Narcos Are Waging a New Drug War Over a Texas Company’s Basic Chemical

(Bloomberg Businessweek) -- While listening to wiretaps in January 2018, police intelligence officers in Ecuador heard the lieutenants of a Colombian drug lord planning an imminent cross-border attack. The eavesdroppers alerted the most likely target: a national police garrison in the town of San Lorenzo, just across the Mataje River from Colombia’s top cocaine-producing region. The commander at the outpost added patrols and gave his officers assault rifles, expecting skirmishes in the town. He also put more guards at the gates of the compound, which spans a city block.

A few days later, at about 1:30 a.m. on Jan. 27, a Mazda pickup packed with explosives detonated at the garrison’s unprotected rear. The blast produced a hailstorm of shrapnel over a 1,000-foot radius. Parked cars flew through the air. Dozens of homes and shops were destroyed. Fires lit up the darkness. More than two dozen people were wounded, and hundreds were left homeless. Authorities immediately blamed a former rebel leader in Colombia’s civil war, Walther Patricio Arizala Vernaza. Arizala, known as Guacho, was now a powerful drug lord, and his former troops were now his drug soldiers. Over the next several months they attacked security forces on both sides of the border with mortars, automatic weapons, and roadside bombs, including one blast that killed four Ecuadorian marines.

What sparked the drug lord’s war on Ecuador? Giovanni Gavilanes, an Ecuadorian police major, believed he knew the answer: the hundreds of 25-kilogram (55-pound) sacks of flaked calcium chloride the police had seized from Arizala’s men. The chemical has become a critical ingredient in the production of cocaine.

Gavilanes’s unit, set up in 2016 with U.S. funding, is tasked with stemming the illicit flow of essential and precursor chemicals to cocaine labs in Colombia. In the year leading up to Arizala’s offensive, the unit had seized more than 80,000 kilos of calcium chloride; police believe most of it was headed for Arizala’s labs. Just three days before the bombing, they’d grabbed 7.5 metric tons from Arizala’s men on a ranch. “We were hitting and hitting them, until they said enough and reacted,” Gavilanes says.

The white sacks of calcium chloride seized on the ranch carried markings the cops had seen many times before—the blue logo of Tetra Technologies Inc., a chemical company based outside Houston. Tetra calls itself the world’s leading producer and marketer of calcium chloride. Its biggest customers are in the oil and gas industry, and its sales materials also list other innocuous and legal uses for the chemical, including processing cheese and keeping dust down on clay tennis courts.

But Tetra has also been the brand of choice for Colombian cocaine chemists, according to police in Ecuador. Their supply lines start at Tetra’s factory in Finland. The product is shipped to Peru, Ecuador’s neighbor to the south, where a network of traffickers has been buying Tetra’s calcium chloride on behalf of Colombian narcos and then smuggling it into southern Ecuador. From there it’s a day’s drive north to San Lorenzo and the Colombian cocaine labs beyond. Since 2017, Ecuadorian police say, a majority has carried the Tetra brand.

For at least the past four years, the International Narcotics Control Board (INCB), a United Nations agency, has been issuing public alerts about the growing use of calcium chloride in Latin American cocaine labs; in March 2019, it specifically warned that calcium chloride smuggled from Peru was feeding Colombian narcos through Ecuadorian networks. That same year, Tetra shipped almost 48,000 25-kilogram sacks of calcium chloride to Peru, all via a single Peruvian importer, customs records show. That capped a five-year run during which Tetra doubled exports to Peru—and Colombia’s cocaine production also doubled.

Peruvian authorities have never audited the legitimate use of calcium chloride in their country. Because of that, it’s impossible to know what share is siphoned off by narcos. But Ecuadorian police say the calcium chloride they’ve managed to seize is only a small share of what’s been diverted by traffickers. Much more gets through.

