El Chapo: Cocaine kingpin

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Welcome to Good Bad Billionaire, the podcast where we pick a billionaire and find out how they made their money. And then we judge them.
Are they good, bad, or just another billionaire?

I'm Zing Sing and I'm a journalist, author, and podcaster. And I'm Simon Jack and I'm the BBC's business editor.
And today we are discussing a real piece of work.

Joaquin Aquivaldo Guzman Luera, better known as El Chapo. Yeah, one of the most prolific, violent and powerful drug lords in the world.
Currently, in the place he least wanted to be, in a US prison.

He's claimed to have killed over 2,000 people, and he pioneered the use of tunnels to smuggle drugs under the US-Mexico border.

And we should say that this is an episode which contains murder, violence, sexual assault, drugs. So if it's not for you, we have other billionaires, but it's a very interesting story.

It is, because other than tunnels, he was also quite the enterprising businessman.

I mean, he used everything from submarines, drones, chili cans, fish, cars, 90-year-old drug meals to take every single kind of drug you can think of into the U.S.

cocaine, marijuana, heroin, fentanyl, everything and anything. And he controversially entered the Forbes billionaire list in 2009.
He was also not immune to audacious displays of wealth.

So someone who testified against him in court said he had houses at every single beach, ranches in every single state. For context, Mexico has 31, so that's quite a lot of states.

A lot of states, a lot of mansions. And even when he was locked away in high-security jails in Mexico, he enjoyed regular visits from sex workers.

He threw parties for favoured inmates, and he would have booze, lobster, filet mignon. This is a man with expensive tastes, and even prison couldn't hold him down.
He escaped twice from jail.

But he can't spend his money now, however much he's actually got left. It's kind of hard to tell because they don't file annual reports, these people.
He is in high-security U.S.

federal prison and he will be for the rest of his life unless he finds a way to dig another tunnel out. Yeah, and his nickname, El Chapo, means shorty, well-earned, just under five foot six.

And I've seen a little bit of video footage of him. He may be five foot six.
I find him absolutely terrifying.

And I'm really hoping he's not listening because I don't fancy being tortured and killed myself. Do they have podcasts in maximum security jail? That's the question.
Let's keep our fingers crossed.

So we are going to tell the story of El Chapo from a zero to his first million and then on to a billion. And then we're going to judge him.

Although, to be honest, I think there's going to be pretty clear-cut. He's obviously a baddie.
Spoiler alert, he's a bad one.

He was born in 1957 in the tiny town of Latuna in the Sierra Madre mountain range in the northwestern Mexican state of Sinaloa.

So he's one of seven siblings born to a couple called Emilio and Maria who earned their living from farming.

And I'm going to put that in quotes because his father was officially a cattle rancher, but almost certainly, as many people were in that region, was really an opium poppy farmer.

And similar to in Asia, they've got that place called the Golden Triangle. They've got a Golden Triangle in Mexico where the states of Sinaloa, Durango, and Chihuahua meet.

It borders New Mexico and Texas in the US, which is geographically very important.

It's very important, especially if you're a drug smuggler, because even for decades before El Chapel was born, these drug cartels were growing marijuana and opium poppies because it being mountainous it's very inaccessible and therefore had very few police or armies around and it's got formed this area this golden triangle established by pharmacists in the 1910s as early as that because they used to carry tins of raw opium across the borders to southern california so by the time el chapo was born right drug trafficking is essentially well established in his neighborhood i mean it's virtually a state-controlled industry so he's really born at the right time in the right place.

One of the points he'll make later on into to this day is that if he wanted to make a decent living, there weren't that many options.

No, I mean, it's a tough, difficult place to be born and to grow up. He starts exhibiting an enterprising spirit from a young age.

He would support his family by selling oranges to peasant farmers for a few pesos. And he loved...
flaunting money, right?

So his younger sister Bernada says that he would wear fake gold jewelry when visiting family members.

And his mum has a great story about him where she says he used to pretend that little coloured bits of paper was money and then he would count them up into little piles and tell her to take care of it for him.

Yeah, and then recount them. And there's so much of this story has been captured in movies, hasn't it?

There's a kind of there that some of this feels like cliché, but actually it's almost impossible to imagine some of this stuff is real because it's been kind of fictionalized so often. Exactly.

I mean, if you've watched Narcos Mexico and Netflix, El Chapo features pretty heavily in it. Yeah.
Well, El Chapo's father was said to be violent. He was certainly lazy, a drinker, and a womaniser.

And El Shapo got a bit of both of his parents. I mean, so he's a womaniser, much like his dad, but he works hard like his mother.
And he's remained a bit of a mother's boy all throughout his life.

I mean, he caused their relationship perfect. She remains loyal to him to this day, even though he's been convicted.
She's still trying to visit him in prison. Yeah, it's sweet.

If you could put it that way, sure.

Well, he left school at around the age of eight. Apparently, not uncommon to to this day in that area.

He'd only have occasional lessons from travelling teachers anyway. And some people say he's actually functionally illiterate.

But, you know, there are examples here and there of, you know, rudimentary handwriting. Yeah.
So he starts his career, as many did in that area, picking marijuana. It paid around 2,000 pesos a day.

Quick conversion, that's about £11.50, about £9 a day, which is roughly four times more than you get when you harvest sugarcane, which is legal.

