Mexican Drug Cartels Diversify

Mexico’s drug cartels have diversified their operations in recent years, branching out into piracy, prostitution, theft of oil and minerals, the sale of adulterated liquor and other illegal activities.

A police and army crackdown by President Felipe Calderon’s administration and competition from rivals have forced the gangs to diversify their businesses, a police spokesman told Efe, adding that the cartels do not hesitate to use violence and coercion to achieve their objectives.

In one recent operation against the nation’s cartels, the arrest of the reputed money manager of the crime syndicate La Familia Michoacana, it was discovered that that organization sold 1.1 million tons of illegally extracted iron ore in China for $42 million.

The theft of minerals in the western state of Michoacan has increased in recent years as that area has come under the control of La Familia, the Mexican Attorney General’s Office said.

A source with the U.N. Economic Commission for Latin America and the Caribbean told Efe that some groups have even sought to take control of mines in Michoacan.

“There have been attempts, above all, to launder money,” the source said. “They’re buying up small- and medium-sized mines to do all types of tricks to justify the income from their operations.”

In addition, threats from cartels “that are trying to (enter) production and operation areas” are increasingly frequent, a spokesman for the First Majestic Silver company told Efe, adding that there has been an increase in robberies of mine workers.

The oil industry has also been affected by the encroachment of organized crime, which has stolen $300 million worth of natural gas liquids from state energy monopoly Petroleos Mexicanos’ facilities over the past four years, according to official figures.

Since 2007, the police has guarded Pemex’s installations to prevent employees from aiding and abetting the theft of fuel by drug traffickers.

Five members of the Los Zetas cartel involved in this crime were arrested in July, while a month earlier five Pemex workers and two employees of a Pemex contractor were kidnapped and are still missing.

Mexican cartels also have become involved in prostitution and sex-trafficking, according to journalist and author Lydia Cacho.

“There’s a link between the mafias dedicated to prostitution and sex-trafficking and most of the drug cartels, with the exception of some like La Familia, since they say their ‘moral’ codes prohibit them from operating in brothels,” Cacho told Efe in an interview coinciding with the release of her new book.

She said many of the cartels run establishments in northern Mexico and in Mexico City that really are brothels in disguise.

Other illicit activities carried out by these groups are less well known, such as piracy, a crime in which Mexico ranks fourth worldwide behind only Russia, China and Italy.

Los Zetas have taken over the piracy business in at least four states – Chiapas, Tabasco, Veracruz and Puebla -, where they offer street merchants protection from police operations and financial incentives for selling pirated versions of films with the “Producciones Zeta” label, the daily Reforma reported Monday.

Sellers of this illegal merchandise, which one stallholder acknowledged was surprisingly cheaper than that provided by other distributors of pirated DVDs and higher in quality, must make a periodic extortion payment that in Mexico is known as “rent.”

Mexican companies lost some $3.07 billion in 2009 as a result of piracy and merchandise theft, according to a report from Grupo Multisistemas de Seguridad Industrial, an electronic security services firm.

That report revealed that 65 percent of the CDs and cassettes sold in the country are pirated copies sold by illegal producers, who make an estimated $220 million in annual revenue from those sales.

Cartels also charge immigrant smugglers tolls and kidnap migrants, either to extort ransom payments from their family members or to threaten these people into working for them.

These organizations also have entered the illegal liquor business. In the northern city of Monterrey, Mexican marines found around 100 boxes of adulterated whiskey and tequila in several houses.

Days later, the municipal alcohol director, Rogelio Angel Gonzalez, was arrested at city hall for allegedly helping Los Zetas distribute the alcohol at bars and nightclubs in Mexico’s industrial capital. EFE