The Ben Mulroney Show - Is Mexico losing ground to the Cartels? And some key tax filing tips!

Episode Date: February 24, 2026

GUEST:  Alejandro García Magos / U of T political science, specializing in cartels GUEST:  Kim Moody/ founder of Moodys Tax / author of “Making Life Less Taxing” If you enjoyed the podcast, tell a friend! For more of the Ben Mulroney Show, subscribe to the podcast! ⁠⁠⁠⁠⁠⁠⁠⁠⁠https://link.chtbl.com/bms⁠⁠⁠⁠⁠⁠⁠⁠⁠ Also, on youtube --⁠ ⁠⁠⁠⁠⁠⁠⁠⁠https://www.youtube.com/@BenMulroneyShow⁠⁠⁠⁠⁠⁠⁠⁠⁠ Follow Ben on Twitter/X at https://x.com/BenMulroney Insta:⁠ ⁠⁠⁠@benmulroneyshow⁠⁠⁠⁠ Twitter:⁠ ⁠⁠⁠@benmulroneyshow⁠⁠⁠⁠ TikTok:⁠ ⁠⁠⁠@benmulroneyshow⁠⁠⁠⁠ Executive Producer:  Mike Drolet Reach out to Mike with story ideas or tips at [e-mail] Enjoy Learn more about your ad choices. Visit megaphone.fm/adchoices

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Winter is hard, but your groceries don't have to be. This winter, stay warm. Tap the bannard to order your groceries online at Wala. enjoy in-store prices without leaving your home. You'll find the same regular prices online as in-store. Many promotions are available both in store and online, though some may vary. Welcome back to the Ben Mulroney show. And I think what we saw in Puerto Vallarta opened a lot of our eyes as to the power and the brazen confidence that cartels have in Mexico to do what they want, when they want, where they want. And so in this next couple of segments, we wanted to bring

on an expert to educate us as to the relationship between the cartels and the government, how much of the country of Mexico is controlled by these cartels, and what exactly that means for trade, for tourism, and for basic good government. So please welcome to the show, Alejandro Garcia Magos, a U of T political science professor specializing in cartels. Alejandro, welcome to the show. Thank you very much, Ben. Happy to be here. Yes. So when you, saw what we all saw as somebody who knows far more about this. Were you seeing something new? Was this an escalation or is this par for the course in Mexico?

It was not that surprise, in fact. These things tend to occur. In fact, a couple of years ago, we saw another big flare-up of drug-related violence in another state, in this case in Aloha. where the forces were trying to capture another big drug lord. Maybe what was surprising in this case, it was that it was successful. It was a very successful military operation. And that in the past, in the recent past, that was not a case. So not surprised about the level of violence and the occurrence of this event, but a bit and happily surprised

or the effectiveness of the Mexican army. I think a lot of us just assumed that the days of Pablo Escobar and El Chapo were done with and the cartels today wouldn't, I mean, it's not that they wouldn't be as powerful because I know that the drug trade is bigger

than it's ever been, but they wouldn't wield the authority that they wield. You know, I think the story that we hear about Mexico is it's a company, a country on the rise. It's building out its institutions and it is, you know, it's doing its best to leave the story of its drug history in the past. But that's clearly not the case. Well, you have to understand that we come from the administration, the previous administration

of Andres Manuel Lopez Obrador, the populist president that was in charge between 2018 to 2024. He had a policy that he himself called Hawks No Bullets, which in essence was just turning a blind eye

and turning to the other looking somewhere else and leading huge chunks of the country in the hands of in the hands of criminal organizations. It was

his attempt to somehow pacify and bring peace to the country. But in essence, it was just some sort of a truce between the government and the criminal organizations. It was an admission. We're not going to be able to get rid of them. So let's just let them do their thing. No one's going to die. They're going to do their business.

They'll sell their drugs. And they'll have their territory. But beyond that, the government's going to govern. Yes. But the problem with that, if you can call it policy, is that you are letting cartels getting stronger and stronger. And that was the case with this one. The new generation, Halisco Cartel, became one of the most powerful,

if not the most powerful criminal organization. And this individual, El Mencho, a very, very powerful criminal. and it got to the point that it was too powerful with too much firepower to be comfortable not only for Mexico City but also for Washington. It was too big to ignore. So we'll talk about them in the next break, but I want to spend the rest of this segment just talking about the cartels themselves in Mexico.

