VZCZCXRO3690
RR RUEHCD RUEHHO RUEHMC RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHGD #0612/01 3581547
ZNR UUUUU ZZH
R 231547Z DEC 08
FM AMCONSUL GUADALAJARA
TO RUEHC/SECSTATE WASHDC 1159
INFO RUEHME/AMEMBASSY MEXICO 2343
RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
RHMFIUU/DEPT OF JUSTICE WASHINGTON DC
RUEABND/DEA HQ WASHDC
RUEHGD/AMCONSUL GUADALAJARA 5215

UNCLAS SECTION 01 OF 03 GUADALAJARA 000612 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: SNAR PREL EIND KJUS MX
SUBJECT: CHEMICAL CITY:  GUADALAJARA, JALISCO, AND THE METH TRADE 
 
REF: A) Guadalajara 236;  B)  Mexico 3072 
 
GUADALAJAR 00000612  001.2 OF 003 
 
 
¶1. (SBU)   Summary: According to 2007 DEA estimates, 80 percent 
of the methamphetamine used in the United States originates from 
laboratories operated by Mexican-based syndicates on both sides 
of the border.  Production is especially high in and around the 
city of Guadalajara due to the confluence of geography, 
availability of materials, adequate infrastructure, and 
scientific expertise.  Recent success by Mexican authorities in 
raiding large labs and seizing shipments of pseudoephedrine has 
caused the syndicates to modify some of their methods.  There 
has been a shift towards a decentralized model involving many 
smaller labs, as well as a move toward meth production using 
other precursor chemicals.  Ending Guadalajara's status as 
Mexico's drug chemical capital will require a sustained 
long-term effort.  End Summary. 
 
-------------------------------- 
Comparative Advantages 
-------------------------------- 
 
¶2.  (U)  Jalisco is a major hub of methamphetamine production in 
Mexico due to the confluence of four key characteristics: 
geography, availability of materials, adequate infrastructure, 
and brain power.  All four factors come together in and near the 
city of Guadalajara. 
 
-------------- 
Geography 
-------------- 
 
¶3.  (U)  Jalisco's geography is important for two main reasons. 
First, the state border is only 120km away from the major 
Pacific port of Manzanillo in the state of Colima.  The large 
volume of containers passing through the port makes intensive 
screening difficult for the authorities and creates a higher 
success rate for illicit shipments of pseudoephedrine and other 
chemicals. Second, Jalisco has large swaths of isolated rural 
land where drug syndicates can set up labs and act with relative 
impunity. The sprawling Guadalajara metro area also offers many 
possibilities for concealing a lab in warehouses or older 
industrial buildings. Getting the smuggled chemicals from the 
port to lab locations is made easier because Colima and Jalisco 
are connected by a major highway.  Guadalajara International 
Airport has Mexico's second busiest air cargo terminal and has 
also been used for drug and precursor chemical smuggling.  Most 
recently, an illegal shipment of 1.5 tons of pseudoephedrine 
tablets was seized by authorities at the airport on October 4. 
A lack of resources and modern equipment makes thorough Customs 
screening of air cargo shipments a real challenge. 
 
------------------------------ 
Availability of Materials 
------------------------------ 
 
¶4.  (SBU)  Besides psuedoephedrine, there are a number of other 
important materials and chemicals vital in the production of 
methamphetamine.  These materials are readily available in 
Guadalajara, the capital cityQf Jalisco, and are used for 
legitimate purposes involving other industrial chemical 
products.  The city has a thriving pharmaceutical industry with 
companies such as Farmacias Guadalajara (FRAGUA) growing rapidly 
and expanding their retail presence nationwide.  However, 
because the acquisition of many pharmaceutical ingredients is 
still relatively unregulated, drug trafficking organizations can 
take advantage of the legitimate market and divert chemicals for 
illicit purposes. 
 
----------------------------------- 
The Devil Wears a Lab Coat 
----------------------------------- 
 
¶5.  (SBU)  One of the most notorious exaQles of illegal 
chemical diversions concerns Farmaceuticos Collins (Collins 
Pharmaceuticals) - a drug maker and distributor based in the 
Guadalajara suburb of Zapopan.  This company has a sleek, modern 
headquarters, 400 employees, and socially prominent owners.  The 
dark side of Collins was revealed on October 2, 2008 when the 
Office of Foreign Assets Control (OFAC) formally cited the 
company, several affiliated enterprises, and their directors 
under the 1999 Foreign Narcotics Kingpin Designation Act for 
diverting substantial quantities of methamphetamine precursors 
to the Amezcua Contreras drug trafficking organization.  The 
announcement sent shock waves through the local business 
community, and underlined for the public the fact that seemingly 
"respectable" businesses could be closely allied with the drug 
cartels. 
 
