Statement for the Record

By

Anthony P. Placido

Chief of Intelligence

Drug Enforcement Administration

United States Department of Justice

before the

House Foreign Affairs Committee

Subcommittee on the Western Hemisphere

Regarding

“The U.S. Government’s Domestic Obligations

Under the Merida Initiative”

February 7^th, 2008 10:00 a.m.

Room 2255, Rayburn House Office Building

Washington, D.C. 20515

Introduction

Chairman Engel, Ranking Member Burton and Members of the Subcommittee, on behalf of the Drug Enforcement Administration’s (DEA’s) Acting Administrator Michele Leonhart, I want to thank you for your continued support of the men and women of DEA. I would also like to thank you for the opportunity to testify today on DEA’s enforcement efforts against major drug trafficking organizations.

As this Committee well knows, modern drug trafficking organizations do not limit their criminal enterprises to one geographic area. Successful criminal investigations require the close cooperation and information sharing between a wide variety of law enforcement organizations in multiple countries and jurisdictions. DEA is proud of its role in this effort. Working together with our interagency and international partners, we are working diligently to stem the flow of illicit drugs entering the United States and depriving those criminal organizations of their ill-gotten gains.

Overview

Prior to addressing the Merida Initiative, it is important to view the overarching drug threat within a broader context. The objective of drug trafficking is profit, and this illicit business is enormously profitable. The United Nation’s Office on Drugs and Crime (UNODC) estimates that the global retail market for drugs is approximately $320 billion per year. This effectively places more resources under the collective control of drug trafficking organizations than nearly 90% of the world’s national governments individually have at their disposal for all needs, let alone for countering the drug threat. Approximately 200 million people, or about 5% of the world’s population between the ages of 15 – 64 years of age, are believed to have abused drugs within the last twelve months.

However, even numbers of this magnitude tell only part of the story. The consequences of drug trafficking and abuse can also be measured in lives. The Center for Disease Control estimates that approximately 34,000 people in the U.S. died in 2005 as a direct result of drug abuse. Millions of Americans are addicted or dependent on drugs, and tens of millions more suffer as they watch loved ones squander productive capacity and human potential. Drug abuse and trafficking fuels crime and violence, abuse and neglect, and causes significant environmental damage.

Beyond these losses, drug trafficking is responsible for the corruption of public officials and institutions, diminished respect for the rule of law and the loss of confidence in government institutions, undermining democratic governance and eroding political stability. Moreover, drug trafficking organizations, left unchecked, all too frequently become so powerful that they effectively challenge the authority of legitimate governments and their institutions. In an age when we are increasingly concerned about the spread of terrorism and the proliferation of weapons of mass destruction, it is imperative that we support and strengthen government institutions, particularly those of our immediate neighbors.

Within this broad context, DEA believes that Mexico and Central America play critically important roles in the U.S. counter-drug strategy. Mexican drug trafficking organizations dominate the U.S. inter-agency list of Consolidated Priority Organization Targets (CPOTs), effectively drug Kingpins, which represent the most significant threats to the U.S. and its interests around the globe. Today, 41 of the 46 organizations on the CPOT list are based in Latin America. Of this total, sixteen or 35 percent are Mexican drug trafficking organizations.

The role of Mexico in U.S. counter-drug policy is unique based on geographic proximity and a large shared land border and because Mexico produces much of the methamphetamine, heroin and marijuana consumed by Americans. Additionally, the vast majority of cocaine destined for domestic consumption transits Central America and enters the U.S. from Mexico. The U.S. interagency community estimates that approximately 90 percent of the cocaine entering the U.S. currently transits Mexico. Evidence demonstrates that seizures of cocaine in transit to Mexico are most usually measured by the metric ton, while seizures of cocaine in the U.S. that originated from Mexico are regularly less than 100 pounds, indicating that traffickers view Mexico as a safe haven for the storage of these large drug shipments.

In addition to the important role Mexico plays with regard to the cultivation, production and movement of drugs, NDIC estimates that $8 - $24 billion in bulk currency, which represents the proceeds of illicit drug trafficking, is smuggled out of the U.S. and into Mexico to fuel the next round of production and to fund criminal drug trafficking organizations. Accordingly, it is difficult to overstate the importance of our Central American and Mexican neighbors to U.S. counter-drug policy.

The Administration of Mexican President Calderon has taken dramatic and positive steps to address the drug problem, including the mobilization of tens of thousands of police and military forces to target all of the major drug trafficking cartels. The Mexican Government has conducted more than 80 extraditions to the U.S. in 2007 alone, including several high level narcotics suspects. Mexico has also have taken bold regulatory actions to curtail the flow of essential chemicals used in the production of methamphetamine, and are collaborating and cooperating with U.S. law enforcement as never before.

