Thursday, December 29, 2011

2010 Murder Figures

Diego Valle-Jones picks at the just-released database of homicides in 2010 here. As always, his analysis is worth a couple of reads.

New Piece

A review of Charles Kenny's Getting Better, and an argument that much of the same logic applies to Mexico here.

Monday, December 26, 2011

Jarring Stat of the Day

According to the insurance firm AXA, just 16 percent of Mexicans habitually save money for retirement.
The lack of medium and long-term spending affects young Mexicans and their families, because it diminishes their capacity to create a nest egg or invest in their first home, higher education or universities for their children, or confront some medical emergency.


On Aguachile's recommendation, this profile of Enrique Krauze from novelist Jorge Volpi is great Dec. 26, lingering food hangover reading.

On Sicilia's Truce and the Philosophy It Represents

Víctor Beltri captures a lot of what I find wrongheaded about Mexican oppositionalism with this line:
Why not direct public attention to the need for confronting national problems with unity, instead of undermining confidence in the institutions?
That is perhaps a bit of a simplification, but there is a lot of truth to it. I tend to think of it as a holdover from the priísta era, in which merely expressing opposition to a closed political system was the most important stance one could take. Today, avenues for collaboration need to be explored and embraced, whereas many of the current movements rooted in frustration with the status quo seem to be searching for excuses to throw up their hands and walk away from the legitimate system. It will be interesting to see if this continues to be a problem to the same degree as more and more voters who have no memory of PRI rule come of age.

Puebla Is US Soccer South

Eddie Johnson joins DeMarcus Beasley in Puebla. Hérculez Gómez also enjoyed a successful stint there in 2010, though he is suiting up for Santos in the coming Clausura. That brings the total of Americans without Mexican roots in the Mexican league to at least three: Beasley, Johnson, and Jonathan Bornstein. And as far as the Mexican-Americans, aside from Gómez, there are José Francisco Torres, Michael Orozco, Homie Castillo, and I imagine there are a few more, but I can't think of any offhand. For the sake of both the US players and the Mexican league (or at least my interest in it), it'd be nice to see those numbers grow.

Friday, December 23, 2011

More Reading Material

Macario Schettino lists his favorite books of the year here. Tops on the list is Pinker's The Better Angels of Our Nature.

Zuckermann has his favorite book here.

And Enrique Peña Nieto's staff just sent me his favorite book pick (though I had to sign a pledge not to ask him about it with 20 minutes of prep time):

Friday Reading

Alejandro Hope has a long, convincing look at the role Mexican criminal organizations play in American cities, which you should read now, before the eggnog impairs your analytical functions. The gist is that the frequent arguments from American officials that Chapo (or whoever) is taking over street-corners from Baltimore to Fargo are unsupported and unlikely, something with which I heartily concur. He also generously mentions a couple pieces of mine, which really only scraped the surface.

Thursday, December 22, 2011

On the Mexican Cinema

Carlos Puig notes that 52 movies in Mexico sold some 13 million tickets through November, out of a total of 200 million tickets sold. He also notes that the average movie brings in 8 or 10 million pesos in revenues, which, given the costs of making a movie and the theater's cut, means that almost all of them are losing money. More:
Many of the movies that are made today are essentially vehicles of tax deductions thanks to the so called "226", the article of the Law of Taxes on Profits through which busineses can give money to directors to make movies instead of giving money to the treasury. In reality, the incentive no hasn't produced better movies but rather many of them which allows the businessman to deduct, and later they remain in mothballs forever or they are a box office failure.

