How The Zetas' Were Doomed to Fail by their Violent Economic Model

"El Huaso" for Borderland Beat

Note to readers: Special thanks to "narcomappingmx" for sharing his work with Borderland Beat. This user is active in the forum page and presents some interesting contributions.

    In this paper, I will examine the leadership and economic reward structure of Los Zetas. In the early 2000s, this organization dominated Mexico's landscape as they fought the government and other cartels in bloody turf wars for control of Mexico’s extremely lucrative trafficking routes into the United States and Europe. I argue that the economic reward structure of Los Zetas, which highly valued displays of violence and built a brand of brutality, ultimately weakened their organization.

Founding of Los Zetas

    To examine the Zetas’ founding, it is vital to first address its parent organization, the Gulf Cartel, or Cartel del Golfo. The Gulf Cartel is one of the oldest Drug Trafficking Organizations (DTOs) in Mexico, tracing its founding back to Prohibition in the United States, when the Gulf Cartel smuggled liquor. Utilizing vast corruption networks and smuggling contacts in Guatemala, Colombia, and Bolivia, the Gulf Cartel maintained their control over the Northeast of Mexico in the ensuing decades, evolving into one of the largest cartels focused on trafficking cocaine, heroin and marijuana.

    In 1996, Osiel Cardenas Guillen, “The Friend Killer,” murdered one of his bosses and took the reins of the Gulf Cartel. Anticipating a power struggle and looming conflict, Guillen began building a private army. In the late 1990s, the Mexican Government began to take elevated notice of the violence caused by organized crime along the US/Mexico Border. The Secretariat of National Defense began to select and train Special Forces military units to combat the cartels. These units were trained in counter-insurgency operations in preparation for city combat against cartel gunmen. Even though they were members of the Mexican Military, many of these counter-insurgent troops were trained within the United States at Fort Bragg, North Carolina.

Osiel Cardenas Guillen

    The desertion of Mexican Federal troops into Los Zetas began with a Mexican special forces officer named Arturo Guzman Decena, “El Z1”. Guzman Decena was corrupted and received bribes from the Gulf Cartel for years, and when Guillen asked him in 1997 to build an armed wing for the Gulf Cartel, he handpicked 31 soldiers out of the Mexican Special Forces. This new armed wing of the Gulf Cartel, called Los Zetas, was tasked with several duties including the protection of Guillen, enforcing control of plazas, and carrying out hits. They were each tasked with bringing in and training more recruits (Grayson, 2). Propaganda efforts by Los Zetas focused on drawing in police officers and members of the Mexican armed forces, many of whom were easily won over by drastically better wages and opportunity for career progression. A narco-banner hung over a bridge in Reynosa, Tamaulipas in April of 2008 said:

“Grupo Operativo Los Zetas te quiere a ti, militar o ex militar. Te ofrecemos buen sueldo, comida y atenciones a tu familia. Ya no sufras maltratos y no sufras hambre. Nosotros no te damos de comer sopas Maruchan”.

“The Operations Group Los Zetas wants you, military or ex military. We offer a good salary, food, and will take care of your family. You will no longer be mistreated and will no longer go hungry. We won’t give you Maruchan (packaged noodles) to eat.”

    The joint organizations of Los Zetas and The Gulf Cartel began to call themselves “La Compania.” The Gulf Cartel focused primarily on trafficking narcotics from Central America into the United States as their armed wing “Los Zetas” cleared plazas and removed rivals. La Compania experienced incredible success in Mexico, where many of their opponents were unprepared and untrained for the heavily militarized and stunning violence employed by Los Zetas. By 2011, Los Zetas had presence in 17 out of 32 Mexican states, making them the most influential cartel in Mexico.

    Cardenas Guillen was captured by Mexican forces after a shootout in 2003. He was imprisoned in Mexico, but continued to run the Gulf Cartel operations from behind bars. He was extradited to the United States in 2007. Infighting ensued within La Compania as regional leaders fought for control of the organization. An ex officer of the Mexican Special Forces, Heriberto Lazcano Lazcano “El Lazca” or “The Executioner”, the leader of Los Zetas took control of La Compania, and delegated different regions to various commanders of Los Zetas and the Gulf Cartel. He consolidated Los Zetas power, pushing into other illicit markets. Los Zetas became a more business-minded organization. The DEA even claimed that they had a “business structure, with quarterly meetings, business ledgers, and even votes on key assassinations.”

