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4: The Pain and the Glory: Phases Two and Three in the Evolution of the INT

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According to the Stopford and Wells model of TNC development, rephrased by McRae and Ackerman,(1) the INT's organization follows a six-stage expansion process. Phase One was dominated by small businesses concentrating on a single type of activity, smuggling. Market share increased by acquiring or eliminating competition in the home market; I.e., the numerous turf wars. Globalization of the product, illegal drugs, began with diversification of products, eg., crack and support services.

The chief characteristic of Phase Two: The Golden Years (1981-1986) was an intense "corporatizing" of the INT in Colombia. During this period transportation and warehousing in foreign countries were established. The INT invested heavily in foreign facilities [Panama] for production and storage. Money laundering became a major part of diversification in both related and unrelated businesses. This included creation and acquisition of "support" organizations such as banking and accounting as well as unrelated diversification for investing excess profits and reducing investment risk.

Changing from the decentralized patterns dominating Phase One is consistent with the third dimension of an organizational pattern Bartlett and Ghoshal describes as a heterarchy.(2) The definition of heterarchy is dually based in 1) the control mechanisms employed or as a network organization or 2) in the structural relationships of the components. The third dimension is one of development and diffusion of knowledge. Knowledge develops at each operating unit. A firm seeking to develop global economies of scale will attempt to develop knowledge centrally and retain it at the center. Such a pattern, however, lacks the ability to integrate the specific and often complementary competencies of each national unit. The emerging trend, as we shall see in Phase Two, is toward jointly developed knowledge shared among the units.

Continued network existence requires, according to Miles and Snow,(3) two characteristics central to network organizations: 1)essential relationships are external and viable to all parties and 2) relationships among the parties are voluntary and reflect explicit commitments by all parties. The nature of the relationship, in the case of the Colombian cocaine cartels because of illegality of the enterprise, remains partially hidden fostering a sense of mistrust by all parties. Since the degree of voluntary affiliation may reflect coercion, some parties may harbor a sense of being forced to join a network that may not maximize their profits. As the cartels began relying more on coercion to meet its internal challenges, the Colombian state began responding with increasingly repressive measures and Phase Three signals cracks in the firmament of narcotrafficking widening.

Phase Two: The Golden Years, 1981-1986

On April 18, 1981, the top 200 or so narcotraficantes met at the Ochoa family ranch.(4) The meeting marked a turning point in organizing the INT in Colombia and marked the formalized beginning of the Medellín cartel. Although the old Antioqueños was criticized as a good old boys network, they did not take such criticism seriously until it became evident the INT had the potential to generate profits beyond any previously imagined. Realization of this potential, however, required a change in organization and strategy. The theme of the meeting was expansion. Better ways to move and distribute the cocaine became necessary as the cocaine inventory became backlogged.(5)

Lehder continued his transportation operations in the Bahamas but increasingly became his own best customer. His inherent flamboyant personality combined with increased cocaine use produced behavior that often put other traffickers at risk and creating difficult relations with the Ochoas and Escobar.

Ochoa began "corporatizing" dispersed portions of the network. He hired an American engineer to establish a long-range navigational and communications system at Acandi, a few miles from Panama on Colombia's northwestern edge.(6) Ochoa also began arranging his own deals with pilots besides the loads Lehder was running out of the Bahamas.(7) The results were immediately apparent. During the first months after the summit at the Ochoa family's ranch, Hacienda Veracruz, a single Ochoa distributor coordinated cocaine flights totaling nineteen tons.(8) This was more than shipped out of Norman's Cay for the entire previous year. This is consistent with the third dimension of heterarchy where developing and retaining knowledge centrally begins. What will become evident, however, is that the knowledge shared among the units will occur at the differing strata level identified by Krauthausen and Sarmiento. Knowledge will be shared horizontally among the oligopolic sector but not vertically with the competitive sectors.

Although the narcotrafficantes knew each other socially and engaged in occasional business deals together, they had not yet coalesced into a highly structured organization. A catalytic event, the kidnaping of Marta Nieves Ochoa, daughter of Fabio Ochoa and sister of Jorge Luis Ochoa, drew the various traffickers together. Kidnaped by the M-19 guerrilla group, Marta was held for a ransom totaling $12-$19 million dollars.(9)

Kidnapings in Colombia are endemic and a favored method of acquiring funds by the various guerrilla groups. Jorge Luis Ochoa called together the top 223 narcotraficantes together to form MAS (Muerte a Secuestadores or Death to the Kidnappers). MAS issued a manifesto refusing to bow to kidnaping demands of guerrillas. Offering rewards for information leading to the kidnappers, MAS "guaranteed immediate retribution" to the kidnappers. It also represents the first steps toward building a common INT policy. Following the highly publicized deaths of some guerrilla leaders, Marta Nieves Ochoa was released on February 17, 1982.

Marta's release reveals another facet in restructuring the INT. The Ochoas paid a ransom of approximately $535,000 according to police reports. The negotiations took place in Panama over a period of several weeks and were negotiated by Panama's chief of military intelligence, Colonel Manuel Antonio Noriega.(10) Court papers filed later in Miami describe a deal negotiated between Noriega and Escobar to transship cocaine loads through Panama for $100,000 per load.

Amid the political issue of hot money, Belisario Betancur was elected president in 1982. According to Rice, every return flight to Colombia of the Air America(11) drug pilots carried a half dozen duffel bags each carrying approximately $1 million dollars.(12)

Smaller traffickers had always piggybacked onto Escobar and Ochoa's loads. Now they faced fewer choices when the bosses became unhappy if the smaller traffickers tried to operate independently. This was another effort by the Ochoas, Escobar and a few others to control the criminal cocaine market from a buyers and sellers position. They would deliver only as much cocaine as needed to keep the price and profit margin high.(13)

As business became more efficient and streamlined, the narcotraficantes turned their sights elsewhere. Carlos Lehder decided to take advantage of Betancur's general amnesty proposal and repatriate most of his monies to Colombia, returning there to live. Lehder's Latin Nationalist Movement (MLN), in 1984, won 12 percent of the votes of the electorate amid the worst coffee-harvesting year Quindío had experienced.(14) These first political efforts by Lehder were not initially perceived as serious moves to gain political power by many scholars. Narcotrafficking was still considered solely an economic enterprise with few political aspirations. As further examination will reveal, this was a seriously flawed analysis of the INT phenomenon.

