Mexican Threat to Canadian Security

This blog has outlined the development of the Sinaloa Federation's presence in Mexico beginning in earnest about two years ago and intensifying ever since then. I'm not going to rehash what I've written in this blog. If you're interested enough, you can scroll down and read it to establish that for yourself.

CONTEXT AND PRECEDENCE

1. Immigration

Mexican Immigration to Canada in 2005 was the first phase of the establishment of the Mexican drug trade that we are seeing in a mature environment in Canada today. Joaquin Guzman Loera (El Chapo) bought his first ranch in Mexico in 2005. Mexican citizens began to enter Canada 'fearing for their lives' and were accepted by the Canadian government as refugees. This trend continued unabated until July 2009, when the Canadian Government instituted a requirement that Mexican citizens traveling to Canada obtain a visa.  Mexican refugee claimants, represent 25% of the total Canadian asylum petitions. Even though 90% of those are ultimately rejected, refugees/asylum applicants continue to stress the over taxed Canadian system. 

What do cartel members awaiting adjudication from Canadian authorities do while on parole status? They traffic narcotics and receive public assistance payments from a generous and naive Canadian system.

2. Trafficking Trends

Historically, the primary conduit for the conduct of the smuggling operations were well organized Asian gangs on the Canadian side of the border. That balance tipped beginning in 2010 when very well trained, experienced Mexican traffickers entered the business of trafficking through Canada into the US began to switch on. Canada is the path of least resistance. Canada is also not the market. Canada has 34 million citizens. California alone has 38 million residents. The drug cartels will sell to Canadians, but the market is a small fraction of the size of the US so cocaine, methamphetamine products and opiates bound for Canada usually re-enter the US.

3. Kind and Gentle Canada

Canada is no stranger to organized crime. Their efforts against motorcycle gangs, the Italian Mafia, and more recently in their history, against Asian gangs has been moderately effective. They are NOT ready for the destabilizing effect on society that is being fashioned by highly-organized, violent criminal cartels from Mexico. 

Many drug cartels, including the Sinaloa Federation use contract intelligence people from the former Soviet Union including Ukranian GRU and KGB operators. They are not Asian gangs and they are not bikers. They are PROFESSIONALS. Canada isn't ready. Reliance on USGOV agencies such as the FBI or the Customs and Border Protection Service is thin because they themselves are ham handed when it comes to interdicting or impacting drug cartels. The US track record is not impressive.

4. Impact on Legal Trade

The US has begun to react to the new threat from Mexican Cartels moving narcotics through Canada by "thickening" their border defenses. Trade between Canada and the US has decreased by twenty percent over the past five years. Part of this is due to the security barriers that also impact legitimate trade by simply making it 'harder' to do business. And I'm not only writing about this difficulty, I've experienced it. 

TODAY

DDG 283 HMCS Algonquin

Canada has participated in the North American Maritime Security Initiative (NAMSI) and last year the HMCS Algonquin participated in counternarcotics patrol work in the US Mexico Pacific Border area. It was a symbolic step (at best). None of it addressed the endemic corruption in Mexico and the folly of relying on Mexican Navy (SEMAR) allies for accurate and timely support. That's not to say that all of SEMAR is corrupt. It's not. Enough is to make it (and the rest of MEXGOV) unreliable (I'm trying to be kind here).

Canada is trying to implement a species of trilateral security to protect its interests and while that is the only way to proceed, what they are doing is not having ANY impact on the Sinaloa Federation's operations within its borders. The Canadians need to up their game if they want to play in the big leagues.

The only game in town is HUMINT. It's expensive, it's exhausting, it's difficult, but no other method is likely to work. The RCMP won't be able tell the players without a program and Canada either enters the Great Game or they reap the whirlwind. 

Cartels with MANPADS

Joaquin Guzman Loera (El Chapo) is in Guatemala today, checking out his new weapons with his allies in the Guatemalan military (los Kaibiles) and Los Caballeros Templario (LCT).

Man-portable air-defense systems (MANPADS or MPADS) are shoulder launched surface to air missiles which are particularly effective against helicopters. Sources suggest that the FN-6's (Second generation shoulder launched SAM's) have been delivered recently.

Chinese made FN-6 MANPAD

The narcotics cartels in Mexico are changing as MEXGOV is changing its way of managing the narcotics supply to the United States. The old "dinosaurs" in the PRI Party have been or are are being 'castrated' and removed from power to make way for the young turks. 

los Kaibiles, armed by the US and other nations.

