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Breaking Bad: How crystal meth became Guadalajara’s most lucrative export

February 29, 2012

When the Mexican Army raided a ranch in Tlajomulco earlier this month they made an unprecedented discovery. A makeshift laboratory, the ranch was filled with vat after vat brimming with white and yellow crystalline powder.

The sheer scale of the operation was staggering. This record haul of 15 tons of pure methamphetamine was equivalent to half the total of crystal meth seized worldwide in 2009. No isolated incident, this was the latest evidence of Guadalajara’s status as a “chemical city” at the heart of Mexico’s synthetic drug trade.

“Jalisco is a major hub of methamphetamine production in Mexico,” reads a revealing report leaked from the U.S. Consulate in Guadalajara. The document sheds light on the machinations of the local drug industry and affirms that “ending Guadalajara’s status as Mexico’s drug chemical capital will require a sustained long-term effort.”

What is crystal meth?

In comparison to cocaine or marijuana, most people know relatively little about methamphetamine. But with Mexican cartels branching out into synthetic drug production, it has become one of the most lucrative local exports.

In the United States, methamphetamine has long been considered something of a “redneck drug,” brewed in rural areas of the South. In recent popular culture it is perhaps best known from the TV series Breaking Bad, which details the exploits of a former-chemistry professor who turns his hand at illicit methamphetamine production.

More commonly known as “crystal meth,”  “ice,” or simply “meth,” methamphetamine is a highly addictive pyschoactive stimulant that can be injected, smoked or snorted. It increases alertness, energy and concentration, and in high doses can induce euphoria, enhance self-esteem and increase libido.

Produced mainly in Mexico and California, it is a synthetic drug “cooked up” in laboratories. The principal ingredient is pseudoephedrine, a pharmaceutical drug available over-the-counter in many countries. In November 2007, the sale of pseudoephedrine was banned in Mexico, due to its use as a precursor in the illegal manufacture of methamphetamine.

Outlaw motorcycle gangs used to control production and trafficking in southwestern states such as California, Arizona, Utah, and Texas, but in recent years Mexican drug cartels have taken over the industry. According to a Drug Enforcement Administration (DEA) report from 2007, “approximately 80 percent of the methamphetamine used in the United States originates from larger laboratories operated by Mexican-based syndicates on both sides of the border.”

Why the sudden boom?

There are several factors behind the shift toward producing synthetic drugs in Mexico. Above all, from the cartels’ perspective, it is a more efficient and potentially more lucrative business than trafficking other drugs.

Specialists from Colombia’s Drug Enforcement Agency (DNE) say that while it requires 300 kilos of precursors to produce one kilo of cocaine, the same quantity of chemical precursors will produce 60 kilos of synthetic drugs worth millions of dollars. A kilo of methamphetamine can sell for 20,000 to 35,000 dollars in the United States and some labs can produce up to 30 kilos a day.

Another major factor is that methamphetamine can be easily produced in large quantities here in Mexico, a fact that sets it apart from heroin or cocaine. While gangs in Mexican can grow opium poppies to make impure “black-tar” heroin, they cannot compete with producers in Afghanistan, who control 90 percent of the world’s pure “white” heroin market.

Cocaine, meanwhile, is derived from the coca plant, which only grows in large quantities in South America’s Andean region. Homegrown methamphetamine production cuts out the costs of negotiating with the Colombian cartels that control the production of cocaine, as well as the risks of smuggling it through South and Central America.

Thus by branching out into methamphetamine, Mexican cartels can control an independent and profitable market by acting as producers, rather than trafficking intermediaries.

The Guadalajara factor

What is it that makes Guadalajara in particular such a perfect location for methamphetamine production?

Last year, WikiLeaks published a confidential diplomatic cable sent in December 2008 from the U.S. Consulate in Guadalajara to the Secretary of State in Washington, entitled “Chemical city: Guadalajara, Jalisco and the meth trade.” It notes that methamphetamine “production is especially high in and around the city of Guadalajara due to the confluence of geography, availability of materials, adequate infrastructure, and scientific expertise.”

The city’s proximity to the major port of Manzanillo in Colima is crucial in terms of obtaining the ingredients for methamphetamine production. Linked to Guadalajara via a major highway, Manzanillo is the principal point of entry for chemical precursors in Mexico.

“The large volume of containers passing through the port makes intensive screening difficult for the authorities and creates a higher success rate for illicit shipments of pseudoephedrine and other chemicals,” reads the leaked consulate report.

Moreover, “Jalisco has large swaths of isolated rural land where drug syndicates can set up labs and act with relative impunity. The sprawling Guadalajara metro area also offers many possibilities for concealing a lab in warehouses or older industrial buildings.”

