A Senate hearing on drug trafficking shows how meaningless the world 'cartel' has become

• During a recent Senate hearing on fentanyl trafficking, lawmakers and officials used the word "cartel" 90 times.
• But fentanyl is produced and trafficked by complex, multi-layered criminal networks rather than traditional, top-down cartels.
• The emphasis on "cartels" distorts how the US should use its resources and leverage to deal with this complex issue.

A recent US congressional hearing illustrated how the wanton use of the word "cartel" has made it virtually meaningless and gets us further, rather than closer, to understanding modern-day criminal organizations and how best to direct resources to fight them.

The overuse of the term was abundantly clear at the February 15 US Senate Foreign Relations Committee hearing on fentanyl trafficking, during which lawmakers and crime-fighting officials uttered the word "cartel" 90 times.

"Cartels … are flooding the United States with fentanyl," New Jersey Democrat Bob Menendez, the chairman of the committee, said in his opening statement, setting the scene for the over two-hour hearing during which those "cartels" seemed to be an omnipresent force that allegedly control the fentanyl market from the precursor chemical factories in Asia to the doorstep of unwitting US consumers.

"They start in China, where they are purchasing precursor chemicals to make fentanyl," the Drug Enforcement Administration (DEA) Administrator, Anne Milgram, said in her opening remarks, referring to the Sinaloa Cartel and Jalisco Cartel New Generation (Cartel de Jalisco Nueva Generación — CJNG), the Mexican groups that are the DEA's top targets. "They then take those chemicals into Mexico, where they are mass producing fentanyl, first fentanyl powder. And second, they are pressing a great deal of that powder into fake prescription pills in Mexico … The cartels then move the fentanyl powder and the fake pills into the United States. They sell a lot of it on social media and in other ways across our country."

Milgram reiterated this farm-to-table image numerous times, adding an ominous timeline and efficiency that even Amazon might envy.

"We see … the cartels recruiting couriers or others to sell narcotics in the United States," she said in response to one of the many queries about social media's role in the trade. "You have someone who's on social media and within three or four clicks will connect with someone selling. Often what we see are fake pills. They're meant to look exactly like they were oxycodone, but they're fentanyl and filler, and those pills are then delivered to their home or their office or their front door by someone that they don't know within often minutes or hours."

Some lawmakers expanded the cartels' control to include the flow of undocumented immigrants. Sen. Peter Ricketts, a Republican from Nebraska, spoke about a recent trip to the US-Mexico border during which border agents told him: "The cartels will push across a group of illegal immigrants in one location that's drawing our resources off and then push the fentanyl in a different location."

Others picked up on this theme.

"Cartels are profiting from and prolonging the illegal migration crisis," Jim Risch, a Republican from Idaho, said.

In the end, Maryland Democrat Chris Van Hollen summed it up: "The drug cartels in Mexico are out of control."

InSight Crime analysis

A cartel, strictly defined, is a group of producers that colludes to limit competition and set prices in their chosen market.

But the image of these organizations exerting strict control over every aspect of the distribution chain — especially at the retail level in the United States — is demonstrably false, and their efforts to control prices are either non-existent or an absolute failure.

InSight Crime has spent the better part of five years studying the fentanyl trade, and there is a consensus among the dozens of law enforcement and crime experts in every region where precursors are made, transited, and synthesized into fentanyl: These are complex, multi-layered criminal networks.

Some parts of these networks are legal companies that supply the chemicals needed to make fentanyl, a crucial point largely ignored by the participants. The precursor market is inseparable from the broader chemical industry, which is itself a multibillion-dollar economic sector made up of some of the largest companies on the planet.

It is, in other words, intimately linked to our global economy, including the pharmaceutical industry, which, as numerous award-winning books on the topic have described, set the stage for this fentanyl crisis in the first place.

Other parts of these networks are brokers, cooks, and distributors. Brokers are sourcing fentanyl and precursors, and cooks are synthesizing fentanyl or lacing finished fentanyl into counterfeit pills. For their part, many of these distributors — both for precursors and for fentanyl — operate online, often on the open web, because there are few restrictions and regulations regarding their marketing efforts and sales.

