Poaching military soldiers in Mexico

A Mexican judge ordered to prison a retired Mexican Army First Captain for ties to the Beltran Leyva organization. The Captain was accused of organized crime, drug offenses, and conspiracy, and, more interestingly, was found to be guilty of "enabling" active and retired soldiers to act as hired assassins and bodyguards.

There had long been talk of the revolving door between the rank and file of the Mexican military and organized crime. This is the first case I've seen of a middle-management military officer actively recruiting from his own rolodex for Mexican organized crime.

Ideally, this case will dissuade others from doing the same, but it's hard to deny the economic incentive offered by organized crime versus the salary paid, often late, by the Mexican government.

Sino-Brazilian Naval relations

The Chief of Staff of the Japanese Maritime Self Defense Force recently met with Chinese Defense Minister Liang Guianglie in Ningbo, Zhejiang province, China to review China's East Fleet.

Many analysts agree that Naval control over the waters of East Asia will again become a contest (as it was during WWII) as China's Navy, known as the PLAN, continues its rapid development.

Japan, especially is worried, as is the United States.

But what I find more interesting is Brazil's role in China's naval development.

Below, my research assistant Kelsey Price, has prepared a backgrounder on Sino-Brazilian naval relations, including Brazil's offer to train the Chinese on the use of aircraft carriers - something the PLAN has yet to deploy.

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As China attempts to solidify its place as an emerging world power, its leaders have placed more emphasis on building a stronger navy. At the forefront of this naval initiative is the construction of, and training for, China’s first aircraft carrier. Russia has sold China its former carrier Varyag (renamed the Shi Lang), and China has been slowly updating the craft since its docking at a Chinese shipyard in 2002. Analysts conclude that China’s navy, or PLAN, may use the ship for training and as a base for the construction of two of its own carriers.

Brazil is looking for international significance as well, so when PLAN turned to Brazil’s aircraft carrier-trained crew to train China’s navy, the Latin American power agreed to invite Chinese naval personnel aboard the Sao Paolo, Brazil’s only aircraft carrier. While the two BRIC nations—part of a group with Russia and India—both benefit from the military favor, China had very few choices. Brazil is one of only four nations to maintain an aircraft carrier capable of launching and recovering conventional aircraft, and the only one willing or able to train PLAN personnel. The United States has little interest in training the navy of a country it sees as a potential threat; EU law prohibits France from helping; and China’s relationship with Russia is hampered by an intellectual property dispute over Chinese fighter aircraft.

China clearly benefits from the naval training, but Brazil’s reward for helping China is less material than political. Brazil strengthens its reputation as a global force, especially when it assists a country as powerful as China. It also establishes stronger relations between the two countries, which formerly concentrated on economic ties and shared inclusion in the emerging BRIC nations.

Brazil and China’s other BRIC partners—India specifically—have expressed concern over PLAN’s technological advancement. India has declared China to be its “biggest threat.” China’s Major General Qian Lihua, director of the ministry’s Foreign Affairs office, assured, “Even if one day we have an aircraft carrier, unlike another country, we will not use it to pursue global deployment or global reach.” China’s President Hu Jintao also claimed that he did not seek regional hegemony or an arms race; rather, China would use its navy to pursue international cooperation in peacekeeping and anti-piracy enforcement.

The United States suspects other motives. A US Congressional Report for the People in May suggested that China may plan to use its improved navy to create conflict with Taiwan, and perhaps to prevent US intervention in the dispute. China may also use its threatening aircraft carrier to assert itself in the region, especially regarding its claims in territorial and freedom of navigation disputes. Its strengthened place as a world power may also convince other countries to align its policies with China, and displace US influence in the region. These concerns have prompted the US navy to pursue increased monitoring of China’s actions and to send more personnel to the Pacific.

Bates Gill, director of the Stockholm International Peace Research Institute, considers the very display of China’s navy a non-verbal threat to other countries. PLAN celebrated its 60th anniversary by including 52 navy vessels and aircraft in maneuvers off the eastern port of Qingdao in April. "Showing what you have can always also act as a deterrent - that's how it's seen in the US," said Mr Gill. "When the US navy takes an aircraft carrier to Hong Kong, it also tells the Chinese, have a look, you don't want to confront this."