Meanwhile Pablo Escobar promoted his image as a paisa Robin Hood, building housing for lower income families in Envigado as well as soccer fields.(15) These efforts proved successful in enlarging and maintaining his constituency. Moreover this was the year that Escobar was elected to the Colombian congress as an alternate representative or suplente from Envigado.(16) During this year, the coldness with which Escobar acted as the cartels enforcer would become clearer. He ordered assassinated judges who had convicted him years earlier on smuggling charges and paid to have his police records torched in the Palace of Justice.(17)

Finding more efficient ways to launder enormous sums of money occupied the cocaine cartels in 1983. According to Lee, a cartel money launderer admitted laundering assets worth between $10-$11 billion dollars for the cartels during 1983.(18) By the beginning of 1984, the price for a kilo of cocaine had dropped from $50,000 per kilo in 1981 to $25,000 per kilo.(19) The cartel ordered its distributors to sit on inventory until prices went back up. A new product, crack, a derivative of cocaine processing, was introduced and sold in rocks for $10-$20 each. Although the price per kilo of cocaine dropped, holding the supply constant while introducing crack kept profits up. The Air America drug pilots reported ferrying back between $6-$8 million dollars per each southbound flight and this was not sufficient to meet the cartels' needs.(20)

Nineteen eighty-four was a pivotal year for law-enforcement officials as well when the cocaine processing lab, Tranquilandia, was raided March of that year. The complex of labs making up Tranquilandia was a fully integrated enterprise that employed over 100 people fed, housed, and clothed by the owners of the lab complex. Confiscated records reveal the airport at the lab received approximately 15.539 metric tons of cocaine paste between December 15, 1983 and February 2, 1984.(21) By the time law enforcement officers completed destruction of the Tranquilandia complex, 13.8 metric tons of cocaine had been burned. Approximately 11,800 drums of precursor chemicals (among them ether and acetone)were destroyed from approximately 14 labs and encampments. Seven airplanes were confiscated.(22)

More important, the cooperative effort between U.S. and Colombian law enforcement officers signaled an end to the relatively benign stance taken by the Colombian state during Phase One of the INT. This change, however, did not occur overnight. Just as consolidation of the cartels required a number of years to achieve, so did understanding the enormity of the problem by Colombia and the U.S.require several years.

In 1981, the U.S. closed its consulate in Medellín because it feared for the personal safety of its members.(23) By mid-1981, the U.S. and Colombia ratified a bilateral extradition treaty signed in 1979.(24) What was important and different about this extradition treaty was a change in the wording. Article eight, Paragraph 1 states "extradition of nationals of one country to the other country 'will be granted' even 'where the offense involves acts taking place in the territory of both states with the intent that the offense be consummated in the requesting state.'"(25) Thus a Colombian drug trafficker, who had never left Colombia, could be extradited to the United States if it could be shown that he was engaged in a criminal conspiracy aimed at the U.S. This would include sending a load of drugs to the U.S. After his election in 1982, Betancur delayed the extradition request for Carlos Lehder for a long while. On September 2, 1983, the Colombian Supreme Court issued a finding favorable to the U.S. for Lehder's extradition.(26)

Before the Colombian Supreme Court's ruling, however, Betancur had appointed Liberal Senator Rodrigo Lara Bonilla justice minister. Lara Bonilla, though not of the President's Conservative party, had a reputation for being that rare thing, an honest politician with a reformist bent and a knack for finding "hot money". Working with Colonel Jaime Ramirez of Colombia's equivalent to the FBI, the Department of Administrative Security (DAS), the Colombian Civil Aeronautics Board canceled flying permits for fifty-seven aircraft, many that were for the charter firm owned by the Ochoas, Pilotos Ejecutivas. That same day, September 8, 1983, an investigative judge reopened a 1976 case charging Pablo Escobar with transporting drugs in Medellín. Broad newspaper coverage accompanied reopening the case. The notoriety forced Senator Alberto Santofimio to drop Escobar from his list of supporters and to ask him publicly to resign from politics.(27)

Escobar refused to resign and kept a low profile while Congress debated whether to revoke his parliamentary immunity. Finally, on February 13, 1984, the courts withdrew an arrest warrant against Escobar. He immediately announced unless the extradition treaty with the U.S. was abrogated he and Lehder would close down their businesses putting 20,000 people out of work. Following the raid on Tranquilandia Escobar wrote an "open letter" to U.S. ambassador to Colombia Lewis Tambs denying involvement in Tranquilandia and denouncing the extradition treaty.(28)

After Lara Bonilla's assassination on April 30, Betancur declared a state of siege and, on May 8, signed the extradition order for Carlos Lehder.(29) Under the state of siege, narcotraficantes were tried in military rather than civilian courts and broad ranging powers for search, seizure and arrest granted the police. The Escobars and Ochoas fled to Panama where they remained under the protection of General Manuel Noriega. Noriega was paid well by the traffickers who soon began scouting around for a way to negotiate their return to Colombia.

Colombian ex-president Alfonso Lopez Michelsen agreed to meet with the traffickers to hear their requests. This began a two-track recovery project by the traffickers. One the one hand they hoped to have the slate wiped clean and return to Colombia. On the other hand they were building up a large lab complex in the Daríen jungle in Panama. The latter fell apart when the lab complex was raided on May 21, 1984, by a joint effort of the Panamanian Defense Forces and the U.S.(30) Although Noriega was out of the country at the time of the raid and denied any knowledge of it, the traffickers were mistrustful of their host who now urged them to find some solution to their problems. They paid Noriega's right-hand man, Colonel Julian Borbua Melo, between four and five million dollars to " . . . facilitate the building and delivery of material's by Noriega's and their own pilots and the protection of the Daríen facility."(31) Escobar, frustrated at his inability to even reach Noriega for a face to face confrontation, threatened Noriega's assassination and went as far as to publicize the pending contract.(32)

Colombian attorney general Carlos Jimenez Gomez was authorized to meet with the traffickers. In a message to President Betancur, the traffickers offered to dismantle their enterprises, repatriate their monies to Colombia and stay out of politics. In return they wanted the state of siege lifted, the extradition procedure restructured and for the extradition treaty not applied for offenses committed before the date of the letter.(33) Unimpressed Betancur appointed another hard-liner, Enrique Parejo Gonzalez. By September the U.S. initiated extradition proceedings against 60 Colombians and by November Colombia had thirteen of the fugitives in jail where five extraditions were approved and two signed by midmonth.(34) Full scale spraying of the Atlantic Coast marijuana fields and the July assassination by sicarios of Supreme Court Justice Hernando Baquero Borda, the last of the courts' old-guard pro-extradition hardliners,(35) began the almost immediate collapse of extradition proceedings.

