Drug Control: Observations on Counternarcotics Activities in Mexico
(Testimony, 09/12/96, GAO/T-NSIAD-96-239).

GAO discussed the results of its review of counternarcotics efforts in
Mexico. GAO noted that: (1) U.S. and Mexican interdiction efforts have
had little impact on the flow of illegal drugs from Mexico into the
United States; (2) instead of concentrating on intercepting drugs as
they move through the transit zone, the United States has focused its
interdiction efforts on stopping cocaine production in South America;
(3) Mexico's efforts to stop the flow of drugs have been limited by
widespread political corruption, lack of legislative tools to combat
drug trafficking organizations, and poorly maintained aircraft; (4) U.S.
and Mexican counternarcotics programs have declined over the past few
years; and (5) the United States and Mexico signed an agreement in April
1996 to facilitate the transfer of military equipment to enhance
counternarcotics efforts in Mexico.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  T-NSIAD-96-239
     TITLE:  Drug Control: Observations on Counternarcotics Activities 
             in Mexico
      DATE:  09/12/96
   SUBJECT:  Narcotics
             Search and seizure
             Drug trafficking
             International cooperation
             Federal aid for criminal justice
             Law enforcement
             Foreign governments
             Controlled substances
             Interagency relations
             Political corruption
IDENTIFIER:  Mexico
             Dept. of State Mission Program Plan
             Colombia
             UH-1H Helicopter
             F-5 Aircraft
             Boeing 747 Aircraft
             
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Cover
================================================================ COVER


Before the Subcommittee on Coast Guard and Maritime Transportation,
Committee on Transportation and Infrastructure, House of
Representatives and the Caucus on International Narcotics Control,
U.S.  Senate

For Release on Delivery
Expected at
10:00 a.m., EDT
Thursday
September 12, 1996

DRUG CONTROL - OBSERVATIONS ON
COUNTERNARCOTICS ACTIVITIES IN
MEXICO

Statement of Jess T.  Ford, Associate Director, International
Relations and Trade Issues, National Security and International
Affairs Division

GAO/T-NSIAD-96-239

GAO/NSIAD-96-239T


(711224)


Abbreviations
=============================================================== ABBREV

  DEA - Drug Enforcement Administration
  DOD - Department of Defense

============================================================ Chapter 0

Mr.  Chairman and Members of the Subcommittee: 

I am pleased to be here today to discuss the results of our review of
counternarcotics efforts in Mexico.  We initiated our work at the
request of Senator Grassley of the Senate Caucus on International
Narcotics Control and the Subcommittee on National Security,
International Affairs and Criminal Justice of the House Committee on
Government Reform and Oversight.  Our review focused on (1) the
nature of the drug-trafficking threat from Mexico, (2) Mexican
efforts to counter drug-trafficking activities, (3) U.S.  strategy
and programs intended to stem the flow of illegal drugs through
Mexico, and (4) recent initiatives by the United States and Mexico to
increase counternarcotics activities.  Our report on this effort was
issued on June 12, 1996.\1 This report builds upon our prior reports
and testimonies that discussed problems regarding various aspects of
U.S.  and Mexican efforts to control drug production and
trafficking.\2 Although some progress has been made, many of the
problems discussed in our prior reports continue to affect current
drug control efforts in Mexico. 

I would like to provide a short overview of our observations
regarding Mexico and then talk about each of the issues discussed in
our report. 


--------------------
\1 Drug Control:  Counternarcotics Efforts in Mexico
(GAO/NSIAD-96-163, June 12, 1996). 

\2 Opium Eradication Efforts in Mexico:  Cautious Optimism Advised
(GAO/GGD-77-6, Feb.  18, 1977); Gains Made in Controlling Illegal
Drugs, Yet the Drug Trade Flourishes (GAO/GGD-80-8, Oct.  25, 1979);
Drug Control:  U.S.-Mexican Opium Poppy and Marijuana Aerial
Eradication Program (GAO/NSIAD-88-73, Jan.  11, 1988); Drug Control: 
Revised Drug Interdiction Approach Is Needed With Mexico
(GAO/NSIAD-93-152, May 10, 1993); Drug War:  Observations on the U.S. 
International Drug Control Strategy (GAO/T-NSIAD-95-182, June 27,
1995); Drug War:  Observations on the U.S.  International Drug
Control Efforts (GAO/T-NSIAD-95-194, Aug.  1, 1995); and Drug
Control:  Observations on Counternarcotics Efforts in Mexico
(GAO/T-NSIAD-96-182, June 12, 1996). 


