[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]


 
 ESCALATING VIOLENCE IN MEXICO AND THE SOUTHWEST BORDER AS A RESULT OF 
                         THE ILLICIT DRUG TRADE 

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

                                HEARING

                               BEFORE THE

                   SUBCOMMITTEE ON CRIME, TERRORISM,
                         AND HOMELAND SECURITY

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 6, 2009

                               __________

                           Serial No. 111-25

                               __________

         Printed for the use of the Committee on the Judiciary


      Available via the World Wide Web: http://judiciary.house.gov

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49-476 PDF                       WASHINGTON : 2009 

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                       COMMITTEE ON THE JUDICIARY

                 JOHN CONYERS, Jr., Michigan, Chairman
HOWARD L. BERMAN, California         LAMAR SMITH, Texas
RICK BOUCHER, Virginia               F. JAMES SENSENBRENNER, Jr., 
JERROLD NADLER, New York                 Wisconsin
ROBERT C. ``BOBBY'' SCOTT, Virginia  HOWARD COBLE, North Carolina
MELVIN L. WATT, North Carolina       ELTON GALLEGLY, California
ZOE LOFGREN, California              BOB GOODLATTE, Virginia
SHEILA JACKSON LEE, Texas            DANIEL E. LUNGREN, California
MAXINE WATERS, California            DARRELL E. ISSA, California
WILLIAM D. DELAHUNT, Massachusetts   J. RANDY FORBES, Virginia
ROBERT WEXLER, Florida               STEVE KING, Iowa
STEVE COHEN, Tennessee               TRENT FRANKS, Arizona
HENRY C. ``HANK'' JOHNSON, Jr.,      LOUIE GOHMERT, Texas
  Georgia                            JIM JORDAN, Ohio
PEDRO PIERLUISI, Puerto Rico         TED POE, Texas
MIKE QUIGLEY, Illinois               JASON CHAFFETZ, Utah
LUIS V. GUTIERREZ, Illinois          TOM ROONEY, Florida
BRAD SHERMAN, California             GREGG HARPER, Mississippi
TAMMY BALDWIN, Wisconsin
CHARLES A. GONZALEZ, Texas
ANTHONY D. WEINER, New York
ADAM B. SCHIFF, California
LINDA T. SANCHEZ, California
DEBBIE WASSERMAN SCHULTZ, Florida
DANIEL MAFFEI, New York

            Perry Apelbaum, Staff Director and Chief Counsel
      Sean McLaughlin, Minority Chief of Staff and General Counsel
                                 ------                                

        Subcommittee on Crime, Terrorism, and Homeland Security

             ROBERT C. ``BOBBY'' SCOTT, Virginia, Chairman

PEDRO PIERLUISI, Puerto Rico         LOUIE GOHMERT, Texas
JERROLD NADLER, New York             TED POE, Texas
ZOE LOFGREN, California              BOB GOODLATTE, Virginia
SHEILA JACKSON LEE, Texas            DANIEL E. LUNGREN, California
MAXINE WATERS, California            J. RANDY FORBES, Virginia
STEVE COHEN, Tennessee               TOM ROONEY, Florida
ANTHONY D. WEINER, New York
DEBBIE WASSERMAN SCHULTZ, Florida
[Vacant]

                      Bobby Vassar, Chief Counsel

                    Caroline Lynch, Minority Counsel



















                            C O N T E N T S

                              ----------                              

                              MAY 6, 2009

                                                                   Page

                           OPENING STATEMENTS

The Honorable Robert C. ``Bobby'' Scott, a Representative in 
  Congress from the State of Virginia, and Chairman, Subcommittee 
  on Crime, Terrorism, and Homeland Security.....................     1
The Honorable Louie Gohmert, a Representative in Congress from 
  the State of Texas, and Ranking Member, Subcommittee on Crime, 
  Terrorism, and Homeland Security...............................     2
The Honorable Lamar Smith, a Representative in Congress from the 
  State of Texas, and Ranking Member, Committee on the Judiciary.     4

                               WITNESSES

Mr. Stuart G. Nash, Associate Deputy Attorney General, and 
  Director, Organized Crime Drug Enforcement Task Forces 
  (OCDETF), U.S. Department of Justice
  Oral Testimony.................................................    12
  Prepared Statement.............................................    15
Mr. Salvador Nieto, Deputy Assistant Commissioner, Office of 
  Intelligence and Operations Coordination, U.S. Customs and 
  Border Protection, U.S. Department of Homeland Security
  Oral Testimony.................................................    37
  Prepared Statement.............................................    38
Ms. Janice Ayala, Deputy Assistant Director, Office of 
  Investigations, U.S. Immigration and Customs Enforcement, U.S. 
  Department of Homeland Security
  Oral Testimony.................................................    41
  Prepared Statement.............................................    43
Mr. Anthony P. Placido, Assistant Administrator for Intelligence, 
  United States Drug Enforcement Administration, U.S. Department 
  of Justice
  Oral Testimony.................................................    47
  Prepared Statement.............................................    15
Mr. William J. Hoover, Acting Deputy Director, Bureau of Alcohol, 
  Tobacco, Firearms and Explosives, U.S. Department of Justice
  Oral Testimony.................................................    49
  Prepared Statement.............................................    15

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Prepared Statement of the Honorable Sheila Jackson Lee, a 
  Representative in Congress from the State of Texas, and Member, 
  Subcommittee on Crime, Terrorism, and Homeland Security........     6

                                APPENDIX

Material Submitted for the Hearing Record........................    67


 ESCALATING VIOLENCE IN MEXICO AND THE SOUTHWEST BORDER AS A RESULT OF 
                         THE ILLICIT DRUG TRADE

                              ----------                              


                         WEDNESDAY, MAY 6, 2009

              House of Representatives,    
              Subcommittee on Crime, Terrorism,    
                              and Homeland Security
                                Committee on the Judiciary,
                                                    Washington, DC.

    The Subcommittee met, pursuant to notice, at 3:55 p.m., in 
room 2141, Rayburn House Office Building, the Honorable Robert 
C. ``Bobby'' Scott (Chairman of the Subcommittee) presiding.
    Present: Representatives Scott, Jackson Lee, Pierluisi, 
Gohmert, Poe, Goodlatte, Rooney and Smith.
    Staff Present: Bobby Vassar, Subcommittee Chief Counsel; 
Mario Dispenza, Fellow, ATF Detailee; Karen Wilkinson, Fellow, 
Federal Public Defender's Office Detailee; Veronica Eligan, 
Professional Staff Member; Caroline Lynch, Minority Counsel; 
Kimani Little, Minority Counsel; and Kelsey Whitlock, Minority 
Staff Assistant.
    Mr. Scott. Good afternoon.
    I first want to apologize for the delay. We had crime bills 
on the floor unexpectedly. We thought we were going to be there 
at about 11 this morning, and did not get on until about 1:30, 
so we appreciate your indulgence.
    The Subcommittee will now come to order. Welcome to the 
hearing before the Subcommittee on Crime, Terrorism, and 
Homeland Security on the escalating violence in Mexico and the 
southwest border as a result of the illicit drug trade.
    For several months, the media has reported horrific 
violence occurring in Mexico and along the U.S. southwest 
border, stemming from illegal drug trafficking. Traffickers 
have been brazen enough to threaten police, government 
officials and even their families because of stepped-up 
government efforts into drug interdiction. The actual attacks 
have been rampant and gruesome. Our hearing today will explore 
the extent of the violence and the role of the U.S. law 
enforcement agencies in combating it.
    Of course, violence associated with drug trafficking and 
organized crime is nothing new. Other nations, most notably 
Colombia and Italy, experienced heightened violence when their 
governments stepped up enforcement efforts in the late 1980's 
and 1990's.
    Similarly, the surge in violence Mexico is experiencing 
seems to be related to Mexican President Calderon's targeted 
and successful crackdown on illicit drug organizations. As 
Mexican security forces have seized thousands of firearms and 
tons of drugs, the trafficking has become more difficult. As a 
result, the traffickers have become more violent as they fight 
to control fewer trafficking routes. Because these routes flow 
to and from the United States, our Border States are most 
directly affected by the violence. In Phoenix alone, a special 
task force of 10 investigators has dismantled 31 crime cells 
and has made more than 220 arrests in response to over 350 
kidnappings and other violence over the past 2 years.
    But the violence is, by no means, limited to the border. 
According to a December report by the Department of Justice's 
National Drug Intelligence Center, Mexican drug trafficking 
organizations have established a presence in 230 U.S. cities, 
as far apart as Anchorage and Atlanta, further intertwining 
Mexico and United States in the fight to control the violence 
over firearm trafficking.
    According to the Bureau of Alcohol, Tobacco, Firearms and 
Explosives, approximately 90 percent of the weapons seized in 
Mexico that are traced originate here and end up in the hands 
of Mexican drug traffickers. Clearly we have a shared problem; 
however, before we can solve the problem, we must assess it 
accurately, focusing on reality and not sensationalism.
    The violence has, indeed, been gruesome. However, according 
to the Mexican Government, 64 percent of their drug-related 
violence is mostly concentrated in three Northern and 
Southwestern States where only 15 percent of their population 
lives. Moreover, the murder rate in Ciudad Juarez, Mexico's 
hardest-hit city, is six times lower than was Colombia's murder 
rate during the early 1990's. Since that time, Medellin's 
homicide rate has dropped by 90 percent. Thus, the situation is 
serious, but it is not as widespread as some reports would lead 
us to believe, and neither is it insurmountable.
    Mexico has initiated key steps to overcoming the latest 
escalation of violence. In addition to increased enforcement 
efforts, Mexico has made crucial institutional reforms in its 
judicial system, police hiring, technology investment, and drug 
abuse prevention and treatment efforts. These key changes 
promise a more secure, long-term solution than enforcement 
efforts alone could provide.
    The United States' Federal law enforcement efforts have 
been greatly enhanced. In March of this year, the Obama 
administration announced a major increase in law enforcement 
resources to partner with Mexico in combating drug and firearm 
trafficking.
    Today we will hear from representatives from the Department 
of Justice to explain its role in combating the drug and 
firearm trafficking and its resultant violence.
    So I am pleased at this point to recognize the esteemed 
Ranking Member of the Subcommittee, the gentleman from Texas, 
Judge Gohmert.
    Mr. Gohmert. Thank you, Mr. Chairman. Thank you for holding 
this hearing, and thank you for calling me ``esteemed.''
    We are grateful to you for being here, our witnesses. I 
know that this has been an inordinate delay, but thank you for 
your patience.
    For several months now, we have heard reports of escalating 
violence by Mexican drug cartels, of violence targeted at rival 
cartels and at officials of the Mexican Government; not just 
violence, but gruesome acts intended to terrorize local 
communities and to intimidate the Mexican Government into 
abandoning its mission to rid Mexico of the scourge of illegal 
drugs.
    Mexico is the primary transit point in the U.S. for all 
four major drugs of choice: marijuana, cocaine, 
methamphetamine, and heroin. In fact, 91 percent of all cocaine 
abuse in America is supposedly trafficked through Mexico. So it 
comes as no surprise that these cartels would resort to such 
tactics, given the Calderon government's efforts to shut down 
their trafficking operations and to rid the government of the 
corruption that has allowed these cartels to prosper for years, 
and, I would submit, that has caused the country to not become 
the power that it could be in the world.
    In addition to dozens of extraditions of drug cartel 
members from Mexico to the U.S. for prosecution, Mexican 
authorities in recent weeks have arrested the suspected leader 
of the violent Zeta gang in the border city of Matamoros, 
across from Brownsville, Texas, as well as a top official in 
the Juarez and Sinaloa Cartels.
    In March, Forbes magazine listed Joaquin ``El Chapo'' 
Guzman-Loera, the head of the Sinaloa Cartel, as one of the 
world's self-made billionaires. His inclusion on this list 
brings the breadth of the illegal drug trade into stark 
reality.
    We simply cannot address the cartel violence in Mexico 
without addressing both the supply and demand of illegal drugs 
here in America. According to the Drug Enforcement 
Administration, Mexico is the number one foreign supplier of 
marijuana abuse in the United States. In fact, marijuana is 
considered the cash crop that finances the cartel's drug trade, 
corruption and violence. So it came as a shock to me when 
Attorney General Holder announced in February that the D.A. 
would no longer conduct raids on facilities that are operating 
in compliance with State laws despite their violation of 
Federal drug laws. This is an issue that still needs to be 
addressed.
    Another matter that has caused concern was when some of us 
heard the Administration say that 90 percent--or even the 
President say that 90 percent of all of the guns involved in 
violence in Mexico are apparently from the United States, which 
as it turns out--it sure appears from the numbers that I have 
been able to get--that only 17 percent of the guns found at 
Mexican crime scenes have been traced to the United States. A 
large percentage of the guns recovered in Mexico are not sent 
back to the United States for tracing because it is obvious 
from their markings that they did not come from the U.S., but 
the numbers that we have been provided say that, in 2007 to 
2008, 6,000 guns were successfully traced, and of these, 90 
percent--this is by the ATF--90 percent, or 5,114, were traced 
to the U.S.; but in those same 2 years, according to the 
Mexican Government, 29,000 guns were recovered at crime scenes. 
So there is not 90 percent coming from the United States, but 
17 percent.
    Another issue that has just arisen today, as reported in 
the press--the Chicago Tribune reported that the Sinaloa Cartel 
is now authorizing the use of force and violence inside the 
United States to protect their loads of illegal drugs. That 
force is supposedly being authorized in the United States. Now, 
that may be a testimony to the effectiveness in how they have 
been hurt by the U.S.' curtailing the drugs being imported into 
the United States. Whatever the reason, if this is true, and 
they are authorizing violence against our people whom we are 
paying to protect us, then we have got to have an appropriate 
counterstrategy to that, and I hope we hear about that shortly.
    Anyway, I do appreciate your patience, and look forward to 
your testimony.
    I yield back the balance of my time.
    Mr. Scott. Thank you.
    We have the Ranking Member of the full Committee, the 
gentleman from Texas, Mr. Smith, who actually suggested the 
hearing.
    It is good to see you here.
    Mr. Smith. Thank you, Mr. Chairman. Actually, I was going 
to give you credit and thank you for having this hearing, which 
is both timely and appropriate. I do appreciate the 
collaboration. It is a bipartisan subject, and I always 
appreciate being able to work with you on items like this.
    Also, Mr. Chairman, I think I heard you, as I walked in, 
express your appreciation to the witnesses for waiting so long, 
and I, too, was going to say to them that the debate and the 
votes on some three judiciary bills that were on the House 
floor took a lot longer than we thought. In fact, the vote 
actually occurred about 1 hour longer than we were told when it 
was going to occur, and I am afraid you all had to wait, but we 
do appreciate that.
    Mexico, our neighbor to the south, is experiencing a surge 
in homicides and in other violent crimes. Drug cartels are to 
blame. In a little more than a year, more than 7,000 people 
have been murdered, many of them cartel members or associates. 
These international crime syndicates are like any other 
criminal organization that attempts to exercise its authority 
through threats, fear and murder, but Mexican President Felipe 
Calderon has vowed to take on the Mexican drug cartels and to 
put an end to their reign.
    We are seeing the results of this effort through better 
cooperation with U.S. law enforcement agencies, through the 
increased extraditions of cartel members to the U.S., and 
through a campaign to rid the Mexican Government of the 
corruption that has fostered the cartels' power for years.
    Regrettably, though, some are using the violence along the 
border as a justification for stricter gun laws. In recent 
weeks both the news media and elected officials have repeated a 
statistic that would be alarming if true, that 90 percent of 
the firearms seized in Mexico come from the U.S. This is simply 
false.
    What is true is that 90 percent of those weapons that are 
seized and traced are linked back to a point of sale in the 
United States, but this accounts for only 17 percent of the 
guns actually found at Mexican crime scenes. The remaining 83 
percent come from Central and South America or as far away as 
Russia, according to a recent report.
    Regulating the ownership of firearms by law-abiding 
citizens will do nothing to stop criminals from trafficking 
guns into Mexico. There are those who suggest that the solution 
to border violence is to legalize drugs. That is like saying 
that the solution to our economic crisis is to legalize fraud.
    If Congress is serious about addressing border violence in 
Mexico, we should first eliminate the demand for illegal drugs 
in the U.S. by cracking down on drug dealers. Unfortunately, 
some want to significantly reduce the punishment for drug 
crimes, but reducing the demand for drugs in the U.S. will help 
prevent drug-related violence from spilling across the U.S.-
Mexico border.
    In late March, the Administration announced that it planned 
to redeploy personnel and resources along the border to help 
curtail the violence. I support these actions, but remain 
concerned that the redeployment of personnel and resources may 
come at the expense of other critical law enforcement 
activities. Border violence should not be used as an excuse to 
reduce the interior enforcement of our immigration laws and to 
enact gun restrictions.
    Mr. Chairman, the threat of violence spilling across the 
U.S. border would be much less if we would complete the 
construction of the border fence. The Border Patrol has stated 
that, where used, it has reduced apprehensions by 95 percent, 
and when apprehensions are down, so is the amount of drugs 
coming across the border--and the related violence.
    Mr. Chairman, thank you, and I yield back the balance of my 
time.
    Mr. Scott. Thank you.
    We have also been joined by the gentlelady from Texas Ms. 
Jackson Lee. I ask that any other additional statements be made 
part of the record.
    Without objection.
    [The prepared statement of Ms. Jackson Lee follows:]
       Prepared Statement of the Honorable Sheila Jackson Lee, a 
    Representative in Congress from the State of Texas, and Member, 
        Subcommittee on Crime, Terrorism, and Homeland Security

