Just before sunset on April 10, 2006, a DC-9 jet landed at the international airport in the port city of Ciudad del Carmen, 500 miles east of Mexico City. As soldiers on the ground approached the plane, the crew tried to shoo them away, saying there was a dangerous oil leak. So the troops grew suspicious and searched the jet.

They found 128 black suitcases, packed with 5.7 tons of cocaine, valued at $100 million. The stash was supposed to have been delivered from Caracas to drug traffickers in Toluca, near Mexico City, Mexican prosecutors later found. Law enforcement officials also discovered something else.

The smugglers had bought the DC-9 with laundered funds they transferred through two of the biggest banks in the U.S.: Wachovia Corp. and Bank of America Corp., Bloomberg Markets magazine reports in its August 2010 issue.

This was no isolated incident. Wachovia, it turns out, had made a habit of helping move money for Mexican drug smugglers. Wells Fargo & Co., which bought Wachovia in 2008, has admitted in court that its unit failed to monitor and report suspected money laundering by narcotics traffickers — including the cash used to buy four planes that shipped a total of 22 tons of cocaine.

The admission came in an agreement that Charlotte, North Carolina-based Wachovia struck with federal prosecutors in March, and it sheds light on the largely undocumented role of U.S. banks in contributing to the violent drug trade that has convulsed Mexico for the past four years.

‘Blatant Disregard’

Wachovia admitted it didn’t do enough to spot illicit funds in handling $378.4 billion for Mexican-currency-exchange houses from 2004 to 2007. That’s the largest violation of the Bank Secrecy Act, an anti-money-laundering law, in U.S. history — a sum equal to one-third of Mexico’s current gross domestic product.

“Wachovia’s blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations,” says Jeffrey Sloman, the federal prosecutor who handled the case.

Since 2006, more than 22,000 people have been killed in drug-related battles that have raged mostly along the 2,000-mile (3,200-kilometer) border that Mexico shares with the U.S. In the Mexican city of Ciudad Juarez, just across the border from El Paso, Texas, 700 people had been murdered this year as of mid- June. Six Juarez police officers were slaughtered by automatic weapons fire in a midday ambush in April.

Rondolfo Torre, the leading candidate for governor in the Mexican border state of Tamaulipas, was gunned down yesterday, less than a week before elections in which violence related to drug trafficking was a central issue.

45,000 Troops

Mexican President Felipe Calderon vowed to crush the drug cartels when he took office in December 2006, and he’s since deployed 45,000 troops to fight the cartels. They’ve had little success.

Among the dead are police, soldiers, journalists and ordinary citizens. The U.S. has pledged Mexico $1.1 billion in the past two years to aid in the fight against narcotics cartels.

In May, President Barack Obama said he’d send 1,200 National Guard troops, adding to the 17,400 agents on the U.S. side of the border to help stem drug traffic and illegal immigration.

Behind the carnage in Mexico is an industry that supplies hundreds of tons of cocaine, heroin, marijuana and methamphetamines to Americans. The cartels have built a network of dealers in 231 U.S. cities from coast to coast, taking in about $39 billion in sales annually, according to the Justice Department.

‘You’re Missing the Point’

Twenty million people in the U.S. regularly use illegal drugs, spurring street crime and wrecking families. Narcotics cost the U.S. economy $215 billion a year — enough to cover health care for 30.9 million Americans — in overburdened courts, prisons and hospitals and lost productivity, the department says.

“It’s the banks laundering money for the cartels that finances the tragedy,” says Martin Woods, director of Wachovia’s anti-money-laundering unit in London from 2006 to 2009. Woods says he quit the bank in disgust after executives ignored his documentation that drug dealers were funneling money through Wachovia’s branch network.

“If you don’t see the correlation between the money laundering by banks and the 22,000 people killed in Mexico, you’re missing the point,” Woods says.

Cleansing Dirty Cash

Wachovia is just one of the U.S. and European banks that have been used for drug money laundering. For the past two decades, Latin American drug traffickers have gone to U.S. banks to cleanse their dirty cash, says Paul Campo, head of the U.S. Drug Enforcement Administration’s financial crimes unit.

Miami-based American Express Bank International paid fines in both 1994 and 2007 after admitting it had failed to spot and report drug dealers laundering money through its accounts. Drug traffickers used accounts at Bank of America in Oklahoma City to buy three planes that carried 10 tons of cocaine, according to Mexican court filings.

Federal agents caught people who work for Mexican cartels depositing illicit funds in Bank of America accounts in Atlanta, Chicago and Brownsville, Texas, from 2002 to 2009. Mexican drug dealers used shell companies to open accounts at London-based HSBC Holdings Plc, Europe’s biggest bank by assets, an investigation by the Mexican Finance Ministry found.

Following Rules

Those two banks weren’t accused of wrongdoing. Bank of America spokeswoman Shirley Norton and HSBC spokesman Roy Caple say laws bar them from discussing specific clients. They say their banks strictly follow the government rules.

“Bank of America takes its anti-money-laundering responsibilities very seriously,” Norton says.

A Mexican judge on Jan. 22 accused the owners of six centros cambiarios, or money changers, in Culiacan and Tijuana of laundering drug funds through their accounts at the Mexican units of Banco Santander SA, Citigroup Inc. and HSBC, according to court documents filed in the case.

