For my year of "Crime and Punishment", I've been seeking books that can help me understand the flows of illicit money in the modern world. "Los Zetas, Inc." about the business practices of the notorious Los Zeta's drug cartel in Mexico seemed like it should have been a slam dunk. After all, Correa-Cabrera's stated thesis is that "this new criminal model and government reactions to it mostly benefit transnational corporate capital" - sounds like big money, right? And with "$500 million a year in bribes allocated to all levels of the Mexican government," there should be plenty of juicy corruption stories in here too? Instead of bringing the Mexican drug wars to life with anecdotes of the men and women on both sides, Correa-Cabrera opts to take an academic, quantitative perspective. Unfortunately, she falls flat, delivering a lifeless narrative that doesn't redeem itself with any real insight into the economics of the cartels. There are few hard numbers in here and lots of speculation. By the end, she's even into conspiracy theory territory - suggesting that the big oil companies are somehow in league with the cartels so that they can push Mexican peasants off of valuable oil properties and buy up the land cheaply. Interesting to note that this book is the result of research funded by George Soros's Open Society Foundations.
The most interesting part of this book was its contention that the Zetas represent a front in a Mexican civil war. And in many ways, the Zetas seem to behave like a state. I was particularly struck by the following passage which indicates that the Zetas have usurped one of the key functions of the state: a monopoly on violence in a defined territory.
According to Arron Daugherty and Steven Dudley: The Zetas are not just violent because their leaders have a penchant for aggression — they follow an economic model that relies on controlling territory in a violent way. Within that territory, they extract rents from other criminal actors and move only a limited number of illegal goods via some of their own networks... Without that territory, they have no rent (known in Mexico as “piso”). The Zetas are, in essence, parasites. Their model depends on their ability to be more powerful and violent than their counterparts, so they can extract this rent.
Overall though, if you want to learn about how drug cartels work, check out "Narconomics" (which Correa-Cabrera cites) or even Don Winslow's "The Power of the Dog" which is a fictionalized but heavily-researched account of the US/Mexico war on drug cartels.
My highlights below.
To date, Mexico’s so-called war on drugs, or security strategy to combat organized crime frontally, has claimed over 150,000 lives.
The Zetas revolutionized the enforcement methodologies of criminal organizations, fostering a generalized arms race, with more militaristic troops who now carry more sophisticated weaponry. This development, coupled with the implementation of a complex businesslike model and a rupture with past governmental relations in a “new democratic” era, allowed for the evolution of drug-trafficking organizations into truly transnational entities.
A key argument of this work is that recent violent conflict in Mexico has its origins in a new criminal model introduced by the Zetas.
Recent books on the topic of the Zetas, Mexico’s so-called war on drugs, and organized crime and violence in this country include, among many others: George W. Grayson (2014b), The Evolution of Los Zetas in Mexico and Central America: Sadism as an Instrument of Cartel Warfare; Ricardo Ravelo (2013), Zetas: La franquicia criminal; Guillermo Valdés (2013), Historia del narcotráfico en México; George W. Grayson and Samuel Logan (2012), The Executioner’s Men: Los Zetas, Rogue Soldiers, Criminal Entrepreneurs, and the Shadow State They Created; Diego E. Osorno (2012), La guerra de los Zetas: Viaje por la frontera de la necropolítica; and Ioan Grillo (2011), El Narco: Inside Mexico’s Criminal Insurgency.
Studying the Zetas as a business organization is a promising alternative.
The main hypothesis of this work is that this new criminal model and government reactions to it mostly benefit transnational corporate capital.
The main causes include the emerging face and new structure of organized crime as well as the government’s reactions to this phenomenon in an environment that bears a resemblance to a civil war. The consequences have to do with a redistribution of territory and revenues toward economic activities that would essentially benefit trans national corporate capital, particularly extractive industries and global security contractors.
Academic work on these subjects is still in a very preliminary stage due to the extremely high risks of doing field research in TCO-controlled areas.
