Violence and Corruption in Mexico: The DTOs and the Economy

by Samuel Holt

1.Introduction

Mexico is a country that has been surrounded by optimism. The election of Henrique Peña Nieto brought with it positivity bolstered with promises of reform, growth, and development. Publications such as The Economist and The Globalist printed articles with the title “Mexico’s Moment”, and it was constantly touted as one of the top markets to watch. It possesses large potential. It has favorable demographics with an average age of 261, it has implemented prudent and sound macroeconomic policies, propped up the manufacturing section, and is home to one of the more developed banking systems in the region. It is easy for the casual observer to be excited by Mexico when all of this is added to the energy, judicial, electoral, and tax reforms pushed by Peña Nieto. However, there are many factors that maintain a constant stranglehold on the country, constantly holding it back, and forcing one to be cautious amidst the positivity.

Violence and corruption are endemic in Mexico, and both find their roots in the Drug Trafficking Organizations (DTOs). The Institute for Economics and Peace publishes the yearly Global Peace Index, which measures the peace and security conditions of a country based on three metrics: The safety and security in society; the extent of domestic or international conflict; and the degree of militarization. As of 2015, Mexico was ranked 144 out of 162 on the international scale and 17 out 18 in the Latin American region2. The gravity of the problem is even more pronounced when considering Mexico is not involved in foreign conflict, not even UN peacekeeping missions, due to the Estrada Accord. This means the domestic conflict between the cartels, autodefensa groups, and the government is the main source of insecurity, and its poor ranking. The murder rate has been measured at 21.5/100,000 for the country as whole, but in areas of higher cartel activity it has reached 100/100,0003. The economic impact of the security issues is staggering. The index measured the “cost of violence containment” to be approximately $1,430 per capita; in other words, a total of 9.4% of GDP is spent trying to combat the violence4. The total economic impact of the violence is estimated to be close to 22% of GDP5.

What underlies the inability of the state to combat this rise in violence and cartel influence is the prevalence of corruption at all levels of government, from the municipal to the executive. In 2014 Mexico was in the bottom tier of world and regional corruption ratings published by Transparency International, 103 out of 174 and 11 out of 18 respectively6. The impact of corruption on a nation is not easily quantifiable due to many factors; however the Mexican Central Bank estimates the total economic burden of corruption to be at 9% of total GDP7. Other results of corruption are inefficiency and increased public malaise because of institutions such as the government and the police force not preforming to minimum standards. The public disapproval for the political and security sectors is illustrated by the Latinobarómetro polls. 51% of Mexicans believe that their government is either doing very poor or poor compared to 37.3% who believe they are doing well or very well8. The negative sentiment towards the police is staggering with 75.5% of those polled saying they believe the police are doing nothing or little9.

Using available statistics and analysis this paper will argue that the economic and social impact of both corruption and security issues caused by the Mexican DTOs will remain a barrier to development and growth if not addressed, and if current trends continue, they will not only spoil the large potential Mexico possesses but also unravel the progress made. The paper will do so by: providing background information of the DTOs and their evolution; illustrating the increased violence and corruption caused by the DTOs, and their social and economic impact; providing examples of national and multi-lateral initiatives taken to combat them; and conclude by offering suggestions of actions and policies that could be implemented to improve the situation.

2.Background

Drug trafficking and the organizations associated with the trade are not new phenomena in Mexico; they have been present since the advent of the marijuana and heroin trade in the 1940s10. However, the increased brutality and movement to other types of crime is a new trend. Violence is a necessary condition of the illegal drug trade because it is used to control territory and enforce order, but what has been witnessed in Mexico over the past decade is of a ruthlessness and frequency unparalleled in the nation’s history. Through the 20th century and up until the mid 2000s the relationship between the drug traffickers and government (PRI) was characterized as a “working relationship”11, but now the two entities are engaged in a war.

