24-04-2009, 04:38 AM
El Chapo Guzman: the National Action Party's Drug Baron
Posted by Kristin Bricker - April 19, 2009 at 5:44 pm by Ricardo Ravelo, Proceso
translated from the original Spanish by Kristin Bricker
Beyond simply revealing an approximation of El Chapo Guzman's fortune, his inclusion in Forbes' list of billionaires is a blow in the media that brings attention to the immense fortune that the Sinaloa cartel moves through its financial network in Mexico and in the United States. In order to dismantle this organization, the businesses that were listed in DEA and Treasury Department press releases would have to be thoroughly investigated, which is something the National Action Party (PAN) administrations of Vicente Fox and Felipe Calderon have not done. It is estimated that drug trafficking money is linked to about 78% of legal Mexican activities.
Untouched by the PAN-led federal government--the Vicente Fox administration in particular, during which he escaped from the Puente Grande maximum security prison in Jalisco--Joaquin "El Chapo" Guzman Loera now leads the most powerful drug trafficking organization in the country, with large networks in South America, Central America, and the United States.
In an interview with Proceso in February 2005, then-president of the National Commission on Public Security, Jose Antonio Ortega Sanchez, referred to him as the "drug trafficker of the [Fox] administration." He said, "It is evident that [the drug baron] is being protected, because the PGR [Federal Attorney General's Office] always arrives late when it has information about where he can be found. It would seem that he is the drug trafficker protected by the authorities who are obliged to detain him." (Proceso 1476)
Now, Forbes Magazine's most recent report includes the Mexican drug baron in its list of billionaires. However, it's not the first time a drug trafficker has been included in the famed list. In 1989 the US publication included Colombian drug trafficker Pablo Escobar Gaviria.
Edgardo Buscaglia, a Columbia University professor of economics and law and an investigator for the Technological Institute of Mexico (ITAM), believes the Forbes report about El Chapo's fortune doesn't have a trustworthy methodology.
Buscaglia, who is also an adviser to the United Nations Institute for Training and Research, was asked, "In your opinion, what's the purpose of including a drug baron in the list of the world's richest men?"
"The Forbes publication is relevant as a blow in the media, but I think that the United States intelligence agencies are sending very clear signals to President Felipe Calderon that he should begin an investigation into the Sinaloa cartel and dismantle the network of fronts that are behind the capital that this criminal group moves. In the US they want the financial investigations to focus on both sides of the border."
The investigator explains that the United States' perception of Mexico is "grave and worrisome." Drug money is linked to 78% of legal Mexican activities. Moreover, "the Sinaloa cartel is not limited to Mexico. Rather, there are serious reports that it is present in 38 countries. That's why Mexico is seen as a dangerous exporter of violence and ingovernability."
He adds, "El Chapo Guzman can have millions of dollars or much more, but it is difficult to confirm it. A surprise isn't out of the question given the Forbes report's lack of solid data. But I insist that this is about a blow in the media. There are estimates of the amount of money the drug traffickers launder, but it hasn't been possible to prove how much earnings they really have."
"To calculate those values, we need an investigation into the financial and criminal map in these 38 countries' economic sectors, something which hasn't been done in a comprehensive manner," he says.
"So, the point of the Forbes publication was political pressure?"
"The message is clear: the Mexican government must destroy the entire protective network that securely manages the Sinaloa cartel's money--a network that could include politicians and businessmen; it must, for better or for worse, break those untouched financial networks, because if that doesn't happen, a brutal political blow could strike Calderon if the names of the businesses and the people linked to the Sinaloa cartel are made public outside of Mexico."
Buscaglia points out that the Forbes report lacks veracity because it only credits El Chapo Guzman with the alleged earnings from drug trafficking and not what he allegedly earns through the 25 criminal activities undertaken by drug cartels: human trafficking, piracy of intellectual property, the slave trade, extortion, and kidnapping, among others.
What he doesn't doubt is that in Mexico the Sinaloa cartel and El Chapo have enjoyed full impunity. They don't feel harassed or even bothered by the Mexican government's actions. That's why Guzman's financial network, as well as the impunity he enjoys, are the primary supports of his power and strength.
