Mat [00.00.08] I met El Gordo, or the Fat One, as he wanted to be called for this show, in a dingy hotel room in a mining town close to Segovia, where we’d gone in search of blood gold – gold that fuels violence and corruption, and has supplied multinational jewelers like Tiffany’s as well as technology giants like Apple.

El Gordo [00.00.27] Si tienen un negocio, un depósito, a todo el mundo le cobran vacuna. Cobran la plata a fin de mes. Comenzaron a cobrar desde el 20 hasta el 27. Son siete días para cobrar la vacuna.

Mat [00.00.37] El Gordo is a financiero, or money man. He does the books for a regional cell of the AGC – the Spanish acronym for the Gaitanista Self-Defence Forces of Colombia. The AGC is Colombia’s most powerful criminal group. And it controls the informal mining trade in Segovia.

I’ve known him for years. He is, as his name suggests, a large man, and he seems permanently angry. In the past, El Gordo had helped me understand the Colombian underworld, but he had never agreed to a formal interview before. He was nervous, so we agreed to distort his voice to help protect his identity. 

El Gordo [00.01.19] “Me matan esos hijos de puta.”

Mat [00.01.21] They’d kill me if they knew I was talking to you, he told me.

During our conversation, El Gordo explained how the AGC’s shadow taxation system of mining operations had become more profitable than even drug trafficking for his particular cell. They calculate fees based on their own financial analysis, usually obtaining insider information about the operation’s production and profits. 

El Gordo [00.01.46] La extorsión a los mineros sucede de esa manera…

Mat [00.01.50] If you own a mine or a processing mill, he said, they will collect as much as $800 dollars a month from you.  They also collect fees for every bit of kit or machinery miners use, running from $500 dollars to over $2,000 dollars, depending on the sophistication of the operation.

El Gordo [00.02.07]Fuera de 10% lo que sacan en cada lavada

Mat [00.02.11] On top of that, they collect 10 percent of monthly profits.

El Gordo [00.02.15] Ellos tienen sus propias minas

Mat [00.02.16] But extortion is just the start. 

El Gordo [00.02.19] Ellos vienen y las compran de cualquier persona pobre. 

Mat [00.02.22] The AGC also owns informal mines, standing in the shadows behind a straw investor, as we saw repeatedly during our years-long investigation into the trade. Or they might be the owners of the things the informal miners need to work – anything from processing plants and mining machinery to mercury and explosives

And as we would find out later, the more gold mined and the more money at stake, the more the line between them and the miners begins to blur and eventually fade. 

“You never know who you are working with, but you know never to ask” – that’s how a miner from a nearby town once put it to us. He was talking about the region’s informal mines. But, as we were about to find out, that was a truth that ran much deeper than we were ever expecting.

From InSight Crime, this is The Shadow of El Dorado, a series about the intricate web of corruption, violence, and complicity behind the gold trade in Segovia. And the story of how this once-thriving Colombian mining town became a mafia stronghold. 

My name is Mat Charles.

James [00.03.34] And I’m James Bargent.

Today’s episode takes that story back to where it all began. This is Episode 2: The Frontino Men

At Las Brisas, the informal gold mine in Segovia where we met Pelo Mula, Jorge, and Fabian last episode, they make a monthly payment to the AGC. They didn’t like to talk about it, wouldn’t get into details with us, but there was no point in denying it. Of course they pay. Everybody pays. This was, in the simplest terms, the beginning of the blood gold supply chain that we had set out to find.

But it was not quite what we were expecting. Sat at the surface by the ventilator pumping air down to the miners working the afternoon shift, we spoke about it with Jorge.

Jorge [00.04.27] Los pequeños mineros. Somos chantajeados. Los pequeños mineros tenemos que pagar vacunas a las bandas criminales. Prácticamente nosotros somos robados.

James [00.04.39] The small-scale miners are blackmailed and abused by the armed groups, we are practically robbed, he said. And the government labels us as financiers of criminal gangs. But we are the victims. 

Beneath his calm exterior and measured words, Jorge was clearly angry. 

Jorge [00.04.57] Y yo creo que si nosotros fuéramos delincuentes no estaríamos metidos en un hueco a 200, 300 metros bajo tierra, estaríamos extorsionando también.)