The amplified focus of the Mexican government on the DTOs occurred because of two main changes: the shift of the transportation routes used by Colombian traffickers, and the increased volume of trafficking by Mexican DTOs. Historically, the Caribbean was the preferred route utilized to move the DTOs’ product; however, the United States Government’s crackdown in the region caused the Mexican mainland to become the central transportation hub. This led to Colombian organizations contracting Mexican cartels to traffic the cocaine through the Mexico, and very quickly the Mexicans evolved from mere movers of product to wholesale suppliers.

The Mexican organized crime atmosphere is best characterized as very fluid, and defined by the forging and breaking of alliances due to constant conflict over influence. There are a multitude of gangs used for enforcement, selling, and trafficking, but the environment has been dominated by a relatively consistent group of DTOs: The Zetas, The Sinaloa Cartel, Juárez Cartel, The Tijuana Cartel, Beltran Levya, La Familia Michoacana, and the Knights Templar12. Appendix 2.0 provides a decent visualization of the various regions of influence13. All of these DTOs, and more, combine to create an industry that is worth 3–4% of Mexico’s $1.4 trillion GDP with yearly earnings of roughly $30 billion, and a work force of more than 500,000 “employees”14. The funds from drug sales and profits gained from extortion and kidnapping fuel the violence and corruption so rampant in Mexico.

3.Trends in Violence, Corruption and their Effect

Violence: The rates of violence in Mexico increased dramatically once Felipe Calderón took office in 2006. In his six years in office between 2006 and 2012 Mexico witnessed more than 60,000 homicides15. Although Mexico has an average homicide rate for Latin American its situation is worrisome because of the rapid increase in the rate the nation has observed over the past decade. It increased a total of 15.6 per 100,000 between 2007 (8.1 per 100,000) and 2011 (23.7 per 100,000)16. This increase has been at a faster rate than the international level17.

An explanation for the intensification in violence witnessed through these years is the manner in which the Calderón government targeted the cartels. One of the central tenets of his government’s strategy was to cut the head off of the cartel by targeting high-profile members and leaders. Under this policy they were able to capture or kill 25 out of 37 high-valued targets involved in the Mexican drug trade, and as of 2015, the numbers increased to 93 out of 12218. However, this “beheading” of organizations did not lead to a decline in violence, but rather created an environment for it to grow. A temporary vacuum in both internal leadership and territorial control was created once a leader or top member of an organization was killed or a captured. Intra-cartel conflict would arise as members fought to gain control of the DTO, and factions inside the organizations formed. Once aware of the internal rifts, rival DTOs would attack in order to further destabilize the organization and to encroach on the weakened cartel’s territory. This has been referred to as DTOs going on a “feeding frenzy” once an “internal vacancy chain” caused by the elimination of a leader had been detected19. This effect has been observed in the recent growth of the Sinaloa, Los Cuinis, and Jalisco Nueva Generación cartels.

Another cited cause of the increased violence is the militarization of the fight against the cartels. As stated earlier, the DTOs are heavily involved in corruption in Mexico, and have infiltrated the police from the municipal all the way to the federal level. The Calderón administration decided it was necessary to replace these civilian forces with military personnel in order to better guard against such corruption. In doing so, 50,000 military personnel were mobilized in order to replace much of the civilian police force20. This, in combination with the splintering of many of the DTOs, forced an escalation of violence as the cartels fought for new leadership, territories, and survival.

Another disheartening trend in Mexico is the increase in kidnappings, extortion, and the expansion and brutality of the violence. Since 2012 there has been 52.7% increase in kidnappings, and there are no indicators showing a slow down for the time being21. The gravity of the situation due to this increase is even more pronounced when considering the ineptness that security and police forces have shown when dealing with such crimes. As of February 2014 there are still more than 26,000 people confirmed “disappeared”22. Worse for society, the DTOs have increased the frequency and brutality of attacks on the general public. The tragedy in Iguala where 43 student teachers were arrested, turned over to cartels, and then murdered is case and point of this expansion. Also, the attack of the Cartel Jalisco Nueva Generación in Jalisco shows the increased scale with which the DTOs are attempting to solidify their power. Major roadways were blocked by the cartel, which affected transit to neighboring states. During the attack a military helicopter was shot down; 11 banks, 36 buses, and 5 gas stations were burned; and 15 people were killed. Also, there has been an increase in the assassination of government officials deemed “uncooperative”. In 2010 alone, DTO affiliated gangs assassinated one gubernatorial candidate and 12 mayors23, and the numbers have increased to include a total 40 mayors as of 201524.

