[Senate Hearing 105-376]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 105-376

 
        U.S. AND MEXICAN COUNTERDRUG EFFORTS SINCE CERTIFICATION

=======================================================================

                             JOINT HEARING

                               BEFORE THE

            SENATE CAUCUS ON INTERNATIONAL NARCOTICS CONTROL

                                AND THE

                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                       ONE HUNDRED FIFTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 29, 1997

                               __________

  Printed for the use of the Senate Caucus on International Narcotics 
         Control and the Senate Committee on Foreign Relations



                               

                      U.S. GOVERNMENT PRINTING OFFICE
 44-791 CC                   WASHINGTON : 1998



            SENATE CAUCUS ON INTERNATIONAL NARCOTICS CONTROL

                    CHARLES GRASSLEY, Iowa, Chairman

ALFONSE D'AMATO, New York            JOSEPH R. BIDEN, Jr., Delaware
FRANK MURKOWSKI, Alaska              BOB GRAHAM, Florida
JEFFREY SESSIONS, Alabama            DIANE FEINSTEIN, California


                     COMMITTEE ON FOREIGN RELATIONS

                 JESSE HELMS, North Carolina, Chairman

RICHARD G. LUGAR, Indiana            JOSEPH R. BIDEN, Jr., Delaware
PAUL COVERDELL, Georgia              PAUL S. SARBANES, Maryland
CHUCK HAGEL, Nebraska                CHRISTOPHER J. DODD, Connecticut
GORDON H. SMITH, Oregon              JOHN F. KERRY, Massachusetts
CRAIG THOMAS, Wyoming                CHARLES S. ROBB, Virginia
ROD GRAMS, Minnesota                 RUSSELL D. FEINGOLD, Wisconsin
JOHN ASHCROFT, Missouri              DIANNE FEINSTEIN, California
BILL FRIST, Tennessee                PAUL D. WELLSTONE, Minnesota
SAM BROWNBACK, Kansas

                     James W. Nance, Staff Director
                 Edwin K. Hall, Minority Staff Director

                                  (ii)




                            C O N T E N T S

                              ----------                              
                                                                   Page

Banks, Samuel H., Acting Commissioner, U.S. Customs Service, 
  Department of Treasury.........................................    53
    Prepared statement...........................................    55
Davidow, Hon. Jeffrey, Assistant Secretary of State for Inter-
  American Affairs...............................................    40
    Prepared statement...........................................    42
Ferrarone, Donald F., Former Special Agent-in-Charge, Houston 
  Field Division, Drug Enforcement Administration, U.S. 
  Department of Justice..........................................    72
    Prepared statement...........................................    75
Godson, Roy, Ph.D., Professor of Government, Georgetown 
  University, President, National Strategy Information Center....    78
    Prepared statement...........................................    80
Kneir, Hon. Thomas, Deputy Assistant Director, Organized Crime 
  and Drug Branch, Federal Bureau of Investigation...............    58
    Prepared statement...........................................    59
McCaffrey, Hon. Barry R., Director, Office of National Drug 
  Control Policy.................................................    14
    Prepared statement...........................................    21
Milford, James, S., Jr., Acting Deputy Administrator, Drug 
  Enforcement Administration, U.S. Department of Justice.........    46
    Prepared statement...........................................    48

                                Appendix

Additional Material Submitted for the Record
    Prepared statement of Senator Russell D. Feingold............    91
Additional Questions Submitted for the Record to Barry R. 
  McCaffrey, Director, Office of National Drug Control Policy
    Questions Submitted by Senator Helms.........................    92
    Questions Submitted by Senator Grassley......................   103
    Questions Submitted by Senator Biden.........................   105
Additional Questions Submitted for the Record to Jeffrey Davidow, 
  Assistant Secretary of State for Inter-American Affairs
    Questions Submitted by Senator Helms.........................   108
    Questions Submitted by Senator Biden.........................   111
Additional Questions Submitted for the Record to James S. 
  Milford, Jr., Acting Deputy Administrator, Drug Enforcement 
  Administration, U.S. Department of Justice
    Questions Submitted by Senator Helms.........................   113
    Questions Submitted by Senator Grassley......................   117
Additional Questions Submitted for the Record to Samuel H. Banks, 
  Acting Commissioner, U.S. Customs Service, Department of 
  Treasury
    Questions Submitted by Senator Helms.........................   119
    Questions Submitted by Senator Grassley......................   136
Additional Questions Submitted for the Record to Thomas Kneir, 
  Deputy Assistant Director, Organized Crime and Drug Branch, 
  Federal Bureau of Investigation
    Questions Submitted by Senator Helms.........................   141
    Questions Submitted by Senator Grassley......................   143



        U.S. AND MEXICAN COUNTERDRUG EFFORTS SINCE CERTIFICATION

                              ----------                              


                      WEDNESDAY, OCTOBER 29, 1997

             Senate Caucus on International
             Narcotics Control and Senate Committee
                                      on Foreign Relations,
                                                    Washington, DC.
    The Senate Caucus on International Narcotics Control and 
the Senate Committee on Foreign Relations met jointly, pursuant 
to notice, at 2:10 p.m. In room SD-106, Dirksen Senate Office 
Building, Hon. Paul Coverdell and Hon. Charles E. Grassley, 
presiding.
    Present from Foreign Relations Committee: Senators 
Coverdell, Hagel, Frist, Biden, Dodd, Kerry and Feinstein.
    Present from Senate Caucus on International Narcotics 
Control: Senators Grassley, Sessions, and Graham [Senators 
Biden and Feinstein are members of both the caucus and the 
committee].
    Senator Coverdell. Ladies and gentlemen, let me bring to 
order a joint meeting of the Foreign Relations Committee and 
the Senate Caucus on International Narcotics Control, chaired 
by Senator Grassley of Iowa.
    We're both going to make opening statements then turn to 
our first panel, General McCaffrey, and I'm going to turn to my 
good colleague, Senator Grassley, for his opening statement.
    Senator Grassley. First of all, thanks to General McCaffrey 
and all the other witnesses who are joining Senator Coverdell 
and me and other members of the Caucus and the committee at 
this critical hearing.
    As everyone in this room knows, our growing contact with 
Mexico is one of our most--in fact, you might say, the single 
most--important relationship. And what both of our countries do 
to deal with the calamity of drug production and use is one of 
our most important efforts.
    This hearing is to address concerns about the nature of 
cooperation with Mexico. It follows up on questions raised 
earlier this year about the extent of that cooperation. 
Congress raised a number of concerns about the direction as 
well as the scope of our joint efforts to deal with problems 
that seem to undermine it.
    I believe that the Congress made clear its concerns that we 
not just have more high-level happy talk, but real results. 
This is one of the reasons that the Congress asked for the 
detailed report on progress to this point since March.
    We received that report on September 15. While it contains 
a lot of information, I believe that we need to hear more about 
the subject. It is like a lot of government reports--it is long 
on inputs, short on outcomes, and even some of the outcomes are 
not all that they appear to be. The Congress is in the process 
of making decisions on Mexico in the context of cooperation on 
drugs. We need--the public needs--more substance.
    The report, for example, talks about Operation Success that 
resulted in the seizure of almost 3 tons of cocaine. That is 
all well and good, but what is not mentioned is that the 
seizure was of drugs fished out of the water. No one was 
arrested. No boats were seized. No one knows who was moving the 
drugs. In short, this was about Operation ``Partial'' Success.
    The report also talks about working groups, and also, 
individuals who have been trained. That is very important. But 
what is left out is how many groups are truly operating, how 
many arrests there were of key figures, how many extraditions, 
how many prosecutions of major figures. The report skates over 
these because the results are not there.
    Now, I do not want to get into a numbers game or into so-
called ``body counts'', but we need to understand something. 
While we definitely need cooperation to achieve a common 
purpose, cooperation by itself is not a value. It is a means to 
an end, it is ends that we are concerned about.
    And the one--and one of the ways that we have of knowing if 
that end is being achieved is through results. If the results 
are skimpy, then maybe we need to take a long and hard look at 
the nature of the effort, and I hope that is what we are doing 
here and going to do here in this hearing. That is the intent 
of it.
    I would like to make just one more point--that concerns the 
certification process. The debate over Mexican cooperation is 
also a debate over this country's right to determine what 
cooperation looks like.
    I'm concerned about recent remarks by the--by our Nation's 
leaders on a tool that the State Department makes clear is not 
only working but is critical in ensuring continued cooperation.
    I am concerned, if reports are to be believed, that our 
Nation's leaders in the war on drugs have suggested on recent 
trips overseas that we turn over one of our most important 
foreign policymaking decisions to an international body--to a 
body that cannot even make up its mind on non-controversial 
issues, let alone one of this magnitude. I hope that those 
reports are wrong.
    There seems to be some confusion about certification and 
what it is meant to do. There seems to be some concern that it 
insults sensitivities overseas and the opinion in some quarters 
seems to be that the United States has no business judging what 
others do. The purpose of certification is not to be popular at 
embassy cocktail parties, but to represent substantive concern 
and to comment on real progress.
    The intent behind the law was to insist that the 
administration, any administration for that matter, and our 
international partners, take seriously the threat posed by 
international drug trafficking. That did not used to happen. It 
does now and it should.
    The vast majority of dangerous drugs consumed in America 
are grown and processed overseas and then smuggled into this 
country by well-organized groups. The damage that these drugs 
then do to our children, to our neighborhoods, and to our 
cities and communities cannot be measured.
    Drugs yearly kill and maim more Americans than all the 
international terrorist attacks against Americans in the last 
10 years. Yearly, we lose tens of billions of dollars in added 
health care costs, crime, on-the-job accidents, and family 
violence directly related to the presence of drugs in our 
society--all of this from substances produced illegally 
overseas and smuggled in to America.
    It was and remains the view of Congress that our 
international partners have a responsibility. As members of the 
international community, they too must take sufficient steps to 
control production and the trafficking of drugs. They too must 
combat money laundering and corruption.
    The American public shares this view. We insist that other 
countries help to combat terrorists. We insist that other 
countries take steps to protect individual human rights and 
intellectual property rights. We judge them on whether they do 
so or not.
    Similarly, we need to insist that other countries that are 
the primary sources or major transit routes of illegal drugs 
coming into the United States are doing their part seriously 
and consistently to combat the problem. We need to at least be 
as tough in our judgment of countries on drugs as we are on the 
preventing of pirated CDs.
    What the law requires is meaningful steps. This means not 
just promises to curb drug production, to stop money 
laundering, to punish the major criminals responsible, to seize 
their assets, and to combat corruption. It means actions. It 
eventually--it's got to be measurable actions.
    It was and remains the congressional view that countries 
that fail to meet a standard of adequate cooperation with the 
United States or with international efforts should face 
consequences. It is within our right to do this. It is also the 
responsibility that we owe the American public.
    We insist on such standards as a measure of behavior we 
expect among civilized nations governed by the rule of law. 
Whether we're talking about respect for human rights, efforts 
to combat terrorism, prohibiting slave labor or guaranteeing 
intellectual property rights, we require responsible actions as 
a matter of basic principle.
    Imagine, for a moment, that we insist that other countries 
not support international terrorism, but did nothing if we 
learned that they did. It makes a mockery of the idea of 
standards.
    If we are not prepared to enforce by some means our 
commitment to a minimal set of standards, then we abandon the 
idea of standards as a basis for relations among nations. If we 
cannot and do not judge what is right or wrong, if we do not 
when we have the ability in our hands to uphold such standards, 
we might as well not have such standards. If we must give up 
making judgments, we might as well tell other countries, ``It's 
OK to produce and smuggle illegal drugs.'' This is not 
acceptable; it is not responsible. If we are going to make 
judgments, then we must also be prepared to act.
    So certification is also then about concrete concerns. It 
also engages U.S. interests. The certification process is part 
of the domestic decisionmaking process on our foreign policy. 
It is directly linked to considerations of national interest. 
In this case, the issues involve the role of other countries in 
being the base of operation of trafficking of dangerous drugs 
to our country.
    The standards for certification do not require that a 
country succeed totally in its efforts. They do require 
commitment, seriousness of purpose, sustained efforts, and 
credible implementation. While the United States can and must 
improve its own efforts, our present efforts meet these 
standards.
    Leaving that question aside, however, we still have a 
responsibility as American people to uphold certain standards 
of international behavior and to take steps to secure our 
national interests. The certification process, while not 
perfect, is one of the best means to ensure that we have the 
necessary tools at hand to accomplish these purposes.
    Thank you, Mr. Chairman.
    Senator Coverdell. Thank you, Senator. I am going to make a 
brief statement, and I amend my comment of a moment ago. We 
will hear briefly from each of the members and then we will 
come to our first panel, General McCaffrey.
    Let me begin. This morning, there was an editorial in the 
Washington Post on this subject. The first paragraph says--
ahem--``The customarily even mannered President of Mexico, 
Ernesto Zedillo, snapped his cap the other day and told the 
Inter-American Press Association that the United States should 
pay his country reparations for the damage drug trafficking has 
done it.'' The idea is absurd.
    From the context, Mr. Zedillo evidently meant to express 
Mexico's resentment to the process by which the United States 
annually threatens economic penalties against countries it 
deems unreliable partners in the anti-drug struggle.
    But his fit of peak is bound to be taken as a flight from 
Mexico's own responsibilities in the struggle. Neither side 
needs this sort of contribution to the rhetorical wars, which 
summarizes my view on the subject.
    And it goes on to say ``The fact is that two countries, not 
one, are accountable for the narcotics trade.'' It goes on to 
say ``On each side, there is an evident disposition to blame 
the other for what are mutual frustrations. This needs to stop. 
Intensified enforcement without distracting recrimination needs 
to become the common theme.''
    ``This admonition, however, cannot countenance the two 
nations not discussing openly, in their governments and before 
the people, the problems that they share.''
    We have been at this a considerable period of time, some 
longer than I. But in the last year, I have come to several 
conclusions that are strikingly different from me than when I 
first was introduced to this difficult question.
    I think as I have traveled the country, we see a lot of 
weary warriors that are out on the street every day and every 
night and I think many of them have wondered now whether enough 
of our nation care.
    I think many Members of the Congress believe we can win 
this war in Mexico and Colombia, Peru, Bolivia. I do not. If we 
are going to win this war in my judgment, it will have to be 
won in the United States. I do believe it is going to require a 
new boldness, and I believe our panelist has been trying to 
contribute to that--defined goals for which we are all held 
accountable and manageable.
    There are at least four initiatives that I think deserve 
additional attention. First, the border. General McCaffrey has 
indicated that there is technology and capacity that could 
contribute substantially to altering the flow of illicit drugs 
into the United States.
    He ought to be given every cooperation to achieve that, and 
we ought to have a deadline as to when we think we can get that 
done.
    Second, we know that the target of the international 
narcotic today--flow today is a much younger audience than in 
the previous epidemic. Strikingly, they are children age 8-14. 
We should set as a goal, by the end of 1998, no child in the 
United States age 8-14 does not at least understand that 
narcotics are dangerous and can severely impact their lives and 
their futures.
    Simultaneously, we know that when parents are involved, the 
risk of the use of narcotics is substantially reduced. And by 
the end of next year, we should have recovered to the level of 
several years ago where at least near 50 percent of our parents 
are talking to these children. This is an achievable goal, and 
measurable.
    We have just appropriated some $195 million, and we need to 
measure--and its goal ought to be within 12 months that these 
aged children understand what they are up against.
    Third, we must ask our law enforcement officials in charge 
of the struggle what is necessary, what is necessary to break 
the infrastructure of narcotic distribution within our own 
borders? What does it take to bring down the most sophisticated 
mafia structure in a half a century?
    And fourth, we should continue in the effort to work with 
our allies, but with an understanding we do not control those 
sovereign territories, which is why the initial and main force 
of the struggle, in my judgment, will be won or lost here.
    Now, I want to share several statistics quickly with you 
which may be the base line by which we all who are interested 
in this subject can measure whether we are succeeding or not.
    Teen drug use in 1992 was 5.3 percent. In 1996, it is 9 
percent. Depending on whose statistics, that is between 1 
million and 2 million more users than in 1992. Would not it be 
reasonable that we set a reasonably short-term goal that we at 
least get to the 1992 level of teenage use of drugs? If we do 
so, we will save the lives of between 1 million and 2 million 
children.
    Parental involvement--in 1991/1992, 39 percent talked to 
their children about drugs a lot. And we know that reduces the 
use of drugs by between 30 and 50 percent. Today, only 31 
percent do that. Is not it a reasonable goal that we return to 
the 1991/1992 level of parental involvement?
    This comes to the border question, General. In the first 
quarter of 1993, cocaine was $112.33 per gram. In the first 
quarter of 1997, it is $87.16. Marijuana was $12.78 in the 
first quarter of 1993, and it is $5.24 in the first quarter of 
1997--a 59 percent drop in the price. Heroin--$1,594.88 per 
gram in the first quarter of 1993 to $984.18 per gram in the 
first quarter of 1997, which speaks, I think, to the problem 
the General has alluded to on the border.
    In 1992, the United States stopped 440 kilograms of cocaine 
and marijuana per day. In 1995, it was half that--205 kilograms 
of cocaine and marijuana per day. And the drug interdiction 
budget in 1991 was $2.03 billion. And in 1997, $1.44 billion.
    General, you have talked about a decade, and I do not 
disagree, probably decades of work. But I really do believe our 
people and our warriors and our families need bold new strokes 
with interim goals to be measured in the short-term so that 
they can be emboldened by those goals and can be inspired by 
those goals and can join us in this struggle which is so 
paramount for the ongoing success of this country as we come to 
the new century.
    I will now turn to the ranking member-present, Senator 
Biden of Delaware, for his opening statement.
    Senator Biden. Thank you very much, Mr. Chairman, and I 
thank you and Senator Grassley for having this joint hearing. I 
would ask unanimous consent that my entire statement be placed 
in the record, and I will attempt to quickly summarize.
    Senator Coverdell. Without objection, it will be placed in 
the record.
    Senator Biden. Mr. Chairman and General, we all know that 
in terms of teen and pre-teen drug use, the moral 
disapprobation of society and one's parents have as great an 
impact as anything else that we can do.
    And we all know that education, after-school programs, 
treatment and enforcement, are all necessary. We have got to 
learn to walk and chew gum at the same time. They are all 
necessary components. Any one alone cannot do it.
    The focus of this hearing is on Mexico. We could solve 
every problem we have with Mexico and not solve our drug 
problem. But it is also true that failure of Mexico to act more 
effectively, regardless of how responsible the top leadership 
may be, is due in some measure to the fact that the country's 
police forces, and possibly the military, are riddled with 
corruption.
    And notwithstanding the fact they cannot solve our 
problems, they exacerbate our problems, and I would argue 
exacerbate their problems. If we had no problem at all, Mexico 
would have a gigantic problem with the corruption that that 
system, that democracy, has within it which is bound to eat it 
alive.
    And so, it seems to me rather than us focusing on our 
differences, there is a mutual interest we have--it is as much 
in Mexico's interest and President Zedillo's interest to root 
out corruption for the future of his economy and the future of 
his democracy as it is for us.
    And we have wrestled with this problem of certification. It 
is a very imprecise tool, and it implicated a number of other 
foreign policy considerations that we have with Mexico. But 
what I am going to be asking you and others today is whether or 
not there is any reason for optimism in terms of action taken 
by the Mexican Government.
    We are here because last time around in this certification 
process, we came up with a hybrid agreement to delay what we 
all knew was, in truth, no real meeting of the certification 
requirement by Mexico, but nonetheless, it was certified. And 
we are here because of this interim report, which has been 
submitted.
    And it is important, I think, for those of us who, as 
imperfect a tool as this is, think it is the only tool we have 
available to us to be able to have some sense of what we are 
going to faced with 4 months from now because this crisis is 
going to occur 4 months from now.
    Four months from now, the President will to have to certify 
again or not certify. Every argument that we ran through 8 
months ago will be re-run. And the crisis in the bilateral 
relation will, once again, be emphasized.
    And so, I think it is important that Mexico understand and 
listen to what we are going through here today because I think 
it is going to tell the tale of what is likely to happen 4 
months from now.
    I do not want to decertify Mexico; we have a number of 
bilateral interests that extend beyond drugs.
    But I do not know how we can avoid the issue of whether or 
not notwithstanding the good intentions of the elected 
leadership, whether or not there is really any progress being 
made.
    I will conclude by saying that going to the parochial 
school I attended, whenever you got in trouble in class or out 
on the playground, the nuns would have you stay after school 
and write certain things on the board 300 or 400 times.
    One of the things I had to write a lot--I know it is 
surprising to think that I ever would have gotten in trouble, 
but occasionally I did. And one of the things you had to write 
on the board all the time, or I did, was ``The road to hell is 
paved with good intentions.''
    Well, the good intentions of the present elected Mexican 
Government, which I do not doubt their good intentions, may 
very well be paving the road to hell for tens of thousands of 
Americans. And I acknowledge, Mr. Chairman, it is our problem. 
All of the things you said are more important, quite frankly, 
than what Mexico does.
    But to suggest that what Mexico does or does not do is 
unimportant or non-important in this fight would be a major 
mistake, so we have got a balancing to do. And I would hope 
with my friend, Senator Grassley, that we would move on quickly 
to reauthorize your office and give you the kind of authority 
that you need to be able to carry out whatever it is, whatever 
the policy is, that has agreed to between the President and the 
Congress.
    But that is another issue, but it does relate to this. And 
I am anxious to ask you questions about the interim report as 
well as what you need for reauthorization to do your job.
    I thank you, Mr. Chairman.
    Senator Coverdell. Why, thank you, Senator Biden. I--agree 
with your remarks. I hope you did not interpret my focus or 
conclusions to suggest that anything less needed to be required 
of our relation with Mexico.
    Senator Biden. I didn't. I understand your position.
    Senator Coverdell. Very good. I now turn to my colleague 
from Alabama, Senator Sessions.
    Senator Sessions. Senator Coverdell, I want to say that I 
agree with you 100 percent on the items you delineated and on 
your basic analysis of the drug problem.
    I served as a Federal prosecutor for 12 years. One of the 
greatest honors I ever received was an award from the Attorney 
General for significant achievements in the war against drug 
trafficking, and I said at the time I would be satisfied if 
they put that on my tombstone.
    It is a debilitating, terrible condition. We need to do 
everything we can to stop it. But I do not believe that we can 
solve this problem by blaming it on Mexico and Colombia. They 
are quick to respond If you did not buy the drugs, we would not 
be selling them. And there is some truth to that.
    You delineated a series of items improving our effort at 
the border, and increasing our ability to destroy. We can, with 
the tough Federal Sentencing Guidelines, continue to improve.. 
I was there. I have used these guidelines. People plead guilty, 
they confess, and they tell law enforcement about who else is 
doing drugs. You can eliminate whole organizations. This is 
being done in Federal court today.
    We can do that. We do need more education. We have got to 
have more leadership out of the Drug Czar position. I remember 
when Mr. Bennett took over the Drug Czar, they said he was not 
serious because he did not ask for more money. And he created a 
climate, along with the President of the United States, that 
drug use was unacceptable in America. Drug use went down by 
every authoritative study for 12 consecutive years.
    In the domain of this President, drug use has gone up every 
year. This is a serious turnaround, I say, about the Drug 
Czar's office--I think it can provide leadership. But frankly, 
I must say, I do not think it has been as effective as it 
could. I think we need to evaluate whether we keep it or not.
    I do not see that there is any overriding strategy to deal 
with this problem that was on the downswing and is now clearly 
on the upswing. I believe we need fundamentally to focus on 
what we can do here and improve our effort here. I believe we 
need to keep pressure on foreign countries. But if we do not do 
it at home, we will not achieve much, and it is going to take a 
unified effort to do so. Thank you.
    Senator Coverdell. I thank the Senator, and I now turn to 
my colleague from Florida, Senator Graham.
    Senator Graham: Thank you, Mr. Chairman. I appreciate you 
and your colleagues calling this hearing today. I will try to 
be brief so that we can get on to our witnesses.
    I am very pleased that our first witness is General 
McCaffrey, who has served this country with great distinction 
throughout his adult life. I had an opportunity to come to know 
him first as the Commander of U.S. Southern Command which had a 
principal responsibility and continues to have that 
responsibility for U.S. drug efforts in Latin America.
    In that position, he not only did an outstanding service to 
his nation, but also helped build--strengthen relationships 
between the United States and our allies in this war against 
drugs.
    The particular issue of Mexico is a vexing one. The 
President of Mexico in the mid-19th century lamented about his 
country when he said, Poor Mexico--so far from God, so close to 
the United States of America. At least the second half of that 
description continues today.
    The fact is Mexico and the United States are inexorably 
involved in a whole set of relationships, including the issue 
of how we are going to deal with the issue of illicit drugs. I 
think it is a sterile argument for either side to point to the 
other and say, It is your responsibility because you consume 
too much. It is your responsibility because you produce or 
transport too much. The fact is it is both of our 
responsibilities, and we are not going to win this war unless 
we do it in some collaborative relationship.
    I had the opportunity to visit Mexico in March of this year 
as a member of the Senate Intelligence Committee with 
particular attention to drug-related issues and feel that I 
came back with some greater appreciation of the difficulties 
that this relationship will have in achieving its objective.
    But I believe we have no choice but to try to stay the 
course, which includes careful analysis and diagnosis of what 
is currently happening; appropriate prescriptions to enhance 
our efforts; and anticipation of what might be on the horizon 
so that we can shape events and not just respond.
    I anticipate that during the course of this hearing today 
that we will get some valuable information on all three of 
those important elements of diagnosis, prescription, and 
anticipation and I appreciate your providing us with this 
opportunity. Thank you, Mr. Chairman.
    Senator Coverdell. Thank you, Senator. It is my 
understanding, Senator Frist, that you do not have an opening 
statement?
    Senator Frist. I do not.
    Senator Coverdell. Well, then, I would move to Senator 
Hagel from Nebraska.
    Senator Hagel. All I would say is welcome to our witnesses. 
I am looking forward to hearing General McCaffrey and our other 
witnesses. Thank you, Mr. Chairman.
    Senator Coverdell. Thank you, Senator. I am now going to 
turn to the ranking member of the Western Hemisphere Committee, 
my good colleague--we have been at this quite awhile--Senator 
Dodd of Connecticut.
    Senator Dodd. Thank you very much, Mr. Chairman. I 
apologize to my colleagues for being a few minutes--coming over 
late.
    But let me thank you and Senator Grassley for holding this 
joint hearing. I commend both of you. I think this is a very, 
very worthwhile way to focus our attention on the issue, and I 
would just like to take a minute or two if I could.
    We are going to hear from some very, very knowledgeable 
witnesses this afternoon and I particularly want to welcome 
General Barry McCaffrey here who, in my estimation, has done a 
fabulous job in a thankless task in many ways.
    I happened to have the privilege and the--privilege and 
pleasure, Mr. Chairman, of being with General McCaffrey on the 
trip to Latin America. I know we had hoped you would be able to 
join us on that trip. We had a bipartisan delegation, House and 
Senate members, that went along--I think, in fact, our 
colleague from Nebraska was going to try and make that trip as 
well but it was late notice.
    And one of the things that we did--General McCaffrey was on 
that trip. I had the privilege of being with him in Sao Paulo, 
where we attended jointly a DARE program in one of the favelas, 
the very poor neighborhoods of Sao Paulo where children, 
parents, teachers, and others are working on the issue of--not 
so much the issue which we will address today, and that is the 
transit, the money laundering--but their own concerns about 
consumption in their own nations.
    And I wish every American could have been present that 
morning in that very, very, poor, poor barrio neighborhood of 
Sao Paulo to hear General McCaffrey speak to these parents, to 
these children, to police officers who have adopted the DARE 
program we have in this country with those young students 
talking about the dangers of drug addiction and narcotics.
    The General had a number of other meetings. I did not 
attend all of them with him. But I think he represented our 
country very, very well. And I publicly want to commend you, 
General, for making the stop and for visiting Colombia. You 
took some heat about that from some other people. I think you 
did the right thing by being there. If we do not engage these 
countries and have the kind of discussions with them in talking 
about how we can jointly work on these issues, there is going 
to be little hope of making the kind of--having the kind of 
success all of us would like to see. So I commend you immensely 
for those efforts--anxious to hear, obviously, your testimony 
today.
    Clearly, the issue with Mexico, and I had--was pleased the 
other night, Mr. Chairman, to at the invitation of General 
McCaffrey, to have dinner with the delegation from Mexico and 
the United States that had their high-level technology group 
meeting and did not engage with them during the day when they 
had their meetings, but was impressed by the remarks.
    Our colleague, Dianne Feinstein, was there that evening, 
and some other members. It was a general, kind of informal 
discussion about the efforts that we were trying to make 
together, so I thank him for that as well.
    But clearly, this issue with Mexico is not simply one of 
technical law enforcement matter. It is of concern, obviously, 
that goes beyond that. It is widely acknowledged, of course, 
that Mexico is the principal transit route for cocaine, 
supplying one-half of the annual consumption--also, major 
source of marijuana, methamphetamines.
    The impact of the drug trade is--is simply profound, and it 
affects all of us today. Just to give you some idea--there are 
almost 13 million Americans now that use illegal drugs, 
including in excess of 1.5 million cocaine users in the 
country, 600,000 heroin addicts in the United States. Almost 10 
million people use marijuana illegally every day, and it is not 
just confined to our inner cities and the poor. It occurs among 
every sector of our society.
    Without doubt, the human and economic costs are enormous. 
The related illness death in the United States in excess of $67 
billion in 1996, including lost productivity, premature death, 
and incarceration.
    But what have we done to stem this? In 1981--since 1981, 
rather, we have spent some $25 billion of taxpayer money on 
foreign interdiction efforts, source country counternarcotics 
programs. We have issued an annual certification report card 
that has been the subject of, obviously, significant debate 
here in the Congress. I am not going to go into that at this 
point at all.
    Yet, despite impressive seizures at the border and the high 
seas and other countries, foreign drugs are cheaper and more 
readily available in the United States than they were 2 decades 
ago. Drugs have continued to flood our neighborhoods and wreak 
havoc on our families and our communities.
    The reason for this is simple, in my view--the drug trade 
is an enormously lucrative business. Drug trafficking generates 
estimated revenues of $400 billion annually--$400 billion, the 
estimated revenues. Just think for a moment of what that kind 
of money could do in comparison to the resources available to 
combat the drug trade in countries like Mexico.
    In 1995, the Mexican Government's total budgetary 
expenditures were $54 billion, and its revenues, $56 billion. 
It does not require much thought to comprehend the enormous and 
daunting task facing Mexican and United States law enforcement 
authorities with the resources they have available to combat 
such huge sums of money associated with the international drug 
trade.
    It is obvious that Mexican resources alone are no match for 
these well-heeled, criminal giants. Mexico needs our assistance 
and cooperation in what is becoming a Herculean struggle to 
protect the democratic institutions and principles that are the 
bedrock of Mexican democracy and are under assault from drug-
related corruption.
    When Presidents Clinton and Zedillo met last May in Mexico 
City, they acknowledged the dangers posed by the drug abuse and 
drug trafficking. To counter that danger, they forged an 
alliance against drugs and set as their goal the construction 
of drug-free societies in our two countries for the 21st 
century. They also released a comprehensive and balanced 
assessment of the bi-national drug treaty--drug threat 
confronting our two nations.
    Last month, General McCaffrey sent to Congress his latest 
findings on the current state of U.S./Mexico cooperation on 
drug matters. In my view, it was a comprehensive, and very 
candid review. If I were asked to sum up the report in a few 
words, I would say this: We are making some progress in 
combating drug trafficking, but much, much remains to be done.
    It is my hope, Mr. Chairman, that you will be able to 
review this as much as we can here today. But again, I think by 
having this kind of a hearing outside of the normal 
certification process when it seems the only time we have these 
heated debates about this subject is very well-advised, and I 
commend both of our colleagues from Iowa and Georgia for doing 
it in this environment here outside, if you will, that 
certification process which ultimately we are going to have to 
face again.
    But again, I want to commend General McCaffrey and his 
staff and others for the tremendous they are doing.
    Senator Coverdell. I thank the Senator from Connecticut. 
And I turn, I think, to our last member, Senator Kerry of 
Massachusetts.
    Senator Kerry. Well, Mr. Chairman, I will be very brief. 
Thank you very much for holding this hearing as others have 
said, and I would just say--very quickly, because I know the 
General has been very patient and we want to hear him.
    I had the privilege of speaking on Monday to the LEON 
Group, which is the group of eight sort of sub-ministerial 
meeting where they are planning for the recommendations that 
the Attorney General make with respect to international crime.
    And it is very clear that countries are, all across the 
globe, taking more seriously the rising threat of the 
transboundary cartel influence that is having the significant 
increased national security threat to all of us.
    The linkages between the Colombian cartels and the drugs 
they move through Mexico are linked also to Russia and Nigeria 
and Asia and to the potential movement of nuclear materials. 
There have been some 800 instances now of attempted theft or 
known theft of nuclear materials from Russia--one such instance 
found 363 grams of nuclear material in a lead-lined suitcase in 
Munich in the possession of three former Soviet citizens with 
an attempted sale price of $350 million in the black market. 
And most people believe it was bound for North Korea.
    So the truth is that what we are talking about here is not 
just Mexico, and it is not just a standard of certification of 
Mexico. It is really a standard of--international recognition 
of the new national security threat, which is what the 
President of the United States has called it, the Attorney 
General has called it, the Director of the CIA has called it, 
General McCaffrey has called it. And this is all linked.
    And what Mexico does to assist in its capacity to be able 
to not only save itself but to fight against the cartels' 
capacity to use it as a transboundary transit area, is critical 
to our other national security interests--vital national 
security interests, I would add.
    So it is my hope that this hearing can really get concrete. 
We have been down this road before. I think it is, however, 
very salutary that we are here, as others have said, when we 
are--not waiting for the last minute; making a mid-term 
assessment, in a sense; creating some benchmarks; hopefully, 
deciding on some real short-term goals that we can measure.
    But we will know the difference between that which is 
cosmetic--the setting up of a bureau, the shifting of a few 
people, a certain number of interdictions--versus that which 
really seeks to ferret out what is endemic within a society, 
and I think that is what we are really here to measure; at 
least, that is what I am here to measure.
    And that is why I think the certification process is so 
important. We would not be here if it were not for it, I 
venture to say. And we certainly would not have the significant 
increased effort to lay the groundwork for how we will make 
these kinds of judgments were it for the standards that were 
originally put forward which we fought about last year on the 
floor of the Senate with Senator Feinstein, yourself, Mr. 
Chairman, and others.
    So I welcome this opportunity to try to establish those 
benchmarks but, hopefully, also to recognize the much larger 
context within which we are dealing. This is not just ruffled 
feathers between a neighbor. This is not just sensitivities 
about the Great Colossus of the North and our history in our 
relationship. This is much more significant than that today, 
and we have to think about it in that context.
    Senator Coverdell. I thank the Senator for his comments and 
I think the linkage to a broader picture is absolutely on 
target.
    I spoke a moment too soon. We have now been joined by our 
distinguished colleague, Senator Feinstein of California, and 
if you have an opening statement, Senator, you would be welcome 
to do so.
    Senator Feinstein. I thank you, Senator, and I want you to 
know it has been a great pleasure for me to work with you on 
this issue and I want to thank you and Chairman Grassley for 
holding this joint hearing.
    I join those that last March was not--clearly not convinced 
by the President's decision to certify Mexico. And I was not 
convinced because I come from a State which is right next door 
and has seen the intrusion of drugs, of the crime that is 
related to drug trafficking, the growth of gangs that surround 
these drugs, and the spread of corruption on both sides of the 
border.
    The President very graciously agreed to report back within 
6 months as to the progress that had been made in Mexico's 
cooperation with the United States. And, Senator, you and I 
have had a chance to talk about this. I have had a chance to 
have--be briefed by General McCaffrey. We have both sort of 
tangled and tangoed on the subject. And I want him to know that 
I do think that at this time, he is on the right track.
    Having said that, I find myself very much in agreement 
with, I think, the macro view of this that was just presented 
by the distinguished Senator from Massachusetts. My conclusion 
is that while there has been some limited progress made, the 
report we received exemplifies that there is still a vast need 
for improvement. There were, however, positives in the report.
    Congressional pressure forced the administration to take 
the problem, I believe, more seriously than they had. The 
Mexican Government, too, was put on notice that half measures 
and cosmetic attempts would not be acceptable. There was a 
modest increase in cocaine seizures. General McCaffrey has 
committed himself to take dramatic new actions to shut down 
drug trafficking across our border, and confront the threat of 
violence currently targeted on United States law enforcement. 
I, for one, very much appreciate that. I want him to know that.
    The Mexican Government has begun the process of 
restructuring the Attorney General's office and implementing 
new vetting procedures which may, over a long period of time, 
succeed in establishing credible drug enforcement units in 
Mexico. But it is not there yet, and it remains to be seen 
whether this effort will be more effective than previous 
restructuring efforts.
    The Mexican Government has passed money laundering 
legislation, is in the progress of promulgating the regulations 
that will guide its implementation. Then we have to see if it 
is, in fact, enforced and implemented.
    There were many negatives, and I want to just cite some of 
them. No Mexican national has been extradited to the United 
States to this day on drug charges. Now, I have been 
consistently told and was told again as late as just a week or 
so ago at a dinner at which the Senator from Connecticut was 
present with major officials from the Mexican Government, that 
there would, in fact, be extraditions forthcoming of 
individuals on drug charges. I wait to see if that, in fact, 
will happen.
    Mexican law enforcement is still riddled with corruption. 
Vetting efforts have only just begun. No major drug cartel 
leaders have been arrested. DEA agents working on the border 
remain barred from carrying the arms necessary to carry out 
their jobs in Mexico. And the border task forces envisioned as 
our first line of defense against drug traffickers remain 
severely underfunded. Essentially--to this day, I believe--they 
exist only on paper.
    The overall tone of the report is infused with a sense of 
optimism, and I appreciate that. And I want to be optimistic, 
too, because I am very fond, feel close to Mexico, recognize it 
as a major ally, a major neighbor. And certainly to my State, 
that is 100 percent true.
    At best, one can say that the positive developments 
indicate that we are at the early stages of really coming to 
terms with this problem, that the administration is now taking 
it much more seriously.
    If I look to the contrary side, the worst, the report is a 
spin placed on some cosmetic concessions made by the government 
under pressure from its principal ally. But only time will tell 
exactly what it is. The effort and the results must be 
sustained.
    The next certification report is due in less than 5 months. 
By reading the report we have had so far, it is not clear 
whether real progress has, in fact, been made. So between now 
and then, I hope Mexican authorities will take swift and 
comprehensive action to produce real results.
    Cartel leaders must be arrested. Those wanted in the U.S. 
must be extradited. DEA agents on the border must be allowed to 
protect themselves. The border task forces must be revived. 
Money laundering laws must be implemented. Air and maritime 
agreements must be implemented. And the vetting process of law 
enforcement officers must proceed apace.
    Absent these, it will be difficult to make the case that 
Mexico has fully cooperated with the United States in 
counternarcotics by March 1 of 1998. I thank the Chair.
    Senator Coverdell. I thank the Senator--General. I do think 
we ought to acknowledge once again that the gentleman before us 
represents a long and distinguished contribution and career to 
the people of the United States, for which we are all very 
grateful.
    I think it was Senator Dodd who said in many ways this is--
could be considered one of those thankless tasks. I have 
admired your enthusiasm and tenacity.
    It is unusual for a hearing like this to have equally 
represented bipartisan membership than 10 percent of the U.S. 
Senate. And as you can tell, General, from the comments, it is 
no longer perfunctory. There is a passion about this and the 
nature of its impact on our nation as we come to the new 
century.
    So you are sitting in a very, very critical seat at a very, 
very critical time. Thank you for your service. We welcome you 
to our joint committee.

   STATEMENT OF HON. BARRY R. McCAFFREY, DIRECTOR, OFFICE OF 
                  NATIONAL DRUG CONTROL POLICY

    General McCaffrey. Thank you very much, Mr. Chairman. Let 
me thank both you and Senator Grassley and Senator Biden and 
all of the other members of both committees who have made these 
opening statements.
    I must admit up-front that I find myself largely in 
agreement with just about everything that was said. I welcome 
your involvement and your oversight and will try and learn from 
your own viewpoints.
    Let me, if I may, particularly point out, Mr. Chairman, 
your own continued support of the High Level Contact Group and 
your own continued focus on Mexico as an issue.
    Senator Grassley, if I may, I would like to underscore that 
you may have done one of the more important things in the drug 
strategy this year by your sponsorship of the Drug Free 
Community Act. It seems to me you and Rob Portman have given us 
a key to making a major effort to reduce drug demand in the 
United States over the coming 5 years, and I thank you for your 
leadership.
    Senator Biden in particular has had a 15-year focus on the 
issue and his support, particularly on the reauthorization 
bill, I would suggest would be important as to how we deal with 
these issues in the coming years.
    The time is short. Let me, if I may, do two things. One is, 
I would like to draw your attention to some material that I 
will give you that I think your staffs and you need to take 
into account. We have put literally thousands of hours of 
effort into putting down on paper what we believe to be 
accurate and ethically sound feedback, both to the Congress and 
the Nation, on what we are trying to achieve in Mexican-U.S. 
cooperation, and let me just make sure you know what documents 
we have in front of you and we would offer for your 
consideration.
    First of all, we did give you in response to the 
President's letter to Senators Coverdell and Feinstein a two-
volume report on cooperation with Mexico. It has three big 
parts to it. There are two volumes because Volume 1, which is 
complete in and of itself, is unclassified. Volume 2 has 
classified both intelligence and law enforcement-sensitive 
information.
    I would ask you to take those two volumes into account 
because these are the facts upon which the debate ought to 
proceed as you consider policy alternatives in dealing with the 
Mexican-U.S. Drug issue.
    The unclassified report to Congress tries to put together 
in a fairly coherent way three aspects. One is the Secretary of 
State's contribution on thinking through the possibility of 
multinational cooperation. We have separated that part of this 
report, I might add, put it in Spanish, Portuguese. The 
President and I shared it with Venezuela, Brazil, Argentina. I 
took it up into Bolivia and Colombia. We intend to discuss this 
whole concept of hemispheric cooperation, hopefully leading to 
a more informed discussion in Santiago in April, and that's 
Secretary of State Madeleine Albright's lead.
    We also have an enhanced truck inspections report. We tried 
to get at the notion of how do we deal with these 39 border 
crossings, with this massive 3\1/2\ million trucks a year, 82 
million cars, 230 million people from our second biggest 
trading partner? We have talked through that issue. Sam Banks 
is here today and will be one of the later witnesses.
    And then finally we dealt with the nine questions on U.S.-
Mexican cooperation that you asked. We tried to get a 
comprehensive response and to put it in the context of where 
Mexico was when President Zedillo took office.
    These two volumes are the outline of my remarks today.
    There is another document that I think gives you some facts 
that are useful to know. This is the volume, Overview of Drug 
Control Programs in the Southwest Border, that I put together 
before going down the border again this summer in August. I was 
on both sides, dealing with Mexican authorities and U.S. trying 
to better understand the process of bilateral cooperation on 
the drug issue in the context of our other political, economic, 
and cultural ties with Mexico, and I have got to some people 
here that I am going to introduce that are present who will be 
available today and tomorrow to further respond to you and your 
staff's interests.
    We have also finally three products out of the high-level 
contact group that you need to be aware of. One of them you 
have heard me refer to before, a 97-page document, May 1997, 
which is the U.S.-Mexico threat assessment. Many international 
documents are largely empty of meaning. This one is specific. 
It is a useful tool for police officers, prosecutors, and 
policy analysts on both sides of the border.
    We will probably revise this each year and try and 
understand the dynamics of the drug issue as it relates to 
these two nations, but that is a solid piece of work, and I 
commend your attention to it.
    We have also a very short document that on May 6 in Mexico 
City the two Presidents, Zedillo and Clinton, signed the 
Declaration of Mexican-U.S. Alliance Against Drugs. We are 
working on this now, and we owe these two Presidents an answer 
of a joint strategy by 31 December, the end of this year. We 
will try and give Presidents Zedillo and Clinton an update on 
it during the Zedillo visit in November. We are trying to 
hammer out something that will be a good conceptual outline on 
how to work with our neighbors to the south on this issue in 
the coming years.
    Finally, you may be aware we just finished the fifth 
session of the high-level contact group. As you might imagine, 
the level of talent that we have involved in the high-level 
contact group on both sides of the border is pretty demanding. 
We have a lot to do. We are investing time in this issue. We 
are trying to come up with concrete results and document them, 
and here is the output of the session we just completed in 
consultation with Congress.
    I might remind the two committees assembled here that part 
of our dialog involves feedback to the two legislative bodies, 
so I very much appreciate all of you taking the time to have 
received these Mexican delegations now twice, and I would tell 
you that I personally in my delegation have tried to consult 
with Mexican legislative authorities twice in Mexico City.
    Let me talk some people who are here with me today. First, 
beginning with law enforcement, Dean Cooter, National Sheriffs 
Association, is here representing some 3,000 county sheriffs. 
One of our most important law enforcement pillars in the 
country, Johnny Hughes, National Troopers Coalition, some 
45,000 members.
    I want to pay particular tribute to El Paso police chief 
Russ Leach, who is here in the hearing. I asked him to come up 
here and join us today and to go around and talk to some of the 
folks in the interagency. Without meaning to embarrass him, 
this is one of the most distinguished police officers in our 
country, 20 years in the L.A.P.D., now in El Paso, and as I 
went down that border for over a week, he is one of the 
standouts of learning from a police officer how you can do 
cross-border training and cooperation. It is remarkable what 
can happen below the Federal-State level, and I think that he 
is an example of another major push that we are going to work 
in cooperation with Mexican authorities.
    There are also six people here from the U.S. high intensity 
drug-trafficking areas that are along the southwest border. 
Dennis Usery, the director of the southwest border, Terence 
Smith from the California region, Ray Vincek from Arizona, Jim 
Jennings from New Mexico, Verne Parker from South Texas, 
regional director, and Travis Kirkendahl from West Texas, 
regional director.
    The high-intensity drug trafficking areas is one of the 
more useful tools we found to try and glue together local, 
State, Federal law enforcement prosecution and to add in the 
viewpoint of the prevention and treatment communities. They are 
beginning to open lines of cooperation and contact with Mexican 
authorities, and I want to thank them for their efforts.
    There are also several people we asked to be here to listen 
to this dialog: Al Zapanta, who is the president of the U.S.-
Mexican Chamber of Commerce, and Bob Berry from NationsBank and 
others, to include two letters which if you will allow me to 
submit for the record, from the Community Antidrug Coalition of 
America, Jim Koppel, and also very important input from Harry 
Montoya from the National Hispanic Latino Community Prevention 
Network.
    I asked these folks to come here to underscore that the 
solution to the U.S.-Mexican drug problem is not necessarily 
going to be found in Washington. It is going to be found in law 
enforcement and other authorities in the four border States and 
across the Nation.
    Mr. Chairman, if I may also submit for the record my 
written comments which we have put together over the last week. 
We think they are fairly complete, and they try and capture in 
general terms exactly what we are trying to achieve.
    Steve, if you will--I am going to show you briefly five 
charts that outline the problem we are working. Chart number 1, 
that is the threat. Here is what we are working on. We are 
working on a problem that brings 240 metric tons of cocaine 
into the United States, about a third of the world's 
production.
    A good bit of it, maybe half, comes through Mexico. A lot 
of the rest of it comes through the Eastern Pacific and Western 
Caribbean approaches. It comes in by air, land, and sea. It 
then moves across the border largely in trucks and cars, 
sometimes, mostly through the ports of entry, the 39 border 
crossings, and sometimes back-packed, rafted, or driven 
somewhere across the border, on the 2,200 kilometers that 
unites the U.S. and Mexico.
    There are five criminal organizations that we have outlined 
on that chart. That is somewhat deceptive. This is not the 
Harvard Business School organization of criminal efforts.
    There are probably an additional 33 major criminal gangs, 
some of whom have 100 years of history who are smuggling 
organizations and exist along that binational frontier, but 
these five organizations are the most important. We are 
targeting in cooperation with Mexican authorities their 
actions, and they're principally the ones who move Mexican 
heroin, a good bit of the Colombian heroin, and the cocaine 
that comes out of primarily Peru, second Bolivia, and now, 
increasingly, Colombia.
    Then finally they smuggle a good bit of the marijuana. We 
do not know how much marijuana the U.S. produces. My own sort 
of teaching device is probably half of it comes in from outside 
and half of it we are growing domestically.
    Finally, new drugs are coming across that border such as 
methamphetamines. I do not really know how much is produced in 
Mexico. Again, my judgment would be half of it is made here, 
half of it Mexico, some of it could be coming also from the 
Pacific Rim, but by and large the U.S. is increasingly a drug-
producing Nation, methamphetamines, marijuana and other 
threats.
    Next. These are the three major assertions I would make on 
continuing counterdrug cooperation with Mexico. It seems to me 
we cannot solve it alone. We have to be part of a hemispheric 
effort, and in particular when it comes to Mexico the U.S. and 
Canada we must recognize we have to work in cooperation 
particularly among law enforcement authorities.
    We do believe that, as the Senators have commented, that 
President Zedillo is committed to this. He has labeled it as 
the number 1 national security threat facing Mexico.
    And then finally I would argue we have a pretty decent 3-
year record of steady success upon which we are trying to 
build, although I think Senator Feinstein's comments that we 
have just begun is probably an accurate statement.
    The next chart. We think there are some concrete signs of 
progress. I do not think this is words. I do not think it is 
rhetoric. I think I can walk through the report and show you 
steady, inexorable, practical, concrete results on this effort.
    I have got two backup charts that will talk to some of 
them, but essentially the highest level of eradication of any 
country in the nation, any nation on the earth, it is roughly 
five times that of Bolivia and almost double that of Colombia.
    Drug seizures are going up. Since 1994 there have been two 
major changes in drug-smuggling process between the producing 
fields in Peru, Bolivia, and Colombia, and the U.S. It was 
South Florida, it was the Caribbean. Successful actions in the 
early nineties moved it into Mexico.
    It was then by and large general aviation, which we got 
extremely good operating again, and then they moved to cargo 
flights, which were devastating in their impact on us. It took 
us well over a year to figure it out and to turn it off.
    Then they moved to increasingly sea movement of drugs into 
Mexican ports and then by land across the frontier, and Mexico 
and U.S. intelligence authorities are at-sea and air efforts 
are now increasingly focusing effectively on that new drug 
threat.
    We think the Mexicans have passed two major baskets of new 
legislation that are vital, one dealing with money laundering 
and the other with organized crime. The organized crime in 
particular finally gives them 20th Century law enforcement 
tools, witness protection, controlled deliveries, conspiracy, 
illegal enrichment, wire taps. The kinds of authorities that we 
got out of the forties and fifties and sixties dealing with the 
Mafia are now available and beginning to be used by Mexican 
authorities.
    I will have another chart on extraditions. You know, I have 
listened to the argument on it, is it serious or not. I will 
show one chart that captures my own view of the growing 
cooperation on extradition between the two nations.
    Then, finally, we think there is a commitment to confront 
corruption. Corruption and violence are a fact of life, coming 
out of some $6 billion--who knows where that number comes 
from--of corrupting money that started in the United States, 
with $49 billion a year that we allege 6 percent of our 
population is spending on drugs. That is an engine sucking up 
illegal drugs principally through Mexico, and it is causing 
both nations enormous distress.
    Next graph. This chart tries to capture, where are we on 
extradition, and I have a series of matricies that we could 
dice it any way we wish, but what we are suggesting is the 
first extradition of Mexican nationals by authority of the 
Secretary of Foreign Affairs, Angel Carria, took place to the 
United States in 1996. Four people came out. Two of them are 
Mexican citizens. They are dual nationals. I and Mexican 
authorities would agree that a dual national counts as one of 
your own citizens, and they were extradited, and two of them 
are on drug charges.
    In 1997 we have had 20 bodies handed over by Mexican 
authorities in response to U.S. requests. Seven were for drug 
or money laundering charges. There are another 12 fugitives 
that Secretary Carria has signed the order on. They are 
appealing. Who knows how those appeals will come out. Six of 
them are for Mexican citizens, of whom four are wanted on drug 
charges. That is where we are.
    Now, again, I do not think I should argue beyond the facts. 
It is there, it is increasing, it is greater extradition 
cooperation with any nation on the face of the earth except 
Canada, and I think it is a sensitive matter because these are 
not Government policies. These are national laws, and they are 
by name, and there are two attorneys general, and they have to 
satisfy the requirements of law in each nation or they do not 
take place.
    But I think there is clearly a commitment to moving ahead, 
and at the initiative of the Mexicans we are on the verge of 
developing a protocol which will allow us to extradite 
temporarily citizens from one country to the other, to have 
them stand trial, complete the trial phase in both nations, and 
then start serving sentences in the two nations, which I think 
will be a step forward. I think we are moving in the right 
direction.
    Next. The High-Level Contact Group. A lot of work goes into 
this. The subgroups continue work throughout the year. We think 
we will end up with a decent sense of organization not only on 
a threat and a strategy but also practical cooperation among 
Cabinet-level offices.
    Without meaning to go into the detail on this, there are 
hundreds of Mexican army officials trained in the United 
States, 1,500 or more this year. There is a lot of equipment 
transferred to Mexican authorities, 73-some-odd helicopters and 
training packages. There are hundreds of Mexican navy officers 
trained on counterdrug operations. We have a decent transfer of 
technology software and training to their hacienda police on 
money laundering.
    There are 400-plus money laundering prosecutions that have 
taken place now in Mexico. Some 20 are ongoing in cooperation 
with us. There are in fact bilateral border task forces 
standing up. I do not know when they will be done. They will 
probably be a C-minus by the end of December, with vetted 
officers who have gone through the FBI Academy, done the 
polygraph, done the drug test, financial background visit to 
the home and family.
    There are more than 1,500 successful vettings of police 
officers for other specialized counterdrug task forces inside 
Mexico. The organized crime unit specifically is the one that 
is probably most important to us.
    I am prepared to respond to your questions in each of these 
areas. When it comes to precursor chemicals or any one of these 
points of contact, we are actually doing things.
    Next. Finally, let me just talk about a corollary. You 
called the hearing to develop policy options on U.S.-Mexican 
counterdrug cooperation, and I think that is an important 
aspect of it, and it is important to our future. There is 94 
million Mexicans. We cannot ignore them. We barely have a 
marked border.
    But on the other hand, it seems to me, and you have already 
made this point, we have a responsibility to the American 
people to develop an adequate organization, doctrine, 
technology, manpower, and resources so that U.S. Federal law 
enforcement, principally the border patrol and the Customs 
Service but also the DEA, the Coast Guard, INS, FBI and other 
Federal law enforcement and the supporting packages that go 
with it, whether it is U.S. attorneys to prosecute, or the 
prison system, we owe the country an adequate system to protect 
the southwest border, and we do not have it.
    Now, we have had enormous improvement since 1990. It has 
finally got fencing, low level light TV, border patrol has 
almost doubled in size. We are making progress, but the 
President has instructed Janet Reno and I and Bob Rubin and 
others to come up with definitive plans to put this into place.
    I think it is doable. I think we can put nonintrusive 
inspection technologies at those 39 border crossings and over 
the space of the next 5 years force this criminal conduct and 
the absolute devastating damage it does on both sides of the 
border out of the Mexican-U.S. Access and out to sea, where we 
will try and work the problem in another venue that does not 
involve so many innocent civilians.
    So this is where we are going. The five HIDTA's are 
important to us. The resources that Congress provided, 12 
percent increase in 1996, 5-some-odd percent increase in the 
1997 budget, I think we are moving ahead, and on that note, Mr. 
Chairman, both chairmen, I thank you for the opportunity to 
appear before you and respond to your questions.
    [The prepared statement of General McCaffrey follows:]

                Prepared Statement of Barry R. McCaffrey

    Chairman Coverdell, Chairman Grassley, Co-Chairman Biden, members 
of both the Committee on Foreign Relations and the Caucus on 
International Narcotics Control, thank you for the opportunity to 
testify on U.S.-Mexico counter-narcotics efforts. The Office of 
National Drug Control Policy (ONDCP) appreciates your longstanding 
support, as well as that of the Committee and Caucus. The recently 
enacted Portman-Grassley bill will help build community anti-drug 
coalitions across the nation. The new $195 million youth media campaign 
will, for the first time, allow us to use the full power of the media 
to educate our children about the dangers of illegal drugs. Indeed, the 
Office of National Drug Control Policy Reauthorization Act of 1997, 
which is now before the Congress reflects a continuing and constructive 
dialogue among committed Senators and Representatives, their expert 
staff, and ONDCP.
    The bipartisan support ONDCP has received because of your 
leadership and hard efforts has had a direct and substantial impact on 
the success America has enjoyed in reducing drug use. By focusing on 
achieving real progress, each of you has made a difference we all can 
be proud of Over the past 17 years, this bipartisan partnership has 
contributed to a 50 percent overall reduction in the number of 
Americans using drugs and a 75 percent reduction in the number of 
Americans using cocaine. Nevertheless, if unchecked, America's drug 
abuse problem will kill 140,000 Americans and cost our society $700 
billion over the coming decade.
    My commitment to the Congress when you considered my appointment in 
February 1996 remains constant: to forge a coherent counter drug 
strategy that will reduce illegal drug use and protect our youth and 
our society. ONDCP remains committed to that goal and we look forward 
to working closely with the Committee and Caucus as we implement the 
objectives of the National Drug Control Strategy.

