PFIAB

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP88G01117R001003990002-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 23
• Document Creation Date: December 22, 2016
• Document Release Date: March 30, 2011
• Sequence Number: 2
• Publication Date: September 9, 1986
• Content Type: MEMO

Sanitized Copy Approved for Release 2011/03/30: CIA-RDP88G01117R001003990002-7
ET
9 September 1986
MEMORANDUM FOR: Deputy Director of Central Intelligence
1. You're scheduled to attend a PFIAB meetin tomorrow from 1000 to
1200. You've been asked to address the new Contra 25X1
support package and our strategic view of the drug situation in Latin
America and the Caribbean. You will be accompanied by 7~X~
2. During the day, the board will also hear from Pete Aldridge on
launch issues (dust before your appearance), and Deputy Secretary
Whitehead and DEA Administrator Lawn on their views of the drug problem.
The board will also get damage assessments from the Navy and NSA on the
Pollard and Pelton cases.
3. After your opening remarks,) (will address the
above-mentioned subjects. They have been told to prepare 20-30 minutes
worth of remarks and to leave time for Qs and As.
TAB A Draft comment (scope of drug problem, ties 25X1
to insurgencies, and foreign involvement.
TAB B Draft comments) Ion broader economic and
political impact of drug problem in the mayor producing
nations in Central America.
ET
1 R! 3
~ 7 ~1-~j'v
Sanitized Copy Approved for Release 2011/03/30: CIA-RDP88G01117R001003990002-7
 Sanitized Copy Approved for Release 2011/03/30 :CIA-RDP88G01117R001003990002-7
Sanitized Copy Approved for Release 2011/03/30 :CIA-RDP88G01117R001003990002-7
 Sanitized Copy Approved for Release 2011/03/30: CIA-RDP88G01117R001003990002-7
Talking Points
The Drug Problems in Latin America and the Caribbean
A Strategic Perspective
o I would like to begin with some observations about the
drug trade in Latin America and the Caribbean that are
likely to pose increasing problems for US interests in
these regions during the next few years.
The Cocaine Trade
o The cocaine trade and the powerful trafficking
organizations that control it--primarily the Colombians--
will remain the most important drug force throughout the
region for the foreseeable future.
--We estimate last ,year's coca harvest in South
America was between 140,000 and 200,000 metric
tons of leaf, or about one metric ton per
hectare cultivated. Peru, Bolivia and (",olombia
are the major producers, but coca fields have
also been found recently in Brazil, Ecuador, and
Venezuela.
--Of the major source countries, Peru grew enough
coca last year to produce just under 100 metric
tons of cocaine; coca grown in Bolivia could have
produced about 80 tons of cocaine; and coca leaf
grown in Colombia could have produced about 25
tons of cocaine.
o Traditionally, Colombia has been the primary location for
processing coca base and paste from Peru and Bolivia into
,RET
Sanitized Copy Approved for Release 2011/03/30: CIA-RDP88G01117R001003990002-7
 Sanitized Copy Approved for Release 2011/03/30: CIA-RDP88G01117R001003990002-7
cocaine; Colombian traffickers also dominate worldwide
cocaine distribution networks. Since the late 1970's
Colombian traffickers have formed cartels--the "Medellin
Cartel" is undoubtly the most powerful and infamous--
responsible for controlling the flow of base and paste
into Colombia, cocaine processing, and at least the first
level of distribution.
o All of this began as an attempt to counter the power of
Bolivian and Peruvian paste and base brokers and
increasing demands of independent processors and pilots.
Competition among Colombian cartels has been all but
eliminated and consolidated shipments, financial
structures and overall cooperation are the norm; they even
pool resources to insure mixed cocaine shipments against
loss.
o But the dynamics of the cocaine trade are changing and
this will continue for the next few ,years. Because of the
cocaine glut on the international market, enforcement
efforts against cocaine labs, and a reduction in the
availability of precursor chemicals--primarily ether--
Bolivian and Peruvian traffickers are becoming more
involved in cocaine processing and distrihution, and
trafficking patterns also are being established in new
areas including Argentina, Venezuela, Ecuador, Mexico and
the US.
o Colombian cocaine cartels have not been idle as all of
this has unfolded, and a case can be made that they have
2
Sanitized Copy Approved for Release 2011/03/30: CIA-RDP88G01117R001003990002-7
 Sanitized Copy Approved for Release 2011/03/30: CIA-RDP88G01117R001003990002-7
had a heavy hand in charting the course of recent
developments. Colombian organizations now operate
independently in Peru and Bolivia and also have
transnational links with major trafficking organizations
in these countries and elsewhere, particularly Mexico.
o The stage also is set for the "crack" epidemic to further
alter the cocaine trade. Since "crack" is essentially
coca base, traffickers throughout coca producing countries
could attempt to buy into this marketing phenomenon by
shipping more base into the US, thus eliminating the need
for ether and more sophisticated cocaine labs.
