• unlimited access with print and download
    $ 37 00
  • read full document, no print or download, expires after 72 hours
    $ 4 99
More info
Unlimited access including download and printing, plus availability for reading and annotating in your in your Udini library.
  • Access to this article in your Udini library for 72 hours from purchase.
  • The article will not be available for download or print.
  • Upgrade to the full version of this document at a reduced price.
  • Your trial access payment is credited when purchasing the full version.
Buy
Continue searching

The State Reaction: A Theory of Illicit Network Resilience

ProQuest Dissertations and Theses, 2011
Dissertation
Author: Nathan Patrick Jones
Abstract:
This dissertation elucidates the relationship between a profit-seeking illicit network's (PSIN's) business strategy and resilience. The dissertation finds that territorial PSIN business strategies challenge "the territorially sovereign state" through activities like kidnapping and extortion. The intensity of the state reaction to the illicit network was the single most important factor in its ability to survive disruptive events. The state, in this case Mexico, reacted more intensely to territorial PSIN's in collaboration with civil society, other states and rival "transactional" PSIN's. In this case the state (Mexico) dissolved a territorial PSIN, suggesting that the state is capable of effectively confronting this illicit network type. On the other hand, the case finds that the state was corrupted by transactional PSINs whose business strategies made them resilient. This finding suggests that through corruption, transactional PSINs will pose a long-term threat to democratic institutionalization in Mexico and internationally anywhere that states must address these illicit networks. The dissertation is an in-depth historical case study of the Tijuana Cartel, also known as the Arellano Felix Organization (AFO). Through archival research and interviews with experts on the illicit network a case study was constructed. Experts interviewed for the dissertation during nine months of fieldwork in Mexico City and Tijuana, included: journalists, law enforcement, scholars, extortion victims and businessmen. Given the similar structures of illicit networks, the findings of this dissertation have important implications for understanding other drug trafficking organizations, prison gangs, terrorists, insurgencies, arms traffickers, among a host of other potential "dark network" actors.

TABLE OF CONTENTS

Page

List of Figures

v

List of Tables

vi

Acknowledgements

vii

Curriculum Vitae

ix

Abstract of Dissertation

xx vi

Chapter 1 :

Introduction

1

Chapter 2 : Literature Review:

Three Levels of Illicit Network Analysis:

Internal, Domestic and Global

31

Chapter 3 :

Illicit Network Re silience: A Theory

7 3

Chapter 4 : Methodology

9 9

Chapter 5 : The Resilience of th e Arellano - Félix Organization

117

Chapter 6 : The US - Mexico Reaction to the Arellano Felix Organization

1 51

Chapter 7 : Conclusion: A General Argument of

I llicit Network Resilience

176

Bibliography

191

Appendix A : Organization Chart -

Mexican Drug Trafficking 1980‟s (Cooperative and Centralized Under El Padrino )

234

Appendix B: AFO Structure Post 1991(Simplified)

235

Appen dix C: Organizational Chart AFO 1991 - 1995

236

Appendix D : Organizational Chart AFO 1995 - 1997

237

Appendix E : Organizational Chart AFO 1997 - 2002

238

Appendix F

Organizational Chart AFO 2002 - 2006

239

iv

Appendix G: Organization Chart AFO 2006 - 2008

240

Appendix H: Organization Chart Teo Faction 2008 - January 2010

241

Appendix I : Fernando Sanchez Arellano Organization (FSO) April 2008 - January 2010

242

Appendix J: AFO Reward Poster

243

Appendix K: AFO Reward Poster 2000‟s

244

Appendix L : Study Information Sheet

245

Appendix M : Interview Questionnaire

249

Appendix N : Interview Subject Chart

254

Appendix O : List of Acronyms and Glossary of Important Terms

247

Appendix P : Timeline of Major event s in AFO History

257

Appendix Q : Large Mexican Drug Trafficking Organization

by Busines s Model a nd

Author‟s Present Perceived Strength Based on Media and Expert Accounts 2011

265

Appendix R: Cartel Arrest Data adapted from NPR examination of arrest s

265

Appendix S: Cartel Bribe Data adapted from NPR analysis

267

Appendix T : The Extended State Reaction Model of

Profit - Seeking Illicit Network Resilience

268

v

List of Figures

Page

Figure 1. Types

of Illicit N etworks

11

Figure 2.

