Steady remittances from the U.S. and nearshoring have been highlighted as some of the reasons for the currency's appreciation against the U.S. dollar. (Stock image)
In a continuation of the currency’s strong performance this year, the Mexican peso appreciated on Friday to its highest level against the U.S. dollar in almost five years.
The value of one greenback dipped to 18.33 pesos on international markets, according to data from Bloomberg.
The peso hadn’t been so strong since April 19, 2018, when the exchange rate reached 18.06 pesos to one U.S. dollar.
The newspaper El Universal reported that the peso had appreciated 1.69% against the greenback this week and 5.87% since the beginning of 2023.
It cited higher inflows of money from export revenue, remittances and foreign investment as a factor in the strengthening of the peso.
Janneth Quiroz, chief economist with the Monex financial group, said on Twitter on Friday that the Mexican peso had benefited from “improved projections” from the national statistics agency INEGI vis a vis the Mexican economy.
The Bank of México set a record high benchmark rate of 11% earlier this month. (File photo)
Luis Miguel Altamirano, a financial advisor and educator, said on the same social media site that “the main factor that is driving the appreciation of the peso with respect to the dollar is the difference in interest rates between the Bank of México and the Fed in the United States.”
The Bank of México’s benchmark rate is currently set at a record high of 11% as it attempts to combat high inflation, while the Federal Reserve’s official rate is 4.5% to 4.75%.
“Is such a cheap dollar good for the [Mexican] economy?” Altamirano asked in another Twitter post.
“Maybe at the moment yes as Mexico had a trade deficit of US $27 billion at the end of 2022 (it imports more than it exports), and this exchange rate benefits imports as they are cheaper,” he wrote.
“However, there is also the flip side, where credit in Mexico becomes expensive (practically impossible to get a loan [with an interest rate] below 11%), and the revenue from tourism, exports, remittances and foreign direct investment is affected.”
President López Obrador considers the strength of the peso an achievement of his government, claiming that sound economic management has allowed the currency to prosper, although it suffered a sharp drop in value at the beginning of the coronavirus pandemic.
However, academic and columnist Sergio Negrete Cárdenas wrote in the El Financiero newspaper last month that the president was wrong to take claim for the so-called super peso.
The central bank’s monetary policy, rather than the government’s economic policies, is the main reason behind the strength of the peso, he wrote.
“The central bank is autonomous and its decisions are taken without consulting the president,” Negrete said. “AMLO can’t take credit for them. On the contrary, he has criticized the Bank of México several times for increasing the [key interest] rate so much.”
Baja California Governor Marina del Pilar Ávila, a representative of Mexico’s ruling Morena party, expressed a different view on Friday, writing on Twitter that “the Mexican super peso is continuing to gain strength” and that “the economic policy of the federal government is yielding excellent results for the benefit of all.”
Annual government fertilizer distribution to farmers in Santiago Miahuatlan, Puebla. Virtually all fertilizer in Mexico is imported and thus a big expense for farms. The Durango plant is supposed to change that. (Photo: Government of Santiago Miahuatlan)
A Dutch company is investing US $1.5 billion to build a fertilizer plant in Durango that is expected to drastically reduce Mexico’s reliance on foreign imports.
Durango Governor Esteban Villegas Villareal and federal Interior Minister Adán Augusto López announced the investment by fertilizer producer Tarafert earlier this month. The plant, which will be capable of producing approximately 1 million metric tonnes per year of the substance, is slated to begin operations in 2026.
Durango Governor Esteban Villegas and Interior Minister Adan Augusto López at an event in Durango announcing the fertilizer plant. (Photo: Government of Durango)
The ammonia and urea plant will be built in the municipality of Lerdo and could produce enough fertilizer to cover 50% of Mexico’s demand for the substance, Tarafert says on its website.
At a business event in Durango on Thursday, Villegas highlighted that there are currently no fertilizer manufacturers in Mexico and that the cost of the imported product has increased significantly due to the Russia-Ukraine war.
