[Congressional Record (Bound Edition), Volume 145 (1999), Part 3]
[House]
[Pages 4536-4542]
[From the U.S. Government Publishing Office, www.gpo.gov]




                    WHERE ARE THE DRUGS COMING FROM?

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Florida (Mr. Mica) is recognized for 60 minutes.
  Mr. MICA. Mr. Speaker, I come again tonight to the floor of the House 
of Representatives as chair of the new Subcommittee on Criminal 
Justice, Drug Policy and Human Resources to talk about a situation that 
is confronting our Nation, Congress and has touched almost every 
household in America, and that is the situation dealing with illegal 
narcotics. The situation basically is out of control and affects our 
young people. Some 14,200 Americans died last year because of drug-
related deaths. This is a problem that has been swept under the table 
by Congress, by this administration and not really addressed adequately 
in my opinion. As chair of the Subcommittee on Criminal Justice, Drug 
Policy and Human Resources responsible for developing at least the 
House side of our national policy, I intend to continue my efforts to 
bring this situation to the attention of the American people and to my 
colleagues here.
  Mr. Speaker, the situation is so bad relating to narcotics, 
particularly among our young people, that the statistics are absolutely 
staggering and should shock every American, particularly in the area of 
hard drug use by our young people. The statistics since 1993, when this 
administration came into power, of drug use among our teens and our 
young people, the instance of use of heroin by our teenage population 
has soared 875 percent.
  In the area that I come from, Central Florida, a relatively 
prosperous area, an area that has economic stability, growth, 
viability, no inner city problems, our area has been absolutely wracked 
and ravaged by deaths, particularly again among our young people, our 
teenage population and young adults by heroin deaths. In fact, in the 
Orlando Sentinel, a headline at the end of last year said that the drug 
overdose deaths in Central Florida exceed homicides.
  One of my first duties and responsibilities as chair of this new 
subcommittee to deal with drug policy was

[[Page 4537]]

to conduct a hearing in Central Florida on the issue, and I was told by 
the father of one of the young people who died of a drug overdose, a 
heroin overdose, ``Mr. Mica, those who have died from drug overdoses 
are in fact homicides.'' And that situation is repeating itself across 
our land.
  Not only do we see increased use of heroin among our young people and 
in my area and other areas, we are now seeing more and more Mexican 
black tar, high purity heroin, coming across the border into Texas and 
other border States. Additionally, the amounts of methamphetamines 
coming into middle America, the western States and across this land are 
soaring dramatically. The episodes in our emergency rooms from 
overdoses across the land are increasing, not decreasing, and again we 
are seeing more and more of the drug abuse of these hard, high-purity 
drugs such as cocaine, heroin, methamphetamines among our young 
population.
  Tonight I wanted to spend most of my time talking to my colleagues 
that are listening and the American people that are listening about 
where those drugs are coming from, and it is very easy for me to 
identify where those drugs are coming from.
  If I may, if we could pay attention to this chart, it is very easy to 
see that the drugs are coming from South America, primarily Colombia 
where heroin and now cocaine from coca production have increased since 
this administration has stopped equipment or stopped in the last few 
years equipment reaching Colombia, helicopters, ammunition, eradication 
equipment reaching that country. Incredible fields of poppies are being 
grown in Colombia, and now we are told that Colombia is also the 
largest source of coca production in the world, exceeding even Peru and 
Bolivia, which both countries have managed to curtail some of their 
production. But it is coming through Colombia and then transiting 
through Mexico.
  Mr. Speaker, today 60 to 70 percent of the hard drugs entering the 
United States of America enter through Mexico, and this chart shows the 
pattern of Mexican and Colombian based organized crimes, crime in the 
1990's and currently. So, again we know exactly where these drugs are 