The Caribbean
o Increased enforcement pressure on traditional smuggling
channels through the Caribbean has forced traffickers to
develop new routes that have drawn more island nations
into the drug trade than ever before.
o The Jamaican Government has thus far made substantial
gains in its heightened effort to disrupt marijuana
production and trafficking. We estimate that last ,year
growers harvested about 900 metric tons of marijuana or
roughly half the amount they harvested in 1984. But
Jamaica's long-established role as the Caribbean's only
significant producer of marijuana for the US market
created the trafficking infrastructure that has led to the
emergence of Jamaica as an important transit point for
cocaine. Although Colombian organizations spurred this
~ 25X1
Sanitized Copy Approved for Release 2011/03/30: CIA-RDP88G01117R001003990002-7
 Sanitized Copy Approved for Release 2011/03/30: CIA-RDP88G01117R001003990002-7
development, Jamaican traffickers are now claiming a
larger role.
o The size and frequency of drug seizures in the Cayman
islands also increased in 1985, as did visits to the
islands by known traffickers.
o Haiti and the Dominican Republic increasingly are serving
as transshipment points for drugs destined for the US.
Well organized trafficking networks controlled by
Colombians, Jamaicans and US citizens now operate
frequently out of these countries. Most drugs transiting
Haiti are carried by ship and the Dominican Republic has
been linked most to air smuggling.
o There has also been an upsurge in trafficking through the
Lesser Aentilles, an area poised for further drug
problems.
--Drug shipments from Colombia increasingly are
transshipped through Aruba and Curacao.
Martinique and Guadeloupe now serve as transit
points for cocaine destined for Canada, Europe and
the US.
expressed alarm over the island's growing role in
the drug trade; and influx of cocaine is the
greatest concern.
--Recent drug seizures indicate Antigua is being used
by Colombian traffickers to ship cocaine and
4 25X1
Sanitized Copy Approved for Release 2011/03/30: CIA-RDP88G01117R001003990002-7
 Sanitized Copy Approved for Release 2011/03/30: CIA-RDP88G01117R001003990002-7
marijuana to the US and Canada.
--Trinadad and Tobago's involvement in the
international drug trade has increased sharply
since the early 1980's and the two-island nation
now is an established trafficking gateway to the
Eastern Caribbean. Drug abuse is on the rise and,
in addition to widespread police corruption, the
drug trade is responsible for increased imports of
illegal weapons.
--Despite these developments, the Bahamas will remain
the most important drug transit in the Caribbean
area for the foreseeable future.
Central America
o Narcotics traffickers traditionally have used Central
America as a transshipment/stopover point for South
American drugs bound for the US. The drug trade in
Central America has flourished during the past several
years and drug production, refining, and trafficking may
be on the rise throughout the region.
--Law enforcement agencies in Costa Rica, El
Salvador, Guatemala, and Honduras reportedly have
been making many small but significant marijuana
and cocaine seizures as well as confiscating
processing materials and laboratories.
--Marijuana cultivation reportedly was up in 1985 in
Belize, Costa Rica, Guatemala, and Panama.
~ 25X1
Sanitized Copy Approved for Release 2011/03/30: CIA-RDP88G01117R001003990002-7
 Sanitized Copy Approved for Release 2011/03/30: CIA-RDP88G01117R001003990002-7
--Aerial reconnaissance shows relatively large
opium poppy field in Guatemala, 25 miles east of
the Mexican border.
o Panama will remain a vital link in the Central American
drug trade both as a money-laundering center and as a
transit point for US-bound cocaine and marijuana. The
Colon Free Trade Zone offers unique advantages for drug
operations and trafficking through Panama's airports, and
ports outside the Free Zone also is commonplace.
o Of all the drug problems facing the US today, Mexico is
one of the most serious, and things are likely to get
worse. Mexico's drug control program is in trouble, and
there has been a marked increase in recent years in the
volume of drugs being produced in or transiting Mexico.
