Mexico

[Crafty_Dog]

Mexico's Election Spurs Policy Shifts
 

Summary
 



Though fierce intraparty fighting over the details of major reforms affecting labor, energy and politics will continue, the potential is emerging for negotiated agreements among Mexico's three major parties. Mexico's legislature has seen a flurry of activity on questions affecting the Mexican economy since the Institutional Revolutionary Party's candidate, former Mexico State Gov. Enrique Pena Nieto, won Mexico's July presidential election. The Chamber of Deputies has since passed major labor reforms -- reforms the Senate is likely to approve by Nov. 1. This represents a level of cooperation on policy issues absent for several years as Mexican politicians remained deadlocked over policy changes to deprive rival parties of any political advantage ahead of the 2012 elections. The new dynamic should continue for several years into Pena Nieto's administration, during which time the government will tackle major questions that will shape Mexico's economic and political future.
 


Analysis
 
The Mexican Senate is currently debating a bill already approved by the Chamber of Deputies that would make important changes to Mexico's labor laws. The changes would update labor regulations for the first time since the 1970s, introducing more modern protections for workers while easing the burden that outdated labor laws place on employers in Mexico. The legislation stops short of changing Mexico's complex constitutional labor strictures, instead focusing on changing laws, which can be altered more easily. The difficulty of changing the constitution means major union reforms have been postponed.
 
Although there are disagreements on the details of how reform should be implemented, a consensus has emerged that a host of major reforms are needed. Although Mexico is already in an advantageous position given its proximity to the U.S. consumer market, labor reforms should make it even easier for Mexico to attract foreign investment. With wages rising in China's coastal manufacturing zones, low-to-medium end manufacturing firms are looking for more cost-effective locations. Some of this investment is moving into the Chinese interior, but much is moving into emerging economies all over the world, including Mexico. The Mexican government has made strong efforts to attract such investment, efforts that the new administration will redouble -- making this a moment of strategic significance for Mexico.
 
Among other reforms, some of which are highly controversial, the changes would allow companies to hire and fire employees more easily. Regulations on severance pay would be loosened, with employers no longer required to guarantee payouts to employees fired for violating workplace standards. On the flipside, the law will also increase penalties on companies that violate labor regulations and will establish protection from sexual harassment for workers. Another important reform would allow companies to offer performance-based promotions instead of purely seniority-based promotions and to grant performance-based bonuses. 

 






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One important area still under heated negotiation relates to regulations that would alter the way unions elect their leadership. In initial discussions, the National Action Party of outgoing Mexican President Felipe Calderon had proposed that unions be required to elect their leadership via free, direct and secret ballot processes. The laws currently under discussion, however, would permit unions to set their own leadership election processes. The Institutional Revolutionary Party, which historically has had close ties to Mexico's unions, backed the withdrawal of union transparency regulations. 


 
As the party that ruled Mexico for 70 years, the Institutional Revolutionary Party was instrumental in shaping Mexico's political landscape. With little in the way of competition among political parties, it operated as the political power broker, building corporatist structures over time that bound Mexico's many social and economic sectors together. This policy of inclusive politics played an important role in keeping Mexico relatively stable for decades. The rise of secondary parties and political competition, including the National Action Party on the right and the Revolutionary Democratic Party on the left, during the 1990s led to National Action Party candidate Vicente Fox's 2000 presidential win. This altered the political landscape in Mexico, introducing greater political competition and in many cases, political deadlock, as the parties competed for influence across Mexican society. 


 
Though Mexican politics is more pluralistic than before the National Action Party first won the presidency, key aspects of Institutional Revolutionary Party influence remain, such as its links to the country's powerful unions. These include the Mexican National Education Workers' Union, whose leader, Elba Esther, backed Pena Nieto ahead of the July election. They also include the powerful Petroleos Mexicanos oil workers' union, whose leader was recently elected to the Mexican Senate as a member of the Institutional Revolutionary Party.
 
Energy and Democratic Reforms

 
Beyond labor, the increase in dynamism in Mexican politics means that Mexican parties may be able to make significant changes on other major issues. Energy reform is the most important issue the country faces. Petroleum output, which funds between 30 percent and 40 percent of Mexico's federal budget and accounts for 16 percent of Mexico's export revenue, has been steadily declining. Oil production slipped from 3.8 million barrels per day in 2004 to 3 million barrels per day in 2011. Although exploration has increased, Petroleos Mexicanos will need significant foreign expertise and capital to find and develop fields, which most likely will be concentrated offshore. This could take years to yield results, leaving Mexico's government facing an uncertain fiscal future.
 
The main steps needed to reform Mexico's energy sector would entail revising the constitution, for which the Institutional Revolutionary Party would need to garner support from at least two-thirds of the Senate and the Chamber of Deputies plus the approval of a majority of Mexico's state legislatures. But the Institutional Revolutionary Party did not win even a simple majority of federal legislature seats in the July elections. If it can obtain votes from the National Action Party along with those of two smaller parties (Mexico's Green Party and the New Alliance Party), constitutional approval at the federal level still could be possible. With 19 out of 31 governorships, the Institutional Revolutionary Party might also be able to push through the constitutional revision at the state level. Accomplishing both of these steps will not be easy, meaning the party probably will focus most of its efforts on non-constitutional legal reforms that require only a simple majority at the federal level.
 
Other more obscure, but equally important, reforms could be on the table, including measures loosening term limits. This would represent a major change to Mexico's political structure. By giving them a chance to win re-election, Mexican legislators might become more accountable to voters. It also would introduce more continuity to the political system, facilitating Mexico's transition to a democratic system for decades to come.
 
Whether any of these changes comes to pass depends on negotiations among a group of notoriously fractious parties. Still, with the electoral calendar cleared for the next three years and the Institutional Revolutionary Party holding the presidency, the next several years should see important shifts in how Mexico operates.
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Read more: Mexico's Election Spurs Policy Shifts | Stratfor

[Crafty_Dog]

Mexico Security Memo: The Death of Los Zetas' Top Leader
October 10, 2012 | 1015 GMT
Stratfor
 
On Oct. 8, the Mexican navy reported that Los Zetas leader Heriberto "El Lazca" Lazcano Lazcano was one of two men killed in a shootout Oct. 7 in Progreso, Coahuila state. After Progreso residents warned of organized crime activity, navy elements began patrolling the area and were attacked by armed men.
 
Less than 24 hours later, during the early morning hours of Oct. 8, the presumed body of Lazcano was stolen from a funeral home in Sabinas, Coahuila state. Local authorities reportedly had conducted preliminary forensics, including taking photographs and fingerprints. The fact that the navy allowed local authorities to conduct verification and did not protect the body is certainly anomalous. Also, Lazcano's biometrics according to the U.S. Department of Justice do not match those of the dead body. The Department of Justice reports that Lazcano is 5 feet 8 inches tall, but the Mexican navy said the body was 5 feet 2 inches tall. With discrepancies in reporting and the disappearance of the body, speculation over whether Lazcano is truly dead will likely ensue. However, given Los Zetas' resiliency after past leadership losses and the transition in top leadership from Lazcano to Miguel "Z-40" Trevino Morales, there will not likely be any significant setbacks in Los Zetas' operations, regardless of whether Lazcano was killed.

Because ex-military personnel formed Los Zetas, members tend to move up in the group's hierarchy through merit rather than through familial connections, and members are groomed to step into leadership when the need arises. This contrasts starkly with the culture of other cartels, including the Sinaloa Federation. Because of its relative meritocracy, Los Zetas are somewhat more prepared for loss of significant leaders. The transition in leadership from Lazcano to Trevino demonstrates the group's efficiency in replacing top leadership. While it is still not certain whether Lazcano resisted Trevino's ascending to the top role within the organization, the transition did not hinder the organization significantly.
 
Whether Lazcano died during the shootout with the Mexican military, Los Zetas operations will continue as observed in recent months. The flow of illicit drugs into the United States from Mexico's northeastern region will continue, particularly in Los Zetas' most valued plaza of Nuevo Laredo, Tamaulipas state. Los Zetas are still engaged in violent turf wars with the Gulf cartel and remnants of Velazquez's network in the northeast and with the Sinaloa Federation, the Knights Templar and Cartel de Jalisco Nueva Generacion in the central states, most notably in Guadalajara, Jalisco state. Lazcano's death could escalate violence in Zetas-controlled territories, such as Coahuila state, should they retaliate for the loss of such an influential figure or perceive a betrayal from within the organization.
 
If the Mexican navy's claims are accurate, the death of Lazcano would solidify Trevino's top leadership role within Los Zetas. However, Lazcano's death will likely increase law enforcement and military pressure on Trevino. Having removed Lazcano, both Mexican and U.S. authorities will have the opportunity to increase focus on Los Zetas' top leaders, and Trevino is now the highest-profile target within the organization.
 
Editor's Note: We now offer the daily Mexico Security Monitor, an additional custom intelligence service geared toward organizations with operations or interests in the region, designed to provide more detailed and in-depth coverage of the situation. To learn more about this new fee-based custom service, visit www.stratfor.com/msm.
 
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Read more: Mexico Security Memo: The Death of Los Zetas' Top Leader | Stratfor

[DDF]

http://www.blogdelnarco.com/2012/10/no-era-el-el-z-42-el-abatido-en-zacatecas-era-el-comandante-king-kong/#more-16051

[Crafty_Dog]

Editor's Note: In this interim report on Mexico's drug cartels, we assess important developments in the drug war during the third quarter of 2012 and explain what they could mean for the rest of the year.
 
Many of the broader trends discussed in our annual and quarterly cartel updates continued through the third quarter. In particular, the polarized nationwide conflict between Los Zetas and the Sinaloa Federation apparently went on. This conflict could be complicated if the Cartel de Jalisco Nueva Generacion, once under the control of the Sinaloa Federation, was to act independently. Los Zetas, now led by Miguel "Z-40" Trevino Morales, continued to fight against other criminal organizations aligned with the Sinaloa Federation, namely the Knights Templar, Cartel de Jalisco Nueva Generacion and the Gulf cartel. The Sinaloa Federation continued to defend its strongholds, including northern Sinaloa state and Jalisco state, from Los Zetas and Zetas allies. The third quarter saw no new turf wars, but incursions that began in previous quarters continued, and indicators of a potential challenge to the Sinaloa Federation in northern Sonora state emerged from an unidentified organization.
 
Northeastern Mexico saw significant upheaval during the past quarter due to several key events within Los Zetas and the Gulf cartel. These events included some of the most notable operations by Mexico's law enforcement and military since the December 2009 killing of top Beltran Leyva Organization leader Arturo Beltran Leyva. With just one quarter of 2012 remaining, overall levels of violence in Mexico look set to be lower than in 2011. January through August 2012 saw 14,070 homicides compared to 15,331 homicides during the same period in 2011, though 2010 saw just 11,942 reported homicides during the same period. Recent shifts involving Los Zetas and the Gulf cartel, Cartel de Jalisco Nueva Generacion and the Knights Templar, however, could cause the rate of violence to increase during the fourth quarter.
 

The quarter will also see the inauguration of Mexico's next president, Enrique Pena Nieto, on Dec. 1. Pena Nieto has discussed plans to reduce overall violence by 50 percent in the first year of his presidency by creating a national gendarmerie, transferring military troops to the federal police and honing the military's focus on violent crimes. Whether those plans will be pursued remains to be seen, and any significant shifts in military and law enforcement policies probably will not occur until 2013.
 
The Rise of Trevino and Demise of Lazcano
 
During the third quarter, the ascendancy of Miguel "Z-40" Trevino Morales, formerly the second in command of Los Zetas, to the top spot over Heriberto "El Lazca" Lazcano Lazcano became public. Trevino likely assumed control over the course of the first half of 2012. In the first quarter of 2012, Trevino became the focus of anti-Zetas messages posted by rival cartels, particularly in Nuevo Laredo in March. Mexican media outlets -- some citing unnamed government sources -- began referring to Trevino as the new leader of Los Zetas during August. As Stratfor sources confirmed during the third quarter, Trevino had surpassed Lazcano to attain control of one of Mexico's pre-eminent cartels.
 
Government officials and media outlets began reporting on a rivalry between the two top leaders in July, a rift that inevitably would have significant repercussions for the security situation throughout Mexico. The third quarter did not see the kind of violence one would expect when two top cartel leaders were engaged in open warfare, causing Stratfor to discount claims of their rivalry.
 






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 Adding to our doubts about the reports, narcomantas were posted in Zacatecas, San Luis Potosi and Tamaulipas states during June and July, after former Zetas plaza boss Ivan "El Taliban" Velazquez Caballero split from Los Zetas to ally with Los Zetas' principle enemy in the northeast, the Gulf cartel. These banners called Lazcano and Trevino traitors to Zetas plaza bosses. This suggested that rivals, possibly including Velazquez, saw Trevino and Lazcano as enemies, contradicting media reports that the organization was split into just two factions.
 
Whether a split between Lazcano and Trevino existed, the death of Lazcano on Oct. 7 in Progreso, Coahuila state, solidified Trevino's position within Los Zetas. His killing marks the most notable demise of a criminal leader in Mexico in almost three years, and perhaps the most notable during the entire Calderon presidency.
 
For the remaining quarter of 2012, the flow of illicit drugs into the United States from Los Zetas' stronghold in northeastern Mexico will continue. The fourth quarter could also see increased violence. Lazcano's closest supporters will seek revenge for their leader's killing, whether against the navy elements who took part in his death or against any perceived as traitors who led Mexican forces to Lazcano.
 
Rival groups could attempt to capitalize on Lazcano's death through an information operations campaign designed to subvert Los Zetas' organizational structure by portraying the group as weakened or by sowing distrust by emphasizing claims that Lazcano was betrayed. Either way, Los Zetas remain engaged in violent turf wars with the Gulf cartel and remnants of Velazquez's network in the northeast as well as with the Sinaloa Federation, the Knights Templar and Cartel de Jalisco Nueva Generacion in the central states, most notably in Guadalajara, Jalisco state.
 
Other Developments Regarding Los Zetas
 
Los Zetas experienced the most tumultuous quarter of all of Mexico's cartels. Former Zetas plaza boss Ivan "El Taliban" Velazquez Caballero declared war against Trevino and Los Zetas and announced his alliance with the Knights Templar and the Gulf cartel. The resulting split drastically increased violence in Zacatecas and San Luis Potosi states. Although the Mexican navy arrested Velazquez on Sept. 26 in San Luis Potosi state, we expect the violence in the states affected by his split to continue while Los Zetas battle remnants of Velazquez's network.
 
Though other notable arrests occurred during the quarter, such as that of Salvador Alfonso "El Ardilla" Martinez Escobedo on Oct. 6 in Nuevo Laredo, none will significantly impact the organization. Authorities attribute a series of high-profile crimes to Martinez, including the August 2010 killing of 72 migrants in San Fernando, Tamaulipas state, the September 2010 killing of U.S. citizen David Hartley on Falcon Lake in Texas and the September 2012 prison escape in Piedras Negras, Coahuila state.
 
Countering these setbacks, military operations and other criminal groups' actions against Los Zetas' rivals have provided significant advantages to Los Zetas. The series of military arrests of mid- to high-level Gulf cartel leaders and the arrest of senior Cartel de Jalisco Nueva Generacion leaders in Guadalajara stand out in this regard.
 
Gulf Cartel
 
During 2011, the Gulf cartel suffered from an internal rivalry between two factions known as Los Rojos and Los Metros, which suggested the group would decline in influence in 2012. Instead, a resurgence in activity directed against Los Zetas in the northeast during the second and third quarter suggested a revival in the group's fortunes. This rally led to significantly increased violence in the northeast, particularly in Tamaulipas state and Monterrey, Nuevo Leon state.
 
But during September, a series of significant Gulf cartel arrests apparently stymied the group's recovery. Mexican authorities detained the Gulf cartel plaza boss for Monterrey. Federal police arrested Juan Gabriel "El Sierra" Montes Sermeno, a plaza boss overseeing Gulf cartel operations in southern Tamaulipas state. In addition, the Mexican navy detained Mario Cardenas Guillen, brother of former top Gulf leader Osiel Cardenas Guillen, and Jorge Eduardo "El Coss" Costilla Sanchez, leader of the Gulf cartel in Tampico, Tamaulipas state. Until the death of Lazcano, this was the most significant military success for 2012.
 
Whether the cartel will continue to operate as a cohesive organization following these rapid losses is uncertain. The arrests will likely prompt further violence in the fourth quarter, since Los Zetas may capitalize on the Gulf cartel's perceived weakness and refocus their efforts on contested turf like Monterrey, Ciudad Victoria and Matamoros. The arrests also may spark additional internal rivalries for control of the organization.
 
Sinaloa Federation
 
The Sinaloa Federation saw perhaps the least change among Mexico's cartels during the third quarter. Sinaloa continues to use other criminal organizations like the Gulf cartel in Nuevo Laredo and the Knights Templar and perhaps the Cartel de Jalisco Nueva Generacion in the central states to assault and defend against their principle rival, Los Zetas. The series of Gulf cartel arrests during the third quarter will likely benefit Los Zetas at the Sinaloa Federation's expense in the northeast.
 
The Sinaloa Federation continues largely to control the lucrative drug corridor in Chihuahua state. It gained the dominant position there after a violent conflict that began in 2008 with the Vicente Carrillo Fuentes organization, also known as the Juarez cartel, for control over the plaza in Ciudad Juarez. Violence in Ciudad Juarez and the city of Chihuahua continues to decline as Sinaloa consolidates its control of the plaza. According to the Executive Secretariat of the National System of Public Security, Chihuahua state saw just 1,538 reported homicides from January to August 2012 versus 2,169 in the same period of 2011.
 
Even as the Sinaloa Federation largely appears to have gained control over Chihuahua state, it is still defending other important territories against Zetas incursions, namely Guadalajara. Sinaloa also faces an emerging challenge in northern Sonora state -- where much of the organizations' marijuana and other illicit drugs flow into the United States.
 
The Sinaloa Federation largely has controlled the northern half of Sonora state since seizing it from the splintering Beltran Leyva Organization in 2010. The first indications that the Sinaloa Federation faced a challenge in Sonora appeared in the northern half of the state in July, when the brother of Raul "El Negro" Sabori Cisneros, a former Sinaloa Federation lieutenant, was killed in a shootout between two rival groups of gunmen in Puerto Penasco. Indications of violence and tension associated with organized crime have since continued to emerge.
 
It still is not certain what has caused the recent violence in northern Sonora state. It could be the result of activity by local gangs or by Sinaloa Federation rivals like Los Zetas or splinter groups from the former Beltran Leyva Organization, which operate in adjacent territories such as southern Sonora and western Chihuahua states. Should a rival challenge the Sinaloa Federation for control of the trafficking corridor in Sonora state, the violence will likely continue.
 
Either way, it does not appear the Sinaloa Federation is at risk of losing any control at present. Northern Sonora state has a relatively sparse population, making widespread violence less opportune than in more densely populated regions. Because those communities are small, the violence would be more visible and more likely to impact the overall security environment of those areas.
 
The Sinaloa Federation did suffer some notable losses due to military and law enforcement operations in the third quarter. An Oct. 11 shootout between gunmen and the Mexican army in Culiacan, Sinaloa state, resulted in the death of Manuel "M-1" Torres Felix, a high-level hit man for both Sinaloa Federation leaders Ismael "El Mayo" Zambada and Guzman. While the impact of Torres' death remains uncertain, he likely would have been responsible for defending against challenges to the Sinaloa Federation in northern Sinaloa state from rival groups. We therefore will be looking for indicators of increasing violence and weakness on the part of the Sinaloa cartel.
 
Cartel de Jalisco Nueva Generacion
 
The rapid territorial expansion of the Cartel de Jalisco Nueva Generacion seen during the first half of 2012 appeared to stall during the third quarter. Although the group continued its ongoing turf wars with Los Zetas and the Knights Templar during the third quarter, no indications it enjoyed significant successes emerged. As noted during the second quarterly update, the Cartel de Jalisco Nueva Generacion may be ending its alignment with the Sinaloa Federation. Additional indications of this shift appeared during the third quarter.
 
With Mexico's drug war defined at a national level by the Los Zetas-Sinaloa Federation conflict, many smaller criminal organizations in Mexico sought a working relationship with either Los Zetas or the Sinaloa Federation.
 
Of these smaller groups, the Cartel de Jalisco Nueva Generacion has rapidly grown into a major criminal organization since 2011. It now operates along both the western and eastern coasts of Mexico in crucial locations for the transport of illicit drugs and shipments of precursor chemicals. Given its extensive territory, the Cartel de Jalisco Nueva Generacion could carve out a niche as a separate major cartel on turf it originally secured with Sinaloa backing to aid Sinaloa operations.
 
The Cartel de Jalisco Nueva Generacion experienced increased law enforcement pressure in Jalisco state during the third quarter. Its response to the government's targeting organized criminals in Guadalajara and Ciudad Guzman demonstrated the organization's capability to mount coordinated violence over a wide geographic area. On Aug. 25-26, gunmen established at least 26 roadblocks by setting hijacked vehicles on fire in roadways throughout Jalisco state, including in Guadalajara, Puerto Vallarta and Ciudad Guzman, as well as locations in Colima state.
 
Jalisco state authorities said Nemesio "El Mencho" Oseguera Cervantes, a top leader of Cartel de Jalisco Nueva Generacion, managed to evade arrest due to the roadblock campaign. Even so, authorities attained some successes during their operations, including the arrest of four Cartel de Jalisco Nueva Generacion members operating under Jose Javier Ramirez Chavez, a high-level leader in Ciudad Guzman. A week later, authorities in Ciudad Guzman detained Ramirez. The most notable arrests by Mexican authorities occurred Sept. 6 in Guadalajara, Jalisco state, when Ramon "El R-1" and Rafael "El R-2" Alvarez Ayala, two Cartel de Jalisco Nueva Generacion leaders working directly with top leader Oseguera Cervantes, were detained.
 
Knights Templar
 
The Knights Templar continued their turf war with the Cartel de Jalisco Nueva Generacion in addition to their conflict with La Familia Michoacana and Los Zetas. These conflicts in Mexico's central states have led to increased violence, particularly in Guanajuato state.
 
The Knights Templar have become increasingly public about their conflict with Los Zetas, particularly in relation to Trevino. For example, a video message released on the Internet in August from top Knights Templar leader Servando "La Tuta" Gomez Martinez discussed the organization's ongoing feud with Los Zetas.
 
While there have been no explicit indications of expanding violence between the two organizations, it is certainly possible that the Knights Templar will begin assaulting Los Zetas in the latter's strongholds during the fourth quarter. Authorities discovered several narcomantas Oct. 1 in Monterrey, Nuevo Leon state, ostensibly signed by the Knights Templar. If they are in fact planning an assault on Los Zetas in Monterrey, this would obviously affect the security situation there during the fourth quarter.
 
Authorities have targeted lower-level Knights Templar members in response to brazen acts of coordinated violence by the group. These include the arson attacks on installations and delivery trucks of Sabritas, a subsidiary of PepsiCo, during May in various parts of Michoacan and Guanajuato and the coordinated attacks against fuel stations Aug. 10 in Guanajuato state. In response, authorities detained at least 20 Knights Templar members Sept. 13 in San Miguel Allende, Guanajuato state, in connection to both series of attacks. Such arrests, however, will likely have a minimal impact on the group due to the low-level status of those arrested.
 
Other Groups
 
Many other lesser criminal groups have remained unchanged in their operational status, such as La Familia Michoacana, the Independent Cartel of Acapulco, La Barredora and the Vicente Carrillo Fuentes organization. While still operational in Mexico, these groups have a minimal impact on security compared to Mexico's main cartels.
 
La Familia Michoacana continued its turf war with the Knights Templar. Despite its efforts, La Familia Michoacana has never regained the status it lost when the Knights Templar split from them in January 2011.
 
Though the Vicente Carrillo Fuentes organization has mostly lost control of Ciudad Juarez and the city of Chihuahua to the Sinaloa Federation, the group remains operational outside both cities. In addition to facing new violence in northern Sinaloa and western Chihuahua along with its current allies, Los Zetas, the Vicente Carrillo Fuentes organization continues to suffer at the hands of law enforcement and military operations. Most recently, on Oct. 4 federal police captured La Linea leader Juan Carlos "El Sabritas" Sandoval Seanez and six other members of La Linea -- an enforcer group for the Vicente Carrillo Fuentes organization.
 
Outside of arrests, little activity was reported during the third quarter regarding La Barredora and the Independent Cartel of Acapulco, splinter groups from the old Beltran Leyva Organization. Their operations appear to remain focused around Acapulco. On Oct. 1, authorities discovered dismembered human remains in Acapulco along with a narcomanta directed against the Independent Cartel of Acapulco's presumed leader, Victor Aguirre, ostensibly signed by the Gulf cartel. The incident might indicate a new conflict between the Gulf cartel and the Independent Cartel of Acapulco to watch for during the fourth quarter.
 
Editor's Note: We now offer the daily Mexico Security Monitor, an additional custom intelligence service geared toward organizations with operations or interests in the region, designed to provide more detailed and in-depth coverage of the situation. To learn more about this new fee-based custom service, visit www.stratfor.com/msm.


Read more: Mexican Drug War Update: Fourth Quarter | Stratfor

[DDF]


The quarter will also see the inauguration of Mexico's next president, Enrique Pena Nieto, on Dec. 1. Pena Nieto has discussed plans to reduce overall violence by 50 percent in the first year of his presidency by creating a national gendarmerie, transferring military troops to the federal police and honing the military's focus on violent crimes. Whether those plans will be pursued remains to be seen, and any significant shifts in military and law enforcement policies probably will not occur until 2013.
 

I am certain they are taking Nieto's approach to a national gendarmerie very seriously.
Generally, many of the Municipal and Ministerial police are aligned with organized crime, especially the Municipales. They call them Polizetas and there is much truth to it.
As of late, they are changing all of the police and or agents here to being "Acreditables" which is trained more or less in SWAT tactics, even at the municipal level, but more importantly, each needing to put in their training at one of a few select military bases and pass extensive confidence tests in addition to polygraph tests.
At the end of that, they will be sent back to their respective bases, or if working at a State or Federal level, will be sent to one of three groups depending upon their level of education and or specialty; be it Operativos, Investigaciones, or Tacticos... the latter two requiring at least a Bachelors degree or Masters degree respectively.

There is much to be done in the way of combatting corruption, but it is easy to say that the selection process just got much steeper, and that even as this is being typed, there are former police officers being fired in droves; of which, I am certain when Nieto starts spending 60% of the budget on combatting this war, and that little of that money being reinvested in the economy, that the former agents and officers will seek work at the hands of the cartels. We will have to wait and see how that goes.

On other levels, the amount of cooperation between military, state, and federal agencies has been improving and often, the three even work on missions together.

Things are getting worse in Mexico, but at the same time, it is leading to Mexico becoming a better country with less lawlessness. It is the course that needs to be followed and IMO Nieto is correct in his approach.

[Crafty_Dog]

http://www.latimes.com/news/nationworld/world/la-fg-mexico-zetas-control-20121104,0,4077102,full.story

[Crafty_Dog]

Violence Continues in Coahuila and Zacatecas States
 
Violence between the Gulf cartel and Los Zetas continues in Zacatecas and Coahuila states. On Dec. 2, seven dismembered male bodies packed in six plastic bags were found on an abandoned property in the Obispado neighborhood of Torreon, Coahuila state, and another male body was found on Revolucion Boulevard. Additionally, attacks in Torreon against law enforcement have been increasing since October. The most recent incident occurred Nov. 30, when armed men killed two municipal police officers in Jardin neighborhood.
 





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On Dec. 1 in Zacatecas, Zacatecas state, authorities discovered five male bodies in two separate locations along with messages at each location allegedly authored by the Gulf cartel, claiming responsibility for the homicides and threatening members of Los Zetas. While the Gulf cartel has suffered significant losses in 2012 through military operations and Los Zetas assaults in states such as Tamaulipas and Nuevo Leon, the Gulf cartel has had a resurgence farther west in Coahuila and Zacatecas states. This resurgence was due in part to its alliance with former Los Zetas' regional plaza boss of Zacatecas, Ivan "El Taliban" Velazquez Caballero, and also likely the support of the Sinaloa Federation.
 
