U.S. GOVERNMENT PRINTING OFFICE

62–622 CC WASHINGTON : 2000

OVERSIGHT OF MEXICAN COUNTERNARCOTICS

EFFORTS: ARE WE GETTING FULL COOPERATION?

HEARING

BEFORE THE

SUBCOMMITTEE ON CRIMINAL JUSTICE,

DRUG POLICY, AND HUMAN RESOURCES

OF THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED SIXTH CONGRESS

FIRST SESSION

MARCH 24, 1999

Serial No. 106–85

Printed for the use of the Committee on Government Reform

(

Available via the World Wide Web: http://www.gpo.gov/congress/house

http://www.house.gov/reform

(II)

COMMITTEE ON GOVERNMENT REFORM

DAN BURTON, Indiana, Chairman

BENJAMIN A. GILMAN, New York

CONSTANCE A. MORELLA, Maryland

CHRISTOPHER SHAYS, Connecticut

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

STEPHEN HORN, California

JOHN L. MICA, Florida

THOMAS M. DAVIS, Virginia

DAVID M. MCINTOSH, Indiana

MARK E. SOUDER, Indiana

JOE SCARBOROUGH, Florida

STEVEN C. LATOURETTE, Ohio

MARSHALL ‘‘MARK’’ SANFORD, South

Carolina

BOB BARR, Georgia

DAN MILLER, Florida

ASA HUTCHINSON, Arkansas

LEE TERRY, Nebraska

JUDY BIGGERT, Illinois

GREG WALDEN, Oregon

DOUG OSE, California

PAUL RYAN, Wisconsin

JOHN T. DOOLITTLE, California

HELEN CHENOWETH, Idaho

HENRY A. WAXMAN, California

TOM LANTOS, California

ROBERT E. WISE, JR., West Virginia

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

PATSY T. MINK, Hawaii

CAROLYN B. MALONEY, New York

ELEANOR HOLMES NORTON, Washington,

DC

CHAKA FATTAH, Pennsylvania

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

ROD R. BLAGOJEVICH, Illinois

DANNY K. DAVIS, Illinois

JOHN F. TIERNEY, Massachusetts

JIM TURNER, Texas

THOMAS H. ALLEN, Maine

HAROLD E. FORD, JR., Tennessee

JANICE D. SCHAKOWSKY, Illinois

———

BERNARD SANDERS, Vermont

(Independent)

KEVIN BINGER, Staff Director

DANIEL R. MOLL, Deputy Staff Director

DAVID A. KASS, Deputy Counsel and Parliamentarian

CARLA J. MARTIN, Chief Clerk

PHIL SCHILIRO, Minority Staff Director

SUBCOMMITTEE ON CRIMINAL JUSTICE, DRUG POLICY, AND HUMAN RESOURCES

JOHN L. MICA, Florida, Chairman

BOB BARR, Georgia

BENJAMIN A. GILMAN, New York

CHRISTOPHER SHAYS, Connecticut

ILEANA ROS-LEHTINEN, Florida

MARK E. SOUDER, Indiana

STEVEN C. LATOURETTE, Ohio

ASA HUTCHINSON, Arkansas

DOUG OSE, California

PATSY T. MINK, Hawaii

EDOLPHUS TOWNS, New York

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

ROD R. BLAGOJEVICH, Illinois

JOHN F. TIERNEY, Massachusetts

JIM TURNER, Texas

EX OFFICIO

DAN BURTON, Indiana HENRY A. WAXMAN, California

ROBERT B. CHARLES, Staff Director and Chief Counsel

GIL MACKLIN, Professional Staff Member

AMY DAVENPORT, Clerk

MICHEAL YEAGER, Minority Counsel

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C O N T E N T S

Page

Hearing held on March 24, 1999 ............................................................................ 1

Statement of:

Bowman, Chief Theron, chief of police, Arlington, TX; and Sheriff Ted

G. Kamatchus, Marshall County, IA ........................................................... 29

Weitzman, Jeff, Canine Enforcement Officer, U.S. Customs Service, Orlando Field Division; and William F. Gately, former Agent, U.S. Customs Service .................................................................................................. 48

Letters, statements, et cetera, submitted for the record by:

Cummings, Hon. Elijah E., a Representative in Congress from the State

of Maryland, letter dated March 22, 1999 .................................................. 74

Gately, William F., former Agent, U.S. Customs Service, prepared statement of ........................................................................................................... 57

Kamatchus, Sheriff Ted G., Marshall County, IA, prepared statement

of ..................................................................................................................... 37

Mica, Hon. John L., a Representative in Congress from the State of

Florida, prepared statement of .................................................................... 4

Mink, Hon. Patsy T., a Representative in Congress from the State of

Hawaii:

Article dated March 16, 1999 ................................................................... 19

Letter dated March 23, 1999 .................................................................... 10

Prepared statement of ............................................................................... 12

Proposal to decertify Mexico’s drug status .............................................. 7

Weitzman, Jeff, Canine Enforcement Officer, U.S. Customs Service, Orlando Field Division, prepared statement of .............................................. 50

(1)

OVERSIGHT OF MEXICAN COUNTERNARCOTICS EFFORTS: ARE WE GETTING

FULL COOPERATION?

WEDNESDAY, MARCH 24, 1999

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON CRIMINAL JUSTICE, DRUG POLICY,

AND HUMAN RESOURCES,

COMMITTEE ON GOVERNMENT REFORM,

Washington, DC.

The subcommittee pet, pursuant to notice at 1:35 p.m., in room

2203, Rayburn House Office Building, Hon. John Mica (chairman

of the subcommittee) presiding.

Present: Representatives Mica, Barr, Gilman, Souder, Hutchinson, Ose, Mink, Cummings, and Kucinich.

Staff present: Robert B. Charles, staff director/chief counsel; Gil

Macklin, professional staff member; Amy Davenport, clerk; Michael

Yeager, minority counsel; and Jean Gosa, minority staff assistant.

Mr. MICA. Good afternoon. I’d like to call this meeting of the

Subcommittee on Criminal Justice, Drug Policy, and Human Resources to order. Today, we are conducting a hearing entitled,

‘‘Oversight of Mexican Counternarcotics Efforts: Are We Getting

Full Cooperation?’’

I would like to start today’s proceedings with an opening statement followed by our ranking member, and we will be joined by

other Members as they return from votes on the floor.

As I have stated many times, I believe that we cannot tackle the

problems of drug abuse and the concurrent social problems of crime

and significant cost to our country without an approach that addresses, simultaneously, education, treatment, prevention, enforcement, interdiction, and eradication.

I believe this must be a comprehensive effort. That is why this

subcommittee has conducted five hearings on drug policy this year,

and today we will be conducting our sixth.

Combating illegal narcotics production and trafficking is an absolutely critical element in reducing the supply of drugs. With 60 to

70 percent of the hard drugs entering the United States coming

from Mexico, it is vital that the Congress examine the question of

Mexico’s drug certification.

Today’s hearing will serve as an analysis of what Mexico is doing

to combat that illegal drug trafficking. We have four witnesses who

currently serve, or who have served, on the front line in the war

on drugs.

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Despite a long and productive relationship with our close ally to

the south, drugs coming from Mexico are ending up on American

streets. Mexican trafficking organizations continue to be a major

source for cocaine entering the United States. Additionally, according to DEA’s Heroin Signature Program, Mexico has now become

a major producer of high-purity heroin. Mexico is now the source

of 14 percent of all heroin seized in the United States. Alarmingly,

Mexico continues to serve as a major source of foreign methamphetamine, as well as the major source of foreign marijuana entering the United States.

An article last September in the Minneapolis Star Tribune stated

that about 85 percent of the methamphetamine in Minnesota is

smuggled from Mexico. As we will hear today, the Mexican methamphetamine is ravishing communities in our Midwest, and we

will hear an example of Iowa here today.

Drugs coming from Mexico undermine our communities, spread

violence, and finance gang violence. In fact, it is destroying young

lives at a record level in the United States.

The statistics on drug use, particularly among our young people,

continue to be worrisome and sobering to every American and

every Member of Congress. Drug use is highest among our 12th

graders, with more than 50 percent of them having tried an illicit

drug, and more than one in four labelled as current users.

Today our subcommittee will examine Mexico’s progress in the

fight against illegal drugs. Without question, no country in the

world poses a more immediate drug threat to the United States

than does Mexico.

Despite some of the reports that progress has been made against

drug trafficking, Mexico still has not complied with several requests made by the Congress less than 2 years ago. Mexico still has

not signed a bilateral maritime agreement, and corruption remains

a major impediment. Additionally, our U.S. law enforcement agents

are not allowed to adequately protect or defend themselves. The

Government of Mexico still has failed to extradite a single major

drug trafficker.

Today, what is of great concern to me, is that Mexico has lost

vast areas, entire states and regions, to the control of narco-traffickers. And from our reports, this has taken place in both the Baja

and Yucatan peninsulas as well as other areas in Mexico. We have

reports that these areas are now under complete control of narcotraffickers. If this trend continues, Mexico could be on the verge of

turning over their sovereignty to drug traffickers.

Based on facts and information we have learned so far—both in

open and closed hearings, meetings and briefings—it is difficult for

me to believe that this administration would certify Mexico as fully

cooperating. This action is most troubling. Some of the statistics

that we have learned from 1998, last year, are even more troubling.

Boat seizures were down 29 percent from 1997. Opium/heroin seizures were down 56 percent. Cocaine seizures were down 35 percent.

We have attempted to be fair and balanced in investigating

Mexico’s progress. However, what we have found should concern

every Member of Congress. That is why today I am sponsoring,

along with the chairman of the House International Relations ComVerDate 11-MAY-2000 13:44 Mar 05, 2001 Jkt 066703 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 E:\HEARINGS\62622 pfrm02 PsN: 62622
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mittee, Mr. Gilman, a resolution that proposes decertifying Mexico

with a national interest waiver. It is my belief that, despite the fact

that the 30-day provision of the Foreign Assistance Act will technically run its course this week, we need to continue considering

and examining Mexico’s lack of progress and consider possible decertification.

This provision is intended to extend the 30-day window of review

so that this Congress may continue its deliberation and consideration of this very vital national security issue. The drug issue

should not be limited to 30 days of attention every year. It must

remain at the top of our agenda. We owe at least this much to the

American people.

These are some of the issues that remain at the top of our agenda, and today we hope to obtain a better understanding of the disastrous situation that we face with these drugs coming in from

Mexico from the witnesses who will testify before our subcommittee.

That concludes my opening comments, and I am pleased now to

yield at this time to our ranking member, the gentlelady from Hawaii, Mrs. Mink.

[The prepared statement of Hon. John L. Mica follows:]

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Mrs. MINK. I thank you, Mr. Chairman, for offering the Congress

and this subcommittee, in particular, an opportunity to hear the

other side of the picture, having to do with the law enforcement activities within the United States.

I believe that this search for information, with respect to our law

enforcement efforts and the testimony of corruption and deception

and coverup that I understand is also going to be in the testimony

today, is a very important part of our full understanding of the crisis which this country is facing.

I regret the actions that you and Mr. Gilman have taken today,

evidently—I just received your notice—that you are filing a resolution calling for the extension of the period which is contained in the

statute limiting the issue of decertification to 30 days from the date

of notice by the President.

[The information referred to follows:]

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Mrs. MINK. I feel that the whole issue of drug policy, and the

scourge that it has become over the years within this country, is

a responsibility that all nations have to deal with. It is properly addressed by this subcommittee and by the full committee. I hope to

be able to continue cooperating with you, Mr. Chairman, on that

very course, because I do think it is an important area for our consideration. And I welcome the opportunity to hear from the witnesses today.

I apologize, Mr. Chairman, as I may have to leave to testify before the Rules Committee when my turn is called.

In that connection, I ask unanimous consent that a letter from

the Justice Department, from Dennis K. Burke, Acting Assistant

Attorney General, be placed into the record at this point. It is

merely calling to our attention the fact that some of the matters

relating to Operation Casablanca is in a trial status with it commencing before the U.S. District Court in the Central District of

California on Monday, March 29. And they are asking us to exercise caution and discretion in the testimony and comments and

questions that we might ask, with reference to that investigation.

Mr. MICA. Without objection, that will be made part of the

record.

[The information referred to follows:]

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Mrs. MINK. The second matter that I would like to have placed

into the record at this point relates, again, to Operation Casablanca. And it is from the Commissioner of Customs, Raymond W.

Kelly, a letter dated March 23, addressed to you, the Honorable

John Mica, chairman of this subcommittee, and goes to the matter

of the March 16, 1999, New York Times article, which he wishes

to have clarified.

Thank you.

Mr. MICA. Without objection, that will also be made part—— Mrs. MINK. Thank you, Mr. Chairman.

Mr. MICA [continuing]. Of the record.

[The prepared statement of Hon. Patsy T. Mink and the information referred to follows:]

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Mr. MICA. I thank the gentlelady.

Mr. SOUDER. Mr. Chairman.

Mr. MICA. Yes?

Mr. SOUDER. A parliamentary question—I just read Mr. Kelly’s

letter. It seems that the New York Times article ought to be inserted because it doesn’t really make sense unless—— Mrs. MINK. Yes, with that addition—— Mr. MICA. Without—— Mrs. MINK. I ask unanimous consent that the New York Times’ article also be placed into the record.

Mr. MICA [continuing]. The New York Times’ article by Mr. Golden will also be made part of the record.

[The information referred to follows:]

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Mr. MICA. Thank you, and we understand you will be back and

forth—we appreciate it.

I would like to now recognize the Chair of the International Relations Committee for an opening statement, the gentleman from

New York, Mr. Gilman.

Mr. GILMAN. I thank the chairman for yielding, and I want to

compliment Chairman Mica and our colleagues on this Subcommittee on Criminal Justice, Drug Policy, and Human Resources

for your important interest, sustained interest, in this vital issue

of Mexico’s cooperation and our common fight against illicit drugs.

Today’s hearing to discuss Mexico’s role in fighting drugs, hopefully, will help us establish a record of performance that few objective observers would call ‘‘full cooperation,’’ as President Clinton

certified on February 26.

Mr. Chairman, let there be no mistake; the annual drug certification issue is still important. Earlier this week, as you know, I

joined with you, Mr. Chairman, as a chief co-sponsor, introducing

a resolution of disapproval of Mexico’s certification as ‘‘fully cooperating.’’ Our Committee on International Relations will take a careful and considerable examination on how we should next proceed,

with regard to that resolution.

The Mica-Gilman resolution, which has a waiver of sanctions

built in, will also extend the 30 calendar days we normally have

to act from the date of certification by the President. The resolution’s text states that, ‘‘for construction purposes, it shall be considered and acted within 30 days of the actual certification of Mexico

on February 26, 1999.’’ Congress still has time to consider disapproval, and we ought to give it very serious consideration.

My concerns with Mexico’s performance in our fight against

drugs are numerous. The record this committee and the International Relations Committee have established over the last several weeks earn Mexico a failing grade.

For example, no major drug pins have been extradited to the

United States. Seizures are down; the flow of cocaine, black tar

heroin, marijuana, and methamphetamine into the United States

continues unabated. The DEA, unlike elsewhere in the world where

nations are fully cooperating with our fight against drugs, still has

not been given diplomatic immunity to carry weapons. They must

be able to protect themselves in this dangerous and hostile environment, where the drug dealers are often better armed and more

powerful than the Government. And in some instances, the police

are openly protecting the drug dealers. The corruption and penetration, by the cartels, of elite Mexican anti-drug units we established

together, has put us back to square one in our common fight.

