Authors: Ioan Grillo
At least in the case of piracy, money moves around the economy rather than leaving it. But cartel involvement is really just to tax a black-market industry that is already there. Mexico has tolerated a colossal informal economy for years. In 2010, the Mexican government estimated close to 30 percent of the workforce was outside of formal employment, neither paying taxes nor receiving benefits.
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Millions work as street vendors flogging products from stalls by bus stations or on sidewalks. Known as
ambulantes
, the vendors sell many consumer goods brought from the United States without paying tariffs. They also sell millions of pirate CDs, DVDs, and computer games. Whereas an original movie will cost about $20 in Mexico, a pirate copy will cost an average of just $2. One can find anything from the latest episodes of HBO’s
The Wire
to films not yet in the theaters. For every ten movies sold in Mexico, the studios estimate, nine are pirate copies. There is a huge market for cartels to tap.
The sex industry has also thrived in Mexico for centuries. Street prostitutes, table-dance clubs, old-style cantina escorts, brothels, and massage parlors are tolerated the length and breadth of the country. There isn’t much cartels can add to the industry, except to make owners pay them a quota. It is hard for these owners to say no. One night in Ciudad Juárez, I followed journalists to a bordello whose owner had apparently failed to cough up. Gangsters had firebombed the brothel while it was in full service; a sex worker and the john she was with were carted to a hospital with severe burns.
The rise of cartel extortion in Ciudad Juárez was fast and furious. I drove round the city with José Reyes Ferriz, who was mayor of Juárez from 2007 to 2010, when the rackets came in. Speaking perfect English, the American-educated official described how the extortion mushroomed during a few months in 2008, right as the drug war exploded.
“The criminals first started charging protection at used-car lots, which have always had a certain link to organized crime. Then it started growing to affect bars, pharmacies, and funeral parlors. Then they got money from schools and doctors. Then they just went for everything in sight.”
Businesses are often charged relatively small amounts—$400 a month for a bar; $500 for a busy grocery store. We passed several burned-out and boarded-up buildings—places that had failed to pay the quota. Mayor Ferriz sighs.
“It has been terrible for business. But we are overwhelmed at a city level. I had no power to take on the mafia. That is why I invited the army in and gave them power of security in the streets. But they are fighting a tough battle too.”
I asked him who is behind the extortion. He gives me a telling answer. The extortion shot up right after he “purified” the police force, firing six hundred corrupt officers, he said. The fired policemen were long suspected of working with the Juárez Cartel and other crimes. Some were later arrested for involvement in extortion rackets. It was a bit like the botched de-Baathification of Iraq. When the American-backed authority fired officials of Saddam Hussein’s government, the ex-Baathists joined the insurgency. When Ferriz fired mobbed-up officers in Juárez, the bad cops shook down anything that moved.
Some of those demanding cash in Juarez appear to be opportunistic freelancers. Other times, it appears to be criminals with connections to the cartels, including gangbangers from the Barrio Azteca. For terrified business owners, it is hard to know who the person demanding money is. But with so many murders, it is always safer to pay—or like many in the Juarez middle class, pack up and move to the United States.
In other parts of Mexico, cartels such as the Zetas and La Familia hold a monopoly in their extortion. If any small-time crooks try to step in, the mobs leave their corpses on public display.
While protection rackets terrorize, they can also paradoxically entrench cartels deeper into the community. Diego Gambetta, a leading organized-crime expert at Oxford University, has done extensive research on protection rackets that has produced new thinking about them. His ideas are in his landmark book,
The Sicilian Mafia: The Business of Private Protection.
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He explains that the mafia is not just an industry of violence that intimidates. Businesses also willingly pay for protection and the services of muscle to achieve things the state can’t. This co-option is one of the reasons that the Sicilian mafia has survived a century of government assaults; a section of the community is in bed with it.
Such a scenario is already playing out in Mexico. Zetas have taxed bars and discos across the Monterrey area. But in the rich Monterrey municipality of San Pedro Garza, disco owners chipped into pay gunmen from the Beltrán Leyva organization to keep the Zetas out. In many ways, the owners fell for a trap—they paid protection to one group to avoid paying protection to another. But they felt the Beltrán Leyva gunmen were the lesser of two evils and became complicit in their crime network. The state can’t look after them, the owners said, so they turned to Gambetta’s “business of private protection.” This business will likely be a big part of El Narco’s future.
