Gringo Gazette

Gringo Gazette

Tax Fairness For Americans Abroad Act of 2018

Americans are taxed on the basis of their citizenship, not residency. A US citizen, no matter where he or she resides and regardless of the type and source of income, is subject to US federal income tax, if certain income thresholds are met, and that individual must file a tax return with all the associated forms and schedules and, as called for, pay tax.

One of the associated forms requires reporting of information about specified foreign financial assets, including foreign deposit and custodial accounts and certain other foreign assets. Rules provide, as part of the regular income tax return, a foreign earned income exclusion, which can include a housing cost amount. Tax credits can be claimed to offset US tax, but not to the extent of foreign taxes that are allocable to excluded income. This benefit, in effect, is a type of partial residency-based tax treatment for some individuals. Upon an individual’s death, if the individual was a US citizen, his or her estate, if it is of a certain size, must file an estate tax return and pay estate tax with respect to its worldwide assets. A US citizen is generally subject to gift taxation, regardless of where the individual resides and where the assets are situated. Special rules deal with the tax treatment of expatriation. In addition, if certain thresholds are met, a US citizen must report foreign bank account information.

On December 20, 2018, Congressman George Holding (R) North Carolina, introduced the Tax Fairness for Americans Abroad Act of 2018 (H.R. 7358). The goal of the legislation is to replace the current citizenship-based taxation with residency-based taxation. In general, this, (the TFAA) would enact, alongside existing section 911, an alternative for Qualified Nonresident Citizens (QNCs) of the US living abroad.

With limited exceptions, the foreign-source income of Qualified Nonresident Citizens will be taxed like nonresident aliens, that is to say not taxed by the US. QNCs would remain US taxpayers and fully taxable, and subject to normal filing requirements, on US-source income.

The American Citizens Abroad explanation of TFAA outlines the tax treatment of both foreign earned and foreign unearned income. “The explanation is an attempt to lay out all the various income streams and assess how the proposed TFAA legislation will be applied to these income streams, how they will be taxed by the US, and what will not be taxed by the US,” said Marylouise Serrato, ACA Executive Director.

“The explanation is by no means an official technical explanation, and it should not be attributed to any degree to any person other than ACA,” added Charles Bruce, ACA Legal Counsel. “It’s important for the community and those working on the legislation to have a complete outline of the various areas of the current tax code that might be affected by the bill and how these changes might play out. The Holding bill lays down an important marker.

“ACA is obviously very much interested in helping develop and enact a final bill. Working on background subjects and then the drafting details, ACA is now turning to pushing for adoption of residency-based taxation,” said Marylouise Serrato.

ACA was the first organization to develop an approach to residency-based taxation (RBT) and to run unofficial revenue estimates on that approach. The work was widely presented to the offices that developed

TFAA, and ACA data and knowledge, we believe, was very valuable to that process. The American Citizens Abroad looks forward to continuing to develop its thinking on the subject of tax reform for Americans abroad and working with Members of Congress, the Administration and stakeholders of all stripes.

American Citizens Abroad’s (ACA, Inc.) mission is to educate, advocate and inform both the US Government and US Citizens living and working abroad on issues of concern to the overseas American community. Contact: info@americansabroad.org, +1 202 322 8441.

Ensenada Backs Out Of Plastic Ban

Just 21 days after a ban on plastic shopping bags and containers in the city of Ensenada went into effect, the city council decided to suspend it.

Emilio Martinez, the Ensenada councilman that promoted the ban on plastics, informed that the suspension of the brand-new law will be for an undefined amount of time.

He stated that the city is working on promoting an intense campaign that would inform the general public about the use of plastic and the effect it has on the world, particularly in Mexico.

Martinez said that the reform of the law never had a coercive or fine-collecting objective but that it was preventive in order to strengthen the environment.

He added that along with the campaign, authorities will work closely with the private sector in order to substitute plastics for other non-contaminating materials.

