The FBI's New Gang Report

I have a new piece looking at the new report, and what it says about Mexico. Highlights:

The report is also noteworthy for what it doesn’t say. For the past several years, U.S. authorities have highlighted the role of Mexican criminal groups in the U.S., painting the picture of a situation that is growing ever-more precarious. In 2008, the National Drug Intelligence Center published a report that named 195 U.S. cities in which Mexican traffickers “operate,” including remote locales like Decatur, Alabama and Kalamazoo, Michagan.

That number continued to rise. “Mexican drug cartels are in well over 200 cities here in the United States,” Gil Kerlikowske, the head of the Office of National Drug Control Policy, told The Daily earlier this year. In the same report, an ICE agent told The Daily that the activities of Mexican gangs in cities “all over America” was “the stuff of nightmares.” Despite the fact that law enforcement officials gave little context or qualification for their concerns, voices like Rep. Michael McCaul and Lou Dobbs used such comments to stir up fears of an invasion in progress by Mexican criminal groups.

The most recent assessment, in contrast, offers a much more nuanced picture of the relationship between the most notorious Mexican gangs and crime in U.S. cities. Rather than a Mexican hegemon pulling criminal strings on U.S. streets from thousands of miles away, what we see is evidence of a supply chain. The Mexican groups all have local partners charged with retail distribution of their merchandise: the Sinaloa Cartel works with, for instance, the Latin Kings and the Mexican Mafia, while the Zetas work with the U.S.-based branches of MS-13 to market their drugs.

This is not fundamentally different from the relationship other foreign drug traffickers -- Vietnamese opium producers, Colombian cocaine manufacturers -- have set up to import drugs into the U.S. Indeed, foreign producers of any good, illegal or otherwise, will by necessity have a similar relationship with domestic retailers. Rather than the ominous incursion of the world’s nastiest gangs into the U.S., this is merely the working of a global supply chain.

Fox and His Non-Pact Pact

New piece here.

The Victims' Advocate

M Semanal has a long piece about/interview with the head of the new Procuraduría Social de Atención a las Víctimas de Delitos, Sara Irene Herrerías.

Hillary Hates Enrique?

Bajo Reserva says that, a couple of years ago, Hillary Clinton responded to the possibility of a Peña Nieto presidency with not entirely friendly, "Over my dead body". I'm not sure what she may know that the rest of us don't, but that's an odd reaction, if it's true. First of all, it shows very little appreciation for the historical ineptitude of the US when trying to influence Latin American elections. Second, it shows little appreciation for the context, since Peña Nieto has been the favorite for 2012 since well before Clinton was deployed to Foggy Bottom. And lastly, it's especially odd because I can't why he would provoke such a harsh reaction from an American diplomat. I am no fan of Peña Nieto's, but he is not outside the mainstream of the Mexican political elite, nor does he represent a wing of it that is especially hostile to the US or its interests. In any event, it said she is warming to the idea of a Peña Nieto presidency, as well she should, given its likelihood.

The same column offered some details of Lula's recent visit to Mexico, in which he called for a Pemex-Petrobras partnership and scolded the PRD. Bajo Reserva, which referred to him as the "legendary Brazilian ex-president", said that Lula postponed meetings with Cuauhtémoc Cárdenas and Marcelo Ebrard to hang out with Peña Nieto and Humberto Moreira for a while longer.

Another Day, Another Chaotic Internal Election for the PRD

Aguachile has the info:

As expected, things went very wrong in the PRD's internal election this weekend. The count was cancelled in five states - Mexico City, Chiapas, Zacatecas, Oaxaca and Veracruz - all key states for the party.

Having cried fraud for more than two weeks ahead of the contest, the discredited Dolores Padierna and her internal party faction IDN as expected managed to sabotage the election, and blamed Mexico City mayor Marcelo Ebrard for the disturbances. In several states, thugs loyal to the IDN resorted to violence against its party opponents, such as in Durango, where the infamous Cecilio Campos led groups armed with lead pipes that attacked their fellow party members.

If there ever was a case of the pot calling the kettle black, this is it: IDN and Padierna actively tried to derail the process in order to make Marcelo Ebrard look bad. It his hard to understand this logic of "destroying your own party to save it" from a rational point of view, but from that of the IDN, who support the bid of Ebrard's rival Andrés Manuel López Obrador to become the presidential candidate of the left, it makes perfect sense to make the PRD, now led primarily by the social-democratic Nueva Izquierda faction close to Ebrard, look bad.

The party will likely make another attempt next weekend to hold elections in the remaining states.

And more, in bullet form:

* The heads of the PRD factions meet to lick their wounds and attempt a "reconciliation," with new elections scheduled for next weekend in the five states where they were not held this Sunday.

* But Dolores Padierna/René Bejarano of the IDN faction, which has caused so much trouble and discredit of the party, was not there.