So really, the illegitimate drug trade paid off far more than the legit trade in that region, anyway. Yeah, so he worked on his father's farm at first, but it soon became fed up working for him.

He had a pretty fractious relationship with his dad, by all accounts. And by the age of 15, he was out of the family home cultivating weed for himself.

And in a sense, you know, this is his first business, if you want to put it that way. Yeah, so it's 1972.
So, at that time, there was massive demand in the US for marijuana. It was

the hippie boom in the US. Everyone was smoking weed there.
And also, there was a closure of this pipeline of drugs from Europe, which again was immortalized in the film The French Connection.

Exactly. And it's called the French Connection because that's when heroin is smuggled from Indochina through Turkey to France and then via there to North America.

And around this time, the diminutive Mr. Guzman gets the name El Chapo, slang for shorty.
He's five foot six, as we've already said.

But while he's growing up, there's also the backdrop of America and its war on drugs, which is going on.

So obviously the American authorities have cotton onto the fact that all these illegal drugs are coming in over the border from Mexico and in 69 Nixon who's then president orders searches of every single vehicle entering from Mexico into the US and in 71 he declares an official war on drugs and creates a new agency in 73, the DEA, the Drug Enforcement Administration.

In response to US pressure, the Mexican state begins to assert it itself in the mountains. Right.

So it flies in helicopters, it sprays drug crops of kind of aerial defoliation spray, which kills them effectively. And even it starts descending on villages.

So in one night in 1975, the army helicopters get to a village very close to El Chapo's and it attacks women and opens fire on preteen boys when they can't even find any men involved directly in the drug trafficking business.

And El Chapo had his own run-ins with the Mexican soldiers, right? So his sister claims they once beat him in front of his own mother.

Yeah, so the young El Chapo decides to leave Latuna to seek his fortune higher up the drug food chain.

So he moves to a small town about 70 miles, long journey through the mountains, he's leaving it behind, and here he hooks up with five brothers, the Beltrain Liver brothers.

They're young, they're ambitious drug traders, and they become his collaborators in the following decades. Now, some people say that El Chapo and the brothers may have worked as hitmen.

It's hard to verify, but they remain at this stage pretty low-level criminals. Right.
So El Chappell kind of sets down roots. He meets and marries his first wife here in 1977.

They'll have three kids, his first three of at least 12 kids in total.

And his wife is also the first of at least three wives, probably four, each of whom he marries without divorcing the last one, which is kind of a interesting way of going about it.

But in his early 20s, he starts getting itchy feet again. He moves to the state.
capital, which is a big city. And this is where he'll make his first big moves.

And in all our billionaires, there are some key meetings with people we've talked about in other ones.

And one of the key people he meets in the late 1970s is a guy called Hector Palmer, also known as El Guero. There's a lot of L's in this.
There's the blue one,

this means the fair-haired one, hitman turned cocaine smuggler working for the Guadalajara cartel.

So this cartel ultimately ladders up into a former cop, a guy called Miguel Angel Felix Gallardo. And this guy is the so-called boss of bosses.
And he he was doing something different here.

He was professionalizing the criminal drugs trade and becoming in the process its most powerful figure, the kingpin, if you like.

So he was using things like safe houses, secret ranches, hidden phone lines. You know, he was creating new smuggling routes.

He was really kind of making the drug trade a lot more, I guess, formalized. Yeah,

more professional. And El Chapo works under him.
And at this point, he's moving from the fringes, the low levels, right into the center of organized crime, which is getting more organised.

And El Chappell was in charge of planning and executing trafficking routes from Mexico into the US. And it's here that we start hearing about his lust for blood, to put it bluntly.

There are reports that if the smugglers' shipments weren't on time, he would just shoot them in the head.

And this is new territory, I think, in this series, because this is the first time we've actually talked about our billions directly killing people.

We've done Victor Boot, who was an arms dealer and scored very highly

on the villainy, but this is a different order oh definitely and i think that you know as we'll see in his story that kind of lust for blood it doesn't go away it just gets even worse when the stakes get higher it gets incredibly bloody so in 1984 the mexican military in sinaloa sort of launch an increased crackdown so they up sticks and moved to the central mexican region of zacatecas which is that becomes the new center of the marijuana trade and here he meets another el he meets el azul the blue one who's from a village that is very near El Chapel.

So they've got that in common. And this guy has a 500-acre marijuana farm.
He was involved in the heroin trade and he kind of takes El Chapel under his wing.

And so the guy finds a business mentor, if you want to put it that way. Exactly.

And there's something, there's an interesting shift going on in the drugs trade at the demand end of it, because in the late 70s, which was a marijuana demand in the US, it's gone into the kind of Studio 54 disco era and cocaine overtakes weed as the drug of choice, if you like, for young Americans.

I actually have an amazing fact about Studio 54 that just illustrates how much cocaine just took over in New York.

So apparently, at the end of every night, Studio 54 dropped a prop in the club of a moon with a spoonful of coke going up its nose. Really? As a kind of ta-da moment.

But I think that just goes to show, you know, this is the moment where weed in the hippie era kind of crossed over into the kind of disco-loving kind of Coke Field Studio 54 party era.

But the interesting thing about cocaine is it's not produced in Mexico. So Mexico assumes a different role in the food chain, if you like, here.

It's produced in Colombia, and it was previously shipped into the US via the Caribbean or just straight up smuggled on commercial flights. But those routes were being shut down.

