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DID MEXICO REACH A TURNING POINT IN THE DRUG WAR?

February 17, 2012 by 1 Comment

THE HISPANIC BLOG IS THE LATEST HISPANIC NEWS BY JESSICA MARIE GUTIERREZ

Meth in Mexico: A Turning Point in the Drug War?

photo by cbs/associated press

The Largest Seizure of Methamphetamine in Mexican History

Mexican authorities announced Feb. 8 the largest seizure of methamphetamine in Mexican history — and possibly the largest ever anywhere — on a ranch outside of Guadalajara. The total haul was 15 tons of pure methamphetamine along with a laboratory capable of producing all the methamphetamine seized. While authorities are not linking the methamphetamine to any specific criminal group, Guadalajara is a known stronghold of the Sinaloa Federation, and previous seizures there have been connected to the group.

photo by Bruno Gonzalez from the Associated Press - A soldier stands in a room full of barrels containing white and yellow powder Thursday after the seizure of a small ranch in Tlajomulco de Zuniga, on the outskirts of Guadalajara, Mexico. According to the Mexican army, 15 tons of pure methamphetamine were seized at the ranch, an amount equivalent to half of all meth seizures worldwide in 2009.

Methamphetamine, a synthetic drug manufactured in personal labs for decades, is nothing new in Mexico or the United States. The U.S. Drug Enforcement Administration (DEA) has led numerous crusades against the drug, increasing regulations on its ingredients to try to keep it from gaining a foothold in the United States. While the DEA’s efforts have succeeded in limiting production of the drug in the United States, consumption has risen steadily over the past two decades. The increasing DEA pressure on U.S. suppliers and the growing demand for methamphetamine have driven large-scale production of the drug outside the borders of the United States. Given Mexico’s proximity and the pervasiveness of organized criminal elements seeking new markets, it makes sense that methamphetamine would be produced on an industrial scale there. Indeed, Mexico has provided an environment for a scale of production far greater than anything ever seen in the United States.

Cocaine trail ... a soldier stands guard as seized cocaine is burnt in Matamoros, Mexico. Photo: Gerardo Magallon
Authorities believe one of the world's most powerful and notorious Mexican drug cartels, the Sinaloa, has infiltrated Australia. Read more: http://www.smh.com.au/national/mexicos-most-wanted-man-taking-over-cocaine-trade-20100914-15azd.html#ixzz1mbdaIp9M

But last week’s methamphetamine seizure sheds light on a deeper shift in organized criminal activity in Mexico — one that could mark a breakthrough in the violent stalemate that has existed between the Sinaloa Federation, Los Zetas and the government for the past five years and has led to an estimated 50,000 deaths. It also reveals a pattern in North American organized crime activity that can be seen throughout the 20th century as well as a business opportunity that could transform criminal groups in Mexico from the drug trafficking intermediaries they are today to controllers of an independent and profitable illicit market.

Dark yellow is where Zetas control light yellow portion is disputed territory photo from wikipedia

While the trafficking groups in Mexico are commonly called “cartels,” they are not really cartels. A cartel is a combination of groups cooperating to control the supply of a commodity. The primary purpose of a cartel is to set the price of a commodity so that buyers cannot negotiate lower prices. The current conflict in Mexico over cocaine and marijuana smuggling routes shows that there are deep rifts between rival groups like the Sinaloa Federation and Los Zetas. There is no sign that they are cooperating with each other to set the price of cocaine or marijuana. Also, since most of the Mexican criminal groups are involved in a diverse array of criminal activities, their interests go beyond drug trafficking. They are perhaps most accurately described as “transnational criminal organizations” (TCOs), the label currently favored by the DEA.

