Court Docs Raise Questions about Mexico Sinaloa Cartel Narrative

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Just as every major crime group has its myth and legend, every criminal case to take them down is built around a story. Few can claim such a well-crafted narrative infused with intrigue as the organization known as the “Sinaloa Cartel.” Its public face, Joaquin “El Chapo” Guzman Loera, enjoys an almost legendary status, fueled this year by the city of Chicago naming him Public Enemy No. 1; his immediate predecessor being Al Capone.

In recent years, the legend of the Sinaloa Cartel has intensified, with some likening the multi-billion dollar organization’s business model to a modern-day corporation. A Bloomberg report recently linked the Sinaloa group to the escalating homicide rate in Chicago, while others simply marvel at the seemingly iron grip of the “cartel” across the United States.

Many of the characterizations are derived from a trove of documents released by government prosecutors over the last two years as they outlined their narrative and criminal case against Vicente Zambada Niebla, an alleged high-ranking capo and the son of Ismael “El Mayo” Zambada Garcia, a principal member of the Sinaloa Cartel. Mexican agents detained the younger Zambada in Mexico City hours after he met with undercover Drugs Enforcement Administration (DEA) agents and he was extradited to the United States in 2010 to face conspiracy and drug trafficking charges in Chicago.

The trial got going again this week with a status hearing. Government documents submitted as part of a series of pre-trial motions offer a striking glimpse into the inner workings of the Sinaloa group, including excerpted transcripts of recorded conversations between government informants and Guzman and the younger Zambada.

InSight Crime reviewed the court documents in the Zambada Niebla case, along with related federal cases in other jurisdictions, and what emerges is a picture that raises significant questions about our popularly-held assumptions of the Sinaloa group: the composition of the organization, its relationship with US-based traffickers and the level of sophistication of the legendary group that is often described as the most powerful drug trafficking organization in the world. 

Federation, Not a Cartel

To begin with, the documents show that the Sinaloa group operates less like a cartel that dictates prices than a supplier who looks for the best and most reliable buyer. The group is described by prosecutors as the “Sinaloa Federation,” an alliance between the elder Zambada Garcia and Guzman, which at times appears to operate relatively independently. Many of the named defendants in the indictment are associated with one faction or the other but others work with both parts. 

The most telling details of the relationship between the two factions and its relationship with US-based distributors are contained in exchanges between Guzman and Zambada Garcia and alleged Chicago based traffickers-turned DEA informants Pedro and Margarito Flores.

The Flores brothers allegedly supplied the market throughout the Midwest, and as far as New York, Philadelphia, Los Angeles and Canada. They are said to have imported up to two tons of cocaine per month from the Sinaloa group. According to government documents, the brothers maintained close contact with the federation’s leadership and their associates over several years, including traveling to Mexico’s Sinaloa state for several personal meetings with both Zambada Garcia and Guzman.

The Flores brothers were first summoned to Sinaloa in May 2005 for a meeting with the pair to discuss credit, pricing and shipment. By that point, they are believed to have purchased up to 20 tons of cocaine from the men through lower-level associates. During the meetings, which went on for a few days, Zambada Garcia agreed to extend credit, and offered the same price given to other high level associates.

On the third day, the Flores brothers were transported to a mountaintop compound where Guzman allegedly asked about the terms offered by his partner and agreed to honor the same arrangement, meaning that each faction at that level negotiated its own terms. It’s unclear whether the brothers could control which faction supplied their orders; however, drug packages were evidently stamped to identify who they had come from.

In October 2008, Margarito Flores apparently returned to Sinaloa and agreed to sell heroin for both factions of the federation during a mountaintop meeting. In yet another instance of the seeming independence between the factions, the Flores brothers undertook a ruse in which they complained about the quality of Zambada Garcia-supplied heroin versus Guzman’s, in an attempt to barter for a better price.

In a conversation recorded by Pedro Flores in November 2008, Guzman says: “My friend! Oh, but I’m here at your service, you know that.” 

After an apparently brief conversation, Guzman agrees to reduce the price of a kilo of heroin by $5,000 to $50,000 after Flores assures him that at that price, the money would be ready immediately. 

The Flores brothers recorded the conversations, according to prosecutors, in order to capture the federation’s leadership discussing their methods and logistics. The recordings raise questions about the degree of overlap between the two factions, if the brothers could confidently assume that one faction would not know about the other’s product.

After Guzman agrees to lower the price, Pedro Flores tells the capo: “Okay then, I really appreciate it. It’s because…the other man (Zambada Garcia) had given me something that didn’t turn out good, and I have to even it out.”

Flores then asks for additional heroin, and after they agree on a quantity, Guzman says: “Oh that’s good. Hey has anyone else sent [heroin] to you?”

Then, referring to Zambada Garcia, adds, “Because this guy told me that they were going to send [heroin] to you.”

Flores: “Yes, but what they sent was not good. It doesn’t compare with what you had.”

