Wolf Boys

by Dan Slater

  Heroin still surpassed cocaine in demand. In New York and Chicago, the Jewish-Italian outlaw crew of Lucky Luciano, Bugsy Siegel, Frank Costello, and Meyer Lansky sent Siegel’s girlfriend, Virginia Hill, to Mexico. She cozied up to officials, bought a nightclub in Nuevo Laredo, and shipped heroin north. In 1948, the FBN declared Mexico the source of half the illicit drugs in America. Nepomuceno Guerra organized a network of smugglers that would become known as the Gulf Cartel.

  During the 1950s and ’60s, narcotics traffickers slid into an alliance with Mexico’s one-party government, the Partido Revolucionario Institucional—the Institutional Revolutionary Party—known as the PRI, or “Pree.” At that time, the United States had little to say about drugs and corruption in Mexico. It was the Kennedy era, the height of the Cold War. Cuba, Russia, Vietnam. Similar to post-9/11 America, national security got all the attention. The CIA station in Mexico City—a hub of Soviet espionage, and a base for Cuban agents—was the CIA’s most important base in Latin America. Mexico’s federal secret police, Dirección Federal de Seguridad, the Directorate of Federal Security, was a criminal incubator that organized protection for traffickers on a national scale. But the DFS also shared intelligence with the FBI and the CIA. Ignoring corruption and trafficking was a condition for this assistance.

  It was only after President Kennedy announced the Alliance for Progress, a multibillion-dollar aid program intended to strengthen ties with Latin America and fight leftist groups, that the Mexican government invited the FBN to open offices in Mexico. It was a token gesture, however. Mexico’s attorney general said: no “buy cases” allowed; no FBN agents testifying in Mexican courts; and traffickers could only be arrested prior to delivering the drugs—a rule that nullified drug interdiction.

  Here was a lesson that would play out several times over the next fifty years. Was it realistic to expect a dictatorship to repay a little financial largesse from abroad by suppressing the only source of income for millions of peasants? It was not. U.S. aid, or investment, or whatever it would be called, instead bought only the appearance of cooperation, temporarily, until Mexico’s one-party government returned to regulating its drug industry in the safest way possible: selling smuggling routes to traffickers in return for bribes. And still, the Americans set up law enforcement offices in Mexico with the stated intent of attacking supply, while largely ignoring the demand at home.

  In 1969, Richard Nixon picked up the antidrug ball and played with it. His Project Intercept inspected more vehicles at the border, slowing commerce. The idea was to prod Mexican businessmen interested in normal commercial relations between the countries to pressure the Mexican government to get serious about drug prohibition. But the program carried an unacceptably high price. Screwing up the economy to catch a few more drug loads: Was Nixon crazy?

  In the 1970s, the second wave of Mexico’s narco-bosses began to take over. On the eastern side of Mexico, Juan Nepomuceno Guerra continued to expand his dominion over the Gulf Coast and the Texas border crossings, in partnership with his nephew, Juan García Ábrego. On the western Pacific side, in the states surrounding the Sierra Madre Occidental, the domain belonged to several traffickers of the Guadalajara Cartel—men such as Ernesto Fonseca Carrillo and Rafael Caro Quintero. Chief among the Guadalajara crew was the godfather of Mexican traffickers, Miguel Ángel Félix Gallardo. Born in 1946, Félix Gallardo—known as El Padrino, the Godfather—had been a cop and a governor’s bodyguard in the state of Sinaloa. El Padrino’s close working relationship with authorities made it seem as if he was the government, as if the drug trade, like oil and other industries of that era, was nationalized.

  Mexico’s authoritarian PRI was created in the 1920s, in the aftermath of the Mexican Revolution. For all its other faults, the PRI was well equipped to manage a country with a large criminal element. All government positions relied on PRI patronage. Within law enforcement, careers were assigned through party connections. Politicians or cops who did business with a criminal that lacked the PRI’s blessing would be told to stop; if they persisted, they were killed. The PRI’s system of regulating the narcotics industry assured traffickers that a few large bribes protected their business at all levels, from Mexico City up to the border. Men such as El Padrino and Nepomuceno Guerra paid the Directorate of Federal Security, the Federal Judicial Police, the attorney general, and the local police commander.

