SMUGGLING COLOMBIAN MARIJUANA: A HIGH-PROFIT VENTURE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83B00851R000200170003-4
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 21
• Document Creation Date: December 22, 2016
• Document Release Date: December 16, 2010
• Sequence Number: 3
• Publication Date: September 1, 1982
• Content Type: REPORT

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Directorate of Confidential
Intelligence
Smuggling Colombian Marijuana:
A High-Profit Venture
An Intelligence Assessment
Confidential
GI 82-10211
September 1982
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Directorate of Confidential
0 Intelligence
Smuggling Colombian Marijuana:
A High-Profit Venture
An Intelligence Assessment
This paper has been prepared by
International Security Issues Division, Office of
Global Issues. Comments and queries are welcome
and may be addressed to the Chief, Strategic
Narcotics Branch, OGI
This paper has been coordinated by the Directorate
of Operations and the National Intelligence Council.
Confidential
G182-10211
September 1982
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Key Judgments
Information available
as of 1 September 1982
was used in this report.
Smuggling Colombian Marijuana:
A High-Profit Venture
Colombia now supplies three-fourths of the marijuana consumed annually
in the United States, most of which is handled by large, well-organized ex-
porting and importing trafficking organizations. Profits garnered by the
Colombian exporters and US importers are enormous. For instance, we
estimate that an average 20-ton shipment, worth almost $200,000 to the
grower, brings more than $9 million?and a profit of almost $6 million?to
the importer in the United States.
Because the financial exposure of the traffickers is so limited, we believe
that the major ones would not be hurt financially unless at least 70 percent
of all shipments were seized and destroyed. This implies an interdiction
rate four to five times higher than that presently achieved by the US Coast
Guard and other authorities. Even then, the likely rise in the street price
for marijuana and the resultant lure of easy profits would prompt
trafficking organizations to select alternate routes and continue smuggling.
iii Confidential
GI 82-10211
September 1982
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Contents
Page
Key Judgments
iii
Introduction
1
The Marketing Chain
1
Costs and Profits
2
Growers
3
Brokers
3
Exporters
4
Preparing for Export
4
Shipping
5
Bribery
8
Importers
9
By Sea
9
By Air
9
Transfers Inland
12
Bribery
13
Profits and Credit Arrangements: The Key to Survivability
13
Implications for Interdiction
13
Figures
1. Seizures of Seaborne Marijuana Destined for Southeastern United
States, 1980-81 (Including Average Monthly Prices in Florida)
2
2. Marijuana Field, Sierra Nevada de Santa Marta Mountains
3
3. Colombia: Per Hectare, by Export Crop, 1980
4
4. Stash Site, Guajira Peninsula
6
5. Mother Ship Loading, Portete Bay
6
6. Airplane on Clandestine Airstrip, Guajira Peninsula
12
7. Colombia: Principal Marijuana Growing Areas and Smuggling
Routes
15
Table
Colombian Marijuana Price Chain
3
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Smuggling Colombian Marijuana:
A High-Profit Venture
Introduction
According to the National Narcotics Intelligence
Consumers Committee (NNICC), more than 90 per-
cent of the marijuana consumed yearly in the United
States is imported. Most of it-7,700 to 11,300
tons'?comes from Colombia, which began to domi-
nate the trade in the mid-1970s when the use of
paraquat to eradicate marijuana crops reduced Mexi-
can supplies. According to surveys by the US Drug
Enforcement Administration (DEA), users also came
to prefer the better manicured and reputedly more
potent Colombian marijuana. The complicated logis-
tics of smuggling Colombian marijuana, which calls
for massive quantities to be hauled over long distances
and for large amounts of capital, attracted a new class
of smuggling organizations structured along corporate
lines.
Beginning with Operation Stopgap' in late 1977, the
US Government has made several concentrated ef-
forts to interdict marijuana shipments to reduce sup-
plies and to raise the cost of smuggling to prohibitive
levels. Although large shipments have been seized
routinely in the past five years, Colombian marijuana
continues to be plentiful in the United States. More-
over, the US street price?a barometer of the success
of interdiction efforts?has not risen, and traffickers
continue to profit (figure 1). This paper examines the
movement of marijuana from the field to the US
wholesaler, outlines the profitability of the trade, and
discusses the interdiction effort necessary to affect the
availability of Colombian marijuana in the US
market.
' Tons reported in this paper are short tons equal to 2,000 pounds.
2 Operation Stopgap, conducted from December 1977 to February
1978, involved the Department of State, DEA, the US Coast
Guard, US Customs, US Immigration and Naturalization Service,
and foreign governments in a marijuana interdiction campaign.
