Mexico's crackdown on drugs spurs extortion

MEXICO CITY -- When the threatening phone calls demanding $20,000 in protection money began in December, Dr. Roman Gomez Gaviria shrugged them off, believing his clinic on the outskirts of Mexico City couldn't possibly be of interest to criminal gangs. A few months later, his sense of security was shattered when three armed men barged into his office screaming "Dr. Roman, you bastard, where are you?"

"They tried to tackle me, to take me out of the clinic, when I saw that each one had a pistol tucked into his belt," said Gaviria, recounting the ordeal. "They thought that, because I'm a doctor, I wasn't going to resist."

Such shakedown rackets have long targeted businesses in the most violent corners of Mexico. Now the practice is spreading. One anti-crime group estimates that kidnapping across the country has jumped by one-third so far this year compared to 2012. And as the extortion industry expands, it has drawn both experienced criminals and imitators.

Experts say the increase is a byproduct of Mexico's crackdown on the nation's drug gangs. As authorities nab cartel bosses and break up chains of command, hundreds of lower-level gunmen and traffickers are desperate for income and looking for income in new places.

Targets include everything from multinational businesses to corner pharmacies and unsuspecting holidaymakers. The gangs are less organized, but more ubiquitous than the drug cartels, affecting broad swathes of the country.

"It affects all economic activity. It discourages investment," said security expert Jorge Chabat.

In the first eight months of 2013, there were 5,335 reported extortion attempts nationwide, equal to the number for all of the previous year. If the current pace continues, the total could surpass 8,000 this year, almost twice as many as in 2007.

Tourism

The tourism industry, Mexico's third-largest source of foreign revenue, has been one of the hardest hit. Largely untouched when the U.S.-backed drug war began in late 2006, the state of Oaxaca had quietly become the turf of the Zetas cartel. In recent months, guests of at least a dozen hotels in scenic, colonial Oaxaca city have started receiving calls from strangers saying they would be kidnapped if they didn't pay between $380 and $1,500, hotel industry and security officials said.

"The way they operate is to call the hotel, ask to speak to a particular room and then start threatening" the guest, said Joaquin Carrillo Ruiz, an assistant state prosecutor in Oaxaca. Many of the tourists, all from Mexico, reported the crime instead of paying up, but that hasn't calmed worries in Oaxaca, where tourism is a vital source of outside income.

"We have to stop this in its tracks," said Juan Carlos Rivera, the head of the Oaxaca Hotel Association. "If we don't, it could escalate."

As if to prove his point, a group of Spanish musicians were hit by a telephone extortion scheme in Mexico City this month, though none was kidnapped or harmed.

But even authorities acknowledge the vast majority of extortions go unreported -- as many as 92 percent according to a survey of crime victims by the National Statistics Institute. The same survey from April indicated extortion is now the second most common crime after street robberies, with 7.6 percent of those surveyed in 2012 saying they were extortion victims, up about two percentage points from the year before.

President Enrique Pena Nieto's government says the rise in extortions is a paradoxical effect of its success in the anti-drug fight. As such, it mirrors a trend in Colombia, where smaller-scale extortion rackets have mushroomed since security forces in the past decade broke the backs of Marxist rebels, paramilitary groups and major drug cartels with a national presence.

"When cartel activity diminishes, house-break-ins, muggings and other crimes increase," federal security spokesman Eduardo Sanchez said.

Sanchez said he doesn't know whether reports of extortion have increased because there are more such crimes, or because people feel more comfortable going to police as previously lawless areas are brought under greater government control. What's not in doubt is the crime's lasting damage.

"The person who is a victim of extortion lives in a state of permanent kidnapping," Sanchez said. "They live in fear."

Gaviria now has police officers stationed outside his clinic following his close call on Feb. 6. But men he believes to be members of the gang that stalked him still lurk outside his office, and he believes they are being protected by corrupt police officials.

"From that day on, my life has been an imprisonment in my own home," said the 53-year-old Colombian-born physician, who managed to break free from his kidnappers, grab one of their guns and shoot two of them to death at close range.

Dr. Oscar Zavala, president of the National Union of Pharmacy Owners, a trade group of about 5,600 small drugstores, said that almost one out of four reported being hit by an extortion demand in 2012. The real number is probably double that -- almost half of independent drugstores -- because people are too afraid to report the crimes, he said.

Gangs usually call up and demand an average of $2300 per month, saying "‘put the money in my account, or I'll kidnap you,'" Zavala said.

"Before, we pharmacists were spared, because we are such a legal business," he said. "Now, the criminals are hitting everyone."

In early October, the Monterrey-based newspaper El Norte reported that armed bandits stopped one of its delivery trucks and beat its driver at gunpoint while demanding he pay them $230 a week for the right to deliver newspapers on their turf. That's more than the driver makes in a week.

At the other end of the country, in the state of Michoacan, everyone from market vendors to cattle ranchers and lumber mill operators have reported being assigned fixed monthly "quotas" by the Knights Templar drug cartel, which has become so bold that in 2012 its gunmen attacked facilities belonging to the Sabritas snack company, a Mexican subsidiary of PepsiCo.

For those refusing to pay, punishment is as certain as the sight of burned-out delivery trucks and warehouses that dot the Michoacan landscape. More recently, armed vigilante groups funded by business have emerged to kick the extortionists out, though so far with mixed success. The army has also been sent into some areas, but even that hasn't prevented the cartel from threatening truck drivers trying to deliver fuel to holdout towns.

"We've got the federal government and the military here, and despite that, we can't get a gas truck in," said Ramon Contreras Orozco, the local government representative in the village of La Ruana. "These guys don't give a damn about any of that."