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The Top 5 Longreads of the Week

Below, our favorite stories of the week. Kindle users, you can also get them as a Readlist.

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The Innovation That Helped 'El Chapo' Create a Multi-Billion-Dollar Drug Trafficking Empire

But Chapo’s greatest contribution to the evolving tradecraft of drug trafficking was one of those innovations that seem so logical in hindsight it’s a wonder nobody thought of it before: a tunnel. In the late 1980s, Chapo hired an architect to design an underground passageway from Mexico to the United States. What appeared to be a water faucet outside the home of a cartel attorney in the border town of Agua Prieta was in fact a secret lever that, when twisted, activated a hydraulic system that opened a hidden trapdoor underneath a pool table inside the house. The passage ran more than 200 feet, directly beneath the fortifications along the border, and emerged inside a warehouse the cartel owned in Douglas, Ariz. Chapo pronounced it “cool.”

When this new route was complete, Chapo instructed Martínez to call the Colombians. “Tell them to send all the drugs they can,” he said. As the deliveries multiplied, Sinaloa acquired a reputation for the miraculous speed with which it could push inventory across the border. “Before the planes were arriving back in Colombia on the return, the cocaine was already in Los Angeles,” Martínez marveled.

Eventually the tunnel was discovered, so Chapo shifted tactics once again, this time by going into the chili-pepper business. He opened a cannery in Guadalajara and began producing thousands of cans stamped “Comadre Jalapeños,” stuffing them with cocaine, then vacuum-sealing them and shipping them to Mexican-owned grocery stores in California. He sent drugs in the refrigeration units of tractor-trailers, in custom-made cavities in the bodies of cars and in truckloads of fish (which inspectors at a sweltering checkpoint might not want to detain for long). He sent drugs across the border on freight trains, to cartel warehouses in Los Angeles and Chicago, where rail spurs let the cars roll directly inside to unload. He sent drugs via FedEx.

But that tunnel into Douglas remains Chapo’s masterpiece, an emblem of his creative ingenuity. Twenty years on, the cartels are still burrowing under the border — more than a hundred tunnels have been discovered in the years since Chapo’s first. They are often ventilated and air-conditioned, and some feature trolley lines stretching up to a half-mile to accommodate the tonnage in transit.

The New York Times reports that Joaquín Guzmán Loera—leader of the Sinaloa Drug Cartel—has been arrested. Nicknamed El Chapo, Guzmán’s cocaine and marijuana trafficking empire is believed to be worth several billion dollars. Patrick Radden Keefe closely examined the Sinaloa Drug Cartel and Chapo’s leadership of the organization for The New York Times Magazine in the summer of 2012.

See also: “Inside the Incredible Booming Subterranean Marijuana Railroad.” (GQ, Jan. 12, 2014)

And: “The Narco Tunnels of Nogales.” (Businessweek, Aug. 2, 2012)

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Photo of elaborate cross-border drug smuggling tunnel discovered inside a warehouse near San Diego via Wikimedia Commons

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Taking Care of Business: A Reading List

Longreads Pick

This week’s picks from Emily include stories from Orange Coast Magazine, The New York Times, Business Insider, and Bloomberg Businessweek.

Source: Longreads
Published: Feb 16, 2014

Taking Care of Business: A Reading List

Hackers! Gen Y CEOs! Multibillion dollar success stories! International expansion! Top-secret projects! Cute clothes! Hamburgers! Capitalism is so exciting, and so are these longreads about popular U.S. companies.

1. “In-N-Out’s Burger Queen.” (Patrick J. Kiger, Orange Coast, Jan. 2014)

31-year-old Lynsi Snyder presides over In-N-Out’s $1.1 billion industry, founded by her grandparents in the 1940s. What’s the company secret? Never change. Seem counterintuitive? Not if you’ve ever had an In-N-Out burger.

2. “You Can Explain eBay’s $50 Billion Turnaround With Just This One Crazy Story.” (Nicholas Carlson, Business Insider, Feb. 2014)

A group of six twenty-somethings fly to Sydney, Australia on a secret mission for eBay. Carlson brings the eBay executives and employees to life; I felt like I was watching “The Social Network.”