--------------------------------------------- ------- 
Brain Power - It's No Job for Plain Thugs 
 
GUADALAJAR 00000612  002.2 OF 003 
 
 
--------------------------------------------- ------- 
 
¶6.  (SBU)  The production of methamphetamine through chemical 
reactions using toxic substances requires workers with knowledge 
of chemistry and industrial processes.  The usual cartel 
enforcers with gold chains and Kalashnikovs are not up to the 
task, but Guadalajara has a wealth of young chemists and 
engineers that can be recruited by drug syndicates to staff 
methamphetamine labs.  The public university system overproduces 
these types of professionals into a flat job market where they 
can expect to make only $1000-$1500 USD/month starting salary, 
if they can get a job at all.  It's therefore no surprise that 
the drug cartels can easily enlist such professionals by paying 
them much more than legitimate companies.  Nor are all the 
chemists Mexican; in 2006 a former American chemistry professor 
was arrested for running a meth lab only six blocks from the 
Consulate! 
 
-------------- 
Safety Last 
-------------- 
 
¶7.  (SBU)  While professional chemists may be hired to set up 
the labs, day-to-day operations are usually handled by less 
skilled individuals known as "cooks," because they are told to 
follow the "recipe" written by the chemist.  Their lack of 
expertise results in a poor safety record.  Many of the largest 
lab discoveries in recent years have resulted not from police 
intelligence work, but from fires and explosions in the 
aftermath of industrial accidents.  Frequently, the local fire 
department is the first public entity to become aware of the 
presence of a meth lab in a neighborhood.  Emissions control is 
often lax; and some labs have been discovered after worried 
neighbors reported suspicious chemical odors to the police or 
fire departments.  In a city that suffered hundreds of 
casualties in 1992 after gasoline leaked into the municipal 
sewer system and exploded, the local population is perhaps more 
sensitive to unexplained chemical smells than are inhabitants of 
other cities. 
 
---------------------------- 
Meth Producers Adapt 
---------------------------- 
 
¶8.  (SBU)  In the past year there have been numerous Mexican law 
enforcement success stories involving seizures of 
pseudoephedrine at ports as well as raids of large labs leading 
to the confiscation of huge amounts of money and product.  This 
fact, combined with the Mexican government's increased 
regulation of legitimate sources of pseudoephedrine has forced 
meth producers to adapt their methods.  At the present time, the 
GOM is not issuing new permits for the importation of ephedrine 
and pseudoephedrine except in small amounts for medical 
research.  These new measures, combined with actions against 
suspect pharmaceutical companies like Collins have forced the 
traffickers to switch from the diversion of legitimate 
pseudoephedrine shipments to smuggling the chemicals illegally 
into Mexico - a riskier proposition. 
 
--------------------- 
Smaller is Better 
--------------------- 
 
¶9.  (SBU)  Although it is true that a large methamphetamine lab 
will be able to produce more finished product and therefore more 
profit, it is also true that if such a lab goes out of business 
it takes out a large chunk of the syndicate's profit margin.  In 
the current atmosphere of increased vigilance by the 
authorities, the cartels have begun shifting to a decentralized 
network of smaller labs for production, according to law 
enforcement sources.  Although profits won't be as high due to 
increased overhead costs, there is also less chance of 
devastating financial risk caused by shutting down a major lab. 
 
----------------------------- 
A "Pseudo Problem" 
----------------------------- 
 
¶10.  (SBU)  Tighter regulation of pseudoephedrine by Mexican 
authorities as well as increased seizures of large smuggled 
international shipments has created a major problem for the drug 
syndicates: they don't have enough of the main ingredient in 
methamphetamine to meet demand.  So instead of producing 
methamphetamine by reducing psuedoephedrine in a chemical 
process, they appear to be moving towards an alternative method 
known as the "Dirty method" or "P2P method", which was used by 
California biker gangs in the 1970s and 80s.  This involves 
production through the reduction of phenylacetone and 
methylamine, which are more readily available in Mexico.  This 
 
GUADALAJAR 00000612  003.2 OF 003 
 
 
method of production is not ideal because it involves a more 
complex chemical reaction which is more difficult to control, 
the resulting product is not as potent, it produces less 
finished product per batch, and the process is more odorous and 
therefore more difficult to conceal.  It does, however, allow 
the meth-makers to cope with reduced supplies of 
pseudoephedrine. 
 
--------------------------------------------- -------------- 
--------------- 
Comment:  A Long-Term Struggle with an Insidious Industry 
--------------------------------------------- -------------- 
--------------- 
 
¶11.  (SBU)  While Guadalajara's prominent position in the 
methamphetamine trade is unlikely to change soon, recent efforts 
by Mexican authorities have clearly complicated the way the drug 
syndicates have traditionally operated.  This is especially true 
in regard to the regulation of certain precursor chemicals. 
OFAC's actions against Collins Pharmaceuticals also sent a clear 
signal that prominent and seemingly respectable businesses 
allied with the traffickers were not outside the reach of the 
law.  Post has extensively publicized the OFAC designations and 
was gratified to note that few voices were raised in defense of 
the embattled company.  We continue to work with state and local 
police forces to enhance their professionalism and capability to 
detect meth labs and shipments of illegal precursor chemicals. 
The Merida Initiative will permit an increase in these efforts, 
as well as improved equipment and training for Mexican Customs 
to exercise a more rigorous control over local seaports and air 
cargo terminals. 
RAMOTOWSKI