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Dirty gold, clean cash: A Miami Herald investigation
A river of gold controlled by drug lords runs through Miami.
The Black Hawk helicopters roared over a remote jungle in southwestern Colombia, ignoring the patchwork of emerald-colored coca fields that seemed to make easy targets.
Instead, they homed in on a yellow backhoe, far from the nearest village or road, tearing into a riverbank searching for a metal that has inspired dreamers and criminals since the Spanish quest for El Dorado: gold.
As the choppers hovered over the muddy clearing, heavily armed police, bristling with grenades, body armor and automatic rifles, rushed at the machine. The stunned backhoe operator fought back briefly, swinging the mechanical arm like a club, before running into the jungle amid a cloud of tear gas.
Within minutes, police had packed the backhoe with C-4 explosives and the $100,000 Kobe excavator burst into a ball of fire — another small victory in the country’s outright war on illegal mining.
Colombia’s illicit mining industry, like the far-flung operation that police raided late last year, generates about $2.4 billion a year in criminal cash — three times more than the country’s notorious cocaine industry, according to some intelligence estimates. And like cocaine, the vast majority of illegal gold is being sent overseas to cities in Europe and the United States — including Miami.
In the process, the precious metal has become the lifeblood of gangs and guerrillas and is turning once-pristine jungles into toxic landscapes tainted with mercury and cyanide.
“Today, criminal mining brings more money to criminal groups, to guerrilla groups, to mafias ... than drug trafficking,” Colombian President Juan Manuel Santos warned in 2015. And that dynamic isn’t changing.
For decades, Colombia has been synonymous with the drug trade. And it remains the world’s largest cocaine producer, despite billions of dollars in U.S. military aid. Even so, many of the strategies and tactics developed during the long, bloody drug war are now being used to combat the illegal mining trade.
As he watched the backhoe smolder, Col. Juan Francisco Peláez, the commander of the National Police Force’s Illegal Mining Unit, said any number of armed groups that also have deep cocaine ties were likely getting rich on this far-flung operation.
In this part of the country, the leftist National Liberation Army (ELN), the criminal group Clan del Golfo and former members of the now defunct Revolutionary Armed Forces of Colombia (FARC), are all fighting for control of gold riches.
“Personally, I think illegal mining is even worse than coca crops,” Peláez said, as he surveyed the primary forest that had been turned into a denuded mud pit stretching for hundreds of yards. “Look at this lunar landscape. When they tear up the vegetation like this it could take 100 years to recover — even more if it’s contaminated with mercury.”
Colombia’s illegal mining, like similar operations in Peru and Brazil, is concentrated — perversely — in some of the most pristine and biodiverse spots in the region.
In Colombia, illegal gold mining is the largest single cause of deforestation, sweeping away more than 60,100 acres of forest in 2014 alone, according to U.N. figures. And the unregulated use of mercury and cyanide — to extract the gold from ore — has poisoned water and wildlife to such an extent that some riverside communities in northern Colombia have quit eating fish for fear of mercury poisoning.
Despite the country’s efforts to control the trade, about 80 percent of Colombia’s gold is being mined illegally, without permits or even basic environmental precautions, authorities say.
As miners punch deeper into the forest hoping to strike it rich — and feed the global demand for gold jewelry, bullion and smartphone components — once sleepy villages are being turned into hellish underworlds of deforestation, sex trafficking, forced displacement and child labor.
In some ways, the war on mining makes the war on drugs look easy, said Anibal Fernández, Colombia’s vice minister of defense. In Colombia, every step of cocaine production is illicit, from growing the coca, to processing it, to moving it and selling it.
“Every link in that chain is illegal and going after it is very clear,” he said. “With illegal mining, once gold is gold, it’s a legal product. ... And that’s forced us to be much more focused on how we fight it.”
Key to that fight is destroying and seizing the costly heavy machinery that’s being used in the operations — most blatantly the diggers and dredges employed in riverside, or alluvial, mining.
Relying on some of the same aerial imagery used to identify coca fields, authorities are spotting backhoes and dredges operating in areas where there are no legal mining concessions.
When the machines are close enough to a town to be impounded, Colombian authorities do so. But often they find the equipment in areas so remote that destroying it is the only viable solution. Peláez said that criminals sometimes dismantle the machines, move them on river barges and then reassemble them on-site.
“And sometimes we have no idea how they got there,” he said. “It’s as if a giant hand just set them down in the middle of the jungle.”
On Jan. 13, the government announced it was sending a force of more than 9,000 soldiers and police to Colombia’s troubled Pacific region, including areas around Babacoas. President Santos said the mission of Joint Task Force Hercules is to “dismantle” criminal networks and create a safe environment for legitimate business. Along with taking on the booming coca trade, the forces will undoubtedly have to confront illegal gold mining operations.