Announcing the investment on Feb. 1, Villegas thanked Tarafert “for showing confidence in this government and Durango.”
“I cannot thank the government of Andrés Manuel López Obrador enough for its invaluable support,” he added.
Lerdo Mayor Homero Martínez Cabrera, left, said at an event announcing the plant in Durango that he’s excited that the plant will bring good-paying jobs to town. (Photo: Government of Durango)
Thomas Berkvens, director of project development for Tarafert, expressed the company’s “excitement” at having the support of federal and state authorities, according to a Durango government statement.
Villegas said Thursday that construction of the plant will generate 3,000 jobs and that the facility will employ 400–500 people in “very well paid” jobs once it begins operations.
The municipal government of Lerdo will sell treated wastewater to the plant, meaning that it won’t deplete drinking water supplies, according to Gov. Villegas.
Jesús Castrillón Jiménez, Lerdo’s director of economic development, said earlier this month that Tarafert’s plant complies with environmental requirements and posed no threat to the Nazas River, which runs through Durango and Coahuila.
The $1.5 billion investment is a new record for the municipality, located in the Comarca Lagunera region of Durango and Coahuila.
“Tarafert will be the anchor company that will bring five other supply companies [to Lerdo]. They will be the base of the first industrial park … in this municipality, thanks to the intervention of the Caxxor group, which has dedicated itself to the design and construction of the park,” Castrillón said.
He said that one factor that convinced Tarafert to build its plant in Lerdo is the municipality’s proximity to railroad tracks and highways, including the Gómez Palacio-Durango City freeway. Another is the proximity of the El Encino-La Laguna gas pipeline.
At Thursday’s “Invest in La Laguna” business event, Villegas said that several other companies are close to announcing nearshoring investments in Durango.
High productivity and the availability of industrial space and specialized labor are among the reasons why the Comarca Lagunera region is an attractive place to invest, the site says.
Blancarte was a winner in CryptoArt for Impact and Innovation at Bitbasel (@Guilleblancarte Twitter)
Guille Blancarte, an artist from Mazatlán, Sinaloa, has been selected along with over 200 other artists to send her artwork “I Wonder” to the moon.
Blancarte, one of the winners of the CryptoArt for Impact and Innovation at Bitbasel – a platform that helps creators launch their first NFT collection – will be included in the Lunaprise Moon Museum.
The museum will be a payload aboard Intuitive Machine’s Nova-C Lunar Lander, which is scheduled to launch from Cape Canaveral, Florida via a SpaceX Falcon 9 Rocket in early to mid 2023, according to NASA.
The mission, called IM-1, is NASA’s first return to the lunar surface since 1972.
The museum’s collection is etched onto indestructible nano fiche disks made from pure nickel, an element that can survive the harsh conditions of outer space. The museum will have information about humanity including music by Grammy winners, famous speeches, collectibles from sports stars, works of art from the most famous artists in history, film scripts, NFT collections and more.
The information will be readable on the Lunaprise disk via a microscope, and a replica of the disk will be on display at the Smithsonian Museum in Washington DC.
Promotional image for Lunaprise Moon Museum (BitBasel)
Blancarte’s work of art is an homage to sunsets in her hometown of Mazatlán. According to the artist, it “represents duality, cycles, beginnings and endings, sunrise and sunset.”
She added that her artwork tries to “raise awareness of the profound danger we face if we do not do something now to restore the balance of the ocean,” as she hopes that future generations can enjoy “the sea in all its splendor.”
A series of events are being planned around the IM-1 SpaceX launch, including a post-launch celebration at Kennedy Space Center in Cape Canaveral, Florida.
Security Minister Rosa Icela Rodríguez and Interior Minister Adán Augusto López preside over a meeting with governors in Tuxtla Gutiérrez, Chiapas, to formally grant federal security funding to states for 2023. (Rosa Icela Rodríguez/Twitter)
The federal government has set aside almost 9 billion pesos to fund security spending by Mexico’s 32 federal entities in 2023.