By September, however, all but the capos of the INT were back in Medellín. By winter, the capos and their families were occasionally seen in public events in Medellín. If their physical presence was not often seen, their influence was pernicious. Judge Tulio Manuel Castro Gil received bribe offers to drop the indictment against Escobar and new labs and coca fields were rapidly replacing those destroyed.

In November, however, the Medellín leaders and the leader of the Cali cartel, Gilberto Rodriquez Orejuela, were arrested in Spain and their bank accounts frozen. After twenty months of deliberation, six separate court findings, a final appeal by a special panel, and a succession of motions and appeals, the Spanish Audiencia (Spain's version of a national court) denied the United States' request for extradition of the traffickers but granted Colombia's extradition request.(36)

Colombia's extradition request, however, had to do with bull smuggling charges. Ochoa was sentenced to twenty months in prison by a Cartagena customs judge, Fabio Pastrana Hoyes. Pastrana Hoyes immediately suspended the sentence and Ochoa was freed. Later investigations revealed that Pastrana Hoyes had received numerous bribes from the Ochoa family.(37) Judge Carmencita Londoño would not be so fortunate in her investigation of Pablo Escobar for similar charges. Judge Londoño was shot to death in her car shortly after beginning her investigation of Escobar.(38)

Despite President Betancur's crackdown on the traffickers, the Colombian military continued to occupy itself with fighting insurgent guerrillas during this period. This changed with the attack on the Palace of Justice in 1985. Bruce Bagley states that what little evidence is available suggests that military involvement occurs primarily among mid-level regional military commanders who "have actively cooperated with cartel-financed and controlled paramilitary groups . . . in `dirty wars' against leftist guerrillas and their suspected sympathizers."(39)

The M-19 guerrilla group received $5 million and arms from the traffickers to storm the Palace of Justice and burn the extradition records of those about to be brought before the court.(40) Despite the accusations against the military, neither the government nor the military took steps to investigate.

In its February 25th edition, TIME magazine reported that between 100 Colombian air force personnel and 200 national policemen had been discharged because of their involvement in drug-related activities.(41) While no definitive evidence of a systematic collusion between the military and the narcotraficantes exists, there has been a less than conscientious effort on the part of the high military command to "reinforce the controls . . . on the actions of the lower officials and of their troops."(42)

By the beginning of 1986 the dimensions of power possessed by the criminal cocaine cartels had become disturbingly evident in their power to affect Colombian institutions. In 1986 as the crackdown continued, the cartels offered informally to pay off Colombia's foreign debt.(43) On December 12, the Colombian Supreme Court ruled that the U.S.-Colombian extradition pact's enabling legislation was unconstitutional because it had been signed by an interim president and not by the president himself.(44) Thus, the treaty became unusable because of a technicality of enabling legislation.

On December 17, while driving home from his newspaper office, owner and editor of El Espectador, Guillermo Cano Isaza, was killed by a sicario. Cano had used El Espectador in an unrelenting anti-cartel campaign.(45)


Clearly Phase Two represents the consolidation of the differing crime families into a more centralized organization, coinciding with an explosion of profits from principally the cocaine trade. This is consonant with the "strategy drives structure" paradigm of strategic management studies of TNCs. Increased globalization required the adaptation of structural forms within the INT that began with the reconfiguration of assets identified in Phase One. An important consequence of the firm becoming more centrally managed was a resultant loss of flexibility for local operations, a consequence that attained significant importance for the Medellín cartel during Phase Three.

The structural changes in the organization of the INT in turn forced a position change by the Colombian government from the passive, reactive posture it adopted during Phase One to a pro-active posture during Phase Two. An important consequence of Phase Two for Colombian political institutions was a delay in the promised democratization of the post-Front regimes. In the following section, we look at Phase Three, 1987-present.

Phase Three: Cracks in the Firmament, 1987-Present

The life cycle of organizations is that they grow or die. As specialized knowledge flows from the center to the various component parts of the network, a subsidiary is tempted to challenge the parent in some markets. Thus, while the cartels had been previously successful in reducing and absorbing competition, a renewed bout of competition emerged from former network members with knowledge and experience similar to the parent. Emergence of the Amapola cartel, made up of dissident members of the Medellín and Cali cartels, suggests this has begun. The coalescence of the North Atlantic Coast and Pereira cartels to challenge the dominance of the Cali cartel and, to a lesser extent diminishing Medellín cartel, is another example of such challenges.

At first blush, it looked as if the golden years experienced by the cartels during Phase Two could continue. Narcotrafficking flourished. There was no lack of players during a period when a tenuous truce existed between the traffickers. In the face of limited state and international opposition(46), the narcotraficantes became bolder in their challenges to the state's power.

At the beginning of 1987 President Vigilio Barco revealed a list of 130 paramilitary groups. The significance of these revelations lies in Law #48 of 1968 which ratified Decree 3398 of 1965. It states that only the president could issue permits for paramilitary groups, but no president was on record of ever having issued such permits.(47) While the Army was in charge of monitoring such self-defense groups, it was not clear who had been signing permits authorizing their formation nor to which leader/rancher the groups were attached. However, the original purpose of these groups, to aid ranch-owners in the protection of themselves, families, and properties against guerrilla activity in areas where the Colombian state had not sufficiently penetrated, had changed.

