Snitch Vs. Snitch

In the drug world, you can't trust anybody - especially a federal informant

Jorge Arroyo's head appeared to be on a swivel. From his vantage point in the burgundy leatherette booth, he constantly monitored the other patrons of Houston's: Was anyone in the Kirby Drive restaurant watching him? He'd spent much of the past two decades as a paid informant for the U.S. Drug Enforcement Administration. In the snitching business, you watch your back.

When he wasn't looking over his shoulder, the wiry Bolivian spoke elliptically to the two attorneys who'd joined him that July evening four weeks ago. Kent Schaffer, a dark, dangerous-looking man with a beard, had made a career of defending suspected drug dealers and was considered one of the best at his craft. Likewise, lanky Dan Cogdell had carved a reputation as one of the top criminal-defense attorneys in Houston. Cogdell had a corporate air befitting his usual white-collar clientele; for him, meeting with a twitchy snitch was slumming.

The two lawyers had recently joined forces on a case that required both their areas of expertise. In October 1986, a federal grand jury indicted Woodlands businessman Daniel Steven De La Garza on four counts of money laundering. Along with his two brothers, De La Garza had built an estimated $10 million fortune in real estate and managed care. According to both state and federal authorities, he also controlled shadier dealings on the side. And like Arroyo, he'd worked as a federal informant.

In fact, that was how he met Arroyo. In the 12 years since, their history has been one of lies and double-crosses. Each has tried to set the other up, and each has used the feds to do it.

Now, in late July, their paths were about to cross yet again. De La Garza's money-laundering trial was set to begin the first week of August, and Arroyo was scheduled to be the prosecution's star witness.

Earlier that day, the attorneys say, they were in Schaffer's office conferring about the De La Garza case when Schaffer received a call from Arroyo. Schaffer had represented Arroyo in 1985, when he'd been charged with smuggling cocaine from Colombia; even so, Schaffer thought it somewhat unusual that Arroyo would get in touch with him, since prosecution witnesses rarely offer to make themselves available to the defense. But on the phone, Schaffer says, Arroyo said he needed to talk with him about the De La Garza case and arranged to meet the two lawyers.

In the Houston's booth, Schaffer sipped an ice tea; Cogdell, an O'Doul's. After a few minutes of small talk, Cogdell asked Arroyo to explain why he was testifying against De La Garza, why he would help a government that had previously prosecuted him. Arroyo again checked to be sure he wasn't being watched. Then, on a cocktail napkin, he wrote a dollar sign. He complained that the federal authorities were mistreating him, that they had reneged on an agreement to pay him for his testimony and planned to humiliate him by bringing up his criminal past during De La Garza's trial.

Cogdell asked Arroyo how much the feds had paid him over the years to be an informant. Arroyo suggested that Cogdell guess. The attorney took the cocktail napkin on which Arroyo had written the dollar sign, and beside it, wrote "50,000." Arroyo took the napkin, tore off the writing, put the scrap in his mouth and swallowed it. He gave a thumbs-up sign, and began describing his car and how money could be placed in the back of it.

Cogdell was dumbstruck, then furious; nothing like this had ever happened in his white-collar practice. "If you think that I offered you $50,000 not to show up next week, you're fucking crazy," he told Arroyo.

Schaffer was cooler. He quickly said that the meeting needed to end, and told Arroyo that they would get back in touch.

Leaving the restaurant, the two lawyers worried that they were being set up by Arroyo, and possibly by the feds. Both Arroyo and their client operated in the shady world of stings, informants and double-dealing. The lawyers wondered whether they, too, were being sucked through the looking glass, entering a realm where facts are hard to come by and nobody can be trusted.

A "sleazy saga of illusory illegality" is how the Fifth Circuit Court of Appeals characterized the first chapter of Dan De La Garza's relationship with Jorge Arroyo. In the court's ruling on the 1985 drug charges against Arroyo, no one emerges as a hero -- not Arroyo, not De La Garza and certainly not the feds.

Arroyo had connections to the rich and shady in Bolivia; he was married to the daughter of Hugo Banzer Suarez. In 1971, Banzer seized control of Bolivia during a military coup, allegedly with help from Klaus Barbie, a fugitive Nazi often called "the butcher of Lyon." Reportedly, the coup was financed by Bolivian drug lords.

Banzer's first reign as president lasted roughly seven years. During that time, according to the Los Angeles Times, members of Banzer's family were involved in the sale of drugs. In May 1989, the newspaper reported that one of his daughters had openly peddled cocaine on the campus of the American Cooperative School in La Paz, and that his physician son-in-law had been arrested carrying a suitcase full of cocaine in Canada.

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