ADVENTURES in the DRUG TRADE : How 4,000 Colombians Took the ‘Champagne Drug’ to the Inner City and Turned L.A. Into a Cocaine Capital

THE FORMER OUTLAW drug prince, in T-shirt, jeans and a hippie ponytail, sits in his small house near Marina del Rey, recounting his career. In the space of a decade, he has seen firsthand an upheaval in the cocaine scene in Los Angeles. Marty, one of the names he uses, was one of the most active Westside coke dealers in the late 1970s. His customers included some of the most famous actors and rock stars in Los Angeles. He cruised the city in rented limousines, dined at the most expensive restaurants, bought a few small businesses and condos and basked in the status then attached by many to anyone with a constant supply of coke.

Despite his hair style, Marty was never a flower child. He had a cynical view of the world around him, and he saw himself as a local Al Capone. In the days when many L.A. drug dealers went unarmed, he had his own AK-47 automatic rifle and a small arsenal of other guns. But they were mainly for show. Marty was one of the early breed who wanted to look tough but hesitated when it came to violence. By the 1980s, there was real violence all around. The drug world in Los Angeles became a bigger, uglier and more vicious business than a generation of hometown dealers such as Marty ever anticipated.

“The glamour’s gone,” he says morosely. “Most of the guys I grew up with are out of the business now, trying to make it in the real world. What happened was that most of the middle class got scared off coke, and a lot of white dealers went broke. When the Colombians and the Mexicans and the blacks moved in, everything changed. It’s not a rich man’s sport anymore. It’s a poor man’s drug. It used to be a big status thing, but any bum can get it now.”

Marty, who distributed as much as 50 pounds of cocaine a month during his most active years as a dealer, is in semi-retirement now; he stopped his serious dealing two years ago, he says. He still dabbles in cocaine, but mostly to cut the cost of his own use. His fall from the highest rungs of the L.A. drug hierarchy--along with the demise of many other white coke dealers--came as the public’s view of cocaine was dramatically changing. The “champagne drug” of the rich in the 1970s has become the plague of the 1980s.

Nowhere has the change hit harder or more devastatingly than in Los Angeles, which now rivals Miami as the nation’s coke capital. Cocaine has taken to the streets with a vengeance and become an urban nightmare. Heavily armed street gangs make the headlines day after day with their violence. Each week, there is a new drug bust that seems to be the biggest in history. The jails are full of cocaine users and dealers. And federal drug officials say the city’s banks are stuffed with billions of dollars in illegal profits being laundered back to South America by Colombian mobsters.

The cocaine scene in Los Angeles was transformed by twin revolutions exploding across racial, cultural and economic borders.

First came the invasion of Southern California by Colombian drug dealers who formerly limited their U.S. cocaine sales to the Miami area. Driven from Florida by tough federal law enforcement and good business sense, the Colombians saw Los Angeles as a prize target for expansion. Smuggling drugs into Miami and then to the rest of the United States had become increasingly difficult. Although thousands of miles farther from Colombia, Los Angeles was reachable by land routes long used by Mexican drug smugglers. The Colombians and Mexico’s drug families forged a partnership, and the Colombian drug cartels began sending ever-larger shipments of cocaine into California. With the drugs came first hundreds, then thousands of Colombian mobsters.

Their arrival in force sounded the death knell for the hometown L.A. coke dealers who had monopolized the relatively small cocaine trade during the ‘70s. No longer was a big-time dealer the flashy local boy with Miami connections who could bring 20 or 40 pounds of cocaine from Florida to Los Angeles. Now it was the unobtrusive Colombian newcomer who just rented the house next door, with 500 pounds to 1,000 pounds of the drug stacked up like cordwood in the garage.

