POLICY BRIEF 07.08.20 Organized Crime and the Coronavirus in Mexico Nathan P. Jones, Ph.D., Nonresident Scholar in Drug Policy and Mexico Studies Gary J. Hale, Nonresident Fellow in Drug Policy and Mexico Studies It is well known that the Covid-19 suggest that violence will continue its slow pandemic has dramatically impacted the increase with a 2.2% increase in homicides global economy, and the U.S. and Mexican in the first quarter of 2020, compared to economies are no exception. However, the same period in 2019.2 Altogether, we the impact of the Covid-19 pandemic on predict that the Covid-19 pandemic will illicit economies, including its impact on have drastic impacts on organized crime organized crime in Mexico, is lesser known in Mexico, and policy makers and law but equally important. The uncertain enforcement agents in both the U.S. and nature of how long it will take to develop Mexico will need to adapt their strategies a vaccine for Covid-19 or for communities for fighting such crime accordingly. to develop “herd immunity,” means that analyzing the impact of the pandemic on organized crime is difficult. USEFUL CONCEPTS FROM ACADEMIC In this paper we argue that the Covid- LITERATURE 19-related disruptions of supply chains The existing literature provides a number for organized crime are likely to lead to of useful concepts for understanding an expansion of predatory activities such the actions of organized crime under the as kidnapping and extortion for smaller conditions of the coronavirus pandemic organized crime groups—an amplification and social distancing lockdowns. For of existing trends. Larger organized example, John Sullivan has applied the crime groups in Mexico will likely use concept of “social banditry”3 developed “information warfare” to win the hearts and Covid-19-related by Eric Hobsbawm to organized crime in minds of locals to support their criminal Latin America and beyond in his third- disruptions of supply enterprises and to weaken the legitimacy generation gang literature.4 This kind of chains for organized of the Mexican government. These crime “social banditry” has been evident during groups will also likely have the capacity to crime are likely to lead the pandemic with cartels publicizing further expand their alliances and capitalize to an expansion of their distribution of food via pantries to on weakened local traffickers, allowing portray themselves as “Robin Hoods.” Tom predatory activities. groups such as the Cártel de Jalisco Nueva Wainwright, editor of The Economist, has Generación (CJNG) to expand their sphere discussed a similar concept, looking at of influence.1 Extended drug supply chain how drug cartels, like corporations, engage disruptions could privilege local extortion in “corporate social responsibility.”5 business models, though many drug Vanda Felbab-Brown has discussed how markets are likely to adapt and shorten criminal organizations engage in altruism drug supply chain logistics where feasible. to improve their “political capital,”6 and Additionally, data from April 2020—one Guadalupe Correa Cabrera has also used month after lockdowns began in Mexico— corporate models to analyze organized RICE UNIVERSITY’S BAKER INSTITUTE FOR PUBLIC POLICY // POLICY BRIEF // 07.08.20 crime. Her work, in addition to the work of at the U.S.- Mexico border and in the Rodrigo Canales,7 examines the concept of continental U.S. To fully understand how “branding” among organized crime groups. Covid-19 has impacted the world of drug Recently, Falko Ernst, a senior fellow trafficking in the U.S. and Mexico, it is with the International Crisis Group, used his essential to review the drug trafficking Twitter account to point to early examples of business cycle, which is comprised the Los Viagras gang handing out food in the of several critical nodes—namely midst of the coronavirus lockdowns. Robert capitalization, production, transportation, Bunker and John Sullivan also reviewed the distribution, and re-capitalization of the existing verifiable cases of food pantries run enterprise. In the case of Mexico, the by gangs and other cases of “social banditry” production and transportation nodes are in a strategic note.8 Some of the known most at play as discussed in Figure 1. cases where organized crime groups were The critical nodes of production and distributing food include the food pantries in transportation are affected by two key Guerrero and Estado de Mexico, set up by La factors. The first is geography, or where Familia cells operating under the leadership the critical activity is happening. China’s of El Pez.9 The Gulf Cartel leader El 46 also role in the supply chain, for example, distributed food in Ciudad Victoria, and is crucial. Consider that: (1) China is a the CJNG and their rivals in the battle for key supplier of essential and precursor Trafficker violence Michoacán—Los Viagras—gave out food to chemicals for Mexican drug producers, will continue unabated gain support from local