being produced, and we know who is producing them, and we know who is 
trafficking in those drugs.
  Let me use, if I may, a quote that disturbed me as chairman of the 
Subcommittee on Criminal Justice, Drug Policy and Human Resources, and 
this is a quote from our chief DEA administrator. He said, and let me 
repeat it, in testimony: Recently in my lifetime I have never witnessed 
any group of criminals that has had such a terrible impact on so many 
individuals and communities in our Nation. Mr. Constantine said 
corruption among Mexican anti-drug authorities was unparalleled with 
anything I have seen in 39 years of police work.
  This is our chief drug enforcement officer for the Nation, and these 
are his comments.
  Now it would be bad enough to hear that from our DEA chief 
enforcement officer, but all we have to do is as a Congress look at the 
statistics about what is happening with Mexico. We look to see how our 
partner, how our friend, how our ally is cooperating in the war on 
drugs in the effort to stop the trafficking and production of illegal 
narcotics.
  Let me address two fronts. First of all, Mexico, which was a minor 
producer of heroin, has now become a major producer of heroin, so they 
are producing heroin and in larger quantities than they ever have and 
at a higher deadly purity rate than we have ever seen before. The 
second area that we would judge countries' cooperation with the United 
States in dealing with the drug problem would be the amount of drugs 
that are seized in that particular country, and that is how we base our 
certification of a country in cooperating and making them eligible for 
foreign assistance, international finance and international trade 
benefits.
  What are the other measures? As I said, first of all, again 
production and then trafficking. In trafficking the statistics are 
absolutely startling. In 1998 the seizures for heroin fell in Mexico, 
the seizures for cocaine and coca products fell in Mexico. So the major 
hard drugs in Mexico actually in the area of seizures decreased in 
Mexico, so they were actually assisting us less in seizing hard drugs 
coming across the border.
  Then if we look at the other dangerous deadly drug that we have 
talked about as methamphetamine, we find that not only the drug, but 
the ingredients and the precursors to produce and traffic in 
methamphetamine, another deadly hard drug today that is taking its toll 
on so many young Americans, is also up, production is up, incidents of 
finding this across our land are up.
  Now I spoke very briefly about the process of certification of a 
country, and there is confusion among the Congress and lack of 
knowledge about the certification process. I was able in the 1980's, as 
chief of staff for Senator Hawkins, to work with Senator Hawkins, 
Members of the other body in Congress and this side, the gentleman from 
New York (Mr. Gilman) and others who were here, the gentleman from New 
York (Mr. Rangel), and the Congress adopted a drug certification law. 
That is a simple law, and what it does again is it says that any 
country who deals in illegal narcotics shall be certified annually by 
the Department of State and the President of the United States as, and 
the terms in the law are very specific, as fully cooperating to do 
again two things. One, to stop the production; and two, to stop the 
trafficking.
  Now that is the certification. The administration and the President 
must certify to Congress that these countries that are dealing in 
illegal narcotics are in fact cooperating with us, fully cooperating 
with us to stop the production and trafficking, a simple law, a simple 
certification. And what do those countries get in return for their 
cooperation and being fully certified? Mr. Speaker, they get basically 
several benefits.
  The first of these would be United States foreign assistance. So if 
they are fully cooperating, they get United States foreign assistance, 
foreign aid. They also would get foreign assistance as far as 
international financial benefit and support. So in the World Bank, 
Inter-American Development Bank, IMF, the United States, which is the 
major underwriting partner for financing all of these international 
operations and actually the basis of financial stability for so many 
countries, including Mexico, the United States lends its vote to 
approve various loans and grants and assistance from these 
international finance organizations. So that is another criterion.

