JCC: Medellin Cartel VIMUNC VI. March 1-2, 2019

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1 JCC: Medellin Cartel VIMUNC VI March 1-2, 2019

2 Nick Hodge Secretary-General Lauren Fahlberg Director-General Oksana Vickers Chief of Staff Kavye Vij USG of Crisis Alex Marjanovic USG of General Assemblies and Specialized Agencies Letter from the Director General Esteemed Delegates and Sponsors of VIMUNC VI, This year s VIMUNC will be a truly diverse set of interesting and dynamic committees that stretch the boundaries of the imagination. From the important international issues to local crime and gang institutions, VIMUNC truly has it all. This year, we are committed to enhancing the delegate experience, and ensuring a positive community of chairs and staffers are attending to every need and issue. For both delegates and sponsors alike, we are going to create an experience that imitates the real United Nations, one of diplomacy and innovation. VIMUNC has a wide selection of twelve diverse high school committees, and five in-depth middle school committees. There is a committee and topic for every single delegate s interests, and we sincerely hope that this has a positive impact on the conference experience. As we continue to try and improve our service year after year, any feedback or questions can be directed to vimunc@gmail.com. Every issue, no matter how minute, is of concern to us, and we truly hope that we can help improve the delegate experience in any way. From all of us on the VIMUNC VI Secretariat, and from all of us at Langley Model UN, thank you for your commitment to VIMUNC. Sincerely, Lauren Fahlberg Director-General, VIMUNC VI

3 Topic 1: Political Presence of the Medellin Cartel The Medellin Cartel operations closely resemble those of modern monopolies, which tend to raise prices, at times price differentiating, and maximizing profit. However, instead of controlling the supply and price of drugs, the cartel, as it called itself, pumped substantial amounts of their product, namely, cocaine, into the supply, allowing for the market itself to set the price. The brilliance of this which seems obvious after the fact is that creating a surplus of cocaine in the market, a hyper-profitable market that relies on addiction, ensures that the the demand will always remain high, without government intervention of course. At its height, the Cartel supplied up to 80% of the global cocaine market, earning an estimated $420 million in revenue each week. However, the drug market in Colombia was not always this active; in fact, in the 1960s, when the war on drugs was initiated by the Nixon administration, Colombia was not even a major player in the market: it was controlled by the ABCs of Latin America, Argentina, Brazil, and Chile. However, as US demand for cocaine grew throughout the 1970s, alongside average consumption, and war-on-drugs policies were only raising drug prices instead of affecting demand, Colombia stepped into the arena. Given its centrality in the already large Cocaine market, the location was extremely conducive towards a successful business which itself grew from the ground up. Prior to the formation of the cartel, Pablo Escobar himself was a street thief in Medellin and the Jorge Luis Ochoa, Juan David Ochoa, and Fabio Ochoa, were ranchers, a profitable business in its own right. After meeting Carlos Lehder, who introduced them to cocaine exportation, the group initiated only small operations, flying cocaine to the US on a moderate scale in Afterwards, in 1978, Carlos Lehder, already a wealth figure, bought parts of territory in the Bahamas called Norman s Cay which was used as a primary station for transport planes to refuel, a testament to the scale of production which developed so quickly in the Cartel. To operate as a business though, it needed to add legitimacy to its name. The Cartel operated under the guise of a coalition comprised of various parties called MAS (Muerte a Secuestradores), created to protect the economic interests of the cartel, the colombian legislature, Texas Petroleum, and other smaller partners. Afterwards, the Asociación Campesina de Ganaderos y Agricultores del Magdalena Medio (ACDEGAM) was created to

