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Mexico cartels go from drugs to full-scale mafias

2009-08-17 06:08:02

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.' "