El Chapo found himself in a position where his SEDENA bodyguards/reps were being recalled. The same is true with his personal SEGOB detail. So he made a bold move and has built an alliance with LCT - which is being armed to the teeth. The Beltran Leyva Cartel (BLO) made a similar move a couple of years ago with Los Zetas. The alliance worked for a while. But, in fairness, Los Zetas are not the LCT, which enjoys the tacit backing of the Catholic Archdiocese. 

If the Mexican Military/Paramilitary can't fly their helicopters, it removes a key ingredient in their multi-pronged approach to take down significant narco targets. Time to break out the popcorn and see how it all unfolds.

UPDATE:

There is a rumor floating that the Guatemalan military shot Chapo in the border area just south of Chiapas this afternoon at about 1500 HRS (local time).

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 nypost.com.

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. (nypost.com)

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...

BATFE - Grenade Walker

Jean Babtiste Kingery - not prosecuted by BATFE, but 

arrested in Mexico 9-7-11 and charged with supplying 

the Sinaloa Federation Drug Cartel with hand grenades 

and explosives.

Earlier today, I posted a blog about Kaibiles de Guatemala. A portion of that dealt with, "Hand grenades sold to the Guatemalan military by Israel for military applications and issued to Los Kaibiles have made their way into the hands of various drug cartels. (oops)"

I received e-mail asking whether or not that had anything to do with the now infamous case in which marginally competent BATFE Special Agents and US Attorneys let hand grenades "walk into Mexico" without informing the Mexican Government - because "it would have embarrassed the BATFE". It's comforting to note that BATFE puts its reputation ahead of the lives of Mexican citizens - and by extension US citizens. We wouldn't want to see that bent badge tarnished, would we?

Oddly enough, Jean Babtiste Kingery sold hand grenades to the Sinaloa Federation - the same cartel which received the bulk of the 2,000 + weapons in the Fast and Furious scandal. Just a coincidence.

(CBS NEWS - Sharyl Attkisson reporting) "Grenadewalker" refers to another controversial ATF case out of Phoenix. In it, Jean Baptiste Kingery allegedly smuggled parts for as many as 2,000 grenades from the US to Mexico for killer drug cartels, sometimes under the direct watch of US law enforcement. 

Sources say Kingery could have been prosecuted twice in the US for violating export control laws but that each time, prosecutors in Arizona refused to make a case. In one instance, Kingery had allegedly been caught leaving the US with 114 disassembled grenades in a tire, but the ATF agent on the case says he was ordered by the US Attorney's office to let Kingery go because the grenade parts were "novelty items" and the case "lacked jury appeal." A year and a half after Kingery was first let go, Mexican authorities raided Kingery's stash house and factory and found materials for 1,000 grenades. Kingery allegedly admitted teaching cartels how to make grenades as well as helping cartel members convert semi-automatic rifles to fully-automatic.

Gustavo Rosario Torres - the focus of an attack by
Los Zetas on May 20, 2012 in Tobasco.

That's not the hand grenade case that I referred to where Kaibiles de Guatemala were apparently involved. Gustavo Rosario Torres a former prosecutor from Tobasco, had a dispute with Los Zetas that led Los Zetas to attack on him at his home on May 20, 2012. Three hand grenades were thrown and detonated.

I have perused the MEXGOV file of this attack. The investigation file contained photographs of hand grenade pins and rings and hand grenade spoons. The spoons had Spanish writing on them.

When I reviewed the file, I told the person who gave it to me, “I hope that those grenades didn’t originate in the US.” You see, I had concerns that they may have been part of those hand grenade - bombs that Jean Babtiste Kingery smuggled into Mexico.

It turns out that the hand grenades thrown in this attack came from a lot of 200 that went missing or were stolen from the Guatemalan Army. They had been manufactured in Israel. In addition to MEXGOV officials, US BATFE examined the explosive evidence (post-blast investigation) and confirmed that. There have been other hand grenades from the same lot thrown at SEDENA troops in Chiapas in the past. 

Corruption Runs DEEP in BATF

Mexicans grow very tired of the high-handed USGOV talk of corruption in high places in the government in Mexico when the fish rots from the head down in the US as well.

