How Sinaloa Cartel Influences Chicago's Violence

Months before Joaquin Guzman was captured, Steve Inskeep talked to John Lippert of Bloomberg Markets magazine, about Guzman. (The conversation initially aired on Sept. 17, 2013 on Morning Edition.)

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DAVID GREENE, HOST:

After one wild chase, Mexico's military over the weekend arrested one of their country's most powerful drug lords. Joaquin, El Chapo, Guzman was the monopoly supplier of illegal drugs in the American Midwest. Elsewhere in the program, we'll hear about El Chapo's arrest and the legal questions surrounding his future. But now a look at his empire. Bloomberg Market's journalist John Lippert wrote about it and spoke to our colleague Steve Inskeep on the program last fall.

STEVE INSKEEP, BYLINE: John Lippert told us that what surprised him is the way El Chapo gained such dominance over the American Midwest.

JOHN LIPPERT: In 2006, he was recorded by the Mexican authorities saying I want to make Chicago my home port, and he's done that.

INSKEEP: How does his business work?

LIPPERT: It used to be the case that he was a brilliant smuggler, but then he would be on the Texas side of the border with his drugs and then he would have to find buyers. Now, he's saying, no, that's OK. My people will bring the drugs to Chicago. We will break down shipments and not only serve the Chicago market but we will also distribute it to all the towns like Minneapolis and Indianapolis and Toledo. All the Midwest towns around here are getting supplied. I mean, he's got warehouses. He's got people. We talk about drug smuggling, but another big chunk of the operation is you got to get the money back to Mexico, so there's a whole separate, sort of, reverse supply chain to get all the money back to Mexico. So, that he doesn't compete at each stage of that supply chain the way he used to. Now, he is the supply chain.

INSKEEP: Well, you are using the same kinds of terms we would use in describing a large corporation. We're talking here about distributors, about wholesalers, about street corner retailers, and he's the guy who is supplying everybody, that everybody must depend on. Is that what you're saying?

LIPPERT: And another interesting element of that is that he chose Chicago for exactly the same reason that, you know, Montgomery Ward flourished in Chicago, or Sears flourished in Chicago, because it's a crossroads of the Midwest. It always has been. It's a transportation hub.

INSKEEP: What practical effect has that had on the streets of Chicago?

LIPPERT: He's a monopoly supplier now. So, it used to be when the mega-gangs had discipline and when they were sending their people down to the border to buy drugs, they had a choice of suppliers. But Guzman himself is saying, OK, here's what I'm willing to charge for heroin in the city of Chicago. So, he's personally dictating, and there's less of an economic pie because the monopoly supplier is taking off a bigger share. And so there's just more competition. There's more pressure. If you want to expand your sales, you have to expand your street corners, you have to physically take street corners, which is a violent act. So, the fact that there is less discipline among these gangs and less money for them to make, fuels the competition between them and fuels the violence.

INSKEEP: Is it correct then to say that over the last many years, as I've heard stories about violence in Juarez, Mexico, or a higher murder rate from time to time in Chicago, I have been actually hearing the story of Joaquin, El Chapo, Guzman without ever knowing his name until now?

LIPPERT: I think that's right. The way the DEA are talking about it is that this may be unprecedented in the history of crime. And they say, OK, well, we all grew up talking about the mafia and everything like that and they just flat out say, you know, Al Capone or the mafia that we grew up talking about can't begin to do what these guys are doing. It's different.

INSKEEP: Thanks very much.

LIPPERT: Thank you.

GREENE: That's a rebroadcast of Steve's conversation with John Lippert from Bloomberg Markets magazine. They were talking about Joaquin, El Chapo, Guzman, a drug lord arrested in Mexico over the weekend. And we should mention Steve is on his way to Mexico soon. He will be reporting on life in communities along the U.S.-Mexican border and we'll look forward to hearing his reporting on the program soon. This is NPR News.

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