It is not likely either state will see a reduction in the current level of violence in the short term, since rival groups maintain their numbers of gunmen capable of carrying out violent acts. At the moment, it is not certain if either group has achieved the upper hand. Neither Coahuila nor Zacatecas state has been entirely controlled by one criminal organization before, so recent violence does not reflect an incursion by a criminal organization as much as an increased focus for control by one side.
 
New Police for Monterrey
 
Monterrey, Nuevo Leon state, a city valued by drug traffickers as a transportation hub and source of local revenue, experienced a sharp increase in violence when Los Zetas split from the Gulf cartel in 2010. As the two organizations became rivals, Monterrey became a frequent battleground resulting in inter-cartel violence and increasing pressure on law enforcement. In addition to this pressure, like many cities in Mexico, law enforcement is also subject to corruption efforts by the two competing cartels.
 
On Nov. 29, Monterrey Mayor Margarita Arellanes announced the "new" municipal police in Monterrey, with freshly acquired recruits beginning operations. the existing municipal police force is simply undergoing new recruitment and competency exams and changing its name from "Police Regia" to "Police Municipal de Monterrey." Mexico's navy trained approximately 500 recent police recruits, none of whom were from Monterrey, for introduction into Monterrey's law enforcement.
 
Reforming Monterrey's police body will likely have some drawbacks for security in the city. Since the incoming recruits are intended to replace existing police in the city, many current police officers will become unemployed, presenting opportunities for both the Gulf cartel and Los Zetas to recruit new gunmen as part of their ongoing turf war. Additionally, the same environment, which can corrupt active duty police, will exist for any incoming recruits. Given the organization's jurisdiction, any benefits of the reformation would affect only the Monterrey municipality and not the remaining municipalities of the greater metropolitan area.
 
Editor's Note: We now offer the daily Mexico Security Monitor, an additional custom intelligence service geared toward organizations with operations or interests in the region and designed to provide more detailed and in-depth coverage of the situation. To learn more about this new fee-based custom service, visit www.stratfor.com/msm.


Read more: Mexico Security Memo: Coahuila and Zacatecas States See Sustained Violence | Stratfor

[Crafty_Dog]

Territorial Exchanges in Chihuahua State
 
On Dec. 7, a group of gunmen entered Guadalupe y Calvo, a small town in southwest Chihuahua state, and began a spree of violence that lasted through the weekend. Residents said the assailants, who reportedly killed at least 11 people, took control of the town by blocking its main roads and searched for people to execute inside homes. The gunmen reportedly belonged to a group that had broken away from the Sinaloa Federation. While the involvement of such a splinter group is uncertain, Stratfor believes the attacks were likely linked to an ongoing fight for control over Mexico's "Golden Triangle" -- a region of the Sierra Madre Occidental Mountains responsible for high levels of drug production, particularly marijuana and opium -- in which Sinaloa has played a central role.
 
The incident in Guadalupe y Calvo reflected a dynamic that has become common in the Golden Triangle, where rival organizations have been struggling for control over towns and where several similar episodes of violence have occurred in recent months. On Aug. 16, for example, gunmen shot and killed the police chief of Guadalupe y Calvo. Two days later, the town's entire police force fled the area in response to additional threats by the gunmen, forcing the Mexican military and state law enforcement to intervene.
 






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Much of the violence can be linked to the Sinaloa Federation's struggle for control in the Golden Triangle, in part because the organization is fighting several smaller groups in the region, most notably La Linea and Los Mazatlecos -- two groups allied with Los Zetas. While the culprits of the Dec. 7 attacks in Guadalupe y Calvo have not been identified, Stratfor believes that responsibility lies with one of these groups -- if not the Sinaloa splinter group.
 
For the Sinaloa Federation, the struggle highlights the difficulty the organization has had in maintaining control over regional transportation routes and drug production. And the prolonged nature of the regional conflicts indicates that Sinaloa's ongoing effort to uproot its rivals has been unsuccessful. Sinaloa's struggles could be perceived as insubstantial to the organization, since the organization still has one of the largest shares of the Mexican drug trade and has limited itself in the region to fighting Los Mazatlecos and La Linea. But given their relatively small size, the Sinaloa rivals rely heavily on revenues from drug production, and neither group can likely afford to stand down. Unless the Sinaloa Federation either escalates its efforts to remove its rivals or negotiates agreements with them, back-and-forth episodes of large-scale violence in southwest Chihuahua state will likely continue.
 
Murder of a Coahuila Mining Executive
 
On Dec. 7 in Sabinas, Coahuila state, authorities discovered the body of a mining business owner named Basilio Nino Ramos with a gunshot wound in his neck, signs of torture and his dismembered finger placed in his mouth -- a symbol used by cartels on victims believed to be informants, suggesting links to organized crime. Authorities have not named any possible culprits or motives for the killing, although the manners in which the victim was maimed and then left in a public area are common among killings by organized criminal groups.
 
While no evidence has been released clearly implicating Los Zetas in the murder, the cartel has allegedly been involved in Coahuila state's mining industry. Nino Ramos owned Minera La Mision, a coalmine operator in Muzquiz, Coahuila state, that has reportedly been one of several mining businesses under investigation by the Mexican attorney general's office on allegations of laundering money for the cartels. If the accusations are true, then Nino Ramos was probably in frequent contact with organized criminal groups to coordinate the illicit financial transactions and a plausible target for cartel-related violence.
 
Editor's Note: We now offer the daily Mexico Security Monitor, an additional custom intelligence service geared toward organizations with operations or interests in the region and designed to provide more detailed and in-depth coverage of the situation. To learn more about this new fee-based custom service, visit www.stratfor.com/msm


Read more: Mexico Security Memo: A Fight for the Sierra Madre Occidental | Stratfor

[Crafty_Dog]

Stratfor
 
On Dec. 17, Mexican President Enrique Pena Nieto and members of his Cabinet presented the new administration's plan for reducing nationwide violence and crime caused by Mexico's drug wars. Pena Nieto outlined six points, and within those points, he mentioned the creation of a national gendarmerie and the consolidation of state police forces under the federal command, neither of which was a surprising move.
 
By bringing the federal police under the control of the Interior Ministry, acquiring oversight of state police and substantially bolstering the ranks of federal law enforcement, Pena Nieto is addressing the challenges that arise for municipal and state law enforcement as they try to combat national level criminal groups without closer federal coordination. Increasing the number of federal police or establishing an additional law enforcement body also allows law enforcement in Mexico to better confront violent groups that act in several geographic areas. This could lead to greater intelligence sharing, funding and coordinated actions, though the outline lacked details, such as timelines and precise courses of action.
 





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In 2010, there were approximately 32,000 federal police, 186,000 state police and 159,000 municipal police -- and correspondingly little federal coordination, creating significant challenges in law enforcement operations against nationally operating criminal organizations. Each state and municipal law enforcement body can confront nationally operating crime groups only within their respective geographic boundaries.
 
Increasing the federal government's coordination of law enforcement responsibilities at a state level will likely benefit the government's ability to deal with violence attributed to nationally operating organized criminal groups. But many of the problems afflicting Mexico's law enforcement remain -- primarily corruption and the lack of adequate funding or training.
 
Furthering the ability to coordinate law enforcement operations in Mexico would help the government confront violent groups on an inter-regional scale, but it would not solve these other outstanding issues. Additionally, the national gendarmerie or unified command has yet to be established and would probably not be operational in the next year. It is unlikely any tangible restructuring will take place in the short term since the process for establishing a command over state police has yet to be expressed in detail. Therefore, while plans to expand federal law enforcement oversight in Mexico could stem the violent actions of the cartels, the plans likely will not have an impact on security until after 2013.
 
Editor's Note: As an additional custom intelligence service geared toward organizations with operations or interests in the region, we now offer the daily Mexico Security Monitor, which provides more detailed and in-depth coverage of the situation. If you are interested in learning about this new fee-based custom service, please contact aboutmsm@stratfor.com.


Read more: Mexico Security Memo: Plans to Strengthen Law Enforcement Coordination | Stratfor

[Crafty_Dog]

http://vimeo.com/57022172

[Crafty_Dog]

Mexico's Masked Vigilantes Defy Drug Gangs—And the Law .
By NICHOLAS CASEY
 
For years, villages in rural Mexico have been terrorized by drug gangs and organized crime groups. Now, armed militias are taking control--running patrols, raiding the homes of suspected mafia and detaining prisoners. WSJ's Nick Casey reports.
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AYUTLA, Mexico—Masked men, rifles slung over their shoulders, stand guard on a lonely rural road, checking IDs and questioning travelers. They wear no uniforms, flash no badges, but they are the law here now.

A dozen villages in the area have risen up in armed revolt against local drug traffickers that have terrorized the region and a government that residents say is incapable of protecting them from organized crime.

 
Ranchers in Tecoanapa, near Ayutla, voted Sunday in favor of having local militiamen provide security.
..
The villages in the hilly southern Mexican state of Guerrero now forbid the Mexican army and state and federal police from entering. Ragtag militias carrying a motley arsenal of machetes, old hunting rifles and the occasional AR-15 semiautomatic rifle control the towns. Strangers aren't allowed entry. There is a 10 p.m. curfew. More than 50 prisoners, accused of being in drug gangs, sit in makeshift jails. Their fates hinge on public trials that began Thursday when the accused were arraigned before villagers, who will act as judge and jury.

Crime is way down—for the moment, at least. Residents say kidnapping ceased when the militias took charge, as did the extortions that had become the scourge of businessmen and farmers alike. The leader of one militia group, who uses the code name G-1 but was identified by his compatriots as Gonzalo Torres, puts it this way: "We brought order back to a place where there had been chaos. We were able to do in 15 days what the government was not able to do in years."

Yet a few shaken townspeople in Ayutla, the area's primary town, have stories of being arrested and held for more than a week before being deemed innocent and released. And one man was shot dead trying to escape the masked men at a checkpoint.

Village justice has long been part of life in rural Mexico. Now it's playing a growing role in the country's drug war. Across Mexico, from towns outside the capital to along the troubled border with the U.S., mobs have lynched suspected drug traffickers and shot those accused of aiding them. Last year a logging town in a neighboring state took up arms when traffickers of La Familia Michoacana, a drug cartel, attempted to lay claim to their forests.

The uprising around Ayutla, a two-hour drive from the resort city of Acapulco, differs from the others because it has started to spread locally. In the two weeks, bands in six other towns in Guerrero state have declared vigilante rule, including in Iguala, a city of 140,000. In the nearby Jalisco state, groups say they are considering similar action.

Some government officials are even siding with the militias, for now. Guerrero Governor Ángel Aguirre has met with the vigilantes and says state law gives villagers the right to self-rule. Ayutla's mayor, Severo Castro, says he welcomes the new groups. On a recent evening, he pointed toward a checkpoint blocks away and said the town is nearly crime-free for the first time in years.

"There are two police departments now," he said. "The ones in uniform and another masked one, which is much more brave."

That sentiment seems to be shared even among local police, who are still technically on duty but who now seem limited to the role of directing traffic around the central square, leaving the rest of the patrolling and police work to the militias.

Police Commander Juan Venancio, a broad-faced middle-aged man with a mustache, said local police are too afraid of organized crime to make arrests.

"We could arrest a gangster for extortion, but if we couldn't prove it, we'd have to let him go," he said. "But then what about our families? Do you think we're not scared they will take revenge on us if they are out? Of course we are scared."

In some ways, life is getting back to normal here after years of insecurity. Village rodeos attract young cowboys and girls in traditional dresses, and weddings stretch late into the evening. The same townspeople who were once extorted by drug gangs now bring melons and tamales to the militiamen standing guard at checkpoints.

Suspicion of the government and outsiders runs high here. During a visit by The Wall Street Journal last week to the nearby hamlet of Azozuca, rumor spread that the reporter's car was bringing state human-rights officials. An angry, stick-wielding mob of about 150 blocked the only road into town and didn't allow the reporter to enter.

"Get out of here! Don't take another step!" yelled a woman waving a wooden bat.

Remote villages in Guerrero, one of Mexico's most independent regions, had long complained that too few police looked after their towns. In 1995, the state passed a law allowing towns to form "community police" groups that worked much like neighborhood-watch organizations, permitting the groups to detain suspects and hand them over to authorities. But the laws didn't allow the groups to pass judgment on those accused.

By 2006, Mexico's drug war had begun to weaken its already-troubled institutions. Areas like Mexico City remained under tight control, but the power of the state in rural areas diminished. Some 65,000 Mexicans have been killed since 2006, but only a fraction of the killings have been solved—or even investigated, according to the government and legal experts.

"Mexico has a 2% conviction rate, and Mexicans have taken note of that," says Sergio Pastrana, a sociology professor at the College of Guerrero who has studied rural regions. "It's caused unrest and a determination among some to take the reins themselves."

Villagers in Ayutla say the town was never crime-free—bandits sometimes robbed horsemen riding the road, for example—but the specter of organized crime was something new.

Several years ago, a group known by villagers as Los Pelones—literally, the Bald Ones—entered Ayutla and began a racket which included both drugs and other crime, people here say.

Mr. Castro, the mayor, says his 19-year-old daughter was kidnapped two years ago and he paid a "large sum" for her release. Last July, the body of the town's police chief Óscar Suástegui was found in a garbage dump outside town. He had been shot 13 times. Authorities said it looked like the work of a criminal group. No arrests were made in either case.

Townspeople say Los Pelones moved into extortions last year, demanding protection money from those who ran stalls in the market adjoining Ayutla's central plaza. The payments were usually 500 pesos, or $40, a month per stall, according to several vendors, a large sum in the impoverished town.

As harvest season approached last fall, the group fanned out into the countryside, demanding monthly payments of 200 pesos, about $16, for each animal that farmers owned. Several farmers say the gang made a list of those who had agreed to pay and those who had not.

In November, a spate of kidnappings began. Gunmen in the village of Plan de Gatica captured the village commissioner, a kind of locally elected mayor, along with a priest in a nearby village who had refused to pay extortion fees for his church. A second commissioner was kidnapped in the village of Ahuacachahue in December. The three men eventually were released after ransoms were paid, villagers say.

When a village commissioner named Eusebio García was captured on Jan. 5, several dozen villagers from Rancho Nuevo grabbed weapons and formed a search party. The next morning, they found Mr. García in a nearby house with his kidnappers, who were arrested and jailed, say the militiamen.

"This was the turning point, the moment everything exploded here," says Bruno Placido, one of the leaders of the armed groups. "We had shown the power armed people have over organized-crime groups."

As word spread of Mr. García's release, farmers in villages around Ayutla also took up arms. Their plan: to descend into Ayutla, where they believed the rest of the Los Pelones gang was based. That night they raided numerous homes throughout Ayutla, arresting people they believed to be lookouts, drug dealers, kidnappers and hit men, and brought them to makeshift jails. Other villagers set up checkpoints across the town.

The vigilantes were now in charge. They instituted the curfew and declared that state and federal authorities would be turned away at checkpoints. Villagers were allowed to make accusations against others, anonymously, at the homes of militiamen.

The group ordered most schools shut down, saying Los Pelones might try to take children hostage in exchange for prisoners detained by the vigilantes.

"I hadn't seen anything quite like this before," says state Education Secretary Silvia Romero, who traveled to Ayutla after the initial uprising to negotiate for classes to resume. Some teachers agreed that suspending school was necessary until all top gang leaders were under lock and key. "The students were an easy target for the criminals," says teacher Ignacio Vargas.

Many schools have since reopened. The army, after negotiations, set up a checkpoint at the entrance to the region. Beyond that, the militiamen remain in control and no state or federal officials are permitted to enter the villages around Ayutla.

Townspeople interviewed recently said the masked men are ordinary farmers and businessmen, not rival criminals looking to oust Los Pelones. The mayor agrees. Still, Mr. Torres, the lead militiaman in Ayutla, acknowledged the risk of "spies from organized crime coming into our ranks." He said he encourages his men to turn in anyone seeking to join the vigilantes who might be linked to crime groups.

The militias are moving beyond the drug gangs to other alleged crimes and, in the process, are revealing some of the pitfalls of village justice.

On a recent day, two pickup trucks filled with masked men pulled up carrying bar owner Juan de Dios Acevedo. They alleged that Mr. Acevedo, 42, had been involved in the rape of a local woman. One of them pulled a shirt over his head while another bound his hands with rope. His mother and sister comforted him and cried.

As he was being bundled into one pickup, his mother fetched signed papers from the local prosecutor's office that said he had already been arrested for the same crime, and cleared by prosecutors. "This is a false accusation, and now I've been arrested for the second time," Mr. Acevedo protested.

The vigilantes were unmoved and took him away for questioning. Later that day, he was released unharmed.

A makeshift detention center run by villagers in El Mezón is home to two dozen men and women accused of being with Los Pelones. There is no budget to run the prison, villagers say. The prisoners eat donated tortillas and rice and sleep on cardboard on the floor. On a recent afternoon, seven men were clustered behind bars in a tiny, dark room that smelled of urine. It was hot and dirty. There were no visible signs of physical abuse.

The masked commander of the facility, who wouldn't give his name and declined to allow interviews with the prisoners, said the men are being treated well and will be given a chance to defend themselves in a public trial in the village. They won't be allowed lawyers, he said, and villagers will decide their sentences by a consensus vote.

Possible punishments include hard labor constructing roads and bridges in chain gangs, he said, although it will be up to the villagers, not the militia, to decide. He added that executions, which are not permitted under Mexican law even in murder cases, were not on the table.

"The village will be their judge," he said. "If the village saves you, you will be free. If not, then you are condemned."

Nightly raids of suspected drug traffickers have provided the militiamen with a clutch of high-powered weapons, including AR-15 rifles. It isn't clear how the men will be trained to use the weapons.

On Jan. 6, the night the checkpoints were erected, a man named Cutberto Luna was shot dead by the vigilantes, state authorities say. Mr. Torres, the Ayutla militia commander, says the man refused to stop at the checkpoint and opened fire on the men standing guard, who responded by firing back. He also alleges Mr. Luna was a "known leader of organized crime."

Members of Mr. Luna's family couldn't be located for comment. The state prosecutor's file on the case says Mr. Luna was a local taxi driver. The file makes no mention of organized-crime ties. No arrests have been made in the killing.

On a recent day, a group of militiamen in the village of Potreros discussed what lay ahead. A rancher in a nearby town was thought to have collected extortion money on behalf of the criminal gangs. Several militia members wanted to organize a raid to take back the money, then use it to buy ammunition. The men also discussed the merits of shooting on the spot criminals they believed to be guilty rather than taking them to village courts.

A vendor in the Ayutla town plaza is glad to have faced neither fate. He spent 14 days in the El Mezón jail but was released on Jan. 21, he said. The vendor said he was accused of helping an organized-crime member. In fact, he said, he was simply paying his 500 peso weekly extortion fee. He wasn't harmed in detention, he said, but got sick after he was given dirty water from a nearby pond to drink.

"Clearly I wasn't on the side of the bad guys," he said. "Still, I went to jail. The kind of psychological damage this does is great. Now I'm afraid they'll come back for me and cut off my finger or gouge out my eye."

[Crafty_Dog]

http://www.nytimes.com/2013/02/05/world/americas/us-stepped-in-to-halt-mexican-generals-rise.html?nl=todaysheadlines&emc=edit_th_20130205&_r=0


As Mexico’s military staged its annual Independence Day parade in September, spectators filled the main square of Mexico City to cheer on the armed forces. Nearly 2,000 miles away in Washington, American officials were also paying attention.

But it was not the helicopters hovering overhead or the antiaircraft weapons or the soldiers in camouflage that caught their attention. It was the man chosen to march at the head of the parade, Gen. Moisés García Ochoa, who by tradition typically becomes the country’s next minister of defense.

The Obama administration had many concerns about the general, including the Drug Enforcement Administration’s suspicion that he had links to drug traffickers and the Pentagon’s anxiety that he had misused military supplies and skimmed money from multimillion-dollar defense contracts.

In the days leading up to Mexico’s presidential inauguration on Dec. 1, the United States ambassador to Mexico, Anthony Wayne, met with senior aides to President Enrique Peña Nieto to express alarm at the general’s possible promotion.

That back-channel communication provides a rare glimpse into the United States government’s deep involvement in Mexican security affairs — especially as Washington sizes up Mr. Peña Nieto, who is just two months into a six-year term. The American role in a Mexican cabinet pick also highlights the tensions and mistrust between the governments despite proclamations of cooperation and friendship.

“When it comes to Mexico, you have to accept that you’re going to dance with the devil,” said a former senior D.E.A. official, who requested anonymity because he works in the private sector in Mexico. “You can’t just fold your cards and go home because you can’t find people you completely trust. You play with the cards you’re dealt.”

A former senior Mexican intelligence official expressed similar misgivings about American officials. “The running complaint on the Mexican side is that the relationship with the United States is unequal and unbalanced,” said the former official, who, like others interviewed for this article, spoke anonymously to discuss diplomatic and security exchanges. “Mexico is open with its secrets. The United States is not. So there’s a lot of resentment. And there’s always an incentive to try to stick it to the Americans.”

Wave of Violence

 Washington’s concerns about General García Ochoa — which several officials cautioned were not confirmed — come as both governments grasp for new ways to stem the illegal flows of drugs, guns and money across their borders.

Under Mr. Peña Nieto’s predecessor, Felipe Calderón, cooperation between the two governments had expanded in ways once considered unthinkable, with American and Mexican agents conducting coordinated operations that resulted in the capture or killing of several dozen important cartel leaders. But while Washington highlighted the record numbers of arrests, the stepped-up campaign created a wave of violence in Mexico that left some 60,000 people dead.

The devastating death toll has Mr. Peña Nieto, 46, a former governor, promising to move his country’s fight against organized crime in a different direction, focusing more on reducing violence than on detaining drug kingpins. But he has so far offered only vague details of his security plans, focusing instead on social and economic programs.

While Mr. Peña Nieto portrays himself as the leader of a new generation of reformers, he is also a scion of the Institutional Revolutionary Party, or PRI, which ruled Mexico for more than 70 years through a combination of corruption and coercion until it lost power in 2000. During its time in power, the party was known more for keeping the United States at arm’s length while attempting to strike deals with drug traffickers, rather than combating them head on.

Mr. Peña Nieto’s election has brought the PRI back to power, and since so many of those serving in his cabinet have one foot in the past, foreign policy experts who specialize in Mexico say it is not clear where the new government is headed.

“It could go either way,” said Eric L. Olson of the Woodrow Wilson International Center for Scholars in Washington, speaking of future cooperation between Mexico and the United States. “Part of me says, ‘Let’s not assume it’s all going to go south.’ And there are things that are happening that give me hope. But the longer it goes without some clarity, the more doubts creep in.”


Page 2 of 3)
Those doubts have also crept to Capitol Hill. Senator Patrick J. Leahy, a Democrat from Vermont who sits on the Senate Appropriations Committee, said he was withholding nearly $230 million in security assistance to Mexico through the so-called Merida Initiative amid concerns about whether the fight against organized crime is doing more harm than good.
 “Congress has been asked for a significant new investment, but it’s not clear what the Mexican government’s plans are,” Mr. Leahy said. “It’s premature to sign off on more of the same.”
General García Ochoa, 61, whose background is at once exemplary and enigmatic, personifies that quandary. On paper, he is a model officer. He earned two advanced degrees from Mexico’s most prestigious military academies, and founded the elite National Center for Counter-Narcotics Intelligence. He has been a student and an instructor in American military training programs. He has written three books, including one on the military’s role in the drug fight.
People who know the general said they were struck by his candid assessments of the fight against organized crime. He spoke openly about governmental corruption, a topic that has been considered taboo. And on at least two occasions over the past year and a half, the general’s friends said, he traveled secretly to San Antonio to meet with American intelligence officials — he didn’t feel safe meeting with agents in Mexico, they said — and gave names of military and civilian officials he suspected of providing protection to drug traffickers.
“He was genuinely worried that corruption was giving the military a bad name, and that if nothing was done about it, it could hurt relations with the United States,” said a person knowledgeable about the meetings. “The way he saw it, this next government has the chance to really change the way Mexico works with the United States. He didn’t want that chance to be missed.”
By then, General García Ochoa was already on the short list to become defense minister. And people who know him said he hoped American support would give him an advantage over other candidates.
What he did not know was that the United States was quietly advocating against him. Current and former American officials said they had put together a troubling portfolio of allegations against the general. In his role as director of military administration and acquisitions, he had been accused of skimming money and supplies from large defense contracts.
Reports in the Mexican news media last summer accused the general of approving payments totaling more than $355 million for sophisticated surveillance equipment, without reporting those payments to civilian authorities or providing an explanation of how that equipment would be used.
‘Mr. Ten Percent’
Behind the scenes, American officials had nicknamed the general “Mr. Ten Percent,” shorthand for their suspicions about the way he handled contracts. And two American officials recalled the general making a formal request for American assistance for the military’s helicopter unit, and then backing out of the arrangement when the United States asked to look at the books — including the unit’s financial, flight and fuel records.
“The United States is sending a lot of money down there,” said one senior American official, describing the concerns about the general. “We need to be sure that money is being used in the right way or we could lose a huge opportunity.”
The D.E.A. suspected the general had long ties to drug traffickers. Agents declined to discuss the specific nature of those links. Nor would they say whether their investigation against the general was continuing. General García Ochoa declined requests to be interviewed.
“There was a lot of information on him, and it was coming from multiple sources,” said a recently retired senior federal law-enforcement officer, referring to what he called the “serious concerns” about the general. “We never found any smoking guns, not enough to make a case.”

Page 3 of 3)
The New York Times obtained classified D.E.A. intelligence reports from the early years of the general’s career, when he founded the counternarcotics intelligence center. The reports, dated Dec. 15, 1997, allege that then-Colonel García Ochoa was one of several senior Mexican military officials involved with attempts to negotiate a deal with the country’s most powerful drug trafficking organizations.
 “It is highly likely,” said one report, “that military officials wanted to continue to profit from an ongoing relationship with the drug traffickers.”
The reports also allege that the colonel led a raid against the Juárez Cartel in which he deliberately allowed the kingpin Amado Carrillo Fuentes to escape, saying that the colonel “did not give orders to launch the operation until the car in which ACF was reportedly traveling had departed the area.”
Mexican officials declined requests to be interviewed for this article. American officials declined to comment publicly on their suspicions about the general. But they emphasized that whatever concerns they might have had about an individual general were hardly representative of the larger relationship between the two governments.
There have been significant strides in cooperation in recent years, including the first drones flying over Mexican airspace, the creation of the first joint intelligence center on a Mexican military base, operations staged by Mexican counternarcotics officers on the United States side of the border, and operations conducted by American federal law enforcement agents against money laundering in Mexico.
The United States has successfully shared delicate intelligence with the Mexican Navy, which led to the arrests of significant cartel leaders. And the number of exchanges between the Pentagon and the Mexican military has increased drastically, from 3 events in 2009 to nearly 100 last year, according to a report in Small Wars Journal, an independent online military publication.
“One of the most important bilateral relationships the United States has is with Mexico, and neither side is going to abandon it,” said another former senior D.E.A. official. “Yes, there are significant concerns, but when they come up you try to isolate them, limit their impact and move on.”
The American effort to prevent General García Ochoa’s promotion was just such an exercise in containment, with the Americans quietly moving to weed out Mexican officials suspected of corruption because they feared Mexican institutions would not be willing or able to do so on their own.
Misgivings Aired
After September’s Independence Day parade, senior American officials gathered in Mexico City for two days of meetings to assess their suspicions about the general, and to discuss whether or not to share those misgivings with their Mexican counterparts.
According to a Mexican official, the Americans eventually did share their concerns about the general, less than a week before Mr. Peña Nieto announced his cabinet appointments. The official said the American ambassador met in Mexico City with two senior aides to the incoming leader, including Miguel Ángel Osorio Chong, who later became interior minister, and Jorge Ramírez Marin, a former national security adviser.
The official said Mr. Wayne, the ambassador, had discussed Washington’s concerns about the general, emphasizing that the allegations had not been corroborated.
“The timing was important,” the Mexican official said, “because Mexican presidents almost never replace the person they appoint as defense minister, so whoever was chosen would be involved with setting the terms of cooperation for the next six years.”
In the end, General García Ochoa did not get the job. Instead, it went to Gen. Salvador Cienfuegos Zepeda, who Mexican officials said had become close with Mr. Peña Nieto when he served as governor of the state of Mexico and General Cienfuegos commanded the area’s military base.
As for General García Ochoa, he was dispatched to a military base in the northern border state of Coahuila, a hotbed of cartel-related prison breaks, police corruption and political assassinations.
Whether Washington played a central role in how things turned out for the general remains unclear. Meanwhile, a column in the Mexican newspaper El Universal debated whether his dangerous new assignment was a demonstration of the government’s confidence in him, or a demotion aimed at forcing him to consider an early retirement.
Whichever the case, the general made a hasty departure from the military’s headquarters in Mexico City. One person who knows him said he had emptied his office with the help of a handful of aides and dispensed with the usual farewell festivities.
On a day in December when defense ministers from across the hemisphere gathered for a summit meeting in Mexico City, the general was seen wearing civilian clothes, climbing into his personal car and driving away.

