[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]






                     HAS MERIDA EVOLVED? PART ONE:
  THE EVOLUTION OF DRUG CARTELS AND THE THREAT TO MEXICO'S GOVERNANCE

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

                             JOINT HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                         THE WESTERN HEMISPHERE

                                AND THE

              SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                           SEPTEMBER 13, 2011

                               __________

                           Serial No. 112-60

                               __________

        Printed for the use of the Committee on Foreign Affairs





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

                                 ______


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                      COMMITTEE ON FOREIGN AFFAIRS

                 ILEANA ROS-LEHTINEN, Florida, Chairman
CHRISTOPHER H. SMITH, New Jersey     HOWARD L. BERMAN, California
DAN BURTON, Indiana                  GARY L. ACKERMAN, New York
ELTON GALLEGLY, California           ENI F.H. FALEOMAVAEGA, American 
DANA ROHRABACHER, California             Samoa
DONALD A. MANZULLO, Illinois         DONALD M. PAYNE, New Jersey
EDWARD R. ROYCE, California          BRAD SHERMAN, California
STEVE CHABOT, Ohio                   ELIOT L. ENGEL, New York
RON PAUL, Texas                      GREGORY W. MEEKS, New York
MIKE PENCE, Indiana                  RUSS CARNAHAN, Missouri
JOE WILSON, South Carolina           ALBIO SIRES, New Jersey
CONNIE MACK, Florida                 GERALD E. CONNOLLY, Virginia
JEFF FORTENBERRY, Nebraska           THEODORE E. DEUTCH, Florida
MICHAEL T. McCAUL, Texas             DENNIS CARDOZA, California
TED POE, Texas                       BEN CHANDLER, Kentucky
GUS M. BILIRAKIS, Florida            BRIAN HIGGINS, New York
JEAN SCHMIDT, Ohio                   ALLYSON SCHWARTZ, Pennsylvania
BILL JOHNSON, Ohio                   CHRISTOPHER S. MURPHY, Connecticut
DAVID RIVERA, Florida                FREDERICA WILSON, Florida
MIKE KELLY, Pennsylvania             KAREN BASS, California
TIM GRIFFIN, Arkansas                WILLIAM KEATING, Massachusetts
TOM MARINO, Pennsylvania             DAVID CICILLINE, Rhode Island
JEFF DUNCAN, South Carolina
ANN MARIE BUERKLE, New York
RENEE ELLMERS, North Carolina
VACANT
                   Yleem D.S. Poblete, Staff Director
             Richard J. Kessler, Democratic Staff Director
                 Subcommittee on the Western Hemisphere

                     CONNIE MACK, Florida, Chairman
MICHAEL T. McCAUL, Texas             ELIOT L. ENGEL, New York
JEAN SCHMIDT, Ohio                   ALBIO SIRES, New Jersey
DAVID RIVERA, Florida                ENI F.H. FALEOMAVAEGA, American 
CHRISTOPHER H. SMITH, New Jersey         Samoa
ELTON GALLEGLY, California           DONALD M. PAYNE, New Jersey

                                 ------                                

              Subcommittee on Oversight and Investigations

                 DANA ROHRABACHER, California, Chairman
MIKE KELLY, Pennsylvania             RUSS CARNAHAN, Missouri
RON PAUL, Texas                      DAVID CICILLINE, Rhode Island
TED POE, Texas                       KAREN BASS, California
DAVID RIVERA, Florida















                            C O N T E N T S

                              ----------                              
                                                                   Page

                               WITNESSES

Gary M. Shiffman, Ph.D., adjunct professor, Center for Peace and 
  Security Studies, Georgetown University........................     7
Andrew Selee, Ph.D., director, Mexico Institute, Woodrow Wilson 
  Center for International Scholars..............................    17
Robert J. Bunker, Ph.D., senior fellow, Small Wars Journal El 
  Centro.........................................................    24
Pamela Starr, Ph.D., associate professor in public diplomacy and 
  the School of International Relations, director of the U.S.-
  Mexico Network, University of Southern California..............    50

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Gary M. Shiffman, Ph.D.: Prepared statement......................     9
Andrew Selee, Ph.D.: Prepared statement..........................    20
Robert J. Bunker, Ph.D.: Prepared statement......................    25
Pamela Starr, Ph.D.: Prepared statement..........................    52

                                APPENDIX

Hearing notice...................................................    72
Hearing minutes..................................................    73
The Honorable Connie Mack, a Representative in Congress from the 
  State of Florida, and chairman, Subcommittee on the Western 
  Hemisphere: Prepared statement.................................    76
The Honorable Dana Rohrabacher, a Representative in Congress from 
  the State of California, and chairman, Subcommittee on 
  Oversight and Investigations: Prepared statement...............    78
The Honorable Connie Mack: Material submitted for the record.....    83