At a meeting with state governors in Tuxtla Gutiérrez, Chiapas, on Wednesday, Security Minister Rosa Icela Rodríguez said the government will allocate just under 8.8 billion pesos (US $475 million) from the public security fund known as FASP.
The total funding is 10% higher than last year, Rodríguez said at a meeting in Monterrey last week with 10 governors of northern states. The FASP money is allocated to states to address security issues in areas with high levels of crime.
Of the 21 states for which funding has been announced, Jalisco will receive the largest allotment. The western state will get just under 344 million pesos (US $18.5 million) in 2023.
The other states with allotments above 300 million pesos are Chihuahua, Nuevo León, Veracruz and Guanajuato, which has been Mexico’s most violent state in recent years in terms of homicide numbers.
Funding for 11 entities, including Mexico City, México state, Puebla and Querétaro has not yet been announced.
President López Obrador’s “hugs not bullets” strategy promotes investment in social welfare programs as a way to both reduce crime and boost the economy. (Photo: Presidencia)
At the meeting with northern state governors, Rodríguez stressed that security work is a shared responsibility of the three levels of government.
On Wednesday, she said that the federal government has made it a priority to address the root causes of violence. The government’s so-called “hugs, not bullets” security strategy aims to prevent crime via the delivery of social programs that provide work and study opportunities to Mexicans, particularly young people.
“At the same time,” Rodríguez said, “we use intelligence and operational planning to strike decisive blows against [organized] crime.”
One recent example of that work is the arrest in January of Ovidio “El Ratón” Guzmán, son of incarcerated Joaquín “El Chapo” Guzmán, and leader of the “Los Chapitos” faction of the Sinaloa Cartel.
Interior Minister Adán Augusto López declared Wednesday that the battle against organized crime is being won. The incidence of crimes such as kidnappings, home burglaries and vehicle theft has declined significantly, he said at the Tuxtla Gutiérrez meeting.
López noted that homicide numbers have also declined but conceded they haven’t gone down as much as the government would like. There were 30,968 homicides in 2022, according to data presented by Rodríguez last month, a 7.1% decline compared to the previous year.
Ana Trillo uses fine human hair in the brush she uses to paint her pots. (Photos by Joseph Sorrentino)
Mata Ortiz may be a tiny village in northwestern Chihuahua, but it’s world-famous for its pottery, featuring intricate designs that are inspired by pre-Hispanic symbols or art from the ruins at the ancient city of Paquimé.
The civilization at Paquimé — which bears both Mesoamerican and Southwestern traits, flourished in the area from around A.D. 700 until the mid-1400s. The Spanish renamed Paquimé Casas Grandes, or “big houses,” because the structures there stood several stories high. You can still visit the ancient city site just outside Mata Ortiz.
Mata Ortiz potter Pilo Mora pressing his clay “tortilla” into the bowl. Many potters won’t share where they get their best clay from in town.
Modern residents of Mata Ortiz often found (and still find) ancient pottery shards. But the techniques used to make this beautiful, intricately painted pottery were lost for over 500 years until one resident named Juan Quezada painstakingly worked to rediscover the lost art.
As a boy, Quezada was intrigued by the shards he’d find in the hills near his hometown. One day, more than 60 years ago, he came across an undisturbed, likely pre-Hispanic burial cave and found three intact pots. So taken was he by their beauty that he vowed to learn how to make them.
It took him 16 years of trial and error before he finally succeeded in making a pot he found satisfactory.
At first, Quezada either traded his pots for goods or sold them for a few dollars. Some of his pots made their way to the United States, where they were discovered by Spencer MacCallum, who had purchased a 14th-century pot from Paquimé he’d found at a yard sale in the early 1970s.
Mata Ortiz pottery exists today because of one man, Juan Quezada, who became fascinated by the ancient remains of pottery from the Paquimé ruins near his village and decided to recreate it.
Several years later, when he saw Quezada’s pots in a store in New Mexico, he knew they had their roots in the ancient culture from Paquimé. But when he asked where the pots were from, he was told simply, “Mexico.”
