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Up in smoke

This week, Mexico killed one of its most powerful drug king-pins, Arturo Beltran Leyva, aka the "boss of bosses." Just back from a rare embed with the country's anti-narcotic squad, GlobalPost's Ioan Grillo talks about how President Calderon's drug war is affecting Mexico.


Mexican soldiers in Cuernavaca detain a man during an operation in which kingpin Arturo Beltran Leyva was killed. (Photo by Reuters.)



Editor's note: the play button will work after the audio loads. This may take a minute or two.

Below is the transcript of the Correspondent Call with Ioan Grillo. 


Passport: Good afternoon and welcome to the Passport Correspondent Call. I’m David Case, Editor of Passport in GlobalPost’s Boston newsroom. It’s Thursday Dec. 17. Today we’ll be talking with Ioan Grillo, our Mexico correspondent, about Mexico’s on-going and brutal drug war. Grillo has been covering Mexico since 2001 for Time magazine, the Houston Chronicle and the AP. He has produced TV documentaries for PBS and Britain’s Channel 4 and today he has the lead story on GlobalPost’s website. He specializes in organized crime, one of the most thriving sectors in Mexico’s otherwise more abundant economy. And he just returned from an embed with Mexico’s narcotics forces, where he witnessed them at work attempting to rid the country of cocaine and marijuana. He joins us today from Mexico City. Good afternoon Ioan.


Ioan Grillo: Good afternoon David.


Passport: Before we begin, please remember that the call is being recorded on Passport’s website. As usual, I’m going to lead a Q and A that will last about 20 minutes or so. If you’d like to ask a follow-up question on the topic we’re discussing, please feel free to jump in. Your lines are now muted. To un-mute yourself before you speak, press *6. We ask that you identify yourself and be mindful of the time. And we will also have about 5 or 10 minutes at the end for unrelated questions.


Now, Ioan, we had some big news out of Mexico yesterday. Security forces tracked down and killed Arturo Beltran Leyva the so-called “Boss of Bosses,” he’s one of the most powerful cartel kingpins. Can you tell us briefly what happened and why this will matter in the grander scheme of the war on drugs in Mexico?


Grillo: Sure. Arturo Beltran Leyva, as you say, is one of the key drug traffickers in Mexico. He’s a guy from the state of Sinaloa, which is the state we visited with the military. It’s a place a bit like Sicily to the Italian mafia. Sinaloa is like that to the Mexican drug cartel, it’s the place where many of the big bosses come from and where the organizations operate out of. He’s a major player in this conflict and a major trafficker of cocaine known from Colombia up to the United States. And he was tracked down to a house in Cuernavaca, which is kind of a holiday resort, kind of spa outside of Mexico City where a lot of the wealthy from Mexico City used to go to get away from the city for a while. He’d been living there for several years, and operating out of there, and it is a bit lower there in terms of violence and so forth. The military tracked him down there – the marines and some regular army units – and some of his gun men appeared to attack the units, so there was a shoot-out which lasted about five hours in the city. The military entered an entire apartment complex, searched everyone, and tracked him down to this one apartment. The military say he chose not to surrender, he chose to try to shoot it out. We have to verify if that’s the case, if they gave him any options to surrender, owing to the shoot to kill policy. So they went in there and after this shoot-out for five hours, they killed him. And that’s a big deal because when you get a major kingpin like that going down, that causes ripples all across the drug world. President Felipe Calderon is over in Copenhagen right now for the climate talks, but in a message this morning, hailed it a great victory, saying we’re all in this fight, we’re winning this fight. But there’ll be questions about these kinds of deaths, what they really mean, if you’re winning or just other people are going to take control. A theory is that one of his top lieutenants was a violent hitman called Edgar Villarreal who’s been behind some very violent snuff videos to terrorize other cartels. And if he takes control of the organization, that could have some serious implications with more bloodshed rather than less.



Passport: And are we likely to see violence in the coming weeks as people vie for taking over the “Boss of Bosses” position?



