#952 John Pompliano On How Pablo Escobar Made $420 Million Per Week

In this episode, I talk to my brother John and break down the insane drug empire that Pablo Escobar built. John will be providing deep dives on various companies, entrepreneurs and interesting business stories every weekday on "The Best Business Show". To see the video of the segment, go to "The Best Business Show: LIVE" YouTube Channel. ======================= This episode is sponsored by my favorite place to buy, trade, and stake crypto, Okcoin. They're the fastest growing US based exchange, serving over 190 countries globally with the easy onboarding and low fees. If you haven't tried them out yet, you should. They're on a mission to make learning about and buying crypto easier than ever, and they're all about bringing more financial literacy to everyone, something we can always use more of. From being the only exchange to integrate Lightning to contributing over $1M for Bitcoin core devs, they're doing incredible work to further the bitcoin ecosystem and they offer lots of other vetted utility assets from gaming to defi. With Okcoin, I feel confident that the future really will be ok. To get started, go to http://okcoin.com/pomp for some free bitcoin when you sign up. ======================= Fundrise is the largest direct-to-investor real estate investment platform out there, giving you the opportunity to achieve upside of an asset class previously reserved for institutions and high net worth individuals. That’s right, Fundrise is making high-end private market real estate investing accessible to everyone via an easy-to-use, automated platform. See for yourself how over 190,000 investors have built a better portfolio with private real estate. It takes just a few minutes to get started with as little as $10. Go to http://Fundrise.com/Pomp today and, for a limited time, get $10 when you place your first investment. That’s Fundrise.com/Pomp ======================= Crypto is all about giving the power back to the people and our sponsor, Pipe, is doing that in a big way. Pipe is the world’s first trading platform that allows you to trade recurring revenue streams for up-front capital. And with Pipe’s new API, companies with recurring revenue can build seamless, embedded financing options into their platforms. One of the most interesting uses for Pipe’s new API right now is Compass Mining’s “Mine Now, Pay Later” which powers payment plans on bitcoin mining hardware so more miners can start or scale with a smaller up-front investment. Whether you’re looking for mining hardware or scaling any business with recurring revenue, check out Pipe to access growth capital with: No loans. No dilution. No restrictive covenants or warrants. Just growth on your terms And right now, Pomp Podcast listeners can access tens of thousands of dollars even millions fee-free for 12 months. Whether you are a bitcoin mining company looking to enable financing for your customers or a SaaS, DTC, or any business that has recurring revenue, sign up at http://pipe.com/pomp to start trading today. =======================

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. In this episode, I talk to my brother, John Pompliano, all about the financial life of Pablo Escobar. We cover how much money he was making, what he was doing with the money, some of the absurd things that he did as he continued to build his drug empire, and also how people of Colombia viewed him during his rise and ultimate fall. I really enjoyed this conversation with my brother, and I hope that you enjoy it as well. Before we get into this episode, though, I first want to talk about our sponsors. This episode is brought to you by OKCoin. They are my favorite place to buy, trade,

• 0:45Anthony Pompliano?

  and stake crypto. They're the fastest growing US-based exchange, serving over 190 countries globally, with the easy onboarding and low fees. If you haven't tried them out yet, you should. They're on a mission to make learning about and buying crypto easier than ever, and they're all about bringing more financial literacy to everyone, something we can always use more of. From being the only exchange to integrate Lightning, to contributing over $1 million for Bitcoin core developers, they're doing incredible work to further the Bitcoin ecosystem, and they offer lots of other vetted utility assets, from gaming to DeFi. With OKCoin, I feel confident that the future really will be OK. To get started, go to OKCoin.com/Pomp for some free Bitcoin when you sign

• 1:27Anthony Pompliano?

  up. Again, if you want free Bitcoin, go to OKCoin.com/Pomp today. Today's episode is brought to you by Fundrise. You all know I believe that the best investors both understand and seek out extreme asymmetry. Fundrise is here to help you do just that. It's the largest direct-to-investor real estate investment platform out there, giving you the opportunity to achieve upside of an asset class previously reserved for institutions and high net worth individuals. That's right, Fundrise is making high-end, private-market real estate investing accessible to everyone via an easy-to-use automated platform. Its 1 million users already know that the investment with Fundrise is capable of producing strong appreciation returns and income generation while helping to stabilize a diversified portfolio. That's more important now than ever. In our inflationary environment.

