WINNING OR ONE STEP BEHIND: GOM'S INTERDICTION

C O N F I D E N T I A L SECTION 01 OF 03 MEXICO 002574

SIPDIS

E.O. 12958: DECL: 07/21/2019
TAGS: PGOV PREL PINR KCRM SNAR MX
SUBJECT: WINNING OR ONE STEP BEHIND: GOM'S INTERDICTION
POLICY FOR METH-LABS

Classified By: Political Minister Counselor Gustavo Delgado for reasons
1.4 (b) and (d)


1. (SBU) Summary. While Mexican law enforcement officials
have increased raids on the destruction of drug labs in
recent months, the effort does not appear to be staunching
the flow of drugs into the U.S. Instead, the raids have
prompted producers to develop more creative manufacturing
techniques, to rely on alternative precursors, and to build
smaller, less capital intensive labs. End Summary.



2. (SBU) On 10 August, the Mexican daily La Reforma
displayed a 23-page pictorial on the Mexican Army's latest
discovery of a mega meth-lab in a remote part of Mexico. The
army contended that this meth-lab was not only the production
facility of vast quantities for various narcotics including
methaphetamines, but it was also the suspected hide-out of
Sinaloa Cartel leaders Joaquin "El Chapo" Guzman and Ismael
"El Mayo" Zambada. When the Mexican Army raided the remote
compound capable of housing approximately 100 workers, they
found the compound deserted. Although the army confiscated
or destroyed a substantial amount of drugs and rendered a
significant drug making inoperable, the true impact of this
dismantling campaign is difficult to quantify. As of 20
August, the Mexican Attorney General (PGR) reported that 108
meth labs had been destroyed in 2009. However, as meth
prices have remained relatively unchanged over this time
period, it is not clear the GOM's disruption efforts
dramatically changed either the availability meth or the
bottom line for traffickers.


Interdiction and Dismantling: An Impressive Performance
Metric


3. (SBU) Throughout 2008 and into 2009, Mexico's President
Felipe Calderon continued unprecedented efforts to stop the
flow of methamphetamine precursor chemicals. The
restructuring and more aggressive deployment of security
forces, enhanced cooperation with U.S. law enforcement
agencies, and strong engagement of the Mexican military in
the fight to dismantle methamphetamine labs proved to be
successful in finding and destroying meth labs. These efforts
led to increased pseudoephedrine seizures and increased
seizures of methamphetamine laboratories.


4. (SBU) As part of the GOM,s continuing effort against
drug traffickers, the Mexican military targeted and
dismantled more of methamphetamine labs across the country.
The PGR/Center for Statistics and Analysis, CENAPI, indicates
that takedowns of clandestine methamphetamine laboratories in
Mexico continues to rise. GOM reports that 108 clandestine
methamphetamine laboratories were discovered and seized
between January and August 2009, compared to 44 in all of

2008. The Mexican military is responsible for the majority of
the labs seizures this year. On June 18, 2009, the Mexican
military seized one of the largest methamphetamine
laboratories ever found in the country, with enough reported
ephedrine to produce more than 40 tons of methamphetamine or
about 309 million individual doses. Vice Admiral Jorge
Humberto Maldonado was quoted saying, "This is one of the
heaviest blows to the drug traffickers in this administration
... as far as synthetic drugs are concerned." Maldonado
estimated that the precursors were enough to produce
methamphetamine worth $1.4 billion in street value.


5. (C) The GOM has enhanced its ability to target the
methamphetamine trade at all levels, from diversion to
manufacturing to transporting, as evidenced by their large
seizures of pseudoephedrine and the dismantling of several
"super labs". The continued dismantling of "super labs" is
leading to the creation of small toxic labs (STL) across
Mexico. There are already signs of STL,s emerging in areas
where "super labs" have been dismantled or are not present.
These smaller labs do not require a significant investment by
organized crime and are quick and easy to assemble. The
rapid development of these types of labs facilitates the
continued flow of methamphetamines into the U.S. and fuels
the growing meth addiction problem in Mexico. The Mexican
drug trafficking organizations (DTOs) are in the process of
adapting to the GOM's crack down. Analysis of U.S.

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price/purity data shows that methamphetamine prices remain
stable or lower.


