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Mexico: King Coal Trumps Cocaine
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February 1, 2013: The Drug Cartel War has definitely hurt Mexican businesses in cities along the Mexico-Texas border. Ciudad Acuna (Coahuila state) experienced a spate of violence in 2010, when Los Zetas gunmen killed a Coahuila state police commander near the city. At the time Mexican authorities believed the Zetas were fighting a coalition of the Sinaloa and La Familia cartels. In late 2011 three local police officers were murdered, execution style. The Zetas were also implicated in those slayings. The Acuna area, however, has not faced the sustained violence other border cities have experienced. There are a couple of explanations for this. One is positive: the Acuna area is not a major drug trafficking corridor. Another is very negative: Coahuila state police and some municipal cops in the area are on the take, so drugs move freely through the town. The Zetas have no reason to shoot. There are some reasons to doubt that drugs move that freely through the city. The Mexican Army has a garrison near the city and is very active in patrolling the area. However, the recent news about Zetas penetration in legitimate businesses in Coahuila state indicates that the political and police corruption theory has legs. Moreover, the son of former Coahuila governor, Humberto Moreira, was murdered in Acuna in October 2012. Whatever the explanation for the comparative lack of violence, the citizens of Acuna have still suffered from the drug war. Many local stores (eg. restaurants, liquor stores) which have traditionally catered to local American customers (ie, residents of Del Rio, Texas, across the border) have been closing due to a drop off in business. Several of the more tourist-oriented businesses (like the town’s famous cantinas and casinos) have seen the number of tourists decline but have managed to remain open. As a result, Acuna has seen a sharp rise in vacant buildings (particularly apartment houses). The Mexican Army presence at the border crossing and bridge is noticeable, and it is supposed to be noticed. Typically, two Humvees (sometimes armed with M-60 light machine guns) are positioned near the bridge. The armed vehicles are supported by eight to 12 soldiers (essentially a squad). A recent visitor to Acuna described the military border post as reminiscent of Check Point Charlie, the Cold War-era U.S Army check point between East Berlin and West Berlin. The soldiers, however, are clearly looking both ways. When they move to and from their garrison they vary their routes and move so that the armed vehicles in the convoy can support each other.  At irregular intervals and with no notice, the soldiers at the border will perform routine customs checks of vehicles entering the country, pre-empting the official customs officers. This suggests that the government (or at least the commander of the army brigade stationed in the Acuna area) considers the customs personnel to be something less than reliable. Meanwhile, Coahuila state officials are attempting to increase the number of state police available and improve the quality of police protection. The state recently hired 1,000 new officers and intends to hire another 1,000 by the end of 2014. The state claims that it is hiring about one in twenty applicants and is giving preference to individuals who have served in the Mexican military. The idea is that the cartels are less likely to have infiltrated their operatives into the military. (Al Nofi and Austin Bay)

January 31, 2013: The federal attorney general’s office (PGR) has frozen the assets of a large Coahuila mining company, Materiales Industrializados (MINSA). The owner of the company is suspected of having ties to an organized criminal gang (probably Los Zetas). 

The Mexico City headquarters of the Mexican national oil company, Petroleos Mexicanos (PEMEX), was damaged by a large explosion in the first three floors. At least 25 people were killed and over 100 people were injured in the incident. Over 3,500 PEMEX employees were forced to evacuate the building (the headquarters is a downtown skyscraper). Initial reports said that a machine room generator exploded.

January 30, 2013: The government began deploying Mexican Navy marines and special police officers in and around Mexico City to avert what it said was a mounting threat from drug cartels. The marines and police officers have begun manning check points in the city and its suburbs. The Mexico City operation follows the deployment of a force of 3,000 Mexican Army soldiers, Navy marines, and police officers in the surrounding Mexico State.

January 29, 2013: The U.S Department of Homeland Security has concluded that Mexican narcotics trafficking gangs have tried to infiltrate the U.S Customs and Border Protection service. The DHS is investigating 15 separate incidents.

January 27, 2013: Mexican Army soldiers operating in Tamaulipas state located seven illegal oil taps on PEMEX pipelines and distribution facilities in operations conducted between January 18 and January 25. The soldiers also seized several tanker trucks which were transporting stolen gasoline (32,000 liters/8,000 gallons of gas).