He took photographs of the pots with him to Mexico and somehow found Quezada after searching for only two days. He bought some of Quezada’s pots and soon afterward, the quality of the pots improved and began selling for significantly more money. Many of Quezada’s pots are now in collections in Mexican and U.S. museums.
Quezada taught relatives and neighbors how to make the pots and his basic techniques are still used today, although each potter has tweaked the process a bit. As a result, the town has several potters making these beautiful pots.
An unusual feature of Mata Ortiz’s pottery is that its artisans don’t use a potter’s wheel. Instead, pots are made by first flattening a piece of clay into what they call a “tortilla,” and then pressed into a bowl.
Luís López Corona firing his pots.
From there, there are two options: in the single-coil method, additional clay is rolled out into a coil, which is then connected to the tortilla. The coil is then pinched, drawing the clay upward to make the pot’s walls.
Once the walls are made, the outside of the pot is smoothed with a hacksaw blade.
Once formed, the pots are allowed to dry for about three days. “After that, I sand them,” said artisan Monico Corona. They are then polished with a small stone and after that, it’s time to add the designs.
Artisan Ana Trillo sits at her kitchen table, preparing to paint a pot.
“It took me two to three years to make pots that were good enough to sell,” she said. “A friend taught me how to make [them].”
Trillo uses a small brush made from human hair, sometimes her own, sometimes a relative’s. “My nephew has finer hair,” she said, adding that some people prefer using cat hair.
“Many designs are from Paquimé. Others, we invented. Some are ones we copied.”
Before painting the pots, Trillo marks the quadrants with light lines of a pen or pencil. But she doesn’t draw any figures first; it’s all painted freehand, a task requiring intense concentration. But conversation and jokes help lighten the work.
And when it was time to prepare a meal, Trillo simply cleared the kitchen table and used it. Once the meal was over, she cleared the plates and returned to painting her pot.
When the painting is done, pots are often placed in an ordinary kitchen oven for preheating before they’re fired. At this stage, there are two options for the fuel: cow chips are the traditional fuel, but artisan Luís López Corona uses bark from the Alamo tree. He said the bark burns very hot.
To fire his pots, López places them on a small grill, covers them with a metal tub and then piles on the bark. He liberally applies lighter fluid and lights the bark, releasing a sweet smell, and plenty of smoke and heat. He checks on the progress by using a mirror to shine some light through a small hole. When he determines the pots are ready, he removes them with a long pair of tongs and sets them aside to cool.
Mata Ortiz pottery may be black, white or red, the color determined by the clay used and the firing. Each potter has their favorite clays and will often keep its location a closely guarded secret.
The ancient site of Paquimé near Mata Ortiz, Chihuahua, that inspired Juan Quezada to recreate the pre-Hispanic city’s pottery style.
Mata Ortiz pots are now available online but it’s definitely worth a trip to the village to make a purchase. There are several galleries in the pueblo but many homes have signs out front announcing that a potter lives there.
It’s possible to just knock on a door and view the pottery for sale and potters are always happy to share information. Although pots from master potters fetch several thousand dollars, it’s still possible to buy beautiful pieces from lesser-known potters for a reasonable price.
Another reason to visit Mata Ortiz is the Paquimé site, in nearby Casas Grandes. Although none of the extant structures are several stories high — as they were when they were built — it’s still a fascinating site.
Sadly, MacCallum died in December, 2020 and Quezada two years later, but their legacy lives on in tiny Mata Ortiz.
Dig coordinator Maria de Lourdes López Camacho said that the burial corresponds to a cemetery of the early Spanish viceroyalty (A.D. 1521–1620) and shows the transition from pre-Hispanic funeral customs to Catholic ones. (INAH)
Archaeologists have found a cemetery in Mexico City’s Chapultepec Park that dates from less than 100 years after the Spanish conquest of Tenochtitlán.
