Cartel Membership and Organization
As recently as a year ago, the Gulf cartel was considered the most powerful drug trafficking organization in Mexico. After nearly two years of taking the brunt of the Mexican government’s efforts, it is an open question at this point whether the cartel is even intact.
The Gulf cartel’s headquarters and main area of operation historically has been the northeastern Mexican state of Tamaulipas. Through its use of Los Zetas, who operated for years as the cartel’s notorious paramilitary enforcement arm, Gulf trafficked large quantities of narcotics across the Texas border into the United States. The group’s symbolic leader is Osiel Cardenas Guillen, who led the cartel until his arrest in 2003. There are conflicting reports on who is presently in charge of the cartel. Some suggest it is Cardenas’ brother, Antonio Ezequiel “Tony Tormenta” Cardenas Guillen. These reports conflict with our previous assessment that the cartel is likely led by Jorge “El Coss” Costilla Sanchez. In any case, both men are thought to play a major role in the organization, and they may be sharing leadership responsibilities.
Los Zetas were the primary reason for Gulf’s power. Following the extradition of Osiel Cardenas Guillen to the United States in 2007, rumors surfaced that Los Zetas were distancing themselves from Gulf. Reports of Zeta activity from this past year suggest that the split was complete by spring 2008. Though details on the current relationship between Los Zetas and Gulf are murky, it appears the two groups continue to work together, but that Los Zetas no longer take orders from Gulf.
During the past 12 months, Los Zetas have remained a power to be reckoned with throughout Mexico. They operate under the command of leader Heriberto “El Lazca” Lazcano Lazcano. Miguel “Z-40” Trevino Morales is believed to be the organization’s No. 2. Trevino reportedly oversees much of the Zetas’ operations in the southern portions of the country. Daniel “El Cachetes” Perez Rojas, who was arrested this past year in Guatemala, was responsible for the group’s activities in Central America and reportedly answered directly to Lazcano. The November arrest of Jaime “El Hummer” Gonzalez Duran, the organization’s third-in-command, was another significant blow to the organization, as Gonzalez was believed responsible for Zeta operations in nine states. It is unclear at the moment who has replaced Perez and Gonzalez in the Zeta hierarch y.
Since their split with Gulf, Los Zetas have contracted themselves to a variety of drug trafficking organizations throughout the country, most notably the Beltran Leyva organization. Los Zetas also control large swaths of territory in southern Mexico, much of which formerly belonged to the Gulf cartel, and they have a presence in the interior states of Aguascalientes, San Luis Potosi and Zacatecas. Zetas are also present in disputed territories such as Durango, Sonora, Sinaloa, Jalisco, Guerrero and Michoacan due to their alliance with the Beltran Leyva organization, though these areas are not considered to be under their control.
Following the government’s crackdowns, Los Zetas have expanded from strictly drug trafficking to other criminal activities, including extortion, kidnapping for ransom and human smuggling. Los Zetas’ human smuggling operations are based out of Quintana Roo and Yucatan states, where mostly Cuban and Central American immigrants enter Mexico on their way to the United States. Los Zetas maintain a vast network of safe-houses and access to counterfeit immigration documents — which facilitate the illegal movement of drugs or people. At an average cost of $10,000 per person, human smuggling has become a lucrative business for the organization.
Beltran Leyva Organization
The Beltran Leyva family has a long history in the narcotics business. Until this past year, the organization was part of the Sinaloa Federation, for which it controlled access to the U.S. border in Sonora state (among other responsibilities). By the time Alfredo Beltran Leyva was arrested in January, however, the Beltran Leyva organization’s alliance with Sinaloa was over. (It is rumored his arrest resulted from a Sinaloa betrayal.)
Before this year, the Beltran Leyva brothers served as high-ranking members of the organization with many people under their command and plenty of infrastructure to branch out on their own. Under the leadership of Arturo Beltran Leyva, the organization moved quickly to secure strategic narcotics transport routes in the states of Sinaloa, Durango, Sonora, Jalisco, Michoacan, Guerrero and Morelos. This attempt to conquer territory from their former Sinaloa partners sparked a wave of violence. The Beltran Leyva brothers’ Colombian cocaine supplier, Ever Villafane Martinez, was arrested in Morelos state in August. Since then, however, the organization has pursued a relationship with Victor and Dario Espinoza Valencia of Colombia’s Norte del Valle cartel, though the details of this relationship are unclear.
The Beltran Leyva organization has quickly become one of the most powerful drug trafficking organizations in Mexico. Not only have they shown themselves capable of trafficking drugs and going toe-to-toe with the Sinaloa cartel, they also have demonstrated a willingness to order targeted assassinations of high-ranking government officials. The most notable of these was the May 9 assassination of acting federal police director Edgar Millan Gomez. The Beltran Leyva organization also occasionally has secured the cooperation of other drug trafficking organizations such as Los Zetas, Gulf, the Juarez cartel and a faction of the Arellano Felix organization (AFO) in Tijuana. However, these alliances are tentative at best and appear to have been forged mainly to counter the powerful influence of Joaquin “El Chapo” Guzman Loera’s Sinaloa cartel.