Buscaglia has studied organized crime's behavior in 84 countries, including Afghanistan, Kosovo, Colombia, and Guatemala. His claims are echoed in reality: since his escape from the Puente Grande, Jalisco, prison on January 19, 2001, Joaquin Guzman Loera has consolidated one of the most solid criminal enterprises in existence. The investigator calculates that its presence could span up to 50 countries.
The eight years of PAN regimes in Mexico--from December 2001 to December 2009--have been the most profitable for Guzman Loera from a criminal and financial point of view. The PGR and the Ministry of Public Security (SSP) consider him to be the most powerful drug baron in Mexico.
Rise to Power
As soon as he felt freedom on the afternoon of January 19, 2001, El Chapo Guzman sought refuge with the Beltran Leyva brothers--currently his bitter rivals--and received support from about emblematic figure in drug trafficking: Ismael "El Mayo" Zambada.
Months after his escape, Guzman Loera hatched on of his most ambitious plans to consolidate his narco-enterprise project, which hasn't been without betrayal and death. In order to achieve it, the drug baron had to break his old ties with the Juarez cartel and Vicente Carrillo Fuentes, the boss of the organization headquartered in Ciudad Juarez, Chihuahua.
Said plan was put together in Monterrey, according to a letter signed by a Beltran Leyva deputy, which was annexed in the criminal investigation PGR/ SIEDO/ UEIDCS/ 013 /2005 and sent to the President in October 2004.
That document reveals that El Chapo Guzman convened his partners in a business meeting in Monterrey, Nuevo Leon. Ismael "El Mayo" Zambada Garcia, Juan Jose "El Azul" Esparragoza Moreno, and Arturo "El Barbas" Beltran Leyva attended the meeting.
In a key part, the letter says, "About three months ago, in the city of Monterrey, Nuevo Leon, a meeting occurred between various people with links to organized crime.... The reason for the meeting was to plan the murder of Rodolfo Carrillo Fuentes (murdered in September 2004), and once he was executed, to try to incriminate another opposing group, which would be Los Zetas, the objective of these actions being in part to end the Carrillo Fuentes family's hegemony over that cartel or organization..."
Guzman Loera's other plans consisted in wiping out Los Zetas and declaring war on the Tijuana cartel.
It all went according to plan: Rodolfo "the Golden Boy" Carrillo was executed, serious attacks began against Los Zetas, and according to intelligence sources, the information that El Chapo Guzman gave to federal authorities "turned out to be key" in detaining Benjamin Arellano Felix and "cutting off the head" of that era's most terrible criminal group.
From 2001 to present, El Chapo Guzman has not only consolidated the Sinaloa cartel, his organization, as the most prosperous in the country. He's also been impossible to arrest, despite the fact that Attorney General Eduardo Medina Mora and Secretary of Public Security Genaro Garcia Luna have said that they won't stop chasing the Sinaloa drug baron.
Despite said persecution, El Chapo Guzman takes public walks and, since the end of the Fox administration, there have been public references that he is accustomed to dine in fine restaurants in Jalisco, Sinaloa, Coahuila, and Chihuahua, where when he enters the building other diners' cell phones are confiscated to prevent them from calling the police.
For example, in mid-2006, security cameras in the city of Durango detected El Chapo Guzman when he was driving a four-wheeler. According to municipal authorities, the drug baron was wearing work-out clothing. On that occasion a persecution was begun, supposedly to detain him, but the narco was lost in traffic.
The images obtained from the cameras allowed the PGR to see the Sinaloa cartel boss' new face. It was confirmed that he underwent plastic surgery to change his appearance: his cheeks were trimmed, his skin was tighter, and the wrinkles around his eyes were gone.
Network Without Borders
Even though Mexican and US authorities have not been able to quantify Mexican cartels' true earnings, they have identified, beginning in 2000, part of the financial structure that serves drug trafficking interests through alleged money laundering operations.
Since 2000, for example, the US Treasury Department has issued various alerts about just over a thousand people who, according to its reports, are in Mexico and linked to drug trafficking.