* Earlier, IDN claimed it had intercepted a trailer or two of handouts, but offered no evidence, nor did it report the alleged incident to the authorities.

* And in a very open attack on Ebrard, IDN even demanded that Ebrard leave the PRD!

* Former party president Jesús Ortega blamed IDN for the turmoil this past weekend, arguing it is part of IDN's strategy to discredit the PRD and Ebrard in order to promote the candidacy of AMLO.

* Pro-AMLO groups also demand the cancellation of election in other states where it appears their opponents won.

* The Mexico City government, through Secretary of Government José Ángel Ávila, denied that it had anything to do with the elections.

* Marcelo Ebrard, from Kuwait: The 2012 candidacy will not be decided by "whomever screams the loudest," the perennial strategy of Padierna et al.

With regard to the possibility of Ebrard leaving the party, you have to wonder if he hasn't considered it. This is of a piece with everything that has happened within the party since the 2008 election for party president.

Leo Zuckermann has more here.

Murders in 2011

I had a piece earlier this week about the recently released data on murders in Mexico in 2011 (through August). Highlights:

But while the news is bad in [Acapulco and Monterrey], other areas have experienced a significant lessening of violence. The foremost is Juarez, the border city in Chihuahua, which has for the last several years enjoyed the dubious designation of Mexico’s most dangerous city.

While it remains exceedingly bloody, Juarez is far safer than it was in 2010: with 1,065 murders through August, it is on pace for just under 1,600 murders, a murder rate of roughly 120 per 100,000 residents. In 2010, the city registered some 3,000 murders and a murder rate of roughly 250 per 100,000.

The drop in violence in Juarez is driving a broader decline in murders in Chihuahua, though one that is not nearly as marked. With 2,147 murders through eight months, the state is on pace for slightly more than 3,220 murders this year, compared to 3,514 in 2010, according to the SNSP.

Another region where murders have dropped is Baja California, the Pacific border state that is home to Tijuana and Mexicali. With 464 murders so far in 2011, the state, which has long been among the regions most readily associated with organized crime violence, is on pace for 696 murders this year. That would give Baja a murder rate of 22, comparable to the nationwide average. In 2010, in contrast, Baja California was the site of close to 900 murders. Part of this drop may be due to what's been called a "Pax Tijuana," whereby two large criminal forces reach a business arrangement, thus reducing the competition and acts of bloodshed.

Taken together, the picture is one of a nation growing slightly more violent, with the violence growing significantly more dispersed. The Calderon government has long responded to critics by pointing out the violence is concentrated in a relatively small number of areas, Tijuana and Juarez prominently among them. However, even as the violence drops in some of these hot spots, it is more than balanced by the increases in formerly tranquil oases like Monterrey.

Switching Roles

For most of the past couple of years, while the race for 2012 was still a messy blob just beginning to take shape, Manlio Fabio Beltrones was always the sensible, modernizing alternative to Enrique Peña Nieto's dinosaur redux. But on the oh-so-important issue of Pemex, the roles are reversed: Peña Nieto spoke recently about opening Mexico's oil company up to outsiders, while Beltrones responded by rejecting any privatization of Pemex.

The easy explanation is that Peña Nieto is aware of his reputation as a new-age dinosaur and is seeking to modify it, while Beltrones simply needs to distinguish himself from Peña Nieto however possible. In this case, I think the easy explanation is pretty much correct.

More on Zepeda Patterson and Monterrey

Right here. Also, Norma Samaniego looks at the links between the labor market and violence in Mexico here.

New Monterrey Piece

Letras Libres has a new piece on Monterrey, which very long and full of good interviews, and about which I wrote here. Highlights:

Between the Mariano Escobedo Airport, in the industrial municipality of Apodaca, and my hotel in San Pedro Garza Garcia, a bit past 11 at night and after crossing the entire city of Monterrey, I don’t see a single soldier or policeman, despite being just a week after Mexico’s worst attack against the civilian population: the burning of Casino Royale, perpetrated by gunmen who acted with impunity in the broad daylight, where 52 people died. And that will be one of the most unusual constants during this visit. Not even in the interview with the secretary of governance, Javier Treviño, nor with the threatened mayor of Guadalupe, Ivonne Alvarez, nor on the drive around the Barrio Antiguo, not even to enter the Tec [de Monterrey] for a ceremony presided over by two of the most important businessmen in Mexico, no one ever asked me for identification, checked my backpack, nor confirmed that I had an appointment or an invitation.

