U.S. DEPARTMENT OF STATE
INTERNATIONAL NARCOTICS CONTROL STRATEGY REPORT, MARCH 1996: MEXICO

United States Department of State

Bureau for International Narcotics and Law Enforcement Affairs

MEXICO

I. Summary

Drug seizures lagged for much of the year, although several surge operations in late 1995 brought the total up to 1994 levels (but still considerably down from the record levels of 1992-3). The illicit crop eradication campaign improved, resulting in measurable increases over 1994. Drug-related arrests declined, but there were many significant arrests, including 11 key members of the Gulf Cartel; this effort culminated in the arrest of its leader, Juan Garcia Abrego, in January 1996. Much of the Zedillo Administration's anti-crime efforts in 1995 were devoted to reorganizing the Attorney General's Office (PGR), implementing sweeping reforms to the judicial system, and preparing draft legislation to reform the criminal code, including initiatives to strengthen money laundering control and combat organized crime. While this draft legislation was submitted in late 1995, the Mexican Congress will not resume debate upon it until the spring session in 1996. The PGR, which leads Mexico's anti-drug campaign, was also deeply involved in investigations into the assassinations of a leading presidential contender and a senior official in the ruling political party and related allegations of official corruption. Ongoing investigations led to the arrest of Raul Salinas, brother of former President Carlos Salinas and a senior official in the Salinas Administration.

There was extensive law enforcement cooperation between Mexican and US law enforcement agencies during 1995. The US and Mexican Attorneys General established a Senior Law Enforcement Plenary group which met four times during 1995, to oversee law enforcement cooperation and mutual legal assistance. The US provided training and technical advice to personnel of the PGR, the National Institute to Combat Drugs (INCD), and the Mexican armed forces. Secretary of Defense Perry's visit to Mexico in November resulted in a series of bilateral discussions on military cooperation and support in such areas as counternarcotics and support to civilian law enforcement authorities.

Despite cooperation and some positive results in drug enforcement, Mexico faces serious problems. The most daunting is narcotics-related corruption, which is endemic. A GOM review revealed, for example, that Mexican Federal Judicial police personnel in Baja California were involved a multi-ton cocaine shipment aboard a cargo jet in November. Police and military personnel are further hampered by continued lack of appropriate legal tools or authority to combat modern organized crime and chronic shortages of resources and equipment. The Mexican Congress began its review of a draft legislative package on organized crime submitted by Attorney General Lozano in late 1995, but will not be acted upon until it reconvenes in March 1996. Passage of this legislation would enhance the GOM's legal capabilities but resource restraints and corruption are likely to continue to limit operational effectiveness.

II. Status of Country

Mexico produces or imports many of the precursor and essential chemicals used in illicit drug production. Most of the imported chemicals, such as ephedrine which is used to manufacture methamphetamine, come from Europe. Mexican trafficking organizations now dominate the manufacture, sale and distribution of methamphetamine in the United States. Methamphetamine abuse is increasing rapidly in the U.S. Mexico is also an important source of designer drugs and illicit steroids. Drug abuse in Mexico remains low; alcohol, marijuana, inhalants and abuse of legal pharmaceuticals present the most serious problems. Drug use surveys conducted over the past several years with USG support revealed, a noticeable increase in illicit drug abuse in Mexico along the U.S. border and in large metropolitan and tourist areas.

Mexico has become one of the most important money laundering centers in the Western Hemisphere. It is also the most important transit point for bulk money shipments of U.S. drug proceeds of Mexican and other South American drug traffickers being moved south. The Mexican financial system remains highly vulnerable to drug-related financial transactions. Foreign and domestic currency movements are unmonitored. Any amount of deposited currency can be transferred by wire between domestic banks or between foreign and domestic institutions. There are no mandatory reporting requirements relating to cash deposited in banks or wire transfers. In 1994, the GOM imposed a requirement that individuals entering the country declare currency or financial instruments worth 10,000 dollars or more, but not for those leaving the country. The U.S. is not aware of the results in application of this requirement.

A severe, ongoing economic crisis following the peso devaluation in December 1994 had a serious effect on the ability of the GOM to allocate sufficient resources to many of its antidrug programs.