With that simple change at the dealer level came an even more dramatic shift in the user population. Lured to cocaine in the middle 1970s partly by the assurances of experts that the drug was non-addictive, with an abuse potential “no greater than that of aspirin,” according to one Harvard expert, a large segment of the white middle class spent a few years of disastrous experimentation with the drug before discovering that the “experts” had no idea what they were talking about. By the end of this period, tens of thousands of white cocaine users in deep trouble were lined up for admission to hospitals and drug-treatment programs, confronted by the grim knowledge that their drug adventures had turned into horror stories. Although many police officials believe that there is just as much white coke use as ever, most agree that it has not dramatically increased in recent years and that the typical white user has “gone underground.”

Just as the white-user population was beginning to peak, however, the rich man’s drug found its way to the ghetto and the city’s black gangs. With the spread of crack cocaine in the inner city, a new and poorer user population was created virtually overnight in the black community. Crack, a smokable, diluted form of cocaine also called rock cocaine, was a cheap high, just as addictive to those using it as cocaine itself but much more readily available from street- corner dealers selling it for as little as $10 a rock. While the battered white users went into hiding, the city’s black gangs took cocaine to the streets.

Cocaine has become “the fast food of the drug trade,” says Ronald K. Siegel, a UCLA psychopharmacologist and an authority on cocaine. “It’s obviously wreaking havoc on the streets. What’s happened, essentially, is that cocaine has become the kind of drug that the yellow journalism of the 1920s and 1930s told us it was.”

The Way It Was

IT WAS A GREAT ADVENTURE in the beginning, and Marty still recalls his first trip to Miami in 1976 and the secret meetings there with his Cuban and Colombian contacts. In those days, the cocaine trade in Los Angeles was dominated by white dealers bold enough to risk traveling to Miami or even Colombia and carrying back a few kilos at a time. (A kilo is 2.2 pounds.) In an era when the seizure of a few ounces of cocaine was a major event for law enforcement, a kilo dealer qualified as a big-time operator. Marty saw himself in that light.

Marty, a graduate of Santa Monica High School now in his late 30s, had a special talent for his work. He had a flair for chemistry and was a natural at testing cocaine and picking the purest product. That made him especially valuable to the relatively small local drug ring that financed his initial purchases.

Marty’s peak year as a drug dealer was 1978, he recalls, when the white middle class was experimenting in large numbers with cocaine. The total cocaine seizures by the Los Angeles Police Department barely topped 100 pounds--compared with 11,000 pounds in 1988--and a multi-kilo dealer such as Marty automatically qualified as one of the biggest coke dealers in Los Angeles.

“The first run to Miami was for a kilo, and we were tooting coke all the way back to L.A. in the first-class section of the plane,” Marty recalls, smiling at the memory. “It was wide open. We might as well have been wearing ‘Coke Dealer’ signs around our necks. In those days, it was anywhere up to $55,000 a kilo. You’d carry the money with you to Miami and bring back 2 to 8 kilos on the plane. It was always dangerous, but it was a kick at first. Then it was a living. Then it was just a job that got more and more boring as the years went by.”

Marty and a dozen other white dealers once had a virtual monopoly on cocaine distribution in West Los Angeles. But law enforcement was increasing its efforts, and many of Marty’s most important connections ended up in prison. Not only did that affect his business, it also made him think about finding another way of making a living. About the same time, the Colombians began moving a sizable part of their operations to California.

Suddenly, there were hundreds of newcomers in town with access to literally tons of the drug. The days of the white outlaw drug dealer were rapidly ending. Marty had other reasons to quit, including his own costly cocaine addiction. Even if he could have survived as a major dealer, he had burned himself out in one decade of life in the fast lane. For him, the romance was over.

“They give it away now,” says Marty, who now works in the construction business. “Now it’s nothing for somebody to have 30 or 40 kilos in the trunk of the car, and those are the errand boys.

“On top of that, the whole scene has changed,” he adds. “Now there are black dealers moving hundreds of pounds a month, and there’s the whole crack scene in South-Central. And anybody doing it gets pegged as an addict. There are a few whites at the 60-to-80-pound level (per month), but most of the whites I know either went broke dealing or became low-level users.”