    The two joint organizations continued to work together, although the power of Los Zetas continued to increase. Heriberto Lazcano Lazcano, and his second in command, former policeman Miguel Angel Trevino “El Z40” had tendencies for extreme violence, with Trevino being the more sadistic of the two. Together they built Los Zetas into the bloodiest cartel in Mexico. This concerned other Gulf leaders. Fissures began to appear within La Compania when some of the Gulf bosses became uneasy with the violence caused by Los Zetas which drew government attention.

    The fissure evolved into a rupture in 2010, when a regional Gulf boss, Jorge Eduardo Costilla Sánchez ``El Coss” kidnapped and killed a close Zeta associate of Trevino. Trevino demanded that Coss hand over the man responsible and threatened war if he did not. El Coss did not comply, and Trevino kidnapped and slaughtered 16 Gulf Cartel operators. This sparked a war in Northern Mexico as regional leaders picked sides. With their advanced weapons and tactics, Los Zetas pushed hard into their former bosses’ territory. By the end of 2010, the rupture was completed, and Los Zetas were an independent organization (Grayson, 198).

    Their independence came at a cost. The Gulf Cartel was a more established organization, and this new war meant they were now at war with the Sinaloa Cartel, another powerful organization to the west. Additionally, all of La Companias contacts in Central America for cocaine were with Gulf Cartel bosses. Los Zetas lacked these connections, and needed to establish new trafficking networks (Grayson, 23).

Los Zetas’ use of Extreme Violence as Propaganda

    No other cartel in the history of Mexican organized crime has been responsible for so many massacres as have Los Zetas. Los Zetas intentionally used this extreme violence to build their brand as the most brutal cartel in the nation. This reputation allowed them to enter dozens of illicit markets other than drug trafficking. In The Zetas Bad Omen, author and journalist Julie Lopez writes:

“Violence is used in the absence of power, in the words of Hannah Arendt, and the Zetas did just that. Lacking popular authority of traditional narco families (which bought communities’ silence by building clinics or paving streets, using selective violence when needed), the Zetas took territory by force.”

    The former Secretary of Public Security, Genaro Garcia Luna claimed that the rise in publicized executions could be attributed to the attention given to Al Qaeda executions in the Middle East. Los Zetas pioneered the use of social media to disseminate/ distribute threats and execution videos. During the 2000s, they uploaded videos of killings to YouTube, shared them on Facebook, and sent copies to newspapers. Often these would include interrogations of Police officers, rival drug dealers, or innocent bystanders. The 2000s were a turbulent time in Mexico. The splintering of larger groups created dozens of small cartels such as La Familia Michoacána, La Resistencia, Guerreros Unidos, and Los Zetas. These groups resorted to using social media and public murder to announce their entry into a market (“Tracking the steady rise of beheadings in Mexico”, InsightCrime).

    From their inception, Los Zetas have been committed to using violence to force compliance from authorities and politicians. The consequences were fatal for those who didn't. On June 8, 2005, Alejandro Dominguez Coello was appointed Chief of Police of the border city of Nuevo Laredo, Tamaulipas. As he was sworn in, he affirmed his incorruptibility saying: “I am not beholden to anyone. My commitment is to the citizenry.” Within six hours, he was ambushed as he was stopped at a red light, and assassinated by Los Zetas hitmen (Grayson, 15). In Zeta controlled territories, no one is safe from execution, even the President of Mexico, Felipe Calderon who was threatened by Zeta Commander Angel Trevino in 2007.

