Drug Trafficking for Dummies

Borderland Beat posted by DD republished from Bloomberg Business

Why are murders down and shootings up? Rookie shooters with bad aim.—“Noonie” Ward, former Chicago gang leader

By  Mario Parker, Nacha Cattan and Benjamin Bain

U.S. and Mexican authorities hailed the capture of Joaquin “El Chapo” Guzman in the Pacific coast town of Mazatlan as a major victory in their war on drugs. A year later the power vacuum caused by his absence is fueling chaos on the streets of Chicago and Ciudad Juárez, across the border from El Paso.

As head of the Sinaloa cartel, Mexico’s largest, Guzman was a ruthless enforcer of discipline. He employed violence to protect his distribution routes and intimidate rivals. The kingpin of kingpins, Guzman had the sway to settle disputes with other drug traffickers. In Chicago, his distribution center for the U.S., he cast a long shadow: Few dared cheat the Sinaloa cartel.

The order Guzman imposed is starting to dissolve. At least two of Guzman’s lieutenants are in a struggle to control the Sinaloa organization. The resurgent Juárez cartel is trying to retake the narcotics supply routes that Sinaloa wrested from the Juárez group in a drug war five years ago that cost more than 10,000 lives. 

“The Juárez cartel is taking back Juárez. We’ve seen a recent spike in violence in the last couple of weeks,” says Oscar Hagelsieb, an assistant special agent in charge with the U.S. Homeland Security Investigations office. He says Guzman’s capture “demoralized people that were fighting for Chapo outside of the conventional strongholds and rallied rival cartels.”

Guzman secured his near-mythic status by escaping from prison in a laundry cart in 2001 and later unleashing an assassination spree of rival drug lords. Afterward he controlled much of the narcotics entering the U.S. 

His nickname—“Shorty” in English—belied his outsize reputation. A grade-school dropout, he transformed the drug trade by centralizing everything from warehousing and distribution to collection and transport of money back to Mexico. Five months before his arrest, the U.S. Drug Enforcement Administration’s top official in Chicago at the time, Jack Riley, called Guzman “a logistical genius.” Guzman instilled such fear that he could enforce his rule in northern U.S. cities far from his heavily guarded compound in Mexico’s Sierra Madre mountains.

The Sinaloa cartel long provided much of the heroin, cocaine, and meth sold in the Midwest. Chicago, whose crime commission formally labeled Guzman as “Public Enemy Number One” in 2013, now feels the impact of El Chapo in a different way. The decline of the biggest gangs, many of them retailers of Sinaloa drugs, has spurred the city’s 70,000 gang members to form ever-smaller groups—some 625, according to Chicago police—all fighting for their piece of turf. Police sources blame a flood of illegal guns for the 12 percent rise in shooting incidents in the city last year. But an ex-gang leader says it’s because Guzman’s shadow is gone. The low-level gangsters “aren’t fearing anybody,” says Harold “Noonie” Ward, who once ranked high up in Chicago’s Gangster Disciples gang, which peddled Sinaloa drugs. As for Chicago’s 3 percent drop in murders, chalk it up to rookie gangsters with bad aim, Ward says.

Absent Guzman, traffickers from the Sinaloa cartel have had to find creative ways to avoid not only police but also bandits in Mexico and the U.S. who no longer fear retribution for ripping off a load of drugs from Guzman’s former foot soldiers. Traffickers for Sinaloa are using new methods of delivery, even drones. “It’s very tech-savvy,” says Joseph Lopez, a Chicago attorney who represents accused traffickers.

While Guzman would ship drugs hidden in the trunk of a family’s car, his followers have recently ramped up production of harder-to-detect liquid meth at their labs in Mexico. It can be transported in propane tanks, tequila bottles, even by letters soaked in the stuff. On Feb. 8 border authorities in California arrested a man who was hiding more than 15 gallons of it in a special container placed in the fuel tank of a Ford pickup, according to U.S. customs officials. “If you can turn it into a liquid form, you can put it into almost anything,” says Francis Brown, assistant director of field operations at U.S. Customs and Border Protection’s El Paso office.

 Guzman shunned social media, but the new ranks of traffickers embrace it to boast, recruit, and deal. “Like any of the younger generation, they’re so much more gifted with electronic devices, so they come up with ways to utilize social media to benefit them,” Brown says. “But they also do things that give themselves away.” Last fall the Mexican military captured the son of one of Guzman’s partners after he posted photos on Twitter of his lavish lifestyle, which included guns, cars, and parties. Attorney Lopez says he’s come into court to find prosecutors with elaborate presentations drawn from an accused trafficker’s text messages.

Along the 500-mile stretch of the border that includes El Paso and Ciudad Juárez, authorities seized 247 pounds of heroin from October 2013 to September 2014—almost triple the haul of the year before. New restrictions on prescription drug use are driving more U.S. addicts to heroin. And the fragmentation of drug groups in post-Guzman Mexico may mean more freelancers are trying their hand at producing heroin, says national security analyst Alejandro Hope, who’s based in Mexico City. “There could be more traffickers participating than the Sinaloa cartel, increasing the supply,” says the former Mexican intelligence official.

Mexican government statistics show murders dropped 15 percent last year. But kidnappings rose 30 percent, says Asociación Alto al Secuestro, which offers aid to families of kidnap victims. Guerreros Unidos, a splinter group of a Sinaloa rival, allegedly murdered 43 students in the town of Cocula last September. Authorities say the students were kidnapped by corrupt police on the orders of the gang-connected wife of a politician.

Cocaine seized by U.S. authorities along the border from New Mexico to West Texas (the same stretch that witnessed the rise in heroin shipments) fell to 644 pounds in fiscal 2014 from 817 pounds the previous year. That drop suggests that some longtime cocaine producers from Peru and Colombia have decided to sell more of their drugs in Europe, where prices are higher than in the U.S. The switch reflects a post-Guzman world where some of the most experienced suppliers would rather avoid the increased risk that Mexico’s less seasoned gangs pose. 

Says ex-gangster Ward: “When they got Chapo, that means that everybody’s got a piece of the action now. Everybody wants to be the man.”