Mexico's July 4 Election - Has the Narco State Arrived?


Michael Collins

Nearly 50 candidates and public figures have been assassinated in the run up to Mexico's 2010 state elections. Former presidential candidate Diego Fernández de Cevallos, major leader of the ruling PAN party, was kidnapped on May 16 and has not been heard from since. Three days ago, Rodolfo Torre, the odds on winner for governor in the state of Tamaulipas, was murdered in a highway ambush. Torre's murder represents the highest ranking politician of the 50 assassinations this election cycle.

The political murders by the drug cartels are not focused on one party. The Los Angeles Times suggested that the goal may be to create chaos and elevate the drug cartel control over the entire Mexican political system.

The Mexican drug cartels also sent a message to the United States in March when a U.S. Consulate worker in Ciudad Jaurez (across from El Paso, Texas) was gunned down. The leader of a cross border gang was just arrested. Authorities suspect the hit was motivated by unequal distribution of U.S. visas to a rival gang.

The bottom line nature of the assault by drug lords may quickly create an environment where investment in Mexico drops quickly and significantly. In a bulletin from a leading investment firm to clients, a consultant said:

"Continued assassinations of members and associates of the federal government threaten the rulabilily of Mexico, as the continued casualties of a partisan dirty war weaken the remaining institutions of civil society in many areas."

When rulabilily is questioned, businesses lose investors and citizens lose their jobs. This would only worsen an already deteriorating economy and further diminish the average citizen's standard of living. Half of Mexico's 100 million people live in poverty.

The Ruling Party's War on Drugs

Mexican President Felipe Calderón of the conservative PAN Party was elected amidst a controversy in 2006 election. Rival Andrés Manuel López Obrador seemed headed for victory until last minute changes in election results gave the nod to Calderón. There were charges of election fraud and three million-person-plus demonstrations in Mexico City demanding a thorough recount. European Union and U.S. authorities endorsed the election and that was that.

Calderón was soon faced with the power of Mexican drug cartels, which began growing exponentially. Total revenue for the nine leading cartels was estimated at grater than $30 billion for 2007. Today it may be at three times that figure.

As income grew, the stakes of political power also expanded. The cartels used kidnapping and murder against public officials to gain more favorable terms for their operations. Then the cartels began killing each other and politicians bought by opposing groups. Mexican citizens were often caught in the cross fire.

Calderón's response was to dispatch troops to fight cartel gunmen in the streets of Mexican cities throughout the nation. Major shoot outs became common place and accounted for a share of the estimated 22,000 deaths in Mexico's drug war. In the mean time, well known drug lords were treated like celebrities.

Speaking anonymously, one Mexican observer suggested the following. If President Calderón really wanted to get at the heart of the drug problem, he could just follow Mexican television the next time they cover a drug lord wedding by helicopter.

Mexico's army has a big lead in body count for the street confrontations over the past two years but the nation's political system is now under unrestrained assault by the cartels.

U.S. Involvement and Stakes

As power shifts in Mexico from the ruling elite to the nouveau riche narco cartels, the implications for the U.S. are significant. The reasons are obvious. The shared border, the heavy trade between the nations and immigration speak to Mexico's importance. Previously, Mexican citizens leaving their home for the U.S. were motivated by a collapsing economy and job opportunities in the U.S. More and more, immigrants seek escape from intimidation, injury and death at the hands of the drug lords.

The United States is faced with refugees and, at the same time, a numerically small but highly potent cross border gangs of unstrained thugs who use bribery, intimidation, and violence to work their will.

Should Mexico see a de facto takeover by the drug lords, two outcomes will be immediate. Mexico's economy will collapse as investors flee. In addition, the wave of border crossings will increase out of fear and economic necessity.

The Bush and Obama administrations have stressed the importance of the U.S.-Mexico relationship but Mexico's decline due to the disorder caused by drug cartels is largely an internal matter to correct. The only assured outside intervention would be a precipitous drop in U.S. cannabis, heroin, and meth consumption. That would cripple the cartels but it's simply not going to happen.

