The Dettmer Papers
A Collection of the writings of Jamie Dettmer
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
By Jamie Dettmer
GORE'S SHAKY EFFORT TO PILOT AVIATION SECURITY
After a sluggish start, Vice President Al Gore's panel on aviation security has arrived at dozens of recommendations on ways to improve airline safety. The Gore-headed commission was set up by President Clinton who, in the wake of the downing of TWA Flight 800, quickly sought to reassure travelers that prompt steps would be taken to protect them. The president gave Gore a 45-day deadline to file an initial report. For nearly half of that time virtually nothing was done: It took the White House three weeks finally to name the first seven commissioners. Most of the panel's work was rushed in the week before the deadline. The vice president added to the sense that everything was being done by-the-seat-of-the-pants: He announced his recommendations at a press conference before the report actually had been written. Federal experts on aviation security while talking to news alert! expressed irritation at what they see as a "less than professional" operation. "I suppose after wasting time they suddenly realized they'd better come up with something or it would look bad on the campaign trail," says one. Despite this, the report is not, as some feared it might be, just a cosmetic exercise. It contains some useful recommendations, including the introduction at U.S. airports of high-technology bomb-sniffing devices. But there are over-the-top recommendations as well, according to aviation-security experts - they cite the report's call for a feasibility study into equipping commercial passenger planes with antimissile devices similar to those deployed on military aircraft. One large question in particular is left unanswered by Gore's report: Why weren't half the measures and precautions recommended not standard practice already? Common sense should have dictated their implementation years ago. And in fact, some of Gore's most important must-dos were introduced in one form or another in the early 1990s but were not enforced. In aviation-security legislation passed in the wake of the 1988 airliner bombing over Lockerbie, Scotland, the Federal Aviation Administration was given the responsibility for conducting initial security background checks on airport employees. According to U.S. Customs sources, the FAA has failed miserably at its task. A senior Customs official told news alert! that "there has been a serious deterioration in security at American airports" since 1990. He claims that about 10 percent of workers at New York's JFK airport and at Los Angeles have criminal backgrounds. Gore's report makes no mention of how the FAA has failed to fulfil its security responsibilities - no heads are banged together, no names taken. So much for accountability. Further, Gore's panel appears to be completely oblivious to how turf-fighting between federal law-enforcement agencies has contributed to the undermining of aviation safety. Since 1990, Customs has had a hard time ensuring that the FAA's mistakes are corrected. The FBI has blocked Customs officers from resorting to its national criminal computer database, or NCIC, to check up on airport workers who have access to secure areas. The FBI has claimed the checks are "not allowable under NCIC policy" or that the database would be overburdened. Many Customs officers just ignored the FBI and used the NCIC system in defiance of orders. In July, shortly after TWA Flight 800 crashed, an administrative message was sent to all Customs officers from Washington instructing them to stop conducting NCIC checks. The message - news alert! has a copy - states: "If any officer is currently performing these checks for other than valid criminal justice employment purposes, this practice must be discontinued at once." Gore's report recommends that the FBI now should take over the job of checking up on airport workers. Customs officials are relieved. But they say they still are worried about their access to the NCIC database. The Gore report envisages that Customs will play a greater aviation-security role in America and overseas. "Are we going to be allowed NCIC access?" asks an inspector. "If we're not, then we can't do our job properly." According to the vice president, his recommendations can be implemented "quickly and effectively." Law-enforcement officials are having a big chuckle over that comment. CASING THE THOMASSON-LASATER CONNECTION News alert! long has harbored a special interest in presidential aide Patsy Thomasson, one of Bill Clinton's Arkansas chums. Thomasson, the White House director of personnel, has figured in virtually every dubious White House enterprise under investigation by Congress: She was present at the lengthy White House meeting on May 15, 1993, that led to the controversial sacking of the travel-office staff, and she was one of the aides who turned up in late deputy counsel Vince Foster's office just hours after his death. Now news alert! has learned that Whitewater independent counsel Kenneth W. Starr is beginning to focus on Thomasson. According to sources close to the Whitewater probe, the presidential aide is figuring in discussions about strategy currently being conducted by Starr and his prosecutors. "They're beginning to speculate that maybe they can squeeze Thomasson on Travelgate and try to force her to reveal information about the 1980s and Arkansas," says a source. The newfound Thomasson interest by Starr goes hand-in-hand, the source says, with a belief that it is time to take a closer look at former Little Rock bond-daddy Dan Lasater. Thomasson was given power of attorney by Lasater when the bond-daddy was serving his time on a cocaine-trafficking conviction.
