United States General Accounting Office

GAO Testimony

Before the Subcommittee on National Security,

International Affairs, and Criminal Justice, Committee on

Government Reform and Oversight, House of

Representatives; and the Caucus on International

Narcotics Control, U.S. Senate

For Release on Delivery

Expected at

2:00 p.m., EST

Wednesday,

March 18, 1998

DRUG CONTROL

Status of Counternarcotics

Efforts in Mexico

Statement of Benjamin F. Nelson, Director, International

Relations and Trade Issues, National Security and

International Affairs Division

GAO/T-NSIAD-98-129

Mr. Chairmen and Members of the Caucus and Subcommittee:

I am pleased to be here today to discuss our work on the counternarcotics

efforts of the United States and Mexico. Our most recent report on Mexico

was issued in June 1996.1

 My statement today will highlight the preliminary

findings from our ongoing work to update that report as requested by

Senator Grassley and this Subcommittee. I would like to discuss three

broad topics: (1) the nature of the drug threat from Mexico and results of

efforts to address this threat, (2) the planning and coordination of U.S.

counternarcotics assistance to the Mexican military, and (3) the need to

establish performance measures to assess the effectiveness of U.S. and

Mexican counternarcotics efforts. Our final report on these matters will be

issued shortly.

Summary Almost 2 years ago I testified before this Subcommittee about

U.S.-Mexican counternarcotics issues. During that hearing I stated that

Mexico was the primary transit country for cocaine entering the United

States from South America, as well as a major source country for heroin,

marijuana, and methamphetamines. That has not changed. Today, Mexico

continues to be the principal transit country for cocaine entering the

United States and, despite U.S. and Mexican counternarcotics efforts, the

flow of illegal drugs into the United States from Mexico has not

significantly diminished.

No country poses a more immediate narcotics threat to the United States

than Mexico, according to the State Department. The 2,000-mile

U.S.-Mexican border and the daunting volume of legitimate cross-border

traffic provide near-limitless opportunities for smuggling illicit drugs,

weapons, and proceeds of crime, and for escape by fugitives.

Since my last testimony on this subject, Mexico, with U.S. assistance, has

taken steps to improve its capacity to reduce the flow of illegal drugs into

the United States. Among other things, the Mexican government has taken

action that could potentially lead to the extradition of drug criminals to

the United States and passed new laws on organized crime, money

laundering, and chemical control. It has also instituted reforms in law

enforcement agencies and expanded the role of the military in

counternarcotics activities to reduce corruption—the most significant

impediment to successfully diminishing drug-related activities. While

1

Drug Control: Counternarcotics Efforts in Mexico (GAO/NSIAD-96-163, June 12, 1996). See also the

attached list of related GAO products.

Page 1 GAO/T-NSIAD-98-129 Drug Control
Mexico’s actions represent positive steps, it is too early to determine their

impact, and challenges to their full implementation remain. No Mexican

national has actually been surrendered to the United States on drug

charges, new laws are not fully implemented, and building competent

judicial and law enforcement institutions continues to be a major

challenge.

Since fiscal year 1996, the Department of Defense (DOD) has provided the

Mexican military with $76 million worth of equipment, training, and spare

parts.2

 The Mexican military has used this equipment to improve its

counternarcotics efforts. However, due, in part, to inadequate planning

and coordination within DOD, the assistance provided has been of limited

effectiveness and usefulness. For example, the UH-1H helicopters

provided to Mexico in 1996 and 1997 have limited utility for some

counternarcotics missions, and delays in delivering spare parts for these

helicopters have resulted in operational rates of between 35 and

54 percent. Similarly, the two ships that the U.S. Navy sold to the Mexican

military have remained inoperable, as they were not properly outfitted

when they were delivered. We believe that improved planning and

coordination could increase Mexico’s counternarcotics effectiveness.

Although the Mexican government has agreed to a series of actions to

improve its counternarcotics capacity, and the United States has begun to

provide a larger level of assistance, at the present time there is no system

in place to assess their effectiveness. Even though the United States and

Mexico have recently issued a binational drug control strategy, it does not

include performance measures. We are encouraged that the Office of

National Drug Control Policy (ONDCP) has recently recognized the need for

such measures and has indicated that it plans to develop methods for

evaluating U.S. and Mexican counternarcotics performance as part of the

binational drug control strategy by the end of this year.

Background The United States has assisted the Mexican government in its

counternarcotics efforts since 1973, providing about $350 million in aid.

Since the later 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.