What to Watch in the Mexican Elections of July 4

Will there be violence at Mexican polling places? Will turnout go down significantly? How many elections will be challenged? How many will show obvious signs of election fraud. If Election Day in Mexico is marred with controversy or produces a major drop in turnout, the cartels will have created a political vacuum that they will hasten to fill. Image

The specific race to watch is the contest for Governor of Oaxaca. That state has a strong people's movement that occupied the state capitol in June 2006. They defeated police seeking to end their demonstrations and set up their own governing organization. In November, 2006, harsh measures were used by the central government to end the demonstration.

The protests were sparked by decades of misrule and corruption by Mexico's PRI Party and then governor, Ulises Ruiz Ortiz. Corruption was rampant as was oppression. The PRI's campaign to carry on their decades of rule forced a coalition of parties to oppose the PRI candidate. The left leaning PRD, the conservative PAN party, and the minor parties unified behind Gabino Cué as their candidate.

If Cué is defeated, the belief in change by those throughout Mexico will be severely challenged. Even if he wins, the nation will face the aftermath of President Calderón's ruinous war on drugs and the infusion of narco influence and outright control in our most populous and important neighbor.

END

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Michael Collins July 3, 2010 - 5:21pm
( categories: Mexico )

haven't had time to contribute lately, but the situation in Mexico has continued to deteriorate.
One thing you didn't mention is the government and federal army's de facto alliance with the sinaloa and gulf cartels against the juarez cartel and the zetas.

Nat Wilson Turner July 3, 2010 - 7:07pm

Come on back! I miss your thorough and thoughtful comments on Mexico. When the 'fake recovery' is over, we may be headed that way, I'm afraid.

Michael Collins July 3, 2010 - 11:41pm

Antifa and others made a point about big banks assisting in legitimizing drug lord income. Here's a story from Bloomberg on just that.

Michael Collins July 5, 2010 - 7:43pm

It's heart breaking to see Mexico spinning out of control like this.

There's some steps the US could take to help, but the mindset in this country won't allow them, unfortunately.

The US could legalize marijuana and ban all imported cannabis, thus forcing America to grow and legally market all of its own marijuana. This would take a big chunk out of the cartels' business, not to mention foster a new legal industry in the US at a time when the economy needs new industries. It would also take marijuana out of the War on Drugs at tremendous savings to the US.

But Americans can't accept that way of thinking. They want to demonize pot users and finance a huge cop war and prison industry instead. American stupidity rules again.

We could set up an effective system to monitor the border, and create a legal way for refugees to enter the US. Immigration reform could be a great tool to help the civilian victims of the drug war, as well as entice young Mexican men away from the drug cartel life and into honest working for a living here in the US.

But American xenophobia rules the roost in the immigration debate. Another foot shot off for the Americans.

As for the meth and cocaine problem, that is a nastier animal. I don't think the US will benefit in any way from legalizing those substances, and our only real tool against them is citizen education and awareness. American's desire for cocaine, in particular, seems endless. People still glorify it as a rich-person's recreational drug instead of the nerve degeneration agent it actually is. Americans want to be like their celebrities, and they can't be billionaire movie stars, but they can do coke and feel like one for 10 minutes. Another one for American shortsightedness.

In summary, I don't see America as being able to help. We can't bring the innovative solutions necessary to help in the current political climate.

America has only one (1) solution for problems in third world nations like Mexico. That solution is on brilliant display in Afghanistan.

We can invade with our military, fight a COIN war, and get bogged down in a quagmire.

Since I'm quite sure the Americans haven't the stomach to start up a new Afghanistan in their own backyard, we will thankfully be saved from that disaster.

So, I think we just have to wait and watch, and see if the Mexicans can regain control of their country. If they cannot, we will have a tremendous immigrant/refugee and border control issue on our hands. Not to mention an even bigger illegal drug problem.

That may well become yet another defining issue for President Obama as the 2012 elections approach. The simple fact is that whoever wins the US election in 2012 is going to inherit a boatload of big problems that haven't improved much since the 2008 election.