How many are there? How much territory do they control? And are there certain parts in the country? of the country where the government just does not exist? We have seen in the last, every since Mexico became a democracy, in 2000, we have seen the fragmentation of the big historical cartels

for many, many years during the authoritarian period of the PRI party, there were essentially two. You probably know this, the Sinaloa Cartel with El Chapo, controlling the Pacific route, going all the way to California,

Vegas, and Vancouver. And you have on the other side, the Gulf Cartel, controlling the routes to Texas, New York, Toronto Misazaga, you call it.

So that was some sort of like the balance, you know, the equilibrium. With the With a democratic transition and when the new parties start to come into power, there's some sort of like a fragmentation and and cartels cannot rely anymore on the government for protection. So we started to see a lot of of torf wars and divisions. So to answer your question, how many cartels are there? It's a difficult question to answer, but I would say at least,

at the very least 10 important organized criminal actors. And the level of control that they have, it varies. There are cities, for example, like Mexico cities, is safe. Yeah. But there are certain areas of the country that are, you know, towns and specific areas where they are absolutely controlled by these organizations.

Now, what would happen then if for some reason or another, the government had to go through their territory. Let's say there was a natural disaster, and the government needed to mobilize troops to get to a place to help the people. But in order to do that, they had to go through the territory of one of these cartels. What would that situation present as?

In that case, I mean, in the case of a natural disaster, I would imagine that even the cartels would probably allow help for the population, for the local population. But I want to your point, I think, to your point, Ben, I mean, the Mexican government knows where are these people, okay? It's not a big secret. They know where they are.

They have the cooperation of the Americans. They have the intelligence. They have the satellites taking pictures. The decision, it really comes down to making a political decision to go after them. This is what is actually quite new and relevant for these news, that the Mexican government actually used its capacity, because they have it, to go after a major criminal

and assume the cost. There was a lot of soldiers. Yeah, 25, apparently. 25, and they've replaced him. El Mencho has been replaced by his stepson. And so... It was good. Yeah.

So it's business as usual for them, but they came out and they made a point. Talk to me about the use of violence by the cartels in Mexico. I know that there have been political assassinations in the past. This seemed like them making a point. You came after us. We're going to come after you and then we're going to go away. So talk to me about the strategic use of violence by the cartels. Yes.

So 20th century, Mexico was a rule by one single. party that control every single province, every single municipality, and the federal government. That means that you have a very reliable business part there. You have to think of as a criminal now. You can make business. So you get protection from the officials and the official knows that he's going to be in the next electoral cycle. Yeah. Okay. So that you can make, you know, you can corrupt officials. You can get police protection, etc., etc. That's. That. That's a very good business environment for a criminal. With democracy, what happens is that these informal networks of protection,

they got severed. They, you know, the person that gave me protection is not there anymore. So what happened is that criminals started to use and create their own armies to protect their territories. That's why we saw a huge spike in violence in Mexico. Alejandro, hold that point. We're going to talk about that on. the other side, as well as we're going to get right into the Jalisco New Generation Cartel that caused all that violence in Puerto Vallarta. Don't go anywhere. This is The Ben Mulroney Show.

Welcome back to the Ben Mulroney Show. We are in conversation with Alejandro Garcia Magos from the University of Toronto. He specializes in cartels. He's been given us the lay of the land as to how Mexico operates with these massive drug operations in their midst. And now what we want to do, Alejandro, thank you so much for sticking around. We want to look at the case of this cartel that none of us really knew of until the attack in Partavayarta de Jalisco, New Generation Cartel. I'm learning that it is highly militarized and exceptionally violent. What makes this one, why is it new generation? Just give us a story of it.

