Changing Nature Of Drug Cartels

Last night, I had a conversation with academic Edgardo Buscaglia, a lawyer and economist at ITAM, a Mexico City university. Buscaglia is a knowledgeable man about Mexico’s drug trade and cartel wars, and provides, unlike many others, details to support his thinking.

Back in 2010, for example, he estimated that the Sinaloa Federation was responsible for almost half the drug trade in Mexico, about 45 percent, of the drug trade in Mexico, and using statistics from the country’s security forces calculated that only 941 of the 53,174 people arrested for organized crime in the previous six years were associated with Sinaloa.

That, of course, gave fuel to those who argue that the Mexican authorities in the war on drugs favors Joaquín El Chapo Guzmán  and is seeking to diminish or terminate the other cartels. As the theories go, the authorities are either in cahoots with the Sinaloa Federation or plan to allow the cartel to expand and at a later date negotiate a deal with El Chapo for a decrease in violence.

Buscaglia himself isn’t so sure. And I don’t subscribe myself to either the cahoots theory or the more Machiavellian theory that the Calderon administration is keen to protect the Sinaloa Federation so that things can be returned to the old ways of a dominant cartel keeping everything stable.

I see no hard evidence that the Calderon administration is going easy on the Sinaloa Federation or that it wants to boost the power of El Chapo, although it wouldn’t surprise me if the next administration, especially if it is formed by Enrique Peña Nieto of the Institutional Revolutionary Party, or PRI, may try to pull off a deal with the Sinaloans.

It seems to me that the Calderon administration really is trying to capture El Chapo, even though their best chance to date was bungled in February (see post below).

So why the discrepancy? Why does the Sinaloa Federation suffer fewer arrests than the other cartels?

There are several answers.

First, the Sinaloa Federation is a much harder cartel to penetrate compared to, say, Los Zetas. It is built around families while Los Zetas isn’t. Second, it is less exposed and forced to compete in hostile environments because it is less concerned about expanding its geographical territory. It already controls considerable territory and as a producer of drugs much of what it has to do is transactional and deal-making.

Third, it has been at the game longer and is more efficient. And fourth, and this is where there is an element of truth to the cahoots theory, it is has more local and state politicians and law-enforcement officials in its pocket and so is the beneficiary of tip-offs.

But to return to Buscaglia. Since 2003 he and his team have been analyzing case files and indictments at the federal level and from 17 of Mexico’s states. And what they have found in their sampling is how the nature of the cartels and their criminal activities have been changing in the past seven years as the war on drugs has intensified. Only about half of the cartels’ manpower, resources and time is spent on drug trafficking.

The picture he sees is one of smart and determined diversification, prompting him to argue that calling these crime syndicates drug cartels is missing the point. They are now broad, diversified transnational crime organizations and are as much involved in other crimes as narcotics trafficking.

What other crimes? High on the list is trading in counterfeit and pirated goods. Human trafficking, extortion and kidnapping also figure prominently. And until the state takes on the economic underpinning of the cartels, then it will lose in its confrontation with the crime organizations,  Buscaglia argues.

“The state will have to start dismantling in a methodical way the economic infrastructure of the cartels, to seize their assets in terms of property, businesses, storage facilities, transportation, etc,” he says.

A Challenge TO US-Led Drug Prohibition

I filed this piece below on the growing calls in Central America for drug legalization while in Mexico for some overseas media outlets

From Jamie Dettmer in Mexico City

The Obama administration has been criticized in the past for adopting a policy of benign neglect towards Latin America but that changed abruptly in March when a series of top officials, including Vice President Joe Biden and Homeland Security Secretary Janet Napolitano, scampered down south to court Central American leaders.

What has the administration spooked is the rising chorus in Latin America of politicians questioning publicly the sense in maintaining a prohibition on drugs.

Calls for legalizing narcotics have been heard before in Latin America but generally the chorus has included only fringe or retired front-rank politicians. In 2009, the former presidents of Mexico, Brazil and Colombia blasted the war on drugs, arguing the time had arrived at least for decriminalizing marijuana.

This time, though, sitting presidents are leading the chorus, the first serious challenge by foreign governments to the U.S.-led policy of drug prohibition since the launching of the “war on drugs” by Richard Nixon in 1971.

In the vanguard are the leaders of Guatemala, Honduras, El Salvador and Costa Rica — all of whom are facing violent incursions in their territory of expansionary Mexican cartels. They insist the time has come to rethink current counter-narcotics policies and they want a multilateral discussion to consider legalizing, or at least decriminalizing, the use of not just marijuana but of all illicit drugs.

Even the region’s hard-line drug warriors, Mexico’s Felipe Calderón, who has waged a five-year-long militarized “war on drugs”, and Colombia’s Juan Manuel Santos, who has been no slouch either in combating traffickers, have voiced sympathy with their neighbors’ position.

Calderón and Santos shocked Washington last year by raising the idea of legalizing soft drugs like marijuana. The Mexican president then argued that “if drug consumption appears impossible to stop, then the decision makers should look for more options – including market alternatives – in order to reduce the astronomical earnings of criminal organizations.”

And Santos is prepared to go a step further. His government is preparing to announce later this month legislation to decriminalize personal drug possession, placing a five- gram limit on marijuana and a limit of one gram for cocaine and Crack.

What makes the legalization talk down south doubly disturbing for the Obama administration is that back in the United States the signs are that public opinion may be shifting too and especially when it comes to legalizing pot. According to a Gallup poll in the autumn, an unprecedented one in two Americans supports pot’s legalization.

