Stratfor and Ana de la Reguera

In the latest Stratfor article Ben West discusses the discovery of 15 tons of methamphetamine, and a lab to produce such quantities of the drug, at a Mexican ranch.

Ben argues that this is a significant discovery because it points to an evolution of the operations of Mexican drug cartels. Up until now Mexican drug gangs have primarily transited cocaine from Columbia to the United States, with their profits being the money they could skim off the top of that operation.

However, the size of the seized drug lab points to them producing meth at an industrial level, which will not only influence their profits, but how they may function in the future as well. He discusses those ramifications of that development in his article, which I've excerpted the beginning of below. You can follow the link at the end of the excerpt to read the entire article.

Since the article dealt with Mexico, I decide to once again turn to mine Mexican telenovas for an actress worthy of being named the article's Hot Stratfor Babe. After my usual meticulous search I selected Ana de la Reguera for the profound honor.

Ms. de la Reguera is a quite popular Latin actress. Dhe started in telenovas, but has since branched into commercials and movies. She is also a spokesperson for CoverGirl cosmetics. She appeared in the second season of HBO's series Eastbound and Down, so she appears to be trying to break into the U.S. market as well.

I must say that, given a choice, I would much prefer more of her to more meth.      


Meth in Mexico: A Turning Point in the Drug War?
By Ben West, February 16,2012

Mexican authorities announced Feb. 8 the largest seizure of methamphetamine in Mexican history -- and possibly the largest ever anywhere -- on a ranch outside of Guadalajara. The total haul was 15 tons of pure methamphetamine along with a laboratory capable of producing all the methamphetamine seized. While authorities are not linking the methamphetamine to any specific criminal group, Guadalajara is a known stronghold of the Sinaloa Federation, and previous seizures there have been connected to the group.

Methamphetamine, a synthetic drug manufactured in personal labs for decades, is nothing new in Mexico or the United States. The U.S. Drug Enforcement Administration (DEA) has led numerous crusades against the drug, increasing regulations on its ingredients to try to keep it from gaining a foothold in the United States. While the DEA's efforts have succeeded in limiting production of the drug in the United States, consumption has risen steadily over the past two decades. The increasing DEA pressure on U.S. suppliers and the growing demand for methamphetamine have driven large-scale production of the drug outside the borders of the United States. Given Mexico's proximity and the pervasiveness of organized criminal elements seeking new markets, it makes sense that methamphetamine would be produced on an industrial scale there. Indeed, Mexico has provided an environment for a scale of production far greater than anything ever seen in the United States.

But last week's methamphetamine seizure sheds light on a deeper shift in organized criminal activity in Mexico -- one that could mark a breakthrough in the violent stalemate that has existed between the Sinaloa Federation, Los Zetas and the government for the past five years and has led to an estimated 50,000 deaths. It also reveals a pattern in North American organized crime activity that can be seen throughout the 20th century as well as a business opportunity that could transform criminal groups in Mexico from the drug trafficking intermediaries they are today to controllers of an independent and profitable illicit market.

While the trafficking groups in Mexico are commonly called "cartels" (even Stratfor uses the term), they are not really cartels. A cartel is a combination of groups cooperating to control the supply of a commodity. The primary purpose of a cartel is to set the price of a commodity so that buyers cannot negotiate lower prices. The current conflict in Mexico over cocaine and marijuana smuggling routes shows that there are deep rifts between rival groups like the Sinaloa Federation and Los Zetas. There is no sign that they are cooperating with each other to set the price of cocaine or marijuana. Also, since most of the Mexican criminal groups are involved in a diverse array of criminal activities, their interests go beyond drug trafficking. They are perhaps most accurately described as "transnational criminal organizations" (TCOs), the label currently favored by the DEA.

Examples from the Past

While the level of violence in Mexico right now is unprecedented, it is important to remember that the Mexican TCOs are businesses. They do use violence in conducting business, but their top priority is to make profits, not kill people. The history of organized crime shows many examples of groups engaging in violence to control an illegal product. During the early 20th century in North America, to take advantage of Prohibition in the United States, organized criminal empires were built around the bootlegging industry. After the repeal of Prohibition, gambling and casinos became the hot market. Control over Las Vegas and other major gambling hubs was a business both dangerous and profitable. Control over the U.S. heroin market was consolidated and then dismantled during the 1960s and 1970s. Then came cocaine and the rise in power, wealth and violence of Colombian groups like the Medellin and Cali cartels.

But as U.S. and Colombian law enforcement cracked down on the Colombian cartels -- interdicting them in Colombia and closing down their Caribbean smuggling corridors -- Colombian producers had to turn to the Mexicans to traffic cocaine through Mexico to the United States. To this day, however, Colombian criminal groups descended from the Medellin and Cali cartels control the cultivation and production of cocaine in South America, while Mexican groups increasingly oversee the trafficking of the drug to the United States, Europe and Africa.

The Mexican Weakness

While violence has been used in the past to eliminate or coerce competitors and physically take control of an illegal market, it has not proved to be a solution in recent years for Mexican TCOs. The Medellin cartel became infamous for attacking Colombian state officials and competitors who tried to weaken its grasp over the cocaine market. Going back further, Benjamin "Bugsy" Siegel is thought to have been murdered over disagreements about his handling of the Flamingo Hotel in Las Vegas. Before that, Prohibition saw numerous murders over control of liquor shipments and territory. In Mexico, we are seeing an escalating level of such violence, but few of the business resolutions that would be expected to come about as a result.

Geography helps explain this. In Mexico, the Sierra Madre mountain range splits the east coast and the west from the center. The Gulf of Mexico and the Pacific Ocean coastal plains tend to develop their own power bases separate from each other.

Read the rest of Meth in Mexico: A Turning Point in the Drug War? at Stratfor.