DEA Had Evidence on García Luna Long Before Bribery Trial — ProPublica

When federal prosecutors walk into the United States Courthouse in Brooklyn on Monday to present their opening statements against Genaro García Luna, the highest-ranking Mexican official ever tried in the United States for drug corruption, they will unveil a complex case that took years to build.

But the fuller story of the government’s investigation of García Luna — a former security minister who was arguably the United States’ most important Mexican partner in a long and failed effort to transform his country’s criminal justice system — is hardly a triumph of determined American law enforcement.

Investigators from the Drug Enforcement Administration uncovered evidence of García Luna’s secret alliance with violent drug traffickers more than 10 years ago, months before he stepped down from office in 2012. By the next year, they had enough to present their findings to the head of the DEA, who urged them to press ahead to an indictment.

But as the investigators continued to build their case over the next few years, federal prosecutors in Houston rejected it repeatedly as insufficient, several current and former officials told ProPublica. Finally, the case stalled.

“They wanted more,” said Steven S. Whipple, who supervised the investigation for several years as a deputy chief and then head of the DEA office in Houston. “I thought we had enough to charge the guy, but they said no — and they were the lawyers.”

The case did not move forward until early 2019, after a government witness in the trial of the Mexican kingpin Joaquín Guzmán Loera, known as El Chapo, told of paying García Luna more than $6 million in cash on behalf of Guzmán’s so-called Sinaloa Cartel.

Soon after that testimony, prosecutors from the Eastern District of New York, based in Brooklyn, began putting together the case on which they arrested García Luna in December of that year. The evidence developed by the Houston agents quickly became a central part of their case, officials familiar with the inquiry said.

García Luna has pleaded not guilty. But if he is convicted, his betrayal would point to one of the more extraordinary intelligence failures of the decadeslong U.S. battle against the drug trade in Mexico.

The Eastern District prosecutors have also indicted two of García Luna’s closest former aides, Luis Cárdenas Palomino and Ramón Pequeño García, on similar charges and will likely seek their extradition after the trial, officials said. A third former García Luna aide, Iván Reyes Arzate, who for years oversaw elite police units that worked with U.S. agents on sensitive investigations, has already pleaded guilty to U.S. corruption charges.

Starting in the late 1990s, when García Luna left Mexico’s civilian intelligence service to help reorganize the federal police, he spent nearly 15 years at the center of the two governments’ joint efforts to build a more effective, less-corrupt criminal justice system in Mexico.

For six years, García Luna ran the Federal Investigative Agency, a police force modeled vaguely on the FBI. Starting in late 2006, as President Felipe Calderón sought much wider U.S. help to fight drug mafias and transform the criminal justice system, García Luna served for years as his powerful secretary of public safety.

Yet even as he won public praise in Washington, García Luna was the target of repeated accusations of corruption by others in the Mexican security apparatus. Some of those officials said they confided their suspicions to Calderón. Some shared what they knew privately with U.S. Embassy officials. A few spoke out openly.

American officials who served in Mexico City at the time described an environment perpetually clouded with rumors of corruption that were almost always difficult to verify. They said they tried to investigate the most significant allegations but rarely came to satisfying results. Former American diplomats also said that while they had access to U.S. intelligence, they had little or no information that was developed about García Luna and other officials in federal law enforcement investigations.

“I never saw any CORROBORATED information of involvement in drug trafficking,” a former U.S. ambassador to Mexico, Roberta S. Jacobson, tweeted following García Luna’s arrest.

Yet, given García Luna’s central role in both the fight against organized crime and the longer-term police reform project, the due diligence done by U.S. officials who worked with him is certain to look less compelling against the incriminating information that federal prosecutors will start to reveal in their opening statements on Monday.

The Eastern District prosecutors have prepared more than 60 possible witnesses and tens of thousands of pages of documentary evidence, people familiar with the case said. The star witnesses are expected to include the Mexican trafficker who first told his story to DEA agents in Houston in 2012, Sergio Villarreal Barragán, a hulking former police agent known as El Grande.

But the case still faces some legal hurdles. The most important may be the five-year statute of limitations that covers drug and corruption crimes. The prosecutors have sought to circumvent this obstacle by charging that García Luna joined the Sinaloa capos in a “continuing criminal enterprise.”

Like the more commonly used Racketeer Influenced and Corrupt Organizations, or RICO, Act, the so-called CCE statute is used to impose longer prison sentences on crime bosses, and it specifically targets drug crimes. The CCE charge allows the prosecutors to argue that García Luna and his lieutenants are responsible for criminal actions that continued years after they stopped taking the traffickers’ bribes.

The strategy is untested, though, as a way to prosecute a corrupt government official after he apparently ended his criminal ties, and some officials believe it will likely be a focus of García Luna’s defense.