James [00.05.06] If we were criminals, we wouldn’t be down a hole 300 meters underground, he said. Having just spent the day down there with him, it was hard to disagree. 

Everything seemed so precarious, so dangerous. Caught between the law and the outlaws, they were only ever one step away from losing their livelihoods or their liberty or even their lives. And yet, they were made out to be the villains.

The miners in Segovia know their gold is illegal, that it is sold on the black market then laundered into the supply chain that can eventually reach millions of cellular phones, bracelets, and necklaces. But the idea that the businesses and consumers at the other side of the supply chain shouldn’t buy their gold because they have to pay off armed groups seems upside down to them  – someone steals money from them and that makes their gold blood gold? But the miners don’t just see a bitter irony in these contradictions. They see a conspiracy of power. 

Fabian [00.06.05] En este momento el gobierno nos tacha como criminales, mineros criminales. Nosotros somos mineros informales.. que no hemos legalizado totalmente por el gobierno. El gobierno no nos ha dado las garantías 

James [00.06.19] This is Fabian, the administrator of Las Brisas who we also met last episode. He said the government labels them as criminal miners because if they are criminals then the government has an excuse to drive them out and let big multinational mining companies take Colombia’s gold for themselves.

Fabian [00.06.35] Aquí en Segovia vivimos de la minería. Que no se cultiva, no hay ganadería

James [00.06.40] But where are they supposed to go? Here in Segovia, they live from mining. There is no farming, no ranching, just gold, he said. 

The vision that Jorge and Fabian laid out for us – of the combined powers of the state and big business criminalizing a community in order to bulldoze its way of life –  was something we would hear time and again all around Segovia. 

But it wasn’t always like that. In fact, like most miners of a certain age, Fabian and Jorge used to work legally, in the mines that now belong to the multinational they say is taking Segovia’s gold for itself: Aris Mining, formerly known as Gran Colombia Gold. But those mines used to belong to another company called Frontino Gold Mines. 

We kept hearing about Frontino everywhere we went. All we wanted to do was talk about armed groups and mafias. But everyone else in Segovia wanted to talk about Frontino.

They wanted to tell good old days stories about how much better everything was when the miners had a steady paycheck and generous benefits, all courtesy of Frontino. And they wanted to vent about how it had all gone wrong: the multinational takeover by Gran Colombia Gold, the mass firings and union busting that followed. The trail of destruction left by a hurricane of global capitalism.

We could sympathize, but it was not why we were there.

The gold produced by such a company might be ethically questionable, but, we thought, it’s not blood gold, this was not our story. But we were wrong. These were not separate stories. In fact, there was no way to pry them apart.

And it all began with the slow death of Frontino Gold Mines.

Mat [00.08.35] Our understanding of what we were seeing in Segovia and what we had come to see – its blood gold – all changed when we met Leonel Carvalho.

We were at a bit of a loose end waiting for some interviews, so we decided to talk to some of those involved in the Frontino story. We figured  it could at least make for some useful background. And after a couple of phone calls, we found ourselves at Leonel’s door.

Leonel showed us around his old, rundown Frontino workers’ cottage, where he had lived for the past 20 years. A relic of a bygone era – it had a sloping red, corrugated iron roof  – a remnant of the homesick architectural demands of the original British owners.

He didn’t grow up in Segovia, but his father is a local legend – Kiko Carvalho. He is popularly known as the savior of Frontino.

It was 1981 when Kiko wrote himself into local lore. After it was founded by British prospectors in the mid-1800s, Frontino had grown into Colombia’s biggest underground mining operation. But by the early 1980s, the company was in trouble. In the late 1970s, the foreign owners had been worn down by rising costs, harassment by left-wing insurgents, and constant strikes. So they took what they could, let the mines fall into disrepair, then left the Colombians who were managing them to pick up the pieces.

The future looked bleak. And if the company went under, it could take Segovia with it. But Kiko, who was a retired Frontino miner, led the management to an abandoned mine where he had worked decades before. 

The new mine promised untold riches. And it had the perfect name – Providencia, or Providence.

Leonel [00.10.23] Empezaron a explotar a Providencia, entonces ya la gente ya se le pagaba. Era cada diez días, cya no se atrasaban, pagaron deudas 

Mat [00.10.34]   Providencia kept Frontino afloat, Leonel said. And in return, all Kiko asked for was that his children would always be able to find work with Frontino. 