By Jamie Dettmer
TEMPERAMENTAL COMPUTER THREATENS CUSTOMS' OPERATIONS
Every September the U.S. Customs Service undertakes an annual inventory of the property and drugs it has seized nationwide during the previous 12 months. This fall, the exercise likely will be a nightmare, according to several Customs sources, who claim a new multimillion-dollar computer database introduced last November is so faulty that they have no idea what has been seized or even the storage locations of impounded goods. That is just one of the problems the Seizure and Case System, or SEACATS, has caused since it came on-line. Designed to bring together Customs' two databases, TECS II and the Automated Cargo System, SEACATS has ripped through hundreds of previous case histories and either destroyed or tarnished them to such an extent that they now are worthless. "You put in a case number and the computer throws up the wrong case," says a frustrated Customs source. "SEACATS is blowing our institutional knowledge - the investigative consequences are going to be devastating." SEACATS also is refusing to accept some drug categories. The system doesn't like "mushrooms," for example, leading Customs headquarters to order agents and inspectors to list after a seizure or arrest a different drug category to please the database. "There are some revolts going on out in the field about this," says another source. "Court cases could get thrown out if we have the wrong drug listed. And what's going to happen if internal affairs comes snooping and accuses us of entering false data into the system?" Agents and inspectors also are concerned about the system's security. Export and import brokers have input access to the Automated Cargo System, or ACS - they can enter their manifests to speed up border crossings for their loads. Now that ACS and TECS II, a criminal and intelligence database, are connected via SEACATS, hacking opportunities have increased. Customs chiefs are keen to keep the problems under wraps. ALBRIGHT'S METTLE JACKET MAY HAVE WEAK LINKS Washington remains smitten with Madeleine Albright. America's first female secretary of state continues to bask in gushing reviews from the press and lawmakers alike. The White House barely is able to contain its glee at a love fest that shows no signs of abating. Skepticism is in order though - as it should be whenever a media bandwagon is in runaway mode. The lavish praise heaped on Albright won't, in fact, last - and not only because fickle journalists will tire of the she-can-do-no-wrong story line. Media relief at the departure from Foggy Bottom of the wooden and gray Warren Christopher will dissipate and Albright's "I don't shilly-shally" rhetoric is likely to grate when vexing problems, such as Sino-American relations, hove into view. Colorful, snappy sound bites aren't solutions. For all of the detailed coverage of Albright's family history and professional background, an unanswered question remains about the consistency of Washington's latest media darling. GOP support for Albright's selection was based on the perception that she's a hawk. But is she? Today, she basks in being described as a hawk and is fond of playing off her Czech refugee past by repeating, ad nauseam, "my mind-set is Munich; most of my generation's was Vietnam." But not so long ago the 59-year-old Albright had no trouble serving President Carter and remained less than outspoken about the dovelike policies pursued by that Democratic administration. She also had no difficulty in acting as chief foreign-policy adviser to the hardly hawkish Michael Dukakis when he mounted his disastrous bid for the presidency. During the Republican administrations of the eighties Albright was an opponent of aid to the Nicaraguan Contras and cautioned against going to war with Iraq following Saddam Hussein's invasion of Kuwait - odd positions for a muscular interventionist to adopt. Albright's abrupt transformation from dove to hawk has been skated over by the media and wasn't explored in depth by the Senate. Newsweek explained her turnaround in a single paragraph, claiming that "friends say she came to trust her latent hawkish instincts." But was the change one of political convenience? Albright's switch coincided with a shift in Democratic thinking - the party now warms, in theory anyway - to the idea of intervening for humanitarian purposes. Though steadier now, the Clinton administration at first exhibited flip-flops that left allies bewildered and encouraged enemies to be brazen. Presidential neglect led to a fragmentation of responsibility for foreign-policy making. Albright clearly is intent on putting State back at the helm. The result should be more consistency but that also will depend on Albright herself. Her unexplained change gives few clues about how unswerving she will be in the face of criticism - congressional, public or presidential.
Exposed Border Bosses
Embarrass U.S. Customs
By Jamie Dettmer
The U.S. Customs Service is fighting back -
and not so much against Mexican drug traffickers, or border inspectors alleged to be in the pay of the narcotics barons based south of the Rio Grande, but against whistle-blowers who have provided information for Insight's ongoing "Battle for the Border" series. According to Customs employees, internal-affairs, or IA, agents have unleashed a witch-hunt aimed at identifying the sources for the border-corruption series. Armed with copies of Insight, agents have been questioning suspected Customs employees and taking them line-by-line through articles to see if they will slip up or confess to having revealed the degree of corruption. Customs Commissioner George Weise is understood to have ordered the crackdown. The search for the border sources strikes former Reagan Customs Commissioner William Von Rabb as "un-American and coming close to breaching First Amendment rights." He added: "Whether Weise likes it or not, part of the control on government comes down to public servants being able to talk to the press. That's the way we do things in this country. I have never heard of this kind of search happening before in the service's history." Art Foss, a former vice president of the National Treasury Employees Union, described the internal-affairs search for whistle-blowers as a "retaliatory and intimidatory witch-hunt." Foss questioned whether the action is aimed merely at trying to discourage Weise critics from talking to the press. He believes the move may be part of a preemptive bid to dissuade whistle-blowers from cooperating with House and Senate investigators, who are probing the series of Insight revelations with an eye toward border-corruption hearings later in the year. The IA leaks inquiry breaks a 2-year-old promise Weise made to California-based inspectors that they would not be punished for speaking to reporters. In a "To Whom It May Concern" letter dated Feb. 21, 1995, the commissioner wrote: "I want to assure you that I recognize your right to speak with news-media representatives about your perceptions which you believe evidence serious misconduct or mismanagement. Please accept this letter as my personal assurance.i" A phone request to Weise's communications director, Pat Jones, for a formal statement on the reasons for the leaks inquiry wasn't returned. Since last November Insight has been disclosing details of drug-related bribery probes at the border and reporting allegations of serious wrongdoing against, among others, Rudy M. Camacho, Customs' Pacific regional commissioner; Jerry Martin, then San Ysidro port director; and Senior Inspector Art Gilbert. A later article on the Arizona port of Douglas questioned possible corruption there too - raising, as a matter of concern, a friendship between port director Frank Amarillas and a convicted marijuana trafficker and reporting the alleged failure of the port management to ensure systematic inspection of border-crossing trucks owned by suspected smugglers or tied to particular Mexican drug cartels. The series also has outlined claims by IA agents that they are blocked from investigating corruption allegations as thoroughly as they believe is necessary. Soon after the series began, Weise and senior executives at Customs headquarters in Washington held discussions about "how to pull the teeth of stories like yours," according to a Washington-based Customs source. "What to do about them was a high priority." During one fall meeting, Weise said he saw "the lingering allegations of corruption in our workforce" as a matter of "grave concern." In an E-mail message put out to the entire service, he expressed displeasure at corruption allegations "coming from our own employees," adding: "I now feel it is time to say `enough.'" The timing of the "Battle for the Border" series coincides with revelations of high-level drug-related corruption in Mexico, also reported well in advance in these pages. Despite abundant signs to the contrary, Clinton administration officials for the last six months have been pooh-poohing the claim that there is systemic corruption on the American side of the Southwest border, too. However, on March 2, Clinton drug czar Barry McCaffrey reversed the administration's normal line and admitted during a television interview that a U.S. law-enforcement corruption problem exists. A few days earlier, during a House hearing, Justice Department official Mary Lee Warren conceded the same point.