Rosarito beach passed a similar law last December with steep fines for stores that give non-biodegradable plastic bags to their customers, but they are not enforcing said fines until April this year in order to give time to local businesses and people to find better options for carrying their goods.

Drew Juvinall Dead at 82 Years Old

There’s a lot of joy and laughter in heaven these days. Drew Juvinall just arrived!

We’ll all miss this one-of-a-kind, witty, candid, amusingly irreverent, real estate ‘guru’ – and remarkable man – forever.  Heaven’s gain is our loss!

Drew came into this world at San Francisco Children’s Hospital and spent the first two-thirds of his 82 years in the Bay Area.

He was bigger than life, incredibly energetic – and delighted in living.  And he did it his way!  He was passionate about real estate, fast cars, the 49ers and barbecuing.

He adored his daughter Leigh, and always said how fortunate he was to have found his soulmate, Lana, his partner in real estate, as well as in life.

He formed the commercial real estate company of Juvinall-Neiman, with offices in Santa Rosa and Marin, with 40 agents, which he sold to Grubb & Ellis before moving to Visalia in 1989.  He and Lana worked for the Fresno office of Grubb & Ellis until the parent company set up an unprecedented satellite office for him in Visalia.

Drew and Lana Jordan then formed Jordan & Juvinall Commercial Real Estate in Visalia. Then, after building their oceanfront “vacation” home in Baja, they moved there permanently, and established Rosarito Beach Realty, which became as successful as Drew’s many other endeavors.  Never one to be content with the status quo, in February, 2018, he opened a second office in the La Fonda-La Mision area, which Lana will continue, as Drew wanted.

In 1992, he gathered together a group of prominent Visalia business and civic leaders to found the Tulare-Kings Counties Business and Industry Forecast.  It was attended each year by more than 500 business persons. He qualified for the prestigious Society of Industrial and Office Realtors, was a member of the International Council of Shopping Centers and Tulare County Economic Development Corporation.

In Baja, he was instrumental in founding the Rosarito Chapter of AMPI (Mexican National Assn. of Realtors).  He was one of the first proponents for real estate licensing in the State of Baja California, and both he and Lana became licensed Baja brokers.  He always retained his California Real Estate Brokers License and continued as a member of NARS.

He delighted children in orphanages and in the hills above Rosarito in his Santa Claus suit, where he passed out presents with a hearty “Ho!Ho!Ho!”.

Above all, he was infamous for his “priest robes”, always saying “bless you my children” and relishing everyone’s reactions.  With that twinkle in his eye, he was equally believable as a benevolent priest and as jolly old St. Nick.

He leaves behind his wife, Lana Jordan Juvinall, daughter Leigh Konopka (son-in-law Jeff), as well as grandchildren, other close relatives, and many close friends.

A celebration of life to be announced.  Memories are welcome and may be shared at bajadrew@gmail.com.

Ecological Patrol Attacked By Fishermen

The crew of one of 12 vessels operated by Sea Shepherd fell under attack by poachers inside the Vaquita Refuge in the northern part of the Sea of Cortez. Sea Shephard is an international conservation society dedicated to saving marine wildlife. Their mission is to end the destruction of habitat and slaughter of wildlife in the world’s oceans.

Dozens of angry fishermen in pangas raced alongside the Sea Shepherd ship Farley Mowat, hurling objects and attempting to foul the ship’s propellers with their illegal nets.

Sea Shepherd for months has been patrolling, removing the gillnets set by fishermen catching totoaba. Totoaba bladders are sold on the black market in China for up to $10,000 per bladder.

Nets used to catch totoaba are a threat to critically endangered vaquita porpoises, and Mexico has banned gillnet fishing but allows Sea Shepherd to patrol the refuge as part of an effort to save the vaquita from becoming extinct. (The vaquita population is estimated at fewer than 30.) Totoaba are also threatened with extinction, mostly because of the damming of the Colorado river where they spawn. And the crazy Chinese believe they are a treatment for fertility, as well as circulatory and skin problems. The Mexican government pays the fishermen to not fish, but they can’t pay as much as the profit from selling the fish.