The State Reaction and Illicit Network Resilience

28

Figure 3. Chain, Wheel and All - Channel Networks

42

Figure 4.

UNODC Pilot Study 2002 -

O rganizational Structure Models

45

Figure 5 .

Capillary and Double - Funnel Trafficking Models

65

Figure 6 .

Combining the Double - Funnel Model and the Wheel Network

67

Figure 7 . Combining the Double - Funnel Model and the Chain Network

69

Figure 1.

Types

of Illicit N etworks

77

Figure 8 . The Relationship between Hierarchy and Busines s Model in Illicit Networks

8 1

Figure 9 . Resilience

Typology

8 6

Figure 2 . The S tate Reaction and

Illicit Network Resilience

90

Figure 1 0 .

Organization Chart -

Mexican Drug Trafficking 1980‟s

123

Figure 11. AFO Structure Post - 1991 (Simpli fied

130

Figure 1 2 . Kidnappings in Tijuana 2006 - September

2011

1 44

Figure 1 3 . Kidnappings, Homicides and Extortio ns in Tijuana 2006 - September 2011

168

Figure 1 4 . Tijuana Homicides 2006 - September 201 1

169

vi

List of Tables

Table 1. Territor ial Versus Transactional:

Business Strategy in 26 Areas

83

Table 2. Timeline of Major events in AFO History

118

vii

Acknowledgments

I would like to thank

my

advisors Caesar D. Sereseres and Etel Solingen for feedback, advice,

and counseling through the long process of finishing a dissertation. The advice of advisors ,

both academic and personal ,

has proven critical to its completion . I cannot thank you both enough.

I would like to thank my dissertation committee member Profe ssor Louis Desipio for providing excellent feedback and being willing to jump on the committee to help us all in times of need . I would like to thank dissertation

committee me mber Professor Kamal Sadiq for his enthusiasm, sage advice , and spearheading o f all that is “Illicit Flows.”

I am forever indebted to the men and women of law enforcement who dedicated their lives to the pursuit of justice and willingly made time for a young academic without reputation. Thank you for your time, advice, thoughts, expe rtise and giving me my start. I would like to reserve s pecial thanks to my good friend Steve Duncan whose willingness to meet and discuss the dissertation

was

invaluable.

I would like to thank the following people and i nstitutions for their intellectual , financial and personal support:

To my wife

Sofia for her love, support and tolerating my long work hours and late nights.

The Department of Political Science at UC Irvine for providing me time, funding and a well rounded intellectual foundation. Tea ching my way through graduate school was one of the most

intellectually

rewarding experiences of my life.

The Institute for Global Conflict and Cooperation (IGCC) for providing me

the fellowship that made field work in Tijuana

and Mexico City

possible.

viii

The Center for Global Peace and Conflict Studies (CGPACS) at UC Irvine for providing me a forum to receive

feedback on my work and funding preliminary interview trips to Mexico and Washington, D.C.

Colonel Cope of the National Defense University for allowi ng me to intern and soak up his wisdom both personally and substantively.

David Shirk and Viridiana Rios of the Transborder Institute for their advice feedback and encouragement.

The InsightCrime.org team for helping me to write better and publish regu larly on crime and security in Mexico.

Colegio De La Frontera Norte , Tijuana (COLEF) for providing me an intellectually vibrant place to base my fieldwork and write.

Special thanks to Professor Rosio Barrajas for that most amazing of all gifts ;

my own office.

I would like to thank Professor Jose Maria Ramos

( my COLEF advisor )

for taking me under his wing and letting me bounce ideas off of him for hours on end.

Any errors are my own.

ix

Curriculum Vitae

Nathan P. Jones

NJONES@UCI.EDU

Education :

UC Irvine 2004 - 2011

PhD in the Political Science focusing on international relations and security issues related to Latin America.

Dissertation Title: The

State Reaction: A Theory of Illicit Network Resilience.

A histo rical case study of the illicit network structure and resiliency of the drug trafficking organization commonly referred to as the Tijuana cartel.

PhD to be awarded Fall 2011.

Masters Political Science Fall 2008

Cumulative GPA: 3.908

Colegio de La Fron tera Norte, Tijuana (COLEF) 2011

Attended COLEF while doing fieldwork in Tijuana. January - June 2011.

