He was known as "the man without a face" for a good part of his long tenure as the head of the former East Germany's highly effective foreign espionage division, the HVA Stasi. Western intelligence agencies had only an old, murky photograph of the youthful Markus Wolf. Since the fall of the Berlin Wall the spymaster's face has become more familiar, at least in Europe, as he has battled, so far successfully, post-Cold War prosecutions in Germany. And he's likely to become even better-known when his autobiography Markus Wolf - Spy Chief in a Secret War is published later this year. Extracts from the book running in the German magazine Stern already are provoking much media interest on both sides of the Atlantic. And there has been widespread international news coverage of the spymaster's disclosure that he declined on the collapse of the Communist regime in Berlin a CIA offer of a small fortune and a house in California for the identity of Soviet bloc moles operating in the West. What has not been prompted by Wolf's autobiography, however, is serious press consideration of what has happened to all the Western moles the HVA managed to recruit during the Cold War - and they recruited hundreds. Wolf wasn't the only East German spy chief offered cash in exchange for the names of moles. On the fall of the Wall, intelligence officers from Britain, West Germany and Israel as well as the United States were falling over themselves to contact high-ranking Stasi officers. Britain's MI5, for example, was on a quest to unmask three Britons - code-named Armin, Diana and Sender - who spied for the Stasi in the late 1980s. The Western mole hunts were not launched simply from a desire to get the historical record straight, according to British sources. The fear was that some East German spy networks were being taken over by new masters, in particular Moscow and the Russian intelligence agencies, who received the bulk of the East German foreign espionage files and who persuaded East German spooks to encourage many of their major "assets" to transfer their loyalties to the Russians. How successful have the Western mole-hunts been? From the lack of prosecutions, one would have to deduce not very. The Stasi recruited as spies dozens of U.S. service personnel, businessmen and students in West Germany during the 1980s, according to Stasi documents, copies of which have been secured by news alert!. The East German intelligence files indicate that Leipzig-based Stasi Department 15 alone controlled during the late eighties nine American moles - one was a former colonel in the U.S. Army and another, allotted the code name "Winkler," was an American serviceman attached to the U.S. Air Force's headquarters in West Berlin. Judging by a one-paragraph mention of him in a list in one of the files, Winkler worked closely with a mole code-named "Petri," who also would appear to have been a U.S. serviceman. Both were classified as "werber" - top spies and recruiters. The other American moles listed were "Flamme," a professor living somewhere in West Germany; "Bauer," a student who had career prospects in the State Department; "Roter," an American living in Frankfurt who had connections with the U.S. military; "Venus," a civil engineer in the U.S. Army; "Colonel," a former U.S. Army colonel who lived in Heidelberg; "Tera," an American citizen living in West Berlin; and "Johann," an employee of an American multinational. Sources in Bonn's internal security agency, the BFV, say it is possible that some of these U.S. moles still may be passing secrets back to Moscow. CUSTOMS CONGEALS TO PLUG BORDER LEAKS The U.S. Customs Service is intent still on battling persistent allegations of narco-related corruption on the Southwest border rather than investigating the graft claims with an eye to getting to the bottom of them. Internal Affairs, or IA, investigators in California are concentrating their efforts on identifying border inspectors who have helped Insight with its investigative series, "Border Wars." And the U.S. attorney in San Diego, Alan Bersin, appears ready to help. His office has let it be known that any leakers identified by IA will be prosecuted vigorously, say border sources. The IA activity, of course, has an intimidatory menace to it. Customs bosses would appear to be hoping the leak inquiries will deter inspectors and agents from leaking in the future. To make it more difficult for Insight sources to secure Customs database-intelligence information, dozens of computer files, many pertaining to trucking firms owned by the alleged narcotrafficking Zaragoza Fuentes family, are being blocked from inspectors. "They are still in the computer system but we can't access them," says one source. IA investigators are trying to "prove" also that a controversial June 1996 memo purportedly signed by Customs' San Diego District Commissioner Rudy M. Camacho is a forgery. The memo, which was leaked to Insight and CBS' 60 Minutes show, "encourages" inspectors to process "as quickly as possible" trucks belonging to a firm owned by Tomas Zaragoza Fuentes. Customs bosses have told Democratic Sen. Dianne Feinstein of California that the memo is a fabrication. To counter that, four Customs inspectors have sent a signed affidavit to Feinstein saying it is genuine.

