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...eastern Guatemala doesn't seem like the kind of place that would have a first-rate hospital and a handful of mansions. There's no bank, no grocery store and more than 70% of the inhabitants of the municipality that includes La Reforma, called Huite, are poor. But officials tell TIME they suspect a few locals are making a handsome profit by assuring that Colombian cocaine makes it safely through Guatemala to Mexico and then...

Author: /time Magazine | Title: In Guatemala, a Village that Cocaine Built | 4/16/2009 | See Source »

Former villagers tell TIME that La Reforma's alleged narco-big shots have secured the town's love and loyalty by giving to the poor and throwing elaborate public parties. Perhaps most important, they've created jobs - both directly for their alleged drug-running enterprises and indirectly through businesses that federal officials say are possible fronts for laundering drug profits. "They're the source of employment," says a 30-year-old woman who grew up near La Reforma and now studies law in Guatemala City. "They're the principal investors." The woman has family in Huite and asked...

Author: /time Magazine | Title: In Guatemala, a Village that Cocaine Built | 4/16/2009 | See Source »

...says authorities almost never detect the origin of the laundered funds, in part because the people who are caught refuse to rat out their higher-ups. "They prefer to take the [jail] sentence than tell us the truth," says Liu. He also admitted that fear often paralyzes further investigation. In one case, a Colombian woman was caught at the airport with some $140,000 and sentenced to six years in prison. Liu says that after the trial last year, the woman's lawyer advised Liu not to investigate any further. Liu followed the advice, and says the people the woman...

Author: /time Magazine | Title: In Guatemala, a Village that Cocaine Built | 4/16/2009 | See Source »

Obscure La Reforma, as a result, could become a more high-profile focus. Federal officials tell TIME they're investigating one of La Reforma's most prominent families, the Lorenzanas, who own a construction company, vast cattle-ranching tracts and an agricultural export firm that partners with U.S. companies to ship melons. One of the Lorenzana brothers, Waldemar, was arrested last December for alleged weapons possession but was released soon after without being charged. A Lorenzana representative did not respond to TIME's attempts to contact the family. But last year, Waldemar wrote a letter to a Guatemala newspaper denying...

Author: /time Magazine | Title: In Guatemala, a Village that Cocaine Built | 4/16/2009 | See Source »

...buying all the cartels' drugs, then seemingly abandoning Mexico. "Obama needs to work on stopping all the American drug users. That is where the problem is," says Antonio Santiano, sitting in an empty shop of arts and crafts near the U.S. border. "And he needs to tell his people it is all right to come to Mexico. If he is coming for a visit, why can't all the other Americans...

Author: /time Magazine | Title: For Mexico's Drug Wars, Obama's Visit Promises Help | 4/16/2009 | See Source »

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