Drug Control: U.S. Antidrug Efforts in Peru's Upper Huallaga Valley
(Letter Report, 12/07/94, GAO/NSIAD-95-11).

Nearly two-thirds of the world's coca crop is grown in Peru. Most of
that coca is processed into a cocaine base, which is flown to Colombia
to make cocaine for shipment to the United States and Europe.  Since the
1980s, the primary coca-growing and drug-trafficking activities in Peru
have been in the Upper Huallaga Valley.  The United States has supported
Peruvian efforts to eradicate coca seedbeds and conduct law enforcement
operations against drug traffickers.  This report discusses (1) the
rationale for, and costs associated with, the construction, the
maintenance, and the operations of the Santa Lucia base, an antidrug
base in the Upper Huallaga Valley; (2) the subsequent rationale for
discontinuing support of the Santa Lucia base; and (3) the current
status of U.S. efforts to restructure antidrug programs in Peru.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-95-11
     TITLE:  Drug Control: U.S. Antidrug Efforts in Peru's Upper 
             Huallaga Valley
      DATE:  12/07/94
   SUBJECT:  Drug trafficking
             International relations
             International law
             Contraband
             Crimes or offenses
             Air transportation operations
             Federal aid to foreign countries
             Law enforcement
             Information dissemination operations
             Foreign military assistance
IDENTIFIER:  Peru
             Upper Huallaga Valley (Peru)
             Colombia
             UH-1H Helicopter
             C-123 Aircraft
             C-130 Aircraft
             Dept. of State International Narcotics Control Program
             Santa Lucia (Peru)
             Pucallpa (Peru)
             CASA-212 Aircraft
             
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Cover
================================================================ COVER


Report to Congressional Requesters

December 1994

DRUG CONTROL - U.S.  ANTIDRUG
EFFORTS IN PERU'S UPPER HUALLAGA
VALLEY

GAO/NSIAD-95-11

Drug Control


Abbreviations
=============================================================== ABBREV

  CORAH - Coca Eradication in the Upper Huallaga Valley
  DEA - Drug Enforcement Administration
  NAS - Narcotics Affairs Section
  INM - International Narcotics Matters

Letter
=============================================================== LETTER


B-258650

December 7, 1994

The Honorable John Conyers, Jr.,
Chairman
The Honorable Alfred A.  McCandless
Ranking Minority Member
Legislation and National Security Subcommittee
Committee on Government Operations
House of Representatives

In response to your request, we are providing you information on U.S. 
antidrug efforts in Peru.  Specifically, we ascertained (1) the
rationale for, and costs associated with, the construction,
maintenance, and operations of the Santa Lucia base, an antidrug base
in the Upper Huallaga Valley; (2) the subsequent rationale for
discontinuing support of the Santa Lucia base; (3) and the current
status of U.S.  efforts to restructure antidrug programs in Peru. 


   BACKGROUND
------------------------------------------------------------ Letter :1

Nearly two-thirds of the world's coca crop is grown in Peru.  Most of
that coca is processed into cocaine base, which is flown to Colombia
to make cocaine for shipment to the United States and Europe.  Since
the 1980s, the primary coca-growing and drug-trafficking activities
in Peru have been in its Upper Huallaga Valley. 

During the early 1980s, the United States provided support for Peru
to conduct manual eradication of mature coca leaf.  However, because
of security concerns for personnel conducting manual eradication,
these activities ceased in 1987.  Gradually, the United States began
to (1) support Peruvian efforts to eradicate coca seedbeds and (2)
conduct law enforcement operations against drug-trafficking
activities.  Before 1989, both operations were conducted by
helicopter from Tingo Maria, about 150 miles southeast of Santa
Lucia, the center of illegal drug activities.  In 1989, the United
States and Peru moved their operations to a base located near the
town of Santa Lucia.  The base, which became the center of U.S.  and
Peruvian eradication and law enforcement operations, supported
between 430 and 492 personnel, including 32 U.S.  personnel.  The
United States continued to provide support to the base until late
1993.  The map on page 3 shows the locations of these bases. 