The money changers are in jail while being tried. Citigroup, HSBC and Santander, which is the largest Spanish bank by assets, weren’t accused of any wrongdoing. The three banks say Mexican law bars them from commenting on the case, adding that they each carefully enforce anti-money-laundering programs.

HSBC has stopped accepting dollar deposits in Mexico, and Citigroup no longer allows noncustomers to change dollars there. Citigroup detected suspicious activity in the Tijuana accounts, reported it to regulators and closed the accounts, Citigroup spokesman Paulo Carreno says.

Criminal Empires

On June 15, the Mexican Finance Ministry announced it would set limits for banks on cash deposits in dollars.

Mexico’s drug cartels have become multinational criminal enterprises.

Some of the gangs have delved into other illegal activities such as gunrunning, kidnapping and smuggling people across the border, as well as into seemingly legitimate areas such as trucking, travel services and air cargo transport, according to the Justice Department’s National Drug Intelligence Center.

These criminal empires have no choice but to use the global banking system to finance their businesses, Mexican Senator Felipe Gonzalez says.

“With so much cash, the only way to move this money is through the banks,” says Gonzalez, who represents a central Mexican state and chairs the senate public safety committee.

Gonzalez, a member of Calderon’s National Action Party, carries a .38 revolver for personal protection.

“I know this won’t stop the narcos when they come through that door with machine guns,” he says, pointing to the entrance to his office. “But at least I’ll take one with me.”

Subprime Losses

No bank has been more closely connected with Mexican money laundering than Wachovia. Founded in 1879, Wachovia became the largest bank by assets in the southeastern U.S. by 1900. After the Great Depression, some people in North Carolina called the bank “Walk-Over-Ya” because it had foreclosed on farms in the region.

By 2008, Wachovia was the sixth-largest U.S. lender, and it faced $26 billion in losses from subprime mortgage loans. That cost Wachovia Chief Executive Officer Kennedy Thompson his job in June 2008.

Six months later, San Francisco-based Wells Fargo, which dates from 1852, bought Wachovia for $12.7 billion, creating the largest network of bank branches in the U.S. Thompson, who now works for private-equity firm Aquiline Capital Partners LLC in New York, declined to comment.

As Wachovia’s balance sheet was bleeding, its legal woes were mounting. In the three years leading up to Wachovia’s agreement with the Justice Department, grand juries served the bank with 6,700 subpoenas requesting information.

Not Quick Enough

The bank didn’t react quickly enough to the prosecutors’ requests and failed to hire enough investigators, the U.S. Treasury Department said in March. After a 22-month investigation, the Justice Department on March 12 charged Wachovia with violating the Bank Secrecy Act by failing to run an effective anti-money-laundering program.

Five days later, Wells Fargo promised in a Miami federal courtroom to revamp its detection systems. Wachovia’s new owner paid $160 million in fines and penalties, less than 2 percent of its $12.3 billion profit in 2009.

If Wells Fargo keeps its pledge, the U.S. government will, according to the agreement, drop all charges against the bank in March 2011.

Wells Fargo regrets that some of Wachovia’s former anti- money-laundering efforts fell short, spokeswoman Mary Eshet says. Wells Fargo has invested $42 million in the past three years to improve its anti-money-laundering program and has been working with regulators, she says.

‘Significantly Upgraded’

“We have substantially increased the caliber and number of staff in our international investigations group, and we also significantly upgraded the monitoring software,” Eshet says. The agreement bars the bank from contesting or contradicting the facts in its admission.

The bank declined to answer specific questions, including how much it made by handling $378.4 billion — including $4 billion of cash-from Mexican exchange companies.

The 1970 Bank Secrecy Act requires banks to report all cash transactions above $10,000 to regulators and to tell the government about other suspected money-laundering activity. Big banks employ hundreds of investigators and spend millions of dollars on software programs to scour accounts.

No big U.S. bank — Wells Fargo included — has ever been indicted for violating the Bank Secrecy Act or any other federal law. Instead, the Justice Department settles criminal charges by using deferred-prosecution agreements, in which a bank pays a fine and promises not to break the law again.

‘No Capacity to Regulate’

Large banks are protected from indictments by a variant of the too-big-to-fail theory.

Indicting a big bank could trigger a mad dash by investors to dump shares and cause panic in financial markets, says Jack Blum, a U.S. Senate investigator for 14 years and a consultant to international banks and brokerage firms on money laundering.

The theory is like a get-out-of-jail-free card for big banks, Blum says.

“There’s no capacity to regulate or punish them because they’re too big to be threatened with failure,” Blum says. “They seem to be willing to do anything that improves their bottom line, until they’re caught.”

Wachovia’s run-in with federal prosecutors hasn’t troubled investors. Wells Fargo’s stock traded at $30.86 on March 24, up 1 percent in the week after the March 17 agreement was announced.

Moving money is central to the drug trade — from the cash that people tape to their bodies as they cross the U.S.-Mexican border to the $100,000 wire transfers they send from Mexican exchange houses to big U.S. banks.