SECTION I - THE ZETAS: CRIMINAL PARAMILITARIES IN A TRANSNATIONAL BUSINESS
CHAPTER 1 - The Zetas’ Origins
Nuevo Laredo’s customs alone handles approximately 40 percent of the trade between Mexico and the United States, and the three main maritime ports of Tamaulipas accommodate more than half of the ships destined for the European market
Tamaulipas has more border crossings into the United States than any other Mexican state, eighteen in all
Agriculture and manufacturing (maquila) have long been the primary sources of legitimate development in Tamaulipas, but during the last century drug trafficking began to be a key factor in the state’s economy, with the Gulf Cartel acting as a major player. This criminal organization originated in the city of Matamoros and eventually dominated key illegal activities and organized crime in Tamaulipas for several decades (Correa-Cabrera 2014c). Its origins can be traced to the 1930s, when Juan N. (Nepomuceno) Guerra started smuggling whiskey into the United States during Prohibition.
“Due to US interdiction successes in the Caribbean during the [late 1980s] and 1990s, Mexico [became] the single most important way-station for cocaine and heroin produced in the Andes, and [remained] a major producer of marijuana and methamphetamines
The drug business became particularly profitable during the late 1980s and 1990s, a period during which the Gulf Cartel was introducing cocaine, marijuana, methamphetamines, and heroin to important US cities. In just one decade, from 1985 to 1995, police calculated that this organization introduced more than 5,000 tons of cocaine base paste. By the end of that period it was estimated that the annual income of the CDG for performing this activity was approximately $20 billion: ironically, the same amount of money that the United States lent to Mexico to overcome the 1995 financial crisis
Some calculated that those involved in the drug-trafficking business during that time spent nearly $500 million a year in bribes allocated to all levels of the Mexican government
Once a mechanic in Matamoros, Cárdenas consolidated his power in the organization through the extensive use of violence and in particular through the introduction of the Zetas in the late 1990s as the armed enforcers of the Gulf Cartel.
According to most accounts, the group initially consisted of Arturo Guzmán Decena (aka Z-1) and thirty members of the Mexican army, many of whom came from outside Tamaulipas. These were Mexican army deserters who belonged to elite forces. They were trained in the use of highly specialized military equipment as well as in counterinsurgency operations. According to some accounts, they received training from foreign governments in the United States, Israel, and other countries.
What the Zetas brought to the table was that [military] operational capability. The other cartels didn’t know anything about this. It revolutionized the whole landscape”
Over eight thousand vehicles and more than three hundred thousand people cross on average each day through the international bridges that connect this city with Texas.
The Zetas at one point consisted of 1,000–3,000 members. This core group was allegedly complemented by dozens of Kaibiles, elite Guatemalan special forces soldiers “who, like the original Zetas, deserted the army in search of higher pay,” as well as by “a variety of middle-men, petty criminals, and other individuals who [assisted] the organization in various ways”
Other people who ended up collaborating with La Compañía were Humberto García, then director of the Tamaulipas Ministry of Public Security; Juan Carlos González Sánchez, commissioner of the Matamoros Ministerial Police; Juan César Casillas Escobar, the Federal Highway Police commissioner; and many other government authorities at different levels.
A key aspect of the violent conflict between the two major blocs of Mexican criminal syndicates was the use of mass media, social media, and other publicity devices to send messages to or threaten their respective rivals.
CHAPTER 2 - The Zetas’ War
At one point even the US State Department described the Zetas as “the most technologically advanced, sophisticated, and dangerous cartel operating in Mexico”
The Zetas’ tactics involved spectacular and sophisticated ways of killing, such as dismemberment, decapitation, and the dissolution of human remains in acid baths.
In the United States this TCO allegedly has operated in Texas, Oklahoma, New Mexico, New Jersey, Michigan, Colorado, Illinois, Tennessee, Georgia, and California
According to some accounts, the organization’s international expansion allowed it to establish close links with the Italian criminal group known as the ’Ndrangheta.
In the municipality of San Fernando, 72 migrants were massacred in August 2010, and approximately 200 corpses buried in mass graves (so-called narco-graves or narcofosas) were discovered in the same area in April 2011.
Political assassinations also took place during this time; the mayor of the municipality of Hidalgo was killed in August 2010, and the mayoral candidate for the city of Valle Hermoso was murdered in May 2010.
