El Chapo: Cocaine kingpin

24:12And federal agents have called these tunnels super tunnels because they have everything. They have electric lights, they have ventilation. Some of them even had elevators. So when the cocaine gets across the border and into the warehouse in Arizona, it then gets loaded into cars and trucks and driven out to Phoenix and whatever, where it was cut up and distributed across the USA. So they've kind of taken the border out of the equation here. They don't need to worry about it. And in fact, estimates say that between 88 and 91, El Chapo smuggles 35 tonnes of cocaine into Arizona alone. But it wasn't just the tunnel.

24:43That wasn't the only means of transport. On the Mexican side, the Sinaloa cartel built their own airstrip about 100 miles south of the border. And that's where the Colombians would fly in with their planes filled with cocaine. And meanwhile, he's trying to give himself a bit of room to manoeuvre, right? So he's cultivating these relationships with corrupt Mexican security officials. is he's paying them off to make sure they turn a blind eye to all the smuggling. And this is where the profit margins in drugs comes into play, because between where it's produced and where it's, you know, there's a lot of margin in there.

25:16And you need that for the dealers and the payoffs and the security and the weapons. So it's a good job there are such big profit margins, because everyone wants to take a slice, including corrupt officials and police. And don't forget the tunnels. But because of them, he could move drugs into the US in bigger quantities, faster and cheaper. And then in 1990, he meets a 27-year-old Colombian, a drug trafficker known as Chupita or Lollipop, and he makes an even better deal to import all this cocaine. Yeah, because Mexican smugglers had been charging, where this is written down, I don't know, but had been charging 37 % for moving Colombian cocaine.

25:53But El Chapo wants 40%, but he says he can move it faster and safer. So 3 % difference. It's quite a lot if you're talking in, you know, the millions. I suppose it is. I mean, it's a bit like anything. If you can do it in bulk, you get a slightly better deal. And El Chapo earned those margins, right? So he demonstrated he could move 4 ,000 kilos in a week while other traffickers took a month. So he got a new nickname, El Rapido. El Rapido, El Rapido. And actually, when Lollipop spoke as a witness at El Chapo's trial in 2018, he revealed astonishing profits. He claimed that between 1990 and 1996, El Chapo made as much as$640 million just from his cocaine, lollipops cocaine.

26:35And that's only part of the business empire, right? So El Chapo is well on his way to becoming a billionaire. And by 1990, as well as the tunnel, which he became famous for, the cartel also was using things like ships, fishing vessels, speedboats, even submarines. This is a lot of drugs. I mean, according to one former federal prosecutor, El Chapo was the go-to guy. when the US started shutting down ports of entry in the Atlantic and the Pacific, drugs had to go through Mexico. And if it went through Mexico, it had to go through El Chapo. Yeah, and by this point, the boss of bosses, Mr Gallardo, has been arrested.

27:10So El Chapo is now fully in control. And he makes himself an even better deal. So rather than being paid by the Colombians to smuggle the drugs, he buys their cocaine and sells it on in the US himself and keeps a much bigger slice of the profits. So he's not just a delivery guy now. He's an actual trader of it. He's buying and selling himself. It's kind of slightly reminiscent of, you know, Amazon creating its own products based on the products that are selling well on Amazon. Yes, that's true. And like I say, so talking about the margins again, rough numbers, we think. A kilo of cocaine, which was selling for$3 ,000, about£2 ,500 in Colombia, would be worth$10 ,000 in Mexico and then$30 ,000 in the US.

27:56And once you cut it up and sell it by the gram, it could make over£100 ,000. So you're talking a markup of£3 ,000 to£100 ,000 per kilo, which is a huge profit margin. And that means a lot of money is coming in. So he's got to find ways to launder that money. And we should just sort of probably take a moment to discuss what we mean by money laundering. Because, you know, if you take sackfuls of money into the local bank and start depositing it, people's eyebrows get raised pretty quickly. And so much of this reminds me of Breaking Bad as well, doesn't it? You'll remember that Walter White in Breaking Bad buys a car wash, which you have to pay in cash.

