MEXICO UNDER SIEGE

Business Heads Plead as Drug Gangs Terrorize Wealthy
City

MONTERREY, Mexico-A surge of drug violence in Mexico's business
capital and richest city has prompted an outcry from business leaders
who on Wednesday took out full-page ads asking President Felipe
Calderon to send in more soldiers to stem the violence.

The growing violence in Monterrey, long one of Mexico's most modern
and safe cities, is a sign that the country's war against drug gangs
is spreading ever further from poorer battlegrounds along the border
and into the country's wealthiest enclaves.

Residents opened their newspapers Wednesday morning to find the ads
taken out by Mexican business leaders, begging the government to send
more military into the city. "Enough already," said the notice that
ran in national and local papers, criticizing what it said was a slow
response of police against "criminal bands that in every act look to
establish a new boundary of terror."

Later that day, the body of Edelmiro Cavazos, mayor of the Monterrey
suburb of Santiago, was found beside a highway. Mr. Cavazos had been
abducted Sunday night, the latest in a string of attacks against
politicians in Mexico's north.

His killing is another incident in a terrifying spell for Monterrey
residents that began Saturday when armed gangs set up more than a
dozen roadblocks on key boulevards of the city, paralyzing traffic for
hours. The next day, a grenade was lobbed at the offices of an
important television broadcaster. On Tuesday night, grenades were also
hurled at several small businesses on the city's outskirts.

"The security environment in Monterrey has turned, in just a few
months, from seeming benevolence to extreme violence," U.S. Ambassador
to Mexico Carlos Pascual said at a recent conference on drug
trafficking in El Paso, Texas.

Monterrey is only the latest sign of mounting problems in Mexico's war
on organized crime. The official toll since President Calderon took
power in December 2006 is more than 28,000, according to government
figures through July. Mr. Calderon recently acknowledged the
government's inability to check the violence with brute force alone
and has invited lawmakers to debate measures such as legalizing drugs.

The brutality of the conflict is escalating. Alleged gang hit men
broke into the home of a Chihuahua state policeman this week and
strangled to death his 4-year-old brother, authorities said. Across
the country, mutilated and decapitated bodies turn up virtually every
day, sometimes hanging from bridges.

It wasn't always this way in Monterrey. Mexicans know the city of 2
million as "The Sultan of the North," a nickname stemming from its
wealth, generated by corporations such as Mexico's beverage titan
Femsa S.A.B. de C.V. and U.S. businesses such as Whirlpool Corp. and
General Electric Co., which have large offices in Monterrey.
International architects built the city's skyline, which is framed by
dramatic mountains.

The wealth created a sense that Monterrey was impervious to the drug
war. "People just didn't think it was going to happen here," said
Carlos Jauregui, who until March was the top security officer in Nuevo
Leon state where Monterrey is. "Now most of our police corps have been
infiltrated by organized crime."

In April, hooded men raided a Holiday Inn in Monterrey taking several
hostages, who remain missing. The month before, two doctorate students
were killed as bystanders in a shootout at Mexico's most prestigious
university, the Monterrey Institute of Technology and Higher
Education, known as Monterrey Tech.

Monterrey is different from other places that have typically been
embroiled in the drug war. Unlike cross-border transit points like
Reynosa and Ciudad Juarez, where many drug traffickers operate freely
a stone's throw from Texas, Monterrey is a four-hour drive from the
Mexican border. The city isn't near a port where cocaine enters Mexico
in transit to the U.S., nor is it in the mountains where marijuana and
opium poppies are grown.

But authorities say Monterrey's high-end neighborhoods have drawn some
of country's richest drug lords, particularly from Los Zetas, one of
the country's most violent crime groups. In the past, these hideouts
were considered "off-limits" to rival gangs. But now it appears the
violence has become so out of hand that the drug bosses themselves can
no longer control it.

Meanwhile, Monterrey's other well-heeled residents have become targets
for violent car theft and kidnappings for ransom-alternative sources
of income for crime groups. Fernando Garcia, 62, said he was driving
in the city's wealthy suburb of San Pedro Garza Garcia one afternoon
in June when he and his son were approached by armed men who ordered
them out of their vehicle. One of the men sped off with their car,
while two others held Mr. Garcia and his son in a second vehicle for
the next seven hours, forcing them to withdraw cash from various
automated teller machines, until the cards were blocked after $1,000
in withdrawals. "There were people driving by when it happened, and no
one helped us," Mr. Garcia said. Police have made no arrests for the
crime.

Another frightening development is the emergence of so-called
narcobloqueos, or drug blockades, the tactic used last weekend by drug
gangs to snarl traffic in the city. The first occurred at the
beginning of this year, and now the city has become known for them.

During a narcobloqueo, members of a crime group commandeer buses or
commercial trucks carrying tractor trailers, block major highways with
the vehicles and leave the scene, disrupting traffic for hours.
Officials say the tactic is aimed at keeping police and military from
circulating through the city, though it is also used as a show of power.

City leaders recently assembled an emergency towing team to clear the
streets after blockades.

As Monterrey's roads have become danger zones, so has its esteemed
university, the Monterrey Tech. In March, Javier Arredondo and Jorge
Antonio Mercado were killed on the campus after a shootout with
soldiers. Initially, the military said the two were hit men. It later
surfaced they were unarmed students. Last week, Mexico's National
Human Rights Commission said the military had planted weapons on the
students. Mexico's military denies having done so.

Ernesto Canales, an attorney from Monterrey, said such incidents
undermine public trust. "Now we feel like we're caught between the bad
guys and the military," he said.

Javier Trevino, Nuevo Leon's lieutenant governor since October, said
the military presence is necessary because drug cartels have
infiltrated local police. Escalating violence in the city shouldn't be
interpreted as a sign that drug traffickers are winning, he said, but
is rather often the painful result of the state's capture of big
cartel leaders this year. "As we dismantle these organizations, there
are some consequences. Every time you have new bosses of the different
cells, you have new violence associated with that," he said in an interview.

Richard Hildreth, a director at New York-based security consultant
Altegrity Risk International, said companies are increasingly seeking
advice on how to fend for themselves in the city. "U.S. companies see
Monterrey as high-risk now," Mr. Hildreth said. Polaris Industries, a
large maker of snowmobiles and all-terrain vehicles in Medina, Minn.,
that plans to open a manufacturing facility in Monterrey is going
ahead with the plant, a spokeswoman says, but recent violence has
become a "serious concern."

The consequences of violence drag on into everyday life. Locals say
they host parties in the afternoon now, so guests can avoid driving at
night. Many Monterrey residents say they won't travel to South Padre
Island, a popular resort on the coast of Texas, for fear of passing
through Reynosa, a city where hundreds of murders have occurred this
year. This summer, Monterrey's high-end Palacio de Hierro shopping
mall was held up by gunmen for the third time this year.

"We're defenseless here. Who do we call for help?" said a local hotel
owner who used to own the Holiday Inn stormed by masked gunmen in
April, asking that his name not be used.

[sidebar]

'Es momento de hacer un alto y decidir sobre la mejor forma de
responder a las bandas de criminales que ... buscan establecer un
nuevo parametro de terror.'

'It's time to stop and decide the best way to respond to criminal
bands ... looking to establish a new boundary of terror.'

- - Excerpt from newspaper ad by Mexican business leaders