Drug Control: Update on U.S.-Mexican Counternarcotics Efforts (Testimony,
02/24/99, GAO/T-NSIAD-99-86).

Pursuant to a congressional request, GAO discussed the counternarcotics
efforts of the United States and Mexico, focusing on: (1) Mexico's
efforts in addressing the drug threat; and (2) the status of U.S.
counternarcotics assistance provided to Mexico.

GAO noted that: (1) while some high-profile law enforcement actions were
taken in 1998, major challenges remain; (2) new laws passed to address
organized crime, money laundering, and the diversion of chemicals used
in narcotics manufacturing have not been fully implemented; (3)
moreover, during 1998, opium poppy eradication and drug seizures
remained at about the same level as in 1995; (4) in addition, no major
Mexican drug trafficker was surrendered to the United States on drug
charges; (5) Mexican government counternarcotics activities in 1998 have
not been without positive results; (6) one of its major accomplishments
was the arrest of two major drug traffickers commonly known as the Kings
of Methamphetamine; (7) although all drug-related charges against the
two have been dropped, both are still in jail and being held on
extradition warrants; (8) the Mexican foreign ministry has approved the
extradition of one of the traffickers to the United States, but he has
appealed the decision; (9) in addition, during 1998 the Organized Crime
Unit of the Attorney General's Office conducted a major operation in the
Cancun area where four hotels and other large properties allegedly
belonging to drug traffickers associated with the Juarez trafficking
organization were seized; (10) Mexico also implemented its currency and
suspicious reporting requirements; (11) the Mexican government has
proposed or undertaken a number of new initiatives; (12) it has
initiated an effort to prevent illegal drugs from entering Mexico,
announced a new counternarcotics strategy and the creation of a national
police force; (13) one of the major impediments to U.S. and Mexican
counternarcotics objectives is Mexican government corruption; (14)
recognizing the impact of corruption on law enforcement agencies, the
President of Mexico: (a) expanded the role of the military in
counternarcotics activities; and (b) introduced a screening process for
personnel working in certain law enforcement activities; (15) since
these initiatives, a number of senior military and screened personnel
were found to be either involved in or suspected of drug-related
activities; (16) since 1997, the Departments of State and Defense have
provided Mexico with over $92 million worth of equipment, training, and
aviation spare parts for counternarcotics purposes; and (17) the major
assistance included UH-1H helicopters, C-26 aircraft, and two Knox-class
frigates purchased by the government of Mexico through the foreign
military sales program.

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

 REPORTNUM:  T-NSIAD-99-86
     TITLE:  Drug Control: Update on U.S.-Mexican Counternarcotics 
             Efforts
      DATE:  02/24/99
   SUBJECT:  Political corruption
             Foreign military assistance
             Narcotics
             Organized crime
             Foreign governments
             Law enforcement
             Foreign military sales
             International cooperation
             Drug trafficking
             Extradition
IDENTIFIER:  Mexico
             UH-1 Helicopter
             C-26 Aircraft
             Knox Class Frigate
             Foreign Military Sales Program
             
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ns99086t.book GAO United States General Accounting Office

Testimony Before the Caucus on International Narcotics Control, U.
S. Senate

For Release on Delivery Expected at 9: 00 a. m., EST Wednesday,
February 24, 1999

DRUG CONTROL Update on U. S.- Mexican Counternarcotics Efforts

Statement of Benjamin F. Nelson, Director, International Relations
and Trade Issues, National Security and International Affairs
Division




GAO/T-NSIAD-99-86

  GAO/T-NSIAD-99-86

Page 1 GAO/T-NSIAD-99-86 Drug Control

Mr. Chairman and Members of the Caucus: I am pleased to be here
today to discuss our work on the counternarcotics efforts of the
United States and Mexico. My statement today will highlight the
findings from our ongoing effort to update our June 1998 report, 1
as requested by Senator Grassley and Congressman Hastert. I will
discuss

two broad issues: (1) Mexico's efforts in addressing the drug
threat and (2) the status of U. S. counternarcotics assistance
provided to Mexico.