Through aerial surveillance, DEA located vessels loading marijua-
na on Colombia's north coast and passed their identities to the
Coast Guard. Thirty-three of these ships with 450 tons of marijua-
na were intercepted by the Coast Guard at choke points and other
locations in the Caribbean and Bahamas.
1
The Marketing Chain
Colombian marijuana passes through several transac-
tions before it is retailed by the ounce in markets
throughout the United States. Most of it is grown in 25X1
remote, steep mountain valleys of the Sierra Nevada
de Santa Marta in northeast Colombia (figures 7 and
2), often by independent cultivators. Marijuana plots
are relatively small (usually less than one hectare) and
are occasionally found alongside fields with legitimate
crops. After growing, harvesting, and drying their
crops, cultivators sell them by the pound to brokers or
to representatives of the principal exporting organiza-
tions. DEA reporting indicates that marijuana is also
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Figure 1
Seizures of Seaborne Marijuana Destined for Southeastern United States, 1980-81
(Includes Average Monthly Prices in Florida)
Tons US $ Per Pound
600 600
500 500
400 400
Weighted Average
----,
300 300
_
200 200
_
_
100 100
?
flip
_
J FMAMJ
1980
J ASONDJFMAMJJ ASOND
1981
587560 9-82
grown on plantations owned by major traffickers. In
addition, some growers raise marijuana under con-
tract with trafficking organizations, and still others
use land rented from large landowners.
For producers not directly associated with exporters,
brokers are a vital link in the marketing chain. They
buy marijuana from independent growers and deliver
relatively large quantities?ranging from a few hun-
dred to several thousand pounds?to buyers repre-
senting the major Colombian trafficking organiza-
tions. Some deliveries are made in the mountains, but
occasionally brokers will smuggle their stocks to
coastal loading sites on the Guajira Peninsula. The
largest and most important Colombian exporters are
found in the north coast cities of Cartagena, Barran-
quilla, Santa Marta, and Riohacha. Many have repre-
sentatives in the United States through whom they
negotiate large smuggling agreements with US im-
porters and wholesalers.
Multiton loads are most often shipped by boats and
planes to the Atlantic and Gulf coast regions of the
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United States. When contact boats slip into shore or
aircraft touchdown in the southeastern United States,
their marijuana cargoes are quickly unloaded and
taken to nearby storage sites or sent to regional
markets. Tractor trailer trucks and recreational vehi-
cles are often used to haul hundreds and thousands of
pounds to wholesalers in urban markets throughout
the country. There, chains of distributors break the
shipments down into smaller lots until they are even-
tually sold by the ounce or cigarette.
Costs and Profits
From the field to the streets of the United States,
Colombian marijuana increases in value from approx-
imately $4 per pound to about $680 per pound (table).
The largest markups are made by the exporters and
importers who manage the most sophisticated phases
of the trafficking and take the largest risks. Their
lucrative financial arrangements go a long way to-
ward ensuring their survivability, even in the face of
high rates of interdiction.
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Figure 2. Marijuana field, Si-
erra Nevada de Santa Marta
Mountains
Colombian Marijuana Price
Chain, 1980-81 a
US $ per pound
Link
Range
Mean
Median
Farmgate
2-8.20
4.25
3.80
Colombian middleman
9-26
16
14
Exporter
12.50-150
68
63
Importer
130-275
233
225
US wholesaler
230-365
281
275
US distributor
300-500
380
370
US retailer b
430-990
680
640
a Based on prices reported in DEA investigative files, domestic and
foreign media, and US Embassy reports.
b Income equivalent to 16 one-ounce sales.
Growers
Despite the volume of Colombian marijuana traded,
reliable data on farmgate prices are sparse. What is
available, however, is fairly consistent and shows that
marijuana provides far better returns than any alter-
native employment in the area and allows growers'
incomes to well exceed Colombia's average GNP per
capita of $1,100. Independent growers, who take the
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greatest risk since they may not always find buyers,
receive a price determined, more than likely, through
the bargaining process. If they plant only a half
hectare, grow two crops per year, and sell at the lower
end of the price range, they can expect marijuana
earnings to range from $4,000 to $5,000 annually.
Those growers who rent plots from large landowners
make much higher incomes. According to a DEA
source, rent is approximately $600 per hectare while
yields, with double cropping, can amount to 1,600 to
5,000 pounds of marijuana (figure 3). This, he said,
would be sold for $2.50 to $7.50 per pound, for a net
annual income of about $16,000 per hectare.
Brokers
Brokers bring together small growers and high-vol-
ume exporters, an important but poorly documented
role in the Colombian marijuana trade. According to
a DEA informant, brokers aspire to a 70-percent
profit after costs. They buy marijuana from independ-
ent growers at $3 to $5 per pound and deliver it to
exporters, charging $9 to $26 per pound. The fees
charged by brokers vary with their costs and risks.
