The break-up cycle of large criminal groups in Mexico is a predictable one. One after another, groups have arisen to play major roles in the country's complex drug trafficking dynamics, only to fall prey to factionalism and in-fighting.
The reasons behind these declines are varied: the capture or death of key leaders, the naked ambition of underlings, or invasion by a stronger foe. But the Zetas, the Beltrán-Leyva Organization, the Knights Templar, La Familia Michoacana, all rose and dwindled in turn. Even the feared Jalisco Cartel New Generation (Cartel Jalisco Nueva Generación – CJNG) has had its wobbles.
Except the Sinaloa Cartel. Even though in-fighting has been reported between the Chapitos and the cartel's old guard, the group shows little sign of breaking into pieces or dissolving altogether, as most of the above-mentioned groups have.
In a new paper, "Illegal Market Governance and Organized Crime Groups' Resilience: A Study of the Sinaloa Cartel," Valentin Pereda, a criminologist from the Université de Montréal in Canada, looked at the unique factors that could account for this unusual longevity. InSight Crime asked Pereda and Décary-Hétu a few questions to learn more. The authors responded jointly to the questions in writing.
InSight Crime (IC): Why did you decide to focus on the resilience of the Sinaloa Cartel, in particular, and how would you define “resilience” in this context?
Valentin Pereda: The criminal underworld of Mexico has witnessed an unprecedented era of instability and fluctuation throughout the 21st century. Organized crime groups that dominated the illicit markets in the early 2000s have now splintered into numerous smaller factions, constantly transforming, dissolving, reassembling, and reemerging with new identities, members, and loyalties. The Sinaloa Cartel stands as a remarkable exception to this prevailing pattern.
Despite enduring significant setbacks resulting from law enforcement operations, intense competition, and internal conflicts over the past three decades, the Sinaloa Cartel has displayed the ability to expand its illicit enterprises within Mexico and beyond. Official sources from the US government indicate that in 2019, the Sinaloa Cartel maintained its grip over 40–60 percent of Mexico's illicit drug trade, amassing annual profits estimated to reach a staggering $3 billion.
IC: You focused on the group’s ability to ensure judicial, financial, political, and regulatory governance. These are terms one might expect to find associated with political parties, not criminal groups. Why did you choose these four categories, and what is the importance of each in understanding the Sinaloa Cartel?
VP: For this particular study, we borrowed Benjamin Lessing's broad definition of criminal governance, which encompasses the imposition of rules and limitations on behavior by an organized entity. While political parties serve as a prime example of such entities that seek to establish rules and oversee conduct, it is important to note that they are by no means the only type of organization that displays this kind of behavior. Various other organizations, such as commercial guilds, trade unions, and transnational associations, also strive to establish rules among their partners and regulate their members’ behavior. In many ways, the Sinaloa Cartel shares more similarities with historical partnerships of merchant guilds than with contemporary political parties.
SEE ALSO: Sinaloa Cartel Profile
In our analysis of the transcripts from the trial of Joaquín Guzmán Loera, alias "El Chapo," we discovered that four distinct forms of governance -- judicial, financial, regulatory, and political -- have played a pivotal role in facilitating the Sinaloa Cartel's ability to overcome adversities. Judicial governance refers to activities such as resolving disputes and enforcing contractual agreements. Financial governance entails tasks like tax collection and the provision of financial assistance. Regulatory practices involve the imposition of restrictions on specific crimes or behaviors. Lastly, political governance encompasses the Sinaloa Cartel's involvement in community and electoral politics. In this study, we delved into how the Sinaloa Cartel relies on these four types of governance to establish rules and regulate behavior among participants in particular illicit markets, such as transnational cocaine markets.
IC: You mention that one of the key aspects of the Sinaloa Cartel’s survival ability is its “array of informal rules, codes, and conflict-solving mechanisms.” Could you give us an example of how these work and why they have been so crucial to the group?
VP: Our analysis of the transcripts centered on the testimonies provided by 13 former associates of the notorious figure [El Chapo]. These serve as a valuable source of insights into the rules, codes of conduct, and conflict-resolution mechanisms employed by the Sinaloa Cartel.