    When questioned about the death tolls from the Drug War, Felipe Calderon claimed that the deaths were primarily the result of cartel on cartel violence. This is true. However, with more cartels focusing on local revenues, this may be changing. The victims of Los Zetas are not purely rival hitmen. The illicit markets of extortion, kidnapping, and murder for hire all cause serious externalities. Testimony from captured Zetas responsible for disposing of bodies at Piedras Negras Prison, a Zetas disposal site, claimed that; “many of the victims were drug dealers for other cartels, people who owed money to the Zetas, and relatives of these groups. (...) They included men, women, elderly, children, and even a woman who was seven months pregnant” (Open Society Justice Initiative, 31).

    Los Zetas violence was also useful in ensuring that members would not provide information to the government, and that if they did, the authorities would not respond. This was exactly the case at the Allende massacre of 2011, where Los Zetas exacted vengeance on the families of former members whom they believed provided information to the government. Reports say 40-50 trucks entered the town of Allende, Coahuila and rounded up all citizens with the last names of their suspected turncoats. They were driven out to a ranch and executed. Government reports claim around 50 died, but captured Zetas claimed around 300 did. Prior to the attack, leaders of Los Zetas met with local police and told them that they would receive calls for help. They were not to respond or the same fate would befall their families (Open Society Justice Initiative, 26).

Diverse Economic Activities of Los Zetas

    The diversification of Los Zetas into many different markets was a survival tactic. Following their split from The Gulf Cartel, they had limited success acquiring cocaine from South America. Without this major income stream, they turned into local markets (Grayson, 23). Already in control in much of North Eastern Mexico, they only had to leverage their violent brand and armed control to impose other economic activities.

    As opposed to traditional narco trafficking, which requires a willing buyer for the product, Los Zetas model is imposed on its controlled territories through their military strength. They do not rely on foreign drug consumption markets for their income, but rather extract payment from local areas under their control.

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 (“How the US Govt Gets It Wrong with the Zetas”, InsightCrime).

    Redlogarythm and MX, contributors to BorderlandBeat, call this trend the “Sicilianization” of cartels in Mexico, where criminal groups begin to diversify their economic pursuits. The days where these organizations are drug cartels is starting to fade, and is being replaced by smaller more holistic criminal groups. These groups, such as the Cartel Santa Rosa de Lima or the Sangre Nueva Zetas often lack the connections and routes to traffic narcotics, and resort to local criminal activities.

I. Fuel theft or “huachicol”

    Mexico's state oil company, Petróleos Mexicanos (PEMEX) controls several vast crude oil pipelines which bring oil from the south of Mexico and distribute it around the nation. These extensive networks of crude oil pipelines attracted the attention of many criminal organizations, including Los Zetas. By tapping into the PEMEX pipelines, these criminals can extract millions of dollars’ worth of crude oil, which are then sold on the black market to civilians and Mexican and American firms (San Diego Tribune, 2009). This is a highly profitable business, and costs PEMEX around $1 billion USD annually. Los Zetas was the first cartel to take on this gas theft or “huachicol” in the 2010s when they split off from The Gulf Cartel.  Los Zetas established sophisticated surveillance and tracking systems to follow the movements of local PEMEX workers and Military units tasked with protecting them.

    Los Zetas has terrorized PEMEX workers into looking the other way and helping them at times. Over the past 10 years over 50 PEMEX workers have been kidnapped, and dozens more have been assassinated. The most noteworthy of these kidnappings occurred in 2007, when 38 PEMEX workers were kidnapped from the PEMEX refinery in Cadeteyra, Nuevo León, a Los Zetas stronghold city (“Vivos o Muertos los queremos de vuelta”, El Universal). The mass kidnappings and murders of workers sent a clear message to the locals; assist, step aside, or else. Los Zetas’ focus on the workers of PEMEX has caused the Mexican government to establish bases and assign military units to escort the workers, with limited success (Proceso, 2013).

II. Extortion

    There are well documented cases of Los Zetas systemic involvement in two forms of extortion. The first is called “cobro de piso” or “floor charge.” This is the crime where businesses are forced to pay a sum of money in exchange for operating in a cartel's territory. Sometimes this extortion operates under the guise of protection money, where the cartel will pledge to protect the business from thieves or other threats (ReporteIndigo, 2012). The second form of extortion is kidnapping. This can be either true kidnapping, where victims are captured and held until ransom money is paid, or express kidnapping, where the victim is captured, usually in a car, and forced to withdraw cash from an ATM with their bank card before they are released.