However, the traffickers are resisting and are engaged in a violent struggle with the Mexican government as well as each other, as they fight over what they perceive to be a shrinking market. Open-source reporting indicates that during the first 15 days of January 2006, immediately following the inauguration of President Calderon, Mexico recorded 80 drug related murders. This number rose to 90 during the first two weeks in 2007, and 111 during the first 15 days of January, 2008. The U.S. Embassy in Mexico reports that in the first eleven months of 2007, approximately 250 Mexican law enforcement officers were murdered as compared to 120 for the same period in 2006. Several of these murders have been sensational, including the beheading of a police officer with his head placed on a pike in front of the police station, presumably as a sign to warn other officers that they should learn to “respect” the traffickers. In contrast, with a significantly larger population, the U.S. recorded twelve (12) police officers killed in the line of duty during all of 2007.

As the lead U.S. law enforcement agency responsible for confronting the illegal drug trade, DEA has been at the forefront of U.S. efforts to work with foreign law enforcement authorities, including the governments of Mexico and Central America. DEA believes a key element of our success in addressing this challenge is our ability to combine our domestic enforcement efforts with our international presence, effectively creating defense in depth. Our enforcement efforts require a system of well-coordinated international and domestic investigations that combine intelligence, operational and regulatory resources of the United States with those of our international partners.

Among our international partners, the recent actions by our Mexican counterparts to comprehensively address the drug problem has been clear and decisive; the Government of Mexico’s commitment has been demonstrated in both words and deeds since the earliest days of the Calderon Administration. These activities would actually reduce opportunities for corruption and human rights abuses by strengthening the capacity to investigate, collect and use evidence and move an arrest through to conviction, without the heavy reliance on confession-related convictions. While we have identified key counterparts and specially trained vetted units that are both reliable and competent to address the threats posed by illegal drugs, the broader systems need reform and support. The Merida Initiative provides this much needed support to address what may be a singularly unique opportunity to consolidate gains and advance counter-drug objectives.

The Merida Initiative

On October 22, 2007, President Bush requested $550 million in emergency supplemental funding to support the Merida Initiative. An addition $550 million was requested in the President’s FY2009 budget. The main goals of this Initiative are to break the power and impunity of criminal organizations, assist the Governments of Mexico and Central America in strengthening border, air, and maritime controls from the Southwest border of the United States to Panama, improve the capacity of justice systems in the region to conduct investigations and prosecutions, implement the rule of law, protect human rights, sever the influence of incarcerated criminals with outside criminal organizations, curtail gang activity in Mexico and Central America, and diminish the demand for drugs in the region.

The Merida Initiative not only seeks to provide our regional partners (Mexico and Central America) with the tools necessary to assist them in this fight but also looks to integrate and complement what each nation is doing within its own territory. Additionally, the Merida Initiative has been designed to complement existing U. S. Government law enforcement strategies, such as the Southwest Border Counternarcotics Strategy and the U.S. Strategy to Combat Gangs from Central America and Mexico. By coordinating each nation’s domestic efforts, working jointly through improved bilateral and regional cooperation and communication, and providing additional resources and support to Mexico and Central America.

DEA believes full funding of the Merida Initiative will serve as a solid foundation to establish a new, fully integrated framework of cooperation for law enforcement partnership through the region.  Our timely support to our partners in funding and aggressive action on our side of the border gives us the best opportunity we have had in years to make serious inroads in dismantling these criminal organizations and reducing the violence on both sides of the border. Funding the Merida Initiative will strengthen DEA’s partners in Mexico, allowing enhanced cooperation and information sharing as we target the drug trafficking organizations threatening the people of both our nations. These enhanced efforts will not only assist DEA operations along the Southwest border, but increased law enforcement capacity in Mexico and Central America will strengthen DEA operations across the board.

The President’s Supplemental FY-2008 Budget Request calls for $500 million for Mexico and $50 million for Central America under the Merida Initiative. Funding under this request is aggregated under three general categories to include: Counter-Narcotics, Counterterrorism and Border Security; Public Security and Law Enforcement; and finally, Institution Building and Rule of Law. My testimony will attempt to address how this funding will enhance ongoing cooperative efforts or establish new programs that would directly involve DEA.

Counter-Narcotics, Counterterrorism and Border Security ($322.89m)

DEA is pleased that a significant portion of this budget request is dedicated to helping Mexico and the Nations of Central America address the complex challenges associated with the drug threat. In fact, the request calls for a total of nearly $323 million of the $550 million request to address this area.

