Cali Cartel

• 1. Introduction

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  Between 1993 and 1995, the Cali Cartel was cited as controlling over 80% of the world's cocaine market. Its home was southern Colombia, around the city of Cali and the Valle del Cauca. By the mid-1990s its leaders presided over a criminal empire that operated on a scale of billions per year. How did a handful of brothers and partners climb to that height? Why did their organization look so unlike its famous rival in Medellín? And what finally brought it down?

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• 2. Gentlemen Of Cali

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  Los Caballeros de Cali, or the Gentlemen of Cali, was the nickname that stuck to the cartel's founders. Gilberto Rodríguez Orejuela, his brother Miguel and José Santacruz Londoño all came from a higher social background than most traffickers of the time. The nickname recognized that polish.

  The group's roots were far less genteel. It first assembled as a ring of kidnappers called Las Chemas, led by Luis Fernando Tamayo García. Among its targets were two Swiss citizens, a diplomat named Herman Buff and a student named Zack "Jazz Milis" Martin. The kidnappers reportedly collected $700,000 in ransom, money believed to have helped fund the drug business that followed.

  Before the early 1980s, the assembled group dealt in marijuana. The profit rate was low and the volumes needed to cover costs were huge, so the partners switched to cocaine. In the early 1980s they sent Hélmer Herrera to New York City to set up a distribution center. The timing worked in their favor, because the United States Drug Enforcement Administration, or DEA, then ranked cocaine below heroin in importance.

  In 1988 the founders broke away from Pablo Escobar and his Medellín associates. Herrera joined them, and the cartel came to be run by a four-man executive board. Notable associates included Victor Patiño Fomeque, Henry Loaiza Ceballos, the former guerrilla José Fedor Rey and Phanor Arizabaleta-Arzayus. Herrera, the man once sent to build the New York outpost, now sat at the top table.

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• 3. Cells And Kingpins

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  A 1994 DEA report named Miguel and Gilberto Rodríguez Orejuela the most successful and powerful members of the cartel. Gilberto, nicknamed the "Chess Player" for his strategic mind, oversaw the long-term plans. His younger brother handled daily operations and micromanaged every detail. Together the brothers touched every stage, from production and transportation to wholesale distribution and money laundering.

  Beneath them sat a system of cells, each one reporting to a manager called a celeno. The cells looked independent from the outside. This arrangement set Cali apart from the Medellín Cartel, which was centralized under Pablo Escobar. Each leader ran his own operation as he saw fit. There were five major trafficking groups, and they cooperated on jobs such as shipping to the United States and laundering money when their interests lined up.

  José "Chepe" Santacruz Londoño was one of the more violent kingpins, and his talent was international transport. He built a vast network to move cocaine from Colombia to its destination, most often the United States. His center of US operations was in New York, where the DEA seized two cocaine conversion laboratories in June 1992.

  The Urdinola brothers were possibly the most violent of all, and some estimates say they murdered over 100 people in Colombia. They distributed cocaine from Los Angeles to Miami to New York City. They also moved into Colombian heroin, a product most of the other groups avoided. Raul and Luis Grajales, cousins by marriage, were a careful pair who tried to look legitimate. They worked Western Europe, routing cocaine through Eastern Europe and the old Soviet countries.

  Then DEA administrator Robert C. Bonner called the cartel "the most powerful criminal organization in the world. No drug organization rivals them today or perhaps any time in history." Thomas Constantine called it "the biggest, most powerful crime syndicate we've ever known." Their reputation rested on how cocaine physically moved, and that story begins outside Colombia.

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• 4. Routes And Refineries

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  Peru and Bolivia became the new homes of the cartel's refining work, which it pulled out of Colombia. The group also pioneered trafficking routes through Panama. It diversified into opium and was reported to have brought in a Japanese chemist to help with refining.

  Venezuelan General Ramon Guillen Davila led the National Guard unit meant to stop cocaine shipments. He was also the CIA's most trusted narcotics asset in Venezuela. He worked with Mark McFarlin and Jim Campbell. United States authorities later charged him with smuggling 22 tons of Cali cocaine between 1987 and 1991, in a case known as Operation North.

  Heroin remains a point of debate. Thomas Constantine told the United States Congress that "Cali would be the dominant group in trafficking South American heroin due to their access to the opium-growing areas of Colombia." It is believed the cartel's leaders stayed out of the heroin trade. Close associates such as Ivan Urdinola-Grajales were involved, and they cooperated with heroin distribution centers.

  Gilberto made a trip to Spain in the mid-1980s, and Europe soon became a major market. The cartel built a working relationship with tobacco smugglers from Galicia. It also formed a strategic alliance with the powerful Camorra. Cali supplied the cocaine and the Camorra distributed it across Europe. The cartel was said to be directly responsible for the growth of the European cocaine market, and to control 80% of it.

