When The Mexican Drug Trade Hits The Border

By Fred Burton and Ben West

For several years now, STRATFOR has been closely monitoring the growing
violence in Mexico and its links to the drug trade.  In December, our cartel
report assessed the situation in Mexico, and two weeks ago we looked closely
at the networks that control the flow of drugs through Central America. This
week, we turn our attention to the border to see the dynamics at work there
and how U.S. gangs are involved in the action.

The nature of narcotics trafficking changes as shipments near the border. As
in any supply chain, shipments become smaller as they reach the retail
level, requiring more people to be involved in the operation. While Mexican
cartels do have representatives in cities across the United States to
oversee networks there, local gangs get involved in the actual distribution
of the narcotics.

While there are still many gaps in the understanding of how U.S. gangs
interface with Mexican cartels to move drugs around the United States and
finally sell them on the retail market, we do know some of the details of
gang involvement.

Trafficking vs. Distribution

Though the drug trade as a whole is highly complex, the underlying concept
is as simple as getting narcotics from South America to the consuming
markets -- chief among them the United States, which is the world's largest
drug market. Traffickers use Central America and Mexico as a pipeline to
move their goods north. The objective of the Latin American smuggler is to
get as much tonnage as possible from Colombia, Peru and Bolivia to the
lucrative American market and avoid interdictions by authorities along the
way.

However, as narcotic shipments near the U.S.-Mexican border, wholesale
trafficking turns into the more micro process of retail distribution. In
southern Mexico, drug traffickers move product north in bulk, but as
shipments cross the U.S. border, wholesale shipments are broken down into
smaller parcels in order to hedge against interdiction and prepare the
product for the end user. One way to think about the difference in tactics
between trafficking drugs in Central America and Mexico and distributing
drugs in the United States is to imagine a company like UPS or FedEx.
Shipping air cargo from, say, New York to Los Angeles requires different
resources than delivering packages to individual homes in southern
California. Several tons of freight from the New York area can be quickly
flown to the Los Angeles area. But as the cargo gets closer to its final
destination, it is broken up into smaller loads that are shipped via tractor
trailer to distribution centers around the region, and finally divided
further into discrete packages carried in parcel trucks to individual homes.

Click to enlarge


As products move through the supply chain, they require more specific
handling and detailed knowledge of an area, which requires more manpower.
The same, more or less, can be said for drug shipments. This can be seen in
interdiction reports. When narcotics are intercepted traversing South
America into Mexico, they can be measured in tons; as they cross the border
into the United States, seizures are reported in kilograms; and by the time
products are picked up on the streets of U.S. cities, the narcotics have
been divided into packages measured in grams. To reflect this difference, we
will refer to the movement of drugs south of the border as trafficking and
the movement of drugs north of the border as distributing.

As narcotics approach the border, law enforcement scrutiny and the risk of
interdiction also increase, so drug traffickers have to be creative when it
comes to moving their products. The constant game of cat-and-mouse makes
drug trafficking a very dynamic business, with tactics and specific routes
constantly changing to take advantage of any angle that presents itself.

The only certainties are that drugs and people will move from south to
north, and that money and weapons will move from north to south. But the
specific nature and corridors of those movements are constantly in flux as
traffickers innovate in their attempts to stay ahead of the police in a very
Darwinian environment. The traffickers employ all forms of movement
imaginable, including:

Tunneling under border fences into safe houses on the U.S. side.
Traversing the desert on foot with 50-pound packs of narcotics. (Dirt bikes,
ATVs and pack mules are also used.)
Driving across the border by fording the Rio Grande, using ramps to get over
fences, cutting through fences or driving through open areas.
Using densely vegetated portions of the riverbank as dead drops.
Floating narcotics across isolated stretches of the river.
Flying small aircraft near the ground to avoid radar.
Concealing narcotics in private vehicles, personal possessions and in or on
the bodies of persons who are crossing legally at ports of entry.
Bribing border officials in order to pass through checkpoints.
Hiding narcotics on cross-border trains.
Hiding narcotics in tractor trailers carrying otherwise legitimate loads.
Using boats along the Gulf coast.
Using human "mules" to smuggle narcotics aboard commercial aircraft in their
luggage or bodies.
Shipping narcotics via mail or parcel service.

These methods are not mutually exclusive, and organizations may use any
combination at the same time. New ways to move the product are constantly
emerging.