[Crafty_Dog]

Mexico Security Memo: A New Conflict in Jalisco State
 

February 6, 2013 | 1100 GMT

Stratfor
 
In the newest battlefront in violent Jalisco state, the Cartel de Jalisco Nueva Generacion has begun fighting its former ally Los Coroneles, an ally of the Sinaloa Federation, along with Sinaloa's allies the Knights Templar and the Gulf cartel. The Cartel de Jalisco Nueva Generacion has become one of the larger organized crime networks in Mexico, with its operations spreading into several Mexican states. During the latter half of 2011 and through 2012, the Cartel de Jalisco Nueva Generacion dominated criminal enterprises in Jalisco, defending Sinaloa Federation interests against incursions by rivals. The split is a significant blow to the Sinaloa Federation.
 
Like Los Coroneles, the Cartel de Jalisco Nueva Generacion emerged from a Sinaloa faction led by Ignacio "El Nacho" Coronel Villarreal. The conflict between the two successor organizations strongly suggests the Cartel de Jalisco Nueva Generacion is a fully independent criminal organization. The new fighting has affected multiple regions of Jalisco state, including the eastern portion around Lake Chapala, the western half including Guadalajara and along the state's border with -- and into -- Michoacan state. Further complicating Jalisco state's cartel landscape, Gulf cartel gunmen have become active there, probably upon request of their ally the Knights Templar. The Cartel de Jalisco Nueva Generacion also has been engaged in multiple turf wars with the Knights Templar since at least February 2012.
 

Jalisco state, specifically the metropolitan area of Guadalajara, has long been a strategic base of operations for Mexican organized crime, serving as a transportation hub for drug traffickers. Mexican cartels also use the mountainous and rural areas of the state for the production of illegal drugs. Guadalajara remains critical to Sinaloa Federation operations, meaning Sinaloa's new conflict with the Cartel de Jalisco Nueva Generacion will likely continue either directly or through Sinaloa proxies.
 
The new conflict between Los Coroneles and the Cartel de Jalisco Nueva Generacion raises the question of what role Los Zetas -- who inevitably will be drawn in -- will play. Jalisco state began experiencing escalated levels of violence as early as 2011, when Los Zetas began making inroads at the expense of the Cartel de Jalisco Nueva Generacion at the latter's inception. Activity attributed to Los Zetas in Jalisco has been limited during the first month of 2013. What strategy the organization will take in light of the influx of rivals thus remains unclear.
 
Los Zetas could align with Los Coroneles, the Knights Templar and the Gulf cartel, although so far Los Zetas have remained aligned to a lesser criminal organization known as La Resistencia, which derived from the former Milenio cartel. More beneficial for Los Zetas would be aligning with the Cartel de Jalisco Nueva Generacion in efforts to keep out the numerous other cartels seeking a foothold in Jalisco. An alignment with the Cartel de Jalisco Nueva Generacion in Jalisco state would be a substantial blow to the Sinaloa Federation, Gulf cartel and Knights Templar, the principal rivals to Los Zetas in their strongholds in northeastern Mexico. Nothing, however, suggests an alignment between the Cartel de Jalisco Nueva Generacion and Los Zetas is imminent, though it is a possibility.
 
Whether Los Zetas continue to assault other criminal organizations in Jalisco state independently or whether they align with one of the other groups in the state, violence will likely continue in Jalisco and in neighboring Michoacan. Although an alignment would eliminate a separate conflict from the region, it would probably not reduce violence in Jalisco state since conflict between the Cartel de Jalisco Nueva Generacion and the Knights Templar, Gulf cartel, Los Coroneles and Sinaloa Federation would likely replace it. Should Los Zetas remain separate and resume fighting in Jalisco, violence will likely escalate.
 
Editor's Note: We now offer the daily Mexico Security Monitor, an additional custom intelligence service geared toward organizations with operations or interests in the region, designed to provide more detailed and in-depth coverage of the situation. To learn more about this new fee-based custom service, visit www.stratfor.com/msm.
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Read more: Mexico Security Memo: A New Conflict in Jalisco State | Stratfor

[Crafty_Dog]

second post

In Mexico, Rumors Surround the Pemex Explosion
 

February 3, 2013 | 1729 GMT





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Summary
 


ALFREDO ESTRELLA/AFP/Getty Images
 
The Pemex building in Mexico City on Feb. 1
 


Rumors indicate that an explosive device may have triggered the Jan. 31 explosion in the basement of the headquarters of Petroleos Mexicanos, better known as Pemex, in Mexico City. According to other unconfirmed reports, two other explosive devices were in the building that did not detonate. If these claims are true, they would finally offer clarity on the blast, which left at least 32 people dead and more than 100 injured. The official position of the Mexican government, as stated by Pemex Director General Emilio Lozoya, remains that the explosion appears to have been an accident but that the government is pursuing all lines of investigation.
 
Though the exact cause of the explosion is unknown at this point, the event could indicate a range of possible political challenges for the new administration, including criminal intimidation and political infighting. The reform of state-owned Pemex has formed the cornerstone of the administration of newly inaugurated President Enrique Pena Nieto. Mexico's declining oil production and exports have a direct impact on the national budget, which in any given year derives 30 to 40 percent of its revenue from Pemex. Reforms will aim to increase crude oil and natural gas production for both domestic consumption and export. As a result, for anyone looking to send a clear message to the new administration, Pemex is a natural target.
 


Analysis
 
Although Mexico's drug cartels are the most obviously powerful set of violent actors in Mexico, to date they have refrained from using terrorist-type tactics against the government. Their operations have remained largely within the bounds of criminal violence designed to facilitate the business of illicit drugs. Unlike the decision of Colombia's Medellin cartel to engage in politicized violence during the late 1980s and early 1990s, the Mexican drug gangs have largely kept their operations from directly challenging Mexico City. Should the cartels escalate their actions to political violence, it could push the Mexican government to invite U.S. forces into the country to combat the threat, something these criminal organizations wish to avoid. It is possible that the Pena Nieto administration is engaging in back-channel negotiations with one or another of Mexico's criminal groups in an effort to stem the violence, an action that could shift the calculus of cartels. There is no evidence to suggest that such a change has occurred, but if further evidence comes to light suggesting the cartels were involved in the Jan. 31 explosion, it would indicate a significant change in Mexico's political and security situation.   
 
If the explosion was indeed an attack, the more likely explanation may be political infighting. The changes that the Pena Nieto administration wishes to implement will make Pemex more transparent and efficient and will most likely undermine entrenched interests in the company. Notoriously corrupt, Pemex has long been accused of gross inefficiencies and its employees of pervasive graft. As a result, any efficiency reforms to Pemex will likely cause many to lose their privileged access to Pemex funds. This is not to say that the organization is unaware that changes must be made. In fact, the company has attempted in recent years to make a number of changes to increase output. But recent discussions that the new Pemex leadership, appointed by the Pena Nieto administration, will lay off thousands of employees have put new strain on the company and on the leading Institutional Revolutionary Party, which has a close relationship with Pemex union leaders.
 
Nevertheless, the explosion was very large for a political message stemming from an internal power struggle, and it is possible that it was a complete accident; a natural gas leak or a blown transformer could have caused an explosion of this size. Indeed, many media reports have pointed to Pemex's poor maintenance record as a possible explanation. If that is the case, then the incident may have no significant political implications. However, as the rumors suggest, an attack would indicate a significant setback in the first months of the Pena Nieto administration.
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Read more: In Mexico, Rumors Surround the Pemex Explosion | Stratfor

[DDF]

AYUTLA, Mexico—Masked men, rifles slung over their shoulders, stand guard on a lonely rural road, checking IDs and questioning travelers. They wear no uniforms, flash no badges, but they are the law here now.

A dozen villages in the area have risen up in armed revolt against local drug traffickers that have terrorized the region and a government that residents say is incapable of protecting them from organized crime.

 
Ranchers in Tecoanapa, near Ayutla, voted Sunday in favor of having local militiamen provide security.
..
The villages in the hilly southern Mexican state of Guerrero now forbid the Mexican army and state and federal police from entering. Ragtag militias carrying a motley arsenal of machetes, old hunting rifles and the occasional AR-15 semiautomatic rifle control the towns. Strangers aren't allowed entry. There is a 10 p.m. curfew. More than 50 prisoners, accused of being in drug gangs, sit in makeshift jails. Their fates hinge on public trials that began Thursday when the accused were arraigned before villagers, who will act as judge and jury.

This has always been the only way law enforcement works effectively. Otherwise corruption exists and you can bet the locals know exactly what is going on and are there when things are actually happening. Police as a whole should cease to exist. They just aren't the best way. People being responsible for themselves is the best way.
This

[Crafty_Dog]

Mexico Security Memo: Guatemalan Gunmen Join Mexican Turf War
February 13, 2013 | 1100 GMT



Stratfor
On Feb. 5, federal police detained at least five Guatemalans at a hotel in the Lomas del Lago neighborhood of Zacatecas, Zacatecas state. According to the Zacatecas state attorney general, the Guatemalans had recently arrived to the state in order to reinforce Los Zetas, one of the two principal cartels fighting for control over the state. Along with the arrests, authorities seized an unspecified number of assault rifles and grenades, indicating the Guatemalans intended to engage in violent acts on behalf of Los Zetas. On Feb. 4, authorities discovered the bodies of two Guatemalans accompanied by rifles in Monteczuma in neighboring San Luis Potosi state after responding to reports of a shootout. And on Jan. 20 in Valparaiso, Zacatecas state, authorities detained four Guatemalans and seized assault rifles after a confrontation between gunmen and federal police.


Mexican organized crime has long worked with Guatemalan organized crime, and Los Zetas have had links to Guatemala since operating as an enforcer arm for the Gulf cartel. These ties remained after Los Zetas separated from the Gulf cartel and pushed to expand operations further down the supply chain of illicit drugs.

Recent reporting suggests Los Zetas are partly relying on Guatemalans in their attempts to regain control over states where a Zetas faction led by Ivan "El Taliban" Velazquez Caballero broke away to align with Los Zetas' principal rival in the region, the Gulf cartel. Velazquez's dissidence led to rising levels of violence in several Mexican states, most notably in San Luis Potosi and Zacatecas. Using Guatemalans to augment Los Zetas' forces is understandable since the organization suffered a substantial loss in operational capacity due to the breakaway faction.

As Los Zetas' need for gunmen increased, opportunities to recruit diminished because the organization likely had lost territory when Velazquez's faction splintered and probably did not trust the local population after such a betrayal. By recruiting Guatemalans, Los Zetas can bring in gunmen less likely to be compromised by rival cartels.

As long as Los Zetas retain operational ties in Guatemala, they will likely continue to use Guatemalans to make up for declining domestic recruitment. Guatemala has a large pool of unemployed military-age men to recruit from, and if Los Zetas face additional pressures, such as new incursions by rival cartels or another internal split, their recruitment of Guatemalans could increase. However, Guatemalans likely stand out from the local populations in which they operate in Mexico, which could lead to increased targeting by rival criminal groups and Mexican authorities.

Editor's Note: We now offer the daily Mexico Security Monitor, an additional custom intelligence service geared toward organizations with operations or interests in the region, designed to provide more detailed and in-depth coverage of the situation. To learn more about this new fee-based custom service, visit www.stratfor.com/msm.

[DDF]

Lots and lots of activity and death in the last two days, specifically in regard to what you just posted.

[Crafty_Dog]

Mexico Security Memo: Taxis Targeted in Cancun
 

March 20, 2013 | 1000 GMT

Stratfor
 
Fight for the Taxi Industry in Cancun
 
A group of gunmen killed seven people and wounded five others in a bar in Cancun on the evening of March 14. The incident began when gunmen armed with AK-47 assault rifles arrived at La Sirenita bar, located on 20 de Noviembre Avenue in Region 233 in the northern half of the city, and opened fire on a group of patrons. Three of the dead were leaders in a Quintana Roo state taxi union. On March 16, authorities detained two suspects involved in the March 14 shooting from a nightclub in the hotel zone of Cancun. According to one of the detained men, Hector "El Diablo" Cacique Fernandez, the suspects belong to Los Zetas and are responsible for collecting extortion fees in the city's hotel zone. The attack demonstrates that Mexican cartels have been using the city's taxi industry as a revenue source. Moreover, the current turf wars involving rival Mexican organized crime groups in Cancun -- including Los Pelones, Los Zetas, the Gulf cartel and Cartel de Jalisco Nueva Generacion -- may lead to additional violence on taxi drivers as well as their union leaders.
 





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According to Mexican media reports citing unnamed police officials, Los Zetas in Cancun are internally divided, and some members of the group are now working for the Gulf cartel. These alleged desertions reportedly revolve around both factions' attempting to control revenue earned by extorting taxi drivers working in the tourist destination. One source reported that although the detained suspects confessed to working for a Los Zetas plaza boss, they were in fact among the Zetas who had begun working for the Gulf cartel. However, no desertion by Los Zetas members in Cancun has been confirmed.
 
It would make sense for violence between the rival criminal groups to focus on taxi operators in the city, since Cancun's value for Mexican cartels comes from the city's popularity as a tourist destination and the income cartels can make from the tourists. Taxi drivers in Cancun have fallen victim to organized crime on several occasions, such as April 13, 2012, when gunmen in two trucks opened fire on a taxi in the Region 92 area of Cancun, killing two people in the cab and injuring a third. Two of the individuals inside the taxi were later identified as Los Zetas members. The April 13 attacked marked the beginning of a Cartel de Jalisco Nueva Generacion incursion into the city.
 
If some members of Los Zetas operating in Cancun have split from the organization, and particularly if they joined sides with one of Los Zetas' primary rivals in the area, more attacks targeting taxi drivers involved in organized crime or simply paying extortion fees could follow. Desertion by Los Zetas members would likely weaken the group's hold in Cancun. Still, even if Los Zetas are not fracturing, their rivals could still attempt to take control of Los Zetas' operations, which could lead to increased overall violence in Cancun.
 
Gulf Cartel Infighting Hurting Operations
 
Tamaulipas state authorities announced March 17 that three gunmen were killed in clashes between cartel elements and security forces -- one in the Jacinto Lopez neighborhood of Reynosa, Tamaulipas state, and two along the highway between Reynosa and San Fernando, Tamaulipas state. These events follow a series of cartel-related violent incidents in the Reynosa area over the past week.
 
Recent violence in Reynosa is likely the result of warring factions within the Gulf cartel. It is not clear if this weekend's events were the result of an offensive by the Mexican military to engage and counter elements of the Gulf cartel or if military patrols happened to come across the cartel gunmen who then engaged in a shootout. Regardless, infighting within the Gulf cartel has escalated and may be affecting the group's trafficking operations in the city, as evidenced by several substantial drug seizures that have coincided with the escalating conflict.
 
On March 15, federal police discovered two underground warehouses in Reynosa, collectively containing more than five tons of marijuana and 167 kilograms (368 pounds) of methamphetamines. This seizure followed the March 13 discovery of four tons of marijuana, also in a warehouse in Reynosa. While such seizures are not uncommon in northern Tamaulipas, the frequency is atypical. However, such frequent seizures could be expected in a city where traffickers who were at one point working within the same network are now rivals. A prolonged conflict between Gulf cartel leaders in Reynosa could lead to traffickers alerting authorities to their rivals' operations -- in addition to increasing military operations as violence rises.
 
Should cartel-related violence, particularly violence attributed to internal Gulf cartel disputes, continue at the current heightened levels, Gulf operations in Reynosa may be further hindered by both their rival Gulf cartel operators as well as the military.
 
Editor's Note: We now offer the daily Mexico Security Monitor, an additional custom intelligence service geared toward organizations with operations or interests in the region and designed to provide more detailed and in-depth coverage of the situation. To learn more about this new fee-based custom service, visit www.stratfor.com/msm.
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Read more: Mexico Security Memo: Taxis Targeted in Cancun | Stratfor

[Crafty_Dog]

Summary
 


Demian CHAVEZ/AFP/Getty Images
 
Part of an aircraft assembled at the Bombardier plant in Queretaro, Mexico, in October 2010
 


Mexico's manufacturing sector has grown more sophisticated under the North American Free Trade Agreement. Manufacturers now produce higher value-added products, such as automotive, aeronautical and electronic products, and they are doing so in factories outside their traditional production region: the U.S.-Mexico border. As the country's economy has grown, a secondary manufacturing core has emerged in the central lowlands, also known as the Bajio. Located near the bulk of Mexico's educated workforce, the Bajio is safer than many border towns and is now connected more efficiently to suppliers in the United States and Asia and consumers in the United States and Canada. The manufacturing sector in this region will grow in importance in the years to come, though it will not replace the border region entirely.
 


Analysis
 
In the late 1980s and early 1990s, Mexico underwent a profound economic and political reorganization. The economy liberalized, culminating in NAFTA, and major state-owned companies privatized, transforming Mexico from a closed economic and political system into an export-oriented industrial economy.
 
As a result, trade increased between Mexico and the United States and a manufacturing belt sprung up at the countries' shared border. From 1990 to 2000, Mexican trade became even more closely tied to the United States. In 1990, the United States accounted for 69 percent of all Mexican trade; by 2000, it accounted for nearly 80 percent. Low-end factories, known as maquilas, sprang up in the border states of Baja California, Sonora, Chihuahua, Coahuila, Nuevo Leon and Tamaulipas. These provided manufacturers with an abundant supply of low-wage labor, most of which came from elsewhere in Mexico.
 





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But at the turn of the century, China's special economic zones became cost-competitive alternatives to Mexican factories. Mexico responded by making more valuable products. So even though clothing exports dropped 43 percent (from $7.6 billion to $4.3 billion) between 2002 and 2012, automotive exports increased by 152 percent ($27.9 billion to $70.3 billion) and electronic exports increased by 73 percent ($43.3 billion to $74.9 billion) over the same period. Asian alternatives notwithstanding, these Mexican products remained cost-competitive because of NAFTA.
 
A Systemic Shift
 
Mexico's central lowlands, which include Aguascalientes, Guanajuato, Queretaro and San Luis Potosi states, provide relative isolation from the endemic violence of the border, a large pool of qualified workers and incentives schemes to lure foreign direct investment.
 
To attract foreign investment, Bajio state governments in 2006 began building infrastructure and training facilities, selling real estate and providing a wide range of other benefits. Foreign multinational companies responded enthusiastically. Nissan has invested roughly $2 billion to build a new automotive plant in Aguascalientes state. Volkswagen, GM, Honda and Mazda have invested $550 million, $200 million, $800 million and $500 million, respectively, in their plants in Guanajuato state. Bombardier has invested $500 million and Eurocopter has pledged $550 million in operations in Queretaro state.
 
These numbers represent a systemic shift. In Baja California, Coahuila, Chihuahua, Sonora, Nuevo Leon and Tamaulipas states, there were 4 percent fewer factories in 2011 than there were in 2007. Farther south, in Aguascalientes, Guanajuato, Queretaro, San Luis Potosi and Jalisco states, there were roughly 12 percent more factories.
 
Investment has followed a similar trend. Total foreign direct investment in the Bajio increased from $7.2 billion in 1993-2002 to $16.3 billion in 2003-2012. By comparison, foreign direct investment in the border states over the same period increased from $32.9 billion to $55.2 billion. That is not to say factories are relocating from the border to the Bajio -- it is not a zero-sum game. Rather, new firms looking to enter the North American market, especially European and Asian automakers, increasingly are setting up in the Bajio.
 
Notably, the overall amount of manufactured exports from the Bajio is far lower than that of the border. However, the number of manufacturing firms and the amount of foreign direct investment are increasing at a faster rate in the Bajio than in the border states.
 
Developing the Bajio
 
The Bajio only became attractive to manufacturers after Mexico overhauled its transportation infrastructure. More and more raw materials are coming from Asia, and the majority of automobile exports are moved by rail. Thus, Mexico had to expand its Pacific ports and connect them by rail to the industrial base and to consumer markets.
 






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The Pacific ports of Manzanillo and Lazaro Cardenas are booming accordingly. Lazaro Cardenas, the only port in Mexico that can accommodate post-Panamax ships, is the fastest growing port in North America.
 
In addition, the railways connecting these ports to the United States have become much more efficient since being privatized in 1995. The entire length of the country's railway network has remained at approximately 26,700 kilometers (16,600 miles), but the amount of freight transported has doubled from 52.5 million tons to 108.8 million tons per year. Moreover, companies have moved more freight with far fewer employees.
 
Unlike the border states, the central lowland region is a part of Mexico's economic and political heartland. It hosts a large, educated population and its climate is the most temperate in the country. It is centrally located, with relatively easy access to ports on both coasts, the United States to the north and Mexico City in the south.
 
Geography has benefited the Bajio, as have improved transportation infrastructure, comparatively better security and efforts to attract investment. More manufacturing investment and output will bring Mexico's industrial core closer to Mexico City and populations in need of jobs. Bajio manufacturing will not replace manufacturing activity along the border, but it gives Mexico an opportunity to develop more evenly and sustainably.


Read more: In Mexico, a New Manufacturing Heartland? | Stratfor

[Crafty_Dog]

Second post


Mexico: The 'New Narco-Reality' Is Already Here
March 27, 2013 | 1620 GMT
Stratfor
 
By Scott Stewart, Vice President of Analysis, and Tristan Reed
 
Last week we read an article discussing the idea that Mexican President Enrique Pena Nieto was somehow going to be able to create a "new narco-reality" in Mexico. The article theorized that if the Mexican government were to soften its investigation of drug crimes, the administration could defuse the situation and thus violence would decrease. The author of the article is not alone in exploring this line of reasoning. In fact, the article expresses a theoretical shift in approach we have often heard while discussing the problem of violence in Mexico with both Mexicans and interested foreigners.
 
Unfortunately, reducing the levels of violence is not quite that simple. The nature and origins of violence in Mexico severely constrain the Mexican government. Because of these constraints, merely lessening the government's prosecution of drug crimes will have little impact on the level of violence. Therefore, the theoretical argument will remain just that.
 
Nature and History
 
When analyzing the violence in Mexico it is helpful to put the violent incidents into one of three distinct categories: incidents that result from government action against the criminals, incidents that result from one criminal group attacking another and incidents that are the result of criminals attacking innocent citizens.
 
By reducing the tempo at which it prosecutes the drug war, the Mexican government could influence the number of incidents in the first category -- government action against cartel figures. Clearly these incidents can and do provoke a considerable amount of violence.
 
Tristan recently visited the street corner in Matamoros where Antonio Cardenas Guillen, also known as "Tony Tormenta," was killed by government troops in November 2010. Even though the incident occurred more than two years ago, the neighborhood still shows significant damage from the ferocious firefight that erupted between the military and Cardenas Guillen's bodyguards. The scene was reminiscent of the damage Tristan saw while in Iraq and Afghanistan and not something normally associated with a law enforcement operation, especially one within small arms range of the United States (the firefight forced an evacuation of the University of Texas at Brownsville campus). 
 
But, while quite dramatic, such operations are relatively rare. The government simply does not initiate the majority of violent incidents in Mexico and is not even involved in most of the violence. Many of the deadliest incidents in Mexico have no government involvement at all, such as the May 2011 ambush in Nayarit state in which 29 cartel gunmen were killed; the July 2010 ambush in Saric, Sonora, in which more than 20 cartel gunmen were killed; the August 2011 casino arson in Monterrey in which 52 people were killed; the killing of 72 migrants on a bus in Tamaulipas state in August 2010; and the hundreds of victims displayed in the dueling body dumps by Los Zetas and the Sinaloa cartel in each other's territory in 2011 and 2012. Even in the prolonged firefights in Reynosa in March 2013, there are reports that the government allowed the two warring criminal groups to fight for hours before getting involved in the fray.
 
Indeed, while the popular narrative is to ascribe the beginning of Mexico's cartel war to a campaign launched by former Mexican President Felipe Calderon, this is simply not the case. The escalation began well before Calderon was elected, and it was not government actions but a change in narcotics smuggling routes to the United States and competition over those routes between Mexican criminal groups that really sparked the escalation of violence.
 
This dynamic first became visible in the early 1990s when Joaquin "El Chapo" Guzman Loera and his Sinaloa Federation partners sent forces from Sinaloa state into Tijuana, Baja California state -- controlled at the time by the Arellano Felix brothers -- to buy stash houses and construct tunnels for moving drugs across the border. In response, the brothers tortured and killed Sinaloa operatives in Tijuana and even tried to assassinate El Chapo. The war between Sinaloa and the Arellano Felix brothers sparked a prolonged season of violence in Tijuana that eventually led Mexico's president at the time, Ernesto Zedillo, to dispatch Mexican soldiers to the city in 2000 in an attempt to quell the violence. 
 
A similar escalation occurred in Tamaulipas state in 2003, following the arrest of Gulf cartel leader Osiel Cardenas Guillen, when El Chapo and Sinaloa made an attempt to seize control of the lucrative Nuevo Laredo plaza. This incursion caused a powerful counterattack by Los Zetas, and a bloody, protracted struggle erupted in the city. By mid-2005 law and order had completely broken down in Nuevo Laredo, and then-President Vicente Fox deployed the army to the city to reassert government control.
 
Currently in Tamaulipas, the federal police and the military control security, and the local police have been disarmed in some cities, such as Reynosa. In such an environment it will be impossible for the federal government to disengage without first rebuilding local and state police forces to provide security.
 
The bottom line is that since the federal government has not initiated most of the violence in Mexico, a decision by the government not to pursue drug investigations would do little to quell the violence.
 
Fracturing
 
Beyond this general history of cartel-initiated and cartel-driven violence, there is the changing nature of the Mexican cartels themselves. Perhaps the most significant of these changes has been the fragmentation that has occurred among the cartels. After many years of relative stasis, where there were a handful of large cartel organizations that controlled relatively large areas, the cartel groups and the territory they control have entered a dynamic period. In 2006 and 2007 it was possible for us to do an annual report that explained the main dynamics of the Mexican cartels, but due to the rapid changes in 2010 we felt compelled to do a mid-year update in May. By 2011, the quickly changing cartel landscape demanded that we provide quarterly updates as older organizations splintered and newer organizations rose from them. This process has shown no sign of stopping.
 
The trend toward fragmentation is partly a result of the Mexican and U.S. governments' policy of seeking to decapitate the cartel groups, but it is too simplistic to suggest that Mexican policy is the sole cause of this fragmentation. In many cases, the reasons are much more complicated. For example, the largest of these new fragment groups, Los Zetas, split from the Gulf cartel nearly seven years after the capture of Gulf cartel leader Cardenas and almost a year before the death of his replacement -- and brother -- Antonio Cardenas Guillen.
 
Los Zetas split from the Gulf cartel after they staged what was essentially a failed hostile takeover of the organization and the other leaders resisted their attempt -- and resented their greed and arrogance. This resulted in friction between the traditional leadership of the Gulf cartel and Los Zetas that then led to all-out war between the two organizations when a Gulf cartel gunmen killed a Zetas member.
 
It is true that the killing of Antonio Cardenas Guillen led to additional splintering of the Gulf cartel and to a bitter struggle for control of the organization in 2011 and 2012, but the organization was arguably weakened far more by Los Zetas' insurrection than it was by his death. Currently, the Gulf cartel is very weak and appears to be not a unified organization but a scattered collection of smaller groups fighting to retain control of Matamoros and Reynosa.
 
