Mexico’s ‘omertà’: Millions of merchants pay a fee to criminals in order to sell their goods in the streets

Over half of Mexico’s employment is informal. Millions of people work by selling in the street and at street markets where one can find anything: food, clothing and footwear, technology, pottery, flowers, perfumes, costume jewelry and shoelaces — anything you can think of and even more if you have a good imagination. Practically all of the vendors are extorted by crime or local bosses, who force them to pay a fee (known locally as the piso) for their commercial activity. In the news, it is common to see that a motorcyclist has approached one of these vendors and, without removing his helmet, pulls out his gun and kills him. Everyone knows why: the victim refused to pay or could not afford to pay the criminal tax collected each week, perhaps by that very same motorcyclist. Recently, chicken vendors have been targeted by gun violence. At the market of Toluca, the capital of the state of Mexico, they have hired private security because they are fed up with extortion and kidnappings that the authorities are unable to stop. Beset for decades by drug trafficking, organized crime has been penetrating other activities and leaving behind its usual trail of murders. From time to time, a market is burned down, merchandise warehouses give off smoke that is visible throughout the city, there are shootings. And people are fed up, which translates into more bullets.

Long ago, organized crime found a lucrative business in these informal taxes that rob the Mexican economy of billions of pesos by extorting the poorest. That problem has only gotten worse. “It is an expanding dynamic. Ten or 15 years ago, the collection of fees at the national level was nothing like it is today,” says Romain le Cour, a senior Global Initiative (GI-TOC) expert, who has been studying violence in Mexico for years. “Far from ending this practice as it promised to do when it was conquering territories, the Familia Michoacana cartel has institutionalized and bureaucratized it. It is no longer just commerce; it has extended to industrial activities, it is their hallmark of territorial domination,” he says. “It’s the same pattern as the mafias in Italy.” The criminals force merchants to pay one fee per square meter of business, and another for protecting him or her from other cartels, but they themselves exercise violence if they don’t receive their payments.

Of common crimes, extortion ranks third in Mexico, behind fraud and robbery, according to a survey by the country’s statistics institute (INEGI). It accounts for 17% and is the least-reported crime, because of fear of the aggressors or distrust of the police, who, for the most part, are in collusion with crime. It’s the Mexican omertà. Ninety-two percent of these crimes go unreported or uninvestigated; this is what is known as the “black statistic.” In a country of 126 million inhabitants, around 20 million victims of these crimes are reported each year. In 2022, 77,825 people were kidnapped, and 49% of them were only missing for one day, just long enough to put a fright into people and charge what they want.

In Mexico City, there is an area called Tepito, which is governed by a criminal cartel of the same name. Getting into the centrally located Tepito is an adventure. There, dozens of streets have been turned into a flea market; it’s a fascinating city, a labyrinthine souk of narrow corridors that astounds even the most intrepid tourists, the ones who go to places they are told are dangerous. That’s where those who will later go to sell throughout the city on the streets stock up. Army trucks patrol this impassable ant colony, where the boys with merchandise carts will run over you if you are not careful. The police are also there, but nothing stops the criminals from arriving every Saturday and Sunday, like clockwork, to collect their fees, stall by stall, for all to see. “Four or five arrive, one is placed on each corner, and another comes to collect. And we have to hit them back. We are fed up, but the government doesn’t do anything,” says a clothing shopkeeper, who estimates that she is losing 15% of her potential profits.

This is how it has been for decades. Similar to the movie The Godfather, it all started with their illegal street stalls, which the police wanted to remove. The neighborhood boss negotiated with officers and asked for a fee from merchants to protect their businesses. When thousands of streets were filled with such stalls, the criminal organizations came to claim their share. Today, everyone gets a cut. “Normally, it’s 30 pesos ($1.77) a week per square meter; now at Christmastime, it’s up to 800 ($47.14), plus another 100 ($5.89) for the supposed protection they give us,” says a girl who sells movies. “But another group also charges us, 300 pesos ($17.68), and it’s the same thing; we have to pay them.” Later, the leader will come to ask for his share in cleaning the place, and so does the one who rents the little storage place to keep the merchandise at night and the one who rents the stall. So, the poor remain poor and woe to anyone who opens his mouth or gives his name for a story like this. And woe to anyone who does not pay. “When the markets burn, they say they are short circuits, but they burn them themselves,” says the clothing shopkeeper, who wonders: “How can criminal organizations be so well organized while the government is so badly organized?

In fact, those who pursue these taxes have become a parallel administration in which the collection of funds flows as the public coffers only wish they could. “The collection of the apartment is born and develops in silence, like the Italian mafia’s omertà. But citizens are fed up; they see that they can’t turn to the authorities and that everything ends in violence,” says le Cour. “The police? You should see the police greeting those who come to get paid over the weekend; they bump fists in camaraderie,” the clothing shopkeeper gestures. She is tired of the fact that “they are all the same trash.” She adds that “the police are more devoted to searching poor kids who are not carrying marijuana.” The corruption of poorly paid local officers prevents them from getting out of this economic and criminal hole. Le Cour concurs: “We’re just seeing the tip of the iceberg, a tiny part of the fee, which has developed as a result of the public authorities’ neglect or ineffectiveness, or complicity, which sometimes even reaches the prosecutors’ offices.”

The state’s absence from security matters, as shown by judicial statistics, leaves fertile ground for criminal organizations. If city hall wants to charge a tax for commercial activity on those who sell flowers in Acapulco, to cite a real example, the merchants rebel. If the criminals already charge them and nobody gets rid of them, they are not going to pay another legal tax, as they said at the time. In the face of a stubborn reality, the authorities look the other way.

Criminals are experts at reinventing themselves. If the government strikes a blow somewhere, they go elsewhere. “When huachicol [pirated gasoline] was heavily pursued, they began to tax merchants, even those who sell tortillas,” argues Raul Benitez Manaut, a researcher at the National Autonomous University of Mexico (UNAM). “The prices of lemons and avocados are also determined by the criminal organizations. When governments attack them in their strongest businesses, [criminal organizations] go to their smaller ones. But that does not happen throughout the country,” says the security expert. “In Sinaloa, for example, they don’t attack the small businesses, they rely on the businessmen to launder money,” he explains. Some experts argue that imprisoning criminal organization bosses leaves the hitmen ungoverned, so they devote themselves to their own businesses, which are more on the street level.

Now, Manaut says, migration is big business. The refrigerated trucks that go down with merchandise are loaded with migrants when they come back up. That was at a standstill during the Covid pandemic, but it has now exploded into hundreds of thousands of people crossing Mexico on their way to the United States, and there is a lot of extortion in the process. “There are estimates that [trafficking migrants] is a more lucrative and less prosecuted business that also relies on the corruption of local police,” he says.

The cartels’ versatility in combining their businesses has the poorest population fed up. Violence is taking over the streets without the government being able to stop it. The rest of the population remains numb to these crimes, which occur far from their homes. Nevertheless, the entire population contributes to financing drug traffickers with their own purchases, even if they buy a pair of socks or a pound of guavas at a flea market. Everyone pays the fee.

In Tepito, the shopkeeper twists her mouth to say quietly: “Don’t turn around, that motorcycle that just stopped there in that stall, do you see it? Don’t turn around… That’s someone who’s coming to collect.” Without getting off the bike or removing his helmet, the motorcyclist receives his fee and drives off. Just 200 yards away, the policeman is still in his car, staring at his cell phone.

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