Brazil and China’s rise in international influence—and displacement of US influence—is expedited by a visibly strong navy, and the partnership forming between the two nations suggests the emergence of a strong BRIC allegiance without the sway of the United States.

Notes:

“Beijing’s aircraft carrier will convert Asian oceans into Chinese lakes.” 28 May, 2009. Rupee News delivered by Newstex.

Farley, Robert. “The New China-Brazil axis.” 27 May 2009. The Progressive Realist.

“Brazil/China consolidate energy, trade and finance partnership.” 19 May, 2009. South Atlantic news agency MercoPress.

Ansari, Moin. “BRIC-battered: The growing Brazil china axis and fraying Indo-Russia deals.” 27 May, 2009. Rupee News.

“China has aircraft carrier hopes.” 17 November 2008. BBC.

Hille, Katherin. “China’s show of sea power challenges US.” 24 April 2009. The Financial Times.

“China Naval Modernization: Implications for U.S. Navy Capabilities -- Background and Issues for Congress.” 29 May 2009. Open CRS, Congressional Report for the People.

See “China’s show of sea power challenges US,” Financial Times.

Iranian embassy hoax?

This is just a quick post to point out a Washington Post article about the Iranian embassy in Nicaragua, or lack thereof...

Apparently this "embassy" is a rented house where the Iranian Ambassador lives with his wife, hardly the behemoth that housed 150 Iranian agents...

Now, back to the MS-13 blog...

An example of criminal branding?

Today, I came across an article that appears to be an example of criminal branding.

As I've talked about before, criminal branding is an effective way for small-time crime group to leverage the fear factor already earned by larger groups.

This example is one where kidnappers claim to be a member of Los Zetas.

The story in the El Paso Times notes:

"Three of the suspects seemed to be younger than typically hardened Zetas, who often are former soldiers and ex-police officers."

It is possible that these guys were members of Los Zetas, in a way part of the organization's evolution.

It's also possible that these guys operate with the permission of Los Zetas, and have been told that if they are caught, that they should tell the police and press that they are Zetas, which expands the perception of this group's presence across Mexico.

TFMS book trailer no. 2

Southern Pulse Intel Brief - wk of 29 June

The week of 29 June 2009 saw two very interesting developments in Mexico, with the continuation of a third very important economic indicator.

First, remittances from the United States to Mexico continue to drop. In the first six months of 2009, we have seen remittances drop by 19.9%, compared to the first half of 2008. This decline represents some US$1.9 billion dollars.

A new vigilante group has emerged. The “Mata Zetas” is one of the latest of the so-called splinter groups we’ve seen surface. At the end of June, when police discovered three bodies in Cancun, they also discovered a note that read: “We are the new group, Mata Zetas, and we are against kidnapping and extortion and we are going to fight against them in all of the state for a cleaner Mexico."

Just a few days later, police arrested eleven members of a separate splinter group known as “La Contra”. Mexican authorities suspect this group has formed to fill gaps opened by arrested members of the Los Zetas and La Familia.

Analysis:

After petroleum exports, remittances make up the largest source of foreign currency in Mexico. And from January to April, total remittances added up to US$7.3 million. This number continues to drop as a direct function of the economy. Indirect effects, however, may be seen in Mexico, where individuals who relied on these remittances have little option but to turn to organized crime to pay the bills.

Consider three converging realities. Last year, 17,772 minors were deported from the United States to Mexico. It is likely that many of them landed in a crime-controlled municipality. Between 60 and 65% percent of all Mexican municipalities suffer from organized crime infiltration. This adds up to about 1,500 cities.

Finally, there are a reported 980 zones of impunity across the country. Also called “criminal enclaves” the political leadership is either directly involved in organized crime, or is somehow compromised.