• 2:11Anthony Pompliano?

  See for yourself how over 190,000 other investors have built a better portfolio with private real estate. It takes just a few minutes to get started with as little as $10. Go to fundrise.com/pomp today. And for a limited time, you'll get $10 when you place your first investment. Again, that's fundrise.com/pomp. Go check it out. And when you make your first investment, they'll give you $10 on top of it. Fundrise.com/pomp. Today's episode is brought to you by Pipe. Crypto is all about giving the power back to the people and our sponsor Pipe is doing that in a big way. Pipe is the world's first trading platform that allows you to trade recurring revenue streams for upfront capital. And with Pipe's new API, companies with recurring revenue can build seamless embedded financing

• 2:55Anthony Pompliano?

  options into their platforms. One of the most interesting uses for Pipe's new API right now is Compass Mining's Mine Now, Pay Later, which powers payment plans on Bitcoin mining hardware so more miners can start or scale with a smaller upfront investment. Whether you're looking for mining hardware or scaling any business with recurring revenue, check out Pipe to access growth capital with no loans, no dilution, no restrictive covenants or warrants, just growth on your terms. And right now, Pomp podcast listeners can access tens of thousands of dollars, even millions, fee-free for 12 months. Whether you are a Bitcoin mining company looking to enable financing for your customers

• 3:35Anthony Pompliano?

  or a SaaS, DTC, or any business that has recurring revenue, sign up at pipe.com/pomp. Again, pipe.com/pomp to start trading today.

• 3:46Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 4:09Anthony Pompliano?

  John, what's up, man?

• 4:11Speaker 02

  What up?

• 4:12Anthony Pompliano?

  I'm doing great. How are you?

• 4:14Speaker 02

  I'm fantastic.

• 4:15Anthony Pompliano?

  Yeah?

• 4:16Speaker 02

  I got no complaints.

• 4:17Anthony Pompliano?

  Yeah, I see your guns out, like must be sunny outside.

• 4:19Speaker 02

  I won't flex, I don't want to break the camera.

• 4:22Anthony Pompliano?

  All right. So yesterday we were talking about like, what could we possibly talk about today? And we're like, I don't know, we'll think about it. And then separate conversation, different point in the day. You're like, yo, did you hear Pablo Escobar? And as soon as you told me the style, then we gotta talk about this tomorrow. So where do you want to start with Pablo Escobar, one of the largest drug kingpins of all time?

• 4:44Speaker 02

  Yeah, well, let's just start simply like, he started off like selling fake diplomas. He was stealing tombstones and then reselling them, which is just a savage thing in itself. But then he started stealing cars where he got arrested first, and then he worked his way into like organized crime with obviously drug dealing and cocaine, which was his massive enterprise. But he built one of the largest, I'll call it, one of the largest drug enterprises in the world.

• 5:08Anthony Pompliano?

  So he started out as petty criminal and then over time he built it up. He almost became more serious, larger scale, more ambitious over time, until eventually it became this massive multinational drug business.

• 5:19Speaker 02

  I mean, you see here, his one shot here on the left, and then you see a pile of cash on the right. And obviously transporting and money laundering is huge for these guys. So they used to use a bunch of Chinese people over there in Asia. So they would take USD, try to transfer it through an Asian or a Chinese bank or an Asian bank, and then transfer it back to Mexican, to Mexico to get Mexican pesos, right?

• 5:39Anthony Pompliano?

  Yep.

