War without End: America's New Drug Czar Wants to Stop the Trafficking. but Plan Colombia Is Plagued with Problems. Hernan Giraldo Is One

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In the foothills of the snowcapped Sierra Nevadas in northeastern Colombia, the Kogi Indians whisper his name in fear. Along the docks of the Caribbean port city of Santa Marta, gangsters speak with awe of his 400-man private army. But everyone knows that when it comes to Hernan Giraldo Serna, it's usually best not to know too much. The gangsters quietly recall, for instance, that in 1999 Giraldo ordered the brutal murders of four construction workers, whose bodies were then cut to bits with a chain saw. Their offense? They had built a special basement to store his multimillion-dollar cache of cocaine, and they knew where it was.

Giraldo personifies a disturbing new trend in Colombia's huge narcotics industry: right-wing paramilitary leaders fighting to take control of the country's coca fields. In the past two years Giraldo and his Los Chamizos (Charred Tree) militiamen have joined leaders of the United Self-Defense Forces of Colombia (AUC), a loose-knit coalition of private right-wing armies, to force 20,000 Marxist guerrillas out of many key cocaine- and heroin-producing regions. Colombian intelligence sources now estimate that 40 percent of the country's total cocaine exports are controlled by these right-wing warlords and their allies in the narcotics underworld. These sources believe Giraldo alone is head of a burgeoning drug syndicate that accounts for $1.2 billion in annual shipments to the United States and Europe. That puts him among the country's top five cocaine traffickers. Some Colombian intelligence officials believe that Giraldo, the son of a dirt-poor cattle rancher, may one day rival the late Medellin-cartel kingpin Pablo Escobar in both wealth and power.

Yet when it comes to right-wing drug lords, American policymakers--and even some counternarcotics officials--are rarely accused of knowing too much. In a recent interview, two of Washington's top drug warriors in Bogota said they had never heard of Giraldo. That admission goes to the core of a key problem with Wash- ington's multibillion-dollar program to staunch the export of heroin and cocaine from Colombia. For political reasons, U.S. officials have been largely content to focus on drug-trafficking by Marxist guerrillas who have been fighting the government since 1964. (Targeting the guerrillas is the central aim of Washington's chief ally, Colombian President Andres Pastrana, and his $7.5 billion Plan Colombia to cut drug production in half.) But as the leftists retreat, right-wing private armies--which have grown in response to leftist threats to businessmen and farmers--are prospering, and the Colombian government may be looking the other way.

The Bush administration is just beginning to grapple with these issues. Last week Bush nominated hard-liner John Walters as his new drug czar. Walters helped design drug-interdiction efforts in the Andean region for the first Bush administration. But NEWSWEEK has learned that even Walters has expressed some skepticism about Plan Colombia, and that the White House has ordered a policy review. One of Walters's concerns: too much U.S. aid is going to the Colombian military, which has long been tied to the right-wing paramilitaries. "It looks like we're heavily invested in a country where the situation is destabilizing rapidly," says a senior administration official. "It's enough to give everybody pause."

In recent weeks the State Department has seemed to shift tack on the paramilitaries. At the end of April it included Carlos Castano, head of the AUC paramilitary movement, on its terrorist-watch list for the first time. …