All Aboard the Latin American Drug War Gravy Train

Waging the war on drugs in Latin America is a gold mine for contractors, a waste for taxpayers

Private companies received nearly $2 billion in Latin American drug war contracts between 2005 and 2009, according to a report released Thursday by Sen. Claire McCaskill (D-Mo.). That money may as well have been stuffed in garbage bags and dropped randomly from the backs of airplanes.

The two major agencies tasked with overseeing the drug war in Latin America—the State Department and the Department of Defense—lack “a centralized database or system with the capacity to track counternarcotics contracts," McCaskill found. As a result, both agencies struggled to explain contracts worth millions of dollars that were awarded to unknown recipients to complete ambiguous and often sketchy projects.

“In one instance,” reads McCaskill’s report, “the State Department awarded a $2.1 million no-bid contract to ‘miscellaneous foreign contractors’ to purchase pickup trucks in Bolivia. According to the Department, the lack of competition was justified because the source was unique. The Department did not provide information to explain why the particular source was uniquelyqualified to provide pickup trucks.”

All told, the State Department’s Bureau of International Narcotics and Law Enforcement Affairs (INL) awarded more than $50 million in contracts to “miscellaneous foreign contractors,” and another $6.8 million for “miscellaneous commodities, supplies, and/or services” between 2005 and 2009. The INL’s bean counters have no idea who these companies are, or what they were tasked with doing, only that, in most cases, they got paid.

When pressed for more accurate data by the Senate, INL attempted to match receipts from diplomatic posts with its “Global and Regional Financial Management Systems.” After several months, INL concluded that “the volume of procurement actions overwhelms staff capacity in some instances” because many of the “acquisition steps are manual processes that are both time-consuming and error prone.”

The State Department’s investigation into INL’s contractor accounting began in May 2010. A year later, “INL still could not adequately account for counter-narcotics contract spending.”

Not every dollar, however, went to anonymous contractors and ambiguous projects. A little more than 50 percent of what the U.S. spent between 2005 and 2009, or $1.6 billion, went toward “aircraft-related services, maintenance, logistics, support, equipment, and training.” The Army spent $75,000 on paintball supplies and $5,000 on “rubber ducks,” which is code for fake M-16s. And a provision in the Small Business Administration’s program for “disadvantaged” businesses allowed three Alaska Native corporations—Olgoonik, Alutiiq, and Chugach McKinley, Inc.—to receive more than $50 million worth of “sole-source contracts of unlimited value without justification or approval” to provide meal service, “engineering and software support activity,” and security guards in Bolivia and Colombia.

On the Department of Defense side, McCaskill’s report found “instances where contract personnel were allowed to depart the contract without recovering all issued property, loss of laptop computers, and other valuable items such as GPS’s.” The chief (but not sole) offender in this category was the company DynCorp, which demonstrated “inadequate accounting of government property.”

Whether or not these contracts should cost less or be better accounted for is one question. An even bigger question is whether these contracts are necessary even in the context of the drug war. In 2007, the Army awarded a contract to a company in Bogota for tractor trailers. Upon learning that it had received the contract, Talleres Los Pitufo sent a letter to the Army demanding 50 percent of its payment up front. The Army’s in-country office never responded to the letter, and it took them an entire year to figure out that Talleres Los Pitufo, in turn, never delivered the tractor trailers.

McCaskill’s findings led her to declare that U.S. "efforts to rein in the narcotics trade in Latin America, especially as it relates to the government's use of contractors, have largely failed." That's a strikingly realistic and honest rebuttal to President Barack Obama’s claim that the U.S. and its Latin American partners are winning the war on drugs. A White House spokesperson, for instance, cited increased border seizures of drugs and firearms as proof positive that we're winning. The same official declined to mention increased violence, torture, kidnappings, sexual assaults, and open skirmishes between cartels, other cartels, and police.

There's also arguably a streak of pure utility in McCaskill’s stance. Her willingness to challenge U.S. counter-narcotic efforts solely on the grounds of contractor malfeasance when contractors in Iraq and Afghanistan have been accused of everything from murdering civilians to turning a blind eye to human trafficking suggests there’s a decreasing appetite on Capitol Hill for drug-war adventuring.