By Jamie Dettmer
JUST A FAILURE TO COMMUNICATE
The fallout in Republican circles from Bob Dole's defeat is continuing apace and the mudslinging is getting into full swing. As Insight reported recently, Scott Reed, Dole's 36-year-old campaign manager, is - fairly or unfairly - on the receiving end of most of the criticism. But he isn't the only victim in the finger-pointing orgy. The Kansan's lanky press spokesman Nelson Warfield and longtime Dole aide Jill Hanson also are facing the blast of GOP disappointment. And in the finest traditions of the Washington blame-game, much of the finger-pointing involves telling tales out of school. Some of the more interesting center around the campaign's communications director, John Buckley, a former Jack Kemp aide and an old Reed friend. Buckley never has been on good terms with Dole and the Kansan's dislike for him became more intense back in 1988 when the former Senate majority leader was locked in a vicious primary fight with Kemp and George Bush. Buckley masterminded some hard hits on Kemp's GOP opponents, and at one point Dole was so angered he phoned Kemp and told him to discipline his attack dog. So there was considerable surprise in the first place when Dole conceded to a hard-pushed Reed request and hired Buckley. Dole may have taken him on board but it is emerging he didn't listen to him - not only that, but he wouldn't even talk to him from the San Diego convention onward, say GOP sources. Apparently, Dole would make an abrupt 180-degree turn whenever he encountered Buckley in a campaign office. "It was hopeless," says a source. "It just about sums up the campaign - you had a candidate who wouldn't communicate with his communications director." IT'S BORDER BUSINESS AS USUAL It wasn't so long ago that senior U.S. Customs officials, including Commissioner George Weise himself, were insisting, to the irritation of the service's rank and file, that it was impractical to search for drugs by looking under the hoods or in the trunks of the bulk of the traffic passing through the 24 land ports of entry along the Southwest border with Mexico. In defending a few months ago the controversial line-release program, a 10-year-old scheme that speeds commercial traffic across the border and allows importers to get their cargo across with little or no inspection, Weise lambasted his internal critics within Customs. "There are people [in Customs] who feel that if you don't examine physically every single shipment, every single truck i we're not enforcing, we're facilitating," he told one California newspaper. "It's absolutely physically impossible to do it. You can't examine every vehicle, every truck." Customs inspectors also were under pressure to avoid holding up private cars as well as commercial trucking and at several ports of entry they were being deterred by their local managers even from regular cursory inspection of cars - that is until drugs became an issue during the presidential campaign. When Bob Dole started to talk about the failure of the Clinton drug policy there was an abrupt shifting of gears by the powers that be in Washington who, to the amusement of Customs inspectors, suddenly ordered more-frequent searches of border-crossing traffic. "It was as though they had just invented the wheel," remarks an Arizona-based Customs supervisor. The shift in policy came in a memorandum sent to all Southwest port directors by the assistant commissioner for the Office of Field Operations, Samuel Banks. The memo, dated June 11, 1996, stated: "Drug smuggling across the Southwest Border continues to be a major enforcement concern.i The severity of this problem and the search for new and innovative solutions has led Customs to issue instructions i to increase and intensify examinations of vehicular traffic." The memo goes on to say that "more automobile trunks and hoods" should be opened and that such inspections "will boost the level of drug seizures and will act as a deterrent." Continuing to state the obvious, Banks proceeded to justify the policy thus: "The purpose of this activity is to deny the smugglers access to this method of concealment i if we fail to open the trunks, we are giving the smugglers an advantage they should not have." And they call that a new and innovative solution? Why wasn't it being done before? According to critics of Weise's regime within Customs, regular vehicular inspection became a no-no because of considerable lobbying pressure from chambers of commerce and the Mexican authorities. Weise was particularly attuned to importers' complaints and arguments about backed-up traffic, say his critics. Before becoming commissioner Weise, who is a lawyer, spent most of his career securing favorable legislation for importers. When he left law school, he entered Customs as an import specialist and later went on to work at the International Trade Commission and on the House Ways and Means subcommittee on Trade. If the new stricter policy is adhered to, some Customs inspectors predict an increase in cocaine seizures. Last year, three ports of entry failed to make even one cocaine seizure - Sasabe and Lukeville in Arizona and Santa Teresa in New Mexico; Andrade in California managed just one.
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.
FBI Has Grounded
By Jamie Dettmer
Once upon a time it was fun to travel by air. The lines for checking in weren't too long and the security wasn't so intrusive. Altogether, everything was more relaxed and no one really needed to be at the airport a couple of hours before a flight. Now everything has changed. Computers don't seem to have streamlined anything - in fact, quite the reverse. I bet time and motion studies comparing how quickly an airline clerk can check in passengers today with the speed it took in the precomputer age would show how sluggish everything has become now. Computers aren't the only reason, of course, for how nightmarish air travel has become. The sheer volume of flights and the increasing number of passengers have contributed to the unpleasantness. Airports are clogged. Has anyone out there been on a flight recently that actually took off or arrived at its destination on time? And increasing security hasn't helped to make air travel an easy, friendly experience. I seldom am able to be in American airports without cursing Vice President Al Gore. The aviation-security commission he headed back in the wake of the TWA Flight 800 crash imposed a series of new measures that have resulted in more inconvenience for passengers. Not being able to check baggage at curbside for international flights is a real pain, for example. Better to be safe than sorry, you might argue. Surely tightened security is to everyone's benefit? I don't disagree about the need to make life harder for terrorists. After