CUSTOMS AND BORDER BIGOTRY

At the start last fall of its "battle for the border" series, Insight reported specific allegations of misconduct and mismanagement against some senior U.S. Customs Service personnel in California, including San Ysidro port director Jerry Martin and his deputy, Art Gilbert. Customs Commissioner George Weise was outraged by the report and defended the officials. Last month, however, Gilbert was removed from his post and advised to hire an attorney pending his dismissal from the service. Customs internal-affairs, or IA, investigators proposed his termination after two disciplinary probes found he'd broken several of the service's regulations. Martin also has left San Ysidro. He has been relocated to a desk job in the California district office, and Customs sources in San Diego say he's heading for early retirement. Bobbie Cassidy, Customs' regional spokeswoman, declined to discuss Gilbert with news alert! "We don't comment on personnel matters," she remarks. But several sources at San Ysidro provided chapter and verse on the findings of the two "Red Book" investigations into Gilbert. One of the IA investigations involved four breaches of conduct. Gilbert was found to have used his government vehicle for private trips including unauthorized travel to Mexico and to have abused the overtime system to enrich himself. He also was discovered to have made racist and sexist remarks. The second - and technically more serious - probe confirmed an allegation Insight reported: Gilbert had permitted a Mexican Customs official to return to Mexico after he had been stopped on the border while driving a stolen Ford Explorer. Cassidy insists Martin's transfer is merely a lateral move and that nothing untoward has been found. "There's a lot of movement here," she says. "A lot of people are being switched around." But Customs sources in San Diego and Washington say Weise has ordered a "clean-up" in California "for the good of the service." There is, though, considerable frustration among inspectors at San Ysidro, who argue punches are being pulled and that several more serious corruption allegations against senior personnel are being buried. Neither "Red Book" investigation into Gilbert examined an alleged and disturbing relationship between Gilbert and convicted drug trafficker Jose Gomez Chaidez who, during one three-week period, received 207 phone calls from Gilbert's home phone. Gilbert, when challenged by FBI agents during another probe, insisted he knew nothing about the calls and that a member of his family must have made them, he said. Likewise, Gilbert's almost non-existent credit history remained unexplored by the "Red Book" investigations. Further, inspectors argue that no effort has been made to get to the bottom of the claim by Customs dog-handler Jeff Weitzman that Gilbert attempted to prevent him in October 1990 from detaining and searching an 18-wheeler tanker owned by HidroGas de Juarez, which later was found to have nearly 4 tons of cocaine on board. Bribery allegations against district commissioner Rudy M. Camacho remain the subject of inquiry by the Treasury Department's office of the inspector general, but sources say that probe is meandering along without direction. Meanwhile, at the California port of Calexico, IA investigators, who already have arrested one Customs inspector recently on corruption charges, are closing in on a Customs secretary who is accused of selling intelligence to Tijuana's Arellano Felix druglords. At least one other Calexico inspector is under suspicion. SENATE LEADERSHIP CALLS FOUL ON HATCH "Latter-Day Liberal" was how National Review described Sen. Orrin Hatch of Utah in a recent edition. The magazine's profile of the chairman of the Senate Judiciary Committee concluded that Hatch had moved away from his conservative roots and had become a pushover for a Clinton administration determined to appoint liberal activists to federal judical benches around the country. Conservative complaints indeed have been building up against Hatch since last summer. Thomas Jipping, director of the Free Congress Foundation's Center for Law & Democracy, has maintained a constant drumbeat of disapproval. And several GOP senators on the Judiciary Committee have - behind closed doors - clashed sharply with the chairman in the fall and accused him of going too easy on the administration's nominations. In the face of criticism, Hatch has argued consistently that it is not his job to hold up or prevent the appointment of a president's nominees, liberal or not. Last summer, he told Insight he believed he could only object to nominees who showed a tendency to rewrite the law, and he expressed concern about "politicizing the nomination process." Hatch, though, has been hardening his line during the last few weeks. Congressional sources say he was "staggered" last month when almost the entire Republican Senate leadership, including Majority Leader Trent Lott, turned on him and voted on the floor of the Senate against his recommendation to confirm Merrick Garland as a District of Columbia federal judge - Garland only got through on Democratic and moderate GOP votes.