The Departments of State and Defense and the Drug Enforcement
Administration (DEA) coordinate antidrug activities with Peruvian law
enforcement and military organizations.  At the U.S.  embassy in
Peru, these functions are carried out by the Narcotics Affairs
Section (NAS), the U.S.  Military Assistance Advisory Group, and the
DEA Country Attache's Office.  Other U.S.  agencies also provide
support to Peruvian antidrug programs and operations. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :2

The Santa Lucia base was constructed to serve as a secure center to
house and support antidrug forces responsible for eradicating coca
and conducting law enforcement activities to stop the flow of illegal
drugs from Peru through Colombia to the United States.  Between
fiscal years 1988 and 1993, the State Department spent about $49.2
million to construct, maintain, and operate the base.  In fiscal year
1994, the Congress reduced the State Department's International
Narcotics Control Program from $148 million to $100 million.  In
December 1993, the U.S.  embassy restructured its antidrug programs
in Peru because it could not continue to support the base while also
supporting other efforts required in the U.S.  antidrug strategy. 
The restructuring efforts included (1) moving U.S.  helicopter
maintenance operations to a Peruvian naval base in Pucallpa (see fig. 
1), (2) turning over the operation and maintenance of the Santa Lucia
base to Peru, and (3) returning the State Department's fixed-wing
aircraft that were used to support the base to the United States. 

As part of the decision to stop supporting the Santa Lucia Base, the
executive branch approved a formal mobile basing concept to implement
antidrug efforts, which included establishing an operational planning
group within the U.S.  embassy.  The U.S.  embassy has been slow in
implementing the mobile basing concept because of maintenance
problems with helicopters, internal differences within the U.S. 
embassy over how the group actually would function to coordinate law
enforcement operations, and the May 1994 decision by the United
States to stop sharing with the government of Peru information that
could be used to shoot down civilian aircraft suspected of drug
trafficking.  Legislation was recently passed to allow information
sharing to resume; however, the administration has not reached
agreement with Peru on certain required preconditions. 

   Figure 1:  Map of Peru

   (See figure in printed
   edition.)

Note:  Boundaries are not necessarily authoritative. 


   RATIONALE FOR BUILDING THE
   SANTA LUCIA BASE
------------------------------------------------------------ Letter :3

According to U.S.  officials, the rationale for building the Santa
Lucia base was to place U.S.  personnel in the safest possible
environment from which to conduct antidrug activities.  U.S. 
personnel flying into the heart of the drug-trafficking area were
increasingly at risk because in the mid-1980s, the Sendero
Luminoso--a Maoist organization attempting to overthrow the Peruvian
government--took control of the area.  This group protected those
trafficking in drugs in return for monetary support for the Sendero. 

In 1988, the United States began to build the Santa Lucia base, which
included an airfield, a maintenance facility for 6 to 10 U.S.  UH-1H
helicopters used for eradication and law enforcement missions, and
housing.  Because the base was in a highly dense, tropical area with
no safe, accessible roads, fixed-wing aircraft (C-123s and C-130s)
were supplied by the State Department's Bureau of International
Narcotics Matters (INM)\1 to transport personnel, equipment, and
supplies to the base from Lima several times each week.  In addition,
DEA and Peruvian aircraft used the base for law enforcement
operations. 


--------------------
\1 INM maintains an air wing of rotary and fixed-wing aircraft to
assist host governments in conducting counternarcotics operations in
several Central and South American countries, including Peru. 


   COSTS OF THE SANTA LUCIA BASE
------------------------------------------------------------ Letter :4

According to INM and U.S.  embassy records, about $49.2 million was
provided to construct, maintain, and operate the Santa Lucia base
during fiscal years 1988-93.  These funds were included as part of
the State Department's International Narcotics Control Program, which
is authorized under the Foreign Assistance Act of 1961, section 481,
as amended.  INM provided these funds for five projects in Peru (see
table 1). 



                           Table 1
           
            Costs Associated With the Santa Lucia
               Base During Fiscal Years 1988-93

                    (Dollars in millions)

Project                                                 Cost
--------------------------------------------------  --------
Construction of the base                               $ 9.8
Coca Eradication in the Upper Huallaga Valley           16.9
 (CORAH)
Law enforcement                                          6.4
Program development and support                          4.6
Fixed-wing aircraft                                     11.5
============================================================
Total                                                  $49.2
------------------------------------------------------------

      CONSTRUCTION COSTS
---------------------------------------------------------- Letter :4.1

Included in the $9.8 million construction project are the costs of
daily laborers to construct the base and its related infrastructure;
installation of prefabricated housing; equipment and commodities
needed to construct and operate helicopter and fixed-wing aircraft
facilities and an airstrip; recreational equipment, food, and
clothing; and miscellaneous items such as payments to the Peruvian
engineer in charge of constructing the airstrip and the rental of
heavy equipment. 


      CORAH COSTS
---------------------------------------------------------- Letter :4.2

The $16.9 million for CORAH was provided for the direct and indirect
costs of supporting between 200 and 250 Peruvian workers to help
construct, maintain, and operate Santa Lucia base; provide support
services; and perform limited antidrug duties.  Direct costs were for
activities on the base, including operating equipment such as
electrical generators, providing food service, cutting the grass,
procuring supplies, and monitoring U.S.-provided equipment to ensure
that it was used for counternarcotics purposes. 