UC Berkeley 1999 - 2003

Cumulative GPA: 3.47

Major GPA: 3.85

Bachelors Political Science (High Honors)

Honors Thesis on Regime Stability in Syria

x

Pu blications:

“Applying Lessons From Colombia to Mexico” Woodrow Wilson Center for Scholars: Mexico Institute. Al Dia. December 2, 2010.

http://mex icoinstitute.wordpress.com/2010/12/03/applying - lessons - from - colombia - to - mexico/

“Goat - Horns, Blackbirds and Copkillers: The Flow of Guns from the United States into Mexico.”

November 22, 2010. Appendix of the Center For Strategic and International Stu dies (CSIS) policy proposal report on US - Mexico Counternarcotics Efforts organized by Sidney Weintraub and Duncan Wood. http://csis.org/files/publication/101108_We intraub_MexicanUSAntinarc_web.pdf

“InSight: Report Tracks How Intra - Cartel Wars Exploded in Mexico.” Wednesday, February 09, 2011. http://insightcrime.org/insight - latest - news/item/548 - insight - report - tracks - how - intra - cartel - wars - exploded - in - mexico

“Kidnapping in Tijuana: The New Normal.” Insightcrime.org. May 31, 2011. http://insightcrime.org/investigations/insight - exclusives/item/1002 - kidnapping - in - tijuana - the - new - normal

Arrest of Tijuana Ex - Mayor: Putting Crime in the 'Freezer'? June 5, 2011. http://www.insightcrime.org/insight - latest - news/item/1033 - arrest - of - tijuana - ex - mayor - putting - crime - in - the - freezer

Key Lieutenant's Testi mony Could Bring Tijuana Drug Lord to Justice Monday, July 11, 2011. http://insightcrime.org/insight - latest - news/item/1 213 - key - lieutenants - testimony - could - bring - tijuana - drug - lord - to - justice

xi

Cartel Lieutenant‟s Capture Could Bring Tijuana a Step Closer to War. Monday, 18 July 2011. http://insightcrime.org/insight - latest - news/item/1248 - cartel - lieutenant%E2%80%99s - capture - could - bring - tijuana - a - step - closer - to - war

Measuring Reforms to Mexico's Broken Justice System. June 28, 201 1. http://insightcrime.org/insight - latest - news/item/1148 - measuring - reforms - to - mexicos - broken - justice - system

Why Extraditing Mexico Tra ffickers Could Strengthen US Gangs. August 18, 2011. http://insightcrime.org/insight - latest - news/item/1431 - why - extradit ing - mexico - drug - traffickers - could - strengthen - us - gangs

Why the US Doesn‟t Have Mexico - Style Drug Cartels… Yet. August 16, 2011. http://www.insightcrime.org/insight - latest - news/item/1414 - why - the - us - doesnt - have - mexico - style - drug - cartels - yet

Review of Sylvia Longmire‟s Cartel: The Coming Invasion of Mexico‟s Drug Wars. September 30, 2011. InsightCrime.org. http://www.insightcrime.org/insight - latest - news/item/1647 - cartel - the - coming - invasion - of - mexico%E2%80%99s - drug - wars

xii

Upcoming Publications

Defense Intelligence Agency (National Defense Intelligence College) project on bilateral security issues in Mexico. The Four Phases of the Arellano - Félix Organization.

Presented in Guadalajara Mexico at Universidad de Guadalajara

February 18 - 21, 2010.

"Ejércitos de usuarios y el uso del secuestro por los carteles de las drogas: Consecuencias

no intencionales de las estrategias de los barones de las drogas." (An Army of Users and the Use of Kidnapping by Drug Cartels: The Unintended Consequences of Ki ng - pin Strategies.) Nathan Jones. Colegio de la Frontera Norte de Tijuana. June 29, 2011.

