Narcoland: The Mexican Drug Lords and Their Godfathers (46 page)

But reform is hindered by inertia and vested interests. Buscaglia continues:

Obviously, the legal businessmen, who in part benefit from these assets, feel that the flow of capital which has been so advantageous for decades is what has fostered their expansion and enabled high rates of return from their activities in the legal economy. This is why the Mexican business elite—legally constituted companies—have resisted
measures to fight organized crime, measures without which the cancer of corruption and violence can only continue to spread. The purchase of arms, the logistics of transport—trucks, boats, submarines—are paid for with these assets hidden in the legal economy. So the hand that throws a grenade at Mexican soldiers or civilians, the hand of the hit man, is also that of the above-board businessman who finances all this. Therefore we have to hold these businessmen criminally responsible.

The world of drug trafficking disposes of well-oiled mechanisms for laundering money, mainly through the Mexican banking system, according to sources involved in the process. Almost any bank will accept huge deposits in cash, wherever in the world they come from, in exchange for a commission that varies between 3 and 7 percent. None of this is reported anywhere. The amount involved determines how high up in the bank the decisions are taken. Sometimes it reaches as high as the board, according to witnesses of such negotiations. The measure taken in 2010 by the Calderón government to increase the tax levied on cash deposits will only mean fatter commissions for the banks. It will not stop money laundering.
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For Buscaglia, the lack of action against big companies involved in money laundering also has political and tactical motives.

The political reason is that many of these companies are ultimately the ones that finance election campaigns. So the politicians are reluctant to do what they see as shooting themselves in the foot.

The tactical reason is that the Mexican authorities fear that if they begin to attack and dismantle these fortunes, it will damage the formal economy. This is a major conceptual error. When I talk to people in the Finance Secretariat, they assume that if you begin to confiscate assets in the legal economy, economic growth will suffer. I always tell them it’s the reverse. At the moment there is a lot of capital that doesn’t get invested in Mexico, because many foreign investors are terrified their pension fund and mutual fund assets will get mixed up with criminal funds that have been laundered. So if you don’t clean up the economy in the way we suggest, that has a negative impact.

The Mexican government sends increasing numbers of soldiers and police here and there, but the criminals’ wealth remains intact. Meanwhile the gangs react by spending more and more on corruption and violence. The only way to break this vicious circle of more soldiers, more policemen, more violence, more corruption, is to remove thousands of millions of dollars of drug traffickers’ money from the legal economy. That is the only way of undermining their logistics, their transport, their arms deals. And the Calderón government is not doing this because, I repeat, at best they have the mistaken view that it might damage economic growth; at worst, it would mean treading on the toes of the companies that provide the campaign finance for Mexico’s political parties.

The drug traffickers see politicians, public officials, policemen, and soldiers as mere appendages of their own existence. They seek them out, seduce them, put them forward as candidates, and pay for their campaigns or their publicity once they’re in office. But ultimately they regard them as employees, and will always treat them as such—even though they know that sooner or later, someone will betray them. That is why the execution of public servants is becoming more and more frequent in Mexico, at every level of the administration. Once they’ve accepted a bribe, they won’t ever be allowed to back out.

There are politicians, policemen, soldiers, and businessmen who have acquired immense fortunes by teaming up with the drug barons who now have the country on the rack. Their impunity only feeds the cycle of blood. Yet without these sustaining pillars—businessmen, politicians and public officials—the drug business would simply collapse. Buscaglia warns:

Political protection is one of the pillars of the growth of these criminal groups. Colombia has already confronted this problem of corruption [at one time, 32 percent of the members of the Colombian congress were facing trial], as have the judges and prosecutors in Italy, the United States, of course, and most of the European countries. But we do not see Mexico following suit. There’s no serious attack on corruption here. All we see are isolated spasms, like the “Michoacanazo,”
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which rather than form part of a systematic
operation nationwide was just a show, in which most of the prosecutions eventually collapsed.

There’s no easy way out for the political and entrepreneurial elite: they would have to fight corruption in their own milieus, to stop the laundering that fuels the murder of ordinary people in this country. They have to put a stop to the capital flows that have ensured decades of good times for Mexico’s biggest tycoons. The politicians have to start by cleaning out their own sewers. No more campaign finance from criminal groups, no more party members collaborating with money launderers.

There is a pact of impunity and corruption which prevents any such measures. It is not out of ignorance, or lack of money, or lack of trained personnel. And in the meantime, as I said, this inexcusable negligence is causing thousands of homicides a month. History will not forgive this.

The disease of Mexican narco-rule (narcotics traffickers, narco-businessmen and narco-politicians) is contagious, and has begun to make Mexico a security problem for the rest of the region.

When Mexican criminal groups like Los Zetas arrive in Guatemala, the first thing they do is buy up the local authorities. That’s nothing new. Criminal groups everywhere do the same. But in this case it’s not just local authorities. Because it’s a politically unstable country, they get as far as Álvaro Colom [president of Guatemala 2008–12], buying up advisers and officials close to him. They even put microphones in the president’s office. This creates still more political instability. Colom has been the target of coup attempts by different political factions in the pay of either the Zetas or the Sinaloa cartel.