    Los Zetas reached global headlines and international outrage after several high-profile mass abductions of undocumented Central American migrants. Los Zetas took advantage of the thousands of undocumented migrants who have left the economically and politically unstable nations of Central America. Undocumented, and uncontrolled, they are largely unprotected by the Mexican government. Starting in the late 2000s, Los Zetas took advantage of these caravans. They would ambush them in armed groups, round them up, and drive them into rural Mexico. They were forced to join Los Zetas or call family members back home and demand ransom for their lives. Those who couldn't pay were killed en masse. This led to several discoveries of massacres of migrants, including the San Fernando massacres of 2010 and 2011, where 72 and 193 migrants were found dead (SSP, 3:49).

    The kidnapping and ransom of migrants has been a key focus of Los Zetas. It is a highly profitable illicit market, and often holds very little risk, due to the lack of documentation and ability of the government to track migrant caravans.

III. Counterfeit Goods

    The production and selling of counterfeit goods in Mexico is a large contributor to the nation’s massive underground economy. A study by the Mexican Chamber of Commerce revealed that 8 out of 10 Mexicans have purchased pirated goods. (Observatorio Nacional, 20:12) This taste for counterfeit goods costs the Mexican economy over $2 billion USD per year. Organized crime is responsible for much of these counterfeit goods. The production is often controlled by larger organizations, and the individual street vendors purchase their stock from these suppliers. Individual buyers often also support organized crime through “cobro de piso”, payments to local crime groups for selling on their turf.

    Los Zetas were heavily involved in the sale and importation of counterfeit goods. One officer within Los Zetas, Gregorio Villanueva Salas, was nicknamed the “The Czar of Piracy” for the ability of his criminal cell to produce 58 million pirated CDs and movies a year. When he was captured in Matamoros, Tamaulipas in 2012, police found a workshop dedicated to creating counterfeit discs. These goods were then shipped south into the center of Mexico, where they were sold in street markets in Jalisco and Mexico City, two hot spots of counterfeit goods (Proceso, 2017).

Gregorio Villanueva Salas, 'The Czar of Piracy'

How does this violence affect the stability of Los Zetas?

    The grotesque violence of Los Zetas, as seen in the San Fernando Massacres of 2010 and 2011 or the Cadereyta Jiménez massacre of May 12, 2012, are intended as acts of terror and intimidation. They are successful in gaining recruits and dismaying opponents, but also gain mass international and Mexican federal attention. This attention causes increased law enforcement focus, which is a threat to the stability of a DTO. An example of this was various other DTOs' responses to Los Zetas in the late 2000s. In 2007, the Sinaloa cartel created an armed wing called “Los Matazetas”, the “Zeta Killers” to fight Los Zetas in Veracruz, Mexico (Excelsior, 2018). The Beltran Leyva Organization, also a significant criminal group at the time in Mexico, created their own armed wing “Los Negros”. These were the first of several multi cartel coalitions against Los Zetas. In February of 2010, narco banners hung up in five states of Central Mexico dictated:

"Atenta invitación a toda la sociedad mexicana a unirse a un frente común para acabar con Los Zetas. Nosotros ya estamos actuando contra Los Zetas, y próximamente seremos La Familia Mexicana. “Vamos todos juntos contra las bestias del mal: La Familia Michoacana, Grupo Resistencia, Milenio, Golfo y las Familias Guerrerense, Guanajuatense y Mexiquense”

"A courteous invitation to all mexican society to unite in a common front to get rid of Los Zetas. We are acting against Los Zetas, soon we will be the Familia Michoacana. “Join us all against the evil beasts: (we are) La Familia Michoacana, Grupo Resistencia, Milenio, Golfo y las Familias Guerrerense, Guanajuatense y Mexiquense. (Cronica, 2010)”

Particularly in Michoacan, locals banded together to form “autodefensas”; armed community defense groups to fight the incursion of Los Zetas into their communities. Through strong local support, these groups were successful in pushing Los Zetas out of the state of Michoacan.

