The Narc Asset Seizure Business

Cash is seized from cartels and handed to law enforcement. Does this create bad incentives?

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This is part three in a series on narco cash, or cartel-onomics. The first parts are:

I. How Much Money Do Cartels Make and Where Is It?

II. Narco Bling and Dirty-Money Laundromats

Part III

When DEA agent Mike Chavarria got into an interrogation room with Gulf Cartel boss Osiel Cárdenas, he was struck by his eyes. “I would describe him as having the eyes of the devil. Looking in his eyes was like you were looking in the dark abyss,” Chavarria tells me.

Chavarria had seen Osiel’s evil deeds first hand as he had worked in Mexico and witnessed the Gulf Cartel, and its army of Zeta enforcers, soak the country in blood. From his base in Matamoros, Osiel ran a vast cocaine and weed operation into Texas that brought back suitcases of cash; he had also personally threatened U.S. agents.

“This was a man that we knew was responsible either directly, but many more indirectly, for thousands of deaths and you could see he had no remorse,” says Chavarria, who is now retired from the DEA. “He was really enjoying the status, the rock star status. So I wasn't surprised that he wanted to cooperate.”

Osiel knew how to play the game. After his extradition from Mexico to Houston in 2007, he gave U.S. law enforcement info on both his rivals and subordinates, a betrayal that sparked yet more bloodshed in Mexico. But perhaps sweetest of all for U.S. prosecutors, he handed over a humongous pile of cash.

The case was hidden from the public until Dane Schiller of the Houston Chronicle went to court to get some of the documents unsealed. Schiller discovered that…

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