The Enigmatic Alliance of the DEA and the Sinaloa Cartel

An El Universal investigation has concluded that agents of the US Drug Enforcement Agency and prosecutors from the US Department of Justice met and negotiated in secret with members of drug trafficking cartels to obtain information regarding rival organizations, a situation with increased violence around the country.

The DEA and the Justice Department, along with other American agencies contacted by this newspaper, declined to comment for this story.

Over the past year, this newspaper obtained official documents and judicial files from Mexico and the US, interviewed more than a hundred active and retired functionaries from both countries, as well as prisoners, relatives of prisoners, and experts, although only those willing to be identified have been cited here.

No Mexican authority reported these meetings to the nation’s congress. To this day, no investigation regarding these meetings, which were held on Mexican territory, has been launched.

Judicial documents, copies of which are in the hands of this newspaper, indicate that the US government knew of and authorized the meetings, as well as the negotiations with members of the Mexican cartels, in particular the Sinaloa Cartel, in order to obtain information on their rivals, and with it carried out seizures of shipments as well as arrests, all of which escalated the violence in Mexico during the presidential terms of Vicente Fox and Felipe Calderon.

During the two PAN [conservative party]presidential terms, US prosecutors such as Steve Fraga, as well as DEA agents including Manuel Castanon, David Herrod and Carlos Mitchem, who was assistant regional director of the agency, met with Mexican drug traffickers.

David Gaddis, then Mexico City-based regional director of the DEA, along with other agency directors based in the US, authorized agents to meet with cartel members without informing the Mexican government, and drew up written agreements permitting the narcotraffickers to continue operating.

“Mostly because we are operating there [Mexico] to collect intelligence in support of investigations in the US,” wrote DEA agent Miguel Castanon in his written declaration for the Vicente Zambada Niebla trial in Chicago. “In that vein, I have interviewed various members of cartels and narcotraffickers like Zambada Niebla in Mexico. It is not like interviewing a fugitive who walks into my office in San Diego. In San Diego, I can arrest the fugitive. In Mexico, I can’t.”

Rusty Paye, spokesman for the US DEA, said that “The DEA will not comment on these ongoing investigations. Mr. Gaddis no longer works for the DEA.”

In Colombia, the DEA as well as other US agencies obtained information from rival organizations to use against Pablo Escobar, working closely with the Colombian police, an effort that former US ambassador to Colombia Myles Frechette described as very important and a great success.

“The narcotrafficking problem continues in Colombia, but a reduction in the trafficking of cocaine and other drugs was obtained,” Frechette said in an interview with this newspaper.

The DEA has used identical tactics in Colombia since the 1980s, as well as in Cambodia, and Thailand; for the past ten years this has been standard operating procedure for the agency in Afghanistan as well, says Edgardo Buscaglia, professor [of law and economics]at Columbia University.

“Of course, this modus operandi implies a violation of international law, and additionally represents pouring more gas on the fire of violence, as well as violations of legal norms and human rights,” Buscaglia says.

In that sense, he added, what the DEA did and did not do violated the UN convention on Organized Crime “since the convention demands that any transnational investigation by a state on the sovereign territory of another state, is always subject to the current legal system of the territory where the investigative techniques are used.”

On this point, criminologist Juan Velazquez underlined that the international treaties signed by Mexico and other countries permit foreign agents to be subordinated to our agents, and only in a cooperating role, collecting information among other things, without being allowed to operate independently.

“Neither bilateral agreements nor other ‘things’ are above the Constitution, which is the supreme law. If our authorities have permitted otherwise, they were acting illegally, and are liable for that, but can they be found liable if everyone acts in secrets and so nothing is known about it?” he asked.

The secret war

At the beginning of Enrique Pena Nieto’s term, there were fear within the US government that the new PRI administration might negotiate with narcotrafficking cartels, in order to reduce violence among other reasons. Nevertheless, the US government was already negotiating with the cartels.