The Treasury Department reports state that there are businesses such as Nueva Industria de Ganaderos de Culiacan S.A. de C.V., property of Ismael "El Mayo" Zambada--El Chapo Guzman's primary partner--that are currently promoted by the federal government and that during the Fox administration received support from the Ministry of Economy through the Small and Medium Enterprise Fund (Pymes in its Spanish abbreviation).
According to a report from the US Treasury Department's Office of Foreign Assets Control (OFAC), issued in August 2008, from 2000 to mid-2008, the US government registered 121 businesses "that have served as fronts for laundering drug trafficking money."
The Mexican government has repeatedly stated that those reports lack credibility, that there is no evidence that the businesses mentioned as part of the "money laundering machinery" are implicated in illicit activities.
According to the OFAC report, said companies are primarily dedicated to importation, exportation, consulting, currency trading, services, mining and transportation, as well the pharmaceutical, real estate, and food industries.
Information obtained from the PGR shows that, of the 121 businesses in the Treasury reports, 48 belong to the Tijuana cartel and 34 to the Arriola Marquez family (located in Chihuahua and a Juarez cartel partner), while 25 more are linked to El Mayo Zambada and his family.
While in Mexico the blows to Sinaloa cartel's financial structure haven't been convincing, since 2007 the United States has put the spotlight on Joaquin Guzman's main partner: Ismael Zambada Garcia.
That year, and as a result of a 20-month-long DEA investigation, the Treasury Department linked six businesses to Zambada's money laundering activities. They are: Establo Puerto Rico, S.A. de C.V.; Jamaro Constructores S.A. de C.V.; Multiservicios Jeviz, S.A. de C.V.; Estancia Infantil Niño Feliz S.C.; Rosario Niebla Cardosa, A. en. P.; as well as Nueva Industria Ganadera de Culiacan.
The Treasury Department also identified Mexican national Margarita "La Emperatriz" Cazares Salazar as one of the key Sinaloa cartel figures dedicated to money laundering. Later the PGR had to admit it.
The investigations in the United States into this criminal group and its boss, El Chapo, began to show results. They now include names of people who make up a complicated financial network that operates in both countries.
With his power and influence, Guzman Loera sidestepped control mechanisms through an intricate operations network in currency exchange houses and banking institutions that allowed him to acquire 13 planes to put them to work in his organization trafficking cocaine between Colombia, Venezuela, Central America, Mexico, and the United States.
After the Treasury Department confirmed said operations, in mid-2007 the PGR put together the investigation dossier PGR/ SIEDO /UEIORP /FAM /119 /2007, still active, in which it was revealed that the Sinaloa cartel bought the planes through the Puebla Currency Exchange House.
According to the investigation, that financial institution used the triangulation of operations in which over 70 businesses participate. In that way they were able to wire USD$12,951,785 to fourteen United States companies that are dedicated to acquiring and insuring aircraft.
According to the investigation, the architect of the triangulation scheme was Pedro Alfonso "El Piri" Alatorre Damy, also known as Pedro Barraza Urtusiastegui or Pedro Alatriste Davalos, who was imprisoned in 1998 for money laundering during Operation Milenio, which shed light on the cartel run by Armando and Luis Valencia. After obtaining his freedom, El Piri returned to his adventures and became involved in the Sinaloa cartel's financial operations.
The cost of drugs has varied according to its quality and, more importantly, transportation. If a shipment is dropped off close to the border, it has a higher cost than if it were unloaded in a different territory. But according to the book, "El Negocio: the Mexican Economy Trapped by Drug Trafficking by journalist Carlos Loret Mola (Grijalbo Publishing, 2001), a kilo of marijuana costs a thousand dollars on the wholesale market.
However, Loret estimates that "the value can reach up to US$2,500 amongst wholesale distributors--that is, those who purchase large quantities in order to later sell them at retail in the streets and neighborhoods in the United States."
"The market conditions for coca growers are similar: in South America a kilo of coca goes for USD$2,500 in rural areas, while amongst distributors it can be sold for up to $45,000.
"And heroine? A gram of the stuff, very low quality, can be bought on Mexican streets for about ten dollars. But if it crosses the border, it can cost up to $318.
Edgardo Buscaglia says that in order to discover how much the mafias of the world earn, it is necessary to have access to their financial maps. "In Mexico this investigation must be done. It is fundamental for dismantling the networks and to end the complicity that has allowed organized crime to rule."
