Part III: The Secrets of the Sinaloa Cartel’s Drug Import-Export Network, Where "It’s All About Supply and Demand"

"BaptisteGrandGrand" for Borderland Beat

For Part I of this series, please click this hyperlink.

For Part II of this series, please click this hyperlink.

Note: This article was translated from French to English by BaptisteGrandGrande. The original article was published by the French newspaper Le Monde in December 2020.

Our car enters quietly at a dead end in the center of Culiacan, the capital of Sinaloa and the homebase of the Sinaloa Cartel.

Miguel (the first names have been changed), the cartel member in charge of accompanying me in my travels through their “territory,” has been okayed by his boss to allow me to study the economic mechanisms of the cartel's cocaine and fentanyl business. These two drugs are even more profitable than other products (heroin, marijuana and crystal meth) that the cartel elaborates itself in Mexico.

In the heart of the city, Miguel drives me to an ordinary house. He then parks and lowers the tinted window of his car. For several minutes, he listens to the sounds of the street and observes in the rearview mirror a few cars passing by in the darkness of the night. He does not fear the police, who have been massively corrupted across Culiacan.

The house we were in appeared insignificant from the outside, but it is here, and in dozens of other houses just as ordinary, that a decisive phase of the cocaine business is played out: the conditioning.

The gate opens onto an empty courtyard. We take a metal spiral staircase and then a narrow corridor. A strong smell of chemicals takes us by the throat. Two meters further, a room lit with a white light: there is no furniture, just a fan and packs of mineral water. Aluminium sheets block the windows.

In another room, under a portrait of the Virgin, two men in full white overalls, hoods on their heads and construction masks on their faces, are working around a table with a marble top. On the bed, a heat-sealing machine.

At one end of the table are stacked three brown plastic bricks: one-kilogram bars of cocaine neatly packed. At the other end, there is a microwave oven, a pair of rubber gloves and a walkie-talkie that spits out short messages at regular intervals.

In the center of the table, a plastic bag filled with white powder, a precision balance, three boxes of rolls of cling film and parchment paper. The two “chemists” are leaning over a blue bowl filled with cocaine

FOUR MINUTES IN THE MICROWAVE

One of them stops to welcome me. In passing, he takes advantage of it to sniff a long line of white powder in a second bag, smaller, at once replaced at the edge of the table, within reach. Thus “doped” with pure cocaine, this narco will confide, without any restraint, on what makes all the profitability of such a business.

The cartel does not produce a gram of this drug: it gets it in Colombia. Its only action, on the Mexican territory, is to condition it according to the requirements of its customers, then to dispatch it towards foreign markets. Import-export, in short.

“There is 1 kg of cocaine, 98 or 99% pure,” he says. “We prepare the loaves to send them to New York.” As he speaks, his assistant pours the contents of a can of acetone into the basin, which he mixes with the coke using a metal spoon.

“Customers want it in bulk. If it’s powdered like this, they think it’s not good quality,” he tells me, pointing to the bag of loose powder. To give it a rectangular shape, the creamy mixture is poured into a small wooden box with parchment paper lining the bottom: the coke roll template.

Like a cake pan. The narco closes the box, puts it on the ground. After removing his shoe, he climbs on it, so as to press with all his weight on the lid. Once a viscous juice appears on the floor, he extracts the block of compacted white powder enclosed in the paper, then places it in the microwave oven. Count on four minutes of heating at maximum power.

This “lab” does not limit its activities to the conditioning of the coke. While the block of cocaine spins in the microwave, the man in white grabs a small plastic packet sitting next to an aluminum pot and pulls out a white pellet:

“Fentanyl, thirty times stronger than heroin!”

Like all drugs of this type, this opioid analgesic, invented in the 1950s, can become an ultra-addictive drug if consumed in overdose, so for the past ten years, Mexican narcos have been copying the active principle of fentanyl and delivering tons of these super-powerful pellets to the United States every month.