Leonel never really knew his father. The Frontino job, he would later say, was the only gift he ever received from Kiko.

There were many others like Leonel.

Guillermo [00.10.57] Ingresé a la mina porque sabía manejar las elevadores. Entonces fue facil entrar a la mina

Mat [00.11.06]  Leonel introduced us to Guillermo Vélez, whose father had also worked at Frontino. They are old friends from their days as union leaders but have contrasting personalities: Leonel is reserved and thoughtful, while Guillermo is outgoing and talkative – very talkative.

Guillermo lives in a nearby neighborhood of old Frontino housing, but he grew up just across the street from where Leonel lives now, and he took us to see his old house.

Guillermo [00.11.42] Cuando mi papa ascendió a jefe de garaje, le dieron esta casa y en la cual nosotros vivimos 16 años.

Mat [00.11.51] Like all the bigger houses, it was initially reserved for the foreign managers, the “misters,” as they called them. But, Guillermo told us, when his father rose in the company, the house was given to him. It had what in those days passed as luxuries – a reliable water supply, a switchboard telephone – and it was big enough – by Segovia standards – for his father, mother, and eight brothers and sisters to all fit.

Unlike Leonel, Guillermo had never wanted to follow in the footsteps of hisfather. He left Segovia as a young man, first to serve in the military and then to work the giant dredges that churn for gold in Colombia’s rivers. But he made his way home when he was around 40. Underemployed and with few other options, he took a job at Frontino.

Despite their differences, Leonel and Guillermo not only had a friendship but a bond. They were of the same breed: hardy, proud miners with thick hands and calloused souls – The Frontino men.

The Frontino men made up the backbone of Segovia for generations. 

But, when we met them, Leonel and Guillermo were in their late 50s, and their lives had been reduced to a precarious existence.

They lived job to job, working in construction, at a hotel, whatever they could find. They filled the gaps with side hustles – taxiing people around on a motorbike or delivering propane gas cylinders. And they woke up every morning knowing that they could be evicted from their homes at any moment by the Canadian multinational that now owns everything that once was Frontino.

Guillermo, though, was always on the move, on the hustle. He had, in some way, moved on. But Leonel was almost visibly weighed down by sadness and bitterness. He had tried to rebuild his life, but it was not the same world, and he was not the same man.

Leonel [00.13.39] Aquí hay mucha desempleo… y mucha pobreza. En este pueblo a pesar que es un pueblo rico en oro. Por eso lo llaman el puerto al oro. El nordeste, el puerto del oro, Segovia, pero la realidad no es esa.

It’s not just them. All of Segovia has been reduced to this precarious state. Everything we were seeing, the crumbling buildings, the underemployment, the poverty, in some way or another, it could all be traced back to what happened to Frontino, Leonel told us.

Leonel [00.14.06] Nosotros en la situación en que vivimos siempre vivimos con temor porque nunca hemos quedado quieto, todavía seguimos reclamando la empresa.

Mat [00.14.14] Both men were consumed by that story. It hung over their lives, just as it hangs over Segovia.

Leonel [00.14.19] Entonces estamos en esta situación, esperando que alguien venga y investiga verdamente lo que pasó y que castigan a los políticos a todos que tuvieron que ver con este robo. Es que esto fue un robo.

Mat [00.14.38] Because what happened to Frontino, Leonel said, was a robbery. 

When Leonel first arrived in Segovia, his father’s discovery had revived the town, business was booming. And Frontino, Leonel told us, was like a nurturing mother. Whatever people needed, she provided.

Leonel [00.14.57] Porque uno va trabajando en la Frontino, le da a uno para mantenerse bien, una con la familia, al menos la del mercado, al menos las cosas personales. Salía uno cada ocho días a tomarse su cervecita, su fresquitos con la señora

Mat [00.15.13] Leonel lived well from his share. He could pay the bills, keep everyone fed, and still have money left over to take his wife out for drinks every payday. The workers had stable job contracts, healthcare, housing, and pensions. Leonel’s daughter went to the Frontino school. They even had rations from food produced on Frontino-owned farms.

