DRUGS STING PUT INNOCENT LIVES AT RISK

Murder Threat Failed To Halt Customs Operation

Senior customs officials approved a cocaine sting operation by a team of
elite drugs investigators despite warnings that arrests in this country
would lead to the murder of at least one hostage in South America.

A Guardian investigation has established that the operation, codenamed
Begonia, went ahead in the face of strong objections from experienced
investigators who refused to take part if there was any possibility that
innocent people would be killed.

In a document seen by the Guardian, one officer warned senior officials at
Britain's oldest and most powerful law enforcement agency that Customs' own
informant had provided a hostage to the drug suppliers to guarantee the
shipment. Pressing ahead with the operation, the officer warned, would
"ultimately bring disgrace" on Customs "and permanently cast doubts on our
fairness and honesty". He concluded: "I am reluctant to take any part in
this operation as I am unwilling to be party to murder of innocent people."

But concerns over the legality and morality of the sting from him and other
officers were apparently ignored and Begonia went ahead. The operation was
led by one of Customs' most senior and highly regarded officers who posed
as the head of a fictitious import company using the codename "Peter Hesketh".

Operation Begonia is one of several operations involving class A drugs
under investigation by West Midlands police, the Guardian has learned.
Customs is also the subject of two other police investigations which are
taking place amid concern over the conduct of prosecutions.

An inquiry by Scotland Yard concerns allegations surrounding the conduct of
a string of prosecutions for duty evasion. A third investigation by Thames
Valley police relates to separate allegations of corruption involving
Customs. No charges have yet been brought.

Two Colombians were entrapped in the Begonia sting in late 1993 and
convicted of smuggling ?37m of cocaine. They served prison sentences before
being deported to Colombia. Francisco Antonio Lopero-Soto, 37, was
sentenced to nine years. Gerardo Baron Borja, 49, received 11 years.
Defence lawyers claimed at their trial that associates of the two men had
been murdered after the seizures of the drugs. Death certificates of three
men murdered in Colombia were produced in court, but for legal reasons
these allegations were never investigated or fully explored.

An identical sting in 1991 raised similar concerns about the actions of
Customs.

At least one senior officer at the time urged his bosses to take high-level
legal advice and claimed that the "star" informant used to set up both
deals was acting as an agent provocateur. The informant, the officer
warned, was out of control and "running us", and had portrayed himself as
the buyer of the cocaine deal which would be financed solely by Customs

Under Home Office guidelines informants must never initiate drug deals
themselves and are meant to play only a minor role in an existing conspiracy.

In a document seen by the Guardian, the senior officer warned line managers
that as it was Customs actually buying the drugs and arranging the
importation into this country, it would only result in the arrest of
low-level intermediaries.

He advised that if the proposed $7m (?4.2m) sting went ahead, the seizure
should be made in South America, where there was more chance of arresting
senior cartel members.

Although this operation - known as Begonia 1 - fell through, the plan was
resurrected two years later and put into action using the same informant.

But when preparations for Begonia 2 went ahead, the same Customs
investigator refused to take part in the operation, and told his superiors
that the proposed sting would bring disgrace on Customs and severely damage
its reputation for fairness and honesty.

"You are well aware of my reservations about the conduct of this
operation," he wrote, adding: "It is inevitable that the defence and the
media will discover the truth of the matter."

The officer went on: "At the conclusion of the briefing on October 27 1993
you stated that the informant had provided a hostage to the supply
organisation in South America who would be killed if anything went wrong
with the importa tion. As we in the Division [Customs] together with the
informant are the importer and the only end-users of this cocaine, we
ultimately will be responsible for the death of this hostage and probably
his family as well."

He said: "I would like [an] assurance that the chief investigation officer
and crown counsel have been consulted as to their willingness to continue
with this operation in the light of this most recent revelation."

Sources say such a strongly worded memo to a senior line manager is highly
unusual in Customs. Senior managers accepted that the hostage remained at
risk, but nevertheless gave the operation the green light. A number of
concerned officers from the squad - nicknamed the Manchester A-Team -
refused to take part in the operation.