Grillo: That’s a good possibility that we could see in the coming weeks or the coming days. There could well be immediate revenge attacks by members of the organization against the armed forces and the rival cartel, who they accuse of working with the armed forces. Also, we could see more attacks on the same organization as the military and the rival cartels see them as now being weak. So, they’re weak now, let’s finish them off. They’ve killed the head, they’ll kill some parts of the body as well.



Passport: Ioan, let’s talk about some of the work you’ve been doing regarding the drug cartels in Mexico over recent years.



Grillo: Sure. Well, I’ve been here, like you said, since 2001, and I’ve been following the issue of drug cartels since then. It’s intensified much of my research since 2008 when the issue became much bigger. I mean, the number of killings back in 2003, 2004, you used to get one and a half thousand killings in a year, which seemed like a big deal then last year, you got more than 6,000, this year you got more than 7,000. So now the issue is really starting to worry Mexico and gain attention internationally because of the violence. Now, the work I’ve been doing, as well as writing for the different news organizations and agencies, I’ve been doing some longer documentaries, like one thirty-minute piece that ran on Channel 4 in the UK and started to write a book that will be published next year by Bloomsbury about this issue. And doing that kind of work, I’ve tried to get beyond the regular news stories and go deeper into the issue, including all kinds of players in the situation. From low-level drug traffickers, which are fighting in prisons, in drug rehab centers, to looking into big drug trafficking figures, to all kinds of lawyers, grassroots soldiers, to all kinds of people, really trying to understand what’s happening in Mexico and what this really means to Mexico and to the wider world.



Passport: So why have the drug cartels become such a major problem? The violence really picked up as Felipe Calderon became President. Isn’t that the case?



Grillo: That is the case. Drug cartels have obviously been operating in Mexico for a long time. Now I see three things that have happened in recent years that have made Mexican drug cartels more powerful and unleash more violence. The first thing is the Mexican drug cartels have become bigger and more powerful, getting a bigger share of the international drug market. Now, what that means is that if you went back to the 80s, for example, the Colombians were the big cartels back then, everyone talks about Pablo Escobar, and they were producing cocaine and taking it into the U.S. via Miami and we saw the kind of violence in Miami that was like in movies like “Scarface”. And basically, the Colombians got weakened, often with attacks by the Colombian and U.S. military and then the death of Pablo Escobar and various arrests and extraditions, and they got weakened and the Mexican cartels moved more and more to actually traffic the cocaine and instead of working for the Colombians, the Colombians were working for them. So they got much more of the share of the cocaine moving from Colombia to the United States. And at the same time, the Mexicans were actually getting deeper inside in the United States, so they were sorted inside the Drug Enforcement Agency so it was very clear that where as before they would be happy to move a ton of drugs onto the border on the United States and they were done with it, they now have distribution networks right down to the kilo level of cocaine or to the pound level of marijuana inside the United States. So they’re deeper. And you see Mexican cartels operating in U.S. cities like Atlanta, New York, Los Angeles, and right across into the United States, (indecipherable) and once it breaks down to the street level, all kinds of people are involved. So you see the Mexican cartels gaining much more share of this market. A second thing is, you have in Mexico the end of this one-party system, whereas before in Mexico there was a one-party system controlling Mexico through the police forces, through the army, it was much more centralized. You have a deeper relationship and that has made things much more unstable in a situation where the cartels can become more powerful in that situation. And the third thing, you’ve actually got a lot of Mexicans themselves start to use heroin and crack cocaine and these kinds of hard drugs and  a lot of street crawlers and in the Mexican cities, we've seen the same kind of crack-related, heroin-related violence that you saw in the United States cities back in the 80s.  



Passport: That's very interesting. So it's partly the democratic system, it's partly the whack-a-mole situation that the U.S. military likes to say that the Colombian cartels were cracked down upon and the business moving to Mexico. Talk about the operation that you covered with the military operation last week that's the subject of our GlobalPost lead story today. 