Guillermo [00.15.33] Estamos en estos momentos en el lugar llamado la Fonda de la empresa Frontino Gold Mines. Este edificio fue construido por los años 40, con la finalidad de despachar a los trabajadores de la compañía la comida

Mat [00.15.53] Guillermo took us to see La Fonda, a warehouse where workers would get that subsidized food to go with every paycheck.

Guillermo [00.16.00] La comida que era subsidiada. ¿De qué manera? Dándosela a los trabajadores en forma de raciones de acuerdo al grupo familiar. 

Mat [00.16.10] Like so much of Frontino, it is a vestige of its golden era: Its once proud red roof is rusted and collapsing, its insides stripped. But back in the day, Guillermo told us, they used to line up, jostling through the noisy queues to fill sacks with greasy packets of beef, plantains, yucca, and panela – the brown slabs of raw sugar cane used in Colombia to make bitingly sweet drinks.

Guillermo [00.16.34]Por eso la importancia de este lugar de la fonda. Esto tuvo vida propia y fuera de eso, este lugar servía de lugar de pago. De los empleados cada diez días.

Mat [00.16.45] This place had a life of its own, he said. On payday, which came every couple of weeks, the building would be surrounded by traders selling everything from fruit to clothes to raffle tickets. It was not just a place to get paid and get supplies, it was a meeting point for the entire town, and a place where it seemed like everyone benefitted from Frontino’s thriving gold mines.

For the miners, Frontino was something you could build a life around. It made Leonel, Guillermo, and the other Frontino men feel secure, like there was a future for them and their families, and a future for Segovia. But more than that, it made them feel proud that they were part of something bigger.

They felt that Frontino belonged to them as much as they belonged to it.

And then… one day, they found out that it actually did belong to them. 

James [00.17.35] It all started around the turn of the century with the discovery of a document that is still talked about in Segovia in almost mythical tones, as if it were a religious artifact: El Acta de Nueva York – the Act of New York.

The Act of New York, though, was no lost gospel. It was a declaration of the Frontino owners’ intentions to pass the company into the hands of Frontino’s  workers and pensioners. But it was also not, despite how many Frontino men see it, a blessing from on high. It was really an attempt by Frontino’s foreign investors to avoid liability. And it would get quickly subverted, leading to the slow unraveling of the company town Frontino had created.

We traced the story through contracts, letters, and agreements going back over 40 years.

When the company’s foreign owners decided they were done with Frontino in the mid-1970s, they wanted to simply liquidate the company and walk away. But they couldn’t because they were still on the hook for labor contracts and pension payments.

At first, they tried to form a temporary administration that was given a year to turn the company assets into a pension fund, then hand everything over to the workers and pensioners.

But that year passed, then another, and the administration had still not put things in order. Queue a series of frantic letters between lawyers and the increasingly irate owners, who were still liable for their debts but no longer making a penny from the company.

That’s when the owners and the lawyers met in a New York notary in March 1979. There, they signed a document authorizing their Colombian lawyer and acting general manager of Frontino, a man named Dr. Franco Idarraga, to transfer the company’s assets to the workers and pensioners as soon as possible, so they could finally be done with the whole affair.

At that point, under Colombian law, one more thing needed to happen for that document to be legally validated: Dr. Franco, as he is known in Segovia, needed to take it to a notary and enter it into the public record.

Records show that he may have intended to do this. We found a copy of a letter from Dr. Franco to the relevant authorities dated three weeks after the Act of New York was signed.

The Act of New York, it says, “defines all the aspects related to ceding the company assets in favor of the workers and pensioners,” and it “merits your acceptance.” 

“The document itself,” it goes on, “is being entered into the public record in one of the notaries of the Medellín notary circuit.”

But the Act of New York never made it to a notary. Instead, it was tucked away in Dr. Franco’s office and the government archives. For their part, the workers and pensioners never found out, and Dr. Franco effectively took control of Frontino Gold Mines for himself and his associates. 

What followed was a strange period of corporate limbo, in which the company – because it was making so much money – could deflect attention from its failure to relinquish control and, at the same time, placate the workers and pensioners.

Guillermo [00.20.55] No lo hicieron. Mas bien les daban bonifiaciones. Hacían gastos, de pronto no necesarios para la empresa pero no había voluntad de entregar la empresa a los trabajadores y jubilados.