--Opium production for processing into heroin has
risen from about 17 tons in 1983 to some 47 tons in
1985 according to CIA estimates. DEA estimates of
Mexican opium production are based on herion
seizure data and are somewhat lower. DEA does
concur, however, that since 1983, opium
availability in Mexico has risen markedly, and 1)EA
judges that last ,year Mexico accounted for about 39
percent of the heroin reaching the US.
--Our knowledge of Mexican cannahis cultivation for
processing into marijuana is thin because
information is sketchy and harder to corroborate.
T)EA has estimated, based on seizure data, that
Sanitized Copy Approved for Release 2011/03/30: CIA-RDP88G01117R001003990002-7
 Sanitized Copy Approved for Release 2011/03/30: CIA-RDP88G01117R001003990002-7
SECRE
output has increased from 1300 tons in 1983 to as
much as 3500 tons in 1985, and that Mexican
marijuana producers last year were responsible for
about 27 percent of the foreign-produced supplies
of this drug reaching the US.
--Even at its best in the late 1970s and early 1980s,
Mexico's antidrug program never threatened Mexico's
role as major drug-producing country; there is
little hope that future antidrug programs will fare
any better. And there is every reason to believe
that the Mexican cocaine connection will increase
in the ,years ahead.
Drug-Related Instability
o Our concerns about drug-related instability in Latin
America and the Carr.ibean are focused on four issues:
--Powerful trafficking organizations can corrupt
and undermine political, economic, social, and
security institutions within democratic nations.
--Some insurgent groups are heavily involved in
trafficking and others have the opportunity,
motive, and capability to participate in the drug
trade.
--There are reports of sporadic involvement between
some terrorist groups and drug traffickers.
--Some sovereign states such as Cuba and Nicaragua
support or at least condone international drug
7 25X1
Sanitized Copy Approved for Release 2011/03/30: CIA-RDP88G01117R001003990002-7
 Sanitized Copy Approved for Release 2011/03/30: CIA-RDP88G01117R001003990002-7
trafficking.
o I'd like to comment on the later three issues and
will address the impact that trafficking
organizations can have on democratic nations in the
region.
Insurgent Involvement
o In Colombia, we believe that three insurgent groups have
varying degrees of involvement in the drug trade.
--The largest and most formidable of these is the
Revolutionary Armed Forces of Colombia (FARO). It
has guerrila "fronts," and about half of these
operate in coca and marijuana area. There is
evidence that one such front was established in
southeast Colombia expressly to earn profits from
coca production. The FARO also trades drugs for
guns with organized criminal smugglers; exacts fees
from traffickers for use of FARO-controlled
territory; and taxes coca producers in its
strongholds.
--'I~vo other much smaller insurgent groups in
Colombia, the National Liberation Army (F.LN) and
the Popuplar Liberation Army (EPL), may also
extort money from coca growers, and engage in some
marijuana growing and trafficking, although
probably at a less organized level than the FARO.
o Also in Colombia, the 19th of April Movement (M-19)--which
g 25X1
Sanitized Copy Approved for Release 2011/03/30: CIA-RDP88G01117R001003990002-7
 Sanitized Copy Approved for Release 2011/03/30: CIA-RDP88G01117R001003990002-7
conducts much of its activity as an urban terrorist
organizatioon but has formed several rural units--in
October 1981 used the drug-smuggling apparatus of a major
Colombian marijuana trafficker to bring a large shipment
of weapons into Colombia. More recently, an NI-19 special
force unit Bogota was sent to the Ecuadorean border to
work with cocaine traffickers to earn money for the M-19.
o In Peru the Sendero luminoso (,SLO), a Maoist
insurgent/terrorist group based primarily in Ayacucho
region of Peru, extorts money from traffickers operating
in its territory, which is one of Peru's largest coca
growing regions. But to date, we have no reliable
evidence that SL's involvement in narcotics as yet is more
extensive than this
claim that
money earned from marijuana cultivation on both
sides of the Guatemala-Belize border supports
Fuerzas Armadas Rebeldes (FAR) guerilla activity in
Guatemala with the purchase of arms, medicine and
other supplies. in
Guatemala also reports that a FAR unit is growing
marijuana which it sells in Belize to purchase
arms.
that a major trafficker in
Belize has smuggled arms to El Salvador through
Sanitized Copy Approved for Release 2011/03/30: CIA-RDP88G01117R001003990002-7
25X1
25X1
 Sanitized Copy Approved for Release 2011/03/30: CIA-RDP88G01117R001003990002-7
Guatemala.