I am convinced that the although the rules, habits, and customs of our cinema are not conducive to more Mexicans seeing Mexican movies, the quality also plays a part in this disaster. No theater or distributor that has in front of him a movie that will make millions will neglect to do so because it is Mexican, nor are Mexicans crueler with Mexicans than with other people. Should Mexicans be more tolerant because they are Mexican movies? That is a question that is not easy to answer. Do we want garbage on our screens just because it is Mexican?
That's a pretty harsh take, though one I think you hear frequently in Mexico. My biggest problem with Mexican movies was that for the last ten years, so many of them seem to imitate González Iñárritu's depiction of life in Mexico City as an impossibly bleak existence. There are several inter-related problems with this obsession: 1) Most directors can't pull it off as well as González Iñárritu; 2) After dozens of movies trading on this, it is now extremely trite; 3) It's painful to watch and offers little in the way of insight into the human condition or payoff to the viewer; and 4) It willfully ignores the rest of the country, where 80 percent of Mexicans live.

Although I've been out of the country for a year and a half now, so maybe that's not as much of an issue anymore.

Wednesday, December 21, 2011

The Next Generation of Smuggling Ingenuity

A Spanish model was arrested in Italy when authorities discovered that she had two kilos of cocaine hidden in her breast and buttock implants. There is an obvious late-night talk show joke begging to be written but I would probably whiff. I dunno: One breast started arguing with the other about the best DJs in Ibiza?

Evidence of Vázquez Mota's Continued Lead

This comes from an El Siglo de Torreón online poll. Reforma had similar info, though I imagine a bit more scientifically collected, last week. Santiago Creel said a couple of days that he had erased the lead and that he was on top. Cordero claimed, with a similarly absent factual basis, that he and Vázquez Mota were tied a couple of weeks ago. If poll after poll means nothing, it seems like they could keep this up forever, to say nothing of February.

Mass Arrests in the US

Seventy people were arrested in a drug sting in DC this week, and media outlets (though not the DC police news release) are calling it a blow to La Familia. More than 200 people were arrested in Arizona, an operation that the DEA and the media alike are hailing as a shot against Chapo Guzmán and company. I wonder what proportion of these two groups are Mexican citizens; I'm guessing it's not high. I also wonder if these types of reports, which are common, stem from a genuine lack of understanding of how a supply chain works or if it's just cynical horn-tooting.

As always, the emblematic case of this faulty logic is that of Otis Rich.

Tuesday, December 20, 2011

Mexican Gangsters and American Agencies

Proceso had an interesting piece about the relationship between a lieutenant of Chapo Guzmán's and a couple of agents from ICE last week, which I have partially translated here. And here is part of what I wrote as a prelude:

While US agencies often employ a combative, not-one-step-back rhetoric with regard to Mexican criminal gangs, the reality is a bit more complicated. Rather than a straightforward situation with authorities like the Drug Enforcement Administration (DEA) in constant pursuit of criminal gangs, the two sides sometimes stumble into cooperative arrangements, which have periodically caused embarrassment for the US government.

One illustration of this is the case of Jesus Vicente Zambada Niebla, son of one Mexico's most famous traffickers, who was arrested in Mexico in 2009 and extradited to the US a year later. He has alleged that officials in the DEA, the FBI, and the Department of Justice had worked out an agreement with the Sinaloa Cartel to reduce the pressure on the gang in exchange for information on other groups. ICE's relationship with informant Guillermo Eduardo Ramirez Peyro caused a scandal in 2010, when it was revealed that he had been paid some $250,000 over several years while also participating in at least 12 murders and continuing to traffic drugs across the US border. Going back decades, as (among others) books like "El cartel de los sapos" and "El narco: La guerra fallida" have detailed, Latin American drug lords have often sought to turn themselves in to US authorities as a way out of the drug trade, exchanging information about criminal associates for a lighter sentence.

Another example of this deal-making is given in a recent report by Proceso magazine on the testimony of Jesus Manuel Fierro Mendez, who has been cooperating with justice since his arrest in 2008. He says that he was the spokesman for Joaquin Guzman, alias "El Chapo," in his dealings with US authorities. Fierro Mendez depicts a symbiotic relationship in which each side made use of the other: agents from Immigration and Customs Enforcement (ICE) would arrest Sinaloa’s adversaries, while Fierro Mendez would provide tips and confirm leads for the US authorities.

