Traffickers Set Up Shop in Panama

On a routine patrol off the Caribbean shoreline, the Panamanian coast guard stopped a speedboat early last year, launching an investigation that uncovered a drug operation stretching from Colombia to the United States.

Tapping telephones whose numbers were stored in the memories of cellular and satellite phones found on board, law enforcement officials traced 1-ton shipments of cocaine from the Colombian port of Cartagena through Haiti and the Dominican Republic to the U.S.

The size of the shipments and the sophistication of the operations were not unusual. What surprised investigators was that the mini-cartel was based not in the Colombian cities of Medellin or Cali, traditional drug capitals, or even in Cartagena or Barranquilla, headquarters of upstart smugglers.

The trail led back to Panama.

A decade after U.S. troops invaded this Central American country to arrest dictator Gen. Manuel A. Noriega and break up his drug transit and money laundering partnership with the Medellin and Cali cartels, Colombian drug dealers are moving back here, authorities said. The arrest this month of Heriberto Coneo on drug trafficking charges stemming from the speedboat incident confirmed what law enforcement officials had suspected.

Although Colombian drug traffickers have avoided shipping large quantities of drugs through Panama in recent years, authorities said, more of them are moving their families to and running their operations from this relatively tranquil nation of 2.7 million people next door to their own violence-ridden country.

The new arrivals are for the most part mid-level traffickers who find Panama an attractive place to live as they organize operations that hide illegal drugs on container ships cruising the Pacific or speedboats and small planes hip-hopping across the Caribbean.

However, Panamanian law enforcement officials worry that if the traffickers find this country too cozy, they will be followed by larger operators who will launder money and ship drugs through this isthmus on a scale not seen since the days of Noriega.

As a major banking center, Panama became an important conduit for laundering money then. Although no one interviewed believes that the practice has completely ceased, stricter banking laws enacted in 1998 put a damper on the laundering activities.

In addition, traffickers were wary of this country when it was a center for Latin American anti-drug operations throughout the 1990s. But that role ended when the last U.S. military base here closed last month, in keeping with a treaty that gave this country control of the Panama Canal on Dec. 31.

That makes the Colombian presence seem more ominous to many Panamanians.

“They set up camp here, they have safe houses here,” said one source, who has been arrested but not convicted on money laundering charges. The drug traffickers have taken a hint from rich Colombians who have moved their families to Panama over the last five years to avoid violence in their homeland, the source said.

A local law enforcement official agreed: “They have found a safe place to live in Panama.”

‘Neglect, Neglect and Neglect’ Get Blame

It’s not a subject that authorities are willing to discuss for attribution. Privately, however, law enforcement officers say they are worried. Many, in fact, are angry.

“This has happened for three reasons: neglect, neglect and neglect,” said a former U.S. Drug Enforcement Administration agent in a telephone interview. “When Colombians realize that their own country is unstable, it is impossible for them not to notice the dollarized economy of Panama,” which in effect uses the U.S. currency, as a secure alternative for their families and investments.

As the U.S. has paid more attention to other foreign policy issues and Colombian drug production has grown, he said, Panama must inevitably feel the effects.

However, some Panamanian authorities argue that narcotics traffickers will treat this country as a sanctuary and that the Colombians’ residence here is the best guarantee that they will not use this nation as a major transit route.

“Panama has always been a refuge,” said a high-ranking Panamanian official who, like most of those interviewed, requested anonymity. “Drug dealers are no worse than [former Haitian dictator] Raoul Cedras,” who moved to Panama just before U.S. troops occupied his country in 1994.

Cooperation on Extradition Is Stressed

In addition, the official noted that few countries have been more cooperative than Panama in extraditing suspected drug traffickers to the United States. Alleged drug kingpin Jose Castrillon Henao was sent from Panama to the United States for prosecution on narcotics charges in 1998 without so much as an extradition hearing. He is awaiting trial.

But before his 1996 arrest, Castrillon Henao lived in Panama for years. According to the 1998 indictment filed in a federal court in Tampa, Fla., he is accused of laundering millions of dollars and transshipping tons of cocaine for the Cali drug cartel. He was a major depositor in a bank that failed, and former President Ernesto Perez Balladares returned $51,000 that Castrillon Henao contributed to his 1994 campaign.

The current generation of drug traffickers is discreet.

“They drive Toyotas,” said a source close to the narcotics business. “They don’t go to nightclubs and sit with 20 showgirls. They don’t go to nightclubs at all.”

Rather than living in fashionable areas such as the Paitilla district of Panama City, he said, they favor isolated houses on the outskirts.

“They were too obvious in the [high-rise] buildings,” he said. “They are well dressed and [well groomed], but the people who visit them are not, so they are easy to spot.”

For example, law enforcement officials said that Coneo had an apartment in the prestigious Pacific Hills, a development of three condominium towers here. But he also kept a country home in Sarmeno, a retreat about an hour outside the city that lost favor years ago as wealthy Panamanians moved to cooler regions.

The unpretentious three-bedroom house sits on a hill, barely visible from the road. Coneo dammed a stream to create a pond and a waterfall with a 15-foot drop. A bridge leads to a thatched-roof shelter in the center of the pond and a similar building is on the side of the pond. Between the house and the pond is a small stable.

Alleged Trafficker Easily Blended In

Coneo, who law enforcement authorities say is barely literate, sent his children to Panama’s best private schools. Because he is from Colombia’s Caribbean coast, he easily blended into Panamanian society, which is similar in culture and ethnic mixture.

In fact, law enforcement authorities acknowledge that they probably would never have noticed him if not for the alert coast guard patrol. Even so, he eluded them for months because of a mix-up in communications. Haitian authorities arrested other suspects in the case earlier than expected, which alerted Coneo.

He packed up his family and moved back to Colombia, where he was arrested Jan. 8.

Law enforcement authorities said they are keeping tabs on other suspected drug traffickers, several of whom have moved their wives or mistresses to Panama while sending their children to boarding school or college in the United States or Europe.

The suspects are detected when they travel to the U.S. or Europe for visits, said one Panamanian intelligence officer. Panamanian police have virtually no way to detect foreign-born traffickers once they are in the country because of lax immigration regulations, he added.

“They get on a plane from Colombia, buy a $5 tourist visa and, when they arrive, they disappear,” said a source close to drug traffickers. Thanks to advances in communications, they can run their operations at a distance. Panama’s extensive financial services sector offers them the opportunity to pursue investments.

“These are the middle class of the business,” the source said. But he predicted that “the big people are going to start coming now that the Americans have moved out. The Americans have got to be really worried, and I don’t blame them.”