 
  HAS MERIDA EVOLVED? PART ONE: THE EVOLUTION OF DRUG CARTELS AND THE 
                     THREAT TO MEXICO'S GOVERNANCE

                              ----------                              


                      TUESDAY, SEPTEMBER 13, 2011

              House of Representatives,    
     Subcommittee on the Western Hemisphere and    
      Subcommittee on Oversight and Investigations,
                              Committee on Foreign Affairs,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:36 p.m., in 
room 2172, Rayburn House Office Building, Hon. Connie Mack 
(chairman of the Subcommittee on the Western Hemisphere) 
presiding.
    Mr. Mack. The subcommittee will come to order. I first want 
to thank everyone, especially our witnesses, for joining us for 
our hearing today.
    After recognizing myself and the ranking member, Mr. Engel, 
for 5 minutes each for opening statements, I will recognize the 
Subcommittee on Oversight and Investigations chairman, Mr. 
Rohrabacher, and the ranking member, Mr. Carnahan, for 5 
minutes each for their opening statements. We will then proceed 
directly to hearing testimony from our distinguished witnesses. 
The full text of the written testimony will be inserted into 
the record. Without objection, members have 5 days to submit 
statements and questions for the record.
    After we hear from our witnesses, individual members will 
be recognized for 5 minutes each for questions. I now recognize 
myself for an opening statement.
    And again, I want to thank the witnesses for being here. I 
want to thank the members, also, who are here and those that 
are sitting in the audience.
    Today's hearing will address the evolution of illegal 
activity in Mexico to determine if taxpayer-funded programs 
have evolved accordingly. The reality is clear, and while 
Mexico doesn't want to admit this, there is an insurgency 
taking place in Mexico along the U.S. border.
    Since 2006, Mexican drug cartels have evolved into 
resilient and diversified transnational criminal organizations. 
The drug cartels have splintered into subgroups and expanded 
operations into human trafficking, kidnapping, extortion, 
weapons smuggling, and stealing resources such as oil. The 
result: A well-funded criminal insurgency raging along our 
southern border, threatening the lives of U.S. citizens and 
harming the U.S. Economy by undermining legal businesses.
    The insurgent activities utilized by the cartel are aimed 
at undermining the government, protecting their illegal 
activity, and winning the support of the people. For example, 
one cartel has provided economic and social services in Mexico, 
and crossing over into Central America, where they build roads 
and provide housing, food, clothes, and toys to lower income 
residents in return for their loyalty. If they are unable to 
win the hearts and minds, these criminal organizations use 
extreme violence to instill fear in the population to undermine 
the Mexican Government's ability to control its territory. The 
violent display of over 40,000 deaths since 2007 is but one 
example.
    It is time that our determination to eradicate the cartels 
matches the cartels' determination to undermine the freedom, 
security, and prosperity of the United States, Mexico, and the 
Western hemisphere. The United States has an important national 
security role to play in this fight as a result of our 
proximity to, and consumption of, the trafficked drugs. 
However, President Calderon's efforts to place all the blame on 
the United States is incorrect and counterproductive. The U.S. 
and Mexico must work together in a joint effort to stop illegal 
activity across our shared border while supporting trade and 
efficiency in transfer of legal goods. We must stop the drugs 
and criminals or terrorists coming north, and the money and 
guns traveling south on our border.
    Addressing the illegal gun trade is something President 
Calderon has specifically asked us to jointly address. Little 
did we know that the U.S. Department of Justice funded a 
program called Fast and Furious that was sending guns into 
Mexico. This was an appalling, immoral act, and while we 
investigate and hold the administration accountable for 
implementing and hiding a dangerous and illegal program, we 
need to design a new, productive way forward.
    This productive way forward is not, I repeat, is not the 
Merida Initiative. The State Department's Merida Initiative, 
originally a 3-year, $1.5 billion counterdrug plan with Mexico 
has seen chronic delays and implementation challenges. The 
Obama administration's Beyond Merida has failed to set target 
dates, tangible goals, or strategic guidance to ensure the 
successful use of these funds.
    Showing up to a burning house late with a half assembled 
hose is a waste of time and taxpayer dollars. Meanwhile, the 
Mexican drug cartels continue to work in a coordinated strategy 
to undermine the Mexican state through insurgent activities 
that include violence, corruption, propaganda, asset control, 
and social and community programs. The current U.S. policy with 
Mexico does not seriously address the national security 
challenges we face.
    It is time that we recognize the need for a 
counterinsurgency strategy that can combat the evolution and 
resilience of Mexico's transnational criminal organizations. 
The United States should support a targeted, yet comprehensive 
strategy that works with Mexico to secure one key population 
center at a time in order to build and support vital 
infrastructure and social development for lasting results.
    The counterinsurgency measures must include, but not be 
limited to, an all U.S. agency plan including Treasury, DEA, 
CIA, ICE, and State to aggressively attack and dismantle the 
criminal networks in the United States and Mexico; second, 
doubling border patrol agents, fully funding needed border 
protection equipment such as additional unmanned aerial 
vehicles, and the completion of a double-layered security fence 
in urban and hard-to-enforce areas of the border; and third, 
teaching the culture of lawfulness program to ensure local 
populations support the government and the rule of law over the 
cartels.
    I look forward to the hearing today and the expert 
testimony on this topic, and it is the goal of these two 
subcommittees to advance the ball and finally have a program in 
the United States that correctly identifies the problem as an 
insurgency and, with your recommendations and others, help put 
a plan forward to combat the problem.
    With that, I would like to recognize the ranking member, 
Mr. Engel, for his opening statement.
    Mr. Engel. Thank you very much, Mr. Chairman. This is an 
important hearing on a key priority for United States foreign 
and domestic policy, and I am glad to be here with you today.
    There is no more important relationship to the United 
States and the Western hemisphere than the one we have with 
Mexico. We share a very long border, a rich and intertwined 
history, deep cultural connection, and problems which extend to 
both sides of the border. In the last several years, the drug 
trade, which had once been the domain predominantly of South 
America, has moved north. It has taken hold in Mexico and 
ravaged the northern part of Central America. If nothing else 
comes out of today's hearing, I want it to be clear that the 
United States stands with our friends in the south in their 
efforts to fight the narcotrafficking.
    We have come a long way since the Merida Initiative was 
first announced on October 22, 2007. Between Fiscal Year 2008 
and Fiscal Year 2010, Congress appropriated $1.5 billion for 
Merida Initiative programs in Mexico, with the bulk of that 
funding dedicated to training and equipping Mexican security 
forces. The program got off to a slow start, and provision of 
our assistance was halted for the first couple of years.
    I am glad to report that as of the beginning of last month, 
$473.8 million in assistance have been provided, and the State 
Department has committed to delivering another $500 million by 
the end of this year. This will include some of the big ticket 
items, four Blackhawk helicopters and a CASA 235 maritime 
surveillance aircraft.
    Today, the Merida program is moving away from expensive 
equipment to a focus on institution building through training 
and technical assistance. I think this switch in emphasis is 
critical for a number of reasons. Technical expertise is not 
only less costly than helicopters or aircraft, but it is more 
flexible and can be provided more quickly. In addition, Mexico 
has long been plagued by corruption and weakness in state and 
local institutions. I believe it is a positive sign that we are 
moving to help in this area.
    Among the areas I would like to explore further in the 
questioning are illicit weapons trafficking and the importance 
of reducing demand for illegal drugs here at home. First, I 
have long been concerned about the illegal flow of weapons 
crossing the border from the U.S. into Mexico and elsewhere in 
Latin America. President Calderon once told me that 90 percent 
of the weapons used by the drug criminals come from the United 
States. That is simply unacceptable. In fact, the Bureau of 
Alcohol, Tobacco, and Firearms once called the trafficking an 
iron river of guns. Much more needs to be done by both 
countries to halt the illegal flow of these weapons.
    Two ideas immediately come to mind, both of which are 
compliant with the Second Amendment. First, too many foreign-
style assault weapons are being imported into the United 
States, and under the law and the Constitution, we can stop 
them before they enter our country. How? We should return to 
enforcement of the Gun Control Act of 1968, which authorizes 
the President to block the import of nonsporting weapons. The 
first President Bush and President Clinton enforced the law, 
and so should President Obama.
    No new legislation is needed. This is a law on the books. 
It should be enforced. It doesn't impinge on Second Amendment 
rights. To me, it is just commonsense rights.
    I am also hoping that at some point soon the Senate will 
ratify the American Convention against Illicit Manufacturing of 
and Trafficking in Firearms, also known as CIFTA. The State 
Department has repeatedly confirmed that the United States is 
in compliance with CIFTA. Its ratification will help stiffen 
our resolve to fight illegal weapons trafficking.
    Secondly, helping Mexico combat the drug trade addresses 
only half of the problem. The other half, the demand for 
illicit, lies within our own borders. I have often thought that 
we were so busy trying to eradicate the supply side but not 
doing very much trying to eradicate the demand side. We need to 
do both.
    The original joint statement from October 2007 announcing 
the Merida program said, and I quote, ``The U.S. will intensify 
its efforts to address all aspects of drug trafficking, 
including demand-related portions.''
    Without demand for marijuana, cocaine, and methamphetamine 
here in the United States, there wouldn't be a problem in 
Mexico, Colombia, Guatemala, or elsewhere. We simply need to do 
more to drive down demand.
    Again, Mr. Chairman, I thank you for holding this hearing, 
and I look forward to the statements by our distinguished panel 
of witnesses. I yield back.
    Mr. Mack. Thank you, Mr. Engel, and I appreciate, as we 
have often said, our abilities to work together on these 
important issues. So thank you for being here.
    Now, I would like to recognize Mr. Rohrabacher for 5 
minutes for his opening statement.
    Mr. Rohrabacher. Thank you very much. Thank you very much, 
Chairman Mack. I appreciate your leadership, your willingness 
to take on some very tough issues, and you have jumped right 
into the fight in a number of areas. So I am very proud to be 
at your side.
    Today, all of our witnesses are outside experts who have 
experience working with, and studying the Merida Initiative. I 
am interested in hearing your evaluation of how Merida is 
working. Obviously our southern border poses a serious threat 
to the well-being of the American people, and it is a growing 
threat. The more attention that we pay to it, the more 
dangerous it seems; yet, we have conflicting interests as to 
what new policies should be in place to meet that challenge.
    Business interests seem to be unwilling to suffer any 
delays at the border to allow adequate inspections and 
safeguards in terms of new commerce going between our 
countries; thus, they are undermining perhaps the efforts that 
would uncover smuggling at ports of entry, and some of our own 
business interests actually see the uncontrollable flow of 
illegal immigrants as something that is positive in bringing 
down the wages that they have to pay their own people here in 
the United States. The initiative, for example, that we are 
talking about today seems silent about the border and of the 
lack of adequate barriers and controls. So what about that?
    On the other side, of course, Mexican interests, 
commercial, governmental, and criminal seem united in their 
efforts to keep the border open at all points. The U.S. ran a 
$64 billion trade deficit with Mexico last year, which means 
the outsourcing of production is almost back to where it was 
before this great recession that we are suffering, even though 
American production and jobs are not back to that level. The 
Mexican Government and those commercial interests who benefit 
by this imbalance want it to continue. Mexico also gains over 
$20 billion a year in remittances sent home by people working 
in the United States, many of whom are illegal immigrants. 
Mexico has no incentive and has shown very little cooperation 
in helping close the border to illegal immigration, even though 
in a joint statement from April, the U.S.-Mexico conference 
talked of the shared responsibilities for a common border.
    Then there is the question of criminal operations in 
dealing with drugs, weapons, and laundered money.
    This initiative is meant to help Mexico build up its police 
and judiciary, but it is the open border that provides the 
cartels with money that is used to subvert police and courts 
and to fund an insurgency, as the chairman just noted, that 
threatens to make Mexico a failed state. How much cooperation 
between Mexico and the United States law enforcement 
organizations has been evident after we have already spent $1 
billion on this program since 2008, which was supposed to 
promote such cooperation?
    So I am interested in hearing the views of the witnesses 
and what they think is the appropriate policy and analyzing 
what is going on, and we need to know if they believe there is 
any real commitment on the part of Mexico to closing our border 
to illegal activity, and does this initiative do enough to move 
Mexico in the direction of border security?
    And, finally, Mr. Chairman, let me just note that just 
beside those issues of the day, we have got some overreaching 
policies that have been with us for a long time that need to be 
addressed. One is the area of drugs which Mr. Engel noted, and 
as long as we are sending billions of dollars in drug money to 
the cartels in Mexico and throughout Latin America--we are 
sending that to them. It is coming from people in the United 
States directly to these criminal elements--I do not see how we 
are going to be able to match that or get the situation under 
control. I am interested in your opinions on that.
    And, finally, I believe that we should not just ignore one 
of what I consider to be the most serious scandals that I have 
seen in Washington during my 30 years here. I worked at the 
White House prior to this, and I have been in Congress for 24 
years, and that a bureau of the United States Government had 
sent over 3,000 weapons to the drug cartels and organized crime 
in Mexico has got to be one of the worst scandals that I have 
ever seen. We should not succumb to stepping away from this 
without demanding a full accountability and sending people to 
prison for doing this. We are talking about AK-47s, automatic 
weapons, sniper rifles--50-caliber sniper rifles sent to the 
drug cartel.
    We understand that people are trying to say, oh, well, I 
didn't do it, he did it. We need to get to the bottom of this. 
It is not our hearing today, but this is one scandal that we 
cannot just overlook, and I would like to know what your 
opinions are of how the Fast and Furious Program and this 
disclosure, what does that mean in terms of our relations with 
Mexico and trying to get this situation under control.
    Thank you very much, Mr. Chairman.
    Mr. Mack. Thank you, Mr. Rohrabacher, and I would now like 
to recognize Mr. Carnahan for 5 minutes for an opening 
statement.
    Mr. Carnahan. Thank you, Mr. Chairman. I want to just add 
my thanks to our chairs and my fellow ranking member that is 
here and the work that they have done on this issue, and I want 
to make just a few brief remarks and say that the time is right 
for Congress to be reviewing the success of the initiative to 
see what next steps are needed to improve it.
    At its core, this Initiative acknowledges the challenges in 
Mexico and Central America that are in our direct interests to 
solve. My home State of Missouri continues to be plagued by a 
multitude of problems associated with meth, and continues to be 
one of the hardest hit States in our country year after year. 
We need to continue to attack this problem from all angles, 
both domestic and international.
    According to the National Drug Intelligence Center's 2010 
National Drug Threat Assessment, ``Methamphetamine availability 
in the U.S. is directly related to methamphetamine production 
trends in Mexico, which is the primary source of 
methamphetamine consumed in the United States.'' While 
availability has previously declined, it began to rise again in 
2008 and 2009. I specifically would like to hear the panel's 
testimony if these trends are continuing and the success of the 
initiative regarding meth.
    So, again, thank you all for being here, and with that Mr. 
Chairman, I yield back.
    Mr. Mack. Thank you, Mr. Carnahan.
    And, now, I would like to introduce the witnesses quickly. 
First, Dr. Gary Shiffman. Dr. Shiffman is a professor for the 
Center for Peace and Security Studies at Georgetown University. 
Prior to teaching, Dr. Shiffman was the chief of staff at the 
U.S. Customs and Border Protection, and additionally, Mr. 
Shiffman is a U.S. Navy veteran. And just as a side note, Mr. 
Shiffman is someone who I think this committee can rely upon. 
He has got a great, vast knowledge of topics and he is a very 
thoughtful person. So I appreciate you being here, Mr. 
Shiffman.
    Second, Dr. Andrew Selee is the director of the Woodrow 
Wilson Center's Mexico Institute which promotes dialogue and 
understanding between the United States and Mexico. 
Additionally, Dr. Selee is a professor of government at John 
Hopkins University in the advanced academic programs.
    Third, Dr. Robert Bunker is a senior fellow for the Small 
Wars Journal. Dr. Bunker previously served as the chief 
executive officer of the Counter OPFOR Corporation and was a 
professor for the national security studies program at 
California State University, San Bernardino. Welcome.
    And finally, Dr. Pamela Starr is the director of the U.S.-
Mexico Network at the University of Southern California--Go 
Gators. Sorry. I hope my wife's watching. Additionally, Dr. 
Starr is an associate professor in public diplomacy and a 
university fellow at the USC Center of Public Diplomacy. Thank 
you for being here.
    I would like to recognize Dr. Shiffman now for 5 minutes 
for his opening statement.

