By Matija Šerić
To successfully launder the money earned from drug trafficking, the Cali Cartel heavily invested its profits into legitimate business ventures as well as various companies and trades to disguise the illegally obtained funds. For example, it is believed that in 1996 the cartel was earning 7 billion dollars from drug trade in the United States alone. The influx of such enormous amounts of money required that the funds be laundered. One of the earliest examples of money laundering occurred when Gilberto Rodríguez Orejuela acquired the position of chairman of the board of the “Banco de Trabajadores.” The bank laundered funds for the Cali Cartel as well as the Medellín Cartel.
Sophisticated Money Laundering
Members of the cartel who were close associates of Gilberto were allowed to overdraw their accounts and take out loans without repayment. Profiting from this system, Gilberto was able to establish the “First InterAmericas Bank,” which operated out of Panama. In an interview with Time magazine, Gilberto admitted that money was being laundered through the bank, but he attributed the process to legal operations. According to him, money laundering was carried out in compliance with Panamanian law, which is why U.S. authorities sought to arrest him.
Later, in 1979, Gilberto founded the “Grupo Radial Colombiano,” a network of more than 30 radio stations, and the pharmaceutical chain “Drogas la Rebaja,” which at its peak included more than 400 stores in 28 cities and employed 4,200 workers. The value of the pharmaceutical chain amounted to about 216 million USD. Because the chain was owned by members of the Cali Cartel, it became the target of 85 bomb attacks carried out by Escobar’s Medellín Cartel between January 1988 and May 1990. Interestingly, the cartel was also connected with the Russian real estate company SPAG, registered in Germany in 1992. Later, German police suspected the company of involvement in criminal activities of St. Petersburg mobsters, Colombian drug lords, and transcontinental money laundering. The co-founder of the company, Rudolf Ritter, was arrested in Liechtenstein for laundering money for the Cali Cartel.
Iron Discipline and Ruthlessness
The Cali Cartel avoided political violence, as even the threat of it was often enough to achieve their goals in a weak and corrupt state like Colombia. Only those cartel members whose families resided in Colombia were allowed to manage drug operations in the homeland and the United States. The goal was to keep their families within the cartel’s reach—family members served as collateral ensuring that operatives would not betray the organization or withhold payments.
A concrete threat of death hung over any operative who made mistakes. The cartel frequently executed lower-ranking members who caused major failures or serious oversights. Remarkably, the Cali Cartel also organized so-called “social cleansing” of the Desechables—the “disposable” members of society. This included prostitutes, abandoned children, beggars, petty thieves, homosexuals, and homeless people. Together with local residents, the Cali Cartel formed Grupos de limpieza social (“social cleansing groups”) that carried out killings of these “undesirables.” The victims were left with signs reading “Cali limpia, Cali linda” (“Clean Cali, Beautiful Cali”), and their bodies were thrown into the Cauca River, which later became known as the “river of death.”
Conflict with FARC and Relations with the Medellín Cartel
During the 1980s and 1990s, Colombian drug cartels clashed with communist guerrillas waging an armed insurgency. In 1992, the Revolutionary Armed Forces of Colombia (FARC) kidnapped Christina Santa Cruz, the daughter of Cali Cartel leader José Santacruz Londoño. FARC demanded a ransom of 10 million dollars for her safe release. The Cali Cartel responded by kidnapping more than 20 members of the Colombian Communist Party, Patriotic Union, and other organizations. Christina was eventually released, but the fate of the hostages taken by the cartel remains unknown.
In the early 1980s, the Cali and Medellín cartels cooperated primarily in their fight against guerrillas, forming the group “Muerte a Secuestradores” (“Death to Kidnappers”). Additionally, the two cartels collaborated to stabilize prices, production, and supply in the cocaine market. They even divided the U.S. market: New York went to the Cali Cartel, while South Florida and Miami belonged to the Medellín Cartel. Los Angeles remained open for competition.
The cooperation began to deteriorate in 1983–84 due to increasing competition. Once the cartels had established infrastructure, routes, transport methods, and bribery systems, it became easier for competitors to make similar arrangements or exploit existing networks. By 1987, all cooperation between the two cartels had ceased. The split was significantly influenced by Medellín drug lord Rodríguez Gacha, who attempted to enter the New York market, which belonged to the Cali Cartel. Members of the Medellín Cartel also blamed the Cali Cartel for the arrest of drug boss Jorge Ochoa.
In the early 1990s, as the war between Escobar’s Medellín Cartel and the Colombian government escalated, the Cali Cartel created the group Los Pepes, which targeted members of the Medellín Cartel, especially Pablo Escobar. The Cali Cartel cooperated with Colombian police and military, providing them with information leading to arrests or killings of Escobar’s associates. By the time Escobar was killed in December 1993, Los Pepes were responsible for the deaths of around 60 members of the Medellín Cartel. After Escobar’s fall, the Cali Cartel gained absolute dominance over the global cocaine market.
Road to Ruin
During the frantic manhunt for Escobar, the Cali Cartel collaborated with government institutions in Bogotá and with the DEA, which gave them a certain level of immunity. The situation was well described by the saying: “The enemy of my enemy is my friend.” This allowed the cartel considerable freedom in the early 1990s, although drug shipments were still being seized by U.S. agencies. In 1991, 67 tons of cocaine were seized, 75% of which originated from the Cali Cartel. The following year, U.S. authorities arrested seven drug traffickers and seized 6,000 kg of Cali cocaine, while Panamanian authorities—assisted by the U.S.—confiscated an additional 5,100 kg. In 1993, three ships carrying 17,000 kg of cocaine were seized.
Major arrests occurred between June and July 1995, when six out of seven cartel leaders were captured. Gilberto Rodríguez Orejuela was arrested in his home, while Henry Loaiza Ceballos, Victor Patiño-Fomeque, and Phanora Arizabalete Arzayusa surrendered to police. José Santacruz Londoño was arrested in a restaurant, and in August, Miguel Rodríguez Orejuela was also captured. It is widely believed that the cartel continued to operate and that the brothers ran drug operations from prison into the late 1990s, up until around 1998. Even then, the cartel’s activities had not fully ceased. In 2004, Colombian authorities raided and seized the pharmaceutical chain Drogas la Rebaja, dismissing 50 of its 4,200 employees due to allegations of serving the interests of the Cali Cartel.
Final Collapse of the Cali Cartel
Due to suspicions that Miguel and Gilberto were still involved in drug trafficking, the United States requested their extradition. The Rodríguez Orejuela brothers were extradited to the U.S. in 2004 and 2005, where they pleaded guilty to conspiracy to export cocaine to America. Together with their plea, they agreed to forfeit assets worth 2.1 billion dollars. Under the agreement, they were not required to cooperate in other investigations and were held responsible only for assets originating from drug trafficking. Additionally, in exchange for their guilty plea, the United States agreed not to prosecute their family members. The official end of the Cali Cartel came in 2006, when Gilberto and Miguel were sentenced to 30 years in prison. The sentences were served simultaneously, but in separate facilities. Gilberto died in prison in 2022, while Miguel is still serving his sentence.