We’re not surprised by the presence of La Contra and Mata Zetas. We expect more such groups to surface before the end of the year.

Cross-posted with Southern Pulse blog, Networked Intelligence

Brazil, Russia, and Turkey - energy backgrounder

On 10 June, ISN published a piece I prepared on Brazil and Turkey. Entitled, "Petrobras Empowers Turkey", this commentary focused on Lula's recent trip to this promising country and the energy deals sealed between Petrobras and its Turkish counterpart, TPAO.

In the piece, I discussed briefly how Turkey and Russia compete for dominance in the EU energy markets - Russia by providing natural gas through its own pipelines, and Turkey by developing its own energy supply for sale and, more importantly, by allowing others to lay pipe across Turkey to access EU markets.

But this topic deserves more attention and explanation.

My research assistant, Kelsey Price, has prepared a Russian energy backgrounder that expands upon Russia's role as an energy supplier for the EU as well as Turkey's budding presence in regional energy markets.

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Russia’s immense supply of natural gas gives Moscow a significant hold over its foreign consumers, especially the European Union, which received over a quarter of its gas supplies from Russian gas company Gazprom in 2004. Disputes over pricing with third party countries have, in the past, cut off large portions of Europe’s energy supply, and despite the EU’s pleas with the Russian state Duma to open its gas line monopoly, the Duma has reinforced Gazprom’s power by giving it “exclusive right to export of gas” in 2006.

Recently, Russia expanded its influence, promising large-scale projects in southeastern Europe: the ambitious South Stream pipeline, for one, would help Europe diversify its energy supplies at least among the various Gazprom lines. Russia has also promised to build a power plant in Bulgaria, create a Central European gas hub, and finance various storage facilities, all to court skeptical countries into supporting the South Stream.

However, Russia’s strategy lies solely in its willingness to make generous concessions to European partners that outweigh the disadvantages of foregoing energy diversification. This strategy may have seemed feasible at one time, considering Russia’s success during formerly high gas prices. Now that gas prices have dropped and the global recession has taken its toll (Russia saw a 9.5% contraction in its economy during 1Q09) funding for these projects may disappear. Moscow’s European partners are happy with promises for now, but Gazprom’s controversial Russia-to Germany project Nord Stream has already needed to request an increase in its credit guarantee by about 1 billion euros. Once the gas giant has to begin cutting back on its projects, Russia may have to delay or retract some of its hefty promises.

Financial problems may also affect Russia’s energy supply; the Energy Ministry reported on June 18 that most new oil projects in Russia would not be profitable even with gas at $150 a barrel. Without government incentives for new fields, such as lower export tariffs and a laxer taxation system, Russian oil companies will produce 40 million tons less oil in 2013 than they did this past year, the ministry said. While the ministry is attempting to make oil companies more profitable, this drop in confidence in Russia’s energy supply may also drive European countries and other gas importers to work harder to diversify their suppliers.

Russia has also been known to restrict its gas supply as leverage in payment skirmishes. In January 2006, Russia decreased the amount of gas sent to the Ukrainian pipeline because of a drawn-out pricing dispute; this pipeline brought gas not only to Ukraine, but to Western Europe as well, and countries like Germany, Italy and the Czech Republic saw drastic reductions in their energy supply. Russia and Ukraine signed a treaty four days later, but the dispute demonstrated Russia’s strong influence in energy and its powerful “negotiating” tactics.

In October 2007, Russia threatened to cut off power to Ukraine once again because of unpaid debt. While Gazprom assured Europe that its consumers would not experience any decrease in energy supply, the European Commission still called for a swift resolution in the dispute, still wary of Russia’s hold over the region. While Ukraine’s deputy prime minister repaid the debt, Gazprom claimed that the overall issue was not over. “Gazprom is a reliable supplier of energy resources, but we cannot and should not deliver gas without payment,” said Gazprom spokesman Sergei Kupriyanov after the March 2008 repayment.

