Drug Smuggling, Cartels and Money Laundering: Former Undercover Fed Agent Bob Mazur Q&A

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Joaquín El Chapo Guzmán
Joaquin "Shorty" Guzman is escorted by soldiers during a presentation at the Navy's airstrip in Mexico City.

Years ago, federal investigator Robert Mazur helped bring down Colombian drug lord Pablo Escobar as an undercover agent. In the 1990s, he worked for the U.S. Drug Enforcement Administration and in criminal investigations for the Internal Revenue Service.

He has seen first-hand how money laundering and drug smuggling works across borders. His book "The Infiltrator," which chronicles his time inside Colombia’s infamous Medellin cartel, is under development for the big screen, with a movie due for release in 2014.

Mazur spoke to IBTimes in gritty detail about how international drug cartels and money laundering works.

Q: Will the capture of Mexican drug trafficker Joaquin “El Chapo” Guzman impact the broader drugs trade?

A: There is one issue that will tell us whether there’ll be any long range change: what the Mexican authorities do with him. If they extradite him to the U.S., on an expeditious basis, that will quell some concerns. But corruption, not just in the Sinaloa cartel, runs so deep in the culture of Mexico that there may be some apparent advantages to not extraditing him.

No one can deny that in the last 20 years, the greatest nightmare of every single drug lord, whether from Afghanistan, Thailand, Colombia or Mexico, is extradition to the United States. Because they know they’re going to go to prison here for the rest of their lives. They’re going to have to give up their most precious information to have even a chance of avoiding prison in the United States. The question is: does [Mexican President] Enrique Peña [Nieto]have the courage to do that?

Or will they stand behind a claim of sovereignty that they owe it to the Mexican people, to prosecute him first in Mexico? ...We can gauge the long range impact based on the acts of the Mexican government between now and the next year or so, as decisions are made about custody.

In the short term, I guarantee you that everyone close to Guzman has gone underground, isn’t talking to anyone, and is changing their mode of operation. All this will take a little bit of time, and then they will reorganize with new leadership. The longer it takes for them to do that, the weaker they’ll be perceived by other cartels – so there’ll be a greater temptation to use violence to take back their assets, which are their routes and their jurisdictions. I think there’ll be some violence coming up.

Q: Is strong U.S. demand for drugs a fundamental driver of the illicit drugs trade?

A: Yes, unequivocally. I was reluctant as an agent to accept that premise, but the fuel for this engine is the insatiable appetite for drugs, not just in the U.S., but in Europe and around the globe. We lead the way, there’s no doubt about that.

We need to look in the mirror and recognize that, for the high someone thinks they’ll enjoy, there’s a domino effect on many different levels. We now have cartels that work closely with terrorist organizations. We’re financing terrorist activity; we finance murders; we finance gun running; we finance all of that.

People like to throw stones at the United States for things like [Operation] Fast and Furious and other undercover operations that facilitate crime – but there’s nothing that facilitates crime more than the purchase and consumption of illegal drugs. … If you want to know whether the war on drugs has had any impact whatsoever, look at the number of individuals who consume illegal drugs and the number of crimes committed by people who are dependent on illegal drugs.

Q: Has the so-called War on Drugs progressed well?

A: If you look at an ongoing court case in Chicago, against [Sinaloa cartel operative] Jesus Zambada – when you read the pleadings in that case, you basically see the exact same things I saw 25 years ago, in Colombia.

Now you have 747 cargo planes moving tens of tonnes of cocaine at a time, or semi-submersible ships and submarines: small planes and fishing boats. You have Mexican law enforcement authorities handling offloads from commercial flights, and landings at "safe" law enforcement-controlled airports. You have basically the identical characteristics from the leaders of the drug world as you did 25 years ago.

We taxpayers have thrown $0.5 trillion towards this problem in the past several years. Yet we have the exact same things going on today.

Indictments in San Diego reveal that millions were paid to prosecutors and law enforcement in Mexico for the Sinaloa cartel to operate without fear of prosecution in their own country. That’s exactly what Pablo Escobar did 25 years ago. When I was there, they were very much involved in making payoffs to the Colombia Senate to have cases fixed and laws passed.

Organizations also freely use Venezuela as a springboard for drugs to Africa. There’s clear proof that the cartels have bought governments there. Guinea-Bissau is the best example – the U.S. Drug Enforcement Administration indicted the head of their army just last year. … But it’s not just limited to Guinea-Bissau. Togo, Mali, Ghana – these nations are very well documented to collectively be the Mexico in that part of the world for the cartels, a trans-shipment point for illegal drugs sent from South and Central America, moved through Africa and up into Europe.

There have been a lot of very talented people who have tried to impact this. Unfortunately, if we want to be truthful to ourselves, we face a situation where we’ve really had no change. We win battles here and there, but in the long run, the overall profile of what’s occurring here disturbs me.

Q: You’ve said some bankers should be imprisoned for failing to stop money laundering. Can you elaborate?

A: The whole theory that the [bank] compliance department is the first line of defense – I’ve never heard of anything more absurd. The first line of defense are account manager specialists, who deal with these people and who know damn well who they’re dealing with.

What we should be looking for: Who is out there representing banks, soliciting deposits from account holders and setting up accounts in the first place? We have this misnomer that somehow account holders are tricking banks into laundering $400 billion a year: Nothing is more absurd than that.

I was on the ground – I can tell you that these people want a guarantee from their account relationship manger, a guarantee that their money is going to be safe and that they’re not going to lose it. … Why doesn’t the Department of Justice look at the knowledge or relationships that the account manager had?

How many hundreds of millions must you knowingly accept from drug traffickers before you lose your license? Unless and until a bank of significant size not only admits to criminal activity, but loses its license and has officers who commit money laundering offenses imprisoned, this conduct will continue day and night. And let me tell you: This is critical to the lifeblood of the cartels. Because if they can’t convert that currency into bank balances that look legitimate, their ability to corrupt is diminished. 

Q: What can be done to prevent money laundering?

A: Every single time we put a major drug trafficker in jail, we should also give the highest priority to getting information from them, about who in the financial world helped them launder their money. A lot of the time, they don’t like to give that information up, because they try their best not to forfeit all their money. The people they’d be giving up have the keys to their fortunes.

We also have an obligation to refine the information and pursue the facts on the repatriation of U.S. currency around the world, because our currency is the No. 1 currency used in the underworld for payments.

Any banks dealing in U.S. dollars must have a legal representative within the borders of the U.S. to accept due process…We can deliver subpoenas to them and force them to provide information related to the massive repatriation of U.S. dollars, if there are unusual trends.

If there was one thing that’d make my day, it’s somebody waking up at the Department of Justice and realizing that placing oppressive regulations on banks with respect to compliance is not the answer. … The cartels deal with highly sophisticated people who manage their financial affairs. Those are the people we need to go after.

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