The Fall of the Cali Cartel

Oct 5, 2009 - by Ron Chepesiuk - 0 Comments

October 21, 2006

Gilberto Rodriguez Orejuela

Gilberto Rodriguez Orejuela

The sentencing of Gilberto and Miguel Rodriguez Orejuela brought down the world's most successful drug cartel, but did little if anything to halt the flow of drugs to the United States.

by Ron Chepesiuk

U.S. justice was finally served on Sept. 26, 2006 in a Miami court when the godfathers of the Cali Cartel, Gilberto Rodriguez Orejuela, and his brother Miguel, pled guilty to drug trafficking and money laundering charges. The plea, which came after months of intense negotiations with several U.S. agencies, marked the end of the largest running and most important investigation in U.S. Drug Enforcement Agency history.

The 67-year-old Gilberto, known as the "Chess Player' for his brilliance, and the 62-year-old Miguel, "El Senor" for his no-nonsense style of criminal management, were the co-founders of Colombia's Cali Cartel, history's biggest and most powerful drug-trafficking organization and arguably its most significant organized crime syndicate. In the 1980s and early 1990s, the brothers made billions of dollars building the cartel into the world's top supplier of cocaine. Along the way, they destroyed thousands of lives in the United States and other countries around the world distributing their poison. In the process, the brothers revolutionized the way criminals did business, and in 1994, nearly turned Colombia into a narco-democracy by almost buying the presidency with an illegal $6.2 million donation to the campaign of presidential candidate Ernesto Samper, who was eventually elected.

It is no overstatement to say that Cali Cartel succeeded in the drug trade and organized crime like no other criminal group before or since. In the early 1990s, the cartel supplied more than 80 percent of the cocaine smuggled in the United States, and was raking in between $5 and $7 billion annually, according to the U.S. Drug Enforcement Administration.

Some of the recent big names in American organized crime – Nicky Scarfo and John Gotti, for example – seem almost like street punks when their criminal legacies are compared with that of the Rodriguez brothers.

Pablo Escobar, head of the Medellin Cartel, became internationally famous and synonymous with the Colombian drug trade, but law enforcement officials say it was the brothers Rodriguez who were the real kings of cocaine. "Pablo Escobar and other Medellin Cartel godfathers are called the Henry Fords of cocaine trafficking because they pioneered the transportation routes that got the product to the market," explained Lou Weiss, a DEA agent who investigated the Cali Cartel. "We need to go one step further with the Cali Cartel and call it the McDonald's of cocaine trafficking because its godfathers turned drug trafficking into a major corporate enterprise."

Named for the fair Colombian city of Cali (population 2 million), the Cali Cartel's success can be attributed largely to the cartel's style of operation and its innovative approach to how it pursued criminality. The Cali Cartel started in the early 1970s as small-time marijuana traffickers, but soon switched to trafficking the more profitable cocaine. As the cartel built its organization in the 1980s, the Rodriguez Orejuela brothers and their associates were willing to let their chief rival from Medellin, a city 200 hundred miles to the south, assume the high profile in the Colombian drug trade. Under the leadership of the notorious Pablo Escobar, the Medellin Cartel grabbed the headlines, became household names in Colombia, tried to become part of the political establishment and eventually went to war with the state, a vicious clash that spawned a new term in the political lexicon—"narco-terrorism."

Between mid-August and mid-December of 1989, Escobar and the Medellin Cartel killed 107 officials and civilians, carried out 205 bombings, and caused over $500 million in damages. In 1988 Escobar was responsible for placing a bomb aboard a Colombian airliner that exploded and killed 107 people. Sources revealed to the author in the researching of his book, Drug Lords: the Rise and Fall of the Cali Cartel, that the shocking incident happened because Escobar wanted to kill a girlfriend of Miguel Rodriguez Orejuela, who was aboard the plane, in revenge for a Cali Cartel bomb blast that partially deafened Escobar's daughter.

"The Colombian government hunted down and killed Pablo Escobar because he was a terrorist, not a drug trafficker," explained Mark Eiler, a DEA intelligence analyst and expert on Colombia. "If he had been smart enough to contain his psychopathic tendencies, he might still be alive today and doing well."

After the biggest manhunt in gangster history, Escobar was discovered to be hiding in an apartment in Medellin, Colombia, on Aug. 2, 1993. A shootout ensued and Escobar was gunned down trying to escape via the rooftop of the apartment. At the end, Escobar had just one bodyguard with him, who also went down in a hail of bullets.

The Cali Cartel, on the other hand, adopted a more business-like approach and went about building its criminal empire quietly, downplaying violence and terror as the principle means of achieving its objective. It's not that the Cali Cartel eschewed violence; it could be as vicious as the next group of gangsters when it needed to be.