"Many people died because the formula was really too strong," says the trafficker. "With time, they reduced the doses to arrive at this formula. This one pill is the perfect formula!" 

In North America, fentanyl still kills 30,000 people a year… It doesn’t matter to the cartel: it’s easy to produce and generates exponential margins. 1.50 in the streets of Mexico City, the tablet will be sold for three times that price in the streets of Los Angeles, and even 6.50 euros in New York. 

For the Sinaloa cartel, a sprawling organization made up of about 50 factions (themselves divided into groups) and about 10,000 members, the most profitable product remains, despite everything, cocaine.

And the ringing of the microwave oven suddenly reminds us of this… The two “chemists” then take out the " loaf " and wrap it in plastic film before covering it with brown adhesive tape. This kilo of cocaine, bought in Colombia for $1,000 (820 euros), is now worth $10,000, even though only its form has been modified, and at little cost. And it will be sold for ten times that amount once it is available on the American market.

Basically, the only real “gas pedal” of the price of this drug has been its transfer, in successive stages, from the north of Colombia, its production area, to the East Coast of the United States, where it will be consumed.

All this confirms that the commercial success of this drug business and the explosion of the profits are above all in the "export".  In other words the transport and the sale of the drug. After weeks of approach, I will be able to safely observe these essential phases of the process.

CARGO ON THE HORIZON

“Look, this is where the plane will land. From now on, keep your phone with you and be ready to come.”

A cartel man calls me at the hotel where I am staying to give me instructions. He himself is standing at the side of a road, 10 kilometers away, and shows me, through the camera of his cell phone, the agricultural runway on which an avioneta, one of the many small planes that the organization charters for its logistics, will soon land.

A little more waiting and the Cessna will come to load a cargo of cocaine. The next stage of the smuggling business. For security reasons, I have to stay under cover, near the hotel, until the signal of my interlocutor. He’s been out scouting for a few hours with some other guys.

The narcos always do this before a clandestine landing: check the state of the runway, position lookouts at the crossroads to detect any movement of the army… Especially here, in the area of Obregon, a city of 400,000 inhabitants located in the neighboring state of Sonora.

Two hours later, the authorization is given. I jump inside a pick-up truck, the flight should be short. The driver calls a mysterious contact, with whom he will communicate during all the journey by leaving his cell phone in speaker mode. At each crossroads, he reports our position and receives in return new coordinates, immediately integrated in the GPS of his phone.

We drive like this for fifteen minutes, guided from point to point, crossing some cars, agricultural vehicles and school buses. After each intersection, a different 4x4 starts behind us, then passes us after a few kilometers.

“Everything is fine,” the driver tells me. "They are checking that we are not followed".

A message comes: the plane should land in five minutes. A last a white pick-up passes us and accelerates suddenly to guide us, this time at full speed, on a narrow road.

On arrival, I recognize the place, it is the one I was shown on video on the phone. There is a small runway that extends to a hangar. It is a facility like dozens of others in the region; farmers use them for aerial spraying. A hooded man stands in the bushes. At his feet are two black duffel bags.

“80 kg of cocaine,” he tells me. “The plane comes from Mexicali and goes back there.” Mexicali, 700,000 inhabitants, the last Mexican stop before accessing the United States, the cartel’s primary market. “Here,” continues the narco, “we make about ten deliveries a week. It varies according to the weather, and if the authorities let us work.”

Scrutinizing unceasingly the road then the horizon, he tells me how much this job of loader of cargoes of cocaine is perilous, but remunerative. A delivery like this one brings him 30,000 pesos (1,200 euros), which is ten times the average monthly salary in the region.

AIR COCAINE

Thirty seconds later, the white and red plane lands in the distance, in a cloud of dust. The hooded man grabs the handles of the bags and straightens up, ready to fly, as the plane comes to a stop 50 meters away from us, engine running.