Michoacán became a very valuable plaza in terms of drug production and smuggling due to its strategic location and the state’s important port of Lázaro Cárdenas, which connects Asia to Mexico’s markets, both legal and illegal. It is worth noting that Michoacán has been a very contested state. It is considered the gateway to the Pacific Route (“puerta de entrada de la llamada ‘ruta del Pacífico’”)
The Zetas’ expansion and the control that they exercised in large parts of Mexico were acknowledged by Strategic Forecasting Inc. (Strat for), a Texas consulting firm specializing in security
According to the testimony of El Mamito (a historic leader of the Zetas) at a federal trial in Austin, Texas, the organization had an income of nearly $350 million a year from transporting 40 tons of cocaine to the United States.
The decline of the Zetas organization might have to do with a number of failures in its model of organized crime. According to Guerrero (2014a, par. 19), one of them was “the lack of family links that would add certainty and trust to the relationships between the top members of the organization.” Actually, this criminal organization resorted to violence as a way to spawn discipline and assure internal control. This generated tension among its members and instability in its leadership structures.
That was the great novelty of the Zetas. “This is not like a family or a group of families like the Sinaloa Cartel” (quoted in Pérez 2014, par. 34). Journalist Ricardo Ravelo concurs, noting that “this group is totally different compared to the [drug-trafficking organizations] that we traditionally know” (quoted in Pérez 2014, par. 34). In his view, “the Zetas operate like cells, similar to the Revolutionary Armed Forces of Colombia (FARC).” These cells have a specific leader ship, accounting bases, and a structure to kill and exercise violence. For Ravelo, these cells operate like “franchises”
According to Arron Daugherty and Steven Dudley (2015, pars. 9–10): The Zetas are not just violent because their leaders have a penchant for aggression—they follow an economic model that relies on controlling territory in a violent way. Within that territory, they extract rents from other criminal actors and move only a limited number of illegal goods via some of their own networks... Without that territory, they have no rent (known in Mexico as “piso”). The Zetas are, in essence, parasites. Their model depends on their ability to be more powerful and violent than their counterparts, so they can extract this rent.
Guerrero (2014a, par. 18) agrees with this interpretation. In his view, Los Zetas “transformed the traditional way in which drug trafficking organizations had operated in Mexico.” The Zetas brought with them a new criminal model that transformed “hierarchical enterprises, predominantly familiar, guarded by amateur killers, that restricted their moves to specific territorial spaces and activities” into “more horizontal organizations with a professional armed wing, aggressive expansionist aspirations,” and an interest in a variety of criminal activities that go beyond drug smuggling. For Guerrero (2014a, par. 18), one of the main reasons for this transformation is that the Zetas incorporated “a strong territorial feature into the drug-trafficking business, and thus it was not enough to control only strategic points along the route utilized to transport drugs; it was necessary to control it all to minimize risks.”
CHAPTER 3 - A Transnational Criminal Corporation
The Zetas, according to this information, organize into cells or formations called estacas (stakes) that operate like military squadrons. The estacas perpetrate kidnappings and executions of enemies to assure the control of the different trafficking plazas
Most of the Old Zetas were once part of the GAFE (founded in the 1990s) or members of the Mexican army’s Special Forces. According to a number of sources, this group had thirty to forty members. Today they are dead or have been arrested.
On the surface, it seems to make no sense for criminal groups to attract attention from the law enforcement community (national and international) by utilizing such practices. However, the Zetas appeared to have different objectives than most criminal organizations. To members of the Zetas, generating fear in this way would benefit them in other endeavors, such as when they asked for ransom after a kidnapping or when attempting extortion. In these situations, fear would be on the Zetas’ side.
Some onlookers have started to analyze organizations like the Zetas by scrutinizing their business model (for example, Wainwright 2016). [NOTE: This is a reference to the far-superior Narconomics]
To utilize a business administration model with the aim of analyzing criminal organizations like the Zetas is reasonable, but the franchise model proposed by Bailey and Ravelo does not seem to be the most appropriate one. Hence, to compare the Zetas with companies like McDonald’s, Subway, 7-Eleven, or Pizza Hut does not seem to be very useful. A better comparison seems to be likening the Zetas to transnational corporations like Wal-Mart, Coca-Cola, HP, Nike, Berkshire Hathaway, ExxonMobil, and Royal Dutch Shell (see Wainwright 2016).
