http://www.stratfor.com/weekly/big_business_organized_crime_mexico
February 13, 2008 | 2044 GMT
Graphic for Terrorism Intelligence Report
By Rodger Baker
Mexican President Felipe Calderon told a U.N. representative in Mexico
City recently that the deployment of the Mexican military in
counternarcotics operations is only a temporary solution, and that he
plans to phase out the military's role in these efforts. In recent
weeks, the military has launched a large-scale security operation in
select cities along the U.S.-Mexico border, disarming local police
forces and conducting sweeps and raids in an effort to strike back at
the increasingly violent Mexican drug cartels.
Calderon's comments address a standing question on both sides of the
border: What is the best way to deal with cartel activity? Germane to
that question is defining just what it is that the security forces are
up against.
The violence taking place in northern Mexico and leaking across the
border into the southern United States is viewed by some as the
result of the actions of narco-terrorists, while others call it an
insurgency. But for the most part, those charged with countering the
problem refer to it as criminality more specifically, as organized
crime. Defining the problem this way shapes the decisions regarding
the tools and policies that are best suited to fighting it.
Behind the Scenes with Fred Burton
Stratfor's counterterrorism expert gives further perspective on
Mexico's drug cartels, their potential evolution and their impact on
U.S. border security in this special two-part podcast, for Stratfor
members only.
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On both sides of the border, the primary forces tasked with dealing
with the drug cartels and the spillover effects are law enforcement
elements. In a law enforcement operation, as opposed to a
counterinsurgency or counterterrorism operation, the ultimate goal is
not only to stop the criminal behavior but also to detain the
criminals and amass sufficient evidence to try them in court. The need
for such evidence is not always as pressing in counterterrorism cases,
in which the intelligence case can be made without having to reach the
stricter threshold prosecution would require. Since taking office,
Calderon has involved the military more than his predecessors in what
traditionally has been the realm of law enforcement. This has had
positive results against drug traffickers, at the expense of
occasional higher tensions between federal and local authorities.
Meanwhile, on the U.S. side of the border, the Bush administration's
war on terrorism appears much more pressing and therefore receives
many more resources than the fight against illegal drug activity and
border violence. This does not mean the United States has not devoted
modern technological resources to battle drug traffickers along the
border. In fact, it has devoted significant intelligence assets to
assist in tracking and cracking down on the drug cartels, from
collecting signals and electronic intelligence to offering training
and assistance to Mexican forces.
In viewing this as mainly a law enforcement issue, rather than a
military one, several additional problems are being encountered on
both sides of the border not the least of which is a significant
lack of coordination. On the Mexican side, local law enforcement often
is infiltrated by the cartels and does not cooperate fully with
essential government agencies a phenomenon not unheard of north of
the border as well. On the U.S. side, the various counties along the
border like to run their own programs, and there are issues of federal
American Indian land and private land to consider as well. A similar
split between federal and local regulations and enforcement occurs on
the Mexico side, where drug laws are all federal, so local officials
can make arrests but must hand over suspects to the federal police.
Further, while there is some level of coordination between the Mexican
and the U.S. sides, frequently there is a lack of communication or
significant miscommunication, such that an operation on one side of
the border is not communicated to the other side.
These problems exist in many places, but they are particularly
sensitive on the U.S.-Mexico border. A miscommunication between the
United States and, say, the Colombian government does not have the
immediate impact as a similar miscommunication along the U.S. border.
Moves are under way to increase the coordination of overall
counterdrug efforts along the border, but the contentious issue of
immigration adds a second layer to the problem. For the United States,
while there apparently are similarities between what is happening in
Mexico and previous counterdrug fights in Colombia or even in
Thailand and Afghanistan the contiguous border consistently adds a
layer of complexity to the problem.
The United States has experience shutting down major drug-trafficking
routes. It significantly disrupted the Caribbean drug routes, using
naval interdiction (though this shifted many of these routes to
Mexico, accelerating the rise of the Mexican cartels). And there is
plenty of global experience sealing borders. The Germans were quite
effective at sealing the border after World War II, as were many of
the Soviet bloc states. The problem, of course, with completely
sealing a border is that it stops trade, something the United States
is not willing to do. Therefore, if the United States cannot
effectively seal the border without risking trade, it instead can
channel the flow of traffic and migration across the border. But even
by channeling the flow, it is extremely difficult to separate the
illegal trade from the legal.
As we have mentioned before, there is a significant economic component
to this trade, both legal and illegal. By some estimates, some $24
billion a year is transferred to Mexico as a result of the drug trade.
This is essentially free money and needs to go somewhere, making it a
substantial portion of the Mexican economy. While the Mexican
government is keen to stop the violence along the border and among the
cartels, in some ways it is less interested in stopping the flow of
money. History has shown that countries with large-scale criminal
enterprises such as the United States in the 1920s and 1930s get
rich, given the tremendous pool of capital available for investment.
