27 Oct 2008
Mexican cartels dominate the Americas
As the most powerful drug trafficking force in the region, Mexican organized crime has spread far beyond the country in search of supplies for drugs to meet US demand, Sam Logan writes for ISN Security Watch.
By Samuel Logan for ISN Security Watch
Assassinations related to drug trafficking in Mexico are on pace to pass 4,000 this year. By any count, violence in Mexico is at historical highs, and it is bad for business. Since the end of 2007, when Mexican President Felipe Calderon increased government pressure on organized crime, both the Sinaloa and the Gulf cartels have reached beyond Mexican boundaries to source supplies, secure trafficking routes and kill rivals.
Heavy pressure on Colombian drug-trafficking organizations (DTOs) opened the door for Mexicans to control a greater share of the cocaine supply chain. They now control cocaine routes out of Colombia from Andean ports to wholesale points well inside the United States. But pressure on supply routes and other areas of operation inside Mexico has forced these DTOs abroad. Guatemala, Peru and Argentina are a natural fit - corruption thrives and there is little to no government presence on borders and in many pockets of the country.
As Mexican criminals reach beyond their country to expand control over various drug-trafficking routes in the Americas, they bring a decades old violent brand of business - money or a bullet. Honor and pride push them further to kill anyone who cheats or betrays. Beyond the blood is a trail of dirty money that further corrupts, where Mexican DTOs have been linked to the electoral campaign of President Cristina Fernandez de Kirchner in Argentina.
"Mexican drug traffickers go into locations where there are no laws or regulations," Michael Sanders, spokesman for the Drug Enforcement Administration in Washington DC, told ISN Security Watch.
With billions of dollars to spend, little serious competition and a de facto presence in a number of countries, it is not a far stretch to consider that Central and South America have already become their domain.
The release valve
Pressure in Mexico has forced DTOs there into Guatemala, a neighboring Central American country that serves as a release valve, where they operate alternative supply routes with little trouble from the local government.
Guatemalan President Alvaro Colom publicly claimed on 5 September that his office and residential space was bugged by at least seven listening devices. Days later, few were surprised to learn one of his top intelligence officers, Gustavo Solano, was behind the espionage. Colom blamed the breech in security on the powerful influence of organized crime. Analysts believe the information gathered from the listening devices was sold to members of Los Zetas operating in Guatemala.
At least 300 members of Los Zetas operate in eight of Guatemala's 22 departments, according to Guatemalan news reports and a 17 October article in Mexican daily El Universal. The Guatemalan National Police believe there is a concentration of Mexican organized crime along the Guatemalan-Mexico border in the Peten department, on the country's stunted Caribbean coast, and placed in strategic locations on the borders with Honduras and El Salvador.
A 25 March shoot-out in the Guatemalan department of Zacapa left 11 dead, most of them Guatemalan criminals. Authorities believe the Zetas, formerly the military arm of the Gulf Cartel, consolidated power in the Central American country on that day, taking control over an old Gulf Cartel supply route that since at least 2004 has taken advantage of low altitude air space between two mountain ranges with no radar coverage to bring in planes. Most of this activity today is concentrated in the Sayaxche municipality of Peten, conveniently located on the border with Mexico and just miles away from a well-paved Mexican highway that leads north into the Mexican state of Chiapas, another area closely controlled by Los Zetas.
The other focus of Calderon's government offensive, the Sinaloa Cartel, has taken heavy losses due to the presence of thousands of soldiers in the states of Michoacan, Sinaloa and Sonora, the DTO's primary areas of operation.
Members of this cartel - once considered run solely by Joaquin "El Chapo" Guzman - in the past few years have branched into the methamphetamine business. The Sinaloa Cartel and other, smaller Mexican DTOs, now supply at least 80 percent of all methamphetamines consumed in the US according to the DEA's Sanders.
To launder proceeds from the sale of cocaine and meth (also known as "crystal" or "ice"), members of the Sinaloa Cartel have worked through front companies in Panama to move money back into Colombia where they are constantly pushing for more control up the supply chain.
"The Mexicans are in Colombia to purchase cocaine directly from coca labs to lower their costs," Roman Ortiz, director of Security and Post-Conflict Studies with Bogota-based Ideas for Peace Foundation (FIP), told ISN Security Watch in a recent phone interview.
Mexican DTOs, likely members of the Sinaloa Cartel, are active in Peru for the same reason, as recent violence in Peru suggests Mexican organized crime has joined with what the Peruvian government calls the Shining Path to spur coca leaf and poppy production in the country's highlands.
Backup in the Andes
By 15 October, a number of alleged Shining Path attacks left 17 people dead, 15 of them soldiers. Analysts in Peru believe these attacks may be related to the presence of Mexican DTOs who have hired back country militants to protect their supply routes out of the mountains, especially in the Ayacucho, Cusco, Huancavelica and Junin provinces of Peru - provinces where the Shining Path has caused trouble in the past.