James [00.21.07] As Guillermo explained to us, every time a decision needed to be made on renewing Dr. Franco’s supposedly interim administration –  the management would find the money to pay out bonuses to all the workers to convince them to keep the status quo.  Those same workers had no idea the company should already be in their hands. Frontino went on like this for over 20 years. 

Guillermo [00.21.30] Aquí no había que liquidar nada, ya estaba liquidado, aquí había simplemente unos bienes que había que entregar

James [00.21.37] All this time, Guillermo said, the company had already beenliquidated, and all that remained was to hand over the assets to its creditors – the workers and the pensioners.

The discovery of the Act of New York would change everything, they thought.

And they were right. Just not in the way they were thinking. Because at the same moment they were poised to take control of the company, something else was happening that would take it out of their hands.

There had been mine robbers in the Frontino mines for as long as anyone can remember. The machuqueros as they are called in Segovia, would creep in through ventilation shafts, then stay underground for months at a time. But they were little more than phantoms, haunting the mines’ hidden crevices and forgotten corners.

All that changed in 2001 with an invasion of what had long been Frontino’s largest mine, El Silencio – The Silence.  That invasion would become known as La Batea – meaning the gold pan.

During La Batea, the machuqueros organized like never before. They hollowed out shafts that plunged straight through the earth and rock. They knocked down support columns and blew up transport tunnels and ventilation shafts.

Hundreds of machqueros soon became thousands, and each day they went deeper and deeper. El Silencio became a living ruin. But a lot of people were getting very rich. Not only the machuqueros, but also those taking a cut of the profits in exchange for letting it all happen: corrupt politicians; police and army officials; collaborators among the workforce; and – according to public allegations made by the unions – some of the company administrators.

The money appeared everywhere –  new motorbikes roaring through the streets; bars full at any time of day and every time of night; mills and traders springing up on every other street to process and sell the stolen gold. It was a whole new economy. And it was the beginning of the large-scale, uncontrolled informal mining that would come to define Segovia by the time we arrived some 15 years later.

It was also the moment that Segovia, the company town, began its descent into Segovia, the mafia town.

Because there was something else to this phenomenon, something even more troubling and sinister. Something armed with assault rifles and decked out in camouflage. They stood at the entrance to the mine shafts and outside the mills.  They checked who was working and how much they were earning. And they claimed their cut of the gold sacked from El Silencio.

They were the paramilitaries of the United Self-Defense Forces of Colombia, known by the Spanish acronym as the AUC. And theywanted Frontino’s gold for themselves.

Newscast [00.24.39] Critics say AUC soldiers have killed several thousand people, their victims include over 150 union activists in the last 16 months as well as dozens of human rights activists and leftist politicians. Authorities say the paramilitaries pulled their victims off of buses and out of homes before shooting them.

Mat [00.25.03] The paramilitaries were a byproduct of Colombia’s civil war, a right-wing reaction to the left-wing guerrilla groups that had been trying to overthrow the state since the 1960s. They began as ad hoc death squads and rural militias, but by the time of La Batea, they had become a nationwide counterinsurgency  – and major players in the Colombian underworld.

Leonel’s first run-in with Colombia’s paramilitary groups had come a few years earlier. And it was what had led him to become a union leader in the first place.

Leonel [00.25.33] En el 97 mataron a un sindicalista que se llamaba Rafael Guardia, lo mataron los grupos paramilitares que llegaron al municipio lo mataron por la calle Bolívar. 

Mat [00.25.46] The paramilitaries had murdered a Frontino union leader. This was common. The paramilitaries were a shadow regime, government proxies in the dirty war against anyone perceived to be collaborating with or even sympathetic to the guerrillas. And that included the unions.

The war had put the unionists in an impossible position. The insurgents would often express solidarity with the union struggle. Rejecting the guerrillas’ support would be risky. But by not saying anything, they were seen as fellow travelers in their armed struggle – and legitimate targets for paramilitary killers.

Segovia had long been a guerrilla stronghold, and so the Frontino miners union often found itself squarely in the paramilitaries’ sights.

Leonel [00.26.31] Toda la gente del sindicato se fue. Se fue para Medellín de miedo y que ya no iban a volver.

Mat [00.26.35] What was not common was what happened next. The rest of the union leadership had fled Segovia, Leonel told us. And they called up Leonel and asked him to act as a go-between with the local paramilitary commander.