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                               __________

    Mr. Scott. We will now go to our panel of witnesses.
    Our first witness will be Stuart Nash, Associate Deputy 
Attorney General and Director of the Organized Crime Drug 
Enforcement Task Forces. Under that directorship, he oversees 
the combined efforts of over 2,000 law enforcement agents and 
over 600 prosecutors with the mission of investigating, 
prosecuting and dismantling the world's largest drug-
trafficking, money-laundering organizations. He also serves as 
Associate Deputy Attorney General with the responsibility for a 
range of criminal justice issues, including drug enforcement, 
money laundering and asset forfeiture. He has a law degree from 
Harvard Law School and a bachelor's degree from Duke 
University.
    Our next witness will be Mr. Salvador Nieto, the Deputy 
Assistant Commissioner, Office of Intelligence and Operations 
Coordination for the United States Customs and Border 
Protection. As Deputy Assistant Commissioner, he is the chief 
executive officer responsible for leveraging the skills of 
intelligence operations professionals and targeting experts to 
maximize the CBP's enforcement efforts. He began his career in 
1988 with the U.S. Border Patrol, served in the United States 
Air Force and attended the Air Force Community College and 
Florida State University.
    Our next witness will be Janice Ayala, Deputy Assistant 
Director of Financial, Narcotics and Public Safety Division 
within the Office of Investigations, U.S. Immigration and 
Customs Enforcement. In this position she has direct oversight 
of the financial, narcotics and national gang programs 
conducted by ICE officers throughout the United States. She 
served for 4 years in the U.S. Air Force Intelligence Squadron, 
and holds a bachelor of science degree in business 
administration.
    Our fourth witness will be Mr. Anthony Placido, Assistant 
Administrator for Intelligence for the United States Drug 
Enforcement Administration, or DEA. As a leader of DEA's 
intelligence program, he is DEA's senior officer for the U.S. 
Intelligence Community, and his duties include the development 
of the agency's global intelligence collection enterprise. He 
holds a bachelor's degree from Northeastern University and a 
master's degree from Golden Gate University.
    Our final witness is Mr. William J. Hoover, Acting Deputy 
Director for the Bureau of Alcohol, Tobacco, Firearms and 
Explosives. As Deputy Director, he is the ATF's second highest 
official and oversees all ATF operations, including criminal 
investigations, intelligence and the regulation of Federal 
firearm licensees. He has a bachelor's degree from Shepherd 
College in Shepherdstown, West Virginia.
    I thank all of our witnesses for joining us. I will ask you 
to summarize your testimony within 5 minutes or less. There is 
a timing device at the table, which will go from green to 
yellow with 1 minute left, to red after your 5 minutes are up.
    We have also been joined by the gentleman from Texas Mr. 
Poe.
    We will begin with Mr. Nash.

TESTIMONY OF STUART G. NASH, ASSOCIATE DEPUTY ATTORNEY GENERAL, 
  AND DIRECTOR, ORGANIZED CRIME DRUG ENFORCEMENT TASK FORCES 
              (OCDETF), U.S. DEPARTMENT OF JUSTICE

    Mr. Nash. Thank you very much, Mr. Chairman.
    I cannot help but notice--it may be a bad omen for me--that 
the last vote--you mentioned my degree from Duke University. 
The last vote the House took before this hearing was convened 
was to congratulate the North Carolina Tar Heels for their 
victory in the National Basketball Championship, but I will try 
to soldier on.
    My thanks to you and to Ranking Member Gohmert and to all 
of the Members of the Committee. I appreciate the opportunity 
to appear before you today to discuss the alarming rise of 
violence in Mexico and to share with you the Department of 
Justice's strategy for dismantling the Mexican drug cartels 
that are responsible for that violence.
    Drug-related violence has skyrocketed in recent years in 
Mexico, especially along the border with the United States. 
When Mexico's President Calderon and Attorney General Medina-
Mora took office in December 2006, the Mexican Government, with 
the support of the United States, undertook a comprehensive 
program to break the power of the narcotraffickers. The 
unprecedented pressure caused the cartels to escalate fighting 
among themselves for control of the lucrative smuggling 
corridors along the southwest border. It also led to 
retaliatory violence directed at Mexican law enforcement 
personnel.
    The violence in Mexico has had direct and serious effects 
in the United States. Firearms trafficking from the United 
States to Mexico contributes to escalating levels of violence 
on both sides of the border. As for the cartels and the U.S.-
based gangs affiliated with the cartels, they arm themselves 
with high-caliber firearms. These criminal groups are very well 
financed. Mexican and Colombian drug trafficking organizations 
annually generate between $18 billion and $39 billion in drug 
proceeds in the United States, a large portion of which is 
believed to be smuggled in bulk cash shipments back into 
Mexico.
    For decades, U.S. law enforcement agencies have recognized 
that the best way to fight the most powerful criminal 
organizations is through intelligence-based, prosecutor-led 
task forces. It was this approach, for example, that fueled the 
groundbreaking Mafia prosecutions in the late 1980's and 
1990's. The DOJ is currently applying the same intelligence-
driven tactics that broke the back of the mob to fighting the 
Mexican drug cartels.
    The Department's strategy to dismantle the Mexican drug 
cartels has several key elements. First, the strategy employs 
extensive intelligence capabilities. The Department pools 
information generated by Federal, State and local law 
enforcement agencies, and it uses that intelligence to direct 
resources against the most powerful cartels.
    Second, through prosecutor-led, multiagency task forces, 
the Department focuses its efforts on the investigation, 
extradition, prosecution, and incarceration of key cartel 
leaders. As the Department has demonstrated in attacking other 
major criminal enterprises, destroying the leadership and 
seizing the financial infrastructure of the cartels undermines 
their very existence.
    Third, the Department of Justice, in concerted efforts with 
the Department of Homeland Security, pursues investigations and 
prosecutions related to the trafficking of guns and to the 
smuggling of cash from the United States into Mexico. Much of 
the violence in Mexico is fueled by weapons and resources that 
come from our side of the border.
    Finally, the Department confronts the secondary threats in 
the United States flowing from the cartel activity. These 
threats include the widespread distribution of drugs on our 
streets and gang activities in our neighborhoods.
    The Department's strategy has already had some spectacular 
successes. Just a couple of months ago, Attorney General Holder 
announced the arrest of more than 750 individuals in connection 
with Operation Xcellerator, which targeted the Mexican drug 
trafficking organization known as the Sinaloa Cartel. Through 
Operation Xcellerator, Federal law enforcement agencies, along 
with the law enforcement officials from the Governments of 
Mexico and Canada and State and local authorities in the United 
States, delivered a significant blow against the Sinaloa 
Cartel. In addition to the 750 arrests, authorities seized over 
$61 million in U.S. currency and more than 12,000 kilos of 
cocaine.
    Project Reckoning, announced in September 2008, was a 15-
month operation that severely damaged the Gulf Cartel. It was 
one of the largest and most successful joint law enforcement 
efforts ever undertaken between the United States and Mexico. 
Project Reckoning resulted in over 600 arrests in the U.S. and 
Mexico, plus the seizure of $76 million in currency and nearly 
20,000 kilos of cocaine. Most importantly, Project Reckoning 
led to the indictment of the three principal leaders of the 
Gulf Cartel.
    Operation Xcellerator and Project Reckoning were tremendous 
successes in the U.S. Government's battle against the Mexican 
cartels, and they illustrate the strengths of the Department's 
strategy. Neither would have been possible without the 
development and effective sharing of intelligence between and 
among Federal agencies, our State and local partners and the 
Government of Mexico.
    The operations were each coordinated by the DEA-led Special 
Operations Division and were handled by prosecutors and 
investigators from the Organized Crime Drug Enforcement Task 
Forces--a program that coordinates elements of the Federal 
Government, including the DEA, FBI, ATF, the Marshal Service, 
prosecutors from the U.S. Attorney's offices, and the DOJ's 
Criminal Division, as well as agents from ICE, CBP, the Coast 
Guard, and the IRS.
    In sum, we believe that the Administration has the right 
strategy for stopping the violence spawned by the cartels. We 
also recognized that there is much work still to be done. The 
cartels remain powerful, and they continue to move drugs into 
the United States, but the strategy we are pursuing is the 
correct one, and ultimately we will prevail against these 
cartels.
    The Department of Justice remains committed to working in 
conjunction with our partners to address these serious threats. 
I welcome any questions that you may have.
    Mr. Scott. Thank you.
    [The joint prepared statement of the Department of Justice 
follows:]
       Joint Prepared Statement of Stuart Nash, William Hoover, 
                         and Anthony P. Placido

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                               __________

    Mr. Scott. We have been joined by the gentleman from 
Florida Mr. Rooney.
    We will continue with Mr. Nieto.

  TESTIMONY OF SALVADOR NIETO, DEPUTY ASSISTANT COMMISSIONER, 
   OFFICE OF INTELLIGENCE AND OPERATIONS COORDINATION, U.S. 
  CUSTOMS AND BORDER PROTECTION, U.S. DEPARTMENT OF HOMELAND 
                            SECURITY