The explanation for this lack of control was given to me by Jorge Tello Peon, unsalaried cabinet coordinator for security in the Nuevo Leon government. The creator of Cisen, the old collaborator of Fernando Gutierrez Barrios and maybe the man who best understands what goes behind the scenes in Mexico’s security agencies, Tello is emphatic during a breakfast in a restaurant simply named Wall Street: “Nuevo Leon is facing an alarming deficit of police officers.” The systematic clean-ups of officers who are corrupt, if not on the payroll of organized criminal groups, has left the state agencies, and the majority of the municipalities, with negligible numbers. Bernardo Gonzalez-Arechiga, director of the Tec’s Graduate School of Public Administration and an expert on security issues, corroborates the statistics: “Nuevo Leon has less than 8,000 police officers and it should have, given its population and under the UN standards [at least 2.8 police per 1,000 inhabitants], 20,000, and under the Goode standards [which measures the number of losses among the police to calculate the required number], 40,000.” There is a state program in place to build a new police agency, but it’s not easy to recruit. No one wants a job in which you risk your life if you don’t become corrupt. And that’s the case despite conditions having radically improved: the government offers a salary of 14,000 pesos a month with good benefits. The recruiting drive has had to go outside the state and offer housing for those who aren’t residents. Not even that works. Furthermore, the process of incorporating the recruits is inevitably slow. Nothing is more dangerous than recruiting desperate people and giving them a weapon without any training. The Mexican Army knows it, as it confronts the desertion of a significant number of commanders of its special battalions who have turned into leaders of the Zetas. “In February,” Tello tells me as an example, “we fired 30 police, and we need 500 per month.”

[...]

With a per capita income of 40,000 dollars, figures above those of Canada, and with more finance and marketing graduates from North American universities than any other place in the world, San Pedro Garza Garcia, in the wooded foothills of the Sierra Madres, has the luxury of starting with the ceiling, as in the house of the mayor. [Mayor Mauricio Fernandez, a wealthy businessman outside of politics, has an exquisitely painted ceiling on the top of his home.] That is, firing all of its police and hiring as many as it needs, comfortably surpassing the indices recommended by the UN. Creating a municipal intelligence agency. Carrying out a scandalous registration of domestic workers. Even the mayor proposes a reduction in the penal minimum age to 12 years. That’s not to mention the rumors running around about a “group of tough guys” at the mayor’s service. With approval ratings of more than 80 percent, according to various polls, Fernandez Garza can brag of zero kidnappings at this point in the year and only two murders, before 40 per week in the rest of the metropolitan area of Monterrey. Obviously, the mayor-sheriff “method” cannot be transplanted.

Part of the success is owed to a historic revenue collection in his first year in office. He discovered that many of the wealthiest men in the city, some of them his neighbors estate to estate, had gone years without paying the predial, the tax that cities charge and that is the most basic for keeping its books in order: “Tricks from their lawyers to justify their jobs,” he tells me to excuse them. And he threatened them with publicizing their delinquency in the social life supplement Sierra Madre, which is edited by El Norte [one of the biggest daily papers in Monterrey] for subscribers from that city. An effective change: one thing is to cheat the tax man, a bothersome abstraction, but quite another to be chewed over at the country club.

Internal Displacement in Mexico

New piece on InSight. Highlights:

According to the report, roughly 2,500 Mexicans used violence as the basis for an appeal for asylum in the U.S. in 2008, an almost 50-fold increase from 2006, when President Felipe Calderon took office. Other reports differ with regard to the size of the increase -- Global Post says that more than 2,600 requested asylum as early as 2006 -- but most sources suggest that several thousand people are requesting asylum annually. Additionally, many thousands more are using alternative means of entry into the U.S. to escape the violence, from tourist visas to legal residencies for investors.

The report focuses primarily on the challenge coming from those looking to escape Mexico for the U.S., but outbreaks in drug violence have also spurred migration within Mexico. In all, the Internal Displacement Monitoring Centre (IDMC) estimates that 230,000 Mexicans qualify as displaced.

Of course, it can be difficult to distinguish between forcible displacement and voluntary migration, and some studies offer a more worrying picture. According to data provided by Inegi, Mexico’s statistical agency, in 2010, the population in the embattled northern city of Juarez declined from 1.3 million to roughly 1 million in just two years. Another study released around the same time from the Autonomous University of Ciudad Juarez (UACJ, for its initials in Spanish) estimated the size of the population loss at 500,000. According to a further study by UACJ, 33,000 homes in the city are unoccupied.

Strengthening the Case of Memo, Maza, et al

This piece of news certainly makes the claims that tainted meat rather than PEDs were behind the failed doping tests of the five seleccionados before the Gold Cup much more believable:

A majority of the players tested at the Under-17 World Cup in Mexico had traces of clenbuterol in their bodies because they ate contaminated meat, FIFA said Monday.

Tests in Germany after the tournament revealed players from 19 of the 24 teams had adverse findings of the banned anabolic agent in 109 of 208 urine samples.

FIFA medical officer Jiri Dvorak called the results "highly surprising" but insisted that teenage soccer players were not cheating.

"It is not a problem of doping, but a problem of public health," Dvorak told reporters, adding that none of the players were harmed or put in any danger.

FIFA and the World Anti-Doping Agency declined to prosecute any cases because the weight of evidence pointed to contamination.