Summary At last year's hearing on U. S. and Mexican
counternarcotics efforts, 2 I stated that Mexico was the principal
transit country for cocaine entering the United States. That has
not changed. Mexico is one of the largest centers for narcotics-
related business in the world. It is either a producer,

refiner, or transit point for cocaine, marijuana, methamphetamine,
and heroin, and is a major hub for the recycling of drug proceeds.
U. S. law enforcement officials have told us that the Juarez drug
trafficking organization is as powerful and dangerous as the
Medellin and Cali cartels used to be. The porous 2,000- mile U.
S.- Mexican border and the daunting volume of legitimate cross-
border traffic 86 million cars and 4 million

trucks and railcars entered the United States from Mexico in 1998
provide near limitless opportunities for the smuggling of illicit
drugs and the proceeds from the sale of these drugs. The United
States and Mexico face a

formidable challenge in combating illicit drug- trafficking. Last
year I testified that, with U. S. assistance, Mexico had taken
steps to improve its capability to reduce the flow of illicit
drugs into the United States. I also said that it was too early to
determine the impact of these

actions and that challenges to their full implementation remained.
While some high- profile law enforcement actions were taken in
1998, major challenges remain. New laws passed to address
organized crime, money laundering, and the diversion of chemicals
used in narcotics manufacturing

have not been fully implemented. Moreover, during 1998, opium
poppy eradication and drug seizures remained at about the same
level as in 1995. In addition, no major Mexican drug trafficker
was surrendered to the United States on drug charges.

1 Drug Control: U. S.- Mexican Counternarcotics Efforts Face
Difficult Challenges (GAO/NSIAD-98-154, June 30, 1998). 2 Drug
Control: Status of Counternarcotics Efforts in Mexico (GAO/T-
NSIAD-98-129, Mar. 18, 1998).

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Page 2 GAO/T-NSIAD-99-86 Drug Control

Mexican government counternarcotics activities in 1998 have not
been without positive results. One of its major accomplishments
was the arrest of two major drug traffickers commonly known as the
Kings of Methamphetamine. Although all drug- related charges
against the two have been dropped, both are still in jail and
being held on U. S. extradition warrants. The Mexican foreign
ministry has approved the extradition of one of the traffickers to
the United States, but he has appealed the decision. In addition,
during 1998 the Organized Crime Unit of the Attorney General's
Office conducted a major operation in the Cancun area where four
hotels and other large properties allegedly belonging to drug
traffickers associated with the Juarez trafficking organization
were seized. Mexico

also implemented its currency and suspicious transaction reporting
requirements.

In addition, the Mexican government has proposed or undertaken a
number of new initiatives. For example, it has initiated an effort
to prevent illegal drugs from entering Mexico, announced a new
counternarcotics strategy and the creation of a national police
force. One of the major impediments to U. S. and Mexican
counternarcotics objectives is Mexican government corruption.
Corruption remains widespread within Mexican government
institutions, including the criminal justice system. According to
one U. S. estimate, Mexican narcotics traffickers spend as much as
$6 billion a year to suborn government officials at all levels.
Recognizing the impact of corruption on law enforcement agencies,
the President of Mexico (1) expanded the role of the military in
counternarcotics activities and (2) introduced a screening

process for personnel working in certain law enforcement
activities. However, neither of these initiatives can be
considered a panacea for the narcotics- related problems
confronting the United States and Mexico. Since these initiatives,
a number of senior military and screened personnel were found to
be either involved in or suspected of drug- related activities.

Since 1997, the Departments of State and Defense have provided the
government of Mexico with over $112 million worth of equipment,
training, and aviation spare parts for counternarcotics purposes.
The major assistance included UH- 1H helicopters, C- 26 aircraft,
and two Knox- class frigates purchased by the government of Mexico
through the Foreign Military Sales program. Last year I testified
that some of the assistance provided to the Mexican military was
of limited usefulness due to operational and logistical support
problems. In the past year, the two frigates have become
operational. Unfortunately, the situation with the

