HomeNewsBriefOrganized Crime Profiting from Hurricane Reconstruction in Mexico
BRIEF

Organized Crime Profiting from Hurricane Reconstruction in Mexico

EXTORTION / 18 AUG 2014 BY JAMES BARGENT EN

Organized crime groups are profiting from post-hurricane reconstruction efforts in the western Mexico state of Guerrero as local criminals display an old fashioned mafia-style game to exert control over civil life in their search for new revenue streams.

A report by Mexican newspaper Reforma has revealed how criminal groups are extorting construction companies involved in rebuilding efforts following last year's hurricanes Manuel and Ingrid. They are also forcing companies to rent machinery and buy building materials from them, and only employ workers from certain unions.

Alfredo Adame Arcos, the president of the Mexican Chamber of the Industry of Construction (CMIC), told Reforma that criminal groups were claiming 5-10 percent of the contract price on reconstruction projects.

According to Adame, when companies refuse to acquiesce to their demands, the criminal groups kidnap employees and family members and steal company vehicles. CMIC has recorded 33 so-called "express" kidnappings -- where victims are held for hours while ransoms are paid or demands are met -- of workers on reconstruction projects.

Harassment by criminal groups has brought to a halt construction on schools and a bridge and has so far driven at least two companies to abandon their Guerrero projects.

InSight Crime Analysis

Extortion of construction companies is a common occurrence in Mexico and in other countries around the region with a strong organized crime presence, such as Colombia and Peru.

However, the tactics employed by the criminal groups in Guerrero go beyond this, using violence and intimidation to take a cut on multiple levels in a manner more reminiscent of traditional mafia organizations than modern drug trafficking networks.

SEE ALSO: Mexico News and Profiles

This is indicative of a drive to diversify criminal revenue streams, a common pattern around Mexico. One of the main causes of such diversification is a fragmentation of organized crime. As groups break down into smaller, more localized and independent factions they are less able to rely on drug trade profits as they no longer have the coordination and geographical presence to control significant sections of the drug supply chain.

Guerrero is a prime example of this. It is one of the most violent states in Mexico. The criminal groups disputing control are not major cartels but splinter groups and the remnants of once powerful organizations such as the Beltran Leyva Organization (BLO).

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