Joaquin “El Chapo” Guzman Loera is the most wanted drug lord in Mexico. Despite the turbulence it has experienced this past year, his Sinaloa cartel is perhaps the most capable drug trafficking organization in Mexico. This turbulence involved the loss of the Vicente Carrillo Fuentes organization in Ciudad Juarez as well as the split with the Beltran Leyva organization. Guzman has maintained his long-standing alliances with his high-ranking lieutenants, Ismael “El Mayo” Zambada Garcia and Ignacio “El Nacho” Coronel Villareal. These two have continued to work with Guzman, even as he has come under attack from nearly every other cartel in Mexico.
The Sinaloa cartel also has come under increasing attack this past year from the Mexican government, which has deployed several thousand troops to Sinaloa state. The increased security presence has so far been too limited to significantly affect the Sinaloa cartel’s operations, though some of its money laundering operations and other parts of its infrastructure have been shut down.
The Sinaloa cartel’s loss of partners in Mexico does not appear to have impacted its ability to smuggle drugs from South America to the United States. On the contrary, based on seizure reports, the Sinaloa cartel appears to be the most active smuggler of cocaine. It has also demonstrated the ability to establish operations in previously unknown areas, such as Central America and South America, even as far south as Peru, Paraguay and Argentina. It also appears to be most active in diversifying its export markets; rather than relying solely on U.S. consumers, it has made an effort to supply distributors of drugs in Latin American and European countries.
Vicente Carrillo Fuentes Organization/Juarez Cartel
The Vicente Carrillo Fuentes organization, also known as the Juarez cartel, is based out of Ciudad Juarez, Chihuahua state, across the border from El Paso, Texas. It also has a presence in much of northern Chihuahua state and parts of Nuevo Leon and Sonora states.
The cartel is led by Vicente Carrillo Fuentes, brother of original leader Amado Carrillo. Believed to be second-in-command is his nephew, Vicente Carrillo Leyva. The Juarez cartel has had a long-standing alliance with the Beltran Leyva brothers, based on family and business ties. This past year, however, Carrillo Fuentes has turned to Los Zetas to aid in the defense of Juarez.
Over the past year, the Juarez cartel has been locked in a vicious battle with its former partner, the Sinaloa cartel, for control of Juarez. The fighting between them has left more than 2,000 dead in Chihuahua state so far this year. The Juarez cartel relies on two enforcement arms to exercise control over both sides of the border: La Linea, a group of current and former Chihuahua police officers, is prevalent on the Mexican side, while the large street gang Barrio Azteca operates in Texas, in cities such as El Paso, Dallas and Austin.
Arellano Felix Organization/Tijuana Cartel
The AFO, also known as the Tijuana cartel, has been weakened almost beyond recognition over the past year due to the efforts of both U.S. and Mexican law enforcement to capture several high-ranking leaders. The most symbolic was the October arrest of Eduardo “El Doctor” Arellano Felix, the only original Arellano Felix brother who had evaded capture.
Fighting among the various factions of the cartel itself has led to hundreds of deaths in the Tijuana area over the past 12 months and resulted in the splitting of the cartel into two factions. One is led by Fernando “El Ingeniero” Sanchez Zamora, a nephew of the original Arellano Felix brothers. Eduardo Teodoro “El Teo” Garcia Sementa, who served as an enforcer under the Arellano Felix brothers, controls the rival faction. Disagreements over authority reportedly led to much of the violence between the two factions in the first half of 2008. The violence peaked on April 26 when three separate and prolonged gunbattles erupted on the streets of Tijuana, leaving 13 people dead and five wounded.
The most recent wave of violence, which claimed more than 100 lives over a two-week period in October, was again attributed to fighting between the two factions. In this case, however, El Teo’s offensive received the support of the Sinaloa cartel, which would benefit greatly from the access to the United States that control of Tijuana would provide.
Calderon’s Success Story
Since taking office in December 2006, Mexican President Felipe Calderon has undertaken extraordinary measures in pursuit of the country’s powerful drug trafficking organizations. The policies enacted by Calderon saw some progress during his first year in office, although it has only been during the past year that the continued implementation of these policies has produced meaningful results in the fight against the cartels.
Mexico appears to be a country coming undone. Powerful drug cartels use Mexico for the overland transshipment of illicit drugs — mainly cocaine, marijuana and methamphetamine — from producers in South America to consumers in the United States. Violence between competing cartels has grown over the past two years as they have fought over territory and as the Mexican army has tried to secure the embattled areas, mainly on the country’s periphery. It is a tough fight, made even tougher by endemic geographic, institutional and technical probl ems in Mexico that make a government victory hard to achieve. The military is stretched thin, the cartels are becoming even more aggressive and the people of Mexico are growing tired of the violence.
