RENEE MONTAGNE, HOST:
Five hundred and six people were murdered in Chicago last year. It was the kind of news that got John Lippert thinking.
JOHN LIPPERT: I live in Chicago and a lot of what we get is overnight stories saying, you know, three people shot, six people shot, day after day. And I just felt like, okay, well, what does it mean? Where are we going with this?
MONTAGNE: The writer for Bloomberg Markets magazine lead an investigative team that tried to answer those questions. Crime is extremely complicated, of course, and you can rarely blame a single cause when crime rates go up. But Lippert said he encountered one influential factor.
STEVE INSKEEP, HOST:
What follows is a kind of business story of the business man who gained a near monopoly in Chicago. Joaquin El Chapo Guzman heads the Sinaloa drug cartel. Through brutality and business savvy, the group became Mexico's dominant drug network and took over key routes to the United States. John Lippert told us that what surprised him was the way El Chapo gained such dominance over the American Midwest.
So was Joaquin El Chapo Guzman as famous in Chicago as Al Capone was once upon a time?
LIPPERT: No. He's as famous in Mexico as Al Capone was, so he's a household name in Mexico. But in Chicago, I think, the fact that he's a monopoly supplier of most of our drugs is new. It's only six or seven years old. I mean in 2006 he was recorded by the Mexican authorities saying I want to make Chicago my home port, and he's done that.
INSKEEP: Well, let's talk about what his accomplishment is then. How does his business work?
LIPPERT: Well, it used to be the case that he was a brilliant smuggler, but then he would be on the Texas side of the border with his drugs and then he would have to find buyers. And what's happened now is he's saying, no, that's okay, my people will bring the drugs to Chicago, we will break down shipments and not only serve the Chicago market but we will also distribute it to all the towns like Minneapolis and Indianapolis and Toledo.
So all the Midwest towns around here are getting supplied. I mean he's got warehouses. He's got people. And we talk about drug smuggling, but another big chunk of the operation is you got to get the money back to Mexico, so there's a whole separate sort of reverse supply chain to get all the money back to Mexico. So that he doesn't compete at each stage of that supply chain the way he used to.
Now he is the supply chain.
INSKEEP: Well, you are using the same kinds of terms we would use in describing a large corporation. We're talking here about distributors, about wholesalers, about street corner retailers, and he's the guy who is supplying everybody, that everybody must depend on. Is that what you're saying?
LIPPERT: And another interesting element of that is that he chose Chicago for exactly the same reason that, you know, Montgomery Ward flourished in Chicago, or Sears flourished in Chicago, because it's a crossroads of the Midwest. It always has been. It's a transportation hub.
INSKEEP: What practical effect has that had on the streets of Chicago? What does it matter who the supplier of the heroin is if people are taking it?
LIPPERT: He's a monopoly supplier now, so it used to be when the mega-gangs had discipline and when they were sending their people down to the border to buy drugs, they had a choice of suppliers. But Guzman himself is saying, okay, here's what I'm willing to charge for heroin in the city of Chicago. So he's personally dictating and there's less of an economic pie because the monopoly supplier is taking off a bigger share and so there's just more competition.
There's more pressure. If you want to expand your sales, you have to expand your street corners. You know, you have to physically take street corners, which is a violent act. So the fact that there is less discipline among these gangs and less money for them to make fuels the competition between them and fuels the violence.
INSKEEP: Is it correct then to say that over the last many years, as I've heard stories about violence in Juarez, Mexico, or a higher murder rate from time to time in Chicago, I have been actually hearing the story of Joaquin el Chapo Guzman? I've been hearing his story without ever knowing his name until now.
LIPPERT: I think that's right. The way the DEA are talking about it is that this may be unprecedented in the history of crime. And they say, okay, well, we all grew up talking about the mafia and everything like that and they just flat out say, you know, Al Capone or the Mafia that we grew up talking about can't begin to do what these guys are doing. It's different.
INSKEEP: John Lippert is co-author of an article in Bloomberg Markets magazine about Joaquin El Chapo Guzman, described as the near monopoly holder of the drug market in Chicago and many other areas of the Midwest. Thanks very much.
LIPPERT: Thank you. Transcript provided by NPR, Copyright NPR.