Cali Cartel

The Cali Cartel would become known for its innovations in trafficking and production, by moving its refining operations out of Colombia to Peru and Bolivia, as well as for pioneering new trafficking routes through Panama. The Cartel also diversified into opium and was reported to have brought in a Japanese chemist to help its refining operation.[10][14] Venezuelan General Ramon Guillen Davila ran the Venezuelan National Guard unit that was to interdict cocaine shipments and was the CIA's most trusted narcotics asset in Venezuela. He worked with Mark McFarlin and Jim Campbell, and was charged by United States authorities with smuggling 22 tons of Cali Cartel cocaine from 1987 to 1991 known as Operation North (Spanish: Operación Norte).[15][16][17][18]

According to reports and testimony of Thomas Constantine to the United States Congress, "Cali would be the dominant group in trafficking South American heroin due to their access to the opium-growing areas of Colombia." Debate over the cartel's participation in heroin trafficking remains. It is believed the cartel's leaders were not involved in heroin trading, but that close associates to them, such as Ivan Urdinola-Grajales, were,[3] and that they cooperated with heroin distribution centers.[8]

At the height of the Cali Cartel's reign, they were cited as having control over 90% of the world's cocaine market and for being directly responsible for the growth of the cocaine market in Europe.[3] By the mid-1990s, the trafficking empire of the Cali Cartel was a multibillion-dollar enterprise.[4][5]

After Gilberto took a trip to Spain in the mid-1980s, the cartel began to expand its activities in Europe and developed a working relationship with tobacco smugglers from Galicia, Spain. But in particular, the Cali cartel established a strategic alliance with the powerful Camorra criminal organization. Cali supplied the cocaine and the Camorra handled distribution across Europe.[19][20]

Cali Cartel money laundering chart

In order to launder the incoming money of the trafficking operations, the Cali cartel heavily invested its funds into legitimate business ventures as well as front companies to mask the money. In 1996, it was believed the Cartel was grossing $7 billion in annual revenue from the US alone.[4][21][22] With the influx of cash comes the need to launder the funds. One of the first instances of the Cali Cartel's laundering operations came when Gilberto Rodriguez Orejuela was able to secure the position of Chairman of the Board of Banco de Trabajadores. The bank was believed to have been used to launder funds for the Cali cartel, as well as Pablo Escobar's Medellín Cartel. Cartel members were permitted, through their affiliation with Gilberto, to overdraft accounts and take out loans without repayment.[3][8][21] Allegedly, Semion Mogilevich instructed Natasha Kagalovsky to wire transfer Cali cartel funds from Bank of New York accounts though Brazilian banks to offshore shell companies.[23]

Capitalizing on this basis, Gilberto was able to found the First InterAmericas Bank operating out of Panama.[8] In an interview with Time, Gilberto admitted to money being laundered through the bank; however, he attributed the process to only legal actions. The laundering, which Gilberto states was "in accordance with Panamanian law", is what led to the US authorities' pursuing him. Gilberto later started, in 1979, the Grupo Radial Colombiano, a network of over 30 radio stations and a pharmaceutical chain named Drogas la Rebaja, which at its height amassed over 400 stores in 28 cities, employing 4,200. The pharmaceutical chain's value was estimated at $216 million.[3][21][24] As a consequence of the Cali Cartel's ownership of the chain, from January 1988 to May 4, 1990, it was targeted for 85 bombings by Pablo Escobar and the Medellín Cartel, leaving a total of 27 people dead.[25]

According to Felipe Turover Chudínov, who was a senior intelligence officer with the foreign-intelligence directorate of the KGB, Russian prime minister Viktor Chernomyrdin secretly decreed in the early 1990s that Russia would become an international hub through which narcotics are trafficked including cocaine and heroin from South America and heroin from Central Asia and Southeast Asia.[26][27] Yuri Skuratov supported Turover's statements and began numerous investigations into corruption with high ranking Russian government officials.[28] Alexander Litvinenko provided a detailed narcotics trafficking diagram showing relationships between Russian government officials and Russian mafia and implicating Vladimir Putin and numerous others in obschak including narcotics trafficking money.[29][30][31] Following Operation Troika which targeted the Tambov Gang, Spanish Prosecutor José Grinda concurred and added that to avoid prosecution numerous indicted persons became Deputies in the Russian Duma, especially with Vladimir Zhirinovsky's Liberal Democratic Party and gained parliamentary immunity from prosecution.[32]