At the end of 2008, Ukraine owed Gazprom over $1 billion, and on January 7 Russian Prime Minister Putin ordered a halt on all gas sent through Ukrainian pipelines on accusations that Kiev had been siphoning off energy and disrupting the flow to Europe. At least eighteen countries reported significantly less pressure in pipelines, especially Bulgaria, Moldova and Slovakia. After Europe suffered gas shortages during a subzero winter, on January 18 Russia restored gas supplies and began demanding that Ukraine pay European prices, not its previously discounted post-Soviet prices.

The gas crisis caused even more concern than before for European consumers, who lost confidence in Russia and Ukraine as reliable gas suppliers and business partners.

Russia’s influence over Europe as a major supplier also faces some challenges from an empowered Turkey. Various companies other than Gazprom have offered Turkey the opportunity to become a European energy hub, mostly through the U.S.-backed Nabucco line. The 3,300-km pipeline from Azerbaijan would help European countries diversify their energy options, and some say it is more cost-efficient than Gazprom’s proposed South Stream project. The Nabucco project would violate Turkey’s prior support of the central Iraqi government’s exclusive right to export oil from the country, as Turkey has been a key ally in Iraqi centralization. However, Turkey would become the energy hub for Europe if Nabucco succeeds over South Stream, giving it some needed influence in the continent—Turkey is still bidding for a spot in the EU, despite opposition from France’s Sarkozy and Germany’s Merkel.

Russia has blocked Turkey’s influence in the past, however, striking deals with Kazakhstan and Turkmenistan in 2007 that drew exports away from the Nabucco line. Also, Russia and Gazprom have remained confident in gas sales to Europe despite decreased exports to the region and a group of oil fields deemed unprofitable. Gazprom’s market share in Europe and Turkey dropped from 30 percent last summer to just 16 percent in the first quarter, in part because Russian contracts held prices that were set at the record-high levels of six to nine months ago. Medvedev reassured reporters at a news conference, “this can be seen as a shift in demand from an earlier period. That’s why we, at Gazprom, don’t see any reason for panic and pessimism.”

Sources/Notes:

Bogle, Sally. “EU Countries Glimpse Consequences of Future Dependence on Russian Gas-as Pricing Dispute with Ukraine Cuts Import Flows.” Global Insight, 3 January, 2006.

Buck, Tobias and Buckley, Neil. “Duma votes for Russian gas export monopoly.” Financial Times, 16 June 2006.

For environmental and security reasons: http://tinyurl.com/mmoptk

Koutsarov, Ivan. “Economic crisis threatens Russian projects in Southeastern Europe.” Global Insight, 27 May 2009.

Malkova, Irina. “Most oil projects may not be profitable.” The Moscow Times, 18 June 2009.

“Russia cuts off gas supply to Ukraine.” The New York Times, 1 January 2006.

“Gazprom cuts Ukrainian gas supply.” BBC News, 3 March 2008.

“Factbox- 18 countries affected by Russia-Ukraine gas row.” Reuters, 7 January 2009.

Solovyov, Dmitry and Ferris-Rotman, Amie. “Russia and Ukraine aim to sign gas deal on Monday.” Reuters, 18 January 2009.

Ciszuk, Samuel. “OMV, MOL, Crescent Attempt to Bring Iraqi Kurdistan Gas Through Nabucco to Europe.” Global Insight, 18 May 2009.

Ü.S. throws weight behind EU’s Nabucco pipeline.” Reuters, 22 February 2008.

Schleifer, Yigal. “Questions cloud Turkish-EU energy cooperation.” EurasiaNet, through ISN. 13 June 2007.

Medetsky, Anatoly. “Gazprom sees no reason for ‘panic.’” The Moscow Times, 25 June 2009.

Desperation Route - investigative series on the border

In March, I traveled to Arizona and Sonora to research a series on border culture for the International Relations and Security Network.

We've completed the piece, christened Desperation Route, and it is now available on the ISN Special Reports site.

There are four parts: Drugs and Vengeance; Armed for Corruption; Getting Across; and, Meeting the Smugglers. Each piece is a stand alone but considered a four-part investigation.

