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

    THE U.S. HOMELAND SECURITY ROLE IN THE MEXICAN WAR AGAINST DRUG CARTELS

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

                                    HEARING

                                   before the

                           SUBCOMMITTEE ON OVERSIGHT,

                         INVESTIGATIONS, AND MANAGEMENT

                                     of the

                         COMMITTEE ON HOMELAND SECURITY

                            HOUSE OF REPRESENTATIVES

                          ONE HUNDRED TWELFTH CONGRESS

                                 FIRST SESSION

                                   __________

                                 MARCH 31, 2011

                                   __________

                               Serial No. 112-14

                                   __________

           Printed for the use of the Committee on Homeland Security

    [GRAPHIC] [TIFF OMITTED]

          Available via the World Wide Web: http://www.gpo.gov/fdsys/

                                   __________

                      U.S. GOVERNMENT PRINTING OFFICE
    72-224                    WASHINGTON : 2012
    -----------------------------------------------------------------------
    For sale by the Superintendent of Documents, U.S. Government Printing
    Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC
    area (202) 512-1800 Fax: (202) 512-2104  Mail: Stop IDCC, Washington, DC
    20402-0001

                         COMMITTEE ON HOMELAND SECURITY

                       Peter T. King, New York, Chairman
    Lamar Smith, Texas                   Bennie G. Thompson, Mississippi
    Daniel E. Lungren, California        Loretta Sanchez, California
    Mike Rogers, Alabama                 Sheila Jackson Lee, Texas
    Michael T. McCaul, Texas             Henry Cuellar, Texas
    Gus M. Bilirakis, Florida            Yvette D. Clarke, New York
    Paul C. Broun, Georgia               Laura Richardson, California
    Candice S. Miller, Michigan          Danny K. Davis, Illinois
    Tim Walberg, Michigan                Brian Higgins, New York
    Chip Cravaack, Minnesota             Jackie Speier, California
    Joe Walsh, Illinois                  Cedric L. Richmond, Louisiana
    Patrick Meehan, Pennsylvania         Hansen Clarke, Michigan
    Ben Quayle, Arizona                  William R. Keating, Massachusetts
    Scott Rigell, Virginia               Vacancy
    Billy Long, Missouri                 Vacancy
    Jeff Duncan, South Carolina
    Tom Marino, Pennsylvania
    Blake Farenthold, Texas
    Mo Brooks, Alabama
                Michael J. Russell, Staff Director/Chief Counsel
                   Kerry Ann Watkins, Senior Policy Director
                        Michael S. Twinchek, Chief Clerk
                    I. Lanier Avant, Minority Staff Director
                                     ------

           SUBCOMMITTEE ON OVERSIGHT, INVESTIGATIONS, AND MANAGEMENT

                       Michael T. McCaul, Texas, Chairman
    Gus M. Bilirakis, Florida            William R. Keating, Massachusetts
    Billy Long, Missouri, Vice Chair     Yvette D. Clarke, New York
    Jeff Duncan, South Carolina          Danny K. Davis, Illinois
    Tom Marino, Pennsylvania             Bennie G. Thompson, Mississippi
    Peter T. King, New York (Ex              (Ex Officio)
        Officio)
                      Dr. R. Nick Palarino, Staff Director
                       Diana Bergwin, Subcommittee Clerk
                  Tamla Scott, Minority Subcommittee Director

                                C O N T E N T S

                                  ----------
                                                                       Page

                                   STATEMENTS

    The Honorable Michael T. McCaul, a Representative in Congress
      From the State of Texas, and Chairman, Subcommittee on
      Oversight, Investigations, and Management:
      Oral Statement.................................................     1
      Prepared Statement.............................................     4
    The Honorable William R. Keating, a Representative in Congress
      From the State of Massachusetts, and Ranking Member,
      Subcommittee on Oversight, Investigations, and Management......     5
    The Honorable Bennie G. Thompson, a Representative in Congress
      From the State of Mississippi, and Ranking Member, Committee on
      Homeland Security..............................................     7

                                   WITNESSES
                                    Panel I

    Mr. Luis Alvarez, Assistant Director, Immigration and Customs
      Enforcement, Department of Homeland Security:
      Oral Statement.................................................     9
      Prepared Statement.............................................    11
    Mr. Brian A. Nichols, Deputy Assistant Secretary, International
      Narcotics Law Enforcement Affairs, Department of State:
      Oral Statement.................................................    15
      Prepared Statement.............................................    17
    Mr. Frank O. Mora, Deputy Assistant Secretary of Defense, Western
      Hemisphere Affairs, Department of Defense:
      Oral Statement.................................................    20
      Prepared Statement.............................................    21
    Ms. Kristin M. Finklea, Analyst, Domestic Social Policy Division,
      Congressional Research Service:
      Oral Statement.................................................    23
      Prepared Statement.............................................    24

                                    Panel II

    Mr. Jon Adler, President, Federal Law Enforcement Officers
      Association:
      Oral Statement.................................................    66
      Prepared Statement.............................................    68
    Mr. David A. Shirk, Director, Trans-Border Institute, University
      of San Diego:
      Oral Statement.................................................    69
      Prepared Statement.............................................    71
    Dr. John Bailey, Professor, Government and Foreign Service,
      Georgetown University:
      Oral Statement.................................................    79
      Prepared Statement.............................................    82
    Dr. Ricardo C. Ainslie, Department of Educational Psychology,
      College of Education, The University of Texas at Austin:
      Oral Statement.................................................    86
      Prepared Statement.............................................    88

                                 FOR THE RECORD

    The Honorable Michael T. McCaul, a Representative in Congress
      From the State of Texas, and Chairman, Subcommittee on
      Oversight, Investigations, and Management:
      Statement of Thomas M. Harrigan, Assistant Administrator and
        Chief of Operations, Drug Enforcement Administration.........    58

                                    APPENDIX

    Questions From Ranking Member William R. Keating for Luis Alvarez    99
    Questions From Ranking Member William R. Keating for Brian A.
      Nichols........................................................   101
    Questions From Ranking Member William R. Keating for Frank O.
      Mora...........................................................   102
    Questions From Ranking Member William R. Keating for John Bailey.   102

    THE U.S. HOMELAND SECURITY ROLE IN THE MEXICAN WAR AGAINST DRUG CARTELS

                                  ----------

                            Thursday, March 31, 2011

                 U.S. House of Representatives,
        Subcommittee on Oversight, Investigations, and
                                            Management,
                                Committee on Homeland Security,
                                                        Washington, DC.
        The subcommittee met, pursuant to call, at 10:12 a.m., in
    Room 311, Cannon House Office Building, Hon. Michael T. McCaul
    [Chairman of the subcommittee] presiding.
        Present: Representatives McCaul, Long, Duncan, Marino,
    Keating, Thompson, and Clarke.
        Also present: Representatives Cuellar, Green of Texas, and
    Jackson Lee.
        Mr. McCaul. Good morning. The Committee on Homeland
    Security Subcommittee on Oversight, Investigations, and
    Management will come to order.
        First order of business, I see we have three Members that
    would like to attend and sit in on this hearing, Mr. Cuellar,
    Mr. Green, and Ms. Sheila Jackson Lee, and I ask unanimous
    consent that they be allowed to sit on the dais for the hearing
    today. Hearing no objection, so ordered.
        I now recognize myself for an opening statement.
        The hearing today is titled, ``The U.S. Homeland Security
    Role in the Mexican War Against Drug Cartels.'' Over the past
    year the increase in violence by the Mexican drug cartels has
    expanded to include more brutal forms of violence and deaths of
    civilians and political leaders.
        On March 13, 2010, cartel members killed three individuals,
    two of them U.S. citizens, connected to the U.S. consulate in
    Juarez, Mexico. On June 28, 2010, a Tamaulipas gubernatorial
    candidate was assassinated by a drug cartel.
        January through October 2010, 12 sitting mayors were
    assassinated. On February 15, 2011, Immigration and Customs
    Enforcement Special Agent Jaime Zapata was killed and his
    fellow agent, Special Agent Victor Avila, was wounded by the
    drug cartel known as the Los Zetas.
        March 2011, a law enforcement bulletin warned that cartels
    were overheard plotting to kill ICE agents and Texas Rangers
    guarding the border using AK-47s by shooting at them from
    across the border. These are acts of terrorism as defined by
    Federal law.
        The shooting of Special Agents Zapata and Avila is a game-
    changer which alters the landscape of the United States'
    involvement in Mexico's war against the drug cartels. For the
    first time in 25 years the cartels are now targeting American
    law enforcement.
        I had the honor to sit down with Agent Avila and speak to
    him personally about the events that took place that tragic
    day, and he described the ambush to me as ``pure evil.'' Even
    at the Mexican hospital he described the fear he had that they
    would come back to finish the job, as they so often do.
        The agents were forced off a highway in Central Mexico in
    their vehicle bearing diplomatic license plates. Both agents
    pleaded for their lives in Spanish, identifying themselves as
    United States Federal agents, as Americans, as diplomats. But
    the members of the Los Zetas cartel responded by firing more
    than 80 rounds from automatic weapons, killing Agent Zapata and
    wounding Agent Avila.
        I have been in contact with the Department of Justice after
    meeting with Agent Avila, who expressed his willingness to
    testify here today. However, the Department of Justice objected
    to that request as he is a material witness in an on-going
    criminal investigation and for his personal safety. Better
    judgment, in my view, was to not call him as a witness, but I
    do believe that his story needs to be told.
        Given this intensified violence--more than 35,000 killings
    in the past 5 years since President Calderon declared this war
    and the increase in spillover crime into the United States--I
    believe it is time for the United States to take decisive steps
    to end this war just south of our border. We are spending
    billions of dollars halfway across the world, and we talk about
    Libya in the press, and yet we have a threat just south of our
    border, right in our own backyard. We need to step up to the
    plate.
        President Calderon should be praised for his efforts to
    eradicate these cartels. When Congressman Henry Cuellar and I
    met with him in Mexico City in 2008 he told us that security
    was his highest priority. He boldly declared war against the
    narcoterrorists that were infiltrating his military and local
    police forces.
        In 2008 Congress passed the Merida Initiative, directing
    $1.3 billion in resources to help the Mexican government fight
    these cartels. Unfortunately, to date only one quarter of that
    amount--over 2 years since that bill passed--only one quarter
    has been directed and the violence in Mexico is only getting
    worse. In my judgment, the Mexicans are losing this war and so
    are we.
        The violence is no longer limited to the drug trade.
    Cartels are disrupting basic services and expanding their
    criminal enterprises.
        Mexico, in my judgment, is in danger of becoming a failed
    state controlled by criminals. If this happens, Mexico could
    become a safe haven for terrorists who we know are attempting
    to enter the United States through our porous border.
        In the interest of National security, and in trade with our
    third-largest partner, and our rich cultural ties with Mexico,
    we cannot afford for this to happen. Failure is not an option.
        Our hearing today will do the following: Review the
    accomplishments of the Mexican government's war against the
    drug cartels, examine the U.S. role in the war, determine the
    implications for Homeland Security, determine what future
    actions the United States needs to take assisting Mexico to win
    this war.
        In essence, I want to know from these witnesses here today:
    What is our plan? What is our strategy in dealing with Mexico?
    What is the plan to assist Mexico, our neighbor to the south,
    to help them win this important war?
        In my judgment, we should explore a joint military and
    intelligence operation with Mexico, similar to the 1999 Plan
    Colombia, which succeeded in undermining that country's cocaine
    trade, disrupting its cartels, and restoring its economic and
    national security. In addition, I have introduced legislation
    requiring the State Department to classify drug cartels as
    Foreign Terrorist Organizations as a means to limit the groups'
    financial, property, and travel interests.
        This designation would bring separate charges against
    anyone providing material support or resources to FTOs. It
    would provide an additional penalty of up to 15 years in prison
    and a fine, and it would authorize the deportation of any
    foreign member of a Foreign Terrorist Organization from the
    United States even if they are in this country legally. It
    would also require banks to freeze any funds tied to Foreign
    Terrorist Organizations.
        Cartels kidnap, kill, and mutilate innocent civilians,
    elected officials, and law enforcement officers. They use
    gruesome tactics--and I have seen many of the videos and the
    pictures, and they are so gruesome and so violent and so
    graphic that we could not show those pictures at this committee
    hearing today.
        These tactics intimidate government officials and citizens.
    They torture; they use beheadings; they dismember and mutilate.
        While not driven by religious ideology, Mexican drug
    cartels operate in the same manner as al-Qaeda, the Taliban, or
    Hezbollah, each sharing a desire and using similar tactics to
    gain political and economic influence. These are acts of
    terrorism.
        Black's Law defines terrorism as activity that appears to
    be intended to intimidate or coerce a civilian population, to
    influence the policy of a government by intimidation or
    coercion, and to affect the conduct of a government by
    assassination or kidnapping. In my judgment, the drug cartels
    fall squarely within this definition. President Clinton, in the
    1990s, exercised this authority by declaring the FARC as a
    Foreign Terrorist Organization.
        According to the Congressional Research Service, ``The
    massacres of young people and migrants, the killing and
    disappearance of Mexican journalists, the use of torture, and
    the phenomena of car bombs have received wide media coverage
    and have led some analysts to question if the violence has been
    transformed into something new, beyond the typical violence
    that has characterized the trade.'' Some observers have raised
    the concern that the Mexican Drug Trafficking Organizations may
    be acting more like domestic terrorists.
        We must also secure our borders. We must intensify
    southbound inspections to seize weapons and cash that arm and
    fund Drug Trafficking Organizations. The United States
    estimates that somewhere between $25 billion to $30 billion a
    year in cash go southbound into Mexico, which funds the
    cartels. We should seize this money and the guns going south
    and then use it against the cartels to pay for our border
    security operations.
        You know, I visited our troops in Iraq, in Afghanistan; I
    have been to Pakistan. I will tell you, the last time I went to
    El Paso to the EPIC Center and requested to go across the
    border to Juarez, where 6,000 people had been brutally killed,
    I was told that, ``Congressman, we cannot guarantee your
    safety.''
        It is time for the United States to show a serious
    commitment to this war that is right in our backyard and on our
    doorstep.
        Before I yield back my time I would like for all of us
    today here to remember Special Agent Jaime Zapata. Our
    sympathies go out to his family and his friends. I also want to
    recognize the heroic efforts of Special Agent Victor Avila, who
    was wounded.
        So on behalf of this committee, I want to thank all the
    brave men and women who put themselves in harm's way every day
    for this country, both overseas and abroad, at home, and in
    Mexico.
        With that, I yield to the Ranking Member, Mr. Keating.
        [The statement of Chairman McCaul follows:]
                Prepared Statement of Chairman Michael T. McCaul
                                 March 31, 2011
        Good morning. Welcome to this Oversight, Investigations, and
    Management Subcommittee hearing titled ``The U.S. Homeland Security
    Role in the Mexican War Against Drug Cartels''.
        Over the past year the increase in violence by the Mexican Drug
    Cartels has expanded to include more brutal forms of violence and
    deaths of civilians and political leaders.
       March 13, 2010.--Cartel members killed three individuals
            (two of them U.S. citizens) connected to the U.S. consulate in
            Juarez, Mexico.
       June 28, 2010.--Tamaulipas gubernatorial candidate was
            killed by a drug cartel.
       January through October 2010.--12 sitting mayors were
            killed.
       February 15, 2011.--Immigration and Customs Enforcement
            Special Agent Jaime Zapata was killed and his fellow Special
            Agent Victor Avila was wounded by the Los Zetas.
       March 2011.--A Law Enforcement Bulletin warned that cartels
            were overheard plotting to kill ICE agents and Texas Rangers
            guarding the border using AK-47s by shooting at them from
            across the border.
        These are acts of terrorism as defined by Federal law.
        The shooting of Special Agents Zapata and Avila is a game-changer
    which alters the landscape of the United States' involvement in
    Mexico's war against the drug cartels.
        For the first time in 25 years, the cartels are targeting American
    law enforcement. Agent Avila described this ambush to me as ``pure
    evil''. Even at the Mexican hospital he feared that they would come
    back and finish the job.
        The agents were forced off a highway in Central Mexico in their
    vehicle bearing diplomatic license plates. Both agents pleaded for
    their lives in Spanish identifying themselves as United States Federal
    agents. Members of the Los Zetas cartel responded by firing more than
    80 rounds from automatic weapons, killing Special Agent Zapata and
    wounding Special Agent Avila.
        I have been in contact with the Department of Justice. I personally
    met with Agent Avila and he expressed his willingness to testify today.
    However, given that he is a material witness in an on-going criminal
    investigation and for his security, better judgment was to not call him
    as a witness. His story still needs to be told.
        Given this intensified violence, more than 35,000 killings in the
    past 5 years and increased spillover crime into the United States, it
    is time for the United States to take decisive steps to end this war
    just south of our border. The solution, however, goes well beyond
    securing our borders.
        President Felipe Calderon should be praised for his efforts to
    eradicate the cartels. When Congressman Henry Cuellar and I visited him
    in Mexico City in 2008, he told us security was his top priority. He
    had boldly declared war against the narcoterrorists that were
    infiltrating his military and local police forces.
        In 2008 Congress passed the Merida Initiative, directing $1.3
    billion in resources to help the Mexican government fight the cartels.
    To date only one quarter of that amount has been directed and the
    violence in Mexico is only increasing.
        The violence is no longer limited to the drug trade. The cartels
    are disrupting basic services and expanding their criminal enterprises.
        Mexico is in danger of becoming a failed state controlled by
    criminals. If this happens, Mexico could become a safe haven for
    terrorists who we know are attempting to enter the United States
    through our porous border. In the interest of our National security,
    trade with our third-largest partner, and our rich cultural ties, we
    cannot afford for this to happen.
        Our hearing today will:
       Review the accomplishments of the Mexican government's war
            against the drug cartels;
       Examine the U.S. role in the war;
       Determine the implications for U.S. Homeland Security; and
       Determine what further actions the United States needs to
            take assisting Mexico win their war.
        We should explore a joint military and intelligence operation with
    Mexico, similar to the 1999 Plan Colombia which has succeeded in
    undermining that country's cocaine trade, disrupting its cartels and
    restoring its economic and national security.
        In addition, I have introduced legislation requiring the State
    Department to classify drug cartels as Foreign Terrorist Organizations
    as a means to limit the groups' financial, property, and travel
    interests.
        This designation could:
       Bring separate charges against anyone providing ``material
            support or resources'' to FTOs. This includes but is not
            limited to money, identification, lodging, training, weapons,
            and transportation.
       Provide an additional penalty of up to 15 years in prison
            and possible fine for providing material support or resources.
            A death sentence may be imposed if their actions resulted in
            death. This penalty is levied in addition to penalties for any
            associated crime.
       Authorize the deportation of any foreign member of an FTO
            from the United States even if they are in this country
            legally.
       Require banks to freeze any funds tied to FTOs.
        Cartels kidnap, kill, and mutilate innocent civilians, elected
    officials, and law enforcement, using gruesome tactics to intimidate
    government officials and citizens to abide by their rules. Torture,
    beheadings, dismembering, and mutilation are common.
        While not driven by religious ideology, Mexican drug cartels
    operate in the same manner as al-Qaeda, the Taliban, or Hezbollah each
    sharing a desire, and using similar tactics to gain political and
    economic influence. These are acts of terrorism.
        Black's Law defines TERRORISM as: activity that . . . appears to be
    intended--(i) To intimidate or coerce a civilian population; (ii) to
    influence the policy of a government by intimidation or coercion, or
    (iii) to affect the conduct of a government by assassination or
    kidnapping.
        We must also secure our borders. We must intensify southbound
    inspections to seize weapons and cash that arm and fund drug
    trafficking organizations. The United States funnels an estimated $25-
    30 billion a year into Mexico which funds the cartel. We should seize
    this money then use it against the cartels by paying for U.S. border
    security operations.
        I have visited our troops in Iraq, Afghanistan, and Pakistan. But
    the last time I visited the El Paso Intelligence Center and requested
    to go across the border to Juarez, the State Department told me they
    could not guarantee my safety.
        It is time for the United States to show a serious commitment to
    this war on our doorstep.
        Before I yield my time, I would like for us all to remember Special
    Agent Jaime Zapata. Our sympathies go out to his family and friends.
    Additionally, I want to recognize the heroic efforts of Special Agent
    Victor Avila, who was wounded during the attack. On behalf of this
    committee, thank you to all of our brave men and women who put
    themselves in harms way for our country.
        Also, I'd like to thank our witnesses for being here today. I look
    forward to hearing their testimony.

        Mr. Keating. I would like to thank Chairman McCaul for
    conducting this hearing and giving us the opportunity to
    investigate the impact of Mexican drug cartel violence on the
    U.S. Homeland Security. As the Chairman noted, this is our
    first hearing and I am looking forward to working with him and
    our colleagues to tackle the urgent, serious issues challenging
    the security of this country.
        Let me start by expressing my sympathies and my gratitude
    to the family of ICE Agent Zapata, who paid the ultimate
    sacrifice when he was killed last month in the line of duty in
    Mexico. I wish to also thank Victor Avila, who was wounded
    during the same incident, for his great service to our Nation.
    Agents like Mr. Zapata and Mr. Avila, along with the scores of
    law enforcement and Homeland Security officials work tirelessly
    to keep this side of the border safe, and I truly thank them
    for their effort.
        I would also like to acknowledge the efforts of Secretary
    Napolitano and the Obama administration, which announced
    yesterday that the Narcotics Rewards Program would pay $5
    million to anyone coming forward with information that results
    in the arrest of those responsible for the February 15 attack.
    I would urge anyone who has information to immediately come
    forward and let these families have some closure. It should be
    a paramount responsibility and duty for us to bring to justice
    the terrible acts of people I would term criminals and thugs
    and murderers.
        Drug-related crime in Mexico has been labeled an epidemic,
    and this hearing will probe further about the reaches of this
    epidemic. The bottom line is that there has indeed been a sharp
    rise in drug-related violence in Mexico.
        It is my understanding that most of the violence could be
    construed as a turf battle between rival drug traffickers. The
    violence is concentrated; 84 percent of Mexico's drug-related
    homicides in 2010 occurred in just four of Mexico's 32 states,
    two of which are more than 500 miles from the United States.
        One of the questions that is likely to come up today is
    whether this violence has a spillover effect on the U.S. side
    of the border, and I see that the FBI's Uniform Crime Report
    indicates that crime along the Southwest border has actually
    declined steadily over the last 10 years, in direct contrast to
    what has occurred in Mexico. In fact, in 2009 violent crimes
    such as homicides, robberies, assaults, and motor vehicle theft
    decreased in metropolitan areas along the Southwest border by 4
    percent and homicides were down 14 percent, robberies 3
    percent, assaults by 4 percent, motor vehicle theft by 23
    percent. These statistics are important to note, especially
    because we want to continue to be vigilant in our efforts to
    maintain decreasing crime.
        One of our strategies reducing violence on both sides of
    the border must address drug trafficking. It also must expand
    itself to its corollary crime in so many instances, gun
    trafficking. Inherent in drug violence is the guns that are
    used to perpetuate the violence.
        I am disappointed, frankly, here today that a
    representative from the Bureau of Alcohol, Tobacco, and
    Firearms did not make themselves available to testify. I would
    have appreciated the opportunity to hear from the Fast and
    Furious program, which allowed guns over the border so that the
    ATF could track those guns. It has been reported that one of
    those guns was used in the shooting of Mr. Zapata and Mr.
    Avila.
        There are legitimate questions here that require urgent
    answers about the interplay of guns from the United States and
    Mexico's rising violence.
        Last, as a former district attorney I have seen first-hand
    the damage caused by methamphetamine consumption in my
    district, and I am concerned that as long as the demand exists
    here the violence will continue there. As a member of the
    Addiction Treatment and Recovery Caucus I am supportive of
    various efforts to reduce the demand for drugs in the United
    States and I look forward to working with colleagues on both
    sides of the aisle to address that issue.
        I look forward to the--receiving the testimony of the
    witnesses who made themselves available here today. Thank you.
        Mr. McCaul. Yes. I want to thank the Ranking Member, and I
    very much look forward to working with you in this Congress on
    these very important issues.
        Let me remind the Members, the focus of this hearing--it is
    really a two-part series. This hearing is focused on the role
    of the United States in the Mexican war against the drug
    cartels. In other words: What is our role in Mexico? The second
    hearing that we will have in a few weeks will be: What is the
    role in the United States or what are we doing on this side of
    the border in the United States to secure our borders?
        The Chair sees that the Ranking Member of the full
    committee has arrived, Mr. Thompson from Mississippi, and I
    recognize him for any statement he may have.
        Mr. Thompson. Thank you very much, Mr. Chairman, and I look
    forward to the hearing. I want to recognize Mr. Keating as our
    Ranking Member of this subcommittee. We welcome him to the
    committee, but also his prosecutorial experience is ideally
    suited for hearings like this and others.
        But I also want to thank our witnesses for being here today
    to discuss the United States' role in responding to drug-
    related violence occurring in Mexico.
        Over the past few years this committee has conducted
    several hearings on violence occurring on the Mexican side of
    the Southwest border. We have also examined the numerous
    efforts undertaken by our Government to assist our Mexican
    allies in disrupting and dismantling Mexican drug trafficking
    organizations, otherwise known as DTOs.
        In recent years violence in Mexico has reached an all-time
    high. However, despite dire predictions, statistics and
    concrete evidence show that this violence has not spilled over
    into the United States. In fact, the violence occurring in
    Mexico is highly concentrated and in many instances limited to
    drug trafficking corridors, some of which are hundreds of miles
    away from the United States border.
        Last week, for instance, Secretary Napolitano visited ports
    of entry in El Paso, Texas; during that trip she stated that
    security on the southern U.S. border is better now than it has
    ever been and that the violence from neighboring Mexico hasn't
    spilled over in a serious way. She also assured the public that
    border towns are safe for travel, trade, and commerce, and that
    violent crime rates have remained flat or decreased in border
    communities in the Southwest.
        Crime statistics from the Federal Bureau of Investigation
    corroborate the Secretary's statement. According to the FBI,
    the homicide rate along the U.S. side of the southwestern
    border has actually decreased by as much as 14 percent over the
    last 3 years.
        The Mexican city Juarez sits directly opposite El Paso,
    Texas. In 2010 more than 2,700 murders occurred in Juarez,
    which has been coined the murder capital of the world, while
    there were only four murders in El Paso during the same time
    frame. Likewise, there were 472 murders in Tijuana while only
    29 occurred on the other side of the border in San Diego,
    California.
        These numbers show a clear distinction between political
    rhetoric and proven facts. Our focus must remain on common
    sense strategies that will aid Mexico in responding to this
    very serious problem while respecting their status as a
    sovereign country, fostering the commerce that exists between
    the two nations, and acknowledging that Mexican authorities
    have been successful with and without U.S. assistance in
    arresting and eliminating the heads of some of the most
    dangerous Mexican DTOs.
        As Members of Congress we must align our budget priorities
    with where we claim help is needed. This Congress the majority
    introduced H.R. 1, which cut $350 million from the Department
    of Homeland Security's budget for border security, fencing, and
    technology.
        The Department of Homeland Security must have all the
    resources and authorities it needs to protect our border.
    Republican efforts to eliminate financial and human resources
    from DHS's border security mission will move us backward.
        Last month, as we have all said, we were saddened by the
    senseless killing of ICE Agent Jaime Zapata and wounding of ICE
    Agent Victor Avila. Brave men and women like Agent Zapata and
    Agent Avila work tirelessly on our borders 24 hours a day, 365
    days a year. I would like to take this opportunity to join the
    Chairman, Ranking Member, who have acknowledged their work and
    ultimate sacrifice of one, to again commend them for all their
    services.
        Mr. Chairman, I look forward to this hearing as well as the
    information from our witnesses.
        Mr. McCaul. We thank the Ranking Member.
        Let me just say, as for me, I look forward to working with
    you, Mr. Thompson, in a bipartisan way to increase resources
    for what I consider should be one of the highest priorities of
    the Federal Government, and that is to provide a common
    defense, as the Constitution requires, on the border. I hope
    that we can do that together in a bipartisan way to increase
    resources for this important effort.
        Other Members of the committee are reminded that opening
    statements may be submitted for the record.
        We are pleased to have a very distinguished panel of
    witnesses before us here today. First, Mr. Luis Alvarez is the
    assistant director of international affairs, homeland security
    investigations, at U.S. Immigration and Customs Enforcement in
    the Department of Homeland Security. He has more than 20 years
    of law enforcement experience and has served in a variety of
    key ICE management positions.
        His international experience includes a tour as the ICE
    attache for Spain, Portugal, Andorra, and Cape Verde, as well
    as a tour as the ICE attache in Mexico City. While in Mexico
    City Mr. Alvarez served as the first DHS attache, promoting ICE
    and DHS missions and priorities at the U.S. Embassy.
        Next we have Mr. Brian Nichols, who is the deputy assistant
    secretary in the International Narcotics and Law Enforcement
    Affairs Office at the Department of State. Prior to his current
    assignment Mr. Nichols was the deputy chief of mission in
    Bogota, Colombia. He also served as the director of the Office
    of Caribbean Affairs, coordinating U.S. policy towards 14
    Caribbean countries.
        Next we have Dr. Frank Mora, who is the deputy assistant
    secretary of Western Hemisphere affairs at the Department of
    Defense. From 2004 to 2009 Mr. Mora--or Dr. Mora--was professor
    of national security strategy and Latin American studies at the
    National War College National Defense University. He taught
    courses on strategy, global security, and Latin American
    politics to senior military and civilian officers.
        Last, we have Dr. Kristin Finklea, who is an analyst in
    domestic security at the domestic social policy division of the
    Congressional Research Service. She focuses on a number of
    organized crime and white collar crime issues and has been the
    lead analyst on Southwest border violence and potential
    spillover violence. She is the coordinator of CRS Report,
    Southwest border violence issues, and identifying and measuring
    spillover violence.
        The Chair now recognizes Assistant Director Alvarez to
    testify.

    STATEMENT OF LUIS ALVAREZ, ASSISTANT DIRECTOR, IMMIGRATION AND
          CUSTOMS ENFORCEMENT, DEPARTMENT OF HOMELAND SECURITY

        Mr. Alvarez. Chairman McCaul, Ranking Member Keating,
    Ranking Member Thompson, and distinguished Members of the
    subcommittee, on behalf of Secretary Napolitano and Assistant
    Secretary Morton, thank you for the opportunity to discuss
    ICE's efforts to investigate, disrupt, and dismantle criminal
    cross-border smuggling organizations. ICE has the most
    expansive investigative authority and largest force of
    investigators within the Department of Homeland Security, with
    more than 7,000 special agents assigned to over 200 cities
    throughout the United States and 69 international offices in 47
    countries.
        As you know, we experienced a terrible tragedy within our
    agency last month involving two special agents assigned to our
    attache office in Mexico City, an office where I served 5
    years, including as the attache. Special Agent Jaime Zapata
    lost his life and Special Agent Victor Avila was seriously
    injured in service to our country.
        These senseless acts as violence against them served as a
    painful reminder of the dangers confronted and the sacrifices
    made every day by our Nation's law enforcement officers, and
    our hearts and prayers continue to go out to the victims and
    their families.
        Special Agent Zapata died fighting to protect not only the
    people of this country but also the people of Mexico from drug
    traffickers and organized crime. He will forever be remembered
    as a man of courage and honor.
        Since the incident our special agents, in conjunction with
    the FBI and other U.S. and Mexican law enforcement agencies,
    have been working diligently to track down the perpetrators of
    the heinous crime. We will continue to assist the on-going
    investigation with every resource at our disposal to ensure
    that all those responsible for this murder face justice.
        The illicit drugs, money, and weapons that fund and arm
    criminal organizations operating along the Southwest border are
    part of a complex, interconnected system of illicit pathways
    controlled by transnational criminal organizations that span
    the globe. We target these organizations at every phase in the
    illicit cycle--internationally, at the border, and in cities
    throughout the United States where criminal organizations earn
    substantial profits from their illicit activities.
        To accomplish this, our investigation utilized a supply
    chain attack strategy designed to trigger cascading failures
    within a criminal organization by simultaneously targeting
    multiple components within the organization as well as
    attacking the criminal proceeds that fund their operation. As
    evidence of our commitment to these efforts we have targeted
    considerable resources at the Southwest border and now have a
    quarter of our personnel assigned to the Southwest border--more
    agents and officers along the border than ever before.
        Our efforts to dismantle transnational criminal
    organizations are producing results. In fiscal year 2010 ICE-
    led Border Enforcement Security Taskforce, or BEST, as they are
    known, made over 1,600 criminal arrests of individuals engaged
    in cross-border criminal activity.
        Capitalizing on the domestic success of the BEST to elevate
    enforcement efforts against violent criminal organizations, ICE
    and the government of Mexico established a Mexico City BEST in
    2009 as a U.S.-Mexican operational platform for information-
    sharing, joint investigations, and prosecutions. This task
    force includes officers from the Secretary of public safety,
    the PGR, and ICE agents. The Mexico City BEST, along with our
    attache office in Mexico, are key components in ICE's strategic
    plan to target transnational criminal organizations operating
    in Mexico.
        Other ICE efforts include Operation Firewall. This is our
    bulk cash smuggling initiative, which has resulted in more than
    5,200 seizures totaling more than $504 million and the arrest
    of over 1,000 individuals. These efforts include 319
    international seizures totaling more than $240 million and 218
    international arrests.
        Operation Community Shield, our anti-gang program, has led
    to the arrest of more than 20,000 gang members and associates,
    7,700 of whom had prior violent criminal history. In additional
    249 gang leaders have been arrested and 1,646 weapons have been
    seized.
        In February we complete Project Southern Tempest, our
    largest ever National initiative targeting gangs with ties to
    Mexican drug trafficking organizations. Southern Tempest was
    executed in 168 U.S. cities alongside 173 of our Federal,
    State, and local enforcement partners, and led to the arrest of
    678 gang members and associates. More than 46 percent of those
    arrested during this operation were members or associates of
    gangs with ties to the Mexican trafficking organizations.
        The success of these efforts and strategy is evident in our
    investigations. For example, Operation Pacific Rim, and ICE-led
    investigation, dismantled one of the most powerful and
    sophisticated bulk cash and drug trafficking organizations in
    the world.
        This transnational drug trafficking organization was a
    prolific cocaine source of supply, responsible for nearly half
    of the cocaine smuggled from Colombia, through Mexico, and into
    the United States between 2003 and 2009--approximately 912 tons
    with an estimated street value of $24 billion. During the
    investigation our special agents developed a high level and
    strategically positioned source of information, which led to
    the seizure of $163 million in illicit bulk currency, 3.3 tons
    of cocaine, $179 million in assets, and $37 million in criminal
    forfeiture warrants.
        Thank you for the opportunity to appear before you today
    and for your continued support of ICE and its law enforcement
    mission. We are committed to stemming cross-border criminal
    organizations through the various efforts I have discussed
    today.
        I would be pleased to answer any questions.
        [The statement of Mr. Alvarez follows:]
                       Prepared Statement of Luis Alvarez
                                 March 31, 2010
                                  introduction
        Chairman McCaul, Ranking Member Keating, and distinguished Members
    of the subcommittee: On behalf of Secretary Napolitano and Assistant
    Secretary Morton, I would like to thank you for the opportunity to
    discuss the efforts of U.S. Immigration and Customs Enforcement (ICE)
    to investigate, disrupt, and dismantle criminal cross-border smuggling
    organizations. ICE has the most expansive investigative authority and
    largest force of investigators in the Department of Homeland Security
    (DHS). With more than 7,000 Special Agents assigned to more than 200
    cities throughout the United States and 69 offices in 47 countries
    world-wide, ICE is uniquely positioned to leverage its broad statutory
    authority to combat border violence and support border enforcement by
    targeting the illicit pathways and organizations that produce,
    transport, and distribute illegal contraband.
        The illicit drugs, money, and weapons that fund and arm criminal
    organizations operating along the Southwest Border are part of a
    complex, interconnected system of illicit pathways and transnational
    criminal organizations that span the globe. ICE targets transnational
    criminal organizations at every critical phase in the illicit cycle:
    Internationally, where the drugs are produced and the aliens originate;
    at our Nation's physical border and ports of entry (POEs), where the
    transportation cells attempt to exploit America's legitimate trade,
    travel, and transportation systems; and in cities throughout the United
    States, where criminal organizations earn substantial profits off of
    the smuggling of aliens and illicit goods. Additionally, these criminal
    organizations manipulate the legitimate banking, financial, and
    commercial trade systems to illegally generate, move, and store bulk
    cash and purchase weapons that can then be smuggled back across the
    border to Mexico and Central and South America.
        As you know, we experienced a terrible tragedy within our agency
    last month involving two Special Agents assigned to ICE's attache
    office in Mexico City. Special Agent Jaime J. Zapata lost his life and
    Special Agent Victor Avila, Jr., was seriously injured in service of
    our country. The senseless acts of violence against them serves as
    painful reminders of the dangers confronted and the sacrifices made
    every day by our Nation's law enforcement officers, and our hearts and
    prayers continue to go out to the victims and their families. Special
    Agent Zapata died fighting to protect not only the people of this
    country, but also the people of Mexico from drug traffickers and
    organized criminals. He will forever be remembered as a man of courage
    and honor.
        Since the incident, ICE agents have been working diligently,
    supported by a joint task force between the Department of Homeland
    Security (DHS) and the Department of Justice (DOJ), in cooperation with
    our Mexican partners, to track down the perpetrators of this heinous
    attack. We will continue to assist the on-going investigation with
    every resource at our disposal and to ensure that all those responsible
    for this murder face justice.
        Addressing the increasing drug cartel-related violence on the
    Mexican side of the Southwest Border is vital to the interests of the
    United States. DHS border security efforts are based on an overarching
    goal: To ensure a safe, secure border zone that is also hospitable to,
    and fosters, legal trade and travel. ICE protects America and upholds
    public safety by identifying and dismantling criminal organizations
    that exploit our Nation's borders in furtherance of their illegal
    activity.
        ICE's efforts are conducted in close coordination with our partners
    at U.S. Customs and Border Protection (CBP), the Drug Enforcement
    Administration (DEA), the Bureau of Alcohol, Tobacco, Firearms, and
    Explosives, the Federal Bureau of Investigation (FBI), the U.S.
    Marshals Service, and our State, local, foreign, and Tribal partners.
    ICE's work also directly supports the Merida Initiative, which is a
    Department of State program to establish a strategic framework to guide
    United States and Mexican cooperation. Our growing partnership with
    Mexico is critical to our continued success in disrupting criminal
    activity along the Southwest Border.
                          southwest border initiative
        In March 2009, the administration launched the Southwest Border
    Initiative to bring unprecedented focus and intensity to Southwest
    Border security, coupled with a reinvigorated, smart, and effective
    approach to enforcing immigration laws in the interior of our country.
    In support of this initiative, ICE has targeted considerable resources
    at the Southwest Border to interdict contraband, firearms, ammunition,
    undeclared currency, and stolen vehicles, and detect cross-border
    tunnels, human smuggling activity, transnational criminal
    organizations, and other border crime at and between ports of entry
    along the Southwest Border. Under this initiative, ICE has doubled the
    personnel assigned to Border Enforcement Security Task Forces;
    increased the number of intelligence analysts along the Southwest
    Border focused on cartel violence; and quintupled deployments of Border
    Liaison Officers to work with their Mexican counterparts.
        In fiscal year 2010, ICE deployed Special Agents to high-risk
    locations, including Tijuana and Monterey. Additionally, with its $80
    million share of the $600 million supplemental appropriation passed by
    Congress in the summer of 2010, ICE is placing more than 250 Special
    Agents, investigators, and intelligence analysts along the border.
    Indeed, ICE now has one quarter of its personnel assigned to the
    Southwest Border--more agents and officers along the border than ever
    before.
        ICE continues to expand the Border Enforcement Security Taskforce
    (BEST) program, which currently operates in 21 locations, including 11
    along the Southwest Border. BESTs bring Federal, State, local,
    territorial, Tribal, and foreign law enforcement together to work to
    increase security along the border. In fiscal year 2010, ICE-led BESTs
    made 1,616 criminal arrests, 907 administrative arrests, and obtained
    868 indictments; 689 defendants were convicted in fiscal year 2010.
        In 2009, Secretary Napolitano announced the formation of the first-
    ever, Mexico-based BEST to facilitate the exchange of law enforcement
    information and to support the joint investigation of criminal activity
    that falls within ICE's purview. These crimes include weapons and
    munitions smuggling, money laundering, human smuggling, human
    trafficking, customs fraud, and cybercrime violations. The Mexico City
    BEST includes both Mexican law enforcement officers and prosecutors
    working collaboratively with ICE and other United States Government
    staff to share information and expertise in joint investigations.
        Our efforts to dismantle transnational criminal organizations are
    producing results. For example, in November 2010, the San Diego Tunnel
    Task Force, which is part of the San Diego BEST, discovered two tunnels
    and seized more than 50 tons of marijuana. The first tunnel, discovered
    on November 2, 2010, was a 600-yard underground cross-border passageway
    equipped with rail, lighting, and ventilation systems. Surveillance
    operations and collaboration with Mexican law enforcement led to the
    discovery of this tunnel and resulted in the seizure of 30 tons of
    marijuana. The second tunnel, discovered on November 26, 2010, was even
    more sophisticated and included reinforced supports, advanced rail,
    electrical, and ventilation systems. This tunnel discovery resulted in
    the arrest of eight individuals and the seizure of more than 20 tons of
    marijuana. The two discoveries are the result of our collaboration with
    other agencies and use of state-of-the-art electronic surveillance
    technology to investigate cross-border smuggling by criminal
    organizations.
        Another example of the success of our efforts to dismantle
    transnational criminal organizations is ``Operation In Plain Sight,'' a
    targeted operation focused on five transportation companies involved in
    human smuggling. The bi-national investigation, which included
    unprecedented cooperation with Mexico's Secretaria Seguridad Publica
    (SSP) and marked the most comprehensive human smuggling investigation
    in ICE history, ultimately implicated high-level members of human
    smuggling organizations in Phoenix, Tucson, Nogales, and northern
    Mexico that were serviced by shuttle businesses. Specifically,
    Operation In Plain Sight resulted in: Nearly 50 criminal arrests and
    more than 40 administrative arrests; seizures of illicit weapons, cash,
    and vehicles; and the initiation of promising investigations of
    criminal organizations in Mexico--effectively dismantling an entire
    criminal enterprise engaged in smuggling through Arizona.
       targeting transnational criminal organizations and pursuing money
               laundering and bulk cash smuggling investigations
        One of the most effective methods for dismantling transnational
    criminal organizations is to attack the criminal proceeds that fund
    their operations. ICE investigations utilize a ``supply chain attack''
    strategy designed to trigger cascading failures within a criminal
    organization by simultaneously targeting multiple components within the
    organization.
        The combination of successful financial investigations, reporting
    requirements under the Bank Secrecy Act, and anti-money laundering
    compliance efforts by financial institutions has strengthened formal
    financial systems and forced criminal organizations to seek other means
    to transport illicit funds across our borders.
        ICE--as the investigative agency with jurisdiction over all crimes
    with a nexus to U.S. borders--investigates bulk cash smuggling
    violations. From fiscal year 2010 to date, ICE made 262 arrests for
    bulk cash smuggling under 31 USC  5332. In that same time period, 198
    defendants were convicted in Federal court for this same offense.
    Operation Firewall
        ICE's Operation Firewall disrupts the movement and smuggling of
    bulk cash en route to the border, at the border, and internationally
    via commercial and private passenger vehicles, commercial airline
    shipments, airline passengers and pedestrians. Since 2005, we have
    enhanced Operation Firewall efforts to include surge operations
    targeting the movement of bulk cash destined for the Southwest Border
    to be smuggled into Mexico. Since its inception in 2005, Operation
    Firewall has resulted in more than 5,200 seizures totaling more than
    $504 million, and the arrest of 1,020 individuals. These efforts
    include 319 international seizures totaling more than $240 million and
    218 international arrests.
        In addition to our international investigations, domestic Operation
    Firewall efforts assist us in documenting and gathering intelligence on
    how organizations involved in bulk cash smuggling operate within the
    United States. For example, during a routine traffic stop in May 2010,
    ICE Special Agents operating out of St. Louis, along with the Illinois
    State Police, seized $91,550 that was concealed within several natural
    voids in a vehicle which were later determined to be cocaine proceeds
    destined for Mexico. Both individuals pled guilty to narcotics-related
    offenses. One of the individuals was sentenced to 140 months in prison,
    while the other awaits sentencing.
    ICE's National Bulk Cash Smuggling Center
        On August 11, 2009, ICE officially launched the National Bulk Cash
    Smuggling Center (BCSC), a 24/7 investigative support and operations
    facility co-located with the Law Enforcement Support Center in
    Williston, Vermont. Since its launch, the BCSC has undertaken a full
    assessment of the bulk cash smuggling threat and has developed a
    strategic plan to address the problem.
        The BCSC utilizes a systematic approach to identify vulnerabilities
    and disrupt the flow of illicit bulk cash at the Southwest Border and
    beyond. By analyzing the movement of bulk cash as a systematic process,
    ICE develops enforcement operations to defeat the various smuggling
    methodologies currently employed by trafficking organizations. This
    approach allows us to more efficiently and effectively utilize our
    interdiction and investigative resources.
        To date, the BCSC has initiated 348 investigations, which have
    resulted in more than 89 arrests and more than 77 seizures. In July and
    August 2010, ICE Special Agents working in conjunction with State and
    local law enforcement officers seized more than 4,000 pounds of
    narcotics stemming from a BCSC investigation into a criminal
    organization based in New York City and Philadelphia that was
    responsible for the movement of bulk cash across the Southwest Border
    to Mexico. To date, this investigation has resulted in four arrests and
    the seizure of more than $3 million in proceeds connected to narcotics.
    ICE continues to work with its partners in Arizona, Maryland, Texas,
    and New York to identify additional associates of this trafficking
    organization.
        ICE is further cooperating with both foreign and domestic law
    enforcement partners to disrupt the criminal organizations that are
    smuggling narcotics into the United States and smuggling bulk cash
    shipments out. The expanding relationship between ICE's BCSC and DEA's
    El Paso Intelligence Center (EPIC) is a key component of these efforts.
        Recognizing each entity's distinct, but complementary roles, the
    BCSC and EPIC are currently coordinating the establishment of the Bulk
    Cash Smuggling Center Intake & Analysis Section (BCSC I&A) with our law
    enforcement counterparts at EPIC. The BCSC I&A will function as a
    single point of contact for State and local law enforcement entities to
    report bulk currency interdictions and receive immediate real-time
    analysis and support. In addition, the BCSC will focus its expertise in
    financial investigations on DHS-driven BCS investigations and
    initiatives to further strengthen the relationship between the two
    centers.
    Operation Pacific Rim
        Operation Pacific Rim is an ICE-led investigation, with the
    assistance of the DEA and FBI. The operation dismantled one of the most
    powerful and sophisticated bulk cash and drug trafficking organizations
    in the world. This transnational DTO was a prolific cocaine source of
    supply, responsible for nearly half of the cocaine smuggled from
    Colombia into the United States between 2003 and 2009--approximately
    912 tons with an estimated street value of $24 billion.
        Operation Pacific Rim originally targeted suspicious containerized
    shipments of fertilizer at Colombian seaports in Buenaventura and
    Cartagena. In September 2009, ICE Special Agents working closely with
    the DEA, Colombian National Police, and the SSP, intercepted $41
    million in bundles of shrink-wrapped bulk cash concealed within
    shipments of fertilizer intercepted at seaports in Colombia and Mexico.
        Subsequent to the $41 million seizure, Special Agents from ICE
    Attache offices in Bogota and Mexico City, in coordination with foreign
    law enforcement, expanded the scope of the investigation by identifying
    the bulk cash and drug smuggling routes utilized by the cartel. The
    investigation eventually covered three continents, resulting in the
    capture of the top leadership and other high-ranking members of the
    Pacific Rim Cartel. During the investigation, ICE developed a high-
    level and strategically positioned source of information who led to the
    seizure of an additional $122.8 million in illicit bulk currency, 3.3
    tons of cocaine, $179 million in assets, and $37 million in criminal
    forfeiture warrants. ICE's efforts helped lead to multiple arrests and
    convictions.
    Transnational Gangs
        Operation Community Shield, an ICE-led anti-gang program, combines
    ICE's expansive statutory and administrative enforcement authorities
    with our law enforcement partnerships. Community Shield increases
    public safety by combating the growth and proliferation of
    transnational gangs in communities throughout the United States, and
    ICE conducts targeted enforcement operations using criminal arrest and
    administrative removal authorities against gang members, thereby
    disrupting the ability of gangs to operate. In addition, these targeted
    enforcement operations lead to the development of information critical
    to the successful prosecution of transnational gang members for
    conspiracy and racketeering-related violations.
        Since its inception in 2005, Operation Community Shield has led to
    the arrest of more than 20,000 gang members and associates, 7,699 of
    whom had prior violent criminal histories. In addition, 249 gang
    leaders have been arrested and 1,646 weapons have been seized.
        In February 2010, ICE formally established the first international
    Operation Community Shield Task Force (OCSTF) in Tegucigalpa, Honduras,
    to work to disrupt criminal gang activity before it reaches our
    borders. This task force is comprised of ICE Special Agents and
    Honduras National Police (HNP) vetted officers and intelligence
    analysts who work full-time to address the proliferation of
    transnational gangs.
        In May 2010, the OCSTF Honduras conducted a 3-day anti-gang
    suppression operation deemed ``Operation Double Impact,'' to target
    both the Mara-13 and Mara-18 gangs in Honduras. The first phase of the
    operation targeted gang members within the prison system and resulted
    in the identification and documentation of approximately 30 gang
    members and the seizure of dozens of knives, narcotics, and other
    restricted items. The second phase of the operation consisted of
    simultaneous search warrants and other enforcement efforts at a market
    known as Comayaguela Market. Officers arrested 33 gang members for
    numerous Honduras criminal violations, and seized six firearms,
    narcotics, one vehicle, and over 1.8 million counterfeit DVDs and CDs
    with an estimated street value of more than $2 million.
        In February 2011, ICE completed ``Project Southern Tempest,'' the
    largest-ever Homeland Security Investigations-led National initiative
    targeting gangs with ties to Mexican drug trafficking organizations.
    The ICE National Gang Unit initiated Project Southern Tempest under the
    auspices of Operation Community Shield to combat the National security
    and public safety threats posed by transnational street gangs
    conducting business on behalf of Mexican drug trafficking organizations
    in the United States. Southern Tempest was executed in 168 U.S. cities
    side by side with 173 of our Federal, State, and local law enforcement
    partners, and led to the arrest 678 gang members and associates. More
    than 46 percent of those arrested during this operation were members or
    associates of gangs with ties to Mexican trafficking organizations. Of
    those arrested, 447 were charged with criminal offenses and 322 had
    previous violent criminal histories. Southern Tempest also led to
    several significant seizures from gang members and associates,
    including 86 firearms.
                   initiatives with the government of mexico
        In coordination with the Department of State, ICE is expanding its
    law enforcement training and outreach programs in Mexico and
    strengthening our efforts to curb illicit activity at the border. ICE
    coordinates multiple initiatives that involve direct coordination with
    the Government of Mexico.
        ICE is enabling Mexican law enforcement officials to perform their
    duties more effectively by providing training and technical assistance.
    We have provided training on numerous topics--including arms
    trafficking, cyber crimes, basic criminal investigative methods,
    special investigative techniques, global trafficking in persons, child
    sex exploitation, information-sharing platform training, ethics, and
    gang investigations--to SSP officers, among others. We remain committed
    to our cross-training efforts to build the investigative capacity of
    Mexican law enforcement entities.
        In August 2007, the Mexican Tax Administration Service (SAT),
    Mexican Customs, CBP, and ICE signed a Bilateral Strategic Plan to
    fight cross-border crime. This Plan enabled ICE to begin an
    unprecedented investigative training course for Mexican Customs
    enforcement personnel, modeled after the ICE Special Agent training, to
    prepare Mexican Customs officials to assume expanded investigative
    responsibilities. The training improves bilateral information sharing
    and investigative efforts to stem the cross-border flow of illegal
    contraband.
        ICE is also sharing critical information with Mexican authorities
    to assist them in their fight against drug trafficking organizations.
    On March 23, 2010, Secretary Napolitano signed an agreement with
    Interior Secretary Gomez-Mont and Secretary of Public Safety General
    Garcia Luna in Mexico that formalizes DHS's effort to share criminal
    history information electronically with Mexican law enforcement
    regarding Mexican nationals who have been convicted of certain felonies
    in the United States and who are being repatriated from the United
    States. We worked closely with DOJ and the FBI to ensure that all
    parties adhere to regulations on the sharing of this criminal record
    information.
        In May 2008, ICE established a Trade Transparency Unit with Mexico
    to help identify criminal networks using the trade system to launder
    illicit proceeds. Through this initiative, ICE and Mexico Customs,
    under the Mexico Finance Ministry, share trade transaction data--
    providing critical information that is used to initiate and support
    international criminal investigations related to money laundering,
    trade fraud, and other criminal activity.
                                   conclusion
        Thank you again for the opportunity to appear before you today and
    for your continued support of ICE and its law enforcement mission. ICE
    is committed to stemming cross-border criminal organizations through
    the various efforts I have discussed today. I appreciate your interest
    in these important issues.
        I would be pleased to answer any questions you may have.

