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Are human-smuggling cartels at the U.S. border earning $500 million a year?

Homeland Security Secretary Kirstjen Nielsen told a Senate panel on May 15 that smuggling is "lining the pockets of transnational criminal organizations." (Video: Senate Homeland Security and Government Affairs Committee)

“To be clear — human smuggling operations are lining the pockets of transnational criminals. They are not humanitarian endeavors. Smugglers prioritize profit over people. And when aliens pay them to get here, they are contributing $500 million a year — or more — to groups that are fueling greater violence and instability in America and the region.”
— Homeland Security Secretary Kirstjen Nielsen, in testimony before the Senate Homeland Security and Governmental Affairs Committee, May 15, 2018

Nielsen’s claim that smuggling cartels make $500 million a year bringing people across the U.S. border caught our eye after the Washington Times made it the main story of its print edition. Regular readers know that we’ve often warned about accepting at face value numbers concerning illicit activities, such as human trafficking or smuggling, so we were curious to learn how this figure was developed.

The Facts

The math is pretty simple. A Homeland Security official explained that the agency assumed that transnational criminal organizations receive an average of $5,000 per person smuggled, a number based on interviews with undocumented immigrants who are caught. DHS apprehends about 300,000 people a year who try to illegally cross the border each year, so the agency took one third of that number 100,000  and multiplied it times $5,000, yielding a figure of $500 million.

“We think the number of people paying smugglers is actually much higher but wanted to provide a conservative estimate,” the official said. “This, of course, also does not include those who pay to be smuggled across our borders and are not caught.”

Some might say it’s conservative. Others might say it’s arbitrary. There’s really no rhyme or reason for why one-third of the people caught are being counted, especially since presumably people who are not caught also might rely on smugglers.

Gabriella Sanchez is the author of “Human Smuggling and Border Crossings,” a 2016 book based on interviews with smugglers. She researches migrant smuggling at the Migration Policy Center in Florence. When it comes to smuggling estimates, she said, “the numbers are almost always made up.”

Sanchez said one problem with Nielsen’s figure is that it assumes a $5,000 smuggling fee. That’s a reasonable figure for getting across the border between the United States and Mexico, which she said is between $4,500 and $5,500, though in March smugglers were offering a 20 percent discount because they were not getting enough clients.

But Sanchez said Mexicans are no longer migrating to the United States  over the past 10 years, migration from Mexico has statistically vanished, according to the Pew Research Center  so the fees paid by the Central Americans fleeing Guatemala, Honduras and El Salvador are likely to be higher.

But there’s another wrinkle: Many people will never finish paying off their fees. “The facilitators are flexible because if not, they know a client can go to someone else, so they cut prices to get clients and then clients vanish,” she said.

Moreover, she said, the money paid to smugglers stays along the trail, as smugglers need to pay rent, too, contrary to the image conjured up by Nielsen of “transnational criminals.” Smugglers are often just low-level independent operators, loosely connected to others, trying to make a buck. She said the biggest cost in the smuggler operation was corruption — the fees paid to police and border agents.

One smuggler told Sanchez his profit margin was just 25 to 30 percent. The Pulitzer Prize-winning report by the Arizona Republic on the impact of President Trump’s proposed border wall quoted a smuggler, “Alexis,” as saying he kept about $2,500 of the $5,000 to $6,000 fee, with the rest going to pay off helpers and police.

“To get migrants through segments of the border you do not need organized crime,” Sanchez said. “You need an immigration agent.”

Interestingly, Nielsen’s figure appears to be a lowball estimate. It is much lower than a previous estimate from Immigration and Customs Enforcement (ICE), from 2003, that global profits from human smuggling amount to $9.5 billion. ICE never explained how that figure was calculated, and it later morphed into the incorrect claim that child sex trafficking in the United States yielded profits of $9.5 billion, but that’s another story.

More recently, the United Nations Office on Drugs and Crime estimated in a 2010 report that human smuggling into the United States earned revenue of $6.6 billion in 2008. But those numbers were based on previous high rates of migration by Mexicans — 661,000 apprehensions a year, with a probability of being apprehended at 20 percent  and the report noted that the Mexican market had been in sharp decline since 2005. But it also assumed smugglers charged $2,000 per person.

The Mexican Migration Project, the source of the United Nations’ 20 percent apprehension rate for Mexicans, says the rate is now about 12 percent. But researchers warn that’s based on a very small number and so it is unreliable.

“Undocumented migration from Mexico has been negative for 10 years: More people are going back to Mexico than are entering the U.S.,” said Douglas Massey, of Princeton University, co-director of MMP. “In fact, the number of apprehensions reported by the DHS is very small  the lowest number of since 1971  and in that year there were only 1,500 Border Patrol Officers, whereas today there are 19,000 officers. The number of apprehensions per officer are at their lowest point since 1942. In 2016, less than half of all apprehensions were Mexicans. Illegal migration from Mexico is effectively over.”

The U.N. report estimates that without Mexican migration, revenue earned by smugglers might be about $1 billion, assuming costs as high as $10,000 for a trip from the southeastern coast of Mexico.

The Pinocchio Test

Nielsen’s $500 million estimate is not wildly off base but it appears derived from arbitrary metrics. It is based on smuggling costs at the border, even though many illegal immigrants these days have a longer route to travel. She’s only counting one-third of those apprehended, even though many people who use smugglers are not caught. So the overall figure of smuggler revenue could be higher.

But at the same time, it’s unclear how much of these fees end up in the pockets of “transnational criminal organizations,” as she claimed.  As Sanchez noted, the fees often are not fully paid  or actually mostly go to corrupt border police or agents. The actual amount that goes to criminal gangs could be well below $500 million, especially since many smugglers are independent operators.

The truth is we do not know. While it’s laudable that Nielsen tried to be conservative, she should have made clear that this was less of a hard figure suitable for newspaper headlines and more of a fuzzy guesstimate.

Two Pinocchios

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Two Pinocchios
"Smugglers prioritize profit over people. And when aliens pay them to get here, they are contributing $500 million a year — or more — to groups that are fueling greater violence and instability in America and the region.”
in testimony before the Senate Homeland Security Committee
Tuesday, May 15, 2018