Take, for instance, the Cali Cartel godfather Henry Loiaza, the so-called "Scorpion." Described as the cartel's "Minister of War," Loiaza was in reality a ruthless killer who once directed his underlings to use their chain saws to carve up 100 people suspected of being union sympathizers. A few days after Tiberio Jesus Hernandez, a local Catholic priest, complained of the atrocities, his decapitated body was found floating in the Cauca River.

Despite such blood-curdling incidents, the Cali Cartel preferred to offer the bribe, gather intelligence information on its enemies, and use the latest in telecommunications technology to coordinate its activities. The cartel's intelligence system rivaled those employed by many governments. The cartel was also a pioneer in the criminal world in its use of faxes, beepers, cell phones, pay phones, encryption, and computer information systems.

To give one example: On May 18, 1994, the Colombian authorities raided the offices of Jose Santacruz Londono, an associate of the Rodriguez brothers, and confiscated an IBM AS/400 computer worth a $1 million. To this date, the super computer is the most sophisticated piece of technology ever taken from drug traffickers. It took the DEA's computer experts several months to break into it.

What the DEA found was mind boggling: computer files containing information on thousands of bribes the cartel paid to Colombians from all sectors of society, as well as Colombia's entire motor vehicle records. "If you were a Colombian and wanted a U.S. visa, you might call the U.S. Embassy in Bogota once or perhaps twice for information," explained Steve Casto, a DEA intelligence agent who did analysis on the cartel's super computer. "But what if you were an informant and calling once or twice a month? The Cali Cartel would find this pattern by analyzing the telephone records. Then the cartel would wiretap the calls that person was making to the U.S. Embassy."

And so at the height of its power in the early 1990s, the Cali Cartel was running its criminal empire more on the model of a multinational corporation than a criminal enterprise. It treated its members like company employees, hired the best person for the job, used business strategy to market its illegal product, and shifted operations from one locale to another as economic and political conditions necessitated.

The godfathers from the Cali Cartel did not kill leading citizens of the state as the Medellin Cartel did nor engage in narco-terrorism. So for nearly two decades, the Colombian government and its U.S. ally focused on Escobar and the Medellin Cartel, a strategy that allowed the Cali Cartel the space to grow its criminal enterprise. Consequently, the cartel was able to dominate the cocaine market by the early 1990s.

The Cali Cartel's low-key style helped it build extensive distribution networks right under the noses of international law enforcement, giving the cartel an initial advantage against its adversary. Even when law enforcement discovered the cartel's existence in the mid-1980s and what it was doing within their communities, it was extremely difficult for the authorities to penetrate and disrupt it. The cartel operated with the compartmentalization of a terrorist organization, while its associates were willing to go to jail, fearing what could happen to them and their families if they informed. Besides, they knew that the cartel would take care of their families while they were in jail.

By the early 1990s, the Cali Cartel had become a crime multinational too huge to ignore. After Escobar was killed in 1993, the Cali Cartel became drug enforcement's No. 1 target. By now it had a global reach and thousands of employees and was involved in every aspect of the drug trade. It had forged alliances with Italian, Russian, Mexican, British, Japanese and other drug traffickers, helping to spawn the emergence of transnational crime as a major threat to the global community.

The downfall of the Cali Cartel was in many ways a creation of its own success. Like any well-run multi-national corporation, the cartel kept meticulous records of its business activities, including personnel matters. New employees were required to fill out application forms. Employees got holidays and were paid bonuses. This paper trail would assist law enforcement in tracking the cartel's operations.

Authorities began to discern the smuggling routes and began making arrests in Colombia, the United States, Latin America, and Europe. With the arrests, the cartel's cell structure began to break down, and some of those arrested – despite their well-placed fear – began to become informants.

As law enforcement successfully investigated the cartel's operations, the cartel found it increasingly difficult to hire the talent it needed to fill the ranks of its depleted managerial pool.

It didn't help the cartel either that the wrong "CEO" was running affairs at the most critical juncture in its development. Miguel Rodriguez, who took over the cartel's day-to-day management about 1990, was a micro-manager who couldn't seem to let go of business matters or know how to delegate responsibility.

Micro-managing affairs in the United States and Europe from headquarters in Cali could work early in its history when the cartel was small and law enforcement had little inkling about its activities, but not when it became the size of an IBM or General Motors. In fact, Miguel's micro-managing style became a liability. Imagine the CEO of an IBM or a General Motors, based in New York City, directly trying to oversee business operations in its chief market, Colombia. Sooner or later, communication is bound to break down.