And the increased demand for more and more Coke meant that it was getting harder to smuggle. So they needed a new route in.

And the best way to do that is on a land route, which is so the Mexican border presents itself as the perfect place to get drugs into the US.

And there were already, as we know, marijuana and heroin had been crossing, and this becomes the key route for cocaine as well.

So, Colombian gangsters start flying drugs into Mexico, and their new partners, the Mexican gangs, are being paid to transport it across the border to operatives in the US.

And this became known as the Mexican trampoline because bounced it into the US. Yeah, exactly.

And the thing about cocaine, and we talk about this as a commodity, as a product, it's easier to smuggle than weed. It doesn't smell like like weed does.
It is more valuable in smaller quantities.

And also, the markup on it, the profit margin is vast because it gets made by the kilo and sold by the gram.

And I was trying to think with my business head on whether I could think of anything which has a higher profit margin than this.

And actually, I came up with coffee because coffee, actually, if you, there's a reason there's so many coffee bars, because the margin, the markup on that is enormous.

But as my friend, who I called and said, listen, I'm doing a program at drugs.

What's the profit margin of this compared to to coffee?

He said, the problem with coffee is you have to have, if you're Starbucks, you have to have the rent, the staff, you know, all of that kind of stuff.

Whereas cocaine, you don't have any of those issues to deal with. Oh, interesting.
I mean, both coffee and cocaine grown in Colombia. Exactly.
They've got some cash crops out there.

And so the trickle of cocaine from Mexico into the US becomes a flood. From 1960 to 1970, the authorities seized less than 30 kilos of cocaine.
In 1985 alone, they seized five tons.

And by 1989, it was 15 tons. And that's only what they seed.
There's a lot of looking the other way that goes on, as we'll see. At this point, the DEA start kind of becoming a real force, right?

And it's due to a guy called Kiki Kamarena.

You might know him if you've watched Narcos Mexico. He plays a really big part in the show.
So he's Mexican-born, but an American citizen, and he's a DEA agent.

And in 1984, he gives Mexican law enforcement a huge tip-off. They raid a massive 2,500-acre weed plantation, which is run by the Guadalajara Cartel.

And it's thought it was generating an estimated $8 billion a year in revenue. So the cartels sought revenge on Kiki Camarena.

And in 85, Camarena and his pilot are kidnapped by the corrupt Mexican officials who are in the boss's pay. And a month later, their bodies are found.
And this is the tough part.

I mean, he had been horrifically tortured for two days. It's said there was a doctor present to keep him conscious and alive in order to prolong his suffering.

This is a very, very dirty business, isn't it? And Camarena basically becomes a bit of a hero, like a martyr, and he helps legitimize the DEA as a serious agency.

And because they've done this to a DEA agent, the U.S. and Mexican law enforcement have to respond, right? So they hunt down the leaders of the Guadalajara Catal.

Yeah, and the boss, Gallardo, goes into hiding. He uses political connections to protect him and helps him to evade authorities for another four years.

But because there's so much heat on them, they can't really control the Mexican drugs trade like they used to.

So he holds a meeting with all the biggest drug traffickers, and this is going to be the making of El Chapel, right? Gallardo says, let's split Mexico into separate narco-states.

We'll call them plazas.

I'll be the top guy, but all the plazas will have your own independence. So it gives them all their little fiefdoms.

And someone has wittily suggested this is actually quite a good business practice. It's a bit like what Bernard Arnaud does with LVMH,

one of the richest men in the world. He basically makes them all entrepreneurial little kind of

empires within an empire. Right.
So they all feel motivated to keep the profits rolling in.

So all these different gangs are given their own kind of... LVMH sub-brad, I mean, their own different drugs plaza.
And this pushes the drugs business back into the shadows.

It keeps the eyes of the authorities away. And crucially for our chapel, this is a big opportunity.
Yeah, because he then can become sort of a head honcho of his own little cartel.

So, he, alongside Hector Palmer, he becomes leader of the newly formed Sinaloa cartel. It's not all smooth sailing because, you know, he's entering what you could call a competitive market.
So,

when they started, they only had 25 guys in their employment, not a lot. Yeah, and there were lots of rival cartels to compete with.

You got the Tijuana cartel who were going to come on to become Sinaloa's biggest rival.

And it's impossible to say how much El Chapel was earning at this point, but you know, it's fair to conclude that after he sets up his own cartel and starts controlling the movement of drugs and benefits from those profit margins, he would have easily been a millionaire.

I mean, that's one of the whole things.

You know, we like to try and be as factual as we can, but like I say, these guys don't file annual reports or 10K filings or whatever with the Securities and Exchange Commission.

But I think it's fair to say when you're sitting on something which is moving that much and is that profitable, yes, he's easily a millionaire by then.

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And he's also coming up with innovative ways of moving the product in business speak. He was a real innovator.

And in fact, some of it was by necessity because the Sinaloa cartel hasn't got the best geographical place for drug smuggling.

It was just a small section of the U.S.-Mexico border, so you didn't have a very long border, so they had to make what they had work better.

Yeah, there were only two lanes of traffic that went from their area across into the US, so not exactly prime smuggling territory.

And this is where he comes up with his, perhaps the invention he's the most famous for. Tunnels, yep.
Tunnels will become very important to our chapel. So This is how the first tunnel works, right?

And this tunnel is going to bring in a ton of money.

