Background

According to ONDCP and other officials in the interagency  counternarcotics community, the 2,000-mile U.S.-Mexico land border  presents numerous challenges to preventing illicit drugs from reaching the  United States. With 43 legitimate crossing points, the rest of the border  consists of hundreds of miles of open desert, rugged mountains, the Rio  Grande, and other physical impediments to surveillance, making it easy to  smuggle illegal drugs into the United States.
Since the 1970s, the United States has collaborated with and provided  assistance to Mexico for counternarcotics programs and activities. The  goal over the years has been to disrupt the market for illegal drugs, making  it more difficult for traffickers to produce and transport illicit drugs to the  United States. Specifically, the United States has provided Mexico with  assistance for a range of projects, including interdicting cocaine shipments  from South America; stemming the production and trafficking of opium  poppy, as well as marijuana; and, more recently, controlling precursor  chemicals used to manufacture methamphetamine.
In the past, Mexico has chosen to combat drug trafficking with reduced  assistance from the United States, and Mexican sensitivity about its  national sovereignty has made it difficult for the two countries to  coordinate counternarcotics activities. However, beginning in the mid- 1990s, cooperation began to improve, culminating in 1998 in the signing of  a Bi-National Drug Control Strategy. Since then, the two countries have  continued to cooperate through meetings of a U.S.-Mexico Senior Law  Enforcement Plenary, among other contacts.

	Illicit Drug Production and Trafficking by Mexican Drug Organizations Have Continued Virtually Unabated

Mexico is the conduit for most of the cocaine reaching the United States,  the source for much of the heroin consumed in the United States, and the  largest foreign supplier of marijuana and methamphetamine to the U.S.  market. According to U.S. and Mexican estimates, which vary from year to  year, more cocaine flowed toward the United States through Mexico  during 2006 than in 2000, and more heroin, marijuana, and  methamphetamine were produced in Mexico during 2005 than in 2000. In  addition, although reported seizures of these drugs within Mexico and  along the U.S. southwest border generally increased, according to the U.S.  interagency counternarcotics community, seizures have been a relatively  small percentage of the estimated supply.
As we have reported previously, acknowledged shortcomings in the illicit  drug production and seizure data collected and reported by various U.S.  government agencies mean that the data cannot be considered precise.  However, they can provide an overall indication of the magnitude and  nature of the illicit drug trade. Based on the available data, the following  describes the trends since 2000 on the amount of cocaine arriving in  Mexico for transshipment to the United States; the amounts of heroin and  marijuana produced in Mexico; and reported seizures of these illicit drugs  and methamphetamine in Mexico and along the U.S.-Mexico border. (See  app. I for a more detailed table of the data.)
Cocaine: Virtually all the cocaine consumed in the United States is  produced along the South American Andean ridge—primarily, in  Colombia. The U.S. interagency counternarcotics community prepares an  annual assessment (the Interagency Assessment of Cocaine Movement  ) that, among other things, estimates the amount of cocaine  departing South America toward the United States. From 2000 to 2006, the  IACM reported an increase in the estimated amount of cocaine flowing  through Mexico to the United States—from 66 percent in 2000 to 77  percent in 2003 and 90 percent in 2006.
Between 2000 and 2002, the cocaine estimated arriving in Mexico rose  about 23 percent—from 220 to 270 metric tons. In 2003, it declined over 60  metric tons, or about 22 percent. For 2004-2006, the IACM did not provide  “point” estimates for cocaine flow because of certain methodological  concerns; rather, a range was provided for each year. The midpoint of the  IACM range of cocaine estimated arriving in Mexico during 2006 (about  380 metric tons) was about 160 metric tons more than the estimate for  2000. Using the midpoint of the IACM ranges, the amount of cocaine  estimated arriving in Mexico during 2000-2006 averaged about 290 metric  tons per year.
Despite the apparent increases in cocaine arriving in Mexico, the amount  of cocaine reported seized in Mexico and along the U.S.-Mexico border for  2000-2006 did not increase proportionately, with 43 metric tons reported  seized in 2000, a low of 28 metric tons seized in 2003, and a high of 44  metric tons in 2005. Reported seizures for 2000-2006 averaged about  36 metric tons a year, or about 13 percent of the estimated amount of  cocaine arriving in Mexico.
Heroin: During 2000-2005, the estimated amount of heroin produced for  export in Mexico averaged almost 19 metric tons a year—ranging from a  low of 9 metric tons in 2000 to a high of 30 metric tons in 2003. Although  the estimated amount of heroin produced declined in 2004 and 2005, the  2005 estimate (17 metric tons) was nearly double the estimated amount  produced in 2000. Reported heroin seizures in Mexico and along the U.S.- Mexico border averaged less than 1 metric ton or less than 5 percent a  year of the estimated export quality heroin produced in Mexico between  2000 and 2005.
Marijuana: During 2000-2005, the estimated amount of marijuana  produced in Mexico each year averaged about 9,400 metric tons—ranging  from a low of 7,000 metric tons in 2000 to a high of 13,500 metric tons in  2003. Although estimated production declined to 10,100 metric tons in  2005, this was over 3,000 metric tons more than the estimated production  in 2000. Reported seizures of marijuana in Mexico and along the U.S.- Mexico border ranged from about 2,150 metric tons in 2000 to nearly 3,500  in 2003—averaging less than 2,900 metric tons a year, or about 30 percent  of the annual production estimates.
Methamphetamine: Neither the United States nor the government of  Mexico prepares estimates of the amount of methamphetamine produced  in Mexico. However, U.S. officials told us that the large increases in  reported methamphetamine seizures from 2000 through 2006 point to  significantly greater amounts being manufactured. On the basis of the  reported data, seizures along the U.S.-Mexico border rose more than  five times—from an estimated 500 kilograms in 2000 to almost 2,900  metric tons in 2004 and over 2,700 kilograms in 2006.