Grillo: I've been covering and following the military and law agents for some time in Mexico and they agreed to let us have a bit of a closer look at their operations and these are rare opportunities. They don't like to have reporters and video cameras too close to what they're doing. But they gave me a chance to go with the 94th battalion, which is the battalion based up in Sinaloa, which is, like I said earlier, the heart of the Mexican drug cartels and organized crime. It's a bit like Sicily to the Italian mafia, Sinaloa is for the Mexican cartels, so we had a chance to get up there, to see what the battalions are doing up there and the battalions regularly find opium and marijuana plantations in the mountains up there. They drive around, day in and day out with helicopters looking out the windows trying to spot the bright green of the marijuana or the pink of the opium poppy. And while we were there, they spotted some and we went up in a helicopter with a crew to destroy it. And we went up the mountain in a zone called Badiraguato, which in fact is the same place that this guy who was killed today is from. It's a mountainous area, kind of bandit country, really. So we touched down there with the military and we found a marijuana field with about two and a half thousand square meters of plants and packages of about 500 pounds to smoke that would be exported to the United States and that's part of all the profit that these drug cartels are making. And they did it very rapidly, in about two hours they pulled up the plants and burnt it all in a bonfire. And that's what they do day in and day out, just light fires in the plantations and destroy them. And that's one of the core tactics of the US war on drugs: try and destroy supply. Now, obviously when there's big demand, suppliers will always find a way to supply. That's one of the critics of the war on drugs. They've been fighting this, they've been fighting year after year and it's very hard to stop it. American consumers are going to want to buy marijuana, they're going to want to buy heroin or cocaine and when they destroy one field, they'll just plant another one. As well as that, we went to see some of the urban operations of the 94th battalion inside the city, which is a key base of operations where they've been finding stacks of millions of dollars and drugs and guns. And one of the things that really amazed me in the military base, which really blew me away, was the number of planes they have seized from drug traffickers. In the compound, they had over 100 light aircraft that they've seized in the last couple of years in one area of Sinaloa and that just gives an indication of the kind of money and resources these drug trafficking operations have. It's a very big industry. Estimates said it could be worth $30 billion a year to Mexican cartels and for that reason, that sustains the trafficking and the violence. 



Passport: You have some great video footage there of the anti-narcotics troops pulling up marijuana plants and also of those planes in the military base, the seized planes. Does the Calderon government and the army have a clearly defined strategy against the drug cartels? 



Grillo: That's an important debate about this whole thing. They claim they do. And when they first came in, they said, we're going to win the areas, win back the space from the cartels. That was the strategy they were saying. And two or three years later, they're still saying the same thing: we're going to win back the territory. And there's an argument that it's a law and order problem. So it's really about how you define victory in this. When Felipe Calderon came into office, he came into office after quite a controversial Presidential election the (inaudible) he beat by a very small percentage, he won by 0.6 percent of the vote, claimed it was a fraud, and as he came in, it had been a year of quite a lot of (inaudible) politically and as well as drug-related violence. So he came in and declared this big war and I'm going to move more troops against drug cartels and he dressed up in a military uniform, and stood in front of the troops and said, now let's go to war with the cartels. And it's was kind of like the bring them on attitude that George W. Bush had in Iraq. And some of the critics that that this is a bit like Calderon's Iraq, you say bring them on, I'm going to have victory, I'm going to look strong. But this is a sustained conflict where it's very hard to claim victory or define a clear victory. And at the same time, you can't really pull out of it. If you pull out now, there's so much violence now, if you back off, it's like the same thing as the war pulling out of Iraq and leaving this mess. So it's quite hard to define what that victory would be and at what point they could say, now we've really won this. 



Passport: Do you think they are winning the war, Ioan?