Says one L.A. police officer: “The whites are out of the market because of the viciousness of the Colombians and the blacks who have moved into the big time. The white guys just aren’t up to the final solution, which is murder.”

The Colombians Arrive

THE MAN IN THE $5,000 suit at the bar at the Sheraton Grande Hotel in Los Angeles in 1985 was one of the new breed of high-rolling Colombian mobsters who hastened the demise of early L.A. coke dealers. Just as Marty typified the major drug dealers of the 1970s, Hugo Obando Ochoa was the prototypical coke dealer of the 1980s. Obando, a former guerrilla fighter in Colombia, had slipped across the U.S. border on this visit to Los Angeles to negotiate a multimillion-dollar business deal. This millionaire drug dealer from Medellin, Colombia, who was given to bragging about his Rodeo Drive wardrobe, was waiting at the bar with a man named Joe Lopez, whom he had met through friends in Miami.

Obando felt comfortable enough with Lopez to ask him if he could do him a favor by killing three Cuban drug dealers in Miami who had stolen 700 pounds of cocaine from him, and Lopez had promised to look into it. The friendship was developing, and the two men had progressed to talks about shipping tons of cocaine into Los Angeles and laundering millions of dollars in drug profits back to Colombia.

What Obando didn’t know was that Lopez was an undercover agent of the U.S. Drug Enforcement Administration. Obando was a major target in a two-year investigation called Operation Pisces, destined to become the single most successful undercover drug case in U.S. history. By the time the case ended in 1987, the DEA had seized $49 million in cash and assets--$28 million in Southern California alone--and the L.A. Police Department, working in close partnership with the DEA, had confiscated more than 11,000 pounds of cocaine. Although it received relatively little attention, the undercover operation offered the first close look at Colombian drug operations in Los Angeles. Almost every major cocaine seizure in the city during that time was a part of Pisces. In Los Angeles, there were 220 arrests and more than 190 felony convictions of Colombian drug dealers. About $55 million in laundered cash headed for Colombia was seized, $40 million of that in Los Angeles.

Before Operation Pisces, nobody in law enforcement had an accurate measure of the full scope of Colombian drug dealing in Southern California. The investigation revealed that the Colombians were in control of the local cocaine market, in many cases all the way down to the kilo level. As a result of Pisces, DEA officials could estimate with reasonable accuracy that there were about 4,000 Colombians in the L.A. area actively involved in dealing cocaine and laundering the profits back to Colombia. Hundreds of Colombian drug “cells,” small units of Colombian dealers and money-launderers operating independently along the lines of classic espionage rings, were controlled by the cartel in Medellin. The investigation culminated in the arrest and conviction of a top Colombian money launderer named Jesus Anibal Zapata, now serving a 30-year federal prison term. Federal officials said Zapata, a quiet accountant who regularly slipped across the U.S. border from Mexico dressed as a Mexican farm worker, was one of the top 20 or 30 members of the Medellin cartel, as was Obando. Together the two men were in charge of laundering $17 million a week in drug profits from Los Angeles to banks in Miami and Panama.

According to information gleaned largely from Pisces, the Colombian drug network in the Los Angeles area operates in many ways like any legitimate international conglomerate. At the top rungs of the management structure are a dozen or so cartel leaders, headed by Pablo Escobar Gaviria, a former Colombian politician who helped revolutionize the cocaine market in the early 1970s by uniting Colombia’s warring drug factions along big business lines. Immediately below the top cartel leadership is another group of 20 to 30 lieutenants with operational responsibility for moving drugs into the United States and funneling profits back to Colombia. The DEA estimates that there are as many as several hundred stash houses in Los Angeles County alone, operated by Colombian nationals on two-year “tours of duty,” who are assigned to find the most nondescript locations possible.