                           Executive Summary

    The United States government's strategy is to build a partnership 
with Mexico to confront the common threat of illegal drugs. Our 
approach recognizes that we can only successfully disrupt and destroy 
international drug trafficking organizations, which operate in both 
Mexico and the United States, if we work cooperatively with the 
government of Mexico. Unilateral strengthening of U.S. drug 
interdiction capacity along the border will significantly reduce the 
flow of drugs into this country if we couple border interdiction 
efforts with a strategic U.S.-Mexican attack on major criminal 
organizations. To reach these criminal organizations, which is also in 
Mexico's interest, we must cooperate. We encourage cooperation by 
accepting Mexico as a sovereign partner with whom we share mutual 
objectives. Where it contributes to the achievement of our mutual 
objectives, we are prepared to assist the government of Mexico and they 
will equally support our efforts.
    Through collaboration and cooperation with Mexico and other 
hemispheric partners we are able to attack the entire chain of illegal 
drug production, shipment and distribution. Close cooperation is the 
key to magnifying our counter-drug efforts. Multinational solutions are 
the best way to counter the multilateral problems of illegal drugs and 
drug-related crime and corruption.
    Our collaborative approach has produced a three-year record of 
positive results. In May, the United States and Mexico released a U.S. 
Mexico Bilateral Drug Threat Assessment, which represents the first 
time our two nations have jointly defined the drug threat. This Threat 
Assessment was followed by a report to the Congress on September 15, 
and will be followed in December by a U.S.-Mexican Counter-drug 
Strategy for mutually reinforcing cooperative action against illegal 
drugs. Our two governments are continuing and enhancing our efforts 
within the framework of our legal systems against the major trafficking 
organizations. We have established better communication and cooperation 
for the return of fugitives for trial, including approval of 
extradition of Mexican citizens on drug charges. As a result we are 
seeing the best opportunity yet for the destruction of major 
trafficking organizations.
    Mexico has made significant strides in preparing the legal and 
institutional infrastructure to combat drug trafficking in a systematic 
manner. Mexico has initiated fundamental reform of the governmental 
institutions essential to the destruction of major drug trafficking 
organizations. Mexico has created a Special Prosecutor's Office for 
Crimes Against Health (replacing the National Counter-Drug Institute 
(INCD), which had been compromised by General Gutierrez Rebollo and 
others). The Zedillo administration has started a comprehensive vetting 
program, which will be widely implemented in the Office of the 
Prosecutor General of the Republic (PGR). Particular subgroups of that 
office have been designed to concentrate on Organized Crime, and to 
staff the Bilateral Border Task Forces. About half of the Organized 
Crime Unit is now staffed with vetted specialists and the Bilateral 
Border Task Forces will be fully staffed with their complement of 
Mexican officers by the end of this year. So far as institutional 
restructuring goes, the government of Mexico informs us that at the 
beginning of October they had evaluated the fitness of 2,231 employees 
in the Office of the Special Prosecutor for Crimes Against Public 
Health (the drug crimes office). Of those, the results of the 
evaluation were available for 1,058. Of that number, 462 were qualified 
for employment and 596 were not approved. On October 1, the Special 
Prosecutor's Office was staffed with 560 employees and the rest were 
awaiting the vetting results before beginning employment.
    Mexico has also passed new legislation that provides an expanded 
range of modem investigative and prosecutorial tools for use against 
drug traffickers. As they become more experienced with the use of 
informants, legal wire taps, and plea bargaining, it is likely that the 
success rate will improve for the investigation, arrest, prosecution, 
and conviction of drug traffickers. Using these new tools, a total of 
$41 million has been seized from the Carillo Fuentes organization 
alone.
    However, much remains to be done. President Zedillo has recognized 
that corruption continues to be a significant threat to Mexico's 
national security. Speaking before Mexico's Congress, Attorney General 
Madrazo told legislators that organized crime is overwhelming the 
nation's police forces, and he urged federal, state and local 
officials, and the public to unite in efforts against crime and 
corruption.
    Reform has been and will continue to be painful, dangerous, and 
time consuming. Reform has exposed Mexico to detailed scrutiny in the 
international community as the extent of drug corruption was made 
public with each new arrest. Nonetheless, President Zedillo has pursued 
a policy of investigation, arrest, and prosecution of corrupt public 
officials. The U.S. must guard against responding to the uncovering of 
official corruption by a single-minded focus on the problems that 
remain. The more considered U.S. analysis is that while problems 
remain, these tough efforts demonstrate the resolve of the Zedillo 
administration to face up to serious shortcomings.
    The U.S. policy with respect to Mexican counter-drug efforts 
recognizes the complexities of our relationship with Mexico. The United 
States and Mexico share a land border that is 2,000 miles long. Our 
nations share growing economic ties vital to the competitiveness of 
both nations. America's imports to Mexico increased by 127 percent from 
1990 ($39.3 billion) to 1996 ($89.4 billion). In the first six months 
of 1997: Texas' exports to Mexico alone were running at an annual rate 
of $23.6 billion (up 62 percent from 1993); Arizona's exports to Mexico 
were running at an annual rate of $2.1 billion (up 84 percent from 
1993); and, California's exports to Mexico were running at an annual 
rate of $5.2 billion (up 92 percent from 1993). \1\ Our people share 
deep ties; nearly one in sixteen Americans is of Mexican descent. It 
would be nearly impossible to sever these ties, but easy and counter-
productive to weaken them. However, by strengthening these ties we 
continue to build a strong foundation upon which to build a lasting 
partnership against illegal drugs.
---------------------------------------------------------------------------
    \1\ Trade benefits reach far beyond the border states. For example: 
Florida's exports to Mexico were running at an annual rate of $1.7 
billion (up 87 percent from 1993); Indiana's exports to Mexico were 
running at an annual rate of $3.1 billion (up 151 percent from 1993); 
Georgia's exports to Mexico were running at an annual rate of $815.7 
million (up 126 percent from 1993); Iowa exports to Mexico were running 
at an annual rate of $228.8 million (up 170 percent from 1993); 
Minnesota's exports to Mexico were running at an annual rate of $877.4 
million (up 71 percent from 1993); and, Massachusetts' exports to 
Mexico were running at an annual rate of $494.5 million (up 26 percent 
from 1993).
---------------------------------------------------------------------------
    The U.S. government is confident that with the continuing support 
of Congress over the coming years, our two nations can significantly 
reduce our common drug threat. The support of Congress is vital if we 
are to continue building the substantive framework and bonds of trust 
with Mexico necessary for progress against the threat of illegal drugs.

                            I. Introduction

    Over the past three years, the United States and Mexico have laid 
the foundation for a cooperative relationship to battle our common 
problems of narcotics trafficking, and the associated crime and 
corruption. Both nations are committed at the highest levels to 
increasing cooperation and making further progress. However, 
impediments to greater bilateral cooperation remain. Corruption remains 
a serious problem for Mexico's law enforcement and judicial 
institutions, counter-narcotics resources are sometimes scarce, and 
historical factors hinder cooperation at operational levels.
    Our common efforts to combat narcotics are part of a complex, 
symbiotic relationship shaped, on the one hand, by history, culture, 
and geography, and, on the other, by the dynamics of a modern global 
economy. About six million people living in the United States were born 
in Mexico, and several million American citizens--nearly one in 
sixteen--are of Mexican descent. More than one half million Americans 
live in Mexico. The busiest border in the world, stretching two 
thousand miles, connects our two nations. Each year more than 250 
million people, 75 million cars, three million trucks, and almost 
500,000 rail cars cross the border. The hundreds of millions of legal 
border crossings and the estimated four million or more illegal 
crossings that occur annually demonstrate the depth and intensity of 
our relationship, and the real concerns that bilateral cooperation must 
address.
    During 1994 and 1995, Mexico faced its worst financial crisis in 
the last 60 years. In 1995, the value of the Mexican peso fell by half 
against the U.S. dollar, interest rates soared above 80 percent, 
official unemployment more than doubled, and Mexico's GDP contracted 
substantially. Thanks to solid macro-economic discipline and the policy 
framework NAFTA helped lock in, Mexico's recovery has been much more 
rapid than expected. Inflation is under control, interest rates are 
falling, employment and consumer spending are turning upward, and GDP 
growth rates are approaching five percent. Our bilateral trade rose to 
nearly $130 billion in 1996, and Mexico recently surpassed Japan as our 
second largest market for U.S. exports (after Canada). Our provision of 
$13.5 billion in emergency loans and loan guarantees in the wake of the 
peso crisis was instrumental in bringing about this recovery. All those 
loans have now been repaid to the U.S. Treasury--with interest.
    Mexico is in the process of a profound political transition, which 
in the long-term will assist in our joint accomplishment of the 
counter-narcotics task. Over the next few years, the increasingly open 
and accountable government will strengthen the focus of Mexicans on the 
institutional renewal needed to combat the corrosive effects of drug 
trafficking and associated corruption. Already, there is wide agreement 
in Mexico on the serious threat to Mexican institutions and society 
posed by narcotics trafficking. Agreement also exists about the 
critical need to confront this threat.
    Within the context of this period of transformation, the U.S. and 
Mexico have laid the foundation for unprecedented binational 
cooperation against our shared narcotics threat. President Clinton's 
visit to Mexico in May 1997 was pivotal in establishing this foundation 
for cooperation embodied in the signing of the Declaration of the U.S.-
Mexico Alliance Against Drugs. President Zedillo's determination after 
his 1994 election that narcotics trafficking poses the number one 
national security threat to Mexico has prompted the Mexican Government 
to take new and important drug control measures.
    However, laying a foundation is only the beginning. Our day-to-day 
interactions with Mexico in the common fight against drugs represent 
the steady building of a lasting partnership against drugs. In certain 
areas cooperation is proceeding smoothly. For example, Mexico has 
criminalized money laundering, facilitated counter-drug overflight and 
refueling, helped halt large cargo plane cocaine shipments from 
Colombia to the U.S., and invited U.S. technical support to strengthen 
its counter-drug institutions and judicial infrastructure. We are 
building a strong framework.
    In other areas cooperation is moving more slowly. Certain law 
enforcement cooperation is constrained by a lack of mutual confidence 
and understandable political sensitivities and restrictions. Mexico's 
law enforcement institutions are afflicted by corruption and in some 
instances have been penetrated by the very cartels they target. 
Extraditions of Mexican nationals on narcotics-related charges remain 
difficult.
    The Administration is convinced that the most effective approach to 
combating drug trafficking is through a highly collaborative 
relationship with the Mexican Government and the Mexican and U.S. 
publics. Efforts with Mexico and other nations of the hemisphere to 
create partnerships for the future must form the base of strength from 
which we can address the shared threat of drugs. Bilaterally and 
multilaterally, we must strengthen our hemispheric coordinated counter-
drug efforts as we build increased linkages between our societies and 
economies. Our focus must be on joint and common progress, not finger 
pointing. Our efforts with Mexico demonstrate the soundness of this 
approach.
    Nowhere is this cooperation more clear than with respect to the 
U.S.-Mexico High Level Contact Group meetings held last week in 
Washington, D.C. During these meetings, we made solid progress in 
developing the bilateral Counter-drug Strategy agreed upon by the 
Presidents in May of this year. We expect the Strategy that will emerge 
from these negotiations to cover the full range of antidrug 
initiatives--from prevention to interdiction, from precursor chemicals 
to money laundering. We anticipate having this bilateral Strategy 
before the American and Mexican people and the U.S. and Mexican 
Congress by year's end.
    My purpose today is to review our efforts toward a collaborative 
counter-narcotics approach over the past three years, and to 
demonstrate how these efforts have brought about real progress both in 
combating drugs and in building stronger and more democratic societies. 
A more comprehensive summation is contained in the September 1997 
Report to Congress.

       II. Mexico's Record of Progress in Fighting Illegal Drugs

A. Increasing Levels of Seizures and Eradication
    In each year since 1994, Mexico has increased the quantity of 
illegal drugs seized and led the world in destruction of illegal drug 
crops. Mexico is currently prepared to match its 1996 eradication 
campaign, which resulted in a record of more than 37,000 hectares of 
illicit drug crops destroyed. In the first eight months of 1997, Mexico 
reports eradicating 12,706 hectares of opium poppy and 10,756 hectares 
of marijuana. Mexico has already seized more cocaine in eight months of 
1997 than in all of either 1995 or 1996. While eradication and seizure 
statistics are imperfect measures of political will or operational 
effectiveness, they nonetheless are valid indicators of a government's 
commitment to fighting drugs.
B. Improving Extradition Cooperation and Strengthening Enforcement 
        Against Fugitives
    Last year, President Zedillo broke precedent by deciding to 
extradite two Mexican nationals. Mexican law permits nationals to be 
extradited in ``exceptional cases,'' but never before had this 
authority been invoked by a Mexican President. The first Mexican 
national extradited to the U.S. was Francisco Gamez Garcia, on child 
molestation charges. The government of Mexico (GOM) also extradited 
Aaron Morel Lebaron, a U.S. citizen who was Mexican by birth, on murder 
charges. The GOM also extradited to the U.S. two individuals with dual 
U.S.-Mexican citizenship on drug charges. Mexican citizenship in these 
cases was acquired by marriage.
    There has been steady improvement in the extradition relationship 
between Mexico and the United States over the last three years, with 
sustained achievements over the past six months. Mexico has extradited 
eleven fugitives to the United States from January through October 26, 
1997, numbers substantially equivalent to those achieved in 1996, but 
vastly improved over previous years. Six of the fugitives were U.S. 
citizens. Of the ten cases, five individuals were extradited for drug 
crimes. Also in 1997, four Mexican nationals have been found 
extraditable by the Mexican Government, but cannot be surrendered until 
either their appeals or sentences are completed.
    Over the past six months, the primary developments in extradition 
of major narcotics traffickers requested from Mexico include the death 
of one of our primary fugitives (Amado Carrillo Fuentes the leader of 
the Juarez gang) and the arrests in Mexico of three significant Mexican 
defendants--Oscar Malherbe, Jaime Ladino, and Jaime Gonzalez Gutierrez 
(also known as Jaime Gonzalez Castro). Gonzalez Gutierrez and Ladino 
were arrested by Mexican authorities at the request of the U.S. and are 
now in custody solely for extradition purposes. Mexico has approved 
extradition of Malherbe, a key lieutenant of Juan Garcia Abrego. He 
will be eligible for extradition upon completion of his sentence. 
However, he has filed an appeal to his extradition. Appeals are still 
pending in four other cases in which extradition has been granted. 
Three of these cases involve Mexican citizens: Tirso Angel Robles, 
Martin Avalos Tescuano, and Rosendo Gutierrez. The other involves a 
U.S. citizen with a claim to Mexican nationality through marriage: 
William Brian Martin.
    To address the problem of ``temporary extradition,'' the United 
States and the GOM have agreed in the Declaration of Mexico-U.S. 
Alliance Against Drugs signed by Presidents Zedillo and Clinton in 
Mexico City on May 6, to negotiate a protocol on temporary extradition. 
This agreement would authorize the temporary surrender of such 
individuals for prosecution and their return after prosecution to 
complete the judicial process or sentence in the apprehending country. 
The U.S. Department of State, in May 1997, submitted a draft protocol 
text to the Mexican Secretariat of Foreign Relations (SRE) for its 
consideration. Agreement was reached ad referendum on a text during the 
recent October 1997 HLCG discussions.
C. Strengthening Law Enforcement and Fighting Corruption Through 
        Reforms
    As seizure statistics and progress on extradition matters reflect, 
under the Zedillo administration, Mexico has made substantial progress 
in reorienting its domestic priorities, policies, and institutions to 
enhance cooperation with the U.S. against drug trafficking. Most 
importantly, the GOM has recognized the magnitude of the drug 
trafficking threat it faces, and has mobilized the resources of society 
to confront this threat.
1. Strengthening Laws and Empowering Law Enforcement
    Mexico's most significant longer-term achievement may be in the 
area of legal reform. Legislative change to Mexico's Penal Code for the 
first time criminalizes money laundering. This new law provides for 
longer jail time for violators and enhanced penalties for government 
officials convicted under its provisions. Similarly, the new Organized 
Crime Law (OCL) provides Mexico with a new arsenal of investigative and 
prosecutorial tools, including electronic surveillance, witness 
protection, plea bargaining, and prosecution for criminal association. 
This new legislation also permits the seizure and forfeiture of assets 
used in illicit activities.
    In the last six months, positive trends have continued as Mexico 
has begun implementing the organized crime and money laundering laws 
and regulations. The Organized Crime Unit (OCU) has been established 
within the Attorney General's Office (PGR) to implement the law and has 
received considerable support from the USG. The GOM reports that there 
are currently 77 prosecutors, investigators, and other personnel 
assigned to the OCU, which will eventually consist of 307 fully vetted 
and trained personnel. In addition to its role in the important 
investigation of former INCD head General Gutierrez Rebollo, the OCU is 
currently conducting more than 30 cases involving the Carrillo Fuentes, 
Arellano Felix, and Amezcua Organizations. Under the OCL's asset 
forfeiture provisions a total of $41 million has been seized from 
associates of the Carrillo Fuentes organization alone.
    Similar progress is being made under the new money laundering law. 
In March of 1997, Mexico's Hacienda issued new regulations governing 
certain financial institutions to enhance the ability to detect and 
track incidences of money laundering, including requirements for: 
reporting currency and other transactions in excess of $10,000; 
reporting suspicious transactions; and, maintaining customer and 
account identification and transaction records. These rules are now 
being implemented.
    Each of these laws is not without its own limitations. For example, 
the money laundering law's customer identification provisions fail to 
apply to beneficial owners, which could be a serious oversight since 
many laundering efforts are undertaken by individuals acting on behalf 
of others. However, taken as a whole, these laws represent substantial 
progress. The United States is working with the GOM to minimize the 
inherent limitations and maximize the ability of the GOM and the United 
States to work together to combat narcotics.
2. Progress Fighting Corruption, But Much Remains to be Done
    Notwithstanding the goodwill and determination of both governments, 
obstacles to both bilateral cooperation and institutional reform 
remain. Mexican counter-drug authorities face an uphill struggle 
against widespread corruption. Drug trafficking criminals use their 
immense wealth, power, and capacity for violence to bribe or otherwise 
neutralize the effectiveness of law enforcement and other government 
officials.
    However, even here we are seeing real progress. In a significant 
departure from the past, Mexico increasingly recognizes the dimensions 
of the problem of corruption and is determined at the highest levels of 
government to confront it. President Zedillo has acknowledged that 
corruption is deeply rooted in Mexican institutions. He has demanded 
that public officials lead a society-wide effort to create a culture of 
respect for law. He has confirmed the determination and demonstrated 
the resolve of his Administration to combat and eventually eliminate 
official corruption. President Zedillo's understanding and resolve now 
permeates his administration; Attorney General Jorge Madrazo, in an 
appearance before Mexico's new Congress on September IO, said that 
organized crime is overwhelming the nation's police forces, and urged 
federal and state officials and the public to unite in efforts against 
crime and corruption.
    The Zedillo Administration's commitment to root out corruption has 
had far-reaching consequences for Mexico. In February, Brig. Gen. Jesus 
Gutierrez Rebollo, then the Commissioner of the National Counter-
narcotics Institute (INCD), was arrested on narco-corruption charges. 
Subsequently, President Zedillo launched extensive restructuring of 
Mexico's drug law enforcement organizations. The INCD was dissolved and 
the Special Prosecutor's Office for Crimes Against Health (FEADS) was 
announced as the first phase of a comprehensive Mexican strategy to 
reform the entire PGR. The GOM is attempting to rebuild its critical 
drug law enforcement institutions from the bottom up. The Gutierrez 
Rebollo case, and other highly publicized cases involving law 
enforcement, military and other government officials, underscore an 
invigorated GOM policy of openly attacking corruption.
    The GOM has taken a number of important substantive steps towards 
reducing drug corruption in the ranks of law enforcement. The 
dissolution of the INCD has been accompanied by the creation of new 
vetted units within the PGR, namely the FEADS and the OCU discussed 
above. Vetting for these units is both more thorough and more 
widespread than in past efforts. The GOM plans to screen all employees 
of the PGR; according to the GOM, to date, 2,231 employees have been 
examined, results are in on 1,058, and of that number 462 qualified for 
employment. The Attorney General has also ordered comprehensive drug 
testing for PGR officials and is prosecuting officers found to test 
positive. The GOM has also applied the Organized Crime Law in its 
investigation and prosecution of General Guiterrez Rebollo. Recent 
press accounts indicate that as many as 34 senior officers have been 
identified for disciplinary action for their alleged ties to narcotics 
trafficking. These initiatives are tangible evidence of an increased 
willingness and commitment on the part of the GOM to deal with the 
threat of narcotics-driven corruption.

                III. Bilateral Counter-Drug Cooperation

    Since the formation of the United States-Mexico HLCG in March 1996, 
and President Zedillo's declaration that drug trafficking is the main 
threat to Mexico's national security, Mexico and the United States have 
worked more closely to coordinate counter-drug policy and elevate the 
priority of drug control issues. The U.S. and Mexico reached agreement 
on the nature of the drug threat to our two societies in the United 
States Mexico Bilateral Drug Threat Assessment published in May 1997. 
In May of 1997, Presidents Clinton and Zedillo also signed the 
Declaration of the U.S.-Mexico Alliance Against Drugs (See attachment 
3). The Alliance established counter-drug objectives and committed both 
nations to sixteen specific counter-drug goals. These goals are: 
reducing demand through information, education and rehabilitation; 
reducing the production and distribution of drugs; focusing law 
enforcement efforts against criminal organizations in both countries; 
strengthening law enforcement cooperation and coordination; bringing 
fugitives to justice, including through facilitating temporary 
extraditions for trial purposes; targeting firearms traffickers; 
developing hemispheric agreement outlawing illegal arms trafficking; 
conducting joint efforts to enhance the success the U.N. Special 
Session on Illicit Drugs; combating corruption; controlling precursor 
chemicals; implementing laws to detect and penalize money laundering; 
seizing drug proceeds and directing them to anti-drug efforts; 
improving the capacity to interrupt drug shipments by air, land, and 
sea; expanding training and technical cooperation; enhancing 
cooperation along both sides of the common border; and, improving 
information sharing and coordination between our counter-drug forces.
    Institutional cooperation between United States and GOM agencies on 
counter-drug activities improved measurably in 1996 and has continued 
to improve in 1997. In 1996-1997, Mexican law enforcement institutions 
underwent rapid personnel turnover as they were rocked by revelations 
about the degree to which drug traffickers had penetrated law 
enforcement. In the last six months, Mexican institutional reforms have 
helped stabilize the situation and create the basis for law enforcement 
cooperation in an atmosphere of trust. Nonetheless, there is still need 
for greater law enforcement cooperation, and our efforts reflect this 
need.
    The HLCG continues to provide an effective cabinet-level forum for 
coordinating counter-drug policy at the national level. As directed by 
Presidents Clinton and Zedillo in May, the work of the HLCG is now 
focusing on developing a Joint U.S.-Mexico Counter-drug Strategy. The 
process of developing the joint strategy has led to a greater mutual 
understanding of national capabilities and limitations and has provided 
the impetus for enhancement and integration of ongoing cooperative 
efforts across a broad spectrum of activities.
A. Building Stronger Working Relationship Between Law Enforcement 
        Organizations
    The United States and Mexico have established a multi-tiered 
structure for cooperation on law enforcement matters. The HLCG provides 
a policy framework for joint counter-narcotics cooperation. A working 
group of the U.S.-Mexico Binational Commission meets regularly to 
address a full range of law enforcement issues. Closer to the 
operational level, the Senior Law Enforcement Plenary Group, chaired by 
a U.S. Deputy Assistant Attorney General and the Mexican Deputy 
Attorney General, deals primarily with operational matters related to 
drugs. Much of the substantive work and progress overseen by these 
groups is accomplished by technical working or consultative groups, 
which cover specific areas such as money laundering, chemical control, 
demand reduction, prisoner transfer, extradition, and mutual legal 
assistance. These working groups meet regularly to exchange information 
on laws and regulations, discuss procedures and problems, plan joint 
strategies, promote expanded information sharing, and organize 
training.
    We also expect to see further improvements in operations level law 
enforcement cooperation through the Bilateral Border Task Forces 
(BTFs)--bilateral drug law enforcement units established along the 
U.S.-Mexico border by a 1996 Memorandum of Understanding. The BTFs were 
designed to be the key units and cornerstone for U.S.-Mexico 
cooperative enforcement efforts targeting the major drug trafficking 
organizations along the border.
    Reflecting administrative and operational problems, the BTFs are 
among the first PGR units to undergo vetting and reorganization. (In 
April, Mexican Attorney General Jorge Madrazo and Special Prosecutor 
Mariano Herran announced that BTF personnel would be replaced by 
properly vetted, top graduates of the May 1997 PGR Academy class.) The 
time required for training and screening of the new personnel has 
slowed BTF efforts. However, in the long run these initiatives will 
strengthen the base of trust upon which greater gains can be made. 
Additionally, the BTF's are somewhat constrained because the full 
complement of U.S. personnel has been prevented from joining the groups 
for security reasons The safety and security of U.S. personnel in this 
and other counter-narcotics related activities in Mexico is of great 
concern to the Administration. To help ensure the safety of BTF 
personnel, the GOM has agreed to provide official-acts immunity to U.S. 
participants in the BTFS. Building upon these gains, in July, the GOM 
formally authorized an increase in the number of U.S. law enforcement 
personnel assigned to Mexico, adding six DEA and six FBI Special Agents 
to support U.S. investigations and work with Mexican counterparts. 
Several of those resident agents will be assigned as liaison with the 
BTFS.
B. Expanding Information Sharing and Coordination
    Information sharing is critical to the effectiveness of both 
national and bilateral counterdrug efforts. One of the most critical 
elements in this process has been the effort by the GOM to improve its 
information security practices, including intensified security 
screening for Mexican personnel who handle U.S.-provided information. 
These ongoing GOM screening efforts will be critical to building trust. 
However, it must be understood that to the extent that concerns about 
security of information remain, greater information sharing will be 
constrained. We must be aggressive in seeking opportunities for 
cooperation, exchange and coordination, but continue to be prudent in 
implementing these efforts.
1. Sharing Prosecutorial Information
    The U.S. and Mexico have been developing new ways to improve the 
use of the Mutual Legal Assistance Treaty (MLAT) to fashion stronger 
cases against individuals involved in transborder narcotics trafficking 
and related crimes. Specifically, as an incentive for Mexican prisoners 
to appear as witnesses in U.S. proceedings (as required by the MLAT) 
Mexican authorities have recently agreed to use the Organized Crime Law 
to seek a reduction in a witness' Mexican sentence based upon full and 
truthful cooperation with both U.S. and Mexican prosecutors and 
investigators.
2. Sharing Strategic and Tactical Information and Improving 
        Coordination
    The development of strategic and tactical information sharing 
institutions and practices has improved understanding of drug 
trafficking organizations and increased law enforcement effectiveness 
in both countries. One of the most important advances is the 
Information Analysis Center (IAC), an interagency multi-source 
intelligence fusion center located in the U.S. Embassy in Mexico City, 
which develops strategic intelligence for use by U.S. and Mexican law 
enforcement agencies.
    Additionally, the IAC plays a key role in the tactical information 
sharing process. A secure communications link between the IAC and 
CENDRO has been in place since December 1996 to share sensitive 
information and has been used with increasing frequency. The link is 
especially valuable for sharing real-time tracking information to 
support Mexican end game operations, for example:

   In January 1997, the IAC passed locational data to Mexican 
        naval units, which boarded the vessel ``Viva Sinaloa'' and 
        seized more than three metric tons of cocaine.
   In July 1997, the transfer of extensive real-time tracking 
        information on airplanes and fast boats resulted in a 1,000-
        kilogram cocaine seizure on the waters north of San Andres 
        Island in the Caribbean.
   During the first seven months of 1997, IAC air alerts 
        resulted in a foiled airdrop in Mexican waters; the seizure of 
        175 kilograms of cocaine, 32 kilograms of marijuana, an 
        aircraft, and a vehicle; and the arrest of four persons on 
        drug-related charges.

    Given the changing face of trafficking patterns, with increases in 
the use of maritime shipments, we are presently examining ways to 
improve our information sharing and coordination with the Mexican 
Government.
3. Sharing Maritime Information and Improving Coordination
    Recent meetings between high level USCG and Mexican Navy officials 
have led to several agreements for increased cooperation with respect 
to information sharing and communications. Since direct communication 
and coordination for maritime counter-drug operations along the Texas/
Mexico border began in June 1997, information has been successfully 
exchanged with the Mexican Navy on five separate occasions concerning 
lancha (small boat) activity in the vicinity of the U.S.-Mexico border.
4. Sharing Financial Information
    The governments of the United States and Mexico are cooperating to 
attack the financial underpinnings of drug trafficking organizations. 
U.S. and Mexican authorities now routinely share tax and financial 
information via a series of formal agreements. These agreements (the 
Financial Information Exchange Agreement, Tax Information Exchange 
Agreement, and Mutual Legal Assistance Treaty) allow each country to 
assist the other in combating financial crimes by exchanging evidence 
and other financial data.
5. Exchanging Information at the Border
    Along the U.S.-Mexico border (particularly in the San Diego-Tijuana 
area), special programs are being developed and implemented to exchange 
information and evidence needed to arrest and prosecute transborder 
criminals, for example:

   Consultations continue to find better ways to ensure that 
        minor transporters of drugs across the border can be prosecuted 
        in their country of origin with the help of evidence collected 
        by the border immigration or customs authorities of the 
        excluding country.
   The U.S. and Mexico recently established the Southern 
        California Border Public Safety Council, within the Border 
        Liaison Mechanism, to handle violent cross-border encounters 
        and facilitate investigations by officials from both nations at 
        crime scenes. (It is anticipated that the enhanced cooperative 
        measures developed by the Council will serve as a model for 
        similar bilateral groups across the border region.)
   U.S. and Mexican Customs Port-of-Entry Directors can now 
        communicate with each other via a direct telephone link. As a 
        result, information on large scale public gatherings, mass 
        migrations of persons, and individuals avoiding law enforcement 
        efforts can be immediately passed to the affected U.S. or 
        Mexican port, making the border environment safer for citizens 
        and customs officers of both nations.

6. Exchanging Information on Precursor Chemicals
    Enhanced communication has also occurred in the area of precursor 
chemicals--due, in large measure, to cooperation through the Bilateral 
Chemical Control Working Group. In 1997, Mexico implemented regulations 
limiting the legal importation of precursor chemicals to seven 
designated ports of entry. Since March 1997, at Mexico's request, the 
United States provides advance written notification for each precursor 
shipment being shipped from the U.S. to Mexico. The two countries are 
exploring more direct communications through an electronic mail package 
similar to the links the U.S. maintains with the European Union and the 
International Narcotics Control Board.
C. Building Counter-drug Capabilities Through Training
    Both nations agree that training will play a crucial role in 
rebuilding Mexico's drug law enforcement institutions, particularly 
with respect to strengthening law enforcement cooperation. At the May 
meeting of the Presidents in Mexico City, the U.S. and Mexico agreed to 
broaden Mexico's efforts to strengthen the core training and 
professionalism of Mexico's federal police and prosecutors. The two 
governments have focused their immediate attention on training and 
equipping specialized anti-crime units such as the OCU, the BTFS, and a 
Financial Intelligence Unit.
1. Training Law Enforcement
   At the operational level, combined training for the OCU and 
        BTFs has already begun. Thirty-nine fully-vetted Mexican agents 
        have attended a four-week advanced training program in the U.S. 
        sponsored by DEA, FBI, the Department of Justice, and the 
        Department of the Treasury.
   The Internal Revenue Service Criminal Investigation Division 
        (IRS-Cl) continues to provide training for criminal 
        investigators and prosecutors responsible for the enforcement 
        of Mexico's new financial crime and money laundering laws.
   Two 1996 training programs on processing and analyzing 
        Suspicious Activities Reporting (SAR) and money laundering and 
        financial investigative techniques, marked the first time that 
        members of the Hacienda and PGR participated in joint training 
        to coordinate and maximize the effectiveness of the new anti-
        money laundering legislation.
2. Training the Criminal Justice System
   The USG and GOM are developing a project to provide 
        technical assistance and training to the PGR in a range of 
        areas including: strategic planning, training, resource and 
        personnel management, policy and procedure development, and 
        recruitment and selection.
   The U.S. Agency for International Development has also 
        initiated a U.S.-Mexico Judicial Exchange Program. The program 
        has established a two-year series of bilateral seminars and 
        conferences on judicial topics, including organization and 
        administration, information management, organized crime, 
        extradition procedures, and rules of evidence.
3. Training and Equipping to Enhance Mexican Military Interdiction 
        Efforts
    Given President Zedillo's decision to temporarily expand the role 
of the Mexican military in counter-drug missions, development of 
effective military counter-drug capabilities is essential. The two 
governments are cooperating extensively on training and equipping 
Mexican military counter-drug efforts, including:

   The Department of Defense (DoD) has established a training 
        and equipment program for the development of an airmobile, 
        rapid-reaction, counter-drug capability to support drug 
        interdiction efforts in Mexico. In FY 96, approximately 300 
        Mexican military personnel completed counter-drug training 
        provided by DOD. In FY 97, more than 1,500 Mexican military 
        personnel will be trained in an expanded counter-drug training 
        program. Training is now focused on GAFE units (Grupos 
        Aeromoviles Fuerzas Especiales--elite Mexican Army Special 
        Forces units trained in air assault interdiction operations) 
        and the UH-1H squadrons that support their operations. Training 
        of GAFEs is scheduled to continue through FY 99. All GAFE 
        training includes a strong human rights component.
   DoD is transferring 73 UH-1H helicopters to the Mexican Air 
        Force to support GAFE unit counter-drug operations and four C-
        26 fixed wing turboprop aircraft for use in counter-drug 
        reconnaissance and support missions. These assets are a 
        significant improvement in Mexico's counter-drug capabilities. 
        To further bolster Mexico's longterm ability to maintain the 
        counter-drug UH-1H fleet, Section 1031 of the 1997 Defense 
        Authorization Act provided $8 million in counter-drug 
        procurement support to Mexico. Authority to continue these 
        vital efforts is being sought in the FY98 Defense Authorization 
        Bill; without this authority, we will be unable to continue 
        this support effort. These increased assets have produced 
        results. From December 1996 to August 1997, these aircraft 
        logged a total of 3,600 flight hours supporting counter-drug 
        missions. According to the GOM, through May 1997, UH-1H 
        flights: located 9,076 drug fields; identified 281 new 
        clandestine airfields; identified 30 previously unknown areas 
        suitable for clandestine airstrips; identified 56 previously 
        unknown possible border crossing points; and seized 4,605 
        kilograms of marijuana.
   DOD, with the support of the U.S. Coast Guard (USCG), has 
        also developed a maritime counter-drug training program to 
        train Mexican naval forces for operations in a marine/coastal 
        and riverine environment. More than 600 Mexican Navy personnel 
        will receive this training in 1997. Mexico also acquired two 
        U.S. Knox class frigates for use in a maritime counter-drug 
        role, and DoD will provide training to assist in developing 
        this capability. To further assist the GOM in improving its 
        maritime law enforcement capabilities, the USCG also provides 
        training to the Mexican Navy in basic boarding and law 
        enforcement procedures.
D. Improving Interdiction Cooperation and Border Coordination
1. Enhancing Maritime Cooperation and Coordination
    Maritime counter-drug operations gained new significance in FY 97, 
as both governments recognized the increased threat posed by maritime 
transport of cocaine, marijuana, precursors, and other related 
contraband, both in commercial shipping and in smaller, high 
performance ``go-fast'' boats. Mexico and the United States made 
advances in the areas of training, information exchange, and 
cooperative maritime law enforcement.
            a. Maritime Air Patrols
    The exchange of information between Mexico and the U.S. concerning 
suspected maritime trafficking has enhanced coordination on 
reconnaissance flights. In addition, Mexico's willingness to pursue 
traffickers several hundred miles out to sea has greatly improved 
maritime interdiction efforts. The result has been significant seizures 
near the Yucatan Peninsula, and areas near the southern tip of Baja 
California and the adjacent west coast of the Mexican mainland.
            b. Cooperative Maritime Interdiction Operations
    The USCG, in conjunction with other federal law enforcement 
agencies, is also conducting maritime interdiction operations in the 
coastal waters along our border with Mexico in both the Pacific and the 
Gulf of Mexico. Operation GULF SHIELD is centered in Brownsville, 
Texas. Operation BORDER SHIELD is centered in San Diego, California. In 
conjunction with Operation GULF SHIELD, the Mexican Navy is conducting 
Operation TAMAULIPAS 97 along the Texas/Mexico border. The Mexican Navy 
has two warships with deployed helicopters in support of the operation, 
and has expressed a desire to continue this operation indefinitely. In 
addition, the Mexican Navy is requiring the registration of all small 
boats and the sale of outboard engines larger than 75 horsepower.
    The results of enhanced cooperation in maritime interdiction can be 
seen in the success of Operation BORDER SHIELD. On August 11, 1997, 
Joint Interagency Task Force West developed information on a smuggling 
operation south of Acapulco involving the transfer of drugs from a 
mother ship to a go-fast boat. The USCG Cutter BOUTWELL, a U.S. Navy P-
3, three Mexican Navy vessels, and a Mexican Navy aircraft responded. 
USCS aircraft tracked the go-fast boat, which jettisoned more than 100 
bales of cocaine. Despite the Mexican Navy's fast response, the go-fast 
escaped under cover of darkness before the authorities could arrive. 
However, BOUTWELL and the Mexican vessels recovered more than 2.7 tons 
of jettisoned cocaine, which was transferred to the custody of the 
Mexican Navy. The Mexican Navy support to this successful operation 
showcases the potential for cooperative maritime law enforcement.
    Similarly, at the Mexican Government's request, USCG Law 
Enforcement Detachment Teams (LEDETS) deploy with increasing frequency 
to Mexico to assist the Mexican Navy with dockside boardings using 
IONSCAN equipment. During the course of one deployment in 1996, the 
LEDETs boarded seven vessels suspected by the Mexican Navy of drug 
smuggling. Although no contraband was discovered, several positive hits 
indicated the prior presence of drugs. On the basis of this evidence, 
Mexico seized all seven vessels with an estimated total worth of $3 to 
$4 million. In January 1997, a LEDET team participated in the boarding 
of the ``Viva Sinaloa,'' leading to the seizure of more than three 
metric tons of cocaine. In addition, LEDET personnel have appeared in 
Mexican courts three times to testify as expert witnesses against 
suspected drug smugglers, most recently on July 22, 1997.
2. Expanding Air Interdiction Cooperation
    The USCS Aviation Program has been involved in counter-drug 
operations with Mexico since 1990, resulting in an excellent level of 
cooperation. The GOM authorizes regular overflight and case-by-case 
pursuit in Mexican airspace for USCS P-3 aircraft monitoring suspect 
narco-trafficking aircraft, or responding to emergent intelligence. 
Regular pre-authorized overflights require a Mexican national, in most 
cases a representative from the PGR, to be present. The Mexican 
representative aboard the USCS aircraft serves as a coordinator for 
Mexican law enforcement assets involved in prosecuting the suspect 
track.
    USCS has proposed an exchange of liaisons between the DAICC and its 
counterpart CENDRO (the Mexican national counter-drug coordination and 
intelligence center). The DAICC offers the only means of monitoring 
suspect low-level flights in northern Mexico. The U.S. believes that 
the proposed liaison exchange will enhance communication between 
Mexican and U.S. law enforcement and help improve apprehension rates 
for drug trafficker aircraft over Mexico. Mexico accepted this offer 
during our October HLCG meeting and both nations will soon have liaison 
officers operating at the respective centers.
    Air interdiction cooperation is expected to improve in the wake of 
the GOM's agreement to enhance bilateral detection and monitoring 
cooperation, as well as streamlining overflight and refueling request 
procedures. Mexico recently provided immediate authorizations and 
assistance for U.S. aircraft to overfly Mexican air space when 
observing suspected drug trafficking aircraft flying into Belize and 
Guatemala. This assistance included permission to refuel in Mexico and 
agreement to keep airfields open while detection and monitoring 
missions were airborne and in possible need of fuel. As the result of 
high-level discussions during the Bilateral Working Group on Military 
Cooperation meeting held in May 1997, Mexico has streamlined the 
procedures by which U.S. aircraft and maritime vessels supporting 
counter-drug missions can receive authorization to overfly or refuel in 
Mexican territory.
    Additionally, the capabilities of Mexico's own air interdiction 
program have gown exponentially since its inception in 1991. For 
example, in coordination with similar U.S. efforts, and with U.S. 
support and training, Mexico has acquired Citation interceptor 
aircraft, which are now carrying out interdiction efforts in the 
Southwest border region. The record of success already achieved could 
be strengthened with new initiatives in the future, perhaps including 
cooperative operations to target ongoing suspect air activity occurring 
just south of the U.S.Mexican border.
3. Improving Border Coordination
    The USCS and Mexico have improved their communications and 
cooperation. Port Quality Improvement Council's (PQIC) have been formed 
in an effort by the major U.S. federal inspection agencies (USCS, 
Immigration and Naturalization Service, and Department of Agriculture) 
to coordinate the management of large Southwest Border ports-of-entry. 
PQIC coordination and communication has been extended to Mexican 
counterparts via the Border Working Groups operating at the local level 
at Southwest Border ports. Increased communication between U.S. and 
Mexican customs officials along the border has improved traffic 
management and facility usage. Cargo and passenger facility hours of 
operation are now coordinated, increasing the efficiency of both U.S. 
and Mexican agencies.
            a. Border Liaison Mechanism (BLM)
    The U.S. and Mexico created the BLM in 1993 to improve local 
communication on border incidents. The principal officers at U.S. and 
Mexican Consulates in five border pair cities (Tijuana/San Diego, 
Ciudad Juarez/El Paso, Nuevo Laredo/Laredo, Hermosillo/Nogales, and 
Matamoros/Brownsville) chair quarterly meetings with law enforcement 
officials, civic leaders and representatives of inspection agencies to 
discuss ``border cooperation and any recent violent incidents.'' 
Additional BLMs have been added at Mexicali/Calexico, Reynosa/McAllen, 
and Ojinaga/Presidio.
    The BLMs have proven useful in resolving problems locally that 
otherwise might have escalated to national-level issues. In addition to 
narcotics-related issues such as border violence and customs 
inspections, BLMs have also dealt successfully with other issues, 
notably port management, border facilitation and immigration questions.
            b. America's Narcotics Control Initiative (ANCI)
    Through the ANCI program, USCS will assist exporters, carriers, and 
port authorities in developing and implementing security programs and 
initiatives that safeguard legitimate trade from being used to smuggle 
narcotics and to assess border operations. ANCI will build upon the 
current Carrier Initiative and Business Anti-Smuggling Coalition 
programs, which USCS has promoted with industry in the hemisphere. 
Mexico is one of the obvious target countries for the ANCI.

                               Conclusion

    The U.S. strategy is to build a strategic partnership with Mexico 
to counter the threat of drugs our two nations share. This strategy has 
a three-year record of solid progress. Presidents Clinton and Zedillo 
have signed an Alliance against drugs that sets forth tough but 
achievable goals and markers. We are working with Mexico to develop a 
historic bilateral Strategy to meet those goals. At the local level, 
the Border Liaison Mechanisms along the Southwest border are building 
trust and producing real results. Internally, the Zedillo 
administration is demonstrating in tangible ways--not just in words--
its resolve to release Mexico from the choke hold of drug-driven 
corruption. This a foundation upon which greater progress can be built 
against drugs.
    However, optimism must be tempered by realism. As President Zedillo 
himself has recognized, drug-driven corruption threatens Mexico's 
national security and even its national sovereignty. A climate of 
violence exists along the U.S.-Mexico border that places the lives of 
law abiding-citizens at risk as well as law-breaking criminals. 
Traffickers continue to smuggle drugs across the border into America. 
Problems remain. The issue is how best to confront them.
    Our policies must reflect the complexities of our relationship with 
Mexico. We cannot alter the fact that we share a 2,000 mile land border 
with Mexico. Nor is it within our interests to undermine the economic 
progress we are making as partners in a global market. Imports from the 
United States to Mexico increased 127 percent from 1990 to 1996 ($39.3 
billion to $89.4 billion). In the first six months of 1997: Texas' 
exports to Mexico were running at an annual rate of $23.6 billion (up 
62 percent from 1993); Arizona's exports to Mexico were running at an 
annual rate of $2.1 billion (up 84 percent from 1993); and, 
California's exports to Mexico were running at an annual rate of $5.2 
billion (up 92 percent from 1993). Most importantly, given the 
sensibilities and history at work, publicly cataloging Mexican 
shortcomings may sometimes prove counter-productive in truly reducing 
drug trafficking and use.
    Both the United States and Mexico share blame and responsibility. 
Despite recent declines in drug use in America, we remain one of the 
world's largest drug consuming nations. It is our demand for drugs that 
plays a major role in driving this deadly market.
    Multinational attacks on the entire chain--from production to 
consumption--offer the best solution to the international drug problem. 
Given Mexico's political situation, we are more apt to attain better 
results as a partner confronting this common problem than as a powerful 
neighbor making demands. The Administration's collaborative efforts 
with Mexico reflect this understanding and are producing measurable 
results.
    ONDCP looks forward to working with both the Committee and the 
Caucus as we move forward in our collaborative work with Mexico and 
other nations, and as we confront the problems of illegal drugs here at 
home. The bipartisan Congressional support we have received has been 
critical to the progress we have already made. Over the last 17 years, 
the overall number of drug users in America has declined by 50 percent; 
the number of Cocaine users has fallen by 75 percent. The past month 
use of illicit drugs by children, ages 12 to 17, has dropped from 10.9 
percent to 9 percent. Crack use among arrestees is down across the 
nation, and according to the latest National Institute of Justice 
study, the decline in crack use has contributed to the nation-wide 
decline in homicides. Our ultimate goal is to reduce drug use in 
America down to a historic low in the coming decade. We welcome your 
continued help in making this goal a reality, including:

   Support for the Administration's bill to reauthorize ONDCP;
   Long-range counter-drug planning, including a 10-year 
        strategy supported by a five-year budget and performance 
        measures to assess our work; and,
   Confirming the two ONDCP nominees now pending before the 
        Senate before recess.

    Your support for these and other initiatives is vital to continued 
progress in decreasing the availability and use of illegal drugs in 
America.
    Thank you for this opportunity to testify on U.S.-Mexico counter-
drug cooperation. We look forward to continuing to work together.

    Senator Biden. Can I ask an explanation of that chart? Does 
that mean the high intensity areas are red? That means all the 
high-trafficking areas in the Midwest?
    General McCaffrey. The chart is almost impossible for you 
to read from back there. Let me also offer in your packet you 
have a copy of the border, southwest border HIDTA's. There are 
five of them, and this shows you what counties by law, 1988 
law. I designate these HIDTA's and specify which county they 
are. So the ones in black, you can barely see from up there, 
cover the entire southwest border, and they are rigged 
together.
    There are now 22 HIDTA's, and growing.
    Senator Biden. They are all in black, the HIDTA's?
    General McCaffrey. No, they are in red also. You see the 
northwest HIDTA up in the Seattle area. You can barely see. 
There is a Florida HIDTA, Baltimore-Washington HIDTA. They are 
across the country.
    Senator Kerry. Mr. Chairman, can I get clarification on one 
other thing? Can we go back a chart to the extradition chart? 
General, I just want to understand. It says Mexico has 
delivered 20 fugitives requested by the U.S. so far in 1997. 
Are any of those Mexican nationals?
    General McCaffrey. No. They are all multinational, mostly 
U.S., but there are Canadians.
    Senator Kerry. And then the next line it says, 12 more 
fugitives have been ordered extradited by Mexico. Are any of 
those Mexican nationals?
    General McCaffrey. Yes, six.
    Senator Kerry. So the six you referred to are in that 
group?
    General McCaffrey. Six this year. There were four in 1996.
    Senator Kerry. Four in 1996, six this year, all dual 
nationals?
    General McCaffrey. No. Of the six Mexican nationals, if I 
remember correctly, it is four are Mexican national only. That 
is sort of a deceptive category, because we have criminals who 
desperately try and establish dual nationality. The Mexicans 
will rule on it and grant it yes or no, but regardless of 
whether it is Mexican or dual nationality, they are treated as 
Mexican citizens.
    Senator Kerry. Would it be possible, Mr. Chairman, if the 
General at a later time, if someone on the staff could just 
inform our folks?
    Senator Coverdell. I am sure the General will be more than 
pleased to do that. This is a point of contention, Senator 
Feinstein and the General.
    General McCaffrey. And it should not be.
    Senator Coverdell. It should not be, but maybe we can get 
it cleared up following the hearing. I am going to suggest, 
given the number that we have here, that we limit the time to 
about 3 minutes.
    Senator Dodd. Could you put that map of the United States 
back up? Is Salt Lake City--I do not understand that. What does 
the red mean?
    General McCaffrey. The thing is color-coded by the year 
they are established. You cannot see it from up there. So they 
started in 1990 with five of them, and they are now up to 22. 
There is too much granularity in the presentation for you to 
see it from there. Those are 22 HIDTA's across the United 
States, established sequentially over the years.
    Senator Dodd. What is a HIDTA?
    General McCaffrey. High intensity drug trafficking areas. 
It is a designated group of counties that are there which 
receive Federal money. They have an executive committee, and 
they pull together local, State, and Federal law enforcement.
    Senator Dodd. Am I to presume by this that these are also 
the areas that have the highest density of drug problems?
    General McCaffrey. They were principally began as transit 
zones, so if you were a Miami, you were an access point for 
drugs that were spreading out to other places in the United 
States, You became a HIDTA. That tends to still be the theme, 
but they have been added by Congress year by year with 
differing logics.
    Senator Dodd. Now the lights are beginning to come on. So 
Federal money is going to some areas where there frankly is----
    General McCaffrey. $148 million.
    Senator Dodd. And New York is not included, and Boston, and 
San Francisco.
    General McCaffrey. No, New York is included. Miami, New 
York, Washington, Baltimore, Philadelphia, Chicago, Detroit. 
Some of them are in the process of starting up, several of 
them. Five of them were just added this year.
    Senator Dodd. I think you have answered the question, 
General. I think you are being very candid, and I appreciate 
that.
    Senator Coverdell. Let me begin the questioning with 
Senator Grassley, our cochairman, and under the circumstances 
let us say 5 minutes.
    Senator Grassley. General McCaffrey, first of all, thank 
you for your compliment about the Drug-Free Communities Act. I 
appreciate that very much.
    Before I read a question, I want to ask you to focus on 
your statement about Mexico having a commitment to confront 
corruption, kind of raising the question in my mind the extent 
to which confronting corruption is actually--are they really 
fighting corruption by confronting it, and then I guess, if I 
were going to say what I view as the situation, how are we 
changing a culture of toleration of corruption within Mexico?
    But the question would start with your March 12 testimony 
to Congress. You highlighted the actions that Mexico had taken 
to fight corruption, including the firing of 1,200 officials. 
Is it not the case that most of these people have been hired 
back, but that is not the most important point in my question.
    Outside of the raw numbers, which we both know can 
sometimes be misleading, what events or action, if any, have 
you seen in the Government of Mexico that the United States 
should understand is a change in the level and nature of this 
toleration of corruption?
    General McCaffrey. An earlier comment reminded me of a 
military maxim. Basically I am not paying much attention to 
words, but instead actions. What are they doing? I mean, there 
is going to be a constant swirl of allegations about many 
figures in the foreign arena who may or may not be suspect, so 
what we are doing is trying to watch as closely as we can. What 
are they doing? What are they doing to further a joint 
cooperative effort?
    It is our own viewpoint that--and I say this meaning the 
senior authorities of the U.S. Government, that President 
Zedillo, Cervantas, Carria, Madrazo, the new Attorney General 
and others are serious about this effort.
    Particularly I think this whole issue with the arrest of 
General Guttierez Rebollo was a terrible shock to them. They 
brought in a guy who is one of the few stars in their 
counterdrug effort, who had made three major busts, within 62 
days of installing him in office found out he was a mole for 
one of the five major drug gangs, and the busts were in 
protection of Amado Carrillo Fuentes' gang against others, and 
I think it was a terrible shock to them, and one of the things 
they have done, which is an astonishing task they have taken 
on, is fire 4,000 cops and start over, and they started over 
with the director, and they polygraphed him, gave him a urine 
test, gave him a financial disclosure form, checked his 
background, and put him in office.
    They are now up to a classified number of police officers, 
but one at a time they are starting to rebuild what they are 
calling FIADS, which will be their counterdrug police effort. 
We are watching it. We are trying to support their leadership. 
We think it is working.
    They started a new organized crime unit with two cops, a 
civilian, right, with a Ph.D in criminology, and did the same 
thing with them.
    We are watching their actions on corruption in the Armed 
Forces, and I personally listened to the president of Mexico 
tell the director, Mr. Cervantes, we will go after corruption 
wherever we find it. They have arrested and imprisoned two of 
their general officers. I believe the number is up to 41-some-
odd military people arrested. Guttierez Rebollo is being tried 
by both civilian and military courts.
    Some of these people they fired have been rehired. They 
have administrative rights of appeal. Of the 1,200 fired in the 
IMCD some 300 have been rehired, and none of them are in the 
drug control area, so our view is that they are trying to be 
serious.
    Senator Grassley. My last point would be, in a recent 
Washington Times article you dismissed Canadian Ambassador Marc 
Perrone's criticism of the U.S. antidrug effort in Mexico. The 
Ambassador was quoted as saying, ``I am an expert in the Middle 
East, and when I got here in Mexico I thought I already knew 
everything about corruption, but I was wrong.''
    Continuing to quote, ``In the area of drug trade I believe 
that all the pressure of the United States toward Mexico is 
only a game that the American Government uses for political 
ends which hides a much bleaker reality. The authorities say 
they are working on fighting drug trafficking, and they put a 
general in charge of fighting drug traffickers and he turns out 
to be one of them. It is a joke. We are discreet about this, 
but it is obvious things are not going well.'' End of quote.
    At that point, you or your spokesman encouraged the 
Ambassador to read the report that you recently put out, and 
claimed that Mexico has made substantial progress in reordering 
its priorities, policies, and institutions to enhance 
cooperation with the U.S. against drug trafficking. End of 
quote.
    So General McCaffrey, what measures do you use to determine 
that substantial progress has been made?
    General McCaffrey. Senator, I actually made no comment 
about that Ambassador's statement.
    Senator Grassley. So the quote is wrong?
    General McCaffrey. I had no comment about it. It did not 
seem for me like a very useful thing for him to have offered. 
But I think you are back to the question of are there real 
results coming out of this cooperation or not, and the answer 
is equipment, training, extradition, money laundering, 8,000 
requests for tracing weapons, of which 11 percent have been 
satisfied, an ATF link on trying to follow the gun-smuggling 
effort, intelligence centers that are operating together, 
Mexican liaison officers that are now going to Riverside Drug 
Interdiction Center, the U.S. Customs Service, and so I think 
in every area there are practical, real cooperative efforts 
going on, and we have ourselves up on the start point of a 10-
year effort to knock out drug-smuggling, which is so 
devastating in its impact on both societies. I think that is 
what is happening.
    Senator Coverdell. Senator Dodd, and thank you, Senator 
Grassley. Senator Dodd.
    Senator Dodd. Thank you, Mr. Chairman.
    Let me if I can, General, just raise two or three 
questions, and then you can take the time to just quickly 
answer them.
    Just in a broad way, if you could give us some sense 
briefly to compare the quality of the cooperation you are 
receiving now from our neighbor to the south, as opposed to the 
cooperation--and just get an initial overview of that.
    Number 2, where are the areas that you think more 
cooperation is needed if you had to prioritize that.
    Third, I wonder if you might just quickly comment on what 
the effects of the July elections were in terms of our ability 
to get cooperation from the legislative body. In any way, have 
those results impacted on the level of cooperation we are 
getting?
    And last, again I did not raise this in my opening 
comments, but obviously we know a lot of time and effort and 
personnel are devoted to the issue of certification, and we 
talked about this. My colleague from Georgia--in fact, I have 
said on numerous occasions that there is the genesis of what I 
consider to be a very sound idea on how we might want to change 
dealing with the old issue of certification so we get away from 
the problems I think we create politically in these countries 
by the United States sort of deciding who the winners and loses 
are in this effort, but I wonder if you might comment on that 
last point as well.
    General McCaffrey. The level of cooperation now versus a 
few years ago, and Senator Dodd, I do not pretend to be an 
expert on Mexico or Latin America, but I have been in and out 
of the region for my entire life. There is no piece of Latin 
America, from Patagonia up to the border, that I have not 
visited numerous times.
    It is my own view that Mexico and the U.S. have had 
historically a tremendous sense of animosity, of fear on the 
part of Mexican authorities of being overwhelmed by an 
intrusive, arrogant U.S. partner, and I think in the last 3 to 
5 years that has changed dramatically.
    In the last 2 years the level of cooperation on the drug 
issue has been phenomenal, to the point that it would clearly, 
it would seem to me, rank as one of the most dramatic 
transformations I have seen in the region in the last 30 years.
    Again, we started with almost no contact military to 
military, police to police, no extradition, no money laundering 
agreements, no legislation in Mexico to deal with the problem. 
Now there is considerable.
    There is considerable work to be done. One of the things we 
have to do is, we have to sit down and hammer out a joint 
strategy. We have to have a plan. We have said when we get the 
plan written by 31 December we want to write performance 
measures of effectiveness. We want concrete goals, which 
Senator Coverdell started off this session with, to hold 
ourselves accountable, and to not say that 10 years out it will 
be solved, but what are we going to deliver each year.
    That is what we are working on. We have to get a joint 
strategy and performance measures of effectiveness.
    July elections are an interesting and rather encouraging 
thing to all of us. I would suggest to North Americans we have 
94 million people who have now dedicated themselves to 
democracy and free elections, and they have voter cards and an 
honest electoral process, and for the first time in 67 years 
the PRI no longer dominates either the State Governors nor the 
legislative branch.
    So we have a very dramatic revolutionary change in our 
democratic partner to the south. I do not know where it is 
going. I am not too sure Mexican authorities do. But it is very 
encouraging, and that is one of the reasons I have been so keen 
in having our U.S. delegation go back and consult with Mexican 
legislators when we are down there.
    Finally, the certification process, Senator, is by law, as 
you know, the Secretary of State's responsibility. What we have 
done, there was one bad article which suggested in Bolivia that 
I had already agreed to turn over certification to the OAS. We 
have deliberately not discussed certification. What we have 
said is, we are going to try and construct sensible, 
multinational cooperative efforts, and that if we can get these 
working in a realistic fashion, then it may be appropriate to 
discuss this binational certification process.
    I would also tell you in private I have told most Latin 
American authorities I deal with do not expect the 
certification law to change in the near term, but I would hope, 
as we understand that this is a cooperative effort, and as it 
begins to work, and it will, we may at that point want to come 
and talk to the Senate about certification.
    Senator Dodd. Thank you very much. Thank you, Mr. Chairman.
    Senator Coverdell. Thank you, Mr. Chairman.
    Senator Biden.
    Senator Biden. General, your last answer answered my first 
question, which is that you have to have something in place 
before you take out of place what is in place. Is that 
essentially your view, or is that just a reflection of a 
political reality?
    General McCaffrey. Both.
    Senator Biden. A second question I have relates quite 
frankly to whether or not the next time we have the hearing you 
are going to be here to talk to us, in terms of the 
recertification of your office, or the reauthorization of your 
office. Recertification we would not have any problem with, but 
the reauthorization is a problem.
    When I wrote this legislation back in 1987 creating the 
office you now occupy I quite frankly had very, very basic and 
I think still sound objectives.
    One was that we had about 35 different Federal agencies all 
claiming to have responsibility for some portion of the effort 
relating to drugs, and yet nobody in charge, and there was no 
place where a strategy resided, or no one responsible for 
coming up with a strategy, and the second purpose was to, as a 
consequence of putting one person in charge, generate an 
accountability, and that is why it was a requirement that there 
be a yearly, an annual strategy that was required to be put 
forward. My purpose there was accountability.
    Now, you come back and you have said, in the attempt at 
reauthorization you have said you would like the deal changed a 
little bit. You have said you would like to have annual 
reporting and a 10-year strategy, is that correct?
    General McCaffrey. Yes, Senator.
    Senator Biden. Now, can you tell me how your reporting 
requirement would meet the intention of the law, and I know the 
intention of the law, because I wrote it personally, which was 
requiring accountability on the part of the administration, 
every President to be accountable on the drug issue. How would 
your reporting, as opposed to a new strategy every year, meet 
that responsibility?
    General McCaffrey. Senator, it seems to me part of it may 
be just using terms differently. I am trying to bring to this 
the same logic we used in organizing resources and people in 
machinery to achieve long-term outputs in the national defense 
arena.
    It occurs to me there is no reason why we should not be as 
serious about the drug issue as a national security issue. The 
strategy, a strategy to put a man on the Moon takes 10 years to 
accomplish it. A strategy to build the interstate highway 
system was 18 years. A strategy to put the Panama Canal into 
place was the better part of 15 years. We need a long-term 
focus on the drug issue, because the war is going to be won in 
the value systems of our adolescent children, and we are going 
to have to put treatment and prevention and law enforcement and 
synchronous support.
    We are going to get this $195 million tremendous gift the 
U.S. Congress gave us to work the issue of the national youth 
media strategy and change attitudes. It takes a long-term 
focus.
    Now, we have a draft proposal of performance measures of 
effectiveness over here for congressional consultation, and 
that is the deal. We have worked thousands of hours----
    Senator Biden. Let me stop you there, because a lot of 
people get confused about this. I happen to support the change 
that you are proposing, but just as we are seeking certain 
requirements be met for certification of Mexico, you are saying 
to us that by issuing an annual report, which worries some of 
my colleagues, as opposed to a strategy, that you are at the 
same time in that report going to account for somewhere, as I 
count it, nearly 100 specific detailed measures as to what kind 
of progress or lack of progress you are making on the strategy. 
Is that correct? Is that what you mean by the performance?
    General McCaffrey. I come over here and say, here is the 
resources you gave us, and here is the output function we 
achieved in definable variables. Here is what we got with your 
money.
    Senator Biden. So that this will be not less specific, but 
more specific.
    General McCaffrey. Absolutely.
    Senator Biden. Than a general strategy.
    General McCaffrey. Absolutely.
    Senator Biden. Now, a second point--and my time is up. I 
will come back. I am sorry.
    Senator Coverdell. General, I do not differ with the 10-
year strategy, but I think we do need bolder short-term goals 
that everybody understands.
    In other words, if you were a new coach at XYZ University 
and said we are going to have a championship 10 years from now, 
you probably would not be there very long.
    Senator Dodd. At Connecticut you might. [Laughter.]
    Senator Coverdell. At Georgia, no. [Laughter.]
    Senator Coverdell. Coming to the border, you said a moment 
ago 5 years. Could that be accelerated, and a couple of 
questions about it. Can we accelerate that? Can we define it? 
Can we--and I would like your comment on how we prepare 
ourselves for shifted strategy on their part.
    I mean, we closed the Caribbean. They ended up in Mexico. 
It is clear that if we are successful on the border between 
ourselves and Mexico, then we have to be aware of the other 
entry ports.
    And last, in your discussions with the Mexican Government, 
can they perceive what we are doing on the border as being in 
their best interest and not this forcible wall between the two? 
I hope we can achieve that, because I believe both countries, 
and the tensions that are being built between us because of 
this issue, would have to be ameliorated if we had a managed 
border instead of an unmanaged border.
    General McCaffrey. Senator, I think both your comments are 
good ones.
    The first thing, arguing by analogy is a shaky thing to do. 
We won the Gulf War not in a 100 hours of armed combat. We won 
it in 15 years of hard work to build the tool we used, and so I 
do believe there ought to be short-term, dramatic efforts to 
protect the American people from drugs, and you are going to 
see them. We have seen them already. You have given us a 12-
percent increase. We are up to $16 billion. You have given us 
serious resources, and they are in effect.
    We have now half the treatment capacity of the country. We 
have an invigorated 21-percent increase in drug prevention 
programs. We have almost doubled the size of the border patrol. 
Sam Banks will tell you he is about to deploy six more giant X-
ray machines that are movable. The Coast Guard has a very 
serious effort going in the Caribbean.
    We are doing a lot of things, and I would hope that next 
year we are going to come down and show you definitive bites 
into some of these problems. It may be you are already seeing 
it, a little bit premature to say. My guess is next year we are 
going to see some definitive steps forward, and the reason I 
say that is, we did get a decrease in the household survey of 
drug use rate this year.
    We told the press carefully it was not statistically 
significant, but what was significant, for the first time in 5 
years, it did not go up, it went down, and crack cocaine 
arrestees went down, and methamphetamines and arrestees went 
down, and emergency room episodes went down, so we think we are 
going go make progress on this.
    Now, back to the Mexican issue. I think there is more we 
can do. You know, I had in my opening remarks, which I did not 
use, a series of rather dramatic improvements since 1990 you 
have made in manning of DEA, manning of INS, manning of the 
border patrol. Things have already begun to happen, but I think 
it is going to take us some time to do these things. I really 
do.
    I think you are going to have to construct a border patrol 
and a Customs Service adequate to protect the American people. 
We are going to have to put in the kinds of things that now 
appear in this tiny California-Mexican border. We put in 46 
miles of fencing. We put in a decent border patrol presence. We 
put in two X-ray machines.
    And so in one place, Tijuana-San Diego, you have a border 
liaison mechanism, tremendous cooperation between the two 
nations. Murders have gone from 65 a year 3 years ago to zero. 
Drugs seized at the border have gone from over 10,000 pounds a 
year to 6 pounds last year, and more important, if you look at 
the beach there, the coastal waterfront, there are families out 
there on the beach now. That would not have happened 3 years 
ago.
    So it is active cooperation between Mexican and U.S. 
authorities. If you talk to this distinguished police officer, 
Russ Leach, back here, the Juarez and El Paso Police 
Departments absolutely are integrating their approach to crime 
on the two sides of the border. The toughest issue is drugs, 
because of the corrupting influence of hundreds of millions of 
dollars.
    So I think they are moving forward on it, is the bottom 
line, but a long way to go.
    Senator Coverdell. General, we are going to have a vote 
here at 4:15, and I wonder if we should not move to the new 
panel rather than another round, and thank the General.
    Senator Dodd. If we could submit some questions.
    Senator Coverdell. We will leave the record open for 3 days 
for formal questions that maybe could not be dealt with.
    Senator Coverdell. It has been a rather long afternoon for 
you, General. As you listened to the statements, I hope they 
were helpful. We thank you for taking the time to appear before 
us today, and I am going to invite the next panel to come 
forward at this point. Thank you, General.
    General McCaffrey. Thank you.
    Senator Coverdell. If I could ask that those in attendance 
with conversations remove them from the committee room, we are 
going to proceed with this panel.
    Our guests are FBI Deputy Director Thomas--let us see, 
get--Kneir, I guess that is the right, correct pronunciation--
Kneir; Assistant Secretary of State for Inter-American 
Affairs--of course, Ambassador Jeffrey Davidow; Director of 
U.S. Customs Agency, Samuel Banks; and Deputy Administrator of 
the Drug Enforcement Agency, James Milford.
    Why do not I go in the order of your seating and begin with 
you, Mr. Ambassador, with each of your comments? And we will 
come on down and then have questions following each of your 
testimonies.
    Ambassador Davidow?