--In 1984, that the
People's Revolution Army (ERP) in E1 Salvador was
cultivating marijuana as a cash crop, and
Salvadoran officials recently confiscated cocaine
from a Salvadoran trafficking group with alleged
ties to the M-19.
Cuba's Role in the Drug Trade
o Cuban authorities have aided selected drug traffickers
since the 1970s. In most cases, this involvement has
entailed permitting these traffickers to use Cuban land,
water, and air space to avoid US interdiction efforts.
Cuba is probably used as a transshipment point for some
Colombian drugs bound for the US.
--We also have some evidence that Cuba has in the
past assisted, and may continue to assist, selected
traffickers by laundering drug profits. Sources
have reported that Havana views its services to
traffickers as a way to obtain hard currency.
--But we judge that Cuban involvement with
traffickers is part of a broader trend toward
closer cooperation between Havana and various
elements of international smuggling organizations
to further Cuban policy aims. In at least one
instance, for example, Cuban involvement was aimed
at facilitating arms shipment to the Colombian M-19
10
Sanitized Copy Approved for Release 2011/03/30: CIA-RDP88G01117R001003990002-7
 Sanitized Copy Approved for Release 2011/03/30: CIA-RDP88G01117R001003990002-7
terrorist group by using well-established drug-
smuggling networks.
o Although we cannot quantify the amount of money Cuba earns
through drug trafficking, we are concerned that it could
be used as a fund to support intelligence operations or
subversive activities. If Cuba were to put out a general
welcome mat for any substantial fee, payable in hard
currency, the financial gains would probably be
considerable and could help finance Cuba's subversive
activities and friends in the region.
--At the same time, it would give Cuban officials
and agents greater access to smuggling apparatus
that could be used to ship arms and material or
infiltrate subversive agents.
--At present, we judge that Cuba will continue to
deal only with selected major traffickers, who are
less likely to be apprehended and who have
international resources and connections that are
useful to Havana.
Nicaraguan Involvement
o High-level government officials in Nicaragua conspired
with Colombian drug traffickers on at least one well-
documented occasion in June 1984 to smuggle cocaine into
the US. The Minister of Interior and a subordinate were
directly involved. Other reporting, buttressed by Drug
Enforcement Administration evidence, indicates that
it 25X1
Sanitized Copy Approved for Release 2011/03/30: CIA-RDP88G01117R001003990002-7
 Sanitized Copy Approved for Release 2011/03/30: CIA-RDP88G01117R001003990002-7
Minister of Defense Humberto Ortega (and probably other
members of both the ruling Sandinista National Directorate
and the Junta) is at least aware of such involvement in
the drug trade.
--Reports linking Nicaraguan officials with schemes
to smuggle drugs, however, have appeared since
March 1981.
--Although we cannot discount Nicaragua's interest in
using drug-smuggling networks to facilitate
supplying arms and material to its clients in the
region, its main interest in drug smuggling appears
to access to hard currency; some may be diverted
for personal use.
--The flexibility and tenacity of the Colombian
drug smugglers and the lucrativeness of the
operation could result in additional attempts by
them to use Nicaragua as a transshipment point.
12 25X1
Sanitized Copy Approved for Release 2011/03/30: CIA-RDP88G01117R001003990002-7
 Sanitized Copy Approved for Release 2011/03/30 :CIA-RDP88G01117R001003990002-7
Sanitized Copy Approved for Release 2011/03/30 :CIA-RDP88G01117R001003990002-7
 Sanitized Copy Approved for Release 2011/03/30: CIA-RDP88G01117R001003990002-7
SE~ET
9 September 1986
The Narcotics Trade and Latin America
PFIAB Talking Points
10 September 1986
Latin America's multibillion-dollar international narcotics trade poses
a threat for US security interests because the economic power of
trafficking organizations can undermine the political, social, and security
institutions within democratic nations.
-- It already poses serious socioeconomic problems for Mexico,
Colombia, Bolivia, and Peru, the mayor focus of this briefing.
-- Other countries now benefiting from the narcotics trade--and
vulnerable to its debilitating influence--include Panama, Jamaica,
The Bahamas, Belize, Ecuador, Paraguay, Brazil, and Venezuela.
The clandestine nature of the drug trade makes precise estimates of its
economic size impossible, but a review of intelligence publications
indicates that it has become a sizable economic force in Latin America.
-- The estimated value of illegal drugs produced in Bolivia, Colombia,
Jamaica, Mexico and Peru ranged from 162.9 to 1