Once the narcotics are moved into the United States, drug distributors use
networks of safe houses, which are sometimes operated by people with direct
connections to the Mexican cartels, sometimes by local or regional gang
members, and sometimes by individual entrepreneurs. North of the border,
distributors still must maneuver around checkpoints, either by avoiding them
or by bribing the officials who work there. While these checkpoints
certainly result in seizures, they can only slow or reroute the flow of
drugs. Hub cities like Atlanta service a large region of smaller drug
dealers who act as individual couriers in delivering small amounts of
narcotics to their customers.

It is a numbers game for drug traffickers and distributors alike, since it
is inevitable that smugglers and shipments will be intercepted by law
enforcement somewhere along the supply chain. Those whose loads are
interdicted more often struggle to keep prices low and stay competitive. On
the other hand, paying heavy corruption fees or taking extra precautions to
ensure that more of your product makes it through also raises the cost of
moving the product. Successful traffickers and distributors must be able to
strike a balance between protecting their shipments and accepting losses.
This requires a high degree of pragmatism and rationality.

Local Gangs

While the Mexican cartels do have people in the United States, they do not
have enough people so positioned to handle the increased workload of
distributing narcotics at the retail level. A wide range of skill sets is
required. Some of the tactics involved in moving shipments across the border
require skilled workers, such as pilots, while U.S. gang members along the
border serve as middlemen and retail distributors. Other aspects of the
operation call for people with expertise in manipulating corrupt officials
and recruiting human intelligence sources, while a large part of the process
simply involves saturating the system with massive numbers of expendable,
low-skilled smugglers who are desperate for the money.

The U.S. gangs are crucial in filling the cartel gap north of the border.
Members of these border gangs typically are young men who are willing to
break the law, looking for quick cash and already plugged in to a network of
similar young men, which enables them to recruit others to meet the manpower
demand. They are also typically tied to Mexico through family connections,
dual citizenship and the simple geographic fact that they live so close to
the border. However, the U.S. gangs do not constitute formal extensions of
the Mexican drug-trafficking organizations. Border gangs developed on their
own, have their own histories, traditions, structures and turf, and they
remain independent. They are also involved in more than just drug
trafficking and distribution, including property crime, racketeering and
kidnapping. Their involvement in narcotics is similar to that of a
contractor who can provide certain services, such as labor and protection,
while drugs move across gang territory, but drug money is not usually their
sole source of income.

Click to enlarge

These gangs come in many shapes and sizes. Motorcycle gangs like the Mongols
and Bandidos have chapters all along the southwestern U.S. border and, while
not known to actually carry narcotics across the border into the United
States, they are frequently involved in distributing smaller loads to
various markets across the country to supplement their income from other
illegal activities.

Street gangs are present in virtually every U.S. city and town of
significant size along the border and are obvious pools of labor for
distributing narcotics once they hit the United States. The largest of these
street gangs are MS-13 and the Mexican Mafia. MS-13 has an estimated 30,000
to 50,000 members worldwide, about 25 percent of whom are in the United
States. MS-13 is unique among U.S. gangs in that it is involved in
trafficking narcotics through Central America and Mexico as well as in
distributing narcotics in the United States. The Mexican Mafia works with
allied gangs in the American Southwest to control large swaths of territory
along both sides of the U.S.-Mexican border. These gangs are organized to
interact directly with traffickers in Mexico and oversee transborder
shipments as well as distribution inside the United States.

Prison gangs such as the Barrio Azteca and the Texas Syndicate reach far
beyond the prison fence. Membership in a prison gang typically means that,
at one point, the member was in prison, where he joined the gang. But there
is a wide network of ex-prisoner gang members on the outside involved in
criminal activities, including drug smuggling, which is one of the most
accessible ways for a gang member to make money when he is released from
prison.

Operating underneath the big gang players are hundreds of smaller city gangs
in neighborhoods all along the border. These gangs are typically involved in
property theft, drug dealing, turf battles and other forms of street crime
that can be handled by local police. However, even these gangs can become
involved in cross-border smuggling; for example, the Wonderboys in San Luis,
Ariz., are known to smuggle marijuana, methamphetamine and cocaine across
the border.

Gangs like the Wonderboys also target illegal immigrants coming across the
border and steal any valuable personal items or cash they may have on them.
The targeting of illegal immigrants coming into the United States is common
all across the border, with many gangs specializing in kidnapping newly
arrived immigrants and demanding ransoms from their families. These gangs
are responsible for the record level of kidnapping reported in places like
Phoenix, where 368 abductions were reported in 2008. Afraid to notify law
enforcement out of a fear of being deported, many families of abducted
immigrants somehow come up with the money to secure their family member's
release.

