United States General Accounting Office

GAO Report to Congressional Requesters

December 1994 DRUG CONTROL

U.S. Antidrug Efforts in

Peru’s Upper Huallaga

Valley

GAO/NSIAD-95-11

GAO United States

General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

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 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

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B-258650 

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 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.

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B-258650 

Figure 1: Map of Peru

Peru

Pacific Ocean

National Capital

Upper Huallaga Valley

Santa Lucia Base

Peru Police Base

Peru Naval Base

Ecuador Colombia

Brazil

Bolivia

Chile

Upper


Huallaga


Valley

Santa Lucia

Tingo Maria

Pucallpa

Lima

Note: Boundaries are not necessarily authoritative.

Page 3 GAO/NSIAD-95-11 Drug Control
B-258650 

Rationale for Building

the Santa Lucia Base

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.

Costs of the Santa

Lucia Base

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 (CORAH) 16.9

Law enforcement 6.4

Program development and support 4.6

Fixed-wing aircraft 11.5

Total $49.2

Construction Costs 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

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.

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B-258650 

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 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 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

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.

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B-258650 

Fixed-Wing Aircraft Costs 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

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

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.

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Move to Pucallpa 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.

Peru’s Support of Santa

Lucia

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.

2

DynCorp Aerospace, Inc., a private contractor, provides management, administrative, rotary-wing,

and maintenance services.

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B-258650 

Eliminating the Use of

INM-Owned Fixed-Wing

Aircraft to Support

Antidrug Operations

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 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

Page 8 GAO/NSIAD-95-11 Drug Control
B-258650 

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

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.

3

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

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B-258650 

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.

Scope and

Methodology

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.

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B-258650 

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.

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

(711086) Page 11 GAO/NSIAD-95-11 Drug Control
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