2

Between fiscal years 1996 and 1997, the State Department provided about $11 million to support

Mexican law enforcement efforts and plans to provide another $5 million in fiscal year 1998.

Page 2 GAO/T-NSIAD-98-129 Drug Control
In January 1993, the government of Mexico initiated a new drug policy

under which it declined U.S. counternarcotics assistance and assumed

responsibility for funding its own counternarcotics efforts. This policy

remained in effect until 1995 when, according to the State Department,

economic conditions and the growing drug-trafficking threat prompted the

Mexican government to again begin accepting U.S. counternarcotics

assistance for law enforcement organizations.

Among other things, 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. As part of this process, the United States has

established specific objectives for evaluating the performance of these

countries. In 1997, the United States set the following objectives for

evaluating Mexico’s counternarcotics cooperation as part of the 1998

certification process: (1) reducing the flow of drugs into the United States

from Mexico, (2) disrupting and dismantling narco-trafficking

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 cooperating with the United States. In February 1998, the

President certified Mexico as fully cooperating with the United States.

Progress of Mexico’s

Counternarcotics

Efforts

Since our 1996 report, Mexico has undertaken actions intended to enhance

its counternarcotics efforts and improve law enforcement and other

capabilities. The results of these actions are yet to be realized because

(1) many of them are in the early stages of implementation and (2) some

are limited in scope. According to U.S. and Mexican officials, it may take

several years or more before the impact of these actions can be

determined. Some of the actions include (1) increasing counternarcotics

cooperation with the United States; (2) initiating efforts to extradite

Mexican criminals to the United States; (3) passing an organized crime law

that enhanced the government’s authority against money laundering and

illegal use and diversion of precursor and essential chemicals; and

(4) implementing measures aimed at reducing corruption, such as

increasing the role of Mexico’s military forces in law enforcement

activities.

U.S.-Mexico

Counternarcotics

Cooperation

With respect to U.S.-Mexico counternarcotics cooperation, since we

reported on these matters in 1996 additional activities have taken place.

For example, the High-Level Contact Group on Drug Control, comprised of

Page 3 GAO/T-NSIAD-98-129 Drug Control
senior officials from both governments responsible for drug control, has

met several times. Results of these meetings include the following:

• A U.S.-Mexico Binational Drug Threat Assessment was issued in May 1997,

which addressed illegal drug demand and production, drug trafficking,

money laundering, and other drug-related issues.

• A joint U.S.-Mexico Declaration was issued in May 1997 that includes

pledges from both governments to work toward reducing illegal drug

demand, production, and distribution; improving interdiction capacity; and

controlling essential and precursor chemicals, among other issues.

• On February 6, 1998, a joint U.S.-Mexico binational drug strategy was

issued.

Executive and Legislative

Actions

Mexican executive and legislative actions include instituting extradition

efforts, passing various laws to address illegal drug-related activities, and

passing several anticorruption measures.

Extradition The United States and Mexico have had a mutual extradition treaty since

1980. Although no Mexican national has ever been surrendered to the

United States on drug-related charges, since 1996 Mexico has approved the

extradition of 4 of 27 Mexican nationals charged with drug-related

offenses. Two are currently serving criminal sentences in Mexico, and two

are appealing their convictions in Mexico. The remaining drug-related

extradition requests include 5 persons currently under prosecution in

Mexico and 14 persons still at large. It is not clear whether any Mexican

national will be surrendered on such charges before the end of 1998.

Another example of increased cooperation is the November 1997 signing

of a joint United States and Mexico “temporary extradition protocol.” This

protocol allows suspected criminals who are charged in both countries to

be temporarily surrendered for trial while evidence is current and

witnesses are available. The protocol is not yet in effect because it

requires legislative approval in the United States and Mexico, and it has

not been submitted to either body.

Organized Crime Law In November 1996, Mexico passed an organized crime law that provides

authority for Mexican law enforcement organizations to employ modern

techniques to combat crime. These include authority to use plea

bargaining and confidential informants, establish a witness protection

program, and conduct controlled deliveries and court-authorized wiretaps.

The law also has provisions for asset seizures and forfeitures. U.S.

Page 4 GAO/T-NSIAD-98-129 Drug Control
embassy officials stated that the passage of the organized crime law

represents a major advancement in Mexico’s law enforcement capabilities.

According to U.S. and Mexican officials, the impact of the organized crime

law is not likely to be fully evident for some time. For example, Mexican

and U.S. officials told us that the process of conducting investigations is

inherently lengthy and that the capabilities of many Mexican personnel

who are implementing and enforcing the law are currently inadequate.

