MEXICAN DRUG CARTELS: An Update

May 17, 2010

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Mexican Drug Cartels: An Update

Since STRATFORs December 2009 cartel report, the cartel landscape and operating environment in Mexico have seen significant shifts. These have included rifts within the Beltran Leyva Organization, a new tripartite alliance of drug gangs known as the New Federation facing off against Los Zetas and a further decline in the Juarez cartel. They also have included the increased targeting of U.S. interests in Mexico. Perhaps most notably, however, are Mexican federal legislative reforms limiting the use of the Mexican military in the fight against drug trafficking. Taken together, the changes mean more violence probably lies ahead. The security landscape in Mexico remains remarkably fluid nearly three and a half years after President Felipe Calderon launched an offensive against the countrys major drug-trafficking organizations (DTOs) in December 2006. Since the December 2009 STRATFOR cartel update, numerous important developments have occurred. Not everything has changed, however: The two main struggles in Mexico are still among the cartels themselves for lucrative turf and between the cartels and the Mexican government. Government offensives have continued to weaken and fragment several of Mexicos largest DTOs and their splinter groups, continuing to thoroughly disrupt the power balance throughout Mexico as DTOs attempt to take over their rivals key locations.

A Rift in the BLO

Perhaps the most notable development in the drug-trafficking landscape has been the Mexican marine operation that resulted in the Dec. 16, 2009 death of BLO leader Arturo El Jefe de Jefes Beltran Leyva, at a luxury high-rise condo in Cuernavaca, Morelos state. Beltran Leyva had split from the Sinaloa Federation after a falling-out with Sinaloa leader Joaquin El Chapo Guzman Loera near the end of 2007. The BLO quickly rose to the top tier of the Mexican drug trafficking realm, establishing its own cocaine connections to Colombia, a highly professional intelligence apparatus and a brutal enforcement wing led by Edgar La Barbie Valdez Villareal. The BLO obtained help from Los Zetas in the spring of 2008 to augment their resources and trafficking capabilities. After the death of Arturo Beltran Leyva, however, things quickly began to unravel for the organization, making it apparent that Arturo was the glue that held the BLO together. Shortly after his death, Arturos brother Carlos who many had suspected would take control of the BLO was arrested in a traffic stop in Culiacan, Sinaloa state, after he provided a false drivers license. Weapons and cocaine were found in his vehicle. Carlos Beltran Leyvas arrest meant that only one Beltran Leyva remained on the loose, Hector, aka El H. Hectors role in the BLO was minimal compared to the other brothers, and many suspected that the reins of the organization would be handed over to the top BLO enforcer and reported close confidant of Arturo, Edgar La Barbie Valdez Villarreal. Even so, a federal police intelligence report identified Hector as the new BLO kingpin in January. The decision apparently angered Valdez Villarreal, and because a sizable portion of the BLO was loyal to Valdez Villarreal, a noticeable split in the BLO developed by mid-March. This split has resulted in a dramatic increase in violence between the two factions. Around this same time Hector Beltran Leyva and his close associate Sergio El Grande Villarreal Barragan renamed their faction the Cartel Pacifico Sur, Spanish for South Pacific Cartel.

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The two former partners fight for control of territory once united under Arturo Beltran Leyva has spread from the former BLO headquarters in Morelos state to neighboring regions of Guerrero, Mexico, Puebla and Hidalgo states.

The New Federation and Los Zetas

Tensions between the Gulf cartel and their former partners Los Zetas finally escalated into open warfare in early February. Reports indicate that the rift between the Gulf cartel and Los Zetas started over the Jan. 18 murder of Los Zetas No. 2 Miguel Z 40 Trevino Morales right-hand man and fellow Zeta leader, Sergio El Concord 3 Mendoza Pena. Allegedly, an altercation between Mendoza and Gulf cartel No. 2 Eduardo El Coss Costilla Sanchezs men resulted in Mendozas murder. After learning of Mendozas death, Trevino gave Costilla an ultimatum to hand over those responsible for Mendozas death by Jan. 25. The deadline came and went, and Trevino ordered the kidnapping of 16 known Gulf cartel members in the Ciudad Miguel Aleman area as retaliation. From that point, tit-for-tat actions have seen the Gulf-Zeta conflict expand throughout the Tamaulipas border region, as well as the formation of a new alliance known as the New Federation. The New Federation consists of the Gulf cartel and the Zetas two main enemies, La Familia Michoacana (LFM) and the Sinaloa Federation. This alliance proved beneficial to all three organizations. The Gulf cartel thus was able to survive, augment its resources and even gain the upper hand against Los Zetas. Both the Sinaloa Federation and LFM have a deep hatred for Los Zetas, as well as a strategic interest in

