Since his first escape from a maximum security prison in 2001, to this date, the authorities have barely seized three jewels, two vehicles, one house, eight ammunition clips, one grenade, 171 munitions and four items, among other goods of lesser value from the mythical chief of the Sinaloa Cartel. After his extradition, the United States is now going after his fortune. But it is not the only case that needs to be amended. Nearly 200 requests for information to the Mexican State reveal that, even if the criminal organizations get beheaded in the War against Drugs, their wealth and financial structures remain almost intact, little of it is confiscated, but even less thereof is publicly known.
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Part one | Since Joaquín 'El Chapo' Guzmán escaped for the first time from a maximum security prison in Jalisco, western province of Mexico, the Attorney General's Office has not fought the financial structure of his powerful cartel, Sinaloa's, or his personal fortune, calculated at $21.6 billion. This is demonstrated by documents of the Federal Prosecutor's Office.
His first escape was in January 2001. He was then recaptured in the port of Mazatlan in February 2014 and imprisoned. He managed to escape for the second time going through a tunnel in July 2015. He evaded the penitentiary system over and over again and then he was recaptured in early 2016.
Surprisingly, a year later, the Mexican Government decided to extradite him to the United States one day before Donald Trump took over the presidency, on January 20, 2017.
Three different governments - those of presidents Vicente Fox, Felipe Calderón and Enrique Peña Nieto - passed, and the Attorney General reports that, in the period 2001-2017, only three jewels, two vehicles, a house, eight ammunition clips, a grenade and 171 munitions were confiscated from him. The value of what was recovered is minute compared to that of the real estimated estate of El Chapo, which is in fact similar to the man ranked 33rd in the top 100 of richest people in the world, Michael Dell, creator of the computers company of the same name, according to Forbes magazine.
The information available from the institutions in charge, about the quantities and the value of the seized goods is limited and irregular
The analysis of three databases of the Attorney General's Office, obtained by requests through the Transparency Law which is in force in the country, shows that although the Mexican State has apprehended high-profile drug traffickers, the same authorities tend to ignore the magnitude of their financial structures. The information available from the institutions in charge, about the quantities and the value of the seized goods is limited and irregular. And in cases where figures are handled, the value of registered objects and money is minuscule in contrast to estimates of the mafia's assets.
The institutional weakness in the financial investigation against the mafias also affects judicial processes that backfire to the State. In some cases, the government has had to financially compensate damages to third parties for goods seized from drug traffic activities. The situation is exacerbated by the extradition of narcos abroad, because Mexico, by ignoring the structures of properties and economic resources of crime, risks not being able to claim them.
An interview was requested with the Attorney General, Raúl Cervantes, to clarify differences in the data and to delve into the subject but, until the date this report has been written, it was not granted.
In the first days of May, Cervantes stated in a television interview that El Chapo did not use the financial system. "Every time we were searching, we said: 'He doesn't use the financial system'. However, this is not so simple. There are others who do".
El Chapo. En 2015, la PGR acepto´ que no habi´a aseguramientos registrados al capo ma´s buscado del mundo..... by ArmandoInfo on Scribd
The Attorney General's Office has been asked twice for information on everything seized from the cartel led by El Chapo since 2001. On the first occasion, in September of 2015, the report was as follows: "It is made known to you that in relation to Joaquín Guzmán Loera we have secured a total of 0 real estate, houses, land, companies and bank accounts (...) ". But the document also made a caveat: "There may be securings that, given the legal situation and procedural status, may not be reported".
"It is not possible to disaggregate and/or discriminate if what has been secured belongs to the criminal organization referred to in your request"
In the other request, made in February of this year, the Attorney General stated: "It is not possible to disaggregate and/or discriminate if what has been secured belongs to the criminal organization referred to in your request (Sinaloa’s Cartel)". Instead, the Attorney General's Office remitted the total secured money from drug traffickers between 2001 and 2016. In total, about 823 million dollars. It also delivered the content of a series of press bulletins.
