Drug Lord’s Web of Payoffs Spans U.S.-Mexico Border

In the heady 1980s, when witnesses say Juan Garcia Abrego started moving more than a ton of cocaine to U.S. cities every month and millions of dollars in cash back to his base in Mexico, he made a critical decision. He needed more protection.

Already, court documents indicate, Garcia Abrego’s powerful Gulf cartel was shelling out millions of dollars in bribes from its booming cocaine sales in the United States to key Mexican police commanders, politicians and prosecutors. Even Mexico’s “drug czar” in the federal attorney general’s office was on the take, witnesses have testified.

But with a billion-dollar operation at stake from New York, Chicago and Houston to Cali, Colombia--the source of his cocaine--Garcia Abrego wanted insurance on the U.S. side of the border.

So in late August, 1986, the brazen cartel chief made his first $100,000 payoff to the FBI. A special agent in Texas named Claude de la O had convinced Garcia Abrego and his lieutenants that, in exchange for a small cut of the profits, he would be their eyes and ears inside the U.S. drug enforcement community.

But De la O was a double agent, and eventually he and a small army of U.S. federal investigators quietly recorded scores of conversations and more than a dozen multimillion-dollar drug deals throughout the United States that document the rise of one of the world’s most powerful--and now, most wanted--drug lords.

A savvy yet superstitious high school dropout, Garcia Abrego built an empire now worth an estimated $10 billion by supplying much of the cocaine sold in the United States during the past decade. It is an empire built on murder and money--on dozens of gangland slayings and tens of millions of dollars in payoffs to officials in Mexico and the United States, according to court testimony and documents in more than a dozen U.S. federal cases against him and his distributors. More than 60 of his employees are now serving time in U.S. jails.

This web of corruption underscores how deeply embedded Mexico’s drug cartels have become on both sides of the border. And the story of its rise helps explain why, six months after the Clinton Administration made him the first international drug dealer ever on the FBI’s 10 Most Wanted list, Garcia Abrego remains a free man. The U.S. government has also posted a $2-million reward for his capture and has been pressuring Mexico to arrest him.

“The guy’s tentacles reach out to every possible level of corruption,” one senior U.S. official said. “If the government of Mexico wanted him arrested, they would have done it before now.”

The hunt for Garcia Abrego and the gunmen, prosecutors and police who U.S. officials suspect are harboring him in Mexico has become a key issue in the relationship between Washington and Mexico City.

When U.S. Atty. Gen. Janet Reno added him to the 10 Most Wanted list March 9, she broke with tradition and announced the move personally--a decision Administration officials said was designed to put pressure on the Mexican government. Garcia Abrego’s arrest, they said, would prove Mexican President Ernesto Zedillo’s resolve--and ability--to break the link here between law enforcement and the cartels that supply the United States with illicit drugs.

Last month, a U.S. official sparked controversy in Mexico City when, asking not to be named, he told reporters that the Mexican attorney general’s office was negotiating Garcia Abrego’s arrest with his lawyers. Among the terms the U.S. official cited: permitting the drug lord’s common-law wives and children to keep the cartel’s fortune and allowing him to surrender to “the police commander of his choice.”

But Mexican Atty. Gen. Antonio Lozano flatly denied the report. Lozano, a member of Mexico’s political opposition, has acknowledged that some of his key prosecutors are on drug cartel payrolls, and he has vowed to root them out. But he has insisted that Garcia Abrego will be arrested without conditions.

Two days after Lozano’s denial, during a trip to Mexico City that focused partly on the fugitive drug lord, Assistant U.S. Secretary of State Robert Gelbard staunchly backed Lozano.

Calling the report of negotiations “irresponsible”--and Garcia Abrego and other cartel chiefs a threat to U.S. national security--Gelbard said: “The attorney general himself assured me that there are no negotiations going on, and I did not believe that there were anyway. We want to continue to cooperate with the Mexican authorities in an effort to capture Garcia Abrego, whom they and we consider to be one of the most important and dangerous drug traffickers.”

“Consider [him] armed and dangerous,” say the FBI wanted posters now hanging in post offices throughout the United States. “Juan Garcia Abrego is known to be in possession of weapons, utilized bodyguards for his protection and has ordered the murders of his rivals in the drug business.”

The posters describe the 50-year-old drug baron as six feet tall, weighing 200 pounds, with a medium build and brown eyes and hair. The birthplace of this U.S. citizen: La Paloma, Tex., across the border from the Mexican town of Matamoros. It was in Matamoros that Garcia Abrego built his empire from a two-bit family smuggling operation, say former associates and U.S. investigators.

The Gulf cartel was born at a large round table reserved for Garcia Abrego in his uncle’s Matamoros restaurant. It served as his headquarters for years to come, Francisco Perez Monroy recalled from the witness stand in Brownsville, Tex., last year.

Perez, 46, testified that he had known Garcia Abrego--his cousin--since he was 5. He identified their great-uncle as Juan N. Guerra, who U.S. and Mexican authorities say forged, with Prohibition-era hooch in the 1930s, the cross-border routes that Garcia Abrego later used to move billions of dollars’ worth of cocaine.

“How does Garcia Abrego make his money?” the federal prosecutor asked Perez.

“From drugs,” he replied.

“What is it that he does?”

“He moves cocaine. Started with marijuana first.”

Perez, who is serving 10 years in U.S. federal prison on narcotics charges, then gave a telling glimpse into the operation of a drug empire--and its emperor, whom Perez said he eventually came to fear so much that he preferred prison to his cousin’s “justice.” Asked why he surrendered to U.S. authorities in Brownsville on Aug. 24, 1993--after living freely for years in Mexico despite U.S. warrants for his arrest--Perez indicated that he had “disappointed” his former boss.