STATEMENT OF THE HONORABLE JEFFREY DAVIDOW, ASSISTANT SECRETARY 
              OF STATE FOR INTER-AMERICAN AFFAIRS

    Mr. Davidow. Thank you, Mr. Chairman. I recognize that we 
have a time problem, and with your permission, I will submit my 
testimony for the record and abbreviate it in my oral 
statement.
    Senator Coverdell. Their--your testimony will be entered 
into the record.
    Mr. Davidow. Mr. Chairman, Mr. Grassley, I wanted to pick 
up on something that Senator Biden said when he was talking 
about his parochial school education and the helpful role that 
the nuns played there in his formation in which he said that he 
had to write many times The road to hell is paved with good 
intentions. He is absolutely right.
    I think the question that is being asked by Senator Biden 
and others is Are we seeing anything else but good intentions 
on the part of the Mexican Government? There is a widespread 
belief in this town that President Zedillo and his cabinet are 
honorable men who are trying to do their best, but are those 
intentions being translated into action?
    And I think while there remains--and we all recognize 
this--a tremendous amount of work that has to be done, we have 
seen in the past year, particularly since the events of the 
Guttierez Rebollo arrest, a series of actions which are very 
important and which go beyond good intentions. And if I could 
go over some of those with you, I think it might be useful.
    A new vetting process was established for special law 
enforcement units that incorporate extensive background checks 
and regular polygraph testing. Mexico established a new special 
law enforcement branch, the Special Prosecutor for Crimes 
Against Health, to replace the discredited National 
Counternarcotics Institute, INCD. I think this is an important 
point. What has happened in Mexico this year is the entire 
gutting and restructuring of their counternarcotics apparatus.
    New Mexican vetted units were established under Mexico's 
Attorney General and have become operational to implement 
Mexico's new organized crime law and to provide an analytical 
capability against the major trafficking organizations.
    These units have begun to develop information in cases. 
Based on Mexican reports, Mexico exceeded in the first 9 months 
of 1997 its 1996 record for eradication of illegal--of illicit 
drug crops and drug seizures.
    Mexico's seizures of narco-traffickers' cash and assets 
reached record levels. The government of Mexico agreed to 
accredit 12 new FBI and DEA agents in-country and provide 
consular privileges and immunities to 22 additional U.S. law 
enforcement officers for the bilateral border task forces.
    Mexico agreed to streamline refueling, overflight, and 
overnight procedures for U.S. drug detection and monitoring 
assets. Mexico enhanced operational coordination with U.S. 
interdiction forces, especially in the maritime arena.
    In coordination with the United States, Mexico conducted an 
aggressive pursuit of top trafficker Amado Carrillo Fuentes, 
which ultimately drove him to plan to flee the country. After 
altering his appearance, he, as you know, died after undergoing 
plastic surgery.
    I continue. The Mexican Government approved the extradition 
of Mexican citizens and has worked closely with U.S. law 
enforcement authorities on extradition priorities.
    This year, the government of Mexico has agreed to the 
extradition of four Mexican nationals wanted on drug charges. 
These individuals have not yet been surrendered. The 
extradition has been agreed to but they have not yet been 
surrendered, pending appeals in Mexican courts.
    Mexico and the United States have reached agreement on the 
text of a protocol to our bilateral extradition treaty, which 
will permit sequential trials in the two countries in cases 
where there are charges against an individual in each country. 
It would clear the way for consecutive prosecutions where that 
currently cannot occur. We have just reached agreement on this. 
It is a protocol to the extradition treaty which will be signed 
shortly.
    And Mexico has arrested a number of major drug traffickers, 
including Juan Garcia Abrego, Jose Pereira Salas, Manuel 
Rodriguez Lopez, Oscar Malherde, Adan Amezcua, and Jaime Arturo 
Ladino.
    I mention all of these things because I do believe that we 
are going beyond good intentions and we are building a process 
which in the years to come will require a whole lot more 
activity. But we are on the right road.
    I do want to comment also on Senator Grassley's comments on 
the certification process, which have been echoed by others. We 
are indeed, yes, trying to find ways to increase multilateral 
cooperation in the drug fight.
    Part of the report that the President submitted to Congress 
on September 15 outlined our strategy to get other countries in 
the hemisphere to develop national plans of drug control and 
drug interdiction, to work cooperatively with us and with other 
countries, to use organizations such as the OAS' Inter-American 
Drug Committee.
    But I also want to stress, and make this perfectly clear, 
that certification is the law of the land. We are committed to 
it. It is not a perfect instrument, as Senator Grassley said, 
but it is a useful instrument. What we are trying to do with 
multilateralization, in getting other countries to cooperate 
with us, is designed to complement our national legislation, 
including certification, not to replace it or other laws that 
we have.
    Mr. Chairman, let me just say as a final point, some notes 
on the problem of corruption. While the Zedillo administration 
is committed to taking aggressive action against drug 
trafficking, it acknowledges that Mexico's justice and public 
security institutions remain seriously flawed.
    Police and military forces lack the tools and training 
needed to counter decisively the major criminal organizations 
operating in Mexico. They also lack the pay scales, job 
security, strong public support, and other incentives to resist 
intimidation and bribes by the criminal organizations.
    The government of Mexico is taking the first steps needed 
to enhance the capabilities and security of its personnel, to 
establish checks and balances within the system, and to combat 
entrenched corruption. This is a process that will take a long 
time. But it has begun and it has begun seriously and it is 
more than intentions.
    Let me end by noting, Senators, that in 2 weeks, we will be 
visited by President Zedillo of Mexico who is coming to 
Washington for an official visit. He will, of course, meet with 
President Clinton. It is my understanding that he will also 
seek to meet with the members of this body, and the House, to 
talk about the very full relationship between the United States 
and Mexico. And, of course, he will be talking about the very 
issues that we are discussing here today; that is, Mexico's 
anti-narcotics fight. Thank you.
    [The prepared statement of Ambassador Davidow follows:]

                 Prepared Statement of Jeffrey Davidow

                U.S.-Mexico Counternarcotics Cooperation

    Thank you, Mr. Chairman, for this opportunity to discuss our 
counternarcotics cooperation with Mexico. This is a priority aspect of 
one of the most important relationships we maintain in the world. 
Taking into account the depth, complexity and importance of the overall 
relationship with Mexico, counternarcotics is not the only in that 
relationship. At the same time, we recognize that the relationship will 
be much more difficult if we cannot make progress on fighting drug 
trafficking.

    Mr. Chairman, your convening this hearing today is timely; just 
last week we held a meeting of the High Level Contact Group on Drug 
Control (HLCG), marking another step forward in our bilateral 
cooperation. And on November 14, Mexican President Ernesto Zedillo will 
make an official working visit to Washington. Among a number of other 
issues, he and President Clinton will be discussing the course of our 
counternarcotics cooperation since.the two Presidents signed the 
Declaration of the U.S.-Mexican Alliance Against Drugs last May in 
Mexico City, as well as our plans for developing further our 
cooperation in the months to come.

    Both the United States and Mexico remain firmly committed to 
efforts to counter the growing threat of large-scale drug trafficking 
and other serious organized crimes. The President's ``Report to 
Congress'' on U.S.-Mexican counterdrug cooperation, released in mid-
September, chronicles the course of Mexico's efforts to reform its 
counternarcotics legal and institutional structures and increase 
cooperation with the U.S. against narcotics trafficking. The report 
does not gloss over the difficulties in our counternarcotics 
cooperation, including corruption and what some have called ``the 
culture of impunity'' in Mexico, institutional and resource weaknesses, 
lack of progress on protection for U.S. law enforcement agents in 
Mexico and continued problems on extraditions.

    These problems notwithstanding, what is significant is that the 
Government of Mexico continues to cooperate with the United States on a 
broad range of counternarcotics activities. Mexico's senior leadership 
recognizes that such cooperation must be real, regular, and reliable. 
How well Mexican political will can be translated into effective action 
against narcotics trafficking will be a major determinant of Mexico's 
success in developing capable counternarcotics institutions and 
confronting widespread corruption. Institutional reform is now underway 
in Mexican law enforcement agencies and the Mexican criminal justice 
system. As institutional and legal reform continue to take root, Mexico 
will be an increasingly effective partner in the fight against drugs.

The ONDCP Report

    As the President's report notes, Mexico scored several counter-drug 
successes this year and implemented a number of changes the U.S. viewed 
as critical to effective bilateral cooperation. In major developments:

   In the wake of the arrest of General Gutierrez Rebollo, a 
        new vetting process was established for special law enforcement 
        units that incorporates extensive background checks and regular 
        polygraph testing.

   Mexico established a new special law enforcement branch--the 
        Special Prosecutor for Crimes Against Health (FEADS) to replace 
        the discredited National Counternarcotics Institute (INCD).

   New Mexican vetted units were established under Mexico's 
        Attorney General and have become operational, to implement 
        Mexico's Organized Crime Law and to provide an analytical 
        capability against the major trafficking organizations. These 
        units have begun to develop information and cases.

   Based on Mexican reports, Mexico exceeded in the first nine 
        months of 1997 its 1996 record for eradication of illicit drug 
        crops and drug seizures.

   Mexican seizures of narco-traffickers' cash and assets 
        reached record levels.

   The Government of Mexico agreed to accredit twelve new FBI 
        and DEA agents in country and provide consular privileges and 
        immunities to 22 additional U.S. law enforcement officers for 
        the Bilateral Border Task Forces. Mexico agreed to streamline 
        refueling, overflight, and overnight procedures for U.S. drug 
        detection and monitoring assets.

   Mexico enhanced operational coordination with U.S. 
        interdiction forces, especially in the maritime arena.

   In coordination with the U.S., Mexico conducted an 
        aggressive pursuit of top trafficker Amado Carrillo Fuentes, 
        which ultimately drove him to plan to flee the country after 
        altering his appearance; he died after undergoing cosmetic 
        surgery.

   The Mexican Government approved the extradition of Mexican 
        citizens and has worked closely with U.S. law enforcement 
        authorities on extradition priorities.

   This year, the GOM has agreed to the extradition of four 
        Mexican nationals wanted on drug charges. Their surrender has 
        been postponed pending the completion of their appeals or 
        sentences for crimes committed in Mexico.

   Mexico and the United States have reached agreement on the 
        text of a protocol to our bilateral extradition treaty which 
        will permit sequential trials in the two countries in cases 
        where there are charges against an individual in each country. 
        It would clear the way for consecutive prosecutions where that 
        currently cannot occur.

   Mexico arrested a number of major drug traffickers, 
        including Juan Garcia Abrego, Jose Pereira Salas, Manuel 
        Rodriguez Lopez, Oscar Malherbe, Adan Amezcua and Jaime Arturo 
        Ladino.

Enhanced Multilateral Drug Control

    We are also seeking to enhance multilateral counterdrug cooperation 
throughout the region. Circumstances in the hemisphere increasingly 
lend themselves to a greater emphasis on multilateral initiatives. Our 
multilateral objective is to establish a counterdrug alliance for the 
hemisphere, which would have explicit counternarcotics goals, 
commitments, and responsibilities for nations in the region. As part of 
the Miami Summit follow-up, a hemispheric counternarcotics strategy was 
negotiated, which was centered around both the 1996 anti-drug strategy 
for the hemisphere established by the CICAD (the inter-American drug 
abuse control commission) of the OAS and the 1988 UN Convention Against 
Illicit Traffic in Narcotic Drugs and Psychotropic Substances. Specific 
actions have been taken to execute this strategy. Working through 
CICAD, more than 40 recommendations for implementing the principles of 
the strategy have been elaborated.

    The ONDCP report identifies further steps needed to implement such 
a hemispheric alliance. First of all, countries should develop national 
plans to reduce drug use, trafficking, and production, with methods for 
evaluating their own progress. In the report we recommend that CICAD 
should be charged with establishing a multilateral group to monitor 
progress in implementation of national plans and to promote 
opportunities for enhanced hemispheric cooperation. The United States 
will seek hemispheric support at the 1998 Summit of the Americas for 
implementing the steps necessary for establishing such a hemispheric 
counternarcotics alliance. Our efforts to improve multilateral drug 
control efforts will complement and reinforce our bilateral 
counternarcotics programs. The creation of a hemispheric 
counternarcotics alliance will also strengthen our own national efforts 
to control drug production, shipment, and consumption.

Increasing Bilateral Cooperation

    The U.S. is moving methodically to consolidate advances in 
bilateral counternarcotics cooperation with Mexico across a broad 
front, including law enforcement and intelligence cooperation, 
training, information sharing, and extradition. Progress in these areas 
will occur at different rates, as some pose greater sensitivities for 
the Government of Mexico and some Mexican institutions are able to 
accommodate change faster than others. Our objective is to make 
consistent broad progress in as many areas as possible.

    Mexican accomplishments collectively illustrate the improvements in 
our bilateral anti-narcotics cooperation. One key to further progress 
lies in the continued development of Mexican judicial and law 
enforcement institutions. Reflecting the acknowledged importance of 
counternarcotics progress, there is continued aggressive engagement 
with the drug issue by the senior leaders if the Mexican Government. 
They recognize that counternarcotics and anti-corruption reforms are 
critical not only to U.S.-Mexican relations, but to Mexico's national 
security and public safety, and to developing greater confidence by the 
Mexican people in governmental institutions.

The Problem of Corruption

    While the Zedillo Administration is committed to taking aggressive 
action against drug trafficking, it acknowledges that Mexico's justice 
and public security institutions remain seriously flawed; police and 
military forces lack the tools and training needed to counter 
decisively the major criminal organizations operating in Mexico. They 
also lack the pay scales, job security, strong public support and other 
incentives to resist intimidation and bribes by the criminal 
organizations. The Government of Mexico is taking the first steps 
needed to enhance the capabilities and security of its personnel, to 
establish checks and balances within the system, and to combat 
entrenched corruption. In a September 10 speech before the Chamber of 
Deputies, Mexican Attorney Madrazo said:

          ``. . . the people's most serious concern is public security. 
        The citizens feel impotent against crime and perceive the 
        authorities as inefficient to combat it. The public is equally 
        afraid of criminals and the police.''

    Corruption cannot be reined in instantaneously or even in the short 
term. The Zedillo Administration has demonstrated the political will 
and initiated the actions to begin the long process of change through 
institutional transformation. For example, the Government of Mexico is 
now using new counter-drug units to attack major trafficking 
organizations. These units include the Organized Crime Unit under the 
Attorney General, and the military Air-mobile Special Forces units. 
These units have been carefully vetted and increasingly well trained, 
paid and equipped. The U.S. has provided extensive training and 
substantial material assistance to these units. They are manned by 
Mexican officers we trust and with whom we can cooperate, share 
sensitive information, and from whom we can receive dependable 
information and assistance.

    Still the building of reliable institutions is still at a very 
early stage. The specialized units to which I referred, particularly 
those under the Attorney General, are brand new and have only recently 
begun operations. A much larger task will-be the establishment of the 
new Office of the Special Prosecutor for Crimes Against Health, to 
replace the now dismantled anti-narcotics institute which was 
dismantled following the arrest of Gen. Gutierrez Robollo in February. 
The Government of Mexico has plans for the recruitment, vetting and 
training of this new force, but its establishment as an effective force 
will be a long-term effort.

Other Problem Areas

    In other areas, our cooperation is improving less rapidly than we 
would like. Certain law enforcement cooperation is still hampered by 
residual mistrust of national motives and understandable political 
sensitivity to cross-border operations. Extraditions of Mexican 
nationals remain painfully slow and not in step with comparable U.S. 
extraditions to Mexico. However, cooperation on extradition should 
improve. For example, we have negotiated a protocol to our bilateral 
extradition treaty which would allow temporary surrender of suspects 
for trial in one country while charges are pending in the other. We 
expect that the numbers of persons extradited and deported to the 
United States will continue to rise slowly. It is important to note 
that the Government of Mexico has agreed that narcotics offenses are 
among those for which it is prepared to extradite its citizens to the 
United States. As Foreign Secretary Gurria told a number of members of 
Congress during a meeting with them last week, in discussing the 
problem of extradition for serious crimes, ``in considering the 
requests by the U.S. for extradition, we focused not on the nationality 
of the individual but on the seriousness of the crime.''

HLCG Meeting (October 22-23)

    We had an opportunity last week to review with the Mexican 
authorities both the problems and the accomplishments in our common 
effort against narcotics use and trafficking, in a regular meeting of 
our Cabinet-level body which oversees these matters, the so-called High 
Level Contact Group for Drug Control. This group, under the 
chairmanship of General McCaffrey on the U.S. side and of Foreign 
Secretary Gurria and Attorney General Madrazo on the Mexican side, is 
responsible for setting the overall direction of our counternarcotics 
efforts, and for monitoring our performance. We talked about many of 
the things that I mention in this statement. In particular, we talked 
about progress in developing a common strategy to meet the narcotics 
threat to our two countries, an effort which is well along. Overall, I 
was impressed over the course of a day and one-half of intense 
discussions with the seriousness of purpose of both governments in 
trying to make progress against narcotics smuggling, and with the 
pragmatic approach adopted by participants on both sides. No one at 
these meetings underestimated the magnitude and difficulty of the task 
which confronts our two governments. No one expected to see immediate, 
or even rapid, progress. I think this kind of hard-headed attitude is 
exactly what is needed. And I believe that these regular meetings of 
the High Level Contact Group are essential to keeping both our 
governments working at peak efficiency. We use these meetings both to 
identify and resolve differences and to keep our bureaucracies driving 
forward.

Counternarcotics in Context

    Our bilateral relationship has shown a better sense of common 
purpose and pragmatic cooperation under President Zedillo than at any 
time in recent memory. Our objective is to continue the long process of 
developing a qualitatively different bilateral relationship with Mexico 
in which mutuality of interests and the health of the overall 
relationship are strong enough to weather the inevitable ups and downs 
of individual issues. Improvements in the broader nature of the 
relationship will in turn help us in pursuing cooperation on specific 
issue areas, such as counternarcotics. Changing the fundamental 
assumptions underlying the relationship will require great sensitivity, 
however, as the Mexican Government sometimes finds it politically 
difficult to reorient toward greater cooperation with the U.S. We are 
thus engaged in a long-term enterprise in which patience and steadiness 
of purpose will pay us dividends in the end.

President Zedillo's Visit

    As was noted at the outset, just two weeks after these hearings 
President Zedillo will make an official visit to Washington. 
Counternarcotics will be high on the agenda for his discussions with 
the President, as befits an issue of great importance on both sides of 
the border. The Mexican Government is also very aware of the vital role 
our Congress plays in bilateral relations. President Zedillo will 
therefore seek an opportunity to meet with Congressional leaders and 
committee chairmen in areas of bilateral interest. Among the many 
issues making up the complex mosaic of the U.S.-Mexico relationship, 
counternarcotics cooperation would certainly be prominent in the 
discussion at any such meeting.

    Senator Coverdell. I appreciate the comments, Mr. 
Ambassador, and appreciate your trying to facilitate the time 
as well. I would now turn to Deputy Administrator, DEA, Mr. 
Milford.

       STATEMENT OF JAMES S. MILFORD, JR., ACTING DEPUTY 
ADMINISTRATOR, DRUG ENFORCEMENT ADMINISTRATION, U.S. DEPARTMENT 
                          OF JUSTICE.

    Mr. Milford. Mr. Chairman, again, I would ask that my full 
statement be included in the recorded.
    Senator Coverdell. Certainly.
    Mr. Milford. And I will discuss a short statement. Mr. 
Chairman, you and the members of the committee are well aware 
that within the past several months--years, major trafficking 
organizations from Mexico have emerged as major players in the 
international drug trade and have become almost as powerful as 
the traffickers from Medellin and Cali.
    Do--drug traffickers, or drug trafficking organizations 
from Colombia and Mexico, are popularly referred to as cartels, 
a phrase which is inaccurate and misleading because it implies 
that cartel leaders are a legitimate businessmen.
    In truth, drug trafficking organizations operating today 
from headquarters in Cali, Guadalajara, Tijuana, Juarez, 
Sonora, and the Gulf Coast are international organized crime 
syndicates which control the cocaine trade by growing portions 
of the heroin trade and the vast majority of the 
methamphetamines trade entering the United States.
    DEA considers the traffickers from Mexico, because of their 
involvement in poly drug activity, their proclivity for extreme 
violence, and their geographic proximity to the United States, 
to be a more distinct and eminent danger to the United States 
than the Colombian organizations.
    The leaders of Mexico's international organized crime drug 
trafficking syndicates are well known to U.S. law enforcement, 
and many of them are--are charged in numerous indictments in 
the U.S. Only two major trafficking figures no longer operating 
there--are operating their lucrative businesses.
    One, Garcia Abrego, who held dual citizenship, was turned 
over to the United States for prosecution in 1996, and is 
currently serving 11 life term sentences. However, the Amado 
Carrillo--and also, Amado Carrillo Fuentes, who died after 
having plastic surgery in the hospital in Mexico City. However, 
the Amado Carrillo organization is functioning as a major 
trafficking organization despite its leader's death.
    One of the most notorious traffickers in Mexico, Ramon 
Eduardo Arellano-Felix, considered the most violent brother of 
the Arellano-Felix organization, is based in Tijuana. On 
September 11, 1997, he was added to the FBI's Ten Most Wanted 
List and has--and a provisional arrest warrant has been sent to 
Mexico for his arrest.
    Ramon was indicted in San Diego, California, on charges 
relating to importation of cocaine and marijuana. A joint task 
force comprised of DEA, FBI, and California State and local 
authorities, is continuing in its investigation into the 
Arellano-Felix organization, including his brother, Benjamin--
for cocaine trafficking, of course.
    Our goal is to investigate and prosecute the entire 
Arellano-Felix organization as a continuing enterprise--
continuing criminal enterprise. The violence associated with 
the international drug trafficking syndicates today does not 
take place only in Mexico. Unfortunately, it is also on the 
streets of San Diego and El Paso, Texas, which have been 
besieged by these trafficking activities.
    With the death of Amado Carrillo Fuentes this July, rivals 
and associates of his organizations engaged in a campaign of 
violence which transformed Juarez, Mexico and El Paso, Texas, 
into battle zones. More than 18 people were killed in a bid for 
control over his organization. For the time being, that wave of 
violence has abated.
    One of the major areas--one area of major concern over the 
past several months has been the increase in the number of 
threats, brazen assaults, and murders against Mexican law 
enforcement officials and sources of information, and also the 
press.
    Threats have also been received against U.S. law 
enforcement officials and prosecutors. Traffickers from Mexico 
have assumed a major role in drug trafficking operations within 
the United States, not only dominating the wholesale trade in 
the West and Midwest, but now have moved in traditional 
locations such as Queens, New York, and the Northeast, which 
was traditionally held by Colombian traffickers.
    Our operations, the DEA and FBI operations Limelight and 
Reciprocity clearly demonstrated the expansion of these Mexican 
syndicates into lucrative East Coast markets. The problem of 
drug trafficking from Mexico is a complex issue, and must be 
addressed on both sides of the border. Because of this, 
international drug trafficking organizations does not--do not 
respect national borders.
    An essential element of our strategy is working closely 
with the government of Mexico and its enforcement organizations 
to identify, target, locate, arrest, and prosecute these major 
criminals.
    We have launched over the past several years an initiative 
called the Southwest Border Initiative, which is designated to 
dismantle the sophisticated organizations, and we are working 
today to improve that effort. Operation Reciprocity and 
Operation Limelight, which was part of our Southwest Border 
Initiative, highlighted the importance of law enforcement's 
ability to successfully target this communications effort.
    As a result of this effort, 11.5 metric tons of cocaine, 
over $18 million in currency, and almost 14,000 pounds of 
marijuana were seized, and I must include there was also 101 
defendants that were also arrested.
    In closing, I would like to say that we continue our 
efforts. We have, as you have heard today, many efforts with 
the vetting process, with working with the different units that 
have been put in place within Mexico. We are in the process 
stage at this point.
    We have several people, and we have said all along that 
we--that what--that the only thing that U.S. law enforcement 
wants is the ability to work with Mexican officials. We have 
several officials today, as a result of these activities and as 
a result of these talks, that we are working with. We are 
passing information, and we are hopeful that this will lead to 
some success. Thank you.
    [The prepared statement of Mr. Milford follows:]

                 Prepared Statement of James S. Milford

    Mr. Chairman and Members of the Committee: Thank you for the 
invitation to testify before your Committee and the Caucus this 
afternoon, on the subject of anti-narcotics cooperation with the 
Government of Mexico. As you are well aware, traffickers from Mexico 
pose a significant threat to the United States, as well as to the 
citizens of Mexico. Within the past several years, major trafficking 
organizations from Mexico have emerged as major players in the 
international drug trade, and have become almost as powerful as the 
cocaine traffickers from the Medellin and Cali drug organizations were 
at the pinnacle of their careers.
    In order to appreciate the nature and scope of the drug trafficking 
activities in Mexico, it is necessary to look at the historic role of 
traffickers from Mexico and assess their role in today's global drug 
trafficking enterprise.
    Drug trafficking organizations from Colombia and Mexico are 
popularly referred to as ``cartels'', a phrase which is inaccurate and 
misleading because it implies that cartel leaders are legitimate 
businessmen. In truth, the drug trafficking organizations operating 
today, from headquarters in Cali, Guadalajara, Tijuana, Juarez, Sonora 
or the Gulf Coast are international organized crime syndicates which 
control the cocaine trade, a growing portion of the heroin trade, and 
the vast majority of the methamphetamine and marijuana trades which 
impact the United States. The leaders of these organizations conduct 
their sophisticated businesses with the assistance of thousands of 
employees, high grade weapons, state of the art communications 
equipment and almost unlimited sources of income to bribe and 
intimidate those who might challenge their operations.
    Unlike the leaders of organized crime who, during the past decades, 
resided in the United States and conducted their business within our 
national borders, these drug traffickers oversee a huge network of 
employees and resources from thousands of miles away. It is therefore 
necessary for the U.S. Government to work cooperatively with the 
Governments of Colombia and Mexico, as well as many other governments 
around the world, to identify, target, arrest, prosecute, convict and 
incarcerate these international organized crime leaders.
    During 1995 and 1996, the brave men and women of the Colombian 
National Police, under the leadership of General Rosso Serrano, 
successfully pursued and arrested many leaders of the Cali mafia. 
Today, the top leadership of the Cali syndicate is in prison after 
surrender or arrest, and others--are dead. With the incarceration of 
the major Cali traffickers, criminals from Mexico began gaining 
prominence in the cocaine trade.
    Traffickers from Mexico have traditionally been involved in 
smuggling cocaine, heroin, methamphetamine and marijuana into the 
United States, but in many cases, they served as the transportation arm 
of the Colombian organizations. During the late 1980's, the Cali group 
worked closely with traffickers from Mexico to transport cocaine using 
727 aircraft and landing areas in Mexican territory. The aircraft also 
returned bulk cash payments to Colombia after they were smuggled into 
Mexico.
    In the early 1990's, traffickers from Mexico began receiving 
payment for their transportation services in the form of cocaine. They 
then expanded their already well-established distribution networks in 
the United States to distribute the cocaine, effectively increasing 
their profit margin by 300% per shipment. Today, the majority of the 
cocaine entering the United States comes from Colombia through Mexico 
and across U.S. border points of entry. There is evidence that 
traffickers in Mexico have gone directly to the sources of cocaine base 
in Bolivia and Peru in order to circumvent Colombian middlemen. 
Additionally, traffickers from Mexico are the primary source of 
methamphetamine in California, the Southwest and increasingly the 
Southeast regions of the United States, and recent DEA statistics 
indicate that 20% of the heroin seizures made in the United States in 
1996 were of Mexican origin. Two recent DEA operations also indicated 
that traffickers from Mexico have now become direct distributors of 
cocaine in New York, a role which had been dominated by traffickers 
from Colombia and the Dominican Republic.
    DEA considers the traffickers from Mexico, because of their 
involvement in poly drug smuggling, their proclivity for extreme 
violence and their geographic proximity to the United States, to be a 
more distinct and eminent danger to the U.S. than the Colombian 
organizations.

                     Major Traffickers from Mexico

    The leaders of Mexico's international organized crime drug 
trafficking syndicates are well known to U.S. law enforcement, and many 
of them are charged in numerous indictments in the U.S. Only two major 
drug trafficking figures are no longer operating their lucrative 
businesses: Juan Garcia Abrego, who held dual citizenship, was turned 
over to the United States for prosecution in 1996 and is currently 
serving 11 life terms after his conviction in Houston; and Amado 
Carrillo-Fuentes, who died after plastic surgery in a Mexican hospital 
this past July. However, the Amado Carrillo-Fuentes Organization (ACF) 
is still functioning as a major trafficking group, despite its leader's 
death.

    The Amado Carrillo-Fuentes Organization: Carrillo-Fuentes was known 
as the ``Lord of the Skies'' because of his renown in transporting 
plane loads of cocaine for Colombian traffickers. Before his death, 
Amado Carrillo-Fuentes had extensive ties to the former Commissioner of 
the INCD, the National Institute to Combat Drugs, General Gutierrez-
Rebollo, and he was reported to have shipped $20-30 million to Colombia 
for each major operation. Amado Carrillo-Fuentes' organization is based 
in Juarez, and is associated with the Cali Rodriguez-Orejuela 
organization and the Ochoa brothers of Medellin. In addition to cocaine 
smuggling, the ACF organization is responsible for heroin and marijuana 
trafficking, and has bases in Guadalajara, Hermosillo and Torreon where 
drugs are stored before shipment to the United States.
    Amado's brother Vicente has been indicted in the Northern District 
of Texas for cocaine violations and a warrant was issued for his arrest 
in late 1993. At the time of his death, Amado Carrillo-Fuentes was 
charged in numerous U.S. indictments in Florida and Texas, and was a 
fugitive on heroin and cocaine charges. An associate in the ACF 
organization, Oscar Malherbe, once a lieutenant for Juan Garcia-Abrego, 
was responsible for the shipment of 2,000 kilograms of cocaine from 
Colombia to Mexico each week. He was arrested on February 27, 1997, on 
drug trafficking and weapons charges and a provisional arrest warrant 
has been forwarded by the U.S. to Mexico. Formal extradition documents 
were presented in late April. The Mexican Foreign Ministry has declared 
him extraditable but, according to the Mexican Government, extradition 
will be deferred until the conclusion of Mexican legal proceedings and 
any subsequent sentence imposed by the Mexican Government.
    While the full impact of Amado Carrillo-Fuentes' death has not been 
totally assessed. it is clear that a power struggle ensued this summer 
as rivals and associates sorted out business arrangements and turf. It 
is also clear, however, that after the arrest of General Gutierrez-
Rebollo in March, Amado Carrillo-Fuentes had been feeling pressure from 
law enforcement in the U.S. and Mexico, and he had made efforts to 
disguise his appearance and relocate some of his operations to Chile.

    The Caro-Quintero Organization: This group is based in Sonora, 
Mexico and is involved in cocaine and methamphetamine smuggling, and 
marijuana production and trafficking. It is headed by Miguel Caro-
Quintero, whose brother, Rafael, is in jail in Mexico for his role in 
the 1985 killing of DEA Special Agent Enrique Camarena.
    After receiving bribes, a Federal judge in Hermosillo, Mexico 
dismissed charges against Miguel Caro-Quintero in 1992, and since that 
time, he has operated freely within Mexico. He is the subject of 
numerous U.S. indictments and is currently also the subject of our 
provisional arrest warrant in Mexico issued in the United States. A 
request for the extradition of Miguel and Rafael Caro-Quintero was 
forwarded to the Government of Mexico by the U.S.

    The Arellano-Felix Organization: Based in Tijuana, this 
organization is one of the most powerful, violent and aggressive 
trafficking groups in the world. The Arellano-Felix Organization (AFO) 
has high level contacts within the Mexican law enforcement and judicial 
systems and is directly involved in street level trafficking within the 
United States. According to extradition documents submitted by the 
Government of Mexico in San Diego, members of the AFO reportedly 
dispense an estimated $ 1 million weekly in bribes to Mexican federal, 
state and local officials to ensure they will not interfere with the 
group's drug trafficking activities.
    The Arellano family, composed of seven brothers and four sisters, 
inherited the organization from Miguel Angel Felix-Gallardo upon his 
incarceration in Mexico in 1989 for his complicity in the murder of DEA 
Special Agent Enrique Camarena. Alberto Benjamin Arellano-Felix has 
assumed leadership of the family enterprise and provides a 
businessman's approach to the management of their drug empire.
    AFO maintains well-armed and well-trained security forces, 
described by Mexican enforcement officials as paramilitary in nature, 
which include international mercenaries as advisors, trainers and 
members. Ramon Arellano-Felix's responsibilities consist of the 
planning of murders of rival drug leaders and those Mexican law 
enforcement officials not on their payroll. Also targeted for 
assassination are those AFO members who fall out of favor with the AFO 
leadership or simply are suspected of collaborating with law 
enforcement officials. Enforcers are often hired from violent street 
gangs in cities and towns in both Mexico and the United States in the 
belief that these gang members are expendable. They are dispatched to 
assassinate targeted individuals and to send a clear message to those 
who attempt to utilize the Mexicali/Tijuana corridor without paying the 
area transit tax demanded by the AFO trafficking domain.
    The AFO also maintains complex communications centers in several 
major cities in Mexico to conduct electronic surveillance and counter-
surveillance measures against law enforcement entities. The 
organization employs radio scanners and equipment capable of 
intercepting both hard line and cellular phones to ensure the security 
of AFO operations. In addition to technical equipment, the AFO 
maintains caches of sophisticated automatic weaponry secured from a 
variety of international sources.
    Ramon Eduardo Arellano-Felix, considered the most violent brother, 
organizes and coordinates protection details over which he exerts 
absolute control. On September 11, 1997, he was added to the FBI's IO 
Most Wanted List. Ramon was indicted in San Diego, California, on 
charges relating to importation and conspiracy to import cocaine and 
marijuana. A Joint Task Force, composed of the Drug Enforcement 
Administration, the Federal Bureau of Investigation in San Diego, 
California, and state and local officers, is continuing its 
investigation into the Arellano-Felix Organization, including Benjamin 
Arellano-Felix, Chairman of the Board, for cocaine trafficking. Our 
goal is to investigate and prosecute the entire Arellano-Felix 
Organization as a continuing criminal enterprise that has sent multiple 
tons of cocaine from Mexico into the United States in this decade.

    The Amezcua Organization: The Amezcua-Contreras brothers, operating 
out of Guadalajara, Mexico, head up a methamphetamine production and 
trafficking organization of global proportions. Directed by Jesus 
Amezcua, and supported by his brothers, Adan and Luis, the Amezcua drug 
trafficking organization today is probably the world's largest smuggler 
of ephedrine and clandestine producer of methamphetamine. With a 
growing methamphetamine abuse problem in the United States, this 
organization's activities impact on a number of the major population 
centers in the U.S. The Amezcua organization obtains large quantities 
of the precursor ephedrine, utilizing contacts in Thailand and India, 
which they supply to methamphetamine labs in Mexico and the United 
States. This organization has placed trusted associates in the United 
States to move ephedrine to Mexican methamphetamine traffickers 
operating in the U.S. Jose Osorio-Cabrera, a fugitive from a Los 
Angeles investigation until his arrest in Bangkok, was a major 
ephedrine purchaser for the Amezcua organization.

    Joaquin Guzman-Loera: Although his brother, Arturo Guzman-Loera, 
has now assumed the leadership role, Joaquin Guzman-Loera began to make 
a name for himself as a trafficker and air logistics expert for the 
powerful Miguel Felix-Gallardo organization. Guzman-Loera broke away 
from Felix-Gallardo and rose to patron level among the major Mexican 
trafficking organizations. Presently, he is incarcerated in Mexico; 
however, Mexican and United States authorities still consider him to be 
a major international drug trafficker. The organization has not been 
dismantled or seriously affected by Guzman-Loera's imprisonment because 
this organization continues to transport cocaine from Colombia through 
Mexico to the United States for the Medellin and Cali organizations and 
is also involved in the movement, storage, and distribution of 
marijuana, as well as Mexican and Southeast Asian heroin. This 
organization controlled the drug smuggling tunnel between Agua Prieta, 
Sonora, Mexico and Douglas, Arizona through which tons of cocaine were 
smuggled.
    Guzman-Loera, who has been named in several U.S. indictments, was 
arrested on June 9, 1993 in Talisman, Mexico for narcotics, homicide, 
and cocaine trafficking and is presently incarcerated at the Puente 
Grande Prison, Jalisco, Mexico.

        Impact of Mexican Drug Traffickers on the United States

    The violence associated with the international drug trafficking 
syndicates does not take place only in Mexico; unfortunately, cities 
like San Diego, California and Eagle Pass, Texas have been besieged by 
the actions of drug trafficking organizations smuggling drugs into the 
U.S. from Mexico, and many Americans have been victimized by the 
violence and crime attendant to the drug trade.
    With the death of Amado Carrillo-Fuentes this past July, rivals and 
associates of the AFO engaged in a campaign of violence which 
transformed Juarez, Mexico and El Paso, Texas into battle zones. More 
than 18 people were killed in a bid for control over the Carrillo-
Fuentes organization. For the time being, that wave of violence has 
abated and the power struggle may have been sorted out.
    One area of major concern over the past several months has been an 
increase in the number of threats and brazen assaults and murders 
against Mexican law enforcement officials and sources of information. 
Threats have also been received against U.S. law enforcement officials 
and prosecutors. A number of Mexican journalists have been targets of 
violence, or had their lives, threatened, possibly as part of an effort 
on the part of drug traffickers to silence attempts by the media to 
shed light on their heinous actions.
    Traffickers from Mexico have assumed a major role in drug 
trafficking operations within the United States, not only dominating 
the wholesale cocaine trade in the West and Midwest, but also have 
become significant traffickers operating in major east coast cities. 
Two recent DEA Operations, Limelight and Reciprocity, which I will 
discuss later, clearly demonstrated the expansion of Mexican syndicates 
into lucrative east coast markets.
    The problem of drug trafficking from Mexico is a complex issue, and 
must be addressed on both sides of the U.S.-Mexican Border. Because 
international drug trafficking organizations do not recognize or 
respect national borders, and because they conduct their business from 
headquarters in Mexico, while their employees and surrogates wreak 
havoc in U.S. cities and towns across the nation, it is essential that 
activities on both sides of the border be targeted with aggressive and 
co-equal strategies.

                    The Southwest Border Initiative

    An essential element of the strategy is working closely with the 
Government of Mexico and its law enforcement organizations to identify, 
target, locate, arrest and prosecute those major international 
organized crime figures responsible for drug trafficking and violence 
within the U.S. and Mexico. DEA and the FBI have launched the Southwest 
Border Initiative (SWBI), designed to dismantle the sophisticated 
leadership of these criminal groups from Mexico by targeting their 
command and control functions and building cases on the surrogate 
members and their U.S.-based infrastructure. The SWBI is anchored in 
our belief that the only way to successfully attack any organized crime 
syndicate is to build strong cases on the leadership by attacking their 
command and control functions. With the assistance of foreign 
governments, the long-term incarceration of the leadership will leave 
entire organizations in disarray. The effectiveness of this strategy is 
hampered only by the difficulty of incarcerating the leadership of 
these trafficking empires who hide in foreign safe havens like Colombia 
and Mexico.
    This strategy now combines the resources of the DEA, the Federal 
Bureau of Investigation (FBI), the Department of Justice Criminal 
Division, the United States Attorneys' Offices, The High Intensity Drug 
Trafficking Area Program (HIDTA), the United States Customs Service 
(USCS), and a host of state and local counterparts. Through this 
initiative, we have been able to harness the investigative, 
intelligence and operational functions of all of the members and 
coordinate joint investigations against the major drug trafficking 
organizations. The investigations stemming from the Southwest Border 
Strategy are not confined to the border region of the U.S., they target 
trafficking organizations which affect the whole country. Most of the 
major international cases, such as those which were part of Operations 
Limelight and Reciprocity, begin with cases first made on U.S. soil.
    Operation Reciprocity and Operation Limelight, which were part of 
the Southwest Border Initiative, demonstrated the importance of law 
enforcement's ability to successfully target the communications of the 
upper echelon of international criminal organizations. These operations 
targeted U.S.-based cells of the Amado Carrillo-Fuentes organization 
and resulted in the seizure of 11.5 metric tons of cocaine, over $18 
million in U.S. currency, almost 14,000 pounds of marijuana and the 
arrest of 101 defendants. The operations, which began with seizures in 
the United States, took apart drug trafficking organizations that were 
expanding their reach from Mexico across the border into the United 
States, as far into the country as the New York City region.
    We started Operation Reciprocity, nearly a year ago, in October 
1996, by identifying the command elements of the Amado Carrillo-Fuentes 
organization dealing drugs in New York and Los Angeles. Working through 
the multi-agency and multi district investigative approach and 
attacking their communication systems, we identified how the 
traffickers transported cocaine across the country in tractor trailer 
loads, and returned the illicit profits to Mexico in the form of bulk 
cash in the same tractor trailers, using drivers hired largely from the 
Grand Rapids, Michigan area. Reciprocity resulted in 40 arrests, over 
$11 Million in cash, 7.4 tons of cocaine, and 2,700 pounds of 
marijuana.
    Operation Limelight began in August 1996, in Imperial County, 
California, and focused on the Alberto Beltran transportation and 
distribution cell of the Amado Carrillo-Fuentes organization. Again by 
targeting the command and control communications systems of this group, 
we identified cross-country smuggling routes that employed tractor 
trailers that hauled tons of cocaine to California, Texas, 
Pennsylvania, Illinois, and New York. Limelight resulted in the seizure 
of 4,012 kilograms of cocaine, 10,846 pounds of marijuana, over $7 
Million in cash, and the arrest of 48 persons.
    Operations Limelight and Reciprocity, like their predecessor 
operations Zorro I and II, demonstrated that law enforcement can strike 
major blows against these foreign drug syndicates only if we maintain 
the ability to target their command and control communications. These 
communications are critical to the efficient operation of their 
organizations and are, at the same, time their greatest vulnerability. 
This vulnerability will only continue as long as law enforcement has 
access to their communications. With sophisticated communication 
encryption equipment and software becoming available to these wealthy 
traffickers, our access to their key communications could be severely 
limited or completely eliminated in the near future if law enforcement 
is not given access to encryption decoding devices and means.

          Cooperation with Mexico on Counternarcotics Matters

    It is DEA's intention to remain actively engaged with law 
enforcement counterparts from Mexico in our mutual efforts to dismantle 
the violent international drug trafficking syndicates. However, because 
of a number of factors--frequent reorganizations and changes in 
counterpart agencies, as well as a lack of adequate training and 
security mechanisms--progress in full cooperation with counterparts 
from Mexico is slow.
    Since March of this year, however, some encouraging developments 
have taken place, indicating a willingness on the part of the 
Government of Mexico to improve their drug organizations, as well as 
their overall performance in investigating the organized crime 
syndicates in Mexico who exert absolute control over the flow of 
cocaine, methamphetamine, and heroin into the U.S. from Mexico.
    After the arrest of General Gutierrez-Rebollo in February, the 
Government of Mexico dismantled the National Institute for the Combat 
of Drugs [INCD]. The reconstitution of the anti-drug institutions in 
Mexico is an enormous task, and we are committed to assisting Attorney 
General Madrazo in the formation of a quality drug law enforcement 
team. We recognize the absolute necessity that professional counter-
drug units be established, if our two countries are to succeed against 
the drug lords in Mexico. In place of the INCD, the Government of 
Mexico established a new anti-drug unit, the Special Prosecutor's 
Office of Drug Crimes, the Fiscalia Especializado para Atencion Delitos 
contra La Salud, or FEADS. It was apparent that, in order to be 
effective, Mexican law enforcement organizations needed to be staffed 
with high-caliber, trustworthy individuals who are deeply committed to 
drug control efforts. FEADS is responsible for drug law enforcement 
under the office of the Mexican Attorney General, Procuraduria General 
de la Republica, or PGR, and is headed by Commissioner Mariano Herran-
Salvetti, an attorney. Attorney General Madrazo and Commissioner Herran 
have instituted a program of selecting and ``vetting'' employees 
involved in counterdrug activities. The Mexican vetting process 
involves a psychological assessment, financial background checks, 
urinalysis, and polygraphs. DEA and the FBI have also worked with the 
Government of Mexico, at the Mexican request, to help train individuals 
who are further vetted, and who will work on more sensitive law 
enforcement projects.
    FEADS currently employs approximately 870 agents, of which 200 are 
``vetted'' by the Mexican Government, and a portion of those have been 
vetted further. Plans call for a total of 2,000 fully Mexican-vetted 
employees and both the DEA and FBI are committed to assisting the 
Government of Mexico reach that goal.
    Under the auspices of FEADS are two specialized units, including 
the Organized Crime Unit (OCU), and the bilateral Border Task Forces 
(BTF's). Both specialized units report to Dr. Samuel Gonzalez-Ruiz, who 
is also an attorney. These units, in which Americans and Mexicans work 
in conjunction, are charged with the responsibility of gathering 
intelligence and building cases against the most significant drug 
traffickers in Mexico. Both organizations are comprised of cleared and 
U.S.-vetted employees, although neither is fully staffed yet.
    The Bilateral Task Forces, which were originally established in 
Tijuana, Juarez, and Monterrey, were conceived on a framework of 
frequent and continued interaction between the United States and 
Mexican law enforcement officers at the operational level and a free 
flow of information. The goal was to ultimately create a unit in each 
city which could coordinate the joint resources of Mexico and the 
United States against syndicate leaders. Unfortunately, the BTF's have 
never reached their full potential as DEA, FBI, and Customs have had to 
adopt a less effective operational strategy.
    Because of the inexperience of the new BTF staff and inadequate 
funding, they have not initiated investigations against the major 
traffickers in Mexico. The only way these BTF's can become truly 
effective is with law enforcement from both countries working side-by-
side on both sides of the U.S./Mexican border to build substantive, 
prosecutable cases against syndicate leaders. The success of the BTF's 
is vital as we seek to stem the violence and corruption attendant to 
the drug trade in Mexico from spilling across the border into our 
cities and towns.

                               Conclusion

    DEA remains committed to our primary goal of targeting and 
arresting the most significant drug traffickers operating in the world 
today. In order to meet this goal, it is essential that we have 
trustworthy and competent agencies in Mexico working side-by-side with 
us. We will continue to assist the Government of Mexico as they work to 
improve their law enforcement capabilities. We believe that progress 
will not occur overnight, and substantial time is necessary for real 
improvements in Mexico's law enforcement organizations to bear fruit. 
The ultimate test of success will be if the Arellano-Felix brothers, 
the Amezcuas, and the leaders of the other Mexican drug syndicates are 
brought to justice in either Mexico or the United States and sentenced 
to prison terms commensurate with their crimes against society.
    Thank you for your invitation to appear today before the Committee, 
and I will be happy to answer any questions you might have for me.

    Senator Coverdell. Thank you, Mr. Milford. Director Banks, 
let us turn to you if we might. Welcome.

STATEMENT OF SAMUEL H. BANKS, ACTING COMMISSIONER, U.S. CUSTOMS 
                SERVICE, DEPARTMENT OF TREASURY

    Mr. Banks. Thank you, Mr. Chairman. It is a pleasure to be 
here. If I could submit my testimony in the record, I will 
abbreviate my statement.
    Senator Coverdell. We appreciate it, thank you.
    Mr. Banks. As the primary border drug interdiction agency, 
we had our second banner year this last year. Last year, we 
seized over one----
    Senator Coverdell. You need to pull your mic just a little 
closer to you.
    Mr. Banks. Last year, we seized over one million pounds of 
narcotics nationally coming into the United States. On the 
Southwest border specifically, it was 630,000 pounds of 
narcotics including cocaine, marijuana, heroin.
    I am not trying to claim success. I am not trying to say 
that is the answer or that we have solved this problem. We have 
a long ways to go. We have a lot more to do.
    As far as cooperative efforts with Mexico, we have a number 
of points of convergence. One, we have an attache office in 
Mexico City. We have three other offices in Mexico. You heard 
about those money laundering laws being passed. We are working 
hand and glove with the Mexicans to try to work money 
laundering cases to put those laws into actuality, to make them 
actually happen in the street.
    Another thing--and I think where it really makes the 
difference and General McCaffrey talked about it--is the border 
liaison mechanism and the local contacts that we have at the 
actual borders. The cooperative efforts locally are probably 
better than they have ever been to try to resolve disputes, to 
try to handle some of the more dangerous border safety issues 
that we have, and to at least achieve a certain level of 
cooperation.
    We have done extensive training with Mexican officials on 
everything from trying to bring their industry into the battle 
on narcotics to try to do money laundering training to try to 
help them in terms of their container inspection and truck 
inspection efforts.
    In the air interdiction area, we have actually been working 
with Mexico since 1991. We have two Citation aircraft, jet 
aircraft, stationed in Mexico. We have 11 air crew and support 
personnel down there on a rotating basis. In addition to that, 
we provide Customs Citation support on a 24-hour basis at our 
air units along the Southwest border, and again, it is to try 
to support the government of Mexico's ability to acquire, 
track, and apprehend these aircraft targets.
    We have also trained over 180 Mexican officers in air 
interdiction training. We have made a little bit of progress 
recently in terms of ability for overflight, and ability for 
refueling, on a case-by-case basis.
    I will say that in our cooperative efforts with Mexico, we 
are aware every day corruption is an issue. Even the Mexican 
Government has more than highlighted this as a particular 
problem. We take it into consideration every time we sit down 
with them and try to work in an enforcement environment or to 
share information.
    I want to say one thing about some progress I think that 
the Mexicans have made. The Mexican customs service really does 
not do narcotics per se. They do revenue, they do inspections 
on commercial goods. But even in that venue, the Mexicans have 
tried to build technology systems to eliminate or at least to 
minimize the amount of corruption that can occur.
    They put in place a red light/green light system for trucks 
going in. It is no longer a human decision. They have built in 
a number of other systems. They do not have their officers 
collecting money. The money gets collected through the banking 
systems. They use industry people to actually do most of the 
classification/evaluation work. They are making really strong 
efforts in order to try to at least address this corruption 
issue.
    That does not mean that we do not need to do a lot more 
work. I would say to you that we are still looking for 
additional cooperation. We still think we need greater 
cooperation and open communication in terms of some of the air 
interdiction programs. And Mexico, I think, has been very 
willing to listen and to work with us on that.
    We hope to send our officers into Mexico's airports and 
seaports to work with their industry to try to build security 
programs, and to try to build better information systems, so 
that we can have information on which to target of all of those 
3.5 million trucks that cross that border.
    And regarding the ocean-going containers that come out of 
Mexican ports, we certainly would like to, again, be 
participating in the border task forces because one thing that 
we need operating on that border is actionable intelligence. 
That is probably the biggest gap that we have, and obviously we 
will want to continue to work with the Mexican authorities on 
border safety because border violence is a major issue that we 
are all contending with.
    And with that, I express my appreciation to you, sir.
    [The prepared statement of Mr. Banks follows:]

                 Prepared Statement of Samuel H. Banks

    Chairmen and Members of the Committee and Caucus, it is a pleasure 
to testify here today with several colleagues from other federal 
agencies involved in U.S. drug control efforts. My testimony today will 
focus on the smuggling threat, our cooperation with the Government of 
Mexico, and issues that hamper our cooperative efforts with Mexico.
    As the primary border interdiction agency, the U.S. Customs Service 
faces a diverse, complex and multifaceted drug threat. For example, in 
FY 1997 over 5 million containers crossed our land borders and over 4 
million containers arrived by sea. Of this total, over 4 million 
originated in high-risk countries. This does not even take into account 
aircraft, non-commercial vessels, private vehicles, air passengers and 
pedestrians. The staggering number of conveyances, cargo and passengers 
arriving into the United States each year continues to present Customs 
with complex targeting and interdiction challenges that we are 
confronting through a variety of intelligence, investigative and 
operational approaches.