    Mr. Nieto. Thank you, and good afternoon.
    Chairman Scott, Ranking Member Gohmert, Members of the 
Subcommittee, it is a privilege and an honor to appear before 
you today to discuss the work of U.S. Customs and Border 
Protection. CBP is the largest uniformed Federal law 
enforcement agency in the country. We station over 20,000 CBP 
officers at access points around the Nation at air, land and 
sea ports. By the end of fiscal year 2009, we will have 
deployed over 20,000 Border Patrol agents between the ports of 
entry. These forces are supplemented with 980 Air and Marine 
agents, with 2,260 agricultural specialists and with other 
professionals. These personnel are key to the implementation of 
Secretary Napolitano's Southwest Border Initiative that she 
announced in March.
    A key and growing area of emphasis for CBP involves the 
interdiction of weapons and currency. Escalating violence in 
the border regions and in the interior of Mexico poses a 
significant threat to both the United States and Mexico. 
Secretary Napolitano has tasked all DHS components, including 
CBP, to examine how we can increase our enforcement activities 
in an effort to mitigate southbound weapon and currency 
smuggling to the extent that resources and infrastructure 
allow.
    We have ongoing initiatives by way of short-term plus-ups 
and operations plans that call for enhanced resources to 
include State and local law enforcement agencies, the mobility 
of CBP resources from outside the immediate area and the 
national level tactical teams, such as the Border Patrol 
Tactical Unit and Field Operations Special Response Teams. We 
continue enhancing our plans to address all threats and all 
hazards at the borders.
    A majority of the illegal drugs consumed in the United 
States originate from or pass through Mexican territory or 
territorial seas. Huge illicit trafficking profits flow back 
into Mexican drug trafficking organizations across our common 
border. The Mexican Government's ability to confront its drug-
trafficking industry and its willingness to cooperate with U.S. 
efforts directly affect the impact of any Southwest Border 
Initiative.
    CBP has established positions at the El Paso Intelligence 
Center, otherwise known EPIC, at the Organized Crime Drug 
Enforcement Task Force Fusion Center and at the DEA Special 
Operations Division. These initiatives enhance interaction with 
the Intelligence Community and with law enforcement agencies.
    Additionally, CBP's Office of Intelligence and Operations 
Coordination established a National Post-Seizure Analysis Team, 
and is in the process of establishing Intelligence Operations 
Coordination Centers, known as IOCCs, in the field. The IOCCs 
will make CBP a more fully integrated, intelligence-driven 
organization by linking intelligence efforts and products to 
operations and interdictions.
    CBP works with other agencies to provide actionable 
intelligence to the Joint Interagency Task Force-South, JIATF-
S. This intelligence is used to interdict the flow of cocaine 
from northern South America to the United States.
    The detection of U.S.-Mexican border air intrusions is 
essential to effective interdiction operations along our border 
with Mexico. The primary means of detection is a large radar 
network, monitored at the Air and Marine Operations Center, or 
the AMOC, in Riverside, California. Personnel at the AMOC 
detect aircraft, short landings and border penetrations, and 
they coordinate CBP assets and Mexican interdiction assets to 
intercept, track and apprehend smugglers as they traverse the 
U.S.-Mexico border.
    CBP continues its evolution to become a more integrated, 
intelligence-driven organization, and we are in the process of 
establishing a robust field organization. Intelligence 
gathering and predictive analysis require new collection and 
processing capabilities. CBP is also developing the analytical 
framework for intelligence and a set of data-processing tools 
that will improve the effectiveness of CBP and of other DHS 
analysts in detecting, locating and in analyzing terrorist 
networks, drug-trafficking networks and similar threats. These 
intelligence and operational coordination initiatives 
complement the Secure Border Initiative's technology programs.
    Thank you for the opportunity to describe our plans for 
border security and to highlight some of our progress to date. 
With your continued support of DHS, CBP and ICE, I am confident 
that we will continue to make tremendous strides in increasing 
the control of our borders. I look forward to your questions.
    [The prepared statement of Mr. Nieto follows:]
                    Prepared Statement of Sal Nieto
    Chairman Scott, Ranking Member Gohmert, Members of the 
Subcommittee, it is a privilege and an honor to appear before you today 
to discuss the work of U.S. Customs and Border Protection (CBP), 
particularly the tremendous dedication of our men and women in the 
field both at and between our ports of entry.
    CBP is the largest uniformed federal law enforcement agency in the 
country with over 20,000 CBP officers; 18,800 Border Patrol agents;over 
1,000 Air and Marine agents; 2,280 agricultural specialists; and other 
professionals. These personnel are key players to the implementation of 
Secretary Napolitano's Southwest Border Security Initiative announced 
in March.
    I am pleased to report that CBP continues to achieve success in 
performing our traditional missions, which include stemming the flow of 
illegal drugs and contraband, protecting our agricultural and economic 
interests from harmful pests and diseases, protecting American 
businesses from theft of their intellectual property, enforcing textile 
agreements, tracking import safety violations, protecting the economy 
from monopolistic practices, regulating and facilitating international 
trade, collecting import duties, and enforcing United States trade 
laws. At the same time, our employees maintain a vigilant watch for 
terrorist threats. In FY 2008, CBP processed more than 396 million 
pedestrians and passengers, 122 million conveyances, 29 million trade 
entries, examined 5.6 million sea, rail, and truck containers, 
performed over 25 million agriculture inspections, apprehended over 720 
thousand illegal aliens between our ports of entry, encountered over 
220 thousand inadmissible aliens at the ports of entry, and seized more 
than 2.8 million pounds of illegal drugs.
    We must perform our important security and trade enforcement work 
without stifling the flow of legitimate trade and travel that is so 
important to our nation's economy. These are our twin goals: border 
security and facilitation of legitimate trade and travel.
 support of u.s./mexican counter-drug and counter-terrorism initiatives
    A key and growing area of emphasis involves DHS's role in 
interdicting the illegal flow of weapons and currency into Mexico. The 
recent surge in violence in the interior and border cities of Mexico 
poses a significant threat in Mexico and is a serious concern of the 
United States. Secretary Napolitano has tasked all DHS components, 
including CBP, to examine how we can reasonably increase our 
enforcement activities in an effort to identify and interrupt efforts 
to smuggle weapons and bulk cash shipments into Mexico.
    A majority of the illegal drugs consumed in the United States 
originate from or pass through Mexican territory and territorial seas. 
Illicit trafficking profits flow back to Mexican drug trafficking 
organizations across our common border. The Mexican government's 
ability to confront its drug trafficking industry and its willingness 
to cooperate with U.S. efforts directly affect the impact of any 
southwest border activities.
    In a spirit of cooperation, CBP has established positions at the El 
Paso Intelligence Center (EPIC), the Organized Crime Drug Enforcement 
Task Force (OCDETF) Fusion Center, and the DEA Special Operations 
Division. These initiatives enhance interaction with the Intelligence 
Community (IC) and law enforcement agencies to more effectively 
facilitate the collection, analysis, and dissemination of actionable 
drug-related intelligence as well as two full-time positions at the 
National Gang Intelligence Center (NGIC), and has also partnered with 
the National Gang Targeting, Enforcement and Coordination Center 
(GangTECC).
    EPIC, originally established in an effort to improve drug and 
border enforcement operations along the Southwest Border, has broadened 
its mission becoming international in scope. Centrally located in El 
Paso, it also has the following representation: the Department of 
Homeland Security; CBP; Immigration & Customs Enforcement; U.S. Coast 
Guard; U.S. Secret Service; Drug Enforcement Administration; Federal 
Bureau of Investigation; Bureau of Alcohol, Tobacco, Firearms and 
Explosives; U.S. Marshals Service; National Drug Intelligence Center; 
Internal Revenue Service; Department of the Interior; National 
Geospatial-Intelligence Agency; Department of Defense; Joint Task 
Force--North; Joint Interagency Task Force--South; Texas Department of 
Public Safety; and other state and local agencies. The multi-agency 
environment of EPIC makes it ideal for the exchange of information and 
intelligence.
    Additionally, CBP's Office of Intelligence and Operations 
Coordination established a National Post Seizure Analysis Team (PSAT) 
at the National Targeting Center-Cargo and is in the process of 
establishing Intelligence Operations Coordination Centers (IOCC) with 
the first one under construction in Tucson, Arizona. The IOCCs will 
make CBP a more fully integrated, intelligence driven organization by 
linking intelligence efforts and products to operations and 
interdictions.
    Operation Panama Express is an OCDETF initiative, executed through 
OCDETF Co-located Strike Forces, in which CBP participates with the 
Drug Enforcement Administration (DEA), Federal Bureau of Investigation 
(FBI), U.S. Immigration and Customs Enforcement, Internal Revenue 
Service--Criminal Investigations Division, the U.S. Coast Guard, and 
multiple state and local law enforcement agencies in a multi-agency 
international drug flow investigation that combines detection and 
monitoring, investigative, and intelligence resources to provide 
actionable intelligence to Joint Interagency Task Force--South (JIATF-
S) operations to interdict the flow of cocaine from northern South 
America to the United States. JIATF-S interdiction operations in the 
transit zone supported by CBP P-3 Airborne Early Warning, Coast Guard 
HC-130, Coast Guard vessels, and CBP P-3 Tracker aircraft interdict 
large, sometimes multi-ton, shipments before they can be split into 
smaller loads for movement across the southwest border over multiple 
routes and distributed to U.S. cities, towns, and small communities.
    CBP is also responsible for detecting and preventing unauthorized 
incursions into the United States. Toward this end, CBP continues to 
work with the Mexican Government in the development of increased law 
enforcement surveillance and interdiction capabilities. Detection of 
U.S./Mexican border air intrusions is essential to effective 
interdiction operations along our borders with Mexico. The primary 
means of detection is a large radar network, monitored at the Air and 
Marine Operations Center (AMOC) in Riverside, California. Information 
is fed to the AMOC through a network of airborne early warning, 
aerostat, Federal Aviation Administration (FAA), and ground based radar 
systems. Personnel at the AMOC detect aircraft ``short landings'' and 
border penetrations and coordinate CBP and Mexican interdiction assets 
to intercept, track, and apprehend smugglers as they transverse the 
U.S./Mexico border.
    The Government of Mexico maintains a strong commitment to 
interdiction. CBP will continue to assist the Government of Mexico in 
its counterdrug effort, including Command, Control, Communications, and 
Information support.
               intelligence and operational coordination
    CBP continues to evolve into a more integrated, intelligence-driven 
organization and we are in the process of establishing a robust field 
organization. The CBP Office Intelligence and Operations Coordination 
is in the process of developing capabilities which will integrate CBP 
intelligence and operational elements for more effective command and 
control, mission deployment, and allocation of resources.
    Intelligence gathering and predictive analysis require new 
collection and processing capabilities. CBP is also developing the 
Analytical Framework for Intelligence (AFI), a set of data processing 
tools that will improve the effectiveness of CBP and other DHS analysts 
in detecting, locating, and analyzing terrorist networks, drug 
trafficking networks, and other threats. These intelligence and 
operational coordination initiatives complement the Secure Border 
Initiative's (SBI) technology programs.
                      southwest border initiative
    In March, Secretary Napolitano announced a far-reaching Southwest 
Border Initiative to crack down on Mexican drug cartels through 
enhanced border security, including the deployment of hundreds of new 
personnel, enhanced intelligence technology that will maximize 
capabilities and better coordination with other federal law enforcement 
entities such as the Department of Justice, the Bureau of Alcohol, 
Tobacco and Firearms, DEA, and FBI as well as state, local, and Mexican 
law enforcement authorities. The Secretary's initiative calls for a 
number of CBP actions:
    Initiates 100 percent southbound rail scanning--Customs and Border 
Protection formerly did not screen any of the cargo traveling by rail 
from the United States into Mexico; it is now scanning all of rail 
cargo for weapons, ammunition, and currency. Existing non-intrusive 
inspection equipment is being used to detect contraband in cargo on 
each of the eight rail crossings on the southwest border.
    Adds Border Patrol Agents--CBP is placing 100 more Border Patrol 
agents at southwestern ports of entry to bolster outbound inspections 
from the U.S. into Mexico in order to detect arms and bulk-cash 
smuggling. In the past, the Border Patrol has not ordinarily served in 
this capacity.
    Adds Mobile Response Teams--Three Mobile Response Teams of 25 CBP 
officers each are periodically deploying to the southwest border to 
participate in focused operations developed to combat arms and bulk 
cash smuggling.
    Augments Search Technologies--An additional nine Z-Backscatter 
mobile X-ray units have been moved to the southwest border to help CBP 
identify anomalies in passenger vehicles.
    Engages Canine Teams--A total of twelve teams of ``cross-trained'' 
canines--trained to identify both weapons and currency--have been 
deployed to the southwest border.
    Adds License Plate Readers--Outbound lanes currently equipped with 
license plate readers will receive upgraded license plate reader 
technology to improve CBP's ability to identify the vehicles of known 
or suspected smugglers of cash, weapons, drugs, or persons. This 
information is shared with other law enforcement agencies through EPIC 
and the OCDETF Fusion Center.
    Enhances Operation Stonegarden Grant Funding on the Border--Grant 
guidance for the remaining balances in Operation Stonegarden from FY 
2006 to FY 2008 will be modified to enhance current state, local, and 
tribal law enforcement operations on the southwest border. The new 
guidelines will expand the scope of what the funds can be used for, 
freeing up to $59 million for state, local, and tribal law enforcement 
on the border to pay for additional law enforcement personnel, 
operational overtime expenses, and travel or lodging for deployment to 
the southwest border.
    Actively Engages State, Local, and Tribal Law Enforcement--DHS is 
aggressively reaching out to law enforcement in border communities, 
recently conducting a firsthand tour of state and local law enforcement 
operations along the southwest border and leading bi-monthly conference 
calls with chiefs of police and sheriffs in a classified setting.
                               conclusion
    Thank you for the opportunity to describe our plans for border 
security and to highlight some of our progress to date. With your 
continued support of CBP, I am confident that we will continue to make 
tremendous strides in increasing control of our borders.
    I look forward to your questions.
                               __________

    Mr. Scott. Ms. Ayala.

TESTIMONY OF JANICE AYALA, DEPUTY ASSISTANT DIRECTOR, OFFICE OF 
INVESTIGATIONS, U.S. IMMIGRATION AND CUSTOMS ENFORCEMENT, U.S. 
                DEPARTMENT OF HOMELAND SECURITY

    Ms. Ayala. Chairman Scott, Ranking Member Gohmert and 
distinguished Members of the Subcommittee, on behalf of 
Secretary Napolitano and Acting Assistant Secretary Torres, I 
thank you for the opportunity to discuss ICE's efforts to 
combat cross-border violence and crime and related violence.
    ICE has the most expansive investigative authority and the 
largest force of investigators within DHS, but this challenge 
cannot be addressed by any one agency. Partnerships are 
essential, and ICE works closely with foreign, Federal, tribal, 
State, and local agencies to secure our borders, including the 
agencies that my colleagues here today represent.
    DHS recognizes that southbound weapons smuggling is of 
grave concern amid growing violence along our border with 
Mexico. This violence requires a comprehensive bilateral 
effort. On January 30, Secretary Napolitano responded by 
issuing a Border Security Action Directive, which focused the 
wide-ranging authorities of the Department on the violence 
along our southern border. The Secretary emphasized the 
necessity of a broad, multiagency response to attack the flow 
of weapons and money that continues to fuel the violence.
    ICE contributes to the spike principally through two 
bilateral initiatives: Operation Firewall, to counter bulk cash 
smuggling, as well as Operation Armas Cruzadas, to counter 
weapons smuggling. The ICE-led Border Enforcement Security Task 
Forces provide a comprehensive, multiagency platform to fight 
these particular threats.
    Under Armas Cruzadas, U.S. and Mexican investigators 
synchronize bilateral law enforcement and intelligence-sharing 
activities in order to detect, disrupt and dismantle these 
weapons-smuggling networks. Key supporting actions include use 
of ICE's longstanding authorities under the Arms Export Control 
Act, as well as newly acquired export authority that is 
particularly useful in targeting these weapons-smuggling 
networks.
    To more seamlessly investigate these networks that span our 
common border, BEST, ICE attache offices, a U.S.-vetted Mexican 
arms trafficking group, and the ICE Border Violence 
Intelligence Cell exchange weapons-related intelligence. For 
example, in August of last year, an ICE investigation developed 
information that was rapidly shared with Mexican investigators 
regarding a safe house in Nogales, Sonora, used by cartel 
hitmen. A subsequent search resulted in 6 arrests, a seizure of 
police uniforms, a large amount of U.S. currency, 12 weapons, 
and 4 stolen U.S. vehicles.
    Intelligence stemming from single actions like this is 
analyzed by the BVIC, who, in conjunction with other DHS 
intelligence components, produce a strategic assessment focused 
on southbound weapons smuggling.
    Let me show you another example of how ICE partners with 
others in combating weapons smuggling. ICE, ATF and the San 
Antonio Police Department initiated an investigation of Ernesto 
Olvera-Garza, a Mexican national at the time of his arrest in 
October 2007, trafficking high-powered, high-capacity handguns 
and assault rifles. He led a gun-smuggling conspiracy that 
purchased and smuggled more than 50 weapons into Mexico. One of 
these weapons was recovered after it was used in a gun battle 
where two Mexican soldiers were killed. Olvera-Garza pleaded 
guilty to violations of Title XVIII, U.S.C. 554, 922 and 371, 
and he has been sentenced to 144 months incarceration.
    Since the initiation of Armas Cruzadas, over 1,440 weapons 
and over 122,000 rounds of ammunition have been seized and over 
329 individuals arrested.
    One of the most effective methods in dealing with violent, 
transnational, criminal organizations is to track the criminal 
proceeds that fund their operations. As we have hardened formal 
financial systems throughout the United States, the smuggling 
of bulk currency out of the country has been on the rise. ICE 
investigates bulk-cash smuggling as part of its border crime 
portfolio.
    ICE and CBP conduct Operation Firewall interdiction 
operations, investigations with Mexican Customs, and ICE trains 
Mexican money-laundering vetted units. Since its inception, 
Firewall has seized over $195 million, including $64 million 
seized overseas in more than 452 arrests.
    The principal investigative platform for both Armas 
Cruzadas and Firewall are the 10 multiagency BESTs located 
along high-threat smuggling corridors along the southwest 
border. Created to specifically address border violence, these 
BESTs concentrate on top threats within their geographic areas, 
including weapons, bulk cash, narcotics and alien smuggling. 
Through BEST, we have dismantled arms trafficking, human 
trafficking, bulk cash, alien and narcotics smuggling 
organizations, and their hostage-taking and murder-kidnapping 
cells in the United States and in Mexico.
    Since July of 2005, BESTs have been responsible for more 
than 5,100 arrests and for the seizure of about 190,000 pounds 
of narcotics, of thousands of weapons, and of almost $25 
million in U.S. currency.
    ICE is committed to effective cross-border communication 
and information sharing to stem binational criminal activity 
and its associated violence through the deployment of BESTs, 
Operation Armas Cruzadas and Operation Firewall. By partnering 
with other law-enforcement agencies, we are able to use a broad 
range of authorities, including the most sophisticated 
investigative tools, to respond to and to conduct our 
investigations.
    Once again, I would like to thank the Subcommittee for its 
continued support of ICE in our law-enforcement mission, and I 
would be happy to answer any questions that you may have at 
this time.
    Mr. Scott. Thank you very much.
    [The prepared statement of Ms. Ayala follows:]
                   Prepared Statement of Janice Ayala
                              introduction
Chairman Scott, Ranking Member Gohmert, and distinguished Members of 
the Subcommittee:

