This is a source for analysis, interviews, and commentary on security in Latin America. Herein you will find rumors, the results of off the record interviews, and information you'll not find in international or United States news media.
I'm in Portugal this week, so I've been curious to find out more from local contacts (here and in Spain) about the demand for cocaine in the EU.
Spain, by the way, is by far at the top of the countries over here that report high levels of cocaine use.
This morning, I saw a piece from La Semana, which reported on this item from the BBC which states that the price for cocaine is higher in EU, while the quality is less pure.
According to the article, the price for a kilo of cocaine (likely not a pure kilo) in the UK was US$59,500 in 2008, and is US$68,700 in May 2009. Retail prices, the BBC article mentioned, have remained the same. So let's just focus on wholesale...
We've seen that kind of statement before in the US (here is a summary), usually from the DEA or the Drug Czar's office (both obviously biased sources). And we've seen the opposite, from the same source, but over here in Europe, I wonder about the elasticity of demand for cocaine since the EU is a relatively untapped market with a number of independent actors at the wholesale and retail level.
When considering price elasticity for anything, there are some key determinants at play, such as necessity and duration.
Necessity is probably pretty high, as addiction dictates that users will continue to "need" coke, even as the price goes up. This would point to a more inelastic demand curve.
The duration of this price hike is likely short. pure coke is always in storage somewhere, so the groups shipping the product to the EU can pump up the volume when necessary, which would drive down price (but never too low) and improve quality (never too high). If the duration is short, we again have an ineslastic demand curve.
Now, my econ 101 teacher would probably tell me that we shouldn't think about price elasticity for illegal products because the black market does not play by the rules. For me, it's an interesting exercise b/c I'm interested in seeing how long the cocaine market will continue to grow in Europe. How deep will it go? That is, how many countries, cities, etc. will begin to report on cocaine addiction and the resulting health problems.
Looking at how the EU deal with this growing social health problem will be an interesting point of comparison to the US. On one side of the Atlantic (the US) we've seen supply-side interdiction efforts and a heavy hand towards interdiction, with little effort put into prevention and harm reduction. What will the EU do?
I was on the FBI's San Antonio press releases page for 2009, and I was struck by the five stories I saw about Customs and Border Patrol officers or inspectors in Texas who have either plead guilty or have been convicted of bribery, corruption, smuggling, etc.
Doesn't that seem like a lot?
I'll also share a story I came across some time ago about another Border Patrol Agent who fell on the wrong side of the law:
BROWNSVILLE — A former Border Patrol agent was sentenced Wednesday to 14 years in federal prison for helping drug smugglers move a 44-pound cocaine load.
Prosecutors showed that 30-year-old Leonel Morales, of Zapata County, took $9,000 in exchange for telling drug smugglers how to avoid sensors and drawing a map of the best routes for shepherding drugs through the county. He also bragged he could keep other Border Patrol agents out of the way.
Morales made the drug smuggling deal during the summer of 2008, unaware he was being recorded. He pleaded guilty to bribery in January.
The sentencing judge in Laredo also ordered him to pay an $11,000 fine.
FBI press release on Morales here.
The DEA successfully extradited the first Colombian drug trafficker from Sierra Leon, a country considered to be at the top of the list of West African countries where Colombians, Venezuelans, and others are deeply involved in moving drugs from South America into Europe.
You don't know who Geraldo Quintana Pérez is because he did a good job keeping a low profile, at least for a while. (picture shows his plane and load of coke.)
He arrived in Sierra Leon about two years ago, but when he made an unauthorized landing in Freetown, Sierra Leon on 13 July, 2008, it was his last.
His plane had left Venezuela, making stops in Trinidad and Tobago, Grenada, Barbados, and Santa Lucia before flying across the Atlantic to Sierra Leon.
He, along with his partner, was busted with 600 kilos of coke (worth about 125 million Euros), and two rifles, an AK-47, and an AK-48
From the DEA press release:
QUINTANA-PEREZ, 51, and PEREZ, 30, were arrested in Freetown, Sierra Leone on July 13, 2008 on Sierra Leonean charges, following the seizure of approximately 600 kilograms of cocaine. Upon their arrest in Sierra Leone, the defendants were tried there on drug trafficking charges, of which they were convicted on April 20, 2009. Thereafter, the Government of Sierra Leone transferred the defendants to American custody.
More details here, in Spanish.
Congratulations.
Now, will we see any extraditions from Guinea-Bissau?
Arrests and seizures in Mexico are part of my daily news diet, but when police capture an old-school member of the Gulf Cartel, it's something I have to post.
Gregiorio Sauceda Gamboa, aka "El Goyo," was an original member of the Gulf Cartel as it was molded under the leadership of Osiel Cardenas, dating back to 1996 (pictured in the middle).
He was a heavy hitter, often asked to perform some of the more risky assignments hunting down members of the El Chapo's organization for kidnap, torture, and murder. This guy was a former investigative police officer, and likely had close contacts with many police in Tamaulipas, where he was arrested in Matamoros, with his wife, while sitting in a stash house stocked with thousands of rounds of ammunition, a number of long guns, and a M72A3 rocket launcher.