Three of our former Presidents have identified drugs as a major

national security issue facing the United States.

Today, most of those illicit drugs are entering our Nation

through our border with Mexico. We need the cooperation of our

neighbor to the south in this common struggle that threatens everyone’s national security.

So, again, I thank you, Mr. Chairman, and I thank this committee for its leadership and willingness to call it like it is, without

fear or favor. And I look forward to working with you in this effort.

Mr. MICA. I thank the gentleman from New York.

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I am pleased to recognize Mr. Souder, from Indiana.

Mr. SOUDER. I have no opening——

Mr. MICA. I am pleased then to recognize Mr. Ose, from California.

Mr. OSE. Thank you, Mr. Chairman. I, too, am grateful for the

privilege of being here.

I want to harken back to our trip to South America. If I could

find one instance where the individuals that we have been able to

identify, and that have also been identified by our neighbor to the

south—if I could find an instance where the heads of the cartels,

such as those individuals, were to be extradited to the United

States, in response to our requests, based on the evidence we have

developed—if a single instance of that could be shown to me, I

would be far more receptive to the idea of not going forward with

this.

However, I know of five such individuals, as we learned on our

trip—they are listed in here somewhere—that we have requested

extradition on, that we have virtually irrefutable evidence that

they are involved in trafficking, and for which we have had no positive response for our requests.

If this is the only way to get attention to this matter, I am willing to do it.

I don’t have anything further to add.

Mr. MICA. I thank the gentleman.

If there are no further opening statements at this time, I am

pleased to welcome our first panel of witnesses. We have two witnesses; one is Chief Theron Bowman, who is chief of police, from

Arlington, TX. The other is Sheriff Ted G. Kamatchus—

Kamatchus?

Mr. KAMATCHUS. ‘‘Kamatchus.’’

Mr. MICA. ‘‘Kamatchus.’’

Mr. KAMATCHUS. Yes, sir.

Mr. MICA. And he is sheriff of Marshall County, IA.

Part of the purpose of this panel is to examine the impact of

drugs coming out of Mexico into our communities. There are representatives from two areas—the Midwest and the South—here to

provide us with their background and information.

Gentlemen, this is an investigations and oversight subcommittee

of Congress. And, in that light, we do swear in our witnesses. So

if you wouldn’t mind, please stand to be sworn?

[Witnesses sworn.]

Mr. MICA. The witnesses, the record will reflect, answered in the

affirmative.

Since we only have two of you, we won’t be as tight with the timing, but normally we try to limit the time of oral testimony to 5

minutes. If you have lengthy statements or additional material you

think would be pertinent to the record, it will be, upon request, entered as part of the record of this hearing.

With that, I am pleased to welcome you both, and I would like

to first recognize Chief Bowman, chief of police, from Arlington, TX.

You are welcomed, sir, and recognized.

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STATEMENTS OF CHIEF THERON BOWMAN, CHIEF OF POLICE,

ARLINGTON, TX; AND SHERIFF TED G. KAMATCHUS, MARSHALL COUNTY, IA

Chief BOWMAN. Thank you, Mr. Chairman, and the committee. I

appreciate this opportunity to come before you and testify.

First of all, my name is Theron Bowman. I am the chief of police

in the city of Arlington, TX. Arlington, TX, population approximately 300,000, lies in the heart of north-central Texas, equidistant from Dallas and Forth Worth. The Dallas/Fort Worth metropolitan statistical area consists of 16 counties and has a population of over 41⁄2 million people. The area is serviced by four major

interstate highways. It is home to the Dallas/Fort Worth International Airport and several local and regional airports. In 1997,

DFW Airport serviced 60 million passengers. It recently became the

world’s busiest airport in total aircraft operations.

Now, a well-developed infrastructure of commercial enterprise,

transportation networks, and international finance attracts illicit

activities into the north Texas area. International air and highway

corridors facilitate the distribution of narcotics into the region

where they are distributed or shipped to other points in the East,

the Midwest, or the Northeast United States.

Analysis of the U.S. drug seizure data indicates that methamphetamines, cocaine, marijuana, and heroin trafficking into north

Texas is on the increase. A large quantity of these drugs are secreted in vehicle compartments and are smuggled across the Mexican border from Laredo along I–35 or through Houston along Interstate 45. According to the North Texas High-Intensity Drug Trafficking Area Task Force, 40 Mexican drug trafficking organizations

constitute the major source of drug trafficking into north Texas.

Heroin use in our area is an emerging threat throughout north

Texas, as demonstrated by a rash of recent, well-publicized heroin

overdoses in Plano, TX. Now, Plano is a Dallas suburb. It ranks as

the fifth fastest-growing city among cities with populations of at

least 100,000 people. During the past 5 years, since 1994, 17 heroin-related deaths have been reported in Plano; 13 of those deaths

have occurred since January 1, 1997, and all of those are—the juvenile deaths are—the victims are a part of the juvenile population,

the deaths are believed to be the result of heroin’s recent high-purity level, which DEA lab tests revealed to be as high as 76 percent; traditional purity levels, on the other hand, are between 1

and 6 percent.

So north Texas serves as a critical transshipment point for heroin traffickers especially. Recent investigations reveal that traffickers use north Texas as a primary distribution point for Oklahoma, northwestern Louisiana, and southwestern Arkansas. Dallas, for instance, was the point of origin for two recent large narcotics seizures.

In August 1997, a Nashville, TN police department seized 16

kilograms of 96 percent pure Colombian heroin en route to New

York from Dallas. In June 1998, 17 kilograms of 92 to 94 percent

pure heroin were seized at DFW Airport. Intelligence identified a

combination Colombian and Mexican smuggling organization as

moving heroin via commercial aircraft from Bogota, Colombia, to

Reynosa, Mexico, and then across the Mexican/United States borVerDate 11-MAY-2000 13:44 Mar 05, 2001 Jkt 066703 PO 00000 Frm 00033 Fmt 6633 Sfmt 6602 E:\HEARINGS\62622 pfrm02 PsN: 62622
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der to McAllen, TX. The heroin was then moved from McAllen to

New York City via DFW Airport.

On June 13, 1998, an individual was arrested with 51⁄2 pounds

of Mexican black tar heroin on a Greyhound bus en route to Dallas

from the Rio Grande Valley, and then in July 1998, 9 pounds of

white heroin were found by a Memphis, TN, task force officer in

a suitcase on a Greyhound bus that originated in Dallas.

These and other significant seizures suggest that north Texas

has become a strategic point for the movement of heroin, as well

as a national distribution center.

Now local law enforcement agencies in north Texas—and I believe around the country—are losing the battle against illegal drug

trafficking. The Greater Dallas Council on Alcohol and Drug Abuse

last year had a 300-percent increase in reported heroin addiction

at their central intake system. The percentage of youth seeking

substance abuse treatment who cite heroin as their drug of choice

has increased 650 percent during the past 3 years. After a consistent 10-year decrease in youth substance abuse, there is a disturbing 3-year trend now in increased use of illegal drugs by adolescents. Drug and alcohol problems are either primary or contributing factors in over 70 percent of 900 individuals served each

month through the psychiatric emergency room at Parkland Hospital in Dallas, TX. So for 1996 to 1997, in Dallas County, 63 percent of all males arrested for any crime, and 55 percent of all females arrested for any crime, tested positive for at least one drug

in their system.

Metropolitan areas today are marginally impacting demand

through multi-agency narcotics task forces, but I believe that there

must be a sustained and focused effort on supply, or on eradicating

the supply, of drugs for local law enforcement agencies to have any

real effect on the drug problem.

Now, during my 16-year tenure as a law enforcement officer, I

spent part of that time working as a narcotics officer. And as a narcotics officer, I had the opportunity to meet Glen.

Glen, when I met him, was married, had a job, a family, and

cared for his elderly mother. He also was one of the heroin addicts

that I met and made cases on. When I met Glen, he was dealing

Mexican brown heroin and marijuana. But within 2 weeks of the

time that I met him, he had started using $20-daily quantities of

heroin. A week later, the cost of this heroin habit had increased to

$100 a day. Glen subsequently lost his job; he lost his family. He

burglarized his mother’s house; he stole from his wife, and within

3 months, Glen was burglarizing an estimated 10 houses per night,

plus committing 3 to 5 robberies per week, just to support his $750

per day heroin addiction. We looked for Glen; he had dropped out

of sight. He spent every waking moment he could supporting his

heroin addiction.

But Glen was lucky because we finally found him. We caught up

with him; we arrested him and placed him in jail. He did not lose

his life, but too often now we see in our neighborhoods and communities kids who are not so lucky.

Kids are dying from overdosing, and primarily on heroin. Such

is the case with 20-year-old Todd, who injected at the Dallas home

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of his older brother. Todd was transported to a Dallas hospital and

later pronounced dead.

After a night of drinking, popping pills, taking heroin and cocaine, 13-year-old Derrick was found unconscious in his bedroom.

He was later pronounced dead at an area hospital from an overdose

of heroin.

Twenty-one-year-old Aaron was found in his apartment by his

18-year-old girlfriend and later pronounced dead at a hospital. A

plastic bag containing about 3 grams of a black substance was

found in the apartment. And Aaron had a baby son.

Eighteen-year-old Stephanie was found lying on her back on the

couch in the living room in her home. A neighbor unsuccessfully attempted to resuscitate her. She was pronounced dead at the scene

by the medical examiner. And she had had problems with drugs

throughout her life.

So the flow of illegal drugs, primarily through Mexico, from the

Mexican border into United States households, has cut a giant

swath right through north Texas, from working-class neighborhoods to wealthy suburbs. In the words of the Fort Worth Star

Telegram, ‘‘more and more young users, still dangerously naive

about the heroin drug, find it cheap, plentiful, and powerfully addictive.’’ Most law enforcement officials would agree that narcotics

abuse has reached an epidemic level.

So the ongoing competition in north Texas between Mexican and

Colombian traffickers for the heroin market creates an ideal climate for narcotics trafficking. This competitive environment has increased supply, has raised purity levels, and lowered prices for

black tar heroin and other kinds of drugs in north Texas and most

of the other United States.

Thank you, Mr. Chairman.

Mr. MICA. Chief Bowman, we thank you for your testimony.

I am pleased now to recognize Sheriff Kamatchus—Kamatchus?

Mr. KAMATCHUS. Kamatchus.

Mr. MICA. We have heard a little bit about what is going on close

to the Mexican/United States border and the northern part of

Texas. And we would like to hear your perspective coming from the

heart of America, Marshall County, IA.

Mr. KAMATCHUS. Thank you, Mr. Chairman, members of the

committee. I am very honored to have an opportunity to come before you today.

My name is Ted Kamatchus; I am the sheriff of Marshall County,

IA. It is a county of a little over 40,000 people. It is in the center

of the State of Iowa, center of the ‘‘heartland of America,’’ ‘‘breadbasket of America,’’ if you will. It is a small, rural community of

about 23,000 to 25,000 people. It is diverse; we have industry, we

have agriculture, and frankly, over the last 5 to 6 years, we have

found that we have methamphetamine trafficking at a very high

level.

Today, I want to have a chance to talk to you about the problem

as we see it, the growth that we have seen, and to leave here with

a better understanding that the Federal Government is going to do

something to deal with the problem.

I have had the opportunity in my 22-plus years in law enforcement to work the streets, to work undercover, kick doors, to do a

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lot of the grunt work that we take for granted sometimes in law

enforcement. I have had a chance to lay in a ditch and watch a

meth lab on Christmas Eve. I have had a chance to see people deteriorate.

You see, a sheriff in a rural part of a country, we are very much

involved in our community. We are elected by the people; we serve

the people, directly. Every day we see them, whether it is on the

street or in the coffee shops. We see their kids. And I have had,

time and time again in the last 5 years, a chance to see individuals

that have become addicted to this methamphetamine and see them

deteriorate, wilt away and, quite frankly, become a detriment to

our society, feeding off of our society.

In the 1980’s, we saw cocaine become kind of the drug of choice

in Iowa. All the way through the 1960’s, 1970’s, and 1980’s there

has been marijuana. In the 1990’s, heroin has begun to pop up, but

it was hard to really get. Marijuana still was there. And I remember working hand in hand with the State and the National Guard

in the marijuana eradication programs that were very, very popular then. It was at that time, that we began the Mid-Iowa Drug

Task Force in our area; it is a four-county drug task force. It was

funded by BYRNE, as it is today—a very important program.

In the last 5 years, however, it has gone from marijuana to methamphetamine as the drug of choice. It has gone so much that, in

the last year in our county—the small county it may be—of the

2,500 inmates that were booked into our jail facility, 92 percent of

those had substance abuse problems. And of that 92 percent, approximately 80 percent were directly tied to methamphetamine.

I want to tell you about a problem that 5 years ago our Mid-Iowa

Drug Task Force seized a total of 3 ounces of methamphetamine.

Last year, we seized over 60 pounds—a substantial increase. We

began seeing this increase. We began wondering, ‘‘Where in the

world is it coming from? What is going on with it?’’ We began to

gather intelligence and work with the State and Federal authorities. And what we found out was, quite frankly, sickening.

We have had an influx of a Hispanic community of about 5,000

to 7,000 people into our area. These people are directly related to

working in the fields and to a packing plant which is our largest

employer in Marshalltown. The overwhelming majority of this

group are hardworking individuals that have come across the border or come from the southern part of the country to have a chance

at building a good life for themselves and their families. My parents are immigrants—my mother from Germany, my father from

Greece—and I respect the fact that somebody wants to come here

to make a good life for themselves.

But along with that group, came the prowl on methamphetamine, not from the group as a whole, but from an infiltration of

individuals who have been actually filtered in randomly amongst

that group. And, frankly, as many of you probably are very well

aware of, it is very difficult to tell the players without a program.

We didn’t have very many Spanish-speaking people in our community, much less our law enforcement agencies. Our jails—we would

get people in and it was very, very difficult. It has been a hurdle

that we are still attempting to overcome.

33

But what we began to understand was that these individuals

that were infiltrating this mass hiatus of individuals that have

come into our community, actually were individuals who were financed from south of the border. They were people who were deliberately put into our area.

Marshalltown is in the center of the State of Iowa. It is 25 miles

east of Highway 35—Interstate 35. It is 25 miles north of Interstate 80. It is in the middle of the country. It is almost directly

equal between Des Moines and that area of about 350,000 people,

Waterloo/Cedar Falls, with a population of about 140,000, and

slightly more than 60 miles from the Cedar Rapids/Iowa City area.

It puts us very, very centrally located, not just in our State, but

in the country.

And what we began seeing, through our intelligence gathering,

from the Mid-Iowa Drug Task Force, and through our increased efforts in working with the State and Federal Government, was that

this infiltration that was beginning to occur was coming not just

from within Iowa, not just from the southwestern part of the country or from Texas, but actually from south of the border.

About a year and a half ago now—about 15 months I guess it has

been actually—I was approached by a gentleman by the name of

Dan McGraw, from U.S. News and World Report. He came to interview me about the methamphetamine trouble that we have in

Marshalltown, IA, and in Iowa, in general. I was a little baffled

about why he would come to Marshalltown to talk to me. I am on

the Board of Directors of the National Sheriff’s Association, and I

serve very proudly representing them—the over 3,000 sheriffs in

this country. I didn’t know if it was driven by that or if there really

was a problem. Obviously, we had seen a problem, but we weren’t

sure that it was any different than it was elsewhere in the country.