January 23, 2013: The navy continues to search for the supply ship San Andres, it has not been heard from since January 18. The small freighter sailed from the port of Mazatlan (Pacific Ocean) for Mexico’s Islas Marias and was supposed to return to Mazatlan.  A patrol boat found two unidentified bodies floating near the islands on January 22. 

January 22, 2013: The U.S military will soon begin running a new special operations training program for Mexican security forces. While U.S special operations personnel have helped train Mexican police and military personnel in the past, the new program is specifically designed to instruct Mexican personnel in special operations counter-terrorist raids and snatch operations techniques. The Osama Bin Laden operation by the U.S Special Operations Command (SOCOM) is an example of these types of operations. Presumably, Mexican personnel would employ these techniques against the drug cartels. The Agency handling the training will be Special Operations Command-North, which will have its headquarters at NORTHCOM’s headquarters in Colorado Springs, Colorado. Currently, around 30 SOCOM personnel serve with NORTHCOM. The new SOCOM-NORTH headquarters may increase to 150 personnel. The new headquarters will also help coordinate other operations where special operations expertise is useful, to include U.S Coast Guard ships conducting strike operations outside U.S territorial waters on vessels identified as carrying suspect cargo.

January 19, 2013: Soldiers fought with cartel gunmen in and near the town of San Fernando (Tamaulipas state). The battle began when the gunmen fired on an army convoy conducting a motorized patrol outside of the town. The soldiers killed two gunmen.

Soldiers found 168 bundles of marijuana (around 1.8 tons) in a brushy area near the town of Ciudad Guerrero (Tamaulipas state, south of Falcon Dam on the Rio Grande).

January 18, 2013: Investigators arrested 158 police officers from Durango State and other states in northern Mexico. The officers arrested allegedly worked with organized criminal gangs. This specific police corruption investigation had been going on for three years. Military personnel and several police officers from areas in southern Mexico are being posted to northern Mexico to replace the officers under arrest. Several of the officers arrested are suspected of smuggling drugs as well as aiding the drug cartels.

A Nicaraguan court sentenced 18 people to 30 years in prison. The defendants were arrested when they entered Nicaragua posing as Mexican journalists. They were convicted of money-laundering and of organized criminal activity. The court found that they were attempting to use Nicaragua as a link between drug smuggling operations in Mexico and Costa Rica. The group consisted of one woman and 17 men. The group claimed they had been sent to cover a murder case. Authorities determined that the woman, named Racquel Alatorre Correa, was the group leader. They were arrested in August 2012, when Nicaraguan police found signs of cocaine and stashes of cash in the vans in which the fake journalists were traveling. Several vans had Televisa TV network logos. The Mexican TV network, however, told Nicaraguan authorities that it had no connection with the group.

The federal government is considering limiting the amount of debt states, cities, and towns may carry. The government has been examining its authority to impose a debt limit because Mexican states are considered to be independent entities within the country’s federal structure. However, several states face huge and mounting public debt burdens. Some towns have defaulted. The federal government has to approve long-term bonds issued by states and cities because the states and cities can use their expected share of federal taxes to back the bonds. There is an anti-crime angle to the federal move to limit debt loads. Reformers claim corrupt municipal and state governments have used bond money to pay for contracts with businesses that are fronts for organized crime.

January 17, 2013: Mexico is touting its new intelligence coordination agency, the National Intelligence Center (CNI), as a major advantage in the Cartel War. However, many fear it will become a super ministry and become a tool of corrupt officials. The CNI has a very big mission. It is supposed to fuse all information gathered by Mexican government agencies and provide them to security agencies and law enforcement organizations.

January 16, 2013: A Mexican court ruled that two arrested Mexican Army generals must remain in jail and go on trial. Authorities arrested Brigadier General Roberto Dawe Gonzalez and General (retired) Tomas Angeles Dauahare in May 2012, on charges of working for drug trafficking organizations. The arrests were a huge embarrassment to the military and the Calderon administration. In 2006, General Angeles was the deputy secretary of defense (which means he was number two in the chain of command in the Mexican Army). At the time of his arrest  BG Dawe was in command of an elite army unit headquartered in Colima state (20th Military Zone, western Mexico). Colima state is on the Pacific Ocean. A third senior officer, Brigadier General Rueben Perez Ramirez, also faces drug trafficking charges. Perez, however, is something of an embarrassment for the new administration of President Enrique Pena Nieto. Perez was the officer in charge of the military zone of the state of Mexico (also known as Edomex, located in central Mexico, east, north, and west of the federal district) when Pena was governor of the state.