  As part of the deal, known as the Pax Mafiosa, the PRI required that criminals adhere to certain principles. Since violence negatively affected the PRI’s popularity with the electorate, with gringo tourists, and with Washington, traffickers had to operate more or less peacefully. This arrangement meant no dead people left in the streets; no media scandals; periodic imprisonment of low-level traffickers; and investment of drug revenue into poor communities.

  By managing the black market, the PRI minimized violence, but this relative peace would be short-lived.

  IN 1973, NIXON CONSOLIDATED SEVERAL drug-control agencies into one superagency, the Drug Enforcement Administration. At the same time he prevailed on Turkey, then the world’s premier opium producer, to prohibit that drug, which in turn inflated the value of Mexican opium. In 1977, when Mexico saw that there might be money and political benefits in the antidrug agenda, they agreed to let the Americans spray crops. Operation Condor appeared to be a success: In addition to putting 39 helicopters, 22 airplanes, and one executive jet in the coffers of Mexico’s attorney general, the crop eradication seemed to work. Strong herbicides like paraquat, which kills green plant matter on contact, reduced Mexico’s share of the U.S. marijuana market from 75 percent down to 4 percent, and its share of the U.S. heroin market from 67 percent to 25 percent. To Americans, Mexican drug growers being marched off their land made powerful media images. By pasting “dark, gun-toting foreigner” on the face of what had hitherto been an unclear enemy, those images began to cement the terms of the war.

  Mexico also got nice publicity for its cooperation, but it reduced the American presence after Operation Condor was over, and said that DEA pilots would no longer be able to fly unescorted through Mexican airspace. The Directorate of Federal Security—which the Americans still relied on for intelligence—coalesced, once again, around El Padrino’s centralized control of the drug industry.

  In Washington, the drug war remained a mostly secondary interest. Jimmy Carter, never a fan of prohibition, was concerned with reducing U.S. dependence on Middle East oil and striking a deal for Mexican oil. But Washington’s priorities always shifted back to drugs whenever national security was implicated. In the early 1980s, the overseas smuggling route for cocaine, from Central America to Florida, turned Miami into a war zone. In 1982, Vice President George H. W. Bush announced the South Florida Task Force, a multiagency effort that emphasized interdiction and prosecution of smugglers. American politicians from the East and Southwest complained that the task force wasn’t solving the problem but displacing it: Drug traffic now moved through California, Arizona, and Texas. So the task force concept expanded to five other regional centers: Los Angeles, El Paso, New Orleans, Chicago, and New York.

  As cocaine traffic shifted to Mexico, El Padrino’s control of the Mexican drug market began to fall part. In 1985, El Padrino was blamed for the torture and murder of DEA agent Enrique “Kiki” Camarena, whose face appeared on the cover of Time. Operation Leyenda, a huge DEA investigation, sought to bring everyone responsible for Camarena’s death to justice. Several capos, including Ernesto Fonseca Carrillo and Rafael Caro Quintero—El Padrino’s associates in the Guadalajara Cartel—were arrested. The DFS was disbanded, leaving Mexican traffickers to fend for themselves, and set up new protection arrangements with whomever had the power to make such deals.

  To Americans, the Camarena tragedy seemed, ironically, like progress. But the dramatic overreaction to Camarena’s murder set another drug war pattern: Like a cartel boss’s capture, or his subsequent escape from prison, the murder of a single DEA agent was the kind of micro-event th
at would blur America’s ability to see what was happening in Mexico.

  The same year of Camarena’s death, a major earthquake in Mexico City sent the value of the peso plummeting, and left Mexican cops, among others, desperate for dollars. In the past, when a dollar bought twenty-four pesos, corrupt police didn’t do much dirty work for the drug traffickers who paid them bribes. But as the value of the peso fell, senior police officials started providing substantive labor to traffickers, such as security and smuggling.

  In 1987, El Padrino—sensing the breakdown of Mexico’s system-wide impunity for traffickers—convened the nation’s top traffickers in Acapulco and divided the trade routes among them.

  The Tijuana route went to the Arellano brothers.

  Juárez went to Amado Carrillo Fuentes, known as Lord of the Skies for his innovations in aerial smuggling.