The proliferation of these smaller organized crime groups has also resulted in increased friction, and the increase in violence we have seen in places like Acapulco and Guadalajara in recent years is a direct consequence of this. The violence is not just occurring in one or two border towns; it is stretching over a large portion of the country and encompasses several states.
 
There are also some who cling to the idea that Pena Nieto can forge some sort of agreement with the cartels and return to the way that his predecessors in the Institutional Revolutionary Party used to deal with and accommodate the cartels in the past. However, given the current cartel dynamics, the situation in Mexico is very different than it was under former presidents, such as Zedillo and Carlos Salinas de Gortari. There simply are too many moving parts and too many cartel groups with which to deal.
 
Beyond Trafficking
 
Another constraint that prevents the Mexican government from taking a hands-off approach to the criminal cartels is that they are no longer simply drug trafficking organizations. They have evolved into something else. 
 
In the 1990s the cartels were mostly focused on trafficking Colombian cocaine to the United States and producing their own marijuana, black tar heroin and synthetic drugs that they then transported to the United States. However, over the past decade the costs of the protracted wars among the cartels and the impact that these wars have had on some groups' ability to produce or traffic drugs have led many groups to branch out into other crimes.
 
These other criminal endeavors include kidnapping, extortion, human smuggling and cargo theft. Los Zetas also make a considerable amount of money stealing oil from Mexico's state-run oil company and pirating CDs and DVDs. This other criminal behavior is what sparks many territorial fights in areas that are outside the traditional drug production areas and border crossings.
 
It is not necessary to entirely control a highway or transportation hub to push drugs through -- both U.S. and Mexican law enforcement struggle to even slightly interdict the overall drug flow, and a Mexican gang will not be any more successful. But when two opposing groups are using the same turf, and are selling drugs on the streets, extorting businesses or running kidnapping rings, then it's crucial that they keep competitors away so they do not harm profits. This increasing focus on local drug sales also means that drugs are becoming more of an acute Mexican problem rather than just a problem for the Americans.
 
This drift toward localized crime and drug distribution is one of the major causes of the current violence in states such as Morelos, Mexico, Jalisco, Guanajuato and Quintana Roo. This change has been reflected in law enforcement acronyms. The Mexican cartels are no longer referred to as DTOs, or drug trafficking organizations, but rather TCOs, or transnational criminal organizations, in recognition of the other crimes they are involved in.
 
A "new narco-reality" has already dawned in Mexico. The environment is vastly different from what it was in the 1990s, and there is no going back. The changes that have occurred to and among the Mexican cartels, and the amount of violence the organizations precipitate without government involvement, mean that it will be extremely difficult for the Pena Nieto administration to ignore the cartels' activities and adopt this theoretical hands-off approach.
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Read more: Mexico: The 'New Narco-Reality' Is Already Here | Stratfor

[Crafty_Dog]

Mexico Security Memo: Implications of a Gulf Cartel Consolidation
 

April 3, 2013 | 1030 GMT



Stratfor
 
The Ramirez Trevino Faction's Reputed Reynosa Victory
 
Protracted fighting among Gulf cartel factions for control of Reynosa may finally have concluded in a victory for faction leader Mario "El Pelon" Ramirez Trevino. Social media outlets corroborated by a Stratfor source maintain that Ramirez Trevino's faction has killed its principal rivals in Reynosa, Miguel "El Gringo" Villarreal and his associates.
 






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According to Mexican media reports at the end of March, gunmen belonging to Ramirez Trevino's faction executed up to 60 of Villarreal's and his allies' relatives in the Tamaulipas cities of Miguel Aleman and Camargo. While we cannot verify these reports, such actions would be unsurprising given the intensity of fighting between Gulf cartel factions over the last month.
 
Rival Gulf leaders have fought for control of the overall group's lucrative criminal enterprises -- not surprisingly, to the detriment of its operations -- since at least 2010. A decisive victory by Ramirez Trevino in Reynosa would consolidate his control over Villarreal's former turf, allow him to remove any potential rivals within Villarreal's network and expand his overall control of Gulf cartel operations in northeastern Tamaulipas state -- possibly even reunifying the Gulf cartel under a single uncontested leader.
 
What sparked the escalated fighting in March remains unclear. Some accounts say that Villarreal was perceived as betraying other Gulf cartel leaders by maintaining a relationship with the now-deceased top leader of Los Zetas, Heriberto "El Lazca" Lazcano Lazcano. Other accounts, such as an anonymous message circulating on social media outlets at the end of March, maintain Villarreal and his associates were working closely with the Sinaloa Federation -- prompting the Sinaloa Federation to sever ties with the Gulf cartel now that Ramirez Trevino has won out. Such rumors frequently are encountered when following Mexican organized crime, and the validity and the source of the information are rarely established. Nevertheless, the reports pinpoint a critical element in the future security climate of Tamaulipas state -- namely, the responding actions of cartels that have frequently interacted with Gulf cartel factions (whether as rivals or allies) in the wake of Ramirez Trevino's victory. Such groups could seek to subvert the newly formulated Gulf cartel, renew attacks in light of a further weakened state (from continued infighting) or even collaborate with any potential new factions within the Gulf cartel.
 
The Gulf cartel factions have become increasingly reliant on support in defending their territories in Tamaulipas -- to include Matamoros and Reynosa -- from Los Zetas incursions. Thus far, this support primarily has come from the Sinaloa Federation and the Knights Templar. Given the rifts within the Gulf cartel, such alliances might have been with specific Gulf factions.
 
Although Ramirez Trevino apparently has secured control over Reynosa, this is likely to be temporary. Los Zetas, the Sinaloa Federation and the Knights Templar all have an interest in trafficking drugs into the United States through the Gulf-controlled cities of Reynosa and Matamoros. And any of these organizations could challenge the Gulf cartel for control. Moreover, it is unclear whether Ramirez Trevino's faction is able to smuggle significant quantities of illegal drugs independent of a larger Mexican criminal organization such as the Sinaloa Federation or Knights Templar.
 
Should Ramirez Trevino indeed have expelled his rivals from Reynosa, violence will likely decrease from the heightened level seen in March. However, isolated individuals loyal to the defeated faction could remain, given the defeated faction's deep cultural and familial ties in Reynosa. Such a reduction in violence would probably be temporary, because Los Zetas will continue to vie for control of the city. Likewise, should Ramirez Trevino's recent actions in Reynosa anger the Sinaloa Federation or Knights Templar, either cartel might seek to oust him by sending its own forces or supporting a rival Gulf cartel faction. While Ramirez Trevino may have made progress in becoming overall Gulf cartel leader, perhaps even eliminating the infighting, the Gulf cartel is far weaker than before. As such, it will continue to be influenced by other Mexican cartels as they struggle for control of the lucrative plazas in northern Tamaulipas state.
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Read more: Mexico Security Memo: Implications of a Gulf Cartel Consolidation | Stratfor

[Crafty_Dog]

El Chapo's Name in Nuevo Laredo Again
 
Authorities discovered two narcomantas hanging from a pedestrian bridge early April 4 in Nuevo Laredo, Tamaulipas state, ostensibly signed by Sinaloa Federation leader Joaquin "El Chapo" Guzman Loera, Los Zetas' principal rival. The message threatened Los Zetas leader Miguel "Z-40" Trevino Morales and promised to expel Los Zetas from Nuevo Laredo, the latter's most significant stronghold. The message also said "El H" supports Trevino, likely in reference to Hector "El H" Beltran Leyva. He leads a nationwide criminal network that splintered from the old Beltran Leyva Organization after the death of Arturo Beltran Leyva in December 2009.
 


Placing such threatening narcomantas in Los Zetas' stronghold may signal increased violence ahead in Nuevo Laredo and other cities in Tamaulipas state. More significant, the message probably reflects shifts in the state's criminal landscape following the end of Gulf cartel infighting. This shift is affecting other criminal groups vying for control of Gulf cartel territories, including Reynosa, Tamaulipas state.
 
Competition over the Reynosa plaza among Gulf cartel factions in March culminated in a victory for the faction led by Mario "El Pelon" Ramirez Trevino, which has consolidated control over the city. Unidentified Gulf factions are reportedly aligned with the Sinaloa Federation and its ally the Knights Templar. Due to this alignment, the two larger cartels will likely adjust their strategy in fighting Los Zetas depending on whether Ramirez Trevino's faction allied with the Sinaloa Federation and the extent to which his faction is able to fight Los Zetas. The April 4 narcomantas said Guzman offers his full support for the Gulf cartel. If the message is authenticated, it implies the Sinaloa Federation did in fact align with Ramirez Trevino.
 
If Ramirez Trevino has lost some capabilities by fighting Los Zetas in Tamaulipas state or if he has challenged a faction loyal to either the Sinaloa Federation or the Knights Templar, the Sinaloa Federation would likely have to use its own gunmen for incursions into Nuevo Laredo. The April 4 messages could reflect the Sinaloa efforts to take control of Nuevo Laredo using its own resources rather than those of the Gulf cartel.
 
Previous narcomantas in Nuevo Laredo signed "El Chapo" appeared March 26, 2012. At least seven dismembered bodies accompanied three narcomantas claiming the Nuevo Laredo plaza. Since Mexican cartels frequently use narcomantas to spread disinformation as part of information operations campaigns, a Los Zetas rival other than the Sinaloa Federation might have actually been behind those three narcomantas.
 
Regardless of who authored the April 4 narcomantas or whether the content was authentic, a response from Los Zetas -- including bodies accompanying narcomantas -- is likely. This could mean high causalities in Nuevo Laredo or any area where the Sinaloa Federation or the Gulf cartel operates, including Sinaloa state and the Gulf-controlled cities of Reynosa and Matamoros. Should the April 4 messages indeed mark a new Sinaloa campaign to take control of Nuevo Laredo, violence will likely escalate substantially as Los Zetas use all available resources to defend their stronghold.
 
Editor's Note: We now offer the daily Mexico Security Monitor, an additional custom intelligence service geared toward organizations with operations or interests in the region, designed to provide more detailed and in-depth coverage of the situation. To learn more about this new fee-based custom service, visit www.stratfor.com/msm.


Read more: Mexico Security Memo: More Signs of the Sinaloa Federation in Tamaulipas | Stratfor

[Crafty_Dog]

MEXICO - Violence recedes under Peña Nieto administration
On 10 April 2013, Governance Secretary Miguel Ángel Osorio Chong presented the results of President Enrique Peña Nieto’s first security evaluation, confirming a reduction in violence. According to Osorio Chong, between the periods of August to November 2012 and December 2012 to March 2013, homicides decreased 17 percent and kidnapping dropped by 25 percent.

[Crafty_Dog]

The Gulf Cartel Enters a Tourist Hub
 
A series of drug-related killings in Cancun over the past week is the latest sign of an escalating turf war as the Gulf cartel tries to expand its presence in the popular tourist destination. Authorities on April 14 discovered the bodies of seven people, all apparently strangled, in the backyard of a residence in the 102 region of the city. The residence was reportedly used for retail drug sales. The high number of victims, once atypical for Cancun, comes a month after a March 14 attack on a bar in Cancun where seven people were killed.
 
While there are no indications that the current turf war in Cancun will directly affect bystanders or tourists not participating in criminal activities, the killings will likely place additional pressure on security forces in Cancun, possibly distracting law enforcement from preventing the kind of petty crimes more likely to affect tourists.
 





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One possible explanation for the uptick in Gulf cartel activity is that a faction of Los Zetas in Cancun recently broke away from the parent organization and declared itself to be part of the Gulf cartel. Because the Gulf cartel is a far less cohesive and hierarchical organization than other cartels such as the Sinaloa Federation, the Gulf cartel operating in Cancun may or may not be coordinating with the factions in northeastern Mexico.
 
Regardless of how the Gulf cartel's presence grew to the point of driving the inter-cartel conflict in Cancun, any resulting violence will force municipal, state and federal authorities to redirect their focus. As part of the effort to reinforce security in Cancun, the Quintana Roo state government announced April 15 the deployment of 150 additional state police officers. Still, should violence continue to rise and put additional pressure on security forces, petty crimes more likely to affect bystanders or visitors such as theft or extortion may increase, which in turn could damage Cancun's main industry if enough tourists are deterred.
 
Threats Against Foreign Companies in Michoacan
 
On April 15, unidentified individuals distributed pamphlets, ostensibly signed "Knights Templar," in various areas of Apatzingan, Michoacan state. The message on the pamphlets warned commercial vendors as well as specific companies to stop delivering goods to Buenavista Tomatlan and Tepalcatepec, two municipalities west of Apatzingan near the Jalisco state border. Among the companies mentioned is PepsiCo subsidiary Sabritas, which was the target of coordinated attacks by the Knights Templar in May 2012.
 
The next day, narcomantas appeared in Lazaro Cardenas, Michoacan state, as well as Apatzingan warning that the community police operating in Michoacan -- particularly Buenavista Tomatlan -- belong to the Knights Templar's principal rival in the region, Cartel de Jalisco Nueva Generacion.
 
It is still not clear whether the Knights Templar are the actual authors of the April 15 and April 16 messages, but, as noted above, the criminal organization has targeted companies such as Sabritas in the past. In addition to questions about the authorship of the narcomantas, it is unclear whether the message they contained about Cartel de Jalisco Nueva Generacion infiltrating the community police in Buenavista Tomatlan is true. Even if those rumors are unfounded, the Knights Templar may believe them to be true, which could lead to continued attacks against individuals residing in the stated municipalities as well as businesses operating in the region. Therefore, the threats against vendors and multinational corporations such as Sabritas likely signal an intent to target businesses in the area and should not be disregarded.
 
Editor's Note: We now offer the daily Mexico Security Monitor, an additional custom intelligence service geared toward organizations with operations or interests in the region and designed to provide more detailed and in-depth coverage of the situation. To learn more about this new fee-based custom service, visit www.stratfor.com/msm.


Read more: Mexico Security Memo: Rising Violence in Cancun | Stratfor

[Crafty_Dog]

Second post of the morning

Mexico's Drug War: Balkanization Leads to Regional Challenges
April 18, 2013 | 0911 GMT

Stratfor
 
Editor's Note: This Security Weekly assesses the most significant cartel-related developments of the first quarter of 2013 and provides updated profiles of Mexico's powerful criminal cartels, as well as a forecast for the rest of this year. It's the executive summary of a more detailed report available to clients of our Mexico Security Monitor service.
 
Balkanization of Cartels
 
Since the late 1980s demise of the Guadalajara cartel, which controlled drug trade routes into the United States through most of Mexico, Mexican cartels have followed a trend of fracturing into more geographically compact, regional crime networks. This trend, which we are referring to as "Balkanization," has continued for more than two decades and has impacted all of the major cartel groups in Mexico. Indeed the Sinaloa Federation lost significant assets when the organizations run by Beltran Leyva and Ignacio Coronel split away from it. Los Zetas, currently the other most powerful cartel in Mexico, was formed when it split off from the Gulf cartel in 2010. Still these two organizations have fought hard to resist the trend of fracturing and have been able to grow despite being affected by it. This led to the polarized dynamic observed in 2011 when these two dominant Mexican cartels effectively split Mexican organized crime in two, with one group composed of Los Zetas and its allies and the other composed of the Sinaloa Federation and its allies.
 






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This trend toward polarization has since been reversed, however, as Balkanization has led to rising regional challenges to both organizations since 2012. Most notable among these is the split between the Cartel de Jalisco Nueva Generacion and the Sinaloa Federation. The Sinaloa Federation continues to struggle with regional crime groups for control in western Chihuahua state, northern Sinaloa state, Jalisco state and northern Sonora state. Similarly, Los Zetas saw several regional challengers in 2012. Two regional groups saw sharp increases in their operational capabilities during 2012 and through the first quarter of 2013. These were the Cartel de Jalisco Nueva Generacion and the Knights Templar.
 
The Beltran Leyva Organization provides another example of the regionalization of Mexican organized crime. It has become an umbrella of autonomous, and in some cases conflicting, groups. Many of the groups that emerged from it control specific geographic areas and fight among each other largely in isolation from the conflict between Los Zetas and the Sinaloa Federation. Many of these successor crime groups, such as the Independent Cartel of Acapulco, Los Rojos and Guerreros Unidos are currently fighting for their own geographic niches. As its name implies, the Independent Cartel of Acapulco mostly acts in Acapulco, while Los Rojos and Guerreros Unidos mostly act in Morelos state.
 
The ongoing fragmentation of Mexican cartels is not likely to reverse, at least not in the next few years. Despite this, while Los Zetas and the Sinaloa Federation continue to face new rivals and suffer from internal splintering, their resources are not necessarily declining. Neither criminal organization faces implosion or a substantial decline as a transnational criminal organization as a result of rising regional challengers. Both Los Zetas and the Sinaloa Federation continue to extend their drug trafficking operations on a transnational level, increasing both their influence and profits. Still, they will continue to face the new reality, in which they are forced to work with -- or fight -- regional groups.
 
Los Zetas
 
In Hidalgo state, a former Zetas stronghold, the Knights Templar have made significant inroads, although violence has not risen to the level of that in the previously mentioned states. Also, the turf war within Nuevo Leon and Tamaulipas states between the Gulf cartel and Los Zetas that began when Los Zetas split from the Gulf cartel in 2010 continues.
 
In light of Ivan "El Taliban" Velazquez Caballero's dissent from Los Zetas and the death of former leader Heriberto "El Lazca" Lazcano Lazcano, Zetas leader Miguel "Z-40" Trevino Morales could face organizational integrity issues during 2013. Signs of such issues appeared in Cancun during the first quarter when some members of Los Zetas reportedly broke from the group and adopted the Gulf cartel name. Besides possible minor dissent, a seemingly new rival has emerged in Tabasco state to counter Los Zetas. A group called Pueblo Unido Contra la Delincuencia, Spanish for "People United Against Crime," carried out a series of executions in Tabasco state throughout the first quarter, but the group's origins and significance remain unclear. No indicators of substantial splintering among Los Zetas have emerged since the Velazquez split.
 
Sinaloa Federation
 
Regional organizations continued to challenge the Sinaloa Federation on its turf in western Chihuahua state, northern Sinaloa state and Jalisco state through the first quarter. Intercartel violence in mountainous western Chihuahua continues as the Sinaloa Federation fights La Linea for control of the region's smuggling routes and drug cultivation areas. Los Mazatlecos so far has maintained its control over northern Sinaloa cities, such as Los Mochis and Guasave. It also has continued violent incursions into southern areas of Sinaloa state, such as Mazatlan, Concordia and El Rosario with its ally Los Zetas.
 
Gulf Cartel
 
At the beginning of 2012, Gulf cartel territory appeared likely to be absorbed by larger cartels -- essentially signaling the end of the Gulf cartel. Support from the Sinaloa Federation and the Knights Templar combined with fractures within Los Zetas allowed a Gulf cartel resurgence, leading to a renewed Gulf assault on Los Zetas in the northeastern states of Mexico. The resurgence ended with a series of notable arrests during the last quarter of 2012, such as that of former top leader Jorge Eduardo "El Coss" Costilla Sanchez. The arrests triggered additional Gulf cartel infighting, which peaked in March 2013.
 
The escalated infighting in the Gulf cartel, particularly in Reynosa, Tamaulipas state, highlighted the new state of the Gulf cartel: Instead of operating as a cohesive criminal network, the Gulf cartel now consists of factions linked by history and the Gulf label. The infighting began in 2010 after the death of former top Gulf cartel leader Antonio Ezequiel "Tony Tormenta" Cardenas Guillen. The death of Cardenas Guillen split the Gulf cartel into two main factions, Los Rojos and Los Metros. By the first quarter of 2013, infighting had broken out between Los Metros leaders, such as Mario "Pelon" Ramirez Trevino, David "Metro 4" Salgado and Miguel "El Gringo" Villarreal. This suggests the Gulf cartel is further fractured and no longer consists of just two opposing sides. The Gulf cartel may begin acting as a cohesive network during the second quarter after the escalated infighting in March, though this cannot be definitely predicted.
 
From March 10 to March 19, Reynosa became the focal point for Gulf cartel infighting as Ramirez Trevino escalated his conflict against Villarreal. Ramirez Trevino reportedly expelled Villarreal's faction and its allies from the Reynosa plaza and killed Salgado. This could mean Ramirez Trevino has consolidated control over other Gulf cartel factions. If true, this would represent a substantial shift in organized criminal operations in northeastern Tamaulipas state, where the Sinaloa Federation and the Knights Templar smuggle drugs, people and other illicit commodities through the border towns of Reynosa and Matamoros while Los Zetas maintain a constant interest in fighting for control of the stated cities.
 
As mentioned during the last annual update, Gulf cartel factions are increasingly reliant on Sinaloa Federation and Knights Templar support to defend the remaining Gulf cartel territory in Tamaulipas state from Los Zetas. This certainly remains true after the first quarter, although the recent shift from Gulf cartel infighting may signal a shift in intercartel dynamics. Since the Gulf cartel in reality consists of separate factions, there is likely a separate relationship between each Gulf cartel faction and the larger criminal organizations reportedly in alignment with them. With Ramirez Trevino now in charge of Reynosa, a city valued by both the Sinaloa Federation and the Knights Templar, his existing relationship with the two organizations will likely influence their strategies for maintaining their interests in Gulf cartel-controlled areas. Additionally, it is not yet clear whether Ramirez Trevino suffered any substantial losses during the March fighting in Reynosa. If he did lose some capabilities fighting Los Zetas in Tamaulipas state, or if he has challenged a faction loyal to either the Sinaloa Federation or the Knights Templar, either organization would likely have to use its own gunmen for defending Gulf cartel-controlled areas or mounting their own incursions into Zetas territory, particularly Nuevo Laredo.
 
Intercartel violence in the Gulf cartel-controlled city of Reynosa will likely diminish compared to the first quarter of 2013 if Ramirez Trevino has indeed won. This reduction in violence will continue only as long as Ramirez Trevino is able to hold his control over Reynosa. Influence from external organizations, such as Los Zetas, the Sinaloa Federation and the Knights Templar, could once again spark violence if Ramirez Trevino's efforts have harmed their trafficking operations through Reynosa or presented a new opportunity to seize control. What, if any, Gulf cartel infighting is ongoing is difficult to gauge.
 
Cartel de Jalisco Nueva Generacion
 
The severing of the relationship between the Cartel de Jalisco Nueva Generacion and the Sinaloa Federation came to the forefront of conflicts in the Pacific states of Michoacan and Jalisco during the first quarter of 2013. The Sinaloa Federation relied on its alliance with the Cartel de Jalisco Nueva Generacion in defending the critical location of Guadalajara from Los Zetas and used the Cartel de Jalisco Nueva Generacion as an assault force into Los Zetas strongholds, such as Veracruz state.
 
Although evidence of the rift between the Cartel de Jalisco Nueva Generacion and the Sinaloa Federation began to appear in open-source reporting during the last half of 2012, the conflict between the two organizations only became clear when the Cartel de Jalisco Nueva Generacion went on the offensive in Jalisco state by attacking Sinaloa Federation allies Los Coroneles, the Knights Templar and the Gulf cartel.
 
With a now-fully independent Cartel de Jalisco Nueva Generacion, the polarization of warring cartels in Mexico has effectively ended. In addition to the existing conflicts between the Sinaloa Federation and Los Zetas, the Sinaloa Federation must now focus on reclaiming an operational hold over Jalisco state from the now-rival Cartel de Jalisco Nueva Generacion. The second quarter will continue to see a conflict between the Cartel de Jalisco Nueva Generacion and Sinaloa Federation-aligned groups in Jalisco state as well as neighboring states like Michoacan.
 
Knights Templar
 
The Knights Templar experienced intensified conflict during the first quarter from their principal rival, Cartel de Jalisco Nueva Generacion. In an effort to combat the Cartel de Jalisco Nueva Generacion, the Knights Templar have allied with other Sinaloa Federation-aligned groups, the Gulf cartel and Los Coroneles, referring to themselves as "Los Aliados" to fight the Cartel de Jalisco Nueva Generacion within Jalisco. Violence as a result of this alliance against the Cartel de Jalisco Nueva Generacion has been most notable in the Guadalajara metropolitan area as well as towns lying on highways 15 and 90, which connect to Guadalajara.
 
In addition to the Knights Templar offensive into Jalisco state, the group is currently defending its stronghold of Michoacan state. The Cartel de Jalisco Nueva Generacion also has conducted violent assaults against the Knights Templar in Michoacan, particularly on routes leading from Jalisco state toward Apatzingan, Michoacan state. This assault has increased intercartel violence along the border of the two states as part of a tit-for-tat dynamic.
 
Citizens of Buenavista Tomatlan, Michoacan state, a municipality lying amid territory contested by the Cartel de Jalisco Nueva Generacion and the Knights Templar, have recently set up a community police force to counter Knights Templar operations in the municipality. As in some other areas of Mexico, this community police force is a volunteer force that assumed law enforcement responsibilities independent of the Mexican government. The community police, while established to thwart the Knights Templar, have created tension between the communities of Buenavista Tomatlan and the government. On March 8, the Mexican military detained approximately 34 members of the community police force that had been created in February in Buenavista Tomatlan.
 
The Buenavista Tomatlan arrests occurred after the community police took over the municipal police station March 4 and detained the municipal police chief, who the Mexican military later freed. Notably, the Mexican government claimed at least 30 of the detained community police belonged to the Cartel de Jalisco Nueva Generacion. If true, this suggests it has made territorial gains to the point of infiltrating the community police. However, there has been no confirmation on whether the accusations are true. Regardless, the community police force of Buenavista Tomatlan has placed its focus on stopping Knights Templar operations in the area, a focus that could only benefit the Cartel de Jalisco Nueva Generacion's war with its rivals.
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Read more: Mexico's Drug War: Balkanization Leads to Regional Challenges | Stratfor

[DDF]

Some guy took a video, this is what passerbuyers saw this morning. https://www.facebook.com/photo.php?v=174640659358484&set=vb.100004376533846&type=2&theater

[Crafty_Dog]

Arrest of a Torreon Criminal Leader
 
Federal police have detained Daniel "El Danny" Garcia Avila, leader of the criminal organization Los Dannys, also known as Cartel del Poniente, in Zacatecas state, Mexican officials announced April 19. Los Dannys are a regional crime group operating in the Comarca Lagunera metropolitan area, which encompasses the cities of Torreon, Coahuila state; Gomez Palacio, Durango state; Lerdo, Durango state; and Matamoros, Coahuila state. While Garcia Avila's arrest could hurt Los Dannys, violence in the area is unlikely to abate.
 

Though much of the violence in Coahuila is related to a turf war between Los Zetas and the Sinaloa Federation, increasing regional challenges from independent criminal groups like Los Dannys have made a substantial contribution. This regionalization of organized crime has increased the number of actors capable of contesting areas such as Torreon.
 
According to local authorities, Los Dannys have been responsible for a series of attacks against law enforcement officials in the area, in addition to other high-profile attacks. Whether the arrest of Daniel Garcia Avila will see Los Dannys' ability to operate diminish or whether another capable leader will step in remains unclear. Violence is likely to continue either way, since both Los Zetas and the Sinaloa Federation remain locked in combat for control of the region.
 
Violence in Tijuana
 
Authorities discovered the body of Edwin Jael Valencia Godinez, a leader within a Tijuana-based organized crime group under Jose Luis "El Guero Chompas" Mendoza Uriarte, on April 21 in Tijuana, Baja California state. His death follows the April 17 killing of Victor "El Sargento" Manuel Garcia, a leader of the local crime group Los Talibanes. The executions are part of a sharp increase in organized crime-related violence in Baja California state.
 
Violence in Tijuana and the rest of Baja California sharply declined after 2008 when the Sinaloa Federation largely bested the Arellano Felix Organization. Since then, the Arellano Felix Organization has maintained control of Tijuana, but in a subordinate role to the Sinaloa Federation. This relationship is by no means permanent. A new challenge to the Sinaloa Federation in Tijuana would not be surprising -- and would reflect another step in the Balkanization of Mexican organized crime.
 
