Editor's Note: This week's Security Weekly is a condensed version of our annual Mexico drug cartel report, in which we assess the most significant developments of 2014 and provide a forecast for 2015. 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
Since the emergence of the Guadalajara cartel in the 1980s as one of the country's largest drug trafficking organizations, Mexican organized crime has continued to expand its reach up and down the global supply chains of illicit drugs. Under the Guadalajara cartel and its contemporaries, such as the Gulf cartel, led by Juan Garcia Abrego, a relatively small number of crime bosses controlled Mexico's terrestrial illicit supply chains. Crime bosses such as Miguel Angel "El Padrino" Felix Gallardo, the leader of the Guadalajara cartel, oversaw the bulk of the trafficking operations necessary to push drugs into the United States and received large portions of the revenue generated. By the same token, this facilitated law enforcement's ability to disrupt entire supply chains with a single arrest. Such highly centralized structures ultimately proved unsustainable under consistent and aggressive law enforcement pressure. Thus, as Mexican organized crime has expanded its control over greater shares of the global drug trade, it has simultaneously become more decentralized, as exemplified by an increasing number of organizational splits.
Indeed, the arrest of Felix Gallardo in 1989 and of colleagues such as Rafael Caro Quintero and Ernesto Fonseca Carrillo a few years prior led to the breakdown of the Guadalajara cartel by 1990. Thanks to geographic factors, however, Mexican organized crime was destined to increasingly dominate the global illicit drug trade, soon even eclipsing the role Colombian drug traffickers played in supplying cocaine to the huge and highly lucrative retail markets in the United States. As international law enforcement effectively dismantled the powerful Colombian cartels and stymied their maritime trafficking routes through the Caribbean in the 1980s and 1990s, Mexican crime groups became the cornerstone for any trafficking organization wishing to profit from the high U.S. demand for illicit drugs. Given that the United State's only land border to the south is shared with Mexico, Central and South American organizations had no choice but to cooperate with Mexican crime groups if they wished to transport drugs northward over land and across the nearly 3,200-kilometer (2,000-mile) U.S. border, an area with a centurieslong history of smuggling.
The remnants of the Guadalajara cartel took advantage of the regional geography to expand their own smuggling operations, leading to the creation of seemingly new criminal organizations such as the Juarez cartel (led by the Carrillo Fuentes family), the Tijuana cartel (led by the Arellano Felix family) and what would eventually become known popularly as the Sinaloa Federation (led by a number of traffickers, most famously Joaquin "El Chapo" Guzman Loera). Operating as autonomous crime syndicates, the fragments of the Guadalajara cartel expanded their respective supply chains and overall share of the illicit drug markets in the United States and overseas. But the continued Balkanization of Mexican organized crime that began with the collapse of the Guadalajara cartel would accompany the collective expansion of Mexican crime groups up and down the illicit drug supply chains across the globe.
By 2010, the criminal landscape in Mexico differed greatly from that in 1989. Numerous crime groups, some with small but critical niches, controlled drug trafficking operations in Mexico. Even so, a few cohesive crime groups still dominated the Mexican drug trade, particularly the Juarez cartel, the Tijuana cartel, the Gulf cartel and the Sinaloa Federation. Each group sought to expand its share over the drug trade, hoping to achieve the pre-eminence of their collective predecessor, leading to violent turf wars. Each group, however, faced internal divisions, leading to further Balkanization in parallel to the turf wars.
2010 marked a rapid acceleration in crime group decentralization, with each of the four dominant groups suffering a series of internal splits. This phenomenon also afflicted their eventual successors, giving rise to the present exceptionally complex map of crime groups. As Stratfor highlighted in its April 2013 cartel quarterly update, the trend of Balkanization will not likely end even if specific crime groups such as Los Zetas momentarily defy it by continuing to expand. Now in 2015, this trend has created an organized criminal landscape where it is no longer sufficient to monitor Mexican organized crime by focusing on individual groups. Instead, one must focus on the regional umbrellas that lead the vast majority of Mexican crime groups. We have therefore had to change the way we think and write about Mexican organized criminal networks, a change made visible in the radical alterations we have made to our popular cartel map.