St. Petersburg Immobilien und Beteiligungs AG or SPAG is a real estate company registered in Germany under Putin's control in 1992 and suspected by German police of facilitating Saint Petersburg mobsters, Colombian drug lords, and transcontinental money laundering.[33][34] Kumarin-Barsukov, of the Tambov Russian mafia was a partner in Znamenskaya, a subsidiary of SPAG.[35][36] Vladimir Smirnov was the general director of Znamenskaya and Kumarin-Barsukov was his deputy.[36] Through his 200 shares or 20% control, Vladimir Smirnov was Putin's voting proxy in SPAG.[37][38] Jalol Khaidarov (Russian: Джалол Хайдаров) stated that the final destination of the funds was to the "Operator Trade Center" in Liechtenstein but also said that the Bank of New York was a participant.[37] In the early 2000s, the company's co-founder Rudolf Ritter was arrested in Liechtenstein for laundering cocaine cash for the Cali cartel.[35][39] Robert Walner was the chief prosecutor in Liechtenstein's capital Vaduz.[35]

Former Ukrainian presidential bodyguard Nikolai Melnichenko bugged the following conversation between Ukrainian President Leonid Kuchma and his security chief Leonid Derkach about SPAG:[35][40]

Leonid Derkach: Leonid Danilovich. We've got some interesting material here from the Germans. One of them has been arrested.
Leonid Kuchma (reading aloud): Ritter, Rudolf Ritter.
Leonid Derkach: Yes, and about that affair, the drug smuggling. Here are the documents. They gave them all out. Here's Vova Putin, too.
Leonid Kuchma: There's something about Putin there?
Leonid Derkach: The Russians have already been buying everything up. Here are all the documents. We're the only ones that still have them now. I think that [FSB chief] Nikolai Patrushev is coming from the 15th to the 17th. This will give him something to work with. This is what we'll keep. They want to shove the whole affair under the carpet.

Later in the conversation Derkach states that "they've bought up all these documents throughout Europe and only the rest are in our hands".[40]

Using Israel as its base, Russian mafia moved heroin and Colombian cocaine, sometimes through Venezuela, through Israel, where money laundering would occur of the narcotics profits, to Saint Petersburg while the Russian Kurgan mafia (Russian: Курганская организованная преступная группировка) provided security.[41][42][43][44][45]

According to Alexander Litvinenko, Putin, while he was Deputy Mayor for Economic Affairs of St Petersburg in the early 1990s, organized an Afghanistan origin heroin supplying ring using ethnic Uzbek criminals and corrupt KGB and later FSB officers including the Moscow-based KGB Colonel Evgeny G. Khokholkov, the Oleg Ivanov created Izmaylovskaya Russian mafia and led by Anton Malevsky including mafia leaders Gafur Rakhimov, Vyacheslav Ivanov ("Yaponchik" (Япончик) or Little Japonese), who governed Uzbek networks in America, and Alimzhan Tokhtakhunov (Russian: Алик Тахтахунов) ("Taiwanchik" (Тайванчик) or Little Taiwan), who governed Uzbek networks in Europe, and Salim Abdulaev. These networks also supplied Europe and America with cocaine from the Cali KGB cartel.[37][46][31][47] Robert Eringer, head of Monaco's Security Service, confirmed Litvinenko's file about Vladimir Putin's involvement in Europe's narcotics trade.[48] The Ismailovskaya mafia is closely associated with Oleg Deripaska, Andrei Bokarev, Michael Cherney, and Iskander Makhmudov through their Switzerland-based Blond Investment Corporation's MIB bank account.[12][37] Rudolf Ritter in Liechtenstein was the financial manager for both SPAG and the Ismailovskaya mafia.[37] Alexander Afanasyev ("Afonya") was connected to both SPAG and the Ismailovskaya mafia through his Panama registered Earl Holding AG which Ritter had also a signature as well as Berger International Holding, Repas Trading SA and Fox Consulting.[12][37] Juan Carlos Saavedra represented the Cali Cartel in Spain.[12][37] In October 2015, Spanish Prosecutor Jose Grinda stated that any part of "the case could be recalled back to Spain."[37]

Revealed in late September 2020, Cali KGB cocaine was being transported through the Russian embassy in Argentina to Russia for many years.[49]

Political violence was largely discounted by the Cali Cartel, as the threat of violence often sufficed. The organization of the cartel was structured so that only people who had family in Colombia would handle operations that involved both Cali and U.S. sites, keeping the family within reach of the cartel. Family members became the cartel's insurance that its members would not assist government officials, nor would they refuse payment for products received. The threat of death also hung over those who made mistakes. It is believed the cartel would often kill junior members who made gross errors.[10]

