The MacNeil/Lehrer Report; Bolivia: The Cocaine Trade

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JIM LEHRER [voice-over]: Cocaine: in the United States, a multi-billion-dollar high for the corrupt and the rich; in Bolivia, a multi-billion-dollar way of life for the corrupt and the poor.

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LEHRER: Good evening. On the surface it would seem a simple matter. Bolivia, the poorest nation in South America, very much needs financial and other aid from the United States if it is ever to prosper. The U.S. is ready and willing to provide that help now because a new civilian government is finally in charge, having replaced a corrupt, brutal military junta whose human rights record had kept U.S. aid frozen for two years. But there is a catch. In return, the U.S. wants Bolivia to eradicate its number-one industry, the growing, producing and smuggling of cocaine, most of which ends up in the United States. It's part of a Reagan administration effort to curb drug trafficking at the source. But 4,000 miles south of here at the source, in Bolivia, eliminating the cocaine industry is anything but simple, as we see in this documentary report by David Lomax of the BBC's Panorama program.

REPORTER [voice-over]: Bolivia is the poorest country in South America. Until recently, coca leaves were only sold here for their traditional purposes. But now it's known that coca can also be turned into the crystals of cocaine base. The chemical process needed is illegal, but it's simple and cheap, and the profits it can earn are immense. It's now the major part of the illegal drug trade in the United States.

RONNIE MACLEAN, former Bolivian minister of planning: It's estimated that cocaine is an export that is well over $1 billion in Bolivia, which means that it's much more than any of our exports that we do, especially metals and minerals. In proportion to our other economic activities, it's so large that it permeates all parts of society.

REPORTER: It's the biggest export earner in the country, isn't it?

Mr. MACLEAN: It is.

REPORTER: And it affects everybody?

Mr. MACLEAN: Affects most of everybody.

SAM HART, U.S. State Department, Washington: Bolivia has become a laughing stock in some places. It's become a pariah, in a way, in the international community. It is a matter of shame to Bolivians that when their country's name is mentioned, the first thing that comes to mind is drugs.

REPORTER [voice-over]: Arriving at the mining town of Uncia on the Andean Plateau is the new civilian president of Bolivia, who has come here after years of exile to meet Bolivia's tin miners, his most enthusiastic supporters. The Americans hope that the new president will be the one man who'll at last be able to help them control their drug problem at its source. They're applying pressure, and they've offered aid in spite of the presence of communists in the new government.

Dr. Siles Zuazo is a former president himself, and now leads a new leftist administration pledged to stamp out corruption and wage war on the Mafia. But everyone here knows that however sincere he might be, he may not have much time. Bolivia's presidents have rarely held power for long. In the last 40 years most have been deposed, one was lynched, and there were once three different presidents in turn on the same day. Dr. Siles knows that his government can't survive without American backing, and this support will depend on how fast he moves against the coca trade.

In a remarkably candid speech he tells the miners that his first priority is the economy. He says he's inherited a mortgaged country with debts of more than 3,000-million dollars, alarming and institutionalized corruption, and an inflation rate of 200%. Faced with all these difficulties, he is now being pressured by the Americans to act against an industry which has become the biggest export earner in the poorest country in the whole of South America. Dr. Siles' dilemma is that he can't survive without American help, but if he does what Washington wants, he risks losing the support of the very people who put him into power.

Here, high in the Andes, everyone in the capital, La Paz, and throughout the rest of the country has now come to depend on the new wealth of the product of the coca trade. Bolivia has become the cocaine capital of the world. The areas where coca has always been produced in Bolivia are vast and spectacular, but they're also remote, and until recently roads hardly existed. Here in the Yungas valleys on the eastern slopes of the Andes range, there have always been thousands of acres of small coca plantations. The coca bushes are planted in terraces; and in this humid, semi-tropical atmosphere, they flourish for at least 10 years before they have to be replaced. Harvesting the leaves is done four times a year. It's laborious work, but for many poor families in these valleys a small patch of their own coca at least provides a subsistence livelihood which couldn't come from anywhere else.

At first, the poverty of this part of Bolivia wasn't affected by the boom in cocaine in America. But about five years ago, the government in La Paz set up a local agency here to buy all the coca leaves at a fixed price. The arrangement was administered by the narcotics police and by the Bolivian army, and it wasn't long before there were abuses. Poorly paid officers who'd learned of the profits they might make began to exploit the campesinos, the peasant farmers.

[to farmer] How do you know that the military were exploiting you?

