VZCZCXRO9031
PP RUEHCD RUEHGD RUEHHO RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHMC #0158/01 1271910
ZNR UUUUU ZZH
P 071910Z MAY 09
FM AMCONSUL MONTERREY
TO RUEHC/SECSTATE WASHDC PRIORITY 3664
INFO RUEHME/AMEMBASSY MEXICO PRIORITY 4721
RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
RHMFIUU/DEPT OF JUSTICE WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEABND/DEA HQS WASHDC
RUPEUSA/HQ NORTHCOM
RUEHMC/AMCONSUL MONTERREY 9237

UNCLAS SECTION 01 OF 02 MONTERREY 000158 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: SNAR SOCI PGOV KCOR ECON MX
SUBJECT: BUSINESS LEADERS SUPPORT MEXICAN MILITARY AND MERIDA 
INITIATIVE; DEEPER REFORMS STILL NEEDED 
 
MONTERREY 00000158  001.2 OF 002 
 
 
¶1.        (SBU)  Summary.  ON April 23 Post convened a group of 
respected business leaders for an in-depth discussion of 
Mexico's progress on security, the role of the military and 
their perspective on the Merida Initiative.   The business 
leaders thought that Mexico could be at a tipping point in terms 
of its ability to defeat the drug cartels and develop clean 
institutions.  Our interlocutors fully supported President 
Calderon's use of the military to fight the cartels, but they 
saw little trust in other public institutions, particularly the 
state and municipal police.  Without effective state and local 
law enforcement, one businessman lamented, it would be difficult 
for the GOM to make progress in the medium term even though it 
is now registering short term success.  They also strongly 
supported the Merida Initiative, and hoped that the USG would 
extend it and expand contemplated arms trafficking reduction 
efforts, intelligence sharing and police training.  Finally, 
these leaders did see some hopeful signs that the Mexican public 
supports fighting the cartels, citing the increased numbers of 
security complaints (denuncias) being filed.  End Summary. 
 
 
 
Mexico at a Tipping Point vis-a-vis Corruption 
 
 
 
¶2.       (SBU)  Several businessmen lamented how just a few 
years ago Monterrey was a very safe city, but now its citizens 
face a large increase in drug usage, kidnappings and extortion, 
petty crime, and highway cargo theft.  Manual Zambrano, former 
head of the business association Coparmex, noted that some 
businessmen have permanently left Monterrey for the U.S. because 
they were threatened or are simply scared.  Julio Cesar Cepeda, 
president of the business association CANACO, complained that 
authorities do not bother to punish petty crime, creating a 
sense of impunity.  Businesses are incurring substantial costs 
because of the deterioration of the security environment.  David 
Eaton of Kansas City Southern Railroad (KCS) said that 25% of 
their salary costs are for security for the trains, but it still 
isn't enough.  In another meeting, John Castany, president of 
the Nuevo Leon Maquila Association, commented that businesses 
are not leaving due to security concerns, but firms may not 
decide to locate to Mexico if the decision is close between 
Mexico and another country. 
 
 
 
¶3.       (SBU)  Eaton argued (and the others agreed) that Mexico 
is at a tipping point that will decide if the Government of 
Mexico can effectively take on the drug cartels.  Eaton warned 
that if Mexico (and the U.S.) waste time, the Mexican people 
could lose confidence in their government, the government could 
become so corrupt that it will not fight the drug cartels, and 
it would be extremely hard after that to rebuild state 
institutions. 
 
 
 
¶4.       (SBU)  Our business interlocutors believe that the key 
issue is corruption and the deterioration of Mexican public 
institutions.   Carlos Jauregui, head of the Nuevo Leon Citizens 
Security Advisory Committee, described a feeling of insecurity. 
For instance, if a person's relative is kidnapped, their family 
usually does not report the crime since they lack confidence in 
the police.  Similarly, Eaton commented that if KCS trains are 
vandalized in outlying towns, KCS receives little help from the 
local police, either because they are not capable (with little 
equipment) or they are corrupt.  Several businessmen commented 
how the police were still very poorly paid, making them 
susceptible to corruption.  Our contacts agreed that police 
reforms have not been effective, although in some areas, such as 
in the wealthy suburb of San Pedro, the municipal police are far 
better than in other metropolitan areas.  Jauregui added that 
judicial reform is essential to improving the security 
situation.  However, according to Jauregui the reforms such as 
oral trials are a sham, because in that particular case the 
government has no clear plan, the reform covers only a few 
offenses, and they have been poorly implemented. 
 
 
 
¶5.       (SBU)  Despite these problems, the business leaders did 
not think that the Mexican public has `woken up' to the problem. 
 Several commented that in other countries it took a spectacular 
assassination or other terrible event to galvanize the people 
into action, and this has not yet happened in Mexico.  They 
 
MONTERREY 00000158  002.2 OF 002 
 
 
discussed several other regions, such as Sicily or Colombia, 
where a dramatic event turned the tide of public opinion so that 
the average person became interested in working to improve the 
situation. 
 
 
 
Support for the Military; When Can the Police Step Up? 
 
 
 
¶6.       (SBU)  Echoing comments that post has heard many times, 
the businessmen fully supported President Calderon's use of the 
Mexican military to fight the cartels.  Cepeda emphasized that 
the people trust the military, while Eaton went farther, arguing 
that the military had prevented a possible failed Mexican state 
by calming the situation and restoring order in violent areas. 
In some places the military is the only effective arm of the 
government.  For example, in the northern rural sections of 
Nuevo Leon the drug cartels have intimidated or compromised the 
mayors and police, so only the military will confront the 
cartels.  However, while they agreed that the continued use of 
the military to police Mexico is not sustainable, our contacts 
did not see any plan to prepare state and local police to take 
up the fight if and when the soldiers return to their barracks. 
 
 
 
 
The Merida Initiative is a Great Start but Mexico Needs More Help 
 
 
 
¶7.       (SBU)  Our business contacts were unanimous in their 
praise of the Merida Initiative, but called for even more help. 
PAN Nuevo Leon deputy Francisco Cantu argued that Mexico needs 
more money, intelligence sharing, and effective means to root 
out corruption.  Zambrano commented that controlling arms 
trafficking was critical to restricting the means of the cartels 
to attack the GOM.  All thought that the Merida Initiative will 
take much longer than three years to be effective.  Finally, 
since the Mexican police must eventually take over the army's 
role, they saw the importance of helping to strengthen the state 
and local police, including higher pay to reduce the incentive 
for corruption. 
 
 
 
Several Hopeful Signs 
 
 
 
¶8.       (SBU)  Despite the general gloom, the business leaders 
did see several hopeful signs.  They pointed to the success of 
the Mexican military in arresting a number of important cartel 
leaders.  In addition, they were very positive in the potential 
of the Merida Initiative.  PAN deputy Cantu thought that there 
had been slow advances in intelligence at the federal level. 
Business leader Cepeda stated that there have been an increased 
number of public complaints filed with the Mexican Federal 
Police (PFP) and the Mexican military, indicating the people 
will denounce criminals if they have confidence in the 
institutions. 
 
 
 
¶9.       (SBU)  Comment.  Based on this conversation and many 
others like it, in the Monterrey region there is strong public 
support for the Mexican military and a belief that the Merida 
Initiative is the right track.  We agree that it is crucial to 
strengthen Mexican law enforcement and judicial institutions 
because the military cannot fight this battle indefinitely. 
Reliable state and municipal police forces are indispensible in 
the long run to win the battle against corruption and narcotics 
traffickers.  End Comment. 
WILLIAMSON