• 5:39Speaker 02

  So the whole plan was just kind of, how do we convert the cash from USD and get it back to Mexico without being traced, right? So in the height of his career, I'll call it, and I want to also note something real quick. Pablo Escobar, not a good guy at all, right? He used, he, he used force, he's forced to get a lot of what he wanted. And that's how he became very, very violent, and that's how he became very, very popular. So I'm not advocating to do this at all, but he made $420 million a week, which comes out to be $22 billion a year.

• 6:07Anthony Pompliano?

  Whoa, whoa, whoa, rewind, rewind. Pablo Escobar and his enterprise, they were making a half a billion dollars a week at the top?

• 6:15Speaker 02

  Yep. He produced about 80% in the eighties. He produced about 80% of the cocaine that was consumed in the world.

• 6:23Anthony Pompliano?

  Okay, so that, so him and his enterprise create 80% of the cocaine in the world. They're booking $420 million a week in revenue.

• 6:32Anthony Pompliano?

  Twenty-two billion a year. Keep going.

• 6:34Speaker 02

  Twenty-two billion a year, but by the time he died, he was only worth about thirty billion dollars. Right?

• 6:40Anthony Pompliano?

  Why?

• 6:40Speaker 02

  That's, well, he spent a lot of money, frankly, right? Like, he was one, he was a philanthropist. He did build a lot in Mexico. He did invest a lot. He's an economic developer in the nation. But when you're raking in four-hundred-and-twenty million dollars, I'm sure that you waste a little bit, right? So we'll get to it in some wild facts in a second. But he was burning money. He was storing money. He was losing everything under the sun. But yeah, he was, that thirty billion dollars back then would be the equivalent of about sixty-four billion today.

• 7:06Anthony Pompliano?

  Okay, so even though he had by far the largest drug enterprise in the world, he wouldn't even be the richest person in today's dollar terms. But he would definitely be top twenty, for sure. On top of that, when you were telling me about this and his whole philanthropic activities, I then told you, I said, you should go watch the movie American Gangster, right? Because Frank Lucas was doing similar stuff, where he'd hand out the turkeys on Thanksgiving, etc. To essentially say, hey, I got you as a community. I got you. You guys got me, I got you. But also, I rule with an iron fist, and if there's any problems, then the violence.

• 7:43Speaker 02

  I treat it like the mob where they rob you, and then they say, if you want protection from being robbed, you should pay us. I treat it similar to that. It's almost like forcing it upon them, like they, I'm sure they liked it, but it wasn't anything crazy. But yeah, he was a philanthropist. You know he was a congressman?

• 7:56Anthony Pompliano?

  I did know that only because I watched a movie about it. But explain, explain what happened. He basically just ran for a political office.

• 8:02Speaker 02

  Yeah, I think that's kind of how it works, right? He basically forced his way into a congress seat in nineteen eighty-two, I believe. And then two years later, obviously, he was a notorious kingpin at the time, and they removed him from the congress seat.

• 8:15Anthony Pompliano?

  So he was elected in a, in a free and fair election?

• 8:18Speaker 02

  However you want to call that, similar to how Putin gets reelected.

• 8:21Anthony Pompliano?

  Okay, so he got elected to congress, probably spent a lot of money, bought a lot of influence, let's call it. And then two years later, he was forced to resign after a campaign that exposed his criminal activities. That's wild. But now, say this second, this is the, this was the stat that kicked off this entire conversation. What did he try to do with Mexico's debt?

• 8:40Speaker 02

  This is genius by him. He tried, Mexico was in about 10 billion dollars of debt. And he tried to say, if I pay your 10 billion dollars of debt as a nation, I think that I should not be extradited anywhere around the world. You should not have to abide to any extradition treaties anywhere, because I'm basically taking care of this country, right?

• 8:56Anthony Pompliano?

  So the country of Mexico in the late 1980s, they had 10 billion dollars of sovereign debt. The country was in debt, 10 billion. And he had the 10 billion. And he said, I will pay off the country's debt so that Mexico can be free of debt. But in exchange, no matter whatever happens in the world, you cannot let anyone come and take me.