At the same time, the country is facing a global economic downturn that will slow Mexico’s growth and pose additional challenges to national stability. Although the country appears to be in a comfortable fiscal position for the short term, the outlook for the country’s energy industry is bleak, and a decline in employment could prompt social unrest. Complications also loom in the political sphere as Mexican parties campaign ahead of 2009 legislative elections and jockey for position in preparation for the 2012 presidential election.
As the international financial crisis roils economies around the world, Mexico has been hit hard. Tightly bound to its northern neighbor, Mexico’s economy is set to shrink alongside that of the United States, and it will be an enormous challenge for the Mexican government to face in the midst of a devastating war with the drug cartels.
The key to understanding the Mexican economy is an appreciation of Mexico’s enormous integration with the United States. As a party to the North American Free Trade Agreement and one of the largest U.S. trading partners, Mexico is highly vulnerable to the vagaries of the U.S. economy. The United States is the largest single source of foreign direct investment in Mexico. Even more important, the United States is the destination of more than 80 percent of Mexico’s exports. A slowdown in economic activity and consumer demand in the United States thus translates directly into a slowdown in Mexico.
In addition to the sale of most Mexican goods in the U.S. markets, the United States is a major source of revenue for Mexico though remittances, and together these sources of income provide around a quarter of Mexico’s gross domestic product (GDP). When Mexican immigrants send money home from the United States, it makes up a substantial portion of Mexico’s external revenue streams. Remittances to Mexico totaled US$23.9 billion in 2007, according to the Mexican Central Bank. The slowdown in the U.S. housing sector has brought remittances down during the course of 2008 from highs in the middle of 2007. As of the end of September 2008, remittances for the year were down by US$672.6 million from the same period in 2007.
The decline in remittances is being matched by a slowdown in Mexico’s economy across the board. The Mexican government estimates that Mexico’s GDP will slow from 3.2 percent growth in 2007 to 1.8 percent in 2008. Given that the U.S. economy is sliding into recession at the same time, this is likely only the beginning of the Mexican slowdown, and growth is expected to bottom out at 0.9 percent in 2009.
With growing pressure on the rest of the economy, the prospect of rising unemployment is perhaps the most daunting challenge. So far, unemployment and underemployment in Mexico has risen from 9.77 percent in December 2007 to 10.82 percent in October 2008, (some 27 percent of the workforce is employed in the informal sector). But slowed growth and declining demand in the United States is sure to cause further declines in employment in Mexico. As happened in the wake of Mexico’s 1982 debt crisis, Mexicans may seek to return to a certain degree of subsistence farming in order to make it through the tough times, but that is nowhere near an ideal solution. The government has proposed a US$3.4 billion infrastructure buildup plan to be implemented in 2009 that will seek to boost jobs (and demand for industrial goods) throughout Mexico, although it is not clear how quickly this can take effect or how many jobs it might create.
The government does not c ontrol the slopes of the Sierra Madre Oriental or the Sierra Madre Occidental, which run north-south up each coast and are the primary drug-trafficking routes. Nor does it control the northern desert that borders the United States, which, like the fabled Wild West in the United States, is essentially a frontier where laws written in Mexico City are difficult to enforce.
The northern border region is fundamentally defined by its proximity to the United States, which is the primary source of trade revenue, tourism, remittances, jobs (for those who brave the border crossing) and foreign direct investment. Of course, the United States is also the world’s biggest market for illicit drugs. Southeastern Mexico is equally frontier-like, with dense jungles on the eastern edge of the Mexico-Guatemala border and in the mountains of the Chiapas highlands. Though closer to Mexico City, the southern region is extremely poor, ethnically diverse and still hosts the Zapatista National Liberation Army, a remnant of the Mexican Revolution in the early 20th century.
Not incidentally, the revolution, which began in 1910, involved a near-identical challenge for the central government in terms of territorial control, with rebels of Emiliano Zapata’s Liberation Army of the South in southern Mexico and Pancho Villa’s army in the north. The geographical similarities between the revolutionary-era strongholds and those of today’s drug cartels underscore how historically difficult it is for the government to control its territory. The absence of natural geographic connections such as interlinking rivers, which would provide easy and rapid transit for federal security forces, mean that the Mexican central government must overcome mountains, deserts and jungles to assert its authority in the hinterlands.
Today, the cartels take full advantage of the government’s lack of control in the northern and southern parts of the country. Drug traffickers move cocaine into southern Mexico after traversing Central America, on the way north from the cocoa-growing Andean countries of South America. To the north, and along the transportation corridors of the two coasts, Mexican drug cartels enjoyed limited government interference during the decades of the Institutional Revolutionary Party (PRI) rule and established de facto kingdoms where their word was law and drugs moved efficiently northward — into the United States.
