• InSight Crime researches, analyzes, and investigates organized crime in the Americas. Find all of Steven Dudley's research here.

The Zetas have many sides. The group is at once sophisticated and ruthless, coordinating multicaravan ambushes and sending hooligans to launch a wild assault on a police station. It has gang-bangers and Special Forces snipers on its payroll. It uses a sophisticated radio system and a machete in the same operation. It has a political platform that consists of shaking down the entire political class. And it has the accounting system of a multinational company, but the uncanny ability to destroy its own sources of income.

It is, in essence, more organism than organization. For this reason, we tend to see what we want to see when we look at them, even when we analyze the same event. Take the August 25, 2011, afternoon assault on the Casino Royale in Monterrey. When eight men piled in the casino in four cars with automatic weapons, gasoline and lighters, two seasoned security analysts saw entirely different things.

To one analyst, the group was a sophisticated and well-trained shock unit. A security camera video of the attack, obtained via YouTube, showed “professionalism on display,” he told InSight Crime via email. He said the first vehicle was “the screen gun truck,” which was shielding the commander in his Mini Cooper. The “elements” enter the building swiftly, while another car blocked parallel traffic. Then the gun truck sealed off the driveway. He marveled how various lookouts and vehicles cleared space near where the operation was taking place and wondered aloud how many more lookouts there were in the area.

However, another very experienced security analyst said the Monterrey arsonists were amateurs with little ability to restrain themselves.

“These guys are a joke,” former Mexican intelligence officer Alejandro Hope* told InSight Crime at the time. “They let themselves be filmed. They left fingerprints everywhere. They were caught by the Nuevo Leon police. How sophisticated could you be if you let the Nuevo Leon police capture you?”

Amateurs or not, the results were the same: 52 dead, mostly middle-aged women who were trapped by the flames that engulfed the building in a matter of seconds. The ensuing scandal about criminal control of casinos would envelop Monterrey’s mayor, whose brother was videotaped taking a large sum of money from a casino in what appeared to be an extortion payment. But his case was just as confounding as the arson attack. Journalists and opposition politicians told InSight Crime that the payment was part of the Zetas’ extortion racket, while a local counternarcotics official said it was a separate matter and a separate extortion scheme.

From Safe Haven to Beachhead

How and why the Zetas settled in Monterrey goes a long way toward explaining who they are and how they operate. The group, as has been documented, was not always free to do what it pleased. It was part of a larger structure, one of many enforcer groups that was beholden to its boss, the Gulf Cartel. This cartel had long worked in and around Metropolitan Monterrey. (When I speak of Monterrey or the area, I am talking about Metropolitan Monterrey, which, as defined by the government statistical body INEGI, includes the municipalities Apodaca, Garcia, General Escobedo, Guadalupe, Juarez, Monterrey, San Nicolás de los Garza, San Pedro Garza Garcia, Santa Catarina, and Santiago.) The first leader of the Gulf Cartel, Juan Garcia Abrego, was captured on the outskirts of this city. But his successor, Osiel Cardenas, was less interested in Monterrey, and kept his distance. By most accounts, the Zetas did as well.

In fact, Monterrey is not the Zetas’ birthplace. It’s not where its top commanders come from. It has no particular connection to Zetas’ lore. It was not even considered a place for them to do business until recently. Monterrey has long been known more as a safe haven for large-scale drug traffickers – a place where they could send their families to be safe from the mayhem in Juarez or Tijuana or Culiacan. Amado Carrillo, the legendary “Lord of the Skies,” reportedly moved his wife and kids to San Pedro Garza Garcia, on the city’s outskirts, in the 1990s. Others did as well.

With the country’s wealthiest county per capita, San Pedro is appealing for many of the same reasons as the rest of Metropolitan Monterrey. It is close to the United States. Mexican and US companies, such as Caterpillar and Callaway Golf, have long manufactured their products in the area before taking them on the quick trip north to the various border crossings. The presence of foreign companies has meant large flows of US dollars in and out of a sophisticated and extensive banking system. And with shopping malls and nice restaurants, it has often been compared to Dallas. But it is also decidedly NOT the United States. The most obvious example is San Pedro’s former municipal president, Mauricio Fernandez Garza, who openly admitted to creating a paramilitary organization to “clean” the area of criminals.

Mr. Fernandez’s allies in this venture were the Beltran Leyva Organization (BLO), who decided to make it their home around 2008, to escape the fighting in other parts of the country. At the time, Mexico’s drug trafficking world was going through a profound transformation, splintering and realigning in the most unpredictable of ways. Following the arrest of one of its leaders, Alfredo Beltran Leyva, the BLO split with its long-time partners, the Sinaloa Cartel.

The fighting between the two groups left their headquarters of Culiacan and Morelos in shambles, and made San Pedro seem like a safe haven. The BLO, however, took the arrangement to the next level, using San Pedro as a place of both respite and business. They co-opted politicians and businessmen, and created high-level, complex extortion schemes, one of which involved a life insurance scam. They also brought in their new partner, the Zetas.

Take the 'plaza,' win the war

The Zetas were going through their own transformation at the time. They had been growing steadily since their formation in the late 1990s, and had realized that being the enforcers was a natural way to get income from other sources, which also gave them an opportunity to expand their mini-army. The money came mostly from taking a cut of the extortion, or quota system, the Gulf Cartel imposed in its areas of influence.