Yeah, so El Maito starts his criminal career very, very young. Actually, he spent some time in the States. He was deported. And really, if I had to say, it's a successful story, self-made criminal. And it starts to work in the area of Halisco. Calisco is a very important state in Mexico, is where Porto Vallar Taiz. The capital city is Guadalajara,

which is the second biggest city in the country. There's a lot of expats that live around Lake Chapala. It's a beautiful place, you know. So there's a lot of, it's a very important state in Mexico. This is not a remote area. And he started to really become famous because of his brutal methods. He was extremely violent in his actions

and developed a very powerful army that also used social media to deliver messages, messages that were put in, for example, in very public spaces. So it became very well-known in the underworld, mostly because of his brutal ways of combating his enemies, which were mainly other cartels. How big is the sort of the military wing, the paramilitary wing of the Jalisco New Generation Cartel? Well, we're talking about thousands of people, I don't know, five, 10,000 people,

very well trained, very well armed. That's why the Mexican government for a long time, they knew that going after him will come at a high cost as he did. So when you say they're well-trained and well-armed, if they go toe-to-toe with the National Guard as they did, which one of those bodies is better trained? Which ones has better arms? The Mexican Army by far, the National Guard, by far. But again, we go back to the politics, Ben. Like former president Lopez de Vador, he didn't want to have this type of press. He didn't want to have all the negative consequences of facing cartels.

So he paid a price. And now the new president is also paying a price because having this publicity and the attention of the world a few months before the FIFA World Cup, it comes at a cost. Yeah. Well, it's also because the president of the United States wanted her to do something and urged her to do that. And given the fact that the USMCA is still up for renegotiation, we sort of have to do some of the things that our partners want us to do. And it looks like she did. But it didn't take them long to replace him at the head. El Mancho's gone. But now his stepson has taken over. Juan Carlos Valencia Gonzalez. His alias is 03, and he was the guy who controlled the cartels armed wing, Grupo Elite. So is that the paramilitary wing that you've been talking about? Yes, but also you have to consider, now that the Menchro is gone, not this other individual that you mentioned, he doesn't have the, let's say, the presence or commands the same respect as Mencho. So what we probably will see in the next few ways.

weeks is potentially the fragmentation of these huge cartel into different areas. It's not automatic that this individual takes over. He's American. This giant cartel is being run by an American who was born in Orange County, California. Which tells you that this is not precisely like a Mexican problem. This is a transnational organization that have tentacles all the way in Toronto, in Misasaga. How big is the business of the Jalisco New Generation Cartel? How much drug trafficking are they doing?

It's huge, but most important than that, is very diversified. These organizations don't only traffic with drugs. They do kidnappings, extortions, even illegal activities, for example, they have interest in avocado production, the guacamole that you have. it has maybe potentially come from these activities. So they are very, very diversified and have interest in many, many activities, not only in the underworld, but also potentially even legal. And there's a lot of money laundering there.

I am speaking with Alejandro Garcia Magos. He is a specialist in cartels from the University of Toronto. And we are trying to learn a little more about what the Shinebomb government is up against with this Jalisco New Generation Cartel. Is there anything else about how it's organized that makes it different from other cartels? Potentially, it was a cartel that it was, I will call it like oversized. Cartels tend to be more of loose networks and that how they are more successful. Once they become too hierarchical, too big, that's when they become uncomfortable for the central government in Mexico, for the authorities in Washington.

So again, what we want to see in the next few weeks is a reconfiguration of this cartel into more loose networks that are more agile. The business is still is there. Yeah. The drug traffic is going anywhere. but what we're going to see is a bit probably a reconfiguration into a more more agile and more tactical network of drug dealing. So are you saying that the the unintended consequence of taking out El Mentiono could be a more nimble, more adept, more adaptable cartel? Yes. This is what we have seen. Cartails also learn.

And criminals also learn from their experience and their interaction with the law enforcement agencies. And they will adapt in the next two months on how to recover their interest, keep doing their business. Unfortunately, this is not something that you just can hot, get the top guy. this is a problem that is not going to go away. For that will happen, we have to see a decline on the demand of drugs in the state and we have to see more gun control in the state, which is not going to happen. Alejandro, my last question for you, we've been talking about this, we've been musing about it. The World Cup that's coming up and the match is going to be played in Guadalajara.