Nevertheless, there are a few positives amongst all of the negative trends. First, the Mexican national security system has reported drops in the homicide rate the past two years. 2013 witnessed a 16.5% decrease and 2014 had a 15% decline25. Also, when violence is disaggregated geographically it becomes apparent that it is heavily concentrated, with most of it occurring in areas of heavy trafficking and production. In 2008, 60% of murders took place in three cities: Tijuana, Culicán, and Ciudad Juárez. Violence has spread somewhat throughout the country, but it is still highly condensed. Data has shown that 80% of homicides related to drug trafficking have occurred in only 162 of Mexico’s municipalities, which represents only 7% of the country’s municipalities; even this can be broken down into 6 clusters of 36 municipalities, which demonstrate the majority of violence26. This is a trend that authorities must pay attention to. A plan of action against the DTOs could be to concentrate the bulk of security initiatives and campaigns against the cartels in the identified high violence zones. The balloon effect whereby DTOs and violence spill over into the relatively more peaceful areas could be avoided if efforts are made to first secure those areas.

Corruption: The extent and reach of corruption in Mexico is massive, and an even more troubling factor is how involved organized crimes and DTOs are in the system. The corruption goes beyond just bribery of local police officers and includes top officials at some of the most prominent institutions like PEMEX (the state-owned oil monopoly) and the executive branch. The recent allegations against Peña Nieto do not inspire much faith in the fight against corruption. He entered office on the platform of cleaning up the graft and backdoor dealings: “Feel proud because your vote is going to change Mexico. We are going to leave behind old practices. This is a political project committed to progress and democracy”27. He pushed congressional reform to create a National Anticorruption System, calling for more coordination on a local level to fight corruption. He also endorsed legislation that requires public servants to list properties and declare conflicts of interest28. However, recent accusations against Peña Nieto and his finance minister, Videgaray, have placed them in the center of a conflict of interest scandal. Allegedly, the construction company that built the mansions of both Peña Nieto and Videgaray was on the receiving side of multiple lucrative government contracts. Peña Nieto has done much to calm the situation and move forward. However, allegations such as these hinder the effort to form a culture that abides by the rule of law, which is necessary for negative internalities like corruption to be eradicated.

Mexican Finance Minister, Luís Videgaray stated, “We can do 10 energy reforms and if we do not have trust, we will not seize the full potential of Mexico’s economy”29. He is correct; however, they still have not gained the trust of the Mexican public. As illustrated with the Latinobarómetro polls, the population is losing faith in not only the government but most other institutions as well, and with good reason. Studies show in every state at least 65% of the population believes the public sector to be corrupt, and 44% of Mexican businesses report having to pay bribes30. Other studies show the population believes that political parties and the legislative branch are involved in some form of corruption, 91% and 83% respectively31. A government cannot function properly if they do not have the trust, faith, and support of its public. The voids created by such sentiment are easily filled by organizations like DTOs.

The lack of trust also extends to both the police force and the judicial system. As stated earlier, 75.5% of those polled believed that the police did nothing or little. This sentiment is understandable when considering in August of 2010 alone more than 3,200 federal police officers, roughly 10% of the force, failed the basic integrity test, and 465 other officers, including the Chief, were fired because of the inability to carry out their job32. As of November 2014 a total of 18,000 municipal and 20,000 state police failed the vetting exam33. On top of that, infiltration by the DTOs is so profound that the corruption goes beyond just turning a blind eye to their activities. There have been many instances where the police forces have carried out violent acts on behalf, or collaborated with, the DTOs. The tragedy involving the 43 student teachers in Iguala, Guerrero is a perfect example.