STATEMENT OF GARY M. SHIFFMAN, PH.D., ADJUNCT PROFESSOR, CENTER 
     FOR PEACE AND SECURITY STUDIES, GEORGETOWN UNIVERSITY

    Mr. Shiffman. Chairman Mack, Chairman Rohrabacher, and 
Ranking members Engel and Carnahan, thank you very much for the 
opportunity to appear before you today to testify on the nature 
of violence taking place in Mexico today. I want to 
particularly thank this committee for its leadership bringing 
needed attention to the serious nature of the drug trafficking 
organizations in this hemisphere and their impact on U.S. 
national security.
    Drug cartels are businesses run by individuals with 
specific goals most often related to power and wealth. It is 
important to understand the profit motive before discussing the 
violence. The drugs being trafficked by the kingpins represent 
a commodity, something to trade in order to create wealth and 
power. It is not the psychoactive impact of the commodity that 
the drug traffickers seek, simply the ability to sell for a 
profit. And violence is a byproduct of the nature of the 
marketplace in which they operate when individuals can take 
coercive power to extremes. As Michael Corleone calmly says to 
his hothead brother Sonny in Mario Puzo's ``The Godfather,'' 
``It's not personal, Sonny. It's strictly business.''
    Let me make three brief points in summarizing my testimony. 
First, while the organized violence in Mexico may seem complex, 
it makes sense in the context of a battle between and among 
government and outlaw forces for the hearts and minds of local 
populations, sometimes we call this an insurgency. Second, once 
accepted, this insurgency framework can simplify the narrative 
of events taking place in Mexico. And finally, with this 
enhanced understanding, we can create better policies. So let 
me say at the outset, however, that I have been a supporter of 
Merida, but I agree with the desire to improve its 
implementation. In addition, I also support the efforts of 
President Calderon in Mexico.
    I think it is important to note that countless brave and 
dedicated people in the United States and in Mexico have been 
working tirelessly to defeat the drug trafficking 
organizations, and we must recognize and commend those people.
    My first point: Complex threat vectors. Since 2006, as the 
chairman said, nearly 40,000 people have been killed in Mexico 
as a result of drug-related violence. More recently, on 
February 15, 2011, members of the Zeta cartel, for example, 
ambushed two ICE agents driving in northern Mexico, 
unfortunately killing Special Agent Jaime Zapata. The common 
denominator among all of these cases of violence is not the 
drugs specifically, but the environment, the environment where 
people have the means and capability to use violence as a tool 
to advance their goals. We must address this environment that 
allows for the widespread use of extreme violence. Countering 
violence in Mexico requires diplomacy, intelligence, military, 
economic, and law enforcement capabilities.
    Second, understanding the Mexican insurgency. The drug 
trafficking organizations, in fact, behave like an insurgency. 
In order to perform the business functions of a drug 
trafficker, one requires the ability to govern. Specifically, 
one would need resources, a place of business, a workforce, the 
ability to set and enforce rules, and the consent of the 
governed to abide by those rules.
    The consent comes from the application of two tools: The 
provision of goods and coercion. As a drug trafficker, one 
would need political control, and as the state seeks to prevent 
that control, we could see a violent battle for political 
dominance of a location, an insurgency. Academics typically 
define a state as the institution with a monopoly control over 
the tools of violence. Clearly, the Government of Mexico lacks 
that control in some places.
    The organizations, the drug trafficking organizations 
provide economic goods, social services, and jobs, as well as a 
social safety net. Simultaneously, they use violence and the 
threat of violence to coerce law enforcement, the population, 
and their enemies. The drug trafficking organizations use 
violence to flex their muscles, for example, the killing of ICE 
Agent Zapata, to coerce the local population and to battle each 
other and the Mexican Government for political control.
    Implications for U.S. policy. The profit motive allows us 
to clearly see that insurgent-type behavior will take place 
when expected revenues exceed expected costs. Our policies must 
increase the cost of doing business for drug traffickers. Where 
the kingpins earn--today the kingpins earn the acquiescence of 
a local population, we want to see a strong support for the 
rule of law, security, and economic freedom. We must focus on 
the vicious cycle of the slow defeat of the Mexican authorities 
across local communities.
    U.S. officials must accept the state of insurgency taking 
place in large parts of Mexico today and envision the 
counterinsurgency strategy to combat the evolution and 
resilience of the transnational criminal organizations 
operating on the border. In classic counterinsurgency theory, 
the battle space is not geography but the population, and only 
the Mexican Government can defeat these cartels. We must 
support the Mexican Government in these efforts.
    And I will withhold the rest of my comments for the 
question-and-answer period.
    Mr. Mack. Thank you very much, Dr. Shiffman.
    [The prepared statement of Mr. Shiffman follows:]

    
    
                              ----------                              

    Mr. Mack. Dr. Selee, you are recognized for 5 minutes.

 STATEMENT OF ANDREW SELEE, PH.D., DIRECTOR, MEXICO INSTITUTE, 
        WOODROW WILSON CENTER FOR INTERNATIONAL SCHOLARS

    Mr. Selee. Thank you, Chairman Mack. Thanks for the 
invitation to be here. Thank you, Chairman Rohrabacher. I want 
to recognize Ranking Member Engel, Ranking Member Carnahan, and 
the other members who are here. Congressman Payne, good to see 
you again. We share a past association with the YMCA. It is 
always great to see you in things outside of politics and 
policy.
    There are few, if any, countries that matter more for the 
future of the United States than Mexico. It is our neighbor. We 
share a 2,000-mile border. It is our second destination for our 
exports. It is a state that matters economically, not only to 
Arizona and Texas and California and New Mexico but to States 
like Nebraska and Iowa and Indiana and New Hampshire, Michigan, 
and many other States far away from the border. It is an 
important trading partner. It is the country of heritage for 
one in 10 Americans and it is our ally on numerous issues of 
global concern from climate change to fighting terrorism.
    Mexico is facing an unprecedented spike in violence, 
spurred by the power and ruthlessness of organized crime groups 
that traffic illegal narcotics into the United States, and 
these groups, as the chairman has said, receive billions of 
dollars from U.S. consumers for these illegal sales, about $6 
billion to $9 billion in profit, about half of that in cocaine; 
about 20-30 percent in methamphetamine and heroin; about 20-25 
percent in marijuana, for parenthesis.
    Just to put this in perspective, we should say that Mexico 
has a much lower crime rate than El Salvador, Guatemala, 
Venezuela. It has a lower crime rate than Colombia or Brazil 
where the next Olympics will be held. That said, there are 
places in Mexico where the violence is extreme. There are 
places where the violence is critical. We saw a casino fire 
that took 52 innocent lives a couple of weeks ago in Monterrey, 
and this is serious business. We have both ethical and 
strategic reasons for being concerned about this as the two 
chairs have said. This is a circular trade. It is our consumers 
that fund this violence, but it is also a strategic violence. 
This is a country on our border and Mexico's ability to 
strengthen rule of law impacts us. Its ability to grow the 
economy impacts us.
    So I would like to throw out four ideas that I think we can 
work on in partnership with the Government of Mexico. Like Dr. 
Shiffman, I want to say that I have also been a supporter of 
Merida. The Wilson Center takes no position on this, but 
personally, I think have been a supporter of Merida, but I 
think there are four ways that we could be looking at shifting 
our strategy that would be very helpful.
    The first of these is to think about developing a strategic 
plan for intelligence sharing that reduces violence. Our 
strategy and strategy of the Government to Mexico to date has 
been to go after these organizations organically, try and take 
down criminals wherever they can find them, and by all means we 
should always capture criminals wherever we can find them. But 
in terms of giving priority, we should do--increasingly, we 
should work with Mexico to develop the capacity to go after the 
worst groups first. The organization--the trafficking 
organizations that kill civilians, that kill mayors, that are 
willing to take on the military and execute Army officers, that 
kill journalists--which has become an increasingly large 
problem--that kill children and innocent civilians with no 
regard for life, these are the worst organizations. We should 
prioritize where the killing is worse, okay.
    And this may sound like obvious things. This is what we do 
in the United States to a large extent, but instead of thinking 
about how we take down all these organizations, how we go after 
the most violent organizations, and we make an example every 
time that they do something like this, every time the worst 
kind of violence that destroys the civic texture of 
communities, that destroy innocent people's lives and that go 
against the state, we should be making an example of this, and 
we should help the Mexican Government.
    There are two places where we have done this, in Tijuana 
and Ciudad Juarez, where we have worked very closely with the 
Mexican Government to look at how we reduce violence, 
specifically where it is not just going after the top of the 
cartel, but looking at how we take apart the whole structure of 
the most violent organizations. What we have seen is that 
violence has dropped dramatically in Tijuana, right across from 
San Diego, dramatically over the past 2 years. And Ciudad 
Juarez is down considerably but we still have to see if that 
holds.
    Violence has now shifted to other parts of Mexico actually, 
but this is something we have to do systematically. 
Intelligence sharing has been key to this, and our ability to 
share intelligence, but share intelligence in a strategic way, 
not just when we get information on the traffickers, but to sit 
down and figure out who are the targets that we should be going 
after with the Mexican Government is critical.
    Secondly, how do we map and target the trafficking 
organizations in the United States? The chair has already 
referred to this. We do not actually have a good mapping of how 
these organizations operate once they cross the U.S. border. We 
need to develop the map that allows us to know particularly how 
they move their money, as well as how they move weapons, but 
money critically. We need to see if we can get Treasury to do 
the same kind of things they have done on counterterrorism to 
do this on drug trafficking, begin to track how they move their 
money, and because sometimes they use bulk cash, ICE and DEA 
and local law enforcement--their local law enforcement are 
absolutely critical also in tracking the money.
    Third, support reforms for police, prosecutors, and the 
courts. I am convinced that this is something that Mexico has 
to do. It is something we cannot do. The other we can do. We 
can certainly--sharing intelligence, mapping the traffickers in 
the U.S., this is under our control. In terms of police, 
prosecutors, and the courts, this is really on Mexico, but 
there is a lot we can do. Here, the Merida Initiative is 
critical, supporting the change agents within the Mexican 
Government and outside the Mexican Government that are trying 
to clean up the police, that are trying to support the courts, 
who are trying to change the courts, who are trying to build a 
real prosecutorial system. The Merida Initiative has been very 
useful in funding projects that the Council of State 
Governments, the Conference of Western Attorneys Generals that 
have been doing this, as well as a number of--great deal of 
working with Federal and State authorities.
    And finally, let me just say reducing the consumption of 
illegal narcotics, we are not going to start a huge new crusade 
on this in the U.S., but there are certain things we know that 
work. Eighty percent of the hard drugs--80 percent of the 
profits of the cartels are hard drugs; 80 percent of the 
consumption is 20 percent of the users. Most of these folks are 
in the criminal justice system. We know there are a number of 
things that work, like Project Hope did in Hawaii, like drug 
courts that can be very effective in investing to try and take 
care of that population. It is a small population of people 
that is driving this trade, and we need to focus on those 
people.
    Thank you, Chairman.
    Mr. Mack. Thank you, Dr. Selee.
    [The prepared statement of Mr. Selee follows:]
    