28:33So all these people are paying cash. There's cash going over the till. and then you just filter that cash bit by bit into the legal proceeds and you deposit that money in the local bank and it seems much more legitimate. So that's one way of money laundering. So El Chapo was using this method called structuring, which means depositing amounts smaller than£10 ,000 to avoid the bank tellers having to report it to the authorities. Anyway, the money's rolling in and he starts to enjoy spending it. So his former pilot, who testified during his trial, said that when he first met Mr Guzman in 1986, he didn't have a jet.

29:09In the 90s, he already had four jets. He had houses on every beach, he had a ranch in every state. And he bought loyalty. His henchmen were given gifts like diamond studded Rolexes, expensive cars. He paid close associates like Martinez, who testified against him, a million dollars in cash every December. Can you imagine a million dollars in cash? This reminds me a little bit of the scenes in Scarface when he starts spending all his money. And in fact, there's a scene in Scarface where you see Al Pacino with a little zoo. Yeah, I mean, this is his house in Acapulco, which he built for$10 million.

29:45He had a zoo with a little train riding around that you could see the lions and tigers and panthers. I mean, it's wild. And funnily enough, it's quite interesting to know how he's treated by his own people. And he sort of has a bit of a reputation as a Robin Hood figure. So taking from the rich, the arrogant gringos and giving a living to the hardworking Latino poor, which is an interesting way of looking at it. It's also a good way to buy yourself a bit of protection and breathing room, right? Because no one wants to dob in the guy who's seen as Robin Hood. Yeah. But I mean, you know, we have a category for philanthropy.

30:20And I'm not sure whether that counts as philanthropy, because journalists who've looked into this have struggled to identify anything like a school or a hospital or anything like that funded by him. So it seems more like he was big into the business of marketing himself as much as anything else. So he's making tons of money and whenever money is being made, there is competition to be had. And at this point, the war between the cartels begins to get really bloody. So after Gallardo, the boss of bosses, is arrested in 89, this turf war breaks out between the Sinaloa cartel and their rivals, the Tijuana cartel.

30:55The Tijuana cartel actually behead the wife of El Chapo's partner, Hector Palmer, and send him her head in a box. Yeah, oh, it's pretty grim stuff. And they do not stop there. So weeks later, they actually murder Hector Palmer's children, a five-year-old son, four-year-old daughter. Well, the Sinaloa cartel hits back. The tit-for-tat violence over the next four years sees a series of assassinations, car bombings. At one point, El Chapo's men indiscriminately opened fire in a discotheque. And the thing about this tit-for-tat war is that, unfortunately, it doesn't end until the big boss is killed.

31:32But when this turf war broke out, none of the big bosses ever got killed. But they did make a serious error while attempting to assassinate El Chapo. And it's this error in 1993 that completely changes the game for them. Yeah, one of the most senior priests in the Mexican Catholic Church, a cardinal, is shot dead in the airport. And it's thought that the assassins thought the cardinal who was getting into this fancy car was, in fact, El Chapo. And obviously, the fallout from this murder is huge. There's a huge political uproar because the Mexican government is finally forced to crack down on the drug gangs in a big way to demonstrate to the public they're doing something about this.

32:09And so they put a big bounty on his head. His face is in the newspapers. It's on TV screens. he's becoming famous now around the world. And he's no longer anonymous, so he flees Mexico, but within weeks is arrested in Guatemala and extradited back to Mexico. And there he is sentenced to 20 years on charges of conspiracy, drug trafficking and bribery. I think it's so interesting this, it says something about Mexico and the role of the Catholic Church in Mexico, that all this was going on. You kill a cardinal, that's not OK. Yeah, kill a cardinal, we're coming after you. But I actually think El Chappell kind of viewed the stint behind bars as a sort of sabbatical from work.

32:45Yeah, because as we know, with his tunnelling expertise, he's a master. He could probably have got out of here at any time he wanted. But because the heat is on at the moment and he's in the public eye, this is quite a good place to lay low for a bit. Yeah, and Martinez and Hector Palmer still keep running things on the outside. You know, he's got money to bribe the guards, so he's got regular visits from sex workies. He's even got deliveries of Viagra coming in. And so if you're a notorious criminal, you can actually live a pretty good life inside. But while he is inside the US authorities, and that's the one he fears the most, they're starting to put together a case against him.

