The Borderline Spectator

Mexican Cartel 2.0

The cartels' greed and love of violence undercuts even their insatiable desire for profit.

By 11.4.11

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The public and press that take notice of the drug cartels south of the border are under the impression that these organizations, located primarily in north and central Mexico, are powerful but of limited number. Seven to eight named cartels, however, actually become double that number when major operational units are counted from within the organizations. Furthermore, even this structure is in flux as geographical and product lines are contested.

The allegiances of smaller gangs tend to shift as the battling for turf and power alters the criminal terrain. In recent months the working arrangements among various cartels have shifted as federal police and elite military forces combined with the internecine warfare among and within the narcotics enterprises to force the creation of new alliances. The battles among the several interested parties -- such as for control of transit centers like Monterrey -- tend to be influenced by the casualty rate sustained in the increasingly widespread defensive campaigns protecting and expanding area dominance. However, these manifestations have devolved more into simple vicious "gang-banging" than strategically calculated business feuds.

From a tactical standpoint there is also a growing problem of product backlog. In addition to the indigenous drug cultivation and processing, the drugs continue to flow into Mexico from Central America and the northern tier of South America. The use of semi-submersibles both in the Caribbean and Pacific has opened up the possibility of foreign freighters being used as "mother-ships" to act as floating harbors for the relatively short-range semi-subs and their cargoes. The reliance on this form of partial underwater shipment was highlighted just last week when one "semi" was captured by the U.S. Coast Guard in the Caribbean carrying seven tons of cocaine worth about $180 million. A total of 3-4 dozen semi-submersibles have been caught in the Pacific during the last five years.

An increasing problem for the traffickers is that secure storage facilities are becoming overburdened as product flow northward to the United States and Canada is inhibited by border surveillance and the drug organization conflicts. The latter is the key to the Mexican-based narcotics trade. Cartel chiefs getting killed receive considerable publicity upon their deaths or capture, but it is the high casualty rate among the operational lieutenants and their immediate subordinates that creates the most trouble. These losses are utilized by rival groups as leverage in encouraging elements of the opposition to shift sides and rally to the banners of former opponents.

While the ATF was preoccupied with the sources of gun-running in order to be able to target pressure points within the cartels, they might have been more successful if they had pursued the real estate market in California and the Southwestern U.S. Two of the biggest problems in cartel operation have been investing the profits in a secure manner and obtaining safe facilities in which to store drug products and house illegal migrants -- both thought of in the same mercantile sense by the "wholesalers."

A joint SWAT task force with explicit warrants recently "hit" a formerly foreclosed middle-class home in West Phoenix as part of a year-long program conducted against houses in heavily foreclosed districts. Allegedly, these houses have been bought at bargain rates by intermediaries for the cash-rich drug combines. It is impossible to estimate how many of the current flood of foreclosed homes has been purchased through third parties by entrepreneurs with illicit trafficking connections, but local police obviously have been paying attention to this aspect of the real estate market.

In spite of the publicity that continues to be given to violence in Mexico, in resort areas such as Acapulco, modern urban hubs such as Monterrey and simple agricultural regions and towns, the tourist flow into Mexico proceeds only marginally abated. U.S. and Canadian citizens still drive their cars and RV's across the border in search of the usually moderately priced vacations that Mexico affords. In spite of State Department warnings, this phenomenon occurs even as the American Embassy in Mexico City for security reasons no longer allows its officers and their families to travel to the northern states of the country.

The economics of the drug trade changes with any increased effort to inhibit transport of their products. The aggressive effort by DEA and Customs & Border Patrol agents has created a serious increase in "business costs" in the field of narcotics commerce. Some of the difference in cash flow has been made up by extortion rackets, kidnapping for profit, and, of course, human trafficking.

The increase in intra-criminal wars has severely impacted the efficiency of the business already under attack from the Mexican military and law enforcement. While the latter has received justifiable criticism at various times in the past, there is no doubt that recent heroic work of some of their elite units has put the cartel operations under stress.

Meanwhile, American politicians trying to take credit for the elevated pressure on the cartels are having a field day. This is nonsense. Any wounding of the narcotics trade is due to the many years of hard work by operational law enforcement forces in the field.

The truth is that the cartels' greed and love of violence undercuts even their insatiable desire for profit over which they constantly battle. And while the Mexican economy is kept in the black by this murderous battle for criminal commercial supremacy, the North American customers do their best to cook, smoke, snort and inject the products as fast as the supplies can be shipped to them.

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About the Author
George H. Wittman writes a weekly column on international affairs for The American Spectator online. He was the founding chairman of the National Institute for Public Policy.