U.S. Drug Warriors Knock on Heaven's Door
By Jamie Dettmer

Most tourist guidebooks about Mexico don't even mention the border city of Juarez. The few that do are scathing. "There's little doubt that the best thing to do on arriving in Ciudad Juarez is to leave," remarks one travel guide. Wise advice indeed. Originally a small settlement on the Santa Fe trail known as Paso del Norte, Juarez is Mexico's fourth-largest city but has few claims to historical fame and no architectural charm. Sprawling and ugly and dwarfing its cheek-by-jowl American neighbor El Paso, Juarez has a reputation for danger that is fully deserved. Even hardened border Americans who flock to the Mexican city on weekends for the cheap booze and whores treat Juarez with caution: They party in the bars and brothels of the squalid main drag but steer clear of the dimly lit downtown side streets - the preserve of los pandillas, vicious street gangs responsible for a couple of hundred murders every year. Gang violence is but a stitch or two in the menace woven deeply into the city's fabric, for Juarez also enjoys two booming export economies. On the outskirts 350 mainly U.S.-owned modern factories, or maquilas, churn out electronic appliances and furniture for a consumption-hungry America. The other economy also pumps out products purchased north of the Rio Grande, but it remains mostly hidden, and inquiry by strangers can lead to barbaric violence and mysterious disappearances. For Juarez is the town of the "Lord of Heaven," Amado Carillo Fuentes, the top Mexican narcotrafficker whose capture has become a major priority for a Clinton administration under intense congressional pressure to stop the flood of Mexican drugs into the United States. From mansions in the upmarket Juarez district of Condesa, Carillo oversees an international crime empire that employs thousands and is bigger and more powerful than even the Colombian narcoenterprises of the late 1980s. Last month on Capitol Hill, U.S. Drug Enforcement Administration, or DEA, head Tom Constantine described the Carillo Fuentes network as "staggering" and warned that the 41-year-old godfather is "attempting to consolidate control over drug trafficking along the entire Mexican northern border." Every week, the Juarez cartel generates an estimated $200 million in profit - the ill-gotten reward for annually spiriting 100 tons of cocaine and large shipments of heroin and methamphetamines across the Southwest border. Since April 1993 when he succeeded to the leadership of the Juarez cartel through "the evolution of violence," to quote a veteran U.S. lawman, Carillo and his cohorts have made El Paso's neighboring city their own in much the same way Colombian drug baron Pablo Escobar ruled Medellin as a personal fiefdom - local Juarez newspapers don't write about him and police chiefs don't dare arrest him. "He's insulated," says Phil Jordan, a former top DEA agent. And in February, the scope of Carillo's influence elsewhere in Mexico was dramatized starkly when Gen. Jesus Gutierrez Rebollo, the Mexican drug czar, was revealed to be one of the Lord of Heaven's paid retainers - a discovery that prompted outrage on Capitol Hill and led the House of Representatives to declare Mexico a delinquent ally in the war against drugs. Despite being the DEA's public enemy No. 1, having been indicted in absentia on drug charges in Texas and Florida, Carillo seems to be so confident of his ability to stay one step ahead of American law enforcement that he continues to slip cockily across the border on periodic business trips and shopping sprees to Las Vegas, Dallas, Houston and Los Angeles, though with less frequency than before. And in Mexico, where he's wanted on a mere firearms violation, he operates with an impunity that flows from bribery and brutal intimidation - from pesos and bullets. The tale of Carillo's rise is for some U.S. drug warriors a story wrapped up in an enigma. The puzzle? Why has the Lord of Heaven - he earned the nickname because of his large fleet of drug-smuggling airliners - become the 1990s border version of Chicago's Al Capone in such short time? "I've seen him shoot from an acorn into a tree," remarks a recently retired senior DEA agent. The other, more pressing, conundrums for DEA agents are how to take him down and why there isn't more political backing from Washington to launch an all-out special-operations bid to nail Fuentes and his associates. Texas-based DEA agents recently were so concerned about the Clinton administration's softly-softly approach to Mexico and drugs that they refrained from informing superiors in Washington of an explosive investigation they've mounted into alleged links between Carillo