        Mr. McCaul. Thank you, Mr. Alvarez. Let me just personally
    say thank you for your service and your colleagues who really
    put themselves in harm's way every day. So thank you for that.
        Mr. Nichols.

      STATEMENT OF BRIAN A. NICHOLS, DEPUTY ASSISTANT SECRETARY,
    INTERNATIONAL NARCOTICS LAW ENFORCEMENT AFFAIRS, DEPARTMENT OF
                                 STATE

        Mr. Nichols. Chairman McCaul, Ranking Member Keating, and
    other distinguished Members of the subcommittee, thank you for
    the opportunity to discuss joint U.S. and Mexican efforts to
    combat transnational criminal organizations, build effective
    law enforcement institutions, and address the underlying causes
    of violence in Mexico. I will make a brief oral statement and
    ask that the written statement be entered into the record.
        We face an enormous challenge as Mexican cartels control
    some 95 percent of the cocaine that reaches our streets. These
    cartels have expanded their tentacles into extortion,
    kidnapping, car theft, human trafficking, counterfeiting, and
    any other illicit enterprise that they can think of. The growth
    in Mexican organized crime and its control of the drug trade
    from cultivation in the Andes, transshipment through Central
    America, and its street-level distribution in our country
    presents tremendous challenges.
        In the face of brutal violence that has seen over 36,000
    murders over the last 4 years, the Mexican government and
    people have been unflagging in their commitment to root out
    drug trafficking. In doing so they have worked with us in ways
    that would have been unimaginable a decade ago.
        I spent the majority of my 22 years in the foreign service
    working in the hemisphere, including tours in Mexico, Colombia,
    El Salvador, and Peru. I can state categorically that the
    cooperation between the United States and Mexico in addressing
    the threats that we face has never been better.
        Mr. Chairman, you and your colleagues have been
    instrumental in this effort by providing the resources
    necessary to take on these criminal organizations and aid
    Mexico in its fight by appropriating over $1.5 billion in
    support of the Merida Initiative. To date, we have delivered
    over $400 million in assistance; during the course of 2011 we
    will deliver another $500 million in assistance. With regard to
    international narcotics control and law enforcement funding, we
    have already obligated over 80 percent of the just over $1
    billion appropriated since Merida began.
        Mexico, too, has invested substantial financial resources,
    including approximately $10.7 billion in 2011 alone to build
    its law enforcement and judicial capacity. The resulting Merida
    Initiative includes more than 50 separate assistance projects
    implemented by State, USAID, the Department of Justice, and law
    enforcement agencies such as ICE, CBP, ATF, and DEA.
        It also includes equipment and material resources that the
    Mexican government has requested from us. We have already
    delivered 11 helicopters with five more aircraft to follow this
    year.
        We have provided sophisticated computer systems for police,
    prosecutors, financial analysis experts, and customs officials.
    We have delivered 24 mobile non-intrusive inspection systems.
        To build the human capacity that Mexico needs we have
    trained over 4,500 federal police as well as thousands of
    prosecutors, judges, customs officials, and corrections
    officers. In the coming year we will extend our training to
    thousands more vetted state police prosecutors and judges.
        Homeland Security is a crucial partner in this fight. The
    commitment, knowledge, and courage of our colleagues in the
    Department of Homeland Security are an inspiration to us and
    our Mexican allies.
        In response to the brutal and cowardly murder of ICE
    Special Agent Jaime Zapata and the attempted murder of ICE
    Special Agent Victor Avila the Departments of State, Justice,
    and Homeland Security announced a reward of up to $5 million
    for information leading to the arrest and conviction of those
    responsible. We in the Department of State Bureau of
    International Narcotics and Law Enforcement are proud to
    administer that program and look forward to swift results. The
    government of Mexico has offered its own reward of up to 10
    million pesos in this case.
        The Merida Initiative is a long-term endeavor that
    reaffirms our commitment to improving the security and safety
    of citizens in both the United States and Mexico, builds upon
    our deep ties, and emphasizes mutual respect and mutual
    responsibility in meeting common challenges. We will continue
    to work closely with the government of Mexico to defeat and
    dismantle these criminal gangs and provide a safe and
    prosperous future for both our peoples.
        Chairman McCaul, Ranking Member Keating, distinguished
    Members, thank you again for this opportunity and your support
    for this important initiative. I stand ready to address any
    questions that you may have.
        [The statement of Mr. Nichols follows:]
                     Prepared Statement of Brian A. Nichols
                                 March 31, 2011
        Chairman McCaul, Ranking Member Keating, and Members of the
    subcommittee, thank you for the opportunity to discuss the Department
    of State's support for and partnership with the Government of Mexico
    and its efforts to combat illicit crime, and drug trafficking
    organizations (DTOs).
        Mexican DTOs control the flow of approximately 95 percent of
    cocaine and significant amounts of other drugs that flood neighborhoods
    throughout the United States each year. Because U.S. demand for these
    drugs is a principal source of revenue for Mexican DTOs, we have a
    shared responsibility for, and interest in, confronting this threat.
        In 2007, the U.S. and Mexican governments agreed to a significant
    collaboration to enhance Mexico's capacity to counter narcotics
    traffickers, and build effective justice sector institutions. The
    Department of State worked closely with the Government of Mexico (GOM)
    to develop programming and resource proposals that would accomplish our
    shared objectives. The resulting Merida Initiative includes more than
    50 separate assistance projects, implemented by the Department of
    State, USAID, and a number of U.S. Government law enforcement agencies,
    including U.S. Immigration and Customs Enforcement (ICE) and Customs
    and Border Protection (CBP) within the Department of Homeland Security
    (DHS), and the Bureau of Alcohol, Tobacco, Firearms, and Explosives
    (ATF) and Drug Enforcement Administration (DEA) within the Department
    of Justice (DOJ). Under Merida, we have provided significant technical
    assistance and equipment ranging from complex IT systems,
    communications gear, helicopters, and judicial reform programs that
    have strengthened the Government of Mexico's ability to degrade DTO
    activity.
                    situation in mexico and the gom response
        The Government of Mexico has tallied over 36,000 cartel-related
    deaths since President Calderon took office over 4 years ago, with over
    15,000 murders in 2010 alone. The violence is increasingly brazen, as
    attacks happen in public spaces and are increasingly targeting women
    and children. February's attack on two ICE agents that resulted in the
    death of U.S. Special Agent Jaime Zapata also took place in broad
    daylight along a busy highway. Certain regions in Mexico have also seen
    increased local street gang activity that is less subordinate to the
    established cartels, and more indiscriminate in targeting victims. It
    was one of these local gangs that murdered three people associated with
    the U.S. Consulate General in Ciudad Juarez in March 2010. Difficult
    economic conditions provide limited opportunities for Mexico's youth,
    which makes criminal activity an attractive option, despite the risks.
        Meanwhile, cartel activities have expanded into extortion,
    kidnapping, immigrant smuggling, protection rackets, and domestic drug
    retailing, making these illicit enterprises more profitable and violent
    than ever.
        To counter these disturbing trends, President Calderon and his
    administration have undertaken the most significant steps in Mexico's
    history to confront and dismantle illicit narcotics enterprises,
    including the wholesale reform of Mexico's justice sector, building
    institutions that will be able to deal with the DTO threat far into the
    future. President Calderon's administration has committed significant
    political capital and financial resources to this effort. Since the
    beginning of the Merida Initiative, the Government of Mexico has grown
    its financial commitment to this shared objective, increasing its
    spending on order, security, and justice projects from $69.6 billion
    pesos (approximately US$5.8 billion) in its 2008 budget to $131.9
    billion pesos (approximately $10.7 billion) in its 2011 budget.
    Mexico's 2011 budget for order, security, and justice projects is alone
    more than six times the $1.5 billion appropriated under the Merida
    Initiative.
        President Calderon has also made justice sector reforms a priority,
    including Federal, State, and local police, prosecutors, judges, and
    corrections systems. The centerpiece of these reforms is Mexico's
    transition from an inquisitorial civil code judicial system to an
    accusatorial system similar to our common law that uses transparent
    oral trials and relies more heavily on physical evidence. Under the
    constitutional reform, the new system must be implemented by 2016, but
    a major push will be needed if this deadline is to be met.
        Additional reforms are being implemented to ensure transparency and
    public accountability. For example, to mitigate pervasive corruption,
    Mexico has systematically removed thousands of government officials
    from duty and is developing extensive internal controls, including
    background checks and polygraphs, as well as enhanced standards for
    recruitment and professional integrity. The Secretariat of Public
    Security (SSP) manages Plataforma Mexico, a sophisticated computer
    system, which has automated and consolidated much of the public
    information records in Mexico to conduct more effective investigations,
    track criminals and prevent corruption. Mexican Customs is
    restructuring its career paths, instituting additional internal
    controls, removing corrupt contract workers and recruiting and training
    a higher caliber of officer. These examples are illustrative of the
    efforts that President Calderon has championed across all Mexican
    Government agencies.
                             the merida initiative
        U.S. foreign assistance to Mexico under the Merida Initiative is
    organized around a four pillar strategy that aims to: (1) Disrupt the
    capacity of organized crime to operate; (2) institutionalize reforms to
    sustain the rule of law and respect for human rights; (3) create a 21st
    Century border; and (4) build strong and resilient communities. Under
    each of these pillars and at each stage of programmatic development,
    the Department of State works directly with our Mexican partners to
    meet our shared objectives. While this substantial working-level
    coordination prolongs the timeline for program planning and execution,
    it is critically important to ensure that the Merida Initiative remains
    a Mexico-led program that will be sustainable.
        Since its inception, programming under the Initiative has yielded
    many concrete results. For example, U.S. and Mexico law enforcement
    cooperation against cartels has resulted in over 20 DTO leaders being
    arrested or killed since December 2009, including Mexico's operation
    targeting La Familia Michoacana in December 2010, which led to the
    reported death of its leader, Nazario Moreno. Mexico has also supported
    U.S. law enforcement operations named Xcellerator, Coronado, and
    Deliverance, that resulted in thousands of arrests of Mexico-linked
    traffickers in the United States. Today's unprecedented levels of
    bilateral law enforcement cooperation would likely not have been
    realized absent the Merida Initiative.
        Appropriately trained and vetted police are critical elements of
    Mexico's counternarcotics operations, but so too is the enhanced
    capability of the Government of Mexico to rapidly respond to law
    enforcement intelligence.
        Merida assistance has already provided 11 helicopters to Mexico:
    Eight Bell-412 helicopters to the Mexican Defense Secretariat (SEDENA)
    and three UH-60M Black Hawks to Mexico's Federal Police. A software
    package, laptops, and training provided to Mexico's Attorney General's
    Office under Merida, a Spanish language version of ATF's eTrace, traces
    the origin of captured firearms and has provided evidence that led to
    convictions of Arizona gang members who were trafficking weapons.
    Building on this initial success, the use of eTrace will soon be
    expanded to the Mexican Federal Police.
        As these examples illustrate, Merida programming has already
    yielded success. The Merida program recognizes that traditional police
    functions, while critically important, only represent one piece of the
    much larger criminal justice sector that we and our Mexican
    counterparts hope to enhance. Since the start of Merida, more than
    4,500 Mexican SSP officers have graduated from Merida-supported
    investigation training programs. These officers are now deployed
    throughout Mexico, transforming the way crimes are investigated and
    prosecuted at the Federal level. Merida is implementing a whole-of-
    justice sector approach where U.S. foreign assistance funds are used to
    train Federal police, prosecutors, and judges, and corrections
    officials, with a focus on training trainers. While most of the
    training to date has focused on Federal-level officials, we also
    recognize that since over 90% of crimes in Mexico are investigated and
    tried at the State and local level, significant investment also needs
    to be made to transform the institutions at those levels.
        Along our shared border we are working together to ensure that
    customs and migratory controls expedite the flow of legitimate trade
    and travelers, while allowing law enforcement authorities to prevent
    the illicit movement of drugs, guns, bulk cash, and people. Both
    governments are investing in new and expanded ports of entry. Merida
    funds have procured non-intrusive inspection equipment (NIIE),
    biometric immigration systems, canine inspection teams, and training
    for Mexico's border officials. We are also helping our Mexican partners
    establish a new customs academy, which will train customs enforcement
    officers.
        Finally, our assistance is also helping to support Mexican States
    to build strong and resilient communities, including programming
    already underway in Ciudad Juarez. USAID programming has already
    yielded a comprehensive baseline evaluation on the existing
    demographic, health, economic and social conditions in Juarez that has
    been shared with the GOM and posted on-line for the general public.
    USAID's youth program also provides safe spaces for disadvantaged young
    people, strengthening and expanding after-school and summer programs,
    and preparing Mexican youth for viable futures through self or salaried
    employment. Under the Mexican Government's Todos Somos Juarez program,
    the government has engaged local community groups to upgrade common
    spaces, keep youth out of criminal enterprises and to create new,
    positive role models. Merida programs are being designed for violence
    prevention and crime mapping, as well as substantial drug demand
    reduction programs that provide training and certification in drug
    treatment and prevention. An anonymous citizens' complaints project
    will provide more secure means for Mexican citizens to provide crime
    and corruption related tips to the Mexican police. In addition, culture
    of lawfulness projects are teaching values and ethics to a wide range
    of Mexican audiences, including the media, school children, and
    government employees.
                                 looking ahead
        Managing a program that has increased U.S. assistance to Mexico
    from $40 million/year to roughly $500 million/year is a complex
    undertaking. Since the Merida Initiative began, $408 million in
    assistance has been delivered to Mexico, including training,
    conferences, and other events for over 72,000 Mexican justice sector
    and civil society actors; 67 advanced non-intrusive inspection
    equipment devices; 318 polygraph machines; 11 aircraft; and many other
    items. The Mexican government is a full partner in this process, and
    our implementation of the Merida Initiative depends on Mexican
    concurrence with each and every element.
        To support our joint efforts, The State Department has increased
    its implementation and program staff from 21 people in 2008 to 112
    today in Washington and Mexico City. These officers develop programs,
    manage procurements, and coordinate activities with Government of
    Mexico counterparts, as well as provide oversight and accountability.
    For these reasons, we believe that the Merida Initiative is on a strong
    track. This calendar year we expect to deliver $500 million in
    assistance, including 5 of the 11 remaining aircraft provided under the
    Initiative, up to $100 million in non-intrusive inspection equipment,
    and over $100 million in critical IT equipment for Mexican
    institutions.
                                    closing
        The Four Pillar strategy has provided a balanced and flexible
    approach to our work in Mexico, incorporating programs that target
    cartels, build institutions, modernize the border, and build strong
    communities. It has also advanced our vision of a whole-of-government
    effort to provide specialized U.S. expertise to our Mexican
    counterparts in a peer-to-peer manner.
        Following the Government of Mexico's lead and our joint planning,
    we are currently expanding the focus of our assistance to State and
    local institutions. And after the delivery of sophisticated and
    expensive equipment peaks in 2011, we will begin to see the shift away
    from aircraft and other expensive equipment and towards supporting
    institutional reforms and capacity building through more training and
    technical assistance.
        The Merida Initiative is a long-term endeavor that reaffirms our
    commitment to improving the security and safety of citizens in both the
    United States and Mexico, builds upon our deep ties, and emphasizes
    mutual respect and responsibility in meeting challenges. We will
    continue to work closely with the Government of Mexico through the
    Merida Initiative and other avenues to achieve these goals.
        Thank you for your support of this important initiative. I look
    forward to your questions.

        Mr. McCaul. Thank you, Mr. Nichols.
        The Chair now recognizes Mr. Mora for his remarks.

       STATEMENT OF FRANK O. MORA, DEPUTY ASSISTANT SECRETARY OF
       DEFENSE, WESTERN HEMISPHERE AFFAIRS, DEPARTMENT OF DEFENSE

        Mr. Mora. Chairman McCaul, Ranking Member Keating, and
    Ranking Member Thompson, and Members of the committee, I would
    like to begin by thanking you for the opportunity to testify
    today and for your interest in U.S. defense cooperation with
    Mexico. I value the insights and work of this committee in
    ensuring the security of our homeland and in recognizing that
    an important part of this effort is to strengthen our
    relationship with critical partners such as Mexico. My hope is
    that I can help you in your work and by being--by being
    transparent in mine and that my testimony today is responsive
    in this regard.
        Mr. Chairman, Mexico is facing a serious challenge as it
    confronts transnational criminal organizations, also known as
    TCOs, and we admire President Calderon's commitment to the
    fight. Although we are concerned about the escalating violence
    we are confident that Mexico's democracy is strong.
        In fact, one important reason why TCOs have increasingly
    turned to violence and intimidation of law enforcement officers
    and the Mexican public is because the Government of Mexico has
    made progress in countering these organizations. As a result of
    these efforts several of the major drug trafficking
    organizations are fighting with each other to ensure survival
    while others have splintered into smaller intra-warring
    factions.
        Mr. Chairman, as you know, the U.S. Government's principal
    vehicle for coordinating security cooperation with Mexico is
    the Merida Initiative. The Department of Defense plays a
    supporting role to the Department of State and U.S. law
    enforcement agencies but is nonetheless working on a number of
    fronts to assist the Government of Mexico in its brave fight.
    In fact, I am pleased to report that U.S.-Mexico defense
    cooperation has reached unprecedented levels as of late.
        In February of last year we hosted the first of what we
    expect to be regular meetings of a bilateral defense working
    group with Mexico. Our hope is that this develops into a robust
    mechanism for structured, strategic dialogue. In its first
    meeting, for example, the Mexican military recommending the
    establishment of a subgroup to discuss the Mexico-Guatemala-
    Belize border region, and this group has already met twice.
        Increased information sharing and domain awareness
    capabilities are also critical components of our cooperation.
    We have made particularly impressive strides on this front by
    signing a number of agreements that will facilitate information
    sharing and improve domain awareness.
        The Department continues to partner with Mexican forces in
    their efforts to improve tactical and operational proficiency
    as well as their air mobility, maritime law enforcement,
    communications, reconnaissance, and associated capacity with
    training and technical support.
        As part of the Merida Initiative we have provided
    nonintrusive inspection equipment for mobile checkpoints;
    delivered eight Bell 412 transport helicopters for the Mexican
    Secretariat of National Defense, SEDENA; and accelerated the
    anticipated delivery of three UH-60M Blackhawks for the Mexican
    Secretariat of the Navy, SEMAR, accelerated by 2 years to
    September of this year. Our delivery of four CASA 235 maritime
    surveillance aircraft remains on target.
        The U.S. Navy, working with the Coast Guard and other
    partners, has improved cooperation with SEDENA and SEMAR on
    aerial, maritime, littoral, and amphibious counternarcotics
    operations. The frequency of planned U.S.-Mexico maritime
    counternarcotics cooperative operations increased from 4 in
    2008, 10 in 2009, and 24 last year.
        In addition, and as a complement to our efforts under
    Merida, the Department of Defense counternarcotics program
    estimates that it will program approximately $51 million in
    fiscal year 2011 to support Mexico. The Department's C.N.--
    counternarcotics--support has concentrated on helping Mexican
    forces improve their air mobility, maritime law enforcement,
    and reconnaissance capacities.
        This allocation is a dramatic increase from the previous
    funding levels. Before 2009, for example, funding for Mexico
    was closer to $3 million a year.
        Mr. Chairman, I would like to close by emphasizing that
    this is a snapshot of our cooperation with the Government of
    Mexico, but I hope it has provided you and the members of this
    committee with a sense of the strategic importance that the
    Department of Defense places on its cooperation with Mexico.
        Although I believe that the initiatives described above
    strongly demonstrate our commitment to supporting the Mexican
    government in its efforts to combat these violent transnational
    criminal groups, I also want to underscore that the Department
    of Defense assists and collaborates with the Government of
    Mexico in response to its requests. As Secretary Gates has
    noted previously, we will take our lead from the Government of
    Mexico on the speed and extent of our cooperation.
        Thank you again, Mr. Chairman, and I look forward to your
    questions and the questions of this committee.
        [The statement of Mr. Mora follows:]
                      Prepared Statement of Frank O. Mora
                                 March 31, 2011
        Mr. Chairman and Members of the committee: I would like to begin by
    thanking you for the opportunity to testify today and for your interest
    in U.S. defense cooperation with Mexico. I value the insights and work
    of this committee in ensuring the security of our homeland and
    recognizing that an important part of this effort is to strengthen our
    relationships with critical partners such as Mexico. My hope is that I
    can help you in your work by being transparent in mine, and that my
    testimony today is responsive in this regard.
        Mexico is facing a serious challenge as it confronts transnational
    criminal organizations (TCOs) that seek to operate with impunity inside
    Mexico, and we admire President Calderon's commitment to the fight.
    Although we are concerned about the escalating violence, we are
    confident that Mexico's democracy is strong. In fact, one important
    reason why TCOs have increasingly turned to violence and intimidation
    of law enforcement officers and the Mexican public is because the
    Government of Mexico has made progress in countering the TCOs. As a
    result of these efforts, several of the major drug trafficking
    organizations are fighting with each other to ensure survival while
    others have splintered into smaller intra-warring factions.
        Mr. Chairman, as you know, the U.S. Government's principal vehicle
    for coordinating security cooperation with Mexico is the Merida
    Initiative. The Defense Department plays a supporting role to the
    Department of State and U.S. law enforcement agencies, but is
    nonetheless working on a number of fronts to assist the Government of
    Mexico in its brave fight. Under Merida and other cooperative programs,
    DoD provides training, information sharing, and operational support to
    Mexican military and other security forces, as well as to U.S. law
    enforcement agencies' activities in Mexico. I am pleased to report that
    U.S.-Mexico defense cooperation has reached unprecedented levels as of
    late.
        In February 2010 we hosted the first of what we expect to be
    regular meetings of a Defense Bilateral Working Group with Mexico. Our
    hope is that this develops into a robust mechanism for structured,
    strategic dialogue. In this first meeting, for example, one promising
    initiative that the Mexican military recommended was the establishment
    of a sub-group to discuss the Mexico-Guatemala-Belize border region,
    and this sub-group has already met twice. Addressing security issues in
    this region is becoming even more important as TCOs seek to diversify
    their criminal activities and extend their presence throughout the
    region, which is why we are working in conjunction with the State
    Department, U.S. Northern Command, and U.S. Southern Command to develop
    a joint security effort in the border area of these three countries.
        Increased information sharing and multi-domain awareness
    capabilities are also critical components of our cooperation, and are
    indispensable as we work to ensure that our efforts on both sides of
    the border and throughout the region are coordinated. We have made
    particularly impressive strides on this front by signing a number of
    agreements that will facilitate information sharing and improve domain
    awareness. The Department also provides training and exchanges of
    expertise to help Mexican forces learn how to plan and carry out multi-
    agency intelligence driven support to law enforcement efforts against
    TCOs.
        The Department continues to partner with Mexican forces in their
    efforts to improve tactical and operational proficiency, as well as
    their air mobility, maritime law enforcement, communications,
    reconnaissance, and associated capacity with training and technical
    support. As part of the Merida Initiative, we have provided non-
    intrusive inspection equipment for mobile checkpoints, delivered eight
    Bell 412 transport helicopters for the Mexican Secretariat of National
    Defense (SEDENA), and accelerated the anticipated delivery of three UH-
    60M Blackhawks for the Mexican Secretariat of the Navy (SEMAR) by 2
    years to September of this year. Our delivery of four CASA 235 maritime
    surveillance aircraft remains on target.
        The U.S. Navy, working with the Coast Guard and other partners, has
    increased cooperation with SEDENA and SEMAR on aerial, maritime,
    littoral, and amphibious counternarcotics operations. The frequency of
    planned U.S.-Mexico maritime counternarcotics cooperative operations
    increased from four in 2008 to 10 in 2009 to 24 in 2010. I am also
    encouraged that SEDENA posted a liaison officer at U.S. Northern
    Command headquarters in 2009, and SEMAR has liaison officers posted at
    Joint Inter-Agency Task Force (JIATF)--South and Fleet Forces Command,
    in addition to U.S. Northern Command.
        In addition, and as a complement to our efforts under Merida, the
    Defense Department's counternarcotics (CN) program estimates that it
    will program approximately $51 million in fiscal year 2011 to support
    Mexico. The Department's CN support has concentrated on helping Mexican
    forces improve their air mobility, maritime law enforcement, and
    reconnaissance capacities. This allocation is a dramatic increase from
    previous funding levels for Mexico. Before 2009, for example, funding
    for Mexico was closer to $3 million a year.
        Finally, I think it is appropriate to note that the Government of
    Mexico recognizes as a priority the protection of the human rights of
    its citizens, especially as Mexico's armed forces have joined law
    enforcement agencies in the serious fight against violent criminal
    organizations. The U.S. Northern Command has therefore partnered with
    SEDENA and SEMAR to increase human rights training by conducting
    executive seminars.
        Mr. Chairman, I would like to close by emphasizing that this is a
    snapshot of our cooperation with the Government of Mexico, but I hope
    it has provided you with a sense of the strategic importance that the
    Defense Department places on its cooperation with Mexico. Although I
    believe that the initiatives described above strongly demonstrate our
    commitment to supporting the Mexican government in its efforts to
    combat these violent transnational criminal groups, I also want to
    underscore that the Defense Department assists and collaborates with
    the Government of Mexico to address its requests of us. As Secretary
    Gates has noted previously, we will take our lead from the Government
    of Mexico on the speed and the extent of our cooperation.
        Finally, on behalf of the Department of Defense, I would like to
    reiterate that thanks to the tireless work of the U.S. Department of
    Homeland Security, the U.S. Department of Justice, and other U.S.
    Federal, State, and local law enforcement and other authorities, we
    have no evidence of so-called ``spillover violence'' into the United
    States. The Department of Defense is committed to providing continued
    support, as requested, to the law enforcement agencies that protect the
    safety of U.S. citizens in our country. Thank you, and I very much look
    forward to your questions.

        Mr. McCaul. Thank you, Mr. Mora.
        The Chair now recognizes Dr. Finklea for her testimony.

       STATEMENT OF KRISTIN M. FINKLEA, ANALYST, DOMESTIC SOCIAL
            POLICY DIVISION, CONGRESSIONAL RESEARCH SERVICE

        Ms. Finklea. Chairman McCaul, Ranking Member Keating, and
    Members of the subcommittee, my name is Kristin Finklea and I
    am an analyst at the Congressional Research Service. I am
    honored to appear before the subcommittee today. As requested
    by the subcommittee, my testimony will provide information on
    drug trafficking-related violence and possible spillover
    violence along the Southwest border.
        Since CRS does not independently collect data the data
    referenced in my testimony come from data that are made
    publicly available by the FBI Uniform Crime Reporting program.
    My testimony today highlights information that is discussed in
    CRS report entitled, ``Southwest Border Violence: Issues in
    Identifying and Measuring Spillover Violence,'' that I would
    like to have included for the record.
        My testimony is limited to information contained in this
    report as well as analyses that my colleagues and I have done
    in relation to this issue. As is our policy, CRS takes no
    position on legislative or policy proposals themselves.
        As we all know, drug trafficking-related violence within
    and between the drug trafficking organizations in Mexico has
    escalated. Mexico's most violent city, Ciudad Juarez, sits
    directly across the border from El Paso, Texas.
        The violence in Mexico has generated concern that it might
    spill over into the United States. Although anecdotal reports
    have been mixed, U.S. Federal officials have not reported a
    measurable spike in drug trafficking-related violence in the
    United States.
        However, they acknowledge that the prospect is a concern.
    In fact, one central concern for policymakers is the potential
    for what has been termed ``spillover violence,'' an increase in
    drug trafficking-related violence in the United States.
        The interagency community has defined spillover violence as
    violence targeted primarily at civilians and government
    entities excluding trafficker-on-trafficker violence. Other
    experts and scholars, however, have recognized trafficker-on-
    trafficker violence as central to spillover. Defining spillover
    violence is just one challenge is assessing this violence.
        CRS is unaware of any comprehensive, publicly available
    data that can definitively answer the question of whether there
    has or has not been a significant spillover of drug
    trafficking-related violence into the United States. However,
    CRS has examined violent crime data from the FBI's UCR program
    to assess whether it provides insight into the question of
    spillover violence. CRS has observed that UCR data cannot
    provide evidence for either the presence of spillover violence
    or a lack thereof.
        Looking at UCR data is like looking through a window. This
    window is fairly opaque and relatively narrow.
        Through this opaque window you can see one level of data.
    However, there are more data with greater levels of specificity
    that you cannot clearly see through this window.
        The violent crime rate, for example, you can see through
    the window. It is a compilation of violent crimes both related
    and unrelated to drug trafficking.
        But the window does not allow you to see further to
    determine the proportion of violent crimes that are related to
    drug trafficking. Within the violent crime window an increase
    in drug trafficking-related violent crime could be masked by a
    decrease in those violent crimes not related to trafficking or
    vice versa.
        Through this narrow window you can view a specific subset
    of crime. You cannot, however, see the full range of crimes.
        The UCR window allows you to see data for eight different
    offenses--some violent crimes, some property crimes. Data for
    other crimes lie outside the narrow window. Kidnapping, one
    crime often cited as anecdotal evidence of spillover violence,
    is not within the UCR crime window.
        In closing, publicly available data at this time do not
    allow CRS to draw definitive conclusions about trends in drug
    trafficking-related violence spilling over from Mexico into the
    United States.
        I appreciate the opportunity to appear before you today and
    I look forward to answering any questions you may have. Thank
    you.
        [The statement of Ms. Finklea follows:]
                    Prepared Statement of Kristin M. Finklea
        Southwest Border Violence: Issues in Identifying and Measuring
                               Spillover Violence
                                January 25, 2011
                                  introduction
        There has been an increase in the level of drug trafficking-related
    violence within and between the drug trafficking organizations (DTOs)
    in Mexico--a country with which the United States shares a nearly
    2,000-mile border.\1\ Estimates have placed the number of drug
    trafficking-related deaths in Mexico since December 2006 at over
    30,000.\2\ Some have placed the death toll for 2010 alone at over
    11,600.\3\ Further, Mexico's most violent city, Ciudad Juarez--with
    over 3,000 murders in 2010--is located directly across the border from
    El Paso, TX. This violence has generated concern among U.S. policy
    makers that the violence in Mexico might spill over into the United
    States. Currently, U.S. Federal officials deny that the recent increase
    in drug trafficking-related violence in Mexico has resulted in a
    spillover into the United States, but they acknowledge that the
    prospect is a serious concern.\4\ As an extension of its
    counternarcotics policy, as well as in response to the possibility of
    violence spillover, the U.S. Government is supporting Mexico's
    crackdown campaign against drug cartels in Mexico through bilateral
    security initiatives, including the Merida Initiative.\5\ It is also
    enhancing border security programs and reducing the movement of
    contraband (drugs, money, and weapons) in both directions across the
    Southwest border.
    ---------------------------------------------------------------------------
        \1\ See, for example, ``Congress Discusses Increasing Drug Violence
    in Mexico,'' Voice of America, March 11, 2009. For more information on
    the drug-related violence in Mexico, see CRS Report R41576, Mexico's
    Drug Trafficking Organizations: Source and Scope of the Rising
    Violence, by June S. Beittel.
        \2\ ``Mexican drug war deaths surpass 30,100,'' CNN, December 17,
    2010, http://articles.cnn.com/2010-12-17/world/ mexico.violence_1_drug-
    war-border-city-drug-related-violence?_s=PM:WORLD.
        \3\ Trans-Border Institute (TBI), Justice in Mexico December 2010
    News Report. Reforma is the generally respected source of data on drug
    trafficking-related deaths in Mexico. For further explanation of why
    these data are preferred over other sources, see TBI, ``Drug Violence
    in Mexico: Data and Analysis from 2001-2009,'' January, 2010, http://
    www.justiceinmexico.org/resources/pdf/drug_violence.pdf. There have
    been varying reports about the actual number of drug-related deaths.
    For instance, the Washington Post also tracks this number, and the data
    are available at http://www.washingtonpost.com/wp-dyn/content/graphic/
    2009/04/01/GR2009040103531.html.
        \4\ See for example, U.S. Department of Homeland Security,
    ``Remarks by Secretary Napolitano at the Border Security Conference,''
    press release, August 11, 2009, http://www.dhs.gov/ynews/speeches/
    sp_1250028863008.shtm and Ramon Bracamontes, ``CBP Chief Assesses the
    Border: Alan Bersin, in El Paso, Assures Safety, Backs Mexico's
    Fight,'' El Paso Times, January 6, 2011.
        \5\ The Merida Initiative is a multi-year initiative for $1.4
    billion in U.S. counterdrug and anticrime assistance to Mexico and
    Central America. The details of the Merida Initiative will not be
    discussed in this report; for more information, please see CRS Report
    R41349, U.S.-Mexican Security Cooperation: the Merida Initiative and
    Beyond, by Clare Ribando Seelke and Kristin M. Finklea.
    ---------------------------------------------------------------------------
        When discussing drug trafficking-related violence in the United
    States, one important point to note is that the mere presence of
    Mexican drug trafficking organizations in the United States is not in
    and of itself an indication of the spillover of Mexican drug
    trafficking-related violence in the United States. While their presence
    may be an indication of the drug problem in general, it does not
    necessarily reflect activity directly tied to the recent violence seen
    in Mexico. The DTOs (Mexican and others) have been developing
    sophisticated illicit drug smuggling and trafficking networks for
    years. These activities engender violence and associated criminal
    activity, not just along the border but in other areas throughout the
    country, such as along domestic interstate distribution networks and in
    major metropolitan areas.\6\ The United States has experienced levels
    of drug trafficking-related crime for many years.\7\ The immediate
    question confronting policy makers is whether the increasing violence
    between the drug trafficking organizations in Mexico affects either the
    level or character of drug trafficking-related violence in the United
    States. A related question is whether evidence of spillover violence
    would necessitate a policy response from Congress qualitatively
    different from the current efforts to combat drug trafficking.
    ---------------------------------------------------------------------------
        \6\ Drug Enforcement Administration, Statement of Joseph M. Arabit
    Special Agent in Charge, El Paso Division, Regarding ``Violence Along
    the Southwest Border'' Before the House Appropriations Committee,
    Subcommittee on Commerce, Justice, Science and Related Agencies, March
    24, 2009, http://www.usdoj.gov/dea/speeches/s032409.pdf.
        \7\ The Organized Crime Drug Enforcement Task Forces (OCDETF)
    Program, for instance, has been operating since 1982 to combat major
    drug trafficking and money laundering organizations. For more
    information on the OCDETF Program, see http://www.justice.gov/dea/
    programs/ocdetf.htm. The trends in drug trafficking-related crime
    across the United States are currently unknown because Federal law
    enforcement agencies do not systematically track and report drug
    trafficking-related crimes.
    ---------------------------------------------------------------------------
        This report focuses on how policy makers would identify any
    spillover of drug trafficking-related violence into the United States.
    This report provides: (1) An overview of Mexican drug trafficking
    organization structures, how they conduct business, and the
    relationship between the drug trafficking organizations in Mexico and
    their partnerships operating here in the United States; (2) a
    discussion of the illicit drug trade between Mexico and the United
    States, as well as a discussion of factors implicated in drug
    trafficking-related violence; (3) an analysis of the possible nature of
    any spillover violence that may arise, as well as issues involved in
    accurately identifying and measuring such violence; and (4) an
    evaluation of available crime rate data and a discussion of how this
    data may or may not reflect changes in drug trafficking-related crime.
    This report does not include a discussion of illicit drug enforcement
    issues,\8\ nor does it include specific policy options that may be
    considered to stem a potential uptick in drug trafficking-related
    violence. The Appendix describes selected U.S. efforts undertaken to
    address the possibility of spillover violence and the drug control
    problem.
    ---------------------------------------------------------------------------
        \8\ For more information, see archived CRS Report R40732, Federal
    Domestic Illegal Drug Enforcement Efforts: Are They Working? by Celinda
    Franco.
    ---------------------------------------------------------------------------
      the southwest border region and the illicit drug trade between the
                            united states and mexico
        The nature of the conflict between the Mexican DTOs in Mexico has
    manifested itself, in part, as a struggle for control of the smuggling
    routes into the United States.\9\ Therefore, the prospects for
    spillover violence are most keenly anticipated in the Southwest border
    (SWB) region of the United States because the region represents the
    arrival zone for the vast majority of illicit drugs that are smuggled
    into the country. The size, geography, and climate of the SWB region
    have long presented unique challenges to law enforcement. The southern
    border with Mexico stretches nearly 2,000 miles in length, is sparsely
    populated in some areas, and is dotted with legitimate crossing points
    (ports of entry)--both large and small. The National Drug Threat
    Assessment, 2008, summarized the illicit drug threat scenario along the
    SWB in stark terms:
    ---------------------------------------------------------------------------
        \9\ In addition, the drug-related violence in Mexico is also
    resulting from a struggle between the drug trafficking organizations
    and the Mexican government attempting to crack down on the DTOs. For
    more information, see Scott Stewart and Alex Posey, Mexico: The War
    with the Cartels in 2009, Stratfor Global Intelligence, November 9,
    2009, http://www.stratfor.com/weekly/20091209_mexico_war_cartels_2009.