Peru is considered South America's number two source for cocaine and poppy, the raw material source for heroin. Poppy fields, grown at high altitudes in Peru for opium collection, have been considered an illicit cash crop since 2005, when the Peruvian National Police announced the presence of some 5,000 acres of poppy flowers cultivated at over 15,000 feet in the country's southern highlands.
Between January and October 2008 the National Police registered seizures of 103 kilograms of opium paste, indicating the continued presence of poppy cultivation. Over roughly the same period, Peruvian police seized some 20 tonnes of cocaine, worth over US$2 billion according to Reuters and local reports.
The United Nations Office on Drugs and Crime concluded in its 2007 Andean coca survey that production in Peru is up by four percent in Peru, compared to five percent in Bolivia and 27 percent in Colombia.
In early September, Peruvian police seized three tonnes of cocaine hidden in 200 separate bumpers used by boats to prevent damage when docking. At the time of the seizure, a concurrent operation in eight separate points in Lima netted 30 men (some of them Mexican) and Peruvian police believe were working directly for the Sinaloa Cartel, according to a 6 September article in Peruvian daily El Comercio.
South American ephedrine supply
When the Mexican government passed a law on 2 July making all cold medicines that use ephedrine and pseudoephedrine illegal, methamphetamine traffickers, in need of the same precursor chemicals to cook their drugs, were forced to look south.
Not weeks after the Mexican law came into effect, Argentine police arrested on 18 July nine Mexicans and one Argentine who had rented a luxury residence in the Buenos Aires suburbs to cook methamphetamines. A month later, authorities discovered a warehouse where tanks of ephedrine were stored. The meth lab and ephedrine storage tanks were directly linked to the Sinaloa Cartel.
At the top of the Argentine methamphetamine racket was Jesus Martinez Espinoza, an operator with the Sinaloa Cartel who traveled to Argentina to secure a source of ephedrine for methamphetamine production locally in Argentina and abroad in Mexico. He relied on three Argentine men, including Sebastian Forza, who had deep connections in the pharmaceutical industry, as his principal suppliers of ephedrine.
"Argentina can legally import 37 tonnes of ephedrine," the DEA's Sanders told ISN Security Watch, adding, "in 2006 Argentina imported 5 tonnes of ephedrine, and in 2007 Argentina imported 26 tonnes." Still 11 tonnes under the legal limit.
When Martinez's scheme began to unravel in mid July, his local connections had to go. All three Argentine businessmen disappeared on 7 August. Their bodies were found six days later in a ditch outside of Buenos Aires. Forza and the other two were handcuffed and sprayed with bullets. The triple homicide shocked Argentines, who are not accustomed to such assassination-style murders. The news catalyzed a massive investigation that led to Martinez's arrest in Asuncion, Paraguay, just hours before he was to board a flight to Mexico.
Investigations into Forza's past found a long line of bounced checks and deep debt. One of his former associates killed himself. And along with one of the other men allegedly killed by Martinez's men, Forza contributed as much as US$118,000 to the electoral campaign of Argentine President Cristina Fernandez de Kirchner.
Over the course of 2008, Mexican organized crime has been tied not only to the triple-homicide in Buenos Aires and the bugging of the office and bedroom of the Guatemalan president, but also to the deaths of five Mexican men, found with their throats slit in Birmingham, Alabama; the kidnapping of a six-year-old boy in Las Vegas, Nevada; and possibly violence in the Peruvian high country.
Between the Sinaloa and Gulf Cartels, Mexican organized crime has proven ties with local operators in a list of countries from the US south through Central and South America, including Guatemala, Colombia, Peru, Ecuador, Venezuela, Paraguay and Argentina.
"When considering methamphetamines, Mexican organized crime is the strongest in the region," Sanders said, pointing out that the countries in Latin America with relaxed chemical import regulations will likely become targets for Mexican DTOs in the future.
"South America has become increasingly part of [Mexico's] hunting grounds, and Guatemala is already deeply involved," Bruce Bagley, chairman of the Department of International Studies at the University of Miami, told ISN Security Watch adding, "these guys are not deterred by borders."
The only other criminal organization that has had this breadth of reach and disregard for national sovereignty was the Revolutionary Armed Forces of Colombia (FARC). Billions more in profits, and potentially thousands more operatives with no political ideology, poise Mexican drug traffickers to become the region's next major security challenge.
Today these criminal groups represent the number one threat to national security in Mexico. Tomorrow, other countries such as Guatemala, Peru and Argentina may make the same claim.
Samuel Logan is an investigative journalist, and author. He is the director of Southern Pulse | Networked Intelligence, a decentralized, field-based security consultancy, and has reported on security, energy, politics, economics, organized crime, terrorism and black markets in Latin America since 1999.
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