‘Doesn’t Stop Anyone’

In Tijuana, 15 miles south of San Diego, Gustavo Rojas has lived for a quarter of a century in a shack in the shadow of the 10-foot-high (3-meter-high) steel border fence that separates the U.S. and Mexico there. He points to holes burrowed under the barrier.

“They go across with drugs and come back with cash,” Rojas, 75, says. “This fence doesn’t stop anyone.”

Drug money moves back and forth across the border in an endless cycle. In the U.S., couriers take the cash from drug sales to Mexico — as much as $29 billion a year, according to U.S. Immigration and Customs Enforcement. That would be about 319 tons of $100 bills.

They hide it in cars and trucks to smuggle into Mexico. There, cartels pay people to deposit some of the cash into Mexican banks and branches of international banks. The narcos launder much of what’s left through money changers.

The Money Changers

Anyone who has been to Mexico is familiar with these street-corner money changers; Mexican regulators say there are at least 3,000 of them from Tijuana to Cancun, usually displaying large signs advertising the day’s dollar-peso exchange rate.

Mexican banks are regulated by the National Banking and Securities Commission, which has an anti-money-laundering unit; the money changers are policed by Mexico’s Tax Service Administration, which has no such unit.

By law, the money changers have to demand identification from anyone exchanging more than $500. They also have to report transactions higher than $5,000 to regulators.

The cartels get around these requirements by employing legions of individuals — including relatives, maids and gardeners — to convert small amounts of dollars into pesos or to make deposits in local banks. After that, cartels wire the money to a multinational bank.

The Smurfs

The people making the small money exchanges are known as Smurfs, after the cartoon characters.

“They can use an army of people like Smurfs and go through $1 million before lunchtime,” says Jerry Robinette, who oversees U.S. Immigration and Customs Enforcement operations along the border in east Texas.

The U.S. Treasury has been warning banks about big Mexican- currency-exchange firms laundering drug money since 1996. By 2004, many U.S. banks had closed their accounts with these companies, which are known as casas de cambio.

Wachovia ignored warnings by regulators and police, according to the deferred-prosecution agreement.

“As early as 2004, Wachovia understood the risk,” the bank admitted in court. “Despite these warnings, Wachovia remained in the business.”

One customer that Wachovia took on in 2004 was Casa de Cambio Puebla SA, a Puebla, Mexico-based currency-exchange company. Pedro Alatorre, who ran a Puebla branch in Mexico City, had created front companies for cartels, according to a pending Mexican criminal case against him.

Federal Indictment

A federal grand jury in Miami indicted Puebla, Alatorre and three other executives in February 2008 for drug trafficking and money laundering. In May 2008, the Justice Department sought extradition of the suspects, saying they used shell firms to launder $720 million through U.S. banks.

Alatorre has been in a Mexican jail for 2 1/2 years. He denies any wrongdoing, his lawyer Mauricio Moreno says. Alatorre has made no court-filed responses in the U.S.

During the period in which Wachovia admitted to moving money out of Mexico for Puebla, couriers carrying clear plastic bags stuffed with cash went to the branch Alatorre ran at the Mexico City airport, according to surveillance reports by Mexican police.

Alatorre opened accounts at HSBC on behalf of front companies, Mexican investigators found.

Puebla executives used the stolen identities of 74 people to launder money through Wachovia accounts, Mexican prosecutors say in court-filed reports.

‘Never Reported’

“Wachovia handled all the transfers, and they never reported any as suspicious,” says Jose Luis Marmolejo, a former head of the Mexican attorney general’s financial crimes unit who is now in private practice.

In November 2005 and January 2006, Wachovia transferred a total of $300,000 from Puebla to a Bank of America account in Oklahoma City, according to information in the Alatorre cases in the U.S. and Mexico.

Drug smugglers used the funds to buy the DC-9 through Oklahoma City aircraft broker U.S. Aircraft Titles Inc., according to financial records cited in the Mexican criminal case. U.S. Aircraft Titles President Sue White declined to comment.

On April 5, 2006, a pilot flew the plane from St. Petersburg, Florida, to Caracas to pick up the cocaine, according to the DEA. Five days later, troops seized the plane in Ciudad del Carmen and burned the drugs at a nearby army base.

‘Wachovia Knew’

“I am sure Wachovia knew what was going on,” says Marmolejo, who oversaw the criminal investigation into Wachovia’s customers. “It went on too long and they made too much money not to have known.”

At Wachovia’s anti-money-laundering unit in London, Woods and his colleague Jim DeFazio, in Charlotte, say they suspected that drug dealers were using the bank to move funds.

Woods, a former Scotland Yard investigator, spotted illegible signatures and other suspicious markings on traveler’s checks from Mexican exchange companies, he said in a September 2008 letter to the U.K. Financial Services Authority. He sent copies of the letter to the DEA and Treasury Department in the U.S.

Woods, 45, says his bosses instructed him to keep quiet and tried to have him fired, according to his letter to the FSA. In one meeting, a bank official insisted Woods shouldn’t have filed suspicious activity reports to the government, as both U.S. and U.K. laws require.

‘I Was Shocked’

“I was shocked by the content and outcome of the meeting and genuinely traumatized,” Woods wrote.