Violence in Baja California state resulting from warring local criminal cells would harm Sinaloa Federation interests by drawing additional law enforcement attention to the lucrative border city of Tijuana. Indeed, unconfirmed Mexican media reports stated that Sinaloa Federation leader Ismael "Mayo" Zambada Garcia has ordered his lieutenants operating in Tijuana to halt the increase in violence. If correct, this shows a lack of control by Sinaloa Federation, since violence has not subsided. However, should the violence prove to be direct challenges to the Sinaloa Federation, then violence could intensify even more. Tijuana provides a critical port of entry into the United States, meaning the Sinaloa Federation would do everything it could to defend its operations in the area.


Read more: Mexico Security Memo: Torreon Leader Arrested, Violence in Tijuana | Stratfor

[Crafty_Dog]

Mexico Security Memo: Challenges to the Knights Templar in Michoacan

Stratfor

The conflict between the Knights Templar and the self-defense groups, also commonly referred to as community police, continues to escalate with violent acts and Knights Templar propaganda in Michoacan state near the border with Jalisco state. The Buenavista Tomatlan and Tepalcatepec municipalities have experienced the quickest increases in violence, extortion and embargos on local industries due to the ongoing conflict between Knights Templar and the self-defense groups.

On May 5, authorities discovered several narcomantas in Apatzingan, which is connected to both aforementioned municipalities by Highway 120 to the east. The messages denounced the self-defense groups, claiming they are associated with Cartel de Jalisco Nueva Generacion, the now-principal rival of the Knights Templar in states such as Jalisco, Michoacan, Guanajuato and Guerrero. Regardless of any validity behind the messages, the focus on connecting the self-defense groups to the Cartel de Jalisco Nueva Generacion shows an increasing urgency for the Knights Templar to defend their stronghold state from Cartel de Jalisco Nueva Generacion and the expanding self-defense groups in Mexican communities.

The self-defense groups emerged in Buenavista Tomatlan in February as a response to escalating conflict between the Knights Templar and Cartel de Jalisco Nueva Generacion. Since then, Knights Templar propaganda has shifted its focus from targeting Los Zetas to targeting the self-defense groups. During 2012, Los Zetas were the primary rival for the Knights Templar because they continually threatened Knights Templar routes to the United States through northeastern Mexico. But the conflict with Cartel de Jalisco Nueva Generacion is a more immediate threat to the Knights Templar because of the former's proximity to the Knight's Templar stronghold in Michoacan. Moreover, the appearance of the self-defense groups brought additional challenges for the group.

Hot Spots This Week in Mexico map

In addition to propaganda and violent assaults, the Knights Templar have attempted to impose embargos on the municipalities that host self-defense groups in Michoacan. On April 15, unidentified individuals distributed pamphlets, ostensibly signed by the Knights Templar, in various areas of Apatzingan, Michoacan state. The message on the pamphlets warned vendors in general and some companies in particular to stop delivering goods to Buenavista Tomatlan and Tepalcatepec.

Regardless of the validity of the claims that self-defense groups are colluding with the Cartel de Jalisco Nueva Generacion, the groups augment the threat that the neighboring cartel poses to the Knights Templar. Additionally, the self-defense groups' ability to police their respective communities competes with the publicly stated intent of the Knights Templar to provide public services in the communities in which they operate. Should more self-defense groups also countering Knights Templar interests emerge in Michoacan, the cartel could expect to lose some freedom to maneuver in its local criminal enterprises within its stronghold.

It does not appear that the Knights Templar are in immediate danger of losing significant territory. However, it is likely the operations of self-defense groups in Michoacan state have favored the Cartel de Jalisco Nueva Generacion in their current conflict with Knights Templar. Because of this, violence in Michoacan state, particularly west of Apatzingan, will likely continue at current levels and could further escalate if more self-defense groups emerge or if existing ones improve in their tactical capabilities.

Read more: Mexico Security Memo: Challenges to the Knights Templar in Michoacan | Stratfor

[Crafty_Dog]

Mexico Security Memo: A New Conflict in Northern Sinaloa
Analysis
May 15, 2013 | 0730 Print - Text Size +

Stratfor
Analysis
Recent body dumps and targeted attacks in northern parts of Sinaloa state reveal an unfolding conflict among regional organized criminal groups with backing from some of Mexico's major cartels. Since April, media outlets have attributed at least two body dumps in Los Mochis, Ahome municipality's largest city, to a group calling itself La Mochomera. The group's origins and allegiances remain unclear, but the escalating violence in the state suggests that a new challenge to Los Mazatlecos -- the current dominant organization in Ahome -- is underway.
According to social media reports, La Mochomera is a remnant of the former Beltran Leyva Organization, a Sinaloa-based cartel that split in 2009. The group has reportedly been fighting Los Mazatlecos, another Beltran Leyva Organization remnant that wrested control of parts of northern Sinaloa state over the past year. In 2012, Los Mazatlecos emerged as a regional challenger to Sinaloa Federation in Sinaloa state, and the group operates in some of the few areas in the state outside of Sinaloa's control.
 
The ability of Los Mazatlecos to counter the far stronger the Sinaloa Federation has been partly a result of its cooperation with La Linea and Los Zetas, two of the Sinaloa Federation's principal rivals. Before the breakup of the Beltran Leyva Organization, Los Zetas allied with some of the cartel's leaders, including Alfredo Beltran Leyva. Since the split, Los Zetas have maintained a working relationship with many of the remnant groups, most notably Los Mazatlecos, whose operations in Sinaloa state have allowed Los Zetas to make occasional incursions into territories controlled by the Sinaloa Federation and afforded access to the Sierra Madre Occidental, a lucrative region for illicit drug production.
But the recent violence in Ahome indicates that La Mochomera is distinct from Los Mazatlecos. On April 20, authorities discovered six bodies inside an abandoned vehicle in Los Mochis, along with a narcomanta signed ostensibly by "El Dos Letras," presumably the nickname of the leader of La Mochomera. The message contained a threat to Ahome police chief Jesus Carrasco Ruiz and accused him of colluding with organized criminals. Then on May 4, authorities discovered another six bodies near Los Mochis and another narcomanta apparently signed by El Dos Letras. On May 9, a group of gunmen in Adolfo Ruiz Cortines, a community in Guasave municipality, ambushed a convoy ferrying the police chief to the city of Culiacan along Highway 15.
In light of the recent threats against Carrasco Ruiz and the Ahome police, the May 9 attack can likely be linked to the body dumps on April 20 and May 4. The ability to ambush an armored police convoy with a high number of gunmen suggests the involvement of a more substantial regional criminal group, rather than a local gang. Thus, La Mochomera could be receiving support from an outside organization looking to counter Los Mazatlecos. It is also possible that the new group splintered from Los Mazatlecos or perhaps is a Los Mazatlecos faction still working to defend the group's territory.
Stratfor has been unable to confirm whether the escalating conflict in northern Sinaloa state is indeed between La Mochomera and Los Mazatlecos as reported. If La Mochomera is aligned with or a part of Los Mazatlecos, then the recent violence could be the result of defensive operations against a rival, likely the Sinaloa Federation. If La Mochomera is challenging Los Mazatlecos, Los Zetas will likely respond to ensure its capabilities to conduct operations in the state and the Sierra Madre Occidental and to counter the Sinaloa Federation in the rival cartels' nationwide conflict. This would prolong high levels of violence for the foreseeable future.
Editor's note: As part of a refocusing of our Mexico coverage to include more analysis of the geopolitical, economic and energy-related issues affecting the country, Stratfor is discontinuing publication of our weekly Mexico Security Memo. We will continue to publish analyses pertaining to the security situation in Mexico, but we will do so when events warrant the coverage rather than simply once a week.
If you need access to more detailed intelligence and analysis on the security situation in Mexico, we will continue to offer a number of products and services specifically on that topic, including our Mexico Security Monitor, which you can subscribe to here. As always, we want your feedback. Please let us know what you think of our expanded coverage by sending an email to responses@stratfor.com.

Read more: Mexico Security Memo: A New Conflict in Northern Sinaloa | Stratfor


Understanding Pena Nieto's Approach to the Cartels
Security Weekly
Thursday, May 16, 2013 - 04:00 Print - Text Size +

Stratfor
By Scott Stewart
Vice President of Analysis
Mexican President Enrique Pena Nieto's approach to combating Mexican drug cartels has been a much-discussed topic since well before he was elected. Indeed, in June 2011 -- more than a year before the July 2012 Mexican presidential election -- I wrote an analysis discussing rumors that, if elected, Pena Nieto was going to attempt to reach some sort of accommodation with Mexico's drug cartels in order to bring down the level of violence.
Such rumors were certainly understandable, given the arrangement that had existed for many years between some senior members of Pena Nieto's Institutional Revolutionary Party and some powerful cartel figures during the Institutional Revolutionary Party's long reign in Mexico prior to the election of Vicente Fox of the National Action Party in 2000. However, as we argued in 2011 and repeated in March 2013, much has changed in Mexico since 2000, and the new reality in Mexico means that it would be impossible for the Pena Nieto administration to reach any sort of deal with the cartels even if it made an attempt.
But the rumors of the Pena Nieto government reaching an accommodation with some cartel figures such as Joaquin "El Chapo" Guzman Loera have persisted, even as the Mexican government arrests key operatives in Guzman's network, such as Ines Coronel Barreras, Guzman's father-in-law, who was arrested May 1 in Agua Prieta, Mexico. Indeed, on April 27, Washington Post reporter Dana Priest published a detailed article outlining how U.S. authorities were fearful that the Mexican government was restructuring its security relationship with the U.S. government so that it could more easily reach an unofficial truce with cartel leaders. Yet four days later, Coronel -- a significant cartel figure -- was arrested in a joint operation between the Mexicans and Americans.
Clearly, there is some confusion on the U.S. side about the approach the Pena Nieto government is taking, but conversations with both U.S. and Mexican officials reveal that these changes in Mexico's approach do not appear to be as drastic as some have feared. There will need to be adjustments on both sides of the border while organizational changes are underway in Mexico, but this does not mean that bilateral U.S.-Mexico cooperation will decline in the long term.
Opportunities and Challenges
Despite the violence that has wracked Mexico over the past decade, the Mexican economy is booming. Arguably, the economy would be doing even better if potential investors were not concerned about cartel violence and street crime -- and if such criminal activity did not have such a significant impact on businesses operating in Mexico.
Because of this, the Pena Nieto administration believes that it is critical to reduce the overall level of violence in the country. Essentially it wants to transform the cartel issue into a law enforcement problem, something handled by the Interior Ministry and the national police, rather than a national security problem handled by the Mexican military and the Center for Research and National Security (Mexico's national-level intelligence agency). In many ways the Pena Nieto administration wants to follow the model of the government of Colombia, which has never been able to stop trafficking in its territory but was able to defeat the powerful Medellin and Cali cartels and relegate their successor organizations to a law enforcement problem.   
The Mexicans also believe that if they can attenuate cartel violence, they will be able to free up law enforcement forces to tackle common crime instead of focusing nearly all their resources on containing the cartel wars.   
Although the cartels have not yet been taken down to the point of being a law enforcement problem, the Pena Nieto administration wants to continue to signal this shift in approach by moving the focus of its efforts against the cartels to the Interior Ministry. Unlike former Mexican President Felipe Calderon, who was seen leading the charge against the cartels during his administration, Pena Nieto wants to maintain some distance from the struggle against the cartels (at least publicly). Pena Nieto seeks to portray the cartels as a secondary issue that does not demand his personal leadership and attention. He can then publicly focus his efforts on issues he deems critically important to Mexico's future, like education reform, banking reform, energy reform and fostering the Mexican economy. This is the most significant difference between the Calderon and Pena Nieto administrations.
Of course it is one thing to say that the cartels have become a secondary issue, and it is quite another to make it happen. The Mexican government still faces some real challenges in reducing the threat posed by the cartels. However, it is becoming clear that the Pena Nieto administration seeks to implement a holistic approach in an attempt to address the problems at the root of the violence that in some ways is quite reminiscent of counterinsurgency policy. The Mexicans view these underlying economic, cultural and sociological problems as issues that cannot be solved with force alone.
Mexican officials in the current government say that the approach the Calderon administration took to fighting the cartels was wrong in that it sought to solve the problem of cartel violence by simply killing or arresting cartel figures. They claim that Calderon's approach did nothing to treat the underlying causes of the violence and that the cartels were able to recruit gunmen faster than the government could kill or capture them. (In some ways this is parallel to the U.S. government's approach in Yemen, where increases in missile strikes from unmanned aerial vehicles have increased, rather than reduced, the number of jihadists there.) In Mexico, when the cartels experienced trouble in recruiting enough gunmen, they were able to readily import them from Central America.   
However -- and this is very significant -- this holistic approach does not mean that the Pena Nieto administration wants to totally abandon kinetic operations against the cartels. An important pillar of any counterinsurgency campaign is providing security for the population. But rather than provoke random firefights with cartel gunmen by sending military patrols into cartel hot spots, the Pena Nieto team wants to be more targeted and intentional in its application of force. It seeks to take out the networks that hire and supply the gunmen, not just the gunmen themselves, and this will require all the tools in its counternarcotics portfolio -- not only force, but also things like intelligence, financial action (to target cartel finances), public health, institution building and anti-corruption efforts.
The theory is that by providing security, stability and economic opportunity the government can undercut the cartels' ability to recruit youth who currently see little other options in life but to join the cartels.
To truly succeed, especially in the most lawless areas, the Mexican government is going to have to begin to build institutions -- and public trust in those institutions -- from the ground up. The officials we have talked to hold Juarez up as an example they hope to follow in other locations, though they say they learned a lot of lessons in Juarez that will allow them to streamline their efforts elsewhere. Obviously, before they can begin building, they recognize that they will have to seize, consolidate and hold territory, and this is the role they envision for the newly created gendarmerie, or paramilitary police.
The gendarmerie is important to this rebuilding effort because the military is incapable of serving in an investigative law enforcement role. They are deployed to pursue active shooters and target members of the cartels, but much of the crime affecting Mexico's citizens and companies falls outside the military's purview. The military also has a tendency to be heavy-handed, and reports of human rights abuses are quite common. Transforming from a national security to a law enforcement approach requires the formation of an effective police force that is able to conduct community policing while pursuing car thieves, extortionists, kidnappers and street gangs in addition to cartel gunmen.
Certainly the U.S. government was very involved in the Calderon administration's kinetic approach to the cartel problem, as shown by the very heavy collaboration between the two governments. The collaboration was so heavy, in fact, that some incoming Pena Nieto administration figures were shocked by how integrated the Americans had become. The U.S. officials who told Dana Priest they were uncomfortable with the new Mexican government's approach to cartel violence were undoubtedly among those deeply involved in this process -- perhaps so deeply involved that they could not recognize that in the big picture, their approach was failing to reduce the violence in Mexico. Indeed, from the Mexican perspective, the U.S. efforts have been focused on reducing the flow of narcotics into the United States regardless of the impact of those efforts on Mexico's security environment.
However, as seen by the May 1 arrest of Coronel, which a Mexican official described as a classic joint operation involving the U.S Drug Enforcement Administration and Mexican Federal Police, the Mexican authorities do intend to continue to work very closely with their American counterparts. But that cooperation must occur within the new framework established for the anti-cartel efforts. That means that plans for cooperation must be presented through the Mexican Interior Ministry so that the efforts can be centrally coordinated. Much of the current peer-to-peer cooperation can continue, but within that structure.
Consolidation and Coordination
As in the United States, the law enforcement and intelligence agencies in Mexico have terrible problems with coordination and information sharing. The current administration is attempting to correct this by centralizing the anti-cartel efforts at the federal level and by creating coordination centers to oversee operations in the various regions. These regional centers will collect information at the state and regional level and send it up to the national center. However, one huge factor inhibiting information sharing in Mexico -- and between the Americans and Mexicans -- is the longstanding problem of corruption in the Mexican government. In the past, drug czars, senior police officials and very senior politicians have been accused of being on cartel payrolls. This makes trust critical, and lack of trust has caused some Mexican and most American agencies to restrict the sharing of intelligence to only select, trusted contacts. Centralizing coordination will interfere with this selective information flow in the short term, and it is going to take time for this new coordination effort to earn the trust of both Mexican and American agencies. There remains fear that consolidation will also centralize corruption and make it easier for the cartels to gather intelligence.
Another attempt at command control and coordination is in the Pena Nieto administration's current efforts to implement police consolidation at the state level. While corruption has reached into all levels of the Mexican government, it is unquestionably the most pervasive at the municipal level, and in past government operations entire municipal police departments have been fired for corruption. The idea is that if all police were brought under a unified state command, called "Mando Unico" in Spanish, the police would be better screened, trained and paid and therefore the force would be more professional.
This concept of police consolidation at the state level is not a new idea; indeed, Calderon sought to do so under his administration, but it appears that Pena Nieto might have the political capital to make this happen, along with some other changes that Calderon wanted to implement but could not quite pull off. To date, Pena Nieto has had a great deal of success in garnering political support for his proposals, but the establishment of Mando Unico in each of Mexico's 31 states may perhaps be the toughest political struggle he has faced yet. If realized, Mando Unico will be an important step -- but only one step -- in the long process of institution building for the police at the state level.
Aside from the political struggles, the Mexican government still faces very real challenges on the streets as it attempts to quell violence, reassert control over lawless areas and gain the trust of the public. The holistic plan laid out by the Pena Nieto administration sounds good on paper, but it will still require a great deal of leadership by Pena Nieto and his team to bring Mexico through the challenges it faces. They will obviously need to cooperate with the United States to succeed, but it has become clear that this cooperation will need to be on Mexico's terms and in accordance with the administration's new, holistic approach.

Read more: Understanding Pena Nieto's Approach to the Cartels | Stratfor










U.S., Mexico: The Decline of the Colorado River
Analysis
May 13, 2013 | 0703 Print - Text Size +
 
A ring of bleached sandstone caused by low water levels during a six-year drought surrounds Lake Powell, a Colorado River reservoir near Page, Arizona David McNew/Getty Images
Summary
An amendment to a standing water treaty between the United States and Mexico has received publicity over the past six months as an example of progress in water sharing agreements. But the amendment, called Minute 319, is simply a glimpse into ongoing mismanagement of the Colorado River on the U.S. side of the border. Over-allocation of the river's waters 90 years ago combined with increasing populations and economic growth in the river basin have created circumstances in which conservation efforts -- no matter how organized -- could be too little to overcome the projected water deficit that the Colorado River Basin will face in the next 20 years.
Analysis
In 1922, the seven U.S. states in the Colorado River Basin established a compact to distribute the resources of the river. A border between the Upper and Lower basins was defined at Lees Ferry, Ariz. The Upper Basin (Wyoming, Colorado, Utah and New Mexico) was allocated 9.25 billion cubic meters a year, and the Lower Basin (Arizona, California and Nevada) was allotted 10.45 billion cubic meters. Mexico was allowed an unspecified amount, which in 1944 was defined as 1.85 billion cubic meters a year. The Upper and Lower basins -- managed as separate organizations under the supervision of the U.S. Bureau of Reclamation -- divided their allocated water among the states in their jurisdictions. Numerous disputes arose, especially in the Lower Basin, regarding proper division of the water resources. But the use of (and disputes over) the Colorado River began long before these treaties.
 
As the United States' territory expanded to the west, the Colorado River briefly was considered a portal to the isolated frontier of the southwestern United States, since it was often cheaper to take a longer path via water to transport goods and people in the early 19th century. There was a short-lived effort to develop the Colorado River as the "Mississippi of the West." While places like Yuma, Ariz., became military and trading outposts, the geography and erratic flow of the Colorado made the river ultimately unsuitable for mass transportation. Navigating the river often required maneuvering around exposed sand banks and through shallow waters. The advent of the railroad ended the need for river transport in the region. Shortly thereafter, large and ambitious management projects, including the Hoover Dam, became the river's main purpose.
Irrigation along the river started expanding in the second half of the 19th century, and agriculture still consumes more water from the Colorado than any other sector. Large-scale manipulation of the river began in the early 20th century, and now there are more than 20 major dams along the Colorado River, along with reservoirs such as Lake Powell and Lake Mead, and large canals that bring water to areas of the Imperial and Coachella valleys in southern California for irrigation and municipal supplies. User priority on the Colorado River is determined by the first "useful purposing" of the water. For example, the irrigated agriculture in California has priority over some municipal water supplies for Phoenix, Ariz.
Inadequate Supply and Increasing Demand
When the original total allocation of the river was set in the 1920s, it was far above regional consumption. But it was also more than the river could supply in the long term. The river was divided based on an estimated annual flow of roughly 21 billion cubic meters per year. More recent studies have indicated that the 20th century, and especially the 1920s, was a time of above-normal flows. These studies indicate that the long-term average of flow is closer to 18 billion cubic meters, with yearly flows ranging anywhere from roughly 6 billion cubic meters to nearly 25 billion cubic meters. As utilization has increased, the deficit between flow and allocation has become more apparent.
Total allocations of river resources for the Upper and Lower basins and Mexico plus water lost to evaporation adds up to more than 21 billion cubic meters per year. Currently, the Upper Basin does not use the full portion of its allocation, and large reservoirs along the river can help meet the demand of the Lower Basin. Populations in the region are expected to increase; in some states, the population could double by 2030. A study released at the end of 2012 by the U.S. Bureau of Reclamation predicted a possible shortage of 3 billion cubic meters by 2035.
The Colorado River provides water for irrigation of roughly 15 percent of the crops in the United States, including vegetables, fruits, cotton, alfalfa and hay. It also provides municipal water supplies for large cities, such as Phoenix, Tucson, Los Angeles, San Diego and Las Vegas, accounting for more than half of the water supply in many of these areas. Minute 319, signed in November 2012, gives Mexico a small amount of additional water in an attempt to restore the delta region. However, the macroeconomic impact on Mexico is minimal, since agriculture accounts for the majority of the river's use in Mexico but only about 3 percent of the gross domestic product of the Baja Norte province.
There is an imbalance of power along the international border. The United States controls the headwaters of the Colorado River and also has a greater macroeconomic interest in maintaining the supply of water from the river. This can make individual amendments of the 1944 Treaty somewhat misleading. Because of the erratic nature of the river, the treaty effectively promises more water than the river can provide each year. Cooperation in conservation efforts and in finding alternative water sources on the U.S. side of the border, not treaty amendments, will become increasingly important as regional water use increases over the coming decades.
Conservation Efforts Along the Colorado
The U.S. Bureau of Reclamation oversees the whole river, but the management of each basin is separate. Additionally, within each basin, there are separate state management agencies and, within each state, separate regional management agencies. Given the number of participants, reaching agreements on the best method of conservation or the best alternative source of water is difficult. There are ongoing efforts at conservation, including lining canals to reduce seepage and programs to limit municipal water use. However, there is no basin-wide coordination. In a 2012 report, the Bureau of Reclamation compiled a list of suggested projects but stopped short of recommending a course of action.
A similar report released in 2008 listed 12 general options including desalinization, vegetation management (elimination of water-intensive or invasive plants), water reuse, reduced use by power plants and joint management through water banking (water is stored either in reservoirs or in underground aquifers to use when needed). Various sources of water imports from other river basins or even icebergs are proposed as options, as is weather modification by seeding clouds in the Upper Basin. Implementation of all these options would result in an extra 5 billion cubic meters of water a year at most, which could erase the predicted deficit. However, this amount is unlikely, as it assumes maximum output from each technique and also assumes the implementation of all proposed methods, many of which are controversial either politically or environmentally and some of which are economically unviable. Additionally, many of the methods would take years to fully implement and produce their maximum capacity. Even then, a more reasonable estimate of conservation capacity would likely be closer to 1 billion-2 billion cubic meters, which would fall short of the projected deficit in 2035.
The Potential for New Disputes
Conflict over water can arise when there are competing interests for limited resources. This is seen throughout the world with rivers that traverse borders in places like Central Asia and North Africa. For the Colorado River, the U.S.-Mexico border is likely less relevant to the competition for the river's resources than the artificial border drawn at Lees Ferry.
Aside from growing populations, increased energy production from unconventional hydrocarbon sources in the Upper Basin has the potential to increase consumption. While this amount will likely be small compared to overall allocations, it emphasizes the value of water to the Upper Basin. Real or perceived threats to the Upper Basin's surplus of water could be seen as threats to economic growth in the region. At the same time, further water shortages could limit the potential for economic growth in the Lower Basin -- a situation that would only be exacerbated by growing populations.
While necessary, conservation efforts and the search for alternative sources likely will not be able to make up for the predicted shortage. Amendments to the original treaty typically have been issued to address symptomatic problems. However, the core problem remains: More water is promised to river users than is available on average. While this problem has not come to a head yet, there may come a time when regional growth overtakes conservation efforts. It is then that renegotiation of the treaty with a more realistic view of the river's volume will become necessary. Any renegotiation will be filled with conflict, but most of that likely will be contained in the United States.

Read more: U.S., Mexico: The Decline of the Colorado River | Stratfor

[Crafty_Dog]

 Money Laundering in Mexico: The Struggle to Track Illicit Gains
Analysis
July 5, 2013 | 0521 Print Text Size
Money Laundering in Mexico: The Struggle to Track Illicit Gains
Authorities seized more than $1 million and more than 41 million pesos on June 15, 2012. (Ronaldo Schemidt/AFP/GettyImages)
Summary

In its fight against organized crime, the Mexican government is going after what is perhaps most valuable to criminal enterprises: their money and their bank accounts. On June 17, the government confirmed a new money laundering law that will help prevent cartels from washing their proceeds so easily. The law will take effect sometime around March 2014.

The new law will not bring an end to all money laundering operations in Mexico. Money launderers no doubt will adapt to and circumvent the new regulations. They may be able to use existing tactics less affected by the legislation, or they may exploit money laundering avenues outside those of their most reliable associates in the United States. However, improving the economy is a priority for Mexican President Enrique Pena Nieto, and if he can at least make such operations more difficult for criminal organizations and the corrupt businesses with which they transact, he may be able to improve the image of his country's regulatory environment enough to attract more foreign investment to Mexico.
Analysis

Mexico's political and economic environment has long been conducive to money laundering. Rampant corruption and inefficient regulation and enforcement have prevented previous administrations from effectively redressing the issue. But the blame also lies partly in the sophistication of Mexico's money launderers, who employ a multitude of methods to make their earnings appear legitimate.
Methodology

Money laundering is broadly defined as the process by which illegally obtained earnings are made to appear legitimate. The oldest and simplest form of money laundering -- in Mexico as elsewhere -- is bulk cash smuggling. In Mexico this is done primarily in U.S. dollars. The advantages of smuggling are that it does not involve a third party or create a paper trail. Using this method, drug dealers sell their product in the United States and deposit the proceeds into U.S. banks. Otherwise, they smuggle the cash across the border and deposit it into Mexican banks.

They also use what is known as trade-based money laundering, which U.S. and Mexican intelligence agencies believe accounts for the highest percentage of laundered money in the world. In trade-based money laundering, criminals disguise money through seemingly legitimate commercial transactions. Transactions could take any number of forms: multiple shipments, phantom shipments or underreporting or overreporting shipments or payments. Frequently this technique involves the collusion of manufacturers and export/import firms, and typically it involves high-value goods that are subject to higher taxes and are in higher demand, such as electronics, luxury cars, textiles, precious metals and counterfeit goods.
Money Laundering in Mexico: The Struggle to Track Illicit Gains Read more: Money Laundering in Mexico: The Struggle to Track Illicit Gains

For example, a criminal with $1 million to wash will use a front or shell company to purchase $10,000 worth of, say, computers from an oversees computer company. The computer company, which is privy to the arrangement, will falsify an invoice to show $1 million worth of computers sold, after which it will ship the computers, take a commission and wire the remainder of the money -- in this case, $990,000 less the commission and merchandise -- to the original front company. The launderer can then sell the computers on the open or black market. Unlike conventional laundering practices, in which criminals sacrifice a portion of their earnings, trade-based money laundering enables criminals to recoup all their expenses by selling the merchandise. In some cases, they even turn a profit.

Trade-based money laundering has grown as global trade, including online commerce, has increased. It provides criminal organizations a relatively low-risk way to wash their funds. Countering this kind of activity requires a lot of coordination, funding and attention from authorities, who simply are unable to interdict in every instance of money laundering. Such challenges ensure that international trade-based money laundering will continue to grow.

