The Election Year: Results[i]

Michael Lauderdale

October 2012

Three years ago we looked at the spread of violence across Mexico and offered some explanation of its causes as well as speculating on the ways the violence would spill over from Mexico into the United States. It is now accelerating and the U. S. State Department continues to issue travel warnings[1] not just for border towns like Juarez and Nuevo Laredo but in a third or more of Mexico. We examine some of these changes in this critical year, attempt to spot important trends for public safety and revisit our predictions of alternative outcomes for Mexico and the U.S.

 

here are two major electoral events in North America whose outcomes will provide consequential impacts for the rest of the decade. In some ways much of what we discuss here should be seen as a byproduct of efforts among Mexico, the United States and Canada begun in 1990 and now known as the North American Free Trade Agreement, NAFTA. NAFTA was largely inevitable and, at its sum, desirable but like many efforts there are unintended consequences. Look at the map at the end of this piece to illustrate why we are seeing some of the unintended consequences. By December we should have a better fix of what next may come in the United States and in Mexico.

The Countries

There are three major countries in North America: Canada, the United States and Mexico, seven small countries south of Mexico and thirteen sovereign states in the Caribbean. Canada has a population of 34 million grown 6 percent in the last half dozen years with western Canada having the greatest relative increase. Cities like Calgary and Edmonton in western Canada are the most rapidly growing and are driven by energy booms much like those in Texas. Canada has two major political parties, the Conservatives and the Liberals and many minor parties. In 2011 the Conservatives won a majority in the national assembly. Canada has well-developed transportation and communication systems, energy distribution, excellent health and educational systems. It is a prosperous and stable economy.

 

Like Canada the United States with a population of approximately 310 million, has two major parties, the Democrats and the Republicans, but unlike Canada does not have a large number of smaller parties. It has the world’s strongest economy, the most advanced areas of health care and the best higher education system in the world reflecting enviable rates of innovation and creation of new businesses. Neither political party is assured of election this year and economic challenges, the winding down of wars in the Middle East and budgetary troubles seem unsolvable by either party. Yet all of these challenges must be met in some way. Campaigns are underway and it promises to be a rough run to November.

 

Since the last Revolution from 1910 to 1920, Mexico with 115 million people has had only one national political party, the Party of the Institutional Revolution, the PRI. But in 2000 Mexico ushered in a level of party competition and genuine democracy, not seen since the 19^th Century in that country, and that competition ended with the Mexican Presidency going to the National Action Party, the PAN. The predecessor, the PRI was and is a very conservative party that governed through close ties to unions, the wealthy and big businesses. It held all of Mexico in its thrall for 80 years and continued the centuries long dominance of the country by elites from Mexico City.

 

The PAN has its roots in the religiously conservative northern states such as Jalisco and was supported by urban dwellers, small businesses, teachers, homemakers and those that saw the need for a political system characterized in contrast by more of a market of ideas and with alternative centers of power, geographically and socially, to the PRI. Polls indicated early in 2012 that the PRI would return to power and they won the election in July and will assume power in late December. In the last 20 years Mexico has grown to be the third largest and most advanced economy in the Americas, 14^th in the world, exceeded by the United States and Brazil.

 

South of Mexico including through Guatemala and to Panama are 50 million people with the partial exception of areas of Costa Rica that are young, poor and have much lower levels of education, health care, and income. Agricultural work is the primary occupation and the wealthy consumer societies north of them in Mexico, the United States and Canada are distant dreams.

 

The United States’ and Mexico’s national elections go much beyond who will win and will set in motion responses especially to Mexico’s national trauma in efforts toward restoring a tranquil society. The economy and unemployment appear to be the major factors in the American election. But, for Mexico, the consequences may be the viability of the Mexican state, itself.

The Cartel Wars

To a limited degree Vicente Fox elected from the PAN in 2000 and to a greater degree, Felipe Calderon in 2006 reduced state control of many businesses and worked to remove corruption from elections. They began the long hoped for modernization of Mexico, its economy and its institutions. Following the initiatives of GHW Bush and Clinton through NAFTA, both Mexican Presidents saw the opportunity for expanded trade and economic exchange with the United States. Fox and Calderon reached out to George W. Bush to increase collaboration between the countries but Bush rapidly became absorbed in the politics of Washington and, all too soon, the Middle East from the 9/11 attacks.

