Mexico’s Disastrous Drug War – Analysis


By Brian Saady*

Even if the drug war were to end today, there would still be street crime in Mexico. However, these issues would be on a dramatically smaller scale. Mexico’s street gangs could never ascend to the level of an organized crime outfit without the massive profits from illegal drugs to pay for the necessary weaponry, hitmen, political protection, etc.

By the same token, black-market drug money evokes a vicious cycle of rampant criminality that goes far beyond drug trafficking. In other words, Mexico’s cartels are diversified criminal organizations that don’t limit themselves to drug smuggling.

Petroleum theft is a major problem in several countries benefiting crime and terrorist organizations, particularly ISIS. This crime has also rapidly expanded into the most lucrative non-drug-related illegal racket in Mexico. Fuel thieves or “huachicoleros” tap into pipelines and then sell the fuel at highly discounted rates in the black market.

Much of this fuel is sold on the backs of trucks in small water jugs. A large portion is also sold to directly to gas station owners. This has always been a problem for the Mexican government, but it used to be on a much smaller scale. However, this illegal activity has increased by over 2,000% in the last ten years after the cartels became the primary participants. Most huachicoleros are either working directly for the cartels or independently while paying extortion fees.

Every day, roughly 20,000 barrels are stolen from Mexico’s state-owned oil company, PEMEX. This crime resulted in $1.5 billion in losses for the company last year, a sizeable blow to public funding. Fuel theft occurs in various parts of the country, but an area with numerous pipelines known as the “Red Triangle” is where most of this crime occurs. The Red Triangle is in the state of Puebla, which hadn’t historically been a hotbed of cartel activity until this black market expanded. Now, cartel violence is on the rise even though this area is not a focal point for drug trafficking.

A few cartels are competing for control of this flourishing illegal trade, i.e. Los Zetas, the Jalisco New Generation Cartel, and the Gulf Cartel. Los Zetas is the leading crime group with roughly 40% of the illegal market share. In fact, an ally of Los Zetas, the Meza Flores drug gang, once owned a major gasoline distribution company that received government contracts. Therefore, it appears that Los Zetas actually double-dipped with their criminal endeavors by developing a sophisticated money laundering network that actually sold stolen fuel back to the government.

In response to the fuel theft crisis, approximately 2,000 troops from the Mexican military have been deployed in key regions. Their presence hasn’t decreased the number of barrels stolen, but it has led to several armed conflicts with the huachicoleros. While the Mexican government dedicates massive resources to protect its oil reserves, the average Mexican citizen has to fend for themselves against the terror inflicted by the cartels.

After battling to establish territory, several cartels view many other crimes as the spoils of war, such as rape, murder-for-hire, robbery, extortion, kidnapping, etc. Arguably no cartel terrorizes the residents of its territory more than Los Zetas. The DEA once described them as “the most technologically advanced, sophisticated and violent” cartel.

This cartel has a militaristic culture and structure. In fact, it was the first cartel to consistently recruit former members of the military and that has to do with the roots of the organization. Most of the original Zetas had been part of an elite Mexican special forces unit, GAFE, which was known for committing mass atrocities against citizens in their own country.

Ironically, the formation of Los Zetas came about indirectly from America’s intervention in the drug war. The first members of Los Zetas created their organization not long after receiving counternarcotics training in Fort Benning, GA. The training was through the infamous School of the Americas program, now known as the Western Hemisphere Institute for Security Cooperation (WHINSEC).

Los Zetas began in 1997 as the enforcement wing of the Gulf Cartel. However, the group branched out on their own and rival cartels took note of their modus operandi. Los Zetas raised the bar for the requisite standard of violence that is necessary to protect a cartel’s business model. Eventually, all major cartels began hiring former government-trained killers.

As a result, warfare has been unleashed upon the citizens of Mexico. ProPublica published a heartbreaking piece, “How the U.S. Triggered a Massacre in Mexico,” which fully demonstrated the savagery of this cartel. Back in March of 2011, the DEA notified Mexican government officials about a criminal informant connected with Los Zetas and that information was subsequently leaked to the cartel.

In response, Los Zetas rampaged upon the rural city of Allende searching for this person. Entire homes were reduced to rubble and they killed an unknown number of people with estimates ranging from 60 to 300, including women and children. Despite being bombarded with 911 calls, no one from the government came to the rescue. Even in the aftermath of such a tragedy, the state’s governor, Rubén Moreira, conducted a tepid investigation that has yet to produce a single murder charge.