By now, I'm sure that you heard that ATF Assistant Special Agent-in-Charge George Gillett's personal handgun was found at the scene of a gun battle between the Mexican Army (SEDENA) and the Sinaloa Federation. The matter is all the more infamous because Maria Susana Gamez, a Mexican beauty queen was one of five dead at the scene.

Fox News asked, "How did a gun belonging to a former assistant special agent in charge at the Bureau of Alcohol, Tobacco, Firearms and Explosives end up at a crime scene in Mexico where five died, including a Mexican beauty queen?" But it's not just Fox News and the American Congress who want answers. The Mexican people want them too. And they don't hear President Obama talking about anything but going to Hawaii on vacation for three weeks.

Maria Susana Flores Gamez, 

deceased beauty queen

We know that President Obama won't be doing much about this because his fingerprints and those of Attorney General Eric Holder are all over Operation Fast and Furious, the US Government program that allowed over 2,000 firearms to be transferred from the US to Mexico through straw buyers. In addition to the handgun registered personally to ASAC Gilette, another weapon found at the crime scene was traced to a Uriel Patino, who illegally bought more than 600 guns and is a main suspect in the controversial Operation Fast and Furious run out of the Phoenix office of the ATF. 

After the Fast and Furious scandal broke, ASAC Gillette was promoted and sent to BATF Headquarters to a cushy liaison job (requiring almost no work at all). Some maintain that this was his reward for keeping his mouth shut about what he knew.

I suspect that Attorney General Holder didn't know that he provided his own Fabrique National (FN) 57 handgun to the cartels as well. Was it a personal gift to the Sinaloa Federation in appreciation? I don't know. Maybe Mr. Gillette can tell us. Only he really knows the whole story. We do know that George Gillette lied on his application to purchase the handgun. 

(Fox News) Gillett purchased the weapon at Legendary Arms, a Phoenix gun store. On the federal form 4473 used to buy the gun, Gillett used the ATF office address, 201 East Washington, and said "Apt 940." On subsequent purchase, Gillett used a commercial address, that of a strip mall. 

Both actions are illegal, since ATF regulations require buyers use their residential address. "Lying on form 4473 is a felony and can be punished by up to five years in prison in addition to fines," Sen. Charles Grassley said in a letter Wednesday to Michael Horowitz in the Office of Inspector General. "I request that you initiate an investigation into these matters and that you specifically examine whether Mr. Gillett was the purchaser as indicated by these documents, why the forms list multiple, inaccurate residential addresses while purchasing the weapons, and how the weapon purchased on January 7, 2010 ended up in Mexico."

Does anyone really believe that Attorney General Holder wants to see George Gillette sent to prison for five years? If that happens, will Gillette break and go public with his story?

FN Herstal 

(Fox News) "Why would the assistant in charge of that office be buying guns in the first place?" Grassley said in an interview with Fox News. That would raise the question of the extent to which that person might be involved in the gun trafficking that was going on and profiting from it. ... These are legitimate questions."

Assistant Special Agent in Charge George Gillette says that he sold the handgun on the Internet because he'd "run into a few financial problems". Note that sales of this particular handgun are restricted to law enforcement and the military. AND the ASAC is selling it on the INTERNET? Nobody in Mexico will believe that lie. The fish rots from the head down and George Gillette is not the head of the fish. 

The Herstal pistol is nicknamed a "cop-killer" because of its designation as a "weapon of choice" for Mexican drug cartels.

Liquid Meth - in Tequila Bottles

No, you don't have to put your liquid methamphetamine in a tequila bottle to pass it through US Customs from Mexico, but if it's included in a larger shipment of tequila, the chances that US Customs and Border Protection (CBP) will pick up on it is minute because the factory-sealed bottle is proof against discovery. Even half a dozen bottles mixed in with a hundred tequila bottles improves the value of the imported goods many times. It's even more effective if it's being shipped from a "Trusted Facility" under the aegis of CTPAT.

The comparatively new liquid form of methamphetamine was first produced by Los Caballaros Templarios in Michoacan but it's now being produced nationwide since the 'cook was turned' by the Sinaloa Federation.

Oddly enough, it started as a project to supply methamphetamine to prisons (for profit and as a service to comrades behind bars). Even prisoners need a pick me up - and so do guards who are in need of taming. Letters were sent to Amaloya and other maximum security institutions wherein the paper inside of the envelopes were dosed in liquid meth. It didn't take long to get from there into the tequila bottles.