 

Both Fox and Calderon sought to sweep the cobwebs of decades of cronyism and monopoly of the PRI and made some progress in selling off state-owned enterprises and raising standards of living for the middle class and the poor. But it was Calderon’s efforts to pursue organized crime and reform local, state and federal police that have become the central concerns in his administration.

The Roots of Organized Crime in Mexico

Organized crime and the PRI go back decades and the relationship is arguably most entrenched at local levels. Property crime, extortion, prostitution and drugs have long been part of the mixture. All during Prohibition alcohol could be purchased in border cities like Juarez and Tijuana and were sources for bootleggers as well as Americans that were forbidden alcohol in the United States. During the 1930’s the American military encouraged growing of the opium poppy plant by Chinese immigrants in Sinaloa to have access to morphine for medical needs as conflict with the Japanese curtailed imports from south Asia. After World War II ended, opium growing continued as did a flow of black tar heroin from Sinaloa to the United States.

 

But in the last 20 years large-scale movement of drugs has been the defining feature of organized crime in Mexico. What caused this development was the success of the United States with the interdiction of drugs coming from Columbian fields through the Caribbean and the destruction of much of the base of organized crime that produced cocaine in Columbia, Peru and Venezuela and trafficked it to Miami and other cities on the east coast. With that route closed, land movement through Central America and Mexico began as Mexican cartels replaced Columbian traffickers. In the last decade huge profits from the drug trade to the United States have built organized crime empires in Mexico unlike those ever seen there in past decades. And as long as American demand for drugs continues unabated, profits and power accrue to these Cartels.

 

These drug trafficking organizations conduct a number of activities including controlling routes and police in Central America and then through Mexico to bring drugs into the United States. Access to the United States is most frequent through large cities along the Mexican-American border. The criminal empires referred to as cartels, war among themselves, alternatively in conflict and then cooperation with local gangs and police to control these pathways and territories, the ports of entry into the U.S., called plazas. One plaza long in play is the “no man’s land” that used to run for a mile or so north of Tijuana to the International Port of Entry eighteen miles south of San Diego, California. The Tijuana Cartel controlled the plaza. The Tijuana Cartel and corollaries in Mexican states to the south were originally operated by a visible Miguel Ángel Félix Gallardo, who was active from 1980 to 1989 running most of the cocaine and heroin coming into the western United States.

 

Felix Gallardo was thought to have ordered the abduction of DEA agent Kiki Camareno by corrupt municipal Guadalajara police officers in 1985 where he was tortured and murdered with the body found weeks later in Michoacán. The DEA reaction against the cartel and Felix Gallardo was swift and fierce. Felix Gallardo’s response was to move many of the drug activities back underground, to be run by bosses who were less well-known to Mexican authorities and importantly to the DEA. Félix Gallardo did this by bringing the nation’s top drug narcos to the resort of Acapulco where he designated and assigned the plazas into the United States to separate crime groups. The Tijuana would go to the Arellano Felix brothers. The Ciudad Juárez would go to the Carrillo Fuentes family. Miguel Caro Quintero would run the Sonora corridor. The control of the Matamoros, Tamaulipas corridor-then becoming the Gulf Cartel-would be assigned to Juan García Abrego. Meanwhile, Joaquín Guzmán Loera and Ismael Zambada García would take over Pacific coast operations, becoming the Sinaloa Cartel.

 

The cartels and their territories were long known to the Mexican government but ties with local PRI operatives and the police purchased immunity from arrest. It was also felt in some quarters that immunity and hush money of organized crime ran to the top of the Mexican government and may have dated back to the 1940’s. Perhaps the most notorious example is the involvement of the Mexican President’s brother, Raul Salinas, during Carlos Salinas’ term from 1988 to 94 and the tie with the Gulf Cartel in Tamaulipas, which borders most of south Texas. At any rate Fox in 2000 and more fully Calderon in 2006 brought a new direction from the Mexican Federal government and that was to contest the power of the cartels everywhere but especially on the American border. Those contests to wrest control from the cartels and local law enforcement authorities along with the breaking of the agreements among the cartels on the borders with their respective plazas has ushered in a 6-year period of exceptional violence beginning in border cities like Juarez but now spread throughout Mexico. Since the effort began in 2006 at least 50,000 Mexicans have died, many being among the members of the contesting cartels but thousands of others including Americans as collateral from the violence.