    
    
                              ----------                              

    Mr. Mack. Dr. Bunker, you are recognized for 5 minutes.

STATEMENT OF ROBERT J. BUNKER, PH.D., SENIOR FELLOW, SMALL WARS 
                       JOURNAL EL CENTRO

    Mr. Bunker. Thank you, sir.
    It is great privilege to provide testimony before the 
esteemed members of the House Foreign Affairs Subcommittee on 
the Western Hemisphere. I will quickly paraphrase the high 
points and takeaways for the subcommittee.
    We need this basic premise to be clear: That Mexico is 
facing something way beyond an organized crime threat. With 
this as a premise from which it starts, this congressional 
testimony will posit that the Merida Initiative, as it stands, 
is too myopic in nature, given the on-the-ground realities 
currently present in Mexico. These two contentions will hereby 
be discussed in more detail and their merits supported by 
evidence from my own work and that of other subject 
specialists.
    Of necessity, therefore, this testimony will focus upon the 
broader security environment and the policy and strategic 
levels of analysis. It integrates writings that I have done 
previously, both on my own and in collaboration with my 
colleague, John Sullivan, a law enforcement officer, and others 
on this topic. The analysis is divided into two sections 
addressing first the narco-criminal threat and then 
governmental policies. Each section, in turn, is divided into 
two main themes.
    Within the first section of narco-criminal threat, the 
themes that I addressed were the increasing cartel and gain 
evolution toward new warmaking entities. The second is the rise 
of both criminal and spiritual insurgencies; hence, societal 
warfare starting to break out in Mexico.
    The second section that I address was governmental 
policies. I went back about 30 years, and there is essentially 
an ongoing cycle of countermoves and unintended consequences, 
second order effects, stemming from our own and allied 
governmental policies in this area. The second is the myopic 
nature of the Merida Initiative versus the need for a Western 
hemispheric strategy against cartel and gangs.
    Time limitations restrict me from detailing these themes. 
Hopefully, you have reviewed my written arguments and analyses 
and have found them to have merit.
    The key policy suggestion that I offer is this: Due to the 
evolution of the cartels and gangs into new warmaking entities, 
the rise in new forms of criminal and spiritual insurgencies 
promoting societal warfare, and the ongoing cycle of 
countermoves and unintended consequences confounding our own 
and allied governmental policies, the Merida Initiative and 
others like it directed at Colombia and Central America need to 
evolve to a more encompassing scope and scale and with a 
greater sense of strategic urgency than most congressional 
policymakers might a priori think is necessary.
    Following the 10-year anniversary of 9/11, the key 
strategic insight that I offer is this: Without a new strategic 
imperative for the United States, which requires the 
realignment of our national threat perceptions, is needed. This 
is very serious, folks. The cartels and narco-gangs of the 
Americas, with those in Mexico of the highest priority, must 
now be elevated to the number one strategic threat to the 
United States. While the threat posed by al Qaeda and radical 
Islam is still significant, it must be downgraded presently to 
that of secondary strategic importance.
    Thank you, sir.
    Mr. Mack. Thank you, Dr. Bunker.
    [The prepared statement of Mr. Bunker follows:]
    
    
    
                              ----------                              

    Mr. Mack. Dr. Starr, you are recognized for 5 minutes.

STATEMENT OF PAMELA STARR, PH.D., ASSOCIATE PROFESSOR IN PUBLIC 
 DIPLOMACY AND THE SCHOOL OF INTERNATIONAL RELATIONS, DIRECTOR 
 OF THE U.S.-MEXICO NETWORK, UNIVERSITY OF SOUTHERN CALIFORNIA

    Ms. Starr. Thank you, Chairman Mack, and thank you, 
Chairman Rohrabacher as well, and Ranking Members Engel and 
Carnahan for the invitation to address the committee members 
today.
    I would like to look a little bit more at the background of 
the issue and look at how the situation in Mexico has changed 
on the ground since the initiation of the Merida Initiative and 
how that then--what lessons that tells us how about we need to 
think about changing the Initiative itself so that it more 
effectively addresses the situation on the ground.
    Mexico has long been a source for illicit drugs entering 
U.S. markets. This is nothing new, but it is only in the last 
generation that this cross-border contraband trade has given 
rise to organized crime syndicates that threaten Mexican 
national security and pose the single most important criminal 
threat to United States' well-being.
    The forces that produce these criminal organizations are 
many. They include obviously demand for the products they 
produce in the United States and a good operating environment 
in Mexico. But another key factor, without a doubt, has been 
the previous successes of U.S. anti-drug policies at closing 
the transshipment routes through the Caribbean Sea, at helping 
Colombia disarticulate its drug cartels, and most recently, at 
closing down meth labs in the United States. These successes 
ultimately rerouted Andean cocaine destined for the U.S. 
through Mexico. They shifted control over these transshipments 
to Mexican drug cartels, and they opened the new markets to 
these cartels to supply the U.S. market for meth.
    At the same time that the power of the Mexican cartels 
consequently grew, Mexico democratized. While democratization 
in Mexico is undoubtedly a very good thing, it distracted 
Mexican politicians from a brewing national security problem, 
and it weakened a previously all-powerful Presidency without 
creating democratic institutions to take its place. Instead, 
democratic Mexico inherited from generations of authoritarian 
rule profoundly weak law enforcement institutions: Police, 
prosecutors, courts, and jails.
    When President Felipe Calderon launched his Federal 
offensive against Mexican drug trafficking organizations in 
2006, he thus faced a formidable adversary with a limited 
supply of policy tools. The Merida Initiative was designed at 
Mexico's request to help address this challenge. Mexico's anti-
cartel strategy relied on its military and incipient 
professional Federal police force to disrupt the operational 
capacity of the Mexican cartels by targeting their leaders and 
other critical employees. The United States assisted this 
effort by providing material, equipment, intelligence, and 
police training.
    Mexico's Merida supported fight against organized crime has 
registered significant successes, but these successes have 
modified the operating environment in Mexico, making the 
shortcomings of the strategy that were always there 
increasingly evident. Four changes in this operating 
environment stand out in particular.
    First, to an important extent, this strategy is 
successfully, albeit gradually, transforming a national 
security challenge in Mexico into a policing problem, but as it 
does so, the acute weakness of Mexican law enforcement is 
increasingly placed on full display.
    Second, success at weakening some crime syndicates seems to 
have emboldened their competitors, reinforced existing 
rivalries, and thereby provoking further violence. Indeed, the 
vast majority of violence in Mexico is cartel-on-cartel.
    Third, criminal organizations with a weakened capacity to 
transport drugs into the United States because of the Mexican 
Government's efforts have increasingly moved into retail drug 
sales in Mexico and other lines of business including 
extortion, kidnapping, armed robbery, human smuggling, and 
such.
    But fourth and most troubling, the weakened crime 
syndicates did not turn into disarticulated criminal gangs as 
was hoped. They, instead, have morphed into international 
criminal networks whose structure is more amorphous than in the 
past, whose operational capacity is less susceptible as a 
result to strategies designed just to take out key operatives. 
This is challenge to which Mexico, with our support, must now 
respond. It is, above all, a law enforcement problem. It is not 
a military problem, and it is one which now extends well into 
Central America. It, thus, requires law enforcement solutions: 
A redoubled emphasis on police training, especially at State 
and local levels where law enforcement is extremely weak, and a 
significantly expanded effort to improve the quality of Mexican 
legal and penal systems, and Merida must expand its efforts to 
address a now well-established operation of Mexican criminal 
networks in Central America.
    We need to mend Merida. We do not need to end the program. 
Our long-term national security depends on this success.
    Thank you, Mr. Chairman.
    Mr. Mack. Thank you, Dr. Starr.
    [The prepared statement of Pamela Starr follows:]
    
    
    