What he told me was a story that has been confirmed by the Administrator of the DEA, Thomas Constantine, when we met with

him about 11 months ago in his office with a group of citizens from

Marshalltown. That is, there are no less than three direct fingers

from the Mexican drug cartels into Marshalltown, IA—three people, or three direct lines, from south of the border. The DEA is

aware of it, and in the last several months, the last approximately

year, we have been very lucky to have been granted High-Intensity

Drug Trafficking Area status and began to work more intensely on

a broader level than what BYRNE or our drug task force granted

us. We are HIDTA now, and we have been able to work more intensely with the Federal Government.

All that working together has brought us an enormous amount

of intelligence, and it has allowed us to do a better job at policing

our area. But it is very scary when you think that in rural Iowa,

where people don’t lock their doors, without fear of—at least if

somebody burglarizes your house, you know who it is going to be

and you can go to their door. I have been in this almost 23 years

now, and the time that I have spent in Marshalltown as a police

officer, and as a sheriff now in my 12th year, we usually have been

able to know who those people are. But with this new infiltration

of individuals from south of the border it makes it very difficult to

track.

34

What we found out was, Mr. McGraw indicated, there were these

three drug cartels that had direct pipelines to us—one of those

being the Enisqua cartel. Working with the State, other local agencies, the State agency, and the DEA, we are very happy and very

honored to have an opportunity to work with them and to see that

the Enisqua’s were actually put aside. I believe though, however,

that they still are in Mexico, and I believe the Mexican Government—and correct me if I am wrong, and you will have better testimony than from me, as mine is third-hand on this—but the Mexican Government refuses to turn them over to the United States.

You know the problem is not just border-oriented. If we think

that we are going to be able to stop this stuff as it comes across

the border, all of it, it is impossible to do that. We have to make

a very broad effort. We have to make an effort that is going to involve dealing with the addicts. Our community has 27 agencies

that deal with substance abuse, domestic violence, and youth violence. See, it is a necessity now in Marshalltown, IA, because we

are seeing that these groups are coming in, and they are utilizing

our youth. I can think of several teenagers in the last year that we

have gone ahead and apprehended, no less than seven in our small

community, that have been involved with drug trafficking.

There are three families that have come to mind—Rosales,

Costellanos, and Hernandez. And I say these names, not because

all people with that name are bad, because that is not the case in

Marshalltown, and I am sure it is not the case elsewhere in this

country. But in Marshalltown, IA, there were over three distinct

families that, at one time, our intelligence indicated were bringing

anywhere from 50 to as much as 150 pounds of meth through our

community a week.

Mr. Hernandez, the elder brother, we apprehended off on a 4-

pound buy. Along with it, we got weapons. He later turned State’s

evidence; it is a well-known fact. He was put out on probation and,

ultimately, is now doing Federal time for violation of that probation.

We thought we had a big effort, that this was a big dealer, 4

pounds of meth in little Marshalltown, IA. Little did we know that

10 months later, we would have an individual who was an informant for us, a white—with my guys in the street—[laughter]—with

all due respect, would like to think of someone of a drug, mopeytype of person, a guy that you would not trust very well, go, while

he was wired, to another Hernandez, a brother, and have fronted

to him, 10 pounds of methamphetamine. No money exchanged

hands, just a front. That is over $100,000 given to this person that

you would not trust in this room with all the rest of us here—10

pounds, $100,000. ‘‘Here take it. Don’t forget, by the way,’’ he said,

‘‘you still owe me $10,000, too.’’

When you start to see drugs change hands like this, you have to

really wonder, ‘‘What kind of money is involved here, that a person

can do that without being too concerned?’’ Later on, search warrants were levied, and we found an additional 20 pounds of meth

in this individual’s home, and $266,000 in cash.

The Costellanos’ family is another family. With this family, we

took 11⁄2 pound of meth on a delivery off of their 16-year-old brother. And we began to find out that his young friends were lookouts

35

for these groups—they ride around on their bicycles, and give

warnings. As a matter of fact, we went in and we bought from

Costellanos. And we raided this particular house three individual

times within the last 8 months—I might say without finding anything out during our raids, other than just basic scale on occasion

and some very minor things. We were going to do an 8-pound buy

from Costellanos. All he could come up with was 4 pounds of methamphetamine. We had $100,000 worth of cash on hand. We told

him we wanted to buy more. He went to an arch rival group of

his—the Rosales family—to get 4 more pounds for us. We found out

that the Rosales—who we had really no indication was even involved with it at that point—was actually a bigger than any of the

other two I have mentioned to you today. This is the type of thing

that is continuously going on.

I have listened to the testimony from Arlington, which is a large

city by Dallas/Fort Worth, and I have had a chance to sit in, as a

board member of the National Sheriffs, and hear sheriffs in much

larger counties than Marshall County talk about large quantities.

And we read all the time about multiple-kilo buys. But when we

start to see this type of poison coming into the heartland of America, when we start to see our increases go up, anywhere from 40

to 50 percent just on our methamphetamine substance abuse committals. When I can sit as sheriff and see individuals deteriorate

before my eyes, people I have known that were from good families—it needs more—it needs to be addressed harsher.

And more emphatically, I guess the last thing is that it is very

difficult, when you have five people that work on a drug task force,

and the overtime that goes out, the taking people away from their

families, their wives, their kids. Case in point—on Christmas Eve,

we raided a meth lab in our county, and then to turn around and

have them see that favorite status is given to the Mexican Government—that they are helping us fight, stand by side-by-side in this

fight, and knowing what we know, and seeing what we see. And,

quite frankly, I am not afraid to say it turns my stomach, as it does

those other people in Marshall County, IA. There is no purpose in

that. Until those people can show you, the Congress of this United

States, that they are willing to work with you—I cannot see that

occurring.

Basically, my point to the committee is simple. I would like to

just read this closing statement, and then we will call it—America’s

heartland should be free of drugs, and Mexico is not a friend of the

United States in drug enforcement and counter drug policies. My

experience has shown that Mexico provides safe havens for gangs

and cartels that terrorize Marshall County, the heartland of America, and all the United States.

Mexico sends the vast majority of crank across the border, either

as refined meth all ready for sale or as precursor chemicals ready

for a lab. Our experience in labs in Iowa and the Midwest has

shown that these labs actually supplement the addiction problem

that has been garnered and brought forth originally by the Mexican sales. When our agency begins to knock down Mexican sales,

and they begin to go down in quantity and purity, the labs fire up,

because it is addicts, as a rule, that make enough for themselves

in a sale to survive. That is the type of labs we are seeing in Iowa.

36

Either way, the result is the same—strung-out kids doped up on

methamphetamine, teeth deteriorating, bodies deteriorating, athletes no longer good athletes.

We need a Federal commitment, not just words, not just what we

have heard for the last—this administration and administrations

before about the war on drugs, but a legitimate commitment to

make this a war, to put the money forth that is necessary. We cannot simply hope to interdict every pound of meth at the borders;

that is an unrealistic hope. It is too broad of a border. Instead, we

should focus our efforts on keeping our kids safe in their homes

and communities, allowing them to grow up healthy and drug free.

That means we must have Mexico as a faithful partner, a true

partner, in the fight against drugs.

I want to thank you for the opportunity to testify. I look forward

to working with the committee to resolve this problem—not just in

Marshall County, because it is not just in Marshall County, IA; we

are just seeing it, and that is why I brought it before you today— but the rest of this country. And I will be open to any questions

you might have. Thank you very much.

[The prepared statement of Mr. Kamatchus follows:]

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38

39

Mr. MICA. Thank you, Sheriff. Thank you, Chief, also.

Let me just ask a couple of quick questions. Chief Bowman, we

have heard you talk about the problem you have experienced in

your community and, as the sheriff said, you are a larger community. Can you tell me—for the record and for this committee—

where the source of most of the heroin is coming from, into your

community?

Chief BOWMAN. Right. DEA records, seizure records, indicate

that the majority of the heroin is either Mexican brown or Mexican

black tar heroin, so the predominant source of illegal heroin in our

community is coming across the Mexican border.

Mr. MICA. All right.

And in the last 2 or 3 years, are you seeing more or less?

Chief BOWMAN. There has been an alarming increase in the

amount of narcotics seen coming into the community.

Mr. MICA. Illegal narcotics, including heroin, methamphetamines, cocaine?

Chief BOWMAN. Yes, all of the above, and marijuana, as well.

Mr. MICA. Sheriff, what is the source of most of the methamphetamine? You have already stated it; would you state it again for the

record?

Mr. KAMATCHUS. It is indicated to us by intelligence, and by factual evidence that we have gathered at our local, State, and Federal level, all confirming each other, that well over—it is over 90

percent—approximately 92 percent, I believe it is, of the methamphetamine that comes into our area comes from south of the

border. It comes from Mexico. We see the——

Mr. MICA. Sir, are you seeing over the last 2 or 3 years less or

more of that illegal narcotic coming into Iowa? Less or more?

Mr. KAMATCHUS. Far more.

Mr. MICA. Far more.

I really don’t have any more questions. I will yield to the ranking

member.

Mrs. MINK. Thank you, Mr. Chairman.

And both, Chief Bowman and Sheriff Kamatchus, I certainly

want to express my very deep gratitude for the commitment that

you have demonstrated in your testimony, with respect to, not only

the appreciation of this terrible crisis in your communities, but

your own personal involvement and commitment to safeguard your

communities, particularly, our young people.

That is certainly the issue which drives this subcommittee and

the Congress. We want to find ways with which to deal with this

issue. Only one aspect of our consideration is the matter of what

to do to create a greater will in the Mexican Government to help

us meet this crisis within the United States. I recognize that that

is a legitimate issue.

My concern since coming to this subcommittee, which is just this

year, is to try to understand from the perspective of yourselves, as

law enforcement officers, and from people who are knowledgeable

about this issue in their communities, to what extent, greater efforts on the part of the Federal Government would help you interdict this narco-traffic that is coming into your community from

wherever it is coming?

40

What, if you could just describe—the both of you—one specific

area where Federal assistance would help you in your law enforcement responsibilities, that you would ask the Congress to do something about. What would be that area of support that you would

be seeking from the Federal Government?

Chief Bowman, first.

Chief BOWMAN. Yes, ma’am. Thank you for the question. Without

any question, I would like to see us target and eradicate the supply, the point of origin of these drugs. We are helpless, in many instances, when we focus on the demand, on the individual user

level. And in many instances, all of our best efforts have only minimal impact. So I think if the Federal Government could really

focus on eradicating the supply of the drugs, that would be of substantial assistance to us.

Mrs. MINK. Now when—following that argument, because that is

the big issue——

Chief BOWMAN. Yes.

Mrs. MINK [continuing]. And one which troubles me a great deal.

When we talk about the supply, as a law enforcement officer in all

these myriad—thousands of communities where we have all of the

officers that are engaged in this drug issue, concentrating their efforts, we talk about the supply in their communities. To what extent do you have the technical ability, the resource, to know, to establish, to identify the sources within your community? And are

you able to dislodge them, at least from your community, not to say

the country, but are you able to target your efforts, with the Federal Government’s assistance, to eliminate, eradicate, arrest these

individuals who are the sources of supply within your community?

Chief BOWMAN. Our experience in Arlington is every time we arrest a local dealer, someone else pops up to replace him or her.

There is a constant supply of dealers—there is a constant supply

of people willing to take on the profit motive in order to keep the

drugs flowing into the community and into communities around the

country.

We are able to successfully identify those people one at a time,

but because of the overwhelming supply of drugs continuing to

come into the community, we can’t make any significant progress

in totally eradicating the problem.

Mrs. MINK. So the arrest of these individuals is sort of a futile

effort because they keep coming with new faces? Is that generally

the problem?

Chief BOWMAN. Well, I don’t want to say it is a futile effort, because we feel that every time we take one off the street, that is one

fewer person out there that is dealing drugs. But we can’t, and we

have not to this day been able to arrest everybody. What we——

Mrs. MINK. How many of these king-pins in your area have you

arrested and are now serving time?

Chief BOWMAN. Me, personally, or my department?

Mrs. MINK. No, I mean your whole establishment.

Chief BOWMAN. OK, I don’t have the exact numbers on all of the

king-pins in my area that we have arrested. I have indicated some

of the large quantities that we have seized. We have tracked some

of the points of origin back into Mexico. In the Dallas/Fort Worth

41

area, we are continually arresting people who are deeply connected

with the organizations, but I don’t have an exact number for you.

Mrs. MINK. Could you get a number to supply to the committee?

Chief BOWMAN. I certainly can.

Mrs. MINK. I thank you. I appreciate that. Thank you very much.

Chief BOWMAN. Would you like over 3 years or 5 years or—— Mrs. MINK. Whatever is readily available.

Chief BOWMAN. OK.

Mrs. MINK. Three years would be great.

Mr. MICA. I thank the gentlelady.

Now I am pleased to recognize the gentleman from California,

Mr. Ose.

Mr. OSE. I have no questions, Mr. Chairman.

Mr. MICA. Then I will recognize the gentleman who is also the

vice chairman of the subcommittee, Mr. Barr, the gentleman from

Georgia.

Mr. BARR. Thank you very much, Mr. Chairman.

And I would like to thank both the chief and the sheriff for being

here today. I have somewhat of a connection with Iowa; both my

wife and I were born in Iowa, so it is a pleasure to see you here.

One of the jobs that brings me, to some extent here today, is

those of a U.S. Attorney; I served as a U.S. Attorney in Atlanta,

from 1986 to about 1990. When I took over as U.S. Attorney after

being appointed by President Reagan in 1986, one of the major

cases that that office was handling at the time out of Atlanta was

a very unique case, a very unusual case. It was a case involving

Mexican heroin. It garnered a lot of media attention at the time for

several reasons; one, because it was a very large case, but, second,

because it was so unusual back in the 1980’s to see Mexican heroin. It was ‘‘gumball heroin’’ back then or ‘‘brown heroin.’’ Nowadays, it is not at all unusual to see these cases. And the fact that

you all are here, bears testament to the changing character of both

the drug war, as well as the prevalence of certain types of drugs,

and I think it is very disturbing that we are seeing this direct pipeline—not necessarily limited anymore to major international transshipment points such as Atlanta, but to communities, as you say,

all across the heartland of America, including our border regions

as well. And I appreciate you all’s efforts to assist with the problem, both in your communities and by being here today to assist

us on the national level.

I did notice, Sheriff, that you mentioned Tom Constantine, the

head of DEA. I have tremendous regard for him and for the men

and women of DEA. And one of the things that the chairman and

the rest of us are trying to do up here, federally, is to provide him

more resources that he needs and the authorities that he needs.

Despite some of the political problems that fester up here in Washington that prevent some of these things from being implemented,

we are constantly trying to work with them because they are doing

a tremendous job.

You make the statement, Sheriff, in your prepared remarks,

‘‘Mexico is not a friend to the United States in drug enforcement

and counter drug policies.’’ That is a pretty direct and fairly profound statement, with which I happen to agree, not only based on

what I know, serving as a Member of Congress, and serving on this

42

subcommittee and on the Judiciary Committee, as well, but also

based on classified briefings that we have had recently which, obviously, we can’t go into here. But those classified briefings have

made it crystal clear to me that the problems with the Mexican

Government are even more problematic. The corruption reaches, I

believe, to the very highest levels, and the highest levels of our

Government are not taking steps—even basic, elementary steps— to impress on the Mexican Government how seriously we take this.

We are moving in the opposite direction, certifying them, not as

somebody that is not only not cooperating, but making it more difficult for our DEA agents, for example, and our sheriffs and police

chiefs in this country to deal with the problem of trying to stem

the tide of drugs coming in from Mexico. But they are making it

harder for you to do that; they are making it harder for DEA to

do its job by failing to even raise this to the level of an important

foreign policy matter in our diplomatic negotiations with Mexico.