  The Pacific Coast went to one of El Padrino’s protégés, Joaquín “Chapo” Guzmán. Chapo grew up in the Sierra Madre mountains during the 1960s. As a boy, he sat at his mother’s table and drew stacks of fifty-peso bills on rectangles of coloring paper. “Keep them safe for me,” he told her when he ran outside to play in the hills. It was there, among cannabis and opium ranchers, that Chapo—Shorty—left school in the third grade to work.

  The Gulf territory, along with northeast Mexico, remained with the Gulf Cartel and Juan García Ábrego.

  El Padrino’s “privatization” of the drug industry created a new landscape of independent, competitive subsidiaries. Without a central authority to reinforce the benefits of compromise, the men who ran these regions gradually traded dispute resolution at the talking table for a more aggressive style. In the late 1980s and early 1990s, territorial skirmishes broke out between Chapo Guzmán and the Arellano brothers of Tijuana. There were kidnappings and car bombings. In 1993, Arellano assassins converged on the airport in Guadalajara to assassinate Chapo as he was catching a flight. Chapo escaped when the hit men gunned down a Roman Catholic cardinal instead, creating the sort of catastrophic publicity that the PRI deplored.

  But the PRI was on its way out.

  Opposition parties were winning state elections in Mexico. Each year, beginning in 1989 and accelerating through the 1990s, more and more power dispersed among local politicians such as state governors, who could now form new patronage networks with traffickers. For a while, the PRI managed to retain some control over the drug industry by micromanaging corruption agreements. Raul Salinas—the brother of PRI then-president Carlos Salinas—personally conducted auctions to sell off protection areas during the early 1990s, essentially subcontracting out to local officials the right to extort traffickers. But the PRI would gradually lose its monopoly on the authority to anoint traffickers and guarantee protection.

  Traffickers, meanwhile, no longer knew whom to pay. Did bribing one law enforcement group guarantee cooperation from another? In this new environment, many traffickers preferred to hire private armies rather than outsource ineffective protection to the state. What state? By 1995, current and former law enforcement members would comprise half of Mexico’s nine hundred armed criminal bands.

  From warrior elites to caciques to Esteban Cantú and the contemporary capo—the narco-state, when it arrived, was five centuries in the making. Poverty and wealth, supply and demand, national security, free trade, and the exigent morality of world power—whatever war came would be as irreconcilable as the agendas that defined it, and restraint would not be a tenet of the new cartel ethos.

  Many would link the modern-day Mexican Drug War to 2006, when a new president launched his assault against the cartels. Some would say it started here, a decade earlier, when the decentralization of Mexico’s political system set in motion the most violent criminal organization in modern history.

  Others would say it began with dinner.

  8

  Bank of America

  In the eyes of world power, Mexico’s one-party government was an ugly beast, outdated. So, on a February evening in 1993, when the seventy-year-old PRI faced its first viable political rival, limousines dropped the thirty richest oligarchs at the finance minister’s mansion high above Mexico City, in the fancy Polanco neighborhood, where President Carlos Salinas presided.

  The evening’s agenda was how to fund the embattled beast, the PRI. Salinas wasn’t running again; the constitution prohibited it. But the left was making a serious challenge to the PRI. The PRI couldn’t afford to rely on government funding in the upcoming campaign, as it had in the past. If all went as planned, Mexico, via NAFTA, was about to expand its economy and could no longer afford to be seen as a state-party system. The oligarchs agreed that a leftist notion like campaign finance reform was a small price to pay for the money they stood to make when Mexico went public, turning their corporate holdings into attractive purchases for wealthy conglomerates abroad.

  Since taking office in 1988, President Salinas had privatized 252 state companies. In exchange for sweet regulatory deals, the oligarchs paid high prices for those companies. Salinas returned their largesse, paving the way for more than a dozen monopolies. Among the guests that night were the new cement baron and the new soft drink baron. Carlos Slim, soon to be the world’s richest man, was the telephone baron. After Slim bought Telmex, the Salinas government authorized a phone rate increase of 247 percent.

  Yes, they all agreed, save the Beast. The oligarchs would finance the PRI themselves.

  A campaign chest of $500 million was thrown out as a figure. Someone suggested $25 million per man. The TV tycoon said why not make it $50 million? A few guests balked. Not everyone had done as well as the TV tycoon, whose Televisa enjoyed 95 percent audience share.

