Photographer: Akos Stiller/Bloomberg

Rebel ‘Romance’ Means Gold and Cocaine to Flow After Peace Deal

  • Guerrilla accountant describes metal’s role in Colombian war
  • Peace efforts are driving rebel migration from FARC to ELN

Victor Builes’s account of his four years as a Colombian rebel money man offers a harsh reality check for politicians and investors celebrating an historic peace accord 1,300 miles away in Havana.

Recruited by the National Liberation Army, or ELN, in 2012 to trade cocaine and collect taxes at a gold mine, Builes said the prospect of a permanent cease-fire with the larger Revolutionary Armed Forces of Colombia, or FARC, is swelling ELN ranks with former FARC guerrillas.

That migration, and an up-tick in collaboration between the two groups, indicate Colombia’s illegal gold and drug businesses will change masters, rather than disappear.  

“They’re going through a romance,” Builes, 31, who escaped the ELN last month to be with his family, said in a June 14 interview from an army base in Medellin. “They hold meetings together. They do many things together.”

Colombian President Juan Manuel Santos, FARC leader Timoleon Jimenez and Cuban President Raul Castro are scheduled to participate in a signing ceremony Thursday for bilateral cease-fire and disarmament, a key milestone toward a full agreement expected later this year.

Juan Manuel Santos, left, Raul Castro and Timoleon Jimenez shake hands during a meeting in Havana on Sept. 23, 2015.

Photographer: Luis Acosta/AFP via Getty Images

News of the accord, intended to end a five-decade conflict that’s killed over 200,000 people and displaced millions, helped make the Colombian peso the best performing emerging-market currency on Wednesday, with a 1.9 percent gain to a seven-week high of 2,919.03 per U.S. dollar.

Uncertainty over the deal’s implications helps explain the migration of FARC members to the ELN, with which a similar peace accord could be years away. The ELN and FARC didn’t respond to e-mailed requests for comment.

“The low-ranking FARC rebels think there will be a lot of benefits from the peace process for the senior commanders, but that they’ll be left behind,” Builes said, citing conversations and joint meetings between the two groups in the province of Antioquia where he operated.

As a result, four rebels from the larger group joined Builes’s ELN unit in the 15 months before he left, and at least eight more made the switch since then, he said. The ELN is also hiding out in FARC areas where they are less susceptible to attacks from Colombia’s military due to the peace process, Builes says.

Money Motives

Dressed in a gray t-shirt, blue jeans and Adidas sneakers, he describes how his unit -- the Companero Tomas block -- earned as much as 200 million pesos ($68,500) a month through illegal gold and cocaine production. Builes said he joined the ELN for a higher paycheck rather than ideological reasons. His work ethic and disinterest in taking drugs drew the interest of recruiters.

The Colombian army confirmed that he left the group to enter a government reintegration program, handing over two pistols, 30 grenades, ammunition and 8.5 kilos of cocaine paste. His knowledge of the area and how the ELN operates leave no doubt about his former membership, it said. Bloomberg couldn’t independently verify his membership.

Guerrilla Tax

Cocaine and gold were Builes’s main areas in his career as a rebel.

On any given day, 22 mechanical excavators eat into the ground at an informal mining operation in northern Antioquia known as San Pablo, a roughly 400 square-meter (4,300 square-foot) area with several open pits, jointly controlled by the ELN and the FARC, Builes said. The owners of each machine pay a tax and 10 percent of their output to each rebel group, he said, estimating San Pablo produces about 5,000 ounces a year.

Mines operating without full certification account for more than 85 percent of the gold produced in Colombia, according to the National Mining Association, fueling environmental destruction and the displacement of thousands of people. The precious metal quickly enters the legal market and is reported as part of Colombia’s official export figures.

Close to the mine are fields of coca, the raw material for making cocaine and the second key source of funding for Colombia’s rebel groups. As part of his job, Builes went from farm to farm in the area, buying cocaine paste, a crude coca leaf extract called ‘base’ in Spanish, for 2.2 million pesos a kilogram, or about $21 an ounce. He sold this to buyers in the area for 2.65 million pesos a kilo before the paste was processed and shipped to North America and Europe.

“We’re talking about selling 120 kilos of cocaine paste, sometimes more, on small paths, frequently where there’s an army presence,” Builes said. “We had to bring it to the buyers because they wouldn’t risk traveling to us.”

Feeding an Army

Sales of gold and the cocaine paste provided enough money to feed and arm the Companero Tomas block, and provide as much as 500 million pesos to a senior ELN official who passed through the area every four months, Builes said.

The level of cooperation between the FARC’s 36th front and ELN units in Antioquia is higher than anywhere else, but gives an indication of what may happen in other parts of Colombia, according to InSight Crime, a research institution which has conducted extensive fieldwork.

By transferring some of their resources to the ELN, members of the FARC can indirectly maintain access to weapons and funding in case their peace agreement with the Colombian government doesn’t work out, said co-founder Jeremy McDermott.

Plan B

“The FARC are looking at their Plan B, and their obvious Plan B is the ELN,” he said by phone from Medellin. “Certainly in the 60-odd municipalities where they co-habit, we think it’s very likely that there will be a transfer of these criminal economies, gold and coca, to their revolutionary cousins.”

The Colombian government and the ELN announced the start of a formal peace process on March 30, although negotiations have yet to start. The ELN has no intention of sitting down to talk until first seeing how the FARC agreement pans out, Builes said.

That’s something he can’t wait for. Taking advantage of the confusion caused by agricultural protests, Builes fled the ELN and handed himself over to the army on May 28, driven by a desire to see his family and start a new life.

As a result, the charges against him will be dropped and he will now go through Colombia’s reintegration process for former rebels before starting anew. Accustomed to thinking in the hundreds-of-millions of pesos, the hardest part may be adapting to the smaller sums typical of civilian life in Colombia.

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