Mexico sent troops to fight cartels' new billion-dollar business, and some Mexicans are fighting back

Much of the fuel is stolen through illegal pipeline taps, which can range from crude punctures to sophisticated valves. The number of such taps rose from 132 in 2001 to 3,348 in 2014. In 2016, Pemex reported 6,873 illegal taps, which nearly doubled in 2017 to 10,363. In 2018, Pemex reported finding 12,581.

For some time, fuel theft was largely done by local thieves or by people from rural and isolated communities, who used stolen fuel for their own needs or sold it to supplement their income.

But in recent years, the lucrative nature of fuel theft — smuggling and reselling stolen fuel is often easier than illegal narcotics — has drawn in organized criminal groups, which bring a greater ability to corrupt and larger capacity for violence to the trade.

Organized criminal groups are able to use their connections to and control over law enforcement or Pemex workers to steal whole shipments in tanker trucks.

Much of the theft takes place in the states of Guanajuato, Hidalgo, and Puebla, which border Mexico City to the north and east. Puebla is a hub, particularly in a region known as the Red Triangle, through which much of the fuel going from Mexico City to the rest of the country transits.

Source: Justice in Mexico project

But Guanajuato, home to Mexico's second-oldest refinery, has become a focal point for fuel theft and for Lopez Obrador's crackdown. That was on vivid display last week when soldiers and police rolled into the town of Santa Rosa de Lima.

The town — only about 40 miles north of the Antonio M. Amor refinery in the town of Salamanca — lends its name to a cartel that over the past few years has grown significantly, buoyed by illicit profits from oil revenue.

The Santa Rosa de Lima cartel, led by Jose Antonio Yepez Ortiz, aka "El Marro," or "the mallet," has taken on the powerful Jalisco New Generation cartel and the government, reportedly by hoisting banners threatening Lopez Obrador.

The banners were hung in late January, after an operation in the area seized thousands of liters of stolen fuel. Afterward, residents in the area set up blockades with burning cars.

The cartel denied hanging the banner threatening Lopez Obrador, however, saying it was put up by rivals trying to attract attention from authorities.

Narcomantas, as these banners are known, have appeared throughout Mexico's war on drugs, hung by groups to claim credit for themselves or to cast attention on rivals.

Its prominence has made it a target for authorities. A helicopter circled the town on Monday as hundreds of soldiers, marines, military and federal police, and state authorities entered the town, practically filling its center. At that point, locals set up more fiery blockades in the area.

The blockades continued Tuesday, with burning vehicles obstructing road in the area. Tuesday's events came after the mayor of Villagran, the municipality in which Santa Rosa de Lima is located, said the demonstrations were not linked to organized crime but rather were carried out by locals who were distrustful of security forces.

Mexicans have protested in other areas where troops have been deployed to prevent fuel theft.

"When Lopez Obrador moved these people into those areas, the locals protested," Mike Vigil, former chief of international operations for the US Drug Enforcement Administration, told Business Insider. "The reason I think that the protest for the most part occurred is because they didn't want them there because a lot of them were involved in the theft of petroleum."

Source: Animal Politico

Authorities said residents in the town of 2,800 were paid to stop the troops and police and to report their movements to the cartel. Police said they found envelopes with the cartel's stamp, a mallet, and the phrase, "Relatives should be prepared to protest when asked to do so."

"It's very hard for people to change," Pedro Mendez, 52, who sells household goods in Santa Rosa de Lima, told Reuters this week, as heavily armed police patrolled and helicopters circled above. "The bad guys know how to get to them and that there are people who'll take money to do their bidding."

Source: Reuters, Associated Press

Lopez Obrador's crackdown has attracted backlash. Efforts to secure fuel supplies against theft were blamed for shortages throughout the country earlier this year. In Santa Rosa de Lima this week, residents accused authorities of damaging private property and breaking car windows.

Yepez, the gang's leader, has evaded capture, though authorities said Wednesday they captured seven people linked to him, including his sister-in-law, believed to be his finance chief, and her husband, a federal police officer.

Authorities said the operation also recovered stolen vehicles and freed six kidnapping victims, including two police officers.

Police also raided a mansion belonging to Yepez, where they found several tunnels reminiscent of those used by Joaquin "El Chapo" Guzman, the Sinaloa cartel chief recently convicted of drug trafficking and other crimes in New York City.

Source: Animal Politico, Zona Franca

Sending the military to stop fuel theft creates risks, including potential clashes with criminals or civilians involved in that theft, James Bosworth, an expert on the region, told Business Insider, adding that the "military is often a blunt instrument, capable of stopping fuel theft through force but without the capacity to manage the balance between security and the necessary logistics of moving fuel from place to place."

"That mission also changes how the government and military define success," added Bosworth, founder of political-risk firm Hxagon. "In areas like Guanajuato, fuel theft is down, but violence is way up, not exactly a positive story for the country."

Guanajuato had long avoided the violence that has plagued much of Mexico over the past decade, but the number of homicides there has climbed precipitously in recent years.

There were 957 homicides in the state in 2015, according to government data. That rose to 1,096 in 2016 and to 1,423 in 2017. In 2018, there 3,290 homicides there, the most of Mexico's 32 states. There were 293 homicides in the state in January 2019 alone.

Guanajuato's rising violence has been driven by fuel theft and conflict among criminal groups, mainly the Santa Rosa de Lima cartel and the Jalisco New Generation cartel, Bosworth wrote in a mid-February report.

Source: Proceso

Mexico's military has been deployed for years to fight organized crime, in part because of its reputation for integrity, particularly that of the navy, in the face of criminal groups that rely heavily on corruption. But sending troops to confront fuel theft also puts that at risk, Vigil said.

Fuel-theft is a billion-dollar industry, and profits from it have risen in recent years, Vigil said, adding that "soldiers are not paid hardly at all, and as a result of that, it's going to expose them to corruption, because they're going to be offered large bribes, which would probably at least triple the salaries they're making."

"Even if they're clean now, and they're exposed and they succumb ... then that's going to also put them at risk [of] taking other bribes," Vigil said, citing a source as saying some in the security forces welcomed the new assignment, seeing it as less dangerous with more potential for profit. "Once they get a taste of corruption," Vigil added, "we've lost them in terms of ethics."

Using troops to fight fuel theft continues a troubling pattern in Lopez Obrador's brief tenure, Bosworth said. "Rather than building civilian capacity that can provide long term solutions, AMLO keeps turning toward the military for quick fixes. It lets him centralize decision making and dodge some of the civilian checks and balances. Ultimately, it will weaken Mexican democracy."