Thus, prices are lowest when exporters take delivery
of the marijuana in the mountains and highest when
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Figure 3
Income Per Hectarea by Export Crop, 1980
Cotton
Sugar
Tobacco
Rice
Marijuanab
0 500 1,000 1,500 2,000
a Calculated from statistics supplied to the World Bank by the Ministerio de
Agriculture, Commerico Exterior de Colombia.
b Assumes yield of approximately 5,000 pounds per hectare (double
cropping) sold at a minimum price of $2 per pound. Because most
individual plots appear to be about 1/2 hectare, the annual income for
independent marijuana cultivators is about S5,000.
9,500
10,000
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brokers assume greater risk and deliver the marijuana
to the coast. According to a 1978 DEA report, when
brokers are required to transport the marijuana long
distances, it is packed into 100-pound sacks and
loaded on mules rented locally at $25 to $35 per sack
carried. Under cover of darkness and protected by
guards, the mule train moves the marijuana from the
remote mountain areas to collection sites near roads
where it is transferred to representatives of the export-
ing organizations.
Exporters
While farmers and brokers profit handsomely, the
large exporting organizations reap the greatest gains
from the marijuana trade. Their income from a
successful operation is generally three to seven times
greater than the costs of putting it together. That is,
on a 20-ton shipment of marijuana, the exporter will
probably earn nearly $2 million in profit on a less than
$900,000 outlay for the marijuana and other ex-
penses. The degree of profit and the price charged the
US buyer depend on several factors: the extent to
which the Colombian organization is vertically inte-
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grated, the quantities involved, the method of smug-
gling, the terms of credit, and the relationship and
trust between exporters and importers. Frequently,
the price includes the cost of bribes to Colombian
police and military for protecting or overseeing the
operation.
Preparing for Export. After purchasing the marijua-
na, Colombian traffickers incur additional expenses in
preparing it for export. Drivers are hired and trucks or
mules are rented to transport the marijuana from the
initial collection points in the mountains to sites
managed by the principal traffickers near the coast or
to clandestine airstrips in the interior (figure 4).
Guards accompany the caravans and protect these
sites. We know little about the wages paid to the
guards and transporters, but, according to one DEA
source, trucks rent for from $600 to $1,200 each.
Several trucks are required to bring loads up to 20
tons out of the mountains. Hauling a similar shipment
by pack train may require 200 mules and a contingent
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Smuggling Methods
Most Colombian marijuana is smuggled by sea. The
largest, most expensive, and most profitable method
employs so-called mother ships. Mother ships, typi-
cally a mixed lot of fishing vessels and small coastal
freighters, deliver their loads from Colombia's north
coast to predetermined locations in international
waters in the Bahamas, the Gulf of Mexico, or along
the US south Atlantic coast. Voyages take six to 14
days one way. Seizure data and DEA reports show
that the mother ships commonly carry about 20 tons
of marijuana, although shipments range from 5 to 50
tons or more. Mother ships usually are under the
command and control of Colombian marijuana ex-
porters and are crewed by eight to 12 men, occasion-
ally including US citizens.
The mother ships are met by lighters, which are
usually operated by Americans on behalf of the
importer. Nearly any type of craft can serve as a
lighter, but shrimp boats from South Atlantic and
Gulf ports are frequently used as are sailboats,
yachts, and sleek, high-speed boats. Depending on
their size and capacity, these vessels typically carry
crews of two to jive men. In recent years, as investiga-
tions and seizures have increased, Colombian export-
ers have relied increasingly on distant-rendezvous
locations such as Chubb Cay in the Bahamas, Ala-
cran Reefs in the Gulf of Mexico, and the Misteriosa
Banks in the Caribbean Sea. In 1981 DEA sources
reported that mother ships in the Gulf of Mexico
probably did not approach closer than the 200-mile
territorial limit off the US shore. After pickup,
lighters deliver the marijuana to the coastal offload
sites in the United States or frequently in the Baha-
mas or other Caribbean islands for temporary stor-
age before being ferried by boat or aircraft to the US
mainland.
While most Colombian marijuana is smuggled by
boat, aircraft are also commonly employed. Some
major trafficking organizations have used aircraft
exclusively, while others have switched between boats
and planes depending on how they perceived the risks.
Air operations have advantages: smugglers have di-
rect control of their shipments from the time they
leave Colombia; deliveries are quick and generally to
a single location, personnel requirements are smaller
thereby enhancing security and reducing costs, and
coordination problems are minimized and entire ship-
ments can be delivered directly to the retail market.