                              ----------                              

    Mr. Mack. We now will move into questions, and I recognize 
myself for 5 minutes.
    I think, just to give a kind of little premise here, I 
think all of us, everyone, recognizes the importance of our 
relationship with Mexico, the shared responsibility that we 
have to the citizens of the United States and to Mexico and to 
the hemisphere. I think one of the things that at least I am 
looking at is where have we been and what is it that we are 
trying to accomplish and have we defined the problem correctly, 
because if you don't define the problem correctly, you can't 
put a solution to it unless you understand the problem, and 
that is really what we are charged with hopefully today.
    So my first question is this--and I will ask it of Dr. 
Shiffman. I am used to calling you Gary, but I guess for today 
I will call you Dr. Shiffman. The Mexican's transnational 
criminal organizations have become much more resilient since 
2007 when Mexican President Mr. Calderon announced his campaign 
on the drug trafficking. They have diversified and expanded 
their operation into a wide variety of illicit activities such 
as human smuggling, the sale of stolen oil, extortion, weapons 
trafficking, kidnapping, sex trafficking, and cyber crime. The 
Mexican transnational criminal organizations have also 
organized, strengthened, and expanded their operations into 
Central America. So the first question is simple. Do you 
believe that the Mexico's governance and rule of law is 
threatened, and if so, is it more in jeopardy today than it was 
in 2007?
    And before you answer, again, I am trying to get to this 
idea that the difference between just the illegal drug activity 
that is happening and now into a insurgency and what that 
definition of insurgency is and what it means. So Mr. Shiffman, 
if you could maybe answer that.
    Mr. Shiffman. Thank you, Mr. Chairman, and first of all, 
the testimony you received today is excellent. I congratulate 
everybody else. I think they have laid down really a nice 
predicate for what you are trying to accomplish.
    The argument that I am trying to give you today is that 
these are complex businesses. Now, the amount of money at stake 
is so large and so significant that there is actual significant 
threat to the Government of Mexico today that didn't exist or 
not to the same degree in 2007. So the basic answer to your 
question is, absolutely, things are in a condition today in 
Mexico that we have to take very seriously. We must elevate it 
for all of the reasons that the rest of the panelists said.
    There is oftentimes this hesitance to use the word 
``insurgency'' so I just described it. What you have over large 
parts of the Mexican population is this battle for political 
control. So somebody wants to control the political space. 
Whoever controls the political space can operate freely. So, if 
the drug cartels can make billions of dollars operating if they 
just control the political space, the political sphere, then 
that is what they are going to fight for.
    So, as Dr. Starr just said, she made a really important 
point. In the past, it may have been the drug cartels fighting 
against local governance. What you see now oftentimes is cartel 
versus cartel. That means that the government is not even 
relevant anymore, and it is just cartel-on-cartel fighting for 
who gets to control that turf. Whoever gets to control the turf 
gets to use that turf to run their businesses. They can raise 
money, they can traffic their drugs, they can do their 
recruiting, training. They can really run their base of 
operations, but you need the political control first, and that 
is often called an insurgency. I don't have a problem saying 
that that is what is going on across large parts of Mexico.
    Mr. Mack. Thank you. Dr. Selee.
    Mr. Selee. I think we may actually be misdiagnosing the 
problem a little bit. Let me say that have had this discussion 
with colleagues in the Mexican Government who are also 
beginning to rethink this and with people in the U.S. 
Government. I think we tend to think of a sort of six or seven 
large organizations that run drugs to the United States, they 
are giant organizations, they have lots of people working for 
them. I think, actually, these are much smaller groups, much 
more compact groups. They control about 1 percent of Mexican 
GDP, but they are divided among these sort of six groups and 
then there is a bunch of smaller groups that do heroin. The 
groups that do kidnapping and extortion may or may not actually 
belong to the cartel. They probably give them some money. They 
often use their name, but these are actually loose criminal 
networks of people, and the reason why this is important----
    Mr. Mack. I apologize, but my time has expired, and so 
hopefully we will be able to get to it, but I want to try to--I 
have got to set an example by keeping my----
    Mr. Selee. I am not sure that makes them any less 
dangerous, but I think it has implications we will talk about 
later.
    Mr. Mack. Thank you. Mr. Engel is recognized for 5 minutes 
for questions.
    Mr. Engel. Thank you, Mr. Chairman.
    Any of the panelists that would like to respond to this, I 
would like to hear what you have to say. Reports have indicated 
that one unplanned positive benefit of the Merida Initiative 
has been the closer cooperation and deeper trust between the 
U.S. and the Mexican Governments. There appears to be more 
information sharing and a strong partnership with Mexico in the 
fight against drug trafficking. Could any of you further 
characterize the existing level of cooperation with Mexico? Do 
these changes extend beyond the breadth of the working 
relationship we have with the various Mexican ministries and 
agencies, or are they solely at the top levels of these 
agencies?
    The reason I ask that is because is this new cooperation 
sufficiently institutionalized or do you see it changing when 
President Calderon finishes his term? Dr. Selee.
    Mr. Selee. Thank you, Congressman Engel. I think this has 
sunk down within the administration. Dr. Shiffman can correct 
me if I am wrong since he was been at DHS in a past life, but I 
think this is--actually I hear talking to people on both sides 
a great deal of respect at a much lower level in the 
administration, which I think bodes well for future 
cooperation, which doesn't mean there is not going to be 
hurdles in the future, because I think any new Mexican 
Government is going to be a little bit more skeptical of going 
after--of being publicly identified with the United States, but 
I think the cooperation is actually fairly deep.
    And just to finish an earlier point, I think there is a 
larger concern of rule of law in Mexico. There is a larger 
concern of violence. Much of the violence is not about drug 
trafficking; it is about other sorts of things. And it is not 
necessarily Chapo Guzman, or the leader of the Zeta's, one of 
the two leaders, saying go kill someone over this corridor. A 
lot of it is petty things over extortion. A lot of it is petty 
things over kidnapping. I mean, petty, it is human lives here, 
but these are things that are not sort of part of an actual 
narrative of we are going to go out and traffic billions of 
dollars. People are getting killed over small amounts of money 
in some way. So it is a larger question of rule of law in 
Mexico. I think we need to focus on that cooperation.
    Mr. Engel. Dr. Shiffman, do you agree with the level of 
cooperation between Mexico and the U.S.?
    Mr. Shiffman. We need to identify those advocates within 
the Mexican Government that are willing to take this battle on. 
They exist from the local level all the way through the 
Presidency. Whoever the next President is, we need to make sure 
that the United States is endorsing and working with those 
people.
    Mr. Engel. Thank you. I want to ask you about the comment I 
made before about reducing job demand in the United States. 
Tell me what you feel about the job we are doing. I don't think 
it is a stretch to say that if we didn't have drug demand in 
this country we would have a much less significant narco-
criminal problem in Mexico, Colombia, or elsewhere. There was a 
joint statement when we initiated Merida ability tackling that 
part of the problem as well. Are we living up to our original 
commitments in the Merida joint statement? Anyone who would 
like to comment on that? Dr. Starr.
    Ms. Starr. I think it is true that there has been a change 
of emphasis during the Obama administration in terms of our 
drug control strategy. So it has become a strategy that, while 
still heavily emphasizing limiting supply available to drug 
users, it has increased its emphasis on trying to limit demand, 
and in fact, the selection for the national drug czar was 
designed to send that message very clearly; there was a going 
to be a change in emphasis.
    That said, I don't think the change of emphasis has been 
sufficiently pushed forward. The United States, we know how to 
deal with addiction to drugs and to minimize the use of it. Our 
anti-smoking campaigns demonstrates that we know how to reduce 
demand for addictive drugs, and if we put our minds to it and 
put together a really strong public relations campaign, I think 
we can do the same thing.
    That said, we will never eliminate demand for illegal drugs 
and, therefore, will never fully eliminate this issue in 
dealing with the trafficking organizations that deal in drugs. 
That is always going to be an underlying factor as long as 
people want to use illicit drugs, and indeed, they always have 
and always will.
    Mr. Engel. Thank you. I want to try to get one last 
question in, and that is about CIFTA. Do you think that the 
Senate should ratify this treaty? Are we in compliance with it? 
And to what extent are arms trafficked from the U.S. into 
Mexico and then further trafficked to Central America? Dr. 
Bunker.
    Mr. Bunker. Yes, sir. The analysis that I have done 
recently with another colleague was about 20 percent of the 
arms Mexico, the cartels are getting, come from the United 
States. The bulk of the arms come from Central America, from 
the international arms market, and also from Mexico itself, 
from law enforcement personnel that have defected, and also 
from some military stores. So I think there is more to this 
than we understand.
    Mr. Mack. Thank you. And now I would like to recognize Mr. 
Rohrabacher for 5 minutes for questions.
    Mr. Rohrabacher. Thank you very much, Mr. Chairman.
    Let me just note for the record that the scourge of 
kidnapping in Mexico is not petty. In fact, it is something 
that is horrendous and affects the lives of people who are 
trying to lead that country and that whole region into a better 
era, and we have some people who I have met personally with who 
have been victimized by this, and it is systematic, and it is, 
in fact, transnational in its nature and just as the drug 
cartel is. And let me just note, Chairman Mack has agreed that 
we will be having hearings into the transnational nature of 
kidnapping and other crime in Mexico in the near future where 
we will be focusing on not just what is going on in Mexico but 
the contacts with other countries that are part of this 
criminal network. That is number one.
    Number two about intelligence sharing. I don't want to 
sound skeptical, but I have been deeply involved over the last 
30 years with Pakistan, and I have come to the conclusion that 
we have been patsies for Pakistan, and that when we share 
intelligence with Pakistan, we end up tipping off the people 
who we are actually trying to fight against.
    Do any of you disagree with me that there is a high 
likelihood that as we cooperate with intelligence with our 
Mexican counterparts that some of them may well just be giving 
that information to the cartels? Anyone doubt that? Go right 
ahead.
    Mr. Selee. Absolutely. By the way, let me agree with you 