    ``The Southwest Border Region is the most significant national-level
    storage, transportation, and transshipment area for illicit drug
    shipments that are destined for drug markets throughout the United
    States. The region is the principal arrival zone for most drugs
    smuggled into the Unites States; more illicit drugs are seized along
    the Southwest Border than in any other arrival zone. Mexican DTOs have
    developed sophisticated and expansive drug transportation networks
    extending from the Southwest Border to all regions of the United
    States. They smuggle significant quantities of illicit drugs through
    and between ports of entry (POEs) along the Southwest Border and store
    them in communities throughout the region. Most of the region's
    principal metropolitan areas, including Dallas, El Paso, Houston, Los
    Angeles, Phoenix, San Antonio, and San Diego, are significant storage
    locations as well as regional and national distribution centers.
    Mexican DTOs and criminal groups transport drug shipments from these
    locations to destinations throughout the country.''\10\
    ---------------------------------------------------------------------------
        \10\ U.S. Department of Justice, National Drug Intelligence Center,
    National Drug Threat Assessment, 2008, Product No. 2007-Q0317-003,
    October 2007, p. v, http://www.usdoj.gov/ndic/pubs25/25921/25921p.pdf.
    Hereinafter, NDTA, 2008.

        The most recent threat assessment indicates that the Mexican DTOs
    pose the greatest drug trafficking threat to the United States.\11\
    Demand for illicit drugs in the United States partly drives this
    threat.
    ---------------------------------------------------------------------------
        \11\ U.S. Department of Justice, National Drug Intelligence Center,
    National Drug Threat Assessment 2010, Product No. 2010-Q0317-001,
    February 2010, http://www.justice.gov/ndic/pubs38/38661/38661p.pdf.
    Hereinafter, NDTA, 2010.
    ---------------------------------------------------------------------------
                     demand for drugs in the united states
        The United States is the largest consumer of illegal drugs and
    sustains a multi-billion dollar market in illegal drugs.\12\ According
    to the Central Intelligence Agency, the United States is the largest
    consumer of Colombian-produced cocaine and heroin, as well as a large
    consumer of Mexican-produced heroin, marijuana, and
    methamphetamine.\13\
    ---------------------------------------------------------------------------
        \12\ Oriana Zill and Lowell Bergman, ``Do the Math: Why the Illegal
    Drug Business is Thriving,'' PBS Frontline, http://www.pbs.org/wgbh/
    pages/frontline/shows/drugs/.
        \13\ U.S. Central Intelligence Agency, World Fact Book, available
    at https://www.cia.gov/library/publications/the-worldfactbook/
    index.html.
    ---------------------------------------------------------------------------
        The latest National Household Survey on Drug Use and Health
    (NSDUH),\14\ in 2008, surveyed individuals aged 12 and older regarding
    their drug use during the previous month. Survey results indicated that
    an estimated 20.1 million individuals were current (past month) illegal
    drug users, representing 8% of this population. This percentage of
    users had remained relatively stable since 2002.\15\ Among these drug
    users, marijuana was the most commonly used drug, with an estimated
    15.2 million users (6.1% of the population), followed by nonmedical use
    of prescription-type psychotherapeutic drugs (6.2 million users, or
    2.5% of individuals). The survey also estimated that there were 1.9
    million users of cocaine (0.7% of Americans), as well as 1.1 million
    users of hallucinogens (0.4% of the population)--of which 555,000
    reported use of Ecstasy. Results also estimated 314,000 methamphetamine
    users.
    ---------------------------------------------------------------------------
        \14\ NSDUH is an annual survey of approximately 67,500 people,
    including residents of households, noninstitutionalized group quarters,
    and civilians living on military bases. The survey is administered by
    the Substance Abuse and Mental Health Services Administration of the
    U.S. Department of Health and Human Services and is available at http:/
    /oas.samhsa.gov/NSDUHlatest.htm.
        \15\ According to the NSDUH, within the period 2002-2008, the
    annual percentage of illicit drug users in the 12 and older age group
    ranged from 7.9% to 8.3%.
    ---------------------------------------------------------------------------
                      supply of illegal drugs from mexico
        Mexican DTOs are the major suppliers and key producers \16\ of most
    illegal drugs smuggled into the United States across the SWB. Moreover,
    Mexico is the major transit country for cocaine, according to the U.S.
    State Department; as much as 90% of the cocaine consumed in the United
    States comes through Mexico.\17\ According to the National Drug
    Intelligence Center's (NDIC's) 2010 National Drug Threat Assessment,
    cocaine availability was lower in 2007, 2008, and 2009 (relative to
    previous years) in certain areas of the United States for a number of
    reasons, including cocaine eradication, cocaine seizures, increased
    worldwide demand for cocaine, pressure on drug trafficking
    organizations in Mexico, inter-cartel violence, and border
    security.\18\ While cocaine availability decreased, the availability of
    heroin, marijuana, methamphetamine, and MDMA remained and even
    increased in some areas.\19\
    ---------------------------------------------------------------------------
        \16\ Mexican DTOs distribute cocaine (produced primarily in
    Colombia), and they produce as well as distribute heroin,
    methamphetamine, and marijuana.
        \17\ U.S. Department of State, Bureau for International Narcotics
    and Law Enforcement Affairs, 2009 International Narcotics Control
    Strategy Report (INCSR), vol. 1, March 2009, p. 414.
        \18\ NDTA, 2010.
        \19\ Ibid., p. 27.
    ---------------------------------------------------------------------------
        In addition to controlling most of the wholesale cocaine
    distribution in the United States, Mexican DTOs also control more of
    the wholesale distribution of heroin methamphetamine and marijuana
    distribution than other major drug trafficking organizations in the
    United States. In 2008, there was an increase in heroin produced in
    Mexico and a subsequent increase in its availability in the United
    States. With respect to methamphetamine, there was a decline in
    seizures of Mexican-produced methamphetamine beginning in 2006 and
    continuing in 2007, in part because of Mexican import restrictions on
    precursor drugs beginning in 2005, as well as because some Mexican-
    based methamphetamine producers have more recently moved their
    laboratories into the United States.\20\ However, by 2008, the DTOs had
    circumvented the Mexican chemical control laws and were using non-
    ephedrine based production methods, including the phenyl-2-propanone
    (P2P) method.\21\ This has enabled a subsequent uptick in Mexican
    methamphetamine flow into the United States. Marijuana availability in
    the United States has also increased due to factors such as rising
    marijuana production in Mexico, increasing marijuana cultivation in the
    United States led by Mexican DTOs, and decreasing marijuana eradication
    in Mexico.\22\
    ---------------------------------------------------------------------------
        \20\ U.S. Department of Justice, National Drug Intelligence Center,
    National Drug Threat Assessment 2009, Product No. 2008-Q0317-005,
    December 2008, p. 9, http://www.usdoj.gov/ndic/pubs31/31379/31379p.pdf.
    Hereinafter, NDTA, 2009.
        \21\ NDTA, 2010, p. 34.
        \22\ Ibid., p. 36.
    ---------------------------------------------------------------------------
        The true quantity of drugs produced and transported by Mexican
    DTOs, however, is unknown. Available data provide insight into the
    quantity of drugs seized along the SWB, though this data cannot speak
    to the total amount of drugs produced and/or transported into the
    United States, nor does it provide information about the proportion of
    these drugs that are actually seized along the SWB. For instance, Table
    1 illustrates Federal seizures of illegal drugs along the SWB for
    calendar years 2005-2009. Total drug seizures generally increased
    during this time period, despite a decline in 2008. Specifically,
    cocaine seizures along the SWB decreased in 2007 and 2008 relative to
    previous years when cocaine seizures had been increasing, but seizures
    began to increase again in 2009, a year that was marked by an increase
    in all major illegal drug seizures except for seizures of MDMA. These
    data, however, do not provide insight into the total amount of drugs
    illegally produced and transported by the DTOs. Rather, this data
    reflect an unknown proportion of drugs that the Mexican DTOs are
    bringing into the United States through a variety of transportation
    modes.

                             TABLE 1.--U.S. ILLEGAL DRUG SEIZURES ALONG THE SOUTHWEST BORDER
                                                     (In kilograms)
    ----------------------------------------------------------------------------------------------------------------
                                                        CY2005       CY2006       CY2007       CY2008     CY2009 \1\
    ----------------------------------------------------------------------------------------------------------------
    Cocaine........................................       22,653       28,284       22,656       16,755       17,085
    Heroin.........................................          228          489          404          556          642
    Marijuana......................................    1,034,102    1,146,687    1,472,536    1,253,054    1,489,673
    MDMA...........................................           23           16           39           92           54
    Methamphetamine................................        2,918        2,798        1,860        2,201        3,478
                                                    ----------------------------------------------------------------
          Total....................................    1,059,924    1,178,274    1,497,495    1,272,658   1,510,932
    ----------------------------------------------------------------------------------------------------------------
    \1\ 2009 data includes data from January 1, 2009, through December 1, 2009.
    Source: CRS presentation of data from the U.S. Department of Justice, National Drug Intelligence Center,
      National Drug Threat Assessment 2010, Product No. 2010-Q0317-001, February 2010, p. 20, http://www.justice.gov/
      ndic/pubs38/38661/38661p.pdf. The NDIC uses data from the National Seizure System.

        The 2010 National Drug Threat Assessment indicates that Mexican
    DTOs, in addition to being the major supplier of illegal drugs being
    smuggled into the United States, have a strong presence within the
    United States.\23\
    ---------------------------------------------------------------------------
        \23\ Ibid, p. 9.
    ---------------------------------------------------------------------------
                  mexican drug trafficking organizations \24\
    ---------------------------------------------------------------------------
        \24\ The terms drug trafficking organization (DTO) and drug cartel
    are terms often used interchangeably. Cartel is one of the dominant
    terms used colloquially and in the press, but some experts disagree
    with using this term because ``cartel'' often refers to price-setting
    groups and because it is not clear that the Mexican drug trafficking
    organizations are setting illicit drug prices. For the purpose of
    consistency, this report uses the term drug trafficking organization.
    For more information on the Mexican DTOs, see archived CRS Report
    RL34215, Mexico's Drug Cartels, by Colleen W. Cook. For information on
    the current violence between the DTOs in Mexico, see CRS Report R41576,
    Mexico's Drug Trafficking Organizations: Source and Scope of the Rising
    Violence, by June S. Beittel.
    ---------------------------------------------------------------------------
        Mexican DTOs are transnational organized crime groups \25\ whose
    criminal activities center primarily around the drug trade. In general,
    organized crime groups attempt to fill particular illicit market
    niches. Specifically, DTOs respond to the societal demand for illegal
    drugs. Some experts have likened drug trafficking organizations to
    corporations or even small nation-states. They are influenced by
    factors such as geography, politics, economics, and culture.\26\
    Geographically, for example, Mexican DTOs are situated between the
    world's largest producer of cocaine (Colombia) and the world's largest
    consumer of cocaine (United States), leading Mexico to be a natural
    drug transshipment route between the two countries.\27\ In addition,
    major Mexican criminal organizations focus primarily (though not
    exclusively) on drugs, because the drug trade has, to date, generally
    proven to be more economically lucrative than other illicit activities
    such as kidnapping and extortion.\28\
    ---------------------------------------------------------------------------
        \25\ For more information on organized crime in the United States,
    see CRS Report R40525, Organized Crime in the United States: Trends and
    Issues for Congress, by Kristin M. Finklea; and CRS Report R41547,
    Organized Crime: An Evolving Challenge for U.S. Law Enforcement, by
    Jerome P. Bjelopera and Kristin M. Finklea.
        \26\ Stratfor Global Intelligence, Mexican Drug Cartels: The Net
    Assessment, March 9, 2008, http://www.stratfor.com/podcast/
    mexican_drug_cartels_net_assessment.
        \27\ Stratfor Global Intelligence, Organized Crime in Mexico, March
    11, 2008, http://www.stratfor.com/analysis/organized_crime_mexico.
        \28\ Ibid. Refer to the section in the report, ``Activities,'' for
    more information on other illicit activities engaged in by the drug
    trafficking organizations.
    ---------------------------------------------------------------------------
        Mexican DTOs either: (1) Transport or (2) produce and transport
    drugs north across the United States-Mexico border.\29\ Figure 1
    illustrates the drug trafficking routes within Mexico and at the United
    States-Mexico border. After being smuggled across the border by DTOs,
    the drugs are distributed and sold within the United States. The
    illicit proceeds may then be laundered or smuggled south across the
    border. The proceeds may also be used to purchase weapons in the United
    States that are then smuggled into Mexico.\30\ This leads to a general
    pattern of drugs flowing north across the border and money and guns
    flowing south.
    ---------------------------------------------------------------------------
        \29\ As mentioned, Mexican DTOs distribute cocaine (produced in
    Colombia, Venezuela, and Brazil), and they produce as well as
    distribute heroin, methamphetamine, and marijuana.
        \30\ For more information on gun trafficking on the Southwest
    border, see CRS Report R40733, Gun Trafficking and the Southwest
    Border, by Vivian S. Chu and William J. Krouse.

        Although Mexican DTOs have been active for some time, they have
    become more prominent since the decline of the powerful Colombian DTOs
    beginning in the 1980s.\31\ The NDIC estimates that Mexican DTOs
    maintain drug distribution networks--or supply drugs to distributors in
    at least 230 U.S. cities (as illustrated in Figure 2)--and annually
    transport multi-ton quantities of illicit drugs from Mexico into the
    United States using a variety of multi-modal transportation
    methods.\32\ Estimates are that these drugs generate between $18
    billion and $39 billion in U.S. wholesale drug proceeds for the
    Colombian and Mexican DTOs annually.\33\
    ---------------------------------------------------------------------------
        \31\ Stratfor Global Intelligence, Organized Crime in Mexico, March
    11, 2008, http://www.stratfor.com/analysis/organized_crime_mexico. See
    also archived CRS Report RL34215, Mexico's Drug Cartels, by Colleen W.
    Cook.
        \32\ NDTA, 2009., p. 45.
        \33\ NDTA, 2009., p. 49. According to ONDCP data, the trafficking
    and distribution of cocaine generates about $3.9 billion, marijuana
    generates about $8.5 billion, and methamphetamine generates about $1
    billion. Jane's, Security, Mexico, February 20, 2009.

        When conceptualizing Mexican drug trafficking organizations as
    businesses, policy makers may question the impact of possible drug
    trafficking-related violence spillover (into the United States) on the
    drug trafficking business--selling drugs in the U.S. black market.
    Although the effects of violence on businesses in the black market may
    not mirror those effects on business in the licit market, one way of
    examining this question may be to look at the impact that violence or
    violent crimes have on business in general. One recent study, for
    example, examined the impact of surges in violence on businesses in
    various industries in locations of varying crime rates.\34\ Results
    suggested that surges in violence had the most negative impact on those
    businesses that were service-related (e.g., retail and personal service
    industries) and located in typically low-crime areas. Specifically, the
    impact on business was in terms of a reduction in the number of new
    businesses, a decrease in business expansions, and a lack of overall
    business growth. In order to generalize these findings from retail
    businesses to drug businesses, one underlying assumption must be that
    the locations for buying retail goods and personal services are the
    same as those for purchasing drugs. If these findings are generalizable
    to the drug trafficking business, this could suggest that any spillover
    in drug trafficking-related violence to the United States could
    adversely affect those service-related businesses (including drug
    trafficking businesses) in cities with relatively (pre-spillover) low
    crime rates. On the other hand, if violence affects businesses in the
    licit and illicit markets differently, these findings may not apply to
    potential effects of drug trafficking-related violence on drug
    trafficking business.
    ---------------------------------------------------------------------------
        \34\ Robert T. Greenbaum and George E. Tita, ``The Impact of
    Violence Surges on Neighbourhood Business Activity,'' Urban Studies,
    vol. 41, no. 13 (December 2004), pp. 2495-2514.
    ---------------------------------------------------------------------------
        Already, there have been anecdotal predictions regarding the impact
    of violence on drug trafficking business; Douglas, AZ, police chief
    Alberto Melis has said that ``spillover violence would be bad for
    business . . . and they're [the drug traffickers] businessmen.''\35\
    Further, the Drug Enforcement Administration (DEA) has expressed
    moderate confidence that there will not be a significant increase in
    spillover violence--at least in the short term--because ``Mexican
    trafficking organizations understand that intentional targeting of U.S.
    persons or interests unrelated to the drug trade would likely undermine
    their own business interests.''\36\
    ---------------------------------------------------------------------------
        \35\ Brady McCombs and Tim Steller, ``Drug Violence Spillover More
    Hype Than Reality: Southern Arizona Lawmen Discount Threat of Cartel
    Warfare Crossing Border,'' Arizona Daily Star, April 26, 2009, Tucson
    Region.
        \36\ Drug Enforcement Administration, Statement of Joseph M. Arabit
    Special Agent in Charge, El Paso Division, Regarding ``Violence Along
    the Southwest Border'' Before the House Appropriations Committee,
    Subcommittee on Commerce, Justice, Science, and Related Agencies, March
    24, 2009, http://www.usdoj.gov/dea/speeches/s032409.pdf.
    ---------------------------------------------------------------------------
    Partnerships in the United States
        The NDIC has indicated that in order to facilitate the distribution
    and sale of drugs in the United States, Mexican DTOs have formed
    relationships with U.S. street gangs, prison gangs, and outlaw
    motorcycle gangs.\37\ Although these gangs have historically been
    involved with retail-level drug distribution, their ties to the Mexican
    DTOs have allowed them to become increasingly involved at the wholesale
    level as well.\38\ These gangs facilitate the movement of illicit drugs
    to urban, suburban, and rural areas of the United States. Not only do
    these domestic gangs distribute and sell the drugs, but they also aid
    in smuggling and enforcing the collection of drug proceeds.\39\ For
    example, Barrio Azteca is one of at least nine prominent U.S. prison
    gangs with ties to Mexican DTOs.\40\ Barrio Azteca primarily generates
    money from smuggling marijuana, heroin, and cocaine across the
    Southwest border for the DTOs--namely, the Juarez cartel--but they are
    also involved in other crimes, such as extortion, kidnapping, and alien
    smuggling.\41\
    ---------------------------------------------------------------------------
        \37\ NDTA, 2009, p. 46.
        \38\ Wholesale refers to the sale of goods to retailers for resale
    to consumers rather than selling goods directly to consumers.
    Retailers, on the other hand, sell goods directly to consumers.
    Wholesalers tend to sell larger quantities of goods to retailers, who
    then sell smaller quantities to consumers.
        \39\ NDTA, 2009., pp. 43-46. See also, National Gang Intelligence
    Center and National Drug Intelligence Center, National Gang Threat
    Assessment, 2009, Product No. 2009-M0335-001, January 2009, http://
    www.fbi.gov/publications/ngta2009.pdf.
        \40\ Fred Burton and Ben West, The Barrio Azteca Trial and the
    Prison Gang-Cartel Interface, Stratfor Global Intelligence, November
    19, 2008, http://www.stratfor.com/weekly/
    20081119_barrio_azteca_trial_and_prison_gang_cartel_interface.
        \41\ For more information, see Tom Diaz, ``Barrio Azteca--Border
    Boys Linked to Mexican Drug Trafficking Organizations--Part Three,''
    April 17, 2009, http://tomdiaz.wordpress.com/2009/04/17/
    barrioazteca%E2%80%93border-bad-boys-linked-to-mexican-drug-
    trafficking-organizations-%E2%80%94-part-three/. See also the U.S.
    Department of Justice website at http://www.usdoj.gov/criminal/
    gangunit/gangs/prison.html.
    ---------------------------------------------------------------------------
    Activities
        Like other organized crime groups, Mexican DTOs are profit-driven.
    While the primary goods trafficked by DTOs are drugs, some experts have
    noted that these organizations do generate income from other illegal
    activities, such as the smuggling \42\ of humans and weapons,
    counterfeiting and piracy, kidnapping for ransom, and extortion.\43\ If
    the DTOs are not able to generate income from the drugs--due to any
    number of reasons (increased Mexican or U.S. law enforcement, decreased
    drug supply, decreased drug demand, etc.)--they may increase their
    involvement in other money-generating illegal activities, such as
    kidnapping and home invasions. Take, for example, the number of drug
    trafficking-related kidnappings for ransom in Phoenix, AZ.\44\ In 2009,
    the NDIC reported 358 such incidents in 2007 and 357 in 2008 (through
    December 15, 2008), and indicated that nearly every incident was drug-
    related.\45\ These statistics were revised in the 2010 National Drug
    Threat Assessment, indicating that kidnappings in Phoenix reached 260
    in 2007, 299 in 2008, and 267 in 2009.\46\ This decrease in the number
    of reported kidnappings for 2007 and 2008 is due to a reclassification
    of certain cases by the Phoenix Police Department. Further, the NDIC
    reports that kidnappings may be generally underreported because victims
    may fear retaliation for reporting or may expose their own involvement
    in drug trafficking. Still, Tucson, AZ, police have reported that
    although there has been an increase in kidnappings for ransom and home
    invasions, the suspects in the cases are local criminals--not active
    DTO members from Mexico.\47\ This disparity in reports indicates that
    while there may be an increase in certain illegal activities that may
    be tied to drug smuggling and trafficking, these illegal activities are
    not necessarily directly related to drug trafficking in general or to
    Mexican drug trafficking organizations in particular.
    ---------------------------------------------------------------------------
        \42\ While drug trafficking organizations may not be directly
    involved in alien or gun smuggling, they may tax the smugglers who wish
    to use the established drug trafficking routes. Further, the NDIC has
    indicated that drug trafficking organizations may engage in violent
    confrontations with the smuggling organizations, as the drug
    traffickers fear that the smugglers' use of their routes may lead to
    the traffickers' apprehension. See National Drug Intelligence Center,
    Office of National Drug Control Policy, Arizona High Intensity Drug
    Trafficking Area: Drug Market Analysis 2009, Product No. 2009-R0813-
    002, March 2009, p. 14, http://www.justice.gov/ndic/pubs32/32762/
    32762p.pdf.
        \43\ Jane's, Security, Mexico, February 20, 2009. Also, Stratfor
    Global Intelligence, Mexican Drug Cartels: The Net Assessment, March 9,
    2008, http://www.stratfor.com/podcast/
    mexican_drug_cartels_net_assessment.
        \44\ Sam Quinones, ``Phoenix, Kidnap-For-Ransom Capital,'' Los
    Angeles Times, February 12, 2009. See also, National Drug Intelligence
    Center, Office of National Drug Control Policy, Arizona High Intensity
    Drug Trafficking Area: Drug Market Analysis 2009, Product No. 2009-
    R0813-002, March 2009, http://www.justice.gov/ndic/pubs32/32762/
    32762p.pdf.
        \45\ Ibid., p. 18.
        \46\ NDTA, 2010, pp. 15-16.
        \47\ Brady McCombs and Tim Steller, ``Drug violence spillover more
    hype than reality: Southern Arizona lawmen discount threat of cartel
    warfare crossing border,'' Arizona Daily Star, April 26, 2009, Tucson
    Region.
    ---------------------------------------------------------------------------
             relationship between illicit drug markets and violence
        In an illegal marketplace, where prices and profits are elevated
    due to the risks of operating outside the law, violence or the threat
    of violence becomes the primary means for settling disputes and
    maintaining a semblance of order--however chaotic that ``order'' might
    appear to the outside observer. This was a fundamental conclusion
    reached by the National Academy of Sciences Panel on the Understanding
    and Control of Violent Behavior.\48\ Because illegal drug markets
    operate outside the law, no courts or other forms of peaceful mediation
    \49\ exist for resolving disputes between drug producers, traffickers,
    and their customers. As with other black markets, drug markets are
    necessarily governed by the threat of violence, which may lead to
    actual violence. Illegal drugs and violence, then, are linked primarily
    through the operations of underground drug markets.\50\
    ---------------------------------------------------------------------------
        \48\ Jeffrey A. Roth, ``Psychoactive Substances and Violence,''
    National Institute of Justice (Research in Brief Series), February 1994
    (Washington, DC: U.S. Department of Justice).
        \49\ Negotiated settlements do occur, although they often feature
    intimidation.
        \50\ See for example, Peter Andreas and Joel Wallman, ``Illicit
    market and violence: what is the relationship?'', Crime, Law, and
    Social Change, vol. 52, no. 3 (September 2009), pp. 225-230, and Peter
    Reuter, ``Systemic violence in drug markets,'' Crime, Law, and Social
    Change, vol. 52, no. 3 (September 2009), pp. 275-285.
    ---------------------------------------------------------------------------
        Drug trafficking-related violence in Mexico has been on the rise,
    and in 2010, there were more than 11,600 drug trafficking-related
    murders in Mexico.\51\ Mexican drug trafficking organizations are now
    at war with each other as well as with the police and military
    personnel who are attempting to enforce the drug laws in northern
    Mexico along the U.S. border. The DTOs, as a result of enforcement
    actions in Mexico, along with increasing border enforcement measures
    taken by the United States, are finding it more difficult and more
    costly to control the production zones and smuggling routes. One of the
    consequences of this increasingly competitive environment is a rise in
    the level of violence associated with the illicit drug trade as the
    DTOs struggle for control over territory, markets, and smuggling
    routes. Policy makers are thus confronted with the uncomfortable
    possibility that increased law enforcement (which leads to increased
    difficulty and costs to control production zones and smuggling routes,
    and which in turn leads to the need to resolve disputes over such
    territories) could result in increased drug trafficking-related
    violence. This appears to be the situation that has recently developed
    in Mexico.
    ---------------------------------------------------------------------------
        \51\ Trans-Border Institute (TBI), Justice in Mexico December 2010
    News Report. Reforma is the generally respected source of data on drug
    trafficking-related deaths in Mexico.
    ---------------------------------------------------------------------------
        This relationship gives rise to a number of important issues for
    policy makers. One such matter is evaluating the relative costs and
    benefits of increased enforcement of the current drug policy against
    the potentially elevated levels of violence that such increased
    enforcement might engender.\52\ Could the drug trafficking-related
    violence currently evidenced in Mexico reach a level that would prompt
    U.S. policy makers to consider policy actions that could alter the
    underpinnings of the illegal drug market? It does not appear as if the
    violence has reached such a level as yet. Policy makers, however, have
    expressed significant concern over the possibility of the current
    violence in Mexico spilling over into the United States.
    ---------------------------------------------------------------------------
        \52\ A Mexican study of the cost-effectiveness of using the
    military in the drug war (in Ciudad Juarez) has found that there is a
    high cost with little success, as murders, kidnappings, extortions, and
    other crimes continue to increase. See http://
    narcosphere.narconews.com/notebook/kristin-bricker/2009/11/numbers-
    dont-add-mexicos-drug-war.
    ---------------------------------------------------------------------------
                          what is spillover violence?
        When assessing the potential implications of increased violence in
    Mexico as a result of the increasing tensions between the DTOs located
    in Mexico, one of the central concerns for U.S. policy makers is the
    potential for what has recently been termed ``spillover'' violence--an
    increase in drug trafficking-related violence in United States. Given
    this concern, it is critical to develop an understanding of what
    ``spillover'' is, what it might look like, how it might be measured,
    and what potential triggers for policy action can be identified from
    this analysis.
        To date, Congress has not adopted a formal definition of spillover
    violence. Several definitions and/or qualities of spillover violence
    have been provided by Government officials, as well as experts and
    analysts. For instance, according to the DEA, the interagency community
    has defined spillover violence in the following manner:

    ``[S]pillover violence entails deliberate, planned attacks by the
    cartels on U.S. assets, including civilian, military, or law
    enforcement officials, innocent U.S. citizens, or physical institutions
    such as government buildings, consulates, or businesses. This
    definition does not include trafficker on trafficker violence, whether
    perpetrated in Mexico or the U.S.''\53\
    ---------------------------------------------------------------------------
        \53\ Drug Enforcement Administration, Statement of Joseph M. Arabit
    Special Agent in Charge, El Paso Division, Regarding ``Violence Along
    the Southwest Border'' Before the House Appropriations Committee,
    Subcommittee on Commerce, Justice, Science and Related Agencies, March
    24, 2009, http://www.usdoj.gov/dea/speeches/s032409.pdf.

        This definition of spillover provides a relatively narrow scope of
    what may constitute spillover violence. In particular, it excludes the
    category of violence--trafficker-on-trafficker violence--in which the
    vast majority of drug trafficking-related violence in Mexico has
    occurred. If policy makers and law enforcement are concerned that the
    drug trafficking-related violence, as seen in Mexico, may spill over
    into the United States, they are necessarily concerned with this
    predominant category of trafficker-on-trafficker violence that is
    excluded from the interagency community's definition of spillover
    violence. The boundaries of what may constitute spillover violence, as
    defined by the interagency community, thus makes the likelihood that
    the United States will experience this form of spillover violence
    relatively small. Further, by generally constraining the definition of
    spillover violence to those acts that target the government and
    innocent civilians, the type of violence necessary to constitute
    spillover (according to the interagency definition) may begin to
    resemble acts of terrorism.\54\ If so, policy makers and experts may be
    challenged with discriminating between spillover violence and
    terrorism.
    ---------------------------------------------------------------------------
        \54\ 18 U.S.C.  2331 defines terrorism as ``activities that (A)
    involve violent acts or acts dangerous to human life that are 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; (B) appear to be intended--(i) to
    intimidate or coerce a civilian population; (ii) to influence the
    policy of a government by intimidation or coercion; or (iii) to affect
    the conduct of a government by mass destruction, assassination, or
    kidnapping; and (C) occur primarily outside the territorial
    jurisdiction of the United States, or transcend national boundaries in
    terms of the means by which they are accomplished, the persons they
    appear intended to intimidate or coerce, or the locale in which their
    perpetrators operate or seek asylum.''
    ---------------------------------------------------------------------------
        Several experts and scholars have also discussed qualities of drug
    trafficking-related violence that may constitute spillover, including
    aspects of trafficker-on-trafficker violence. Such qualities are
    analyzed in the following section and may provide policy makers with
    additional definitions of spillover violence. Of note, this report does
    not address non-violent indicators--such as rising corruption of U.S.
    officials and law enforcement--that could be related to drug
    trafficking-related violence spillover.
    Characteristics of Spillover Violence
        Some experts have suggested that a spillover of violence into the
    United States may look similar to the recent surge of violence in
    Mexico. In Mexico, this increasing violence has been seen through a
    rise in both the number of drug trafficking-related murders and the
    brutality of the murders. It is also taking the forms of increasing
    intimidation and fear, attacks on security forces, assassinations of
    high-ranking officials, growing arsenals of weapons, and indiscriminate
    killing of civilians.\55\
    ---------------------------------------------------------------------------
        \55\ Stratfor Global Intelligence, Mexican Drug Cartels: Government
    Progress and Growing Violence, December 11, 2008, pp. 15-16, http://
    web.stratfor.com/images/MEXICAN%20Cartels%202008.pdf.
    ---------------------------------------------------------------------------
        While a potential spillover of violence into the United States
    could appear similar to the violence in Mexico, the violence may be
    contingent upon numerous factors that differ between the United States
    and Mexico. For instance, the U.S. Government may respond differently
    to domestic drug trafficking-related violence than the Mexican
    government has, and these differences in responses could in turn
    influence the nature of the drug trafficking-related violence seen in
    each country. This section of the report discusses several factors that
    may be of concern as Congress debates the potential spillover of drug
    trafficking-related violence. These factors include who may be
    implicated in the violence, what type of violence may arise, when
    violence may appear, and where violence may occur.
    Who May Be Implicated in Violence
        If the drug trafficking-related violence were to spill over from
    Mexico into the United States, Congress may be concerned with both the
    individuals perpetrating the violence as well as the victims of the
    violence.
                Perpetrators
        Reports on the drug trafficking-related violence in Mexico
    generally indicate that the perpetrators of violence are active members
    of DTOs who are vying for territory, avenging betrayals, and reacting
    against the Mexican government's crackdown on the traffickers.\56\ If
    violence were to spill into the United States, policy makers may
    question whether the perpetrators of the violence will continue to be
    active drug trafficking members from Mexico, or whether violence will
    be inflicted by others who may be more indirectly tied to the DTOs. As
    mentioned, the DTOs have connections with U.S. groups such as street
    gangs, prison gangs, and outlaw motorcycle gangs who distribute and
    sell drugs, aid in smuggling drugs, and enforce the collection of drug
    proceeds.\57\ To date, reports from law enforcement on drug
    trafficking-related violence in the United States are mixed; while some
    suggest that violence may be carried out by drug traffickers or other
    criminals from Mexico,\58\ others indicate that domestic drug
    traffickers or gang members may be responsible.\59\
    ---------------------------------------------------------------------------
        \56\ CRS Report R41576, Mexico's Drug Trafficking Organizations:
    Source and Scope of the Rising Violence, by June S. Beittel.
        \57\ NDTA, 2009., pp. 43-46.
        \58\ See, for example, Randal C. Archibold, ``Mexican Drug Cartel
    Violence Spills Over, Alarming U.S.,'' The New York Times, March 22,
    2009.
        \59\ Brady McCombs and Tim Steller, ``Drug Violence Spillover More
    Hype Than Reality: Southern Arizona lawmen discount threat of cartel
    warfare crossing border,'' Arizona Daily Star, April 26, 2009, Tucson
    Region.
    ---------------------------------------------------------------------------
                Victims
        The violence plaguing Mexico has been directed toward several
    groups: Competing DTOs vying for territory, Mexican security forces,
    government officials, and those indebted to the traffickers. In fact,
    Mexican government officials have estimated that 90% of the murders in
    Mexico have targeted members of drug trafficking organizations.\60\
    Although there have been reports of civilian bystanders being killed
    and isolated events of indiscriminate killing, there are not consistent
    reports of the drug traffickers targeting civilians who are unconnected
    to the drug trade.\61\ If there were to be a significant spillover of
    violence into the United States, policy makers may question whether the
    victims would be of a similar group as the victims of violence in
    Mexico. To date, the anecdotal reports of drug trafficking-related
    violence in the United States indicate that not only the perpetrators,
    but the victims of the crimes as well, are all somehow involved in the
    drug trade.\62\ If any significant spillover of drug trafficking-
    related crime were to follow a similar pattern, policy makers could
    expect that individuals on both sides of the violence are connected to
    the drug trade.
    ---------------------------------------------------------------------------
        \60\ See testimony by David Shirk, Director, Trans-Border
    Institute, University of San Diego, before the U.S. Congress, House
    Committee on Appropriations, Subcommittee on Commerce, Justice,
    Science, and Related Agencies, Federal Law Enforcement Response to
    U.S.-Mexico Border Violence, 111th Cong., 1st sess., March 24, 2009.
        \61\ CRS Report R41576, Mexico's Drug Trafficking Organizations:
    Source and Scope of the Rising Violence, by June S. Beittel. See also
    Stratfor Global Intelligence, Mexican Drug Cartels: Government Progress
    and Growing Violence, December 11, 2008, http://web.stratfor.com/
    images/MEXICAN%20Cartels%202008.pdf.
        \62\ See, for example, Randal C. Archibold, ``Mexican Drug Cartel
    Violence Spills Over, Alarming U.S.,'' The New York Times, March 22,
    2009.
    ---------------------------------------------------------------------------
        There are circumstances, however, under which the drug trafficking
    victims in the United States could extend to groups beyond those
    involved in trafficking. If there is an increase in violence and the
    U.S. Government cracks down on the DTOs similarly to the Mexican
    government, the traffickers' reactions in the United States may be
    similar to that seen in Mexico--a surge in violence against security
    forces and government officials. Federal officials have indicated that
    increased targeting of U.S. law enforcement personnel, similar to that
    which has occurred in Mexico, would constitute evidence of
    spillover.\63\ If, however, the U.S. response differs from that of
    Mexico, the reactions from the DTOs may also differ. Further, a change
    in the victim pattern--to include innocent bystanders, for instance--
    may represent a departure from current patterns of drug trafficking-
    related violence and thus could represent a reasonable trigger for
    policy action to mitigate the effects of spillover violence.
    ---------------------------------------------------------------------------
        \63\ Arthur H. Rotstein, ``Bersin: Mexican Drug Violence Threat
    Major Concern,'' The Associated Press, July 15, 2009, quoting Alan
    Bersin the Department of Homeland Security Special Representative of
    Border Affairs. Further, this type of violence would be consistent with
    the interagency definition of spillover violence.
    ---------------------------------------------------------------------------
    What Type of Violence May Arise
        In Mexico, the drug trafficking-related violence most often
    reported is murder--over 30,000 since December 2006.\64\ There have
    also been reports of kidnappings, home invasions, and assaults, among
    other crimes. In the United States, many of the anecdotal reports
    citing an increase in violence point to an increase in drug
    trafficking-related kidnappings and home invasions. For instance, over
    the past 2 years, there have been reports of about 700 recorded
    kidnappings in Phoenix, AZ, that are related to drug and human
    smuggling.\65\ It is unknown how many of these kidnappings, if any,
    also have ties to drug smuggling;\66\ as mentioned, DTOs may supplement
    their incomes with crimes other than drug trafficking if it is
    profitable. It is also unknown whether or not different types of
    violence are more associated with certain crimes (committed by drug
    traffickers) than with others. If there were to be a substantial
    spillover of drug trafficking-related violence from Mexico, policy
    makers and law enforcement may be concerned with what types of violence
    may appear. Would the types of drug trafficking-related violence
    already seen in the United States to date (i.e., kidnappings and home
    invasions) become more prevalent, or would there be a greater emergence
    of the types of violence seen in Mexico (i.e., murders)?
    ---------------------------------------------------------------------------
        \64\ ``Mexican drug war deaths surpass 30,100,'' CNN, December 17,
    2010, http://articles.cnn.com/2010-12-17/world/mexico.violence--1--
    drug-war-border-city-drug-related-violence?_s=PM:WORLD.
        \65\ Randal C. Archibold, ``Mexican Drug Cartel Violence Spills
    Over, Alarming U.S.,'' The New York Times, March 22, 2009. The media
    has also reported 17 drug-related deaths in El Paso in 2008. See Sara
    Miller Llana, ``Crossfire Towns: Eye-To-Eye Across the US-Mexican
    Border, Two Communities Confront Drugs, Guns, and Misconceptions,'' The
    Christian Science Monitor, June 21, 2009.
        \66\ Drug Enforcement Administration, Statement of Joseph M. Arabit
    Special Agent in Charge, El Paso Division, Regarding ``Violence Along
    the Southwest Border'' Before the House Appropriations Committee,
    Subcommittee on Commerce, Justice, Science, and Related Agencies, March
    24, 2009, http://www.usdoj.gov/dea/speeches/s032409.pdf.
    ---------------------------------------------------------------------------
        In addition to the type of violence, a spillover or increase in
    violence could also be measured by the nature of the violence. As
    mentioned, the rise in the number of murders in Mexico was also
    accompanied by increasing brutality, intimidation, and attacks on
    individuals other than those directly involved in the illicit drug
    trade (i.e., security forces and governmental officials).\67\ If any
    spillover of violence into the United States followed a similar pattern
    as the violence in Mexico, there may be an increase in the brutality of
    crimes in addition to an increase in the pure number of crimes.
    ---------------------------------------------------------------------------
        \67\ Stratfor Global Intelligence, Mexican Drug Cartels: Government
    Progress and Growing Violence, December 11, 2008, pp. 15-16, http://
    web.stratfor.com/images/MEXICAN%20Cartels%202008.pdf.
    ---------------------------------------------------------------------------
    When Violence May Appear
        Critical to the assessment of whether the United States is
    experiencing spillover violence is the establishment of a realistic
    time line for measuring the change in drug trafficking-related violence
    in the United States. If the policy goal is to determine if any
    spillover violence is occurring in the United States as a result of the
    increasing violence in Mexico, then it would be logical to look at
    trends in drug trafficking-related crime in the United States since the
    onset of the conditions that precipitated the recent violence in
    Mexico--roughly beginning around when Mexican President Felipe Calderon
    took office in December, 2006.\68\ A comparison of the trends in drug
    trafficking-related violence (in the United States) before and after
    this reference point might shed some light on whether or not the United
    States is experiencing spillover violence.
    ---------------------------------------------------------------------------
        \68\ CRS Report R41576, Mexico's Drug Trafficking Organizations:
    Source and Scope of the Rising Violence, by June S. Beittel.
    ---------------------------------------------------------------------------
        As noted, the United States has experienced and continues to
    experience certain levels of drug trafficking-related crime. It may be
    difficult to isolate those drug trafficking-related violent crimes that
    are occurring either directly or indirectly as a result of the
    situation in Mexico. Therefore, it may also be useful for policy makers
    to use this same time frame to measure changes in other spillover
    indicators, such as changes in the profile of victims of drug
    trafficking-related crime, the number and nature of violent attacks on
    U.S. law enforcement personnel, and changes in the nature of drug
    trafficking-related violence. This could be one means to standardize
    the measurement of any potential spillover and to provide policy makers
    with a more concrete idea of the trends. The discussion of when the
    violence occurs begs the question of where to measure any potential
    change in violence.
    Where Violence May Occur
        As may be expected, the majority of the discussion surrounding the
    prospects of spillover violence in the United States has been focused
    on the Southwest border (SWB). Initially, this makes intuitive sense.
    Even the very term ``spillover'' suggests the spread of violence across
    the border from Mexico--almost by osmosis. From a policy perspective,
    it is useful to question whether or not a focus exclusively on the
    border makes sense. Certainly this is where the analysis should begin
    as the SWB region is the primary region that links production and
    smuggling operations within Mexico to the United States. As noted,
    however, the drug trafficking organizations' operations within the
    United States are geographically dispersed throughout at least 230
    cities. DTOs are businesses, and they not only maintain their own
    presence in the United States but also have relationships with U.S.
    groups such as street gangs, prison gangs, and outlaw motorcycle gangs
    to facilitate the distribution and sale of drugs within the United
    States.
        Given that drug trafficking-related violence is prevalent
    throughout the United States, the task for policy makers is to
    concentrate the geographic analysis of changes in drug trafficking-
    related violence around areas that would have the greatest likelihood
    of eliciting evidence of spillover. One possible method of
    accomplishing this task could be to look at the various factors
    discussed above--changes in the levels, nature, and victim pattern of
    drug trafficking-related violence in selected geographic locations--
    along a time line that corresponds with the escalation of drug
    trafficking violence in Mexico. Of course, the critical issue is
    selecting those geographic locations. Areas already identified as
    strategically important to drug trafficking operations here in the
    United States would be an optimal place to start. These locations would
    include cities, States, and localities in the SWB region, as well as
    along significant in-land distribution routes. Policy makers may also
    wish to examine geographic areas that are not currently identified as
    strategically important to drug trafficking operations here in the
    United States, as a control for comparison.
         challenges in evaluating and responding to spillover violence
        This section of the report discusses some of the challenges facing
    policy makers when considering policy options dealing with drug control
    and border security issues in general. These issues are discussed more
    generally because they provide the context within which any specific
    options for dealing with the potential spillover of drug trafficking-
    related violence will be determined. These policy challenges include
    the complexity of the issue, defining goals and objectives, and
    measuring the problem.
    Complexity of the Issue
        As evidenced through some of the above discussion, there are many
    Federal agencies, State and local entities, task forces, intelligence
    centers, and various other groups that are not only involved in drug
    control policy in general, but have specific roles in countering
    threats posed by the Mexican DTOs. Each of these agencies has different
    authorities, budgets, resources, and responsibilities when it comes to
    the drug control issue (the Appendix to this report details the recent
    drug control efforts of these agencies). This complexity has also been
    evident in the Federal Government's current response to the increasing
    drug trafficking-related violence in Mexico. The policy implication of
    this intricate web of jurisdictions is that it is difficult to
    centralize the establishment, implementation, and evaluation of
    policies--be they drug control policies in general, or the specific
    policy responses to the increased drug trafficking-related violence.
        Several Congressional hearings have been held on various aspects of
    the drug control and drug trafficking-related violence issues,\69\ and
    some Congressional policy makers have voiced their concerns over the
    lack of centralized direction on these issues. In particular, Congress
    has expressed concern over who is taking the lead--not just among the
    involved agencies--but within Congress itself.\70\ Complicated
    Congressional jurisdiction spread across a variety of committees in
    both houses means that oversight of the drug control and the drug
    trafficking violence issues is equally complex. Consequently,
    coordination of oversight of the areas is problematic and difficult to
    manage.
    ---------------------------------------------------------------------------
        \69\ See, for example, U.S. Congress, House Committee on Homeland
    Security, Subcommittee on Border, Maritime, and Global
    Counterterrorism, Combating Border Violence: The Role of Interagency
    Coordination in Investigations, 111th Cong., 1st sess., July 16, 2009
    and U.S. Congress, Senate Committee on Homeland Security and
    Governmental Affairs, Southern Border Violence, 111th Cong., 1st sess.,
    March 25, 2009.
        \70\ See for example, Rob Margetta, ``Lawmakers Want to Know Who
    Takes the Lead in Battling Border Violence,'' CQ Today Online News,
    March 10, 2009.
    ---------------------------------------------------------------------------
        Adding further complexity is the fact that few of the agencies
    involved in the drug control effort are solely dedicated to a
    counterdrug mission (DEA and ONDCP being two of few exceptions). This
    presents several challenges in analyzing drug control policy. One
    challenge, for example, involves disaggregating an agency's drug
    control mission and activities from its other missions and activities.
    Take, for instance, interdiction at ports of entry. CBP officers select
    people, goods, and conveyances for additional scrutiny based on a
    variety of factors. Often, officers have no idea what the ultimate
    outcome of a physical inspection might be. The inspection might uncover
    illicit drugs, or it might uncover cash, weapons, or any number of
    items that are prohibited from entering the country. How then, may one
    estimate the portion of CBP officers' time that is spent on the
    counterdrug effort? This same question applies to the multitude of
    other agencies that also have drug control responsibilities. The
    question becomes even more difficult to answer when the aim is to
    analyze a specific drug control policy--such as specific policies
    targeted toward any potential spillover violence from Mexico.
    Disaggregating the drug control mission (or specific policies),
    however, is critical on several levels; not only does it affect the
    measurement of an agency's progress in implementing drug control
    efforts, but it also affects the directing of resources towards these
    efforts or specific policies.
    Defining Goals and Objectives
        The definition of success is a critical aspect of policy
    evaluation. As noted above, the existing complexities surrounding drug
    control policies in general, and policies to address the potential
    spillover violence from Mexico in particular, complicate the evaluation
    of these policies. For this reason, it is important to identify
    appropriate goals or objectives either for what might be an overall
    strategy or for specific policies.
        For example, the appropriate domestic policy response to the
    increased drug trafficking-related violence in Mexico is difficult to
    articulate. This is because several forces are at work; it is tempting
    to conflate the response to a specific iteration of the problem (the
    change in drug trafficking-related violence in Mexico) with the drug
    control problem in general and, at the same time, to disaggregate the
    issue down to so many constituent parts (outbound inspections at the
    border, kidnappings in Phoenix, straw purchases \71\ in Houston, a drug
    trafficking-related shooting in El Paso, etc.). This allows for the
    potential to obscure the actual policy problem to be confronted. From a
    policy perspective also, the degree to which this conflation or
    disaggregation occurs may not matter in the final analysis if the
    appropriate metrics are ultimately used to evaluate each.
    ---------------------------------------------------------------------------
        \71\ Straw purchases occur when guns are purchased from licensed
    gun dealers by eligible persons and then knowingly transferred to
    prohibited persons. Straw purchases are illegal under U.S. law (18
    U.S.C.  924(a)(1)(A)).
    ---------------------------------------------------------------------------
        With particular relevance to the subject of this report, if the
    policy task is to identify any potential or actual drug trafficking-
    related spillover violence in the United States, and the appropriate
    drug activity indicators can be accurately identified, the issue
    becomes how to correlate any change in drug activity indicators to the
    increased drug trafficking-related violence in Mexico. One potential
    complication with such an analysis is uniformly defining what
    constitutes drug-related violence.
        This could potentially be broken down into three general
    categories: Crimes committed by people under the influence of drugs;
    economic-compulsive crimes (crimes committed in order to obtain money
    or drugs to support drug use); and what are termed systemic drug
    crimes--crimes that result from the business of trafficking illicit
    drugs.\72\ These definitions are important, because while the
    commission of crimes by people who are under the influence of illegal
    drugs and economic-compulsive crimes present important policy issues in
    and of themselves, changes in these indicators contribute little value
    to the determination of whether or not the United States is
    experiencing any spillover violence from Mexico particularly related to
    the recent increase in drug trafficking-related violence.
    ---------------------------------------------------------------------------
        \72\ Paul J. Goldstein, ``The Drugs/Violence Nexus: A Tripartite
    Conceptual Framework,'' Journal of Drug Issues, vol. 14 (1985), pp.
    493-506.
    ---------------------------------------------------------------------------
    Measuring the Problem
        The issue of measurement is important in several different
    contexts. There are issues with the collection and reporting of drug
    control statistics, as well as questions concerning what value the
    reported measures have. Because the drug control issue is complex, and
    so many agencies participate in its execution, invariably there are
    going to be differences in how agencies collect and report enforcement
    statistics. Central to the issue at hand in this report is the question
    of how to measure changes in drug-related violence, and specifically
    drug trafficking-related violence.
        Even an indicator that conceptually could provide some value added
    to the central question (to choose an example popularly cited in the
    media--violent crimes excluding robberies) is difficult to evaluate.
    For example, in Tucson, the number of violent crimes excluding
    robberies from January to March of 2009 was 632; for the same period in
    2008 the number was 651. So, there were fewer violent crimes in Tucson
    in the first 3 months of 2009 than in 2008.\73\ These are not
    necessarily drug trafficking-related violent crimes, but if the
    premise--that the United States is experiencing spillover violence
    stemming from the drug trafficking activity in Mexico--is accurate, one
    would expect violent crimes to go up, and drug trafficking-related
    violent crimes would be included in the more general violent crime
    reporting. On the other hand, a significant drop in non-drug
    trafficking-related violence could obscure a rise in actual drug
    trafficking-related violent crime. However, the true driver of the
    change in drug trafficking-related violent crime cannot be ascertained
    from these statistics.
    ---------------------------------------------------------------------------
        \73\ Gabriel Arana, ``There's No Drug Crime Wave at the Border,
    Just a lot of Media Hype,'' The Nation, May 29, 2009.
    ---------------------------------------------------------------------------
        Another measurement issue is where to look for changes in drug
    trafficking-related violence. This is another area where the problems
    with available data are manifested. Ideally, to conduct this analysis,
    one would have access to drug trafficking-related violent crime data
    from the geographic areas of interest (border and interior locations
    with known drug trafficking activity). This data would be available in
    small geographic increments so that local differences could be taken
    into account, and it would be consistently available in comparable sets
    across an adequately long time period so as to conduct a statistically
    significant trend analysis. Unfortunately, this and other data are not
    readily available for analysis, as detailed in the section outlining
    the Congressional Research Service's (CRS's) evaluation of available
    data.
    Is There Spillover Violence?
        As discussed, a multitude of factors are involved in both defining
    as well as measuring spillover violence. Currently, there is no
    comprehensive, publicly available data that can definitively answer the
    question of whether there has been a significant spillover of drug
    trafficking-related violence into the United States. Although anecdotal
    reports have been mixed, U.S. Government officials maintain that there
    has not yet been a significant spillover.
                Analysis
        In an examination of data that could provide insight into whether
    there has been a significant spillover in drug trafficking-related
    violence from Mexico into the United States, CRS undertook an analysis
    of violent crime data from the FBI's Uniform Crime Report (UCR)
    program.\74\ Of note, however, the UCR data does not allow analysts to
    determine what proportion of the violent crime rate is related to drug
    trafficking or, even more specifically, what proportion of drug
    trafficking-related violent crimes can be attributed to spillover
    violence. The UCR compiles data from monthly reports from approximately
    17,000 local police departments or State agencies, and it provides some
    of the most commonly cited crime statistics in the United States. Under
    the UCR program, the FBI collects data on the number of offenses known
    to police, the number and characteristics of persons arrested, and the
    number of ``clearances'' for eight different offenses, collectively
    referred to as Part I offenses. Part I offenses include murder and
    nonnegligent manslaughter, forcible rape, robbery, aggravated assault,
    burglary, larceny-theft, motor vehicle theft, and arson.\75\ Within the
    Part I offenses, crimes are categorized as either violent or property
    crimes. Violent crimes include murder and nonnegligent manslaughter,
    forcible rape, robbery, and aggravated assault. Property crimes include
    burglary, larceny-theft, motor vehicle theft, and arson. The UCR,
    however, is not a comprehensive source for data on crime in the United
    States. It collects offense data on a limited number of crimes (Part I
    crimes), which means that offense data are available only for a small
    number of all crimes committed in the United States. For instance, it
    does not include data on kidnapping--one of the oft-cited drug
    trafficking-related crimes discussed as evidence of spillover violence.
    Further, the inclusivity of the UCR data is affected by other factors
    such as whether or not local law enforcement chooses to report data to
    the FBI, the variety in reporting and data classification practices of
    local law enforcement agencies, and the imputation methods used by the
    FBI to estimate crime in jurisdictions that have not reported for an
    entire year.\76\
    ---------------------------------------------------------------------------
        \74\ The UCR is most commonly referenced when discussing crime
    rates, and for the purpose of this report, we present and analyze crime
    rates as reported by the UCR program. For more information on how crime
    in the United States is measured and on the UCR program, see archived
    CRS Report RL34309, How Crime in the United States Is Measured, by
    Nathan James and Logan Rishard Council. See also http://www.fbi.gov/
    ucr/ucr.htm.
        \75\ The FBI also collects data on the number of arrests made for
    21 other offenses, known as Part II offenses. Part II offenses include
    Other Assaults; Forgery and Counterfeiting; Fraud, Embezzlement; Stolen
    Property: Buying, Receiving, or Possessing; Vandalism; Weapons:
    Carrying, Possessing, etc.; Prostitution and Commercialized Vice; Sex
    Offenses; Drug Abuse Violations; Gambling; Offenses Against the Family
    and Children; Driving Under the Influence; Liquor Laws; Drunkenness;
    Disorderly Conduct; Vagrancy; All Other Offenses; Suspicion; Curfew and
    Loitering Laws (Persons under 18); and Runaways (Persons under 18).
        \76\ For more information, see archived CRS Report RL34309, How
    Crime in the United States Is Measured, by Nathan James and Logan
    Rishard Council.
    ---------------------------------------------------------------------------
        For the purpose of this report, CRS presents and analyzes violent
    crime rates as reported by the UCR program, as policy makers have
    repeatedly expressed concern about the possibility of drug trafficking-
    related violent crimes increasing.\77\ In addition to providing the
    overall National violent and property crime rates annually, the UCR
    program also provides these crime rates for metropolitan statistical
    areas (MSAs).\78\ In the present analysis of violent crime rate data,
    CRS relies upon the violent crime rate data for the MSAs as calculated
    by the UCR program. As mentioned, the violent crime rate includes
    murder and nonnegligent manslaughter, forcible rape, robbery, and
    aggravated assault.
    ---------------------------------------------------------------------------
        \77\ This does not exclude the possibility that policy makers may
    be equally concerned with drug trafficking-related property crimes.
    However, this report focuses on violent crimes. For information on
    National trends in both violent and property crime rates, see CRS
    Report R40812, Federal Crime Control Issues in the 111th Congress, by
    Kristin M. Finklea.
        \78\ The Office of Management and Budget (OMB) defines MSAs as
    having at least one urbanized area of 50,000 or more in population,
    plus adjacent territory that has a high degree of social and economic
    integration with the core as measured by commuting ties. For more
    information, see Executive Office of the President, Office of
    Management and Budget, Update of Statistical Area Definitions and
    Guidance on Their Uses, OMB Bulletin No. 10-02, December 1, 2009,
    http://www.whitehouse.gov/omb/assets/bulletins/b10-02.pdf.
    ---------------------------------------------------------------------------
        As mentioned, the NDIC estimates that Mexican DTOs maintain drug
    distribution networks--or supply drugs to distributors in at least 230
    U.S. cities (as illustrated in Figure 2).\79\ Because this information
    is assimilated based on State and local law enforcement agency
    estimations, as well as law enforcement interviews with NDIC staff,
    this is not necessarily a comprehensive or nuanced picture of Mexican
    drug trafficking presence in cities around the United States. For
    instance, while some cities may experience a larger amount of drug
    trafficking activity than others, these cities are considered as
    equally experiencing drug trafficking presence for the purpose of the
    NDIC estimate. In addition, there may be other cities not reporting the
    presence of DTOs, even if these organizations are active in those
    cities. If drug trafficking-related violence is in fact increasing in
    those cities reporting a presence of Mexican DTOs, one may expect to
    see an increase in such violence in the 230 cities identified by the
    NDIC--or perhaps only in those cities that are situated along the SWB
    if the violence is truly spilling directly across the border. Further,
    if this increase in violence were to follow a similar time frame as the
    escalating violence in Mexico, one may expect to see an increase in
    violence since December 2006, when Mexican President Felipe Calderon
    took office and began to crack down on the DTOs.\80\ For each of these
    230 cities, CRS determined whether there was a corresponding MSA and
    violent crime rate reported in the UCR for that MSA. CRS identified 138
    such MSAs, 8 of which directly abut the border between the United
    States and Mexico.\81\ As illustrated in Figure 3, CRS calculated the
    average violent crime rate across the border MSAs and the non-border
    MSAs for each of fiscal years 1999 through 2009.
    ---------------------------------------------------------------------------
        \79\ NDTA, 2009., p. 45.
        \80\ See CRS Report R41576, Mexico's Drug Trafficking
    Organizations: Source and Scope of the Rising Violence, by June S.
    Beittel.
        \81\ These MSAs include the cities of San Diego, CA; El Centro, CA;
    Yuma, AZ; Las Cruces, NM; El Paso, TX; Laredo, TX; McAllen, TX; and
    Brownsville, TX--all which were identified by the NDIC as having the
    presence of Mexican drug trafficking organizations.