Mexican agencies are investigating a number of drug-related cases. U.S.

embassy officials stated that, although some guidelines and policies have

been established, additional ones still need to be developed, including the

use of wiretaps and the witness protection program.

While this law provides the law enforcement community with the

necessary tools to fight organized crime, including drug trafficking, ONDCP

reported in September 1997 that the law still lacks some important

elements needed to meet the 1988 United Nations (U.N.) Vienna

convention and other international agreements. For example, according to

ONDCP, the law lacks provisions allowing the seizure of assets of a

suspected criminal who has either died or fled Mexico. Furthermore,

according to U.S. and Mexican officials, Mexico also needs to develop 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. Several U.S. agencies are assisting

Mexico in this area.

Money Laundering In May 1996, money laundering was made a criminal offense, with

penalties of up to 22 years in prison. The law requires banks and other

financial institutions to report transactions over $10,000 U.S. dollars and to

obtain and retain customer account information. Under the prior law,

money laundering was a tax offense, there were no reporting

requirements, and violators were only subject to a fine.

However, U.S. and Mexican officials are concerned that the new law does

not cover so called “structuring”—intentionally making transactions just

below the $10,000 reporting threshold. In addition, there is no reporting

requirement on currency leaving the country.

Between May and December 1997, the Mexican government initiated 

27 money laundering cases. To date, one case has been prosecuted, and

the remaining 26 cases are still under investigation. In the one case that

was prosecuted, the charges were dismissed because a federal judge ruled

Page 5 GAO/T-NSIAD-98-129 Drug Control
that no link could be established between an illegal activity and the

money. The Mexican government has appealed the judge’s decision.

Chemical Controls In May 1996, trafficking in drug precursor and essential chemicals was

made a criminal offense. Although some chemicals that the United Nations

recommends be controlled were not included in the law, Mexico passed

additional legislation in December 1997 that included all chemicals, thus

bringing Mexico into full compliance with U.N. and other international

agreements. In addition, Mexico has 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.

The impact of the new chemical control law is not yet evident. Currently,

the development of an administrative infrastructure for enforcing it is

under way. Various U.S. agencies including the Departments of Justice and

State have provided technical assistance and training to help Mexico carry

out the law.

Actions to Reduce

Corruption

It is well established and the President of Mexico acknowledges that

narcotics-related corruption is pervasive and entrenched within the

criminal justice system, and he has made rooting it out a national priority.

Beginning in 1995, the President of Mexico expanded the role of the

Mexican military in counternarcotics activities. The Mexican military, in

addition to eradicating marijuana and opium poppy, has also taken over

some law enforcement functions. For example, airmobile special forces

units have been used to search for drug kingpins and detain captured drug

traffickers until they can be handed over to civilian law enforcement

agencies.

In September 1996, the President of Mexico publicly acknowledged that

corruption is deeply rooted in the nation’s institutions and general social

conduct. He added that the creation of a new culture of respect for law

must start with public officials and affirmed his administration’s intent to

gradually eliminate official corruption. To do so, the President began to

initiate law enforcement reforms.

First, the primary Mexican government agency involved in

counternarcotics-related activities has been reorganized. In 1996 the

Attorney General’s office, commonly called the PGR, began a

Page 6 GAO/T-NSIAD-98-129 Drug Control
reorganization connected to a long-term effort to clean up and

professionalize federal law enforcement agencies. As part of this action,

the State Department reported that over 1,250 officials were dismissed for

incompetence and/or corruption. U.S. and Mexican officials stated that

about 200 of these officials have subsequently been rehired by the PGR

because Mexico’s labor laws prevented the PGR from removing some of

these personnel.

Further, in February 1997, the Mexican military arrested General Jesus

Gutierrez Rebollo, the head of the National Institute for Combat Against

Drugs—the Mexican equivalent of the Drug Enforcement

Administration—for corruption. In April 1997, the Attorney General

dissolved the Institute and dismissed a number of its employees. A new

organization, known as the Special Prosecutor for Crimes Against Health,

was established to replace the Institute. This organization includes two

special units: 3

• The Organized Crime Unit, with an authorized strength of 300, was

established under the organized crime law to conduct investigations and

prosecutions aimed at criminal organizations, including drug trafficking

activities.