Yet, few of these actors have direct connections with the large criminal organizations repeatedly cited repeated by Milgram as the DEA's main targets, the Sinaloa Cartel and the CJNG.

While these two groups carry the moniker "cartel" in their name, they themselves are broken into factions and spread across a huge geographic expanse.

The Sinaloa Cartel, for instance, has at least three major poles of power, each of which is controlled by different leaders. Sometimes the poles of power work together. Sometimes they fight bloody battles. And while they have a presence in dozens of countries, the bulk of their infrastructure and labor is concentrated in northwest Mexico — not China and not the United States.

In Mexico, they do one of three things to obtain fentanyl in bulk quantities: They source finished fentanyl from abroad; they source finished fentanyl from independent producers or brokers in Mexico; or they source precursor chemicals from brokers abroad or within the country to synthesize fentanyl in Mexico. It is difficult to say with certainty how much fentanyl is synthesized in Mexico, but it appears to be a significant proportion of what is consumed in the United States.

Still, the Sinaloa Cartel and CJNG business model does not depend on exerting strict control over the importers and cooks because, as Milgram pointed out in her testimony, there is no harvest season or weather patterns inhibiting their ability to make fentanyl. It is chemically produced in a laboratory.

And to satisfy demand, they need only trace amounts of ingredients, in contrast with plant-based and other synthetic drugs such as methamphetamine, which require significant supplies that can be more easily interdicted.

In other words, there is more than enough supply of fentanyl and fentanyl precursors — so much, in fact, that we think the market includes many independent fentanyl suppliers. One data point supporting this theory is that recent seizures of fentanyl along the US-Mexico border have a wide range of purity levels suggesting that there are numerous producers who are synthesizing fentanyl with varying degrees of sophistication and success.

Nevertheless, the Sinaloa Cartel and CJNG do have an advantage because they are bulk buyers and transport specialists, something akin to large freight forwarders. And they obtain a significant mark-up for doing the hard part of the journey with these bulk quantities. They then sell in bulk to a large number of distributors who do not necessarily answer to them and who are spread across the United States.

This journey — as was also pointed out, but to little avail during the hearing — flows through the main ports of entry, often in private vehicles or stashed amid the belongings of people frequently crossing the border on foot. A large percent of these transporters are US citizens, not undocumented migrants, as was also pointed out in the question-and-answer session of the hearing.

What's more — while they may rely on the same sellers, brokers, cooks, and others — the Sinaloa Cartel and the CJNG are battling to the death in numerous parts of Mexico. And they have little control over prices.

According to our recent reporting on both the US border and in a vibrant California market, the price of counterfeit Oxycodone pills of the type being laced with fentanyl is now close to a fifth of what it was when we did our first report on Mexico's role in the fentanyl trade in 2019 with the Mexico Institute of the Woodrow Wilson International Center for Scholars.

To be fair, DEA Administrator Milgram understands the limited attention span of her audience and that she has to simplify the story to sell her institution's mission. (Admittedly, our own attempts to balance clarity and accuracy when using this term have also sometimes fallen short.)

Milgram also highlighted the DEA's efforts to go after criminal networks, a much more accurate way of describing the challenge ahead.

However, few participants in the hearing picked up this thread. The word "network" was mentioned just nine times, six of which came from Milgram herself, hardly enough to puncture the sensation that an all-seeing, all-knowing "cartel" was stretching its tentacles into US suburban living rooms.

The cumulative effect was to dumb down the entire strategy and distort how the US should use its limited security resources, significant political capital, and dominant economic leverage to deal with this complex issue.

Milgram, for instance, pointed to the DEA's laser focus on the Sinaloa Cartel and the CJNG as the path to success. This strategy has some logic given these groups' important role in a key part of the fentanyl journey from China to the US.

But this ignores the crucial reality that the word cartel belies: Piling law-enforcement resources into dismantling these "cartels" will do little to slow the spread of this deadly drug in the United States and beyond, especially one that no longer depends on geography or seasons to satisfy customer demand, and one in which these specific "cartels" play but a limited role in what is part of a global economy of laboratory drugs that can be peddled by anyone with a cellular phone.