Money Laundering in Mexico: The Struggle to Track Illicit Gains

Another preferred method of money laundering is the black market peso exchange. Mexican and Colombian criminal groups have long used this method because it is very difficult to detect and prosecute.

In these exchanges, Mexican criminals will smuggle drugs or other goods into the United States and sell them on the street for U.S. dollars. They then sell those dollars to a peso broker, who has connections in Colombia. The peso broker deposits the cash into the U.S. banking system in the form of structured deposits, making sure that these deposits do not exceed $10,000 -- the amount at which banks are required to file suspicious transaction reports to the U.S. government.

To avoid detection, the peso broker finds a Colombian importer that needs U.S. dollars and can purchase goods from U.S. exporters. The peso broker then uses funds from his U.S. bank account to pay the U.S. exporter on behalf of the Colombian importer. The U.S. exporter ships the goods to Colombia, where the Colombian importer sells the goods for pesos. These pesos are used to repay the peso broker. According to the U.S. Treasury Department, black market peso exchange moves an estimated $5 billion in drug proceeds from the United States to Colombia every year.
Allaying Investor Concerns

Mexico's new money laundering law is designed to counteract these and other methods. First introduced in 2010 by then-President Felipe Calderon, the law is meant to fight organized crime and corrupt business practices in part by limiting large cash transactions for expensive commodities, such as luxury cars, airplanes and real estate.

But because of the amount of money at stake and the corruption inside the Mexican government, pushback was inevitable. And given that so many small businesses in Mexico transact solely in cash, many Mexicans believed the law would hamper economic growth. Lawmakers debated and revised the law before it eventually went to Calderon for approval in October 2012.

Pena Nieto took office in December 2012 on a platform of solving Mexico's labor, education and banking problems. He hoped to divert attention from his country's troubled security situation by showcasing its economic potential. His administration has emphasized the country's economic vitality and has sought to safeguard existing and potential investors from corruption and organized crime. If administered properly, the new law may allay investors' concerns about conducting business in Mexico.

Specifically, the law is designed to reorganize public institutions within the Ministry of Finance, which ultimately will enforce the law, and develop an intelligence system to better identify and track potential and existing money launderers. It will also establish a Special Unit for Financial Analysis attached to the Attorney General's Office.

In addition to restricting the use of cash for high-end purchases, the law also will make it more difficult for criminals to transfer large amounts of cash. It will require Mexican businesses such as banks, money-remittance services, construction companies, lottery distributors, real estate firms and automobile manufacturers and dealers to better monitor suspicious transactions, often referred to as vulnerable activities.

All these organizations will be required to submit monthly reports of suspicious transactions to the Finance Ministry, but what qualifies as "suspicious" varies from business to business. For real estate transactions, the threshold is 8,025 times the minimum wage in Mexico City (roughly $40,000). For car, boat or airplane transactions, the threshold is 3,210 times the minimum wage in Mexico City (roughly $16,000). Credit issuers, financial institutions and individuals and businesses processing credit card transactions will be required to submit a report when a credit card user has spent equal to or more than 1,285 times the minimum wage in Mexico City (roughly $6,400).

According to a provision of the law, these reports must include the contact information of the individuals involved, an explanation of their business relationships, the goods or services provided in the transaction and the origin of the funds. Commonly known as the "know your customer" process, this provision refers to the due diligence that financial institutions and other regulated companies typically conduct to prevent identity theft, financial fraud, money laundering and terrorist financing. If nothing derails the law before 2014, most Mexican businesses will be required to participate in this process.

At the heart of the new law lies the need to stem the flow of laundered U.S. dollars into the Mexican economy. According to the U.S. State Department's 2012 Money Laundering Report, Mexican criminal organizations send between $19 billion and $39 billion to Mexico annually from the United States. These remittances are driven in large part by the proximity of the United States and its relatively robust economy.

The new law may indeed disrupt illegal financial operations in Mexico. But ultimately, its effectiveness will depend partly on the vigilance of Mexican businesses and financial firms, and criminals certainly will try to exploit those that do not enforce the rules strictly. In the meantime, Mexican criminal groups will continue to use reliable money laundering techniques as they search for new methods and new countries with which to partner. The U.S.-Mexican conduit will remain intact for the foreseeable future, but Mexican money launderers have already established ties with criminal enterprises in other countries -- notably in Europe and Central and South America. After March 2014, those connections could become even stronger.

Read more: Money Laundering in Mexico: The Struggle to Track Illicit Gains | Stratfor
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[Crafty_Dog]

http://www.glennbeck.com/2013/07/10/no-longer-1-u-s-not-the-fattest-country-in-the-world-anymore/

[jcordova]

Si Que nos gusta comer tacos y tortas  . Me encantan....

[Crafty_Dog]

Popocatepetl, a volcano about 70 kilometers (43 miles) southeast of Mexico City, has been increasingly active during the past week after briefly calming down from an active period in May. On July 10, Popocatepetl registered 45 exhalation events of steam, gas and ash, with the cloud reaching a height of more than 2 kilometers. On July 6, the Mexican National Disaster Prevention Center raised the alert level to Yellow, Phase III -- the third highest of a seven-stage scale. There have been no evacuations recommended as of yet, although traffic is being monitored on key evacuation routes.

Ash and infrastructure disruptions from a large eruption of Popocatepetl could affect nearly 30 million people. Some population centers could be in the path of deadly mudslides, and volcanic ash could cause economic disruptions. The Mexico City international airport services roughly 65,000 travelers a day, and economic activity in Mexico City accounts for about 30 percent of Mexico's gross domestic product. Direct and indirect contributions from the aviation industry alone contributed an estimated 2 percent of Mexico's overall gross domestic product in 2011. On July 4-5, ash from Popocatepetl's continued eruptions caused the cancelation of dozens of flights at Mexico City's airport, primarily from airlines based in the United States; Mexican airlines were only temporarily halted.

Popocatepetl has been active in some form for the past 20 years, so some rumblings are not unusual for the region. However, this ongoing activity brings the risk of complacency that could create problems if an evacuation warning is issued. Predicting the specifics of such an event is difficult, and this volcanic activity does not necessarily imply an impending, larger eruption, but the underlying economic considerations and potential effects come to the forefront with any increase in activity.

[Crafty_Dog]

Summary

The arrest of Los Zetas leader Miguel "Z-40" Trevino Morales marks the most significant capture involving a Mexican organized crime leader since 2008. On July 15, Stratfor sources confirmed Mexican and U.S. media reports saying that Trevino was arrested in Nuevo Laredo, Tamaulipas state, and that he was being transferred to Mexico City. Reports indicate that he was arrested late July 14, though that has not been confirmed. At least one source claims Trevino's nephew was also arrested.

Trevino became the leader of Los Zetas, one of Mexico's most prolific and most territorial organized crime groups, sometime in 2012 shortly before then-leader Heriberto "El Lazca" Lazcano Lazcano was killed by the Mexican navy. Trevino's arrest could change Mexico's criminal landscape substantially if Los Zetas begin to unravel in his absence.
Analysis

One reason behind Los Zetas' success is the group's ability to replace its leadership, even its senior-most leaders, relatively easily. In fact, Trevino succeeded Lazcano without any noticeable internal strife -- a rare occurrence among Mexican criminal groups.

This ability stems from the founding members, several of whom deserted from the highly trained Special Forces Airmobile Group unit of the Mexican army. Because ex-military personnel formed Los Zetas, members tend to move up in the group's hierarchy through merit rather than through familial connections. This contrasts starkly with the culture of other cartels, including the Sinaloa Federation. However, Miguel Trevino did not originate from the Mexican military like his predecessor, so it is possible that the group's culture may have changed somewhat.

It is unclear who will now try to keep the group together. Trevino's brother, Omar "Z-42" Trevino, will likely continue to maintain his role in criminal operations but it remains to be seen whether he has the capability or respect within the organization to replace his brother.

The places where cartel-related violence could rise as a result of Trevino's capture will depend on the ability of Los Zetas to replace their top leader as well as the strategies of Los Zetas' rivals. Should Trevino's arrest spark an internal struggle for succession, violence could rise in the states in which Los Zetas hold a substantial presence, including Tamaulipas, Nuevo Leon, Zacatecas, San Luis Potosi, Coahuila, Veracruz, Hidalgo, and Tabasco states.

Los Zetas' rivals, such as the Sinaloa Federation, the Cartel de Jalisco Nueva Generacion, the Knights Templar and factions of the Gulf cartel, probably see this transition as a moment of weakness. They could attack Los Zetas in their strongholds or otherwise try to expel Los Zetas from their home territories.   

The intelligence from Trevino's arrest could be a boon to U.S. and Mexican officials. Unlike Lazcano, who was killed during his attempted apprehension, Trevino survived his arrest and thus could provide valuable intelligence either through interrogation or through the seizure of his personal belongings, including mobile phones, computers and paper records. These in turn could lead to the arrests of other high-ranking organized crime leaders.

Read more: Mexico: Will Los Zetas Unravel Without Their Leader? | Stratfor
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[Crafty_Dog]

 Mexico's Drug War: Los Zetas Lose Their Leader and Community Police Proliferate
Security Weekly
Thursday, July 18, 2013 - 04:24 Print Text Size
Stratfor

Editor's Note: This Security Weekly assesses the most significant cartel-related developments of the second quarter of 2013 and provides updated profiles of Mexico's powerful criminal cartels, as well as a forecast for the rest of this year. It's the executive summary of a more detailed report available to clients of our Mexico Security Monitor service.

By Tristan Reed

Mexico Security Analyst

Mexican authorities arrested Los Zetas' top leader, Miguel "Z-40" Trevino Morales, roughly 27 kilometers (17 miles) southwest of Nuevo Laredo, Tamaulipas state, on July 15. Trevino's is the most significant capture in Mexico's drug war in recent years. The fate of Los Zetas and the response of Los Zetas' rivals has accordingly become uncertain moving into the third quarter. Indicators will emerge during the third quarter providing clarity on what to expect for security and cartel operations throughout Mexico.

Beyond the Trevino arrest, the second quarter also saw continued expansion of community-organized militias, commonly referred to as self-defense groups or community police, a trend we identified in the 2013 first quarter update. In Michoacan state, militia activity was so pronounced that Mexico City deployed the military and federal police to reassert government authority. The proliferation of these groups increasingly affects not just the Mexican government's strategy for combatting crime and violence, but also the strategies of Mexico's transnational criminal organizations.
Los Zetas

It is too early to gauge the extent to which Trevino's arrest will impact Los Zetas' operations. Whether a Los Zetas member is capable of filling the leadership vacuum will determine the impact. In the meantime, each of Los Zetas' rivals will likely revise their current strategies in fighting Los Zetas depending on their respective geographic reach and perceptions of Los Zetas' moment of weakness in the wake of the loss of their leader.

One reason behind Los Zetas' success has been the group's ability to replace its leadership, even its most senior leaders, relatively easily. Trevino himself succeeded former leader Heriberto "El Lazca" Lazcano Lazcano sometime during 2012 -- albeit prior to Lazcano's death during a military operation in October 2012 -- without any noticeable internal strife, a rare occurrence among Mexican criminal groups.

This ability stems from founders' military pedigree. Because ex-military personnel formed Los Zetas, members tend to move up in the group's hierarchy based on merit rather than familial connections. Unlike his predecessor, Trevino did not have a military background, so it is possible that the group's culture has changed somewhat, dulling its facility for smooth leadership transitions.

It is unclear who will try to keep the group together. Trevino's brother, Omar "Z-42" Trevino, will likely continue to maintain his role in criminal operations. His position was significantly boosted by his brother's ascent to the top spot, but it remains to be seen whether he has the capability or respect within the organization to replace his brother.

Violence will likely follow Trevino's capture in some parts of Mexico. The location and the scale of that violence depends on how resilient Los Zetas and its component cells are as rivals move to capitalize on what they see as a moment weakness.

Another potential impact of the arrest of Trevino will fall on Los Zetas' national strategy. The group has boasted cohesive network spanning more than half of Mexico, from which it has planned assaults on the territories of rivals such as the Sinaloa Federation. This was on display in Sinaloa state via a strategy that depended on coordination with the remnants of the Beltran Leyva Organization, which maintain a substantial presence in Sinaloa, and on Los Zetas' ability to stage gunmen and operations outside Sinaloa state. If Los Zetas cannot maintain the same level of cohesion as a whole, such strategies may dissolve.

In the third quarter, several indicators will reveal the impact Trevino's has on Mexican security and on Los Zetas' continued viability. These include shifts in violence within Zetas territories such as Tamaulipas, Nuevo Leon, Zacatecas, San Luis Potosi, Coahuila, Veracruz, Hidalgo and Tabasco states. Another indicator likely to emerge during the third quarter will be information operations campaigns by Los Zetas' rivals. While cartel propaganda, most commonly seen in narcomantas, is often disinformation, the messages' topics often demonstrate the priorities of the cartel behind the narcomanta.
'Community Police'

Vigilantism and non-government militias have long been seen throughout Mexico. The phenomenon of community police goes back at least to 1995, by which time an institutionalized collective of militias, the Regional Coordinator of Community Authorities, had a well established presence in parts of Guerrero state. Self-defense groups began to expand into communities throughout Guerrero and Michoacan states in early 2013, a year that has seen the role of community police in Mexico's domestic security issues expand rapidly.

In Michoacan, the militias appear to form within the confines of distinct communities. The groups remain largely disconnected, though they share the goal of confronting organized crime organizations and, at times, of countering government interests. In Guerrero, the presence of self-defense groups is much greater given their longer history there and given that state laws grant special recognition to them, particularly to those in indigenous communities.

Two separate and sometimes conflicting bodies coordinate self-defense group operations in Guerrero state: the Union of People and Organizations of Guerrero state and the Regional Coordinator of Community Authority. These groups, which call themselves community police, follow their own procedures for administering justice in their areas of operations and engage in talks with the state government. Regardless of the institutional system, both groups have been actively expanding their reach in Guerrero state through promoting the establishment of community police in new locales. This expansion has brought intermittent moments of tension with the state and federal governments due to the demonstrations and roadblocks that have accompanied it, as well as because of the increasing interactions between community police and organized crime during the second quarter of 2013.

As the Regional Coordinator of Community Authority and the Union of People and Organizations of Guerrero state community police have historically operated with limited funding, their members have largely served as volunteers armed primarily with hunting rifles and shotguns.

By contrast, the recently formed self-defense groups in Michoacan reportedly are equipped with assault rifles, tactical gear and sport utility vehicles. Self-defense groups in Michoacan also have targeted organized criminal groups -- specifically the Knights Templar, which apparently has inflicted the most harm on the people of Michoacan -- much more actively. Groups in the Buenavista Tomatlan, Tepalcatepec and Coalcoman municipalities of Michoacan state were founded during the first and second quarters of 2013 to confront the Knights Templar, which have dominated regional criminal activity since its split from La Familia Michoacana in 2010. In response, the Knights Templar disseminated propaganda denouncing Michoacan's self-defense groups and has violently attacked them. This forced the Mexican government to deploy federal security forces, including Federal Police and the military, in May to quell the rising violence and reassert government authority in the affected communities. The troops are currently maintaining an increased operational tempo in Michoacan state and likely will continue to do so through the next quarter.

Community police groups reflect the social consequences of prolonged violence and Mexico City's inability to enforce the rule of law in rural regions that historically are difficult to govern. In most cases, residents in communities with active self-defense groups rely primarily on those groups to maintain public order, undermining Mexican government authority. This has lead to tensions between the communities and government authorities. Sometimes, these tensions spark demonstrations and even low-level violence, occasionally blocking important transportation routes along southwest coastal highways and interior roads throughout Michoacan and Guerrero states. Such blockades can last several days, with the self-defense groups ultimately winding up in negotiations with federal troops and multiple levels of government.

The expansion of self-defense groups also has led to increased conflict between them and Mexican cartels, particularly the Cartel de Jalisco Nueva Generacion and the Knights Templar. Michoacan's self-defense groups emerged amid a turf war between these two cartels. Notably, the self-defense groups have formed along roads connecting Jalisco and Michoacan. These are the same roads through which the Cartel de Jalisco Nueva Generacion and Knights Templar stage incursions into one another's territories. Thus the self-defense groups have not only directly impacted Knights Templar's operations but also inadvertently aided the efforts of the Cartel de Jalisco Nueva Generacion in its incursions into Michoacan state.

Self-defense groups would not be in a position to confront organized criminal groups without some level of financial and other material support. While self-defense groups in Guerrero have in the past operated on a modest budget with the help of the community and occasional support from the government, the possibility remains that they have new benefactors -- perhaps including organized criminal groups. In June, business leaders in Chilpancingo, Guerrero state, met with Union of People and Organizations of Guerrero state representatives in an attempt to strike a deal to jointly combat extortion, an increasing problem as violence worsens. Such agreements do not yet appear to include financial support, something that could elevate the tactical capabilities -- and further the geographic expansion -- of the Union of People and Organizations of Guerrero.

Despite a stated intent to combat organized crime, self-defense groups could collude with organized criminal groups. Mexican military officers have made multiple accusations that self-defense groups in Michoacan state and self-defense groups emerging in July in the Costa Grande region of Guerrero state (unaffiliated with either the Regional Coordinator of Community Authority or the Union of People and Organizations of Guerrero state) are linked to organized crime. Likewise, the Knights Templar has actively spread propaganda through narcomantas and online media alleging that their principal rival, the Cartel de Jalisco Nueva Generacion, is behind the expansion of self-defense groups. There have been no further reports of links between self-defense groups and organized crime, and Mexican authorities apparently have not followed up on such accusations.

As exemplified by the May deployment of federal troops to Michoacan, self-defense groups have added additional complexity to Mexico's security environment, forcing the federal government to adjust its strategy. The Mexican government wishes to contain the expansion of self-defense groups, since they pose a threat to governmental authority. Thus far, the current government strategy has been to substantially increase military and law enforcement presence in exchange for self-defense groups' limiting their activity. This strategy will only yield temporary results, however, until the violence carried out by organized crime groups can be stamped out.

Specifically in Michoacan and Guerrero states, self-defense groups will likely continue to expand into some rural communities during the third quarter. As a result of continued expansion, confrontations between self-defense groups and organized crime could increase. Should violence with organized crime continue to escalate or tension between self-defense groups and the Mexican government rise as result of the groups' continued expansion, additional federal troop deployments to either Michoacan or Guerrero states could occur during the third quarter.

In addition to consequences resulting from their expansion, self-defense groups will continue to impact the conflict between the Cartel de Jalisco Nueva Generacion and the Knights Templar in Jalisco, Michoacan and Guerrero states. Since the fourth quarter of 2012, this conflict has become more active, with the groups mounting continued incursions into their rivals' strongholds in Jalisco and Michoacan states and violence occurring in Guerrero state. To more effectively combat the Cartel de Jalisco Nueva Generacion, the Knights Templar aligned with a Gulf Cartel faction and Los Coroneles (a organized crime group derived from now-deceased Ignacio "Nacho" Coronel Villareal's network) to form Los Aliados. Thus far, Los Aliados have had little impact on the Cartel de Jalisco Nueva Generacion's hold over Jalisco. Due in part to the contest between self-defense groups and the Knights Templar in Michoacan state, the Cartel de Jalisco Nueva Generacion has made inroads into Michoacan state, particularly in towns along highways linking Michoacan and Jalisco. The conflict between the two criminal organizations has increased violence, particularly in Jalisco and Michoacan states but also in Guerrero state.

Read more: Mexico's Drug War: Los Zetas Lose Their Leader and Community Police Proliferate | Stratfor

[Crafty_Dog]

By Scott Stewart

Stratfor analysts spend a lot of time reading intelligence, including huge numbers of media reports. This is something I jokingly refer to as "electronic waterboarding" when talking to new analysts: The intelligence flow is more than any brain can absorb, and until you become accustomed to managing the onslaught of information, you can feel as though you are drowning intellectually. But once you learn to manage it, a heavy flow of information can be very useful in spotting anomalies and patterns and in charting and predicting changes in dynamics. It is also quite helpful in allowing an analyst to pick out conventional wisdom and even myths that are propagated by the media and sometimes deeply held by a population.

Analytically, the problem is that buying into a popular narrative or commonly held myth can be quite dangerous. This is because such concepts can not only shape the way you perceive and categorize information as you read through the flow, but also serve to radically skew your analysis of a situation or dynamic. Indeed, conventional wisdom, disinformation and myths have long proved to be the bane of sound analysis. Intellectually buying into these types of concepts has led to the construction of faulty intellectual frameworks that in recent years have resulted in deeply flawed analyses regarding, for example, the presence of weapons of mass destruction in Iraq and the purported links between Saddam Hussein and al Qaeda.

But deceptive narratives, disinformation and myths do not apply just to Iraq or Saddam. One of the places where they are running rampant today is in Mexico, and perhaps no figure has more myths and disinformation associated with him than Joaquin Guzman Loera, also known as El Chapo, the leader of the Sinaloa Federation.
Myth and Reality in Mexico

This is not the first time Stratfor has attempted to address the El Chapo myth. In November 2012, I wrote an analysis discussing how a commonly held belief that El Chapo was somehow less violent than his competitors is patently false. Indeed, a historical review of inter-cartel violence in Mexico shows that it was the aggressiveness of El Chapo and his Sinaloa cartel compatriots in their efforts to seize smuggling corridors from competing organizations that started successive cartel wars in Tijuana, Nuevo Laredo, Juarez and Veracruz. Yet, despite this clear history, the myth somehow endures, and it is not unusual to read media accounts in which analysts and academics who study Mexico's cartels discuss how El Chapo and the Sinaloa cartel are more businesslike and less violent than their competitors. I often wonder what the remnants of the Arellano-Felix Organization (also know as the Tijuana cartel) or the Vicente Carrillo Fuentes Organization (also known as the Juarez cartel) think when they read such claims.

There is another myth we would like to address. Since the July 15 arrest of Miguel "Z-40" Trevino Morales, the leader of Los Zetas, there has been an increase in the circulation of the persistent myth that El Chapo's organization has somehow been spared in the Mexican government's efforts to decapitate and splinter the cartels. This is purportedly a sign that El Chapo has reached some sort of deal with Mexican President Enrique Pena Nieto and his Institutional Revolutionary Party to spare the Sinaloa Federation from government attention. But this is clearly not supported by the facts.

Certainly, connections between the various cartels in Mexico and politicians at the local, state and even federal levels are longstanding and very well documented. However, while such connections can provide some degree of shelter and a great deal of intelligence regarding police and military operations, they by no means have been useful in completely shielding cartel figures from the government.

For example, the cartel leader who built arguably the best intelligence network within the Mexican government was Alfredo Beltran Leyva. Even though some of the Beltran Leyva Organization's alleged informants have been released from prison in recent months -- including former Mexican drug czar Noe Ramirez Mandujano and former army Gen. Tomas Angeles Dauahare -- due to questions about the credibility of a witness who testified against them, the cartel still possessed an extensive and impressive network of agents of influence and human intelligence sources. Yet this expansive network could not prevent Beltran Leyva himself from being arrested in January 2008, one of his brothers, Arturo, from being killed in December 2009 or another, Carlos, from being arrested two weeks later.  

Clearly, agents of influence and intelligence sources cannot provide universal protection from the government. This is because while corruption is widespread in Mexico, it is not homogenous at any level, and collusion does not imply exclusive or consistent support. Some politicians are on the payrolls of multiple cartels, and while one member of a political party or government institution can be in the employ of a certain cartel, their colleagues may be on the payrolls of others.

Because of this, agents of influence and information sources in the Mexican government have not been able to provide absolute protection to El Chapo and the Sinaloa Federation. For example, the Beltran Leyva Organization was a part of the Sinaloa Federation until after Alfredo Beltran Leyva's arrest, when rumors that El Chapo had betrayed Alfredo compelled Arturo Beltran Leyva to break away from, and declare war on, the Sinaloa Federation. It has never been clear if the rumors of the betrayal were true or if they were part of an information operation employed by former President Felipe Calderon's administration and the U.S. Drug Enforcement Administration to divide and decapitate the cartels. Either way, the rumor was taken as fact, and the loss of the Beltran Leyva Organization was a big blow to the Sinaloa Federation.

El Chapo's group lost not only the Beltran Leyvas' intelligence and logistics networks but also their guns. The brothers had been dispatched to Nuevo Laredo when Sinaloa was attempting to wrest control of the plaza from the Gulf cartel following the arrest of Gulf leader Osiel Cardenas Guillen in 2003. After Alfredo's arrest, those same forces that had become battle-hardened after warring with Los Zetas for control of Nuevo Laredo began to attack their former Sinaloa Federation allies. They even killed El Chapo's son, Edgar Guzman Beltran, in Culiacan in May 2008. To this day, certain remnants of the Beltran Leyva Organization, including an enforcer group known as Los Mazatlecos, pose a potent threat to the Sinaloa Federation throughout Sinaloa state.

A similar dynamic played out following the July 2010 death of Ignacio "El Nacho" Coronel Villarreal, the leader of a Sinaloa Federation faction based in Guadalajara. The organization splintered into several factions, some of which are now at war with the Sinaloa Federation after blaming El Chapo for betraying Coronel. These factions are also battling each other for control of Guadalajara. In this case, not only did the Sinaloa Federation lose significant revenue from the methamphetamine produced by Coronel's organization (Coronel was known as the "King of Crystal"), but Guadalajara has now become a hotly contested city rather than a Sinaloa stronghold. The largest of the Coronel factions, the Cartel de Jalisco Nueva Generacion, which is at war with the Sinaloa Federation, has become one of the fastest-growing cartels in the country in terms of territory, and it poses a significant threat to the remaining Sinaloa factions headed by El Chapo, Ismael "El Mayo" Zambada Garcia and Juan "El Azul" Jose Esparragoza Moreno, along with their allies in the Knights Templar and the Gulf cartel.

Speaking of El Mayo and El Azul, it is important to recognize that the Sinaloa Federation does not operate as a single hierarchical organization under El Chapo. While El Chapo gets most of the media attention, El Mayo and El Azul are also members of the triumvirate that guides the cartel's activities. Sinaloa's structure as a network of separate groups has helped the federation weather the loss of the Beltran Leyva and Coronel organizations. This also means that even if El Chapo is removed from the equation, his organization would likely continue, as would the factions led by El Mayo and El Azul -- though there is always the risk that the fall of such an apex leader could lead to the type of balkanization we have seen affect the Beltran Leyva and Coronel organizations.
Sinaloa Losses to Government Operations

Whether or not El Chapo and his triumvirate partners betrayed Alfredo Beltran Leyva and Coronel to the government, it is still not accurate to maintain that the Sinaloa Federation has not been affected by the campaign to splinter and decapitate the cartels. Besides losing two powerful organizations from its network, the Sinaloa Federation also has lost a number of key individuals, including:

    Ines Coronel Barreras: El Chapo's father-in-law and an important smuggler in Sonora. Arrested with his son in April 2013.
    Jonathan "El Fantasma" Salas Aviles: A key Sinaloa lieutenant and hit man. Arrested in February 2013.
    Jose Angel "El Changel" Coronel Carrasco: A prominent figure in Sinaloa illicit drug production operations in the area known as the Golden Triangle near the borders of Sinaloa, Chihuahua and Durango states. Arrested in January 2013.
    Jesus Alfredo "El Muneco" Salazar Ramirez (El Muneco): A key lieutenant for El Chapo who oversaw production and trafficking of illicit drugs in Sonora and Chihuahua states. Arrested in November 2012.
    Jose Manuel "El M1" Torres Felix: A key lieutenant for El Mayo reportedly in charge of his security team. Killed in a shootout with the Mexican military in October 2012.
    Jose Antonio "El Jaguar" Torres Marrufo: A leader of the Gente Nueva enforcer group. Arrested in February 2012.
    Noel "El Flaco" Salgueiro Nevarez: A leader of the Gente Nueva enforcer group. Arrested in October 2011.
    Jesus Vicente "El Vicentillo" Zambada Niebla: The son of El Mayo. Arrested in March 2009 and extradited to the United States to stand trial.