Liquid packages of meth are very easy to "kiester-stash" in the rectum of the transporter, and nearly impossible to detect. If the packaging fails, the transporter will immediately die, but most don't and they're packing upwards of two liters per passenger - pack the car six deep and do the math. CPB can put the dogs on the car and the people but the 'mules' usually make it through. From what I've heard, it's easier to body pack it than solid meth because it can be manipulated into the colon and/or vagina easier in its liquid form. Never having personally participated, I have to take people's word for it.

Best of all, liquid meth is considerably "stronger" than crystals. Well, that's what they say. However 96% pure crystal meth is likely about as potent as the crystals in solution. The quality of the acid-washed crystal meth coming out of Mexico is very pure and it's 'crystal clear'. It can be injected or simply consumed orally. Both will give you a considerable punch. If the process doesn't include an acid injection process, the solution will be amber...the color of much of the tequila that you'll find in your local market.

Hecho en Mexico!

I hear your question. "How can US Customs determine whether the bottle contains pure liquid methamphetamine or tequila?" 

The obvious answer is that they need to break the seals (and ruin) every bottle crossing the border. With the North American Freed Trade Act (NAFTA) in place, that's not practical. And the lawsuits which surely result if they don't find what they are looking for... 

Please don't think that Mexico only supplies the US with liquid meth. Tequila exports from Mexico to Spain are up 500% in the last six years.

But it's really even better than that for the business of narcotrafficking. On January 17, 2006, in Washington DC, U.S. Trade Representative (USTR) - Ambassador Rob Portman and Mexico’s Secretary of Economy Sergio Garcia de Alba signed an historic agreement on cross-border trade in tequila. This signing ceremony was the culmination of two years and 10 rounds of negotiations between the United States and Mexico.

Tequila is an alcohol beverage distilled from the agave plant and has been given worldwide recognition as a distinctive product of Mexico. As such, while ‘Tequila’ can only be produced in Mexico, bulk shipments of finished tequila, destined for bottling abroad, had been allowed. In August 2003, the Mexican Standards Bureau announced a proposal that the official standard for tequila would be amended to require that all tequila be ‘bottled at source’, in order to be labeled as tequila. This would have created a de facto ban on exports of bulk tequila.

If the draft standard had been adopted, it would have threatened the huge investments U.S. companies have made to build bottling plants and develop brands in the United States. Prompt action by the USTR and the cooperation of Mexican officials allowed tequila to flow uninterrupted for two years during the negotiations. In addition, during the signing ceremony, Ambassador Portman stated, "I want to thank the Alcohol and Tobacco Tax and Trade Bureau of the Department of Treasury, as well as the Departments of State and Commerce, for their invaluable assistance in these negotiations."

The U.S.-Mexico tequila agreement will ensure that bulk exports of tequila from Mexico to the United States, valued at $400 million per year, continue without interruption. The U.S. is Mexico’s largest export market for tequila, accounting for 50 percent of Mexico’s total production.

If you have any questions regarding this agreement please contact the International Trade Division, US Department of the Treasury, Alcohol Tax and Trade Bureau. (MOU between Mexico and the US)

ABC News Report on a recent arrest 

The Methamphetamine Market in France

Mexican Methamphetamine

Mexican methamphetamine has a clearer, glassier appearance than more crudely produced formulas and often resembles ice fragments, usually with a clear or bluish-white color. It often has a smell people compare to ammonia, cat urine or even burning plastic. There was a time when the Mexican cartels had to import meth into Europe, but that is quickly becoming a thing of the past.

La Familia Michoacan/Los Caballeros Templarios cook in Africa (in five locations) and ship to France, Spain, The Netherlands and Great Britain. The Sinaloa Federation (El Mencho Faction) has done that one better by setting up clandestine laboratories in Europe to service the European market. France is home to some of the larger and more sophisticated cooking operations. I do understand that the French may be insulted by this revelation, but that doesn't change the fact that it's the case.

Having been to Interpol Headquarters (Lyon, France) as a guest on more than one occasion, I understand that France together with The Netherlands (Europol) hosts the international crime fighting efforts against such things. The Mexicans, with a substantial bankroll to back up their expansion, sought out the most corrupt and likely unemployed segment of French society to help them with both security and distribution. Yes, the French Muslim Community was and remains committed to the cause. The vast sea of unemployed inner city youths are both willing and able to help the Mexican drug cartels.

