Constraints Facing the Next Mexican President

A very interesting post from www.Stratfor.com  about Mexico's new President. This follows this post about guns in Mexico.  This follows this article about American energy independence and preventing money from going to hostile countries such as Iran . For more about what is happening in the nation now click here and you can read a very interesting book HERE!


Constraints Facing the Next Mexican President



Stratfor

By Scott Stewart

Vice President of Analysis



Enrique Pena Nieto will be sworn in as Mexico's next president Dec. 1. He will take office at a very interesting point in Mexican history. Mexico is experiencing an economic upturn that may become even more pronounced if Pena Nieto's Institutional Revolutionary Party administration is able to work with its rivals in the National Action Party to enact needed reforms to Mexico's labor, financial and energy laws.



Another arrestor to further expanding Mexico's economy has been the ongoing cartel violence in Mexico and the dampening effect it has had on outside investment and tourism. Pena Nieto realizes that Mexico's economy would be doing even better were it not for the chilling effect of the violence. During his campaign, he pledged to cut Mexico's murder rate in half by the end of his six-year term, to increase the number of federal police officers and to create a new gendarmerie to use in place of military troops to combat heavily armed criminals in Mexico's most violent locations.



According to Mexico's El Universal newspaper, Pena Nieto is also proposing to eliminate the Secretariat of Public Security and consolidate its functions, including the federal police, under the Secretariat of the Interior. This move is intended to increase coordination of federal efforts against the cartels and to fight corruption. The federal police are under heavy scrutiny for the involvement of 19 officers in the Aug. 24 attack against a U.S. diplomatic vehicle in Tres Marias, Morelos state. This incident has long faded from attention in the United States, but the investigation into the attack remains front-page news in Mexico.



Of course, there are also commentators who note that Pena Nieto's election is a return to power for the Institutional Revolutionary Party, which held power in Mexico for some 70 years prior to the election of Vicente Fox of the National Action Party in 2000, and Felipe Calderon in 2006. This narrative claims that Pena Nieto will quickly return to the Institutional Revolutionary Party policy of negotiating with and accommodating the cartel organizations, which will solve Mexico's violence problem.



Unfortunately for Mexico, neither law enforcement reforms nor a deal with the cartels will quickly end the violence. The nature of the Mexican drug cartels and the dynamic between them has changed considerably since Pena Nieto's party lost the presidency, and the same constraints that have faced his two most recent predecessors, Vicente Fox and Felipe Calderon, will also dictate his policy options as he attempts to reduce cartel violence.



Constraints

As George Friedman noted about the U.S. presidential election, candidates frequently aspire to institute particular policies when elected, but once in office, presidents often find that their policy choices are heavily constrained by outside forces. This same concept holds true for the president of Mexico.



Fox and Calderon each came into office with plans to reform Mexico's law enforcement agencies, and yet each of those attempts has failed. Indeed, recent Mexican history is replete with police agencies dissolved or rolled into another agency due to charges of corruption. The Federal Investigative Agency, established in 2001 by the Fox administration, is a prime example of a "new" Mexican law enforcement agency that was established to fight -- and subsequently dissolved because of -- corruption. Pena Nieto's plans for law enforcement reform will be heavily constrained by this history -- and by Mexican culture. Institutions tend to reflect the culture that surrounds them, and it is very difficult to establish an institution that is resistant to corruption if the culture surrounding the institution is not supportive of such efforts.



Another important constraint on the Pena Nieto administration is that the flow of narcotics from South America to the United States has changed over the past two decades. Due to enforcement efforts by the U.S. government, the routes through the Caribbean have been largely curtailed, shifting the flow increasingly toward Mexico. At the same time, the Colombian and U.S. authorities have made considerable headway in their campaign to dismantle the largest of the Colombian cartels. This has resulted in the Mexican cartels becoming increasingly powerful. In fact, Mexican cartels have expanded their control over the global cocaine trade and now control a good deal of the cocaine trafficking to Europe and Australia.



While the Mexican cartels have always been involved in the smuggling of Marijuana to the United States, in recent years they have also increased their involvement in the manufacturing of methamphetamine and black-tar heroin for U.S. sale while increasing their involvement in the trafficking of prescription medications like oxycodone. While the cocaine market in the United States has declined slightly in recent years, use of these other drugs has increased, creating a lucrative profit pool for the Mexican cartels. Unlike cocaine, which the Mexicans have to buy from South American producers, the Mexican cartels can exact greater profit margins from the narcotics they produce themselves.



This change in drug routes and the type of drugs moved means that the smuggling routes through Mexico have become more lucrative then ever, and the increased value of these corridors has increased the competition to control them. This inter-cartel competition has translated into significant violence, not only in cities that directly border on the United States like Juarez or Nuevo Laredo but also in port cities like Veracruz and Acapulco and regional transportation hubs like Guadalajara and Monterrey.



Cartels Evolve

The nature of the Mexican cartels themselves has also changed. Gone are the days when a powerful individual such as Miguel Angel Felix Gallardo could preside over a single powerful organization like the Guadalajara cartel that could control most of the drug trafficking through Mexico and resolve disputes between subordinate trafficking organizations. The post-Guadalajara cartel climate in Mexico has been one of vicious competition between competing cartels -- competition that has become increasingly militarized as cartel groups recruited first former police officers and then former special operations soldiers into their enforcer units. Today's Mexican cartels commonly engage in armed confrontations with rival cartels and the government using military ordnance, such as automatic weapons, hand grenades and rocket-propelled grenades.



It is also important to realize that government operations are not the main cause of violence in Mexico today. Rather, the primary cause of the death and mayhem in Mexico is cartel-on-cartel violence. The Calderon administration has been criticized for its policy of decapitating the cartel groups, which has in recent years resulted in the fragmenting of some cartels such as the Beltran Leyva Organization, La Familia Michoacana and the Gulf cartel -- and thus an increase in intra-cartel violence. But such violence began in the 1990s, long before the decapitation strategy was implemented.



Because the struggle for control of lucrative smuggling routes is the primary driver for the violence, even if the Pena Nieto administration were to abandon the decapitation strategy and order the Mexican military and federal police to stand down in their operations against the cartels, the war between the cartels would continue to rage on in cities such as Monterrey, Nuevo Laredo, Guadalajara and Acapulco. Because of this, Pena Nieto will have little choice but to continue the use of the military against the cartels for the foreseeable future. The proposed gendarmerie will be able to shoulder some of that burden once it is created, but it will take years before enough paramilitary police officers are recruited and trained to replace the approximately 30,000 Mexican soldiers and marines currently dedicated to keeping the peace in Mexico's most violent areas.



One other way that the cartels have changed is that many of them are now allied with local street gangs and pay their gang allies with product -- meaning that street-level sales and drug abuse are increasing in Mexico. Narcotics are no longer commodities that merely pass through Mexico on their way to plague the Americans. This increase in local distribution has brought with it a second tier of violence as street gangs fight over retail distribution turf in Mexican cities.



Finally, most of the cartels have branched out into other criminal endeavors, such as kidnapping, extortion, alien smuggling and cargo theft, in addition to narcotics smuggling. Los Zetas, for example, make a considerable amount of money stealing oil from Mexico's state-run oil company and pirating CDs and DVDs. This change has been reflected in law enforcement acronyms. They are no longer referred to as DTOs -- drug trafficking organizations -- but rather TCOs -- transnational criminal organizations.



With the changes in Mexico since the 1990s in terms of smuggling patterns, the types of drugs smuggled and the organizations smuggling them, it will be extremely difficult for the incoming administration to ignore their activities and adopt a hands-off approach. This means that Pena Nieto will not have the latitude to deviate very far from the policies of the Calderon administration.





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The Real 'El Chapo'

A very interesting post from www.Stratfor.com  about Chapo Guzman. This follows this post about some people attempting to place blame for migrant deaths on the United States. This follows this post about Mexican drug lords and anchor babies. This follows this post about Mexico and the U.S. Border Patrol. This follows this article about American energy independence and preventing money from going to hostile countries such as Iran . For more about what is happening in the nation now click here and you can read a very interesting book HERE.


The Real 'El Chapo'


Stratfor

By Scott Stewart



A widely propagated myth would have us believe that Mexican drug lord Joaquin "El Chapo" Guzman Loera and his Sinaloa Federation are less violent than many of their competitors. Statements from journalists and analysts allege that Sinaloa is more businesslike than Los Zetas, whose reputation for brutality is well-documented, and that this business savvy somehow renders the group relatively benign. In turn, this has led many to believe that the Mexican government could broker a deal with the leader of one of Mexico's largest criminal organizations.



However, a close examination of Sinaloa's evolution demonstrates the group is hardly the hallmark of civility. In fact, the history of Mexico's cartel wars over the past decade reveals that Guzman, his Sinaloa Federation and the various cartels with which they partner have been more territorially aggressive than any other Mexican cartel.



Expansion and Escalation

Sinaloa incursions upset the balance of power that Miguel Angel "El Padrino" Felix Gallardo established in the late 1980s when he appropriated criminal territories to Guzman and his other lieutenants. Tens of thousands of people have died from the wars that arose from this imbalance.