In August of 1987, DAS announced it had broken up the murder gang, Los Priscos, charged with holding the contract for the Cano and Baquero murder. This investigation was significant since it represents the first time an investigation focused on how the cartel did its dirty work.(48) Political violence in terms of actual body count exceeded that of Argentina during its "Dirty War" by threefold.(49) A spate of vigilantism in Cali in the name of limpieza, or cleansing, occurred against the marginalized members of society. The exception, however, was the assassination of Raul Echavarria Barrientos, managing editor of Cali's El Occidente newspaper. Echavarria Barrientos had been a staunch supporter of extradition and advocate of the death penalty.(50)

Between February and June the Colombian government and the Colombian judiciary engaged in a war of words over the pending extraditions while the enabling legislation necessary to enact the U.S.-Colombian extradition treaty that had been declared unconstitutional remained unresolved. Finally on June 25, the Supreme Court the Supreme Court ruled President Barco had acted unconstitutionally in re-signing the enabling legislation.(51) The Colombian courts dismissed U.S.-inspired requests for provisional arrests of cartel leaders as unenforceable. Arrest orders for Escobar, Rodríguez Gacha, and Porras in the murder of Guillermo Cano were withdrawn for lack of evidence.(52) Pablo Escobar's indictment for the assassination of Lara Bonilla was dismissed because of improper methods used to obtain evidence.

The perception of the traffickers at this time [and one they sought to reinforce in interviews] was that they had political aspirations only to the extent that it was necessary to protect their businesses. Their personal ideologies tended to be conservative and entrepreneurial. The fallacy of this perception emerged as assassination targets included not, only justices threatening to extradite the traffickers but intellectuals and professors. Dominating the assassinations were those who taught "leftist" studies and criticized the traffickers. The clearest indicator of this shift occurred October 1987 with the assassination of Jaime Pardo Leal. Pardo Leal was a well-liked Marxist professor and presidential candidate of the Unión Patriótica, the political party formed by FARC guerrillas who had laid down their arms.(53) On November 12, Justice Minister and survivor of the Palace of Justice Massacre, Enrique Low Murta(54), charged drug kingpin Gonzalo Rodríguez Gacha with the murder of Pardo Leal through a Prisco-like gang of thugs. Rodríguez Gacha reportedly paid approximately $120,000 to arrange the hit, then hosted a lavish reception for the assassins at his estate in Pacho. While his motives were unclear, Rodríguez Gacha was rumored to have a vendetta with FARC dating back to 1983. It was then the guerrillas invaded one of his ranches and made off with 180 kilos of coca, many weapons and half a million in cash.(55)

In only the way fate can be fickle, Jorge Luis Ochoa was stopped at the El Cerrito tollbooth on November 21. After an unsuccessful attempt to bribe the traffic police, he was arrested and taken to police headquarters. The police booked Ochoa on a warrant from a Cartagena Customs judge who "said Ochoa had broken parole and jumped bail on a twenty-month bull-smuggling conviction."(56) Needless to say, it did not take long for the police to realize whom they had. Ochoa was transferred to the Brigade of Military Institutions while the government figured out what to do with him.

The government decided to hold Ochoa on the bull-smuggling charges to gain time for his extradition to the United States. To underscore the seriousness of the efforts the Colombian government requested and received a six-member legal team from the U.S. Departments of State and Justice in Bogotá. The cartel was also serious. It reacted immediately with legal maneuvers to obtain Ochoa's release. Besides the legal maneuvering, the editor/politician of El Colombiano received intimidating threats. The government decided the extradition could still take place under the so-called Montevideo Convention. Upon the U.S. legal team's departure the case against Ochoa unraveled in the face of intimidation and bribes of justices. On December 30 Ochoa's legal team showed up at La Picota, Bogotá's maximum security prison, and presented a writ for his release. By that time there were no charges pending against Ochoa in Colombia, not even the arrest warrant Low Murta had issued as a preparation for his extradition.

The face of Los Extraditables became more defined in December as they flexed their muscles to prevent Ochoa's extradition to the U.S.(57) Fabio Restrepo Ochoa, Sr. admitted in 1988 to being the godfather of Los Extraditables.(58)

Growing involvement by other actors in 1988 caused the INT to change. The opening salvo of a renewed War of the Cartels began in January when a car bomb exploded outside an apartment project owned by Escobar.(59) Although Guggliotta and Leen dismiss the idea of a war between the cartels, such a direct attack on Escobar suggests the emergence of other significant actors. Moreover, a twelve-count indictment in the United States against Manuel Noriega in Panama further compromised the cartel. As information about their operations was revealed, the need to supervise their monies in Panamanian banks grew.

Guggliotta and Leen suggest, moreover, that nineteen eighty-eight was the year for Rodríguez Gacha as Ochoa fled to Brazil to rest for a bit after his release. Escobar remained in Colombia and continued to focus on the extradition issue. Although Escobar was the cartel leader perceived as more strongly oriented toward vengeance, Rodríguez Gacha displayed his own streak of vengeance.

The intellectual authorship of the kidnaping of Bogotá mayoral candidate and outspoken critic of the INT, Andres Pastrana Gomez, was laid at Rodríguez Gacha' door. He was also charged with the assassination, in January, of Colombian attorney general, Carlos Mauros Hoya.(60) In March he, Escobar, and Fidel Castaño [the North Atlantic coast capo] were declared responsible for the massacre of banana workers at a plantation in the Urabá region of Antioquía.(61) Local military commanders provided names of the "subversives".

In April ten men were machine gunned to death and 15% of villagers of La Mejor Esquina in Córdoba wounded during an Easter festival. Ironically, Fidel Castaño, financed the festival and orchestrated the massacre. Apparently some village residents were members of the EPL guerrilla group and, again, regional military commanders provided the names.

As the INT became a dominant force in Colombia, international pressure increased. In January 1989, the U.S. ended Operation Polarcap in which they arrested Armenian jewelers in Los Angeles. Known as La Mina, they had laundered $1.2 billion dollars for the Medellín cartel during the previous eighteen months. The cartel's liaison was Eduardo Martinez Romero, known as the cartel's "treasurer".(62)

In June Escobar was identified as the connection for a band of Cuban smugglers. The smugglers had run a successful operation for more than two years. The Cuban government accused army captain Jorge Martinez of traveling to Medellín in 1988 to meet with Escobar. At his meeting with Escobar, details using Cuba as a waystation for cocaine destined for the United States were completed.

