Of Mice and Men: Gangs, Narco-Terrorism, and the USA

[Ski]

The cartels - specifically, the Zetas - are also tapping into oil pipelines, stealing the oil, shipping it northward into the US, and then selling it to various businesses. There was a Washington Post article last week on this activity, which is estimated to net over $700M a year...and it's particularly painful to the Mexican state which relies on oil revenues to fund the Federal Budget.

http://www.washingtonpost.com/wp-dyn...202888_pf.html

The shadow economy is growing like wildfire in Mexico. Also note the one Mexican minister stating that there is a "parallel government" within the state.

[Bill Moore]

Sunday morning quarterbacking...

The theft is both a symbolic and financial blow to the Mexican government. Taxes paid by Pemex account for 40 percent of the federal budget.

Mexico's oil industry is already in the hurt locker due to their fields becoming less and less productive, so any additional dents in this business which accounts for 40% of their federal budget is a significant risk to Mexico's National Security.

Mexico has launched an all-out campaign to defend the pipelines, drawing in the army, the attorney general's office, the Interior Ministry and the customs service. During the past two years, the government has conducted helicopter overflights, installed electronic detection devices inside the pipelines and beefed up Pemex's private security force.

Security forces guarding pipelines are not chasing drug cartels, so this is a double win for the cartels (oil profits and diverting security forces)

Suárez estimates that Pemex will spend hundreds of millions of dollars over the next three years defending its pipelines. With the company's maintenance staff overwhelmed, Pemex assembled 20-man teams this year to repair breaches caused by theft.

Who pays for this in the long run? Oil prices will have to go up, so the Cartels will even make more money.

Pemex sent out a call for help to the federal government in 2007. In June that year, Mexican customs officials informed U.S. Immigration and Customs Enforcement (ICE) that they had discovered dozens of Mexican companies that appeared to be conspiring with U.S. firms to export stolen petroleum products across the border.

Working closely with the Mexican customs service, ICE investigators said, they soon uncovered a network of Mexican and American companies that shipped stolen oil to the United States in tankers, stored it in aboveground containers in Texas and then shipped it in barges to end users in the United States.

With oil prices then at record highs, the scheme allowed U.S. companies to buy petroleum products at below-market value.

Of course oil prices are not currently at record highs, and they have been falling (although that is forecasted to stop soon), so I wonder if oil prices decrease enough if it will make illegal sells unprofitable, or not worth the risk? However, decreased oil prices would probably hurt the government of Mexico even more.

U.S. companies in bed with organized crime? Who is really surprised?

[Ski]

Bill

The more I read and understand about Mexico, the more I worry.

[MikeF]

Interesting increase in acts of intimidation.

v/r

Mike


Booby traps targeting California police lead to $200K reward offerEmanuella Grinberg, CNN

On December 31, 2009, the unmarked headquarters of the Hemet Gang Task Force was targeted by someone who redirected the natural gas line on the roof into the building, filling up the office with deadly gas. Two task force members entering the office smelled gas and backed away before flipping the light switch and potentially causing the building to explode.

On February 23, a task force member at the Hemet headquarters opened a security gate outside the building, which launched a homemade zip gun attached to the gate. The weapon fired, missing the officer's head by inches.

The headquarters has since been moved to an undisclosed location, where extra security precautions are being taken, Hall said.

On March 5, 2010, criminals targeted a task force member who had parked an unmarked police car in front of a convenience store in Hemet. The officer found what appeared to be a homemade pipe bomb hidden underneath the vehicle.