Is there a danger that these skirmishes, could flare up again. I'm sort of of the opinion that I don't think the cartel wants a target on their back by doing anything like that. No, I don't think there's going to be any problem. I think they're going to be heavily, heavily guarded. Those events, the Mexican Army, as we have seen, and the federal forces and the law enforcement agencies of the country are very capable of controlling a situation

like this. So I wouldn't be worried about that. I think people should go to have fun in the World Cup. And also to other places of Mexico. Mexico is a huge and vast country. Like, if you have a plane tomorrow to go to Cancun, go and go happy, have fun. This is going to happen. Just, you know, be aware that these things can flare up.

But no, the FIFA World Cup will be fine. Alejandro Garcia Magos, thank you very much for your insights. I think I've learned a lot, and I'm sure our listeners have as well. Thank you very much, Ben. All right, after the break, it's tax season, guys. So we've got an expert coming on, and we're talking about automatic tax filing. Apparently, it's a very good idea. But we're going to drill down onto how to make it better.

Don't go anywhere. This is the Ben Mulroney Show on the Chorus Radio Network. It is public service time here at the Ben Mulroney show. There are a lot of people out there. If you say, hey, it's tax season, they'll look at you like they're a deer caught in the headlights. A lot of us just don't know what we don't know. And so armed with a lot of the information in this segment is our next guest, Kim Moody. He's the founder of Moody's tax.

He's also the author of Making Life Less Taxing. Kim, welcome with the show. Pleasure to be here. Thanks very much, Ben. Okay, so it is tax season, and there's a certain type of person who makes a certain amount of money who you think should be using the automatic tax filing. Tell our listeners what the automatic tax filing system is. Sure.

I've written about this in one of my weekly financial post columns. Actually, I've written about three times in the last year and a half or so. But it's been my thought for years and years, along with a lot of others, that certain low-income, low-complexity Canadian taxpayers, which is a lot of them, shouldn't have to pay tax preparers, you know, like I won't name any names, but there's, you know, the average retail tax preparers or accountants for that matter to have to prepare tax returns in order to get benefits or get into the system. In my view, given the fact that the government has all the information at their fingertips

for the most part, you know, they should just prepare a tax return and give the taxpayer the opportunity to take a look. And if they don't take a look, then just file it so that they get into the system. In many, many, many situations that will be low risk and ultimately be a benefit to both the country and to the effective individuals. So that's in a nutshell what it's about. And, you know, it's, there's a lot of countries around the world, like the UK, and it's kind of a model on this. And they've been doing it for years and years.

So that's kind of what I've been advocating for. And who is the ideal person to be using the automatic tax filing? I think, you know, people that have, you know, government benefits like OAS, CPP perhaps, maybe one pension and maybe a little bit of interest income. Stuff that is all filed with the government. You know, T5 slips for interest income, for example, or the government has those because they're filed. And the government has the amount that's, you know,

being paid out to them vis-a-vis government benefits. It's that type of taxpayer, in my view, that should have automatic tax farming available to them. Anybody with higher complexity, which, you know, there's a lot of them as well. No, because the chance for being incorrect is high. Now, I'm hearing from more and more people who are filing their own taxes,

that they're using CHAPT. They're taking their tax returns and they're putting it into CHAPT and they're asking CHATGPT to find all the deductions that they are, that are open to them. Is that something that you would recommend? No. I mean, I like AI.

believe me, and I certainly use it in my practice as well, but not for stuff like that. I mean, that's, first of all, the privacy behind that is questionable, and especially if you're using free accounts. And second of all, it's very unreliable. Well, are there, are there AIs that are trained specifically on the tax code? Oh, for sure. Yeah. As a matter of fact, there's one that I use all the time. It's a subscription-based one, but it's called Ask Blue J built on the Open AI model, and it's fantastic. And a lot of tax professionals use that. But for the average Canadian, that doesn't have that kind of resource available.

I mean, it's good for basic information, but to ask them to prepare tax returns, yeah, no, stay away from that. It's just not reliable. So what about those people who are using sort of online tools? My producer was telling me, can I tell them? what you told me? Yeah, go ahead. Yeah.

