DEA Congressional Testimony
October 29, 1997

DEA Congressional Testimony

Statement by:
James S. Milford
Acting Deputy Administrator of the Drug Enforcement Administration

Before the:
Senate Foreign Relations Committee and Senate Drug Caucus

Regarding:
Anti-Narcotics Cooperation with the Government of Mexico

Date:
October 29, 1997

Note: This document may not reflect changes made in actual delivery.

Contents

Major Traffickers

The Amado Carrillo-Fuentes Organization

The Caro-Quintero Organization

The Arellano-Felix Organization

The Amezcua Organization

Joaquin Guzman-Loera

Impact of Mexican Drug Traffickers on the United States

The Southwest Border Initiative

Cooperation with Mexico on Counternarcotics Matters

Conclusion


Mr. Chairman and Members of the Committee: Thank you for the invitation to testify before your Committee and the Caucus this afternoon, on the subject of anti-narcotics cooperation with the Government of Mexico. As you are well aware, traffickers from Mexico pose a significant threat to the United States, as well as to the citizens of Mexico. Within the past several years, major trafficking organizations from Mexico have emerged as major players in the international drug trade, and have become almost as powerful as the cocaine traffickers from the Medellin and Cali drug organizations were at the pinnacle of their careers.

In order to appreciate the nature and scope of the drug trafficking activities in Mexico, it is necessary to look at the historic role of traffickers from Mexico and assess their role in today's global drug trafficking enterprise.

Drug trafficking organizations from Colombia and Mexico are popularly referred to as "cartels", a phrase which is inaccurate and misleading because it implies that cartel leaders are legitimate businessmen. In truth, the drug trafficking organizations operating today, from headquarters in Cali, Guadalajara, Tijuana, Juarez, Sonora or the Gulf Coast are international organized crime syndicates which control the cocaine trade, a growing portion of the heroin trade, and the vast majority of the methamphetamine and marijuana trades which impact the United States. The leaders of these organizations conduct their sophisticated businesses with the assistance of thousands of employees, high grade weapons, state of the art communications equipment and almost unlimited sources of income to bribe and intimidate those who might challenge their operations.

Unlike the leaders of organized crime who, during the past decades, resided in the United States and conducted their business within our national borders, these drug traffickers oversee a huge network of employees and resources from thousands of miles away. It is therefore necessary for the U.S. Government to work cooperatively with the Governments of Colombia and Mexico, as well as many other governments around the world, to identify, target, arrest, prosecute, convict and incarcerate these international organized crime leaders.

During 1995 and 1996, the brave men and women of the Colombian National Police, under the leadership of General Rosso Serrano, successfully pursued and arrested many leaders of the Cali mafia. Today, the top leadership of the Cali syndicate is in prison after surrender or arrest, and others are dead. With the incarceration of the major Cali traffickers, criminals from Mexico began gaining prominence in the cocaine trade.

Traffickers from Mexico have traditionally been involved in smuggling cocaine, heroin, methamphetamine and marijuana into the United States, but in many cases, they served as the transportation arm of the Colombian organizations. During the late 1980's, the Cali group worked closely with traffickers from Mexico to transport cocaine using 727 aircraft and landing areas in Mexican territory. The aircraft also returned bulk cash payments to Colombia after they were smuggled into Mexico.

In the early 1990's, traffickers from Mexico began receiving payment for their transportation services in the form of cocaine. They then expanded their already well-established distribution networks in the United States to distribute the cocaine, effectively increasing their profit margin by 300% per shipment. Today, the majority of the cocaine entering the United States comes from Colombia through Mexico and across U.S. border points of entry. There is evidence that traffickers in Mexico have gone directly to the sources of cocaine base in Bolivia and Peru in order to circumvent Colombian middlemen. Additionally, traffickers from Mexico are the primary source of methamphetamine in California, the Southwest and increasingly the Southeast regions of the United States, and recent DEA statistics indicate that 20% of the heroin seizures made in the United States in 1996 were of Mexican origin. Two recent DEA operations also indicated that traffickers from Mexico have now become direct distributors of cocaine in New York, a role which had been dominated by traffickers from Colombia and the Dominican Republic.

DEA considers the traffickers from Mexico, because of their involvement in polydrug smuggling, their proclivity for extreme violence and their geographic proximity to the United States, to be a more distinct and eminent danger to the U.S. than the Colombian organizations.

