Organized Crime and Ilicit Drugs in Peru CIDDH_ April 2011. i_ The by liuhongmei


									                        Organized Crime and Ilicit Drugs in Peru

CIDDH, April 2011.

       i) The Economic Model. Growth and Drug Trafficking.

Peru's current neoliberal economic model has not been properly regulated by State
agencies and hasn´t reduced the importance of informal economic sectors on trade,
transportation and housing. As statistics show, it tends to have inherent flaws such as
inequality, redistribution problems, asymmetric competition and monopoly practices.
This situation worsens in the Highlands and the Upper Jungle, creating institutional
conditions favorable to land concentration, increasing corruption and organized crime.
Effervescence of Peru´s sustained macroeconomic growth (supported by CEPAL, IDB
and World Bank documents) has indirectly facilitated filtering of suspicious money from
drug trafficking through particular productive sectors. UIF (Financial Investigation Unit)
director said that between 2003/2007, there would have been suspicious transactions
(within the financial system) for US$ 500 million.

This growth1 would be explained by the better performance of non-primary sectors,
which would grow 5.4% in 2011. On the other hand, the primary sectors would increase
3.9% led by Mining and hydrocarbons sector -5%-).2 In particular, the building industry
would expand 8.8% and the primary manufacturing at 5.5%, on 2011. For example, the
construction boom (large residential complexes, shopping centers) and the respective
formation of new companies, form a sort of cover (intentional) that is used by traffickers
as an ideal scenario for suspicious cash injection to the national economy. It also
provides the "front men" or the use of trustees. In June 2010, Peruvian and foreign
companies exceeded 200,000 nationwide.

       ii) Institutional System Illicit Penetration.

It should be noted that there is historic penetration of Peru's institutional system, by
drug trafficking. Wikileaks cables have shown close links between drug traffickers with
senior officers of the Peruvian Army, with corruption levels similar to those during
Fujimori and Montesinos period (1900/2000). This wide use official channels, allows
the release of the drug to other countries through the intensive use of Ports and
customs facilities.

Criminal Justice system is another institution which history shows that has been one of
the most corrupt agencies during different Peruvian governments. Furthermore, since
the return of democracy it couldn´t be reformed, as CERIAJUS suggested on 2006.

Even if a new Criminal Procedure System were to be progressively implemented, it
would still suffer from these problems.

Information released by Interior Ministry Legal Attorney for Drug Offenses.

    According to the Economy Ministry, Gross Domestic Product would increase by 5 % in real terms in 2011.


    OFFENSE                                      2008                               Total (2000/2008)

Macro drug offenses                           1,414                                 10,571

Micro drug offenses                           4,661                                 30,115

Chemical Inputs                                168                                      772

Money laundering                                 50                                     166

Forfeiture                                        2                                        6

Total                                         6,295                                 41,630

The same Interior Ministry office has, in 2011, 43 attorneys for more than 60,000 drug

There are several cases of judges and prosecutors bribed with money from drug
related cases, for the benefit of those involved3. Statements by the prosecutor Sonia
Medina say “narco” interests from the Justice system prevail (after a favorable ruling for
Sánchez Paredes from the 4th Criminal Court in Lima4). Also in 2006, Judge Hernan
Saturno Vergara, who was involved in the prosecution of an important international
drug organization, was murdered in Lima5.

Besides these institutions, the Prison system suffers from overcrowding and is victim of
extended corruption by Police and INPE agents (46,000 inmates, more than 11,000 for
drug offenses). Given the Peruvian legal system disproportionate performance, there
are a greater number of defendants (70%) than sentenced inmates (30%), due to the
slowness of the judicial system.

     iii) Peru´s Political system.

The political system also suffers from the drug related organized crime penetration,
particularly, before and during electoral periods, where huge amounts of money are
needed. The cases described below reflect influences on institutionalized political
parties (Apra, Peru Posible) as well as the newly recently formed before the elections
(Fuerza 2011 and 5 of their Parliament candidates). The procedure is well known:
personal or institutional finance (both for Congress and for president), through informal
channels, that will be compensated through neutralizing Police investigation or the
Judicial procedure, or minimal (or no) penalty if you fall in red hand offenses.