In these press statements, the Attorney General's Office points out several measures taken for the arrest of individuals, El Chapo himself among them, as well as the securing of various assets. However, it is stated that from the documents, "it is not possible to obtain the securings corresponding specifically to the person of your interest".
For example, in a press release dated February 22, 2014, the Attorney General's Office boasted how Navy officials apprehended the drug trafficker. José Murillo Karam, the then Attorney General, said: "In this operation, we have secured (...) 97 long weapons, 36 small weapons, two grenade launchers, one rocket launcher, 43 vehicles (19 armored ones), 16 houses and four ranches up to this moment".
A few days later, on February 26, this information was further expanded at another press conference: "97 long weapons, 36 short weapons, 311 ammunition clips, two grenade launchers, one rocket launcher, two rockets, one 9-millimeter sub-machine gun, two explosives, 6,044 cartridges, nine fragmentation grenades, four 40-millimeters grenades for long weapon, 43 vehicles (19 armored), 38 units of communication equipment and 14 houses. Also 420,000 pesos (23,000 dollars) and 4,690 dollars, 3,110 kilograms of methamphetamine (crystal), 82 kilograms of cocaine and 25 kilograms of marijuana".
The National Center for Asset Securing Control, nowadays it is outdated, as there is no data corresponding to the last three years
The Attorney General did not specify who owned these goods or its current location. Neither clarified the discrepancies between the data of both statements.
In August 2014, with the aim of maintaining a stricter control over secured assets from crime organizations, the Attorney General's Office started the operations of the National Center for Asset Securing Control. Nowadays it is outdated, as there is no data corresponding to the last three years.
The official website offers assets securing information between 2006 and 2014, showing as grand total the equivalent to $589.8 million (in pesos, dollars and euros), as well as companies, boats, real estate, vehicles, aircrafts, works of art, weapons, hydrocarbons and drugs, among others, which were secured from crime. But it does not specify the value of each property, movable or immovable, nor to which drug trafficker or cartel correspond.
El Chapo. Despue´s de su extradicio´n a EU, la PGR informo´ sobre aseguramientos mi´nimos al narcotraficant... by ArmandoInfo on Scribd
But that of El Chapo is not an isolated case in regards to the benevolence or continuous omission of the Mexican State in relation to the assets of the organized crime. If the focus is expanded, the inaction over the financial structures of Mexican drug trafficking leaders can be verified. This is the response provided by the Attorney General's Office when prompted about the list of assets and bank accounts secured from the main cartels. This list features the assets of Los Zetas, Beltran Leyva, Tijuana, La Familia, del Golfo, Caballeros Templarios, Jalisco Nueva Generación, del Milenio, Resistencia, Guerreros Unidos, Juárez, Independiente de Acapulco and others.
On both occasions the request for information was addressed (in 2015 and 2017), the institution replied: "It is not possible to disaggregate and/or discriminate if the secured assets belong to the criminal organization referred to in your application". And it issues the same general listing of what the Attorney General had secured in the period 2001-2016. The offered register does not contain details of what was confiscated, only the total amounts in dollars, euros and pesos.
There is the case of Ismael 'El Mayo' Zambada, the second in command of the Sinaloa cartel in times of El Chapo. He is one of the most wanted narcos and for whom the Attorney General offers the maximum reward of 1.66 million dollars. There is nothing seized from him. "After conducting a thorough and meticulous search in their files (2001-2016), it was possible to locate zero (0) records of secured assets, i.e. houses, land, real estate, companies, money, bank accounts...".
Another example of how the financial structures of drug trafficking survive the operations of the security forces, is that of Vicente Carrillo Fuentes, brother of the late Amado, El señor de los cielos -, leader of the Juárez Cartel. There are only 115 items, two weapons, three ammunition clips and 58 munitions or cartridges reported of this individual.
Apart from the Office of the Attorney General, the Treasury Department was also consulted in February on the amounts secured and the names of the companies sanctioned for illicit activities or money laundering - including those pointed out by the United States Department of the Treasury -.
