Gangster Warlords: Drug Dollars, Killing Fields, and the New Politics of Latin America

by Ioan Grillo

  This is a classic way that organized crime gets its teeth into communities. Oxford University’s Diego Gambetta is one of the top specialists on the mafia. He describes how businesses in Sicily will often voluntarily pay mobsters to look after them, creating what he calls “The Business of Private Protection.”

  “The mafia’s ‘consumers’ are quite cynical about it and know that the mafia protection is often not good but a lesser evil,” Gambetta writes.1

  According to Gambetta, when people pay voluntarily, it is not extortion but classic protection. People are complicit in organized crime and don’t go to the police, allowing the mob to grow. But in many cases, the payments soon become involuntarily. This is what happened in Michoacán.

  “They asked for more and more money,” Alvarez says. “They wanted more than a million pesos from my businesses. It got to a point that they were going to bankrupt me.”

  The victims began as those typical of shakedowns: taxi drivers, restaurants, hotels, junkyards, discos all had to pay their monthly quota or face the consequences. These businesses move a lot of cash and it is easy to find the owners and force them to pay.

  In Latin America’s crime wars small businesses are usually more vulnerable than big companies. A gang of men with guns can walk into a restaurant and tell the owner to pay up or his family will suffer. But if they arrive at corporate offices, it can be harder to get through the door.

  However, the Knights Templar became so powerful, they also preyed on multinationals. I talk to executives at mining and agricultural companies that concede they made payoffs in Michoacán. In return, the Knights Templar would guarantee them security through the area. Many preferred to give the quota than take the risks, slipping into Gambetta’s business of private protection.

  The risks that multinationals faced came to international attention in 2012, when Templar gunmen hit a local unit of PepsiCo in one of the biggest attacks on a foreign company in Mexico in recent years. The PepsiCo unit Sabritas sells potato chips so its trucks have to travel extensively. However remote the villages in Mexico, Sabritas potato chips always seem to make it there. “You can never only eat one chip,” says their slogan, painted on their yellow trucks beside a smiley face.

  At dawn on Friday, May 25, a Sabritas worker drove a truck into Apatzingán to make his delivery to a supermarket when gunmen ordered him out. While he watched from the sidewalk with a gun to his head, they doused the truck with gasoline and set it ablaze. Attacks followed across Michoacán and into Guanajuato. By the end of the weekend, gunmen had destroyed more than thirty trucks and two warehouses belonging to PepsiCo.

  There was immediate speculation the attacks backed up an extortion threat. However, the Knights Templar said otherwise. In their narco mantas, they said they were “punishing” PepsiCo for working with police; federal agents had hidden in Sabritas trucks to nab a Templar operative, they claimed.

  “The companies are sources of employment for Michoacán society and we respect their labor,” read a manta. “But they must limit themselves exclusively to their business or they will be punished.”

  PepsiCo officials denied police using their vehicles and said they didn’t know why they were targeted. Either way, the attack served to back up the Templars’ extortion bids. The pictures of the Sabritas’ smiley-faced trucks twisting in flames splashed across newspapers, passing the threat to every corporation working in the state.

  Michoacán agriculture was an especially lucrative business for the Templars. The avocadoes are known as green gold as they are shipped north in such vast quantities, especially when it’s the Super Bowl and Americans munch on guacamole. The Templars taxed farmers for every kilo of avocadoes they grew. Like all good taxers, they also sucked money from other links in the production chain, including the wholesalers, veg shops, and exporters.

  After they had been extorting the industry for a while, the Knights Templar realized they didn’t have to shake down a small percentage, but could take over businesses directly. Corn growers in various Michoacán villages describe the process to me. They were all forced to sell their crops to the Knights Templar at a price the mob fixed at three pesos per kilo. The Templars then sold on this corn to the tortilla makers for six pesos a kilo. They doubled their money for doing next to nothing. The Templars did the same with beef. A rancher in the town of Tepalcatepec tells me how the Templars forced him to sell his cows for twenty-two pesos per kilo; and they sold them on for thirty-eight pesos.