Shakedowns have plagued societies for centuries. Street gangs in New York’s Five Points used to do them; Al Capone infamously extorted half of Chicago; gangbangers in Central America do them. It doesn’t take a paramilitary cartel to rattle someone into paying up. Often one psychotic thug with a tattoo on his face will do the trick. Perhaps a few shakedowns in Mexico are not the end of civilization.
However, two factors show cartel extortion in Mexico could be a more serious development. First, the cartels take over shakedowns that Mexico’s government itself used to do. Government officials are notorious for rattling bribes out of businesses across the country. If owners don’t pay up, bureaucrats can always find a way to shut them down. “Oh, there is no knob on the toilet door, you will have to close temporarily; oh, there is no restaurant menu in braille for blind customers—shut down; oh, the front door is not wide enough—
clausurado!
” The powers of government give officials an excuse to line their pockets regularly—especially at Christmastime.
But as cartels now extort businesses, owners complain they can’t pay twice. So cartels make sure they get paid and tell government officials to back off. In most cases, the gangsters are kicking back to these officials. The frightening implication is that as El Narco takes over the government’s role as extortionist, it becomes even more of a shadow state, the real muscle and power behind the facade of elected officials.
The second worrying factor about cartel extortion is that criminals are ambitious enough to go after heavy industry. In Michoacán, a mine owner I interviewed said that he has to pay off the cartel. In return for his payments, the gangsters offered to go after any extortionists on building sites he owned over in Mexico City. Gangsters also tax the Michoacán timber industry and help loggers ignore restrictions on deforesting.
Over in the east, the Zetas tax Mexico’s most vital natural resource: oil. Mexico’s black gold is owned by the government monopoly Petróleos Mexicanos or Pemex. But police investigations found the Zetas used high-tech drills and rubber hoses to siphon oil out of pipelines and put it on stolen tanker trucks. In some cases, stolen oil has been taken into the United States and sold at cut-rate prices to Texans. In 2009, a former president of a Houston oil company pleaded guilty to buying stolen Mexican petroleum. Stealing oil can be highly dangerous. In December 2010, oil thieves are alleged to have puntured a pipeline in Puebla state, sparking an explosion that sent fireballs down the streets of a local town, incinerating houses and killing thirty people.
Zetas have also been accused of various kidnappings and murders of Pemex union reps. One Pemex worker at the central offices says the violence is part of the cartel muscling in on the union’s ill-gotten gains, such as taking bribes for getting people well-paid oil jobs.
This oil money is no small change. In 2009 to 2010, the pipeline hijacking was said to cost Pemex $1 billion.
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That is only the tip of the iceberg. Pemex is one of the world’s biggest oil companies, with total sales worth $104 billion in 2010.
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Black gold is even bigger than drugs.
All this has deadly implications. When crime groups fight over the spoils of heavy industry and government skim, the stakes for Mexico go up. The Mexican Drug War could escalate to a broader civil war over the country’s natural and financial resources. Imagine a scenario in which paramilitary squads are securing oil installations and mines and fighting off enemies trying to seize them. Such a conflict could draw in hundreds of thousands of people and have a devastating human cost.
Prophecies of civil war may sound alarmist. But few predicted thirty-five thousand dead in a drug war. When warlords are unleashing private armies throughout the countryside, the possibility of a wider war has to be taken seriously. The criminal insurgency might dig Mexico into an even bigger hole. We worry about fifteen thousand killings in a year, but imagine the implications if there were fifty thousand. Policy makers and citizens should not allow the drug-war fire to keep getting bigger and more ferocious—we have to find ways to put out the flames.