The cemetery was discovered in an archaeological rescue process during building work on the Chapultepec gardens and scenic pavilion. After an initial sounding pit revealed evidence of human remains, a full dig was organized to excavate the burial ground.
TheNational Institute of Archaeology and History (INAH) said that 21 skeletons were found in the cemetery, including two infants. The bodies had been buried at three different times, all after Tenochtitlán’s fall in 1535.
Some were buried in the Catholic style and others according to Mesoamerican traditions, the researchers said.
“We propose that this collective burial corresponds to a cemetery of the early viceroyalty (A.D. 1521–1620) because it shows the transition from pre-Hispanic funeral customs to those implemented with the arrival of the Spaniards and their religious system,” said dig coordinator, María de Lourdes López Camacho.
She explained that most of the skeletons were found facing east, likely alluding to the Christian belief in resurrection. But two were buried in a bent and lateral position, as in Mesoamerican rituals, and another two were found carrying obsidian objects of pre-Hispanic origin.
This led the archaeologists to believe that some of the dead were European and others Mexica. Tests revealed they had suffered from various conditions, including malnutrition, infection and inflammation in the bones.
This is not the first time that human remains of this period have been found in Chapultepec Park. In 2005, archaeologist María Guadalupe Espinosa Rodríguez excavated a 16th-century burial ground near the Garden of the Lions — an area previously occupied by the church of the indigenous village of San Miguel Chapultepec.
Excavations are continuing to the south and east of the newly discovered site.
The laboratory had the greatest synthetic drug production capacity ever found in Mexico, Sedena officials said. (Cuartoscuro)
The Mexican army has dismantled one of the largest synthetic drug laboratories yet seen in the country in the municipality of Culiacán, Sinaloa.
The operation took place on Feb. 14 near the village of Pueblos Unidos. Soldiers found a building used as a fentanyl pill production center, where they seized nearly 630,000 fentanyl pills, 128 kilograms of loose fentanyl and 100 kilograms of methamphetamine.
On the premises, authorities found 630,000 fentanyl pills, 128 kg of loose fentanyl and 100 kilograms of methamphetamine. (Photo: Sedena)
They also found a laboratory on a nearby plot of land, which contained more than a metric ton of precursor chemicals and 28 organic synthesis reactors used to produce the drugs.
A statement by the Defense Ministry (Sedena) said: “Due to the number of reactors, the laboratory has the greatest synthetic drug production capacity that has been recorded historically and during the present administration.”
In a security meeting on Wednesday, President López Obrador showed two videos of the facilities and said their destruction would have cost their criminal owners more than 12 billion pesos (US $665 million).
“If necessary, I’m going to be talking about this daily,” he said. “This [drug] is the most harmful, destructive thing there can be, this completely alters any organism.”
As deaths pile up from the opioid crisis in the United States, AMLO is facing greater pressure from the U.S. government to tackle fentanyl production in Mexico. (Photo: Government of Mexico)
AMLO is under growing pressure from the United States to tackle the fentanyl trade. The U.S. counted more than 108,000 opioid deaths during 2021, the last year on record. This was largely due to the rise of the highly potent heroin substitute fentanyl, which is mostly produced in Mexico.
“We believe Mexico needs to do more to stop the damage this is causing,” Anne Milgram, head of the U.S. Drug Enforcement Administration (DEA) told the U.S. Senate on Wednesday.
She said Mexico’s two largest criminal organizations – the Sinaloa Cartel and the Jalisco New Generation cartel (CJNG) – dominate the fentanyl trade. They import precursor chemicals from China and set up clandestine laboratories to produce the drug, which is often sold in the U.S. in the form of fake prescription pills such as OxyContin or Percocet.
Milgram criticized Mexico for the rapid growth of this trade, arguing that Mexican authorities must do more to share information with their U.S. counterparts, dismantle drug labs and extradite accused drug traffickers to the U.S.