In his book End of Millennium, Manuel Castells states the Cali Cartel had participated in social cleansing of hundreds of desechables ("discardables"). The desechables included prostitutes, street children, petty thieves, homosexuals and the homeless.[50]

Along with some of the locals, the Cali Cartel formed parties self-named grupos de limpieza social ("social cleansing groups") who murdered the desechables, often leaving them with signs on them stating: "Cali limpia, Cali linda" ("clean Cali, beautiful Cali"). The bodies of those murdered were often tossed into the Cauca River, which later became known as the "River of Death". The municipality of Marsella in Risaralda was eventually bankrupted by the cost of recovering corpses and conducting autopsies.[6][50]

José Santacruz Londoño

In the 1980s and early 1990s, the communist guerrillas struck at the drug cartels. In 1981, the then-guerrilla group, Movimiento 19 de Abril (M-19; "19th of April Movement"), kidnapped Marta Nieves Ochoa, the sister of the Medellín Cartel's Ochoa brothers, Jorge, Fabio and Juan David. M-19 demanded a ransom of $15 million for Marta's safe release, but were rejected. In response to the kidnapping, the Medellín and Cali cartels, as well as associated traffickers, formed the group Muerte a Secuestradores (MAS; "Death to Kidnappers"). Traffickers contributed funds, rewards, equipment and manpower for MAS operations. Leaflets soon after were dropped in a football pitch in Cali announcing the formation of the group. MAS began to capture and torture M-19 members in retaliation. Within 3 days, Marta Nieves was released. The group MAS, however, would continue to operate, with hundreds of killings attributed to them.[8][51]

In 1992, the guerrilla faction Fuerzas Armadas Revolucionarias de Colombia (FARC; "Revolutionary Armed Forces of Colombia") kidnapped Christina Santa Cruz, the daughter of Cali Cartel leader José Santacruz Londoño. FARC demanded in exchange for the safe return of Christina a ransom of $10 million. In response, the Cali Cartel kidnapped 20 or more members of the Colombian Communist Party, Patriotic Union, the United Workers Union, and the sister of Pablo Catatumbo, a representative of the Simón Bolívar Guerrilla Coordinating Board. Eventually, after talks, Christina and the sister of Catatumbo were released. It is unknown what happened to the other hostages taken by the cartel.[8][51][52]

During the narco-terror war waged by Pablo Escobar on the Colombian government, it is believed a hired assassin attempted to kill Herrera while he was attending a sports event. The gunman opened fire using a machine gun on the crowd where Herrera was sitting, killing 19. However, he did not hit Herrera. Herrera is believed to have been a founding member of Los Pepes, a group which operated alongside authorities with the intention of killing or capturing Pablo Escobar.[53]

The Cali cartel then hired a member of Colombia's military, a civil engineer named Jorge Salcedo.[54][55] They wanted him to help them plot an assassination on Pablo Escobar. They hired him because they heard that Salcedo had in the past, befriended and hired a group of mercenaries to wage war against the left-wing guerrilla forces in an operation sanctioned by Colombia's military. The mercenary group was made up of 12 former special operations soldiers, including the British Special Air Service.[54] Salcedo felt it was his patriotic duty and accepted the deal to bring the mercenaries back to Colombia and help plan the operation to kill Pablo Escobar.[55]

The group of British ex-soldiers accepted the offer. The cartel provided food, housing, and weapons to the mercenaries. The plan was to attack Escobar at his Hacienda Nápoles compound. They trained for a few months until they heard Escobar was going to be staying at the compound, celebrating the fact that his football team had won a tournament. They were going to be inserted by use of two heavily armed Hughes 500 helicopters and surprise-attack Escobar during the early morning. They painted the helicopters to look like police helicopters to further confuse them. They took off and headed towards the compound but one of the helicopters ended up crashing onto a mountainside, minutes away from the compound.[54] The pilot was killed during the crash. The plan was aborted and they had to conduct a rescue mission up the dense mountainside.[54][55]

One plan included the use of a privately owned A-37 jet to bomb the prison holding Escobar.