Lett er

Page 3 GAO/T-NSIAD-99-86 Drug Control

helicopters has worsened. Since late March 1998, all of the 72 UH-
1H helicopters provided to the Mexican military have been grounded
because of airworthiness concerns. 3 In addition, the four C- 26
aircraft are still not being used for counternarcotics operations.
Background The United States has assisted the Mexican government
in its

counternarcotics efforts since 1973, providing about $350 million
in aid. Since the late 1980s, U. S. assistance has centered on
developing and supporting Mexican law enforcement efforts to stop
the flow of cocaine from Colombia, the world's largest supplier,
into Mexico and onward to the United States. According to U. S.
estimates, Mexican narcotics- trafficking

organizations facilitate the movement of between 50 and 60 percent
of the almost 300 metric tons of cocaine consumed in the United
States annually. In the early 1990s, the predominant means of
moving cocaine from

Colombia to Mexico was by aircraft. However, a shift to the
maritime movement of drugs has occurred over the past few years.
In 1998, only two flights were identified as carrying cocaine into
Mexico. According to U. S. law enforcement officials, most drugs
enter Mexico via ship or small boat through the Yucatan peninsula
and Baja California regions. Additionally,

there has been an increase in the overland movement of drugs into
Mexico, primarily through Guatemala.

Since 1996, most U. S. assistance has been provided by the
Department of Defense to the Mexican military, which has been
given a much larger counternarcotics and law enforcement role. On
the other hand, the

Department of State's counternarcotics assistance program has been
concentrating on supporting the development of specialized law
enforcement units, encouraging institutional development and
modernizing and strengthening training programs. Table 1 provides
additional information on U. S. counternarcotics assistance to the
government of Mexico since 1997.

3 In March 1998, the U. S. Army issued a "safety of flight"
message that grounded all of its UH- 1H helicopters due to
mechanical failures in the engine. The Mexican military
subsequently grounded its 72 UH- 1H helicopter fleet, while the
Mexican Attorney General's Office continued to fly most of its

UH- 1H helicopters on a restricted basis according to guidelines
outlined by the manufacturer and the U. S. Army.

Lett er

Page 4 GAO/T-NSIAD-99-86 Drug Control

Table 1: U. S. Counternarcotics Assistance Provided to the
Government of Mexico (fiscal years 1997- 99)

a Section 506( a)( 2) of the Foreign Assistance Act of 1961, as
amended (22 U. S. C. 2318( a)( 2), authorizes the President to
approve the provision of U. S. military goods and services to a
foreign country for counternarcotics assistance when it is in the
U. S. national interest. b Section 1004 of the National Defense
Authorization Act for Fiscal Year 1991, as amended

(P. L. 101- 510) authorized the Secretary of Defense to provide
counternarcotics training and other types of assistance to drug-
producing countries. c Section 1031 of the National Defense
Authorization Act for Fiscal Year of 1997 (P. L. 104- 201)
authorized the Secretary of Defense to provide $8 million in
counternarcotics assistance to Mexico in fiscal year 1997. d For
fiscal year 1999, the reduced U. S. training program will focus on
providing Mexican personnel with more technical skills such as
helicopter pilot training and helicopter and fixed- wing aircraft
maintenance.

Sources: U. S. embassy in Mexico, the Defense Security Cooperation
Agency and the Coordinator for Drug Enforcement Policy and
Support, Department of Defense. The Foreign Assistance Act of
1961, as amended, requires the President to certify annually that
major drug- producing and -transit countries are fully cooperating
with the United States in their counternarcotics efforts. 4 As
part of this process, the United States established specific
objectives for evaluating the performance of these countries.
According to State Department officials, as part of the March 1999
certification decision, the

United States will essentially use the same objectives it used for
evaluating

Dollars in millions

Source of Assistance FY 1997 FY 1998 (estimated) FY 1999

(estimated)

Department of State $ 5. 0 $ 5.0 $ 8. 0 Department of Justice 2. 0
Department of Defense

International Military Education and Training 1. 0 0.9 1. 0

Section 506 drawdown a 24. 0 1.1 Section 1004 b 28. 9 20. 1 7. 9
Section 1031 c 8. 0 Subtotal, Defense $61. 9 $22.1 $ 8. 9 d

Total $66.9 $27. 1 $18.9

4 Section 490 of the Foreign Assistance Act of 1961, as amended
(22 U. S. C. 2291( j)), requires the President to certify by March
1 of each year which major drug- producing and transit countries
cooperated fully with the United States or took adequate steps on
their own to achieve full compliance during the previous year with
the goals and objectives established by the 1988 United Nations
Convention Against Illicit Traffic in Narcotic Drugs and
Psychotropic Substances.

