HomeNewsAnalysisWhat Forbes’ Snub of ‘Chapo’ Guzman Means
ANALYSIS

What Forbes' Snub of 'Chapo' Guzman Means

EL CHAPO / 6 MAR 2013 BY PATRICK CORCORAN EN

Forbes' decision to remove Joaquin “El Chapo” Guzman, the elusive leader of Mexico's Sinaloa Cartel, from its billionaires list corrects a questionable editorial judgment and reflects an ongoing shift away from the most powerful gangs as the cause of Mexico’s violence.

For the first time in five years, Forbes’ just-released list neglected to include the notorious Sinaloa capo, nor any of his counterparts in Mexican organized crime. Since 2009, Forbes had pegged Guzman’s fortune at $1 billion even, just good enough to reach the lower levels of its wealthiest humans list.

Guzman's presence on the list has become something of a must-have factoid in media reports about Guzman's loosely-knit criminal organization, the Sinaloa Cartel, and Mexico's deteriorating security situation. However, the magazine's stated methodology, which says its reporters try to "meet with the list candidate," made it difficult to see how it had come to this conclusion and made some question why it had even tried.    

InSight Crime Analysis

While Forbes’ editorial decision has little to do with the policy priorities of Mexican President Enrique Peña Nieto, the magazine’s change dovetails with the new government’s policy priorities. That is, Peña Nieto and his team are de-emphasizing the so-called “kingpin strategy”, which was embraced by the previous administration of Felipe Calderon and which focused on taking down the capos like Guzman.

Instead, the government’s view of Mexico’s organized crime challenge is not of a small handful of kingpins competing to amass billions of dollars, but rather a violent, unstable equilibrium spurred by the decline of hegemonic capos like Guzman.

For instance, as InSight Crime has written with regard to Juarez, the violence that took close to 10,000 lives in that city was not entirely due to fighting between Guzman and his Juarez Cartel rivals, as is commonly reported. While that feud played a key role, the huge number of non-cartel actors, including hundreds of street gangs, was essential to turning Juarez into a veritable killing field. Such is the case elsewhere in Mexico as well.

Consequently, Guzman’s inclusion in the Forbes list, which suggested a degree of influence over crime in Mexico that a careful analysis did not support, largely contradicted the prevailing trend inside the nation. This will likely be increasingly true going forward, as group’s like Guzman’s Sinaloa Cartel collectively continue to cede market share to a growing number of smaller regional gangs, like the Knights Templar (Caballeros Templarios) or the Independent Cartel of Acapulco.

Furthermore, the revenue structure for Mexican criminal groups have tilted away from the high-margin traffic of cocaine (the activity with the greatest potential to spawn a highly wealthy boss) to lower-margin, labor-intensive practices like kidnapping and extortion, theft and human smuggling.

While Guzman’s inclusion appeared to be aimed at publicity more than it was the result of methodological rigor, the impact of his being placed alongside names like Gates and Slim changed the perceptions of public security in Mexico. Guzman turned into the foremost emblem of Mexican crime, and his wealth and manifest impunity --Guzman escaped from prison in 2001 -- was a sign for some that Mexico had little chance of defending itself against such a threat.

This was true despite the lack of evidence to support the estimate of Guzman’s fortune. His partner Ismael “El Mayo” Zambada called the calculation “nonsense” in 2010. More damningly, in 2009, Forbes editor Luisa Kroll offered only unconvincing ramblings as a justification: “There are people that make it their job to be tracking this money trail and we have a Spanish-speaking reporter who spent a lot of time in Mexico and has a lot of sources whether in the Drug Enforcement Agency and separate consultancies that helped him track and get a handle and find the right people to talk to, to track the drug money but because it is such a huge problem, there are definitely a lot of people that are tracking the money that's flowing through the drugs.”

Nonetheless, for the US media, a billionaire capo became a conveniently sensationalist and simplistic symbol for a hugely complicated situation. The Washington Post, to take but one of many examples, casually referred to Guzman as a “billionaire cartel boss” in 2010.

By way of addressing the exclusion, Forbes explained that, “[Guzman] has to spend more of his money on security and bribes to protect his family, meaning his annual take of the world’s massive cocaine trade ... is getting thinner and thinner.”

Such logic is, of course, every bit as unsupported and faulty as were the initial calculations of his worth. Forbes does not back up its assertion with any figure more concrete than an offhand references to “our numbers.” Moreover, even if his profit margins are getting thinner, unless Forbes is actually retracting its prior claims about his accumulated wealth, it should not matter: as long as the margins are positive, he’s still adding to that fortune that was previously calculated at an even $1 billion.

In short, the only logically coherent way for Forbes to pull Guzman from the list would be to explicitly renounce its prior methodology and issue a correction. Unfortunately, the magazine was unwilling to go that far. Nonetheless, insofar as it represents the opening of a more nuanced view of Mexico in general and organized crime in particular, this is a positive step.

However, the broader trend that Guzman’s removal illustrates --the decline of the hegemonic gang-- promises a much more mixed impact for Mexico.

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