So while there’s a strong moral argument for drawing down our interdiction efforts in Latin America, there’s an even simpler argument by Washington standards: "We are wasting tax dollars,” McCaskill said Thursday, “and throwing money at a problem without even knowing what we are getting in return."

Mike Riggs is an associate editor at Reason magazine.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • T||

    I realize this makes me a bad person on some level, but every time I read about these millions of federal dollars just floating around with no oversight or accountability, I only have one thought: how do I get in on this scam?

  • ||

    Become someone who can stand wading into the filth of dealing with scumbag government agencies and workers, lose all your personal integrity, and suck up to politicians. See how easy it is?

  • Ska||

    Yeah, so what's the next step?

  • ||

    Step 1: become parasitical scumbag
    Step 2: ???
    Step 3: PROFIT

  • ||

    Actually, I know Step 2. Run for or cozy up to those holding political office.

  • ||

    Yeah, I know. Me too. I think, dude, I just need 600,000. I'll go to Costa Rica and y'all would never have to bother with me again.

  • ||

    they do have pretty good socialized medicine (is that an oxymoron?)

    i took advantage of it for 2nd degree burns

  • Joe M||

    If this massive, systemic fraud saves the life of just one baby, it was all worth it!

  • Alice Cooper||

    Oh it will, a Billion Dollar Baby, baby.

  • ||

    McCaskill’s findings led her to declare that U.S. "efforts to rein in the narcotics trade in Latin America, especially as it relates to the government's use of contractors, have largely failed."

    She continued: "That's why we need to keep doing the same thing, only RETARDER!"

  • We all know....||

    ...that a million dollars is not what it used to be.

  • We all know....||

    ...yesterday's million dollars is today's billion.

  • Paul||

    "It's become increasingly clear that our efforts to rein in the narcotics trade in Latin America, especially as it relates to the government's use of contractors, have largely failed."

    I haven't RTFA yet, but my fear about this statement is that this Senate Democrat is not so much against the War on Drugs, but that someone, somewhere might be making a dollar off it.

  • Paul||

    Or what Sage said...

  • ||

    Yeah. Failed? Keeping the money flowing, people employed, the game going, ect, is not necessarily a failure.

    The only failure is the understanding that their idea of drug war victory was a pipe dream from the beginning.

  • omg||

    That guard looks like an extra from Starship Troopers.

    YOU KNOW WHAT TO DO RICO!

  • Obama Administration||

    These programs need to be continued and expanded...."national security" demands that we don't look to closely at all of this....you know.

  • Tim||

    We need bigger and better weapons. Satellites, spies, mercs.
    If you don't believe this then the drugs have already won.

  • ||

    That is a pretty big pile of weed. That would last me at least a couple of weeks.

  • Tman||

    I immediately thought the same thing. I want to jump on top of it and roll around in it and try to get a skin-contact high.

    Shut up, I know that's impossible, but still, that's a pretty big pile o weed.

  • ||

    That shipment is intended for here http://reason.com/blog/2011/06.....-featuring

  • Wind Rider||

    They're gonna need a bigger boat.

  • ||

    ...and, you know, everything is better with a bag of weed.

    http://www.noob.us/humor/famil.....g-of-weed/

  • sarcasmic||

    Waging the war on drugs in Latin America is a gold mine for contractors, a waste for taxpayers

    ftfy

  • ||

    Is that. . .is that a Nazi?

  • NotSure||

    The solution is simple, everyone should stop being a taxpayer and start becoming a government contractor. Prosperity for all !

  • ||

    I heard a drug warrior on MSNBC say that the production of cocain was down 70% in Columbia due to the WOR.I'm sure that's a lie.Another said every shipment they stop cut's into the cartels profit.Don't they understand the loss of some shipments(maybe many) are considered part of the game.

  • Tony Montana||

    what losses cocka-roasch?

  • Joe M||

    It may be true, but the problem is all the lost production just moved to a neighboring country. That's the detail they conveniently left out.

  • ||

    whack a mole

  • Wind Rider||

    With multiple moles, none of which may present for whacking. . .

  • ||

    They probably call it shrinkage just like a legit business.

  • Wind Rider||

    Production probably isn't down, although that's possible due to lags in demand due to economic conditions here at home - or it's just as likely that this particular blind pig ain't been finding too many goddamned acorns lately, cause those fucking squirrels are pretty clever at finding new ways to hide them.