Between 2000 and 2012, over the period of the two PAN presidencies, but especially between 2006 and 2012, during the Calderon government, the US government established collaboration agreements with the Mexican government, unprecedented in the country’s history, to combat narcotrafficking. Simultaneously, it set off a secret war in Mexico via its agents who met directly with members of the cartels.

The meetings DEA agents and Immigrations and Customs Enforcement agents as well as Justice Department prosecutors held with narcotraffickers in Mexico were authorized from the US, according to judicial documents.

In June, 2009, an agreement between the Department of Justice and the Homeland Security department allowed both DEA agents and ICE agents to investigate narcotrafficking suspects on the frontier as well as internationally, ending a year-long dispute between the two agencies.

Without the presence of any Mexican authority, as demanded by bi-national accords, and without informing the Mexican government, DEA agents met with members of the cartels, on Mexican territory. The objective was to obtain information about rival organizations, while simultaneously constructing a network of narcotrafficker informants who had signed cooperation agreements, subject to producing results, so that they might obtain future benefits, including dropping of charges in the United States.

On some occasions, DEA agents or the US government furnished information obtained from these meetings, without citing them, to the Mexican government so that police or Mexican military units would carry out arrests. During Calderon’s term, 12 of the most important arrests of narcotraffickers were produced by the DEA, according to reports by that agency.

One of the cases that gave away the negotiations between US agents and Mexican cartels was registered at the end of November, 2006, at the end of Vicente Fox’s presidential term, when the corpse of a man was dumped in the El Chamizal park, near the Cordoba-Las Americas bridge that connects Ciudad Juarez, Chihuahua with El Paso, Texas.

Taped to the face of the dead man were the business cards of ICE antidrug agents Raul Bencomo and Todd Johnson; stuffed in his mouth was his chopped-off index finger.

Both ICE agents were cited during the US trial of Guillermo Eduardo Ramirez Peyro, named as a paid informant of ICE as well as a member of the Juarez cartel, and whom he had brought to a house in the Las Acequias neighborhood of Ciudad Juarez in Jan. 2004. In the residence, thereafter known as the “House of Death,”, 12 bodies were discovered, as this newspaper reported at the time.

In March, 2010, Jesus Manuel Fierro Mendez, a member of the Sinaloa cartel and former police captain in Ciudad Juarez, testified in El Paso that he had been the ‘spokesman’ for [XX Cartel Head] Chapo Guzman during numerous telephone conversation and face-to-face meetings with ICE agents.

“He had two of us who were, we could say, spokesman,” said Fierro Mendez, who said that it was ‘El Chapo’ who authorized him to meet with ICE and inform on the activities of rival cartels.

The Immigration and Customs Enforcement agency has opened an investigation into inappropriate handling of sources on the part of ICE agents who met with and negotiated with members of the Sinaloa Cartel to obtain information on rival groups. The names of the agents have not been revealed.

Between 2009 and 2011, DEA agents from the Houston office made direct contact with important members of the Gulf Cartel and the Zetas to obtain information on rival organizations, but once again the names of agents and contacts have not been made public.

“The United States government and its various agencies have a long history of giving benefits, authorizations and immunity to criminals and their organizations, to commit crimes including murder in exchange for information against other criminals and other organizations,” said the Zambada Niebla defense in document 94.

This tactic, the document says, has been extensively utilized by the Justice Department and its various agencies in the “War on Drugs” without regard for the loss of lives in Mexico and the United States, and without regard for the continuing traffic of drugs into US territory and its consumption there.

“This strategy, which they call ‘divide and conquer,’ using one narcotrafficking organization against others, is exactly what the Department of Justice and its various agencies have implemented in Mexico,” said the Zambada-Niebla defense.

In the opinion of Edgardo Buscaglia, the intelligence strategy of a country that seeks to use one criminal group to eliminate another is no inappropriate, as long as it is implemented in a context where the state has more or less effective judicial, property and anti-corruption apparatuses.

“But if the United States tries to implement a strategy like this in Mexico, where these three apparatuses are notable for their absence in the state, the outcome will be that the criminal group that is being ‘used’ to eliminate the others neds up being the most powerful force. I fear that that has been the case with the Sinaloa criminal organization,” he said.