According to a 2020 U.S. Drug Enforcement Administration report, Mexico’s role in the fentanyl trade is mainly manufacturing the drug with precursors that are shipped via mail services from Asia. (Illustration: DEA)
Several Republican and Democratic senators agreed with Milgram, although Todd Robinson, undersecretary of the Bureau of International Narcotics and Law Enforcement Affairs, was more restrained.
“I would say that in the conversations we have had, Mexico is willing to do more,” he said.
AMLO was elected on a promise of a “hugs, not bullets,” policy toward crime and the problem of Mexico’s cartels, meaning that he would prioritize social investment in poor areas over drug war policies. However, rising violence and the opioid crisis have pushed him toward a more hardline stance.
During the North American Leaders Summit in January, Defense Minister Luis Cresencio Sandovaltold the leaders of the U.S. and Canada that fentanyl seizures had increased by more than 1000% during AMLO’s administration, and meth seizures by 93%.
Governor Samuel García of Nuevo León at the announcement of the Noah Itech investment in January. (@Economia_NL Twitter)
Companies seeking to take advantage of Mexico’s proximity to the United States announced investments totaling about US $2.5 billion in January, according to a Mexican brokerage firm.
In an article on its website, Grupo Bursátil Mexicano (GBM) said there were 23 announcements of new nearshoring investments in Mexico last month.
AMLO, the governor of San Luis Potosí and CEO of BMW San Luis Potosí, Harald Gottsche (right) touring the automaker’s plant. (SRE Twitter)
Among the most significant announcements, GBM said, were those of German automaker BMW in San Luis Potosí ($872 million), Chinese automation technology company Noah Itech in Nuevo León ($100 million) and French manufacturer Bic in Coahuila ($70 million).
The brokerage also mentioned the announcements of a $41 million investment in México state by Swiss food and beverage company Nestlé and a $36 million investment by Italian brake system manufacturer Brembo in Nuevo León.
Of the approximately $2.5 billion in new investments, $964 million will go to San Luis Potosí and $598 million will go to Nuevo León, GBM said.
Other states that are set to benefit include Coahuila ($208 million), Tamaulipas ($200 million), Chihuahua ($181 million) and Querétaro ($121 million).
The data from GBM and CBRE shows that the state of Nuevo León is the biggest beneficiary of planned nearshoring investments. (@LuisMHernandezG Twitter)
In a report entitled Nearshoring: A Phenomenon that Brings Opportunities, GBM said that 13 states benefited from 99% of the “relocation of centers of production in Mexico” in 2022.
The figure, which comes from the real estate services and investment firm CBRE, refers to the square-meter area of production space occupied by companies that relocated to Mexico to be close to the U.S. market.
Nuevo León was the biggest winner, with 50% of the total of new production space opening in that state last year. Coahuila (11%), Yucatán (8%), Chihuahua (7%) and Mexico City (7%) were the next biggest beneficiaries.
Nuevo León Governor Samuel García acknowledged the data in a post to his Instagram account on Thursday.
“Mexico is the country that attracts the most nearshoring in the world and Nuevo León gets 50%. We’re by far the best state in which to invest and do business,” the governor wrote.
In its report, GBM said that transport costs from Asia to the United States increased 5.5 times between 2019 and 2022.
“That’s why foreign companies are today seeking to relocate factories and production centers to Mexico, which being a neighboring country to the United States can offer lower costs and [transport] times,” the brokerage said.
Other advantages of relocating to Mexico, GBM said, are the country’s commercial openness due to its free trade agreements with 50 countries including the United States and Canada, its young population and its specialized workforce and competitive labor costs.
The proposed pipeline would be approximately 450 kilometers long and interconnect with the existing Samalayuca–Sásabe and Sásabe-Guaymas lines. (Depositphotos)
The Federal Electricity Commission (CFE), Carso Energy and Sempra Infraestructura intend to collaborate on the construction of a new gas pipeline between Sonora and Baja California.
The CFE announced Tuesday that it had signed a memorandum of understanding with the two companies “to move forward in a potential strategic alliance for the joint development of infrastructure for the transport of natural gas” between the two northern states.