It is also significant to recognize that this list does not count the personnel lost in confrontations with opposing cartels or arrested in other countries; these are just some of the key Sinaloa members lost to the Mexican government. Again, it is hard to understand how anyone can argue that Sinaloa has not been affected by government operations -- or that those arrested or killed were just low-ranking cannon fodder given up to provide an appearance that the government is attacking Sinaloa.

Interestingly, the myth that El Chapo reached an agreement with the government is nearly as old as it is immune to facts. I can clearly recall that when President Felipe Calderon came into power in December 2006, there were whisperings and rumors of some sort of familial link between Calderon and El Chapo and that Calderon and his National Action Party had somehow reached a deal with El Chapo that would protect the Sinaloa Federation from government action. As the partial list above shows, this was not the case. The Calderon administration did go after the Sinaloa Federation, as is Pena Nieto.

That the rumors span two administrations headed by presidents from opposing political parties -- and that the myths fly in the face of the facts -- highlights the dangers that such narratives pose to analysts. These myths shape the way facts are perceived and memorized -- or ignored. In this way, they introduce what is known as cognitive bias into an analysis of a situation or phenomenon. This cognitive bias can then lead the analysis astray -- and recent press articles demonstrate that a great deal of cognitive bias is still floating around regarding El Chapo.

Read more: The Mythical El Chapo | Stratfor

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 vice admiral of the Mexican navy, Carlos Miguel Salazar, was killed in an ambush on July 27 in northern Michoacan state. Just two days later on July 29, the police chief of the Lazaro Cardenas municipality in southern Michoacan was also found executed. It is still unclear at this point whether the two assassinations are part of an intensifying campaign to target higher-level officials, but it nonetheless does signal an increasingly precarious security environment. Unlike other places in Mexico currently experiencing high levels of violence, something in Michoacan has struck a nerve with the government and is compelling a more concerted military intervention.

In the days and weeks to come, we can expect to see increased violence in Michoacan as local vigilante groups press for protection, organized crime groups entrench their positions, and the federal government attempts to restore order to this notoriously lawless region. Ultimately however, the military deployment will prove to only be a temporary solution to a much more deeply rooted problem.

Two main developments led to the militarily intervention in Michoacan:

• Self-defense militias have emerged, threatening to further destabilize an already explosive region. These militias formed to provide protection against the leading organized crime group in the region -- the pseudo-religious Knights Templar. There are also claims that the vigilante groups are supported by the Knights Templar rival Cartel de Jalisco Nueva Generacion as a means to make inroads into the strategic trafficking corridor. Regardless of how these groups emerged, or by whom they are supported, they have caused violence to spike and compelled the military to come in and prevent a further escalation.
• Michoacan is important because it is home to the strategic port of Lazaro Cardenas and it lies in close proximity to Mexico’s political and economic core. In terms of non-oil volume, Lazaro Cardenas is Mexico’s largest port. It is also North America’s fastest-growing port, and Mexico’s only port capable of handling post-Panamax sized vessels. The port is connected by modern, efficient road and rail infrastructure to the country’s emerging manufacturing core in the states of Guanajuato, Queretaro and Mexico State. It also lies between Mexico’s two largest cities, Mexico City and Guadalajara. Increasing violence in Michoacan has the ability to seriously affect commerce and economic activity.

As the flow of illicit goods often follows regular commercial routes, this transportation artery from the port to the core is essential territory for both the organized crime groups and the national government. Neither side can allow the other to make considerable inroads.

But why is the government leaning on the military and not the local public security officials? While many states in Mexico suffer from wide-scale political corruption, Michoacan is among the worst. Some seven out of 10 municipalities are reportedly infiltrated by organized crime. As a result, relying on the state-controlled law enforcement bodies has become problematic.

Michoacan’s mixture of vigilante militias, organized crime and corruption has led to some concern that the state is spiraling out of control. Because of the port and the close proximity to Mexico’s core, this is not an option for the government, which will do everything in its power to prevent an already unstable region from further deteriorating. However, there are no easy fixes in Michoacan, and the military’s presence will likely only be a temporary solution to a deeper, more fundamental problem.

Read more: Mexico's Military Intervenes In Michoacan | Stratfor

[Crafty_Dog]

Summary

Mexican President Enrique Pena Nieto is expected to submit his party's landmark proposal for energy reform to Mexico's Congress in the coming week, culminating nearly a year of speculation and intrigue. Despite the controversy over the reforms, which proved troublesome for many previous administrations, Pena Nieto and the Institutional Revolutionary Party will enact measures capable of revolutionizing Mexico's energy sector. Unlike previous attempts, this energy reform package has the support of Mexico's largest opposition group, the National Action Party. The second-largest opposition group, the Democratic Revolutionary Party, is too weak to seriously hinder the bill's passage. While lawmakers will debate the finer points of the reforms, as well as any subsequent pieces of legislation, Mexico will soon see the most transformative adjustment to its energy sector in more than half a century -- even as it sees some public unrest in response to the bill.
Analysis

In December 2012, Mexico's three major parties agreed in the Pact for Mexico to reform the energy sector. But the promise was intentionally vague, leaving ample space for tri-partisan cooperation. Now, eight months later, Mexico's ruling party is poised to announce its proposal for reforming the country's struggling energy sector.

On one end of the spectrum, the leftist Democratic Revolutionary Party supports the most limited energy reform, focusing solely on improving Petroleos Mexicanos, commonly known as Pemex, from within. It does not advocate changing the constitution's Article 27, which prohibits concessions in the energy sector. This kind of reform would make the company more profitable but would not address the country's most pressing issue: the need to expand hydrocarbon exploration and production from the comparatively easy and inexpensive Bay of Campeche into the more difficult, more capital-intensive deep-water plays in the Gulf of Mexico and in the shale deposits in the northeastern basins.

Mexico's Main Oil and Natural Gas Regions

On the other end of the spectrum, the right-of-center National Action Party previously has supported more comprehensive proposals, including the idea of partially privatizing Pemex. Given the nationalist fervor surrounding Mexico's oil -- a fervor whose roots can be found in the post-Mexican Revolution period -- this proposal is highly controversial and stands little chance of acceptance. While there is a broad consensus on the need to allow more private partnerships and promote competition, a consensus has yet to be reached on privatizing Pemex or on allowing private firms to own the oil itself.

In the middle of these two extremes lies the proposal the ruling party is likely to put forth. The Institutional Revolutionary Party has suggested numerous times that it is interested in a transformative, structural reform, but one that stops short of privatizing Pemex. This is widely understood to mean improving Pemex operationally, introducing more attractive contracting models and perhaps even breaking Pemex's and the Federal Electricity Commission's monopolies. How the ruling party will go about doing this is still unknown. In theory it could implement tax reform, pension reform or subsidy reform. Otherwise it could require Pemex to have a certain stake in any offshore project, or it could give Pemex certain lucrative areas for exploration. But essentially, this middle-ground proposal allows the country to address declining hydrocarbon production without ceding control over its most lucrative natural resource and associated state-owned enterprise.
Obstacles to Reform

Pushing through the desired reforms likely will require a constitutional amendment -- many reforms passed under the current administration have. But to amend the constitution, the Institutional Revolutionary Party would have to partner with another party to secure the two-thirds majority in the federal legislature and a simple majority of all state legislatures. The National Action Party is the most logical choice because it has been trying for 12 years to reform the energy sector. Its proposal is transformative, while the Democratic Revolutionary Party's ideas are essentially more of the same.

In late July, the National Action Party proposed a reform that would change articles 25, 27 and 28 of the constitution. In Article 25, the party introduces environmentally friendly qualifiers, likely to curry favor with Mexico's Green Party and satisfy the Pact for Mexico promise to make Pemex a central force in the fight against climate change. In Article 27, it proposes scrapping the prohibition of concessions, thereby creating the opportunity for increased foreign investment. In Article 28, it proposes breaking the monopolies in the energy and electricity sectors, thus allowing private firms to compete all along the production chain: exploration and production, distribution, refining and retail. This would relieve some of the burden on Pemex to operate certain sections of the supply chain at a loss and enable the firm to focus on its more profitable activities in the upstream sections.

The proposal also calls for the creation of a Mexican Petroleum Fund to manage petroleum proceeds. Moreover, it would allow the National Hydrocarbon Commission and the Energy Regulatory Commission to grant concessions to the private sector in the upstream and the downstream/electricity sectors, respectively. The National Action Party also proposes keeping Pemex and the Federal Electricity Commission as state-owned companies but removing them from the federal budget and granting them operational autonomy, as well as a 10-year plan to reduce the federal government's dependence on Pemex for tax revenues. This ensures a soft landing and gives the government time to develop other sources of fiscal revenue.

None of this directly contradicts the broad outline of what the ruling party is expected to propose. It addresses the need to make Pemex more efficient, and it grants the government the ability to form new contracting models -- effectively breaking Pemex's and the Federal Electricity Commission's monopolies. There is no privatization of Pemex, and there is nothing to suggest that the oil will cease being the property of the Mexican nation. Details are still scarce, but recent reports suggest that the government will find a way to give foreign firms the juridical certainty and the profit margins needed to incentivize risky, capital-intensive endeavors without transferring ownership of the resource itself. So while the Institutional Revolutionary Party's proposal will differ from the National Action Party's, those differences likely will be surmountable.
Growing Support for Pena Nieto's Plan

Pena Nieto has used the past eight months to consolidate support for the reform from within his party. In the last week of July, the Mexican government came to a wage increase agreement with the powerful oil workers union and had talks with some 18 Institutional Revolutionary Party governors whose support will be critical for passage of the constitutional reform. Unlike the National Action Party before it, the Institutional Revolutionary Party has been bringing all of the major interest groups on board before releasing the proposal, suggesting that once it is released it will be debated and approved relatively quickly, possibly by year's end. Recent delays in releasing the proposal suggest the government is addressing disagreements pre-emptively rather than waiting until later on to address internal concerns.

With few major disagreements between the National Action Party and the ruling party on the proposal, and with the major pillars of the ruling party apparently in favor of the reforms, Pena Nieto's efforts now are more of a public relations campaign than anything else. The opposition Democratic Revolutionary Party is trying to characterize the reform as a brazen and undemocratic privatization. By contrast, the Institutional Revolutionary Party has vociferously denied that the reforms will privatize Pemex and change the ownership status of the country's oil reserves.

Privatization is a highly ambiguous term in the context of Mexico's energy sector reforms. The Democratic Revolutionary Party equates privatization to allowing foreign and private firms to gain concessions, and the other two major parties equate privatization to allowing private investment in Pemex. Ultimately, the task for the Mexican government is to forge a proposal that significantly addresses problems facing the energy sector while convincingly arguing that the reform is not tantamount to privatization.

The Democratic Revolutionary Party has announced that it will hold a non-binding national referendum in half of Mexico's states on Aug. 25 and in the other half on Sept. 1. (The referendum coincides with the start of Congress's regular session.) The party also has planned a national demonstration on Sept. 8. These measures portend a fractious September, though the Democratic Revolutionary Party's ability to impede the passage of the bill is doubtful. Andres Manuel Lopez Obrador, a former presidential candidate for the party, managed to bring some 30,000 people out to protest an energy reform in 2008, but the Democratic Revolutionary Party's popularity has since waned, as has the popularity of Lopez Obrador, who has left his former party.

The Democratic Revolutionary Party can protest the bill but only at the risk of appearing obstructionist. In the meantime, the Institutional Revolutionary Party and National Action Party will go on to pass one of Mexico's most transformative reforms in decades. 

Read more: Mexico: On the Brink of Major Energy Reform | Stratfor

[Crafty_Dog]

By Tristan Reed

Mexico Security Analyst

Editor's Note: This Security Weekly assesses the most significant cartel-related developments of the third quarter of 2013 and provides updated profiles of Mexico's powerful criminal cartels, as well as a forecast for the rest of this year. It is the executive summary of a more detailed report available to clients of our Mexico Security Monitor service.

Despite the high-profile arrests of Los Zetas' top leader, Miguel "Z-40" Trevino Morales, on July 15 and Gulf cartel leader Mario "El Pelon" Ramirez Trevino on Aug. 17, the third quarter much like the second quarter experienced a continuation of existing trends in organized crime. Tit-for-tat cartel conflicts continued, but Mexico's various organized criminal groups largely controlled the same territory they did at the beginning of the quarter. The third quarter did see intermittent periods of escalated violence by rival groups seeking territory. These included the Cartel de Jalisco Nueva Generacion's conflict with the Knights Templar in Michoacan, Guerrero, Guanajuato and Jalisco states and the Velazquez faction of the Gulf cartel's conflict with Los Zetas in northern and central Mexico.

While no criminal organization in Mexico suffered any substantial losses in capabilities or territory in the third quarter, the fourth quarter will likely see variations in this trend, particularly as cartels adjust to the arrest of Mario Ramirez Trevino. The Velazquez faction will become the widest-operating branch of the Gulf cartel and the most active challenger to Los Zetas for control of the northeast. As Stratfor noted during our first quarterly update, the Velazquez faction was formerly led by the now-captured Ivan "El Taliban" Velazquez Caballero, a former regional boss for Los Zetas, which split from Los Zetas around March 2012 and later returned to operating under the Gulf cartel name. The Velazquez faction continues to operate unhindered by the arrest of Ivan Velazquez on Sept. 26, 2012.

There are a variety of reasons for the relatively stable cartel dynamics in Mexico during the third quarter. For one, it has been less than three months since Miguel Trevino was detained by the Mexican navy and less than two since Mario Ramirez's detention. Miguel Trevino's brother, Omar Trevino, appears to have assumed leadership over Los Zetas, and -- notably -- there has been no significant challenge to his new role. Mario Ramirez's arrest will certainly alter the dynamic within the umbrella of the Gulf cartel, particularly as it relates to Gulf allies such as the Knights Templar and the Sinaloa Federation, and Gulf rivals, such as Los Zetas. Any changes related to dynamics within the Gulf cartel have yet to be reflected in open source reporting.

Also, the balkanization of Mexican organized crime has shifted the focus of all criminal organizations from planning new incursions to addressing existing challenges within their territory. The Sinaloa Federation continues to combat regional rivals in northwestern Mexico, including northern Sinaloa, southwestern Chihuahua, and northern Sonora state. Los Zetas continue their fight to regain complete control over much of Zacatecas state after Velazquez Caballero's split in 2012. Los Zetas also continued to engage in violent attacks against the Gulf cartel in the rest of northeastern Mexico and against the Knights Templar (and possibly Gulf cartel) in Tabasco state, although these offensives have not accomplished any real gains. The Cartel de Jalisco Nueva Generacion and the Knights Templar continued to focus on their traditional strongholds in southwestern Mexico, trading tit-for-tat incursions into one another's territories.

Moreover, many of the changes in cartel dynamics reported in the third quarter actually occurred during the first quarter. For example, Stratfor first identified the arrival of a new challenger to Los Zetas into Tabasco state operating under the name People United Against Crime (commonly referred to by its Spanish acronym, PUCD), but during the second and particularly third quarter it became apparent that People United Against Crime are really just pre-existing Zetas rivals operating under a new label (most likely the Knights Templar or its allies, the Velazquez faction of the Gulf cartel). And it came to light in the third quarter that Los Zetas have entered the Ciudad Juarez area in northern Chihuahua, though they actually began building their presence at least as far back as the first quarter.

Areas of Cartel Influence in Mexico, Fourth Quarter 2013

In contrast to the minimal disruptions in the overall cartel landscape in Mexico in the past two quarters, the fourth quarter will likely see substantial changes. The Gulf cartel will likely feel the effects of Mario Ramirez's capture, which will shift the balance of power in Tamaulipas state and thus invite another offensive by Los Zetas or further control by Gulf allies, particularly the Knights Templar. Meanwhile, should Omar Trevino be capable of retaining the organization's ability to stage significant incursions into Sinaloa Federation territory, Los Zetas efforts in Ciudad Juarez could spark a new turf war in Chihuahua state.
Overall Violence

Los Zetas

After the July 15 capture by the Mexican navy of top Zeta leader Miguel "Z-40" Trevino Morales, his brother Omar "Z-42" Trevino ascended to the top position within the criminal organization. Thus far, it does not appear that anyone within Los Zetas has publicly challenged Omar Trevino.

Many of the challenges to Los Zetas by rivals during the second quarter continued into the third quarter. While efforts by the Velazquez faction of the Gulf cartel to seize Zetas territory were renewed in part because of Miguel Trevino's capture, primarily affecting Zacatecas state and southern Tamaulipas state, the renewed fighting is only a continuation of the dispute that began after the former leader of the Velazquez faction, Ivan "El Taliban" Velazquez Caballero, split from Los Zetas around March 2012. Elsewhere, Los Zetas have been unable to mitigate challenges for territorial control in some regions, a trend that emerged before Miguel Trevino's arrest.

Tamaulipas and Zacatecas states remain the most critical areas to follow in assessing the integrity and capability of Los Zetas, particularly Nuevo Laredo, Tamaulipas state. This is due to the value of Nuevo Laredo to Los Zetas' operational capabilities and to the Velazquez faction of the Gulf cartel being the most active and closest rival of Los Zetas in geographic proximity to Nuevo Laredo. While the Velazquez network operates along the entire eastern coast of Mexico, its center of operations remains in northern and central Mexico, including Zacatecas, Coahuila and San Luis Potosi states; its reach extends into southern Tamaulipas and Nuevo Leon states (specifically Monterrey) thanks to its ties to other Gulf cartel factions.

With the exception of Zacatecas during September, however, there have been no indications that such violence has yet posed a substantial threat to Los Zetas operations in the aforementioned states. The lack of change in criminal activities in Nuevo Laredo, including inter-cartel violence, has been most notable in the Los Zetas-Gulf cartel competition. This suggests Los Zetas' rivals have yet to find the opportunity to mount another incursion against them.

Los Zetas have thus far maintained their capabilities in terms of drug smuggling and other criminal activity plus the ability to defend against their rivals despite the loss of their top leader, and the organization continues to operate deep into rival territory. During the third quarter of 2013, it became apparent that Los Zetas have been operating in the Sinaloa Federation-controlled territory of northern Chihuahua state, most notably in Ciudad Juarez, via its allies La Linea and Los Aztecas (both former enforcer groups of the Vicente Carrillo Fuentes organization, better known as the Juarez cartel). Los Zetas are funding and training both groups, but they have yet to operate in an offensive manner in Ciudad Juarez at present.

However, Los Zetas have been using the area for their trafficking operations into the United States, particularly southeastern Ciudad Juarez. In exchange for support, Los Zetas can operate in areas still controlled by La Linea around Ciudad Juarez, helping to avoid an overt conflict with the Sinaloa Federation. Stratfor has received reports that Los Zetas have attempted to avoid drawing attention to their presence by eschewing violent acts. Although Los Zetas' presence in the area only became apparent in the third quarter, it had begun prior to the arrest of Miguel Trevino.

Although Los Zetas do not overtly appear to have suffered any substantial losses in operational capabilities since Miguel Trevino's arrest, uncertainties persist about whether his brother, Omar Trevino, can successfully manage one of the two largest criminal organizations in Mexico. These uncertainties make it difficult to forecast Los Zetas' strategy and the potential challenges that could lead to a degraded security climate in its own and rival territories. Should the Gulf cartel in Zacatecas state make progress in its territorial dispute with Los Zetas, rivals to Los Zetas would likely vie for territory closer to Nuevo Laredo, probably leading to an increase in violence. Additionally, should Los Zetas try to use their established presence in Ciudad Juarez to attempt a takeover from the Sinaloa Federation, violence in Chihuahua would likely increase drastically.

Gulf Cartel

The Gulf cartel suffered yet another substantial blow to its leadership during the third quarter with the capture of its most powerful leader, Mario "El Pelon" Ramirez Trevino, on Aug. 17. This arrest will likely lead to further tumult within the Gulf cartel, which had already devolved from a cohesive criminal organization into an umbrella group with factions loyal to individual leaders but operating on a transnational level.

The fall of Ramirez will likely propel the Velazquez faction of the Gulf cartel to become one of the most powerful Gulf cartel factions in the northeast during the fourth quarter, barring any unforeseen captures or deaths at the hands of Mexican authorities. This is because the Velazquez faction maintains the widest geographic reach in Mexico under a cohesive network. The leadership of the Velazquez faction since the arrest of Ivan Velazquez in September 2012 remains something of a mystery, though likely successors include two of his brothers, Daniel "El Talibancillo" Velazquez Caballero and Rolando "El Rolys" Velazquez Caballero.

The most significant change resulting from Ramirez's capture during the fourth quarter will likely be yet another reshuffle of allegiances and roles among Gulf cartel factions in addition to Ramirez's replacement. This will include another split within the Gulf cartel umbrella, assimilation at some level of Gulf cartel cells into existing factions or an external organization such as the Knights Templar and even Los Zetas, and an increased presence of the Knights Templar or the Sinaloa Federation in Tamaulipas state, both of which have thus far propped up the Gulf cartel in its conflict with Los Zetas. Of the current Gulf cartel factions, the Velazquez faction will become the most formidable rival of Los Zetas in the northeast.

Knights Templar and Cartel de Jalisco Nueva Generacion

While the northeastern states of Mexico are typically the most fluid in terms of cartel dynamics and security due to the Zetas-Gulf cartel conflict, violence as a result of the ongoing dispute between the Cartel de Jalisco Nueva Generacion and the Knights Templar turned southwestern Mexico, particularly Guerrero, Michoacan and Jalisco states, into the most active in terms of inter-cartel violence.

As stated during our first quarterly update of 2013, the Cartel de Jalisco Nueva Generacion has made a substantial bid to wrest control of the Knights Templar stronghold of Michoacan state. With community police in southwestern and northern Michoacan state a contributing factor, inter-cartel violence escalated dramatically during the third quarter and will likely continue at present levels or even escalate further during the fourth quarter.

This has placed the Knights Templar on the defensive, something made apparent by their escalated aggression against authorities during the third quarter and the shifting of the focus of their propaganda from Los Zetas to both the Cartel de Jalisco Nueva Generacion and the community police. Despite this, the Knights Templar probably will not lose substantial territory in Michoacan state nor lose their ability to resist the Cartel de Jalisco Nueva Generacion incursion during the fourth quarter. The Knights Templar are simply firmly planted in Michoacan. The conflict will continue to pose a substantial security threat throughout the state.

Sinaloa Federation

With the exception of Los Zetas in Ciudad Juarez, little has changed during the third quarter regarding the Sinaloa Federation. As Stratfor has noted, the Sinaloa Federation has been dealing with regional conflicts within its territory in the northwest. This includes the golden triangle region (encompassing northern Sinaloa, northwestern Durango and southwestern Chihuahua), northern Sonora state and southern Chihuahua state. These conflicts continued over the third quarter and will likely remain on course throughout the fourth quarter. None of the existing conflicts will present any serious challenge to the Sinaloa Federation's territorial control or criminal operations during the fourth quarter.

As mentioned above, Los Zetas have built up a presence around Ciudad Juarez during 2013, potentially marking a new criminal aggressor in Ciudad Juarez. The city already has seen a turf war between the Sinaloa Federation and the Juarez cartel and its allies, La Linea and Los Aztecas, since 2008. Thus far, Los Zetas' presence in Ciudad Juarez has largely been nonaggressive, and they have apparently limited their operations to trafficking drugs into far western Texas.

The Sinaloa Federation lost a prominent lieutenant overseeing the region, Gabino "El Ingeniero" Salas Valenciano, on Aug. 8 when Salas died in a firefight with the Mexican army. While no public reports suggest that Los Zetas are attempting to take advantage of his death by striking against Sinaloa interests, it is clear that Salas' death has triggered some conflict between La Linea and the Sinaloa Federation. On Sept. 22, gunmen opened fire on a family celebrating a local baseball game in Loma Blanca, a community located in southeastern Ciudad Juarez. Ten people died in the attack. While the identity and motive of the shooters remain unknown, some Mexican news agencies have attributed the killing to La Linea. Soon after the shooting, authorities discovered messages in at least eight locations in Ciudad Juarez attributing the shooting to La Linea. Notably, the messages were signed "the people of Gavino (sic) Salas."

While such messages cannot alone confirm the identity of the attackers or suggest a motivation, they do suggest at least a momentary escalation of violence between the Sinaloa Federation and La Linea. Such a renewed violent campaign could present a moment of opportunity to persuade their allies to attempt to wrest Ciudad Juarez from the Sinaloa Federation -- a scenario that would certainly lead to a sharp uptick in violence through Ciudad Juarez and possibly much of northern Chihuahua.

[Crafty_Dog]

http://www.clarionproject.org/analysis/hezbollah-tattoos-increasing-found-us-prison-inmates

[DDF]

Interesting. I think we were talking about this a couple of years ago. Looking into it.

[Crafty_Dog]

http://www.dailymail.co.uk/news/article-2534496/Mexican-vigilante-gunmen-disarm-local-POLICE-rid-town-feared-Knights-Templar-drug-cartel.html

[Crafty_Dog]

http://www.foxnews.com/world/2014/01/16/mexican-vigilantes-against-drug-cartels-reject-disarming-in-standoff-with/?intcmp=latestnews

[Crafty_Dog]

 Mexico's Drug War: Balkanization Continues in the Northeast and Northwest
Security Weekly
Thursday, January 16, 2014 - 04:04 Print Text Size
Stratfor

Editor's Note: This week's Security Weekly summarizes our annual Mexico drug cartel report, in which we assess the most significant developments of 2013 and provide updated profiles of the country's powerful criminal cartels as well as a forecast for 2014. The report is a product of the coverage we maintain through our Mexico Security Memo, quarterly updates and other analyses that we produce throughout the year as part of the Mexico Security Monitor service.

By Tristan Reed
Mexico Security Analyst

Organized crime in Mexico diversified and contorted in 2013. This resulted from the balkanization of Mexico's transnational criminal organizations, in which even groups with a national (and in some cases, international) reach such as Los Zetas and the Sinaloa Federation focused more on fighting rivals near their strongholds rather than on offensives further afield.

While the nationwide conflict between Los Zetas and the Sinaloa Federation played a smaller role in organized crime-related turf wars compared to 2012, the two criminal organizations and the separate challenges from rivals they face will still play a central role in shaping security in their respective areas of operations throughout 2014. Los Zetas remain the most powerful and widely operating crime group in northeastern Mexico. But they are not immune to challenges from various rivals in their region, such as factions of the Gulf cartel, most of which enjoy support from the Knights Templar or the Sinaloa Federation.

Meanwhile, the Sinaloa Federation continues to maintain its territorial base and level of drug trafficking operations in northwestern Mexico in the face of rivals, particularly criminal groups originating from the old Beltran Leyva Organization. Leadership losses during the last quarter of 2013 mean the Sinaloa Federation will have to scramble to adapt -- or face another internal division and possibly even substantial territorial gains by regional rivals, both of which could sharply raise levels of inter-cartel violence in the northwest.
Reorganization in the Northeast

2014 will see substantial changes in northeastern Mexico, which since 2010 has been the center of operations for -- and thereby the center of conflict between -- Los Zetas and the Gulf cartel. The arrest in 2012 of Gulf cartel leader Jorge Eduardo "El Coss" Costilla Sanchez, which contributed to further Gulf cartel infighting, and Ivan "El Taliban" Velazquez Caballero's split from Los Zetas blurred the dividing lines between the two groups. Leaders operating under both names have shifted allegiances to their rivals and even to outside groups like the Knights Templar and the Sinaloa Federation. The eventual outcome of such realignments remains to be seen. One possible scenario includes the creation of a new crime group in the northeast consisting of elements from Los Zetas and the Gulf cartel operating in tandem with the Sinaloa Federation and the Knights Templar. Alternatively, Los Zetas or the Knights Templar could absorb some Gulf cartel factions. Either scenario could lead to new dynamics in former Gulf strongholds in states including Tamaulipas, Nuevo Leon and Coahuila.

Los Zetas split from the Gulf cartel in 2010, causing northeastern Mexico to experience one of the most active and violent criminal conflicts in the country ever since. After the split, the two groups immediately began to fight in several states throughout Mexico, particularly Tamaulipas, Nuevo Leon and Coahuila. By 2011, it became apparent that Los Zetas had largely bested their former employer in much of the territory the Gulf cartel controlled prior to the split. By 2012, the Gulf cartel had suffered further losses at the hands of Los Zetas, Mexican authorities and, most of all, from infighting. Such losses initially suggested the Gulf cartel, once among the most powerful criminal organizations in Mexico, would soon unravel.