Grillo: I think that they have made more seizures and considerable arrests and victories against drug cartels, more seizures than any other Mexican administration before. If you look at the kind of seizures, of cocaine, for example, they made a seizure of 23 metric tons of cocaine off the Pacific coast. To give an indication of what that 23 metric tons is 23 million grams of cocaine. And in terms of lines, you're talking about past 200 million lines of cocaine. And that's in only one seizure. That's a lot of cocaine. That's worth, on a U.S. street, perhaps a billion dollars - and that's in one seizure. There've been record seizures. Then one time they seized in a house, back in 2007, they seized $207 million in cash. Well, $205 million and 200 million worth of pesos - in cash in one house. That's the biggest drug cash seizure in world history. So, from that point of view, they have had victories. But are they really winning? I would say those victories do not mean the drug trafficking stops and they do not mean there's less violence. There's only been more violence and the trafficking still continues. So there have been some serious questions some times about, really, how can you win a war on drugs? 



Passport: Right. And the violence is sort of spinning into new areas. The drug cartels are diversifying. They're getting into kidnapping an extortion and that type of thing these days, aren't they?



Grillo: That's correct and there have been some serious situations, for example in Ciudad Juarez, had a story on the website about the extortion in Ciudad Juarez. The very worrying thing there was that all kinds of businessmen are complaining about extortions where people go to them and demand $500 or $1,000 a month, sometimes small amounts, but if they don't pay, there have been fire bombings, there have been shootings, just killing. And that has really been hurting people. And a lot of Mexicans and Mexican businesspeople can be, to an extent, complacent about drug-related violence, saying, well, it's bad guys killing bad guys and police killing bad guys. At least you're not in the cartels or at least mixed up to worry too much about this. But when people come to your business place and say, give me money or I'm going to kill you, or I'm going to burn your business down, that's a serious worry. And that was why the business association in Juarez said, bring the United Nations. And that wasn't taken too seriously. And they said, why should we pay tax to the government if organized crime is coming to ask us for cash. So this idea of extortion is a real concern and we'll see how much this happens around the country. And these things happen because when cartels clash and when cartels are broken up, there's a lot of disorder and a lot of them and a lot of people who associate with them try to make easy, quick money by shaking business down. 



Passport: Yeah, we published a story on Passport called, I believe, Business class Refugees, in which we document the elite of Mexico leaving the country and using special business visas in the United States. You know, spend some money, buy a business and get a visa for themselves and their families for the sake of protecting their families and fleeing the violence and extortion. That can't be good for business in Mexico. 



Grillo: No, it's certainly not a good sign and that's very common in Ciudad Juarez. It's the worst-hit city of this country and it's right on the U.S. border. A lot of the wealthy, business class of Ciudad Juarez have always been able to move back and forth from the United States. (Inaudible). So a lot of people think, why should I stay in Juarez, I can sit in a restaurant in El Paso and do my business from there. (Inaudibel) I mean, Ciudad Juarez is important for assembly plants, if you're having a Japanese client over and you want to assemble goods for the U.S. market, you say, I'll meet you on the U.S. side because the Mexican side's a bit rough where the factory is. So that's not a great sign for business, not a great sales pitch. 



Passport: Talk more about the ways the United States in involved in the conflict.



Grillo: So the United States is involved in this conflict in many ways. From the very basic point, the United States has a responsibility in that U.S. consumers are providing the money for these drug cartels. When it's their dollars they spend, it comes back to these drug cartels. It's a clear point for the U.S. The Obama administration has started to recognize that, but there still has not been a solution offered. I mean, the U.S. assumption has still stayed very clear. That all of the U.S. consumers spending money on marijuana, heroin, cocaine and crystal meth, all that money will go down to these cartels. The second is the U.S. gun shops, the gun shows are the major supplier to the cartels, it's a very clear fact. The U.S. gun lobby is sensitive about this issue, obviously, about any attacks on their right to bear arms and why the conflict in Mexico should affect their right to bear arms and sell guns. But the clear fact is that all of the guns seized from Mexican cartels, we're looking at about 90 percent, are traced to U.S. gun shops. And we're also talking about not just the small guns, also the automatic rifles, we're talking about machine guns with .50 caliber, which can fire through armored plating. These are sold in U.S. gun shops. As well as this double issue, this joint issue of drugs and guns, the U.S. has decided this merit initiative where it's giving $1.3 billion in direct military aid to the Mexican government, supplying them with helicopters, highest equipment, supporting this strategy of trying to destroy the drug cartels by force, which is basically the same strategy they've been doing for years, but with more muscle behind it. And, as well, the DEA has one of it's biggest operations, they have 11 offices, they have people doing undercover work in Mexico, they've got people paying informants in Mexico, they're tapping phones in Mexico. So they're doing all kinds of espionage and doing their work as well. So the U.S. is really involved in this conflict in many ways. 