                              {time}  1815

  Then the third area is the trade area. We give trade benefits. I 
cannot think of any nation in the world that we have given a better 
trade advantage to.
  We have different levels of trade equity but there certainly is an 
inequity between the United States, between our wages, between our 
labor standards, between our environmental standards, between all the 
things we judge trade equity and economic equity, there is a disparity 
between the United States and Mexico. Stop and think that we passed 
NAFTA giving that country some of the best trade benefits ever bestowed 
by any government to any other nation or ally. We give, in fact, those 
trade benefits to Mexico and we ask very little in return. In fact, we 
have almost a $16 billion trade deficit, and our trade deficit in the 
United States and I plan to hold a hearing on this issue because it is 
another issue that has not received the adequate attention or concern 
by the Congress or its appropriate committees, but the deficit has now 
ballooned. It is in orbit, the highest it has ever been, trade deficit.
  That is, the United States is buying more foreign goods than selling 
those goods. Only for so long can the United States continue to have 
this incredible hundred billion dollars in excess flowing out year 
after year from the policies of this administration, but that is one 
more benefit that we gave to Mexico and they are benefitting by the 
trade surplus that they experience in selling us their goods, again, 
produced

[[Page 4538]]

at a different level. So all of these benefits are given to the country 
of Mexico.
  In return, we ask very little and, in fact, we go through this 
certification process every year to say who is helping us and who is 
not assisting us and should they get trade foreign assistance benefits. 
That brings me to the topic that I wanted to raise tonight, and that is 
the question of certification of Mexico and what is going on with our 
Mexican allies.
  Are they cooperating? I just read the quote by Tom Constantine, who 
is the Director of our Drug Enforcement Agency, very harshly critical 
of what is going on in Mexico. Two years ago, this Congress stumbled 
and part of it was because of Wall Street weighing in. They were 
concerned with this big trade agreement, that there might be some 
repercussions and American businesses have now invested in Mexico and 
the interconnection of these economic relationships by decertifying 
Mexico there could be some implication, and they extended the real 
meaning of decertification and have since, with the cooperation of the 
administration, turned this into a political process rather than a 
policy process of this Congress and how it extends benefits to other 
countries. Again, those benefits trade financial assistance and 
economic benefits in regard to international organizations. So that has 
been distorted and the process is distorted.
  Two years ago, this Congress concerned about the certification of 
Mexico at that point, passed a resolution and asked Mexico to do 
several things to help end this war, if it was to be a joint war, but 
to take certain very specific actions but not unreasonable requests to 
deal with the narcotics problem that was just as bad then as it is 
today. In fact, it has gotten worse today as a result of nothing being 
done by Mexico to address the specific concerns of this Congress.
  Many people who were here several years ago remember what we asked 
Mexico to do in a cooperative fashion. First we asked for extradition 
of Mexican officials who were involved in drug activities. We asked for 
extradition of the drug traffickers who were charged and we asked for 
the arrest in Mexico, by Mexicans, of major drug traffickers. So we 
asked for extradition of those who were involved in illegal narcotics 
activities at the highest level, major drug traffickers; and we asked 
for, again, cooperation in trying to bring under control some of the 
corruption that existed in Mexico at various levels of their 
government.
  A second thing we asked for was Mexico to sign a maritime agreement 
with the United States. A maritime agreement is important because if we 
look again at this chart we can see the drugs travel not only overland 
but also through some of the water areas that surround Mexico, and 
United States officials and United States enforcement officers who work 
off of this coast, in even our military, have no rights, no maritime 
agreement. Mexico is the only country in this region with which the 
United States does not have a maritime agreement except, I believe, 
Haiti.
  The only reason we have not had one with Haiti is because the 
administration has done such a great job with their system of justice 
down there, where we spent three or four billion dollars, and the 
parliament has not met and we have had basically a dictatorship that 
refuses to operate in a legitimate fashion. So we have a parliament or 
a Congress in Haiti that basically has not been able to meet and 
approve a maritime agreement, but that is not the case in Mexico, even 
though what has happened in Haiti in not signing an agreement with the 
disorganization of their government, with the pouring of billions of 
U.S. dollars into that pit, we have a different situation, a different 
set of circumstances with Haiti and that failure as opposed to the 
Mexican record of failure and failing to sign or come to terms on a 
maritime agreement. That is number two.
  We asked for radar in the south. Now, of course, if we just look at 
this chart again we see that the drugs are coming in through Mexico 
through the southern border and transiting through their country. A 
simple request still not adhered to.
  The fourth request was to enforce some of the laws that had been 
passed. Now, we did get Mexico to pass some tougher laws several years 
back, but it is nice to have a law. The question is enforcing the law.
  What happened when we asked for cooperation? Last year, our agents 
uncovered an incredibly large activity relating to money laundering in 
Mexico. The scope of it was mind-boggling and hundreds of millions of 
dollars being laundered through Mexican banks. We arranged for a sting 
operation and Mexican banks customers were arrested. What did the 
Mexicans do? Did they cooperate with us, enforcing the law as we had 
asked 2 years ago in money laundering and corruption? No, they did not. 
In fact, the Mexicans had the audacity to blast the United States and 
then threaten to indict our Customs officials. This is an operation 
known as Casa Blanca.
  So here again was another item, the fourth item that we had asked for 
cooperation from Mexico; two years ago, and the situation is worse than 
it was then.
  An additional item that we asked for, a simple request, was our 
agents, our DEA agents who work around the world, particularly where 
there are international narcotics problems and they are welcomed by 
most host countries. What did Mexico do to a request that they secure 
protection, they allow our agents to arm themselves and that we also 
increase the presence of those agents in that country for the purpose 
of conducting investigations with Mexican officials? What they did was 
really take little or no action. We still have a cap on those agents 
and our agents still do not have the protection they need.
  So these are a few of the basic requests this House of 
Representatives asked Mexico 2 years ago to comply with to assist us.