        CRS analysis of available data suggests that the violent crime rate
    has not significantly increased in those areas where there is an
    identified presence of Mexican DTOs, as well as available data on the
    violent crime rate for those MSAs. Further, such analysis suggests
    there is no statistically significant difference in the average violent
    crime rate in these border and non-border MSAs between fiscal years
    1999 and 2009. Since 2001, the average violent crime rate in the eight
    selected border MSAs has generally declined, and it has remained below
    the National violent crime rate since 2005.\82\ It is unknown, however,
    whether trends in the violent crime rate are related to changes in drug
    trafficking-related violent crimes. Because the violent crime rate is a
    compilation of violent crimes both related and unrelated to drug
    trafficking, an increase in drug trafficking-related violent crime
    could be masked by a decrease in those violent crimes not related to
    trafficking--or vice versa.
    ---------------------------------------------------------------------------
        \82\ In 2005, the National violent crime rate was 469 and the
    average violent crime rate across the selected border MSAs was 465.9.
    ---------------------------------------------------------------------------
        Looking at the aggregate of border and non-border MSAs, however,
    may not provide information as to trends in individual MSAs or cities.
    For example, Figure 4 illustrates the trends in violent crime rates in
    eight border MSAs. As mentioned, if spillover violence were to trend in
    time with the escalating violence in Mexico, analysts may expect to see
    an increase in drug trafficking-related violence in 2007, 2008, and
    2009 relative to previous years. For instance, although one MSA--El
    Paso, TX--experienced an increase in the violent crime rate in 2007,
    2008, and 2009 compared to 2006, the violent crime rate in the El Paso
    MSA remained lower than the violent crime rates in fiscal year 1999-
    fiscal year 2004. This may be counterintuitive to some who expect that
    a ``spillover'' in violence may touch those cities closest in proximity
    to the violence in Mexico; El Paso sits directly across the Southwest
    border from one of the most violent Mexican cities--Juarez.\83\
    Further, anecdotal reports suggest that while some cities have seen a
    spillover in drug trafficking-related violence, El Paso has not.\84\
    ---------------------------------------------------------------------------
        \83\ Samuel Logan, ``Mexican Drug Cartel Recruitment of Teenagers
    in the USA,'' Mexidata.Info, December 14, 2009, http://mexidata.info/
    id2495.html.
        \84\ Deborah Tedford, ``Mexico Violence Not Spilling Into Texas
    Border Cities,'' National Public Radio, March 24, 2009, http://
    www.npr.org/templates/story/story.php?storyId=102256207.

        Spillover violence may not occur uniformly across the entire SWB
    during the same time periods. There may be hot-spot ``flare-ups'' in
    response to Mexican drug trafficking activity directly across the
    border. If this were true, violence would have climbed in Laredo, TX,
    in 2004 and 2005 when there was an increase in drug trafficking-related
    violence across the border in Nuevo Laredo. It did not. Also using this
    hot-spot analysis, the more recent increase in violence in Juarez
    should be linked to an increase in violence in El Paso, TX, in 2008 and
    2009. In this case, an increase in violence in a Mexican city does
    appear to be correlated with an increase in violence in a neighboring
    U.S. city. This further illustrates that relying on trends in overall
    violent crime rates may not provide an accurate depiction of trends in
    violent crime (or more specifically, in drug trafficking-related
    violent crime) around the country.
        Another possibility is that there may be a time lag between drug
    trafficking-related violence in Mexico and any associated violence in
    the United States. For instance, after settling territorial disputes in
    Mexico, rival DTOs may engage in violent conflict on the U.S. side of
    the border. With the data available, however, it is not possible to
    separate out a time lag from other factors that may influence levels of
    drug trafficking-related violence that may be seen in the United
    States.
                                   conclusion
        Mexico has experienced an increase in the level of drug
    trafficking-related violence within and between the drug trafficking
    organizations (DTOs), and the number of drug trafficking-related deaths
    in Mexico since December 2006 has been estimated at over 30,000.\85\
    Congress remains concerned with the possibility that the current drug
    trafficking-related violence in Mexico may spill over into the United
    States. One of the primary challenges in assessing this violence is
    defining the term spillover. While the interagency community has
    defined spillover violence as violence targeted primarily at civilians
    and government entities--excluding trafficker-on-trafficker violence--
    other experts and scholars have recognized trafficker-on-trafficker
    violence as central to spillover. When defining and analyzing changes
    in drug trafficking-related violence within the United States to
    determine whether there has been (or may be in the future) any
    spillover violence, critical elements include who may be implicated in
    the violence (both perpetrators and victims), what type of violence may
    arise, when violence may appear, and where violence may occur (both
    along the Southwest border and in the Nation's interior).
    ---------------------------------------------------------------------------
        \85\ ``Mexican drug war deaths surpass 30,100,'' CNN, December 17,
    2010, http://articles.cnn.com/2010-12-17/world/mexico.violence_1_drug-
    war-border-city-drug-related-violence?_s=PM:WORLD.
    ---------------------------------------------------------------------------
        At present, there is no comprehensive, publicly available data that
    can definitively answer the question of whether there has been a
    significant spillover of drug trafficking-related violence into the
    United States. Although anecdotal reports have been mixed, U.S.
    Government officials maintain that there has not yet been a significant
    spillover. CRS analyzed violent crime data from the Federal Bureau of
    Investigation's (FBI's) Uniform Crime Report program in order to
    examine data that could provide insight into whether there has been a
    significant spillover in drug trafficking-related violence from Mexico
    into the United States. However, this violent crime data does not allow
    CRS to determine the proportion of violent crimes that are related to
    drug trafficking or, even more specifically, the proportion of drug
    trafficking-related violent crimes that are attributable to spillover
    violence. In its analysis, CRS calculated the average violent crime
    rate across eight selected Metropolitan Statistical Areas (MSAs) along
    the Southwest border and 130 selected non-border MSAs--identified by
    the National Drug Intelligence Center (NDIC) as having the presence of
    Mexican DTOs--for each of fiscal years 1999 through 2009. CRS analysis
    suggests that the violent crime rate has not significantly increased in
    those areas where there is an identified presence of Mexican DTOs.
    Further, there appears to be no significant difference in the average
    violent crime rate in the selected border and non-border MSAs between
    fiscal years 1999 and 2009. In conclusion, however, because the trends
    in the overall violent crime rate may not be indicative of trends in
    drug trafficking-related violent crimes, CRS is unable to draw
    definitive claims about trends in drug trafficking-related violence
    spilling over from Mexico into the United States.