The three generals are the highest-ranking Mexican Army officers to face drug smuggling charges since General Jesus Guitterrez Rebollo was arrested in 1997. Guitterrez arrest was also a huge embarrassment. At the time he was in command of Mexico’s federal anti-narcotics office. Guitterez was convicted of drug trafficking charges and of being engaged in organized criminal activity.

January 14, 2013: Mexico City and its immediate area had 32 murders over a 48 hours period, with 22 slain in the federal district itself. (Mexico City has its own federal entity but its suburbs extend into the states of Mexico and Morelos.) Police called the number of murders a crime wave but reported that so far the murder spree had not been connected to the drug cartels. Investigations, however, are under way, since several of the murders have all of the signs of Cartel War executions. Five of the bodies (discovered in the suburb of Toluca) were found dismembered and stuffed in plastic bags. Mexican media have called the murders cartel homicides.

January 11, 2013: Navy personnel arrested three people, after an air recon patrol noticed several packages on a piece of property near the town of Nueva Ciudad Guerrero (Tamaulipas state). The town is south of Falcon Lake (on the Rio Grande). Navy personnel arrested the suspects and then discovered 343 large packages of marihuana, each one weighing around ten kilograms (22 pounds). They also found and seized a grenade launcher.

January 8, 2013: Investigators continue to discover more evidence that Los Zetas cartel is muscling in on the coal mining business in Coahuila state. For the record, Coahuila produces over 90 percent of the coal mined in Mexico. The Mexican Mining Association reported that the country mines around 15 million tons of coal per year. That earns approximately $3.8 billion. The Zetas began taking control of several of Coahuila’s coal mines three years ago, though they may have had a relationship with some people in the state’s coal business for a decade. The Zetas used a classic mob tactic: they threatened to kill any honest businessmen and laborers who opposed them and they rewarded (or at least protected) businesses that submitted to their demands. The gang also took control of coal transport companies and bribed politicians and police in Coahuila state. The mines controlled by the Zetas pay workers very poorly. The criminals have also forced small mines they do not control to sell coal for an artificially low price. They have also allegedly made deals with small scale strip miners running small, unregulated mining operations (pozos, in the local argot). The cartel controlled businesses sells the “narco coal” to a Coahuila state mining development agency, PRODEMI (Promotora para el Desarrollo Minero de Coahuila). PRODEMI then sells the coal to the Federal Electricity Commission (Spanish initials are CFE). The goal, according to security officials, was to take control of a legitimate industry and secure what is superficially a legal source of revenue. This a classic pattern for organized crime, including the American Mafia. One of the best places to hide illegal cash is in a legitimate business, if the crooks can manage to hide the fact they have taken control of the legitimate business. What is the Zetas’ mark-up on coal? The investigative reports had led to a lot of speculation in Mexican media. Former governor of Coahuila, Humberto Moreira Valdes, told an international media outlet that coal earns the cartel more money than narcotics trafficking. Moreira’s son was murdered in October 2012, after Moreira told a Mexican media outlet that drug traffickers were getting involved in Coahuila’s coal business. In retrospect, it is likely an organized criminal gang (the Zetas) believed Moreira had already told federal authorities that he believed the Zetas had made deep inroads in Coahuila’s coal mining business. Since the murder of his son, Moreira’s accusations have become much more specific, and the subsequent investigations have produced evidence to support his accusations. Moreira was governor of Coahuila from 2005 to 2011, and is a member of the Institutional Revolutionary Party (PRI), President Enrique Pena’s party. Moreira also faces allegations of financial misconduct during his time as governor. It is hard to believe that the Zetas make more from coal than they do from drugs, as Moreira claims, but some Mexican media have concluded that the Zetas are making a lot of money selling truly dirty coal and --a bonus for the cartelistas-- using the mining operation to launder drug money. Last year the Attorney General’s office (PGR) was investigating three companies that might be involved in the Coahuila narco-coal operation. At that time published (but unofficial) sources estimated that Zetas-controlled coal producers were selling 10,000 tons of coal a week and the Zetas were earning somewhere between $23 million and $25 million a year from these sales. That is a lot less than the Zetas earn from their narcotics trafficking operations. However, it appears that the Zetas have concluded it pays to diversify. (Austin Bay)

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