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Brief Void From Demise of Pablo Escobar and Medellin Cartel Being Filled by Cali Cartel


July 1994

Six months after the reported demise of the Medellin drug cartel, which used to dominate the world cocaine market, the Cali cartel, its rival for at least eight years, has begun to aggressively expand its drug marketing. (Douglas Farah, "Rid of Rivals, Flush With Cash, Colombian Cocaine Cartel Boosts Business" The Washington Post, 6/16/94 A27).

Since Colombian troops shot and killed Pablo Escobar, the last surviving, unimprisoned leader of the Medellin cartel, the Cali cartel has successfully increased their drug smuggling operations. U.S. and Colombian officials have acknowledged that the flow of cocaine to the U.S. remains at the same levels, and Colombian cocaine and heroin traffic to Europe is rising. Also, the prices and purity of cocaine in the U.S. remain at the same levels as before the Medellin cartel was eliminated.

"One veteran U.S. official said that law enforcement agencies have improved interdiction but the cartel's 'ability to produce far exceeds our ability to interdict.'" The official also said that "We don't see indicators that we're making any substantial progress" and "we have no noticeable impact on their ability to carry out successful business."

Officials say that the Cali cartel has been able to expand operations because they have the best intelligence in Colombia. "Every law enforcement operation against them has been compromised" reported a U.S. law enforcement agent. "[I]t is damn near impossible for anything of significance to happen in Cali without their knowing about it" said a U.S. law enforcement official.

The Cali traffickers, who for eight years fought the Medellin cartel for control of the drug trade, now do business with former Escobar lieutenants. However, the Cali cartel is also forcing Medellin traffickers to pay reparations for the violent conflicts of the past. More disturbing, according to U.S. officials, is that the Cali cartel is forcing imprisoned Medellin members to confess to crimes committed by Cali members, and thus undermining prosecutors' cases.

An international law enforcement specialist said the organization is expanding into production of other drugs such as "liquid marijuana," heroin, and synthetic drugs.

"John J. Coleman, the DEA assistant administrator for operations, said the Cali organizations are 'masters of marketing'" and that "they are moving into to the European market aggressively."

In Europe, said Coleman, "they will use the same strategy they used in the U.S., underselling the competition to get as large a market share as possible and cut costs of distribution expenses by controlling every part of the trade."

The Cali leaders feel safer in Colombia and so they are moving more of their wealth back to the country. To avoid absorbing costs of up to 25% for laundering and transporting cash, the Cartel imports huge quantities of products such as cars, textiles, refrigerators, TVs, VCRs, and agricultural products and sells them cheaply.

The cartel's enormous wealth has reportedly enabled it to use high-tech alternatives for smuggling their drugs. U.S. agents say that the cartel has used semi-submersible boats, almost like submarines, that carry one ton drug cargos, ride low in the water and are almost invisible to radar.

[Editor's Note -- The criminal cooperatives that operate in Cali and Medellin are not strong cartels in the economic sense. Strong cartels keep prices high and exclude competitors, and certainly the Medellin cartel failed in both objectives. The term "cocaine cartel" was probably coined by a journalist or a DEA public relations officer because the term is alliterative, it drew associations with great power and with the "evil" oil cartel that disrupted American gasoline distribution twenty years ago, and it sounded ominous.]