By 1995, the Colombian government assigned 500 soldiers and police to a unit known as Search Block, with the sole responsibility of tracking and taking down the Rodriguez brothers and their key subordinates. The government also announced a reward of $1.6 million for information leading to the capture of Gilberto and Miguel.

Finally, Gilberto was captured on June 9, 1995. He was found hiding in an upscale apartment in Cali. As the authorities made the arrest, the terrified Gilberto exclaimed: "Don't shoot. I'm a man of peace."

Miguel proved to be more elusive, even after Jorge Salcedo, the Cali cartel's chief of security, turned informant. The brothers suspected a mole and Salcedo was in great danger. Still, he provided the DEA with more information on Miguel's hiding place. On Aug. 15, 1995, the authorities nabbed Miguel before he could escape to a special hiding place behind a five-door file cabinet built into the apartment wall. Miguel was in his boxer shorts, barely awake. Salcedo was whisked out of Colombia to the United States, where he was given the $1.6 million reward and put in the Federal Witness Protection Program.

Gilberto was sentenced to 15 years in prison, while Miguel earned 24. Because Colombian law forbids extradition of any prisoners for crimes committed before Dec. 16, 1997, the brothers were safe from being sent to the United States.

Miguel and Gilberto could easily have been free in a matter of years. Under Colombian law, both would have been eligible to have his sentence reduced for good behavior. In fact, Gilberto was released only five years later, in November of 2002, but not for long. The Colombian government scurried to press new charges against him; less than four months later Gilberto was arrested for allegedly being involved with the trafficking of 330 pounds of cocaine to the United States from Costa Rica.

Being in prison did not stop the brothers from running their cartel. U.S. authorities began receiving information they were still trafficking cocaine. In one 1997 smuggling operation, U.S. Customs and FBI agents discovered a 2,400-pound cocaine shipment inside supposedly empty chlorine gas cylinders in the port of Houston. Miguel made the mistake of confiding in his personal secretary in prison that the load belonged to his brother Gilberto.

In 2003, Alvaro Uribe, after winning the Colombian presidency, vowed he would make good on a campaign pledge to begin extraditing drug traffickers to the United States. The brothers Rodriguez were finally extradited to the United States on Dec. 6, 2004 (Gilberto) and March 15, 2005 (Miguel).

On Sept. 27, 2006, Gilberto and Miguel Rodriguez Orejuela pled guilty to a federal charge of conspiracy to import cocaine to the United States. Each was sentenced to 30 years in prison. The brothers also agreed to forfeit a staggering $2.1 billion in drug trafficking assets, but many sources believed that amount is just a fraction of their total wealth. As part of their plea deal, the brothers spared their relatives in Colombia from prosecution on money laundering charges and obstruction of justice.

International law enforcement's investigation of the Cali Cartel provided a wise lesson for other international drug traffickers; namely, becoming too big and complex an organization will make a drug trafficking organization more vulnerable to a takedown. A radically different type of drug trafficking organization has evolved, especially in Colombia. In place of the huge drug trafficking organization that the Cali Cartel represented, with its thousands of employees, a global reach of a multinational corporation, large scale shipments of illegal drugs, and Fortune 500-like revenues of $5 to $7 billion annually, are the so-called cartelitos or baby cartels. The cartelitos try to operate as discretely as the Cali Cartel did, but do not rely on the sophisticated organizational structure and communications systems that the cartel employed.

"Today's cartelitos have learned from the past," explained Pedro M. Guzman, a DEA special agent who was based in Bogota, Colombia. "The Cali Cartel has relied on the cell phone to manage its day-to-day business activities. Today's criminals are using the Internet and other state-of-the-art technology and push to talk radios as their main means of communication. Colombian traffickers sell directly to the Mexicans so the U.S. won't be able to make extradition cases against them, no matter where the cocaine ends up. They like to have face to face meetings, which obviously alleviates the need for micro managing and the constant need to monitor cell phones in the U.S."

As the Cali Cartel godfathers begin to spend the rest of their lives in a U.S. prison, one thing remains certain: The international drug trade is thriving. For the criminal entrepreneurs who smuggle its illicit products, it continues to be business as usual, just in a different operational structure. Today cocaine is just one of many drugs, along with meth, heroin, ecstasy, and marijuana, that is trafficked by organized crime. During the past two decades there has been no significant change in the price of a kilo of cocaine, indicating that supplies are both plentiful and stable


 

Ron Chepesiuk, a South Carolina-based freelance journalist is author of Drug Lords: The Rise and Fall of the Cali Cartel. (See www.ronchepesiuk.com). In January 2007, Barricade Books will publish his next book, Gangsters of Harlem: The Gritty Underworld of New York City's Most Famous Neighborhood. (See www.gangstersofharlem.com).

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