Examples from the Past

photo from Hub Pages - FARC girl with gun

While the level of violence in Mexico right now is unprecedented, it is important to remember that the Mexican TCOs are businesses. They do use violence in conducting business, but their top priority is to make profits, not kill people. The history of organized crime shows many examples of groups engaging in violence to control an illegal product. During the early 20th century in North America, to take advantage of Prohibition in the United States, organized criminal empires were built around the bootlegging industry. After the repeal of Prohibition, gambling and casinos became the hot market. Control over Las Vegas and other major gambling hubs was a business both dangerous and profitable. Control over the U.S. heroin market was consolidated and then dismantled during the 1960s and 1970s. Then came cocaine and the rise in power, wealth and violence of Colombian groups like the Medellin and Cali cartels.

photo by vegasondemand.com

But as U.S. and Colombian law enforcement cracked down on the Colombian cartels — interdicting them in Colombia and closing down their Caribbean smuggling corridors — Colombian producers had to turn to the Mexicans to traffic cocaine through Mexico to the United States. To this day, however, Colombian criminal groups descended from the Medellin and Cali cartels control the cultivation and production of cocaine in South America, while Mexican groups increasingly oversee the trafficking of the drug to the United States, Europe and Africa.

The Mexican Weakness

 While violence has been used in the past to eliminate or coerce competitors and physically take control of an illegal market, it has not proved to be a solution in recent years for Mexican TCOs. The Medellin cartel became infamous for attacking Colombian state officials and competitors who tried to weaken its grasp over the cocaine market. Going back further, Benjamin “Bugsy” Siegel is thought to have been murdered over disagreements about his handling of the Flamingo Hotel in Las Vegas.


The Flamingo Hotel, Las Vegas, 1946. It was Siegel's last big project. When the hotel-casino failed to bring an immediate profit, it was the end for Bugsy.

Before that, Prohibition saw numerous murders over control of liquor shipments and territory. In Mexico, we are seeing an escalating level of such violence, but few of the business resolutions that would be expected to come about as a result. Geography helps explain this. In Mexico, the Sierra Madre mountain range splits the east coast and the west from the center. The Gulf of Mexico and the Pacific Ocean coastal plains tend to develop their own power bases separate from each other.

Mexican drug traffickers are also split by market forces. With Colombian criminal groups still largely controlling the production of cocaine in jungle laboratories, Mexican traffickers are essentially middlemen. They must run the gauntlet of U.S.-led international interdiction efforts by using a combination of Central American traffickers, corruption and street-gang enforcers. They also have to move the cocaine across the U.S. border, where it gets distributed by hundreds of street gangs.

Profit is the primary motivation at every step, and each hurdle the Mexican traffickers have to clear cuts into their profit margins. The cocaine producers in Colombia, Peru and Bolivia can play the Sinaloa Federation and Los Zetas (as well as others) off of each other to strengthen their own bargaining position. And even though keeping the traffickers split appears to create massive amounts of violence in Mexico, it benefits the politicians and officials there, who can leverage at least the presence of a competitor for better bribes and payoffs.

Sinaloa cartel in dark yellow light yellow is disputed territory photo from wikipedia

For Mexican drug traffickers, competition is bad for the bottom line, since it allows other actors to exploit each side to get a larger share of the market. Essentially, everyone else in the cocaine market benefits by keeping the traffickers split. The more actors involved in cocaine trafficking, the harder it is to control it.

The Solution

Historically, organized criminal groups have relied on control of a market for their source of wealth and power. But the current situation in Mexico, and the cocaine trade in general, prevents the Mexican groups (or anyone) from controlling the market outright. As long as geography and market forces keep the traffickers split, all sides in Mexico will try to use violence to get more control over territory and market access. 

Mexican federal police lead suspected members of the 'Familia Michoacana' drug cartel to a news conference at the federal police center in Mexico City Photo: REUTERS

Mexican criminal organizations can overcome their weakness in the cocaine market by investing the money they have earned (billions of dollars, according to the most conservative estimates) into the control of other markets. Ultimately, cocaine is impossible for the Mexicans to control because the coca plant can only grow in sufficient quantity in the foothills of the Andes. It would be prohibitively expensive for the Mexicans to take over control of coca cultivation and cocaine production there. Mexican criminal organizations are increasing their presence in the heroin market, but while they can grow poppies in Mexico and produce black-tar heroin, Afghanistan still controls a dominant share of the white heroin market — around 90 percent. 