• 9:18Speaker 02

  Exactly. And as we know, a lot of the story is he did not do that. And Mexico did not accept his money because that's a ridiculous offer, I think. But yeah, and then you just kind of go down the line, right? You're talking about how, how does he not have more money today than anyone else?

• 9:32Anthony Pompliano?

  Well, I'm sorry, it was in Colombia, not Mexico is what he was trying to pay off.

• 9:34Speaker 02

  Excuse me, Colombia, all of this in Colombia. But yeah, he also, when he was on the run in 19, or 1992, 1993, he notoriously apparently burned 2 million dollars to keep his daughter warm. So freezing, you're on the run, you're in a hideout place. He put 2 million dollars of cash in a pile and burned it and had her sit next to the fire. It's not a fire log, obviously, that probably burned very, very quickly. But burning 2 million dollars to keep your daughter warm just shows that's what the kind of guy was, right? He wasn't worried about the money aspect of it. He was, he was obviously already on the run at that point. And then he spent an estimated 2,500 dollars a month on rubber bands to keep his money. 2,500 dollars a month, that's more than people pay in rent just to keep rubber bands to keep your money in.

• 10:19Speaker 02

  It's absolutely ridiculous, the amount of money that he was making throughout his time.

• 10:23Anthony Pompliano?

  Dude, these are wild stats. 10% or 2 billion dollars a year? They just chalked it up and said, oh yeah, the rats are gonna eat it?

• 10:31Speaker 02

  Well, he would store money in warehouses, different facilities, his house. He would store it in just open fields because he had so much money, he had nowhere to put it. And then obviously rats and weather and everything can destroy cash dollar bills. So he would lose, apparently notorious to his brother, he'd lose about 10% or 2.1 billion dollars a year.

• 10:47Anthony Pompliano?

  Yeah. Did the people of Colombia like him?

• 10:51Speaker 02

  For everything I read, there's definitely mixed feelings because he was such a big philanthropist. He built over 70 soccer fields. He built a zoo in Columbia and everything like that. So it obviously like, he was a big philanthropist, but I think people know when you rule with an iron fist, you're not the most loved individual in the world. It goes back to that, would you rather be loved or hated? And I think he was a little bit of both.

• 11:10Anthony Pompliano?

  You know that, you know that I went to, I went to the zoo?

• 11:15Speaker 02

  In his compound?

• 11:16Anthony Pompliano?

  In Columbia, hacienda de Napolés.

• 11:18Speaker 02

  Yeah, we're gonna get to that.

• 11:19Anthony Pompliano?

  All right, go ahead. Tell me about hacienda de Napolés. I went there physically. I was, I was on the ground. I went and saw it.

• 11:25Speaker 02

  I'm gonna talk about one thing before we get to that, is, I don't know if you guys are aware, but Pablo Escobar was on the Forbes billionaire list for four or five straight years, even though he was a criminal and on the run from the United States. So, in, this is from 1987, the first time he made the billionaires list. It states in the article that he was not only a US fugitive, but he was also at a net worth of approximately $3 billion in 1987. This was closer to the height of his career. I think that is extremely understated, and so does Pablo's son, because he's quoted saying, Forbes couldn't have, can't, and won't ever have access to it, to or review the accounting books from mobsters. So they can't calculate their alleged fortunes, not even close to the real figures.

• 12:07Speaker 02

  So that just speaks to like, these guys don't keep, and they might, but they don't share accounting books. They don't share what their revenue is, what their profit is, right? So everything that Forbes did in these past few years, when he was on the Forbes billionaire list, was a guess. They had no clue, right? So.

• 12:23Anthony Pompliano?

  So he probably had more money than they were saying.

• 12:24Speaker 02

  That's exactly what his son is saying, is you guys have absolutely no clue. The way mobsters work is they don't do public filings, they don't tell you what their revenue is upfront. Everything works behind the scenes, and that's exactly what he did. I think he was worth well over $3 billion at this point, considering how much money he was making.