    On behalf of Secretary Napolitano and Acting Assistant Secretary 
Torres, I would like to thank you for the opportunity to discuss U.S. 
Immigration and Customs Enforcement's (ICE) efforts to combat cross-
border smuggling organizations and the violence related to their 
enterprises. ICE has the most expansive investigative authority and 
largest force of investigators in the Department of Homeland Security 
(DHS), and we protect national security and uphold public safety by 
targeting transnational criminal networks and terrorist organizations 
that seek to exploit vulnerabilities at our borders. Recognizing that 
partnerships are essential, ICE works closely across agency and 
international boundaries with our law enforcement partners at the 
foreign, federal, tribal, state and local level creating a transparent 
border and united front to disrupt and dismantle criminal 
organizations.
    ICE's expertise in combating smuggling organizations that exploit 
vulnerabilities in the sea, air, and land environments has proven 
essential in countering the bi-lateral smuggling of narcotics, illicit 
money, and other dangerous goods, people, and materials that threaten 
the well-being of the United States. Our law enforcement presence 
extends beyond our borders. ICE has agents in attache offices in 
embassies and consulates worldwide. I am proud of these agents who work 
with their foreign counterparts to combat crime that originates 
overseas but may eventually cross the Nation's borders.
    Let me share with you an example of the mutual security benefits we 
continue to derive through our partnerships with Mexican law 
enforcement agencies such as Secretaria de Seguridad Publica (SSP). In 
August 2008, ICE agents provided confidential information to SSP 
through our Assistant Attache in Hermosillo, Mexico about a residence 
allegedly used to store weapons and narcotics and which was believed to 
be a safe house for security personnel (``hit men'') for the Vicente 
Carrillo Fuentes drug trafficking organization (DTO) operating in 
Nogales, Sonora. SSP executed a search warrant at this residence that 
resulted in six arrests, the seizure of police uniforms, a large amount 
of U.S. currency, 12 weapons, and four stolen U.S. vehicles. The six 
people arrested are suspected of being involved in two separate crimes: 
first, an armed confrontation on August 5, 2008, in Nogales, Sonora 
where a civilian was injured after a grenade was detonated during a 
shootout between two DTOs, and second, the murder of two Mexican 
nationals whose bodies were found with threatening messages from rival 
narcotics traffickers.
    DHS recognizes that southbound weapons smuggling is a grave concern 
amid the growing violence along our border with Mexico. This violence 
requires a comprehensive, bilateral effort and on January 30, 2009, 
Secretary Napolitano responded by issuing a Border Security Action 
Directive which focused the wide-ranging authorities of the Department 
on the rampant violence along our Southwest Border. On March 24, she 
announced several Southwest Border initiatives designed to crack down 
on Mexican drug cartels through enhanced border security. The plan 
calls for additional personnel, increased intelligence capability and 
better coordination with state, local and Mexican law enforcement 
authorities. With violence escalating across the border, DHS will 
increase personnel and improve screening and technology to help Mexico 
target illegal guns, drugs and cash.
    The Secretary emphasized the necessity of a broad, multi-agency 
response to attack the flow of weapons and money that continues to fuel 
the violence. ICE contributes to that fight through two principal 
bilateral initiatives: Operation Firewall to address bulk cash 
smuggling; and Operation Armas Cruzadas, to detect, disrupt and 
dismantle weapons smuggling networks. Particularly in Armas Cruzadas, 
ICE-led Border Enforcement Security Task Forces (BESTs) function as 
critical enablers in coordinating a comprehensive, multi-agency 
approach to fighting weapons smuggling. These DHS task forces include 
important partners such as Customs and Border Protection (CBP), 
Alcohol, Tobacco, Firearms and Explosives (ATF) and other foreign, 
federal, state and local task force officers. When it comes to 
countering the illicit weapons trade in particular, we closely 
coordinate our efforts with ATF, as they possess long-standing 
expertise in gun trafficking investigations and in engagement with 
Federal Firearms Licensees.

Armas Cruzadas:

    The rampant border violence along the United States/Mexico border 
is a direct result of criminal organizations attempting to exert their 
control over not only the democratically elected officials of the 
Mexican government but also rival criminal organizations. For instance, 
many of the instruments of this violence are weapons smuggled from the 
United States into Mexico.
    Criminal organizations commonly use straw purchasers with clean 
criminal histories to purchase firearms and turn them over to 
smugglers. The challenge in countering the smuggling activity is 
compounded by the reliance on the technique called ``ant trafficking,'' 
where small numbers of weapons are smuggled through multiple ports-of-
entry, on a continued basis.
    In June 2008, ICE formally launched Operation Armas Cruzadas to 
combat transnational criminal networks smuggling weapons into Mexico 
from the United States. As part of this initiative, the United States 
and the Government of Mexico (GoM) synchronize bilateral interdiction, 
investigation and intelligence-sharing activities to identify, disrupt, 
and dismantle these networks engaged in weapons smuggling. Key 
components of Armas Cruzadas include training for BEST task force 
officers and our partners in ICE's long-standing authorities under the 
Arms Export Control Act, as well as newly-acquired export authority 
under Title 18, United States Code, Section 554 (Smuggling goods from 
the United States). This statute augments the broad arsenal of cross-
border criminal authorities available to ICE investigators, and is 
particularly useful in targeting weapons smuggling. Another important 
Armas Cruzadas component is industry outreach, including presentations 
to groups involved in the manufacture, sale, or shipment of firearms 
and ammunition along the southwest border. This industry outreach 
includes a collaborative initiative between ICE and Mexico's 
Procuraduria General de La Republica (PGR) prosecutors to produce 
bilingual posters identifying potential penalties for weapons smugglers 
under U.S. export and Mexican gun trafficking laws. The posters solicit 
the public for information related to these schemes, and are displayed 
in shops and agencies in the border region, including ports-of-entry. 
The Government of Mexico has also distributed these posters within 
Mexico.
    In addition to outreach, more rapid exchange of information is 
essential to success in confronting the southbound weapons flow. Armas 
Cruzadas strengthens bilateral communication through deployment of ICE 
Border Liaisons to sustain cooperative working relationships with 
foreign and domestic government entities; and also through a Weapons 
Virtual Task Force, comprised of a virtual online community where U.S. 
and Mexican investigators can share intelligence and communicate in a 
secure environment. In order to more seamlessly investigate the 
networks that span our common border, BESTs, ICE attache offices, a 
U.S.-vetted GoM Arms Trafficking Group, and the Border Violence 
Intelligence Cell exchange cross-border weapons-related intelligence. 
The Border Violence Intelligence Cell, housed at the El Paso 
Intelligence Center (EPIC), along with the ATF weapons desk, serves as 
ICE's central point for analyzing all-source intelligence and trends in 
firearms smuggling. In December of last year, this cell, in conjunction 
with DHS intelligence components, produced a strategic assessment of 
southbound weapons smuggling that guided increased weapons 
investigation and interdiction operations along the Southwest Border.
    Let me share an example of how ICE partners with others, such as 
ATF and local investigators, in combating weapons smuggling. ICE, ATF, 
and the San Antonio Police Department initiated an investigation of 
Ernesto Tornel Olvera-Garza of Monterrey, Mexico who first began 
trafficking in hunting rifles in June 2005. During the course of the 
investigation, agents learned that between 2006 and the time of his 
arrest in October 2007, he trafficked in high-powered, high-capacity 
handguns and assault rifles. Since his temporary visa did not allow him 
to legally buy guns in the United States,
    Mr. Olvera-Garza instead paid people in the United States to buy 
guns for him and lied about who the guns were for. Mr. Olvera-Garza 
organized and led the gun-smuggling conspiracy, which included at least 
nine ``straw purchasers'' who purchased firearms on his behalf. More 
than 50 weapons were purchased and smuggled to Mexico as part of this 
ring. One of Mr. Olvera-Garza's smuggled pistols was recovered in 
Mexico after it was used in a running gun battle where two Mexican 
soldiers were killed. Mr. Olvera-Garza has pleaded guilty and is 
pending sentencing.
    Since the initiation of Operations Armas Cruzadas, DHS has seized 
1,440 weapons, 122,410 rounds of ammunition and arrested 329 
individuals on criminal charges, resulting in 94 criminal indictments 
and 51 convictions to date.

Operation Firewall:

    Another, and one of the most effective methods to deal with 
violent, transnational criminal organizations is to attack the criminal 
proceeds that fund their operations. ICE targets those individuals and 
organizations exploiting vulnerabilities in financial systems to 
launder illicit proceeds and pursue the financial component of every 
cross-border criminal investigation. The combination of successful 
financial investigations, Bank Secrecy Act (BSA) reporting 
requirements, and Anti-Money Laundering (AML) compliance efforts by 
traditional and non-traditional financial institutions has forced 
criminal organizations to seek other means to transport illicit funds 
across our borders. As we have hardened these formal financial systems, 
the smuggling of bulk currency out of the United States, especially 
along the Southwest Border, has continued to rise. ICE, as the 
investigative agency with jurisdiction over all border crimes, can 
investigate bulk cash smuggling (BCS) crimes, which are predicated on 
the failure to file a Currency and Monetary Instrument Report (CMIR).
    The ICE Office of Investigations (OI), along with the ICE Office of 
International Affairs (OIA) and CBP, coordinates with our state, local, 
and foreign partners on BCS operations. These operations disrupt the 
flow of bulk cash that can be used by terrorist groups, drug 
traffickers, and other criminal organizations. ICE, in concert with 
CBP, also provides money laundering training and BCS interdiction 
equipment to our law enforcement partners in the United States and 
abroad.
    ICE has a number of initiatives to address BCS. Operation Firewall 
focuses on the threat of BCS via commercial and private passenger 
vehicles, commercial airline shipments, airline passengers, and 
pedestrians. Since 2005, Operation Firewall efforts have been enhanced 
to include jump team surge operations targeting the movement of bulk 
cash destined for the southwest border for smuggling into Mexico. ICE 
and CBP have conducted various Operation Firewall operations with 
Mexican customs and the ICE-trained Mexican Money Laundering Vetted 
Unit. Many Operation Firewall seizures result in criminal 
investigations to identify the source of the funds and the responsible 
organizations.
    ICE's experience in conducting international money laundering 
investigations has identified numerous smuggling routes and 
methodologies used by criminal organizations to launder illicit 
proceeds. This experience enables ICE, CBP, and our domestic and 
international partners to concentrate resources. Initially, Firewall 
operations in Mexico focused on the targeting of commercial flights 
from Mexico City to Central and South America. In 2008, based on our 
experience, we expanded Mexico Firewall operations to target shipments 
in containers departing from the seaport of Manzanillo and the airports 
of Tuluca, Mexicali, Cancun, and Guadalajara. Throughout operations in 
Mexico, ICE and CBP personnel have trained our Mexican law enforcement 
partners on passenger analysis and investigative techniques proven 
effective in the United States.
    Operation Firewall produced immediate results. On the first day of 
operations in 2005 at the Benito Juarez International Airport in Mexico 
City, Mexican authorities seized $7.8 million en route to Cali, 
Colombia concealed inside deep fryers, rotisseries, and voltage 
regulators. Other notable seizures include $7.3 million seized inside 
rolls of fabric and plastic and $4.7 million concealed inside air 
conditioning equipment and metal piping destined for Colombia.
    Since its inception, Operation Firewall has resulted in the seizure 
of over $195 million including over $64 million seized overseas, and 
452 arrests.
    On June 26, 2008, Rafael Ravelo, a member of a Mexican based 
narcotics trafficking organization, was sentenced to 126 months of 
incarceration and the forfeiture of $1,147,000. This sentence was the 
result of the ICE-led Operation Doughboy, an investigation that was 
initiated prior to Operation Firewall, based on a bulk cash smuggling 
interdiction. This joint U.S./Mexico investigation involved the 
monitoring of 18 phone lines of the heads of a Mexican narcotics 
trafficking organization and began when ICE agents in 2003 successfully 
linked a $149,000 bulk cash seizure by the Texas Department of Public 
Safety to the narcotics trafficking organization.

