The Colima cartel was not the only one producing methamphetamine for the group of organizations known as the Sinaloa cartel or the Sinaloa federation. Guadalajara-based Sinaloa cartel lieutenant Ignacio "El Nacho" Coronel Villarreal became known as the "King of Crystal" due to the huge quantities of methamphetamine his organization produced. Unlike cocaine, which Mexican cartels had to purchase from South American producers, they could manufacture methamphetamine themselves from readily available, dual-use chemicals. This meant that their profit margin on a kilogram of methamphetamine was much higher than it was for a kilogram of cocaine. As a bonus they could keep the lion's share of the profits rather than share them with South American producers and Central American middlemen.
And then there's the ease of making methamphetamine: so long as one has access to the precursor chemicals it's possible to produce the drug anytime, anywhere. Indeed authorities have discovered methamphetamine labs in residential neighborhoods, remote mountain hollows and modern industrial parks; there is also no growing season and no need for a particular climate or large fields of exposed plants. Producing methamphetamine is also far less labor-intensive than either heroin or cocaine, which requires people to harvest the opium gum or coca leaves….
It's no surprise that the two largest and most powerful cartels in Mexico today, the Sinaloa cartel and the Jalisco New Generation Cartel (CJNG), became involved in the methamphetamine trade early — even as they continued to move cocaine, heroin and other drugs. Groups that had strong connections with Chinese chemical providers and who could facilitate and control the flow of such chemicals through Mexican ports, for instance, also developed an advantage over their competitors….
But there's another factor that has resulted in more methamphetamine flowing into the United States from Mexico: cartel dynamics. The CJNG split from the Sinaloa cartel over the belief that Joaquin "El Chapo" Guzman Loera was involved in the death of Coronel in July 2010 because of his jealousy over Coronel's growing power stemming from the booming methamphetamine trade. Whether the motivating factor was true or not, Coronel's followers left Sinaloa and created the CJNG. This process of fragmentation, which we've long referred to as the "Balkanization" of the Mexican cartels, has resulted in many more independent groups than there were two or three decades ago. This means that there are more independent organizations attempting to profit from the drug trade in general and methamphetamine in particular. Today nearly every cartel organization in Mexico is either manufacturing methamphetamine or buying and smuggling the drug to sell at a profit in the United States….
With such a huge supply of top-notch methamphetamine, Mexican suppliers are also looking for new markets. In June, CBP officers discovered 1,728 kilograms of Mexican methamphetamine at the Port of Long Beach concealed in a shipment of speakers destined for Australia. This set a record for the largest single seizure of methamphetamine inside the United States but was just the largest of several more that demonstrated how Mexican cartels are attempting to smuggle their product into the lucrative drug markets of Australia and New Zealand. https://worldview.stratfor.com/article/cartel-connection-meth-americas-streets-drugs-dea
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10-7-2019 Despite the hopes following the election of an anti-corruption, socialist president, Andrés Manuel López Obrador (known as ‘AMLO’), the death toll rose to more than 30,000 in 2018.
Since its dawn in the early 2000s the war has now taken the lives of almost 200,000 Mexicans, most of the victims from ordinary working class families, caught at the wrong place at the wrong time. It has been fueled by billions of dollars in annual revenue for the cartels, and by waves of firearms spilling south over the U.S. border.
To better understand the complexities of the Mexican crime war VICE sat down with narco-journalist
IG: …the Jalisco New Generation Cartel based out of Guadalajara; then there’s Los Zetas, the first paramilitary cartel, who have now split into factions; and the Gulf Cartel in Tamaulipas and Veracruz; the Juarez Cartel; and the Tijuana Cartel. Then we come to the smaller cartels, the cartelitos: the Guerreros Unidos, Los Rojos, Los Caballeros Templarios, and La Familia Michoacán. There are dozens of these.
How wide are their operations?
Oh, they are worldwide. The largest cartels have envoys everywhere. There’s a big presence in the U.S., the Caribbean, and South America, but they are also active in Britain, mainland Europe, China, even Russia.
How did the cartels seize the control we see them exercising today?
There’s no single watershed moment, but the breakdown of the PRI’s (Institutional Revolutionary Party) one party rule was a big factor as it fractured communication between municipal police forces. What was a stable system of top-down, endemic corruption suddenly became an unstable system of bottom-up, endemic corruption.
Another factor was the re-routing of the cocaine as it came into the U.S. After Reagan clamped down on the Caribbean route into Miami, cocaine started to stream through central America into Mexico, which became the final strait. After that the cartels began purchasing the cocaine directly from the Colombians at the border and selling it on. Before that, cartels were known as ‘plazas,' headed by plaza bosses and operating more locally—usually paid off with a cut of the drugs they were trafficking. Then with more money came more violence for control of that money.
Is it just about cocaine and other drugs, or are there other significant revenues?
Concerning narcotics there are five main products. The first is marijuana, a big cash crop. It’s inexpensive to manufacture and fetches a decent profit margin. However, legalization in the U.S. is damaging its reach. The second is cocaine, traditionally most profitable. A kilo of pure cocaine can be bought by cartels at the border for as little as $2,000 and sold for a huge markup. Then there’s heroin, which is now largely cultivated in Mexico. If you buy a wrap of heroin in Baltimore today, chances are it’s made in Mexico. Fourth, there’s methamphetamine, which ripped through Mexico after the 2005 Combat Methamphetamine Act in the U.S. And recently we’ve been seeing fentanyl being made in Mexico. This is a seriously dangerous opioid, responsible for tens of thousands of overdose deaths.
However, on top of the drugs there’s anything and everything else. Stealing crude oil is big business for oil racketeers known as huachicoleros, and other revenue comes from capturing agricultural plantations—avocados and limes, illegal iron mining, illegal logging. And there are the repugnant practices of people-smuggling and people trafficking.
Do you know how much overall revenue comes from all of this? And where it goes?
It’s impossible to know. However, the Rand Drug Policy Research Center estimated the U.S. spends $150 billion per year on illegal drugs. Obviously much of that will not get to Mexico, as the biggest markups come from the street-selling level. Some of this money goes towards material wealth for the cartels and their lieutenants. But an enormous amount is laundered via U.S. banks particularly in Texas and through tax havens like Panama. Money is also laundered through real estate and shell companies all over the world.
Can you describe the process in which people get involved with the cartels?
It starts with an absence of government, an absence of wealth, and an absence of family. With these three things, and the pull of easy money from (at first) petty crime, kids get involved. It usually starts with street gangs, then kids will be given a phone, a $50 weekly salary and told to stand guard on the corner as a kind of sentry, a halcón, before they’re moved to higher forms of crime, be it moving drugs or la sicariato (hitmen). And then the police are an active arm of the cartels in many areas.
When you investigate in these dangerous areas do you tell people you’re a journalist?
Yes, always. I don’t want anyone to think I’m working for a rival cartel or DEA….
Would you halt the flow of guns into Mexico from the U.S.?
I would try. Most of the guns used by the cartels are purchased in the U.S. I don’t see banning guns in the U.S. as realistic, but there are many other steps you can take. We need to reduce the number of guns coming into Mexico. https://www.vice.com/en_us/article/vb5yya/reporting-on-mexican-drug-war-ioan-grillo
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