So I appreciate very much your forthrightness in putting your

finger on this problem.

Would you, Chief Bowman, agree with that statement, that Mexico is not a friend to the United States in drug enforcement and

counter drug policies?

Chief BOWMAN. Yes. My experience as a police chief and a police

officer seeing all of the drugs coming into our area across the Mexican border, I would have to agree with that statement regarding

the narcotics. Yes, sir.

Mr. BARR. One of the things that you talked about—and perhaps

both of you did—was the percentage of drug-related activity, or the

prevalence of drugs being involved in folks that are arrested for

crimes and that are in your jails and prisons. If you could, briefly,

just summarize those percentages for me, both, Chief, and then the

sheriff.

Mr. KAMATCHUS. OK. Well, as I mentioned before, the arrests

that we see coming into our jail facility, about 92 percent of those

individuals are directly related to substance abuse of some sort.

Burglars are trying to take care of a habit, to feed a habit.

Mr. BARR. Have you noticed an increase in that over the past 10

years or so?

Mr. KAMATCHUS. I definitely have. There are two things that we

have seen, though. Not only have we have seen an increase from

around 60 percent to the 92 percent range in our area, not just the

substance abuse, but we have seen a complete flip-flop. When I

first took over as sheriff 12 years ago, alcohol was actually the substance abuse of choice. People came in there because they drank

too much, and that was a problem. Domestic violence was related

to that.

Now, all of a sudden, we are starting to see more and more of

it that is coming up, these individuals are on methamphetamine,

tied to methamphetamine, not necessarily as addicts, but somebody

who maybe goes out and tries it, can’t handle the addiction, maybe

wastes their money away trying to buy it, those types of problems.

And they try to fund it through theft, through burglary. And, quite

frankly, they are involved in domestic violence, and they are involved with child abuse. There is a whole plethora of things that

this drug actually brings on to them. But that is what we are seeVerDate 11-MAY-2000 13:44 Mar 05, 2001 Jkt 066703 PO 00000 Frm 00046 Fmt 6633 Sfmt 6602 E:\HEARINGS\62622 pfrm02 PsN: 62622
43

ing, and about 92 percent and I think it is 86 percent, roughly of

that group that is actually methamphetamine.

Chief BOWMAN. And, of course, my numbers come from Dallas

County, 1996 and 1997, 63 percent of all males and 55 percent of

all females arrested in Dallas County during that period all tested

positively for at least one drug.

Mr. BARR. And can I ask unanimous consent just to ask one

quick, followup question, Mr. Chairman?

Mr. MICA. Go right ahead.

Mr. BARR. Is methamphetamine a serious and increasingly serious problem for you, Chief? And for both of you—again, you may

have discussed this already but I think it is important—do you see

a direct pipeline from Mexico to your communities involving methamphetamine?

Chief BOWMAN. Absolutely. Methamphetamine is a very, very serious problem in our community as well. The abuse of that drug

is apparent, although there are not as many deaths related to

methamphetamine abuse. We do believe that methamphetamine

and amphetamine abuse is the No. 1 drug abuse problem in our

area.

Mr. KAMATCHUS. In our area, obviously, methamphetamine leads

the way, as far as the abuse of drugs. We recently received funding

from HIDTA—we are part of the Midwestern HIDTA—and through

that funding, along with BYRNE and through our Governor’s Alliance on Substance Abuse, with that money as it comes from those

two organizations, we have not only been able to put manpower on

and study it, but we have been able to track back and develop the

intelligence that is necessary to track this type of stuff.

Basically, methamphetamine is the most abusive drug that we

are seeing. Through our connections with the DEA, through indications or things that I have mentioned before like through the news

media that came to Marshalltown to interview us, we see a direct

pipeline back to those groups. And through, like I said before, Administrator Constantine, himself—their indication was that there

were actually three fingers of drug cartels that had reached into

Marshall County and the middle part of Iowa, in general.

Mr. BARR. From Mexico?

Mr. KAMATCHUS. From Mexico, sir; yes.

Mr. BARR. Thank you.

Mr. KAMATCHUS. Directly from south of the border.

Mr. BARR. Thank you.

Mr. MICA. Thank the gentleman.

I would like to yield now to the gentleman, Mr. Hutchinson, from

Arkansas.

Mr. HUTCHINSON. Thank you, Mr. Chairman.

I missed all of your oral testimony, but I have read your testimony, Sheriff, and I appreciate what you had to say.

And I have been briefed, Chief, on your responses. I hail from the

State of Arkansas, a rural area, and that has been mentioned as

one of the areas where methamphetamine is headed, as it leaves

your area, Chief. We have had problems with methamphetamine

for some time.

I wanted to ask a couple of questions of the sheriff. How large

is your county?

44

Mr. KAMATCHUS. My county is approximately 45,000 people. We

have had an influx of Hispanics between 5,000 and 7,000 in the

last 5 years, so it is hard to say, but around 45,000 people.

Mr. HUTCHINSON. What is the reason for the influx of Hispanics?

Mr. KAMATCHUS. Primarily due to our packing plant. We have a

meat-packing plant that employs right around 2,000 people. But

not only that, the northern half of my county is very—well, I have

been told at least—some of the best agricultural land in this part

of the country.

Mr. HUTCHINSON. All right. Sheriff, back in the 1980’s—I, like

Bob Barr—was in Federal prosecution and methamphetamine was

an increasing problem in Arkansas in the rural areas. We were getting the methamphetamine from the Bandita motorcycle gang— that was one of the cases I handled. It wasn’t coming from Mexico.

It was a different supply source. And we had our own methamphetamine that was manufactured in homemade labs. And so it was a

problem before there was a pipeline from Mexico.

Did you have that experience in your county, that you had a

methamphetamine problem before this pipeline existed from Mexico? And, how has that complicated it?

Mr. KAMATCHUS. Well, basically, the methamphetamine problem

has been around, like you said, for years. It took a backseat in the

old days, if you would, to marijuana, then to cocaine, and even heroin began to pop up in our area. It was predominantly from bikers.

We had the same situation. But most of the methamphetamine

that we confiscated in those days was in grams and in ounces. It

was a much smaller amount. And the purity of it that we saw at

that point was not very high. It was usually in the 20 to 30 percent

on the high side, mind you.

Now what we are finding is some of the Mexican methamphetamine that is coming in, that we know is tracked directly back— and I might add that we track this because we see them sending

money south of the border, which is another thing that we are finding. Most of the methamphetamine that is coming to us has been

in the 60-plus, actually as high as 78 percent methamphetamine.

It is much higher.

Mr. HUTCHINSON. The purity is higher?

Mr. KAMATCHUS. It is higher, that is right.

Mr. HUTCHINSON. And the precursor chemicals are not coming in,

it is the finished product that is coming in?

Mr. KAMATCHUS. You are exactly right.

Now I might add one more thing here about the precursors and

the labs. Iowa had over 300 labs last year that they took off in the

State of Iowa. But predominantly, those labs are ounce labs to half

a pound; they are small amounts. And all the intelligence that has

been gathered from the arrests and the confiscation of those labs,

has indicated that those are predominantly abuser labs. These are

individuals who, basically, have developed a lab to take care of

their own problem and maybe sell an ounce or two to make a buck.

Mr. HUTCHINSON. Going back to the pipeline to Mexico, what is

the distribution network that the Mexican drug dealers rely upon

in your area?

Mr. KAMATCHUS. In my area?

Mr. HUTCHINSON. Yes, sir.

45

Mr. KAMATCHUS. Predominantly, it is, frankly, the individuals

that have been like migrated to us, the Hispanic individuals who

migrated to us. We have had some of those that have been ‘‘mules,’’ going back and forth south of the border. They have come up to

work in the packing plants. They store it in their vehicles. We have

had some that have been shipped in to us by common carrier, but

more often than not, it is just motor vehicle.

Mr. HUTCHINSON. Is it confined—the sales and distribution and

the network of methamphetamine distribution—to the Hispanics

that have come up from Mexico to work in the packing plants, or

does it go into the schools? Does it impact the whole community?

Mr. KAMATCHUS. Yes. What I have talked to you about has been

the bulk amounts. Beyond that, once it starts to filter out into the

community, for street sales, then it goes in all segments, regardless

of wealth, or schools. It spreads out throughout the whole community.

Mr. HUTCHINSON. And I am sort of cutting you off a little bit because I want to come—— Mr. KAMATCHUS. Yes.

Mr. HUTCHINSON. Back to the chief. Would you describe the distribution network that you see from the Mexican pipeline?

Chief BOWMAN. Right. I would describe our network as being a

diverse network of people. We see distributors across every demographic or demographically represented type of individual. It is not

confined to Hispanic. We have African-Americans; we have Caucasians. We have the wealthy, as well as socioeconomically depressed

individuals within the population along the distribution chain.

There are some gang-affiliated distributions going on, as well.

Some motorcycle gangs are part of the distribution chain.

But we, too, primarily see a lot of vehicle shipments, a lot of the

drugs hidden in compartments of cars, of trains, of trucks, of airplanes, to get the large quantities to the individuals who are, then,

distributing it into the schools, into the neighborhoods, into the

general population.

Mr. HUTCHINSON. Thank you. My time is up.

Mr. MICA. I would like to yield. I think the gentleman from Georgia had an additional question.

Mr. BARR. Thank you, Mr. Chairman.

Mr. MICA. Mr. Barr.

Mr. BARR. Sheriff, I think you were mentioning being able to

trace the money from your communities going back down to Mexico. How were you able to do that?

Mr. KAMATCHUS. Well, the only way that we can do it, and sadly

enough, it is a very abrupt wall. We see the money transfer. When

we do search warrants on many of our raids that we have been

able to do in the last years, time and time again from these drug

dealers, we see transfers to other bank accounts and down to wire

transfers into Mexico.

It is my understanding—because, of course, Marshall County

Sheriff’s Office isn’t going down there to investigate it—but my understanding from the DEA is that there really is no help from the

Mexican Government in following up on those transfers. So, where

it goes to, we know at least some money went somehow, and that

is where we hit the wall with it.

46

Mr. BARR. Chief, with regard to your community, would it be accurate for purposes of these drugs coming into Arlington, to consider it a forward basing location? I mean all of the drugs that

come in, don’t stay in your community, do they?

Chief BOWMAN. Right. Right.

Mr. BARR. Where do they go? And how do they leave your community to reach these other locations? And what would some of

those locations be?

Chief BOWMAN. Right. We know for certain that the Dallas/Fort

Worth, north Texas area is predominantly a transshipment point

for narcotics going into New York and to Chicago and to other

areas on the East Coast, into this area, to the Midwest, and to the

Kansas area, to the Iowa area. We are a major transshipment

point. A small amount of the drugs into our area is distributed

within the area, but the majority of it is shipped out into various

other regions of the country, primarily, north and east of us.

Mr. BARR. Do you all work with INS in your communities?

Chief BOWMAN. Yes, we do.

Mr. BARR. Sheriff, do you work with INS?

Mr. KAMATCHUS. Yes. My chief of police has actually testified before Congress on that issue, working with INS, in the past, and we

do work with them. The police department more than my sheriff’s

office, actually.

Mr. BARR. One of the problems that we have seen that we are

looking into up here is a gap between what Congress is directing

through appropriations, for example, for interior enforcement

through INS, and their support of local police and local sheriffs. We

are seeing a gap between what we think is happening and have directed up here through funding and what happens actually in communities and districts and regions. And they are being told to cut

back. In some instances, that we understand—I understand that

they are being told not to move forward with certain operations involving Mexican methamphetamine and illegal aliens, for political

reasons.

Do you sense any of that in your communities? Or is the relationship with DEA as robust as it has always been? Do you see more

of the resources in your communities through INS and their ability

to help you, which would reflect the fact that we, in Congress, have

appropriated more money for that? Or do you see something different?

Chief BOWMAN. My experience and our agencies’ experience with

INS has been positive. We have an excellent working relationship

with INS, and I think sometimes the INS officers are frustrated by

the laws or the policies or the restrictions placed upon them, because they, too, have problems finally resolving the immigration

problems that they are faced with on a daily basis. But, in terms

of cooperation, there is a great deal of cooperation, not only with

the INS, but with the DEA and ATF and many other Federal agencies as well.

Mr. BARR. I was talking primarily about their resources. We find,

and I find, that there is always very, very good cooperation and a

willingness to help out. But in terms of the resources that they

have available, have you noticed any change?

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Chief BOWMAN. I personally have not noticed any change. I can

say in our area, our INS division trys to accommodate whatever request that we have. If they are facing resource problems, it is an

internal problem that they don’t discuss with me or with us.

Mr. BARR. Sheriff.

Mr. KAMATCHUS. I guess we have seen an increase in INS in

Iowa. We have seen an increase in agents. But an increase in

agents and building that working relationship, which we are, isn’t

really where it is all at. It goes beyond that point. We have seen

a huge cutback in the U.S. Marshals, for instance, where they

aren’t receiving the cap funding and the funding for housing of inmates. And the policy that came out of INS at the top levels, my

understanding—and correct me if I am wrong in this—was that

they were no longer going to put emphasis on illegal immigration,

which I don’t have a problem with, frankly. I have a greater problem, though, when they won’t deal with an individual until they

are found guilty, and they are taken through the court system. And

with a bottleneck at the Marshals, with them not being able to

take them through the Federal court system because of the lack of

funding to them, I am a little concerned about that.

Frankly, the funding for BYRNE and for HIDTA, the funding for

the Marshals—those are all things that are very important when

you are talking about dollars and cents. And they trickle down to

us, and those are very important pipelines that we can’t lose at our

level. And we have to keep those things up.

Immigration, yes; we have seen more agents, but if they don’t

have any place to put them, what good does it do?

Mr. BARR. Thank you.

Thank you, Mr. Chairman.

Mr. MICA. I want to take this opportunity to thank both of you

for providing this testimony today and giving us a glimpse of what

is going on in the heartland of America, and also in Texas, so close

to the Mexican/United States border. We could probably call 100 of

your colleagues from around the country and get a similar response, unfortunately.

But we do thank you for your dedication to law enforcement and

also for your cooperation with our subcommittee.

We will excuse you at this time.

Mr. KAMATCHUS. Thank you, Mr. Chairman.

Chief BOWMAN. Thank you, Mr. Chairman.

Mr. BARR. I would like to, Mr. Chairman, before, if I could——

Mr. MICA. Yes.

Mr. BARR. The witnesses have mentioned BYRNE grants. It is

my understanding, and I would like to confirm this with the chairman, that the administration has zeroed out BYRNE grant moneys

in this budget request. Is that correct?

Mr. MICA. I believe that is correct.

Mr. BARR. That might be something that you all could help with.

Mr. KAMATCHUS. Well, if I might have—— Mr. BARR. We are going to, also.

Mr. KAMATCHUS. If I might have the liberty, sir, that will destroy

our task force. We are funded by BYRNE; we don’t have the assets

in rural America, in our county. If we don’t have BYRNE and

HIDTA, you might just as well forget about it, and then I hate to

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see where that is going to go. I know it is not just Marshalltown;

it is rural America.

I don’t know about the chief in Larger, but I know it has a definite effect on us, not just enforcement, but education and all across

the board.

Mr. MICA. Well, again, we thank you for your testimony, both of

you. We will excuse you at this time.

I would like to call our second panel. We have Mr. Jeff

Weitzman, who is a Canine Enforcement Officer with the U.S. Customs Service, in the Orlando Field Division. We also have a former,

recently former Agent of the U.S. Customs Service, Mr. William F.