At different times in his narco career, El Goyo ran operations in Nuevo Laredo, Reynosa, and Matamoros.
According to a Houston Chronicle article, El Goyo moved an averaged 10 tons of cocaine and 30 tons of marijuana a month at the height of his drug trafficking activity, although recently, he's been "less" involved.
He'll probably be extradited to the US, and we'll never hear from him again.
When I see news about the FARC killing eight soldiers in Colombia, near the Venezuelan border, I'm reminded that there is still some fight in this old revolutionary dog.
The Colombian government argues that the FARC is on the decline, with high desertion rates, and a declining revenue base.
And it's true. The FARC today is not what it was five years ago, or three years ago. I think we're looking at the "middle of the end" for the FARC.
But I have to consider the possibility that the FARC has, for years now, made concerted efforts to move beyond Colombian borders into Venezuela and Ecuador. Some time ago, we prepared a piece on the FARC's presence outside of Colombia. Venezuela is certainly a welcoming environment.
Given the country's well established role as a drug transit zone, and the ongoing allegations that at least a section of the Venezuelan National Guard is a drug smuggling organization (called the Sun Cartel by DEA agents in Venezuela before they got kicked out the first time), it is certainly a great place to operate compared to Colombia.
In Ecuador, the president is not a vocal supporter, but he is willing to look the other way, and allow the FARC to operate just inside Ecuador. Even if he isn't willing to let the FARC play on Ecuadorian soil, Correa has limited political currency, and I'm not sure he wants to spend it on making a loud and expensive campaign against the FARC.
Back to those eight soldiers. They fell under attack from the 49th front of the FARC, according to La Semana. The 49th front is known to operate on both sides of the border between Venezuela and Colombia. It is also considered the Caribbean front of the FARC, operating around the Guajira peninsula.
It will be interesting to see if Chavez answers Uribe's call to hunt down these FARC soldiers. I doubt it.
(image from colombiareports.com)
Just a quick note here to share the Forbes.com "Most Dangerous Cities" article, which made note that ten cities on the list overlap with Mexican organized criminal activity:
Though nationwide crime was down 3.5% year over year in the first six months of 2008, the cities atop our list illustrate a disturbing trend: All 10 of the most dangerous cities were among those identified by the Department of Justice as transit points for Mexican drug cartels.
The whole article is here.
1) Colombian President Alvaro Uribe said that if the FARC keeps quiet and avoids any skirmishes with anyone for "three or four" months, then he will consider peace talks.
Up until now, Uribe has been staunchly against talking to the FARC. History has shown that the FARC is not always the most honest negotiators. But that was when the rebel army was much stronger. In its weakened state, peace might not be a bad idea.
Semana article here.
2) One of the conclusions of the 20th annual meeting of Interpol (held in Chile this year) was that Al-Qaeda (or any terrorist organization, really) could infiltrate Latin America because of lenient or in some cases (Ecuador and Nicaragua) non-existent immigration controls.
Of the 150 million or so annual visits to Latin America from other countries around the world, only 50 million passports are scanned, according to Ronald Noble, Interpol Secretary General.
Interpol is specifically worried about Central America.
3) Texas authorities seized some $120,000, gun parts, and "grenades" from a car headed south on Interstate-35, according to the San Antonio News.
Obviously the grenades are interesting. My sources mostly agree that grenades used in Mexico come from Guatemala. To sell grenades in the US, a merchant must operate a class two license, I believe, which is a very strict legal regime.
The article notes these grenades are "improvised".
4) A 34 year-old Customs agent was arrested this past Friday (April, 3rd) on charges that he arranged to "wave immigrant and drug smugglers through his inspection booth for money." If convicted he could serve up to 35 years in prison - ouch!
As a Sheriff in southern Arizona recently told me, this is a "sin of omission." To break the law, these men don't actually do anything. It's what they don't do - i.e. stop a car stuffed with coke - that breaks the law. To wave the right car and receive thousands a week for doing so, with little chance of apprehension, so long you don't flash the money or act out, is a tough thing to turn down. I often wonder about this kind of "soft" corruption, and whether or not the border is littered with these guys...
5) Not surprisingly, Chihuahua State Governor, Jose Reyes Baeza, was attacked on 22 February. One of his bodyguards was killed during the attack, and two were wounded. Two of the men allegedly responsible were arrested in the city of Chihuahua on 31 March. They were caught with AR-15 rifles stolen from the wounded bodyguards.
This news only came out in English on 5 April... That in itself is interesting.
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We've seen that kind of statement before in the US (here is a summary), usually from the DEA or the Drug Czar's office (both obviously biased sources). And we've seen the opposite, from the same source, but over here in Europe, I wonder about the elasticity of demand for cocaine since the EU is a relatively untapped market with a number of independent actors at the wholesale and retail level.
