Billionaires Who Run Successful Private Businesses Deserve Their Money! (read article, part in red, before replying)
Billionaire Druglords: El Chapo Guzman, Pablo Escobar, The Ochoa Brothers
Billionaire Mexican drug cartel king Joaquin “El Chapo” Guzman Loera’s time as a free man appears to be short-lived: Mexican police acknowledged Sunday that they nearly caught him in February.
Guzman, the Sinaloa drug cartel leader who controls an estimated 25% of the illegal drug trade from Mexico to the U.S., has reportedly been hiding out in a seaside mansion in Los Cabos. Mexican police barely missed capturing him three weeks ago, Mexico’s assistant attorney general in charge of organized crime investigations, Jose Cuitlahuac Salinas, told the Associated Press on Sunday.
Sources say that the net appears to be closing in on the world’s most powerful drug dealer. Guzman is spending more money to defend the cartel than in previous years, and he’s expanded his activities outside his native country to avoid the heat from Mexican authorities. An additional indication that the footsteps are closing in: last year, Guzman reportedly sent his 22-year-old wife to Los Angeles County to give birth to the couple’s twin daughters.
Despite Guzman’s defensive spending, the Mexican government recently struck two significant blows against the Sinaloa empire: December 2011 brought the arrest of a top Sinaloa lieutenant, quickly followed in February by the capture of the leader of the cartel’s armed wing.
Guzman appears on Forbes 2012 World’s Billionaires List for the fourth year running. His admission to this elite set has always been controversial–last year the son of a famed Colombian drug dealer accused Forbes of “lying”–but Guzman is certainly not the first drug lord to make our list of the world’s wealthiest. In 1987, we included Colombian cocaine tycoons Pablo Escobar Gaviria and the Ochoa brothers–Jorge Luis Ochoa Vasquez and his brothers Fabio and Juan David–on our first World’s Billionaires List.
The reason for including these notorious names has always been, and continues to be, quite simple: they meet the financial qualifications. And they run successful private businesses–though their products are quite illegitimate.
Escobar’s biography from the 1987 inaugural Forbes Billionaires issue reads like a how-to guide for ambitious, P.R.-savvy entrepreneurs: from a lowly position as smuggler, enforcer and bodyguard, Escobar worked his way to the top, first by saving enough money to invest in his own cocaine business. By 1978, Escobar was moving about 35 kilos of coke a month out of Medellin. He took over a Medellin newspaper, became influential in politics, and successfully ran for public office. He built houses for the poor, soccer fields, and a zoo for the public. Eventually, he was indicted on charges of cocaine marketing, money laundering, and contract killing. In 1987, Escobar controlled an estimated 40% of the Medellin drug cartel’s business, and had accumulated at least $3 billion over the years, Forbes reported. Escobar remained on the Forbes Billionaires List for seven years, appearing for the final time in the July 1993 Billionaires issue. Five months later he was killed.
The Ochoa brothers followed a similar business plan, building their wealth by expanding their influence in the cocaine trade. Jorge Luis Ochoa Vasquez took over a cocaine exporting business in 1977 by having his boss executed, DEA sources told Forbes. Jorge was a founding member of the Medellin cartel; a meeting he convened in 1981 led to the development of the powerful network. He also developed a distribution network into the U.S. Fabio, on the other hand, was in charge of business development outside Colombia: he moved to Florida and was believed to have personally run thousands of pounds of cocaine out of a house in Coral Gables. By 1983, the family had acquired a fleet of 55 aircraft, including helicopters. Together, brothers Fabio, Juan David and Jorge eventually controlled 30% of the Medellin cartel’s cocaine trade. Jorge was indicted by the U.S. government in 1984. Forbes said in 1987 that the brothers shared more than $2 billion. In January 1991, Jorge turned himself in to Colombian authorities; his brother Fabio followed, and Juan David became the final brother to surrender that February. The Ochoa brothers remained on the Forbes Billionaires List for six years, last appearing in the rankings in 1992. All three brothers are still living, Fabio in a U.S. prison.
In 1988, Forbes added Gonzalo Rodriguez Gacha to our second World’s Billionaires List. Rodriguez operated out of Bogota but had ties to the Medellin cartel; U.S. authorities said he was in charge of all cocaine distribution on the West Coast of the United States. Rodriguez rose to power as Escobar’s lackey: he was alleged to have killed a left-wing Colombian political leader whose guerrilla activists were interfering with coca farmers, and he set up Yari laboratories, one of the world’s largest cocaine production centers. Rodriguez helped expand the trade in Nicaragua with his ties to the Sandinistas; he also was said to have disguised his product as it was shipped into the U.S., tricking airport sniff dogs by embedding the cocaine with flower shipments. Forbes estimated Rodriguez’s worth at $1.3 billion in 1988. The drug lord appeared on the Forbes Billionaires List only two years, with his second and final appearance in July 1989. Five months later, he was killed in a shootout with Colombian police.
Forbes wasn’t lying, of course. As we’ve written before, we value Guzman’s fortune in the same way that we value the fortunes of all business people running private enterprises: by interviewing experts, government officials and academics who understand El Chapo’s business. The first year that Forbes put Guzman on the billionaires list, we explained in the magazine how we calculated his net worth. You can read that story here.
Look, we don’t like the fact that drug dealers make billions by ruining lives and shedding blood–but it’s a cold, hard reality of the global economy. That’s why we continue to cover people like Guzman.
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