Their response: "The Financial Intelligence Unit can not provide the requested information, due to its lacking faculties regarding closures and asset securings". They also stated that it is not in his competence: "It is suggested to consult the Service of Administration and Disposal of Assets or the Federal Consumer Protection Office, which are the competent authorities to satisfy the request at hand", said Alberto Bazbaz Sacal, head of the Transparency Unit of the Treasury Department.
It is an unfruitful recommendation. The Federal Consumer Protection Office has the mission of protecting and promoting the rights of Mexican consumers, "ensuring equitable trade relations that strengthen the culture of responsible consumption and better access to products and services".
Citizen monitoring organizations have had no better response to their requests. "The information provided by the Government is so bad that it does not allow a systematization process", declared Francisco Rivas, director of the National Citizen Observatory. "They demonstrate that there is no control over the securing of assets".
Questions as where do they keep all the secured assets remain unanswered. "All this without considering what they return for processes carried out improperly", he added.
"If you just cut the heads off, those who are below want to raise and they cause a series of different violent events to achieve the upper position"
María Elena Morera, founder and president of another organization, Citizens for a Common Cause, stressed that the government is fighting crime "only partially". "If you just cut the heads off, those who are below want to raise and they cause a series of different violent events to achieve the upper position". The big cartels are multiplied in dozens of criminal gangs, dedicated, in addition to drugs traficking, to drug dealing at street level, kidnapping, extortion, piracy and theft of fuel, he explained.
In other countries, such as the United States, they have a deeper mechanism for combating mafia finances. "They investigate the bands in its entirety, which are totally identified, and at the precise moment, the upper and middle commands are broken, or the finances. These are long-term investigations, where the results are durable", he argued.
In Colombia, in comparison, a similar mechanism is successful, because it has been affected more than 49,712 assets from the organized crime
That is why the activist remarks the failure in Mexico of the Law of Extinction of Dominion, a mechanism by which the State secures the assets of illicit origin: "It has not resulted, it is useless". In Colombia, in comparison, a similar mechanism is successful, because it has been affected more than 49,712 assets from the organized crime, of which more than 10,000 have been secured by the State. "We do not really have a regime with enough strength to fight the criminal mafias”.
Fundamentally, she said, there is institutional weakness. "The Office of the Attorney General investigates and integrates the inquiries incorrectly and the Mexican State ends up paying for it. They do not put up the fight and cause institutional damage".
Osiel Ca´rdenas, li´der del Ca´rtel del Golfo.pdf by ArmandoInfo on Scribd
The former chavista governor of the State of Bolívar from 2004 to 2017 changed overnight from excessive media exhibitionism to low profile. His departure to Mexico completed the circle of the retirement plan he had been preparing while on civil service. He was now staying in the same country where the businesses of his daughter's husband flourished, which he had significantly fostered from his positions in Guayana. Now, with financial sanctions imposed on him by Canada and the United States, Francisco José Rangel Gómez prefers to stay under the radar.
Six out of every ten Venezuelan sex workers killed abroad since 2012 were in Mexico. In that country it is often about attractive girls who work as high-level company ladies or night-time waiters, businesses directly managed by organized crime. There are many clues that lead to the Guadalajara New Generation Cartel at the peak of this trade in people, with the complicity of others such as Los Cuinis and Tepito. Often the human merchandise becomes the property of capos and assassins, with whom he knows the hell of the femicides
A study by Mexican authorities confirms what the palate of the Venezuelans quickly detected: There is something odd in the Mexican canned tuna that comes in the combos of the Local Supply and Production Committee (CLAP). At least three of the brands that the poorest homes have consumed in the country since March 2016, when the state plan was formalized, have high proportions of soy, a vegetable protein that although not harmful, it does not have the same taste and protein contribution of tuna. Behind the addition of soy there is an operation to reduce costs where all the intermediaries, handpicked by the Venezuelan Government to buy the goods, have participated.