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Page 5 GAO/T-NSIAD-99-86 Drug Control

Mexico's counternarcotics cooperation in March 1998. These include
(1) reducing the flow of drugs into the United States, (2)
disrupting and dismantling narcotrafficking organizations, (3)
bringing fugitives to justice, (4) making progress in criminal
justice and anticorruption reform,

(5) improving money- laundering and chemical diversion control,
and (6) continuing improvement in cooperation with the United
States.

Mexico's Counternarcotics Efforts

Although there have been some difficulties, the United States and
Mexico have undertaken some steps to enhance cooperation in
combating illegal drug activities. Mexico has also taken actions
to enhance its counternarcotics efforts and improve law
enforcement capabilities. There have been some positive results
from the new initiatives, such as the arrest of two major drug
traffickers and the implementation of the currency and

suspicious transaction reporting requirements. Overall, the
results show:  drugs are still flowing across the border at about
the same rate as 1997,  there have been no significant increases
in drug eradication and

seizures,  no major drug trafficker has been extradited to the
United States,  money- laundering prosecutions and convictions
have been minimal,  corruption remains a major impediment to
Mexican counternarcotics efforts, and  most drug trafficking
leaders continue to operate with impunity.

U. S.- Mexico Counternarcotics Cooperation

The United States and Mexico have cooperated in the development of
a binational counternarcotics drug strategy, which was released in
February 1998. This strategy contains 16 general objectives, such
as reducing the production and distribution of illegal drugs in
both countries and focusing law enforcement efforts against
criminal organizations. Since the issuance of the binational
strategy, a number of joint working groups, made up of

U. S. and Mexican government officials, have been formed to
address matters of mutual concern. A primary function of several
of these working groups was to develop quantifiable performance
measures and milestones

for assessing progress toward achieving the objectives of the
strategy. The performance measures were released during President
Clinton's February 15, 1999, visit to Mexico. A binational law
enforcement plenary group was also established to facilitate the
exchange of antidrug information. Lett er

Page 6 GAO/T-NSIAD-99-86 Drug Control

Despite these cooperative efforts, information exchange remains a
concern by both governments because some intelligence and law
enforcement information is not shared in a timely manner, which
impedes drug trafficking operations. Operation Casablanca 5
created tensions in relations between the two countries because
information on this undercover operation was not shared with
Mexican officials.

In the aftermath of Operation Casablanca, the United States and
Mexico have taken action to strengthen communications between the
two countries. An agreement reached by the U. S. and Mexican
Attorneys General (commonly referred to as the Brownsville Letter)
calls for (1) greater information- sharing on law enforcement
activities; (2) providing advance notice of major or sensitive
cross- border activities of law enforcement agencies; and (3)
developing training programs

addressing the legal systems and investigative techniques of both
countries. 6

Data for 1998 show that Mexico has, for the most part, not
significantly increased its eradication of crops and seizures of
illegal drugs since 1995. While Mexico did increase its
eradication of opium poppy, eradication of other crops and
seizures have remained relatively constant. Cocaine seizures in
1998 were about one- third lower than in 1997. However, the large
seizure amount in 1997 was attributable, in part, to two large
cocaine seizures that year. Executive and Legislative

Action Last year I testified that the government of Mexico took a
number of

executive and legislative actions, including initiating several
anticorruption measures, instituting extradition efforts, and
passing various laws to address illegal drug- related activities.
I also said that it was too early to determine their impact, and
challenges to their full implementation remained. While some
progress has been made, implementation challenges remain. 5
Operation Casablanca, a 3- year undercover operation led by the U.
S. Customs Service that targeted

money- laundering operations in Mexico, netted about $100 million
in illicit drug proceeds. 6 On February 15, 1999, the Attorneys
General of Mexico and the United States signed a follow- up
agreement. The new agreement established points of contact,
timing, and forms of notification and provides for the exchange of
annual reports by the two Attorneys General on compliance.