Finally, Escobar went to prison, where he continued to run his Medellin Cartel and menace rivals from his cell.[55] The second plot to kill Escobar was to bomb the prison by using an A-37 Dragonfly surplus ground-attack jet bomber in private ownership.[55][56] The Cali Cartel had a connection in El Salvador, a general of El Salvador's military who illegally sold them four 500-pound bombs for about half a million dollars.[54][55]

Salcedo flew over to El Salvador to oversee the plan to pick up the bombs and take them to an airfield where a civilian jet would land to pick them up and take them to Colombia. But when the jet landed at the airfield they found that it was a small executive jet. They attempted to load the four bombs, and what was planned to be a few minutes, it took them over 20 minutes. By this time there was a crowd of civilians that had gathered at the airfield curious about what was happening. Only three bombs fit, stacked in the small passenger cabin.[55] The jet took off and Salcedo abandoned the fourth bomb and went back to his hotel. The morning after, the activities of the night before were all over the news.[54] Salcedo barely escaped El Salvador and arrest before the botched pickup was exposed.[55] Law enforcement had discovered the bomb and some of the people involved in the operation were arrested, and they told authorities about the plot to kill Escobar with the bombs. The Cali Cartel then decided to abort the air bombing plot.[54][55]

There was no turning back for Salcedo. The Colombian government labeled him a criminal now working for the Cali Cartel, and his employers would not let him go anyway.[54][55] Salcedo then settled into managing security for the Orejuela family, but then he was forced to witness an execution of four Panamanians, and tasked with organizing the murder of Guillermo Pallomari, their own cartel accountant.[55] Salcedo faced a choice: to kill or risk being killed along with his family.[55] Salcedo then decided to retaliate and save Pallomari and himself by contacting the US Central Intelligence Agency and work as an informant.[54][55] This proved to be the death blow to the Cali Cartel.[54] For his service, Salcedo and his extended family were relocated to the US and he received rewards of about $1.7 million.[54][55]

The counter-intelligence TN Education Centre of the Cali Cartel often surprised the DEA and Colombian officials. It was discovered, in a 1995 raid of Cali Cartel offices, that the cartel had been monitoring all phone calls made in and out of Bogotá and Cali, including the U.S. Embassy in Bogotá and the Ministry of Defense. The laptop allowed Londoño to eavesdrop on phone calls being made as well as analyze phone lines for wiretaps. While officials were able to discover the use of the laptop, it is reported they were unable to decrypt many of the files due to sophisticated encryption techniques.[6] Londoño was also believed to have a person within the phone company itself, which the officials realized when he was able to recognize a phone tap, one that had been placed directly at the phone company, instead of at his residence. Londoño's lawyer soon sent an official notice requesting the legality and requesting the warrant if one was produced.[6][57]

Included in the list of government officials and officers on the Cali Cartel payroll were a reported 5,000 taxi drivers. The taxi drivers would allow the cartel to know who was arriving in the city and when, as well as where they were staying. By having numerous taxi drivers on the payroll, the cartel was able to monitor the movements of officials and dignitaries. It is reported by Time magazine, in 1991, DEA and U.S. Customs Service (now ICE) agents were monitoring a shipment being offloaded in Miami, only to find out later that the DEA agents were the target of Cali surveillance at the same time.[57]

Jorge Salcedo, a member of Colombia's military, was put in charge of the cartel's intelligence and later provide security to Miguel. He would later, ironically, be crucial in helping destroy the cartel and pinpointing where Miguel was hiding. He designed and set up a large hidden radio network across the city allowing members to communicate wherever they were. They also had many people inside law enforcement working for them, including a high-ranking member of the Bloque de Búsqueda (search block) who were looking for the Cali Cartel's top leaders. When law enforcement had finally cornered Miguel inside an apartment, the double agent was there (along with other law enforcement including two DEA agents) trying to find the secret compartment in which Miguel was hiding. Law enforcement failed to find him on time and were forced to leave the apartment. They maintained a perimeter around the building to prevent his escape. The double agent was crucial in helping Miguel escape, as he hid Miguel in his car and drove away from the scene untroubled.[54]

Jorge Ochoa, a high ranking Medellín financier and Gilberto Rodriguez had been childhood friends and years later co-owned the Panamanian First InterAmericas Bank. The institution was later cited by United States officials as a money laundering operation, which allowed both the Cali Cartel and the Medellín Cartel to move and launder large amounts of funds. Only through diplomatic pressure on then Panamanian Dictator Manuel Noriega could the U.S. put an end to the bank's use as a money laundering front.[51] In a Time magazine interview, Gilberto Rodriguez admitted to laundering money through the bank but noted that the process broke no Panamanian laws.[21]

The two cartels participated in other joint ventures in later years, such as the founding of Muerte a Secuestradores (MAS), who successfully returned Ochoa's kidnapped sister, Marta Nieves Ochoa. Expanding on the prior success of MAS, the cartels and independent traffickers would meet again.

The second meeting is believed to have been the start of an organization trafficking between the primary participants, the Medellín Cartel and Cali Cartel. The two cartels divided up the major United States distribution points: the Cali Cartel took New York City and the Medellín Cartel took South Florida and Miami; Los Angeles was left up for grabs.