Leonel accepted, and he successfully negotiated their return to town. Impressed, and struggling to fill the vacant leadership position, the union asked him if he wanted to join their team.

Leonel [00.27.00] La gente estaba tan temerosa que no querían hacer parte del sindicato, les daba miedo.

Mat [00.27.07] “Everyone else was too afraid,” he told us. But Leonel said yes.

It was not long after that the union found the Act of New York. They saw the opportunity it contained. But they also saw the risks.

La Batea had left the company vulnerable. There were murmurs that Frontino was a write-off, and the only solution was to sell it off, shut it down, and start over. To stop that happening, they needed more than just the Act of New York – they needed money.

So they met some American investors who offered them $55 million dollars to put the company in order if they could use the Act of New York to claim legal ownership of Frontino.

But the war got in the way once more. As soon as news about their arrangement with the investors got out, rumors swirled that the money was coming from leftist guerrillas. After the rumors came the whispers. The paramilitaries had drawn up a list of targets: at the top of the list were four Frontino union leaders. But… only three names on that list reached the union. The fourth remained a mystery.

Leonel [00.28.10] Fueron a el y le dijeron, vea, van a matar cuatro del sindicato y dieron los nombres de ellos tres, pero el mío no lo dieron. 

Mat [00.28.18] The three on the list contacted the paramilitaries and arranged to meet the commander. There, they explained, it was all a mistake, it was US businessmen, not communist insurgents, who were promising them money.

Leonel [00.28.30] El fue y conversó con él y le dijo No escuchas, muchacho, Eso no es así. A usted lo están. Le están diciendo mentiras.

Mat [00.28.38] The commander listened. He accepted their story and called off the hit. At least for the three men at the meeting, but there was still the question of the fourth name. 

Leonel [00.28.46] El les dijo Dónde está el otro Carvalho? ¿Y él dijo pero cómo asi Carvalho.

Mat [00.28.50]  ‘And where is the other one, where is this Carvalho?’ he asked them.

As Leonel tells it, he was with a friend, working their way through a liter of aguardiente, Colombia’s local firewater, when he got the call from the others to tell him he was the fourth name on the list.

Leonel [00.29.05] Vea, métase donde sea, porque el cuarto era usted. Vaya, escóndase, hermano. No vaya para su casa. Quédese por ahí en la calle. Quédese en otra parte. Mirar dónde se va quedar.

Mat [00.29.18] “Listen…they’ve called off the hits, but he can’t reach his men to tell them. So don’t go home, they are waiting for you there… If they see you, they’re going to kill you,” they told him.

Leonel started shaking with fear.

Leonel [00.29.30] Entonces León, que estaba ahí conmigo, me decía No, no, cálmate, cálmate. Venga, vámonos, vámonos ya

Mat [00.29.35] “Come on, we need to go now,” his friend told him. He grabbed the bottle and set off with a swig. “If they’re gonna kill me,” he thought, “They can kill me drunk.”

Leonel [00.29.45] Eh hermano, vea, que me maten borracho.

Mat [00.29.47]The paramilitary leader eventually reached his men, and the hit was called off. The next day, Leonel woke up, hungover but alive. The relief, though, wore off quickly, as the union leaders began to understand the implications of what had just happened. The paramilitaries held their company, their town, and their very lives in their hands.

James [00.30.11]After escaping their narrow brush with death, the threats against them continued, spiking any time any of them spoke out or tried to take action against La Batea. Still, the union pressed on with their plan to deploy the Act of New York. By now, the risks were clear, but they felt like they had little choice.

So on August 6, 2003, 24 years and 4 months after it was first signed, one of the leaders went to a Medellín notary and entered it into the public record. The union called a creditors assembly for the workers and pensioners, where the motion to accept the Frontino assets passed.

A week later, the union leaders wrote to the government to formally accept the transfer of the assets and wrote to the president of Colombia to ask for his support in their claim. The Frontino men had made their play, and now they had to wait.

The response came quickly. But it didn’t come from the company management or from the government. It came from them, the paramilitaries. And not just one of them but one of the very worst of them, one of the most notorious names in Colombia’s blood stained history. It came from Macaco.

That’s next time on The Shadow of El Dorado…