The Zetas monitored Twitter feeds, blogs, and Facebook accounts. They reportedly employed a team of computer hackers to track authorities with mapping software, and, according to one paper, 20 communications specialists to intercept phone calls.
Organizations of this type launder money by acquiring properties, making bank deposits, and investing in a number of financial instruments within the “legal” financial system.
One interesting way in which the Zetas laundered money was by buying and training racehorses in the United States. These operations were highlighted in a case heard by a Texas federal court in Austin in 2013. The trial has been touted as one of the biggest and most complex money-laundering cases ever prosecuted in central Texas.
The organization allegedly utilized some of the largest US banks, including Bank of America and JPMorgan Chase and Co., to move the money.
The Sinaloa Cartel, for example, had used HSBC Bank to launder its illicit earnings. British journalist and writer Ed Vulliamy (2014) reports how HSBC acted as the organization’s financial services wing and how the bank permitted TCOs and other criminal groups (even terrorist organizations) to launder hundreds of millions of dollars through its subsidiaries and facilitated their illicit transactions in a number of countries.
In the 2013 Austin trial, a former accountant of La Compañía, José Carlos Hinojosa, testified that this organization (at that time including the Zetas and the Gulf Cartel) donated $12 million in 2004 to support the gubernatorial campaign of Fidel Herrera in Veracruz in exchange for political protection in the period 2004–2010.
According to Libera (2012), an organization formed by a number of human rights associations from Europe and the Americas, the Zetas drug-trafficking business had extended to forty-three European countries by the end of 2012. In a report published in December of that year the organizations described the links between the Zetas and “the most powerful Italian mafia: the so-called ’Ndrangheta” (Proceso 2013c, par. 2). The report, entitled Messico, la guerra invisibile (Mexico, the Invisible War), identified the existence of a drug supply network operating from Central America to Mexico’s northern border that expanded to Europe and was able to send to Italy approximately 40 percent of the cocaine production generated in Colombia, Bolivia, and Peru. This study was elaborated with information collected by the Italian police (Proceso 2013c, par. 3).
Apparently drug markets in Europe and Africa have become more significant for TCOs in the present era, particularly after the recent growing interdiction efforts along the US-Mexico border.
The Zetas actually started to compete directly with the municipal police for the provision of security services, which led to a large number of deaths among local police forces
The Zetas were able to proceed this way thanks to the creation of their brand, which was founded on the extreme violence that they were able to exercise. Once they had acquired their prestige as an extremely violent group, it was relatively easy to extort a number of different persons and businesses.
In order to diversify their revenue streams the Zetas also started to smuggle undocumented migrants, particularly along Mexico’s eastern migration routes, from Central America to Mexico’s northeastern border.
According to Juan González, police chief of San Juan, Texas, in 2015, “you can make more money in the human-smuggling business than in the drug business”
The Zetas actually have been infiltrating the state-run oil industry, Petróleos Mexicanos (Pemex), in order to diversify its sources of revenue. In fact the trafficking of large quantities of hydrocarbons has surged as one of the main sources of financing for Los Zetas.
The sale of stolen gasoline today represents important earnings for groups like the Zetas. They not only sell fuel on the streets or on the side of highways but now also control certain gas stations.
SECTION II - MEXICO’S DRUG WAR: A MODERN CIVIL WAR?
CHAPTER 4 - Paramilitarization of Organized Crime and a “War on Drugs”
The creation of the Zetas and the emergence of a new corporate-military criminal model coincided with a period of economic reform and political liberalization at the beginning of the twenty-first century. At this time the coherence of the old Mexican political regime was lost. Professor Fernando Escalante (2009) explains how executive power became weaker as well as more surveilled and rigid during this period; at the same time it started to coexist with the more autonomous and opaque power of state and local governments. In this new context, the federal government began to lose the ability to command patronage networks and manipulate the informal sector in a self-serving way (see also Astorga 2015 and Valdés 2013). Limited budgetary resources further restricted the federal government’s ability to act.
