The last shipment we saw had 8 kilos of coke in a tiny little space under the floorboards of the truck. I’m not so sure he needs a whole fleet yet. Granted, 8 kilos is a lot of money and requires a large network of dealers, but that single truck could probably transport five times as much across the border with little extra effort.
Well, we have plenty of time for character development and chances to see Gus face-off with Hector and Lydia risin’ to the occasion.
No pun intended!
What about Madrigal?
As I recall, Walt’s income didn’t become too much for Skylar to launder through the car wash until after Gus was gone and Walt was distributing to the Czech Republic through Lydia. At that point his income would be comparable to Gus’.
I don’t think it is unreasonable to assume that Los Pollos in 2003 is a much smaller chain than it becomes in the BB time frame. It exists (1) to launder Gus’ money, (2) to provide a transportation network in the US, and (3) to provide a business reason to have regular truck traffic across the Mexican border, bringing fired chicken batter from Gus’ original store to the stores in the US. Remember, Hector bought an ice cream shop in ABQ for the same reason.
As he moves from distribution to manufacturing he will need to expand the chain, both for increased sales to launder more money as well as to expand his meth market. Madrigal has either recently invested (or is about to invest) in Los Pollos, which will provide the capital needed for the expansion.
As for the laundry, it seems to me that a fast food restaurant would have limited need for commercial laundry (towels and aprons, maybe uniforms although during my brief employment at McD’s I seem to remember being responsible for washing my own smock). I would think a laundry the size of the one Gus is buying would need to be servicing hotels, full-service restaurants, and factories to have enough volume. Plus that gives Gus another distribution network that is not so directly correlated with Los Pollos locations.
And (4) to let Gus present a ‘respectable business owner’ face. The regular cartel guys are all known to the police as bad guys even if they can’t pin anything on them, even if they own an ice cream store or restaurant, but Gus is known to the police as a popular community leader who routinely raises money for charity and brings free food to the station occasionally. One of the reasons Gus is so successful at hiding his operations is that no one in law enforcement even thinks to look at him, I don’t think it’s just coincidence that he has a business that lets him put on a happy public face.
I agree, I don’t think Gus needs to tie everything in to Los Pollos Hemanos, and laundry gives a good excuse to move large volumes of things to lots of locations and to put people into lots of businesses. There are definite advantages to moving trucks full of linens to hotels all across the region. I also get the impression that all of Gus’s businesses are run well enough that they’d be successful if the drug trade was taken out entirely - Los Pollos Hermanos isn’t sitting empty during the day, and the cops are all familiar with it as a place to get food. So the laundry looks like a business owner diversifying successfully, it doesn’t need to be tight with his restaurant to make sense.
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I also get the impression that all of Gus’s businesses are run well enough that they’d be successful if the drug trade was taken out entirely - Los Pollos Hermanos isn’t sitting empty during the day, and the cops are all familiar with it as a place to get food. So the laundry looks like a business owner diversifying successfully, it doesn’t need to be tight with his restaurant to make sense.
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I don’t know about “successful if drug trade was taken out entirely”. It is made clear that Gus takes pride in his “fronts” and wishes to see them succeed.
The income becomes a problem as soon as Walt goes to work for Gus. On his first payday, he shows up at the car wash with a hand truck filled with soda cases hiding over a quarter million dollars in 50s. Skyler says that’s at least 9 months worth of legit car wash money.
She gamely tries to launder it at the cash register, ~$50 at a time, but it’s clear, even at that stage, the car wash is not a realistic option.
Well, on paper, we could assume Gus’s fronts are doing very well, anyway, since the whole point of money laundering is to create a plausible legal source of income. All the times we saw how busy the laundry was in Breaking Bad, it’s possible they would do a hotel-sized load, put it on a truck, send the trunk around the block a few times and then unload it to wash it again, to create the appearance of a busy, thriving company.
It would actually be a problem for Gus if the laundry and restaurant were generating significant profits, since combining those with the drug money that he’s trying to hide could be suspicious.
After giving it some thought, I need to amend some of my guesses:
Madrigal must already own (or partly own) Los Pollos - otherwise there is no way to get Mike’s money onto Madrigal’s books so they can pay him as a consultant.
The laundry might not be a very good business for laundering money - I can’t really see it being a cash business if the customers are all commercial entities. Maybe some of the employees can be paid in cash to reduce expenses and increase profit.
Los Pollos needs to have enough revenue that the money Gus needs to launder does not stick out too much. The goal might be to break even on actual revenue and any profit comes from the laundered cash.
That said, Gus does not to launder all or even most of his money. He has the capability to smuggle cash out of the country into offshore accounts (not sure how that works, but offshore accounts were discovered in BB). He only needs enough money laundered to support his lifestyle in the US, which as we saw in BB is not out of line with his position as the owner of a chain of restaurants. As opposed to Walt, who is trying to launder a large lump sum to leave to his family in the very near future.
Can you explain what you mean by this? I don’t understand why Mike can’t just give his money to Madrigal, and then they pay him a paycheck for a few months. What does Los Pollos have to do with it?