  Alongside avocadoes, limes are the big moneymaker in Hot Land farming; the citrus fruit features strong in Mexican cuisine, from flavoring tacos to easing down tequila. Many are traded in the regional market on the edge of Apatzingán, where I take a closer look at how the business is run. On designated days, the wholesalers and producers go to the market to set up deals. Lots of men in cowboy hats wander around with plastic crates full of limes. When they make a deal, they write it on paper; the wholesaler agreeing to buy x amount of kilos.

  The business involves a lot of cash as many farmers won’t take checks. I hang out with some lime wholesalers, twin brothers, who set up deals to buy forty tons at twenty pesos a kilo that day. They promise eighty thousand pesos or about sixty-five hundred dollars, which they will pay in cash.

  To put order in this market, a group called the Citrus Growers Association sets the daily price. The Templars saw the best way to skim from the business was simply to take over this association. They could set the price that included their cut.

  Unsurprisingly, head-chopping meth cooks are not the best people to responsibly set lime prices. They pushed it up to take more for themselves, doubling the price between 2013 and 2014. This created a ripple effect of people feeling the pinch of high lime prices across the economy. Bars from Mexico City to New York looking for limes to ease shots complained of costs. At salons in Mexico City specializing in kiddies’ parties, lime juice got clipped from the menu. Canadian supermarkets charged a dollar for a lime. Drug cartel power had reached an area that nobody would have imagined.

  The Templars’ foray into mining was also a gradual process. Chavarria, who carries ore in his truck, explains how the cartel got steadily more involved.

  “First they charged quotas to everybody who worked here as well the owners. We carried on as normal, just having to pay them. But then they took over the mine for themselves.”

  The Templars increased productivity by ignoring environmental regulations and government permits. Hills that hadn’t been exploited were soon churning out iron. This is the magic of gangster capitalism: the cartel can muscle whoever it works with and ignore laws. While this causes a lot of harm, it made many people money, including contractors such as Chavarria.

  “I had work all the time so I can’t complain. And so did everybody else. The industry creates a lot of secondary jobs, from the people bringing food to the workers to those selling us gas. To be honest, I have never seen the mining industry so productive.”

  The Templars took over mining as the Chinese economy was on fire, its factories hungry for metal. The port Lázaro Cárdenas has boats sailing directly to Shanghai. In the first six months of 2013, ships carried a record 5.5 million tons of iron from Lázaro.2 A considerable amount of this would have been Templar rock, with the cartel controlling over a hundred mines.

  Seeing no bounds, the Knights Templar waded into another moneymaker: local politics. The gangsters had long paid bribes to officials. But as they became so strong, they flipped this deal. Instead, mayors had to pay the cartel.

  These shakedowns were exposed when videos later emerged of mayors sitting with La Tuta and discussing terms. Other mayors went on record describing how they had to pay the Templars. To defend themselves, they claimed they were victims of extortion rather than themselves corrupt.

  The mayors said they paid 10 percent of their annual budget to the Knights. In small towns such as Tepalcatepec, the budget was only about four hundred thousand dollars a year. But the big cities of Lázaro Cárdenas
and Morelia moved tens of millions of dollars. The federal government provides much of mayors’ budgets, so the gangsters were effectively skimming the federal pot.

  Shaking down officials is an immense display of power that has not been given sufficient attention. For decades, it was the state extorting gangsters. When Nazario flipped this, he altered the nature of narco politics.

  The Michoacán town of Antunez, population nine thousand, was a physical testament to this gangster warlord power. When you first drove in, it looked like another parochial Mexican town, with dusty roads, brightly painted homes, and a quaint church. But the first clue that things weren’t right was a shrine to Saint Nazario by the entrance sign. The Templars placed these throughout their empire, marking the rule of the Maddest One. Continuing into the central plaza was the mansion of the local Templar boss, Toucan. The mansion even shared a wall with the main church.