Border Enforcement Security Task Force (BEST):

    As I mentioned before, the principal investigative platform for 
both Operations Armas Cruzadas and Firewall are the Border Enforcement 
Security Task Forces (BESTs). These task forces were specifically 
created to address border violence.
    In July 2005, in response to increased violence in Nuevo Laredo, 
Mexico and Laredo, Texas, ICE, CBP and other federal, state, and local 
law enforcement agencies, including Mexican agencies, expanded the 
ongoing Border Crimes Initiative by creating an international, multi-
agency initiative, Operation Black Jack. This initiative used the 
respective authorities and resources of its members to dismantle cross-
border criminal organizations. In its first six months, its target-
driven focus led to the dismantling of a murder/kidnapping cell 
operating on both sides of the border, including the seizure of high-
powered fully automatic weapons and live grenades; the components to 
make over 100 improvised explosive devices (IEDs), such as pipe bombs 
and grenades; and over $1 million in U.S. currency.
    Based on the success of Operation Black Jack, DHS established the 
first BEST in Laredo, Texas in January 2006. Since that time, we have 
established 12 BESTs: eight on the Southwest Border; two on the 
Northern Border; and two at seaports. BEST participants include: ICE 
(as the lead agency); CBP; ATF; the Drug Enforcement Administration 
(DEA); the Federal Bureau of Investigation (FBI); the U.S. Coast Guard; 
the U.S. Attorney's Office; and other federal, state, local and foreign 
law enforcement.
    The BESTs are arrayed along the Southwest Border in high-threat 
smuggling corridors in: Arizona--Tucson (March 2006), Phoenix (March 
2008), and Yuma (March 2008); Texas--El Paso (October 2006) and Rio 
Grande Valley (March 2007); California--San Diego (November 2006) and 
Imperial Valley (June 2008); and New Mexico--Deming (March 2009) and 
Las Cruces (March 2009). In early 2008, the first Northern Border BESTs 
initiated operations in Blaine, Washington (February 2008) and Buffalo, 
New York (March 2008). Each BEST concentrates on the prevalent threat 
in its geographic area, including: cross-border violence; weapons 
smuggling and trafficking; illegal drug and other contraband smuggling; 
money laundering and bulk cash smuggling; human smuggling and 
trafficking; transnational criminal gangs; and tunnel detection. 
Recently, we established BESTs at the seaports of Los Angeles, 
California (October 2008), and Miami, Florida (November 2008) to focus 
on maritime threats including the importation of contraband; commercial 
fraud; cargo theft; unlawful exportation of controlled commodities and 
munitions; stolen property; alien smuggling; and exportation of illicit 
proceeds. These BESTs will target internal conspiracies of corrupt 
transportation employees who participate in the smuggling of contraband 
and humans. Crucial to our success is the cooperation of our 
international partners. At BESTs on the Southwest Border, we have the 
participation of the Mexican law enforcement agency, SSP. On the 
Northern Border and in the northern BESTs, we have Canadian law 
enforcement agencies such as the Canada Border Services Agency, the 
Royal Canadian Mounted Police, the Ontario Provincial Police, the 
Niagara Regional Police Service, and the Toronto Metropolitan Police 
Service. In addition, we have the participation of the Argentinean 
customs agency at our Miami BEST. Through the interaction and 
coordination of all the member agencies, BESTs provide for immediate 
and international enhanced information sharing on border violence due 
to geographic proximity to the U.S. borders.
    Through BESTs, we have dismantled arms trafficking, bulk-cash, 
alien and narcotics smuggling organizations and their hostage-taking 
and murder/kidnapping cells in the United States and Mexico. Since July 
2005, the BESTs have been responsible for 2,238 criminal arrests, 2,924 
administrative arrests, 1,014 indictments, and 846 convictions. In 
addition, BESTs have seized approximately 9,070 pounds of cocaine, 
179,739 pounds of marijuana, 702 pounds of methamphetamine, 99 pounds 
of crystal methamphetamine, 1,161 pounds of ecstasy, 243 pounds of 
heroin, 97 pounds of hashish, 22 pounds of opium, 2,075 weapons, 820 
vehicles, seven properties, and $24.7 million in U.S. currency and 
monetary instruments.
    I would like to share a few of our successes with you: the 
discovery and repatriation by the El Paso BEST of one of Mexico's top 
ten most wanted fugitives; the arrest by the Laredo BEST of a weapons 
trafficker supplying cartels with assault rifles used to murder Mexican 
police officer Navarro Rincon and others; the arrest by the Laredo BEST 
of a member of the Mexican Mafia in possession of approximately 897 
pounds of smuggled marijuana after he attempted to run over a Texas 
Department of Public Safety officer; and the arrest by the Los Angeles 
Seaport BEST of an arms trafficker and seizure of 38 military style 
weapons.
                               conclusion
    In conclusion, ICE is committed to stemming the cross-border 
criminal activity and associated violence through the deployment of the 
BESTs, Operation Armas Cruzadas, and Operation Firewall. Partnering 
with others, we are using a broad range of authorities, including the 
most sophisticated investigative tools available, such as certified 
undercover operations and electronic surveillance operations, to 
disrupt and dismantle these networks.
    I thank the Subcommittee Members for their support of ICE, CBP, DHS 
and our law enforcement mission. I would be happy to answer any 
questions that you may have at this time.
                               __________
    Mr. Scott. Mr. Placido.

 TESTIMONY OF ANTHONY P. PLACIDO, ASSISTANT ADMINISTRATOR FOR 
 INTELLIGENCE, UNITED STATES DRUG ENFORCEMENT ADMINISTRATION, 
                   U.S. DEPARTMENT OF JUSTICE

    Mr. Placido. Good afternoon.
    Chairman Scott, Ranking Member Smith, Members of the 
Subcommittee, thank you for the opportunity to appear today to 
discuss the Drug Enforcement Administration's views addressing 
the violence that is being generated by entrenched criminal 
organizations based in Mexico, as well as the potential impact 
of this violence on Americans and on our regional partners. It 
is vitally important that we accurately describe this problem 
before we invest taxpayer funds or craft programmatic solutions 
to deal with it.
    Mexico-based drug-trafficking organizations have, over a 
period of many years, become so powerful that they represent a 
significant threat to the very authority of the Mexican state. 
Through the use of corruption, intimidation and violence, these 
organizations have for far too long been able to act with 
virtual impunity and to use Mexico as a base of operations from 
which to run a global criminal enterprise that has adverse 
consequences for the United States, for Mexico and, indeed, for 
the world.
    Mexican drug-trafficking organizations now dominate 
wholesale and retail drug distribution throughout the United 
States. Their impact is felt far beyond our southwest border. 
The contraband drugs entering the United States from Mexico, 
the drug proceeds and the weapons entering Mexico from the 
United States, and the related violence are but symptoms of the 
larger disease. In fact, it is a mistake, in our view at DEA, 
to geographically limit this problem or to characterize it as a 
``border problem'' per se.
    The task in responding to this pervasive threat is to build 
a comprehensive, whole-of-government response that is fully 
integrated with Mexico and our regional partners to attack the 
problem--the disease--rather than merely mitigating the 
symptoms. This will require the better coordination of the U.S. 
interagency effort, not just better coordination between the 
United States and Mexico.
    The importance of focusing on the criminal organizations 
rather than overemphasizing geography can best be made by 
examining the supply chain for cocaine. The U.S. interagency 
estimates, I think, that were quoted here earlier indicate that 
approximately 91 percent of the cocaine abused in the United 
States actually transits Mexico before it arrives. The seizure 
of that cocaine in the transit zone, by which I mean the area 
from the north coast of Colombia up to Mexico, is measured by 
the metric ton. For seizures of cocaine at our southwest 
border, the average seizure is only 47 pounds.
    This tells us two important things, at least, from an 
intelligence perspective. First, we can be far more effective 
extending our operations south of the border and seizing the 
contraband in larger quantities, but probably much more 
important for our purposes is that the organizations--the 
people who organize, finance, direct, and control this 
enterprise--have for far too long operated, at least prior to 
the Calderon administration, with impunity, and have used 
Mexico as a base of operations. These criminal power brokers do 
not personally handle the drugs. They are not the individuals 
who are smuggling drugs across their border, but they must be 
dealt with if we are going to make America safer.
    While I have no intention of downplaying the important work 
done at our borders, we did not need an historic opportunity 
for engagement with Mexico to buttress security at the border. 
The strategic opening that we now have with Mexico offers an 
unprecedented opportunity to achieve defense in depth by 
denying safe haven to criminal organizations that previously 
operated with impunity from Mexico. Denying safe haven to these 
traffickers in Mexico will, over time, reduce the flow of 
contraband and violence from Mexico.
    The Merida Initiative is a strategy that is focused on 
attacking criminal organizations, not geography. The goal of 
the Merida Initiative is to assist the Calderon administration 
in breaking the power and impunity to the cartels, while 
simultaneously fortifying Mexican Government institutions and 
infrastructure, essentially transforming what has become a 
national security crisis that has required Mexico to engage 
tens of thousands of military troops to maintain order into a 
problem that can be adequately managed with an enhanced Mexican 
criminal justice system.
    This is the problem we face, and it is the problem that we 
can solve in the next 4 years if we can maintain our focus. We 
are fortunate to have willing and increasingly capable partners 
in the Calderon administration to address such a formidable 
task. With our help, President Calderon and his administration 
are relentlessly attacking the criminal organizations that have 
caused so much violence and destruction.
    They have made arrests of important leaders from all of 
Mexico's cartels. These are the people who are responsible for 
systematically corrupting public institutions and officials, 
for undermining the rule of law and democratic governance and 
for challenging regional stability. These are the kingpins who 
organize, finance, direct, and control the criminal activity 
that affects us in the form of contraband, drugs and violence.
    The Calderon administration has extradited more than 178 
defendants to face U.S. justice, and it is reforming its own 
institutions to better address these criminals in Mexico. We 
are already seeing indications of success here at home. For the 
2-year period from January of 2007 to December of 2008, which 
essentially corresponds directly with the tenure of President 
Calderon, we have seen the price per pure gram of cocaine more 
than double, up 104 percent in the United States, while the 
purity of that drug has plummeted almost 35 percent.
    We have listened to judicially authorized intercepts of 
conversations between Mexican cartel members in which they 
describe the unprecedented stress being placed against them by 
the Calderon administration. Unfortunately, as the Government 
of Mexico's offensive has dramatically increased the pressure 
against these criminal organizations, the cartels have 
responded violently in a desperate attempt to preserve their 
illegal enterprise. As unfortunate as this violence is, it is 
not a harbinger of failure, but, rather, a signpost of success. 
Mexico must stay the course, and it is in America's best 
interest to help them in that endeavor.
    While intra- and intercartel violence has always been 
associated with the Mexican drug trade, the cartels are now 
intentionally targeting Mexican Government officials and 
innocent civilians. This violence, including the brutal murder 
of public officials in Mexico, is intended--these mutilated 
bodies and signs warning of even more graphic violence if they 
do not break the attack against these organizations is intended 
to break the public's will to support President Calderon's 
offensive. President Calderon's determination and resolve to 
press forward in spite of the sustained wave of brutal violence 
is commendable, but it has prompted many to examine the 
potential for spillover effects here in the United States.
    Mr. Scott. Sir, could you begin wrapping it up?
    Mr. Placido. I will wrap it up, sir, by saying that we must 
seize this unprecedented opportunity to help Mexico take the 
fight to the criminal organizations, and that helping them play 
offense is the best way for us to defend America.
    Thank you.
    Mr. Scott. Thank you.
    Mr. Hoover.

TESTIMONY OF WILLIAM J. HOOVER, ACTING DEPUTY DIRECTOR, BUREAU 
 OF ALCOHOL, TOBACCO, FIREARMS AND EXPLOSIVES, U.S. DEPARTMENT 
                           OF JUSTICE

