Drug cartels make billions in the US, but somebody else is doing the selling

Bales of cocaine on display aboard the US Coast Guard cutter James, in front of the ship’s crew and its helicopter, in Ft. Lauderdale, Florida, November 15, 2018. Christopher Woody/Business Insider
  • US authorities continue to seize immense amounts of drugs coming to the US from South America.
  • Consistent demand and established routes make the US an appealing market for traffickers.
  • But in the US, relationships between wholesale distributors and retail-level sellers are murky.

FT. LAUDERDALE, Florida – Mexican transnational criminal organisations, often called cartels, have spent decades developing connections and routes to move cocaine from South America, across the Pacific and Caribbean, through Mexico, and finally into the US.

But once those drugs are in the US, the traffickers who’ve shepherded them north take a different, more hands-off role.

While cartels rely on the voracious US drug market, the personnel who handle their wares on US soil have a different role from the ones working in Latin America, according to Ariana Fajardo Orshan, the US Attorney for the Southern District of Florida, speaking aboard the US Coast Guard cutter James in Ft. Lauderdale.

‘It’s called transnational for a reason’

US Coast Guard James drug offload cocaine drugs bricks
Bricks of seized cocaine aboard the US Coast Guard cutter James in Ft. Lauderdale, Florida, November 15, 2018. Christopher Woody/Business Insider

“Cartels aren’t here in the United States. There are people who work for the cartels within the United States,” Fajardo Orshan said Thursday, standing in front of nearly 38,000 pounds of cocaine seized in the eastern Pacific Ocean by the US Coast Guard.

“The truth here [is] there aren’t people working who are part of the cartel,” Fajardo Orshan added in Spanish. “They are people who help the cartels.”

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Cartel operations in the US are usually overseen by Mexican nationals or US citizens of Mexican origin, the US Drug Enforcement Administration said in its 2017 National Drug Threat Estimate.

Links between transnational criminal organisations, or TCOs, and the US market are murky, and their operations in the US are generally considered to be opaque by design.

“US-based Mexican TCOs are composed of various compartmentalized cells assigned with specific functions such as distribution, transportation, consolidation of drug proceeds, and money laundering,” the DEA said in its 2017 NDTA.

US Coast Guard James drug offload cocaine drugs bricks
Bricks of cocaine are visible among bales of the drug seized by US Coast Guard crews in the eastern Pacific Ocean, aboard the US Coast Guard cutter James in Ft. Lauderdale, Florida, November 15, 2018. Christopher Woody/Business Insider

Cartel operations in the US are typically divided into a supply chain, according to the DEA, with operators at one link in the chain unaware of other parts of the operation.

“In most cases, individuals hired to transport drug shipments within the United States are independent, third-party contractors who may be working for multiple Mexican TCOs,” the report says.

In many cases, those third-party distributors are US-based street gangs. Unlike Mexican cartels, those gangs have the local knowledge and the manpower to manage street-level distribution.

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“US-based Mexican TCO members generally coordinate the transportation and distribution of bulk wholesale quantities of illicit drugs to US markets while retail-level distribution is mainly handled by smaller local groups and street gangs not directly affiliated with Mexican TCOs,” the 2017 DEA report notes.

“In some scenarios, Mexican TCOs collaborate with local criminal groups and gangs across the United States to distribute and transport drugs at the retail level.”

US Coast Guard Cutter James cocaine brick drug bust seizure
Bricks of cocaine visible among bales of cocaine seized by US Coast Guard ships, aboard the USCG cutter James, in Ft. Lauderdale, Florida, November 15, 2018. Christopher Woody/Business Insider

Gangs with connections to Latin America – like MS-13, which was founded in Southern California but is now based in Central America – often partner with cartels to distribute drugs in the US.

But other US gangs, like the Bloods and the Crips, and even white-supremacist groups like the Aryan Brotherhood, have also established links to Mexican cartels.

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“These are intricate networks of distribution that include Americans on this side of the border that are part of their network,” Sen. Marco Rubio, a Republican from Florida, said in mid-2017.

“It’s called transnational for a reason, and that is these are intricate networks and organisations that operation across borders, using nationals from multiple countries, including distributors at the state and local level that are Americans,” Rubio added.

The DEA has published analyses of which TCOs control distribution in US cities, often finding multiple cartels present in larger areas. But shifting ties between groups and tenuous links across borders complicate such assessments.

“What is an operative?” David Shirk, a professor at the University of San Diego, said in an early-2017 interview.

“Are we talking about, like, your man in Durango, Colorado, who’s sort of reporting directly back to ‘Chapo’ Guzman, or are we talking about basically the fact that there’s someone who has a connection in that small town that is able to move drugs or obtain drugs from a Mexican supplier?” added Shirk, director of the USD’s Justice in Mexico program.

‘We’ve got to stay ahead’

The lucrative nature of the drug trade, with prices buoyed by the risks inherent in smuggling, ensure there are always people willing to get involved.

US Coast Guard cutter James cocaine drug seizure offload
A pallet of interdicted cocaine being offloaded from the Coast Guard Cutter James by crane in Port Everglades, Florida, November 15, 2018. Coast Guard/Petty Officer 3rd Class Brandon Murray

In Colombia, the world’s biggest producer of cocaine, a kilo of the drug, which is about 2.2 pounds, can fetch prices in the low five figures – usually about $US2,000. Once it reaches Central America or Mexico, the value of that kilo increases considerably, typically to between $US10,000 and $US20,000.

In the US, the wholesale value of that kilo rises again, up to $US25,000 or more. Once broken down and diluted with sometimes dangerous additives for retail sale, a kilo can end up being sold for a total in the low six figures.

“So you have the cartels that are manufacturing the cocaine sending their cocaine to the United States, because they’re getting a bigger bang for their dollar,” Fajardo Orshan said. “That’s how it comes up here and that’s how we intercept it.”

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In other markets, like Australia or Europe, prices can be much higher, but established smuggling routes from South America and consistent demand in the US appeal to traffickers, Coast Guard commandant Adm. Karl Shultz said Thursday.

“It’s the distribution. It’s the time-space-distance. That’s what we’re dealing with out here,” Shultz said, speaking in front of the cocaine seized in the Pacific Ocean by the cutter James and other Coast Guard ships.

“We’re dealing with proven pathways that have existed for a long time [and] sophisticated smuggling organisations,” Schultz added. “It’s an adversary that’s always changing their tactics, and we’ve got to stay ahead of that.”