However, the Gulf cartel criminal brand name has persisted even though the group is no longer a cohesive criminal organization. Instead, the Gulf cartel now comprises a collection of groups mostly based in Tamaulipas that all use the same name. Despite this fractured nature, groups operating under the Gulf name face constant threats from Los Zetas and the military. This is because some drug traffickers operating under the Gulf cartel name are able to move significant quantities of illegal drugs into the United States through ports of entry primarily located in Reynosa and Matamoros with the help of outsiders like the Sinaloa Federation and the Knights Templar, hence drawing attention from Los Zetas and the government.
Areas of Cartel Influence in Mexico, Fourth Quarter 2013
Click to Enlarge

All Gulf cartel factions -- whose exact dividing lines remain unclear -- seem to operate primarily from the Tamaulipas cities of Reynosa, Tampico and Matamoros. The Velazquez faction, which had the widest reach during 2013, is an exception: It is based in Zacatecas and operates in Tamaulipas, Coahuila, San Luis Potosi, Nuevo Leon, Quintana Roo, Veracruz, Jalisco and Tabasco states. The faction emerged after Velazquez, a regional leader for Los Zetas based in Zacatecas, declared war against now-detained Los Zetas top leader Miguel "Z-40" Trevino Morales at the beginning of 2012.

Just prior to Velazquez's own arrest in September 2012, he adopted the Gulf cartel name and aligned with other Gulf cartel factions and the Knights Templar (which already cooperated with some Gulf cartel factions). Now led by his brothers Rolando and Daniel, the Velazquez faction of the Gulf cartel is Los Zetas' most active rival. Following the arrest of the most powerful Gulf cartel leader, Mario "Pelon" Ramirez Trevino, the Gulf cartel umbrella began experiencing additional internal rifts, but the Velazquez faction has maintained its status as the strongest faction.

Though not based in Tamaulipas, it operates on the U.S.-Mexico border in Tamaulipas state and wants to wrest control of Nuevo Laredo from Los Zetas, given the opportunity. The Velazquez faction tried unsuccessfully to seize the city from Los Zetas in March 2012 under the guise of the Sinaloa Federation. Without a strong leader like Ramirez to oversee the Gulf cartel factions in Tamaulipas, the Velazquez faction will likely continue to fill the void in 2014. It will use its existing relations with other Gulf cartel factions to establish a stronger front in combating Los Zetas in Tamaulipas state, with the specific goal of taking Nuevo Laredo. This could create escalated levels of violence in Reynosa in 2014 as Los Zetas attempt to defend themselves against such incursions.

With new Gulf cartel infighting, new Los Zetas leadership and the persistent threat of the Knights Templar and the Velazquez faction to Los Zetas in Tamaulipas state, other Gulf faction leaders will have to decide where to place their allegiance. Each Gulf cartel faction has its own distinct relations with external groups including Los Zetas. As Gulf cartel factions compete against one another -- a process that naturally has weakened them -- these separate relations with other criminal groups will increasingly diverge as each faction seeks to ensure its respective survival. This could result in some aligning with Los Zetas or strengthening ties with the Velazquez faction or even the Knights Templar.

The Knights Templar use the border cities of Reynosa and Matamoros to traffic humans and drugs into the United States. The Michoacan-based criminal organization began in 2012 to help some Gulf cartel factions defend their territory against Los Zetas. As the Gulf cartel continued to suffer at the hands of infighting and military operations, factions' reliance on the Knights Templar increased. Notably, the Knights Templar has not sought to propagate its brand name in northeastern Mexico the way it has in southwestern Mexico. It will maintain its presence in northeastern Mexico in 2014 as it tries to ensure that its transportation routes into the United States remain open.

Although Velazquez's war against Miguel Trevino created divisions in Los Zetas in states including Coahuila, Zacatecas, San Luis Potosi, Nuevo Leon, Tamaulipas and Quintana Roo, Los Zetas' hold over its territories in Tamaulipas state and Nuevo Leon has not weakened. Meanwhile, Miguel Trevino's detention has had little impact on Los Zetas' operations and territorial control. Miguel Trevino's brother, Omar "Z-42" Trevino, now runs Los Zetas.

Continued Gulf cartel infighting even helped bolster Los Zetas' presence in Tamaulipas state in 2013, when Los Zetas' activity in Reynosa -- a traditional Gulf stronghold -- increased. Los Zetas subsequently began transporting drugs and undocumented migrants through Reynosa. Los Zetas entered Reynosa without much overt violence, suggesting either the Gulf cartel factions in Reynosa were not as concerned with Los Zetas as they were with other rival Gulf cartel factions or that a Gulf cartel leader in Reynosa possibly allowed Los Zetas to enter.

Given that Los Zetas have Omar Trevino to build and maintain relationships with other leaders of criminal networks while the Gulf cartel factions in Tamaulipas state have no real replacement for Mario Ramirez Trevino, Los Zetas will likely expand into other areas of Tamaulipas state in a similarly tranquil fashion. Matamoros, a valuable port of entry into the United States where Gulf infighting is emerging, is one of the most likely areas for this to happen during 2014. But Los Zetas will face a challenge from the increasingly expansive Velazquez faction of the Gulf cartel in Matamoros and beyond, something that creates the potential for increased violence in 2014.
The Sinaloa Federation

As our 2013 cartel annual report anticipated, the Sinaloa Federation, like Los Zetas, the Knights Templar and the Gulf cartel, faced numerous regional challenges. The Sinaloa Federation found these challenges in states such as Sinaloa, Sonora and Chihuahua, and they persisted throughout 2013. In fact, they grew substantially in the last month of 2013, when the Sinaloa Federation experienced several key losses of high-level leaders at the hands of unidentified gunmen and the government. On Dec. 11, an unknown assailant gunned down Jesus Gregorio "R-5" Villanueva Rodriguez in Sonora state. Gonzalo "Macho Prieto" Inzunza Inzunza was killed Dec. 18 in a targeted operation by the Mexican navy, also in Sonora state. Then on Dec. 30, Dutch authorities at Amsterdam Schiphol Airport arrested Jose Rodrigo "El Chino Antrax" Arechiga Gamboa. All three individuals operated directly beneath top-tier Sinaloa leaders such as Joaquin "El Chapo" Guzman Loera or Ismael "El Mayo" Zambada, and their responsibilities included defending Sinaloa's territory in Mexico's northwest.

Regional crime groups such as Los Mazatlecos in northern Sinaloa state, La Linea in western Chihuahua and southeast of Ciudad Juarez, and a remnant of the Beltran Leyva Organization led by Trinidad "El Chapo Trini" Olivias Valenzuela in Sonora state all have challenged Sinaloa Federation operations, contributing to violence in the region. Moreover, Los Zetas quietly began to operate just southeast of Ciudad Juarez, a city which the Sinaloa Federation has largely overtaken from its rivals in the Juarez cartel. While Los Zetas have not yet begun to operate violently near Ciudad Juarez, as Stratfor noted in the fourth quarter cartel update, the group has been propping up lower-level crime and enforcer groups that fall under the Juarez cartel umbrella, namely Los Aztecas and La Linea. With continued rival challenges, the introduction of Los Zetas into northern Chihuahua state, and a series of leadership losses, the Sinaloa Federation could well face a tougher year in 2014 than it did in 2013.

While the possibility exists that the Sinaloa Federation will continue to hold all its territory with no further challenges in 2014, Sinaloa leadership losses in 2013 plainly invite a stronger and more violent push for control by its rivals. While the Sinaloa losses could embolden the cartel's rivals and spark turf wars throughout northwest Mexico, a Sinaloa split would likely prove even more problematic. Each of the three Sinaloa Federation operators that were either arrested or killed in December led their own criminal network under the Sinaloa umbrella and each controlled its own operations and members. The loss of all three might prompt subgroups to suspect treachery by other Sinaloa Federation leaders (whether top-tier leaders like Guzman or Zambada or those of other Sinaloa subgroups), raising the risk of infighting.

The Sinaloa Federation's top leaders have extensive experience dealing with organizational splits dating back to the days of the Guadalajara cartel in the 1980s, which fragmented into regional plazas after U.S. law enforcement pressure triggered multiple conflicts between Guadalajara leaders. More recently, the Sinaloa Federation saw its organization in Jalisco state suffer an organizational break when Sinaloa lieutenant Ignacio "El Nacho" Coronel Villarreal died in 2010, eventually sparking considerable violence in the state. Prior to Coronel's death, the 2008 arrest of Alfredo Beltran Leyva and 2009 death of his brother, Arturo -- the top leaders of the old Beltran Leyva Organization, itself an offshoot of the Sinaloa Federation -- also contributed greatly to increased violence in northwestern Mexico. This history makes another Sinaloa split plausible, a scenario that would conform to the trend of the ongoing balkanization among Mexico's organized criminal groups. And that would increase the number of criminal groups operating in states such as Sonora, Sinaloa and Baja California, thereby increasing the likelihood of violence there.

Editor's Note: This Security Weekly assesses the most significant cartel-related developments in Mexico over the past year and provides a forecast for 2014. It is the executive summary of a more detailed report available to clients of our Mexico Security Monitor service.

Read more: Mexico's Drug War: Balkanization Continues in the Northeast and Northwest | Stratfor
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[Crafty_Dog]

second entry of the morning


Summary

The emergence of self-defense groups in Michoacan state in February 2013 has greatly complicated the nature of armed conflicts in the region, where violence had previously stemmed primarily from competition between rival criminal organizations. The self-defense militias have been expanding into a coordinated body and now operate in more than a dozen municipalities. Their primary goal is to combat the Knights Templar, the dominant criminal group in the state, while taking charge of public security in each town they enter, at times by disarming local police.

The expansion of the militias, along with the increase in violence related to them and the Knights Templar, has triggered several recent deployments of federal troops to the economically important state, which is home of the strategic port city of Lazaro Cardenas and near Mexico's political and economic core. However, already struggling to contain violence related to Mexico's drug cartels elswhere in the country, Mexico is trying to subdue Michoacan's self-defense groups, limit their expansion and preserve federal authority in the state will be tightly constrained.
Analysis

From Jan. 10-12, militia members entered multiple towns in the Michoacan municipalities of Paracuaro and Mugica as part of a continued "clear-and-hold" strategy, in which the self-defense groups attempt to remove Knights Templar elements and recruit new members from the local populations to take action against the cartel. The arrival of the militias triggered several clashes with the Knights Templar. The Mexican army was then deployed to disarm the militia members, but many refused to surrender their weapons. Supportive residents began blocking military advances along streets in both municipalities, eventually drawing gunfire from the military that reportedly left as many as 12 people dead. The clashes marked a substantial escalation in tensions between the Michoacan militias and federal troops, indicating the self-defense groups will not be easily persuaded to abandon their offensive. 
The Rise of the Self-Defense Groups

For nearly a year, the government has been making repeated attempts to address the deterioration of security in Michoacan state that has resulted from the ongoing violence between the self-defense groups and the Knights Templar, as well as the groups' territorial expansion. In November 2013, for example, the military took control of Lazaro Cardenas. And on Jan. 14, the government deployed a large contingent of federal troops, including military and federal police elements, to take control of public security from local law enforcement in the Michoacan towns of Apatzingan and Uruapan. Particularly concerning to the Mexican government is the persistent growth of the groups, which now pose an established threat to government authority in Michoacan and are unlikely to disband without a substantial commitment of federal troops.

The self-defense groups initially emerged in a small number of rural towns in southwestern Michoacan state in response to years of extreme violence and crime wrought by competing criminal organizations. In less than a year, the militias have proliferated, expanded both their size and territorial reach, and evolved into a coordinated body. As a result, self-defense groups now control towns in at least 15 municipalities in the state. The groups appear to have steady funding sufficient to arm members with assault rifles, tactical gear and vehicles and coordinate operational logistics across an area that now spans roughly 190 kilometers (120 miles) -- though the exact sources of their funding remains unclear. And the focus of the militia operations has evolved from combatting established organized crime elements to supplanting government authority in public security matters, even by disarming local police if necessary.

The rise of the self-defense groups reflects the social consequences of the prolonged violence and the government's inability to enforce the rule of law in rural regions that historically have been difficult to control. The government in Mexico City has long been concerned about the threat of insurrections in regions outside the capital, where the lawless environment has enabled militant groups to challenge the government at various times in the country's history. This is, in part, why Mexican military doctrine focuses almost entirely on the country's interior. And since before the Mexican revolution, the government has encouraged residents in rural communities to maintain the rule of law by forming militias known as the rural guard, which have operated as auxiliaries to the military. In the early 2000s, the municipalities where the current self-defense groups emerged were home to rural guard militias tasked with combatting Los Zetas incursions. However, unlike the rural guard, the current militias thus far have been unwilling to submit to the government's authority.
Military Constraints and the Risk of Conflict

The Mexican government does not want an armed struggle with the self-defense militias; such a conflict would open a new battlefront for the military, which is already stretched thin by operations in other regions of the country that have been particularly hard hit by organized crime-related violence. Similarly, self defense groups would not welcome a direct confrontation with the federal government, since they could not hold their ground against a substantial Mexican military campaign, their recent successes notwithstanding.

Still, conflict seems likely if the government does not see a peaceful settlement as possible and the military continues to fail in its own campaign against the Knights Templar. The government cannot allow the militias to continue to expand and supplant its authority while provoking violence with criminal groups. For their part, the militias have not indicated a willingness to cease operations until the cartel has been neutralized.
The Evolution of Mexico's Cartels

Several states outside Michoacan rely strongly on federal troops for public safety, particularly in the north. Any military operation undertaken in Michoacan would need to fit into Mexico's national strategy to avoid undermining security elsewhere. On Jan. 12, for example, some 250 federal police officers in Nuevo Leon state who had been participating in Operation Northeast, a joint security operation targeting organized crime in northeastern Mexico, were transferred to Michoacan. The transfer will not significantly affect levels of violence in the northeast or in Michoacan, but removing troops from ongoing operations, rather than tapping into garrisoned forces, may reflect personnel constraints facing the government.

The government's worst-case scenario involves federal troops attempting to wage a territorial conflict with the self-defense groups while still attempting to combat rival criminal groups such as the Knights Templar and Cartel de Jalisco Nueva Generacion. Such a conflict could stifle economy activity in Michoacan state, possibly disrupting the flow of goods from the port at Lazaro Cardenas.

Militia leaders and supporters have repeatedly vowed to support the government if the Knights Templar is dismantled, indicating that the government still has room to maneuver and peacefully assert control over the self-defense groups through a negotiated disarmament. But even if a settlement were reached, federal troops would still need to find a way to deal with organized crime groups in Michoacan to truly restore security. This task has long bedeviled authorities, so the risk of a renewed militancy would probably remain.

Read more: Mexico's Mounting Challenge With Self-Defense Groups in Michoacan | Stratfor
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[Crafty_Dog]

http://aristeguinoticias.com/1808/mexico/autodefensas-michoacanos-anuncian-revolucion-nacional/

145,513

[Crafty_Dog]

second entry of the day:


21 January 2014
MEXICO – Army deployed to Michoacán

On 13 January 2014, Governance Secretary Miguel Angel Osorio Chong announced the deployment of the army to trouble spots in Michoacán, in order to disband burgeoning self-defense groups. The state has been assailed by a wave of violence stemming from skirmishes between self-defense groups and the Knights Templar cartel. On 15 January 2014, U.S. State Department officials expressed extreme concern over the violent and lawless situation in Michoacán state, offering technical aid to the government.

[Crafty_Dog]

Vigilantes line up during a program to register their weapons and create a rural police in Paracuaro in Michoacan state, Mexico, last Monday. The government has proposed incorporating some vigilantes into a rural police force and giving them formal training. Reuters
 
MEXICO CITY—Hundreds of vigilantes in the southwestern Mexican state of Michoacán, escorted by the military and federal police, on Saturday moved into the city of Apatzingán, the main bastion of the Knights Templar criminal organization.

The vigilantes, working alongside federal forces, set up checkpoints on roads in and out of Apatzingán in search of members of the Knights Templar.

Francisco Castellanos, a local journalist in Apatzingán, said that as of midafternoon Saturday, the operations had been carried out without reports of clashes or shots being fired.

The heavily armed vigilantes, known locally as self-defense groups, had been expanding and taking control of a number of towns and municipalities in largely rural areas of Michoacán state to kick out the Knights Templar. Named after a medieval order of warrior monks, the Templars evolved from trafficking in marijuana and methamphetamines to extortion, kidnapping and murder. The Templars' abuses and the government's inability to stop their reign of terror sparked a reaction, mostly by lime and avocado growers, cattlemen and shopkeepers, many of them former U.S. migrants, (!!!) who organized vigilante organizations to take back control of the towns from the organized crime group.

A year ago, the vigilantes ran the Templars out of two towns in the Tierra Caliente, a swath of rich agricultural land, gathering strength from their victories. The movement continued to spread. The growing danger of open armed conflict between the two organizations led the Mexican government to step up the presence of troops and federal police in the state. In January, federal forces took control of Apatzingán as the vigilante groups were planning to move in.

A government official who spoke on condition of anonymity said the federal government didn't see Saturday's moves as an "advance" of the self-defense groups or an "occupation" of Apatzingán. He said the cooperation between federal forces and the local communities, including self-defense members, is essential for the government to recover lost trust in the state.

The international focus on the proliferation of self-defense groups and growing violence in Michoacan has embarrassed the Mexican government, which has emphasized its efforts to reform the country's economy, including opening up Mexico's energy industry to private investment.

Mexican President Enrique Peña Nieto last month appointed as special envoy a close political ally, Alfredo Castillo, who became Michoacan's de facto acting governor with special powers to implement economic and security measures. Mr. Castillo was ordered to dismantle the Templar organization and disarm the self-defense groups.

Last week, the government announced an ambitious plan to spend $3.4 billion to boost the Michoacán economy, and improve the state's social services. The vigilante groups had said disarming would leave their communities open to revenge attacks by the Templars. But late last month, they reached agreement to form into rural and town police forces.

Alejandro Hope, a security expert with the Mexican Institute for Competitiveness, a think tank, questioned the wisdom of allowing the vigilantes to enter Apatzingán after the government had sought to contain their advance.

"If the federal forces were already there, why did they [the vigilantes] have to go in?" he said.

Write to  Anthony Harrup at anthony.harrup@wsj.com

[Crafty_Dog]

http://www.foxnews.com/us/2014/02/11/cartel-hitman-testifies-to-800-murders-daily-quotas-at-kingpin-trial/

[Crafty_Dog]

Analysis

The Mexican military and U.S. authorities captured a top leader of the Sinaloa Federation, Joaquin "El Chapo" Guzman Loera, in an unnamed hotel in Mazatlan, Sinaloa state, sometime during the night of Feb. 21. Guzman, who has long eluded authorities, faces several federal drug trafficking indictments and is on the Drug Enforcement Administration's most-wanted list. Reportedly, the hotel had been under surveillance for five weeks prior to the arrest, but Guzman had arrived in Mazatlan only days earlier, fleeing military operations in Culiacan.

El Chapo was partly responsible for the expansion of the Sinaloa Federation into the territories of rival Mexican transnational criminal organizations, commonly referred to as cartels. He also helped oversee the expansion of Sinaloa Federation operations beyond Mexico, most notably drug trafficking routes into Europe and Asia. Since December, however, the Sinaloa Federation has suffered from a series of substantial arrests, impacting the cartel wing led by Ismael "El Mayo" Zambada Garcia. The cartel has also faced rising challenges in its areas of operations by regional crime networks as well as other transnational criminal organizations. The tempo and success of operations targeting top Sinaloa Federation leaders will severely hamper the cartel's ability to defend its operations in northwestern Mexico, possibly leading to substantial violence in several areas as rival criminal organizations seek to exploit the cartel's new vulnerabilities.
Mexican Cartels: Sinaloa Federation

Like most of Mexico's major transnational criminal organizations, the Sinaloa Federation is led by a collection of crime bosses, each with their own network, operating under a common banner. In addition to Guzman, other notable top-tier leaders include Zambada and Juan Jose "El Azul" Esparragoza Moreno. These  leaders guide the Sinaloa Federation's overall strategy and activity throughout Mexico, as well as its transnational operations. With Guzman now in custody, the remaining top bosses, along with several less-prominent leaders, will look to maintain the Sinaloa Federation's control over Guzman's network. This could spark a wave of violence throughout northwestern Mexico if internal shifts evolve into intra-cartel conflict.

A more likely source of violence -- one that could occur alongside an internal Sinaloa Federation feud -- would be a push by the Sinaloa Federation's rivals for control over drug trafficking operations in current Sinaloa Federation territories, including Baja California, Sonora, Durango, Chihuahua, and Sinaloa states. Should Guzman's arrest effectively create opportunities for rivals to pursue territorial gains at the expense of the Sinaloa Federation, Stratfor would expect to see an increase in inter-cartel violence on some scale, as well as a military response to contain or even preempt possible violence, in any area of the aforementioned states.

Read more: Mexico: El Chapo's Arrest Poses New Risks of Violence | Stratfor

[Crafty_Dog]

NY Times

MAZATLÁN, Mexico — They reacted here with utter disbelief. Joaquín Guzmán Loera, El Chapo, drug kingpin to the world, the Robin Hood of Sinaloa, had been arrested in his home state, in the resort town that is a loyal fief of his empire?

“It was too easy,” said a young woman of model height, her back to the sea, her eyes fixed on the 12-story condominium where Mexican marines and United States agents grabbed him early on Saturday morning. “No shootout, no final stand?”

The takedown this weekend of the world’s most wanted man — the chief executive of what experts describe as the world’s most sophisticated narcotics enterprise, the Sinaloa cartel — upended long-held assumptions about the impunity of Mexican mobsters.

It also overturned long-lowered expectations of what was possible in the game of cat and mouse, or government versus outlaws, that has defined the drug war here.

Mr. Guzmán, after all, seemed untouchable, relying time and again on intimidation, bribery and local accommodation — even pride — to help him keep his freedom and his power.
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Mr. Guzmán after his arrest. Mario Guzman/European Pressphoto Agency

But the giant known as Shorty fell with an odd humility, awakened shirtless by the authorities before 7 a.m. on Saturday. He neither died in a blaze of glory nor managed another daring escape; persistence carried him away.

The details of the operation, recounted by American and Mexican officials and witnesses here (most requested anonymity for their own protection) show that Mr. Guzmán’s arrest, after countless near misses and narrow escapes, came down to a tight bond between the Drug Enforcement Administration and the Mexican navy, some well-kept secrets, and a fair amount of luck.

Even as security cooperation between Mexico and the United States continued to be hampered by distrust at the highest levels of government, American agents and Mexican marines worked together for weeks, until the moment of capture here when they crashed through the door of a fourth-floor apartment overlooking the Pacific.

It began with a meeting a few weeks ago. The D.E.A. presented a body of intelligence information to Mexican navy officials, including calls and contacts from cellphones used over the last few months. The Americans had worked closely before with the marines on successful operations but were not certain that their counterparts would take on the mission. Mexican security forces were focused on another problem — the battle between the Knights Templar cartel and self-defense groups in Michoacán — and President Enrique Peña Nieto had made clear that the economy was his priority. Officials said there were local obstacles, too. Many Sinaloans considered Mr. Guzmán as a kind of favorite rebel son. His cartel has deep roots across the state, with many arguing that his operation is relatively benign in comparison to some newer groups that rely more on extortion and kidnapping.

“It’s an old model of organized crime that’s not predatory on the local population,” said Alejandro Hope, a security analyst and former Mexican intelligence officer whose mother grew up in Sinaloa. Still, he added, “For all the talk of Chapo as a good narco, this is the person who was responsible for some of the worst violence — for the drug war in Tijuana and Juárez. That’s thousands of deaths.”

Mr. Guzmán, though, seemed so immune to consequence that some here in Mazatlán had even come to believe he might be protected, or at least tolerated, by elements of the Mexican and American governments. “We thought he was clean,” one businessman said.
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But the marines, compelled by the intelligence gathered through wiretaps and informants — especially tips suggesting that Mr. Guzmán was showing up again in Culiacán and Mazatlán — agreed to move. They “surged up,” one American official said, at a base near Cabo, the southern tip of the Baja Peninsula, a short race across the water to Mazatlán and the rest of Sinaloa.

Starting roughly a month before Mr. Guzmán’s capture, they began to sweep methodically through Culiacán, the Sinaloa state capital. They knocked down doors and recovered weapons, armored cars, drugs, cash.

The drug operators scurried. On Feb. 13, three men were arrested on the road to Mazatlán, including a man called “19,” believed to be the new head assassin for one Mr. Guzmán’s senior officers, Ismael (Mayo) Zambada. On Feb. 17, another senior leader was captured with 4,000 hollowed-out cucumbers and bananas filled with cocaine.

A half-dozen others followed and with each arrest and seizure, Mexican officials made sure to emphasize that they were seeking Mr. Zambada. The true nature of the operation never leaked — in part because of Mr. Guzmán’s legend. No one seemed to suspect that he would come down from his secret hiding spots in the mountains of Sinaloa, or further afield, in Guatemala or wherever else.

And how much would it matter if he did? Experts suspected he had delegated much of the day-to-day work, and drugs have been moving north from this fertile region since World War II, when the American government needed opium for its wounded soldiers. With demand for heroin surging yet again, no one doubts that the trade — “the life,” as some here call it — will go on.

But with momentum building in Culiacán, American officials said that the Mexican marines began to believe they might actually get the target that had slipped their grasp so many times before.

A small team of American agents with the D.E.A. and the United States Marshals Service were embedded with the Mexican marines, American and Mexican officials said, and in their ranks, too, confidence was rising, and mixing with impatience. As days dragged to weeks, there was a sense that Mexican officials wanted to wrap things up — especially after a raid led to what appeared to be a near miss.

Working on information from some of Mr. Guzmán’s bodyguards, Mexican marines and American agents raided the home of his ex-wife on Thursday. After struggling to batter down the steel-reinforced door, according to the Mexican authorities, they were too late: instead of finding their prey, they discovered a secret door beneath a bathtub that led to a network of tunnels and sewer canals that connected to six other houses.

The search continued, but the earlier arrests and intelligence were pointing south, to Mazatlán — one of Mexico’s first resorts.

Mr. Guzmán was not known to spend much time here; local businessmen with a lifetime of knowledge about Sinaloa’s connections to the community said there were no known Chapo sightings, or serious rumors, over his many years in power.

The building he chose, called the Miramar, was built about a decade ago, they said, and was filled with a mix of vacationers — Mexicans and American and Canadian retirees — who came and went through the year. Before dawn on Saturday morning, it seemed to be just another place to enjoy the view. But about 12 hours earlier, an intercepted phone call to Mr. Guzmán’s cellphone had already triggered the command to move. In the dark of night, neighbors heard knocks on the doors, according to interviews via apartment intercom. American officials said the teams did not know which apartment he was in. Then came a crash.

By the time retirees down the block heard helicopters — “I was waiting to hear the gunfire,” one Canadian woman said — it was over.

Mr. Guzmán was arrested with one other man, Mexican officials said. Some reports said that the authorities also found a woman in the apartment and photos of the room show two pink children’s suitcases on a bed, suggesting Mr. Guzmán was with his wife and twin 2-year-old daughters who were born in Los Angeles County. But American officials said they were surprised by what was not there: a cache of weapons. Not a single shot was fired.

Local residents cast doubt on the operation for that exact reason. “Everyone thinks it was a negotiated capture,” said one local business leader.

That it happened just a few days after President Obama visited Mexico, during a week when official figures showed the economy grew by only 1.1. percent, has only added to the skepticism. Even after photos and forensic tests, many here, young and old, don’t believe that the man with the mustache trotted out for the cameras on Saturday — and now confined to a high-security Mexican prison, officials said — is really the one they call Chapo.

“It’s a fantasy,” said Ofelia Aguilar, 52, walking through a shantytown called Santa Monica, still filling up with families who have been forced to flee the lawlessness of the Sinaloan countryside where Mr. Guzmán grew up. “It has to be someone else. I just don’t believe it.”