Book Chapter edited by Katherine Tate UC Irvine, “„California Dreaming‟: Explaining Mexico‟s Quixotic Foreign Policy on California‟s Proposition 19.”

xiii

Media Ap pearances:

Interviewed KPBS Radio Frontera

Desk on the Impact of the Arrest of “Hank” Rhon former Mayor of Tijuana on Firearms Charges. http://www.kpbs .org/news/2011/jun/07/former - tijuana - mayor - suspected - illegal - firearms - po/

Interviewed on the impact of the arrest of “El Ruedas,” KPBS Evening Edition, November 9, 2011. http://www.youtube.com/watch?list=PL2BEE055A0FBFA666&feature=player_embedde d&v=5uLIds1_MXs

xiv

Graduate Course Work:

US - Latin - American Security Relations

Professor Sereseres

Fall 2004

Foundations of Modern Political Theory

Professor Easton

Fall 2004

International Relations Theory

Professor Morgan

Winter 2005

Micro - Politics

Professor Rosenberg

Winter 2005

Macro - Politics

Professor Solingen

Spring 2005

International Relations Theory of East Asia

Profes sor Uriu

Spring 2005

Approac hes to International Relations

Professor Uriu

Fall 2005

Religion in International Politics

Professor Lynch

Fall 2005

History of Political Thought

Professor Olson

Winter 2006

Regime Change East Asia

Professor Solinger

Spring 2006

Game Theory of International Relations

Professor McGann

Fall 2006

International Security

Professor Sereseres

Fall 2006

Rethinking Otherness

Professor Brunstetter

Winter 2007

Counterinsurgency

Professor Sereseres

Spring 2007

Qual itative Interpretive Methods

Professor Lynch

Spring 2007

Illicit Flows

Professor Sadiq

Winter 2008

Homeland Security

Professor Sereseres

Fall 2008

ICPSR Graduate Statistics program University of Michigan Summer 2005

Regression 1 and Game Theory taught by Dean Lacy of Ohio State University.

Audited the Graduate Seminar the Just War with Professor Daniel Brunstetter.

xv

Study Abroad/Language Skills

Lived in Cuernavaca Mexico for approximately 3 months in the summer of 2007 and took six weeks of in tensive immersion language courses at Universidad Internacional (UNINTER) (3 years of study equivalent). Proficient in written and spoken Spanish.

Attended Colegio de La Frontera Norte

in Tijuana a graduate University Specializing in the Northern borde r of Mexico 2010 - 2011 academic year. Fieldwork conducted in Spanish.

Intern Experience

Research Intern (Fall 2007)

Institute for National Strategic Studies (INSS)

National Defense University (NDU) Fort McNair

Duties included translations from Spanish to English of government documents and other materials. Kept abreast of world and Latin American news relevant to American security policy. Assisted in the organization of a conference on the security of the United States Southern approach, including Mex ico, the Caribbean and Central America. Provided succinct summaries and analyses of conferences, seminars and workshops.

xvi

Relevant TA Experience:

Teaching Assistant US Civil Liberties 171A Professor Buzan Fall 2004

General Teaching Effectiveness Score:

6.54 out of 7

Teaching Assistant US Supreme Court 174CW Professor Petracca Winter 2005

General Teaching Effectiveness Score: 6.0 out of 7

Teaching Assistant Anthropology 2D Linguistics and Culture Professor Boellstorf Spring 2005 General Teaching Effecti veness Score: 5.8 of 7

Teaching Assistant Intro to Law 71A Professor Buzan Fall 2005

General Teaching Effectiveness Score: 6.13 of 7

Teaching Assistant US Coercive Diplomacy 142G Professor Sereseres Winter 2006

General Teaching Effectiveness Score: 6.53

of 7

Teaching Assistant Latin American Revolutions Professor Duncan Spring 2006

General Teaching Effectiveness Score: 6.31 of 7

Teaching Assistant US Intervention in Latin America Professor Duncan Winter 2007.

General Teaching Effectiveness Score: 6.48 of 7

Teaching Assistant Latin American Revolutions Professor Duncan Spring 2007

General Teaching Effectiveness Score: NA

Teaching Assistant Race in Latin America Professor Duncan Spring 2007

General Teaching Effectiveness Score: NA

xvii

UCDC Grad Fellow in Wa shington, D.C., TAing courses in Monuments and Memorials and a Washington DC Seminar for UCDC students doing internships.