Indirect costs were for support provided from the CORAH headquarters
at Tingo Maria, including the purchase of food, construction
equipment such as trucks and a bulldozer, supplies and materials, and
general supplies for Santa Lucia; and administrative support
functions for CORAH personnel at the base. 

Between March 1990 and November 1993, 10 CORAH workers eradicated
coca seedbeds about 3 to 4 hours a day, 3 to 4 days a week.  This
work was suspended in November 1993 because of budgetary constraints. 
In addition, up to 50 CORAH workers installed concrete obstacles to
block
10 illegal airstrips in the Upper Huallaga Valley.  The costs for
blocking the airstrips could not be readily determined, but the
embassy's Narcotics Affairs Section said they were included in the
direct and indirect costs discussed above. 


      LAW ENFORCEMENT COSTS
---------------------------------------------------------- Letter :4.3

About $6.4 million was spent for police support at Santa Lucia,
including (1) per diem for Peruvian police officers stationed at the
base to provide security for the base and for workers on eradication
missions and (2) commodities used by the police to support the base. 


      PROGRAM DEVELOPMENT AND
      SUPPORT COSTS
---------------------------------------------------------- Letter :4.4

About $4.6 million was provided for salaries and expenses of the NAS
staff and activities related to administrative support of the base as
well as other antidrug programs in Peru.  Such support included
processing procurement vouchers for goods and services. 


      FIXED-WING AIRCRAFT COSTS
---------------------------------------------------------- Letter :4.5

About $11.5 million was spent on operating and maintaining the
fixed-wing aircraft that transported personnel, supplies, and other
items to and from Santa Lucia.  Generally, two C-123 and two C-130
aircraft were used for these missions.  This was funded by INM's
airwing account and not included in Peru's antidrug program budget. 


   RATIONALE FOR SUSPENDING U.S. 
   SUPPORT FOR SANTA LUCIA BASE
------------------------------------------------------------ Letter :5

The Congress reduced the State Department's annual International
Narcotics Control Program request for fiscal year 1994 from $148
million to $100 million.  After coordinating with various U.S. 
agencies involved in antidrug activities regarding program options,
the State Department decided that it could not adequately support
maintenance and operations at the Santa Lucia base while supporting
its antidrug programs in Peru and other countries.  Thus, in December
1993, the United States stopped supporting the base and the Peruvian
government assumed responsibility for the base's administrative and
operational control. 

State Department officials reported that although trafficking
activities had moved outside of the immediate range of U.S.-provided
helicopters, they would have maintained the Santa Lucia base had the
budget not been reduced.  U.S.  embassy officials stated that they
had already begun to cover an expanded area by conducting helicopter
operations using forward operating locations outside of the Santa
Lucia area. 


   STATUS OF RESTRUCTURING
   COUNTERNARCOTICS OPERATIONS IN
   PERU
------------------------------------------------------------ Letter :6

Some aspects of the restructured programs have been completed and are
in place.  Specifically, NAS has moved its helicopter maintenance
facilities from Santa Lucia to Pucallpa and the government of Peru is
now responsible for operating the Santa Lucia base.  In addition,
INM-owned fixed-wing aircraft used to support U.S.  antidrug
operations have been returned to the United States and fixed-wing
aircraft are now being rented from Peru.  However, the U.S.  embassy
has faced a number of obstacles to fully implementing a mobile basing
concept for conducting antidrug missions, including problems with
helicopter maintenance, internal conflicts over the responsibility
for planning and coordinating antidrug operations, and a U.S. 
decision not to share with Peru real-time information and assistance
that could lead to the shoot down of civilian aircraft suspected of
drug trafficking. 


      MOVE TO PUCALLPA
---------------------------------------------------------- Letter :6.1

To stay within the budget, the State Department moved helicopter
maintenance facilities and associated U.S.  and Peruvian police
personnel from Santa Lucia to several different sites in Pucallpa,
where an international airport is located.  The airport serves as the
center from which operations are conducted and for resupplying and
supporting maintenance operations.  The airport also houses U.S. 
fixed-wing aircraft used by DEA and other agencies to support law
enforcement operations.  The maintenance facilities, aviation ground
support equipment, and spare parts for 10 UH-1H helicopters are
located at a Peruvian naval base in Pucallpa.  About 15 U.S. 
contractor personnel assist the Peruvian police in maintaining and
operating the helicopters.\2 A total of about 30 U.S.  and
30 to 35 Peruvian personnel live in a hotel about 10 minutes from the
naval base. 

