America’s Multimillion-Dollar Bounty Program Just for Drug Lords

(Bloomberg) -- Wheeling gold-colored Samsonite suitcases stuffed with $100 bills, two undercover agents for the U.S. Drug Enforcement Administration walked into a Mexico City hotel room.

Minutes later, a low-level drug trafficker knocked. The agents watched as he removed $10,000 bundles from the cases, placing them one by one on the bed. The mound of money, $2 million in all, eventually spread across the mattress. When he was done, the man signed a receipt, gathered up his cash, and was gone. 

The year was 1994. The handoff, recounted by former DEA agent Mike Vigil, may sound like it was lifted from an episode of Narcos. But in the world of ultrahigh-value drug informants, it’s an illustration of the grim calculus governing America’s long, failed effort to stem the flow of narcotics into a country filled with drug-hungry citizens.

America’s Multimillion-Dollar Bounty Program Just for Drug Lords

More recently, however, the rate at which traffickers have been double-crossing their bosses in exchange for riches has risen. One reason may be the renewed emphasis on a little-known State Department program that’s been doling out millions of dollars to snitches for more than three decades.

Exploiting the temptation to become an overnight multimillionaire is what the Narcotics Rewards Program (NRP) is all about. In just the past five years, it’s distributed almost $32 million to 33 people, with some receiving as much as $5 million, according to the State Department’s Bureau of International Narcotics and Law Enforcement Affairs. The program, the U.S. government says, has resulted in the arrest of almost 70 “foreign major violators” since it was created. The total price tag: $108 million.

America’s Multimillion-Dollar Bounty Program Just for Drug Lords

Last month, the Trump administration put the NRP back in the spotlight when (now former) U.S. Attorney General Jeff Sessions announced the bounty on Nemesio Oseguera Cervantes had been doubled, to $10 million. Cervantes, 52, is the reputed leader of the Cartel Jalisco Nueva Generacion. The group is allegedly “responsible for trafficking many tons of cocaine, methamphetamine and fentanyl-laced heroin into the U.S.,” the State Department says. 

That last item is crucial to understanding the drug tide washing over America, and how law enforcement hopes the NRP can help stem it. Cheap heroin and synthetic opioids have been flowing north to replace once easily obtained pain pills churned out by pharmaceutical companies. The result has been a national epidemic, one in which overdoses have skyrocketed and U.S. life expectancy has declined.

Critics of the government’s rewards programs warn that huge cash bounties increase cartel violence and encourage corruption among U.S. law enforcement personnel. But the program’s success is hard to dismiss, its proponents contend.

Targets of the NRP are advertised on a U.S. government website that looks like a cheap version of Tinder—with profile photos, short biographies, height, weight and even eye color. Also listed are their alleged crimes and how much money you get if you turn them in.

One of these men is Fausto Isidro Meza-Flores. Known by the nickname “El Chapo Isidro,” he’s described by the FBI as the alleged head of a major drug trafficking organization based in Sinaloa, Mexico. There are several drug gangs located there, according to the government, some of which make up what’s referred to as the Sinaloa Cartel. (Meza-Flores shouldn’t be confused with another, more famous El Chapo, the NRP alumnus currently on trial in federal court in Brooklyn, N.Y. That El Chapo’s alleged partner back in Mexico is also on the NRP list.)

The U.S. claims Meza-Flores, 36, is responsible for the “possession, distribution, and importation of large quantities of heroin, methamphetamine, cocaine and marijuana into the U.S.” Click on his State Department web link, and a photograph of a clean-shaven, chubby-cheeked man in a salmon-colored shirt looks out at you. Turn him in, and you can have $5 million, the U.S. promises. (Some NRP informants, however, have claimed that the U.S. government stiffed them when it came time to pay up.)

America’s Multimillion-Dollar Bounty Program Just for Drug Lords

At the top of the NRP pyramid is Rafael Caro Quintero, whose bounty was raised to $20 million in April, the highest in the program’s history. Quintero, who was also placed on the FBI’s “Ten Most Wanted Fugitives” list, is the alleged leader of one of the most powerful drug trafficking rings in Mexico, according to the DEA, which says he ordered the kidnapping, torture, and murder of U.S. undercover agent Enrique “Kiki” Camarena Salazar in 1985. A conviction in that case was set aside by a Mexican court in 2013 on a technicality. Quintero, who has since vanished, had repeatedly denied any wrongdoing.

The NRP was established a year after Camarena was killed, at the height of the crack-cocaine epidemic in America. Over the years, the bounties offered under the program’s auspices have helped nab drug bosses and Revolutionary Armed Forces of Colombia (FARC) commanders, Venezuelan traffickers, and even an Afghan heroin warlord, according to the U.S. government and the International Justice Resource Center. 

But as those bounties climbed, the program renewed unease among criminal justice experts—specifically about whether the NRP’s lack of transparency makes it too susceptible to corruption.

“If you’re giving out cash to people ratting out drug dealers, it is quite possible that all you are doing is funding the next drug dealer,” says William Cowden, a former federal prosecutor.

America’s Multimillion-Dollar Bounty Program Just for Drug Lords

The NRP is the most obscure of several State Department rewards programs. The others, targeting alleged terrorists, war criminals and international organized crime, have paid out a combined $173 million, the government says. A key difference, however, is that NRP informants are managed solely by agents on the ground, according to a review of the government’s use of informant rewards. Officials at the State Department and the DEA don’t have any direct contact with the informants, the review’s author, a DEA lawyer, wrote in 2002. Instead, they rely on the agents to act as middlemen. 