The Regions
In 2014, as has been the norm each year since 2010, Mexican organized crime underwent substantial devolution because of continued turf wars and pressure by law enforcement and the Mexican military. The regional challenges and leadership losses the Sinaloa Federation experienced in 2013 continued, particularly with the arrest of top leader Guzman Loera. Along with leadership losses, the lower-tier structures of the Sinaloa Federation — such as the subgroups operating in Chihuahua, Sonora and Baja California states — exercised increasing autonomy from the cartel's remaining top-tier crime bosses. Meanwhile, at the beginning of 2014, the remaining Gulf cartel factions in Tamaulipas state devolved further into numerous gangs. Some cooperated in the same cities, while others waged particularly violent campaigns against one another. In Michoacan state, the Knights Templar were all but dismantled, with Servando "La Tuta" Gomez Martinez the sole remaining founding leader. Numerous crime groups, all based in the same Tierra Caliente region of southwestern Mexico from which the Knights Templar (and the La Familia Michoacana organization it once fell under) emerged, filled the void that opened in Michoacan as a result of the rapid decline of the Knights Templar.
Though continued Balkanization of Mexican organized crime creates an increasingly confusing map, three geographic centers of gravity of cartel activity exist at present: Tamaulipas state, Sinaloa state and the Tierra Caliente region.
With the Mexican organized crime landscape continuing to suffer new fractures, it is marked now by newly independent groups headed by leaders who previously had participated in the same criminal operations as their new rivals. Many of these new crime bosses were born and raised in the same communities — in many cases even sharing family ties — and thus leveraged similar geographic advantages in their rise in power.
The Guadalajara cartel exemplifies this trend. Despite its name, which it received because its leaders had hideouts in the city of Guadalajara, Jalisco state, nearly all of its leaders hailed from Sinaloa state. The cartel also relied on the geography of Sinaloa state to expand its illicit profits, which largely came from the concentration of marijuana and opium poppy cultivation in the Sierra Madre Occidental and from coastal routes for drug trafficking. The city of Guadalajara provided cartel leaders a large cosmopolitan area in which to hide while they rapidly expanded their international operations. When the cartel split, successors such as the Tijuana and Juarez cartels were in fact managed by criminal leaders originating from Sinaloa who continued to leverage some aspect of the state's geography, if they were not in fact still tied to communities there.
Until the early 2000s, Sinaloa-based organized crime dominated the vast majority of organized crime activities in Mexico, particularly drug trafficking routes. Only the Tamaulipas-based Gulf cartel remained as a major independent group, using drug trafficking routes along Mexico's east coast to push drugs into the United States through Nuevo Laredo, one of the most lucrative trafficking points in Mexico. Tamaulipas-based organized crime soon expanded its geographic reach, first via the Gulf cartel and then through Los Zetas, which split from the Gulf cartel in 2010. This trend led to a seemingly polarized criminal landscape by 2011, with organized crime in Mexico breaking down along a Sinaloa-Tamaulipas divide. By 2012, the Sinaloa- and Tamaulipas-based criminal camps each faced internal divisions, with individual groups in each region beginning to form alliances with groups in the other. Nonetheless, the behavior and evolution of each group was still driven by geography more than any form of ties to groups in the opposing region.
Thus, when Los Zetas split from the Gulf cartel in 2010, despite becoming known as a new or independent crime group, the collective operations and trends of Tamaulipas-based organized crime did not change: The same players were in place managing the same criminal activities. Similarly, the ongoing expansion of Tamaulipas-based organized crime — countering the spread of Sinaloa-based organized crime — did not stop, but instead it continued under Los Zetas' banner. It should be noted that the Gulf cartel, which had been immediately weakened relative to Los Zetas, did in fact ally with the Sinaloa Federation. But even so, with Los Zetas the most powerful Tamaulipas-based crime group, the Sinaloa Federation continued facing immense competition for territory from the east.
Within a given regional criminal camp, alliances and rivalries can form overnight with immediate effects, while crime bosses can quickly switch sides without necessarily causing a shift in operations. For instance, the now-detained Tamaulipas-based crime boss, Ivan "El Taliban" Velazquez, first emerged within the Gulf cartel as a member of Los Zetas, then still a Gulf subgroup. When Los Zetas broke away, Velazquez sided with it. In 2012, however, Velazquez and his faction went to war with then-Los Zetas top leader Miguel "Z-40" Trevino Morales, allied with some Gulf cartel factions and publicly rebranded his network as a part of the Gulf cartel. In Cancun, Quintana Roo state, where the Velazquez network oversaw local criminal activities, Los Zetas members overnight became Gulf cartel members without any preceding conflict.