   RESULTS IN BRIEF
---------------------------------------------------------- Chapter 0:1

Mexico is the primary transit country for cocaine entering the United
States from South America, as well as a major source country for
heroin, marijuana and, more recently, methamphetamine.  Drug
traffickers generally use maritime vessels and aircraft to move
cocaine into Mexico, for later transfer to the United States. 
According to U.S.  Embassy officials, maritime vessels are used to
move an estimated two-thirds of the cocaine entering Mexico. 

Overall, U.S.  and Mexican interdiction efforts have had little, if
any, impact on the overall flow of drugs through Mexico into the
United States.  The amount of cocaine seized and the number of
drug-related arrests in Mexico have declined significantly since
1992.  According to U.S.  officials, Mexican counternarcotics efforts
are hampered by pervasive corruption of key institutions, economic
and political problems, and limited counternarcotics and law
enforcement capabilities. 

The U.S.  international cocaine strategy has changed and U.S. 
programs intended to stem the flow of illegal drugs from Mexico have
declined.  In late 1993, the United States revised its international
cocaine strategy from one that focused activities and resources on
intercepting drugs as they move through the transit zone to one of
stopping cocaine at its source of production in South America.  In
addition, U.S.  funding for counternarcotics efforts in the transit
zone and Mexico declined from about $1 billion in fiscal year 1992 to
about $570 million in fiscal year 1995.  Moreover, since 1992, direct
U.S.  counternarcotics assistance to Mexico has been negligible
because of Mexico's 1993 policy of not accepting most U.S. 
counternarcotics assistance. 

Since our August 1995 testimony before this Subcommittee,

  -- the U.S.  Embassy has elevated drug control issues in importance
     and has developed a drug control operating plan with measurable
     goals;

  -- the Mexican government has signaled a willingness to develop a
     mutual counternarcotics assistance program and taken some action
     on important law enforcement and money-laundering legislation;
     and

  -- the United States and Mexico have created a framework for
     increased cooperation and are expected to develop a joint
     counternarcotics strategy by the end of the year. 

Following through on all of these efforts is critical if the United
States and Mexico are to increase their ability to combat drug
trafficking in Mexico. 


   THE DRUG THREAT FROM MEXICO
   CONTINUES TO BE A MAJOR PROBLEM
---------------------------------------------------------- Chapter 0:2

According to the State Department, no country in the world poses a
more immediate narcotics threat to the United States than Mexico. 
Estimates indicate that up to 70 percent of the more than 300 tons of
cocaine that entered the United States in 1994 came through Mexico. 
In March 1996, the State Department reported that Mexico supplied up
to 80 percent of the foreign-grown marijuana consumed in the United
States and from 20 to 30 percent of the heroin.  Furthermore, during
the past 3 years, Mexican trafficking organizations operating on both
sides of the border have replaced U.S.-based outlaw motorcycle gangs
as the predominant methamphetamine manufacturers and traffickers in
the United States.  The Drug Enforcement Administration (DEA)
estimates that up to 80 percent of the methamphetamine available in
the United States is either produced in Mexico and transported to the
United States or manufactured in the United States by Mexican
traffickers.  Mexican drug-trafficking organizations have complete
control over the production and distribution of methamphetamine. 

In recent years, drug-trafficking organizations in Mexico have become
more powerful, expanding their methamphetamine operations and also
their cocaine-related activities.  DEA reports that Mexican drug
traffickers have used their vast wealth to corrupt police and
judicial officials as well as project their influence into the
political sector.  According to DEA's Administrator, some Mexican
organizations have the potential of becoming as powerful as their
Colombian counterparts.  Furthermore, proximity to the United States,
endemic corruption, and little or no financial regulation have
combined to make Mexico a money-laundering haven for the initial
placement of drug profits into the world's financial systems. 