Even though there are new brands, a new physical-chemical analysis requested by Armando.Info to UCV researchers shows that the milk powder currently distributed through the Venezuelan Government's food aid program, still has poor nutritional performance that jeopardizes the health of those who consume it. In the meantime, a mysterious supplier manages to monopolize the increasing imports and sales from Mexico to Venezuela.
Mexican authorities blame Venezuelan authorities for not verifying the quality of the products included in the combos for the Local Supply and Production Committee (CLAP). Even though the companies provided false information on the packaging, they wash their hands with bureaucratic technicalities and continue granting export permits. In Venezuela, no official wants to talk about it. For months, the Government of Nicolás Maduro bought and distributed among the poorest several powdered milk brands of the lowest quality.
In Mexico, there is a long tradition of cheating in the supply of dairy products packaged for social programs. Hence, it should not be surprising that the Venezuelan corruption had found in that country the perfect formula to include in the so-called CLAP Boxes a paste purchased at auction price as cow's powdered milk. For a mysterious reason, ghostly or barely known companies are the ones monopolizing purchase orders from Venezuela.
When Vice President Delcy Rodríguez turned to a group of Mexican friends and partners to lessen the new electricity emergency in Venezuela, she laid the foundation stone of a shortcut through which Chavismo and its commercial allies have dodged the sanctions imposed by Washington on PDVSA’s exports of crude oil. Since then, with Alex Saab, Joaquín Leal and Alessandro Bazzoni as key figures, the circuit has spread to some thirty countries to trade other Venezuelan commodities. This is part of the revelations of this joint investigative series between the newspaper El País and Armando.info, developed from a leak of thousands of documents.
Leaked documents on Libre Abordo and the rest of the shady network that Joaquín Leal managed from Mexico, with tentacles reaching 30 countries, ―aimed to trade PDVSA crude oil and other raw materials that the Caracas regime needed to place in international markets in spite of the sanctions― show that the businessman claimed to have the approval of the Mexican government and supplies from Segalmex, an official entity. Beyond this smoking gun, there is evidence that Leal had privileged access to the vice foreign minister for Latin America and the Caribbean, Maximiliano Reyes.
The business structure that Alex Saab had registered in Turkey—revealed in 2018 in an article by Armando.info—was merely a false start for his plans to export Venezuelan coal. Almost simultaneously, the Colombian merchant made contact with his Mexican counterpart, Joaquín Leal, to plot a network that would not only market crude oil from Venezuelan state oil company PDVSA, as part of a maneuver to bypass the sanctions imposed by Washington, but would also take charge of a scheme to export coal from the mines of Zulia, in western Venezuela. The dirty play allowed that thousands of tons, valued in millions of dollars, ended up in ports in Mexico and Central America.
As part of their business network based in Mexico, with one foot in Dubai, the two traders devised a way to replace the operation of the large international credit card franchises if they were to abandon the Venezuelan market because of Washington’s sanctions. The developed electronic payment system, “Paquete Alcance,” aimed to get hundreds of millions of dollars in remittances sent by expatriates and use them to finance purchases at CLAP stores.
Scions of different lineages of tycoons in Venezuela, Francisco D’Agostino and Eduardo Cisneros are non-blood relatives. They were also partners for a short time in Elemento Oil & Gas Ltd, a Malta-based company, over which the young Cisneros eventually took full ownership. Elemento was a protagonist in the secret network of Venezuelan crude oil marketing that Joaquín Leal activated from Mexico. However, when it came to imposing sanctions, Washington penalized D’Agostino only… Why?
Through a company registered in Mexico – Consorcio Panamericano de Exportación – with no known trajectory or experience, Joaquín Leal made a daring proposal to the Venezuelan Guyana Corporation to “reactivate” the aluminum industry, paralyzed after March 2019 blackout. The business proposed to pay the power supply of state-owned companies in exchange for payment-in-kind with the metal.
