Corruption, Laundering, and Influence: a Mexican Drug Cartel’s Recipe for Success

By Makynsie Bancroft

The United States preaches through its media and education systems not only that drugs are harmful, but that involving yourself with drugs of any form will result in harsh criminal charges and punishment. However, the horrors behind American drugs that we are not exposed to are the violence, corruption, and manipulation Mexican drug cartels cause within Mexico. What we do not learn about is the extensive money laundering and corruption within the United States, and the lack of criminal punishment that accompanies these crimes. An episode in the Netflix docuseries Dirty Money, titled “Cartel Bank,” reveals these dark, hidden aspects of Mexican drug cartels, from their operations in Mexico to the significant money laundering completed by willing, licit U.S. companies. “Cartel Bank” opens by stating that the cartels cannot survive without government corruption and the Americans to launder their money.[i] The United States is fully capable of draining the power out of Mexican drug cartels, considering they function specifically to supply the “insatiable U.S. appetite for drugs.”[ii] Yet, our businesses aid them and face no punishment, calling into question the so-called “War on Drugs.” The ability of Mexican drug cartels to manipulate the Mexican people, corrupt the Mexican government, and launder hundreds of millions of dollars through licit U.S. businesses allows them to maintain their operations and substantial power on both sides of the Mexican-American border.

Corruption has an astoundingly large presence in all levels of the Mexican government. In 2008, directors of the federal police and six employees of the attorney general’s office of organized crime were arrested for their ties to the cartels, including the director, who was reportedly making $450,000 per month. This corruption amplifies at the police level, as 93.6 percent of municipal police rely on corruption to supplement their low salaries.[iii] In the docuseries, a Mexican reporter explains that after her father was kidnapped and murdered by the cartels, the police said her family would have to pay if they wanted an investigation.[iv] In another case, federal police physically assisted  cartel operations, picking up cocaine shipments from planes and delivering them to the next stop. Rather than simply turning the other cheek to cartel activity like many corrupt officials, the Mexican government enables and progresses such activity.

Seeing corruption to this extent, it is no surprise that the cartels use political and economic influence to put the officials they want into power. “They do so using employment opportunities for Mexico’s vast unemployed population.” Drug cartels use these employment opportunities to gain the support of the Mexican people and to boost money supply and exchange within the economy. Decreasing unemployment and increasing economic activity is what allows the cartels to gain respect from government officials. Furthermore, they give “campaign contributions to candidates and corrupt payoffs to state officials” to push for the people they want to be in power, and to ensure that those in power do what they expect. The consequence of turning against the cartels is “as shown by the killings of local and state candidates— violence and intimidation if necessary.”[v] The fear of being killed by Mexican drug cartels extends even to the government level, and this fear is what gives the cartels such strong power over all of Mexico.

Tactics of intimidation, like violence, are unfortunately most commonly used on the general public. According to the documentary, in 2017, 10,000 Mexican citizens were murdered by drug cartels in a 6-month span, and this number does not include those who went missing.[vi] This violence is not specifically targeted to those involved with the cartel; even the innocent are at great risk. “Cartel Bank” tells a story in which a cartel murdered 15 children at a birthday party in Mexico City. It further mentions that it’s not uncommon for schools in Mexico to have lockdowns or evacuations due to threats of cartel violence.[vii] To illustrate the true extent of the violence, an article by Judicial Watch reads, “The cartels engage in beheadings, car bombings, dissolving humans in acid, mass murders, torture, bombings, and political assassinations.” This extreme violence is seen almost daily on the streets of Mexico as a constant reminder of the cartels’ power. No justice is ever served for these crimes, because “they have infiltrated the highest levels of the Mexican government with bribes and corruption,” leaving the Mexican people to fend for themselves. Without the help of law enforcement and government, the public is highly vulnerable as “Mexican drug cartels have utilized techniques that focus on mind manipulation…commonly utilized by organizations such as Al-Qaeda.”[viii] These tactics illustrate the lengths that these cartels will go to gain and maintain power and influence.

Despite every terrible crime they have committed, many members of the public still respect the cartels. As an obvious manipulation tactic, Mexican drug cartels will give back to the community in a sad attempt to make up for the 100,000 plus citizens they have murdered. “When the government could not afford it, the cartel stepped in at times to foot the bill for roads, healthcare, and churches.” With a lacking government, the cartels have space to build a great reputation with the people through significant financial support. Especially in Mexico’s poorer regions, “cartel groups’ financial investments in the communities can sway the locals’ mindset.”. For example, to support the struggles of the recent pandemic, El Chapo’s daughter worked alongside other cartels to donate and deliver coronavirus relief packages in Guadalajara.[ix] Community support like this causes many locals to feel “loyalty and a connection to the cartel for its alleged economic support of the community.”[x] Whereas the government makes the public feel forgotten and insignificant, the drug cartels provide for their communities, even if they are the ones who destroy said communities to begin with.