PEASANT COCA GROWER [through interpreter]: They imposed all those decrees to make us suffer here in the Yungas. Everything. Everything was against the peasants. We had no freedom to have any money, not even to send our children to school nor to buy themexercise books.

REPORTER: But how much were you paid for the coca by the Bolivian army, and how much were they getting for it when they sold it somewhere else?

GROWER: They paid $1350 and sold it for 35,000.

REPORTER [voice-over]: Politically Bolivia is the most unstable country in the whole of South America. Since independence, the average life of any government here has only been about eight months, and there have been in all 189 different coups. The corruption of coca has grown in an atmosphere of unrest where the vast profits of the trade have become the power of the state itself. Recently, the generals in various right-wing military governments found the boom in cocaine irresistible. Two years ago, when the last military government came to power, they set up as partners with the Mafia in a vast cocaine smuggling organization protected by the state. General Garcia Mesa, backed by the Mafia: he doubled cocaine exports. Colonel Luis Arce Gomez, his interior minister: he ran his own cocaine air taxis. General Ugo Echeverria, an army chief: he set up his own smuggling ring. Colonel Ariel Coca, an air force commander, who ran another one. All these men are now in hiding abroad. One of the victims of these generals was the only survivor from this aircraft which he'd been using during an election campaign. It crashed and burst into flames, and it's generally agreed that it was sabotaged. The survivor, who was well-known as an enemy of the drug mafia, is now Bolivia's vice president.

JAIME PAZ ZAMORA, Bolivian Vice President [through interpreter]: Drug trafficking distorts our political structure because it promotes dictatorships. The last ones were linked to it. It does not allow us to be a democratic ountry, and finally, drug trafficking distorts the health of our people and life itself.

REPORTER [voice-over]: The hold which the cocaine trade has over Bolivia is most evident in the more select suburbs of the capital where new privileges are jealously guarded. Bolivia's recent wealth is only too obvious wherever you look an entire section of society has found a new way of life which they won't be willing to surrender. If it weren't for the domestic staff, it would be difficult to imagine that around here are mostly the houses of low-paid civil servants in the poorest country in South America. Nearby is another estate which is almost entirely owned by Bolivian army officers, and one in five in the army here is an officer. All the roads are named after generals. Average rates of pay in the army are about $100 a month, yet many of these houses cost up to $200,000. They're all furnished with imports from Florida, and the style of the whole effect is known locally here as "Miami Baroque." The growth of these estates coincides exactly with the boom in cocaine.

But the man who has made most out of the cocaine business, Roberto Suarez, doesn't live anywhere near the capital. This is the man who, in the past, has been virtually able to install military governments in Bolivia. He's probably the biggest drug dealer in the world, suspected by the Americans of earning $400 million a year. Roberto Suarez now runs a third of the country almost as his own personal domain. And in this vast area, government forces would never be able to touch him, even if they wanted to. Light aircraft are the only means of communication here between the isolated cattle ranches. Most of these ranches are either owned by Mr. Suarez himself or, as in this case, by one of his relatives. In this province the governmenthas no control, and there's now free trafficking in cocaine without the slightest danger of any official interference. The new government in Bolivia has promised the Americans that they'll move against the organization in this part of the country, but they don't pretend that the task will be easy.

[to Zamora] What are the biggest practical difficulties you have in controlling trafficking?

Vice President ZAMORA [through interpreter]: Our country measures 1,100,000 square kilometers. There are five million Bolivians. We are almost a population lost in our own territory. We are a country with no backbone. Communication is difficult. These are practical problems. For example, one third of our country -- Beni and Pando -- have no overland communication with the rest of our country.

REPORTER [voice-over]: In other parts of Bolivia nearer the capital, the new government has already experienced the risks of trying to control coca sales. This town once housed the state coca buying agency and a detachment of narcotics police. But as exploitation and corruption grew, there was increasing unrest and allegations that the police were beating people and were guilty of rape. Two months ago, the narcotics police station here was besieged at night by an angry crowd of farmers. They machine-gunned the building, stormed it, killed all seven occupants, and set the place on fire. It's still not clear what really happened here, but obviously, controlling coca is a dangerous business.

ROBERTO GIVANES, brother of dead narcotics agent: My brother and the other victime of this massacre were tortured before they got killed. First of all they were castrated. My brother, one of his eyeballs were taken; all his tooth -- they were out. They stuck a wooden stick on his stomach, and on top of it, I believe it was a machete that they use and they cut his forehead. And, besides that -- that, it was nothing, they dragged them around in this square in this place called Chulumani, and they were left for many hours like they were -- I believe not even animals are treat that way.