Unlike the Eastern District’s abortive effort to prosecute Mexico’s former defense minister, Gen. Salvador Cienfuegos Zepeda, on drug corruption charges in late 2020, the government of Mexican President Andrés Manuel López Obrador has mostly welcomed the U.S. action against García Luna. Officials said his government has cooperated with the U.S. prosecutors in response to some requests for information.

Cienfuegos was vigorously defended by the Mexican army, on which López Obrador has depended heavily throughout his administration. In the face of diplomatic protests, then-U.S. Attorney General William P. Barr dropped the charges and sent the general back to Mexico barely a month after he was arrested. Cienfuegos said he was innocent of any wrongdoing.

By contrast, García Luna is closely associated with Calderón, a pro-American conservative who defeated López Obrador in a bitterly contested 2006 election and remains his hated rival. The Mexican government has filed its own corruption charges against García Luna and sued him in a Florida court, demanding $250 million that the authorities say he and his associates stole while he was security minister. He has denied those allegations.

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In hindsight, some of the many American officials who worked closely with García Luna said they had cause to suspect him long before he was charged with working for Guzmán’s Sinaloa Cartel.

One former U.S. Embassy official recalled being invited by García Luna to a party at what he described at the country home of his wife’s family in Cuernavaca, a weekend retreat south of the capital favored by wealthy Mexicans.

At one point, García Luna escorted some of his American guests to an immaculate, warehouse-like garage where he kept a gleaming array of restored vintage automobiles, one of them recalled. It was impossible to estimate the collection’s value at a glance, but the former official thought it might have been worth hundreds of thousands of dollars — perhaps as much as the home itself.

“It was right in front of us,” said the former official, who, like some others, insisted on anonymity to discuss still-secret information about García Luna’s case. “If it wasn’t corrupt, it was suspect. But we didn’t really have a choice about working with him.”

The DEA noticed García Luna early on. While still serving in the intelligence service, he and Cárdenas Palomino, his longtime lieutenant, arrived in Tijuana in the mid-1990s to offer to collaborate with U.S. agents working against the Arellano Félix gang, drug-running brothers who had been implicated in the 1993 murder of the Roman Catholic cardinal of Guadalajara.

“They gave a beautiful briefing,” one former DEA agent said of the two Mexican intelligence agents. “They had an operational plan, but it was all targeted to the Arellanos. When you talked about anybody else, they didn’t care.”

The former agent surmised that García Luna might already have been working for the Sinaloa Cartel, the Arellanos’ rivals. García Luna and Cárdenas Palomino pressed the DEA for information about the Arellanos. But the Mexicans claimed to know little about the Sinaloans, even though they were then operating from nearby Mexicali and pushing violently into Tijuana.

In 1998, García Luna joined a former head of the intelligence service to try to reorganize the notoriously corrupt Federal Preventive Police. That effort ended with the former intelligence chief accused of corruption (he was later exonerated), but García Luna prospered. When Mexico’s first opposition president was elected in 2000, he was named to lead the federal police, which was rebranded once more as the Federal Investigative Agency.

At the AFI, as it was known by its Spanish initials, García Luna impressed U.S. officials as a can-do technocrat (he had a college degree in mechanical engineering) unburdened by the nationalistic mistrust that had always clouded Mexico’s collaboration with the United States in the drug fight.

When García Luna was chosen in late 2006 to run a powerful new public safety ministry under Calderón, the U.S. Embassy fairly rejoiced in a cable to Washington. When Calderón turned to the George W. Bush administration for urgent help in the fight against surging violence, the two governments signed a landmark agreement, the Mérida Initiative, that would lead to a new era of cooperation and more than $3.5 billion in U.S. security aid.

“Within a very short time, García Luna became our go-to guy because he was the most effective partner we had,” said John Feeley, a senior American diplomat who worked for years on the Mérida plan’s implementation. “There were a lot of things that we did under the rubric of Mérida that were very successful, and many of them involved García Luna.”

At the same time, however, the central Mérida goal of police reform ran into endless difficulties under García Luna’s leadership.

When sensitive intelligence information was shared with Mexican police officials, even those trained and vetted by the DEA, it was leaked to the traffickers almost routinely. American-trained police officials in those units were killed one after another, apparently betrayed to the traffickers by others inside the government.

García Luna, Cárdenas Palomino and other top security officials refused to submit to the screening and polygraph examinations that were given to the vetted agents, and U.S. officials felt they could not compel them to do so. (Reyes Arzate, a García Luna lieutenant who directed the Mexican police units that worked with U.S. agents, did pass polygraph tests before he was charged in Chicago in 2017 with leaking information to the traffickers, two officials said.)

