Cali Drug Cartel Stretches Out Tentacles

Too big for Bogota, now cartel is eyeing Brazil

SHORTLY after the United States imposed sanctions last fall against companies owned by Colombia's recently jailed cocaine kingpins, the streets of this capital filled with thousands of workers-turned-protesters.

''We know nothing about drug traffickers, but we know our families depend on our jobs!'' yelled the marchers, employees of the Drogas La Rebaja drugstore chain. It's owned by Miguel and Gilberto Rodriguez Orejuela, the now-imprisoned sibling managers of the Cali cocaine cartel. The protests showed how tricky dismantling the cartel will be.

The exposure of the underworld links of legitimate companies like La Rebaja suggests that this giant of the illegal drug trade is running out of places to hide. The tremendous success of the cartel - measured by annual income estimated at more than $7 billion - may be its chief undoing.

''What happened to the Colombian cartels is that the need to launder money did them in,'' says Francisco Thoumi, an international drug-trade expert at the University of the Andes here. ''It became impossible for even a group so sophisticated as the Cali cartel to find enough legitimate investments for their cash, and they were exposed.''

Colombia's small size hurts Colombia's traffickers, Mr. Thoumi says. ''Every illegal organization needs a base where it can bribe officials to keep out of trouble and safely launder the bulk of its income,'' he says, ''but Colombia's ability to absorb is limited.''

Colombia - about the size of Texas, New Mexico, and Oklahoma combined, with a population of 30 million people - could only build so many sleek condominiums and tony commercial centers for electronics and designer boutiques, and only offered so many cattle ranches, sugar plantations, and store chains to absorb all the cash.

This explains in part why some of the Colombian cocaine operations have shifted to the larger Mexico. And it is why Thoumi and other Colombian drug experts worry that Brazil could be the next big growth area for South America's illegal drug trade.

''It's a big country, which makes laundering easier, and there are large areas with little or no government control,'' Thoumi says. On the other hand, one limit on Brazil's growth in the market might be the relatively small number of Brazilian immigrants in the US. One of the keys to Colombia's rise to the top as a cocaine distributor was the large Colombian communities in cities like Miami, New York, and Houston.

Although no one is predicting the demise of Colombia's drug trade, the trouble the Cali organization has encountered over recent months - five of its top seven chiefs were put behind bars last year - indicates that the days of the giant Colombian cartel may be over. In its place drug-enforcement officials and investigators already are finding a proliferation of smaller organizations looking to profit from Cali's disarray.

''Instead of this formidable giant we now have cartelitos,'' says Jorge Ramirez Ocampo, president of the Colombian Exporters Association. ''But these smaller cartels won't have the corruptive capacity of Cali, nor will they easily have the organizational reach that made Cali such an international power.''

Experts paint a future cocaine-trade picture where more South American countries are in on the action, and where the Colombians have relatively less control but a still-sizable operation. That's because the know-how and web of legitimate businesses they have built up are largely intact. And since the Cali cartel's mastermind, Jose Santacruz Londono, walked out of his high-security prison in Bogota last November, the cartel has presumably regained some of its clout.

''There are indications of about a $1 billion decline'' in Colombia's share of the wholesale cocaine market over the last eight months, says Salomon Kalmanovitz, a director of Colombia's central bank and a drug-trafficking expert. He attributes the drop to the ''mounting cost'' of the illegal drug trade in Colombia, after a year of increased drug seizures, stepped-up crop eradication, and dozens of high-profile and less-touted arrests of cartel operatives.

But Colombia's tarnished star as the wholesale distributor of choice of the white powder may simply mean that those further along the chain - in Mexico, for example - will have to deal with a wider variety of supplier countries. ''They're going to have to work more directly with suppliers from Bolivia, Peru, and Brazil,'' Mr. Kalmanovitz says.

In the meantime, experts say operations like the Cali cartel can be expected to focus more on their legitimate holdings, managed with the help of the bevy of high-powered business managers they have cultivated from among the graduates of the world's best business schools. Illegal drugs will still be a profitable part of the ledger, but at a reduced and less ostentatious level. From his jail cell in Bogota's Picota prison, Gilberto Rodriguez Orejuela has baptized this the ''new cartel.''

The ''new cartel'' will not be easy to attack, US officials admit. The Cali cartel alone is believed to own more than 100 legitimate companies in the US, involved in everything from car sales to pharmaceuticals.

Comparing the fight against the cocaine cartels to the decades-long battle against US-based mafia families, American Ambassador to Colombia Miles Frechette says that despite recent victories ''the battle is a long-term one that will stretch over 15 to 20 years.''

One thing that could throw off that time line is the lenient sentencing convicted drug traffickers face in Colombia.

In the late 1980s and early '90s, Colombian and US officials went after the then-supreme Medellin cartel, run by the infamous Pablo Escobar, who was killed in a police ambush in 1993 after a prison escape. Now, just as the Cali cartel is decapitated by capture of its lords, several Medellin kingpins approach the end of the short sentences they negotiated with Colombian authorities.

Only to take back the top of the cocaine kingdom?