4 handle the public relations of the organization, and served as the legal nuance that safeguarded the illicit operations undertaken by the group. ACDEGAM built health and transportation infrastructure, schools, and garnered enormous support from poorer community members. In the late 1980s, the group switched focus, emphasizing the military aspect of the organization. The Cartel was able to operate because of three important factors: loyalty, violence, and bribery. Cartel members were undyingly loyal to Pablo Escobar, who provided them with money and oftentimes shelter. Moreover, his close ties with the poorer Colombian population resulted and a fanatic reverence for Escobar from the masses. Lastly, the alignment of government and cartel interests resulted oftentimes in loyalty from government members. Violence, however, may be the more notorious aspect of the Cartel s control. Given their military capabilities, purchased from the Colombian military, and training from British and Israeli mercenaries, the cartel had immense influence over politicians and other businesses. In the WSJ s Cocainenomics the author describes the violence used by the cartel as the perfect substitute for the merging/acquisition process found in legitimate businesses. It is estimated that over 3,500 persons were killed by the cartel, including 500 police officers. Alongside, bribery violence was the Cartel s primary incentive. Regarding bribery, the famous Plata o plomo, literally money or bullets, comes into play. Officials who refused bribes understood the risks they were taking. This chain of loyalty, violence, and bribery created a sound business structure with avenues of protection on all sides, and the protected nature of the Cartel will allow delegates to create layers upon layers of political protection and ultimately control of the Colombian political system. Some key players to keep in mind are of course, the politicians from each branch, police units, revolutionary forces such as FARC, the DEA, and many other possibilities. It s all up to you, the delegates, to approach this topic with an open mind, but most importantly, one already brewing with ideas (moral or immoral).

5 Topic 2: Expanding Trafficking Empire Expanding the trafficking empire, in the end, is the job of the vast majority of delegates in the committee. However, with hardline policies by multiple countries, particularly Colombia, of course, and the United States, the survival of the cartel depends on adept, creative, and intuitive methods of transfer and expansion. The survival of the Cartel in actuality, and its shipment methods, were largely due to Gaviria Rivero. Starting from Colombia, where the drug was either produced or imported from Bolivia or Peru, the drug would be transported to distribution points all around the United States, particularly New York and California. One particularly fascinating method for transport was mixing the cocaine with traditional beverages from the production countries/growing areas, and having chemists remove the drug upon arrival to Norman s Cay or the end destination. The Cartel would receive shipments from Peru, Guatemala, Brazil, Ecuador, etc. and refine it for $1,000 dollars or so, and later sell it in the US (and parts of Europe) for over 70,000$, a huge profit margin. Further, in the 1980s, the Medellin Cartel paid off the Panamanian government so as to transport the cocaine safely through Panama, an ingenious and secretive strategy. Also, with the abundance of revenue, Escobar purchased favorable territory and private airports, or constructed them himself to facilitate distribution, creating a trafficking web that was nearly invisible (not so invincible though, as he d find out in 1993). Now, acknowledging and disregarding the brutality of the cartel, the Escobar s business model teaches multiple things that delegates should take into account. First off, the preservation of brand image, particularly Escobar s own reputation. As mentioned before, persons in Medellin deified him, promising their loyalty and even becoming assassins for him. Second, the emphasis on the quality of the product. As mentioned before, the Cartel did not need to lower prices to sell more, for he was the supplier of the highest quality cocaine. Essentially, his cocaine acted as a normal good (normal in this sense means that if average population income rises, the demand for that good will rise), versus other inferior goods. Another point is his relationship with competitive cartels. In the previously mentioned MAC, the Cali Cartel, the Medellin Cartel s rival, divided the distribution points in the United States with Pablo Escobar. Also, Gilberto Rodríguez Orejuela, the leader of the Cali Cartel, was a childhood friend of Jorge Ochoa, and through their co-ownership of the First InterAmericas Bank, were able to launder money for both cartels (of course, they were far from allies, but Escobar understood the importance of cooperation when necessary). Finally, Escobar s stroke of luck that transformed his

6 business was the identification of new, more lucrative markets. In Colombia, Escobar reportedly sold a gram of cocaine for $10, whereas in Miami, a gram sold for $300. Realizing that different populations are willing to pay more/less is essential in expanding the trafficking empire. With all that said, there is no question that violence was a powerful tool for the Medellin Cartel, and delegates will very likely have to wield it.

7 Works Cited: Macias, Amanda. Legendary Drug Lord Pablo Escobar Lost $2.1 Billion in Cash Each Year - and It Didn't Matter. Business Insider, Business Insider, 24 Sept. 2016, Nmims. 7 Business Lessons from Pablo Escobar, the Man behind the Greatest Drug Empire. Medium.com, Medium, 26 Aug. 2016, medium.com/@njmnmims/7-business-lessons-from-pablo-escobar-the-man-behind-the-greatest-drugempire-c3182beb8294. PBS, Public Broadcasting Service, Sponsor Content: Cocainenomics. The Wall Street Journal, Dow Jones & Company,