Mexico: Corrupting Influences


May 30, 2013: Though the military continues to do the heavy lifting in the Cartel War, the newly elected president believes that a proposed national gendarmerie will do ultimately a better job of combating the cartels than the military. The president also claims that creating the gendarmerie demonstrates a commitment to fight the drug cartels and other organized criminal gangs. The new president Pena is a member of the Institutional Revolutionary Party (PRI). The PRI ran Mexico for over seven decades and its corrupt activities are legendary. Many Mexican citizens worry that the PRI will secretly reach an accommodation with the criminal organizations rather than combat them. Media reports that the new administration has made a deal with the Sinaloa cartel. The government says the rumors are malicious and false. The old PRI accommodated organized crime by taking bribes from the gangsters. Police corruption was not a PRI political concern and in fact corrupt cops were often useful to PRI politicians. A corrupt judiciary served PRI political interests. The new government says that has changed and the national gendarmerie is emblematic of the change. The national gendarmerie will be staffed by professional paramilitary policemen. The gendarmes will be specifically trained to conduct complex police operations in urban areas, to include combating well-armed organized criminal gangs. The army’s current strength is 211,000 soldiers. The navy has 50,000, which includes 18,000 marines.

May 27, 2013: The government has established a new security investigation agency, with the primary mission of finding people who have gone missing in the Cartel War. According to official figures, 26,121 people are unaccounted for since the Cartel War began in December 2006.

May 25, 2013: Several recent economic reports suggest Mexico is on the verge of an economic recession. The government disputes the analyses. However, the country’s 2013 economic performance has been sluggish and the government recently lowered its own annual economic growth estimate from a 3.5 percent growth in GDP to 3.1 percent. No one, however, denies that the tourist industry continues to suffer and everyone knows why. International tourists are worried about drug cartel violence. On May 20th, the government released what it calls a national economic development plan. The plan sets goals for the next six years (basically the new president’s term in office). One goal is expanding and liberalizing Mexico’s domestic market. The code word here is structural economic reforms. The government intends to modernize the energy, banking, media, and telecommunications industries by permitting increased competition.  Another goal is increasing overall productivity by spurring worker productivity. The government knows that political corruption and distrust of the legal system exacts an economic toll. An international economic organization estimated that around 14 million working Mexicans are employed in the shadow or informal economy – informal in this case meaning economic activities that do not fully comply with Mexico’s complex business legal requirements and business regulations. This is around 35 percent of the total work force. This represents an increase from 2006, when an estimated 30 percent of the work force worked in the informal economy. According to one estimate, the informal economy also accounts for about 35 percent of Mexico’s GDP. Starting a legal, formal business is extremely difficult and expensive, so entrepreneurs facing these conditions just start operations. Their new businesses may or may not pay taxes. The employees may or may not pay taxes. Economic reformers want to bring these workers into the formal economy. (Austin Bay)

May 24, 2013: The chairman of the Britain-based HSBC bank group apologized to shareholders for the bank’s involvement in illegal money-laundering in the U.S. and Mexico. Two drug cartels moved over $880 million through the bank, which was fined $1.9 billion in December 2012. The bank could still face criminal charges. HSBC traces its roots to the Hong Kong-Shanghai Banking Corporation.

May 23, 2013: A Los Zetas cartel field commander, Julian Zapata Espinoza, pled guilty in a U.S. federal court to ordering the murder of a U.S. Immigration and Customs Enforcement special agent in February 2011. The murder occurred along a highway outside Mexico City. The Zetas gunmen stopped a U.S. embassy vehicle and murdered the immigration officer. The gunmen tried to kill another U.S. agent who was in the vehicle. The second agent was wounded but survived the attempt on his life.

May 22, 2013: The government announced that the military will keep 4,000 soldiers and marines in Michoacan state until peace is restored in the region. Michoacan has experienced a surge in gang warfare. The government acknowledged that many communities are frightened, which is why there has been an increase in the number of community police units (local militias) in the state’s rural areas. A thousand federal police officers are also in the state.

May 21, 2013: A major dispute between two strong party factions is roiling the National Action Party (PAN). One PAN group favors working with the new administration and supports president Pena’s Pact for Mexico. The other PAN group suspects that the new PRI government is not committed to reforms and says it was a mistake to agree to support Pena’s program.

May 20, 2013: The government has sent 2,000 soldiers and 2,000 marines to Michoacan state. The military contingent will support the 1,000 federal police deployed in Michaocan earlier this month. Since mid-April, the Michoacan turf war pitting the Knights Templar cartel against the Jalisco New Generation cartel has become increasingly violent. The Sinloa cartel is allied with the Jalisco New Generation.

May 16, 2013: President Pena has given an army general command of all military and police forces in Michoacan state. The command includes state and municipal police forces as well as federal police units. The idea is to give the senior security officer (in this case) the authority to use the security force best suited for a particular mission.

May 13, 2013: Police arrested two men suspected of murdering the grandson of U.S. civil rights leader Malcolm X on May 9th in a Mexico City night club. The recent murder has already brought new attention to the number of U.S. citizens who have been murdered in Mexico. According to official figures, 648 U.S. citizens were murdered in Mexico between October 2002 and December 2012 (roughly a decade). 511 of those murders occurred in the 2006-2012 time frame (Cartel War era) and 113 U.S. citizens were murdered in 2011 (peak year), while 71 were murdered in 2012. The murder toll, however, needs some context. Around one million U.S. citizens live in Mexico. Over 20 million U.S. citizens visited Mexico in 2012.





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