III. Country Actions Against Drugs in 1995

Mexican authorities made some progress in fighting drug-related official corruption in 1995. Attorney General Lozano said in August that Mexico is committed to terminating the power of drug lords and the corrupt police who help them to undermine social stability. In October the PGR released the results of probes into illicit police activities as part of an initiative to clean up and professionalize the public security institutions. Due to corruption in the ranks, Lozano ordered a clean sweep of the 60 Federal Judicial Police (MFJP) in the state of Chihuahua in November and its replacement by a contingent of Mexican Army officers on detail to the PGR. While the first phase of the PGR restructuring was completed at mid-year, AG Lozano stressed that addressing the deep- rooted problems of corruption, would take all six years of the Zedillo term.

Seeking to broaden the GOM's front against narcotraffickers, President Zedillo formally raised the profile of the Mexican military in counternarcotics activities during the summer of 1995. The military's previous counternarcotics mission had been limited to illicit drug crops, surveillance and destruction of clandestine landing strips, and responding to reports of aircraft landing and narcotics air drops. Zedillo enhanced the military's involvement in interdiction. A pilot program in the state of Chihuahua, save the Army oversight responsibilities in drug operations carried out with civilian law enforcement authorities.

Defense Minister Cervantes has taken a strong stance against corruption, especially with units conducting drug control missions, regularly rotating officers of units stationed along the border to inhibit the formation of relationships with smugglers. The U.S. and Mexican militaries initiated a series of technical discussions and exchanges in 1995 to improve bilateral cooperation in areas such as support to civilian counter-drug law enforcement.

A strong bilateral relationship with the United States is the cornerstone of President Zedillo's foreign policy. He has also reaffirmed the GOM's commitment to combatting drug trafficking and judicial reform. In the larger national context, President Zedillo is attempting to establish a greater degree of separation of powers between executive, legislative and judicial branches, to rationalize Mexico's duplicative systems of public security, and to eliminate corruption from the law enforcement and justice sectors and make them more accountable to the public. President Zedillo's first State of the Nation address September 1 stressed the rule of law, fighting narcotrafficking, and legislative initiatives. Cooperation in combatting international drug trafficking was one of the principal issues discussed by President Clinton and President Zedillo and other high-ranking officials during Zedillo's state visit to the U.S. in October.

The Zedillo Administration submitted several important legislative reform packages relating to combatting narcotrafficking and related crimes to the Mexican Congress during 1995, including:

• Money Laundering: In November, the Mexican Congress passed a series of changes to the fiscal codes, which established regulations for financial institutions aimed at combatting money laundering.

• Public Security: The Congress approved in December a Public Security law which provides for coordination of the national system of public security and professionalization of varied police entities.

• Organized Crime: The PGR submitted a criminal code reform package aimed at overcoming legal obstacles to attacking sophisticated criminal organizations, including provisions for use of modern investigative techniques such as electronic surveillance. The package was controversial and has been held over for further debate when the Mexican Congress reconvenes in March 1996.

The PGR conducted a series of seminars in Mexico City and six regional cities in August to educate legislators on the intricacies of money laundering and how to combat it. The Autonomous Technological Institute of Mexico (ITAM) and the USG co-sponsored a seminar on criminal conspiracy case studies in November to promote public debate on pending legislation by bringing together Mexican legislators with U.S., German, and Italian experts on anti-conspiracy laws. Late in 1995 the Mexican Chamber of Deputies analyzed the possibility of offering plea bargains to low-ranking narcotics suspects whose information might lead to the arrest of major drug traffickers, reducing the sentences of traffickers surrendering voluntarily, and rewarding citizens who contributed valuable information in fighting organized crime.

Accomplishments. Mexican authorities seized 22.2 mt of cocaine during 1995, on par with 1994 seizures, while marijuana seizures increased to 780 mt. The GOM seized 223 kgs of opium gum and 203 kgs of heroin. The expansion of the federal highway checkpoint program around the country helped to increase drug seizure results. GOM personnel also located and destroyed nine clandestine drug laboratories (7 methamphetamine, 1 cocaine and 1 MDMA/Ecstasy). The GOM reported eradicating 21,573 hectares of marijuana (252,622 plants) and eradicating 15,389 hectares of opium poppy (191,263 plants), more than 40 percent over 1994 rates. USG analysts examining the impact of this eradication effort, or "effective eradication" rate, determined that the GOM effort effectively eradicated 8,450 hectares of opium poppy and 11,750 hectares of marijuana in 1995, respective increases of 27 percent for marijuana and 22 percent for opium poppy (see chart). Aerial eradication operations by the PGR consumed a significant claim on PGR resources. In addition, manual eradication continued as the single biggest claim on Mexican army resources.