                              {time}  1830

  Again, nothing, at most very little, has been done.
  What disturbs me the most about the situation with Mexico is that 
instead of getting better on any front, the situation becomes worse and 
worse.
  Tonight, before the House of Representatives, I am going to read most 
of the article that appeared in today's New York Times, and I ask every 
Member of Congress who tomorrow will receive a copy of this article 
from me to take time to read this article.
  We have been concerned about corruption in Mexico at the highest 
levels. We have been concerned that this administration made decisions 
about certification not based on facts, not based on intelligence 
information, but based on diplomacy and also in trying to protect 
United States officials which I believe have covered up a horrible 
situation. This article that I am going to read tonight that appeared 
in The New York Times by Tim Golden, again I refer to every Member of 
Congress and ask that they pay particular attention to its contents, 
because its contents is very damaging to what has taken place regarding 
Mexico.
  Mr. Speaker, let me, if I may, read this. I will try to read most of 
the article. I think again it deserves our attention, and it was 
written today. This is not something that is dated.
  ``Early last year as undercover United States Customs agents neared 
the end of the biggest inquiry ever conducted into the illegal movement 
of drug money, bankers working with Mexico's most powerful cocaine 
cartel approached them with a stunning offer. The agents, posing as 
money-launderers from Colombia, had insinuated themselves deeply into 
the Mexican underworld, helping the traffickers hide more than $60 
million. Now moneymen working with the cartel said they had clients who 
needed to launder $1.5 billion more. The most important of those 
clients,'' they said, now listen to this, ``was Mexico's Minister of 
Defense.
  Mr. SOUDER. Mr. Speaker, will the gentleman yield?
  Mr. MICA. Mr. Speaker, I would be glad to yield to the gentleman from 
Indiana.

[[Page 4539]]


  Mr. SOUDER. Mr. Speaker, I think it is important to point out in 
looking at this article that ``early last year'' means this is around 
the time we were about to certify Mexico as cooperating, and I think 
that is really important. The gentleman called my attention to this 
article. This is not something that is historic; this is something that 
was happening while on the floor of this Congress. We had Members down 
here saying they were cooperating, and that is important, I think, in 
the context of what the gentleman is reading here. This was going on 
while we are here saying, oh, things are going fine.
  Mr. Speaker, I thank the gentleman for yielding.
  Mr. MICA. Mr. Speaker, I thank the gentleman from Indiana not only 
for his comments, but also for his continued interest in trying to 
bring to the attention of the American people the situation relating to 
Mexico's involvement in this drug matter.
  Again, the point being here, these drug dealers said that they had a 
client who needed to launder $1.5 billion more. Most important, those 
clients, one of those clients, they said, was Mexico's Minister of 
Defense.
  ``The Customs agents didn't know whether the money really existed, or 
if any of it belonged to the Minister, General Enrique Cervantes, 
officials said. But having heard about American intelligence reports, 
pointing to corruption at the high levels of the Mexican military, the 
agents were mystified by what happened next.
  ``Rather than continue the undercover operation to pursue the deal, 
Clinton administration officials ordered that it be shut down on 
schedule several weeks later. No further effort was ever made to 
investigate the offer, and officials said that prosecutors have not 
even raised the matter with the suspects in the case who have pleaded 
guilty and who are cooperating with authorities.''
  Let me read this quote: ``Why are we sitting on this kind of 
information, asked the former senior Customs agent who led the 
undercover inquiry,'' and that agent was William F. Gately. ``It's 
either because we are lazy, we are stupid, or the political will 
doesn't exist to engage in the kind of investigation where our law 
enforcement efforts might damage our foreign policy.''
  So here we have the question of whether or not we should have, and 
our officials should have, pursued this matter of corruption at the 
very highest levels, and in fact, it may have been compromised for the 
sake of damaging our foreign policy or our diplomacy, or our relations 
with Mexico.
  ``Senior officials denied,'' and I will continue reading, that 
foreign policy had influenced their decision to end the operation, 
saying they had been moved primarily by concerns for its security. They 
also emphasized that the agents had been unable to verify the Mexican 
traffickers' claims.
  ``Other officials of the administration, which has based much of its 
Mexican drug strategy on collaboration with General Cervantes, said 
they were confident that he was above reproach. A spokesman for the 