Only last week, conservative televangelist Pat Robertson argued that people should not be sent to prison for marijuana possession. “I’m not a crusader,” said the 81-year-old religious broadcaster. “I’ve never used marijuana and I don’t intend to, but it’s just one of those things that I think: this war on drugs just hasn’t succeeded.”

With drug violence ravaging Central America – the region has the highest homicide rate in the world and is more deadly than Afghanistan when it comes to killings – the viewpoint that the war on drugs isn’t succeeding is what’s driving the region’s leaders to demand alternatives to interdiction and prohibition.

The advocacy of a narcotics rethink got a boost earlier in February when new Guatemalan President Otto Pérez Molina, a rightwing former army general, became a convert, stunning Washington DC and observers alike by announcing that the U.S. inability to cut drug consumption left his country no option but to consider legalizing narcotics.

This total reversal by Pérez Molina, he had promised to emulate President Calderón in using the military to take on the drug cartels and street gangs, has emboldened the legalization advocates. Neither Gen. Pérez nor his disgruntled fellow rebels changed tune following Vice President Biden’s March 6 meeting with them in Honduras’ capital, Tegucigalpa.

The Central American rebels heard the Vice President out when he said that the U.S. wouldn’t be legalizing drugs and remained determined to assist them in defeating transnational cartels with funding and intelligence help. But after the meeting they announced they would consider Pérez’s legalization proposal at a bigger March 24 meeting in Guatemala.

Biden avoided getting drawn into a public debate about drug legalization both in Tegucigalpa and a few days earlier in Mexico City, where he met the three leading presidential candidates to succeed Calderón. But come March 24, the Obama administration will have little choice but to debate the pros and cons of legalization openly with the Central American leaders.

And the Obama administration has reluctantly agreed to drug legalization to be on the agenda for next month’s Summit of the Americas to be held in Cartagena.

The issue of legalization is likely to remain on the political front-burner, if for no other reason than that July’s Mexican presidential elections could result in a significant shift away from Calderón’s war on drugs and on his reliance on the military to wage it. That would trigger reverberations across Latin America.

The crackdown launched by President Calderón in 2006 after enforcers from a second-tier cartel shocked the country by scattering dramatically five severed human heads across a crowded disco dance-floor in the mountain town of Uruapan, has been one of the biggest and most unrelenting efforts in Latin America to bring major drug traffickers to heel.

But the war has taken a tremendous toll with nearly 50,000 dead in drug-related slayings, Mexican jails overcrowded and prone to riots and massacres and accusations flying around of human rights abuses by an increasingly frustrated military.

Meantime, despite law-enforcement successes with drug seizures and crushing second-tier cartels, the top crime organizations, Los Zetas and the Sinaloa Federation, appear undaunted and stronger than ever. And the violence has just become more barbaric, from a firebombing of a crowded casino to the murder of bloggers and journalists who tweak the cartels. Severed heads and body parts have become commonplace since 2006 as have teenage assassins.

With no end in sight, legalization advocates argue that Calderón’s war is an example of how when the drugs war is waged uncompromisingly with the full weight of the military and police, the effects are the reverse of what’s desired.

Two of the three leading presidential candidates vying to succeed Calderón have vowed to implement change; the third, Josefina Vazquez Mota of Calderón’s ruling National Action Party, appears to be suffering in the opinion polls because of the increasing unpopularity of the drugs war.

The current frontrunner, Enrique Pena Nieto of the Institutional Revolutionary Party (PRI), a former, competent state governor, wants to withdraw the military from the fight but has offered no clear timetable for doing so. He has indicated that he thinks that Calderón’s militarized approach has destabilized Mexico. And after meeting Biden, he told reporters, “the discussion is not whether we should or shouldn’t fight against it (organized crime) but what we can do to achieve better results.”

Pena as president would likely be more forthright than Calderón in pressuring the United States to consider legalizing marijuana, on the grounds that it makes little sense in pursuing Mexican pot farmers and throwing them in jail while there is industrial production underway north of the border to supply medical marijuana to the U.S. states where it is legal.

Political commentators and analysts here suspect that Pena would calm interdiction quietly by following the tactic of past PRI presidents in allowing unofficially some cartels a degree of autonomy, so long as they keep the peace and avoid extremes of inter-cartel bloodletting.

The third candidate, the charismatic Andres Manuel López Obrador of the left-leaning Democratic Revolution Party, who was a hair’s breadth from winning the presidency in 2006, has pledged to order the military back to barracks, arguing that you can’t fight violence with violence. “We need a loving republic,” he said on radio recently. “We need opportunities for young people so they don’t fall into the arms of organized crime.”

His emphasis is on the root causes of crime and he argues for redoubling economic-development and anti-poverty programs. He has also made clear if elected he would prohibit U.S. intelligence activities on Mexican soil and stop the Calderón-endorsed over-flying by U.S. unmanned drones. That it in turn would presumably trigger the U.S. to stop anti-drugs aid to Mexico that since 2008 has amounted to $1.6 billion in law enforcement aid.

Although lagging behind his two rivals, López Obrador, who’s nicknamed “El Peje” after a fish from his native state of Tabasco, is a highly effective campaigner, and political analysts expect him to surge when full-blown campaigning gets underway later this month.

Critics of the Obama administration argue that it has partly itself to blame for the genie of drug legalization popping up. They argue that the Obama administration inadvertently fueled the rebellion by failing to provide sufficient leadership and support to the Central American states affected by expansionary Mexican cartels moving operations beyond the reach of the Mexican military.

And the administration hasn’t helped its cause by proposing in its 2013 federal budget to cut by16 percent counter-narcotics aid to Latin America, including a 60 percent drop in assistance to Guatemala.