DRUGS, CRIME AND CORRUPTION

Also by Richard Clutterbuck

ACROSS THE RIVER (as Richard Jocelyn) THE LONG LONG WAR PROTEST AND THE URBAN GUERRILLA RIOT AND REVOLUTION IN SINGAPORE AND MALAYA LIVING WITH TERRORISM GUERRILLAS AND TERRORISTS KIDNAP AND RANSOM BRITAIN IN AGONY

... THE MEDIA AND POLITICAL VIOLENCE

... INDUSTRIAL CONFLICT AND DEMOCRACY CONFLICT AND VIOLENCE IN SINGAPORE AND MALAYSIA

... THE FUTURE OF POLITICAL VIOLENCE

... KIDNAP, HIJACK AND EXTORTION TERRORISM AND GUERRILLA WARFARE TERRORISM, DRUGS AND CRIME IN EUROPE AFTER 1992

... INTERNATIONAL CRISIS AND CONFLICT TERRORISM IN AN UNSTABLE WORLD

... Also published by Macmillan

Drugs, Crillle and Corruption

Thinking the Unthinkable

Richard Clutterbuck Securiry and Political Risk Consultant and Honorary Research Fellow Universiry of Exeter

~ MACMIllAN

© Richard Clutterbuck 1995

Ali rights reserved. No reproduction, copy or transmission of this publication may be made without written permission.

No paragraph of this publication may be reproduced, copied or transmitted sa ve with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W!P 9HE.

Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages.

First published 1995 by MACMILLAN PRESS LTD Houndmills, Basingstoke, Hampshire RG21 6XS and London Companies and representatives throughout the world

A catalogue record for this book is available from the British Library.

10 9 8 7 04 03 02 OI

6 5 4 3 2 1 00 99 98 97 96 95

Copy-edited and typeset by Povey-Edmondson Okehampton and Rochdale, England

ISBN 978-0-333-63102-7 ISBN 978-0-230-37647-2 (eBook)

DOI 10.1057/9780230376472

Contents

List of Tables

Preface

List of Abbreviations

PART I INTRODUCTION

1 Are We Losing the War? Drugs and crime The producers Money laundering The choice facing the consumer countries

PART II COCAINE AND TERRORISM IN PERU

2 The Mistis and the Shining Path Incas, mistis and coca A thirst for education Abimael Guzman The foundation of the Shining Path

3 Coca Enters the War The start of the armed struggle 1980-1 The esc ala tion of violence 1982-4 President Garcia 1985 Guzman turns to coca for finance Garcia's legacy The strategy and organization of the Shining Path

4 President Fujinlori and the Capture of GuzlIlan President Fujimori Why Guzman shifted to Lima The capture of Abimael Guzman The Repentance Law Human rights and corruption

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XIII

3 3 4 5 5

11 11 14 15 17

19 19 20 22 23 25 26

28 28 30 30 34 37

VI Contents

5 Cocaine Production in Peru The Peruvian coca plantations Production of cocaine paste Flying out the paste Bribery of Peruvian army officers The effect on Peru's economy Lessons from Peru

PART III THE COLOMBIAN CARTELS

6 Bolivia The richest coca leaves in the world Bolivian politics Attempts to eradicate coca

7 ColoDlbia A history of violence The growth of the cocaine trade and terrorism The rise and fall of Pablo Escobar Colombia after Pablo Escobar

8 Cocaine Distribution Export from Colombia World distribution Prices

9 Crack The instant narcotic The Yardies The 'crack explosion' A crack dealer and crack addicts

PART IV HEROIN, CANNABIS AND SYNTHETICS

10 The Heroin Trail Heroin production The Golden Triangle The Golden Crescen t From Turkey to West Europe Through West Africa

41 41 42 43 45 47 47

53 53 53 54

56 56 57 58 63

66 66 67 69

70 70 71 73 76

81 81 83 88 88 89

Contents

11 Cannabis and Synthetics Cannabis production Synthetic drugs Barbiturates Amphetamines (including Speed and Ice) LSD MDMA (Ecstasy)

PART V FINANCE

12 Money Laundering The task Fast moving cash International banking Fiscal havens

13 Countering Money Laundering International money-laundering legislation British legislation Italian legislation Ways round the money-laundering laws Conclusion

PART VI THE USA AND CONTINENTAL EUROPE

14 What is on Offer? Drugs and organized crime in the consumer countries The shopping list

15 The USA The US drug war Organized crime in the USA Attacking the supply side Attacking the demand side An armed society