		Corruption Persists within the Mexican Government

In 2001, State reported that pervasive corruption within the government of  Mexico was the greatest challenge facing Mexico’s efforts to curb drug  trafficking. Since then State has reported on the Mexican government’s  efforts to reduce corruption. Nevertheless, increasing illicit drug proceeds  from the United States—estimated by the National Drug Intelligence  Center at between $8 billion and $23 billion in 2005—has afforded  Mexican DTOs considerable resources to subvert government institutions,  particularly at the state and local level. U.S. and Mexican government  officials and various other observers, including academics, investigative  journalists, and nongovernmental organizations that study drug trafficking  trends in Mexico, told us that profits of such magnitude enable drug  traffickers to bribe law enforcement and judicial officials.
Since 2000, Mexico has undertaken several initiatives to address  corruption. For instance, in 2001, when Mexican authorities created the  Federal Investigative Agency (AFI) in the Mexican Attorney General’s  Office, they disbanded the Federal Judicial Police, which was widely  considered corrupt. Mexico also conducted aggressive investigations into  public corruption, resulting in the arrest and prosecution of officials, as  well as the dismissal and suspension of others.
Despite these actions, corruption remains a major factor complicating  efforts to fight organized crime and combat drug trafficking. U.S. and some  Mexican law enforcement agents told us that in certain parts of the  country, they do not have vetted counterparts to work with. Moreover, AFI  represents only about one-third of Mexico’s estimated 24,000 federal law  enforcement officials. According to U.S. officials, the majority—about  17,000—belong to the Federal Preventive Police, whose personnel are not  subject to the same requirements as those of AFI for professional  selection, polygraph and drug testing, and training.
Partly to address the problem of corruption, Mexican President Felipe  Calderón’s government has begun to consolidate various federal civilian  law enforcement entities into one agency and triple the number of trained,  professional federal law enforcement officers subject to drug, polygraph,  and other testing. This initiative will combine AFI and the Federal  Preventive Police, along with officers from other agencies, into one agency  known as the Federal Police Corps, which would operate in cities and  towns of more than 15,000 people. However, this initiative will not affect  the vast majority of Mexico’s law enforcement officials, most of whom are  state and local employees and who, according to one source, number  approximately 425,000.

		Mexican DTOs Control Drug Trafficking in Mexico and Have Extended Their Reach into the United States