REPORTER [voice-over]: Bolivia does have legal machinery to deal with the coca trade, but it hardly functions satisfactorily. And this is yet another problem the new government will have to face. The central prison in La Paz houses 1,000 men. More than 600 of them are serving long sentences for minor drug trafficking offenses. Previous military governments in Bolivia have been keen to demonstrate to the outside world, and particularly to America, that they were taking a strong line against the trade. The last governor has just been replaced because drugs have been circulating even here. there infrared satellite pictures, commissioned by the Americans, show that now a vast new area of coca plantations has sprung up in the Chipari region of Bolivia. And the survey estimates that the annual cocaine potential here is 180 tons. The new government faces almost insuperable obstacles in trying to stop the trade. In the new coca area of Chipari, for instance, there is only one main road -- the Americans built it themselves -- and it's long since fallen into disrepair. There are few airstrips, and we didn't see a single member of the Bolivian police. The narcotics authorities tell us that if they want to come to Chipari now, they'd be so much reviled they'd need to come here in tanks.

At one time all the farmhouses hrer were surrounded by small holdings of different crops. Now they're all growing the same thing. Coca earns these peasant farmers five times more than anything else they can grow. Today, every few yards along the American-built road in Chipari, peasant farmers are drying coca leaves. Recently, more and more of them have started to learn the chemical process of turning the leaves into cocaine base. Coca production still uses antiquated machinery, but it's the only flourishing business in the country. At first the Americans only offered Bolivia $5 million to pay for a scheme to find alternatives for coca in Chipari. They just increased the offer, but only to $30 million. The industry itself is earning more than a billion dollars.

Mr. HART: We believe there are crops that will earn a decent living for these people if the proper infrastructure is in place. Our money and our technical assistance would go to try to put in place that infrastructure so that cultivation of things such as pineapple, palm hearts -- oh, there are half a dozen agricultural commodities which will yield a decent standard of living.

CARLOS MENECES, peasant leader [through interpreter]: We have agriculture here. We produce here. But we have no markets, no industries. We have no infrastructure to be able to develop it all. So we have to look for a way out of this. Rice is grown, but it doesn't pay its production cost. Pineapples are grown, but the price is so low that, much as many of us would like to reach your countries with our produce, we cannot overcome all these barriers we have here, and so we keep all the fruit here and it goes to waste.

REPORTER [to Hart]: How do you answer those farmers who tell us, "Look, cocaine is an American problem, and it earns us five times more than any other possible thing we could grow"?

Mr. HART: So is robbing banks. Robbing banks is a profitable organization -- a profitable enterprise, too, but it's illegal. It's illegal in Bolivia to do what these people are doing.

Mr. MENECES [through interpreter]: You cannot suppress the traffic in narcotics when there are people who need to make their living from the growing of coca and from its manufacture, because otherwise they wouldn't earn enough money to live.

REPORTER [voice-over]: Earlier this year the previous military government did organize a raid against illegal cocaine factories, but it was only an exercise to impress the Americans. The raid was executed by the army but planned by the Americans, and two American drug agents, we're told, actually came along themselves. It was the first such operation in Bolivian history, and it's never been repeated. At the end of the raid, the only prisoners were a few local peasants. The operation had no effect on production or on the profits of the Mafia.

[on camera] According to American sources here, the cocaine Mafia in Bolivia is run by 19 top men. They all have connections with other organizations abroad; they're all heavily guarded; they're naturally reluctant to be filmed or to be interviewed. And they're all, of course, highly skilled at covering up their traces. The evidence against them is almost entirely circumstantial. For instance, if a light aircraft crashes in the middle of the jungle with several hundred pounds of cocaine on board, as has happened recently, there's never any trace of the pilot, and the owner can always claim that he chartered the aircraft to somebody else who has also conveniently disappeared. Well, the narcotics control police, from their headquarters here in La Paz, have in the past been powerless to make any arrests. It's either because the Mafia has been better organized or better armed than they are, or more usually because the narcotics control police have been involved in drugs trafficking themselves.

[voice-over] The new government sacked 5,000 officials and now, beside an ironic no-vacancy sign, there's only a solitary wanted poster. You don't get the impression that very much happens here. The police could only show us the evidence of one raid they'd organized in the last two months. They'd captured a few utensils from a small factory they'd found in one of the suburbs. Their prisoner is now yet another statistic in the narcotics police intelligence section. The names of the top drug dealers, unfortunately, aren't recorded. The last regime took all incriminating evidence with them into exile.

