Drug Control: Update on U.S.-Mexican Counternarcotics Efforts

Published by the Government Accountability Office on 1999-02-24.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                          United States General Accounting Office

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

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

                          Update on U.S.-Mexican
                          Counternarcotics Efforts
                          Statement of Benjamin F. Nelson, Director, International
                          Relations and Trade Issues, National Security and
                          International Affairs Division

                  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.

                  1Drug Control: U.S.-Mexican Counternarcotics Efforts Face Difficult Challenges (GAO/NSIAD-98-154,
                  June 30, 1998).

                      Drug Control: Status of Counternarcotics Efforts in Mexico (GAO/T-NSIAD-98-129, Mar. 18, 1998).

          Leter   Page 1                                                            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

        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

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                     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.

                       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.

             Leter   Page 3                                                          GAO/T-NSIAD-99-86 Drug Control
        Table 1: U.S. Counternarcotics Assistance Provided to the Government of Mexico
        (fiscal years 1997-99)

        Dollars in millions
                                                                                FY 1998             FY 1999
        Source of Assistance                               FY 1997           (estimated)         (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   drawdowna                             24.0                   1.1
            Section 1004b                                       28.9                  20.1                   7.9
            Section   1031c                                      8.0
        Subtotal, Defense                                     $61.9                 $22.1               $ 8.9 d
        Total                                                 $66.9                 $27.1                $18.9
        aSection 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.
         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.
          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.
        dForfiscal 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
        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

          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.

Leter   Page 4                                                           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               Although there have been some difficulties, the United States and Mexico
                       have undertaken some steps to enhance cooperation in combating illegal
Counternarcotics       drug activities. Mexico has also taken actions to enhance its
Efforts                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
                       • 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            The United States and Mexico have cooperated in the development of a
Counternarcotics       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

               Leter   Page 5                                           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 Casablanca5 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

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

                            5Operation 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.

                              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.

                Leter       Page 6                                                         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 Forces8 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

                         7The 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

                           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.

                 Leter   Page 7                                                            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

                      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
                      • 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

              Leter   Page 8                                          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 law9 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

                          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

                Leter   Page 9                                                          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 anti-
                            money-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 law12 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.

                              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.

                            11We 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).

                              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.

                    Leter   Page 10                                                          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
                          • 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.            Last year we noted that while U.S.-provided assistance had enhanced the
                          counternarcotics capabilities of Mexican law enforcement and military
Assistance                organizations, the effectiveness and usefulness of some assistance were

                               Prior years’ funding information for Mexican counternarcotics activities is not available.

                  Leter   Page 11                                                              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.

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