that it is not petty. What I was referring to is that there is 
a larger question of criminality, with the idea that violence 
is--everyone is being killed over $2 billion deals or $2 
million deals. Much of this is over a $500 ransom. I know, too, 
people who have been kidnapped and officers killed.
    Mr. Rohrabacher. Right.
    Mr. Selee. So I mean not to say the killing is petty, but a 
lot of the violence is generalized. It is not always the fight 
between the cartels. There is a larger question of violence 
going on in Mexico.
    Yes, intelligence is often wrongly used, and it is often 
wrongly used within the administration. It is one of the 
frustrations of the people who are trying to do the right thing 
in the Mexican Government that sometimes when they share it 
with their colleagues they find that it----
    Mr. Rohrabacher. Or actually when we get directed, for 
example, some genius just took the--I guess the advice that 
they could ship 2,000 AK-47s and sniper rifles to the drug 
cartels and that that would be a good way that we could see who 
really is benefiting from the arms trade.
    Mr. Selee. Chairman, if I could say, I think the evidence 
is when you talk to people in U.S. law enforcement agencies 
that they feel that there has been increasingly channels that 
are trustworthy most of the time that have been successful at 
getting some of the people they want to target.
    Mr. Rohrabacher. Okay.
    Mr. Selee. It is far from fail safe. It is far from 
perfect. My favorite comment came from frontline cops in San 
Diego. Actually we talked to them about their relationship with 
some of the police in Tijuana, and they said, look, our 
evidence is that more often than not when we give them evidence 
now, the right thing happens. Not all the time, but more often 
than not.
    Mr. Rohrabacher. Okay. I got the answer.
    Let me just note whatever problems we are talking about, 
this is not a partisan issue. It is not a partisan issue at 
all, and let me know perhaps what I believe is one of the worst 
undermining of our efforts to control our borders happened 
under the last administration when Ramos and Compean, two 
Border Patrol agents, were arrested and put through hell for 
stopping a Mexican drug dealer from coming across the border.
    And I guess I will ask this question, but obviously, it is 
to be taken as not necessarily as a serious point, and that is, 
I take it that you agree with me that when we arrested Ramos 
and Compean, the two Border Patrol agents, who had clean 
records I might add, perfectly clean records, thrown them into 
prison for stopping this drug mule, whatever he was, carrying 
the drugs across the border, that this was not taken as an act 
of sincerity that endeared us to the drug cartel leaders.
    I take it that you would agree with me that they didn't 
take it as sincere or they weren't--and they also weren't 
impressed with our courageous dedication to the rule of law by 
arresting Ramos and Campion. And you might agree with me that 
the drug cartels that we are talking about today looked at the 
arrest of Ramos and Campion as a sign of weakness and a lack of 
resolve on the part of our Government. So this is not a 
partisan issue. This is an issue where Republicans and 
Democrats have equally made stupid decisions. And now it is up 
to us to try to work together to put it right. And we will be 
getting down to the actual international connections that are 
making this task even more difficult.
    Mr. Mack. Thank you, Mr. Rohrabacher. And I now recognize 
Mr. Payne for 5 minutes. Welcome. Good to see you.
    Mr. Payne. Great. Good to see you. I hope you had a nice 
summer.
    Mr. Mack. Yeah, pretty good.
    Mr. Payne. Good to see the great panel. Of course, Dr. 
Selee, it is good to see you again. And you know I served on 
the committee in Geneva also. It was a great experience. And it 
is good to see you.
    I just have a question--three quick questions if I can get 
them out. One is the 25th of August, the New York Times had an 
article, ``U.S. Widens Role in Mexican Fight,'' which went on, 
of course, to say that the administration has expanded its role 
in Mexico's fight in organized crime by allowing the Mexican 
police to stage crossborder drug raids from inside the United 
States.
    And I just want to question--have any of those raids 
happened? And is there any kind of conflict in U.S. law that 
concerns constitutionality? Does anybody want to take a shot at 
that?
    Mr. Shiffman. Sir, I don't know the specifics, Mr. Payne. 
But maybe getting back to Chairman Rohrabacher's comments as 
well as yours, there is--in local levels again, there is great 
cooperation in an operational level between the U.S. and 
Mexican side. There are often local commanders that operate 
very well together. So I am sure great things are happening. 
Mexican officials, of course, have no authority inside of 
United States' borders. It would just be an information 
liaison-type role. The same thing with U.S. officials inside of 
Mexico.
    Mr. Payne. Well, they went to say it was giving the Mexican 
police the right to stage crossborder drug raids. I need to 
maybe take a look at that a little bit more. It was the August 
25th New York Times. You might want to check that out because 
it kind of stunned me a little bit also.
    Quickly, could you tell me how we measure the success, any 
one of you, of the program? It certainly can't be by the number 
of deaths, because that would mean we are failing. So how is it 
that these billions of dollars that we are allocating are--or 
when are we winning? I mean, anybody know how we can call 
success? Maybe quitting it out.
    Mr. Selee. I think you have to use two--if I can, Mr. 
Chairman, I think you have to use two sets of measures. I mean, 
one is I would look at violence because I think violence 
matters. That is what matters in people's daily lives. I think 
I would look also at whether the cartels are splintering, 
because we have said that is part of the objective. I mean, are 
they fragmenting? Some of the violence is because they are 
fragmenting. Maybe we are winning on that front but losing on 
the violence front. Maybe we have to readjust there, but we 
want both of those. We want to fragment them but we also want 
to see violence drop in people's lives.
    And then I think we need to look at rule of law because the 
larger question is they are not police, they are not 
prosecutors, and they are not courts that make it dangerous for 
armed criminals to operate with impunity. So we need to 
actually measure with our colleagues in Mexico, with our 
partners in Mexico, what is developing with the police, what 
can we measure, the Federal and State police? What has 
improved? What has improved in terms of prosecutions? Are 
prosecutions more successful than they were in the past? Are 
they moving forward on changing their court system, as they 
said they had, to a more transparent system? And are people 
actually being judged correctly in the court system? I think we 
need those measures.
    Ms. Starr. If I might just add quickly, I think we also 
have to measure based on what the Mexican Government has said 
its objectives are. And its objective from the very beginning 
has been to break down large organized crime syndicates that 
threaten the national security of Mexico into small armed gangs 
that can be managed locally and at State level with police. 
They have done that extremely well. Unfortunately, much of the 
violence is a consequence of having done that extremely well.
    And so we need to take the next step, which Dr. Selee is 
pointing out, that we need to build up the policing and law 
enforcement capacity to deal with this new kind of problem.
    Mr. Bunker. I think we have another issue when we look at 
the level of violence. You could have a plaza, a city or a 
region that has very low levels of violence. Well, basically 
one of the cartels now dominates that area. So the absence of 
violence can also be a bad thing as far as political control of 
an area.
    Mr. Payne. Okay. Thank you. I am able to get my final 
question in. I don't know how long casino gambling has been in 
Mexico. Can anybody tell me? Five years, one year? Is it 
relatively new? Do you know? Organized crime loves casino 
gambling, they tell me. And do you think that this--well, it is 
done now. But money laundering--I mean, I can see all kinds of 
negative things happening through the casinos. What do you 
think? Quickly, because I only have 10 seconds left.
    Mr. Selee. It can't be a good thing. It certainly creates 
one more area where money can disappear.
    Mr. Bunker. The cartels also make money through extortion. 
You basically pay our tax or we are going to burn your place 
down. That happens in a lot of areas in Mexico now too. So you 
should look into that issue maybe.
    Ms. Starr. I just want to say the cartels are also very 
effective at laundering their money through legitimate 
businesses such as construction, so they really don't need the 
casinos to do it.
    Mr. Mack. Thank you very much. And, Mr. Payne, thank you 
for your questions. If I can add real quick, that is--I think 
your question about what are the objectives, how do we know, 
that is very much a part of the question that we are trying to 
get at today, is, you know--I don't know that there is a clear 
understanding of what the objectives are, but certainly 
defining the problem, whether it is just a drug cartel-type 
problem or if this is an insurgency is what we are trying to 
get at, so we can work and come up with some proposal on how to 
define the objectives so we can have success. So thank you for 
that.
    Mr. McCaul is recognized for 5 minutes.
    Mr. McCaul. Thank you, Mr. Chairman.
    Dr. Shiffman, you said the direct cartels are a threat to 
the Government of Mexico. I agree with you.
    Dr. Bunker, you said that--you made a very bold statement 
that the drug cartels are the number one greatest threat to the 
security of the United States, surpassing al Qaeda. I happen to 
agree with you as well on that. Political assassinations, 
extortion, kidnappings, terrorizing the Mexican people.
    Recently President Calderon, after the casino--50 killed in 
the casino--said we are facing true terrorists who have 
surpassed not only the limits of the law but basic common sense 
and respect for life. And I would like to read from you as the 
United States Code out of Federal law, Black Law's definition 
of terrorism: ``An act of terrorism means an activity that 
involves a violent act or an act dangerous to human life that 
is a violation of the criminal laws of the United States or of 
any State or that would be a criminal violation if committed 
within the jurisdiction of the United States or of any 
State''--this is where it is important--``and it appears to be 
intended to intimidate or coerce a civilian population, to 
influence the policy of a government by intimidation or 
coercion, or to affect the conduct of a government by 
assassination or kidnapping.''
    Would all of you agree that the drug cartels fall squarely 
within this definition of terrorists? Dr. Shiffman.
    Mr. Shiffman. Sir, thank you. And thank you for all of your 
leadership on this issue through the years. The definition of 
terrorism is an act often including civilians for some sort of 
political goal. Insurgents do take part in terrorist acts, and 
absolutely it fits the definition.
    Mr. McCaul. Thank you. Dr. Selee.
    Mr. Selee. I think it is a slippery slope. I mean, I am not 
sure these are organizations involved in political acts. I 
think this is primarily about the money, as Dr. Shiffman's 
paper says actually. And this is primarily about the money. I 
think we get into a slippery slope when we start to confuse 
them with terrorists. There certainly are acts that are very 
similar, like the casino fire, to what terrorists do. But there 
are also acts in this country that are truly terrible that we 