Easy to exploit, hard to prosecute
In the illegal mining food chain, the dredges and backhoes are the apex predators, the most obvious and destructive aspect of the trade.
But just as crucial is the web of corruption and deceit that transforms the ill-gotten metal into the legal bullion coveted by central banks and South Florida jewelry shops.
It’s impossible to know exactly how much illegal gold is sloshing through the system, but government and industry figures provide some clues.
On paper, Colombia exports more gold than it actually produces. While large-scale, legal mining operations unearthed eight tons of gold in 2016, according to the Colombian Mining Association, the country exported 64 tons worldwide, much of it to the United States.
That discrepancy is due in part to unlicensed mining operations — some of which are tied to criminal groups — and to gold that’s smuggled across the border from neighboring countries as part of money-laundering schemes, said Leonardo Guiza, a law professor at Colombia’s Universidad del Rosario and an expert in illegal gold mining.
Here’s how it works: Gold is purchased from illegal operations throughout the region at a steep discount using dirty cash, then unscrupulous middlemen fake the paperwork to make the metal appear to come from legitimate sources. Once it has been “laundered” and made indistinguishable from legal gold, it’s exported to the United States or Europe, sometimes in exchange for cash produced by drug profits.
“It’s a very lucrative activity, hard to prosecute, and it’s easily used to move and launder money,” Guiza said.
Crucial to the scheme are the merchants who are introducing illegal gold into the pipeline of legal exports, said Carlos Andrés Cante, Colombia’s deputy minister of mines.
Those who sell gold to exporters are required to provide details of where it came from. In most cases, however, the merchants will provide a list of dozens, or even hundreds, of individual gold miners, or barequeros.
The system was designed to allow small-scale miners to benefit from being part of the global gold trade, but the reality is that it has been co-opted by criminals, Cante said.
In 2016, the ministry researched about 110,000 barequeros whose names showed up on the export registry. They found that more than 8,000 were either dead or didn’t exist. In some cases, a single miner panning for gold was credited with selling 200 grams a month — more than 10 times what could reasonably be expected.
“It’s obvious that the mechanism of barequero is being used to launder gold that’s being exploited illicitly,” Cante explained.
In August, Colombian police arrested a woman known in the underworld as “the queen of gold,” Mara Cecilia Gordillo.
She and four associates are accused of buying illegal gold, passing it off as legal product purchased from barequeros and sending a staggering three tons of the metal to foundries in Colombia and in Miami. Their illicit mining operations produced so much silt and debris that they stopped a river in its tracks, authorities say. Gordillo, who is in a Colombian jail awaiting trial, did not respond to requests for comment.
In many cases, the barequeros aren’t even aware that merchants are doing business in their names. But stopping the practice hasn’t been easy.
Last year, the government began requiring the small miners to register in person with the tax department, in hopes of making it harder for criminal networks to use them as phony sources of gold. The move sparked more than a month of miner protests and a handful of deaths. And it’s still unclear if the new regulations will help solve the problem.
Jaime Pinilla, a Colombian engineer and legal gold mine owner, said there are only a small number of large, legitimate operations.
“At least half of the gold is coming from somewhere else,” he said. “No one knows where.”
And some of it isn’t even real.
Criminals sometimes simply fabricate shipments of “phantom” gold to justify large transfers of money from abroad, making drug profits look like legitimate gold deals.
“Most of it is pure fabrication. It’s a huge money-laundering scheme,” said one former Colombia law enforcement official who asked to remain anonymous. “We sent people on the ground [to where the gold was supposedly extracted], and there weren’t even mines.”
But the war on illegal mining is replete with unintended consequences. And as the government cracks down on illegal mining, communities with long histories in the gold trade are finding themselves on the wrong side of the law.
Late last year, deep inside a mine called Las Brisas, near the town of Segovia in the northeastern Antioquia department, sweaty miners were carrying 100-pound loads of rocks on their backs as they’ve done for generations.
The operation supports at least 80 families. An additional 100 people, mostly older women and single mothers, work as chatarreros, processing discarded rock, or tailings, from the mine, trying to find trace amounts of gold.
But in the eyes of the law, the mine is illegal, since the workers don’t have formal title to the property.
Fernando Gomez, the secretary of mines for Segovia, said the vast majority of miners in the municipality are, strictly speaking, illegal miners. But it’s the government, with its excess of rules and lack of guarantees, that has forced them into that situation, he said.
For example, the government is trying to encourage miners to use environmentally friendly practices that minimize the use of toxic mercury — such as panning for gold or using high-speed centrifuges — but most of those techniques require a large initial investment.