He sets up in the border town between the US and Mexico, a place called Agua Prieta, and he sends a lawyer to work there, who then buys a plot of land just outside town, above market value in cash.

So, you know, nobody starts asking questions. And he builds a ranch house there.
Meanwhile, across the border in the US, in the town of Douglas, Arizona, he buys a construction firm

called Douglas Readymix, which had a warehouse about 200 feet north of his new home. And then he hires an architect to design a tunnel to build between these two locations.

And this is the first cross-border narco tunnel in history.

Yeah and apparently a tap installed in the ranch house is actually a secret lever which has a hydraulic system, opens a hidden trap door underneath a pool table which leads directly to the tunnel.

And this tunnel is pretty big. I mean it's five foot high by four feet.

It had sections to store up to five tons of cocaine and it runs directly beneath the fortifications along the US-Mexico border and emerges into Tada, the Douglas, Arizona warehouse.

Yeah, and before long, the tunnel became the primary route for moving cocaine into the US. And federal agents have called these tunnels super tunnels because they have everything.

They have electric lights, they have ventilation, some of them even had elevators.

So when the cocaine gets across the border and into the warehouse in Arizona, it then gets loaded into cars and trucks and driven out to Phoenix and whatever, where it was cut up and distributed across the USA.

So they've kind of taken the border out of the equation here. They don't need to worry about it.

And in fact, estimates say that between 88 and 91 El Chapel smuggles 35 tons of cocaine into Arizona alone. But it wasn't just the tunnel.
That wasn't his only,

that wasn't the only means of transport. On the Mexican side, the Sinloa cartel built their own airstrip about 100 miles south of the border.

And that's where the Colombians would fly in with their planes filled with cocaine. And meanwhile, he's trying to give himself a bit of room to maneuver, right?

So he's cultivating these relationships with corrupt Mexican security officials. He's paying them off to make sure they turn a blind eye to all the smuggling.

And this is where the profit margins in drugs come into play because between where it's produced and where it's, you know, there's a lot of margin in there.

And you need that for the dealers and the payoffs and the security and the weapons.

So it's a good job there are such big profit margins because everyone wants to take a slice, including corrupt officials and police.

And don't forget the tunnels. But because of them, he could move drugs into the US in bigger quantities, faster and cheaper.

And then in 1990, he meets a 27-year-old Colombian, a drug trafficker known as Chopita or Lollipop, and he makes an even better deal to import all this cocaine.

Yeah, because Mexican smugglers had been charging, where this is written down, I don't know, but have been charging 37% for moving Colombian cocaine.

But El Chapo wants 40%, but he says he can move it faster and safer. So 3% difference.
It's quite a lot if you're talking in the millions. I suppose it is.
I mean, it's a bit like anything.

If you can do it in bulk, you get get a slightly better deal. And El Chapo earned those margins, right? So he demonstrated he could move 4,000 kilos in a week while other traffickers took a month.

So he got a new nickname, El Rapido.

El Rapido, El Rapido. And actually, when Lollipop spoke as a witness at El Chapo's trial in 2018, he revealed astonishing profits.

He claimed that between 1990 and 1996, El Chapo made as much as $640 million just from his cocaine, Lollipop's cocaine. And that's only part of the business empire, right?

So El Chapo is well on his way to becoming a billionaire.

And by 1990, as well as the tunnel, which he became famous for, the cartel also was using things like ships, fishing vessels, speedboats, even submarines. This is a lot of drugs.

I mean, according to one former federal prosecutor, El Chappell was the go-to guy. When the U.S.
started shutting down ports of entry in the Atlantic and the Pacific, drugs had to go through Mexico.

And if it went through Mexico, it had to go through El Chapo. Yeah and by this point the boss of bosses Mr.
Gallardo has been arrested so El Chapo is now fully in control.

And he makes himself an even better deal.

So rather than being paid by the Colombians to smuggle the drugs he buys their cocaine and sells it on in the US himself and keeps a much bigger slice of the profits.

So he's not just a delivery guy now. He's an actual trader of it.
He's buying and selling himself.

It's kind of slightly reminiscent of, you know, Amazon creating its own products based on the products that are selling well on Amazon. Yes, I suppose that's true.

And like I say, so talking about the margins again, rough numbers, we think a kilo of cocaine, which was selling for £3,000, about £2,500 in Colombia, would be worth $10,000 in Mexico and then $30,000 in the US.

And once you cut it up and sell it by the gram, it could make over 100,000. So you're talking a markup of 3,000 to 100,000 per kilo, which is, you know, huge profit margin.

And that means a lot of money is coming in. So he's got to find ways to launder that money.

And we should just sort of probably take a moment to discuss what we mean by money laundering, because, you know, if you take sackfuls of money into the local bank and start depositing it, people's eyebrows get raised pretty quickly.

And so much of this reminds me of Breaking Bad as well, doesn't it? You'll remember that Walter White in Breaking Bad buys a car wash, which you have to pay in cash.

So all these people are paying cash. There's cash going going over the till, and then you just filter that cash bit by bit into the legal proceeds.

And that, you know, you deposit that money in the local bank, and it seems much more legitimate. So, that's one way of money laundering.

So, El Chapel was using this method called structuring, which means depositing amounts smaller than 10 grand to avoid, you know, the bank tellers having to report it to the authorities.