Government Response to Los Zetas

    The economic model of Los Zetas caused intense scrutiny. Large massacres and shootouts often create international outrage, as seen after the San Fernando Massacre of 2010. This attention caused the Mexican government to investigate and start a manhunt for the responsible Zetas. By June 2011, the Federal Police had captured 81 Zeta members involved in the massacre, including Édgar Huerta Montiel “El Wache”, the Zeta commander in charge of the operation. In March of 2009, the Attorney General’s Office of Mexico; la Procuraduría General de la República (PGR) released a list of the 37 most wanted cartel leaders. Of that list 14 were members of Los Zetas. In comparison, only 5 of the most wanted were members of the rival Sinaloa Cartel, who controlled the same amount of land.

The results of their economic model

    Miguel Angel Trevino, the Zetas commander, was rumored to drive around at night, pointing at random pedestrians for his hitmen to kill. This is in contrast to rivals of Los Zetas, The Sinaloa Federation, in particular “El Chapo”, stress to their plaza bosses that plazas under control of the Sinaloa cartel must remain peaceful (NYT, 2012). In fact, petty criminals such as drug dealers or thieves are often captured and punished by plaza bosses in order to keep crime down.

    The Zetas are diversified; involved in money laundering, narcotics trafficking, human smuggling, prostitution, counterfeit goods, kidnapping, extortion, and gas theft (huachicoleo). Los Zetas’ business model relies on earning economic rent by dominating their local plaza. Examination of the massive outcries from Zeta activities, and the ensuing crackdowns indicates  that their economic model directly harms their long term stability. This is important for the stability of an organization, as the government will work harder to dismantle organizations who clearly harm their communities. The mass violence and murder resulting from Los Zetas’ economic model draws the focus of rival cartels and law enforcement on a national scale. This causes intense crackdowns, which contribute to the instability of the organization.

Works Cited

Carrizales, D. (2015, August 13). Cadereyta: "Vivos o muertos los querems de vuelta". Retrieved November 03, 2020, from https://archivo.eluniversal.com.mx/estados/2015/impreso/cadereyta-8220vivos-o-muertos-los-queremos-de-vuelta-8221-97341.html

Corcoran, P. (2017, October 06). Zetas Arrest Shows Mid-Level Commanders' Capacity for Mayhem. Retrieved November 07, 2020, from https://www.insightcrime.org/news/analysis/zetas-arrest-shows-mid-level-commanders-capacity-for-mayhem/

Davila, P. (2012, June 14). Presentan en la SIEDO a "El Zar de la Pirater. Retrieved November 07, 2020, from https://www.proceso.com.mx/nacional/2012/6/14/presentan-en-la-siedo-el-zar-de-la-pirateria-104191.html

Declara "El Wache" sobre caso San Fernando, DEMOS Desarrollo de Medios S.A. de C.V. Interview by Secretariat de Seguridad Publica, Policia Federal. [Video file]. (2011, June). Retrieved from https://www.youtube.com/watch?v=UycQ0P9jCts

Detienen a 18 presuntos zetas por robo de hidrocarburos a Pemex. (2013, April 13). Retrieved November 07, 2020, from https://www.proceso.com.mx/nacional/2013/4/29/detienen-18-presuntos-zetas-por-robo-de-hidrocarburos-pemex-117619.html\

Entrevista a el Mamito, presunto fundador de los Zetas, Cosultants and Promotional Services. Video from CNN Mexico, Interview by Secretariat de Seguridad Publica, Policia Federal.[Video file]. (2011, July 6). Retrieved from https://www.youtube.com/watch?v=HacDTEn2TDs

Flores, R. (2018, February 10). CJNG lidera trasiego de drogas a EU; nació como Los Matazetas. Retrieved November 03, 2020, from https://www.excelsior.com.mx/nacional/2018/02/10/1219402

Jones, Nathan P., and John P. Sullivan. “Huachicoleros: Criminal Cartels, Fuel Theft, and Violence in Mexico.” Journal of Strategic Security, vol. 12, no. 4, 2019, pp. 1–24. JSTOR, www.jstor.org/stable/26851258. Accessed 7 Nov. 2020.