    Mr. Hoover. Chairman Scott, Ranking Member Smith and other 
distinguished Members of the Committee, I am William Hoover, 
the Acting Deputy Director of the Bureau of Alcohol, Tobacco, 
Firearms and Explosives. On behalf of Acting Director Ken 
Melson, I am honored to appear before you today to discuss 
ATF's ongoing role in preventing firearms from being illegally 
trafficked from the United States into Mexico and in working to 
reduce the associated violence along the border.
    For over 30 years, the ATF has been protecting our citizens 
and communities from violent criminals and criminal 
organizations by safeguarding them from the illegal use of 
firearms and explosives. We are responsible for both regulating 
the firearms and explosives industries and for enforcing 
criminal laws relating to those commodities. ATF has the 
experience, expertise, tools, and commitment to investigate and 
to disrupt groups and individuals who obtain guns in the United 
States and illegally traffic them into Mexico.
    The combination of ATF's crime-fighting expertise, specific 
statutory and regulatory authority, analytical capability, and 
strategic partnerships is used to combat firearms trafficking 
both along the U.S. borders and throughout the Nation. For 
instance, from fiscal year 2004 through February 17 of this 
year, Project Gunrunner, which is ATF's strategy for disrupting 
the flow of firearms to Mexico, has referred over 790 cases for 
prosecution involving 1,658 defendants. Those cases include 382 
for firearms trafficking, which involve 1,035 defendants and an 
estimate of almost 13,000 firearms.
    While the greatest proportion of firearms traffic to Mexico 
originates out of the States along the southwest border, ATF 
trace data has established that traffickers are also acquiring 
firearms from other States as far east as Florida and as far 
north and west as Washington State. A case from April 2008 
involving a violent shootout that resulted in 13 deaths 
illustrates this point. ATF traced 60 firearms recovered at a 
crime scene in Tijuana. As a result, leads have been forwarded 
to ATF field divisions in Denver, Houston, Los Angeles, 
Philadelphia, Phoenix, San Francisco, and Seattle to interview 
the first known purchasers of these firearms. These 
investigations continue.
    Additionally, drug traffickers are known to supplement 
their firearms cash with explosives. Our expertise with 
explosives has proven to be another valuable tool to use in the 
fight against drug cartels. In fact, in the past 6 months, we 
have noted a troubling increase in the number of grenades 
seized from or used by drug traffickers. We are concerned about 
the possibility of explosives-related violence materializing in 
our U.S. border towns. We have had at least one such incident 
in San Juan, Texas, when a hand grenade was thrown into a crowd 
of 20 patrons. ATF was able to identify that grenade and 
believes it was linked to a Mexican drug cartel. We believe 
these devices were from the same source as those used during an 
attack on our U.S. consulate in Monterrey, Mexico.
    Along the southwest border, ATF's Project Gunrunner 
includes approximately 148 special agents dedicated to 
investigating firearms trafficking. Fifty-nine industry 
operation investigators are responsible for conducting 
regulatory inspections of federally licensed gun dealers, known 
as Federal Firearms Licensees, or FFLs. Just last week we sent 
over 100 additional personnel to the Houston field division to 
support our push against the trafficking of firearms to Mexico.
    As the sole agency that regulates the FFLs, roughly 7,000 
of whom are along the southwest border, the ATF has the 
statutory authority to inspect and examine the records and the 
inventory of licensees for firearms trafficking trends and 
patterns and to revoke the licenses of those who are complicit 
in firearms trafficking.
    For instance, ATF used its regulatory authority to review 
the records of an FFL who received close to 2,000 firearms, who 
removed their serial numbers, and who then trafficked them to 
Mexico with the aid of a coconspirator who resided in Mexico. 
ATF recovered over $120,000 in cash and 89 firearms, 8 of which 
had obliterated serial numbers, from the FFL. The ATF conducted 
a buy-bust operation with the Mexican contact, at which time he 
was also arrested. A review of records from the wholesalers 
confirmed that the FFL had received 1,869 firearms.
    An essential component of ATF's strategy to curtail 
firearms trafficking to Mexico is the tracing of firearms 
seized in both countries. Using this information, ATF can 
establish the identity of the first retail purchaser of the 
firearm and possibly learn pertinent information, such as how 
the gun came to be used in the furtherance of a crime or how it 
came to be located in Mexico. Furthermore, analysis of 
aggregate trace data can reveal trafficking trends and 
networks, showing where the guns are being purchased, who is 
purchasing them and how they flow across the border.
    Let me share an example of how trace data can identify a 
firearms trafficker. ATF's analysis of trace data linked a man 
living in a U.S. city along the border to three crime guns 
recovered at three different crime scenes in Mexico. Further 
investigation uncovered that he was the purchaser of a fourth 
firearm recovered at yet another crime scene in Mexico, and 
that he had purchased over 100 AR-15-type receivers and 7 
additional firearms within a short time span, using 9 different 
FFL wholesale distributors as the sources for his firearms. In 
April 2008, ATF seized 80 firearms from the suspect, and 
learned that he was manufacturing guns in his home. He sold 
over 100 guns alone to an individual who was suspected of being 
linked to a cartel. These investigative leads are also being 
pursued.
    Lastly, I would like to mention ATF's operational presence 
at the El Paso Intelligence Center, or EPIC, located in El 
Paso, Texas. EPIC is certainly one of the most valuable tools 
for intelligence sharing and for the coordination and 
multiagency efforts to curb violence and firearms trafficking 
activities along the southwest border.
    At EPIC we operate what is known as the ATF gun desk. The 
mission of the n desk is to identify and analyze all firearms- 
and explosives-related data acquired and collected from law 
enforcement and open sources. This would include Mexican 
military and law enforcement, along with U.S. law enforcement 
assets operating on both sides of the border.
    Chairman Scott and the other distinguished Members of this 
Committee, on behalf of the men and women of ATF, I thank you 
and your staffs for your continued support of our crucial work. 
With the backing of this Committee, ATF can continue to fight 
violent crime in the Nation's cities and on our borders, making 
our Nation even more secure.
    Thank you.
    Mr. Scott. Thank you.
    We will recognize ourselves for 5 minutes for questions.
    I will recognize the presence of the gentleman, our 
colleague from Virginia, Mr. Goodlatte, who has come in.
    I recognize myself for 5 minutes for questions.
    Mr. Hoover, you indicated that you used firearm records to 
trace many of these. Can you indicate the impact of the Tiahrt 
amendment on sharing trace data and on the requirement that 
records not be kept more than--what is it--90 days? What impact 
has that had on your ability to investigate crimes?
    Mr. Hoover. The Tiahrt amendment allows us to share 
information with the agency that provided the trace data. It 
does not allow us to share information with anyone other than 
that agency. If the other agencies would like to request to use 
that data, then they have to go through the agency that 
submitted it to ATF for the trace.
    Mr. Scott. How does that affect the ability to investigate 
crimes?
    Mr. Hoover. It does not impact our ability to investigate 
crimes. It would simply cause those agencies, other than the 
requesting agency, to use that agency's information to 
investigate that specific firearm trafficking.
    Mr. Scott. So we should not be concerned about that?
    Mr. Hoover. It has not been an issue at this point with law 
enforcement, no, sir.
    Mr. Scott. What about the length of time licensees have to 
keep the records?
    Mr. Hoover. The licensees keep their records forever, and 
when they go out of business, they give the information to ATF, 
to our out-of-business records, and we maintain the record on 
that sale if that licensee goes out of business.
    Mr. Scott. What is the provision that some records are only 
kept for----
    Mr. Hoover. That is part of the NICS Improvement Act, sir, 
I believe, where NICS records are only allowed to be kept for a 
certain portion of the time.
    Mr. Scott. For about 90 days?
    Mr. Hoover. I am not sure. I would have to get that answer 
for you, sir.
    Mr. Scott. Does anybody know?
    But that is not----
    Mr. Hoover. It is the Brady check, sir, that is kept for 90 
days, and then those records are destroyed.
    Mr. Scott. That would not be helpful to keep those records 
longer?
    Mr. Hoover. It may be, sir. I would have to check into that 
and get the information back to you.
    Mr. Scott. But that is not anything that you are asking?
    Mr. Hoover. No, sir.
    Mr. Scott. Okay. You said you had 1,035 people who were 
caught. Did I understand that right?
    Mr. Hoover. One thousand thirty-five defendants with those 
trafficking investigations, yes, sir.
    Mr. Scott. What happened to them? What was the disposition 
of those cases?
    Mr. Hoover. They would have been sentenced for various 
lengths of time through our judicial proceedings. I do not have 
the exact sentences for each and every one of those.
    Mr. Scott. Do you have an idea? Did they get much time; 6 
months, 8 years?
    Mr. Hoover. It varies. If it is an (a)(6) violation for 
lying and buying, it is somewhere between 12 months to 2 years, 
something in that area.
    Mr. Scott. Okay. Mr. Nash, you indicated that you had 750 
arrests.
    Mr. Nash. That was in connection with a single operation. 
That was Operation Xcellerator, which came down in March of 
this year.
    Mr. Scott. What happened to them?
    Mr. Nash. The arrests were only made in March of this year. 
There are prosecutions that are going forward in at least 30 
jurisdictions as a result of that operation. It will take some 
time to get the final dispositions. I can represent that none 
of those people have been sentenced as of yet.
    Mr. Scott. Okay. You indicated that 12,000 pounds of meth 
had been captured.
    Mr. Nash. That is accurate with respect to Operation 
Xcellerator, yes.
    Mr. Scott. Do you know how much meth gets through?
    Mr. Nash. We do not have a firm estimate on that.
    Mr. Scott. Of over 1 million Ecstasy pills, do you know how 
many get through?
    Mr. Nash. No, sir.
    Mr. Scott. Do you know whether you are capturing a 
significant portion of what is being shipped?
    Mr. Nash. Sir, I think the best indicators as to our 
effectiveness are the statistics that were cited by Mr. Placido 
in his testimony, which indicate that, with respect to cocaine, 
which are the numbers for which we have the firmest and best 
statistics, we have right now experienced, for 2 years now, a 
sustained increase in both the price that you pay on the street 
for a gram of cocaine and a decline in the purity of that 
product on the street. As Mr. Placido testified, the price of 
that gram has almost doubled in the span of the last 2 years--
or it has more than doubled in the last 2 years. The purity 
during that period has declined by 30 percent. We use that as 
at least one data point to suggest that our efforts are having 
a considerable effect on the availability of drugs on the 
streets of the United States.
    Mr. Scott. Well, that affects the price. Does it affect the 
availability? I mean, has anybody gone to a drug dealer and 
been told, ``I just cannot get any today. You have got to wait 
until tomorrow or next week to see if we can get a shipment''?
    Mr. Nash. Again, as Mr. Placido mentioned, we do have 
anecdotal evidence, from listening in through judicialized wire 
intercepts to dealers, that people have complained about 
shortages; but again, this is a market, and markets operate as 
a rationing device. Certainly when we were experiencing 
shortages of gasoline, it was not that people could not get 
gasoline; it was that the price at the pump went from $2 to $4. 
A consequence of that is that people were driving less. The 
market for drugs, I would suggest, works similarly to that, and 
when the price goes up----
    Mr. Scott. Let me give the only couple of seconds I have 
left to Mr. Placido to comment on availability.
    Mr. Placido. Certainly, sir.
    What I can tell you is that on certain drugs such as 
cocaine, which is produced from a plant, marijuana or heroin, 
we have got estimates about total production. It becomes more 
difficult with synthetic drugs of abuse, like methamphetamine 
or MDMA.
    Just to give you an example that may be responsive to your 
question, in 2008, the U.S. Interagency estimated a range of 
production between 901 and 1,082 metric tons of cocaine 
actually produced. Seizures worldwide were about 528 metric 
tons or, roughly, anywhere from 49 to 59 percent of the total 
amount of cocaine produced having been seized. So it is a 
significant amount. We showed, just by reference in terms of 
Mexican heroin, approximately 15 percent of the estimated 18 
metric tons produced having been seized, and in terms of 
Mexican marijuana, between seizures and eradications, about 21 
percent of seizures. So there is some significant work being 
done on the enforcement side.
    With regard to shifts in price and purity, one of the 
things that is particularly important when you talk about 
cocaine in particular is as scarcity occurs, that is where you 
see the fluctuations in purity. They add adulterants: lactose, 
sugar, other commodities. So, not only does the price go up, 
but as to the purity of the drug that is being sold, we have 
seen a 35 percent drop as well.
    So it is an indicator of decreased availability.
    Mr. Scott. Thank you.
    The gentleman from Texas, Judge Poe.
    Mr. Poe. Thank you, Mr. Chairman.
    Thank all of you for being here. The purpose of this 
hearing is to determine the problem; that is any of the 
violence on the border, especially American side. We have 
heard, and I have heard personally, from people on the border, 
usually politicians, mayors, chambers of commerce; it is not 
really a problem on the American side.
    I would like for you to look at a chart that is over here.
    Can we have the chart please?
    I spent a lot of time on the Texas Mexico border talking to 
folks like the Border Patrol, the DEA, but also the Texas 
border sheriffs. And I asked them to tell me the percentage of 
people in their jailhouse that are foreign nationals, that are 
not there being held by the Feds on immigration violations 
only, but being held with felonies or misdemeanors where they 
have been charged in the county.
    And you see, starting in El Paso, the statistics vary from, 
the El Paso jail has 18 percent foreign nationals; Hudspeth 
County, which is the size of Connecticut, vast area, has 90 
percent according to Sheriff Arvin West; Culberson County, 22 
percent according to Oscar Correo. The next four counties, they 
don't keep those records.
    Moving on down to Bulverde Count, 93 percent; Kenny County, 
71 percent are foreign nationals; Maverick County, 65 percent; 
Dimmitt County, 45 percent; Webb County, which is Laredo area, 
45 percent; Zapata County, 65 percent; Starr, 53 percent; 
Hidalgo, 23 percent; and then the last county that touches the 
Gulf of Mexico, Cameron County, with 28 percent.
    It seems to me, that is a lot of folks that are from 
foreign countries that are in American jails charged with 
crimes in the United States, and most of those, no question 
about it, are charged with some form of drug crime or carrying 
a weapon, according to the sheriffs themselves.
    Here are my questions. Regarding, first, Mr. Placido, do 
you think the use of the Air National Guard should be increased 
or decreased? I rode with the Air National Guard up and down 
the Rio Grande river, working with the Border Patrol and 
capturing at least one drug interdiction coming across from the 
border. Do you think that is something that can work with you 
or not?
    Mr. Placido. Well, I think there are others at the table 
who are probably better qualified to talk about interdiction 
than I am. My focus is really investigations. But if the, if 
the genesis of your question as I understand it is, could we do 
better with additional support to interdict drugs and other 
contraband before it enters the country, I think the answer to 
that is, yes, sir, I think we could.
    Mr. Poe. Let me refer you to a Los Angeles Times article 
from last month that said, there is a turf battle going on with 
the different Federal agencies and that the effort to stop the 
drug cartels and the smugglers has stumbled in part because 
Homeland Security and various Justice Department agencies have 
overlapping responsibilities and are engaged in turf battles. 
The vast majority of ICE agents cannot make drug arrests, even 
though the same smugglers are often illegal immigrants. The 
reason, the DEA has not authorized the required cross-
designation authority for them.
    Is that correct.
    Mr. Placido. No, sir. No, sir, and let me begin by telling 
you that I think there is good news on the horizon. The 
Attorney General of the United States and the Secretary of 
Homeland Security have met on this very subject already, and I 
believe, I don't want to get out in front of my bosses, but I 
believe that a successful resolution is in the offing.
    But let me clarify a couple of facts. First of all, every 
ICE agent can already make arrests or seize contraband drugs at 
the border. The issue is not making arrests or seizures; it is 
conducting investigations after that seizure is made and 
carrying it forward. There are currently 1,475 or approximately 