Posted by Kristin Bricker - April 19, 2009 at 5:44 pm by Ricardo Ravelo, Proceso
translated from the original Spanish by Kristin Bricker
Beyond simply revealing an approximation of El Chapo Guzman's fortune, his inclusion in Forbes' list of billionaires is a blow in the media that brings attention to the immense fortune that the Sinaloa cartel moves through its financial network in Mexico and in the United States. In order to dismantle this organization, the businesses that were listed in DEA and Treasury Department press releases would have to be thoroughly investigated, which is something the National Action Party (PAN) administrations of Vicente Fox and Felipe Calderon have not done. It is estimated that drug trafficking money is linked to about 78% of legal Mexican activities.
Untouched by the PAN-led federal government--the Vicente Fox administration in particular, during which he escaped from the Puente Grande maximum security prison in Jalisco--Joaquin "El Chapo" Guzman Loera now leads the most powerful drug trafficking organization in the country, with large networks in South America, Central America, and the United States.
In an interview with Proceso in February 2005, then-president of the National Commission on Public Security, Jose Antonio Ortega Sanchez, referred to him as the "drug trafficker of the [Fox] administration." He said, "It is evident that [the drug baron] is being protected, because the PGR [Federal Attorney General's Office] always arrives late when it has information about where he can be found. It would seem that he is the drug trafficker protected by the authorities who are obliged to detain him." (Proceso 1476)
Now, Forbes Magazine's most recent report includes the Mexican drug baron in its list of billionaires. However, it's not the first time a drug trafficker has been included in the famed list. In 1989 the US publication included Colombian drug trafficker Pablo Escobar Gaviria.
Edgardo Buscaglia, a Columbia University professor of economics and law and an investigator for the Technological Institute of Mexico (ITAM), believes the Forbes report about El Chapo's fortune doesn't have a trustworthy methodology.
Buscaglia, who is also an adviser to the United Nations Institute for Training and Research, was asked, "In your opinion, what's the purpose of including a drug baron in the list of the world's richest men?"
"The Forbes publication is relevant as a blow in the media, but I think that the United States intelligence agencies are sending very clear signals to President Felipe Calderon that he should begin an investigation into the Sinaloa cartel and dismantle the network of fronts that are behind the capital that this criminal group moves. In the US they want the financial investigations to focus on both sides of the border."
The investigator explains that the United States' perception of Mexico is "grave and worrisome." Drug money is linked to 78% of legal Mexican activities. Moreover, "the Sinaloa cartel is not limited to Mexico. Rather, there are serious reports that it is present in 38 countries. That's why Mexico is seen as a dangerous exporter of violence and ingovernability."
He adds, "El Chapo Guzman can have millions of dollars or much more, but it is difficult to confirm it. A surprise isn't out of the question given the Forbes report's lack of solid data. But I insist that this is about a blow in the media. There are estimates of the amount of money the drug traffickers launder, but it hasn't been possible to prove how much earnings they really have."
"To calculate those values, we need an investigation into the financial and criminal map in these 38 countries' economic sectors, something which hasn't been done in a comprehensive manner," he says.
"So, the point of the Forbes publication was political pressure?"
"The message is clear: the Mexican government must destroy the entire protective network that securely manages the Sinaloa cartel's money--a network that could include politicians and businessmen; it must, for better or for worse, break those untouched financial networks, because if that doesn't happen, a brutal political blow could strike Calderon if the names of the businesses and the people linked to the Sinaloa cartel are made public outside of Mexico."
Buscaglia points out that the Forbes report lacks veracity because it only credits El Chapo Guzman with the alleged earnings from drug trafficking and not what he allegedly earns through the 25 criminal activities undertaken by drug cartels: human trafficking, piracy of intellectual property, the slave trade, extortion, and kidnapping, among others.
What he doesn't doubt is that in Mexico the Sinaloa cartel and El Chapo have enjoyed full impunity. They don't feel harassed or even bothered by the Mexican government's actions. That's why Guzman's financial network, as well as the impunity he enjoys, are the primary supports of his power and strength.