• 12:39Anthony Pompliano?

  All right, now tell me about hacienda de Napolés.

• 12:41Speaker 02

  All right, hacienda de Napolés is an absolute compound, dude. He built a house.

• 12:47Anthony Pompliano?

  It's on the top of this mountain, so he can see 360 degrees around if anyone's coming.

• 12:51Speaker 02

  Yeah, he built it. It cost him about $60 million to build. There's the original plane from apparently the first trip he did with cocaine to the United States. And that is the entrance to the compound right there. But the compound has an airport, several swimming pools, a manmade lake, a private zoo with exotic birds, hippopotamuses.

• 13:09Anthony Pompliano?

  I fed a hippo at hacienda de colas. They still have it.

• 13:12Speaker 02

  Notoriously, once they, a bullfighting ring as well, but notoriously, once they came in and took over his compound, once he, once he was dead and everything, there was four hippos left and they, they, the hippos started reproducing. And what we call it, there's now hundreds of hippos that are just from those four, and those are the only animals that kind of stayed in the compound.

• 13:33Anthony Pompliano?

  Yeah. So what's fascinating-

• 13:35Speaker 02

  They turned it into a museum with, with an amusement park, basically.

• 13:38Anthony Pompliano?

  They sell tickets to it. You can go, if you go to Colombia, you can buy a ticket, you can go to, to this compound. You also can walk around. They have fake dinosaurs, like they have like life size.

• 13:50Speaker 02

  Those were there when he-

• 13:51Anthony Pompliano?

  Yeah, he definitely put those there because no one would be crazy enough to put that stuff there later. And then they have like, kind of like a museum area where basically it's documenting his rise, fall, and ultimate death. But you want to know the craziest part about it is as you're walking up to it, and like you still can go in this bullfighting kind of arena and everything, is the Colombian government built a massive prison on the grounds as well. And it almost felt a little bit like, oh, you know, you ran from us for so long, like whatever, like they've preserved this because I'm assuming they're making money off of it, right? As this like thing that people can go to. But my guess is that they put the, the prison there

• 14:36Anthony Pompliano?

  as well as just like- Well, there's irony in the fact that we built a Colombian prison on the ground.

• 14:44Speaker 02

  Was that the one that he built?

• 14:45Anthony Pompliano?

  That Pablo, uh.

• 14:46Speaker 02

  Because Pablo Escobar, he in 1989, when I said he was ruling with such authority and such violence, was he apparently killed a government informant by bombing an airplane, right? And obviously he went to jail for that. But the way he got around this was he built his own jail in Colombia where he would be housed. And in the most lavish Pablo Escobar fashion, he built an exceptional jail. This jail had a nightclub.

• 15:14Anthony Pompliano?

  This is not the one.

• 15:15Speaker 02

  No, this is not the one on his compound. Yeah, so his jail that he built has a nightclub, a sauna, a waterfall, telephones, computers, and everything you can think of. It, uh, look, he was, uh, he escaped from the jail after in 1992 and then went on the run. And that's when he died in 1993. He died in a shootout, um, with the police.

• 15:34Anthony Pompliano?

  So, uh, bear with us here. This is me saying this. I believe this is a video of the, uh, of the prison. We can, uh, we can play it again. There's a road that you walk up from that, uh, where the plane is as you walk towards the compound. And what you'll see here is like, this is the, uh, the prison. Uh, it did not look like the most hospitable, uh, conditions. If this is the one that I saw.

• 15:56Speaker 02

  Yeah.

• 15:57Anthony Pompliano?

  It literally like, it looked like there was almost, uh, chain linked, uh, prisons outside. Um, so it's, uh, it's, uh, it's pretty crazy. But all right. Uh, when you think about Escobar, you think that total net worth got to be about in today's terms, 65, uh, billion?