Anyway, the money's rolling in, and he starts to enjoy spending it. So, his former pilot who testified during his trial says that when he first met Mr.
Guzman in 1986, he didn't have a jet.

In the 90s, he already had four jets. He had houses on every beach.
He had a ranch in every state. And he bought loyalty.
His henchmen were given gifts like diamond-studded Rolexes, expensive cars.

He paid close associates like Martinez who testified against him a million dollars in cash every December. Can you imagine a million dollars in cash?

This reminds me a little bit of the scenes in Scarface when he starts spending all his money. And in fact,

there's a scene in Scarface where you see Al Pacino with a little zoo yeah I mean this is his house in Acapulco which he built for $10 million

he had a zoo with a little train riding around that you could see the lions and tigers and panthers I mean it's wild and and and funnily enough it's quite interesting to know how he's treated by his own people and he sort of has a bit of a reputation as a Robin Hood figure so taking from the rich the arrogant gringos and giving a living to the hard-working Latino poor, which is

an interesting way of looking at it. It's also a good way to buy yourself a bit of protection and breathing room, right? Because no one wants to daub in the guy who's seen as the Robin Hood.

Yeah, but I mean, you know, we have a category for philanthropy, and I'm not sure whether that counts as philanthropy because journalists who've looked into this have struggled to identify anything like a school or a hospital or anything like that funded by him.

So, it seems more like he was big into the business of marketing himself as much as anything else. So, he's making tons of money and whenever money is being made, there is competition to be had.

And at this point,

the war between the cartels begins to get really bloody.

So after Gallado, the boss of bosses, is arrested in 89, this turf war breaks out between the Sinaloa cartel and their rivals, the Tijuana cartel.

The Tijuana cartel actually behead the wife of El Chapo's partner, Hector Palmer, and send him her head in a box. Yeah, oh, it's pretty grim stuff.
And they do not stop there.

So weeks later, they actually murder Hector Palmer's children, a five-year-old son, four-year-old daughter.

Well, Sinaloa cartel hits back. The tit-for-tat violence over the next four years sees a series of assassinations, car bombings.
At one point, El Chapo's men indiscriminately open fire in a discotech.

And the thing about this tit-for-tat war is that unfortunately, it doesn't end until the big boss is killed. But when this turf war broke out, none of the big bosses ever got killed.

But they did make a serious error while attempting to assassinate El Chapo. And it's this error in 1993 that completely changes the game for them.

Yeah, one of the most senior priests in the Mexican Catholic Church, a cardinal, is shot dead in the airport.

And it's thought that the assassins thought the cardinal who was getting into this fancy car was, in fact, El Chapo. And obviously the fallout from this murder is huge.
There's a huge political

uproar because the Mexican government is finally forced to crack down on the the drug gangs in a big way to demonstrate to the public they're doing something about this.

And so they put a big bounty on his head, his face is in the newspapers, it's on TV screens, he's becoming famous now around the world.

And he's no longer anonymous, so he flees Mexico, but within weeks is arrested in Guatemala and extradited back to Mexico.

And there he is sentenced to 20 years on charges of conspiracy, drug trafficking and bribery. I think it's so interesting this.

It says something about Mexico and the role of the Catholic Church in Mexico that all this was going on. You kill a cardinal, that's not okay.
Yeah, kill a cardinal, we're coming after you.

But I actually think El Chapel kind of viewed the stint behind bars as a sort of sabbatical from work. Yeah, because as we know, with his tunnelling expertise, he's a master.

He could probably have got out of here at any time he wanted. But because the heat is on at the moment and everything is in the public eye, this is quite a good place to lay low for a bit.

Yeah, and Martinez and Hector Palmer still keep running things on the outside. You know, he's got money to bribe the guards, so he's got regular visits from sex workers.

He's even got deliveries of Viagra coming in. And so if you're a notorious criminal, you can actually live a pretty good life inside.

But while he is inside, the US authorities, and that's the one he fears the most, they're starting to put together a case against him.

And in 1995, he's indicted in San Diego for money laundering and conspiracy to import cocaine.

So that same year, Al Chapo is transferred to a maximum security prison in Mexico, where he still enjoys privileges. He pays a cook $1,500 a month to prepare lobster for him.

He's paying money to everyone to turn a blind eye. But 2000 brings a very different kind of turning point.
Yeah, because Mexico elects Vicente Fox

for the first time.

I remember this happening actually in 2000 because a lot of people said it was amazing because it was the first time in 70 years that a party that wasn't the pre, the Institutional Revolutionary Party, who had been in power for 70 years up to that point, there was actually a calm transfer of power, which no one was expecting, actually.

And Fox has cast himself as this anti-corruption reformer. So El Chapo starts getting a bit nervous, right?

Maybe this guy is going to extradite him to the US, and that would be the worst thing possible for him. So at this point, he decides escape is the right option.

So in January 2001, he hides in the laundry cart.

But people say he could have walked out the door because he was helped by so many corrupt officials, some of whom are eventually imprisoned for their role in this escape.

And he becomes Mexico's most wanted man. But, you you know, you can use this term loosely because by all accounts, he was able to just kind of walk around at will.

Apparently, he visited his mum back in Latuna. Well, I think that people are so terrified of him.
Who's going to go and turn him in? I mean, you know,

I hope he's not listening right now because, you know, I don't fancy being tortured and killed myself. I mean, he even feels free enough to marry an 18-year-old beauty queen in a lavish ceremony.

