Colombia’s Cocaine Boom Goes On Despite Crackdown, Kingpin’s Arrest

This nation’s resilient and expanding cocaine industry has absorbed the loss of a senior partner without missing a beat. Production is up and new markets are opening despite increasing public and governmental hostility.

Cocaine, most of it earmarked for an insatiable U.S. market, is Latin America’s most dynamic growth industry. With exports worth an estimated $3 billion, cocaine now rivals and probably exceeds coffee as Colombia’s most important earner of foreign exchange.

Cocaine and coca, its raw material, are also the major export crops of Peru and Bolivia.

In Colombia, government officials believe, about one-third of the shipping price is repatriated; the rest is laundered and banked abroad. Counting the income of offshore affiliates, the so-called Medellin cartel may be grossing $7 billion yearly in the United States alone, according to Colombian authorities.

Fabulous Wealth

Pablo Escobar, the chief executive of a family export business that is a cartel mainstay, may be worth $15 billion, according to a recent estimate of one cocaine analyst here. If the figure is even close, the 39-year-old Escobar, who began business life as a shoeshine boy and who was arrested as recently as 1970 for stealing cars, is the richest man in the world.

Like other executives in an industry known for its violence and uncertainty, Escobar is cautious. Whether traveling to business meetings or to discotheques in Medellin, the world’s cocaine capital, he rides in a seven-car caravan. Each car is equipped with four bodyguards armed with machine guns.

“It’s going to be a war to take one of these guys down,” said one foreign expert on the drug industry. “Even if (one were) captured, there’s not a jail in Colombia that could hold a key boss. The only credible threat is extradition to the United States.”

Drastic Price Drop

An industry that is closely held by 12 to 15 families publishes no statistics, but analysts cite falling prices as evidence of increased production--”more than ever,” as one analyst puts it.

Bulk buyers may now purchase cocaine in Bogota for as little as $1,700 per kilogram (2.2 pounds), less than half the price of a year ago. In Miami, the most common port of first entry to the United States, the wholesale price has dropped to around $18,000 per kilogram. In Los Angeles, the world’s largest retail cocaine market, prices have fallen from $35,000 per kilogram two years ago to $23,000 in one recent sale, the analysts say.

Amid the glut, the industry is troubled by a transportation bottleneck caused by a shortage of pilots. Some major exporters are now reportedly paying pilots as much as $5,000 per kilogram for flights to the United States.

Colombian exporters responsible for about 80% of the cocaine that reaches American streets are expanding international markets, as well as distribution systems within the United States, experts on the drug trade note.

Colombian cocaine salesmen have been arrested recently in new markets as distant as an Austrian city near the frontier with Czechoslovakia and in Australia, where cocaine arrives via Los Angeles.

Arrests Worldwide

Recent visitors to Bogota have included concerned police officials from Britain, France, West Germany, the Netherlands and Australia. In most European countries, Colombians head the list of foreign nationals arrested annually.

A Danish policeman represents the Scandinavian countries in Colombia; Canadian authorities are worried by cartel inroads; Spain has become an important European distribution center, and in Italy, cartel affiliates are feuding with the local Mafia for retail market share.

Colombian officials are cooperating with Hungarian police in the so-far fruitless search for a cartel assassin who gravely wounded a former Colombian justice minister last winter on the steps of the Colombian Embassy in Budapest.

In the United States, where the use of cocaine continues to grow, all-in-the-family Colombian sales networks are steadily expanding beyond points of entry to second-line markets such as St. Louis and Kansas City, Mo., which had been served by local wholesalers, experts here say.

Still, the industry, which has grown dramatically in Colombia over the last five years despite government opposition and a $70-million U.S. counterattack, was shocked in February by the arrest and lightning extradition of one of its founding pillars.

Billionaire Carlos Lehder, who labored to convert cocaine wealth into right-wing political clout, was accidentally captured along with 14 men and boys at a country home outside Medellin. Lehder, 37, who once described cocaine as an “atom bomb” aimed at American “imperialism,” is awaiting trial in the United States for conspiring to smuggle more than three tons of cocaine. A U.S. attorney told a court in Jacksonville, Fla., last Tuesday that Lehder had offered to cooperate with federal officials in a letter he had written to Vice President George Bush, who heads an anti-drug task force.

Officer Refuses Bribe

The police major who arrested Lehder was hustled into seclusion with his family by U.S. and Colombian authorities in an effort to protect him. The major had refused a bribe to free Lehder, and by the time he got to Medellin with his prisoner, his family had already received three telephoned death threats, officials say.

Thus far there have been no reprisals for the Lehder arrest from an industry known for its zealous eye-for-an-eye ethic: Last year, a Supreme Court justice, a leading publisher, an editor and a former police anti-narcotics commander were among the Colombians murdered for their anti-cocaine actions or attitudes.

The current uncommon silence fuels what is either informed speculation or disinformation from industry analysts that Lehder had fallen out with other cartel leaders.

Lehder, an exceptional pilot who once asserted that he had bought more planes than anyone in Latin American history, was the keystone of the industry’s sophisticated transportation network. His absence may be responsible for the current pilot shortage, although analysts believe that his organization has resumed operations after a period of stress and uncertainty.

With the Colombian justice system cowed by cocaine might and no extradition agreements currently in effect for other cartel principals, industry growth prospects seem good, given mushrooming international demand. Business techniques and image consciousness should improve as the children of industry leaders return to family enterprises from studies at major universities abroad.

The longer-range future, though, is clouded by improved police work in both the United States and Colombia. Climaxing their biggest undercover investigation, U.S. agents arrested 64 people in Miami, Los Angeles and New York on Wednesday, seizing more than 850 kilograms of cocaine and $49.7 million in cash and property.

In Colombia, there is growing popular revulsion against an industry that has made it shameful for 28 million people to travel on their national passport. One recent morning, departing passengers for a flight to Miami were unceremoniously disembarked from a jet belonging to the Colombian national airline. Three hours later, a small army of mechanics turned up 3 1/2 kilograms of cocaine hidden inside a door panel.

Press Campaigns Against Drugs

Despite violence and threats, the Colombian press is uncompromising in its opposition to the industry, and the government of President Virgilio Barco is determinedly imposing new obstacles to growth.

Amid calls for greater judicial action that triggered creation of special tribunals to try criminal cases causing “social commotion,” the Barco government has also upgraded and expanded anti-narcotics enforcement by the Colombian national police.

A general, one of 14 in the 74,000-man force, has been named to head a blue ribbon anti-drug unit. He is being assigned sharply increased manpower and state-of-the-art equipment, including helicopter gunships, to counter the industry’s light anti-aircraft weapons.

Believing that public opinion is on his side--”a few are dirtying the image of the whole country”--the new commander, Gen. Miguel Antonio Gomez Padilla, 49, is setting a vigorous personal example, leading raids on clandestine airstrips and processing laboratories. Arrests are up, and so are seizures of the chemicals necessary to transform coca paste into the finished commercial product.

“The struggle is difficult, but not impossible. We are making gains,” Gomez Padilla said in an interview.

Colombia’s cocaine executives have heard it all before. Although pressures are mounting, the industry’s ultimate guarantee is voracious American demand, which has transformed pistoleros into plutocrats and made their country an international pariah.