and luminaries of the ruling Mexican PRI party. The agents have targeted a former personal secretary of ex-President Carlos Salinas and former Mexican Transport Secretary Emilio Gambao Patron, who also is a member of the current Mexican administration. "Upstairs in Washington there's a real fear about rocking the boat with Mexico," says a senior DEA agent. From hundreds of pages of top-secret U.S. and Mexican intelligence documents and interviews with dozens of current and former lawmen and informants on both sides of the Southwest border, Insight has pieced together an exclusive profile of the highly clandestine Juarez cartel. It is the story of Carillo himself and of one of the cartel's five main families, the Zaragoza Fuentes family of El Paso and Juarez, who allegedly transport drugs and launder money for the Lord of Heaven and who alone control a byzantine network of hundreds of real and sham companies stretching from Mexico City and Guadalajara to New York and the Bahamas. What emerges from informed law-enforcement sources and intelligence reports is a ruthless trafficking organization that has managed to enmesh itself insidiously with the post-North American Free Trade Agreement economies of the southern states of America and the northern states of Mexico. "To appreciate the cartel's scale you should think of it as the criminal equivalent of General Motors," advises a DEA agent. "Juarez is a company town every bit as much as Detroit." From Juarez the tentacles of the cartel stretch far and wide - from the coca-producing countries to the south of Bolivia and Peru, through the cocaine-shipment nations of Colombia and Guatemala and then on up north to American cities such as Houston, Little Rock and Chicago and deep into Canada. The cartel's money-laundering network unwinds even further afield: Eastward, this time to hundreds of banks in the Bahamas, London, Frankfurt, Switzerland and Hong Kong, only to loop back to Juarez in the form of "clean" investment in some of the border maquilas and to Texas, New Mexico and other southern U.S. states, where Carillo and his lieutenants and associates are purchasing businesses and vast tracts of land. The extent of their "legitimate" business holdings is enormous. Civil associations, sports clubs, shopping malls, nightclubs, luxury hotels, restaurants and ranches all are included in the cartel's property portfolio. Senior DEA agents even allege the Juarez traffickers wield ultimate behind-the-scenes ownership of one of Mexico's major private airlines, Taesa, which Insight can reveal is the focus of a secret Texas-based U.S. probe. Cartel associates, in this case the Zaragoza Fuentes family, run one of the world's largest propane gas import-and-export businesses, which during the 1980s inexplicably escaped punishment when it defied American embargo regulations and shipped Texas propane to Nicaragua, according to U.S. Customs database reports in the Treasury, Enforcement and Control System, or TECS. The Zaragoza Fuentes also are Mexico's main milk suppliers, and the current head of the clan, Tomas, has a major interest in at least one Texas bank. For all of Mexico's top traffickers - the Arellano Felixes in Tijuana, the Meraz family in San Luis, the Quinteros of Mexicali, the Amezcua of Guadalajara and the Esparragoza-Moreno organization - the last four years have been boom time. From being diligent junior partners of Colombia's Cali and Medellin cartels they have emerged as the Western Hemisphere's undisputed drug kingpins, and in passing have brought Mexico to the very brink of becoming a narcostate. But it is Carillo's network that has benefited the most. Much of the Lord of Heaven's present success is a harvest of the past. The Juarez cartel is no new underworld growth. It has been rooting itself in the Mexican state of Chihuahua and in the northern towns of Hermosillo, Torreon and Durango since 1980 when it was formed by legendary marijuana-smugglers Rafael Aguilar Fajardo and Baldomero Fuentes Garcia. In 1987, the Juarez traffickers branched out into the even more lucrative cocaine trade. Only then did the Mexican attorney general's office, or PGR, start paying them much heed. One early strategic PGR goal involved outlining the cartel's bribery ties with law enforcement on both sides of the border. According to 1988 PGR intelligence updates, even at this stage the Juarez drug barons were highly active in bribing Mexican officialdom and in securing the paid collusion of American border inspectors. Apparently, one Gustavo Tavo Silvera was a Juarez cartel contact with U.S. Customs inspectors at El Paso's Zaragoza and Sante Fe border bridges - the Customs officials were paid "$10,000 for each