6. (SBU) Meth labs throughout Mexico fall into three
distinct categories with each providing product to its niche
market. The internet provides "wannabe" producers with
enough know-how to produce small quantities of meth for
personal use and small scale local sales. The medium size
SLTs are easy to assemble and move, and provide a steady
supply of meth to Mexican and U.S. markets. Medium size SLTs
require little investment and can be located anywhere. These
labs are growing at a significant rate as military and police
interdiction of "super-labs" increases. "Super-labs" are
the most efficient at making a more pure product, but are
difficult to assemble and require a substantial investment in
assembly, security, and chemist expertise. All of these labs
have a significant environmental negative impact. Every one
pound of methamphetamine produces five pounds of
environmentally damaging waste as a byproduct.


Regulation Complements Interdiction


7. (SBU) As the GOM establishes a more aggressive approach
to combating the diversion of precursor chemicals,
traffickers are circumventing traditional points of entry by
importing the chemicals from nearby Central American
countries. On June 23, 2009, Guatemalan authorities seized
approximately 10 million pseudoephedrine pills, worth $33
million, destined for Mexico. This is Guatemala's biggest
pseudoephedrine seizure to date.


8. (SBU) The GOM,s actions against methamphetamine
production in Mexico have had positive results. Regulatory
laws, military operations, and law enforcement investigations
have made it difficult for methamphetamine manufacturers to
obtain the traditional ingredients and to produce the drug.
For example, in 2008, the Government of Mexico (GOM)
discontinued the legal importation of all pseudoephedrine. To
circumvent these restrictions, traffickers began smuggling
the chemicals directly into Mexico, through airports and
seaports, where airport employees and corrupt customs
officials facilitate the importation. GOM's efforts, on the
part of the GOM, impacted methamphetamine and precursor
prices in Mexico.

-- The price for a kilogram of methamphetamine has increased
from approximately $8,800 USD in 2006 to $35,000 USD in 2009.
The price of methamphetamine in Mexico has increased 875%
since President Calderon,s inception into office.
-- The price for 25 kilograms of pseudoephedrine has
increased from approximately $125,000 USD in 2006 to $250,000
USD in 2009. Some investigative reports have listed
pseudoephedrine as high as $400,000 USD during 2009. The
increase in pseudoephedrine prices coincides with the 2005
launch of Mexico's restrictive pseudoephedrine import laws.


Completing the Story


9. (SBU) The ban on importing pseudophedrine and ephedrine
resulted in the quick adaptation of the DTOs. New
unregulated precursors such as phenylacetic acid (PAA) and
ephedra are quickly becoming the foundation for
methamphetamine production. Additionally, cartels are using
legal additives such as tartaric acid to increase the purity
of their methamphetamine production. There is, therefore, no
degradation in purity using these alternate precursor
formulas. Another obstacle to winning the war on meth
production is that DTO's independently develop new formulas
for precursors. Sources indicate that La Familia imports
phenylactic acid, which is yet another precursor used for
methamphetamine production. On 12 May 2009, 8 tons of PAA
was seized at a lab in Ziracuaretiro, Michoacan. These
alternative precursors and alternative manufacturing
techniques result in purity level remaining high and prices
of methamphetamines remaining at 2005 levels.


Fleeting Success


10. (SBU) Beginning in the first quarter of 2007 and

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continuing through the end of that year, the price per pure
gram of meth rose while purity declined. Starting in the
first quarter of 2008, however, the trend reversed,
suggesting the traffickers adapted quickly despite increased
interdiction and preliminary regulation efforts by the GOM.
Currently, price per pure gram and purity are approaching
levels last documented in 2005, which was prior to U.S. or
Mexican legislation restricting methamphetamine precursors.



11. (SBU) Comment: The GOM meth-lab dismantling initiative
is a classic example of how quickly the drug producers are
able to respond to law enforcement pressure and a reminder of
the constant need to look beyond the headlines. The measure
of performance of dismantling actual super-labs is very
impressive, tripling over a two year period. The measure of
effectiveness, however, is not as impressive. The flow of
methamphetamines continues at a steady rate into the U.S.,
and prices remain relatively unchanged since 2005. These
results indicate that dismantling is only part of the
solution. A holistic and flexible approach on both sides of
the border needs to be developed in order to turn the tide.


12. (SBU) The most important next step for Mexico will be
introducing legislation that regulates alternative precursor
chemicals and establishes similar tough penalties as for the
traditional precursor chemical of meth. Simultaneously,
shutting down trafficking routes, preventing the flow of the
any chemical used to manufacture meth or intended to
manufacture meth into Mexico, shutting down money streams,
and education and prevention programs for meth users needs to
complement the dismantling campaign to have any tangible
impact on a growing problem. Not lost on the Mexican public
is the fact that voracious U.S. consumption of this most
toxic drug remains at the heart of this particularly damaging
trade. End Comment.



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