Mexico’s underworld operates with the logic that other trafficking groups have to pay whoever controls the “plaza,” or trafficking corridor, “piso,” or rent, if they want to use the territory for their criminal activities. At first, any Zeta extortion scheme required the nod of Gulf Cartel leader Cardenas. But after Cardenas was captured and jailed in 2003, they began to operate more independently. By the time the Mexican government extradited Cardenas to the US in January 2007, the Zetas were effectively an independent organization.

What this meant in practice leads us to the heart of what makes the Zetas so difficult to decipher. Their military background and prowess made them the most effective and dangerous criminal organization in Mexico. Other criminal groups were not ready for them, and expanding their territory, they would find, was the easy part of the job. It took but a few well-trained ex-soldiers and former police, for example, to overrun a small city.

To get these recruits, they tapped into their networks of current and former security personnel, many of whom were unemployed or underemployed. The Mexican military also expels or releases thousands of soldiers per year – nearly 85,000 between December 2006, when former President [Felipe] Calderon took office, through May 2012. The police have also expelled thousands since 2006. And the Zetas have long used advertisements that appeal to a sense of camaraderie and core military values.

However, it was the money more than the values that attracted one ex-soldier I will call “Dragon,” for a tattoo he had. In his testimony to officials after his capture, which was part of a case against the Zetas, Dragon said after leaving the army, he studied education at a university in Veracruz state, and when he could not find a job in his field, he started working with a company that builds boats.

Economic crisis hit, and he was laid off. His daughter got sick around the same time, and he asked a friend of his, who was working as a “hawk,” or lookout, for the Zetas, for a loan. The lookout gave him the money and asked him if wanted to join. He declined, but when he still could not find work, he accepted.

After working as a “hawk” for a time, the Zetas saw he had promise and skills with weapons and promoted him to hitman duties. He was then sent to Ciudad del Carmen, in Campeche state, a city of 150,000 people in the southeastern corner of the Yucatan, where he joined a small team of Zetas preparing to take over the plaza.

Dragon told investigators that to do the job the Zetas sent three lieutenants with five soldiers each, a number they’d reached because they could fit each six-person unit into its own vehicle. One of the top guys in his cell was an ex-Honduran military officer, Dragon said. The others were all former Mexican police and military.

The group started the takeover by sending out two men to purchase drugs. Within hours, they located what is commonly called a “tienda” in Mexico. That night, they organized and executed a raid. The head of tienda, they found, was a woman, nicknamed “La Reina del Sur,” a nod perhaps to another, more famous drug trafficker who’d been jailed in the previous weeks. After torturing her and extracting information about the other tiendas and top drug distributors, the Zetas explained to her that they were the new bosses and that she would be paying them piso.

“Either you align yourself or you die,” they added.

(It is a powerful axiom in the underworld: "O te alineas o te mueres.")

They then went to the rest of the tiendas and repeated the process. This led them to other criminal activities such as the piracy vendors, and the prostitution rings. Within a week, the Zetas were collecting “piso” on every criminal enterprise in Ciudad del Carmen. It was a model they were replicating throughout the country.

But the Zetas also learned that controlling this highly trained, highly efficient military cadre would itself be a daunting challenge. They were, in a way, a victim of their own success. It was so easy to take a plaza, and they were so good at it, that their own men sought the same independence that has made the group such a wild card in the underworld.

To be sure, they instituted a discipline system. Dragon told investigators that it was based on the military regime: a “tablazo,” or a whack with a wooden paddle to the ass, when soldiers disobeyed. Fail to answer the radio, two “tablazos;” don’t go to headquarters when called, 10 “tablazos.”

The Zetas also discovered they needed a disciplined accountant who operated separately from the military side of the organization. This was necessary to keep an eye on their complicated and multifaceted revenue stream, which by now included extortion, kidnapping, piracy, contraband, theft, prostitution, human smuggling, and human trafficking.

Simultaneously, they were making a push into the local drug markets. They were focused on the local market because they had been largely cut out of the major drug trafficking market by their bosses, the Gulf Cartel, hence their concerted push into other industries.

Given this portfolio, Monterrey did not just look good, it looked like the crown jewels. But Monterrey was not Ciudad del Carmen. It was where the big players like the BLO were, and the opening would have to come via an arrangement with one of these players, or risk a bloody war.

Such were the circumstances in 2007. The two groups were at a crossroads: the BLO in its relations with the Sinaloa Cartel, and the Zetas with regards to the Gulf Cartel. For reasons that are not clear, neither was happy with its arrangement with these bosses. The infamous drug trafficker and enforcer “La Barbie,” described it like this: “Comenzaron las envidias y se volvio toda a la guerra.” Rivalries exploded, and everything went to hell.

Even though they had been mortal enemies in the past, the Zetas and the BLO reportedly met in 2007 to talk business. Barbie said Arturo Beltran Leyva spoke with the Zetas’ leaders.

“We are not friends but we have a pact, and we don’t fight,” Barbie told police, before adding. “They are slimeballs.”

By 2008, with the BLO now in open confrontation with Sinaloa Cartel, those first meetings gave the opening the Zetas sought in Monterrey. Metropolitan Monterrey, minus San Pedro, was theirs.

[Claire McClesky and Christopher Looft contributed reporting to this article. Special thanks to Southern Pulse as well for its assistance on this report and coverage of the area.]

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*Alejandro Hope is a member of InSight Crime's Board of Directors.

– Steven Dudley is a director at Insight – Organized Crime in the Americas, which provides research, analysis, and investigation of the criminal world throughout the region. Find all of his research here.