Efforts to persuade Panamanian leader Manuel Noriega to step down and to extradite him to the U.S. were generating increased repression in Panama by Noriega. The U.S. also increased pressure on Panama's elite. If the cartel leaders had not heard U.S. sabers rattling and understood their meaning in a world beyond the INT, Fidel Castro did. Having no illusions about his role as the thorn in Uncle Sam's side and the swiftness he believed would be used to launch an attack against Cuba, the "drug-dealing Communists", Castro immediately held a trial and executed the military officers implicated in drug dealing.(63) By year's end, Castro's prescience about the potential of a U.S. military action was rewarded. The United States launched Operation Just Cause to pluck General Noriega from Panama and return him to the U.S. for trial. Meanwhile, Castro increased his press conferences blaming Pablo Escobar and the Medellín cartel for Cuba's involvement in trafficking.

August 18, 1989 proved the crucial turning point for Colombia in the drug war. Sicarios assassinated popular presidential candidate Luis Carlos Galan, who had supported extradition of the INT and mandatory sentencing. Galan's assassination represented a preemptive strike by the cartel toward a popular and respected politician who had yet to engage in any active policies that would damage the cartel.

Decree 1860,issued by President Barco, provided special measures giving security forces wide latitude in search, seizure, arrest and suspension of habeas corpus. It restored extradition by executive decree. Traffickers could be sent to the United States without reference to the courts nor to the U.S.-Colombian treaty frozen on a technicality since nineteen eighty-seven. Decree 1860 also allowed arbitrary confiscation of cartel properties. For the first time shadow ownership of properties became a crime. Targets were already identified by the police. This change occurred at a crucial time for the communications network, Grupo Radial Colombiano. Owned by Cali cartel leader, Gilberto Orejuela Rodríguez transferred ownership to friends and relatives in order to receive licensures.(64)

As expected the cartels fought back declaring total war. Bombs destroyed the Liberal and Social Conservative headquarters and fire destroyed the homes of two prominent Medellín politicians. Moreover, the cartels announced their intentions to kill ten judges for every Colombian extradited to the United States. By August 30 judicial resignations stood at 100.(65)

Bombings continued including the bombing of which wounded 75 and inflicted about $2.5 million in damages. Meanwhile, the DEA in the U.S. continued its sweeps and seized 20 tons of cocaine in Los Angeles with a street value of $2 billion dollars. The cocaine, owned jointly by the Medellín and Cali cartels, represented 5% of the world's cocaine production.

By October 3 the Colombian Supreme Court ruled Barco's extradition decree unconstitutional as well as the decree permitting arbitrary seizures of cartel properties. Assets previously seized did not have to be returned unless some sort of court clearance justified the action.(66)

If nineteen eighty-nine began well for Rodríguez Gacha, it did not end that way. On December 15, the Cuerpo Elite of the national police, killed El Mejicano in a shootout at his estate in Pacho. Ideological splits within the Medellín cartel and between the Medellín cartel and some lesser cartels began to widen. The GOC was quick to blame Los Extraditables for the shooting death of UP candidate Bernardo Jaramillo Rios on March 22.(67) Diego Montaña, UP president, said Escobar was being used as a scapegoat. Montaña claimed Fidel Castaño actually orchestrated the killing of Jaramillo Rios as a vendetta against leftist groups. Castaño's decision, according to Montaña also showed the degree to which he was at odds with the Medellín cartel.(68) Castaño, unlike Escobar, enjoyed the support of regional military commanders in Córdoba, Urabá and Antioquiá. His vendetta against leftist groups originated with his father's abduction by FARC guerrillas in the early 1980s. Although a ransom was paid, Castaño's father died before the guerrillas could return him to his family.

Escobar and Los Extraditables were again blamed when, on April 26, M19 Presidential candidate, Carlos Pizarro Leongomez was killed in-flight between Bogotá and Baranquilla. In the wake of a governmental crackdown following the killing, an angry Escobar offered a $4400 bounty for every police agent killed in Medellín and $20,000 for every member of the elite body, Cuerpo Elite, of the national police. Between April and August 200 police were killed in Medellín and the surrounding areas.(69)

Although governmental pressure might have varied in intensity against the INT, it began to pay off. In July the INT declared a truce with the government. Homicides in Medellín dropped by 28% from July to August.(70) Fabio Ochoa, Junior and Senior surrendered under the terms of an amnesty agreement offered by newly elected Liberal president, César Gaviria.(71) Fidel Castaño offered to disarm if the guerrilla group, EPL, would disband. In 1992 Jorge Luis Ochoa, following his father and brother's example, turned himself in. On June 20, 1991 Pablo Escobar surrendered to Colombian authorities and transferred to the $3 million luxury prison he had built in Envigado.(72)

Capture in New York City, Dandenys Munoz Mosquera, known as `La Quica' was considered the man responsible for the Medellín cartel's military actions. His arrest confirmed previously undocumented revelations about " . . . the new power structure of the Medellín cartel, which involves members of the military and business sectors and Escobar's former lieutenants."(73) During the IV Latin American Encounter of Bank Security Experts, DEA financial chief, Greg Pacy, suggested that prominent businessmen, acting as front men, brought approximately U.S. $1.7 billion into Colombia since the death of Luis Carlos Galan in 1989. Pacy confirmed that, "between 1984 and 1987 U.S. $74 million had to be returned for lack of documentary substantiation."(74)

If Colombian authorities thought Escobar's imprisonment in Envigado would limit his activities, they were disabused of this notion in January 1992. Former Minister of Justice, Enrique Parejo, survivor of one assassination attempt by the cartel, complained that Escobar's prison had become the " . . . `main barracks for the Medellín cartel traffickers and that Escobar had ordered that he be assassinated from within prison."(75)

Additionally, increasing rifts among the cartels began to resemble volcanic ruptures. Ariel Otero, head of a right-wing paramilitary group that had often done jobs for Escobar, declared war on Escobar and rapidly became the man with the most enemies in Colombia. "Otero was forced to ally himself with a sector of the Cali cartel in exchange for preparing a plan to kill Escobar."(76) Otero's body was found January 10 with a written notice on his chest: "Ariel Otero: murder, thief and traitor" found on his tortured body.(77)

A communique received, ostensibly from Los Extraditables, stated that the armed wing of the Medellín cartel was resuming its quarrel with the Cali cartel. However, some analysts think the communique was not from Los Extraditables, but from the Amapola cartel, a particularly violent group consisting of exmilitants from the Medellín and Cali cartels who had decided selling heroin for U.S. $200,000 a kilo was more profitable than selling cocaine for U.S. $14,000 per kilo. The communique was thought an attempt by the Amapola [amapola means poppy in Spanish] cartel to increase animosity between the dominant cartels and displace them to control both the cocaine and heroin markets.(78)

Meanwhile, as the "faceless judge"(79) gathered evidence against Escobar, witnesses who had agreed to testify against Escobar were murdered. On July 21, the Colombian attorney general presented President Gaviria a report detailing growing irregularities occurring at Envigado. The more serious of these included assassinations planned in the prison as well as victims brought to the prison for trial by Escobar himself and tried for "disloyalty".(80) Moreover, rumors abounded that Escobar was thinking about escaping.