Gately.

As I explained, gentlemen, to the other panelists in our first

panel, that this is an investigations and oversight subcommittee of

Congress. So if you would stand and raise your right hands.

[Witnesses sworn.]

Mr. MICA. The witnesses both answered in the affirmative. We

will let the record reflect that.

I would like to welcome you both now, and I think you both have

unique perspectives on what you have seen relating to the narcotics

problems. In particular, we are interested in the question of Mexico

today.

I recognize first, Mr. Jeff Weitzman, for your testimony.

STATEMENTS OF JEFF WEITZMAN, CANINE ENFORCEMENT

OFFICER, U.S. CUSTOMS SERVICE, ORLANDO FIELD DIVISION; AND WILLIAM F. GATELY, FORMER AGENT, U.S. CUSTOMS SERVICE

Mr. WEITZMAN. Hello, and thank you for the opportunity to appear before this subcommittee.

My name is Jeffrey Weitzman, and I am a Canine Enforcement

Officer for the U.S. Customs Service.

I am not going to give a long opening statement because I would

rather spend the valuable time answering questions for the subcommittee.

For those of you who are not aware of who I am, I was the canine officer depicted on ‘‘60 Minutes’’ in 1997. I was called into my

supervisor’s office at U.S. Customs in San Diego and told to sign

a propane gas truck loaded with approximately 4.3 tons of cocaine

to the streets of our country. This incident happened in October

1990.

The seizure of coke was the largest in the history of the United

States border with Mexico and is directly linked to a seizure of 21.4

tons of cocaine seized in the community of Sylmar, CA, in 1989.

This massive load crossed the U.S. border via Texas in numerous

vehicles.

These two intertwined loads expose the border’s role as a conduit

for illegal substances entering the United States. Today the situation has worsened. The price of cocaine has dropped significantly

since my bust in 1990, and today we face a greater challenge. Our

resources are failing to meet the threat.

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The border has become a dam with leaks from California to

Texas, and before the dam explodes, we had better act, and we had

better act now.

I open the floor to any questions you have.

[The prepared statement of Mr. Weitzman follows:]

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Mr. MICA. I thank you for your statement. What we are going to

do is, is that we will hear from Mr. Gately next, and then we will

get into questions.

Mr. Gately, we have read a little bit about some of your public

testimony, at least as far as what has been published to date, and

we are pleased to welcome you, and thank you for volunteering as

a witness and providing us with your testimony today.

You are recognized, sir.

Mr. GATELY. Thank you, Mr. Chairman, members of the committee. I am here at your invitation. I have provided your staff

with a resume of my Federal service which contains an overview

of my experience—— Mr. MICA. Mr. Gately, would you mind just pulling that up a little bit closer?

Mr. GATELY. No, sir—which contains an overview of my experience as a U.S. Marine and as a law enforcement officer. My career

began in Washington, DC, as a second-generation police officer

with the Metropolitan Police Department in 1971. In 1978, I transferred to U.S. Customs as a Special Agent and served 21 years in

major field offices in Washington State, California, Florida, and Arizona. In August 1992, I was transferred to the Special Agent in

Charge Office in Los Angeles and assigned as the Assistant Director of the HIDTA Task Force. In April 1993, I was reassigned as

the Assistant Special Agent in Charge of the Financial and Drug

Smuggling Investigations Division of the Los Angeles Field Office.

In that capacity, I also assumed the directorship of the Omega

Task Force, a dedicated undercover investigative unit of U.S. Customs.

It was as the Director of the Omega Task Force, that I formulated the operational plan and later led the investigations which

comprised Operation Casablanca.

I want to state now that at no time during the planning, operational, or prosecutorial phase of Operation Casablanca have I

sought any forum to obtain publicity for myself or the investigation. Up until the March 16, 1999, story published by the New

York Times, I have not, although approached many times by journalists and a writer, agreed to an interview. Mr. Golden of the New

York Times made several attempts to interview me on or off the

record more than 9 months ago. It was not until I retired from Federal service, did I agree to meet with him.

I told Mr. Golden then, and I tell the committee today, that everything I share with you about Operation Casablanca can be

verified by the record and by the evidence. In addition, there are

Special Agents, auditors, contract forensic accountants, task force

officers of the Customs Service, Federal prosecutors, Treasury, Justice, and Federal Reserve officials who can, in part, corroborate

what I tell you.

In this regard, I will get to the point which I believe brings me

here today as a witness. There are no less than 15 audio and video

tapes of meetings and conversations, all of which have been transcribed, regarding the offer, as well as the subsequent negotiations,

by potential targets of the investigation to engage in a transaction,

the substance of which was to move $1.15 billion in illicit proceeds.

These tapes contain the communications between four defendant

52

bankers, two Mafia members of the Juarez drug cartel, and the

U.S. Customs Service confidential informant who engaged in extensive discussions regarding the movement of this money. Of course,

the confidential informant engaged in these discussions at the direction of the U.S. Customs Service.

As an example of the evidence contained in these tapes, it is indisputable that the Secretary of Defense for Mexico was identified

as one of the owners of the money on several occasions during the

course of these meetings and conversations. It is in these tapes

that you will find the evidence that would have led any reasonable

person to conclude, as I did, that there was compelling evidence to

continue the investigation.

Let me relate to you, in some more specificity, why I believe

these communications constituted credible evidence that deserved

further investigation.

Excuse me a second.

Some have stated that the $1.15 billion offered to launder as illicit proceeds was nothing more than bravado by unreliable crooks.

However, Operation Casablanca was always about the laundering

of drug proceeds by the Colombian and Mexican cartels through

Mexican financial institutions and profiting from such activities.

The individuals who presented the offer to launder the $1.15 billion had already engaged in illicit activity connected to Operation

Casablanca by laundering substantial amounts of drug proceeds

and profiting substantially from the laundering activities to fuel

their insatiable greed.

One of the individuals, now a defendant, Victor Alcala-Navarro,

had been associated with the operation since November 1995. He

not only delivered the first banker to the operation, but he introduced the confidential informant to members of the leaders of the

Juarez cartel, including Jose Alverez-Tostado, the heir apparent to

the cartel boss following the reported death of Amado CarrilloFuentes. These introductions were not done for the purpose of impressing the confidential informant or undercover agents, but rather for the purpose of creating and expanding business alliances in

an effort to make more money from illicit activity.

One of Alcala-Navarro’s associates and also one of the Mafia

members who engaged in negotiations regarding the $1.15 billion

transaction was Ernesto Martin. Martin was motivated by the

same factors as Alcala-Navarro—the need to make money, or the

desire to make money, from the laundering of drug proceeds. He

had also delivered a number of bankers to the operation who were

ready, willing, and able to launder drug proceeds. And I will add,

not in my statement, very instructive about it.

It was these individuals who first brought to our attention the

idea of laundering $1.15 billion, and who first made any mention

of the ownership of that money. During the time the operation was

engaged with Alcala-Navarro, Martin, and their boss, Jose AlverezTostado, there was never any indication that the information they

were providing was false, misleading, or exaggerated. It is for these

reasons that I concluded at the time, and still believe, that there

was evidence sufficient to justify pursuing the transaction related

to the $1.15 billion.

53

There has been a great deal said in defense of the Mexican Government’s integrity and their level of cooperation in investigations

such as Operation Casablanca. At the same time, I have been criticized for expressing my opinion to the contrary.

In my opinion, Mexico and the word ‘‘corruption’’ are synonymous. In Mexico, there is no line which can be drawn to separate

the police and the prosecutors from the Mafia, the politicians from

the Mafia, the government from the financial institutions, or any

combination of these entities.

The general population is helpless to change the system. A myriad of stories printed in every major news publication in Latin

America can be counted on a daily basis refuting the truth of their

alleged efforts. The most prevalent theme of all the stories during

the mid-1990’s was Mexico’s emergence as the laundering center

for billions in drug profits. But the most disturbing element of the

stories was the complicity of their financial institutions—institutions regulated by the Salinas and now the Zedillo government.

There was never a time in my 21 years as a Customs Special

Agent where I believed that I could trust the safety and security

of an investigation or place the lives of our agents in the domain

of any member of the Mexican Government. Unlike politicians and

diplomats, my experiences with the Mexican law enforcement officials has occurred in the field—where the stakes are measured in

life and death. This is not drama, it is reality. There has been no

event or experience I have had, or know to have occurred with my

peers, which instills in me a sense of trust in their ability to keep

a confidence.

Operation Casablanca was no exception. The banks in Mexico are

regulated by the government. In that regard, our activity should

have been ferreted out and exposed by the regulators who supervise these institutions. The paper-thin contracts we established

with each of these institutions were a sham. Even a cursory examination of the transactions related to our relationship reeked of

money laundering.

What is even more shocking to me is that above my objections,

prior to the initiation of this operation, I was required to brief

Mexican officials at the Deputy Attorney General and the Assistant

Secretary level in the Hacienda, or the equivalent of our Treasury

Department. During these briefings, I offered them the evidence we

had, which at the time indicated seven Mexican banks actively

laundering drug proceeds for Cali cartel traffickers. I supplied

these officials with the same presentation I gave our Ambassador

James Jones, as well as actual copies of bank drafts issued by the

Mexican banks which were directed to our undercover operation as

part of the laundering process.

As a criminal investigator with more than 29 years of experience,

a success record in my field that is recognized by my peers and my

superiors—despite what they may say behind closed doors—it was

my recommendation that we continue the operation until we could

gain sufficient evidence to develop a case against the conspirators

identified in those tapes.

I do not believe that until the article in the New York Times was

published that anyone who remained in charge of Operation Casablanca subsequent to my removal, had reviewed or evaluated these

54

tapes and transcripts for their evidentiary value. In fact, I had

transcripts of these conversations prepared at the time the conversations took place for the explicit purpose of informing the chain

of command of the events surrounding the $1.15-billion transaction, and I personally briefed the chain of command on these

events as they occurred.

In my opinion—and I believe the facts and circumstances that

are available will support such an opinion—this investigation was

not pursued because of the numerous problems that developed and

persisted during the course of Operation Casablanca. This is not

my tale of woe. If I am at the center of these conflicts and accusations, it is only because I was performing my job to the best of my

abilities. I take full responsibility for all of my actions during the

course of Operation Casablanca. I never believed it would be a task

without great risks and problems—nothing in Government is, especially undercover investigative operations.

I will now summarize for you the various reasons, as I believe

them to have occurred.

One, during the planning and operational phases of Operation

Casablanca, beginning in 1994 through May 18, 1998, I was confronted with a gauntlet of critics, disbelievers, and obstructionists.

These individuals held positions in Customs, DEA, the FBI, and

the Justice Department. The issues raised by them ranged from

skepticism about our ability to deal on the levels outlined in the

operational plan, to issues surrounding the political and economic

impact of our investigation on Mexico. In their individual and

sometimes collaborative efforts to serve an agenda that opposed the

operation plan, they sought to block the initiation, limit the scope,

and obstruct the progress of Operation Casablanca. In this regard,

it is noteworthy that some of the disbelievers, and even an obstructionist, became supporters of the operation. Regardless, the negative energy produced by the remaining opposing forces was always

present and had to be fought back at every stage of the investigation.

Two, for approximately 1 year prior to the May 1998 take-down

of Operation Casablanca, John Hensley, the Special Agent in

Charge in Los Angeles, continually leveled criminal accusations

against me. Those accusations involved the alleged loss, misappropriation, and theft of millions of dollars in drug proceeds and Government funds related to the ongoing investigation. Although each

accusation was thoroughly investigated and found to be baseless,

he persisted in reinventing his spurious stories in order to discredit

the operation and me.

Beginning in the fall of 1997, Mr. Hensley leaked information

about Operation Casablanca. At a law enforcement conference in

Tampa, FL, Mr. Hensley provided information about the operation

to a network news executive. Later in the investigation, Mr.

Hensley invited several congressional staff representatives to Los

Angeles to be briefed on a major undercover money-laundering investigation. Upon their arrival, he not only paraded them through

the undercover offsite which housed the Omega Task Force, he took

them to the audio and video monitoring station of the undercover

storefront, Emerald Empire. At this location, they were allowed to

55

view through the monitors the interior of the offices and the warehouse.

Four, subsequent to a briefing regarding Operation Casablanca

that I presented to, then, Under Secretary of the Treasury, Raymond W. Kelly, in late 1997, Mr. Kelly stated to all present that

he would seek out and punish anyone leaking information to the

media regarding the operation. A short time later, I believe Mr.

Hensley, who was present at that meeting, and others he manipulated, provided Mr. Kelly with a copy of a book I authored in 1994.

According to witnesses present, Mr. Kelly was told that I was not

only the leak, but that I was dramatizing the facts about the investigation, as well as the take-down plan in order to write a book.

Five, there were two deliberate acts which I believe were intended to shut down our operations in Chicago and New York. I am

convinced both occurred at the direction of Mr. Hensley and Mr.

John Varrone, the Special Agent in Charge of the New York Field

Office. On both occasions, orders issued by me were disregarded,

and enforcement actions were taken. The arrests and seizures

which occurred contrary to the agreed plan of action—and I will

add without the knowledge of the undercover agents or their cover

team—endangered the continued safety and credibility of our undercover agents and confidential informant. In addition, it had a

serious debilitating effect on a relationship our undercover agents

and the informant shared with the Juarez and Cali cartels’ organizational structures in Chicago and New York. It also seriously

damaged the relationship we had worked so hard to establish with

the Colombian and Mexican Mafia members at the highest level.

Despite the severity of these actions, we were able to convince our

criminal partners that our undercover agents and the informant

were not at fault for these events. But the fact remained that the

cartels shut down their operations to search out the mole in their

organization.

Based upon these facts and events, I believe Mr. Kelly had lost

faith in me and was not willing to risk going forward with any aspect of the investigation, regardless of the violation or the violator.

Mr. Kelly, I am certain, believes he did the right thing. I believe

that the combination of misinformation, spurious accusations, and

the politics infused into this operation from its inception skewed

his judgment. At no time was I given an opportunity to know that

he had received this bogus information, nor was I given an opportunity by Mr. Kelly or anyone else to defend myself.

Immediately after the extremely successful take down of Operation Casablanca, a take-down plan which was never accepted in

its entirety by anyone, I requested a meeting with Mr. Kelly to resolve the issues which I now believe to have been the reasons for

his actions. My purpose was to regain his confidence and to end the

attacks on my integrity and the integrity of the investigations.

Within 5 weeks of the covert phase of the operation closing and

the formulation of the security for the confidential informant, I was

‘‘temporarily and indefinitely’’ reassigned to Customs headquarters.

This reassignment came via a telephone call the day before I was

scheduled to return to Los Angeles. At no time during the next 7

months was I provided with an official explanation for this action.

There is no document issued by the agency which chronicles this

56

action outside of a travel authorization. During my time in Customs headquarters, I was never given a specific or even a general

assignment. When I did anything, it was of my own volition. In

that regard, I was effectively removed from the operational command of the Omega Task Force and all aspects of Operation Casablanca’s investigations.

During the time I remained in this TDY position, I continued my

quest to seek an audience with Mr. Kelly, who had now become the

Customs Commissioner. I remained steadfast in my efforts in the

hope that I could regain my position in Los Angeles. In late December, approximately 7 months after my first request and after I had

announced plans to retire, I was afforded this audience. As a requisite to my appearance in his office, I was required by his staff

to put in writing the reasons for my request. I was informed that

Mr. Kelly would not entertain any discussions related to Mr.