Buscaglia has studied organized crime's behavior in 84 countries, including Afghanistan, Kosovo, Colombia, and Guatemala. His claims are echoed in reality: since his escape from the Puente Grande, Jalisco, prison on January 19, 2001, Joaquin Guzman Loera has consolidated one of the most solid criminal enterprises in existence. The investigator calculates that its presence could span up to 50 countries.
The eight years of PAN regimes in Mexico--from December 2001 to December 2009--have been the most profitable for Guzman Loera from a criminal and financial point of view. The PGR and the Ministry of Public Security (SSP) consider him to be the most powerful drug baron in Mexico.
Rise to Power
As soon as he felt freedom on the afternoon of January 19, 2001, El Chapo Guzman sought refuge with the Beltran Leyva brothers--currently his bitter rivals--and received support from about emblematic figure in drug trafficking: Ismael "El Mayo" Zambada.
Months after his escape, Guzman Loera hatched on of his most ambitious plans to consolidate his narco-enterprise project, which hasn't been without betrayal and death. In order to achieve it, the drug baron had to break his old ties with the Juarez cartel and Vicente Carrillo Fuentes, the boss of the organization headquartered in Ciudad Juarez, Chihuahua.
Said plan was put together in Monterrey, according to a letter signed by a Beltran Leyva deputy, which was annexed in the criminal investigation PGR/ SIEDO/ UEIDCS/ 013 /2005 and sent to the President in October 2004.
That document reveals that El Chapo Guzman convened his partners in a business meeting in Monterrey, Nuevo Leon. Ismael "El Mayo" Zambada Garcia, Juan Jose "El Azul" Esparragoza Moreno, and Arturo "El Barbas" Beltran Leyva attended the meeting.
In a key part, the letter says, "About three months ago, in the city of Monterrey, Nuevo Leon, a meeting occurred between various people with links to organized crime.... The reason for the meeting was to plan the murder of Rodolfo Carrillo Fuentes (murdered in September 2004), and once he was executed, to try to incriminate another opposing group, which would be Los Zetas, the objective of these actions being in part to end the Carrillo Fuentes family's hegemony over that cartel or organization..."
Guzman Loera's other plans consisted in wiping out Los Zetas and declaring war on the Tijuana cartel.
It all went according to plan: Rodolfo "the Golden Boy" Carrillo was executed, serious attacks began against Los Zetas, and according to intelligence sources, the information that El Chapo Guzman gave to federal authorities "turned out to be key" in detaining Benjamin Arellano Felix and "cutting off the head" of that era's most terrible criminal group.
From 2001 to present, El Chapo Guzman has not only consolidated the Sinaloa cartel, his organization, as the most prosperous in the country. He's also been impossible to arrest, despite the fact that Attorney General Eduardo Medina Mora and Secretary of Public Security Genaro Garcia Luna have said that they won't stop chasing the Sinaloa drug baron.
Despite said persecution, El Chapo Guzman takes public walks and, since the end of the Fox administration, there have been public references that he is accustomed to dine in fine restaurants in Jalisco, Sinaloa, Coahuila, and Chihuahua, where when he enters the building other diners' cell phones are confiscated to prevent them from calling the police.
For example, in mid-2006, security cameras in the city of Durango detected El Chapo Guzman when he was driving a four-wheeler. According to municipal authorities, the drug baron was wearing work-out clothing. On that occasion a persecution was begun, supposedly to detain him, but the narco was lost in traffic.
The images obtained from the cameras allowed the PGR to see the Sinaloa cartel boss' new face. It was confirmed that he underwent plastic surgery to change his appearance: his cheeks were trimmed, his skin was tighter, and the wrinkles around his eyes were gone.
Network Without Borders
Even though Mexican and US authorities have not been able to quantify Mexican cartels' true earnings, they have identified, beginning in 2000, part of the financial structure that serves drug trafficking interests through alleged money laundering operations.
Since 2000, for example, the US Treasury Department has issued various alerts about just over a thousand people who, according to its reports, are in Mexico and linked to drug trafficking.
The Treasury Department reports state that there are businesses such as Nueva Industria de Ganaderos de Culiacan S.A. de C.V., property of Ismael "El Mayo" Zambada--El Chapo Guzman's primary partner--that are currently promoted by the federal government and that during the Fox administration received support from the Ministry of Economy through the Small and Medium Enterprise Fund (Pymes in its Spanish abbreviation).