having covered terrorism and its bloody consequences in Northern Ireland, the Middle East and Europe, I understand that better than most. But help to improve security with a lot of its recommendations, and it failed to appreciate that the biggest security gaps and loopholes are not with the passengers but are air-side with airport and airline personnel. In the days following the Gore report, I wrote in Insight: "In aviation-security legislation passed after the 1988 airliner bombing over Lockerbie, Scotland, the Federal Aviation Administration, or FAA, was given the responsibility for conducting initial security background checks on airport employees. According to U.S. Customs Service sources, the FAA has failed miserably at its task. A senior Customs official says that `there has been a serious deterioration in security at American airports since 1990. He claims that about 10 percent of workers at New York's JFK airport and at Los Angeles have criminal backgrounds." Gore's report made no mention of how the FAA failed to fulfill its security responsibilities - no heads were banged together, no names taken. Furthermore, the panel was utterly oblivious to how turf fighting between law-enforcement agencies contributed to the undermining of aviation safety. And that problem still has not been corrected. Since 1990, Customs has had a hard time ensuring that the FAA's mistakes are corrected. The FBI has blocked Customs officers from resorting to its National Crime Information Center, or NCIC, database to check up on airport workers who have access to secure areas. The FBI has claimed that the checks are "not allowable under NCIC policy" and that the database would be overburdened. Every now and again, Customs has raised the issue to try to persuade the FBI to alter its policy but to no avail. Customs Commissioner Ray Kelly is going to try again now following the Aug. 25 sting operation by Customs and the Drug Enforcement Administration, or DEA, at Miami International Airport which resulted in the arrest of more than 50 airline employees on drug-smuggling charges. The ramp workers - they were employed by American Airlines - and food handlers employed by Lufthansa Service Sky Chefs apparently were smuggling anything from cocaine and heroin to hand grenades and guns from Latin America to cities along the Eastern Seaboard. In one case, the DEA says an American Airlines employee arrived at the airport on his day off and used his security clearance to retrieve a handgun and three grenades from an incoming flight. He then used his free-flight benefits, boarded a plane with the contraband and flew to Philadelphia. According to U.S. Attorney Tom Scott, the existing security measures at Miami were broken time and again. He added that the breaches were "extremely serious" and in the age of domestic terrorism the current situation is intolerable." Kelly hasn't minced his words either and has made it clear that the problem may not be reserved just to Miami. Other probes are under way. And Customs sources raised with me again the "problem of background checks on airline employees" and the FBI's refusal to allow Customs officers to access the NCIC database. "This sting has highlighted the problem. We can't do our job properly, and with the airlines being too lax about their checks on prospective employees we have a real problem." So, when you are frustrated by the intrusiveness of airport security, maybe you should follow my unpopular example and express at every possible opportunity how everyone is wasting their time until security air-side has been sorted out.~JD
By Jamie Dettmer
Are you kidding me? We approved what? To whom?" The reaction from the State Department official was one of shock. "That's just great, just great!" It isn't every day that a normally staid diplomat lets down his professional guard and expresses gut outrage, but then it isn't often that Uncle Sam supplies surplus U.S. military aircraft to Mexican drug smugglers. The type of aircraft concerned? Lockheed Hercules C-130s, the robust tactical multimission plane that's been the cargo-hauling mainstay of the U.S. military and the armed services of friendly nations since the 1960s. To let a drugs cartel - in this case Mexico's second largest - get its hands on one Hercules may be regarded as a misfortune. But what about two? That, to paraphrase Oscar Wilde, looks like carelessness. The cock-up began to come to light last October when the Mexican attorney general ordered the seizure of Aero Postal, a Mexican air-freight firm discovered to have ties with the Arellano Felix brothers, Benjamin and Ramon, who control the Tijuana drugs cartel. Two former U.S. Air Force C-130s and a Boeing 737 belonging to the company were impounded and remain grounded at Mexico City airport. There was a flurry of brief Mexican press reports at the time about the attorney general's intervention, but the scale of the Tijuana cartel's C-130 capability was missed - and so were the mistakes Uncle Sam made in letting the planes head south of the Rio Grande. While the Clinton administration has been trumpeting its law-enforcement success in recent weeks with Operation Casablanca, the $87 million money-laundering sting that led to the arrests in mid-May of dozens of Mexican bankers, U.S. officials haven't been advertising the multiagency debacle that between 1993 and 1997 gave the Arellano Felixes the opportunity to transport tons of narcotics on board the now-impounded C-130s. Aero Postal also was considering at one time leasing two other Air Force C-130s, which have a market value of about $5 million each. How the planes got into the possession of the Tijuana cartel - remember that one of the Arellano Felix brothers, Ramon, was added last year to the FBI's 10 Most Wanted List - is a story worthy of a made-for-TV movie. According to a senior agent with the Drug Enforcement Administration, or DEA, the comedy of bureaucratic errors that led serious "bad guys" to secure the aircraft - the C-130 is any smuggler's dream plane - also is a case study in "our inept war on drugs." The DEA agent adds: "We battle to take from the traffickers with one hand and we give with the other. They remain alert and we lack vigilance." The "giving" has irritated the Mexican government, frequently the butt of harsh U.S. criticism about its failures to curb the drugs trade. But Mexico City hasn't raised a public hue and cry, hence the lack of American press coverage on the matter. The muted nature of the Mexican pro-tests - the issue has been the subject of behind-the-scenes talks between officials of the two governments - is a reflection, Justice Department sources claim, of Mexico City's recognition that there's plenty of blame to go around. Lockheed built the two planes involved for the U.S. Air