• The Bilateral Task Forces, with an authorized strength of 70, are

responsible for investigating and dismantling the most significant

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

Finally, in 1997, the Attorney General instituted a screening process that is

supposed to cover all PGR personnel including those who work for the

special units. This process consists of personal background and financial

checks, medical and psychological screening, urinalysis, and regular

polygraph testing. However, U.S. embassy officials stated that the

screening requirements do not apply to judges, most units of the military,

and other key law enforcement organizations engaged in drug control

activities. U.S. agencies are supporting this initiative by providing

equipment, training, and technical assistance. Moreover, U.S. embassy

personnel are concerned that Mexican personnel who failed the screening

process are still working in the Special Prosecutor’s office and the special

units.

Although all of Mexico’s actions are positive steps to reducing drug-related

activities, there are still many issues that need to be resolved. For

example,

3

These units were carried over from the Institute upon its dissolution.

Page 7 GAO/T-NSIAD-98-129 Drug Control
• U.S. and Mexican officials indicated that personnel shortages exist in the

Special Prosecutor’s office and the special units;

• the special units face operational and support problems, including

inadequate Mexican government funding for equipment, fuel, and salary

supplements for personnel assigned to the units, and the lack of standard

operating procedures;

• U.S. law enforcement agents assigned to the Bilateral Task Forces cannot

carry arms in Mexico; and

• Mexico continues to have difficulty building competent law enforcement

institutions because of low salaries and little job security.

Planning and

Coordination of

U.S.-Provided

Assistance

U.S.-provided assistance has enhanced the counternarcotics capabilities of

Mexico’s military. However, the effectiveness and usefulness of some

equipment provided or sold to Mexico is limited due to inadequate

planning and coordination among U.S. agencies, particularly military

agencies within DOD.

In October 1995, the U.S. Secretary of Defense visited Mexico in an effort

to strengthen military-to-military relationships between the two countries.

As a result of this visit, the Mexican military agreed to accept U.S.

counternarcotics assistance. Table 1 shows DOD’s counternarcotics

assistance provided to the Mexican military during fiscal years 1996-97.

Page 8 GAO/T-NSIAD-98-129 Drug Control
Table 1: DOD Counternarcotics

Assistance Provided to the Mexican

Military (fiscal years 1996-97)

Dollars in millions

Source of assistance

Value of

assistance Type of assistance

Excess defense articlesa $ 5.0 20 UH-1H helicopters

Section 506(a)(2) drawdownb 37.0 53 UH-1H helicopters, 4 C-26 aircraft,

2-year UH-1H spare parts package

Section 1004c 26.0 About 70 percent used for training;

remainder for purchase of equipment

Section 1031d 8.0 UH-1H spare parts

aThe Foreign Assistance Act of 1961 authorizes DOD to provide excess equipment to the

governments of major drug-producing countries.

bSection 506(a)(2) of the Foreign Assistance Act of 1961 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.

cSection 1004 of the Defense Authorization Act of 1989 authorized the Secretary of Defense to

provide counternarcotics training and other types of assistance to drug-producing countries.

dSection 1031 of the Defense Authorization Act of 1997 authorized the Secretary of Defense to

provide $8 million in counternarcotics assistance to Mexico in fiscal year 1997.

Sources: U.S. embassy in Mexico and the Defense Security Assistance Agency.

All of the helicopters and the C-26 aircraft were delivered to the Mexican

military during 1996 and 1997. According to DOD officials, Mexico has also

received some logistics and training support; however, they could not

provide us with the exact level of support given because this data was not

readily available. DOD plans to provide about $13 million worth of

counternarcotics assistance under section 1004 of the Defense

Authorization Act of 1989 to Mexico’s military in fiscal year 1998.

Furthermore, the Mexican military used its own funds to purchase two

Knox-class frigates from the U.S. Navy through the Foreign Military Sales

Program.4

 These two frigates were valued at about $7 million and were

delivered to Mexico in 1997.

While some of the equipment has helped improve Mexico’s capabilities,

some has been of limited usefulness. Additionally, inadequate logistics

support to the Mexican military has hindered its efforts to reduce

drug-related activities in Mexico. The following examples illustrate some

of the problems.

4

The Arms Export Control Act authorizes the Defense Department to sell U.S. defense articles and

services to eligible countries. The countries may procure items using their own funds, U.S. grant funds,

or U.S. loan funds.

Page 9 GAO/T-NSIAD-98-129 Drug Control
• The U.S. embassy has reported that the UH-1H helicopters provided to

Mexico to improve the interdiction capability of Mexican army units are of

little utility above 5,000 feet, where significant drug-related activities,

including opium poppy cultivation, are occurring.

• The average operational rates for the UH-1H helicopters have remained

relatively low, averaging between 35 and 54 percent, because of

inadequate logistics support such as delays in the delivery of spare parts.