Sea Shepherd said in a news release that the tense incident involved 35 pangas swarming around the monitoring vessel until the Mexican Navy  zoomed in to help.

 Part of the news release reads:

 

The Sea Shepherd ship approached the pangas where obvious illegal poaching was taking place, as totoaba fishing gear was detected being loaded into a boat. The poachers attacked by hurling lead weights, anchors, trash, dead fish and even Tabasco sauce at the vessel and its wheelhouse windows in addition to Molotov cocktails they hastily prepared. They also sprayed gasoline at the ship and poured gas in the sea around the vessel.

Poachers then dropped one of their illegal gillnets in front of the bow of the moving Sea Shepherd vessel in an attempt to foul the ship’s propellers. Five angry poachers boarded the Farley Mowat and looted multiple objects from the vessel’s deck while it was temporarily immobilized.”

Sea Shepherd crew used fire hoses to keep poachers from entering the ship, while calls for assistance were made. Navy sailors stationed on the ship were under orders not to fire on the fishermen.

The fishermen began to disperse as a Navy helicopter arrived overhead. As the Farley Mowat got under way after its propellers were cleared of netting, the vessel was met by a Navy ship and the situation was brought under control. It was not clear if any arrests were made, or if anyone was injured.

Stated Sea Shepherd founder Paul Watson: “Sea Shepherd will not be deterred by violence. Our mission is to prevent the extinction of the vaquita porpoise and we will continue to seize the nets of poachers in the Vaquita Refuge. Sea Shepherd salutes the quick responsiveness of the Mexican Navy in defusing a dangerous situation”.

What’s Going On In This Country?

Shooting. Despite campaigns and laws against shooting up, New Year’s revelers continue the tradition of firing guns at the stroke of midnight. And if you don’t have a gun, police in Sinaloa will lend you one, which proved fatal for a seven-year-old girl in Oaxaca after she was struck by a stray New Year’s bullet. The little girl and her family were seated outdoors and preparing to enjoy a New Year’s Eve dinner when she appeared to faint.

At about the same time that Vivian was hit, two local police officers loaned an automatic rifle to a New Year’s reveler, so he could join the fun and fire shots into the air. The two are under investigation after a video of the incident surfaced. After the video appeared, they were relieved of their weapons and put under investigation. Don’t expect more than a slap on the wrist.

General Motors has retaken the title of No. 1 automaker in Mexico after an eight-year hiatus inflicted by Nissan.

The United States manufacturer made more than 801,000 light vehicles in Mexico by the end of November last year, a 9% increase over the previous year. It was also the top auto exporter from Mexico, with over 775,000 of its new vehicles shipped out of the country. Japanese automaker Nissan, which was Mexico’s largest between 2011 and 2017, made 717,100 vehicles in the first 11 months of 2018, a 9% decline from the previous year.

GM on a roll. The numbers are a reflection of GM’s renewed manufacturing focus in Mexico and the difficulties faced by Nissan due to a contraction of the Mexican auto market. By increasing its production capacity in Mexico in the past two years, GM thumbed its nose at President Donald Trump. To add to Trump’s consternation, GM announced it plans to manufacture new models in Mexico, including the Chevrolet Equinox SUV, the GMC Terrain and the Chevrolet Blazer.

The new trade agreement late last year between Mexico, the United States and Canada will bring changes to the North American auto sector and push up manufacturing costs in Mexico, but GM and other U.S. manufacturers are well prepared. Among the changes agreed to in the new pact, known as USMCA, are an increase to regional content levels to 75% from 62.5% in order for a car to be given tariff-free status, and a requirement for 40% of content to come from high-wage areas where workers earn at least US $16 per hour.

The trade agreement, which may or may not pass Congress, will replace the 25-year-old NAFTA at the start of 2020. Or not. That $16 wage is about as likely to happen as Mexico paying for the wall, but by that time, if Trump is still president, he won’t be paying attention to the art in this deal.

