In Sinaloa, cartel operators hide in plain sight

CULIACAN, Mexico – The fruits of drug trafficking are on open display in this western state capital: Cartel members honor their dead with gaudy mausoleums at the main cemetery, black-market moneychangers work in the open, and store shelves are stuffed with products from businesses identified by the U.S. Treasury Department as being fronts for organized crime.

The state of Sinaloa, which shares a name with Mexico's most powerful drug cartel, is known as the cradle of drug trafficking in this country, a designation that makes some ask why it has not been the focus of President Felipe Calderon's 4-year-old nationwide war on the cartels.

Only a few hundred federal police can be found here, while thousands have been sent to other cartel strongholds, namely the neighboring state of Chihuahua and Calderon's western home state of Michoacan.

For some, the lack of attention to Sinaloa undermines the credibility of Calderon's strategy, especially after Sinaloa's new governor, whose election was backed by Calderon's party, hired a former state police chief as a top adviser to the force even though he had once been indicted on charges of having ties to the cartel.

The governor, Mario Lopez Valdez, has taken several steps against corruption and the drug traffickers' mystique, but the choice of adviser, by a man who promised change and painted his opponent as the traffickers' friend, came as a shock.

"THE INSULT," a banner headline in the weekly Sinaloa newspaper Rio Doce said.

"It is obvious that in Sinaloa there is a pact," said Congressman Manuel Clouthier of Sinaloa. Clouthier belongs to Calderon's National Action Party, or PAN, but has angered the government with insinuations that authorities in his state are collaborating with drug traffickers while the federal government looks the other way.

"It has been a safe state for organized crime to live there and work there and develop with total tranquility," he charges.

The Calderon government did not respond to requests for comment. In the past, it has vehemently denied neglecting Sinaloa or having any pact with the cartel.

As proof the government is pursuing all traffickers equally, officials point to the capture or death of several top Sinaloa cartel gangsters.

"We are making an effort to cover as much territory as we can," Interior Minister Jose Francisco Blake Mora said after a recent meeting with the new governor.

Blake Mora said the federal and state government would consider federal reinforcements in key regions of Sinaloa. But he emphasized the state must first clean up its own security forces under a new federal initiative to help state governments pay for background checks.

Government security officials and experts have also argued that it is natural to focus their efforts on the most violent gangs. While homicides nearly doubled in Sinaloa last year to 2,251 in turf wars with the rival Zetas gang, the state has had fewer of the headline-grabbing massacres and mass beheadings committed in some other states.

"It could be that the strategy has been to focus on the weaker cartels and get rid of them first," said Eric Olson, a senior associate at the Washington-based Wilson Center's Mexico Institute. "I think it's clear that their strategy has been to focus on the most violent."

But the failure to eliminate Sinaloa as a haven for traffickers also highlights some weaknesses of Calderon's strategy: While top capos have been arrested, the president has been less successful in going after money laundering or investigating the corrupt officials that protect cartels.

In a place like Sinaloa, "part of it is the perception that legal activity and illegal activity has become so blurred. There is pressure from the legitimate economic interests who don't want their economic interests to be touched," Olson said. "There is a broad sense that there is a lot of money laundering and visible activity related to drug trafficking that has not been fully addressed or combated."

The power of the cartel permeates Sinaloa.

Leaders Joaquin "El Chapo" Guzman and Ismael "El Mayo" Zambada, both wanted by Mexico and the U.S., are thought to be hiding out in the mountains of Sinaloa or the neighboring state of Durango, protected by corrupt officials and loyal locals who live off the drug trade.

In 2007, the U.S. Treasury Department banned Americans from doing business with several Sinaloa-based companies it said were fronts for Zambada, including the prominent Santa Monica cattle and dairy firm. But the so-called Kingpin Act, which prohibits U.S. companies from doing business with known drug traffickers, has not prompted any efforts by Mexico to shut them down. Supermarkets are stacked with Santa Monica milk bottles.

The main cemetery in Culiacan resembles a miniature village of ornate homes. Rows of mausoleums boast balconies, spiraling staircases and photographs of young men who died in their 20s and 30s, sometimes accompanied by replicas of guns and pictures of their favorite cars.

Outside a shopping mall, a large stone cross cradled in well-pruned red plants has been put up in the parking lot where a son of cartel boss "El Chapo" was shot in 2008. One afternoon, a full bottle of beer was left open beside the memorial, a traditional way of remembering the drug-war dead.

Such small monuments to slain young men have become the latest trend, dotting the wealthiest neighborhoods of Culiacan, where neighbors can pinpoint the homes of traffickers by the way they're decorated, the types of cars in the driveway and presence of bodyguards.

Stores in the city of nearly 860,000, meanwhile, are stacked with the latest narco-fashion: baseball hats decorated with skulls and marijuana leaves and knockoff Ralph Lauren Polo shirts made popular by suspected kingpin Edgar "La Barbie" Valdez Villarreal, who was wearing one when he was arrested last year.

One street, known as the "little market," is lined with informal currency changers who sit beneath umbrellas and openly trade huge sums of dollars with men who emerge from darkened sports utility vehicles with wads of pesos. Local police driving by do nothing.

"If you stop at those umbrellas, they talk about unlimited amounts of money. They sell it to the best bidder. They don't give you a receipt," said German Castro, a Culiacan resident who is the president of the National Association of Currency Exchange Centers.

Castro, however, said he was optimistic about a new federal law that imposes prison time for currency changers who don't register with the government. Before, the penalty was only fines, he said.

Last year's 2,251 homicides made Sinaloa the second-deadliest Mexican state. About half the killings were in Culiacan, where Mayor Hector Cuen needs 500 extra municipal police, but says fear hinders recruitment and many candidates fail lie-detector tests because they can't truthfully say they don't know a trafficker.

Aguilar, Lopez's controversial hire as police adviser, was forced to resign as state police chief in 2004 and disappeared with a state bounty on his head. But in 2009, a federal appeals court dropped the charges and earlier this year, he approached Lopez about a job.

"A person is innocent until proven guilty and I cannot refute what a court had decided," Sinaloa Public Safety Secretary Francisco Cordova said in an interview with The Associated Press. Aguilar "is an adviser who knows police issues. He is qualified for the position of adviser and that is the only thing I can say."

Still, Lopez's election as governor was a stunning defeat for the Institutional Revolutionary Party, known as the PRI, which had ruled the state — and the country — for decades, and he has moved quickly to present a new-broom image.

He and his Cabinet members have released their personal financial disclosure reports, and this month Lopez enacted a law to rescind liquor licenses of businesses that play songs glorifying drug gangs, known as "narco-corridos."

One of his biggest projects so far is the creation of an elite state police force that his government hopes will reach 850 officers by the end of the year.

The first unit of 140 officers has been formed after passing background checks and an eight-week course at a federal police academy on investigative techniques and operational tactics, Cordova said.

The so-called Elite Group has been deployed to hotspots around Sinaloa, dismantling neighborhood gangs in the port city of Mazatlan and making significant arrests, Cordova said.

It also has faced revenge attacks. Last week, gunmen traveling in seven cars ambushed Elite Group police leaving their base in the city of Los Mochis, killing one officer and wounding two.

Shortly after the ambush, unsigned banners were hung from bridges in Los Mochis and Culiacan, accusing the Elite Group of being allied with "El Chapo." The Elite Group later arrested a man and accused him of putting up the banners to discredit the new force.