Professor Hal Brands (2009a, par. 5) explains: For much of the twentieth century, Mexico’s ruling... PRI, oversaw a system of “narcocorruption” that brought a measure of stability to the drug trade. The cartels provided bribes and kept violence to a minimum. In return, the PRI protected the kingpins and resolved conflicts between them, most notably by allocating access to the plazas, or drug corridors to the United States. The Mexican state... served as a “referee of disputes and an apparatus that had the capacity to control, contain and simultaneously protect these groups.” As the PRI gradually lost power during the 1980s and 1990s, this system collapsed. The decline of one-party rule left the Mexican drug trade without a central, governing authority, and comparative stability soon gave way to a Hobbesian struggle for control of the plazas.
Exploiting the inexperience of newly elected officials, this criminal group modified its relationship with the state.
As Brands (2009a, par. 23) explains, the organization thrives “on the lack of professionalism among Mexico’s local and state police agencies, offering sizable payouts to officers who [could] provide inside information or help the Zetas eliminate their enemies.”
For example, in Nuevo Laredo, nearly 90 percent of the municipal police were allegedly on the Zetas’ payroll at one point (Padgett 2013b).
The expansion of the Zetas coincided with Vicente Fox’s rise to power as Mexico’s president and titular leader of the National Action Party (PAN) at the beginning of the twenty-first century.
Security in Mexico changed substantially after Calderón took office on December 1, 2006, and declared his “war on drugs.” Organized crime–related violence visibly intensified. This period, marked by the ongoing conflict between Mexican transnational criminal organizations and governmental forces, saw a momentous increase in violent crimes and assassinations as well as the widespread use of barbaric, terror-inflicting methods, such as dismemberment, decapitation, and even chemical dissolving of human remains.
Calderón’s plans were welcomed by the United States, which complemented it by adopting the so-called Mérida Initiative (Iniciativa Mérida), a bilateral antinarcotics program designed to combat organized crime and violence.
Calderón’s initial efforts focused primarily on targeting the leaders of the transnational criminal organizations to weaken them. The capture of kingpins led to the fragmentation of key criminal organizations into smaller groups that later began fighting with each other for the control of the plazas (Machuca 2014, 11). From 2008 to 2011 violence stemming from this visible fragmentation grew.
According to security analyst Nydia Egremy (2007), Mexico’s involvement in the USNORTHCOM suggests the country’s submission to US national security goals and principles through a renewed border security policy and the involvement of its police and armed forces in regional security efforts.
The government “obstructs routes, pressures criminal groups, and captures the leaders. The beheading of these organizations causes internal wars for power, fragments the groups, and spreads out the violence.” Violence in Mexico is thus worsened by the direct involvement of the federal forces.
CHAPTER 5 - The New Paramilitarism in Mexico
The so-called paramilitarization of drug-trafficking organizations inspired by the Zeta model and the resulting massive use of violence led to the implementation of an unconventional security policy by the Mexican government, in which the military and federal police were sent to perform the duties of state and local police.
The presence of paramilitary groups (linked to, created by, or allowed to operate by the legitimate government) in Mexico is not a new occurrence; nor has their existence ever been acknowledged.
In the case of Colombia, as researchers Oeindrila Dube and Suresh Naidu recognize, military and counter-narcotics aid, “rather than enhancing the state’s monopoly on the legitimate use of violence, [was] diverted to empower non-state armed actors, increasing extra-legal violence with no apparent effect on its stated goal of curbing drug production”
Colombia, for example, reported over 57,000 politically motivated assassinations (23.4 per day) between 1988 and 1994.
Overall, new paramilitary groups in Mexico operate with two main aims: (1) to combat criminal organizations by working hand in hand with the government or elite/business groups and (2) to eradicate rival criminal groups in order to maintain the control of a certain portion of territory for criminal activity—also in conjunction with the government or elite groups.