Gas grief. The same night President López Obrador reported the pipeline that runs from Tuxpan to Azcapotzalco was fixed, it was breached again. “It was working and at 11 o’clock at night it was broken again, and it is being repaired again; I am informed that in an hour the supply will be re-established. As I have said, let’s see who gets tired of this bullshit first.” OK, so he didn’t say bullshit. If you want a word-for-word quote, you can learn Spanish and listen to him yourself. He gives press conference every morning at 7 am, which is carried live on Youtube.

This week, another pipeline was vandalized for three consecutive days. Security will be reinforced along the main pipelines of Pemex, and President AMLO announced new special bases chock full of soldiers ready to charge out and arrest the fuel thieves. Ja! Even a cat knows better than to expect to see that. There will also be aerial surveillance, he said. “Since yesterday and today begins surveillance in air force helicopters in all pipelines and special bases are being created every certain distance.” Forever? 9,000 extra soldiers and guarding the pipelines. For how long? The thieves will just lay low until AMLO gives up on this silly game.

More gas grief. The federal government’s fuel theft strategy has not only stranded motorists unable to get gasoline, but ships are stuck as well: at least 60 oil tankers are stranded in Mexico’s principal ports, unable to unload their fuel because Mexico is afraid to send the fuel they already have through the pipes. There are not enough tanker trucks to distribute it.

Rosarito Calendar of Events

Every Monday through Thursday, 9am – 12pm; Pickleball at Punta Azul Tennis Center. Cos: $1 court fee per person per day. Organized by Robert Canaan. BYO paddle and ball. Information: Facebook.com/ Rosarito Pickleball

Every Wednesday, 10am – 12pm; Adult painting class at IMAC Rosarito in the main park. Bilingual instructor. 200 peso registration/ 300 pesos per month. IMACRosarito@gmail.com; Facebook/imacrosarito.

Every Friday, 12 – 2 pm; Adult painting class at IMAC Rosarito in the main park. Bilingual instructor. 200 pesos registration/ 300 pesos monthly. IMAC Rosarito@gmail.com; Facebook/imacrosarito.

Every Sunday 4 pm. Cultural Sundays in the park. Local Mexican and American dancers and musicians.  At the IMAC in Abelardo L. Rodriguez park, west of Banamex. Facebook IMAC Rosarito. Free.

Every Sunday 2 – 4 pm at the IMAC Central Park (behind the Banamex on Juarez) Dancing for seniors. Salsa and merengue (among others) tunes designed to not throw out a hip. www.facebook.com/IMAC Rosarito

Second Sunday of every month, Pet sterilization by the Baja Spay and Neuter Foundation at the Centro de Diagnostico Clinico Vetrinario, ave. Queretaro #2331-3, Col Cacho, Tijuana. 200 pesos, 661-124-3619, or Robin at www.BajaSpayNeuter.org.

Last Sunday of every month, Jewish Chavurah. Gordon Kane – gordonmkane@gmail.com.

Every Monday, 10:45 am, duplicate bridge at Baja Gold Bridge Club, KM 42 at the Rosarito Beach Christian Church. bajagoldcoastbridgeclub@gmail.com.

Every Tuesday – Rotary Club meets at Rosarito Beach Hotel. 664-376-2620.

Every Tuesday 10am to 11am.  Chair Yoga – Rosarito Wellness, Healing, Living at IMAC Park, room 1 in Rosarito (behind Banamex). Improve Balance & Coordination.  Receive all the benefits of yoga in a gentle, Healing, Meditative yoga class where a chair is used for support and balance. Bring water, small towel and comfortable clothing. Instructor: Erendira Abel, Certified Holistic Health Specialist. $5 per class, paid at beginning of month. For registration and location:  (661) 614-6036 Mexico or (619) 632-2965 US. Email: wellnesshealingliving@gmail.com

Every Tuesday. 9:00 am. Board Meeting for Yo Amo Rosarito at Ortega’s Buffet. See what events are under consideration or volunteer to help plan and run upcoming events.