Manuel Bartlett, director of CFE (left) and Carlos Slim, owner of Grupo Carso, with representatives from Sempra Infraestructura at the signing of the memorandum. (@CFE_MX Twitter)
One objective of the project is to increase the CFE’s electricity generation capacity in Sonora and Baja California, the state-owned firm said in a statement.
Another is to “boost the natural gas industry in the northwestern region of the republic, supporting the country’s energy security and the objectives of the Mexican government.”
The CFE said that the proposed pipeline would be approximately 450 kilometers long and interconnect with the existing Samalayuca–Sásabe and Sásabe-Guaymas lines.
Carso Energy, a subsidiary of Carlos Slim’s Grupo Carso conglomerate, owns the Samalayuca–Sásabe pipeline, while Sempra Infraestructura, a subsidiary of San Diego-based energy infrastructure company Sempra, owns the Sásabe-Guaymas line.
The new pipeline would “enable the delivery of natural gas to several [electricity] generation plants that will be located between Sásabe, Sonora, and Algodones, Baja California,” the CFE said.
“… In addition, this strategic alliance would allow the CFE to optimize the natural gas transport system … with the objective of offering the region’s CFE generation plants, factories and consumers a safer, more efficient, more competitive and more reliable supply of natural gas,” the public utility said.
It noted that the agreement it signed with Carso and Sempra is “preliminary and non-binding” and that the execution of the proposed project is dependent on the outcome of feasibility studies, the obtainment of permits, the signing of engineering and construction contracts and the availability of funding, among other factors.
Baja California, which is not connected to the national energy grid, is set to benefit from the commencement of operations of a new US $1.6 billion CFE-built solar energy plant in Puerto Peñasco, Sonora.
The former member of the Sinaloa cartel, brother of Ismael "El Mayo" Zambada, has served a 12-year prison sentence in the U.S. (Archive)
A key prosecution witness provided damning testimony this week against former federal security minister Genaro García Luna at the latter’s criminal trial in a United States federal court in Brooklyn, New York.
Former Sinaloa Cartel member Jesús “El Rey” Zambada testified Monday that he delivered US $5 million in cash to García Luna, who was arrested in Dallas, Texas, in Dec. 2019 on charges that he allowed the cartel to operate in exchange for multimillion-dollar bribes.
Genaro García Luna was Mexico’s security minister during Felipe Calderón’s administration and was a key architect of the country’s war on drugs. (Cuartoscuro)
The witness, brother of Sinaloa Cartel leader Ismael “El Mayo” Zambada, told jurors that the accused received US $3 million in 2006 while serving as head of the now-defunct Federal Investigation Agency (AFI) and an additional US $2 million weeks later when he had assumed the security minister role in the government led by former president Felipe Calderón.
According to his testimony, the cash – allegedly handed to García Luna in a private room at an upscale Mexico City restaurant by a lawyer who served as an intermediary – was to buy protection for the notorious Sinaloa Cartel, formerly led by convicted drug trafficker Joaquín “El Chapo” Guzmán.
“He was going to provide protection to my brother. He’s not going to bother him. He was going to let him keep on working just as he had been,” Jesús Zambada testified through an interpreter.
The witness, who is on supervised release after completing a 12-year prison sentence in the U.S. on drug trafficking and other convictions, gave similar testimony during El Chapo’s 2018-19 trial in the United States.
The federal courthouse in Brooklyn, New York City where the trial is taking place. (Shutterstock)
Zambada said Monday that he didn’t directly discuss the bribes with García Luna, but saw him and two associates leave the Champs Elysées restaurant with the money after the first meeting.
He asserted that the intermediary told him that the security official would shield the Sinaloa Cartel.
The witness, according to an Associated Press report, “said he was told that when the cartel wanted friendly police commanders in various locales, García Luna would help.”
“And indeed, the cartel was able to get its preferred commanders placed,” Zambada said.
The alleged intermediary, Óscar Paredes, died in 2010.