The United States spent about $450,000 for (1) security improvements
to the hotel, (2) improvements to three warehouses behind the hotel,
(3) improvements to a refueling area, and (4) refurbishment of a
warehouse and extension of the perimeter wall at the naval base. 
Planned projects include improvements to the hotel and naval base and
construction of a small hangar and ramp area at the airport for
fixed-wing aircraft.  Cost estimates for these projects were not
available. 

U.S.  embassy personnel stated that U.S.  personnel are not allowed
to leave the hotel unless they are transported in official vehicles
to and from work because of security concerns.  According to NAS
personnel, morale at Santa Lucia was much better because personnel
were free to move around the base after work and tended to interact
more readily. 


--------------------
\2 DynCorp Aerospace, Inc., a private contractor, provides
management, administrative, rotary-wing, and maintenance services. 


      PERU'S SUPPORT OF SANTA
      LUCIA
---------------------------------------------------------- Letter :6.2

With the loss of U.S.  support to Santa Lucia, the government of Peru
agreed to administer the base and maintain it as a location from
which antidrug operations could be conducted.  According to the U.S. 
Embassy's NAS Director, U.S.  officials were concerned that the
government of Peru might be unable to provide the resources needed to
maintain and operate the base adequately.  At the time of our visit,
the airstrip needed repair because of holes in the runway and other
maintenance problems.  The NAS Director estimated that about $1.5
million is needed to repair the airstrip.  Nevertheless, DEA is
continuing to conduct antidrug operations from the base. 


      ELIMINATING THE USE OF
      INM-OWNED FIXED-WING
      AIRCRAFT TO SUPPORT ANTIDRUG
      OPERATIONS
---------------------------------------------------------- Letter :6.3

Because the State Department stopped supporting the Santa Lucia base,
INM-owned fixed-wing support was terminated.  In December 1993, INM's
fixed-wing aircraft--two C-123s and two C-130s--and almost $10.1
million in aircraft spare parts were shipped for storage to Davis
Monthan Air Force Base in Tucson, Arizona.  The 28 personnel
responsible for maintaining the aircraft were returned to the United
States.  To support antidrug missions at Pucallpa, the embassy now
rents fixed-wing aircraft from the Peruvian air force and civilian
companies.  According to the embassy, the monthly rental costs should
be less than $20,000. 


      MOBILE BASING CONCEPT
---------------------------------------------------------- Letter :6.4

The embassy's implementation of the mobile basing concept has been
complicated by several problems.  The concept included the following
assumptions: 

8 to 10 helicopters and fixed-wing aircraft would be available for
antidrug operations, and

an operational planning group would be established in the embassy to
plan law enforcement operations. 

In early 1994, the Defense Department notified State that it had to
ground UH-1H helicopters that had certain engine numbers, which had
to be overhauled because of mechanical problems.  This created
maintenance problems with the UH-1H helicopters that limited the
embassy's ability to fully support the mobile basing concept.  Five
of the 10 helicopters used in Peru were grounded for 6 weeks because
their engines required overhaul.  A total of 11 engines had to be
overhauled at a cost of $1.65 million.  The five remaining
helicopters were used extensively during the 6-week period, and thus,
all subsequently needed maintenance at about the same time.  In June
1994, 3 of the 10 helicopters were in for scheduled maintenance,
leaving the embassy with only 7 to conduct operations.  Recent
embassy reports say that high levels of metal particles are being
found in gear boxes and engines, indicating excessive wear and use. 
An embassy official indicated that this situation may cause future
maintenance problems and affect mobility of operations. 

According to DEA officials, helicopter maintenance problems have
limited their ability to plan and conduct operations.  For example, a
DEA official stated that of the 13 missions requiring helicopter
support during a recent 3-month period, the helicopters experienced
mechanical problems during 6 of them.  In two cases, DEA teams were
delayed in the jungle because of the problems.  In addition, DEA's
CASA-212 fixed-wing transport aircraft was grounded for several
months because of maintenance problems.  Finally, an embassy official
stated that Peruvian aircraft are frequently grounded because their
mechanics have not been properly trained. 

