REPORT FROM ZACATECAS: PROGRESS ON INFRASTRUCTURE

1. (C) Summary. In a July 27 meeting with Consulate officers,
Zacatecas Governor Amalia Garcia Medina (PRD) discussed the
development and security challenges facing her state. She
proudly related her success in constructing highways to link
isolated Zacatecas city (the capital) to urban centers such as
Monterrey, Guadalajara and San Luis Potosi. However, she
downplayed the recent increase in organized crime activity,
commenting that bad elements had migrated to the state to escape
enforcement actions in other regions. After her term ends in
September 2010, the Governor made clear that she would like to
return to Mexico City. Our speculation is that she might seek
to run for the post of Senator from Zacatecas or help support
Mexico City Mayor Marcelo Ebrard's presidential ambitions. End
Summary.



2. (SBU) On July 27-28, Consulate officers traveled to
Zacatecas to attend a conference on migration, co-sponsored by
the Institute for the Americas, the Migration Policy Institute,
and the state of Zacatecas. (See Ref A on the conference
proceedings.) In side meetings, Conoffs met with Governor
Amalia Garcia Medina, Sergio Romo Fonseca (her Public
Relations/Tourism Secretary), and the Governor's Chief of Staff.


Steady Progress on Highway Construction



3. (C) During her chat with us in fall 2007, Governor Garcia
made clear that her priority was strengthening the highway
infrastructure between Zacatecas and other locations in order to
attract new job-creating industries. Based on our visit this
time, it looks as if she has been at least partially successful.
Roads are being built but new investment has yet to appear.
The dangerous two-lane road (one lane in each direction) between
Zacatecas City and the Coahuila border is being widened into a
modern, 4-lane highway. Garcia proudly noted that, while
Mexican federal authorities had wanted to fund only an expansion
to three lanes, she had fought for (and won) financing for the
fuller version. Meanwhile, she continued, only 11 kilometers
remained to be built in the new highway to San Luis Potosi and
the state had made improvements to the highways linking
Zacatecas to Durango and Jalisco. When the Zacatecas-Coahuila
highway expansion is complete, travel time to the U.S. border
will be cut to approximately 7 hours -- still perhaps not enough
to attract substantial numbers of maquiladora firms seeking
low-cost land and labor.



4. (C) Indeed, with the economic crisis still raging, the
Governor was hard-pressed to note any new investments in
Zacatecas other than micro-enterprises started recently by
Zacatecans returning from extended stays in the U.S. The state
government is bracing for a wave of returning migrants, which it
admits so far has not, and may never, appear. Zacatecan
migration to the U.S. began almost one hundred years ago and
many Zacatecans in the U.S. now hold either U.S. citizenship or
permanent residence. Still, should returnees begin to appear in
increasing numbers, the state has a program ready to help them
start small businesses and scholarships available to help their
children stay in school.

Budget Worries



5. (C) Both Governor Garcia and her staff expressed concern
about the state's fiscal situation, given the prospect of
diminished federal government transfer payments as a result of
the GoM's budget woes. In a separate conversation, the
Governor's private secretary told us that the state government
had resorted to creative accounting maneuvers to keep key
projects moving -- but if federal monies were not received by
the end of the fiscal year to backfill already incurred
expenditures, the state would face significant financial
problems. Garcia made clear to us that when she departed the
Governor's mansion in September 2010, she wanted to leave
matters in the best shape possible for her successor. (Comment.
This may be difficult in view of the federal government's
growing budget deficit; unlike its wealthier neighbors,
Zacatecas state does not support enough economic activity to
provide a stable source of local tax monies. End Comment.)



6. (C) The Consul General queried the Governor as to where she
might end up after her term ends. She replied that she would
likely be headed to Mexico City, possibly referring to a
potential Senate bid or a position with PRD 2012 presidential
hopeful Marcelo Ebrard. Notwithstanding infighting among PRD

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cadres in other regions, the party remains strong in Zacatecas,
having elected both Garcia and her predecessor to the
governorship.

Security Challenges



7. (C) Turning to the topic of security, Governor Garcia
declared that this was the area in which she was devoting much
of her current focus. A mere four or five years ago, capital
residents routinely left their doors open during the daytime;
now, this is no longer the case. The Governor said the state's
security cabinet met three times a week, with a joint meeting
taking place once a week with the state's military command. The
Governor stated that the state had a C-4 (command, control, and
coordination center) in operation which had limited camera
coverage of the capital, satellite cities, and key highways.
She hoped to consult with Mexico City Mayor Ebrard, who, she
implied was looking at the same issues, to see how camera
coverage might be expanded to include other locations.



8. (C) In view of the increasing number of reports of
kidnappings in the state, particularly among those receiving
remittances from U.S.-based family members, the Consul General
asked what measures the authorities were taking to stem this
tide. The Governor first denied that any kidnappings had
occurred in Zacatecas, but then qualified this by noting that a
band had operated out of the city of Villaneuva, but the police
had already apprehended its members. She said that organized
crime groups fleeing law enforcement actions in other
surrounding states were taking up residence in Zacatecas and
engaging in extortion. Sometimes victims received instructions
via cell phone to deposit money in accounts in certain
banks/stores or call certain numbers, she continued, but neither
the federal authorities nor the banks, stores, or telephone
carriers were able to provide the state with information
identifying the account holders. Either the business community
was involved in the extortion, she declared, or it was washing
its hands of any responsibility.

Comment



9. (C) On the security issue, a number of independent
observers are more pessimistic than the Governor. One
well-respected businessman, formerly resident in Zacatecas City,
told us that small and medium-sized enterprises routinely paid
protection monies to organized crime -- although visiting
Mexican and foreign tourists were generally left alone. An
Amcit told us that he feared organized crime was behind some of
the suspect Zacatecas-based migrant worker recruiters. In
February, the military confiscated large amounts of marijuana on
a property belonging to the family of the former governor. The
week after our visit, an unidentified armed convoy broke into a
local company's compound and stole a fleet of armored vehicles.
And, earlier this year, Zeta enforcers, arriving in a
helicopter, freed 53 inmates out of a state prison. Indeed,
given the number of credible reports of abductions in Zacatecas,
the Governor's denial that kidnappings were taking place is
surprising. Still, while Zacatecas faces a growing security
problem, its situation is clearly better than that of the more
conflictive states in post's consular district.
WILLIAMSON