25 percent of all of the ICE agents that are currently on the 
job are cross-designated to conduct those investigations 
anywhere in the country they go.
    I think what you have heard most recently is a request that 
goes beyond that and is a request for concurrent unilateral 
authority to investigate drug crimes by ICE. And the issue here 
is not whether we can protect America better but how we 
coordinate the activity of these different agencies as we move 
forward, and I have got a very detailed response if you would 
like me to give it here.
    Mr. Poe. I am limited on time, but let me cut to the chase; 
do you think that ICE should have more responsibility in drug 
investigation? I want your opinion.
    Mr. Placido. I think if ICE works within the existing 
coordination mechanisms that all other Federal agencies use to 
coordinate drug investigations, we would welcome their 
assistance.
    Mr. Poe. All right.
    Mr. Hoover, some questions for you at the ATF. I understand 
that the Mexican military, Mexican Federal police, the drug 
cartels, those are primary the folks that have guns. Regular 
citizens, they can't have guns like they do in the United 
States. And it seems to me Mexico has a responsibility to 
protect their border from guns coming in just like we have a 
responsibility from protecting criminals and drugs coming into 
the United States. A hundred thousand Mexican soldiers 
apparently have deserted with their weapons, weapons made in 
Belgium. What is the government of Mexico doing to protect 
their border against firearms coming in to their country? And I 
am out of time, so this is the last question.
    Mr. Hoover. All right, sir. I know that the Mexican 
government under Attorney General Medina-Mora has made great 
strides, especially in working with the ATF to trace the 
firearms that they recover. The vast majority of those traced 
are being used in Federal prosecutions and in Mexico, and they 
trace those weapons.
    I will tell you that we don't know the entire universe of 
firearms that are recovered in Mexico. We continue to work with 
Mexican authorities to do that, to get that information, so 
that we can give better data back to them regarding the where 
these firearms are coming from.
    I will say that the 90 percent figure came from those 
weapons that have been recovered and traced by the officials in 
Mexico. The vast majority of that has come through CENAPI, 
which is the intelligence branch under PGR, and that is where 
we get the vast majority of our information regarding the 
weapons recovered in Mexico.
    Mr. Poe. Thank you, Mr. Chairman.
    Mr. Scott. Gentleman from Virginia, Mr. Goodlatte.
    Mr. Goodlatte. Mr. Chairman, thank you very much for 
holding this hearing.
    And I want to thank all of our witnesses for their 
participation.
    Mr. Nash, I wonder if you could comment on your thoughts on 
how we keep this violence from crossing our borders and how we 
prevent U.S. Law enforcement and citizens from becoming 
targets.
    Mr. Nash. Yes, sir. I do think that the appropriate 
paradigm to view this through is the fact that these are not 
isolated incidents, that these are criminal organizations, a 
relatively limited number of criminal organizations, and they 
are reacting to the stress that is being placed upon them by 
the very heroic efforts of our Mexican partners south of the 
border.
    We talk about the war on drugs, and to us, it is a 
metaphor. In Mexico, it is a reality, and they are experiencing 
casualties in connection with that war amongst their law 
enforcement, their very heroic law enforcement officers, every 
day.
    Mr. Goodlatte. Do we prevent it coming into our side of the 
border by helping them with their effort?
    Mr. Nash. I think that is part of it, and I think that it 
has been spoken about by some of the other witnesses already 
today, that we have a historic opportunity to work with the 
Mexicans and help with the Mexicans because of the orientation 
of the current administration down there that has gotten 
serious about taking care of this problem.
    Mr. Goodlatte. Is most of the violence one drug cartel 
fighting one another or drug cartels fighting against law 
enforcement?
    Mr. Nash. I think the majority is cartel on cartel or also 
within cartels. Drug debts that go unsatisfied within a cartel 
will often be a reason for violence as well.
    I think, right now, the numbers are running at about 10 
percent of the homicides south of the border are homicides in 
which a victim is a law enforcement representative of Mexico.
    But I think there are things we can do on our side of the 
border. I think, as I said, our strategy is to put together 
task forces that bring the statutory authorities and the 
diverse expertise of all of the law enforcement agencies that 
you see represented here before you today in a concerted action 
to use our intelligence resources to identify where the real 
threats are, identify the leadership of those cartels, and then 
bring down the organizations in a concerted fashion like the 
operation.
    Mr. Goodlatte. Thank you.
    I have a couple of other questions. I do appreciate that 
answer.
    Mr. Nieto, the increase in CBP personnel between 2001 and 
2008 should show a reduction of border violence, but instead, 
there is an increase. I wonder if you would explain that or 
comment on that.
    Mr. Nieto. Well, sir, we expect that initially we will have 
an increase because we will have more officers and agents out 
there. Until we get to the point where we pretty much overtake 
that territory again, if you want to call it that, then that 
trend starts coming back down. So that is what we attribute it 
to.
    Mr. Goodlatte. And Ms. Ayala, from what ICE enforcement 
activities are agents being--where agents will be redeployed to 
the southwest border in order to combat the rising border 
violence? Where are they coming from?
    Ms. Ayala. Yes. We deployed 95 additional agents to the 
southwest border area to backfill agents, and we increased our 
attache personnel by 50 percent. We have increased our border 
liaison officers who are assigned to border offices and 
increased our intelligence commitment to the border by tripling 
it.
    Mr. Goodlatte. Where are those new agents coming from? Are 
they new agents, or are they being reassigned from other areas?
    Ms. Ayala. Most of them are temporarily reassigned from 
other areas throughout the Nation, and therefore, a certain 
period of time. We are waiting to see what resource commitments 
permanently we will be making here in the future.
    Mr. Goodlatte. Obviously, we are concerned about what is 
going on on the border, but I happen to share the belief of 
many, including many of my constituents, that not enough is 
done by ICE to deal with immigration violations in the interior 
of the country and communities like the Shenandoah valley and 
the Roanoke Valley and central Virginia, that I represent, 
where there is a great deal of activity.
    I am not sure we share the same percentages of people in 
the jails that Congressman Poe showed along the Texas-Mexico 
border, but I do believe you would find a very disproportionate 
percentage of the occupants of both State and Federal 
facilities in my area and the number of cases going through our 
U.S. District Court as well as our State court would show a 
disproportionate number of people who are not lawfully in the 
United States. So I want to express my concern that, while we 
divert people to address this problem, we are neglecting 
another problem, and I wonder if you would comment on what is 
being done to enhance your enforcement of the immigration laws 
in the interior of the country.
    Ms. Ayala. Well, typically--this isn't the first time that 
we have redeployed assets to the southwest border to address 
issues like this. We did send, in 2005, in the same manner to 
address the increased violence in the Laredo area, and we were 
successful, along with our Mexican partners, in reducing the 
murder rate and border violence on both sides of the border. 
And we typically assess our needs during the year to decide if 
we need to plus up in certain areas based on upcoming large-
scale law enforcement operations, and so forth.
    As far as our commitment to smuggling issues or 
immigration, as far as our commitment to the southwest border, 
most focus on human smuggling and trafficking aspects and 
organizations, transnational organizations, that are violent 
there, specifically in the Phoenix area, and when we are 
looking to pull resources from anywhere within the United 
States, we make sure that we pull resources from offices that 
are large enough to sustain the loss. It is not like we are 
pulling one agent from a two-man office. And if we see a need 
to redeploy during that time period, then we do, again, 
reassess our needs and redeploy to those areas.
    Mr. Goodlatte. Thank you.
    Thank you, Mr. Chairman.
    Mr. Scott. Thank you.
    I would like to inform the gentleman from Florida that I 
should have recognized you first. You had gotten here before my 
colleague from Virginia, so I apologize. I recognize you at 
this time.
    Mr. Rooney. Thank you, Mr. Chairman.
    I am just glad the gentleman from Virginia didn't ask my 
question.
    I believe this is for Mr. Nieto, but anybody on the panel, 
it is a basically straightforward question with regard to 
something you have all heard of, the Security Fence Act, and 
you know that is 800 miles of--required 800 miles of fencing 
across the border. And I am wondering just basically, obviously 
the fence is not complete. In your opinion, would the 
completion of the border fence as required by the act have an 
effect on the decrease in flow of drugs, and therefore possibly 
the decrease in violence as a result of that, if the fence was 
actually completed.
    Mr. Nieto. Absolutely, sir, but the answer is not the fence 
by itself. It has to be that combination of fencing or what we 
consider tactical infrastructure, technology, and the right 
amount of personnel. If we were to fence the whole border and 
no one was out there to watch it and we wouldn't know what was 
happening on it, it would prove useless.
    So with that amount of fence, which is what the field 
commander said that was the right amount, with that combination 
of, we call it the three-legged stool, with the technology and 
resources or personnel, yes, it would prove effective in 
affecting all types of traffic out there because we look at it 
in all threats, all hazards, as an address to it.
    Mr. Rooney. Thank you, Mr. Chairman.
    Mr. Scott. Thank you.
    Mr. Gohmert.
    Mr. Gohmert. Thank you, Mr. Chairman.
    And I do appreciate the testimony.
    I had longstanding commitments, but I was monitoring from 
C-SPAN. That is a good thing, too. It helps.
    But as some are proposing more laws regarding U.S. Weapons 
to try to help Mexico, but as I understand it, most of the 
weapons that are purchased by Mexico, people in Mexico that 
come from the United States are already being purchased 
illegally. So, rather than add new laws, and this is open for 
anyone, what do you see that could be done to better enforce 
existing laws to stop illegal purchases, even without any new 
additional laws?
    Mr. Nieto?
    Mr. Nieto. Sir, not to answer the law question, but one of 
the things we have to do, especially with the Merida 
initiative, where we are providing money to Mexico and 
training, is to allow them or help them build the capacity in 
Mexico to inspect vehicles and people and cargo going into 
their country. I think that would, it is almost like teaching 
them how to fish instead of giving them the fish to eat. That, 
at their northern border, with the United States, at the same 
time a thorough assessment and the same type of training and 
capacity building on the southern border with Guatemala, I 
think that would really have a greater effect than any laws, 
any changing of any laws in the U.S., in Mexico, or elsewhere.
    Mr. Gohmert. Thank you.
    Does anybody else have comment on that?
    Ms. Ayala. I just want to say that, as far as our approach 
to the entire arms-smuggling effort, we look at it not just in 
a vacuum but all of its associated and ongoing crimes. So in 
stepping up our efforts related to narcotics smuggling, weapons 
smuggling, bulk-cash smuggling, and human smuggling 
trafficking, more and more we are seeing that many of these 
activities are directly related to weapons coming back and 
related to money also going back.
    So by taking a comprehensive approach and utilizing 
existing task forces, such as The Border Enforcement Security 
Task Force, which is international, it is multi agency, and it 
is a task force that really brings to bear all of the Federal 
agencies that are here and State and locals, we are able to 
share more information and really target to disrupt and 
dismantle these organizations.
    Mr. Gohmert. Okay.
    I have a particular issue that has come up with a 
constituent who was down fishing in southern Mexico just a few 
miles from Belize, and he disappeared. I don't know if you 
heard about Mr. Scheepstra's situation, but I met with his wife 
Sunday for a couple of hours. And she had been down there, and 
apparently, there is drug activity, from my trips, from 
visiting with people in Colombia previously about our drug work 
there with the British, with the Colombians, and Uribe is doing 
a fantastic job apparently. But it looks about two-thirds of 
the boats that bring cocaine, for example, up apparently come 
into Mexico and then go up through Mexico.
    Anyway, Mr. Scheepstra was fly fishing, card there, wallet, 
passport, everything at the motel in the safe. He has 
disappeared. Mexico says all they can do is list him as 
missing. Some people went out and looked. They had some Mexican 
soldiers look, but you have an issue of corruption there. And 
that type of situation, we know there are other kidnappings, 
what can be done to work with the Mexican government to try to 
find someone like that? What allows us to go in and help?
    And number two, since we know there is corruption and that 
is one of the most difficult issues Calderon is facing, how do 
you know who to trust with information we have?
    Mr. Placido. Well, first of all, I am very sorry to hear 
about Mr. Scheepstra and his problem down there, and perhaps we 
can get together after and do something to help you with this 
problem.
    What I can tell you is that, while corruption is a problem 
in Mexico as it is in the United States or elsewhere, we have a 
number of what we believe to be honest, courageous counterparts 
in Mexico that we work with. There are a number of vetted units 
that have been trained and polygraphed and given the same kind 
of background investigation we would give to a DEA agent, for 
example, and the Minister of Public Security, Genaro Garca 
Luna, and the Attorney General, Eduardo Medina Mora, are both 
men of high quality, and I am sure that something can be done 
to try and further investigate it.
    We need to know some more details, whether ransom was asked 
for.
    Mr. Gohmert. No, no ransom, but it also touches on what Mr. 
Nieto was pointing out as far as training. They decided, 
because he was American, they would do a full forensic 
examination of his car. He never got back to it. They don't 
know if he was in there. And so the police got in the car and 
drove it 45 miles so they could check for fingerprints, you 
know, for DNA testing, whatever. But anyway, they could, 
apparently, either watch CSI, or maybe we could help them to 
know, you don't drive a car 45 miles with people in it before 
you do your testing. So did you have a comment?
    Mr. Nieto. Sir, in relation to the corruption issues and 
the vetting, they are working. CISEN is working with our 
internal affairs to allow them to build that capacity as well 
where they can vet their officers, their operatives in Mexico 
to make sure that they keep them clean.
    Mr. Gohmert. Any other comments on that?
    Well, let me just add and thank you, Mr. Chairman, again.
    But it seems to me that Mexico could be one of the top 5 or 
10 economic power houses in the world. When you look at the 
resources they have, and we know they have got some of the best 
workers in the world in that country. And it just seems that 
corruption is the thing that keeps them from being one of the 
greatest nations in the world. So I appreciate any efforts that 
can help bring that neighbor alongside of us effectively. Thank 
you.
    Mr. Scott. Thank you gentlelady from Texas.
    Ms. Jackson Lee. Let me thank the Chairman and the Ranking 
Member for holding a vital hearing in the face of the calamity 
just a few hundreds of miles away from the fourth largest city 
in the Nation.
    In speaking to my colleagues who live near or in another 
border State, Arizona, it is amazing to hear of the litany of 
kidnappings and missing persons. We have just heard my 
colleague speak of an American citizen missing. Over the years, 
before this intensity of drug and gun smuggling and dastardly 
deeds have occurred, a former colleague of mine, the now 
Secretary of Labor, Hilda Solis, was a huge force in the murder 
of women along the border, particularly on the Mexican side. 
And many, I just say, just frankly, almost all have been, if 
you will, not resolved.
    This calamity is not in any way a reflection on the 
friendship that we have with the people of Mexico. In fact, it 
should be stated on the record that the numbers of law 
enforcement and leadership in Mexico, sheriffs and others who 
have lost their lives, is to be recognized and to acknowledge 
the deep sympathy that we have for the families of those who 
have lost their lives actually in this battle, in this war.
    So I lay that ground work and would like to just offer into 
the record some data that I have that may have already been 
noted. In 2008, the violence between Mexican drug gangs 
fighting for trafficking routes to the United States killed 
approximately 6,000 people in Mexico, including one more than 
500 police officers and soldiers. In the first 8 weeks of 2009, 