This is because Guzman's expansion efforts necessarily entailed encroaching on a rival's turf. In the early 1990s, he sent forces from Sinaloa state into Tijuana, Baja California state -- controlled at the time by the Arellano Felix brothers -- to buy stash houses and construct a tunnel for moving drugs across the border. In response, the brothers tortured and killed Sinaloa operatives in Tijuana; they even tried to assassinate Guzman. Sinaloa retaliated in November 1992, when its operatives tried to kill Francisco Javier and Ramon Arellano Felix in a Puerto Vallarta nightclub.



The Sinaloa-Arellano Felix brothers war marked the beginning of an escalation in Mexico's cartel war. Cartels began to hire police officers to work as enforcers. Eventually, the Gulf cartel formed Los Zetas, a group largely composed of former soldiers from Mexican Airmobile Special Forces. Cartel warfare thus was militarized. Enforcer groups were no longer untrained thugs with guns; they were trained fire teams that knew how to maneuver and use their weapons.



Seeking shelter from the Arellano Felix brothers, Guzman fled to Guatemala but was arrested in June of 1993. He was extradited to Mexico, where he continued to run his criminal enterprises from the safety of a prison cell until he escaped in January 2001.





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When Gulf cartel leader Osiel Cardenas Guillen was arrested in March 2003, Guzman saw an opportunity to make a move on the Gulf cartel's territory, especially the lucrative plaza of Nuevo Laredo, the busiest point of entry for trucks into the United States from Mexico that provides direct access to the Interstate Highway 35 corridor.



Guzman's push into Nuevo Laredo was spearheaded by the Beltran Leyva brothers, who convinced local gangs such as Los Chachos to turn against the Gulf cartel. Beltran Leyva gunmen aided local forces, and eventually a hybrid group was formed when a U.S. citizen and member of Los Chachos named Edgar "La Barbie" Valdez Villarreal assumed command of Sinaloa enforcer group Los Negros.



Los Zetas responded strongly to the Sinaloa incursion into Nuevo Laredo and a bloody struggle erupted for control of the city. By mid-2005, law and order had almost completely broken down in Nuevo Laredo, and then-President Vicente Fox deployed federal police and army units to take control of the town. But even these forces proved insufficient to stop the violence, which persisted for three years until it became evident that Los Zetas were not going to be defeated. By that time, Guzman had begun focusing on other places to expand.



A Boss of Many Groups

On Sept. 11, 2004, Sinaloa hit men gunned down Rodolfo Carrillo Fuentes, a leader of the Vicente Carrillo Fuentes organization, also known as the Juarez cartel, as he left a theater in Culiacan, Sinaloa state. Rodolfo's brother Vicente retaliated by having Guzman's brother murdered in prison. This chain of events set off a war between the two organizations for control of the Juarez and Chihuahua City plazas that continues to this day. (While the Juarez cartel is just a shadow of its former self -- Sinaloa has all but consolidated control of Chihuahua state -- Chihuahua nonetheless remains the second-deadliest state in Mexico because of this struggle.)



Sinaloa meanwhile had resumed its efforts to control Tijuana. A string of arrests and the deaths of the Arellano Felix brothers, who constituted the core leadership of the Arellano Felix Organization, severely degraded the group's operational capability. In early 2008, internal fighting between the faction loyal to the Arellano Felix brothers' successor, Luis Fernando "El Ingeniero" Sanchez Arellano, and those loyal to the group's top enforcer, Teodoro "El Teo" Garcia Simental, further degraded the organization. This conflict sparked marked levels of violence in the region until Mexican federal police dismantled the Garcia faction.



Desperate for support against Sanchez Arellano, Garcia sought protection from the Sinaloa Federation, which he knew had been trying to claim Tijuana for years. Ultimately the strategy failed, but the protracted battle left the Sanchez Arellano faction of the AFO extremely weak. In the latter half of 2010, the Sinaloa Federation used the opening afforded by Garcia to solidify control over parts of western Baja California state, namely the Tecate and Mexicali regions, positioning itself to seize Tijuana.



Knowing it could not withstand another lengthy battle against a much larger and resourceful group, the AFO struck a deal with Sinaloa whereby both groups would operate independently and abide by a non-aggression pact. With Tijuana secured, Sinaloa controlled the plazas from Juarez west to Tijuana.



In a similar scenario, the Gulf cartel turned to Sinaloa and La Familia Michoacana for help against Los Zetas, which had broken off from its parent group in early 2010. The three groups formed an alliance that referred to itself as the New Federation. Guzman's attention once again was drawn to the lucrative smuggling corridors in the northeast. With help from Sinaloa and La Familia Michoacana gunmen, the Gulf cartel was able to push Los Zetas out of Reynosa, and by mid-2010, Los Zetas were under heavy pressure from the forces of the New Federation. However, several events that year, including the July 29 death of Guzman's close ally, Ignacio "El Nacho" Coronel, and the Dec. 10 death of La Familia Michoacana leader Nazario "El Mas Loco" Moreno Gonzalez, gave Los Zetas an opportunity to recover.



In 2011, Sinaloa undertook another major incursion into Los Zetas territory, this time targeting Veracruz. In doing so, it used another proxy group as muscle -- the Cartel de Jalisco Nueva Generacion, comprising the remnants of Coronel's organization that traveled across Mexico from their home turf in Guadalajara. Sometimes operating under the moniker Los Matazetas, the CJNG began killing Los Zetas -- and people it believed to be Los Zetas supporters -- in Veracruz. In late September and early October of 2011, the CJNG conducted several high-profile body dumps of individuals deemed Los Zetas. In one incident on Sept. 20, 2011, 35 bodies were dumped on a street in heavy traffic. It was later determined that most of these victims were not members of Los Zetas.



As the CJNG shows, the Sinaloa cartel has formed several enforcer groups over the past decade. These groups have included Los Negros, the CJNG, La Gente Nueva (also known as Los Chapos) and Los Antrax. Such organizations operate under their own names, just as Los Zetas did when they were the armed wing of the Gulf cartel. But like Los Zetas, who acted on behalf on the Gulf cartel, Sinaloa enforcers act at the behest of Guzman and his lieutenants.



Instances of Sinaloa brutality abound. Los Negros leader Valdez tortured and executed four Los Zetas members in a video sent to the Dallas Morning News; the CJNG dumped 35 bodies in downtown Veracruz; and Sinaloa enforcers left groups of dismembered bodies in Nuevo Laredo accompanied by narcomantas signed "El Chapo" on several occasions between March and May of 2012. These are actions of the Sinaloa cartel, and they are every bit as vicious as the actions of other groups.



Some believe that peace ensues once the Sinaloa cartel asserts its control over an area, but that is not necessarily true. Violence decreased in Juarez after Sinaloa wrested control of the plaza, but Chihuahua continues to struggle with violence. In fact, three of the four most violent states in Mexico -- Chihuahua, Sinaloa and Guerrero -- are in Sinaloa's area of control. There are no quick solutions to Mexico's violence, and there is no reason to believe a government pact with Guzman would prove otherwise.



Editor's Note: We now offer the daily Mexico Security Monitor, an additional custom intelligence service geared toward organizations with operations or interests in the region, designed to provide more detailed and in-depth coverage of the situation. To learn more about this new fee-based custom service, visit www.stratfor.com/msm .





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Corruption: Why Texas Is Not Mexico

A very interesting post from www.Stratfor.com  about corruption as a way of life in Mexico while only an occasional event in the U.S. This follows this post about Mexico's continued attempt to steal territory that the U.S. paid for after being attacked in the Mexican American war.   This follows this article about American energy independence and preventing money from going to hostile countries such as Iran . For more that you can do to get involved click HERE and read this very interesting book HERE.


Corruption: Why Texas Is Not Mexico




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Mexico In Crisis: Lost Borders and the Struggle for Regional Status



By Scott Stewart



As one studies Mexico's cartel war, it is not uncommon to hear Mexican politicians -- and some people in the United States -- claim that Mexico's problems of violence and corruption stem largely from the country's proximity to the United States. According to this narrative, the United States is the world's largest illicit narcotics market, and the inexorable force of economic demand means that the countries supplying the demand, and those that are positioned between the source countries and the huge U.S. market, are trapped in a very bad position. Because of this market and the illicit trade it creates, billions of dollars worth of drugs flow northward through Mexico (or are produced there) and billions of dollars in cash flow back southward into Mexico. The guns that flow southward along with the cash, according to the narrative, are largely responsible for Mexico's violence. As one looks at other countries lying to the south of Mexico along the smuggling routes from South America to the United States, they too seem to suffer from the same maladies.



However, when we look at the dynamics of the narcotics trade, there are other political entities, ones located to Mexico's north, that find themselves caught in the same geographic and economic position as Mexico and points south. As borderlands, these entities -- referred to as states in the U.S. political system -- find themselves caught between the supply of drugs flowing from the south and the large narcotics markets to their north. The geographic location of these states results in large quantities of narcotics flowing northward through their territory and large amounts of cash likewise flowing southward. Indeed, this illicit flow has brought with it corruption and violence, but when we look at these U.S. states, their security environments are starkly different from those of Mexican states on the other side of the border.