• 16:14Speaker 02

  I think it was closer with, if he sold equity in his company, for example, something like that. I think he was closer worth somewhere around a hundred billion to a hundred and 20 billion dollars.

• 16:23Anthony Pompliano?

  Yeah, so basically he'd be top five richest people in the world in today's dollars. Uh, but obviously it was nefarious purposes, but he definitely ran a multinational corporation in terms of logistics, finance, uh, distribution, marketing, the whole nine yards.

• 16:37Speaker 02

  Yeah, I mean, he knew how to, one, use people and the loyalty and the violence to kind of get what he wanted. But look, he built a massive enterprise and that goes along with, he used politicians, he used local individuals, he used trade routes, like he used everything in his hands, um, and outside of his hands, frankly, to get control on, um, to make this enterprise successful. And to be frank, he did.

• 17:00Anthony Pompliano?

  It's uh, it's crazy to think about.

• 17:01Speaker 02

  He was also nicknamed Robin Hood.

• 17:04Anthony Pompliano?

  They did, they did call.

• 17:05Speaker 02

  Seems to be thrown around a little bit too much these days.

• 17:08Anthony Pompliano?

  But here's what I'll say, there's a few folks who I think are from Columbia, actually, who are in the chat right now. And one of the things you have to remember is that like, somebody can get their revenue or their income from nefarious ways judged by both their local government, but also the international community, which I think most people would say, hey, that's what was going on here. Uh, but they still can do good things for the people of their country as he was doing. And so what it ends up doing is like, depending on who you ask, good guy, bad guy, right? Like some of these people are very, very complex and you can have bad people who also do good things. You also can have good people who do bad things. And so I think it's just, it's uh, it's fascinating to see the life

• 17:50Anthony Pompliano?

  of somebody who, especially in the United States, has now been celebritized in a way. Because for whatever reason, American culture really likes violence, guns, drugs, money, you know, all that type of stuff. And there's now, you know, all these different videos and movies and stuff.

• 18:04Speaker 02

  I mean, when you're making $420 million a week, you would assume someone's going to do a documentary or just like document the story, right?

• 18:11Anthony Pompliano?

  Yeah, that's a crazy, crazy thing. All right. Where can we send people to, uh, to follow you on, uh, on Twitter, maybe?

• 18:16Speaker 02

  Follow me on Twitter at John Pompliano, J O H N P O M P L I A N O. Couldn't make it more simple for you, first and last name.

• 18:27Anthony Pompliano?

  Oh, you're a genius. You're, you're an absolute genius.

• 18:29Speaker 02

  It's no pomp global, bud.

• 18:33Anthony Pompliano?

  All right. Thank you for coming on. Tomorrow, what, what is your criteria going to be for topics? Joe said just what he's interested in. What are your, what is your criteria going to be?

• 18:39Speaker 02

  Anything I think the people will be interested in. So DM me ideas on what you guys want to hear about. I will do the research. I'll come presented to you and we'll get down to the facts.

• 18:47Anthony Pompliano?

  Little learning, little, oh, facts, facts and truth. Yeah. Well, don't, don't tell the, uh, don't tell the ministry of truth. Don't tell the ministry of truth. They may, uh, they may shut you down.

• 18:56Speaker 02

  Yeah.

• 18:58Anthony Pompliano?

  The disinformation governance board.

• 18:59Speaker 02

  Yeah. In two days, we're going to create a new board.

• 19:04Anthony Pompliano?

  All right. I appreciate you coming on. We'll talk again tomorrow. Thanks so much for listening to today's episode. I really hope you guys enjoyed this one. Make sure you subscribe on Apple, Spotify, or your favorite podcast player. And if you're looking to try to transition to get a new job in the Bitcoin or crypto industry, we've got you covered. Head over to pompscryptocourse.com. We've developed a curriculum with the top teams across the industry. It's a three-week intensive training program with over 50 events packed into that three-week time period. Go to pompscryptocourse.com to learn more and I'll meet you guys for the next episode.