Guzman: “Alright. I’ll send it then.” 

Rather than simply receive the product, the brothers seem to have had enough sway that, according to a government witness, they were kept informed of shipments as they made their way from Colombia to Mexico (one smuggling strategy involved using cargo planes to send clothes to Central and South America as part of humanitarian aid mission and loading them with drugs for the return.) It was, in other words, more of a partnership than dictatorship imposed from the supposedly all-powerful Guzman.

Mexico Violence Had Less Impact in US

The common refrain in the United States is that the violence in Mexico affects the business in the United States determining loyalties and provoking homicidal spasms that stetch across thousands of miles. And while there is certainly some truth to that assertion, the court documents also illustrate that the US market has its own, independent dynamic that can isolate it from the fights south of the border. 

The Flores brothers, for example, signed on as DEA informants after they became caught up in the rivalry between the Beltran Leyva Organization (BLO) and Sinaloa Federation that erupted in early 2008, prosecutors said. The split between the former allies resulted in a well-documented battle for loyalty from distributors.

However, government documents in both the Zambada Niebla case and a separate federal case with another distributor, Manuel Fernandez Navarro, a narcotics broker and customer for the BLO, show both distribution groups continued to work with the Sinaloa Federaion and the BLO after the war started.

For his part, Fernandez Navarro allegedly pooled cash with the Flores brothers to purchase cocaine from the Sinaloa Federation and the BLO. According to the documents, as late as November 2008, when the Flores twins had become informants, they had arranged with Fernandez to purchase 1.4 tons of cocaine from the BLO. In addition, Pedro told Fernandez about his brother’s mountaintop meeting with Guzman the month before.

These dealings raise questions about the effects of the war for loyalty among mid-level traffickers. Indeed, prosecutors included no details about the threats of violence against the Flores brothers. What is clear is that even after the war broke out, the Flores brothers, while involved with the DEA as informants, continued to purchase narcotics from both factions. What remains unclear is what type of protection they received from the DEA, if any, during the war.

Hitmen, Middlemen or Leaders?

In December 2011, Mexican Special Forces captured Felipe Cabrera Sarabia, alias “El Inge”, or “The Engineer” who Mexican officials characterized as the chief of security and “bodyguard” for Guzman, as well as being director of operations in the states of Durango, Sinaloa and parts of Chihuahua. 

However, federal prosecutors in the Zambada Niebla case described him as a coordinator of heroin and money shipments for Zambada Garcia’s faction. Missing is any reference to controlling trafficking corridors or the wide-spread violence attributed to him during the press conference in Mexico. Indeed, the Flores brothers allegedly began purchasing heroin from Cabrera as a “favor” to Zambada Garcia.

This discrepancy in public profile raises questions about the true function of seemingly high-level operatives captured by Mexican authorities. It may be that US prosecutors opted not to include a full account of Cabrera’s criminal activities, or it could mean that the criminal organization is less sophisticated than commonly believed, if a plaza boss needs help unloading his product.

A Less Elaborate Hierarchy

A separate incident suggests that high-level capos are involved in seemingly minute details, with German Olivares, another named defendant, allegedly banning the use of small bills (anything less than $20) as payment for drug shipments. The rule evidently set off a dispute after the Flores brothers complained that small bills were necessary for transporting the money quickly to Mexico, in the absence of enough time to launder the money into larger bills.

Olivares was said to coordinate the Juarez corridor for the Sinaloa Federation and occupy an upper rung of the leadership. Yet, despite that status, he concerned himself with the size of bills, suggesting he either had a lesser role or that even high-level operatives were involved in day-to day-details. One conversation about the ban even involved Zambada Garcia.

More Wholesale than Distribution

Overall, the portrait painted by the government-supplied documents involves a drastically different image to the behemoth organization operating in “1,000 cities across the U.S.” as cited in a 2011 report by the now defunct National Drug Intelligence Center.

The conclusion reached in that report was seriously questioned in August after the Washington Post reported that local police officials in more than a dozen cities had no knowledge of the cartel-related activity in their communities supposedly documented by the federal government.

The report reached its conclusion, in part, after broadening its definition to include traffickers who purchased drugs from cartel associates, which would include the Flores brothers. But the extent of the Sinaloa federation’s control of the brothers remains to be seen.

If Zambada Niebla’s case goes to trial, it will likely yield more details about the workings of informants and drug trafficking operations. However, as in the post-9/11 “terrorism” cases of a decade ago, there will likely be a large gap between the tantalizing details presented to the press and public and the evidence that is eventually offered in court.

As of now, Zambada Niebla’s lawyers have successfully severed his case from the other defendants, and he will be tried alongside the Flores brothers. The trial date for the others is Jan 21, 2014; no trial date for Zambada Niebla has been set. 

Michelle Garcia is a writer, radio and video journalist currently traveling the US-Mexico border working on a book and a documentary. Her work has appeared in The Washington Post, Salon, Time and others.

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