Tetra hasn’t been accused of violating any drug laws in the U.S. or anywhere else. Gisselle Piller, its director of global marketing, said in an emailed response to questions that the company’s contract with its sole Peruvian customer forbids that company from “reselling this product for any prohibited end use.” She declined to say whether Tetra was aware of the regular seizures of its product over the past four years or of the warnings issued by the INCB. She said the company hasn’t been directly contacted by any authorities. “We strongly oppose the use of any Tetra products for illegal purposes,” Piller wrote. She added that Tetra follows all applicable laws and regulations in its sales in Peru.

Therein lies the challenge for authorities trying to stop the illicit trade, and therein lies the weakness in international narcotics laws exploited by drug lords. Bloomberg Businessweek previously reported that cartels in Mexico have easily tapped the legal chemical supply chain to make heroin and meth sold in the U.S. In Ecuador and Colombia, calcium chloride sales are illegal without licenses and verification that they’re not being diverted to traffickers. But Peru didn’t start regulating the chemical until January, leaving an opening so big for smugglers that they literally drove trucks through it for years. And the country remains the weak link; Gavilanes’s unit has seized 25 metric tons since Peru’s new law went into effect, with most of it trafficked from Peru. Police records show that about a third of it has been Tetra branded.

In addition to facilitating cocaine production, the narco-chemical highway running through South America has fueled one of the continent’s worst border conflicts in years. It’s a fight that’s drawn in thousands of military troops and police, displaced thousands of people, and left a trail of death and destruction in Ecuador and Colombia. Even the transformation of the border into a military zone wasn’t enough to stop the flow of Tetra’s product to narcotics syndicates.

In 1987, with rates of addiction spiking and drug-related violence escalating in the U.S., the CIA made an embarrassing discovery: American companies sold and exported about 95% of the chemicals the cartels were using to make cocaine. In 1988 alone, Colombian police seized more than a half-million gallons of solvents from cocaine labs. That same year, congressional uproar led to the passage of the first U.S. law strictly regulating such chemicals, domestically and internationally. It required chemical companies to certify the legitimacy of customers and get advance Drug Enforcement Administration clearance for exports, and it created a set of federal crimes for companies that broke the rules.

Then the U.S. aggressively pushed for a global system of regulations. It’s policed by the INCB and enforced by a treaty signed by 190 countries. The agency maintains what it calls a Red List of 29 chemicals everyone is supposed to regulate in international trade. These include the wealthier countries that tend to produce and export chemicals and the poorer ones where they’re used to make illegal narcotics.

Although calcium chloride wasn’t on the Red List, Ecuador and Colombia started regulating it on their own in the mid-’90s, after police found it in some cocaine labs. In 2013, Colombian and Bolivian authorities noticed a dramatic surge in the use of calcium chloride in cocaine labs. Cartel chemists were using it to recover and recycle the solvents that were on the Red List, reducing their need for these more closely controlled products. In this way, calcium chloride had opened a back door for bypassing the global system of regulating drugmaking chemicals.

By 2016 it had become clear that traffickers were relying on multiton shipments of calcium chloride from Peru. The U.S.-funded National Chemical Substances Investigative Unit, which is part of Ecuador’s national police, discovered this as soon as its agents started arresting and questioning truckers hauling illicit loads, according to Lieutenant Fabián Herrera, the unit’s deputy commander. “It was all coming from Peru, where they could buy it anywhere,” he says.

Frustrated Ecuadorian government officials called out Peru in their reports to the INCB. In its 2018 report, released on March 5, 2019, the INCB detailed the existence of the illicit transnational pipeline from Peru. Investigations of trafficking networks “appear to be difficult to conduct, because calcium chloride is not controlled in Peru and, consequently, law enforcement authorities have taken no further action,” the report said. Commander Raúl Fernández of the Peruvian National Police’s chemicals unit acknowledges the facts detailed in the report. “It went straight to the narcos in Colombia,” he says.

Despite its own warnings, the INCB hasn’t added calcium chloride to the Red List, which could require the wealthier countries that make it to act, along with Peru and every other importing nation. “They want us to report it and control it, but the UN hasn’t included it in its own controls,” says Patricia Martínez, a chemical engineer who runs the Ecuadorian agency that regulates drugmaking chemicals. She personally signed and filed the reports to the INCB naming Peru. Adding chemicals to the Red List is a slow, cumbersome, and bureaucratic process. It can be hindered by chemical company lobbyists and resistance from individual nations that are accustomed to free-flowing exports.