According to the Drug Enforcement Administration (DEA), four main  DTOs control the illicit drug production and trafficking in Mexico and  operate with relative impunity in certain parts of the country:    The Federation, which operates from the Mexican state of Sinaloa, is an  alliance of drug traffickers that U.S. and Mexican officials told us may  have the most extensive geographic reach in Mexico.
The Tijuana Cartel, also known as the Arellano Felix Organization after its  founder, operates from the border city of Tijuana in the Mexican state of  Baja California. Its activities center in the northwestern part of Mexico,  where, according to local investigative journalists and U.S. officials, it  exerts considerable influence over local law enforcement and municipal  officials.
The Juarez Cartel is based in Ciudad Juarez, in the border state of  Chihuahua. According to DEA officials, the Juarez Cartel has extensive  ties to state and local law enforcement officials.
The Gulf Cartel operates out of Matamoros on the Gulf of Mexico, in the  border state of Tamaulipas. According to DEA officials, the Gulf Cartel has  infiltrated the law enforcement community throughout Tamaulipas,  including the border city of Nuevo Laredo, which is a principal transit  point for commercial traffic to the United States. The Gulf Cartel has also  employed a criminal gang referred to as the Zetas, which is primarily  composed of rogue former Mexican military commandos that are known  for their violent methods.
According to DEA and other U.S. officials, in recent years Mexican DTOs  have taken over the transportation of cocaine shipments from South  America previously managed by Colombians.  In addition, according to the  National Drug Threat Assessment, Mexican DTOs have expanded their  presence in drug markets throughout the United States, moving into cities  east of the Mississippi River previously dominated by Colombian and  Dominican drug traffickers. According to National Drug Intelligence  Center officials, Mexican DTOs tend to be less structured in the United  States than in Mexico, but have regional managers throughout the country,  relying on Mexican gangs to distribute illicit drugs. Further, DTOs are  becoming more sophisticated and violent.
With significant resources at their disposal, Mexican DTOs are developing  more sophisticated drug trafficking methods and to evade U.S. maritime  detection and interdiction efforts, such as using elaborate networks of go- fast boats and refueling vessels. According to Justice officials and  documents, Mexican drug traffickers are also taking advantage of  advances in cell phone and satellite communications technology, which  have allowed them to quickly communicate and change routes once they  suspect their plans have been compromised. In addition, the traffickers  have also begun making more use of tunnels under the U.S.-Mexico  border—another indication of the increasing sophistication of DTO  operations. From 2000 to 2006, U.S. border officials found 45 tunnels— several built primarily for narcotics smuggling. According to U.S. officials,  tunnels found in the last 6 years are longer and deeper than in prior years.
Drug-related violence in Mexico has continued to increase in recent years.
President Calderón highlighted the importance of improving public  security by punishing crime, and the administration of former President  Vicente Fox (2000-2006) actively targeted major drug kingpins. While this  strategy does not appear to have significantly reduced drug trafficking in  Mexico, it disrupted the cartels’ organizational structure, presenting  opportunities to gain control of important transit corridors leading to the  United States, such as Nuevo Laredo. Such struggles led to increased  violence throughout Mexico, with drug-related deaths estimated at over  2,000 in 2006. This trend has continued in 2007, with drug-related deaths  estimated at over 1,100 as of June 2007. In addition, an increasing number  of drug-related incidents targeting law enforcement officers and  government officials have been documented in Mexico. For example, in  May 2007, the newly appointed head of Mexico’s drug intelligence unit in  the Attorney General’s office was shot and killed in a street ambush in  Mexico City.
Journalists have also been targeted as a result of investigative articles  written about DTO activities. Due to the risks associated with reporting on  narco-trafficking, Mexico was recently ranked as the second most  dangerous country in the world for journalists, after Iraq.

	U.S. Assistance Helped Mexico Improve Its Counternarcotics Efforts, but Coordination Can Be Improved

Table 1 depicts U.S. assistance to support counternarcotics-related  programs and activities in Mexico during fiscal years 2000 through 2006.  Other U.S. agencies also supported Mexican counternarcotics activities,  but did not provide funding.
State’s Bureau for International Narcotics and Law Enforcement Affairs  (INL) funds supported the purchase of a wide range of items and activities,  including scanning machinery for security purposes at ports and border  crossings; vehicles, computers, software, and other equipment used to  improve Mexico’s law enforcement infrastructure; interdiction and  eradication initiatives; aircraft and related equipment and maintenance;  training for Mexican law enforcement and judicial officials; and other  programs designed to promote U.S. counternarcotics goals. DEA’s funding  primarily supported field offices throughout Mexico, from which DEA  agents coordinated bilateral cooperation with Mexican federal, state, and  local law enforcement officials, allowing both countries to collect drug  intelligence, conduct investigations, prosecute drug traffickers, and seize  assets. Defense supported programs designed to detect, track, and  interdict aircraft and maritime vessels suspected of transporting illicit  drugs—primarily cocaine from South America. Last, USAID’s funding for  Mexico promoted reform of Mexico’s judicial system at the state level, as  well as government transparency, which broadly supports U.S.  counternarcotics objectives.
According to the U.S. embassy in Mexico, one of its primary goals is to  help the Mexican government combat transnational crimes, particularly  drug trafficking. Over the years, U.S. assistance has supported four key  strategies: (1) to apprehend and extradite drug traffickers, (2) to counter  money laundering by seizing the assets of DTOs, (3) to strengthen the  application of the rule of law, and (4) to interdict or disrupt the production  and trafficking of illicit drugs. Since 2000, U.S. assistance has made some  progress in each of these areas but has not significantly cut into drug  trafficking, and Mexico and the United States can improve cooperation  and coordination in some areas.