car that was allowed to cross. Each car would sometimes be loaded with as much as 300 kilograms in drugs," according to one update. Anxiety about the Juarez cartel's corruptive influence became a constant refrain in secret Mexican reports from then on. In 1992, a top PGR goal remained "knowing the group's ties with authorities who facilitate their work on both sides of the border." U.S. agencies were "just AWOL when it came to Mexican traffickers for most of the eighties," concedes a high-ranking DEA agent. "All our attention was focused on the Colombians. We were condescending about the Mexicans - we just saw them as wetbacks and gun-toting pistoleros." But not all U.S. lawmen saw them this way. A retired Southwest border Customs agent adds: "Some of us started to document the Juarez boys and the Arellano Felixes in the early and mid 1980s, but no one further up the Customs or DEA hierarchies would pay any attention to us about the magnitude and how rapidly these guys were climbing the ladder. They just didn't understand the validity of monitoring and attacking emerging crime organizations." As far as the Juarez cartel went, complacency ended on Sept. 28, 1989, when a tip led DEA agents to a warehouse in the Los Angeles suburb of Sylmar i and to the biggest drug bust in U.S. history. More than 20 tons of cocaine were found by shocked officers - a tremendous, albeit unwitting, DEA score that ironically led to the ascendancy of the Lord of Heaven. Sylmar helped U.S. and Mexican law enforcement to arrest within four years the cartel's original leadership. Rafael and Eduardo Munoz Talavera, the linkage with the Cali cartel, were imprisoned in 1993, and Rafael Aguilar Guajardo, a former Mexican federal police chief who rose to head the cartel, was gunned down in April 1993 while on a Cancun holiday by rivals, possibly within the cartel, who feared he was making a deal with Mexican authorities to avoid seizure of his assets . Aguilar had been especially anxious not to forfeit a soccer team and a magazine, according to a leaked PGR report. Amado Carillo Fuentes took over. He came with impeccable drug credentials. Family ties and family-arranged smuggling apprenticeships cleared the way for him to grasp command. Born in the Sinaloa mountains near Culiacan - where most of the dominant Mexican trafficking families trace their roots - Carillo began to learn his trade young, and right at the feet of Uncle Ernesto Fonseca Carillo, one of the three top drug barons of the eighties. Along with brothers Cipriano and Vicente, he started at the bottom - depositing marijuana at safe houses. Through his uncle he later went to work for the heroin-smuggling Herrara family in the neighboring state of Durango, where he struck up a wild friendship with godfather Jaime Herrara Nevares' son Jaime Jr. The two were inseparable, says an informant who worked later for Cipriano. They played hard, smoked dope, crashed cars and visited whorehouses together - Carillo is believed to have at least two illegitimate children. The Durango years were not Carillo's most reckless. During the mid-eighties the young Sinaloan became the lieutenant in Chihuahua of the freewheeling, freebasing Pablo Acosta Villareal, an ill-disciplined and flamboyant drug baron who pioneered using light aircraft to ferry drugs across the border. When his gunslinging addict of a boss overstepped the mark and was killed in a 1987 shootout with Mexican police, Carillo fled and teamed up with brother Cipriano in the Durango town of Torreon. That union lasted two years as 1989 saw deep and bloody rivalries break out among the trafficking families, prompted by the arrests of several top smugglers, including Carillo's uncle, for involvement in the torture and murder of DEA agent Enrique "Kiki" Camarena. Capriano died in mysterious circumstances - an AK-47 bullet to the mouth finished him. It isn't known when Carillo returned to Chihuahua state nor exactly how he slithered up the cartel's hierarchy, though some drug watchers south of the border suspect the close ties he formed during his apprentice years with the Cali cartel's Miguel Rodriguez Orejuela were crucial. The detailed ins and outs aside, three things are clear about the Lord of Heaven: He's quick to seize opportunities and exploit the misfortunes of rivals which he often engineers, he's a shrewd and patient tactician and he generally balances savage retaliation with a readiness to compromise and form alliances. Certainly Carillo benefited from inheriting a cartel that was well-organized and rich even before his elevation to drug-baron status. According to PGR assessments, in 1988 and 1989 the cartel moved 250 tons of 100 percent pure cocaine with a