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In April 2015, Honduran police began investigating reports that the Mara Salvatrucha (MS13) had ordered a ban on woman dying their hair blonde in the market places of Comayaguela, which along with capital city Tegucigalpa makes up Honduras’ Central District.

These fears appeared to be confirmed a month later, when alleged gang members boarded a bus, beat a woman and cut off her blonde hair. The next day, another blonde-haired woman was stabbed in the neck.

The prohibition was reportedly a quick and dirty way for the MS13 to identify the girlfriends and female members of a rival gang known as the Chirizos, who were using the women to collect extortion payments from local businesses.

This article is part of an ongoing series looking at gangs in Honduras. It is the result of a collaboration between InSight Crime and the Asociación para una Sociedad más Justa en Honduras. See the full version of InSight Crime’s report on Honduras gangs here (pdf). Read the report in Spanish here (pdf).

Panic quickly ensued, as women reportedly rushed to change the color of their hair. Although the ban was supposedly only aimed at women in Comayaguela, a confidential source told InSight Crime that women in San Pedro Sula, located more than 150 miles away, had also changed their hair color as a precautionary measure. Reports from El Salvador included similar complaints by women scrambling to make cosmetic changes.

Both local and foreign media quickly grabbed hold of the story, issuing headlines such as “Gang Members Prohibit Female Merchants From Dying Hair” and beginning their articles with dramatic opening sentences like, “MS13 gang members are Attacking Women in the Streets of Honduras for Dying Their Hair blonde.”

The message was clear: the gangs wanted total control, even over how women wore their hair.

But that was the simplistic version. The more complex story behind the prohibition touches on issues of protection, criminal economies and public relations. Prohibiting blond haired women reflected a reality: those living and working in that area felt vulnerable to extortion by the Chirizos. By decree, the MS13 was protecting the locals from these predators. What’s more, the MS13 held the moral high ground, since it does not extort in the areas where it operates.

In the end, the MS13 lost the international public relations battle, but it won the battle that mattered — inside Comayaguela.

To be sure, the media’s portrayal of this episode reflects the general lack of understanding of how the MS13 differs from its rivals. As this case illustrates, these differences are not merely academic: they impact the gangs’ relationship with local communities. As we will see, they also affect their potential ability to infiltrate security forces and their prospects for expansion into the international drug trafficking world.

Extortion – A Different Approach

Perhaps the biggest differentiator between the MS13 and its rivals in Honduras is related to its business model. All gangs make much, if not most, of their money via extortion. It is the most expedient means of gathering large and regular amounts of cash.

Much of this money comes from large-scale extortion of the public transportation sector and taxi cooperatives. The amount garnered from these organized, extortion enterprises can be significant. InSight Crime estimates that a gang in Tegucigalpa can net as much as $2.5 million from just this extortion scheme. (See estimate below)

Estimated Extortion Earnings in Tegucigalpa from Transport Sector

Source: InSight Crime estimates

However, gangs also extort shopkeepers, mechanics, street venders and other small businesses. The contrast between the MS13 and its rivals is that the MS13 has made it a policy not to extort these small businesses in their areas of operation. The difference, as noted above, is fundamental, especially as it relates to its relationship with the local community where the gang can be seen as not just as a benevolent criminal operator but also a source of protection.

The MS13 often takes this protection scheme to a deeper level. In some areas that our researchers visited, the gang has become the go-to arbiter for domestic and neighbor-to-neighbor conflicts, according to police and community association leaders in these areas. Domestic abuse — whether a parent beating their child, or spousal abuse — is not tolerated, they said. In the municipality of Tela, for instance, the MS13 will reportedly give a husband a warning after the first instance of abuse, a beating after the second instance, and banish him from the community after the third.

The focus on macro-level extortion also allows MS13 to work in the transportation business. Much like a bank, MS13 will take percentages and eventually the whole of any transportation business that does not pay what it is owed. This policy has allowed the group to become part or full owners of numerous bus and taxi cooperatives around the country. Once they gain ownership, MS13 can keep a close eye on all the cooperatives’ income streams, and then adjust their extortion rates accordingly. There are also ancillary benefits, such as employment or “ghost jobs” for relatives and friends in these cooperatives.

The experiences of owning and managing transport companies have forced the gang to create more sophisticated financial units within its ranks. Although they have not, as yet, divided their structure into financial and military divisions, some authorities suggested that the MS13 has sent people to university to study finance and law. Extortion and the gang’s increasing financial holdings have also led the MS13 to become more entrepreneurial in nature. Members have taken to calling themselves “La Empresa” or “The Business,” something that may be closer and closer to reality considering how the gang is trying to move up the drug trafficking ranks.

From Petty Drug Peddling to Wholesalers

The MS13’s decision to avoid extorting its local community comes from its rising interest and control of local drug peddling and wholesale distribution of illegal drugs.

The MS13 has long focused on local drug peddling, which has distinguished it from its rivals for several years now. During that time period, the MS13 has created an efficient means of dispensing drugs in the communities where it operates. This involves establishing discreet meeting points, running security rings, and maintaining limited exposure should they be robbed or assaulted by a rival, or ambushed by the security forces. It is impossible to calculate how much revenue this activity brings in for the MS13, but it is significant.