American Views of Latin America

I have a new piece at Este País on two frequent flaws of US analysis of Latin America: that Latin America is a coherent region, and that it needs more attention from the US.

Monday, December 19, 2011

AMLO Seeks to Explain the Reaction in 2006

AMLO has an explanation for his heated reaction to the 2006 elections: if he hadn't launched the blockade of Paseo de la Reforma, there would have been violence in the streets. This single action, which is almost single-handedly responsible for his negative polling numbers being the highest of any prominent pol in Mexico, was an act of peace.

This is both self-serving and logically faulty. I mean, that's a nice, convenient, unfalsifiable assertion to get you off the hook. And wouldn't droning on about the pinche fraude, instead of repeating time and again that there was no evidence of a systemic, widespread fraud, have made violence more likely? And why was sending the institutions to hell necessary? However, addressing 2006 to start off with shows more self-awareness as to his predicament than I would have guessed.

Update: Upon reflection and re-reading, I should add that AMLO deserves some credit for tamping down on some of the potentially violent passions within his movement. All of the above remains true, however, so this is a bit like praising a weapons manufacturer for improving the safety-locks while fueling an arms race.

Sunday, December 18, 2011

Romney's Description of the Honduras Coup

This is an amusingly slanted take on the Honduran coup from the Romney campaign:
[Obama] has allowed the march of authoritarianism to go unchecked. In some cases, he has actually encouraged it, as when he publicly backed former Honduran president Manuel Zelaya — a Hugo Chavez ally — despite Zelaya’s unconstitutional attempt to extend his term as president in defiance of the Honduran supreme court and legislature.
This is all the paper has to say on the incident, so hopefully no one reading this white paper is using it as their only source of information.

Saturday, December 17, 2011

Old Pieces I Meant to Mention

Saturday catch-up:

Carlos Loret de Mola suggests that all the hullabaloo over Michoacán was a dry run at a coming attempt to invalidate the 2012 elections. His logic isn't particularly convincing--if annulment was the goal Michoacán, it didn't work. Plus, it's objectively and obviously a horrible idea for the country, for whatever that's worth. Nonetheless, he is quite connected, and therefore this scenario is a bit alarming.

This Milenio Semanal piece about the youth gangs in Monterrey is informative, but the pictures are the most memorable aspect to me. Who knew Cleveland State and died bangs were popular in the barrios of Monterrey?

Fifty-eight percent of Mexico's Senators
have abandoned their posts so as to seek positions in 2012. It's easy to be indignant about an absentee legislature, but in a country where there is no reelection and the Senate elections aren't staggered, such high figures are perhaps not inevitable, but nor are they surprising.

Pascal Beltrán del Río was impressed with the left's unity in the AMLO campaign kickoff.

Mexico's government is getting (marginally) better at bringing in increasing (though still small) quantities of tax revenue.

If the PRI Loses?

Macario Schettino's column last week wondered what would become of the party if, despite all the circumstantial advantages and despite its candidate, the PRI were unable to win in 2012:
The old president the PRI turned out to be a liar, and he is already gone. The president candidate turned out to be vulnerable. What will they do with him? Will the initial advantage be enough? Will the PRI really be able to stay united around this hope? Because if with this candidate the PRI doesn't win the election, it will have hard time continuing to exist.

Friday, December 16, 2011

On the Zetas' Breakdown in Authority

Here's a new piece at InSight:
As Borderland Beat reports, the banners, or "narcomantas," appeared on Monday morning in at least 10 different spots around the city, signed with the name of Zetas boss Miguel Angel Treviño, alias "Z-40." The messages' first paragraph declares:

We do not govern this country, nor do we have a regime; we are not terrorists or guerrillas. We concentrate on our work and the last thing we want is to have problems with any government, neither Mexico nor much less with the US.

The message went on to distance both Treviño and the Zetas from a recently uncovered alleged plot to assassinate the Saudi ambassador to the US, as well as an August attack in a Monterrey casino that killed more than 50 people. A Zetas cell has been linked to the latter incident, while the assassination plot, according to US authorities, revolved around an alleged Irani agent contracting members of the Zetas to murder the diplomat in Washington, DC.