One implicit reality that flows from the geopolitical concept of borderlands is that while political borders are clearly delineated, the cultural and economic borders surrounding them are frequently less clear and more dynamic. The borderlands on each side of the thin, artificially imposed line we call a border are remarkably similar in geographic and demographic terms (indeed, inhabitants of such areas are often related). In the larger picture, both sides of the border often face the same set of geopolitical realities and challenges. Certainly the border between the United States and Mexico was artificially imposed by the annexation of Texas following its anti-Mexico revolution as well as the U.S. annexation of what is now much of the U.S. West, including the border states of Arizona, California and New Mexico, following the Mexican-American War. While the desert regions along the border do provide a bit of a buffer between the two countries -- and between the Mexican core and its northern territories -- there is no geological obstacle separating the two countries. Even the Rio Grande is not so grand, as the constant flow of illicit goods over it testifies. In many places, like Juarez and El Paso, the U.S.-Mexico border serves to cut cities in half, much like the Berlin Wall used to do.



Yet as one crosses over that artificial line one senses huge differences between the cultural, economic and security environments north and south. In spite of the geopolitical and economic realities confronting both sides of this borderland, Texas is not Mexico. The differences run deep, and we thought it worthwhile this week to examine how and why.



Same Problems, Different Scope



First, it must be understood that this examination does not mean to assert that the illicit narcotics market in the United States has no effect on Mexico (or Central America, for that matter). The flow of narcotics, money and guns, and the organizations that participate in this illicit trade, does have a clear and demonstrable impact on Mexico. But -- and this very significant -- that impact does not stop at the border. This illicit commerce also impacts the U.S. states north of the border.



Certainly the U.S. side of the border has seen corruption of public officials, cartel-related violence and, of course, drug trafficking. But these phenomena have manifested themselves differently on the U.S. side of the border.



In the United States there have been local cops, sheriffs, customs inspectors and even FBI agents arrested and convicted for corruption. However, the problem is far worse on the Mexican side, where entire police forces have been relieved of their duties due to their cooperation with the drug cartels and where systematic corruption has been traced all the way from the municipal mayoral level to the Presidential Guard, and even to the country's drug czar. There have even been groups of police officers and military units arrested while actively protecting shipments of drugs in Mexico -- something that simply does not occur in the United States. And while Mexican officials are frequently forced to choose between "plata o plomo" (Spanish for "silver or lead," a direct threat of violence meaning "take the bribe or we will kill you"), that type of threat is extremely rare in the United States. It is also very rare to see politicians, police chiefs and judges killed in the United States -- a common occurrence in Mexico.



That said, there certainly has been cartel-related violence on the U.S. side of the border with organizations such as Los Zetas conducting assassinations in places like Houston and Dallas. The claim by some U.S. politicians that there is no spillover violence is patently false. However, the use of violence on the U.S. side has tended to be far more discreet on the part of the cartels (and the U.S. street gangs they are allied with) than in Mexico, where the cartels are frequently quite flagrant. The cartels kill people in the United States but they tend to avoid the gruesome theatrics associated with many drug-related murders in Mexico, where it has become commonplace to see victims beheaded, dismembered or hung from pedestrian walkways over major thoroughfares.



Likewise, the large firefights frequently observed in Mexico involving dozens of armed men on each side using military weapons, grenades and rocket-propelled grenades have come within feet of the border (sometimes with stray rounds crossing over onto the U.S. side), but these types of events have remained on the south side of that invisible line. Mexican cartel gunmen have used dozens of trucks and other large vehicles to set up roadblocks in Matamoros, but they have not followed suit in Brownsville. Cities on the U.S. side of the border are seen as markets, logistics hubs and places of refuge for cartel figures, not battlefields.



Even when we consider drug production, it is important to recognize that the first "super labs" for methamphetamine production were developed in California's Central Valley, not in Mexico. It was only pressure from U.S. law enforcement agencies that forced the relocation of these laboratories south of the border. Certainly, meth production is still going on in many parts of the United States, but the production is being conducted in mom-and-pop operations that can produce only relatively small amounts of the drug, usually of varying quality. By contrast, Mexican super labs can produce tons of meth that is of very high (almost pharmacological) quality. Additionally, while Mexican cartels (and other producers) have long grown marijuana inside the United States in clandestine plots of land, the quantity of marijuana the cartels grow inside the United States is far eclipsed by the industrial marijuana production operations conducted in Mexico.



Even the size of narcotics shipments changes at the border. The huge shipments of drugs that are shipped within Mexico are broken down into smaller lots at stash houses on the Mexican side of the border to be smuggled into the United States. Then they are frequently broken down again in stash houses on the U.S. side of the border. The trafficking of drugs in the United States tends to be far more decentralized and diffuse than it is on the Mexican side, again in response to U.S. law enforcement pressure. Smaller shipments allow drug traffickers to limit their losses if a shipment is seized, and using a decentralized distribution network allows them to be less dependent on any one link in the chain. If one distribution channel is rolled up by the authorities, traffickers can shift their product into another sales channel.



Not Just an Institutional Problem



Above we noted that the same dynamics exist on both sides of the border, and the same cartel groups also operate on both sides. However, we also noted the consistent theme of the Mexican cartels being forced to behave differently on the U.S. side. The organizations are no different, but the environment in which they operate is very different. The corruption, poverty, diminished rule of law and lack of territorial control (particularly in the border-adjacent hinterlands) that is endemic to the Mexican system greatly empowers and emboldens the cartels in Mexico. The operating environment inside the United States is quite different, forcing the cartels to behave differently. Mexican cartels and drug trafficking are problems in the United States, but they are problems that can be controlled by U.S. law enforcement. The environment does not permit the cartels to threaten the U.S. government's ability to govern.



A geopolitical monograph explaining the forces that have shaped Mexico can be found here. Understanding the geopolitics of Mexico is very helpful to understanding the challenges Mexico faces and why it has become what it is today. This broader understanding is also the key to understanding why the Mexican police simply can't be reformed to solve the problems of violence and corruption. Certainly, the Mexican government has aggressively pursued police reform for many years now, with very little success. Indeed, it was the lack of a trustworthy law enforcement apparatus that led the Calderon government to turn to the military to counter the power of the Mexican cartels. This lack of reliable law enforcement has also led Calderon to aggressively pursue police reform. This reform effort has included unifying the federal police agencies and consolidating municipal police departments (which have arguably been the most corrupt institutions in Mexico) into unified state police commands, under which officers are subjected to better screening, oversight and accountability. Already, however, there have been numerous instances of these "new and improved" federal- and state-level police officers being arrested for corruption.



This illustrates the fact that Mexico's ills go far deeper than just corrupt institutions. Because of this, revamping the institutions will not result in any meaningful change, and the revamped institutions will soon be corrupted like the ones they replaced. This fact should have been readily apparent; the institutional approach has been tried in the region before and has failed.



Perhaps the best example of this failure was the "untouchable and incorruptible" Department of Anti-Narcotics Operations, known by its Spanish acronym DOAN, which was created in Guatemala in the mid-1990s. The DOAN was almost purely a creation of the U.S. Drug Enforcement Administration and the U.S. Department of State's Bureau of International Narcotics and Law Enforcement Affairs. The concept behind the creation of the DOAN was that corruption existed within the Guatemalan police institutions because the police were undertrained, underpaid and underequipped. It was believed that if police recruits were carefully screened, properly trained, well paid and adequately equipped, they would not be susceptible to the corruption that plagued the other police institutions in the country. So the U.S. government hand-picked the recruits, thoroughly trained them, paid them generously and provided them with brand-new uniforms and equipment. However, the result was not what the U.S. government expected. By 2002, the "untouchable" DOAN had to be disbanded because it had essentially become a drug trafficking organization itself and was involved in torturing and killing competitors and stealing their shipments of narcotics.



The example of the Guatemalan DOAN (and of more recent Mexican police reform efforts) demonstrates that even a competent, well-paid and well-equipped police institution cannot stand alone within a culture that is not prepared to support it and keep it clean. In other words, over time, an institution will take on the characteristics of, and essentially reflect, the environment surrounding it. Therefore, significant reform in Mexico requires a holistic approach that reaches far beyond the institutions to address the profound economic, sociological and cultural problems that are affecting the country today. Indeed, given how deeply rooted and pervasive these problems are and the geopolitical hand the country was dealt, Mexico has done quite well. But holistic change will not be easy to accomplish. It will require a great deal of time, treasure, leadership and effort. In view of this reality, we can see why it would be more politically expedient simply to blame the Americans.





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Mexico's Gun Supply and the 90 Percent Myth

This is an urgent post from http://www.stratfor.com/ about guns in Mexico. This follows this post about Alexandra Wallace and this post which shows that there are 30,000 openly illegal immigrants in the border town of El Paso. On a related note, you can read about Miss Kentucky Latina here, an interesting article about Jessica Alba here or another article about Salma Hayek here. For more that you can do to get involved click HERE and you can read a very interesting book HERE!


Mexico's Gun Supply and the 90 Percent Myth


By Scott Stewart



For several years now, STRATFOR has been closely watching developments in Mexico that relate to what we consider the three wars being waged there. Those three wars are the war between the various drug cartels, the war between the government and the cartels, and the war being waged against citizens and businesses by criminals.