After meeting with his executive staff and the Justice Department, Gaviria decided the military would take control of the interior and exterior of the prison. Escobar would be transferred to a Spanish military prison. Escobar and nine accomplices escaped from Envigado.(81) By September 15, six of the nine accomplices had turned themselves back in to the authorities. In October, the police killed Brances Muñoz Mosquera, another of the Medellín cartel's military leaders, in a shootout. One by one Escobar's bodyguards were either being killed or turning themselves into the authorities.

Meanwhile a police operation comprised of U.S. and Italian forces completed Operation Green Ice resulting in the arrest of Colombian José Durán, head of the Pereira Cartel, and González Camargo Polonoa, previously the Colombian delegate to the World Conference against Drug Trafficking. Durán had worked for the Medellín and Cali cartels in Europe and was in charge of the Atlantic Coast's cartels finances. Operation Green Ice confiscated funds and accounts valued at U.S. $15 million in cash and U.S. $27 million in bank accounts. This operation was declared a major blow to Cali's financial operations.(82) The major blow, however, was not simply in the loss of funds, though that was substantial. Decisions made on how to replace the funds by the cartel leaders increased their exposure ultimately resulting in their capture.

On February 17, 1993, Carlos Alzate Urquijo, head of Escobar's security forces, immediately turned himself in after the assassination of Carlos Marios Ossa Salazar, the man in charge of Escobar's personal finances. LOS PEPES [Persecuted by Pablo Escobar], a new paramilitary group active since the first of the year known, were considered responsible for Salazar's death. LOS PEPES formed in response to a car bomb detonated in Bogotá which killed 22 persons.(83) LOS PEPES attacked Escobar, his family and his associates relentlessly using bombs and/or sicarios. Political analysts suggest LOS PEPES consists of off-duty police in league with Escobar's underworld enemies. The group called a truce only after Escobar announced he would be willing to return to prison if the United States would offer protection for his family.(84)

As the government continued its pressure Escobar warned, in a letter sent to El Tiempo, which "he had 70 men prepared to kidnap and kill diplomats if the government refuses to accept his terms for surrender."(85) In a perhaps not too coincidental series of events, Evaristo Porras, long time member of the Medellín cartel, was recaptured and released due to "lack of proof in terms of drug trafficking and subversive activity."(86) It is odd that Porras had been on the extradition list of the U.S. for several years and, despite having numerous arrests, had remained at large often speaking at public gatherings. On December 2, 1993 Pablo Escobar died in a shootout with Colombian security forces in his hideout in the heart of Medellín.(87) Wiretaps traced to Escobar's hideout revealed plans for increased kidnapings designed to pressure acceptance of his surrender demands.


If Phase One of the INT's development was a time of self definition and power acquisition, Phase Two represented a coalescence into a loose-knit organization that accelerated the dominating cartels' power. Phase Three, however, suggests the influx of other actors, nationally and internationally widened nascent cracks in the cartels' relationships. Local units' loss of flexibility within a structure begun on a more or less "democratic" basis suggests the bonds of various networks became strained resulting in power challenges from the local level.

Chief among these was the rise in power of lesser cartel leaders such as Castaño, head of the North Atlantic cartel and José Durán, of the Perieira cartel. The uniting of these two leaders provided a formidable alternative to the two dominating cartels. Additionally in Phase Three, ideological considerations become clearer as the Medellín and Cali cartels were unable to exercise much control over the newly emerging actors.

Moreover, as organizations grow in size and complexity, the demands of the communications systems to keep up with the coordination needs often halts growth. Even in an age of computer networks and instantaneous communications many organizations become hard pressed to sustain growth simply because coordination becomes too costly. It appears the burgeoning profits of the Colombian cocaine cartels required them to increasingly rely on persons with expertise in money laundering who could insulate the leaders from the drug money. At this point the cartels became most vulnerable both in their logistical inability to maintain strict oversight of accounting procedures and the costliness of such oversight. It is easier to hire a squad of fifteen year old sicarios than it is to hire teams of financial and accounting overseers to guarantee handling drug monies. The difficulty of such management is displayed in the length of time it took the U.S. and Colombian governments develop special task forces and agencies to deal solely with money laundering activities of the cartels.

Other actors to emerge as power brokers during Phase Three include the military and the sicarios. While both actors had always been present at some level, an increase in their independent exercise of power became greater during Phase Three. Sicarios became independent "entrepreneurs of death" offering services to whomever had money to pay and did not require these services be limited to those involved in the INT.

Portions of the military, particularly regional commanders, shared much of the right wing ideology of the INT and paramilitary squads. According to Colombian chief prosecutor, Carlos Gustavo Arrieta, "It is a secret for no one that 99 percent of official institutions have problems with infiltration [by narcotraficantes]."(88)

Networks continue to exist because of two characteristics central to network organizations: the essential relationships are external and viable to all parties and the relationships among the parties are voluntary reflecting explicit commitments by all parties. For the Colombian cocaine cartels, the nature of the relationships must, by the very illegality of the enterprise, remain at least partially hidden. At the least this fosters a chronic sense of mistrust among the parties. This lingering mistrust and resentment may be the factors ultimately causing network failure in a manner predicted for many networks - by internally generated forces rather than from any pressures applied by external forces such as the law enforcement community. This has become more evident as LOS PEPES waged war against Pablo Escobar following his escape from prison, the rise of the Amapola cartels, and the coalescing of the lesser cartels.