  • ||

    I know Peru makes a lot.I've also so read that the people producing it are not resorting to all the violence that the cartels that came before.Their not trying to run the country and are staying hidden.Plus FARC is in the mix and no one knows how much they produce.Still,pot is the # one cash crop for the cartels and legalizing it would be a nightmare for them with no harm to the public

  • ||

    We're losing a lot more to the war on drugs than tax dollars, but I'll take what I can get. It's not often we hear this on Capitol Hill and creeping into the MSM.

    Call McCaskill's office and tell her to keep hammering away at this.
    http://mccaskill.senate.gov/?p=office_locations
    202-224-6154

    [Don't bother with the contact form submission, you'll get a form response.]

  • Wind Rider||

    The 'Drug War' has been the background excuse for flushing money down tropical Central and South American jungles for over 20 years. Billions have been expended, resulting in a mere distraction from the cartels. Cartels that have been a not always silent partner in fomenting a whole lot of domestic violence. Violence that is only coming to our attention because self absorbed American media noticed a noisy ruckus coming from our friendly Mexican next door neighbors. A ruckus which, compared with what's been going on in Colombia for decades, in actuality is a real life version of 'Survivor' playing out, writ large, by brutally amateurish, but vicious newcomers to the game. With both situations fueled by the other drug war generated revenue stream.

    None of the examples mentioned (finally - it practically took having a rotten carp smacked on her forehead to notice it after all this time) by Claire the "I think we need TSA on Amtrak too" Ditz is just the low hanging and really egregious fruit. A any close look at the entire process would fill the average person with absolute bewilderment and disgust at the sheer and cavalierly wasted resources for. . .well, most of the time, the original intent of some of this stuff just disappears from the faulty corporate 'memory'. The financial systems used are antiquated, cumbersome, and opaque to all except those with direct insider knowledge of what the bureaucratic euphemisms grandly and officially put forward really translate to. And some of it comes pretty close to 'Charlie don't surf' kinds of idiocy.

    It's long past time to shut the entire tragedy generating cat and mouse play acting "very very serious and important!" bullshit charade down. Central and South America would miraculously and rapidly become much calmer and stable places. And the 'Mexican violence' problem should evaporate rather quickly, as well.

    And a hell of a lot fucking cheaper, in both the short and long term, to achieve the likely good outcomes, than to just throwing money into a tornado, and tell everyone how dedicated you are and how hard you're working, and things will get better if you just do it more.

  • LarryA||

    Billions have been expended, resulting in a mere distraction from the cartels.

    I largely agree, except that I have a feeling that a bunch of the more useful missing equipment ended up with the cartels. It’s obvious that a lot of their armament was originally U.S. issue.

  • LarryA||

    And it looks like this is where the trucks went.

  • Wind Rider||

    Oh, and another really creepy, but not unsurprising aspect of the whole goat rope. Only State and DoD are identified for celebrity recognition - but actually the alphabet soup of sub cabinet level groups that have carved out their own niche of responsibility, even if it is exactly the same as that other group, both or which consider each other incompetent buffoons, used to actively withold information from each other on a regular basis - particularly if they scooped their federal brethren about a primo chance to swoop in at the last minute and make the erection inducing drug warrior dream bust - one that nabs the greenbacks. Which the seizing agency gets to keep. And use as it wishes. Without a whole lot of (read virtually none) oversight and accountability.

    Regular H&R visitors could best equate this setup as a group of hyper seizure happy Indiana DA's and County thieves with guns Sherrifs with zippo warrant requirements, and even less accountability.

  • casque dr dre||

    i know!

  • Anthony Weiner||

    Fuck the drug war

  • Pandora UK||

    And use as it wishes. Without a whole lot of (read virtually none) oversight and accountability.

  • np||

    To be fair to the following countries, simply referring to "Latin America" is a bit inaccurate here. A geographically large portion of Latin America does not suffer from this issue:
    Argentina, Brazil, Uruguay (which never has criminalized drug usage in the first place)

  • Juice||

    It's funny that a practice that was scandalous in the 1920s is routine these days. If Tea Pot Dome happened today, no one would even bat an eyelash.

  • nike air force 1||

    is good

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