Mexico's air interdiction program, Operation "Halcon" (falcon), known in the U.S. as the Northern Border Response Force (NBRF), continued to build on strong U.S./Mexican cooperation in its operations against general aviation aircraft used by traffickers. The program also continued to expand its capabilities to move against overland and maritime trafficking as well. NBRF/Halcon operations resulted in the seizure of 18.5 mt of cocaine, as well as a 13.5 mt maritime seizure of Asian hashish, the largest ever in Latin America. They also resulted in the seizure of 11 aircraft, 13 vessels, and the arrest of 886 suspected traffickers.

Among the most significant traffickers arrested by GOM authorities in 1995 were: Hector Luis Palma Salazar, aka "El Guero," one of the most wanted criminals in Mexico and an important member of the Sinaloa Cartel headed by Amado Carrillo Fuentes; Jose Adolfo de la Garza-Robles (aka "El Borrado") believed by U.S. officials to be the principal contact between the Gulf Cartel and Colombian narcotraffickers; and Jose Luis Sosa Mayorga, aka "El Cabezon," a high-ranking Gulf Cartel member suspected of being the principal coordinator for narcotics flights coming into Mexico from Colombia and Guatemala. Humberto Garcia Abrego, considered to be the brains of the Gulf Cartel headed by his brother Juan Garcia Abrego, received a five-year and two-month prison sentence for money laundering. Joaquin Guzman Loera, aka "El Chapo," the target of the May 1993 attack at the Guadalajara airport by the Arellano Felix drug trafficking organization that killed Cardinal Posadas, was sentenced to 15 years in prison for charges stemming from June 1993 when he was apprehended in possession of cocaine in Guatemala and turned over to Mexico. The GOM confiscated suspected trafficker assets and froze local and regional bank accounts in order to further drug-related criminal investigations.

The PGR/DEA bilateral working group on precursor chemicals carried out investigations and seizures during 1995 which documented the large scale diversion of ephedrine in Mexico by polydrug cartels. Mexican drug cartels find the ephedrine/methamphetamine business attractive because the profit margins exceed those of cocaine and they are not dependent on Colombian or other trafficking groups for their supply. Although the GOM proposed legislation in 1993 based on the CICAD model regulations on precursor chemicals, the Mexican Congress adopted only minor changes in the general health law, which still lacks sufficient penalties to be an effective control on precursor chemicals.

Mexico initiated and coordinated two international counternarcotics surge operations in 1995. Operation "Triangle," brought Mexico, Guatemala and Belize together in a tri-border effort in June. Together, these governments seized over 1.5 mt of cocaine and set the stage for the follow-on Operation "Unidos." "Unidos" brought the entire Mexico/Central American region together, including police and military forces, for a ten-day operation in November which resulted in seizure of almost 5 mt of cocaine. These types of regional operations are unprecedented in Mexico's counterdrug efforts, especially in terms of the massive logistics and international cooperation required to implement them. One of the most important drug seizures by the Mexican Navy took place in August when 1,125 kg of cocaine was confiscated as a result of a firefight with narcotraffickers trying to cross the Usumacinta river from Guatemala into Mexico.

In May, following a six-month PGR investigation into money laundering activities, authorities arrested three individuals, presumed to be members of the Cali Cartel, at the Mexico City airport carrying 1.529 million dollars.

In May 1995, Mexican authorities arrested Raul Salinas, brother of former Mexican President Carlos Salinas and a senior official in his administration. He was arrested on charges of involvement in the murder of a senior ruling party official and graft. In an important development in November, Swiss authorities arrested Raul Salinas's wife when she attempted to withdraw funds from an account opened under an alias. Since then, Swiss officials have provided many additional leads to Attorney General Lozano's investigations. GOM investigations of Raul Salinas and former Deputy Attorney General Mario Ruiz Massieu, brother of the slain political official, are likely to lead to dramatic revelations about official corruption.

