$20 billion payday: Biden’s border surge sends smuggling prices soaring

$20 billion payday: Biden’s border surge sends smuggling prices soaring

By Stephen Dinan - The Washington Times - Tuesday, September 27, 2022

The migrant smuggling economy at the U.S.-Mexico border now tops $20 billion and the cartels have made at least $2.6 billion in profit over the past 12 months just from controlling the routes illegal immigrants use, according to a Washington Times analysis.

Both amounts are up substantially from the Trump and Obama years because more people are coming to the border and because they are paying higher prices.

Mexican migrants are paying an average of $8,600 in total smuggling fees this year, according to The Washington Times’ database of smuggling cases. That’s up roughly $2,000 from 2019, the last pre-pandemic year under the Trump administration. Migrants from El Salvador, Honduras and Guatemala are paying about $11,500 for the trip, up from $9,000 in 2020 and $7,900 in 2019, The Times’ data shows.

Those rates are averages across the southern border. Migrants pay a little less in parts of Texas and a little more in California.

“There’s an inflationary pressure on the number,” said Ronald Vitiello, a former chief of the Border Patrol. “Everything else being equal, things are more expensive. Employees, gasoline, logistics — things are more expensive.”

The migrant surge that began at the start of the Biden administration is still going strong 20 months later. The numbers paint a grim picture of how the surge has fattened the wallets of the cartels that control the smuggling economy.

One yardstick is the mafia fee, or “piso” — literally, the tax — migrants pay to cartels to use their routes into the U.S. Nearly every migrant pays, and the rate has increased to $1,300 per person. That is up more than 50%, from about $850 in the Trump years.

The Border Patrol nabbed nearly 2.2 million people trying to sneak into the country from Mexico over the past 12 months. Subtracting repeat crossers who may have paid only once for multiple attempts, adding in estimated “gotaways” who avoid capture, and figuring conservatively that 90% of migrants pay the piso means the cartels have made $2.6 billion over the past year on crossing fees alone.

That’s free and clear profit just for use of their smuggling routes. Any money they make from the rest of the smuggling journey, such as operating stash houses or coordinating foot guides and drivers, comes on top of that.

“They’re printing money,” Mr. Vitiello said.

All the extra money is bad news for the U.S., said former Homeland Security Secretary Chad Wolf.

He told The Times’ “Politically Unstable” podcast that the cash helps fuel cartels’ other deadly activities, such as producing and smuggling in fentanyl, the synthetic opioid that is responsible for record drug overdose deaths in the U.S.

“It’s all the same enterprise,” Mr. Wolf said. “So the money that they make on the human trafficking, the $10,000 to $12,000 per head, they’re using to either import from China or make fentanyl and push that across the border.”

Mr. Vitiello said the cartels are cashing in under President Biden.

“Reasonable people can understand this has a shelf life,” he said. “They’re taking advantage of the maximum flow because they know it’s not going to last.”

The $20 billion for the total smuggling economy includes the money migrants pay to the recruiters in their home countries, those who shepherd them to the U.S. border, foot or raft guides who get them across the boundary, stash house operators who shelter them on the U.S. side and drivers who take them deeper into the U.S.

The gross domestic product of Honduras or El Salvador is less than $30 billion.

Border monopoly

A simple supply-and-demand curve might suggest prices should be falling. The pool of migrants is larger, meaning a bigger supply for the smugglers to share.

That doesn’t account for the cartels’ monopolies. The cartels control ground and all the activities that go through there, including drug and migrant smuggling, and they set the prices they want.

Victor Manjarrez, a longtime Border Patrol agent who now teaches at the University of Texas at El Paso, said there is a logic to how prices are established, though the smugglers don’t exactly advertise their thinking.

In general, those from Mexico pay the least and those from the Northern Triangle countries of Central America pay a couple of thousand dollars more per person.

The going rate for a Mexican to cross in Laredo, Texas, is $7,400, up from about $6,400 in 2020 and $5,900 a year before. Someone from Honduras or Guatemala crossing through Laredo is paying about $10,000, up from $7,700 in 2019.

Those from South America might pay closer to $20,000, and those from outside the hemisphere can pay even more.

Other factors contribute to the exact price.

Those willing to walk more often pay less. Making a five-day trek through the deserts of Arizona or the Otay Mountain Wilderness in Southern California saves thousands of dollars compared with getting bused to the border, hopping across, and quickly getting picked up and driven north.

Even more expensive is being crammed into a trunk or a modified gas tank and brought through a border crossing or stuck on the back of personal watercraft and ridden up the California coast. Mexican migrants can pay more than $15,000 for those trips. Chinese migrants have told officers that they paid more than $50,000 for their journey.

“It’s based on level of comfort, mode of transportation, how quick you want to do it,” Mr. Manjarrez said.

He said wealthier migrants from more urban areas are willing to pay for a few hours of serious discomfort in a car trunk over the days-long, life-threatening slog through the desert.

Smugglers also have adapted to the new conditions on the border. Because of the Biden administration’s leniency, many illegal immigrants from beyond Mexico are hoping to get caught. They believe, usually correctly, that they will be quickly released.

