[This post was updated on November 20, 2015 at 11:30am ET to correct and clarify some of the information presented.] For some time now I have been writing about the corruption in El Paso. One of the questions I most often get is where did the corruption originate from? Is it a Mexican thing invariable pops up regularly. El Paso politicians are very adept at blaming Cd. Juárez and reinventing itself as the need arises. This is the reason the politicians continue to push forth the notion that “it’s all good El Paso” and always striving to be some other city, except El Paso. The truth is that El Paso is corrupt. It is part of the city’s psyche since it became a US city.
As soon as the US-Mexico border was established, making El Paso a US city, the city’s forefathers started to capitalize on their proximity to the border. They didn’t focus on creating a sustaining economy based around the law, but instead they built an economy based on circumventing the laws. This economy, the shadow economy, is the true financial driver for the city.
During the Mexican Revolution, it was El Paso that was the gateway for weapons to both sides of the conflict. A whole industry was created around the Mexican Revolution catering to war. The shadow entrepreneurs provided weapons, food stuffs and all the supplies needed to keep the armies fighting. They even built a tourist industry giving tourists a safe vantage point from where to witness death and mayhem. In return for all of this, the war profiteers received Mexican gold.
The infrastructure created by the shadow economy evolved as the wars subsided and other opportunities such as drugs emerged as the profit centers. The shadow economy remains intact operating in the darkness while the public economy officially makes El Paso one of the poorest cities in the nation. But is it really poor?
The evidence of the shadow economy is all around but not many residents of El Paso are aware of it. Look at the national banks that operate in El Paso, which officially is one of the poorest. Look at the bank names and compare them to the lists of banks paying fines for money laundering charges. Not thousands but millions to settle money laundering cases. Look at the number of night clubs and strip malls that seemingly emerge out of nowhere in a city that is supposedly poor. Where did the money come from to build them and where is the money that sustains them?
No one can really answer that simple question. The official economy in El Paso is centered on the government sector, yet there is seemingly ample money to build strip malls and have large banks in a city that is officially poor. To understand El Paso, you need to look at the city as a metroplex made up of two cities in two countries, Cd. Juárez and El Paso.
Although the Juárez connection can explain some of the financial activities at the banks and the commercial construction, it can only account for a portion of it. Yet much of the monetary transactions cannot be officially explained.
There is ample evidence that supports my belief that El Paso is a narco-city but it is cleverly ignored or white-washed away as a Juárez or Mexico problem. Today I am going to share two examples that point to the city’s narco connections and other business activities that for the most part are largely ignored.
The Case of the Multi-Million Dollar Business Very Few Knew Existed in El Paso
Ask almost anyone in El Paso what the largest private businesses are in the city and you are likely to get an answer that includes Western Refinery or Helen of Troy. These companies, and the other ones that are frequently mentioned as El Paso’s largest companies, have one thing in common, visible business operations that show how they make money.
In other words, the millions of dollars they handle can be easily explained by looking at their fiscal operations, like buildings or products. For the most part, they operate in the open where the money they transact is visible and explainable.
Then there are those businesses that seem to come out of nowhere with little tangible evidence to explain their millions. There are numerous examples you can find in El Paso but cleverly hidden from the general public through threats of lawsuits, a lackluster news media and operating under the radar.
Consider the divorce papers filed in El Paso earlier this year, although October 19, 2015 is being used by the local media, between Angélica Fuentes and Jorge Vergara. Fuentes comes from a wealthy family from Cd. Juárez and most of her family’s operations are in Mexico. Her husband, Jorge Vergara, who she is in the midst of a divorce proceeding, is also well-known in Mexico with his business operations centered in Guadalajara. Both operate in Mexico, for the most part, yet a legal battle is being waged in El Paso. The simple question is why?
Omnilife is a dietary supplement that is sold through the same multilevel marketing scheme that Herbalife uses. In Mexico, detractors of the Omnilife scheme allege that the product is sold through Latin America as health supplement to cure various ailments by taking advantage of the “curanderismo,” or witch doctor culture. As a matter of fact, Jorge Vergara Madrigal started by smuggling Herbalife into Mexico before starting Omnilife in 1989. Eventually, Angélica Fuentes, who grew up in the Cd. Juárez, El Paso metroplex became CEO of Omnilife in 2007 and married Vergara in 2008. She was born in Juárez in 1963 and graduated from UTEP.