In the following chapter, we look more specifically at the INT's impact on Colombian economic institutions and their ability to control the money supply and create and implement economic policy.  

TABLE 3 Key Drug-related Deaths in Colombia, 1984

10 April 1984 Minister of Justice Dr. Rodrigo Lara Bonilla

23 July 1984 Judge Tuilio Manuel Castro Gil, who was carrying out an investigation of the murder of Bonilla

6-7 Nov. 1985 Fifteen judges of the Supreme Court and the Council of State, during the occupation of the Palace of Justice by the M-19 guerrilla group, supported and funded by the Medellín Cartel

16 July 1986 Roberto Camacho Prada, a correspondent of El Espectador, a leading daily newspaper.

17 July 1986 Police Captain Lufs Alfredo Macan Rodríguez, actively engaged in the anti-drug effort.

31 July 1986 Supreme Court Judge Hernando Baquero Borda.

17 Aug 1986 Colonel Jaime Ramirez Gomez, former Director of the Anti-Narcotics Force of the Police and well-known for his fight against the drug traffickers' organizations.

17 Sept 1986 Raul Echavarria Barrientos, assistant director of Occidente, a daily newspaper.

10 Dec 1986 Lieutenant Colonel Jose Agustín Ramos Rodríguez, a distinguished officer in the Valle Police Department.

17 Dec 1986 Don Guillermo Cano Isaza, director of El Espectador.

13 Jan 1987 Budapest, Hungary: former Minister of Justice, then Ambassador of Colombia in Hungary, Dr. Enrique Parejo Gonzalez.

11 Oct 1987 Presidential Aspirant Jaime Pardo Leal, leader of the Patriotic Union Party (UP).

25 Jan 1988 Attorney General Carlos Hoyos, who had completed a week-long investigation into government and judiciary wrongdoing in the release of Medellín cocaine baron Jorge Lufs Ochoa Vasquez.

March 1989 Journalist Hector Giraldo.

4 May 1989 Former governor Alvaro Gonzales Santana.

4 July 1989 Antonio Roldán Betancur, Governor of the Antioquia department.

28 July 1989 Maria Elena Díaz Perez, a civilian judge investigating the 1988 massacre of twenty-one banana plantation workers.

16 Aug 1989 Carlos Ernesto Valencia, Superior Tribunal Magistrate.

18 Aug 1989 Valdemar Quintero, police chief of Antioquia.

18 Aug 1989 Luis Carlos Galan, a Liberal Party s'enator, presidential candidate and outspoken opponent of drug traffickers.

11 Sept 1989 Pablo Pelaez, former major of Medellín.

17 Oct 1989 Hector Jimenez Rodríguez, high court judge.

27 Oct 1989 Gabriel Santamaria, a UP congressman.

10 Apr 1984 Minister of Justice Dr. Rodrigo Lara Bonilla.

23 July 1984 Judge Tulio Manuel Castro Gil, who was carrying out an investigation of the murder of Bonilla.

6-7 Nov 1985 Fifteen judges of the Supreme Court and the council of State, during the occupation of the Palace of Justice by the M-19 guerrilla group, supported and funded by the Medellín Cartel.

16 July 1986 Roberto Camacho Prada, a correspondent of El Espectador, a leading daily newspaper.

17 July 1986 Police Captain Luís Alfredo Macan Rodríguez, actively engaged in the anti-drug effort.

31 July 1986 Supreme Court Judge Hernando Baquero Borda.

17 Aug 1986 Colonel Jaime Ramirez Gomez, former Director of the Anti-Narcotics Force of the Police and well-known for his fight against the drug traffickers' organizations.

17 Sept 1986 Raul Echavarria Barrientos, assistant director of occidente, a daily newspaper.

10 Dec 1986 Lieutenant Colonel Jose Agustín Ramos Rodríguez, a distinguished officer in the Valle Police Department.

17 Dec. 1986 Don Guillermo Cano Isaza, director of El Espectador.

13 Jan 1987 Budapest, Hungary: former Minister of Justice, then Ambassador of Colombia in Hungary, Dr. Enrique Parejo Gonzalez.

11 Oct. 1987 Presidential Aspirant Jaime Pardo Leal, leader of the Patriotic Union Party.

25 Jan. 1988 Attorney General Carlos Hoyos, who had completed a week=long investigation into government and judiciary wrongdoing in the release of Medellín cocaine baron Jorge Luís Ochoa Vasquez.

March 1989 Journalist Hector Giraldo.

4 May 1989 Former governor Alvaro Gonzales Santana.

4 July 1989 Antonio Roldán Betancur, Governor of the Antioquia department.

28 July 1989 Maria Elena Díaz Perez, a civilian judge investigating the 1988 massacre of twenty-one banana plantation workers.

16 Aug 1989 Carlos Ernesto Valencia, Superior Tribunal Magistrate.

18 Aug 1989 Valdemar Quintero, police chief of Antioquia.

18 Aug 1989 Luís Carlos Galan, a Liberal Party senator, presidential candidate and outspoken opponent of drug traffickers.

11 Sept 1989 Pablo Pelaez, former mayor of Medellín.

17 Oct 1989 Hector Jimenez Rodríguez, high court judge.

27 Oct 1989 Gabriel Santamaria, a UP congressman.

1. Ackerman and McRae, 4.

2. See, for example, Gunnar Hedlund and Dag Rolander. "Action in Heterarchies-New Approaches to Managing the MNC", in Chris Bartlett, Yves Doz, and Dag Hedlund, eds. Managing the Global Firm (London: Routledge, 1990), 15-46.

3. Miles, R.E. and C.C. Snow, "Causes of Failure in Network Organizations", California Management Review, 1992, 34(4), 53-72.

4. Guggliotta and Leen, 134.

5. Lee III, Rensselaer W., "Colombia's Cocaine Syndicates", Crime, Law, and Social Change 16: 3-39, 1991. Lee specifically addresses the organizational changes on pages 4-6.