Drug traffickers use a variety of air, land, and sea conveyances and
routes to move cocaine from Colombia to Mexico and then overland
through Mexico into the United States.  Traditionally, traffickers
have relied on twin-engine general aviation aircraft to deliver
cocaine shipments that ranged from 800 to 1,000 kilograms.  Beginning
in 1994, however, some trafficking groups began using larger Boeing
727-type jet aircraft that can fly faster than U.S.  and Mexican
detection and monitoring aircraft and deliver up to 10 metric tons of
cocaine per trip.  To date, there have been eight known deliveries
using this means of transport.  Furthermore, as we recently
reported,\3 traffickers in the Caribbean have changed their primary
means of delivery and are increasingly using commercial and
noncommercial maritime vessels.  According to U.S.  Embassy
officials, about two-thirds of the cocaine currently entering Mexico
is transported by maritime means. 


--------------------
\3 Drug Control:  U.S.  Interdiction Efforts in the Caribbean Decline
(GAO/NSIAD-96-119, Apr.  16, 1996). 


   PROGRESS IN MEXICO IS HAMPERED
   BY NUMEROUS PROBLEMS
---------------------------------------------------------- Chapter 0:3

Mexico has taken some counternarcotics actions.  Mexico eradicated
substantial amounts of marijuana and opium poppy crops in 1995 with
the assistance of up to 11,000 soldiers working on drug eradication
programs.  According to the Department of State, Mexican personnel
effectively eradicated 29,000 acres of marijuana and almost 21,000
acres of opium poppy in 1995.  Furthermore, President Zedillo
directed the Mexican Air Force to use its F-5 aircraft to assist in
air interdiction efforts in 1995. 

On the other hand, the amount of cocaine seized and the number of
drug-related arrests in Mexico have declined from 1993 to 1995
compared to those before U.S.  assistance was terminated.  For
example, the average annual amount of cocaine seized in Mexico
between 1990 and 1992 was more than 45 metric tons, including more
than 50 tons in 1991.  In contrast, from 1993 to 1995, average
cocaine seizures declined to about 30 metric tons annually.  The
number of drug-related arrests declined by nearly two-thirds between
1992 and 1995. 

Mexico's efforts to stop the flow of drugs have been limited by
numerous problems. 

  -- First, despite the efforts that President Zedillo has undertaken
     since late 1994, both State and DEA have reported that
     corruption in Mexico is still widespread and that pervasive
     corruption is seriously undermining counternarcotics efforts. 

  -- Second, serious economic and political problems have limited
     Mexico's counternarcotics effectiveness.  In December 1994,
     Mexico experienced a major economic crisis--a devaluation of the
     peso that eventually resulted in a $20-billion U.S.  financial
     assistance package.  In addition, high rates of unemployment and
     inflation have continued to limit Mexico's economic recovery. 
     Also, Mexico has had to focus funds and resources on the Chiapas
     region to suppress an insurgency movement. 

  -- Third, Mexico has lacked some basic legislative tools needed to
     combat drug-trafficking organizations, including the use of
     wiretaps, confidential informants, and a witness protection
     program.  New legislation authorizing these activities recently
     passed the Mexican Congress and is expected to be enacted
     following ratification by the Mexican states.  Also, until May
     1996, the laundering of drug profits was not a criminal offense
     and Mexico's laws lacked sufficient penalties to effectively
     control precursor chemicals that are used to manufacture
     methamphetamine.  To counter the growing threat posed by these
     chemicals, the United States encouraged Mexico to adopt strict
     chemical control laws. 

  -- Fourth, the counternarcotics capabilities of the Mexican
     government to interdict drug-trafficking activities are hampered
     by inadequately equipped and poorly maintained aircraft.  In
     addition to equipment problems, some Mexican pilots, mechanics,
     and technicians are not adequately trained.  For example, many
     F-5 pilots receive only a few hours of proficiency training each
     month, which is considered inadequate to maintain the skills
     needed for interdiction.  Moreover, assigning the aircraft to
     interdiction efforts may not have an immediate impact because of
     deficiencies in the capabilities and maintenance of the F-5s. 