In Paraguay, a country with serious problems of governance and terrible poverty, worse than in Mexico, the drug traffickers have already infiltrated Congress and some licit business sectors. They have also been financing attempts to impeach President Fernando Lugo, to put a puppet of their own in his place.
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The saying we quoted in
chapter 3
, “The gringos build you up and the gringos knock you down,” points back to the origin of it all. What
would the architects of the Iran-Contra scheme think now, if they looked at the small-time traffickers of those days, who worked with the CIA, converted into the authentic monsters of today? Those junior partners of Pablo Escobar, who in the 1980s helped him get his drugs into the States, have now become a living nightmare.

The “National Drug Threat Assessment 2010” report gives us the measure of the beast:

Mexican DTOs [drug trafficking organizations] continue to represent the single greatest drug trafficking threat to the United States. Mexican DTOs, already the predominant wholesale suppliers of illicit drugs in the United States, are gaining even greater strength in eastern drug markets where Colombian DTO strength is diminishing.… Mexican DTOs were the only DTOs operating in every region of the country.
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Mexican cartels control the bulk of the sale and distribution of cocaine, heroin, methamphetamine, and marijuana in the United States, ahead of the Colombians and the Chinese and Russian mafias. The US Justice Department observed an exponential growth in these activities:

Mexican DTOs increased their cooperation with US-based street and prison gangs to distribute drugs.… In 2009, midlevel and retail drug distribution in the United States was dominated by more than 900,000 criminally active gang members representing approximately 20,000 street gangs in more than 2,500 cities.
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Quite an army. From this angle, the so-called “war on drug trafficking” launched by Calderón seems purely rhetorical. Although in public the Mexican president maintained that no battle between the government and the drug barons had yet been lost, it is said that in private a troubled Calderón admitted halfway into his presidency that the war was hopeless. He knew it; the rest was political propaganda.

The truth is that not so much as a scratch has been inflicted on the massive business empires of organized crime in Mexico. According
to the “National Drug Threat Assessment 2010,” the increased availability of heroin, methamphetamine, and marijuana in the US is largely the result of “higher production in Mexico.” There are numbers to back up these assertions. Buscaglia says:

One calculation links the Sinaloa Cartel to 3,007 legally constituted companies, inside and outside of Mexico. Obviously these are estimates. It would be up to the prosecutors to investigate and bring charges. But the Mexican authorities have done nothing.

In any advanced, civilized country in the world, when you apprehend a member of a criminal group you would expect her or him to provide evidence that could help identify companies, trust funds, bank accounts. That doesn’t happen here in Mexico. The arrests are a performance put on by the Secretariat of Public Security.… It’s an insult to the Mexican people. They make out that by arresting thousands of people, organized crime will diminish in Mexico. They pretend that by sending in valiant soldiers or marines, the violence will decrease. But it won’t. Sending the troops or the police will only produce results if at the same time you’re dismantling the billion-dollar fortunes of the seven main criminal organizations in Mexico; if the criminals begin to worry that their companies and trust funds are being decommissioned, and that they no longer have the resources to finance more corruption and more violence.

A new and disturbing trend has emerged. According to official figures, since 2004 the market for drug consumption in the United States has stagnated. It hasn’t got smaller, but nor has it grown. Consumption in Mexico, on the other hand, has increased, and this is directly linked to the increase in violence.

According to the drug organizations’ own information, many of Mexico’s street brawls are now down to the strife between gangs of dealers for control of the burgeoning local market. Many such small-time outfits already have the resources to acquire high-powered weapons, and have been able to build effective organizational structures.

The violence of these local territorial disputes escalates when middle-level, “wholesale” drug gangs intervene, trying to force dealers to sell their product rather than their rivals’. While
President Calderón pushed on with his “war,” there was a complete lack of serious social policies to tackle drug use. In the absence of such a strategy, the local market is looking increasingly attractive for the drug traffickers, in contrast with the US market which, although much bigger in terms of population, proportionally tends to decline.

Nevertheless, billions of dollars still flow into Mexico from drug profits in the US. The growth of organized “Mexican mafias” in the United States is a result of the impunity they enjoy on both sides of the border—particularly the Sinaloa cartel. This is why some people, both inside the cartels and in Mexican intelligence, believe that Washington prefers to deal with just one criminal organization. Edgardo Buscaglia puts it like this:

When [North American] agencies talk about concentrating and consolidating the criminal market, it’s that they think it’s always more feasible to control a single, consolidated organization, rather than hundreds of atoms that don’t really hook up, producing a situation of chaos and instability. Nobody in the United States is talking about negotiating. But they do want to impose the rules of the game, and give these criminal groups a way out through amnesties, plea bargaining, or parole, as provided for in Mexican law. Or like what Vladimir Putin did in Russia, imposing tacit rules that criminal groups had to follow, remaining within certain bounds.

However, the big question is whether Mexico’s fragile system of governance and democratic deficit can withstand the consolidation of a single cartel and the “narcocracy” that might go with it. Based on his experience, Buscaglia thinks not:

No, with this weak state the country’s institutions would collapse and give way to a mafiocracy. That’s why the United States is not a failed state, because it sets out to impose the rules of the game. The very expression “impose the rules” implies that the state is not dysfunctional. Right now, Mexico is in no position to impose anything. Various figures on the left and right of the Mexican elite, from the PRD and the PAN, keep talking about negotiating with organized crime, because they want an easy solution. But they don’t realize that the easy solution, the one attempted by [César] Gaviria or [Ernesto] Samper [former presidents of Colombia], will lead to the total collapse of the Mexican state.