                          The Smuggling Threat

    Our intelligence and operations indicate that a variety of illicit 
drugs, including cocaine, heroin, marijuana, and methamphetamine, are 
smuggled into the United States from Mexico. Also some of these drugs, 
such as marijuana and heroin, are produced in Mexico, others, such as 
cocaine, originate in other countries and are then shipped through 
Mexico into the United States.
    The U.S. Customs Service has addressed the ever-changing and 
constant threat that narcotics smugglers from Mexico and elsewhere 
impose on our nation by wedding technology and diversified narcotics 
examination procedures within the air, land and sea ports of entry to 
adversely impact narcotics smuggling organizations. This is coupled 
with both reactive and proactive investigative activity aimed at 
significantly disrupting drug smuggling organizations' command and 
control centers and money laundering systems.
    Since the inception of U.S. Customs layered enforcement 
examinations in both the passenger and commercial cargo environment, 
Customs has had a dramatic effect on smuggling organizations. Along the 
Southwest Border, the total amount of cocaine, marijuana, and heroin 
seized in Fiscal Year 1997 surpassed 630,000 pounds, a 9 percent 
increase over Fiscal Year 1996 seizure levels. Additionally, in the 
Southwest Border Commercial Cargo Environment, Customs seizures of 
cocaine and marijuana increased for the fourth straight year. Customs 
made 61 cargo-related narcotics seizures, totaling over 42,000 pounds, 
a 7 percent increase over Fiscal Year 1996 levels.
    While we are proud of the success of our domestic counterdrug 
efforts--which range from enforcement initiatives such as Operation 
Hard Line to private sector cooperation through programs such as the 
Business Anti-Smuggling Coalition--the focus of my testimony today is 
on our cooperative efforts with Mexico.

                        Cooperation with Mexico

    Cooperative efforts with Mexico take place at all levels of 
government from the U.S.-Mexico High-Level Contact Group to individual 
agents and inspectors in the field.
The High-Level Contact Group
    The U.S.-Mexico High-Level Contact Group (HLCG) was formed 
approximately 18 months ago by President Clinton and Mexican President 
Zedillo to invigorate the U.S.-Mexico partnership in the battle against 
narcotics. The Treasury Department is represented at the HLCG by Under 
Secretary for Enforcement Raymond W. Kelly.
    The most recent meeting of the HLCG was held on October 23-24, 
1997, in Washington, D.C. The primary topic of this meeting was the 
preparation of the U.S.-Mexico Binational Drug Control Strategy, a 
follow-up to last year's Binational Threat Assessment. In addition to 
the strategy, meeting topics also included: demand reduction, chemical 
diversion, money laundering, interdiction, and criminal organizations. 
One of the developments at the meeting was Customs commitment to name a 
permanent representative to the Chemical Control Working Group, a 
subgroup of the HLCG.
U.S. Customs Cooperation with Mexico
    U.S. Customs has been a long-time proponent of international 
cooperative counterdrug efforts. Customs has maintained an attache at 
the Embassy in Mexico City for more than 30 years and signed a Customs 
Mutual Assistance Agreement with Mexico in 1976. We also have Customs 
representatives working in other major Mexican cities. These U.S. 
Customs personnel conduct their own investigations and also work with 
Mexican Government officials on issues of mutual concern. In so doing, 
Customs personnel work not only with Mexican Customs, but also with 
personnel from the Attorney General's Office (PGR) on aviation issues, 
the Mexican Defense Ministry on interdiction issues, and the Finance 
Ministry (Hacienda) on anti-money laundering efforts.
Customs-to-Customs Cooperation
    While Mexican Customs lacks the authority to deal with most 
narcotics issues, U.S. Customs has increased its working relationship 
with Mexican Customs in the last few years on other issues. The Border 
Liaison Mechanism and the recently inaugurated Forum Fronterizo are 
praiseworthy representations of Mexico's commitment to the developing 
accord between U.S. and Mexican Customs. Both groups have been 
developed to build a binational network among elected officials and 
business, media, and academic leaders from both sides of the 
international border.
    Also at several cities along the border, the Mexican Consulate 
office has been very proactive in addressing mutual concerns. An 
example of this is the assignment of a full-time consular 
representative to the San Ysidro border crossing within the past year.
    In addition to the coordination of hours of operation and other 
commercial-related activities, most Arizona ports have established 
mutual alert systems between themselves and their Mexican counterparts. 
For example, in Nogales an alarm system was jointly developed whereby 
U.S. Customs officials will utilize the alarm system to alert Mexican 
Customs officials of a high-speed chase approaching the port of entry. 
At Douglas, Mexican and U.S. Customs monitor a radio frequency that 
allows instant communication when problems arise.
    While we are not yet at the point to declare totally open 
communication with Mexico in the areas of narcotics intelligence and 
operational strategies, the local relationship is incrementally 
discovering areas in which to work together.
Enforcement Training in Mexico
    From 1994 through 1997, Customs held counterdrug training and 
assistance programs for our Mexican counterparts on the Carrier 
Initiative Program, Cargo Container Inspection, a Train-the-Trainer 
Workshop, and, in conjunction with the Criminal Investigation Division 
of the IRS, Money Laundering.
Cooperation with Aircraft Surveillance
    Customs is engaged in a cooperative effort with the Government of 
Mexico to use aircraft to interdict the flow of cocaine through Mexico. 
This program has developed significantly since 1990. In 1991, Customs 
began interceptor/tracker training operations in Mexico. Since that 
time, Customs has provided air interdiction training, both in the U.S. 
and in Mexico, to over 180 Mexican officers. Two Customs Citations and 
11 aircrew and support personnel are normally in-country at any given 
time. Operations in Mexico are also supported by Customs Citations on 
24-hour alert at Air branches and units along the Southwestern Border. 
This ongoing cooperative US/GOM program has resulted in a notable 
improvement in the Government of Mexico's ability to acquire, track and 
apprehend suspect aircraft targets.
    Because of mission priorities which are based on national policies, 
60 percent of U.S. Customs (USCS) P-3 AEW sorties have been dedicated 
to Joint Interagency Task Force (JIATF)-South for Source Zone 
operations in recent months. The remaining 40 percent is divided 
between the Domestic Air Interdiction Coordination Center (DAICC) for 
Arrival Zone operations and JIATF-East for Transit Zone operations. 
Missions to support Mexico are derived from this 40 percent.
    Mexico does derive a benefit from the P-3 AEW sorties devoted to 
the DAICC, which are generally flown along the southwest border. The P-
3 AEW radar range allows the crew to detect suspect aircraft well into 
Mexican airspace. Two additional Customs P-3 AEWs will be available for 
counterdrug operations in mid to late 1999.
    The Government of Mexico (GOM) has recently agreed to three U.S. 
Government proposals which will facilitate more responsive support to 
the Government of Mexico needs. U.S. proposals for routine P-3 AEW 
overflight will be approved by the Government of Mexico on a quarterly 
vice monthly basis. In exceptional situations the Government of Mexico 
will approve refueling stops and overnight stays on a case-by-case 
basis for intelligence-cued P-3 operations over Mexico. The Government 
of Mexico will also respond within 24 hours to requests for P-3 
overflight based on intelligence-cued scenarios.
    While cooperation has improved, Customs continues to identify areas 
where we can enhance coordination.
Money Laundering
    In addition to interdicting drugs, Customs also focuses on seizing 
drug traffickers' profits.
    Operation Choza Rica, launched by Customs Special Agents in 
McAllen, Texas uncovered and subsequently dismantled a major Mexican 
money laundering network along the Southwest border. This intricate web 
involved Mexican Casas de Cambio and established banks in the United 
States and Switzerland. In a series of criminal indictments, managing 
directors of several major Mexican Casas de Cambio and U.S. Banks to 
include American Express Bank International, First City Bank, Lone Star 
National Bank, and International Bank of Commerce were indicted for 
laundering money for the Juan Garcia-Abrego cocaine smuggling 
organization. In excess of 60 million dollars in cash and other assets 
were seized and forfeited in this investigation. AEBI forfeited 44 
million dollars to the Treasury Forfeiture Fund representing the 
largest forfeiture ever by a domestic corporation.
    Mexico, as well as a large number of other countries, is carrying 
out actions to prevent, detect and combat money laundering, which 
include: updating its legal framework, coordination between several 
government agencies, exchange of information and documentation with 
other countries, pursuant to International Treaties, carrying out joint 
coordinated investigations, regulating financial entities regarding 
suspicious and outstanding currency transactions, creation of a 
Financial Information Unit (FIU), and imparting training and technical 
expertise to personnel in charge of preventing, detecting, and 
combating money laundering transactions.
     On April 29, 1996, the Mexican legislature added Article 400 Bis 
to the Criminal Code, establishing for the first time the criminal 
offense of money laundering, which became effective on May 14, 1996, 
and is denominated as ``Transactions with resources from illicit 
origins.''

                       Constraints on Cooperation

    Although cooperation with Mexico is increasing, two issues continue 
to constrain our cooperative efforts: concerns about corruption of 
Mexican officials and the safety of our agents and other personnel.
The Question of Corruption
    In order to be effective and carry out our mission, the U.S. 
Customs Service must continue to deal with Mexican Customs and other 
authorities. These interactions, however, historically have been 
constrained by concerns over corruption.
    In recent months, the Government of Mexico has arrested high-
ranking military officials, aviation personnel, and other law 
enforcement officials on narcotics charges. While these arrests 
demonstrate a commitment by the Government of Mexico to ensure the 
integrity of Mexican law enforcement personnel, they also confirm our 
need to be circumspect in our dealings with Mexico. Given this level of 
concern, our agents must make judgments about the nature and caliber of 
the information they can share and the persons with whom they can share 
it. The recent arrests, however, are encouraging and our efforts at 
cooperation have improved.
Agent Safety
    Border safety is a major concern. We want our officers to operate 
in as secure an environment as we can create.
    Chairmen and Members of the Committee and the Caucus, this 
concludes my statement. I will be glad to respond to any questions you 
may have.

    Senator Coverdell. Thank you, Mr. Director. Let me turn to 
you, Mr.--did I pronounce that correctly? Ka-near?
    Mr. Kneir. Kneir.

   STATEMENT OF THE HONORABLE THOMAS KNEIR, DEPUTY ASSISTANT 
 DIRECTOR, ORGANIZED CRIME AND DRUG BRANCH, FEDERAL BUREAU OF 
                         INVESTIGATION.

    Mr. Kneir. Mr. Chairman, I would ask that my entire 
statement be submitted for the record, and----
    Senator Coverdell. It will.
    Mr. Kneir. Since the late hour and the vote coming up, I 
will make my comments brief.
    Mexican drug organizations are among the most significant 
crime threats facing the United States today. In addition to 
importing illegal drugs, these criminal enterprises are 
responsible for a variety of violent crimes, corruption of 
public officials, and alien smuggling.
    The activities of the Mexican drug trafficking 
organizations affect a myriad of crime problems in virtually 
every region of the United States. The unilateral efforts of 
the United States law enforcement agencies do not effectively 
address the crime problem. In order to be effective, we must 
address this organized criminal threat in partnership with the 
government of Mexico and Mexican law enforcement.
    I am pleased to report that we have made much progress in 
this area and we have many reasons to be optimistic about the 
future between U.S. and Mexican cooperative efforts.
    In the past year, the government of Mexico passed 
constitutional amendments and laws against organized crime and 
money laundering as well as enacted legislative authority to 
conduct legal wiretaps in Mexico. These new laws will give the 
Mexican law enforcement the tools they need to address 
sophisticated criminal enterprises much as we have seen in this 
country.
    An excellent example of the increased cooperation with law 
enforcement agencies in Mexico is illustrated in an 
investigation in our San Diego office--Operation Logan Sweep. 
This targeted criminal activity of the Logan Street Gang, a San 
Diego, California, gang.
    It was determined through that investigation that the 
Arellano-Felix organization was using members of the gang to 
distribute cocaine and marijuana and act as enforcers. This 
investigation resulted in the indictment of numerous gang 
members to include Ramon Arellano-Felix, the most violent of 
the Arellano brothers.
    Due to his extreme violent nature and its impact on the 
American public, Ramon Arellano-Felix was announced as a Top 10 
FBI fugitive. I might add that the cooperative effort of the 
Mexican law enforcement in this case was essential.
    The government of Mexico has also acted swiftly in the 
apprehension of criminals. In July 1997, I would like to talk 
about--a key witness of DEA being kidnapped at his business in 
McAllen, Texas. The witnesses stated that individuals dressed 
in Mexican police officers' garb entered the business and 
removed a Mr. Salinas at gunpoint. Three days later, Salinas' 
body was found in Mexico.
    In August 1997, a criminal complaint was filed against four 
individuals for kidnapping. Again, this was a good cooperative 
effort with Mexican law enforcement to bring this case to a 
resolution. Two of those individuals have been arrested.
    Also, the assistance of Mexican law enforcement was 
instrumental in a recent armored car robbery that the FBI 
investigated out of Jacksonville, Florida. Over $18 million was 
taken. Mexican authorities conducted a search warrant near 
Mexico City for us. We took that information and did a search 
warrant in the United States, and recovered $18.7 million of 
that money.
    I have talked to our legal attache in Mexico City and he 
believes that the spirit of cooperation with our Mexican law 
enforcement could not be better. Again, what we have talked 
about here today is, are we on the upswing with cooperation or 
are we moving backward?
    Certainly, the arrest of the Mexican Drug Czar last 
February was certainly a very dark moment. But since that time, 
through the vetting process, I believe that we have now begun 
to work with the vetted units, and really we see a brighter 
day. Thank you very much.
    [The prepared statement of Mr. Kneir follows:]

                 Prepared Statement of Thomas J. Kneir

    Mr. Chairman, Members of the Committee and Caucus, good afternoon. 
Thank you for giving me the opportunity to present the FBI's views 
regarding U.S.-Mexican cooperation on counter-narcotics efforts. I am 
Thomas J. Kneir, FBI Deputy Assistant Director for Organized Crime and 
Drug Matters.
    Mexican drug trafficking organizations are among the most 
significant crime threats facing the United States today. In addition 
to importing the majority of cocaine, marijuana, methamphetamine and a 
growing portion of the heroin entering the United States, these 
criminal enterprises are responsible for a variety of violent crimes, 
the corruption of public officials, and alien smuggling. The activities 
of Mexican drug trafficking organizations effect a myriad of crime 
problems in virtually every region of the U.S.
    The unilateral efforts of United States law enforcement agencies do 
not effectively address the crime problems stemming from Mexican drug 
trafficking organizations. In order to be effective, we must address 
this organized criminal threat in partnership with the Government of 
Mexico and Mexican law enforcement. I am pleased to report that we have 
made much progress in this area and we have many reasons to be 
optimistic about future U.S. and Mexican cooperative efforts. However, 
I must also state that a number of obstacles remain and there should be 
no doubt in anyone's mind that we still face challenges toward 
achieving the level of cooperation needed to successfully address the 
crime threat attributed to Mexican drug criminal enterprises.
    First, I would like to highlight some of the major advances that 
the Government of Mexico has made in addressing the pervasive crime 
problems generated by drug cartels. In the past year, the Government of 
Mexico promoted constitutional amendments and laws against organized 
crime and money laundering, as well as, enacted legislative authority 
to conduct legal wiretaps in Mexico. The restructuring of the attorney 
general's office, known as the Procuraduria General de la Republica 
(PGR), is progressing and the Mexican Government is promoting greater 
coordination between Federal, State and municipal law enforcement 
organizations.
    One example that highlights the increased cooperation that the FBI 
has experienced with law enforcement agencies in Mexico as illustrated 
by an investigation in our San Diego office. ``Operation Logan Sweep,'' 
was initiated in February, 1996, and targeted the criminal activities 
of a violent San Diego gang known as the Logan Street Gang. During the 
course of this investigation, it was determined that the Arellano Felix 
organization was using members of the Logan Street Gang to distribute 
cocaine and marijuana and act as ``enforcers'' in the furtherance of 
their drug trafficking organization. This investigation resulted in the 
indictment of numerous gang members to include Ramon Arrellano Felix 
the most violent brother. Due to his extreme violent nature and it's 
impact on the American public, Ramon Arellano Felix was announced as an 
FBI top 10 fugitive.
    The significance of the case is that it was accomplished by a joint 
Federal, State and local task force with the assistance of Mexican law 
enforcement. The cooperation of Mexican law enforcement proved to be 
invaluable to this investigation, in that they assisted the 
identification and subsequent relocation of several critical 
cooperating witnesses.
    The Government of Mexico has also acted swiftly in the apprehension 
of criminals who have a nexus to U.S. investigations. For example, in 
July 1997, Hector Salinas-Guerra, a local San Antonio businessman who 
was key witness in a DEA case, was kidnaped from his business in 
McAllen, Texas, near the Mexican border. Witnesses stated that at least 
three armed individuals dressed as Mexican police officers entered the 
business and took Mr. Salinas out at gunpoint. Three days later, 
Salinas' body was found in Mexico. The seven defendants that Mr. 
Salinas was to testify against were acquitted and released. In august 
1997 a criminal complaint was filed charging four individuals with 
kidnaping violating title 18 U.S. Code, section 1201. Two of these 
individuals have been identified, located and arrested by the Mexican 
authorities, while the others remain at large. Efforts on the part of 
Mexican law enforcement in this matter has been conducive in bringing 
these individuals to justice and is another positive example of the 
cooperation that the FBI enjoys with our Mexican law enforcement 
counterparts.
    The assistance of Mexican law enforcement was also instrumental in 
the recent 18.8 million dollar armored car robbery investigation in 
Jacksonville, Florida. At the request of the U.S., the Mexican 
authorities executed a search warrant in a suburb of Mexico city 
believed to be the hideout of the subject, Philip Noel Johnson, a vault 
guard for the Loomis-Fargo Corporation. Johnson fled to Mexico after 
committing the robbery and kidnaping an employee of the company. The 
search recovered a money order receipt for a mini-storage garage 
located in North Carolina. Based on this information, a subsequent 
search warrant was executed at the mini-storage garage and 18.7 million 
dollars was recovered. Johnson was later arrested while attempting to 
enter the U.S. through the southwest border.
    Progress has also been made in the area of training. To date 
approximately 95 Mexican Federal agents and prosecutors of their newly 
formed organized crime unit have completed the FBI/DEA investigative 
analysis course, a four-week long training seminar held at the Xerox 
Training Center near Washington, DC. These individuals were fully 
vetted prior to receiving the training, which is designed to enhance 
their investigative and technical skills, familiarize them with 
Mexico's new organized crime law, and solidify their working-
relationship with their U.S. Counterparts. Indications are that this 
venture has been mutually beneficial for the U.S. law enforcement and 
Mexico. Within the past year, a total of over 700 Mexican law 
enforcement officers have received training from or sponsored by the 
FBI, including specialized schools given in Mexico, elsewhere and at 
Quantico through the FBI National Academy.
    Other examples of visible increases in cooperation include several 
recent requests from the Government of Mexico for the assistance of FBI 
evidence response teams to process crime scenes and provide guidance in 
forensic science. On one such occasion, members of an FBI evidence 
response team were deployed to process the crime scene in the April, 
1997, murder of two Mexican PGR agents in Mexico City. In June, 1997, 
we also deployed an evidence response team at the request of the 
Government of Mexico to identify the body of drug kingpin Amado Carillo 
Fuentes, who died during plastic surgery.
    The FBI legal attache in Mexico considers the level of liaison and 
cooperation with Mexican law enforcement to be at an all time high. It 
is the most cooperation and the best attitude he has ever seen. This 
assessment applies not only to the presidential staff and the Mexican 
federal judicial police but also to Mexican state and local law 
enforcement agencies.
    Although there have been many positive developments in U.S. law 
enforcement's working relationship with our Mexican counterparts, 
public and law enforcement corruption in Mexico remains a serious 
problem. This is a problem that is openly acknowledged at the highest 
levels of Mexico's government. The highly publicized dismissal and 
arrest of Mexico's top anti-drug official, General Jesus Gutierrez 
Rebollo, this past February, graphically illustrates the problem. 
Gutierrez is alleged to have been closely associated with the Amado 
Carrillo Fuentes drug trafficking organization and provided them with 
protection in exchange for money and other bribes.
    The Government of Mexico is taking steps to address the corruption 
problem. In April, 1997, Mexican Government abolished the National 
Institute To Combat Drugs (INCD). The INCD was their main federal anti-
drug agency and was roughly equivalent to the DEA in the United States. 
A number of former INCD agents have been transferred to the Attorney 
General's new Organized Crime Unit. Members of the newly formed 
Organized Crime Unit are polygraphed to ensure that they are not 
working for drug traffickers.
    It is important to note that corruption exists on both sides of the 
border. Mexican drug trafficking organizations engage in concerted 
efforts to corrupt and recruit public and law enforcement officials not 
only in Mexico but in the United States as well. Recognizing this, the 
FBI initiated its southwest border public corruption initiative in 1991 
to prevent and eliminate corruption among U.S. Federal, State and local 
law enforcement along the southwest border.
    The FBI's southwest border public corruption initiative has had an 
impact on law enforcement corruption along the southwest border. Since 
1991, a total of sixteen Federal, one government official and seventeen 
State and local law enforcement officials have been convicted through 
FBI investigations.
    Another important aspect of U.S.-Mexican law enforcement 
cooperation which has still not come to fruition is the implementation 
of bilateral task forces located in the border cities of Tijuana, 
Juarez and Monterrey. Once staffed with fully vetted Mexican personnel, 
it was envisioned that these bilateral task forces would conduct 
investigations based on timely intelligence from other law enforcement 
entities to include FBI and DEA field offices located along the 
southwest border. These task forces would also collect and disseminate 
criminal intelligence.
    However, these task forces are not fully functional at this time as 
they are being restaffed with vetted Mexican officers. Further, the 
Mexican Government has promised to adequately fund the task forces.
    In conclusion, there have been some significant successes and 
noteworthy progress in U.S.-Mexican cooperation on counter-narcotics 
efforts. However, many challenges remain and the concerted, joint 
efforts and resources of both the U.S. and Mexican Governments are 
needed to address these challenges.
    Mr. Chairman, at this time I would be happy to answer any 
questions.

    Senator Coverdell. I appreciate the testimony of each. And 
as you have all requested, your full statements will be entered 
into the record. I am going to turn to Senator Grassley for the 
first round of questions and we will again keep this limit of 5 
minutes in place.
    Senator Grassley?
    Senator Grassley. Yes. My questions, unless otherwise 
indicated, would be to all of you.
    First question--Mexico recently received 70 helicopters 
from the United States for use by the Mexican military. The 
original justification for those aircraft as far as I 
understand was to help in air interdiction, obviously.
    But now, Mexican officials are saying that the major 
smuggling threat is land or maritime, especially in commercial 
vehicles and cargo.
    In your evaluation, has this shift occurred? And if that 
shift has occurred, then what is the justification for 
providing the helicopters? What are those helicopters being 
used for today if not air interdiction? And what measures are 
being taken to deal with a maritime threat--in other words, 
generally, what is our strategy?
    First, are the facts correct?
    Mr. Milford. Well, as far as the facts, as far as the 
smuggling, yes, you are absolutely correct, Senator. There is 
no question today. And this is not only into Mexico, but also 
into South Florida and also over into the Caribbean.
    Senator Grassley. So then----
    Mr. Milford. The maritime smuggling of drugs is the primary 
means of moving drugs from Colombia.
    Senator Grassley. So have we wasted our money in giving the 
7 helicopters--70 helicopters?
    Mr. Milford. I would not think so. I think if we moved into 
the--into just looking at the maritime, they would move back to 
the air interdiction. One of the--early on, one of the biggest 
problems for us was the movement of aircraft into the central 
part of Mexico where we could not respond.
    Senator Grassley. Well, then, we--if the strategy has 
changed, or I mean if their tactics have changed, to what 
extent have we changed our tactics then to meet the maritime 
method of transportation?
    Mr. Milford. Well, I think, again, we are meeting those 
with a lot of the deployments in the Caribbean and moving that 
way--hopefully. We are basing a lot of our activity, and I will 
defer to Mr. Banks in a minute here, but we are also looking at 
intelligence and at intelligence-based activities, not only 
with the air interdiction but the sea efforts, and also 
movement over the border.
    So we really have to--base most of our operations today on 
intelligence-based activities, not only through Mexico, but 
through the entire quarter.
    Senator Coverdell. Mr. Banks, do you want to add to that?
    Mr. Banks. Yes, if I could, Mr. Chairman.
    As far as the change, the shifting of the smuggling 
patterns, we do not necessarily think the entire air 
interdiction problem is solved. But it does appear that they 
are bringing drugs, especially cocaine, across the border from 
Guatemala into Mexico. It appears that there are internal 
flights within Mexico to move the drugs up to the border.
    We are seeing at least certain groupings of landing areas 
in suspect areas, so we still think that there is a legitimate 
need for an air interdiction program within Mexico.
    As far as the movement into maritime, there is no question 
that they are pursuing that. There is enough intelligence out 
there to show that.
    One of the things that we are doing, in conjunction with 
the Drug Enforcement Administration, is we are going down into 
Mexico to their seaports to go in and try to work with the 
ocean carriers, to try to work with the ports' authorities, and 
to try to work with the exporters and the shippers and the 
forwarders (1) in order to buildup a better security system for 
the transiting, so that there is less opportunity to conceal 
drugs within those containers and on board those conveyances; 
and (2) we try to design with them better security processes so 
that there is less opportunity to conceal drugs.
    We also try to build sources of information as we work with 
DEA, especially within those areas, from the people that are 
involved in that transportation industry. So we are indeed 
trying to at least meet the shift if not be ahead of the curve.
    Senator Grassley. Mr. Milford, on another point--and it is 
improper to talk about active cases so I am not doing that.
    But as an example, can you highlight the level and type of 
cooperation your agency received from the Mexican Government in 
your efforts to track the whereabouts and activities of Amado 
Carrillo Fuentes?
    Mr. Milford. Yes, I can. There was a lot of activity over 
the past year, leading up to the July 4th demise of Mr. 
Carrillo Fuentes.
    There was a lot of pressure, both on this side of the 
border as far as passing information and leads down into 
Mexico. That information was utilized by the Mexicans, the 
Mexican military.
    Senator Grassley. Was it accurate and timely?
    Mr. Milford. Yes, sir, it was. It was passed to the 
Mexicans and also the Mexican Government themselves really 
heightened their operations against Amado Carrillo Fuentes.
    That led Amado--because of the pressure--to look for other 
avenues and places to really--to move his activities. And what 
we saw--and again we were working in coordination with the 
Mexican authorities and then finally with the Chilean 
authorities--we saw him set up a base of operations.
    We did not locate him directly but we saw his people move 
their--his base of operations down to Santiago, Chile. That was 
being investigated at the time of his death and we fully 
anticipated that Mr. Carrillo Fuentes was moving himself and 
his family down to that location under a cover of false 
identification which he built and was trying to build when he 
was--passed away as a result of the plastic surgery.
    Senator Coverdell. Thank you, Senator. Senator Biden?
    Senator Biden. Out of curiosity, Mr. Milford, was his 
passing helped?
    Mr. Milford. I do not see any--I do not have any 
information to believe it was helped. I think it was helped----
    Senator Biden. Is the doctor still alive?
    Mr. Milford. I am not sure. We really do not know.
    Senator Biden. If he is, it probably was. I just--that is 
just a point of curiosity. Mr. Banks, several years ago, I had 
a--a group come up the port of Wilmington, Delaware to 
demonstrate a new technology that was--looked like what when we 
were kids you would call a ray gun. It was a gun. You could 
literally aim it. It was a laser would go through a container, 
identifying holes or gaps or changes in consistency in the 
cargo.
    Suppose that we purchase a whole lot of those--there is 
very few of them? How many--first of all, is that equipment 
useful for you in your efforts?
    Mr. Banks. Absolutely, sir. It is very useful.
    Senator Biden. How much of that equipment do you have at 
the border?
    Mr. Banks. We have an incredible array of technology. The 
first thing that I would say to you is that we have large scale 
X-ray systems. It is a low X-ray because we have to put 
foodstuffs through it. We even get aliens smuggled in through 
these trucks.
    Senator Biden. Right.
    Mr. Banks. And you have to keep the footprint fairly small 
within the import lot areas that we are dealing with.
    As the General said, we have two 18-wheeler X-rays in 
California.
    Senator Biden. Right.
    Mr. Banks. We also have another one up now in Pharr Texas.
    Senator Biden. How many do you need?
    Mr. Banks. We would like one at every single crossing 
that----
    Senator Biden. I am serious. I am not being facetious 
because what we hear--you know, I mean, I have been frustrated 
by this for the last 6 years.
    We have a lot of technology that is available, and we even 
set up, as you well know and DEA knows, we set up a mechanism 
with former Secretary of Defense Cohen when he was a Senator 
here. He and I and others worked on using military applications 
in technologies, in research that was available in this drug 
war, some of which was very promising, some of it classified.
    The bottom line is I do not think you have gotten the money 
to do what--let me put it this way. It is not--we do not have 
to invent any new technology to have these machines. I mean, 
the machines exist that--what we were just talking about for 
the 18-wheelers.
    You would need another--another 50 of them, do not you?
    Mr. Banks. Well, we could put them to good use, no 
question.
    Senator Biden. No, I am not being facetious now. I am being 
serious.
    Mr. Banks. I would like at least one at every crossing 
where we get commercial traffic.
    Senator Biden. And how many crossings?
    Mr. Banks. I would also like the higher energy X-rays at 
every seaport where we get these ocean-going containers, at 
least one.
    Senator Biden. Give me an example--I mean, give me an 
estimate of how many crossings we are talking about.
    Mr. Banks. We have 39 crossings along that Southwest 
border.
    Senator Biden. Now, do you know the cost of one of these 
machines?
    Mr. Banks. Well, it depends which one it is.
    Senator Biden. The best one.
    Mr. Banks. There are different ones for different purposes. 
The large-scale X-ray is about $2.5 million.
    Senator Biden. Right.
    Mr. Banks. There is a mobile truck X-ray that gives us 
capacity to actually move it to where the threat is.
    Senator Biden. Right.
    Mr. Banks. And that is about $1.9 million.
    Senator Biden. So, $2.5 million. You are talking $100 
million could get you all that you needed in terms of this X-
ray machinery?
    Senator Coverdell. That is right.
    Senator Biden. Correct?
    I would propose that Senator Coverdell and I and others try 
to get you that money, just try to appropriate that money. I 
think if we force our colleagues to focus on this--every one of 
our colleagues talks about how horrible it is and all this is 
coming across the border.
    But, I mean, sometimes you have got to put your money where 
your mouth is.
    But you can use it--you have no doubt that you can use it 
with efficacy and quickly, correct?
    Mr. Banks. Yes, sir. However, it is not that easy to put up 
quickly.
    Senator Biden. When I say quickly, I mean assuming the 
money were appropriated, what timeframe do you need to cover 
all of these crossings?
    Mr. Banks. I would actually have to talk to the contractors 
to go that far. It will take over 3 years to complete 
installation of all eight truck X-ray systems. Once we get 
started, of course, it gets easier.
    One of the things I want to mention on this is General 
McCaffrey and the Drug Czar's office and the Department of 
Defense have been instrumental in making this happen.
    Senator Biden. Oh, I know that. McCaffrey has been pushing 
hard for it.
    Last question--my time is up. New York Times earlier this 
year reported--and this is for Mr. Milford, Mr. Kneir, and 
anyone else who wants to take a crack at it--reported that the 
administration had been considering proposing a freeze on the 
assets of commercial front ventures of the Mexican traffickers.
    Similar sanctions, if I remember correctly, were imposed on 
about 100 companies linked to Colombian cartels in 1995. To the 
best of my knowledge, no such action has been taken yet. Is it 
still under review, or do you--can anyone comment on it? Yes, 
Mr. Milford?
    Mr. Milford. I can comment on it, Senator. It--first of 
all, it was a tremendous success, as you well know, in 
Colombia. We were able to identify those organizations and 
companies over many years of investigation.
    We, in a multi-agency type approach with Customs, the FBI, 
and everybody else at the State Department, are working to 
identify the companies that are held by these people. I must 
say that the investigation of Amado Carrillo Fuentes and his 
activities, not only in Mexico but in Chile, have resulted in 
the seizure of about $56 million in Mexico that has been 
frozen.
    That information was then--and information from that 
seizure--was then used to seize on two different seizures, one 
of $26 and one of $24 million--money in two different New York 
bank accounts. We are moving in other areas and looking for 
other bank accounts, not only with Amado but the other AC--the 
other traffickers. And I think it is a--it is a way to go, you 
are absolutely right, and we should continue it.
    Senator Biden. One of the few things that I ever initiated 
here that had some real impact was the asset forfeiture 
legislation back in--because I found a very simple proposition 
talking to all you experts over the years. Nothing has 
changed--follow the money.
    That you are always going to have in these hydra-headed 
monsters a new leader that is going to rise to the top. But 
they need money. And if you can freeze the assets and you can 
seize the assets, it is a big asset--no pun intended.
    Senator Coverdell. Senator, if I could----
    Senator Biden. I would hope that the administration is 
considering pursuing with even greater vigor the companies that 
we can--that you can identify.
    Mr. Milford. If I may add, Senator, one of our biggest 
concerns now is the movement of bulk cash down through not only 
into Mexico via the same cargo that is--that they move the 
drugs up, but also into Colombia.
    In that Operation Reciprocity, we have confirmed that $100 
million was moved over a period of about a year and a half from 
one arm of a transportation group. It was a trucking company 
out of Battle Creek, Michigan that moved $100 million just out 
of that one operation in the Amado Carrillo Fuentes 
organization.
    Senator Biden. Again, my time is up. I appreciate your 
efforts and I am going to see--and I am sure Senator Coverdell 
agrees--we will see what we can do at least in embarrassing 
people to vote against coming up with the money because this is 
a national security issue.
    Senator Coverdell. That and we want to use it. Senator 
Sessions?
    Senator Sessions. Thank you, Senator Coverdell.
    Senator Coverdell. 11 minutes.
    Senator Sessions. Let me ask you this, perhaps all of you. 
I know you are working hard on this. Everybody is putting a 
positive spin on this--the situation with Mexico. But I am 
having a difficult time following that.
    Would you not agree that over the last 6 to 8 years, there 
has been a major shift in the importation of drugs into the 
United States through Mexico? And that has to be a failure, 
would it not?
    It was going from Colombia to Miami. Now it is going 
through Mexico. That is a major failure.
    One of the things that indicates a serious belief by a 
nation that they are going to do something about drugs is 
whether they will extradite citizens who are charged with 
serious drug offenses?
    Let me ask you--has any Mexican citizen been extradited in 
the last 4 years to your knowledge?
    Senator Coverdell. Can I add to that?
    Senator Sessions. Yes.
    Senator Coverdell. This--this area is one of contradiction, 
and it is something we ought to clear up so that both the 
Congress and the administration are working off the same 
number.
    I have note that there are 90 drug-related provisional 
arrest warrants outstanding in Mexico from the United States, 
and only three Mexicans have been arrested and none extradited. 
Now Senator Feinstein--and I wish she could be here--takes 
exception with this data.
    We ought to be able to at least clear it up but I will let 
you all respond to the Senator from Alabama.
    Mr. Milford. Senator, first of all, there is optimism but 
there--but of course, there is a lot, again, as I mentioned at 
the closing of my statement.
    We are in the process phase right now. There has been a lot 
of concern over making sure that we have a unit in Mexico that 
we can actually work with like we worked with law enforcement 
units in the United States.
    Senator Sessions. You mean there is not a unit in Mexico 
that United States law enforcement can even work with to get 
somebody extradited?
    Mr. Milford. I think today there is. There--we have some 
leaders in place. Attorney General Madrazo has been very 
positive in putting leaders in place. There are DEA--our DEA 
office in Mexico has developed a relationship with several key 
members of the organizations that are responsible for drug 
enforcement--yes, we have that.
    As far as the----
    Senator Sessions. Well, you do not have anybody extradited 
and have not had anybody for all practical purposes.
    But when I was a United States Attorney, we indicted a 
major cartel member in Mexico. He was reportedly involved in 
the Kiki Camarena matter. Within days of the time my Assistant 
United States Attorney was to go to Mexico to oversee the 
extradition, he, quote, escaped, and I am not aware of anyone 
being extradited, certainly not from Colombia.
    And so we have got a problem there. I do not think we can 
put a very good spin on that.
    They have a money laundering statute, but a statue is not 
worth much unless it is utilized. They do not have a forfeiture 
statute in Mexico, do they--forfeituring of assets? I am not 
aware that they do.
    Mr. Milford. I do not, sir.
    Senator Sessions. And I do not believe that very much has 
been done with the money laundering statute. Colombia is 
bragging about having a forfeiture in a money laundering 
statute. What good is it if you do not use it? So that is a 
matter of concern to me.
    Let me ask you this, Mr. Milford, I was just looking over 
the record of prosecutions by this Department of Justice of 
which you are a part. And even though the prosecutions are up 
about 12 or so percent, our cocaine, powder cocaine, cases, as 
it is normally imported into the country. Is that not correct?
    Mr. Milford. Yes, sir.
    Senator Sessions. Have actually been down over the last 5 
years. What is happening? Why are the prosecutions down, the 
number of personnel up, the amount we are spending up, the 
prices are plummeting on drugs. Our use is up by teenagers 
dramatically. We have had an utter failure in the last number 
of years, and to sit around here and talk about Mexico might be 
getting better and might do something in the future, that has 
been said for the last half a dozen decades. That is over a 
decade we have talked about that.
    Do you have any insight into what we can do?
    Mr. Milford. Sir, number one, as far as the prosecutions, I 
am not going to address that. What I will address is the 
investigative expertise and the type of programs that we have 
in place.
    We are working national coordinated cases with not only the 
Federal Government, but the State and local governments. We 
have investigations that have identified the command and 
control, not only in Miami but along the Southwest border. What 
we have been doing as Federal investigative agencies--because 
of our lack of ability to work within Mexico over the past 
several years, is work from the border inward.
    We are--we have had some significant strides in, for 
example, in the----
    Senator Sessions. How can you do that if----
    Mr. Milford. Operation Reciprocity and the Operation 
Limelight. We have done those. There have been vigorous 
prosecutions and indictments who we can touch in the United 
States.
    What we have realized over working with Colombia and some 
of the other countries is that most of the investigations and 
most of the successes we have have resulted from investigations 
initiated within the United States, and then passing the 
information to our counterparts in other countries. It was 
tremendously successful in Colombia, where we went after the 
cartel--the Cali members, and that was successful.
    What we are trying to do and hopefully trying to do----
    Senator Sessions. The cartels are still operating and that 
is not a successful operation. We give Mexico 70 helicopters. 
We might as well have spent that money on these X-ray machines, 
it seems to me. My view is if we are going to give a country 
helicopters, let us give it to a country that does not send us 
dope. Let us send it to a country that does not do that and 
does enforce the law.
    And with regard to Mr. Carrillo Fuentes, his death down 
there--is there any indication that has reduced the flow of 
drugs into the United States?
    Mr. Milford. No.
    Senator Coverdell. Let me do this, Senator Sessions. I--I 
am going to suggest that if I can ask the panel, these two 
Senators need to vote, and I would like to keep you impaneled 
for about another 5 minutes. I have a question or two.
    I would think you would be finished within 15 minutes, but 
we do need to go over there to vote and return and then we 
would have assembled a new panel.
    If you are under a--any of you are under a schedule that 
does not allow you to wait another 15 minutes, we would 
certainly understand. You are certainly at leave to go if you 
need to. Otherwise, I am going to ask you to hold right where 
you are. [Recess]
    Senator Coverdell. All right, I thank the panel for its 
indulgence.
    I think I will be pretty close to keeping my promise to 
having you out of here.
    I think that the issue that seems to develop from time to 
time--Senator Sessions' inquiry raised it, Senator Feinstein 
and others from time to time. We are caught in the dilemma of 
seeking cooperation in a very tense environment. And the 
President of Mexico took some umbrage with my and Senator 
Feinstein's statements.
    But I, through emissaries, have said you need to read the 
entire report which is--there are some positive things 
happening and there are some things that are not.
    We are going to--we are just months away from being in a 
very difficult environment. I think none of us on either side 
of the border can accept silence, and not talking about our 
problems openly to the people of both of our countries. We are 
not going to get anywhere doing that.
    And in the long run, even though it might have a temporary 
ameliorating effect, in the long run it will have a devastating 
effect. And I think you see that being expressed here.
    My specific question deals with the coordination. I would 
like each of you to comment. Do you feel today that the State 
Department, DEA, Customs, FBI, are adequately coordinating and 
I would like each of you to tell me who do you view as the lead 
coordinating agency in terms of measuring the assets that we 
have to bring to bear here and coordinating their utility?
    I will just start with you, Mr. Kneir.
    Mr. Kneir. I think right now the coordination among the 
Federal law enforcement agencies is probably as good as it has 
ever been, especially with DEA, FBI, and U.S. Customs. We truly 
have a coordinated effort and utilize each other's intelligence 
and utilize co-location in HIDTAs that were elaborated along 
the Southwest border.
    The Department of Justice is what we look to for the 
guidance for drug matters in the United States.
    Senator Coverdell. The Justice Department?
    Mr. Kneir. Yes.
    Senator Coverdell. Do you all meet regularly in a 
coordinated task force?
    Mr. Kneir. Yes, we do.
    Senator Coverdell. Mr. Banks.
    Mr. Banks. I would also say that I think the level of 
cooperation between the U.S. federal law enforcement agencies 
is at an all-time high. I would add not only DEA and the FBI, I 
would also add the Coast Guard and the Immigration Service/
Border Patrol.
    The interdiction work that we do with the Coast Guard--it 
is virtually seamless in terms of how some of it happens. Tom 
Constantine and I, along with Mr. Milford--almost 2 days ago--
--
    Mr. Milford. Two days ago.
    Mr. Banks. Two days ago, we had special agents-in-charge 
both for Customs and for DEA together resolving issues. We were 
trying to put issues on the table, trying to figure out how 
could we coordinate our activities.
    So are we meeting? Absolutely we are meeting.
    I guess what I would say to you is we probably look to the 
Drug Czar's office, ONDCP, as a central feature for a lot of 
the coordination. He calls together a lot of meetings where we 
are jointly, trying to resolve issues.
    He has focused us at least on a combined strategy. He has a 
documented strategy and he tries to drive us together--the 
high-level contact group. There is a variety of other 
circumstances.
    I am not taking anything away from the Department of 
Justice or my boss within Treasury. But the Drug Czar's office 
does call a lot of combined meetings to focus on issues.
    Senator Coverdell. Thank you, Director. Mr. Milford?
    Mr. Milford. Again, as you have heard, we do have a 
tremendous cooperative here in the United States, and we are 
talking specifically about Mexico. What we are looking today 
now is to develop the same type of cooperation in Mexico as we 
have--as we have had with other countries in this cooperative 
effort in the United States.
    I think we are at a starting point. As I mentioned earlier, 
we have several individuals, officials, and a few of the vetted 
units that we are working with. It is by no means working 
perfectly. It is again, as I mentioned to you earlier, it is in 
the process of developing.
    We are not in the results area. There have been very few 
results when you look at the amount of trafficking activity and 
the number of traffickers that are actually in Mexico operating 
today. Every one of those major organizations are working in 
sending a tremendous amount of drugs into the United States.
    Do we have a cooperative effort? It is beginning. We need 
to do a much better job. As far as actually--using actionable 
information, the Mexicans using actionable information, to 
identify, arrest, and incarcerate and prosecute these 
individuals.
    We need to get at--the border operations, the border task 
forces up and working. They are an integral part of this whole 
operation. And once we get that, we can utilize the 
intelligence developed in the United States, pass it, and know 
it is going to be passed and utilized and actually acted upon 
in Mexico.
    That is what we are looking for. That is what--that is the 
only effort that we have ever asked for from the Mexicans.
    Senator Coverdell. Where do you look for your--as the top 
of this?
    Mr. Milford. The Department of Justice.
    Senator Coverdell. Ambassador?
    Mr. Davidow. Senator, if I could just add a different 
perspective, it seems to me that so much of the coordination 
has to be done on the ground, in the field as it were, in our 
embassies overseas.
    In our embassy in Mexico, for instance, there are 28 
different government agencies represented. I would guess that 
fully half of those have some role to play in the anti-
narcotics fight. It falls to the chief of mission, the 
Ambassador, or the charges to coordinate those activities in 
the field.
    It seemed--this is important because coordination is not 
something that is done once and can be forgotten. It is a daily 
activity, and we rely on our Ambassadors in the field for that 
guidance and organizational capacity.
    Senator Coverdell. Just as a--I was recently--I am going to 
turn to Senator Grassley. I was recently in a--how many of you 
have visited with a teenager or teenagers that have been nailed 
by this in the last 12 months?
    I am going to recommend something that you do. I have been 
to a youth detention center, and there were about 20 young 
women age 13-16. And just--I tell you what it will do for you, 
because I know this gets weary. It will just remind of what 
this is all about. And I would recommend each of you do it--it 
is really vivid. You will never forget it.
    Senator Grassley?
    Senator Grassley. Yeah. I was also recently in my State at 
a school that is for teenagers that are involved with the 
courts. And I found--and they had me speak to these students.
    And every student in explaining why they were there, there 
was drugs involved in each of them. And that was clear. And one 
of the things that every student told me was a major problem as 
far as they had found in their life is that their parents were 
not strict enough--that would include not only drugs but a lot 
of other things.
    But they were there. Drugs were involved in every one of 
their cases. Mr. Milford, got to clarify something on what 
might be the official position of the DEA.
    In the past, your agency has made clear that there are real 
problems with Mexico. I sense today that you are painting a 
picture of sweetness and light. Is that what we are to 
understand is the official view of the DEA in regard to our 
drug problems with Mexico and their cooperation or not with us?
    Mr. Milford. Senator, I do not want to paint a rosy 
picture. As I said, we are in a process stage that we are 
trying to develop an organizational structure that we can 
actually work with.
    There are several people that we actually pass information, 
and it has been successful. They have used the information 
effectively. But it needs to be developed, the program needs to 
be developed. We have to have the border task forces up and 
running and in place. They are there. There are Mexicans who 
are--Mexican officials who are actually a part of them, but 
there is no U.S. presence in those.
    We need to look at--across the country of Mexico so our 
counterparts can have information passed to them in Juarez, 
Tijuana, Monterrey. We have to look that way.
    So what I am telling you is there is hope. I do not in any 
way----
    Senator Grassley. But there are still problems?
    Mr. Milford. Absolutely.
    Senator Grassley. OK. Now the other question of each of you 
is just very short, and it is procedural, not substance.
    But has there been any attempt to censor your remarks for 
the hearing today?
    Mr. Davidow. No, sir.
    Mr. Milford. None.
    Mr. Banks. No.
    Mr. Kneir. No, sir.
    Senator Grassley. And, second question--the same yes or no. 
Was there no effort to remove information from your statements?
    Mr. Davidow. No, sir.
    Mr. Milford. Not that I know of, sir.
    Mr. Banks. Some in mine. They thought my statement was way 
too long. They thought it had extraneous material, a lot of 
fluff in it. So, yes.
    Senator Coverdell. You ever going to run for office? 
[Laughter.]
    Senator Grassley. But you do not see that as an effort to 
change the direction of your testimony?
    Mr. Banks. I do not believe it changed the direction of my 
testimony, but there is no question my testimony was 
significantly shortened.
    Senator Grassley. Mr. Kneir?
    Mr. Kneir. No, sir.
    Senator Grassley. Thank you. I am done.
    Senator Coverdell. All right. I am going to adjourn this 
panel and call the next. I thank each of you for your service 
to your country and for your willingness to be with us here 
today. We appreciate it very much. Thank you.
    Senator Grassley. Thank you . Senator Coverdell. I wonder 
if we can go ahead. Mr. Ferrarone and Dr. Godson, you have had 
sort of a long hearing to witness. I think we will operate 
under the same admonition: if you can limit your remarks to 5 
minutes, and then we will have a question or two and let you 
enjoy the balance of the evening.
    Let us begin with you, Mr. Ferrarone. And I need to mention 
that you are a former head of the DEA Office in Houston. We 
appreciate very much your being here, and we appreciate what I 
would characterize as almost unlimited patience. Thank you.

   STATEMENT OF DONALD F. FERRARONE, FORMER SPECIAL AGENT-IN-
       CHARGE, HOUSTON FIELD DIVISION, DRUG ENFORCEMENT 
             ADMINISTRATION, DEPARTMENT OF JUSTICE

    Mr. Ferrarone. Well, thank you, Mr. Chairman. I appreciate 
the opportunity to come before you today.
    Although I am somewhat worried, after what I heard out 
there, there is, I think, a picture that I am a little 
surprised at. I retired 9 months ago. I covered that border. I 
had 1,200 miles of the border under my jurisdiction. But it was 
not long ago that I was a member of the U.S. Government and, on 
occasion, testifying before Congress on matters of narcotics 
and international organized crime. But today I am here as a 
private citizen.
    I am going to go through my statement here, because I think 
it will tie into a lot of things that were said. My formal 
presentation is going to be short. I will leave the majority of 
my time open for any questions, although I know everybody is in 
a rush.
    Before I start, however, I wish to say for the record that 
nothing that I will say, either in my opening remarks or later 
in the question-and-answer period, is aimed directly at or 
against those who fight against this very serious problem that 
we have in the United States and around the world. I have 
worked too long beside almost everybody in this room that I saw 
today, as well as many of my counterparts overseas.
    In addition, I also with to state that criticism of the 
Mexican Government and the minority of Mexican criminals should 
not be mistaken as criticism of the Mexican people. And I am 
really very cognizant of reactions that come about when these 
kind of statements that will follow are publicized.
    On the contrary, it is actually my belief that the people 
of Mexico suffer in ways that we could not imagine in the 
United States, nor tolerate, at the hands of a violent drug 
trafficking trade on the ascendancy, and a crumbling judiciary 
that is unable and, oftentimes, unwilling to deliver justice. 
And I am not here today, as well, to say that the time has come 
for us to chart a new course or any of that kind of thing. That 
time was upon us many years ago.
    To those of us in law enforcement, none of what we see 
today in Mexico is really new. What has changed, however, is 
the intensity of the problem. I cannot address the enormous 
demand of drugs in the United States that drives the engine of 
this criminal enterprise with seemingly unlimited amounts of 
cash. I will leave that to others who are more qualified.
    But to those who say this is the root cause, I would only 
say back to them that it is nearly impossible to raise a 
youngster anywhere in the United States today and not have the 
daily fear that your kid will succumb to the ever-present 
street trade. And I have, Senator, over the last month, been in 
a number of schools and worked with a lot of the kids that are 
facing what you talked about earlier.
    I believe we bear a great deal of responsibility in the 
United States and in North America in general. I do not 
believe, however, that we can slow this phenomenon down in any 
appreciable manner when we have at our border such a wide open 
and uncontested safe haven for major drug trafficking.
    Now, before I start the next section here, I would like to 
lend my support to General McCaffrey's efforts. I know the 
General quite well, and I am a big fan of what he does. What I 
really like about the General is that he has not only trained, 
but he has actually accomplished, he has actually done things 
in his life of great importance. And so we in the law 
enforcement community always like to separate those that do the 
talking and those that actually do the thing.
    Senator Coverdell. Do the doing, walking and talking.
    Mr. Ferrarone. Yes, exactly. I did not want to say that.
    But I do have some disagreement on his analysis of the 
current situation, however. The Mexican Government, in my 
opinion, facilitates the traffic in narcotics across our 
border. Every indicator now and over the last 20 years reveals 
that the Government Mexico consistently works together with 
major drug trafficking families, seeing to it that drugs, 
either homegrown or shipped from South America, are off-loaded 
securely, protected, shipped cross-country, under convoy, 
stored, and safely transported to our border.
    Now, the oft-asked question of exactly what the definition 
of Government of Mexico involvement should be or, in other 
words, when is official involvement official, remains open for 
debate in some circles. I do not believe the law enforcement 
folks have that debate.
    The Institutional Revolutionary Party is the core of the 
problem in Mexico. Politic shifts within Mexico show some 
potential for change in the future, providing these new 
participants in democracy do not view their country, as have 
the PRI in the last 60-plus years, as a food source. The 
Mexican judiciary is bankrupt. Federal, state and local police, 
together with prosecutors and judges, are in the pocket of the 
trafficking families. This guarantees the absence of justice 
not only in matters relating to drug trafficking, but most 
other criminal and civil cases.
    Once again, the Mexican people are the first to suffer 
under this phenomenon.
    The Mexican military has been involved as well. The Mexican 
Army and Navy have been frequently called upon by the drug 
trafficking families for assistance over the past 25 years. 
While the U.S. Government has prioritized measures against drug 
trafficking, what ultimately develops in practice reveals that 
economic and national security issues almost always overtake 
the narcotics question. Over time, this has been partially 
responsible for the uncontested and systematic penetration by 
the drug families of leading institutions within Mexico.
    In my opinion, we suffer from the phenomenon of always 
being in a huddle and never running a play. High-level contact 
group, U.S.-Mexico binational commissions, senior law 
enforcement plenary group, technical, and consultative groups, 
threat assessments, fill many a bureaucrats day, while nothing 
of substance ultimately materialize. Law enforcement by 
committee is the rule. Gridlock is generally the result.
    Now, recommendations. I have skipped briefly here, just to 
move this along a little bit. The recommendations here.
    Once again, I think that the General's concept of setting 
in motion long-term planning that will span not only this 
administration, but will also survive elections in Mexico, is 
absolutely critical. This problem has been let go for so long 
that it is going to take a long time to fix it. So the long-
term planning, and what I listened to and read over the last 
couple of days, is very, very important.
    I want to make one point. And that is that when you are--
and I have had experience in this, because I have been all over 
the world and I have assisted in helping to reconstruct police 
departments, as a partner, in many, many countries. It is 
important to get these things in the right order.
    For example, if you vet 1,500, which I heard for the first 
time today--they are doing as many as 1,500 police and military 
and others, and the numbers are actually quite high--if you vet 
these folks and you go to all that work and you train them, 
then you bring them on board and you do not give them a living 
wage, within a week, that young man or young woman is out 
trying to find out how they can feed their family.
    If you put that team on a plane in Mexico City and you say, 
you are going to go to work an operation in Guadalajara and you 
do not--excuse me--you do not put them on the plane, you tell 
them to get to Guadalajara--and they go there with no money to 
pay for the ticket, bus, car, thumbing, however they get there, 
no money to survive, it is only a short period of time--and I 
mean it is literally days, when people are out there--folks are 
out there trying to do this.
    I think that this is--there are a number of issues in this 
institution-building side of the house in which it is very 
important to say that the steps that are taken have to be in 
the right order. If you are going to build an institution, you 
build the Mexican institutions first, firmly. You do not train 
them with high-level, sophisticated American technology or any 
other technology in advance of the institution being stable. 
Because it has been my experience that that training is very 
quickly used in exchange for the payments that these people 
need to survive with by the drug trafficking organizations. And 
it has happened.
    Stay the course. I will make this one sentence. We need to 
have a 2-, 5-, 10-, 15-, and 20-year planning cycle with this 
problem. We need a partnership with Mexico. The idea of sharing 
this among other nations might be something that will stimulate 
some real activity. But, in any event, we have to have a very 
long outlook on this.
    Demand true measures of effectiveness. I heard all this a 
number of times. The true measure of effectiveness should be 
how many of the trafficker organizations are dismantled at the 
end of the year. That is the authentic measure of 
effectiveness.
    I also have a pet peeve, which is our U.S. policy, 
generally, steps back when push comes to shove, when it comes 
to narcotics trafficking in Mexico. We do not seem to be able 
to blend in the narcotics issue, together with the economy and 
the national security issues. I would argue that holding Mexico 
to an international standard on this matter, both of how they--
setting up a court system that works, having police that are 
not working most of their time on the wrong side, will not 
destabilize Mexico.
    I do feel that as we continue to let this thing go--and we 
have let it go for a long time--that the long-term penetration 
and just exactly what happened last year, when literally 
whole--very large sections of the Mexican judiciary collapsed. 
Yes, they fired all these people. But there is another way of 
looking at that.
    So, once again, I am here as a private citizen. Thanks a 
lot.
    [The prepared statement of Mr. Ferrarone follows:]

               Prepared Statement of Donald F. Ferrarone

    I appreciate the opportunity to come before you today. It was not 
that long ago that I was a member of the U.S. Government and, on 
occasion, testifying before both Congress and the Senate on matters 
relating to Narcotics and International Organized Crime. Today I am 
here as a private citizen.
    My formal presentation will be short by design. I will leave the 
majority of my time before the Committee open for your questions. 
Before I start however I wish to state for the record that nothing that 
I will say, either in my opening remarks or later in the question and 
answer period, is aimed directly at or against those who fight against 
this terrible plague of drugs. I have worked too long beside tireless 
self sacrificing individuals, both in the U.S. and abroad, to have 
anything but the deepest respect for their work.
    In addition I wish also to state that criticism of the Mexican 
Government and the minority of Mexican criminals should not be mistaken 
as criticism of the Mexican people. On the contrary it is my belief 
that the People of Mexico suffer in ways that we could not imagine at 
the hands of a violent Drug Trafficking Trade on the ascendancy and a 
crumbling judiciary that is unable, and often times unwilling, to 
deliver justice.
    I am also not here today to say that the ``time has come'' for us 
to chart a new course--to develop a more comprehensive policy with 
respect to the Mexican situation. That time was upon us many years ago. 
To those of us in Law Enforcement, none of what we see today in Mexico, 
is new. What has changed however is the intensity of the problem.
    I can not address the enormous demand for drugs in the United 
States that drives the engine of this criminal enterprise with 
seemingly unlimited amounts of cash. I will leave that to others more 
qualified. To those who say this is the root cause, I would only say 
back to them that it is nearly impossible to raise a youngster anywhere 
in the United States today and not have the daily fear that your kid 
will succumb to the ever-present street trade. I'm speaking more as a 
father now than a retired law enforcement official. I believe we bear 
great responsibility for this as North Americans. I do not believe 
however that we can slow this phenomenon down in any appreciable manner 
when we have, at our border, such a wide open and uncontested safe 
haven for major drug trafficking.