Mexican authorities have acknowledged the country has issues with feeding banned steroids to livestock.

However it does make me wonder of the long-term consequences of all those steak tacos I ate while living in Mexico. Probably best not to think about it too much.

Seminal Moment

Half of all Americans support the legalization of marijuana, according to a new Gallup poll.

On the Zetas and Terrorism

New piece at Este País.

Blaming the Victim

Jorge Zepeda Patterson's column included an interesting factoid yesterday: the Tec de Monterrey's flagship campus has lost almost 5,000 students, out of an initial total of 17,000, in the past year and a half. Then he engages in a prolonged bout of what looks like schadenfreude with regard to Monterrey's travails, pointing out what he perceives as the region's character flaws in the most general of terms:

When one would travel to Monterrey he would find regiomontanos exuded a sense of pride earned the hard way, although at times it bordered on arrogance. The success of their businessmen, the ability of their elites to generate wealth was such that the could demonstrate a sense of disdain for those who had the least. I frequently heard it said that the poor continued to be so because of laziness. The achievements of their businessmen had generated among the society a false notion of merit as the only factor in social mobility. As though the inability of a laborer to advance up the social pyramid was owing to laziness or a lack of will, despite working 10 or 12 hours a day his entire life.

The social and economic life in Monterrey seems to depend on a courtesan culture that revolves around 15 or 20 significant last names. Every inhabitant in the city defines his social stratus according to the degrees of distance that separates them from these last names and their businesses.

Positions Don't Exist

There were a couple of interesting comments on Barça and the evolution of modern soccer earlier this week. First, from Phil Ball:

Cesc Fabregas succeeded in England because he chose to operate in an area that was neither midfield nor forward, in the no-man's land 'between lines', as the Spanish say. He wreaked havoc there for several seasons, especially when he was joined by others who also prefer this zone, like Samir Nasri and more recently Jack Wilshere. Sometimes it was hard to see just what Fabregas' secret was, but it was an ability to switch direction, pass accurately long or short, and never signal to defenders what his real intentions were. Simple but true - and it can't be taught. Now he's joined a Barcelona side that possess two supreme exponents of the media punta art, Andres Iniesta and Leo Messi, and has consequently added to the destructive weaponry that the Catalans can unleash on almost all who attempt to oppose them.

I read somewhere recently that Barcelona are playing a 4-6 formation, or at times 3-7 (depending on how you want to define Dani Alves), without a striker. Seven midfielders? Yes - I would buy into that theory. David Villa and Pedro often operate like midfielders, with the proviso being that they will run into the forward space first, before the others. But the term 'midfielder' is misleading in a system like Barcelona's. Their fluidity of movement, often using three media punta players who flit and fly around the more static Xavi in a sort of hypnotic, unpredictable dance, simply destroys defences that have grown up on the idea that the opposition will consist of a set of players whose movements and zonal play will be more or less limited to specific areas of the pitch.

Second, and illustrating the first, Racing coach Héctor Cuper:

"They have everything, they've broken the mould. To add something new, I'd say they are a team without equal. At times the forwards are in midfield and vice versa, and the defenders become the most dangerous forwards. "Can anybody tell me whether [Sergio] Busquets is a defender or midfield player, whether [Lionel] Messi is a winger, striker, midfield player, or plays just behind the strikers, not to mention [Javier] Mascherano. I've always said that perfection doesn't exist, but Barca are the closest I've ever seen."

Lastly, the back-and-forth between Messi and Iniesta that set up the first goal against Racing was insane. Messi's finish was also sublime.

Just a Bit Inappropriate

Marco Fabián is a fun player who always looks to be having a good time on the field, but his celebration following the first of three goals last night against Estudiantes was perhaps a tad over the line. He has since apologized.

Jailhouse Mayhem

Twenty people were killed in a Matamoros facility where 40 inmates escaped last year. This is, I believe, at least the fifth time since 2009 that 15 or more people were killed in a jailhouse riot. The others were in Gómez Palacio, Durango, and Juárez twice. I think there was also a Tijuana riot that killed 15 or 20 in 2007 or 2008. In other words, this is not a new problem, but no one seems particularly interested in addressing it.

More, More, More: A Meaningless Manifestation of Good Intentions

Barry McCaffrey called for a larger Mérida Initiative, pointing out that if we spend $10 billion a month in Afghanistan, we can afford to pledge more than a billion and a half over three years in Mexico. That's a fine point, but the size of the package isn't the fundamental issue. We could give Mexico 40 Apache helicopters, or even a few F-16s, and all of a sudden we'd have a much larger Mérida Initiative, but does that address Mexico's biggest problems? I certainly don't think so. The size of the package isn't the issue; and calling for a bigger Mérida is just a shortcut to saying, I want us to be more worried about Mexico. That's great, but it's what we are spending it on that is important, not how much we are spending. I'd love to spend virtually all of it on vetting programs and training and other institution building, but I'm not certain that any American-funded programs, no matter how well funded or well funded, will be the key to a safer Mexico. In other words, the force for changes will have to come from Mexico; American policy-makers often seem to forget that here is a limit to what American money alone can accomplish abroad (aside from the actual limit to American money, which is also a growing problem).