more than 1,000 people were killed as a result of the drug war.
    I am certainly grateful to the Administration for the 
appointment of the drug czar or the border czar and the 
dispatch of the numbers of individuals that have gone to the 
border.
    But I want to be honest, and I am I guess filled up to my 
cup or my cup runneth over with the conflict between the second 
amendment, of which I have great respect for, because I do 
believe the people should have the right to protect themselves 
as the underlying premise of that legislation, and my good 
friends who believe that there should be nothing in this world 
regulated having to do with guns.
    I don't know, frankly, how many officers will have to be 
killed, how many Mexican law enforcement will have to be 
killed, and how many movies will have to be made showing that 
the guns come from the United States. Much of it comes from 
Houston. I am aware, as a Member of this Committee and also a 
Member of the Committee that lives in Houston of the surge of 
officers coming in to assist us. Let me first of all indicate 
to both, I believe, Mr. Placido and Mr. Hoover that I would 
like to meet with your leadership in Houston, and if you would 
make note of that and be in touch with my office, I would like 
to do that as quickly as possible.
    But I would like to refer you to H.R. 1900, because until 
we wake up about the gun smuggling, we know that two of our 
colleagues have offered legislation in the last 24 hours to 
close the gun show loophole. But I want to specifically focus 
on the intertwining of guns and drugs and how that is a problem 
coming from this direction and refer you to my legislation, 
H.R. 1900, which is I think a simple premise. It allows 
Governors to declare emergencies and seek, from both the 
Department of Homeland Security and the DOJ, an emergency 
increase in Border Patrol agents, an emergency increase in DEA 
agents, an emergency increase in ATF agents.
    My colleague, Mr. Poe, has joined me on this.
    It also goes to the increase in equipment. I am not sure if 
the czar is working on the increase in helicopters, power 
boats, other Border Patrol assets, motor vehicles, which can be 
used by overlapping jurisdictions, and handheld computers and 
radio communications, GPSs, et cetera, night vision equipment, 
because believe it or not, even today I don't think we have 
enough, and certainly if our ATF officers and DEA officers are 
on the border, they need some equipment as well.
    This legislation also funds a task force of ATF, DEA, and 
Border Patrol, whose members would be appointed by the 
Administration, and you would meet every 2 months, and you 
would have a report, so that we could show that we meant 
business, and you would collaborate with the local law 
enforcement.
    If the Chairman would indulge me, I would like to be able 
to have my questions answered by Mr. Placido and Mr. Hoover to 
speak to the interlink of guns of all kinds, AK-47s, that are 
loosely smuggled through Houston, how much of a role do they 
play in where are today? And I realize that there has been some 
good news in your testimony. I apologize, I had several 
meetings that were detaining me from that, but I am aware of 
your testimony. But I want to know where we are in terms of 
that basic cause of what the crisis at the border is at this 
time.
    Mr. Placido.
    Mr. Placido. Thank you, ma'am.
    First of all, Ms. Jackson Lee, we would be delighted to 
meet with you and your staff regarding this legislation and 
regarding the broader problem, be glad to that arrange that 
after this meeting.
    The thrust of my oral statement as I began this hearing was 
to dispel what we believe is an unfortunate mischaracterization 
of the problem. Unfortunately, the violence that we are seeing, 
the problems emanating from Mexico, really don't, cannot be 
geographically bounded and described as a border problem. 
Unfortunately, the criminal organizations that should be our 
focus have impact well beyond our borders, in cities like 
Atlanta and Lawrence, Massachusetts, and really throughout the 
country.
    Ms. Jackson Lee. Making it a much larger problem.
    Mr. Placido. It is a much larger problem, and while I 
certainly appreciate the fact that border Governors and people 
who are on the front lines of the border with Mexico need 
resources, I will speak only for the Drug Enforcement 
Administration, the immediate deployment of 500 DEA special 
agents would detract from other things that we are doing, and I 
don't believe that that geographic kind of deployment would be 
the best way for us to negatively impact those organizations. 
We believe that a focused attack on the criminal organizations 
themselves rather than one that is geographically based is 
likely to have the best impact, and I would be glad to take 
that up with you in more detail at a different time, ma'am.
    Ms. Jackson Lee. Well, obviously, many of us disagree with 
that, and certainly it is not an automatic. It is a declaration 
that would be made, and I did ask you to comment on the 
interaction with the drugs and guns, and you did not comment on 
that.
    Mr. Placido. Certainly, drugs and guns go together. Guns 
are tools of the trade. It is historic, for the 30 years that I 
have been operating in this business, drug traffickers' use of 
weapons both to intimidate and to cause violence has been a 
problem. It certainly seems to be exacerbated and at a new 
fevered pitch, if you will, in our relationship with Mexico.
    We characterize that violence in three broad categories 
analytically: Inter-cartel violence, with members in the same 
cartel doing battle with one another; intercartel violence with 
rival cartels doing war. Those have been around for a long 
time. What is new and disturbing and I believe what is causing 
much of the angst is the extent to which the cartels are now 
lashing out against the government itself, attacking the 
government of Mexico and attacking innocent civilians.
    And one of the things that we are very careful of, we have 
got an interagency group looking at this, is, to what extent 
will that kind of violence be directed against U.S. Government 
personnel or interests or innocent civilians on U.S. Soil spill 
over our borders?
    Ms. Jackson Lee. When they engage in violence, they have 
guns, right?
    Mr. Placido. Yes, they do.
    Ms. Jackson Lee. Okay. So your basic sentence on the 
question of the impact of guns that kill.
    Mr. Placido. Absolutely, ma'am.
    Ms. Jackson Lee. All right and many of these guns are 
smuggled guns illegally secured from the United States.
    Mr. Placido. That is my understanding, but I will defer to 
my colleagues from ATF and ICE to describe that. They have got 
the portfolio better under control I believe.
    Ms. Jackson Lee. Mr. Hoover.
    Mr. Hoover. Yes, ma'am the reason we plussed up our 
resources in the Houston Field Division, which covers Houston 
and south Texas, was because of the trace information that we 
had regarding the number of firearms recovered in Mexico and 
traced and then those that were purchased in the Houston area 
and in south Texas. They lead any other part of the country by 
two or three times the amount of firearms being purchased.
    You know, the----
    Ms. Jackson Lee. Two or three times.
    Mr. Hoover. Yes, ma'am.
    What is happening in Mexico is the, you know, with the 
violence, as has been stated by others, is a couple of things. 
They are either using the firearms to protect their shipments. 
They are using their firearms to protect their routes where 
they are moving the drugs from Mexico into the U.S.
    Drug cartels are coming in and trading drugs for firearms, 
or we have individuals in the United States capitalizing on the 
need for firearms by the Mexican cartels by purchasing those 
firearms illegally and then taking them to Mexico and selling 
them. So those are the ways that we see the firearms involved 
in the narcotics trafficking trade.
    Ms. Jackson Lee. These are illegal firearms, or are they 
purchasing them legally or illegally?
    Mr. Hoover. In some cases, they are purchased legally and 
then moved into the illegal market. In some cases, they are 
illegal from the jump because individuals are purchasing them 
illegally, knowingly purchasing them for the drug cartels or 
for someone else who they know will then traffic those guns to 
Mexico.
    Ms. Jackson Lee. And are you meeting and collaborating with 
local law enforcement, like the sheriff's department and 
Houston Police Department and others?
    Mr. Hoover. Yes, ma'am, our folks in Houston, Texas, are 
collaborating with individuals from all over Houston and south 
Texas. We collaborate with all the folks you see sitting at 
this table. We have an OCDETF strike force in Texas. We have 
one group assigned to that strike force to ensure we get on top 
of this problem.
    Ms. Jackson Lee. I thank you, Mr. Chairman.
    I will look forward to heating with Mr. Hoover and Placido, 
but specifically in Houston, I want to meet with the team in 
Houston. Thank you.
    Mr. Scott. Thank you. Gentlelady's time has expired.
    Gentleman from Texas had an additional question.
    Mr. Gohmert. Thank you, Mr. Chairman.
    Just one. I alluded to the Chicago Tribune article about 
the Sinaloa cartel and apparently Guzman or, supposedly, 
according to the story that they are now authorizing or 
encouraging the use of violence to protect drug loads within 
the United States. I mentioned that, but I am curious, does 
anybody know, is this true what is being reported that now we 
can expect more violence from inside of our borders? Does 
anybody know?
    Mr. Placido. I can personally address the answer for you, 
Mr. Gohmert.
    The fact is that we have hard empirical evidence indicating 
that the traffickers consistently have said they do not want to 
engage in violence on the United States--on U.S. Soil. There 
are repeated instances of that that we could provide, in a 
different setting, to document that for you.
    The problem is, we never know what we don't know, and I am 
not going to sit here and tell you or anybody else that there 
hasn't been a decision made or that there won't be a decision 
made to attack U.S. Law enforcement. What wWe can say is, after 
extensive analytic research by 14 agencies of the U.S. 
Government, we have not yet seen an effort to systematically 
attack U.S. Government employees or interests or innocent 
civilians on U.S. Soil at a rate that is above what we had 
normally seen prior to this outbreak of violence in Mexico.
    Mr. Gohmert. Well, and that is why this story said that 
that such a move by Guzman, Mexico's most wanted fugitive, 
would mark a turn from the cartel's previous position of 
largely avoiding violent confrontation. So the empirical data 
may be that they have up to this, but the story today is that 
Guzman is now saying, and they report, that police and Federal 
agents--I just didn't know if it was some of yours or you--said 
they had recently received at least two law enforcement alerts 
focused on Guzman's reported orders that his smugglers should, 
quote, use their weapons to defend their loads at all costs, 
unquote. And so that would have been recent, reported today, 
brand new, and this would be a turn from all the empirical data 
we have had up to this point. I just didn't know.
    Mr. Placido. I do not have information on that at this 
point.
    Mr. Gohmert. Anybody else?
    Mr. Nash. I would back Mr. Placido's comments and just 
suggest that our collective experience until now is that there 
has been a very firm conviction on the part of the cartel 
leaders that engaging in violence of the nature that is 
mentioned in that article would be bad for business for the 
cartels, and for that reason alone, they have decided that that 
is not a road that they want to go down.
    I agree completely with your characterization that if, in 
fact, this statement is something the cartels decide that they 
are going to go forward with, it would be a turn from past 
practice and something that we certainly----
    Mr. Gohmert. Hasn't the price of cocaine gone up? For less 
cocaine----
    Mr. Nash. It has, and I think the sentiment that might have 
motivated Mr. Guzman's comments certainly is an accurate one 
and one that----
    Mr. Gohmert. It would mean you all are doing a good job, 
being effective, and so if this were true, it would actually be 
a, wow, you are doing a good job. You are hurting them. So 
anyway, thank you for all your work. I know it is a profession 
that requires great dedication, so we appreciate yours.
    Mr. Scott. Thank you.
    This has been an oversight hearing, and one of the things 
we usually expect at an oversight hearing is witnesses to tell 
us what we should be doing more, more resources, change laws or 
what not, and it gives witnesses an opportunity to recommend 
legislative changes. Best I can ascertain, no one availed 
themselves of that opportunity. You didn't say we needed new 
gun laws. You didn't say you needed a whole lot more money. If 
I got you wrong, does anybody want to take one more shot?
    Mr. Nash. One that I will raise, Mr. Scott, which is, we 
have talked a good bit about drugs. We have talked a good bit 
about guns. The third leg to that stool that we haven't talked 
quite a bit as much on is we do feel very strongly that cutting 
off the money flow to these organizations is an essential part 
of our strategy. There were two Supreme Court decisions at the 
end of the term last summer that significantly affected our 
ability to bring successful prosecutions against those involved 
in bulk-cash smuggling in connection with the drug trade.
    One of the those decisions was the Santos decision. I 
understand that, within the last 30 minutes prior to the 
convocation of this hearing, the Santos fix was passed in 
connection with your efforts, Mr. Scott, and those of yours, 
Mr. Gohmert, and this Committee, and we appreciate that.
    The second decision is the Cuellar decision, and there is 
proposed legislation that would return the interpretation of 
that statute to the interpretation that was generally accepted 
prior to the decision of the court in Cuellar, and so we would 
ask that you take a look at what we have termed the Cuellar 
fix. We have proposed legislation, and we would ask that you 
take a look at that, which would increase our ability to bring 
successful money-laundering charges against those who engage in 
bulk-cash smuggling across the southwest border.
    Mr. Scott. I think the second case you mentioned had a 
problem because it didn't require an intent as part of, as an 
element of the crime, which is obviously problematic.
    The Santos case, I think we fixed that while you were 
waiting for us to come back. It was one of the bills on the 
floor.
    Ms. Jackson Lee. Mr. Chairman, you had an inquiry, I would 
just wish to comment. These are very, very fine public 
servants, and I do appreciate their leadership.
    I think, short of doing no harm on the United States 
Congress, we have an obligation, Mr. Chairman, to fix things 
where necessary. We certainly don't want to make things worse.
    Not putting words in Mr. Hoover's mouth, he has indicated 
that, out of our community, two or three times--two or three 
times the sale of weapons; we are in essence the epicenter of 
these weapons going into Mexico. Frankly, I believe that if 
they have not offered legislative suggestions, and I am willing 
certainly to modify my legislation, but one, I think it needs 
to be targeted. Two, I think there needs to be immediate 
response in terms of gun legislation that addresses the 
question of smuggling and the loopholes. And there is some 
legislation being put forward. And I can't I can't imagine--
there are many witnesses who came here in years past and said, 
we don't need anymore Border Patrol agents, and it was 
incorrect.
    So I appreciate the fiscal responsibility and the 
discreetness of the witnesses, but frankly, I believe it is the 
responsibility of the Congress to address glaring issues, and I 
do think more DEA agents, whether they are shared with Atlanta 
or elsewhere, are needed. I think more ATF officers are needed. 
And one of the issue is being able to make the case, being able 
to have the necessary U.S. Attorneys and assistant U.S. 
Attorneys in these high-target areas that can make the case.
    So I thank the Chairman for yielding, and I would like to 
pursue the legislation that I have written with corrections or 
modifications, and I think that we have an obligation because 
of what is going on, on the border and in Atlanta and Chicago 
and New York, on these drugs and guns to really act and give 
more tools to these very fine public servants.
    I yield back to the Chairman.
    Mr. Scott. I thank the gentlelady for her comments.
    If the witnesses have any other comments, the hearing 
record will remain open for 1 week for submission of additional 
materials.
    Members may have written questions which we will forward to 
you and ask you to respond as quickly as possible so that the 
answers can be made a part of the record.
    Mr. Nieto.
    Mr. Nieto. Sir, if I can make one last comment.
    We spoke of border violence along our borders there, and I 
just want to make sure that I mention this. El Paso, Texas, 
which is just north of Ciudad Juarez, which has been the 
epicenter of the violence here the last few months, is the 
third safest large city in the United States. San Diego is the 
fourth, two cities right along the U.S.-Mexico border, and I 
think a big part of that is the organizations that my 
colleagues here at the table belong to and, obviously, the 
State and locals in those areas and their efforts.
    I just wanted to thank them for the record.
    Mr. Scott. Well, thank you. And if you have other 
recommendations that we can do to help you do your job, we 
appreciate hearing them.
    And without objection, the Committee now stands adjourned.
    [Whereupon, at 5:35 p.m., the Subcommittee was adjourned.]













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