Small twin-engined aircraft, some of which carry
4,000-pound payloads, are used extensively in the
Colombian trade. However, undercover investigations
and seizures show that larger twin-engined and four-
engined aircraft have been used to fly marijuana
loads of up to 12 to 13 tons deep into the United
States.
of 60 to 80 guards. According to DEA informants, as
many as 15 guards may be used to protect stockpiles
of 50 to 75 tons. Some 20 to 80 people would then be
needed to bring the marijuana for a 20-ton shipment
from the stockpiles to the beach, load it onto canoes,
and move it to a mother ship waiting offshore (figure
5). Depending on their roles, these laborers reportedly
are paid $50 to $375 per operation. Rents for canoes
range between $200 and $400; one DEA case record-
ed that larger transfer vessels were being rented for
$4,500 apiece.
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Shipping. Exporters also bear the costs for the mother
ships and their crews. Although they have large
capacities and make long voyages, many mother ships
are barely seaworthy; their dilapidated condition is
often the key that attracts the attention of US Coast
Guard patrols. Because of the relatively high risks of
smuggling, traffickers have opted to use relatively
cheap boats that can be discarded or forfeited without
incurring substantial capital loss. According to the
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Figure 4. Stash site, Guajira
Peninsula
Figure 5. Mother ship loading,
Portete Bay
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Balance Sheet: Hypothetical Colombian
Marijuana Exporter
The profits of Colombian marijuana exporters are
enormous and vary on each transaction. For illustra-
tive purposes, an exporter could expect to incur the
following income and expenses from a 20-ton ship-
ment of marijuana by using his own mother ship,
employing a broker to gather the marijuana, and
shipping five additional tons for a fellow exporter.
Thus, on a single transaction, an exporter, with
outlays of 8860,000, can gross over $2.7 million,
clearing a net profit of nearly $2 million. A more
vertically integrated organization would have sub-
stantially lower costs. More than likely, it would
circumvent the broker and buy directly from the
growers, thereby cutting costs by possibly $400,000.
In addition, it probably would own the transport
vehicles. The total cost estimate, therefore, probably
errs on the high side, representing a worst case
scenario for the supplier. Moreover, we may have
conservatively estimated total income. For large-
scale mother ship operations, then, the supplier's
income to expense ratio is believed to be no less than
3:1. Eliminating the rural broker and selling at a
higher price, say $75 per pound, raises the ratio to
6.5:1.
US $
Income
Sale of 40,000 pounds to US 2,720,000
buyers at $68 pound
$0.35 per pound fee for
10,000 shipping pounds belonging
to an associate trafficker
3,500
Total
Expenses
2,723,500
Purchase of 40,000 pounds of 640,000
marijuana from rural broker at
$16 per pound
Rental of trucks and wages
to drivers and guards to transfer
marijuana to coastal
stash sites
15,000
Payment to guards and packers 8,000
at stash site
Wages for 40 loaders at $200 each
Rental of 10 canoes at $300 each
Enlistment of eight seamen at
$1,000 each
8,000
3,000
8,000
Vessel pilot
Vessel navigator
Bribes
20,000
80,000
70,000
Fuel and provisions for a 20-day
voyage
10,000
Total
Net Profit
Ratio of income to expenses
862,000
1,861,500
3:1
US Customs Service, a sample of mother ships seized
since 1979 ranged in value between $112,000 and
$320,000, averaging $180,000. Thousands of dollars
worth of electronic navigation and communications
equipment were often the most valuable feature of
these ships. Exporters who do not own mother ships
can lease them from the organizations of fellow
Colombians. A DEA source explained that one
trafficker rented his ships for $50,000 per mission
while another leased his for $7,500 but was required
to leave a deposit equal to the value of the craft.
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Alternatively, suppliers without boats can rent space
in other traffickers' outward bound ships for, accord-
ing to one source, 35 cents per pound of marijuana
hauled.
A mother ship crew consists of several seamen, a pilot,
a navigator, and sometimes an engineer. The seamen
transfer the marijuana cargo, which can be more than
a thousand bales, from the mother ship to the contact
boat. DEA has learned that such operations have been
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known to last all night and, in some cases, have been
carried out over a series of nights. In addition, if the
mother ship is slated to make deliveries to more than
one organization, marijuana transfers must be repeat-
ed several times in the course of a voyage. Reported
salaries for seamen range from little more than $100
per voyage to, on rare occasions, as much as $10,000.
Many Colombians have made repeated smuggling
trips, and it is probable that reliable, trustworthy, and
experienced crewmen are paid in the higher range.
Traffickers commonly pay crewmen part of their
salary before the voyage and the balance upon their
return to Colombia. According to some detained
crewmen, their employers have promised them their
full wage and a bonus if they refuse to cooperate with
authorities if apprehended.