In 2012, the main Sinaloa- and Tamaulipas-based crime groups suffered from ongoing internal fights and leadership losses at the hands of government troops. After the Velazquez network split from Los Zetas, Mexican marines killed top Zetas leader Heriberto "El Lazca" Lazcano Lazcano during an operation. Meanwhile, the Sinaloa Federation faced growing challenges in its own northwest dominion from other Sinaloa-based groups such as Los Mazatlecos and a resurgent La Linea, and certain regional crime groups outside Sinaloa state that supported the Sinaloa Federation began fighting one another, including Los Cabrera and Los Dannys in Torreon, Coahuila state. The struggles in both regional crime camps in 2012 permitted the emergence of a third dominant regional camp based in Tierra Caliente, home to groups such as the Knights Templar, the Cartel de Jalisco Nueva Generacion, La Familia Michoacana and Guerreros Unidos.
Tierra Caliente, which means "hot lands," is a rural lowland area surrounded by mountainous terrain that was initially heavily valued by drug traffickers for marijuana cultivation, though for several years now it has produced primarily methamphetamines and heroin. The value of the region for organized crime increased along with the growth of the port of Lazaro Cardenas in Michoacan, making the state a key bridge between Mexico's coast and the interior — and a key port for smuggling narcotics and chemical precursors used in regional drug production.
Most groups in Tierra Caliente originated in the 1990s, when regional organized crime was but an extension of criminal groups based in Sinaloa and Tamaulipas states. In the early 2000s, Sinaloa- and Tamaulipas-based groups, most notably the Sinaloa Federation and the Gulf cartel, began a series of nationwide turf wars that included bids for control over the Tierra Caliente region. Two prominent groups emerged from the wreckage: the Milenio cartel, which operated under Sinaloa Federation crime boss Ignacio "El Nacho" Coronel Villarreal, and La Familia Michoacana, which was supported by the Los Zetas branch of the Gulf cartel. (La Familia Michoacana first referred to itself as La Empresa.) The conflict between these groups reverberated throughout the Tierra Caliente region, ushering in other turf wars that continue today.
But the relative weakening of Sinaloa and Tamaulipas organized crime in 2012 enabled Tierra Caliente-based groups to expand — both domestically and internationally — independently as they exploited the substantial geographic advantages of the Tierra Caliente for their criminal operations. Though numerous turf wars between regional groups continued after 2012, as a whole, Tierra Caliente-based organized crime expanded geographically thanks to the efforts of groups such as the Cartel de Jalisco Nueva Generacion and the Knights Templar. Turf wars that emerged or escalated within Tierra Caliente in 2012, most notably the Knights Templar against the Cartel de Jalisco Nueva Generacion and Guerreros Unidos against Los Rojos, have become some of the most violent disputes in Mexico, either directly or indirectly causing the Mexican government's greatest security concerns in 2015.
2015 Forecast
The Mexican government had notable success targeting the top leadership of various criminal groups in 2014. Several senior bosses from each of the principal regional organized crime camps in Mexico were captured or killed during targeted operations involving federal troops. These successes accelerated the Balkanization of each camp while greatly shifting the balance of power among individual crime groups. The results of the government's efforts in 2014 will lead to a reorganization of each regional camp in 2015, as well as maintaining, if not accelerating, the tempo of the decentralization of organized crime in Mexico. It is likely that Balkanization will lead to new regional camps in 2015 as crime groups in geographic areas formerly controlled by outside crime bosses become entirely independent, focusing on and leveraging their own respective areas.
It should be noted that while each regional camp may experience substantial fragmentation in 2015 and lose control over criminal activities in specific geographic areas — such as the production of illicit drugs, extortion, fuel theft and kidnapping — this will not equate to an overall decline in international drug trafficking. In fact, each regional camp in Mexico will likely continue to expand its respective international drug supply chains to overseas markets such as Europe and Asia, as well as control of operations in South America.
