Cablegate: Chemical City: Guadalajara, Jalisco, and the Meth Trade

VZCZCXRO3690
RR RUEHCD RUEHHO RUEHMC RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHGD #0612/01 3581547
ZNR UUUUU ZZH
R 231547Z DEC 08
FM AMCONSUL GUADALAJARA
TO RUEHC/SECSTATE WASHDC 1159
INFO RUEHME/AMEMBASSY MEXICO 2343
RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
RHMFIUU/DEPT OF JUSTICE WASHINGTON DC
RUEABND/DEA HQ WASHDC
RUEHGD/AMCONSUL GUADALAJARA 5215

UNCLAS SECTION 01 OF 03 GUADALAJARA 000612

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: SNAR PREL EIND KJUS MX
SUBJECT: CHEMICAL CITY: GUADALAJARA, JALISCO, AND THE METH TRADE

REF: A) Guadalajara 236; B) Mexico 3072

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1. (SBU) Summary: According to 2007 DEA estimates, 80 percent
of the methamphetamine used in the United States originates from
laboratories operated by Mexican-based syndicates on both sides
of the border. Production is especially high in and around the
city of Guadalajara due to the confluence of geography,
availability of materials, adequate infrastructure, and
scientific expertise. Recent success by Mexican authorities in
raiding large labs and seizing shipments of pseudoephedrine has
caused the syndicates to modify some of their methods. There
has been a shift towards a decentralized model involving many
smaller labs, as well as a move toward meth production using
other precursor chemicals. Ending Guadalajara's status as
Mexico's drug chemical capital will require a sustained
long-term effort. End Summary.

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Comparative Advantages
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2. (U) Jalisco is a major hub of methamphetamine production in
Mexico due to the confluence of four key characteristics:
geography, availability of materials, adequate infrastructure,
and brain power. All four factors come together in and near the
city of Guadalajara.

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Geography
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3. (U) Jalisco's geography is important for two main reasons.
First, the state border is only 120km away from the major
Pacific port of Manzanillo in the state of Colima. The large
volume of containers passing through the port makes intensive
screening difficult for the authorities and creates a higher
success rate for illicit shipments of pseudoephedrine and other
chemicals. Second, Jalisco has large swaths of isolated rural
land where drug syndicates can set up labs and act with relative
impunity. The sprawling Guadalajara metro area also offers many
possibilities for concealing a lab in warehouses or older
industrial buildings. Getting the smuggled chemicals from the
port to lab locations is made easier because Colima and Jalisco
are connected by a major highway. Guadalajara International
Airport has Mexico's second busiest air cargo terminal and has
also been used for drug and precursor chemical smuggling. Most
recently, an illegal shipment of 1.5 tons of pseudoephedrine
tablets was seized by authorities at the airport on October 4.
A lack of resources and modern equipment makes thorough Customs
screening of air cargo shipments a real challenge.

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Availability of Materials
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4. (SBU) Besides psuedoephedrine, there are a number of other
important materials and chemicals vital in the production of
methamphetamine. These materials are readily available in
Guadalajara, the capital cityQf Jalisco, and are used for
legitimate purposes involving other industrial chemical
products. The city has a thriving pharmaceutical industry with
companies such as Farmacias Guadalajara (FRAGUA) growing rapidly
and expanding their retail presence nationwide. However,
because the acquisition of many pharmaceutical ingredients is
still relatively unregulated, drug trafficking organizations can
take advantage of the legitimate market and divert chemicals for
illicit purposes.

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The Devil Wears a Lab Coat
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5. (SBU) One of the most notorious exaQles of illegal
chemical diversions concerns Farmaceuticos Collins (Collins
Pharmaceuticals) - a drug maker and distributor based in the
Guadalajara suburb of Zapopan. This company has a sleek, modern
headquarters, 400 employees, and socially prominent owners. The
dark side of Collins was revealed on October 2, 2008 when the
Office of Foreign Assets Control (OFAC) formally cited the
company, several affiliated enterprises, and their directors
under the 1999 Foreign Narcotics Kingpin Designation Act for
diverting substantial quantities of methamphetamine precursors
to the Amezcua Contreras drug trafficking organization. The
announcement sent shock waves through the local business
community, and underlined for the public the fact that seemingly
"respectable" businesses could be closely allied with the drug
cartels.