  Carlos Slim said he supported whatever figure was decided. But why all this fuss? Why couldn’t the funds be collected in private, anonymously?

  In a country where half the population lived in poverty, there would be questions, Slim knew, as to how these thirty magnates—all middle-class businessmen before the privatization—could come up with $25 million each for the PRI. People would wonder what favors they got, or would get. What idiot held a banquet? It would turn into a scandal when charges of corruption surfaced.

  Slim understood something about Mexican history that his fellow oligarchs forgot. As Mexico’s Nobel laureate Octavio Paz said, the Mexican Revolution, from 1910 to 1917, was a struggle between opposing principles: nationalism versus imperialism; labor versus capital; democracy versus dictatorship. It was a struggle between a state-managed economy and free markets. Mexico’s northern intellectuals wanted a strong central power. Southern peasants fought for social justice.

  The conservative armies of the north won. Post-1917, the new Mexican state aimed to keep order in a country riven by warring fiefdoms and local-boss rule, by a history of caciquismo. But how to achieve that stability? It would be done by writing some meaningless phrases into the constitution. To placate the left, the new rulers created six-year terms with no reelection. Under the logic of the new constitution, one ruling party would guarantee peaceful continuity. The only check on PRI power would be the kind of empty socialist rhetoric—enshrined in government-commissioned murals by artists like Diego Rivera—that made liberals feel better despite being ignored on most important issues. Ironically, observed Andrés Oppenheimer, a leading Latin American journalist, the new revolutionary state would maintain law and order, and extinguish Mexico’s historical sweep of dictatorships and revolt, by creating yet another dictatorship.

  And now, with foreign cash flooding Mexico in anticipation of the 1994 implementation of NAFTA, Wall Street and Washington sided with Salinas and the oligarchs—and vice versa. European investors had focused on opportunities in the new markets of the former Soviet bloc, and paid little attention to free-market reforms in Latin America. The future of Salinas and Slim’s Mexico lay closer to home: with America. To hold up their end of the deal with Washington, however, the oligarchs needed to deliver stability. Well, that was thought to be no problem. Mexico’s revoluti
onary potential was feather-light—until the banquet.

  The oligarchs rolled out, having settled on $25 million each. Hours later, the publisher of a financial daily called El Economista—in his capacity as businessman rather than journalist—attended a breakfast organized by a business lobbying group, where the cement baron and the department store tycoon talked openly about the previous evening’s fund-raising banquet. News of the event soon landed on the front pages of El Economista, the New York Times, the Wall Street Journal, and the Miami Herald, threatening to ruin NAFTA. Salinas, the banquet proved, was not propelling Mexico into a free-market democratic society, but further into an oligarchic system marked by a mafia-style secret society. The blowback was mighty: another devaluation of the peso, a crash of Mexico’s stock market, and a peasant revolt in the southern state of Chiapas.

  To President Bill Clinton, NAFTA was the deal of a century, a centerpiece of Clintonian prosperity. Over the objections of angry unions, domestic producers, and political foes like Ross Perot, Clinton kept NAFTA alive with a $50 billion bailout for Mexico. Even when it was alleged that Raul Salinas, the Mexican president’s brother, colluded with the Gulf Cartel to have his own brother-in-law, the majority leader of Congress, killed, and police arrested Raul’s wife in Switzerland as she tried to remove funds from a $120 million bank account, NAFTA backers in Washington saw little reason to dwell on Mexico’s burgeoning criminal class.

  Washington shunned comparisons between Mexico and Colombia. Mexican traffickers were nowhere near Pablo Escobar’s level of power. Chapo Guzmán was in prison. So was El Padrino. Those guys weren’t running for office, as Escobar had done in Colombia. Washington was still proud of the manhunt that led to Escobar’s 1993 death. But Escobar’s fame eclipsed his true legacy: The resources poured into his pursuit revealed the killing of a single drug lord as an end in itself, a symbol detached from the drug war. The only entity more invested in Escobar’s outsize legend than Escobar himself was the American government, which needed to justify turning Colombia upside down to kill him. Mexico was about to become a country of Escobars—mass murderers and bad cops elevated to world-historical status by a media-besotted society bent on getting the criminals it deserved.