France has a well established, well trained, well paid, and highly professional police force. And if you ask them how all of the methamphetamine (90%+ purity) arrived in their nation, many would tell you that it's smuggled in. That may have been true once. Not so much these days.

The marketing format follows a well-established pattern. By simultaneously increasing the purity and cutting the price, the cartels get people hooked and create a new customer base. By including the locals in the profit making, they expand by forming alliances, taking advantage of existing distribution networks.

Washington DC Beltway Experts

I don't want to be sued, so let's make it clear that the following is only MY OPINION. I could be totally wrong about everything including what you'll read below. Make up your own mind.

There are a number of firms, mostly headquartered in the Washington D. C. Beltway, which are headed by professors and other pseudo professionals, who peddle their services to the equally unknowing USGOV bureaucracy. Some of them, like Southern Pulse --

"Southern Pulse is a decentralized, field-based investigations organization focused on security, politics, energy, and business in Latin America. Founded in 2004 by investigative journalist and author Samuel Logan, Southern Pulse presents clients with reports and training courses sourced from the ground up. This organization began as a private human intelligence network in the Americas. Southern Pulse is now based in Annapolis, Maryland, and runs its free online media monitoring service from Washington, DC. Senior investigators operate from hubs in Mexico, El Salvador, Colombia, Brazil, and Chile to leverage our network, unique access, and deep understanding of the region to mitigate risk for public and private sector clients with exposure to political, security, financial, or legal risk in Latin America."

-- feel that having somebody read on-line newspapers from Latin America, which they turn into their "educated opinion", lends some sort of twisted validity to what they put out. 

Here are some of their more recent opinions regarding Guadalajara (GMA)

• Los Zetas and rivals in the Sinaloa Federation are content with a non-confrontational coexistence in the GMA.
  Completely untrue. Los Zetas have NO significant presence in Jalisco and no infrastructure to support them if they arrived. 

• There are two, tier-two groups in the GMA; each has aligned itself with a rival tier-one group. 
Mostly untrue. They (like USGOV) separate CJNG from the Sinaloa Federation, and it's not. They assert that the Milineo Cartel is affiliated with Los Zetas and it's not. I am not going to source this thing out for you, dear reader.

• There are at least three, tier-three street gangs with specific areas of operation in the GMA. 
Partly true. But the "street gangs" are run COMPLETELY as wholly owned subsidiaries of (1) The Sinaloa Federation - two separate gangs and (2) La Resistencia, which doesn't call itself the Milenio Cartel anymore. 

• The GMA has seen a violence high-water mark that will likely not been seen under current conditions. 
Untrue. They put that out right before Guadalajara broke out in near civil war in September 2012 after SEDENA grabbed El Mencho (yes, they let him go and he's back).

• The relative low value of the GMA plaza has resulted in the increased importance of rural areas. Though this is true in other areas of Mexico, it is most salient in Jalisco among all areas of our study. 
Completely untrue. And this brings me back to the central point. These researchers with "people on the ground" would not seem to be on the ground in places such as Guadalajara. Or if they are, they lack significant access to the information that they report. Do they ever speak to Ruben Osegevera Cervantes personally? Did they ever have a sit down with Nacho Coronel (before SEDENA killed him at El Chapo's request) and pick his brain over the future of his mini-empire, centered in Jalisco and Guadalajara? Do they go to El Azul's rancho outside Guadalajara and speak to the great man, himself?  Of course not. What about the rift last spring between El Mayo and El Mencho and the impact that had on Guadalajara street gangs? You never hear these 'experts' discussing nuts and bolts because they don't understand how things work among the narcos. 

I'm sure that if somebody from Southern Pulse were to respond to this blog (and I'm not holding my breath), they would say that their information comes from 'reliable sources on the ground', which would mean that they read the newspapers. (then they sell that reading service to people as evaluated intelligence)

Who owns the Mexican newspapers and who tells the newspapers what to print (for the most part)? Sadly, the narco matas and related blogs seem to have better information than the newspapers do because they can publish with a degree of anonymity.

