Thursday, January 31, 2013

BATFE Screwed the Pooch in Milwaukee

Another BATFE screw up?

You be the judge.

The Milwaukee Journal Sentinel broke the story today. Fox News followed along with a story of their own. And poorly executed law enforcement work draws Congress in much the same way as other things draw flies.
The Federal Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFE) created a phony storefront, named it Fearless Distributing, staffed it with undercover agents and created a Facebook page that lured people to the location all under the guise of selling clothes and shoes. The ATF agents handed out business cards with a logo similar to the one from the movie “The Expendables” with the words “buy, sell or trade” on them. Once the store was up and running, agents spread the word that Fearless Distributing was willing to buy guns and drugs.
So far, it looks like a typical 'storefront operation' that the federal government loves to run. It's set to get the dumbest of criminals and they cast a wide net. The funding is budgeted as a "Group One" program.  As usual, results matter and money is secondary -- but does it constitute entrapment? Not in a federal courtroom the way it would usually play out in a state court. The agents in one case paid $1,200 for a firearm that would normally sell for between $400 and $700. 

Keystone Cops?

Not yet. But it's coming...
On Sept. 13, 2012, three weapons – including an M-4 machine gun – were stolen from an agent’s parked car. The very next day one of the weapons -- as well as another unrelated one -- were sold back to agents for $1,400. The M-4 and Smith & Wesson 9mm are still unaccounted for.
Senator Charles Grassley responds:
"The Journal Sentinel story reads more like an accounting of the Keystone Cops instead of a federal law enforcement agency," Grassley, ranking member of the Senate Judiciary Committee, said in a statement. "I'll be asking the ATF questions because if the operation was handled as badly as it was reported, it puts yet another major stain on the agency."
David Salkin unknowingly rented his building at 1220 E. Meinecke Ave. to BATFE, from which they ran their sting operation. Burglars broke into the business, ending the operation. Salkin says BATFE owes him $15,000 for damage and unpaid utility bills. The agency has refused to pay.


Post Mortem

The Group One undercover operation didn't result in arrests or convictions of major dealers and they didn't take down a gang. $35,000 in merchandise was stolen from the undercover store and a military style machine-gun is now on the streets of Milwaukee. BATFE is in embroiled in a civil lawsuit with David Salkin who says that he's owed $15,000 because of utility bills, holes in the walls, broken doors and damage from an overflowing toilet.
When the 10-month operation was shut down after the burglary, agents and Milwaukee police officers who participated in the sting cleared out the store but left behind a sensitive document that listed names, vehicles and phone numbers of undercover agents.
The sting resulted in charges being filed against about 30 people, most for low-level drug sales and gun possession counts. But agents had the wrong person in at least three cases. In one, they charged a man who was in prison - as a result of an earlier ATF case - at the time agents said he was selling drugs to them.
Were the special agents lying, careless or stupid? It looks like Congress will have the last word on that account.
Other cases reveal that the agency's operation was paying such high prices that some defendants bought guns from stores such as Gander Mountain and sold them to the agents for a quick profit. 
Why not? And back to entrapment, were the amounts that the government spent to buy the firearms so great as to entrap? If you can buy them from a store and then sell them to federal agents down the street for double or triple the money, would that lure an financially strapped person to make the deal? Should they go to prison for it?
ATF spokesman Special Agent Robert Schmidt declined to say how much the sting operation cost.
Group One budgets are usually one million dollars. It would be interesting to see how much the budgeted amount that BATFE actually spent.
Milwaukee is among 31 cities where the ATF has dedicated a Violent Crime Impact Team. The teams are supposed to target "hot spots" - small, high-crime areas - and go after the "worst of the worst" violent criminals, according to the agency's Best Practices report
The agency launched the initiative in 2004 and quickly reported "enormous" success. Agency officials touted a drop in firearm-related homicides in pilot cities and credited the $35 million effort with helping local police departments solve other crimes. 
But a U.S. Department of Justice Inspector General's report two years later found no evidence that the teams reduced firearm crimes in the targeted areas. Authors of the report cited "inadequate direction" and "ineffective oversight" by the agency. 
"We found that ATF based its analysis on insufficient data and faulty comparisons," the report stated.
No matter what happens, BATFE or any federal agency will claim success. The US Government has never been long on the truth and there is no reason to see a change of pace here.