Hensley and would only address operational issues.

It was at this meeting that I informed Mr. Kelly that I believed

there had been no investigative efforts, subsequent to the May

1998 take-down, directed at developing any of the information acquired in Operation Casablanca. I also informed him that above my

objections, I had been directed to Los Angeles to interrogate one of

the major Cali-based defendants. I informed Mr. Kelly that, based

upon my meeting in Los Angeles during this interrogation, I believed the Omega Task Force lacked leadership and was no longer

an effective and productive investigative unit. During my meeting

with Mr. Kelly, I also requested an official document which reports

the findings of the Internal Affairs investigations related to Mr.

Hensley’s false and malicious accusations. To this day, I have not

received an official response from any Customs Service officer in regard to any of the topics I had discussed with Mr. Kelly.

In closing, I must protest any assertion that I regard myself as

a ‘‘lone crusader.’’ I am what you see—nothing more, nothing less.

However, I do regard myself as a former Federal law enforcement

officer who showed up everyday to perform an honest day’s work.

My only motivation was to honorably serve as my oath and the

mission dictated, a culture passed on to me by my parents and aspired to by me since I earned the title, U.S. Marine.

Thank you.

[The prepared statement of Mr. Gately follows:]

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Mr. MICA. Thank you, Mr. Gately, and also, Mr. Weitzman, for

your testimony.

I would like to start off by asking Mr. Gately a couple of questions.

Mr. Gately, for the first time today, I heard of the existence of

15—I think you said—audio and video tapes. Was that figure correct? That monitored—— Mr. GATELY. That is correct, sir.

Mr. MICA [continuing]. Some of the activity that you observed?

Mr. GATELY. That is correct, sir.

Mr. MICA. And did you also say that you made transcripts of

these tapes?

Mr. GATELY. Yes, sir. There were transcripts of the tapes. Initially five, as they came in, were transcribed as we received the

tapes. And that information was passed immediately to the chain

of command.

Mr. MICA. And where are the audio and video tapes at this

point?

Mr. GATELY. They are in evidence in Los Angeles.

Mr. MICA. In evidence.

Would these also be used in this Operation Casablanca case?

Mr. GATELY. The one going to trial on Monday, sir?

Mr. MICA. Yes.

Mr. GATELY. I do not believe they would be.

Mr. MICA. You do not?

Can you think of any reason why the subcommittee wouldn’t

have access? Is there any ongoing criminal investigation—you have

seen the tapes—or anything that would prohibit us from obtaining

a copy of the tapes?

Mr. GATELY. I don’t see any specific reason because it is my understanding there is, ‘‘no case,’’ or no continuing investigation regarding the nature of those tapes.

Mr. MICA. And within these tapes, you believe there is substantial evidence or enough hard material that would link trafficking

and corruption to certain individuals who you have said have been,

you know, involved at the highest levels?

Mr. GATELY. The information in those tapes is an offer and the communications related to negotiations about laundering $1.15 billion, sir. It identifies, in two or three of those tapes or more, the

owners of the money, not by name, but by position within the Mexican Government, official position within the Mexican Government.

Mr. MICA. And how far up would those individuals be in the

Mexican Government?

Mr. GATELY. The highest position identified in those tapes, as an

owner of the money, in the Mexican Government, was the Secretary of Defense.

Mr. MICA. Secretary of Defense. Something that disturbs me

about your testimony is it seemed that at, not just one juncture,

but many junctures, you testified that it was almost an effort to

close down these investigations. And do you believe that is because

they indicated people at the highest levels of the Mexican Government were involved?

Mr. GATELY. As I stated, sir, it was a combination of a series of

problems, where they did not want the investigation to even begin.

66

But throughout the investigation, the planning and operational

stages, politics was always infused into the process. I have no clear

understanding why policemen or law enforcement officials seem to

think that they need to take on the moniker of diplomats and politicians. If we target drug traffickers and money launders, the fallout should be whatever the fallout is. If, in fact, we are targeting

the financial institutions of Mexico—and we were—if the fallout is

that there is corruption that stems from that, then that is just part

of the ongoing investigation. The corruption is in Mexico, not in the

United States. We shouldn’t be worried about who the defendant

is, or the potential defendant is.

Mr. MICA. But you—it appears that you got the feeling that this

did lead to the highest levels of the Mexican Government, and that

when you said ‘‘politics entered,’’ was it that this, diplomatically,

would be very unsettling? Or this, politically, on an international

level, or national level, would be embarrassing?

Mr. GATELY. All that, sir. That somehow—— Mr. MICA. I don’t want to put words in your mouth.

Mr. GATELY. Well, you are not. But you said—it is all of what

you said and conjecture beyond that. There was a lot of conjecture,

statements to the effect, ‘‘Well, what is the financial or economic

impact on the country of Mexico, or their stability as an economic

entity if we do this?’’ Things that I think law enforcement should

not pay much attention to. That is for people in this body to worry

about, not for police officials or law enforcement officials to infuse

into operation plans and prosecutions.

Mr. MICA. But as a professional, and if you had your say, you

would have pursued this no matter where it led? Is that correct?

Mr. GATELY. Yes, sir; given the opportunity, I would have.

Mr. MICA. At some point, there was an indication that this corruption might lead as far as—or the source of some of this money

might lead—as far as the Office of the President of Mexico. Is there

any evidence on tape of that? Or, comments to that—— Mr. GATELY. There is one statement on tape to that effect. Yes,

sir.

Mr. MICA. There is?

I don’t have any further questions at this time. If I may, I would

like to divide the time that is left—you have been here for the

whole testimony. Would you like to ask questions at this point?

Mr. BARR. That will be appropriate. I don’t know about our colleague on the minority side, though. I don’t want to use up his

time.

Mr. MICA. We can split the time. We will give you five, and five—

I think we have got a 5-minute warning.

Mr. BARR. OK.

Mr. MICA. If staff will keep us warned.

Mr. BARR. Thank you, Mr. Chairman.

Mr. Gately, you are here today voluntarily, is that correct?

Mr. GATELY. Yes, sir, I am.

Mr. BARR. And were your colleagues and former colleagues delighted with your being here and encouraged you to attend this

hearing and testify?

Mr. GATELY. No, sir. I can categorically say that they are not

very happy about it.

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Mr. BARR. In fact, were you not pressured not to testify?

Mr. GATELY. I received no direct statement to that effect, but I

did receive faxes at my home outlining Treasury regulations, giving

guidance on testifying before this committee. Even though those

Treasury regulations apply to current employees of the Treasury

Department, I was provided with a copy of them. Today, I received

a copy of the memorandum that categorically states that references

that were made in the New York Times are blatantly false.

I don’t think they are very happy with me, sir; no.

Mr. BARR. And you take these communications with you as pressure from the Department to have you not testify today?

Mr. GATELY. I think they would—— Mr. BARR. I know I don’t want to put words in your mouth.

Mr. GATELY. You are not, sir. I think—my take on it is, they

would be very happy if I didn’t show up here today.

Mr. BARR. It is my understanding—and I know it is not your

purpose here today, to disclose classified information; it is not my

purpose, either. But if I were to tell you that recent classified briefings that we have received confirm, beyond any reasonable doubt

in my mind, that the corruption that you have been discussing

today and that we have heard other witnesses discuss, does indeed

extend to the very highest levels of the Mexican Government. And

that is borne out by extensive classified information from various

Federal agencies. Would that comport with your views as well,

based on your career, handling these matters, and the work that

you have done on behalf of the U.S. Government?

Mr. GATELY. Yes, sir, it does.

Mr. BARR. It is also my understanding that the work that you

have done, specifically, not necessarily limited to, Operation Casablanca, involving the, as you say, ‘‘the laundering of drug proceeds

by the Colombian and Mexican cartels,’’ that there is independently

verifiable information that bears that out. And I state that for the

record today, with regard to the Colombian angle, as well as the

Mexican. I presume that would not surprise you, either?

Mr. GATELY. Not in the least, sir.

Mr. BARR. The tape that you mentioned, in response to the chairman’s question, about whether or not there is any evidence on tape

directly linking high-Mexican Government officials to the operation

and to the laundering; could you provide us any more details on

that here today, since we don’t have the tape?

Mr. GATELY. I can tell you that there is direct discussion about

the ownership of the money. And it came about, not as a braggart’s

statement. It was in the conversations during the second or third

state of negotiation.

There was one occasion where one of the bankers, based on his

communications with his client, whom he later identified as the

Secretary of Defense, brought it up because he was describing one

of the locations in New York City which contained a half billion

dollars in cash. And during the course of that conversation, he described visiting that location, stating that it had—— Mr. BARR. Is that an American bank?

Mr. GATELY. No, it is not a bank, sir. It was a home. It was a

private residence that he was describing—saying that he had been there and removed as much as $10 million from the location.

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Mr. BARR. So this——

Mr. GATELY. That is how the conversation came up.

Mr. BARR. The conversation was not just sort of a general conversation about high-government officials being involved? It was

very specific, very creditable, very particular?

Mr. GATELY. Like all their conversations with us, there was

never any indication that what they told us was misleading, false,

or even exaggerated. They were there to do business with us.

Mr. BARR. Is that based, not only on your experience, specifically

with regard to Operation Casablanca, but also on the entire 21

years of your very distinguished career, as an U.S. Marine, and as

an law enforcement officer for this Government?

Mr. GATELY. It is more like 31 years, but, yes, sir, that is exactly

right.

Mr. BARR. Thank you. And I am sorry that time doesn’t permit

additional questions, but I thank you very much, and Mr.

Weitzman very much, for your courage in being here today and for

helping out in this effort.

Mr. MICA. We do have additional questions. We have a vote

going on now; that will take approximately 15–20 minutes. Why

don’t we recess until about 10 minutes of. If you gentlemen

wouldn’t mind, give us time to go over and vote and come back.

You might be able to get some refreshments.

We will stand in recess until 10 minutes of the hour.

[Recess.]

Mr. MICA. I would like to call the subcommittee back to order,

if I may. And we will continue questioning. I had some additional

questions, both to Mr. Weitzman and to Mr. Gately.

Mr. Gately, if I could continue, sir, to ask you a couple of questions. From your testimony, I think you are telling the subcommittee that you don’t believe there was a specific coverup by

Customs or other personnel in any of these investigations; is that

correct? This was not an overt——

Mr. GATELY. No, sir; it was not a coverup. It was exactly what

I say in my statement—an accumulation of problems, people who

did not want the investigation to begin, people who always, from

the beginning, once it started, wanted to know when it was going

to end. Many people will tell you today that they knew about Operation Casablanca, or they can attempt to brief you on it. I suggest

to you now that is not true. There are just a couple of people who

know the full breadth of that investigation or those three investigations which made the operation. One of those people is me. The

other is the confidential informant. If you want to put all that information into one person, it is either that person or myself. Anyone who tells you that they know the whole thing, or they were

part of the planning of that operation, they are just not being genuine with you.

Mr. MICA. And so we have two principals—you and the primary

informant. How did you determine the credibility of the informant

and the credibility of the accusations that are made? Because you

are not making the accusations on the tape about how high up this

money was linked to, it is someone else. How can you say, or how

can you believe that that was a credible and knowledgeable source?

69

Mr. GATELY. The credibility of the informant is not in question,

sir. First of all, he is not a criminal who was turned to work for

the Government. He volunteered his services at our request or bidding. We put him in the position of meeting with and developing

these investigations because he knew the individuals or some of the

individuals involved in the Cali operation because of his legitimate

business connections. Based on that and his ability to communicate

with any sort of individuals and to follow directions better than

any individual I have ever encountered, who had to act in the capacity that he did, he did a marvelous job. He was scripted when

he met these people. He was briefed and debriefed, over and over

again. No meeting took place without the informant meeting with

myself and other agents involved in the investigation to determine

what should be brought out in the next meeting with whatever

banker was there. None of this was ad hoc or ad libbed. It was all

prepared questioning that didn’t appear to be that when he made

the meetings.

There were several times that we intended to draw out more information about the ownership of the money or the ability to make

this transaction come about in the short period of time we had before the closeout date had been——

Mr. MICA. You keep saying ‘‘we.’’ Was there someone else?

Mr. GATELY. Other than myself?

Mr. MICA. Yes.

Mr. GATELY. The agents that were conducting the operation, sir.

Mr. MICA. So they can verify——

Mr. GATELY. As I say in my statement, it all can be verified.

Mr. MICA. So we have other agents who can verify—would they

also be visible in the tapes?

Mr. GATELY. They are.

Mr. MICA. They are. And are they identified in the transcripts?

Mr. GATELY. Yes, sir, they are.

Mr. MICA. OK. And you said there was other evidence. What type

of other evidence, other than individuals? You have referred to

money, too, in large quantities. Of course, the $1.15 billion total

and half a billion in cash in a——

Mr. GATELY. Do you want me to sum up what the $1.15 billion

represents, sir? I can do that for you.

Mr. MICA. If you could. And then, what I would like to try to find

out, too, is what other evidence exists or that we could look to that

might substantiate the allegations that have been made, or verify

some of the claims that have been made.

Mr. GATELY. If I could get to the first part, the $1.15 billion represented $500 million in New York; $500 million——

Mr. MICA. You said, ‘‘kept in cash in a house.’’

Mr. GATELY. That is correct, according——

Mr. MICA. Was that——

Mr. GATELY [continuing]. According to the banker that gave us

the information, that is correct.

Another $500 million in cash kept somewhere in the Netherlands, then $150 million in cash in Mexico City.

That is how it was described to us, and that is how we came up

with $1.15 billion.

70

Mr. MICA. Did you ever get to verify the existence of any of those

funds?

Mr. GATELY. Absolutely not, sir.

Mr. MICA. You didn’t? You were never able to take it to that

level?

Mr. GATELY. No, sir.

Mr. MICA. But the individuals who were involved—now I don’t

want to get into revealing anything at Casablanca that may be

under prosecution or coming up for trial—but are we talking about

the same kinds or same sources of money?

Mr. GATELY. Yes, sir.

Mr. MICA. We are?

Mr. GATELY. Yes, we are.

Mr. MICA. Is there any other hard evidence, other than the statements of these individuals, the tapes that would show others involved with you when you—again, you said, ‘‘we’’—the statements

of money? What other information or—— Mr. GATELY. I can only address the credibility of the information

we received. And based on our past experiences, and during the duration of the investigation, the entire operation, these people had

not misled us; they had not lied to us; and they had not exaggerated anything to us. So, all we could do was go forward with an

investigation in an undercover capacity until the end of the operation, the end of the covert phase of the operation.

What is very unfortunate is that there was no action taken subsequent to the closeout of the undercover operation. No one did

anything else to determine whether or not what was said in that

meeting could now be investigated in an overt way.

Mr. MICA. You made specific requests to take it to the next step?

Mr. GATELY. I did.

Mr. MICA. To whom?

Mr. GATELY. I made those requests as——

Mr. MICA. How high did you—— Mr. GATELY. In my new role, TDY in headquarters, I brought it

to the attention of the Director of the Financial Investigations Division, who brought it to——

Mr. MICA. Who was that?

Mr. GATELY. Allen Duty.

Mr. MICA. I am sorry. Allen—— Mr. GATELY. Duty.

Mr. MICA. Duty.

Mr. GATELY. I brought it to the attention of the Assistant Commissioner for Investigations.

Mr. MICA. And who was that?

Mr. GATELY. Bonnie Tischler.

And I brought it——

Mr. MICA. Was this oral or written?

Mr. GATELY. Oral, sir.

Mr. MICA. OK. And who else?

