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By MARK STEVENSON, Associated Press Writer Mark Stevenson, Associated Press
Writer Mon Aug 17, 12:00 am ET
CIUDAD HIDALGO, Mexico Shopkeepers in this pine-covered mountain region
easily recite the list of "protection" fees they pay to La Familia drug cartel
to stay in business: 100 pesos a month for a stall in a street market, 30,000
pesos for an auto dealership or construction-supply firm.
First offense for nonpayment: a severe beating. Those who keep ignoring the
fees or try to charge their own may pay with their lives.
"Every day you can see the people they have beaten up being taken to the IMSS,"
said auto mechanic Jesus Hernandez, motioning to the government-run hospital a
few doors from his repair shop.
Mexican drug cartels have morphed into full-scale mafias, running extortion and
protection rackets and trafficking everything from people to pirated DVDs. As
once-lucrative cocaine profits have fallen and U.S. and Mexican authorities
crack down on all drug trafficking to the U.S., gangs are branching into new
ventures some easier and more profitable than drugs.
The expansion has major implications as President Felipe Calderon continues his
2 1/2-year-old drug war, which has killed more than 11,000 people and turned
formerly tranquil rural towns such as Ciudad Hidalgo into major battlefronts.
Organized crime is seeping into Mexican society in ways not seen before, making
it ever more difficult to combat. Besides controlling businesses, cartels
provide jobs and social services where government has failed.
"Today, the traffickers have big companies, education, careers," said
Congresswoman Yudit del Rincon of Sinaloa state, which has long been controlled
by the cartel of the same name. "They're businessman of the year, they even
head up social causes and charitable foundations."
Local officials say they do not have the manpower to investigate cartel rackets
and refer such cases to the state, which hands them over to overloaded federal
agents because organized crime is a federal offense. A federal police report
released in April notes that often no one confronts the cartels, "not the
police, because in many cases there is probably corruption, and not the public,
because they live in terror."
After media reports questioned whether Mexico was becoming a failed state,
Calderon insisted to The Associated Press in February that his country is in
the hands of Mexican authorities.
"Even me, as president, I can visit any single point of the territory," he
said. He has since sent 5,500 extra military and police officers to fight drug
lords in Michoacan his home state.
But in Ciudad Hidalgo and neighboring Zitacuaro, mayors have been jailed and
charged with working for La Familia cartel, which controls swaths of central
and western Mexico. Cadillac Escalades and Lincoln Navigators with low tires
and chrome rims patrol the streets of Zitacuaro, even as trucks of army troops
roll past.
In the Michoacan mountain town of Arteaga, La Familia boss Servando Gomez
Martinez is revered for giving townspeople money for food, clothing and even
medical care.
"He is a country man just like us, who wears huaraches," a farmer said of one
of Mexico's most-wanted drug lords, pointing to his own open-toed leather
sandals. He asked that his name not be used for fear of retaliation.
"It's almost like Chicago, when Al Capone ruled everything," said a senior U.S.
law enforcement official who was not authorized to be quoted by name. "They
control everything from the shoeshine boy to the taxi driver."
Mexican cartels gained their dominance in drug trafficking in the mid-1980s,
when U.S. drug agents and the Colombian government cracked down on Colombian
cartels and drug routes through the Caribbean. The vast majority of cocaine
headed to the U.S. started going through Mexico.
In the meantime, trade in pirated and other smuggled goods in Mexico
traditionally was carried out by small gangs centered around extended families
or neighborhood rings.
In the last five to 10 years, Mexican cartels created domestic drug markets and
carved out local territories, using a quasi-corporate structure, firepower and
gangs of hit men to control other illicit trades as well. Federal prosecutors
now call them "organized crime syndicates" and say their tactics such as
charging a "turf tax" to do business in their territory mirror the Italian
mafia.
"They adopt a business model as if they were franchises, except they are
characterized by violence," according to a federal police briefing report.
In June, soldiers in the northern city of Monterrey caught members of the Zetas
cartel producing and distributing pirated DVDs and controlling street vendors
with protection fees.
Also in Monterrey, top Gulf cartel lieutenant Sigifrido Najera Talamantes ran
kidnapping and extortion rings while trafficking migrants and crude oil stolen
from the pipelines of Mexico's state-owned oil company, Pemex, according to the
army.
Najera Talamantes, who was arrested in March, allegedly charged migrant
smugglers to pass through his territory, took a cut from street vendors and
oversaw trafficking in stolen goods, said Army Gen. Luis Arturo Oliver.
In Durango state, residents of Cuencame dug ditches around their town earlier
this year to keep out roving bands of drug hit men kidnapping people at will.
"Even with the ditches, they still came in and kidnapped five people," said a
Cuencame official who asked his name not be used for fear of retaliation.
In late 2008, almost all the betting parlors in the border state of Tamaulipas
closed because of demands for protection money, according to Alfonso Perez, the
head of the Mexican association of betting parlors.
In northern states such as Chihuahua and Tamaulipas, cartels also are blamed
for businesses closing or burning if they don't pay protection fees.
Last year, mayors of more than a dozen towns throughout the state of Mexico
received threatening phone calls demanding that $10,000 to $50,000 be deposited
in bank accounts. State investigators say many of the threats mentioned links
to the Gulf cartel.
Salvador Vergara, mayor of the resort town of Ixtapan de la Sal, received
threats and was shot to death in October. State authorities believe that he
didn't pay and refused to allow gangs to operate in his township.
Families in parts of the central state of Zacatecas went without cooking gas
for several days in January, after gangs demanded protection fees of the
gas-delivery trucks, and drivers refused to make their rounds. Deliveries
resumed only after the state government increased security patrols on the local
roads.
Extortion threats reported to federal police skyrocketed from about 50 in 2002
to about 50,000 in 2008, according to Public Safety Secretary Genaro Garcia
Luna. Because of the spike, the Mexican government this year launched a
nationwide anti-extortion program, creating a national database to track
protection rackets and promising to protect even business owners too scared to
file formal complaint.
While the results of the new complaint system are still meager, the government
recently moved to go after cartel finances. In April, Congress approved a law
allowing the government to seize properties and money from suspected drug
traffickers and other criminals before they are convicted. In the past,
suspects had to be convicted before their property could be seized, and trials
often last years in Mexico.
Still, the gangs have created elaborate systems to avoid property seizures and
to move money quickly through store-front check-cashing and wire-transfer
services, according to federal police. And they have become so omnipresent that
they take a cut of almost every transaction in some areas.
Javier, the owner of a small video store in Ciudad Hidalgo, got so fed up with
La Familia controlling his town, he decided to sell his house and sent his two
daughters to live in another state. His business had withered from the
competition of street vendors selling pirated DVDs for La Familia.
But when he put his two-story, 1930s-era home up for sale, he got a phone call
from the cartel.
"Putting up a 'for sale' sign is like sending them an invitation," said Javier,
who asked that his last name not be used for fear of retaliation. "They call
and say, 'How much are you selling for? Give me 20 percent.' "