In the U.S., DeFazio, who had been a Federal Bureau of Investigation agent for 21 years, says he told bank executives in 2005 that the DEA was probing the transfers through Wachovia to buy the planes.

Bank executives spurned recommendations to close suspicious accounts, DeFazio, 63, says.

“I think they looked at the money and said, ‘The hell with it. We’re going to bring it in, and look at all the money we’ll make,’” DeFazio says.

DeFazio retired in 2008.

“I didn’t want anything from them,” he says. “I just wanted to get out.”

Woods, who resigned from Wachovia in May 2009, now advises banks on how to combat money laundering. He declined to discuss details of Wachovia’s actions.

U.S. Comptroller of the Currency John Dugan told Woods in a March 19 letter his efforts had helped the U.S. build its case against Wachovia.

‘Great Courage’

“You demonstrated great courage and integrity by speaking up when you saw problems,” Dugan wrote.

It was the Puebla investigation that led U.S. authorities to the broader probe of Wachovia. On May 16, 2007, DEA agents conducted a raid of Wachovia’s international banking offices in Miami. They had a court order to seize Puebla’s accounts.

U.S. prosecutors and investigators then scrutinized the bank’s dealings with Mexican-currency-exchange firms. That led to the March deferred-prosecution agreement.

With Puebla’s Wachovia accounts seized, Alatorre and his partners shifted their laundering scheme to HSBC, according to financial documents cited in the Mexican criminal case against Alatorre.

In the three weeks after the DEA raided Wachovia, two of Alatorre’s front companies, Grupo ETPB SA and Grupo Rahero SC, made 12 cash deposits totaling $1 million at an HSBC Mexican branch, Mexican investigators found.

Another Drug Plane

The funds financed a Beechcraft King Air 200 plane that police seized on Dec. 29, 2007, in Cuernavaca, 50 miles south of Mexico City, according to information in the case against Alatorre.

For years, federal authorities watched as the wife and daughter of Oscar Oropeza, a drug smuggler working for the Matamoros-based Gulf Cartel, deposited stacks of cash at a Bank of America branch on Boca Chica Boulevard in Brownsville, Texas, less than 3 miles from the border.

Investigator Robinette sits in his pickup truck across the street from that branch. It’s a one-story, tan stucco building next to a Kentucky Fried Chicken outlet. Robinette discusses the Oropeza case with Tom Salazar, an agent who investigated the family.

“Everybody in there knew who they were — the tellers, everyone,” Salazar says. “The bank never came to us, though.”

New Meaning

The Oropeza case gives a new, literal meaning to the term money laundering. Oropeza’s wife, Tina Marie, and daughter Paulina Marie deposited stashes of $20 bills several times a day into Bank of America accounts, Salazar says. Bank employees got to know the Oropezas by the smell of their money.

“I asked the tellers what they were talking about, and they said the money had this sweet smell like Bounce, those sheets you throw into the dryer,” Salazar says. “They told me that when they opened the vault, the smell of Bounce just poured out.”

Oropeza, 48, was arrested 820 miles from Brownsville. On May 31, 2007, police in Saraland, Alabama, stopped him on a traffic violation. Checking his record, they learned of the investigation in Texas.

They searched the van and discovered 84 kilograms (185 pounds) of cocaine hidden under a false floor. That allowed federal agents to freeze Oropeza’s bank accounts and search his marble-floored home in Brownsville, Robinette says. Inside, investigators found a supply of Bounce alongside the clothes dryer.

Guilty Pleas

All three Oropezas pleaded guilty in U.S. District Court in Brownsville to drug and money-laundering charges in March and April 2008. Oscar Oropeza was sentenced to 15 years in prison; his wife was ordered to serve 10 months and his daughter got 6 months.

Bank of America’s Norton says, “We not only fulfilled our regulatory obligation, but we proactively worked with law enforcement on these matters.”

Prosecutors have tried to halt money laundering at American Express Bank International twice. In 1994, the bank, then a subsidiary of New York-based American Express Co., pledged not to allow money laundering again after two employees were convicted in a criminal case involving drug trafficker Juan Garcia Abrego.

In 1994, the bank paid $14 million to settle. Five years later, drug money again flowed through American Express Bank. Between 1999 and 2004, the bank failed to stop clients from laundering $55 million of narcotics funds, the bank admitted in a deferred-prosecution agreement in August 2007.

Western Union

It paid $65 million to the U.S. and promised not to break the law again. The government dismissed the criminal charge a year later. American Express sold the bank to London-based Standard Chartered PLC in February 2008 for $823 million.

Banks aren’t the only financial institutions that have turned a blind eye to drug cartels in moving illicit funds. Western Union Co., the world’s largest money transfer firm, agreed to pay $94 million in February 2010 to settle civil and criminal investigations by the Arizona attorney general’s office.

Undercover state police posing as drug dealers bribed Western Union employees to illegally transfer money, says Cameron Holmes, an assistant attorney general.

“Their allegiance was to the smugglers,” Holmes says. “What they thought about during work was ‘How may I please my highest- spending customers the most?’”

Smudged Fingerprints

Workers in more than 20 Western Union offices allowed the customers to use multiple names, pass fictitious identifications and smudge their fingerprints on documents, investigators say in court records.

