War on U.S. doorstep: Mexican drug cartels

Decapitation is the calling card of Mexican drug cartel death squads. /AP image

Illegal drug cartels are locked in open warfare with the Mexican government, with at least 55,000 lives lost during the Calderon presidency from 2006 to 2012. In addition to the carnage, the drug cartels are infiltrating and subverting key Mexican institutions such as the police, civil government and financial sector.

The stakes are enormous on both sides of the nearly 2,000-mile long border between Mexico and the United States. Mexico faces a prolonged struggle, with drug cartels vying for at least partial control of the government and economy. Mexico is not only the No. 3 trading partner of the United States, exchanging goods and services valued at more than $450 billion in 2011, the Land of the Hot Sun also poses the most serious U.S. immigration policy challenge. In Washington, crafting a solution to illegal immigration from Mexico has been elusive for decades, and the lawlessness in northern Mexico makes the problem more vexing than ever.

Mexico Drug War by the numbers:

Businessinsider.com recently compiled statistics about the Mexico Drug War. Here's a sample:
• 3,000 police officers and soldiers have died since 2006, which is equal to the number of coalition soldiers who have died in Afghanistan since 2001.
• 5,000 people have disappeared since 2006.
• The Zeta cartel, which controls more territory than any other drug cartel in Mexico, commands 10,000 gunman from the Texas border to Central America.
• In May, 49 corpses were decapitated, dismembered and dumped on a northern Mexico highway. One of the worst atrocities of the Mexico Drug War, Zetas drug cartel kingpin Daniel "The Madman" Elizondo is suspected of orchestrating the slaughter.

Mexican drug cartels have obtained most of their guns from U.S. suppliers. /AP image

2010 U.S. Department of Justice National Drug Threat Assessment:

The 2010 Justice Department National Drug Threat Assessment details the rising availability of most illicit drugs in the United States [as] largely the result of Mexican Drug Trafficking Organizations' efforts to increase drug production and distribution. In fact, in 2009 the prevalence of four of the five major drugs — heroin, methamphetamine, marijuana, and MDMA (3,4-methylenedioxymethamphetamine) — was widespread and increasing in some areas. The diversion and abuse of Controlled Prescription Drugs are also increasing throughout the country. ... Mexican DTOs remain the single greatest drug trafficking threat to the United States. ...

Despite recent government of Mexico efforts to prohibit the importation of methamphetamine precursor chemicals, methamphetamine availability increased as the result of higher production in Mexico using alternative, less-efficient precursors. ...

Mexican DTOs, already the predominant wholesale suppliers of illicit drugs in the United States, are gaining even greater strength in eastern drug markets where Colombian DTO strength is diminishing. The extent of Mexican DTO influence over domestic drug trafficking was evidenced in several ways in 2009.

• Mexican DTOs increased their cooperation with U.S.-based street and prison gangs to distribute drugs. In many areas, these gangs were using their alliances with Mexican DTOs to facilitate an expansion of their midlevel and retail drug distribution operations into more rural and suburban areas.
• Mexican DTOs increased the flow of several drugs (heroin, methamphetamine, and marijuana) into the United States, primarily because [of] the increased production in Mexico.
• Mexican DTOs smuggled bulk cash drug proceeds totaling tens of billions of dollars from the United States through the Southwest Border and into Mexico. Much of the bulk cash (millions each week) was consolidated by the DTOs in several key areas, including Atlanta, Chicago, Los Angeles, New York City, and North Carolina, where it was prepared for transport to the U.S.–Mexico border and then smuggled into Mexico.

In 2007, Mexican authorities made the largest cash seizure in drug interdiction history after finding $205 million in the home of a suspected cartel supplier of meth-precursor chemicals. /U.S. Department of Justice image


2006 U.S. Drug Enforcement Agency report on Mexico Drug War money:

The Office of National Drug Control Policy estimates that Americans spend approximately $65 billion per year on illegal drugs. ...

A 2005 DEA study determined that during 2003 and 2004 there were excess U.S. dollars present in Mexico that could not be accounted for from legitimate sources totaling at least $9.2 billion and $10.2 billion, respectively. It is estimated that the four major drugs that are smuggled into the United States from Mexico ( i.e. methamphetamine, heroin, cocaine, and marijuana,) generate as much as $22 billion per year for the sources of supply.

Particularly after the additional tools provided by the USA PATRIOT Act came into force, law enforcement generally has access to the information it needs to identify and thwart significant money laundering efforts within the United States. However, this same transparency is not present in many other countries, including Mexico. Accordingly, DEA believes that most drug proceeds are now smuggled out of the United States to Mexico in bulk, rather than inserted into the financial system within the United States.

Because of the lack of transparency of their financial system, the Mexican financial services industry continues to be a facilitator for drug money movement. Although it is a sophisticated financial sector, obtaining financial information from the Mexican financial services industry remains difficult.

However, based on intelligence information from various DEA, ICE, and other United States law enforcement operations, we do know that once bulk currency is delivered to its intended recipients in Mexico, it can take a number of paths. Most commonly, bulk currency is deposited into the Mexican banking system through casas de cambio, centros cambiarios and banks, and then repatriated to the U.S. banking system through correspondent banking and bank note sales to United States institutions. While some of the bulk cash can be used to purchase precursors and equipment for methamphetamine manufacture, it also can be infused into the financial system through Mexican front companies or used to purchase real estate, businesses and other luxury assets in Mexico. In some instances, the bulk cash is converted to larger denominated United States dollars at casas de cambio or centros cambiarios for further smuggling to Colombia or for further smuggling to Panama for delivery to the Panama Free Trade Zone to purchase commodities on behalf of Colombian businesses. The combination of widespread corruption within Mexico, coupled with insufficient regulatory and criminal enforcement, makes disguising and moving drug proceeds in Mexico a relatively safe and simple task.