|Excerpt #4 from|
|The Underground Empire - |
Where Crime and Governments Embrace
|by James Mills|
Doubleday, New York, 1986
Crime is crime, after all -- armed robbery, bank embezzlement, drug dealing. It's been around a long time, not too hard to live with. But then something happened. The light dawned. Men long inured to drug-use statistics, to anticrime rhetoric, to outraged editorials, were suddenly shocked from complacency by a shower of buzzwords they took very seriously indeed. Gross national product Balance of payments. Foreign exchange. Something had endangered America's economic base. Where was all this drug money going? Could it be used to alter balances of power? In Washington power centers, including the White House, telephones were lifted in alarm, panic buttons pressed, emergency meetings convened. What is the meaning of this? What is going on here?
No one knew.
The CIA and DEA, embarrassed by their ignorance, rushed to beat each other to the answers.
FM DEA HQS WASHDC
TO DEA WORLDWIDE
C O N F I D E N T I A L
EMBASSIES/CONSULS FOR DEA
SUBJECT: OPERATION CASHFLOW
THE OFFICE OF INTELLIGENCE IS INVOLVED IN AN ON-GOING PROJECT DESIGNED TO IDENTIFY THE MAGNITUDE AND SPECIFIC RAMIFICATIONS OF THE INTERNATIONAL FLOW OF DRUG RELATED CURRENCY. ESTIMATES BY VARIOUS AGENCIES REFLECT THAT DOLLARS LEAVING THE U.S. FROM ILLICIT DRUG PROFITS AND PAYMENTS MAY WELL BE A SIGNIFICANT UNMEASURED PORTION OF THIS COUNTRY'S GROSS NATIONAL PRODUCT AND CREATES SERIOUS INACCURACIES IN U.S. DATA ON INTERNATIONAL CURRENCY FLOW (BALANCE OF PAYMENTS). MORE AND MORE FREQUENTLY DEA IS BEING ASKED TO PROVIDE INFORMATION IN THIS SUBJECT AREA AND TO DATE, INFORMATION IN OUR POSSESSION HAS BEEN EXTREMELY LIMITED.
DEA offices from Songhkla, Thailand, to Lahore, Pakistan, were ordered to "conduct a study and submit results" within six weeks. The CIA sent similar instructions to its stations. But no one waited for foreign-based agents to check in. Hardly two weeks after the cable went out, a senior agent from DEA's office of strategic intelligence was on his way around the world, conducting the first inclusive intelligence operation (it was code-named Operation Cashflow) ever directed at the multibillion-dollar profits of the international narcotics industry.
Arriving in Hong Kong after a first stop in Thailand, the agent wrote that he had found Bangkok "indeed interesting -- in terms of drug money ending up there (as was the conclusion of Schoolboy) it really becomes a black hole." He was referring to Operation Schoolboy, the DEA intelligence program aimed at the Hong Kong-based Chinese banking system. The agent found that DEA's Bangkok office, "with nearly 20 agents and their CIs, has done zero" to study the movement of drug money and "where it goes once it's transferred there from Hong Kong and Singapore."
Much of Asia's drug profits were generated, he said, by marijuana. "When the Thais seize marijuana, they store it in military bases. Major American brokers are actually now residing in Bangkok, and a lot of the stuff is coming right out of these military bases." The same had been true of heroin when I was in Bangkok.
The DEA intelligence agent said, "The European connection, especially France and the Netherlands in the financial-drug network, is most interesting. Might even warrant a trip there." Referring to the CIA, he said "the current race going on between us and our cousins over at Langley to produce a report on this subject does not allow a lot of time."
What he had seen so far in Asia convinced the agent "there's a 'big picture' here involving all the major banking havens and I wish we had the time and resources to check it all out. There are so many more answers to how the money moves and where it ends up in the cocaine and marijuana traffic using Panama and the Caymans, etc., than will ever be available here. I'm afraid the answer to many of my questions regarding the Asia situation will be 'there is no answer.' If I can get some hard info from here and Singapore on the European link it may be easier to track the money movement there."
As the Operation Cashflow studies continued, couriers hurried several times a day between DEA and CIA headquarters in Washington and Langley, Virginia. Reports reaching Washington from CIA and DEA agents in Latin America were startling. "I'll tell you," one agent said to me, "some of the stuff that comes out of there -- phenomenal."
A secret CIA cable from Bolivia told of a major trafficker in La Paz promising a representative of President Hernan Siles-Zuazo to pay off 25 to 35 percent of the country's $4.4 billion foreign debt in return for exclusive rights to the coca traffic. According to the CIA, the offer was refused.