Pilots and navigators are paid much more handsomely
than crewmen. Reported salaries for Colombian pilots
range from $3,500 to $95,000 per voyage. Navigators
always receive the highest salary, which in one DEA
case was reported to be $150,000. Other reports show
that navigators have been paid $50,000, $70,000, and
$117,000 per run. These sizable outlays reflect the
importance of a good pilot and navigator to the
success of a mother ship operation. The history of the
Colombian marijuana trade is replete with failures
because the navigator could not locate the transfer
site, arrived too late to meet contact boats, or was
frightened away by perceived law enforcement au-
thorities. One Colombian supplier stated outright that
his smuggling odds improved when he used experi-
enced non-Colombian navigators. A trafficker in
Florida told undercover agents that many mother
ships were captured because Colombian pilots pan-
icked when they saw US Coast Guard patrols.
Bribery. A final expense to the exporters is bribery.
Allegations of payoffs to Colombian authorities have
surfaced in nearly all of DEA's most important
Colombian marijuana investigations since 1978.
Bribes of $50,000 or more per mission appear to be
commonplace. If unanticipated difficulties arise with
authorities, the payoffs can become even more severe.
However, considering the potential earnings, these are
attractive insurance premiums.
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Balance Sheet: Hypothetical
US Marijuana Importer
Estimating the average costs and profits of large US
marijuana importers is difficult because of the great
variation in methods and prices reported by DEA and
other informants. Nevertheless, a hypothetical bal-
ance sheet for a 20-ton marijuana deal is constructed
below. Although the importer must have a substan-
tial amount of capital and the labor of 24 associates,
the organizers of the operation make a net profit of
nearly $6 million and, like their Colombian counter-
parts, their income is nearly triple their expenses.
Income
US $
Income from sale of 40,000 pounds
to US wholesalers at $233
per pound
9,320,000
Expenses
Purchase of marijuana from
Colombian suppliers at $68
per pound
2,720,000
Rental of offload site
10,000
Rental of two contact boats with
their pilots at $100,000 each
200,000
Enlistment of two crewmen for
each contact boat at $50,000 each
200,000
Enlistment of 10 offloaders
at $10,000 each
100,000
Rental of three trucks and
drivers at $8,000 each
24,000
Rental of stash site
10,000
Enlistment of five unloaders at
stash site for $6,000 each
30,000
Payoffs to local authorities
80,000
Total Expenses
3,374,000
Net Profit
5,946,000
Ratio of income to expenses
3:1
The costs incurred for delivery and distribution
operations can fluctuate depending on shipment vol-
ume as well as the place and mode of exchange. For
example, purchase of the marijuana in Colombia at
$40 per pound would allow the importer to lower the
cost by more than $1 million. As a result, the ratio of
income to expenses would increase by one-half, and
net profit would increase by about 20 percent.
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Importers
Costs, operations, and profits vary markedly for im-
porters, depending largely on whether the marijuana
is shipped by boat or plane.
By Sea. An importer will gross nearly $9.5 million on
a 20-ton shipment of Colombian marijuana smuggled
into the southeast United States. The US trafficker
must arrange contact boats and crews, select and
secure offload sites, assemble offload crews, and line
up trucks and drivers to begin distribution of the
marijuana. The success of the operation depends on
the coordinated efforts of all of these individuals,
whose services do not come cheaply. Investigations by
DEA during Operation Grouper revealed that import-
ers were willing to pay as much as $40 per pound to
anyone who could successfully arrange and complete
an offload operation. (For 20 tons of marijuana this
would mean an outlay of $1.6 million.) Some of these
investigations revealed plans to import 50 or more
tons of marijuana, representing a potential expense to
the importers of $4 million. Yet at a $40 per pound
rate, such expenses represent only 17 percent of the
importers' gross income. With 29 percent of gross
income earmarked to buy the marijuana, the import-
ers retain 54 percent of their income as pure profit?a
return on investment of approximately 115 percent.
With respect to mother ship operations, contact boats
and crews are major expenses. In many cases the
importers own their contact boats, but it is also
common for them to recruit a trafficker to acquire
them, select offload sites, and rendezvous with the
mother ship. DEA files show that this has been
especially common along the Georgia and Carolina
coasts. For example, in the fall of 1979 a trafficker
from Myrtle Beach, South Carolina, was allegedly
paid $750,000 to arrange the importation of 14 tons of
marijuana from a Colombian mother ship. In a recent
DEA case, traffickers approached several boat owners
in Fort Myers, Florida and offered them $150,000
each for the use of their shrimp boats and crews to
offload a mother ship. The boat owners were to
receive $45,000 in advance with the balance paid
after the marijuana was successfully imported. Indi-
vidual crewmembers aboard contact boats are also
paid well. One DEA source who was extremely active
in boat operations in the Gulf of Mexico through late
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1980 confessed that crewmen received from $25,000
to $60,000 per mission plus one bale of marijuana
worth about $12,000. Another informant said he had
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Upon reaching the shore, the contact boats are un-
loaded quickly. On extremely large shipments two or
three dozen unloaders have been used. A wide range
of salaries have been paid to these people. Law
enforcement authorities interrupted one operation in
Florida where Mexican migrant workers were being
paid $200 apiece as unloaders. A large and very active
New Orleans organization that had been smuggling
marijuana since the early 1970s reportedly paid its
unloaders $1,000 each. A prominent Texas-based
group offered a trusted associate $50,000 to help
unload a shrimp boat and $150,000 to help with a
larger vessel. Other DEA defendants claim they were
paid $10,000 and $20,000 per boat.