33:21And in 1995, he's indicted in San Diego for money laundering and conspiracy to import cocaine. So that same year, El Chapo is transferred to a maximum security prison in Mexico, where he still enjoys, you know, privileges. You know, he pays a cook$1 ,500 a month to prepare lobster for him. You know, he's paying money to everyone to turn a blind eye. But 2000 brings a very different kind of turning point. Yeah, because Mexico elects Vicente Fox for the first time. I remember this happening actually in 2000 because a lot of people said it was amazing because it was the first time in 70 years that a party that wasn't the pre, the Institutional Revolutionary Party, who had been in power for 70 years up to that point, there was actually a calm transfer of power, which no one was expecting actually.

34:08And Fox has cast himself as this anti-corruption reformer. So El Chapo starts getting a bit nervous, right? Maybe this guy's going to extradite him to the US and that would be the worst thing possible for him. So at this point, he decides escape is the right option. So in January 2001, he hides in the laundry cart, but people say he could have walked out the door because he was helped by so many corrupt officials, some of whom are eventually imprisoned for their role in this escape. And he becomes Mexico's most wanted man. But, you know, you can use this term loosely because by all accounts, he was able to just kind of walk around at well.

34:41Apparently, he visited his mum back in Latuna. Well, I think that people are so terrified of him. Who's going to go and turn him in? I mean, you know, I mean, I hope he's not listening right now because, you know, I don't fancy being tortured and killed myself. I mean, he even feels free enough to marry an 18 year old beauty queen in a lavish ceremony. And he just walks into things like restaurants with a posse of bodyguards. He then takes everyone's mobile phone off them. I'd hand mine over it in a heartbeat. So he could sit down, eat his favourite meal without being tipped off to the authorities.

35:12And then on leaving, he gives everyone their phone back and pays for everyone's meal. I still don't think I would have had the most relaxing evening meal there, would you? No, I think I would have excused myself to the bathroom and climbed out of the window. Yes. So he's out and he's back in control of the Mexican drug strain. And he's even expanding into other drugs too. So in the noughties, crystal meth usage explodes in America and his two sons, Ovidio and Joaquin Jr., begin smuggling chemicals from Argentina to experiment with producing meth. And Ovidio will later again help his father keep up with the times, changing tastes of the drug public.

35:47He starts manufacturing cheap versions of fentanyl for the cartel to flood the American market. And again, the markup is wild. So$800 of chemicals can be turned into fentanyl pills or powder, and it could sell for as much as$640 ,000 on the market. That's an astonishing markup. And I think it's kind of a moment to reflect on the fact that, you know, we've said before, you don't get rich without giving people what they need, want or enjoy. I'm not sure which category fentanyl and cocaine falls into, but the point is there's enormous demand for this. The US public is fuelling this trade, and it's thought that between 2006 to 2016, the money spent by Americans on cannabis, cocaine, heroin and crystal meth was around$120 to$140 billion a year.

36:38To compare that, the US spend on alcohol in 2017 was 158 billion. So this is a massive market. Right. It's a huge industry. And, you know, no tax, no government's getting any money off it. It's all underground. So there's no regulation. And El Chappell becomes the biggest player in essentially the biggest black market sector going. But the violence continues and is getting more intense. And actually, the president Vicente Fonks, his new regime has not stemmed the bloodshed. And so we have a new president in Mexico. He launches Mexico's own war on drugs, sends six and a half thousand troops into his own home state.

37:17And the cost of the drug war to Mexico is huge. So the government is blowing$54 billion on security and defense. And it's done so since 2007. And critics say this influx of cash has created corruption on every level. And it's statistics like this that kind of inform the debate about legalisation. Sometimes people saying if you did legalise it, you could tax it, you could regulate it. The cost has also been a human one, right? So since 2007, around 200 ,000 people have been murdered in Mexico. And, you know, El Chapo is not immune to this tragedy either. So he fell out with the Beltran Labour brothers who thought that he was betraying them.

37:55So they came after his son, Edgar. Yeah, he was gunned down outside a shopping mall a month after being released from prison himself. But despite all the deaths, despite all the bloodshed, the money is still rolling in. So by 2009, it's thought that Mexico makes more money moving drugs than exporting oil, which is its biggest legitimate foreign currency earner. And this is recognised by the folks at Forbes who compile the rich list. And they put El Chapo onto his list controversially for the first time that year. They estimate his wealth in 2009 to be$1 billion. That put him at number 701 on their list of the world's richest people.