In 2009, shark carcasses were stuffed with 894 kilograms of cocaine. A month later, Costa Rican authorities also seized another 419 kilos of cocaine from a fisherman, who carried the drug in refrigerated truck, hidden beneath the layers of red snapper and shark.

What Mexicans can control is the methamphetamine market. What we are seeing in Mexico right now — unprecedented amounts of the seized drug — is reminiscent of what we saw over the past century in the infancy of the illegal liquor, gambling, heroin and cocaine markets: an organized criminal group industrializing production in or control of a loosely organized industry and using that control to set prices and increase its power. Again, while illegal methamphetamine has been produced in the United States for decades, regulatory pressure and law enforcement efforts have kept it at a small scale; seizures are typically measured in pounds or kilograms and producers are on the run.

Display of methamphetamine seized in Project Coronado: Source: DEA

Mexican producers have also been in the market for a long time, but over the past year we have seen seizures go from being measured in kilograms to being measured in metric tons. In other words, we are seeing evidence that methamphetamine production has increased several orders of magnitude and is fast becoming an industrialized process.

Credit: Photo courtesy Customs & Border Protection.
Customs and Border Patrol officials find 25 pounds of methamphetamine smuggled from Mexico in a Mercedes tire in February, 2010.

In addition to the 15 tons seized last week, we saw a record seizure of 675 tons of methylamine, a key ingredient of methamphetamine, in Mexico in December. From 2010 to 2011, seizures of precursor chemicals like methylamine in Mexico increased 400 percent, from 400 tons to 1,600 tons. These most recent reports are similar to reports in the 1920s of U.S. liquor seizures going from barrels to shiploads, which indicated bootlegging was being conducted on an industrial scale. They are also eerily similar to the record cocaine seizure in 1984 in Tranquilandia, Colombia, when Colombian National Police uncovered a network of jungle cocaine labs along with 13.8 metric tons of cocaine. It was the watershed moment, when authoritiesmoved from measuring cocaine busts in kilograms to measuring them in tons, and it marked the Medellin cartel’s rise to power over the cocaine market.

A True Mexican Criminal Industry?

generic mexico arrest handcuffs border immigration smuggling bounty (CBS/AP)

Anyone can make methamphetamine, but it is a huge organizational, financial and legal challenge to make it on the industrial level that appears to be happening in Mexico. The main difference between the U.S. labs and the Mexican labs is the kind of input chemicals they use. The U.S. labs use pseudoephedrine, a pharmaceutical product heavily regulated by the DEA, as a starting material, while Mexican labs use methylamine, a chemical with many industrial applications that is more difficult to regulate. And while pseudoephedrine comes in small individual packages of cold pills, methylamine is bought in 208-liter (55-gallon) barrels. The Mexican process requires experienced chemists who have mastered synthesizing methamphetamine on a large scale, which gives them an advantage over the small-time amateurs working in U.S. methamphetamine labs.

photo by the Joint Interagency Task Force - West

Thus, while methamphetamine consumption has been steadily growing in the United States for the past two decades — and at roughly $100 per gram, unpure methamphetamine is just as profitable on the street as cocaine — it is even more profitable for Mexican traffickers. Methamphetamine does not come with the overhead costs of purchasing cocaine from Colombians and trafficking valuable merchandise through some of the most dangerous countries in the Western Hemisphere. Precursor materials such as methylamine used in methamphetamine production are cheap, and East Asian producers appear to be perfectly willing to sell the chemicals to Mexico. And because methamphetamine is a synthetic drug, its production does not depend on agriculture like cocaine and marijuana production does. There is no need to control large swaths of cropland and there is less risk of losing product to adverse weather or eradication efforts.