Daniel Stiller, head of the federal defender's service in Milwaukee, said such undercover operations are rare. The case involving Gladney and Bryant suggested to him that those defendants weren't major criminals given they got guns from a store, not the street.
"I have to guess a true criminal on the streets of Milwaukee has the ability to obtain a firearm when needed from something other than a store," Stiller said.
I think that most people would agree.
The operation ran into more trouble in October, when burglars broke into the building housing Fearless and cleaned out the ATF operation. 
Late on Oct. 9, burglars made off with jewelry, clothing, auto parts, purses, Nike shoes and more, according to police reports. No one has been charged in the burglary. 
The lease states that the alarm is included in the rent. But shortly after Fearless moved in, Salkin said he told the people running the store he was cutting the phone line, which connected the alarm. He said he assumed they would hook up their own alarm. They did not. 
"You would think the ATF would know that," Salkin said.
We're clearly at the Keystone Cops level at this point in the saga.
Business owner, Salkin, said by going over on the $800 a month utility allotment and damage to walls, doors and carpeting, the ATF owes him about $15,000, which includes a month of lost rent. 
The ATF has balked, saying there was less than $3,200 in damage and telling Salkin to return the security deposit. They told him to file a claim with the federal government and warned him to stop contacting them. 
In an email to Salkin, ATF attorney Patricia Cangemi wrote, "If you continue to contact the Agents after being so advised your contacts may be construed as harassment under the law. Threats or harassment of a Federal Agent is of grave concern. Utilizing the telephone or a computer to perpetrate threats or harassment is also a serious matter."
Wow. One would think that with a million dollar budget, they could afford to clean up after the whole thing went haywire. So much for secrecy.
Turns out, the ATF has weapons stolen or loses them more frequently than the public might think, according to a 2008 report from the Office of the Inspector General with the U.S. Department of Justice. 
In a five-year span from 2002-'07, for example, 76 ATF weapons were stolen, lost or missing, according to the report. That's nearly double the number compared with the FBI and the U.S. Drug Enforcement Administration, when considering rates per 1,000 agents.
Is anyone who has read this far surprised?

If you're really interested, reading the articles that were linked at the top of this page is a good idea. I quoted from the Journal Sentinel (highlighted).

This is the same agency that created Operation Fast and Furious and the same agency that will be getting more and special powers from the President of the United States under his new firearms initiative.

I think that I may move to Mexico just to be safe from well meaning federal agents. 

On the Practice of Lying

In Mexico the army and the federal police water board everyone just to make sure that they have the story straight. (the Mexicans use a bottle of Tihuacan and a filthy rag but it's still water boarding). And while BATFE doesn't do that, they have a real bad habit of lying about damned near everything which means that nobody will trust them even when they assert ---- "we're not lying this time." The Mexicans proudly boast that they torture prisoners and they break. They don't lie about what they do...well not all the time.

The Other Side of Alien Smuggling

There has been an uncanny proliferation of Chinese buffet style eateries opening all around the United States. Curiously well over 90% are managed and staffed by people from the greater Fuzhou area of Fujian Province. 60+% of the Chinese in China town, NYC are from that area. Almost every municipality of any size, anywhere in the country has one or several of them. Ocala, FL has 6 or 7, and maybe more counting carry outs.

Curiouser still is the fact that they all speak Northern Min Dialect which is not mutually intelligible with any other Chinese Dialect. N. Min isn't known or spoken by any non Chinese on the planet, not even any missionaries, as far as I've been able to discern -- ergo, keeping tabs on them via electronic surveillance won't work.

Alien smuggling of Chinese takes place across the US/Mexico Border. In Mexico, they burrow into the La Chinescas (Chinatowns in Mexican Cities) until it's safe to cross. They use better and generally more sophisticated methods than their Latin hosts do and their numbers are swelling inside of the US. 
  • Some may be well trained espionage agents -- very capable of carrying out industrial, economic spying. 
  • There are so many of these people, and I've met some who are obviously triad or Chinese Mafia members, that I suspect there is a good percentage of these people who are involved in organized crime. The 'Snake Heads' operate human smuggling networks -- They are triad-crime syndicate connected and it has always been a tactic of Chinese government has long to use criminal elements to achieve certain nefarious goals.
The Federal Bureau of Investigation - Foreign Counter Intelligence people don't care. And many FBI Special Agents order food from the very restaurants where these Fujian people work - oblivious that the majority are de-facto slaves/indentured servants. How do I know? I've been with them when they did and they didn't know. Yes, I shared but -- the FBI doesn't care because it's not paid to care about this problem. And if they don't care, in the parlance of the FBI, it's not a problem. The only reason that I single out the FBI is because they are boastful about how well they do and the truth is that they're every bit as ignorant about this problem as everyone else is.