To further complicate matters, the operational planning group was not
formally established by the U.S.  Ambassador until July 1994, 7
months after the mobile basing concept was approved, and has not yet
been staffed.  The delay was caused by internal differences within
the U.S.  embassy about the structure and staffing of the group.  The
NAS Director believed that the group should be responsible for more
than law enforcement operations and include eradication operations,
administrative and training support to the Peruvian police, and other
operations that may be needed.  He also believed that, since the
group would be under the DEA attache that it should be composed
primarily with persons having law enforcement backgrounds to ensure
that DEA conducts operations meeting U.S.  antidrug objectives in
Peru.  DEA and U.S.  military personnel, on the other hand, believed
that the group should be primarily responsible for planning law
enforcement operations and be staffed with military personnel, who
would be more experienced in planning specific operations and
identifying logistics support requirements for law enforcement
operations in the jungle and interacting with Peruvian military
forces in planning military-type operations.  According to U.S. 
officials, the group will be staffed with DEA agents as well as
military personnel providing operational, communications, and
logistical expertise.  The group will be under the control of the DEA
country attache.  According to a U.S.  embassy official, no specific
assignments of military personnel have been made to date. 


      CUT-OFF OF REAL-TIME U.S. 
      ANTIDRUG INFORMATION
---------------------------------------------------------- Letter :6.5

Another factor affecting the mobile basing concept's implementation
is the May 1, 1994, decision to stop sharing certain drug-trafficking
information with the governments of Colombia and Peru, which we
reported on in August 1994.\3

This step was taken because of legal concerns about the probable
criminal liability of U.S.  personnel who provide information that
could lead to the shooting down of a civilian aircraft suspected of
transporting illegal drugs.  According to U.S.  officials, the
sharing of real-time information is critical to ensuring that they
can take timely action against drug-trafficking activities to
increase the risks associated with these activities.  The officials
stated that the policy decision had impacted on their ability to
conduct antidrug operations. 

Although the impact that the policy has had on the flow of drugs
being shipped from Peru to Colombia is unclear, it is clear that
pilots flying between Peru and Colombia have changed their
operations, since there is little fear of interception by U.S.  and
Peruvian forces as long as detection capabilities remain negligible
and there is no sharing of information. 

Various U.S.  reports and officials have stated that, before the May
decision, drug traffickers wanted to minimize their exposure to the
air interdiction threat.  Thus, they (1) used fewer flights with
larger drug loads, (2) flew mainly in the early evening hours, and
(3) spent on an average only about 10 to 12 minutes in loading and
unloading their cargoes.  U.S.  officials in Peru said that since the
policy change, drug traffickers have changed their operations and (1)
have begun multiple flights with smaller drug loads and (2) have
begun flying during the day, and some traffickers have doubled their
time on the ground.  In addition, U.S.  officials stated that an
analysis of flight patterns indicates that traffickers are reverting
to more direct air routes from Peru into Colombia instead of the
indirect and more time-consuming routes they were taking before the
cutoff of information.  DEA officials advised us that the policy to
not share real-time information has caused them to forego law
enforcement operations against illegal drug activities.  Finally, a
recent Defense Department report states that the policy of not
sharing real-time information has reduced the risks associated with
drug-trafficking activities in Peru. 

On October 5, 1994, the President signed legislation that provides
official immunity for authorized U.S.  personnel from liability,
notwithstanding any other provision of law, if information they
provide is used to shoot down civilian aircraft suspected of drug
trafficking.  However, before sharing of information can resume, the
President must determine that (1) illicit drug trafficking poses a
national security threat to Peru and (2) Peru has appropriate
procedures in place to protect against the innocent loss of life. 
The executive branch is discussing this issue with the Peruvian
government.  As of November 30, 1994, the sharing of information had
not yet resumed. 


--------------------
\3 Drug Control in Peru (GAO/NSIAD-94-186R, Aug.  16, 1994). 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :7

To obtain information for this report, we interviewed officials and
reviewed pertinent documents at the Departments of State and Defense
and the Drug Enforcement Administration in Washington, D.C.; the U.S. 
Southern Command in Panama; and the U.S.  Embassy in Lima, Peru.  We
also interviewed Peruvian police officials responsible for
counternarcotics programs. 

We did our review between April and July 1994 in accordance with
generally accepted government auditing standards.  As requested, we
did not obtain written agency comments on a draft of this report. 
However, we discussed the information in this report with agency
officials and included their comments where appropriate. 


---------------------------------------------------------- Letter :7.1

Unless you release its contents earlier, we plan no further
distribution of this report until 10 days after its issuance.  At
that time, we will send copies of the report to the Secretaries of
Defense and State, the Administrator of the Drug Enforcement
Administration, and the Director of the Office of National Drug
Control Policy.  We will also provide copies to others on request. 

This report was prepared under the direction of Mr.  Benjamin Nelson,
Associate Director, who may be reached on (202) 512-4128.  Other
major contributors are Mr.  Andres Ramirez, Assistant Director, and
Mr.  Ronald D.  Hughes, Evaluator-in-Charge. 

Joseph E.  Kelley
Director-in-Charge
International Affairs Issues

