As MSC grew into a dominant force in global trade, it also fell prey to a drug-trafficking conduit for Balkan gangs, because the shipping giant dominates the routes that double up as cocaine super highways, reports Bloomberg.
In the summer of 2019, Claudio Bozzo, chief operating officer of MSC Mediterranean Shipping Co., flew 4,000 miles from Geneva to Washington, DC, for a meeting with US Customs and Border Protection. He’d been sent by MSC’s owner, a secretive 82-year-old billionaire named Gianluigi Aponte, to contain a crisis.
A few months earlier, more than 100 agents had boarded one of MSC’s ships, the Gayane, as it slid into the Port of Philadelphia for what was supposed to be a quick stop on its way to Rotterdam. Deep below deck, hidden in containers packed with wine and nuts, the agents discovered nearly 20 tons of cocaine, worth $1 billion. The ensuing investigation showed that more than a third of the crew—all MSC employees—had helped transfer vast amounts of cocaine from speedboats at night while the ship powered through the open ocean off South America. It was the largest maritime drug bust in American history.
The crime was so big and brazen that authorities made the exceptional decision to seize not just the cocaine but also the Gayane itself, a 1,000-foot-long ship worth more than $100 million. During Bozzo’s meeting with the CBP in the limestone Ronald Reagan Building, he apologized for the ordeal and said the crew’s actions had come as a surprise, according to a person familiar with the events. He extolled MSC’s growth from humble beginnings into the world’s largest shipping company and impressed upon the officials how seriously the Aponte family takes the responsibility of running a fleet that accounts for nearly 20% of all seaborne container trade.
For US officials, the company’s claim of ignorance didn’t add up. Years before the Gayane was boarded, law enforcement authorities in multiple countries had been monitoring MSC’s vessels and crews, a Bloomberg Businessweek investigation found. US authorities had not only been tracking the Gayane long before it entered American waters, but they also had previously boarded and searched several other MSC ships as part of a broader investigation into an international cocaine trafficking ring that had burrowed into the shipping company. Using clues collected during those boardings, as well as intelligence gathered in Eastern Europe, they identified the powerful Balkan Cartel as the architect behind the massive shipments. Authorities in the US and Europe also concluded that the syndicate, which controls more than half of the cocaine flowing into Europe, had infiltrated MSC’s crews over a decade, exploiting its manpower and vessels to help build a cocaine smuggling empire.
“We certainly didn’t see MSC as a victim in all this,” says William McSwain, former US attorney for the Eastern District of Pennsylvania, who presided over the Gayane case until he left the office in January 2021.
MSC and the US government are now locked in a legal battle that has taken place largely out of public view. Customs officials have been pressing the company to pay more than $700 million in penalties, according to multiple law enforcement sources who spoke on the condition of anonymity about the nonpublic administrative proceedings. Prosecutors in the US Attorney’s Office for the Eastern District of Pennsylvania, meanwhile, are building a civil case arguing that MSC, as the operator of the Gayane, bears responsibility for the drug trafficking and must forfeit the vessel or a substantial portion of its value. While MSC concedes that record amounts of cocaine were found aboard its ship, it disputes key aspects of the government’s version of events and argues that it was the victim of traffickers, not a co-conspirator.
A spokesman for MSC, Giles Broom, says that the company has always taken narcotrafficking seriously, but that the Gayane “incident showed a new level of security threat that we and, as far as we know, the container shipping industry were not yet ready to face.” Today, he says, MSC is regarded as “by far the industry leader in anti-smuggling efforts.” Still, “there is a limit to what anybody should expect from a company and from civilians doing their job: We are not a law enforcement body and we are not mandated, resourced or trained to confront dangerous organized criminal groups.”
Businessweek’s investigation is based on interviews with more than 100 people in a dozen countries, including current and former law enforcement officials and people familiar with MSC’s business, as well as a review of trafficking cases in multiple countries. Many of the sources requested anonymity to discuss confidential details of ongoing or past investigations.
Every shipping company that runs routes from South America to Europe is at risk of being preyed on by cocaine traffickers. But MSC made for a uniquely attractive target, officials say. It dominates routes that double as cocaine superhighways, primarily those used to haul fresh fruit and vegetables from South America to Northern Europe. It’s also the world’s largest employer of seafarers from Montenegro, a home to the Balkan Cartel. Years before the Gayane seizure, European police officials had warned MSC that its crews had been infiltrated. Yet the steps executives took to mitigate the problem fell woefully short, officials on both sides of the Atlantic say.
The situation has frustrated law enforcement and customs officials as record quantities of cocaine deluge global ports, especially in Europe. American prosecutors aren’t alleging that MSC’s leadership was involved in or benefited from the trafficking, but they’re trying to learn more about the breakdowns in the company’s hiring and security protocols, according to two senior officials involved. Investigators in the US and Europe say they keep coming back to a central question: Why have criminal organizations apparently been able to control key operations aboard some of the company’s ships for so long? “How high the influence of the narcotraffickers lay within this company is unquestionably something that from Day 1 was of great interest to the US government,” says Robert Perez, who was deputy commissioner at CBP from 2018 to July 2021.
It’s rare for a shipping company to incur serious penalties for drugs found aboard its vessels. When fines are imposed in the US, regulators frequently let a carrier negotiate them down. In Europe, fines are rarely imposed at all. Although there are international security requirements for shipping companies, customs and law enforcement officials have little power to hold the companies accountable. All of that has allowed the shipping industry, the primary engine of globalization, to escape major consequences as it has become increasingly entangled in drug trafficking.