US Customs and Border Protection (CBP) cares to the extent that they are able. However, with tons of drugs smuggled successfully through US ports of entry  every day, the emerging automatic weapons trade from Mexico to the US, and the mundane business of collecting customs duties, a few thousand Chinese here and there don't raise much of a blip on the scope. And if they're captured, nobody can interrogate them anyway because CBP doesn't have Fjuianese linguists.

One of the foremost experts in this field is Dr. Sheldon Zhang, San Diego State University (San Diego, CA). Dr. Zhang also sits on the board of directors of the eminent Center for Asian Crime Studies, Bethesda, Maryland, Chaired by M. Cordell Hart.

Thursday, January 24, 2013

Full-Auto AK-47's for Sale

Cartel de Jalisco Nueva Generacion has been under a lot of pressure. Ruben Osegevera Cervabtes) (El Mencho) joined with Gonzalo Inzunza Insunza (Macho Prieto) to fight -- just about everyone else. Macho Prieto lost all of M1's crew to the new Arellano Felix Cartel (managed by Joaquin Guzman Loera's sons and Fernando Sanchez Arellano jointly) so he has lost control of his border plazas. 

Based on what I have heard, even though San Luis Río Colorado has fallen to the new Arellano Felix Organization, Macho Prieto still has the stroke to smuggle loads across to the US side of the fence (Yuma). That infrastructure usually involves complicit US Customs officials and sometimes ICE Agents to grease the skids. 
While there is profit in narcotics, the shelves of gun stores in America are empty and Macho Prieto will be moving many of the excess firearms that El Mencho has amassed over the past three years. Even though Nicolas Balcazar Lopez (El Bronco) remains in the custody of the PGR, awaiting trial in Mexico City, some of the weapons that his network purchased from the US Government through straw buyers (BATFE-Operation Fast and Furious) may be headed back north. If you buy something for X and you can sell it for X times twenty, it's time to sell. They're American market firearms anyway. Almost all of them are semi-automatic and not of much use to the cartels, which practice spray-and-pray tactics.

In addition to selling the US their firearms back, they are also going to be moving full-automatic AK-47's (mostly NORINCO manufacture), and magazines. They bought them from the Chinese for $3.00 per magazine and Senator Dianne Feinstein, President Obama and Vice President Biden have been bidding them up on the marketplace to $75.00 per high capacity magazine. The NORINCO AK-47's, purchased by container load for under $300.00 each will sell on the street in the USA for $8,000.00 each. It's a good business for the cartels, which have been accused of taking arms from the USA. As one cynical narco told me --  it's time to give back
It's a whole new market. In the past, selling drugs meant that the narcos needed to deal with unreliable users. The thriving arms consumption in the US is driven by "Ma and Pa" on the farm who fear their government. Dealing with generally honest people with jobs is something that Cartel de Jalisco Nueva Generacion is trying to get accustomed to, but they expect the pressure from the newly re-innaugurated President Obama to be kept up, thus the demand will only increase for new - still in the packing grease AK-47's. Sadly, there are only about 1,200 firearms sold by BATF to sell back, but the profit is there, so why not sell?

With over 300 million firearms in private hands in the US, the cartel-smuggled weapons will amount to a mere drop in the bucket in terms of numbers, but US policy is helping to keep the cartels employed. For Cartel de Jalisco Nueva Generacion, it means a lot because they have fallen on hard times and need all the help that they can get to keep the operation funded.

Rumor only: The Russians and Palestinians are both dumping container loads of SKS style weapons on the cartels to be sold to US consumers. They're effective but dated. They'll sell like hotcakes in the US.

I'm not selling or offering to sell these illegal firearms. I'm just the blogger keeping you readers updated on current trends.

Wednesday, January 23, 2013

Centro Nacional de Inteligencia (Mexico)

MEXGOV has been working on the concept of an intelligence agency embedded within another intelligence agency. If world history tells us anything, it tells us that this breeds dysfunction. Thus it is with the chains of history heralding a warning, that Centro Nacional de Inteligencia, CNI, has been launched.
There is also a Centro Nacional de Inteligencia in Madrid that supports Spanish national interests. Please don't confuse the two.
President Peña Nieto's government has attempted to craft the new CNI after the USGOV's Central Intelligence Agency (CIA), except there is almost no comparison in terms of how it's set up, it's mission or the personnel gathered to administer it.