In 2006, however, the tide turned for the drug traffickers when newly elected Mexican President Felipe Calderon rode to power on campaign promises of crushing the cartels. The task would not be easy for Calderon. Corruption permeates every level of Mexico’s law enforcement institutions — whose members are continuously under the threat of death by the cartels — and local (and even federal) police are unable to maintain the rule of law. This has left much of Mexico’s border region utterly lawless.
With local and federal law enforcement compromised — and faced with a well-trained, wealthy, heavily armed and pernicious enemy — Calderon concluded that the only way to defeat Mexican organized crime was to deploy the military. But despite the military’s superior firepower and combat capabilities (compared to domestic security forces), it is neither big enough to cover the necessary territory nor is it designed for domestic law enforcement. Long, drawn-out military operations also stress an already troubled government budget. And the environment in which the military must operate is a hostile one. As it pursues the cartels, the Mexican military is more like an occupying power chasing local insurgents than an agency of the central government enforcing the rule of law. Moreover, its relatively untarnished reputation in a country rife with corruption is not guaranteed to endure. The longer it stays engaged with the cartels the greater its chances of being corrupted. The reality, of course, is that Mexico has few other options.
During the 71 years of rule by the PRI and the subsequent six-year presidency of the National Action Party’s Vicente Fox, the Mexican government made limited moves against the cartels. For most of PRI’s rule, the cartels were nowhere near as strong as they have become in the past decade, so politicians could afford to let them be, for the most part. Lacking pressure during this time, the cartels grew increasingly powerful, establishing complex business networks throughout their regions and into the international drug markets. As business began to pick up, so did the influence of the cartels. The increasing cash flow gave the cartels higher operating budgets, which made it easier to buy cooperation from local authorities and also raised the stakes in the drug-trafficking industry.
As the cartels became more powerful the level of violence also began to rise, and by 2006 Calderon’s government decided to make its move. By this time, however, the drug cartels were so entrenched that they had become the law of the land in their respective territories. Local and federal law enforcement authorities had become corrupt, and the influx of military troops had the effect of destabilizing these relationships — as the planners intended — and wreaking havoc on the business of the cartels. With the disso lution of their networks, the cartels began fighting back, leveraging their established links in the government and aggressively defending their turf.
The problem of corruption boils down to the lure of money and the threat of death. Known by the phrase plata o plomo (which literally translates to “silver or lead,” with the implied meaning, “take a bribe or take a bullet”), the choice given to law enforcement and government officials puts them under the threat of death if they do not permit (or, as is often the case, facilitate) cartel operations. With the government historically unable to protect all of its personnel from these kinds of threats — and certainly unable to match the cartels’ deep pockets — Mexico’s law enforcement officials have become almost universally unreliable. Death threats have increased as the government has intensified its anti-cartel operations, resulting in high turnover and difficulties recruiting new personnel — especially qualified personnel. (The city of Juarez has been without a police chief since mid-summer, after previous chiefs were killed or fled to the United States. Similar fates have befallen local law enforcement agencies in nearly every Mexican state.)
In terms of ready cash, Mexican organized crime can beat any offer the government can make. The Mexican cartels bring in somewhere between $40 billion and $100 billion per year. The Oct. 27 announcement that 35 employees of the anti-organized crime unit (SIEDO) in the Office of the Mexican Attorney General (PGR) had been arrested and charged with corruption illustrates the fact that not even the upper reaches of government are safe from infiltration by the cartels. In this example, top officials were paid up to $450,000 per month to pass information along to a cartel involved in cocaine trafficking. This kind of money is a huge temptation in a country where annual salaries for public servants run from $10,000 for local police officers to $48,000 for senators and $220,000 for the president. Organized crime can target key individuals in the Mexican government and convince them to provide information with a combination of lucrative offers and physical threats if they do not comply.
When it comes to carrying through on death threats, the cartels have proven themselves to be quite efficient. The assassinations of Edgar Millan Gomez, Igor Labastida Calderon and other federal police officials in Mexico City earlier this year are cases in point. Hitting high-level officials in the capital of the country sends a bold message to government officials. On a local and more pernicious level, the cartels have mounted a concerted offensive against state and municipal police. In the past year they have murdered a total of 500 police officers, and in some towns, the chief of police and the entire police force have been arrested on corruption charges.
Death threats are a serious problem for Mexican authori ties because Mexico simply does not have the capacity to protect all of its law enforcement personnel and government officials. Effective protective details require high levels of skill, and Mexico’s manpower deficiencies make it difficult to find people to fill these positions — especially since the candidates would largely be Mexican law enforcement personnel who are themselves the targets.