“Typically it’s one male or a young woman who rents a house in a family area,” says Assistant U.S. Atty. Russell Hayman, who prosecuted the Pisces cases. “Ideally, they want a house on a cul-de-sac (to make surveillance difficult), with an automatic garage door so they can move in and out as fast as possible. They’ll get 1,000 kilos delivered there, then move it out in 50-to-100-kilo lots in a week or so. Then the house is vacant for a couple of months until all the dope is sold and the money is laundered back to Colombia.

“Then the next shipment comes in. Most of the coke is committed for before it ever arrives here, and it’s almost always fronted (sold on commission with no money exchanged up front). Colombians take most of the 100-kilo assignments and the large amounts, then deal it in smaller units to blacks and whites. But, more and more, the Colombians and Mexicans are moving in at the lower levels, too. There are Colombians dealing kilos and even ounces now.”

In addition to the drug-dealing activities, there are separate money-laundering organizations whose members, at the simplest level, traipse from bank to bank, depositing amounts less than $10,000 at as many as 20 banks a day to escape federal currency transaction regulations that require the filing of Treasury Department reports on transactions of more than $10,000. Federal officials estimate that several billion dollars a year is being laundered from Los Angeles through Panama and other countries and back to Colombia.

Remarkably, the arrival of the Colombians in Los Angeles has not triggered the sort of violence that marked the battles in Miami during the 1970s, when rival Colombian factions machine-gunned each other in the streets and attracted national notoriety. The prevailing theory is that the Colombians learned the same lesson that the Mafia learned decades earlier: Too much violence is bad for business.

“The Colombians are like General Motors now,” says the DEA’s Los Angeles spokesman, Ralph Lockridge. “They don’t have to go around killing people anymore. Their reputation is already secure.”

Operation Pisces was an intelligence coup revealing information about Colombian operations that is difficult to obtain because the organizations are so tightly controlled. “Whenever we take down somebody in a stash house, we get almost nothing,” says one federal drug agent. “They are told when they come up here that if they talk, their families will be killed first, and then they will be killed. They just don’t roll on their superiors. In most cases, anyway.”

Although Pisces was obviously a costly blow to the Medellin cartel, letting Obando get away was a major disappointment to federal officials. In his earlier days, Obando had been a so-called M-19 guerrilla, one of the anti-government terrorists devoted to killing Colombian politicians. Like many of the M-19s, Obando soon found himself an ally of Colombia’s top cocaine dealers, quickly rising as one of Escobar’s chief lieutenants. Obando was best known in drug-dealing circles for his solution to an unexpected wage dispute with an American drug smuggler on a Colombian airstrip. When the pilot demanded more money, Obando reportedly pulled a pistol, shot him in the leg and ordered him to take off immediately if he wanted to stay alive.

A lifetime in the jungles of Colombia and the streets of Medellin had made Obando as cautious as he was ruthless. By the end of Operation Pisces, he had grown suspicious of Lopez and the other DEA agents who were slowly brought into the operation. And when the DEA stalled about paying him $400,000 for 25 kilos of coke, he skipped a planned meeting and disappeared.

During Operation Pisces, the DEA had laundered almost $55 million for the Medellin cartel through banks in Panama, a move defended by law-enforcement officials as necessary in gaining “credibility.” Despite the huge drug profits that the United States helped channel to Colombia, it remains unknown whether the operation had any long-term effect on Escobar’s cartel, still the major supplier of cocaine to Los Angeles.

“His operations were disrupted, and he lost a lot of product and top lieutenants. The seizures were unprecedented,” Assistant U.S. Atty. Hayman says. “But you have to remember we’re dealing with a man whose personal wealth is now estimated at somewhere between $3 billion and $15 billion. He is probably the wealthiest man in the world. We obviously hurt him, but how much is anybody’s guess.”