While we have seen a remarkable demonstration of political will -- particularly by the Calderon Administration -- to address the drug problem, there are many complex issues that make it difficult to succeed. From DEA’s perspective, these issues can be grouped together under the headings of integrity assurance and capability. Effective counter-drug operations require law enforcement organizations to share sensitive information among and between a variety of organizations that represent different constituencies. In a perfect world, the agencies with whom this sensitive intelligence is shared would then have the capacity to act in ways that disrupt and /or dismantle the criminal organizations engaged in the activity. Regrettably, the police organizations with whom DEA works are challenged on both fronts and must simultaneously address the issues of corruption and capacity building. In the Mexican context, the issue becomes more complex because President Calderon has called upon the Mexican military to take a very active role in the counter-drug program. This requires extensive coordination not only between Mexico’s military and civilian security services but also among and between various U.S. and Mexican agencies.

In Mexico, DEA works with a congressionally funded Special Investigative Unit made up of approximately 227 police officers assigned to thirteen locations around the country. There is another congressionally funded SIU in Guatemala and “vetted” units in every other country in Central America, with the sole exception of Costa Rica. These units form the backbone of DEA’s efforts throughout the region, because they have been carefully screened to assure their integrity and have received special training to enhance their individual and unit capabilities. The Merida Initiative does not call for new SIU or vetted units, nor increased staffing to the existing units. However, funding from this initiative could provide additional capabilities that could assist these units including air mobility, surveillance, drug detection, and information systems. It should be noted that the majority of these funds are destined for Mexico’s military which does not currently have a close working relationship with DEA, but does work with other components of the U.S. Government. DEA believes that it will be imperative that Mexico develop protocols and procedures to assure that resources made available under this request support both Mexico’s military and civilian security services.

The request includes $208.3m to procure eight transport helicopters (Bell 412s, at $10m each, with a $24m logistics, spare parts, and training package); 87 handheld ion scanners for the Air Force/Army (SEDENA); two surveillance planes (CASA CN-235-300, at $50m per aircraft, outfitted similar to the U.S. Coast Guard’s medium range surveillance aircraft) for the Navy (SEMAR); equipment to outfit two citation aircraft for the Office of the Attorney General (PGR). Perhaps the most significant element in this package is to give the government of Mexico a night-time flight capability that could provide a viable endgame which our counterparts currently lack.

The request also includes $31.3m to help the National Migration Institute (INAMI) expand and modernize its immigration database and document verification system, digitalize immigration forms, and equip and train personnel in rescue and safety response techniques to be used along Mexico’s southern border. This information has the potential to provide a great deal of investigative lead information, would benefit in the identification of wanted subjects, and assist in tracking the movements of traffickers. Approximately $25.3m is requested to establish a secure communications system for Mexican national security agencies and procure inspection systems for key mail facilities.

$2m is requested to expand the Office of the Attorney General’s work on the Operation Against Smugglers (and Traffickers) Initiative on Safety and Security (OASISS) to identify and prosecute violent human smugglers along the U.S/Mexico border. The enhancement of these programs in Mexico will benefit DEA investigations.

The $31.5m requested to procure non-intrusive inspection equipment (scanners, x-ray vans) and canine detection training to support Customs’ interdiction efforts at points of entry should deter smuggling through established ports of entry and generate investigative leads that could be shared with Mexico’s investigative agencies. The $7.9m requested to expand interconnectivity for the Intelligence Service’s database, procure an operating system for a secure communications network, and provide data management and forensic analysis tools is essential if different entities within the government of Mexico are to collaborate and cooperate more effectively. Again, this enhanced capacity for Mexican law enforcement will also benefit DEA investigations.

Public Security and Law Enforcement ($81.7m)

Our own experience in the United States has taught us that effectively combating the drug problem requires cooperation at all levels of law enforcement from the local cop on the beat to specially trained and resourced investigative organizations that focus exclusively on transnational narcotics trafficking. While many of the Central American countries have a single unified National Police agency, Mexico has distinct federal, state and municipal police agencies. Mexico is not only attempting to consolidate multiple federal agencies into a single law enforcement agency, they are also attempting to design a system that, over time, will allow state and local police agencies to become part of the comprehensive solution to drugs and violence.

Presently, Mexico’s state and municipal police lack the jurisdiction or authority to investigate drug crime. The funding requested under this heading would help Mexican and Central American police agencies at all levels (federal, state and municipal) to maintain order and deal with the violence and crime generated by drug trafficking. This request also helps Mexico consolidate its federal police into a single entity that is geographically dispersed, yet interconnected through technology systems, and is more capable of addressing the insidious problems of drugs and violence.