If Americans respond by defensively swinging back harder to the right, the Mexican problem is going to be severely exacerbated, and possibly become a contributing factor to a new round of economic hardships here in the US.

yogi-one July 4, 2010 - 1:49pm

Excellent summary. Legalizing marijuana would take a huge chunk out of the cartels revenue stream. But, as for the rest of the problem, we're pretty helpless other than behaving like a good neighbor and avoiding helping anyone down there fix elections. That's a tall order too.

This will be an issue in 2012 because it ties into the xenophobia, as you correctly pointed out. It will be interesting to see how the Democrats handle this. Latino citizens here are focused on their lives just like any other citizens. But they are attuned to the overt and covert prejudice. I truly hope the Mexican people come up with their own solution before the COIN drops.

Michael Collins July 5, 2010 - 3:05am

o

Peter C July 4, 2010 - 2:00pm

Good points all around. It’s a known fact that lots of Mexican cannabis, both produced in Mexico and grown by Mexican cartels on public lands in the U.S., ends up in Medical Marijuana clinics. Recently while in Los Angles, there were a group of people holding up sign boards on a street corner advertising their Medical Marijuana dispensary. The signs advertised that all of the Marijuana in their dispensary was U.S. grown and Organic, and to be aware that lots of Medical Marijuana dispensaries were carrying pesticide laden Mexican produce Marijauana.

$45 million drug cache found in big rig trailer on I-10
This was a very short article buried in a local paper in Riverside County. Huge amount of Mexican dope being moved as effortlessly as a load of Mexican grown mixed produce.

"There are two types of folk music:
quiet folk music and loud folk music.
I play both."

Dave Alvin

Peter C July 4, 2010 - 2:20pm

California holds the key to a portion of Mexico's problems. If legalization passes and jumps the hurdle of federal interference, that will kill off a big chunk of the illegal market. I wasn't aware that Mexican marijuana ended up in dispensaries. In that case, the solution is part of the problem, on multiple levels.

Michael Collins July 5, 2010 - 3:08am

ban the precursor

To produce Meth requires a large quantity of over-the counter cough, cold or allergy medications that contain pseudoephedrine or ephedrine

Cocaine? Give it to the banksters for free. The sooner we are rid of them the better.

Synoia July 4, 2010 - 3:59pm

Drugs is really big money. Witness how Wells Fargo/Wachovia just got their wrist slapped for laundering $375 billion in drug funds over the past few years. They were so exceedingly stupid and sloppy about their methods that the Feds were forced to give them a 1% fine and make them vow to be better people in future. Woop de doo. Their offices were all open the next morning at 9 AM as usual.

Every bank, hedge fund, pension fund -- Wall Street itself is full of drug money. It cannot go anywhere else than into and through the banks or it can't move. It has to be "deemed" honest cash in order to be turned into electronic digits that can be wired around the world.

The banks do this "deeming" (laundering) under rules they wrote for themselves and had Congress okay late at night. These rules are in fact the most efficient way they could devise to move huge amounts of cash into the system with a fig leaf of plausible deniability. This fig leaf is what you are witnessing when you see a couple million dollars an hour being submitted by long lines of anonymous Mexican peasants at any one the many hundreds of little corner 'cash transfer' shops in little towns and villages in Mexico. Each peasant keeps their deposit under $10K so it is not reported.

The government and banks and Treasury are well aware of how much money Mexican "citizens" send to their "relatives" in America every day. But they choose to not follow the money. They do not look into how a Mexican citizen whose entire net worth is maybe $35 sends $9,999 to "relatives" in the USA over and over and over again.

It is "deemed" legal.

By the laws passed in America, there is no need for reporting or investigating the $9,999. It is deemed too small an amount to possibly be drug money, so it is clean on arrival. By the rules the banks wrote for themselves.

Drug monies helped stabilize Wall Street through this recent bubble collapse, as did our other national business -- war.

The larger problem is that what is happening in Mexico is inevitably going to happen here in America in due course, since there is nothing to keep the actual drug business from expanding into our own streets.

The governments of both countries want the money more than they want to follow the money. Therefore they will get the whole shit sandwich.

"Any manifest error on the part of an enemy should make us suspect some stratagem."
~ Niccoló Machiavelli

Antifa July 4, 2010 - 10:29pm

I should have mentioned stopping money laundering as one of the U.S. contributions. Where does the money go? Here, there and anywhere there's a willing bank. In the era of deregulation, as you so well pointed out, the big banks see new opportunities everywhere. Heaven forbid we actually do something about this to help Mexico.