In addition to watching tactical developments of the cartel wars on the ground and studying the dynamics of the conflict among the various warring factions, we have also been paying close attention to the ways that both the Mexican and U.S. governments have reacted to these developments. Perhaps one of the most interesting aspects to watch has been the way in which the Mexican government has tried to deflect responsibility for the cartel wars away from itself and onto the United States. According to the Mexican government, the cartel wars are not a result of corruption in Mexico or of economic and societal dynamics that leave many Mexicans marginalized and desperate to find a way to make a living. Instead, the cartel wars are due to the insatiable American appetite for narcotics and the endless stream of guns that flows from the United States into Mexico and that results in Mexican violence.



Interestingly, the part of this argument pertaining to guns has been adopted by many politicians and government officials in the United States in recent years. It has now become quite common to hear U.S. officials confidently assert that 90 percent of the weapons used by the Mexican drug cartels come from the United States. However, a close examination of the dynamics of the cartel wars in Mexico — and of how the oft-echoed 90 percent number was reached — clearly demonstrates that the number is more political rhetoric than empirical fact.





By the Numbers



As we discussed in a previous analysis, the 90 percent number was derived from a June 2009 U.S. Government Accountability Office (GAO) report to Congress on U.S. efforts to combat arms trafficking to Mexico (see external link).



According to the GAO report, some 30,000 firearms were seized from criminals by Mexican authorities in 2008. Of these 30,000 firearms, information pertaining to 7,200 of them (24 percent) was submitted to the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) for tracing. Of these 7,200 guns, only about 4,000 could be traced by the ATF, and of these 4,000, some 3,480 (87 percent) were shown to have come from the United States.



This means that the 87 percent figure relates to the number of weapons submitted by the Mexican government to the ATF that could be successfully traced and not from the total number of weapons seized by Mexican authorities or even from the total number of weapons submitted to the ATF for tracing. In fact, the 3,480 guns positively traced to the United States equals less than 12 percent of the total arms seized in Mexico in 2008 and less than 48 percent of all those submitted by the Mexican government to the ATF for tracing. This means that almost 90 percent of the guns seized in Mexico in 2008 were not traced back to the United States.



The remaining 22,800 firearms seized by Mexican authorities in 2008 were not traced for a variety of reasons. In addition to factors such as bureaucratic barriers and negligence, many of the weapons seized by Mexican authorities either do not bear serial numbers or have had their serial numbers altered or obliterated. It is also important to understand that the Mexican authorities simply don’t bother to submit some classes of weapons to the ATF for tracing. Such weapons include firearms they identify as coming from their own military or police forces, or guns that they can trace back themselves as being sold through the Mexican Defense Department’s Arms and Ammunition Marketing Division (UCAM). Likewise, they do not ask ATF to trace military ordnance from third countries like the South Korean fragmentation grenades commonly used in cartel attacks.



Of course, some or even many of the 22,800 firearms the Mexicans did not submit to ATF for tracing may have originated in the United States. But according to the figures presented by the GAO, there is no evidence to support the assertion that 90 percent of the guns used by the Mexican cartels come from the United States — especially when not even 50 percent of those that were submitted for tracing were ultimately found to be of U.S. origin.



This point leads us to consider the types of weapons being used by the Mexican cartels and where they come from.





Types and Sources of Guns



To gain an understanding of the dynamics of the gun flow inside Mexico, it helps if one divides the guns seized by Mexican authorities from criminals into three broad categories — which, incidentally, just happen to represent three different sources.





Type 1: Guns Legally Available in Mexico



The first category of weapons encountered in Mexico is weapons available legally for sale in Mexico through UCAM. These include handguns smaller than a .357 magnum such as .380 and .38 Special.



A large portion of this first type of guns used by criminals is purchased in Mexico, or stolen from their legitimate owners. While UCAM does have very strict regulations for civilians to purchase guns, criminals will use straw purchasers to obtain firearms from UCAM or obtain them from corrupt officials. Cartel hit men in Mexico commonly use .380 pistols equipped with sound suppressors in their assassinations. In many cases, these pistols are purchased in Mexico, the suppressors are locally manufactured and the guns are adapted to receive the suppressors by Mexican gunsmiths.



It must be noted, though, that because of the cost and hassle of purchasing guns in Mexico, many of the guns in this category are purchased in the United States and smuggled into the country. There are a lot of cheap guns available on the U.S. market, and they can be sold at a premium in Mexico. Indeed, guns in this category, such as .380 pistols and .22-caliber rifles and pistols, are among the guns most commonly traced back to the United States. Still, the numbers do not indicate that 90 percent of guns in this category come from the United States.



Additionally, most of the explosives the cartels have been using in improvised explosive devices (IEDs) in Mexico over the past year have used commercially available Tovex, so we consider these explosives to fall in this first category. Mexican IEDs are another area where the rhetoric has been interesting to analyze, but we will explore this topic another time.





Type 2: Guns Legally Available in the U.S. but Not in Mexico



Many popular handgun calibers, such as 9 mm, .45 and .40, are reserved for the military and police and are not available for sale to civilians in Mexico. These guns, which are legally sold and very popular in the United States, comprise our second category, which also includes .50-caliber rifles, semiautomatic versions of assault rifles like the AK-47 and M16 and the FN Five-Seven pistol.



When we consider this second type of guns, a large number of them encountered in Mexico are likely purchased in the United States. Indeed, the GAO report notes that many of the guns most commonly traced back to the United States fall into this category. There are also many .45-caliber and 9 mm semiautomatic pistols and .357 revolvers obtained from deserters from the Mexican military and police, purchased from corrupt Mexican authorities or even brought in from South America (guns made by manufacturers such as Taurus and Bersa). This category also includes semiautomatic variants of assault rifles and main battle rifles, which are often converted by Mexican gunsmiths to be capable of fully automatic fire.



One can buy these types of weapons on the international arms market, but one pays a premium for such guns and it is cheaper and easier to simply buy them in the United States or South America and smuggle them into Mexico. In fact, there is an entire cottage industry that has developed to smuggle such weapons, and not all the customers are cartel hit men. There are many Mexican citizens who own guns in calibers such as .45, 9 mm, .40 and .44 magnum for self-defense — even though such guns are illegal in Mexico.





Type 3: Guns Not Available for Civilian Purchase in Mexico or the U.S.



The third category of weapons encountered in Mexico is military-grade ordnance not generally available for sale in the United States or Mexico. This category includes hand grenades, 40 mm grenades, rocket-propelled grenades (RPGs), automatic assault rifles and main battle rifles and light machine guns.



This third type of weapon is fairly difficult and very expensive to obtain in the United States, especially in the large numbers in which the cartels are employing them. They are also dangerous to obtain in the United States due to heavy law enforcement scrutiny. Therefore, most of the military ordnance used by the Mexican cartels comes from other sources, such as the international arms market — increasingly from China via the same networks that furnish precursor chemicals for narcotics manufacturing — or from corrupt elements in the Mexican military or even deserters who take their weapons with them. Besides, items such as South Korean fragmentation grenades and RPG-7s, often used by the cartels, simply are not in the U.S. arsenal. This means that very few of the weapons in this category come from the United States.



In recent years the cartels, especially their enforcer groups such as Los Zetas, Gente Nueva and La Linea, have been increasingly using military weaponry instead of sporting arms. A close examination of the arms seized from the enforcer groups and their training camps clearly demonstrates this trend toward military ordnance, including many weapons not readily available in the United States. Some of these seizures have included M60 machine guns and hundreds of 40 mm grenades obtained from the military arsenals of countries like Guatemala.



But Guatemala is not the only source of such weapons. Latin America is awash in weapons that were shipped there over the past several decades to supply the various insurgencies and counterinsurgencies in the region. When these military-grade weapons are combined with the rampant corruption in the region, they quickly find their way into the black arms market. The Mexican cartels have supply-chain contacts that help move narcotics to Mexico from South America, and they are able to use this same network to obtain guns from the black market in South and Central America and then smuggle them into Mexico. While there are many weapons in this category that were manufactured in the United States, the overwhelming majority of the U.S.-manufactured weapons of this third type encountered in Mexico — like LAW rockets and M60 machine guns — come into Mexico from third countries and not directly from the United States.



There are also some cases of overlap between classes of weapons. For example, the FN Five-Seven pistol is available for commercial purchase in the United States, but the 5.7x28 armor-piercing ammunition for the pistol favored by the cartels is not — it is a restricted item. However, some of the special operations forces units in the Mexican military are issued the Five-Seven as well as the FN P90 personal defense weapon, which also shoots the 5.7x28 round, and the cartels are obtaining some of these weapons and the armor-piercing ammunition from them and not from the United States. Conversely, we see bulk 5.56 mm and 7.62 mm ammunition bought in the United States and smuggled into Mexico, where it is used in fully automatic AK-47s and M16s purchased elsewhere. As noted above, China has become an increasingly common source for military weapons like grenades and fully automatic assault rifles in recent years.



To really understand Mexico’s gun problem, however, it is necessary to recognize that the same economic law of supply and demand that fuels drug smuggling into the United States also fuels gun smuggling into Mexico. Black market guns in Mexico can fetch up to 300 percent of their normal purchase price — a profit margin rivaling the narcotics the cartels sell. Even if it were somehow possible to hermetically seal the U.S.-Mexico border and shut off all the guns coming from the United States, the cartels would still be able to obtain weapons elsewhere — just as narcotics would continue to flow into the United States from other places. The United States does provide cheap and easy access to certain types of weapons and ammunition, but as demonstrated by groups such as the Revolutionary Armed Forces of Colombia, weapons can be easily obtained from other sources via the black arms market — albeit at a higher price.