        Mr. McCaul. Thank you, Dr. Finklea.
        Let me just remind Members that the focus, really, of this
    hearing is what are we doing in Mexico? What is the United
    States' role in Mexico in the war against the drug cartels?
        We will be having an additional hearing talking about what
    is happening on the U.S. side of the border. I would argue that
    you can distinguish between spillover crime and spillover
    violence. I think the fact that 450 drug cartel associates were
    arrested in the United States directly after the murder of
    Agent Zapata signifies that spillover crime is, in fact, here,
    and they are here in the United States.
        With that, I recognize myself for 5 minutes.
        Mr. Alvarez, you supervised Agent Zapata. You are Agent
    Avila's supervisor. We have talked before this hearing and I
    have discussed what happened that fateful day with you and
    Agent Avila.
        I know you can't get into the details of what occurred that
    fateful day, but can you describe to this committee and to the
    American people what the threat level is really like in Mexico
    and what ICE agents and DEA agents and FBI agents go through on
    a day-by-day basis in terms of the threat level?
        Mr. Alvarez. Certainly, Mr. Chairman.
        Having been down there for 5 years, I can personally tell
    you and also in discussions with some of my agents down in
    Mexico, it is a difficult work environment. They are constantly
    looking out for their safety, their surroundings. There is a
    risk of, or a very difficult working environment down there.
        They are concerned about their family members from the time
    you wake up in the morning until the time you go to sleep. It
    is a very uncomfortable work environment.
        Nonetheless, they come down there prepared. We do provide
    them training before they deploy. The U.S. Embassy also
    provides--at least they provide some sort of security briefings
    for the family members for the agents as they operate in
    Mexico.
        It is a very difficult work environment, as I mentioned.
    Nonetheless, the cooperation level with the Mexican government
    has been terrific throughout the years. Since I got down there
    in 2000 to where we are today, the cooperation has been
    excellent.
        Unfortunately, I think the violence has increased.
    Nonetheless, I think the risk level has increased tremendously
    also.
        One of the problems that we face now is trying to recruit
    ICE agents to actually go down to Mexico and work on our
    behalf. It is getting more and more difficult as a result of
    the increased violence.
        Mr. McCaul. We certainly want to make sure that you are
    protected down there. If we are going to put you in harm's way,
    into a war zone, we want to make sure you are adequately
    protected, you have the resources you need. I can only imagine.
        Talking to Agent Avila, he mentioned how he left Mexico
    City to come back into the United States and the stress level
    just totally decompressed. You are on constant high alert every
    day.
        I think the exhibit that is on the screen today, which is
    the vehicle that Agent Avila and Zapata were riding in that
    fateful day, demonstrates how violent the situation has become
    down there. If you look at this vehicle, which is a highly
    secure vehicle, over 80 rounds from an AK-47 were fired at this
    vehicle. It looks like something out--like a Bonnie and Clyde
    movie, and this is real, and that is what is happening in
    Mexico.
        That takes me to Mr. Nichols and Mr. Mora.
        Let me say to Mr. Nichols first, we worked very hard on the
    Merida Initiative, and I appreciate your efforts, but over 2
    years since we passed that critical legislation with $1.5
    billion, I must express my disappointment that only 25 percent
    of that funding has gone down to Mexico for the intended
    purpose, particularly given the increased level of violence and
    threats in Mexico. But having said that, the fundamental
    question of this hearing is: What is our plan down there and
    what is our strategy down there?
        Mr. Nichols, the State Department is--basically you are in
    charge of what the mission is in Mexico, and I have to be
    honest with you, it doesn't seem very comprehensive. It is hard
    to tell what the strategy really is other than throwing ICE
    agents down there and DEA. We have State Department officials.
        But I would like to know from you: What is our plan? What
    is our mission? What is our objective?
        Because ultimately it comes down to: Are we going to help
    them win this war or not? It is a war, and President Calderon
    calls it a war.
        Mr. Mora, what I would like to hear from you is what is the
    Department of Defense doing jointly with the Mexican government
    to eradicate these dangerous drug cartels?
        In closing, I talked about Plan Colombia, and I know, you
    know, that may not be the model, but I think there are lessons
    learned from what we did in Colombia that we can be applying in
    Mexico to help win this war. I know the sovereignty issues are
    great in Mexico, but I think eventually, in my judgment, the
    answer is going to be we are going to have to have a joint
    intelligence, joint special operations, basically, force down
    there to go after these drug cartels.
        With that I will open it to the two of you.
        Mr. Nichols. Thank you, Mr. Chairman.
        The Merida Initiative is a four-pillar strategy that brings
    a comprehensive whole-of-government approach to addressing the
    problems in Mexico. It is an approach that has been carefully
    negotiated with the Mexican government, who is a full partner
    in all of its elements.
        The first pillar is going after the drug trafficking
    organizations. Those transnational criminals have to be
    dismantled and I am proud to say that our partners in the
    Department of Homeland Security and the Department of Defense
    have played an important role in that process.
        We, through the State Department, are providing support to
    Mexican institutions and strengthening them to take on this
    challenge more effectively. That is the second pillar of the
    Merida Initiative.
        We have trained thousands of police prosecutors and judges
    and we will train thousands and thousands more over the course
    of this year. Strengthening Mexico's institutions is vital to
    the solution.
        The resolution rate for crimes--you as a former prosecutor
    would know--in the United States, it is about 90 percent when
    you can bring somebody to trial, you are going to get a
    conviction and the ability of the great police of both the
    State, Federal, local in the United States to resolve cases is
    something we would like to replicate within----
        Mr. McCaul. My time is sort of limited. I want the other
    Members to be able to ask questions.
        But I know all about Merida. Congressman Cuellar does, too.
    We were very involved with that initiative and getting it
    passed through the Congress.
        But with only 25 percent--you know, my judgment, the
    Department of State has not implemented this plan. You know, if
    that is the strategy it is failing because we are not winning
    down there.
        So this Merida Initiative, the way it is being implemented
    is not working, and it needs to be ramped up. I hope the State
    Department will fully implement this plan and the resources
    that we in the Congress and the American people provided to
    you.
        Mr. Mora, can you tell me about the Department of Defense
    and its role in the Mexican war?
        Mr. Mora. Certainly, Mr. Chairman.
        In addition to the aircraft platforms that I mentioned in
    the remarks--the Bell helicopters, the Blackhawks, and the
    maritime surveillance aircraft, which we are helping execute as
    part of Merida, the U.S. defense Mexico--U.S.-Mexico defense
    cooperation also includes a number of training, equipment, and
    information exchanges in areas such as tactical and operational
    skills, all very much in the tactical operational area--night
    operations, aircraft pilot and mechanical training, information
    analysis. These are the kinds of things. I can go on and on on
    these particular issues.
        In addition, one thing that I did not mention in my opening
    statement, Mr. Chairman, is that Congress appropriated a little
    over $5 million in fiscal year 2010 under FMF to improve SEDENA
    special forces rapid reaction teams--night vision capability,
    that kind of capacity to provide--and also provide secure
    communications as well. So we are executing--we will be
    executing that.
        So those are the areas in which we are plugged in--the
    Department of Defense----
        Mr. McCaul. My time is over, but I think we need more of
    this down there, and I think we had a crisis situation down
    there and it is not getting any better. I don't know who is in
    charge of the plan, who is in charge of the strategy.
        Do you coordinate at the Department of State? You know, are
    the relevant agencies working together? What is the plan and
    the strategy? I know Merida is part of it and what you are
    doing, but who is in charge of this?
        Mr. Nichols. Mr. Chairman, we coordinate extensively under
    the direction of the President and the Secretary through the
    National security staff. Frank and I talk on a very, very
    frequent basis. He is on speed dial on my phone. We are working
    on these issues.
        Let me run through----
        Mr. McCaul. Let me say that Secretary Clinton--I am on
    Foreign Affairs as well--I think she understands this, but the
    President needs to show leadership on this issue and recognize
    that we have a serious issue in our backyard that needs to be
    dealt with.
        So my time is way over, and with that, let me recognize the
    Ranking Member, Mr. Keating.
        Mr. Keating. Thank you, Mr. Chairman.
        I understand some of the difficulties, Mr. Alvarez, of
    actually bringing some of these difficult cases to trial, but
    of the 1,616 criminal arrests made by the BEST teams only a
    little over half of the arrests resulted in indictments and a
    mere 689 resulted in convictions--not to minimize the work of
    those teams, because I know how tough that is and I know how
    tough it is to take the next step.
        But do you think the indictment and conviction rates that
    are low--can you think of things that can be done to improve
    that?
        Mr. Alvarez. Well, some of the focus of our BEST along the
    Southwest border--of the 21 BESTs that we have in the United
    States and in Mexico City, 11 are along the Southwest border. A
    lot of the arrests are both for criminal and administrative.
        Through ICE's statutory and administrative authorities we
    are able to remove a lot of these gang members that are
    identified during the course of an investigation, so we are
    able to get those folks back to their home country that are
    here illegally, essentially.
        I am a big believer in the BEST. The BEST program, as I
    mentioned, includes Federal, State, local, foreign law
    enforcement officers working in collaboration with each other,
    using their statutory and their experience levels and going
    after the transnational gang members that are operating in the
    United States. So the expansion, I think, of our BEST program
    to include more of them, quite frankly, I think would better
    serve the United States.
        Mr. Keating. Also, Mr. Alvarez, I agree with you that most
    of the effective methods at dismantling some of the DTOs is to
    go after the transport of cash. From a Mexican perspective,
    some of the things that fuel their ability to work as gangs and
    as cartels really are the resources of that cash and the
    resources of guns for them to operate.
        So viewing it from the fact that those resources are
    available to them, what can be done in terms of minimizing
    those resources--the cash that is there and the guns that are
    there for them to utilize?
        Mr. Alvarez. Well, as I mentioned in my initial statement,
    ICE is committed to going after the drugs, going after the
    weapons, going after the illicit proceeds that they obtain. One
    of the things that we have done at ICE is we have actually
    stood up our National Bulk Cash Smuggling Center. It is a
    strategic approach to really go after the cartels, really go
    after the organizations that are picking up the money, the
    illicit proceeds in the United States and trying to get it back
    to their country, getting back to the sources, back to Mexico.
        Operation Firewall, another operation that I mentioned in
    my opening remarks--we were able to seize over $120 million
    just this fiscal year in drug proceeds, or illicit proceeds, in
    that operation. We have extended that operation
    internationally.
        We continuously work with our CBP partners and other law
    enforcement partners at the actual border to conduct outbound
    operations in an effort to interdict the cash that is moving
    southbound, and that has proven to be very effective in the
    past.
        Mr. Keating. Mr. Nichols, you know, you have touched upon
    the cooperation between Mexico and the United States, but I
    think one of the fundamental questions we have is how do we
    balance the fact that Mexico is indeed a sovereign nation with
    our dual initiatives to work together? How do you strike that
    balance?
        You know, it seems to be making some progress here, but in
    Mexico things are continuing to be even more dangerous than
    before. So how do we strike that balance?
        Mr. Nichols. Thank you, sir.
        I would just like to clarify one point on what our pipeline
    is in terms of delivery of assistance. We have obligated over
    80 percent of the funds that have been appropriated. We have
    delivered nearly 40 percent that is----
        Mr. Keating. I am sorry to interrupt, Mr. Nichols, but I
    just have limited time. I just wanted you to just touch on my
    question.
        Mr. Nichols. I will, sir. I just wanted to make sure that I
    was able to touch on the other question with the limited time
    that the Chairman had.
        We balance those concerns with Mexico by working through
    them in a partnership. Anything that we are going to do has to
    enjoy the support and the leadership of Mexican authorities. We
    have to take their concerns into account.
        We work with them hand-in-glove. We sit down next to our
    Mexican colleagues in a myriad of venues to work through issues
    like: How do we promote transition to a new justice system in
    Mexico? What are the systems that they are going to use for
    customs inspections?
        One of the heartening things that I have seen is, in terms
    of CBP cooperation with Mexican customs, they want to be
    completely interoperable with CBP, so we have been working very
    closely with them to get them the same systems that CBP uses in
    their work so that they can work seamlessly together. Those are
    the types of cooperation that we have, sir.
        Mr. Keating. Mr. Mora, I had a question for you, too. You
    know, under what circumstances, if any--and I know it is a
    difficult question to answer, but--would the military be called
    on to actively engage in Mexico, beyond what you have already
    stated? For instance, would things be ruled out----
        Mr. Mora. Yes, Congressman. Short answer is no. We do not
    envision in any way using U.S. military troops deployed in any
    way in Mexico. I think the President has been quite clear on
    this issue about militarizing both the border as well as our
    relationship. So again, the short answer would be no.
        Mr. Keating. Thank you.
        Again, Mr. Mora, DOD provides the Government of Mexico with
    equipment. However, there are some complaints about how long it
    takes for the equipment to arrive there. Are you concerned
    about that length of time and the time it takes to get the
    equipment there and the resources deployed, and do you have any
    suggestions about what could be done to speed that?
        Mr. Mora. I think there was some initial concern,
    Congressman, but I think we have now accelerated. As Brian sort
    of indicated, we are now executing, with respect to the
    aircraft, all of our equipment under the Merida Initiative; and
    we will execute 100 percent of it by this time, probably, next
    year, with respect to the CASA surveillance aircraft.
        Mr. Keating. Thank you.
        Mr. McCaul. Chair now recognizes the gentleman from South
    Carolina, Mr. Duncan.
        Mr. Duncan. Thank you, Mr. Chairman.
        Before we get started, we have heard the term ``war''
    thrown out a number of times here this morning, and I want to
    ask each panelist, by a show of hands, do you believe we are at
    a war--we have a war on drugs in this country?
        Do you believe we have a war on drugs?
        Okay. In 1971 apparently Richard Nixon did. That is when
    the term was first used.
        I am amazed that the White House will not use that term. In
    fact, the drug czar said--the White House drug czar claims that
    to be a counterproductive term. But we have heard that term
    used a number of times today about the war against the Mexican
    drug cartel.
        I am going to go a different line of questioning, but we
    are spending $15 billion in 2010 to fight this war on drugs
    when there is no war on drugs--that is $500 a day. It is just
    amazing to me.
        I believe we do have a war on terror, and prior to
    September 11, 2001 the terrorist organization Hezbollah was
    responsible for the deaths of more Americans around the world
    than any other terrorist organization. United States designated
    Hezbollah as a foreign terrorist organization in 1997 and a
    specially designated global terrorist in 2001.
        I am concerned about the relationship between Hezbollah and
    the Mexican drug cartel, and there is evidence to prove that.
    Not only did we have an IED explosion in July of last year, in
    2002 Salim Boughader Mucharrafille--I don't know how to
    pronounce the last name there, but he was the owner of a
    Lebanese cafe in Tijuana who was arrested for smuggling 200
    people, including Hezbollah supporters from Mexico into the
    United States. In 2005, Mahmoud Youssef Kourani crossed the
    border from Mexico into California and traveled to Dearborn,
    Michigan, where he was sentenced to 4\1/2\ years in prison for
    conspiring to raise money for Hezbollah.
        According to DHS, between 2007 and 2010 180,000 people have
    been captured that are other than Mexicans at the Southern
    border. Since the fall of 2008 at least 111 suspects of
    Hezbollah-linked international network of drug traffickers and
    money launderers have been arrested as part of an international
    operation coordinated by the DEA.
        In July 2010, a Kuwaiti newspaper reported that Mexico
    foiled an attempt by Hezbollah to establish a network in South
    America. The newspaper said Hezbollah operatives employed
    Mexican nationals with family ties to Lebanon to set up a
    network designed to target Israel and the West. Chamil Nazar
    traveled frequently to Lebanon, made trips to other countries
    and Latin America, and was living in Tijuana, Mexico at the
    time of his arrest.
        In August, 2010, Jamal Yousef, a member of the Syrian
    military, was charged in New York with attempting to sell 100
    M-16 assault rifles, 100 AR-15 assault rifles, 25,000 hand
    grenades, anti-tank munitions, C-4 explosives to FARC, that the
    Chairman mentioned earlier, a designated terrorist
    organization, in exchange for 1 ton of cocaine. The weapons
    were stored in Mexico at the home of Yousef's relative,
    according to Yousef, and Yousef is a member of Hezbollah.
        I think it is a real issue that we have got that we are
    seeing Hezbollah in bed with the Mexican drug cartel. They are
    using their tunneling expertise, I think, to help the cartel
    bring God knows what into this country. It is a real concern
    for us as Americans.
        Mr. Chairman, these examples don't even count the
    information we have on this issue that is classified.
        Many experts believe that Hezbollah and the Mexican drug
    cartel have been working together for years. It is well-known
    that Hezbollah and the drug cartels have cooperated in
    countries in Western Africa, South America, and Central
    America.
        So with many open-sourced examples and with all the money
    involved in drug trafficking, gentlemen and ma'am, do you
    believe that the threat of Hezbollah on our Southern border
    merits further investigation? That is an open question to all
    four of you.
        Mr. Nichols. I think it is important to look at all of the
    links to transnational actors. These are international criminal
    organizations and they forge links with whatever groups can
    serve their advantage. We have to work very closely with our
    Mexican allies in looking at any of these linkages and make
    sure that they are not exploited.
        Mr. Duncan. What is DHS, DOD, DOS doing in those
    conversations, but beyond those conversations, to protect this
    country against this very real threat? What are some of the
    steps that have been taken other than just conversations?
        Mr. Alvarez. We at ICE--in Mexico we focus on alien
    smuggling. We are looking at all the illicit pathways that are
    coming in through Mexico into the United States, so we are
    working with our Mexican partners as they intercept illegal
    aliens as they transit through to identify if they are a part
    of a terrorist organization. Where are they originating from?
        So there is a good working relationship with our Mexican
    counterparts working hand-in-hand, sharing information, sharing
    any intelligence we have to try to identify and detect any
    suspects coming through their country and eventually trying to
    gain entry into the United States.
        Mr. Duncan. All right.
        Congressman Sue Myrick recommended in a letter to Secretary
    Napolitano in June of last year requesting the DHS form a
    homeland security task force to engage U.S. and Mexican law
    enforcement and border patrol officials about Hezbollah's
    presence, activities, and connections to gangs and drug cartel.
    To date, I am not aware of any task force that has been
    created.
        When the lives of Americans are threatened on our very own
    border why would not a task force--a true task force to look
    into this--be created?
        Apparently you all are struggling with the fact that we
    have not addressed this very real issue, and so I will let your
    lack of an answer just stand as an answer since we are out of
    time.
        Thank you, Mr. Chairman.
        Mr. McCaul. Thank you. Thank you for that question. I think
    that this--certainly this committee will be investigating that
    connection. Thank you for that question.
        Next the Chair recognizes the gentlelady from New York, Ms.
    Clarke.
        Ms. Clarke. Thank you. Thank you very much, Mr. Chairman
    and Ranking Member Keating. This is a very important hearing
    here today, very wonderful responses, I believe, that we have
    received from our panelists that really provide some
    transparency and light around our Nation's relationship with
    Mexico and the challenge we face with working with a sovereign
    nation on an issue that is internal but may have spillover
    implications.
        What I took from your testimony today is that there is very
    close cooperation with the Government of Mexico and our concern
    is around drug trafficking, gun trafficking, human trafficking,
    and the organized crime that perpetuates that. Is that not
    correct?
        Mr. Nichols. Absolutely. We have incredibly close and
    comprehensive relationships with the full range of Mexican
    government actors and a very fluid relationship that is bearing
    real fruits.
        Ms. Clarke. Let me ask you a question, Mr. Nichols. If
    Mexican DTOs are designated as foreign terrorist organizations
    what impact would it have on U.S. human rights and
    developmental programs in Mexico?
        Mr. Nichols. We would need to work very closely with our
    Mexican counterparts first of all to ensure their support for
    any type of a designation. That has profound implications
    politically within Mexico, and under the current framework
    where we are using the kingpin framework to go after these
    transnational cartels, I think we have made tremendous progress
    in going after their assets, in targeting key individuals and
    bringing the full force of law enforcement upon them, and I
    believe that that is the direction that we need to continue.
        Ms. Clarke. Well, let me ask all of you, just based on the
    information you have shared, based on the information we have,
    do you have any statistical information that would indicate
    that there is a spillover that is on the rise in the United
    States of America?
        Ms. Finklea. As far as CRS knows there is no one that is
    systematically collecting this data across the Southwest border
    and compiling it so that you can compare it to a baseline. So
    though the UCR data can speak to violent crimes it can't parse
    apart drug trafficking-related violent crimes and it can't
    speak to whether there has definitively been a spillover or
    not.
        Ms. Clarke. Then how does one truly set parameters on
    spillover violence? Can we attribute violent crimes
    domestically with homegrown drug gangs and activities to the
    spillover of transnational drug cartels? How does one define
    the spillover?
        Ms. Finklea. The interagency community has defined
    spillover violence as: ``Spillover violence entails deliberate,
    planned attacks by the cartels on U.S. assets, including
    civilian, military, or law enforcement officials, innocent U.S.
    citizens, or physical institutions, such as government
    buildings, consulates, or businesses.'' This definition does
    not include trafficker-on-trafficker violence, whether
    perpetrated in Mexico or in the United States.
        Ms. Clarke. Okay. So, for instance, if we know that the
    point of entry of certain illicit drugs is the border of Mexico
    and somehow it makes its way to inner city New York City where
    there is a network of drug dealers that are connected to this
    distribution route, and they decide to engage in gang violence,
    and there is a parent with a child sitting out there at the
    moment that this violence erupts, and they are innocent
    citizens of the United States, does that fall into the
    parameter of a spillover of the Mexican drug cartel scenario
    that we are painting here?
        Ms. Finklea. Well, I wouldn't be able to definitively
    answer whether that would or would not fit into, because the
    motivations of the individuals who are involved in the gang
    warfare that you described would probably be better assessed by
    someone in law enforcement who has been able to investigate
    this. But the innocent and bystanders would fit under the
    interagency community's definition of spillover violence.
        Ms. Clarke. Okay. Well, I appreciate you giving me that
    feedback because I am just trying to figure out why we have, I
    guess, set such a focus on Mexico when this is a phenomena that
    is being played out in cities around this Nation, and I don't
    know that we are looking at the entire picture here when we
    focus solely on, you know, the event that may occur on the
    border.
        Certainly I send out my condolences to those who are
    fighting on the front line, our officers that--one whose life
    was taken and the other who is recovering from an injury. But I
    think there is a much larger phenomena that we need to take a
    look at because if we limit our scope to simply what is
    happening on the border then I think we are mentioning a much
    bigger picture when we are talking about this phenomena than we
    are giving ourselves credit for.
        So I yield back, Mr. Chairman.
        I thank you all once again for your testimony here today.
        Mr. McCaul. I thank the gentlelady from New York.
        Let me just say that this--again, this first part of the
    two-part series of hearings--this part is focused on what are
    we doing in Mexico; the second part will be discussing your
    very issue, which is what is happening in the United States.
    Again, I think the arrests of the 450 drug cartel associates in
    the United States indicates that they are here and operating
    here, so there certainly is a spillover criminal element, and
    not to mention the be on the lookout notices that target U.S.
    law enforcement on this side of the border as well.
        So with that, I yield to the--and recognize the vice chair
    of the subcommittee, the gentleman from Missouri, Mr. Long.
        Mr. Long. Thank you, Mr. Chairman.
        Thank you all for your time today as the panelists. Thank
    you individually for the joint work that you do in your
    particular fields, because I know that all of you work
    extremely hard and do the very best that you can, and I
    appreciate that.
        Mr. Alvarez, let me ask you first, when you say that we are
    having trouble recruiting ICE agents to work in Mexico and then
    we tell them, ``We want you to work in Mexico but you can't
    carry any arms on you''----
        Mr. Cuellar. Mr. Chairman?
        Well, I think you know what we need to----
        Mr. McCaul. This issue is a very sensitive issue that I
    would advise the gentleman that there is a classified briefing
    available that the Secretary asked that I attend, and I would
    ask that you also receive this classified briefing on this very
    issue. But certainly I think the line of questioning in terms
    of our agents protected down there is a line of questioning
    that would be appropriate.
        Mr. Long. I will move on to another line of questioning.
    How is that?
        My understanding is drugs are coming out, money and guns
    are going down. Mr. Mora said that the President doesn't want
    to militarize the border under any circumstances.
        A question for you, Mr. Mora. Defense Secretary Robert
    Gates and Joint Chiefs Chairman Admiral Mike Mullen traveled to
    Mexico a year ago this month, I believe, along with Secretary
    Clinton, to offer increased military assistance and
    collaboration to the Mexican counterparts. If the Mexican
    officials turn down U.S. assistance what recourse do we really
    have?
        Mr. Mora. Well, Congressman, I think that we have continued
    to engage and enhance the level of cooperation that we do,
    particularly with our interlockers, which are SEDENA and SEMAR.
    But as I mentioned in my opening remarks, it is important to
    keep in mind that DOD's cooperation is requested and approved
    by the Government of Mexico.
        As I stated--and Secretary Gates has said this in public on
    probably two occasions at least--we take our lead from the
    Mexicans. Mexicans decide the speed and the depth of our
    cooperation and we are prepared to engage on those issues
    expeditiously.
        Mr. Long. Okay.
        Mr. Alvarez, for you, in fiscal year 2010 ICE deported a
    little over a quarter million individuals to Mexico and over
    half of those had criminal records. What steps has your agency
    taken to ensure criminal deportees are not contributing to the
    drug trafficking-related violence in Mexico and/or immediately
    reentering the United States?
        Mr. Alvarez. Last year Secretary Napolitano entered into an
    agreement with the government of Mexican--Mexico whereby we
    would provide criminal history information to the Government of
    Mexico prior to a criminal Mexican national before that
    individual is actually deported back to Mexico. So in other
    words, Mexican government knows of this individual the
    background and individual circumstances as to why that
    individual was detained and ultimately removed out of the
    country. So for them it is a heightened alert level on this
    individual that is operating in their country.
        Mr. Long. Okay.
        Again, I want to thank you all for your testimony, for what
    you do on an individual basis, and I yield back.
        Mr. McCaul. Thank you.
        If I could follow up on your first question, I think the
    issue is, Mr. Alvarez, in light of what happened to the agents
    you supervise, Agents Zapata and Avila, they are, I think, in
    danger. What security precautions are being taken to make sure
    that they are protected down in Mexico and to make sure that
    they can adequately defend themselves?
        Mr. Alvarez. Well, a few of the steps that we have taken--
    and we are working very closely with the Department of State,
    Diplomatic Security, the U.S. Embassy on the ground--is we are
    providing training and all the tools and equipment that is
    needed for our agents to operate in country. Just recently we
    brought up our agents from Mexico City. We provided them some
    training in the United States--defensive driving tactics and
    several other types of training so they can carry out their
    mission and be prepared for whatever they are going to
    withstand down in Mexico.
        Mr. McCaul. I know Agent Avila said that, you know, 10
    guides with AK-47s--you know, what can you do in that
    situation? Totally outgunned down there and outmanned, and that
    is the situation, and I appreciate the gentleman from Missouri
    raising that issue.
        With that, I am going to recognize my good friend, the
    gentleman from Texas, Mr. Cuellar.
        Mr. Cuellar. Mr. Chairman, thank you very much for having
    this meeting--hearing, and Ranking Member, also.
        First of all, before I lose my voice I want to say thank
    you to all the witnesses that we have. We really appreciate
    what you do.
        By the way, I am a big supporter of the BEST program. As
    you know, Michael McCaul and I have--Chairman McCaul--have
    filed legislation and we are hoping by the middle of April we
    should get that marked up, and I would love to sit down with
    you because it actually started Laredo, and it is one that
    works very well because you coordinate, communicate between the
    State, Federal, local, and even on the Mexican side.
        There are a couple of videos that I have asked the Chairman
    if we could see this after the hearing, and--just to give you
    an impression that I know some of you all are familiar with
    already, but it is videos to show you how the drug cartels
    operate in a very efficient way in Mexico. It is a way that--it
    is a snapshot that should tell us why we need to do more to
    help the Republic of Mexico.
        Now, it is a very dynamic situation. There is a lot of
    sensitivities, a lot of history, and the reason we can't go in
    and send the military is because Mexico is a foreign country.
        There is a real estate history between the United States
    and Mexico, if I can use that term, and because of that real
    estate history between the United States and Mexico, Mexico is
    very sensitive. But as the Chairman and I--when we were down
    there in Mexico we spoke to President Calderon and other
    folks--Secretary Galvan, also, from the defense--we said,
    ``Look, we can help you as much as you want us to help us--help
    you.''
        There are a lot of steps. I mean, even the drones are now
    flying over there. That took a lot for them to go. There are a
    lot of things that can be said out in the open and some that
    are classified that we are helping Mexico.
        The only thing I ask--and, Mr. Chairman, you are going to
    have a separate hearing--look, the drug cartels are in the
    United States. If you look at the CRS--and I have got to say,
    Doctor, you did a great job--if you look at page 8 of the CRS
    report, they are already here in about 250 cities. You give me
    your State and they are probably there already.
        So they are here already. The issue of spillover violence
    is something that we have to look at very carefully. I am from
    the border. My family is there.
        I have got a brother who worked for DPS for 28 years--
    intelligence, narcotics, he is now the border sheriff down
    there. You know, we live down there, over there, and we just
    have to be very careful when we talk about the spillover of
    crime--and there is always that potential. I know we will cover
    this over.
        But if you look at also the CRS--because there has really
    been no study on the drug-related violence over--the best we
    can use is the FBI violence rate, and if you look at page CRS
    22 and 23, if you look at the border areas and compare it to
    non-border MSAs, actually the border areas are--statistically
    there is no difference between Austin or Boston and other
    places.
        In fact, the border areas, my understanding, Doctor, are
    below the National rate. Is that correct?
        Ms. Finklea. For the eight MSAs that were included in this
    particular investigation that is correct.
        Mr. Cuellar. Which are the big areas like Laredo, El Paso,
    McAllen, the areas that I think you are all familiar with. We
    know the numbers. One of the most violent cities in the
    Republic of Mexico, Mr. Chairman, Ciudad Juarez--and you look
    at El Paso and it is one of the safest cities in the United
    States.
        So in Laredo back in 2004 and 2005 when they had that hot
    spot of crime and they had, like, 54 policemen that went
    missing because they didn't want to play ball and they were
    killed, or kidnapped, or whatever they did to them. The
    spillover crime in Laredo didn't pop up.
        So I say that because to my friends, our new Members in the
    committee, I would ask you to just be--you know, we have got to
    make sure we understand what is happening over there and what
    is happening over here. We still have to be mindful of
    spillover crime, but----
        The only thing I would ask you is, Mr. Chairman, I am in
    full agreement with you on what we need to do, and I know the
    folks here of the State Department, even though I am--I think
    you all need to move a lot quicker and I know some of it is
    going to take time--the professionalism of police, the
    professionalism of the judiciary, the prosecutors, the
    prisons--we saw what happened in--they--about 150 prisoners
    went out and the joke was the only reason they took only 150
    prisoners from the Nortelavell Prison because that is the only
    buses they had available at that time to take them out. So all
    those institutions have to be developed, and it is going to
    take time.
        There are a lot of similarities and differences between the
    United States--I mean, between Mexico and Colombia. There are
    some areas I think we can work with. In fact, Colombians are
    training Mexicans right now, at this time, as we are.
        So the only thing I ask for our Members, because my time is
    up, is that, you know, we just--we are all on the same page. I
    just ask Members to be a little mindful as we go.
        If we really want to address it--I will close up with this,
    Chairman--if we really want to address the issue of border
    violence and all this we need to go and take it to them, take
    the fight over. I use the word war--I think the other
    gentleman, Duncan--I use the word war.
        We have to go in there. We can't send the military. I know,
    you know, we can send ICE agents and other officials over
    there. I know there are challenges.
        But we have to go in and work with them, but we just have
    to be mindful of the sensitivity. There is a very sensitivity
    because of history and other areas.
        Mr. Chairman, I look forward to working with you and the
    Ranking Members and the other Members of the committee to how
    we can best address this issue.
        So to all of you all, thank you.
        Members, please take a look at the CRS report. It has some
    very good information there.
        Thank you.
        Mr. McCaul. Thank you, Mr. Cuellar. We always appreciate
    your special expertise and experience living down on the border
    every day. I think when we visited President Calderon he called
    it a war. He said, ``I have declared war on these drug cartels
    which threaten the security of my nation.''
        So thank you, again, for that.
        For any Member interested, Mr. Cuellar does have a highly
    sensitive video that he has described involving drug cartel
    operations in Mexico taking over checkpoints. For anybody
    interested, there will be a closed briefing after this hearing
    to view that video.
        With that, I see we have Mr. Marino, from Pennsylvania, the
    colleague in the Justice Department and a former U.S. attorney.
        Mr. Marino. Thank you, Mr. Chairman. I apologize profusely
    for being late. I have had several committee meetings and I
    wanted to make sure--in fact, I left early to get to here.
        I want to thank the panel for being here.
        But I walked in just at the opportune time because my
    colleague is absolutely right. Being a prosecutor at the
    Federal level and at the State level, the drugs coming across
    the border--the Mexican border--in addition to the violence is
    off the Richter Scale at this point.
        I have had the chance, as the U.S. attorney, to visit that
    border on numerous occasions and actually observe what is
    taking place. Our services are called for around the United
    States and around the world, more so in Libya, other fronts
    that we are on, but I submit to you, we are missing a very
    critical war right here on our borders of the United States,
    and that is--and I agree with you 1,000 percent. It is a war.
        It is a drug war; it is a cartel. They are incredibly
    violent. They think nothing of wiping out entire families, not
    to mention what has happened crossing the borders into the
    United States, not to mention the drug addiction, the death,
    not only the misery that this instills upon our life here in
    America but the expenses as well.
        Again, apologizing for not being here and listening to the
    questions, I have a question--just one question and maybe each
    of you can take a moment and discuss it. What could we,
    Congress, particularly what could I, as a new Member, do to win
    this war and to break this stalemate that--it is not even a
    stalemate, I think. We are at a disadvantage here at this point
    now--concerning the war on drugs, particularly what is
    happening between Mexico's border and our border?
        Mr. Alvarez, please start.
        Mr. Alvarez. Thank you, Congressman.
        I think the support that we have gotten thus far has been
    tremendous. We appreciated the Merida Initiative, the support
    by Congressman Cuellar, Congressman McCaul, on the support you
    have given us to our Border Enforcement Security Taskforces,
    the BEST task forces along the border, of which, as I mentioned
    before, we have 11 on the Southwest border.
        Obviously, you know, expanding those to other areas would,
    I believe, be crucial to our success. Our partners in--speaking
    of the BESTs, we also have five police officials from the SSP,
    from the Mexican Federal Police, embedded in some of those task
    forces to really facilitate the exchange of real-time
    information, being able to really attack the cartels, being
    able to go after the transnational criminal organizations on
    both sides of the border.
        We expanded, as I mentioned, to Mexico City. We are working
    hand-in-hand with our Mexican counterparts on the other side of
    the border.
        So I think the support that we have gotten has been
    tremendous. I think we can--obviously there is room for
    improvement.
        We have 25 percent of our workforce, of our ICE agents,
    physically located on the Southwest border, the highest we have
    ever had. That support has been tremendous thus far. Obviously
    there is more we can do, but to this point we appreciate what
    you have done thus far.
        Mr. Nichols. I would echo that. You and your fellow Members
    have been tremendously generous in your support for our efforts
    in collaboration with the Mexican government. I would hope that
    you would be able to continue that support.
        The Chairman and Mr. Cuellar's comments that whatever the
    number we have already delivered we need to do better in
    delivering that assistance and do it faster are extremely well
    taken, and rest assured that we are going to do that. So thank
    you very much for your support for all our efforts.
        Mr. Marino. Thank you.
        Mr. Mora.
        Mr. Mora. Yes, Congressman. I would agree with my
    colleagues.
        I think, as I said previously, I think the best way we can
    support our Mexican partners and ourselves is that we be
    prepared to respond to--quickly to their requests for
    assistance. I think the support to now has been very positive,
    very good, but we need to be prepared, I think, when the
    Mexicans are prepared to--as we work together, to establish the
    way ahead--further way ahead, I should say--we need to be ready
    and willing to respond in an expeditious, quick manner.
        Mr. Marino. Thank you.
        Doctor.
        Ms. Finklea. As a representative of the Congressional
    Research Service I can't offer an opinion on policy options,
    but I can say that the current data that is available for us to
    assess drug trafficking-related violence isn't fine-tuned. It
    doesn't have the level of specificity for us to be able to
    assess that.
        Mr. Marino. I see my time is expired. Thank you.
        Mr. McCaul. Chair now recognizes the gentlelady from the
    great State of Texas, Ms. Sheila Jackson Lee.
        Ms. Jackson Lee. Thank you very much, Mr. Chairman. Thank
    you for your courtesies extended.
        Thank the witnesses as well for their presence.
        Let me put on the record that I had asked Chairman King for
    an overall classified briefing on drug cartels and I would like
    to again make that request, and I would certainly like to thank
    my good friend, Congressman Cuellar, for his first-hand
    experience, and also enlightening us so that we have the right
    kind of balanced perspective, and working with you, Mr.
    Chairman, on your interest--your very keen interest--on this
    issue.
        I have lived this issue for now almost 2 decades, being on
    the Homeland Security Committee for that long period of time,
    and I can attest to the fact, visiting the border, of the
    astuteness of local law enforcement and their attention to
    securing their community, but they need our help. I do want to
    thank law enforcement representatives who are there, and
    certainly I want to speak directly to Mr. Alvarez and offer, as
    I have done in the past, my sympathy for any fallen officer,
    and certainly for the loss that we experienced in the wounded
    officer in Mexico.
        Let me just quickly ask--and I would like to move as
    quickly as we could to that classified briefing on drug cartels
    because I know there are a lot of answers that can come out of
    it.
        Mr. Alvarez, would you go back to a management question and
    tell me what further cuts in your budget--ICE budget--would
    generate? Quickly could you comment on--first of all,
    congratulations for finding two tunnels by your officers--what
    kind of technology is needed or what you use and whether or not
    a $350 million, $400 million cut to the Homeland Security's
    security budget might impact the services that you provide and
    the men and women that serve in the ICE organization?
        Mr. Alvarez. Obviously it would have some sort of impact,
    but I will tell you, for the department and specifically for
    ICE, Mexico is a big priority. We are focusing a lot of our
    resources. We are doubling our presence in Mexico----
        Ms. Jackson Lee. So if you had a cut in the dollars that
    you have received in that effort would that impact the effort
    that you are trying to push in Mexico?
        Mr. Alvarez. I would imagine it would have some impact--
    yes, definitely would have some impact. But the Southwest
    border supplemental that we received we were able to hire and
    bring on 250 new agents that we deployed to the Southwest
    border.
        Again, 25 percent of our workforce, of our agents, are
    physically located at the Southwest border. So it is a priority
    for us to work in conjunction with our Mexican colleagues.
        Ms. Jackson Lee. Any budget cuts that would impact that
    effort would have an impact on the work that you are trying to
    do.
        Mr. Alvarez. Yes, possibly.
        Ms. Jackson Lee. Let me, Mr. Nichols, raise some questions
    with you on the idea of how do we attack this whole question of
    drug cartel. I am told that the Drug Kingpin Act has a number
    of provisions in it that put a lot of restraint or, if you
    will, list a lot of elements of these cartels that allow for an
    effort to be waged against them.
        I think we want to make the strong clarification that the
    people on the border, both on the Mexican side and otherwise,
    there are innocent victims that are involved, and that what we
    want to go after--and I see them because many of them are
    housed in my detention center in the heart of my Congressional
    district, so I know about the bad guys or the drug cartels.
        But I would be interested in whether you thought the
    Kingpin Act really gives you the sufficient cover--gives law
    enforcement agencies the authority they need to go after the
    Mexican DTOs. Are the penalties under the Kingpin Act rule out
    the need to try to make DTOs fit into the foreign terrorist
    organization category, meaning can you work with the Kingpin
    Act and get where you need to be on these drug cartels?
        Mr. Nichols. Yes. The Kingpin Act has been very effective
    for us and has been a great vehicle for going after drug
    trafficking organizations around the world, particularly in
    Mexico. It allows us to designate organizations and individuals
    for freezing their assets, seizing their assets, prioritizing
    prosecutions, and it enjoys the full support and cooperation of
    the Mexican government.
        Ms. Jackson Lee. If you were to make them terrorist
    organizations under the foreign terrorist legislation would it
    preclude you from sort of helping those individuals that have
    been duped--teenagers, others who have received certain
    distinctive aid to get them out, et cetera?
        Mr. Nichols. Certainly terrorist designations carry with it
    different standards and procedures which would have to be
    handled much more intensively, and it would make it very
    difficult in the circumstances that you cite. But obviously the
    goal is not to miscast or misdesignate any individual under
    those types of provisions.
        Ms. Jackson Lee. Mr. Alvarez, could you just--I will admit
    that we believe that Houston, where I come from, has an
    unfortunate history of gun running, and that certainly doesn't
    help the work that you are trying to do. Let me know what an
    impact gun running and gun trafficking coming from the United
    States into Mexico has had on your work or either the
    enhancement of drug cartels.
        Mr. Alvarez. Well, I would defer any questions on arms
    trafficking, obviously, to the appropriate agency, which would
    be the Bureau of Alcohol, Tobacco, and Firearms. I think they
    would be more suited to handle those questions.
        But I will tell you, you know, our experience, especially
    on the border, especially--again, I go back to the BEST teams
    that we have set up along the Southwest border--their focus is
    on the arms smuggling, you know, going after the organizations
    that are working on both sides of the border, that are taking
    the arms across the border.
        They are focused on the money--the money that they are
    moving to continue their criminal activity. They are our
    essential tool that focus on these organizations as they
    operate in the United States.
        Ms. Jackson Lee. Mr. Chairman, you have been kind with your
    time. I would just like to be on the record to say that I think
    any classified briefing has to focus on the extensive gun
    running that travels south of the border, and unfortunately
    some of our cities are impacted more so than others.
        I believe it will be important to inform all of our
    Members, including the Ranking Member, all of you who have
    served as U.S. attorneys, those of us who have served as
    judges, who have seen some of these activities at lower levels,
    depending on the jurisdictional court that we have, realize
    that these are the tools of violence. I believe it is very
    important that we get to the bottom of it.
        If I could, I would like to welcome Mr. Keating as the
    Ranking Member, and it is a pleasure to be given the courtesy
    of sitting on the committee.
        Thank you all very much. I yield back.
        Mr. McCaul. Thank you. I look forward to working with you
    on that briefing as well.
        We had a statement--written testimony--from Assistant
    Director Thomas Harrigan of the DEA. I ask for unanimous
    consent that it be entered into the record. Without objection,
    so ordered.
        [The information follows:]
                        Statement of Thomas M. Harrigan
                                 March 31, 2011
                                  introduction
        Drug trafficking and abuse exacts a significant toll on the
    American public. More than 31,000 Americans--or approximately ten times
    the number of people killed by terrorists on September 11, 2001, die
    each year as a direct result of drug abuse. Approximately 7 million
    people who are classified as dependent on, or addicted to, controlled
    substances squander their productive potential. Many of these addicts
    neglect or even abuse their children and/or commit a variety of crimes
    under the influence of, or in an attempt to obtain, illicit drugs. Tens
    of millions more suffer from this supposedly ``victimless'' crime, as
    law-abiding citizens are forced to share the roads with drivers under
    the influence of drugs, pay to clean up toxic waste from clandestine
    laboratories, rehabilitate addicts, and put together the pieces of
    shattered lives. In truth, in order to calculate an actual cost of this
    threat, we must explore and examine the impact produced by
    transnational drug crime in corrupting government institutions,
    undermining public confidence in the rule of law, fostering violence,
    fueling regional instability, and funding terrorism.
        Drug trafficking is a global enterprise that, according to the U.N.
    Office on Drugs and Crime, generates approximately $394 billion per
    year. This figure dwarfs the proceeds from other forms of organized
    criminal activity and provides a revenue stream for insurgents,
    terrorists, and other nefarious activity. In order to put this sum into
    perspective, the proceeds of the global drug trade exceed the gross
    domestic product of many nations and provide ample motivation to those
    who would peddle poison for profit. Some argue that legalization and
    regulation--even at the cost of untold human suffering and misery--
    would at least strip the traffickers of these enormous profits. But
    both common sense and history have taught that those who are displaced
    from the drug trade do not move into corporate life; they migrate into
    other types of criminal conduct.
        Those who organize, finance, direct, and control this criminal
    enterprise thrive in areas where government control is weak. While the
    drug trade fuels corruption and instability in America, as well as in
    foreign countries, it is no coincidence that the so-called ``kingpins''
    who run this global enterprise do not reside in the United States,
    where they would be most vulnerable to a more highly effective criminal
    justice system. Rather, they operate from locations which they perceive
    to be safe havens, and from there direct the activity of subordinates
    and surrogates who supply drugs to the U.S. market. This model is
    intended to not only frustrate attempts to successfully prosecute these
    criminals, but also to maximize the autonomy of their organizations in
    the countries where they are headquartered.
        Perhaps the clearest example of the relationship between drug
    trafficking and National security can be found just south of our
    border. A stable and secure Mexico is in the best interest of both the
    United States and Mexico, but the violent actions and corrupting
    influence of drug trafficking organizations (DTOs) threatens that
    stability and security. Since President Calderon took office in
    December 2006 and set out to bring these cartels to justice, his
    government has deployed more than 45,000 military troops to assist
    police in combating cartel influence and related violence. Since the
    counteroffensive, there have been approximately 34,000 drug-related
    murders in Mexico in the last 5 years. More troubling is the fact that
    many of these brutal murders were committed with the specific intent of
    intimidating the public and influencing the government to suspend its
    action against the cartels. Fortunately, the Calderon administration
    has been resolute and steadfast in its commitment to break the power
    and influence of these criminals.
        The Calderon administration has also aggressively investigated
    allegations of corruption within its own government, arresting hundreds
    of officials for accepting bribes from the cartels. For instance, the
    former Deputy Attorney General responsible for prosecuting traffickers
    was allegedly protecting them for a fee of $450,000 a month. The
    problems uncovered in Mexico during the past few years reflect
    increasing threats to the rule of law and regional stability. The
    concept of ``plata o plomo,'' either accept ``money or lead''
    (bullets), is well documented in Mexican drug trafficking culture and
    refers to the choice public and police officials must make when first
    confronted by this powerful criminal element. The confluence of brutal
    violence and corruption makes it difficult to enforce drug laws and
    undermines public confidence in the government. Left unchecked, the
    power and impunity of these DTOs could grow to become an even greater
    threat to the national security of Mexico. With the consent of the
    Mexican government, DEA has had agents assigned in Mexico since our
    inception in 1973, which is one of the main reasons why our partnership
    with Mexico is so robust. We share the responsibility for challenging
    the threat of these DTOs, and our ability to successfully contend with
    the threat is vital to both nations.
                        cooperative efforts with mexico
        The United States and Mexico are committed to cooperative action to
    reduce the drug threat from which both nations suffer. Drugs are
    produced and consumed in Mexico, and are also transited through Mexico
    as a result of its strategic location between South America and the
    United States. The Government of Mexico is confronting the entrenched,
    cross-border smuggling operations and the diversified, poly-drug,
    profit-minded DTOs within that country. On the U.S. side of the border,
    the desire for illicit drugs prompts the movement of billions of U.S.
    dollars and an unknown number of weapons into Mexico annually. Many of
    the smuggled weapons are used against the Mexican security forces. The
    single objective of those who ply the drug trade is profit. The
    National Drug Intelligence Center (NDIC) estimates that Mexican and
    Colombian DTOs generate, remove, and launder as much as $39 billion in
    wholesale drug proceeds annually. For these reasons, the U.S. and
    Mexican governments share the responsibility to defeat the threat of
    drug trafficking.
        The drug trade in Mexico has been rife with violence for decades.
    Without minimizing the severity of the problems we are confronted with
    today, it is nonetheless critical to understand the background of the
    ``culture of violence'' associated with Mexican DTOs and the cyclical
    nature of the ``violence epidemics'' with which Mexico is periodically
    beset. Though no previous ``epidemic'' has exacted as grisly a toll as
    the violence seen in years, we do not have to go back very far in
    history to recall the cross-border killing spree conducted by Gulf
    Cartel Zeta operatives in the Laredo-Nuevo Laredo area during 2004-
    2005. However, one thing must remain clear in any discussion of
    violence in Mexico, DTOs are inherently violent, and nowhere is this
    truer than in Mexico, where Wild West-style shootouts between drug
    traffickers against their rivals and law enforcement are far too
    common. In fact, according to open source reporting and the PGR, over
    90 percent of the homicides in the past few years have been of drug
    cartel members or associates vying for market shares and trafficking
    routes.
        The United States engages in cooperative efforts with our Mexican
    law enforcement partners to provide information, training, and
    equipment that will allow Mexican authorities to apprehend, prosecute,
    and convict these dangerous criminals. The Calderon administration is
    taking the fight directly to the cartels. The quantifiable impact of
    huge drug, weapons, and money seizures presents part of the picture.
    Equally important, although difficult to measure, is the enormous
    psychological impact of high-level arrests and the record numbers of
    extraditions that have occurred in the last few years. No other action
    by the Government of Mexico strikes quite so deeply at cartel fears
    than an arrest and extradition. Only weeks after his inauguration,
    President Calderon began extraditing high-profile criminals to the
    United States. On January 19, 2007, President Calderon took the
    politically courageous step of extraditing 15 individuals to stand
    trial in the United States, including notorious Gulf Cartel leader and
    Consolidated Priority Organizational Target (CPOT) Osiel Cardenas-
    Guillen.
        Since then, the Government of Mexico has extradited 384 criminals
    to the United States, including a group of 10 in December 2008 and 25
    during December 2010. These individuals were associated with some of
    the most notorious Mexican DTOs, such as the Gulf, Arellano Felix, and
    Sinaloa Cartels. Also, on February 25, 2009, Miguel Angel Caro-
    Quintero, who assumed control of the family organization after the
    arrest of his brother Rafael Caro-Quintero (who was complicit in the
    kidnapping, torture, and murder of DEA Special Agent Enrique Camarena)
    was extradited.
        During the past few years, the Government of Mexico has achieved
    unprecedented success in apprehending or eliminating high value targets
    (HVT) based in the country of Mexico. For example:
       In March of 2009, Sinaloa Cartel leader and DEA fugitive
            Vicente Zambada-Niebla (son of Ismael Zambada-Garcia) was
            located and arrested in Mexico City. On February 19, 2010,
            Zambada-Niebla was extradited to the United States.
       In October of 2009, Sinaloa Cartel leader and DEA fugitive,
            CPOT Oscar Nava Valencia aka ``El Lobo'' was apprehended and
            arrested near Guadalajara, Mexico. Nava Valencia was extradited
            to the United States on January 27, 2011 to face drug
            trafficking offenses in the U.S. District Court for the
            Southern District of Texas. In December 2009, the ``Boss of
            bosses'' CPOT Arturo Beltran-Leyva, a.k.a. ``Barbas'', was
            located and killed in Cuernavaca, Mexico after a 2-hour gun
            battle with Government of Mexico forces. Beltran-Leyva was
            considered one of the most powerful drug lords in Mexico at the
            time.
       On January 12, 2010, working in cooperation with Mexican
            counterparts, DEA and U.S. Marshals Service personnel
            identified the residence of one of Mexico's most wanted
            fugitives and co-leader of the Arellano Felix cartel, Teodoro
            Garcia Simental, a.k.a. ``El Teo'', who was responsible for the
            majority of the homicides, kidnappings, and tortures in
            Tijuana. The Secretaria de Seguridad Publica (SSP) Sensitive
            Investigative Unit (SIU), with support from the Grupo de
            Operaciones Especiales (Mexican Army Special Operations Group,
            GOPES), initiated the search and arrest of ``El Teo'' at the
            target location and he was arrested without incident.
       On March 13, 2010, Barrio Azteca (BA) members executed
            Lesley Enriquez, a U.S. Consulate employee; Arthur Haycock
            Redelfs, husband of Lesley Enriquez and Detention Officer of
            the El Paso County Sheriff's Office; and Alberto Salcido
            Ceniceros, husband of U.S. Consulate employee Hilda Antillon in
            Cd. Juarez, Mexico. After a lengthy and exhaustive
            investigation, on March 2, 2011, United States Department of
            Justice Trial Attorneys obtained criminal indictments 35 BA
            Gang members from Ciudad Juarez, west Texas and southern New
            Mexico. On March 9, 2011, the El Paso Field Division with its
            law enforcement partners (22 State/local/Federal law
            enforcement agencies) executed an operation on the BA criminal
            organization in west Texas and southern New Mexico. Of the 35
            subjects indicted, 28 are in custody in the United States and
            Mexico. On April 21, 2010, the Mexican Military (Secretaria de
            la Defensa Nacional or SEDENA) arrested CPOT Jose Gerardo
            Alvarez-Vasquez, a.k.a. ``El Indio'' in Mexico City, Mexico.
            Alvarez-Vasquez has been operating since the late 1980s and has
            continued to assert himself among other Mexican cartel leaders,
            and has been responsible for the distribution of multi-ton
            cocaine shipments, methamphetamine precursor chemicals, and the
            production and distribution of methamphetamine.
       On July 24, 2010, SSP arrested Luis Carlos Vazquez-Barragan,
            aka ``El 20'', a key lieutenant for CPOT Vicente Carrillo
            Fuentes, who is the leader of the Juarez Cartel in Chihuahua,
            Mexico. Vazquez-Barragan is a DEA Albuquerque District Office
            fugitive and Regional Priority Organization Target (RPOT), who
            was indicted for Marijuana Possession on March 30, 2005. DEA
            discovered that Vazquez-Barragan was believed to be the person
            who gave the order for the detonation of a car bomb in Ciudad
            Juarez on July 15, 2010, an event that killed three persons,
            one of them an SSP officer, a doctor who responded to the site
            of the blast, and an unidentified mechanic.
       On July 29, 2010, CPOT Ignacio Coronel-Villareal, a.k.a.
            ``Nacho'', was killed when Mexican soldiers raided a house in a
            wealthy suburb of Guadalajara, Mexico during an operation
            conducted in an attempt to capture him. He was one of the four
            principal leaders of the Sinaloa Cartel/Federation, a
            cooperating group of drug traffickers that occasionally share
            resources such as transportation routes and money launderers.
       Since early June of 2010, intelligence was shared with SSP/
            SIU regarding Edgar Valdez-Villareal, a.k.a. ``La Barbie.''
            After numerous attempts to apprehend him, SSP mounted an
            operation in the Santa Fe area of Mexico City on August 30,
            2010 which resulted in his arrest. Valdez-Villarreal was CPOT
            Arturo Beltran-Leyva's Lieutenant until Beltran-Leyva's demise,
            after which Valdez-Villarreal split and formed his own DTO,
            resulting in escalated violence in Mexico.
       On September 12, 2010, Mexican Navy (SEMAR) personnel
            responded to information provided by DEA related to the
            location of Sergio Barragan-Villareal, a.k.a. ``El Grande'',
            and arrested him and two other associates. Barragan-Villareal
            had been in a fight for control of the Beltran-Leyva DTO
            against Valdez-Villareal.
       On November 23, 2010, the SSP/SIU responded to intelligence
            regarding Carlos Montemayor-Gonzalez's whereabouts just outside
            of Mexico City. That afternoon, he was located and apprehended.
            Montemayor-Gonzalez is the father-in-law of ``La Barbie'', and
            had taken over leadership of the DTO after ``La Barbie's''
            arrest on August 30, 2010.
       On November 4, 2010, the Government of Mexico Secretaria de
            Seguridad Publica (SSP) Sensitive Investigation Unit (SIU)
            arrested CPOT Harold Mauricio Poveda-Ortega in Mexico City,
            Mexico. Poveda-Ortega was the primary source of supply for the
            Beltran-Leyva DTO. The Poveda-Ortega DTO was responsible for
            coordinating the distribution of approximately 20,000 kilograms
            of cocaine per month to several Mexican DTOs.
       On November 5, 2010, SEMAR, in conjunction with the DEA
            Matamoros Resident Office (RO), McAllen District Office (DO),
            Brownsville RO, SEDENA, and SSP, mounted an operation against
            the Gulf Cartel in Matamoros, Tamaulipas, Mexico, which
            resulted in the death of CPOT Antonio Ezequiel Cardenas-
            Guillen, a.k.a. ``Tony Tormenta''. Additionally, Sergio
            Fuentes, a.k.a. ``Tyson'', the Gulf Cartel Plaza boss in Valle
            Hermoso, Tamaulipas, and three other members were also mortally
            wounded during the operation.
       On December 3, 2010, SSP/SIU received intelligence regarding
            the known whereabouts of Antonio Arcos-Martinez in Morelia. As
            the result of investigative follow-up by SSP/SIU, Arcos was
            located and apprehended. Arcos was one of the founders of La
            Familia cartel.
       In another blow to La Familia, on December 8, 2010, the SSP/
            SIU and GOPES, in conjunction with the DEA Mexico City Country
            Office (CO), mounted an operation against La Familia in
            Holanda, Michoacan, Mexico, which resulted in the death of CPOT
            Nazario Moreno-Gonzalez, a.k.a. ``Chayo''. Moreno-Gonzalez was
            one of two principal leaders of the La Familia Cartel, and he
            was widely considered the intellectual and spiritual leader of
            the organization.
        All these high-impact actions--seizures, arrests, and
    extraditions--serve to make one important point: Desparate/frustrated
    drug traffickers often resort to increased levels of violence.
    Vulnerable drug traffickers operating under unprecedented stress are
    exceptionally more violent which is why the homicide rates in Mexico
    have risen so dramatically over the last couple of years.
       cooperative efforts with other federal, state, and local agencies
        DEA continuously works with Federal, State, and local law
    enforcement counterparts in the United States through joint
    investigations and the sharing of intelligence. DEA routinely collects
    and shares intelligence pertaining to violent DTOs and armed groups
    operating in and around ``hot spots'' along the Southwest Border (SWB).
    As of December 31, 2010, with the passage of the SWB emergency
    supplemental, DEA now has 29% of its domestic agent positions allocated
    to its Southwest Border field divisions increasing total DEA Special
    Agent workforce in the region from 1496 to 1546. Additionally, DEA has
    the largest U.S. law enforcement presence in Mexico with offices in
    Mexico City, Tijuana, Hermosillo, Nogales, Ciudad Juarez, Mazatlan,
    Guadalajara, Monterrey, Matamoros, Nuevo Laredo, and Merida, with 60
    Special Agent positions. FBI Resolution Six (R-6) Agents, co-located
    with DEA Agents, coordinate drug and gang investigations conducted in
    Mexico. They are also responsible for supporting domestic cases for
    U.S. prosecution, cultivating liaison contacts within Mexico, and
    supporting bilateral criminal enterprise initiatives. Working closely
    with counterparts assigned to the Mexican Embassy, Legal Attaches, the
    El Paso Intelligence Center (EPIC), and the Southwest Intelligence
    Group, as well as with our Federal partners in the U.S. Department of
    Homeland Security (DHS), and components within the Department of
    Justice (DOJ), i.e. the Bureau of Alcohol, Tobacco, Firearms, and
    Explosives (ATF) and the United States Marshals Service (USMS), we
    leverage all available resources and expertise. Close coordination with
    impacted State and local law enforcement and Mexican counterparts allow
    real-time access to intelligence and information that facilitated more
    than 800 convictions related to Mexican DTOs in 2009 alone.
        As the lead U.S. law enforcement agency responsible for enforcing
    the drug laws of the United States, DEA has been at the forefront of
    U.S. efforts to work with foreign law enforcement counterparts in
    confronting the organizations that profit from the global drug trade.
    DEA's success is due, at least in part, to its single-mission focus.
    DEA is well-positioned to mount a sustained attack on the command and
    control elements of DTOs; however, DEA does not operate in a vacuum.
    Rather, DEA and FBI, in conjunction with other Department of Justice
    (DOJ) components, DHS, the Department of Defense (DOD), the
    intelligence community, and other Federal, State, local, and foreign
    counterparts plan coordinated attacks against all levels of the drug
    trade with the aim of disrupting and dismantling the command and
    control elements of these organizations.
        The following are several noteworthy interagency efforts being
    coordinated along the SWB:
       On June 5, 2010 in Albuquerque, New Mexico, Attorney General
            (AG) Holder, DHS Secretary Napolitano, and Office of National
            Drug Control Policy (ONDCP) Director Kerlikowske released
            President Obama's National Southwest Border (SWB)
            Counternarcotics Strategy, which is designed to provide a road
            map for the Federal drug control program agencies to follow to
            stem the flow of illegal drugs and their illicit proceeds
            across the SWB and to reduce associated crime and violence in
            the region.
       The SWB Initiative is a multi-agency, Federal law
            enforcement operation that attacks Mexico-based DTOs operating
            along the SWB by targeting the communications systems of their
            command-and-control centers. The SWB Initiative has been in
            operation since 1994. As part of a cooperative effort, DEA,
            FBI, CBP, Immigration and Customs Enforcement (ICE), and U.S.
            Attorneys' Offices around the country conduct judicially
            approved electronic wire intercepts that ultimately identify
            all levels of DTOs. This strategy allows the tracking of drugs
            as they flow from source countries to the streets of the United
            States.
       The Southwest Border Intelligence Collection Plan (SWBICP)
            was initiated by DEA in October 2009 to coordinate a regional
            intelligence collection framework housed at EPIC to support
            enforcement operations on the SWB of the United States. The
            SWBICP provides operational, tactical, strategic, and policy-
            level intelligence used to support investigations, regional
            planning, and resource decision-making. Intelligence gathered
            under the guidance of the SWBICP is shared with the
            intelligence community, and other Federal, State, and local law
            enforcement agencies. The SWBICP also provides a mechanism to
            collect information needed to assess counterdrug measures and
            security threats along the U.S.-Mexico border.
       The Concealment Trap Initiative (CTI) targets those vital
            service providers who build concealed trap compartments or use
            natural voids in vehicles or other conveyances and residences
            for DTOs to conceal bulk cash or other contraband. Drug
            traffickers recognize that ``bulk'' currency is subject to
            seizure and easily forfeited when discovered by law enforcement
            authorities. To counter this, drug traffickers employ a myriad
            of techniques, including the use of concealment traps, to
            impede and frustrate law enforcement's efforts to discover and
            seize illicit drug proceeds. The CTI addresses the challenge of
            helping law enforcement officers and agents keep up with the
            technology behind these traps, including training them to
            identify and locate the traps, and establish probable cause
            toward obtaining a search warrant or consent to search the
            vehicle or residence in which the trap is located. Through the
            CTI program in 2010, DEA seized just under $39 million, in
            addition to drugs and weapons.
       Bulk Cash Seizures represent the cash proceeds obtained from
            the illegal trafficking of drugs, weapons, and persons, and are
            targeted by DEA, FBI, ATF, ICE, and other Federal, State, and
            local law enforcement partners for use in obtaining valuable
            investigative leads and intelligence data. Going forward,
            information regarding bulk cash seizures will be simultaneously
            shared between ICE's Bulk Cash Smuggling Center (BCSC) in
            Vermont and the National Seizure System (NSS) at EPIC. EPIC-NSS
            functions as, among other things, a repository for detailed
            bulk currency seizure information from both domestic and
            foreign law enforcement agencies. NSS analyzes volumes of bulk
            currency seizure data and develops investigative lead reports
            and responds to requests for bulk currency seizure data from
            agents and officers in the field. EPIC provides a broad
            spectrum of interagency information and intelligence systems
            which are capable of immediately assessing the information and
            assisting law enforcement agencies in obtaining probable cause
            for search warrants, linking cases together, and following up
            on existing cases.
       Organized Crime Drug Enforcement Task Forces (OCDETF)
            Program.--The OCDETF Program was initiated in 1982 to combine
            Federal, State, and local law enforcement efforts into a
            comprehensive attack against organized crime and drug
            traffickers. DEA and FBI are active components of the OCDETF
            Program, including OCDETF's nine Co-Located Strike Forces.
            OCDETF Co-Located Strike Forces combine the efforts of multiple
            Federal law enforcement agencies with State and local law
            enforcement to target the largest drug trafficking
            organizations that threaten the United States. These Co-Located
            Strike Forces often collaborate with the Southwest Border High
            Intensity Drug Trafficking Area (HIDTA) regional task forces in
            Arizona, California, New Mexico, and West and South Texas.
            Southwest Border HIDTA Task Forces represent Federal, State,
            and local partnerships that target Mexican drug cartels and
            their smuggling and transportation networks, which spawn cartel
            violence along the border. The OCDETF Co-Located Strike Forces
            and HIDTA Task Forces have had enormous success in dismantling
            major Mexican DTOs linked to Mexico-based cartels.
       The OCDETF Fusion Center (OFC), a multi-agency law
            enforcement intelligence center that is currently led by a DEA
            Special Agent, provides investigative and operational
            intelligence support to on-going drug-related investigations
            through the development of organizational target profiles and
            the development of specific investigative leads. These leads
            and intelligence products are disseminated to the appropriate
            field elements of the Federal agencies through the multi-
            agency, DEA-led Special Operations Division (SOD). Intelligence
            and leads relating to other criminal activities, including
            terrorism, are disseminated through SOD to the appropriate
            agencies.
       SOD is an operational coordination center with the mission
            of establishing seamless law enforcement strategies and multi-
            agency operations aimed at dismantling national and
            international trafficking organizations by attacking their
            command and control communications. SOD is able to facilitate
            coordination and communication among law enforcement entities
            with overlapping investigations, ensure tactical and
            operational intelligence is shared, and that enforcement
            operations and investigations are fully coordinated among and
            between law enforcement agencies.
       DEA is a member of the DHS Border Enforcement Security Task
            Force (BEST), an ICE-led initiative designed to increase the
            flow of information between participating agencies regarding
            transnational criminal organizations (TCOs) and violent gangs
            operating along our shared borders. In particular, BESTs target
            the underlying sources of cross-border violence along the SWB,
            such as weapons smuggling, narcotics, and human smuggling, and
            bulk cash smuggling. BESTs commenced operation in Laredo, TX,
            in July 2005, and DEA's participation in the Laredo BEST began
            on May 3, 2006. BESTs incorporate personnel from ICE, CBP,
            USSS, DEA, ATF, FBI, U.S. Coast Guard, and the U.S. Attorney's
            Office, along with other key Federal, State, local, and foreign
            law enforcement agencies, including the Mexican law enforcement
            agency SSP.
       The DEA's Drug Flow Attack Strategy (DFAS) is an innovative,
            multi-agency strategy, designed to significantly disrupt the
            flow of drugs, money, and chemicals between source zones and
            the United States by attacking vulnerabilities in the supply
            chains, transportation systems, and financial infrastructure of
            major DTOs. DFAS calls for aggressive, well-planned, and
            coordinated enforcement operations in cooperation with host-
            nation counterparts in global source and transit zones.
            Operation All-Inclusive (OAI) is the primary DFAS enforcement
            component in the source and transit zones. Iterations of OAI
            have been staged annually since 2005. A crucial partner in
            DEA's Drug Flow Attack Strategy is the Joint Interagency Task
            Force South (JIATFS). JIATFS provides operational and
            intelligence fusion support to DEA by coordinating the use of
            Department of Defense, Department of Homeland Security, and
            partner nation air and maritime assets in joint operations.
            These 9 operations are designed to stem the drug flow from the
            source zone, specifically South America, to the transit zones,
            which includes Central America and the Caribbean. These joint
            DEA and JIATFS operations are vital not only in assisting our
            Central and South American partners, but are designed to
            significantly reduce drug flow into the United States and to
            other non-U.S. markets such as Africa and Europe. Given the
            volume of cocaine moving through the transit zone, DEA remains
            committed to a focused, multiagency strategy, working with
            JIATFS, U.S. Southern Command and our partner nations to not
            only interdict the drug loads, but to identify, disrupt, and
            dismantle the transnational criminal organizations trafficking
            their illicit drugs throughout the globe. The 2010 SWB
            supplemental provided an additional $5.3 million to expand DFAS
            to enhance its focus on the SWB region.
       Operation Doble Via (ODV), the domestic component of OAI,
            was conducted between April and September 2007 to disrupt the
            flow of drugs, chemicals, and money across the SWB. ODV took
            place on both sides of the border and the main participants
            were DEA, CBP, Texas DPS, and several Mexican agencies,
            including the Federal Investigative Agency (AFI), Federal
            Preventive Police (PFP), Mexican military, and the Deputy
            Attorney General's Office of Special Investigations on
            Organized Crime (SIEDO). Operation Doble Via II, which
            commenced in August 2010 and concluded November 30, 2010,
            focused on the Arizona-Mexico border. Through the collection of
            law enforcement intelligence information and the development of
            investigations specifically targeting the Arizona border
            region, ODV-II sought to dismantle DTOs and other armed groups
            responsible for the violence in Sonora, Mexico, and the
            movement of drugs, weapons, and money across the border with
            Arizona. Operation ODV-II resulted in the seizure of 71.8
            metric tons of marijuana, 125 kilograms of methamphetamines,
            327 kilograms of cocaine, 78 kilograms of heroin, $9,269,509,
            and produced 202 arrests.
       EPIC is a National tactical intelligence center that focuses
            its efforts on supporting law enforcement efforts in the
            Western Hemisphere, with a significant emphasis on the SWB.
            Through its 24-hour watch function, EPIC provides immediate
            access to participating agencies' databases to law enforcement
            agents, investigators, and analysts. This function is critical
            to the dissemination of relevant information in support of
            tactical and investigative activities, deconfliction, and
            officer safety. EPIC also provides significant, direct tactical
            intelligence support to State and local law enforcement
            agencies, especially in the areas of clandestine laboratory
            investigations and highway interdiction.
       EPIC's Gatekeeper Project is a comprehensive, multi-source
            assessment of trafficking organizations involved in and
            controlling the movement of illegal contraband through ``entry
            corridors'' along the SWB. The analysis of Gatekeeper
            organizations not only provides a better understanding of
            command and control, organizational structure and methods of
            operation, but also serves as a guide for policymakers to
            initiate and prioritize operations by U.S. anti-drug elements.
            Numerous ``Gatekeepers'' have direct links to Priority Target
            Organizations (PTOs) and/or CPOTs.
       Implementation of License Plate Readers (LPR) along the SWB
            by DOJ and DHS has provided a surveillance method that uses
            optical character recognition on images that read vehicle
            license plates. The purpose of the LPR Initiative is to combine
            existing DEA and other law enforcement database capabilities
            with new technology to identify and interdict conveyances being
            utilized to transport bulk cash, drugs, weapons, as well as
            other illegal contraband. Almost 100 percent of the effort and
            cost associated with monitoring southbound traffic is directed
            at the identification, seizure, and forfeiture of bulk cash and
            weapons, while the effort and cost of monitoring northbound
            traffic is both enforcement- and forfeiture-related, in that
            suspect conveyances can be identified for later southbound
            monitoring. DEA components have the ability to query and input
            alerts on license plates via an existing DEA database, and
            other law enforcement agencies can do the same via EPIC. DEA
            and CBP are currently working together in order to merge
            existing CBP LPRs at the points of entry with DEA's LPR
            Initiative. In addition, the fiscal year 2010 SWB supplemental
            provided $1.5 million to expand the LPR initiative by
            purchasing additional devices and barrels and support
            maintenance to allow DEA to monitor traffic and provide
            intelligence on bulk currency transiting toward Mexico.
       The SIU Program is the foundation for building an effective
            and trustworthy unit capable of conducting complex
            investigations targeting major Mexican DTO's. The program
            provides DEA with a controlled and focused investigative force
            multiplier that allows DEA access to a global transnational
            enforcement and intelligence network which directly supports
            DEAs Drug Flow Attack Strategy (DFAS). The additional programs
            funded by the Merida Initiative facilitate anti-corruption and
            police professionalization efforts in a broader context, which
            will serve the public interest. The fiscal year 2010 SWB
            supplemental provided an additional $2 million for the SIU
            program.
                                   conclusion
        The daily challenges posed by DTOs in the United States and Mexico
    are significant, but are overshadowed of late by a very specific set of
    challenges, such as ensuring that the rampant violence in Mexico does
    not spill over our border; closely monitoring the security situation in
    Mexico; and, perhaps most importantly, lending our assistance and
    support to the Calderon administration to ensure its continued success
    against the ruthless and powerful cartels. The Government of Mexico has
    realized enormous gains in re-establishing the rule of law in Mexico,
    and in breaking the power and impunity of the DTOs which threaten the
    national security of both Mexico the United States.
        The Calderon administration's gains are contributing to an
    unparalleled positive impact on the U.S. drug market as well. From
    January 2007 through September 2010 the price per gram of cocaine
    increased 68.8 percent from $97.71 to $164.91, while the average purity
    decreased by 30 percent. These statistics paint a clear picture of
    restricted cocaine flow into the United States and decreased
    availability. While spikes--upward or downward--in price and purity
    have been observed in the past, these indicators typically normalize
    within a few months. Unlike in the past, we are now in the midst of a
    sustained, 3-year period of escalating and decreasing purity. Anecdotal
    evidence from around the country and closer to home here in the
    District of Columbia, including intercepted communications of the
    traffickers themselves, corroborates the fact that President Calderon's
    efforts have contributed to making it more difficult for traffickers to
    supply the U.S. market with illicit drugs.
        DEA recognizes that interagency and international collaboration and
    coordination is fundamental to our success. It is imperative that we
    sustain the positive momentum by supporting President Calderon's heroic
    efforts against organized crime. We must also manage expectations, as
    we anticipate that the gruesome violence in Mexico may continue to
    worsen before it gets better. We must recognize that we are witnessing
    acts of true desperation--the actions of wounded, vulnerable, and
    dangerous criminal organizations. We also remain committed to working
    with our U.S. law enforcement and intelligence partners to stem the
    flow of bulk cash and weapons south, while also working to sustain the
    disruption of drug transportation routes northward. Bringing to justice
    the organizations and principal members of organizations involved in
    the cultivation, manufacture, and distribution of controlled substances
    appearing in or destined for illicit trafficking in the United States
    remains the core of our focus.

