Ronald Reagan was in the White House. Eye of the Tiger was on the radio. Cocaine cowboys roamed Miami.

And the seeds for what would become perhaps the largest and most powerful crime syndicate in the hemisphere were quietly being sowed in Houston.

It was 1982, and William Hoffman, an American drug runner later tucked into the witness-protection program, was busy using rental cars to ferry 25-pound loads of Mexican marijuana from Brownsville to Houston.

Hoffman, records show, would drive to a house on Houston's Wallisville Road, where guys he knew only as “Guero” and “Gringo” would unload the pot.

But small-time was about to become big-time.

Through interviews, documents, and court testimony, the Houston Chronicle has reconstructed the origins of a tenacious syndicate which over 25 years rose from a borderland gang of pot smugglers and car thieves to a multibillion-dollar criminal empire known as the Gulf Cartel.

Hoffman's own words, offered in testimony, provide a vivid street-level look at how — as Colombia's mighty cocaine cartels had to abandon Miami and find a way to do business elsewhere in the United States — the stage was set for explosive growth among Mexico's drug gangsters who made Houston a national hub as they sought to infiltrate the United States.

“As the heat came on in Miami in the early 1980s, they started to switch their routes,” recalled Peter Hanna, a senior FBI agent who made a career chasing the cartel.

“The Mexicans said, ‘Hey, no problem, we have been smuggling stuff into the United States for years.' ”

Keeping a lower profile on U.S. soil than Colombians, who were as bold as they were extravagant, the Mexicans made money hand over fist.

Despite a quarter century of indictments and arrests of its leaders, and seizures of its drugs, cash and guns, the cartel has repeatedly reinvented itself to thrive at unprecedented levels.

As one federal intelligence agent put it, the Gulf Cartel has grown so quickly that it stands apart from other Mexican gangs and has clearly graduated from door-greeter to superstore-owner, with its territory the swath of Texas border stretching from the Gulf of Mexico westward to Big Bend.

The cartel pumps dope through pipelines connecting Latin America to Houston, and on to Atlanta, Chicago, Miami, New York and elsewhere. And when drugs are being smoked, snorted or swallowed here, the Drug Enforcement Administration contends they have been sifted through the cartel's fingers.

“I don't care where cocaine is in Houston, the Gulf Cartel owned it, touched it or got a cut from it — without question,” said Wendell Campbell, spokesman for the DEA's Houston Field Division. “Without question.”

While Hoffman, one of the few Americans in the organization, smuggled marijuana in the early 1980s, more than 1,000 miles away U.S. authorities used planes and boats to blitz the Caribbean Sea and deny Colombian cartels a primary route for pumping cocaine northward.

Washington was at the same time going after now-legendary Pablo Escobar and other Colombian drug lords by seeking to have them sent to the U.S. to face justice.

First kilos, then tons

Desperate to deliver their product, Colombian capos cut deals with longtime Mexican smugglers to move bricks of cocaine, worth more than their weight in gold, along routes Mexicans used to sneak bale-size loads of marijuana, authorities say.

By 1986, Hoffman, who couldn't speak Spanish but used his Mexican wife as a translator, was smuggling Cali-Cartel brand cocaine for the boys from south of the border. Kilos became tons, and thousands of dollars became millions in profits.

“The money got to be too good,” Hoffman testified.

The cartel's first known Fort Knox on U.S. soil was found in 1989 at a Rio Grande Valley home complete with an orchard and an underground vault buried beneath a few inches of dirt, topped by a chicken coop.

Authorities found a staggering 9 tons of cocaine worth at least $200 million in South Texas at the time, and 10 times that on the East Coast.

That same year Hoffman parked a Chevrolet Suburban at William P. Hobby Airport, keys hidden in the gas cap, and $10 million stuffed in a secret compartment to be driven to the border, records show.

Besides transporting cocaine across Mexico for the Colombians, Mexican syndicates took over smuggling and U.S. street-level distribution.

According to a 2009 Justice Department report, “National Drug Threat Assessment,” Mexico's major cartels now have a presence in at least 230 U.S. cities, from Kalamazoo, Mich., to Dodge City, Kan.

Billions in proceeds

While there are four or five major Mexican cartels, the Gulf Cartel is consistently considered at the top of the industry. The National Drug Intelligence Center estimates Mexican and Colombian cartels “generate, remove and launder” between $18 billion and $39 billion in wholesale proceeds each year.