Mr. Manjarrez said smugglers coach migrants on how to take advantage of the Biden policies, such as by lodging claims for political asylum, as part of their package.

What particularly troubles him are the implications that a migrant from a country where the average annual income is $5,000 manages to pay $10,000 for the trip.

“Most of these folks who are crossing usually come from the poorest of the poor in their country. So these fees get paid, but then you get the exploitation,” Mr. Majarrez said.

The lucky migrants end up owing relatives already in the U.S. The unlucky ones have to work off their debts to the smuggling cartels in any way they can.

The Biden administration recognized the dangers of the smuggling networks and announced a major initiative to try to detect and arrest the smuggling leaders.

In a major raid this month, authorities said, they unraveled an organization working in the Laredo area to bring migrants across the border to Texas and up to San Antonio, where they could fan out to destinations throughout the country.

The organization charged about $8,000 per person. Migrants were smuggled in suitcases stuffed inside pickup trucks, stacked inside empty water tanker trucks or sealed into wooden crates strapped to flatbed trailers, according to court documents.

Prosecutors said the organization raked in “at least millions of dollars in proceeds,” and they specifically traced $2.3 million that they were seeking to forfeit as proceeds from the smuggling venture.

Border security experts commended those efforts but said it’s not a substitute for policies that discourage the flow of people.

‘The borders are open’

The Times’ database uses affidavits filed by Border Patrol agents, Customs and Border Patrol officers and Homeland Security Investigations agents in border smuggling cases in which there are witnesses — namely migrants who were being smuggled. The authorities often elicit the smuggling fees the migrants pay and include that information in the affidavit.

The Times’ calculations are based on those numbers.

Juan Jose Reyes-Mazariegos, who was arrested by the Border Patrol on Interstate 10 in Arizona on Sept. 13, told agents he paid roughly $13,000 for his trip. That’s 50,000 Guatemalan quetzals — about $6,400 — to go from Guatemala to the U.S. border, $6,000 for crossing and smuggling fees, and $700 to get him from Phoenix to New York.

Jesus Ivan Garcia-Torres, a Mexican pulled from the water off the coast of California after he was dumped from a personal watercraft he rode across the international boundary, said he paid 120,000 pesos, or roughly $6,000, for his trip. It was the second time he was caught that week.

Last week, agents nabbed Deylin Denisel Salazar-Enriquez, a Guatemalan woman, as she was being driven through a checkpoint outside Laredo. She told agents that a family member was paying $23,000 to have her smuggled to North Carolina.

That price is exceptionally high. The court documents didn’t shed light on the reasons.

The Times calculated the cartels’ mafia fee income by taking the total number of people arrested by the Border Patrol over the previous 12 months and adjusting for recidivists and gotaways who were never captured.

The Times calculated that 90% of migrants pay a mafia fee — some experts say the rate is closer to 100%, while others say it’s lower, in part because the cartel in the Del Rio area doesn’t charge a piso.

Together, that amounts to a little more than 2 million payments over 12 months. At $1,300 per payment, that works out to $2.6 billion.

Getting a handle on the exact size of the smuggling picture is tricky, but The Times used rough approximations from its data. Of the illegal immigrants caught by Border Patrol agents this year, about 34% are Mexican, 24% are from Honduras, Guatemala and El Salvador, and the rest are from elsewhere.

Using the average payment rates for Mexicans, that works out to roughly $6 billion. The Central Americans account for $5.6 billion.

The Times’ database doesn’t have enough data points from other nationalities to make firm calculations, and the Department of Homeland Security doesn’t release granular data on the full scope of illegal crossings of those nationalities.

Assuming they pay the same rate per person as the Central Americans — likely a low estimate — that works out to another $9.5 billion.

That adds up to roughly $20 billion in total smuggling fees.

Urbino “Benny” Martinez, the sheriff of Brooks County, Texas, said those numbers challenge Vice President Kamala Harris’ recent assertion that the border is secure.

“The borders are open, and the volume is high. The cartels are just taking advantage of it,” he said.
Enriching the cartels is more than a matter of money.

Experts say the cartels control every facet of the border environment, turning the U.S. into a reactionary force.

Cartels determine who crosses where, and they use the people as distractions. The migrants occupy Border Patrol agents’ attention in one spot while more valuable cargo — drugs or higher-value people — go through the border elsewhere.

That makes the cartels’ growing financial power more troubling, Mr. Vitiello said.

“It gives them the ability to further destabilize Mexico,” Mr. Vitiello said. “It also speaks to their business model. There’s lots of talk about demand in the U.S. and legalization and decriminalization.

Let’s just say we changed national policy about crossing borders. You think they wouldn’t do something else just as lucrative?”

$20 billion payday: Joe Biden's border surge sends smuggling prices soaring - Washington Times



All the extra money is bad news for the U.S., said former Homeland Security Secretary Chad Wolf.
He told The Times’ “Politically Unstable” podcast that the cash helps fuel cartels’ other deadly activities,