Not all marine-borne marijuana is smuggled by
Colombian mother ships. For several years, US traf-
fickers have dispatched their own boats and crews to
Colombia's north shore. Importers benefit from this
arrangement because the marijuana will probably be
less expensive in Colombia, problems with coordina-
tion are reduced, and the overall operation is stream-
lined. However, they increase their chances of being
caught by being longer at sea with the contraband.
Since overhead investments are larger, they also risk
potentially greater losses if calamity strikes on the
way back to the United States. DEA files show that
almost without exception, boat captains have been
offered $100,000 to $250,000 to make this roundtrip,
with a portion paid in advance. Skippers using their
own craft probably try to get advance payments that
are at least equal to the value of their boats.
By Air. Because smaller shipments are smuggled by
air than by sea, airplane operations generate smaller
net profits. Operating costs are less by air, however,
and the risks are potentially fewer. Airplanes used in
this trade are generally valued from $70,000 to
$300,000, but they are not necessarily owned by the
traffickers (figure 6). Federal investigations show that
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Corruption: Another Business Expense
Marijuana traffickers often must ensure their opera-
tions through payoffs to police and local officials. A
successful marijuana smuggling operation may re-
quire payoffs amounting to $150,000 for an average
20-ton shipment. A failed operation may require
further payoffs to gain the release of crews, craft, and
in some cases, the seized marijuana.
Dozens of DEA informants have described marijuana
operations in Colombia that succeeded largely be-
cause local officials cooperated with the principal
suppliers within a framework of mutually agreed
upon rules. An informant claimed, for example, that
in June 1981 marijuana traffickers from throughout
Colombia and corrupt Colombian National Police
and Air Force officials planned to meet in Villavi-
cencio. They needed to decide how to handle a
reported surplus of marijuana consigned to them
while they were already burdened with large unsold
stocks. Among other considerations, they hoped to
establish guidelines to avoid similar excess supply
problems in the future.
In addition to official protection, Colombian authori-
ties often participate in loading operations. This has
been an especially common allegation by Americans
who have flown to Colombia for marijuana loads. A
DEA informant reported that a Colorado organiza-
tion had arranged to fly an aircraft to Colombia for a
marijuana and cocaine shipment. The airplane was to
be loaded in one hour with the assistance of local
military forces who were to be paid a total of
$75,000. Another trafficker related how his effort to
smuggle a DC-6 loaded with marijuana out of Co-
lombia nearly failed when, at the last minute, the
local military commander appeared on the scene and
demanded a $50,000 payment. One large-volume
Colombian marijuana supplier reported to DEA offi-
cials in Colombia that in 1980 he agreed to fly 11.5
tons of marijuana, at his expense, to a Florida
trafficker who had bought the shipment for $92 per
pound. Before leaving Colombia, however, the suppli-
er had to make $79,000 worth of payoffs including:
$18,900 to a Colombian Air Force officer in Villavi-
cencio, $5,600 to what he described as Colombian Air
Force intelligence personnel, $18,900 to authorities in
the antinarcotics unit of the National Police, $5,600
to the controller of the Villavicencio airport, and
$5,600 to other unspecified officials.
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Corruption: Another Business Expense (continued)
When protection breaks down and shipments readied
for export are seized by Colombian authorities, influ-
ential north coast traffickers have been able to buy
the marijuana back. For example, DEA learned in
February 1980 that military authorities confiscated
80 tons of marijuana on the highway between Santa
Marta and Riohacha. The owner of the shipment
reportedly paid $2.8 million to have his marijuana
released and to enlist the military's protection while
loading it aboard mother ships. According to a DEA
informant, the marijuana was subsequently shipped
in three loads to Puerto Rico and the Bahamas.
Another DEA informant reported a 1978 incident in
which a marijuana-laden vessel was seized by Colom-
bian authorities near Dibulla off the Guajira coast.
This source alleged that the boat and cargo were
released after about $130,000 in payoffs were made.
