DARK SECURITY CLOUD HOVERS OVER MATAMOROS BUSINESS

UNCLAS SECTION 01 OF 02 MATAMOROS 000188 SENSITIVE SIPDIS DEPT FOR WHA/MEX E.O. 12958: N/A TAGS: ASEC PREL PGOV PHUM SNAR ECON KCRM MX SUBJECT: DARK SECURITY CLOUD HOVERS OVER MATAMOROS BUSINESS COMMUNITY MATAMOROS 00000188 001.2 OF 002 ¶1. (U) Participants: Consul General Michael Barkin EconOff Angela Palazzolo National Vice President Roberto Capistran, CANACINTRA Mexico (La Camara Nacional de la Industria de Transformacisn) President Alejandro Fernandez Sandoval, COPARMEX Matamoros (Confederacisn Patronal de la Republica Mexicana, S.P.) President Manuel Garcia Garza, CANACINTRA Matamoros President Javier Huerta, CODEM (Matamoros Economic Development Committee) President Carlos Rubio, AMMAC (Matamoros Maquila Association) Cirilia Quintero PhD., Professor-Investigator at COLEF (Colegio de la Frontera Norte) ¶2. (SBU) Summary: Local business association presidents and an academic depicted a vulnerable and anxious security and economic environment at a lunch with the Consul General on 3 December. They described the business community and the community at large as hanging on and laying low, waiting for better times. Conversation focused on the impact of the insecure environment on their employees and business investment, personal security concerns, border crossing delays, and a tourism sector that has yet to recover. End Summary -------------- (in)Security Environment and Investment -------------- ¶3. (SBU) According to the maquila managers in the group, their employees have been threatened by criminals and criminal activity. For example, one company has had three instances of their employees getting express kidnapped (taken to ATM's and forced to withdraw cash) in the last six months. Some express kidnappings have occurred immediately outside of industrial parks. Maquilas have adjusted their business practices in an effort to assist employees. Adaptations to the security environment include requiring employees to have bank accounts so paychecks can be electronically deposited, and paying the mandated holiday bonus early or spreading out the bonus over a number of weeks. Many maquilas also advise employees to have two bank accounts, one where their paycheck is deposited, and another small "cash account" linked to an ATM card in order to minimize their losses if they become an express kidnapping victim. ¶4. (SBU) The group said investors are cautious and not investing all across Mexico right now. They said the economic slowdown has negatively impacted their businesses but local investment is dragging as a direct result of fear and uncertainty regarding the security environment in Matamoros and the Mexican border region. Some members of the group believed the growth of the Zetas and related criminal activity has had the largest negative impact on security in Matamoros. They think the Zetas are diversifying their operations and the cartels cannot control them. The group lamented having to spend so much time concerned about security, rather than keeping their focus on growing their businesses. (Note: The Zetas are a Drug Trafficking Organization (DTO) in Matamoros who are operating in a historically Gulf Cartel controlled city. They are increasing their footprint through extortion. End Note) -------------- Challenges to recovery: Border delays, tourism nearly non existent -------------- ¶5. (SBU) The group spoke of issues they consider barriers to Matamoros's capability to recover from the economic downturn. They said north and southbound border delays are a constant challenge for business and tourism in the area, especially in the months of November and December when holiday travel can increase wait times to several hours at the three crossings between Matamoros and Brownsville. In addition, tourism has not recovered due to crossing delays, security concerns, and the economic downturn. The group saw tourism as an important part of the economic life of the community that is nearly non-existent at this time. -------------- Personal security concerns overshadow everyday life -------------- ¶6. (SBU) Some members of the group expressed concern for their family's safety. They delineated a line between common crime MATAMOROS 00000188 002.2 OF 002 and crime as a result of DTOs and the impact upon their family life. Anxiety about common crime is as much a concern as the presence of DTOs or Mexican military in Matamoros. They intimated how they escort their children to school each day and are afraid to let them walk alone for even a few blocks because they could be targeted by kidnappers. Some gave examples of criminals asking business people and doctors for `protection' money, though none admitted this happening to them personally. They shared anecdotes of friends and business associates who have moved their families into cities in Texas such as Brownsville, San Antonio, Houston, and beyond due to fears about the security situation in Matamoros and the border region in Mexico as a whole. ¶7. (SBU) Even though individual business people may be targeted by criminals for protection money the maquila managers in the group said maquilas are not targeted for protection money. They posit DTOs do not want to attract too much attention from the U.S. as the majority of maquilas in Matamoros are U.S. based companies. BARKIN