Homeland Security Watch

News and analysis of critical issues in homeland security

April 4, 2013

Industry Consolidation: Implications for deadly violence in the United States

Filed under: Border Security,Risk Assessment — by Philip J. Palin on April 4, 2013

Monday the Associated Press released an investigative piece on the role of Mexican drug cartels in the United states.   According to this report,

Mexican drug cartels whose operatives once rarely ventured beyond the U.S. border are dispatching some of their most trusted agents to live and work deep inside the United States — an emboldened presence that experts believe is meant to tighten their grip on the world’s most lucrative narcotics market and maximize profits.

If left unchecked, authorities say, the cartels’ move into the American interior could render the syndicates harder than ever to dislodge and pave the way for them to expand into other criminal enterprises such as prostitution, kidnapping-and-extortion rackets and money laundering…

“It’s probably the most serious threat the United States has faced from organized crime,” said Jack Riley, head of the Drug Enforcement Administration’s Chicago office.  MORE

(For much more detail on the Mexican drug cartels please see a March report by the International Crisis Group: Peña Nieto’s Challenge: Criminal Cartels and Rule of Law in Mexico.)

One way to view Mexican drug operations in the United States is as an increasingly concentrated source of supply for a popular and high margin consumer product. In most major US cities — and increasingly in suburban and rural areas too — the Sinaloa Cartel is the primary source while a range of street/prison gangs handle wholesale and retail sales.

According to the 2011 FBI National Gang Threat Assessment,

There are approximately 1.4 million active street, prison, and Outlaw Motorcycle Gang (OMG) gang members comprising more than 33,000 gangs in the United States. Gang membership increased most significantly in the Northeast and Southeast regions, although the West and Great Lakes regions boast the highest number of gang members. Neighborhood-based gangs, hybrid gang members, and national-level gangs such as the Sureños are rapidly expanding in many jurisdictions. Many communities are also experiencing an increase in ethnic-based gangs such as African, Asian, Caribbean, and Eurasian gangs. Gangs are responsible for an average of 48 percent of violent crime in most jurisdictions and up to 90 percent in several others, according to NGIC analysis.

The financial returns of the drug trade — and increased concentration of supply — is reflected in a more streamlined retail network.  This rationalization of major US regional markets is, among other results, producing what can be seen as significant Merger & Acquisition activities across the retail environment.  According to the National Gang Threat Assessment:

Mexican Drug Trading Organizations (MDTOs) are among the most prominent Drug Trading Organizations (DTOs) largely because of their control over the production of most drugs consumed in the United States. They are known to regularly collaborate with US-based street and prison gang members and occasionally work with select OMG and White Supremacist groups, purely for financial gain… The prospect of financial gain is resulting in the suspension of traditional racial and ideological division among US prison gangs, providing MDTOs the means to further expand their influence over drug trafficking in the United States… Gangs’ increased collaboration with MDTOs has altered the dynamics of the drug trade at the wholesale level. US gangs, which traditionally served as the primary organized retail or mid-level distributor of drugs in most major US cities, are now purchasing drugs directly from the cartels, thereby eliminating the mid-level wholesale dealer. Furthermore, advanced technology, such as wireless Internet and Voice over Internet Protocol (VoIP) capabilities, has made the recruitment, collaboration, and coordination of criminal activity more efficient and lucrative, and allows direct contact between the gangs and DTOs.

One outcome of this radical shift in the supply chain for illicit drugs is the emergence of ongoing collaboration between Mexican sources, long-time African-American regional wholesalers, and several white Aryan retail networks (with lots of others in the mix).  But some suggest intense local violence — such as that experienced over recent years in Chicago — can also be understood as competition over market share.

For the most radical White Supremacist organizations this collaboration with the “lesser races” is a case of the ends justifying the means.  Drug profits are a lucrative way to fund the coming revolution… as well as the current lifestyle.  In the annual estimate of the Texas gang threat released earlier this week, the state Department of Public Safety provides this quick overview of the Aryan Brotherhood of Texas:

The Aryan Brotherhood of Texas (ABT) was formed as a prison gang and places its racist ideology secondary to its everyday criminal activities. ABT is not considered a significant threat to the border areas of Texas but is considered a prevailing gang that threatens Texas internally because of its involvement in violent crimes, the methamphetamine business, and frequent property crimes.

For what it’s worth, most of my personal contacts in Federal and Texas law enforcement do not believe the recent assassination of Kaufman County, Texas prosecutors will actually be traced to the Aryan Brotherhood of Texas — as frequently mentioned in recent days – much less the killing of the Colorado prisons director.  The assassination yesterday of a West Virginia sheriff has, however, spurred concerns related to copy-cat killings.

“While I don’t think they were involved this time, I’m sure,” said one long-time DEA official, “the drug-lords are watching very carefully how this all plays out. “

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3 Comments »

Comment by William R. Cumming

April 4, 2013 @ 9:39 am

Excellent post and of course raises some very very basic issues.

First, going back to J.Edgar Hoover the culture of the FBI was NOT repeat NOT to take on either [1] organized crime and [2] drug enforcement. They still don’t because Hoover feared internal FBI corruption by any efforts in these areas.

Second, with the Organized Crime Strike Forces [no longer utilized by DoJ] DEA was beloved because DEA agents would do so much and the FBI so little.

And thus the career prosecutors in DoJ advocated strongly against their OC helpmates, DEA, from being tranferred to DHS. Even so the DHS role in drug enforcement and gang violence is growing by leaps and bounds.

And finally of course demand for illegal and legal drugs grows daily with over 40% of all American adults taking some form of psychotropic drug, legal or illegal.

Don’t ask for whom the bell tolls?

Comment by William R. Cumming

April 4, 2013 @ 9:41 am

For some unusally interesting take on motorcycle gangs in USA try watching the series “Sons of Anarchy” with Katy Segal and Ron Perelman.

Comment by William R. Cumming

April 4, 2013 @ 11:35 am

Did I mention the Tranportation Sector and supply chains have long been attractive targets for OC and Cartels?

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