Given Peruvian political party institutional weakness and dependence to personal
leaderships, they have become vulnerable to corruption and specifically, easy money

 Callao Superior Court President, Daniel Peirano, is being investigated by OCMA, because he has
accepted a Habeas Corpus for a person accused of money laundering (Roger Javier Poemape).
  This trial judge was several suspected members of drug gangs linked to Mexican cartels.

coming from drugs. When they reach the power both at the Congressional or Executive
level, they show inconsistencies, lack of continuity and intentioned slowness to
implement strategic antidrug policies that affect sustainability and stability of the
country. It has happened particularly with Chemical Inputs and Money Laundering
control regime.

       iv) Legislation.

1991 Criminal Code provides a number of articles6 about penalties for crimes related to
promoting or favoring the TID, the marketing and cultivation of poppy and marijuana
and planting binge, the trafficking of chemical inputs and outputs, aggravated forms
(such as agents who commit crimes related to abuse of the exercise of public function),
the marketing or micro production, the supply of drugs abuse, coercion to drug use,
the inducement or incitement to consumption drugs and the sentence of banishment
(for foreigners). Possession for personal use is not punishable, but more than 45% of
Peruvian Police annual drug detentions are related to drug possession for personal
use, showing the lack of accuracy.

On April 2000, Law 27378 was passed, legislating on benefits for collaboration with
Justice, from organized crime members. Law 27697 was passed on 2002, allowing
Prosecutors private communications legal interception. Both had been scarcely used
for drug criminal organizations cases. On July 2007, Peruvian Government passed 11
Legislative Decrees aimed to strengthen Police and Prosecutor investigation
capabilities against organized crime, terrorism, drug trafficking, hijacking, etc7.

But despite the existence of a formal legal regime, there is little enforcement capacity,
low capacity to filter and separate cases proportionately, poor ability to focus, little
police intervention, and institutional weakness for really complex cases. Besides,
Peruvian intelligence system and administrative instruments for cash income control,
are not really effective to detect potential drug traffickers. For example the reduced use
of the recent Forfeiture Law and the lack of reglamentation.

Subsequent to the 1991 legislation, Peruvian response has been to increase the types
of crimes and penalties8. These amendments reflect inconsistency, symbolism,
disorder and lack of proportion of García´s interdiction policy. This situation aggravates
with current issue of prison overcrowding and the poor administrative performance of
national prison system, which allows maintenance of criminal activities from prison,
besides affecting several Human Rights recognized by Peru´s Constitution.

                                    Related Institutions to Control Narcotics
               Institution                                                 Function

    Peruvian Penal Code: Section 296, 296-A, 296-B, 297, 298, 299, 300, 301, 302 and 303.

  Legislative Decrees: 982, 983, 984, 985, 986, 987, 988, 989, 990, 991 and 992. They were passed on July 22nd 2007.
They modify Criminal Code, Procedure Code and Penitentiary Code, increasing Police faculties, Prosecutor and Judge
functions on preventing and punishing organized crime and terrorism.
  Law 27817 of August 2002 (amends art. 298 of Criminal Code) and, Law 28002 passed in 2003.

                                           Design and conduct anti-drug policies in the country, in an efficient
      DEVIDA                               and concerted manner, (...) in order to ensure that the Peruvian
                                           population      excludes      production/consumption-related          activities,
                                           privileging healthy lifestyles.
Ministry of Interior                       As Systemic Management Specialist and National Police of Peru,
DIRANDRO,OFECOD                            planning, organizing and implementing law enforcement operations
                                           nationally and internationally to combat the TID and related crimes,
                                           preventing, investigating and denouncing these crimes, protecting
                                           society from drug abuse, contributing to social development through
                                           excellent service with specialized staff, based on the principles of
                                           integrity, solidarity and justice.
                                           Body Line to receive, analyze, discuss, evaluate and transmit
     SBS – UIF                             information for the prevention and detection of money laundering
                                           and / or terrorist financing, as well as, to contribute to the
                                           implementation by regulated entities and Supervisory Bodies of
                                           mechanisms to prevent and detect suspicious transactions and
                                           money laundering or terrorist financing.
                                           Defend the legality and public interests protected by law, preventing
Attorney     General      -    Attorney    and prosecuting the crime; protect society, the child and the family at
General's Office.                          trial, to ensure the independence of the courts and the proper
                                           administration of justice.
                                           Manage Justice through its courts, in accordance with the
    Judiciary System                       Constitution and laws, ensuring legal certainty and legal protection
                                           for the rule of law, to contribute to the maintenance of social peace
                                           and national development.
Ministry of Justice                        Justice conducts policy at the national level (Prison, relations with

At last, it has also being heard in the past two years, about "supposedly" isolated
killings in Lima. According to preliminary investigations, they would have to do with
Mexican cartels presence in Peruvian territory (Sinaloa organization), particularly at the
northern part of the country (Piura, Tumbes, Cajamarca). However, this situation is not
serious now, despite the worsening of overall Peruvian security situation.