BOLIVIAN NARCOTICS INTELLIGENCE OFFICERS: The biggest problem that we have so far is that we don't have too much resources in order to try to catch them. Besides, they have a lot of money so it's very difficult for us to try to catch them. I guess that would be the main reason. But anyway, about information, we have a lot of information on these people.

REPORTER: Do you have information about Garcia Mesa, Arce Gomez, Colonel Coca, Roberto Suarez -- people like that?

OFFICER: Well, I'm not really authorized to say that. I should have the authorization from the chief of narcotics in order to give this type of answers.

REPORTER: But what I'm asking is do these files contain information about really big people, or are these just small fish?

OFFICER: Well, about the people which you've been asking me last, about these big people, about Garcia Mesa, Arce Gomez, etc., we don't have any information about these people.

REPORTER [voice-over]: The narcotics police have managed to confiscate some cocaine, but everyone here knows that it's only a tiny fraction. But even so, the government is still maintaining that it is making progress.

[to the President] Dr. Siles, how is your government going to stamp out cocaine trafficking?

Dr. SILES ZUAZO, president of Bolivia [through interpreter]: By means of national mobilization. We have one advantage which will help us begin the fight against drug trafficking, and that is that this government is made up of people who are totally honest -- something which never happened in the past.

REPORTER [voice-over]: Few people in Bolivia share the President's optimism, and one indication of the size of the task he faces is out here among the traffic -- legal and illegal -- along the tributaries of the Amazon Basin where there are already hundreds of illegal laboratories. Most of the cocaine base produced in Chipari is smuggled from here in boats downstream. The new drug squad has not yet visited this part of the country; it hasn't mounted any search operations, and has no helicopters or aircraft. In this part of Bolivia, the rivers from Chipari wind through a vast swampland, and as the boats carrying the cocaine move northwards, they have to pass through various checkpoints. The bribes which have to be paid mean that the price of the drug has generally doubled by the time it has reached the next province four days later.

This is Trinidad, the capital of Beni Province. At one time it was a Spanish colonial frontier town where nothing much happened except the siesta. Trinidad first started to expand when the cattle ranches arrived, but many people here are still relatively poor, and large parts of the town display evidence of years of neglect. Now, however, Trinidad has felt the sudden benefit of cocaine. There's a revolution in transport; the dirt streets are packed with vehicles, the shops with luxury goods. And just as in the capital, this new prosperity has exactly coincided with the drug boom. Elderly cargo planes were at one time the only users of Trinidad airport. Now there are more than 100 modern light aircraft. They're parked in makeshift hangars and many of their pilots are employed by the Mafia to deliver cocaine.

Mr. MACLEAN: We have such a large influx of foreign exchange on our black market, on our parallel economy, it gets to this financial system in a way and gets to the other economic areas. For an example, I would say somebody who sells airplanes. Well, he's in a completely legitimate business, but he's probably selling most of the airplanes to the Mafia. So he's getting involved, too. Those people who deal with foreign exchange, they are being part of the Mafia or a part of the system, willingly or not, because they are handling something which is being produced by this drug traffic.

REPORTER [voice-over]: In the capital of La Paz, prosperity is skin deep. The government has a choice: either it accepts, out of political necessity, support from the Americans; or it allows the cocaine trade, with the aura of prosperity which it brings, to continue. The people of Bolivia who voted for this government do not want the return of the generals, and do want to get rid of the Mafia. But even they may be dismayed at the economic cost of such an unlikely victory.

Mr. MACLEAN: First of all, you have a rising rate of unemployment in the rural areas and also in the urban areas because a lot of people with the economic crisis has been driven back to the countryside, and many of them are being employed, probably, in this sort of an activity. So you will have a rise in unemployment. Also, you will have a rising cost or price of foreign exchange -- the dollar will skyrocket. And this will bring, I think also, a very deep problem in terms of inflation.

REPORTER [voice-over]: But in the end, the choice of what to do about the cocaine trade might well be taken out of the government's hands. For, only two months after taking office, they're facing protests in the capital over rising prices and unemployment. There have been widespread calls for a general strike and several runs on the banks. In this climate it would be understandable, perhaps, if the government were to opt for an easy life and put the country's economic future first.

LEHRER: Robert MacNeil and I will see you tomorrow night. I'm Jim Lehrer. Thank you and good night.