Force. Their Air Force numbers were 570517 and 570518. After long military histories they were were mothballed, at different times and separately, at Davis-Monthan Air Force Base near Tucson, Ariz., according to the Lars Olausson Lockheed Hercules tracking book published in Sweden. The two left the boneyard at Davis-Monthan after being swapped with private U.S. concerns for antique planes worthy of exhibition in national air museums. The exchanges were part of a controversial U.S. government program that was the subject this year of a major federal fraud prosecution in Arizona. In total, three dozen surplus military C-130s were swapped for antique planes under the U.S. Forest Service's Historic Aircraft Exchange Program. Most of the C-130s went to a handful of American aerial firefighting companies or other private businesses. The two Aero Postal bought were sold to it by T&G Aviation of Chandler, Ariz., a company founded by William "Woody" Grantham, formerly a pilot for the onetime CIA-owned Air America, which itself purchased the aircraft from private businesses, including a bank in California. For a time, one of the aircraft was stored at Arkansas' remote Mena Intermountain Regional Airport, which currently is the subject of a House Banking Committee drug-money laundering probe. T&G applied in 1992 and 1993 for State Department permission to ship the aircraft down to Guadalajara, the Dodge City of the Mexican trafficking scene. The exporting of American-manufactured military aircraft, including the C-130s, is meant to be a tightly controlled business. Under the Arms Export Control Act, the State Department's Office of Defense Trade Controls has broad powers to prevent new or used military equipment from being sold to states deemed pariah nations or to foreign companies linked to terrorism or criminal activities, such as drug smuggling. Both T&G applications for the sales of 570517 in 1992 and for 570518 in 1993 went forward, concedes a State Department spokesman, without a hitch. "We held no derogatory information on either company and so we approved the applications, though Aero Postal was required to use the planes for pesticide spraying or for legal cargo-shipping purposes." State Department sources say there were "no flags of warning" about either T&G or Aero Postal in the Customs Service intelligence computer or in databases run by the DEA. Insight encountered profound reluctance at U.S. agencies when requesting formal on-the-record comment about what went wrong with the process. Drug czar Barry McCaffrey's spokesman, Bob Weiner, referred queries to his Pentagon counterpart, Ken Bacon, on the grounds that the planes were military aircraft and "we want to speak with one voice." Bacon, however, was voiceless on the subject. He sent forth underling James Turner, whose only comment was, "It isn't our policy to sell anything to narcotraffickers." The Customs Service's head of press, Bill Anthony, became so enraged that he slammed down the phone. And State, the department that approved the paperwork allowing the aircraft to be sold to Aero Postal? An official in the Office of Defense Trade Controls initially said: "I don't know anything about this." Later, State officials were more forthcoming and confirmed the details of the transfers from T&G to Aero Postal but dismissed as "inaccurate" the suggestion that they did anything wrong in approving the sales. "The system worked perfectly. Nothing slipped through the cracks. We had no reason to decline the applications. There wasn't anything we could have done differently. It isn't our fault if the end-user diverted the planes for illegal purposes." This "we-saw-no-evil" defense is likely to buckle when Congress comes to grips with what happened. After Insight made inquiries on Capitol Hill to determine whether any of the oversight panels had information on the Aero Postal seizures - they didn't -staffers on several congressional committees said they would investigate. One top House GOP investigator rejected State's no-mistakes line as "absurd," adding, "We spend a lot of money on intelligence and it's their job to know." In fact, Washington's fail-safe alarms probably should have gone off within a few months after State approved the sales. In 1994, the DEA revealed in court filings for a major Chicago-based drugs case that Luis Carlos Herrera-Lizcano, a top Cali and Medellen cartel operative, had tried in the mid-1980s to buy mothballed C-130s from the Australian government. The middle man in the deal? According to Australian press accounts it was John Ford III, an attorney and corporate secretary for T&G. Further, this magazine has discovered that Ford dispatched an associate to check out the Australian C-130s. The associate? Frank Battiston-Posada, who in 1991 was the pilot of a Twin Otter aircraft seized by the DEA at Arkansas' Mena airport on suspicion of drugrunning. No charges were filed against Battiston-Posada. The Chicago court filing by the DEA also noted that T&G Aviation pilots at one time flew for Trans Latin Air, a Panamanian airline indicted in the same court case on trafficking charges. Trans Latin was dropped from the indictment by the DEA as it abruptly declared bankruptcy. T&G President Grantham was forthcoming when contacted by Insight. His position? That he can't be held responsible for what Aero Postal did with the planes. "No one can control what happens to a plane after you've sold it," he says. "We dealt with a man who seemed very upstanding, Julian Aparicio. I checked him out with the U.S. Embassy in Mexico City and with the head of civil aviation in Mexico. He appeared to be a very honest man. It can be very hard to know who you are dealing with." Of his pilots flying for Trans Latin, Grantham said in a telephone interview: "We leased a C-130 to them and our pilots flew it in Panama. We know that that C-130 was never used for anything illegal. After every flight it was inspected by Customs and sniffer dogs. There was no sign of drug activity. We worked with U.S. officials down there - it was after [Panamanian dictator] Noriega was kicked out." Grantham confirmed that he nearly leased two other military-surplus C-130s to Aero Postal - their USAF numbers were 560537 and 560487. But the Mexican company decided against the leasing, though their paperwork on the leases is being held by the State Department, sources say. "It is absolutely unbelievable to think that traffickers had that kind of airlift power," says former U.S. Special Forces Maj. Andy Messing, now the head of the National Defense Council Foundation. "Those babies can land on dirt tracks and they have incredible short takeoff and payload-drop capabilities." And thanks to U.S. government agencies, the Arellano Felix family had years to enjoy all of those capabilities.
