Just Say Uncle

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La Nacion has also recounted the exploits of Pablo's brother William, who at one point shipped cocaine by hiding it in cases of sealed beer cans; when the cans were opened, the liquid inside evaporated, the paper explained, leaving just the coke. William's ingenuity led to his arrest in Colombia in 1996; he was subsequently killed as he was being transferred from one prison to another.

By then, Pablo had relocated to Panama (although his operations were still based in Colombia, in Buenaventura). He first appeared on the DEA's radar in the early 1990s, when he allegedly began collaborating with Colombia's infamous Cali Cartel. This was a period of transition for Colombian drug traffickers. In the mid-1980s, Pablo Escobar's Medellin Cartel controlled four-fifths of the trade, which saw 400 tons of cocaine shipped annually to the United States and Europe. When Colombian police killed Escobar in 1993, the cartel collapsed. As nature abhors a vacuum, however, the Cali Cartel arose partly in the Medellin Cartel's place, controlling the shipment of about 800 tons of cocaine a year to the U.S. and Europe. The 1995 arrests of the Rodriguez Orejuela brothers destroyed the Cali Cartel. That's when the Uncle allegedly made his move onto former Cali turf.

During this time, the U.S. government used the carrot of foreign aid to persuade Colombians to track down and cripple major drug traffickers, leading to less corruption in that nation's law enforcement agencies. The large syndicates became riskier, and Mexicans moved in on a trade that had always been dominated by Colombians. The Mexicans had composed a vital link in the shipping chain before, moving coke across the U.S. border. Now, rather than working for the Colombians, they pushed their way to the top. The street price of cocaine rose in the mid-1990s as Colombian cartels collapsed, but by the end of the decade, the price had come back down as Mexican involvement rose. By 2003, according to the DEA, Mexican cartels controlled 77 percent of the coke that came to the United States. Today, the Colombian cartels "are midgets compared to the Mexicans," says Adam Isacson of the Center for International Policy, a Washington, D.C.,-based foreign policy think tank.

Colombia remains a key player in the drug trade, however, if for no other reason than geography: Its climate is ideal for harvesting the coca plant. This in turn has played into the hands of Colombia's leftist insurgencies, such as the Revolutionary Armed Forces of Colombia, or FARC, which is traditionally strong in the same rural parts of the country where the drug is grown. FARC shields coca farmers from the Colombian government and taxes them. As the rebels have built an increasingly modern army by skimming drug profits, the government has been stymied. This in turn has led to the formation of right-wing paramilitaries such as the United Self-Defense Forces of Colombia, or AUC, also funded by the drug trade. Today, the Colombian end of the coke trade is dominated by these armies of the left and right. They are joined in Colombia by a growing number of bit players who specialize in services such as working with chemicals or laundering profits. "Before, a big organization would do all those things," Isacson says. "Now it's a boutique model."

The growers need a way to get their product from a muddy Colombian field to a street corner in Baltimore or a school playground in Beverly Hills. Enter the Uncle.

The wealthy are always welcome in Panama, especially the wealthy and generous, like Pablo Rayo, a man known for treating the locals right. Such locals could conceivably include staffers in the Panamanian immigration office where Rayo's application for a visa was processed and approved even though his file was later found to lack required documents.

As a legal resident, Rayo opened nearly 100 bank accounts and formed about 60 corporations in Panama. In addition to the Tres Marias islands, he purchased about 30 Panamanian properties, many of them oceanfront, according to the Panamanian newspaper Panamá América, as well as eight boats and 24 vehicles.

Nautipesca, a marina in Panama City that houses the nation's biggest boat and fishing supply store, was a venture of particular importance for Rayo. Some of its employees were among the scores arrested in the 2006 raids that also netted Rayo in São Paulo. In the weeks to follow, Panamanian law enforcement sources alleged that Nautipesca's ostensible customers actually paid only a fraction of the value of its merchandise; this let managers augment Nautipesca's accounts with drug money, thereby laundering it.

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Thomas Francis