Don't bother going to the US Drug Enforcement Administration (DEA) for answers or to the US El Paso Intelligence Center (EPIC). HIDTA gets its information from USGOV so it's no more valid than DEA. Though they are right more often than they're wrong (maybe 60/40), they lack the real ground game in Mexico that one needs to understand what's going on and more importantly, why things happen the way that they do. Relying on the (now part of Gobernacion) SSP for reliable information is folly. I don't care how well USGOV asserts that its sources are vetted.

It's all ground game. My advice to private analysis groups: Go big or go home.

USGOV doesn't want my advice.

Narco Corruption in Jalisco

Alfredo Barba Mariscal

There are competing theories for who the linchpin of narco political influence is within Jalisco. I personally suspect that it's Alfredo Barba Mariscal. Barba is the union secretary for the Confederacion de Trabajadores de Mexico (CTM Labor Union) in Jalisco. He's also the secretary of Tlaquepaque, a political position in one of the five municipalities that make up Guadalajara. Arguably Tlaquepaque (Mayo turf) is one of the two most important of the five.

Barba is closely supported by Raul Flores Flores and was a gambling buddy of Luis Rodriguez Olivera. They've been to Las Vegas together more than once. A couple of years ago when Barba went to Las Vegas, he lost $30 million and his father paid his debt.

Raul Flores gained his fame when he gave Joaquin Guzman Loera (El Chapo) money after he escaped from prison, and helped him get on his feet. Chapo never forgot the favor. Flores usually maintains a very low profile, though some of his employees (other than Luis and Esteban Rodriguez Olivera who are now in custody in the US) such as Jose Tierso Martinez Sanchez live the life of big time narcos in Colombia, Brazil and Peru these days.

There is Jorge Aristoteles Sandoval, Mayor of Guadalajara, as well who should be in the running, but he's gone off on his own and trafficks with other political figures (paying tax to the Sinaloa Federation). He's a useful tool, but doesn't have the sort of stroke that Barba seems to have.

Honorable mention goes to Arturo Zamora Jiminez, PRI candidate for governor of Jalisco and close associate of the infamous narco attorney, Jose Julian Jordan Gonzales. He's viewed for "being so crooked that he's round" and as a useful tool rather than a man with real power.

Of course, all of this is simple idle speculation. Merely my opinion.

The Arellano Felix Organization's New Paradigm

The Arellano Felix Organization (based in Baja California Norte and headquartered alternately in Tijuana and Ensenada) is now actively working with the Sinaloa Federation to move cocaine across the US Border. Despite my own reporting to you to the contrary, they are currently moving cocaine through the US Ports of Entry by automobile in large volumes. Times change and they are stocking up on cocaine on the US side of the border to satisfy their customer's needs during the Holiday Season, when they typically shut down operations.

This new found rapprochement between the AFO and the Sinaloa Federation has been building steadily as an arrangement of convenience. Oscar Andres Rodriguez Gurrero has been one of the linch pins on the AFO side of the equation who keeps the love flowing to the Sinaloa Federation, senior member of the partnership.

Many high level meetings have been taking place at ------- Restaurant, Tijuana, BC (an AFO hang-out) where it's not usual to see Fernando Sanchez Arellano, Oscar Rodriguez, Julio Cesar Heredia Magana and others having dinner and discussing the day's events with one of Chapo Guzman's sons. Maybe somebody should tell DEA.

Julio Cesar Heredia Magana (El Malchor), is part of Armando Villareal Heredia (El Gordo)'s family. El Gordo began working for AFO in the mid 1990's and moved large quantities of product from Sinaloa to Los Angeles through Tijuana until his arrest in Hermosillo in 2009. A lot of El Gordo relatives are still associated with the AFO. It's a legacy thing.

The Livable, Lovable, Port of Veracruz

The Sinaloa Federation is a practical organization. When you intend to take over a major hub or region, it's better to simply flip the current warlord to your team than it is to try and install somebody from outside (Sinaloa) than it is to keep the figurehead in place where he is. 

It's been over a year now since SEDENA assaulted Veracruz (very effectively) and drove out Los Zetas (circa September/October 2011). Within two weeks, the Sinaloa Federation moved in and installed the formerly #3 in the Los Zetas command structure as their man in Veracruz. Sure, Rafael Acosta Croda has people keeping an eye on him, but life is good. The police leave him alone. The Army leaves him alone, the politicians tip their hats to him and all is well with the world.

Rafael Acosta Croda - and one of his wives.