There has clearly been a long and well-documented history of arms smuggling across the U.S.-Mexico border, but it is important to recognize that, while the United States is a significant source of certain classes of weapons and ammunition, it is by no means the source of 90 percent of the weapons used by the Mexican cartels, as is commonly asserted.


Reprinting or republication of this report on websites is authorized by prominently displaying the following sentence, including the hyperlink to STRATFOR, at the beginning or end of the report.



"Mexico's Gun Supply and the 90 Percent Myth is republished with permission of STRATFOR."









Read more: Mexico's Gun Supply and the 90 Percent Myth
STRATFOR

The Falcon Lake Murder and Mexico's Drug Wars

A timely post from http://www.stratfor.com/ about the Falcon Lake murder!!! This follows this post about backdoor amnesty in Houston and this post which shows that there are 30,000 openly illegal immigrants in the border town of El Paso. For more that you can do to get involved click HERE!





The Falcon Lake Murder and Mexico's Drug Wars

October 21, 2010
By Scott Stewart



STRATFOR published an analysis last Wednesday noting that a reliable source in Mexico informed us that the Sept. 30 shooting death of U.S. citizen David Hartley on Falcon Lake — which straddles the U.S.-Mexico border — was a mistake committed by a low-level member of the Los Zetas drug trafficking organization. The source also informed us that those responsible for Hartley’s death are believed to have disposed of his body and that the Zeta hierarchy was conducting a damage-control operation to punish those responsible for the death and to distance the cartel from the murder. The source further reported that the murder of the lead Tamaulipas state investigator on the case, Rolando Armando Flores Villegas — whose head was delivered in a suitcase to the Mexican military’s Eight Zone headquarters in Reynosa on Oct. 12 — was a specific message from Los Zetas to Mexican authorities to back off from the investigation.



Related Special Topic Page

Tracking Mexico’s Drug Cartels

STRATFOR BOOK

Mexico in Crisis: Lost Borders and the Struggle for Regional Status

Since publishing the report, we have been deluged by interview requests regarding the case. Numerous media outlets have interviewed Fred Burton and myself regarding the Falcon Lake case. During the course of talking with reporters and customers, it became obvious to us that a solid understanding of the context within which Hartley’s killing occurred was lacking in media discussions of the case. Viewing the murder as part of the bigger picture of what is occurring in Mexico makes it far easier to understand not only why David Hartley was killed, but why his body will likely never be found — and why his killers probably will not be held accountable for their actions, at least in the context of the judicial system.





The Changing Mexican Cartel Landscape



In STRATFOR’s annual Mexican cartel report published in December 2009, we noted the growing fracture between the Gulf cartel and its former enforcement arm, Los Zetas, which had become an independent drug trafficking organization. We noted that Los Zetas were becoming increasingly aggressive and that the Gulf cartel was struggling to fend off these advances. In fact, it looked as if Los Zetas were about to swallow up the Gulf cartel.











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What had been a tense standoff between the two cartels erupted into open warfare in January when Zeta leader Sergio “El Concord 3” Mendoza Pena died in an altercation between Mendoza and a group of men reporting to Gulf cartel No. 2 leader Eduardo “El Coss” Costilla Sanchez. After learning of Mendoza’s death, Los Zetas No. 2 Miguel “Z-40” Trevino Morales gave Costilla an ultimatum to hand over those responsible for Mendoza’s death by Jan. 25. When the deadline passed without his demand being met, Trevino ordered the kidnapping of 16 known Gulf cartel members in the Ciudad Miguel Aleman area as retaliation. The war was on.



Fearing the might of Los Zetas, the Gulf cartel reached out to their longtime enemies, the Sinaloa federation, and asked for their assistance in dealing with Los Zetas. The leader of the Sinaloa federation, Joaquin “El Chapo” Guzman Loera, has no love for Los Zetas, who as the former military arm of the Gulf cartel engaged in many brutal battles with Guzman’s forces. Together with another enemy of Los Zetas, La Familia Michoacana (LFM), Guzman joined forces with the Gulf cartel to form an organization known as the New Federation. The stated goals of the New Federation were to destroy Los Zetas, along with the remnants of the Vicente Carrillo Fuentes (VCF) organization, aka the Juarez cartel. A move by the New Federation to destroy the remnants of the Arellano Felix Organization (aka the Tijuana cartel), now very weak, would allow the organization to dominate Mexican drug smuggling routes into the United States. If this New Federation consolidation were to occur (it has not happened yet), it would also likely result in a dramatic decrease in violence in the long term. But the VCF and Los Zetas have not yet been vanquished. This means that while the New Federation clearly has been able to gain the upper hand over the past several months, both Los Zetas and the VCF continue a desperate fight for survival and turf that in the short term means the level of violence will remain high.



The emergence of the New Federation was accompanied by the collapse of the Beltran Leyva Organization, a group formerly allied with the Sinaloa federation that broke away from Sinaloa and allied with Los Zetas and the VCF to fight against El Chapo and his allies. As these two developments played out over the first quarter of 2010, we found them to be so significant that we felt compelled to publish an update to STRATFOR’s annual cartel report in May to document the changes.





Los Zetas: Wounded, but Still Dangerous











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Since January, the Zetas have suffered significant organizational and territorial losses. By May 2010, Los Zetas reportedly had lost control of the strategic (and very lucrative) border crossing of Reynosa, Tamaulipas state, to the New Federation and had been forced to retreat north toward Nuevo Laredo and west toward the transportation hub of Monterrey, the capital of Nuevo Leon state and Mexico’s third-largest city.



Significant incidents involving the Los Zetas organization since January 2010 include the following:



Jan. 18: Sergio “El Concord 3” Mendoza Pena killed by Gulf cartel, leading to rupture in Gulf/Zeta relationship.

March 16: Jose “El Cuervo” Antonio Estrada Sanchez, Zeta leader of the Tabasco plaza, or port of entry for contraband, arrested.

March 29: Erick “El Motokles” Alejandro Martinez Lopez, Zeta leader in Quintana Roo state, arrested.

March 30: Roberto “El Beto” Rivero Arana, nephew of Zeta leader Heriberto “El Lazca” Lazcano Lazcano and reportedly in line to be the new Tabasco plaza leader, arrested in Tabasco.

April: Twenty-five law enforcement officials in Nuevo Leon killed by the New Federation for allegedly cooperating with Los Zetas.

May 12: Los Zetas ranch/training facility near Higueras, Nuevo Leon state, seized along with huge weapons cache.

May 30: Hipolito Bonilla Cespedes, Lazcano’s accountant, arrested in Monterrey.

June 9: Hector “El Tori” Raul Luna Luna, Monterrey Zeta leader, arrested.

June 24: Manuel Antele Velasco, Puebla state Zeta leader, arrested.

July 7: Esteban “El Chachis” Luna Luna, Monterrey Zeta leader, arrested.

Aug. 14: “El Sonrics,” Monterrey Zeta leader, killed by military.

Aug. 24: Discovery of 72 dead migrants killed by Los Zetas near San Fernando, Tamaulipas.

Aug. 29: Juan “El Billy” Francisco Zapata Gallego, Zeta leader in Monterrey, arrested.

Sept. 3: Twenty-seven Los Zetas die in firefight with military in Ciudad Mier, Tamaulipas.

Sept. 26: Jose Angel “El Pelon” Fernandez de Lara Diaz, Zeta leader in Quintana Roo state hand-picked by Lazcano in June, arrested.

Sept. 30: Gunmen linked to Los Zetas shoot and kill American David Hartley.

Oct. 6: Jose Raymundo Lopez Arellano, local Zeta leader in San Nicolas de las Garza, Nuevo Leon (Monterrey metro area), arrested.

Oct. 9: Seiky “Comandante Sierra” Ogata Gonzalez, Zeta leader in Tabasco, arrested.





Not Your Father’s Zetas



All of these recent losses by Los Zetas must be considered part of a longer timeline. As early as 2007, STRATFOR began to discuss the toll that the cartel wars were taking on the enforcement arms of the various cartel groups, such as Los Zetas. The life of a cartel enforcer is often quite brutal and short: Enforcers constantly are in danger of being killed or arrested. In 2007, we noted how Los Zetas were looking to bring in fresh muscle to bolster their ranks, to include other former members of the Mexican military and police, former Guatemalan special operations forces (known as Kaibiles), and even members of street gangs like Mara Salvatrucha, aka MS-13. These young street gang recruits frequently are referred to as “Zetitas” or little Zetas.



Such replacements come with a price, however. The original Los Zetas were defectors from Mexico’s Special Forces Airmobile Group (known by the Spanish acronym GAFE), and as such were very well-trained and well-disciplined. As evidenced from the paramilitary training camps uncovered in Mexico and Guatemala, and the fact that Los Zetas reportedly have hired military instructors from a variety of countries (including Americans, Israelis, and some Europeans), the organization has attempted to train their new recruits. But the new generations of Zetas and Zetitas are simply not as well-trained or well-disciplined as the original Zetas. This basic level of training for new recruits has also suffered in recent months as the group has been under tremendous pressure to replace members who have been killed while some of its training facilities have been seized by the authorities. This means the organization has been compelled to use enforcers with very little training who are far less tactically adept than their Zeta masters. They are little more than thugs with guns.