The most recent narcomantas contradicted a series of messages left in Nuevo Laredo earlier this month, in which someone writing in Treviño’s name openly challenged the governments of the US and Mexico. As that message's authors wrote:

Not the army, not the marines nor the security and anti-drug agencies of the United States government can resist us. Mexico lives and will continue under the regime of the Zetas. Let it be clear that we are in control here and although the federal government controls other cartels, they cannot take our plazas.

This episode raises a couple of points about the current state of the Zetas. One is that the group seems to be suffering a significant amount of organizational deterioration. This is clearly demonstrated by the disdain with which the latest banners refer to the Monterrey attackers; Treviño refers to them as having “chicken brains” and emphasizes repeatedly that the attack was not ordered from above.

This conclusion is supported by the contradictory messages appearing in the same, Zeta-controlled city just weeks before. There are two possible explanations for this: either Treviño’s subordinates felt comfortable issuing a challenge in his name and without his consent, or a rival group infiltrated a Zeta stronghold and managed to hang a handful of narcomantas around town without them knowing. Neither possibility would seem to reflect a finely tuned operation humming perfectly.

More broadly, the insistence on linking capacity to violence to the strength of the group behind bloodshed is one of the frequent problems in analysis of Mexico. We all have a tendency to exaggerate the size the enemies about which we know relatively little, but so much of what we've seen from the Zetas in the past year strikes me as the behavior of a headless chicken, not a stalking lion. Of course, that distinction matters little to the people who are victimized, so perhaps the proper comparison is a stalking lion to an epileptic lion attacking people willy-nilly without any clear plan. Or maybe animal metaphors aren't really the proper approach to this issue.

Thursday, December 15, 2011

Mexico's Most Unconvetional Bishop

Gatopardo has a long profile of Raúl Vera López, the notoriously liberal bishop from Saltillo, that makes for some great reading. Highlights:
Raúl Vera has not been tortured or exiled, but he has already taken precautions: his left wrist carries a bracelet with his name, his contact information, his blood type, and his antibiotic allergies: "So that the day they shoot me they know who I am", he tells me...

Among the Rafto recipients, Raúl Vera López is famous as a night owl and partier. And it's well earned: the bishop from Saltillo feels as comfortable in the buzz of a cantina as in the silence of his recliner, and as at home celebrating mass with prostitutes on Good Friday as he is discussing dogmas of faith with theologians from around the world. He is always conversing --whether with someone else or with himself-- and for that reason the small tasks of daily life, like dressing himself or parking the car, take forever.

Tuesday, December 13, 2011

On Presidents and Books and Enrique Peña Nieto

New piece here. With regard to the last paragraph, I can't count: that number is closer to six than eight months.


Evidently, the celebration on Saturday night was just a bit too much for my weak constitution--I passed out not long after the third goal from Cesc and just woke up 20 minutes ago. Wow! Quite a game. It seems I was lucky to have Van Winkled the second leg of the Mexican final.

Saturday, December 10, 2011

On the Clásico

I recently read that Bismarck often used to, in his words, spend nights simply "hating". While I don't embrace hatred in the abstract, with the Clásico to kick off in just under six hours, I found myself filled with admiration for the master of Realpolitik. And while the hours of deep meditation on Ronaldo, Mouriño, Pepe, and every other horrible ogre taking the field in white today were quite satisfying, we also need spend some feeling the love:

That was nice. And while we are at it:

Here's a characteristically trenchant analysis of the tactical challenges for each team from Zonal Marking.

Friday, December 9, 2011

Threat to Elections

Apropos of Calderón's claim that threats from organized crime forced 50 candidates out of the Michoacán elections, I have a piece at InSight regarding the potential threats to the outcome of 2012. I focused not on the possibility that criminals could influence policy after the election, but whether they are actually capable of swinging a significant chunk of the votes, a la Michoacán (allegedly, anyway). Highlights:

However, there is reason to doubt that the presidential vote will be marred by criminal influence to the same extent as the local elections described above.