                        The Situation in Mexico

    The Mexican Government Facilitates The Traffic--Every indicator now 
and over the last twenty years reveals that the Government of Mexico 
consistently works together with the Major Drug Trafficking Families 
seeing to it that the drugs, either home grown or shipped up from South 
America, are off loaded securely , protected, shipped cross country 
under convoy, stored and safely transported to our border. The oft 
asked questions of exactly what the definition of Government of Mexico 
(GOM) involvement should be--or in other words when is ``official 
involvement'' official--remains open for debate in some circles. The 
Institutional Revolutionary Party (PRI) is at the core of the problem. 
Political shifts within Mexico show some potential for change in the 
future providing these new participants in Democracy do not view their 
country, as have the PRI in the last sixty plus years, as a ``food 
source''.
    The Mexican Judiciary Is Bankrupt--The Federal, State and local 
police, together with the prosecutors and judges are in the ``pocket'' 
of the Trafficking Families. This guarantees the absence of justice not 
only in matters relating to drug trafficking but most other criminal 
and civil cases. The Mexican people are the first to suffer under this 
phenomenon. Entry level Police recruits are not generally paid a living 
wage and are often forced to purchase the position.
    The Mexican Military Is In The Soup As Well--The Mexican Army and 
Navy have been frequently called upon by the Drug Trafficking Families 
for assistance over the past twenty five years. It was no surprise when 
Gen. Jose Gutierrez Rebollo turned up in the employ of Amado Carrillo-
Fuentes. Gen. Rebollo has further outlined GOM Military involvement 
while under investigation stemming from his arrest some months ago. The 
GOM Military has a strong core of patriotic and professional personnel 
that are attempting to stem this tidal wave of corruption.
    U.S. Policy--While the USG has prioritized measures against Drug 
Trafficking, what ultimately develops in practice reveals that Economic 
and National Security Issues almost always overtake the Narcotics 
question. Over time this has been partially responsible for the 
uncontested and systematic penetration by the Drug Families of the GOM 
leading to the degradation of vital Mexican institutions. We suffer 
from the phenomenon of ``always being in a huddle and never running a 
play.'' High Level Contact Group, U.S. Mexico Binational Commission, 
Senior Law Enforcement Plenary Group, technical and ``consultative'' 
groups, Threat Assessments etc. fill many a bureaucrat's day while 
nothing of substance materializes. Law Enforcement by committee is the 
rule. Gridlock is the result.
    The Drug Families--It becomes painfully obvious that Mexican 
Trafficking Families are in control of their destiny when the single 
most significant law enforcement event of this year in Mexico is the 
death of the most important kingpin at the hands of his plastic 
surgeon. Those within the law enforcement community, on both sides of 
the Border, will confirm that the Drug Families of Mexico are as 
powerful and unimpeded as ever, quite possible at their zenith.

                            Recommendations

    Develop A Long-Term Plan--In a partnership with Mexico, the U.S. 
should develop a plan that spans Administrations and elections. We have 
waited too long to solve this problem and so the remedy will require 
years of repair. Much of the new legal framework being developed at 
this time is an important step. Institution building is vital and 
probably the first and most important step. Short term disruptive 
operations should be designed and implemented while the laborious task 
of rebuilding the Mexican Judiciary is underway. Small insignificant 
teams, which are being developed at this time, will have little or no 
impact.
    Stay The Course--The U.S. must have a 2, 5, 10, 15 and 20 year 
planning cycle. Mexico must establish the institutions, fund salaries 
and expenses, train and retain a professional cadre, and strictly 
enforce internal security and discipline. The U.S. must be prepared to 
train and assist for the long haul. The order of this procedure is most 
important.
    Demand True Measures of Effectiveness--Progress should not be 
measured by how many successful high level meetings take place over the 
course of a year but rather how much of the Major Trafficker 
infrastructure has been dismantled.
    Develop a U.S. Policy That Authentically Includes The Narcotics 
Issue--Holding the GOM to an international standard of behavior on the 
narcotics question will not destabilize Mexico. Further progress on the 
part of the Mexican drug families to penetrate the Government of Mexico 
institutions will.
    Once again, I am here as a private citizen. My years in Federal Law 
Enforcement, together with the valuable insights of my colleagues in 
all walks of this work, have led me to believe that while the picture 
is grim a solution can be had. If we continue to wait, this crisis will 
only worsen.

    Senator Coverdell. Well, we appreciate your testimony.
    Dr. Godson, if we could turn to you.
    I tell you, Chairman Grassley is going to take over for me 
in a few minutes, as we shift back and forth between our two. 
Let me just make an assertion, and let Mr. Ferrarone respond to 
it while you are here and I am here. I have to say that the 
concept of managing another country's infrastructure strikes me 
as a very high hurdle. And I do wonder about having that have 
been our priority.
    In other words, you fight battles from the high ground, the 
high ground is the ground you control. We control the domestic 
continental United States. We do not control Mexico. And for 
the life of me I cannot quite imagine how we redesign their 
judiciary and redesign their police force and redesign their 
economy. And I am wondering if--and I am not saying we turn 
from that effort, but if we make it increasingly difficult to 
get here and to operate here, where we do control this 
judiciary, we do control this police force, if we get that 
done, making it more difficult for them to use us as a market, 
you begin to affect the economy of that product.
    And I am wondering if we have got the cart the horse turned 
around here. Let us get our job done. And if we get out job 
done, it is making their job, in terms of trafficking, much, 
much more complicated and less lucrative. And then, in the 
meantime, we keep trying to nurture the system. But the 
sovereignty issue, and every time we try to interfere, it is 
viewed as an intrusion.
    What is your general comment to that?
    Mr. Ferrarone. Well, a lot of the questions that I heard 
earlier today were on things that only the Mexicans can do. And 
I just want you to stop and think for just--let me give you two 
quick examples. Two very important parts of successful 
prosecution in law enforcement. One is that if somebody is on 
surveillance, they see a bad guy do something, you write a 
report, you put a report in a case file.
    Second, when you make a seizure, you obtain evidence. It 
gets locked up in a vault. Now, think about a police force that 
has neither. And then we are asking them, we want you to 
prosecute people. They do not have evidence. They cannot hold 
on to it. That evidence is worth a fortune.
    Or we ask them to go find somebody. They have no files to 
go to. They have no data base.
    I think, in the long run, we will be faced with having in a 
partnership role, and I stress the word ``partnership,'' 
because this political will thing is really what this is all 
about. In the long run, we are going to have to face this. We 
are going to have to get in there in a partnership. Because, 
after all, the cash-flow that drives the whole equation still 
comes from here. We are going to have to do that.
    I agree with you. You know, if you slow down the kids, 
tighten up the border, work major operations within the United 
States, then all of a sudden there is no market.
    Senator Coverdell. I think the problem you are talking 
about, and then I will turn to you, Dr. Godson, is the long-
term piece of it. One thing that I have taken some exception 
with General McCaffrey about, and you alluded to it, meeting 
and meeting and planning and planning, and something that is 10 
and 20 years long. I think it has to be done. But if that 
becomes the mode, if there is not a first quarter, second 
quarter, third quarter or fourth quarter, it is just awfully 
hard to make people play.
    Mr. Ferrarone. It is that idea of finding a whole bunch of 
smart people, and they are on the football field, and they are 
running side to side. And they are running around obstacles 
that, by the way, are set up by us, and then there is the 
occasional trafficker obstacle. And when you get in with these 
folks, you find them exhausted, you find some of them so happy 
because they have actually overcome three or four of these 
obstacles, not realizing that they are running sideways.
    Senator Coverdell. Well, I appreciate it very much. Dr. 
Godson.

   STATEMENT OF ROY GODSON, PH.D., PROFESSOR OF GOVERNMENT, 
GEORGETOWN UNIVERSITY, PRESIDENT, NATIONAL STRATEGY INFORMATION 
                             CENTER

    Dr. Godson. Thank you, Senator, for this opportunity.
    I guess I find myself supporting much of what the United 
States and Mexico have tried to do in recent years. I have had 
the advantage of being able to travel along the border and to 
spend many hours talking with Mexican officials, as well as 
many nongovernmental officials. And much as I have praise for 
what has been attempted so far, I do share many of the concerns 
of my co-panelist.
    I also share your concerns. And I was very much encouraged, 
as a citizen, and I think many other people would be very 
encouraged to see the thought that you put into the critique of 
American policy that you expressed earlier in the afternoon--
you just mentioned just now.
    My testimony dwells on two major points. I am going to skip 
very fast over number one and come to number two.
    The first part concerns the strategy. I agree that we need 
a strategy. It is not clear what our goals are in the long or 
the medium term. I agree, further, that we have not set up 
measurement yardsticks. We heard expressions about yardsticks, 
but we have so far seen few. And the yardsticks that we have 
are not adequate to the job.
    I think the United States and Mexico talk in terms of 
strategy and goals and measurements, but we see relatively 
little measurement. We need a strategy in Mexico. We need a 
strategy in the United States. And we need joint strategy. And 
we do not yet have one.
    But let me focus, rather, on one specific aspect of U.S.-
Mexico cooperation. And this is an area, Senator, which has 
received almost no attention. I am surprised that after we have 
learned the lessons in the United States and elsewhere that we 
cannot leave major problems to the government alone, we 
continue to talk exclusively about the role of government.
    It is neither feasible nor is it desirable to leave our 
major problems to government.
    The ONDC report says almost nothing about the role of the 
nongovernmental sector and the private sector. We are relying, 
again, on government to solve all the people's problems. 
Government cannot and should not undertake this burden alone.
    Let me sketch out an approach that could be taken. And it 
could be undertaken in the medium term, as opposed to just the 
long term, which Senator Coverdell addressed earlier. That is 
to say, we need to develop and to foster what I will call a 
culture of lawfulness on the U.S.-Mexican border.
    By a culture of lawfulness, I am referring to something 
that we take for granted in much of the United States. That is, 
that we should not rely on the government and law enforcement 
to be the sole measure of how and why we follow the law day in 
and day out in our lives. We follow the law because we accept 
that the law is just. It is not perfect, and the system 
enforcement is not perfect; but, basically, the system provides 
us the best means possible to resolve our differences.
    That is what I call a culture of lawfulness. It guides our 
behavior every day for most of us.
    Now, what I am talking about here is developing a culture 
of lawfulness in an area of the world where such culture is 
lacking. How can you go about developing such a culture?
    There are many ways. One can address culture writ large. As 
Senators you do this every day. You talk about various aspects 
of American life, and you sometimes make suggestions, sometimes 
criticisms about films and books and other mass media which 
influence large numbers, particularly of young people. But 
there is one particular way in which a culture of lawfulness 
can be developed, and we have some very interesting examples 
abroad of people who have to struggle against organized crime 
and drug trafficking who have been reasonably successful.
    And that is to make this culture of lawfulness specifically 
school based. Almost all children--not all, unfortunately--but 
almost all children attend primary and many attend secondary 
school.
    The idea would be to institutionalize school-based 
education concerned with a culture of lawfulness. Senator 
Coverdell addressed children and parents and so on.
    Now, people in Hong Kong, faced with massive corruption and 
organized crime that came from mainland China, particularly in 
the fifties (the most important of which were the Triad 
organizations), instituted a major education, a 6-through 18-
year-old program, and a program for parents, that has been 
remarkably successful in Hong Kong.
    It is showing some signs of wear; but, on the whole, one 
would say this is a remarkably successful program. It is not 
the sole approach. You do need a law enforcement approach. You 
do need a strategy. You do need honest policemen and a system 
to maintain honest policemen. But also the people of Hong Kong 
did not rely on the government exclusively to do this. They 
relied on community and school based programs, albeit assisted 
by the law enforcement authorities.
    The people of Sicily have done the same thing. Since the 
1980's, there has been a massive cultural and school based 
movement that is anti-Mafia. You have elected officials, the 
Mayor of Palermo and the Mayor of Corleone, and I can provide 
other Sicilian examples, of people who have been elected on an 
anti-Mafia program. They are up for reelection right now, and I 
suspect most of them are going to win.
    And the schools in Sicily, the schools in Hong Kong are 
major instruments for the development of a culture of 
lawfulness amongst young people.
    Senator Grassley. Don't you know, in American education 
today, that it is just a terrible thing for somebody to decide 
that something is right or wrong?
    Dr. Godson. I hear in some places that is the case.
    Senator Grassley. And that you just should not teach people 
to be judgmental?
    Dr. Godson. This is sometimes true, Senator. But I am glad 
to say there are some programs which could be expanded.
    Senator Grassley. Well, it is a major problem within our 
educational system.
    Dr. Godson. It is. But there are a number of promising 
initiatives.
    Senator Grassley. And I am not disagreeing with you.
    Dr. Godson. Right.
    Senator Grassley. If I sounded like I was disagreeing or 
finding fault with you, I am just saying it is an attitude that 
we have developed in our society that is going to be awful hard 
to overcome.
    Dr. Godson. Right. It is. It will be hard. And even in Hong 
Kong this is becoming a problem, whereas it was not a problem 
with the previous generation.
    But recently I attended a meeting in Mexico City, which was 
supported, I must say, by one major U.S. agency, the United 
States Information Agency, in which there was a discussion 
about this. And a number of senior Mexican officials, 
particularly from the Attorney General's office, came along and 
supported this idea of instituting school-based educational 
program along this line. It was a very encouraging meeting. It 
was a beginning. But, so far, there is no real plan in the 
United States or in Mexico to develop a culture of lawfulness, 
whether you use the schools or not.
    And if you look at the ONDC report, there is not any 
mention of it. Somehow it claims that government is going to 
solve this problem all by itself.
    This is inadequate. We do need a law enforcement approach, 
but we do need to complement it. Otherwise, 2 or 3 years from 
now--or 5 or 6 years from now--we will be here again saying how 
many people we have trained, how many eradication programs we 
have, and how many seizures we have made. I could not agree 
more with my colleague that unless the Mexicans develop a civil 
service and a career service and protect their people, both 
physically and the families of those killed in the fight 
against narco-trafficking, training alone will not be 
sufficient.
    Thank you very much.
    [The prepared statement of Dr. Godson follows:]

                  Prepared Statement of Dr. Roy Godson

    Thank you, Mr. Chairman, I appreciate the opportunity to present my 
views on current US and Mexican efforts to counter organized crime and 
drug trafficking.
    My name is Roy Godson. I am a professor at Georgetown University, 
where for more than twenty-five years, I have offered courses on 
governance, security, intelligence and law enforcement. I am also 
President of the National Strategy Information Center, Inc. (NSIC), a 
non-partisan public policy institute here in Washington, created in 
1962. I have served as a consultant to the National Security Council, 
the President's Foreign Intelligence Advisory Board, and agencies of 
the United States government concerned with intelligence and law 
enforcement. This work has enabled me to observe, and in a small way, 
contribute to the work of these organizations. My testimony today, 
however, reflects my own views, and I am here in my personal capacity.
    In recent years, I have consulted extensively with police, 
intelligence, and security services in many countries. I have also 
traveled many times to the region that is the focus of these hearings, 
spending weeks talking with and observing representatives of 
nongovernmental sectors of the societies in these regions. My research 
has also benefited from many scholars, journalists, and government 
officials who participate in NSIC programs and projects, such as the 
Project on Global Ungovernability and the Working Group on Organized 
Crime.
    Organized crime, corruption, and particularly drug trafficking, 
threatens the quality of fife in many parts of the world. Some of the 
reasons for the growth of this threat--economic, political, and 
cultural--are not new. Others emanate from recent developments--the end 
of the Cold War; the fragmentation of states; mass movements of people; 
as well as from the increasing globalization of trade, finance, 
transportation, communications, information, and culture.
    The result is that criminal enterprises and their corrupt allies, 
inside and outside government, are increasingly undermining human 
rights and civil liberties; threatening legitimate business; and 
distorting economies and economic development. They are also taking 
advantage of globalization and more open borders to pursue lucrative 
opportunities abroad and to elude or circumvent local and national 
criminal justice systems and law enforcement.
    Increasingly many governments, especially in the Americas, as well 
as global and regional international bodies, such as the United Nations 
and the Organization of American States, now recognize that regional 
organized crime, corruption, and drug trafficking are threats that 
require transnational governmental and nongovernmental responses.
    The major governmental response in the region so far has been to 
focus on enhancing national law enforcement capabilities and 
coordinating the responses of regional and global enforcement bodies 
and criminal justice systems in a manner consistent with human rights 
and civil liberties. Much progress has been made in these areas. 
However, there is still a long way to go before this regulatory 
response is adequate to the challenge.
     Specifically with regard to the US-Mexican response, I believe, 
even without knowing the full extent of current cooperation, that 
significant progress has been made at the governmental level, but that 
more, much more, remains to be done. On the positive side, perhaps the 
most important step is the demonstrated cooperation among high level 
officials on both sides of the Border. Their will to seek methods of 
cooperation and to begin to develop coherent strategy even in the face 
of political risk and criticism is very encouraging. Second, the US 
executive branch has demonstrated the commitment to devote significant 
resources and attention over a sustained period, and many Mexicans have 
demonstrated that they are willing to risk their most precious 
possessions, their own lives, and the fives of their families, by 
identifying with the fight against narco trafficking. Several hundred 
already have paid the price and thousands of Mexican officials and 
their families five daily under the constant threat of the most brutal 
violence for standing along side us.
    Third, there have been many untold improvements in the fight 
against narco trafficking as a result of equipment, training, and 
information sharing with US and Mexican officials.
    On the other hand, there are worrying aspects to the announced 
cooperative efforts. Perhaps most importantly, after a several years of 
serious cooperative efforts, little real strategy can be perceived on 
the US side or the Mexican side, or in joint efforts. By strategy, I am 
referring to the identification of specific goals, the calibration of 
reasonable means likely to achieve these goals, and specific benchmarks 
that are indicative of success and enable us to hold to account those 
who develop and implement the strategy.
    The Office of National Drug Control Policy (ONDCP) Report presented 
to Congress in September is long on generalities of success but 
established few specific standards for success. Are seizures of 
narcotics, arrests of individuals, increased resources and training 
programs enough to measure the adequacy of the very general, if 
laudatory, objectives stated in the report?
    On the other hand, some benchmarks advocated by others may not be 
as useful as their proponents intend. For example, stopping nearly all 
the flow of narcotics into the US from Mexico and elsewhere in the next 
three or four years is unrealistic. Similarly, benchmarks such as the 
extradition of suspected narco traffickers, the ability of US law 
enforcement to carry firearms in Mexico by public agreement with 
Mexican officials, are not adequate to the task of developing, 
implementing and evaluating strategy.
    Now, sometimes there have been important successes in binational 
cooperation efforts against organized crime, even without carefully 
delineated strategy and benchmarks--for example the cooperative efforts 
of the Italian American Working Group in the 1980s. However, it is 
difficult for this observer to see how the courageous, well 
intentioned, but disparate efforts of US and Mexican officials over the 
next few years will lead to the kind of results that we are led to 
believe will be forthcoming in the ONDCP Report. Will success take 
longer? How much longer, and how will we measure success?

                   Furthering A Culture of Lawfulness

    There is, moreover, a second and complimentary approach to fighting 
organized crime and trafficking, not mentioned in the ONDCP Report--
securing the attention and mobilizing the resources of the 
nongovernmental sector throughout this region. It is neither desirable 
nor feasible to leave the increasing problem of crime and corruption 
exclusively to governments and law enforcement bodies. There are not 
enough law enforcement resources available and we would not want the 
kind of society that would have the requisite police, surveillance, and 
penal resources to rely exclusively on such an approach. Rather, civic, 
business, labor, religious, social, and, educational organizations all 
have a role to play in mitigating, if not eliminating, one of the 
scourges of contemporary world society.
    There are many ways in which nongovernmental organizations and 
civic society can help. But one of the most important is fostering a 
culture of lawfulness. Indeed one of the bulwarks protecting and 
enhancing democratic society is such a culture. The average person must 
come to believe that the legal norms and systems for changing, 
administering, and enforcing the laws are basically just, and that they 
enhance and protect the quality of life. Without such a culture, which 
day in and day out influences expectations and behavior, no government 
or law enforcement system can function effectively.
    How to bring about and further such a culture is not self evident. 
There are many potential paths and techniques. Some are addressed by 
the culture writ large. Some are strategically focused on particular 
segments of society and particular institutions that play a decisive 
role in influencing society. With regard to the former, popular music, 
books, films, video games and the national celebration of particular 
heroes and acts can play a significant role in influencing culture. So 
far, in recent years, they have done little to advance the culture of 
lawfulness that can serve as a major barrier to drug trafficking and 
the costs and evils associated with it.
    With regard to strategic sectors--civic, moral, ethical, religious 
and legal education, particularly of young people, and through them, 
their parents and the local community, would appear to be one of the 
most promising avenues. Reaching young people, as is well-known to 
educators and parents, usually is not easy. There are a variety of 
factors that affect the attitude and behavior of young people--family, 
peers, experiences, and civic organizations. All seem to be important 
and all need to be involved in furthering the culture we seek.

                   The Role of School-Based Education

    However, the major players in the US-Mexican dialogue devote very 
little attention to the role of formal education in the requisite 
culture.
    Fortunately, most but not all young people attend primary school 
and more and more of them are completing secondary school. Moreover, 
schools are amongst the most well-endowed civic organizations in any 
society--they are located in every city and town, and in most villages 
throughout the world. They have a building. They have teachers, who are 
often respected not only by children, but also by parents and community 
leaders. Most schools have books, curricula, and more and more they 
have sophisticated technology.
    Schools not only have formal curricula and instruction, they also 
have the facilities and opportunities to organize extra-curricular 
activities. Primary and secondary schools probably are amongst, if not 
the single most important civic organization that can contribute to 
furthering a culture of lawfulness, especially in the border regions 
most at risk. This is not yet widely recognized, but it is coming to be 
increasingly accepted on both sides of the border.
    Now just how can schools that accept this role go about this 
process? Several approaches to content have been developed. All of them 
appear to be promising. However, none has yet been shown to be so 
effective that it is clearly the best--the most effective method of 
furthering a culture of lawfulness.

                           Diverse Approaches

    Let me summarize these approaches. I will emphasize their 
diversity. However, they are not mutually exclusive. In reality, there 
are important similarities in these approaches and they sometimes 
overlap.
    One approach is to stress broad civic or citizenship education. The 
focus here is to develop good citizens. Good citizens, who understand 
that they have an opportunity and obligation to participate in the rule 
making and governing of society, will accept a culture of lawfulness, 
and hence they need no special focus on crime and corruption.
    A second approach is to focus on legal socialization, particularly 
the legal education of young people. Here the approach is focused on 
teaching about the law, legal rule making and enforcement. Until now, 
in these programs there has been little focus on the specifics of 
organized crime and corruption.
    A third approach is moral education--teaching children about their 
opportunities and obligations to make moral and ethical decisions that 
daily affect their fives and to draw implications from their decisions 
that will pertain to legality and corruption.
    Although there are a number of school-based education programs 
focused on specific criminal behavior--drug use, juvenile delinquency--
so far only a few programs have sought to deal with substantive threats 
emanating from local, regional, and transnational crime and corruption.
    By organized crime, we are referring to individuals who have an 
ongoing working relationship with each other, who make their living 
primarily from a variety of profit making, covert activities that most 
states deem criminal or illegitimate. The organization can take various 
forms--from tight vertical hierarchies with life long commitments, to 
much looser, more ephemeral ongoing horizontal relationships. Organized 
criminal groups maintain the option to use or exploit the use of 
violence and corruption and do not accept the norms of the community 
which prohibit the use of these instruments.
    By corruption, we are referring to the misuse or illegitimate use 
of institutional power--public and private--for personal profit and/or 
political gain. Although corruption exists without the presence of 
organized crime, criminal narco trafficking enterprises on a local or 
national level cannot long exist without the corruption and 
collaboration of public and private sector officials.
    School-based education that seeks to help tackle these problems 
requires first a commitment on the part of national and local school 
authorities on both sides of the border. This would mean a consensus 
that part of valuable primary and secondary school time--either in the 
formal curriculum or in extra-curricular hours--should be devoted to 
the subject. Second, special curricula would have to be adopted from 
the few pioneering projects that already have been tested and used, 
focusing on the causes of organized crime and corruption; the evil 
effects on society iff the short and long terms; and how, as 
individuals, children and society as a whole are required to cooperate 
nationally and regionally. Finally, and perhaps most important, 
teachers would have to be trained to teach such a curriculum. There 
would have to be an initial period of training in the new curriculum, 
followed by periodic updates. Here, of course, there is a role for 
professional law enforcement and judicial personnel. They not only 
could assist teacher training, enriching the training with their 
personal knowledge and experience on local crime and corruption, they 
also could serve as resource personnel in the classroom or 
extracurricular programs.
    Whichever content and pedagogical approaches are chosen, and 
whatever the levels of educational skill and commitment in any given 
society, we should not expect school-based education to assume the full 
burden of developing and furthering a culture of lawfulness. School-
based education nevertheless may be one of its most significant 
ingredients.
    Furthermore, we should not expect this approach to bring results 
overnight. However, we should instead immediately begin to build on 
very recent governmental and nongovernmental initiatives to further a 
multi-year dialogue on this subject. We should examine school-based 
programs in various parts of the world, and learn what we can from 
these experiences. The US and Mexico should consider what it will take 
to mobilize communities on both sides of the border to support 
effective school-based programs. Last week, educational specialists, 
curriculum planners, and government officials from various parts of the 
world met in Mexico City to consider what kinds of resources, 
administrative support, curricula, and teacher training needs will make 
a real difference. They did not do this with the expectation that they 
could ``solve'' the problem. Rather, they began the dialogue in the 
expectation that furthering a culture that will help resist the inroads 
of crime and corruption.
    Some Mexican governmental and nongovernmental leaders were 
supportive of this initiative. Similarly, some senior U.S. officials, 
particularly in the United States Information Agency and in the Bureau 
of International Narcotics and Law Enforcement Affairs of the 
Department of State, as well as in some American nongovernmental 
organizations such as the American Federation of Teachers, AFL-CIO, 
echo this sentiment. Unfortunately, the broader role of a culture of 
lawfulness was omitted in the ONDCP Report to Congress. And while I 
believe the ONDCP initiatives are very important, and even more can be 
done within the general parameters laid out in the Report, by 
themselves, they are insufficient. We need a cultural barrier to 
organized crime and corruption. We cannot place the full burden 
exclusively on the military, intelligence, and law enforcement 
agencies, as many leading professionals in these in agencies, on both 
sides of the border, would affirm.

    Senator Grassley. I assume your comment about a culture of 
lawfulness was applicable on both sides of the border?
    Dr. Godson. Yes, it is. And I travelled the border 
recently. And I met with approval for this idea from almost 
every single law enforcement official on both sides of the 
border. They said they could not hold the line on their own, no 
matter how much money we threw at the problem. In fact, they 
said--they asked--if I had one message in Washington to give, 
it was change the school system, change the culture, and we 
will be able to hold the line. There was almost unanimity on 
that point.
    Senator Grassley. I know it is late, so I will only--unless 
you give long answers, I will only keep you a few more minutes. 
Let me start with Mr. Ferrarone.
    You mentioned holding Mexico to a true standard of 
international behavior. What do you think is the best way to do 
that?
    Mr. Ferrarone. Well, I heard some discussion today about 
bringing in other countries. There is, as you know, a very 
strong cultural bias against a North American. And it is built 
in at a very young age to their system. I just feel that the 
folks that we negotiate NAFTA and that we talk national 
security issues with are oftentimes the same folks that have 
been fooling around with the drug traffickers.
    Senator Grassley. So at the highest levels of government?
    Mr. Ferrarone. Well, there are--I am not saying that--see, 
what happens is, we find out information during a current 
regime, but we tend to ignore it, and we will attack the 
previous one, because they are out. And that is kind of what is 
going on right now.
    I am not going to say how high it goes up, because I do not 
know, but it is way up there. It is way up there if you 
understand the design of the PRI as a political organization. 
The architecture of the PRI is to reach down and use a lot--
anything that is making money within the borders of Mexico is 
viewed as a food source for them. So the answer is, I think, 
from our perspective, from our side--and I get this privately 
from Mexican officials--is that you Americans, first, you do 
not understand what is going on; second, turn up the heat on us 
a little bit. You will be surprised what you get.
    And I do not think our policy with respect to Mexico blends 
the narcotics issue in to the--you know, we are very strong on 
the economy and we are very strong on the national security 
interests. However, from my perspective, the narcotics issue 
has now started to link up with some of the national security 
things.
    So I think we have to change here, in the United States, 
and have a stronger private--it does not have to be public 
diplomacy--but it has to be a much more serious policy, and it 
must have measures of effectiveness, and not preparing a paper, 
not agreeing to do something that we find out 5 years from now 
never happened, not giving them a whole bunch more helicopters. 
We have given them hundreds of planes--hundreds--for the 
narcotics fight. They are out there.
    Senator Grassley. Is the certification process a useful 
tool, and should we keep it as we know it now?
    Mr. Ferrarone. It becomes an extremely nationalistic issue 
on the Mexican side of the border. That is something right now 
that the politicians, or those that are involved with the 
traffickers, can pull up as a shield around them. I think it is 
a healthy, once-a-year drill. It is clear, when we do things 
like we did with Colombia or Burma, and we handle Mexico 
completely different, that the application of that law is not 
evenhanded.
    I did not answer your question, I know.
    Senator Grassley. Well, it is not an easy one to answer. 
Well, I think you did answer it in a sense, if I could take out 
just a small portion that you just said; that it is a healthy 
process to go through once a year. And that is the purpose of 
it.
    It is interpreted by both people in this country and other 
countries as something directed just toward us judging whether 
or not that country is doing something according to helping 
them meet their commitments to us in the war on drugs. But it 
also is our own process working.
    Mr. Ferrarone. Well, it goes back also to your first 
question to me: How do we apply pressure? What is the world 
standard for--if Mexico wants to be considered in that group of 
industrialized nations that can really stand and walk on its 
own, which it can and should, then they have to be held 
accountable for these kinds of things.
    Senator Grassley. Last question to you, unless you want to 
join in answering others. In your experience of dealing with 
the drug issues, do you see any signs of hope that the U.S.-
Mexican relationship--or in this relationship--that would led 
you to believe that we can make progress, that cooperation can 
work despite this corruption that we have talked about?
    Mr. Ferrarone. General McCaffrey, I believe, is on the 
right track in terms of the long-term planning. In terms of how 
we do business with Mexico and in what order we do these things 
and how we do it, I think we have got to be very, very careful. 
Because there was a lot of optimism in here. And those of us in 
law enforcement have seen this happen over and over again 
within Mexico. And it is a cycle that you could actually chart 
on a graph, to show how the peaks and the valleys go with our 
relationships and how the traffickers fit in there. And it has 
repeated. For the 28 years that I was in the business, this is 
just a repeat of what I saw 28 years ago.
    Senator Grassley. Dr. Godson, your written statement 
identified a note of difference between cooperation on the one 
hand and strategy on the other, and that the report submitted 
to Congress is long on generalities on the results of 
cooperative efforts, but has few specific standards for 
success. So my question is, specific standards that you believe 
should be presented in this strategy, and how would you measure 
these standards?
    Dr. Godson. That is a very good question, Senator. And it 
is a better question than I can give you an answer to. I just 
want to reemphasize what you discussed with General McCaffrey 
and with the administration today. They claimed they were going 
to produce a number of standards. And we need to look at those 
standards very carefully.
    I do not have such a list of standards, and I know of no 
one who has such a list. But I share the concern that without 
these standards, it will be very difficult to judge 
effectiveness and people will become rather disillusioned and 
tired, as they see that we claim success and yet the drugs keep 
flowing.
    I just want to encourage those who are pushing for 
standards to keep pushing. I think sometimes standards are too 
high and would be unrealistic. It would be unrealistic, in my 
view, to expect, in 3 or 4 years, to eliminate 80 percent of 
the drugs coming into the United States. But I just think it is 
worthwhile having more specific standards than the 
administration is currently using. And that is why I am pushing 
on the standards question.
    Senator Grassley. Considering the sovereignty of Mexico and 
the respect for that, and that it might have its own reasons or 
motivations for working with Washington in the war on drugs, 
why do you believe that Mexico is cooperating with the United 
States?
    Dr. Godson. Viewed in historical perspective, those who see 
a change in attitude in Mexico, I think are correct. At the top 
and in many lower levels, there are people who really care, who 
are willing to lay their lives on the ground, even though the 
likelihood of protection for them and their families is almost 
nonexistent.
    This year alone, over 200 Mexican policemen have already 
been killed, and more are certain to follow.
    Now, it is true, a certain percentage of these policemen 
are corrupt and are involved with narco-trafficking. But a 
certain percentage are not. And so when you see policemen at 
various levels, with little protection and little salary, being 
willing to do this, and you see medium- and high-level 
officials being willing to put in long hours and dedicate 
themselves, then you have to recognize this change. And their 
willingness to accept cooperation with us--details in the 
McCaffrey report--about the extent of cooperation inside 
Mexico, would be, I think, something that most countries, under 
many circumstances, and certainly Mexico in the past, would 
have refused to accept, and certainly to publicly acknowledge.
    So, from my many, many hours of conversations with Mexican 
officials under very social circumstances, sort of when they 
let their hair down, I would agree with the conclusion that 
they are beginning to cooperate with us in an important way.
    However, we have a very long way to go. And just their 
willingness to cooperate is not adequate. We have to develop a 
much more sophisticated, coherent strategy. Our strategy is so 
disparate, without good measures of measurement, that at the 
current rate, I have to agree with my co-panelist that we will 
not succeed unless we both change our governmental strategy and 
our nongovernmental approach, which we have not even begun to 
think about.
    Senator Grassley. I would close. I do not have any 
questions. I would close with two things. Obviously, I thank 
you for your participation, and particularly for waiting the 
long hours. Three-and-a-half hours of hearings is a very long 
hearing in Congress.
    Second, I think each of you did emphasize something that I 
believe very strongly: that this cannot be just a government 
effort and, for sure, not just a Federal Government effort. But 
even if you take Federal, State and local governments together, 
and we rely just upon government, it does not matter whether it 
is rehabilitation or education or even law enforcement, we will 
lose this war. It is only when we get all segments of our 
society--and the government cannot do much more than give moral 
leadership to this--but churches, families, educational 
institutions, lots of community and nonprofit organizations, 
and probably a lot more.
    Until we get this collective effort and a collective 
judgment by all elements of American society that drugs are bad 
and we are in a crisis situation, and get everybody pulling 
together, we are not going to win this war. I feel that we can 
win this war. I think that America has, maybe too late 
sometimes, observed a crisis and pulled together to overcome 
that crisis. I do not think we have reached that point yet. And 
we do not even hear enough from political leaders in America 
about how serious this is.
    So we have even got some education at that level of 
political leadership, to make sure that we impact the rest of 
society. But, hopefully, we move in that direction and we win.
    Thank you very much for contribution. I am going to keep 
the record open, because you might get some questions in 
writing. We would appreciate, in a couple of weeks, if you 
would have those responses back.
    Senator Grassley. Thank you all very much.
    [Whereupon, at 5:35 p.m., the hearing was adjourned.]


                            A P P E N D I X

                              ----------                              

              Additional Material Submitted for the Record

           Prepared Statement of Senator Russell D. Feingold

    The massive amount of illegal drugs moving into this Nation from 
Mexico undoubtedly poses a significant threat to both the U.S. and 
Mexico. There can be no question that the bilateral anti-drug 
relationship between the United States and Mexico is very complex and 
challenging for the people of both nations. However, it is essential 
that both of our countries work tirelessly to gain the trust and 
commitment necessary to deal with this pressing problem. While we in 
this nation must work diligently to combat drug abuse within our 
borders, the influx of illicit drugs and narcotics from Mexico must be 
stopped. This result will only occur with the full cooperation of the 
Mexican Government.
    In my view, the status quo in regard to Mexican anti-drug efforts 
is unacceptable. For this reason I joined with my colleagues, including 
Senator Feinstein, in urging decertification of Mexico earlier this 
year. After the President chose nonetheless to certify our southern 
neighbor as ``cooperating'' in anti-drug efforts, I supported the 
bipartisan response offered in the Senate by Senators Feinstein and 
Coverdell because I believed that it was the only legitimate 
opportunity to hold the Mexican Government accountable for their 
actions, or lack thereof. In my view, the burden of proof lies with the 
Government of Mexico.
    In reviewing the Mexican anti-drug efforts, one is confronted with 
evidence of rampant corruption, a continuing failure to extradite 
nationals, and a growing presence of a military which has historically 
shown scant respect for human rights. These factors, among others, have 
combined to allow the narcotics cartels to flourish in Mexico. As these 
drug dealers increase in number and strength they not only dominate the 
local communities in Mexico, they extend their operations into this 
nation, spreading their poison onto American streets in a deadly and 
unlawful version of free trade. Mexico may be a significant economic 
partner of the United States, but the current level of illegal drugs 
entering this nation unabated from the south is unacceptable.
    In the time since the most recent certification decision was made, 
the Administration has taken steps to engage the Government of Mexico 
in a dialogue to address this most pressing problem. I want to commend 
General McCaffrey for his dedicated efforts in this regard and look 
forward to reviewing his testimony today as well as the report that he 
submitted to Congress on this issue just last month. In my estimation, 
the bilateral relationship between Mexico and the United States in 
regard to anti-drug activities is at a critical juncture. In the not 
too distant future, the Administration will again evaluate the Mexican 
response as part of the certification process.
    While some argue that there is reason for optimism in this area, 
nothing less than tangible results against the drug trade and the 
powerful cartels which operate this illicit enterprise will suffice. 
Illegal drug trafficking poses a significant threat to citizens on both 
sides of the border and our efforts to respond to this threat will not 
be successful if delayed by further inaction and lack of commitment--on 
either side of the border.
    The weeks and months ahead will go a long way to determining the 
true status of bilateral U.S./Mexican anti-drug efforts, and I look 
forward to working with my colleagues on this issue of vital 
importance. I also want to thank the Chairman for holding this hearing 
as well as the witnesses for their time here today. I look forward to 
reviewing the testimony before the Committee.

                               __________
 Additional Questions Submitted for the Record to Barry R. McCaffrey, 
            Director, Office of National Drug Control Policy

                  Questions Submitted by Senator Helms

                    U.S. Border Interdiction Efforts

    Question 1. What are your plans for deploying technology (such as 
gamma ray truck and x-ray facilities) at each of the ports of entry on 
the Southwest border?
    Answer. The Customs Service is using large-scale non-intrusive 
inspection systems (mobile and fixed site) at major Southwest Border 
cargo processing facilities to improve the number and intensity of 
commercial cargo examinations. Currently, there are three large-scale, 
fixed-site truck x-ray facilities in operation at Otay Mesa and 
Calexico, California and Pharr, Texas.
    Having found this non-intrusive inspection equipment valuable, the 
Customs Service is in the process of acquiring five additional fixed-
site truck x-ray units for major cargo processing facilities along the 
border as indicated below.

                                                                        
                Truck x-ray locations                  Date of operation
                                                                        
Otay Mesa...........................................               8/95 
Calexico............................................               3/97 
Pharr...............................................              10/97 
El Paso (Ysleta)....................................              12/97 
El Paso (BOTA)......................................               5/98 
Nogales.............................................               8/98 
Laredo (Colombia bridge)............................               9/98 
Los Tomates (New border crossing scheduled for 3/99)               3/99 
                                                                        

    In addition to the fixed-site truck x-ray systems, Customs is 
procuring mobile and transportable commercial conveyance imaging 
systems to support layered technology examination operations. These 
mobile imaging systems will be utilized at Southwest Border ports of 
entry to enhance commercial cargo environment enforcement operations at 
locations that do not have fixed-site systems. Additionally, these 
mobile systems will be utilized at the ports of entry to enhance and 
augment commercial cargo enforcement operations. Currently, one mobile 
truck x-ray system is in use in Laredo, Texas. A second, enhanced 
version is under construction and is scheduled to be delivered to the 
Southwest Border in early 1998. In addition to mobile x-ray systems, a 
prototype transportable gamma imagery system designed for the 
examination of tankers is in use in El Paso, Texas.
    Customs is also installing a prototype passive potassium 40 portal 
detector that is scheduled to be tested at the Ysleta Port of Entry in 
El Paso, Texas, in January of 1998. This system was developed to detect 
nuclear materials but is also capable of detecting bulk shipments of 
marijuana.
    In addition to developing and procuring various forms of non-
intrusive inspection systems, Customs is implementing a computer based, 
advanced targeting technology through use of the Automated Targeting 
System (ATS) in Laredo, Texas.
    The Customs Service employs a wide variety of smaller scale 
technology in conjunction with the large-scale imaging systems 
indicated above. There are currently 17 stationary pallet x-ray systems 
for cargo in use on the Southwest Border. Customs Service officers 
utilize a wide variety of hand-operated technology to examine 
commercial conveyance including BUSTERS (density detection devices), 
fiber optic scopes (to examine tanks and confined areas/compartments), 
and laser range finders (LRFS) (used to determine the length of a 
conveyance to detect false walls and compartments.)
    In addition to the current and future non-intrusive technology 
advancements at Southwest Border ports of entry, the Customs Service is 
developing and testing participle and vapor detectors, biosensors, and 
higher energy x-ray systems for heavy cargo and sea containers, for use 
at Southwest Border ports of entry, as well high-risk sea and air 
ports.
    Question 1. (continued) Do we have adequate Customs enforcement 
personnel on the border today? What are the plans, if any, for 
increasing inspectors on the border?
    Answer. ONDCP has referred this question to U.S. Customs Service.
    Question 2. With respect to the importance of ``intelligence'' to 
identify contraband, do you think that Customs and other U.S. law 
enforcement officials should be allowed more routine contact with 
counterparts and others on the Mexican side of the border to gather 
this information? We have been told that these personnel have to clear 
all such contacts through our Embassy in Mexico City; is that correct? 
Would it strengthen border cooperation if such contact were 
decentralized?
    Answer. The United States Customs Service (USCS) and other U.S. 
organizations routinely coordinate with their Mexican government 
counterparts. The USCS, for example, is actively pursuing with industry 
cooperative programs that produce regular reporting on contraband.
    Regarding drug intelligence reporting, a 1994 Memorandum of 
Understanding between the Drug Enforcement Administration (DEA) and the 
USCS gives DEA exclusive authority when developing contacts, 
informants, or otherwise collecting drug intelligence in Mexico.
    It is important that investigations carried out by multiple law 
enforcement agencies be centrally coordinated. While it certainly may 
be possible to improve implementation, we would not support abandonment 
of central coordination.
    Question 3. Railroad cars are almost impossible to search, and 
Customs rail road facilities are insecure and inefficient. What 
measures will you be taking to address the extraordinary volume of rail 
cars crossing into the United States each day? What measures are being 
taken to make it easier to inspect containerized shipments?
    Answer. ONDCP has referred this question to U.S. Customs Service.

           Bilateral Border Task Forces/Organized Crime Unit

    Question 1. How many of these task forces will there be eventually? 
Where? How many are fully in place today? Where? What is the total 
complement of Mexican agents that will be assigned in all of these task 
forces along the border?
    Answer. There will be three Border Task Forces, with five satellite 
offices, located in Tijuana (with satellites in Mexicali, San Luis Rio 
Colorado, and Nogales), Juarez, and Monterrey (with satellites in 
Reynosa and Matamoros). Tijuana and Juarez are fully staffed. Monterrey 
is operational with 15 agents authorized and only eight currently 
assigned. The other seven agents should be vetted by June 1998. The 
total complement of Mexican agents that will be assigned the Border 
Task Forces will include: 70 law enforcement agents, plus 150 Military 
Special Reaction Forces, 50 in each of the three BTFS.
    Question 1. (continued) How many Mexican agents today have been 
fully vetted for these border task forces? Fully trained? On duty?
    Answer. As of December 15, 1997, there were 46 fully vetted, fully 
trained agents on duty.
    Question 1. (continued) What is the specific timetable, by month, 
for bringing each of the six task forces (Tijuana, Juarez, Mexicali, 
Laredo, Monterrey, and Matamoros) on line in the upcoming months?
    Answer. All of the Border Task Forces (BTF) are on line and 
actively being staffed:
   Tijuana (Operational, 15 agents authorized and 9 assigned).
   Mexicali* (Operational, 5 agents authorized and assigned).
   San Luis Rio Colorado* (Operational, 5 agents authorized and 
        assigned).
   Nogales* (Operational, 5 agents authorized and 2 assigned).
   Juarez (Operational, 15 agents authorized and 7 assigned).
   Monterrey (Operational, 15 agents authorized and 8 
        assigned--other 7agents expect to be fully vetted by June 
        1998).
   Reynosa* (Operational, 5 agents authorized and assigned).
   Matamoros* (Operational, 5 agents authorized and assigned).
   Laredo (There are no plans for a BTF in Laredo).
      *Denotes satellite offices.
    Question 1. (continued) How much money has the Mexican government 
allocated to these task forces in the next year? How much have they 
spent thus far?
    Answer. The government of Mexico (GOM) does not disclose the amount 
of funds allocated to the Border Task Forces (BTF). For this reason, no 
figures are available. Although the U.S. does not know the exact dollar 
figure the GOM has expended, the GOM has furnished the U.S. with a 
complete listing of the equipment it has purchased or otherwise 
acquired, such as seized vehicles, for the BTFS. Adequate funding by 
the GOM for the BTFs remains a primary concern for the U. S. 
government.
    Question 1. (continued) How much if anything, is the United States 
expected to pay in direct support to these task forces in the next 
year, including training costs and equipment?
    Answer. In 1997, the Congress made a special appropriation for 
vetted units in several countries. $2.9 million of this appropriation 
was allotted to Mexico for support of the BTFs and other vetted units.
    Question 1. (continued) Compared to this time last year, how many 
cases are BTFs investigating at this time?
    Answer. Each BTF has one major target as it did last year. In 
Tijuana, it is the Arellano Felix Cartel, in Juarez, the Amado Carrillo 
Fuentes Cartel, and in Monterrey, the Amezcua brothers' methamphetamine 
trafficking organization. All of these major investigations involve 
multiple cases on the various transportation and money laundering cells 
and the top lieutenants of each cell.
    Question 2. What is the total complement of Mexican agents that 
will be assigned to the Organized Crime Unit? How many Mexican agents 
have been fully vetted for the OCU? Fully trained? On duty?
    Answer. Approximately 300 Mexican agents will be assigned to the 
Organized Crime Unit (OCU); approximately 100 have been fully vetted as 
of November 24, 1997. The OCU has sections devoted to narcotics, 
organized crime, money laundering, kidnapping, and terrorism. These 
units have not been given specialized training in the U.S., but some of 
the narcotics agents have attended the Basic Narcotics Course sponsored 
by DEA and FBI in Leesburg, VA. Approximately 140 total personnel, 
including support staff, are currently on duty.
    Question 2. (continued) What is the specific timetable, by month, 
for bringing the OCU up to full complement?
    Answer. The government of Mexico plans to have the Organized Crime 
Unit (OCU) fully staffed by the end of 1998. Key to fully staffing the 
OCU is Mexico's purchase of polygraph machines and training of 
polygraphers.
    Question 2. (continued) How much money has the Mexican government 
allocated to OCU in the next year? How much have they spent thus far? 
How much, if anything, is the United States expected to pay in direct 
support to the OCU in the next year, including training costs and 
equipment?
    Answer. The government of Mexico does not disclose the amount of 
funds allocated for the Organized Crime Unit (OCU). For this reason, no 
figures are available. As noted above, the Congress, in 1997, made a 
special appropriation for vetted units in several countries, of which 
$2.9 million was allotted to Mexico to support vetted units, including 
the OCU.
    Question 2. (continued) Compared to this time last year, how many 
cases is the OCU investigating at this time?
    Answer. As the Organized Crime Unit (OCU) was first established on 
February 1, 1997 there were no cases investigated before this year. The 
OCU currently has eight major investigations in progress.
    Question 3. What is the total complement of Mexican agents that 
will be assigned to the Special Prosecutor for Crimes Against Health 
(FEADS)? How many Mexican agents today have been fully vetted for the 
FEADS? Fully trained? On duty?
    Answer. The Special Prosecutor for Crimes Against Health (FEADS) 
will eventually have 3,000 agents assigned. According to the State 
Department, 882 have been vetted by the government of Mexico and 880 
were fully trained and on duty as of November 24, 1997.
    Question 3. (continued) What is the specific timetable, by month, 
for bringing the FEADS up to full component?
    Answer. There is no monthly timetable for bringing the Special 
Prosecutor for Crimes Against Health (FEADS) up to full strength, 
however, the government of Mexico (GOM) hopes that they will be fully 
staffed by the end of 1998. Once Mexico has finished purchasing the 
necessary polygraph machines and training the needed polygraphers, the 
GOM will be better able to bring the FEADS up to full strength more 
quickly.
    Question 3. (continued) How much money has the Mexican government 
allocated to the FEADS in the next year? How much have they spent thus 
far?
    Answer. The government of Mexico does not disclose the amount of 
funds allocated to the Special Prosecutor for Crimes Against Health. 
For this reason, no figures are available.
    Question 3. (continued) How much, if anything, is the United States 
expected to pay in direct support of FEADS in the next year, including 
training costs and equipment?
    Answer. The major outlay for the Special Prosecutor for Crimes 
Against Health in 1998 will consist of a computer project, funded by 
the Department of State's Bureau of International Narcotics and Law 
Enforcement. We estimate the total cost of this project at about $4 
million.
    Question 3. (continued) Compared to this time last year, how many 
cases in the FEADS investigating at this time?
    Answer. As the Special Prosecutor for Crimes Against Health (FEADS) 
was first established on April 30, 1997 there were no cases 
investigated before this year. Currently FEADS has about 100 cases 
open.
    Question 4. What specific additional steps are needed to implement 
the Organized Crime Law over the next year? Money laundering law?
    Answer. The Organized Crime Law.
    The U.S. Embassy in Mexico City reports that the implementation of 
the Organized Crime Law is proceeding well. The Organized Crime Unit 
has been established within the Office of the Attorney General (PGR) to 
implement the law and has received considerable support from the USG. 
In addition to its use in the important investigation of the former 
Director of the National Counternarcotics Institute (INCD), General 
Gutierrez Rebollo, the Organized Crime Law is currently being used in 
more than 30 cases involving the Carrillo Fuentes, Arellano Felix, and 
Amezcua Organizations. Under its asset forfeiture provisions a total of 
$41 million has been seized from associates of the Carrillo Fuentes 
organization.
    While the new Organized Crime Law has given Mexican law enforcement 
entities additional investigative tools and increased authorities, the 
law alone is not sufficient. To conduct effective law enforcement 
investigations in Mexico, specialized units must utilize sophisticated, 
state-of-the-art investigative techniques, including court-authorized 
electronic surveillance, undercover operations, and the like. In order 
to use these investigative tools effectively, the GOM must first 
establish guidelines and policies, and develop a cadre of competent and 
trustworthy prosecutors and judges.
    The law is missing some elements contemplated by the 1988 U.N. 
Vienna Convention and Organization of American States/Counter Drug 
Counsel (OAS/CICAD) models for an effective asset forfeiture regime. 
For example, it lacks provisions for international forfeiture 
cooperation and asset sharing, and does not provide for forfeiture of 
assets where the organized criminal suspect has died or absconded from 
Mexican jurisdiction.
    The Organized Crime Law is an important step by Mexico in creating 
a domestic and international forfeiture cooperation regime. Mexican 
officials recognize, however, that they must do more in developing 
forfeiture laws and regulations. The PGR is drafting measures that will 
integrate Mexico's piecemeal forfeiture laws into one comprehensive 
system for the seizure and forfeiture of assets related to the 
commission of crime. The laws now being drafted, however, will not 
provide for in rem civil forfeiture capabilities (such as exist in the 
United States) to allow the forfeiture of assets belonging to one who 
has died or fled the jurisdiction before being convicted of a crime 
providing the basis for forfeiture.
    Another important issue that the Mexicans are now addressing in 
their efforts to draft comprehensive forfeiture laws and procedures is 
the distribution of forfeited assets between the judicial and 
prosecutive authorities for their official use. The draft legislation 
will also regulate Mexican agencies involved in seizing assets by 
setting guidelines on how to administer the seized assets so that they 
remain stable until final adjudication.
    Answer. (continued) The Money Laundering Law.
    During 1996 and 1997, the government of Mexico (GOM) took a number 
of significant steps to enhance its capacity to combat money 
laundering. In May 1996, a new Mexican law made money laundering a 
criminal offense for the first time. Under the prior law, money 
laundering was a tax offense which could only be triggered through the 
course of an audit of a financial institution. The new law also 
provides for enhanced penalties for money laundering, increasing the 
potential prison sentence to 5-15 years generally, and in cases of 
government officials, the penalty may increase to as much as 22 years. 
Implementation and enforcement of the money laundering law through 
investigation and successful prosecutions are the tasks ahead.
    In addition, in March 1997, Mexico's Hacienda issued new 
regulations for specified financial institutions that should enhance 
Mexico's ability to detect and track possible money laundering activity 
through those institutions. Once fully implemented, the rules will 
mandate that the specified financial institutions will: (1) report 
currency and other monetary transactions in excess of $10,000; (2) 
report suspicious transactions; and (3) obtain and retain customer 
account opening and transaction information. The customer 
identification regulations became effective on May 2, 1997, and the 
regulations governing currency transaction reporting will become 
effective January 1, 1998.
    Although suspicious transaction reporting requirements became 
effective May 2, Hacienda continues to work with covered financial 
institutions to aid their development of standards for what constitutes 
suspicious activity. The GOM reports that this process should be 
complete by the end of 1997.
    Rules of this sort--when fully implemented and enforced--have 
proven to be effective tools for preventing and deterring money 
laundering. They also generate valuable investigative information for 
law enforcement authorities seeking to identify and dismantle 
laundering operations.
    The new laws and regulations will assist substantially in erecting 
the kind of barriers that will prevent the placement of drug profits 
and other criminally derived funds with Mexican financial institutions. 
At the same time, because the regulations are the GOM's first attempt 
at requiring currency transaction and suspicious activity reports, some 
provisions of the rules raise concerns that will need to be addressed 
with further amendments and refinements. For example, the requirement 
to obtain and retain information on the identities of account holders 
for transactions other than deposits does not apply to transactions 
less than $10,000. As a consequence, transactions may be structured 
below the $10,000 threshold with anonymity (although the financial 
institutions may still file a suspicious transaction report), and in 
some circumstances, there is no separate offense for structuring to 
avoid reporting requirements.
    The customer identification provisions also fail to apply to 
beneficial owners--a potentially significant problem, since money 
laundering transactions often are carried out by individuals acting on 
behalf of others. Another concern raised with the GOM by U.S. 
representatives is that willful violations of these regulations are 
punishable only by civil penalties, rather than by criminal penalties. 
Finally, the ``safe harbor'' provisions protecting financial 
institutions from being sued by affected customers have not been tested 
and could present problems. The U.S. will continue to work with the GOM 
to address these legal and regulatory issues.
    The Departments of Treasury and Justice have worked closely with 
Hacienda to develop the new regulations, and have offered training for 
both prosecutors and investigators. In June and July 1996, Treasury led 
interagency missions to Mexico City for the purpose of joint U.S.-
Mexican examination of the GOM's existing anti-money laundering 
capabilities, and development of suggested improvements.
    Among other things, these missions resulted in the design by 
Treasury' s Financial Crimes Enforcement Network (FinCEN) of a 
computerized database for the information generated by Hacienda's 
reporting regulations. The State Department has purchased the necessary 
hardware and software for Hacienda; delivery and installation is nearly 
complete.
    Moreover, to implement the new regulations more effectively, the 
GOM has established a Financial Intelligence Unit (FIU) staffed with 
analysts. Seven employees of the Flu received training by the FinCEN in 
intermediate intelligence analysis on September 24-26, 1997.

                           Seizures by Mexico

    Question 1. Do the Mexicans have an adequate strategy, 
infrastructure and resources to inspect cargo entering and transiting 
their country? Do they inspect the millions of containers arriving at 
their ports from South America each year? For example, do they have 
adequate customs inspection at their ports? How have they improved 
their maritime operations? What steps have we taken to assist the 
Mexicans to improve their own ``customs'' inspections?
    Answer. ONDCP has referred this question to the U.S. Customs 
Service.
    Question 2. Does the U.S. government have any reports of drugs 
seized by the Mexicans being stolen by Mexican authorities and being 
resold in the market? Are the Mexicans fully cooperative with U.S. 
efforts to monitor the destruction of seized drugs?
    Answer. The Office of the Attorney General (PGR) is prosecuting 
officers involved in the theft of cocaine seized by the Mexican 
military and stored with the PGR in San Luis Rio Colorado (Sonora). On 
September 1, 1997, the PGR arrested 18 personnel from its own aviation 
division for allegedly smuggling illicit drugs in a PGR aircraft.
    On occasion Mexico has asked the U.S. to attend the destruction of 
seized drugs, however, there are no formal bilateral efforts to monitor 
the destruction of drugs in either country.