Major Traffickers from Mexico

The leaders of Mexico's international organized crime drug trafficking syndicates are well-known to U.S. law enforcement, and many of them are charged in numerous indictments in the U.S. Only two major drug trafficking figures are no longer operating their lucrative businesses: Juan Garcia Abrego, who held dual citizenship, was turned over to the United States for prosecution in 1996 and is currently serving 11 life terms after his conviction in Houston; and Amado Carrillo-Fuentes, who died after plastic surgery in a Mexican hospital this past July. However, the Amado Carrillo-Fuentes Organization (ACF) is still functioning as a major trafficking group, despite its leader's death.

The Amado Carrillo-Fuentes Organization: Carrillo-Fuentes was known as the "Lord of the Skies" because of his renown in transporting plane loads of cocaine for Colombian traffickers. Before his death, Amado Carrillo-Fuentes had extensive ties to the former Commissioner of the INCD, the National Institute to Combat Drugs, General Gutierrez-Rebollo, and he was reported to have shipped $20-30 million to Colombia for each major operation. Amado Carrillo-Fuentes' organization is based in Juarez, and is associated with the Cali Rodriguez-Orejuela organization and the Ochoa brothers of Medellin. In addition to cocaine smuggling, the ACF organization is responsible for heroin and marijuana trafficking, and has bases in Guadalajara, Hermosillo and Torreon where drugs are stored before shipment to the United States.

Amado's brother Vicente has been indicted in the Northern District of Texas for cocaine violations and a warrant was issued for his arrest in late 1993. At the time of his death, Amado Carrillo-Fuentes was charged in numerous U.S. indictments in Florida and Texas, and was a fugitive on heroin and cocaine charges. An associate in the ACF organization, Oscar Malherbe, once a lieutenant for Juan Garcia-Abrego, was responsible for the shipment of 2,000 kilograms of cocaine from Colombia to Mexico each week. He was arrested on February 27, 1997, on drug trafficking and weapons charges and a provisional arrest warrant has been forwarded by the U.S. to Mexico. Formal extradition documents were presented in late April. The Mexican Foreign Ministry has declared him extradicable but, according to the Mexican Government, extradition will be deferred until the conclusion of Mexican legal proceedings and any subsequent sentence imposed by the Mexican government.

While the full impact of Amado Carrillo-Fuentes' death has not been totally assessed, it is clear that a power struggle ensued this summer as rivals and associates sorted out business arrangements and turf. It is also clear, however, that after the arrest of General Gutierrez-Rebollo in March, Amado Carrillo-Fuentes had been feeling pressure from law enforcement in the U.S. and Mexico, and he had made efforts to disguise his appearance and relocate some of his operations to Chile.

The Caro-Quintero Organization: This group is based in Sonora, Mexico and is involved in cocaine and methamphetamine smuggling, and marijuana production and trafficking. It is headed by Miguel Caro-Quintero, whose brother, Rafael, is in jail in Mexico for his role in the 1985 killing of DEA Special Agent Enrique Camarena.

After receiving bribes, a Federal judge in Hermosillo, Mexico dismissed charges against Miguel Caro-Quintero in 1992, and since that time, he has operated freely within Mexico. He is the subject of numerous U.S. indictments and is currently also the subject of our provisional arrest warrant in Mexico issued in the United States. A request for the extradition of Miguel and Rafael Caro-Quintero was forwarded to the Government of Mexico by the U.S.

The Arellano-Felix Organization: Based in Tijuana, this organization is one of the most powerful, violent and aggressive trafficking groups in the world. The Arellano-Felix Organization (AFO) has high level contacts within the Mexican law enforcement and judicial systems and is directly involved in street level trafficking within the United States. According to extradition documents submitted by the Government of Mexico in San Diego, members of the AFO reportedly dispense an estimated $ 1 million weekly in bribes to Mexican federal, state and local officials to ensure they will not interfere with the group's drug trafficking activities.

The Arellano family, composed of seven brothers and four sisters, inherited the organization from Miguel Angel Felix-Gallardo upon his incarceration in Mexico in 1989 for his complicity in the murder of DEA Special Agent Enrique Camarena. Alberto Benjamin Arellano-Felix has assumed leadership of the family enterprise and provides a businessman's approach to the management of their drug empire.