38:36And according to the DEA, he becomes the leading drug trafficker of all time. He's said to have imported more drugs into America than anyone else. And so it's official. In 2009, El Chapo is a billionaire. And I understand there were baseball hats with like 701 written on it to celebrate the fact that he came in at 701 on the Forbes Rich List. So he's a celebrity. In many ways, he's a kind of gruesome celebrity. He is. And, you know, he's gotten rich by cutting a trail of murder and devastation and, you know, probably addiction. Yeah.

39:19His biggest fear is the US. Those are the authorities he fears the most. And in 2011, after Osama bin Laden died, he becomes the USA's most wanted person. Right. Five million dollars for valuable information leading to his capture. That's a lot of money on the table. And when he is eventually tried in the US, El Chapo claims he paid a 100 million dollar bribe to the new president, President Nieto, when he took office during this period. allegations that Mr Nieto strenuously denies. Still, it's going to take another three years until El Chapo is recaptured. And in 2014, he's arrested in Sinaloa by the Mexican Navy in collaboration with the DEA.

39:59And he's returned back to his old home into the Altiplano Penitentiary and put into solitary confinement while the US continues to build its case and pushes for extradition. So he hatches, and this is the part that is the truly crazy bit about his story, He hatches his most audacious plan for escape. In 2015, I'm just like setting it up in my head here. He walks over to his little cell. He kind of like moves behind this little partition wall that separates the security camera from the shower bit. And then he just disappears. Yeah, he doesn't appear for 25 minutes. Guards go to check on him. They discover he's escaped through, guess what?

40:38It's a tunnel. Yes. The entrance of the tunnel is a one and a half foot gap in the shower floor and beneath that there's a 32 foot ladder into a tunnel which is a mile long. It's only just a little bit taller than El Chapo himself but you know it's got lights, it's got a ventilation system, it's even got a motorbike on a little rail to quickly transport him so you can just sit on the motorbike and zoom off. How do you build a one mile tunnel and a 32 foot hole right down without everyone in the prison knowing about it? So apparently the prisoners in the jail had complained about all this racket of the tunnel being built to prison officials, but they were all being paid off to look the other way.

41:21I can just imagine the guards going, what, I can't hear anything, what, what, what? Something's wrong with your hearing, mate. It strains credulity at this point, which is in a way, I think, why we're so fascinated by these stories. And of course, this Robin Hood image, it's a bit like getting away from the Sheriff of Nottingham again. It enhances that whole image he's got. That story of the prison escape alone, I think that was what made him world famous. Yeah. And he sometimes calls a sort of narco saint, sort of a folk hero rather than the sort of brutal criminal that we know he is. And we'll have to say, you know, his criminal enterprises did provide money for a lot of the people in these remote areas.

41:58You know, they make a living producing poppies and marijuana for his cartel. And bizarrely, in an interview that he conducted with Sean Penn for some reason while he was on the lam after this motorcycle escape, that's what his defence was for getting into the drug trade. There's no other job to do when you're born into a position like I was in the middle of nowhere with no money. This is what I had to do to stay alive. Yeah. And that interview in Rolling Stone was very controversial. I saw Marco Rubio was in the presidential race. He said, you might think this kind of thing sells magazines, whatever.

42:29I find it grotesque, the fact that they did this interview. And also, if you can still watch it on Rolling Stone, it's a very odd interview. I highly recommend looking it up. So he's on the run. He's possibly the most famous fugitive anywhere in the world. He's appearing in Rolling Stone magazine. But in January 2016, the Mexican Marines, with help from the US Marshals Service and the DEA, they recapture him in a violent standoff during a raid at a roadside motel back in Sinaloa, back in his hometown, which left five people dead. And a year later, Mexico finally extradites El Chapo to the US and he faces 11 counts of drug trafficking and is locked up in a high security prison in New York, presumably away from the nearest tunnel.

43:11Yeah, and as they were picking a jury to try him, some jurors were excused because they were, I think, quite understandably afraid. I mean, you know, would you want to be in that jury? Oh, absolutely not. I was like, I'm burning every single piece of correspondence that has ever asked me to be on this jury. Yeah, well, the lawyers start making their opening statements in November 2018. The trial gets underway. And when people start to testify, this is when people really start to see the measure of this man, because the stuff that people have to say about El Chapo is just grim. Yeah, his bodyguard tells the court he personally witnessed El Chapo brutally beat and torture three members of a rival drug cartel before murdering them.