Passport: Ioan, you live there. Is there any way you see the affects of the drug war on a day-to-day basis in your life? 



Grillo: In my general life, the drug war itself in Mexico City most of the time doesn't affect my general, day-to-day life in any way. I think when you go to Sinaloa, when you go to Ciudad Juarez, when you go to Tijuana and you have military checkpoints in the streets and there's more of a chance that you may arrive where somebody's actually been shot in a drug hit, it can be in peoples' lives more. But in Mexico City, on a regular basis, you don't really see this conflict. I mean, they have regular issues with regular insecurity, I might know someone who's been mugged or something, but that's nothing to do with the drug war, that's kind of regular insecurity that you have in a lot of cities around the world. But there's an interesting nuance there that while this is a serious armed conflict in the country, many people are lucky to go to a tourist resort in Cancun or Acapulco, you're not going to see any kind of drug-related violence or any problem. And it will seem completely normal to you. 



Passport: So it mainly affects people who live in the hot spots?



Grillo: In the hot spots and also its an interesting situation in the hot spots its a defining nuance here. I've been at places where in a restaurant they have gone in there with AK47s and shot dead a police captain in a restaurant. And I've been to the crime scene,  dead bodies there, it's a crazy scene. And then within an hour, the body's been taken away and the restaurant starts cleaning up and gets ready for lunch. So there's these contradictions where this violence can happen around you and normal life can carry on around it. And the same thing, I've been in neighborhoods where there might be 200 soldiers doing a raid on a house and then they go and the neighborhood goes back to normal again. So even in some of the hot spots, you can be walking around, you might not really see the stuff happening. You know I go and look for this stuff as part of my job, I'll go and find it as it's happening, but even if you're not necessarily following it, you'll be caught unaware by a lot of these violence, a lot of what you see with your own eyes. 



Passport: Let me remind the audience that if you want to pipe in, if you want to ask a question, it's a good time to do it... you can un-mute your phone by pressing *6. 



Caller 1: Hi, this is James from Legal Research, can you hear me?



Passport: Yes, I can hear you, go ahead. 



Caller 1: Thank you for your work on this. My question is sort of a comparison between what was touched on earlier about 1980s Miami and I was just wondering, since the violence there was predicated on the same thing we're talking about today, have they stepped up on money-laundering efforts? You know, with all this money sloshing around, I assume we're talking about tens of billions of dollars sloshing around, and the government, do they actively make seizes on banks for drug money there? And I'm just wondering any sort of thing you could share on that. 



Passport: It's a good question. Maybe address the larger question of how the drug war is affecting business in Mexico, Ioan. 



