ENDURANCE OF CORRUPTION SHAKES GUATEMALA ANEW

Hopes for Anti-Drug Leader End With Arrest

Guatemala's top anti-drug cop laughed out loud last fall when U.S.
drug agents came to arrest him at a hotel near Dulles Airport on
cocaine smuggling charges.

"He thought it was a joke," recalled one of the U.S. Drug Enforcement
Administration agents, who used a phony invitation to a training
exercise to lure Adan Castillo to the United States last November.
"Well, for about 15 seconds. Then the reality hit."

And when reality hit in Guatemala, the sense of shock was just as profound.

Many had been counting on the new leader of Guatemala's equivalent of
the DEA to put an end to years of official collusion with drug
traffickers. Instead, the emerging details of the five-month U.S.-led
sting operation that netted Castillo and two of his deputies -- all
of whom have pleaded not guilty and now await trial in U.S. District
Court -- offer a vivid illustration of the pervasive corruption that
has undermined Guatemala's battle against narco-trafficking.

The stakes of that fight, meanwhile, are growing higher by the day.

As neighboring Mexico has strengthened its air and coastal patrols,
Guatemala has emerged as the favored route of traffickers exporting
cocaine from Colombia to the United States.

U.S. officials estimate that smugglers transport 200 to 300 metric
tons of Colombian cocaine annually to the United States through
Central America. Drug smugglers are attracted by the jungle in the
Peten, a virtually unpatrolled area about the size of Maryland along
Guatemala's northern border with Mexico. Over the past five years,
traffickers have been landing increasing numbers of aircraft stuffed
with cocaine into the Peten, then loading their contraband onto
vehicles for overland transport through Mexico.

Drug traffickers seeking to solidify their foothold in the Peten have
bought up large tracts of land and paid for medical care, power
generators and soccer teams in a bid to win the loyalty of
impoverished locals who were long neglected by the central government.

That effort has drawn alarmed comparisons to Colombia in the 1980s.
There, right-wing paramilitary squads and leftist guerrillas who
turned to cocaine trafficking established strongholds in an enormous
swath of territory that the Colombian government never fully controlled.

"We're not Colombia yet," Interior Minister Carlos Vielmann said
during a recent interview in Guatemala City. "But if things continue
like this, I think it's only a matter of time before we get to that situation."

While the United States has helped other Central American countries
combat drug trafficking, much aid to Guatemala is banned under a 1990
law passed in response to human rights abuses committed by its
military during a 36-year civil war that ended in 1996.

The corruption spawned during those decades may have peaked under
President Alfonso Portillo, who fled to Mexico after his four-year
term ended in January 2004. He has been charged with embezzling more
than $15 million, and at least 10 former officials from his
government, including his vice president, are in jail on corruption charges.

By contrast, the current president, Oscar Berger, and his top
ministers appear to have the confidence of U.S. officials in
Guatemala. But Michael O'Brien, DEA attache at the U.S. Embassy in
Guatemala City, said they amount to only a thin veneer of honest
leaders "presiding over what has historically been a cesspool of corruption."

Col. Mark Wilkins, the senior U.S. military official based in
Guatemala, agreed.

"It's hard to put your finger on any institution in the judicial,
legislative, executive branches or even private enterprise that
hasn't been deeply penetrated at some point over the past few years," he said.

Guatemalans have a saying about the bribe that drug traffickers are
rumored to offer newly hired top officials: "The $10,000 cannon shot
- -- who can resist it?"

Still, Adan Castillo seemed a safe bet. Over a long career in the
police force, Castillo had acquired a reputation as a family man who
liked to hold prayer sessions for officers who shared his evangelical
Christian faith. Fairly tall and thin, with delicate, birdlike
features, he struck Guatemalan officials and journalists alike as
unassuming, friendly and serious about his work.

