Since the 1980s Mexico's criminal organizations have become increasingly globalized and sophisticated, but almost a century ago they were largely family organizations shipping bootleg liquor to the US.
? InSight Crime researches, analyzes, and investigates organized crime in the Americas. Find all of Patrick Corcoran's research here.
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[This article is adapted from a longer research paper appearing in a recent edition of the journal?Trends in Organized Crime.]
Mexico?s battles with drug trafficking have been a constant in the country?s modern history, but the activities and organization of the criminal groups operating in the clandestine industry have been in a state of constant flux. That flux, which continues today, lies at the heart of Mexico's violence.
During the 20th century and into the 21st, Mexico?s criminal organizations have grown increasingly sophisticated, globalized, and diversified. Whereas 90 years ago they were largely family organizations shipping marijuana and bootleg liquor to the US, today they traffic any number of products to and from nations in all four corners of the globe.
Over the course of the same period, Mexico?s criminal gangs also underwent a related process of consolidation and growth that peaked in the 1980s. The family operations gave way to steadily larger, wealthier criminal organizations, culminating in the Guadalajara Cartel, run by Miguel Angel Felix Gallardo, that controlled drug trafficking in most of Mexico during the presidency of Miguel de la Madrid. Since then, the trend has been the opposite: a breakup of the larger organizations, and the rise of regional local challengers to their supremacy. The chaos that followed has engulfed a nation.
Premodern groups
Mexico?s smuggling networks have emerged as an unfortunate emblem of the nation only relatively recently, but they have existed for more than a century. Initially, they were not dedicated to methamphetamine and cocaine, two of the drugs that currently offer the highest profit margins, but rather opium, and later marijuana. These groups, which first began to emerge toward the end of the 19th century, were initially not seen as a major public security threat. Indeed, newspaper reports at the time detail the concern for opium users, not bloodshed attached to feeding the market.
These groups were largely family-based. In the case of the opium traffickers, these groups were originally concentrated among the Chinese immigrants populated across Mexico?s northern region, especially northwestern states like Sinaloa. Reports from the era indicate that the marijuana production, on the other hand, was not especially associated with Chinese immigrants, and marijuana traffickers remained largely small-time operations that continued to be built around local family ties. One example of such an organization was that of Maria Dolores Estevez, or Lola la Chata, as she was more commonly known. Lola and her clan trafficked in vice (especially marijuana) in Juarez for some 30 years in the middle of the 20th century, though without ever achieving the wealth or international notoriety of today?s groups.
But if the early groups had a lesser impact on the state of the nation than today?s do, they were still instrumental in setting the stage for the future development of Mexico?s trafficking organizations. The groups that emerged in that period, while far different from their future iteration, spawned certain characteristics that would be vital to their coming growth.
First, they created smuggling networks in and out of the remote Sierra Madre Occidental, which lies along the convergence of drug-producing states Chihuahua, Durango, and Sinaloa. These states have remained home to the most powerful organizations ever since, and have birthed the nation?s most notorious traffickers. The tendency toward familial link in drug trafficking also remains very common today -- see, for instance, the Beltran Leyva Organization -- although the complexity of trafficking today requires any criminal group to branch out beyond blood ties.
The early groups also developed a capacity to slip past the US border, feeding the market for bootleg alcohol (during prohibition), marijuana, and opium. Since the US market for illegal drugs was later to become the most lucrative in the world, this gave Mexican traffickers the most sought-after job skills in the industry.
Furthermore, these early 20th century groups began to develop links to the political system, especially under the Institutional Revolutionary Party (PRI), which emerged from the embers of the Mexican Revolution and dominated the nation?s governance until 2000. For instance, a major Chinese-Mexican trafficker in the 1930s was Antonio Wong Yin, a close friend of the mayor of Torreon (where he was based), the governor of Coahuila (which houses Torreon), and the army general charged with controlling the region. Such political support for traffickers, which are eerily similar to the stories of corruption that periodically emerge in the Mexican media today, was not uncommon.
Because Mexican groups thrive in large part with the support or tolerance of government agents, these early inroads from the forerunners of the political system were priceless, both at the time and as the industry grew.
The internationalization of Mexican crime
The introduction of cocaine to the US drug market in the 1970s and 1980s changed the circumstances dramatically for Mexico?s drug traffickers. Most important, the profit margins exploded; a recent report from the International Crisis Group referred to a 50-fold price discrepancy for a kilo of cocaine in Colombia compared with the same kilo in the US, from $2,400 to $120,000. Today?s substantial divergences were presumably even more yawning four decades ago, as US prices for cocaine have spent most of the meantime in decline.
Nothing like those profits was available from marijuana trafficking. As a consequence, successful Mexican cocaine smugglers were able to accumulate far more wealth than their criminal ancestors. The tendency was furthered as Mexican gangs, in the late 1980s and early 1990s, began to insist on payment not in cash but in product from their South American partners; at that point they were no longer subcontractors but rather wholesalers, with exploding revenues to match. This shift upended the power equilibrium between the traffickers and their government sponsors; the political system had an increasingly difficult time administering unruly gangsters.