3. “A Sneaky Path Into Target Customers’ Wallets.” (Elizabeth A. Harris, Nicole Perlroth, Nathaniel Popper and Hilary Stout, Washington Post, Jan. 2014)

Merry Christmas, you’ve been hacked! In the midst of the 2013 holiday season, millions of Target customers received an ominous email; Cybercriminals targeted the store’s credit card machines, stole card numbers and PINs and endeavored to sell the information in the creepy corners of the internet.

4. “The J. Crew Invasion.” (Emma Rosenblum, Bloomberg Businessweek, Nov. 2013)

J. Crew executives hope the brand’s casual-chic niche will find a foothold in London.

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Photo: Kevin Dooley

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Regulating the $1.5 Billion E-Cigarette Industry

businessweek-ecigs

Even without the combustion, nicotine is a vasoconstrictor that narrows blood vessels and drives up blood pressure. Doing that a dozen times a day is less bad than getting lung cancer, but it’s still not great. Besides, there is no study on what inhaling those “generally recognized as safe” compounds might do to your lungs if you inhale them daily for a few decades. It’s hard to imagine that the health effects could be worse than setting something on fire and deliberately breathing the smoke. But they’re probably not as good as quitting. “The antismokers think we’re going to win—that we can get to zero tobacco,” says Kleiman. If that’s what you believe, then you’re likely to endorse stiff restrictions on e-cigarettes. On the other hand, if you think U.S. tobacco consumption will stay stubbornly stuck between 10 percent and 20 percent of the population for the foreseeable future—which means tobacco deaths will remain in the hundreds of thousands annually—you’re more likely to be agitating for the federal government to take a light hand, even if it means opening the door to the possibility of a renewed national mania for nicotine.

Among the FDA’s most difficult decisions will be determining whether e-cigarettes will be a gateway product, encouraging young smokers to develop a nicotine habit that might lead to tobacco use. After all, many of the things that make e-cigarettes attractive to smokers make them even more attractive to minors. It’s actually pretty unpleasant to start smoking—it causes dizziness, it causes coughing, and it usually takes kids a while to learn to inhale—but anyone can inhale e-cigarette vapor on the first puff. And since e-cigarettes don’t have much odor, they’re harder for parents to detect. During the debate over New York’s policy, a September report from the Centers for Disease Control and Prevention showing e-cigarette use on the rise among teenagers was prominently discussed. Spokesmen for Altria Group (MO), Reynolds American (RAI), and Lorillard—the Big Three of tobacco—are in agreement that children should be prevented from buying e-cigarettes, just as they are prevented from buying the regular kind.

Megan McArdle, in Bloomberg Businessweek, on the regulatory and health questions arising from e-cigarettes. Read more from Bloomberg Businessweek.

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Facebook's Real Names Problem

One thing about some of the new apps that will come as a shock to anyone familiar with Facebook: Users will be able to log in anonymously. That’s a big change for Zuckerberg, who once told David Kirkpatrick, author of The Facebook Effect, that “having two identities for yourself is an example of a lack of integrity.”

At the time of Facebook’s founding, there was no such thing as real identity online. Facebook became the first place where people met one another as themselves, and the company was stubborn about asking users to sign in and share material with their own names. A Facebook account became a sort of passport to the rest of the Web, and with its success came new problems. No teenager wants to share insane party pics with a group of friends that may include his or her parents and teachers. And dissidents in parts of the world where speaking freely can be incriminating avoided the service in favor of alternatives such as Twitter, where real names are optional.

Former Facebook employees say identity and anonymity have always been topics of heated debate in the company. Now Zuckerberg seems eager to relax his old orthodoxies. “I don’t know if the balance has swung too far, but I definitely think we’re at the point where we don’t need to keep on only doing real identity things,” he says. “If you’re always under the pressure of real identity, I think that is somewhat of a burden.” Paper will still require a Facebook login, but Zuckerberg says the new apps might be like Instagram, which doesn’t require users to log in with Facebook credentials or share pictures with friends on the social network. “It’s definitely, I think, a little bit more balanced now 10 years later,” he says. “I think that’s good.”