Teaching Assistant US Coercive Diplomacy 142G Professor Sereseres Winter 2008

General Teaching Effectiveness Score: 6.38 of 7

Teach ing Assistant Political Theory Professor Kevin Olson Spring 2008 General Teaching Effectiveness Score: 6.11 of 7

Legal Implications of the Drug Trade Federal Judge David Carter Fall 2008

Teaching Assistant US Coercive Diplomacy 142G Professor Sereseres W inter 2009

Legal Implications of the Drug Trade: Federal Judge Carter Spring 2009 General Teaching Effectiveness Score: 6.01 of 7

Teaching Assistant US Coercive Diplomacy 142G Professor Sereseres Winter 2010

General Teaching Effectiveness Score: Not yet

available

Teaching Assistant Multicultural Education 124 Lecturer Laurie Hansen Spring 2010

xviii

Lecturing Experience

Lecturer for International Studies 12/Political Science 44A Global Issues and Institutions

Summer Session II at UC Irvine. Lectured a lower

division survey course on topics such as intergovernmental organizations like the UN, NGO‟s, insurgency, counterinsurgency, terrorism, failed states, migration, transnational criminal organizations, political - economy, and the history of the international state - system.

Lecturer Introduction to International Relations Theory at UCI Summer session II 2010.

Guest Lecture on Mexican and Colombian Drug Trafficking for Federal Judge David Carter‟s Legal Implications of the Drug Trade UC Irvine Fall 2009 and 2 010

Guest Lecture on Preemptive vs. Preventive War for Professor Daniel Brunstetter‟s Just War Revisited Course 2008.

Introduction to International Relations Theory. University of San Diego Fall 2011.

xix

Awards :

Letter of congratulations from the Dean of S ocial Sciences on Top 10 ranking for all social science TAs (March, 2005).

Excellence in Teaching Award from the Department of Political Science for Winter 2006 US Coercive Diplomacy.

Global Connect Award 2008 for Graduate Student Presentation on What Is T errorism?

Global Connect Award 2009 for Graduate student Presentation on Counterinsurgency and Failed States.

Dissertation Fellow Department of Political Science UC Irvine Fall 2009

Excellence in Teaching Award from the Department of Political Science fo r Winter 2010 US Coercive Diplomacy.

Center for Global Peace and Conflict Studies (CGPACS) Award 2010

Institute for Global Conflict and Cooperation (IGCC) Fellow 2010 - 11 –

Provided one year of funding for field work and dissertation completion to be carr ied out in Mexico. Currently in Mexico City researching for dissertation.

Center for Global Peace and Conflict Studies (CGPACS) Research Award Recipient and Affiliate 2010.

James Danziger Award for Teaching Excellence 2011 UC Irvine Political Science.

xx

Conference Presentations:

International Studies Association March 2006 Just War, Pacifism and the Holy See

a panel presentation.

International Studies Association February/March 2007 The Decision to Invade and the Iraqi Insurgency as a Market Entry/Exi t Game

ISA West San Francisco 2008 --

Using Counterinsurgency Strategy to Reassert the Westphalian State Against Criminal Networks: The Case of the Gulf Cartel in Mexico

ISA National New York 2009 --

Using Counterinsurgency Strategy to Reassert the West phalian State Against Criminal Networks: The Case of the Gulf Cartel in Mexico

The Four Phases of the Arellano - Felix Organization.

Presented in Guadalajara Mexico at Universidad de Guadalajara

February 18 - 21, 2010. National Defense Intelligence College

(Defense Intelligence Agency).

The Four Phases of the Arellano - Felix Organization.

Presented in Washington, DC. May 25, 2010. National Defense Intelligence College (Defense Intelligence Agency).

xxi

Territorial Cartels and the Reaction of the State: The Arellano Felix Organization in Mexico . Panel Discussant The War on Terror and Counterinsurgency Issues . International Studies Association - West --

Los Angeles. September 25 - 26, 2010.

Panel Chair ISA West 2010 –

Los Angeles. Panel on Counterinsurgency .

The State and Illicit Network Structures . Institute for Global Conflict and Cooperation Southern California Symposium. UC Irvine campus. January 14, 2011.

Illicit Network Business Models. Kidnapping and the Tijuana Cartel. Center for Global Peace and Conflict Studies. UC Irvine Campus. April 2011.

“La reacción del Estado mexicano frente al crimen organizado: una teoría de la elasticidad” Colegio de la Frontera Norte de Tijuana. June 16, 2011. Presentation in Spanish.