In Mexico City, the military has a museum used to train officials, diplomats and cadets about the war on drugs. Samples of various drugs including cocaine are labeled in a glass case. (Sarah L. Voisin/The Washington Post)

For the Mexican TCOs, industrializing and controlling the methamphetamine market offers a level of real control over a market that is not possible with cocaine. We expect fighting over the methamphetamine market to maintain violence at its current levels, but once a group comes out on top it will have far more resources to expel or absorb rival TCOs. This process may not sound ideal, but methamphetamine could pick the winner in the Mexican drug war.

Read More: Stratfor

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WAS THE CARTEL ‘METH BOSS’ JAIME HERRERA ARRESTED?

February 14, 2012 by 1 Comment

The Hispanic Blog by Jessica Marie Gutierrez

20120214-163803.jpg

Mexican police say they’ve captured one of the country’s main producers of the illegal synthetic drug methamphetamine.

The suspect Jaime Herrera was detained in Culiacan in Sinaloa state along with an alleged accomplice.

He’s alleged to have close links to Mexico’s most wanted trafficker, the fugitive Sinaloa cartel leader Joaquin “El Chapo” Guzman.

Read More: http://www.bbc.co.uk/news/world-latin-america-17034435

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HOW THE MEXICAN DRUG CARTEL TOOK OVER AND MEXICO’S ELECTION!

February 9, 2012 by 2 Comments

THE HISPANIC BLOG IS THE LATEST HISPANIC NEWS BY JESSICA MARIE GUTIERREZ

HOW THE MEXICAN DRUG CARTEL TOOK OVER AND MEXICO’S ELECTION

Mexico will hold its presidential election July 1 against the backdrop of a protracted war against criminal cartels in the country. Former President Vicente Fox of the National Action Party (PAN) launched that struggle; his successor, Felipe Calderon, also of the PAN, greatly expanded it. While many Mexicans apparently support action against the cartels, the Calderon government has come under much criticism for its pursuit of the cartels, contributing to Calderon’s low popularity at the moment. The PAN is widely expected to lose in July to the Institutional Revolutionary Party (PRI), which controlled the Mexican presidency for most of the 20th century until Fox’s victory in 2000. According to polls, the PAN has lost credibility among many Mexican voters, many of whom also once again view the PRI as a viable alternative. Many Mexicans seem to believe that the Calderon administration could attempt to pull off some sort of last-minute political coup (in U.S. political parlance, an “October surprise”) to boost the PAN’s popularity so it can retain the presidency.

The potential election ploy most often discussed is the capture of Joaquin “El Chapo” Guzman Loera, the leader of the Sinaloa cartel, who is widely believed to be the richest, most powerful drug trafficker anywhere. The reasoning goes that if the government could catch Guzman, Calderon’s (and hence the PAN’s) popularity would soar. The National Action Party, Mexico’s ruling party, on Sunday, February 5th chose Former congresswoman Josefina Vasquez Mota to run for president, the first time a major party has nominated a woman to compete for the nation’s top office.

Plata o Plomo

Mexico’s cartels have begun to form into two major groupings around the two most powerful cartels, the Sinaloa cartel and Los Zetas. These two cartels approach business quite differently. The common Mexican cartel expression “plata o plomo” (literally translated as “silver or lead,” the Spanish phrase signifying that a cartel will force one’s cooperation with either a bribe or a bullet) illustrates the different modes of operation of the two hegemonic cartels.