In contemporary Mexico there are some signs of the existence of criminal, elite-financed, and self-defense paramilitary groups
Wilkinson (2011, par. 4), for example, asked: “Just who is behind the killings of Zetas—another drug gang? Agents acting on behalf of the government or military? An ad hoc group whose presence is being tolerated by authorities as well as the public?” In her view, [The Mata-Zetas’] sudden rise and the surgical precision with which the killers systematically picked off nearly 100 people in 17 days has led to conjecture among some people that they may be operating with implicit or direct support of the government or military. Some suggest that the June kidnapping, torture and killing of three marine cadets in Veracruz might have propelled the marine corps to begin acting outside the law. Officials dismiss such speculation, and others wonder why a group aspiring to be a clandestine death squad would post videos on YouTube
In the end, as a retired army officer said, “There were attempts to institutionalize these alleged paramilitaries by turning them into a rural police.” It is then plausible to claim “the use of paramilitary groups as part of a non-institutional security policy once the initial militarization strategy had failed”
Vigilantes can participate more directly without paying the enormous cost in terms of image and legitimacy that the government would have to pay in case of a failed operation or a mistake.
As public policy analyst María Machuca (2014, 16) recognizes, “it may be hard to quit the power that paramilitary groups accrue over time.” A refusal to disarm, and the negative consequences, have been experienced in Michoacán, as they have been felt in Colombia for decades.
CHAPTER 6 - Mexico’s Modern Civil War
The present analysis concludes that Mexico’s armed conflict has the characteristics of a civil war, more specifically a “new” or “modern” civil war: “characteristically criminal, depoliticized, private, and predatory” (Kalyvas 2001, 100). It seems that economic agendas — and not ideologies — are driving the conflict in Mexico’s new civil war.
According to this view, the key and main motivations of TCOs are “greed and illicit enrichment.” Therefore Mexico would just be facing what scholars like Paul Collier, David Keen, and others define as “wars based on economic agendas, in which criminal groups have no intention of changing the law, but making sure that the law does not work”
Kalyvas (2007, 430), for example, identifies three key causal factors that have a measure of empirical backing. In his view, “ethnic antagonism, the presence of natural resources, and weak states may all increase the risk of a civil war, especially in poor states.”
For Collier (1999, 1), conflicts, including civil wars, “are far more likely to be caused by economic opportunities than by grievance.”
For example, expert in armed forces and Universidad Nacional Autónoma de México (UNAM) Professor Raúl Benítez categorically rejects the usage of the term “civil war” when referring to Mexico. In his view, “Mexico has experienced a security crisis, but not a war of any kind.” What is more, “if one understands the classics — for example, the work of Carl von Clausewitz — and the nonpolitical nature of Mexico’s conflict, one would never use the word civil war.” However, more recent literature on wars would not necessarily agree with this view
It is worth noting that a large segment of the Mexican armed forces was made up of individuals born in southern states (which have comparatively higher levels of poverty), while the base of key drug-trafficking organizations and other TCOs was in the northern part of the country — mainly in the border region, near the main clientele.
For example, grenades used by the Zetas in attacks in Mexico have been traced back to the 1980s, when they were sold by the US to the military of El Salvador.
Mexico’s drug war has resulted in more than 150,000 deaths. “To put these numbers in perspective, this is eight times larger than the number of casualties in the Iraq and Afghanistan wars combined”
The silencing of the media in particular zones of the country during Mexico’s civil war was achieved through practices known as plata o plomo (silver or lead): intimidating journalists and communicators or bribing journalists and media entrepreneurs with the intention of limiting the coverage on events related to organized crime, thus making criminal actions practically invisible to public scrutiny
Twitter became the preferred platform that citizens used to transmit alerts and warn other members of their communities about shootings, road blockades, grenade attacks, and other violent events.
Possibly the first experiment of cyberparamilitarism in Mexico was the campaign started by the group of hacktivists Anonymous on Twitter, known as “Operación Cartel” or “#OpCartel.” The members of Anonymous threatened the Zetas by saying that they would expose the identities of key actors associated with the criminal organization in retaliation for the alleged kidnapping of one of its members.
It is worth mentioning that the arrival of paramilitaries in Veracruz occurred in the real world and in cyberspace at almost the same time. At the end of September 2011 the Mata-Zetas appeared in a video after dumping dozens of bodies on the streets of Boca del Río, Veracruz (Animal Político 2011). Operación Cartel took place a few days later. The epicenter was also Veracruz, and the enemy was the Zetas group.
