As drug crisis rages, US has forgotten to target kingpins

In a 2010 statement to Congress, Office of Foreign Assets Control (OFAC) Director Adam Szubin said: “Colombian narcotics traffickers have noted that they fear three things: arrest and extradition to the United States; seizure of assets; and the Office of Foreign Assets Control’s Specially Designated Nationals List.” 

Until recently, there has been little reason to doubt him. Financial sanctions have been among Washington’s most frequently used and effective weapons for targeting transnational crime and trafficking in the Americas. 

{mosads}Armed with Drug Enforcement Administration data and attachés at U.S. embassies in Mexico City and Bogotá, OFAC has taken steady aim at the region’s cartels and their support networks.

Since 2000, more than 2,100 individuals and entities have been sanctioned under Washington’s main counter-drug statute, the Kingpin Act, with OFAC designating as many as 140 targets at a time. 

Kingpin sanctions have often been issued alongside a U.S. criminal indictment. In many cases, other governments have responded with sanctions and criminal probes of their own.

Even where that doesn’t happen, foreign banks still have ample incentive to comply with U.S. sanctions for fear of losing access to U.S. dollar clearing. In effect, OFAC targets risk being completely shut out of the financial system in their home countries. 

This has had serious impact on some of the region’s most prominent crime figures. Most famously, the founders of Colombia’s now defunct Cali Cartel voluntarily surrendered to U.S. authorities in 2004 in an effort to have their families removed from the OFAC List.

More recently, sanctions against a prominent Honduran family for laundering drug money effectively dismantled its billion-dollar business empire in 2015.

Yet, despite such notable successes, OFAC has been conspicuously quiet this year in the fight against drugs. While it targeted a Mexican heroin ring in March and a Colombian cocaine syndicate in June, just 14 percent of 580 OFAC sanctions issued this year through September were drug-related.

By historic standards, this is unusual. Counternarcotics have comprised nearly 40 percent of all OFAC sanctions since 2001. And the drop-off seems to have come at a peculiar time. 

America continues to experience an opioid epidemic that the U.S. Department for Health and Human Services classified last October as a public health emergency. As of March 2018, more than 115 people died daily in the U.S. after overdosing on prescription pain relievers, heroin and synthetic opioids such as fentanyl.

In Colombia, coca cultivation hit an all-time high in 2017, according to the United Nations Office on Drugs and Crime. A record 171,000 hectares of national territory were used to grow coca, sufficient to produce an estimated 1,520 tons of cocaine.

Violence in Mexico has similarly spiked. The Mexican government registered 28,756 homicides through the first eight months of 2018. An intelligence report from Mexico’s National Security Commission leaked to the press in July attributed much of the violence to shifting alliances and territorial disputes between at least 15 drug cartels nationwide. 

Against this backdrop, it would be difficult to imagine how Washington’s sanctions machine could forget Latin America’s traffickers. In fact, strategic confusion and limited resources are the most likely answer. 

OFAC has long been priority-rich and resource-poor, but it has been stretched to the extreme under the Trump administration, which is relying on sanctions more often and for a wider array of foreign policy issues than any other presidency in modern U.S. history.

With its preference for coercive diplomacy, the administration has used sanctions as a default response to North Korea, Iran, Russia, Venezuela and transnational threats from terrorism and cyber threats to human rights abuses and grand corruption.

On-demand sanctions surges against such varied and simultaneous targets are a tall order for a lean agency of slightly more than 200 that administers 29 active sanctions programs, which has also suffered sustained turnover in its ranks since at least 2015. As a result, drugs have fallen down the sanctions agenda.

Washington combats the drug trade with multiple powers of state, and its success does not hinge on financial sanctions alone.

Nonetheless, the cost-benefit analysis is compelling for prioritizing kingpins over many other potential targets, such as hackers, human rights abusers and corrupt foreign officials who can be confronted by other legal or diplomatic means and whose decision calculus may be less vulnerable to sanctions.

The drug threat to the U.S. is immediate, counter-drug sanctions have a demonstrable track record of damaging the syndicates they target and international coalitions to enforce them cost less political capital because counternarcotics is a less politically divisive issue.

If Washington wants maximum return on the investment it’s made in its sanctions apparatus, continuity in OFAC’s Kingpin program is a good way to get it.

Andrew Rennemo is a former intelligence analyst at the U.S. Treasury Department focused on transnational threats and a management consultant for anti-money laundering risk and forensic investigation.