Brad Stone and Sarah Frier, in Bloomberg Businessweek, on the challenges for Facebook on its 10th anniversary. Read more about Facebook in the Longreads Archive.

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Longreads Best of 2013: My Favorite Stories About Taxes (and Twist-Ties)

Photo: 59937401@N07, Flickr

Atossa Araxia Abrahamian is a writer and an editor.

Taxes aren’t boring—they’re just supremely difficult to write about in a compelling way. These three stories stand out because they illustrate the far-reaching consequences of different countries’ tax policies through a few very influential people:

1. “Marty Sullivan figured out how the world’s biggest companies avoided billions in taxes. Here’s how he wants to stop them” (Steven Pearlstein, Washington Post, 2013)

In his affectionate profile of tax expert Marty Sullivan, Steven Pearlstein breaks down everything that’s wrong about the US tax code in Sullivan’s nonpartisan, almost technocratic view—and goes on to explain why politics make it so hard to alter, let alone fix, the system. Not exactly action-movie material, but it’s handled so deftly that I couldn’t put it down.

2. “A Tale of Two Londons” (Nicholas Shaxson, Vanity Fair, 2013)

In Vanity Fair, longtime tax writer Nicholas Shaxson shows how the City of London became a hub for tax-free global capital through the story of One Hyde Park, the world’s most expensive residential building, its fabulously wealthy and faceless owners, and the offshore accounts they used to buy and register the properties anonymously.

3. “Man Making Ireland Tax Avoidance Hub Proves Local Hero” (Jesse Drucker, Bloomberg, 2013)

Finally, Bloomberg’s Jesse Drucker profiles Feargal O’Rourke, the man who helped transform Ireland into a “hub for tax avoidance” for multinationals like Apple and Facebook. Drucker withholds judgment (this is Bloomberg, headline and all) but O’Rourke’s mercenary wiles shine through a few well-chosen anecdotes. Choice quote, on Breaking Bad: “I don’t know what it says that we can be rooting for a guy on the dark side of the law.”

Bonus Pick: Most Fascinating Thing I Learned from a Story This Year

Twist-Ties vs. Plastic Clips: Tiny Titans Battle for the Bakery Aisle” (Paul Lukas, Bloomberg Businessweek, 2013)

My favorite business stories are the ones that reveal how much time, energy and thought goes into seemingly mundane consumer goods. This Businessweek article about the ‘bakery bag closure and reclosure market’ is a great example of that. Did you know bag closures generate about $10 million in sales per year? That studies have failed to resolve whether consumers prefer clips or twist-ties? And that there are people whose job it is to sell commercial bakeries on the virtues of these objects? All of this makes perfect sense, of course (hi, capitalism!) but it takes a story like this one to get you thinking.

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The Anatomy of a Tweet

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“For all the possibilities of APIs, there are also limits. Another tweet field, ‘withheld_copyright,’ if set to ‘true,’ lets you know that a tweet is in trouble—that its content has raised flags and hackles over copyright. The text of the tweet, in that case, may be suppressed. The ‘withheld_in_countries’ field can provide a list of the nations in which the tweet is banned. Another field has a telling name: ‘possibly_sensitive.’ It’s set to either true or false. The field indicates whether a tweet links to potentially offensive things such as ‘nudity, violence, or medical procedures.’ (If ever you wanted a snapshot of our world’s anxieties in three terms, there you have it.) As a user you can check a box on your profile so that the media you link to is automatically flagged this way. If you don’t, you risk having your pictures of your medical procedure marked as objectionable by an offended reader and thus put ‘in review,’ the Twitter version of limbo.”

Paul Ford, in Bloomberg Businessweek, on the metadata of a tweet and what makes Twitter work. Read more from Ford.

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Cover via Richard Turley

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“‘We are going to be poised to benefit from the aging of America, the baby boomers,’ Foley said. Deaths in the U.S. are forecast to increase at an average annual rate of 1.1 percent over the next five years. At SCI, earnings per share rose 26 percent in the first half of 2013. ‘This growth,’ Foley said, ’was driven in large part due to the strong flu season’—i.e., a lot of old people got sick and died last winter.”

Meet the company that’s taking over the funeral industry. Then read more Longreads picks from Bloomberg Businessweek.

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