  I later went into the mansion when the vigilantes stormed it. It had swimming pools served by a bar and vast bedrooms with en-suite bathrooms, showing the amount of money that the Templars were moving. All is built in the ostentatious style of “narco-tecture,” with garish colors and Greek pillars alongside pictures of cowboys. Toucan boasted two other huge properties in Antunez, including a ranch with stables full of fine breeds. In gangster style, the horses were named “The Lover,” “The Gladiator,” “The General,” “The Dandy,” and “The Prophet.”

  The Templars built similar mansions across Michoacán. Even in a hamlet called La Huerta, I find a mini-mansion for a local boss called “El Monstruo”—The Monster. In the city of New Italy, the capo Enrique Plancarte had a mansion with an indoor pool.

  Nazario himself had flamboyant hideaways. Among them was a sprawling ranch known as the Fortress of Anunnaki, with horse stables, a ring for cockfights, and a casino. When I visit the area where Nazario was born, vigilantes show me more of the Maddest One’s properties. He had acquired vast stretches of land, forcing residents to sell or give him their homes.

  It is rough hilly terrain covered by woodland so it is hard to get a sense of the entire size of the Maddest One’s estate. But we get to a big plain that runs toward a river, and a resident signals that all of this belonged to Nazario. It reminds me of the aristocrats of England owning chunks of the countryside; Nazario had become a feudal lord.

  But while the government could not restrain him, Nazario’s predatory behavior finally woke a monster. And a time came when dishwashers, lime pickers, and doctors had the chance to prove themselves in the face of gunfire and terror.

  CHAPTER 43

  Clad in sombreros and baseball caps and clutching assault rifles, shotguns, and machetes, the men take defensive positions on the hillside neighborhood of Tierra Colorada. Their envoys knock on doors to call the residents from their homes. As the sun lowers over the hills, two hundred residents wander out cautiously and gather in a clearing. A middle-aged man with a protruding belly and a rifle hanging from his shoulder struts in front of them. He addresses the crowd in a steady, confident voice.

  “You have suffered too much at the hands of kidnappers, extortionists, and drug cartels,” says Esteban Ramos, a taxi driver turned militia leader. “It is time to fight back. If you are in favor of our community police and want to join or support us, then step forward.”

  The crowd is silent. Nobody moves. Finally, a middle-aged man in a baggy red T-shirt stands up and walks forward. He is followed by a youth, barely out of his teens. Eventually, nine men stand in front of their brethren and raise their hands. The crowd cheers. A new vigilante squad has been born.

  Watching this moment, I can’t help but feel moved. It reminds me of the scene in the movie The Patriot when Mel Gibson’s son is recruiting a militia to fight the Brits. It might be a world away from the American Revolutionary War. But these men also face a brutal enemy that plunders their land, and risk their lives taking a stand.

  Covering Mexico’s vigilante movement was like watching an action movie in many ways. It was full of larger than life characters, took dramatic twists, and had high-intensity action scenes. Like good movies, there were inspiring heroes on a moral mission and despicable baddies, such as Nazario, a big enough villain for any Hollywood set. But like the best movies, it became morally hazy by the end, the heroes showing cracks, and finished leaving you with a mix of fear and hope of what might come next.

  The vigilantes had a rock star appeal. The left saw the pictures of ragged men with AKs as a revival of Latin America’s guerrilla movement. But the right also sympathized with farm owners and businessmen bearing arms to defend their livelihood. And immigrants in the United States were delighted to see people rising up in their homeland in a narrative that dovetailed with the American spirit of frontier vigilantism.

  The self-defense squads had articulate leaders who won massive public sympathy when they appeared on TV. There was Hipólito Mora, the humble lime farmer in his bulletproof vest; José Mireles, the gallant tall doctor with the Kalashnikov easing off his shoulder; and Estanislao Beltrán, known as Daddy Smurf because of his zany long beard. They provided fresh relief compared to the crooked politicians people were used to watching.