Agents in Douglas Have Waved It on Through
By Jamie Dettmer
To the casual visitor, Douglas, Ariz., is just a sleepy, unremarkable frontier town - a place to hurry through on the way to or from Mexico. With a population of only 14,000, what could happen of any importance to the nation in this dusty tank town? A lot, apparently. Despite its diminutive size Douglas is figuring prominently in the war against drugs - and not in a way that casts the town in a good light. The Douglas port of entry fast is gaining a reputation of being the most corrupt and inefficient of any of the 38 frontier crossings dotting the Southwest's border with Mexico. And if just a fraction of the stories told by U.S. Customs and Immigration and Naturalization Service, or INS, inspectors "walking the line" are true, then the Douglas crossing represents only a minor inconvenience for Mexican drug traffickers. "Dysfunctional" is the most charitable description one Customs internal affairs, or IA, investigator can muster for a port that during the last four years has seen the successful prosecution of half a dozen U.S. law-enforcement officers for narco-related corruption (see sidebar). Some Customs and INS inspectors at Douglas are seething. "There is open bitterness and disgust being expressed by many of the port staff - including supervisors - in regards to the widespread corruption they believe is going on around here," remarks a veteran Customs officer. Concern also is mounting in Washington about a port that some federal lawmakers fear has spun out of control. Arizona's Republican Sens. John Kyl and John McCain have sent a joint letter to INS Commissioner Doris Meissner asking her to comment on the persistent allegations of corruption among INS and Customs inspectors at Douglas. Meissner was guarded in her reply and trotted out the well-worn refrain other top law-enforcement officials use whenever concern about border graft is raised: Misconduct on the border won't be tolerated. Dissatisfied, Kyl means to hold discussions with U.S. Attorney General Janet Reno to "find out what's going on there." According to Arizona Assistant U.S. Attorney Daniel Knauss, Douglas represents a "severe corruption problem." Speaking in the aftermath of Insight's disclosure in November of federal border-corruption probes in California (see "Megacorruption at the Border," Nov. 11), Knauss told one newspaper: "The entire operation down there [in Douglas] is under scrutiny." As with California, so with Arizona: Open talk about border corruption is not appreciated by those in authority and Knauss, say law-enforcement sources, was slapped down by his boss, the state's U.S. Attorney Janet Napolitano, who called her subordinate on the carpet after receiving a fierce complaint from Customs Commissioner George Weise. Rebecca Even, Napolitano's spokeswoman, now maintains Knauss' comments were taken out of context. She declined an Insight request for an interview with the Tucson, Ariz.-based assistant U.S. attorney. Is there serious corruption at Douglas and, if so, what is the scale of the graft? "It isn't easy to tell," says a veteran Customs IA investigator who was based in Arizona for several years. "When we looked at corruption allegations at the port it was hard to sort out whether the accused were lazy, or dumb-stupid or whether they were receiving something in payment for their actions," he says. "It is difficult to mount undercover IA investigations there - it's a small port, there are complex family ties among the port personnel and with some traffickers and outsiders stick out." But as with other well-placed Customs sources he believes there is enough "smoke to suggest the possibility of a raging fire." Several incidents at Douglas since the late eighties have prompted official and undercover IA probes of senior management at the port and of several inspectors. What particularly has disturbed investigators over the years has been the failure of the port management, led by the facility's director Frank Amarillas, to ensure systematic inspection of border-crossing trucks belonging to suspected traffickers or hauling firms with known ties to drug-smuggling organizations. "There is a pattern here which could be sinister - at best it's sloppy and shows poor leadership," explains a Customs source. The "pattern of failure," as one federal investigator puts it, includes: cIn late 1991, tractor-trailer rigs owned by businessmen once linked with a smuggling organization controlled by Sonoran drug lord Jaime Figueroa-Soto, a convicted trafficker now serving a life sentence in federal prison, were allowed to cross the border at Douglas with only cursory inspection. cIn the early to mid-nineties, hundreds of copper-ore bulk trailers which each day passed through the port's cargo facility in groups of up to 40 were hardly ever searched. It later was suggested in Tucson-based Customs intelligence reports and by confidential informants south of the border that these trucks, some of which were owned by Jose Alberto Salcido, had been shipping large quantities of cocaine for nearly half a decade without interruption. It was Salcido who owned the construction yard in Douglas where the American end of the infamous under-the-border drug tunnel emerged. The tunnel, bankrolled by Mexican drug lord Joaquin Guzman-Loera, was discovered by U.S. law enforcement in the nineties and sealed. Several port sources have told Insight that inspectors attached to the port's Cargo Branch Enforcement Teams were discouraged from "detaining the trucks" by superiors at the port - including Senior Customs Inspector Moses Dominguez who, for much of the period, was the de facto supervisor of the cargo-inspection facility, and by Amarillas himself. cThe same policy was applied to flatbed trailers importing ceramic tiles from the Mexican state of Coahuila, despite the fact that the exporter was a convicted trafficker. Again, according to several Customs sources interviewed by Insight, inspectors were discouraged from detaining the flatbed trailers. On Aug. 20, 1992, a metric ton of cocaine passed through the port hidden in a ceramic-tile shipment. Agents attached to the regional headquarters of Customs' Office of Enforcement, or OE, in Tucson were tipped off about the shipment but decided not to alert port staff. The shipment wasn't detected by any of the inspectors working in the Douglas cargo facility and it went on its way to Tucson where the OE agents seized it and made arrests. According to several port sources, Amarillas was enraged when he learned afterward about the OE operation. Carol Hallet, then-Customs commissioner, equally was angry - but her fury wasn't directed at OE; she wanted to know how such a large load had slipped through Douglas undetected. Both Amarillas and Dominguez have been under IA investigation in the past. Dominguez officially was advised in April 1994 that allegations against him were being probed and the larger-than-life port director, a Douglas native who joined Customs in 1974 as a dog handler, has faced several investigations during his 22-year career. Recently, the port director was the subject of probes into his friendships with known or suspected traffickers, including Raul Enriquez-Romero, a convicted marijuana trafficker whose oldest son, Angel, was indicted in Michigan for trafficking, posted bail and then fled to Agua Prieta, just over the border from Douglas. Amarillas and Enriquez-Romero share an interest, sources say, in restoring vintage cars and the port director and the convicted trafficker often have worked together on such projects. Both Amarillas and Dominguez declined Insight interview requests. But asked by a newspaper last year about his friendships, Amarillas was quoted as saying: "Every place in Douglas you meet people who at one time or another were involved in narcotics. As port director, I have to deal with whoever pays their