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Page 7 GAO/T-NSIAD-99-86 Drug Control

Anticorruption I testified last year that corruption was pervasive
and entrenched within the justice system that has not changed.
According to U. S. and Mexican law enforcement officials,
corruption remains one of the major impediments affecting Mexican
counternarcotics efforts. These officials also stated that most
drug- trafficking organizations operate with impunity in parts of
Mexico. Mexican traffickers use their vast wealth to corrupt
public officials and law enforcement and military personnel, as
well as to inject their influence into the political sector. For
example, it is estimated

that the Arelleno- Felix organization pays $1 million per week to
Mexican federal, state, and local officials to ensure the
continued flow of drugs to gateway cities along Mexico's northwest
border with the United States. A recent report by the Attorney
General's Office of Mexico recognized that one basic problem in
the fight against drug trafficking has been "internal corruption
in the ranks of the federal judicial police and other public
servants of the Attorney General's Office."

As we reported last year, the President of Mexico publicly
acknowledged that corruption is deeply rooted in the nation's
institutions and general social conduct, and he began to initiate
reforms within the law enforcement community. These include (1)
reorganizing the Attorney General's office and replacing the
previously discredited drug control office with the Special
Prosecutor's Office for Crimes Against Health; (2) firing or

arresting corrupt or incompetent law enforcement officials; (3)
establishing a screening process to filter out corrupt law
enforcement personnel; and (4) establishing special units within
the military, the Attorney General's Office, and the Secretariat
of Hacienda the Organized Crime Unit, 7 the Bilateral Task Forces
8 and Hacienda's Financial Analysis Unit to investigate and
dismantle drug- trafficking organizations in Mexico

and along the U. S.- Mexico border and investigate money-
laundering activities. Additionally, the President expanded the
counternarcotics role of the military.

The Organized Crime Unit and the Bilateral Task Force were
involved in several counternarcotics operations in 1998, for
example, the capture of two major narcotics traffickers and the
recent seizure of properties 7 The Organized Crime Unit was
established through the organized crime law to conduct
investigations and prosecutions aimed at criminal organizations,
including those involved in drug- trafficking

activities. 8 The Bilateral Task Forces are specialized units
within the Special Prosecutor's Office for Crimes Against Health
and are responsible for investigating and dismantling the most
significant

drug- trafficking organizations along the U. S.- Mexico border.

Lett er

Page 8 GAO/T-NSIAD-99-86 Drug Control

belonging to alleged drug traffickers in the Cancun area, as well
as the seizure of money, drugs, and precursor chemicals at the
Mexico City Airport.

However, many issues still need to be resolved some of them the
same as we reported last year. For example,

 there continues to be a shortage of Bilateral Task Force field
agents as well as inadequate Mexican government funding for
equipment, fuel, and salary supplements for the agents. (Last year
the Drug Enforcement Administration provided almost $460,000 to
the Bilateral Task Forces to overcome this lack of support);

 the Organized Crime Unit remains significantly short of fully
screened staff;  there have been instances of inadequate
coordination and

communications between Mexican law enforcement agencies, and
Mexico continues to face difficulty building competent law
enforcement institutions because of low salaries and the lack of
job security.

Additionally, increasing the involvement of the Mexican military
in law enforcement activities and establishing screening
procedures have not been a panacea for the corruption issues
facing Mexico. A number of senior Mexican military officers have
been charged with cooperating with narcotics traffickers. One of
the most notable of these was General Jesus Gutierrez Rebollo,
former head of the National Institute for Combat Against Drugs the
Mexican equivalent of the U. S. Drug Enforcement

Administration. In addition, as we reported last year, some law
enforcement officials who had passed the screening process had
been arrested for illegal drug- related activities. In September
1998, four of the Organized Crime Unit's top officials, including
the Unit's deputy director, were re- screened and failed. Two are
still employed by the Organized Crime Unit, one resigned, and one
was transferred overseas.

Extradition Since my testimony last year, no major Mexican
national drug trafficker has been surrendered to the United
States. In November 1998, the government of Mexico did surrender
to the United States a Mexican national charged

with murdering a U. S. Border Patrol officer while having about 40
pounds of marijuana in his possession. However, U. S. and Mexican
officials agree that this extradition involved a low- level
trafficker who, unlike other traffickers, failed to use legal
mechanisms to slow or stop the extradition process. According to
the Justice Department, Mexico has approved the extradition of
eight other Mexican nationals charged with drug- related Lett er

Page 9 GAO/T-NSIAD-99-86 Drug Control

offenses. They are currently serving criminal sentences, pursuing
appeals, or are being prosecuted in Mexico.