The case which has given the most detailed look at DEA dealings with Mexican cartels is the ongoing Chicago , Illinois trial of Vicente Zambada Niebla, son of Ismael ‘El Mayo’ Zambada, one of the leaders of the Sinaloa cartel.

The testimony and documents which have been revealed since 2009 when the case against Zambada Niebla began have put pressure on the US regarding its primary informant, as well as information on the meetings between DEA agents and Mexican narcotraffickers, on the agreements which they have reached, on the ‘Fast and Furious’ gun operation, and on the refusal of the US government to reveal operational details in Mexico.

What has become clear is that the meetings between agents of the DEA and high-level members of the Sinaloa cartel were carried out more than 50 times on Mexican territory, according to court documents which contain testimony by agents and employees of the US government.

Secret agreements

On March 18, 2009, in a room at the Sheraton Hotel, at five minutes after midnight, DEA agents Manuel Castanon and David Herrod met for 30 minutes with Vicente Zambada Niebla and the lawyer Humberto Loya-Castro, both of the latter considered by the US and Mexico as members of the Sinaloa Cartel.

The meeting had been planned for three months, and, due to a leak by a newspaper, had been de-authorized at the last minute by David Gaddis, the regional director of the DEA, based in the US embassy to Mexico. In the end, however, the meeting was held anyway when Vicente Zambada showed up with Loya Castro. Five hours later, Zambada Niebla was arrested by the Mexican army.

But the story had begun years before, when in 1995, the US government opened a case in the Southern District of California against Joaquin ‘El Chapo’ Guzman Loera and the Sinaloa Cartel’s lawyer, Humberto Loya Castro.

Near the end of the 90s the lawyer, Loya Castro attempted to resolve the case against him by meeting with American agents in Monterrey, Nuevo Leon, according to defense and prosecution documents from the Vicente Zambada case.

“El Chapo gave his approval, and Mr. Loya-Castro began turning over information from El Chapo to the agents,” said the lawyer Fernando A. Gaxiola, legal interpreter for the Vicente Zambada-Niebla defense, in his Oct. 24, 2011 testimony.

Loya-Castro refused to inform on the Sinaloa Cartel, but he continued to give information on rival cartels, and in the middle of the 2000s, he met with DEA agents to discuss the charges against him.

“The agents also told Mr. Loya-Castro to be careful when he talked to El Chapo on the phone, because Mexican authorities might be listening in, and above all the information El Chapo gave him over the phone should not be explicit,” Gaxiola revealed.

But the initial approach did not turn into a formal written agreement until the middle of 2005, with DEA agent Manuel Castanon, who would later refer to Loya Castro in numerous documents as ‘Cooperating Source,’ or CS.

“In 2005, when I began working in Hermosillo, one of the first tasks my supervisor assigned to me was a signed agreement with an information source who I understood had been intermittently giving information to the DEA and ICE for several years,” agent Castanon said in his written testimony dated Dec. 2, 2011 and given to the Chicago court for the Zambada-Niebla case.

On June 3, 2005, Loya-Castro signed a ‘Confidential Cooperation Agreement’ with the United States Department of Justice via the DEA, with DEA agents Manuel Castanon, David Herrod and Greg Garza as co-signatories.

Exhibit 109 of the US Prosecutor dated Sept. 9, 2011 indicates that Loya Castro signed multiple confidential cooperation agreements with the DEA between 2005 and 2011.

The confidential cooperation agreements, copies of which are in the hands of this newspaper, indicated that Loya-Castro commits unconditionally to give information, act under the supervision of the US government, and carry out illegal activities specifically authorized by his supervising investigator, all without expecting anything in exchange.

“Loya continued his activities with the Sinaloa Cartel, with the knowledge of the US government, without being arrested or prosecuted,” said the Zambada Niebla defense in exhibit 94, a 16 page document dated 29 July 2011 in the ongoing prosecution of the son of Ismael Zambada, in the case numbered 09-CR-00383.