debt to society." The multiple probes apparently have done little to slow Amarillas' quick rise in Customs and, according to Amarillas, they shouldn't have. He has claimed publicly that investigations against him were triggered by the chitchat of "disgruntled employees" and he insists he's "Mr. Clean" and a stalwart antidrug warrior who deserved his 1989 promotion to the port directorship. Customs inspectors and agents based in Arizona claim Amarillas was a master at using the good ol' boy network to secure promotions. A close friendship with the now California-based Rudy M. Camacho, Customs' Pacific regional commissioner who currently is under investigation by the Treasury Department's inspector general, was responsible for Amarillas landing the director's job at Douglas, they claim. "His appointment was largely due to the personal intervention of Camacho - the two were close when Camacho was an assistant district director in Arizona," an old Customs hand remarks. And the old-boy network persists in Douglas under Amarillas. One Customs inspector talks of a "systematic and long-term pattern of discrimination and retaliation against anyone who doesn't conform to what Amarillas and his management personnel desire." He continues: "They regard the Douglas port of entry as their own private little world or family business, and they resent and fear any outsiders, especially non-Hispanics working in the port." Another inspector says there's a "pattern of blatant favoritism" and that to understand Douglas one has to appreciate the background "atmosphere of nepotism and small-town parochialism." Amarillas has done nothing to end that. "He grooms certain personnel for promotion, especially those who have family ties to him - we nickname them the `golden children.' " The "Douglas culture" - one shared by many Southwest ports - makes it doubly hard for IA investigators to get to the bottom of corruption allegations. Should graft claims be dismissed as the rantings of disaffected rank and file who are jealous of the golden children? Or is there substance to their allegations? Customs' regional press officer, Roger Maier, denied there was graft at Douglas. "There is no evidence of systemic corruption at Douglas," he says. "Our stance is that if anyone has any information they should come forward." *****DOUGLAS PORT OF ENTRY'S HALL OF SHAME***** Customs Inspector Donald Simpson and INS Agent Rudy Molina: found guilty in February 1992 of conspiring to import and distribute 500 kilograms (1,100 pounds) of cocaine. Simpson was sentenced to life imprisonment; Molina received a 30-year term. Assistant U.S. Attorney David Kern said of both men at the time of sentencing: "They weren't guys who are starving and can't feed their families on the border. There was no noble motive involved, just greed." During a search of Simpson's home investigators discovered an assortment of weapons, electronic-eavesdropping devices, topographical maps of the Mexican state of Sonora and southern Arizona - as well as Customs records detailing the entry of vehicles into the United States from Mexico. Customs Inspector Jesus Pacheco: pleaded guilty in April 1993 to one count of conspiring to import marijuana and one count of bribery. He admitted he took $4,000 from Hector Gutierrez-Rivera on July 20, 1992, to allow him to drive a car loaded with marijuana through the port without inspection. A drug-sniffing dog broke up the scam. Pacheco had been employed as a Customs inspector at Douglas for only two weeks - in that time, he confessed, he waved through 13 drug shipments. He also admitted that while working as an INS inspector at the Arizona port of San Luis he facilitated the crossing of 130 drug shipments. Douglas INS Inspector Jesus Teran: arrested in June 1992 on a multi-count indictment. The charges included trafficking, selling immigration documents and bribery. He was a member of a smuggling group located in the Mexican town of Agua Prieta which was responsible for moving 100 tons of marijuana and several tons of cocaine through Douglas. According to one assistant U.S. attorney some of Teran's associates still are working at the Douglas port. Teran pleaded guilty to one count of bribery and is serving a 10-year sentence. INS Inspector Lucy Navarrette: re-signed from INS in February 1995 and is awaiting trial for accepting a $3,000 share of a $20,000 bribe to turn a blind eye to a cocaine load. Navarrette later wore a wire for federal investigators. In a recorded conversation between her and a drug-load organizer, Navarrette was told that several INS and Customs inspectors were working for traffickers. Border Patrol Agent Gary Callahan: received a 27-year term in May 1993 for taking cocaine seized from smugglers and plotting to sell it. Callahan, who was stationed in Cochise County, fled to New Zealand while awaiting trial but was arrested there and extradited several months later. According to trial testimony, the Border Patrol agent participated in a seizure of 418 pounds of cocaine in June 1988 but kept 90 pounds. In court, his brother-in-law testified that from 1985 to 1989 he sold nearly $250,000 worth of marijuana supplied by Callahan. Border Patrol Agent Ronald Blackhues: sentenced to 12 years' imprisonment in October 1992 for his part in smuggling marijuana. He was arrested after investigators unearthed $50,000 in cash at his home. An additional $79,000 was stashed inside a safe-deposit box lodged at a local bank. He confessed that he personally had transported two loads of marijuana and "turned his back" on eight or nine other shipments crossing the border. Border Patrol Agent Jorge Mancha: arrested September 1995 in connection with a seizure of 1,200 pounds of cocaine. He is awaiting trial. - JD
WARS - Insight Drugs Series Shakes Customs Service
By Jamie Dettmer
Enraged U.S. Customs chiefs have launched a major internal-affairs, or IA, probe in California in a bid to identify and possibly prosecute sources who have helped Insight with its ongoing investigative series, "Border Wars." The probe's immediate objective is to find who leaked to Insight and CBS' 60 Minutes a June 1996 memo purportedly signed by Customs' San Diego District Commissioner Rudy M. Camacho that "encourages" inspectors to process "as quickly as possible" border-crossing trucks belonging to a firm owned by the alleged narcotrafficking Zaragoza Fuentes family (see "U.S. Drug Warriors Knock on Heaven's Door," April 21). The IA probe appears to be part of an all-out effort by Customs officials to contain the mounting political fallout from Insight's series and, in particular, to stop a flood of embarrassing leaks that illustrate the ease with which Mexican narcotraffickers use legitimate transport companies to smuggle cocaine and other narcotics across the border and through American ports of entry. It is the third time during the last six months that Customs has attempted to ferret out Insight sources: In November 1996, a former Customs informant was arrested under curious circumstances; in March, IA agents unleashed a witch-hunt in Arizona looking for whistle-blowers who had revealed lax management at the Douglas port of entry (see "Battle for the Border," Dec. 9, 1996, and "Exposed Border Bosses Embarrass U.S. Customs," March 24). Since November Insight has disclosed details of Mexican drug-smuggling operations and narcotics-related bribery probes of U.S. officials along the Southwest border. The magazine also has reported on allegations of serious mismanagement against, among others, Camacho; Jerry Martin, former San Ysidro port director; Art Gilbert, former supervising inspector at San Ysidro, and Frank Amarillas, Douglas port director. As a result of the reports, according to sources, Martin was transferred and Gilbert is fighting attempts to remove him from Customs. The biggest casualty so far came on April 15 when Customs Commissioner George