The suppliers were the Cali cartel, who controlled the global illegal
cocaine market. It is generally known that the relatives and associates of
minions involved in deals were seen as "guarantors", who would be killed if
the deal went wrong.

The Manchester A-Team put together plans to lure the Colombians into
Britain by offering a deal to import large amounts of cocaine.

Begonia 2 officers set up a false company and "borrowed" a bank. A former
bank manager turned customs officer slipped into his old role at the plush
offices of a NatWest branch in Manchester to help bamboozle the Colombian
drug dealers.

He had a set of bogus accounts for a fictitious import-export company
called Southern Latitude Holdings Ltd, showing millions of pounds going in
and out of the business and ?14m in assets. The company purported to have
warehouses all over the north, complete with polished brass nameplates in
lifts.

The Bank of England was persuaded to help this plan, agreeing to loan the
investigators ?1m in cash as "flash money" to impress the smugglers.
Bundles of high denomination notes were stuffed into safety deposit boxes
in the bank strongroom.

It was a high-risk strategy by the team leader "Peter Hesketh" who as well
as handling the informant, was also the pivotal undercover officer.

It was the perfect sting. When the Colombian dealers saw the cash they were
suitably impressed and agreed to smuggle record amounts of cocaine to the UK.

According to a television drama documentary called Undercover Customs,
produced with the help of Customs, the operation could not have got off the
ground without the help of "Steve", the key informant handled by "Hesketh".

"Steve" regularly travelled abroad and had made several trips to South
America working for both Customs and the US Drugs Enforcement Agency.

He offered the cartel a direct route to smuggle 250kg (551lb) of almost
pure cocaine into Britain, followed by the same amount every 10 days for a
year. If it had been a genuine smuggling plan it would have more than
doubled the amount of cocaine on the streets of the UK.

Without the intervention of "Steve", none of this shipment of cocaine would
have come to Britain, documents seen by the Guardian reveal.

Customs paid him ?100,000 for his work on Begonia. According to sources
close to the operation, this "star" fixer boasted that he wanted to be the
first millionaire informant.

The documents reveal that as far back as 1991 he was threatening to travel
to South America to set up deals - "with or without" Customs approval.

One officer warned in a detailed report: "It is apparent that 'Steve' has
held himself out to the suppliers as a potential purchaser of the 250 kilos
of cocaine and there is as yet no UK-based distribution network. The
statement 'the arrangements for this 250 kilos consignment is well
advanced' again appears to indicate that we have insufficient control over
'Steve'."

He said the only explanation of the proposed funding of the drug deal was
that Customs "is purchasing 250 kilos of cocaine from South America based
suppliers and 'Steve' has represented himself as the spokesman for the
purchases in the UK".

He concluded: "At best I believe we can only hope to arrest three
'trustees' of this organisation who appear to have been entrapped by
'Steve' into coming to the UK in relation to an importation arranged and
financed by this Division [Customs].

"It may be prudent to seek crown counsel's advice on the various issues
raised by this importation before proceeding further, particularly that of
'Steve's' involvement as agent provocateur."

For Customs, Operation Begonia appeared to have been a huge success with
the judge commending "the courage, resourcefulness, intelligence and
persistence of the Customs & Excise officers involved in this investigation".

According to sources close to the original investigation, the operation
reflected a new strategy to secure large seizures of drugs coming into
Britain. "The idea was to invite importations, to create a market for
Customs to milk. Where there was no activity and work, Customs would create
the work," said one source, who spoke on condition of anonymity.

In a statement, a Customs spokeswoman told the Guardian: "The investigation
and prosecution known as Operation Begonia, which took place in the period
1991 to 1995, are part of an ongoing inquiry by West Midlands police. As
such, you would not expect Customs to comment further. In fact, it would be
entirely inappropriate and may be prejudicial for anyone to do so. Customs
are cooperating fully with the police in their investigation."