And he just walks into things like restaurants with a posse of bodyguards. He then takes everyone's mobile phone off them.
I'd I'd hand mine over it in a heartbeat.

So he could sit down, eat his favourite meal without being tipped off to the authorities. And then on leaving, he gives everyone their phone back and pays for everyone's meal.

I still don't think I would have had a most relaxing evening meal there, would you? No, I think I would have excused myself to the bathroom and climbed out of the window. Yes.

So he's out and he's back in control of the Mexican drugstrain. And he's even expanding into other drugs too.

So in the noughties, crystal meth usage explodes in America and his two sons, Ovidio and Joaquin Jr., begin smuggling chemicals from Argentina to experiment with producing meth.

And DeVito will later again help his father keep up with the times, the changing tastes of the drug public.

He starts manufacturing cheap versions of fentanyl for the cartel to flood the American market. And again, the markup is wild.

So $800 of chemicals can be turned into fentanyl pearls or powder, and it could sell for as much as $640,000 on the market. That's an astonishing markup.

And I think it's kind of a moment moment to reflect on the fact that, you know,

we've said before you don't get rich without giving people what they need, want, or enjoy. I'm not sure which category fentanyl and cocaine falls into.

But the point is, there's enormous demand for this. This is the, you know, the U.S.
public is fueling this trade.

And it's thought that between 2006 to 2016, the money spent by Americans on cannabis, cocaine, heroin, and crystal meth was around $120 to $140 billion

a year. To compare that, the US spend on alcohol in 2017 was $158 billion.
So this is a massive market. Right, it's a huge industry and you know no tax,

no government's getting any money off it. It's all underground so there's no regulation and El Chapel becomes the biggest player in essentially the biggest black market sector going.

But the violence continues and is getting more intense and actually the president Vicente Fonx, his new regime, has not stemmed the bloodshed. And so we have a new president of Mexico.

He launches Mexico's own war on drugs, sends 6,500 troops into his own home state.

And the cost of the drug war to Mexico is huge. So the government is blowing $54 billion on security and defense.
And it's done so since 2007.

And critics say this influx of cash has created corruption on every level. And it's statistics like this that kind of inform the debate about legalization sometimes.

saying if you did legalize it, you could tax it, you could regulate it.

The cost has also been a human one, right? So since 2007, around 200,000 people have been murdered in Mexico. And, you know, El Chappell is not immune to this tragedy either.

So he fell out with the Beltran Labour brothers who thought that he was betraying them. So they came after his son, Edgar.

Yeah, he was gunned down outside a shopping mall a month after being released from prison himself. But despite all the deaths, despite all the bloodshed, the money is still rolling in.

So by 2009, it's thought that Mexico makes more money moving drugs than exporting oil, which is its biggest legitimate foreign currency earner. And this is recognized by the folks at Forbes

who compile the rich list. And

they put El Chapo onto his list controversially for the first time that year. They estimate his wealth in 2009 to be $1 billion.

That put him at number 701 on their list of the world's richest people, and according to the DEA, he becomes the leading drug trafficker of all time.

He's said to have imported more drugs into America than anyone else. And so, it's official in 2009, El Chapo is a billionaire.

And I understand there were baseball hats with like 701 written on it to celebrate the fact that he came in at 701 on the Forbes rich list. So, he's a celebrity.

In many ways, he's a kind of gruesome celebrity. He is, and you know, he's gotten rich by cutting a trail of murder and devastation and you know, probably probably addiction.
Yeah.

His biggest fear is the US. Those are the authorities he fears the most.
And in 2011, after Osama bin Laden died, he becomes the USA's most wanted person. Right.

$5 million for valuable information leading to his capture. That's a lot of money on the table.

And when he is eventually tried in the US, El Chapo claims he paid a $100 million bribe to the new president, President Nieto, when he took office during this period. Allegations that Mr.

Nieto strenuously denies. Still, it's going to take another three years until El Chapo is recaptured.
And in 2014, he's arrested in Sinaloa by the Mexican Navy in collaboration with the DEA.

And he's returned back to his old home into the Altiplano penitentiary and put into solitary confinement while the US continues to build its case and pushes for extradition.

So he hatches, and this is the part that is the truly crazy bit about this story. He hatches his most audacious plan for escape.
In 2015, I'm just like setting it up in my head here.

He walks over to his little cell. He kind of like moves behind this little partition wall that separates the security camera from the shower bit.

And then he just disappears. Yeah, he doesn't appear for 25 minutes.
Guards go to check on him. They discover he's escaped through.
Guess what? It's a tunnel. Yes.

The entrance of the tunnel is a one and a half foot gap in the shower floor. And beneath that, there's a 32 foot ladder into a tunnel which is a mile long.

It's only just a little bit taller than our chapel himself, but you know, it's got lights, it's got a ventilation system.

It's even got a motorbike on a little rail to quickly transport him so he can just sit on the motorbike and zoom off.

How do you build a one-mile tunnel and a 32-foot hole right down without everyone in the prison knowing about it?

So apparently the prisoners in the jail had complained about all this racket of the tunnel being built to prison officials, but they were all being paid off to look the other way.

I can just imagine the guards going, what, I can't hear anything, what, what, what?

Something's wrong with your hearing, mate.

It strains credulity at this point, which is in a way, I think, why we're so fascinated by these stories.