Bribes are also necessary when operations fail in
Colombia for one reason or another. A trafficker for
a Georgia organization, for example, told DEA un-
dercover investigators about a run his group made to
Colombia for 1,200 toil ,500 pounds of marijuana.
Upon arrival of their plane in Colombia, the flight
crew was arrested and jailed for 30 days. They were
released after a $100,000 payment allegedly was
made to unspecified officials in Colombia. Another
pilot told DEA that he had been detained in Colom-
bia in the spring of 1979 while on a marijuana run
and was released only after making a $200,000
"payoff bond."
The chain of payoffs continues as the marijuana is
smuggled north. Numerous officials in transit or
transshipment countries, such as the Bahamas, are
reportedly on the payrolls of the major trafficking
organizations. South Caicos Island, which in recent
years has been a favored refueling stop for drug-laden
aircraft from Colombia, is typical of areas where
corrupt officials have facilitated smuggling. Accord-
ing to DEA sources, individuals variously described
as "customs agents" and "airport controllers" ex-
tract a fee to allow airplanes they know are on drug
runs to refuel or to advise their pilots if the airport or
their aircraft is under surveillance by authorities.
One trafficking group reportedly bought these ser-
vices for $10,000 per flight; another made payments
of $25,000.
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Figure 6. Airplane on clandes-
tine airstrip, Guajira Peninsula
smugglers sometimes rent and often steal their air-
craft. The fact that many planes are crashed, ditched,
and abandoned in the United States testifies to their
expendability.
Flight crews are limited to pilots and copilots paid
through a variety of arrangements. According to one
pilot in a major DEA case, the trafficking organiza-
tion offered him a choice of a straight salary of
$100,000 per month or $15,000 per mission. Another
source reported that pilots were paid $50,000 per
flight, and a third informant volunteered that the
organization's pilots earned $20 to $30 per pound of
marijuana flown. Copilots generally are paid less.
Ground crews tasked with unloading the aircraft are
paid between $1,000 and $20,000 per person. Since
most shipments are less than 4,000 pounds, offloading
can be accomplished with relatively few laborers.
Many smuggling flights return to privately controlled
airstrips in rural regions of the southeast where their
owners are paid generously for their cooperation. A
group of north Georgia traffickers, for example, ar-
ranged offloads from DC-3 or larger aircraft for
$150,000; for smaller aircraft the fee was $50,000.
Their services included locating and securing the
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landing sites, offloading the airplane, and having local
air traffic controllers inform on enforcement surveil-
lance.
Transfers Inland. Importers do not always bear the
responsibility for distributing the marijuana. Many of
them line up buyers around the nation who take
possession of the shipment on arrival. In other in-
stances, importers transport the marijuana from the
offload site to nearby warehouses or farms. Some-
times, for an extra fee, importers will deliver the
marijuana to buyers outside the area where it was
imported. The wholesalers to whom it is sold then take
over the remaining distribution responsibilities. Those
importers involved with transporting the marijuana
need vehicles and drivers. DEA reports show that
drivers with their own trucks have been paid $9,000 to
$15,000 to transport marijuana interstate for major
organizations. Other drivers have agreed to rates
between $1.50 and $5 per pound and, in rare cases,
may have earned as much as $75,000 to $80,000
transporting portions of a single shipment.
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Bribery. Like their counterparts abroad, US smug-
glers protect their operations by bribing key authori-
ties. Defendants in DEA investigations have recount-
ed several incidents where payments by the importing
organization have been made to authorities in transit
countries as well as to local enforcement officers in
the United States. The amounts charged have depend-
ed on the services rendered and the quantity smuggled
and can easily amount to tens of thousands of dollars.
Profits and Credit Arrangements:
The Key to Suryiability
Colombian marijuana exporters and US importers are
adept at minimizing the physical and financial risks to
their operations. For example, importers at times
arrange and man alternate offload sites that can be
used in the event of confrontations with authorities.
This clearly was the intent of a group of Florida-based
smugglers who scheduled the importation of 25 tons
of Colombian marijuana through South Carolina.
According tc DEA sources, the first five tons to be
offloaded would ensure the success of the operation
and would be delivered to a secondary, secret "drop
site." The remaining 20 tons would then be smuggled
into the primary site in Edisto County. The minimum
success rate this organization was apparently willing
to accept was 5 out of 25 tons.