street value of $21 billion. But with remarkable swiftness he has transformed Mexico's narcotrafficking pecking order and established the Juarez organization as pri-mus inter pares. "Amado has wrestled the top spot - the other families, particularly the Arellano Felixes, resent it but in the end he's in the driving seat," says a Customs source. One way he secured his position was to enrich his cartel even further by pioneering the use of Boeing 727s and French Caravelles to shift massive Colombian cocaine loads into Mexico. And Carillo has maintained his grip and expanded his influence by continuing to learn from the indiscretions of his onetime boss Acosta: He can be the homicidal gunslinger with rivals or associates suspected of inefficiency or disloyalty but he also can be a peacemaker and has widened the cartel by contracting out drug loads and shipments to new families, say DEA agents. Until recently he presided over regular secret meetings with the bosses of rival cartels, including the Arellano Felixes and the Meraz and Quinteros families, according to a highly placed informant who infiltrated one of the cartels for U.S. Customs and the DEA. In an interview with Insight the informant says Carillo met other family heads about every 90 days at a resort near Golfo de Santa Clara. Fearful of U.S. electronic surveillance, the narcotraffickers would only talk business when out on a luxury fishing vessel in the Gulf of California. The purpose of the meetings? "Straighten out differences and keep the flow of business going without the disruption of cartel violence," says the source. Those get-togethers no longer take place - fearful of Carillo's capo di capo ambitions the Arellano Felixes have tried at least once to kill the Sinaloan. But he is a difficult man to murder as well as being a difficult man to arrest. Carillo trusts a tiny inner circle, which includes his Juarez underboss brother Vicente and some Herrara family members. Vigilant about security, Carillo in the past has hired former Israeli intelligence agents and former British Special Air Service soldiers for advice, according to a DEA source. "He's paranoid about security concerning himself or the cartel generally," comments a U.S. lawman. He even has a unit monitoring the American and Mexican media for leaks. His own travel is planned with White House precision: First, and weeks ahead of any trip, intensive and prolonged electronic surveillance of police radio bands is conducted in any area he intends to visit on either side of the border. Days before Carillo's scheduled arrival his bodyguards flood the area to check for unusual on-the-ground police activity - when satisfied he's safe, Carillo arrives in a specially converted bullet- and bomb-proof car, generally an upmarket four-wheel-drive vehicle. Probing for weak links that could lead them to their quarry, U.S. lawmen tasked with bringing Carillo down identify only two: a cocaine habit and alcohol binges. "When he's real high or launched on a drinking session he can be unthinking and terrifyingly violent," remarks a senior DEA agent. "If he's going to make mistakes it'll be when he's full of powder or drink." Apart from those two flaws, there's little to go on when targeting the Lord of Heaven - especially when Mexican authorities are reluctant to go for Carillo directly or are paid to stay away. Mexican federal judicial, or FJP, policemen supplement Carillo's Condesa bodyguards, concede PGR sources. Likewise, FJP officers are helpful in guarding Juarez cartel airstrips, including, an informant tells Insight, four located at the 11,000-hectare Rancho Nuevo, northeast of the small Mexican town of Morelos, which once was owned by the late state governor, Teofilo Borunda. The Juarez cartel devotes at least 10 percent of its income to paying off Mexican officials and lawmen, the PGR estimates. The now-splintered Gulf cartel, until recently run by convicted drug lord Juan Garcia Abrego, boasted the best political connections of all the Mexican narcoenterprises during the administration of President Carlos Salinas, but this is Carillo's time. Via a former Abrego lieutenant, Oscar Malherbe de Leon, under arrest in Mexico, Carillo has roped in some of the Gulf cartel's purchased politicos to add to his own. The other Juarez families also are well placed with political connections, especially the wealthy Zaragoza Fuentes, whose alleged trafficking activities are voluminously documented in PGR and U.S. law-enforcement databases. Despite a welter of criminal intelligence held both sides of the Southwest border on the Zaragoza Fuentes, the family has remained virtually untouched by law enforcement. This is alleged to be the result of