And of course, his Robin Hood image, it's a bit like, you know, getting away from the Sheriff of Nottingham again. It enhances that whole image he's got.

That story of the prison escape alone, I think that was what made him world famous.

Yeah, and he was sometimes called a sort of narco-saint, sort of a folk hero rather than the sort of brutal criminal that we know he is.

And we'll have to say, you know, his criminal enterprises did provide money for a lot of the people in these remote areas. You know, they make a living producing poppies and marijuana for his cartel.

And bizarrely, in an interview that he conducted with Sean Benn for some reason while he was on the lamb after this motorcycle escape that's what his defense was for getting into the drug trade there's no other job to do when you're born into a position like I was in the middle of nowhere with no money this is what I had to do to stay alive.

Yeah, and that interview in Rolling Stone was very controversial. I saw Marco Rubio was in the presidential race.
He said, so you might think this kind of thing sells magazines, whatever.

I find it grotesque, the fact that they did this interview. And also, if you can still watch it on Rolling Stone, it's a very odd interview.

I highly recommend looking it up.

So he's on the run. He's possibly the most famous fugitive anywhere in the world.
He's appearing in Rolling Stone magazine. But in January 2016, the Mexican Marines, with help from the U.S.

Marshal Service and the DEA, they recapture him in a violent standoff during a raid at a roadside motel back in Siloa, back in his hometown,

which left five people dead. And a year later, Mexico finally extradites El Chapo to the U.S.

and he faces 11 counts of of drug trafficking and is locked up in a high-security prison in New York, presumably away from the nearest tunnel.

Yeah, and as they were picking a jury to try him, some jurors were excused because they were, I think, quite understandably afraid. I mean, you know, would you want to be on that jury?

Oh, absolutely not. I was like, I'm burning every single piece of correspondence that has ever asked me to be on this jury.

Yeah, well, the lawyers start making their opening statements in November 2018. The trial gets underway.

And when people start testifying, this is when people really start to see the measure of this man because the stuff that people have to say about El Chapel is just grim.

Yeah, his bodyguard tells the court he personally witnessed El Chapo brutally beat and torture three members of a rival drug cartel before murdering them.

Another witness said that El Chapel buried a man alive. Another said a rival drug lord who refused to shake El Chapo's hand paid with his life for that insult.

And, you know, the court papers also accused him of drugging and raping girls who were as young as 13. Apparently, he called them his vitamins.
Gross.

Anyway, he is found guilty of 10 counts of drug trafficking at sentencing later that year. He's given life plus 30 years.

And he's also ordered to pay back over $12 billion, which the prosecutors say he has earned from his criminal activity. So we've got a pretty precise number there.

The prosecutors have told us exactly how much money they think he made. Yep.

But it doesn't put an end to the drug war. So when he's convicted, that year is the most bloody yet in Mexico.
It launches this latest phase of the so-called war on drugs.

There were 33,341 killings, which was 33% more than 2017.

So he may be gone, he may be banged up, but the violence and the mayhem continues. I mean, in many ways, this is going to be one of the easiest things we've had to judge.
Exactly.

So, well, let's judge El Chapo.

We always start with wealth. This one is actually pretty hard to pin down.
The U.S.

prosecutors reckon it was $12 billion, but like I say, he's not the kind of thing that you can look up in the annual report.

But if you go by Forbes' list, right, 701 is not particularly high up in the list of billionaires. So in drug terms, he's a kingpin.
In the world of billionaires, he's kind of small fry.

On the other hand, he does wear his wealth very extravagantly. I mean, he's not sending off drug traffickers into space, but you know, he did buy a zoo.

Yeah, the thing about the zoo and having a ranch in every state and having four aeroplanes, I secretly suspect he's got more money than Forbes actually estimated, although things are a bit cheaper in Mexico.

So yeah, I mean, he wears it well. He wears it, I mean, when it comes to ostentatious displays of wealth, he's every bit the bling drug dealer.
Oh, yeah.

I actually read something somewhere that said that he had a pistol that was encrusted with diamonds in his initials. Yeah, I can well believe that.

Okay, for wealth, I'm going to give him a four.

Well, I mean, the diamond pistol. Diamond pistol.
I think

six out of ten for me. Okay, four for me, six for you.

Rags to riches. I mean, it's quite a journey.
And it's a well-trodden one in Mexico.

Coming from what I assume is a very poor, underdeveloped village in a mountain range in the middle of nowhere in Mexico to, you know, federal prison. I mean, it's a stuff of biopics, really.

Yeah, it's a rather tragic kind of ragster riches story in a way, isn't it? It's not an aspirational one. It's almost the opposite of that.

I'm sure at its high points, he must have felt on top of the world. Yeah.
No one forced him to become the most wanted person in the world, right?

But the point is that if you wanted to make money, there were very few routes available for you to do that in Mexico. Hmm.

I think I would give him, and this is not to condone the way he made his money. I would give him an 8 out of 10.
Okay.

I'll give him an 8 as well.

So he's got a great story, but what about the villainy aspect? This is where we have to compare notes with our previous billionaires, right? So we gave Victor Boot a 10 on villainy.

And we should have probably given him a 9 because we knew El Chapo was coming up. So if, I mean, can we go for 11? Can we dial it up to 11 spinal tap style?

I think spinal tap style, we'll have to give him an 11 all for 11. I mean,

there's so many shocking accounts of his violence. You know, a former weapons smuggler said he had a murder room in his mansion on the US border.

