Kill Chain: The Rise of the High-Tech Assassins (16 page)

As the DEA commemoration celebration indicates, the kingpin strategy was considered a great success, and in bureaucratic terms it certainly was, bringing great benefits for the DEA, which for years had limped along as a junior partner in Washington’s police and national security fiefdoms. “It really brought us closer to the CIA and, through them, the NSA,” Bonner told me. A new Special Operations Division created under Bonner to work with these senior agencies superintended the assault on the kingpins, relying heavily on electronic intelligence. The agency budget, always the surest token of an institution’s standing, soared by 240 percent during the 1990s, from $654 million to over $1.5 billion ten years later.

Nevertheless, Rivolo was not impressed by the caliber of the drug warriors he was encountering in his new assignment. For a start, they were measuring success in the drug war by the amount of cocaine they seized. To him, this made no sense. “More seizures just indicated that there was more cocaine around. I asked them what would happen if there was no cocaine at all moving into the country. No seizures, right? Seizures were indeed an indicator,” he guffawed, “but it indicated exactly the opposite of what they thought.” Overall, there appeared to be a disconnect between cause and effect. “What are we trying to achieve?” he continually asked the agency’s officials in meetings. “Reduce the supply of cocaine coming into this country, right?” What was the measure of success or failure? For Rivolo, it was clearly the availability of cocaine as signified by its price. If there were less cocaine available, the price would go up, and vice versa. The DEA, he discovered, put enormous effort into monitoring the price of cocaine on the street, using undercover agents to make buys—40,000 since 1980—with the amounts paid laboriously compiled and cross-referenced. However, the portions obtained by these surreptitious means were of wildly varying purity, the cocaine itself having been adulterated to a greater or lesser degree with some worthless substitute. That meant that the price of a gram of
pure
cocaine varied enormously, since a few bad deals of very low purity could cause wide swings in the average. (Dealers tended to compensate for higher prices by reducing the purity of their product rather than charging more per gram.) The implications were considerable, since the agency’s price charts showed little movement, thus giving no indication of what events affected the price and therefore the supply.

Having tartly informed DEA officials that their statistics were worthless, mere “random noise,” Rivolo set to work developing a statistical tool that eliminated the effect of the swings in purity of the samples collected by undercover DEA agents. Once he had succeeded, some interesting conclusions began to emerge. Rendered in graphic form, the DEA figures revealed only long-term price movements. But following his adjustments, the graph could show short-term price changes, which could be correlated with contemporary developments in the drug war. Most significant, it was now clear that the pursuit of the kingpins was most certainly having an effect on prices, and by extension supply, but not in the way advertised by the DEA. Far from impeding the flow of cocaine onto the streets and up the nostrils of America, it was accelerating it. Eliminating kingpins
actually increased supply.

It was a momentous revelation, entirely counterintuitive to law enforcement cultural attitudes reaching back to the days of Elliott Ness’ war against bootleggers and forward to the twenty-first-century counterinsurgency wars. It might have been possible to arrive at such a verdict intuitively, especially when the kingpin strategy in its most lethal form came to be applied to terrorists and insurgents, but this was a rare occasion in which the conclusion was based on hard data, undeniable facts. For example, in the last month of 1993, Pablo Escobar’s once massive cocaine smuggling organization was in tatters, and he himself was alone and being hunted through the streets of Medellín. If the premise of the DEA strategy—that the way to cut drug supplies was to eliminate kingpins—had been correct, his situation should have resulted in a disruption of supply. But the opposite occurred: in that period, the U.S. street price was dropping from roughly $80 a gram to $60, and it continued to drop after his death.

With the elimination of Escobar, the DEA turned its attention to the Cali cartel, pursuing it with every resource: “[W]e really developed the use of wiretaps,” Bonner told me. In June and July 1995, six of the seven heads of the Cali cartel were arrested, including the two Rodríguez-Orijuela brothers, Gilberto and Miguel, along with the cartel’s cofounder, José “Chepe” Santa-Cruz Londono. Cocaine prices, which had been rising sharply earlier in the year for reasons we shall explore, immediately went into a precipitous decline that continued into 1996.