And this brings us back to the Hartley case. Intelligence reports we received indicate that a group of poorly trained Zeta enforcers working to keep the Falcon Lake smuggling corridor safe from encroachment by the Gulf cartel and their New Federation partners killed David Hartley. When viewed within the analytical framework of what has happened to the Zetas over the past year, the intelligence fit. It makes sense to us that the Zetas would be employing poorly trained individuals for such duties, that those performing those duties would be jumpy and that these gunmen likely did kill Hartley without orders from the Zeta hierarchy.



Although some media outlets have portrayed the murder of an American citizen by a Mexican cartel organization as an unusual event, it is really quite common. In fact, 79 American citizens officially were reported murdered in Mexico in 2009, according to U.S. State Department figures, and the State Department notes that there were probably other cases that went unreported. For 2010, the State Department reports 48 American citizens have been murdered in Mexico through June 10. Our research has uncovered at least another six reported deaths since June 10 (including David Hartley), so unofficially the number of American citizens reported murdered in Mexico is approximately 54 for the year to date. While many of the Americans murdered in Mexico are undoubtedly involved in some way with the drug trade, others have no apparent link.



Two of the American citizens murdered in Mexico in 2010 were Lesley Enriquez, an employee of the U.S. consulate in Juarez, and her husband, Arthur Redelfs, a detention officer at the El Paso County Jail. Still, with more than 9,100 murders from cartel violence to date this year in Mexico, the 54 American murder victims comprise only a small percentage of the overall body count. Because of this, some of our contacts in the Mexican government are having a hard time understanding why the Hartley murder has elicited such an intense media reaction in the United States, which in turn resulted in diplomatic pressure on Mexican authorities from the U.S. government. At the same time Mexico is being pressured by the U.S. government about the death of one American citizen, it is also are trying to come to grips with the fact that the lead Mexican investigator in the case was kidnapped and beheaded. This turn of events provides a fairly good illustration of the security environment in Mexico today.



It must also be recognized that any attempt to quantify the death toll in the Mexican cartel wars is quickly complicated by the fact that the cartels have gotten very good at disposing of bodies. Many victims simply disappear, and their murders are never confirmed. For example, in December 2008, American anti-kidnapping consultant Felix Batista disappeared from a meeting at a restaurant in Saltillo, Coahuila state. Batista reportedly was murdered, but no trace of his body was ever found. In addition to dumping bodies in mass graves, using wood chippers or feeding them to vultures, Mexican cartels also have developed innovative ways to dispose of their victims’ corpses. Santiago “El Pozolero” Meza Lopez, a Tijuana cartel enforcer arrested in January 2009, admitted to Mexican authorities that he was responsible for dissolving at least 300 bodies in sodium hydroxide, a process known as making “guiso,” Spanish for “stew.” The cartels can either dispose of a body or mutilate it and leave it to be found, depending on the specific message they wish to send.



Given the well-honed ability of the cartels to dispose of bodies and the fact that Los Zetas reportedly went into damage-control mode following David Hartley’s shooting, it was not at all surprising to receive a report indicating that that the gunmen who killed Hartley reportedly disposed of the body to destroy any potential evidence. We also received reports that Los Zetas No. 2 man, Miguel “Z-40” Trevino Morales, was angry about the murder of Hartley by poorly disciplined Zeta gunmen acting without permission, and is very unhappy with the attention the case has focused on his organization and their smuggling route through Falcon Lake.



While under heavy pressure from the New Federation and the Mexican government, which Los Zetas claim is helping the New Federation against them, the last thing Los Zetas needed was heavy pressure from the U.S. government. This might result in police operations to capture Zeta members and interference with the group’s smuggling activities.



In addition to the loss of personnel on the battlefield, Los Zetas also have lost control of valuable smuggling corridors like Reynosa. This means that any remaining corridors they control are even more important to the group and its ability to make money, which is needed to buy guns and hire and train new gunmen to protect the group against outside pressure by the New Federation and the Mexican government. Intensive law enforcement operations looking for Hartley’s body effectively shut down the Falcon Lake corridor. Due to the losses suffered by the organization from this chain of events, it is not surprising that we have received reports that Trevino wants to execute the gunmen who killed Hartley. This means that the shooters in all likelihood never will be found by authorities, much less arrested or brought before a court of law.



As organizations such as the VCF and Los Zetas become increasingly desperate in the face of attacks against them by their New Federation enemies and the Mexican government, they will likely become even more paranoid — and more dangerous to those not directly involved in the Mexican cartel wars. As this occurs, there will almost certainly be more cases of innocents caught in the wrong place at the wrong time.







Read more: The Falcon Lake Murder and Mexico's Drug Wars
STRATFOR

Mexico: The Struggle for Balance‏

An interesting article from www.stratfor.com about America's southern neighbor. This follows this post about America's relationship with Israel. This follows this article about the recent news about offshore drilling to encourage American energy independence that follows this previous post about it.. This is a key issue to prevent money from going to hostile countries such as Iran and Venezuela. For more posts like this click here.


Mexico: The Struggle for Balance
April 8, 2010


By Scott Stewart
This week’s Geopolitical Intelligence Report provided a high-level assessment of the economic forces that affect how the Mexican people and the Mexican government view the flow of narcotics through that country. Certainly at that macro level, there is a lot of money flowing into Mexico and a lot of people, from bankers and businessmen to political parties and politicians, are benefiting from the massive influx of cash. The lure of this lucre shapes how many Mexicans (particularly many of the Mexican elite) view narcotics trafficking. It is, frankly, a good time to be a banker, a real estate developer or a Rolex dealer in Mexico.
However, at the tactical level, there are a number of issues also shaping the opinions of many Mexicans regarding narcotics trafficking, including violence, corruption and rapidly rising domestic narcotics consumption. At this level, people are being terrorized by running gunbattles, mass beheadings and rampant kidnappings — the types of events that STRATFOR covers in our Mexico Security Memos.
Mexican elites have the money to buy armored cars and hire private security guards. But rampant corruption in the security forces means the common people seemingly have nowhere to turn for help at the local level (not an uncommon occurrence in the developing world). The violence is also having a heavy impact on Mexico’s tourist sector and on the willingness of foreign companies to invest in Mexico’s manufacturing sector. Many smaller business owners are being hit from two sides — they receive extortion demands from criminals while facing a decrease in revenue due to a drop in tourism because of the crime and violence. These citizens and businessmen are demanding help from Mexico City.
These two opposing forces — the inexorable flow of huge quantities of cash and the pervasive violence, corruption and fear — are placing a tremendous amount of pressure on the Calderon administration. And this pressure will only increase as Mexico moves closer to the 2012 presidential elections (President Felipe Calderon was the law-and-order candidate and was elected in 2006 in large part due to his pledge to end cartel violence). Faced by these forces, Calderon needs to find a way to strike a delicate balance, one that will reassert Mexican government authority, quell the violence and mollify the public while also allowing the river of illicit cash to continue flowing into Mexico.
An examination of the historical dynamics of the narcotics trade in Mexico reveals that in order for the violence to stop, there needs to be a balance among the various drug-trafficking organizations involved in the trade. New dynamics have begun to shape the narcotics business in Mexico, and they are causing that balance to be very elusive. For the Calderon administration, desperate times may have called for desperate measures.
The Balance
The laws of economics dictate that narcotics will continue to flow into the United States. The mission of the Mexican drug-trafficking organizations and the larger cartels they form is to attempt to control as much of that flow as they can. The people who run the Mexican drug-trafficking organizations are businessmen. Historically, their primary objective is to move their product (narcotics) without being caught and to make a lot of money in the process. The Mexican drug lords have traditionally attempted to conduct this business quietly, efficiently and with the least amount of friction.
When there is a kind of competitive business balance among these various organizations, a sort of detente prevails and there is relative peace. We say relative, because there has always been a level of tension and some level of violence among these organizations, but during times of balance the violence is kept in check for business reasons.
During times of balance, the territorial boundaries are well-established, the smuggling corridors are secure, the drugs flow and the people make money. When that balance is lost and an organization is weakened — especially an organization that controls one or more valuable smuggling corridors — a vicious fight can develop as other organizations move in and try to exert control over the territory and as the incumbent organization attempts to fight them off and retain control of its turf. Smuggling corridors are geographically significant places along the narcotics supply chain where the product is channeled — places such as ports, airstrips, significant highways and border crossings. Control of these significant channels (often referred to as “plazas” by the drug-trafficking organizations) is very important to an organization’s ability to move contraband. If it doesn’t control a corridor it wants to use, it must pay the organization that does control it.