SECTION III - LOS ZETAS INCORPORATED
CHAPTER 7 - The Zetas’ War and Mexico’s Energy Sector
She points out that “the presence of oil, gemstones, illicit drugs, and other so-called war commodities fuels violence by eroding trust and discipline in armed groups, and prolongs conflict by giving weaker groups the means to keep fighting”
In order to infiltrate coal mines, the Zetas began to extort, kidnap, and even kill employees and owners of coal-mining companies
In the past thirteen years iron ore prices increased more than a thousand percent.
Corporate interests were apparently the biggest winners of the “war for Michoacán.” Transnational companies like Ternium and Arcelor-Mittal extended their areas of influence within the state during extremely violent times.
Criminal transnational businesses (like the Zetas, the Knights Templar, and the CJNG) arrived in these lands first. Legal transnational energy, steel and mining companies — like AHMSA, Ternium, ArcelorMittal, Shell, and Halliburton — subsequently arrive or extend the presence that they already have in certain zones.
CHAPTER 8 - Energy and Security in Tamaulipas, Ground Zero for the Zetas
Criminal groups have kidnapped dozens of oil and gas workers in the past few years (Pemex reported that sixteen of its employees were kidnapped in 2010 alone).
Energy potential in this region has spawned important infrastructure investments, such as the construction of the West Rail Bypass Bridge between Matamoros and Brownsville, Texas. This is the first new rail crossing built between the United States and Mexico in more than a century
According to press reports, some of the abandoned lands “were used for training camps” (Paley 2014, 215). However, the important question here is: Who would benefit in the long term from recent massive land displacements in Tamaulipas? Some of these lands have significant oil and gas reservoirs (see maps 8.3 and 8.4), and some of these territories will host key infrastructure projects to advance energy reform in Mexico (see map 8.4).
CHAPTER 9 - Who Benefits from the Zetas’ War?
The main winners (or potential winners) appear to be corporate actors in the energy sector, transnational financial companies, private security firms (including private prison companies), and the US border-security/military-industrial complex.
Essentially it has not reduced the drug trade or drug consumption, and this illegal business represents huge profits in the international drug market for exporting countries and their governments. Many of these profits are recycled in the international financial system and international arms markets, mainly benefiting banks and arms manufacturers
In the view of Dawn Paley (2013, par. 7), the so-called drug war in Mexico is a political phenomenon or “a counter-revolution, 100 years late,” which has decimated communities and destroyed “some of the few gains from the Mexican Revolution that remained after NAFTA was signed in 1994.”
Cockcroft (2010, 38) claims that Mexico’s drug war has been an excuse for militarizing the country. These events would prevent the rise of Mexican opposition, which at the same time would allow US companies “to gain greater control over Mexican oil, minerals, uranium, water, biodiversity, and immigrant labor” (40), which would “better U.S. chances of firming up energy security” and would represent “a new phase of contemporary imperialism”
Fazio uses the example of the US Chiquita Brands (the successor to United Fruit Company), “which used paramilitaries in Colombia to displace farmers” in order to use those farming areas for its own benefit
“Fazio also warns against the indiscriminate use of the term ‘failed state,’ a category that he claims comes from US think tanks and institutions like the CIA or the Pentagon and has often served as an excuse to destabilize countries”
However, certain lines of investigation and unequivocal relationships among actors and events (like the ones presented here) might lead some to believe in a conspiracy.
From 2000 to 2013 Pemex reported an increase of 1,548 percent in the number of illegal pipelines transporting oil. In 2014 it was calculated that nearly ten thousand barrels were stolen daily
Overall, the main losers from Mexico’s modern civil war seem to be the national oil industry and the country’s most vulnerable people — those who did not have the resources to flee or defend themselves against extortion, kidnappings, and other forms of brutality by criminal groups, paramilitaries, and government forces. Their spaces are being occupied by private companies — mostly transnational and very powerful.
Nonetheless, “the [government] does not necessarily need to be an accomplice of these groups” (par. 18). Simply by not acting, Mexico’s government would collaborate indirectly in this new scheme of capital concentration through the anticipated generation of terror, which would be the true value of “omission.” The government, organized crime, and transnational economic interests need not be direct allies but can reinforce each other’s objectives.