The New Black Dealers

COINCIDING WITH the mass arrival of Colombian drug dealers in the Los Angeles area in the past few years was a virtual revolution in the nationwide marketing of cocaine by black drug dealers initially operating in South-Central Los Angeles. Although freebase cocaine, at first obtained by a highly volatile chemical conversion process using ether, was briefly popular among some white users, it never became widespread. In the black community, however, a much simpler conversion process that used common baking soda resulted in the creation of the smokable freebase form of cocaine known as crack.

A new generation of cocaine users--those who could not afford $100 for a gram of cocaine hydrochloride powder but who could scrape up $20 or less for a rock of crack--was created almost overnight. Although many white users turned to crack, it became most popular among inner-city blacks. In the impoverished neighborhoods of South-Central Los Angeles, cocaine offered a sudden, new opportunity for instant wealth, an opportunity embraced by the city’s rival gangs. The gangs’ involvement and their turf battles over the drug trade set the stage for the rise of a new class of prison-toughened black coke dealers, already accustomed to violence and much quicker to resort to deadly force than their white predecessors. Knowledgeable about the ghetto, they had the connections necessary to do business with the city’s gangs and the sophistication to move outside the inner city to set up new black drug networks that quickly stretched from Los Angeles to black areas across the nation.

Before the 1980s, Thomas E. (Tootie) Reese had been viewed by law-enforcement officials for almost two decades as the top black drug dealer in Los Angeles. But the amounts of cocaine he allegedly dealt were infinitesimal contrasted with the tonnage now sold monthly by his successors in the black community. One white drug dealer remembers Reese’s pulling a shotgun on him in the 1970s to ensure that he could purchase a pound of cocaine. Later, Reese was sentenced to 35 years in prison for selling just 2 pounds of cocaine to a DEA agent.

In contrast, federal and local drug officials estimate that crack dealing in South-Central alone is now a $5-million-a-week business, and there are more than a dozen black drug dealers in the city distributing 200 kilos to 300 kilos of Colombian cocaine a month. The key to their dramatic ascendancy was the establishment of direct links with Colombians. One theory of some narcotics agents is that the blacks and Colombians connected in the nation’s prison system. Others take the view, however, that Colombians actively sought out black dealers during the past three years, trying to cash in on the growing demand for crack cocaine in the black community. In either event, according to law-enforcement officials, the ties are solid.

Increasingly, the major drug cases in both the state and federal courts in Los Angeles involve black dealers charged with the sale of millions of dollars’ worth of cocaine. One recent case that most clearly shows the Colombian connection involved the November arrest of a former South-Central street thug named Brian (Waterhead Bo) Bennett.

Police say Bennett, just 24, had risen from inner-city poverty to millionaire status in just two years after meeting a Colombian drug dealer named Mario Ernesto Villabona Alvarado, a member of Colombia’s Cali cartel, the chief rival to Escobar’s group. It’s not known whether Bennett was recruited or if he met Villabona by chance. But drug officials allege that the two organized a drug ring based in Los Angeles that distributed more than a ton of crack a week from Los Angeles to Detroit. Says Deputy Los Angeles Police Chief Glenn Levant, who supervises all narcotics investigations for the LAPD: “This is the single most important partnership ever established between a major South-Central drug dealer and the Colombians. Bennett was supplying thousands of rock houses all over the country, and his connection was straight out of Colombia.” Bennett, whose trial is scheduled for September, is pleading not guilty.

By the time of Bennett’s arrest, he had moved from Los Angeles to Arizona, where he was living in a $1-million house. Increasingly, that has been the pattern of the most successful black drug dealers who started on the streets of South-Central. While deriving their income from the inner city, the black dealers prefer to live in mansions in the suburbs. In their place, they leave gang members as young as 13 to man their rock houses and to be the small-time street dealers who now are among the city’s most troublesome problems. “It’s not the big-time drug dealer who’s most likely to shoot you,” says DEA spokesman Lockridge. “It’s the small-time guy who doesn’t know any better. The black street dealers are scary because they are unpredictable. A lot of those people have very little to live for.”