Every Wednesday, 7:30 – 9:00 am; Tai Chi classes with certified instructor Eugenio Encinas at Galeria Fausto Polanco Rosarito. 350 pesos per month. Alyce: 664-368-6733; Alberto: 661-125-9191.

Every Second Wednesday (except December). 10 am. Friends of the Library meeting at main library of IMAC building next to Abelardo Rodríguez Park. Promotes reading and literacy in Rosarito. www.friendsofthelibrary.com.mx. 661-612-3659.

Second and FourthWednesday, 1 pm; Cruz Roja Primo Tapia Bingo at El Pescador Restaurant. 6 games/ 2 cards for $5. Reduced price menu; Jamesphausmann@gmail.com; 1-623-217-9795.

Every Third Wednesday of the Month (except December), Flying Samaritan’s General Meeting at Villas Del Mar (k 31.5). www.flyingsamaritansrosarito.org;  Susansmithz@hotmail.com; 1-858-234-2360; 661-100-6066.

Every Third Wednesday, 10 am, Meeting of Rosarito Sister Cities at City Hall, Fojadores Room, 2nd floor. Information and RSVP: FRAO@Rosarito.gob.mx.

Every Third Wednesday (except December) 1:00 – 4:00 pm, Flying Samaritan’s Outrageous Bingo at Popotla Jr. Restaurant (across from El Nido – formerly California Fresh), Food and Drink specials; free parking behind restaurant; Six games, 4 cards for $10; Karen: kajomc@yahoo.coojm; (US) 1-818-515-0067l (MX) 664-609-3419.

Every Last Wednesday, 11:30 am, Wellness Wednesday Workshop “Intentionally Aging Gracefully” with Erendira Abel at IMAC a Abelard Rodriguez Park (behind Banamex). $6, and pre-registration is required. Info: wellnesshealingliving@gmail.com; (US) 1-619-737-2453, (MX) 661-614-6036.

Every Thursday. 8:30 am. Local Board of Realtors (APIR) meets at Oceana Grill. Good place for buyers or sellers to find a Realtor

Every Thursday, 10:30 am, Learn Spanish “Naturally” with Erendira Abel at Rosarito Beach Christian Church. $5, and pre-registration is required. Info: wellnesshealingliving@gmail.com; (US) 1-619-737-2453, (MX) 661-614-6036.

Every Second Thursday. 10 am. Cruz Roja Volunteers, Rosarito Chapter General Meeting at Popotla Restaurant. www.cruzrojarosarito.org.mx; President: Mary Moreno, miqueridomx@yahoo.com.

Every Third Thursday. 10 am. General Meeting for FRAO, Foreign Residents Assistance Office. Open to the public. Calafia Hotel.  Speaker’s presentation. FRAO@Rosarito.gob.mx.

Every Fourth Thursday of the month, 12 pm, Baja Babes, the Rosarito Chapter of the Red Hat Society for ladies over 50 monthly luncheon. Each month a different restaurant. margit@prodigy.net.mx.

Every Saturday, 10:00 am at IMAC Central park. Chess for all ages. www.facebook.com/IMAC Rosarito.

 Every First Saturday. 10 am. United Society of Baja California (USBC) general meeting at Casa Blanca Restaurant, Rosarito Beach Hotel. Good info for the English speaking community of charitable, community service and social organizations. www.unitedsocietyofbaja.org. 661-614-1113.

Every First Saturday. Noon-sundown. Open Studio Art Walk, a free tour of galleries in Rosarito Beach Hotel commercial center. Meet artists at work in their studios. pacothepainter@hotmail.com

Every Third Saturday. 1pm. USBC, United Society of Baja California, monthly potluck dinner, at La Maroma sports bar, across from Burger King. Different theme every month. Usually live entertainment. Free. Membership $20 per year.