There has to be a believable way to get the money onto Madrigal’s books without leaving a paper trail for auditors to find. From what we have seen, Madrigal itself is a supplier to commercial industries - chemicals and capital equipment. There is no reason why Mike would be doing business directly with Madrigal as a customer, and nobody is going to do any $200k transaction in cash anyway (Madrigal would at some point need to deposit the cash, and any cash deposit over $10k is reported to the government).
This is where Los Pollos comes in. The business at Los Pollos is heavily cash based, in small ($10-$20) increments. False transactions can be entered (1) if they are small enough and (2) if the total dollar amount of false transactions is small relative to the real transactions (assuming you want to minimize the possibility of getting caught). You might remember the scene in BB where Skyler is entering fake transactions into the register at the car wash while “thanking” imaginary customers.
Now with enough fake transactions Mike’s money is on Los Pollos’ books. If Los Pollos is a subsidiary of Madrigal, they can pass the money on to Madrigal as profit (there might be other ways depending on the exact structuring of the Los Pollos/Madrigal relationship - I am not an accountant).
As noted, Mike’s money amounts to little more than a rounding error on Madrigal’s books. Mike was worried because he doesn’t think at that scale. It doesn’t have to come through Fring. It’s petty cash, and Mike is just a no-show employee.
I don’t think it’s a problem - my impression from BB is that most of the drug money doesn’t get laundered. He makes a tidy extra profit has a few people like Mike on his corporate payroll, but people like street dealers and the Cartel get paid with ‘dirty’ cash and deal with it themselves, and a lot of the money goes into hidden overseas accounts that he keeps secret from the authorities. I could be wrong about that, but Gus just seems like the type who would hate to make a restaurant that didn’t actually work as a restaurant, and I’m pretty sure he’s not showing the Walt-sized profit he makes to the IRS.
But why does Mike’s money need to get onto Madrigal’s books? Lydia said she was paying him as a consultant (first logistics, then changed to security) from her huge ($1 million/week) operating budget that often brings in specialists and that no one would take particular note of it. If they tried to take money from a consultant then pay the money, that would raise a lot more red flags than just paying him. I think Gus took Mike’s money, then paid Lydia directly off the books to pay Mike, with her accepting the (small) risk of the embezzlement being noticed as a one-shot deal motivated either by the cash or some kind of favor swap. Trying to put Mike’s money on the books just seems to increase the risk of getting caught while not giving Lydia any incentive to take the risk.
Maybe Madrigal will use it to bribe regulators and such?
We know at some point Los Pollos becomes a Madrigal subsidiary, presumably under Gus’ management (and with Gus reporting to Herr Schuler in Germany), I am just speculating that this has happened already in curren BCS time. The cleanest deal would by for Gus to take Mike’s money into Los Pollos via fake transactions (the basis of Gus’ money laundering), then pass the money up to Madrigal as operating profit from Los Pollos. This offsets Lydia’s outlay to “hire” Mike. This would also be how Gus launders the money he personally uses in ABQ - send it up the chain to Madrigal in the form of profits while drawing a hefty salary (and big bonuses for always turning a hefty profit).
Question about the drug distribution from a non-BB fan. During the conference call, wasn’t it said that distribution was going to be through Gus? Which got Hector all angry? I thought that got Nacho’s dad off the hook.
Why - after that - did Nacho tell his dad that Hector would be contacting him? Did Nacho know Hector would ignore his bosses?
I agree with everyone - good ep. My biggest problem was with Jimmy’s cluelessness towards Kim when she was trying to get out the door. I guess I can see that as in character, but just makes his character one I don’t like as much.
And I agree with those who feel that many lawyers - especially those in class actions - are motivated by their fee more than any benefit for the claimants.
I also agree with the opinion that Howard’s reaction towards Jimmy was more out of frustration than hatred.
I’m not so sympathetic towards Irene as most seem. She was allowing herself to be played by the law firms. Shouldn’t get into a position of responsibility, if you aren’t going to pay minimal attention.
A couple of INCREDIIBLY MINOR points - I got a kick out of the silly kitten cookies, but was surprised that Jimmy would try to pass them off as homemade. And would he really need that many shoes to get one close to Irene’s size?
When Kim’s car got stuck, my wife said, “It’s a small car - push it!” And I said, “Or put something under the wheels.” Whaddya know - she did both! 
I’m pretty sure that if a little one store restaurant can garner up enough fake transactions to launder $200K, then a huge multi-national corporation could do it easier and quicker.
I think at this point Los Pollos is a small chain, so the transactions are spread out among multiple stores. In order for Madrigal to launder the money they would need to funnel it through another one of their subsidiaries which handles small cash transactions (they can’t just take a fake cash payment for a piece of industrial equipment - that money would be reported as soon as it was deposited into the bank). That would require much more widespread knowledge of the scheme inside Madrigal and more risk of exposure.
My speculation is that Los Pollos is the piece of Madrigal that is used to launder money.
I’m sure a multi-national corporation is depositing or moving millions of dollars a day. I don’t think an extra $200k would cause any additional reporting requirements.
Isn’t that why Lydia (is it Lydia) was sort of laughing? At the fact that Mike thought that $200k would mean anything to anybody in a huge corporation.