  United States agencies kept pushing back. In 1991 alone, law enforcement seized 67 tons of cocaine, and 75% of it came from Cali. A drug-sniffing dog at the Miami seaport helped catch a shipment hidden inside concrete posts, which led to 12,000 kilograms seized and began Operation Cornerstone. A wiretap in 1992 led to seven arrests and 6,000 kilograms of cocaine hidden in a load of broccoli. These raids are believed to have forced the cartel to funnel shipments through Mexico, yet three ships were still intercepted in 1993 carrying 17,000 kilograms.

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• 5. Laundering An Empire

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  In 1994 the cartel was believed to be grossing $5 billion a year from the United States alone. That much cash needed a home. The cartel poured money into legitimate businesses and front companies to mask where it came from.

  Gilberto Rodríguez Orejuela secured the chairmanship of the board of Banco de Trabajadores. The bank was believed to have laundered funds for the Cali Cartel and for Pablo Escobar's Medellín Cartel. Through their link to Gilberto, cartel members could overdraft accounts and take out loans without repaying them.

  Gilberto also founded the First InterAmericas Bank, operating out of Panama. In an interview with Time, he admitted that money had been laundered through it. He insisted the process was "in accordance with Panamanian law." That laundering is what drew the attention of United States authorities to him. Separately, it has been alleged that Semion Mogilevich instructed Natasha Kagalovsky to wire Cali funds from Bank of New York accounts through Brazilian banks to offshore shell companies.

  Gilberto started the Grupo Radial Colombiano in 1979, a network of over 30 radio stations. He also owned a pharmacy chain called Drogas la Rebaja. At its height it had over 400 stores in 28 cities and employed 4,200 people. Its value was estimated at $216 million.

  Those pharmacies made a target. From January 1988 to the 4th of May 1990, Escobar and the Medellín Cartel carried out 85 bombings against the chain, which left 27 people dead.

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• 6. Fear And Discipline

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  Only operatives with family in Colombia were allowed to handle jobs that spanned both Cali and United States sites. That rule kept relatives within the cartel's reach. Those relatives served as insurance that no one would help government officials or refuse to pay for product received. Political violence was largely discounted, because the threat of it usually sufficed. The cartel is believed to have often killed junior members who made gross errors.

  In his book End of Millennium, Manuel Castells states that the cartel took part in the social cleansing of hundreds of people called desechables, or "discardables." They included prostitutes, street children, petty thieves, homosexuals and the homeless. Along with some locals, the cartel formed groups called grupos de limpieza social, or "social cleansing groups." Victims were often left with signs reading "Cali limpia, Cali linda," meaning "clean Cali, beautiful Cali."

  Many of the bodies were thrown into the Cauca River, which came to be called the "River of Death." The municipality of Marsella in Risaralda was eventually bankrupted by the cost of recovering corpses and performing autopsies.

  In 1992 the guerrilla group FARC kidnapped Christina Santa Cruz, the daughter of José Santacruz Londoño, and demanded a ransom of $10 million. The cartel answered by kidnapping 20 or more members of the Colombian Communist Party, Patriotic Union and the United Workers Union. It also took the sister of Pablo Catatumbo, a representative of the Simón Bolívar Guerrilla Coordinating Board. After talks, Christina and the sister were released. What happened to the other hostages is unknown.

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• 7. Partners Turned Rivals

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  In 1981 the guerrilla group M-19 kidnapped Marta Nieves Ochoa, sister of the Medellín Cartel's Ochoa brothers Jorge, Fabio and Juan David. M-19 demanded a ransom of $15 million, and the demand was rejected. The Medellín and Cali cartels and associated traffickers instead formed Muerte a Secuestradores, or "Death to Kidnappers," known as MAS. Traffickers gave money, rewards, equipment and manpower. Leaflets announcing the group were dropped over a football pitch in Cali.

  MAS captured and tortured M-19 members. Within three days, Marta Nieves was released. The group kept operating, and hundreds of killings are attributed to it.

  The partnership then reached into the market itself. The two cartels split the major United States distribution points. Cali took New York City, Medellín took South Florida and Miami, and Los Angeles was left open. They are also believed to have agreed to stabilize prices, production and shipments. But by 1983-84 the alliance was crumbling, because the routes and bribes that one cartel set up could easily be copied by competitors. By 1987 the cooperation was gone. The Medellín figure Rodríguez Gacha tried to move into the New York market that Cali had been given. The 1986 arrest of Jorge Ochoa at a police roadblock also looked suspicious to Medellín, which blamed Cali in part.

  Jorge Ochoa was a high-ranking Medellín financier who co-owned the Panamanian First InterAmericas Bank. United States officials cited the bank as a laundering operation that let both cartels move large sums. Only diplomatic pressure on Panama's dictator Manuel Noriega allowed the United States to end the bank's use as a front.