AFO maintains well-armed and well-trained security forces, described by Mexican enforcement officials as paramilitary in nature, which include international mercenaries as advisors, trainers and members. Ramon Arellano-Felix's responsibilities consist of the planning of murders of rival drug leaders and those Mexican law enforcement officials not on their payroll. Also targeted for assassination are those AFO members who fall out of favor with the AFO leadership or simply are suspected of collaborating with law enforcement officials. Enforcers are often hired from violent street gangs in cities and towns in both Mexico and the United States in the belief that these gang members are expendable. They are dispatched to assassinate targeted individuals and to send a clear message to those who attempt to utilize the Mexicali/Tijuana corridor without paying the area transit tax demanded by the AFO trafficking domain.

The AFO also maintains complex communications centers in several major cities in Mexico to conduct electronic surveillance and counter-surveillance measures against law enforcement entities. The organization employs radio scanners and equipment capable of intercepting both hard line and cellular phones to ensure the security of AFO operations. In addition to technical equipment, the AFO maintains caches of sophisticated automatic weaponry secured from a variety of international sources.

Ramon Eduardo Arellano-Felix, considered the most violent brother, organizes and coordinates protection details over which he exerts absolute control. On September 11, 1997, he was added to the FBI's 10 Most Wanted List. Ramon was indicted in San Diego, California, on charges relating to importation and conspiracy to import cocaine and marijuana. A Joint Task Force, composed of the Drug Enforcement Administration, the Federal Bureau of Investigation in San Diego, California, and state and local officers, is continuing its investigation into the Arellano-Felix Organization, including Benjamin Arellano-Felix, Chairman of the Board, for cocaine trafficking. Our goal is to investigate and prosecute the entire Arellano-Felix Organization as a continuing criminal enterprise that has sent multiple tons of cocaine from Mexico into the United States in this decade.

The Amezcua Organization: The Amezcua-Contreras brothers, operating out of Guadalajara, Mexico, head up a methamphetamine production and trafficking organization of global proportions. Directed by Jesus Amezcua, and supported by his brothers, Adan and Luis, the Amezcua drug trafficking organization today is probably the world's largest smuggler of ephedrine and clandestine producer of methamphetamine. With a growing methamphetamine abuse problem in the United States, this organization's activities impact on a number of the major population centers in the U.S. The Amezcua organization obtains large quantities of the precursor ephedrine, utilizing contacts in Thailand and India, which they supply to methamphetamine labs in Mexico and the United States. This organization has placed trusted associates in the United States to move ephedrine to Mexican methamphetamine traffickers operating in the U.S. Jose Osorio-Cabrera, a fugitive from a Los Angeles investigation until his arrest in Bangkok, was a major ephedrine purchaser for the Amezcua organization.

Joaquin Guzman-Loera: Although his brother, Arturo Guzman-Loera, has now assumed the leadership role, Joaquin Guzman-Loera began to make a name for himself as a trafficker and air logistics expert for the powerful Miguel Felix-Gallardo organization. Guzman-Loera broke away from Felix-Gallardo and rose to patron level among the major Mexican trafficking organizations. Presently, he is incarcerated in Mexico; however, Mexican and United States authorities still consider him to be a major international drug trafficker. The organization has not been dismantled or seriously affected by Guzman-Loera's imprisonment because this organization continues to transport cocaine from Colombia through Mexico to the United States for the Medellin and Cali organizations and is also involved in the movement, storage, and distribution of marijuana, as well as Mexican and Southeast Asian heroin. This organization controlled the drug smuggling tunnel between Agua Prieta, Sonora, Mexico and Douglas, Arizona through which tons of cocaine were smuggled.

Guzman-Loera, who has been named in several U.S. indictments, was arrested on June 9, 1993 in Talisman, Mexico for narcotics, homicide, and cocaine trafficking and is presently incarcerated at the Puente Grande Prison, Jalisco, Mexico.

Impact of Mexican Drug Traffickers on the United States

The violence associated with the international drug trafficking syndicates does not take place only in Mexico; unfortunately, cities like San Diego, California and Eagle Pass, Texas have been besieged by the actions of drug trafficking organizations smuggling drugs into the U.S. from Mexico, and many Americans have been victimized by the violence and crime attendant to the drug trade.

With the death of Amado Carrillo-Fuentes this past July, rivals and associates of the AFO engaged in a campaign of violence which transformed Juarez, Mexico and El Paso, Texas into battle zones. More than 18 people were killed in a bid for control over the Carrillo-Fuentes organization. For the time being, that wave of violence has abated and the power struggle may have been sorted out.

One area of major concern over the past several months has been an increase in the number of threats and brazen assaults and murders against Mexican law enforcement officials and sources of information. Threats have also been received against U.S. law enforcement officials and prosecutors. A number of Mexican journalists have been targets of violence, or had their lives threatened, possibly as part of an effort on the part of drug traffickers to silence attempts by the media to shed light on their heinous actions.