• The four C-26 aircraft were provided to Mexico without the capability to

perform the intended surveillance mission.5

 U.S. embassy officials stated

that the Mexican military has not decided how many of the aircraft will be

modified to perform the surveillance mission, but modifying each aircraft

selected for surveillance will cost at least $3 million.

Regarding the two Knox-class frigates, when they were delivered in August

1997, the ships lacked the equipment needed to ensure the safety of the

crew, thus rendering the ships inoperable. The U.S. Navy estimated that it

will cost the Mexican Navy about $400,000 to procure this equipment and

that it will be at least 2 years before the ships will be operational. Even

though the U.S. Navy knew that the ships would not be operational when

they were delivered, DOD began providing the Mexican Navy with about

$1.3 million worth of training to 110 personnel related to the two

Knox-class frigates. U.S. embassy officials stated that this training will be

completed in March 1998. The Mexican Navy will reassign these personnel

until the ships can be used. According to DOD officials, they approved the

training because they were not informed by the U.S. Navy that the ships

would not be operational.

We believe that planning and coordination of U.S. counternarcotics

assistance to Mexico could be improved. Thus, we believe that the

Secretary of State, in close consultation with the Secretary of Defense and

the National Security Council, should take steps to ensure that future

assistance is, to the maximum extent possible, compatible with the

priority requirements identified in U.S. counternarcotics programs and

that adequate support resources are available to maximize the benefits of

the assistance.

5

The C-26 aircraft is a military version of the Fairchild metro 10-passenger turboprop aircraft used by

the Air National Guard. It was provided by the National Security Council to enhance the surveillance

capability of the various drug-producing and -transit countries, including Mexico.

Page 10 GAO/T-NSIAD-98-129 Drug Control
Performance

Measures for U.S. and

Mexican Drug Control

Efforts

Without measures of effectiveness, it is difficult for U.S. decisionmakers to

evaluate the progress that the United States and Mexico are making to

reduce the flow of illegal drugs into the United States. We have previously

noted the need for ONDCP to develop drug control plans that include

performance measures to allow it to assess the effectiveness of antidrug

programs.

In February 1997, we recommended that ONDCP complete its long-term

drug control plan, including quantifiable performance measures and

multiyear funding needs linked to the goals and objectives of the

international drug control strategy.6

 Subsequently, in February 1998, ONDCP

issued a national drug control strategy covering a 10-year period. In

March 1998, ONDCP issued general performance measures, but they do not

include targets and milestones for specific countries, such as Mexico.

As I noted earlier, the United States and Mexico issued a joint U.S.-Mexico

binational drug strategy in February 1998. Although the binational strategy

is indicative of increased U.S.-Mexico cooperation, it does not contain

critical performance measures and milestones for assessing performance.

State Department officials stated that the bilateral process of establishing

performance measures and milestones is incremental and will be

addressed during 1998. ONDCP officials told us that they plan to issue

specific targets and milestones for the binational strategy by the end of

this year.

This concludes my prepared remarks. I would be happy to respond to any

questions you may have.

6

Drug Control: Long-Standing Problems Hinder U.S. International Efforts (GAO/NSIAD-97-75, Feb. 27,

1997).

Page 11 GAO/T-NSIAD-98-129 Drug Control
Related GAO Products

Drug Control: Observations on Counternarcotics Activities in Mexico

(GAO/T-NSIAD-96-239, Sept. 12, 1996).

Drug Control: Counternarcotics Efforts in Mexico (GAO/NSIAD-96-163,

June 12, 1996).

Drug Control: Observations on Counternarcotics Efforts in Mexico

(GAO/T-NSIAD-96-182, June 12, 1996).

Drug War: Observations on U.S. International Drug Control Efforts

(GAO/T-NSIAD-95-194, Aug. 1, 1995).

Drug War: Observations on the U.S. International Drug Control Strategy

(GAO/T-NSIAD-95-182, June 27, 1995).

Drug Control: Revised Drug Interdiction Approach Is Needed in Mexico

(GAO/NSIAD-93-152, May 10, 1993).

Drug Control: U.S.-Mexico Opium Poppy and Marijuana Aerial Eradication

Program (GAO/NSIAD-88-73, Jan. 11, 1988).

Gains Made in Controlling Illegal Drugs, Yet the Drug Trade Flourishes

(GAO/GGD-80-8, Oct. 25, 1979).

Opium Eradication Efforts in Mexico: Cautious Optimism Advised

(GAO/GGD-77-6, Feb. 18, 1977).

(711303) Page 12 GAO/T-NSIAD-98-129 Drug Control
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