        Mr. McCaul. Let me just thank all the witnesses here today
    for your testimony and your dedication and your service.
        With that, I dismiss this panel and we will move on to
    Panel Two. Thank you.
        If I could ask that the witnesses be seated, and we are
    going to begin the next panel. First of all, thank you for
    being here, and let me make my introductions.
        We are fortunate to have Mr. Jon Adler, who is the
    president of the Federal Law Enforcement Officers Association.
    Mr. Adler began his career in law enforcement in 1991 and has
    served as a Federal criminal investigator since 1994. He has
    been an active member since 1994.
        Dr. Shirk--David Shirk--is a professor at the University of
    San Diego--and where is Dr. Shirk? Okay, I guess nature called.
    I want to just briefly get through his bio. He is the author of
    the ``Drug Violence in Mexico: Data and Analysis Through
    2010.'' He has been quite an expert in this area.
        Professor John Bailey is a Georgetown University professor
    and author of ``Plan Colombia and the Merida Initiative: Policy
    Twins or Distant Cousins?'' Professor Bailey has taught at
    Georgetown University since 1970, and following study and field
    work in Peru and Colombia his research since the late 1970s
    focused largely on Mexico.
        Mr. Bailey, thank you so much for being here as well.
        From my hometown and home State of Austin, Texas we are
    very fortunate to have Dr. Ricardo Ainslie, who is a native of
    Mexico City, Mexico, and a U.S. citizen. He earned his Ph.D. in
    clinical psychology at the University of Michigan.
        He is a professor at UT Austin, and for almost 2 decades
    Dr. Ainslie has devoted himself to working in communities in
    Texas and Mexico that experience significant conflict and
    transformation exploring broader questions about how
    communities function and individuals and cultures and groups
    live together.
        So with that, I recognize Mr. Adler for 5 minutes.

      STATEMENT OF JON ADLER, PRESIDENT, FEDERAL LAW ENFORCEMENT
                          OFFICERS ASSOCIATION

        Mr. Adler. Thank you.
        Good morning, Chairman McCaul, Ranking Member Keating,
    distinguished Members of the committee. On behalf of the 26,000
    members of the Federal Law Enforcement Officers Association I
    thank you for the opportunity to appear before you today.
        I am here to represent the members of the Federal law
    enforcement community as well as the memory and the ultimate
    sacrifice of Special Agent Jaime Zapata as well as the heroic
    performance of Victor Avila.
        As evidenced by the hearing's title and the discussion
    early, yes, in Mexico there is a war. Make no mistake. There is
    clearly a war.
        That brings about, as a result of the brutal murder of
    Jaime Zapata and attack on Victor, it raises two important
    questions--questions that my members would really like answers
    to, first question being--and I know Director Alvarez did
    address this in part--in light of what happened--and this is a
    defining moment for us--what risk assessment was performed to
    accurately and realistically measure the risks that U.S. agents
    assigned to Mexico confront every day? Second, what steps has
    our State Department taken to negotiate the means to
    protection, the means for our agents there to better protect
    themselves against the violent threats they face?
        Those are two critical questions that we would like the
    answer to, and I appeal to the committee for your sustained
    support.
        Early March--March 3rd--President Obama met with President
    Calderon and afterwards came out and made some statements that
    had a very significant impact on the morale of my membership.
    In particular, he recognized that the laws of Mexico prohibit
    us from carrying there. Understood. We respect the law of
    Mexico and we don't attempt to change their laws.
        However, he went on to say that we don't perform law
    enforcement activities there and seemingly minimized the risk
    we face by describing their role--or our role--there as
    advisory. Gentlemen, that is a minimization of the risks that
    we face.
        We heard it from Director Alvarez. The threats are
    increasing. The risk is increasing.
        Jaime Zapata was not targeted for what he does. There is no
    need to debate the semantics of the specific activities they do
    there. Suffice to say, law enforcement activities entails more
    than simply putting handcuffs on a suspect.
        But to call them advisory--gentlemen, they were targeted
    and attacked for who they are--not for what they do, but for
    who they are as U.S. law enforcement officials. It is very
    important to understand that and not lose sight of that point.
        We are imminently concerned on the topic of protection, and
    I understand the subtlety and sensitivity of some of these
    points. But more so, directing these issues towards the State
    Department--and I condone Representative Gramm and his 33
    colleagues that addressed a letter to Secretary Clinton to ask
    the question, ``What are you doing by way of negotiation to
    exert this country's considerable leverage to ensure that our
    agents assigned there have the means to protect and defend
    themselves?'' We are waiting for an answer to that.
        But what we are concerned about also is, as a part of this
    protection package, it is not just defensive driving. That is
    important. Evasive maneuvers is definitely important.
        I am also concerned about diplomatic coverage. Are we
    sending agents there on temporary assignment with only partial
    diplomatic protection?
        Here is my point: My point is, they are no less at risk
    because they are only there temporarily. However, if one of my
    agents is attacked and killed, like Jaime Zapata, do we have
    the legal means to demand extradition and prosecute the killers
    for what they have done?
        I want to be absolutely sure that if my members endure and
    embrace the risks to go over to Mexico and fight this war that
    they will have full diplomatic coverage and the peace of mind
    knowing that God forbid they make the ultimate sacrifice, and
    their killers are caught--and I have every confidence we will
    catch them--that they will be brought back here, extradited,
    and prosecuted. That is what we are asking.
        You know, Chairman, I applaud you for characterizing these
    organizations as they should be: Narcoterrorists. It is an
    oversimplification to simply view these cartels as either a
    drug cartel or a human trafficking organization, gun
    trafficking, and even, obviously, with a terrorist angle.
        Here is the point: They obviously have demonstrated violent
    behavior. They have drawn upon Pablo Escobar's play book by way
    of their violent terrorist sort of tactics. We have to
    recognize that.
        There is both a profit motive as well as a political
    motive, and based on their behavior and their conduct we need
    to identify and characterize them for what they are. This is
    growing into another Afghanistan right on our border, and
    unfortunately, as much as I would like to say, ``Don't send my
    guys there if we can't protect them,'' we play a critical role
    there and we do need to be there.
        I can tell you, what Director Alvarez said is true. ICE is
    doing phenomenal work. So is the DEA and the FBI. They are
    critical to educating and working with our Mexican counterparts
    to ensure the proper components are there to sustain an
    integrated formidable approach to combat these narcoterrorist
    organizations.
        On behalf of my members I thank you all for the opportunity
    to appear here today. I welcome any and all questions.
        I will say one more thing in closing. Regarding all these
    statistics that were discussed in terms of the spillover--
    which, by the way, it is not a spillover; it is a charge-
    through and it goes beyond the border and filters into all of
    our cities--but I will say this: While the FBI stats may show
    that the overall statistics on violent crime may have gone
    down, violent crime committed against us, law enforcement
    officers, increased over 41 percent last year and is increasing
    beyond that this year with over 50 fatalities, 24 of which law
    enforcement officers were killed by gunfire.
        So I ask to keep that in the back of your mind when you
    consider statistics. Crime against law enforcement is on the
    rise, and it is my job, representing the FLEOA members, to
    ensure that we are doing everything we can to better protect
    our law enforcement officers.
        Thank you.
        [The statement of Mr. Adler follows:]
                        Prepared Statement of Jon Adler
                                 March 31, 2011
        Good Morning Chairman McCaul, Ranking Member Keating, and
    distinguished Members of the subcommittee. On behalf of the 26,000
    members of the Federal Law Enforcement Officers Association (FLEOA),
    thank you for the opportunity to appear before you today. My name is
    Jon Adler and I am the national president of F.L.E.O.A. I am proud to
    represent Federal law enforcement officers from over 65 different
    agencies. My testimony will represent the views of FLEOA members
    employed by the Department of Homeland Security, as well as those
    employed by agencies that play an active role in combating Mexico's
    drug trafficking organizations. I am dedicating my testimony today in
    honor of the memory of hero ICE Special Agent Jaime Zapata who was
    savagely murdered in Mexico on February 15, 2011.
        As evidenced by this hearing's title, there is a ``war'' being
    waged in Mexico against the drug cartels. So in considering how the
    United States can assist Mexico in this noble campaign, I believe we
    must first ask two very important questions. First, why was hero ICE
    Special Agent Zapata sent to Mexico in a law enforcement capacity
    unarmed, without any practical means of protecting himself? Second, in
    light of Agent Zapata's tragic death, why does our country continue to
    send unarmed Federal agents to a war zone? To properly answer these
    questions, there must be a thorough assessment of the risks which
    confront U.S. agents, the duties they perform, and the diplomatic
    protections, if any, they are afforded. This is particularly necessary
    in light of the President's fiscal year 2012 budget request which seeks
    to double--from 20 to 40--the number of ICE Agents assigned to Mexico.
        On March 3, 2011, after his meeting with Mexico President Calderon,
    President Obama stated, in effect, that Mexican law prohibits U.S.
    agents from carrying firearms in Mexico. He seemingly minimized the
    importance of this by adding that the role our agents perform in that
    country is strictly ``advisory'' in nature and that they do not perform
    law enforcement activities there. In terms of articulating a realistic
    risk assessment, his words failed.
        First, U.S. agents do perform law enforcement activities in Mexico,
    albeit unarmed. They are regularly tasked with conducting field
    interviews, responding to crime scenes, overseeing training,
    participating in investigations, and performing a variety of other law
    enforcement duties. Furthermore, published news accounts have made
    clear that the cartels have and continue to target U.S. agents for who
    they are and what they represent, and not for the specific activities
    they may perform. Minimizing their role as ``advisory'' does not
    eliminate the deadly risk U.S. agents' face in Mexico.
        In addition to a lack of authority to carry firearms, most of our
    agents in Mexico also suffer from a lack of proper diplomatic
    protection as well. If we send an unarmed agent to Mexico without full
    diplomatic status, and they are murdered like Jaime Zapata, how does
    our country demand extradition if the killers are caught? I appeal to
    this subcommittee to ask the State Department exactly how many of our
    agents in Mexico have full diplomatic protection? Furthermore, this
    subcommittee should inquire as to what steps the State Department has
    taken to exert their formidable leverage to secure gun carrying
    authority for all U.S. agents assigned to Mexico--as well as to other
    hostile countries. Until the State Department is able to negotiate the
    right for U.S. agents to carry firearms in Mexico to protect
    themselves, I respectfully ask for this subcommittee's support in
    asking all agencies to stop assigning unarmed agents to Mexico. By
    continuing this perilous practice, they dishonor the ultimate sacrifice
    made by hero Jaime Zapata.
        So can Mexico win this war without the support of U.S. agents? The
    answer is no. It is important to understand that the cartels, whether
    they engage in drug trafficking, gun trafficking, human trafficking, or
    terrorism, pose a serious threat to the United States. Cooperation with
    the Mexican government is in the interest of both countries, as is an
    integrated law enforcement approach to effectively target and defeat
    the cartels. And while we understand that the U.S. Government cannot
    dictate changes in Mexican law, it is the Government's responsibility
    to ensure that our agents can protect themselves while serving in
    hostile countries, irrespective of the length of their assignment. We
    don't ask our soldiers to go into combat unarmed, and we should not do
    the same to our Federal law enforcement agents.
        On September 11, 2001, I and many others served as first responders
    at Ground Zero. We responded without having the proper safety
    equipment, and accepted the risks. Since then, we have all learned the
    importance of preparedness and the value of having the proper safety
    equipment to effectively respond to critical incidents. So what lesson
    has our Government learned from Jaime Zapata's death? I respectfully
    ask that this subcommittee continue to seek answers from the State
    Department and the heads of our Federal law enforcement agencies, and
    to work to give our agents the ability to protect themselves when
    placed in harm's way. And of greater importance, please do not let the
    memory of our hero, Jaime Zapata, fade away.
        Thank you again for the opportunity to appear before the
    subcommittee today. I look forward to answering any questions you may
    have.

        Mr. McCaul. Thank you, Mr. Adler. Let me just say in follow
    up to that that I completely agree with you that that
    targeting, now, of U.S. law enforcement is a game changer, both
    in Mexico and in the United States.
        I also agree, we should not be putting our agents down into
    Mexico into a war zone without adequate protection and ability
    to defend themselves. So we have asked ICE, we have asked State
    Department to provide this committee with what those adequate
    protections are. There is a classified briefing that we
    attended; for those Members who have not attended, I would
    encourage you to do so on this issue as well.
        With that, I recognize Dr. Shirk.

    STATEMENT OF DAVID A. SHIRK, DIRECTOR, TRANS-BORDER INSTITUTE,
                        UNIVERSITY OF SAN DIEGO

        Mr. Shirk. Thank you, Chairman.
        On behalf of the Trans-Border Institute at the University
    of San Diego I would like to thank you, Mr. Chairman, and other
    Members of the subcommittee for the invitation to be here
    today. My written testimony summarizes the findings of a recent
    report I produced for the Council on Foreign Relations as well
    as over 10 years of close monitoring and analysis as part of
    the Justice in Mexico Project based at our university.
        We are here today because Mexico is in the midst of a
    worsening security crisis with severe implications for the
    United States. Since President Felipe Calderon took office in
    December 2006 more than 36,000 people have died in clashes and
    territorial disputes among powerful drug--organized crime
    groups--well more than double the number of drug-related
    killings since I last testified in Congress almost exactly 2
    years ago.
        Since then, dozens of Mexican elected officials, scores of
    reporters and innocent civilians, hundreds of military and
    police personnel, and thousands of organized crime members have
    been killed. In addition, dozens of U.S. citizens have been
    caught in the crossfire, including Agents Zapata and Avila, who
    have been mentioned here today.
        The drug trade in general benefits from a vast and
    profitable black market caused by the prohibition of drug
    consumption in the United States and elsewhere. According to
    official estimates, illegal drug production and trafficking in
    Mexico produces employment opportunities for an estimated
    450,000 people, and perhaps 3 to 4 percent of Mexico's more
    than $1 trillion gross national product.
        In these difficult economic times the illicit drug sector
    involves large numbers of young men aged 18 to 35 who have
    neither educational nor employment opportunities, commonly
    known in Mexico as ni-nis, los que ni estudian, ni trabajan,
    those who neither work nor study--or neither study nor work.
        Meanwhile, competition among drug trafficking organizations
    has increased dramatically in recent years due to domestic
    political changes in Mexico, increased counterdrug efforts, and
    other factors. Drug trafficking organizations have become more
    fractionalized, decentralized, and dangerous than ever before,
    with a pattern of chaotic and unpredictable violence in Mexico.
        The cumulative effects of this violence are undesirable to
    U.S. National interests because of Mexico's importance as a
    trading partner, as an ally, and as a neighbor. Moreover, the
    United States bears a shared responsibility to help Mexico
    address this threat since it is U.S. drug consumption,
    firearms, and cash that have fueled much of Mexico's recent
    violence. If we are at war then we are at war with ourselves.
        The current framework for U.S.-Mexico security cooperation
    has already been discussed--the Merida Initiative. It has four
    key pillars in its current framework: Binational collaboration
    to combat DTOs, efforts to aid Mexico's judicial sector, more
    effective border interdiction efforts, and new social programs
    to revitalize Mexican communities affected by crime and
    violence.
        The effort to create a 21st Century border culminates a 3-
    decade effort to beef up U.S. border security. Unfortunately,
    more robust border interdiction efforts have been
    inconsequential in reducing the overall flow of drugs to the
    United States.
        Meanwhile, there have been several unintended consequences,
    including added hassles and delays that obstruct billion of
    dollars in legitimate cross-border trade each year, increased
    sophistication on the part of cross-border smuggling
    operations--it actually makes drug traffickers strong and more
    dangerous--and greater vulnerability in the United States to
    corruption by traffickers, as we have recently seen in
    Columbus, New Mexico.
        I believe that the best hope for near-term progress in this
    effort is to bolster U.S. initiatives to strengthen control to
    prevent illegal exports of firearms to Mexico; to establish
    better controls on money laundering and DTO financial
    operations; to strengthen cross-border cooperation and liaison
    mechanisms for law enforcement; to make greater efforts to
    manage the reentry of deported criminal aliens to Mexico, which
    is becoming a major problem; to develop explicit performance
    measures for this fight against organized crime that are not
    just focused on output measures but on process and
    effectiveness; and finally, to seriously evaluate alternatives
    to current drug policy, including the possibility of regulating
    the legalized consumption of certain drugs.
        Thank you again for your time and for the opportunity to
    present to this distinguished committee. I believe that we can
    help shift the balance in Mexico's battle against organized
    crime and should work with Mexico to do so.
        [The statement of Mr. Shirk follows:]
                      Prepared Statement of David A. Shirk
                                 March 31, 2011
                                  introduction
        On behalf of the Trans-Border Institute at the University of San
    Diego, I would like to thank Chairman McCaul and other Members of this
    subcommittee for the invitation to provide testimony on recent drug war
    violence in Mexico and the border region. Our organization has been
    monitoring Mexico's rule of law challenges through an on-going research
    initiative known as the Justice in Mexico Project, which has been
    generously supported by The William and Flora Hewlett Foundation, the
    Tinker Foundation, and the Open Society Institute. Today, I will
    discuss the security situation in Mexico, the interests of U.S.
    National security, the specific role of U.S. border security efforts,
    and the best approach to reduce the power and impunity of Mexico's
    organized crime groups (OCGs). My testimony summarizes the findings of
    a recent report I produced for the Council on Foreign Relations, as
    well as over 10 years of close monitoring and analysis, personal
    interviews with U.S. and Mexican officials, original surveys of
    judicial sector personnel, and in-depth field research in such places
    as Mexico City, Guadalajara, Monterrey, Ciudad Juarez, and Tijuana.
                          mexico's security situation
        Mexico is in the midst of a worsening security crisis with serious
    implications for the United States. Explosive clashes and territorial
    disputes among powerful OCGs killed more than 34,500 people from
    December 2006 to December 2010, 4 years after President Felipe Calderon
    took office (See Appendix). In this year alone, there are have been
    more than 2,600 organized crime killings documented by the Mexico City
    daily newspaper Reforma, on track to reach at least 10,000 this year by
    their very conservative estimates.\1\ The total number accumulated OCG
    killings in Mexico now stands at well more than double the number of
    drug-related killings since last time I testified in Congress, almost
    exactly 2 years ago (see Appendix).\2\
    ---------------------------------------------------------------------------
        \1\ In a report I co-authored with Viridiana Rios in February 2011,
    we found that Reforma underestimates the number of organized crime-
    related homicides by at least 30% compared to Mexican government
    figures. Since Mexican government data are reported only sporadically,
    Reforma's data provide a useful conservative estimate of the patterns
    of violence in Mexico.
        \2\ Testimony before the House Appropriations Subcommittee on
    Commerce, Justice, and Science, and Related Appropriations, March 24,
    2009.
    ---------------------------------------------------------------------------
        The geography of Mexico's violence remains highly concentrated,
    with two-thirds of drug-related homicides are concentrated in just five
    of the 32 Mexican states and roughly 80 percent in just 168 of 2,456
    municipalities. The density of violence has made major trafficking
    cities like Ciudad Juarez and Culiacan among the deadliest places in
    the world. Indeed, with just over 1 million inhabitants, Juarez had
    more than 2,000 homicides in 2009 and 2010, a number that exceeds the
    combined annual totals for New York (532), Chicago (435), Philadelphia
    (304), Los Angeles (297), Washington, DC (131), and Miami-Dade (84).
    Meanwhile, throughout Mexico dozens of Mexican elected officials,
    hundreds of police and military personnel, and intelligence agents
    working with U.S. law enforcement in the fight against organized crime
    have been killed.\3\ In addition to these victims, dozens of U.S.
    citizens have been caught in the crossfire, including ICE agent Jaime
    Zapata, who last month became the first U.S. law enforcement officer
    killed on assignment in Mexico in over 20 years.
    ---------------------------------------------------------------------------
        \3\ In 2010 alone, 14 of the country's roughly 2,450 mayors were
    assassinated. Viridiana Rios and David Shirk, Drug Violence in Mexico:
    Data and Analysis Through 2010, Trans-Border Institute, 2011 and
    Redaccion, ``EU: el narco asesino a 61 enlaces de DEA y FBI,'' Publico,
    Ano 14, Numero 4808, December 4, 2010, p. 28.
    ---------------------------------------------------------------------------
        Mexico's security crisis is largely a reflection of the country's
    economic struggles over the last few decades. As a result of a series
    of economic crises starting in the 1970s, Mexico's total underground
    economy--including street vendors, pirate taxis, and a burgeoning
    market for ``second-hand'' goods stolen from local sources (such as
    auto parts, electronics, etc.)--now accounts for as much as 40 percent
    of all economic activity.\4\ According to official estimates, illegal
    drug production and trafficking provides employment opportunities for
    an estimated 450,000 people, and perhaps 3-4 percent of Mexico's more
    than $1 trillion GDP.\5\ Today, the illicit drug sector involves large
    numbers of young men aged 18-35 who have neither educational nor
    employment opportunities, known commonly in Mexico as ``ni-ni's'' (ni
    estudian, ni trabajan). Where other options have failed them, these
    young men have found substantial economic opportunities in the illicit
    global economy for drugs.
    ---------------------------------------------------------------------------
        \4\ Jose Brambila Macias, Modeling the Informal Economy in Mexico.
    A Structural Equation Approach, Munich, 2008 http://mpra.ub.uni-
    muenchen.de/8504/.
        \5\ As Campbell (2009) notes, drug trafficking creates a wide range
    of relatively flexible job opportunities at different levels of
    specialization: Pilots, drivers, and logistics experts; lookouts,
    enforcers, and professional hit men; accountants and financial experts;
    and top-level cartel executives in the drug trade. U.S. Government
    estimates of the total profits from these activities are between $19
    billion to $39 billion, while the Mexican government has long estimated
    drug profits to be around $11 billion to $12 billion annually; these
    range between 1 to 3 percent of Mexico's $1.4 trillion GDP. A recent
    Rand study provides the most careful estimate available to date,
    placing annual Mexican drug profits from the United States, not
    including other revenues, at around $6-7 billion or half a percent of
    GDP. See: Howard Campbell, Drug War Zone. Austin: University of Texas
    Press, 2009 and Beau Kilmer, Jonathan P. Caulkins, Brittany M. Bond,
    and Peter H. Reuter, Reducing Drug Trafficking Revenues and Violence in
    Mexico: Would Legalizing Marijuana in California Help? Occasional
    Paper. Santa Monica, CA: Rand Corporation, 2010.
    ---------------------------------------------------------------------------
        This industry grew significantly in Mexico beginning in the 1980s,
    due to increases in U.S. consumption of illicit psychotropic substances
    (especially cocaine) in the 1970s and tougher counter-drug efforts in
    Colombia and the Gulf of Mexico in the 1980s. Initially, the organized
    crime groups operating in Mexico benefited from closely knit
    organizations that were well protected by corrupt officials within a
    highly centralized political system. However, competition among drug
    trafficking organizations has increased dramatically in recent years,
    due to domestic political changes in Mexico, increased counter-
    narcotics efforts, and other factors that have contributed to their
    fractionalization, proliferation, and decentralization. The result has
    been a much more chaotic and unpredictable pattern of violent conflict
    in Mexico.
                    a shared threat: u.s. security interests
        Given these trends, violent organized crime groups represent a real
    and present danger to Mexico, the United States, and neighboring
    countries. The United States has much to gain by helping to strengthen
    Mexico, and even more to lose if it does not. The cumulative effects of
    an embattled Mexican state harm the United States, and a further
    reduction of Mexican state capacity is unacceptable and raises the
    several concerns.
        First, the weaker the Mexican state, the greater difficulty the
    United States will experience in controlling the nearly 2,000-mile
    border. Spillover violence, in which Mexican OCGs bring their fight to
    American soil, is a remote worst-case scenario.\6\ However, the
    penetration of U.S. institutions by Mexican organized crime presents a
    serious problem along the border, as made clear by the recent arrest of
    local U.S. authorities in Columbus, New Mexico on gun trafficking
    charges, as well as hundreds of criminal allegations and bribery cases
    filed within Customs and Border Protection in recent years.\7\
    ---------------------------------------------------------------------------
        \6\ The U.S. Government defines ``spillover violence'' as DTO
    attacks targeting U.S. assets, but excludes DTO-versus-DTO violence on
    U.S. territory or elsewhere.
        \7\ According to one investigative report by The New York Times, in
    2004, the office of internal affairs for the U.S. Customs and
    Immigration Service compiled 2,771 complaints against the agency's
    employees, including more than 550 that involved criminal allegations
    and more than 100 that involved allegations of bribery. From October
    2003 to April 2008, there were numerous cases of alleged corruption
    identified along the border: 125 in California, 45 in Arizona, 14 in
    New Mexico, and 157 in Texas. While incidences were not exclusively the
    result of penetration by Mexican organized crime, they illustrate the
    vulnerability of U.S. law enforcement agencies to corruption.
    ---------------------------------------------------------------------------
        Second, weak Mexican government increases the flow of contraband
    and immigrants into the United States. As the dominant wholesale
    distributors of illegal drugs to U.S. consumers, Mexican traffickers
    are also the single greatest domestic organized crime threat within the
    United States, operating in every State and hundreds of U.S. cities,
    selling uncontrolled substances that directly endanger the health and
    safety of millions of ordinary citizens. In addition, recent reports
    suggest that high levels of violence in Mexico have caused massive
    internal displacement that has led tens of thousands of Mexicans to
    seek refuge in the United States.\8\
    ---------------------------------------------------------------------------
        \8\ The Internal Displacement Monitoring Centre issued a report
    stating that there are an estimated 120,000 internally displaced people
    (IDPs) as a result of the violence from the Mexican Drug War and other
    factors. In the press, the figures were widely reported incorrectly at
    around 230,000, the number of people who fled their homes in the
    troubled city of Ciudad Juarez, not all of whom are properly
    categorized as IDPs. However, the report, titled Internal Displacement:
    Global Overview of Trends and Developments in 2010, clearly indicates
    that the total number was only 130,000 persons formally labeled as
    IDPs. The Internal Displacement Monitoring Centre asserts that in 2010
    ``most IDPs originated from the states most affected by violence,
    Chihuahua and Tamaulipas.'' Stevenson, Mark. ``Report: 230,000
    Displaced by Mexico's Drug War.'' Associated Press. March 25, 2011.
    Internal Displacement Monitoring Centre, Internal Displacement: Global
    Overview of Trends and Developments in 2010. http://www.internal-
    displacement.org/publications/global-overview-2010.pdf
    ---------------------------------------------------------------------------
        Third, widespread violence in Mexico damages an important economic
    market for the United States. As a member of the North American Free
    Trade Agreement (NAFTA), it is one of only 17 States with which the
    United States has a free trade pact, outside of the General Agreement
    on Trade and Tariffs (GATT). The United States has placed nearly $100
    billion of foreign direct investment in Mexico. Mexico is also the
    United States' third-largest trade partner, the third-largest source of
    U.S. imports, and the second-largest exporter of U.S. goods and
    services--with potential for further market growth as the country
    develops. Finally, Mexican instability threatens other countries in the
    region. Given the fragility of some Central American and Caribbean
    states, expansion of Mexican DTO operations and violence into the
    region has already begun to have a seriously destabilizing effect.
        Not only is helping to solve Mexico's crisis in the U.S. National
    interest, but the United States also bears a shared responsibility for
    resolving it, since U.S. drug consumption, firearms, and cash have
    fueled much of Mexico's recent violence.\9\ According to the 2007
    National Survey on Drug Use and Health, roughly 8 percent of U.S.
    residents over the age of 12--some 19.9 million people--had used drugs
    within the past month.\10\ Because of the size of the U.S. black market
    for drugs and the inflationary effect of prohibition on prices, Mexican
    suppliers enjoy enormous profits, estimated at $6 billion to $7 billion
    annually, with at least 70 percent coming from hard drugs like cocaine,
    heroin, methamphetamine, and other synthetics and operatives in U.S.
    banks like American Express, Bank of America, and Wells Fargo
    facilitating drug traffickers' financial operations.\11\ Moreover,
    lethal firearms, ammunition, and explosives sold both legally and
    illegally in the United States arm the cartels and are a major
    contributing factor to Mexico's violence, since an estimated 10 percent
    of U.S. gun dealers are located along the U.S.-Mexico border and
    powerful U.S. gun lobbies have effectively hamstrung efforts to enforce
    existing laws or otherwise regulate access to deadly, high-powered
    weapons.\12\
    ---------------------------------------------------------------------------
        \9\ While there is debate about the exact proportion of U.S.
    firearms that are responsible for Mexico's violence, there is no doubt
    that these number in the tens of thousands. Eric Olson, Andrew Selee,
    and David A. Shirk, Shared Responsibility: U.S.-Mexico Policy Options
    for Combating Organized Crime. Washington, DC; San Diego, CA: Mexico
    Institute, Woodrow Wilson International Center for Scholars; Trans-
    Border Institute, University of San Diego, 2010.
        \10\ These drugs included marijuana, cocaine, crack cocaine,
    heroin, hallucinogens, inhalants, and nonmedical use of prescription
    psychotherapeutic drugs. Marijuana was the most commonly used illicit
    drug, with 14.4 percent current users. Over 26 percent of high school
    students had tried marijuana by their senior year, compared to 4
    percent for cocaine, 35 percent for cigarettes, and 58 percent for
    alcohol. Drug use was significantly higher among unemployed persons, of
    whom 18.3 percent were current illicit drug users. Results from the
    2007 National Survey on Drug Use and Health: National Findings (NSDUH
    Series H-34, DHHS Publication No. SMA 08-4343). Substance Abuse and
    Mental Health Services Administration, Office of Applied Studies.
    Rockville, MD (2008).
        \11\ Black markets can make goods either cheaper or more expensive.
    When a good is legally available but overpriced (as with pirated music
    or cigarettes in Canada), black market prices tend to be lower than the
    ``free'' market. However, when a good is illegal and, especially,
    controlled by a small group or cartel (as with illicit drugs), its
    price tends to become inflated relative to what it might be on the free
    market. While U.S. official estimates suggest that marijuana represents
    60% of drug profits, a recent Rand study places total Mexican DTO drug
    profits from the United States at around $6-7 billion, with up to a
    third coming from marijuana. Kilmer, et al. (2010). Michael Smith,
    ``Banks Financing Mexico Gangs Admitted in Wells Fargo Deal,'' In
    Bloomberg News, 2010. http://www.bloomberg.com/news/2010-06-29/banks-
    financing-mexico-s-drug-cartels-admitted-in-wells-fargo-s-u-s-
    deal.html.
        \12\ Estimates for the number of drug shops along the border vary
    widely. In January 2008, Mexican Ambassador Arturo Sarukhan indicated
    that ``[b]etween Texas and Arizona alone, you've got 12,000 gun shops
    along that border with Mexico.'' (Corchado and Connolly 2008). More
    recent estimates place the figure around 6,700, around three gun
    dealers for every mile along the border (Serrano 2008). Estimates for
    the total number of gun dealers in the United States also vary, but by
    all accounts they have declined dramatically over the last decade--from
    245,000 to 54,000--thanks to tighter regulations. Alexandra Marks,
    ``Why Gun Dealers Have Dwindled,'' Christian Science Monitor, March 14,
    2006. See also: Jon S. Vernick, Daniel W. Webster, Maria T.
    Bulzacchelli, and Julie Samia Mair. ``Regulation of Firearm Dealers in
    the United States: An Analysis of State Law and Opportunities for
    Improvement,'' The Journal of Law, Medicine, and Ethics. Volume 34,
    Issue 4, pp. 765-775. According to the 2004 National firearms survey
    conducted by Hepburn et al. (2007), there are an estimated 218 million
    privately owned firearms in the United States. However, only one in
    four U.S. citizens (26 percent) and two in five households (38 percent)
    actually owned a firearm. This means that the vast majority of firearms
    are owned by a small percentage of the population, with nearly half of
    all individual gun owners (48 percent) possessing four or more weapons
    and only 20 percent of owners holding 65 percent of all guns.
    ---------------------------------------------------------------------------
        The United States should therefore take full advantage of the
    unprecedented resolve of Mexican authorities to work bilaterally to
    address a common threat. In particularly, failure to address money
    laundering and gun trafficking with greater commitment undermines
    Mexico's trust and has already begun to close the present window of
    opportunity for bi-National cooperation. Indeed, recent revelations
    about U.S. diplomatic cables and Operation Fast and Furious--an ATF
    operation that allowed thousands of guns to pour into Mexico for
    investigative purposes--have conveyed to some Mexicans that the United
    States is not serious in its commitment, severely damaging U.S.-Mexico
    relations and contributing to the recent resignation of U.S. Ambassador
    Carlos Pascual.
                      u.s. assistance and border security
        Notwithstanding recent setbacks, the United States and Mexico have
    been working together more closely than ever before through the Merida
    Initiative, which began as a 3-year, nearly $1.4 billion aid package to
    provide U.S. equipment, training and technical assistance,
    counternarcotics intelligence sharing, and rule of law promotion
    programs in Mexico and Central America (See Appendix).\13\ For Mexico,
    direct U.S. financial assistance provides a significant boost on top of
    the roughly $4.3 billion spent annually combating drug trafficking.\14\
    The current framework for cooperation under the Merida Initiative has
    four ``pillars'': More binational collaboration to combat DTOs, greater
    assistance to strengthen the judicial sector, more effective
    interdiction efforts through twenty-first-century border controls, and
    new social programs to revitalize Mexican communities affected by crime
    and violence.\15\
    ---------------------------------------------------------------------------
        \13\ The Government Accountability Office reports that $1.32
    billion (84 percent) of Merida Initiative funding was slated for
    Mexico, while $258 million (16 percent) was slated for Central America.
    United States Government Accountability Office, Merida Initiative: The
    United States Has Provided Counternarcotics and Anticrime Support but
    Needs Better Performance Measures, Washington, DC, 2010, p. 4.
        \14\ Query to Ambassador Arturo Sarukan at presentation to the
    Mexico Institute of the Woodrow Wilson Center in 2010.
        \15\ Clare Ribando Seelke and Kristin M. Finklea, U.S.-Mexican
    Security Cooperation: the Merida Initiative and Beyond, Washington, DC,
    2010.
    ---------------------------------------------------------------------------
        My comments in this hearing will focus primarily on ``Pillar
    Three,'' the effort to create a 21st Century border. Secretary of
    Homeland Security Janet Napolitano and Customs and Border Protection
    Commissioner Alan Bersin have been actively engaged in high-level
    collaborative efforts to work with Mexico to strengthen border security
    measures. Merida funds have been used to strengthen Mexican capacity
    for border controls, primarily targeting the southbound flow of weapons
    and bulk cash. Less effort has been focused on controlling Mexico's
    southern border, which is a major source of land-based shipments of
    contraband headed north. Above all, after a three-decade effort to beef
    up border security, the U.S.-Mexico divide is more heavily fortified
    than at any point since the Mexican revolution, when half of U.S.
    forces were stationed there to stave off Mexican insurgent groups.
        Indeed, the number of Border Patrol agents grew from 2,900 in 1980
    to around 4,000 by 1994, at the start of NAFTA. At the time, public
    concerns about drug trafficking and undocumented built support for more
    concentrated border-enforcement efforts, such as ``Operation Hold-the-
    Line'' and ``Operation Gatekeeper,'' intended to gain operational
    control of strategic corridors along the border. With new funding for
    these programs, the border was fortified with new fencing and high-tech
    surveillance systems, and the size of the Border Patrol more than
    doubled to over 9,000 agents in 2000. In the new millennium, the 9/11
    attacks placed new urgency on homeland security and led to continue
    investments in Southwest border enforcement. By the end of President
    Obama's first year in office, the Border Patrol had more than doubled
    in size to more than 20,000 agents and annual spending on border
    security at more than $40 billion (see Appendix).\16\
    ---------------------------------------------------------------------------
        \16\ In addition, more than 3,000 Immigration and Customs
    Enforcement (ICE) agents were sent to the border to bolster efforts to
    combat arms and cash smuggling by drug traffickers.
    ---------------------------------------------------------------------------
        Unfortunately, one of the major flaws of the current U.S.-Mexico
    strategy is the false presumption that international trafficking of
    drugs, guns, and cash can be effectively addressed through
    interdiction, particularly along the nearly 2,000-mile U.S.-Mexican
    border. Indeed, while this massive security build-up at the border has
    achieved maximum attainable levels of operational control, the damage
    to Mexico's drug cartels caused by border interdiction has been
    inconsequential. In 2009, U.S. authorities seized about 17,000 kilos of
    cocaine, or about $273 million at wholesale prices (roughly $16,000 per
    kilo), at the Southwest border. However, authorities spent most of
    their time and manpower seizing the nearly 1.5 million kilos of
    marijuana that, in bulk terms (total poundage), represented 98 percent
    of all illicit drugs seized at the border. According to the best
    available estimates, these seizures represented a small fraction, no
    more than 9 percent of the $6-7 billion in total proceeds that Mexican
    DTOs derive from the United States each year.
        Meanwhile, there have been several unintended consequences of
    heightened interdiction at the border, including added hassles and
    delays that obstruct billions of dollars in legitimate commerce each
    year, the expansion and increased sophistication of cross-border
    smuggling operations, and greater U.S. vulnerability to attacks and
    even infiltration by traffickers.\17\ Because the major urban corridors
    along the border have been largely secured, further efforts to beef up
    the border through more patrolling and fencing will have diminishing
    returns and will likely cause more economic harm than actual gains in
    security.\18\
    ---------------------------------------------------------------------------
        \17\ The number of Border Patrol agents alone increased from 2,900
    in 1980, to 9,000 in 2000, to more than 20,000 by 2010. This has
    squeezed ``mom-and-pop'' smuggling operations out of the business,
    allowing more dangerous and powerful DTOs to take over. As a result,
    the Border Patrol has experienced more violent attacks (including
    fatalities) and hundreds of cases of corruption in its ranks since
    2003. Ralph Vartabedian, Richard A. Serrano, and Richard Marosi, ``The
    Long Crooked Line; Rise in Bribery Tests Integrity of U.S. Border,''
    Los Angeles Times, October 23, 2006; Arrillaga, Pauline, ``Feds
    Struggle with Border Patrol Corruption,'' Associated Press, September
    22, 2006; Archibold, Randal C. and Andrew Becker, ``Border Agents,
    Lured by the Other Side,'' New York Times, May 27, 2008.
        \18\ The U.S. economy to loses $3.74 billion of cross-border
    economic activity and over 33,000 jobs each year at the San Diego-
    Tijuana corridor alone, the entry point for 12 percent of overall U.S.-
    Mexico trade. San Diego Association of Governments, Economic Impacts of
    Wait Times at the San Diego-Baja California Border, Final Report,
    January 19, 2006. See also: Haralambides, Hercules E. and Maria P.
    Londono-Kent, ``Supply Chain Bottlenecks: Border Crossing
    Inefficiencies Between Mexico and the United States,'' International
    Journal of Transport Economics, Vol. XXXI, No. 2, June 2004.
    ---------------------------------------------------------------------------
                             policy recommendations
        Mexico urgently needs to reduce the power of violent organized
    crime groups. The best hope for near-term progress is to bolster U.S.
    domestic law enforcement efforts to curb illicit drug distribution,
    firearms smuggling, and money laundering. The United States should also
    develop and implement a coordinated, National interagency strategy for
    identifying, investigating, and disrupting the U.S. financial
    facilitators and arms distributors that support Mexican DTOs. To make
    progress toward these ends, U.S. authorities should:
        (1) Strengthen controls to prevent illegal exports of firearms to
    Mexico.--Introducing registration requirements for large-volume
    ammunition purchases and unassembled assault weapons kit imports;
    strengthening reporting requirements for multiple long arms sales
    (similar to those for multiple handgun sales); increasing ATF capacity
    for the investigation of straw purchases and trafficking conspiracies;
    enforcing the Federal ban on imports of assault rifles not intended for
    sporting purposes; and removing obstacles to information sharing among
    law enforcement agencies and greater transparency in the public
    reporting of aggregate data on gun crimes.
        (2) Establish better controls on money laundering and DTO financial
    operations.--The United States should provide more resources, training,
    and coordination mechanisms for State and local law enforcement
    agencies to better target, seize, and trace the proceeds of illicit
    drug sales. The United States should aggressively enforce the Foreign
    Investment and National Security Act of 2007 to track the investments
    of Mexican drug traffickers in the United States. Additionally, the
    United States should establish joint operations to share data and
    intelligence on possible drug money laundering in Mexican and third-
    country financial institutions. Ultimately, the United States needs
    greater coordination and stronger initiatives from the U.S. Securities
    and Exchange Commission (SEC), Treasury Department, and Federal Deposit
    Insurance Corporation (FDIC) to conduct careful searches for financial
    patterns consistent with drug money laundering. If these institutions
    cannot do so, then the United States should create a new agency that
    will.
        (3) Strengthen cross-border cooperation and liaison mechanisms.--
    The Executive branch should establish stronger mechanisms to coordinate
    U.S. responses to Mexico's security crisis domestically and abroad,
    including a White House office (Special Assistant) to facilitate
    sustained, high-level attention to U.S.-Mexico security cooperation,
    coordinate inter-agency processes, and monitor developments and
    progress. Moreover, the U.S. Government should reinvigorate the
    Security and Prosperity Partnership or launch a similar initiative,
    creating a permanent, multilateral council of nongovernmental, private
    sector, and elected representatives. The United States and Mexico
    should also re-activate the Bilateral Commission meetings of cabinet-
    level personnel to ensure that bi-national cooperation progresses on
    other fronts that are important beyond security. At the State level,
    the Federal Government should support collaboration among the U.S.-
    Mexico border governors and border legislators. Along the border, the
    United States should dedicate greater staff and resources to bi-
    national border liaison mechanisms (BLMs), as well as multiagency task
    forces and international liaison units within U.S. law enforcement
    agencies.
        (4) Prevent blowback from U.S. deportations of criminal aliens.--
    U.S. law enforcement, prison, and immigration authorities should work
    more closely with their foreign counterparts to prevent repatriated
    criminal aliens from becoming new recruits for DTOs in Mexico and
    Central America. Preventive strategies should include educational and
    rehabilitative programs for foreign nationals in U.S. prisons (such as
    working with Mexico's education ministry to provide the equivalent of a
    general education degree to Mexican criminal aliens during their
    incarceration in the United States). In addition, U.S. immigration
    authorities should be required to work with Mexican and Central
    American authorities to develop better bilateral protocols for managing
    the reentry of aliens to their home country.
        (5) Develop explicit performance measures for the fight against
    organized crime.--Across the board, U.S. agencies should establish
    explicit baseline indicators, performance measures, benchmarks,
    targets, and timelines for progress toward their strategic objectives
    of dismantling organized crime, strengthening rule of law, reducing
    illicit flows, and building stronger communities. Assessment efforts
    will require dedicated funding for both Congressional oversight and
    nongovernmental monitoring efforts, and should go beyond typical
    ``output'' measures (e.g., arrests, trainings, seizures, and program
    activities) to evaluate ``outcomes.'' Specifically, the U.S. Congress
    should require the Department of Homeland Security to provide regular
    reports and greater detail--including information and statistics on
    activities, seizures, apprehensions, and aggregate costs--for current
    border security initiatives and programs intended to facilitate
    interagency collaboration in combating drug trafficking, money
    laundering, and firearms trafficking in border communities, such as
    Operation Stonegarden. In addition, the U.S. Government Accountability
    Office should carefully assess the corrupting influences of
    transnational organized crime networks on U.S. border security and law
    enforcement, and ensure that there are adequate resources to address
    possible vulnerabilities and breaches in integrity.
        (6) Evaluate alternatives to current counter-drug policy.--The U.S.
    Congress should commission an independent advisory group to examine the
    fiscal and social impacts of drug legalization as well as other
    alternative approaches to the war on drugs. The commission should be
    provided adequate funding--at least $2 million--to provide a
    comprehensive review of existing policies and develop realistic,
    clearly defined, and achievable policy recommendations for reducing the
    harms caused by drug consumption and abuse. The United States should
    simultaneously take a leading role in the international dialogue on the
    future of drug policy by collaborating directly with other countries in
    the Americas to develop alternative policy approaches to reduce the
    harm caused by drugs. Specifically, the United States and Mexico should
    work together in promoting the Inter-American Drug Abuse Control
    Commission's ``New Hemispheric Drug Strategy,'' with an emphasis on
    protections for basic human rights, evidence-based drug policy, and a
    public health approach to drug abuse.
                                  conclusions
        The opportunity for effective U.S.-Mexico cooperation to address
    these shared concerns has grown in recent years, thanks to the resolve
    of Mexican leaders to embrace the fight against transnational organized
    crime. The United States has a vested interest in helping Mexico
    improve its governance, National security, economic productivity, and
    quality of life, which are integral to making Mexico a better neighbor
    and trade partner in the longer term. Despite some recent tensions,
    Mexico is also eager to continue working toward these ends, and it has
    embraced unprecedented levels of collaboration thanks to a growing
    spirit of cooperation on both sides of the border. Challenges and
    setbacks are inevitable, and will require sustained efforts to build
    greater trust and cooperation between both countries. In the long run,
    the United States can help shift the balance in Mexico's battle against
    organized crime and prevent the further spread of violence within
    Mexico and to its neighbors. This will require a serious commitment to
    U.S. responsibilities at home, long-term investments to make Mexico a
    more secure and prosperous neighbor, and a more sensible policy for
    managing the harms associated with drugs.