Drug distribution is by far the most lucrative illicit business along the
border, and the competition for money leads to a very pragmatic interface
between the U.S. border gangs and the drug cartels in Mexico. Handoffs from
Mexican traffickers to U.S. distributors are made based upon reliability and
price. While territorial rivalries between drug traffickers have led to
thousands of deaths in Mexico, these Mexican rivalries do not appear to be
spilling over into the U.S. border gangs, who are engaged in their own
rivalries, feuds and acts of violence. Nor do the more gruesome aspects of
violence in Mexico, such as torture and beheadings, although there are
indications that grenades that were once part of cartel arsenals are finding
their way to U.S. gangs. In dealing with the Mexican cartels, U.S. gangs --
and cartels in turn -- exhibit no small amount of business pragmatism. U.S.
gangs can serve more than one cartel, which appears to be fine with the
cartels, who really have no choice in the matter. They need these retail
distribution services north of the border in order to make a profit.

Likewise, U.S. gangs are in the drug business to make money, not to enhance
the power of any particular cartel in Mexico. As such, U.S. gangs do not
want to limit their business opportunities by aligning themselves to any one
cartel. Smaller city gangs that control less territory are more limited
geographically in terms of which cartels they can work with. The Wonderboys
in Arizona, for example, must deal exclusively with the Sinaloa cartel
because the cartel's turf south of the border encompasses the gang's
relative sliver of turf to the north. However, larger gangs like the Mexican
Mafia control much broader swaths of territory and can deal with more than
one cartel.

The expanse of geography controlled by the handful of cartels in Mexico
simply does not match up with the territory controlled by the many gangs on
the U.S. side. Stricter law enforcement is one reason U.S. border gangs have
not consolidated to gain control over more turf. While corruption is a
growing problem along the U.S. side of the border, it still has not risen to
the level that it has in northern Mexico. Another reason for the asymmetry
is the different nature of drug movements north of the border. As discussed
earlier, moving narcotics in the United States has everything to do with
distributing retail quantities of drugs to consumers spread over a broad
geographic area, a model that requires more feet on the ground than the
trafficking that takes place in Mexico.

Assassins' Gate

Because the drug distribution network in the United States is so large, it
is impossible for any one criminal organization to control all of it. U.S.
gangs fill the role of middleman to move drugs around, and they are
entrusted with large shipments of narcotics worth millions of dollars.
Obviously, the cartels need a way to keep these gangs honest.

One effective way is to have an enforcement arm in place. This is where
U.S.-based assassins come in. More tightly connected to the cartels than the
gangs are, these assassins are not usually members of a gang. In fact, the
cartels prefer that their assassins not be in a gang so that their loyalties
will be to the cartels, and so they will be less likely to have criminal
records or attract law enforcement attention because of everyday gang
activity.

Cartels invest quite a bit in training these hit men to operate in the
United States. Often they are trained in Mexico, then sent back across to
serve as a kind of "sleeper cell" until they are tapped to take out a
delinquent U.S. drug dealer. The frequency and ease with which Americans
travel to and from Mexico covers any suspicion that might be raised.

The Gaps

The U.S.-Mexican border is a dynamic place, with competition over drug
routes and the quest for cash destabilizing northern Mexico and straining
local and state law enforcement on the U.S. side. Putting pressure on the
people who are active in the border drug trade has so far only inspired
others to innovate and adapt to the challenging environment by becoming more
innovative and pragmatic.

And there is still so much we do not know. The exact nature of the
relationship between Mexican cartels and U.S. gangs is very murky, and it
appears to be handled on such an individual basis that making
generalizations is difficult. Another intelligence gap is how deeply
involved the cartels are in the U.S. distribution network. As mentioned
earlier, the network expands as it becomes more retail in nature, but the
profit margins also expand, making it an attractive target for cartel
takeover. Finally, while we know that gangs are instrumental in distributing
narcotics in the United States, it is unclear how much of the cross-border
smuggling they control. Is this vital, risky endeavor completely controlled
by cartels and gatekeeper organizations based in Mexico, or do U.S. gangs on
the distribution side have more say? STRATFOR will continue to monitor these
issues as Mexico's dynamic cartels continue to evolve.


This report may be forwarded or republished on your website with attribution
to www.stratfor.com.

Copyright 2009 Stratfor.


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