Although the couple predominantly operates and lives in Mexico, a custody battle is being fought in El Paso, because presumably the couple’s children were born in El Paso. In addition, the couple has business and residential interests in El Paso. In Mexico, their divorce and accusations of fraud against each other have been dominating the news cycles for months.
Although the children’s nexus to El Paso seems to be the public reason for the various lawsuits being waged in the city, that does not completely answer the question as to why the lawsuit is being handled in El Paso. Consider that the “power couple” is suing each other in El Paso, although the majority of their business activities and assets are outside of the city. As a matter of fact, Fuentes renounced her US citizenship and is now a Mexican citizen. Additionally, except for a small distribution center, similar to others found in cities, like Austin, the business operations have little to nothing to do in El Paso. Likewise, their children, although born in El Paso, have lived almost entirely in Mexico. Yet, allegations of racketeering are being waged on El Paso.
There are many such cases in El Paso courts that most do not notice. Cases like this gives us a quick look into issues being played out in the courts in El Paso that not many are aware about. It is cases like this one, both civil and criminal, that shows how El Paso is central to businesses handling millions upon millions of dollars. There are also cases of individuals that disappear in El Paso only to be found later dead, in Juárez.
The Beauty Queen Running from El Paso Law Enforcement
Because much of what happens in El Paso, happens in the shadows, many of you may have missed the case of Daniel Ledezma, a former Customs and Border Protection Agent, currently serving about 9 years for drug trafficking. Ledezma was arrested in 2010. According to a related criminal complaint, in June of 2008, the DEA received information about a cocaine trafficking organization operating out of El Paso, Texas. The complaint shows that the drug traffickers out of El Paso, trafficked cocaine from Mexico to Chicago, St. Louis and Panama City, among other US cities.
The court document shows that there were various stash houses in El Paso, where cocaine was kept until it could be sent on to other US cities. The cocaine was able to cross the border, because Daniel Ledezma would facilitate the drug loads through the US-Mexico border.
The drug traffickers would coordinate the drug crossings through Ledezma’s wife, Ana Marie Hernandez.
Ana Marie Hernandez, aka “La Muñeca” was arrested in Chihuahua City on an arrest warrant issued out of El Paso, a few days ago. She pleaded guilty to drug trafficking charges in 2013 and fled to Mexico shortly after that. She is currently awaiting extradition back to the US in a Mexico City prison. She has been linked to the Carrillo Fuentes drug gang.
The gut reaction many El Pasoans have is that she was hiding out in Mexico for almost two years because of Mexican corruption. What many conveniently forget is that a US judge allowed Hernandez, a Mexican citizen, to remain free on bond before being sentenced for drug trafficking, after pleading guilty. Of course, she absconded.
How is it that no one questions the motives of a US judge for allowing the fugitive to go free prior to being sentenced only minutes from Mexico while criticizing Mexican corruption as the reason it took almost two years to arrest her? More importantly, she is awaiting extradition to the US, after being arrested by Mexican officials.
There is no question that corruption, and in many cases ineptitude, facilitates the drug trade in Mexico. However, lost in the indignation and smirks from some in El Paso, is the inconvenient truth that if El Paso wasn’t enabling drug smuggling, Juárez would not be a drug plaza for the Mexican drug cartels.
As a matter of fact, I have been laying out my thesis that argues that the drug plaza is not Juárez, but rather, El Paso on my blog.
It is easy to pretend that the many Mexicans that die in Juárez, because of the drug trade, is a Mexican problem but the reality is that El Paso has continuously played a fundamental and significant part in the drug trade.
Examples such as these are common place things that happen regularly at the city. Consider other body of evidence that exists in the brazen kidnapping of an individual, who later ended up dead in Juárez, only doors away from the El Paso Police Department Chief’s house. Remember the numerous examples of public corruption, to include multiple police officers and public officials. Regularly, in the federal courts in the city, various federal cases are tried whose fundamental crime was not committed in El Paso, but rather somewhere else, many times in Juárez.
Now ask yourself a very simple question, why is it that some of the city’s public officials are demanding that drugs be legalized?