6. Ibid., 136.

7. Berkeley Rice, Trafficking: The Boom and Bust of the Air America Cocaine Ring, (New York: Scribners, 1989), 53-61.

8. Guggliotta and Leen, 137.

9. Guggliotta and Leen, 149-159.

10. Ibid., 154.

11. Although Air America is the name of a covert CIA subsidiary, this was not the case with this smuggling ring. The owner, Rik Lutjes, thought the name a clever play on words.

12. Rice, 85.

13. Guggliotta and Leen, 157.

14. Ibid., 137.

15. Lee, "Colombia's Cocaine...." pg. 17. Lee notes that Pablo Escobar has constructed more public housing in Medellín than has the Colombian government.

16. Guggliotta and Leen, pg. 159. A suplente serves in the place of the regular representative whenever the regular representative is ill or cannot attend sessions.

17. Castillo, 60.

18. Lee, White Labyrinth...., 37.

19. Rice, 124.

20. Rice, 155.

21. Guggliotta and Leen, 215.

22. Ibid., 219.

23. Rice, 55.

24. Guggliotta and Leen, 163.

25. Ibid, 163-164.

26. Ibid., 190.

27. Ibid., 28, 192.

28. Ibid., 227-228.

29. Ibid., 237.

30. For a fuller explanation of the complex web of relationships leading up the Daríen jungle raid, see Frederick Kempe's Divorcing the Dictator: America's Bungled Affair with Noriega (New York: G.P. Putnam & Sons, 1990) chapter twelve, "The Fifth Horseman".

31. Kempe, 185.

32. Ibid., 195.

33. Ibid., 294-296.

34. Ibid., 297.

35. Guggliotta and Leen, 422.

36. Guggliotta and Leen, 430.

37. Lee, The White Labyrinth..., 126.

38. Ibid.

39. Bruce M. Bagley, "Colombia Under Siege" Paper presented at the International Symposium on Money Laudering, 11.

40. Castillo, 189. The FARC splinter group Frente Ricardo Franco was made the offer first and declined.

41. "Fighting the Cocaine Wars", TIME, February 25, 1985, 30.

42. Americas Watch Report, January 1986, 116.

43. Lee, The White Labyrinth..., 128.

44. Ibid., 499.

45. Ibid., 473-477.

46. The U.S., despite growing evidence of Noriega's complicity with the cartels since at least 1982, refused to press charges of narcotrafficking or money laundering. It was not until 1988 that prosecutors in Dade County handed down a sealed indictment for Noriega's arrest and major newspapers broke the news of Noriega's drug dealing and money laundering while on the payroll of the CIA that the U.S. began to apply pressure on the cartels through Panama.

47. The Killings in Colombia, (Washington, D.C.: Americas Watch Report, 1989), 51.

48. Guggliotta and Leen, 505-508.

49. Latin American Weekly Report 87-35, 2.

50. Guggliotta and Leen, 430.

51. Ibid., 506.

52. Ibid., 505-508.

53. Latin American Weekly Report, WR-87-46, 10.

54. Despite wearing bullet-proof vests and traveling with body guards everywhere, Low Murta was assassinated May 1, 1991 in Bogotá.

55. Rensselaer Lee III, "Dimensions of the South American Cocaine Industry", Journal of InterAmerican Studies and World Affairs Vol.30 Nos. 2 & 3, Summer/Fall 1988, 99.

56. Guggliotta and Leen, 515.

57. Latin American Weekly Report, WR-87-47, 8.

58. Guggliotta and Leen, 569.

59. Lee, "Colombia's Cocaine...", 10.

60. ..."Narcoguerra: El cartel deja en claro que no habrá tregua", edicion 300, SEMANA, February 02, 1988, 26.

61. Lee, "Dimensions...", 98.

62. Guggliotta and Leen, 575.

63. Guggliotta and Leen, 588.

64. Castillo, 130.

65. Ibid., 574.

66. Ibid., 574.

67. Kline, 18.

68. Leslie Wirpsa, "Colombia: Leftist Coalition Suffers New Attack", Latinamerica Press Vol. 22 No. 11 March 29,1990, 2.

69. Leslie Wirpsa, "Colombia Youth Are an Endangered Species", Latinamerica Press Vol. 22 No. 29 August 16, 1990, 3.

70. Robert Collier, "Colombia: Medellín Cleans Up Its Act", Latinamerica Press Vol. 22 No. 36 October 4, 1990, 1.

71. Robert Collier, "Colombia Moves Closer to Peace", Latinamerica Press Vol. 22 No. 41 November 11, 1990, 7.

72. James S. Brooke, "Trafficker is Still Feared in Colombia", The New York Times INTERNATIONAL, January 21, 1992, A5.

73. Drug Trafficking Update, "Colombia: La Quica, Police Operations and Money Laundering", No. 19 November 11, 1991, 1.

74. Ibid., 3.

75. Drug Trafficking Update, "Colombia: Corruption Among Army Personnel; Escobar, Envigado, and Cuba" No. 21 January 13, 1992.

76. Drug Trafficking Update, "Colombia: The Amapola Cartel", No. 22, February 10, 1992, 2.

77. Ibid.

78. Ibid.

79. Since the assassination of so many judges and justices by the cartels, Colombian established a special order of judges presiding over and hearing drug cases wherein the identity of the judges was concealed. In the case of Escobar, the judge would arrive in a van draped in robes and hooded as he/she was escorted into the Envigado prison. During interviews behind a one-way mirror the judge's voice would be electronically altered to avoid detection of gender.

80. Drug Trafficking Update, "How, When, and Where", No. 28, August 10, 1992, 1.

81. Ibid.

82. Drug Trafficking Update, "Green Ice and Money Laundering", No. 30. October 13, 1992, 1.

83. Drug Trafficking Update, "The Solitude of the Mafioso" No. 35, March 8, 1993, 4-5.

84. "Rival Drug Gang Calls Truce With Escobar", Clarnet News, (UPI), March 4, 1993.

85. "Escobar Warns" Clarinet News (UP), March 1993.

86. Drug Trafficking Update, "Veni, Vide, Vici", No. 36, April 5, 1993, 7.

87. Robert D. McFadden, "Head of Medellín Cocaine Cartel Is Killed by Troops in Colombia", The New York Times International, December 3, 1993, A1.

88. James Brooke, "In Colombia, One Victory in a Long War" The New York Times International, December 3, 1993, A12 [emphasis added].  

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