		Extraditions of Mexican Drug Traffickers Have Increased

In January 2007, the administration of President Calderón extradited  several high-level drug kingpins, such as Osiel Cardenas, the head of the  Gulf Cartel, whose extradition long had been sought by U.S. authorities.  U.S. officials cited Mexico’s decision to extradite Cardenas and other drug  kingpins as a major step forward in cooperation between the two  countries and expressed optimism about the prospects for future  extraditions. As shown in table 2, U.S. extradition efforts have progressed  gradually through 2005, but increased more than 50 percent in 2006 and  through mid-October, 2007.

		Efforts to Counter Money Laundering Are Progressing

In 2002, Immigration and Customs Enforcement (ICE) and DEA supported  Mexican authorities who established a vetted unit within AFI for  investigating money laundering, consisting of about 40 investigators and  prosecutors. These AFI officials collaborated with ICE on money  laundering and other financial crime investigations and developed leads.  With funding provided by the Narcotics Affairs Section (NAS), ICE  developed several training initiatives for Mexican law enforcement  personnel targeting bulk cash smuggling via commercial flights to other  Latin American countries. From 2002 to 2006, in collaboration with ICE,  Mexican Customs and AFI’s money laundering unit seized close to           $56 million in illicit cash, primarily at Mexico City’s international airport.
In 2004, the Mexican Congress passed financial reform legislation as part  of a comprehensive strategy to prevent and combat money laundering and  terrorist financing. In May of that year, the Financial Intelligence Unit  under Mexico’s Treasury Secretariat brought together various functions  previously undertaken by different Treasury Secretariat divisions with the  goal of detecting and preventing money laundering and terrorist financing.  To support these efforts, NAS provided over $876,000 for equipment and to  refurbish office space for the Financial Intelligence Unit. Since 2004, the  Financial Intelligence Unit has established closer monitoring of money  service businesses and financial transactions. According to Financial  Intelligence Unit officials, this resulted in the seizure of millions of dollars.
U.S. Treasury officials noted improvements in the level of cooperation  with Mexican authorities under the Fox administration. For example, they  highlighted how the Financial Intelligence Unit began issuing accusations  against individuals named on Treasury’s Office of Foreign Assets Control’s  (OFAC) Specially Designated Nationals and Blocked Persons list of drug  kingpins and suspected money launderers. These accusations were  forwarded to the Mexican Attorney General’s Office for possible legal  action. Treasury officials also expressed optimism that continued  collaboration with Mexican authorities under the Calderón administration  would lead to more aggressive action on asset forfeitures.
DEA also works closely with AFI to identify the assets of Mexican DTOs.  In March and April 2007, DEA conducted asset forfeiture and financial  investigative training to the newly formed Ad Hoc Financial Investigative  Task Force in Mexico’s Attorney General’s Office. In March 2007, DEA  efforts in an investigation of chemical control violations resulted in the  seizure of $207 million in currency at a residence in Mexico City. In  another investigation, DEA assistance led Mexican authorities to seize in  excess of $30 million in assets from a designated kingpin and his DTO.  DEA officials share Treasury’s optimism that continued collaboration with  Mexican authorities will lead to significant seizures of drug trafficking  assets.

		USAID, DEA, INL, and Other U.S. Agencies Support Mexico’s Rule-of- Law Efforts

As part of its rule-of-law portfolio in Mexico, USAID has promoted  criminal justice reforms at the state level since 2003. The criminal  procedures system that prevails in Mexico today is based on the  Napoleonic inquisitorial written model, with judges working  independently using evidence submitted in writing by the prosecution and  defense to arrive at a ruling. According to U.S. officials, this system has  been vulnerable to the corrupting influence of powerful interests,  particularly criminal organizations. To promote greater transparency in  judicial proceedings, USAID has supported initiatives to introduce  adversarial trials in Mexico. Such trials entail oral presentation of  prosecution and defense arguments before a judge in a public courtroom.  Since this system is open to public scrutiny, USAID officials explained that  it should be less vulnerable to corruption. To date, USAID has provided  technical assistance to 14 Mexican states to implement criminal justice  reforms, including oral trials.
U.S. agencies have also pursued legal and regulatory reforms related to  precursor chemicals used in the production of methamphetamine in  Mexico. Specifically, the United States has encouraged the government of  Mexico to implement import restrictions on methamphetamine precursor  chemicals and impose stricter controls on the way these substances are  marketed and sold once in Mexico. In 2004, the Mexican Federal  Commission for the Protection against Sanitary Risk (COFEPRIS)  conducted a study that revealed an excess of imports of pseudoephedrine  products into Mexico. Subsequently, Mexico implemented several controls  on pseudoephedrine. In 2005, COFEPRIS officials reduced legal imports of  pseudoephedrine by over 40 percent—from 216 metric tons in 2004 to  about 132. In 2006, pseudoephedrine imports were further reduced to 70  metric tons. According to ONDCP, as of mid-October, 2007 Mexico had  reduced its imports of pseudoephedrine to 12 metric tons.