   U.S.  COUNTERNARCOTICS PROGRAMS
   IN MEXICO HAVE DECLINED IN
   RECENT YEARS
---------------------------------------------------------- Chapter 0:4

Between fiscal years 1975 and 1992, Mexico was the largest recipient
of U.S.  counternarcotics assistance, receiving about $237 million in
assistance.  In fiscal year 1992, the United States provided about
$45 million in assistance that included excess helicopters, aviation
maintenance support, military aviation training, and some equipment. 
In early 1993, the Mexican government assumed responsibility for the
cost of all counternarcotics efforts in Mexico.  Since then, U.S. 
aid has declined sharply and, in 1995, amounted to about $2.6
million, mostly for helicopter spare parts and a limited amount of
training to Mexican personnel. 

According to the State Department, U.S.  efforts in Mexico are guided
by an interagency strategy developed in 1992 that focused on
strengthening the political commitment and institutional capability
of the Mexican government, targeting major trafficking organizations,
and developing operational initiatives such as drug interdiction.  A
key component of the strategy, developing Mexican institutional
capabilities to interdict drugs, was severely hampered when State
Department funding was largely eliminated in January 1993. 

U.S.  policy decisions have also affected drug control efforts in the
transit zone and Mexico.  In November 1993, the President issued
Presidential Decision Directive 14, which changed the focus of the
U.S.  international drug control strategy from interdicting cocaine
as it moved through the transit zone of the Caribbean and Mexico to
stopping cocaine in the source countries of Bolivia, Colombia, and
Peru.  To accomplish this, drug interdiction resources were to be
reduced in the transit zone, while, at the same time, increased in
the source countries.  As we reported in April 1996, the Department
of Defense (DOD) and other agencies involved in drug interdiction
activities in the transit zone began to see major reductions in their
drug interdiction resources and capabilities in fiscal year 1993. 
The amount of U.S.  funding for the transit zone declined from about
$1 billion in fiscal year 1992 to about $569 million in fiscal year
1995--a decline of 43 percent. 

Reductions in the size of the counternarcotics program have resulted
in corresponding decreases in the staff available to monitor how
previously provided U.S.  helicopters and other assistance are being
used, a requirement of section 505 of the Foreign Assistance Act of
1961, as amended.  The Mexican government, however, has objected to
direct oversight of U.S.-provided assistance and, in some instances,
has refused to accept assistance that was contingent upon signing
such an agreement.  In other instances, Mexico's position resulted in
lengthy negotiations between the two countries to develop agreements
that satisfied the requirements of section 505 and were more
sensitive to Mexican concerns about national sovereignty. 

Prior to the "Mexicanization" policy, the State Department employed
several aviation advisers who were stationed at the aviation
maintenance center in Guadalajara and the pilot training facility at
Acapulco.  One of the duties of these advisers was to monitor how
U.S.  assistance was being used.  However, with the advent of the
Mexicanization policy in 1993, the number of State Department and
contract personnel was greatly reduced and the U.S.-funded aviation
maintenance contract was not renewed.  As a result, the State
Department currently has no personnel in the field to review
operational records on how the 30 U.S.-provided helicopters are being
used.  According to U.S.  officials, the U.S.  Embassy relies heavily
on biweekly reports that the Mexican government submits.  Unless they
request specific operational records, U.S.  personnel have little
knowledge of whether helicopters are being properly used for
counternarcotics activities. 

There are also limitations in U.S.  interdiction efforts.  The 1993
change in the U.S.  drug interdiction strategy reduced the detection
and monitoring assets in the transit zone.  U.S.  Embassy officials
stated that this reduction created a void in the radar coverage, and
some drug-trafficking aircraft are not being detected as they move
through the eastern Pacific.  DOD officials told us that radar voids
have always existed throughout the transit zone and the eastern
Pacific area.  These voids are attributable to the vastness of the
Pacific Ocean and the limited range of ground- and sea-based radars. 
As a result, DOD officials believe that existing assets must be used
in a "smarter" manner, rather than flooding the area with expensive
vessels and ground-based radars, which are not currently available. 