                          Extradition/Arrests

    Question 1. How many major Mexican drug kingpins have the Mexicans 
arrested this year?
    Answer. The exact number is not known, however, among numerous 
important drug traffickers or associated criminals arrested or 
otherwise eliminated from criminal activity in 1997, the following were 
most prominent:
    Oscar Malherbe de Leon, once operations manager for Juan Garcia 
Abrego's Gulf Cartel (and the subject of a U.S. Department of State 
reward offer issued at the same time as the offer for Garcia Abrego), 
was arrested in Mexico City on February 26, and remains in maximum 
security prison subject to a U.S. government provisional arrest 
warrant;
    Jaime Gonzales-Castro, a lieutenant in the Amado Carrillo Fuentes 
organization (for whom arrest warrants are also outstanding in the 
U.S.) and associate Jorge Barrela Martinez were arrested by the Mexican 
military April 28 in Nogales, Sonora-Barrela was also charged with 
attempting to bribe PGR officials to secure continued freedom, and 
remains in jail;
    Jaime Arturo Ladino Avila, a brother-in-law and alleged financier 
for the Amezcua drug trafficking organization, was arrested by the PGR 
in May in Tijuana, and remains in jail;
    Amado Carrillo Fuentes, leader of the major Mexican organizations 
based in Ciudad Juarez, died July 4 at a Mexico City hospital of 
complications following cosmetic surgery to radically alter his 
appearance to evade increasingly close pursuit by Mexican and 
international authorities;
    On July 30, Mexican authorities detained Manuel de Jesus Bitar 
Tafich, a major money launderer for the Carrillo Fuentes organization 
who sought to establish refuge for Amado Carrillo Fuentes in Chile-he 
was indicted September 27, and remains in jail;
    In August, the Mexican military detained Noe Brito Guadarrama, head 
of security for the Amado Carrillo Fuentes organization, who remains 
incarcerated;
    Rodrigo Villegas Bon, an assassin for the Arrellano Felix 
organization who is accused of participating in the May 1993 killing of 
Cardinal Juan Jesus Posadas Ocampo at the Guadalajara Airport, was 
arrested by Jalisco state police in Guadalajara on September 25, and 
remains imprisoned;
    On November 15, during a routine search for weapons at a highway 
checkpoint, Mexican Army personnel detained Adan Amezcua Contreras, the 
youngest of three brothers who control the world's largest 
methamphetamine trafficking organization, who remains in GOM custody.
    Arturo Paez Martinez, a prominent member of the Arrellano Felix 
Organization, was arrested on November 11, 1997. Paez is charged with 
conspiring to distribute more than 2,200 pounds of cocaine in the 
United States, was arrested outside of a shopping mall by Mexican 
federal agents, and remains in jail.
    Question 1. (continued) How many provisional arrest warrants from 
the United States are pending with the Mexicans?
    Answer. Approximately 120 active provisional arrest or extradition 
requests are pending with Mexico.
    Question 1. (continued) How many persons have been arrested 
pursuant to these U.S. provisional arrest warrants?
    Answer. Since March 1996, the government of Mexico has arrested 35 
and extradited 27 persons pursuant to U.S. arrest warrants; another 10 
were deported.
    Question 1. (continued) How many persons (broken down by Mexican 
citizens and dual nationals) have the Mexicans extradited on drug 
crimes to the United States since January 1, 1997?
    Answer. The government of Mexico (GOM) approved the extradition of 
4 Mexican citizens (Oscar Malherbe, Jaime Ladino, Jaime Gonzalez 
Gutierrez (also known as Jaime Gonzalez Castro) and Tirso Angel Robles) 
on drug charges in 1997. Mexico extradited five U.S. citizens and two 
Cubans in 1997 on drug charges and expelled one U.S. citizen wanted in 
the United States on drug charges this year.
    Once Malherbe finishes serving his sentence in Mexico, he will be 
eligible for extradition to the U.S. If the newly signed protocol to 
our extradition treaty is ratified, Malherbe would be a candidate for 
extradition under its terms. Gonzalez Gutierrez and Ladino were 
arrested by Mexican authorities at the request of the U.S. and are now 
in custody solely for extradition purposes.
    Ladino was arrested on May 28, 1997, in Tijuana on the basis of a 
U.S. provisional arrest warrant. He is a key lieutenant of the Tijuana-
based Amezcua Organization and the brother-in-law of leaders Jesus Luis 
and Adan Amezcua. In order to ensure that Ladino remained in custody, 
the GOM transferred him from Tijuana to Mexico City, where he remains 
imprisoned pending Mexican action on the U.S. extradition request.
    Gonzalez Gutierrez was arrested on April 28, 1997, in Nogales, 
Sonora. Gonzalez Gutierrez is a lieutenant of the Miguel Caro Quintero 
Organization, as well as a fugitive from justice in Tucson, Arizona. 
When the Mexican charges against Gutierrez failed and were dismissed by 
the Mexican court, the GOM began processing the U.S. extradition 
request based on federal narcotics charges filed in Tucson.
    Malherbe has filed an amparo suit appealing his extradition and 
appeals are pending in four other cases in which extradition has been 
granted. Three cases involve Mexican citizens Tirso Angel Robles, 
Martin Avalos Tescuano, and Rosendo Gutierrez. The other case involves 
a U.S. citizen with a claim to Mexican nationality through marriage, 
William Brian Martin. Bilateral efforts to locate and apprehend other 
organizational members and principals sought by one or both countries 
are continuing.
    Question 1. (continued) When was the last time a Mexican citizen 
(not including dual nationals) was extradited formally and turned over 
to U.S. authorities for trial?
    Answer. The last time a Mexican citizen (not dual national) was 
extradited formally and turned over to U.S. authorities for trial was 
in April 1996.
    Question 1. (continued) Why has Mexico been more willing to 
extradite Mexican citizens on other heinous crimes (such as child 
molestation) than they are for drug crimes?
    Answer. Mexico is not more likely to extradite Mexican citizens on 
other heinous crimes, than they are for drug crimes. In addition to the 
Mexico citizen extradited to the U.S. in 1996 on child molestation 
charges, and a second extradited on murder charges, four Mexican 
citizens have been approved for extradition on drug charges in 1997 and 
one in 1995. One alleged Mexican child molester and one alleged 
murderer have also been found extraditable in 1997, and they are 
appealing those orders. As noted above, however, these extraditions 
have been delayed because the individuals are serving time in Mexico or 
have their case on appeal.
    Question 2. How do you explain that the Mexicans have arrested far 
fewer drug suspects than they did in 1992?
    Answer. In 1992 the government of Mexico (GOM) arrested 24,461 
people on drug charges compared to 8,766 thus far in 1997. It is 
important to note that numbers are not always the best means by which 
to analyze success, and that the organizational rank of the criminals 
arrested should also be taken into account. The GOM has arrested and 
incarcerated several high-ranking drug traffickers (see pps. 21-22) 
this year upsetting the hierarchy of several drug organizations.

            U.S. Law Enforcement Officers' Weapons-Carrying

    Question 1. Is it true that DEA policy prohibits DEA agents from 
traveling in Mexico without a weapon for self-defense? When Mexico's 
border task forces are eventually established, how will DEA be able to 
work with them securely if most of our DEA agents can't cross over the 
border to meet with them in Mexico? Are you aware of any information 
that Mexican personnel assigned to protect U.S. law enforcement agents 
turned out to be corrupt?
    Question 2. Do any DEA personnel assigned to Mexico carry weapons 
today for their own defense? Which positions and what diplomatic 
credentials do these persons hold? Isn't it correct that such officers 
to whom the Mexicans have given full diplomatic immunities do routinely 
carry their weapons in Mexico today? Will DEA ``commuter'' agents 
assigned to the BTF's be authorized to carry weapons? Will the 
``consular immunity'' that the Mexicans are offering to ``commuter'' 
agents offer them any protection from arrest or prosecution if they do 
chose to carry their weapons?
    Answer. Both the U.S. and Mexican governments are concerned with 
the safety of law enforcement personnel, and are working hard to ensure 
every measure available is considered to assure that safety. It is 
counter-productive to discuss in a public forum what those measures are 
or might be. ONDCP has referred these questions to the law enforcement 
agencies for a more detailed response.

           U.S. Air/Maritime Access and Interdiction Efforts

    Question 1. In the last 9 months, have there been any instances in 
which a U.S. plane or ship has been unable to get permission for ``hot 
pursuit'' of suspect targets, conduct normal interdiction, or refuel in 
Mexican facilities?
    Answer. In the last 9 months, there have been no instances in which 
a U.S. plane or ship has been unable to get permission for ``hot 
pursuit'' of suspect targets, conduct normal interdiction, or refuel in 
Mexican facilities.
    Question 2. Are you concerned that the Mexicans rely too heavily on 
U.S. interdiction efforts and have not invested enough to develop their 
own capacity to do this key job?
    Answer. We have no concerns about the Mexican Navy. Based on our 
dealings with the Navy, they are supporting the interdiction effort to 
the fullest extent of resources available and would expand if possible. 
They are using their funding to try to expand their fleet of patrol 
vessels, such as their recent unsuccessful attempt to buy Point Class 
Large Patrol Craft from the United States. Despite extensive 
counternarcotics training programs and equipment acquisition that 
emphasizes counternarcotics operations, the Navy stands poised to do 
more if resources are available.
    DEFENSA (Mexico's Army and Air Force) currently uses various 
methods such as checkpoints, patrols and airborne reconnaissance to 
support interdiction. Through their ongoing development of Specialized 
Military Units (GAFE) and airmobile capabilities, they are working to 
enhance their interdiction capabilities. DEFENSA efforts pertain to the 
Mexican land mass and are largely independent of U.S. interdiction 
efforts. As DEFENSA's core values emphasize defending Mexican 
sovereignty, U.S. interdiction efforts on Mexican territory would be 
problematic as they would appear to infringe on Mexican sovereignty. 
DEFENSA is not relying too heavily on U.S. interdiction efforts and is 
pursuing their own counterdrug mission based on roles and 
responsibilities determined by the government of Mexico.
    Question 2. (continued) Why haven't the Mexicans installed ground-
based radar to protect their airspace from unauthorized flights?
    Answer. Patterns of drug transportation to and from Mexico have 
evolved since large-scale air shipments were noted several years ago. 
Drug smugglers now rely much more heavily on land and maritime surface 
transportation. Installation of an expensive ground-based radar system 
at this time would commit a large proportion of Mexico's available 
resources against a relatively small proportion of the drug traffic. 
The GOM believes that a new radar system is not its most costeffective 
counterdrug investment under current conditions.
    Question 2. (continued) How have we or will we make up this ``blind 
spot''?
    Answer. It is not clear that the lack of an extensive ground-based 
radar system in Mexico constitutes a significant ``blind spot,'' 
especially in view of the current narco-trafficking threat. U.S. 
Embassy Mexico City believes the only way to get the government of 
Mexico (GOM) to install groundbased radar is for the U.S. either to 
subsidize, transfer on a non-reimbursable basis, or loan a ground-based 
radar system. We are not yet convinced that the threat warrants such a 
significant commitment of Mexican or U.S. resources.

                         Money Laundering Cases

    Question 1. What priority do you attach to building money 
laundering cases? Is it your policy that we should do more to increase 
such prosecutions? What specific steps are being taken to build such 
cases right here in the United States?
    Answer. Presidents Clinton and Zedillo agreed to make the building 
of money laundering cases a national priority by including it as 
Alliance Point 12 of the May 1997 Declaration of the Mexican/U.S. 
Alliance Against Drugs. The Declaration was the impetus to start 
negotiations between the U.S. and Mexico to develop the U.S/Mexico 
Common Drug Control Strategy.
    Alliance Point 12 calls for both nations to implement more 
effectively the laws and regulations to detect and penalize money 
laundering in both countries, and to enhance bilateral and multilateral 
exchanges of information and expertise to combat money laundering. On 
November 13, 1997 a status report on the development of the strategy 
was released with the following accepted in principle by both 
countries:
   Enhance U.S.-Mexico law enforcement efforts, including 
        prosecutions against money laundering, to disrupt and dismantle 
        major drug trafficking operations, and to increase the number 
        of coordinated investigations.
   In accordance with international agreements in force between 
        both countries, improve the exchange of information to prevent, 
        detect, combat and penalize money laundering. Ensure that banks 
        and other financial entities and their officers and employees 
        in both countries comply with requirements established to keep 
        records and file transaction reports.
   Periodically review the laws and regulations to prevent, 
        detect, combat and penalize money laundering in order to design 
        amendments or reforms, if necessary.
   Coordinate efforts to design and develop specific training 
        plans and programs aimed at governmental personnel and 
        personnel in financial entities in both countries.
   Convene an Annual Seminar designed for governmental and 
        financial institution personnel on the efforts of both 
        countries against money laundering.
    U.S. agencies coordinate and exchange information regularly with 
Mexican counterparts on potential money laundering targets, based and 
operating in Mexico, that can be prosecuted in the U.S. by a U.S. law 
enforcement agency.
    Question 1. (continued) Does the Justice Department share the view 
that money laundering cases should be treated as a priority? Has 
Justice assigned sufficient personnel and resource to U.S. attorney's 
offices to help prosecute these cases?
    Answer. The Attorney General has identified the enforcement of our 
anti-money laundering laws as a top priority for the Justice 
investigative agencies and U.S. Attorney's offices. The Attorney 
General has further stressed the importance and commitment of working 
jointly with the Treasury Department investigators and regulators in 
this effort.
    Question 2. How much progress has Mexico made to date in setting up 
its Financial Crimes Unit?
    Answer. The government of Mexico has received approximately 95 
percent of the equipment previously identified as being necessary to 
carry out its intended Financial Crimes Unit (FCU) operations. Taking 
into account additional equipment only recently identified by the FCU 
as also being integral to fulfilling its mission, the equipment on hand 
represents about 50 percent of the total requirement.
    Question 2. (continued) When will that unit be fully operational? 
Is that unit actually conducting investigations at this time?
    Answer. The Financial Crimes Unit (FCU) became operational and 
conducting investigations in May 1997. The USG has already delivered 
initial basic information processing equipment and is continuing to 
work with the FCU in identifying additional equipment needed to enhance 
its capability.

                           Assets Forfeiture

    The Report to Congress highlights deficiencies in Mexico's 
forfeiture law. For example, the report notes that the law does not 
provide for international forfeiture cooperation and asset sharing.
    Question 1. Have the Mexicans applied these new laws with 
sufficient vigor?
    Answer. Presidents Clinton and Zedillo agreed to make the issue of 
seizing and forfeiting the proceeds and instrumentalities of drug 
trafficking a top priority in our law enforcement relationship by 
including it as Alliance Point 13 of the May 1997 Declaration of the 
Mexican/U.S. Alliance Against Drugs.
    Alliance Point 13 states that both countries will seize and forfeit 
the proceeds and instrumentalities of drug trafficking, and direct 
these to the use of drug prevention and law enforcement, in accordance 
with legal procedures in force in and between our countries.
    In addition, as noted in the September 1997 Report to Congress on 
Bilateral Counter-drug Cooperation, Mexico has made significant 
progress with regards to forfeiture. The progress is in Mexico's 
domestic efforts as well as in regard to cooperation with the United 
States. Issues such as international forfeiture cooperation and asset 
sharing form an important part of the U.S./Mexico Common Drug Control 
Strategy, and are currently in the final stages of negotiation.
    The Organized Crime Law provides for freezing and forfeiture of 
assets related to the underlying organized criminal offense. Under the 
law, seized assets can be used or disposed of, as determined by a 
government council. The Organized Crime Law provides for the pre-trial 
restraint and seizure of assets that might be subject to forfeiture, as 
well as supervising the maintenance and custody of restrained assets.
    The law is missing some elements contemplated by the 1988 U.N. 
Vienna Convention and OAS/CICAD models for an effective asset 
forfeiture regime. For example, it lacks provisions for international 
forfeiture cooperation and asset sharing, and does not provide for 
forfeiture of assets where the organized criminal suspect has died or 
absconded from Mexican jurisdiction.
    The Organized Crime Law is an important step by Mexico in creating 
a domestic and international forfeiture cooperation regime. Mexican 
officials recognize, however, that they must do more in developing 
forfeiture laws and regulations. The PGR is drafting measures that will 
integrate Mexico's piecemeal forfeiture laws into one comprehensive 
system for the seizure and forfeiture of assets related to the 
commission of crime. The laws now being drafted, however, will not 
provide for in rem civil forfeiture capabilities (such as exist in the 
United States) to allow the forfeiture of assets belonging to one who 
has died or fled the jurisdiction before being convicted of a crime 
providing the basis for forfeiture.
    Question 1. (continued) Are we encouraging them go after the 
Carrillo Fuentes and Garcia Abrego assets? What specific progress have 
they made?
    Answer. Under Mexico's current asset forfeiture provisions, a total 
of $41 million has been seized from associates of Amado Carrillo 
Fuentes. The laws, however, will not provide for in rem civil 
forfeiture capabilities (such as those that exist in the United States) 
to allow forfeiture of assets belonging to one who has died, as in the 
case of Amado Carillo Fuentes, or fled the jurisdiction before being 
convicted of a crime providing the basis for forfeiture. In addition, 
information received from the government of Mexico has led to an 
additional $50 million that has been frozen for forfeiture in the 
Southern Districts of Florida and New York.
    In January 1997, Garcia Abrego was sentenced to nine concurrent 
life sentences, fined $128 million, and was ordered to forfeit $350 
million as profits of his drug enterprise. While the monetary judgments 
remain unsatisfied, the GOM's expulsion of Garcia Abrego opened the 
door to this significant conviction and criminal forfeiture judgment.
    Question 1. (continued) Have they been aggressive in putting these 
seized assets back into anti-drug operations?
    Answer. The Mexicans, in their efforts to draft comprehensive 
forfeiture laws and procedures, are now addressing the distribution of 
forfeited assets. This issue is also being addressed in Alliance Point 
13 (as stated above) of the U.S./Mexico Common Drug Control Strategy, 
currently in the final stages of negotiation.

                               Corruption

    Question 1. Can you explain the measures that [the GOM has] adopted 
in Mexico to ``screen'' law enforcement and anti-drug personnel?
    Answer. The Office of the Attorney General (PGR) is undertaking 
vigorous background checks of both current and newly-hired personnel, 
to include financial, psychological, drug, physical, and polygraph 
exams. The number of personnel completing full screening will increase 
substantially when Mexico overcomes a backlog created by a lack of 
polygraph equipment and trained operators. The PGR has recently 
purchased additional polygraph equipment and is in the process of 
training operators.
    Question 1. (continued) How have Mexicans dealt with the fact that 
the courts have ordered the reinstatement of hundreds of the ousted 
police officers?
    Answer. The entire Office of the Attorney General (PGR) is 
undergoing a general reorganization that began in 1996 when former 
Attorney General Lozano fired more than 1,200 PGR employees for 
corruption or unsuitability, and continues under the plan announced by 
Attorney General Madrazo on April 30, 1997. Nearly all of the 
individuals dismissed last year appealed their dismissals, citing 
procedural flaws in the terminations. According to the U.S. Embassy and 
the GOM, the appeals have resulted in the PGR being ordered by Mexican 
courts to reinstate 234 individuals with back pay as of August 1997. 
Attorney General Madrazo stated on September 10 that an additional 270 
PGR employees were fired between December 1996 and August 1997, and 
that 192 of them face prosecution.
    The PGR has assured the U.S. that the re-instated officers have 
been placed in non-sensitive positions.
    Question 1. (continued) Will this contaminate the new law 
enforcement units?
    Answer. The Office of the Attorney General (PGR) is working to the 
best of its ability to train new agents who will be kept separate from 
reinstated agents who might be corrupt.
    The government of Mexico (GOM) has initiated procedures to conduct 
thorough vetting for individuals considered for selection as members of 
the special units. This vetting process, combined with enhanced 
training, a minimum time commitment (U.S. agencies have suggested a 
three-year minimum assignment), premium pay to reflect the additional 
training, and ongoing integrity checks would increase U.S. law 
enforcement confidence in the Border Task Forces (BTF) and Organized 
Crime Unit (OCU). These measures would indicate that BTF and OCU 
personnel are substantially free of corruption and are likely to 
develop the competence to combat the highly sophisticated and violent 
drug trafficking cartels.
    The special vetted units described above will form the core of a 
reorganized and fully vetted PGR. What distinguishes these 
organizational changes from prior efforts to reform the PGR is the 
vetting process that all prospective members of each unit must undergo. 
In addition to being more thorough than ever before, vetting is 
broader, with the GOM planning to screen all employees of the PGR. The 
PGR has examined more than 1,300 officers in its vetting process and 
plans to aggressively continue this procedure.
    The GOM is also advancing a significantly enhanced package of pay 
and benefits for the members of the vetted units. These units and their 
continued expansion are part of a comprehensive GOM strategy to reform 
the PGR overall. The PGR has improved its recruitment and selection 
procedures, and has expanded its training course for judicial police 
from nine months to two years.
    The PGR is also making efforts to fight impunity throughout its 
organization. Attorney General Madrazo has ordered drug testing for PGR 
officials, and officials detected using drugs are being prosecuted. The 
PGR is prosecuting officers involved in the theft of cocaine seized by 
the Mexican military and stored with the PGR in San Luis Rio Colorado 
(Sonora). On September 1, 1997, the PGR arrested 18 personnel from its 
own aviation division for allegedly smuggling illicit drugs in a PGR 
aircraft.
    The major reorganization of Mexican counternarcotics and law 
enforcement institutions has meant that Mexican institutions and 
personnel must begin at a basic level to rebuild confidence, trust, and 
cooperation with the U.S. This has led the U.S. and Mexico to develop 
avenues for working level cooperation and information sharing as the 
new Mexican institutions develop.
    Question 1. (continued) Are members of the old BTF's eligible, 
after reverting, to participate in the new BTF'S? If so, how many of 
the agents vetted for these BTF posts thus far were previous BTF 
agents?
    Answer. Members of the old BTF's are eligible, after reverting, to 
participate in the new BTF'S. Thus far, four agents vetted for BTF 
posts were previous BTF agents.
    Question 2. In addition to Gutierrez Rebollo, since January 1, 
1997, how many Mexican military personnel have been implicated in 
corruption?
    Answer. We would be pleased to discuss with the Senator information 
available to agencies of the Executive Branch in a classified setting, 
understanding that we cannot comment on pending cases in the United 
States and elsewhere.
    Question 2. (continued) Is it true that Gutierrez has implicated 
other generals as well as a number of President Zedillo's staff in 
taking pay-offs from the cartel?
    Answer. The former Director of the National Counternarcotics 
Institute (INCD) has made allegations against several high-ranking 
Mexican officials. None of these allegations has been proven, and many 
of these cases are still pending.
    Question 3. Have some Mexicans criticized President Zedillo's 
decision to give the military such a prominent operational role in the 
anti-drug effort?
    Answer. Some Mexican citizens, including many members of the 
military, would prefer that the military not be involved in law 
enforcement activities. However, many of them also recognize there is 
no alternate solution until civil law enforcement agents can be 
properly trained and assume their duties. On the whole, public opinion 
data show the military as more highly regarded than the police.
    Question 3. (continued) Have some Mexicans raised constitutional 
prohibitions against the military's prominent anti-drug role? Please 
explain.
    Answer. Some have raised the question, but we understand that the 
Zedillo administration defends its actions as being entirely 
constitutional.

                        U.S. Donated Helicopters

    Question 1. How many of the excess UH-1H helicopters have the 
Mexicans received to date?
    Answer. The government of Mexico has received all 73 UH-1H 
helicopters programmed to be transferred. The last 25 helicopters were 
delivered in September 1997.
    Question 1. (continued) How many are actually operational today?
    Answer. The government of Mexico (GOM) is required to provide 
actual UH-1H operational status on a bimonthly basis. According to the 
latest GOM report, 41 UH-1H helicopters were operational on October 1, 
1997.
    Question 1. (continued) Does it concern you that senior Mexican 
officials told Members of Congress last Thursday that 63 of the 73 
helicopters ``are flying'' when that number turned out to be 16 of 48 
(with 25 not even delivered)?
    Answer. Yes, an official report from Mexico alleging 63 of the UH-
1H helicopters were operational during the estimated period in question 
would concern us.
    The U.S. Military Liaison Office in Mexico monitors the operational 
status and supply status of parts ordered for the UH-1H aircraft. Also, 
we review the status of each aircraft and major components for time 
remaining before inspections and overhauls during End-Use Monitoring 
visits.
    The final 25 helicopters were delivered to Mexico in an operational 
ready condition, during September. Of the 73 UH-1H aircraft available 
on October 1, Mexico reported 41 were operational. Between October 1 
and October 29, as many as eight additional helicopters could have been 
repaired and made operationally ready. In any event, during the period 
the comment was likely to have been made, we estimate the total 
aircraft operational would not be more than 49. We can only speculate 
on why a Mexican official might have reported 63 ``flying''.
    Question 2. Is it correct that 80 percent of the missions flown by 
these helicopters have been for ``reconnaissance''?
    Answer. It is reasonable to estimate that eighty percent of the 
missions flown by these helicopters have been for reconnaissance. Due 
to the geography of Mexico and the operational limitations of the 
single-engine UH-1H helicopter, it is inadequate for providing 
effective airlift support in many regions of Mexico. Above 5,000 feet 
altitude, the UH-1H has very limited lift capabilities. Major 
production and transit areas in Mexico are commonly located at 
altitudes of 8,000 to 11,000 feet above sea level. In lower altitude 
regions such as the Yucatan Peninsula, the thick jungle canopy and 
scarcity of landing areas frequently prevents the effective use of 
helicopters as a transport. Therefore, the UH-1H aircraft are largely 
used for reconnaissance and ground force coordination to support 
eradication and interdiction operations.
    Question 2. (continued) Why were we told by our government that 
these helicopters were needed to enhance the Mexican military's rapid 
mobility?
    Answer. ONDCP has requested a response from the Department of 
Defense.
    Question 2. (continued) Have they used these helicopters in a 
single interdiction to date?
    Answer. Yes, Mexican UH-1H aircrews have specifically described 
operations in which they have conducted reconnaissance to locate 
narcotics trafficking and then coordinated with ground-based units to 
intercept narcotics traffickers. In addition, they have identified 
airfields, vehicles and other resources used by narcotraffickers. 
DEFENSA (the Mexican Army and Air Force) has used this information for 
subsequent interdiction operations. The helicopters have been deployed 
to remote locations in support of interdiction operations that cannot 
be adequately supported by surface transportation.
    Question 3. Is it correct, as a senior Mexican official asserted 
last week, that these helicopters do not provide adequate lift to carry 
two men (plus crew)?
    Answer. The single-engine UH-1H helicopter's performance is 
adversely affected by high altitudes, temperatures, and humidity. In 
regions such as the Yucatan and Baja California Peninsulas, the UH-1H 
helicopters operate at low altitudes (relative to sea level) and can 
effectively operate with a crew, passengers, and additional equipment. 
However, Mexican narcotics production and trafficking largely occurs at 
altitudes ranging from 5,000 to 11,000 feet above sea level. 
Consequently, most UH-1H counterdrug operations occur at these high 
altitudes. Due to performance limitations at these altitudes, the UH-1H 
helicopters are often unable to carry more than their aircrew or a 
small complement of personnel or cargo.
    Question 3. (continued) Is it correct that Mexicans have purchased 
16 MI-8 helicopters?
    Answer. Actually, the government of Mexico has purchased more than 
16 MI-8 helicopters. For example, 11 MI-8 and three MI-1/7 helicopters 
were undergoing acceptance inspection and testing at Mexican Military 
Air Base I simultaneously with the 25 UH-1H helicopters delivered in 
September 1997. Mexico's Army, Air Force and Navy already had 
operational MI-8/17 fleets prior to the delivery of these aircraft.
    Question 3. (continued) Why didn't they purchase U.S.-made 
helicopters?
    Answer. There are principally three reasons why Mexico may have 
decided to purchase MI-8/17 helicopters:
   The initial purchase package was less expensive than that 
        offered by the U.S. for UH-1 aircraft.
   The high altitude performance of the MI-8/17 helicopters is 
        better than the UH-1.
   Depending on how the purchase of UH-1's was structured, it 
        could have included U.S. end use monitoring requirements. There 
        is no end use monitoring associated with the purchase of MI-8/
        17 helicopters.

                Questions Submitted by Senator Grassley

                     Accuracy in Labeling in Report

    Question 1. In the September Report to Congress, you reference, 
under a sub heading entitled ``Operation Success,'' a large seizure in 
excess of 2.7 tons of cocaine in August of this year is highlighted as 
an example of the benefits of increased cooperation. This shipment of 
cocaine happened to be floating off the coast of Acapulco. U.S. 
information was developed, and assets of U.S. law enforcement pursued 
the smugglers. However, despite the Mexican Navy's response, the crew 
of the ``go fast'' vessel jettisoned the drugs and escaped. There were 
no arrests, no determination of who was responsible for shipment, who 
was going to receive the drugs--and the boats that smuggled the cocaine 
got away. All we have is the cocaine, which is not even a blip on the 
screen. How do you call that success?
    Answer. Objective 3 of Goal 4 of the National Drug Control Strategy 
calls for improving ``bilateral and regional cooperation with Mexico as 
well as other cocaine and heroin transit zone countries in order to 
reduce the flow of illegal drugs into the United States.'' Point 14 of 
the Declaration of the Mexican/U.S. Alliance Against Drugs, signed by 
Presidents Clinton and Zedillo in May, 1997 calls for our two countries 
to ``improve our capability to interrupt drug shipments by air, land, 
and sea.'' The events of August 1997, described in the Report to 
Congress on Bilateral Counterdrug Cooperation under the heading 
``Operational Success,'' are examples of successful drug interdiction.
    Nearly three tons of cocaine were prevented from entering Mexico 
for further transshipment to the United States. Certainly we would have 
preferred to have arrested the crew of the go-fast vessel, but the 
seizure of such a quantity of cocaine is nonetheless a success. The 
Mexican Navy and U.S. law enforcement worked together to interdict 
cocaine--a phenomenon we strongly encourage.

                              Extradition

    Question 2. Mexico has extradited some criminals to the United 
States, mostly foreign nationals. How many outstanding extradition 
requests do we have for persons presently incarcerated or under arrest 
in Mexico for drug offenses? What is the status of these requests? How 
many major drug figures are included in these numbers?
    Answer. The number of active extradition requests pending in Mexico 
fluctuates. As a general matter, the United States has approximately 
120 provisional arrests or extradition requests that are considered to 
be active (the fugitives have either been arrested or located, or 
information on their whereabouts has not been exhausted or negated). 
Approximately one third of these active matters are narcotics-related, 
although this percentage also fluctuates.
    Our records show that as of December 18, 1997, 13 individuals for 
whom we have sought extraditions for drug offenses are known to be 
under arrest in Mexico. In five of those cases (four involving Mexican 
nationals), extradition has been granted by the Government of Mexico, 
but appeals are being pursued by the fugitives. In three other cases, 
extradition has been granted, but the fugitives must complete their 
Mexican sentences before being surrendered. One case involving a 
Mexican national is still awaiting an initial decision by the presiding 
court. In the remaining cases, the United States has not yet submitted 
formal extradition petitions. It is difficult to characterize drug 
figures as major and minor, but we would estimate that at least five of 
the defendants included in the above-noted cases are or were in 
significant positions in large drug trafficking organizations.
    Question 3. Last week, before the House Judiciary Committee, Mr. 
Hutchinson asked a former cartel member what he felt was the greatest 
tool or weapon that law enforcement has against drug traffic. The 
answer was simple and straight forward: Extradition. To quote, ``that 
is the real weapon that the United States can wield to end the war 
against drugs . . .'' I realize he was speaking of Colombia, but its 
only logical that the same would hold true for Mexico. What actions is 
the United States taking to pressure Mexico to extradite drug 
traffickers? I am aware of the current list of those who have been 
extradited or expelled, but how does this compare with the number of 
outstanding requests that the United States has with the GOM? Do you 
believe that the GOM would extradite Ramon Arellano-Felix, now on the 
FBI's 10 most wanted list, to the US if he is arrested? Do you feel the 
GOM is presently making a full faith effort to pursue and capture him?
    Answer. The United States is continuing to work very closely with 
our Mexican counterparts to improve the bilateral extradition 
relationship not only with respect to drug traffickers, but also with 
respect to violent and heinous criminals who flee across the common 
border. The basic, if ever changing, numbers and statistics in the area 
of extradition requests to Mexico are set forth in the response to 
Question (2). Although there is clearly room for improvement in the 
number of fugitive surrenders each year by both governments, the 
extradition or expulsion of more than 20 fugitives by Mexico already in 
1997 is a sign of continuing improvement. With regard to your question 
about Ramon Arellano-Felix, there does seem to be a good faith 
commitment by the Government of Mexico to locate and apprehend him, 
particularly because of the increasing violence being perpetrated by 
the Arellano-Felix Organization against law enforcement officials and 
witnesses in Mexico.

                                Weapons

    Question 4. My understanding is that Mexico has indicated that 
there is no possibility of resolving the issue of U.S. personnel at the 
borders carrying weapons on official duty in Mexico. In the past, 
especially in the border areas, Mexican police assigned as security for 
U.S. law enforcement have been in the pay of drug cartels. They have 
been armed by those cartels. This means no security. It also means the 
potential for compromising operations or information received by border 
task forces. What are the chances for a resolution on this issue? How 
do you plan to deal with the situation if a U.S. official is killed or 
kidnapped?
    Answer. Because of concern for the safety of U.S. law enforcement 
personnel, we have decided not to assign them to the border task forces 
until we are satisfied that adequate measures are in place to assure 
their safety. Both the U.S. and Mexican governments are concerned with 
the safety of law enforcement personnel, and are working hard to ensure 
every measure available is considered to assure that safety. It is 
counter-productive to discuss in a public forum what those measures are 
or might be. If an agent were kidnapped or killed it would be a human 
tragedy and a setback to our drug policy. We will take every reasonable 
action to prevent such an event from happening.

                             Certification

    Question 5. The most recent High Level Contact Group meeting 
allowed for a careful review of the current state of cooperation 
between the United States and Mexico. Last year seizures, eradication, 
and destruction of labs and runways were all increased and all listed 
as reasons for certifying Mexico. Do you believe that Mexican efforts 
in these areas are equal to or greater than their efforts last year? 
Should Congress then expect similar or greater numbers in these areas?
    Answer. Bilateral counterdrug cooperation between the U.S. and 
Mexico improved last year. The GOM has increased drug seizures, illicit 
drug crop eradication, and the destruction of labs and runways. We 
consider these actions important indicators of the strong political 
will of the Zedillo Administration to combat drug trafficking.

                  Questions Submitted by Senator Biden

       Transferring 73 UH-1H Helicopters to the Mexican Air Force

    Question 1. You testified that the Department of Defense is 
``transferring 73 UH-1H helicopters to the Mexican Air Force . . . and 
four C-26 fixed wing turboprop aircraft'' for use in counterdrug 
efforts. The reports submitted to Congress indicated that all 
helicopters would be delivered by September. How many of these aircraft 
have been transferred to date? Are all of the aircraft which have been 
transferred fully operable? What is the average number of flying hours 
per month logged by these aircraft? What type and how many similar 
aircraft--in addition to these transferred assets--does the Mexican 
Armed Forces devote to counter drug efforts?
    Answer. According to the U.S. Embassy in Mexico City, the GOM has 
received all 73 UH-1H helicopters programmed to be transferred. The 
last 25 helicopters were delivered in September 1997. The GOM is 
required to provide actual UH-1H operational status on a bimonthly 
basis. According to the most recent published report 41 UH-1H 
helicopters were operational on October 1, 1997.
    The Department of Defense is responsible for End-Use Monitoring of 
the aircraft in question, including review of the number of flight 
hours logged for which type missions. The Department of Defense will 
respond separately to these questions.

               Enhanced Maritime Interdiction Cooperation

    Question 2. Your statement indicated that there is enhanced 
cooperation in maritime interdiction. Has there been any effort to 
reach a formal agreement on cooperative maritime efforts with Mexico, 
such as are currently in place between the United States and several 
nations in the Caribbean? If not, why not? If so, what has been the 
result of such discussions? Are these discussions likely to result in 
an agreement in the near future?
    Answer. The main objective of our maritime interdiction 
relationships with transit zone countries is to achieve the most rapid 
and effective response to drug smuggling cases possible. Formal 
maritime counterdrug agreements help achieve that objective.
    Mexico has significant constitutional and political obstacles to 
entering into a formal maritime counterdrug agreement such as we enjoy 
with other nations in the region. Mexico's military organizations are 
prohibited from conducting combined operations with U.S. forces. 
However, the Mexican government in general, and the Mexican Navy in 
particular, is very aware of the maritime narcotics threat to their 
nation. They are being proactive, within the bounds established by 
their resources and Constitution.
    The U.S. Coast Guard has a long standing cooperative relationship 
with the Mexican Navy in the areas of search and rescue, marine 
environmental protection, and fisheries law enforcement. They also 
improved the level of cooperation with the Mexican Navy in maritime 
drug interdiction. Communications links have been established for the 
purpose of exchanging tactical interdiction information between USCG 
and Mexican Navy operational units. The Mexican Navy has been 
responsive in many cases, and has implemented their own operation to 
complement Operation GULF SHIELD taking place at our Gulf of Mexico 
border. The USCG and Mexican Navy also conduct ``coincidental'' 
operations which involve unique coordination procedures, but, in 
essence, accomplish many of the objectives ``combined'' operations do 
with other nations.
    A good working relationship currently exists, and both sides are 
working closely together at all levels, including the U.S.-Mexico High 
Level Contact Group (HLCG), to block maritime transportation of illegal 
drugs more effectively. We are moving ahead by continuing to build a 
relationship of familiarity and trust through informal contact, and are 
steadily expanding ``coincidental'' operational cooperation.
    Question 3. The Washington Post of November 2, 1997 reported on an 
incident involving a Border Patrol agent in Texas finding narcotics 
stashed on a railway freight car. Does any agency of the Executive 
Branch have reason to believe that any Mexican freight companies are 
owned or controlled by organizations involved in narcotics trafficking?
    Answer. We would be pleased to discuss with the Senator such 
information as is available to agencies of the Executive Branch in a 
classified setting, understanding that we cannot comment on ongoing 
cases.

                            Asset Forfeiture

    Question 4. The Report to Congress highlights deficiencies in 
Mexico's asset forfeiture law. For example, the report notes that the 
law does not provide for in rem civil forfeiture proceeding, and does 
not provide for international forfeiture cooperation and asset sharing. 
What steps is Mexico taking to remedy these deficiencies? What steps is 
the United States taking to encourage Mexico to address these 
deficiencies? Are assets which are seized under the Mexican law 
converted for use by law enforcement authorities?
    Answer. As noted in the September Report to Congress on Bilateral 
Counter-drug Cooperation, Mexico has made progress in improving its 
asset forfeiture laws. The GOM has engaged in a serious effort to 
revise and enact legislation that should position it to confiscate the 
proceeds of crime as part of its domestic prosecutions, and to 
cooperate to an even greater extent with the United States and other 
countries.
    Mexico's Organized Crime Law was enacted in November 1996, and 
provides for the freezing and forfeiture of assets related to the 
underlying organized criminal offense. Under the law, seized assets can 
be used and disposed of, as determined by a government council. Draft 
legislation is currently pending that would regulate Mexican agencies 
involved in seizing assets by setting guidelines on how to administer 
the seized assets so that they remain stable until final adjudication. 
The Organized Crime Law provides for the pre-trial restraint and 
seizure of assets that might be subject to forfeiture, as well as 
supervising the maintenance and custody of restrained assets.

               Enhanced Maritime Interdiction Cooperation

    Question 5. How much has the Mexican government expended, at the 
national level, on counternarcotics efforts in 1997? How does that 
compare to the previous two years?
    Answer. Although the GOM does not disclose the amount of funds 
expended for counternarcotics efforts, increased maritime efforts and 
enhanced communication along the border suggest an increase in the 
amount expended by the GOM.
    Given President Zedillo's decision to temporarily expand the role 
of the Mexican military in counterdrug missions, development of 
effective military counterdrug capabilities was essential. The two 
governments began cooperating on an extensive range of issues involving 
U.S. and Mexican military counterdrug interdiction efforts. The 
Department of Defense (DOD) has established a highly successful 
training and equipment program for the development of an air-mobile, 
rapid-reaction, counterdrug capability to support drug interdiction 
efforts in Mexico. In FY97, Mexican personnel filled about 1500 quotas 
in U.S. conducted counternarcotics training: this represents over 825 
individuals trained in a mix of skills and the training was fairly 
evenly split among Mexican Army, Navy, and Air Force personnel. In 
FY98, Mexicans will fill over 1000 training quotas in counternarcotics-
related training. Among its training, this program includes aircraft 
maintenance training, communications training, intelligence and 
counterintelligence training, UH-1H pilot training, Special Forces 
training, cadre development, and maritime counterdrug training.
    Maritime counterdrug operations gained new significance in FY 97, 
as both governments recognized the increased threat posed by maritime 
transport of cocaine, marijuana, precursor and essential chemicals, and 
other related contraband, both in commercial shipping and in smaller, 
high performance ``go-fast'' boats. Mexico and the United States made 
advances in the areas of training, information exchange, and 
cooperative maritime law enforcement.
    DOD and the U.S. Coast Guard (USCG) developed a maritime 
counterdrug training program to train Mexican naval forces for 
operations in a marine/coastal and riverine environment. More than 600 
Mexican Navy personnel will receive this training in 1997. Mexico also 
acquired two U.S. Knox class frigates for use in a maritime counterdrug 
role, and DOD will provide training to assist in developing this 
capability.

                        U.S./Mexico Cooperation

    Question 1. How would you respond to the charge that all the 
ongoing meetings between us and the Mexicans (the HLCG, the U.S./Mexico 
Binational Commission, and technical and consultative groups), we 
suffer from the phenomenon of ``always being in a huddle and never 
running a play?'' Do you agree that the U.S. should be prepared to 
assist Mexico by funding salaries and expenses for law enforcement 
personnel as well as training them?
    Answer. Regular, senior level drug policy meetings between 
officials of both governments are essential because they maintain high 
level attention and commitment to the drug issue and make progress on 
specific issues more likely. The High Level Contact Group (HLCG), for 
example, has produced a joint assessment of the drug threat and is 
finalizing a common strategy against the drug threat. These documents, 
along with the Declaration of the Mexican/U.S. Alliance Against Drugs, 
help focus and prioritize cooperation on the common drug issue. 
Attempting to work specific drug initiatives in the absence of higher 
level governmental involvement would be futile.
    As examples of concrete progress resulting from high level 
cooperation, Mexico has criminalized money laundering and is working 
with relevant U.S. agencies to develop a capability to implement and 
enforce those new laws. Mexico has facilitated procedures to authorize 
counterdrug overflight and refueling, and we are jointly exploring 
enhanced counterdrug coordination at sea. Effective binational 
information sharing and operational coordination halted the use of the 
cartels of large cargo airplanes to ship cocaine from Colombia to the 
U.S.-Mexico border region and onward into the United States. Mexico has 
invited U.S. technical support in its effort to strengthen its 
counterdrug institutions and is beginning the complex process of 
restructuring the country's judicial infrastructure.
    As a result of military-to-military cooperation and the efforts of 
the bilateral working group, we achieved agreement on port visits, 
refueling, overflight request coordination, and overnight stays. The 
Mexicans have consistently supported this agreement and the resulting 
cooperation has improved bilateral detection, monitoring, and 
interdiction.
    In its efforts to develop a corruption-free anti-narcotics force, 
the government of Mexico (GOM) is advancing a significantly enhanced 
package of pay and benefits for the members of the vetted units. These 
units and their continued expansion are part of a comprehensive GOM 
strategy to reform the Office of the Attorney General (PGR) overall. 
The PGR has improved its recruitment and selection procedures, and has 
expanded its training course for judicial police from nine months to 
two years. We believe the U.S. could assist Mexico with salaries and 
expenses for law enforcement personnel, if funds were made available, 
however, Mexico has been unwilling to consider such assistance due to 
sovereignty concerns.

                               __________
   Additional Questions Submitted for the Record to Jeffrey Davidow, 
        Assistant Secretary of State for Inter-American Affairs

                  Questions Submitted by Senator Helms

                    1. Effects of Political Changes

    Question. With the recent changes in the political makeup of the 
Mexican House of Delegates, what impact do you see this will have on 
the future of US-Mexico counternarcotics cooperation? Is there a role 
for Congress to play in fostering this understanding?
    Answer. Mexico's mid-term elections held in July marked a momentous 
step in the country's political transition. The dominant Institutional 
Revolutionary Party (PRI) lost its absolute majority in the Chamber of 
Deputies (the lower house of the Mexican Congress) for the first time 
in the party's 68-year history. The majority in the chamber is now 
narrowly held by a combination of four opposition parties, the two 
largest of which are the left-of-center party of the Democratic 
Revolution (PRD) and the right-of-center National Action Party (PAN). 
These four parties have formed an informal alliance in the chamber 
which has held together so far. We do not expect this new political 
alignment to affect bilateral counternarcotics cooperation in a 
fundamental way although the Mexican Congress has made clear that it 
expects the executive branch to consult it on these and other issues. 
Both governments recognize that causes and effects of the drug menace 
are found on both sides of the border and that the security of both 
nations is seriously threatened by drug trafficking. There is also 
widespread agreement that continuing and enhancing our bilateral 
cooperation against drugs is the only path that will yield significant 
positive results. The opposition parties in the Chamber of Deputies are 
nonetheless intent on making the legislature function as a co-equal 
branch of the government with the executive and driving home the point 
that the PRI no longer dominates the lower house. We expect, therefore, 
that there will be modifications to some government programs, greater 
scrutiny of government budget initiatives, and increased congressional 
demands for information in many fields, including counternarcotics 
cooperation with the U.S. We do not see this as a cause for alarm but 
rather as the normal functioning of a pluralistic democratic system. We 
believe our own Congress can play an important role in enhancing 
communications with Mexico, and in particular with Mexican legislators 
as they expand their own voice in policymaking. We seek to facilitate 
as much direct contact as possible between U.S. and Mexican 
legislators.

                             2. Extradition

    Question. Last week, before the House Judiciary Committee, Mr. 
Hutchinson asked a former cartel member what he felt was the greatest 
tool or weapon that law enforcement has against drug traffic. The 
answer was simple and straightforward: Extradition. To quote, ``that is 
the real weapon that the United States can wield to end the war against 
drugs . . . Its the law that is much more strict and there is no way of 
fixing it up . . .'' I realized that he was speaking of Colombia, but 
it is only logical that the same would hold true for Mexico.
    What actions is the United States taking to pressure Mexico to 
extradite drug traffickers? Do you believe that the GOM would extradite 
Arellano Felix, now on the FBI's 10 most wanted list, to the U.S. if he 
is arrested? Do you feel that the GOM is presently making a full faith 
effort to pursue and capture him? How many outstanding extradition 
requests does the United States currently have with Mexico?

    Answer. Extradition of drug traffickers from Mexico who are under 
indictment in the United States is a very high priority for us. We make 
this very clear to the Mexican government, frequently, and at high 
levels. Mexico's willingness to make use of the limited discretion 
available under its national law which permits its nationals to be 
extradited under ``exceptional circumstances'' contributes greatly to 
the strength of our cooperative efforts on fugitives issues. Mexico has 
utilized this authority in cases relating to drug traffickers, and has 
indicated that it will continue to consider utilizing the authority in 
major drug trafficking cases. The barrier to U.S. prosecution of 
Mexican fugitives posed by Mexican law is being overcome, but the 
process is slow, and we are pressing Mexico to improve the pace. As of 
November 15 of this year, Mexico has extradited thirteen fugitives to 
the United States. Of the thirteen cases, six were extradited for drug 
crimes. In addition, Mexico expelled ten others to the U.S. whose 
extradition was requested. Of the ten, one is for drug related crimes. 
There were no Mexican nationals among the 33 extradited or expelled to 
the U.S. to date in 1997. In 1996, Mexico extradited one Mexican 
national and one dual national to the United States, neither for drug 
crimes. This year, in addition to the thirteen extraditions noted 
earlier, Mexico has found four Mexican nationals to be extraditable to 
the U.S. The surrender of these individuals has been deferred pending 
appeals or completion of domestic sentences for crimes committed in 
Mexico. Of these four extraditions, three are for drug offenses. The 
Arellano Felix organization has been the subject of intensified efforts 
by the U.S. and Mexican governments, as noted in the President's 
``Report to Congress on Bilateral Counter-Drug Cooperation'' issued in 
September and the ``U.S./Mexico Bi-National Drug Threat Assessment'' 
issued in May 1997. in the past 15 months, ten individuals within the 
cartel's hierarchy have been arrested and are in prison. Last month, 
the GOM provisionally arrested a high-level member of the organization, 
Arturo Everardo Paez Martinez, who is a Mexican and not a dual 
national. We are pursuing his extradition as ``exceptional'' to enable 
his extradition to the United States despite Mexican nationality. With 
respect to Ramon Arellano Felix, the head of this criminal 
organization, we have filed our request with the Mexicans for a 
provisional warrant for his arrest and have stressed to the Mexican 
government the importance of capturing him for extradition to the U.S. 
As of October 1997, there are approximately 126 active extradition 
matters pending with the Government of Mexico.

                 3. Role of Radar in Drug Interdiction

    Question. The percentage of illegal drugs crossing our border from 
Mexico continues at an alarming rate. One of the main modes of 
transportation for smuggling ventures responsible for drugs being 
transshipped from South America through Mexico into the U.S. is through 
the use of various aircraft. The role of ground based radar has proved 
successful in the interdiction of illegal narcotics in other areas of 
the world, including where there is a radar net in place in Mexico. 
However, intelligence indicates that drug traffickers have learned to 
circumvent the existing radar system and use alternate smuggling routes 
as a result of gaps within the existing system. When President Zedillo 
visited Washington in March of 1995, he promised the U.S. that Mexico 
would establish a radar net to fill these gaps. To date, no radars have 
been installed. What is your assessment of the threat of air smuggling 
into and out of Mexico?

    Answer. Patterns of drug transportation to and from Mexico have 
evolved since large-scale air shipments were noted several years ago. 
Drug smugglers now rely much more heavily on land and maritime surface 
transportation. The question thus has become one of where to invest 
Mexico's limited counterdrug resources. Installation of an expensive 
ground-based radar system at this time would commit a large proportion 
of Mexico's available resources against a relatively small proportion 
of the drug traffic. The Mexican government has said that it believes 
that a new radar system is not its most cost-effective counterdrug 
investment under current circumstances.

                           4. Arms Smuggling

    Question. Drug cartels and criminal organizations are very well 
armed to facilitate their illegal enterprises. What is the United 
States doing to prevent the trafficking of illegal firearms into Mexico 
from the United States?

    Answer. The United States shares Mexico's concern over the problem 
of transnational illicit trafficking in firearms in our hemisphere, 
particularly as it affects both our nations. As the President and 
President Zedillo agreed in their May 1997 Alliance Against Drugs, the 
United States worked closely with Mexico and other hemispheric nations 
to develop the Inter-American Convention Against the Illicit 
Manufacturing of and Trafficking in Firearms, Ammunition, Explosives 
and Related Materials. The Convention was signed at the OAS 
headquarters in Washington on 14 November with Presidents Clinton and 
Zedillo in attendance. The Convention, the first of its kind in the 
world, was based on a Mexican proposal presented to the RIO group of 
the OAS earlier this year. The original draft underwent significant 
changes over 6 months as various OAS member states, including the U.S., 
offered language to make the agreement not only comprehensive but 
enforceable. The agreement does not require changes to existing U.S. 
laws or regulations concerning the purchase, possession, or 
commercialization of items covered by the Convention. The U.S. is 
already fulfilling by law or regulation the requirements contained in 
this instrument. Instead, the Convention seeks to prevent the illegal 
traffic of these items across borders by requiring signatories to, 
inter alia, mark all firearms at the time of manufacture or 
importation; designate a point of contact to facilitate the exchange of 
relevant information concerning matters covered by the convention; make 
the crimes of illicit manufacturing of and trafficking in firearms, 
etc. an extraditable offense, and pledge to exchange relevant technical 
information to improve their respective effectiveness in combating this 
crime.
    The United States also worked intensely over the last four years as 
part of an OAS group of experts of the Inter-American Drug Abuse 
Control Commission's (CICAD) to develop a package of model regulations 
to control the movement of firearms, ammunition and firearms parts and 
components, which was approved in a CICAD general assembly held in Lima 
in early November and which will complement the terms of the 
convention. In addition, Mexico and the United States, through the 
bilateral high-level group, have made significant progress in the areas 
of confidence building among our respective law enforcement agencies in 
information sharing, training, and the tracing of firearms used in 
crimes.

                            5. Vetted Units

    Question. I understand that U.S. agents who have been assigned to 
the Border Task Forces (BTF) are often senior experienced 
investigators. They are working with their Mexican counterparts who, 
due in large part to the strict vetting process, are very inexperienced 
and relatively new to law enforcement work. Currently, the BTF lacks 
secure communications, and U.S. law enforcement personnel cannot bring 
their firearms when they cross into Mexico. Earlier this year there 
were also questions as to the availability of basic equipment for the 
BTF.
    What is the current state of readiness for the BTF? When do you 
expect them to be fully operational? What U.S. or Mexican resources are 
necessary to bring the BTF up to speed? Does this mean that we have 
vetted units operational that are not working because they need 
assistance from the experienced U.S. agents?

    Answer. We are working steadily with Mexican authorities to get the 
border task forces fully functional. The Zedillo administration's 
pursuit of far-reaching institutional reform has had an impact on the 
border task forces (BTF). In April, the Mexican government announced 
that personnel of the BTFs would be replaced by the top graduates of 
the May 1997 PGR Academy class, who would be properly vetted. The 
vetting process examines them for drug usage, checks their personal 
finances and lifestyle, and subjects them to polygraph screening. The 
three border task forces are based in Tijuana, with satellites in 
Mexacali, San Luis Rio Colorado and Nogales; Ciudad Juarez; and 
Monterrey with satellites in Reynosa and Metamopas. All of these are 
operational to a certain extent. Their actions since the restructuring 
began in May have been limited to organizational activities as the new 
personnel are screened and trained. In addition to 70 Mexican law 
enforcement agents, there are 150 military special reaction forces 
assigned to the three border task forces. In July, the GOM formally 
authorized an increase in the number of U.S. law enforcement personnel 
assigned to Mexico, adding six DEA and six FBI special agents to 
support U.S. investigations and work with Mexican counterparts.

                          6. Money Laundering

    Question. In May, 1996, Mexico passed legislation as part of the 
Mexico Criminal Code that for the first time makes money laundering a 
criminal offense. Because of the international aspect of money 
laundering, cooperation between countries when investigating money 
laundering cases is essential.
    Has the level of cooperation and information sharing improved 
between Mexico and the United States since this legislation passed? Has 
any individual or organization been charged under this new law and if 
not, why? Also, have any institutions been identified as laundering 
problems? What kind of intelligence sharing between US and Mexican 
investigators is occurring?

    Answer. We engage the Government of Mexico on money laundering 
primarily through a Treasury Department-led interagency working group 
of the U.S.-Mexico High Level Contact Group. Cooperation between the 
U.S. and Mexico in the area of money laundering has increased in the 
last year and a half. The U.S. and Mexico share information on 
individual cases and are working together on a number of 
investigations. On at least two occasions, Mexican officials have 
testified in the U.S. Additionally, earlier this year, as the result of 
a joint investigation with U.S. Customs, Hacienda agents seized 
approximately 16 million dollars in 11 bank accounts belonging to 
reputed drug trafficker Roberto Gaxiola-Medina. Mexico and the U.S. 
also are exchanging some information to try to determine overall trends 
in money laundering. The Government of Mexico, for example, has 
provided Treasury's Financial Crimes Enforcement Network (FINCEN) with 
data regarding currency reports it receives on currency being brought 
into Mexico from the U.S. FINCEN has compared this data to U.S. 
information and provided the resulting report to the Mexican 
government. In the past, the U.S. has voiced its concern regarding the 
status of money laundering prosecutions in Mexico. The Government of 
Mexico has indicated that 15 successful money laundering convictions 
have been obtained in Mexico since 1994, and that there have been four 
indictments this year under the new law. There have been no convictions 
as yet. One major concern arises from a Mexican court ruling earlier 
this year in a still ongoing case. A judge ruled in the case of money 
laundering charges against Raul Salinas that such charges could not be 
brought until Salinas had been convicted for the underlying predicate 
offense. This could diminish substantially the incentive to prosecute 
money laundering, and the prospects for a successful prosecution. The 
Government of Mexico has reported that it is appealing the Salinas 
decision and that it is considering legislative measures to clarify the 
authority to prosecute money laundering under less stringent 
evidentiary standards.

                        7. Secure Communications

    Question. It is my understanding that as recent as two weeks ago 
the availability of secure lines for communication with vetted units in 
Mexico has not been resolved. In addition, I have heard reports that 
there is no secure communications between our consulates and the 
Embassy in Mexico City. As I am sure you are aware, secure 
communications is essential to running not only a successful foreign 
policy but in conducting a proper investigation. What is your 
understanding of this problem and is there a solution underway?

    Answer. Arrangements for secure communications with Mexican 
military headquarters, the Border Task Forces (BTFs), and Mexican 
military elements along the border are moving ahead, albeit slowly. 
Much of the delay is caused by Mexican indecision on such factors as 
how best to operationally employ secure communications with the U.S. 
within the structure of the various Mexican organizations. We continue 
working closely with Mexican authorities to resolve such questions and 
move ahead with installation and testing of the necessary equipment. 
With respect to secure communications between our Embassy in Mexico 
City and consulates, classified communications currently exist by means 
of secure voice and classified fax. In addition, links using STU-III 
technology are being established between the consulates and the 
Embassy's Classified Local Area Network (CLAN). This will allow users 
in consulates to send and receive classified record communications 
traffic as well as send and receive classified e-mail through the 
Mexico City CLAN. The first link (with Consulate General Monterrey) is 
being installed and tested during the first week of December 1997, with 
country-wide installation scheduled for the following six months. 
Priority will be given to the larger consulates.

                  Questions Submitted by Senator Biden

    Question. In your statement, you indicated that the extradition of 
four Mexican nationals wanted on drug charges in the United States were 
``postponed pending completion of their appeals or sentences for crimes 
committed in Mexico.'' Please provide the following:

   The names of these individuals, and whether their 
        extradition has been postponed because of (a) appeal; or 
        (b)sentencing for crimes committed in Mexico;
   the criminal charges that they face in the United States, 
        and the name of the jurisdiction in which those charges are 
        filed;
   the expected date of the resolution of their appeals, where 
        applicable.

    Answer. The requested information on the four Mexican nationals is 
as follows:

    1. Jesus Emilio Rivera Pinon is wanted in the Southern District of 
Texas on cocaine trafficking and conspiracy charges. He is serving a 
prison sentence in Mexico and his surrender will therefore be deferred 
until March 2002.
    2. Jaime Arturo Ladino Avila: extradition granted in September 97; 
he has filed an appeal challenging the GOM decision to extradite him. 
Expected date for the resolution of the appeal is unknown. He is wanted 
on federal narcotics trafficking charges in the District of Oregon. 
Expected date for the resolution of the appeal is unknown. It is 
difficult to state with any certainty how long an appeal process can 
take to be resolved in Mexico. In the past, some cases have been 
resolved in a few months, others have taken over a year.
    3. Oscar Malherbe: extradition granted July 97; surrender deferred 
to allow domestic prosecution for charges pending against him in 
Mexico. (Malherbe is a former high-ranking member of the Garcia-Abrego 
crime cartel.) He is wanted by the Southern District of Texas for 
narcotics and money laundering.
    4. Tirso Angel Robles: Robles was convicted in the Eastern District 
of California on federal drug trafficking charges, and sentenced to 20 
years. After serving 3 years, he escaped to Mexico. He was arrested in 
Mexico pursuant to our extradition request. Extradition granted in 
March 97. He has filed an appeal challenging the GOM decision to 
extradite him. Expected date of the resolution of the appeal is 
unknown.

    Question. You indicated in your statement that the United States 
and Mexico have reached agreement on the text of a protocol to the 
U.S.-Mexican extradition treaty which will permit sequential trials in 
the two countries in cases where there are charges against an 
individual in each country.
    When will this protocol be signed?
    Does the protocol make any other revisions to the current 
provisions of the bilateral extradition treaty? Are any other revisions 
to the treaty under negotiation?
    Do you expect that it will be submitted to the Senate for its 
advice and consent? If not, why not?

    Answer. On November 13, 1997, the United States and Mexico signed a 
protocol to the 1978 Extradition Treaty enabling temporary surrender of 
persons wanted for trial in both countries. The protocol will be 
transmitted to the Senate for its advice and consent to ratification. 
The protocol does not alter any other provision of the extradition 
treaty, nor are any other amendments or additions to the treaty under 
consideration.