Two generations of Gulf Cartel crime bosses — as well as their henchmen, accountants, confidants, wannabes, snitches and soldiers — have been brought to justice in Houston. Others are fugitives facing U.S. indictments.

Houston offers the cartel everything it needs: a major highway system, proximity to Mexico, a massive population with accomplices primed to pump drugs farther into the United States.

Law enforcement authorities say the city is home to hundreds of stash houses for weapons, money and drugs.

The cartel has brought with it murders, kidnapping and other crimes, as well as the collateral damage caused by drug use.

“The Mexican cartels are the most significant organized crime threat to the Western Hemisphere, without question,” said Texas Department of Public Safety director Steve McCraw, who was raised on the border.

A Gulf Cartel boss's nephew was shot in the head and left along a Houston street. A husband and wife related to another drug boss were tortured and killed by home invaders who missed 220 pounds of cocaine in the attic.

Eleven people were charged in October for their connections with a house in far northwest Houston that functioned as a covert operations center for a cartel cell, according the Bureau of Alcohol, Tobacco, Firearms and Explosives.

Agents found drug-packaging equipment, bulk cash, and thousands of rounds of ammunition, as well as night-vision goggles; “a submachine gun with a suspected silencer” and three pistols with laser sights.

The find underscored how the cartel has been able to do its business while blending into the city.

While locked up at in Harris County Jail, a street-hardened 22-year-old described cutting his teeth to break into the cartel's lowest ranks.

He told of a journey through a world where machismo flowed thicker than the guns, weapons and dope.

“Inside the family, people will be killed by their own, everyone who has balls and greed wants to be the boss,” said Carlos, who asked that his last name not be used.

He said he started out ferrying bundles across the Rio Grande as a human mule, then moved up to extorting border businesses to pay protection money, and continued looking for opportunities.

Hoffman, who was smuggling long before Carlos was born, ended up telling his story on the witness stand in Houston after the Gulf Cartel's top boss, Juan Garcia Abrego, was captured and shipped here for trial in 1996.

Lessons from a legend

Garcia, who had been arrested in the United States 12 years earlier on aging auto smuggling charges that were later dropped, was the first Mexican trafficker to make the FBI's Most Wanted list.

A report by the U.S. Attorney's Office for the Southern District of Texas contends that over a 16-year period, Garcia brought in well over 220,000 pounds of nearly pure cocaine. That equates to enough of the narcotic to get 250 million people high.

It was under Garcia's rule that the cartel grew far and wide as he capitalized on the lessons said to have been taught to him by his uncle, Juan N. Guerra, a bootlegger who later owned a trucking company and remains a Godfather-like legend in Matamoros, Mexico.

After Garcia went to prison, Osiel Cardenas Guillen, a street-smart, hot-tempered capo who started out washing cars for wise guys, took the cartel to a bigger stage, and drew U.S. ire like never before, according to reports and records.

Cardenas gained a reputation for being hands on, in your face, and not afraid to unleash brute force.

Having already corrupted members of the very armed forces sent to catch him, Cardenas used a confidant in Mexico's Special Forces to help launch the Zetas, a band of brutal enforcers, according to an unclassified DEA report. This private army known for military precision and terror, at least in Mexico, was to serve as a hit squad to kill rivals.

Cardenas went too far in 1999 when he and a gang of henchmen caught an FBI agent and a DEA agent driving through Matamoros with an informant in their car. An armed standoff ended with the agents and their snitch fleeing back to the United States.

Cardenas, who quickly landed on the FBI's most wanted list, was arrested in 2003 by the Mexican military after a shootout. But even from inside a Mexican prison, Cardenas ran the cartel and directed a turf war that tore apart Nuevo Laredo, authorities say.

It wasn't until 2007, when he was extradited to Houston, that he lost power.

Under heavy guard, his location being kept secret for his own safety, Cardenas is believed to be cooperating with prosecutors in exchange for leniency and other considerations.

‘A shell of its former self'

Stratfor, an Austin-based global intelligence company, contends the cartel can hardly survive the pounding it has taken on all fronts, and that the feared Zetas have founded their own crime syndicate that works with the Gulf Cartel when it is convenient.

“After nearly three years of bearing the brunt of Mexican military and law enforcement efforts, the Gulf Cartel is now a shell of its former self,” contends the 16-page report.

But some federal agents have said that while the Zetas have emerged and are a great threat, the dope will continue to flow and the cartels will fight to persevere.

“They are not going to go away quietly into the night,” the DEA's Campbell said. “They are going to try and establish themselves as permanent fixtures.”

dane.schiller@chron.com