Mr. Loya-Castro “declared that he gave important information to the agents, which he passed along from El Chapo, El Mayo and Mr. Zambada-Niebla, which resulted in numerous arrests of principal figures in rival narcotrafficking organizations,” Gaxiola explained.

According to the lawyer Gaxiola, Zambada-Niebla gave information to Loya-Castro about one of the principle narcotraffickers of a rival cartel, so that he would give it to the DEA agents and thereby aid in the apprehension of this person.

“Mr. Loya-Castro declared that under this agreement, the charges against him were dropped in 2008,” said Gaxiola, who had been the interpreter during meetings between Zambada’s United States lawyers with Loya at the Four Seasons hotel in Mexico City on March 9 and July 14 of 2010.

DEA agent Manual Castarno confirmed that in 2008, his agency supervisors had recommended to the US prosecutor that the case against Loya-Castro be dropped.

“I was in favor of throwing out the charges because of the extraordinary assistance the CS (Loya-Castro) had given over many years and because the CS was not an operational narcotrafficker (as opposed to someone like Zambada Niebla, who I look at differently),” said agent Castanon.

Moreover, he said, the final decision on recommending the charges be thrown out rested with his boss David Gaddis, and the decision to actually throw out the charges would rest with the office of the Attorney General of the US.

“After throwing out the charges, the CS continued to provide me with information. I continued to work with him/her,” indicated Castanon, who in his testimony tried to avoid giving details which would identify Loya Castro as a man.

In turn, Loya Castro informed the Sinaloa Cartel that he remained in regular contact with Manuel Castanon and the DEA, and that he continued to give the information on rival groups.

“He declared that he met with United States agents at least 50 times, that he made hundreds of telephone calls and sent numerous emails to agents,” said lawyer Gaxiola.

After the agreement, Loya-Castro arranged that Vicente Zambada-Niebla meet in March 2009 with agents of the US so that he could directly provide information to the DEA and sign a cooperation agreement with the US government like the one Loya-Castro had signed and which had resulted in the dropping of charges against him.

DEA-Zambada

In Jan. 2009, Loya-Castro met with DEA agents to look into the possibility of introducing them to Vicente Zambada-Niebla, who was interested in cooperating with the United States government, according to Exhibit 109 of the U.S. prosecution.

The meeting with Zambada-Niebla originated with a contact by DEA agent Manuel Castanon with Loya Castro on Jan. 30, 2009 in Mexico City, according to agent Castanon’s testimony.

“During the meeting with the CS [Loya-Castro], at which I believe agent Herrod and Assistant Regional Director Carlos Mitchem were also present, the CS told me that he/she had been instructed by Joaquin Guzman Loera to meet with Zambada-Niebla. Guzman Lowera told the CS that Ismael Zambada-Garcia was interested in having his son Zambada-Garcia cooperate with the DEA,” Castanon explained.

Around that time, agent Castanon found out that Zambada-Niebla had been indicted in the court of the District of Columbia [Washington, DC]. For that reason, he told Loya-Castro that we would look into meeting with Zambada, but that he could not promise that his cooperation would be worth it.

Moreover, DEA agent Castanon suggested that he knew that the Assistant Attorney General of the United States as well as agent Steve Fraga of the court of the disctrict of Columbia asked him to make no promises to Zambada-Niebla, but to listen to what he wanted to say.

“At that point I contacted my superior, the resident agent in charge of the Tijuana office. Agent Herrod also contacted my supervisor. Finally, DEA management authorized an initial meeting between the agents, the CS (Loya-Castro) and Zambada-Niebla to determine what information he could provide,” Castanon testified.

Based on his conversations with agent Fraga and DEA management, agent Castanon said that the initial meeting with Vicente Zambada-Niebla would be ordinary, and would seek to explore potential cooperation.

“It is common for an initial meeting with potential cooperating suspects that we attempt to obtain acknowledgement of as much of their criminal conduct as possible, explore the kinds of information they could provide regarding the criminal conduct of others, make them no promises, and speak as little as possible, in order to hear as much as possible,” Castanon said.