		U.S. Support for Mexican Interdiction Efforts Has Helped, but Improvements Are Needed

The fourth strategy under the embassy’s counternarcotics goal is to  support Mexican efforts to interdict illicit drugs. U.S. assistance has  provided for (1) infrastructure upgrades for law enforcement entities; (2)  professional training for law enforcement and judicial personnel; (3)  military coordination, particularly for maritime interdiction and  surveillance; and (4) aviation support for interdiction and surveillance.  Overall, these U.S.-supported programs have strengthened Mexican  counternarcotics efforts, but areas for improvement remain, particularly  regarding cooperation and coordination with Mexican counternarcotics  agencies and the provision of U.S. aviation support.

			Infrastructure Upgrades and Equipment

From 2000 to 2006, a significant share of INL’s assistance to Mexico— about $101 million of nearly $169 million—supported the embassy’s  interdiction strategy for Mexico through the purchase of equipment to  enhance border security measures and upgrade the infrastructure of  various Mexican law enforcement entities. In October 2001, when the Fox  administration created AFI under the jurisdiction of the Attorney General’s  Office, NAS provided infrastructure and equipment for counternarcotics  operations, including computer servers, telecommunications data  processing hardware and software, systems for encrypting  telecommunications, telephone systems, motorcycles, and a  decontamination vehicle for dismantling methamphetamine processing  labs. In addition, NAS funded the renovation of a building where AFI staff  were located, as well as the construction of a state-of-the-art network for  tracking and interdicting drug trafficking aircraft. According to State  reports, since 2001, AFI has figured prominently in investigations, resulting  in the arrests of numerous drug traffickers and corrupt officials, becoming  the centerpiece of Fox administration efforts to transform Mexican federal  law enforcement entities into effective institutions.
In July 2003, the Mexican Attorney General’s Office reorganized its drug  control planning capacity under the National Center for Analysis, Planning  and Intelligence (CENAPI). According to INL, NAS also equipped  CENAPI with a state-of-the-art computer network for collecting, storing,  and analyzing crime-related information. CENAPI analysts noted that  software provided by NAS allowed them to process large volumes of  data—including background files on more than 30,000 criminals—and  make considerable progress in investigations of unsolved crimes.
In 2005, NAS provided computer equipment for COFEPRIS to monitor  imports of methamphetamine precursor chemicals at major international  points of entry into Mexico. This complemented efforts by the United  Nations Office on Drugs and Crime to enhance COFEPRIS’s capabilities to  track shipments and imports of precursor chemicals and controlled  medicines through a National Drug Control System database.
NAS also funded the procurement of nonintrusive inspection equipment  for Mexican customs officials to scan container trucks, railroad cars, and  other cargo containers for illicit contraband at Mexican ports and the  border. Such border security measures also support counternarcotics  efforts, since drug traffickers are known to exploit opportunities provided  by legitimate U.S.-Mexico cross-border trade to smuggle illicit drugs.  Border security funding was also used to enhance “secure rapid inspection  lanes” at six U.S.-Mexico border crossings.
In addition to support provided by NAS, Justice’s DEA provided  specialized equipment to the Attorney General’s Office and other Mexican  law enforcement entities to allow them to detect and properly handle  hazardous materials at clandestine methamphetamine laboratories. This  included safety suits required for clandestine lab cleanups, evidence  containers, and drug-testing chemical kits. DEA also donated eight  specially designed vehicles to handle toxic chemicals typically found at  facilities where methamphetamine is produced. These trucks were  recently refurbished and will be based at locations throughout Mexico  where a large number of methamphetamine labs are suspected of  operating.

			Law Enforcement and Judicial Personnel Training

U.S. agencies have sought to strengthen Mexico’s interdiction capabilities  through training for Mexican law enforcement, judicial, and military  personnel. According to State, the overall purpose of this training is to  help Mexican police personnel and prosecutors combat more effectively  all transnational crimes affecting U.S. interests, including drug trafficking  and money laundering. NAS has taken the lead in funding such training,  and courses are typically taught by U.S. law enforcement agencies and  various contractors in Mexico and the United States. From 2000 through  2006, NAS provided approximately $15 million for such training. DEA has  also funded some training for members of its vetted units, and Defense has  provided training for Mexican military officials.
According to U.S. and Mexican officials, this training was an integral part  of the Mexican Attorney General’s efforts to develop a professional cadre  of investigative agents within AFI, and it also supported more general  efforts by the Fox administration to upgrade the capabilities and ethical  awareness of Mexican law enforcement officials at the federal, state, and  local levels. By 2006, the United States had supported training for over  2,000 federal, state, and local law enforcement officials, with a goal of  training 2,000 more in 2007.