Cartel manipulation of the public extends into several other forms, including bribery and coercion. Such tactics cause non-violent, ordinary citizens to become cartel affiliates. Farmers, for example, receive large amounts of money in bribes to grow marijuana and opium on their farms. In addition, the documentary states that middle-class citizens can make more money driving one truck across the border for a cartel than they can make in 6 months of honest work in Mexico.[xi] Cartel members also bribe bankers to open accounts for money laundering purposes. The unfortunate consequence of rejecting a cartel’s offer is, as expected, death. The docuseries episode describes a common phrase within Mexico, “silver or lead,” known particularly in the banking industry. This phrase means that when a cartel member comes to open an account, they will attempt to bribe the banker with silver while laying photos of the banker’s children on the counter. At this point, the choice for the banker is “silver or lead” – take the silver and open the account, or you and your family die.[xii] Many of the large army of cartel members are there out of necessity, not out of desire.

Though Mexican citizens are coerced into cartel participation, large transnational American banks like HSBC became involved voluntarily, tempted by the potential profits. Suspicions first arose when HSBC Mexico paired with Bital, a large Mexican bank known for servicing the cartels. If that didn’t raise enough red flags, there was then an institutional decision within HSBC to not look closely into bank transactions within the Mexico branch, though many professionals advised otherwise.[xiii] The documentary refers to a specific case in which the owner of a pharmaceutical company, Zbeni Ye Gon, was importing ingredients used for methamphetamine into Mexico for cartel use. When police raided his Mexico mansion, they uncovered enormous stacks of cash amounting to 205 million USD. They later discovered his laundering was done through HSBC.[xiv] This triggered a U.S. investigation into HSBC Global where they found that HSBC U.S. was banking for a number of companies on the OFAC Sanctions List, which is essentially a list of companies U.S. banks are prohibited from doing business with. Within a decade, HSBC was given several notices of the government finding suspicious activity, and at each hearing, the bank admitted to all accusations but insisted they would do better.[xv] This was a common occurrence for HSBC, yet somehow, this statement was always convincing enough for the government to let them off the hook, at least for the time being.

In the United States, the US District Attorney’s Office of West Virginia was determined to press criminal charges on HSBC after the state was exposed to the harsh ramifications of cartel business and money laundering, though it was to little avail. Early on, the Assistant Attorney General in D.C. asked that they cease the investigation. Nonetheless, they proceeded, and official criminal charges were filed against the United States branch and the overarching HSBC group. Officials across the country agreed that if there was any time to indict a bank for laundering, it was then.[xvi] Unfortunately, the United States government had a different plan.

Hope led to disappointment when HSBC admitted to all crimes, and yet their only punishment was to pay 1.256 billion USD in criminal penalties as well as 665 million USD in civil penalties. After laundering a total of 881 million USD for Mexican drug cartels, HSBC walked away only having to pay a whopping five weeks’ worth of profit.[xvii] It was later uncovered that Attorney General Eric Holder chose not to indict HSBC because of pressure from HSBC London of “potentially severe economic impact.” Not only did this prove that there is such a thing as being “too big to jail” in the United States, but it also caused many to believe that the so-called War on Drugs is nothing but a hoax. Rather than taking a prime opportunity to knock the cartels down and make a statement to licit U.S. companies, the government gave into outside pressure and let HSBC walk away unscathed.

The violence and corruption associated with Mexican drug cartels has only grown, and their power has grown with it, to the extent that they now may be more powerful than the Mexican government itself. An article by the Anadolu Agency in Turkey states, “People are without any hope because the state…alleges that it doesn’t have the capacity to deal with these organizations. They have so much power. How can society defend themselves from this?”[xviii] The Mexican government has lost control of the cartels, giving way for extreme corruption and violence. The American government has begun to follow in their footsteps, fearful to indict money laundering businesses because of potential economic repercussions. As stated previously, the docuseries episode “Cartel Bank” states that drug cartels cannot survive without corruption and the Americans to launder their money. Thus, until the Mexican and American governments actively work to stop money laundering and corruption involving the Mexican drug cartels, the Mexican public is susceptible to extreme violence and forced participation in cartel operations. In contrast, the American public is susceptible to drug use and a lifetime of drug addiction. The War on Drugs cannot possibly be successful without proper government assistance. In the meantime, the cartels will continue to not only succeed but expand their reach and power on international levels.