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Brain Power - It's No Job for Plain Thugs

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6. (SBU) The production of methamphetamine through chemical
reactions using toxic substances requires workers with knowledge
of chemistry and industrial processes. The usual cartel
enforcers with gold chains and Kalashnikovs are not up to the
task, but Guadalajara has a wealth of young chemists and
engineers that can be recruited by drug syndicates to staff
methamphetamine labs. The public university system overproduces
these types of professionals into a flat job market where they
can expect to make only $1000-$1500 USD/month starting salary,
if they can get a job at all. It's therefore no surprise that
the drug cartels can easily enlist such professionals by paying
them much more than legitimate companies. Nor are all the
chemists Mexican; in 2006 a former American chemistry professor
was arrested for running a meth lab only six blocks from the
Consulate!

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Safety Last
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7. (SBU) While professional chemists may be hired to set up
the labs, day-to-day operations are usually handled by less
skilled individuals known as "cooks," because they are told to
follow the "recipe" written by the chemist. Their lack of
expertise results in a poor safety record. Many of the largest
lab discoveries in recent years have resulted not from police
intelligence work, but from fires and explosions in the
aftermath of industrial accidents. Frequently, the local fire
department is the first public entity to become aware of the
presence of a meth lab in a neighborhood. Emissions control is
often lax; and some labs have been discovered after worried
neighbors reported suspicious chemical odors to the police or
fire departments. In a city that suffered hundreds of
casualties in 1992 after gasoline leaked into the municipal
sewer system and exploded, the local population is perhaps more
sensitive to unexplained chemical smells than are inhabitants of
other cities.

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Meth Producers Adapt
----------------------------

8. (SBU) In the past year there have been numerous Mexican law
enforcement success stories involving seizures of
pseudoephedrine at ports as well as raids of large labs leading
to the confiscation of huge amounts of money and product. This
fact, combined with the Mexican government's increased
regulation of legitimate sources of pseudoephedrine has forced
meth producers to adapt their methods. At the present time, the
GOM is not issuing new permits for the importation of ephedrine
and pseudoephedrine except in small amounts for medical
research. These new measures, combined with actions against
suspect pharmaceutical companies like Collins have forced the
traffickers to switch from the diversion of legitimate
pseudoephedrine shipments to smuggling the chemicals illegally
into Mexico - a riskier proposition.

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Smaller is Better
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9. (SBU) Although it is true that a large methamphetamine lab
will be able to produce more finished product and therefore more
profit, it is also true that if such a lab goes out of business
it takes out a large chunk of the syndicate's profit margin. In
the current atmosphere of increased vigilance by the
authorities, the cartels have begun shifting to a decentralized
network of smaller labs for production, according to law
enforcement sources. Although profits won't be as high due to
increased overhead costs, there is also less chance of
devastating financial risk caused by shutting down a major lab.

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A "Pseudo Problem"
-----------------------------

10. (SBU) Tighter regulation of pseudoephedrine by Mexican
authorities as well as increased seizures of large smuggled
international shipments has created a major problem for the drug
syndicates: they don't have enough of the main ingredient in
methamphetamine to meet demand. So instead of producing
methamphetamine by reducing psuedoephedrine in a chemical
process, they appear to be moving towards an alternative method
known as the "Dirty method" or "P2P method", which was used by
California biker gangs in the 1970s and 80s. This involves
production through the reduction of phenylacetone and
methylamine, which are more readily available in Mexico. This

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method of production is not ideal because it involves a more
complex chemical reaction which is more difficult to control,
the resulting product is not as potent, it produces less
finished product per batch, and the process is more odorous and
therefore more difficult to conceal. It does, however, allow
the meth-makers to cope with reduced supplies of
pseudoephedrine.

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Comment: A Long-Term Struggle with an Insidious Industry
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11. (SBU) While Guadalajara's prominent position in the
methamphetamine trade is unlikely to change soon, recent efforts
by Mexican authorities have clearly complicated the way the drug
syndicates have traditionally operated. This is especially true
in regard to the regulation of certain precursor chemicals.
OFAC's actions against Collins Pharmaceuticals also sent a clear
signal that prominent and seemingly respectable businesses
allied with the traffickers were not outside the reach of the
law. Post has extensively publicized the OFAC designations and
was gratified to note that few voices were raised in defense of
the embattled company. We continue to work with state and local
police forces to enhance their professionalism and capability to
detect meth labs and shipments of illegal precursor chemicals.
The Merida Initiative will permit an increase in these efforts,
as well as improved equipment and training for Mexican Customs
to exercise a more rigorous control over local seaports and air
cargo terminals.
RAMOTOWSKI

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