Peña Nieto's One Misfire

El Universal published a sketch of the economic proposals of Beltrones and Peña Nieto earlier this week. Obviously, a couple hundred words isn't much of a space for economic outlines, and there is an enormous distance between campaign plans and the reality of negotiating budget packages and structural reforms. Nevertheless, as boilerplate goes, I liked most of what Peña Nieto had to say. His top five priorities were: macroeconomic stability, fostering competition, driving Mexico's energy interest, greater investment in human capital, and increase credit. All sensible ideas!

However, he writes about competing with India and China, which I think is the one misfire of his list. There are two billion people in those nations who will work for wages far lower than what a Mexican would typically earn. Given that, competing with China and India is a bit like racing a racehorse. The trick is to find stuff to sell to those nations so as to benefit from their growing demand (this is what South America has done, but of course Mexico doesn't have loads and loads of soy), and otherwise differentiate Mexico from the Asian giants as much as possible.

AMLO in DC

El Peje was at the Wilson Center the other day, though unfortunately they never referred to him as El Peje during the event. Nevertheless, despite this unthinkable oversight by Dr. Selee and co., you might be interested in watching the video.

As always, commentary by Aguachile is expert.

Crime Writing

Steve Dudley takes on the Iran-Zetas connection, while I write about the arrest of a Zetas big shot in Saltillo. Also, here's a partial translation of a great report from Excélsior last week about policing in the Jalisco-Zacatecas border region. Highlights from the latter:

The convoy passes through Teul, still enemy territory, when the police radio announces the presence of an “unsavory character.”

“That mother-----er is a lookout, he just left the highway!” The chase immediately begins, adrenaline for some and arrhythmia for others. Police run toward a suburban truck with California license plates that had just been abandoned on a dirt road, the uniformed men point their guns forward and others cover their rear.

No one who doesn’t belong appears. The informant is captured, without a shot, but the revision continues 100 meters away. The man confesses to being an RT (a leader of the lookouts), who says he is from Zacatecas and works for the Zetas because he can’t find work. He, together with his truck, is taken to Guadalajara. The group communicates with other teams and the return trip turns out to be stressful.

One of the officers gets into the armored car with a nervous laugh. It turns out that in the chase, the officer was himself chased by a bull that was loose on the grassland -- an anecdote to break the tension of the moment.

Lingering Question

I agree with the various points of view arguing that the Iranian-Zetas plot was not something that should keep anyone up at night (save perhaps the poor sap who, perhaps confusing some of the Zetas named Carlos with Carlos the Jackal, is now in jail), but this passage (from the Post) points to a question that I have not seen answered:

The alleged plan was foiled when Arbabsiar made contact with a man he believed was a drug-cartel member. Instead, it was an undercover informant for the U.S. Drug Enforcement Administration.

Are we sure he wasn't both? In other words, was it not a Zeta who informed the authorities, or was it someone the US had infiltrated? It doesn't seem to me to matter to much from the standpoint of Iranian capacity to carry out attacks in the US (the former case is actually more reassuring, because it indicates that even beyond the reach of the government, our ostensible enemies in the drug trade see their interests and ours as the same), but I am curious if the initial alert that there was some sort of attempt to hire Mexican hit men was the product of American or Mexican government agencies' proactive efforts, or it fell into their laps.

Brazil Disappoints 30,000 Laguneros, and Me

Last night's Brazil-Mexico friendly was the most Brazilian performance in the history of the Brazilian national team, perhaps in the longer history of Brazil, maybe even in the still longer history of performance. Seventy-five minutes of uninspired crap, Neymar getting hip-checked sixty feet every few minutes, Marcelo and Alves racing forward like the spastic wingers at an ten-year-old select game, and David Luiz popping it into his own net for the game's only score. Mexico wasn't looking particularly smashing either, but better than Brazil. And then, five minutes of flurried, ten-man activity, a pair of huge cracks from Marcelo and Ronaldinho, and Mexico was walking out of the lovely TSM (even lovelier without any gunfire interrupting the game) losers, for the first time in the Chepo de la Torre era. And I went to bed disappointed.

Also, this strikes me as the most Mourinhista photo in the history of Mourinho.

Education as a Solution to Crime

I have a piece here about a recent study on the subject.

Content Dump

I am in the middle of a particularly busy stretch of existence, which does not mix well with my preferred lifestyle of frequent glasses of beer and generally sloth-like movements. Consequently, I have about a million Firefox windows open with stories I wanted to post on, but haven't had the chance to do so in any depth. So, I'm just going to post them all, no translations and little commentary. Enjoy!

Richard Ford is in Mexico, likes Obama, talks with Milenio.

