Extortion on a grand scale, with business owners the usual targets

I've written before about the huge threat posed by extortion in Mexico. Anyone may be a target, but businesses, small mom and pop enterprises in particular, are the usual ones. Sometimes particular industries or trades are singled out, for reasons which are not entirely clear. Retail pharmacy chains, for instance, have been targeted in recent months. School teachers in Guerrero state (Acapulco and its environs) were hit up for 50% of their paychecks just as classes resumed in late August. Schools were closed for about six weeks, putting thousands of teachers out of work and idling tens of thousands of elementary and high school students, while the government beefed up security. And individuals with money have long kown to avoid conspicuous displays of wealth, unless they're able to pay for full time private security.

A report issued this week by the Citizens Council for Public Security in Mexico's Federal District says that between December 2007 and October 2011, there were 343,700 telephone extortion attempts in Mexico City alone. And those are just the ones reported to police. Undoubtedly thousands more paid up to the best of their ability, or failed to report an extortion attempt out of fear of reprisal.

The initial extortion demand may arrive in different ways. Often it's by a call requiring that cash -- usually a very large sum -- be delivered to an isolated location within a few hours. In the case of the Acapulco school teachers, some reported receiving anonymous text or email messages. If a victim tells the extortionist that he doesn't have cash, or as much as is being demanded, the ultimatum may switch to delivery of a car or motor vehicle, along with the title documents.

"People may think that if they pay they'll be left alone, but that's not the case," said an investigator for the federal prosecutor's office in Mexico City in a recent interview. "Receiving an extortion threat at home delivers a psychological impact -- it's as if the criminal has walked right in to the victim's house."

The form of extortion which poses the greatest threat to Mexico's economy is also the most common: the dreaded "derecho de piso." The term can be loosely translated as floor charge or cover charge, or better yet, simply as "the rent." The extortionist drops by unannounced and has a friendly chat with the proprietor. He explains that the two are now in business together. Once a week, or on some other regular basis, a collector stops by to pick up the designated rent from the owner. A failure or refusal to pay may be followed by disastrous consequences. Click on the "what can happen" link below.

The presumption has long been indulged that extortion is a side business of the powerful drug cartels, to help cover daily operational costs. While that's still true, there is increasing evidence in this country that extortion has become an independent business in its own right, in which many thousands are participating to the detriment of their hard working neighbors. Extortion is Mexico's hidden occupational tax, and one with the power to affect business far more profoundly than all other market and economic vagaries combined.

Read about recent extortion attempts against school teachers in Acapulco: http://mexicogulfreporter-supplement.blogspot.com/2011/11/schools-close-in-acapulco-over-narco.html.
Read about extortion against retail pharmacies: http://mexicogulfreporter.blogspot.com/2011/10/even-pharmacies-get-extorted-in-mexico.html.
What can happen when a business owner doesn't pay: http://mexicogulfreporter.blogspot.com/2011/09/extortion-in-mexico-one-way-its-done.html.
Read about the first life sentences for extortion recently imposed in Mexico : http://mexicogulfreporter-supplement.blogspot.com/2011/11/life-sentence-for-mexican-extortionists.html.