Mr. GATELY. And to the Director of Operations, Connie Finchel.

Mr. MICA. And no response or no pursuit from any party?

Mr. GATELY. There was no pursuit by Los Angeles, or the Los

Angeles office, which had the sole responsibility to pursue it.

Mr. MICA. When did——

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Mr. GATELY. I think, if I could——

Mr. MICA. Go ahead.

Mr. GATELY [continuing]. Just expand on that, just for a second.

I think you have to understand the environment and the nature of

the relationship between myself and Mr. Hensley during about 14

months of this investigation. I was constantly under scrutiny that

I had not experienced at any time in my career. I was being audited, sometimes on a daily basis. I was being accused of losing

enormous amounts of money, or misappropriating it, or even stealing it. This does not foster a good relationship between myself and

the person I have to brief on the progress of an investigation every

day. And nothing was going to happen, based on what I said, sir,

whether I was in charge or TDY and completely disassociated from

the investigation.

Mr. MICA. Mr. Hensley seems to indicate he thought you were

under investigation for some unaccounted funds before he came on

the job.

Mr. GATELY. Mr. Hensley is probably the most disingenuous person I have known in my entire life. If he says anything, I hold it

suspect, sir. I have never known a liar quite like him.

Mr. MICA. Well, I think that is at who is telling the truth——

Mr. GATELY. That has always been the question.

Mr. MICA. And under oath here, before the subcommittee, you

have not misappropriated any funds in your charge.

Mr. GATELY. I have not, nor have I stolen any funds in my

charge.

Mr. MICA. When did you retire?

Mr. GATELY. December 31, sir.

Mr. MICA. Did you follow Operation Casablanca during the period in which the Mexican Government threatened to go after our

agents?

Mr. GATELY. Absolutely, sir.

Mr. MICA. Was that—in your estimation, was that an example of

full cooperation?

Mr. GATELY. I think it is a clear——

Mr. MICA. Cooperating fully?

Mr. GATELY [continuing]. A clear and convincing example of how

they don’t cooperate. I think it is also a very showing indication of

how much we hurt their operations by exposing their banks as

money launders.

Mr. MICA. When this operation was first reported, I think the reports actually came out that the operation was conducted with the

knowledge of Mexican officials. And I think we had a briefing by

Customs that told us that Mexican officials had been briefed in advance, the ones they felt they could trust about the operation. Do

you know if that was the case?

Mr. GATELY. I conducted the briefing myself, sir.

Mr. MICA. To the Mexican officials?

Mr. GATELY. To Ambassador Jones, and to the then-Deputy Attorney General of Mexico, and the Assistant Secretary of Hacienda

for Enforcement.

Mr. MICA. And you conducted that prior to——

Mr. GATELY. Initiating any aspect of the operation.

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Mr. MICA. So the Mexicans were fully appraised at a high

enough level? What was the identity, a Deputy Attorney General?

Mr. GATELY. That is a very good question. I don’t have his name

here with me, but it is well-documented——

Mr. MICA. OK.

Mr. GATELY [continuing]. That it occurred.

Mr. MICA. Well, that was my understanding, too. Then, the Mexicans suddenly took a turn and came after us and threatened to arrest or indict our agents; is that correct?

Mr. GATELY. That is my understanding. And I also understand

that that has persisted off and on up until a few weeks ago.

Mr. MICA. Until just prior to the question of decertification, it remained in limbo, as I understand it.

Mr. GATELY. Yes, sir. That is how I understand it.

Mr. MICA. What turned on the spigot to come after us, with our

agents—including you—having briefed the Mexicans on what we

were doing? Was it the knowledge of how far this had reached in

the banking circles? Or do you think it was concern about how high

up it might go if all of these sources of money were revealed?

Mr. GATELY. I think, referring to the financial institutions in

Mexico in their entirety as corrupt and money launders was

enough to rankle all of the Mexican officials related to, not only the

regulation of those banks, but any lobby that the banks had with

their Congress. And that would also, I think, apply to any lobby

they had within the executive branch because, as I understand it,

the Minister of Foreign Affairs, as well as the President, spoke

out—the President of Mexico spoke out against Operation Casablanca.

Mr. MICA. As an infringement upon their sovereignty? Was that

the excuse or——

Mr. GATELY. That is the excuse I heard, sir.

Mr. MICA. There have been reports that vast amounts of money

from drug profits are filtered through the executive branch of the

Mexican Government, through the military, and through the police.

Is that your understanding, and at what levels? Again, is this sort

of spotty, or how would you describe, again, the executive branch

penetration of illegal profits?

Mr. GATELY. I can speak to my knowledge of the past administration, that it obviously permeated every level, including the Office of the President.

Mr. MICA. The military—same thing?

Mr. GATELY. That is correct.

Mr. MICA. And, of course, the police I guess is a given.

Is there any other evidence this subcommittee could seek that

would verify what you are saying and document how high the penetration of corrupt money is filtering? Any suggestions you can

have as to what rock we might—we have a problem, because we

have learned things behind closed doors, we are not free to talk

about.

Mr. GATELY. As——

Mr. MICA. But if you can give us suggestions as to what rock we

can uncover, publicly, we may be able to go a little bit further

with——

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Mr. GATELY. I couldn’t talk about—like yourself, sir—I couldn’t

talk about it, publicly. I could tell you where to look, but I couldn’t

tell you publicly, nor do I think that the Customs Service would

allow me to tell you in any capacity.

Mr. MICA. We may call you back in a private session.

We have already had a closed-door session with the CIA, the

DEA, intelligence, and others, and we may have to go further in

that regard, then.

I would like to yield to Mr. Cummings at this time.

Mr. CUMMINGS. Mr. Gately, thank you very much for being here.

I think that it does take quite a bit of courage for you to be here.

You have said a lot, and I do believe you to be an honorable man.

And I believe very strongly in our Customs Agents. It is a very reputable organization, and I think that anybody sitting in this audience would have to be concerned—and I think if someone made the

kind of statements—and I have no reason to disbelieve you—that

you made about you, and you did not have opportunity to defend

yourself, I think you would be very upset. Would you—you would

be concerned.

Mr. GATELY. Well, sir, this is my first opportunity to tell

anyone—— Mr. CUMMINGS. OK.

Mr. GATELY [continuing]. That cares to listen, what happened.

Mr. CUMMINGS. Well, I have listened intently, and I guess I just

want to make sure that—we don’t have Mr. Hensley here. We don’t

have the head of Customs here.

Mr. GATELY. Yes.

Mr. CUMMINGS. And that is not your fault.

Mr. GATELY. No, sir.

Mr. CUMMINGS. And so—but we do have some letters.

Mr. GATELY. Yes, I understand.

Mr. CUMMINGS. And, you know, we have got—I don’t know who

this is—television cameras, and you have got people writing, and

we are getting one side of the story—we have a letter from Mr.

Hensley, dated March 22, 1999, which I have asked to be—suggest

to Mr. Mica be submitted to be part of the record.

Mr. MICA. Without objection, so ordered.

[The information referred to follows:]

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75

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Mr. CUMMINGS. Thank you.

I would just like to just, first of all, start with the last paragraph

of his letter and work backward. It says Mr. Gately—and this letter is dated, I think I already said, March 22, 1999. ‘‘Mr. Gately

has stated to numerous people that he is writing a book and a

screenplay on Operation Casablanca. I find it sad that Mr. Gately

has to malign so many people with misstatements and factual errors to enhance his own marketability and detract from what is a

great operation and investigation of international money laundering. I hope that this sets the record straight.’’

With that, let me just ask you a few questions.

Mr. GATELY. Yes, sir.

Mr. CUMMINGS. You said that you put your concerns to several

people who were above you. Is that correct?

Mr. GATELY. Throughout the entire operation; yes, sir.

Mr. CUMMINGS. All right. But you named a few, a few moments

ago; did you not?

Mr. GATELY. Yes, I did.

Mr. CUMMINGS. And would you give us those names again?

Mr. GATELY. The Director of Financial Investigations, who is now

the Special Agent in Charge in Boston, Allen Duty; the Director of

Operations, Connie Finchel; and the Assistant Commissioner for

Investigations, Bonnie Tischler.

Mr. CUMMINGS. I take it that there came a time when they decided to end this operation. Is that correct?

Mr. GATELY. There were two scheduled—or more than two scheduled take downs of this operation; that is correct, sir.

Mr. CUMMINGS. All right. And you objected to both of those?

Mr. GATELY. I was not alone in my objection. I will add to that.

Mr. CUMMINGS. All right. But you did object to both?

Mr. GATELY. Yes, I did.

Mr. CUMMINGS. I am just trying to get a balance here. I mean

you made some strong allegations, and I just want to make sure

I understand both sides of the story.

Mr. GATELY. I am here and open——

Mr. CUMMINGS. Because you are saying one thing and Mr.

Hensley is saying another thing, and consistent with Mr. Hensley,

is Raymond Kelly, the Commissioner of Customs. And I go back to

what I said from the beginning.

Mr. GATELY. Yes.

Mr. CUMMINGS. These people are sworn to enforce the law, too.

And they, of course, are out there beating the bushes trying to

make sure that we rid our country of drugs and doing, I hope, what

they are supposed to do. And so I am just trying to get some balance here.

Mr. GATELY. Sir, are you suggesting I wasn’t?

Mr. CUMMINGS. Oh, no, no.

Mr. GATELY. Oh, OK.

Mr. CUMMINGS. As a matter of fact, what I am saying to you is

you have given your side, but what we also have to look at, is the

fact that we have got these two gentlemen who are, for all we

know, honorable people, just as we assume you are an honorable

man. And we don’t have them here.

77

And right now, we got the press writing things, and they are getting one side of it, and we have got letters that say just the opposite to what you are saying.

Mr. GATELY. Of course.

Mr. CUMMINGS. All right. Now, I am just wondering, when you

said there were two scheduled times when the operation was supposed to end. Is that right?

Mr. GATELY. That is correct, sir.

Mr. CUMMINGS. Did a meeting take place? Let’s say the first

time, did a meeting take place with regard to the ending of it?

Mr. GATELY. Several times.

Mr. CUMMINGS. All right.

Mr. GATELY. Several meetings in regard to the end of it.

Mr. CUMMINGS. And who would normally be in those meetings?

Mr. GATELY. Local and Los Angeles—the senior officials, Mr.

Hensley, his associate, Zack, or Deputy Steve Woody, myself. Sometimes the group supervisor within the operation; occasionally, the

case agent; sometimes one or more of the prosecutors who were

part of the operation.

Mr. CUMMINGS. And would these meetings go on a consensus, or

was it basically one person’s decision no matter what anybody said,

or was it a vote, or what?

Mr. GATELY. There was no voting, sir. It was typically a consensus of opinion, whether we could end it, or we needed more time

to develop the case, or the prosecutors needed more time to develop

the documents, or the information they had to develop the documents so that they could file those documents with the court, so

when the case ended, we could do things necessary to the takedown, such as make arrests or search warrants, seizure warrants,

et cetera.

Mr. CUMMINGS. So, when you had the meetings around the first

scheduled ending—— Mr. GATELY. Yes, sir.

Mr. CUMMINGS [continuing]. You were in disagreement that it

should end. You didn’t feel that it should end; is that right?

Mr. GATELY. I—yes; I thought we should go on.

Mr. CUMMINGS. And did you go on?

Mr. GATELY. We did, but not for that reason.

Mr. CUMMINGS. Well, why did you go on?

Mr. GATELY. Because the prosecution said they weren’t ready, so

we went on because they weren’t ready.

Mr. CUMMINGS. OK. Was there any difference of opinion coming

from Hensley at that time?

Mr. GATELY. Absolutely.

Mr. CUMMINGS. I am sorry?

Mr. GATELY. Yes, sir, there was.

Mr. CUMMINGS. And what was that?

Mr. GATELY. He wanted to have a 30-day period of darkness.

Mr. CUMMINGS. And what does that mean?

Mr. GATELY. I bet you want to know what that means.

Mr. CUMMINGS. Suspended, suspend?

Mr. GATELY. Suspend all operations for 30 days to allow the

prosecution to catch up.

Mr. CUMMINGS. OK. But what happened?

78

Mr. GATELY. We continued on, sir, because to suspend operations

for even a few days would damage our creditability with our partner criminals. That would be the fallout from not communicating

with them or conducting business with them.

Mr. CUMMINGS. So you proceeded on?

Mr. GATELY. Yes, sir.

Mr. CUMMINGS. Were there others, other than Mr. Hensley, that

had a difference of opinion about you?

Mr. GATELY. With me?

Mr. CUMMINGS. With you; yes.

Mr. GATELY. Steve Woody and his associate, Zack. One of the

three prosecutors, Dwayne Lyons, disagreed with me. Yes, sir.

Mr. CUMMINGS. So one of the prosecutors disagreed with you?

Mr. GATELY. Two agreed, but one disagreed.

Mr. CUMMINGS. All right. Now, why don’t we move to the second.

So the process continued, the operation continued.

Mr. GATELY. That is correct.

Mr. CUMMINGS. Now let’s move on to the second——

Mr. GATELY. Take-down date.

Mr. CUMMINGS. Yes.

Mr. GATELY. OK.

Mr. CUMMINGS. Was there another meeting, or meetings?

Mr. GATELY. There was meetings.

Mr. CUMMINGS. Same people?

Mr. GATELY. Same people; same situation. Exactly the same situation. Now infuse the new information about the $1.15 billion.

Mr. CUMMINGS. All right. Now you know, Mr. Gately, Commissioner Kelly stated in his letter——

Mr. GATELY. Yes.

Mr. CUMMINGS [continuing]. Which I understand is a part of the

record, is that ‘‘while assertions of money laundering by high-ranking Mexican Government officials surfaced, at no time was there

any evidence developed that could substantiate these allegations.’’

I take it you disagree with that?

Mr. GATELY. No, I agree with it wholeheartedly.

Mr. CUMMINGS. Now let me ask you this, going back to Mr.

Hensley’s letter, he said some very interesting things, too. And I

just have a few more questions, Mr. Chairman.

On the second page, it says, ‘‘Mr. Gately, also alleges that I accused him of stealing millions in dollars and traveling without authorization. I never accused Mr. Gately of stealing money. Following the takedown of the case, allegations were brought to my

attention by Customs Special Agents that Mr. Gately asked them

to, quote ‘unseize,’ end of quote, millions of dollars in foreign bank

accounts belonging to the informants, an issue that seemed highly

unusual and not reported previously in any report or to Mr.

Gately’s supervisors. This information was reported, as required, to

Customs Office of Internal Affairs, for whatever action was deemed

necessary.’’

Mr. GATELY. My comments, sir?

Mr. CUMMINGS. Yes.

Mr. GATELY. Prevarication.

Mr. CUMMINGS. All right.

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Mr. GATELY. A twisting of the truth, something that Mr. Hensley

is so accomplished at. He should take up a cottage industry in that.

This man can twist anything. If you care to hear the truth, I will

explain exactly what I did.

Mr. CUMMINGS. All right.

Mr. GATELY. I am under oath; Mr. Hensley is not.

Mr. CUMMINGS. Well he is not in here, so—— Mr. GATELY. Well, I suggest that the next time he provides you

with any information, place him under oath; see if he doesn’t

dance.

Mr. CUMMINGS. All right. I hope we will get a chance to do that.

Mr. GATELY. Well, that is very unfortunate.

Mr. CUMMINGS. I am just asking you some questions. I am just

trying to see what the whole story this.

Mr. GATELY. Well, I am about to tell you.