16 The Italian Mafia The origins of Cosa Nostra Mafia structure and organization The pursuit of power

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90 90 91 91 92 93 94

97 97 98 99

103

105 105 107 110 III 115

121 121 121

123 123 123 124 127 128

131 131 133 133

VIll Contents

The mafia pentiti 135 Survival of the mafia 137

17 Russia and East Europe 138 Twenty-seven new democracies 138 Ethnic and religious minorities 139 Organized crime in Russia 140 Drugs 144 Other organized crime in North and East Europe 145 The threat to West Europe 147

18 Italy, Gerlllany and the Dutch ExperiInent 148 Italy 148 Germany 149 The Netherlands 149

PART VII THE UNITED KINGDOM

19 Drug Trafficking in the UK 155 Pattern of drug abuse in the UK 155 Organization 157 Importers 159 Couriers 161 Distributors and retailers 164

20 Anti-Drug Enforcelllent in the UK 169 Intelligence organization 169 Informants, informers and witnesses 170 Types of operations 172 Punishment and civil liberties 173 Examples 174 Drugs in prisons 178 The options 179

21 Could Suppression be Made to Work? 181 The record of suppression 181 Should Britain's penal policy be changed? 182 Convicting more of the guilty 185 Treatment of addicts 189 The British government's strategy review, 1995-8 190

Contents

22 DecriDlinalize? License? Legalize? Decriminaliza tion Licensing Legalization under licence The case against licensed legalization The choice

PART VIII CONCLUSIONS

23 A War to be Won in the West The producers Money laundering International organized crime Britain as a test bed for radical solutions

Notes and Riferences

Bibliography

Index

IX

192 192 193 195 200 203

207 207 208 209 211

214 227 233

List of Tables

3.1 Numbers Killed in the Terrorist War in Peru 21 8.1 Example of Cocaine Prices, Peru to London 68

10.1 Opium Production, 1990 83 10.2 Example of Heroin Prices, Golden Triangle to

USA, 1994 85 14.1 Approximate Street Prices of Drugs, 1994 122 15.1 Examples of US Federal Drug-Trafficking

Penalties, 1988 128 15.2 Murder Rates, 1992 130 17.1 Ethnic Minorities in Former Soviet States 140 17.2 Reported Crimes in Russia per Million of

Population 143 22.1 Possible Prices of Licensed Heroin 198

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Preface

Drug trafficking has elbowed its way uninvited into all the four books I have written in the past five years on terrorism, crime and international conflict. Almost every criminal gang and most terrorist movements are partly or wholly financed out of the $500 billion the world spends each year on drugs on the streets, most of it in the affiuent cities of the USA and Europe.

Drug trafficking provides a constant circulation of criminal money, as will be described more fully in this book. Of the world's $500 billion, $3 billion (£2 million) is spent by drug users on British streets each year. They acquire 90 per cent of this by petty crime, for example by breaking into homes and cars to fund their addiction. Of the £2 billion, less than 1 per cent goes to the Latin American and Asian farmers who produce the drugs; the other 99 per cent goes entirely into the hands of criminals, through the street dealers, distributors, importers, and exporters to the drug barons. Each hopes to make 50 or 100 per cent profit - some, like the Colombian barons, much more.

The criminals use this money to finance a lavish lifestyle but also, more important, to build up huge assets which they use for intimidation and corruption to manipulate politicians worldwide as a means of extending their power. Their aim is to run the part of the world they live in, as the Mafia have done for years in Sicily, for their own benefit and enrichment.

Damaging as drugs are to addicts, the aggregate damage done to innocent members of the community by the crime they generate is far greater.

The cure must lie in the main consumer countries, the USA and Europe, rather than the drug-producing countries in Latin America and Asia. This was brought home to me in two consultancy assignments in Peru in 1991 and 1994. Peru grows 60 per cent of the world's coca, mostly processed and marketed by the multibillion dollar drug cartels in Colombia. These cartels have for years financed the vicious Shining Path terrorist movement in Peru and have spent even more on corrupting both Peruvian and Colombian society.

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Drenching the Peruvian peasants' coca fields with poison will not solve this problem. So long as our drug users are willing to pay for them, the growers, the barons and the criminal gangs will find ways to provide the drugs on our streets. The same arguments apply to opium and heroin.