Adding to the problem is the country’s inability to create and monitor a professional police force on the municipal and state level. Only 4 states offer a professional career in law enforcement; only 9 states have a system for vetting and evaluating officers; of those 9, only 6 have dismissed individuals deemed unreliable; and it is estimated that 50,000 officers are now operating on expired vetting certificates34. The normal police officer’s decision to accept bribes or collaborate with DTOs is not difficult to understand when considering the fact police officers only earn between $9,000-$10,000 a year and could double or triple their total salary by accepting bribes35. A way to combat this type of bribery is to create a more professionalized police force that earns a higher salary. However, budget constraints have forced the Peña Nieto administration to do the opposite. The 2016 budget cuts include: $70 million less allocated to the Gendarmerie, created to combat the DTOs; $100 million less for the overcrowded and corrupt prison system (see the escape of “El Chapo”); and $15 million less for “Plataforma México”, the nation’s important criminal database36.

The judicial system is also victim to DTO corruption and influence. A 2010 Washington Post article stated that out of all the arrests made there is only a 1% to 2% chance that they will end any conviction or time served37. There are many examples of high-ranking DTO leaders escaping convictions and prison time. Rafael Quintero, former leader of the Guadalajara Cartel, was awarded an appeal and released from custody because of “process violations”. Rodrigo Vallejo, the son of a governor who had cartel connections, was also released on technicalities38. This level of impunity has lead to Mexico’s poor ranking in “rule of law” studies. The World Justice Project ranked Mexico 79 out 102 in their “Rule of Law Index”, which base their rankings on: Constraints on Government Powers; Absence of Corruption; Open Government; Fundamental Rights Order and Security; Regulatory Enforcement; Civil Justice; and Criminal Justice39. The results of the Latinobarómetro polls are not difficult to understand given these statistics.

Economic Implications: It is obvious that such prevalent violence and corruption directly affect the population’s sense of security, but it also affects the economic wellbeing of the nation on a micro and macro level. As a whole, the Mexican Central Bank estimated that corruption cost the country a total of 9% of its $1.8 trillion economy, and the total amount spent on and damages incurred during the war against the DTOs accounts for a staggering 22% of the total GDP40. According to Arturo Franco at the Wilson Center, Mexico is missing the opportunity to take advantage of businesses looking to move from China. In 2011, 70% of companies leaving China considered relocating to Mexico, but in 2014 that percentage dropped dramatically to 29%41. While there are many factors that can influence this percentage, such as the number and type businesses looking to relocate, it is undeniable that the risk created by increased violence, extortion, and continued corruption have contributed to the fall.

Tax evasion and money laundering are other areas causing large revenue losses for the Mexican government. According to Global Financial Integrity, developing nations lost a total of $991.2 billion to crime, corruption, and tax evasion42. It is estimated that between 1970 and 2012 Mexico lost $872 billion to crime, corruption, and tax evasion and this amount has only been increasing over the past decades; estimates now put the annual total loss from money laundering and tax evasion at $50 billion a year43. It is also believed that these are conservative estimates considering the majority of DTO business is conducted in “in-kind” product transfers and cash. The reasons for such high numbers are, but not limited to: the large underground and informal markets; money laundering by DTOs that are now operating more as transnational crime organizations; and the public’s distrust in the banking sector. The seriousness of this problem cannot be overstated because these are funds that could be applied to social development programs, which is an area that needs to be addressed and improved in order to quell the DTO influence amongst marginalized groups.

The DTO effect also extends to the small and medium sized business owner. The amount of extortion experienced in Mexico has risen since the cartels have advanced their businesses past just drug trafficking. The American Chamber Mexico conducted surveys that included both Mexican and International business owners. The results show the main concern of those polled was the security of their employees. 75% claimed that their business has run into problems due to the insecurity of the country, and 60% of respondents feel as if they are less safe now than in the past44. Polling results such as these are understandable given the occurrence of events such as the ambushing of a birthday party by cartel members that resulted in 17 deaths, allegedly because a local business owner refused to pay the protection “fees”45. In areas considered DTO strongholds the influence is much more pronounced. For example, 85% of formal businesses in Michoacán are believed to have some level of connection with the local drug organization46.