One fundamental reason is that in the three states in question, the influence of criminal groups arguably runs more deeply than anywhere else in the country. Each of them have spawned their own trafficking groups -- the Sinaloa Cartel in Sinaloa state, the Gulf Cartel (and the Zetas) in Tamaulipas, and the Familia and Caballeros Templarios in Michoacan -- which have deep ties to local business and politics. Crime hasn’t been imported from outside, but is an organic part of public life in each state, which makes it much more difficult to isolate politics from crime.

Vizcarra’s explanation for the photo with Sinaloa capo Zambada was illustrative: he didn’t deny it was real, but said it didn’t show collusion of any kind. As a rancher with ties to powerful business interests in Sinaloa, it was only natural that Vizcarra would have become acquainted with the longtime kingpin.

In some other states, even those which suffer high levels of violence, the links between drug trafficking and politics are not so inevitable, because organized crime is a comparably recent arrival. It is far less likely for criminals in, say, Queretaro or San Luis Potosi to be willing or able to exert influence over an election in the same way the Familia attempted to do in Michoacan.

For similar reasons, it is unlikely that there are photos floating around of the leading presidential candidates --Mexico State’s Enrique Peña Nieto or Tabasco’s Andres Manuel Lopez Obrador -- arm-in-arm with a wanted man.

Furthermore, the presidency is chosen by a nationwide, winner-take-all election in which some 40 million people will cast a ballot. Even in the unprecedentedly close 2006 presidential elections, the difference between Calderon and runner-up Lopez Obrador approached 250,000 votes. Against that backdrop, any drive to redirect votes from one candidate to another, even by the most powerful gangs, would almost certainly be futile.

Thursday, December 8, 2011

Un Guerrero Nunca Muere, Says the Slogan. That's Great, But Hopefully He Can Also Bring Home a Title.

Santos has once again reached the final of the Liguilla, for the third time in four tournaments, and therefore the third time in two years. Hopefully, they can avoid the pattern of heartbreak of the previous two.

The opponent is Tigres of Monterrey, who employs Carlos Salcido and Jonathan Bornstein. In the few games of theirs I have seen, Tigres have been horribly boring and very stingy on the defensive side, which probably has a good bit to do with Bornstein not playing. Santos provides quite a contrast; they light it up.

The Joke Parade

Here's AMLO poking fun at Peña Nieto's book blunder:
Toward the end, he invited Peña Nieto to take a reading workshop: “Paco Ignacio Taibo II has a a workshop to foster reading. I think that, with all due respect to Paco Ignacio, he could invite Peña Nieto to participate in the workshop", joked the Tabascab, who then said, "What reading doesn't give you, marketing can't provide".
I expect another six million comments in that vein over the next several weeks.

This horrible week of Peña Nieto is further evidence of how much the PAN is screwing up their nomination process. Right now, most of the people who are both leaning toward Peña Nieto and horribly offended by his callous daughter and his demonstrated disinterest in book-learnin' have a few options: they can either drop out of the election, shift their support toward AMLO, or hold their nose and continue supporting Peña Nieto. They cannot, however, latch on to the PAN alternative, because there isn't one yet. If Vázquez Mota were already the candidate, she could be using this to slam Peña Nieto and make herself seem comparatively smarter and appealing and all that crap that political consultants surely talk about in meetings, but in February, this will be a distant memory. All of the negative Peña Nieto energy from this episode will have dissipated, with no boost to the PAN.

Wednesday, December 7, 2011

Not a War

I have a new piece at Este País on the problems that occur when you take the war metaphor for Mexican insecurity too far. Highlights:

Así pues las conclusiones de RAND serían mucho más preocupantes si México de verdad sufriera de una insurgencia. Ante la coyuntura actual, decir que México está en el lado equivocado de 13 de 27 factores insurgentes es igual que decir que Chivas de Guadalajara está bien puesto para competir con los mejores equipos de básquetbol en el mundo; puede ser un dato interesante, pero como Chivas juega fútbol, es completamente irrelevante a su propósito y agrega muy poco al análisis de su capacidad.