The number of labs discovered in Jalisco rose from 28 in 2010 to 58 in 2011, while seven have already been discovered this year. Most were found in the metropolitan zone or Los Altos de Jalisco.

The Attorney General’s Office (PGR) says the majority belong to the region’s rival cartels, Jalisco Nueva Generacion and La Resistencia, although 15 labs run by the Gulf Cartel have also been found near the border with Zacatecas. The latter group “kidnaps Central American migrants traveling to the United States on the train from Veracruz, and they make them work in the production of this drug,” said PGR spokesman Ulises Enrique Camacho.

The local availability of ingredients and expertise also makes Guadalajara a prime location for methamphetamine production. Besides psuedoephedrine, the other chemicals needed to produce methamphetamine are readily available thanks to Guadalajara’s thriving (and relatively unregulated) pharmaceutical industry.

The production process, which can be extremely dangerous if performed by amateurs, requires workers with knowledge of chemistry and industrial processes – something Guadalajara has in no short supply.

“The usual cartel enforcers with gold chains and Kalashnikovs are not up to the task,” notes the consulate cable, “but Guadalajara has a wealth of young chemists and engineers that can be recruited by drug syndicates to staff methamphetamine labs.” The cartels can afford to pay these people significantly more than legitimate businesses would.

The consulate report even cites examples of seemingly respectable local businesses working directly with the cartels. In October 2008, Zapopan-based drugs company Farmaceuticos Collins was cited by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) under the 1999 Foreign Narcotics Kingpin Designation Act for diverting substantial quantities of methamphetamine precursors to the Amezcua Contreras cartel.

The consulate staff noted that not all the chemists involved are Mexican. In one case (which sounds remarkably similar to the plot of Breaking Bad) a former U.S. chemistry professor was arrested in 2006 for running a meth lab only six blocks from the consulate.

The report states that while professional chemists are hired to set up the labs, daily operations are usually run by less skilled “cooks,” who are told to  follow the “recipe” written by the chemist. Their lack of expertise results in a poor safety record. As a result, “many of the largest lab discoveries in recent years have resulted not from police intelligence work, but from fires and explosions in the aftermath of industrial accidents.”

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Shifting production methods

The enormous quantity of meth discovered at the Tlajomulco ranch was surprising, as it goes against the recent trend toward smaller scale labs. “In the current atmosphere of increased vigilance by the authorities, the cartels have begun shifting to a decentralized network of smaller labs for production,” states the consulate report. “Although profits won’t be as high due to increased overhead costs, there is also less chance of devastating financial risk caused by shutting down a major lab … if such a lab goes out of business  it takes out a large chunk of the syndicate’s profit margin.”

This is exactly what happened in Tlajomulco, where authorities discovered the biggest lab in Mexican history (and possibly the largest ever anywhere). The 15-ton haul was said to be worth over 58 billion pesos, or up to 4.5 billion dollars at street level in the United States. DEA spokesman Rusty Payne said such a loss “could potentially put a huge dent in the supply chain in the U.S.”

Due to “recent success by Mexican authorities in raiding large labs” – and the ban on pseudoephedrine – the consulate believes some progress has been made in disrupting methamphetamine production. Aside from downscaling their production labs, Mexican cartels have been forced to adopt the alternative “dirty” or “P2P” method used by Californian biker gangs in the 1970s and 1980s. This involves using the more readily available precursors, phenylacetone and  methylamine, yet the process is harder to control and conceal and yields a smaller quantity of less potent product.

What happens next?

The sheer scale of the operation discovered on the outskirts of Guadalajara this month shows that methamphetamine still plays a major part in the plans of cartels across Mexico, and especially in Jalisco.

Last week, Stratfor Global Intelligence released a report entitled “Meth in Mexico: A Turning Point in the Drug War?” Statfor believe whichever cartel comes to dominate the lucrative synthetic drug market could assume an unassailable position of power, marking “a breakthrough in the violent stalemate that has existed between the Sinaloa Federation, Los Zetas and the government for the past five years.

“Expect fighting over the methamphetamine market to maintain violence at its current levels, but once a group comes out on top it will have far more resources to expel or absorb rival(s),” concludes the Stratfor report. “This process may not sound ideal, but methamphetamine could pick the winner in the Mexican drug war.”

With production centered in and around Guadalajara, the city could be at the center of a decisive phase in the ongoing conflict. The 2008 consulate cable predicted that “Guadalajara’s prominent position in the methamphetamine trade is unlikely to change soon.” Over three years later, those words still ring true.

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