" Ejércitos de usuario s y el uso del secuestro por los carteles de las drogas: Consecuencias

no intencionales de las estrategias de los barones de las drogas ." (An Army of Users and the Use of Kidnapping by Drug Cartels: The Unintended Consequences of King - pin Strategies.) Na than Jones. Colegio de la frontera Norte de Tijuana. June 29, 2011.

xxii

"Ejércitos de usuarios y el uso del secuestro por los carteles de las drogas: Consecuencias

no intencionales de las estrategias de los barones de las drogas."

(An Army of Users and t he Use of Kidnapping by Drug Cartels: The Unintended Consequences of King - pin Strategies.) Nathan Jones. Universidad Autónoma Baja California, Mexicali. October 27 - 28, 2011 en la Segundo Foro Binacional: El Impacto Social de la Inseguridad Publica en l a Frontera México - Estados Unidos.

Armies of Users and the Unintended Consequences of King - Pin Strategies in the Fight against Drug Trafficking Organizations. Pacific Coast Latin American Studies Association Conference. October 29, 2011.

Three Level s of Illicit Network Analysis: A Literature Review. International Studies Association West 2011, Pasadena 2011.

xxiii

Upcoming Conference Presentations

Tijuana’s Counterinsurgency Strategy and Organized Crime . (2008 - 2010). Latin American Studies Associatio n 2012.

Fearing the State: Why Illicit Networks Flatten and Reduce Violence

International Studies Association 2012 San Diego.

Discussant:

Spring 2009 --

UC Irvine Research in International Global Studies (RIGS) Discussant for Presentation of Book Chap ter “ Leveraging Host Governments in War: Lessons from Vietnam and Iraq ” by James H. Lebovic

Conference Attendance

Attended two conferences at Colegio De La Frontera Norte

in Tijuana (COLEF) with Associate Dean Caesar Sereseres. Both conferences were o n Mexican Border Security Issues and the Merida Initiative 2008 - 2009.

Attended Global Public Policy Forum on War On Drugs

at University of Texas El Paso (UTEP) and Ciudad Juarez , Mexico September 21 - 22, 2009.

Attended CASEDE Conference in Mexico City o n Organized Crime October 2010.

Attended Stanford - ITAM Conference on Governance in Mexico November 2010.

xxiv

Course Papers and Qualifying Papers:

An Elitist Critique of Laski‟s Pluralism

What Oil and the Military Mean for Democracy in Chavez‟s Venezuela

Just War, Pacifism and the Holy See (Qualifier)

The Role of Alliance in the Democratization of East Asia

Assessing the Permeation of American Political Ideology on the American Catholic Church‟s Foreign Policy

Augustine or Kant? Assessing the US and Germa n Responses to Terrorism

The Catholic Church 411 - 1648 and the International Relations Paradigms

Assessing the Process of “Othering” in Augustinian Just War Tradition

The Origins of Civil War in Iraq

Religious Perspectives on Nuclear Weapons in Internationa l Relations Theory (Qualifier)

Using Counterinsurgency Strategy to Reassert the Westphalian State Against Criminal Networks: The Case of the Gulf Cartel in Mexico (Qualifier)

xxv

Academic Service:

Headed the International Relations Group 2006 - 2007. The IR group is comprised of graduate students with an IR focus. This group helps to build graduate student - faculty relations and allows IR grad students to network and practice conference presentations. We also put on our own conference annually.

Assisted th e undergraduate UC Irvine Model United Nations team put on their annual high school conference. (2005 - 6)

Global Connect 2008 - 9 Graduate Student Presenter –

What is Terrorism?

; What is Counterinsurgency?

And Failed States . Global Connect is a high schoo l outreach program run by UCI undergraduates, which develops curriculums to improve upon local schools‟ ability to educate global citizens. Graduate students provide specialized presentations.

Interim - Administrator Global Connect Winter 2010 –

Duties in clude: Addressing personnel issues, making presentations, running weekly meetings, interfacing with local high school teachers and administrators on Global connect curriculum, etc.

xxvi

ABSTRACT OF THE DISSERTATION

The State Reaction: A Theory of Illicit

Network Resilience

By

Nathan Patrick Jones

Doctor of Philosophy in Political Science

University of California, Irvine, 2011

Professor Caesar D. Sereseres, Co - Chair

Professor Etel Solingen, Co - Chair

This dissertation elucidates the rela tionship between

a profit - seeking illicit network ‟s (PSIN‟s)

business strategy

and resilience . The dissertation

finds that

territorial PSIN

business strategies

challenge “ the territorially sovereign state ”

through activities like kidnapping and extortion .