Importers and exporters also cooperate to ensure large
profits with a minimal financial exposure. DEA files
contain much evidence that exporters will lower their
selling price to importers willing to take delivery of
the marijuana in Colombia. More importantly, ex-
porters often extend credit or ship on consignment to
major and trusted importing organizations. Typically,
buyers will be required to advance a cash sum or a
certain percentage of the value of the shipment as a
downpayment. The importers agree to pay the balance
to the suppliers or their representatives in Florida
within a designated period after the shipment's safe
delivery. As documented in several of DEA's major
marijuana investigations, large trafficking organiza-
tions are not obligated to remit the outstanding
balance if their shipment is seized, lost at sea, or
otherwise not delivered. This shelters them from
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catastrophic financial losses, leaves them the opportu-
nity to conduct future transactions, and binds them
more closely to the Colombian suppliers. Meanwhile,
the downpayment usually guarantees the exporter a
small profit even if the shipment is lost. At worst, the
exporter suffers only a minor financial setback that
can be more than recouped by a subsequent success.
Credit arrangements vary. For instance, in preparing
to fly 11,000 pounds of marijuana from Colombia to
Pennsylvania in 1976, an importer investigated by
DEA was required to deposit $50,000 in a Colombian
trafficker's Florida bank account. In addition, the
suppliers requested a hostage be left in Colombia until
the deal was completed?not an uncommon practice.
DEA investigation of a 15.5-ton marijuana seizure in
North Carolina revealed that the marijuana was
bought on consignment in Colombia for $60 per
pound and a hostage was retained by the suppliers to
ensure furl payment. When Federal and local authori-
ties broke up the offloading operation and confiscated
the marijuana, a newspaper account of the seizure
was sent to Colombia to gain the hostage's release.
The best established importing organizations fre-
quently receive their orders on consignment, without
even making a downpayment. In 1980, for example,
DEA sources reported that a large New Orleans
organization made arrangements for several 20- to
30-ton shipments to the Gulf coast with no money
down. If interdicted or otherwise lost, a $200,000
deposit was required on a second shipment. One of the
largest Colombian marijuana trafficking organiza-
tions operating in the western Gulf of Mexico in 1981
claimed multiton boat shipments were being supplied
for $40 to $60 per pound with no money down. If the
shipment was seized, however, the organization re-
portedly owed the suppliers $10 per pound.
Implications for Interdiction
While DEA sources show great variations in prices,
costs, smuggling methods, and payoffs?and we can-
not be sure how close the average figures used in the
examples in this paper are to the true figures?it is
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nevertheless clear that the price structure, credits, and
volumes smuggled generate high enough profits for
both exporters and importers that they can absorb at
least several failures for each successful smuggling
operation. Although there are extensive manpower
and capital costs in assembling and carrying out a
major smuggling venture, these costs consume only 5
to 10 percent of the traffickers' gross profits from a
single shipment. In a DEA investigation, for example,
a Colombian trafficker told undercover agents he had
delivered 27 tons of marijuana to Moors Island in the
Bahamas where it was stolen before it could be
delivered to the United States. He claimed that if he
could recover and sell at least 5 tons (less than 20
percent of the initial load), he could still break even
financially. This is consistent with a statement by
another Colombian trafficker who, at the beginning of
a major interdiction campaign, said authorities could
seize four out of five of his shipments and he would
still profit.
Seizure statistics and National Narcotics Intelligence
Consumers Committee estimates indicate that ap-
proximately 15 to 20 percent of the marijuana shipped
from Colombia to the United States has been inter-
dicted over the past four years. Based on the costs,
prices, and profits outlined by the examples cited
above, however, we believe that the interdiction rate
would have to rise considerably?say to 70 percent or
more of the volume shipped?before the expense of
operating the large, well-organized marijuana traf-
ficking organizations would exceed the profit made
from the shipments that are not interdicted. Even
then, however, the probable marked increase in the
street price of the imported marijuana and the result-
ant lure of easy profits would prompt these organiza-
tions to select alternate routes and continue smug-
gling.
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Figure 7
Colombia: Principal Marijuana Growing Areas and Smuggling Routes
United States
Marijuana Transfer Point
Gulf
of
Marijuana
Mexico Transfer
Points
Caicos
Bermuda
(U.K.)
Atlantic Ocean
7oo
Marijuana Transfer
Point
Cayman 1;7
(U.K.)
Guantanamo
(U.S. Naval Base)
Caribbean Sea
Santa Marta,-- ? echo
Barranquiliej
Cartagena*
British Virgin
(U.K.);
4 tr
St. Chris
C=2,
Nether ands
Aruba Antil es
(Beth.)
Curacao
,Anguilla (1%
S.)
'Antigua a4&ct Barbuda
her-Nevis*
.Montserrat (1),.K.)
Guadeidire (Fr.)
Dominictiela
oSt. Lucia
St. Vincent and
the Grenadines9 Barbados
?
?Grenada
.c.-T Trinidad
and
Tobago
Pacific
Ocean
asrs Marijuana growing area
Main smuggling route
= = Alternate smuggling route
632803 10-82
Kilometers
BOGOTA
Colombia
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