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In past decades, this turbulence was normally short lived. When there was a fight between the organizations or cartels, there would be a period of intense violence and then the balance between them would either be restored to the status quo ante or a new balance between the organizations would be reached. For example, when the Guadalajara cartel dissolved following the 1989 arrest of Miguel Angel Felix Gallardo, and the Arellano Felix Organization (AFO) and the Sinaloa cartel emerged from the Guadalajara cartel to fill the power vacuum, there was a brief period of tension, but once balance was achieved, the violence ebbed — and business returned to normal. However, the old model of cartel conflicts has changed. The current round of inter- and intra-cartel violence has raged for nearly a decade and has intensified rather than abated; there appears to be no end in sight. In fact, death tolls are far higher today than they were five years ago.
This inability of the cartels to reach a state of balance is due to several factors. First is the change of products. Mexican drug cartels have long moved marijuana into the United States, but the increase in the amount of cocaine being moved through Mexico in the 1980s and 1990s changed the dynamic — cocaine is far more compact and far more lucrative than marijuana. Cocaine is also a “strategic narcotic,” one that has a transnational supply chain far longer than drugs like marijuana or methamphetamine, and that long supply chain is difficult to guard. Because of this, organizations involved in the cocaine trade tend to be more aggressive and violent than those that smuggle drugs with a shorter supply chain like marijuana and Mexican opium.
At first, Mexican cartels like the Guadalajara cartel only smuggled cocaine through their smuggling routes into the United States on behalf of the more powerful Colombian cartels, which were seeking alternate routes to replace the Caribbean smuggling routes that had been largely shut down by American air and sea interdiction efforts. Over time, however, these Mexican cartels grew richer and more powerful from the proceeds of the cocaine trade, and they began to take on an expanded role in cocaine trafficking. The efforts of the Colombian government to dismantle the large (and violent) organizations like the Medellin and Cali cartels also allowed the Mexicans to assume more control over the cocaine supply line. Today, Mexican cartels control much of the cocaine supply chain, with their influence reaching down into South America and up into the United States. This expanded control of the supply chain brought with it a larger slice of the profits for the Mexican cartels, so they have become even more rich and powerful.
Of course, this large quantity of illicit income also brings risk with it. The massive profits that can be made by controlling a smuggling corridor into the United States are a tempting lure to competitors (internal and external). This means that the cartels require enforcers to protect their personnel and operations. These enforcers and the escalation of violence they brought with them are a second factor that has hampered the ability of the cartels to reach a balance.
Initially, some of the cartel bosses served as their own muscle, but as time went by and the business need for violence increased, the cartels brought in hired help to carry out the enforcement function. The first cartel to do this on a large scale was the AFO (a very aggressive organization), which used active and current police officers and youth gangs (some of them actually from the U.S. side of the border) as enforcers. To counter the AFO’s innovation and strength, rival cartels soon hired their own muscle. The Juarez cartel created its own band of police called La Linea and the Gulf cartel took things yet another step and hired Los Zetas, a group of elite anti-drug paratroopers who deserted their federal Special Air Mobile Force Group in the late 1990s.
The Gulf cartel’s private special operations unit raised the bar yet another notch, and the Sinaloa cartel formed its own paramilitary unit called Los Negros to counter the strength of Los Zetas. With paramilitary forces comes military armament, and cartel enforcers graduated from using pistols and submachine guns to regularly employing fully automatic assault rifles, rocket-propelled grenades and hand grenades. As we have previously noted, thugs with such weapons do pose a threat, but when those weapons are in the hands of highly-trained gunmen with the ability to operate as an integrated unit, the threat is far greater.
The life of a cartel enforcer can be brutish and short. In order to find additional personnel to beef up their ranks, the various cartel enforcer units formed outside alliances. Los Zetas worked with former Guatemalan special forces commandos called Kaibiles and with the Mara Salvatrucha street gang (MS-13). La Linea formed a close alliance with the American Barrio Azteca street gang and with Los Aztecas, the gang’s Mexican branch. Cartels also recruit heavily, and it is now common to see them place “help wanted” signs in which they offer soldiers and police officers big money if they will quit their jobs and join a cartel enforcer unit.
In times of intense combat, the warriors in a criminal organization can begin to eclipse the group’s businessmen in terms of importance, and over the past decade the enforcers within groups like the Gulf and Sinaloa cartels have become very powerful. In fact, groups like Los Zetas and Los Negros have become powerful enough to split from their parent organizations and, essentially, form their own independent drug-trafficking organizations. This inter-cartel struggle has proved quite deadly as seen in the struggle between AFO factions in Tijuana over the past year and in the more recent eruption of violence between the Gulf cartel and Los Zetas in northeastern Mexico.
This weakening of the traditional cartels was part of the Calderon administration’s publicized plan to reduce the power of the drug traffickers and to deny any one organization or cartel the ability to become more powerful than the state. The plan appears to have worked to some extent, and the powerful Gulf and Sinaloa cartels have splintered, as has the AFO. The fruit of this policy, however, has been incredible spikes in violence and the proliferation of aggressive new drug-trafficking organizations that have made it very difficult for any type of equilibrium to be reached. So the Mexican government’s policies have also been a factor in destabilizing the balance.
Finding a Fulcrum
The current round of cartel fighting began when the balance of cartel power was thrown off by the death of Amado Carrillo Fuentes in 1997, which resulted in the weakening of the once powerful Juarez cartel. Shortly after the head of the Sinaloa cartel, Joaquin Guzman Loera, aka El Chapo, escaped from prison in 2001, he began a push to move in on the weakened Juarez cartel. Guzman initially succeeded and the Juarez cartel became part of the Sinaloa Federation until the two cartels had a falling out in 2004.
Then when the chief enforcer of the AFO, Ramon Arellano Felix, was killed in 2002, both the Sinaloa and the Gulf cartels attempted to wrest control of Tijuana from the AFO. Finally, when Gulf cartel kingpin Osiel Cardenas Guillen was captured in March 2003, the Sinaloa cartel sent Los Negros to attempt to take control of the Gulf cartel’s territory, and this sparked a series of violent clashes in Nuevo Leon and Tamaulipas. The BLO’s top enforcer, Edgar Valdez Villarreal (La Barbie), led Los Negros into Nuevo Laredo.
These same basic turf wars are still active, meaning that there is still ongoing violence in Reynosa, Nuevo Laredo, Ciudad Juarez and Tijuana, but as noted above, the actors are changing, with organizations like Los Zetas breaking out of the Gulf cartel and the Beltran Leyva Organization (BLO) parting ways with the Sinaloa cartel. Indeed, the Gulf and Sinaloa cartels have joined forces with La Familia Michoacana (LFM) to form a new super cartel called the New Federation and are now allies in the struggle against Los Zetas and the BLO, which have teamed up with the Juarez cartel to fight against the New Federation. One constant in the violence of the past decade has been the aggressiveness of the Sinaloa cartel as it has sought to take territory from other cartels and organizations.
In the midst of the current cartel landscape, which has radically shifted over the past year, it is difficult for any type of balance to be found. There are also very few levers with which the Calderon government can apply pressure to help force the shifting pieces into alignment. In the near term, perhaps the only hope for striking a balance and reducing the violence is that the New Federation is strong enough to kill off organizations like Los Zetas, the BLO and the Juarez cartel and assert calm through sheer force. However, while the massed forces of the New Federation initially made some significant headway against Los Zetas, the former special operations personnel appear to have rallied, and Los Zetas’ tactical skills and arms make them unlikely to be defeated easily.
There have been many rumors that the New Federation, in its fight against Los Zetas, was being helped by the Mexican government. (Some of those rumors have come from the New Federation itself.) During the New Federation’s offensive against Los Zetas, federation enforcers have been seen driving around Reynosa and Nuevo Laredo in vehicles openly marked with signs indicating they belonged to the New Federation. While far from conclusive proof of government assistance, the well-marked vehicles certainly do seem to support the cartel’s assertion that, at the very least, the government did not want to interfere with the federation’s operation to destroy Los Zetas.
When pieced together with other observations gathered during the cartel wars, this also suggests that the Sinaloa cartel may have consistently benefited from the government’s actions. These actions would include taking out the BLO leadership after the Beltran Leyva brothers turned against Sinaloa and the government’s success against La Linea and Los Aztecas in Juarez. There are also occasional contraindications, such as the recent large-scale attacks against military bases in the northeast that appear to have been conducted by the New Federation.
Despite these contraindications, the cartels fighting the New Federation believe the government favors the group, and there have long been rumors that Calderon was somehow tied to El Chapo. The Juarez cartel may have recently taken some desperate steps to counter what it perceives to be a dire threat of government and New Federation cooperation. A local Juarez newspaper, El Diario, recently published an article discussing a Los Aztecas member who had been detained and interrogated by the Mexican military and federal police in connection with the murders of three U.S. Consulate employees in Juarez in March. During the interrogation, according to El Diario, the Los Aztecas member divulged that a decision was made by leaders in the Barrio Azteca gang and Juarez cartel to engage U.S. citizens in the Juarez area in an effort to force the U.S. government to intervene in Mexico and therefore act as a “neutral referee,” thereby helping to counter the Mexican government’s favoritism toward the New Federation.
Of course, it is highly possible that the Sinaloa cartel is just a superior cartel and is better at using the authorities as a weapon against its adversaries. On the other hand, perhaps the increasingly desperate government has decided to use Sinaloa and the New Federation as a fulcrum to restore balance to the narcotics trade and reduce the violence across Mexico.
In any case, we will be closely watching the activities of the New Federation and the Mexican government over the next several months to see if this hypothesis is correct. Much hangs in the balance for Calderon, the Mexican people and their American neighbors.

