Pubdate: Sat, 04 Jun 2011 Source: Wall Street Journal (US) Copyright: 2011 Dow Jones & Company, Inc. Contact: http://www.wsj.com/ Details: http://www.mapinc.org/media/487 Authors: Darcy Crowe and David Luhnow MEXICAN CARTELS EXPAND SOUTH BOGOTA, Colombia-Mexico's biggest cartels are expanding their operations throughout Central and South America, gaining power as they diversify and consolidate in new regions but also exposing themselves to new challenges, according to top law-enforcement officials. Cartels like the Sinaloa gang and the Zetas are sending more operatives to South America than ever before, seeking to fill the void left by the demise in recent years of powerful Colombian drug organizations. "There are more Mexican drug-cartel emissaries in South America than in any other time in the history of Mexican cartels and drug operations," said Jay Bergman, Andean regional director for the Drug Enforcement Administration, in an interview this week. Traffickers in Colombia, Peru and Bolivia, which in the past constituted the epicenter of the cocaine business, are being relegated to wholesale suppliers, with Mexican cartels now taking a larger role in the logistics of shipping out massive cocaine hauls from South America, Mr. Bergman said. The move by Mexican cartels to South America reflects a fundamental restructuring that has been going on for several years in the cocaine business that has shifted the center of power from South America to Mexico. As Colombia waged a successful battle in the 1990s to break up the Medellin and Cali cartels into many smaller groups, the Colombians lost their leverage over the Mexicans who had acted as intermediaries in the business. Thanks to a greater number of less powerful Colombian cocaine suppliers, Mexican gangs now play the suppliers off one another and get much lower prices. The upshot: Mexico's gangs became "price setters" instead of "price takers," according to Luis de la Calle, a Mexican economist and former top trade official. "The Mexicans took over from the Colombians as the oligopolists of the cocaine trade," he said. The effect was a dramatic increase in profits-and power-for Mexican gangs, setting the stage for both the growth of Mexican cartels and a fight over the spoils. Since December 2006, some 40,000 people in Mexico have died due to the violence between cartels. Meanwhile, weakened Colombian cartels have become easier targets for Colombia's law enforcement. Nowadays, Colombian drug gangs focus on production and leave the riskier side of trafficking to the Mexicans, Mr. Bergman said. Mexican gangs are also expanding their operations in Central America, both to escape attention in Mexico and to exploit countries with fewer resources and historically weak rule of law. Cocaine seizures are up throughout Central America, according to Antonio Mazzitelli, the Mexico representative for the U.N. Office on Drugs and Crime. The Sinaloa cartel is even trying to grow opium poppies in Guatemala now, he said. "Both the Sinaloa cartel and the Zetas think Mexico is getting too messy, so they are starting to move to Central America," Mr. Mazzitelli told a conference this week in Mexico. Guatemala, El Salvador and Honduras are already among the most violent countries in the world, with homicide rates well above Mexico. Even though some of Mexico's most notoriously violent cartels, like the Zetas, are active in Colombia, the Mexicans have been careful to avoid using violence to take over the business from the Colombians, according to Mr. Bergman. That's mostly because the Mexicans fear Colombian law enforcement. "No Mexican cartel wants to come here and go toe-to-toe with the Colombians," Mr. Bergman said. "In business schemes, there was never anything like a Wall Street hostile takeover," he added. The larger role the Mexicans are taking in the drug trade is opening new flanks as authorities move to quash their operations. "The Achilles heel for a drug organization is when they become more overstretched," Mr. Bergman said. "The Mexican cartels were insulated, but now they don't have that insulation because now they have to move to South America." - --- MAP posted-by: Jo-D