U. S. and Mexican officials expressed concern that two recent
judicial decisions halting the extradition of two major
traffickers represented a setback for efforts to extradite Mexican
nationals. The U. S. officials stated that intermediate courts had
held that Mexican nationals cannot be extradited if they are
subject to prosecution in Mexico. U. S. officials

believe that these judicial decisions could have serious
consequences for the bilateral extradition relationship between
the two countries In November 1997, the United States and Mexico
signed a temporary extradition protocol. The protocol would allow
suspected criminals who are serving sentences in one country and
are charged in the other to be temporarily surrendered for trial
while evidence is current and witnesses are available. To become
effective, the protocol required approval by the

congresses of both countries. The U. S. Senate approved the
protocol in October 1998; however, the protocol has not yet been
approved by the Mexican congress. Organized Crime Law According to
U. S. and Mexican officials, the 1996 organized crime law 9 has
not been fully implemented, and its impact is not likely to be
fully evident for some time. According to U. S. law enforcement
officials, Mexico has made some use of the plea bargaining and
wiretapping provisions of the

law. However, U. S. and Mexican law enforcement officials pointed
to judicial corruption as slowing the use of the wiretapping
provision and have suggested the creation of a corps of screened
judges, who would be provided with extra money, security, and
special arrangements to hear cases without fear of reprisals.
Additionally, results of Mexico's newly created witness protection
program are not encouraging two of the six

witnesses in the program have been killed. U. S. and Mexican
officials continue to believe that more efforts need to be
directed toward the development of a cadre of competent and
trustworthy judges and prosecutors that law enforcement
organizations can rely on to 9 The organized crime law was passed
in November 1996 and authorized the use of plea bargaining and

confidential informants, established a witness protection program,
and allowed for the use of controlled deliveries and court-
approved wiretaps. The Law also has provisions for asset seizures
and forfeiture.

Lett er

Page 10 GAO/T-NSIAD-99-86 Drug Control

effectively carry out the provisions of the organized crime law.
U. S. agencies continue to provide assistance in this area. Money
Laundering Mexico has begun to successfully implement the currency
and suspicious

transaction reporting requirements, 10 resulting in what U. S. law
enforcement officials described as a flood of currency and
suspicious transaction reporting. Mexican officials also indicated
that Operation Casablanca resulted in a greater effort by Mexican
banks to adhere to antimoney- laundering regulations. However, U.
S. officials remain concerned that there is no requirement to
obtain and retain account holders' information for transactions
below the $10,000 level. No data is available on how serious this
problem is and there is no reliable data on the magnitude of the
money- laundering problem. 11

Between May 1996 and November 1998, the Mexican government issued
35 indictments and/ or complaints on money- laundering charges;
however, only one case has resulted in a successful prosecution.
The remaining 34 cases are still under investigation or have been
dismissed. Chemical Controls Last year we reported that the new
chemical control law 12 was not fully

implemented due to the lack of an administrative infrastructure
for enforcing its provisions. This is still the case. Mexico is
currently in the process of developing this infrastructure as well
as the guidelines necessary to implement the law. However, U. S.
officials remain concerned that the law does not cover the
importation of finished products, such as over- the- counter drugs
that could be used to make methamphetamines. 10 In May 1996, money
laundering was made a criminal offense, with penalties of up to 22
years in prison. In March 1997, Mexico issued regulations
requiring banks and other financial institutions to

report currency transactions of over $10, 000 U. S. dollars and to
report suspicious transactions. Under the prior law, money
laundering was a tax offense, there was no reporting requirement,
and violators were only subject to a fine.

11 We recently issued a report on alleged money laundering
involving Raul Salinas. Private Banking: Raul Salinas, Citibank,
and Alleged Money Laundering (GAO/OSI-99-1, Oct. 30, 1998).

