the daytime the incredible noise made by the legions of construction vehicles that seem to swarm everywhere is an inescapable reminder of Panama's burgeoning economy. After dark these shiny, destructive machines disappear. In their stead emerges a spectral city formed of shadows, crumbling colonial buildings, gaudy nightclubs and cobbled streets. It's as if the Vienna of Orson Welles'
Third Man
had been transported to the tropics.

And it's here down a darkened alleyway in a damp-smelling dive bar called
Corumba
that I am talking to Steve Francis, a failed British rock guitarist turned cocaine baron, who a few hours earlier greeted me at the arrivals gate of Panama City's chaotic Tocumen international airport after I touched down on a flight from New York.

‘Anything goes here,' Steve warned me. ‘People will rip you off as soon as look at you. They like conning the gringos best of all. It's a challenge. Just watch yer back.'

The 61-year-old Londoner has served time in prison in Spain for smuggling coke but he's been in Panama for four years since authorities in Málaga, southern Spain, allowed him out of jail on bail on condition he left the country and never returned. With a price on his head after ripping off a couple of Russian coke barons on the Costa del Sol, Steve was happy to head west to seek out some old ‘friends' in Panama.

Despite the worldwide recession, the Panamanian economy has expanded by nearly 50 per cent since 2005. The omnipresent canal itself – which dominates the western edge of Panama City – is undergoing a $5.25 billion expansion that is expected to double its capacity and generate even more economic growth. Wealthy tourists and investors are pouring in from both the US and South American states like Venezuela and Colombia, and are buying second homes and retirement properties all over Panama.

But behind this apparent boom, Panama continues to struggle with crime and poverty. ‘The slums in this city are worse than anything you will see anywhere else in Central and South America,' explained Steve. ‘I had to pull out of a meeting only this morning because the area was swarming with cops after a shooting.'

In Panama City Steve introduced me to Ignacio, one-time-gang-member-turned-cocaine-fixer. Back in 2003, when he
was seventeen and the head of a street gang, he prowled the west side of Casco Viejo. There were three other gangs back then. They mostly sold drugs, though robberies and murders were common too. One day Ignacio says he was selling one man some marijuana when he was shot four times with a pistol.

‘Now I just fix up shipments of coca,' he said, showing me the scar of one bullet wound on his hand. ‘It's a lot safer than selling on the streets,
hombre
.'

Steve, Ignacio and I talked further as we drank beer in a secluded corner of a dark bar. ‘Panama's success is our success,' said Ignacio. Steve agrees: ‘He's right. This place is prime for cocaine shipments, production, you name it. Everyone thinks cocaine gangsters are part of Panama's past. But they are all here.'

Taking another sip of his drink, Steve went on: ‘When I got out of prison in Spain, they gave me my passport and said I must leave the country or they would lock me up again. I came straight here because I'd already heard about the opportunities.'

Later, we supped a few cocktails at an exclusive rooftop bar, surrounded by chain-smoking members of the city's fashionable elite. Ignacio explained more about his role as Panama City ‘cocaine fixer'. He said: ‘I line up the coca for people like my amigo here, Steve. A lot of guys come to me because they want to make some money turning the coke around quickly—'

Steve interrupted: ‘That's what I like about Ignacio. We
talk the same language. Always have done since the day we met, eh kiddo?'

Ignacio nodded and smiled. ‘Here in Panama City many people are struggling to find work, so it's no big surprise that cocaine provides a lot of us with employment.' Ignacio explained that ‘chunks' of massive shipments of cocaine that come through Panama en route for the US and Europe and beyond are often used to ‘pay off' police, customs and dock workers and that is where these ‘offcuts' of cocaine come from.

Panama's links to cocaine were first exposed to the world in the 1980s when the country's then dictator General Manuel Noriega opened up his country to secret cocaine supply routes after accepting millions of dollars in bribes from Colombian coke barons, who needed a safe passage to the US for their product.

Ignacio explained: ‘Noriega showed his people that it was fine to make money out of coke. He sort of rubber stamped it as a drug of choice here and a way to make a living.'

Now back in a Panamanian jail where he's expected to stay for the remainder of his life following a transfer back to his home country from France, General Noriega had been collaborating with America's CIA for many years before his arrest. However, when his connections to the Colombian coke cartels were revealed, the US mounted their controversial invasion of Panama in December 1989. Noriega was eventually sentenced to thirty years in a Miami court before being extradited to Paris to face similar charges there. Then
he was allowed back to Panama from France to serve out the remainder of his sentence.

A few years back, I met Noriega's daughter Sandra – who was recently named as a diplomat with the Panamanian consulate in Miami — in Miami Beach through a Hollywood movie contact. She was working as a script consultant to film director Oliver Stone, who was planning a movie on her father at the time. Sandra insisted then that her father had done nothing wrong, despite the fact he'd just been jailed by US authorities on drug-running charges.

Meanwhile it's claimed that Noriega has now been pushed into Panama's past. ‘Noriega got greedy and he paid the price,' said Ignacio.

‘Yeah,' agreed Steve. ‘The future's where it's at. This is the place where the cocaine industry is going to boom. Just mark my words on this.' Then he turned and pointed a finger at me. ‘I'm going to take you out into the
campo
[countryside] and show you something that'll blow your mind, my old son.'

While Colombia and Peru continue to produce the majority of the world's cocaine – around 80 per cent of the whole planet's supply – other smaller cocaine production lines are being set up all over South and Central America. In countries like Panama, ‘mom and pop' coke shops, or ‘kitchens', pepper the
campo
, churning out tons of the white stuff each year.

Down in the Amazonian basin around the border areas between Peru and Colombia, the cartels have developed a new strain of coca leaf that may well lead to cocaine production on a much larger scale right across South and Central America.

This new type of coca plant can be grown in dense, moist jungle areas rather than solely on the side of mountains like the original variety. In Panama, Steve tells me, the new strain of coca plant has led to the development of small cocaine production lines deep in the jungle. Unemployed locals are
secretly growing it, picking the leaves and then selling them off to cocaine gangsters, who then finance the setting up of factories or labs near to where the coca leaves are grown.

I agreed to accompany Steve to the Panamanian
campo
to see one of these cocaine ‘factories' for myself. We boarded a quick-hop two-prop plane at Panama City's small Albrook municipal airport to begin the short journey to the sleepy resort of Bocas del Toro, which means, in English, ‘Mouth of the Bull'.