The Political Economy of Transnational Drug Trafficking: Criminal Rackets and State-Making in Modern Mexico Alejandro Lerch Huacuja St. Catharine’s College January 2020 This thesis is submitted for the degree of Doctor of Philosophy For Giulio Regeni 2 Declaration This thesis is the result of my own work and includes nothing which is the outcome of work done in collaboration except as declared in the Preface and specified in the text. It is not substantially the same as any that I have submitted, or, is being concurrently submit- ted for a degree or diploma or other qualification at the University of Cambridge or any other University or similar institution except as declared in the Preface and specified in the text. I further state that no substantial part of my thesis has already been submitted, or, is being concurrently submitted for any such degree, diploma or other qualification at the University of Cambridge or any other University or similar institution except as declared in the Preface and specified in the text It does not exceed the prescribed word limit for the relevant Degree Committee. 3 The Political Economy of Transnational Drug Trafficking: Criminal Rackets and State-Making in Modern Mexico Alejandro Lerch Huacuja Abstract Far from embodying distinct social actors, the line separating the ‘police’ from the ‘criminal’ is historically fluid and at times very thin. Generated by the capitalisation of economic rela- tions, waves of bandits and criminals have often been instrumental to advance the interests of their enabling economic and political elites by forming the security apparatuses (reliant on preying, delinquency and extortion) supporting the elites' hegemony. Mexicans, at multiple stages in the country's national history, have become well-acquainted with the blend of le- gality and illegality characterising the country’s security sector. Building from historical so- ciology, comparative studies and critical approaches to policing, this thesis argues that crim- inal activities (in particular contraband and drug trafficking) were important political econo- mies supporting the development of the state security apparatus under the PRI regime in Mexico (1940s to 1990s). The thesis documents the paradoxical but regular input of criminal markets into the political economies of pacification, policing and state repression, taking place at crucial junctures in the history of the single-party state, and assisting the production of its particular socioeconomic order. This ‘instrumentalisation’ of transnational criminal markets connects with and replicates little-studied Cold War security dynamics whereby the reach of the U.S. security apparatus (global policing, paramilitarism, counterinsurgency, dirty wars, etc.) was expanded by tapping into criminal activity in host nations. Building from the Mexican experience, the thesis argues that state rackets in (transnational) crime generated political economies that, embedded into local processes, played a notable part in the making of capitalist modernity, liberal state making and empire. The thesis documents in particular the ancillary role of drug and contraband markets in the operation of the PRI’s central security bodies, the Dirección Federal de Seguridad and the Policía Judicial Federal. Drawing from multi-archival research and unprecedented testimonies by former law enforcement agents, 4 the thesis provides a new framework to grasp the important role of criminal-police entangle- ments in the making of Mexican modernity. 5 Table of Contents Declaration.............................................................................................................................. 3 Abstract ................................................................................................................................... 4 Table of Contents ................................................................................................................... 6 Acknowledgements ................................................................................................................ 7 Abbreviations ......................................................................................................................... 8 Introduction ............................................................................................................................ 9 Chapter 1 - Theoretical discussion: the bandit in historical perspective .............................. 18 Chapter 2 - Protection rackets and state-formation after the Mexican Revolution .............. 61 Chapter 3 - Criminal rackets, political mandates ............................................................... 110 Chapter 4 - From national security to policing neoliberal chaos: the ‘commoditisation’ of drugs ................................................................................................................................... 148 Chapter 5 - Tamaulipas and the end of a centralised drug racket....................................... 170 Conclusions and discussion ................................................................................................ 214 Bibliography ....................................................................................................................... 240 6 Acknowledgements Thanks to my mom, for all those Coca Colas and baguettes at Mariette’s. In harsh times, my light and guiding angel. To my dad, who jumped that night to shout: “Quién eres tú?” before embracing me with his hug and tears in his eyes. To Nini, sitting at the dinner table downstairs til 11 pm, proofreading and proofreading and proofreading and being always my soul sister. To Manina, who sat beside my bed that day, listening with her love and her incredible wis- dom. And last but in no proportion least, a mi gran mate, my true and only brother. And to Doty, watching from heaven. My family: I know how much I owe to you, and you know how much I am here because of all the love you have given to me. Then came the Little Bird, with her wide open wings, nesting by The Mill. Thank you for the 1,000,000th time. You always believed in me, and I will always believe in you. I love you. Thanks to my supervisor Graham Denyer Willis, for sticking with me throughout this process and supporting me despite my tremendous sense of confusion and tribulations. Thanks to my examiners, Ayse Zarakol and Wil Pansters, for spending so many hours helping me in pro- ducing a more balanced and insightful text. Your encouragement was the highlight of my doctorate. I will miss to mention many, but I thank all who supported me in any way or cared to listen about my ideas on “drug trafficking”. First, Ruby Zajac. Carlos Flores Pérez, Naim Bro Khomasi, Guadalupe Pérez Correa, John Bailey, Mónica Serrano, Luis Astorga, Kate Doyle, Sanho Tree, Carlo Moll, Humberto Hernández-Haddad, Ernesto Schwartz-Marin, Charles Jones, Joey Whitfield, Eli Silverman, Ben Smith, Joanna Page, Julie Coimbra, Chris- elia de Vries and many others. Thanks to all the kind archivists that assisted my research, and to all those people who trusted me enough to share with me their heavy stories. I thank Cona- cyt, Cambridge Trust, CLAS, St. Catharine’s College and the Cambridge Political Economy Society for supporting my career with such incredible generosity. 7 Abbreviations AUC Autodefensas Unidas de Colombia [United Self-Defenders of Colombia] AFI Agencia Federal de Investigación [Federal Investigative Agency] ATF Bureau of Alcohol, Tobacco, Firearms and Explosives BEA Brigada Especial Antiguerrillas [Special Anti-Guerilla Brigade] CIA Central Intelligence Agency DEA Drug Enforcement Administration DFS Dirección Federal de Seguridad [Federal Security Directorate] DGIPS Dirección General de Investigaciones Políticas y Sociales [General Direc- torate of Political and Social Investigations] DIPD División de Investigaciones para la Prevención de la Delincuencia [Division of Investigations for the Prevention of Delinquency] FBI Federal Bureau of Investigation FBN Federal Bureau of Narcotics INS Immigration and Naturalization Service NNICC National Narcotics Intelligence Consumers Committee PGR Procuraduría General de la República [Attorney General of Mexico] PJF Policía Judicial Federal [Federal Judicial Police] PRI Partido Revolucionario Institucional [Institutional Revolutionary Party] UNODC United Nations Office on Drugs and Crime WW II Second World War 8 Introduction On December 9, 2019, the architect of the War on Drugs in Mexico, Genaro García Luna, was taken into custody in Dallas by the FBI on charges of having taken millions in bribes from drug cartels since 2001. His arrest was a cognitive shock in Mexico. More than anyone else, García Luna embodied the government’s assault on drug trafficking –– an onslaught that has come to define the history of 21st century Mexico, nearing today half a million deaths. From 2000 to 2012, the power of García Luna over the security apparatus had been para- mount. It included directing counterinsurgency operations at the country’s national intelli- gence agency, as well as heading the increasingly militarised ranks of the national police. Learning that the top ‘general’ of the war on the cartels was being accused in the U.S. of enabling them was very hard to digest, particularly in a country devastated by the policies and decisions adopted by a national security elite headed by García Luna and his subordi- nates. Had the Mexican government been unaware of his connections to drug traffickers all this time? –– a tricky