CHAPTER
16
I heard almost exactly the same phrase twice: once in Culiacán, Sinaloa; once in Ciudad Juárez. The first time it came from Alma Herrera, the elegant fifty-year-old mother whose innocent son had been shot dead when he went to fix the brakes of the family car. We were talking about all the murder and injustice in Culiacán, how normal citizens feel helpless against the power of these mafias and corrupt police, soldiers, and politicians. How they feel so useless when their children are held by kidnappers or filled with bullets before they have celebrated their eighteenth birthday. How they feel impotent in the face of gunmen taking the lives of whomever they want, whenever they want. Then she said the phrase that stuck in my mind:
“We need a Superman to come here and save us, to clean up this city, to take out the bad guys.”
It may sound ridiculous. It is something out of simplistic D.C. comics and Hollywood films, the idea of a caped crusader flying through the sky, deflecting bullets and grabbing villains by the scruff of their neck. But amid such frustration and desperation, her hope is completely understandable, if unrealistic. Culiacán is grimmer than Gotham City in its worst depictions. They don’t stick heads on sticks in Gotham City.
Up in Ciudad Juárez, I heard the notion again in a song—or rather a rap. The rapper goes by the name Gabo and is part of a new school of Mexican-border hip-hop that criticizes rather than celebrates gang life and violence. Gabo was letting loose with his lyrics on a sidewalk outside a nightclub while I filmed with a TV crew. His verse was also about the frustration one feels living in neighborhoods plagued by cartel assassins and corrupt cops. Then he dropped a stanza that struck another chord in my mind.
Peace
will be the last word we hear,
Where is Superman or Jesus Christ?
Come out of the sky and fight this,
Sorry, God, I am no atheist,
I am just tired of what I live, feel, and see.
Again, feeling utterly impotent, one turns to a greater power. Where is the man in a tight, blue-and-red suit or a crown of thorns to emerge from the clouds? It is a comprehendible wish.
Unfortunately, no supermen or messiahs are going to zap away the Mexican Drug War. No magic wands will make it all better. The solution is in flawed, greedy, evasive, confused, deceitful human beings. It is in the same humans who have created the problem in the first place, made El Narco grow slowly but surely by buying its drugs, selling it guns, laundering its money, taking its bribes, paying its ransoms. And it is in the same flawed politicians from Washington to Mexico City who have pushed policies that don’t work, left kids stuck in a corner with no hope, and let killers get away with murder.
The way out doesn’t involve one improved policy in one country, but a group of improved policies in Mexico, the United States, and beyond. Even though El Narco is a criminal insurgency, soldiers are only a small part of this solution. America and Europe have to wake up and confront the drug money and guns we spew out. The debate cannot conveniently be tucked away any longer. Estimated Mexican drug profits over the last decade total more than quarter of a trillion dollars. Giving psychopathic cartels another quarter of a trillion dollars in the next decade should not be acceptable. Would we accept foreigners throwing such money at insurgent militias in our countries?
But even if the demons of the drug trade are magically vanquished, Mexico has to confront its own deep problems. The country is struggling with a historical transition: the old world of the PRI has died; the new democracy hasn’t yet been built. The nation has to find the architects to construct it. It has to make a real police force that will not tolerate an innocent child’s being kidnapped and having his life destroyed; and it has to offer more hope to teenagers than grabbing Kalashnikovs, making fast dollars, and dying before they reach manhood.
Peace has to come one day, but a lot more corpses will come first. And these bodies will not all be safely south of the Rio Grande.
North of the border in California, some say they have a solution to the violent drug trade in light green plants reared with electric lights and sold in cookie jars. Walking around a square mile in Los Angeles, you can pass twenty medical-marijuana stores with names including Little Ethiopia, Herbal Healing Center, Green Cross, Smokers, Happy Medical Centers, La Kush Hemporium, and the Natural Way. Stepping through the door of one, you pass a receptionist asking for your doctor’s prescription to smoke bud—a script that can be for illnesses from cancer, paralysis, and Alzheimer’s to feeling stressed (who isn’t?). You then pass to a room packed with jars of goodies with such names as Purple Kush, Super Silvers, God’s Gift, Strawberry Cough, Granddaddy, and Trainwreck. The California indoor plants are usually purer and lighter colored than Mexican weed, showing a yellow-green tinge. Patients can take their medicine to the comfort of their own home and smoke their sorrows away in stinky clouds. And nobody gets gunned down by ski-masked hoods with AKs.