Los Zetas, an organization founded by former Mexican special operations soldiers, tends to apply a military solution to any problem first — plomo. They certainly bribe people, but one of their core organizational values is that it is cheaper and easier to threaten than to bribe. Rather than retain people on their payroll for years, Los Zetas also tend toward a short time horizon with bribery.
By contrast, people like Guzman and Ismael “El Mayo” Zambada Garcia, founders of the Sinaloa cartel, have been producing and trafficking narcotics for decades. Guzman and Zambada got their start in the trafficking business working for Miguel “El Padrino” Angel Felix Gallardo, the leader of the powerful Guadalajara cartel in the early 1980s. Because they have been in the illicit logistics business for decades, the Sinaloa leaders are more business-oriented than military-oriented. This means that the Sinaloa cartel tends to employ plata first, preferring to buy off the people required to achieve its objectives. It also frequently provides U.S. and Mexican authorities with intelligence pertaining to its cartel enemies rather than taking direct military action against them, thus using the authorities as a weapon against rival cartels. While Sinaloa does have some powerful enforcement groups, and it certainly can (and does) resort to ruthless violence, violence is merely one of the many tools at its disposal rather than its preferred approach to a given problem.

Thus, Sinaloa and Los Zetas each use the same set of tools, they just tend to use them in a different order.

Guzman’s Web

Within his home territory of rural Sinaloa state, Guzman is respected and even revered. An almost-mythical figure, he has used his fortune to buy good will and loyalty in his home turf and elsewhere. In addition to his public largesse, Guzman has bribed people for decades. Unlike Los Zetas, the Sinaloa cartel leadership tends to take a long view on corruption. It will often recruit a low-level official and then continue to pay that person as he rises through the ranks. This long-term approach is not unlike that taken by some of the more patient intelligence services, along the lines of the Soviet recruitment of the “Cambridge Five” while they were still students. Quite simply, Guzman and the Sinaloa cartel have had police and military officers, politicians, journalists and judges on their payroll for years and even decades.
This intelligence agency-like approach has permitted the Sinaloa leadership to construct a wide web of assets with which to gather intelligence and serve as its agents of influence. At the street level, all Mexican cartels employ lookouts called “halcones,” Spanish for “falcons,” who provide their cartel masters with early warning of law enforcement or rival cartel activity in the halcones’ area of responsibility. Higher-ranking officials on a cartel’s payroll essentially serve as high-level halcones who provide early warnings when government operations against the cartel are being planned. Such advanced warning allows the cartels to protect their shipments and leadership.
Once an official or politician is on a cartel payroll (a situation similar to a network of sources run by an intelligence agency), he is subject to blackmail should he stop cooperating. And the relationship between a politician and the cartels can go beyond just cash. It can also involve the murder of a rival or provide other forms of non-cash assistance in the attainment of political power.
Whatever the relationship entails, once a cartel gets its hooks into a person, it tends not to let go — and the person thus entangled has little choice but to continue cooperating, since he can be subject to arrest and political or financial ruin if he is caught. He also can be assassinated should he decide to quit cooperating. No Mexican politician wants to become the next Raul Salinas de Gortari, the brother of former President Carlos Salinas de Gortari, who the U.S. government alleges made hundreds of millions of dollars in dirty money, much of it from cartel figures. Raul Salinas’ arrest in 1995 for murder, the subsequent money laundering charges brought against him, and questions about what his brother Carlos knew about his activities were important factors in the 2000 presidential election in which the PRI lost.

Featured is the PRI’s Enrique Pena Nieto presidential candidate with soap opera star and wife Angelica Rivera. He is perceived as the insurmountable favorite to become Mexico’s next president this year. Peña Nieto’s long-held advantage in public opinion polls represents the PRI’s best shot at recapturing the office that it lost in the 2000 Presidential elections. The party’s popularity is an astonishing accomplishment for a group once synonymous with the corruption and authoritarianism of Mexico’s 71-year one-party rule. Peña Nieto’s fresh image and celebrity lifestyle (he is married to former soap-star Angelica Rivera) has for the most part succeeded in rebranding his party as one of youth, idealism, and competence. The elitism that Paulina Peña Nieto’s tweet projected is exactly the type of depiction that the party has worked to disassociate itself with.