wouldn't necessarily qualify as terrorism, right?
    Mr. McCaul. I think the tactics of decapitating people and 
burning people alive and shooting school buses is certainly----
    Mr. Selee. It is terrible and at the same time it is a 
slippery slope. I mean, this is not a clear political message 
or political intent in most cases.
    Mr. McCaul. Dr. Bunker.
    Mr. Bunker. They engage in terrorist acts, they engage in 
insurgent acts. You are also getting accidental insurgents 
where they are taking over political control of a city just 
because they have basically gotten to the point where no one is 
watching what they are doing, so now we have to, like, run this 
place. The other issue, too, is--I will just let it go.
    Mr. McCaul. And Dr. Starr.
    Ms. Starr. I am going to obfuscate a little bit. I think it 
is much more important to understand what is happening in 
Mexico than to label it. Because when we label it, we have the 
tendency of comparing it with other things that have similar 
labels. My concern about calling what is going on in Mexico 
either as terrorism or insurgency or something like that is 
then we equate Mexico with something like Afghanistan or 
Pakistan, and they are not equal in any way, shape or form. In 
Afghanistan, in Pakistan, you have terrorists, you have 
insurgents, whose objective it is to overthrow the sitting 
government. That is not the objective of organized crime 
syndicates in Mexico. They are organized crime. They want to 
make money.
    Mr. McCaul. Well, I agree with President Calderon. He 
called them terrorists. And, Dr. Bunker, it is the number one 
greatest threat to our national security.
    I introduced a bill to designate them as foreign terrorist 
organizations which would give us--as a Federal prosecutor, it 
gives us greater tools to go after them, including freezing 
these bank assets, which, Dr. Selee, I thought you gave 
excellent testimony about the role of the banks and the 
laundering of money. How complicit are the banks in Mexico with 
the drug cartels?
    Mr. Selee. I don't think we know that answer, actually. I 
mean, I think it is something we need to know and it is 
something that we need to put resources into. We put resources 
in--our Treasury Department is very good at this, into figuring 
out--and Mexico needs to put some more resources into this as 
well. I mean, we are both falling down on the job on this.
    Mr. McCaul. I have got limited time. But, Mr. Chairman, the 
idea of Treasury doing an audit would be certainly helpful to 
see how complicit they are because they are making money off 
this whole thing. There is no question in my mind.
    Last point. I got to go down with the chairman to Colombia, 
joint intelligence/military operation. It worked very 
effectively over time. We need--in the post-Merida--as we talk 
about post-Merida, we need something like that I think in 
Mexico. It is a regional concern.
    Guatemala, as we were down there, 25 farmers got their--
were decapitated by the Zetas. And that is truly a failed State 
in Guatemala. And the one point take-away I got from that trip 
and I will--is in meeting with President Santos. Colombian 
Special Forces are very well trained. He was willing to help 
Mexico with these Special Forces. When we met President 
Calderon, they are shifting from the national police to take 
over the military's operation, which I think is a right 
direction for Mexico and they have trained a lot of police 
officers. But in the short term, it seems to me that we ought 
to be using some of the Colombian Special Forces to work side 
by side with the Mexican Special Forces. They clearly would 
blend in from a cultural standpoint, language standpoint, far 
better than, say, the gringo from the United States.
    And so I hope--when we mentioned that to President 
Calderon, he had shown an interest. And the chairman and I 
mentioned this to the Secretary of State as well. And with 
that, I yield back.
    Mr. Mack. Thank you, Mr. McCaul. I would now like to 
recognize Mr. Rivera for 5 minutes for questions.
    Mr. Rivera. Thank you very much, Mr. Chairman. Thanks to 
all of you for being here.
    Dr. Selee, I would like to inquire a little bit about the 
international support for some of these transnational criminal 
organizations in Mexico. You mentioned earlier and it struck my 
attention, Chapo Guzman. Who is that?
    Mr. Selee. The head of the Sinaloa cartel.
    Mr. Rivera. The head of what?
    Mr. Selee. The Sinaloa cartel, the largest crime 
organization in Mexico.
    Mr. Rivera. And where is he?
    Mr. Selee. Oh, that is a good question. I am not privy to 
that information.
    Mr. Rivera. Is there any speculation as to if he is in 
Mexico, outside of Mexico?
    Mr. Selee. He is largely believed to be inside of Mexico. I 
think if you talk to people in the Intelligence Community, they 
would say he is in Mexico.
    Mr. Rivera. Inside Mexico. Okay. Would it surprise you if 
you were to ever receive information that he was receiving safe 
harbor from countries outside of Mexico?
    Mr. Selee. That is certainly possible. It certainly 
happened in the history of organized crime.
    Mr. Rivera. In your prepared remarks, you mentioned the 
existence of transnational criminal organizations in the United 
States and the need to map their movement as a way to track or 
stop their transactions. Can you expand a little bit on this?
    Mr. Selee. We have very good operational intelligence. We 
have excellent--our law enforcement entities, both at a State 
and local level, but also DEA, FBI, ICE, CBP and others, do a 
fantastic job of getting operational intelligence, finding 
where people are, picking them up, figuring out where a network 
in Houston is, for example. We don't do as good a job because 
we don't do intelligence as much in the United States. We have 
barriers between our Intelligence Community and our law 
enforcement community in trying to do the mapping.
    So in terms of the Zetas, for example, who we have named a 
transnational criminal organization recently, you know, knowing 
what happens to the Zetas when they come into the United 
States--who they are working with, who are their business 
partners, where do they operate, who their cells are operating 
in the United States, who do they hand off to, which gangs they 
are working with--we have fragments of this information because 
our law enforcement agencies pick up fragments of this, but we 
don't have a central depository of all of the information that 
says this is how they operate, this is where their money goes. 
There is no one who is a specialist on the Zetas in the U.S. 
Government. There are a lot of people who are specialists on 
pieces of the Zetas, but it is hard to know where the mapping 
is.
    Mr. Rivera. Does the United States Government issue any 
types of rewards or bounties for any of these cartel heads like 
Chapo Guzman? Anyone. Whoever might have information.
    Mr. Selee. I am not aware of it, but certainly some of them 
are on the 10 Most Wanted. And we do actively go after some of 
them in partnership with Mexico. And Mexico has issued 
bounties.
    Mr. Rivera. Is Chapo Guzman on the Most Wanted?
    Mr. Selee. I believe he is, actually. I don't know if he is 
in the top ten, but I believe he is, actually.
    Mr. Rivera. On the FBI Most Wanted?
    Mr. Selee. I believe he is. I could be wrong about that, 
though. So, I mean, I should check that before--do you know the 
answer to that?
    Mr. Bunker. Just a statement I wanted to make was, a few 
years ago you could be a bona fide member of the Zetas, have 
your brand on your breast, have your santa muerte tattoo, and 
you could be walking around and you basically were free to do 
whatever you want. It is amazing.
    Mr. Rivera. Any information on what we can do about going 
after--or what the Treasury Department can do about going after 
some of this drug trafficking financing?
    Mr. Selee. You have to really--do you want to----
    Mr. Rivera. Dr. Shiffman.
    Mr. Shiffman. Congressman, thank you. The thing about 
running a business, an illicit business, just like any other, 
is if you are successful, you end up with a lot of money. Now, 
you have to do something with it. And if you have ever, you 
know, seen large bulk cash, it actually takes up a lot of 
space. It is very heavy. It is a very difficult thing to deal 
with. So you have to use banks, you have to use--you have to 
use illicit movement of money. But at some point, the illicit 
money transfer organizations have to deal with banks. That is 
how you find them. It is a very complex task to do, but that is 
how you do it. Because if you are making a lot of money, you 
have got to do something with your money.
    Mr. Selee. You almost have to work in--if I can, 
Congressman--in two ways. I mean, one is--Dr. Shiffman says you 
have to work in the banking system. And we have done some 
things. I mean, Treasury has gone after Wachovia Bank, for 
example, which did not have sufficient controls on money 
laundering, never a very high fine on them, so figuring out how 
this money is getting into the U.S. financial system.
    And secondly, some of it still does go back in bulk cash 
because there is a border, there is a 2,000-mile border. The 
same people that bring drugs can bring money and guns back. So 
also ICE, FBI, local law enforcement, CBP, figuring out how 
this money is packaged.
    And if I can say something controversial. I mean, the best 
place to do border enforcement is actually far away from the 
border. Once things get to the border, they are mostly hidden. 
So if we can do border enforcement in Houston before money gets 
to El Paso, or try and catch drugs in Tamaulipas but before it 
gets to Tampico, before it gets to Matamoros, that is by far 
the best way. Which is not to say you don't do border 
enforcement, CBP does a great job of that, but most of the 
stuff is hidden by the time you get to the border. We need to 
find cash in the safe houses, drugs in the safe houses, and 
leadership and organizations.
    Mr. Rivera. Thank you, Mr. Chairman.
    Mr. Mack. Thank you, Mr. Rivera. And Mr. Poe is now 
recognized for 5 minutes for questions.
    Mr. Poe. Thank you, Mr. Chairman. Thank you for being here, 
all of you, all four doctors. The rest of us could be lawyers. 
That is an interesting combination. But be that as it may, a 
few questions.
    Mr. McCaul talked about the drug cartels being labeled as 
foreign terrorist organizations. I agree with that philosophy 
based on the current status of the law. The failed State issue 
that you all addressed. Today, which direction is Mexico 
headed, more to the failed State or getting it together? Just a 
quick opinion. Okay, Dr. Bunker?
    Mr. Bunker. I think there is another avenue and that is 
criminalized State.
    Mr. Poe. What is that?
    Mr. Bunker. That would be a State where the criminals are 
pulling a lot of the strings in the background politically. And 
you are seeing parts of Mexico that have basically lost--the 
cities are gone in that country. So it doesn't have to fail. It 
could become something else.
    Mr. Poe. It is a political environment that is controlled 
by the drug cartels in certain areas. Is that a fair statement? 
In what areas?
    Mr. Bunker. In some of your northern controlled areas with 
the Zetas and Gulf Cartel and some of your--probably your 
southern areas is relatively quiet. You have got some areas in 
Sinaloa and Michoacana also where you have issues.
    Mr. Selee. I throw out another distinction, too, which is 
think the cartels are actually less powerful than they were 5 
years ago when the Mexican Government got serious about this. 
The big cartels--I mean, these were six or seven big groups. 
What you have now is lots of small groups that are operating, 
lots of people who call themselves Zetas, that may or may not 
be, which has increased criminality.
    So it is actually not an either/or. What you have is lots 
of places--probably there is less control by these six or seven 