Grayson, George W. THE EVOLUTION OF LOS ZETAS IN MEXICO AND CENTRAL AMERICA: SADISM AS AN INSTRUMENT OF CARTEL WARFARE. Strategic Studies Institute, US Army War College, 2014, www.jstor.org/stable/resrep11767. Accessed 7 Nov. 2020.

Gutiérrez, H. (2012, August 28). Los demonios andan sueltos. Retrieved November 05, 2020, from https://www.reporteindigo.com/reporte/los-demonios-andan-sueltos/

La extorsión, una realidad 'aceptada' por algunas empresas en México. (2016, February 15). Retrieved November 07, 2020, from https://expansion.mx/nacional/2013/04/08/la-extorsion-una-realidad-aceptada-por-las-empresas-en-mexico

Lopez, J. (2012). The Zetas' Bad Omen. Retrieved November 04, 2020, from https://revista.drclas.harvard.edu/book/zetas%E2%80%99-bad-omen

Pachico, E., & Dudley, S. (2017, October 06). Why a Zetas Split is Inevitable. Retrieved November 07, 2020, from https://www.insightcrime.org/news/analysis/why-a-zetas-split-is-inevitable/

Pachico, Elyssa, et al. “Tracking the Steady Rise of Beheadings in Mexico.” InSight Crime, 6 Oct. 2017, www.insightcrime.org/news/analysis/tracking-the-steady-rise-of-beheadings-in-mexico/. 

Press, T. (2009, April 01). Mexico says gang sold stolen oil to US refineries. Retrieved. December 14, 2020, from https://www.sandiegouniontribune.com/sdut-lt-mexico-oil-theft-033109-2009mar31-story.html

Osorno, Diego. “COMER EN UN CAMPAMENTO DE LOS ZETAS.” Milenio Diario de Monterrey, July, 6, 2020. http://nuestraaparenterendicion.com/index.php?option=com_k2&view=item&id=410:comer-en-un-campamento-de-los-zetas&Itemid=104&tmpl=component&print=1

ROQUE MADRIZ, I. (2010, February 2). Aparecen más narcomantas de La Familia contra Los Zetas. Retrieved November 08, 2020, from http://www.cronica.com.mx/notas/2010/485678.html

Salas, D., Salas, M., Ugalde, A., Jaramillo, L., & Castro, H. (2020, July). Pirateria en Mexico: Diagnostico de la oferta y de las acciones institucionales. Retrieved October 28, 2020, from https://onc.org.mx/uploads/190820-PirateriaMx-doc.pdf

Semple, K. (2019, July 12). Migrants in Mexico Face Kidnappings and Violence While Awaiting Immigration Hearings in U.S. Retrieved November 07, 2020, from https://www.nytimes.com/2019/07/12/world/americas/mexico-migrants.html

Beittel, June S. Mexico: Organized Crime and Drug Trafficking Organizations, Congressional Research Service, July 28, 2020.

https://fas.org/sgp/crs/row/R41576.pdf

Daugherty, Arron, and Steven Dudley. “How the US Govt Gets It Wrong with the Zetas.” InSight Crime, 17 Oct. 2017, www.insightcrime.org/news/analysis/us-govt-gets-it-wrong-mexico-zetas-leaders/. 

Redlogarythm. “The Economics of Drug Prices or Why the War on Drugs Is Failing.” Borderland Beat, Aug 29, 2020. www.borderlandbeat.com/2020/08/the-economics-of-drug-prices-or-why-war.html.

Salcedo-Albarán, Eduardo & Salamanca, Luis. (2014). Structure of a Transnational Criminal Network: “Los Zetas” and the Smuggling of Hydrocarbons.

REAR ADMIRAL ERNEST R. RIUTTA, USCG. Quote from: U.S. Congress. HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON COAST GUARD AND MARITIME TRANSPORTATION. "COAST GUARD DRUG INTERDICTION." (JUNE 10, 1998). Text from: Federation of American Scientists. ttps://fas.org/irp/congress/1998_hr/h980610-riutta.htm; Accessed 11/20/2020.