The intensity of the state reaction to the illicit network was the single most important factor in its ability to survive disruptive events. The state ,

in this case Mexico ,

reacted

more intensely

to territorial PSIN‟s in collaboration with civil society , other states and rival “ transactional ”

PSIN‟s. In this case the state (Mexico)

dissolved a territorial PSIN , suggesting that the state is capable of effectively confronting this illicit network type. On the other hand, the case finds

that the state was

corrupted by transactional PSINs whose business strategies made them resilient. This finding suggests that through corruption, transactional PSINs will pose a long - term threat to democratic institutionalization in Mexico and internationally anywhere that

states must address these illicit networks.

xxvii

The dissertation

is an in - depth historical case study of the Tijuana Cartel, also known as the Arellano Felix Organization (AFO). Through archival research and interviews with experts on the illicit network a

case study was constructed. Experts interviewed for the dissertation during nine months of fieldwork in Mexico City and Tijuana, included:

journal ists, law enforcement, scholars, extortion victims and businessmen. Given

the

similar

structures

of illici t networks , the finding s

of this dissertation

have important implications for understanding other drug trafficking organizations , prison gangs, terrorists, insurgencies , arms traffickers,

among a host of other potential “dark network” actors .

1

Chapter 1 Introduction

States and territorial profit-seeking illicit networks (PSINs ) are enemies, because they are so much alike. They are both: territorial, hierarchical, resil ient, prone to violence and funded by taxation. 1 Territorial PSINs threaten the state’s underlying raison d’être, the ability to govern through the taxation of territory. 2 The “predatory” “alternative governance structure” these territorial profit-seeking illicit networks establish through extor tion and kidnap activities, directly challenge states by illicitly taxing the local population and exercising violence within state territory. 3 Territorial profit-seeking illicit networks thus become the pr imary targets for “territorially sovereign states.” 4

1 The conception of the state is heavily influenced by the work of Charles Tilly which views the state as a form of organized crime providing security in exchange for taxation; albeit in a more professionalized fashion than organized crime. Tilly 1990; Tilly 1985; Tilly 198 6; Skaperdas 2001; Skaperdas and Syropoulos 1993; S kaperdas 1992. 2 The term profit-seeking illicit network (PSIN) is utilized here because this work situates itself wit hin the literature on illicit networks and illicit flows. To the best of my knowledge this is the first formal use of the term, though “profit-seeking” and “illicit network” have clearly been used by other authors like Michael Kenney and formal government reports on organized crime. The qualit ative sociological network literature provides usef ul concepts that can explain the capability of these criminal a ctors to create “networks of complicity” within the state apparatus (Sadiq 2009). The term “ illicit network” also con notes the transnational character of the project be cause the term is not constrained by the “state-centric discourse, e. g. “non-state actors.” The term “illicit network” is superior to “drug cartel” because these networks have not prove n capable of controlling the supply and price of a given commodity. For excellent discussions of the misuse of the term “cartel” See: Lacey 2009; Cook 2007; Sadiq 2009; Schendel and Abraham 2005. More in-depth discussions of the terms transactiona l versus territorial PSINs will be provided in chap ter three on my state reaction argument. 3 Other terms often used to describe profit-seeking illicit networks include: terrorist organizations and transnational criminal organizations (TCO’s), clandestine transna tional actors (CTA’s), drug trafficking organizatio ns (DTO’s), illicit networks, “dark networks,” and organized cr iminal groups (OCG’s). The term is superior to drug trafficking organization because these networks are not limited to trafficking illicit narcotics, nor is this alwa ys their primary source of profit in some cases. Clunan and Trinkunas 2010, chap. Introduction; Andr eas 2001; Andreas 2003; Olson and Salazar 2011; Wil liams 1995; Sullivan 2008; Buscaglia, Ratliff, and Gonzal ez-Ruiz 2005; 2010l; Milward 2003. 4 Spruyt 1994.