The US Central Intelligence Agency was formed to collect information on nations outside of the United States and it's predecessor, the Office of Strategic Services was an action oriented service. Thus CIA inherited a directorate which has had several names: Clandestine Service, Directorate of Operations, Directorate of Plans, etc. The Mexican version, CNI, won't have that sort of capability because it's linked to Justice-related intelligence collection on people and organizations of interest within Mexico. Based on an American model, it would be sort of an FBI/DEA fusion center (think of a centrally located HIDTA group and you're close).

Interior Minister (Secretaría de Gobernación) Miguel Ángel Osorio Chong would disagree with me but I don't care. That's what it is and a rose by any other name is still a rose. 

The principle mission of the new National Intelligence Center (Centro Nacional de Inteligencia) will be to fight organized crime. The CIA doesn't do that to any significant degree. And what little of it they do, they do poorly because the bureaucracy is big, slow and CNC is poorly funded with many in its dedicated staff "double or triple hatted". That means that there aren't enough people to do it right.

CNI will act as a central collection point for information generated by all other intelligence and justice entities in the country, including the police, military, Attorney General's Office (Procuraduría General de la República, PGR), and other federal and state agencies -- which is specifically what the CIA doesn't do. As Osorio Chong explained, it will "work towards the necessary bringing together of all information." CNI will be structured within the Interior Ministry (Secretaría de Gobernación, Segob), and will report to the existing Mexican Center for Investigation and National Security (Centro de Investigación y Seguridad Nacional, CISEN). Thus, an intelligence agency within an intelligence agency.

CNI's targets will be principally the very smallest of the narcotics trafficking groups: Los Cabelleros Templarios, Los Zetas, what's left of the Beltran Leyva Organization and the Gulf Cartel. They are not presently tasked with targeting the Sinaloa Federation, which incorporates Cartel de Jalisco Nueva Generacion and the Arellano Felix Organization -- and traffics about 80% of the narcotics across the US/Mexico and US/Canada borders. I won't be so indelicate as to ask why it's rolling that way. If you're a cynic, you may have already come to the same conclusion that I have.

Tuesday, January 15, 2013

US Customs and Border Protection Corruption?

I have a friend, now retired, who worked for the US Customs Service and handled internal affairs for both US Customs and occasionally was called in to assist internal affairs/OPR at the Border Patrol before they were all folded into the Department of Homeland Security. He told me that one in three US Customs Officers at the US/Mexico ports of entry were on the take from drug cartels. That was about a decade ago and I would be shocked if things changed since then.

There is a general sense among the great unwashed and unenlightened (which would include yours truly) that CBP has more corruption on the US/Mexico Border than they do on Canadian ports of entry. However people are transferred (the corrupt and the honest) and the lack of scrutiny on CBP on the Canadian Border may account in some measure for vast sea of narcotics entering the US from Canada these days.

Polygraph Failure

On Thursday, 11 March 2010, in testimony before a subcommittee of the Senate Homeland Security Committee, it was disclosed that the failure rate associated with theCBP pre-employment polygraph screening program stands at 60 percent. New York Times correspondent Randal C. Archibold reports.

Over half of all US Customs Officers who took the polygraph failed. Were they terminated from employment? NO, They just went back to work.
(FOX News) A government watchdog report has identified a dramatic increase in documented corruption cases among U.S. border and immigration agents, finding nearly 150 have been arrested or indicted since 2005.  
In a trend one top lawmaker said puts national security "in jeopardy," the Government Accountability Office tracked the rise in corruption cases among Border Patrol, Customs and Border Protection, and Immigration and Customs Enforcement agents. The report, issued last month, found spotty standards in screening new applicants and keeping tabs on agents after they're hired. 
"In fiscal year 2011 alone, the DHS Inspector General received almost 900 allegations of corruption from within CBP and ICE," McCaul said.  
McCaul has long asserted the presence of Islamic extremists groups such as Hezbollah -- which has been found to be working in collaboration with Mexican cartels -- coupled with the prospect of a corrupt officer intentionally allowing these individuals into the U.S. could be catastrophic. 
"There is speculation that some applicants may have applied to work for CBP with pre-existing ties to drug cartels facilitating drug trafficking." YOU THINK SO?