In Mexico, U.S.  assistance and DEA activities have focused primarily
on interdicting aircraft as they deliver their illicit drug cargoes. 
However, as previously mentioned, traffickers are increasingly
relying on maritime vessels for shipping drugs.  Commercial smuggling
primarily involves moving drugs in containerized cargo ships. 
Noncommercial smuggling methods primarily involved "mother ships"
that depart Colombia and rendezvous with either fishing vessels or
smaller craft, as well as "go-fast" boats that depart Colombia and go
directly to Mexico's Yucatan Peninsula.  Efforts to address the
maritime movements of drugs into Mexico are minimal, when compared
with the increasing prevalence of this trafficking mode.  State
Department officials believe that Mexican maritime interdiction
efforts would benefit from training offered by the U.S.  Customs
Service and the U.S.  Coast Guard in port inspections and
vessel-boarding practices. 


   RECENT EFFORTS TO ADDRESS
   BILATERAL DRUG CONTROL ISSUES
---------------------------------------------------------- Chapter 0:5

Since our August 1995 testimony, a number of events have occurred
that could affect future drug control efforts by the United States
and Mexico.  Specifically: 

  -- The U.S.  Embassy elevated counternarcotics from the fourth
     highest priority--its 1995 ranking--in its Mission Program Plan
     to its co-first priority, which is shared with the promotion of
     U.S.  business and trade.  In July 1995, the Embassy also
     developed a detailed embassy-wide counternarcotics plan for U.S. 
     efforts in Mexico.  The plan involves the activities of all
     agencies involved in counternarcotics activities at the Embassy,
     focusing on four established goals, programs that the Embassy
     believes will meet these goals, and specific milestones and
     measurable objectives.  It also sets forth funding levels and
     milestones for measuring progress.  The Embassy estimated that
     it will require $5 million in State Department funds to
     implement this plan during fiscal year 1996.  However, only $1.2
     million will be available, according to State Department
     personnel. 

  -- After taking office in December 1994, President Zedillo declared
     drug trafficking "Mexico's number one security threat." As such,
     he advocated legislative changes to combat drugs and
     drug-related crimes.  During the most recently completed
     session, the Mexican Congress enacted legislation that could
     improve some of Mexico's counternarcotics capabilities such as
     making money laundering a criminal offense.  However,
     legislation to provide Mexican law enforcement agencies with
     some essential tools needed to arrest and prosecute drug
     traffickers and money launderers requires ratification by the
     Mexican states.  These tools include the use of electronic
     surveillance and other modern investigative techniques that,
     according to U.S.  officials, are very helpful in attacking
     sophisticated criminal organizations.  Furthermore, to date, the
     Mexican Congress has not addressed several other key issues,
     such as a requirement that all financial institutions report
     large cash transactions through currency transaction reports. 

  -- In March 1996, Presidents Clinton and Zedillo established a
     high-level contact group to better address the threat narcotics
     poses to both countries.  The Director of the Office of National
     Drug Control Policy co-chaired the first contact group meeting
     in late March, which met to review drug control policies,
     enhance cooperation, develop new strategies, and begin to
     develop a new plan for action.  Binational working groups have
     been formed to plan and coordinate implementation of the contact
     group's initiatives.  According to officials from the Office of
     National Drug Control Policy, a joint antinarcotics strategy is
     expected to be completed in late 1996. 

  -- In April 1996 the United States and Mexico signed an agreement
     that will facilitate the transfer of military equipment and,
     shortly thereafter, the United States announced its intention to
     transfer a number of helicopters and spare parts to the Mexican
     government.  Twenty UH-1H helicopters are scheduled to be
     transferred in fiscal year 1996 and up to 53 in fiscal year
     1997.  State Department personnel stated that the details about
     how the pilots will be trained, as well as how the helicopters
     will be operated, used, and maintained, are being worked out. 

It is too early to tell whether these critical efforts will be
implemented in such a way as to substantially enhance
counternarcotics efforts in Mexico. 


-------------------------------------------------------- Chapter 0:5.1

This concludes my prepared remarks.  I would be happy to respond to
any questions. 


*** End of document. ***