Stefano Berterame, the interim secretary of the INCB, said in an email that none of the countries affected by calcium chloride trafficking in South America formally initiated the process to control the chemical after his agency had brought it to international attention. In one similar case in the past, he said, such a request led to new controls. But, he suggested, it might be difficult to do for calcium chloride, because other, alternative chemicals can be used to recycle the solvents needed to make cocaine. “It is not uniquely essential for the production of cocaine,” he wrote.

Like all but the most obscure chemicals used to make illegal drugs, calcium chloride has lots of legitimate applications. It’s used to reduce the mineral content in beer, dry freshly poured concrete, and melt snow and ice on highways. Tetra’s customer base is primarily in the oil and gas industry—specifically frackers. Drilling operations use it to make fluids denser, increasing their ability to remove waste from wells.

When oil and gas drilling experienced a severe downturn beginning in 2013, Tetra made a big push to expand sales in other industries. James Funke, who heads the company’s chemicals division, described for analysts in May 2018 how that strategy drove a 24% boost in sales of calcium chloride over four years. “One of the things that we really pride ourselves on is that we’ve gone out and made sure we understand how calcium chloride is used in the different applications,” Funke said.

Tetra’s exports to Peru boomed at a rate far beyond the company’s global increase. The company doubled its share of Peruvian imports of the chemical, to 39%, from 2015 to 2019. All of it was exported to a family-owned chemical seller called Químicos Goicochea SAC, based in a warehouse district between the port of Callao and Lima’s international airport. The company’s website offers hundreds of products, including calcium chloride for use in the construction, bottling, sweetener, and petroleum industries. Enrique Goicochea, the company’s president, declined multiple requests for comment for this story.

As the police in Ecuador racked up seizures of Tetra’s calcium chloride, they gave it a nickname. Because the bags carry the words “Made in Finland,” cops took to calling it finlandés, or Finnish. The narcos “are sticklers for quality control, and they like Finnish the best,” says Sergeant José Coba, a veteran cop and specialist assigned to the chemical unit. In one case, the chemists were so unhappy with another brand they received from smugglers that they sent it back and asked for the Finnish brand, says Coba, who questioned the smugglers involved. Police evidence photos feature bags with the Tetra label in bust after bust.

Time and again, chemical runners described under police interrogation how they bought calcium chloride from distributors in Peru, where no questions were asked. In one case, an Ecuadorian man set up a company in early 2017 in Tumbes, Peru, within sight of the Ecuadorian border. Incorporation documents describe the business as a distributor of onions. The man had a web of buyers who supplied him with calcium chloride from Peru. He smuggled it to a warehouse in Ecuador. From there, truckloads of the chemical headed north to cocaine labs in Colombia. “They would stockpile it, little by little, until the labs called for a load,” says Fernandez, the senior police investigator in Lima.

The Peruvian controls on calcium chloride that went into effect in January followed years of lobbying from governments in Ecuador and Colombia. Wilfredo Albarracín, the Peruvian customs official in charge of chemical control, says making those controls actually work will be daunting. His understaffed division is supposed to register and certify any company that wants to legally import and sell calcium chloride, as well as assign a quota based on estimated consumption. In reality, Albarracín says, his government can’t even quantify legitimate demand for the chemical, much less police the sales. He says the best he can hope for “is to make it harder, more expensive, for them to get their chemicals.”

Although truckloads of calcium chloride have been getting through to Colombia, the Ecuadorian anti-trafficking campaign has still pinched the pockets of Colombia’s drug lords. Lost calcium chloride means lost cocaine production. This is how controls on drugmaking chemicals are meant to function. By making life harder and more expensive for cartels, the controls have shown the potential to yield at least some relief for American cities.

Ecuadorian police say no drug lord was under more pressure from their seizures of calcium chloride than Arizala, the guerilla-turned-cocaine kingpin.