			Interdiction Cooperation and Coordination Can Be Improved

From 2000 to 2006, Defense has spent a total of about $58 million for  equipment and training for the Mexican military, particularly to help the  Mexican Navy interdict aircraft and vessels suspected of transporting  illicit drugs. From 2000 to 2006, Defense provided training for about 2,500  Mexican military personnel in the use of certain kinds of equipment, as  well as training to enable them to coordinate with U.S. aircraft and vessels.  The training provided was designed to strengthen the Mexican military’s  ability to detect, monitor, and interdict suspected drug trafficking aircraft  and vessels, as well as help professionalize Mexico’s military and improve  relations between the U.S. and Mexican militaries.
Defense initiatives have facilitated coincidental maritime operations  between the United States and Mexico that have resulted in greater  cooperation between the two countries, particularly with respect to  boarding, searching, and seizing suspected vessels transiting Mexican  waters. In recent years, the Mexican Navy has regularly responded to U.S.  information on suspect vessels transiting Mexican waters—46 times in  2006, for example. In addition, the Mexican Navy agreed on several  occasions to temporarily place Mexican liaison officers aboard U.S. Coast  Guard vessels, as well as placing U.S. Coast Guard officers aboard  Mexican vessels. The Mexican Navy also permitted U.S. law enforcement  personnel to participate in some dockside searches and post-seizure  analyses.
However, the United States and Mexico have not agreed to a bilateral  maritime cooperation agreement that would allow U.S. law enforcement  personnel to board and search Mexican-flagged vessels on the high seas  suspected of trafficking illicit drugs without asking the government of  Mexico for authority to board on a case-by-case basis. According to  Defense officials, a request to board and search a suspicious Mexican- flagged vessel—or one whose captain reports it as Mexican-registered— can be complex and time-consuming, involving, at a minimum, the Foreign  Affairs Secretariat as well as the Mexican Navy. Waiting for approval or  the arrival of the Mexican Navy typically creates delays, which can result  in the loss of evidence as the illicit drugs are thrown overboard or the  vessel is scuttled or escapes. In addition, while the Mexican Navy has  proved willing to respond to U.S. information on suspicious vessels  transiting Mexican waters, according to Defense officials, the Mexican  Navy does not normally conduct patrols more than 200 nautical miles from  shore.
In addition, according to embassy and Defense officials, Defense has little  contact with Mexico’s Defense Secretariat (SEDENA), which oversees  the Mexican Army and Air Force. According to these officials, the Mexican  Army has conducted counternarcotics operations throughout Mexico,  including in Acapulco, Nuevo Laredo, and Tijuana, to reduce the violence  caused by drug trafficking, and it manually eradicates opium poppy and  marijuana. But, according to Defense officials, none of these efforts took  advantage of U.S. expertise or intelligence. In the past, some eradication  efforts were also done by the Mexican Attorney General’s Office, which  worked with its U.S. counterparts. Now, however, the Calderón  administration plans to consolidate all eradication efforts under SEDENA,  which makes greater cooperation with SEDENA all the more important.
In addition, from 2001 until late 2006, Customs and Border Protection  (CBP) provided eight Citation jets for detection and monitoring of  suspected drug trafficking aircraft along the U.S.-Mexican border under a  program known as Operation Halcon in cooperation with AFI. According  to CBP officials, in recent years Operation Halcon was a successful  interdiction effort that helped prevent drug traffickers from flying aircraft  near the U.S.-Mexico border, which made it more difficult to transport  illicit drugs to the United States. They also noted that CBP and AFI  personnel worked very closely and one CBP official worked full time at  the AFI Command Center. Moreover, CBP officials maintained that the  embassy infrastructure, operational staffing, and relationships developed  under Halcon provided critical daily interface with the Mexican  authorities, facilitating quick responses to operational needs along the  border and the sharing of intelligence. Overall, in 2005, between 15 and  25 percent of the 294 suspect aircraft identified by Operation Halcon  resulted in seizures of aircraft and other vehicles or arrests.
In March 2006, the United States sought to formalize Operation Halcon to  limit liability for U.S. pilots involved in the patrols in the event of an  accident. However, the Mexican government did not respond with terms  acceptable to CBP, and in November 2006, the government of Mexico  suspended the program. As a result, U.S. embassy officials said that fewer  suspect flights are being identified and interdicted. According to CBP  officials, since the suspension, seizures of illicit drugs along the U.S.- Mexico border have increased, and this, according to DEA, CBP, and other  officials, is an indication that more drugs are finding their way to northern  Mexico.