Peru has failed in its various institutions (political, administrative, judicial, penal, economic, etc.)
that have been exploited by organized crime, both rural (firms formed for the collection/stocking
of drugs, route management, relationships with timber traffic, fuel, supplies and informal
mining), and urban, where they managed relationships with political , Police and Armed Forces

  Relationships between Politics and illicit drugs, predated Montesinos and Fujimori. Since 1980, APRA leaders had
relationship with drug trafficker Carlos Landberg. Later, Agustín Mantilla's role as Minister of the Interior (1985) and the
relations of Alan Garcia and Oscar Fernando Cuevas (accused for money laundering for Cali Cartel, directed magazine
International Latin America). Closer in time, the economic support of Sanchez Paredes and Alan García´s electoral
(land controls, Ports authorizations) and even private operators. The extent of economic
penetration from more organized structures, has reached a point, where the challenge for
coming government is to re structure, reform and concrete cleaning of institutions, personnel
and procedures in each one.

     1. Case "Sanchez Paredes".
The first and most nationally recognized case now is the Sánchez Paredes family. Operating
since 1980, they have owned business in fishing, mining, real estate and industry. In 2007, the
brothers are included in the White List as major drug suspects operating in Peru. By January
2008, the prosecutor E. Castañeda began investigations of money laundering against 70
members of the Sánchez Paredes family. In March 2010, the First Organized Crime Prosecutor
completes a criminal action against money laundering by the family. The argument that Orlando
came out with in an interview with the weekly news program "Cuarto Poder" is that it made its
fortune through fishing legal industries. Recent reports indicated an alleged donation to the
candidacy of President García in 2006 (Garcia found out and returned the money).

    2. Case "Olluquito".
The case concerning Eudocio Martínez Torres (nicknamed “Olluquito”) has resonance in recent
days, given the electoral campaign. Thus, the presidential candidate from Fuerza 2011 (Keiko
Fujimori) accepted the fact that, in February this year, she had received $ 10,000 for his
congressional campaign in 2006. This case had its beginnings in 1993 when it was discovered
a shipment of 353 kilos of cocaine hydrochloride in a Hayduk Company boat, owned by
Olluquito and bound for Colombia. He was sentenced to prison with their daughters (Ana and
Mariana) after dark procedures of the Peruvian justice system (involving Montesinos). However
his presence still lingers in the business of money laundering through his son Walter Martínez
Moreno, director of Hayduk. That company is now facing an oral process in the First Criminal
Court of Callao.

    3. Case "Zevallos".
Fernando Zevallos, a successful businessman and former owner of the airline Aero Continente,
has been followed not only by Peruvian authorities but also by the DEA. His case dates back to
1983 with Police reports linking him to drug trafficking. His organization had his peak in 1995
when the PNP and the DEA seized 3.5 cocaine tons in one of Zevallos’ planes and to Mexico.
Now he is sentenced to 20 years in prison for drugs charges, conspiracy to commit a crime,
murder, bribery, illegal possession of weapons, money laundering and handling stolen money.
There where suspicions’ about close relations with political parties and representatives such as
Peru Possible (leaded by Alejandro Toledo) and former FIM (leaded by Fernando Olivera).

campaign, followed by the return of U.S. $ 5,000). Finally, recently discovered links between Secretary of the
Presidency (Luis Nava and his son J. Anthony Nava) with the Sanchez Paredes organization.
 2002, port of Chimbote seizure of 1.7 metric tons of cocaine; July 2006 in high seas, seizure of a fishing ship with 6
metric tons of cocaine; February 2007, seizure of 10 metric tons in a fishing ship.
     COMARSA, Minera San Simón, Ganadería San Simón and others.

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