Traffickers from Mexico have assumed a major role in drug trafficking operations within the United States, not only dominating the wholesale cocaine trade in the West and Midwest, but also have become significant traffickers operating in major east coast cities. Two recent DEA Operations, Limelight and Reciprocity, which I will discuss later, clearly demonstrated the expansion of Mexican syndicates into lucrative east coast markets.

The problem of drug trafficking from Mexico is a complex issue, and must be addressed on both sides of the U.S.-Mexican Border. Because international drug trafficking organizations do not recognize or respect national borders, and because they conduct their business from headquarters in Mexico, while their employees and surrogates wreak havoc in U.S. cities and towns across the nation, it is essential that activities on both sides of the border be targeted with aggressive and co-equal strategies.

The Southwest Border Initiative

An essential element of the strategy is working closely with the Government of Mexico and its law enforcement organizations to identify, target, locate, arrest and prosecute those major international organized crime figures responsible for drug trafficking and violence within the U.S. and Mexico. DEA and the FBI have launched the Southwest Border Initiative (SWBI), designed to dismantle the sophisticated leadership of these criminal groups from Mexico by targeting their command and control functions and building cases on the surrogate members and their U.S.-based infrastructure. The SWBI is anchored in our belief that the only way to successfully attack any organized crime syndicate is to build strong cases on the leadership by attacking their command and control functions. With the assistance of foreign governments, the long-term incarceration of the leadership will leave entire organizations in disarray. The effectiveness of this strategy is hampered only by the difficulty of incarcerating the leadership of these trafficking empires who hide in foreign safe havens like Colombia and Mexico.

This strategy now combines the resources of the DEA, the Federal Bureau of Investigation (FBI), the Department of Justice Criminal Division, the United States Attorneys' Offices, The High Intensity Drug Trafficking Area Program (HIDTA), the United States Customs Service (USCS), and a host of state and local counterparts. Through this initiative, we have been able to harness the investigative, intelligence and operational functions of all of the members and coordinate joint investigations against the major drug trafficking organizations. The investigations stemming from the Southwest Border Strategy are not confined to the border region of the U.S., they target trafficking organizations which affect the whole country. Most of the major international cases, such as those which were part of Operations Limelight and Reciprocity, begin with cases first made on U.S. soil.

Operation Reciprocity and Operation Limelight, which were part of the Southwest Border Initiative, demonstrated the importance of law enforcement's ability to successfully target the communications of the upper echelon of international criminal organizations. These operations targeted U.S.-based cells of the Amado Carrillo-Fuentes organization and resulted in the seizure of 11.5 metric tons of cocaine, over $18 million in U.S. currency, almost 14,000 pounds of marijuana and the arrest of 101 defendants. The operations, which began with seizures in the United States, took apart drug trafficking organizations that were expanding their reach from Mexico across the border into the United States, as far into the country as the New York City region.

We started Operation Reciprocity, nearly a year ago, in October 1996, by identifying the command elements of the Amado Carrillo-Fuentes organization dealing drugs in New York and Los Angeles. Working through the multi-agency and multi district investigative approach and attacking their communication systems, we identified how the traffickers transported cocaine across the country in tractor trailer loads, and returned the illicit profits to Mexico in the form of bulk cash in the same tractor trailers, using drivers hired largely from the Grand Rapids, Michigan area. Reciprocity resulted in 40 arrests, over $ 11 Million in cash, 7.4 tons of cocaine, and 2,700 pounds of marijuana.

Operation Limelight began in August 1996, in Imperial County, California, and focused on the Alberto Beltran transportation and distribution cell of the Amado Carrillo-Fuentes organization. Again by targeting the command and control communications systems of this group, we identified cross-country smuggling routes that employed tractor trailers that hauled tons of cocaine to California, Texas, Pennsylvania, Illinois, and New York. Limelight resulted in the seizure of 4,012 kilograms of cocaine, 10,846 pounds of marijuana, over $7 Million in cash, and the arrest of 48 persons.

Operations Limelight and Reciprocity, like their predecessor operations Zorro I and II, demonstrated that law enforcement can strike major blows against these foreign drug syndicates only if we maintain the ability to target their command and control communications. These communications are critical to the efficient operation of their organizations and are, at the same, time their greatest vulnerability. This vulnerability will only continue as long as law enforcement has access to their communications. With sophisticated communication encryption equipment and software becoming available to these wealthy traffickers, our access to their key communications could be severely limited or completely eliminated in the near future if law enforcement is not given access to encryption decoding devices and means.