                               __________
Additional Questions Submitted for the Record to James S. Milford, Jr., 
  Acting Deputy Administrator, Drug Enforcement Administration, U.S. 
                         Department of Justice

                  Questions Submitted by Senator Helms

                        U.S.-Mexico Cooperation

    Question 1. DEA Administrator Thomas Constantine asserted earlier 
this year that there is not a single Mexican law enforcement agency 
with which DEA has a completely trusting relationship. Is there a 
single Mexican law enforcement agency with which the DEA has a 
completely trusting relationship today?
    Answer. When the Administrator made that statement last March, it 
was an accurate assessment of the situation at the time. Since then, 
mechanisms have been put in place within the Mexican government that 
DEA believes will help improve the integrity of individuals and units 
with whom we work. The ultimate proof however, will be whether these 
organizations are able to make cases which lead to the arrest and 
incarceration of Mexico's major traffickers. Following the arrest of 
General Jesus Gutierrez Rebollo, the Mexican Attorney General's Office 
announced that it would commence extensive institutional reforms aimed 
at professionalizing its law enforcement personnel. Currently, the 
Government of Mexico (GOM), with significant U.S. support, has 
initiated an integrity assurance program (``vetting process'') that 
consists of personnel undergoing a battery of background checks, 
psychological testing, urinalysis testing, polygraph testing, financial 
background investigations, and a home visit of the candidates.
    Recently, the FEADS stated that their plan calls for having a total 
of 3,000 employees who will be fully vetted under Mexico standards. The 
FEADS anticipate to have this accomplished by the end of their fiscal 
year which is December 1, 1998. At the request of the Mexican 
Government, the DEA, FBI and USCS have assisted in a second level 
vetting process referred to as ``Super Vetted.'' The failure rate for 
applicants in the super vetting process is approximately 40 percent. As 
of December 1997, a total of 206 Mexican Agents and Prosecutors have 
been super vetted, and 92 of these super vetted personnel have attended 
a four week investigators course in the Washington, D.C. area. DEA in 
conjunction with DOJ, FBI and US Customs Service will conduct 
additional training sessions during FY 1998 for super vetted agents and 
prosecutors. The first class is scheduled to commence during January 
1998 and will consist of 45 candidates.
    DEA believes that this vetting process is our best chance at 
ensuring integrity with our counterparts and we further believe that 
the GOM is taking appropriate steps to minimize corruption in drug law 
enforcement. That said, it must be noted that no system is failsafe 
from the corruptive influences of the major drug trafficking 
organizations. The vetting process requires continual revalidation and 
is only as good as highest level official who has been cleared.
    It is DEA's intention to remain actively engaged with law 
enforcement counterparts from Mexico in our mutual efforts to dismantle 
the violent international drug trafficking syndicates.

    Question 2. What cooperation does the DEA have with Mexican 
counterparts today? Is that practical cooperation more or less active 
than it was 12 months ago?
    The level of information sharing today between DEA and our 
Government of Mexico (GOM) counterparts has improved since early 
January 1997, when the then-head of the INCD, General Gutierrez-
Rebollo, was arrested on corruption charges. Subsequent to the Generals 
arrest, DEA suspended all information sharing with Mexican counterparts 
until we could fully assess the damage done as a result of this 
compromise. DEA lifted the temporary ban on information sharing in May 
1997, and our agents assigned to our Mexico Country Offices began 
sharing limited information with elements within the Organized Crime 
Unit, and the Binational Task Forces (BTF's). However, because of agent 
safety issues, our agents assigned to domestic border offices are not 
engaged in any active information sharing with the BTF'S, and will not 
fully participate until the safety issues are resolved satisfactorily.
    In response to General Gutierrez's arrest, the GOM announced the 
disbanding the INCD because of rampant corruption, and the commencement 
of extensive institutional reforms aimed at professionalizing its law 
enforcement personnel. One of these measures includes the complete 
screening of all personnel hired or retained by the PGR, as described 
in Question # 1. This process--which includes significant U.S. 
support--has resulted in the creation of specialized units with whom 
DEA is sharing information on a limited basis. While this process is 
still ongoing and not all units are fully functional, DEA is encouraged 
by these steps. In particular, two current bilateral investigations 
continue to progress and to date, no compromise of information or 
intelligence has been detected. In addition, elements within the GOM 
have been particularly forthcoming in sharing with DEA documents seized 
during the course of raids on associates of major drug trafficking 
organizations.
    DEA recognizes that the vetting process is not the ultimate answer 
to the corruption problem; however, we believe the process is a 
significant step in the right direction. Since the inception of DEA 
programs in Mexico, our agents have always been obliged to be 
particularly circumspect in the sharing of information with Mexican 
counterparts. The GOM has been wrestling with widespread corruption 
among its law enforcement officers for decades. DEA Agents have been 
forced to operate in a manner that requires a continual weighing of the 
pros and cons of passing information to Mexican counterparts. Much of 
the information we deal with is sensitive and thus cannot be passed 
unless there are persuasive reasons to believe in the integrity of the 
Mexican unit with whom we are dealing. The reality is that, although we 
work with certain counterparts who are now deemed to have a high degree 
of integrity, we have no control over the entire chain of command, and 
cannot predict what will happen to the information that is passed on.
    Question 3. With respect to the importance of intelligence to 
identify contraband, do you think that the DEA and other US law 
enforcement officials should be allowed more routine contact with 
counterparts and others on the Mexican side of the border to gather 
this information? We have been told that these personnel have to clear 
all such contacts through our Embassy in Mexico City.
    Guidance regarding clearance of contacts has been established by 
US/GOM agreement and is further defined by US mission policy. The 
guidance is meant to ensure agent safety and investigative 
coordination, not to impede bilateral cooperation.
    At each of our six offices in Mexico, DEA has direct contact with 
our Mexican counterparts. With plans underway to open DEA offices in 
Tijuana and Juarez, we anticipate that those contacts will expand.

           Bilateral Border Task Forces/Organized Crime Unit

    Question 1. The ONDCP report describes the border task forces as 
the ``cornerstone'' of US cooperation. How has and how will the DEA 
support these BTF'S? Are new DEA personnel accredited in Mexico posted 
there yet? When exactly will DEA personnel be permanently posted in US 
consulates on the border?

    Answer. In 1996, DEA conceived of the idea of establishing three 
Bilateral Task Forces (BTF) located in Juarez, Monterrey, and Tijuana. 
These elite units were envisioned to be staffed by DEA, FBI, and U.S. 
Customs Agents who would work hand in hand with Mexican counterparts, 
utilizing investigative leads from all participating agencies to target 
the major narcotics trafficking organizations operating on both sides 
of the border.
    However, the BTF's are not fully staffed and are not yet truly 
operational. The primary hindrance to full implementation of, and U.S. 
law enforcement participation in, the BTFs has been the issue of agent 
safety. DEA realizes that this is a very sensitive issue with the GOM, 
but until this issue is satisfactorily resolved, DEA will not assign 
cross-border agents to the BTFS. Without active U.S. support and 
direction, the prospects of future success of the BTFs are dim. 
However, if and when the safety issue is resolved, DEA anticipates 
supporting the BTFs as originally envisioned, with agents assigned to 
work full-time in the BTFs and to share information with the BTFs on a 
daily basis.
    Besides the safety issue, there are other problems with the BTFS. 
There has been a revolving door of Mexican officers assigned to the 
BTFS, some of questionable integrity. The GOM has furnished only 
$600,000 in equipment/resources to the BTFs in 1997. This assistance 
has been in the form of vehicles, technical equipment, and small 
purchases. This figure falls short of the $2.4 million originally 
pledged by the GOM. As of mid-September, at their request, the GOM 
began financing the expenses related to office/safehouse rent and/or 
maintenance. As a result, DEA is not supporting the BTFs financially.
    As of December 1997, The GOM has staffed the BTFs with 41 young 
agents and 2 commandantes who have been super vetted, and who have 
recently attended the training program in the United States. These 
agents come from a variety of backgrounds, but have no prior law 
enforcement experience. Some have college degrees in professions such 
as accounting, engineering and law. Those who do not possess a college 
degree have a high school education along with prior work experience. 
All of the agents are assigned from other cities within Mexico, causing 
them to live apart from their families, as well as operating in an area 
where they do not have a working knowledge of the major drug 
traffickers. The agents appear to be very eager and energetic; however, 
they lack direction and a mission. In short, the agents are hindered by 
their lack of law enforcement experience, their lack of familiarity in 
the area to which they have been assigned, and a lack of leadership.
    Until the safety issue is resolved, and DEA is able to assign 
agents to the BTFS, we will be supporting the BTFs from newly-
established offices in Juarez and Tijuana. A primary responsibility of 
the six new agents assigned to those two offices will be to support BTF 
investigations. We anticipate those offices opening in early 1998. 
However, each of these two DEA offices will have only three agents each 
and their duties will include other responsibilities, such as, 
providing equipment, training and financial assistance to our Mexican 
counterparts and, providing investigative leads to our domestic 
offices.

    Question 2. What support has and will the DEA provide to the 
formation and operation of the new Organized Crime Unit? Special Anti-
Drug Prosecutor's Office (FEADS)? Financial Crimes Unit?
    Answer. DEA's primary support to the Organized Crime Unit (OCU), 
FEADS, and BTF units consist of law enforcement training, investigative 
advise and assistance in the screening process for new candidates. In 
August and September 1997, DEA sponsored a four-week intensive 
investigative analysis seminar at the Xerox Training Center in 
Leesburg, Virginia for approximately 80 BTF and OCU personnel.
    In addition, these units will become the primary recipients of 
sensitive law enforcement information. In an effort to begin this 
process, DEA agents from the Mexico City Office work daily with agents 
and prosecutors of the SFU and OCU providing investigative guidance.
    DEA's interaction with the Financial Crimes Unit is done through 
the Fiscalia or FEADS, which interacts with the Hacienda, or Treasury 
Office, of which the Financial Crimes unit is a part.

                           Seizures in Mexico

    Question 1. Do the Mexicans have an adequate strategy, 
infrastructure and resources to inspect cargo entering and transiting 
their country? Do they inspect the millions of containers arriving at 
their port from South America each year? For example, do they have 
adequate customs inspection at their ports? How have they improved 
their maritime operations? What steps have we taken to assist the 
Mexicans to improve their own ``customs'' inspection? Does the US 
Government have information that the same drugs seized by Mexican 
authorities and credited to their seizure statistics later end up back 
on the illicit drug market?
    Answer. The U.S. Customs Service can more appropriately address 
Customs-related issues, but on the question of adequate inspection of 
cargo in Mexico, it is probably safe to say that no country, including 
the United States, can thoroughly inspect the voluminous quantities of 
cargo that transits its borders. DEA's interaction with the Mexican 
Customs Service occurs primarily through the Information Analysis 
Center (IAC), and consists of coordinating the passing of leads through 
the IAC and CENDRO (Mexican Intelligence Center) to appropriate 
response teams, including Mexican Customs. Mexican Customs is also 
involved in drug seizures at highway checkpoints and other entry points 
in Mexico. Our experience regarding these seizures is that oftentimes, 
there is not a coordinated effort to conduct a follow-up investigation 
subsequent to a seizure. Whereas for DEA, investigations begin when a 
seizure occurs, to determine the source, controller, and recipient of 
the drugs, in Mexico, the seizure itself represents the entire case, 
with little or no follow-up investigation.
    There have been sporadic reports of drugs seized by Mexican 
authorities that end up back in circulation. For example, earlier this 
year, 17 suspects--most of whom had some type of official position--
were arrested in San Luis Rio Colorado, in conjunction with the theft 
of 476 kilograms of cocaine that had been seized and was in a holding 
facility. The investigation into that incident is continuing.
    In addition, neither DOS nor DOJ has any mechanisms in place or 
agreements with the GOM for independent verification of the destruction 
of seized drugs.

                 U.S. Law Enforcement Weapons-Carrying

    Question 1. Do any DEA personnel assigned to Mexico carry weapons 
today for their own defense? Which positions and what diplomatic 
credentials do these persons hold? Isn't it correct that such officers 
to whom the Mexicans have given full diplomatic immunities do routinely 
carry their weapons in Mexico today? Will DEA ``commuter'' agents 
assigned to the BTF's be authorized to carry weapons? Will the 
``consular immunity'' that the Mexicans are offering to ``commuter'' 
agents offer them any protection from arrest or prosecution if they do 
choose to carry their weapons?
    Answer. In May 1997, the GOM agreed to grant privileges and 
immunities (Consular Immunity) to 22 domestic Special Agents to cross 
the border and participate in the BTF program. While this type of 
immunity accredits DEA personnel, it is the lowest form of diplomatic 
immunity and it does not protect them from personal, criminal, or civil 
actions, nor does it allow them to carry firearms for self protection. 
Thus, the firearms issue continues to be unresolved. Because of these 
limitations, the DEA has decided that 22 domestic ``commuter agents'' 
designated for the BTFs cannot cross the border unarmed.
    Thirty-eight (38) of DEA's in-country agents located at the 
resident offices and at the Embassy also have been granted only 
Consular Immunity status. The only DEA employee in Mexico with full 
diplomatic immunity is our Country Attache.
    If you require further details on the weapons issue, we are 
available to discuss it in a closed meeting.

                         Money Laundering Cases

    Question 1. What priority do you attach to building money 
laundering cases? Is it your policy that we should do more to increase 
such prosecutions? What specific steps are being taken to build more 
such cases right here in the United States?
    Answer. DEA places a high priority on the investigation of money 
laundering cases. The ability to dispose of and legitimize their cash 
has created a tremendous concern for drug traffickers. Today, the risk 
of a theft of the traffickers' funds or the interception by law 
enforcement is too great for the major trafficker. Their funds are 
transferred from one account to another before the controlled 
substances are exchanged. By following or tracing these drug proceed 
transfers, we are able to build historical drug trafficking conspiracy 
investigations.
    A money laundering investigation is one of many tools within our 
investigative arsenal that we employ consistently when investigating 
drug traffickers. Today, DEA Headquarters as well as all Domestic Field 
Divisions have groups of Special Agents dedicated to the initiation and 
development of long term money laundering investigations. However, 
intelligence indicates that the traffickers have now turned to the bulk 
shipment of currency back to Colombia and Mexico, in lieu of investing 
their proceeds in the U.S.
    Currently, DEA has instituted steps to initiate more drug money 
laundering cases in the United States. We intend to conduct more 
financial investigative and asset forfeiture training. We further 
intend to increase our staffing in that area, which historically has 
resulted in voluminous seizures and extensive arrests. Additionally, we 
believe as we increase the quality of our investigations, the increases 
in prosecution will be a natural out growth of this endeavor.

                Additional Questions From Senator Helms

    Question 1. You indicated that ``plans call for a total of 2,000 
fully Mexican-vetted employees.''
   What is the projected timetable for accomplishing this goal?
   What resources is the DEA committing to assist Mexico 
        achieve this goal?
    Answer. Recently, the FEADS stated that their plan for having a 
total of 2,000 employees who will be fully vetted increased to 3,000 
employees. The FEADS anticipate to have this accomplished by the end of 
their fiscal year which is December 1, 1998.
    Presently, DEA's focus in this endeavor is assisting the FEADS and 
PGR in the creation and maintenance of the special units, i.e., the OCU 
and the BTFS. In addition to regular Mexican vetting standards, DEA, 
FBI and USCS have assisted the Mexican Government in a second level 
vetting process referred to as ``Super Vetted.'' The failure rate for 
applicants in the super vetting process is approximately 40 percent. 
Based upon GOM figures, as of December 1997, there are 796 employees 
vetted under Mexican standards in the FEAD'S. Of these, a total of 206 
Mexican Agents and Prosecutors have been super vetted, and 92 of these 
super vetted personnel have attended a four week investigators course 
in the Washington, D.C. area. DEA in conjunction with DOJ, FBI and US 
Customs Service will conduct additional training sessions during FY 
1998 for super vetted agents and prosecutors. The first class is 
scheduled to commence during January 1998 and will consist of 45 
candidates.

    Question 2. In your testimony, you indicated that the Bilateral 
Border Task Forces are not ``fully staffed'' yet, and have ``not 
initiated investigations against the major traffickers in Mexico.''

   What is the projected timetable for fully staffing the task 
        forces?
   Have the task forces initiated any investigations at all?

    Answer. The staffing requirements for the BTF's are set by the GOM. 
As stated above, the GOM has staffed the BTFs with 41 young agents and 
2 commandantes who have been super vetted, and who have recently 
attended the training program in the United States. DEA has been 
informed that more vetted agents will be assigned in the future. The 
agents presently assigned come from a variety of backgrounds, but have 
no prior law enforcement experience. Some have college degrees in 
professions such as accounting, engineering and law. Those who do not 
possess a college degree, have a high school education along with prior 
work experience. All of the agents are assigned from other cities 
within Mexico, causing them to live apart from their families, as well 
as working where they are not familiar with the traffickers. The agents 
appear to be very eager and energetic; however, they lack direction and 
a mission. In short, the agents are hindered by their lack of law 
enforcement experience, and their lack of familiarity in the area to 
which they have been assigned
    One of the primary programs for cooperative law enforcement efforts 
with the GOM are the BTFS. These task forces have been established in 
Tijuana, Mexicali, San Luis, Ciudad Juarez, Matamoros, Monterrey and 
Reynosa. Due to inexperience of the vetted agents, the ability of the 
BTF's to collect intelligence and seize drugs has been limited. While 
some of the BTF's have had limited success in pursuing low level 
investigations, they have not met their primary objective of arresting 
the leaders of the major syndicates and dismantling their 
organizations.
    In spite of the problems the BTF's have encountered over the last 
few years, it seems that the Government of Mexico (GOM) has recently 
made some effort to staff the BTF's with reputable personnel. Although 
slow in coming, the GOM has also begun to support the BTF's with money 
and resources. Despite the initial efforts by the GOM, the BTF's will 
not be successful until they are staffed with experienced and reliable 
management and senior personnel. This critical ingredient will be hard 
to find, as qualified experienced law enforcement personnel in Mexico 
are virtually nonexistent. This dilemma is manifested by the turnover 
of personnel at the INCD and FEADS,since 1993. In the four years this 
GOM narcotics enforcement agency has been in existence, there have been 
six Administrators and five Attorneys Generals. To further complicate 
the situation, in the spring of 1997, the INCD was disbanded and many 
of its agents and managers were fired following the arrest of Gen. 
Gutierrez-Rebollo. The BTF's and the FEADS are slowly rebuilding, and 
without the guidance of DEA any success will be slow in coming.

            Questions Submitted by Senator Charles Grassley

                        1. Trust vs. corruption

    Question Mr. Milford, Administrator Constantine testified before 
Congress this past year that ``there is not one single civilian law 
enforcement institution in Mexico with whom DEA has a really trusting 
relationship. That relationship is essential.'' He went on to say that 
following the arrest of General Jesus Gutierrez Rebollo on corruption 
charges any information that was shared with Mexican officials was 
considered compromised. What is the level of information sharing today 
given that the corruption in Mexico is still a serious threat? Does the 
DEA feel the working relationship and level of trust between law 
enforcement agencies on both sides of the border has generally 
improved, or do these same concerns exist?

    Answer. The level of information sharing today between DEA and our 
Government of Mexico (GOM) counterparts has improved from that of 10 
months ago, when the then-head of the INCD, General Gutierrez-Rebollo, 
was arrested on corruption charges. Subsequent to his arrest, DEA 
suspended all information sharing with the Mexican counterparts until 
we could fully assess the damage done as a result of this compromise. 
DEA lifted the temporary ban on information sharing in May 1997, and 
began sharing limited information with selected elements of the 
Organized Crime Unit. However, we do not routinely share information 
with the Binational Task Force Units.
    In response to General Gutierrez's arrest, the GOM announced the 
disbanding the INCD because of rampant corruption, and the commencement 
of extensive institutional reforms aimed at professionalizing its law 
enforcement personnel. One of these measures includes the complete 
screening (``Mexican vetting'') of all personnel hired or retained by 
the PGR. This process-which includes significant U.S. support--has 
resulted in the creation of specialized units with whom DEA is sharing 
information on a limited basis. While this process is still ongoing and 
not all units are fully functional, DEA is encouraged by these steps. 
In particular, two current bilateral investigations continue to 
progress and to date, no compromise of information or intelligence has 
been detected.
    DEA also recognizes that no system is failsafe from the corruptive 
influences of these major trafficking organizations. Since the 
inception of DEA program in Mexico, our agents have always been obliged 
to be particularly circumspect in the sharing of information with 
Mexican counterparts. The GOM has been wrestling with widespread 
incidences of corruption among its law enforcement officers for 
decades. DEA Agents have been forced to operate in a manner that 
requires a continual weighing of the pros and cons of passing 
information to Mexican counterparts. Much of the information we deal 
with is sensitive and thus cannot be passed unless there are persuasive 
reasons to believe in the integrity of the involved Mexican unit. The 
situation is exacerbated by the reality that, although we work with 
certain counterparts who have demonstrated a high degree of integrity, 
we have no control over the chain of command and eventual dissemination 
of our information.

                            2. Vetted Units

    Question With the arrest of the Mexican Drug Czar General Jesus 
Gutierrez Rebollo on corruption charges, the existing vetted units were 
disbanded. What is your assessment of the new expanded vetting process?
    Answer. As discussed above, as a result of General Gutienez-
Rebollo's arrest, the anti-drug agency he headed was disbanded; however 
not all of the vetted units were disbanded. DEA then imposed a 
temporary suspension of information-sharing with the vetted units. 
Since then, the GOM initiated a ``vetting'' process for all personnel. 
This process includes background checks, psychological testing, 
urinalysis, polygraph testing, financial checks and home visits. From 
this cadre, personnel will be selected and undergo additional screening 
as well as specialized training. Successful candidates will then be 
assigned to a series of special units, i.e., the Bilateral Task Forces 
and Organized Crime Unit.
    Recently, the FEADS stated that their plan calls for having a total 
of 3,000 employees who will be fully vetted under Mexico standards. The 
FEADS anticipate to have this accomplished by the end of their fiscal 
year which is December 1, 1998. At the request of the Mexican 
Government, the DEA, FBI and USCS have assisted in a second level 
vetting process referred to as ``Super Vetted''. The failure rate for 
applicants in the super vetting process is approximately 40 percent. As 
of December 1997, a total of 206 Mexican Agents and Prosecutors have 
been super vetted, and 92 of these super vetted personnel have attended 
a four week investigators course in the Washington, DC area. DEA in 
conjunction with DOJ, FBI and US Customs Service will conduct 
additional training sessions during FY 1998 for super vetted agents and 
prosecutors. The first class is scheduled to commence during January 
1998 and will consist of 45 candidates.
    DEA believes that this vetting process is our best chance at 
ensuring integrity with our counterparts and we further believe that 
the GOM is taking appropriate steps to minimize corruption in drug law 
enforcement. That said, it must be noted that no system is failsafe 
from the corruptive influences of the major drug trafficking 
organizations. The vetting process requires continual revalidation and 
is only as good as highest level official who has been cleared.

                               __________
   Additional Questions Submitted for the Record to Samuel H. Banks, 
   Acting Commissioner, U.S. Customs Service, Department of Treasury

                  Questions Submitted by Senator Helms

                        U.S./Mexico Cooperation

    Question 1. DEA Administrator Thomas Constantine asserted earlier 
this year that there is not a single Mexican law enforcement agency 
with which DEA has a completely trusting relationship. Is there a 
single Mexican law enforcement agency with which the U.S. Customs 
Service has a completely trusting relationship today?


    Answer. The Customs Service has a long history of working with the 
Government of Mexico and continues to do so. Much of this cooperation 
is with sections of the Mexican Finance Ministry (Hacienda), including 
Mexican Customs. In the area of money laundering, for example, Customs 
and Hacienda exchange information and work together on joint 
investigations. While Customs is not at the point of declaring totally 
open communication with Mexico, our experience of sharing information 
with Hacienda on money laundering matters has been generally positive.

    We have seen a positive change in Mexican Customs which began in 
1992 with their ``clean sweep'' when, on a single day, the Mexican 
Government terminated the old agency which had border responsibilities 
and brought on an entire new force known as the Fiscal Police. The 
personnel recruited for the new positions are better educated, better 
paid, and highly trained.

    Since then, the government has implemented other changes to 
encourage integrity and minimize opportunities for corruption. No 
longer are duties and other fees collected in cash at the border; all 
financial exchanges are done via credit card arrangement and processed 
through the special government bank. They have instituted a ``traffic 
light'' system to identify shipments to be selected for close 
inspection; when concerns arose that it might be vulnerable to 
manipulation, they immediately set about perfecting it so that 
selection is now absolutely random. Robot cameras have been installed 
to monitor inspection personnel at all ports of entry.

    Mexican Customs agents are now required to use official vehicles, 
with the ``Hacienda'' identification prominently displayed on them, on 
raids and other official business. Mexican Customs established an 
Internal Affairs Division in 1993; personnel are regularly submitted to 
random drug testing. New hires are routinely polygraphed. And, perhaps 
most importantly, a civil service was approved by their Congress and 
created effective in July of this year.

    Besides Mexican Customs, U.S. Customs personnel also work with 
personnel from the Attorney General's Office (PGR) on aviation issues, 
the Mexican Defense Ministry on interdiction issues, and the Finance 
Ministry (Hacienda) on anti-money laundering efforts. Customs has 
maintained an attache at the Embassy in Mexico City for more than 30 
years, and we also have personnel working in other major Mexican 
cities. These U.S. Customs personnel conduct their own investigations 
as well as work with Mexican government officials on issues of mutual 
concern.

    Although Customs routinely cooperates successfully with components 
of the Government of Mexico, we remain concerned about corruption. The 
highly publicized arrests of General Rebollo and other Mexican 
officials confirms our need to be circumspect when dealing with Mexico. 
Given this level of concern, our agents must make judgments about the 
nature and caliber of the information they can share and the persons 
with whom they can share it. The recent arrests, however, are an 
encouraging sign that the Government of Mexico is committed to 
improving the integrity of Mexican law enforcement personnel.


    Question 2. What cooperation does the Customs Service have with 
Mexican counterparts today? Is that practical cooperation more or less 
active today than it was 12 months ago?


    Answer. While we are not yet at the point to declare totally open 
communication with Mexico in the areas of narcotics intelligence and 
operational strategies, we are expanding ways in which to work 
together.

    The following reflects several positive strides that have occurred 
at local levels between U.S. Customs and Mexico Customs:

    The Border Working Group is a forum in which U.S. Customs officials 
and Mexican Customs officials meet to discuss issues of mutual concern. 
U.S. Customs is represented at these meetings by each of the four 
Customs Management Center (CMC) Directors and/or their designees. (This 
working group is attended by only U.S. and Mexican Customs Officials, 
unlike the Border Liaison Mechanism.)

    The Border Liaison Mechanism and the recently inaugurated Forum 
Fronterizo, are praiseworthy representations of Mexico's commitment to 
the development of accord between U.S. and Mexican Customs. Both groups 
have been developed to build a binational network among elected 
officials and business, media, and academic leaders from both sides of 
the international border.

    Also at several cities along the border, the Mexican Consulate 
office has been very proactive in addressing concerns of mutual 
interest. An example of this is the assignment of a full-time consular 
representative to the San Ysidro border crossing within the past year.

    In addition to the coordination of hours of operation and other 
commercial related activities, most Arizona ports have established 
mutual alert systems between themselves and their Mexican counterparts. 
For example, in Nogales an alarm system was jointly developed whereby 
U.S. Customs officials will utilize the alarm system to alert Mexican 
Customs officials of a high speed chase approaching the Port of Entry. 
At Douglas, Mexican and U.S. Customs monitor a radio frequency that 
allows instant communication when problems arise.

    Another avenue of joint cooperation between the United States 
Government and the Government of Mexico is the U.S.-Mexico Chemical 
Control Working Group. The group, consisting of representatives from 
DEA, USCS, U.S. State Department, U.S. Department of Justice, and the 
Government of Mexico, is developing common strategies to control 
import/export of precursor chemicals, develop bilateral agreements, 
prevent diversion of prescription medications, coordinate joint 
investigations, and develop common port of entry practices. At the most 
recent meeting on November 12-14, 1997, in Mexico City, the U.S. 
Customs Service presented information on inspection techniques and uses 
of technology. In addition, U.S. Customs presented 30 advanced drug 
test kits for training of Government of Mexico officers.

    The level of cooperation between the U.S. Customs Service and 
Mexico on money laundering has improved. The Mexicans are providing us 
with Currency and Monetary Instrument Reports (CMIR) to facilitate our 
investigative efforts. Customs has analyzed some of the data provided 
by the Government of Mexico and, as a result of the analysis, has 
initiated investigations of currency smuggling along the Southwest 
Border.

    Recent joint investigations which led to arrests and convictions in 
United States courts and in which Mexico provided assistance include:

    1. Ines Calderon Godoy (1995)--Ines Calderon Godoy is a Member of 
the Arellano-Felix Organization. Federal Court in Arizona charged 
Calderon with money laundering charges and seized $1 million from him.

    2. Heberto Francisco Garcia Valenzuela (1996)--He is the son of 
Heberto Francisco Garcia. Federal Court in Arizona convicted Garcia of 
drug trafficking and money laundering charges. He was sentenced to 25 
years and his father, Heberto was sentenced to 18 years, and $4.5 
million was also seized by the United States.

    3. Francisco Javier Leon Reyes (Investigation opened in 1992 and is 
continuing.)--Federal Court of Arizona convicted Leon for false 
statements on a money laundering investigation. He was sentenced to 
serve 57 months in prison and the U.S. seized $133,000.

    4. Juan Garcia Abrecro (Investigation opened in 1996 and is 
continuing.)--Federal Court in Houston, Texas, convicted Garcia on drug 
and money laundering charges. Garcia was sentenced to serve life in 
prison.

    5. Jesus Echeaollen Barrueta (Investigation opened in 1994 and is 
continuing.)--Federal Court in Brownsville, Texas, convicted Echeaollen 
on drug and money laundering charges. Echegollen was sentenced to life 
in prison and all of his belongings were seized. Associates of 
Echegollen, Guillermina Chavez and Jacob Levy were also convicted and 
Chavez was sentenced to 78 months in prison and had all of her 
belongings seized. Levy received 10 months in prison and was fined 
$15,000.

    6. Mario Ruiz Massieu (Investigation opened in 1995 and is 
continuing)--Mario Ruiz Massieu, former Deputy Attorney General of 
Mexico, was arrested by Customs agents in New Jersey for smuggling 
currency based upon information provided by the Government of Mexico. 
Subsequent investigation led to the seizure and civil forfeiture of $9 
million in drug proceeds maintained by Massieu in a bank account in the 
United States. The civil trial took place in Federal court in Houston, 
Texas.

    Finally, U.S. Customs is an active participant in the Firearms 
Trafficking subgroup on the U.S.-Mexico High Level Contact Group, which 
is responsible for establishing and maintaining cooperation between the 
United States and Mexico on firearms smuggling issues. Earlier this 
year, as an initiative under this subgroup, U.S. Customs established 
liaison contacts at key Special Agent in Charge (SAC) offices along the 
U.S.-Mexico border to share realtime enforcement information with 
counterpart Mexican law enforcement officials on the illegal smuggling 
of firearms and ammunition from the U.S. to Mexico. The program has 
already resulted both in improved communication between U.S. and 
Mexican officers, and in the seizure of significant quantities of 
ammunition smuggled into Mexico from the U.S.


    Question 3. With respect to the importance of ``intelligence'' to 
identify contraband, do you think that the Customs Service and other 
U.S. law enforcement officials should be allowed more routine contact 
with counterparts and others on the Mexican side of the border to 
gather this information? We have been told that these personnel have to 
clear all such contacts through our Embassy in Mexico City.


    Answer. The U.S. Customs Service is one of the primary border 
agencies responsible for the interdiction of drugs smuggled into the 
United States at our ports of entry. This responsibility is in direct 
support of the ONDCP strategy to ``Shield America's Air, Land, and Sea 
Frontiers from the Drug Threat.''

    The Drug Enforcement Administration, per our 1994 Memorandum of 
Understanding (MOU), is required to conduct foreign investigations in 
Customs drug smuggling cases. DEA has the primary responsibility for 
U.S. drug law enforcement activity outside the United States. DEA must 
also service the requests of the host country and its domestic field 
offices.

    The development of additional drug smuggling intelligence for 
interdiction/investigation would benefit Customs interdiction efforts. 
In fact, one multi-agency investigation conducted by Customs, DEA, FBI, 
the U.S. Attorney's Office and the Department of Justice/Criminal 
Division (Operation Reciprocity) has once again raised the need for all 
law enforcement agencies, in particular the U.S. Customs Service 
(because of our unique border interdiction and investigative 
responsibilities) to have improved levels of foreign drug smuggling 
intelligence.

    Operation Reciprocity disclosed that one drug smuggling 
transportation organization located in Grand Rapids, Michigan, 
distributed more than 30 tons of cocaine into New York and Chicago. The 
truck drivers picked up the smuggled cocaine from various stash houses 
in the El Paso area. The group then delivered more than $100 million in 
drug proceeds to the El Paso area for illegal exportation to Mexico.

    On the Southwest Border in FY 96, 3.5 million trucks and rail cars 
entered the United States. More than 900,000 received a Customs 
Examination; of those, 56 narcotics seizures were effected, but only 
one with prior information from an agency other than Customs. In FY 97 
there were 61 cargo related narcotic seizures, again only one with 
prior information from an agency other than Customs. The shear volume 
of cargo, passenger and rail conveyances entering this country 
necessitates improved intelligence to effectively target conveyances 
for examination.

    As has been said many times ``in unity there is strength.'' Customs 
realizes that the success of any effort to collect foreign intelligence 
hinges on institutionalized partnerships with other law enforcement 
agencies. Interagency collaboration, both domestic and foreign, is the 
key to success. The more that agencies and operations reinforce one 
another, the more they share information and resources, the more 
effective will be the outcome of our activities. Currently, Customs is 
involved in several important multi-agency cooperative efforts that 
focus on the joint expertise and efforts of various law enforcement 
entities against the major drug trafficking groups. These include: the 
Southwest Border Initiative, which includes Customs, DEA, FBI, the U.S. 
Attorney's Office, Department of Justice/Criminal Division, and state 
and local authorities; the Customs, DEA, and FBI Special Operations 
Division; and the Treasury/Justice Anti-Money Laundering Conferences 
and working groups (investigators, prosecutors and regulators).

                    U.S. Border Interdiction Efforts

    Question 1. What are your plans (including calendar) for deploying 
technology (such as gamma ray truck and x-ray facilities) at each of 
the ports of entry on the Southwest Border?

    The Customs Service is utilizing large-scale non-intrusive 
inspection systems (mobile and fixed site) at major Southwest Border 
cargo processing facilities to improve the number and intensity of 
commercial cargo examinations. Currently, there are three large-scale, 
fixed-site truck x-ray facilities in operation in Otay Mesa and 
Calexico, California and Pharr, Texas.

    In an effort to expand on the success of this non-intrusive 
inspection equipment, the Customs Service is currently in the process 
of acquiring five additional fixed-site truck x-ray units for major 
cargo processing facilities along the border as indicated below.

                                                                        
                Truck x-ray locations                  Date of operation
                                                                        
Otay Mesa...........................................               8/95 
Calexico............................................               3/97 
Pharr...............................................              10/97 
El Paso (Ysleta)....................................              12/97 
El Paso (BOTA)......................................               5/98 
Nogales.............................................               8/98 
Laredo (Colombia bridge)............................               9/98 
Los Tomates (New border crossing scheduled for 3/99)               3/99 
                                                                        


    In addition to the fixed-site truck x-ray systems, Customs is 
procuring mobile and transportable commercial conveyance imaging 
systems to support layered technology examination operations. These 
mobile imaging systems will be utilized at Southwest Border ports of 
entry to enhance commercial cargo environment enforcement operations at 
locations that do not have fixed-site systems. Additionally, these 
mobile systems will be utilized at the ports of entry to enhance and 
augment commercial cargo enforcement operations. Currently, one mobile 
truck x-ray system is in use in Laredo, Texas. A second, enhanced 
version is under construction and is scheduled to be delivered to the 
Southwest Border in early 1998. In addition to mobile x-ray systems, a 
prototype transportable gamma imagery system designed for the 
examination of tankers is in use in El Paso, Texas.

    Customs is also in the process of installing a prototype passive 
potassium 40 portal detector that is scheduled to be tested at the 
Ysleta Port of Entry in El Paso, Texas, in January of 1998. This system 
was developed to detect nuclear materials but is also capable of 
detecting bulk shipments of marijuana.

    In addition to developing and procuring various forms of 
nonintrusive inspection systems, Customs is implementing a computer 
based, advanced targeting technology through use of the Automated 
Targeting System (ATS) in Laredo, Texas.

    The Customs Service employs a wide variety of smaller scale 
technology in conjunction with the large-scale imaging systems 
indicated above. There are currently 17 stationary pallet x-ray systems 
for cargo in use on the Southwest Border. Customs Service officers 
utilize a wide variety of hand-operated technology to examine 
commercial conveyances including BUSTERS (density detection devices), 
fiber optic scopes (to examine tanks and confined areas,/compartments), 
and laser range finders (LRF's) (used to determine the length of a 
conveyance to detect false walls and compartments).

    In addition to the current and future non-intrusive technology 
advancements at Southwest Border ports of entry, the Customs Service is 
developing and testing particle and vapor detectors, bio-sensors, and 
higher energy x-ray systems for heavy cargo and sea containers, for use 
at Southwest Border ports of entry, as well as high-risk sea and air 
ports.

    Question 2. With respect to the importance of ``intelligence'' to 
identify contraband, do you think that the Customs Service and other 
U.S. law enforcement officials should be allowed more routine contact 
with counterparts and others on the Mexican side of the border to 
gather this information? We have been told that these personnel have to 
clear all such contacts through our Embassy in Mexico City.

    The U.S. Customs Service is one of the primary border agencies 
responsible for the interdiction of drugs smuggled into the United 
States at our ports of entry. This responsibility is in direct support 
of the ONDCP strategy to ``Shield America's Air, Land, and Sea 
Frontiers from the Drug Threat.''

    The Drug Enforcement Administration, per our 1994 Memorandum of 
Understanding (MOU), is required to conduct foreign investigations in 
Customs drug smuggling cases. DEA has the primary responsibility for 
U.S. drug law enforcement activity outside the United States. DEA must 
also service the requests of the host country and its domestic field 
offices.

    The development of additional drug smuggling intelligence for 
interdiction/investigation would benefit Customs interdiction efforts. 
In fact, one multi-agency investigation conducted by Customs, DEA, FBI, 
the U.S. Attorney's Office and the Department of Justice/Criminal 
Division (operation Reciprocity) has once again raised the need for all 
law enforcement agencies, in particular the U.S. Customs Service 
(because of our unique border interdiction and investigative 
responsibilities) to focus on improving the level of foreign drug 
smuggling intelligence.

    Operation Reciprocity disclosed that one drug smuggling 
transportation organization located in Grand Rapids, Michigan, 
distributed more than 30 tons of cocaine into New York and Chicago. The 
truck drivers picked up the smuggled cocaine from various stash houses 
in the El Paso area. The group then delivered more than $100 million in 
drug proceeds to the El Paso area for illegal exportation to Mexico.

    On the Southwest Border in FY 96, 3.5 million trucks and rail cars 
entered the United States. More than 900,000 received a Customs 
Examination; of those, 56 narcotics seizures were effected, but only 
one with prior information from an agency other than Customs. In FY 97 
there were 61 cargo related narcotic seizures, again only one with 
prior information from an agency other than Customs. The shear volume 
of cargo, passenger and rail conveyances entering this country 
necessitates improved intelligence to effectively target conveyances 
for examination.

    As has been said many times ``in unity there is strength.'' Customs 
realizes that the success of any effort to collect foreign intelligence 
hinges on institutionalized partnerships with other law enforcement 
agencies. Interagency collaboration, both domestic and foreign, is the 
key to success. The more that agencies and operations reinforce one 
another, the more they share information and resources, the more 
effective will be the outcome of our activities.


    Question 3. Railroad cars are almost impossible to search, and 
Customs railroad facilities are insecure and inefficient. What measures 
will you be taking to address the extraordinary volume of rail cars 
crossing into the United States each day? What measures are being taken 
to make it easier to inspect containerized shipments?

    Answer. Please see attached document, ``U.S. Customs Service 
Southwest Border Rail Operations.''

      U.S. Customs Service Southwest Border (SWB) Rail Operations

                                Purpose

    This document compiles inspectional, investigative, intelligence, 
and high technology initiatives into a single, multi-year plan to 
address the drug smuggling threat in Southwest Border (SWB) rail 
operations. The U.S. Customs Service envisions a multi-year plan as 
follows:

   Present: Identified threat through existing intelligence, 
        increased inspections, increased seizure activity.
   Present: Identified that smugglers have reacted to U.S. 
        Customs (USCS) and U.S. Border Patrol (USBP) operations on SWB 
        by spreading activity into rail environment.
   Present: Quantified the threat based on USCS rail threat 
        assessment and intelligence briefings.
   Present: Responded to threat with concentrated Strategic 
        Problem Solving (SPS) inspection operations to further narrow 
        focus to the most vulnerable areas. \1\
---------------------------------------------------------------------------
    \1\ Strategic Problem Solving (SPS) is a creative, multi-functional 
approach to detect and apprehend the willful violator. SPS builds upon 
the traditional enforcement efforts of seizure and arrest, and moves 
aggressively to the less traditional efforts of prevention, deterrence, 
and displacement. SPS exercises include four basic elements: 
identification of problem, listing of objectives/expectations, analysis 
and alternatives, and testing/implementation.
---------------------------------------------------------------------------
   Present: Evaluated results of SPS operations, presented 
        internal conspiracy findings to carriers, requested operational 
        changes. Presented findings to executives in Washington, DC and 
        requested support and leverage for carriers to provide 
        necessary infrastructure improvements.
   Present: Commissioner of Customs convened an October 1997 
        meeting with railroad executives, received commitments to 
        construct facilities, received commitments to provide employee 
        background information.
   Present: Committed first carrier to Railroad Carrier 
        Initiative Program (CIP). Encouraged business community to work 
        with rail ports under auspices of Business Anti-Smuggling 
        Coalition.
   Year 1: Convene a conference of officials from SWB U.S. 
        Customs offices with rail operations, rail carriers, 
        intelligence community, business community, and other federal 
        agencies (particularly USBP).
   Year 1: Conduct first foreign site surveys under rail CIP 
        and recommend security enhancements based on successful 
        initiatives from other CIP signatories.
   Year 1: Allocate additional personnel to rail inspection 
        teams.
   Year 1: Intensify rail inspections with coordinated 
        participation of all federal agencies.
   Year 1: Office of Investigations assembles three teams 
        dedicated to railroad internal conspiracy cases. First three: 
        RAC, Laredo, TX; RAC, Brownsville, TX; RAC, Eagle Pass, TX.
   Year 1: Attain DOD and Office of National Drug Control 
        Policy (ONDCP) support for high technology initiatives--high 
        energy X-ray, Gamma Ray imaging systems, and the K40 system. 
        The K40 detects the presence of naturally occurring emissions 
        of Potassium 40 associated with organic substances such as 
        marijuana.
   Year 2: Utilize new inspection facilities, identify 
        infrastructure needs, and work with RR to build facilities at 
        all rail ports. Use penalty off-sets for infrastructure and 
        security improvements.
   Year 2: Seek funds for unpredictable/unannounced TDY 
        inspection blitzes based on lessons from previous SPS 
        operations. Also seek funds for investigative efforts including 
        surveillance equipment, Title III intercepts, agent support to 
        inspectional TDY operations.
   Year 2: Conduct additional site surveys under CIP and 
        Business Anti-Smuggling Coalition (BASC) as well as Top 10 
        exporters via rail at each of the 8 rail crossings.
   Year 2/3: Deploy first high technology systems at busiest 
        rail crossings as part of 5 year technology plan.
   Year 3: Employ advanced targeting methods via Automated 
        Targeting System (ATS) and analysis of information provided by 
        rail carriers.
   Year 3/5: Deploy remaining high technology systems.


    Inquiries and concerns have been expressed by Members of Congress, 
executives within the Department of the Treasury and the Office of 
National Drug Control Policy (ONDCP), and the Attorney General of the 
United States regarding the vulnerability of the U.S. rail system to 
drug smuggling. There are four major factors behind this warranted 
interest. First is the privatization of the Mexican rail system and the 
ability for potentially corrupt organizations to buy lucrative rail 
lines; second, is the tremendous growth in current and projected rail 
traffic along the Southwest Border (SWB); third, is the increase in the 
number of drug seizures and total weight of drugs seized from rail 
conveyances; fourth, is the vulnerability of the rail system to 
Smuggling because of the sheer volume and difficulty in examining rail 
cars.

    This document has been generated to assess and outline the nature 
and volume of rail traffic, the examination process, and results of 
special enforcement operations. Additionally, the following document 
also provides a summary of current investigative and interdiction 
initiatives as well as long-term plans for enhanced rail inspections.

                                Overview

    The United States and Mexico share a border that is over 2,000 
miles in length. America's economic welfare is, to a large extent, 
dependent upon the efficient movement of legitimate commerce and people 
through 39 vehicle/pedestrian crossings and 8 major rail crossings 
within the 24 ports of entry that exist along the Southwest Border. In 
FY 1997, approximately 321,000 rail cars entered the United States from 
Mexico. Each of these rail cars represents a window of opportunity for 
those that would smuggle illegal drugs into the United States.

    A comprehensive plan to increase SWB enforcement operations became 
viable with Congressional support for Operation HARD LINE. The first 
step included deployment of 657 new Customs Inspectors, Canine 
Enforcement Officers, and Special Agents to SWB inspections and 
investigations.

    A comprehensive program designed to enhance the number and quality 
of rail examinations is in the early stages of implementation. This 
program includes new port of entry infrastructure, enhanced examination 
methods, upgraded technology, partnerships with industry and use of 
sophisticated intelligence gathering methods, to more efficiently 
profile and target suspect rail shipments.

                               Background

    Drug smuggling via rail along the SWB is fast emerging as a major 
threat. The intensification of multiagency enforcement operations 
within and between Southwest Border ports of entry (i.e., Operations 
HARD LINE, GATEKEEPER, and HOLD-THE-LINE) increases the narcotics 
smuggling threat within the ports, particularly in the rail 
environment.

    Smugglers are reacting to intensified operations in the passenger 
and truck environment by increasing their activity in rail. 
Accordingly, seizure activity has increased dramatically from levels of 
the early 1990s, both in total numbers of seizures and average weight 
per seizure. Significant activity has taken place this past year and 
includes, as an example, 2,180 pounds of cocaine seized by USCS in one 
incident involving an electrical transformer.

    In addition to seizure activity, USCS and USBP personnel have 
discovered numerous railroad cars (hoppers, boxcars, flatbeds, and 
piggyback trailers) with empty false compartments. These false 
compartments have been created to carry drugs into the United States 
and to return the drug proceeds to Mexico. In addition, rail cars of 
all types contain natural compartments which are being used to conceal 
contraband.

    The threat posed by internal conspiracies concerns all agencies, 
especially when considered in the context of the rapid privatization of 
the Mexican railroad system. Though there are many different types of 
internal conspiracy problems, the most common forms involve employees 
of carriers and shippers who choose to use otherwise legitimate 
shipments to conceal the importation of narcotics. Internal conspiracy 
initiatives are further explained under investigative efforts.

    The privatization process has created a new avenue for smuggling 
organizations to launder their proceeds while, at the same time, 
acquiring lucrative rail transportation corridors. Additional areas of 
concern include the abject level of physical security of train cars 
(sitting in open, unsecured staging/storage yards for days), lack of 
sufficient inspectional facilities, difficulty in examining bulk 
commodities, and limited availability of high technology equipment.

             Privatization of the Railroad System in Mexico

    In February 1995, the Mexican Congress amended Article 28 of their 
constitution by declassifying the railroad sector as a ``strategic 
service.'' In May 1995, the Railroad Service Code was published, laying 
down the guidelines for granting permits to private parties. Under the 
code, permits or concessions will last for 50 years, with options for 
renewal for another 50 years. It also provided for up to 49% foreign 
capital participation. All these steps effectively allowed for the 
privatization of the entire Mexican rail system.

    A driving force for privatization is the poor state of the Mexican 
rail system and the lack of sufficient public funds. Of the total 
16,528 miles of track, approximately 12,500 miles (75%) were laid 
before 1910. The total U.S. railroad network is 133,125 miles. This 
limits the amount of freight moved by all Mexican railways to only 15%, 
compared to 60% (U.S.) and 86% (Canada).

                      Commercial Trade Background

    The North American Free Trade Agreement (NAFTA), the devaluation of 
the Mexican peso, economic reform in Mexico, and expanding numbers of 
twin-plant (maquilladora) operations, have increased the amount of 
commercial cargo passing between Mexico and the United States. The 
level of commercial trade originating in Mexico that enters the United 
States is projected to steadily increase in the future, with a 
corresponding increase in rail traffic. The volume of trade between the 
United States and Mexico has increased 122% since 1990, from a level of 
59 billion dollars to almost 130 billion dollars in 1996 (see figure 1 
below).

    One sign of Mexico's importance as a trade partner of the United 
States is the growth of twin-plant (maquilladora) operations along or 
near the Southwest Border. Maquilladora assembly operations on both 
sides depend on the time sensitive movement of goods and merchandise at 
various stages of assembly across the border between plants located in 
Mexico and in the United States. Over 2600 maquilladoras on the Mexican 
side of the border are working closely with their U.S.-based 
counterparts in a mutual effort to manufacture products for worldwide 
distribution.

    The vast majority of twin-plant automobiles and automobile parts 
enter the United States via rail. Though legitimate automobile 
manufacturers are considered low-risk for drug smuggling, their 
shipments are occasionally compromised in unprotected rail switching 
yards.


    Value of merchandise trade imported from Mexico and shipped via 
rail:

          FY 1996: $11.9 billion

          FY 1997: $13.2 billion

    (Source: USCS, Office of Strategic Trade)

    
    
            Figure 1: (Source: USTR, Department of Commerce)

                            SWB RAH, Traffic

    Over the last 5 years, the volume of SWB rail car traffic entering 
the U.S. has increased approximately 75% percent from 184,000 rail cars 
in 1992 to 321,000 rail cars in 1997 (see figure 2 below). In Laredo, 
Texas, as many as 9 trains enter the United States during a normal 24 
hour rail operation. This equates to an average of 600 rail cars 
entering the U.S. at this border crossing every day. Many of these 
trains arrive with little notice, during night hours, when inspections 
are unsafe.

    Officials of the Union Pacific Railroad (UPRR) predict annual 
traffic increases of 25% at their largest SVVB crossing, Laredo, Texas. 
UPRR presently handles about 90% of the rail traffic crossing the SYM. 
This rate of growth poses a significant threat in a particularly high-
risk environment where no high technology inspection equipment is 
currently available. In addition, most rail yards are situated in the 
middle of town with no physical security features to prevent access to 
rail cars, theft of merchandise, and removal of contraband prior to 
Customs inspection.

                                         Railcar Crossings (Northbound)                                         
----------------------------------------------------------------------------------------------------------------
            Port                 Code        FY 92       FY 93       FY 94       FY 95       FY 96       FY 97  
----------------------------------------------------------------------------------------------------------------
Calexico, CA................        2503       4,381       6,225       6,112       4,482       6,252       4,574
San Ysidro, CA..............        2504         N/A         498       1,999       1,792       3,093       2,504
 Nogales, AZ................        2604      23,647      21,428      21,195      21,130      24,902      27,168
El Paso, TX.................        2402      17,258      19,299      22,366      21,628      19,992      23,637
Presidio, TX................        2403         511         444         551         894       1,818       2,234
Eagle Pass, TX..............        2303      25,214      28,897      33,684      38,585      61,475      61,285
Laredo, TX..................        2304      89,910      97,452     105,825     109,791     117,927     148,384
Brownsville, TX.............        2301      22,650      20,915      25,269      26,846      49,862      50,906
      Totals................                 183,571     195,158     217,001     225,148     285,321     320,692
----------------------------------------------------------------------------------------------------------------

             Figure 2: (Source: USCS Port Tracking System)

             Southwest Border Rail Traffic, FY 1992-FY 1997


             Figure 3: (Source: USCS Port Tracking System)

                             USCS Responses

    U.S. Customs has responded to this increased threat by employing a 
combination of (1) staffing increases (2) interdiction efforts, (3) 
investigative efforts, and (4) intelligence assets.
1. Southwest Border Staffing Increases

    The U.S. Customs Service has increased the level of inspection 
staffing assigned to the Southwest Border ports of entry in order to 
address the increase in commercial conveyance traffic and the ever 
increasing narcotics threat. Since 1988, there has been an 87% increase 
in the number of Customs Service Inspectors and a more than 500% 
increase in the number of Canine Enforcement Officers assigned to 
Southwest Border ports of entry. In FY98, Customs will dedicate 
approximately 50 new Inspector positions to SWB rail operations.

    Through Operation HARD LINE, Customs has provided an additional 392 
Inspectors and 157 Canine Enforcement Officers in Fiscal Year 1997. A 
significant number of the additional Inspector positions were assigned 
to direct interdiction efforts including Contraband Enforcement Teams 
(CET). At most SWB ports, CET Inspectors conduct the vast majority of 
narcotics enforcement examinations in rail operations. In addition, 
Operation HARD LINE funds provided for an additional 157 Canine 
Enforcement Officers (CEO). CEOs are assigned to CET operations and 
actively support rail inspection operations. To further complement our 
rail inspection efforts, Customs utilizes National Guard personnel 
dedicated to the SWB. In addition to this, Operation HARD LINE provided 
funds for 65 new Special Agent positions as well as resources for 
reassignments. (see figure 4 below).


           Figure 4: (Source: USCS Office of Human Resources)

2. Interdiction Efforts

    U.S. Customs interdiction efforts involve Inspectors, Special 
Agents, Canine Enforcement Officers, and National Guard personnel as 
members of cross-functional teams.
a. Training

    Provisions of the U.S. Customs Narcotics Interdiction Guide were 
followed to establish uniform Standard Operating Procedures (SOP) for 
each of the rail port Contraband Enforcement Teams (CET). Standardized 
training is provided concerning concealment techniques, false 
compartments, container search procedures, proper use of hand tools, 
and safe inspection of hazardous materials. This and other information 
is provided as part of the one week Southwest Border Interdiction 
Training (SBIT) in Laredo, Texas. To date, 950 Inspectors have been 
trained through this course. In August 1997, the SBIT curriculum for 
the 10 courses in FY98 was modified to include rail training. Customs 
has worked closely with UPRR security officials to prepare this 
specialized training.
Targeting

    The primary cargo targeting system in rail is the selectivity 
module within the Customs Automated Commercial System (ACS). Entry 
information for goods shipped by all types of conveyances is lodged in 
this system. In addition, rail manifest information is provided 
electronically from railroad companies to Customs. This manifest 
information is transmitted in the Rail Automated Manifest System (AMS) 
which is also part of ACS; or, via computer database links provided by 
the railroads. AMS allows for the targeting Inspector to query volumes 
of information through a series of pre-programmed screens. An added 
benefit is that this information can be provided to us well before a 
train arrives. All Customs releases, enforcement holds, and pending 
actions are then transmitted electronically to the carrier. This 
electronic exchange of information is possible because the railroad 
industry is already highly automated. This automation has allowed rail 
carriers to operate in a virtually paperless environment for many 
years.
b. Special Operations

    Customs has conducted innovative Strategic Problem Solving (SPS) 
exercises to address the threat from rail which differs at each port. 
These initiatives include team members from Customs, National Guard 
units, state/local authorities, and railroad Special Agents. Training 
on safe rail car inspections and concealment methods was provided with 
the full support of railroad personnel.

    Two such SPS rail inspection initiatives were recently completed; a 
5 week operation in South Texas (Laredo, Eagle Pass, Brownsville, 
McAllen-Harlingen, and Pharr) and a 20 day operation in Calexico, 
California. These operations will be duplicated at the other SWB rail 
ports in the near future.

    The South Texas operation was organized with six main goals.

          1. Greatly increase inspections, including the number of 100% 
        examinations. Concentrate staff to reduce inspection time, 
        thereby reducing exposure in unsecured areas. Perform more on-
        site examinations which reduce the need to secure trains during 
        movement to other facilities.
          2. Create a data analysis unit for targeting shipments during 
        the operation. Staff the unit with personnel from entry 
        selectivity sections and Intelligence Collection and Analysis 
        Team (ICAT) members. This unit utilizes existing Customs 
        targeting systems as well as information from rail carriers.
          3. Maximize use of available technology including busters, 
        laser range finders, infrared camera systems, probes, pallet X-
        rays, X-ray vans, fiber optic scopes, and Ion Track Itemizer 
        Contraband Detectors.
          4. Establish a toll-free number for informant calls related 
        to railroad smuggling.
          5. Establish a liaison network between Customs offices, other 
        federal law enforcement, state/local authorities, railroad 
        personnel, Canadian and Mexican authorities, and members of the 
        intelligence community. These will become permanent working 
        relationships involving Canadian Customs and Mexican Customs 
        (through our foreign Customs Attache offices).
          6. Create multi-discipline, cross-functional teams known as 
        Railroad Enforcement Response Team (RERT) with counterparts at 
        other locations. The teams consist of Customs Inspectors, 
        Customs Special Agents, Canine Enforcement Officers, RR 
        security officers, state/local law enforcement officers, USBP 
        and other federal officers. Members of this team will then be 
        available to train future teams in other ports.


    Results of the first SPS rail project in Texas are now available. 
Our preliminary findings are as follows:

          1. More than 10 railroad cars out of 2,600 inspected were 
        discovered to have false compartments. The compartments were 
        consistent with those seen in other seizures. In addition, one 
        of the targeted cars with a false compartment also contained a 
        piece of black cloth (tied to the exterior) which was 
        apparently used to identify the car for removal of contraband.
          2. Numerous narcotic detector dog (NDD) alerts. These alerts 
        indicated the recent presence of narcotics in the rail cars; 
        however, intelligence indicated that internal conspirators 
        probably alerted smugglers to remove the drugs prior to 
        crossing into the U.S.
          3. A locomotive conductor noticed the increased Customs 
        presence and responded by stopping his train in the U.S., 
        reversing the engine, and returning to Mexico. The train 
        returned a short time later with 5 fewer cars.
          4. Visible signs of breaking and entering to otherwise 
        innocuous shipments without the theft of any merchandise. 
        Again, this indicates that the drugs may have been removed 
        while the train staged its crossing on the Mexican side.
          5. UPRR Special Agents participating in the operation 
        reported that truck drivers were warning each other of the 
        Customs presence via CB radio. The truckers specifically warned 
        each other that Customs was conducting special operations and 
        examining 100% of ``piggyback'' truck trailers. Intelligence 
        collected during the ICAT threat assessment indicated that 
        ``piggybacks'' posed the greatest threat for smuggling. During 
        the Laredo segment of the operation, because of the radio 
        warnings, business at the UPRR piggyback facility dropped 
        significantly.
c. Customs Support to Other Agency Operations

    U.S. Customs Offices in El Paso, Texas continue to provide support 
to joint rail inspection initiative with the USBP. In addition, USCS 
and USBP recently completed a joint rail inspection blitz in Eagle 
Pass, Texas.