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gaining leverage over drug trafficking along the South Texas-Mexico border, turf which Sinaloa had for many years viciously fought over with the Gulf Cartel and their former enforcement arm, Los Zetas. According to local and regional press accounts, the New Federation has wrested the strategic area of Reynosa, Tamaulipas, from the Zetas. STRATFOR sources and some open sources also report that the New Federation tended to be on the winning side in most battles along the South Texas-Mexico border. The Zetas reportedly have had to retreat to Nuevo Laredo and then westward toward Nuevo Leon state capital Monterrey, Mexicos third-largest city. Monterrey has since experienced a noticeable uptick in violence and cartel activity, including everything from kidnappings to targeted executions. In one instance, between 30 and 50 armed men traveling in up to 10 vehicles kidnapped a total of six people early April 21 from the Holiday Inn at the corner of Padre Mier and Garibaldi streets. The previous day, the body of transit police officer Gustavo Escamilla Gonzalez, who had gone missing April 15, was thrown from a moving vehicle into Lazaro Cardenas Avenue in the Monterrey suburb of San Pedro Garza Garcia. Four flowers and a banner signed by the New Federation reading This is what happens to those that support the [expletive] Los Zetas were attached to his corpse, along with a list of 20 other names of law enforcement officials who allegedly support the Zetas. The Monterrey area has long been a Zeta stronghold, meaning the New Federation can be expected to continue to direct its efforts against the Zeta support structure in the Monterrey region as it continues its offensive. Whether the New Federation can destroy Los Zetas completely remains to be seen. Los Zetas are ruthless, formidable opponents who very much remain a force to be reckoned with. STRATFOR sources report that Los Zetas could be preparing to launch a large-scale counterassault in the Tamaulipas border region in the near future, which naturally would amplify the violence. Should the New Federation eliminate Los Zetas from the drug-trafficking scene, it is unclear whether the alliance would stay intact, especially given the past animosity between the Sinaloa Federation and the Gulf Cartel. Rival organized crime groups throughout the world frequently form alliances based on newly shared interests, but once their respective goals have been attained, these alliances typically fall by the wayside, leaving each organized crime group free to pursue its own selfish interests. Should the New Federation survive the destruction of Los Zetas, it could become the dominant criminal entity in the region, something that would restore balance and stability to Mexicos security environment.

Juarez
Juarez, Chihuahua state, remains the most violent city in Mexico. The conflict between the Juarez cartel and the Sinaloa Federation has raged for nearly two and a half years. The struggle has taken many forms, from cartel-backed street gangs battling each other block by block, to the military and federal police battling for control of the city from the cartels. Dramatic changes in the operating environment in Juarez have emerged thus far in 2010. In one important change that has greatly affected Juarez, security responsibility nationwide has been transferred from the Mexican military to the federal police. Mexican President Felipe Calderon sees the cartel wars as falling within the jurisdiction of law enforcement, but the extent of the corruption in the countrys federal police upon his 2006 arrival in office forced him to rely on the military for the brunt of security operations against the cartels until January. After extensive reforms in the federal police, newly trained and vetted federal police agents took over all aspects of security operations within Juarez city limits, including the citys emergency call center (similar to the 911 centers in the United States). The military now operates in rural, open areas outside the city, where their training and equipment is better suited. The effectiveness of this new strategy remains to be seen. The Mexican government will re-evaluate aspects of the federal police strategy in December. As it stands right now, no significant arrests have been made and the violence in the greater Juarez area is on pace with the levels seen in 2009.

