[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/

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                     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.
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    \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.

                                 
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