The drugs move through the port of Veracruz with the occasional seizure to insure that MEXGOV authorities take credit for their vigilance. [usually somebody else's dope - rarely is a load belonging to Gonzalo Inzunza Inzunza (Macho Prieto) bagged] DEA has been wondering how all of the drugs are moving through the East Coast. This is one route. There are others.

Zeta one day, Sinaloa Federation the next. Expedient moves are necessary for survival. But sometimes it's tough for USGOV to keep up with the program.

The Federation Strikes Back

There are five key accusations against ATF and DOJ made by ATF whistleblowers and other sources within FedGov:

1. That they instructed U.S. gun dealers to proceed with questionable and illegal sales of firearms to suspected gunrunners.

2. That they allowed or even assisted in those guns crossing the U.S. border into Mexico to "boost the numbers" of American civilian market firearms seized in Mexico and thereby provide the justification for more firearm restrictions on American citizens and more power and money for ATF.

3. That they intentionally kept Mexican authorities in the dark about the operation, even over objections of their own agents.

4. That weapons that the ATF let "walk" to Mexico were involved in the deaths of Border Patrol Agent Brian Terry and ICE agent Jaime Zapata, as well as at least hundreds of Mexican citizens.

5. That at least since the death of Brian Terry on 14 December, the Obama administration is engaged in a full-press cover-up of the facts behind what has come to be known as the "Gunwalker Scandal."

(The Sipsey Street Irregulars)

__________________________________________

There has been a national election in the USA in which nobody discussed this rather sorry chapter in American History. The candidates were mute as was the mainstream media. Maybe they felt that it had all become "history", and thus a mere footnote to the great unwashed who would soon vote for the next president and "leader of the free world".

However as unlikely as it may seem, there are people in Mexico who have dead friends and relatives, killed with firearms and ammunition supplied to cartels by the Bureau of Alcohol, Tobacco and Firearms who have longer memories than the American Press.

The brother of a high ranking US federal agent was kidnapped in Casa Grande, Chihuahua and subsequently killed in Mexico, last week. The murderers dumped his body near Agua Prieta. It didn't have anything to do with Operation Gunrunner directly, however it was a message sent to US Law Enforcement and you're going to hear that message again from the Sinaloa Federation. 

This is the bottom line. When the Federation (drug cartel) gives up one of its own as a sacrificial sheep to satisfy the needs MEXGOV to look good in the press or when they need to weed out a weakling, that's ok. When the US uses "atmospherics" to track somebody that they need/want around and feed that to SEMAR, then the fir will fly.

You'll hear more of this in the future both on this blog and elsewhere. The Sinaloa Federation wants USGOV to take their law enforcement officials out of the Republic of Mexico. There was a political statement made on July 1, 2012 and that government will be seated on December 1, 2012. Look for one of the reasons behind MEXGOV restricting US Law Enforcement in Mexico to be the Gunwalker Scandal.

The Corporate Sinaloa Federation

It's been happening in a big way in the Sinaloa Federation for the past six months and plans are underway to 'work' through the holiday break.

Feliz Navidad in Canada

WORK? No not that kind of work. They won't be moving drugs during the break - at least not many. They continue to establish their Canadian infrastructure and will be spending a piece of the holidays there in order to 'work while the sun shines' -- sorta -- to prepare for 2013 when you're going to see at least half of the methamphetamine products sold by the Sinaloa Federation and particularly by Joaquin Guzman Loera (Chapo) pushed not from Mexico, but to the United States through Canada. Even though the route is farther, the scrutiny is an order of magnitude less and they know how SLOW government moves. 

Experimentation with Canadian routes has been very successful beginning in April 2012 and continuing to the present day.

Chapo has visited Canada twice in the past six months that I'm sure of, and he may have slipped under my radar a couple more times. He's been up there visiting friends, making plans and trying to build a new (if not novel) system that maximizes profit by minimizing risk.

Jesus Malverde, SantoNarco

I don't know if anyone noticed, but ...the cash that used to flow from the US to Mexico, across the International Border is drying up. The first rule of investigation is to follow the money. But the Sinaloa Federation has, in a sense, gone cashless. Most of the profits from drug sales in the US are now being moved through banking channels. Only a fraction is crossing into the plazas. There are a couple of reasons for this, but the bottom line is that it's simply less expensive for the narcos to do this. 