The Way it Will Be

ANY LOCAL LAW-enforcement officials are convinced that Los Angeles has become the new Miami, the emerging center of the nation’s drug industry. There is some evidence to support that view, including the fact that a kilogram of cocaine now sells locally for about $14,000, about $2,000 less than in Miami--one indication that there is more cocaine on the market here. Last year, for the first time in history, federal and local drug agents seized more cash from drug dealers in Los Angeles--more than $100 million--than anywhere else in the country. Cash reserves at the Federal Reserve Bank in Los Angeles now top $3.8 billion, up from $165 million just four years ago and just $1 billion less than in Miami, indicating to federal drug officials the massive money-laundering activity here.

“There’s no other explanation for that much of an increase in cash reserves,” says U.S. Atty. Robert C. Bonner. “The Colombians are now laundering staggering amounts of cash out of Los Angeles. A very conservative estimate is several billion dollars a year. Two years ago, the figure was closer to $1 billion.”

The fact remains that actual seizures of cocaine in South Florida are still double the total in Southern California, where about 30,000 pounds was confiscated in 1988. The result is a somewhat academic debate over which city is really the worst. To DEA officials in Washington, D.C.--who have assigned 190 drug agents to Miami, in contrast with 125 to the Los Angeles region--Miami remains the center of Colombian activities. “Miami is still ahead,” says DEA Washington spokesman Joe Keefe. “It is the main center for coke in this country.”

Bonner, who has spent the past six years watching more than 1,500 major drug dealers file from the U.S. Courthouse in Los Angeles into prisons throughout the country, is one of the many local officials who dispute that assessment. “I think the amount of coke coming here now is significantly higher than the DEA estimates,” he says. “We have become a cocaine warehouse for much of the country, with shipments going out regularly to Detroit and Chicago and New York. We’ve even intercepted one shipment going into Florida. All this suggests to me that over 50% is now coming into L.A.

“In time, that will become even clearer,” Bonner says. “It just makes sense for the Colombians to shift more of their operations here. It’s easier to get coke across the Mexican border than through the Florida sea lanes, where there are natural choke points that make interdiction easier.”

For the time being, Colombia’s drug cartels have confined their violence to Colombia, where dozens of judges and political leaders have been killed and where the families of cartel members are frequently held as hostages while their relatives perform cartel work in the United States. Threats by some Colombian drug kingpins, however, have many U.S. officials worried that the violence in Colombia may ultimately be exported to the United States. In recent months, federal officials have received information that Colombia’s drug lords are considering striking back against U.S. authorities for their stepped-up law-enforcement activities. The U.S. Marshal’s Service is guarding at least two local federal prosecutors now involved with Colombian drug cases.

Although the cocaine problem has grown dramatically, the proposed solutions are the same as they’ve been for most of the decade. Crack down harder. Legalize everything. Emphasize long-range educational programs such as the Los Angeles Police Department’s DARE program in the schools. Invade Colombia. Seal off the Mexican border. Meanwhile, an estimated 300,000 pounds of cocaine found its way to Los Angeles in 1988, and law-enforcement officials agree that there is no decline in sight.

Still, Bonner says, “I guess my general sense is that in many ways we have begun to turn the corner on the drug problem . . . that coke usage has peaked. The problem is that the peak is very, very high.”

But UCLA’s Siegel has darker view. “I know the anti-drug advertisements today promote the idea that cocaine will fry your brain,” he says. “But I don’t believe the health issues with cocaine have ever had a deterrent effect or ever will. We have one or two deaths a day in the United States from cocaine, compared to hundreds a day from alcohol. We can live with cocaine toxicity.

“In my opinion, what we are going to see next is coca cultivation in the United States,” Siegel says. “I’ve seen small fields in California. Right now it’s window-box growing--people doing it for personal use. But it’s simple to move from that point to larger operations.”