Thank you to the editors at ISN for your hard work!

Now, back to the MS-13 blog...

Moving over to my book blog...

I'm moving posts over to my book blog, focused on the MS-13, immigration, deportation, with additional information on radio interviews, book tour dates and locations, and news of reviews, coverage, etc.

Starting tomorrow, July 7, the blog will be accessible via the official website of This is for the Mara Salvatrucha.

Relevant posts will be cross-posted here, but I don't expect to be back to regular posting for a few weeks, at the least.

Thanks!
Sam

PS - I wanted to thank John Robb at Global Guerrillas for mentioning my book on his GG news blog post on the 2nd of July. Cheers, John!

Zeta and Gulf Cartel Relationship Revealed

An interesting piece from Jeremy Roebuck in The Monitor about the relationship between the Zetas and the Gulf Cartel.

This is information based on court documents.

And a few interesting paragraphs follow below:

"The extradition of alleged former Gulf Cartel chief Osiel Cárdenas Guillén from Mexico in 2006 set off a leadership crisis within the organization...

In Cárdenas' absence, three leaders have emerged to helm the drug trafficking organization, the June 9 indictment states. His brother - Antonio Ezequiel "Tony Tormenta" Cárdenas Guillén , 47 - took the reins after his sibling's arrest along with fellow cartel leader 37-year-old Jorge Eduardo "El Coss" Costilla Sánchez, federal investigators say. Zeta commander Heriberto "Lazca" Lazcano Lazcano, 34 - a founding member of the paramilitary group believed to be one of its most violent members - also took on a prominent role.

...[The] triumvirate comes together to decide matters ranging from payments owed to plaza bosses to the price The Company will charge for its drugs, U.S. federal authorities say."

As Mexican DTOs go, cooperation never a lasts. A showdown between the Gulf Cartel and the Zetas could very likely spark another round of violence - one that possibly would play out in a number of cities across the US where the Zetas and the Gulf Cartel work in tandem - Dallas, Houston, New Orleans, Atlanta, Charlotte, Baltimore to name only a few...

Finally, here's a map of where the Gulf Cartel operates in the US (a little dated), but it gives you an idea of where some of the violence in the US could happen if the Zetas and Gulf Cartel alliance ruptures.

UN cocaine numbers (partial) breakdown

I'm still catching up on posts and information. I'm putting this up today, echoing what Adam Isacson has already posted with a much more thorough review.

Breakdown on latest UN drug trafficking numbers:

70% of the world's cocaine supply is transported through Mexican territory.

In 2007, 48,168 tons of cocaine were seized in Mexico (7% of the world total).

The first place was taken by Colombia with 195,135 tons (27 % of total) and USA second with 147,804 tons (21%).

A total of 994,000 tons of cocaine were produced in 2007, and 41% was seized.

The prevalence of cocaine use increased from 1.5% in 1998 to 2.5% in 2008 among people between 12 and 65 years of age.

Nonetheless, the majority of cocaine, 17.8%, is consumed in the USA.

Saudi Arabia is the principal country with global methamphetamine seizures, with 32% of the total seizures while in Mexico only 2% occur.

Brazil: A fiscal paradise?

This is just a quick post to share some interesting information on Brazil and money laundering.

The OECD is pressuring Brazil to sign on to its Global Forum on Transparency and Information Exchange regime, branded as a "Partnership Against Corruption."

For most of his presidency, Lula has spoken out against so-called "fiscal paradise" countries around the world, where financial controls and laws governing money movement are both relaxed enough to invite would-be money laundering organizations to take residence.

Brazil has done it's fair share of anti-money laundering efforts, but it appears that in the eyes of the OECD, Brazil is still just another money laundering hub in Latin America. I would imagine that Brazil has opted not to join the OECD's club simply because under Lula's leadership, the country still has some affinity for the non-aligned movement, which would preclude any membership in such "aligned" organizations.

And perhaps more to the point, Brazil doesn't like to join a group that will tell it what to do, unless, of course, Brazil is at the head of the table, such as UNASUR.