Business leader shot to death after complaining about drug cartel extortion in Mexican TV interviews

The head of a Mexican business chambers’ federation in Tamaulipas state, across the border from Texas, was killed Tuesday, hours after giving television interviews complaining about drug cartel extortion in the state, officials said.

Julio Almanza was shot to death outside his offices in the city of Matamoros, across from Brownsville, Texas.

“We are hostages to extortion demands, we are hostages of criminal groups,” Almanza said in one of his last interviews. “Charging extortion payments has practically become the national sport in Tamaulipas.”

Even Mexico’s largest corporations are now being hit by demands from drug cartels, and gangs are increasingly trying to control the sale, distribution and pricing of certain goods.

The problem came to a head when the Femsa corporation, which operates Oxxo, Mexico’s largest chain of convenience stores, announced late last week that it was closing all of its 191 stores and seven gas stations in another border city, Nuevo Laredo, because of gang problems.

The company said it had long had to deal with cartel demands that its gas stations buy their fuel from certain distributors. But the straw that broke the camel’s back came in recent weeks when gang members abducted two store employees, demanding they act as lookouts or provide information to the gang.

Since convenience stores are used by most people in Mexico, the gangs see them as good points to keep tabs on the movements of police, soldiers and rivals.

“We had incidents in stores that consisted of them (gangs) demanding we give them certain information, and they even abducted two colleagues to enforce this demand,” said Roberto Campa, Femsa’s director of corporate affairs.

In a statement Monday, Femsa said its stores in Nuevo Laredo remain closed this week “due to acts of violence that put our colleagues’ safety at risk.”

In a social media post, the Tamaulipas attorney general’s office acknowledged Almanza’s death.  “We send our condolences to his family members and friends,” the office said.

Earlier this month, a Mexican fisheries industry leader who complained of drug cartel extortion and illegal fishing was shot to death in the northern border state of Baja California. Minerva Pérez had complained that drug cartels were extorting protection payments from fishing boats, distributors, truck drivers and even restaurants.

Cartel violence in Mexico has long been focused on smaller businesses, where owners often visit their shops and are easily abducted or approached by gang members to demand extortion payments. But Femsa is the largest soft drink bottler in Latin America and is listed on the Mexican stock exchange.

Nuevo Laredo has long been dominated by the Northeast Cartel – an offshoot of the old Zetas cartel – but the problem is starting to hit larger companies nationwide. Sectors ranging from agriculture, fishing and mining to consumer goods have been plagued by cartels trying to essentially take over their industries.

“Organized crime has taken partial control”

This week, the American Chamber of Commerce, whose members tend to be larger Mexican, American or multinational corporations, released a survey of its members in which 12% of respondents said that “organized crime has taken partial control of the sales, distribution and/or pricing of their goods.”

That means drug cartels are distorting parts of Mexico’s economy, deciding who gets to sell a product and at what price – and in return they are apparently demanding sellers pass a percentage of sales revenue back to the cartel.

In the past, cartels have carried out violent attacks, arson and even killings of those found selling goods that had not been “authorized” by them or bought from distributors they control.

About half of the 218 companies in the American Chamber survey said that trucks carrying their products had suffered attacks, and 45% of the companies said they had received extortion demands for protection payments.

Of the companies that reported how much they had to spend on security measures, 58% said they spent between 2% and 10% of their total budgets on security; 4% spent at least a tenth of their total outlays on security measures.

On Tuesday, Femsa said in a statement that it was making progress in talks with authorities that might provide guarantees for the safety of its employees and allow the chain to reopen its stores in Nuevo Laredo.

Mexico’s powerful drug cartels have expanded their income sources by both extorting money from companies and even taking over legitimate businesses.

In 2014, authorities confirmed the Knights Templar cartel had essentially taken over exports of iron ore from the western state of Michoacan, and the ore trade with China had become perhaps its biggest single sources of income.

Cartels have also been accused of controlling production and manipulating domestic prices for crops like avocados and limes.

And late last year, authorities in Michoacan confirmed one cartel had set up its own makeshift internet system and told locals they had to pay to use its Wi-Fi service or they would be killed.

Dubbed “narco-antennas” by local media, the cartel’s system involved internet antennas set up in various towns built with stolen equipment. The group charged approximately 5,000 people elevated prices between 400 and 500 pesos ($25 to $30) a month.

Cartels also targeting Americans

Sometimes, the victims are Americans. Earlier this month, the U.S. imposed sanctions on a group of Mexican accountants and firms allegedly linked to a timeshare fraud ring run by the Jalisco New Generation drug cartel in a multi-million dollar scheme targeting Americans.

In November, U.S. authorities said the cartel was so bold in operating timeshare frauds that the gang’s operators posed as U.S. Treasury Department officials.

The scam was described by the department’s Office of Foreign Assets Control, or OFAC. The agency has been chasing fraudsters using call centers controlled by the Jalisco drug cartel to promote fake offers to buy Americans’ timeshare properties. They have scammed at least 600 Americans out of about $40 million, officials said.

But they also began contacting people claiming to be employees of OFAC itself, and offering to free up funds purportedly frozen by the U.S. agency, which combats illicit funds and money laundering.

Officials have said the scam focused on Puerto Vallarta, in Jalisco state. In an alert issued in March, the FBI said sellers were contacted via email by scammers who said they had a buyer lined up, but the seller needed to pay taxes or other fees before the deal could go through.