Fears grow over Gibraltar's drug-runners

An illicit and lucrative trade using fast boats is disturbing governmen ts in London and Madrid, Phil Davison writes from the Rock

"Miami Vice has got nothing on this." A British resident of Gibraltar was giving me the guided tour of more than 50 matt-black-painted "Phantom" speedboats lined up along floating jetties in the city's Watergardens harbour.

Cocky young men with pony tails and earrings strutted around the harbour, where the odd open door of quayside warehouses revealed mountains of cartons of Winston cigarettes guarded by burly bodyguards and Alsatians. The young men are known here as The Winston Boys but the rising price range of their sports cars suggests more and more are moving into the richer drugs trade.

"When the boats leave stacked with Winstons, they're going to make a few grand in a matter of minutes with a quick run to La Atunara [a fishing village across the Spanish frontier]. It's blatant, virtually unchecked, even condoned," the Briton said."It'swhen they leave empty that worries me. That means they're on the cannabis run, or nowadays often for heroin, between Morocco and Spain.

``The other day, one of those lads came in from a `cruise' and left a black rubbish bag for safekeeping behind the bar of a waterfront pub.`Don't lose it, mate, there's 90 grand in there', he told the barman. Hence the Rollers and Corvettes you'll see around here."

Multi-million pound cigarette smuggling, rising drugs traffic using Gibraltar-based boats and growing reports of money-laundering by big-time crooks, including Arabs and Colombians based on Spain's Costa del Sol, are causing increasing concern in both Whitehall and Madrid.

What angers Spain, whose tobacco retail industry is state-controlled, is that it loses hundreds of millions of pounds a year to the illegal trade from Gibraltar. And the Gibraltar government of Chief Minister Joe Bossano makes a fortune. The more cigarettes that come in - legally, mostly from the US but in quantities that would have killed off the entire smoking population of Gibraltar years ago had this been their final destination - the more money the government makes, perfectly legally, on import duty.

What is increasingly worrying London is that Gibraltar, part of the EU as a dependent territory of Britain, has been failing to comply with EU directives intended to curb money-laundering and other deviations from normal banking practice. It has built upa huge backlog of such directives, which has led the European Commission to send what some diplomats called "threatening letters" to London.

In July Britain appointed a special Financial Services Commissioner, John Millner, to head a watchdog body overseeing the territory's banking sector.

Spain's best-known anti-corruption judge, Baltasar Garzon, insists his investigations into Colombian and other drug rings often lead to a money-laundering connection in Gibraltar. The Spanish Foreign Minister, Javier Solana, says "illicit trafficking andmoney-laundering" in Gibraltar will top his agenda in London talks next week with the Foreign Secretary, Douglas Hurd.

"Tobacco smuggling is robbing Spain of income and drug smuggling is affecting the health of Spanish citizens," a Spanish Foreign Ministry spokeswoman said."That's important to us. Every year, more and more drugs have been confiscated in the area and the problem is still increasing."

For the first time since Gibraltar's constitution as a dependent territory was drawn up 25 years ago, the British Government, irked by Mr Bossano's go-it-alone policies and feet-dragging over EU directives, is believed to have discussed using the Queen's"reserved powers" to go over the heads of the local government. Foreign Office officials have dropped hints of some kind of" direct action" to speed up implementation of EC directives, although Foreign Office spokesmen and the Governor's offi c e here deny any dramatic move is imminent."The present British Government would bend over backwards to ensure this was not necessary," said one Whitehall source. "It would be a very serious step.

Section 86 of Gibraltar's 1969 constitution says: "There is reserved to Her Majesty full power to make laws from time to time for the peace, order and good government of Gibraltar (including, without prejudice to the generality of the foregoing, laws am e nding or revoking this constitution)."

Any such British intervention would not go down well here. Mr Bossano, a former trade-union leader, was re-elected by a landslide in 1992 and his "self-determination" stand against both Britain and Spain appears to have maintained his popularity among Gibraltarians, many of whom benefit from the smuggling spin-off. Not so with the several thousand British residents or workers, many of whom commute from Spain and who complain angrily that they were discriminated against by a 1993 law pushed through by MrBossano that makes it more difficult for a Briton to work here than a Spaniard or other EC member.

"The smuggling has got out of hand, says Jackie Fielding, who has been a travel agent here for 18 years and runs the British Citizens' Association. "The place is on the verge of economic collapse and unless Gibraltar cleans its act up, they're not going

to be able to stop it."

British diplomats here and in Madrid admit they are concerned over the tobacco smuggling but play down the extent of drugs running and money-laundering. They say more heroin and cocaine enter Spain through its north-western region of Galicia. Perhaps, s a y critics of the smuggling, but Britain is not responsible for Galicia.

Although still a cornerstone of the Gibraltar economy, cigarette smuggling has actually dropped because open EU borders have led to an increase in cigarette smuggling into Spain from Portugal and France. But that has merely turned more Gibraltar speedboat owners towards the drugs runs.

While the slim"Phantom" powerboats tend to carry cigarettes - usually around 1,000 cartons for a profit of £5,000 a run - the drug-runners opt for inflatables with outboard motors of the type favoured by the Special Boat Squadron.These craft are more stable in the unpredictable Gibraltar Strait and can outrun Gibraltarian and Spanish Guardia Civil vessels.

There have been shoot-outs between the traffickers, using flares, and Guardia Civil helicopters, using real bullets, which buzz the speedboats in an attempt to sink them. A stepson of Gibraltar's Minister for Trade and Industry was killed when a Guardia Civil helicopter hit him with its skids. The helicopter was apparently trying to sink the boat.

The Guardia Civil, on pain of fines from £75 upwards, insist Gibraltar-registered cars carry things the average Spaniard would never dream of carrying - first-aid kits, a spare pair of glasses for bespectacled drivers, and so on. The checks have caused delays of several hours for cars and up to two hours for pedestrians, causing tourists to turn back, hurting the colony's trade.

The move also affects Spanish workers and drivers who cross to fill up their cars with duty-free petrol. Ironically, the Spaniards are buying their own petrol.

Gibraltar imports it from a Spanish refinery close to the border but its "free port"status allows it to retail it tax-free Both the upside and downside of Gibraltar's smuggling is evident on the Spanish side of the border. In the beachfront village of LaAtunara, tuna and clam fishing have taken second place to receiving cigarettes and drugs. When the "Phantom" launches arrive, the goods swiftly disappear into a labyrinth of narrow streets for distribution. Virtually the whole village appears to be involved.

The downside is evident in the nearby rubbish-strewn district of San Bernardo, where drug dealers roam freely and addicts are evident. "Don't come here at night. You'd never get out alive," said Rafael, a taxi-driver from nearby San Roque.

Local residents say the area has the highest incidence of Aids per capita in Europe, from unsterilised needles.

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