With an estimated $40 billion in drugs crossing the U.S.-Mexico border annually, the battle against temptation is daunting. 

PAY for Customs and Border Patrol Agents
New agents are hired at the GL-5, GL-7 or GL-9 level depending on education and experience and are paid at a special salary rate for Federal law enforcement personnel. The base starting salary is GL-5 ($38,619), GL-7 ($43,964), and GL-9 ($49,029) grade levels, with excellent opportunity for overtime pay. (CBP.GOV)
At the princely sum of $3,200 per month, a newly minted Border Patrol Agent can wave one small load of drugs through the port of entry and make more than he makes all YEAR on the job. Corruption? WHY NOT?

Some uninformed people feel that raising the pay and required vetting (now in the works) may improve the situation at CBP. Others feel that the opportunities for corruption are just too vast.

Monday, January 14, 2013

Canadian-NY-Sinaloa Connection

Amilia Racine - Mob girlfriend
or a madona in need of a
manager now? You decide.

The City of New York is reeling with concern over who will supply their marijuana needs now that Canadian Citizen Jimmy Cournoyer (33) is in custody and headed for a long stay in the US. Not really. He's been in custody for almost a year. The trial is spinning up so USGOV is spitting out a few details of the case that the defense vigorously denies.

A friend wanted me to provide some after-the-fact coverage of this on the blog that you're reading. For more, go to

Cournoyer was a major player in West Coast Canadian hydroponic marijuana (BC Bud). He spent his money like a drunken French Canadian, on pretty women such as model/actress/companion, Amilia Racine (left); on fast cars; on yachts and on jet aircraft. He partied big with Hollywood royalty like Leonardo DiCaprio.

Amilia Racine - They never
used to make Canadians
like this. Just saying...
The US Attorney's Office believes that he trafficked about $1 billion (retail value) in BC Bud.

Amilia Racine may not be as innocent as she appears in the photographs here on this blog. Her brother, Mario, was second in command to Cournoyer according to government documents now made public.

Cournoyer supplied John Venizelos (LCN - Bonanno crime family) with marijuana products that he distributed to the needy New York City market. John Venizelos contends that he is not a drug dealer. He manages night clubs in New York City and a strip club (Crazy Horse Too) in Las Vegas, NV.

Amilia Racine - innocent victim?
The Hells Angels moved the marijuana from British Colombia to Eastern Canada and from there into New York State. Cournoyer, ever the entrepreneur, also used marijuana profits to purchase cocaine (for distribution in New York) from the Sinaloa Federation (Mexican drug cartel). Then again, it might just be a bad misunderstanding. Cournoyer and friends (including the lovely Amilia) may be innocent of the charges laid against them.
Jimmy Cournoyer’s lawyer, Gerald McMahon, promises a vigorous court battle. Venizelos’ lawyer, John Meringolo insisted that $100,000-plus found in his house by DEA agents isn’t drug cash. (
Since the embarrassment suffered by Joaquin Guzman Loera (El Chapo), who'd allegedly been supplying Cournoyer from his Canadian cocaine supply, he's vetting his suppliers more carefully. If you're driving around in a Bugati Veyron, Chapo will have his competitors sell to you...

Gun Smuggling from Mexico to the US

Rev. Jesse Jackson (Famous American racial advocate) recently suggested on MSNBC that the 500+ murders in Chicago in 2012 were attributable to firearms smuggled 1,300 miles from Mexico to the Windy City.
Rev. Jackson: "These guns come from the suburbs and from Mexico." The advocates of gun control keep ranting about firearms being shipped wantonly from the US to Mexico.*
*While it has always been debatable how many of Mexico's weapons come from America, we do know that well over 2,000 were delivered to the drug cartels courtesy of the US Department of Justice through Operation Fast & Furious and that those firearms were the source of over 300 deaths in Mexico.