43:50Another witness said that El Chapo buried a man alive. Another said a rival drug lord who refused to shake El Chapo's hand paid with his life for that insult. And, you know, the court papers also accused him of drugging and raping girls who were as young as 13. Apparently he called them his vitamins. Gross. Anyway, he has found guilty of 10 counts of drug trafficking. At sentencing later that year, he's given life plus 30 years. And he's also ordered to pay back over$12 billion, which the prosecutors say he has earned from his criminal activity. So we've got a pretty precise number there. The prosecutors have told us exactly how much money they think he made.

44:29Yep. But it doesn't put an end to the drug war. So when he's convicted, that year is the most bloody yet in Mexico. It launches this latest phase of the so-called war on drugs. There were 33 ,341 killings, which was 33 % more than 2017. So he may be gone, he may be banged up, but the violence and the mayhem continues. I mean, in many ways, this is going to be one of the easiest things we've had to judge. Exactly. So, well, let's judge our chapel.

45:07We always start with wealth. This one is actually pretty hard to pin down. The US prosecutors reckon it was$12 billion, but like I say, it's not the kind of thing that you can look up in the annual report. But if you go by Forbes' list, right, 701 is not particularly high up in the list of billionaires. So in drug terms, he's a kingpin. In the world of billionaires, he's kind of small fry. On the other hand, he does wear his wealth very extravagantly. I mean, he's not sending off drug traffickers into space, but, you know, he did buy a zoo. Yeah, the thing about the zoo and having a ranch in every state and having four aeroplanes, I secretly suspect he's got more money than Forbes actually estimated, although things are a bit cheaper in Mexico.

45:48So, yeah, I mean, he wears it well. He wears it, I mean, when it comes to ostentatious displays of wealth, he's every bit the bling drug dealer. Oh, yeah. I actually read something somewhere that said that he had a pistol that was encrusted with diamonds in his initials. Yeah, I can well believe that. OK, for wealth, I'm going to give him a four. Well, I mean, the diamond pistol makes me think. Diamond pistol? OK. Six out of ten for me. OK, four for me, six for you. Rags to riches. I mean, it's quite a journey. And it's a well-trodden one in Mexico. coming from what I assume is a very poor underdeveloped village in a mountain range in the middle of nowhere in Mexico to you know federal prison and I mean it's it's a stuff of biopics really yeah it's a rather tragic kind of rags to riches story in a way isn't it it's not an aspirational one it's almost the opposite of that I'm sure at its high points he must have felt on top of the world yeah no one forced him to become the most wanted person in the world right But the point is that if you wanted to make money, there were very few routes available for you to do that in Mexico.

46:57I think I would give him, and this is not to condone the way he made his money, I would give him an 8 out of 10. OK. I'll give him an 8 as well. So he's got a great story, but what about the villainy aspect? This is where we have to compare notes with our previous billionaires, right? So we gave Victor Boot a 10 on Villainy. And we should have probably given him a 9 because we knew El Chapo was coming up. So, I mean, can we go for 11? Can we dial it up to 11, Spinal Tap Style? I think Spinal Tap Style. We'll have to give him an 11. For 11, I mean, there's so many shocking accounts of his violence.

47:39You know, a former weapons smuggler said he had a murder room in his mansion on the US border. The room had white tiles, was soundproof, so no noise could come out. A drain on the floor to clean up after slayings. In that house, no one comes out. And this is just gruesome. Yeah. You know, Victor Boots sold weapons to warlords and dictators that probably, I don't know, killed hundreds of thousands of people. But as far as we know, he never directly killed anyone. Right. So, yeah. I mean, this is 11. And probably worth making the point as well is that, you know, the people who made him rich ultimately are the people who took the drugs that he exported.

48:18So, you know, perhaps we should not be able to sort of wash our hands of his villainy in some ways. Oh, definitely. I think it says a lot that the illegal drugs market in America is almost as much as to market for legal, legitimate alcohol. I mean, you know, like you say, a lot of the people in our podcast got rich by giving people what they wanted. But having said that, the drugs that he was selling, especially fentanyl, caused a lot of damage. And it's still causing a lot of damage in the US. You know, fentanyl deaths are soaring. In 2019, it accounted for 51 % of overdose deaths. And then by 2021, it's 66%.