This fear of being linked to a figure like Guzman serves as a strong deterrent to his arrest. Guzman has been operating as a high-level narcotics trafficker in Mexico for decades now, and a big part of his operations has involved bribery. For example, in November 2008, Mexico’s drug czar, Noe Ramirez Mandujano, was arrested and charged with accepting $450,000 a month from Zambada and the Beltran Leyva brothers, who were aligned with Sinaloa at the time.
If Guzman were to talk to authorities after his arrest, he could implicate a number of very powerful political and business figures. Indeed, it is likely this fear led to the delicate treatment he received after his 1993 arrest in Guatemala and his subsequent conviction in Mexico for narcotics trafficking and bribery. Guzman was able to continue to run his criminal empire from behind bars, and it was only when it appeared that Guzman might face extradition to the United States that he chose to escape from his comfortable prison cell in January 2001. Since his escape, he undoubtedly has continued to add strands to the web of protection surrounding him.
We must also note that without Guzman, the dynamics that drive the Mexican cartels would continue, and other leaders or even organizations would rise to take his place. Killing or arresting an individual will not be the end of Mexico’s criminal cartels.

Mexico’s current President Felipe Calderon.

That said, a long line of powerful Mexican cartel leaders have been arrested. Guzman’s mentor, Felix Gallardo, was arrested in 1989 in large part due to U.S. pressure on the Mexican government in the wake of the torture and murder of U.S. Drug Enforcement Administration special agent Enrique Camarena. Gulf cartel founder Juan Garcia Abrego, also a protege of Felix Gallardo, was arrested in 1996. Garcia Abrego allegedly was linked to Raul Salinas and other high-ranking officials in the government of then-President Ernesto Zedillo. Garcia Abrego’s successor as leader of the Gulf cartel, Osiel Cardenas Guillen, was arrested in 2003 and, like Garcia Abrego, was deported to the United States and convicted in a U.S. court; he is currently incarcerated in the “Supermax” penitentiary in Florence, Colo. Indeed, Guzman and Zambada are the last of Felix Gallardo’s proteges still at large.If Guzman is concerned that he could be killed rather than captured, like his former associate Arturo Beltran Leyva, it is possible that he could have prepared some type of insurance document incriminating powerful people on Sinaloa’s payroll. As a deterrent to Guzman’s killing, Sinaloa could threaten to release such a document should Guzman be killed.
Along with Zambada, Guzman has been a high-profile fugitive for three decades now. He has not survived that long by being careless or stupid. It would be very difficult to track down such an individual in a short window of time established by political calculations unless those responsible already know his exact location and have chosen not to arrest him thus far. The Calderon administration and the PAN have struggled with public perceptions for some time now, making it likely that if high-level PAN officials knew where Guzman was and wanted to arrest him for the public relations bump such an operation could provide, they already would have done so.
Still, Guzman is one of the most wanted individuals in the world, and large teams of Mexican and U.S. law enforcement and intelligence agents are trying to locate him. Therefore, it is possible that Guzman could be arrested before the election in July. Any operation to capture him would be tightly compartmentalized for fear it could leak out to high-ranking halcones in the Mexican (or U.S.) government. Indeed, special Mexican units working closely with U.S. counterparts and segregated from any outside contact so that they cannot betray their mission — or the intelligence that led to it — normally carry out such sensitive operations. This means such an operation would likely be beyond the control of Mexican politicians to mandate, although they could conceivably provide actionable intelligence to the forces involved in such an operation.
Interestingly, with all the chatter of an election surprise floating around Mexico, any arrest at this point would be met with a great deal of skepticism. The arrest of such a powerful figure would almost certainly become very politicized with all parties attempting to use it to their advantage — and dodge any connections they might have to Sinaloa. Such an environment would serve to bring more attention to the issue of corruption and collusion between the cartels and the government. And that could end up hurting rather than benefiting the PAN in the upcoming presidential election.

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