Ministry of Defense, Lieutenant Francisco Aguilar Hernandez, dismissed 
the traffickers' proposal as self-serving lies.''
  But now listen to this part of this story: ``But a detailed account 
of the case, based on confidential government documents, court records, 
and dozens of interviews, suggests that United States officials walked 
away from an extraordinary opportunity to examine allegations of the 
official corruption that is considered the main obstacle to anti-drug 
efforts in Mexico.''
  Basically, they walked away from the investigation.
  ``For nearly a decade, American officials have been haunted by the 
spectacle of Mexican officials being linked to illicit activities soon 
after they are embraced in Washington. And just weeks before the 
Customs investigation known as Operation Casablanca'', which I referred 
to earlier, ``which ended last year, administration officials received 
intelligence reports indicating that the Mexican military's ties to the 
drug trade were more serious than had been previously thought. But when 
faced with the possibility that one of Washington's critical Mexican 
allies might be linked to the traffickers, the official gave the matter 
little consideration. They said they opted for a sure thing, arresting 
mid-level traffickers and their associates, and at least disrupting the 
money-laundering system that drug gangs had set up. To reach for a 
general, they asserted, would have added to their risk with no 
certainty of success.
  ``Obviously, it was a significant allegation, the Commissioner of 
Customs, Raymond W. Kelly, said in an interview. But he added, there 
was skepticism about it. Was it puffing? It just was not seen as being, 
I wouldn't use the word credible, but it wasn't verified.
  Quote: ``When senior administration officials announced the stink 
last May, they took a triumphant inventory: The indictments of three 
big Mexican banks and bankers from a dozen foreign banks and the arrest 
of 142 suspects, the confiscation of $35 million in drug profits, and 
the seizing of accounts holding $66 million more. The officials claimed 
that the success was a result of a long-standing administration fight 
against money-laundering. But Mr. Gately, who retired from the Customs 
Service on December 31, said his investigation had run the gauntlet of 
resistance from the start.
  ``The Justice Department, uncomfortable with cases in which 
undercover agents laundered more money for drug traffickers than they 
ultimately seized, was imposing new limits on the time that such 
operations could run and the money they would launder, officials said. 
And though the restrictions did not apply to Customs, a branch of 
Treasury, Justice Department officials continued to play strong 
skeptical roles in supervising cases throughout the government.
  ``One Federal official who spoke on the condition of anonymity 
admitted that he had initially dismissed Mr. Gately's plan. `You're out 
of your mind', the official remembered saying. Several colleagues said 
it was the sort of response that Mr. Gately, 49 years of age, tended to 
see as a challenge. A decorated former Marine who enlisted for service 
in Vietnam at 17, he had already been at the center of several cases 
that mixed internal struggle and public success. Friends and critics 
described him in similar terms: Driven, sometimes abrasive, and usually 
creative.
  ``After leading an investigation that revealed ties between the 
Italian Mafia and Colombian cocaine cartels, Mr. Gately cowrote a 1994 
book about the case, Dead Ringer, that cast him as a lonely crusader 
surrounded by small-minded bureaucrats. `It is the story of one man who 
refused to succumb to corruption,' the prologue reads, `who believed in 
his oath and mission and the consequences he paid for believing in what 
he was doing.'
  ``As the senior Customs drug investigator in Los Angeles, Mr. Gately 
said he first heard from a confidential source in 1993 about an 
important shift in the way that Mexican and Colombian drug traffickers 
were converting cash into funds that could be freely spent. The source 
said, `Traffickers were depositing their money with corrupt Mexican 
bankers who sent it back to them in almost untraceable cashier's checks 
drawn on American accounts that the Mexican banks used to do business 
with in the United States.' Mr. Gately hoped his source could 
infiltrate that system, collecting cash from drug wholesalers in the 
United States, and wiring it to corrupt bankers in Mexico.
  ``The bankers would issue drafts for the money and Customs would 
develop evidence against the suspects on both ends of the transaction. 
Many Customs officials, however, doubted that the ruse would work. Drug 
enforcement agents wanted to use the source in another case. Because 
the man had a criminal past, one Federal prosecutor opposed using him 
at all and threatened to indict him on a 10-year-old case. Even when 
Mr. Gately was eventually able to recruit another undercover 
intermediary, a Colombian known by the pseudonym, Javier Ramirez, he 
and others, said a senior Justice Department official'', and this is 
very important, ``Mary Warren, pressed him to limit the operation's 
scope.''