the high-grade Mexican political connections they enjoy. TECS reports say, for instance, the family has relatives of former Mexican attorney general and former Chihuahua governor Oscar Flores Sanchez, including his son Oscar Flores Tapia, working for them. But the family has remained undisturbed in the United States as well: In spite of a major IRS tax-violation case against members of the family in Texas, and seven years of detailed narcotics allegations against them, no asset-forfeiture efforts have been mounted by American authorities. This has led some former and current DEA and Customs agents to complain about lack of direction and political will in the war on drugs. An old Juarez family, the Zaragoza Fuentes are related by blood to Carillo Fuentes and by marriage to the original cartel leaders - a cousin, Pedro, is the brother-in-law of the two Rafaels, Munoz Talavera and Aguilar Guajardo. According to U.S. intelligence reports (copies are held by Insight), the patriarch of the family was Miguel Sr., who had four sons - Miguel, now 62, Eduardo, 59, Tomas, 52, and Ricardo, 43 - and one daughter - Irma. Their story is one of rags to riches - Miguel Sr. started out as a kitchen-cabinet salesman. On the face of it the family owns or controls a vast empire of legitimate businesses stretching from the United States through Central America and extending east to the Bahamas and Germany. A 35-page U.S. multi-agency intelligence-analysis records: "The Zaragoza-Fuentes family heads one of the world's largest suppliers of LP (liquid propane) gas. Through a myriad of companies, the family operates and controls business interests ranging from LP distributing to maritime shipping, trucking, aviation, land holdings, management companies and banking interests." Family companies are licensed by PEMEX, the state-owned Mexican oil industry, to supply propane to the whole of Mexico. But "behind the vertically integrated companies, the horizontally related companies, the real companies, the shell companies, the web of shared addresses and the recurring names is a second empire ... built on narcotics smuggling, money laundering, income-tax evasion, export violations and weapons smuggling," says the intelligence analysis. Both Mexican and U.S. authorities initially launched separate probes into the family in October 1990 after Customs officials at the California Otay Mesa port of entry discovered four tons of cocaine in a Hidrogas de Juarez tanker owned by the Zaragozas (see "Megacorruption at the Border," Nov. 11, 1996). But the inquiries petered out. In 1994, a joint U.S.-Mexico money-laundering investigation into the family, Operation Cobra, floundered when Mexican law-enforcement agencies refused to cooperate. "The propane-gas companies were not looked into this side of the border as early as they should have been," complains a former Customs agent. Why? "We just weren't gung-ho enough." Former DEA agent Jordan, who until 1995 was director of the El Paso Intelligence Center, a federal information-sharing facility, complains: "We knew about HidroGas and the other trucking companies but did nothing. We should have closed them down - still should." Insight has identified more than 60 Zaragoza Fuentes-owned or -controlled firms, some of which, despite strong U.S. suspicions of drug trafficking and money laundering, are participants in the border line-release program, a Customs import-export scheme designed to speed trucks through U.S. ports of entry by reducing cargo inspections. Dozens of Zaragoza Fuentes tankers pass daily through American land crossings. They just keep on trucking. But Insight efforts to reach a family spokesman were unsuccessful. The Zaragozas' charmed life has been long. Back in the mid-1980s, U.S. authorities failed to intervene after discovering that firms owned or controlled by the family, including Western Energy, Warren Petroleum, Paso del Norte, Gas Del Tropico and HidroGas of Juarez, broke the American embargo on Nicaragua and exported propane gas and liquid petroleum to the Sandinistas via Honduras and Guatemala. "We were sleepwalking then and still are," remarks a DEA agent. "Now we have to try to deal with a cartel that has an annual income which rivals our entire federal antidrug budget." ****GRAPHIC (COLOR) KEY PLAYERS VICENTE CARILLO FUENTES Brother of Amado Carillo and the cartel's underboss, in Juarez. Vicente organizes cocaine transport across the border. TOMAS ZARAGOZA FUENTES Considered the head of the family; married with one son, also called Tomas and allegedly a narcotrafficker. MIGUEL ZARAGOZA FUENTES Married with several sons - two died in car crashes - Miguel is reputed to be a womanizer with a Texas mistress.