Rivolo, confident that the price drop and the kingpin eliminations were linked, looked for an explanation and found it in an arcane economic theory he called monopolistic competition. “It hadn’t been heard of for years. It essentially says if you have two producers of something, there’s a certain price. If you double the number of producers, the price gets cut in half, because they share the market,” he explained, making the point appear obvious. “So the question was, how many monopolies are there?” he continued. “We had three or four major monopolies, but if you split them into twenty and you believe in this monopolistic competition, you know the price is going to drop. And sure enough through the nineties the price of cocaine was plummeting because competition was coming in and we were driving the competition. The best thing would have been to keep one cartel over which we had some control. If your goal is to lower consumption on the street, then that’s the mechanism. But if you’re a cop then that’s not your goal. So we were constantly fighting the cop mentality in these provincial organizations like DEA.”

Deep in the jungles of southern Colombia, coca farmers didn’t need obscure economic theories to understand the consequences of the kingpin strategy. When news came through that Gilberto Rodríguez-Orijuela had been arrested, small traders in the remote settlement of Calamar erupted in cheers. “Thank the blessed virgin!” exclaimed one grandmother to a visiting American reporter. “Wait till the United States figures out what it really means,” added another local resident. “Hell, maybe they’ll approve, since it’s really a victory for free enterprise. No more monopoly controlling the market and dictating what growers get paid. It’s just like when they shot Pablo Escobar: now money will flow to everybody.” This assessment proved entirely correct. As the big cartels disappeared, the business reverted to smaller groups that managed to maintain production and distribution quite satisfactorily, especially as they were closely linked either to the Marxist FARC guerrillas or to the Fascist antiguerrilla paramilitary groups allied with the Colombian government and tacitly supported by the United States.

Meanwhile, since attacking and dismantling major cartels was clearly counterproductive in stemming the flow of drugs, Rivolo pondered means that would have a positive effect. The key, he concluded, lay in the fact that drug use was clearly linked to its price. The more expensive the drug got, the fewer the number of people able or inclined to use it. “So I said, ‘there should be only one goal … to increase the price, and the only way to increase price is to increase
risk
.’”

Drug traffickers, obviously, operated between the axis of risk and reward. The greater the reward, the more risk they were prepared to accept, and vice versa. If the risk of doing business increased to the point where traffickers were deterred from continuing to do business, then supplies would decline. This was more than just a hunch, but a conclusion supported by empirical data, including interviews with 112 imprisoned drug smugglers in which they had been asked how inclined to smuggle they would have been had they known the probability of being caught. Eighty percent of them had said that they would have left the business had they known that there was a 10 percent chance of going to prison. Using such data, Rivolo was able to calculate the relationship between risk and reward as curves on a graph, showing when reward trumped risk and vice versa. The graphs showed that as the reward increased, so did people’s willingness to take risks. More interesting, they showed that at a certain point, a small increase in risk would lead to a big drop in motivation, and that at another point, where the risk was already high, an increase made little difference.

But where does one apply the risk? The choice was not obvious. Could it be at the ultimate end of the business, the consumers? “How do you put risk on a million people,” Rivolo continued as we sat in his quiet office. “More police? Yes, you can do that, but it’s not going to work. If you go to the other end of the business, there’s only two or three people, the cartel leaders. How do you put risk on two or three? You kill them? That’s what the DEA says. But if you kill them, the cartels split into two. So that wasn’t it. So the question was, where’s the weak link?”

Rivolo figured he knew where to look. Up through the mid-1990s, most of the raw product for cocaine, the coca leaves, had been grown by peasants in Peru, processed into cocaine base in labs in that country, and then flown to Colombia on small planes for final processing into cocaine. That air bridge between the two countries, he concluded, was the weak link. The pilots were willing to charge just $5,000 a trip, “which was nothing,” Rivolo points out, because there was little or no risk involved. Once there was risk—of being shot down—they would stop flying or at least charge a lot more, which would increase the price of moving the base to Colombia and ultimately the retail price in New York and Los Angeles.