Current Known Cartels

The effort to disrupt the cartels appears to have further weakened the tacit arrangements among the cartels over who controls which territory. It has also seen some cartels disappear and others grow. In 2012 the major cartels are the Gulf that reaches from south of Brownsville, Texas in Matamoros and Reynosa, Tamaulipas down the Gulf Coast through Veracruz; the Zetas, the former enforcement arm of the Gulf, originally American Army-trained Mexican soldiers and now actively contesting the Gulf’s territory with a focus in Nuevo Laredo and into Guadalajara to the west and east in Monterrey and Saltillo opposing the Sinaloa Cartel. The Sinaloa is headed by Joaquin Guzman purportedly next to Carlos Slim, the wealthiest person in Mexico. The Juarez Cartel is headed by Vicente Carrillo Fuentes and in a frantic battle protecting its territory from the Sinaloa Cartel. The Tijuana Cartel is headed by Luis Fernando Sánchez Arellano. The Beltrán Leyva Cartel is headed by Héctor Beltrán Leyva and holding territory in the interior of Mexico and often allied with the Zetas against the Sinaloa Cartel. La Familia de Michoacán is centered in the State of Michoacán. Current leadership in this cartel is unclear and the Mexican government claims the cartel has been exterminated.

 

Michoacán is a very impoverished state and more than a million of its residents are thought to reside in the United States including Austin and San Antonio. In 2006 it followed patterns from Pakistan of beheading enemies and tossed the heads of 5 rivals on a dance floor in a club in Uruapan. Such public brutality has been taken up by other cartels and is another dimension of the cartels’ psychological wars among each other and toward the government. Given the poverty of the area in Michoacán and the natural availability of contacts and cover from immigrants living in the United States, it is unlikely that la Familia is gone. Indeed a large-scale enforcement action against this Cartel including drug busts in several areas of Central Texas including Austin in the summer of 2011.

Loosely structured groups not organized armies

The reality of the cartels is that they are highly fluid organizations that continuously recruit from the millions of unemployed, poorly educated and unskilled youth of Mexico. Half of Mexico’s population is under 26 years of age, 55 million youth and children with many neither in school or employed; so the pool of potential cartel recruits is vast. Drugs are only part of the contraband they move. They also smuggle people, bootleg DVD’s and CD’s, kidnap, extort and deal in a broad variety of stolen items from jewelry to autos. Members come and go with lives often brutal and short. The cartels will commission musical groups, the narcocorridos, to chronicle and romanticize their exploits to intimidate their enemies and support their activities. It promotes a youth culture of potential quick and extravagant wealth, violence and notoriety.

 

The cartels do not operate like American corporations such as McDonalds or Wal-Mart with franchise areas and management development patterns and career ladders. They are loosely coupled organizations quick to seize an opportunity and quick to change. Armies and police forces often assume enemies have similar organization to their own, an army or a police force with a unity of command, specific tasks and clear assignments. We see that assumption of our forces in the Middle East and only as a conventional army is replaced by units like the Special Forces or the Seals does the United States adopt strategy and tactics fitting the land and the enemy. That is a lesson not yet fully learned by those who oppose the cartels.

Cartel Influences in Texas

There are a variety of events that have appeared in Texas that betray the influence and the existence of Mexican cartels in the state. In the last three years arrests and convictions have occurred of persons determined to be members of La Familia, los Zetas and the Gulf Cartels in Austin. The arrests include violent acts, drug trafficking and money laundering through buying, training and selling racehorses. The DEA estimates that somewhere between 20 and 40 billion dollars of illegal drugs are brought annually into the United States and IH 35 is one of, and perhaps the major route, north from Mexico into the United States accounting for a fifth or more of that flow. Highway stops by law enforcement of bulk amounts of marijuana; methamphetamine, heroin and cocaine almost surely have come from Mexico. All of these events are testimony to the spillover of forces convulsing Mexico.