Organized Crime in Sinaloa State
Sinaloa-based organized crime bore the brunt of targeted government operations in 2014, with the February capture of top Sinaloa Federation leader Joaquin "El Chapo" Guzman Loera in Mazatlan, Sinaloa state, being the highest-profile incident. Each of the major Sinaloa crime groups suffered losses among its senior leadership. On June 23, authorities captured one of the top leaders of the Tijuana cartel, Luis Fernando Arellano Sanchez, in Tijuana. On Oct. 1, the Mexican army captured Hector Beltran Leyva, the leader of the Beltran Leyva Organization, at a restaurant in San Miguel de Allende, Guanajuato state. On Oct. 9, federal troops captured the top leader of the Juarez cartel, Vicente Carrillo Fuentes, in Torreon, Coahuila state.
In addition to these arrests, numerous lieutenants for these leaders and for other high-ranking Sinaloa crime bosses fell at the hands of authorities as well. Interestingly, none of the stated arrests altered the broader trends surrounding each group or triggered internal rifts that would likely have led to substantial escalations in violence, though organizational challenges such as those experienced by the Sinaloa Federation since 2012 were likely magnified. This dynamic suggests that the continued decentralization of each group had lessened the criticality of each major crime boss within his respective organization.
Barring unexpected leadership losses or internal splits within the Tierra Caliente- or Tamaulipas-based crime groups, Sinaloa-based organized crime will likely experience the most fragmentation in 2015. Over the past two years, the Sinaloa Federation has seen its subgroups act increasingly independent from the top-tier leadership, leading to internal wars — independent of the top leadership — among subgroups in areas such as the Golden Triangle and the surrounding region, as well as the Baja California Peninsula. Similarly, the arrest of Carrillo Fuentes and his key lieutenants in 2014 could trigger leadership changes in 2015 where the remnants of his organization fall under the control of crime bosses based strictly in Chihuahua state. Such fragmentation would mean that new regional criminal camps, likely based in Sonora, Chihuahua or Baja California states, would emerge from the geographic areas currently controlled by the Sinaloa camp.
Tamaulipas Organized Crime
The Gulf cartel as it was prior to 2010 no longer exists. Instead, two crime groups — Los Zetas and the Velazquez network — now largely dominate Tamaulipas-based organized crime. The former is now the most widely operating cohesive crime group in Mexico. The crime groups calling themselves the Gulf cartel and operating in areas of Tamaulipas retained by the old Gulf cartel after the 2010 split with Los Zetas are (with the exception of the Velazquez network) in fact a collection of numerous independent groups, all of which operate more like powerful street gangs than the far-reaching transnational criminal organization that was their former parent organization.
Though the rapid expansion of Los Zetas slowed significantly in 2012 as a result of internal feuds, the growing independence of Tierra Caliente-based organized crime and government operations, the group has largely continued to defy the Balkanization experienced by every other crime group in Mexico. This has been largely thanks to a sudden shift in its overall expansion strategy that emerged at the end of 2012, when the cartel began relying more on alliances than violent seizures of territory. Crime groups from other regional camps, such as some of the Beltran Leyva Organization successor groups and the Juarez cartel (and its former enforcer arm, La Linea), have given Los Zetas access to the supply of illicit drugs and to drug trafficking routes in territories held by Sinaloa-based groups. Since the Gulf cartel gangs in Tamaulipas state likely rely on revenues gained from allowing drugs to be trafficked through their territory and are significantly less powerful than Los Zetas, it is likely that at least some of these groups are now cooperating with Los Zetas. Such cooperation could even include the gangs purchasing narcotics from Los Zetas.
Los Zetas' expansion will likely resume in Mexico in 2015, with the presence of Los Zetas operators and activities emerging in the western half of Mexico. Despite this expansion, Los Zetas will not be saved from the Balkanization trend, meaning another significant split could emerge in 2015 — though the exact timing is difficult, if not impossible, to forecast — with portions of Los Zetas competing with one another, either economically or militarily. Though organizational splits do not necessitate violent competition, Los Zetas' extensive network of alliances with other regionally based crime groups, as well as the immense territory directly under the cartel's control, increases the likelihood of any major split triggering violent turf wars. Where violence erupts depends entirely on where the organization splits internally.
COPYRIGHT: STRATFOR.COM
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