        Mr. McCaul. Thank you, Dr. Shirk.
        Chair now recognizes Mr. Bailey for 5 minutes.

      STATEMENT OF JOHN BAILEY, PROFESSOR, GOVERNMENT AND FOREIGN
                     SERVICE, GEORGETOWN UNIVERSITY

        Mr. Bailey. Thanks, Chairman McCaul, Ranking Member
    Keating, Mr. Cuellar. Thanks for the opportunity to come this
    morning and testify. My purpose today is to compare and
    contrast the Merida Initiative with Plan Colombia and identify
    these relevant policy lessons.
        The main lesson to be learned--two very different
    countries, different times, different places, and different
    problems. Mexico, the base is a lot bigger and a lot more
    complicated. Mexico has twice the population, 40 percent more
    territory, five times the GDP, and three or four times the
    central government budget.
        Colombia, on the complexity--I am really very interested in
    this issue about using military instruments, and the Colombian
    system is very different--designed very differently. That is,
    the Colombian system is a unitary system in which the police--
    the national police--are a large part of the force and they are
    integrated into the armed forces, and they are administered
    through one ministry. So it is a much more coherent
    organization to operate with.
        Mexico is a federal system. It operates through hundreds of
    different police forces--350,000 police throughout the
    country--and so it is a lot more complicated to get it to be
    coordinated.
        Further, what is really important is the role of the army--
    the Mexican army. It is operating on thin ice. It doesn't have
    a legal mandate. It has a questionable legal ground to be
    operating on, and so the difficulty of working with the Mexican
    military--there are lots of different issues, but one is it is
    operating on an ad hoc fashion; it doesn't really have a legal
    backing that it really needs to have.
        The written statement goes into details about origins,
    evolutions of policies, lots of data on finance. If you are
    interested we can go back and take a look at those issues. I
    thought I would go straight to the lessons and what can we
    learn from the Plan Colombia that is relevant to the Merida.
        You put your finger exactly on the issue. What is the
    strategy?
        The Colombians, over time, evolved as strategy, and this is
    the case with Alvaro Uribe's ``Plan Patriota.'' So rather than
    reacting to the guerrilla initiatives in an ad hoc fashion the
    Uribe government expanded the size and strengthened the
    operational capacity of its army and police and adopted a
    harder, more proactive offensive against insurgent forces.
        But the important part is government also developed a more
    integrated political military development social agenda which
    carries more overtones of integrating these different pieces
    into one idea. Part of it draws on the U.S. policies in Iraq--
    clear, hold, consolidate--but the key is the Colombians evolved
    a strategy. They had priorities, they knew what they wanted to
    do, and they integrated their response.
        Second point, the politics off all this: In order to move
    ahead the Colombians had to come to an agreement--a kind of a
    political consensus about the urgency of the issue, and Uribe
    was able to do that. He consolidated a political kind of a
    consensus to the point that he could implement a tax--a special
    tax to carry it out.
        I want to emphasize, Mexico is a long way from that kind of
    an agreement. There are three main political parties.
        Each of the parties uses the public security problem for
    partisan advantage. Sixteen months until a presidential
    election, we can expect these parties to continue down that
    road and so we can't really anticipate important changes, my
    opinion, until we get past--we pass those elections.
        Mexicans tax themselves amongst the least in the
    hemisphere. They rely for a third of their income on a
    petroleum company.
        Third point, very important: The costs of the Plan Colombia
    in terms of human rights. Estimated 20,000 people were killed
    by paramilitary, guerrilla, state forces in the period 2000 to
    2008. More than 2 million were displaced. We don't know the
    exact numbers--some displaced internally, some displaced into
    neighboring countries.
        The Mexican side, we don't know the numbers that are
    displaced and we have to rely on sort of press accounts, but
    that is why I come back to this point about using military
    instruments. Colombia is 1,000 miles from the U.S. border;
    Mexico is our border. So using the military needs to be done in
    a very thoughtful way.
        Fourth, the Colombians, over time, made very important
    improvements in their air mobility and in their innovations
    internally with regard to their army and police forces on how
    to use those effectively, integrating, especially, intelligence
    with operations. This is where the seamless web of police
    forces and military forces really works out well.
        Mexicans, I think, are a long way from that. The army
    operates rather independently, doesn't cooperate very well with
    other kinds of forces, and so that has got to be a major
    priority. Key in that is operational intelligence.
        Fifth--and I will stop with this--the United States, I
    think, is focused on institution-building, and that is the
    right strategy to take. The key is this kind of institution-
    building is going to take years to produce results.
        So in terms of--returning to your point about strategy, how
    does one deal with the fire that is going on right now while
    trying to improve the institutional part of the police justice
    system and relying on a military that is operating on dubious
    legal grounds? This is where the strategic thinking needs to
    come in.
        Especially important in that is this operational
    intelligence, which is the key, in my mind, to the instrument
    of dealing with organized crime. Mexico has a long way to go to
    get its operational intelligence to work effectively.
        In conclusion, my sense is that useful policy-learning has
    taken place over the past decade or so with regard to effective
    ways to confront violence and corruption associated with
    organized crime. This learning will be especially useful
    because the challenges presented by transnational trafficking
    organizations have grown more ominous over time.
        Mexico's reality in 2011 is quite different from what it
    was in 2007 as criminal organizations, as this group has
    already heard, branched into many new types of both criminal
    and illicit activities and expanded their operations into new
    terrain. The key, though, is President Calderon's strategy to
    operate against the cartels does not have strong political
    support, and in fact, the costs of the violence that we talked
    about earlier have really eroded that kind of political
    support.
        So there is a window that is opening now in the next, say,
    14 to 16 months for the Americans and the Mexicans to rethink
    their plan--their strategy, and actually develop a strategy,
    and then implement it when the new administration comes in in
    Mexico in 2012. Thank you very much.
        [The statement of Mr. Bailey follows:]
                       Prepared Statement of John Bailey
                                 March 31, 2011
        My purpose today is to compare and contrast the ``Merida
    Initiative'' (MI) with ``Plan Colombia'' (PC), and to identify relevant
    policy lessons.\1\ Table 1 at the end of the document summarizes key
    points. In essence, Mexico is much bigger and more complex than
    Colombia. Mexico has more than twice the population of Colombia, over
    40 percent more land area, more than five times the gross domestic
    product (GDP), and more than three times the central government budget
    outlays. Colombia is a unitary system (but with significant
    decentralization), with a national police closely integrated with the
    armed forces, all operating under a single, civilian-controlled
    ministry. Mexico is a federal system with a small national police and
    greater reliance on hundreds of state and local police forces. Due to
    acute, systemic problems of corruption and incompetence in the civilian
    police-justice system, the Mexican armed forces have been assigned a
    lead role in anti-drug law enforcement. These, however, operate without
    full law enforcement authority and with a weak legal mandate. There are
    two other factors to note: First, the Mexican Army is among the most
    isolated of national institutions in terms of transparency and
    accountability; second, it has a long history of an anti-U.S.
    institutional culture as part of its doctrine. The lead role of the
    Mexican Army creates a further complication: It reinforces the U.S.
    tendency to militarize anti-drug security policies. Above all, Mexico
    shares a 2,000-mile land border with the United States, which--among
    other things--puts its internal security situation higher on the U.S.
    policy agenda.
    ---------------------------------------------------------------------------
        \1\ The statement draws extensively on Bailey 2009. Bridget
    O'Loughlin helped with research and Inigo Guevara provided helpful
    comments, but neither bears responsibility for the content of the
    statement.
    ---------------------------------------------------------------------------
        The problem profiles of the two countries also differ in important
    respects. Violence associated with organized crime is a significant
    challenge in both countries, but in quite different contexts. If we
    take 1948 as a point of reference, Colombia entered (or re-entered) a
    phase of profound internal war, while Mexico began to consolidate
    internal peace based on the hegemonic rule of the Institutional
    Revolutionary party (PRI). Insurgency forces (especially the FARC) have
    waged a 40-year armed struggle against the Colombian government, with
    varieties of rightist self-defense forces multiplying and complicating
    the violence. One estimate suggests that at its height in 2006 the FARC
    controlled approximately 30 percent of National territory (CRS 2008b,
    p. 6). Colombia's primary challenge is to terminate the internal wars.
        In contrast, guerrilla insurgency is not an issue in Mexico. The
    Zapatistas were a minor regional rebellion, confined mostly to parts of
    the state of Chiapas on the far southern border with Guatemala and have
    evolved into a local political force. The Ejercito Popular
    Revolucionario (Popular Revolutionary Army) is a shadowy, largely
    marginalized group with infrequent operations in the State of Guerrero
    and the Federal District. Mexico's key challenge is a sharp upsurge in
    criminal violence beginning in about 2004 and escalating in subsequent
    years. The government estimates that 34,612 homicides are attributable
    to organized crime between December 2006 and January 2011.\2\ Most of
    the violence is associated with drug trafficking in the sense of trans-
    national smuggling and retail distribution to the rapidly-growing
    internal drug markets. The confluence of rivers of drug money, trained
    fighters, and high-power weapons has produced well-organized,
    politically-effective, hyper-violent trafficking organizations that are
    capable of challenging the government's police-justice system and the
    army. While most of the violence is concentrated in perhaps six or
    eight of the 32 states, the trafficking organizations can strike
    anywhere in the country and almost at will. In comparison, the height
    of Colombia's drug gang violence was in the late 1980s and early 1990s.
    Since that time the trafficking organizations have adopted lower-
    profile, less violent methods. In summary, Colombia is a case of a
    complicated internal war in which drug production and trafficking play
    a significant role; Mexico is a case of hyper-violent criminal
    organizations that use terrorist-like methods to challenge the
    government and society.
    ---------------------------------------------------------------------------
        \2\ Information provided by the Mexican Presidency, available at
    http://www.presidencia.gob.mx/?DNA=119.
    ---------------------------------------------------------------------------
        The origins of PC and MI are different. As originally proposed by
    President Andres Pastrana (1998-2002), Plan Colombia covered five
    areas: The peace process, economic growth, anti-drug production and
    trafficking, reform of justice and protection of human rights, and
    democracy-promotion and social development. Pastrana sought assistance
    from the European Union and a number of other countries. Following an
    internal debate, the U.S. Government (USG) emphasized the anti-
    narcotics theme to the point that other countries were reluctant to
    participate. Pastrana's original logic (shared by other international
    actors) was that a negotiated peace could set the stage for economic
    development, institutional reform, and conditions to reduce drug
    trafficking. The USG, in contrast, insisted that solving the drug issue
    would starve the resources to FARC and other insurgency groups and
    hasten the end to the war. Other themes, such as human rights and the
    peace process were secondary (Chernick, 2008, pp. 129-137).\3\ In all
    this, the USG played an active--even intrusive--role.
    ---------------------------------------------------------------------------
        \3\ A U.S.-based human rights group has reported: ``For Planners of
    U.S. assistance to Colombia, non-military programs have always been an
    afterthought. Four out of five dollars in U.S. aid goes to Colombia's
    armed forces, police, and fumigation program'' (CIP, 2006, p. 5).
    ---------------------------------------------------------------------------
        In contrast, the George W. Bush administration made a conspicuous
    effort not to take the lead with respect to MI but to respond to Mexico
    (and subsequently to the Central American and Caribbean countries).
    This is because, given the long history of intervention (perceived and
    real), USG initiatives in sensitive areas of public security and law
    enforcement would arouse Mexican nationalist responses that would be
    fatal to the Initiative. Also, President Calderon's government was more
    narrowly focused on repressing drug-related criminal violence, a focus
    that the USG shared. Although initially focused on Mexico and Central
    America, MI was subsequently broadened to include Haiti and the
    Dominican Republic (Selee 2008; Olson 2008). In August 2010, with the
    establishment of the Central American Regional Security Initiative
    (CARSI), MI was re-focused on Mexico.
        The resulting policies thus differ in scope and targets. Even in
    its narrower version, PC included democracy promotion and institutional
    development, with more ambitious components of economic development
    (e.g., crop substitution), and some attention to human rights. The
    policy targets reflect the U.S. interpretation of the problem context.
    Originally, PC focused on anti-drugs programs. Following September 11,
    2001, the U.S. policy shifted to include strong attention to anti-
    terrorism, with more active support for initiatives against the FARC
    and self-defense forces. Those targets put more attention on the
    Colombian army and police, and themes of air mobility and operational
    intelligence. Primary attention in PC went to Colombia, with
    comparatively minor funding to Ecuador and Peru.
        In the Barack Obama administration, MI remained more narrowly
    focused on internal and bilateral security and institution-building in
    law enforcement and justice administration. Human rights conditionality
    was a sensitive issue because of Mexico's rejection of assistance
    conditioned on standards imposed by the USG. Significant changes in the
    Obama administration were the ``four pillars'' organizing concept and
    the tailoring of individual subregional policies for Mexico, Central
    America, and the Caribbean.\4\ The administration also shifted from an
    equipment-focused initial phase to the current institution-building
    phase. The result is insufficient equipment and programs that will take
    years to show positive results.
    ---------------------------------------------------------------------------
        \4\ The ``four pillars'' refer to: Disrupt the capacity of
    organized crime to operate; institutionalize capacity to sustain rule
    of law; create a 21st Century border structure; and build strong and
    resilient communities.
    ---------------------------------------------------------------------------
        With respect to time and money, PC ran from 2000 to 2006, and was
    followed by a similar set of policies in a PC, Phase II (2006-2011).
    The USG spent about US$4.5 billion through 2006 and $6.1 billion
    through 2008 (CRS 2008b). The current debate in the USG concerns
    reducing U.S. support and encouraging greater burden-bearing by the
    Colombian government. As originally announced, USG commitment to MI ran
    through 2010, although it was extended by the Obama administration. Set
    originally in the US$1.5 billion range for 2008-2010, the Obama
    administration requested $310 million for Mexico for fiscal year 2011
    and $282 million for fiscal year 2012 (CRS 2011, 1).\5\ Given Mexico's
    much larger economy and public sector budget, the dollar amounts of
    U.S. assistance are small, which reduces USG policy leverage.
    ---------------------------------------------------------------------------
        \5\ ``In the absence of FY2011 appropriations legislation, the
    111th Congress passed a series of continuing resolutions (Pub. L. 111-
    242 as amended) to fund government programs, with the latest extension
    set to expire on March 4, 2011. The Continuing Resolution, as amended,
    continues funding most programs at the FY2010-enacted level, with some
    exceptions'' (CRS 2011, 1).
    ---------------------------------------------------------------------------
        Finally, U.S. commitments for its own internal policy are much
    greater in the case of MI--at least at the declaratory level--than for
    PC. U.S. rhetoric calls for a ``genuine partnership'' with Mexico. This
    should be underlined as a significant shift in policy toward much
    greater engagement in regional security affairs and a stronger
    commitment to make internal adjustments to ameliorate conditions that
    feed insecurity. Specifically, the USG commits itself to reduce drug
    demand, halt the flows of precursor chemicals and weapons into the
    region, and address problems of bulk cash smuggling and money
    laundering.
                     lessons learned from pc relevant to mi
        Policy learning occurred in PC's implementation, and Mexican
    authorities have shown great interest in the Colombian experience.\6\
    Eight ``lessons'' are worth noting.
    ---------------------------------------------------------------------------
        \6\ In the first days of the Calderon administration, Mexico's
    Attorney General Eduardo Medina Mora led a high-level delegation to
    Bogota to consult with President Alvaro Uribe and top Colombian
    security officials. Medina Mora stated that the purpose of the visit
    was to ``exchange experiences, views, and learn reciprocally about
    common problems, security problems, about exchange of information about
    how to better combat organized crime.'' A high-level contact group
    begun in 2003 would be reactivated. ``Mexico usara experiencia de
    Colombia en lucha antinarco,'' El Universal on-line (January 26, 2007).
    ---------------------------------------------------------------------------
        (1) Colombians emphasize the need for a strategic approach to
    addressing internal violence.\7\ An important shift to strategic
    thinking and policy development in PC came in 2003, with President
    Alvaro Uribe's ``Plan Patriota.''\8\ Rather than reacting to guerrilla
    initiatives in an ad hoc fashion, the Uribe government expanded the
    size and strengthened the operational capacity of the army and police,
    and adopted a harder, more proactive offensive against the insurgent
    forces.\9\ His government also developed a more integrated political-
    military-development approach, one which carries overtones of U.S.
    policy in Iraq (clear, hold, consolidate). Thus, the successor policy
    to Plan Patriota is called Plan Consolidacion (GAO, 2008, p. 11-14).
    Mexico's government claims to employ a comprehensive strategy against
    organized crime, but its real strategy appears simpler and more
    straightforward: Use the military to pulverize the trafficking
    organizations into smaller, less potent gangs so that State and local
    authorities can reclaim effective control over territory (Bailey 2010).
    The long menu of institutional reforms encountered delays in
    Congressional approval and are being implemented slowly.
    ---------------------------------------------------------------------------
        \7\ See, for example, a statement by Colombia's defense minister:
    `` `Recomendable, tener una politica integral para combatir al narco':
    Manuel Santos,'' El Universal on-line (November 29, 2006).
        \8\ See the discussion by Gonzalo de Fransico (2006, 97).
        \9\ ``[Uribe] voted not to negotiate with any of the armed groups
    until they declared a cease-fire and disarmed. In addition, Uribe
    implemented new laws giving the security forces increased power, and
    instituted a one-time tax to be used to increase the troop strength and
    capabilities of the Colombian military. He increasingly equated the
    guerrillas with drug traffickers and terrorists, and initiated a
    military campaign, called Plan Patriota, to recapture guerrilla-
    controlled territory'' (CRS, 2006, p. 3).
    ---------------------------------------------------------------------------
        (2) President Uribe succeeded in forging strong political support
    for his strategy, to the point that he could implement a special tax to
    help finance it. Due mostly to extraordinary levels of violence,
    President Calderon faces strong opposition to his policies, and the
    main political parties use the public security issue for partisan
    advantage. Mexico has one of the lowest rates of taxation in the
    Hemisphere and relies heavily on income from Pemex, the national
    petroleum company.
        (3) Human rights violations associated with PC were unacceptably
    high. A coalition of human rights organizations reports that during
    2000-2008, an estimated 20,000 persons were killed by paramilitary,
    guerrilla, and state forces, and more than 2 million were displaced.
    Most of the displaced took shelter in precarious camps around larger
    cities. Other reports put the number of internally displaced at more
    than 3 million, with another 500,000 Colombian refugees and asylum
    seekers outside the country (CRS, 2008b, p. 26). In all, ``Colombia
    continues to face the most serious human rights crisis in the
    Hemisphere, in a rapidly shifting panorama of violence'' (Haugaard,
    2008, p. 4). An estimated 230,000 Mexicans are currently displaced,
    about half to the United States.\10\ Clearly, effective human rights
    safeguards are needed for the MI. This is an area of vulnerability for
    the Mexican armed forces, one complicated by the government's weak
    public communications ability.
    ---------------------------------------------------------------------------
        \10\ ``La `guerra' ha expulsado de sus hogares a 230 mil
    personas,'' La Jornada, (on-line), March 26, 2011.
    ---------------------------------------------------------------------------
        (4) Over time, significant improvements were made in PC in the
    operational uses of intelligence, air mobility, communications and
    coordination, and organizational capacity (e.g., police special units)
    (GAO, 2008). Given the expanse and inaccessibility of much of
    Colombia's territory, air mobility is critical. US General (ret.) Barry
    R McCaffrey (2007, p. 5-6) emphasizes the key role of U.S. financial
    aid `` . . . in funding, training, maintaining, and managing a
    substantial increase (total rotary wing assets 260 aircraft [289 as of
    2011]) in the helicopter force available to the Colombian Police, the
    Army, the Air Force, the counter-drug forces, and the economic
    development community.'' The improved mobility was supplemented by the
    creation of effective units such as the army's Aviation Brigade and
    Counternarcotics Brigade, as well as new mobile units in both the army
    and national police (GAO 2008, p. 27-30). With 40 percent more
    territory to cover, Mexico's air mobility is much less robust, as is
    U.S. assistance for that purpose. To date the USG has delivered eight
    Bell 412 helicopters to the Mexican Air Force and six UH-60 Blackhawks
    to the Mexican Federal Police. Mexico's armed forces and federal police
    have 295 rotary wing assets, and more than half of these (146) are
    light helicopters unsuitable for air mobility tasks (IISS 2011, pp.
    367-368; 379-380).
        (5) With respect to the long-standing U.S. emphasis on supply-side
    strategies to reduce drug production and trafficking, there is a
    growing awareness that such supply-side, anti-drug approaches are
    necessarily limited. Most of the rationale for PC from the U.S.
    perspective was to curtail drug production and trafficking from
    Colombia. However, the Government Accountability Office (GAO 2008, p.
    17) reported bluntly: ``Plan Colombia's goal of reducing the
    cultivation, processing, and distribution of illegal narcotics by
    targeting coca cultivation was not achieved''. The vast amounts of
    resources invested in crop eradication and interdiction have little
    lasting effect on the price and purity of illegal drugs in U.S.
    markets. The innovation with MI is an explicit commitment to invest
    more resources in demand reduction. The commitment, however, was not
    reflected in budget requests submitted by either the Bush or Obama
    administration.
        (6) The United States is increasingly aware that military forces
    and approaches have uses and limitations with respect to anti-
    trafficking operations and that institution-building with respect to
    police and justice administration is a lengthy, expensive challenge.
    Thus, the MI grants priority to reform police and justice
    administration in the participating countries (CRS 2009, p. 16-19). My
    sense, however, is that U.S. policy-makers do not grasp the enormity of
    the challenges they confront. There are at least three priority issues.
    First, new approaches are needed that can combine military, police,
    intelligence, and socio-economic development capacities in a coherent
    strategy to deal with heavily armed, mobile, and politically astute
    trafficking organizations. Second, due largely to the incapacity and
    corruption of the civilian police, the armed forces necessarily take
    the lead role in anti-trafficking operations. Third, operational
    intelligence is the key instrument against trafficking organizations,
    and this capacity is weak Mexico.\11\
    ---------------------------------------------------------------------------
        \11\ By ``operational'' I mean various types of information that
    specific government agencies can use to act against criminal
    organizations or activities. Whatever the type of information,
    operational intelligence requires organizations that can: (1) Analyze
    useful information effectively, (2) communicate the information to the
    appropriate law enforcement agency in a timely fashion, and (3) protect
    themselves from penetration by criminal organizations through
    corruption or infiltration. Ideally, the organizations are accountable
    to democratic oversight, operating within a functioning legal
    framework.
    ---------------------------------------------------------------------------
        (7) Approaches that combine military, police, intelligence, and
    socio-economic development capacities might lead to institutional
    innovation of new types of national and transnational hybrid
    organizations (highly unlikely) or to much-improved inter-
    organizational coordination within and among the MI governments.\12\
    Organizations are profoundly resistant to change. Inter-agency
    coordination has been a recurring problem not just for the Mexican
    government.
    ---------------------------------------------------------------------------
        \12\ The U.S. Department of Homeland Security is a testament to the
    enormous difficulty of coordinating 22 agencies under one roof in one
    country. That said, the organizational experiment underway at the U.S.
    Southern Command (Miami, Florida) and its operational task force based
    in Key West bears close scrutiny. The task force brings together U.S.
    military, intelligence, and police agencies with those from several
    Caribbean and out-of-region countries. Southern Command authorities
    claim a number of successful joint operations against trafficking
    organizations. (Author interviews, December 2008).
    ---------------------------------------------------------------------------
        (8) Beyond inter-agency and inter-governmental coordination for the
    MI is the need to forge a regional security strategy that encompasses
    upper-tier South America, Central America, and the Caribbean. A
    strategy implies setting priorities among goals over some time period,
    then translating the goals into operations and tactics, and linking
    these to agency tasks and resources. Even a national strategy, as the
    Colombian government eventually developed, would be a signal
    accomplishment. Much more common are official documents that list
    national goals, or regional operations that target a particular set of
    problems.
                                   conclusion
        My sense is that useful policy learning has taken place over the
    past decade or so with respect to more effective ways to confront the
    violence and corruption associated with organized crime. The learning
    will be especially useful, because the challenges presented especially
    by transnational drug-trafficking organizations have grown more ominous
    over time. Mexico's reality in 2011 is quite different from that of
    2007, as criminal organizations have branched into many new types of
    both criminal and licit activities and have expanded their operations
    into new terrain, both in Mexico and other countries. Given the
    extraordinary levels of violence since 2006 it is doubtful that
    President Calderon's strategy of confrontation with criminal
    organizations will continue in the new administration that takes office
    in Mexico in December 2012. The Merida strategy will need to be
    redesigned and reinvigorated.

                    TABLE 1.--CONTEXTS AND CHARACTERISTICS OF PLAN COLOMBIA AND THE MERIDA INITIATIVE
    ----------------------------------------------------------------------------------------------------------------
                                                        Plan Colombia                      Merida Initiative
    ----------------------------------------------------------------------------------------------------------------
    Country context........................  Population 45 M*; 1.14 M. sq. km.;   Population 110 M; 1.97 M. sq. km.;
                                              GDP=US$250B* (2008); GDP/            GDP=US$1,142B (2008); GDP/
                                              cap=US$5,174; budget                 cap=US$10,747; budget
                                              expend=US$65B; unitary, with         expend=US$227B; federal, with 32
                                              significant decentralization; 32     states, 2,400 counties.
                                              departments, 1,100 counties.
    Problem profile........................  Major guerrilla insurgencies;        Minor regional rebellion; producer
                                              generalized violence; major          & major trafficker of illicit
                                              producer & trafficker of illicit     drugs; rapid upsurge in
                                              drugs; limited central government    trafficking violence; localized
                                              presence; corruption in police-      challenges to government
                                              justice system.                      presence; acute corruption in
                                                                                   police-justice system.
    Policy origins.........................  1999-2000; U.S. proactive in policy  2007-2008; U.S. reactive in policy
                                              design.                              design.
    Policy scope: goals & countries........  Internal security & anti-            Internal security; law enforcement
                                              trafficking; social justice;         & justice admin.; Primary=Mexico;
                                              development. Primary=Colombia;       secondary=Central America &
                                              secondary=Peru & Ecuador.            Caribbean.
    Policy targets.........................  Insurgency (FARC; ELN); self-        Counter-drug; counter-terror;
                                              defense organizations; drug crop     border security; public security
                                              eradication; criminal justice        & law enforcement; institution-
                                              system; economic development         building & rule of law.
                                              (e.g., crop substitution).
    Time commitment........................  2000-2006; succeeded by similar      Fiscal year 2008 through fiscal
                                              follow-on policies.                  year 2010, with indications of
                                                                                   extension.
    U.S. financial commitment..............  US$4.5B; U.S. currently seeks        US$1.5 B announced; approx. 10%
                                              reduced commitment.                  program costs;--appropriated in
                                                                                   2008; negotiations expected in
                                                                                   Congress in 2009.
    U.S. commitments for internal policy...  Reduce drug demand.................  ``Genuine partnership''; Reduce
                                                                                   drug demand; halt: weapons
                                                                                   trafficking, precursor chemicals,
                                                                                   money laundering.
    ----------------------------------------------------------------------------------------------------------------
    Note: * M = million; B = Billion.
    Sources: International Monetary Fund, World Economic Outlook Database, October 2008; CIA World Factbook https://
      www.cia.gov; CRS (2008); GAO (2008).

        Mr. McCaul. Well, thank you, Professor Bailey. Let me just
    say, that really is kind of the theme of this hearing--What is
    our strategy in Mexico? I think we saw from the previous panel
    we don't really know. So that was an excellent analysis and I
    look forward to the questions.
        Dr. Ainslie is now recognized.

      STATEMENT OF RICARDO C. AINSLIE, DEPARTMENT OF EDUCATIONAL
     PSYCHOLOGY, COLLEGE OF EDUCATION, THE UNIVERSITY OF TEXAS AT
                                 AUSTIN

        Mr. Ainslie. Thank you, Chairman McCaul and Ranking Member
    Keating. I think this is an issue of great National importance,
    and I am delighted to be part of your deliberations.
        My research has focused on two aspects of Mexico's war
    against the cartels. At one level I have looked at policy
    issues. I have interviewed many of the people who are
    formulating and implementing Mexico's strategy, including
    several members of President Calderon's security cabinet.
        Second, I have spent a great deal of time in Ciudad Juarez
    trying to understand the impact of the policies in Juarez but
    also the impact of the violence on that city and the community.
        I would like to highlight several points that I believe are
    key to understand what is taking place on our southern border,
    one with regard to Plan Merida. I think as a response to
    Mexico's crisis it is anemic at best.
        As you know, it calls for approximately $1.4 billion over
    the course of 3 years. That is less than we are currently
    spending in Afghanistan on any given week, and yet I think the
    stakes in Mexico and the relationship in Mexico and the United
    States are enormous and certainly of National security
    implications.
        Second, I don't think we are doing enough to control the
    flow of weapons into Mexico. Presently our reporting laws are
    actually stricter for handgun purchases than they are for
    automatic weapons. It is in our National interest to find
    mechanisms for responsible oversight of the sale of these kinds
    of weapons.
        Third, we need to raise our awareness about what is taking
    place in Mexico as part of a National dialogue and a National
    awareness. For example, according to the DEA there is
    documented evidence of cartel networks in 250 American cities,
    yet--this is an elaborate, sophisticated system of
    transportation, warehousing, as well as distribution--yet only
    two of the FBI's top most wanted people are people related to
    the drug war or drug cartels, and I think one of them was only
    recently added.
        So I think our focus needs to change. The profile that we
    give nationally to this issue needs to change.
        I want to mention also, briefly, the impact of the violence
    in Mexico on Mexico. It is an ever present backdrop and--to
    life in Mexico.
        The narcoterrorism in Mexico is extremely sophisticated,
    well thought out, strategically planned, and they are issues
    that everyone in Mexico, and not just in the directly affected
    communities, are living, breathing, and very aware of. I think
    it has contributed to a certain kind--some of the tensions that
    were described to kind of a National mindset that actually
    complicates effective engagement with these issues.
        The Mexican government has attempted to meet these
    challenges in a variety of ways. As you know, when President
    Calderon declared war against the cartels in December 2006 the
    fact is the Mexican government did not have the resources to
    carry this out. The president deployed some 45,000 army troops
    because really there were no law enforcement resources adequate
    to the task.
        Over the last 3 years Mexico has nearly doubled its
    expenditures for security and its federal police has grown from
    a force of 6,000 officers to 35,000 officers. There is an
    effort also--and this is part of an effort to create
    professionalized federal police that will become a model for
    state police forces. In addition, there is unprecedented
    cooperation between United States and Mexican law enforcement,
    as others have detailed.
        However, much work remains to be done, as evidenced by the
    continuing violence. An Achilles heel in the current Mexican
    strategy is the fact that the Mexican judicial system is
    presently dysfunctional despite a decade of efforts to
    modernize.
        Current estimates for the state of Chihuahua, for example,
    which is really the epicenter of the war, you could say, given
    the number of fatalities and so on--and it is supposed to be a
    model of judicial reform--currently the estimates are that only
    3 to 5 percent of crimes eventuate in conviction and prison
    terms. Improvements in law enforcement that are not accompanied
    by real judicial reform will mean that most cartel members
    continue to act with impunity, a fact which, in turn, has
    profound effects on the morale of the citizenry, et cetera.
        Last spring Mexico launched a model program, ``Todos Somos
    Juarez,'' We Are All Juarez, a strategy that was modeled under
    aspects of Plan Colombia, and for the first time the Mexican
    government started sending substantial resources toward Juarez
    that were related to try to repair the social fabric in Juarez,
    in particular, a city that had rampant unemployment, especially
    affected by the recession, the highest rates of dropout--
    student dropout rates in the country, very high rates of
    addictions, and so on.
        We have yet to be able to really analyze--those programs
    just started coming on in the summer. It is too soon to know
    the impact of these programs, but I think that they are part of
    the direction in which we need to go. I think the Mexican
    government has woken up to the idea that an exclusive law
    enforcement strategy is not going to be adequate to deal with
    the problems that are related to organized crime.
        Our Plan Mexico, if you will, will require continued
    support and in expanded relationship with Mexican law
    enforcement, but I think to succeed it will also--Mexico it
    will--we will need to support Mexico in getting real judicial
    reform that is really on-line and working.
        Finally, it is clear that a successful response to the
    Mexican crisis will require a significant commitment to helping
    Mexico restore and strengthen the social fabric, especially in
    those areas of the country that are most severely affected by
    the violence.
        So I look forward to any questions you have and discussion,
    and thank you again for putting together this hearing.
        [The statement of Mr. Ainslie follows:]
                     Prepared Statement of Ricardo Ainslie
                                 March 31, 2011
        Thank you Mr. Chairman for holding hearings on a question that is
    of the greatest National importance. The fates of the United States and
    Mexico are deeply entwined for a variety of economic and historical
    reasons, and we know that Mexico is presently facing a grave National
    crisis that we can no longer ignore.
        My research has focused on two aspects of Mexico's war against the
    drug cartels. (1) At a policy level, I have interviewed the people who
    are formulating and implementing Mexico's national strategy, including
    several members of President Calderon's security cabinet; and, (2) I
    have focused on Ciudad Juarez, the city that has suffered nearly 25% of
    the 34,000 cartel-related deaths over the last 3 years and where the
    Mexican government has at times deployed nearly 25% of its forces.
    Juarez is the epicenter of this war and its fate will tell us a great
    deal of what the outcome of this war will be which is why I have chosen
    to spend a great deal of time there.
        I would like to highlight several points that I believe are key to
    understanding what is taking place across from our Southern border.
        1. Plan Merida, as a response to the crisis that Mexico is facing,
    is anemic at best. As you know, it calls for approximately $1.4 billion
    in aid over the course of 3 years. That is less than we are presently
    spending in Afghanistan on any given week. If we want Mexico to
    succeed, we will need to do more and it is in our National interest
    that we do so.
        2. We are not doing enough to control the flow of weapons into
    Mexico. Presently our reporting laws are actually stricter with respect
    to handgun purchases than they are for purchases of automatic weapons.
    It is in our National interest to find mechanisms for the responsible
    oversight of the sale of automatic weapons.
        3. We need to raise awareness about what is taking place in Mexico
    and how it directly affects our National security. For example,
    according to the DEA there is documented evidence of cartel networks in
    some 230 American cities. This is an elaborate and sophisticated system
    of transportation, warehousing and distribution within the United
    States. Yet, only two on the FBI's 10 Most Wanted list (Eduardo Ravelo
    and Joe Luis Saenz) are individuals associated with Mexican drug
    cartels.
        4. Finally, the violence and its raw, often sadistic brutality,
    form an ever-present backdrop to daily life in Mexico. Cartels are
    adept at exploiting various media such as Youtube and the internet to
    call explicit attention to their capacity for violence. I think many of
    us here have failed to grasp the profound impact of this narco-
    terrorism on the lives of Mexican citizens throughout the country.
        The Mexican government has attempted to meet the complex challenges
    of the country's current crisis in a variety of ways. When President
    Calderon declared war against the cartels in December of 2006 the
    Mexican government lacked the resources to carry it out. Municipal and
    state police forces in the most affected regions of the country were
    already under the effective control of the cartels. The Mexican
    president deployed some 45,000 army troops because there were no law
    enforcement resources on which Mexico could rely. Over the last 3
    years, Mexico has nearly doubled expenditures for security, and its
    Federal Police has grown from a force of 6,000 officers to 35,000
    officers. There is an effort to create a professionalized Federal
    Police that will become the model for the state police forces. The
    Federal Police are increasingly replacing the Mexican army, such as
    happened in Ciudad Juarez in the spring of 2010. In addition, there
    appears to be unprecedented cooperation between U.S. and Mexican law
    enforcement. In recent years Mexico has also permitted the extradition
    of unprecedented numbers of cartel operatives to the United States.
        However, much work remains to be done, as evidenced by the
    continuing violence in Mexico. An Achilles heel of the current Mexican
    strategy is the fact that the Mexican judicial system is presently
    dysfunctional despite a decade of efforts at modernization. In 2009,
    for example, the year in which 2,607 people were executed in Ciudad
    Juarez, there was only one Federal prosecution and only 37 state
    prosecutions that resulted in prison sentences. Current estimates for
    the state of Chihuahua, which was supposed to be a model for judicial
    reform, are that only 3%-5% of crimes eventuate in actual convictions
    and prison terms. Improvements in law enforcement that are not
    accompanied by real judicial reform will mean that most cartel members
    will continue to act with impunity, a fact which, in turn, has profound
    effects on the morale of the citizenry.
        Last spring Mexico launched a program called ``Todos Somos
    Juarez,'' a strategy modeled after aspects of Plan Colombia in which,
    for the first time, significant federal resources are being directed
    toward programs that aim to repair the social fabric in Juarez. For
    example, Juarez has one of the highest rates for drug addiction in the
    country, the highest incidence of school dropouts, and rampant
    unemployment (especially since the recent economic recession). In one
    of the poorest sections of Juarez, where approximately 40 percent of
    the city's 1.3 million residents live and where cartel violence has
    been especially high, there was only a single high school until
    recently. The ``Todos Somos Juarez'' program represents an implicit
    understanding that an exclusively law enforcement-driven strategy has
    not been sufficient. It will take some time to know if this program is
    effective, or where it is effective and where it is not, although
    currently Juarez is averaging six executions a day, down from a year
    ago when they were averaging 10 and 11.
        Our ``Plan Mexico,'' if you will, will require continued support
    and an expanded relationship with Mexican law enforcement. To succeed
    it will also require real judicial reform in Mexico. Finally, it is
    clear that a successful response to the Mexican crisis will require a
    significant commitment to helping Mexico restore and strengthen the
    social fabric, especially in those areas of the country that have been
    most severely affected by the drug violence. At the same time, the
    recent assassination of ICE agent Jaime Zapata and the wounding of
    Victor Avila in San Luis Potosi, last year's killing of three people
    with ties to the U.S. Consulate in Ciudad Juarez, and the attempted
    grenade bombing of the U.S. Consulate in Monterrey in 2008 all attest
    to the likelihood that greater American efforts to assist Mexico may
    well come at a cost.