Mr. CUMMINGS. As they say, I just want to hear the rest of the

story. He goes on to say, ‘‘Mr. Gately makes reference to my getting

a Presidential level, SES award. However, he fails to mention that

I was nominated for the award in July 1997, nearly a year before

the takedown of Casablanca. The award was for sustained managerial excellence, with only one reference to Casablanca, but not by

name. Numerous other managerial successes were outlined in the

award nomination spanning several years of my career.’’ Mr. GATELY. What is the question, sir?

Mr. CUMMINGS. Do you think he lied his way through his career?

Mr. GATELY. Absolutely. Absolutely.

Mr. CUMMINGS. I’m sorry?

Mr. GATELY. Absolutely, without question. If you want me to

bring witnesses to that effect, I can arrange it.

Mr. CUMMINGS. I am just reading his letter. [Laughter.]

Just one other thing, on page 1, he says, ‘‘Mr. Gately alleges that

the name of Mexico’s Defense Minister, Mr. Cervantes, came up in

conversations with other Mexican defendants in relation to the

movement of moneys in the $1 billion to $11⁄2 billion range. This

is not factual. Mr. Cervantes’ name was never referred to, but rather a Mexican general later described as the Defense Minister. Both

defendants acknowledged that they had never met the Defense

Minister. Numerous attempts by the undercover agents to push for

a meeting with this alleged General Minister were unsuccessful.’’

That is a lie, too.

Mr. GATELY. A lot of it is a big, fat lie; that is right. That is absolutely correct, sir.

Mr. CUMMINGS. OK. OK. You just said something.

Mr. GATELY. Do you want me to pick it apart for you? I will.

Mr. CUMMINGS. No, no. You said a lot of it is a big, fat lie. Can

you tell me which part isn’t?

Mr. GATELY. The fact that he says that I said that Mr. Cervantes’ name was mentioned is a big, fat lie.

Mr. CUMMINGS. All right.

Mr. GATELY. I never said that. There is no reference to that anywhere.

Mr. CUMMINGS. He said one thing that I didn’t ask you about.

Are you going to write a book?

Mr. GATELY. Which part is that?

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Mr. CUMMINGS. Are you going to write a book?

Mr. GATELY. Am I going to write a book, sir?

Mr. CUMMINGS. Yes.

Mr. GATELY. I have no contract to write a book. I have made no

attempt to get an agent, to find a publisher, or do anything of that

sort. But if I do write a book, sir, it would be the absolute unabridged truth.

Mr. CUMMINGS. I just have one more question. You allege that

Customs Service prematurely shut down this operation to protect

the General; is that right?

Mr. GATELY. I did not.

Mr. CUMMINGS. You didn’t?

Mr. GATELY. I did not.

Mr. CUMMINGS. Why do you think they prematurely shut it

down?

Mr. GATELY. I give you five specific reasons in my statement why

they prematurely shut it down.

Mr. CUMMINGS. You don’t think it had anything to do with the

General?

Mr. GATELY. It didn’t necessarily have to do with the General. It

did have to do with what I believed to be the infusion of politics

into the process of investigating criminals who were laundering

money. That is what I said, and that is what I have always said.

Mr. CUMMINGS. Do you allege that the General was a part of

that?

Mr. GATELY. I don’t know, sir. I couldn’t investigate it. I was not

allowed to. It was over. I was removed from my position, so I

couldn’t take it on as a project, a post-covert operation.

Mr. CUMMINGS. When Commissioner Kelly says that he was worried that his personnel; lives might be compromised, and that is

one of the main reasons why the operation was shut down; did he

ever say that to you?

Mr. GATELY. He did not.

Mr. CUMMINGS. Do you believe that?

Mr. GATELY. Do I believe—— Mr. CUMMINGS [continuing]. That his concern that—— Mr. GATELY. Yes, I believe that he is always concerned for his

agents, as was I, because I was their supervisor. I was the one seen

with them. I was there with them everyday. If I thought for 1

minute, 1 second, even a fragment of a second, that there was danger to them, I would not allow them to proceed. Any undue danger,

I would never have allowed them to proceed at any phase of this

undercover operation.

Mr. CUMMINGS. So let me make sure I understand this. If he said

that he was concerned, and you said you believe him when—you

believe he has a history of being concerned about his people.

Mr. GATELY. Yes, I do.

Mr. CUMMINGS. And if he says that this is one of the main reasons why he shut down the operation, you have no reason to disbelieve that; do you?

Mr. GATELY. Absolutely not.

Mr. CUMMINGS. All right.

Thank you.

Mr. GATELY. Thank you, sir.

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Mr. MICA. Mr. Barr, from Georgia.

Mr. BARR. Thank you, Mr. Chairman.

Mr. Gately.

Mr. GATELY. Yes, sir.

Mr. BARR. We have talked a lot about Mr. Cervantes. What is his

relationship with the Government and, in particular, the President

of Mexico?

Mr. GATELY. He is a member of Mr. Zedillo’s cabinet, he is the

Defense Minister, or the Secretary of Defense.

Mr. BARR. Would that presume that he is somewhat close to the

President?

Mr. GATELY. I would presume that, yes——

Mr. BARR. OK.

Mr. BARR [continuing]. As in all cases in governments that have

a structure of that nature.

Mr. BARR. And as I understand your testimony today, you are

not testifying that you have firsthand knowledge that he has been

involved in this money laundering, simply that there are indications of that, and that there are indications, very clear indications,

through your investigation and through the evidence that you all

turned up as a result of that investigation, that there is involvement at the highest-levels of the Mexican Government in the

money laundering. Is that sort of a fair characterization of your

testimony?

Mr. GATELY. Yes, sir, it is.

Mr. BARR. And is it also your testimony today that, in your professional judgment, this operation was prematurely shut down?

Mr. GATELY. In my professional judgment, yes, sir.

Mr. BARR. And at least in part because of what appear to be political reasons not directly related to the operation, itself?

Mr. GATELY. Reasons that I say were infused into the operation

before it became operational, and talked about throughout the operation.

Mr. BARR. Thank you very much.

Mr. GATELY. Thank you, sir.

Mr. MICA. Mr. Weitzman, you have a little bit different perspective. You——

Mr. WEITZMAN. I was enjoying listening to the other half.

[Laughter.]

It is far easier.

Mr. MICA. Well, I think you served on the Mexican border some

years ago, and are now an agent in Orlando?

Mr. WEITZMAN. I work in narcotics in Orlando; yes, sir.

Mr. MICA. Yes. And could you tell the panel what you see as far

as trafficking at your level and the source of the drugs?

Mr. WEITZMAN. The best picture I could draw for you is the one

I went through, the one depicted on ‘‘60 Minutes,’’ where I stopped

a propane gas truck that we later found out to be holding 4.3 tons

of cocaine. And my supervisor that day—and I don’t need to mention names—called me in behind closed doors and handed me the

referral slip and asked me to sign it to the streets of the country,

and I refused. And following that incident, life hasn’t been real

pleasant, let’s put it that way.

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Mr. MICA. So, because you have come forward, you feel you have

been—I don’t know if I want to say ‘‘harassed,’’ but maybe that is

the only term. Do you feel some sense of harassment?

Mr. WEITZMAN. I think when you get phone calls at your home

making comments like calling you a ‘‘f’’-ing kike and take your ‘‘f’’- ing kike baby with you, or when you have supervisors come out to

the field to confront your spouse and tell your spouse how they

masturbate the narcotics dog, in an attempt to get you to take a

swing at one of them or try to undermine your creditability, yes,

I would pretty much call that harassment.

I think when one of your supervisors admits to upper management that he is going to be hassling information out of a grand jury

witness, that pretty much covers it.

Mr. MICA. Well, I was going to ask you—— Mr. WEITZMAN. And to go further—— Mr. MICA [continuing]. For examples—[laughter]—but I don’t

have to. [Laughter.]

You had a very brief opening statement—[laughter]—and a brief

questioning period.

Well, I think we would like to pursue some of the matters that

have been discussed here today. We are going to do that in two

ways.

First of all, Mr. Gilman and I have introduced a resolution, and

others will be joining us which will extend the period for review of

decertification for another 30 days. In that time, we hope to see

how far this particular trail leads us concerning the problem of corruption in Mexico and the question of ‘‘full cooperation.’’ We will be taking some additional steps tomorrow to ensure this

matter is raised to an even higher level, based on, not only the testimony that we had from witnesses today, but information that Mr.

Barr has referred to that we have received in closed briefings.

He may also, with the cooperation of friends on the other side of

the aisle, seek to find some additional information, either voluntarily or with subpoenas to see, again, how far this trail leads.

But I appreciate both of our witnesses coming forward today and

providing our subcommittee with testimony.

There being no further business, Mr. Barr.

Mr. BARR. Can I just ask one followup question?

Mr. MICA. Yes.

Mr. BARR. Mr. Weitzman, is the treatment that you have received basically for refusing to sign a piece of paper allowing a

huge amount of cocaine voluntarily into this country? Is that the

only such incident that you are aware of?

Mr. WEITZMAN. Listening to my colleague to my left is like reliving a horror story because I went through what he went through

a few years earlier with the sniping, the comments that are made

to you, just like I told all of you earlier. It brings up so many sore

and really angry feelings inside me because it took me 9 years to

get to this point where I had an opportunity to come before all of

you and tell you that these things really do happen, that people

really do get hurt out there, that people like Mr. Gately and myself

do suffer reprisals, because you are just doing your job.

The job is to interdict narcotics, and it just so happened that a

load of narcotics that I interdicted could be directly linked to 21

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tons found in a warehouse in Sylmar, and that is not a game anymore. Now it is the real deal. And that 21 tons is part of a 250-

ton shipment that crossed the border in the late–1980’s, all of

which are tied to the same cartel that my friend is telling you

about now.

Mr. BARR. The Mexican cartel?

Mr. WEITZMAN. The Juarez cartel.

Mr. BARR. Thank you very much.

Mr. WEITZMAN. My pleasure, sir.

Mr. BARR. I very much appreciate your courage and Mr. Gately’s

courage in being here today.

Mr. WEITZMAN. Let’s hope I have a job when I get home.

Mr. MICA. Thank you, Mr. Barr.

Mr. BARR. Let us know if you don’t.

Mr. MICA. Mr. Cummings.

Mr. CUMMINGS. Yes, I hope you have a job when you get home,

too. I really do.

Mr. WEITZMAN. Thank you.

Mr. CUMMINGS. I think all of us have a common goal and that

is to make sure that drugs don’t enter our country and to do everything in our power to get them out, and make sure those who are

responsible for trying to bring them in, or are bringing them in, are

dealt with properly.

Both of you have raised some very strong allegations, and it concerns me. I mean the examples that you just gave, Mr. Weitzman,

about your wife, talking about—— Mr. WEITZMAN. Well, actually, what—just so you understand— while we were being transferred from Nogales, AZ, over to Miami,

FL, we had received a call at our home. And I picked up the call,

and it said, ‘‘You better move, you ‘f’-ing kike and take your ‘f’-ing

kike baby with you.’’ I reported it to Internal Affairs, and it is the

typical Customs mentality of, ‘‘How do you know it came from

within Customs?’’ Well, you know, it is simple—and maybe it isn’t fair to say that—

but how did anybody know I was moving and being transferred?

And how did somebody get my unlisted number? Why were people—why was the supervisor going out discussing blatant acts of

bestiality to my wife? I mean, this is just unimaginable that these

things go on.

Why was my report regarding the tanker, the truth of what I

have just told you now and a lot of what we discussed—the counsels and I have discussed in private—why was it deleted, with everything my supervisor did taken out of it and rewritten and submitted as fact?

This is the story; this is what has gone on, and it has gone on

too long, and it is time for it to come to an end.

Mr. CUMMINGS. What is your biggest fear? I mean right now you

just said a moment ago, you hope you still have a job, but I

mean—— Mr. WEITZMAN. Honestly?

Mr. CUMMINGS. Yes, sir.

Mr. WEITZMAN. I feel far more comfortable now that we have a

guy like Ray Kelly in there because he does seem to genuinely care

about his people, but I worry more about my colleagues on the opVerDate 11-MAY-2000 13:44 Mar 05, 2001 Jkt 066703 PO 00000 Frm 00087 Fmt 6633 Sfmt 6602 E:\HEARINGS\62622 pfrm02 PsN: 62622
84

erations on Customs that I am hearing these days with their retaliatory strikes, their ability to listen to Internal Affairs tapes that

are so damning. Much of which I discussed on the tapes that I have

just told all of you now, where I get letters back saying that, in no

uncertain terms, I am full of crap. And I am not full of crap; it is

not a game. It is real life, and it happened, and this is what they

do to people. They don’t just—it starts out with the small little

shots at your integrity, and then it’s like a seek and destroy mission to completely undermine ones credibility, and I am not going

to have it done.

Mr. CUMMINGS. Well, I don’t find myself agreeing with Mr. Barr

too often—[laughter]—friendly disagreements, that is. But I agree

with him on the point that, you know, if you have those kind of

problems, you need to let us know, because we are very concerned

about that. And the fact that if you can come and provide testimony, you under oath, and if there is some type of retaliatory actions as a result of you coming here, that flies in the face of everything we stand for—everything.

Mr. WEITZMAN. If I could interject for 1 second. Mr. Mica and I

had a discussion the other night, and they were concerned about

me—they wanted me to go behind a screen, and I explained to him,

I never ran from anybody in my whole life, and I am not about to

hide behind a screen and tell some story that could be, ‘‘Oh, he

went behind a screen to do it.’’

No, the time is now to get the whole truth out. And there are

a lot of things that we cannot sit here in this forum and discuss,

because it is my belief that they are so deeply national security

sensitive, that the—for choice of a better set of words—the storm

it would cause wouldn’t be pleasant. But I have talked about it

with counsel on both sides. They know what I am talking about,

and it is true, and it happened, and the documentation is there to

prove it.

And I will cut the same deal with all of you that I did with my

supervisor that day in San Diego. If I am lying, I will put my badge

on the desk and I will never come back again. You have my word

on that.

Mr. CUMMINGS. Thank you.

Mr. MICA. Mr. Barr.

Mr. BARR. Thank you, Mr. Chairman.

Mr. Gately, we talked at some length, going back to the substance of what we were talking about earlier, with regard to the

involvement of the Mexican Government and the Colombian cartel.

But one thing we didn’t touch on, and I don’t want to go into a lot

of detail here, but was there any evidence in Casablanca of any involvement of United States banks in the Mexican drug money case?

Mr. GATELY. As knowledgeable that they were moving drug

money, sir?

Mr. BARR. I am sorry?

Mr. GATELY. Every United States——

Mr. MICA. Knowledgeably moving drugs.

Mr. BARR. Yes.

Mr. GATELY. Is your question, were they knowledgeable?

Mr. BARR. Well, I didn’t use that term, but——

85

Mr. GATELY. U.S. banks were involved in every transaction.

There was no evidence obtained during the investigation which

could then induce to determine that they were knowledgeable that

they were dealing with drug money.

Mr. BARR. OK.

Mr. GATELY. But with every transaction, U.S. banks were involved.

Mr. BARR. Yes, I mean the wire transfers and so forth, but—— Mr. GATELY. Every instrument issued in the case of the Mexican

bank drafts were eventually paid at the account of the Mexican

bank at the United States bank.

Mr. BARR. Right. Thank you.

Mr. GATELY. Yes, sir. Thank you.

Mr. MICA. There being no further business to come before this

subcommittee, this meeting is adjourned. And I thank our witnesses again.

[Whereupon, at 4:40 p.m., the subcommittee was adjourned.]

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