The narcos' booty migrates too

More than 850 Mexican drug traffickers have been extradited to the United States. But then, when the work seems to be done, Mexico realizes that in just a few cases it investigated enough to seize the finances of the mafias. Now a new chapter threatens to sour the binational fight against drug trafficking: the claim the United States has made of the fortunes of the capos.

10 August 2017
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Part three | After the extradition of El Chapo Guzman, the United States Government announced that it would go after his fortune, calculated around $21.6 billion, as a result of drug sales for more than two decades. The announcement foresees a difficult picture for the Mexican State.

In addition to confiscating minimal amounts from the main drug traffickers' fortunes, and be compelled to compensate third parties for errors in these processes - as it has been demonstrated in this series of reports, drawn from more than 200 official documents obtained by information requests -, Mexico now faces an even worse consequence of its mess in the confiscations of organized crime assets: despite being the territory where those gangs traffic, kill and do business, Mexico can be left completely empty-handed. Of the fortune of El Chapo -which represents a quarter of the estate of Bill Gates, considered the richest this year in the world by the Forbes magazine- for example, Mexico may get nothing.

The situation has warned Mexican lawmakers, who are demanding that the government stop their extradition of drug traffickers to the United States if there is no negotiation in the return of their assets insured by the US administration. The losses for the Mexican state would be substantial.

In the chart, the information for 2017 until January 9.

According to documents obtained by the Transparency Law, 1144 drug traffickers have been extradited to foreign governments between 2000 and 2017. Out of the 1064 extradited individuals that were sent to the United Stated, the majority, 853, are Mexican. Only 19 were sent to Spain and 10 to Canada, according to the reports of the Department of International Procedures of the Attorney General's Office.

"There is already an international agreement that regulates the type of relationship when a criminal is detained in Mexico and surrendered to the United States," warned Jorge Ramos Hernández, deputy chairman of the House Security Commission. "This agreement was signed seven years ago and it is still in force”. 

“The government has been lethargic in starting a high-level round table between both Treasuries

The agreement provides a percentage of distribution of the insured or seized goods based on the level of participation of each country. "But it is not enough," said the legislator. “The government has been lethargic in starting a high-level round table between both Treasuries (those of Mexico and the United States) via the chancellery. The pace must be stepped up", he said.

Therefore, deputies of the National Action Party (PAN) - which was government in Mexico between 2001 and 2012 - now suggest that Mexico claims 50% of the resources that the United States secures from the extradited offenders. Is there any precedent for a return? "Negative, not just one," said the legislator, "the federal government is failing". He explained that a real effort was made with the deportation of Edgar Valdez Villarreal, the drug trafficker known as La Barbie, but the initiative did not succeed because Valdez had American citizenship, a rule that does not apply to return the money. He must have been Mexican.

The mess in front of the USA

October 2015 La Barbie, who was the operator of the Beltrán Leyva Cartel, and Jorge Eduardo Costilla Sánchez, The Coss, leader of the Gulf Cartel, were surrendered to the United States with 11 other criminals claimed by the said country. Despite the agreement with Washington, Mexico has no reports of the return of money or property insured to criminals for crimes such as organized crime, illegal deprivation of liberty, possession of cartridges for the exclusive use of the Army, crimes against health and qualified homicide.

Another case that reveals possible losses for the State is that of Osiel Cárdenas Guillén, leader of the Gulf Cartel. He was one of the 13 most wanted men of the Drug Enforcement Administration (DEA) of the United States, by which the American entity offered up to two million dollars of reward. Cárdenas was extradited to the United States in 2007.

In the list provided by the Attorney General's Office, it is reported that Cárdenas was confiscated 904 items, 43 vehicles, 21 real estate, 18 weapons, 37 jewels, 34,926 dollars and 146 dollars, among other items of lesser value. However, the Mexican authorities do not have information of what was confiscated by the United States.

However, the situation is different from the information that was made public by the media regarding to what was frozen from Osiel: 20 million dollars in property. The same happened to the drug trafficker Alfredo Beltrán Leyva, El Mochomo, who was sentenced to life imprisonment by a Washington Court. The US government confiscated properties valued at $529, million, according to press reports.

Delayed Reciprocity

The empty Mexican coffers contrasts with the support Mexico has given to its northern neighbor in some investigations, says María Elena Morera, founder and president of Citizens for a Common Cause.

"Mexico and the United States have always worked together," she said. "Many known investigations there were conducted in Mexico. The most ethical prospect would be that the recovery of the goods would come to Mexico. However, that is not happening, there is no relationship with the United States on this issue", she said.

"Mexico has no strong research on this. I doubt that the United States will return something we did not investigate"

But although it cooperates, there is not always a financial stability in the Mexican investigations. These are cases such as those of Iván Reyes Arzate, a federal police officer, and Veytia Cambero, a former justice attorney for the state of Nayarit, in central-western Mexico. Both are related to drug cartels and were detained recently on US soil. "Mexico has no strong research on this. I doubt that the United States will return something we did not investigate", Morera said.

Amids the expectation created by compelling the United States to return the money secured from the narcos or the organized crime, there is a case that discards this possibility. In 2012, the US government sanctioned the British bank HSBC for $1.9 billion in civil forfeiture and fines for violating the Bank Secrecy Act and the Enemy Deal Act.

The bank was accused of transferring billions of dollars in support of Iran and Mexico's drug cartels to launder money through the United States financial system. "The investigation was carried out here in Mexico, but Felipe Calderón did not want to publish it. Instead, it was published by the United States and kept all the money", said Morera.

Meanwhile in Mexico, in the fourth annual government report, president Enrique Peña Nieto outlines the work carried out by the Financial Investigation Unit of the Ministry of Finance, which is responsible for combating money laundering, identifying illegal estates, simulations and illegal operations. In one section it points out: "Disarticulated criminal organizations: zero".

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