Cartel kingpin El Chapo is jailed for life, but the US-Mexico drug trade is booming
The infamous Mexican drug lord Joaquín Archivaldo Guzmán Loera – aka “El Chapo” – has been sentenced to life plus an additional 30 years for drug trafficking, conspiracy, money laundering and weapons charges, among other crimes committed over the past quarter-century as head of Mexico’s Sinaloa cartel, the Western Hemisphere’s most powerful organized crime syndicate.
U.S. officials celebrated El Chapo’s demise as a triumph in the war on drugs. President Donald Trump has taken an aggressive stance on Mexican drug cartels, vowing at his January 2017 inauguration to stop “the crime and gangs and drugs that have stolen too many lives.”
“This sentencing shows the world that no matter how protected or powerful you are, DEA will ensure that you face justice,” said the acting administrator of the U.S. Drug Enforcement Administration, Uttam Dhillon, at Guzmán’s sentencing.
Having studied the politics and economics of the U.S.-Mexico drug trade, I see a different lesson in Guzmán’s life story. The U.S. may have locked up Mexico’s worst “bad hombre,” but the business he ran is far too big to fail.
Mexicans have greeted Guzmán’s demise with more skepticism.
The Mexican newspaper La Jornada noted that the flow of illicit drugs into the United States has not diminished since El Chapo’s arrest.
Mexican estimates suggest that each month the Sinaloa cartel trades two tons of cocaine and 10,000 tons of marijuana plus heroine, methamphetamine and other drugs. Founded in Sinaloa state in the 1990s, the cartel now distributes drugs in 50 countries, including Argentina, the Philippines and Russia.
But Mexican cartels were born to serve consumers in the United States, the world’s biggest consumer of illicit drugs.
It’s Americans’ “insatiable demand for illegal drugs,” as then-Secretary of State Hillary Clinton said in 2009, that allowed Guzmán’s Sinaloa cartel to become the world’s biggest supplier of illicit drugs.
Drug trafficking has a highly lucrative business model. According to data from 2016, the wholesale price for a gram of cocaine is approximately US$2.30 in Colombia and $12.50 in Mexico. The same gram will cost $28 in the U.S. By the time it gets to Australia, it could fetch as much as $176.50.
Retail prices per gram are even higher: $82 in the U.S. and $400 in Australia.
Drug prices rise significantly during transit as intermediaries demand compensation for the risk they assume in getting the product to consumers. This liability markup is one reason that keeping drugs illegal has made them so expensive on the streets and so profitable for the people who trade in them.
Killing, threats and bribes
Illegality is also the reason that the drug trade is so violent.
Running an illegal operation, kingpins like Guzmán must enforce their own agreements and protect themselves from authorities and competitors. They do so using a combination of killing, threats and bribes.
Guzmán also bribed as many officers as necessary to succeed in his business.
Alex Cifuentes, a close associate of Guzmán, testified in the trial that the cartel chief once paid a $100 million bribe to then-Mexican President Enrique Peña Nieto – an accusation Peña Nieto’s administration dismissed as “false, defamatory and absurd.”
Walls versus profit
For five decades since President Richard Nixon launched the war on drugs, the United States has chose not to focus on the economic forces driving this clandestine industry in favor of punishment, sending millions of drug traffickers, corner dealers and drug users to jail.
Even as states try to ease mass incarceration by legalizing cannabis and decriminalizing minor drug offenses like possession, President Trump has called for escalating the federal government’s drug war.
In 2018, Trump delivered an incendiary speech at the United Nations decrying the “scourge” of drugs, followed with a pledge signed by 129 nations to “cut off the supply of illicit drugs by stopping their production…and flow across borders.”
A physical barrier is unlikely to thwart drug smugglers, particularly the wily Sinaloa cartel, history shows.
When confronted with a high-tech border fence in Arizona, constructed long before Trump’s administration, Mexican smugglers use a catapult to fling hundred-pound bales of marijuana over to the American side.
“We’ve got the best fence money can buy,” former DEA chief Michael Brown told New York Times journalist Patrick Radden Keefe in 2017, “and they counter us with a 2,500-year-old technology.”
Then there’s the other ancient technology perfected by Guzmán: the tunnel. In the past quarter-century, officials have discovered about 180 cleverly disguised illicit passages under the U.S.-Mexico border. Many, like the one Guzmán used to escape prison, are equipped with electricity, ventilation and elevators.
Corruption undermines the law outside Mexico, too. Between 2006 and 2016 some 200 employees and contractors of the Department of Homeland Security – the agency charged with defending the U.S. border – have accepted nearly $15 million in bribes, according to The New York Times.
“Almost no evidence about corrupt American officials” was allowed at El Chapo’s trial, the Times reports.
After El Chapo
El Chapo’s life sentence will not reduce the availability, price, use or lethality of currently illegal drugs.
Guzmán’s capture hasn’t even hurt the Sinaloa cartel, which has a new boss who promotes a more horizontal leadership structure and is expanding its operations into other criminal activities like illegal mining and human trafficking.
Drug trafficking, of course, is not just a Mexican business. In June, U.S. authorities in Philadelphia seized a cargo vessel carrying nearly 20 tons of cocaine.
The drug-running ship didn’t belong to the Sinaloa cartel. It was owned by a fund run by banking giant JPMorgan Chase.
This story is an updated version of an article originally published on Feb. 17, 2017.