The room had white tiles, was soundproof, so no noise could come out, a drain on the floor to clean up after slayings. In that house, no one comes out.
And this is just gruesome. Yeah.

You know, Victor Boot sold weapons to warlords and dictators that probably...

I don't know, killed hundreds of thousands of people.

But as far as we know, he never directly killed anyone right so yeah I mean it's an 11 probably worth making the point as well is that you know the people who made him rich ultimately are the people who took the drugs that he exported so you know perhaps we should not be able to sort of wash our hands of his villainy in some ways oh definitely I think it says a lot that the illegal drugs market in America is almost as much as a market for legal, legitimate alcohol.

I mean, you know, like you say, a lot of the people in our podcast got rich by giving people what they wanted. Yeah.

But having said that, the drugs that he was selling, especially fentanyl, caused a lot of damage and is still causing a lot of damage in the U.S. You know, fentanyl deaths are soaring.

You know, in 2019, it accounted for 51% of overdose deaths. And then by 2021, it's 66%.

Yeah. So in many ways, some of his customers are also his victims.
Exactly. And don't forget, fentanyl is up to 50 times stronger than heroin.
So it's addictive stuff. Yeah.

So sorry, Victor, we're demoting you to a nine. And El Chapo, you're getting an 11, spinal tap style.
Yeah.

Let's come to the category that might, well, I mean, El Chappell would probably like to think that this rehabilitates his image, but the philanthropy he did, what did he actually do?

Well, we know that he dished out money left, right, and center. He was a folk hero who was seen to give employment to people.

He had this Robin Hood kind of image, but no one's actually been able to find any kind of school or hospital or anything with el chapo's name on it yeah and actually the mayor of where el chapo was born told journalists that he couldn't see a single building producing jobs a single piece of public works a soccer field a sewer a school etc not a single one that you can say was built by drug traffickers or their money so that's pretty damning okay so if if philanthropy means the love of humans want and death and destruction is probably you know what he traded in yeah i mean he himself claims to have killed over over 2 000 people there's a lot of people who have to have killed i would give him a zero i would say that given how many people have died either violently through the trade or

in overdoses or in pitch gun battles or what have you um i think there's a strong case that he comes in with a negative number for philanthropy i don't know if i can do negatives on

i'm going to give him minus the scale is the scale is expanding the scale is expanding um yeah i'm going to give him minus 10. i mean if our chap was listening and I hope he isn't.

Oh, God, don't say that.

I'm going to give him minus.

Oh, my God. I'm going to be looking over my shoulder on the way home from this.
Okay, now, power.

Interesting one.

If the difficulties in catching him and incarcerating him and keeping him there are anything to go by, he seemed to live almost above the law. He was able to buy off anyone he wanted.

I mean, he operated a criminal organization for decades that brought in in tons of money.

Whether or not it's true, the audaciousness in claiming you tried to bribe the Mexican president, that's a lot of power that you think you have.

Yeah, I think within Mexico, he was very feared and fear is a form of power. So I think he's quite a powerful person.
Yeah. At the height of his power, I would probably give him an eight out of ten.

Okay, I'm going to agree. Eight out of ten for power.

So then we come to legacy. So assuming El Chappell never leaves prison, will live out the rest of his life and die behind bars, how are we going to regard his legacy?

He's not the only famous drug dealer, is he? And you've had Pablo Escobar, there are other ones as well.

And you do suspect that it's a trade by its very nature, that once he's locked up, it continues. The trade goes on without him.
He's notorious and he became famous because he came out of the shadows.

But

the trade won't miss him, is that's what I'm saying. Yeah, someone else will always rise up to take his place, like he did with Gallado.
Yeah, exactly. So there'll always be somebody else.

I think one thing he has done, both him and Escobar have created a mythology around this, which has been richly mined for TV and film and what have you.

His legacy, in a way, is sustained through films and stereotypes of this kind of behavior. Right.

And even music, because in Mexico, you have these songs called narco corridos, which are songs celebrating and talking about these drug traffickers.

And, you know, Billboard magazine even has like a top 10 list of Narco Corridos written about old Chapo.

So his legacy is one of death and fear, you know, his notorious acts of escapology more than as much as anything else. His innovations to drug trafficking, maybe those things will be remembered.

So for legacy, I'm going to give him a six. Yeah, I'm going to give him a six.
I feel like he'll pass into pop culture mythology

more because of his escapes, but when you hear about what he actually did, I mean, oh.

Okay, so final judgment.

Good, billion.

This is so easy. Good, bad, or just another billionaire.
This is one bad hombre, isn't it? This is a very, very bad man. Okay,

so I hope you're not listening, but I'm afraid, El Chapo, we've judged you as a bad billionaire. Do they get podcasts in prison? I really hope not.

I hope to God they don't.

Who's our next billionaire? We've got a big hitter, not just in media, but also on the world stage. It's Rupert Murdoch.
Yeah, I really hope you've enjoyed this.

It's been absolutely fascinating to make. We've covered everything from luxury to rap to drugs to the legal arms trade.
There's something for everyone in this. I hope you enjoy it.

And if you do, tell a friend. Thanks for listening to Good Bad Billionaire.
This podcast is produced by Hannah Hufford and Mark Ward. James Cook is our editor, and it's a BBC audio production.

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