4. Initiatives to Combat Crime and Corruption

Mexico is a country poised to be a player in the world economy, but it is necessary to curb and diminish the influence of the DTOs by correcting the institutional deficiencies that permit such violence and corruption. Henrique Peña Nieto ran on a platform promising to change the Calderón security strategy. Calderón focused on a more centralized plan, which replaced the municipal and state police forces with a stronger military presence. As stated earlier, upwards of 50,000 military personal took on security responsibilities. There was also an increase in cooperation between the United States and Mexico through the Merida Initiative, which will be discussed later. This led to increased intelligence sharing between the nations, and an increase in the number of extraditions of high-level criminals. The number of extraditions continued to increase every year under Calderón except for 2010 and 2011, and reached its height in 2012 with 11547.

However, Peña Nieto entered office with the goal of overhauling Mexico, and the security strategy was part of this plan. “Whereas the Calderón administration was obsessed with security, President Peña Nieto has been obsessed with not being obsessed with security. An aggressive press campaign [i.e. “Mexico’s Moment”] has tried to make Mexico the new darling of international investors, as the BRICS countries have begun to lose their luster”48. This perfectly sums up the direction that Peña Nieto has attempted to take the country. He has liberalized the economy by opening the energy sector dominated by the corrupt and inefficient PEMEX, and he expedited tax, judicial, and electoral reform. Most importantly he has attempted to fight the DTOs from a different angle than the previous administration, which saw unprecedented increases in violence.

Changes: Peña Nieto’s security agenda is built on six pillars: Planning; Prevention; Protection and Respect of Human Rights; Coordination; Institutional Transformation; and Monitoring49. So far, the areas that have received the most attention are “Prevention” and “Institutional Transformation”. The Peña Nieto government has created a national crime prevention plan, and is attempting to streamline the criminal procedural codes between state and federal governments. He has also moved the secretariat of public security and other policing/intelligence units under the control of interior ministry to facilitate international and domestic intelligence sharing.

It is still too early to draw a conclusion on the effectiveness of his changes. As stated earlier, the homicide rate has fallen since Peña Nieto took office, but that has also coincided with an increase in kidnapping and extortion cases. Also, his reluctance to cooperate with the United States at the same level as the Calderón administration has further exposed the corruption and influence of the DTOs in the judicial and prison system. He refused to extradite “El Chapo” to the United States as a show of Mexican sovereignty, and the cartel leader was able to walk out of Mexico’s most secure prison.

Mérida and Beyond: Both Calderón and Peña Nieto have had to carryout their security strategies through the framework of the multi-lateral Mérida Initiative. It is a joint effort between the United States, Mexico, and other Central American countries to combat the drug trade and violence; however, most of the U.S. focus is on Mexico. It is based off of the concept of shared responsibility whereby the United States works to control the problem of domestic demand for drugs, outflow of cash to Mexico, and transportation of weapons across the border, while the Mexican government confronts crime and corruption50.

Mérida was allocated $2.5 billion in order to accomplish its goals and implementation started in the fiscal year of 2008. It is broken down into the following four pillars: 1) Disrupting Organized Criminal Groups; 2) Institutionalizing the Rule of Law; 3) Creating a 21st Century Border; 4) Building Strong and Resilient Communities51. Pillar 1 was characterized by the United States supplying the Mexican government with the means to combat the cartels, which coincided with Calderón’s increased militarization of the conflict. The bulk of expenditures during Pillar 1 were used on the transfer of hardware such as aircraft, helicopters and surveillance equipment, but funds were also allocated for training, with a focus on financial crimes52.

The process has now progressed to Pillar 2 and has concentrated on two areas: reforming the police, justice, and penal system and trying to create a system based on the “rule of law”53. In 2008, judicial reform directed at changing the Mexican trial system from a closed-door process to an open-court system was passed, and Nieto has increased focus on this by allocating more funds to aid the process. So far 26/32 states have legislation starting the process, and 16 are at least partially operating under the system; states that have implemented the reforms have seen positive results with faster case resolution, less impunity, and drop in pre-trial detention54. The decrease in pre-trial detention is important because as much as 40% of inmates in a system that is 22% overcrowded are still awaiting trial55. These reforms are and will continue to be costly because changes range from revamping infrastructure to retraining legal professionals. USAID formed and funded a rule of law program to provide assistance with the changes, but potential progress relies on the political will of those in power in Mexico. Optimism should remain guarded as is evidenced by the expected budget cuts of 2016.