By the time García Luna stepped down in 2012, he had been linked to drug traffickers in several Mexican news articles and implicated publicly and privately by at least three prominent Mexican officials. Two of his accusers, a former police official and an Army general, were themselves jailed on corruption charges, which were later dropped.

Then, in May 2012, U.S. allies in the Calderón administration helped secure the extradition of Villarreal, the feared Mexican trafficker called El Grande. Weeks later, U.S. investigators began to question him at length in a federal prison in Texas.

The story he told them was bracing, several former officials said. He described García Luna as having been a paid and trusted protector of both the Sinaloa Cartel and the Beltrán Leyva Organization, a powerful gang headed by brothers who split from Guzmán and his Sinaloa allies in 2008.

Arturo Beltrán Leyva, who led the organization until he was killed in a raid by Mexican marines in 2009, felt so strongly that García Luna worked for him that he berated the minister after one of his brothers was arrested, Villarreal said. Cárdenas Palomino and other García Luna lieutenants were described as having been part of the scheme as well.

At one point, Villarreal told the DEA investigators, García Luna met with a group of high-level traffickers at an isolated ranch and informed them he could no longer accept their cash, at least for a while. He was taking in so much money that he no longer had the means to launder it, former officials familiar with the account said.

Villarreal spoke under oath and laid out specific information that the agents were later able to corroborate. If his accusations against García Luna were true, it suggested that the entire U.S. effort to transform Mexico’s police structure might have been doomed from the start.

A small group of DEA agents in Houston, where Villarreal was being prosecuted, began digging into the case. They conducted surveillance of García Luna in Miami, where he had moved with his family to set up a security consulting firm and other businesses. They also discovered his complicated entanglements with a Mexican security executive, Samuel Weinberg, and his son, who were found to be channeling funds to some of García Luna’s enterprises. The Weinbergs have denied wrongdoing.

As part of their effort to trace García Luna’s finances, the agents first uncovered records in Panama that showed millions of dollars in suspicious transfers from offshore accounts into others that García Luna appeared to control in Miami, including one for a restaurant that appeared to be laundering the money. Through a front company, the Weinbergs had purportedly facilitated the purchase of a $3.3 million house in Golden Beach, north of Miami, where García Luna was living, but he was the person who had picked it out with a real estate agent, one former official said.

In 2013, a senior agent overseeing the case was sent to Washington to brief the DEA administrator, Michele M. Leonhart. She did not hesitate in her assessment of the case, one former official familiar with the meeting recalled. “Get it done,” the official quoted her as saying. “Get him charged.”

But while García Luna recruited clients for his security firm, earned a master’s degree in business administration at the University of Miami and enjoyed his new life, the Houston investigators got a less enthusiastic response from federal prosecutors in the Southern District of Texas, headquartered in Houston.

The prosecutors were not especially interested in a historical corruption case, three former officials said, and they did not think agents had put together sufficient evidence to convict a high-profile figure like García Luna.

“The Southern District felt straight-up that there wasn’t enough information to charge him,” Whipple, the former DEA chief in Houston, said. “We couldn’t get it prosecuted.”

Whipple and others overseeing the case pushed the agents to press forward, but they made slow progress. The financial information was complex and complicated by the difficulty of obtaining records overseas. The agents interviewed former Mexican traffickers and lined up other potential witnesses.

Despite the additional evidence, prosecutors at the Houston office continued to see their findings as insufficient to go after a target as formidable as García Luna, officials said. A spokesperson for the U.S. attorney’s office, Angela Dodge, declined to comment on how it weighed the Garcia Luna matter, but said, “We consider each case based on the evidence and what can be proven beyond a reasonable doubt in a court of law.”

Eventually, though, the DEA investigators began to lose steam, officials said.

“When you’ve pursued every lead you can find and the prosecutors say it’s not quite enough, things get stagnant,” Whipple said. “I thought that we had checked all the boxes. But it was on the back burner until something popped — and the Chapo case finally popped.”

Early in Guzmán’s trial in the Eastern District, a former Sinaloa lieutenant, Jesús Zambada García, testified that he had twice met with García Luna at a Mexico City restaurant to give him cash-filled briefcases, each one with more than $3 million. That revelation and others prompted the U.S. attorney, Richard P. Donoghue, to instruct his prosecutors to begin making cases against García Luna and other corrupt Mexican officials.

Those prosecutors and the investigators working with them soon found their way to Houston, where one of the DEA agents and a financial crimes analyst eagerly turned over all the work they had done over the previous seven years.

García Luna was secretly indicted on drug conspiracy charges by a federal grand jury in Brooklyn, and he was arrested in Dallas on Dec. 9, 2019.