Cultivation and Production. Mexico is a leading supplier of marijuana and a significant supplier of heroin to the United States. The highest percentage of illegal drug cultivation was in the states of Sinaloa, Michoacan, Durango, Chihuahua, and Guerrero. The GOM does not prepare nation-wide crop estimates, but the Secretariat of National Defense uses imagery from aerial survey flights conducted by the Air Force to plan manual eradication operations by the Army. Mexico pursued UN Convention objectives aimed at reducing and eliminating illegal drug cultivations.

Agreements and Treaties. Mexico has bilateral narcotics accords with 21 countries and is a party to the 1988 UN Convention, the 1961 UN Single Convention on Narcotic Drugs and its 1972 Protocol, and the 1971 UN Convention on Psychotropic Substances. Mexican and Guatemalan representatives met in August to review their narcotics accord and exchange information on how the two countries could improve the fight against drugs. Mexico has signed several other international anti-drug agreements, such as the Declaration and Program of Action of Ixtapa (1990), which commits signatories to enact money laundering and chemical control legislation.

The United States and Mexico are parties to numerous treaties and agreements relating to cooperation in law enforcement. The Financial Information Exchange Agreement (FIEA), which went into effect in February 1995, provides for sharing of information on currency transactions through financial institutions. The two governments also signed an Asset Sharing Agreement. The Mutual Legal Assistance Treaty (MLAT) facilitates the exchange of evidence in connection with criminal matters; it functioned satisfactorily during 1995. The U.S./Mexico extradition treaty, which entered into force in 1978, provides the basis for cooperation on the return of fugitives. Although both countries are improving the mechanics of this system, extradition proceedings in Mexico are generally slow Mexican law bars the extradition of Mexican nationals except in exceptional circumstances. Mexico extradited four U.S. fugitives in 1995. The USG currently has several requests for the extradition of suspected drug traffickers. But extradition and/or domestic prosecution for narcotics offense is made extremely difficult (or impossible) because Mexico does not accept much of the evidence gathered against the defendants by USG authorities. At USG request, Mexico continued to arrest and deport a few undesirable aliens (U.S. citizens) to the United States in 1995, who otherwise would have been subject to lengthier, costlier extradition procedures.

Drug Flow/Transit. Traffickers continued to react quickly in 1995 to successful operations targetted at their transportation networks. U.S. and Mexican officials worked together to thwart the use by traffickers of jet cargo aircraft to smuggle multi-ton loads of cocaine into Mexico from Colombia. The smugglers' jet aircraft travel at speeds which easily outrun the overmatched detection and monitoring aircraft available to Mexico. They also complicate identification by blending with commercial cargo and passenger aviation. The payload capacity of these jet aircraft permit one flight to replace 10-15 general aviation flights. But traffickers continued to use general aviation flights as well, as seen by the capture of a Turbo Commander and over 800 kilograms of cocaine in the state of Jalisco in November. The USG is providing equipment and instruction to the PGR to enhance its night operation capabilities.

Demand Reduction Programs. The number of government, voluntary and community organizations involved in drug prevention, research, treatment, and education in Mexico increased in 1995, although many were forced to work with minimal resources. Mexico's drug treatment authorities are concerned that the depressed economy could lead to increased drug use. Mexican prevention programs, based on U.N. Convention demand reduction objectives, focused on educating, training and mobilizing the community. A program of surprise drug tests was implemented among the Mexico City auxiliary police in June in response to a series of accidents in which citizens had been injured by auxiliary police suspected of being under the influence of drugs. Mexico also pursued comprehensive drug abuse prevention programs by cooperating with other hemispheric nations through multilateral organizations.

IV. US Policy Initiatives and Programs

Bilateral Cooperation. In February, senior US and Mexican law enforcement and diplomatic officials began an unprecedented series of law enforcement plenaries. Six such meetings were held through the year, as well as a host of working group meetings stemming from the plenaries. Among the topics regularly discussed were counternarcotics cooperation, extradition, and related fugitive issues, prisoner transfer, money laundering, arms smuggling, and white collar crime. In October, U.S. Secretary of Defense Perry proposed the establishment of a Bilateral Working Group and the Mexican Government agreed. The purpose of the group is to determine areas for increased cooperation in areas of mutual interest, such as counternarcotics. In addition, GOM and USG officials also met often during the year on a formal and informal basis to discuss how to improve and increase cooperation in various areas of mutual interest.