Through their affiliation in MAS, it is also believed the cartels decided to work together to stabilize prices, production, and shipments of the cocaine market. However, the strategic alliance formed with the foundation of MAS in 1981 began to crumble by 1983–1984, due to the ease of competition. As the cartels set up infrastructure, routes, transport methods, and bribes, it became easier for competitors to either establish similar deals or make use of those already put in place by other cartels. By 1987, the cooperation forged by the formation of MAS no longer existed. Contributing to the demise was the Medellín Cartel's Rodríguez Gacha, who attempted to move in on the New York City market, previously ceded to the Cali Cartel, and the 1986 arrest of Jorge Ochoa at a police roadblock, which the Medellín Cartel deemed suspicious and attributed partly to the Cali Cartel.[51]

In later years, as Pablo Escobar's narco-terror war escalated against the Colombian government, the government began to strike back in ever escalating battles. As the Medellín Cartel weakened due to the fighting and constant pressure, the Cali Cartel grew in strength, eventually founding Los Pepes, or Perseguidos por Pablo Escobar ("People Persecuted by Pablo Escobar"). Los Pepes was specifically formed to target the Medellín Cartel and bring about the downfall of Pablo Escobar.[58]

It is believed Los Pepes provided information to Search Bloc, a joint police and army unit specifically created to track down Medellín leaders. In exchange for information, Los Pepes received assistance from the United States counter-terrorism unit, Delta Force, through its links to Search Bloc. By the time of Escobar's capture and eventual death in December 1993, Los Pepes had been responsible for the deaths or executions of over 60 associates or members of the Medellín Cartel. The death of Pablo Escobar led to the dismantling of the Medellín Cartel and the rise of the Cali Cartel.[51][59]

While the Cali Cartel operated with a degree of immunity early on, owing to its ties to the government and the Medellín Cartel's narco-terrorism war on the Colombian government, they were still subjected to drug seizures. In 1991 alone, law enforcement agencies seized 67 tons of cocaine, 75% originating from the Cali Cartel. In total, the US Customs Service (USCS) alone had spent 91,855 case hours and 13 years in investigations against the Cali Cartel, seizing 50 tons of cocaine and $15 million in assets.[60]

In 1991, a shipment of cocaine hidden inside of concrete posts was intercepted with the aid of a drug-sniffing dog at the Miami seaport. It led to the seizure of 12,000 kilograms (26,455 lb) of cocaine and several arrests, beginning what the US Customs Service would dub Operation Cornerstone, which lasted 14 years. In another seizure the following year, a USCS wiretap on Harold Ackerman, whose affiliation was derived from the 1991 seizure, enabled the arrest of seven individuals and 6,000 kilograms (13,228 lb) of cocaine hidden in a load of broccoli.[8] Accounting ledgers were seized in related arrests, which allowed the identification of another shipment being sent to Panama hidden in tiles. This information was passed to Panamanian authorities and led to the seizure of 5,100 kilograms (11,244 lb).[60]

In 1993, the US Customs Service struck again at the Cali cartel, this time seizing 5,600 kilograms (12,346 lb) while pursuing Raul Marti, the only remaining member of the defunct Miami cell. It is believed these successive raids forced the cartel to funnel its shipments through Mexico; however, that did not stop the US Customs Service. Three maritime ships were intercepted in 1993, with a total of 17,000 kilograms (37,479 lb).[60]

Miguel Rodríguez Orejuela being escorted by DEA and ICE agents

Between June and July 1995, the remaining six of the seven heads of the cartel were arrested.[14] Gilberto was arrested in his home, and Henry Loaiza-Ceballos, Victor Patiño-Fomeque and Phanor Arizabaleta-Arzayus surrendered to authorities. Jose Santa Cruz Londoño was captured in a restaurant, and a month later, Miguel Rodriguez was apprehended during a raid. It is widely believed that the cartel continued to operate and run trafficking operations from within prison.[22][24][52]

The Rodríguez brothers were extradited in 2006 to the United States and pleaded guilty in Miami, Florida, to charges of conspiracy to import cocaine into the United States. Upon their confession, they agreed to forfeit $2.1 billion in assets. The agreement, however, did not require them to cooperate in other investigations. They were solely responsible for identification of assets stemming from their cocaine trafficking. Colombian officials raided and seized the Drogas la Rebaja pharmacy chain, replacing 50 of its 4,200 workers on the grounds that they were "serving the interests of the Cali Cartel".[24][61]