How Much Money Do Cartels Make and Where Is It? (Part I)
Step into the twisted world of narco-nomics and cartel-omics
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When Mexican military planes flew 26 alleged top cartel operatives north to the United States on Aug. 12, the head of the DEA, Terrance “Terry” Cole, went personally to meet one particular suspect as he was taken into custody in Washington, Abigael González Valencia, alias El Cuini. While the 52-year old Cuini is not as infamous as El Chapo, El Mayo, or his own brother-in-law, El Mencho, he is believed to be one of the most important cartel figures and of particular interest to the U.S. government. This is because Cuini is above all a money man, dubbed as the financial brain of the Jalisco New Generation Cartel, and federal agents want to get their hands on as much of that wealth as they can.
Cuini is accused (he plead not guilty) of heading an organization within the Jalisco Cartel known as the Cuinis (it’s also referred as its own cartel allied to the Jalisco mob) that specializes in money laundering, front-companies and shifting funds, as well moving its own drugs. Many of his 17 brothers and sisters are also accused of being in the racket, including Rosalinda, the wife of Mencho. The U.S. Treasury has blacklisted dozens of businesses it says are linked to the Cuinis, such as hotel resorts, shopping malls, construction companies, housing developments, boutiques, a music promotion company and a tequila brand.
“If you want to find the big money then you don’t follow the sicarios but the money launderers. The Cuinis are the ones who deal with the finances so they end up with an incredible amount of wealth,” a former Mexican federal agent involved in Cuini’s arrest in Mexico tells me. “They have assets everywhere, in South America, in Europe, in Asia. They control a vast fortune.” Mexican federal agents arrested Cuini in Puerto Vallarta back in 2015 but he managed to delay extradition until his expulsion last month.
Money is the life blood of cartels, the reason thousands of operatives work together to flood America with drugs, run human smuggling, steal tanker loads of crude oil, and shake down businesses. This hunger for cash, rather than any ideological motive, drives their rampant violence in Mexico and provides the resources to hire legions of killers and pay off police and politicians.
Yet cartel finances can be mysterious and confusing. They are clandestine organizations operating in the black market so we can’t look at their ledgers (most of the time although some crazy narcos actually kept them!). The Zetas never filed a cartel tax declaration.
A lot of questions appear allusive. How much is the cartel economy worth every year? Are individual kingpins really billionaires as Forbes magazine has claimed? What assets can we actually see?
Sinaloa boss of bosses Ismael “El Mayo” Zambada plead guilty last week and made an agreement that he would “fully assist the government in effectuating the payment of the forfeiture money judgement” of an incredible $15 billion. But will the U.S. government actually bag anywhere near this much?
In this two-part story, I break down what we do know about cartel-omics and narco-nomics. (Narconomics is also the name of a book by Economist journalist Tom Wainwright although before that it was the title of a series I did for GlobalPost). I’ll go into the profit margins of drugs and how they are divvied up along the chain of command. I’ll assess revenue from other rackets and if they have really replaced drugs as a main source of income. I’ll break down the fundamentals of their money laundering and where the wealth is found. But a key part that I will also get into is how the U.S. government ends up with billions of dollars of this drug money, and it is an incentive that drives questionable deals with narcos.
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