According to a report from the US Treasury Department's Office of Foreign Assets Control (OFAC), issued in August 2008, from 2000 to mid-2008, the US government registered 121 businesses "that have served as fronts for laundering drug trafficking money."
The Mexican government has repeatedly stated that those reports lack credibility, that there is no evidence that the businesses mentioned as part of the "money laundering machinery" are implicated in illicit activities.
According to the OFAC report, said companies are primarily dedicated to importation, exportation, consulting, currency trading, services, mining and transportation, as well the pharmaceutical, real estate, and food industries.
Information obtained from the PGR shows that, of the 121 businesses in the Treasury reports, 48 belong to the Tijuana cartel and 34 to the Arriola Marquez family (located in Chihuahua and a Juarez cartel partner), while 25 more are linked to El Mayo Zambada and his family.
While in Mexico the blows to Sinaloa cartel's financial structure haven't been convincing, since 2007 the United States has put the spotlight on Joaquin Guzman's main partner: Ismael Zambada Garcia.
That year, and as a result of a 20-month-long DEA investigation, the Treasury Department linked six businesses to Zambada's money laundering activities. They are: Establo Puerto Rico, S.A. de C.V.; Jamaro Constructores S.A. de C.V.; Multiservicios Jeviz, S.A. de C.V.; Estancia Infantil Niño Feliz S.C.; Rosario Niebla Cardosa, A. en. P.; as well as Nueva Industria Ganadera de Culiacan.
The Treasury Department also identified Mexican national Margarita "La Emperatriz" Cazares Salazar as one of the key Sinaloa cartel figures dedicated to money laundering. Later the PGR had to admit it.
The investigations in the United States into this criminal group and its boss, El Chapo, began to show results. They now include names of people who make up a complicated financial network that operates in both countries.
With his power and influence, Guzman Loera sidestepped control mechanisms through an intricate operations network in currency exchange houses and banking institutions that allowed him to acquire 13 planes to put them to work in his organization trafficking cocaine between Colombia, Venezuela, Central America, Mexico, and the United States.
After the Treasury Department confirmed said operations, in mid-2007 the PGR put together the investigation dossier PGR/ SIEDO /UEIORP /FAM /119 /2007, still active, in which it was revealed that the Sinaloa cartel bought the planes through the Puebla Currency Exchange House.
According to the investigation, that financial institution used the triangulation of operations in which over 70 businesses participate. In that way they were able to wire USD$12,951,785 to fourteen United States companies that are dedicated to acquiring and insuring aircraft.
According to the investigation, the architect of the triangulation scheme was Pedro Alfonso "El Piri" Alatorre Damy, also known as Pedro Barraza Urtusiastegui or Pedro Alatriste Davalos, who was imprisoned in 1998 for money laundering during Operation Milenio, which shed light on the cartel run by Armando and Luis Valencia. After obtaining his freedom, El Piri returned to his adventures and became involved in the Sinaloa cartel's financial operations.
The cost of drugs has varied according to its quality and, more importantly, transportation. If a shipment is dropped off close to the border, it has a higher cost than if it were unloaded in a different territory. But according to the book, "El Negocio: the Mexican Economy Trapped by Drug Trafficking by journalist Carlos Loret Mola (Grijalbo Publishing, 2001), a kilo of marijuana costs a thousand dollars on the wholesale market.
However, Loret estimates that "the value can reach up to US$2,500 amongst wholesale distributors--that is, those who purchase large quantities in order to later sell them at retail in the streets and neighborhoods in the United States."
"The market conditions for coca growers are similar: in South America a kilo of coca goes for USD$2,500 in rural areas, while amongst distributors it can be sold for up to $45,000.
"And heroine? A gram of the stuff, very low quality, can be bought on Mexican streets for about ten dollars. But if it crosses the border, it can cost up to $318.
Edgardo Buscaglia says that in order to discover how much the mafias of the world earn, it is necessary to have access to their financial maps. "In Mexico this investigation must be done. It is fundamental for dismantling the networks and to end the complicity that has allowed organized crime to rule."