The 1980s brought with it the perm, CDs, shoulder pads, and a relatively new drug that would build the empires of some of the richest people of the decade, cocaine. The white powder was growing in popularity among the hip and wealthy, while its by-product crack was becoming more and more pervasive in low-income neighborhoods across the U.S.
In 1988 it was estimated that U.S. consumption of cocaine was at its peak of $120 Billion adjusted for inflation. With so much demand for cocaine, drug lords were looking to take full advantage.
In the 1980s, a kilo of cocaine could be refined and processed for about $1,000 a kilo and by the time it made its way to the streets of the U.S., could be sold for $66,000. Due to this incredibly high margin, men like Pablo Escobar were able to forge their empires. At the height of his drug empire, Pablo Escobar was one of the richest people in the world; his net worth was estimated to be around $30 Billion. Escobar was the head of the Medellin Cartel, which at its height brought in around 80% of cocaine in the U.S.
During the 1980s the Medellin Cartel brought in the majority of its cocaine through the Caribbean, often stopping in islands like Norman’s Cay, the Bahamas on its way to Miami. After U.S. authorities caught notice, the cartel had to improvise its methods by smuggling cocaine inside of legal shipments of items like electronics and fruits. The effect of the narcotraffickers using Miami as a point of entry was obvious and could be seen through the large increase in the price of real estate and the immense surplus of the Miami banks at those times compared to others around the country.
As a response to this influx of drug money Operation Greenback, an interagency task force was launched in 1979. Greenback was launched to combat narcotrafficking related money laundering and was instrumental in identifying areas of the law that were lacking at the time which paved the way for the Money Laundering Control Act of 1986. The federal government’s fight against narcotrafficking and drugs, in general, would ramp up throughout the 80s. In 1981 expenditures on federal drug control totaled $1.5 Billion, and by 1989 drug control expenditures reached $6.6 Billion.
With a steady increase in government funds flowing to drug control and the U.S.-Colombian extradition treaty in effect, the pressure was mounting on Escobar and the Medellin Cartel. In 1993 a special operations unit of the Colombian police force, trained and aided by the U.S., located Escobar and killed him on a roof in Medellin, Colombia. With the loss of its leader the Medellin Cartel was finally defeated, but as history has shown us taking down a drug lord only seems to free up the market for another drug lord to rise to prominence. The Cali Cartel took over after Escobar’s death and when they, too, were brought down a few years later, the stage was set for the Mexican drug cartels to take control.
Mexico’s border with the U.S. has given Mexican cartels the ideal logistical position to carry out drug trafficking. The Mexican cartels such as the Guadalajara Cartel had been working with the Colombians since the late eighties, but it wasn’t till the downfall of the Colombian cartels that Mexico would take the lead for the most notorious cartels and kingpins.
Today, the most powerful cartels are the Sinaloa Cartel and The Jalisco New Generation (CJNG). Under the leadership of Joaquin “El Chapo” Guzman, the Sinaloa Cartel became the largest supplier of illegal drugs to the U.S.. After having escaped multiple times from authorities, Guzman now resides in a maximum-security prison in Colorado serving a life sentence. According to the National Consortium for the Study Of Terrorism And Responses To Terrorism, the CJNG has most recently been growing in power and is threatening to usurp the Sinaloa Cartel as the most powerful; recent estimating of their assets is valued at $20 Billion. The competition for market share in the illicit drug industry poses serious consequences, violence, political instability, and more violence. The competition among the Mexican cartels is cutthroat, quite literally: in 2019 there were 34,588 murders in Mexico. For reference Japan, the country closest in population to Mexico, there were only 950 Murders in 2019.
A summary by the Congressional Research Service in July 2020 had acknowledged that continued reliance on the kingpin strategy, going after the head in charge, has been problematic and ineffective because it has not led to a decrease in violence. The summary has suggested for U.S. and Mexican authorities to target middle management within the criminal organizations which they say may handicap the regeneration of new members.
Money laundering the profits of narcotics trafficking is an instrumental piece in how these criminal organizations are able to sustain themselves. Proceeds of illegal drug trafficking may go into re-investing and expanding illegal enterprises, which in the case of the large cartels are becoming more diversified. In a paper titled The Illegal Narcotics Trade and Money Laundering, the author argues that while money laundering laws provide a useful tool for governments fighting against drug traffickers, by the time money has been placed in the financial system it may be too late to be able to trace the money to the original benefactor. While money laundering enforcement can act as a deterrent for narcotraffickers, enforcement in the early stages of selling illicit drugs may be the best method to use against narcotraffickers.