Calderón wanted a coalition government in 2006, but the PRI rejected the offer, according to PRI Senator Francisco Arroyo.

Alejandro Hope writes about the myth of money laundering as a potential weapon against Mexican gangs. Coincidentally, I've recently spoken with some criminologists about this topic for something I'm working on, and they're all essentially unanimous that cracking down on money laundering is a fool's errand. The gap between the commentariat narrative and the academic consensus is just huge here. In any event, this is a myth I partially accepted (though thankfully one that I didn't ever exert much energy writing about, and  stopping the bulk cash shipments never seemed feasible to me) for a long time, for which I apologize and am glad to have been shown the light.

Gary Moore says there is no such thing as a good guy cartel in Mexico. I largely agree, and I was trying to get at a similar point here. I'd say that makes High Point-style interventions in Mexico a bit trickier for the time being.

A Los Pinos spokeswoman said that the security fight is a long-term struggle. This realization in 2006 should have seem to have motivated a greater emphasis on consensus and political sustainability from the Calderón administration.

Jorge Fernández Menéndez wonders what the PRI will do about Manlio Fabio Beltrones.

Macario Schettino celebrates Steve Jobs, and wonders when Mexico will produce a comparable figure. Ricardo Raphael weighs in as well.

According to a study by the Tec de Monterrey, insecurity costs Mexico some $20 billion a year. Although...that's an interesting figure, but arriving at any meaningful number requires the consideration of so many counter-factuals and third-order effects that it's really hard to put much stock in any such statistic.

The IMF is gloomy about Mexico's short-term economic future, thanks to the US slowdown.

José Antonio Crespo laments the demise of reelection. Again. (Again the demise, I mean, not again the lament, though of course it's probably not the first time he's complained of it.)

The Zeta bosslady known as La Flaka used to be a model police officer, and was actually wounded in the line of duty two years ago. Milenio Semanal runs down her Vader-esque turn.

The US says that Chapo Guzmán "dominates" drug trafficking in the US, yet as always doesn't say what that means.

Jorge Chabat thinks Felipe Calderón is coming around on drug legalization.

The Mexican budget doesn't spend enough on education.

Fourteen of the 32 state police chiefs (Mexico City included) are led by military men.

Happy News

The PRI will elect their candidate in 2012 with a primary. I'm not certain if not doing was was ever under consideration, and both Madrazo and Labastida were picked with via primaries. However, the PRI has been selecting a lot of local candidates by less open means, so it's nice to see that habit not expand to the presidential process.

Big Seizure

As Excélsior reports, almost three tons of marijuana, 40 firearms, 16 grenades, and 21,000 bullets were seized by soldiers in Camargo, Tamaulipas. The stuff was being stored in a below-ground cache, and no one was detained in the operation.

Downplaying the Role of Non-Trafficking Income

Alejandro Hope, in a rather lengthy comment to the Keith Humphreys post I mentioned here, thinks that the low-ball estimates for non-drug organized crime revenue in Mexico are closer to the mark:

The 50%-plus estimate for non-drug revenues of DTO’s is absolutely ludicrous. Let’s go quickly through the potential sources of income: a)human trafficking: according to the latest National Employment and Occupation Survey (ENOE) done by the Mexican equivalent of the Census Bureau (INEGI), 150,000 Mexicans emigrated to (mostly) the US in 2010; out of those, a portion were legal migrants and another portion were visa overstays, i.e., they did not need a trafficker to get to the US. So let’s put at 100,000 the number of illegal Mexican migrants to the US in 2010. Migrants from third countries have always been a fraction of Mexican migrants, but for the sake of argument, let’s say they were the same number. So you have around 200,000 potential clients for human trafficker, which charge about USD 3,000-5,000 a pop (and that includes about 3-4 attempts). That brings the total to somewhere between USD 600 million and US one billion, not all of which is accruing to DTO’s because there are a lot (probably a majority) of independent gangs of coyotes; b) piracy: according to data from the Mexican Film and Music Protection Association (guys that would tend to exaggerate the problem), in 2010 music piracy caused losses of 436 million dollars to the industry. Such potential losses are not equivalent to the pirates’ earnings: they imply that 30 to 40 million pirate CDs are sold every year in Mexico at a price of not more than two dollars each. Therefore, the earnings from CD piracy would stand at levels of 60 to 80 million dollars. The pirate DVD market is predictably smaller and that of clothes and other articles somewhat larger. In any event there is a high probability that the total amount of income produced by piracy is in the range of the low hundreds of millions of dollars (and there are a lot of non-DTO players); c) fuel theft: according to Pemex, about one million barrels of fuel (mostly gasoline) were stolen from its network in the first four months of 2011; extrapolated, that would translate to three million barrels per year. A barrel is equivalent to about 80 liters of gasoline. Thus, some 240 million liters are stolen. In both the US and Mexico, a liter of unleaded gasoline is sold in a gas station for something less than a one dollar, but since the thieves probably have to offer a discount given the illegality. So the total amount accruing from this is likely less than USD 200 million (again, with many independent players); d) kidnapping: according to data from the Ministry of Public Safety (SSP), the average paid ransom in Mexico is approximately USD60,000; in 2010, there were 1264 recorded kidnappings; thus the income from “official” kidnappings would be around USD 72 million. Let’s assume (correctly) that that figure is a wild underestimate and multiply by 10: you get to USD 720 million (with a lot of that money going to specialist kidnapping gangs, not DTO’s); e) extortion: this is the tricky one. No one as far as I know has a minimally reliable estimate of the size of the phenomenon. But according to some anecdotal evidence, the average extorted firm is paying about USD10,000 per year (NB: since extortion is decentralized, the death, imprisonment, or relocation of a specific henchman can lead for a firm to the suspension of payments for a few months or even permanently, so that estimate seems not that wildly off the mark). If that number is more or less correct, you would need about 100,000 firms paying protection money to get to one billion: that would be one in forty Mexican economic units, according to the latest economic census; to get to half of what RAND estimated as drug export revenues, one in thirteen economic units in the country would have to be extorted. That would seem to me pretty much unprecedented in human history (maybe someone has an example). There are, of course, other types of extortion (e.g., phone extortion), but that is mostly the work of con men posing as kidnappers or Zetas or whatever. So, in summary, I would be massively surprised if non-drug revenues of Mexican DTO’s were much more than USD 1-2 billion (and that range could be on the high side), i.e., 15-25% of total revenue at most.