Threats To American Youth From The Cartels

A recurrent fear of families living in northern Mexico and in the Valley is the possibility of their youth being recruited by the cartels to serve as lookouts as well as drug couriers and dealers. There is historical evidence for this in border towns from Brownsville to El Paso. Some years ago an El Paso street gang, the Barrio Aztecas began in that fashion and today are part of the “muscle” for the Juarez Cartel on the streets of Juarez and El Paso as well as being on the list of the 12 most dangerous gangs (Security Threat Groups) in Texas prisons. Another widely reported example is Edgar Valdez Villarreal, who grew up in a prosperous suburb of Laredo, played linebacker for the high school football team and like youth in Laredo and Nuevo Laredo, indeed every border city, 5 years ago and farther back viewed both cities as one. Parties and drinking would begin on the American side and when the bars closed continue through the night in bars and clubs on the Mexican side. Through contacts in nightclubs in the cities, the boy nicknamed “la Barbie” for his Ken/Barbie doll looks, became a small time marijuana dealer and then got to know cartel members in Nuevo Laredo. La Barbie ran afoul of the Zetas and the Gulf Cartel, as he was not paying taxes to them.  He had to flee Nuevo Laredo and went to Monterrey where he was befriended by Arturo Beltran and joined their organization later returning to Nuevo Laredo and fought an unsuccessful war in the mid-2000’s to rid the city of the dominance of the Gulf Cartel and Zetas.  In time he rose through the ranks of cartels in Mexico to a high position in the cartel world near Acapulco and was arrested in 2010 in Acapulco on a variety of charges including drug smuggling and murder.

 

The wars across Mexico and especially the north are so widespread that wealthier Mexicans particularly from Monterrey have fled to Texas to avoid the violence. The violence has negatively affected trade and tourism in Mexico most significantly in northern Mexico. This has increased the flow of refugees from Mexico into Texas even as the traditional source of jobs for these persons in home and commercial construction, ranching, restaurant and hotel work, yard maintenance and field agricultural work has lessened because of the American recession.

 

Mexican Americans and their neighborhoods feel the first and greatest impact of this set of problems coming from Mexico and yet caused by American drug use. Cartel operatives will come to these neighborhoods first as they may be less conspicuous. They pose substantial and long-term challenges in dozens of communities. The first area of impact will be in the public schools where compulsory attendance laws bring the children of Mexico into contact with American children. This is the initial area to watch for gang activity and the footprints of the cartels.

Refugee Flows From Mexico

The flow of persons from Mexico is far more complex today than before the cartel wars began. These are the major components:

 

• Traditional seasonal agricultural workers that follow harvest patterns from Texas to Michigan and Oregon-Washington. These individuals intend to return to rural Mexican areas after the harvest and follow family patterns that go back to the 1920’s.

 

• Persons seeking longer-term employment in traditional areas such as ranching, meat processing plants, restaurants, construction and hotel work. They follow family contacts to Kansas City, St. Louis, Denver, Chicago and Des Moines as well as Portland and Seattle. They will send money back to relatives in Mexico but in time become partially absorbed in American culture and are the many millions that live in the United States but without citizenship yet with weakened ties to Mexico.

 

• Persons with some wealth and/or professional skills moving from Mexico to avoid violence and able to secure longer term visas with legal residence. These persons will locate in closer proximity to Mexico in cities like Houston, San Antonio, El Paso and Austin.

 

• Persons involved in cartel activity either because they must maintain control of the flow of drugs and people, north and the flow of money and guns back into Mexico. They are often higher cartel operatives that prefer the relative safety of the States and the superior access to shopping, schools and medical care that the States offer. They choose cities like Houston, San Antonio, Austin, Dallas, Denver, Los Angeles, and San Diego. The locations are peaceful yet near the supply routes of the drug trade as it moves into and across the United States.

 

• Youth from Mexico City that are in street gangs and find suburbs in Houston, Brownsville, San Antonio, Austin and Dallas attractive targets for property theft. They will move into Mexican American neighborhoods where they are less conspicuous.

 

• Very poor migrating people from Central America particularly El Salvador, Guatemala and Honduras. Knowing little about traveling through Mexico or where to land in the United States they are driven by the economic chaos and overpopulated areas in much of Central America.

Bribery and Extortion

These are familiar and well-practiced skills in much of Mexico and no one is more skilled than cartel operatives. From the “mordida” the driver pays to the traffic cop to avoid a trip to the station house and court all the way up to the thousands of pesos to a politician, it is a way of doing business in Mexico.

 

People from Mexico like anyone from another culture bring these cultural understandings with them. It is part of life in Mexico and has been so for decades. The practices will take the form of hiring off duty police officers in cash to look the other way when a drug load is passing through to heavy contributions to political candidates from school boards to district judges and prosecutors to governors and U. S. Senators and the Presidency. Extortion is achieved by providing gifts and special favors at places like clubs and bars and then using photographs and unguarded comments and statements to secure compliance. It is a way of life in Mexico and we are seeing more examples in Texas from Laredo to Arlington to Washington, D.C.