Grillo: Sure. Thanks very much for that question, it's a very good point. One of the criticisms has been that the Mexican government is very weak on tracking money laundering. Like you said, there's tens of billions of dollars, but no one knows exactly the amount of money that goes into this, this sort of clandestine business, we estimate it to be about $30 billion per year. Where does that $30 billion go? I've talked to some people in the Attorney General's office who said, off the record, if you really look at this, it's very weak, there are very few investigations, really, on money. And have they made seizes on banks? They're not seizing banks. In Sinaloa, they went in there at one point and clamped down on a lot of money changing places and there were a lot of people arrested and being investigated from money changing places, which are known to be major places of money laundering. But as far as major banks, they haven't. There's talk about some banks in the United States and there's money going back to the United States and some of those leads haven't been followed up very clearly either. So you have to look at where the leads go then and what's stopping the flow of money in the United States. One place in the United States which one alleged trafficker, the same person who was linked to the $207 million, he was actually going through Las Vegas and putting large amounts of money through Las Vegas. But we haven't seen any clear investigations coming back on that yet. But one accusation is the Mexican establishment is concerned about what kind of can of worms following the money will open up. How many big, important businesses this dirty money can go into... could it hotel chains? There's already the issue of politicians, a lot of politicians being on the payroll of drug traffickers, so it's definitely and interesting issue and there are critics that say that they have to go after the money to really change the situation. In terms or businesses, generally, it's a complicated question, how this affects business, because on one say people say it's bad for business if you don't care what they're trying to sell you off an assembly plant (inaudible). On the other side, (inaudible) Sinaloa had very high sales of armored vehicles and Hummers, which are very popular cars with these kinds of people. And according to some sources, it is the highest level per capita of Hummers in the entire world. So from that point of view, car show rooms are doing quite well for themselves. So its a kind of give and take, and then obviously, extortion is a big cost and a big drain on businesses. So it's a bit of a difficult question how much this is affecting the economy, I think it's a bit hard and people want clear numbers of really what percentage of give or take, but its very hard to give those kinds of concrete numbers. 



Caller 1: That's great. Can I just have a quick follow-up?



Passport: Sure. 



Caller 1: Disregarding the skyline of Miami wouldn't exist without the 1980s drug trade and what was a sleepy little retirement community now a major world city. Do you see any other areas in Mexico that could possibly benefit, as horrible as that sounds, benefit from this drug money sloshing around, whether it's in commercial real estate or resort real estate outside of Mexico City, I was just wondering if there are any areas where this money's going to go to work and actually people are going to throw money around it, legitimate money, and it's just going to sort of snowball effect and lead to some sort of development. 



Grillo: Certainly. I mean, this has been going on for years and drug money's been going into certain areas for years and you can definitely see the various effects of drug money in different areas of Mexico. Sinaloa is an extreme example because it was a hot land and a lot of the drug money ended up back there and there's this one area with these incredible mansions. And you're talking about the skyline of Miami, these mansions are kind of these bizarre mansions that are often built and the owners of these have often been arrested and the mansions have been seized by the government. The owners are these guys who come from the countryside, these bandit territories, some of these guys have a billion dollars and they build these mansions that are really bizarre things where they throw in Roman pillars and Greek statues and all kinds of swimming pools and crazy fantasies they build there. And you can really see it in that kind of community, but there are other communities, if you look at the border areas, its hard to differentiate where the money is, but there's been houses seized by drug traffickers in Laredo, in Texas, in Ciudad Juarez, in Tijuana and you can see there's mansions there, there's discos there, nightclubs, and money's obviously going into these places. And Mexico's got quite a big economy in itself and the Mexican economy's worth close to a trillion dollars, so 30 billion is not like half the economy or anything, it's got definite effects in certain communities. Now, outside of Mexico, I was down in Honduras recently and in Honduras, the Mexican drug cartels are down there and I was talking to the head of the anti-drug forces there and he had photos of these enormous haciendas in the jungle that Mexican drug cartels have bought there. They go to Central American and say they have big money, they can spend it in Central America. You can buy thousands and thousands of square acres of land up in the mountains and build these palaces up there. You can flow this money around to all kinds of places. 



Passport: Great. I think we're going to have to leave it there, we're a little bit over time, but Ioan, thanks a lot for speaking with us today. 



Grillo: Thank you.



Passport: And keep up the good work down there in Mexico and I really recommend the piece that you published today, it's the lead story on GlobalPost right now. Thanks every body for joining us and we'll talk to you soon.