This illicit money eventually works it way into the system through
legal channels.
This is a fundamental aspect of the phenomenon we are seeing now. It
is a classic case of organized crime. The Mexican drug cartels are,
for the most part, organized crime groups. What distinguishes Mexican
organized crime groups and others from revolutionaries, terrorists and
hybrid organizations such as the Revolutionary Armed Forces of
Colombia (FARC) is the underlying principle of making money.
In the global system, there is an economy of crime. It currently is
built around drugs, but any item that is illegal in one place and
legal in other and has an artificially inflated price quickly can
become the center of the system. Human trafficking, smuggling and
counterfeiting are cases in point, as was alcohol during prohibition.
Products move from where they are legal (or at least not
well-controlled) to where they are in demand but illegal. The money,
of course, moves in the opposite direction. That money eventually ends
up in the normal banking system. Organized crime wants to make money
and it might want to manipulate the system, but it does not seek to
overthrow the system or transform society. Insurgencies and
revolutions seek to transform.
In the end, organized crime is about making money. Endemic organized
crime leads to corruption and collusion, and in the long term often
burns itself out as the money earned through its activities eventually
moves into the legal economic system. When organized crime groups
become rich enough, they move their money into legitimate businesses
in order to launder it or a least use it, eventually turning it into
established money that has entered the realm of business. This can get
more complicated when organized crime and insurgents/guerrillas
overlap, as is the case with FARC.
The problems we are seeing in Mexico are similar to those we have seen
in past cases, in which criminal elements become factionalized. In
Mexico, these factions are fighting over control of drug routes and
domain. The battles that are taking place are largely the result of
fighting among the organized crime groups, rather than cartels
fighting the Mexican government. In some ways, the Mexican military
and security forces are a third party in this not the focus.
Ultimately, the cartels not the government control the level of
violence and security in the country.
As new groups emerge and evolve, they frequently can be quite violent
and in some sense anarchic. When a new group of drug dealers moves
into a neighborhood, it might be flamboyant and excessively violent.
It is the same on a much larger scale with these organized crime
cartels. However, although cartel infighting is tolerated to some
extent, the government is forced to react when the level of violence
starts to get out of hand. This is what we are seeing in Mexico.
However, given that organized crime tends to become more conservative
as it grows and becomes more established, the situation in Mexico
could be reaching a tipping point. For example, during the summer of
2007, the Gulf and Sinaloa cartels declared a temporary truce as their
rivalry began to impact their business operations. As the competition
among the cartels settles, they could begin to draw back their forces
and deal with those members who are excessively violent or out of
control. This is simply a way of assuring their operations. The
American Mafia followed a similar pattern, evolving into an organism
with strong discipline and control.
There is a question now as to whether the Mexican cartels are
following the American model or imitating the Colombian model, which
is a hybrid of organized crime and an insurgency. In fact, they might
be following both. Mexico, in some sense, is two countries. The North
has a much higher standard of living than the rest of the country,
especially the area south of Mexico City. In the North, we could
ultimately see a move in the direction of the American Mafia, whereas
in the South the home of the domestic guerrilla groups Zapatista
National Liberation Army and Popular Revolutionary Army it could
shift more toward the Colombian model.
While the situation is evolving, the main battle in Mexico continues
to be waged among various cartel factions, rather than among the
cartels and the Mexican government or security forces. The goal of
organized crime, and the goal of many of these cartels, is to get rich
within the system, with minor variations on how that is achieved. A
revolutionary group, on the other hand, wants to overthrow and change
the system. The cartels obviously are working outside the legal
framework, but they are not putting forward an alternative nor do
they seem to want to. Rather, they can achieve their goals simply
through payoffs and other forms of corruption. The most likely outcome
is not a merger between the cartels and the guerrilla groups, or even
a shift in the cartels' priorities to include government overthrow.
However, as the government turns up the pressure, the concern is that
the cartels will adopt insurgent-style tactics.
Organized crime is not street crime; it is systemic geopolitical
crime. It is a significant social force, bringing huge amounts of
capital into a system. This flow of money can reshape the society. But
this criminal supply chain runs parallel to, and in many cases
intersects, the legitimate global supply chain. Whether through
smuggling and money laundering or increased investment capital and
higher consumption rates, the underground and aboveground economies
intersect.
U.S. and Mexican counternarcotics operations have an instant impact on
the supply chain. Such operations shift traffic patterns across the
border, affect the level of stability in the border areas where
there is a significant amount of manufacturing and trade and impact
sensitive social and political issues between the two countries,
particularly immigration. In this light, then, violence is only one
small part of the total impact that cartel activities and government
counternarcotics efforts are having on the border.
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