Hence Mexico’s northern neighbor has profited from the so-called drug war through its border-security/military-industrial complex.
Among the major winners of Mexico’s armed conflict are US arms-producing companies. In fact the United States sells more weapons to Mexico than any other country in the world.
The war in Mexico coincides with the process of achieving US/North American energy independence and with the so-called shale gas revolution.
This shale gas boom greatly altered the forecasts regarding the future of the US energy sector and the global energy landscape. Less than a decade ago the consensus was that the United States was beginning to run out of economically recoverable natural gas and that the country would have to import large quantities of this resource from abroad. This has not yet happened, and now it seems that Mexico’s northern neighbor is flooded with natural gas.
In this new context, large energy corporations like Schlumberger, Halliburton, and Baker Hughes have thrived as they have acquired “the skills and technology needed for shale oil and gas production
In fact, US president Barack Obama, through the Department of State led by Hillary Clinton from 2009 to 2013, promoted the use of fracking worldwide under the argument that the development of the shale gas industry could help rewrite global energy politics
CONCLUSION - Four Successful Business Models in an Era of Modern Civil Wars
2). A direct descendant of Standard Oil Company (founded in 1870 by John D. Rockefeller), ExxonMobil is the largest refiner in the world. This multi national oil and gas corporation is headquartered in Irving, Texas, and was formed on November 30, 1999, by the merger of Exxon and Mobil (once Standard Oil of New Jersey and Standard Oil of New York).
Halliburton, founded in 1919, is the world’s second-largest oilfield services company and the largest provider of hydraulic fracturing services in the United States
Between 2008 and 2009 an investigation by the US Department of Justice, the DEA, the FBI, and Immigration and Customs Enforcement (ICE) named Project Reckoning revealed the involvement of important US-based transnational energy corporations in the acquisition of hydro carbons—particularly natural gas condensate from the Burgos Basin — sold by organized crime groups. By that time the main provider was “the Company,” at the time made up of the Gulf Cartel and the Zetas (Pérez 2012, par. 15). This investigation also discovered the involvement of senior business executives and company representatives, who admitted these illegal purchases. For example, one key person in this illegal network of operators and buyers was Joshua Crescenzi — once a news liaison for former president George W. Bush and former vice president Dick Cheney, who was at one point Halliburton’s largest individual shareholder
According to these court cases, more than $300 million in stolen natural gas condensate from the Burgos Basin was smuggled across the US border by Mexican TCOs from 2006 to 2010.
Due to the nature of its activities, one transnational corporation that might serve as a model to understand the business structure and some forms of Los Zetas operation is Constellis. This group of companies includes a company once named Blackwater, which has been one of the US government’s biggest providers of training and security services. Blackwater was founded in 1997 by Al Clark and former navy SEAL (Sea, Air, Land) Erik Prince to provide training support to the military and law enforcement agencies.
In 2009 Blackwater changed its name to Xe Services LLC as part of a company-wide restructuring plan. In 2010 a group of private investors purchased Xe’s main assets and built a new company around what was once Blackwater, named Academi.
Finally, Academi stopped working independently and started to form part of a larger group named Constellis Holdings, LLC (Constellis) that includes several companies providing “services within the global security market”
This book is dedicated to my father, my brother, and the untold numbers of victims of the Zetas’ war, a war that I later learned was not about drugs. It was about the land and what is above and below it. This war, as I understood later, was really an economic or “modern civil war.” In the first part of the twenty-first century, Mexico endured a hyperviolent armed conflict that ultimately benefited corporate capital and exacerbated inequalities in an already unequal society.
The open warfare between the Zetas and the Gulf Cartel, the former partnership known as La Compañía (the Company), transformed Mexico’s northeast region, including Matamoros, into one of the most violent zones in the Western Hemisphere.
I have conducted more than one hundred interviews with individuals on both sides of the US-Mexico border.
My research along the Tamaulipas border was supported by a 2011 Drugs, Security and Democracy (DSD) Postdoctoral Fellowship funded by the Open Society Foundations (OSF) in partnership with the Social Science Research Council (SSRC), International Development Research Centre (IDRC), and Universidad de los Andes in Bogotá, Colombia.