Yes. So my producer, Mike Droulet uses wealth simple. And is, I have to assume a company that's gotten that big, that fast, didn't, it didn't happen by accident. So I have to believe that they are a real resource. Oh, I'm sure they are. To be frank, though, I haven't used that resource. So I have no ability to say yea or nay. But certainly they're, you know, their top tier financial advisor slash, you know, investment

provider. So do I suspect that they have a good product? They probably do. But again, I would be careful to the extent that there's any sort of complexity. If there's a little bit of complexity or you know, free tools like that have their limitations. If you had the ear of the government and the goal was to make the tax system better, what would be your advice to the government? Oh my goodness. First of all, read a lot of the articles I write over a couple hundred of them. And that's a common theme that I write about. But I think the core would be to make it much more approachable, much more simple.

And that's easier said than done, given the complex society that we live in. But there is, you know, our income tax statute is littered with very political stuff. And I could go on and on about that. But that kind of stuff that is littered in the income tax act just adds unnecessary very complexity. And you can easily simplify it or make it better by getting rid of that stuff. That would be number one. Number two is to make the personal tax system much like instead having five brackets.

You know, let's have two brackets at most and introduce, you know, wide exemptions so that we don't have a lot of these personal tax credits that clutter the system. That would be another one. I like the idea of the conservatives when they came out with Big Bang corporate reform that Jack Mince talks about a lot. You know, there's a whole bunch of things, Ben, that you could do that achieve both simplicity and economic expansion. And I think you need to do both in my view. Kim, what is the impetus for not doing that? It seems like everyone says the tax code is too complicated.

Everyone kind of agrees it should be simpler. Why don't we simplify it? Well, it's a pretty powerful political tool, right? To hold it your, to hold to wield, you know, whenever you want. And I've learned that the hard way, getting a practitioner for years, that, you know, politics really drives. And so if you can, you know, if you can hold out some carrot on the tax side, that that seems to be pretty good to the average voter. But in reality, it adds a lot of complexity, you know, complexity be damned. it's really the votes that matter.

And so that, I think, is really what's driving a lot of this. You need a party, which I think the conservatives are, you know, have been the most courageous on this subject, to basically take it by the horns and say, we need this for the benefit of the country. Politics, yes, is important. But at the end of the day, we need this for the benefit of everybody. I think if you, I think if you, that I think the political benefit to any party that says, we will be the party that makes your life easier as it relates to filing your taxes. I mean,

that's, that's wielding the, the political side of the tax code, uh, to the benefit of everyone and to the benefit of the party. They, that sort of catches lightning in a bottle. I don't disagree,

but to hold, but if you look at the history, especially the last 11 years, it's been quite the opposite. Oh, yes. It's been, it's been, uh,

hey, here's a great idea. Let's do this. And, you know, the complexity, that's added by that. I mean, here's a quick example.

You know, the short-term rentals, you know, of course, that was one of the major causes of housing crisis in Canada. And I'm being sarcastic if you can't figure that out. And the, so what do they do? They introduce that anybody who operates a short-term rental in a jurisdiction that prohibits it will be denied all expense deductions. if, you know, when they call their taxes. Yeah, I see what you mean.

So all of a sudden they can wield that tool and they can try to alter behavior. Exactly. But a drug dealer, if they want to be compliant and report their tax return, their taxes, do you think they can expense the deductions or the short answer is yes? And so think about that. You know, what's the public policy reconciliation there? There is none. You put an evil short-term rental owner.

more soft than a drug dealer from a tax perspective, at least anyhow. I mean, that's just foolish, foolish. Look, I'm of the opinion, Kim, that it's far better to incentivize a change of behavior than to sort of try to tax your way there. But that's just one man's perspective. Kim, thank you so much for being here. We've been talking to Kim Moody.

He's the founder of Moody's tax and the author of Making Life Less Taxing. Kim, please come back. I feel smarter for having talked to you. Anytime, Ben. Thanks for having me. Firefighters miss their lives every single day. Fridays on Global. We're going to get you out of here, bud. This is the greatest job in the world.

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