So how do we stem the flow? Certainly not by carrying on as we are. If we hope to do so by police and judicial suppressive measures, we will have to make them strong enough to work. If the price for this in erosion of civil liberties would be too high, then we will have to explore the other three alternatives -decriminalization, licensing or licensed legalization, or a combination of the four. The British government's Consultation Paper, Tackling Drugs Together, published in October 1994, invited debate to develop a working strategy. In this book I have assessed these four alternatives with their pros and cons to contribute to that debate.

lowe special thanks to Commander John Grieve of the Metropolitan Police; to Nicholas Dorn and John Witton of the Institute for the Study of Drug Dependence (ISDD); and to Simon Baker and his friends in the Hong Kong Police. In Peru I was enormously helped by the British Ambassador, Keith Haskell, by his Defence Attache, Colonel Van der Noot, and the rest of his team; also by Police General Antonio Vidal, Army Generals Sinecio Jarama and Alfredo Rodriguez; Lieutenant-Colonel Otto Guibovich; and Dr Enrique Obando. I have also quoted a lot from the excellent case studies by Jon Silverman in his Crack if Doom and especially from the extensive research into drugs and the mafia by Alison Jamieson. They do not necessarily agree with each other or with me, so they must not be blamed for my conclusions.

Exeter RICHARD CLUTTERBUCK

List of Abbreviations

For foreign acronyms and in other cases where it is judged to be more helpful to the reader, an English description (in parentheses) is given instead of spelling out the words.

ACJANL ACJDTU

ACPO AIDS AP APC APRA ASF BCCI BKA BND CAT CDCU CELAD CGSB

CICU CID CIS CJA CSA CTR DC DDU DEA DINCOTE DNA DTOA EDU ELN EMZ

Andean Commission of Jurists, Andean Newsletter Andean Commission of Jurists, Drug Trafficking Update Association of Chief Police Officers Acquired Immune Deficiency Syndrome (Centre political party) (Peru) Annual of Power and Conflict (Leftist political party) (Peru) Automated Search Facility (Interpol) Bank of Credit and Commerce International (German Police Intelligence Service) ( German Foreign Intelligence Service) Community Action Trust Central Drugs Coordination Unit (European Committee to Combat Drugs) (Simon Bolivar Guerrilla Coordination)

(Colombia) Crack Intelligence Coordinating Unit Criminal Investigation Department Commonwealth of Independent States Criminal Justice Act, 1988 Controlled Substances Act, 1970 Currency Transaction Report (Italian Christian Democratic Party) Drug Dependency Unit Drug Enforcement Administration (USA) (Peruvian police anti-terrorist unit) (Genetic molecule in body fluids) Drug Trafficking Offences Act 1986 European Drugs Unit (National Liberation Army) (Colombia) Emergency Military Zone (Peru)

xm

XIV

EPL EU Europol FARC FATF FD G7

GDP GNP HIV HRP ID card INLA INCB INSCR Interpol IRA ISDD IV JLP KGB LSD Ml9 MDMA MIR MLCA MNR MT NA NATO NCIS NDIU NHS NRA OCR PACE PEPES PNC PNP PTA

List of Abbreviations

(People's Liberation Army) (Colombia) European Union (formerly EC) European Police Office (Armed Revolutionary Forces of Colombia) Financial Action Task Force (Centre Left coalition) (Peru) Group of Seven (Canada, France, Germany, Italy,

Japan, UK and USA) Gross Domestic Product Gross National Product Human Immunodeficiency Virus Harm Reduction Policy (drugs) Identity card Irish National Liberation Army International Narcotics Control Board International Narcotics Strategy Control Report International Police Organization Irish Republican Army Institute for the Study of Drug Dependence Intravenous (drug injection) Jamaican Labour Party (Former Soviet secret police) (Synthetic hallucinogenic drug) (Colombian left-wing party) (Ecstasy - hallucinogenic drug) (Bolivian centre-left party) Money Laundering Control Act 1986 (USA) (Bolivian centre-right party) Metric Tonne Narcotics Anonymous North Atlantic Treaty Organization National Criminal Intelligence Service National Drugs Intelligence Unit National Health Service National Rifle Association (USA) Optical Character Reading Police and Criminal Evidence Act 1986 (People persecuted by Pablo Escobar) (Colombia) Police National Computer People's National Party Uamaica) Prevention of Terrorism Act

RC RCIO RCS RISCT

SB SFRC SIN SL SUA THC

TREVI UIC UFF UN UNFDAC UWSA UVF VAT

List of Abbreviations

Rondas Campesinas (Peruvian village guards) Regional criminal intelligence office Regional crime squad Research Institute for the Study of Conflict and

Terrorism Special Branch (British police intelligence) Senate Foreign Relations Committee (USA) (National Intelligence Service) (Peru) Sendero Luminoso (Shining Path) (Peru) Shan United Army (Myanmar) Tetrahydrocannabinol (active ingredient in

cannabis) (EU Ministerial Security Committee) (Italian Exchange Bureau) Ulster Freedom Fighters United Nations UN Fund for Drug Abuse Control United Wa State Army (Myanmar) Ulster Volunteer Force Value Added Tax

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