In addition, in Segovia and nearby Remedios, the government is now helping enforce a massive 22,000-acre mining title that dates back to the 1800s and blankets hundreds of ancestral mining areas.
That means miners who have worked gold veins for generations are now being told they are trespassing on the property of Gran Colombia Gold, a Canadian-backed operation.
“We’re trapped inside of their title,” Gomez explained. “Now if we keep working where we have all our lives, we’re considered criminals, illegal miners.”
“The government doesn’t understand that to be a traditional miner isn’t the same as being a criminal miner,” he added.
Eliober Castañeda, the president of Segovia’s Mining Council, which represents about 8,000 independent miners, said they’re being squeezed between the government’s untenable regulations and violent gangs that see the informal miners as easy and lucrative targets.
Members of the Mining Council routinely receive death threats when they speak out against the criminal activity, he said, and their lawyer was murdered a few years ago.
“Not only are criminal groups killing our people and threatening us,” Castañeda said, “but then the government treats us like criminals.”
The criminal groups squeeze the miners in several ways. Sometimes mines will be forced to put gang-appointed workers on the payroll or required to buy fuel and machinery through gang contacts. But most often, the gangs extort money from the miners through a weekly or monthly vacuna.
Carlos Durango, a 40-year-old gold miner, said the government seizes on those extortion payments to accuse miners of being part of the criminal networks. But if making payments to stay in business and stay alive makes him a criminal, then he’s in good company, he said. Shakedown payments happen across the country in all industries, he said.
“Everyone in Bogotá is a criminal and everyone in Medellín is a criminal,” he said of the country’s two largest cities, “because everyone is paying the vacuna.”
And any miners who try to go the legal route do so at great personal risk, said Ivan Díaz Corzo, with the security consulting firm ORCA Risk Corp and a former member of Colombia’s anti-criminal mining task force.
“Any time somebody tries to do it in the correct way, they kill them just for show,” he said.
It’s not just small players who are vulnerable to the criminal gangs. In 2009, Canadian mining company Continental Gold hired a manager to help oversee operations in the town of Buriticá in northwest Colombia and three years later the man was promoted to vice president of corporate affairs. Unbeknownst to the company, its new VP was secretly working for two drug trafficking groups, according to prosecutors — the Oficina de Envigado, the criminal descendants of Pablo Escobar’s cartel, and El Clan del Golfo.
According to the Colombian attorney general’s office, the man shared information about locations of gold deposits and mine security with the gangs, allowing criminals to oversee the extraction of at least $2.3 million worth of gold from two mines.
Criminal groups “easily infiltrate companies, they infiltrate the authorities ... because the amount of money they move is enormous,” said Julián Bernardo González, Continental’s vice president of sustainability in Colombia.
If profits remain high and the risk of getting caught remains low, criminals will always be attracted to the trade, Díaz Corzo, with ORCA Risk, predicted.
“Compare how much it costs to put one ton of gold in the state of New York and how much it costs to put one ton of cocaine,” he said. “Criminal groups make so much more money from gold than from coca and it’s so much easier.”
The golden ‘cancer’
A few hours after the initial police raid on the Colombian riverbank, the unit attacked a much larger mining operation where three backhoes were working. As police were preparing to detonate the machines worth hundreds of thousands of dollars, the camp’s caretaker broke down crying, begging them to hold off.
He said he’d been kidnapped recently and needed the job to repay the ransom and support his family.
“Those are the real criminals and the terrorists,” he said of the unnamed gang. “Why don’t you go after them? Instead, you’re forcing us farmers to starve to death and eat s---.”
Peláez, the commander, said he could understand the man’s frustration. In many parts of rural Colombia, illegal mining and coca growing seem like the only viable economic options.
“We don’t accomplish anything in destroying and eradicating if there’s not another component coming in behind us,” he said, explaining that unless the government can create jobs in these isolated areas, villagers will likely resume mining.
Peláez calls gold a “cancer” that’s marred the Colombian landscape. And like some cancers, illegal mining often seems incurable.
Since Peláez’s police unit was started in 2014, it has destroyed or seized more than 400 pieces of heavy machinery, including 142 in the first nine months of 2017. But the illegal mining operations are never gone for long.
In February, the unit spent weeks attacking sites along the Atrato River in northern Colombia, destroying more than 47 backhoes and other machinery and seizing cash and gold worth more than $18 million.
Less than two months later, diggers and dredges were back on the banks of the river.
“Yes, it’s frustrating,” Peláez said of the cat-and-mouse game. “But we just have to keep doing our job — not give up.”
Jim Wyss: @jimwyss