Mexico is the primary transit country for cocaine entering the United States from South America as well as a major source country for heroin, marijuana and, more recently, methamphetamine. U.S. law enforcement efforts in the southeastern United States and the Caribbean during the mid-1980s caused cocaine traffickers to expand routes to the drug markets in the United States. The traffickers’ preferred routes were through Mexico, a country with a 2,000-mile border with the United States, a 30-year history of heroin and marijuana smuggling, and the existence of cross-border family ties. The Drug Enforcement Administration (DEA) estimates that up to 70 percent of the cocaine entering the United States currently transits Mexico. Since 1977, we have issued four reports that examined various aspects of U.S. and Mexican efforts to control drug production and trafficking. Many of the problems discussed in those reports continue to adversely affect current drug control efforts in Mexico. In our June 1995 testimony on U.S. efforts to stop the flow of drugs from cocaine producing and transit countries, we highlighted problems in such areas as changes in the U.S. drug interdiction strategy; competing foreign policy objectives at some U.S. embassies; coordination of U.S. activities; management and oversight of U.S. assets; and willingness and ability of foreign governments to combat the drug trade. This report updates our prior work on drug control efforts in Mexico. The importance of Mexico to U.S. drug control efforts is best described by the Department of State, which reported in March 1996 that “. . . no country in the world poses a more immediate narcotics threat to the United States than Mexico.” This view was reiterated by the Administrator of DEA, who testified in August 1995 that Mexico was “. . . pivotal to the success of any U.S. drug strategy.” It is estimated that up to 70 percent of the more than 300 tons of cocaine that entered the United States in 1994 transited Mexico. DEA estimates that, at any one time, from 70 to 100 tons of cocaine are stockpiled in Mexico for movement into the United States. In its March 1996 International Narcotics Control Strategy Report, the Department of State estimated that Mexico supplies 20 to 30 percent of the heroin, which is the predominate form of heroin available in the western half of the United States, and up to 80 percent of the foreign-grown marijuana consumed in the United States. Mexican drug-trafficking organizations also dominate the U.S. methamphetamine trade and are major figures in the diversion of precursor chemicals necessary for the manufacture of methamphetamine. Narcotics traffickers use a variety of air, land, and sea conveyances and routes to move cocaine from Colombia (the world’s largest manufacturer) to Mexico. Cocaine shipments are then moved overland through Mexico and across the U.S.-Mexican border. (See fig. 1.) Since the early 1990s, some traffickers have begun to use jet cargo aircraft that are larger and faster than the private aircraft used in the late 1980s. As we recently reported, traffickers in the Caribbean have changed their primary means of delivery and are increasingly using commercial and noncommercial maritime vessels (such as go-fast boats, sailing and fishing vessels, and containerized cargo ships) to transport drugs through the transit zone. According to officials at the U.S. Embassy in Mexico City, about two-thirds of the cocaine currently entering Mexico is transported by maritime means. Department of Defense (DOD) records show that the number of known drug-trafficking events involving aircraft in the transit zone declined by about 65 percent from 1992 to 1995 and that known maritime drug-trafficking events increased by about 40 percent from 1993 to 1995. The U.S. Embassy in Mexico City reported that 15 known air-trafficking events were detected in Mexico during 1995. Drug traffickers respond quickly to interdiction operations by adjusting their delivery routes and means of transport. Some traffickers have begun to use aircraft not ordinarily associated with cocaine movement, such as commercial jets and air cargo aircraft, and maritime vessels to move drugs into Mexico. Traditionally, traffickers have relied on twin-engine general aviation aircraft to deliver cocaine shipments that ranged from 800 to 1,000 kilograms. Beginning in 1994, however, some trafficking groups began using larger Boeing 727-type jet aircraft that could fly faster than U.S. and Mexican detection and monitoring aircraft and deliver up to 10 metric tons of cocaine per trip. To date, there have been eight known deliveries using this means of transport. During the past 3 years, Mexican trafficking organizations operating on both sides of the border have replaced U.S.