			U.S. Aviation Support for Interdiction Can Be Better Coordinated

From 2000 to 2006, NAS provided about $22 million, or 13 percent of INL’s  obligations for Mexico, to support aviation programs for counternarcotics  efforts by the Attorney General’s Office and one program for the Mexican  Air Force. Since 1990, NAS has provided 41 Vietnam-era UH-1H  helicopters, of which 28 remain in service, to the Mexican Attorney  General’s Office to transport law enforcement personnel interdicting drug  trafficking aircraft landing in Mexico. Since 2000, NAS has expended    $4.5 million to refurbish 8 of the aircraft. According to State, the aircraft  have served as the transportation workhorse for the Attorney General’s air  services section, flying a total of approximately 14,000 hours from 2001 to  2006. However, according to the embassy, the UH-1H program did not  meet its target of interdicting 15 percent of all aircraft detected in the  transport of illicit drugs and crops—in 2005, 4 percent were interdicted. In  addition, the helicopters’ readiness rates have progressively declined from  about 90 percent in January 2000 to 33 percent in January 2007. NAS and  Mexican officials attributed the reduced readiness rates to a lack of  funding and a lack of spare parts for these aging aircraft, which Defense  will stop supporting in 2008. In January 2007, NAS officials told us that  State/INL does not intend to provide any further support for the UH-1Hs.
Beginning in 2004, NAS provided the Attorney General’s Office 12  Schweizer 333 helicopters, of which 11 remain operational. The total  expended for these helicopters was $14.2 million, which included a 2-year  support package. Equipped with forward-looking infrared sensors for  nighttime operations as well as television cameras, the Schweizers are  designed to provide the Attorney General’s Office with a reconnaissance,  surveillance, and command and control platform. According to State  officials, the Schweizers were used in Nuevo Laredo and other locations,  providing support for surveillance operations, flying a total of  approximately 1,750 hours from September 2004 to February 2007.
Originally, NAS had planned to provide 28 Schweizers, deploying them to  various points throughout Mexico. However, according to State officials,  due to funding limitations and changed priorities, NAS capped the number  at 12. In addition, Mexican Attorney General officials told us that they  would have preferred a helicopter with both a surveillance capability and  troop transport capacity.
From 2000 to 2006, NAS also expended about $4.2 million to repair,  maintain, and operate four C-26 aircraft provided by the United States to  Mexico in 1997. The aircraft did not originally come equipped with a  surveillance capability, and the Mexican Air Force had indicated it had no  plans to invest in the necessary equipment. In 1998, we reported that the  Mexican Air Force was not using the aircraft for any purpose. After  Mexico upgraded these aircraft with forward-looking infrared radar in  2002, NAS funded maintenance of the aircraft and sensors, as well as  training for sensor operators and imagery analysts. Part of the NAS  funding was also used to provide contractor logistical support, including  spare parts.

		Southwest Border Strategy’s Implementation Plan

In March 2006, ONDCP, in conjunction with the National Security Council  and other agencies involved in the U.S. interagency counternarcotics  community, developed a Southwest Border Strategy to help reduce the  flow of illicit drugs entering the United States across the southwest border  with Mexico. The stated objectives of the strategy, which we reviewed in  June 2007, were to    enhance and better coordinate the collection of intelligence;    effectively share information, when appropriate, with Mexican officials;  investigate, disrupt, and dismantle Mexican DTOs; interdict drugs and other illicit cargo by denying entry by land, air, and sea  routes;   deny drug traffickers their profits by interdicting bulk currency  movements and electronic currency transfers;   enhance Mexico’s counterdrug capabilities; and  reduce the corruption that facilitates illicit activity along and across the  border.
In addition, a plan was developed to implement the strategy. As of August  2007, ONDCP officials told us that the implementation plan was being  revised to respond to the Calderón administration’s new initiatives. On  October 2, 2007, the Director of ONDCP released a summary of the  strategy that referred to the implementation plan. According to the  summary, the implementation plan lays out the desired end state,  estimated resource requirements, action plan, and metrics for each of the  seven objectives in the strategy.

	Conclusions

U.S. counternarcotics assistance to Mexico since 2000 has helped Mexico  strengthen its law enforcement institutions and capacity to combat illicit  drug production and trafficking. However, overall, the flow of illicit drugs  to the United States has not abated, and U.S. and Mexican authorities have  seized only a relatively small percentage of the illicit drugs estimated  transiting through or produced in Mexico. Moreover, reducing drug-related  corruption remains a challenge for the Mexican government, and Mexican  DTOs have increasingly become a threat in both Mexico and the United  States. Mexican officials have recognized the increasing threat and  indicated that combating the illicit drug threat in cooperation with the  United States is a priority.
As we noted in our recent report, the Calderón administration has signaled  an interest in working with the United States to reduce drug production  and trafficking. At the time, to respond to the Calderon administration’s  initiatives, ONDCP and the U.S. counternarcotics community was revising  the Southwest Border Strategy’s implementation plan to emphasize greater  cooperation with Mexico. We recommended that the Director of ONDCP,  as the lead agency for U.S. drug policy, in conjunction with the cognizant  departments and agencies in the U.S. counternarcotics interagency  community, coordinate with the appropriate Mexican officials before  completing the Southwest Border Strategy’s implementation plan to help  ensure Mexico’s cooperation with any efforts that require it and address  the cooperation issues we identified.
ONDCP concurred with the recommendation and it has since assured us  that the interagency counternarcotics community is actively engaged with  their Mexican counterparts. In commenting on our report, ONDCP  emphasized that the Southwest Border Strategy’s implementation plan  must be a living document with the flexibility to adjust as resources  become available.
Mr. Chairman and members of the subcommittee, this concludes my  prepared statement. I will be happy to answer any questions you may have.