Officially, Mexico's homicide rate in 2008 was 2.4 times greater than that of the US.** Brazil's homicide rate is 4.2 times greater. However, those statistics are artificially lowered for the sake of reporting, because the real numbers would be shocking and would deter tourism. The body count from President Calderon's war on drugs that everybody in Mexico knows to have been an abject failure, is now estimated at 120,000. That's a far different number than the artificially low "official" number - 50,000.
**The homicide rates as reported in the 2011 Global Study on Homicide, conducted by the United Nations Office on Drugs and Crime shows that the latest reportable numbers come from 2008.
However, there is cause for hope and change that will improve the Mexican economy yet again. Because of soaring firearms prices in the US due in large part to efforts by both President Obama and Vice President Biden to promote a 'run on firearms' in stores, many cartels are planning to ship firearms north. There is a market in the US now that was not there in the past. Both Los Caballeros Templarios and Cartel de Jalisco Nueva Generacion are in the process of buying more firearms from sources in the former Soviet Union and China principally with the intent to satisfy the demand generated by President Obama's policies.

Even though many Americans feel that tougher laws will prevent smuggling, the tough laws now in place don't stop thousands of TONS of methamphetamine and cocaine from being shipped from Mexico into the US today. If you can ship a ton of meth, you can ship a ton of AK-47's. Where many Americans would not purchase drugs, the lure of inexpensive (compared to prevailing rates in gun stores) firearms and 7.62x39 ammunition opens up an entirely new market.

The US could solve this budding problem by not artificially increasing the 'street price' of firearms, but the Obama Administration doesn't see it that way. Their concept of "gun free zones" is backfiring with unintended consequences. 

Sunday, January 13, 2013

Minarets in Mexico

Eid al-Fitr celebrated in Mexico City
Over five million Arab and Persian Muslims currently live in Europe, a continent of 740 Million people. And it's interesting that in Germany there are more kabob shops than there are establishments serving wienerschnitzel. Or so it would appear. South America alone has over twenty Million Arab and Persian Muslims (and a few Berbers), most of whom are generally assimilated. (

The Arab Muslims in Europe seem to be more angry and agitated than their more bucolic cousins in Mexico and further south in "the Southern Cone".

Torres y Minarete de Agua Caliente
(Tijuana, BC, Mexico)
There are Arab Muslims who support the weapons needs of the cartels. Walid Hassan comes to mind, the arms merchant who provides AK-47's and RPG rockets and rocket launchers to Cártel de Jalisco Nueva Generación. However, Walid is the exception, not the rule.

Most Mexicans simply don't like Muslim people who are not assimilated into the culture and they are not bound by the US obsession with political correctness. So Muslims either find themselves going along to get along, or they're 'moved along'. Other than the sleeper cells placed by unfriendly governments in Mexico with an eye toward causing harm to the US, neighbor to the north, most Muslims - to include Middle Eastern people in general, who settle there want to get away from the turmoil at home.

Sunday, January 6, 2013

La Resistencia (Cárteles Unidos)

Juan Carlos Nava Valencia
Cárteles Unidos took a fairly big hit when  the Mexican Federal Police arrested Victor Manuel Torres Garcia (El Papirrin) in Michoacán almost two years ago now. At that time there were two branches of Cárteles Unidos. Victor Torres ran one branch and Juan Carlos Nava Valencia (El Tigre) ran the other. When the federal police arrested Ramiro Pozos Gonzales (El Molca) last September, it left Juan Carlos Nava in command.* 

*His brother, Oscar Orlando Nava Valencia (El Lobo) has been in US Custody in Texas for some time now.
Citizens of this municipality, you are notified that from 
this day forward los Caballeros Templarios are present in 
Jose Azueta (Zihuatanejo)... Establishing the people's order 
and tranquility. "Thank you"
The Apatzingan Plaza was disrupted by arrests two years ago, but the disruption was only temporary and cooperative efforts between Los Caballeros Templarios (LCT) and La Resistencia/Cárteles Unidos got the plaza back on its feet quickly. At the time the LCT methamphetamine output was significant enough that they needed Cárteles Unidos to move at least a portion of it into the United States. 

Cárteles Unidos had/have clandestine methamphetamine laboratories of their own but arrests of leadership both in LCT/LFM and the occasional raid on labs that are not paying off sufficiently to the police (or are denounced by rival drug kingpins to the police/army) caused the cartels to cooperate in trafficking across Mexico and into the United States. Both cartels have significant holdings in Avocados and produce in the same region and worked together through the US Customs/CTPAT route discussed before on this blog.

Today La Resistencia exists because their methamphetamine labs and their distribution routes inside the US still exist. It's an odd mix of different cartels including the Millennium Cartel/Valencia Cartel and an assortment of outcasts from the Sinaloa Federation. With the leadership on the ropes, they have dropped below the radar to rebuild. Never fear, there are other actors in Mexico for MEXGOV and their American cousins to focus on. But they're not gone.