An enlightening illustration of these mechanisms emerged from the testimony of Juan Carlos Ramírez Abadía, the Colombian cocaine smuggler known as “Chupeta.” In his account, Chupeta recounted a dispute he had with his Sinaloa Cartel partners in 1991. Specifically, he accused his Mexican associates of substituting the cocaine he had delivered to them for transportation to the United States with an inferior quality product.
Determined to address his grievances, Chupeta made a journey to Sinaloa. Following the meeting, the leadership of the Sinaloa Cartel reached an agreement to accommodate representatives from the Norte del Valle Cartel along their drug trafficking routes in Mexico. The purpose of this arrangement was to ensure the integrity of the Colombian drug packages as they made their way to the United States, under the watchful oversight of the Norte del Valle Cartel.
Rather than severing ties with its business partner, the Sinaloa Cartel employed effective mediation practices that enabled it to preserve the trust and goodwill of its associate. This strategic approach safeguarded the integrity and uninterrupted operation of the group's trade routes and revenue streams.
VP: To provide a response grounded in empirical evidence to this question, a comparative study would be required, utilizing reliable data obtained from the Sinaloa Cartel's adversaries. This data could be derived from firsthand testimonies of current or former members of groups such as the Jalisco Cartel New Generation (Cartel Jalisco Nueva Generación - CJNG).
In the absence of this data, one speculative hypothesis could be that the Sinaloa Cartel has succeeded in solidifying its reputation as a network of pragmatic, professional, and business-oriented entrepreneurs. This reputation fosters a sense of trust and dependability among the Sinaloa Cartel's associates. In contrast, rival cartels have struggled to do the same. To showcase their power, groups like the CJNG rely on ostentatious displays of violence and intimidation. While these displays may contribute to establishing the perception of the group as a formidable and merciless organization, they can also instill mistrust and uncertainty among potential business partners and allies, thereby diminishing their willingness to engage in mutually beneficial alliances.
IC: Is the organizational resilience you found in the Sinaloa Cartel due to its relatively horizontal decision-making process? Has this allowed local leaders to develop their own ambitions without needing to break away from the Sinaloa structure?
VP: Testimonies provided by former associates of El Chapo shed light on how the cartel has prioritized consensus-building among its leaders when making pivotal decisions. This unity has enabled the Cartel to present a unified front when making crucial determinations such as initiating conflicts or embarking on significant business ventures. For instance, the trial transcripts illustrate how the governing body of the Sinaloa Cartel sought collective consensus before carrying out the assassination of Rodolfo Carrillo Fuentes or establishing a business alliance with the Norte del Valle Cartel.
The transcripts from El Chapo's trial also unveil that the day-to-day management and decision-making responsibilities are predominantly delegated to jefes de plaza (local drug trafficking bosses), who possess a considerable degree of autonomy in their activities. However, even these regional managers are bound by fundamental rules designed to promote cooperation and prevent conflicts within the Cartel and with its business associates.
IC: You mention a fascinating concept of “contractual rights and obligations” within the Sinaloa Cartel. Could you explain how these rights were established and enforced within the group?
VP: In the legal realm, firms can enter into contracts that explicitly outline any rights and obligations. Should one party fail to fulfill its obligations, the aggrieved party has the recourse to file a lawsuit against the defaulting party. However, within the realm of criminal activities, there is no avenue for criminals to litigate against their untrustworthy accomplices who fail to fulfill their contractual obligations. Therefore, criminal organizations must rely on alternative mechanisms to ensure compliance among the various parties involved in an agreement.
The Sinaloa Cartel has successfully devised a system of commercial transactions founded on trust and the expectation that business partners will honor their commitments. This system has enabled the Sinaloa Cartel to establish intricate transnational business agreements.
For example, as elucidated in Chupeta's testimony, South American drug producers typically compensate the Sinaloa Cartel by providing cocaine for the delivery of their product to the United States. In the event of a drug shipment being lost or seized in Mexico, the Sinaloa Cartel undertakes the responsibility to fully reimburse the value of the entire shipment to its South American counterparts.