It was not an easy sell. The State Department objected on grounds that shooting down civilian aircraft was against international law. The DEA, still eagerly pursuing the kingpin strategy, was equally wedded to a theory proposed by the Rand Corporation known as the “additive theory” of drug pricing, according to which profits were so huge for the traffickers that they would easily absorb an increase in the price of cocaine base. Rivolo used his statistical skills to argue that this conclusion was incorrect and that the way the business was organized meant that the effect of cutting the bridge would ripple down the chain of production and distribution and have a major price impact, certainly doing a lot more good than opening treatment centers (a position that irked the Clinton White House, where treatment was a favored option). “Shoot ’em down,” he urged, “they’ll stop immediately.”

When approval finally came from the Oval Office, the results were dramatic. In March 1995 a Colombian A-37 Air Force jet fighter intercepted a Kingair light plane and ordered it to land. As Rivolo recounts the story, the intercepted pilot gave the fighter the finger, whereupon the fighter backed up and shot his wing off. “We watched (on radar) as the plane spiraled into the ground. The next day the radio went from one communication a day to
thousands
. Everybody knew about it. No one flew the next day, the next day, the next day. For the next
sixty days
no one flew. The price of cocaine in New York and LA
doubled
. OK, how clean a story do you want?”

Inevitably, the business adapted to the loss of the air bridge. While Peruvian coca production closed down, coca plantations expanded in Colombia itself. Rivolo thought that a fungus developed by a University of Montana scientist specifically to attack the local coca plant would do the trick. To his disgust, the proposal was rejected in favor of spraying a powerful weed killer over coca farms. Tiring of the incessant bureaucratic politicking that seemed to pervade the world of narcotics enforcement—General Barry McCaffrey, the “drug czar,” literally screamed in rage at one of Rivolo’s analyses, throwing the paper slides against the wall—Rivolo announced, “I’m done with this business, I’m going back to airplanes.” The equations he had painstakingly developed between risk and reward and the nature of underground organizations such as drug cartels went with him. They would be deployed again in a far bigger and more momentous war.

Meanwhile, still at IDA, Rivolo turned his attention to aircraft, finding fresh opportunities to upset received wisdom and established interests. In 1999, his office was asked to monitor an extensive test of various electronic warfare systems, including countermeasures and decoys, installed in naval fighters. The performance of different systems was carefully tracked and graded. Recalling his disillusioning experience when the sky had rained fire over Hanoi, he suggested a variation. “I said, ‘Why don’t we add another element. Let’s just add a test with
no
countermeasures, just doing what pilots always do, which is to maneuver.’ So in this huge test we had system X with jammer Y, system Z with jammer X, and then finally we had no jammers at all, just maneuvering. The probabilities of being hit while simply maneuvering were like one tenth of one percent. All the others were ten percent, twenty percent. They claimed great success for some of their systems because they reduced the chances of being hit by eighty percent, but I showed them that it’s a ninety-nine percent reduction if you just maneuver, and it doesn’t cost you anything! They didn’t like that, because a jamming pod costs $3 million and the whole defense business is predicated on selling.”

The drug enforcement business he left behind continued to prosper. The formula for the U.S.-sponsored eradication spray used in Colombia remains a closely guarded secret, although it included Monsanto’s weed killer Roundup, but the effects were clear enough: destroy peasants’ food crops while leaving the resilient coca plant relatively unscathed. The land was thereby cleared of potential support for FARC, the Marxist peasant guerrilla army that had been fighting the Colombian state since the 1960s. However, it was still available for cocaine production, much to the profit of the paramilitary death squads originally founded, ironically enough, in a joint antiguerrilla initiative by the Medellín and Cali cartels. The effect this had on supplies can be gauged very easily by consulting the voluminous and authoritative price charts compiled by the United Nations Office on Drugs and Crime (which had adopted the statistical methodology pioneered by Rivolo). They show that the median price of a gram of cocaine in the United States dropped by 40 percent between 1990, when Escobar and the Rodríguez brothers still controlled their empires, and 2010, when the war against the kingpins had been raging for almost two decades. (Calculated in 2010 dollars, it fell from $278 a gram to $169.)