In addition to ongoing cooperation on the Halcon/NBRF interdiction program, the US and Mexico worked together on a broad range of legal and law enforcement issues. Several major bilateral money laundering investigations were conducted by the GOM's treasury department (Hacienda) with USG counterpart agencies. These investigations involved suspect money laundering transactions totaling hundreds of millions of dollars.

Based on the Asset Sharing Agreement signed in May, the US transferred six million dollars in seized trafficker assets to the GOM in October for its support of a major money laundering investigation in the United States. President Zedillo earmarked the windfall for strengthening the continuing fight against drug trafficking and money laundering. During 1995, Mexico participated in three working-level conferences on money laundering during which a Communique was drafted; the Communique was issued at the Summit of the Americas ministerial-level money laundering conference in Buenos Aires, Argentina on December 2.

While the GOM has declined direct US assistance to its counternarcotics programs since 1993, the current economic crisis in Mexico, compounded by a perceived worsening of the drug threat to Mexican national security, led the GOM to accept some equipment and technical support to enhance programs such as Operation Halcon/NBRF. Remaining US funds from prior years were spent on enhancements to the PGR aviation maintenance base at Guadalajara, improvements to communications systems used in the interdiction program, and to conduct an administration of justice seminar in Mexico on successful conspiracy laws in three other nations. The GOM complied with its commitment to bilateral agreements and project memoranda of understanding covering these areas of bilateral cooperation. The two governments are also discussing the development of a pilot program in the area of administration of justice which would provide training and equipment for judges, prosecutors, and investigators.

To further strengthen its interdiction and eradication programs, the PGR leased 12 UH-1H's from the USG in October and extended the lease of 18 others. The PGR sent 29 of its pilots to the U.S. for advanced night- flight training at Ft. Rucker, Alabama to enhance the NBRF's ability to respond to nighttime trafficking. PGR UH-1H mechanics received training at the Interamerican Air Forces Academy, Lackland AFB, Texas. In November the PGR accepted a USG aviation training proposal for 1996 that will help prepare additional air crews and mechanics needed to operate and maintain the 12 UH-1H helicopters leased to the GOM in 1995.

The USG provided law enforcement training programs for GOM officials that focused on air, land, and sea interdiction, money laundering and precursor chemical investigative techniques, and customs procedures. Mexico hosted narcotics-related working visits from the U.S. Attorney General and Secretary of Defense and other high-ranking US officials in 1995.

The Road Ahead. While important steps were taken in Mexico during 1995 to counter the effect of drugs moving from and through Mexico into the United States, these efforts did not result in the level of disruption or deterrence desired by either government. The Mexican drug cartels are growing in wealth, sophistication, and the ability to project operations internationally. Despite improvements in eradication, illicit cultivation of opium poppy and marijuana continue to provide a significant source of raw material for the US drug market. The Mexican financial system facilitates money laundering and GOM officials lack the training and legal framework to effectively curb the diversion of chemicals. Despite determination at senior levels in the GOM to stop it, official corruption remains deeply entrenched and resistant, and comprises the major impediment to a successful counternarcotics program.

The USG will continue to pursue cooperative investigations and information sharing, and it will seek to provide technical and material assistance to the GOM to strengthen its counternarcotics infrastructure, its institutions, its domestic interdiction and eradication capabilities and its demand reduction programs. The USG will look to Mexico for even greater political commitment and greater openness to effective bilateral and multilateral cooperation and will expect to see greater progress, principally against major drug trafficking organizations and in development of effective national counternarcotics institutions. In its first year, the Zedillo Administration proposed a number of worthwhile initiatives that would contribute towards an effective anti-drug program and a productive bilateral partnership. It remains to be seen if Mexican governmental institutions can muster the capacity and will to carry through fully on these initiatives. The Garcia Abrego arrest and expulsion was an encouraging beginning to 1996.

[Editor's Note: EXCEL file; see Charts and Graphs Directory]