On March 10, 2009, Castanon spoke with Loya Castro; “we discussed various places for the meeting, but I insisted that any meeting take place in Mexico City.” Loya confirmed that Zambada-Niebla was in agreement, and on March 15, they agreed to meet on March 18.

“Agents of the DEA in Mexico sought and obtained permission from the DEA and from prosecutors in Washington, DC to conduct a preliminary introductory meeting with the defendant (Zambada-Niebla) with the intention to determine his interest in cooperating with the US government and his viability. The agents agreed to meet with Loya-Castro and Zambada-Niebla in Mexico City on March 18, 2009,” the prosecution said.

On the evening of March 17, 2009, DEA agents Manuel Castanon and David Herrod flew to Mexico City and met with Washington DC DEA agents and US Embassy officials to make preparations to meet with Loya Castro and Vicente Zambada-Niebla.

During the meeting, he said, “one of the supervisors from Mexico City asked us have we had seen an article recently published in the Mexican newspaper ‘El Porvenir’ which stated that agents of the US DEA were traveling to Mexico to meet with high level narcotraffickers. I warned them that I had not seen it.”

According to prosecutors, David Gaddis, the North and Central America regional director of the DEA met with agents Castanon and Herrod at the US embassy, telling them he he was worried about US agents meeting with a high level Sinaloa Cartel member like Zambada-Niebla, and ordered them not to meet without authorization.

In his testimony, Loya-Castro informed the Zambada defense that Manuel Castanon called him on the day they had agreed to meet to inform him that the meeting was canceled “because an article published in a newspaper indicated a possible leak regarding the meeting.”

The article Gaddis was referring to was a note published on on March 13, 2009 in the daily “El Porvenir” which said that a special group from the DEA had been sent to Mexican territory to seek contacts with high level capos from various cartels to negotiate their voluntary surrender to US authorities.

The note cited “high level military and government sources” who had participated a week previously in a meeting with Admiral Mike Mullen, then chairman of the American Joint Chiefs of Staff and Mexican functionaries.

The note went on to claim that the government of Felipe Calderon had authorized 62 American antinarcotics agents to operate in Mexico without oversight from Mexican authorities, and without needing to report their activities to the Mexican government, in addition to which information that they gathered would be secret, and classified as a matter of national security for the US.

While agent Castanon wanted to cancel the meeting, Loya-Castro asked to discuss the matter in person, and went to the Hotel Sheraton to explain that Zambada-Niebla had put himself at risk by traveling to Mexico City.

The Sheraton meeting

At 11 pm on the night of March 17, 2009, agents Castanon and Herrod waited for Loya-Castro in the lobby of the Sheraton in Mexico City. They took him to their room where they showed him the newspaper article, reiterating that they could not meet with Zambada-Niebla without authorization.

Loya Castro got nervous, and asked to have the meeting anyway, saying that he was personally responsible for Zambada-Niebla, and he had committed to this with [Cartel boss] Ismael Zambada-Garcia, according to Castanon’s testimony.

After this, the agent testified, Loya Castro told him and Herrod that he would have to inform Zambada-Niebla of the change of plans, and left the room at 12:15, after midnight, promising to come back in 20 minutes.

“At approximately 12:30, agent Herrod came back to the room. He was accompanied by the CS (Loya-Castro) and Zambada-Niebla. Agent Herrod said that rather than get into a discussion in the lobby (and given that Herrod did not speak Spanish), agent Herrod had gotten in the elevator followed by the CS and Zambada-Niebla,” Castanon testified.

Inside the Sheraton room, agents Herrod and Castanon searched Loya-Castro and Zambada-Niebla for weapons, and took aeway their cellular phones.

“On March 17 [sic]I met for approximately 30 minutes in a hotel in Mexico City with Vicente Zambada-Niebla and two other persons – DEA agent David Herrod and a cooperating source (CS) with whom I had worked since 2005. In the 17 March 2009 meeting I spoke in the name of the DEA. Agent Herrod does not speak Spanish,” Castanon testified.

