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

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(in)Security Environment and Investment
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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)

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Challenges to recovery: Border delays, tourism nearly non
existent
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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.

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Personal security concerns overshadow everyday life
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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