Conclusion

Mexico is not a lost cause as the statistics may lead one to believe. Other “darling” countries in the region have higher sustained homicide rates, and it is not a pariah on the international market like Argentina. As the Financial Times points out in its special report on Mexico, it is a country on the verge of prosperity, but its future is hanging in the balance. It has a demographic advantage with an average age of 26; it is neighbor to the largest economy in the world; has free and diversified markets; and a growing middle class56. The problems are not purely economic in nature, and the reforms in this area should continue. However, the potential gains will not be realized if the current security and corruption challenges caused by the DTOs are not resolved.

To be fair, much of the blame resides with the U.S. It is the destination for Mexico’s drugs, and a payroll source for DTOs. The U.S. provides 90–95% of demand for the Mexican cocaine market, which is worth between $1.2 and $7.2 billion57. The amount of money smuggled between the United States and Mexico is estimated to be as high as $36 billion58. The United States is also a large supplier of illegal firearms in Mexico, a process facilitated by lifting of the assault rifle ban in 2004. Money fuels corruption, and weapons fuel violence; large portions of both have their origin in the United States.

That being said, the U.S. is not the only, nor the main, reason for the dire situation in Mexico. There exists a culture of “corruption” in the Mexican government, and it starts in the executive. It is not labeled corruption, but the president wields “meta-constitutional” powers that allow him to bypass the laws on the books. There is no opportunity for institutional and cultural reform to combat corruption if the president will not subject himself to the rule of law.

Mexico is currently losing the battle against the cartels, and a new direction with new reforms and policies is needed. Recommendations are:

1. The United States must do more to prohibit the southern flow of money and weapons. More resources should be allocated from the Mérida Initiative to financial crimes intelligence; addressing monitoring issues at the border and laundering practices such as over-invoicing should be prioritized. This could also be an advantageous time to address weapons controls due to the current climate in the U.S.

2. A bi-lateral effort should be made by both the United States and Mexico to address demand of illegal substances. Further experimentation of decriminalization and legalization should be explored; Portugal could be used as a framework for possible policy changes.

3. Short-term options for increased quality and trust in security would be to allocate funds to hire private security firms; however, this is unlikely, as it is a perceived encroachment on the power of the government.

4. Further development of “at-risk” communities should be prioritized in order to prevent recruitment of marginalized groups and youth.

5. Finally, the Mexican government should explore deep institutional reformation. Crime and corruption will never decrease if accountability is non-existent. Potential avenues for creating such reform include allowing investigation by independent groups autonomous of the government, much like the CICIG in Guatemala.

References

1. Harcourt, T. (2013, March 13). Mexico’s Moment. The Globalist.

2. “Global Peace Index.” Institute for Economics and Peace Reports. 1 June 2015. Web. 1 Nov. 2015. <http://economicsandpeace.org/wp-content/uploads/2015/06/Global-Peace-Index-Report-2015_0.pdf>.

3. Ibid

4. See Appendix 1.0

5. Noriega, Rodger, and Felipe Trigos. “Mexico’s Cycle of Crime and Corruption.” American Enterprise Institute. p.4

6. “Corruptions Perception Index 2014”; Transparency International; p.5

7. Noriega, Rodger, and Felipe Trigos. “Mexico’s Cycle of Crime and Corruption.” American Enterprise Institute. P.4

8. See Appendix 1.1

9. See Appendix 1.2

10. Beittel, June;“Mexico’s Drug Trafficking Organizations: Source and Scope of Rising Violence”; Congressional Research Service, January 2011; p.4

11. Ibid p.5

12. Ibid p.6

13. See Appendix 2.0

14. Lee, Briana; “Mexico’s Drug War”; Council on Foreign Relations; March 2014; p.2

15. Finklea, Kristen, and Seelke, Clare; “U.S.-Mexican Security Cooperation: Merida Initiative and Beyond”; Congressional Research Service; May 2015; p.1