Victor Manuel Torres Garcia currently awaits his fate, wondering whether or not he'll do the rest of his life in a Mexican prison or a prison in the United States. The future is not bright, Victor.

Wednesday, January 2, 2013

FARC - In Mexico and Beyond

Not JUST in Colombia
Fuerzas Armadas Revolucionarias de Colombia—Ejército del Pueblo (FARC-EP) and Coordinadora Continental Bolivariana (CCB) are stashing currency in Mexico these days. When you consider how many check points there are manned by the Federal Police, SEDENA, SEMAR and other Mexican State and Local Police entities that search diligently for such as currency, it would seem improbable, but it's true.

This is NOT money laundering. It's currency storage for contingency operations. Reliably, the FARC stash in Tijuana consists of $200 million in old US $100 bills (called Pequeños Franklin) The currency is buried in Pelican 1640 Cases  with dehumidification modules introduced before the cases were sealed air-tight. As I understand it CCB's currency stash in Northern Mexico is located in Ensenada and is no more than $30 million. Though I'm not completely confident of that number.

Once buried, they are exceptionally reluctant to touch the money because it represents flexibility in the future when times get bad. 2012 was not kind to FARC and most of their charismatic leadership was arrested or killed. However, when you understand how these things work in the real world, the organization persists in very much the same way as a cancer in remission.
Examples of this persistence can be found with the Arellano Felix Cartel, pronounced dead by AUSA Laura Duffy so that she could get the promotion to US Attorney-Southern District of California -- and they disbanded the AFO Task Force. It's just as bad as Presidente Calderon pronouncing La Familia Michoacan (LFM) Finished in 2011 -- and today they control Michoacan, Gurrero, Colima and much of Southern Jalisco (reorganized as Los Caballeros Templarios (LCT).
Future Leaders of FARC

While it is true that FARC is essentially a group of peasants who are not content with their treatment by the Colombian government, it doesn't mean that they are stupid nor that their children are stupid. Children are the future of the world and the bright and promising ones in FARC receive scholarships and travel to Ivy League schools in the US, elite schools in Europe and the better schools in Brazil and Mexico where they learn how to run businesses at the feet of the great and near great. 

Regus Office Building, Reforma, DF, Mexico
Guillermo León Sáenz Vargas (aka Alfonso Cano), killed in 2011, was an educated man and came to Marx and FARC from the University of Colombia. He was one of the most important men in FARC and when the Colombian Army killed him, President Juan Manuel Santos declared that it crippled FARC - maybe for good. While it's true that Sáenz had been killed, the seeds that he sewed internationally remain invisible to this day. 

FARC is not only peasants with AK-47's in the Colombian mountains. It (the seeds of Sáenz) sit behind mahogany desks in high-back leather chairs in high rise offices in Panama City, San Diego, Mexico City, New York and Rio, encased in glass. Their walls are graced with law and finance degrees from the finest learning institutions in the world. Sometimes they return to Colombia, having been "washed" internationally and with their credentials from Goldman Sachs, Halliburton, Citi, and JP Morgan, they are seated at the top of Colombian government as decision makers.

These children of Sáenz may not share his Marxist fever, but they understand money and that is the underpinning of all governments, businesses and movements.

Tuesday, January 1, 2013

USGOV loves to lecture MEXGOV

As an example of USGOV problem solving expertise, the only thing that we need to examine in any depth is the proposed tax hike, as a response to the so-called fiscal cliff that they've tumbled over as of January 1, 2013.

MEXGOV officials should take note of this when the USGOV is lecturing them on why things don't work very well in Mexico. The US has borrowed US$16 trillion and don't have any functional way to pay off the debt.

Even all the money generated annually by narcotics sales in the US wouldn't begin to put a dent into the debt picture that the US faces. (yes, Europe is worse off and China is in trouble)

All of the high-handed platitudes handed down from USGOV officials are rendered moot by their decision making and implementing expertise when it comes to their national finances.

In Mexico everyone is required to pay something in national tax. In the US, apparently only half of its citizens pay tax -- the other half don't -- which would seem to me to be a vote buying scheme (but nobody asked me). What do I know? Due to its importance to the Mexican national economy, the maquila industry has two important presidential decrees that directly stimulate this sector by decreasing the tax rate to 17.5% of its taxable income. This maximum rate of 17.5% covers both the income tax and business flat tax.