	Contact and Staff Acknowledgements

For questions regarding this testimony, please contact Jess T. Ford at  (202) 512-4268 or fordj@gao.gov. Albert H. Huntington, III, Assistant  Director; Joe Carney; and José M. Peña, III made key contributions in  preparing this statement.

Appendix I: Estimated Amounts of Illicit Drugs Transiting or Produced in Mexico and Seized, Calendar Years 2000-2006

	Arriving in Mexico for transshipment to the United States

260 to 460300 to 460The Drug Enforcement Administration’s El Paso Intelligence Center (and the IACM) defines drug  seizures at the U.S. southwest border to include seizures at the U.S.-Mexico border or within 150  miles on the U.S. side of the border, including 88 border counties in Arizona, California, New Mexico,  and Texas.
This estimate does not include heroin that is produced in Colombia and may transit Mexico on the  way to the United States.
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Summary:
Why GAO Did This Study

The overall goal of the U.S. National Drug Control Strategy, which is prepared by the White House Office of National Drug Control Policy (ONDCP), is to reduce illicit drug use in the United States. One of the strategy's priorities is to disrupt the illicit drug marketplace. To this end, since fiscal year 2000, the United States has provided about $397 million to support Mexican counternarcotics efforts. According to the Department of State (State), much of the illicit drugs consumed in the United States flows through or is produced in Mexico. GAO examined (1) trends in Mexican drug production and trafficking since calendar year 2000 and (2) U.S. counternarcotics support for Mexico since fiscal year 2000. This testimony is based on a recently issued report (GAO-07-1018) that addresses these issues.

What GAO Found

According to the U.S. interagency counternarcotics community, hundreds of tons of illicit drugs flow from Mexico into the United States each year, and seizures in Mexico and along the U.S. border have been relatively small in recent years. The following illustrates some trends since 2000: (1) The estimated amount of cocaine arriving in Mexico for transshipment to the United States averaged about 290 metric tons per year. Reported seizures averaged about 36 metric tons a year. (2) The estimated amount of export quality heroin and marijuana produced in Mexico averaged almost 19 metric tons and 9,400 metric tons per year, respectively. Reported heroin seizures averaged less than 1 metric ton and reported marijuana seizures averaged about 2,900 metric tons a year. (3) Although an estimate of the amount of methamphetamine manufactured in Mexico is not prepared, reported seizures along the U.S. border rose from about 500 kilograms in 2000 to highs of about 2,800 kilograms in 2005 and about 2,700 kilograms in 2006. According to U.S. officials, this more than fivefold increase indicated a dramatic rise in supply. In addition, according to State, corruption persists within the Mexican government and challenges Mexico's efforts to curb drug production and trafficking. Moreover, Mexican drug trafficking organizations operate with relative impunity along the U.S. border and in other parts of Mexico, and have expanded their illicit business to almost every region of the United States. U.S. assistance since fiscal year 2000 has helped Mexico strengthen its capacity to combat illicit drug production and trafficking. Among other things, extraditions of criminals to the United States increased; thousands of Mexican law enforcement personnel were trained; and controls over chemicals to produce methamphetamine were strengthened. Nevertheless, cooperation with Mexico can be improved. The two countries do not have an agreement permitting U.S. law enforcement officers to board Mexican-flagged vessels suspected of transporting illicit drugs on the high seas; an aerial monitoring program along the U.S. border was suspended because certain personnel status issues could not be agreed on; State-provided Vietnam-era helicopters have proved expensive and difficult to maintain and many are not available for operations; and a State-supported border surveillance program was cut short due to limited funding and changed priorities. In 2006, in response to a congressional mandate, ONDCP and other agencies involved in U.S. counternarcotics efforts developed a strategy to help reduce the illicit drugs entering the United States from Mexico. An implementation plan was prepared but is being revised to address certain initiatives recently undertaken by Mexico. Based on our review of the plan, some proposals require the cooperation of Mexico; but, according to ONDCP, they had not been addressed with Mexican authorities at the time of our review.