Every day but one day at a time AA Grupo Gringo meets daily #16 Mar Meditteraneo (two blocks behind Del Mar Beach Club). Saturday, 3:00; Sunday, Monday, Thursday: 10:00 am; Tuesday, Wednesday, Friday: 6:00 pm.  Additional meetings in Cantamar (just south of the footbridge) Tuesday and Friday, 10:00 am.  661-614-1678.

January 30, Wednesday, 1 pm: Cruz Roja Primo Tapia Bingo at El Pescador Restaurant. Multiple games/cards/ prizes. www.cruzrojaprimotapia.com.

February 1, Friday, 1 pm; Susanna’s Wine Pairing Auction to benefit the Baja Scholarship Foundation. $45 (pre-paid only) includes wine pairing, tax, tip, and raffle ticket. Also 50/50. Donate at PayPal at: www.bajascholarshipfoundation.org.

February 3, Sunday, 2 – 9 pm; Super Bowl Fiesta Party at Ortega’s Buffet. $15. Reservations suggested. $.79 domestic beer special. Facebook.com/ Ortega’s Buffet

February 6, Wednesday, 1 pm; Flying Samaritans Chocolate Fondue Fest at Las Rocas Hotel. $20 Reservations required! All proceeds benefit Flying Sam’s Rosarito. SusanSmithz@hotmail.com; 1-858-240-2360 (US); 661-100-6066 (MX). www.flyingsamaritansrosarito.org

February 8, Friday, 10 am; Cruz Roja Primo Tapia monthly meeting at El Pescador Restaurant. Public invited. www.cruzrojaprimotapia.com.

February 9, Saturday, 10 am – 4 pm; Second Saturday at Puerta al Valle in La Mision. Local artists, entertainment, and food. Free entrance. Facebook.com/Second Saturday La Mision.

February 9, Saturday 3 pm; Culinary Cinema series presented by Black Cross Wines at Moncy & Wally’s Place. Reservations required. $35 general seating or $40 reserved two front row seats. Includes “Mex/Med lunch and cocktail. Facebook.com/ Black Cross Wines.

Baja Neighbors Are Different

BY GEORGE JOBB

Neighbors here in the Baja can easily cross a broad spectrum of humanity. Anyone who has rented or owned down here for a few months or years undoubtedly has many stories about their neighbors.

A friend stopped by for morning coffee yesterday, standing high up on my deck, taking in the view of the adjacent neighbor’s yard. He observed that that was the largest hookah pipe he had ever seen! I gave him a “hmm,” and said I didn’t know what he was talking about. But when I peeked over, I saw It wasn’t a hookah pipe at all; it was what I would consider a large commercial still that they had built on their terrace. It obviously had just gone up in the last couple of days, since I hadn’t seen it before. The still itself stood about six feet tall, maybe seven. The girth at the bottom was about the size of a 45-gallon drum, but it was round and made of copper. They also had a copper bucket with a coiled copper line for cooling and condensing. My neighbors had put some time into this. I started getting flashbacks about all the movies or TV series I’d seen about moonshiners, and thought that maybe they were doing some filming, and that I was just overreacting. But I don’t think so, because usually things are pretty much what they appear to be. Judging by the five 25-pound propane tanks there, they were about to go into business!

I’m from Canada, and my parents at times used a still to ferment mash leftover from making wine which was turned into pure alcohol. Usually a liter or two at a time at the most. I also used to purchase a liter of moonshine about once a month back in the days when the kids were still in diapers and I was living from paycheck to paycheck. The Serbian who sold it to me was a regular workout partner. He brought the recipe with him and his family from the old country, a recipe made from raisins; it was quite tasty at about 70% alcohol. That’s a  pretty good kick for $10 a liter.

But this still of my neighbor’s was obviously designed to produce five or 10 gallons at a time. Normally you would do this on a farm or ranch or somewhere less populated. Perhaps up in the hills, because there’s usually a heavy odor given off by the process. Also, if there’s a problem with the pressure release valve. they tend to explode. As you’re dealing with 100% alcohol, it tends to catch on fire easily.

