May 5, 2017 / 4:26 PM / 2 years ago

EL CHAPO Act seeks to use kingpin's money to build border wall, would divert funds from law enforcement

NEW YORK (Thomson Reuters Regulatory Intelligence) - It began as a joke shared among law enforcement officials gathered in a Long Island airport hangar in January awaiting the extradition flight of Mexican drug kingpin Joaquin “El Chapo” Guzman: “Why is Mexico finally extraditing El Chapo now on the eve of then President-elect Donald Trump’s swearing-in ceremony? To pay for Trump’s wall!”

A Department of Homeland Security officer shows a box containing U.S. currency seized during a raid in the Los Angeles Fashion District, in an undated handout photo released by the U.S. Department of Justice September 10, 2014.

While the joke was just that and a way to pass time as agents awaited America’s most-wanted and infamous drug trafficker, Texas Republican Senator Ted Cruz was not laughing earlier last week (April 25) when he introduced legislation known as the EL CHAPO Act. The bill would dedicate any money recovered from the kingpin and other drug traffickers to building the envisioned southwest border wall.

Based on a Justice Department formula that takes into account the volume of drugs Guzman’s Sinaloa Cartel is thought to have peddled in the United States, prosecutors claim Guzman’s amassed wealth of $14 billion between January 1989 and December 2014. Guzman, who is in U.S. custody in New York, has pleaded not guilty to drug trafficking and money laundering charges in U.S. District Court in Brooklyn.

“Fourteen billion dollars will go a long way toward building a wall that will keep Americans safe and hinder the illegal flow of drugs, weapons, and individuals across our southern border,” said Senator Cruz.


The bill would also allow President Trump to save face at a time when his domestic policies have largely fallen flat and even he has begun to hedge around his promises to build the wall that was the centerpiece of his campaign. At virtually every campaign stop Trump revved up crowds with promises that not only would a wall be built to keep out “rapists” and “bad hombres,” but he also vowed Mexico would pay for the barrier.

Mexico has made abundantly clear it will not fund the wall, and the U.S. Congress seems to have delivered a similar message this week. If Cruz’s legislation were to be enacted, Trump supporters could at least argue that dollars retrieved from Mexico or taken from Mexican nationals helped foot the bill, or at least that is what right-leaning television pundits have been espousing since Cruz made his legislative announcement.

It should be noted that a half-dozen top forfeiture experts whose views have been solicited by Thomson Reuters Regulatory Intelligence in recent months have all said that authorities will be fortunate to get their hands on any of El Chapo’s assets and that their best chance would be to make a deal with him.

They might agree to ease Guzman’s harsh, solitary living conditions in exchange for information about his money handlers who in turn can be squeezed for information. That reality has not been mentioned by the pundits.


Ironically, the law enforcement authorities who once found humor in the proposition that Guzman will fund the wall are no longer laughing. Funds seized and forfeit in drug trafficking cases at present are deposited into the Justice Department's so-called Assets Forfeiture Fund ( and the money is used to pay for police training, to buy police vehicles, bullet proof vests, and other equipment and even for expenses such as overtime.

If the money were to begin to be diverted to pay for a wall, law enforcement officers and agencies would be negatively impacted, former Justice Department official and forfeiture guru Stef Cassella told Thomson Reuters Regulatory Intelligence.

“Congress has provided for decades that criminal proceeds should be used for restitution to victims and then for financing law enforcement operations, not for projects that members of Congress might just happen to think are desirable on a particular day,” he said.

The law enforcement lobby, which has considerable clout on Capitol Hill, therefore is likely to oppose Cruz’s bill, Cassella said.

“The law enforcement agencies have always resisted efforts to raid the fund to pay for other pet projects and I suspect law enforcement agencies will have the same reaction to this proposal,” he said.

- Text of the bill: here

This article was produced by Thomson Reuters Regulatory Intelligence and initially posted on Apr. 27. Regulatory Intelligence provides a single source for regulatory news, analysis, rules and developments, with global coverage of more than 400 regulators and exchanges. Follow Regulatory Intelligence compliance news on Twitter: @thomsonreuters

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