        Mr. McCaul. Thank you, Dr. Ainslie. Thank you for leaving
    sunny, warm Austin, Texas to cold and rainy Washington, DC.
    That was a noble effort on your part.
        Actually, I enjoyed all the testimony here today.
        I liked what you said, Dr. Ainslie, in terms of Plan
    Mexico. We had a strategy in Colombia. We had a plan, and
    arguably it was successful. But we don't seem to have a plan or
    a strategy for Mexico and I think that is the thrust of this
    hearing is: What should that plan be?
        Professor Bailey and Dr. Ainslie, you two are really
    experts on, you know, what we did in Colombia, best practices,
    lessons learned.
        I understand, Professor Bailey, the politics are what they
    are. Taking that out of the equation, which may be hard to do,
    what are the lessons learned from Colombia that we could apply
    to Mexico to win this war against the drug cartels?
        Mr. Bailey. I think important in the Colombian case is the
    organizational arrangements that we talked about first. The
    critical factor of political will--at some point leadership
    steps forward that has a clear idea of how to proceed and is
    able to get a backing to do that.
        At the institutional level, the reform of the Colombian
    police. In the whole hemisphere there really only are two or
    three police forces that have good credibility. The Chileans
    are probably the most credible, but the Colombians have
    improved their police enormously.
        So reform of the police, and then there were technical
    things done to improve intelligence so that the Colombian--and
    then organizational reform within the Colombian police and the
    army that creates smaller units that could operate more
    effectively. It is the combination of that backing and the
    leadership with these changes taking place internally in the
    army and in the police and the mobility and the intelligence
    that allowed them to target different areas of the country to
    operate. First take, then hold, then consolidate.
        The strategy was to involve more about social services,
    education, justice reform. So it was a way of thinking more
    holistically and thinking more sequentially.
        The Colombians didn't start with that, by the way, Mr.
    Chairman. They evolved into that way of thinking over time.
        So I think it is the combination of the politics, and then
    the technical things, and then the decision to move
    sequentially in different areas that really makes the
    difference.
        Mr. McCaul. I think the situation has become so dire down
    there and such a crisis that it is my sincere hope the politics
    will change on this. After all, I think it is in Mexico's best
    interest. Certainly as our neighbor to the south and friend it
    is in our best interest as well.
        So, Dr. Ainslie, do you have any comments on that?
        Mr. Ainslie. Well, I would only add that I think the
    Mexican political situation is extremely complex, especially
    right now with the election coming up. I think lots of the
    reforms are beginning to be gummed up in this process,
    especially the efforts at judicial reform, again, which I think
    are indispensible to a successful solution to the issue of
    organized crime violence in Mexico. Those reforms are really
    gummed up and there is a series of reasons related to that.
        Second, I think that--I think there is no question that
    there is the will in Mexico, and certainly I think the
    collaborative efforts reflect that. The complex social
    processes have helped create a breeding ground for cartel
    operatives and so on, it is a very difficult and in some ways
    intransigent issue.
        But on this side, of course, there are some of the things
    that I mentioned a few minutes ago: Better control of weapons
    going into Mexico, our consumption issues, raising this as an
    issue that we are more aware of here as a problem that really
    does affect us. It is not just over there, but it is really
    living in our communities now.
        Mr. McCaul. Well, you know, I know that Colombia was also--
    in addition to everything you stated, they had joint
    intelligence, joint military operation. I have heard accounts
    down in Mexico of having the heads of these cartels in their
    sights but not willing to go in to take them out because they
    are outgunned. I mean, the security issue.
        I think our country has something to offer in that respect,
    whether it be our intelligence or our special operations
    forces, if we could get around the politics and they had the
    political will to do it we could actually make a lot of
    progress.
        So, Mr. Adler, I just wanted to ask you about--you know, we
    talk about agent protection down there and I am very, very
    concerned about the safety of our agents. What would you
    propose and recommend to the Justice Department, to Homeland
    Security Department, as to what we need to do to better protect
    our agents down there?
        Mr. Adler. First and foremost, we don't send soldiers into
    combat unarmed. One of the things we need to do--and I
    understand it all; I am sort of a working class law
    enforcement-minded person. I understand the politics of their
    being a sovereign nation and I understand the history and the
    ramifications behind this--and the sensitivity behind this
    issue.
        However, I always prioritize officer safety. In doing that
    I can't impress upon the Department of State--or having the
    Justice Department help me impress upon the Department of
    State--the need to exert all leverage necessary to ensure that
    our officers, our agents have the means to protect and defend
    themselves. That includes what I spoke about earlier, which is
    the diplomatic protection as well. It gives you peace of mind,
    again, know that while you endure the risk--which we all do--we
    know with confidence that if the ultimate sacrifice is made by
    one of our agents there will be follow-through by way of
    justice.
        But what else can we do? Well, it comes down to those
    essential points. I mean, I know that we can only get into it
    so far in this particular hearing, but it really comes down to
    having the equipment, in a general sense, which includes not
    just, you know, the means to defend yourself. Obviously there
    are other sorts of equipment that could benefit us as well.
        You know, we talked about working closely with our Mexican
    partners and counterparts, raising the level of sophistication
    and their approach to law enforcement, which involves
    electronic monitoring and so forth. So having the means to
    better equip our agents and working with our Mexican
    counterparts as well as the means to defend themselves.
        This comes down to negotiation. We can't change their laws,
    but we can negotiate the urgency and necessity of making sure
    our agents can protect and defend themselves.
        Mr. McCaul. I agree. I think the State Department--and we
    have had briefings on this, but I think we need greater
    clarification as to how they can defend themselves down there.
    I think that is a very--as you know--I think you have received
    the briefing as well--it is very vague; it is not clear. I
    think the clarification is necessary.
        Just a last question, Mr. Adler. There has been a
    discussion about whether it would be in the National security
    interest to designate the cartels as foreign terrorist
    organizations. Do you agree with that assessment?
        Mr. Adler. Absolutely. Absolutely. As I said earlier, you
    know, actions speak louder than words.
        You know, we have got to get out of this mindset where we
    are only dealing with a phase fanatic that screams--you know,
    is a suicide bomber screaming, ``Allahu akbar.'' We have got to
    get out of that.
        You know, a terrorist, by virtue of what they do--and they
    wreak havoc. As I said before, referring to Pablo Escobar, they
    are drawing upon those terrorist tactics to accomplish their
    objectives.
        We need to understand that. We need to call it for what it
    is. We need to respond accordingly. I completely support you on
    that.
        Mr. McCaul. Thank you. I believe we need all the tools in
    the toolbox, and designating them as foreign terrorist
    organizations would give us that.
        So I see my time is expired. I now yield time to the
    Ranking Member, Mr. Keating.
        Mr. Keating. Thank you, Mr. Chairman.
        You know, I think collectively your testimony really
    brought home the fact that this is not a simplistic problem; it
    is a dynamic set of problems.
        Mr. Adler, rest assured, I think I speak for the whole
    committee that we want to protect our law enforcement agents
    first and foremost because that is at a premium--their safety.
    But also, I think it is important to remember that Mr. Alvarez
    said, should we not do everything we can we won't get the
    caliber of officers to go down there and put their lives on the
    line for this kind of service.
        So we owe that in a personal sense to their families and
    their own livelihood, but also from a practical standpoint. If
    we are going to be effective we have to be able to do that.
        I just, you know, I agree with Dr. Shirk in everything
    except one thing. If I could have just a brief answer, because
    while I agreed with almost everything you said, looking at a
    larger scope of issues and the complementary criminal activity
    that goes with this, I don't see the benefit of legalizing
    drugs.
        I think that is putting up the white flag and making a
    problem worse, and I have always felt that. But what drugs do
    you--did you allude to when you were talking about legalizing
    drugs?
        Mr. Shirk. Respectfully, Mr. Keating, I think we don't see
    the benefits because we haven't analyzed the question. I think
    when we look at 46 percent of California voters who recently
    favored the idea of legalizing marijuana, and a growing
    proportion of the National population who believes that that
    would be an effective measure, I think we should start to
    listen and start to ask that question. It has been a taboo
    question in U.S. politics for far too long.
        But when we consider that 98 percent of the bulk materials
    seized at our border, in terms of illicit drugs, are marijuana,
    and that $1 billion to $2 billion--that is just the bulk, it is
    the mass, but it takes up the majority of the----
        Mr. Keating. Is it marijuana, sir?
        Mr. Shirk. It is marijuana.
        Mr. Keating. That is what you want--okay. A couple of
    things and then I have a question for Mr. Bailey.
        No. 1, if you really think legalizing marijuana is going to
    stop the drug wars in Mexico then it is a different hearing
    than I was hearing today. But second, as a district attorney
    dealing deeply in prevention, it is a terrible message to send
    to our young people.
        That is just a difference of opinion. We will agree to
    disagree.
        Mr. Bailey, you really struck upon the dynamics of the
    problem, I think. You know, I had the ability years ago to deal
    with people in California that dealt with gang issues, drug
    issues. There are a lot of similarities, and it is important to
    look at things comprehensively.
        In fact, I found out from those people having a stake in
    the neighborhood is so important, and you were alluding to
    that, to saying that there is not a political will. I don't
    know if it is just--it is simplified as politics. I think it is
    just getting a stake in the neighborhood, and I think the
    economic prosperity in Colombia had a great deal to do with
    putting that political will together because it started to call
    them--cost them dollars and cents in a large sense.
        Now, what can we do, given those constraints--the different
    types of government, the different types of police force, the
    different types of judiciary, all problems. But specifically,
    it is my understanding that Mexican authorities are getting
    training from Colombia, and is that being effective, at least
    in that narrow sense?
        Mr. Bailey. I think yes, it is. The Colombians have had a
    close connection with the Mexican government from the outset of
    the Calderon government and I think there has been a lot of
    sharing going on, a lot of learning, especially about this
    business of operational intelligence--how one puts this
    together and how one uses it.
        Well, the Mexicans face a real problem of
    counterintelligence in that their police agencies don't really
    protect their information very well and other agencies that are
    set up to do that don't protect things very well. I liked your
    question of: What can the United States do?
        I have had this opinion, and it is a little bit of an
    outsider opinion, is if there were a pilot project that
    actually worked of showing how a comprehensive policy could
    function in a given area--Juarez is supposed to be going
    through this process right now and we need to evaluate what
    that has done, but watching these issues in Mexico is a little
    like watching climate change. People don't know quite where to
    cut into it. How do you stop it? Where do you start your
    process?
        It may be that a pilot project or a couple of pilot
    projects to show what works could really deliver a lot of
    benefit.
        Mr. Keating. That is interesting. I think it is also
    interesting in light of the fact that the areas that are most
    affected within Mexico are----
        Mr. Bailey. On the border.
        Mr. Keating [continuing]. Are on the border and they are
    discreet. It is just not widespread throughout the whole
    country.
        Mr. Bailey. Correct.
        Mr. Keating. So I think I found that very interesting.
        I will, in the sake of time for the rest of the panelists,
    yield back my time.
        Mr. McCaul. Thank you.
        Chair now recognizes Mr. Marino for 5 minutes.
        Mr. Marino. Chairman, if I could defer my time--did my
    colleague speak yet? If he is ready I would prefer to wait and
    hear what he has to say, and it will bring me more abreast of
    what is going on.
        Mr. McCaul. That is very generous.
        Chair now recognizes the gentleman from Texas, Mr. Cuellar.
        Mr. Cuellar. I will buy you lunch right after this----
        [Laughter.]
        Mr. Cuellar. Thank you, Mr. Marino. I appreciate the work
    that you have done as a U.S. attorney also. Appreciate that.
        You are right. There are certain areas of Mexico where the
    violence is very high. Just last--I think it was last December
    I took my family off to Mexico for vacation. I would not do it
    across the border, but in certain areas it is considered to be
    safe there. But that is why when you look at Mexico it is--you
    have got to look at this very carefully.
        Let me first of all, Mr. Chairman, thank you. You have two
    of my former schools that are represented--Georgetown and UT
    also, so I appreciate that. I thank you that.
        Let me ask this question, and I appreciate all of the
    testimony. I have got three brothers who are peace officers so
    I really appreciate what you do. I listen to my brothers and I
    just do what--when it comes to law enforcement.
        But let me ask you all this question: What do you think the
    committee should be looking at? Because you are right--the
    Chairman is right--we ought to look at the strategy.
        You know, when you look at the strategy, back some years
    ago when I filed a piece of legislation before President Bush
    and Fox got into this Plan Merida I started, I had a draft, and
    I called it Plan Mexico. I spoke to the Mexican ambassador; he
    got a little excited also because he didn't want to have that
    connection with Colombia--again, a lot of sensitivities.
        But one area that I had there that President Bush and--
    which is a good friend of ours from Texas, and President Fox
    didn't have one part there, was the--I guess it would have to
    do with attention, because liberals sometimes have a problem
    with law enforcement; conservatives sometimes have a problem
    with some of the social programs.
        I think one of the things that we should be looking at is
    how can we help Mexico with areas like microlending, and jobs
    creation? If we invest a little bit of money we would stop a
    lot of those people from coming over if we talk about
    undocumented aliens.
        At that time, when we talked about Plan Merida, the United
    States was giving Israel--and I support Israel--about $1
    billion; Egypt was getting about $800 million; Colombia was
    getting over $500 million. Peru was getting more than Mexico.
        I think at that time Mexico was getting $36 million. If we
    have a 2,000-mile border with them every day there is about $1
    billion of trade between the United States and Mexico.
    Connections are so big there.
        You know, I thought it was important that we spend a little
    emphasis there in Mexico because we have a 2,000-mile border
    with, you know, with the Republic of Mexico.
        So I want to ask you, what would be your suggestions? I
    mean, I am one of those that I wish we could--you know, I know
    we are in a deficit situation right now. I understand that.
        But a little bit of investment, if we would kind of realign
    some of those dollars out there and help Mexico we could create
    jobs, take some of those young kids that you talked about, Dr.
    Shirk, that don't have jobs so it is easy for the gangs or the
    drug cartels to say, ``Look, we will pay you a couple hundred
    pesos a day, get you a new car, get you a gun, get you this,''
    and all of a sudden they feel empowered and they go into those
    drug organizations.
        So what would you all suggest that we ought to look at as
    part of the strategy the Chairman has been talking about? What
    do you suggest we ought to do? You have got a minute and a half
    to answer that question.
        Mr. Shirk. If I may, we have not invested the same amount
    of resources in social and economic development programs that
    we did in the Merida Initiative.
        Mr. Cuellar. Right.
        Mr. Shirk. We spend three times as much on aid for
    Colombia, which has one third the population of Mexico, and it
    strikes me that if we are going to really strengthen the Merida
    Initiative to do what we have done in Colombia that is the area
    where there is the greatest room for improvement.
        Mr. Cuellar. Thank you.
        Dr. Ainslie.
        Mr. Ainslie. If I could add to that----
        Mr. Cuellar. By the way, ``Go Longhorns.''
        Mr. Ainslie. Thank you very much. Yes.
        Absolutely, this is a critical issue for us. $1.4 billion
    over 3 years with no social programming involved is really very
    narrow; it is very shortsighted.
        This affects the United States in so many ways. I mean, if
    these conditions--a lot of the migration out of Mexico is also
    violence-related. So if we are concerned about undocumented
    workers, for example, this is one dimension to it. It is not
    only the economics; it is also the violence.
        People in communities all over Mexico are worried, even if
    their particular communities are not directly affected like--
    one quarter of the businesses in Ciudad Juarez have closed.
        Mr. Cuellar. Absolutely. Imagine if that would happen to
    Austin, or Laredo, or whatever your town--if one quarter of
    your businesses were shut down because of violence imagine what
    would happen to the economics. That is what has happened in
    Ciudad Juarez.
        Mr. Ainslie. Absolutely. Five thousand businesses closed;
    80,000 people lost their jobs in 2009. It is almost a perfect
    storm of economic violent considerations, and that is something
    that is in our best interest to address and support.
        Mr. Bailey. On the optimistic side, the timing is good, Mr.
    Cuellar, because I think the Mexican business community now is
    beginning to focus on these issues and becoming much more
    responsive to ideas, and partnership ideas between government
    and the private sector would be very important.
        Also, as you know, over many years the Mexicans have been
    reluctant to have U.S. involvement in social development
    programs, and I think that is changing as well.
        Mr. Cuellar. Right.
        Mr. Bailey. So I don't have a precise idea for you, but I
    think the timing is such that these kinds of ideas now can have
    more effects than they could, say, 5 years ago.
        Mr. Cuellar. Thank you.
        Anything.
        Mr. Adler.
        Mr. Adler. Well, from my law enforcement perspective I will
    say again, just to reiterate, that I would ask this committee,
    in terms of what you could do on this issue, is to stay on top
    of the State Department. It was obviously addressed before that
    perhaps their strategy needs to be better defines as well as my
    appeal to you to have them negotiate those protections that our
    agents absolutely deserve.
        I will also say, on our end of the spectrum, you know, I
    noticed there was a question earlier about wishing somebody
    from ATF was here. This obviously is the Homeland Security
    Committee, but our approach--what we can control--needs to be
    integrated and sustained.
        What that means is our DHS assets and our DOJ assets have
    to work together. We can't just have one go off after the gun
    issue and one go after the narco issue. No. One team, one
    fight.
        So I would stress that this committee call the respective
    leaders of those cabinet agencies together and say, ``What is
    your unified mission and approach to dealing with this
    situation?''
        Mr. McCaul. That is an excellent point, and I will follow
    up on that, because so many times we find it is the turf
    battles and the breakdown between agencies not working together
    that cause so many of the problems, whether not having a
    strategy or not having the relevant agencies working together
    in a cohesive fashion, I think is a very important point, and
    we will follow up on that.
        Chair now recognizes Mr. Marino.
        Mr. Marino. Thank you, Chairman.
        Mr. Adler, I couldn't agree with you more, specifically
    because--again, I sound like my father now--when I was a U.S.
    attorney or when I did this ATF was with us constantly when we
    were doing DEA work because guns and illegal drugs are like
    hand and glove. We had a great relationship--a good working
    relationship with ATF, along with DEA and FBI and ICE.
        If we can do that in Northern Pennsylvania then we
    certainly should be able to do it on the Mexican border and
    across the country.
        But again, my colleague brings up a great point, and I have
    just an analogy. I was just in the Middle East visiting our
    troops in Iraq and Afghanistan, and there is a strange parallel
    here. But if you think about it, the terrorists--the Taliban,
    al-Qaeda--they recruit people who are poor, people who are
    unemployed, people who have no income; and that is the same
    thing that is happening in Mexico with the narcoterrorists.
    They are taking our young people and handing them a few
    dollars.
        I had this happen more than once when I was district
    attorney of Willamsport, Pennsylvania, 16, 17, 18-year-old kids
    that we would pick up in raids along with, of course, adults,
    and I would ask them, ``How did you get involved in this? Why
    do you want to get involved in this?'' Well, the dealer bought
    this 14-year-old a brand new pair of $150 sneakers and a cell
    phone and he got to hold his gun for him.
        Now, these are the issues that we are dealing with. We have
    to approach this from the aspect of education--certainly
    education--but also using our limited resources wisely to
    create infrastructures that will create jobs.
        But in your statement--and I had to leave a little early to
    talk to some constituents, and they did say to me--I told them
    I was in a Homeland Security meeting and they said, ``Any money
    that you save on cutting, why don't we divert that over to
    fighting the war on drugs?'' I said, ``I am going to make that
    statement and tell them that a constituent from my 10th
    Congressional district made that recommendation and I agree.''
        There is absolutely no reason why our agents, no matter who
    they are, where they are at, should not be properly equipped
    and properly protected. You know something--you said we needed
    a risk assessment. As far as I am concerned we don't need a
    risk assessment because it is downright dangerous work and
    there is no other work more dangerous than dealing with drug
    dealers and the narcoterrorists down on the border.
        So I have heard what you had to say. I don't have a
    question. I am a little bit of a soapbox here, preaching, but
    certainly we will watch this very closely. We will do
    everything in our power to see that law enforcement has what
    they need--the personnel, the resources, the training--because
    it is critically important to the youth of this country and to
    Mexico, our colleagues--our allies--that we not let these
    narcoterrorists take over.
        With that, I pledge my support and I yield back my time.
    Thank you.
        Mr. McCaul. Thank you, Mr. Marino. You are learning quickly
    as a freshman, because a lot of Members do preach a lot and
    they don't ask questions.
        But I want to thank the panelists.
        My takeaway--and I will defer to the Ranking Member as well
    if he would like to make some closing comments as well--is, you
    know, as Congressman Cuellar points out, we are spending so
    much money, so many resources on other countries in Latin
    America, Libya halfway across the world, and yet we are not
    paying any attention to Mexico in terms of focusing on Mexico
    with our resources. It is a tough budgetary time but this is
    the area that I think we need to step up to the plate, and we
    can't allow Mexico to become a failed state.
        I really like the idea of this--the idea of this pilot
    project that you mentioned, Dr. Ainslie and Professor Bailey. I
    would like you to follow up with this committee on the Juarez
    experiment, if you will, as to how that is working, because you
    are taking the most violent city, arguably in the world, and
    6,000 people have been killed there, and if you can turn that
    around that seems to me it would be the model to emulate across
    the most dangerous parts of Mexico.
        So with that, I don't know if the Ranking Member has some
    closing comments?
        Mr. Keating. Well, I would just like to again thank you,
    and I would like to say this, that I hope everyone has learned
    that this is a complicated and dynamic problem. It is one that
    I think can't be looked at in a narrow prism, and it is one
    that I think a lot of the testimony reflected that.
        I don't think you can look at--and in this panel here there
    are three prosecutors sitting here, but you cannot look at the
    problem one-dimensionally. You can't look at the crimes one-
    dimensionally.
        The drug crimes go hand-in-hand with guns, currency
    violations, and they go hand-in-hand with an environment where
    people do not have a stake in the community. I go back to that
    because I learned from our own domestic experience, studying
    that in California, among other areas, where once that is
    established--and my colleague brought up very strongly the
    point that we can do more in those areas to create not just
    better criminal and political approach, but also an economic
    approach where we can take back neighborhoods, or allow people
    in Mexico to take back their own neighborhoods.
        We should do that as well. It is in our own security
    interest. It is in our own self interest. It is in our own
    enforcement interest, because things aren't going to get safer
    unless we approach it this way.
        So I would like to thank you, and I think what you brought
    to this, you know, this hearing, in terms of the panel, really
    expressed the breadth of the problem, and I appreciate that.
        Mr. McCaul. Let me thank the witnesses for your excellent
    testimony here today. Members may have additional questions
    that you can respond to in writing.
        The hearing record will be open for 10 days, and without
    objection, the subcommittee stands adjourned.
        [Whereupon, at 12:59 p.m., the subcommittee was adjourned.]

                                A P P E N D I X

                                  ----------

       Questions From Ranking Member William R. Keating for Luis Alvarez
        Question 1. Given ICE's mission in Mexico, its agents and personnel
    are in a position to become intimately familiar with the inner-workings
    of Mexican DTOs. Given this familiarity, would you agree that there are
    vast differences between DTOs--who are in the business of making money,
    at any cost--and terrorist organizations that are more ideological-
    based? Please explain those differences.
        Answer. While there might be notable distinctions in the motivation
    behind the criminal activity or either type of organization, ICE
    pursues suspected criminals regardless of this motivation. As for
    definitional differences, the Secretary of State in accordance with
    section 219 of the Immigration and Nationality Act, as amended, may
    designate foreign organizations as Foreign Terrorist Organizations.
    Accordingly, ICE respectfully defers to the U.S. Department of State
    for any discussion on the definitional aspects of terrorist
    organizations.
        Question 2. It is undisputed that drugs come across the border from
    Mexico into the United States. However, it is also true that a great
    deal of our legitimate commerce flows across the border on a daily
    basis. In fact, Mexico is our third-largest trading partner. Please
    explain how ICE and other law enforcement agencies operating on the
    border balance the need to prevent illicit goods from entering our
    country while allowing licit goods to flow?
        Answer. Although the flow of goods into the United States is
    primarily an operational area of the Department of Homeland Security's
    U.S. Customs and Border Protection (CBP), U.S. Immigration and Customs
    Enforcement (ICE) is a functional partner with CBP and all other
    Federal, State, Tribal, and local agencies and commercial business
    enterprises operating in the region along the United States-Mexico
    border. Enforcement through investigation is necessary to protect the
    United States' trade, business, and public safety interests from being
    put at a competitive disadvantage by criminal organizations that seek
    to exploit the volume and types of legitimate commerce to mask their
    illicit activities. ICE accomplishes this vital mission by performing
    intelligence-driven investigations and applying tactics that minimize
    the impact of these investigations on the flow of commerce whenever
    possible. ICE respectfully defers to CBP on its operations in this
    regard.
        CBP narcotics interdiction strategies are designed to be flexible
    so that they can successfully counter the constantly shifting narcotics
    threat at and between the POEs, as well as in the source and transit
    zones.
        CBP uses these resources to develop and implement security programs
    that safeguard legitimate trade from being used to smuggle implements
    of terror and other contraband, including narcotics into the United
    States. Under the Customs-Trade Partnership Against Terrorism (C-TPAT)
    program, CBP works closely with importers, carriers, brokers, freight
    forwarders, and other industry sectors to develop a seamless, security-
    conscious trade environment resistant to the threat of international
    terrorism. C-TPAT provides the business community and government a
    venue to exchange ideas, information, and best practices in an on-going
    effort to create a secure supply chain, from the factory floor to the
    U.S. POE. Under C-TPAT, Americas Counter Smuggling Initiative, the
    Carrier Initiative Program, and the Business Anti-Smuggling Initiative
    remain instrumental in expanding CBP's counternarcotics security
    programs with trade groups and governments throughout the Caribbean,
    Central and South America, and Mexico.
        CBP's Field Operations Intelligence Program provides support to CBP
    inspection and border enforcement personnel in disrupting the flow of
    drugs through the collection and analysis of all-source information and
    dissemination of intelligence to the appropriate components. In
    addition, CBP interdicts undeclared bulk currency which fuels
    terrorism, narcotics trafficking, and criminal activities worldwide.
    CBP officers perform Buckstop Operations, which involves screening
    outbound travelers and their personal effects. CBP also supports
    Cashnet Operations that focus on interdicting bulk currency exported in
    cargo shipments. CBP uses mobile X-ray vans and specially-trained
    currency canine teams to efficiently target individuals, personal
    effects, conveyances, and cargo acting as vehicles for the illicit
    export of undeclared currency. CBP also supports ACTT, which
    contributes to CBP's outbound operations directed at detecting and
    interdicting bulk currency and illicit funds exports.
        Question 3. What percentage of the weapons recovered in Mexico,
    including untraceable weapons, would you say are smuggled through the
    border between the United States and Mexico?
        Answer. U.S. Immigration and Customs Enforcement (ICE) respectfully
    defers to the Bureau of Alcohol, Tobacco, Firearms, and Explosives for
    discussion of the percentage of weapons recovered being traced to the
    United States.
        ICE remains committed to its on-going partnership with the
    Government of Mexico and our other U.S. law enforcement partners to
    develop a complete picture of weapons smuggling activities. ICE
    continues to employ a comprehensive, collaborative strategy to address
    this threat via the Border Enforcement Security Taskforce (BEST) and
    other cooperative efforts.
        Question 4. Many suggest that the violence in Mexico is fueled in
    part by the guns and currency smuggled into Mexico from the United
    States. In fact, reports indicate that nearly 90% of all firearms used
    by Mexican criminals and drug cartels come from the United States.
        Do ICE and CBP officials have the necessary legal authority to: (1)
    Search people and vehicles leaving the United States and (2) to
    investigate weapons smuggling cases?
        What can be done to improve these efforts?
        Answer. U.S. Immigration and Customs Enforcement (ICE), together
    with its sister agency, U.S. Customs and Border Protection (CBP), have
    plenary authority under Title 19 of the United States Code to conduct
    inspections of persons, conveyances, and merchandise that have a nexus
    with the U.S. border in order to enforce all Federal laws pertaining to
    importation, exportation, and immigration. CBP focuses on the
    inspection while ICE focuses on the investigations relating to these
    matters.
        In the course of conducting its law enforcement actions, ICE and
    CBP use this broad authority to search people and vehicles entering and
    exiting the United States. When CBP discovers illicit merchandise as
    part of its inspections, CBP detains or seizes such merchandise, and
    the persons responsible for such merchandise, and refers such matters
    to ICE for further investigation and prosecution. In addition to the
    broad authorities in Title 19, ICE also uses numerous statutes in the
    criminal code, Title 18, specifically relating to smuggling into and
    out of the United States, namely, 18 U.S.C. 545 and 554. Further
    authorities are the export laws (Titles 22 and 50) and 18 U.S.C.
    922(g)(5), which ICE uses for both export and alien enforcement
    efforts.
        These authorities, coupled with ICE's broad employment of a full
    range of investigative techniques, enable the agency to investigate
    weapons smuggling cases. ICE continues to collaborate with CBP, and
    with Federal, State, local, Tribal, and foreign law enforcement
    partners to disrupt and dismantle transnational criminal organizations
    via the Border Enforcement Security Taskforce (BEST) and other
    cooperative efforts.
        In January 2006, DHS adopted the BEST initiative to leverage
    Federal, State, local, Tribal, and foreign law enforcement and
    intelligence resources to identify, disrupt, and dismantle
    organizations that seek to exploit vulnerabilities in the border and
    threaten the overall safety and security of the American public. BESTs
    are designed to increase information sharing and collaboration among
    the participating agencies, focusing on the identification,
    prioritization, and investigation of emerging or existing threats.
        Question 5. ``Plan Colombia'' was developed by the Colombian
    government to eliminate drug trafficking, and promote economic and
    social development. According to GAO, drug reduction goals were not
    met, despite the fact that the U.S. Government provided nearly $4.9
    billion to the Colombian military and national police, and GAO
    ultimately deemed Plan Colombia a ``failure'' from the United States'
    perspective. Would you please elaborate on Plan Colombia, the United
    States' role in this program and how the challenges faced by the
    Colombian government is vastly different from what is occurring in
    Mexico?
        Answer. U.S. Immigration and Customs Enforcement respectfully
    defers to the U.S. Department of State for discussion of the success of
    Plan Colombia and the U.S. Government's (USG) role in the program.
    However, it should be noted that since the beginning of Plan Colombia
    in 1999, our contribution to which has garnered bipartisan support,
    though representing only a small portion of the greater sacrifices
    borne by the Colombia people, that country has seen a reduction of 92
    percent in kidnappings, 45 percent in homicides, and 71 percent in
    terrorist attacks. Moreover, cocaine production potential has fallen 46
    percent, and the area under coca cultivation decreased 19.4 percent.
    USG programs have provided training, equipment, and funding to the
    Government of Colombia, civil society, international organizations, and
    non-governmental organizations in the areas of counternarcotics and
    counterterrorism, alternative development, law enforcement,
    institutional strengthening, judicial reform, human and labor rights,
    humanitarian assistance for displaced persons and victims of the war,
    local governance, conflict management and peace promotion,
    demobilization and reintegration of ex-combatants, including child
    soldiers, humanitarian de-mining, and preservation of the environment.
        In Mexico, the U.S. Department of Homeland Security and its
    components continue to support the Merida Initiative, which has
    significantly contributed to greater collaboration between the United
    States and Mexico on a wide range of issues.
        Question 6. In April 2009, the Obama administration designated
    three of Mexico's most dangerous DTOs--the Sinaloa Cartel, Los Zetas,
    and La Familia Michoacana--as Kingpins under the Foreign Narcotics
    Kingpin Designation Act--otherwise known as the Kingpin Act. Does the
    Kingpin Act give our law enforcement agencies the authorities they need
    to go after Mexican DTOs? Are the penalties under the Kingpin Act rule
    out the need to try to make DTOs fit into the Foreign Terrorist
    Organization category?
        Answer. The Kingpin Act is administered by the Department of the
    Treasury's Office of Foreign Assets Control. Pursuant to the Kingpin
    Act, the President, in consultation with the interagency, is required
    to submit to Congress an annual list identifying significant foreign
    narcotics traffickers by or before June 1. The Kingpin Act also applies
    to foreign persons who are determined to be: (1) Materially assisting
    in, or providing financial or technological support for or to, or
    providing goods or services in support of, the international narcotics
    trafficking activities of a person named pursuant to the Kingpin Act;
    (2) owned, controlled, directed by, or acting for or on behalf of, a
    person named pursuant to the Kingpin Act; or (3) playing a significant
    role in international narcotics trafficking. The Kingpin Act blocks
    assets of named persons and prohibits U.S. persons from conducting
    financial or commercial transactions with them. Corporate criminal
    penalties for violations of the Kingpin Act range up to $10 million;
    individual penalties range up to $5 million and 30 years in prison.
    Civil penalties of up to $1.075 million may also be imposed
    administratively. There is no relationship between the penalties under
    the Act and the definition of a Foreign Terrorist Organization. Since
    the Kingpin Act was enacted, the President has identified 40
    significant Mexican drug traffickers, and OFAC has designated 304
    individuals and 182 entities tied to Mexican traffickers. ICE
    respectfully defers to the Department of Treasury for comment as to the
    sufficiency of the Kingpin Act.
     Questions From Ranking Member William R. Keating for Brian A. Nichols
        Question 1. Last year Secretary Clinton referred to a Plan Colombia
    model for Mexico and it caused an outcry among the members of the
    Mexican Congress and Secretary Patricia Espinosa--Secretary Clinton's
    counterpart--stated she disagreed. Given the Mexican response to this
    statement, isn't it bad for our continued relations to consider Plan
    Colombia as a comparable solution for addressing Mexico's violent
    activity?
        Answer. We respect the Calderon administration for its commitment
    to confront the narco-traffickers directly, and we stand by Mexico as a
    partner in its fight to guarantee the rule of law for all Mexican
    citizens. The assistance that the United States provides to Mexico
    under the Merida Initiative is part of an overall security strategy
    developed and led by the government of Mexico (GOM) under President
    Calderon's leadership. The GOM is integrally involved in Merida
    Initiative planning and execution at every stage, which is essential to
    demonstrate and reinforce Mexico's ownership of the programs,
    initiatives, and reforms. The $1.5 billion that the United States is
    providing through the Merida Initiative supplements the extensive
    resources that the Mexican government has dedicated (e.g.,
    approximately $10 billion in 2011 alone) to security-related issues.
        While Mexico confronts a significantly different situation than
    Colombia did, some very important lessons learned about combating TCOs
    in Colombia are applicable. For example, one such lesson learned was
    the critical importance of air mobility to respond rapidly and
    forcefully to TCO activity. Under the Merida Initiative, we placed an
    early emphasis on providing Mexico with aircraft to enable them to
    effectively confront the TCOs; and in December 2010, we witnessed the
    results of this emphasis when the Mexican Federal Police (SSP) killed
    the head of the La Familia Michoacana TCO in a large operation that
    utilized U.S.-donated UH-60M helicopters. Another lesson learned from
    Colombia was the importance of strengthening communities as a key
    component of a broad citizen security strategy. Under the Merida
    strategy, INL and USAID have partnered with the Mexican Government to
    implement Pillar IV, ``Building Strong and Resilient Communities,''
    with a strong focus in Ciudad Juarez. A third lesson learned is that
    high-value targets (HVTs) and TCO networks must be pursued in tandem.
    If our strategy does not simultaneously target the broad networks of
    smugglers, money launderers, and other components of TCO logistics and
    supply chains, as well as mid-level cartel leadership, apprehended HVTs
    will simply be replaced. We are seeking to shut down the cartels in
    their entirety.
        Question 2. If Mexican DTOs are designated as Foreign Terrorist
    Organizations, what impact would that have on U.S. human rights and
    developmental programs in Mexico and our diplomatic relationship?
        Answer. The United States stands with the people of Mexico in
    condemning the criminal organizations that operate within Mexico and
    threaten the people of Mexico and the United States; and we remain
    concerned about the level of violence in Mexico. Our two governments
    share responsibility for confronting these threats, and we will
    continue to support the Mexican government's efforts to combat criminal
    organizations and the violence that they perpetuate.
        The United States Government already has and currently is using the
    rigorous designation authorities under the Foreign Narcotics Kingpin
    Designation, also known as the ``Kingpin Act,'' and the Specially
    Designated Narcotics Trafficker program under Executive Order 12978,
    which is administered by the Department of the Treasury. We do not
    believe that additional types of designation are necessary at this
    time.
        Designations under the Kingpin Act freeze any and all assets of
    designated drug cartels subject to U.S. jurisdiction, and prohibit U.S.
    persons from engaging in transactions with the designated cartels.
    Individual penalties can range up to 30 years in prison.
        Question 3a. The four goals for the Beyond Merida Initiative
    outlined in your testimony focus on: (1) Continuing to disrupt
    organized crime, (2) establishing rule of law, (3) creating a 21st
    Century border, and (4) building strong communities. Each of these four
    pillars is a considerable endeavor by itself, and accomplishing these
    objectives will take time and effort from all involved.
        How will the lessons learned from the past 3 years of Merida
    implementation inform the way forward?
        Answer. The major obstacles to Merida Initiative implementation
    during the initial years have been identified, addressed, and largely
    overcome. Such obstacles included insufficient staffing and procurement
    capacity to manage a rapid and sizeable increase in assistance to
    Mexico; historic mistrust of U.S. intentions, requiring the careful
    building of trust through professional relationships; the challenge of
    identifying GOM requirements for sophisticated technology equipment
    purchases; and complex U.S. Government contracting and procurement
    requirements. In addition, other unavoidable issues that delayed
    delivery included our shared insistence that the GOM be involved in the
    program development process during every stage of planning; and the
    fact that the technologically advanced equipment needed by Mexico is
    not off-the-shelf, but rather is custom made to order.
        While many of these obstacles have been overcome, and delivery of
    assistance has accelerated considerably, we continue to take steps to
    ensure that we are managing Merida assistance as efficiently and
    effectively as possible. Steps we have taken and continue to take
    include:
       We increased staffing from 21 to 112 full-time staff in
            Mexico and Washington since Merida started in 2008; and plans
            are underway to hire more.
       We are moving funds toward high-impact programs that can be
            executed more quickly. For example, we recently reprogrammed
            $2.5 million from a justice sector training program that has
            sufficient funds, to a program to improve human rights for
            journalists that is ready to implement now.
       We are exploring new contracting mechanisms for large
            training programs that could move large sums of assistance as
            quickly as needs demand.
       In August 2010, we consolidated Narcotics Affairs Section
            (NAS) program management into the Bilateral Implementation
            Office (BIO) in Mexico City, which allows for closer internal
            collaboration and coordination on projects directly with GOM
            colleagues. The BIO has greatly improved communication with GOM
            counterparts who share the space--a first in U.S.-Mexico
            bilateral relations.
       We recently brought on an experienced INL Senior Advisor to
            conduct a full review of International Narcotics Control and
            Law Enforcement (INCLE)-funded Merida Initiative programs,
            identify bottlenecks, and engage in efforts to implement
            programmatic changes.
       We are working more closely with Mexican counterparts to
            help them develop clear program requirements, which are
            required for our contracting and procurement processes. We are
            exploring ways to build strategic planning training for Mexican
            officials into the Merida programs themselves.
       We have developed greatly improved program tracking and
            reporting tools for program managers to track procurements in
            order to more quickly identify and overcome potential bottle-
            necks.
       Merida Initiative planners are working with the Department's
            Office of the Coordinator for Reconstruction and Stabilization
            (S/CRS), which is the State Department lead for comprehensive
            strategic planning and assessment on U.S. National security
            interests, to develop a coordinated and comprehensive strategic
            plan for Merida programs.
        Going forward, we are both increasingly shifting assistance towards
    State and local institutions and away Federal institutions; and moving
    away from providing large and expensive equipment to more training,
    capacity building, and technical assistance focused on justice sector
    institution building. As Merida moves in these new directions, we
    anticipate that the expertise and strong working-level bilateral
    relations that have been created during the past few years will enable
    us to expeditiously overcome any new challenges.
        Question 3b. What benchmarks and performance metrics has the State
    Department established to measure the success of the program, and the
    new pillars?
        Answer. In the first years of the Merida Initiative, the Department
    of State collaborated extensively with the GOM to develop a set of
    performance measures based around the original vision for and goals of
    the Initiative. Since then, however, the U.S. Government and GOM
    developed and agreed to the Merida Initiative Four Pillar Strategy,
    around which a new set of performance measures needed to be developed.
        The Department of State has begun developing outcome-based
    performance measures and more detailed implementation plans as part of
    an overall strategic plan that mirrors and complements the Four Pillar
    Strategy for the Merida Initiative. As part of this effort, Department
    of State Merida coordinators reached out to experts in strategic
    planning from within the Department as well as from outside
    organizations. These consultations have led us to formally engage with
    both the Office of the Coordinator for Stabilization and Reconstruction
    (CRS), which is the State Department lead for comprehensive strategic
    planning and assessment on U.S. National security interests, and Blue
    Law International, a private consulting firm. Both of these entities
    have undertaken similar successful efforts in other countries.
        State has asked CRS and Blue Law to work together in developing a
    coordinated and comprehensive strategic plan that includes the
    following:
       A review of the government of Mexico's strategic plans for
            both reforming its justice sector and reducing the threat posed
            by transnational criminal organizations;
       An explanation of how U.S. assistance under the Merida
            Initiative integrates into and bolsters the GOM's strategy.
            This narrative will also develop short- and longer-term goals
            and anticipate potential obstacles to meeting them;
       A framework of performance measures which mirror and
            complement the four-pillar strategy defined by the United
            States and the government of Mexico;
       A strategy for how the department might best organize its
            efforts to meet the goals outlined in the strategic plan; and
       An outline of a program-level strategic plan which lays out
            U.S. Government engagement across a number of individual
            projects with the Mexican Federal Police, and which includes
            program level performance measures.
        CRS and Blue Law have begun this effort, including meeting with
    stakeholders throughout the State Department, the interagency
    community, NGOs, academics, and others. They will also spend a
    substantial period of time meeting with Merida implementers on the
    ground in Mexico. We expect to have the first products in June.
        Question 3c. How do you envision the status of program 1 year from
    now?
        Answer. In 1 year, we will have been operating at full staff for a
    full year; and these staff will have orchestrated a significant
    increase in the pace of deliveries. For 2011, we have set a goal of
    delivering $500 million in Merida assistance, which is 40 percent more
    than was delivered during the previous 3 years combined. During this
    year, we will deliver almost all of the large and expensive equipment,
    including non-intrusive inspection equipment (NIIE), aviation, and IT
    equipment, and shift towards provision of training and technical
    assistance, focused primarily on justice sector capacity-building and
    reforms.
        We are currently exploring new contracting mechanisms for large
    State and local training programs that will facilitate the reform and
    professionalization of Mexico's over 2,000 State and local police
    entities. In addition, we hope to see more progress on judicial reform
    at both the Federal and State levels.
        Question 4. Mr. Nichols, after the United States trains Mexican
    Federal officials under the Merida program, what steps, if any, are
    taken to ensure that this training trickles down to the Mexican State
    and local level, where it is needed most since crime in Mexico is
    traditionally investigated and prosecuted at that level?
        Answer. During the first years of the Merida Initiative, our
    assistance primarily targeted Federal institutions for multiple
    reasons, including: U.S. foreign assistance is often primarily
    government-to-government bilateral assistance; performance at the
    Federal level reaches and sets the standard for the entire country; and
    the most trusted and able partners could be found at the Federal level
    at that time. Furthermore, it was the Federal Government, under the
    leadership of President Felipe Calderon, that took the lead in
    launching broad institutional reforms and focusing attention on taking
    town the transnational criminal organizations (TCOs).
        More recently, however, we and Mexican Federal officials have
    agreed that it is essential to expand training assistance to strengthen
    State and municipal institutions, because the vast majority of crime
    and violence in Mexico occurs at the State and local jurisdictional
    level. In some cases, for example with judicial reforms, it is the
    States that are in the lead in implementing Constitutionally-mandated
    reforms. In other cases, State and municipal police, prosecutors,
    corrections staff, and other justice sector officials are on the front
    lines of combating TCO-related crimes. Beginning in fiscal year 2010,
    Merida Initiative budgeting has shifted towards supporting these State
    and local institutions. We are targeting those local institutions in
    regions where crime and violence are the most extreme, notably near
    Mexico's Northern border with the United States. All of this State-
    level work is being closely coordinated with the Mexican Federal
    Government.
       Questions From Ranking Member William R. Keating for Frank O. Mora
        Question 1. There were recent media reports concerning the use of
    U.S. Unmanned Aerial Vehicles inside Mexico. However, the reports were
    unclear regarding whether the assets were owned by DoD or DHS. Are DoD
    Unmanned Aerial Vehicles being used in Mexico and if so what benefits,
    if any, have been achieved by their use?
        Answer. Unfortunately, we are unable to address in an unclassified
    forum the global deployment status of any of our Intelligence,
    Surveillance, and Reconnaissance assets. Such information is routinely
    provided to the Armed Services Committees at the appropriate
    classification level. We are also unable to provide any insight into
    what assets the Department of Homeland Security may have deployed,
    either currently or in the past.
        Question 2. What results, if any, have been achieved by DoD-led
    Defense Bilateral Working Group, and other DoD-related programs?
        Answer. On June 14, 2011, Mexico will host the second U.S.-Mexico
    Defense Bilateral Working Group (DBWG) meeting in Mexico. This annual
    forum was established last year as a venue for structured, strategic
    dialogue between our defense ministries to coordinate on security and
    defense issues. In addition to our traditional areas of cooperation
    such as human rights and counter-narcotics training, we plan to discuss
    increasing our collaboration on cybersecurity, energy security, and
    chemical and radiological response capabilities. DoD hopes to establish
    working groups to develop specific courses of action to enhance
    collaboration in the areas of bilateral and regional security
    cooperation, counternarcotics cooperation, disaster response and
    preparedness, and science and technology. Additionally, through the
    DBWG, we are exploring ways to partner more closely with Mexico to
    address emerging threats along Mexico's southern border with Guatemala
    and Belize.
        Questions From Ranking Member William R. Keating for John Bailey
        Question 1. Human rights complaints regarding Plan Colombia were
    widespread. Some reports stated that over 20,000 people were killed by
    the Colombian Government and millions more were displaced and
    ultimately Plan Colombia was a human rights disaster. To that end,
    given the high level of complaints associated with both initiatives,
    shouldn't those issues be resolved before we begin recommending a Plan
    Colombia-like solution in Mexico?
        Answer. ``Plan Colombia'' is a broad category with lots of
    different pieces. So it's not a very useful label. That said, human
    rights concerns ought to weigh heavily in the choice of strategy and
    instruments in an anti-crime program in Mexico. The Colombian
    government and its police and armed forces improved their performance
    on this matter over the years, though at a very high cost. The big
    human rights offender is the armed insurgency, especially the FARC.
    Fortunately, Mexico does not have an armed insurgency of any
    significance. The dilemma is that Mexico will have to rely on its armed
    forces in its anti-crime strategy for some time to come, and the armed
    forces are not well trained for police-type work.
        Question 2. By your own admission, ``Mexico is much bigger and more
    complex than Colombia.'' Further, when you compare and contrast the
    Merida Initiative with Plan Colombia, the result has far more contrasts
    than comparisons. Therefore, isn't comparing the two essentially
    comparing apples with oranges?
        Answer. The contrasts are important, but there are also important
    lessons to be learned from the Colombian case. I mention those in the
    paper, but want to underline the importance of political consensus
    around an anti-crime initiative; development of a strategy; respect for
    human rights; and development of effective operational intelligence.
        Question 3. In February 2009, you published a white paper titled:
    ``Plan Colombia and Merida Initiative: Policy Twins or Distant
    Cousins?'' In this paper you wrote ``violence associated with organized
    crime is a significant challenge in both countries, but in quite
    different contexts.'' You also stated that unlike Colombia ``guerilla
    insurgency is not an issue in Mexico.'' Clearly, the type of crime that
    is being perpetrated should frame the solution to combating that crime.
    Wouldn't these differences indicate that a Plan Colombia model is not
    the best solution for Mexico's problems?
        Answer. Mexico suffers from two different types of criminality, one
    which is typical and ordinary of virtually any Latin American country,
    and another that is well organized and heavily armed. Mexico needs some
    type of well-organized and well-armed police force that can work with
    specific and trained elements drawn from the armed forces. Colombia has
    several advantages in the ways its police and armed forces are
    organized and can cooperate.
        Question 4. If Mexico followed the Plan Colombia model, it would
    militarize the response to drug trafficking and violent crime--which
    are traditionally addressed at the State or local level. Wouldn't this
    disrupt the success that the Mexican law enforcement has already
    achieved with the arrest and elimination of many of the major DTO
    leaders?
        Answer. Actually, Mexico's armed forces have carried the brunt of
    the work in confronting the DTOs, much more so than the police. The
    police have suffered recurring problems of corruption and
    ineffectiveness. The important lesson from Colombia is that it reformed
    its police in terms of effectiveness and integrity (although the police
    still have serious problems). Police reform is Mexico's top priority,
    and it isn't clear that the reform is going well. The pressing dilemma
    is the pressure to remove the armed forces from policing but without
    sufficient progress in police reform to replace them.
        Question 5. The FARC was considered a political organization with
    political objectives and at one point nearly 40% of Colombia was under
    some level of FARC control. On the other hand, approximately 84% of the
    violence in Mexico occurs in just 4 of Mexico's 32 states and DTOs seek
    to make money, not political statements. Doesn't this distinction rule
    out classifying DTOs as terrorist as well as rule out a Plan Colombia
    model for Mexico?
        Answer. A point to underline is that Mexico's anti-crime strategy
    is highly politicized. The political parties use the crime problem to
    their electoral advantage. The idea of classifying DTOs as terrorist
    organizations will further politicize the strategy. Actors will be
    tempted to pin the terrorist label on their political adversaries or on
    problem groups, such as street youth. I oppose classifying Mexico's
    DTOs as terrorist organizations.
        Question 6. It appears from your testimony that you believe that
    Merida may not be the most effective solution for Mexico's drug battle
    against DTOs. You suggest that it should be ``redesigned and
    reinvigorated.'' What changes would you make to Merida to achieve the
    effective results?
        Answer. The most important changes in Merida is for the United
    States Government to deliver on its pledges of reducing domestic drug
    consumption, stopping the flows of weapons southward, and adopting more
    effective anti-money laundering operations in the United States itself.
    Mexicans have the perception, correct in my view, that the United
    States is only marginally committed to fighting drugs and is delivering
    half-measures. Also, I would underline again the need for well-designed
    pilot projects (the ``resilient community'' pillar) in selected cities
    along the border (e.g., Juarez, Tijuana) in order to find out what
    works with respect to repressing armed gangs and rebuilding the social
    fabric of communities.