Who wouldn’t want a huge mansion, a full-sized pool and an escape tunnel at lower than market value? While the Mexican government is auctioning off properties, vehicles and jewelry seized from drug traffickers, it is struggling to find willing buyers.
The government of Andrés Manuel López Obrador (AMLO) has held three major auctions this year from Los Pinos, the former presidential residence in Mexico City. But all the auctions struggled to meet their targets and brought in less income than expected.
In May, the government hoped to receive $1.5 million from the sale of 82 luxury and armored vehicles at its first auction, but came up short by $200,000. At a real estate auction in June, authorities estimated the properties would bring in $9 million, but sales only amounted to some $3 million. Of the 27 seized properties put on the auction blocks so far, only nine were sold, and just four were sold at a price greater than their initial listed value, according to El Informador.
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Lavish, diamond encrusted jewelry netted the government about $542,000, just one-third of what was expected to be taken in at the auction.
In May, López Obrador estimated that the Institute to Return Stolen Goods to the People (Instituto para Devolverle al Pueblo lo Robado – IDPR), which oversees the auctions, would be able to distribute around $63 million to social projects this year alone, but this may now be significantly reduced.
Certain assets that did not sell will not return to the auction block. The ranch belonging to former Zetas leader, Édgar Valdez Villarreal, alias “La Barbie,” will be turned into an educational institution for young people, according to El Sol De Mexico.
InSight Crime Analysis
López Obrador drummed up publicity for the narco-asset auctions, clearly seeing them as a way to show that his government is willing to take on Mexico’s toughest drug traffickers. But he did not account on the fear that many still have of these criminal groups.
“There is a fear of retribution, but it has been so long now [since these assets were seized] that people should be conscious that that is over, there should not be a problem now,” a participant at one auction told El Informador.
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Many of the properties up for auction once belonged to some of the most infamous criminals in Mexico, including the Tijuana Cartel’s Francisco Arellano Félix, former Gulf Cartel leader Mario Ramírez, and Raúl Flores, a supposed financial operator of the Jalisco Cartel New Generation (Cartel Jalisco Nueva Generación — CJNG). The apartment where Beltrán Leyva Organization crime boss Arturo Beltrán was shot dead went unsold.
The starting prices listed by the government for the properties at auction ranged from around $11,300 to almost $1.7 million. All were priced significantly lower than their market value.
Despite Mexico’s struggles, the auctioning of drug trafficker assets has worked in other countries. Brazil has taken an organized approach, creating a special entity within the Justice Ministry to oversee auctions, communicate with buyers and distribute profits. The focus is on minimizing red tape and selling properties quickly, with the profits going to anti-drug programs, according to officials.