Mexico and the Failed State Revisited‏

An interesting article from www.stratfor.com about the fact that Mexico might actually be ENCOURAGING the exporting of drugs to the United States. This follows this post about Barack Obama's diplomatic war on Israel. This follows this article about the recent news about offshore drilling to encourage American energy independence that follows this previous post about it.. This is a key issue to prevent money from going to hostile countries such as Iran and Venezuela. For more posts like this click here

Mexico and the Failed State Revisited‏
By George Friedman
STRATFOR argued March 13, 2008, that Mexico was nearing the status of a failed state. A failed state is one in which the central government has lost control over significant areas of the country and the state is unable to function. In revisiting this issue, it seems to us that the Mexican government has lost control of the northern tier of Mexico to drug-smuggling organizations, which have significantly greater power in that region than government forces. Moreover, the ability of the central government to assert its will against these organizations has weakened to the point that decisions made by the state against the cartels are not being implemented or are being implemented in a way that would guarantee failure.
Despite these facts, it is not clear to STRATFOR that Mexico is becoming a failed state. Instead, it appears the Mexican state has accommodated itself to the situation. Rather than failing, it has developed strategies designed both to ride out the storm and to maximize the benefits of that storm for Mexico.
First, while the Mexican government has lost control over matters having to do with drugs and with the borderlands of the United States, Mexico City’s control over other regions — and over areas other than drug enforcement — has not collapsed (though its lack of control over drugs could well extend to other areas eventually). Second, while drugs reshape Mexican institutions dramatically, they also, paradoxically, stabilize Mexico. We need to examine these crosscurrents to understand the status of Mexico.
Mexico’s Core Problem
Let’s begin by understanding the core problem. The United States consumes vast amounts of narcotics, which, while illegal there, make their way in abundance. Narcotics derive from low-cost agricultural products that become consumable with minimal processing. With its long, shared border with the United States, Mexico has become a major grower, processor and exporter of narcotics. Because the drugs are illegal and thus outside normal market processes, their price is determined by their illegality rather than by the cost of production. This means extraordinary profits can be made by moving narcotics from the Mexican side of the border to markets on the other side.
Whoever controls the supply chain from the fields to the processing facilities and, above all, across the border, will make enormous amounts of money. Various Mexican organizations — labeled cartels, although they do not truly function as such, since real cartels involve at least a degree of cooperation among producers, not open warfare — vie for this business. These are competing businesses, each with its own competing supply chain.
Typically, competition among businesses involves lowering prices and increasing quality. This would produce small, incremental shifts in profits on the whole while dramatically reducing prices. An increased market share would compensate for lower prices. Similarly, lawsuits are the normal solution to unfair competition. But neither is the case with regard to illegal goods.
The surest way to increase smuggling profits is not through market mechanisms but by taking over competitors’ supply chains. Given the profit margins involved, persons wanting to control drug supply chains would be irrational to buy, since the lower-cost solution would be to take control of these supply chains by force. Thus, each smuggling organization has an attached paramilitary organization designed to protect its own supply chain and to seize its competitors’ supply chains.
The result is ongoing warfare between competing organizations. Given the amount of money being made in delivering their product to American cities, these paramilitary organizations are well-armed, well-led and well-motivated. Membership in such paramilitary groups offers impoverished young men extraordinary opportunities for making money, far greater than would be available to them in legitimate activities.
The raging war in Mexico derives logically from the existence of markets for narcotics in the United States; the low cost of the materials and processes required to produce these products; and the extraordinarily favorable economics of moving narcotics across the border. This warfare is concentrated on the Mexican side of the border. But from the Mexican point of view, this warfare does not fundamentally threaten Mexico’s interests.
A Struggle Far From the Mexican Heartland
The heartland of Mexico is to the south, far from the country’s northern tier. The north is largely a sparsely populated highland desert region seen from Mexico City as an alien borderland intertwined with the United States as much as it is part of Mexico. Accordingly, the war raging there doesn’t represent a direct threat to the survival of the Mexican regime.

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Indeed, what the wars are being fought over in some ways benefits Mexico. The amount of money pouring into Mexico annually is stunning. It is estimated to be about $35 billion to $40 billion each year. The massive profit margins involved make these sums even more significant. Assume that the manufacturing sector produces revenues of $40 billion a year through exports. Assuming a generous 10 percent profit margin, actual profits would be $4 billion a year. In the case of narcotics, however, profit margins are conservatively estimated to stand at around 80 percent. The net from $40 billion would be $32 billion; to produce equivalent income in manufacturing, exports would have to total $320 billion.
In estimating the impact of drug money on Mexico, it must therefore be borne in mind that drugs cannot be compared to any conventional export. The drug trade’s tremendously high profit margins mean its total impact on Mexico vastly outstrips even the estimated total sales, even if the margins shifted substantially.
On the whole, Mexico is a tremendous beneficiary of the drug trade. Even if some of the profits are invested overseas, the pool of remaining money flowing into Mexico creates tremendous liquidity in the Mexican economy at a time of global recession. It is difficult to trace where the drug money is going, which follows from its illegality. Certainly, drug dealers would want their money in a jurisdiction where it could not be easily seized even if tracked. U.S. asset seizure laws for drug trafficking make the United States an unlikely haven. Though money clearly flows out of Mexico, the ability of the smugglers to influence the behavior of the Mexican government by investing some of it makes Mexico a likely destination for a substantial portion of such funds.
The money does not, however, flow back into the hands of the gunmen shooting it out on the border; even their bosses couldn’t manage funds of that magnitude. And while money can be — and often is — baled up and hidden, the value of money is in its use. As with illegal money everywhere, the goal is to wash it and invest it in legitimate enterprises where it can produce more money. That means it has to enter the economy through legitimate institutions — banks and other financial entities — and then be redeployed into the economy. This is no different from the American Mafia’s practice during and after Prohibition.
The Drug War and Mexican National Interests
From Mexico’s point of view, interrupting the flow of drugs to the United States is not clearly in the national interest or in that of the economic elite. Observers often dwell on the warfare between smuggling organizations in the northern borderland but rarely on the flow of American money into Mexico. Certainly, that money could corrupt the Mexican state, but it also behaves as money does. It is accumulated and invested, where it generates wealth and jobs.
For the Mexican government to become willing to shut off this flow of money, the violence would have to become far more geographically widespread. And given the difficulty of ending the traffic anyway — and that many in the state security and military apparatus benefit from it — an obvious conclusion can be drawn: Namely, it is difficult to foresee scenarios in which the Mexican government could or would stop the drug trade. Instead, Mexico will accept both the pain and the benefits of the drug trade.
Mexico’s policy is consistent: It makes every effort to appear to be stopping the drug trade so that it will not be accused of supporting it. The government does not object to disrupting one or more of the smuggling groups, so long as the aggregate inflow of cash does not materially decline. It demonstrates to the United States efforts (albeit inadequate) to tackle the trade, while pointing out very real problems with its military and security apparatus and with its officials in Mexico City. It simultaneously points to the United States as the cause of the problem, given Washington’s failure to control demand or to reduce prices by legalization. And if massive amounts of money pour into Mexico as a result of this U.S. failure, Mexico is not going to refuse it.
The problem with the Mexican military or police is not lack of training or equipment. It is not a lack of leadership. These may be problems, but they are only problems if they interfere with implementing Mexican national policy. The problem is that these forces are personally unmotivated to take the risks needed to be effective because they benefit more from being ineffective. This isn’t incompetence but a rational national policy.
Moreover, Mexico has deep historic grievances toward the United States dating back to the Mexican-American War. These have been exacerbated by U.S. immigration policy that the Mexicans see both as insulting and as a threat to their policy of exporting surplus labor north. There is thus no desire to solve the Americans’ problem. Certainly, there are individuals in the Mexican government who wish to stop the smuggling and the inflow of billions of dollars. They will try. But they will not succeed, as too much is at stake. One must ignore public statements and earnest private assurances and instead observe the facts on the ground to understand what’s really going on.
The U.S. Strategic Problem
And this leaves the United States with a strategic problem. There is some talk in Mexico City and Washington of the Americans becoming involved in suppression of the smuggling within Mexico (even though the cartels, to use that strange name, make certain not to engage in significant violence north of the border and mask it when they do to reduce U.S. pressure on Mexico). This is certainly something the Mexicans would be attracted to. But it is unclear that the Americans would be any more successful than the Mexicans. What is clear is that any U.S. intervention would turn Mexican drug traffickers into patriots fighting yet another Yankee incursion. Recall that Pershing never caught Pancho Villa, but he did help turn Villa into a national hero in Mexico.
The United States has a number of choices. It could accept the status quo. It could figure out how to reduce drug demand in the United States while keeping drugs illegal. It could legalize drugs, thereby driving their price down and ending the motivation for smuggling. And it could move into Mexico in a bid to impose its will against a government, banking system and police and military force that benefit from the drug trade.
The United States does not know how to reduce demand for drugs. The United States is not prepared to legalize drugs. This means the choice lies between the status quo and a complex and uncertain (to say the least) intervention. We suspect the United States will attempt some limited variety of the latter, while in effect following the current strategy and living with the problem.
Ultimately, Mexico is a failed state only if you accept the idea that its goal is to crush the smugglers. If, on the other hand, one accepts the idea that all of Mexican society benefits from the inflow of billions of American dollars (even though it also pays a price), then the Mexican state has not failed — it is following a rational strategy to turn a national problem into a national benefit.