  As Pablo Escobar's narco-terror war against the Colombian government escalated, the Medellín Cartel weakened and Cali grew stronger. Cali then founded Los Pepes, short for Perseguidos por Pablo Escobar, or "People Persecuted by Pablo Escobar." Los Pepes is believed to have passed information to the Search Bloc, a joint police and army unit created to track Medellín leaders. In return it received help from the United States unit Delta Force, through its links to the Search Bloc. Hélmer Herrera is believed to have been a founding member. A hired gunman once opened up with a machine gun on the crowd at a sports event where Herrera was sitting. He killed 19 people but missed Herrera.

  The cartel also hired Jorge Salcedo, a civil engineer in Colombia's military. They had heard that he had once recruited a group of mercenaries for an operation sanctioned by the military against left-wing guerrillas. That group was made up of 12 former special operations soldiers, including men from the British Special Air Service. Salcedo felt it was his patriotic duty and accepted. The cartel housed, fed and armed the mercenaries, and trained them for months to attack Escobar at his Hacienda Nápoles compound.

  They planned to arrive in two heavily armed Hughes 500 helicopters painted to look like police aircraft, to strike at dawn. One helicopter crashed into a mountainside minutes from the compound, and the pilot died. The mission was aborted, and the team had to carry out a rescue up the dense mountainside.

  A second plot targeted Escobar in prison. The plan was to bomb the prison from an A-37 Dragonfly, a surplus ground-attack jet in private ownership. A Salvadoran general illegally sold the cartel four 500-pound bombs for about half a million dollars. Salcedo flew to El Salvador to oversee the pickup. The civilian jet that arrived was a small executive jet, and loading took over 20 minutes while a crowd gathered. Only three bombs fit in the cabin, and Salcedo abandoned the fourth. The botched pickup was all over the news the next morning, and arrests followed. The cartel dropped the air bombing plot.

  By December 1993 Escobar was dead, and Los Pepes had been responsible for the deaths or executions of over 60 associates or members of the Medellín Cartel. His death led to the dismantling of the Medellín Cartel and the rise of Cali.

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• 8. Eyes Everywhere

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  A 1995 raid on cartel offices revealed that Cali had been monitoring every phone call in and out of Bogotá and Cali. That included calls to and from the United States Embassy in Bogotá and the Ministry of Defense. A laptop let the cartel listen in and check lines for wiretaps. Officials found it but could not decrypt many of the files because of sophisticated encryption.

  The cartel was believed to have a person inside the phone company. Londoño was able to recognize a tap placed directly at the phone company rather than at his home. His lawyer then sent an official notice asking whether the tap was legal and requesting the warrant, if one existed.

  A reported 5,000 taxi drivers were on the cartel's payroll. They told it who was arriving in the city, when, and where they were staying. In 1991, according to Time, DEA and US Customs Service agents were watching a shipment being offloaded in Miami. They later learned that Cali had been surveilling them at the same moment.

  Jorge Salcedo was put in charge of the cartel's intelligence and later guarded Miguel. He built a large hidden radio network across the city so members could communicate wherever they were. The cartel also had many people inside law enforcement, including a high-ranking member of the Bloque de Búsqueda, the search block hunting its top leaders. When officers cornered Miguel in an apartment, two DEA agents were among them, searching for the secret compartment where he hid. They failed and had to leave, keeping a perimeter around the building. The double agent hid Miguel in his own car and drove away without trouble.

  Salcedo could not leave. The Colombian government now labeled him a criminal working for Cali, and his employers would never let him go. He settled into managing security for the Orejuela family. Then he was forced to watch the execution of four Panamanians, and was told to organize the murder of Guillermo Pallomari, the cartel's own accountant. His choice was to kill or risk being killed with his family. He contacted the United States Central Intelligence Agency and became an informant, which proved to be the death blow to the cartel. He was later credited with helping pinpoint where Miguel was hiding. For his service, Salcedo and his extended family were relocated to the United States, and he received rewards of about $1.7 million.

  Between June and July 1995, the remaining six of the seven heads of the cartel were arrested. Gilberto was taken at his home. Henry Loaiza-Ceballos, Victor Patiño-Fomeque and Phanor Arizabaleta-Arzayus surrendered. José Santa Cruz Londoño was captured in a restaurant. A month later Miguel Rodríguez was apprehended in a raid.

  In 2006 the Rodríguez brothers were extradited to the United States. They pleaded guilty in Miami, Florida, to conspiracy to import cocaine, and agreed to forfeit $2.1 billion in assets. The deal did not require them to cooperate in other investigations. Colombian officials also raided and seized the Drogas la Rebaja pharmacy chain, replacing 50 of its workers on the grounds that they were "serving the interests of the Cali Cartel."

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