Knights Templar, Other Mexican Drug Cartels Look For Lucrative Schemes Outside of Narcotics
Earlier this month, government officials from Mexico announced that the Mexican Navy led an operation in the village of Naranjo de Chila to take down Nazario Moreno, a central cog in the Knights Templar drug cartel.
This marked the second time the kingpin had been reported dead, the first time being in 2010. However, the government officials claim, based on fingerprint analysis, they finally got their man.
Moreno's demise came on the heels of another significant victory for the Mexican government in its battle against organized crime as Mexican and U.S. law enforcement jointly worked to capture Joaquin Guzman, known as El Chapo, one of the world's most wanted drug lords.
Mexican Marines and police along with the U.S. Drug Enforcement Administration and Marshals Service arrested Guzman, the head of the infamous Sinaloa Cartel, at his condominium in Mazatlan, Mexico in late February.
Sinaloa Cartel has become a multibillion-dollar drug enterprise supplying a substantial amount of the cocaine and marijuana sold in the U.S. Guzman's heavily armed and loyal cartel members had helped their leader evade capture from numerous raids during the last 13 years.
The Knights Templar are known for producing and distributing crystal methamphetamine while running and operating out of the state of Michoacan, Mexico for the last several years. They are a pseudo-religious organization that refers themselves as holy warriors spreading, not the gospel, but methamphetamine across North and Central America.
While illegal drug production and smuggling is what these cartels are primarily known for, a recent Associated Press report reveals that numerous cartels in Mexico have found alternate ways of making money illegally.
Alfredo Castillo, a special emissary from the Mexican government tasked with restoring law and order back to Michoacan after Moreno's death, told AP that most of Knights Templar's money comes from its iron ore venture.
The Knight's illegal iron ore production "is their principle source of income," Castillo said. "They're charging $15 (a metric ton) for the process, from extraction to transport, processing, storage, permits and finally export."
Many Mexican cartels are also known for being involved in other criminal activity other than drug sales such as human sex trafficking, pirating goods and extortion, according to AP. However, this the first time, to the Mexican government's knowledge, that a cartel has altered its business model almost entirely.
Victor Clark-Alfaro, a professor for the Center for Latin American Studies at San Diego State University, said in an email, that its natural for criminal organizations to expand their businesses as most operate as a transnational company.
"The drug cartels are transnational corporations, which have diversified their activities, not only to the drug business," Alfaro said. "This is the case of the Knights Templars, who ... as we know have also made inroads in the business of the mines."
Alfaro said other cartels such as Los Zetas are also in the business of human trafficking on top of their drug selling business.
AP reported that Los Zetas, which mainly operates along the U.S.-Mexico border, was actually one of the first cartels to add other moneymaking schemes to its repertoire of criminal activity.
According to AP, 1.5 percent of Mexico's iron ore exports to China in 2008 left from Michoacan's port of Lazaro Cardenas, but by 2012, about half of the nation's exports to China was processed and shipped from there.
The National Chamber of the Iron and Steel President Alonso Ancira told local Mexican journalists that the Knights Templar earned an estimated $1 billion in 2013 from its illegal mining scheme.
The cartel extorted information, money and power from Michoacan's lime and avocado producers as well as its politicians and police. Government experts estimated that during the Knights reign, it earned roughly $800,000 to $1.4 million a week.
AP reported that last November, Mexican authorities seized back control of the Lazaro Cardenas port and found 119,000 metric tons of iron ore stored there. They were also able to liberate the state's farming hub that the Knights had previously taken over.
Despite Mexican authorities' success of taking down numerous and significant leaders in the criminal syndicate, Alfaro argues that in order to take down the drug cartels the government needs to continue taking control of the organization's financial resources and target the corrupt officials and police officers.
"It is not enough to arrest or kill leaders of organized crime. It is necessary to dismantle the financial structures for money laundering," Alfaro said. "It is necessary to dismantle the political class and the police authorities and justice that are linked to these groups, to arrest them, investigate them ... which is very difficult due to the scandalous levels of corruption and impunity."
Prior to the Knight Templar, there was La Familia. But after 2010, when government law enforcement nearly dismantled the cartel through numerous arrests of its leaders, the group reshaped itself into the Knights Templar.
Alfaro said Moreno's recent death wouldn't stop the Knights Templar because of its horizontal structure of leadership, where it has numerous leaders in charge rather than a traditional vertical arrangement with a central head.
"The cartels of the Knights Templar has a horizontal structure in their leadership, shared by several people, not a vertical structure with a single leader." Alfaro said. "This enables the group to continue operating, however, it will have a higher weight of success having the Government break up this group."
Although the Knights made a majority of its earning last year from mining iron ore, Alfaro argues that drug sales and production as well as weapons trafficking are still the cartels' most sustainable business function because of its high demand in the U.S.
He also said Northern Mexico has seen an increase in demand for methamphetamine, which the Knights are known to produce.
"We have to take into consideration that the Knights Templar are producers of crystal (methamphetamine)," Alfaro said, adding, "that the (methamphetamine) has become the most widely used drug in the north of Mexico. Eighty-five percent in Tijuana for example."
Mexican authorities told AP that there are still at least 12 major cartels profiting from illegal activity in Mexico.
Many cartel-run states have seen a recent upsurge in vigilantism as numerous citizens have decided to take the law in to their own hands by forming groups and targeting the cartels.
However, the "self-defense" groups' actions to save their states from the clutches of various cartels have also caused an increase in violence, prompting government law enforcement to finally act and move in on some of the syndicates.
Although many view the cartels such as Los Zetas and Knight Templar as parasites and criminals who rely on human trafficking preying on innocent victims, traditionally drug-trafficking cartels are known for providing jobs and money to the local people.
Alfaro said many of the various cartels are comprised of mainly lower-class citizens who resort to the life of crime because of what the money such organizations can offer. For those citizens that join, it's a way of improving their living conditions.
He also said the cartels attract white-collar criminals as well because they typically know about business and how to game the system.
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