The Central American request includes approximately $10m to deal with anti-gang efforts and related community outreach, another $2.3m for immigration related issues, and $2m for regional training by the International Law Enforcement Academy based in El Salvador. With respect to Mexico, the initiative requests $30m to procure non-intrusive inspection equipment (scanners, x-ray vans) for the Federal Police (SSP), and funding to establish new canine detection teams to be used for drug inspections. Approximately $6m is requested for security improvements (armored vehicles at $120,000 each, radios, ballistics vests/helmets, training, and associated equipment) to protect law enforcement personnel investigating criminal organizations. $5m is requested to help the Financial Intelligence Unit’s (FIU) anti-money laundering efforts by upgrading its computer infrastructure and data analysis tools, while $15.1m is requested to extend the reach of Mexico’s demand reduction activities by providing the Secretariat of Health with computer hardware and software to create a nationwide network, that will serve as the backbone of Mexico’s broader networking effort to link NGOs and other non-state actors in demand reduction and rehabilitation.

Institution Building and Rule of Law ($108.3m)

While DEA’s statutory responsibilities focus on identifying, investigating and arresting those who violate U.S. drug laws, we fully appreciate that we operate within a broader context that presumes the existence and integrity of a variety government institutions. These include honest and capable law enforcement organizations; competent and adequately financed prosecutors; a judiciary that dispenses justice; and a penal system capable of humanely confining those convicted of crimes. As difficult as it may be to identify and arrest drug violators, it is potentially far more difficult to build or reform institutions or create respect for the rule of law.

Despite the enormity of this task, we acknowledge that it is essential for the long-term success of our endeavors. We cannot extradite every drug criminal, nor can we long tolerate a lack of control that effectively creates a haven for criminals in our interconnected world. Experience has taught us that both drug traffickers and terrorists thrive in ungoverned or poorly governed areas. We must all recognize that the enormous profits and intense violence associated with drug trafficking has put the institutions of Mexico and Central America under considerable stress. Corruption, fueled by drug proceeds, undermines public confidence and results in a wide array of problems ranging from arrests not made to the escape of convicted criminals. Where bribery is unsuccessful, our criminal adversaries are prepared to do violence. In fact, violence against law enforcement and prosecutors has become so commonplace that there can be difficulty recruiting qualified candidates to do this important but dangerous work.

The initiative requests $60.7m to revamp information management and forensics systems for the Office of the Mexican Attorney General, and provide training in courts management, prison management, asset forfeiture, and police professionalization, as well as to provide support for anti-gang and anti-organized crime units, victim/witness protection, and extradition training. Approximately $5m is requested to support the Office of the Attorney General Forensics Institute, essentially providing enhanced forensic analysis of evidence collected by police and prosecutors. $19.9m is requested to help the Office of the Attorney General digitalize all aspects of prosecutors’ functions, provide a case management system, and rebuild its database structure. The plan requests $15m towards programs promoting anticorruption, transparency, and human rights. The cost of U.S. personnel, administration and budget services to support programs and equipment procurement processes directly tied to the foreign assistance package for Mexico is $37M.

Conclusion

The challenges presented by the drug trafficking organizations in the United States and Latin America are significant. In comparison to the seizures on the Southwest Border of the United States, which are frequently in the 50 kilogram range, drug seizures in the transit zone are often multi-ton in size, indicative of a strategy by traffickers to minimize losses. The DEA recognizes that interagency cooperation and coordination is fundamental and key to our success in combating drug trafficking organizations operating within the U.S. The DEA strongly believes we must take an offensive approach to prevent bulk drug shipments from moving further into the transportation chain where fragmentation occurs, in most instances on the Mexican side of the Southwest Border. Law enforcement in Mexico and Central America must have the resources that were once available in the Western Caribbean and Eastern Pacific if we are to be successful against these drug trafficking organizations.

DEA’s investigative efforts will continue to be directed against the major international trafficking organizations and their facilitators at every juncture in

their operations—from the cultivation and production of drugs in foreign countries, to their passage through the transit zone, to their eventual distribution on the streets of our

Nation’s communities. We will also direct our efforts against those affiliates who supply

precursor and essential chemicals and provide financial services to these organizations.

The longstanding bilateral law enforcement relationships in Latin America have proven

to be key to DEA’s success. Bringing to the criminal and civil justice system of the

United States, or any other competent jurisdiction, those organizations and principal

members of organizations involved in the growing, manufacture, or distribution of

controlled substances appearing in or destined for illicit trafficking in the United States,

will remain the core of our focus. Formalized agreements necessary for bilateral working

relationships and non-politicization of one of the worlds common endeavors—the

elimination of the illicit drug trade—will bring the United States and the nations of Latin

America closer to this objective.

Mr. Chairman, I appreciate the opportunity to appear before you today to discuss this important issue and I will be happy to answer any questions that you may have.