    On Thursday, October 2, 1997, representatives from Customs met at 
USBP Headquarters to begin coordination of joint rail operations across 
the SWB. In addition, it was decided that the USBP would be an active 
participant in a rail summit of SWB Port Directors and SACs tentatively 
scheduled for January 1998.
d. High Technology

    High technology specific to rail cars, though not currently 
available, is being researched jointly through support from the 
Department of Defense, Office of Counter-Drug Technology Development 
Program and the ONDCP Counter-Drug Technology Assessment Center. 
Through Operation Flint, Customs and DOD are developing new X-ray and 
high energy Gamma ray imaging systems for examination of loaded 
containers. It is believed that one of these high energy imaging 
systems will be the first tool capable of imaging rail car. A prototype 
Gamma Ray imaging system is currently being tested in rail in El Paso, 
Texas. With this understanding, the first Gamma Ray imaging systems are 
planned for SWB rail operations in Year 2/3 of this multi-year plan. 
This is in line with proposals contained in the U.S. Customs 5 year 
technology plan (See chart below).

    Other ``low tech'' equipment such as busters, cherry pickers, laser 
range finders, pallet X-Rays, X-Ray vans, and dilectrometers are used 
daily in the rail environment.

                    Proposed Gamma ray systems (Year 2 & 3)
                 Laredo, Texas
                 Eagle Pass, Texas
                    Proposed Gamma ray systems (Year 3 & 5)
                 Calexico, California
                 El Paso, Texas

(Source: USCS Anti-Smuggling Division)
e. Industry Partnerships:

    Industry Partnerships fall into two categories:

   Carrier Initiative Program (CIP)
   Business Anti-Smuggling Coalition (BASC)

                         Industry Partnerships

Business Community Helps With Enforcement

    Believed by some to be a means of facilitating traffic and having 
no real place in a law enforcement environment, Industry Partnerships 
are often overlooked as a viable enforcement tool. When studied 
closely, one quickly realizes the benefits to industry and the U.S. 
Customs Service by embarking on such relationships.
            Carrier Initiative Program (CIP)

    Established in 1984, the Carrier Initiative Program is a joint 
effort between air and sea carriers and the U.S. Customs Service. This 
main goal of the joint initiative is to deter smugglers from using 
commercial aircraft, vessels, trucks, and rail cars as conveyances for 
their contraband. Currently, 105 air and 2,870 sea carriers have signed 
up for the program, which encourages them to improve their security 
practices in striving to prevent narcotics from getting onboard their 
conveyances. Customs recently expanded the CIP to include railroad 
carriers. This rail CIP, negotiated with carriers and the Association 
of American Railroads, closely models the other successful CIPs with 
air, sea and land carriers. The first rail carrier participant 
committed to the program October 10, 1997. The benefits of the CIP for 
Customs include prior information provided by the carriers as well as 
incentives to invest in security improvements. The benefits to carriers 
include expert training on inspection of their conveyances, more secure 
foreign facilities, and penalty off-set provisions which encourage the 
enhancement of security features at all their facilities. In FY97, CIP 
participants provided 40% of all advance seizure information received 
by Customs.

    U.S. Customs provides the necessary training for enhanced security, 
conducts site surveys and recommends methods of safeguarding freight 
hauled by the participating carrier. Each port has dedicated resources 
and a point of contact (POC) for the program.

    Indicative of the benefits associated with industry partnerships, 
over the last two years signatories to the Carrier Initiative Program 
have provided information to Customs which resulted in our seizing 
18,437 pounds of narcotics. Half of the total amount seized was 
cocaine. These same carriers, through their own security operations at 
their foreign operational sites were responsible for intercepting 
59,181 pounds of narcotics that were destined for the U.S.
            The Land Border Carrier Initiative Program (LBCIP)

    Developed in the Spring of 1995 to address the threat of drug 
smuggling along the southwest border, the purpose of the LBCIP is to 
deter smugglers of illegal drugs from using land border commercial 
conveyances to transport their contraband. As of July 1, 1996, all 
importers who wish to have their merchandise cleared utilizing line 
release must have their cargo carried by one of the 854 carriers that 
have become LBCIP signatories to date. During 1996, signatories 
provided information resulting in almost 1,800 pounds of marijuana and 
cocaine being seized.

    Over the past three years alone, with assistance of sea and air 
carrier participants, this program has accounted for the domestic 
seizure or foreign carrier based interception of over 80,000 pounds of 
narcotics. The Land Border Carrier Initiative Program (LBCIP) was 
developed in the spring of 1995 in an effort to extend the successes of 
the sea and air Carrier Initiative Programs to land border carriers 
operating along the Southwest border. This is a Customs-led program to 
address drug smuggling via commercial land carriers and land 
conveyances. This program provides background information on drivers 
and trucking companies moving cargo across the Southwest Border. 
Approximately 835 companies are approved and participating in this 
program and over 6,000 drivers have been certified by Customs (via 
background checks).
            Business Anti-Smuggling Coalition (BASC)

    Initiated in Mid 1996, the Business Anti-Smuggling Coalition (BASC) 
is a business-led, Customs-supported alliance created to combat 
narcotic smuggling via commercial trade. BASC was designed to 
complement and enhance the CIP and LBCIP programs. The ideology being 
to examine the entire process of manufacturing and shipping merchandise 
from foreign countries to the United States. The main goal of the 
program is the creation of a more security-conscious environment at 
foreign manufacturing plants to eliminate, or at least reduce, product 
vulnerability to narcotics smuggling. Currently there are approximately 
120 companies that have committed to this endeavor. In addition to the 
heightened awareness with regard to narcotic smuggling that the program 
is bringing to the import/export community, the BASC is responsible for 
the seizure of over 3,000 pounds of cocaine.

    As indicated by the results thus far, active "Industry 
Partnerships" can contribute significantly to the enforcement posture 
of any office. It is a tool that allows the business community to take 
a shared responsibility in combating illicit narcotic trafficking.
e. Future Initiatives

    The Customs Service is proceeding with several initiatives to 
address the problems with smuggling via railroads. As an outgrowth of 
intelligence from recent rail acquisitions, Attorney General Reno 
convened a working group of professionals to determine proper 
Department of Justice support for Customs, Border Patrol, and Federal 
Railroad Administration enforcement missions. Customs is actively 
participating in this group by providing vital information on rail port 
activities, results of our successful SPS projects, and seizure/
forfeiture actions. In addition, a member of the Attorney General's 
staff completed a week long tour of Laredo, Texas and Nogales, Arizona 
operations with Customs representatives.

    Customs plans to seek funds for high technology X-ray and imaging 
systems, increased and unpredictable inspection "blitzes", surveillance 
equipment, and Title III interceptions. These efforts will help to 
effectively address the threat posed by internal conspiracies and drug 
``rip-offs'' as rail cars wait in unprotected areas. This increased 
enforcement activity should encourage rail carriers to invest in proper 
security measures and needed infrastructure improvements.
3. Investigative Efforts

    The Office of Investigations (OI) is actively involved in meeting 
this threat. Their participation includes additional Special Agents and 
Intelligence Analysts through HARD LINE funds and the reassignment of a 
large number of Special Agents to the SWB. In addition, OI is an active 
participant in the rail SPS projects, in coordinating state/local 
agency contacts, in coordinating security matters with railroad 
officials, and in following through with controlled deliveries. OI 
confidential informants often provide prior information useful to line 
Inspectors. As a result of the 2,180 pound cocaine seizure in New 
Jersey, OI developed additional information which led to a second 
seizure in Spain. In addition, OI was able to relay valuable 
information to the SWB rail ports on the exploitation of transformers 
as a means of smuggling narcotics.
a. Internal Conspiracy Initiatives

    In FY 97, the Customs Office of Investigations has documented that 
40% of all cocaine smuggling in sea and air operations is associated 
with internal conspiracies. OI further believes that smaller loads 
typically involve shipments directly to guilty importers.

    Larger loads are often associated with innocent consignees who have 
their shipment manipulated by corrupt workers or carrier employees 
prior to delivery to the importer. Internal conspiracies offer the 
relative safety associated with having conspirators directly handling 
cargo shipments. The conspirators can be either in the exporting 
country, the U.S., or both.

    Method of Choice: Internal conspiracies, established by 
sophisticated smuggling organizations are a very real threat. These 
conspiracies are formed by corrupt employees who work in a given port 
of entry (i.e. airport, seaport, rail yard, etc.) and use their 
position, or the scope of their employment (freight handlers, dock 
workers, warehouse employees, railroad employees, etc.), as a cover to 
manipulate cargo, conveyances and/or baggage to smuggle narcotics. This 
often involves the theft of additional drug laden boxes within a 
legitimate shipment or the theft of unmanifested pieces of luggage 
prior to Customs inspection.

    Strategy: Customs proposes a short term strategy of employing 
multi-disciplined Customs teams working in tandem with industry and 
security officials using the SPS methodology.
          Short-term efforts and goals include increased narcotics 
        seizure and arrest activity. When the ``cost of doing 
        business'' becomes unprofitable, smugglers will utilize other 
        methods such as using front companies to smuggle. This is 
        accomplished by a combination of increased examinations, 
        increased Customs presence in rail yards, and increased 
        investigative activities.
          Long-term efforts include an aggressive and creative 
        investigative program to ensure prosecution of organized labor 
        personnel and identifies organized crime associates to disrupt 
        drug importation capacity. This includes intelligence sharing, 
        developing confidential sources, expanded use of T-III 
        electronic wire intercepts, undercover operations, state and 
        local police coordination, electronic investigative aids, 
        video/audio technology and equipment, long term surveillance, 
        controlled deliveries, cold convoys, and improved foreign 
        collection within the intelligence community.
4. Intelligence Efforts

    The single largest issue hampering the commercial conveyance and 
cargo examination process in rail is the lack of useful tactical 
intelligence on drug smuggling in the Southwest Border commercial cargo 
environment. Despite all efforts put forth by the federal government on 
this issue, only a very small number of last years seizures in the 
Southwest Border commercial cargo environment were a result of 
intelligence that was generated by a non-U.S. Customs source.

    The federal government is attempting to forge new or expand 
existing partnerships with Federal, State and local law enforcement 
agencies in an effort to provide timely tactical information to border 
law enforcement agencies. Toward that end, Customs has Intelligence 
Analysts for SWB operations through existing and HARD LINE resources.

    This division also established cross-functional teams of Agents, 
Inspectors, and other Federal/State law enforcement agencies known as 
Intelligence Collection and Analysis Teams (ICAT).

    There are currently seven of these multi-disciplined tactical 
intelligence groups along the Southwest Border. These units are located 
in:

   Brownsville, Texas
   Laredo,Texas
   Nogales, Arizona
   San Diego, California.
   McAllen, Texas
   El Paso, Texas
   Calexico, California


    The mission of the ICAT unit is to develop and disseminate real 
time tactical intelligence and utilize Post Seizure Analysis (PSA) 
information in order to link previous seizure activity to persons, 
businesses, and conveyances to produce real-time actionable 
intelligence on narcotics smuggling trends, patterns, and 
transportation/concealment methods along the Southwest Border. These 
units are supported by the National Operational Analysis Center (NOAC), 
a clearing center for information received from multiple law 
enforcement and intelligence agencies.

    Since the inception of the ICAT concept in 1995, these units have 
shown great promise, by generating information leading to the seizure 
of over 15,000 pounds of narcotics in the commercial cargo environment 
along the SWB. These units will continue to enhance the federal 
government's ability to target and interdict narcotics shipments in the 
future. A South Texas ICAT recently completed a thorough threat 
assessment study of rail operations along the SWB.

    In addition to ICAT units, the federal government is also pursuing 
the aggressive use of the Purchase of Information (POI), Purchase of 
Evidence (POE), and reward programs in order to obtain information. 
These POI, POE, and reward programs generate valuable intelligence 
leads to successful narcotics enforcement actions.
Oversight

    The Customs Service cooperated with General Accounting Office (GAO) 
in their recent audit of one Southern California rail line. This audit 
studied the alien and drug smuggling threats posed by re-opening an 
abandoned line near Campo, California. The USBP also contributed 
significant information to the study.

    The Department of the Treasury, Office of Inspector General is 
currently conducting an audit of SWB rail activity in Texas and Arizona 
as well as Northern Border rail operations in Port Huron, Michigan. The 
focus is on inspections, policies, procedures, use of resources, and 
enforcement capabilities.

                                Summary

    Significantly enhancing rail examinations at ports of entry along 
the Southwest Border is achievable. Enhancing inspections of any 
conveyance is not a new problem, but rather, one that Customs has been 
actively pursuing for years from many directions, including 
improvements in infrastructure, technology, and staffing. The fact of 
the matter is, as recent seizure data indicates, an increase in the 
number of quality examinations produces an increase in the amount of 
narcotics seized.

    The influx of new enforcement positions (starting with FY96) has 
already enhanced Customs narcotics enforcement efforts. By relieving 
critical staffing shortages in SWB passenger and cargo operations, 
Customs is now positioned to take the next logical step in Operation 
HARD LINE: the dedication of additional staffing resources for the 
emerging threat in rail.

    Transportation and other industries, as well as the socioeconomic 
issues that exist on both sides of the border, will continue to play 
vital roles in the issues associated with increasing cross-border trade 
and the associated narcotics smuggling threat. Working together with 
private industry, including carriers, importers, and exporters, on both 
sides of the Southwest Border, Customs continues to explore all 
available avenues to decrease the level of narcotics smuggling.

    Full implementation of this enhanced rail inspection plan along the 
Southwest Border is still a number of years off. Further capital and 
infrastructure improvements, technological developments, and increased 
intelligence capabilities will continue to improve examination and 
seizure successes. A critical factor for continued success and improved 
efficiency will be sustained leadership and budgetary support from the 
current Administration and Congress.

    Question 4. How have the additional Border Patrol resources (under 
the auspices of Operations Hold-the-Line and Hard Line) affected our 
interdiction activities? Have Customs personnel increases kept up with 
the additional Border Patrol resources? What plans are being made for 
additional fencing?


    Answer. The Customs Service has benefited from the Customs 
reorganization by streamlining operations, aligning available resources 
(personnel and equipment) to the areas of greatest workload, and has 
employed high technology (x-ray and gamma-ray equipment) to address the 
narcotics smuggling threat this country faces.

    Under Operation HARD LINE the Customs Service further increased 
inspectional staffing at the Southwest Border ports of entry. 
Additionally, in our FY 98 budget, Customs received additional 
inspectional positions for high-risk sea and air ports.

    The direct impact of additional Border Patrol Agents conducting 
enforcement operations between the ports of entry cannot be accurately 
determined at this time. However, it is reasonable to assume that an 
increase in enforcement activity between the ports of entry will result 
in a subsequent increase in smuggling activity occurring within the 
ports of entry along the Southwest Border.

    Customs continues to do its part in being fiscally responsible 
given the federal deficit, and has maintained reasonable requests for 
additional inspectors, canine enforcement officers, and special agents.

    Personnel increases implemented by the Immigration and 
Naturalization Service (INS) at the Ports of Entry will have an impact 
on Customs operations in several ways. First, the increase in staffing 
by INS will allow for more primary staffing by INS and thereby allow 
Customs to dedicate more inspectors to conduct more pre-primary roving 
and Southwest Border Team Oriented Processing Operations (STOP). These 
enforcement activities are employed in both the cargo and passenger 
environments and rely upon targeting and selectivity techniques that 
allow Customs to perform more and better enforcement examinations. 
Additionally, as a result of this increase in staffing by INS, more 
Customs personnel will be dedicated to conducting narcotics enforcement 
examinations in the Commercial Cargo environment. This will allow 
Customs to dedicate more personnel solely to the execution of cargo 
examinations utilizing fixed site x-ray technology, and mobile x-ray 
and gamma-ray inspection technology.


    Question 5. Do adequate authorities exist by which Customs (and/or 
Border Patrol) can provide excess equipment (such as cars, etc.) to 
their Mexican civilian counterparts? Is there a need for such legal 
authorities, and have you sought them from Congress?


    Answer. Yes. Customs can transfer excess property to the Department 
of State, through the General Services Administration (GSA). The 
Department of State has the authority to then transfer the excess 
property to Mexico. For example, this authority has been used to 
provided vehicles to Mexican Customs and 30 new drug testing kits and 
an Ion scanner to their drug testing laboratory.


    Question 6. What specific steps is Customs taking to interrupt the 
flow of currency back to Mexico? For example, do we routinely search 
passengers and conveyances bound for Mexico, such as cruise ships, 
etc.?


    Answer. Customs has a broad grant of authority in the conduct of 
international financial crime and money laundering investigations. 
Jurisdiction is triggered by the illegal movement of criminal funds, 
services, or merchandise across our national borders and is applied 
pursuant to the authority under the Bank Secrecy Act (BSA), Money 
Laundering Control Act (MLCA), and other Customs laws. Combined with 
our border search authority, Customs enforcement efforts focus on the 
most significant international criminal organizations (ICOS) whose 
corrupt influence often impacts global trade, economic, and financial 
systems. Customs efforts are not limited to drug related money 
laundering but extend to the proceeds of all crime.

    Customs has implemented an aggressive strategy to combat money 
laundering. Our approach involves interdiction efforts by Customs 
inspectors, criminal investigations by Customs special agents, and in 
partnership with Treasury, FINCEN, and others, the design and 
implementation of innovative regulatory interventions, unique to 
Treasury, that disrupt and dismantle systems, organizations, and 
industries that launder ill-gotten gains. Customs dedicates some 500 
Special Agents worldwide to money laundering investigations.

    Operation Choza Rica, launched by Customs Special Agents in 
McAllen, Texas, uncovered and subsequently dismantled a major Mexican 
money laundering network along the Southwest Border. This intricate web 
involved Mexican Casas de Cambio and established banks in the United 
States and Switzerland. In a series of criminal indictments, managing 
directors of several major Mexican Casas de Cambio and U.S. Banks to 
include American Express Bank International, First City Bank, Lone Star 
National Bank, and International Bank of Commerce were subsequently 
prosecuted and convicted for laundering money for the Juan Garcia-
Abrego cocaine smuggling organization. In excess of 60 million dollars 
in cash and other assets were seized and forfeited in this 
investigation. AEBI forfeited 44 million dollars to the Treasury 
Forfeiture Fund representing the largest forfeiture ever by a domestic 
corporation.

    In March 1995 the Houston Asset Identification and Removal Group 
(AIRG) located and subsequently seized 9.1 million dollars from a bank 
account owned by Mario Ruiz-Massieu, the former Mexican Attorney 
General, after he was arrested by Customs Agents in Newark for 
smuggling currency. He remains in custody.

    Specific steps that Customs is taking to interdict unreported 
currency going to Mexico include the following: (1) forming dedicated 
outbound enforcement teams to search outbound passengers, conveyances, 
and cargo; and (2) conducting special outbound operations utilizing 
shared enforcement inspectors (Contraband Enforcement Teams, etc.) for 
outbound inspections. Customs has approximately 125 dedicated outbound 
inspectors working on the entire Southern Tier of the United States. 
These inspectors only process outbound passengers, cargo and 
conveyances. Customs does not currently have the resources to 
continuously conduct outbound inspections (as seen on the inbound side) 
24 hours a day at all of the ports. Therefore, the shared enforcement 
inspectors/teams supplement this need by conducting sporadic special 
outbound operations.

    Customs has also received additional resources to enhance our 
outbound inspection capabilities. Customs is planning to build outbound 
inspection facilities along the southern border. In addition, the 
Customs Service is planning to provide our outbound inspection teams 
with enhanced detection equipment and resources such as currency and 
weapons detection canine teams.

    Forfeiture funds are utilized to pay the overtime of state and 
local law enforcement officers to assist the inspectors during these 
operations. In FY 1998, Customs will more than double the amount of 
forfeiture funds available to more than $800,000 to pay for state and 
local assistance during the operations. Currency Canine Teams have 
proven to be a great success in the interdiction of unreported 
currency. There are currently 6 teams on the Southwest Border.

                           Seizures by Mexico

    Question 1. Do the Mexicans have an adequate strategy, 
infrastructure and resources to inspect cargo entering and transiting 
their country? Do they inspect the millions of containers arriving at 
their ports from South America each year? For example, do they have 
adequate customs inspection at their ports? How have they improved 
their maritime operations? What steps have we taken to assist the 
Mexicans to improve their own ``customs'' inspections?


    Answer. The U.S. Customs Service is not in a position to judge nor 
does it have adequate information to answer questions on whether the 
Mexicans have an adequate strategy, infrastructure and resources to 
inspect cargo entering and transiting their country, or whether they 
inspect the millions of containers arriving at their ports from South 
America each year.

    With respect to what steps we have taken to assist the Mexicans to 
improve their own ``customs'' inspections, as a way to increase the 
integrity of cargo entering the United States, the Customs Service 
(with the support of the Department of State) has created the Americas 
Counter Smuggling Initiative (ACSI). ACSI will build upon the success 
of the Carrier Initiative Program and Business Anti-Smuggling 
Coalition, by expanding our antinarcotics security programs with 
industry and government, throughout Central and South America.

    Beginning in January 1998, U.S. Customs officers from the Office of 
Field Operations, office of Investigations, Office of International 
Affairs, and the Office of Intelligence, will be regularly detailed to 
assist exporters, carriers, manufacturers, etc., in developing and 
implementing security programs and initiatives that safeguard 
legitimate trade from being used to smuggle narcotics. This effort will 
address the need for a continuous presence throughout the region, and 
will endure until the end of fiscal year 1998, and possibly beyond.

    Responsibilities of the ``ACSI'' teams will include providing 
Carrier Initiative Training, Business Anti-Smuggling Coalition 
Seminars, and performing security site-surveys at manufacturing plants, 
container yards, and port facilities. Also, the team will conduct 
timely post-seizure analyses, foster information exchange and follow-up 
activities through established and consistent channels, and provide 
advice on technology deployment and application.

    Additionally, the ``ACSI'' teams will follow a ``Parallel Track,'' 
and work with foreign law enforcement agencies to improve their efforts 
against the narcotics traffickers, and in developing industry 
partnerships.
The goals of ``ACSI'' are
   Strengthen cooperative efforts with legitimate businesses 
        involved in international trade to prevent narcotic smuggling 
        organizations from infiltrating their shipments and operations.
   Increase actionable intelligence on narcotics and contraband 
        interdiction.
   Increase the number of participants, and the level of 
        cooperation, in the Carrier Initiative Program and the Business 
        Anti-Smuggling Coalition.
   Prevent narcotics from entering the U.S. via commercial 
        cargo and conveyances and cause total seizures of narcotics to 
        increase throughout the region.
   Disrupt a major mode of smuggling through an aggressive 
        attack on internal conspiracies.
   Force narcotics smuggling organizations to use methods more 
        open to detection and interdiction; i.e. air drops, speed 
        boats, etc.


    Another way U.S. Customs has assisted Mexican Customs in improving 
its customs inspections is by providing a Train-the-Trainer Workshop 
for fourteen officers from Mexico Customs, the Federal Attorney 
General's Office (PGR), and the Fiscal Federal Police in July 1997. 
U.S. Customs officers trained these narcotics interdiction officers in 
preparing lesson plans, delivery of the lessons, and general training 
efforts. In addition, U.S. Customs, through International Narcotics and 
Law Enforcement Matters (INL)/State Department, provided a training 
package to Mexican Customs, consisting of two overhead projectors, two 
television monitors, two VCR'S, two camcorders, and a transparency 
maker. This equipment was provided to Mexico Customs instructors to 
assist with regional training. In January 1998, one of the U.S. Customs 
instructors will return to Mexico to monitor training and determine the 
end use of the training equipment provided.

           U.S. Air/Maritime Access and Interdiction Efforts

    Question 1. In the last 9 months, have there been any instances in 
which a U.S. plane or ship has been unable to get permission for ``hot 
pursuit'' of suspect targets, conduct normal interdiction, or refuel in 
Mexican facilities? Is it true that U.S. Customs has had to reduce its 
flights due to a shortage of fuel from the Mexican attorney generals 
office?


    Answer. Since 1990, the Government of Mexico has allowed Customs 
aircraft to operate in various capacities within its sovereign 
airspace. Permission to track a suspect target back into Mexico in 
``hot pursuit'' is given on a case-by-case basis. Coordination of such 
a pursuit is initiated by the Domestic Air Interdiction Coordination 
Center (DAICC) through the American Embassy, Mexico City. The Aviation 
Liaison Officer (ALO) assigned to the Embassy contacts the appropriate 
Mexican authorities to request overflight authority for the pursuing 
Customs aircraft. At various times, permission has been obtained in as 
little as 15 minutes. In the last 9 months, there have been no 
instances where the Government of Mexico has denied ``hot pursuit'' of 
a suspect target by Customs aircraft.

    Funding constraints by the Government of Mexico have reduced non-
interdiction flights (i.e. patrol or training) by U.S. Customs to one 
per week. The Government of Mexico has placed no restrictions on actual 
interdiction missions and continues to be supportive.


    Question 2. Are you concerned that the Mexicans rely too heavily on 
U.S. interdiction efforts and have not invested enough to develop their 
own capacity to do this key job? Why haven't the Mexicans installed 
ground-based radar to protect their airspace from unauthorized flight? 
How have we or will we make up this ``blind spot?''


    Answer. Since 1991, U.S. Customs has stationed two of its Citation 
interceptors in Mexico to provide training and assistance to Government 
of Mexico officers in the tactics of interdicting drug trafficking 
aircraft. This cooperative effort has resulted in dramatic improvements 
in the Government of Mexico's air interdiction program. For example, in 
FY 1996, Government of Mexico interdiction forces successfully assumed 
control of 86 percent of the drug smuggling aircraft tracked to their 
country as compared to 54 percent in FY 1992.

    As far as the installation of ground-based radar in Mexico, we 
cannot speak for the Government of Mexico on issues relating to the 
closing of their ``blind spot'' or defense of their sovereign airspace.


    Question 3. How significant is it that 18 members of Mexico's air 
interdiction team were arrested last month for smuggling 165 pounds of 
cocaine in their government aircraft? Were these personnel trained by 
the United States government?


    Answer. It is difficult to judge the impact of these arrests on the 
Government of Mexico's air interdiction program. However, we believe 
that any law enforcement effort, whether domestic or foreign, would be 
damaged by such a compromise of integrity.

    The U.S. Customs Service Air Interdiction Division has trained 
approximately 184 Agents/Pilots through the Mexico Aviation Training 
Initiative (MATI). Of the personnel we have trained, we are aware of 
two who have been arrested: Ruben Partida Vargas, who attended the 
first MATI school in December 1992, and Pedro Chang-Escobar, who 
attended MATI in January 1994.

                Questions Submitted by Senator Grassley

                           1. Current Threat

    Question. Mexico recently received over 70 helicopters from the 
U.S. for use by the Mexican military. The original justification for 
those aircraft was to help in air interdiction. But now U.S. and 
Mexican officials are saying the major smuggling threat is maritime, 
especially in commercial vessels and cargo. In your evaluation, has 
this shift occurred? If that is the case, then what is the 
justification for providing the helicopters? What are these helicopters 
being used for today, if not air interdiction? Does the bilateral task 
force have access to/use of these helicopters?
    Answer. The U.S. Customs Service was not directly involved in the 
transfer of the 70 helicopters to the Mexican military by the U.S. 
Department of Defense last year. Therefore, questions concerning the 70 
helicopters should be addressed by the Department of Defense and/or the 
Department of State. Customs can, however, discuss the evolving drug 
threat.
    Since its inception, the Customs Aviation Program has helped reduce 
the flow of cross-border narcotics by general aviation aircraft by 75 
percent. Since the early 1980's, the program has changed substantially 
in terms of size and the geographic scope of our operations. our 
success along the U.S. border led to a defense-in-depth strategy of 
simultaneously attacking the smuggling threat in the source, transit 
and arrival zones. Customs current priorities for its air program are 
as follows:
    1. Maintain the Air Program's success in deterring the use of 
general aviation aircraft for smuggling drugs into the United States.
    2. Provide air support to the investigative and enforcement 
activities of Customs and other Federal, state and local law 
enforcement agencies.
    3. Provide operational support and training to foreign host nations 
in their efforts to interdict drugs en route to the U.S., especially in 
countries/regions such as Mexico and the Caribbean which border the 
U.S. and its territories.
    4. Support source zone efforts to disrupt cocaine transportation 
networks in South America (Presidential Decision Directive (PDD)-14).
    The success of our air program has led to changes in smuggling 
methods. While we can agree with the statement that the threat of drug 
smuggling in the maritime environment has increased, there has not been 
a concomitant decrease in the drug smuggling threat on the Southwest 
Border. As reported by the El Paso Intelligence Center (EPIC), seizures 
of narcotics have increased in Puerto Rico by approximately 148%. 
However, seizures along the Southwest Border have also increased during 
the past fiscal year. Seizures from commercial cargo have increased 
substantially. Seizures of narcotics from commercial cargo in FY 1996 
were greater than the total seizures of narcotics from commercial cargo 
for the years 1990 through 1995. In FY 1997 the seizures were increased 
further. However, the smuggling threat in commercial cargo is found 
both across our land borders as well as the maritime environment.
    Currently there is limited intelligence regarding maritime 
smuggling in general, and less about Mexican maritime smuggling. The 
Customs Service is developing Intelligence Teams composed of Customs 
Inspectors, Agents, Intelligence Analysts and Marine officers which are 
set up as Intelligence Collection and Analysis Teams to fill the void 
in intelligence on maritime smuggling activity. Nonetheless, based on 
the evidence available, we have formed the following hypothesis: In the 
maritime environment Mexican drug smuggling organizations are using a 
wide variety of methods and means to not only receive drug shipments, 
but to transship those drug loads into the United States. Intelligence 
has identified several incidents involving various sized, Mexican 
flagged fishing vessels in the Eastern Pacific which have received 
large multi-ton cocaine shipments from Colombia and Panama-based mother 
ships. These fishing vessels are believed to make landfall at points 
along the western coast of Mexico where the drug shipments are then 
moved overland to and across the Southwest Border.
    Intelligence indicates that in the Caribbean, go-fast boats are 
transporting loads of cocaine to points along Mexico's eastern coast 
where the drug loads are sent overland across our border with Mexico. 
In the Gulf of Mexico, there continues to be ``shark boat'' (small open 
boats equipped with powerful outboard motors) activity in the south 
Texas area north of Brownsville, Texas.
    The Gulf of Mexico is vulnerable to exploitation by drug smugglers. 
Bales of marijuana are floating up along beaches and inlets in various 
places from the Louisiana coast to the west coast of Florida at 
frequent intervals.
    Mexican maritime smuggling is not limited to fishing boats; there 
are indications that large container ships are also being used. In 
February of last year, a Mexican-owned container ship grounded itself 
by accident in the Florida Keys off Key West. It may have been off-
course while en route to a drop off point. Confidential sources 
revealed that approximately 1 ton of cocaine was successfully offloaded 
from the vessel before the crew reported their grounding to the Coast 
Guard. It is believed, through the same confidential sources, the 
shipment belonged to the Mexican Amado Carillo Fuentes organization.

                            2. Vetted Units

    Question. With the arrest of the Mexican Drug Czar General Jesus 
Gutierrez Rebollo on corruption charges, the existing vetted units were 
disbanded. What is your assessment of the new expanded vetting process? 
When will these newly vetted units come online?
    Answer. A new ``vetting'' process, in which FBI/DEA have provided 
technical support and assistance in the polygraphing, in addition to 
the Mexican integrity screening process for the staff of the Bilateral 
Task Force on the Mexican side of the border, began in the spring/
summer of 1997. All officers had to pass the new integrity screening 
and most candidates were chosen from the recent graduating class of the 
PGR Academy (further insurance that the officers should not yet have 
had occasion to be tainted). In addition, these vetted officers have 
come to the U.S. for additional training in advanced investigative 
techniques, ethics, etc. These officers are now being deployed to the 
Tijuana, Juarez, and Guadalajara areas. The U.S. Customs Service 
believes that this process will enhance the quality and integrity of 
the Mexican personnel.

                               3. Radars

    Question. The percentage of illegal drugs crossing our border from 
Mexico continues at an alarming rate. One of the main modes of 
transportation for smuggling ventures responsible for drugs being 
transshipped from South America through Mexico into the United States 
is through the use of various aircraft. The role of ground-based radar 
has proved successful in the interdiction of illegal narcotics in other 
areas of the world, including where there is a radar net in place in 
Mexico. However, intelligence indicates that drug traffickers have 
learned to circumvent the existing radar system and use alternate 
smuggling routes as a result of gaps within the existing system. When 
President Zedillo visited Washington in March of 1995, he promised the 
United States that Mexico would establish a radar net to fill these 
gaps. To date, no radars have been installed. What is your assessment 
of the threat of air smuggling into and out of Mexico?
    Questions concerning ground-based radar in Mexico should be 
addressed by the Department of Defense and/or the Department of State. 
Customs can, however, discuss its role in responding to the air 
smuggling threat.
    Since 1991, U.S. Customs has based two of its Citation interceptors 
in Mexico to provide training and assistance to Government of Mexico 
officers in the tactics of interdicting drug trafficking aircraft. This 
cooperative effort has resulted in dramatic improvements in the 
Government of Mexico's air interdiction program. For example, in FY 
1996, Government of Mexico interdiction forces successfully assumed 
control of 86 percent of the drug smuggling aircraft tracked to their 
country as compared to 54 percent in FY 1992. This would indicate that 
the Government of Mexico continues to develop an independent air 
interdiction program in response to the air smuggling threat.
    While the U.S. Customs Service cannot directly address the air 
smuggling threat across Mexico's southern land border we have 
maintained a proactive air interdiction program, with operations 
throughout the western hemisphere. This program is constantly adjusting 
to new smuggler tactics, by quickly identifying emerging trends and 
then formulating an appropriate response. We routinely assess our 
performance and available resources in order to deploy the most 
efficient and effective mix of aviation assets/technology. Overall we 
have maintained an effective air interdiction program with operations 
in the source, transit and arrival zones, in coordination with DOD, 
DEA, Department of State and foreign host nations.

                           4. Arms Smuggling

    Question. Drug cartels and criminal organizations are very well 
armed to facilitate their illegal enterprises. What is the United 
States doing to prevent the trafficking of illegal firearms into Mexico 
from the United States?
    Answer. The disruption of firearms trafficking activities along the 
border with Mexico through the interdiction of illicit firearms 
shipments and the investigation, prosecution and conviction of 
individuals and groups responsible for those acts is a primary 
objective of the U.S. Customs Service. Customs has established a border 
liaison effort with the responsible Mexican authorities to facilitate 
the sharing of intelligence relative to illicit trafficking in 
firearms.
    Customs is also involved in comprehensive firearms trafficking 
training initiatives aimed at increasing the effectiveness of both 
Mexican Customs and other Mexican law enforcement agencies' ability to 
deal with cross border illicit firearms trafficking. These training 
initiatives are conducted in cooperation with the Department of State 
and the Bureau of Alcohol, Tobacco and Firearms (ATF).
    The Customs Service has the Outbound Process which is responsible 
for enforcement of export laws. Inspectors assigned to Outbound teams 
conduct regular outbound enforcement operations at our land borders and 
major airports and seaports. These operations are closely coordinated 
with other Federal, state and local law enforcement agencies and 
designed to detect and intercept illegal export shipments.
    Customs has also received additional resources to enhance our 
outbound inspection capabilities. Customs is planning to build outbound 
inspection facilities along the southern border. In addition, the 
Customs Service is planning to provide our outbound inspection teams 
with enhanced detection equipment and resources such as currency and 
weapons detection canine teams.
    The Outbound Process also works closely with Customs Office of 
Investigations which coordinates with other federal agencies such as 
ATF, to target and intercept illegal weapons shipments to Mexico along 
our borders.

                          5. Money Laundering

    Question. In May 1996, Mexico passed legislation as part of the 
Mexico Criminal Code that for the first time makes money laundering a 
criminal offense. Because of the international aspect of money 
laundering, cooperation between countries when investigating money 
laundering cases is essential. Has the level of cooperation and 
information sharing improved between Mexico and the United States since 
this legislation passed? Has any individual or organization been 
charged under this new law and if not why? Also, have any institutions 
been identified as laundering problems? What kind of intelligence 
sharing between U.S. and Mexican investigators is occurring?
    Answer. Mexico, as well as a large number of other countries, is 
carrying out actions to prevent, detect and combat money laundering, 
which include: updating its legal framework, coordinating several 
government agencies, exchanging information and documentation with 
other countries pursuant to International Treaties and agreements, 
carrying out joint coordinated investigations, regulating financial 
entities regarding suspicious and outstanding currency transactions, 
creating a Financial Information Unit (FIU), and imparting training and 
technical expertise to personnel in charge of preventing, detecting, 
and combating money laundering transactions.
    On April 29, 1996, the Mexican legislature added Article 400 Bis to 
the Criminal Code, establishing for the first time the criminal offense 
of money laundering, which became effective on May 14, 1996, and is 
denominated as ``Transactions with resources from illicit origins.''
    The level of cooperation between the U.S. Customs Service and 
Mexico on money laundering has improved. The Mexicans are providing us 
with Currency and Monetary Instrument Reports (CMIR) to facilitate our 
investigative efforts. Customs has analyzed some of the data provided 
by the Government of Mexico and, as a result of the analysis, has 
initiated investigations of currency smuggling along the Southwest 
Border.
    Recent joint investigations which led to arrests and convictions in 
United States courts and in which Mexico provided assistance include:
    1. Ines Calderon Godoy (1995) Ines Calderon Godoy is a Member of 
the Arellano-Felix Organization. Federal Court in Arizona charged 
Calderon with money laundering charges and seized $1 million from him.
    2. Heberto Francisco Garcia Valenzuela (1996) He is the son of 
Heberto Francisco Garcia. Federal Court in Arizona convicted Garcia of 
drug trafficking and money laundering charges. He was sentenced to 25 
years and his father, Heberto was sentenced to 18 years, and $4.5 
million was also seized by the United States.
    3. Francisco Javier Leon Reyes (Investigation opened in 1992 and is 
continuing.) Federal Court of Arizona convicted Leon for false 
statements on a money laundering investigation. He was sentenced to 
serve 57 months in prison and the U.S. seized $133,000.
    4. Juan Garcia Abrego (Investigation opened in 1996 and is 
continuing.) Federal Court in Houston, Texas, convicted Garcia on drug 
and money laundering charges. Garcia was sentenced to serve life in 
prison.
    5. Jesus Echegollen Barrueta (Investigation opened in 1994 and is 
continuing.) Federal Court in Brownsville, Texas, convicted Echegollen 
on drug and money laundering charges. Echegollen was sentenced to life 
in prison and all of his belongings were seized. Associates of 
Echegollen, Guillermina Chavez and Jacob Levy were also convicted and 
Chavez was sentenced to 78 months in prison and had all of her 
belongings seized. Levy received 10 months in prison and was fined 
$15,000.
    6. Mario Ruiz Massieu (Investigation opened in 1995 and is 
continuing) Mario Ruiz Massieu, former Deputy Attorney General of 
Mexico, was arrested by Customs agents in New Jersey for smuggling 
currency based upon information provided by the Government of Mexico. 
Subsequent investigation led to the seizure and civil forfeiture of $9 
million in drug proceeds maintained by Massieu in a bank account in the 
United States. The civil trial took place in Federal court in Houston, 
Texas.
    Customs has a broad grant of authority in the conduct of 
international financial crime and money laundering investigations. 
Jurisdiction is triggered by the illegal movement of criminal funds, 
services, or merchandise across our national borders and is applied 
pursuant to the authority under the Bank Secrecy Act (BSA), Money 
Laundering Control Act (MLCA), and other Customs laws. Combined with 
our border search authority, Customs enforcement efforts focus on the 
most significant international criminal organizations (ICOS) whose 
corrupt influence often impacts global trade, economic, and financial 
systems. Customs efforts are not limited to drug related money 
laundering, but extend to the proceeds of all crime.
    Customs has implemented an aggressive strategy to combat money 
laundering and the flow of illegal proceeds into Mexico. Our approach 
involves interdiction efforts by Customs inspectors, criminal 
investigations by Customs Special Agents, and in partnership with 
Treasury, FinCEN, and others, the design and implementation of 
innovative regulatory interventions, unique to Treasury, that dismantle 
and disrupt systems, organizations, and industries that launder ill-
gotten gains. Customs dedicates some 500 Special Agents worldwide to 
money laundering investigations.
    Operation Choza Rica, launched by Customs Special Agents in 
McAllen, Texas, uncovered and subsequently dismantled a major Mexican 
money laundering network along the Southwest Border. This intricate web 
involved Mexican Casas de Cambio and established banks in the United 
States and Switzerland. In a series of criminal indictments, managing 
directors of several major Mexican Casas de Cambio and U.S. Banks, 
including American Express Bank International, First City Bank, Lone 
Star National Bank, and International Bank of Commerce were 
subsequently prosecuted and convicted for laundering money for the Juan 
Garcia-Abrego cocaine smuggling organization. In excess of 60 million 
dollars in cash and other assets were seized and forfeited in this 
investigation. AEBI forfeited 44 million dollars to the Treasury 
Forfeiture Fund representing the largest forfeiture ever by a domestic 
corporation.

                        6. Secure Communications

    It is my understanding that as recent as 2 weeks ago the 
availability of secure lines for communication with vetted units in 
Mexico has not been resolved. In addition, I have heard reports that 
there is no secure communications between our consulates and the 
Embassy in Mexico City. As I am sure you are aware, secure 
communications is essential to running not only a successful foreign 
policy but in conducting a proper investigation. What is your 
understanding of this problem and is there a solution underway?
    Answer. The U.S. Customs Service is not responsible for providing 
secure communications between the U.S. and our Embassy in Mexico. 
However, the U.S. Customs Service does have the capability to 
communicate in a secure mode with the Embassy and its occupants. In 
fact, Customs does communicate with the Customs attache at the U.S. 
Embassy in Mexico City on a daily basis using secure communications 
including both fax and voice, and our capabilities are well established 
in this arena.
 Additional Questions Submitted for the Record to Thomas Kneir, Deputy 
Assistant Director, Organized Crime and Drug Branch, Federal Bureau of 
                             Investigation

                  Questions Submitted by Senator Helms

                        U.S.-Mexico Cooperation

    Question 1. DEA Administrator Thomas Constantine asserted earlier 
this year that there is not a single Mexican law enforcement agency 
with which DEA has a completely trusting relationship. Is there a 
single Mexican law enforcement agency with which the FBI has a 
completely trusting relationship. Is there a single Mexican law 
enforcement agency with which the FBI has a completely trusting 
relationship today?
    Answer. Since March of this year, some encouraging developments 
have taken place, indicating a willingness on the part of the 
Government of Mexico (GOM) to improve their counternarcotics 
organizations, as well as their overall performance in investigating 
the organized crime syndicates in Mexico.
    After the arrest of General Gutierrez-Rebollo in February 1997, the 
GOM dismantled the National Institute for the Combat of Drugs (INCD). 
In place of the INCD, the GOM established a new anti-drug unit, the 
Special Prosecutor's Office of Drug Crimes, the Fiscalia Especializada 
Para Atencion de Delitos Control La Salud, or FEADS. It was apparent 
that, in order to be effective, Mexican law enforcement organizations 
needed to be staffed with high-caliber, trustworthy individuals who are 
deeply committed to drug control efforts. FEADS is responsible for drug 
law enforcement under the office of the Mexican Attorney General, 
Procuraduria General de la Republica, or PGR, and is headed by 
Commissioner Mariano Herran-Salvetti, an attorney. Attorney General 
Madrazzo and Commissioner Herran have instituted a program of selecting 
and ``vetting'' employees involved in counterdrug activities. The 
Mexican vetting process involves a psychological assessment, financial 
background checks, urinalysis, and polygraphs. The U.S. administers its 
own polygraph tests for those units in which Mexicans and Americans 
work side by side. DEA and the FBI have also worked with the GOM to 
help identify, select and train individuals who are further vetted, and 
who will work on more sensitive law enforcement projects.
    FEADS currently employs approximately 870 agents, of which 200 are 
``vetted'' by the GOM and a portion of those have been vetted further. 
Plans call for a total of 2,000 fully Mexican-vetted employees and both 
the FBI and DEA are committed to assisting the GOM reach that goal.
    Under the auspices of FEADS are two specialized units, the 
Organized Crime Unit (OCU) and the Special Investigation Unit (SIU), 
and the Bilateral Task Forces (BTF's). Both the OCU and SIU report to 
Dr. Samuel Gonzalez-Ruiz who is also an attorney. These units, in which 
Americans and Mexicans work, are charged with the responsibility of 
gathering intelligence and building cases against the most significant 
drug traffickers in Mexico. Both organizations are comprised of cleared 
and U.S.-vetted employees, although neither is fully staffed yet.
    The FBI/Legat has a very trusting relationship with the Mexican 
Attorney General's Office (PGR). The Legat has an excellent 
relationship with the PGR, which is as good and professional as ever 
before. Extraditions and deportations of U.S. fugitives are being 
handled in an expedited manner. The system is not perfect because, 
Mexican law rarely allows for the extradition of its nationals and also 
allows for ``amparos'' (appeals), to go on for an extended period. 
However, these are constitutional issues, and out of the control of the 
PGR. Legat believes that the PGR has been clearly working well within 
the law and should be commended for their assistance to our efforts. It 
should be noted that Legat's dealings with the PGR are primarily in 
non-drug trafficking cases.
    Question 2. What cooperation does the FBI have with Mexican 
counterparts today? Is that practical cooperation more or less active 
today that it was 12 months ago?
    Answer. Since the inception of the OCU, the FBI has received 
excellent cooperation from the Mexican counterparts. This level of 
cooperation is much more active and effective than it was 12 months 
ago. Legat believes that our counterparts in the PGR are providing 
practical cooperation at a greater level than 12 months ago. For 
example, on 09/17/97, following a Legat request for a search warrant, 
the PGR executed the warrant in Mexico City, which resulted in finding 
items of evidence, which directly lead to the recovery of almost 19 
million dollars in North Carolina. The money had been stolen from an 
armored car in Jacksonville, Florida, several months earlier.
    Another example that highlights the increased cooperation that the 
FBI has experienced with law enforcement agencies in Mexico as 
illustrated by an investigation in our San Diego office. ``Operation 
Logan Sweep,'' was initiated in February, 1996, and targeted the 
criminal activities of a violent San Diego gang known as the Logan 
Street Gang. During the course of this investigation, it was determined 
that the Arellano Felix organization was using members of the Logan 
Street Gang to distribute cocaine and marijuana and act as 
``enforcers'' in the furtherance of their drug trafficking 
organization. This investigation resulted in the indictment of numerous 
gang members to include Ramon Arellano Felix the most violent brother. 
Due to his extreme violent nature and it's impact on the American 
public, Ramon Arellano Felix was announced as an FBI top 10 fugitive. 
The significance of case is that it was accomplished by a joint 
federal, state and local task force with the assistance of Mexican law 
enforcement. The cooperation of Mexican law enforcement proved to be 
invaluable to this investigation, in that they assisted in the 
identification and subsequent relocation of several critical 
cooperating witnesses.
    In a highly sensitive ongoing Southwest Border investigation, an 
FBI undercover operation has wire transferred funds to a bank account 
in Mexico for the payment of a large quantity of drugs. Coordination 
between a newly created vetted Mexican unit and FBI Resolution 6 agents 
has been initiated. The Mexican unit will attempt to track this money 
in the Mexican banking system and potentially follow it to its ultimate 
destination. This vetted Mexican unit has also assisted the FBI is 
obtaining information regarding telephone numbers of individuals 
involved in drug trafficking. These are but a few examples of the 
cooperation and relationship that the FBI has developed with the PGR.
    Question 3. With respect to the importance of ``intelligence'' to 
identify contraband, do you think that the FBI and other U.S. law 
enforcement officials should be allowed more routine contact with 
counterparts and others on the Mexican side of the border to gather 
this information? We have been told that these personnel have to clear 
all such contacts through our Embassy in Mexico City.
    Answer. In order to ensure maximum security and coordination 
amongst U.S. agencies and between U.S. and Mexican agencies, a 
centralized form of ``country clearance'', is necessary for U.S. 
personnel to travel to the interior of Mexico to conduct official 
business. However, the current border regulations of allowing U.S. 
personnel to travel only 25 kilometers into Mexico should be expanded 
to allow for increased contact with Mexican counterparts. This policy 
is restrictive and is counter productive in that it limits the 
gathering of intelligence.

           Bilateral Border Task Forces/Organized Crime Unit

    Question 1. The ONDCP report describes the border task forces as 
the ``cornerstone'' of U.S. cooperation. How has and how will the FBI 
support these task forces? Are new FBI personnel accredited in Mexico 
posted there yet?
    Answer. The BTF'S, which were originally established in Tijuana, 
Juarez, and Monterrey, were conceived on a frame work of frequent and 
continued interaction between the U.S. and Mexican law enforcement 
officers at the operational level and a free flow of information. The 
goal was to ultimately create a unit in each city which could direct 
the joint resources of Mexico and the United States against syndicate 
leaders. Unfortunately, because of the ``security'' issues, the BTF's 
have never reached their full potential as FBI, DEA and U.S. Customs 
have had to adopt a less effective operational strategy.
    The FBI and DEA will continue to assist the GOM as they work to 
improve their law enforcement capabilities. The FBI and DEA are jointly 
assisting in the vetting of the Mexican agents assigned to the BTFS. In 
addition, both agencies are conducting a one month training course, 
held in the U.S., for all BTF and OCU agents. We believe that progress 
will not occur overnight, and substantial time is necessary for real 
improvements in Mexico's law enforcement organizations to bear fruit.
    Question 2. What support has and will the FBI provide to the 
formation and operation of the new Organized Crime Unit? Special Anti-
Drug Prosecutor's Office (FEADS)? FinancialCrimes Unit?
    Answer. FEADS, the Organized Crime Unit (OCU) and the Financial 
Crimes Unit have been supported by the FBI through the vetting process, 
training and manpower. These units are charged with the responsibility 
of gathering intelligence and building cases against the most 
significant drug traffickers and organized crime figures in Mexico. 
Both organizations are comprised of vetted employees, although neither 
is fully staffed yet. The FBI is also prepared to provide advanced 
training in areas of specialization such as Forensics, White Collar 
Crime, Organized Crime, Money Laundering, etc.

                           Seizures by Mexico

    Question 1. Do the Mexicans have an adequate strategy, 
infrastructure and resources to inspect cargo entering and transiting 
their country? Do they inspect the millions of containers arriving in 
their ports from South America each year? For example, do they have 
adequate customs inspection at their ports? How have they improved 
their maritime operations? What steps have we taken to assist the 
Mexicans to improve their own ``customs'' inspections? Does the U.S. 
government have information that the same drugs seized by Mexican 
authorities and credited to their seizure statistics later end up back 
on the illicit drug market?
    Answer. This matter falls within the jurisdiction and expertise of 
the United States Customs Service, and therefore, this question should 
be directed to them for an opinion.

                 U.S. Law Enforcement Weapons-Carrying

    Question 1. Do any FBI personnel assigned to Mexico carry weapons 
today for their own defense? Which positions and what diplomatic 
credentials do these persons hold? Isn't it correct that such officers 
to whom the Mexicans have given full diplomatic immunities do routinely 
carry their weapons in Mexico today?
    Answer. FBI personnel assigned to Mexico under Resolution 6 do not 
have full diplomatic immunity, however, they do carry weapons in 
accordance with DEA guidelines which are: all Agents will carry 
official firearms in the performance of their duties. FBI Agents 
assigned to the Legat in Mexico also do not have full diplomatic 
immunity, however, they do carry weapons under the authorization of the 
Chief of Mission and as required by FBI Headquarters. These Agents 
carry Consular Employee credentials, only the FBI Legat and DEA Country 
Attache carry Diplomatic Credentials (full diplomatic ``immunities'') 
in Mexico.

                         Money Laundering Cases

    Question 1. What priority do you attach to building money 
laundering cases? Is it your policy that we should do more to increase 
such prosecutions? What specific steps are being taken to build more 
such cases right here in the U.S.?
    Answer. Legat places a high priority on money laundering cases. 
Approximately one year ago, the Mexican government passed an Organized 
Crime Bill which allows for these prosecutions. Because it is new 
legislation, the Government of Mexico (GOM) and specifically the 
Hacienda (Tax) Department, which handles the bulk of these cases, are 
just beginning to learn how to conduct and pursue these cases. Over the 
past two years, the FBI has provided money laundering training to 
Mexican law enforcement and will continue provide basic and advanced 
money laundering training in the future. The FBI is optimistic that 
significant prosecutions will take place in this area in the future 
once the GOM gains experience

                Questions Submitted by Senator Grassley

                 1. Extradition and Mexican Prosecution

    Question. It is my understanding that an official to the Chamber of 
Deputies who was recently elected has an outstanding bench warrant for 
flight from prosecution. What comments, if any has Mexico made on this 
situation? What pressure has the Justice or State departments brought 
in this situation? What other reasonable actions have or could be 
taken?
    Answer. Since no name was provided, it is difficult to be sure that 
our response refers to the person about whom you are inquiring. Our 
research has determined that recently elected, former National Action 
Party (PAN) Federal Deputy, Jose Adan Deniz Macias, was investigated by 
the FBI in 1976 after information was revealed that he and his brother, 
Francisco Javier Deniz, were deserters from the U.S. Navy and both 
faked their deaths to collect insurance money. By Deniz's own 
admission, he deserted the U.S. Navy in 1974 and collected money from 
his fictitious death. When this information became public, he separated 
himself from the PAN political party and currently holds his seat in 
the Federal Congress as an independent.
    FBI Los Angeles opened an investigation on Deniz in 1976, charging 
him with Title 18, USC 1542, False Statement on a Passport Application. 
A warrant for his arrest was issued on May 26, 1976. The passport 
charges against Deniz were dismissed in 1978. Recently, due to the 
publicity surrounding Deniz's election, this matter was brought to the 
U.S. Attorney's office for a prosecutive opinion. Prosecution was 
declined because the Statute of Limitations expired and that there has 
been no ongoing criminal activity in this case.
    The U.S. Navy currently has outstanding warrants for the arrest of 
both Deniz brothers, for fraudulent enlistment, desertion, and 
falsifying their deaths in order to receive death benefits. These 
however, are not extraditable offenses. Therefore, at this time the 
U.S. is not actively pursuing these charges.

                             2. Extradition

    Question. Last week, before the House Judiciary Committee, Mr. 
Hutchinson asked a former cartel member what he felt was the greatest 
tool or weapon that law enforcement has against drug traffickers. The 
answer was simple and straight forward: Extradition. To quote, ``that 
is the real weapon that the United States can wield to end the war 
against drugs . . . it's the law that is much stricter and there is no 
way of fixing it up . . .'' I realize that he was speaking of Colombia, 
but it's only logical that the same would be true for Mexico. What 
actions is the U.S. taking to pressure Mexico to extradite drug 
traffickers? Do you believe that the Government of Mexico (GOM) would 
extradite Arellano Felix, now on the FBI's 10 most wanted list, to the 
U.S. if he is arrested? Do you feel the GOM is presently making a full 
faith effort to pursue and capture him?
    Answer. Since 1996 the GOM has stated a willingness to extradite 
fugitives involved in drug trafficking to the United States. However, 
there have only been two extraditions from Mexico to the United States, 
both occurring in 1996, and only one involved a significant Mexican 
national drug organization leader for drug related offenses, Juan 
Garcia Abrego. Efforts to effect the extradition of known drug 
traffickers have encountered significant delays. One example of an 
extradition delay is Oscar Malherbe DeLeon, one of Juan Garcia Abrego's 
top lieutenants, who was arrested in February 1997, by Mexican 
authorities while he was hospitalized under an alias name. In 1993, 
Malherbe Deleon was indicted in the Southern District of Texas and 
charged with a variety of drug trafficking offenses stemming from his 
involvement in the Juan Garcia Abrego Organization. The DOJ has 
requested the extradition of Malherbe DeLeon, who is a Mexican national 
with no success to date.
    The Department of Justice, Office of International Affairs, is 
continually addressing the extradition issue with the GOM and pursuing 
such cases individually. The GOM will demonstrate its commitment to the 
mutual fight against Mexican based drug organizations when significant 
Mexican drug organizations members/leaders residing in Mexico, who are 
indicted in the United States for drug trafficking activity, are 
extradited with out lengthy delays and roadblocks.
    Regarding the capture and extradition of Ramon Arellano Felix who 
is on the FBI's 10 Most Wanted List, the GOM has outstanding arrest 
warrants for the Arellano-Felix brothers and recently offered a reward 
of $1 million for information leading to their capture. Therefore it 
appears that the GOM is making a good faith effort to locate and 
capture this dangerous fugitive. The United States has offered a $2 
million reward for the capture of Ramon Arellano.

                             3. Corruption

    Question. The threat of corruption at the border is tremendous. Do 
you believe that we are getting the type of cooperation we need from 
Mexico to combat the threat of corruption to U.S. personnel stationed 
along the border? Do you feel that Mexico can deal with this problem 
effectively? You are a participant in the HLCG; how has corruption been 
addressed? Do you see the obstacles as a result of corruption 
interfering with the goals of the working groups? Would you recommend a 
separate working group specifically set up to address the growing 
problem of corruption?
    Answer. Corruption continues to be a significant issue, it remains 
systemic and crosses all institutions, including the criminal justice 
systems in Mexico. The depth of corruption was typified in February, 
1997, by the arrest of General Jesus Gutierrez-Rebollo, then chief of 
Mexico's lead antidrug agency, the National Institute to Combat Drugs 
(INCD). General Rebollo was arrested for providing information to the 
Amado Carrillo Fuentes Organization. In response to General Rebollo's 
arrest, the GOM dismantled the INCD, and removed the majority of its 
employees for corrupt activities. In an effort to combat corruption the 
GOM created a new drug enforcement agency called the Fiscalia 
Especializado para La Atencion De Delitos Contra La Salud (FEADS). This 
new unit is staffed with vetted personnel who monitor the activities of 
the Border Task Forces and the Organized Crime Unit. It is hoped that 
the measures being taken by the GOM, such as creating special, fully 
vetted law enforcement units will be successful in eliminating or 
reducing corruption, which will allow successful cooperative bilateral 
operations with U.S. law enforcement agencies.
    As a member of the HLCG, I believe that the GOM needs to 
continually address the issue of corruption and its effect on law 
enforcement and the judicial system. I do not believe that there are 
any obstacles resulting from corruption in the HLCG because we are 
working with a selected group within law enforcement to avoid 
corruption. However we are always cognizant of the potential threat of 
corruption at all levels.
    At this time, I do not see a need for a separate working group to 
address matters of corruption. There are vetted groups formed that 
currently address drug matters. Because corruption is so intertwined 
with drug matters, these groups effectively address corruption matters 
as well.