Lately, the gang has also become wholesale distributors in some parts of the country. In at least two places our researchers visited recently, the gang has taken more control of the wholesale drug market, authorities said. In Tela, for example, the gang has a monopoly on drug sales. This could entail significant revenues for the MS13, given the amount of tourism in Tela. Police intelligence also told our researchers that the MS13 owns a hotel in the area. Other authorities say the gang also owns restaurants and bars. Neither claim could be independently verified.

The gang has also established control over the wholesale drug market in more urban areas. The most notable example in this regard is San Miguel, Tegucigalpa. This area was long controlled by a local drug trafficker, Teresa de Jesus Cruz Garcia, a.k.a. “Mama Tere.” After she died in 2007, some of her family members allegedly continued her trade. But after her nephew was arrested for drug trafficking and money laundering in 2013, the power vacuum opened an opportunity for MS13, who allegedly killed him in prison and drove one of his main associates out of the area. Police intelligence told our researchers that MS13 now shares wholesale distribution with what is left of the Mama Tere crew in the area.

Download full report – pdf

The MS13’s move towards controlling the wholesale market is significant for various reasons. Wholesale control would mean a rise in revenue for the organization, which could help explain its possible entry into the tourism economy in Tela. The revenue would also give the gang greater ability to penetrate higher echelons of the security forces. As noted earlier, members of the public transport sector suspect that police and possibly officials may be involved in these schemes, although they cannot offer any proof of this collusion.

The MS13 also appear to have connections within the police that help it in various ways, three high level police told our researchers. One of these high level police pointed to the case of First Class Officer Alonzo Vasquez Carrillo who was arrested in February for the murder of a prominent businessman, Mario Verdial. Vasquez Carrillo, police investigators said, worked with the gang by providing it with information about security forces’ operations and assisting in enforcement, as was evident in the murder of Verdial.

We believe that the MS13’s modus operandi makes it easier for the gang to establish relations with security forces. The MS13’s rules forbid it from entering in direct confrontation with security forces if they are coming to arrest members. In addition, the group’s avoidance of extortion in its areas of influence means that it has fewer confrontations with local residents and security forces. What’s more, its main criminal activity, drug peddling, is less predatory for local residents and security forces alike.

More control of the wholesale market would also give MS13 greater capacity to wield influence in political circles. This may also already be happening. Police intelligence told our researchers that the MS13 has had significant influence over the mayors of at least two other cities. The gang does not yet appear to be financing campaigns or controlling government contracts, but this would be a logical next step should it gain control of more revenue and political influence.

Not Yet an International Player

More control over the wholesale drug market could also mean that the MS13 is making more contact with large, international transport organizations. These contacts may stretch back years and may include doing favors for the international drug transport groups. However, wholesale distribution would be a significant step forward for the gangs in terms of their sophistication, and would illustrate to drug transport groups — be they Honduran, Guatemalan, Mexican or Colombian — that the MS13 may have enough political and military muscle to begin storing and possibly moving large quantities of drugs across the country.

There is some evidence to suggest that this may be happening already. The details are still sketchy, but a separate investigation by InSight Crime into El Salvador’s gangs suggests that at least part of the MS13 leadership in that country may be trying to enter the international wholesale market, and is using Honduras as a meeting place and operational headquarters. The reasons for the MS13 to run such an operation from El Salvador are complex. Suffice to say that El Salvador is the MS13’s spiritual headquarters, the place where the gang draws part of its name, as well as many of its rituals and rules.

The decision to move into the international drug transport market is not necessarily one that is supported by the entire gang’s leadership in El Salvador. InSight Crime believes there is a split amongst some of the country’s most notable MS13 leaders. At least one of these leaders has been establishing international contacts and fortifying his network over the past several years, according to police intelligence and other sources close to the gang in El Salvador. That network includes satellite operators in Honduras where the MS13 has access to high-powered weaponry and to the international operators moving large amounts of drugs.

It’s not known how far this effort has taken this MS13 leader and his Honduran counterparts. There are certainly other MS13 gang leaders who have made contact with international drug transport groups, and may be moving small quantities of drugs internationally. However, the drug trafficking oranizations have not yet made any concerted effort to use the gang network as the principle means by which drugs are transported. Gangs, for the most part, are considered highly untrustworthy and extremely vulnerable business partners.

The possible move into the international transport business also coincides with a massive power vacuum in Honduras. Some of the country’s foremost international transporters have been captured and extradited in steady succession over the last two years. A major Mexican international broker, Cesar Gastelum, who operated from San Pedro Sula for years, was also captured recently in Mexico. This vacuum has opened the way for the MS13 to explore business possibilities with Colombian and Mexican traffickers, Honduran authorities told our researchers. The extent of these discussions and connections is not clear and there has yet to be a case in which an MS13 member has been captured moving illegal drugs across multiple borders using the gang’s network.