“In all the time we did undercover operations, we never once had a bribe turned down,” says Holmes, citing court affidavits.

Western Union has made significant improvements, it complies with anti-money-laundering laws and works closely with regulators and police, spokesman Tom Fitzgerald says.

For four years, Mexican authorities have been fighting a losing battle against the cartels. The police are often two steps behind the criminals. Near the southeastern corner of Texas, in Matamoros, more than 50 combat troops surround a police station.

Officers take two suspected drug traffickers inside for questioning. Nearby, two young men wearing white T-shirts and baggy pants watch and whisper into radios. These are los halcones (the falcons), whose job is to let the cartel bosses know what the police are doing.

‘Only Way’

While the police are outmaneuvered and outgunned, ordinary Mexicans live in fear. Rojas, the man who lives in the Tijuana slum near the border fence, recalls cowering in his home as smugglers shot it out with the police.

“The only way to survive is to stay out of the way and hope the violence, the bullets, don’t come for you,” Rojas says.

To make their criminal enterprises work, the drug cartels of Mexico need to move billions of dollars across borders. That’s how they finance the purchase of drugs, planes, weapons and safe houses, Senator Gonzalez says.

“They are multinational businesses, after all,” says Gonzalez, as he slowly loads his revolver at his desk in his Mexico City office. “And they cannot work without a bank.”

To contact the reporter on this story: Michael Smith in Santiago, Chile, at mssmith@bloomberg.net.

From a piece by Laura Carlsen, which can be read here.

The growing criminalization and dehumanization of Mexican undocumented immigrants has fomented a legal limbo where human rights, including the right to life itself, fall prey to ill-defined national security concerns. It has fostered a political climate where security forces and vigilantes argue openly that fatal attacks on citizens from other countries in a non-war context are justified simply because they lack a visa. Such governance without respect for basic human rights is nothing but a dangerous lie.

Audit: El Paso Intelligence Center a bust

The El Paso Intelligence Center, launched in 1974 to identify drug traffickers south of the border, is all but a complete bust, the Justice Department’s Inspector General reported Tuesday.

The 86-page report was a virtual laundry list of seemingly intractable problems at the border intelligence post, opened by the Drug Enforcement Administration with great fanfare 36 years ago.

“EPIC could not produce a complete record of drug seizures nationwide because of incomplete reporting into the National Seizure System, which is managed by EPIC,” Glenn A. Fine, chief of the Office of the Inspector General, reported.

“EPIC had not sustained the staffing for some key interdiction programs, such as its Fraudulent Document unit, its Air Watch unit, or its Maritime Intelligence unit….” Fine added.

“As a result, EPIC’s service to users in these program areas had been disrupted or diminished for periods of time.”

How long, or how seriously the programs had been “disrupted or diminished,” he did not say.

Then there were EPIC’s “coordination problems,” the OIG said, demonstrating that the unit is not immune to the failure-to-share bugaboo that has long afflicted U.S. intelligence, as documented in repeated reports and studies over the years.

“EPIC member agencies [are] not sharing information or contributing resources to sustain programs at EPIC,” the OIG said.

“Further, we found that EPIC’s coordination with federal and state intelligence organizations across the country is inconsistent,” Fine added.

Even worse: “EPIC did not maintain an up-to-date list of key intelligence and fusion centers and their points of contact, and EPIC did not know if it had users in each center….”

Fine’s other findings raise the question of how EPIC’s intelligence personnel spend their day.

“EPIC does not analyze some information that it uniquely collects, and as a result, EPIC may not be adequately identifying trends and patterns in trafficking activity that could be used to increase the effectiveness and safety of drug interdiction activities,” the OIG said.

“For example, at the time of our review, EPIC was not identifying trends or patterns in the use of documents sent to EPIC that were suspected of being used to commit fraud.”

In its most devastating statistic, the auditors found that “less than 1 percent of federal, state, and local law enforcement officers” use EPIC’s intelligence.

Tuesday’s report echoed problems found previously in drug interdiction programs, especially since the creation of the Department of Homeland Security in 2004, which scrambled responsibilities among a handful of new agencies.

“Partnerships have changed since 9/11 and outdated interagency agreements have led to conflicts with ICE [Immigration and Customs Enforcement] and operational inefficiencies at CBP [Customs and Border Patrol],” the Government Accountability Office noted in 2007.

On Tuesday, the Justice Department recommended almost a dozen specific fixes for the problem at EPIC, which had a major cameo in Traffic, the 2000 movie about a skeptical White House “drug czar,” played by Michael Douglas.

The DEA generally concurred in all of the criticisms, adding explanations (or rationalizations, the OIG seemed to think) for its shortcomings, and steps it had already taken to correct them.

“Although DEA has been responsible for the management of EPIC since it inception, EPIC is a true multi-agency center that remains heavily dependent on a variety of agencies for data, staffing and participation,” an OIG memorandum on DEA’s responses said. Some 21 agencies provide staff to EPIC.

Meanwhile, the flow of illegal drugs from Mexico continues at flood-like levels.

A nationwide, multi-agency counter narcotics sweep last week netted 429 arrests, plus “$5.8 million in cash, 2,951 pounds of marijuana, 247 pounds of cocaine, 17 pounds of methamphetamine, 141 weapons and 85 vehicles,” according to the New York Times.