This is easily among the most well articulated breakdowns of drug income that I've read, but I think a couple of points could be made in response. One obvious one is that back-of-the-envelope calculations about hidden industries, even when guided by a logical set of assumptions, lend themselves to rather distorted figures. Of course, that goes both ways: Hope could also be overestimating the total proportion of non-drug revenue. In any event, a few of the assumptions jump out at me as being debatable. The first is immigration: according to the Washington Post, Mexico caught more than 100,000 Central Americans illegally in Mexico in 2010, while US authorities caught 50,000. That doesn't make his figure of 100,000 wrong, since their could be a large number of migrants getting caught multiple times, and it's not clear that the Central Americans caught in Mexico were migrants who had paid coyotes; however, it does suggest that it could be an underestimation. So, for instance, if 200,000 Central Americans are paying Mexican coyotes $4,000 a head instead of 100,000, then we are talking about an extra $400 million. It's also worth mentioning that the UN, using a methodology that I know nothing about, estimates the size of the coyote industry in Mexico $6.6 billion.

As far as kidnapping and extortion, reliable figures are, as Hope mentions, rather hard to come by, because few people involved are interested in reporting their activities. Given that constraint, the key step in Hope's kidnapping figures is this: "Let’s assume (correctly) that that figure is a wild underestimate and multiply by 10". But that seems a pretty casual jump, and if the proper multiplier is 15, we are talking about another several hundred million dollars. (Also, if the average payout is $60,000, does that mean we are not talking about express kidnappings?)

Furthermore, Mexico's home-grown drug market implies a domestic source of organized crime revenue that is largely independent of American policy decisions or the US drug market, so in that sense it is more like non-drug revenue. Conadic estimates that there are 600,000 addicts in Mexico; federal officials say the entire domestic market is worth about a billion dollars.

With just those three changed assumptions (and you could continue tinkering for a while without drifting into the land of fantasy numbers) we've added almost $1.8 billion. Again, my assumptions are probably no more reliable than Hope's (particularly on immigration, other evidence suggests that an aggregate of 200,000 Mexicans and Central Americans paying coyotes may be too high), and what this illustrates most indisputably is the need to take all these statistics with a large grain of salt. However, though I agree that this non-drug revenue isn't going straight to Chapo and his counterparts at the top of the drug-trafficking industry, I think that Hope's statement that he would be "massively surprised" if the proportion were higher than 15-25 percent is a bit too certain.

Finally, check out Hope's new blog; it's full of interesting commentary and is completely worth your time if you speak Spanish. 

An Arsenal in the Juárez Jail

Further evidence of the sorry state of Mexican prisons:

In less than three days, during a second revision at the State Cereso in Ciudad Juárez, police found three AK-47 assault rifles, 12 pistols, three shotguns, four gas masks, 450 bullets and 180 knives. Monday of this week, in a previous search of the same facility, six guns and 91 knives were found, an arsenal used by inmates to murder their enemies in the prison, and dozens of cell phones to extort people on the outside.

Mourning Jobs

 A sampling of yesterday's papers.

Telling Pics

Burro Hall has a bunch of fantastic snapshots of shrines to Jesús Malverde, the so-called patron saint of narcos. As he writes:

The caretakers of the shrine insist it has nothing to do with drug trafficking, and that's probably true in a lot of cases - Malverde's sort of the saint-of-last-resort for a lot of people who have been failed by the celestial elite. But there are more than a few offerings there like this one, which seems to be begging for, or celebrating, a bountiful harvest.