  After covering Mexican gangsters for a decade, I was also swept up. Cartel thugs had decapitated, burned, kidnapped, extorted, raped, savaged, and ravaged. Police, soldiers, judges, mayors, lawmakers, and governors had betrayed their people. When the vigilantes rose against this, it put some confidence back in the human spirit, and the strength at the core of the pueblo mexicano.

  Yet, after two years, the problems of vigilantism were too big to deny. One thing is holding up the ideal of armed struggle. The other is seeing it in action. It’s ugly. As vigilantes drove out the cartel, they tortured and murdered. In 2013 and 2014, police tallies count 1,894 people killed in Michoacán, the victims of both sides.1 The vigilante ranks also filled with the gangsters they were supposed to be fighting against. And you wondered how much better off anyone had become.

  To understand how militias of cow farmers, cab drivers, and clinicians took on narcos, you have to look at the long history of vigilantism—and community policing—in Mexico. This idea on how to fight Mexico’s postmodern problem of narcos came from its most ancient indigenous communities.

  Since the Spanish conquest, certain forms of alternative policing have existed alongside the mainstream justice system. The viceroys of the Castilian crown controlled cities and silver mines while they allowed indigenous villages a level of self-rule. After independence from Spain, the central government struggled with civil war in which vigilantes were active in swathes of the country.2 Following the 1910 revolution, competing armies also held sway, and their ragtag militias administered rough justice; iconic photos show irregular troops hanging bandits from trees.3

  The PRI government that ruled from 1929 until 2000 forged a more powerful central state. Mexico escaped the civil wars and coups that plagued much of Latin America. But some armed groups claiming the right to administer justice did appear. Among them was the Party of the Poor led by teacher Lucio Cabañas, who named its militia “The Peasant Justice Brigade.” Cabañas was inspired by revolutionary Zapata and became an icon for the Mexican left, especially in Guerrero, where current vigilantes hail him as a hero.

  “These historical anecdotes go on influencing many political actors from various parties,” Cuauhtémoc Salgado, president of the Guerrero section of the PRI, tells me. “Guerrero has been characterized as a bellicose state.”

  When the Zapatistas rose in 1994, they adopted an unorthodox leftist position, combining anarchistic elements with a revival of indigenous Mayan customs and a touch of Catholic liberation theology. Their armed challenge lasted only twelve days before a bishop brokered a cease-fire. But in the decades since, the Zapatistas ran “Boards of Good Government” over as many as 150,000 people.

  The Zapatista councils claim “autonomy” and enforce their own justice, including crackdowns against drug and human smugglers. Alcohol is banned in
many communities. However, most Zapatistas do not use prisons; punishment often consists of community work, such as chopping wood.

  The Zapatista rebellion inspired indigenous groups across the country. Mexico is home to more than fifteen million indigenous people, more than any other nation in the Americas.4 Often living on the margins of the system, they organized themselves to fight rising crime.

  The biggest community police movement emerged in Guerrero with the founding of the Regional Coordinator of Community Authorities (CRAC) in 1995, a year after the Zapatista uprising. The CRAC officers are volunteers who serve between one and three years, during which time the community provides them with food. When cartel crime ravaged Guerrero in the 2000s, the community police movement grew to fifteen hundred officers. I speak to one of their leaders, Eliseo Villar, a stocky indigenous man in the force’s olive green color, and he explains why they took up guns.

  “Our project of a community system imparts security, justice, and education by bearing arms. Clearly, we have a right to do this, because the government has not attended to our needs. For this we saw the need to organize ourselves, to have our internal rules and identify ourselves with a uniform.”

  The CRAC is a more moderate group. But it also uses controversial tactics, not only detaining suspects but also imprisoning them in makeshift jails. Suspects are tried by elected commissars and assemblies voting in public plazas. While the CRAC emphasizes rehabilitation, they also lock up some prisoners for years.

  The CRAC cites the United Nations declaration on indigenous people as giving them the right to impart justice. However, the issue of how indigenous justice systems should co-exist with mainstream laws is a subject of deep debate.