Jesús Zambada also claimed on Monday that Arturo Beltrán Leyva, a now-deceased leader of the Beltrán Leyva Cartel, also paid large bribes – US $1.5 million per month – to García Luna during his career as a high-ranking security official.
The witness told jurors that he worked as the Sinaloa Cartel’s chief at the Mexico City International Airport from 2000 until his capture in 2008, and that he had the support of Federal Police deployed there. Drugs were brought into the country from Venezuela on passenger, cargo and private airplanes, said Zambada, who estimated that the Sinaloa Cartel at the time was shipping some 100 tonnes of narcotics to the United States on a monthly basis.
Officials with the federal Attorney General’s Office and the AFI, as well as Federal Police officers were on the Sinaloa Cartel payroll, he said. Zambada said that the support the Sinaloa Cartel received from the government and police via its arrangement with García Luna allowed the organization to grow and prosper.
Before Zambada presented his testimony, García Luna – who is also accused of making false declarations to U.S. immigration officials – indicated that he wouldn’t testify at his own trial. He denies all the charges he faces.
Zambada also told jurors that he paid US $3 million in bribes to Gabriel Regino, who served as deputy public security minister in the Mexico City government when President López Obrador was mayor between 2000 and 2005. The payments were allegedly made because the Sinaloa Cartel believed that Regino would become federal security minister if López Obrador won the 2006 presidential election.
Regino defended himself via posts on his Twitter account on Tuesday.
A lawyer for García Luna, César de Castro, asked Zambada on Tuesday whether he recalled telling U.S. authorities in 2013 that he delivered US $7 million in funding for the 2006 presidential campaign of López Obrador, who narrowly lost the election that year to Felipe Calderón.
Genaro García Luna, left, when he was Mexico’s security minister during the presidency of Felipe Calderón, right. (Cuartoscuro)
The witness said he hadn’t made that declaration. “I couldn’t have said it because it isn’t true,” he claimed.
García Luna’s wife, Linda Cristina Pereyra, also provided testimony on Tuesday. She rejected the prosecution’s claim that she and her husband purchased properties and businesses with bribe money.
Mortgages and loans partially funded the purchases, Pereyra said, adding that bonuses and a payout her husband received when he finished his tenure at the AFI provided additional capital. Profits made from selling properties also helped finance subsequent purchases, she said.
García Luna owned properties and businesses in both Mexico and the United States, where he moved in 2012 and began working as a Miami-based security consultant.
Pereyra declared that she was providing testimony to support her husband “with the truth.”
Closing arguments were presented Wednesday, 3 1/2 weeks after the trial began.
Sinaloa Cartel leaders, including “El Chapo” Guzmán, “paid the defendant bribes for protection – and they got what they paid for,” said prosecutor Saritha Komatireddy.
Numerous other witnesses, including cartel bosses, drug traffickers and police officers, testified against García Luna, one of the highest-ranking Mexican officials to be accused of colluding with a drug trafficking organization.
Komatireddy told jurors that the witnesses should be trusted, declaring that they had direct knowledge of bribes paid to the former security minister and didn’t coordinate their accounts.
Here are some of the witnesses the prosecution brought to the stand with testimony against García Luna. (Mexico News Daily)
“I’m not asking you to like them,” the prosecutor said. “These people are criminals. But it takes one to know one.”
Defense lawyers, AP reported, “have argued that the prosecution is relying on untrustworthy criminals who are cooperating with the government to trim their own sentences or to avenge themselves on García Luna for trying to crack down on the drug trade.”
The 54-year-old former security minister could be sentenced to decades in prison if convicted. It is unclear when a verdict in the case will be handed down.
García Luna also faces charges in Mexico, and warrants for his arrest have been issued by Mexican courts. The federal Attorney General’s Office said in January that proceedings aimed at securing his extradition are continuing “within the framework of the corresponding legal limitations.”
The Mexican government has filed a lawsuit in Florida that seeks to recover hundreds of millions of dollars in assets that García Luna allegedly acquired in the U.S. with proceeds of criminal activities.
