As illegal fentanyl was surging across the U.S. southwestern border, the Drug Enforcement Administration’s Mexico office was in turmoil for more than six months with a director recalled to Washington while investigators probed his conduct, according to current and former U.S. officials.
The investigation, which has not been previously reported, came at a critical time. Cooperation between the DEA and Mexican authorities had deteriorated under the nationalist government of President Andrés Manuel López Obrador. Drug overdose deaths in the United States, meanwhile, were soaring to record levels, as Mexico consolidated its role as the No. 1 source of fentanyl in the United States.
The move left the DEA regional office in Mexico City, which oversees the agency’s operations in Mexico and Central America, without a full-time resident director for at least six months beginning in June 2021 — just as the Biden administration was starting to confront the crisis.
The upheaval in one of the DEA’s most important offices was an embarrassing distraction as agents tried to work with Mexico’s corruption-ridden security agencies to deter drug trafficking, according to several U.S. officials who worked in the country in recent years.
“You can’t fix what’s going wrong in the Mexican government if your own house is on fire,” said one ex-DEA agent. Like other current and former U.S. officials, he spoke on the condition of anonymity to discuss a sensitive personnel matter.
This week the Justice Department’s internal watchdog said it had found that a DEA regional director misused agency funds for his birthday party and for “unallowable items” during trips by the agency’s top official. The director was ultimately “removed from DEA” based on a second investigation, the Office of the Inspector General said in a summary, but it provided no details.
The office didn’t identify the official. The DEA’s former Mexico regional director, Nick Palmeri, confirmed to The Washington Post that the statement referred to him. He blasted the release, which he said “erroneously states that I was removed from the DEA.” His departure, he wrote in a WhatsApp message, “should be considered as a forced retirement.”
He said the investigation into his spending “was used as part of an ill-conceived narrative to remove me from my position” due to an internal feud at the agency.
The agency, asked about the case, said: “The DEA holds its 10,000 employees to the highest standards of conduct and professionalism. When an employee is found to have not lived up to those standards, DEA takes decisive action, including removal from the agency.”
The episode is the latest black eye for an agency that’s been buffeted by corruption scandals, including the jailing of a Miami-based DEA agent who pleaded guilty in 2020 to diverting more than $9 million from undercover operations to fund pricey sports cars, luxury travel and parties.
Palmeri, a onetime New York City police officer who had worked at the DEA office in Guadalajara, Mexico, and later held a senior role in the agency’s New York office, was known as a talented investigator. He started as regional director in Mexico City in early 2020.
It was a particularly challenging moment. López Obrador had reduced cooperation with the DEA, citing Mexico’s sovereignty and a shift in policy from focusing on capturing drug kingpins to running social programs for youth and the poor.
Then the coronavirus pandemic struck.
The virus swept through the DEA’s office in the Pacific coast city of Mazatlán, Mexico, after agency employees held meetings in violation of embassy health protocols, according to four current and former U.S. officials. Two DEA agents became so ill they were medivacked to the United States, they said.
Things only got worse for the DEA. In October 2020, U.S. authorities arrested former Mexican defense minister Salvador Cienfuegos in Los Angeles on drug-trafficking allegations. That provoked such outrage in Mexico that the Trump administration dropped the charges and sent the general home. López Obrador, unmollified, signed a law sharply limiting the DEA’s activities in the country, and his administration held up visas for about 20 American agents for months.
Amid the turbulence, officials at DEA headquarters began receiving reports of alleged mismanagement in the Mexico office. In June 2021, Palmeri was ordered back to Washington as investigators probed the allegations.
In the report summary released Wednesday, the inspector general’s office said the regional director had used DEA funds intended for professional gatherings for an inappropriate activity: his own birthday party. The director also approved payment for “unallowable items” during trips by the DEA’s top official, the office said, dipping into funds that were supposed to be used for sensitive drug investigations. It did not describe the items.
Among the incidents that investigators scrutinized was a party on a yacht organized for then-DEA acting administrator Timothy Shea during a visit to Panama, according to current and former DEA agents. It was not clear whether the investigators found any wrongdoing; Shea, a Trump appointee, declined to comment. Palmeri said that renting the yacht was “100% justified and professional” and that “the results and relationships cultivated” on his watch with “minimal expenditures” were worth it. Another former DEA agent said the yacht was rented because restaurants in Panama were off-limits during the pandemic.
The inspector general’s office decided not to seek criminal prosecution, it said in its statement. But the DEA had opened a second investigation into several other questions, including whether Palmeri had improper relationships with defense attorneys for drug traffickers, according to current and former U.S. officials knowledgeable about the probe.
That’s a sensitive subject for the DEA: Last May, federal prosecutors charged a retired agency supervisor in Miami and an active-duty agent with taking part in an alleged scheme to pass law enforcement information to defense attorneys representing traffickers.
The DEA declined to provide any details on that second probe. But the Associated Press, citing internal agency documents, said one focus was a two-day visit by Palmeri and his wife in early 2021 to a home in the Florida Keys owned by David Macey, a prominent defense attorney. The trip violated agency rules aimed at avoiding the appearance of impropriety, the AP said.
Palmeri, in a message to The Post, acknowledged making the visit but said he hadn’t been involved in a case linked to Macey in years.
The AP said Palmeri also met privately with a confidential source during that trip. “There was no contemporaneous official DEA documentation” on the debriefing, a violation of DEA policy, investigators wrote, according to the AP. A former DEA official with knowledge of the investigation confirmed to The Post that the meetings were central to the probe.
Palmeri said he never engaged in any unethical behavior. “I strongly deny improper contact with defense attorneys,” he told The Post. He blamed the investigation on a “personal vendetta” by another DEA official, whom he declined to identify. He said the probe had concluded with a recommendation that “I be terminated.”
As for the inspector general’s report, he said, items were “taken out of context.” His expenditures on activities with Mexican officials “were professional” and benefited the U.S. government, he said, and any minor procedural violations were “most often resolved with corrective actions.” Palmeri left the agency in March 2022.
One of Palmeri’s former colleagues said he was an outstanding investigator but had the freewheeling, bigger-than-life style of many DEA agents who’d built their careers in New York. “They were programmed differently,” with major roles in some of the country’s biggest drug cases, assembled by highly aggressive prosecutors, the ex-official said. “It was okay to stay on the edge.”
While Palmeri was out of Mexico and under investigation, officials said, the DEA periodically sent a respected senior official, Paul Knierim, to fill in. A permanent replacement was named in November 2021. But that new director, Todd Zimmerman, didn’t move to the country full time until mid-2022, according to a State Department official, who spoke on the condition of anonymity to discuss personnel matters.
While Palmeri was being investigated, U.S. law enforcement was facing a mounting fentanyl crisis. More than 107,000 Americans died of drug overdoses in 2021, the latest data available. Two-thirds of those were caused by fentanyl. The synthetic opioid has become the leading cause of death for Americans ages 18 to 49, according to a Post analysis of death data for 2021 from the Centers for Disease Control and Prevention.
The flow of the cheap drug across the U.S. border shows no sign of diminishing. The DEA seized more than 50 million illegal fentanyl tablets last year — twice the number in 2021 — and over 10,000 pounds of fentanyl powder. Mexico’s two biggest drug cartels, which traffic most of the U.S. fentanyl, are the “DEA’s top operational priority,” the agency’s administrator, Anne Milgram, said in December.DEA LEO Investigation Opioid Crisis