48:56Yeah. So in many ways, some of his customers are also his victims. Exactly. And don't forget, fentanyl is up to 50 times stronger than heroin. So it's addictive stuff. Yeah. So sorry, Victor, we're demoting you to a nine and El Chapo, you're getting an 11, spinal tap style. Yeah. Let's come to the category that might, well, I mean, El Chapo would probably like to think that this rehabilitates his image, but the philanthropy he did, what did he actually do? Well, we know that he would dish out money left, right and centre. He was a folk hero who seemed to give employment to people. He had this Robin Hood kind of image, but no one's actually been able to find any kind of school or hospital or anything with El Chapo's name on it.

49:38Yeah. And actually, the mayor of where El Chappell was born told journalists that he couldn't see a single building producing jobs, a single piece of public works, a soccer field, a sewer, a school, etc. Not a single one that you can say was built by drug traffickers or their money. So that's pretty damning. OK. So if philanthropy means the love of humans, wanton death and destruction is probably, you know, what he traded in. Yeah, I mean, he himself claims to have killed over 2 ,000 people. That's a lot of people to have killed. I would give him a zero. I would say that given how many people have died either violently through the trade or in overdoses or in pitch gun battles or what have you, I think there's a strong case that he comes in with a negative number for philanthropy.

50:26I don't know if I can do negatives on this. The scale is expanding. The scale is expanding. I'm going to give him minus 10. I mean, if our chap was listening, and I hope he isn't. Oh, God, don't say that. I'm going to give him minus. Oh, my God, I'm going to be looking over my shoulder on the way home from this. OK, now, power. Interesting one. If the difficulties in catching him and incarcerating him and keeping him there are anything to go by, he seemed to live almost above the law. He was able to buy off anyone he wanted. I mean, he operated a criminal organisation for decades that brought in tons of money.

51:08Whether or not it's true, the audaciousness in claiming you tried to bribe the Mexican president, that's a lot of power that you think you have. Yeah, I think within Mexico, he was very feared and fear is a form of power. So I think he's quite a powerful person. Yeah. At the height of his power, I would probably give him an 8 out of 10. OK, I'm going to agree. 8 out of 10 for power. So then we come to legacy. So assuming El Chapo never leaves prison, will live out the rest of his life and die behind bars, how are we going to regard his legacy? He's not the only famous drug dealer, is he? And you've had Pablo Escobar, there are other ones as well.

51:45And you do suspect that it's a trade by its very nature that once he's locked up, it continues. The trade goes on without him. He's notorious and he became famous because he came out of the shadows. but the trade won't miss him, that's what I'm saying. Yeah, someone else will always rise up to take his place like he did with Gallardo. Yeah, exactly. So there'll always be somebody else. I think one thing he has done, both him and Escobar have created a mythology around this which has been richly mined for TV and film and what have you. His legacy in a way is sustained through films and stereotypes of this kind of behaviour.

52:26Right. And even music, because in Mexico you have these songs called Narco Corridos, which are songs celebrating and talking about these drug traffickers. And, you know, Billboard magazine even has like a top 10 list of Narco Corridos written about El Chapo. So his legacy is one of death and fear, his notorious acts of escapology more than as much as anything else. His innovations to drug trafficking, maybe those things will be remembered. So for legacy, I'm going to give him a six. Yeah, I'm going to give him a six. I feel like he'll pass into pop culture mythology more because of his escapes.

53:02But when you hear about what he actually did, I mean, oh. Okay, so final judgment. Good. This is so easy. Good, bad, or just another billionaire. This is one bad hombre, isn't it? This is a very, very bad man. So I hope you're not listening, but I'm afraid El Chapo, we judge you as a bad billionaire. Do they get podcasts in prison? I really hope not. I hope to God they don't.

53:31Who's our next billionaire? We've got a big hitter, not just in media, but also on the world stage. It's Rupert Murdoch. Yeah, I really hope you've enjoyed this. It's been absolutely fascinating to make. We've covered everything from luxury to rap to drugs to the legal arms trade. There's something for everyone in this. I hope you enjoy it. And if you do, tell a friend. Thanks for listening to Good Bad Billionaire. This podcast is produced by Hannah Hufford and Mark Ward. James Cook is our editor and it's a BBC audio production.