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Meanwhile, the U.S. State Department announced Feb. 24 that Washington plans to embed intelligence agents and operatives in the Juarez Intelligence and Operations Fusion Center. About a month later, on March 22, Mexican war college head Gen. Benito Medina said that he believed Mexico needed international aid in the fight against the cartels. Having U.S. personnel operate openly in Mexico would touch on strong political and cultural sensitivities, something that has stood in the way of increased U.S. operational aid to Mexico. Medinas statement shows, however, that sentiment in Mexico could be changing. At the very least, it suggests there may be room for maneuver around the issue. Shortly after Medinas comments, a U.S. intelligence report leaked April 8 that the Sinaloa Federation had taken over primary control of drug trafficking in the Juarez area from the Juarez cartel. The information was later confirmed by the FBI. The intelligence report cited information from confidential informants involved in the drug trade and the noticeable shift in the proportion of Sinaloa drugs being seized on the U.S. side of the border. This does not mean the Juarez cartel is out of commission, but rather that it has lost control of its core turf. The Juarez cartels core geography is centered around the Juarez Valley, which stretches from Ciudad Juarez along the Texas border down to El Porvenir. It maintains some degree of influence throughout the rest of Chihuahua. The loss of the Juarez cartels home turf leaves the organization without a place to retreat to, and the cartel has made it very clear that it will stand and fight to the death. Indeed, violence has spiked yet again in the region in recent weeks since the announcement of the Sinaloa takeover, with 20 executions on April 28 alone, and an April 24 ambush attack on a federal police patrol that killed six federal agents and a teenage bystander. The Juarez area has already seen more than 870 drug-related murders in 2010 (there were about 2,700 deaths there in 2009).

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It has become clear that the Sinaloa Federation is the dominant organization in the area, as it appears to have superior funding and manpower. This leaves little hope that the Juarez cartel can reclaim its plaza. The only hope the Juarez cartel has of remaining relevant on the Mexican drug-trafficking scene is to come to some sort of agreement with the Sinaloa Federation. Despite the extreme violence witnessed in recent years between the two organizations, such an agreement is not out of the question. Before this recent conflict, the Juarez cartel was part of the Sinaloa Federation for some five years. That said, an agreement does not appear likely in the near future, meaning violence in the Juarez area will likely persist as the Juarez cartel struggles to hold on to what little territory and market share it still has.

Targeting U.S. Interests

A series of attacks and probes directed against U.S. diplomatic facilities and personnel in some of the most violent regions in Mexico began after the Feb. 24 announcement that U.S. Intelligence analysts and operatives would be embedded in the Juarez Joint Intelligence and Operations Fusion Center. The first incident came in the form of a bomb threat phoned in to the U.S. Consulate in Juarez between 8:00 a.m. and 9:00 a.m. March 2. The threat reportedly resulted in the evacuation of nearly 1,000 people from the consulate premises. Even hoax bomb threats are dangerous, as they get people out of the protective zone of the consulate building and into the open, where they are more vulnerable. The second incident occurred on March 3 when several masked gunmen in two SUVs posing as Nuevo Leon state police attempted to enter the U.S. Consulate in Monterrey in what appears to have been a probe of U.S. Consulate security. An actual Nuevo Leon state police agent charged with guarding the consulate stopped the masked gunmen, who departed after a tense 15-minute standoff. The U.S. Consulate in Monterrey was also the target of a haphazard drive-by shooting and failed grenade attack in October 2008. The third, and most notable, incident involved the execution of three people associated with the U.S. Consulate in Juarez at the hands of members of Los Aztecas street gang, which has ties to the Juarez cartel. The victims included a husband and wife who were both U.S. citizens. The wife, Lesley Enriquez who was four months pregnant worked at the Juarez consulate, where she approved visa applications. Her husband, Arthur Redelfs, was a corrections officer at the El Paso County Jail across the border in Texas. The third victim, Jorge Alberto Salcido Ceniceros, was married to a Mexican national employee of the consulate. The motive behind the attack has yet to be established, with conjectures still ranging widely. Some claim Redelfs was the true target because of his connection to the El Paso County Jail, while others maintain that Enriquez was targeted for rejecting cartel members incomplete visa applications. According to still another proposed motive, a Los Aztecas member testified to Mexican federal police that U.S. government employees were specifically targeted to draw the United States into the cartel conflict in the hopes that U.S. involvement would neutralize the Mexican governments alleged favoritism of the Sinaloa federation. In a fourth incident, unknown suspects hurled a fragmentation grenade over the wall of the U.S. Consulate compound in Nuevo Laredo on April 9 at approximately 11:00 p.m. local time; the suspects then fled. There were no injuries, and only minor damage was reported. The Nuevo Laredo consulate and the Piedras Negras consular agency were subsequently closed April 12-13 as investigations were launched and the security of the facilities was assessed. No individuals were named as suspects in the attack, but it is widely suspected that Los Zetas were responsible. While the motive behind each of these incidents has never been completely or thoroughly explained, U.S. government personnel clearly are not immune to cartel-related violence. This realization has