[[Page 4540]]

  So we have an official in the Department of Justice pressing him to 
limit the scope of this operation.
  ``What she wanted to know was when was this going to be over,'' he 
said of Ms. Warren, ``who declined to comment. What was our end game?''
  Mr. SOUDER. Mr. Speaker, will the gentleman yield?
  Mr. MICA. Mr. Speaker, I am glad to recognize the gentleman from 
Indiana.
  Mr. SOUDER. Mr. Speaker, one of my concerns when I read this article 
and in listening to the gentleman go through this is that we on the 
Committee on Government Reform, we have heard some of this type of 
thing before, that the constant trying to limit investigations, trying 
to cut it off, it is a very disturbing pattern that this administration 
seems to have when they are investigating things that are very 
uncomfortable regarding their policy.
  It is not clear who and where this decision was being made by. We do 
not know whether it is coming out of the White House or whether at the 
top of the Justice Department; much like in the Indian casinos 
investigation, whether it was in the data bank or whether it was in the 
missing files. But it is amazing how we constantly hear people inside 
the Justice Department saying that top officials were impeding their 
investigation rather than seeking the truth.

                              {time}  1845

  What is really disturbing here is that it is not as though as I 
recall it was just the year before this, that their drug czar was 
implicated and eventually had to come down. It was not like these were 
kind of off-the-wall charges that had never happened before in the 
Mexican government.
  The gentleman from Florida has been establishing through this New 
York Times article that, while this person is a very driven person, he 
has established that he has some track record. This is a disturbing 
pattern we are seeing.
  In fact, the gentleman read one statement a little bit ago that was 
also disturbing, because we often hear at the grassroots level, ``why 
do you get the little guys and not the bigger guys?'' The gentleman 
read a statement from this article that said that they were being 
limited by the Justice Department because, if the cash that they were 
having to do to move up the line was less than that they could actually 
close on at given point, which means that, by principle, we are 
defining we are only going to go for midrange if we cannot keep 
levering the deal as we move up.
  There are some fundamental questions here even as to how we approach 
this and do we really have the goal in our Justice Department to go 
after the top officials even when we have a strong tip. I think that, 
to some degree, this gets confusing as we move with it, but this is 
really disturbing, and I hope the gentleman from Florida will continue 
reading this into the Record and people will get copies of this because 
this is a fundamental at the heart of our policy right now in Mexico.
  Mr. MICA. As they say in the mystery books, the plot thickens here. 
Let me continue if I may to read this into the Record. ``In November of 
1995, Colombian drug contacts introduced the undercover agents to 
Victor Alcala Navarro, a representative of Mexico's biggest drug mafia, 
the so-called Juarez cartel.
  ``The Customs agents, posing as money launderers from a dummy company 
called the Emerald Empire Corporation, began picking up the Mexican's 
profits and laundering them as planned.
  ``In February 1997, at meetings in Mexico, Javier Ramirez was 
introduced to Mr. Alcala's boss. A few months later, the Customs source 
found himself chatting by phone with the head of the cartel, Amado 
Carrillo Fuentes.
  ``Over scores of meetings and million-dollar deals, the traffickers 
grew more open about the official protection they enjoyed in Mexico, 
law enforcement officials and government documents indicate.
  ``At one meeting in Mexico City on May 16, 1997, the traffickers took 
along 16 federal police agents as bodyguards.'' This is again police 
agents of Mexico acting as bodyguards for drug dealers. ``At another 
meeting, a man who identified himself as an official of the Mexican 
Attorney General's office picked up $1.7 million in cash, including 
$415,000 that the undercover agents had carried to Mexico for the 
cartel boss himself.
  ``During a later meeting in New York, Mr. Alcala told the agents that 
like Mexico's drug enforcement chief, who had been arrested for 
collaborating with the Juarez cartel,'' again let me interject an aside 
here, much to the embarrassment of our United States drug czar who had 
embraced the Mexican drug czar, and here he is arrested ``for 
collaborating with the Juarez cartel, the Defense Minister, General 
Cervantes, was in league with the competing Tijuana cartel.''
  But here we have allegations about the Attorney General, the former 
drug czar, and the Minister of Defense, and we have hundreds of 
thousands of dollars, $1.7 million of cash being picked up by officials 
of the Mexican government.
  Mr. SOUDER. Mr. Speaker, will the gentleman yield?
  Mr. MICA. Yes, I will be glad to yield.
  Mr. SOUDER. Mr. Speaker, I thank the gentleman for yielding, because 
what the gentleman just read here sounds eerily close to what happened 
in Colombia, only here we even have more direct involvement with the 
leaders in the government.
  We have the drug enforcement chief, eventually who was proven guilty, 
who was actually renting an apartment from the head of the Juarez 
cartel while he was getting information from our government. The 
allegation is that the defense minister who was involved in helping 
bring down that cartel may be, we do not know this but this article is 
suggesting that we failed to pursue this, may be involved with the 
competing cartel just like the Cali cartel in Colombia helped bring 
down the Medellin cartel in Colombia because they wanted to put a rival 
out.
  We have been hearing steadily on this floor and other bodies that the 
fact one way we can tell Mexico is cooperating is they helped bring 
down their drug czar. But what if, and we did not investigate this, 
they brought down their drug czar because another faction was a part in 
helping a different cartel?
  I am not saying that is happening, but that is a really disturbing 
charge, because we would be played, for lack of a better word, as 
suckers in Congress if in fact we use as an argument for not doing 
decertification something which actually was a setup for a more 
powerful cartel.
  Mr. MICA. Mr. Speaker, again the plot thickens here, and I want to 
continue reading from this investigative piece in today's New York 
Times.
  ``Customs officials said they remain skeptical of what the agents 
heard, including the traffickers' claim that Mr. Carrillo Fuentes's 
death in 1997 had actually been faked. But in December 1997, Javier 
Ramirez invited Mr. Alcala to Colombia for an elaborately staged 
meeting that seemed to raise that partnership to a new level.'' This 
meeting here with these folks. Let me continue.
  ``At a heavily guarded hacienda overlooking Bogota, an operative 
acting as Javier Ramirez's Colombian boss, Carlos, said he and his 
partners had $500 million to launder,'' half a billion dollars to 
launder. ``They wanted to know whether the Mexican bankers used by Mr. 
Alcala's boss, Juan Jose Castellanos Alvarez Tostado, could help.
  `` `Alvarez called us right back,' Mr. Gately recalled. `He said, 
`Let me send you my very best people, and we will get it done.' ''
  ``On March 6, 1998,'' just about a year ago, ``Mr. Alcala arrived 
with several businessmen at the tastefully furnished offices of Emerald 
Empire in a Los Angeles suburb. This time the businessmen offered a 
deal of their own.
  ``One of the men, David Loera, said he knew `a general,' who had $150 
million in Mexico City to invest. Would Mr. Ramirez--who had told the 
traffickers he owned part of a Nevada casino used to launder money--
care to help?