I also mention the effort to bring a case against Calderón in the ICC, which frankly I don't think a whole lot of. However, I feel obligated to add that the administration's response, that it will consider legal action against those behind the movement, is utterly indefensible. It smacks of authoritarianism and is politically stupid, in that it makes him rather than his accusers look like the spaz with no sense of proportion. I don't know if the long presidency has sapped Calderón's common sense, but he's a veteran politician, and obviously he should know that virulent, even hysterical, criticism comes with the territory. Somehow, he's forgotten that.

Monday, December 5, 2011

Ball on the Clásico

Just five days away, I am already bubbling over with emotion. All I can think to write is "Please, please, please win Barça", so I'll cede the floor to Phil Ball:

Next week the Clasico will play on these emotions, but in a rather more nationally-focused fashion. The eternally wonderful thing about these games is that every one is slightly different, each one bringing its own particular set of contexts and circumstances to the stage. This time around, the difference is that the usual yin-yang nature of the two clubs' situations - whilst one is up the other tends to be down - is not the case at all. This is the first time for several seasons that I can recall a Clasico where both teams are frothing at the mouth with their own possibilities. Real Madrid's unquestionable improvement over the last year or so cannot be allowed to foreshadow Barcelona's continued excellence. Their home record is simply without precedent. Nine games played, 39 goals scored and none conceded. It would seem inhuman if it weren't for the relative contrast with their away record, with eight goals scored and seven conceded. Real Madrid will have taken note, as will have most of the Iberian Peninsula.


Barcelona brought forward their game with Rayo Vallecano in midweek, and have thus reduced Madrid's lead to three points, but have played a game more. They know that defeat in the Bernabeu could condemn them, after Christmas, to a nine-point gap whose psychological effects might cause difficulties for certain members of the Barcelona squad, accustomed as they have grown to always being ahead. I only suggest this as a possibility. It may motivate them to perform even better, but the discourse in Spain has changed. Mourinho is deliberately remaining quiet, since he knows, for the first time since he trod Spanish soil, that his project is bearing fruit and that his team may be about to dethrone their eternal rivals. The change of the guard might be upon us, or not. It's going to be a fascinating game, but Mourinho's non-provocative silence is an implicit message of his confidence. He only stirs it up when he's feeling a bit uncomfortable.

Complications in Sinaloa

I have a partial translation at InSight Crime of a Ríodoce report on the Zetas' incursions into Sinaloa. Highlights:
The suspicions of the government regarding the “presence in Culiacan of a large group of Zetas” was confirmed on November 4 when a narco commando unit murdered eight people on a volleyball court in the Colonia Pemex.

Although they don’t specify how many there are nor in what areas of Culiacan they operate, the 9th Military Zone, in coordination with the Elite Group [a specialized unit of the state police] and the Mixed Urban Operation Bases implemented a perimeter around the limits of the state capital towards the beginning of November so as to prevent the entrance of more Zetas. Nevertheless, the gunmen managed to slip through to the capital.

On November 24, reacting to 24 murders ocurred a day earlier, including the 16 burned bodies, the governor confirmed that “we all know that here the Pacific Cartel [an alternative name for the Sinaloa Cartel] operates and that there are other cartels or local cells that are allied with some of the Zetas, the Beltran Levyas, the Carrillos, that are in conflict ... It’s a product of groups, messages that are sent, that no one is strong or protected enough to prevent all incursions,” he said.


In Culiacan, a city previously not included in public security operations by state and federal police, some 300 soldiers were mobilized. Since the afternoon of November 23 they have patrolled the zones considered the most troubled and installed checkpoints in strategic locations.

In some cases, such as in the boroughs of Angostura, Salvador Alvarado and Guasave, the mayors were “advised” to tell the population to exercise precaution. One of the suggestions was to avoid being out on the streets, highways, or roadways after eight at night.