Attorney General Eric H. Holder, Jr. called the raid “our most extensive, and most successful, law enforcement effort to date targeting these deadly cartels.”

El Paso, Texas (CNN) — On Monday, a U.S. Border Patrol officer shot and killed a 14-year-old boy, Sergio Adrian Hernandez Guereca, under one of the international bridges that connects or, these days, divides, El Paso, Texas, from Ciudad Juárez, Chihuahua.
The boy lay dead on the Mexican side and the Border Patrol agent was removed from the scene by U.S. officials. American officials say it was a case of self-defense. Mexican authorities condemned the killing as the use of excessive force.

The facts are still coming out, but based on the English and the Spanish news reports, it is easy to see that the two sides do not agree on the particulars, much less on their interpretation.

To people across the two nations who see reports of the death on TV or in the papers, it’s a dramatic news story — a boy with a bullet in his head and an agent under investigation. But here at the border, the scene, the actors, the act — as if carefully choreographed, chosen and scripted — read like an up-close metaphor for everything that is broken with our border and with immigration.

At a basic level, the incident at the Black Bridge seems to reveal two nations moving ever further from acknowledging our inevitable common destiny. As the two countries face the economic call-and-response of illegal immigration and the drug trade, we seem to cast each other increasingly as enemies. In this context it becomes justified to deal with each other with violence: throwing rocks and shooting bullets.

One could say that that boy represents the aspirations of many Mexican people because — whether, as some reports have suggested, he intended to cross the border or as others have said, was being used as a decoy for others to make a run — the spot where he died is known as a place where people try to cross illegally in search of work and a better life.

At the same time, a dehumanization plays out at the border, where some lives are worth more than others — a calculus that usually runs along wealth lines, as those with money can afford visas to cross over the bridge and the poor have to stay out or risk their lives by crossing under it.

Additionally, the episode highlights the blunt instrument — barriers and increased militarization — that the United States has chosen to deal with the countries’ 2,000-mile border.

Thousands of Border Patrol agents have been added in the past few years alone, and last month President Obama promised to send an additional 1,200 National Guard troops. An ineffectual fence stretches in fits and starts along about 30 percent of the border; it has been breached thousands of times, according to the Government Accountability Office, and costs thousands more to patch.

More fences, more walls, more armored vehicles and the National Guard, more helicopters and drones, more sensors and infrared goggles, more cameras and guns, and thousands of increasingly armed agents are all part of the border’s choreography. From October 1 through May 31, Custom and Border Protection agents have used their firearms 31 times, a spokesman told CNN. In these circumstances, it is only a matter of time before more deaths occur.

In this incident lies the inability of the Mexican authorities to protect their people and the apparently questionable practices of our own Border Patrol, which, for one thing, sends bike-patrol officers to a well-known trouble spot and for another seems unclear about whether they can or cannot shoot across the borderline.

Neither side seems to believe that we deserve much more than these poorly pieced-together strategies, which reflect failures of both the Obama and the Calderón administrations. Mr. Calderón has been unable to face squarely the inequalities of his people: More than one in three Mexicans would leave the country and move in search of a better life, according to data collected for a Pew Global Attitudes Project report.

And the event speaks to the political inability of President Obama to coax Congress toward immigration reform — to include an orderly flow of low-skilled workers, easing the pressure on the border itself and thereby acknowledging the continued integration of the two countries’ labor markets.

Now a Border Patrol officer will have to live with the idea of having cut short the life of a young boy whose death, regardless of what he was doing at the bridge, means pain and sorrow for a family likely under the stress of 30 months of outrageous drug-related violence in Ciudad Juárez.

It is mindboggling to think that $50 billion a year in trade makes its way back and forth over the bridges that divide El Paso and Juárez, but bullets and rocks are now traded right under them.

So, we have to ask: Is that what we want the future of our border to be? An incident such as this should not spur us to finger pointing but to acknowledging that we have a problem; that we desperately need to sit down to order and shape our interactions and take joint control of our future.

If we forget or justify this incident, we will be condemning ourselves to many more like it.

Editor’s note: Tony Payan is an associate professor of political science at the University of Texas at El Paso. He teaches border studies, Mexican politics and U.S.-Mexico relations on the U.S.-Mexico border. He is the author of “Cops, Soldiers and Diplomats: Explaining Agency Behavior in the War on Drugs” and The Three U.S.-Mexico Border Wars: Drugs, Immigration and Homeland Security. His current research focuses on the violence in Ciudad Juárez. The opinions expressed in this commentary are solely those of Tony Payan.