With his helmet over his ears, the pilot immediately makes a sharp 180-degree turn to get back on the runway’s axis. He maintains full power on the aircraft, blocked by its brakes. A passenger is on board; we can’t see his face, he has a black hood. Only then does the man I was talking to run towards the plane, bags in hand.

At the same time, the passenger opens the rear door of the cabin and signals him to accelerate, despite the propeller’s blast. In a deafening noise, the passenger seizes the two bags, loads them on board then gives a fast embrace to the narco remained on the ground and rushes in the aircraft.

As soon as the door was closed, the pilot released the brakes and the Cessna took off in a few seconds, flying over the hangar. The sequence lasted less than three minutes. The carrier earned his 30,000 pesos. “Run! The army is coming!”

I barely have time to get back on the road and into our pickup when the driver starts up to drive out of the area. This happens with every delivery: as the pilots make landings that are not in their flight plans, the radars pick up their unexpected trajectories. As soon as they are warned, the military launch their patrols.

However, there must be enough units available in the area. As for the pilot, if his plane has not been identified on the ground, he will claim, in case of control, to have had to land on a makeshift runway for a technical check. Neither blind nor fooled, the authorities are simply overwhelmed by the frequency of these clandestine shipments in the Mexicali area.

It is thus in this direction that the avioneta has set its course. Along with Tijuana, further west, this border city is one of the main logistical hubs from which narcos bring tons of drugs to the United States every month.

All means to smuggle drugs are good: by truck or by car, in the stream of thousands of vehicles that cross the border every day; or through the dozens of tunnels that the cartel has dug under the separation walls between Mexico and the US.

INVENTORY MANAGEMENT

A man opens the door, looks around and then beckons us in. Very thin, nervous, he has dark glasses, a scarf on his face, an automatic with a belt.

We enter an airconditioned living room, furnished with two sofas and a coffee table on which are piled up dozens of Tupperware covered with gray tape. “20 kg of crystal,” says our host. “Crystal,” the star methamphetamine among Americans.

On each lid is written the word “duck” in black felt-tip pen, in reference to the swan of the Swarovski crystal jewelry brand, whose name is used by the narcos as a code word for this drug. Continuing the inventory, he says:

“Here are 5,000 pills of M30 and half a kilo of another type of fentanyl. It’s going to the United States in three or four days. In all, there are about 2 million pesos worth.”

Every week, this man stores between 300 and 500 kg of drugs in this house. Like all the members of the cartel, he started as a sicario in the security division of his group. He then moved to the logistics branch, where he was a transporter, a very exposed job since it involved taking goods across the border. After a few years, he is now responsible for the stocks, in charge of the drugs that his fellow transporters come to pick up, on the orders of the upper level of the group.

The second phase of the export is the sale. Hundreds of kilometers away, an executive of an important cartel faction agreed to receive me in an industrial zone located between Obregon and Culiacan to talk about this final stage of the traffic.

“Look! This is Zephyr,” says the man who welcomes me behind a shed, pointing to a young tiger in its cage. In the world of the narcos, the fact of having such a wild animal is a sign of power. At 35 years old, Eduardo is a leading “businessman,” in charge of sales to Europe. His clients? Wholesalers in Spain, France and the Netherlands, who then sell the goods to other distributors.

“We move 200 to 300 kilograms of crystal a month. Cocaine is about 1 ton a month.” While throwing meat to the tiger, he continues in a calm voice: “On average, my middlemen and I make $800 to $1,000 per kilo of coke. It’s a good business: there’s no investment, you just need contacts.”

Such a position can therefore be very profitable. But there are risks involved. While top management can sometimes accept a temporary drop in sales performance, they cannot tolerate non-payment.

But it is important to know that the merchandise is only paid upon delivery to the customers, whether they are American or European: until they are received by his wholesalers, Eduardo is responsible for the tons of drugs he exports, as well as the hundreds of millions of dollars they represent.

