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

Published by the Government Accountability Office on 1999-03-04.

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

                    United States General Accounting Office

GAO                 Testimony
                    Before the Subcommittee on Criminal Justice, Drug Policy,
                    and Human Resources, Committee on Government
                    Reform, House of Representatives

For Release

on Delivery

Expected at
                    DRUG CONTROL
10:00 a.m., EST


March 4, 1999

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

          Mr. Chairman and Members of the Subcommittee:

          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 former Chairman Hastert and Senator Grassley. 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   As I stated in last year’s hearing,2 drugs from Mexico represent a significant
          threat to the United States. That has not changed.

          • Mexico is one of the largest centers for narcotics-related business in the
          • Mexico is still the principal transit country for cocaine entering the
            United States.
          • Mexico is either a producer, refiner, or transit point for cocaine,
            marijuana, methamphetamine, and heroin.
          • Mexico is a major hub for the recycling of drug proceeds.
          • Mexico’s Juarez drug-trafficking organization is as powerful and
            dangerous as Colombia’s Medellin and Cali cartels used to be.
          • Mexico’s porous border and the daunting volume of legitimate
            cross-border traffic provides near-limitless opportunities for the
            smuggling of illicit drugs and the proceeds of the sale of these drugs.

          Because of these circumstances, 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

          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).

          Page 1                                                GAO/T-NSIAD-99-98 Drug Control in Mexico
have not been fully implemented. Moreover, no major Mexican drug
trafficker was surrendered to the United States on drug charges. In
addition, during 1998, opium poppy eradication and drug seizures remained
at about the same level as in 1995. I believe it is important to note that the
heroin threat from Mexico appears to be increasing. Heroin from Mexico
now represents about 14 percent of the heroin seized in the United States
and Mexico's cultivation of opium producing poppies increased by 3,000
hectares in 1998.

Mexican government counternarcotics activities in 1998 have not been
without positive results. One of its major accomplishments was the arrest
of Jesus and Luis Amezcua who, along with their brother Adan,3 are 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.

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

  Adan Amezcua was arrested in 1997 on a weapons charge and is currently serving an 18-month

Page 2                                             GAO/T-NSIAD-99-98 Drug Control in Mexico
             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
             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.4 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.

               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.

             Page 3                                              GAO/T-NSIAD-99-98 Drug Control in Mexico
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.

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            (estimate)           (estimate)
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              $ 8.9d
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 1997 (P.L. 104-201) authorized
the Secretary of Defense to provide $8 million in counternarcotics assistance to Mexico in fiscal year
  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.

Page 4                                               GAO/T-NSIAD-99-98 Drug Control in Mexico
                   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.5 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 February 1999 certification decision,
                   the United States essentially used the same objectives it used for evaluating
                   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. On
                   February 26, 1999, the President certified that Mexico was fully
                   cooperating with the United States in its counternarcoitcs efforts.

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 of the Amezcua brothers and the implementation of the currency
                   and suspicious transaction reporting requirements. Overall, the results

                   • 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.

                     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.

                   Page 5                                              GAO/T-NSIAD-99-98 Drug Control in Mexico
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
Cooperation        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

                   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 Casablanca6 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

                   6Operation 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.

                   Page 6                                             GAO/T-NSIAD-99-98 Drug Control in Mexico
                            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. (See app. I for eradication and seizure trend data.)

                            While Mexico’s eradication of its opium poppy crop grew in 1998, its opium
                            cultivation increased at a greater rate. As a result, the amount of heroin
                            produced in Mexico rose from about 4.6 metric tons in 1997 to an estimated
                            6 metric tons in 1998. According to the Drug Enforcement Administration
                            (DEA), almost all of this heroin will reach the U.S. market. Mexican heroin
                            dominates the market in the western states and, according to DEA,
                            Mexican-produced heroin represents 14 percent of all heroin seized in the
                            United States. A current study by DEA indicates that as much as 29 percent
                            of the heroin being used in the U.S. is being smuggled in by Mexican
                            drug-trafficking organizations. DEA has also reported that these
                            organizations are attempting to produce higher purity heroin. To do this,
                            they are seeking the expertise of Colombian chemists to convert Mexican
                            opium base into the much purer white heroin.8

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

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

                              The purity of heroin causing the deaths of 25 individuals in Plano, Texas, during the past 18 months
                            ranged from between 30 percent to 60 percent, with some heroin reaching a purity level of 70 percent.

                            Page 7                                               GAO/T-NSIAD-99-98 Drug Control in Mexico
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,9 the Bilateral Task Forces10 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 Forces were involved in
several counternarcotics operations in 1998, for example, the capture of
Jesus and Luis Amezcua and the recent seizure of properties 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 DEA provided

9The 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.

Page 8                                               GAO/T-NSIAD-99-98 Drug Control in Mexico
                almost $460,000 to the Bilateral Task Forces to overcome this lack of
              • 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 DEA. 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
              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.

              Page 9                                 GAO/T-NSIAD-99-98 Drug Control in Mexico
                      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 law11 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
                      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,12 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-

                      11The 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

                        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.

                      Page 10                                              GAO/T-NSIAD-99-98 Drug Control in Mexico
                    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.13

                    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 law14 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.

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.15

                    During 1998 and 1999, the government of Mexico announced a number of
                    new initiatives. For example,

                      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).

                    14In 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.

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

                    Page 11                                              GAO/T-NSIAD-99-98 Drug Control in Mexico
                 • 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
                 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

                 Page 12                                GAO/T-NSIAD-99-98 Drug Control in Mexico
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.16 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.

Page 13                                              GAO/T-NSIAD-99-98 Drug Control in Mexico
Appendix I

Seizure and Eradication Trend Data                                                             ApeInxdi

               Figure I.1: Mexican Cocaine Seizures, 1990-1998

               Metric tons






                    1990 1991 1992 1993 1994 1995 1996 1997 1998

               Source: Department of State   .

               Page 14                                  GAO/T-NSIAD-99-98 Drug Control in Mexico
Appendix I
Seizure and Eradication Trend Data

Figure I.2: Opium Poppy Eradication and Available Harvest, 1990-1998

           1990 1991 1992 1993 1994 1995 1996 1997 1998

                           Eradicated   Harvested

Source: Department of State.

Page 15                                      GAO/T-NSIAD-99-98 Drug Control in Mexico
                   Appendix I
                   Seizure and Eradication Trend Data

                   Figure I.3: Marijuana Eradication and Available Harvest, 1990-1998








                              1990 1991 1992 1993 1994 1995 1996 1997 1998

                                                 Eradicated   Harvested

                   Source: Department of State   .

(711411)   eL
            rtet   Page 16                                         GAO/T-NSIAD-99-98 Drug Control in Mexico
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