It was reported that in the community of Palmitas, in the city of Angostura, a commando unit that on Monday in the middle of the night kidnapped three police officers whose burnt bodies appeared in Culiacan on Wednesday morning, left a message threatening the residents that they would have the same luck if they were found outside of their houses at night.

Troublesome Tweets

Enrique Peña Nieto's 16-year-old daughter's Twitter account earned some attention for the following retweet:
She, or more likely he, has since closed the account. Personally I think we should make all the candidates and their family members tweet a "saludo a la bola de pendejos, que..." and then just see how they finish the thought. It could be more illuminating than a debate.

Friday, December 2, 2011

Rolling Stone Spanish Edition, You Are Just Terrible

What the hell is this?!?!Oh how I hope Barça drops another manita on them. Or rather him. Animus aside, I am looking forward to the eventual breakup once he leaves Real. I figure the leaks to the media will be five times juicier than they were at Chelsea.

Cotto-Margarito II

Cotto's loss to Margarito was one of the greater disappointments of spectating life. That night, I also also came away with food poisoning and had an enormous fight with my then-girlfriend, so really I think it is in the running for one of the worst days of my entire life, at least in the "long-term triviality" category. Since then, however, my stomach has bounced back like a champ, and I married the woman who had me so agitated, which is to say, I have addressed two of the three traumas that ruined what should have been a fantastic summer night out on the town. One remains: Cotto needs to whoop up Tony Tornado this Saturday.

Here is what appears to be the most entertaining part from their press conference:
Miguel Cotto, with an elegant gray suit, waited his turn at the microphone and answered, "Take a dictionary and see what 'criminal' means, it's someone who uses a weapon to hard someone else and you with your illegal handwraps are a disgrace for the boxing world."
Also, Eric Raskin's meditation on boxing and violence captures my ambivalence as a fan quite nicely. It's really a fantastic piece.

A Skeptical Take on Money-Laundering

A new piece here for InSight:
Neither Mexico nor the U.S. government has adequately defined the goal of AML: is it to reduce the amount of revenues, or is it to dismantle existing gangs?

If it is merely to reduce the profits, it’s worth noting once again the tiny size of the amounts seized thus far. Is the legislation being proposed going to lead to exponentially larger amounts of dirty cash being seized? The seems an unlikely result. This doesn’t make stricter AML laws a bad idea, but government officials and analysts alike would do well to temper their enthusiasm and weigh the potential benefits against the costs to the legitimate economy.

If the primary goal is to dismantle existing groups, then the question becomes whether AML is successful where other law enforcement tactics -- infiltrating smuggling networks, electronic surveillance, etc. -- fail to bring about a criminal group’s demise. While there may be some isolated instances of this dynamic, they are the exception rather than the rule. In any event, no one arguing for stronger AML provisions is making this case.

An alternative argument for AML laws is that captured criminals and their families should be prevented from enjoying ill-gotten wealth. This may be valid, but it means that attacking dirty money is essentially an after-the-fact, punitive measure rather than the head of the law enforcement spear.

Many analysts point to crackdowns on terrorist financing as evidence of the AML’s potential for organized crime, but there is an important difference between the two: money is a terrorist group’s means to the end, i.e. launching terrorist attacks. Governments do not worry about terrorist groups having large bank accounts, per se, but rather about them being more able to carry out attacks on civilians. AML efforts reduce the ability of terrorist groups to kill civilians, even if they don’t necessarily lead to prosecutions.

The dynamic with organized crime groups is fundamentally different. A large bank account is the end in and of itself for a capo like Joaquin Guzman, alias "El Chapo." Therefore, attacking his assets doesn’t reduce his ability to harm society the way it does for a terrorist boss. If anything, in fact, it does the opposite; a capo could very well compensate for a marginal reduction in his profits by ramping up production of illegal drugs and flooding the market with more merchandise.

Also, Steve Dudley has an engrossing account of a virtual kidnapping.