Cooperation with Mexico on Counternarcotics Matters

It is DEA's intention to remain actively engaged with law enforcement counterparts from Mexico in our mutual efforts to dismantle the violent international drug trafficking syndicates. However, because of a number of factors --- frequent reorganizations and changes in counterpart agencies, as well as a lack of adequate training and security mechanisms -- progress in full cooperation with counterparts from Mexico is slow.

Since March of this year, however, some encouraging developments have taken place, indicating a willingness on the part of the Government of Mexico to improve their drug organizations, as well as their overall performance in investigating the organized crime syndicates in Mexico who exert absolute control over the flow of cocaine, methamphetamine, and heroin into the U.S. from Mexico.

After the arrest of General Gutierrez-Rebollo in February, the Government of Mexico dismantled the National Institute for the Combat of Drugs [INCD]. The reconstitution of the anti-drug institutions in Mexico is an enormous task, and we are committed to assisting Attorney General Madrazo in the formation of a quality drug law enforcement team. We recognize the absolute necessity that professional counter-drug units be established, if our two countries are to succeed against the drug lords in Mexico. In place of the INCD, the Government of Mexico established a new anti-drug unit, the Special Prosecutor's Office of Drug Crimes, the Fiscalia Especializado para Atencion Delitos contra La Salud, or FEADS. It was apparent that, in order to be effective, Mexican law enforcement organizations needed to be staffed with high-caliber, trustworthy individuals who are deeply committed to drug control efforts. FEADS is responsible for drug law enforcement under the office of the Mexican Attorney General, Procuraduria General de la Republica, or PGR, and is headed by Commissioner Mariano Herran-Salvetti, an attorney. Attorney General Madrazo and Commissioner Herran have instituted a program of selecting and "vetting" employees involved in counterdrug activities. The Mexican vetting process involves a psychological assessment, financial background checks, urinalysis, and polygraphs. DEA and the FBI have also worked with the Government of Mexico, at the Mexican request, to help train individuals who are further vetted, and who will work on more sensitive law enforcement projects.

FEADS currently employs approximately 870 agents, of which 200 are "vetted" by the Mexican Government, and a portion of those have been vetted further. Plans call for a total of 2,000 fully Mexican-vetted employees and both the DEA and FBI are committed to assisting the Government of Mexico reach that goal.

Under the auspices of FEADS are two specialized units, including the Organized Crime Unit (OCU), and the bilateral Border Task Forces (BTF's). Both specialized units report to Dr. Samuel Gonzalez-Ruiz, who is also an attorney. These units, in which Americans and Mexicans work in conjunction, are charged with the responsibility of gathering intelligence and building cases against the most significant drug traffickers in Mexico. Both organizations are comprised of cleared and U.S.-vetted employees, although neither is fully staffed yet.

The Bilateral Task Forces, which were originally established in Tijuana, Juarez, and Monterrey, were conceived on a framework of frequent and continued interaction between the United States and Mexican law enforcement officers at the operational level and a free flow of information. The goal was to ultimately create a unit in each city which could coordiate the joint resources of Mexico and the United States against syndicate leaders. Unfortunately, the BTF's have never reached their full potential as DEA, FBI, and Customs have had to adopt a less effective operational strategy.

Because of the inexperience of the new BTF staff and inadequate funding, they have not initiated investigations against the major traffickers in Mexico. The only way these BTF's can become truly effective is with law enforcement from both countries working side-by-side on both sides of the U.S./Mexican border to build substantive, prosecutable cases against syndicate leaders. The success of the BTF's is vital as we seek to stem the violence and corruption attendant to the drug trade in Mexico from spilling across the border into our cities and towns.

Conclusion

DEA remains committed to our primary goal of targeting and arresting the most significant drug traffickers operating in the world today. In order to meet this goal, it is essential that we have trustworthy and competent agencies in Mexico working side-by-side with us. We will continue to assist the Government of Mexico as they work to improve their law enforcement capabilities. We believe that progress will not occur overnight, and substantial time is necessary for real improvements in Mexico's law enforcement organizations to bear fruit. The ultimate test of success will be if the Arellano-Felix brothers, the Amezcuas, and the leaders of the other Mexican drug syndicates are brought to justice in either Mexico or the United States and sentenced to prison terms commensurate with their crimes against society.

Thank you for your invitation to appear today before the Committee, and I will be happy to answer any questions you might have for me.

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