16. See Appendix 3.0

17. See Appendix 3.1

18. Finklea, Kristen, and Seelke, Clare; “U.S.-Mexican Security Cooperation: Merida Initiative and Beyond”; Congressional Research Service; May 2015

19. Beittel, June;“Mexico’s Drug Trafficking Organizations: Source and Scope of Rising Violence”; Congressional Research Service, January 2011; p.12

20. Lee, Briana; “Mexico’s Drug War”; Council on Foreign Relations; March 2014

21. Noriega, Rodger, and Felipe Trigos. “Mexico’s Cycle of Crime and Corruption.” American Enterprise Institute; September 2015; p.4

22. Beittel, June;“Mexico’s Drug Trafficking Organizations: Source and Scope of Rising Violence”; Congressional Research Service, January 2011 p.3

23. Ibid. Summary

24. Lee, Briana; “Mexico’s Drug War”; Council on Foreign Relations; March 2014

25. Finklea, Kristen, and Seelke, Clare; “U.S.-Mexican Security Cooperation: Merida Initiative and Beyond”; Congressional Research Service; May 2015; p.3

26. Beittel, June;“Mexico’s Drug Trafficking Organizations: Source and Scope of Rising Violence”; Congressional Research Service, January 2011, p.15

27. Financial Times: Special Report “Modern Mexico”; March 2015

28. Ibid

29. Ibid

30. IMCO; “Mexico Anatomy of Corruption”; http://imco.org.mx/politica_buen_gobierno/mexico-anatomia-de-la-corrupcion/;

31. Noriega, Rodger, and Felipe Trigos. “Mexico’s Cycle of Crime and Corruption.” American Enterprise Institute; September 2015; p.4

32. Beittel, June;“Mexico’s Drug Trafficking Organizations: Source and Scope of Rising Violence”; Congressional Research Service, January 2011, p.4

33. US-Mexico Security Cooperation: Merida and Beyond p.12

34. Mexico’s Cycle of Crime and Corruption p.5

35. Mexico’s Drug War; Council on Foreign Relations

36. Mexico’s Cycle of Crime and Corruption p.5

37. Selee, Andrew, and Shirk, David; “Five Myths About Mexico’s Drug War”; Washington Post; March 2010

38. Mexico’s Cycle of Crime and Corruption p.4

39. “Rule of Law Index”; World Justice Project; http://worldjusticeproject.org/sites/default/files/roli_2015_0.pdf

40. Mexico’s Cycle of Crime and Corruption p.4

41. Franco, Arturo, “Mexico: The Unbearable Cost of Distrust”; Wilson Institute 2015; https://www.wilsoncenter.org/article/mexico-the-unbearable-cost-distrust

42. Cascoigne, Clark; “New Study: Crime, Corruption, Tax Evasion Drained a Record US991.2 Billion in Illicit Financial Flows in Developing Economies in 2012”; December 2014; http://www.gfintegrity.org/press-release/new-study-crime-corruption-tax-evasion-drained-a-record-us991-2-billion-in-illicit-financial-flows-from-developing-economies-in-2012/

43. Ibid

44. “Drug Trafficking, Violence, and Mexico’s Economic Future”; Wharton School of Business 2011; http://knowledge.wharton.upenn.edu/article/drug-trafficking-violence-and-mexicos-economic-future/

45. Ibid

46. Mexico’s Drug Trafficking Organizations p.26

47. See Appendix 4.0

48. “Mexico’s War on Drugs”; Council on Foreign Relations

49. US-Mexican Security Cooperation: Merida and Beyond p.4

50. Ibid p. 6

51. See Appendix 4.1

52. US-Mexican Security Cooperation: Merida and Beyond p.9

53. Ibid p.10

54. Ibid p.13

55. Ibid p.13

56. Financial Times; Special Report: “Modern Mexico”; March 2015

57. Farah, Douglas; “Money Laundering and Bulk Cash Smuggling”; Shared Responsibility; Woodrow Wilson International Center for Scholars 2010; p155

58. Ibid p.154