On Tony Wayne's Arrival and Pascual's Removal

New piece on the changeover in the American embassy in Mexico City.

Alliance Resurgence?

Carlos Loret de Mola says that the Chuchos and Ebrard's crowd in the PRD are still thinking about a PAN alliance. I never saw this as a particularly probable outcome, but the PAN-PRD presidential alliance seems less likely to me now that in Vázquez Mota, the PAN has a candidate people seem reasonably happy about.

Or perhaps that's just me that wants to see her on the ballot.

Graphs I've Long Wanted to See

Via Boz, Keith Humphreys has put together a couple of pie charts estimating the proportion of Mexican gangs' income that comes from different sources:

Like Boz, I imagine the second is probably closer to the truth. Humphreys writes:

The most difficult thing about getting current revenue streams correct is estimating how much the MOCOs are making from non-drug-related activities (e.g., smuggling immigrants across the border, pirating videos, kidnapping, extortion). Everyone I read or talked to agrees that this line of MOCO revenue is growing, but estimates of how large it is were divergent. The first chart here uses the low-end estimate among experts of 15% non-drug revenue. If this estimate is correct, the MOCOs are still largely one dimensional drug trafficking organizations, with principal profit coming for cocaine. Note that were we mapping drug markets more generally, cocaine would be a much larger share of the pie but because much of that money is made by Colombian gangs, the share for the MOCOs is smaller.

[Break]

A minority of experts (e.g., Sylvia Longmire, Edgardo Buscaglia) think that the MOCOs make a much larger share of their money today from non-drug sources. This second chart presents the revenue breakdown if these experts are correct. You can see the differing policy implications, for example even national methamphetamine legalization in the U.S. wouldn’t put much of a dent in MOCO revenue.

It's worth noting that the enormous ranges between the two graphs, combined with the enormous ranges regarding the gross total of revenues from each activity, make this little more than a visual exercise, not something on which you'd want to base policy conclusions. I also think that rather than the industry as a whole, it would be more interesting to look at different gangs' revenue streams. Again, reliable info would be a huge problem, but I suspect we'd see a much larger share of the non-drug revenue from the Zetas, and a much smaller one from Sinaloa. Such a case-by-case approach would make the information a lot more useful in terms of combating specific groups.

Lastly, I don't expect the term MOCOs to catch on in Mexico, for obvious linguistic reasons, but it would be kind of funny if it did.

Vázquez Mota Wants the Army in Its Barracks

From El Universal:

With regard to security, Vázquez Mota indicated that the army must return to its barracks, but as part of what would be a second phase of the fight against organized crime.

Nevertheless, she felt that today there are citizens in some states who are afraid to go outside without the presence of the armed forces.

"Therefore, I think that we have to continue strengthening the local institutions, the police, the ministerios públicos; it's a task of shared responsibility and a task in which the population should be involved in a significant way," she said.

Of course, Calderón wasn't saying anything hugely different before he was president, or even a year into his presidency, unless I am mistaken. Nonetheless, her instincts are seem right, and her previously reported comments on organized crime consisted in little more than an affirmation that she would continue combating it, so this is encouraging.

Other Vázquez Mota info: she remains the runaway favorite in the PAN race according to Milenio, and Humberto Moreira included her alongside AMLO as the principal threats to the PRI in 2012.

Where Peña Nieto Stands

He's against reelection. I imagine that this is a part of the broader policy presentation that has been promised going back months now. It is not a promising opening act.

PRI Winning Where It Really Shouldn't Be: Michoacán

An Excélsior poll as the PRI's Fausto Vallejo with a 39-35 edge over the PRD's Silvano Aureoles in the run-up to the Michoacán governor's election later this fall. Bringing up the rear is Felipe Calderón's sister, with 26 percent of the voters' support.

Man Utd's Expensive Young Keeper Acts Like the Worst Behaved of My Middle School Friends

Edwin van der Sar never would have done anything like this:

Manchester United goalkeeper David de Gea has found himself in a sticky situation after being warned for allegedly eating a Krispy Kreme doughnut at a local shop without paying for it.

De Gea, who joined United this summer from Atletico Madrid, earns around £70,000-a-week but apparently decided that he wasn't willing to shell out £1.19 for the sugary treat and, according to the Sun, ate it in store, before attempting to leave.

The Spaniard was tackled by security staff, who showed him CCTV footage of the incident in the store's "stop and search" room.

A source told the paper: "They [De Gea and his two friends] weren't very subtle. They swaggered in chatting loudly in Spanish. The security guards who monitor the CCTV watched two of them take a doughnut each out of the Krispy Kreme cabinet. Incredibly, they then appeared to try to leave without paying - or buying anything else for that matter."

In fairness, those donuts are more addictive than crack.