For years, the ridiculous War On Drugs in Mexico has been creating and feeding an out-of-control monster, but until now I didn’t realize just how large that monster really is.
It’s huge: Mexican drug cartels now have their own oil company.
U.S. refineries bought millions of dollars worth of oil stolen from Mexican government pipelines and smuggled across the border, the U.S. Justice Department told The Associated Press — illegal operations now led by Mexican drug cartels expanding their reach.
Criminals — mostly drug gangs — tap remote pipelines, sometimes building pipelines of their own, to siphon off hundreds of millions of dollars worth of oil each year, the Mexican oil monopoly said. At least one U.S. oil executive has pleaded guilty to conspiracy in such a deal. [“Mexican cartels smuggle oil to US” – Associated Press]
What’s next? The Electric Company and Water Works? How about a few hotels on Boardwalk or Park Place?
In March, Forbes Magazine listed Sinaloa Cartel boss Joaquin Guzman Loera, known as “El Chapo” or “Shorty”, in a tie for #701 on their list of world’s wealthiest – with a fortune worth a billion dollars.
He may be the first billionaire drug dealer on the list, but he probably won’t be the last as long as prohibition continues. El Chapo’s competition is expanding fast.
The Gulf cartel has launched a full-scale recruitment program, posting help wanted ads promising good pay, free cars and fine dining to mexican soldiers who are looking for a new career in smuggling, torture, or assassinations.
And business is booming: another Associated Press story from a few days ago says cartels have “have morphed into full-scale mafias, running extortion rackets and trafficking people and merchandise” in a way not seen before in Mexico, even providing jobs and social services in remote areas. “It’s almost like Chicago, when Al Capone ruled everything,” a senior U.S. law enforcement official told AP. “They control everything from the shoeshine boy to the taxi driver.”
Drug prohibition creates the illegal market that allows the cartels to exist, and with a lack of legitimacy and a regulation system, cartels are forced to settle disputes with violence. Violence spreads, and as the cartels continue to murder and intimidate thousands and foster this culture of ultra-violence, we will slowly see the takeover of all other legitimate industries.
Author and journalist Charles Bowden appeared on Democracy Now! on August 11, and said that that Mexico’s economy is so linked to drug cartels, there is no virtually no way to separate the two.
But what people have to understand is Mexico would collapse without drug money. Our agencies estimate Mexico earns $30 billion to $50 billion a year in foreign currency from selling drugs. Remittances from Mexican workers here is their number two official source of currency, and that’s about $20-$25 billion. But the drug industry is essential. It’s penetrated the whole culture, and it isn’t going away. And nobody is going to destroy it.
I’ll give you another statistic. The consumption of drugs in Mexico has exploded. Last week, a public health official in Juarez, a city of a million and a half, said there’s at least 150,000 addicts in the city. Think of it this way: trying to eradicate the drug industry in Mexico is like trying to eradicate gambling in Las Vegas. It is the economy. And it’s the unspoken part of the economy.
And there’s one final thing that has to be considered. Forty percent of the federal budget in Mexico comes from oil, from PEMEX. The oil fields are collapsing. The Mexican government, by its own statements, thinks they’ll be functionally gone in nine years. That makes drugs yet more important for the survival of the society.
The monster has broken its restraints and is choking its inventor. Only the repeal of prohibition can stop the violence and death, if it’s not already to late.