-based outlaw motorcycle gangs as the predominant methamphetamine manufacturers and traffickers in the United States. DEA estimates that up to 80 percent of the methamphetamine available in the United States is either produced in Mexico and transported to the United States or manufactured in the United States by Mexican traffickers. Methamphetamine seizures in Mexico have grown from a negligible amount in 1992 to 495 kilograms in 1995. Also, the amount of methamphetamine seized along the border rose from 6.5 kilograms in 1992 to 665 kilograms in 1995. Unlike cocaine, Mexican drug-trafficking organizations control the production and distribution of methamphetamine and, because they have complete control, they retain 100 percent of the profits. In recent years, drug-trafficking organizations in Mexico have become more powerful as they have expanded their operations to include not only the manufacture and distribution of methamphetamine but also the trafficking and distribution of cocaine in the United States. Initially, Mexican drug-trafficking organizations acted as transportation agents for Colombian organizations and only smuggled cocaine across the U.S. border. As they became the key transporters for the Colombians, the Mexicans began to demand and receive a portion of the drug shipment for their services. According to DEA, Mexican drug-trafficking groups often receive up to half of a cocaine shipment for their services. This has resulted in Mexican drug-trafficking groups substantially increasing their profits and gaining a foothold in the lucrative cocaine wholesale business in the United States. According to DEA, Mexican drug traffickers have used their vast wealth to corrupt police and judicial officials as well as project their influence into the political sector. The Administrator of DEA recently testified that some of Mexico’s major drug-trafficking organizations have the potential of becoming as powerful as their Colombian counterparts. Proximity to the United States, endemic corruption, and little or no regulation have combined to make Mexico a money-laundering haven for the initial placement of drug profits into the world’s financial system. Once placed in the Mexican financial system, funds can be transferred by wire to virtually anywhere in the world. Mexico is also the most important transit point for bulk money shipments from the United States to the drug-trafficking organizations in Mexico and Colombia. Mexican officials estimated that billions of dollars in drug proceeds were repatriated by Mexican drug-trafficking organizations in 1994, and the total amount moved into Mexico for eventual repatriation to Colombia was much higher. Mexico eradicated substantial amounts of marijuana and opium poppy crops in 1995 but other counternarcotics activities, including cocaine seizures and arrests of traffickers, have declined since 1992. Mexico’s efforts to stop the flow of drugs have been limited by numerous problems. These problems include widespread, endemic corruption; economic and political difficulties encountered by the government of Mexico; the absence of some legislation necessary to provide a complete foundation for a meaningful counternarcotics effort; and inadequate equipment and training that limit Mexico’s capabilities to detect and interdict drugs and arrest drug traffickers. In January 1993, the government of Mexico initiated a policy to conduct its own counternarcotics activities, assumed most of the costs of the counternarcotics effort and refused most forms of U.S. drug-control assistance. This policy, commonly known as the “Mexicanization” of the drug effort, has resulted in major reductions in the U.S. counternarcotics assistance program in Mexico. During this period, Mexico has seized only about half as much cocaine and made only about a third as many drug-related arrests. Despite Mexico’s counternarcotics efforts, the amount of cocaine seized and the number of drug-related arrests in Mexico have declined from 1993 to 1995 compared to those before U.S. assistance was curtailed. The average annual amount of cocaine seized in Mexico from 1990 to 1992 was more than 45 metric tons, including more than 50 metric tons in 1991. In contrast, from 1993 to 1995, average cocaine seizures declined to about 30 metric tons annually, including about 22 metric tons in both 1994 and 1995. The number of drug-related arrests in Mexico in 1992 was about 27,600 persons whereas, by 1995, the number had fallen to about 9,900—a decline of nearly two-thirds. In commenting on this report, the Department of State attributed the decline in the number of arrests to a change in emphasis that focused on arresting major drug traffickers. For example, in January 1996, Mexico arrested Juan Garcia-Abrego, reputed leader of one of Mexico’s drug cartels, and expelled him to the United States for prosecution. Mexico has made some efforts in counternarcotics. For example, Mexican military personnel have increased their participation in combating illicit drugs and destroying illegal airfields. The Mexican Army has traditionally been involved in the manual eradication of illicit drug crops. During 1995, the Mexican government reported that more than 7,000 soldiers worked full time on drug eradication programs and, during peak growing seasons, the number of soldiers working on these programs grew to 11,000.