Conversely, once the shipment crosses the border into the United States, the Sinaloa Cartel assumes ownership of a predetermined percentage of the merchandise. Consequently, if the shipment is lost or seized on American soil while under the custody of the Sinaloa Cartel, the criminal organization is solely liable for the losses corresponding to its portion of the shipment.
In order to foster adherence to contractual rights and obligations, the Sinaloa Cartel has undertaken measures to establish itself as a trustworthy business partner. An illustrative example occurred in 1993 when El Chapo found himself indebted to his Colombian associate, Chupeta, for a substantial sum of $42 million. Following El Chapo's initial arrest, his brother Arturo Guzmán and other members of the Sinaloa Cartel assumed responsibility for the debt, repaying Chupeta in several installments.
Moreover, the Sinaloa Cartel incentivizes compliance with business agreements by bestowing rewards on those who exhibit reliability and bolstering their reputation within the industry. The Cartel employs various tactics, including the exchange of "hostages," to ensure that partners fulfill their commitments. As an example, Alexander Cifuentes Villa, a Colombian drug trafficker, resided as a virtual captive in El Chapo's estate, serving as collateral to ensure his family's fulfillment of their business obligations.
In cases where infractions occur, the Sinaloa Cartel may opt to terminate business dealings with an untrustworthy partner. However, the trial transcripts of El Chapo also contain numerous instances wherein the Cartel's leaders resorted to violence as a means of retribution for real or perceived grievances.
IC: The section on political governance mentions how plaza bosses are responsible for corrupting and paying off local officials. This is a common, if not essential tactic, for any criminal group in Mexico. Were there any differences in the way the Sinaloa Cartel handled these matters, as compared to their rivals?
VP: The Sinaloa Cartel has established a relatively stable and predictable system of corruption, fostering ongoing interactions with Mexico's public institutions. This system appears to have played a role in consolidating an operational environment conducive to the cartel's longevity.
Within this system, plaza bosses assume the responsibility of overseeing illicit payments to local authorities. According to the testimony of Jesús Reynaldo Zambada, [brother of Sinaloa kingpin Ismael Zambada Garcia], the cartel's executives delegate the management of routine bribes to professional accountants. These specialists facilitate regular money transfers to officials at the municipal and state levels.
Conversely, the high-ranking leaders of the Sinaloa Cartel personally oversee the group’s dealings with top-level officials. However, Zambada's statements suggest that even these sensitive relationships with high-ranking officials have become somewhat routinized. For instance, the cartel's leaders have adopted code names, such as "Yankee" to designate regional delegates of the Attorney-General's Office or "Puma" to refer to the commander of the now-disbanded Federal Police in the state of Sinaloa. Consequently, the Sinaloa Cartel's leaders directly handled the relationships with individuals identified as "Yankees" and "Pumas."
IC: Finally, looking at the Sinaloa Cartel today, do you believe it has maintained these same advantages after El Chapo’s arrest and extradition, or is it beginning to show the same fragmentation cracks as some of its rivals, like the Zetas?
VP: The question surrounding the future of the Sinaloa Cartel is undeniably intricate and difficult to forecast. Existing internal conflicts among different factions do suggest a potential loss of cohesion within the organization. Furthermore, the eventual capture or passing of Ismael Zambada García, alias “El Mayo,” who recently reached the age of 75, could deal a severe blow to the Cartel's prospects.
Ultimately, the endurance of the Sinaloa Cartel is also contingent upon the particular definition that analysts choose to apply to the group. In our study, we opted to define the Sinaloa Cartel as a criminal syndicate originating directly from the collaboration between four co-conspirators: Ismael Zambada García, Joaquín Guzmán Loera, Juan José Esparragoza Moreno, and Héctor Luis Palma Salazar.
The narrow definition we have adopted implies that the Sinaloa Cartel will inevitably cease to exist once it no longer comprises individuals directly linked to its original founders. This position may be subject to dispute among some analysts. For instance, there may be arguments posited that the Sinaloa Cartel will persist as long as a coalition of criminal entrepreneurs dominates organized crime in Sinaloa and chooses to identify itself as the Sinaloa Cartel, irrespective of the lineage of its members.
*This interview has been edited for clarity and fluidity.