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prompted the U.S. State Department to authorize the departure of family members of U.S. government personnel working in consulates along the U.S.-Mexican border from Tijuana to Matamoros and in Monterrey. Whatever motivated the attacks, a continued campaign against U.S. government facilities and personnel will undoubtedly force Washington to dedicate more resources to dealing with the violence and securing U.S. assets in Mexico.

National Security Reform

On April 28, the Mexican Senate passed the National Security Act, a set of reforms that effectively redefine the role of the Mexican military in the cartel wars. Since Felipe Calderon became president in December 2006, the most effective security force at his disposal has been the Mexican military. The use of military troops against drug-trafficking organizations, however, has raised questions about the legality of deploying the armed forces domestically. The reforms range from permitting only civilian law enforcement personnel to detain suspects, to repealing the ability of the president to declare a state of emergency and suspend individual rights in cases involving organized crime. While these reforms are notable, they will likely have little effect at the operational level. This is because the armed forces will likely remain the tip of the spear when it comes to tactical operations against the cartels by simply having troops accompanied by civilian police officers who conduct the actual arrests. Representatives from Mexicos Human Rights Commission will also be present to address public grievances, ensure no human rights abuses have taken place and to report them if they have. The most notable change stemming from the new law is that the president can no longer domestically deploy the armed forces whenever he wants to. Individual state governors and legislatures must now request the deployment of troops to their regions once criminal activity has gotten beyond state and local law enforcement entities control. In practical terms, many states including Tamaulipas and Nuevo Leon have requested significant numbers of troops to augment the federal garrisons already there, only to see their requests go unanswered because of the lack of available troops. Limiting the executive branchs power to deploy the military domestically has already politicized the battlefield in Mexico, much of which lies in the northern border states. This is where the majority of Mexican security forces are deployed, and these are also states that are governed by Calderons political opposition, the Institutional Revolutionary Party (PRI). Frictions have emerged between these states and federal entities on how best to combat organized crime, most notably from Chihuahua state Gov. Jose Reyes Baeza of the PRI. As 2012 elections draw closer, Calderons campaign against the cartels will likely become even more politicized as the three main parties in Mexico the PRI, Calderons National Action Party (PAN) and the Revolutionary Democratic Party jockey for the Mexican presidency. So whether or not the new National Security Act will have an immediate impact on the Mexican governments countercartel operation, high levels of violence will continue to necessitate the use of the Mexican armed forces. State law enforcement has yet to demonstrate the ability to quell any outbreak of violence, so even the political friction between the PRI state governors and Calderons PAN administration will not prevent a military role in counternarcotics efforts.

Outlook
In the coming months, violence associated with the fluid nature of the cartel landscape should steadily increase. With the impending Zeta offensive, already high levels of violence could spike yet again, particularly in the Tamaulipas region. Despite a change in strategy in places like Juarez, Mexican security forces have yet to demonstrate the ability to clamp down on these warring criminal groups enough to reduce violence by any meaningful amount.

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As mentioned, STRATFOR expects the Mexican military to continue to play an integral role in the war against the cartels. Mexicos three main political parties will be closely watching the outcome of Calderons strategies in the coming weeks and months, and will try to leverage these outcomes for political gain in the upcoming 2012 Mexican presidential elections. With Calderons legacy riding on the outcome of the Mexican governments offensive against the cartels, Mexico City might explore other options, including seeking additional foreign help, especially as the resistance to foreign involvement seems to be starting to fade.

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