Since the Sinaloa Federation accounts for at least 80% of the drugs moved from Mexico into the US, somebody should pay attention to this. I doubt that the RCMP reads this blog, but maybe they should because there will be more specifics on the "Northern Route" popping up here and there as I'm disposed to blog it.

There will still be cocaine shipments, but the principal Mexican narcos (meaning Chapo, Mayo and Mencho) are convinced that they are better off dealing in cheap, very high quality methamphetamine. Anticipate a sharp decline in cocaine shipments to the US. It's business and supply and cost with an eye toward profit, drive this market. That should raise the price of cocaine, and when that happens, you'll see the independents move that more because of the same supply and demand situation. For the moment, the Sinaloa Federation is going corporate and that means that they are going to allow the independents to take the big risks while they focus on the surer thing.

Mexican Methamphetamine

Americans are so desensitized to the drug trade that one photo of piles of drums containing precursor chemicals for methamphetamine, seized by Mexican and US officials, looks more less like all the rest. Thus, I won't bother to post a photo of a pile of chemical drums.

Mexican drug cartels are flooding U.S. cities with cheap, extraordinarily pure methamphetamine made in factory-like "super labs” located throughout Mexico. Although Mexican meth is not new to the U.S. drug trade, it now accounts for as much as 80 percent of the meth domestically, according to the Drug Enforcement Administration. And it is as much as 90 percent pure, a level that offers users a faster, more intense and longer-lasting high.

Viewers familiar with the popular television series, BREAKING BAD, have a genuinely accurate view of the meth lab scene, combined with Hollywood drama. The only difference is that the really good stuff is made in Mexico these days. Various cartels expanded into the U.S. meth market very effectively, using the drug pipelines that they previously used for cocaine, heroin and marijuana. 

Mexican meth has a clearer, glassier appearance than more crudely produced formulas and often resembles ice fragments, usually with a clear or bluish-white color. It often has a smell people compare to ammonia, cat urine or even burning plastic.

http://youtu.be/vUaUFIPYzUQ

Seizures of meth along the Southwest border have more than quadrupled.

In terms of raw tonnage, the amount of seized meth jumped from slightly more than 4,000 pounds in 2007 to more than 16,000 pounds in 2011. The Sinaloa Federation, which keeps close tabs on these profit-and-loss numbers feels that somewhere around 8% of the methamphetamine product that they sent north was seized by law enforcement in their pipelines. Once it hits the street distributors, they don't track it. Though I don't have completely reliable numbers from the Sinaloa Federation (only, not considering other cartels), the best numbers I have is that they shipped 1,500 metric tons of methamphetamine products (crystal, ice, etc.) to the United States and Canada to date in 2012.

During that same period, the purity of Mexican meth shot up too, from 39 percent in 2007 to 88 percent by 2011. During that same time, the price fell 69 percent, tumbling from $290 per pure gram to less than $90. (Source: DEA)

The marketing format follows a well-established pattern. By simultaneously increasing the purity and cutting the price, the cartels get people hooked and create a new customer base.

Mexico has tightened laws and regulations on pseudoephedrine and occasionally the cartels have a problem obtaining commercial quantities from India and China. Today they arrive at the ports of Manzanillo and Lazlo Cardenas on the West Coast and they cross the Mexican border from Guatemala.

Some producers shifted their recipe from pseudo ephedrine to P2P, using the organic compound phenylacetone because it's easier to obtain and has some legitimate commercial applications. In 2011, 85 percent of lab samples taken from U.S. meth seizures came from the P2P process - up from 50 percent a little more than a year earlier.

Last year, Mexican authorities made two major busts in the quiet central state of Queretaro, seizing nearly 500 tons of precursor chemicals and 3.4 tons of pure meth with a street value of more than $100 million. In Sinaloa, investigators found a sophisticated underground lab equipped with an elevator and ventilation systems as well as cooking and sleeping facilities. The facility was reachable only by a nearly 100-foot tunnel with its opening concealed under a tractor shed. (Source: Univision)

In February, soldiers in western Mexico made a historic seizure: 15 tons of pure methamphetamine, a haul that could have supplied 13 million doses worth more than $4 billion.

The cocaine pipeline from Colombia to the United States has already been closed for this season and will reopen after the Holiday smuggling break, due to begin mid-January 2013. That is not true of the meth pipeline because it's produced domestically in Mexico and the profit margin is therefore much higher.