| CULIACAN, Mexico
CULIACAN, Mexico A decade after its leader escaped from prison, Mexico's Sinaloa drug cartel is the most powerful organized crime gang in the Americas despite a multi-billion dollar U.S.-Mexico crackdown.
Joaquin "Shorty" Guzman, 53, is arguably the world's most infamous drug trafficker, and has extended his empire from Colombia to China since he broke out of prison in a laundry van on January 19, 2001.
His ability to expand despite Mexican President Felipe Calderon's four-year-old war on the drug gangs demonstrates the Sinaloa cartel's firepower as well as its ability to outmaneuver and bribe security forces.
"The Sinaloans are the strongest in Mexico, their presence in the United States and across the world is much broader than the other cartels," said a senior U.S. law enforcement official who declined to be named.
Guzman, nicknamed "shorty" because he stands at about 5 feet tall, has businesses ranging from growing marijuana to smuggling Colombian cocaine and making methamphetamine with imports from Asia.
Forbes magazine estimates his wealth at $1 billion, and experts say his cartel moves up to two-thirds of drugs into the United States.
"Guzman is number one because of the sheer volume of drugs he handles and the violence he has unleashed," said another U.S. anti-drug official.
Mexico knows it cannot stem insatiable U.S. demand for drugs, but the growing power of Guzman's cartel to corrupt officials, extort businesses and control parts of the country is a major concern as the oil-producing nation aims to convince investors it is an attractive market.
The health of Guzman's business is on show everywhere in Sinaloa's capital Culiacan, despite the state's main legal export being humble tomatoes. The city, the cradle of Mexican drug trafficking since the 1960s, is dotted with money changing outlets, jewelry stores and luxury car showrooms.
Even some of the city's legal businesses say Guzman's cartel is a key player in the economy and that it would be bad for business if he were caught or killed.
"It wouldn't suit us. Drugs are part of the economy here," said the owner of one luxury business that has drug traffickers among its clients.
Mexican officials blame Guzman, believed to be hiding out in a number of plush safe houses across the country, for sparking the country's vicious drugs war in 2006 by sending his henchmen to fight for smuggling routes into eastern Texas.
That offensive and growing drug violence elsewhere in Mexico drew a tough response from Calderon, who sent the military to try to restore order shortly after he took power in late 2006. But since then, more than 34,000 people have died with the death toll rising sharply each year.
PACT WITH THE DEVIL?
Amid the mayhem of severed heads and blood-stained streets, Guzman and his right-hand man Ismael Zambada have adeptly taken territory from gangs weakened by army operations while bringing in raw materials from China to make meth, using Africa as a route for cocaine into Europe, and growing their business in Colombia and across Central America.
"In the past five years, the Sinaloans have transformed themselves into a global criminal organization with operations in 52 countries," said Edgardo Buscaglia, a drug trade export at Mexico's private ITAM university, who compares the Sinaloa cartel's reach to the Russian mafia in the 1990s.
Guzman won a war with rivals that made Sinaloa the second most deadly drug war state between late 2006 and 2010, and he has expanded his power elsewhere.
After a long and brutal campaign against the Arellano Felix cartel, Guzman recently secured the prized border city of Tijuana, the gateway to California's hugely profitable drug market.
Guzman's jailbreak, his ability to avoid capture for so long and his expansion despite an army campaign have led to accusations that Mexico's government is favoring the Sinaloans as part of a strategy to reduce the death toll by allowing one all-powerful cartel to take control.
"All the government's actions over the past three years have propagated an almost total hegemony of the Sinaloa cartel in Mexico," said Anabel Hernandez, author of a new book that accuses Calderon's security minister of protecting the gang.
The government flatly denies any such strategy and points to the July killing of the Sinaloa cartel's No. 3 capo Ignacio Coronel, who controlled methamphetamine trafficking before he was shot dead in an upscale suburb of Guadalajara in western Mexico.
While Guzman's cartel is clearly Mexico's most powerful, it still faces challengers. The feared Zetas gang, based in northeastern Mexico, has expanded aggressively and is seen by experts as the strongest threat to the Sinaloans.
Led by former elite soldiers who switched sides to join organized crime in the 1990s, the Zetas have grown quickly over the past few years after splitting from the Gulf Cartel. They are known to operate widely from Guatemala to Texas and often co-opt existing gangs to do their dirty work.
(Additional reporting by Mica Rosenberg and Robin Emmott; writing by Robin Emmott; Editing by Kieran Murray)