I prefer not to be the teller of bad news to the new tenant, who appears to be a Gringa hippie girl, but a condominium in this high-density area is not the place to install a commercial still. I’m not sure at this point how this is going to turn out, as I’ve only told one of the gardeners that this is probably a dangerous situation, and perhaps he should let the neighbor be aware of it. Perhaps she might want to get a more rural rental house in a less developed area for her startup business. Even in  Baja you still need some common sense.

It’s been five days now and nothing happened so far. The still is still there, cooking away.  Maybe I should just knock on her door and see if she’s going to have a tasting.

Fuel Theft Brings Much Of The Country To A Standstill

Over on the mainland, where gasoline is delivered through underground pipes, there are gas shortages at the pump because the pipelines are being tapped and siphoned illegally. By the time the gas gets to its destination, it’s down to a trickle.

Thieves have taken so much fuel that the President of the Republic has closed the pipelines and tanker trucks guarded by federal police and soldiers are moving the fuel. But there are not enough tanker trucks, even though an extra 3500 have been pressed into service. Fuel is bound up in ships and pierside storage tanks. “There is no shortage of fuel in the country,” swears the president. “The problem is all in the logistics of getting it to the stations.”  Baja doesn’t have a dog in this fight, because we are not connected to the grid of pipes; our fuel comes here barged over to Rosarito, then delivered to us by tanker trucks or directly imported from the US by tankers too.

But the fuel shortage in places on the mainland is a crisis. It’s been going on for a couple of weeks, so delivery of critical goods have not been made, and store shelves are becoming empty. People are not getting basic needs like food and diapers, and are suffering the collapse of public transportation. Mobile police protection is impacted as police can’t get fuel for their vehicles and many officers are turning to patrolling on foot, horse and bicycle.

And from the other side, we have a “no apology” narrative of how and why the fuel thieves have grown this activity into a career. First, the how:

Alberto and his accomplices now go out “at two or three in the morning to avoid [the police and military] operations,” explaining that everything’s “calm at that time.”

Alberto learned his dangerous and illegal trade in Tierra Blanca, Veracruz, while working with the Zetas drug cartel. He explained the entire pipeline tapping process. Pemex’s “no digging” signs make the pipes easy to find, he said, explaining that they are usually buried just a meter or so underground. Once a pipeline is located, Alberto gets to work to perforate it, with three halcones– hawks or lookouts – positioned strategically to warn of any approaching authorities.

“First you solder on a nipple . . . then you put on a carbon steel valve and a clamp . . .” he explained. Once the pipeline has been pierced, the fuel shoots up into the air, Alberto said, “. . .so we immediately have to connect a hose to start to fill the tanks.” The pipeline picador, who has 10 years’ experience in Puebla, Veracruz and Tamaulipas, said he has never received any instructions or assistance from employees of the state oil company, Pemex. “They have nothing to do with it, one just learns how to do it,” he said, adding that the method he uses to tap pipelines is safer and faster than the method they used 15 years ago.

Asked what he does if the authorities arrive during the course of his work, Alberto responded: “If they’re very close, well, we run.”

Each pipeline tap, which Alberto can complete in just half an hour, yields enough fuel to fill two 30,000-liter tanker trucks.

This expert driller, who works with different gangs of fuel thieves, charges 5,000 pesos (US $260) for his services.

The drivers of the tankers filled with the illicitly obtained fuel earn between 500 and 1,000 pesos (US $26 to $52) for each load they transport, Alberto said.

Fuel from San Martín Texmelucan, which is located about 40 kilometers northwest of Puebla city, sells for 10 pesos a liter. At legitimate stations here, we pay about 19 pesos per liter.

Three pesos goes to the owner of the land where the pipeline was perforated, three pesos goes to security expenses, and the remaining four pesos is profit for the thieves themselves. Part of the security cost is men roving on motorcycles to alert criminal gangs of the whereabouts of authorities.