Solutions for Mexico

The surest protection against bribery and extortion is highly transparent procedures in political contributions and conduct of officials. Transparency, trust and reciprocity embodied in mechanisms like a free press, honest elections, public education, etc. are hallmarks of traditional American life and they are the surest protection and remedy in the United States and in Mexico. Fox and Calderon sought to increase this trust and reciprocity, social capital, in Mexico but powerful forces resist the modernization and move to promote and extend civic order. Cartels, organized crime, exist when money and private arrangements with government, especially the police and military, can be secured. Such corruption is no stranger to any culture from tong societies in China to Tammany Hall in New York City in the late 1800’s and the Chicago Mob of the 1920’s and 30’s in the United States. More police and military including American military presence is not the solution for Mexico. The solution is the same forms of transparency and honesty that secure social capital in other societies.

 

Mexico’s economic future has been built on five pillars. Foremost is oil. Second is income from tourism. Third is export earnings from maquila manufacturing and agricultural exports. Fourth is “loaned workers”. The fifth are profits from the drug trade. The ratio of profits to costs in drugs is remarkable as vast markups occur all along the route from starter chemicals or plants in the field to a street sale. Unlike the first four pillars, little capital investment, formal education or training is required and the path to wealth is quick but with so many competitors the stay at the top is short.

Five alternative scenarios are possible for Mexico.

Mexico is at a crisis point. Events are deteriorating rapidly and no longer not just at the border. At this point the first two scenarios now have equal probabilities. The third is the hoped for path of the old PRI. The later two come into play only if events elsewhere in the world come crashing down. The clearest key as to which of the following scenarios will come is how the Mexican election for President is resolved and the subsequent actions of the incumbent and those of the United States.

 

Collapse in progress

Oil reserves play out in Mexico’s top producing fields, Mexico cedes control over the south and north of the country and 20 million refugees head to the northern cities of Mexico and then into the United States. Millions will come to Texas alone. The PRI is returned to power but makes little progress trying to return to the old methods. Mexico is a failed state with guerilla bands controlling much of the countryside and several of the larger low-income neighborhoods in Mexico City as well as other cities such as Veracruz, Matamoros, Monterrey, Acapulco, Torreon, Guadalajara, etc. Staged attacks on American border cities occur with regular frequency and local police are overwhelmed facing cartels that are better organized, funded and equipped. American border cities are filled with refugees and violent gangs. Mexico as Texas’ largest customer of our exports from agriculture to oil exploration and refining expertise, contracts and so does the Texas economy.

American Protectorate

Cartels use hit squads to attack American law enforcement in border cities on both sides. The United States intervenes with military forces as it has done in Haiti, Cuba, and Panama in years past and creates a protectorate for the Mexican Federal government south to Monterrey, Saltillo and Torreon. The traditional northern antipathy of Mexicans toward the “chilangos” of Mexico City intensifies and a process of tying the northern Mexican states closely to the American Southwest accelerates. Border law enforcement and the Texas Department of Public Safety gird for conflict and deploy heavier weaponry including armed defensive craft on the Rio Grande and in the air. Leftist and nationalistic mobs burn and sack the American Embassy in Mexico City. Mexican expatriates in Texas call for American military intervention in the north to permit them to re-establish homes and businesses in cities like Veracruz, Matamoros, Monterrey, San Miguel Allende, etc. It is reminiscent of Cuban exiles in south Florida in the 1960’s but many times the size and consequence.

Return To The Past

The early strength of the PRI suggests that Mexico may attempt to turn the clock back. The PRI regain control, and through the bribery of Chapo Guzman, the Zetas are eliminated.  Mexican cartels go back to an existence of one powerful cartel who controls the plazas much like the Guadalajara cartel did in the 1970’s.  The violent killings are greatly reduced and order among cartels is instituted. America’s unsatiated drug habits are the source of the greatest wealth in Mexico and a return to institutionalized corruption in many parts of Mexico’s government is restored.

Reprieve

World economy rebounds. Oil prices rise to $200 a barrel, Mexico permits foreign investments and spins off PEMEX, which modernizes engineering, refining and exploration. Corruption is curtailed and profits soar. Situation stabilizes to a significant degree as other sources of wealth particularly oil supplants the power of drug money.

Revival of Pax Americana

American economy revives and joint American and Mexican efforts suppress cartel activity with attendant boosts in tourism, maquilas and domestic growth. Mexico tackles its endemic problems of corruption in police, military, elections and the courts and transforms them to honest, open forums for justice. America sharply reduces illegal drug consumption. Mexico deepens its historical ties with Central America and opens the region to the south to economic growth and channels American technological knowhow through all of Latin America.