[[Page 4541]]

  ``Over the next six weeks, according to government documents,'' again 
let me read this, ``over the next six weeks, according to government 
documents and the accounts of Mr. Gately and several officials, the 
deal was discussed in three more meetings and three more telephone 
conversations involving Mr. Ramirez, the undercover agents and the 
traffickers. All of the contacts were secretly tape-recorded and their 
words transcribed, officials said.
  ``In one call, two senior investment managers at Mexico's second 
largest bank told the Customs operatives that the money belonged not 
just to `a general,' but to the Minister of Defense. Later, the two 
Mexicans advised Mr. Ramirez that the minister was sending `his 
daughter' (a woman later said to be friend) to meet with them, along 
with an army colonel and a third person.
  ``However, the investment managers said, the amount to be laundered 
was much more than they had discussed: the minister had $500 million in 
cash in New York and another $500 million in the Netherlands, in 
addition to $150 million in Mexico City.
  ``Customs officials said they queried the Central Intelligence 
Agency, which works closely with the Mexican military on drug control 
and other programs. The CIA responded that it had no such information 
about General Cervantes, an assessment that other officials have since 
reiterated.
  ``But although General Cervantes has not been a focus of suspicion, 
Mexican and American officials have said several senior generals close 
to him had been under the scrutiny of investigators from both the 
Mexican Attorney General's office and a special military intelligence 
unit.
  ``On February 6, analysts at the Drug Enforcement Administration 
briefed Attorney General Janet Reno on intelligence indicating that the 
senior Mexican generals might indeed be cooperating with Mr. Carrillo 
Fuentes' organization, officials said. And in a separate Customs case 
in Houston, undercover agents had been approached about laundering 
millions of dollars for an unidentified Mexican Army general, officials 
said.''
  Now listen to this, and again I quote from this article, ``On April 
9, Mr. Alcala visited Emerald Empire with a cousin, who had just 
returned from Mexico with a message. The cousin `was very nervous about 
the deal,' Mr. Gately said. `He said it could be very dangerous if it 
got screwed up, because the money belonged to, `all of them, including 
the President.' '' The President, here it says Ernesto Zedillo. Then in 
parentheses, it says ``(A spokesman for Mr. Zedillo, David Najera, 
dismissed the claim as baseless.)''
  ``Later that month, Mr. Gately went to Washington to brief officials 
including Mr. Kelly--who was then about to take over the Customs 
Service after having overseen it as Treasury Undersecretary for 
Enforcement.
  ``Kelly said, `How do we know it's really him?' Mr. Gately recalled, 
referring to General Cervantes. `I told him we do not know,' Mr. Gately 
said. `We cannot substantiate it. But we have no reason to believe that 
they are telling us anything than what they know.'.
  `` `They weren't trying to impress us, they were not trying to make 
deals with us,' Mr. Gately added. `So whoever had this money, I thought 
it was worth pursuing--whether it was the Defense Minister of Mexico or 
somebody we had never heard of.'
  ``People familiar with the discussions said they did not go much 
further. The general's supposed emissaries were to meet with Javier 
Ramirez in Las Vegas, Nevada on April 22. They did not arrive, and the 
traffickers reported they had become nervous.
  Mr. Kelly acknowledged that he had been pressing for months to wrap 
up the investigation; he said he had grown increasingly concerned that 
information about it might be leaked out, endangering the undercover 
agents.
  ``The final sting had already been postponed twice because Federal 
prosecutors were still preparing indictments.
  ``James E. Johnson, who succeeded Mr. Kelly as Undersecretary and has 
closely supervised the Treasury's relations with Mexico on enforcement 
issues, added a cautionary note that several officials said seemed to 
underscore his concern for the political stakes. Unless the agents had 
proof of general Cervantes's role, officials quoted him as warning, 
they should not bandy his name about in connection with the case.
  `` `We need to be very careful about how we talk about this sort of 
thing,' a senior law enforcement official, who would not speak for 
attribution, quoted him as saying. `If we don't have the goods, it 
makes us look like we're overreaching.'.
  ``Mr. Johnson would not comment publicly.''
  ``The operation had already navigated a series of sizable obstacles.
  ``Mr. Gately and some other agents were worried that their boss in 
Los Angeles, John Hensley, had leaked information about the secret 
operation to congressional aides and others; Mr. Hensley had also 
pressed hard to bring the operation to an end, officials said.
  ``For his part, officials said, Mr. Hensley had accused his strong-
willed subordinate of transgressions ranging from traveling without 
authorization to stealing millions of dollars. Mr. Kelly alleged that 
the charges against Mr. Gately had been investigated and found 
baseless; Mr. Hensley declined to comment.''

