The move left the DEA’s Mexico City regional office, which oversees the agency’s activities in Mexico and Central America, without a full-time residency director for at least six months beginning in June 2021 — just as the Biden administration began to address the crisis .
The upheaval at one of the DEA’s key offices was an embarrassing distraction as agents attempted to work with Mexico’s corrupt security agencies to stop drug trafficking, according to several US officials who have worked in the country in recent years.
“You can’t fix what’s wrong with the Mexican government if your own house is on fire,” said a former DEA agent. Like other current and former US officials, he spoke on condition of anonymity to discuss a sensitive personnel matter.
This week, the Justice Department’s internal watchdog said it found a DEA regional director misusing agency funds for his birthday party and for “illicit items” during trips by the agency’s top official. The director was eventually “removed from the DEA” following a second investigation, the inspector general’s office said in a summary, but gave no details.
The office did not identify the officer. Former DEA Mexico regional director Nick Palmeri confirmed to the Washington Post that the statement applies to him. He blasted the publication, which he said “erroneously states that I was removed from the DEA.” His departure, he wrote in a WhatsApp message, “should be considered compulsory 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.
When asked about the case, the agency said: “DEA holds its 10,000 employees to the highest standards of conduct and professionalism. If an employee is found not to have met these standards, DEA will take decisive action, including removal from the agency.”
The episode is the latest black eye for an agency plagued by corruption scandals, including the incarceration of a Miami-based DEA agent who pleaded guilty in 2020 to siphoning more than $9 million from undercover operations to parties to fund expensive sports cars, luxury travel and more.
Palmeri, a former New York City police officer who had worked at the DEA’s Guadalajara, Mexico office and later held a senior role in the agency’s New York office, was known as a talented investigator. He started in early 2020 as a regional director in Mexico City.
It was a particularly challenging moment. López Obrador had reduced cooperation with the DEA, citing Mexico’s sovereignty and a policy shift from focusing on capturing drug lords to running social programs for youth and the poor.
Then the corona pandemic struck.
The virus swept through the DEA office in the Mexican city of Mazatlán on the Pacific coast after agency staff held meetings in violation of the embassy’s health protocols, according to four current and former US officials. Two DEA agents became so ill they were flown to the United States, they said.
Things only got worse for the DEA. In October 2020, US authorities arrested former Mexican Defense Minister Salvador Cienfuegos in Los Angeles on allegations of drug trafficking. This sparked such outrage in Mexico that the Trump administration dropped the charges and sent the general home. López Obrador, unappeased, signed legislation severely curtailing the DEA’s activities in the country and its administration Detained visas for about 20 American agents for months.
Amid the turmoil, officials at DEA headquarters received reports of alleged mismanagement at the Mexico office. In June 2021, Palmeri was ordered back to Washington as investigators investigated the allegations.
In the summary of the report released Wednesday, the inspector general’s office said the regional director used DEA funds earmarked for professional gatherings for an inappropriate activity: his own birthday party. The director also authorized payment for “prohibited items” during the DEA’s top official’s trips, the bureau said, drawing on funds to be used for sensitive drug investigations. The items were not described.
Among the incidents investigators investigated was a party on a yacht organized for then-acting administrator of the DEA, Timothy Shea, during a visit to Panama, according to current and former DEA agents. It was not clear if 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 nurtured under his supervision with ‘minimal expenses’ were worth it.” Another former DEA agent said the yacht was rented because restaurants in Panama were on lockdown during the pandemic.
The inspector general’s office decided not to pursue criminal charges, the statement said. However, the DEA had launched a second investigation into several other questions, including whether Palmeri had improper relationships with drug traffickers’ defense attorneys, according to current and former US officials familiar with the probe.
This is a sensitive issue for the DEA: Last May, federal prosecutors charged a retired Miami agency chief and an active-duty agent with participating in an alleged scheme to leak law enforcement information to human trafficking defense attorneys.
Palmeri said he has never engaged in unethical behavior. “I strongly oppose improper contact with defense attorneys,” he told the Post. He accused the investigation of “personal revenge” by another DEA official, whom he declined to name. He said the investigation ended with a recommendation that “I be fired.”
As for the inspector general’s report, he said points were “taken out of context”. His spending on activities with Mexican officials “was professional” and benefited the US government, he said All minor procedural violations were “mostly resolved through corrective action.” Palmeri left the agency in March 2022.
One of Palmeri’s former colleagues said he was a brilliant detective but had the outspoken, larger-than-life style of many DEA agents who built their careers in New York. “They were programmed differently,” with key roles in some of the country’s biggest drug cases being put together by extremely aggressive prosecutors, the ex-official said. “It was okay to stay on the limit.”
While Palmeri was not in Mexico and under investigation, the DEA regularly sent a respected senior official, Paul Knierim, to represent him. A permanent replacement was appointed in November 2021. But that new director, Todd Zimmerman, didn’t move into the country full-time until mid-2022, according to a State Department official, who spoke on condition of anonymity to discuss personnel matters.
While Palmeri was under investigation, US law enforcement faced a mounting fentanyl crisis. According to the latest available data, more than 107,000 Americans died from drug overdoses in 2021. Two-thirds of these 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 2021 death data from the Centers for Disease Control and Prevention.
The flow of the cheap drug across the US border doesn’t seem to be slowing down. The DEA seized more than 50 million illegal fentanyl tablets last year — double the number in 2021 — and over 10,000 pounds of fentanyl powder. Mexico’s two largest drug cartels, which traffic most of U.S. fentanyl, are “the DEA’s top operational priority,” agency administrator Anne Milgram said in December.
Kevin Sieff in Mexico City and Scott Higham, Perry Stein and Cate Brown in Washington contributed to this report.