Arizala was born in 1989 and raised in poverty on the Ecuadorian side of the border in a town called Limones. The Revolutionary Armed Forces of Colombia, known by the Spanish acronym FARC, recruited him as a teenager; he showed a natural penchant for ruthlessness and leadership, according to Rehenes (“Hostages”), a 2019 book by the Ecuadorian journalists Arturo Torres and María Belén Arroyo. Arizala was supremely superstitious, carrying amulets into combat that he believed would stop bullets.

His FARC unit controlled the sprawling region of Tumaco, an area hugging the border with Ecuador that had long produced more coca, the plant from which cocaine is made, than any other in Colombia. Rebel leaders discovered he excelled in the capitalist venture of narcotics trafficking more than he did in spreading Marxism. So they put him to work in the trade they depended on to fund their half-century-long war. One of his specialties was managing the clandestine laboratories where workers used a toxic brew of chemicals and solvents to cook coca leaves into cocaine.

When FARC agreed to lay down its arms in a 2016 peace accord, Arizala refused to give up his narcotics trafficking business. Instead, he created a new narco-guerrilla group, the Oliver Sinisterra Front. By 2018, more than 100 former FARC comrades and 300 armed civilian militia were under his command, according to an Ecuadorian government intelligence report. Arizala soon controlled an empire, on both sides of the border, of coca plantations, labs, and waterways flowing into the Pacific—vital arteries for smuggling cocaine to North America. One big buyer was Joaquín “El Chapo” Guzmán’s Sinaloa cartel in Mexico.

The crackdown on calcium chloride started taking a toll on Arizala in late 2017. Narcotics agents arrested three of his top lieutenants in January 2018, including the man responsible for securing his chemicals. Arizala began to text ominous threats to a police commander in San Lorenzo, according to a report from the Organization of American States. Release his comrades, Arizala warned in one series of WhatsApp messages, or there would be bombings in Ecuador.

That’s when investigators started hearing chatter on tapped phone calls about an impending attack. It’s also when Gavilanes’s unit nabbed the load of Tetra calcium chloride near San Lorenzo. Three days later, Arizala bombed the San Lorenzo garrison.

Over the next few months, thousands of troops from Colombia and Ecuador poured into the region, making it one of the most militarized swaths of border in the Americas. Arizala unleashed a cascade of bombings and firefights, driving thousands of people from their homes and shocking a nation that had never really lived through terror attacks. His fighters kidnapped two Ecuadorian journalists and their driver, who were later killed in the crossfire as troops closed in. Colombian military and police forces hunted Arizala through the jungle and finally cornered him in a small village, where they shot him dead in December 2018.

The chemical pipeline to the cocaine labs, however, kept flowing. Since Arizala’s death, Ecuadorian police have regularly seized multiple multiton loads of calcium chloride. The majority of it was made by Tetra, according to case records and interviews with police commanders. Even after Ecuador and Peru imposed border controls in March in an effort to stanch the coronavirus pandemic, truckloads of calcium chloride kept getting through.

Police discovered how big the problem remains on July 15, four months into the Covid-19 lockdown. In a raid on a warehouse in northern Ecuador, Gavilanes’s men found 2.2 metric tons of calcium chloride that had been smuggled into the country from Peru. It was all from Tetra. Police said it was destined for Colombia, where it would have been used in the production of more than 6 metric tons of cocaine. They arrested seven people and seized weapons, drugs, and, of course, the Tetra calcium chloride.

It’s been a pattern for years: Through legal shipments to Peru, an American company fills and refills an illicit chemical pipeline—one that American taxpayers fund Ecuador’s police to drain. There’s no indication it might end anytime soon. Even after Bloomberg Businessweek informed Tetra that its booming exports to Peru have been diverted on a massive scale for cocaine production, the company declined to identify any actions it planned to take.—with Stephan Kueffner
 
Read more: Heroin’s Hidden Ingredient Is a Chemical Made by U.S. Companies and Mexico Was 18 Years Late to Control the Chemical Used for Heroin

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