groups that once controlled large swaths of territory, but 
there are lots of freelancers running around controlling, you 
know, and trying to infiltrate the government.
    Mr. Poe. What do you think about that, Dr. Shiffman? Drug 
cartels, powerful, headed to a failed State--what do you want 
to call the type of government Mexico is heading to with the 
massive amount of drug influence?
    Mr. Shiffman. Things are headed in the wrong direction in a 
broad stroke, but you don't need to want to take over Mexico 
City and run the whole government in order for it to be an 
insurgency. All you need to do is be able to have a base of 
operations in which you want to run and grow your business. And 
it is becoming increasingly easy for the cartels to do that in 
Mexico. And that is what we need to be concerned about.
    Mr. Poe. So they do have political influence in certain 
areas?
    Mr. Shiffman. Absolutely.
    Mr. Poe. This national security issue for Mexico, would you 
all four agree that it is national security--is the issue in 
Mexico a national security issue for the United States? Without 
a nod, why don't you say yes or no. Just go down the list.
    Mr. Shiffman. Yes on both.
    Mr. Selee. Yes.
    Mr. Poe. Is that a yes, Dr. Starr?
    Ms. Starr. That is a yes.
    Mr. Poe. Is part of the problem the fact that the border is 
open in both directions, not just one direction? The fact that, 
you know, people and money can move north and guns and money--
or people and drugs come north, money and guns go south. I 
mean, it seems to be open in both directions. Is that part of 
something that we have to figure out here, that the border is 
open in both directions?
    Mr. Selee. Yes, although it is less a problem with the 
border than it is of the areas away from the border. I mean, 
most of what is passing through is passing through legal 
checkpoints. This is not a question----
    Mr. Poe. Ports of entry?
    Mr. Selee. Ports of entry, right. Things--the high value 
drugs are passing through ports of entry. Not exclusively, but 
a lot of them are.
    Mr. Poe. But that is on the border. Ports of entry are on 
the border.
    Mr. Selee. It is hard to seal those things. I mean, what 
you need to do is actually stop things before they get to the 
border, where it is a lot easier to get done. We continue to 
increase the--I think we should be very vigilant on the border. 
And I think it is good we have started doing southbound 
inspections. I mean, these are all good things. But we are only 
going to solve this by actually getting at the points away from 
the border where things are bundled and put together. And that 
is strategic intelligence, the kind of things that Dr. Shiffman 
was working on at CBP.
    Mr. Poe. I will try to get to a few more questions in the 
last minute. The drug cartels that operate primarily in 
Mexico--I know they operate in other places, but they also have 
operations in the United States. They don't stop at the border 
and all of a sudden turn that over to somebody else. I mean, 
the Zetas work in Mexico and then they have operatives in the 
United States that help them get rid of their drugs and then 
get the money and the guns and go back south. Is that not true, 
Dr. Shiffman, or not?
    Mr. Shiffman. It is true. And their cartels go down into 
Central America, Colombia, and other places as well. So Mexico 
is both a source of drugs but also, more significantly perhaps, 
a transshipment point. And that is where they are making their 
money.
    Mr. Poe. All right. And the last question that I have. 
Mexico has a drug problem among its population as well. 
President Calderon talks about how bad it is in the United 
States. But they have an internal problem with the abuse of 
drugs as well; is that true? That is my last question to all 
four of you. Just a yes or no is all we have got time for.
    Mr. Bunker. It is increasing.
    Ms. Starr. Yes.
    Mr. Poe. Dr. Starr?
    Mr. Selee. And one of the things is reality is this 
consumption of--local distribution in Mexico, like kidnapping 
and extortion, is probably disproportionate to the amount of 
the violence as well.
    Mr. Shiffman. [Nonverbal response.]
    Mr. Poe. All right, Dr. Shiffman, thank you. That was a 
yes. Thank you, Mr. Chairman.
    Mr. Mack. Thank you, Mr. Poe. And I want to thank the 
witnesses. I want to thank the members who showed up. And I 
would like to, if you don't mind--we don't typically do this, 
but I am going to allow Mr. Rohrabacher and myself an 
opportunity to make some closing statements. So, Mr. 
Rohrabacher, you are recognized.
    Mr. Rohrabacher. What happens in Mexico is of vital 
interest to the people of the United States and it will be 
pivotal as to whether or not we are successful here as a 
country as well. I grew up in the southwest part of the United 
States. I am a Californian, very proud of the Mexican-American 
heritage of California. And all of us who came from that part 
of the world or part of our country know that God made us 
neighbors with the Mexican people. They are our neighbors and 
we always said that God made us neighbors. But it is up to us 
whether or not we are going to be friends or not. And there is 
a great sense of loss right now in Southern California--I can't 
speak for Arizona or Texas or New Mexico--but there is a great 
sense of loss that we have lost a friend and we are losing 
friends in Mexico. I mean, I lived with a Mexican family for 3 
months when I was in high school down in Guadalajara. And I 
have spent I cannot tell you how many days and weeks of my 
life--everybody knows I am a surfer--down the coastline of 
Baja, California, and in the cantinas at night, et cetera. And 
I had many, many good friends. In fact, every time I would go 
there to Mexico, I would meet new friends because they are such 
wonderful people.
    And now the new generation of Americans in Southern 
California are not having that same experience. Our young 
people aren't going there to live with a Mexican family. Our 
young people aren't going down and enjoying camaraderie. I 
remember I spent about 2 or 3 days on a beach with a group of 
Mexican teenagers, guys, all guys my age, playing the guitar 
and drinking mescal--pretty heavy-duty stuff. I mean, those 
things aren't happening anymore and it is a very, very sad 
thing.
    I think that that relationship between Mexico and the 
United States was a treasure, and we should not let it go 
easily. We should try to recapture it, work with the good 
people, our friends in Mexico, to help drive out the evil 
forces that are taking that country and those people away from 
us as friends and family. So, anything we can do.
    One last thought. I know I--our country didn't have--drugs 
weren't illegal in our country until this century, until, what, 
1910 or something like that. These drugs were legal in our 
country. And when they made booze illegal in our country, we 
found out you couldn't do that and there were repercussions if 
you have a group of people consuming something that is illegal, 
and then all of a sudden you build up organized crime. We did 
that in the United States. Mr. Al Capone and the organized 
crime was first really developed in the United States. It was 
during Prohibition.
    Well, now we have large groups of Americans who are using 
these groups, and the side impact of that is the building up 
of, what, of organized crime unfortunately. In Mexico. And we 
need to do something about it.
    I cannot tell you what the--there is no easy answer, but we 
should be committed to that. And I will tell you that I am 
looking forward to working with Chairman Mack, who has again 
demonstrated his willingness and courage to take on some very 
serious issues.
    So thank you to the witnesses. I appreciate it. We will 
have more joint hearings on the situation in Mexico, especially 
the international elements that are at play in Mexico that need 
to be dealt with. Thank you very much.
    Mr. Mack. Thank you, Chairman Rohrabacher. It is always a 
pleasure to work with you, and I learn something new about you 
at every hearing.
    A couple of things, if I could. First of all, I wanted to 
just quickly mention--and unfortunately my good friend, Mr. 
Engel, is not here. But we keep hearing this number, this 90 
percent of the guns are coming from the United States. That is 
just false. When we had a hearing not too long--well, it might 
have been a year or 2 or something like that ago. And the 
person who did this report admitted that it was 90 percent of 
the guns that they could trace, and it was only the U.S. guns 
that they could trace. I think the issues that we need to deal 
with in Mexico, we need to not let this continue to be part of 
the equation because it is just not--it is just not true.
    A couple of things. We talked a lot about the criminal 
activity of the cartels and whether or not Merida has been 
successful in kind of dismantling or breaking them apart into 
smaller organizations. But some of the things that we know are 
true is that these--this criminal insurgency is doing more than 
just the drug trafficking and violence. They are putting on 
fairs for kids, trying to win the hearts and minds of the 
people to subvert the political and the governmental will in 
Mexico. There are areas--if you will look up on the screen, 
there is the banner there that is supported by a drug cartel, 
and they have got hotdogs and they have got food and drinks and 
clowns and everything else. They are offering health care and 
better pay. This is an activity that is not being done out of 
the goodness of their heart. This is an activity to try to 
subvert the governmental and political will in Mexico. So that 
is an activity I think that is certainly worth pointing to.
    This definition to me is important because if we continue 
to look at the problem as just a drug trafficking problem, we 
have missed the opportunity to really try to solve the problem. 
What we have seen is that--I believe that Merida, when 
introduced, was a very good plan to try to combat what was 
happening in Mexico and in developing that partnership and 
relationship with the Government of Mexico. Unfortunately, I 
think the delivery of it has been so slow, without clear 
targets and a clear understanding of the objectives or changing 
objectives, not being able to keep up with the changing 
influence of the insurgency that we now see, that we need to 
readdress what it is that we want to accomplish.
    And I am of the opinion that Merida, the initial plan of 
Merida, it has evolved to a point where we need to have a 
completely different way of looking about how to solve the 
problem and engage with Mexico.
    I am going to put into the record a few documents that 
highlight what I think is clearly a definition of criminal 
insurgency acts by the cartels and these groups in Mexico that 
substantiate and help define criminal insurgency with their 
actions.
    And we appreciate the testimony of all of you. We do plan 
on in this committee taking your testimony, the ideas, the 
members on the committee, on the two committees, hopefully the 
full committee, and trying to put forward a plan that 
identifies the problem and comes up with solutions to solve the 
problem that we have identified.
    So with that, the meeting is adjourned and I want to thank 
all of the witnesses once again for being here.
    [Whereupon, at 4:08 p.m., the subcommittees were 
adjourned.]
                                     

                                     

                            A P P E N D I X

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     Material Submitted for the Hearing RecordNotice deg.




Prepared Statement of the Honorable Dana Rohrabacher, a Representative 
in Congress from the State of California, and chairman, Subcommittee on 
                      Oversight and Investigations




                                 
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