Two months later, Los Zetas committed a similar atrocity in northern Guatemala. There were 27 deaths in what was the worst massacre to occur in their country since its 36-year civil war ended in 1996. (Over 200,000 people died during that period in Guatemala with 93% of human rights abuses attributed to U.S.-backed government or paramilitary forces.)

One by one, this group of 27 unarmed, peasant farmers were tortured and murdered. Twenty-five of the victims were beheaded. These people were day laborers who had no involvement in drug trafficking. Unfortunately, they worked on a cattle ranch owned by Otto Salguero, who Los Zetas say had stolen a large shipment of cocaine.

One of the leaders of this massacre, Hugo Álvaro Gómez Vásquez, is a Guatemalan national. In fact, he had been part of a notorious U.S. trained special forces group in Guatemala, Kaibiles, which was known for committing numerous war crimes.

Gómez Vásquez was one of several former Kaibiles whom Los Zetas successfully recruited. As a result of this strategy, the cartel began expanding their territory into Guatemala in the early 2000s and eventually eliminated one of the country’s top drug trafficking organizations, Los Leones. Los Zetas power grab was significant enough that they actually made credible death threats in 2009 to then-President Alvaro Colom.

Back home in Mexico, the fact that members of Los Zetas have operated with such impunity has enabled their extortion business to flourish. As a result, Tamaulipas is the kidnapping capital of the country. However, the cartel is involved in this crime across the country. After failing to make “quota” payments, the cartel once set a casino fire in Monterrey that killed 52 people. Afterward, the former President of Mexico Felipe Calderón publicly criticized the U.S. government for not reducing the demand for drugs that is driving this terrorism.

Another extortion-related massacre was covered in the American press this year. Twelve people were wounded and five people were killed, including one American college student, at a nightclub shooting in January. Members of Los Zetas were responsible for this tragedy in touristy Playa Del Carmen. Afterward, the club owner acknowledged that he had refused to pay Los Zetas because he had already given extortion money to the Gulf Cartel and Los Pelones.

All of Mexico’s cartels profit from extortion, some more than others. This vicious crime is particularly visible in Acapulco, which has had Mexico’s highest murder rate for the last two years. Consequently, tourism has declined tremendously in this Pacific resort city that used to be a magnet for A-list celebrities. And, this violence isn’t entirely mutual combat among gangsters as an estimated 150 business owners have been killed in Acapulco since January of 2016.

Make no mistake, extortion isn’t a crime that only the wealthy have to deal with. Practically every profession, from taco vendors to poor farmers, are victims of this crime. In particular, union-controlled, working-class jobs, such as cab drivers and teachers, have been heavily infiltrated by organized crime. The threat has been so severe that 140 schools in Acapulco were once closed due to extortion and kidnapping threats.

Essentially, no one is immune from this exploitation in a cartel-dominated region. As a matter of fact, the Catholic Media Center conducted a poll and found that more than 1,000 priests had been victims of cartel extortion.

One of the most horrific revelations about this type of crime came about when a mass grave of 193 bodies was discovered in 2011 in San Fernando. The victims were migrants from Central America who were en route to the U.S. Alarmingly, these people were delivered to Los Zetas by the local police. Ultimately, the cartel killed whoever couldn’t pay the ransom or refused to work as a drug mule. Notably, another mass grave of 72 migrants, in connection with Los Zetas, was also discovered in San Fernando one year earlier.

Stories like those explain why most victims of extortion don’t bother to report these crimes to the police. After all, many police officers are on the cartels’ payroll, either as informants or in some cases actively participating in organized crime. As a result, Mexico is in a position where the rule of law truly doesn’t exist. If that sounds inflammatory, take note of a study conducted by the Monterrey Institute of Technology. It found that 98.5% of all crime in Mexico in 2010 went unpunished. 

About the author:
*Brian Saady
is the author of The Drug War: A Trillion Dollar Con Game. His three-book series, Rackets, is about the legalization of drugs and gambling, and the decriminalization of prostitution. You can follow him on Twitter @briansaady.

This article was published by the MISES Institute


The Mises Institute, founded in 1982, teaches the scholarship of Austrian economics, freedom, and peace. The liberal intellectual tradition of Ludwig von Mises (1881-1973) and Murray N. Rothbard (1926-1995) guides us. Accordingly, the Mises Institute seeks a profound and radical shift in the intellectual climate: away from statism and toward a private property order. The Mises Institute encourages critical historical research, and stands against political correctness.

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