“And the need [to surrender] is because, if you work with the Juan Garcia Abrego organization and you disappoint the organization--or if you fail--you end up dead, is that right?” one attorney asked Perez.

“Definitely,” he said.

“That’s one of the reasons the organization has remained alive for so long, isn’t it, by killing any loose ends?”

“That’s correct.”

Perez testified that he periodically lived with Garcia Abrego, acting as errand boy and “fixer” from 1980 until he surrendered. During those 13 years, Perez said, he also served as his boss’s bagman, delivering payments to everyone from Mexican police commanders to ranking regional prosecutors and even a deputy attorney general.

“They were getting millions of dollars,” Perez stated. Later, when asked how much Garcia Abrego was paying to one regional prosecutor in Mexico, Perez replied, “Well, there were thousands of millions of dollars until the end . . . all from the cocaine . . . for protection of Juan Garcia Abrego and the operation.”

The federal case that included Perez’s testimony documented the size and intricacy of Garcia Abrego’s empire. It was the largest money-laundering case in U.S. history. What began with an FBI raid on a small currency exchange near Brownsville became a multimillion-dollar trail of the cartel’s drug money, which prosecutors showed was laundered through a Beverly Hills branch of American Express Bank and ultimately deposited in secret accounts in the Cayman Islands.

Perez’s testimony helped convict one of the bank’s directors on money-laundering charges; a separate civil lawsuit now on appeal could cost the bank $50 million in fines and forfeitures.

The key to Garcia Abrego’s financial success, former associates and law enforcement agents said, was a combination of business acumen, ruthless enforcement and his pioneering links to the Colombian drug cartels, which produce as much as three-fourths of the cocaine sold in the United States.

U.S. drug enforcement agents described Garcia Abrego’s arrangements with the Colombians as a marriage of mutual convenience.

It began after the United States successfully cracked down on traditional Colombian air and sea routes into Florida in the 1980s.

Almost overnight, Perez and former Gulf cartel members testified, Garcia Abrego switched his business from marijuana to cocaine. Instantly, his profits soared.

So did his level of sophistication. Cellular phones, beepers, anti-bugging devices, encoded communication systems and fleets of new, 18-wheel semitrailers with secret, electronic compartments suddenly appeared at a burgeoning network of safehouses in Mexico and the United States, according to testimony in U.S. federal court.

So massive was the flow of cocaine and money through those houses, testified one former Garcia Abrego associate now jailed in the United States, that he knew of 40 tons of cocaine that crossed the border during eight months of 1989. Those shipments fetched nearly $1 billion.

Against such huge profits, the bribes and protection outlays were small change. For a few thousand dollars a load, Garcia Abrego’s organization bought the services of key U.S. immigration officials in South Texas in the late 1980s, according to testimony in a Houston trial that convicted several immigration officials earlier this year.

Using the same Immigration and Naturalization Service buses that transport illegal immigrants to detention camps, those officials picked up thousands of pounds of Garcia Abrego’s cocaine at the U.S.-Mexican border and delivered the drugs to his distributors.

Garcia Abrego invested his profits. Perez testified that the cartel chief owns more than 10 ranches throughout northern Mexico, more than 20 purebred racehorses, a large meat-packing plant, a trucking company and other legitimate businesses--”everything [bought] from drug money,” he said.

Perez indicated that his boss mingled easily with bankers, politicians and other members of Mexico’s elite.

And he bet heavily on the horses; Perez recalled that his former boss once lost $20,000 on a single race.

Murder was as much a way of life as garnering and spending money, according to cases filed against Gulf cartel members in both the United States and Mexico. Authorities blamed 25 murders in Matamoros and Brownsville in one 30-day period in the spring of 1991 on a drug war between Garcia Abrego and his rivals. Police say his organization murdered several local journalists who reported the cartel’s activities.

Garcia Abrego’s own cartel members were not exempt from their boss’s wrath, they have testified.

One former cocaine distributor in Texas, who turned against Garcia Abrego after he was jailed in the United States, described from a Houston witness stand the consequences of disappointing his former boss. Jaime Rivas Gonzalez said two of Garcia Abrego’s top lieutenants summoned him to Matamoros after he lost $5 million in drug receipts between New York and Texas.

Rivas identified the men who greeted him at a cartel safehouse as Luis Garcia Medrano Jr., arrested last year in Mexico, and Elias Garcia Garcia. Known as “the Professor,” Elias Garcia was killed in the 1991 Matamoros carnage. But Rivas testified that there was a third man in the room--Jose de la Rosa, whom he identified by his nickname, “the Kind One.”

Asked what the Kind One did for the cartel, Rivas replied, “Kill people.”

“When Medrano and the Professor started scolding me . . . the Kind One asked me if I wanted him to fix me,” Rivas recalled. “He put his gun to my head.”

Perez made it clear that he too knew the consequences of turning on his cousin.

“What do you think is going to happen when Juan Garcia Abrego hears that you’ve testified in this courtroom about his drug activities?” the federal prosecutor asked him last year.

“He’s going to hunt me. He’s going to be going after my family,” Perez said.

Far less certain is the hunt for Garcia Abrego.

“Assuming the man is in Mexico, we certainly cannot go there and get him,” said Assistant U.S. Atty. Melissa Annis, head of the Houston-based federal drug task force, who has led the campaign to dismantle the Gulf cartel in the years since De la O’s undercover work first exposed its size and power.

“Hopefully he will be captured in the very near future,” she said.