populations. It was and the lockdowns related to Covid-19 in despite trafficker also reported that presumed members of the China could impact supply chains; and (2) Gente Nueva, an armed wing of the Sinaloa China has a presence at several Mexican deaths caused Cartel, distributed food in Chihuahua.10 deepwater ports that process intermodal by Covid-19. Reporting from InfoBae demonstrates shipments (ship-rail-truck). China, like another possible explanation for the social many other countries including the United work of organized crime in Mexico. Local States, is also becoming nationalist on support can help keep an eye out for potential trade issues related to personal protective rivals encroaching on their territory, as the equipment and chemicals related to reporting of Oscar Balderas demonstrated potential Covid-19 treatments.13 when he interviewed a La Familia food The second main factor affecting pantry worker from Michoacán who was the production and transportation nodes told that the price of social support was is demographics, or how the people patrolling the territory to keep out rivals. performing the activity are being affected Further, the message of the gangs is implicit; on both the supply and demand sides. they are providing the services the state On the supply side, traffickers are fails to provide.11 Organized crime groups at risk of contracting and spreading the are also using this kind of social work or Covid-19 virus but will likely not stop their “social banditry” to gain legitimacy for their activities. Infection to or among traffickers profitable activities such as drug trafficking, due to contact with drugs or packaging extortion, loansharking, territorial activities, is less likely than person-to-person and battling other groups for territorial contact,14 and despite the toll on human control to expand those activities. life that Covid-19 may take on people in any country, drugs will continue to move in sizeable quantities. For example, on COVID-19: IMPACTS ON DRUG or around March 31, 2020, a San Diego MARKETS Multi-Agency Tunnel Task Force “seized 1,300 pounds of cocaine, 86 pounds of Covid-19 has had varied effects on the methamphetamine, 17 pounds of heroin, drug trafficking supply chain, the people 3,000 pounds of marijuana and more than handling the supply chain in source two pounds of fentanyl,”15 in a tunnel countries and transit countries, and the that opened in the Otay Mesa section of demand side of the equation, particularly California.16 Thus, while there may be 2 ORGANIZED CRIME AND THE CORONAVIRUS IN MEXICO TABLE 1 — PRIMARY DRUGS PRODUCED OR TRANSPORTED THROUGH MEXICO IMPACTED BY EFFECTS OF COVID-19 ON THE SUPPLY CHAIN Opium Synthetic Opioids Marijuana Cocaine Amphetamines Coca is cultivated, Ephedra is mainly Synthetic opioids such harvested, and converted cultivated and harvested as fentanyl are into cocaine hydrochloride in China and India and Opium is cultivated, manufactured using Marijuana is cultivated, in South America, converted to ephedrine in harvested, and then chemicals from China harvested, and sold as a particularly in Colombia, China, India, and Germany. converted to heroin. (Wuhan was a particularly raw product. and transported by air Ephedrine is then shipped important source of or water to Mexico and to Mexico in ton quantities chemical precursors). eventually the U.S. via and converted to Central America. methamphetamine. SOURCE Authors’ elaboration with information from Jim Mustian and Jake Bleiberg.12 short-term stockpiling to avoid high risk business model, which was essentially a trafficking due to lower legal trade volumes, delivery system that transported drugs to we can expect organized crime to adapt a neutral location.18 Adapting the retail U.S. and find new ways to move drugs. drug market for home delivery or using the Despite lesser traffic, the U.S.-Mexico cover of other delivery services to distribute border is still open to commercial travel illicit drugs would be fairly simple and has and trade, and this provides significant already occurred in Europe.19 opportunities for traffickers to move drugs Drug prices at the retail or street level to the U.S.17 Trafficker violence in Mexico will are already increasing, but these price hikes continue unabated despite trafficker deaths will be temporary. Some of the price hikes caused by Covid-19. This is partly because are tied to price increases for chemicals traffickers likely will (1) not observe good from China, and others are tied to the price hygiene practices other than makeshift face manipulation of drug dealers that take masks; (2) not observe stay at home orders; advantage of the slower movement of (3) increase crime by stealing medicines, stoppages in the supply chain.20 medical supplies, and equipment at the retail At the end of the supply chain, illicit and wholesale levels; (4) not stop intra-cartel drug consumers have paid a heavy price in fighting if Covid-19 provides opportunities overdose deaths.