12 In May 1996, trafficking in drug precursor and essential
chemicals was made a criminal offense. Although some chemicals
that the United Nations recommends be controlled were not included
in the law, Mexico passed additional legislation in December 1997
that included all chemicals, thus bringing Mexico into compliance
with the 1988 United Nations Convention Against Illicit Traffic in
Narcotic Drugs and Psychotropic Substances and other international
agreements. Mexico has also taken further action to control
chemicals by limiting the legal importation of precursor and
essential chemicals to eight ports of entry and by imposing
regulatory controls over the machinery used to manufacture drug

tablets or capsules.

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Page 11 GAO/T-NSIAD-99-86 Drug Control

New Initiatives Over the past year, Mexico has announced a new
drug strategy and instituted a number of new counternarcotics
initiatives. The government

of Mexico also reported that it has channeled significant funds$
754 million during 1998 into its ongoing campaign against drug
trafficking. Mexico also indicated that it will earmark about $770
million for its 1999 counternarcotics campaign. 13

During 1998 and 1999, the government of Mexico announced a number
of new initiatives. For example,  a federal law for the
administration of seized, forfeited and abandoned

goods that will allow authorities to use proceeds and instruments
seized from crime organizations for the benefit of law enforcement
is being considered,  a federal law that will establish expedited
procedures to terminate

corrupt law enforcement personnel is also being considered, and
the government of Mexico recently announced the creation of a new

national police force. In addition, the government of Mexico has
initiated an operation to seal three strategic points in Mexico.
The purpose of the program is to prevent the entry of narcotics
and diversion of precursor chemicals in the Yucatan peninsula,
Mexico's southern border, and the Gulf of California.

Furthermore, the Mexican government recently announced a
counternarcotics strategy to crack down on drug traffickers.
Mexico indicated that it plans to spend between $400 million and
$500 million over the next 3 years to buy new planes, ships, radar
and other military and law enforcement equipment. In addition to
the new spending, Mexico reported that its new antidrug efforts
will focus on improving coordination among law enforcement
agencies and combating corruption more efficiently. A senior
Mexican government official termed this new initiative a total war
against the scourge of drugs.

Status of U. S. Assistance Last year we noted that while U. S.-
provided assistance had enhanced the

counternarcotics capabilities of Mexican law enforcement and
military organizations, the effectiveness and usefulness of some
assistance were 13 Prior years' funding information for Mexican
counternarcotics activities is not available.

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Page 12 GAO/T-NSIAD-99-86 Drug Control

limited. For example, two Knox- class frigates purchased by the
government of Mexico lacked the equipment needed to ensure the
safety of the crew, thus making the ships inoperative. We also
reported that the 73 UH- 1H helicopters provided to Mexico to
improve the interdiction capability of Mexican army units were of
little utility above 5, 000 feet, where significant drug- related
activities and cultivation occur. In addition, we noted that four
C- 26 aircraft were provided to Mexico without the capability to
perform intended surveillance missions and without planning for
payment for the operation and maintenance of the aircraft.

Mr. Chairman, let me bring you up to date on these issues. The two
Knox- class frigates have been repaired and are in operation.
According to U. S. embassy officials, the government of Mexico is
considering the

purchase of two additional frigates. However, other problems
remain. For example, in late March 1998, the U. S. Army grounded
its entire UH- 1H fleet until gears within the UH- 1H engines
could be examined and repairs could be made. The government of
Mexico followed suit and grounded all of the U. S.- provided UH-
1H helicopters until they could be examined. 14 The helicopters
were subsequently tested, with 13 of the Attorney General's 27
helicopters and 40 of the military's 72 helicopters receiving
passing grades. According to Department of Defense officials, the
helicopters that passed the engine tests could be flown on a
restricted basis. U. S. embassy officials told us that the Office
of the Attorney General has been flying its UH- 1H helicopters on
a restricted basis, but the Mexican military has decided to keep
its entire fleet grounded until all are repaired. Finally, the

four C- 26 aircraft still are not being used for counternarcotics
operations. This concludes my prepared remarks. I would be happy
to respond to any questions you may have.

14 To assist the government of Mexico in its drug interdiction and
eradication efforts, the United States has provided 33 UH- 1H
helicopters to the Attorney General's Office and 73 UH- 1H
helicopters to the Ministry of Defense since 1989. One Ministry of
Defense helicopter and 6 Attorney General helicopters were
subsequently destroyed in accidents.

(711363)

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