                              {time}  1900

  ``As discussions about this supposed $1.15 billion were going on, the 
undercover operation also suffered serious setbacks with the capture of 
an important Juarez operative in Chicago. The arrest brought money 
deliveries to a halt while the cartel hunted a mole.
  ``On May 16, more than two dozen Mexican traffickers, bankers and 
other operatives, who had been invited to the United States by the 
undercover team, were rounded up in San Diego at the Casablanca Casino 
Resort in Mesquite, Nevada. Officials said whatever thoughts they had 
entertained of pursuing the allegations about General Cervantes were 
dropped in the diplomatic backlash that followed.''
  And, again, I told my colleagues what the Mexicans did is they 
threatened to indict United States Customs officials.
  ``While the Mexican authorities were asked to arrest about 20 
suspects indicted in the case, they initially located only 6. One was a 
partner of Mr. Loera, the fugitive businessman who had first proposed 
the deal with `the general'. The partner was found dead in a Mexican 
jail from injuries that the police described as self-inflicted. Mr. 
Alvarez Tostado has never been found. His deputy, Mr. Alcala, awaits 
trial in Los Angeles.
  ``Soon after the operation, American officials said they revealed to 
the Mexican government some of their information on ostensible 
corruption in the case. They said they kept silent about more explosive 
evidence to avoid intensifying the furor that had followed their 
decision not to warn Mexico about the operation.''
  And this is the Casablanca operation.
  ``Still, the officials said none of the information was ever pursued, 
and in a little-noticed statement in July, the office of the Mexican 
Attorney General, Jorge Madrazo Cuellar, dismissed allegations of money 
laundering by `senior commanders of the Army and officials of the 
Mexican government.'
  ``Mr. Madrazo said in a telephone interview that the Americans had 
told him only about unidentified Federal agents and a money laundering 
scheme involving `a general who had a daughter'. He said the name of 
General Cervantes, who has no daughter, was never mentioned.
  ``With the information that they gave me, Mr. Madrazo asked, what 
could I possibly have done, gone and looked for a general with a 
daughter?''
  And that was the response that we have out of the Attorney General 
and other officials of Mexico. So, basically, what this article 
outlines, and I read it in haste, but I wanted to make sure it was 
included in the record, what this article and this investigative report 
outlines is, in fact, we may have corruption at the very highest levels 
of the Mexican government.
  This information is now public. We have known that there was very 
high levels of corruption. Here there are serious questions raised 
again that lead

[[Page 4542]]

to a high minister's office all the way to the office of the President 
of Mexico.
  We also see in this article a situation in which it appears that high 
United States officials stopped this investigation when it was 
disclosed that this corruption reached both the top of Mexican cabinet 
officials and possibly even reached the office of the President of 
Mexico, President Zedillo.
  We also have here evidence tonight that the Mexican military, with 
whom the United States is confiding with in the war on drugs, is 
corrupt from the bottom to the very top. We must know who those 
generals are that are hoarding this kind of money in such an incredible 
fashion.
  What else do we know? Those who reveal the truth about corruption in 
the Mexican government are found dead, and United States officials who 
attempt to reveal the truth about corruption are either deterred or 
they are penalized or they come under close scrutiny.
  What else have we learned from this investigative report? United 
States officials, including the Attorney General, Secretary of State, 
and others may be risking our national security. And if we are losing 
14,200 Americans from the effects of illegal narcotics, and 60 to 70 
percent of those hard drugs are coming through Mexico, we know we have 
a national security problem of a huge proportion.
  The information revealed by this New York Times report deserves 
further investigation. As chairman of the Subcommittee on Criminal 
Justice, Drug Policy and Human Resources of the Committee on Government 
Reform, I intend to investigate it. We will not be deterred in seeing 
how high this corruption leads to in the Mexican government. Wherever 
it may lead us, we will follow it, and we will find out why officials 
of the United States Government brought these investigations either to 
a close or did not pursue adequately these investigations with 
incredible allegations of this magnitude.
  We will conduct those hearings and those meetings either in public or 
behind closed doors.

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