To start with, the agent told Loya Castro and Zambada-Niebla that he could not meet with them until there was permission from DEA bosses, and he showed them the newspaper article.

“Zambada-Niebla told me he had driven all the way from Guadalajara, and that no one knew about the meeting other than his father, the CS (Loya-Castro) and Guzman Loera,” and that he wanted to personally say that he was speaking seriously about cooperation, and he wanted to do everything he could to come ot an agreement with the government of the United States,” Castanon said.

Over the following minutes, they spoke about the indictment against Zambada-Niebla in Washington, DC, about the legal process of being a cooperating source for the United States, about a future meeting in another country or in the US, and that agent Castanon could not make any promises or guarantees, the agent explained in his testimony.

“Near the end of the approximately 30 minutes, we returned to the fact that I wasn’t supposed to have met with im and that this could cause me problems. I was worried about the repercussions in the DEA because I wasn’t supposed to have met with Zambada-Niebla. I said said that I would contact the CS (Loya-Castro) if we wanted a meeting. Then I told Zambada-Niebla and the CS that they should go, and the meeting ended.”

Hours after this meeting, the antidrug agent learned of the arrest of Vicente Zambada-Niebla by troops of the Mexican army in the Jardines de Pedregal neighborhood of Mexico City.

“The next day, three other agents of the DEA and myself met with Zambada-Niebla in the prison where he was beign held. He repreated his desire to cooperate. He said that he did not want to remain in Mexico. That was the last time I spoke with him.”

For the agent, it was clear that the authorization to meet with Zambada-Niebla in March of 2009, even before he meeting was ordered canceled, “we had been told to have a preliminary meeting with him, to listen to him, and not to promise him anything.”

“The only thing I authorized in relation to Zambada-Niebla was that agent Steve Fraga go to Mexico in March of 2009 in an attempt to interview Zambada-Niebla and obtain confessions from him,” says Patrick H. Hearn, then a prosecutor at the Department of Justice’s criminal division for narcotics and dangerous drugs.

Prosecutor Hearn said in his testimony at the Chicago trial that he considered Zambada-Niebla “a significant narcotrafficker and an important member of the Sinaloa Cartel.”

The authorization for the meeting was given in part because agent Fraga told prosecutor Hearn that Loya-Castro “had given information that permitted the seizure of 23 tons of cocaine, as well as other seizures related to the Vicente Carillo-Fuentes organization, and information regarding the Arturo Beltran Leyva organization.”

Threats

After the arrest of Zambada-Niebla, his US lawyers began to ask for, among other things, documents regarding Loya-Castro and his relationship with the DEA, as well as other agencies, and the role that Loya Castro played in the name of the Sinaloa Cartel.

The American lawyers were warned by DEA agent Manuel Castanon via Loya-Castro that if they continued in this line, “a lot of people would be exposed, and it could end up hurting Loya-Castro, his family, Mayo, El Chapo and even the US lawyers themselves could be at risk,” according to the testimony of the lawyer Gaxiola.

Furthermore they were told that if Castanon “and his relationship with the Sinaloa Cartel and with the government of the United States were exposed, and if the activities of Mr. Loya-Castro in giving information regarding rival cartels were exposed, it would be bad not only for him, but for the United States government, since they wanted no one to know about their relationship with the leaders of the Sinaloa Cartel,” according to Gaxiola.

The use of members of criminal organizations against others on the part of US authorities happens more often than it should, says Robert Mazur, a retired DEA agent who participated in an undercover financial operation against the Medellin Cartel.

“We should be very careful when we use very high level people against other criminal organizations,” said Mazur, referring specifically to the case of Whitey Bulger, the Boston mafia boss who manipulated US federal agents to whom he provided information on rival organizations of the Italian Mafia.

At the beginning of the present [PRI] administration, the number of DEA agents in Mexico diminished, along with the number of Mexican police assigned to the Sensitive Investigations Unit which operate in Mexican territory and are directed by antidrug agents. Nevertheless it is unknown if the DEA continues to maintain its close contact s with the drug cartels in its search for sensitive information.