Then read this:

The Mask of Red Death, by Rich Wright

Well-known borderland guitarist Aquiles Valdez dies

Estimadas Colegas,
We were very frustrated with Edgardo Buscaglia’s own figures of cartel arrests so we decided to create our own database. At the beginning of our investigation, I asked Edgardo the source of his cartel arrest statistics–he claims 941 out of 53,174 organized crime arrests in the past six years were people associated with the Sinaloans. He told me these figures were given to him by a source within the PGR and they include state arrests. We asked if we could speak to his source, if he had any documentary proof, or any way we could independently verify his numbers. He said there wasn’t. Basically, trust me.
That’s when we decided to analyze PGR news releases. As far as we can tell, that’s the only database in the country that has comprehensive arrests, prosecutions and sentencing of named cartel members for organized crime offenses.
Gobernacion said in February, and again Tuesday in response to our reports, that 72,000 “delincuentes” were arrested for drug offenses between Dec 1, 2006, to Feb. 4, 2010. We asked some trusted sources in Mexico City about this and they think the government’s 72,000 figure is phantasmagorical. If the number is accurate, they’re counting every dealer they arrested and possibly users, many of whom do not claim allegiance with any cartel.
We believe our database accurately reflects several observations:

* The Mexican government may be inflating the number of Sinalaons it arrests to counter criticism that it’s not going after them.
* It may be undercounting the number of Zetas arrested–which accounts for 44% of the total–to make the cartel war look more balanced.
* The number of arrests in Juarez–only 104 in two years–is striking given that there are so many federal forces there.

I invite your comments and questions. The dialogue on Molly’s group is always lively.

Best regards,
John Burnett

—–Original Message—–
From: frontera-list@googlegroups.com [mailto:frontera-list@googlegroups.com] On Behalf Of molly
Sent: Thursday, May 20, 2010 10:40 AM
To: Frontera LIst
Subject: [frontera-list] Sinaloa Cartel Seems Favored In Mexico’s Drug War–background

For questions on this, contact Jim Creechan directly. I will upload
the pdf file to the front page of the Frontera-List. For more
background, see the Narco-Mexico Blog: http://narcocartels.blogspot.com/

from James Creechan
date Thu, May 20, 2010 at 8:30 AM
subject Re: Is the Sinaloa Cartel Protected?

There have been a number of email exchanges about the latest NPR
report that the Sinaloa cartel has been “insulated” and/or protected.

I created a pdf file that has tracks references to this “protection
hypothesis”. This file (49 pages…large) has sequenced the news
references to this idea that Sinaloa has been protected.

Here’s a brief summary of the events and the growth of the story (as
pulled from my records):

1. The first reference to actual statistics (low arrests for
Sinaloa) appeared in the Economist in the second edition of the new
year (January 9, 2010). Edgardo Buscaglia is cited as the source of
information about low arrest rates.
2. On January 14, La Jornada publishes a report by Alfredo Mendez
that cites Buscaglia and addresses the hypothesis that there is a
negotiation in the background.
3. The AP picks up part of the story and publishes a report by Mark
Stevenson in late January (January 24)
4. In Sinaloa, Manuel Clouthier (son of El Maquio, the well
respected PAN candidate for President in the 1980′s) made a public
declaration that the Sinaloa cartel has been untouched in the drug-
wars. This announcement and proclamation will become the basis for
most of the reports about the “untouchability of the Sinaloa cartel”.
Clouthier’s declarations are widely reported and repeated.
1. The story was first published in Proceso 1637 (February
2010)
2. Reports from Noroeste.com and from Rio.Doce.com.mx are
also included here to show the impact of Clouthier in forwarding this
“Sinaloa is protected argument”
5. Esquire (Europe) publishes another long analysis based on
Buscaglia’s argument and makes reference to the statistics in March.
This Esquire article also contains many important insights by
Buscaglia about the nature of Organized Crime in Mexico- very few of
which have filtered into the mainstream press or into the policy and
academic circles examining crime.
6. The NPR story and it’s statistics are included here. Although
the numbers differ (significantly), the basic argument that Sinaloa is
relatively protected seems to be validated by the low numbers of
arrests – especially considering the estimates that the Sinaloa cartel
controls between 45-48% of all the drug trade in Mexico (according to
other statistics which are obviously rough estimates and subject to
interpretation.

Although there are many reasons to question the statistics presented
by NPR, and probably to question those originating with Buscaglia -
all of the other evidence and information does beg an answer to the
questions raised by Manuel Clouthier Carrillo – “How does the Sinaloa
(New Federation) avoid the level of scrutiny and intervention that
have hit the other cartels?”

Jim Creechan
Toronto

CONAN: And in your stories, you’ve described a battle taking place between two factions fighting for control over the border city of Ciudad Juarez, La Linea and the Sinaloa cartel.

BURNETT: That’s right. Let me also just add something to your intro to our conversation here. What we’ve been reporting this week is that elements of the Mexican army appear to be compromised in this fight against the cartels. We’re really not saying that the army as a monolithic institution is completely committed to one side.

CONAN: Well, that’s what I was going to say. Is it fair to say that in fact one of these cartels has bought more of the Mexican army than the other one?

BURNETT: That’s exactly right, yeah. And where we did found most of our evidence and certainly spent most of our time, myself and producer Marisa Penaloza, was in Ciudad Juarez, which has been called Murder City. It’s the -has the highest homicide rate in Mexico. It’s ground zero of the cartel war.