Vielmann, the interior minister, said his first inkling that there
might be more to the picture came when Castillo visited him in his
spacious office shortly after his appointment. Sitting back on a blue
leather couch and sipping a cup of coffee, Castillo casually raised
the possibility of making a deal with one of the trafficking groups
operating in Guatemala, Vielmann recalled. In exchange for
information that would allow his agents to seize drugs from a rival
group, the unit would leave the first group alone. Castillo "was
careful," Vielmann said.

"He never said that he'd actually contacted any groups. He just put
it like, 'I've heard that they've done this in other countries,' "
Vielmann said.

Then, last summer, federal prosecutors allege, an informant told
officials at the DEA that a trafficker who was seeking to move large
quantities of cocaine through Guatemala had told him to approach
officers of the SAIA, the Spanish abbreviation for Castillo's agency.

The news was particularly troubling to U.S. authorities because the
SAIA had only recently been created to replace an earlier
drug-fighting unit deemed so riddled with corruption that it was
disbanded in 2002. The U.S. government had spent millions of dollars
on equipment and training for both units.

According to court documents, the informant's initial contact in the
SAIA was Rubilio Orlando Palacios, the young, burly head of security
at the bustling port of Santo Tomas, on Guatemala's Caribbean coast.

On Sept. 1, the documents allege, Orlando took the informant to the
entrance of a hotel in Guatemala City, where Castillo was waiting at
the wheel of a gray Ford Explorer. They clambered in, along with
Castillo's deputy, Jorge Aguilar Garcia. Inside the vehicle, Castillo
told the informant that he and Aguilar did not expect to remain in
their jobs much longer but that they would make the most of their
power while they were still in charge.

In a series of similar meetings with the informant, Castillo hammered
out the details of the first drug shipment, unaware that he was being
audio- and videotaped each time. According to court documents, the
plan was for the informant to arrange for two separate 2,000-kilogram
loads of cocaine to be transported by container to the port of Santo
Tomas. Orlando, who controlled which containers were searched, would
ensure their cargo was not found. This would be followed by a 300- to
500-kilogram shipment that Castillo could arrange for SAIA agents to
discover so that it would look like the unit was making meaningful seizures.

It is not clear from court documents how much money Castillo and the
others planned on receiving in return. At one point they allegedly
discussed charging the informant $200,000 for allowing cocaine
shipments into the port and $300,000 for a black-and-yellow SAIA
vehicle to guard the cocaine during transport from the port to the
Mexican border.

"Once you arrive to the town of Tecun Uman, we will disappear,"
Castillo allegedly said. On two occasions, the informant allegedly
paid Castillo $5,000 and then $10,000 in good-faith money.

The DEA, of course, derailed Castillo's alleged plans. Taking
advantage of Castillo's frequent complaints that the SAIA was not
receiving enough instruction in methods of drug interdiction, O'Brien
proposed that Aguilar and Orlando participate in an exercise at the
administration's facility at the U.S. Marine base in Quantico. The
topic was to be port security.

All three were arrested Nov. 15 before the purported training was due
to begin. The next day, Guatemalan officials searched Castillo's
office at SAIA headquarters in Guatemala City and announced that they
had found $22,000 and several packets of cocaine.

Guatemalan officials said they are now combating drug traffickers
with aggressive new initiatives. A bill that would criminalize
conspiracy to traffic drugs and close other loopholes in the legal
code has been introduced in the National Assembly. A team of about
800 Guatemalan troops, police officers and civilian officials also
recently established bases in the Peten and has started patrolling.

And once again the SAIA is being restructured, with members now
required to undergo frequent lie detector tests. On a recent morning,
about a dozen newly graduated cadets from the police academy crowded
around a metal table in a room at the SAIA's white stucco
headquarters to hand in release forms for their background checks.

"It's an opportunity to give the police a whole new image," said
William Estuardo Najabro Flores, 22, sounding a theme echoed by many
in the group. "Everyone in the country says the police are corrupt.
We want to show that's not the case."