A large portion of the population of Texmelucan is involved in the illicit fuel trade in one way or another. If the owners of land where pipelines are located refuse to grant access to fuel thieves, they are routinely threatened. Some landowners who have declined to cooperate have seen their properties set alight while others have been killed. At other times authorities have arrived to arrest thieves as they’re sucking out the fuel, only to have to deal with women and children thrust out in front of the confrontation as human shields. Most of these are not forced; people in these towns are complicit in the fuel thievery.

Fuel theft is estimated to have cost Mexico $5 billion at today’s exchange rate during former president Enrique Peña Nieto’s six-year term. Our current president has drawn a red line with this illegal activity, willing to put his followers through some pain to stop it. But combating the crime is one of the biggest challenges faced by the new federal government.

Gangs involved in fuel theft often clash with authorities and each other, causing the homicide rate in some parts of the country, such as Guanajuato, to surge. People are dying over a liter of gas.

Countering the statement from the President that we have no shortage of fuel, that it’s only logistics, is the Wall Street Journal’s report that Mexico imported 45% less gasoline from the US in the first 10 days of January, compared to last year. But the period in which they were cut back partially coincides with the fuel shortage the government has explained is the result of López Obrador’s decision to close several major petroleum pipelines as part of the strategy to combat fuel theft.

A report published by The Wall Street Journal cited data from Houston and New York-based ClipperData which shows that under the new government, seaborne gasoline imports from the United States’ Gulf Coast have averaged  a 28% decline on the quantity of U.S. gasoline imported in December 2017 and January 2018, when former president Enrique Peña Nieto was in office, according to ClipperData.

However, our ports are stuffed with gasoline, and can take no more. The tanker trucks simply can not distribute it nearly as fast as pushing it through underground pipes can accomplish.

There are other factors that appear to be contributing to the prolonged fuel shortage.

The Wall Street Journal claims the shortages have laid bare the inefficiencies of Mexico’s refineries. According to Pemex figures, the nation’s six refineries operated at a daily capacity of 46.1% last year through November. Monserrat Ramiro, a commissioner on Mexico’s Energy Regulatory Commission, said the current crisis is the result of years of insufficient investment in logistics infrastructure such as storage tanks, pipelines and fuel terminals.

President López Obrador, who has pledged to “rescue” Mexico’s oil sector by upgrading existing refineries and building a new one on the Gulf Coast in Tabasco, has said repeatedly that the current gasoline shortage is due to logistics rather than a lack of supply.

Monserrat Ramiro wrote on Twitter, “Mexico’s gasoline supply is paralyzed by closed fuel pipelines, but there are other factors: Pemex refining and downstream infrastructure are a mess, AMLO has stopped importing U.S. light crude, that is necessary for mixing with Mexico’s heavier crude)

Now that the pipelines are empty, the huachicoleros (fuel thieves), drill the pipelines not for milking, but to damage the pipes and prolong the shortage to force public opinion to pressure the government to stop fighting them. The criminals intend to take citizens as hostages in the situation, with the intent of making the government resigned to their illegal practice.

But AMLO was elected on the platform of ending corruption, and he is saying now it’s time to draw that red line and suffer for a little while, in order to show who’s boss in this country: The citizens or the gangs.

A poll by the newspaper Reforma confirmed  73 percent chose to fight and 18 percent chose to give in to the corruption. For now. If this shortage drags on, those numbers could reverse.

And the huachicoleros could succeed if they manage to continue sabotaging the empty pipelines. Many more people will prefer to have gasoline despite the fact that Pemex continues to be robbed, so for the authorities it is a race against time to restore acceptable levels of supply.

Everyone is saying this is temporary, but how long can those 9,000 soldiers be deployed along the pipeline, and how long can those helicopters be hovering over the pipes? And what happens when they’re gone? The huachicoleros will surely be back for this easy career. The one thing that will stop it isn’t even under discussion: putting these thieves in prison for a long time. This is all about impunity. The realistic expectation that getting caught is not a big problem. Without a reliable and honest judicial system, this is never going to end.

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