And we went into federal court to look at testimony in the U.S. We interviewed former law enforcement officials in the U.S., in Mexico, talked to dozens of folks on the ground there, and came away with a very strong belief that elements of the Mexican army are colluding with the Sinaloa cartel, which is locked in a battle for the territory of Juarez. That’s really a very valuable smuggling corridor into the U.S., as we know, and that the army has been used by the Sinaloans, which is Mexico’s largest, richest and oldest drug cartel. They’ve been using the army to help them defeat the Juarez cartel, which is also known as La Linea, sort of the local mafia that’s been there for decades.

For the full interview, click here

Legalizing drugs — what Obama and Calderon won’t discuss

By Edward Schumacher-Matos

President Obama calls Mexican President Felipe Calderon Mexico’s Elliott Ness and is receiving him today in an official state visit. Calderon is surely a brave man, and he is right to fight to curb the power of the drug cartels inside Mexico. His predecessor as head of his National Action Party, former presidential candidate Diego Fernandez de Cevallo, has gone missing; the suspicion is that a drug cartel has kidnapped him. The cartels have infiltrated much of the police and government and run many border towns through fear.

But Elliott Ness never stopped illegal liquor. The lifting of Prohibition did. Similarly, the only solution to the drug trafficking and violence on both sides of the border is to legalize drugs.

That, however, won’t be on the agenda in the talk between the two presidents. Rather, the talk will be of improving police intelligence collaboration, of speeding up delivery of promised military aid under Plan Merida, of cutting off the flow of guns and money back into Mexico, of Mexican efforts to clean up corruption and improve its enforcement capabilities. All that is necessary for Mexico’s normal development and immediate crisis, but none of it will put much of a dent in the flow of drugs.

Border towns such as El Paso, Texas, and Nogales, Arizona, are rated as some of the safest places in the country. Most border mayors from Texas to California oppose militarizing the border. The El Paso city council voted for a resolution condemning Arizona’s new anti-immigrant law. Earlier, sensibly, it voted for a resolution in favor of a national legalization of drugs.

Maybe we should move the capital to El Paso.

McALLEN, Texas — A Texas city councilman waging a lonely fight against U.S. drug policy sent an excited e-mail to his constituents Friday: “We’re on the brink of significant change.”

Across the nation, people who long ago declared the war on drugs a failure were encouraged by an Associated Press review that shows $1 trillion spent over 40 years has done little to stop the flow of illegal drugs or related violence, and by the U.S. drug czar’s admission to the AP that the war has not been successful.

“One of the most damning and comprehensive articles on the failure of the drug war was published throughout the world yesterday,” said El Paso City Councilman Beto O’Rourke, who has had a front-row seat to the failure across the Rio Grande from Ciudad Juarez, Mexico’s most violent, drug-plagued city.

“The AP article … uses clear metrics (expressed in dollars spent, lives lost, availability and use of drugs, etc.) to describe what a catastrophe our War on Drugs has been so far.”

The AP report played across Texas newspaper front pages on Friday, ran high on Internet news sites and ignited the blogosphere, where the left-leaning, independent news service AlterNet declared: “The Associated Press takes the entire U.S. drug war strategy and rakes it over the coals. It’s about damn time!”

Read more here

AN IDEA WHOSE TIME HAS COME

There were a number of developments this week that, when taken together, make me think that we’re finally going to make some progress on the most fundamental causes of the violence in Juarez: drug demand and drug prohibition.

First, a number of El Pasoans have come together around a statement that offers several clear-cut proposals to help stem the violence, including: explicitly linking drug use in the U.S. to drug terror in
Juarez (you buy drugs here, you’re helping to kill someone in Juarez); ending the disastrous prohibition of marijuana (which contributes nearly $8-9 billion into the coffers of the cartels annually); and focusing U.S. foreign aid on critical social, educational and economic infrastructure. The statement is timed to coincide with President Calderon’s visit to Washington D.C. and the state dinner that will be hosted in his honor at the White House. There will be a press conference Monday at 1pm at Lion’s Placita near the Paso del Norte Bridge. I’ve posted the press release further down in this newsletter.

The full statement is also posted on the Drug War 40 website (http://drugwar40.wordpress.com/) and you can sign a petition in support of the statement by clicking here.

Second, one of the most damning and comprehensive articles on the failure of the drug war was published throughout the world yesterday. The AP article, titled “US drug war has met none of its goals”, uses clear metrics (expressed in dollars spent, lives lost, availability and use of drugs, etc.) to describe what a catastrophe our War on Drugs has been so far. The opening paragraph:

After 40 years, the United States’ war on drugs has cost $1 trillion and hundreds of thousands of lives, and for what? Drug use is rampant and violence even more brutal and widespread.

* Read the full article by clicking here.

Third, the White House has announced a new drug war strategy. It is deeply flawed; it does not get to the fundamental problems with the war on drugs; but it is a small, incremental step towards a better policy. It talks about demand reduction (reducing teen use by 15%), it increases funding for rehabilitation and recovery, but its primary focus is still interdiction and imprisonment.

But, taken with the stunning, widely circulated AP story, the building national consensus that drug consumption and prohibition in the U.S. are causing terrible damage in our country and in Mexico, and the leadership we are seeing throughout our community in demanding a solution to the violence in Juarez, I think we’re on the brink of significant change. The administration’s attempt to save 40 years of face and position itself to ride the wave that just might be coming in tells me that we’re close to proving Victor Hugo right.