2

“Transactional” profit-seeking illicit networks, which focus their illicit activities on the trafficking of narcotics, money laundering, front businesses, or othe r non-extortionist activities, become secondary targets for states and are more capable of for ming alliances with states through corruptive collusion. Due to the violent reaction of states (pr ompted by civil society) against territorial PSINs, they tend to be less resilient tha n their “transactional” counterparts. 5

The surviving transactional PSINs form state alliances against their rivals through corruption, thus institutionalizing state-PSIN cooperation that hinders long ter m democratic consolidation. The threat they pose to states is more subtle and insidious than tha t posed by territorial or insurgent illicit networks that seek to supplant the state, or weaken it in c rucial territories through brute force. Transactional PSINs constrain and pervert democra tic consolidation, economic development and the rule of law. The distinction between “transactional” and “territorial” was i nitially published in an Economist article quoting an unknown Mexican government official. My c ontribution has been to develop this brief characterization into a typology, and relate i t to the dependent variable of resilience. 6

While the answer (summarized above) was complex, it began with a simple question. What makes illicit networks resilient? As the research conti nued, the answer to that question was found largely in the answer to another. Why do states attack some illicit networks more aggressively than others?

5 For the first mention of the distinction between te rritorial and transactional see the Economist’s “Ou tsmarted by Sinaloa.” Chapter three provides a typology of ins urgent, transactional and territorial illicit netwo rks the latter two of which are primarily profit-seeking. Explaining why states attack insurgent networks is obvious. T hey are political entities seeking to overthrow the state a nd supplant it. Explaining why states attack some profit-seeking illicit networks and not others is thus far more in teresting and important. 2010j. 6 Ibid.

3

These questions have important implications for international relati ons and globalization debates on the future of the sovereign state system under conditions of globalization. Many have argued that the state is “withering” or “losing control” in the face of globalization and expanded markets. 7 Part of this debate is the affect of what Peter Andreas c alls “illicit globalization.” 8

Scholars like Phil Williams, Arquilla and Ronfeldt and Moíses Naím have warned of the coming threat of illicit “netwar” or illicit networked actors that “nimbly” “outmaneuver” the state. 9

Andreas has countered that the threat illicit networks pose has be en “overblown” and that states strengthen themselves through the very fight with illicit networks . 10

This dissertation contributes to this debate by elucidating which profit-seeking illicit networks t rigger a violent state reaction, which illicit networks are likely to survive and how the symbiotic relationshi ps that allow them to survive are likely to affect the character of states under conditions of globalization. Illicit Economies The exponential expansion of licit markets in the 20 th century has been well documented, but lesser studied are the important illicit economies that thrive in their shadow. Illicit economies exist in “ungoverned spaces” but also exist in what we w ould consider well-governed “spaces,” e.g. narcotics sales in cities with low crime i n Western Europe and copyright-piracy resulting in billions of dollars of losses in the United States. 11 Vanda Felbab-Brown utilizes the term “illicit economy” in lieu of “black markets” because th e term better encapsulates the nature of the “scope and extent of many illicit economies.” 12 It is in illicit economies that illicit

Full document contains 299 pages
Abstract: This dissertation elucidates the relationship between a profit-seeking illicit network's (PSIN's) business strategy and resilience. The dissertation finds that territorial PSIN business strategies challenge "the territorially sovereign state" through activities like kidnapping and extortion. The intensity of the state reaction to the illicit network was the single most important factor in its ability to survive disruptive events. The state, in this case Mexico, reacted more intensely to territorial PSIN's in collaboration with civil society, other states and rival "transactional" PSIN's. In this case the state (Mexico) dissolved a territorial PSIN, suggesting that the state is capable of effectively confronting this illicit network type. On the other hand, the case finds that the state was corrupted by transactional PSINs whose business strategies made them resilient. This finding suggests that through corruption, transactional PSINs will pose a long-term threat to democratic institutionalization in Mexico and internationally anywhere that states must address these illicit networks. The dissertation is an in-depth historical case study of the Tijuana Cartel, also known as the Arellano Felix Organization (AFO). Through archival research and interviews with experts on the illicit network a case study was constructed. Experts interviewed for the dissertation during nine months of fieldwork in Mexico City and Tijuana, included: journalists, law enforcement, scholars, extortion victims and businessmen. Given the similar structures of illicit networks, the findings of this dissertation have important implications for understanding other drug trafficking organizations, prison gangs, terrorists, insurgencies, arms traffickers, among a host of other potential "dark network" actors.