The government, however, remained intimately involved, even as it lost some degree of control. Traffickers had deep relations with the political and security apparatus in Mexico; many of the most notorious capos, such as Miguel Angel Felix Gallardo, and Juan Jose Esparragoza, alias "El Azul," were former police officers. A parade of high-ranking government officials, from former Federal Police Commander Guillermo Gonzalez Calderoni, who was reportedly a favorite of President Carlos Salinas in the 1980s and 1990s, to General Jesus Gutierrez Rebollo, the new drug czar who was found to be on the Juarez Cartel payroll in 1997 (and made famous in the movie "Traffic"), have been discovered working for the groups that they are meant to attack. Such arrests, to say nothing of the rumors surrounding officials who are never formally accused, continue to the present day.
Another important shift was toward a more international system. With cocaine the most important substance in the industry, the Mexicans could no longer rely only on their connections within their country and at the border to do business. Ties to cocaine producers in South American nations like Peru, Bolivia, and especially Colombia became essential. This added another several steps to the supply chain, and made feeding the US market a more complex endeavor. A globalized approach became a necessity.
Largely in response to this new environment, Mexican groups themselves grew more sophisticated and more complex, pioneering new methods of airborne and maritime smuggling. They also shifted toward a more hegemonic operational model; the model of a small family firm directing their operation from a marginal Mexico City suburb or barrio in Juarez was no longer viable. Such smaller groups were absorbed or pushed out by new hegemons, which controlled entire regions and coopted public officials on a growing scale. Thus, control of the proverbial "plaza," or trafficking corridor, became a requisite.?
The best example of the new hegemonic model was the Guadalajara Cartel of the aforementioned Felix Gallardo. Originally a police officer and governor?s bodyguard from Sinaloa, Felix Gallardo and his crew moved south to Guadalajara in the 1970s in response to Operation Condor, in which the Mexican army launched a ferocious eradication campaign in the Sierra Madre mountain range. From Guadalajara, he was partnered with Colombian traffickers like Pablo Escobar, and became Escobar's most important Mexico associate. He also came to dominate the underworld in much of his country; Felix Gallardo and his subordinates controlled contraband within most of Mexico?s Pacific Coast and its US border.
The groups of today
The Mexican criminal organizations of today differ from those of Felix Gallardo?s era, and even more so from their predecessors a century ago. The most important factor is that the trend toward consolidation ended with Felix Gallardo. Following his arrest in 1989, the boss reportedly divided up most of Mexico and handed out parcels to his underlings, so as to prevent a breakup of the organization he had built. However, the gambit ? which may be apocryphal; Felix Gallardo has told reporters that he had nothing to do with it ? essentially failed. What had been the Guadalajara Cartel devolved, broadly speaking, into the Tijuana and Juarez Cartels, which were mortal enemies through the 1990s, despite their shared roots. These groups in turn, spawned a handful of further competing organizations, such as the Sinaloa Cartel, the Beltran Leyva Organization, and, in recent years, the Jalisco Cartel - New Generation.
That is, the splinter groups have given birth to splinter groups. The weakness of the remaining groups have encouraged other upstarts to rise up and challenge the existing bosses, turning the process of atomization, as it is often called, into a vicious cycle. Consequently, no recent group has ever matched Felix Gallardo?s territorial control, nor does it appear likely that any one ever will.
This cycle has been a significant driver of violence. The rivalries between the new gangs are in and of themselves violent contests. Tens of thousands have died thanks to disputes between the Gulf Cartel and the Zetas, for example, and between the Juarez Cartel and the Sinaloa Cartel. The problem is worsened because the fallen capos are often replaced not by businessmen but rather hit men, whose natural inclination is toward violence. Today?s groups also suffer from a greater degree of internal instability; as InSight Crime has reported about the Zetas in recent years, amid a context of constant criminal warfare and uneven cash flows, violent subordinates are often tempted to ignore or challenge their bosses.
Today?s gangs are far more reliant on alternative sources of income, beyond drug trafficking. These include oil theft, extortion, kidnapping, human smuggling, robbery, and pirate merchandising. In all likelihood, the revenues of these crimes collectively amount to no more than a few billion dollars a year, but they impose a greater cost on the society as a whole. A successful international drug deal imposes no direct cost on the community at large, but a kidnapper nearly always targets the most vulnerable. This is also true for extortion, which, if common enough, amounts to a disincentive against success for entrepreneurs.
Finally, the groups today no longer unquestionably subordinate the state. For all his power, Felix Gallardo ultimately answered to the political system. When the federal government decided to bring him down, it had no problem in finding him and incarcerating him for life. (According to accounts of his arrest, when he saw the Police Commander Gonzalez Calderoni just before his arrest, Felix Gallardo greeted him as a friend coming to visit.)
Today, this is no longer the case. The increased revenues from cocaine trafficking, discussed above, has contributed to this, and is an important part of the story, but developments within Mexico?s political system are just as important. Mexico?s criminal organizations are weaker in certain respects, but so is the state. The PRI, the political party that dominated from the 1930s onward, lost power for the first time in 2000, and the federal government has never recovered the near-omnipotence it once enjoyed.
As a consequence, the traffickers no longer exist within a system administered by the federal government. Rather, both the state and organized crime are in a constant power struggle. Given that the PRI was an authoritarian entity, this loss of power is, on balance, a good thing, but one of the unfortunate side effects was the state?s growing incapacity to impose itself on organized crime.
? Insight Crime?researches, analyzes, and investigates organized crime in the Americas. Find all of Patrick Corcoran's research?here.
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