HomeNewsBriefExtortion of Mexico Electric Company Spotlights State Weaknesses
BRIEF

Extortion of Mexico Electric Company Spotlights State Weaknesses

MEXICO / 23 MAR 2017 BY LEONARDO GOI EN

Organized crime groups are extorting Mexico's federal electricity company, highlighting the ways in which criminal organizations are exploiting the state's weakness to increase their revenues.

Mexico's Federal Electricity Commission (Comisión Federal de Electricidad – CFE) has suffered extortions by organized crime groups in the north and west of the country, reported Zeta Tijuana.

According to Gustavo Cuevas, a CFE executive, criminals are allegedly telling local businesses not to pay the energy company, and to pay organized crime groups instead.

"They approach a company, a textile factory, and say: from now on you no longer pay for your electricity. You are going to pay me for it," Cuevas told Reforma.

At the same time, criminal groups are allegedly threatening CFE employees not to cut power to businesses that are paying criminals rather than the energy company.

"We can't cut [power to these companies], because the CFE superintendents are also threatened," Cuevas explained.

Cuevas also denounced that, while Mexico's Secretary of Defense (SEDENA) and Navy staff should help to protect 125 CFE power plants, organized crime groups have ordered the company's superintendents to remove the security staff assigned to the plants. 

"I can assure you that [CFE] personnel have already requested to remove the helicopters used to patrol the high voltage power lines," he said, adding that criminals "have called to say: remove your helicopter or we'll shoot it down."

InSight Crime Analysis

The extortions suffered by the CFE are a powerful reminder of how criminal groups are exploiting the weaknesses of the Mexican state to strengthen their grip over local communities and increase their profits.

To be sure, CFE is not the first energy company to be targeted by organized crime in Mexico. Fuel theft from Pemex, Mexico's state-owned oil company, has increased dramatically over the past few years. Mexico's Attorney General's Office registered an average of 1.6 incidents of oil theft per day in 2010. By 2015, the number had gone up to 8 per day. The practice has long been a lucrative business for the country's powerful crime groups, most notably the Zetas and Gulf Cartel.

SEE ALSO: Coverage of Oil Theft

But Mexico is not the only county in the region whose energy infrastructure has been targeted by organized crime. Militia groups in Rio de Janeiro, Brazil have been known to force favela residents to pay for services like gas and electricity at inflated prices, and reportedly used their control over local communities to influence electoral outcomes.  

However, Mexico's case seems potentially more nefarious than Brazil's. By forbidding local business to pay the CFE for electricity, Mexican organized crime groups are effectively forcing the state company into a vicious cycle. If businesses no longer pay the CFE, then the company will see its revenues diminish and will not have the money required to pay for security, which in turn will mean less protection from organized crime groups. 

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