At the time of our meeting, he was very concerned about a delivery case. “Yes, it was one of our shipments. The drugs fell into the sea,” he concedes when I ask him if he has heard about the bundles of cocaine washed up, in November 2019, on European shores, particularly in France. “It’s a big problem,” he admits, "we lost a lot of money".

By masking the number, he makes me listen on his iPhone the messages exchanged on this subject with one of his European customers. In Spanish, the latter tells him that apparently the goods were thrown overboard from a ship caught by customs. "It’s part of the business," says Eduardo, "sometimes you win, sometimes you lose."

Despite these heavy losses, he was not worried because he strongly develops the business of his group in Europe. He makes me listen to another message, received on WhatsApp, in which the latter asks him if he can supply him with crystal, assuring that this methamphetamine “will be a hit” in several countries.

The European buyer, visibly enthusiastic, adds that, to launch the product in question, his distributors will offer it for free in order to hook consumers.

BUSINESSMEN WITHOUT BORDERS

From one continent to another, the narcos are businessmen without limits, ready to ensure the “marketing” of the drug as they would do for a legal product.

“As long as there is money to be made, I will continue,” says Eduardo. “People have already tried to kill me. I don’t know if I’ll ever stop. Maybe I will, maybe I won’t.” A few weeks later, he agreed to see me again to go into more detail about how the cocaine export works.

The principle is very simple. To begin with, you have to buy the drug in Colombia, from local traffickers as well as from units of the Ejército de Liberación Nacional (ELN), the last Colombian guerrilla group, which controls several production areas in the north of the country. There, Eduardo negotiates a kilo of 99% pure coke at 1,000 dollars. And he will sell it to his European customers at a price ranging from 55,000 to 60,000 euros.

They themselves will cut the drug to 40% with products of negligible cost and sell it for 65 euros per gram. What will bring the value of the kilo to 91,000 euros. That is, in the end, a theoretical margin of almost 10,000%. These dizzying profits are, of course, reduced by significant fixed costs.

“The problem is not the purchase price,” says Eduardo. “What costs is the transportation. To bring 1 kg of cocaine from Mexico to Europe, it is necessary to count 15,000 euros on average.”

In fact, the cartel does not sell a product, but a service: the risk-taking that it assumes to make it cross the borders. According to him, there is only one solution to limit the risks: to corrupt as much as possible the people likely to control the cargo.

That’s why, according to Eduardo, the cartel “buys” port agents in Mexico and Europe, as well as dozens of police and customs officers.

“Without this, it would be impossible to bring drugs into Europe.”

If the costs of transport and corruption were deducted, the margin of the cocaine traffic between Mexico and Europe is nearly 9,000%.

Like all the factions in the organization, the one that Eduardo works for has only one objective: to launder its hundreds of millions of dollars of earnings into the legal economy.

If, of course, his customers pay him in cash, Eduardo explains to me that it would be too risky for the organization to repatriate such volumes of cash to Mexico.

The narcos therefore work to transform the cash into money placed in bank accounts by more or less sophisticated techniques, which go from the basic transfer in unscrupulous agencies to the fraudulent injection of millions of euros in the treasury of complicit legal companies.

The funds are then repatriated to Mexico by transferring them to a web of accounts belonging to the narcos, which in turn invest them in hundreds of other legal companies, thus rotting entire sections of the national economy:

“The money is used to buy real estate, companies, buildings, land, shopping malls, hotels, businesses, things like that, huge.”

Eduardo is convinced that the commercial future of the cartel is in Europe.

Faced with police pressure and competition from other traffickers in the United States, the organization is investing in this market. Selling its drugs thousands of kilometers away from Sinaloa is certainly more complex than supplying the American neighbor, especially since other narcos, Colombian and Peruvian, already operate in Europe. There is demand there for cocaine, crystal meth, or fentanyl.

"Everything is a question of supply and demand", concludes Eduardo. If someone on the Moon asks me for drugs, I buy a rocket to go there.”