Another secret cable, four pages in length, from the CIA's Bahamas station reported government corruption with astonishing precision, detailing not only the names of a half-dozen bribe-taking officials but the exact amount of the bribes ($50,000 to over $100,000) and specifically what favors they bought. At least one DEA official expressed shock, not so much at the revelations as at the thoroughness with which they were known. It was almost as if the CIA had been involved in some way.
The secret Bahamian cable recalled a similar, though far more extensive document, classified TOP SECRET, which had earlier detailed corruption among officials in the Cayman Islands. That bound report included not only evidence of extensive involvement of government officials with traffickers, but photographs of specific banks and individuals. Though a later CIA report went on to call the Cayman Islands (with fewer inhabitants than Broken Arrow, Oklahoma) "the supermarket of money-laundering centers," the effect of both reports on the American government had evidently been minimal for, as one agent pointed out, "They're still going strong." Despite a 1984 U.S.-British agreement promising American officials access to Cayman drug accounts, few investigators were claiming victory.
After Asia, DEA's Operation Cashflow agent traveled to Panama. A few South Florida bankers had been indicted for accepting huge amounts of so-called suitcase cash without filing legally required reports, and traffickers had returned to moving the currency out of the United States physically... But paper is heavy -- the proceeds of a heroin or cocaine sale generally weigh five times more than the drugs themselves. The traffickers' biggest problem had become the sheer bulk of their profits. Moving the money was harder than moving the drugs, and a cottage industry of currency relocation specialists had emerged to handle the problem.
One of these, a sharp-witted young entrepreneur named Ramon Rodriguez (no relation to Gilberto Rodriguez) bought a Learjet and regularly flew from Fort Lauderdale to Panama with half-ton loads of currency. Identified by DEA's man in Panama City, Rodriguez was allowed to import several multimillion-do]lar shipments so he could be followed around the streets of Panama City delivering bushels of cash to various banks. An agent familiar with the case told me, "What happened to the money, that's what I want to know. Was it wire-transferred to Colombia? Did it go on to Switzerland? Did it just stay in Panama? Where is it going? What happens after?" One thing the agent knew for sure -- he'd never find out from the Panamanians.
Rodriguez was eventually arrested in Fort Lauderdale with $5.4 million in cash. His accounts, computerized on floppy disks, showed he had flown nearly a quarter of a billion dollars to Panama in the previous twelve months. He said he was only one of a crowd, that there were several other airborne money-freight operators he knew of and no doubt some he didn't. To government analysts he looked like the tip of an underground multibillion-dollar "Air Cash" service industry.
Whether chasing money or drugs, DEA had never found Panama an easy country to work in. General Manuel Antonio Noriega, who had ended up as chief of the National Guard (later renamed the Defense Forces) and hence of Panama itself following General Omar Torrijos's death in a plane crash, appeared to be as deeply involved in the drug traffic as Torrijos had been. DEA targets had a way of vanishing to safety shortly after investigative reports, requested by Noriega's officers, had been handed over.
"Noriega's man contacts our man," an agent told me, "and wants to know about the case. Well, you know, there's nothing we can do but to tell him, basically. And they pledge the utmost in cooperation and then when the time comes the bad guy just disappears. This has just been going on and on and on. It's been going on forever."
It's been going on so long that Senate investigators visiting Panama in late 1982 reported it had become "common knowledge" that Noriega's National Guard "has ties to and income from various traffickers in drugs, arms, and other contraband, as well as fugitives...." Furthermore, the Guard "provides warehousing for narcotics on their way north, assures the release, for bribes received, of drug traffickers arrested, guarantees the nonarrest of offenders wanted elsewhere who have paid a kind of local 'safe conduct' fee, supervises the air transport of gold, arms, spies bound to and from North America, Cuba, and Central America."
The investigators predicted that "in ten years much of the European and Western world's criminal money will reside in Panama."
Panama's role as the world's cocaine banker is particularly troubling, for though not a Communist nation itself it forms with its friends Cuba and Nicaragua (Communist countries publicly exposed as participants in the cocaine traffic) a troika of narco-nations whose intentions may be not only enrichment but the undermining of American values and will. If Communist insurgents now active in Colombia, Bolivia, and Peru gain power, this alliance will enlarge to a de facto Communist-controlled Latin Cocaine Pact, and all hope of controlling the traffic will vanish.
In Panama as elsewhere, the CIA remains determined to protect its intelligence assets regardless of their involvement in the narcotics traffic, weapons smuggling, protection of fugitives, and other crimes. When the DEA boss in Panama City suggested an SFIP (Special Field Intelligence Program) to unravel the shadowy background of billions of dollars of Panama-stashed drug money, he sought necessary approval from the CIA station chief. The station chief agreed, but with an interesting reservation. If the SFIP developed any information involving Panamanian government officials, that particular aspect of the investigation must be immediately dropped. Once again, the roses won.
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