While declining to provide specifics, the DEA told Bloomberg that it manages informants the same regardless of which program they’re associated with. “DEA’s policy regarding confidential sources as a whole is constantly evolving based on leadership, inspections, [Office of Inspector General] recommendations, technology, and many other factors,” a spokesman said.

Vigil, who went on to become the DEA’s chief of international operations before retiring in 2004, defends the NRP’s secrecy, the amount of money it pays out—and its beneficiaries. The informants are usually criminals and know full well that betraying a cartel could cost them their lives, he says. The government “can’t use choir boys,” says Vigil, who’s written several books about his undercover life. “Unfortunately, you have to deal with unsavory characters.”

Every NRP informant is identified by a code number and has a file locked in a safe inside the U.S. embassy of their home country, Vigil says. Only those closest to them know their true identity.  

“Drug trafficking organizations carry out unspeakable acts of violence as a result of paranoia from leaks within their organization,” says Wade Sparks, a spokesman for the DEA, part of the Department of Justice. “Unfortunately, this is not something that is fiction or just in movies.”

America’s Multimillion-Dollar Bounty Program Just for Drug Lords

By design, making it onto the NRP’s target list isn’t easy—it’s for drug lords only. The DEA, FBI, and State Department must first agree on a candidate. Then the U.S. ambassador in the country where the target is believed to be located is asked to assess how big the reward should be (make it too small, and no one will bite). Once a figure is chosen, the bounty is advertised on the NRP’s website, posters are taped to lampposts, plastered across billboards, printed on flyers, and published in newspapers. DEA agents make sure to inform their existing confidential sources of the reward as well. Word spreads.

Former DEA agent Tom Pasquarello, who ran the agency’s Southeast Asia bureau from 2007 to 2011, says he advertised NRP bounties on T-shirts, matchboxes, playing cards, and hats bearing names, faces, and rewards. Local police would visit strip clubs and late-night bars to hand out the paraphernalia, he says. 

The modern-day wanted posters had the desired effect. “These people we were hunting—they were getting nervous and changing their lifestyle,” Pasquarello says. “That’s when they are the most vulnerable.”

Vigil describes multiple NRP payouts to informants during his 15 years as an undercover agent. In Mexico, one of his sources was a cartel executioner who also transported drugs and bribed local officials. The informant helped capture a drug kingpin in exchange for the $2 million bounty, Vigil says. Some informants choose to take the money and run. Others demand a one-way ticket to the U.S., a new identity, and a fresh start.

America’s Multimillion-Dollar Bounty Program Just for Drug Lords

But in 2016, the Justice Department’s Office of the Inspector General slammed the U.S. government’s use of confidential sources. Following an audit, the office issued a blistering report assailing the informant programs as riddled with deficiencies and vulnerable to fraud.

“The DEA didn’t adequately oversee payments to its sources, which exposes the DEA to an unacceptably increased potential for fraud, waste and abuse, particularly given the frequency with which DEA offices utilize and pay confidential sources,” the report states.

As an example, the inspector general says that from fiscal years 2011 to 2015, the DEA paid about $9.4 million to more than 800 former sources who were no longer providing information. The agency failed to appropriately track source activity and “did not document proper justifications for all source payments,” the audit states. (DEA spokesman Sparks says NRP payouts are closely monitored.)

An “extremely concerning” discovery, according to the inspector general, was that the DEA condoned the payment of “sub-sources,” individuals recruited and paid by the agency’s confidential informants. Their use, the office says, “increases the chance that individuals may be conducting unauthorized illegal activity on the DEA’s behalf.” The DEA says it responded swiftly to the audit by enforcing “notable changes” to its policies and launching formal confidential source coordination training programs.

The inspector general’s report caught the attention of U.S. Representative Stephen Lynch, a Democrat from Massachusetts. Last year he proposed the Confidential Informant Accountability Act to lift the veil on secret sources. “Law enforcement agencies are spending millions of dollars on confidential informant programs, and Congress does not have any information on who these informants are, if they committed any crimes, and whether they have been properly vetted,” he says.

Lynch is calling on federal agencies to disclose the types of crimes their confidential informants have been committing and how much money they’ve been given. “There is no accountability, because it’s a cash business,” he says. In some cases, the NRP has corrupted law enforcement, the congressman says, though he declined to provide examples. Lynch says only that “you’ve got some DEA and FBI agents making $120,000 a year and dealing with drug cartels that bring that much in in a day.”

America’s Multimillion-Dollar Bounty Program Just for Drug Lords

A DEA spokesman says the agency has a specific office to investigate allegations of employee misconduct, but declined to comment directly on Lynch’s allegations. The Republican-controlled House of Representatives referred Lynch’s bill to the Subcommittee on Crime, Terrorism, Homeland Security and Investigations in April 2017, where it’s been ever since. With the Democratic Party’s takeover of the chamber come January, the bill may see new life.

Alexandra Natapoff, a law professor at the University of California at Irvine and author of a 2011 book on confidential informants, says Lynch’s bill would shine a much-needed light on this shadowy corner of law enforcement. “The issuance of bounties, rewards, and leniency is so secretive [that] the truth is we have no idea what the maximum rewards are,” Natapoff says. “That intersection is a troubling aspect of our criminal system which makes it seem like justice is for sale.”

Cowden, the former federal prosecutor, says informants and plea bargains have always been used as part of U.S. criminal justice. “We cut deals all the time—the system works that way,” he says. However, unlike the NRP, those arrangements usually have extensive oversight, he adds. Without it, the temptation for police and agents to cut corners, or worse, may be too great.

“Citizens in a democracy should always have concern when people in the government are saying ‘it’s too dangerous for us to tell you about it,’” Cowden says. “I am not going to sit here and say we should just trust the DEA to do the right thing.”

©2018 Bloomberg L.P.