When vigilante militiamen stormed this farming town in western Mexico this month, a killer for the Knights Templar drug cartel pushed out of a house with a bazooka. But with training from ex-soldiers, the militiamen rapidly shot the gangster dead before he could unleash the rocket and he fell onto the dirt street, his lifeless finger touching the edge of the trigger. The vigilantes now defend the rim of the town, bearing Kalashnikovs behind barricades of sandbags, watching for Knights Templar snipers. They soon hope to advance into the nearby town of Apatzingan, the bastion of the Knights Templar, to deliver the deathblow to their enemy.

Led by farmers, shopkeepers, doctors and taxi-drivers, vigilante militias have turned the tables on one of Mexico’s most ruthless cartels, the Knights Templar, a gang that names itself after medieval crusaders to appear brave and righteous even as it traffics crystal meth. The offensive has changed the face of the country’s drug war inspiring optimism that cartels who rule by terror can be defeated when the people rise up against them. But the vigilantes’ success has also sparked fear of spreading justice at the barrel of a gun.

Known as autodefensas – or self defense squads — the vigilantes first emerged in indigenous villages in Michoacan state in 2011. But in recent months, they have mushroomed to have thousands of combatants across Michoacan and neighboring Guerrero state, advancing into towns, villages and ranches, where they are shooting dead cartel operatives, destroying narco symbols and declaring the communities liberated. Thousands of police and soldiers have been sent to Michoacan but they have neither disarmed the militias nor stopped their advance. Instead, the government has tried to legalize the militias while soldiers have led a new offensive against the cartel, arresting more than 150 of its operatives, including a leader, Dionisio Loya Plancarte, alias “The Uncle,” who was caught hiding in a closet on Monday.

The meteoric rise of the vigilantes owes much to the way the Knights Templar preyed on the communities they controlled, extorting, kidnapping and raping. While still a major exporter of crystal meth to the United States, the Knights had diversified its crime portfolio, shaking down businesses large and small. In the “liberated” towns, residents reveal how far the Knights dominated their lives. Farmers of avocados and limes had to pay a quota for every kilo they produced; corn growers were forced to sell their maize cheaply to the criminals, who sold it at double the price to tortilla makers; people who owed money had to hand their entire homes to the cartel, who brought notaries to sign over the titles. Those who stood against the gangsters risked being tortured, sometimes publicly, or decapitated.

“They had our lives completely controlled. They knew about everything we did and we were always scared of being beaten or murdered,” says Salvador Esquivel, a commander in the vigilantes helping defend Paracuaro. Last year, Esquivel’s own brother, a state legislator, was hacked to death by alleged Knights Templar bearing machetes. “This is a fight for justice, because the government has never given that to us,” Esquivel says.

The Knights Templar also tried to control the community’s spiritual life. Its founder Nazario Moreno, alias “The Maddest One,” wrote a book of quasi-religious ideas called Mis Pensamientos, or my thoughts, which includes a mix of self help Christianity and peasant revolutionary politics. “It is better to be a master of one peso than a slave of two,” he wrote in one passage. Federal police reportedly killed Moreno in a gun-battle in Apatzingan in 2010, although Knights Templar operatives made away with his body. Following the alleged death, the gangsters began to venerate Moreno as a saint, painting images of him in medieval garb, a red cross on his chest. As the vigilantes have advanced into towns, they have smashed up shrines to Moreno and unearthed statues of him decorated in gold and diamonds. The vigilantes have also taken control of the homes of Knights Templar leaders, which boast luxury swimming pools and bars, in contrast to the shacks of many poor day laborers living nearby.

The administration of Mexican President Enrique Pena Nieto has taken a mixed position on the vigilantes. Last year, federal police arrested dozens of militiamen in Michoacan, accusing them of working for the rival Jalisco New Generation Cartel. The vigilantes deny any cartel backing and have been lobbying for their companions’ release. On Jan. 14, soldiers attempted to disarm some vigilantes in the town of Actunez, provoking a shooting that killed several people. Since then, soldiers and federal police have taken no action against the militias and in many areas roadblocks manned by vigilantes stand meters away from roadblocks manned by police.

On Monday, the government signed an agreement with one of the most prominent vigilante leaders to incorporate the militias into a Rural Defense Corps, under the command of the army. The rural corps has existed for decades as a part time force supporting security in the countryside. “Those that have the vocation to participate in security matters, which is the principle that the self defense squads have claimed, should do it within institutions that are established by law,” Pena Nieto told reporters.

However, there are doubts about whether such an agreement will be legal or functional.

New vigilante cells are emerging in towns and villages across Michoacan and Guerrero every few days and there is little control of who lines up in the ranks. Jose Miguel Vivanco, Americas director of Human Rights Watch, warned of the spiraling growth of paramilitaries akin to those in Colombia who trafficked drugs and carried out kidnappings. “It is very easy to fall into this type of model where a Frankenstein, with no government controls, is created,” Vivanco says.

In the central square of Paracuaro, a vigilante leader who goes by the nom de guerre Comandante Cinco confessed to shooting dead several alleged gangsters. “We have to kill them. If they captured me, do you think they would let me live?” says the militiaman, who sported a bulletproof vest, assault rifle and a baseball cap stitched with his comandante name.

The vigilante leader explained that they are financed by donations from residents and businessmen, who prefer to support the vigilantes than pay protection to the cartel’s toughs. Some of their weapons are bought in the United States and smuggled south, he said, and others have been seized from the Knights Templar. Many of the farmers learned to shoot in hunting clubs, he says, while the vigilantes also trained with some members who had served in the Mexican army.

However, the vigilante commander says he would happily lay down his gun and return home once the Knights Templar are definitively destroyed. “I never imagined I would be fighting like this. The situation forced me to do it,” he says. “I have ranches with limes that I have to work on. But the Knights Templar won’t let me live in peace.”

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