Michael Collins July 5, 2010 - 3:19am

Some over the counter medications are a true menace, as you point out. Coricidin contains a dissociative DMX, a true party drug. It's well known as an easy-to-get item for drug abuse, yet it's out there. Restricting meth precursors is logical but not done. Why?

Michael Collins July 5, 2010 - 3:14am

Actually, this is being done. In OR, pseudophed is only available by prescription. In CA, you can only buy one small box at a time. Reportedly, this has reduced meth crime, at least in OR.

marku52 July 5, 2010 - 3:11pm

War is like a wildfire; above all else and until it is extinguished, it always seeks to perpetuate itself. I wonder if the disorder in Mexico will get to a point that the United States of GE and General Dynamics and UTI will have to declare victory in Afghanistan and Iraq, then declare a war against narcoterrorism in Mexico. The Duke of Oil would lick his chops while devising ways to divvy up PeMex, and ConAgraDanielsMidland would get their freak on for recon and send surveyors to figure out how to get the most corn out of some of the best farm land in the world. After getting rid of the feckless Obama (that is, if he doesn't get on board the gravy train), the President will have "no choice" but to take action. Thugs in DOD would hire XE and Army reprobates to gun up some sweet death squad action they've been jonesing for since the "good days" in Nicaragua, and 98% of Americans will poll against war in Mexico as the Senate declares a state of war against . . . Mexico.

Jonathryn July 4, 2010 - 4:31pm

They don't care what we want, they care about what they need and war is a very good business. The lines of supply might be more manageable. Obama is at 49% negatives. That means he'd have to do something major for the people to turn things around. Is that possible?

Michael Collins July 5, 2010 - 3:17am

and as for the flood of people waiting to get in...

The flood already happened. They're here now, just about everyone that wants to be. I'd guess at least 3/4s of the small town I lived in, either the people I knew or their subsequent offspring live in the United States. The new people crossing borders are primarily youngsters, born in recent years.

On the other hand, Mexico is ripe for a civil war. Allow someone like Venezuela's Chavez to assume power and watch Mexicans from Northern States, backed by their offspring here in the US, rise up in arms.

I don't think such a war happens immediately, but after a few years of heavy handed state control in a time of dwindling resources that don't get fairly allocated to Northern regions, it could happen.

Mexico's North is not unlike the red states of our own country. They produce the food and integral goods and don't share in the wealth or political power.

We too are ripe for an outbreak of civil unrest, but that seed is just beginning to germinate. It's quite a bit farther along in Mexico.

I did inhale.

Don July 5, 2010 - 8:41am

One item on which all Mexicans can agree is that they have a poor opinion of Gringos.

Invading Mexico would invite 110 Million people, all along the Southern US border, to unite against the invader.

And maybe sent some real terrorists north.

Synoia July 5, 2010 - 7:53pm

By Dave Anderson:

Mexico is in trouble. It is facing a significant narco-insurgency that is threatening the state's monopoly on legitimate force, there are cartels (La Familia for instance) that are taking the Capone model for Chicago as an instruction manual, and its hard currency earning sectors are either in decline, or are highly correlated with the conditions of the US economy. I don't think a collapse is likely, but one of the following scenarios is how things will play out in Mexico over the next decade.

read the scenarios at Newshoggers

Tina July 6, 2010 - 11:35am

Those are interesting scenarios. There's too much money that the cartels have to offer to disrupt their existence. Keep in mind that the president who negotiated NAFTA, Salinas, had a brother who was drug involved in a huge way. This current situation is just more chaotic than before.

The solution that makes sense is someone in the military who is a patriot, and they are there, simply taking over and rounding up the cartel leaders. When new leaders emerge, doing the same. The leader would need the demonstrated support of the people. This would be very violent and messy politically but would cut the snake's head off. Short of that, it will be some of this and some of that until things evaporate altogether.

Michael Collins July 6, 2010 - 2:07pm
Don July 7, 2010 - 8:32am

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