Weise bowed to congressional pressure and announced he will step down this summer. Congressional frustration is unlikely to subside any time soon. Ironically, a truck linked to California Gas Transport, the Zaragoza Fuentes-owned firm that received Camacho's backing in the June memo, was seized at a Mexican Federal Judicial Police checkpoint in the state of Tamaulipas on April 24 after being found to be carrying more than 6 metric tons of cocaine. Mexican officials initially claimed the huge seizure - the biggest by the Mexican police since 1993 - resulted from a routine road check. Later they acknowledged to Notimex, the Mexican press agency, that they have been keeping a closer eye on trucking firms owned by the Zaragoza Fuentes family since the American media focused on the gang. Some U.S. Drug Enforcement Administration, or DEA, sources suspect the seizure may have been what is known in drug circles as a "giveaway." As one of these sources observes, "It strikes me as odd - the truck was a long way from the border. I'm just wondering if the Mexican police needed a load to take the heat off from their political bosses." Further problems loom for Customs. Insight has learned that several Mexican firms owned by known or suspected narcotraffickers are participants in Customs' own Cargo Carrier Initiative Program, or CCIP - a 10-year-old scheme much favored by Weise - alleged to facilitate trade. This program allows approved trucking companies and other import-export businesses to avoid much red tape at U.S. ports of entry. Participants in the program - they are meant to be checked out thoroughly before being accepted - are able to get their trucks through Customs rapidly. In fact, their vehicles generally can skip most inspections. Instead, the trucks and tankers from firms that qualify are given a thorough inspection only three out of every 100 times they cross the border, with a partial inspection 38 of every 100 crossings, according to Customs officials. Critics argue that's not enough and contend that U.S. officials don't conduct thorough background checks of the businesses taking part in this open-portal policy. An informal survey conducted by Insight of the 1996 "approved CCIP signatories" list has found that indeed that may be the case. Seven of the 123 trucking companies approved as CCIP participants are owned by suspected traffickers or money-launderers, according to Customs' own intelligence database, the Treasury and Enforcement Computer System, or TECS. Still other owners are believed by the DEA and other U.S. law-enforcement agencies to be involved in drug smuggling. One company, Pacifica Transportation Inc., owned by Manuel Marin, who is alleged in TECS to be a class-one narcotrafficker, even was the subject of a March 1994 NBC Dateline expos. Despite that, however, Marin's firm appears to have slipped through Customs' checks. Other CCIP-approved owners on the 1996 list suspected by Customs of drug smuggling but not convicted or charged are: * Victor Galan, owner of the Tijuana-based Alfareria Victors, and alleged by Customs and the DEA to be a class-one narcotrafficker and money-launderer. * Gregorio Arroyo Medina, owner of Arroyo's Trucking SA de CV of San Diego, who is listed in TECS as a "class-one narcotics violator." * Ramon Aviles Hirales, the 29-year-old owner of Autotransporte de Carga of Tijuana, who has an extensive Customs intelligence file and is alleged in TECS to be involved in "narcotics smuggling." * Robert Guerra, owner of the San Diego-based G.M.G. Transport, who has been investigated by the Financial Crimes Enforcement Network for money-laundering and categorized by Customs as a "class-one violator general smuggling." Customs inspectors in Calexico also entered a warning in TECS during the late eighties alleging that Guerra had helped narcotraffickers build a landing strip at a ranch near Tecate. * J.B. Gabriel Angulo, owner of Maquilados California, who has a TECS record dating back to 1992, when he first was listed for alleged "involvement in smuggling and money-laundering." The TECS entry on him goes on to claim: "in New Jersey area directly linked with major narco investigations." * Porfirio Armenta Soto, "administrator" for Empacadora Pamasa, another Tijuana trucking company, is the target of an "ongoing investigation" involving money-laundering, according to TECS. The CCIP pass-through program long has been under intense fire from congressional critics. Three years ago Weise reviewed the program and announced he had taken steps to improve the background screening for applicants. But that failed to satisfy lawmakers, including Democratic Sen. Dianne Feinstein of California, who has called for a tightening of the scheme and wants exhaustive intelligence checks conducted on the firms and owners who apply for CCIP. The program - until recently it was called line-release - long ago lost the support of the Customs commissioner who first introduced it during the eighties. William Von Rabb, who served as head of Customs under Presidents Reagan and Bush, began to have misgivings about the program during the debate on the North American Free Trade Agreement. He believes the program has been expanded far too rapidly and that CCIP approvals are proffered in a "cavalier way." "I realize Customs has problems on the border in terms of the volume of traffic coming across - it is a terrible dilemma," he says. "But I think if you are serious about stopping drugs you have to take a harsh look and figure out how you are going to deal with the traffic without the CCIP. Modify it, do something to it, but right now it is a free pass. Customs needs to be much more selective about the companies allowed in. Substantial bonds should be required and there should be many more preconditions for participants." *****THE ROTATION***** For decades U.S. counties along the Southwest border have been notorious for the cozy relations sometimes forged between local lawmen and Mexican smugglers. In Douglas, Ariz., as Insight disclosed earlier this year, Port Director Frank Amarillas enjoys a close personal friendship with a convicted trafficker - the two share a passion for restoring vintage cars. Other Custom officials have frequented Tijuana's Caliente racetrack with suspected traffickers. Such friendships seem, at best, inappropriate. They have added to congressional anxiety about allegations of drug-related graft within Customs. Now, with Customs Commissioner George Weise preparing to depart from the service, lawmakers are beginning to consider policy changes. Some congressmen, including Rep. Jim Kolbe of Arizona, chairman of a House panel that oversees Customs, believe the service should introduce a system requiring inspectors to be rotated regularly between the 38 ports of entry. The DEA has such a policy for its agents. Indeed, Customs agents contract to rotate but rarely do until they reach higher grades. Customs recruits inspectors locally and they are not required to work anywhere other than where they were hired; the majority don't. Former Customs Commissioner William Von Rabb says this is a recipe for temptation - and maybe graft. "Inspectors have relatives, friends and business associates south of the border." Those ties, he believes, can work against inspectors and place them in enticement's way. Weise opposes a rotations policy which would cost $60 million annually. At a recent House hearing he said there was no justification for it, as corruption among border personnel was "isolated." In fact, Weise's opposition was dictated by organized labor's disapproval of the proposal, say senior Customs sources. The National Treasury Employees Union long has opposed rotations - JD
By Jamie Dettmer
He had no doubts. After six hours of intense questioning, Eloy Fernandez-Fernandez, one of the U.S. Customs Service's top confidential informants on the Southwest border, persisted with his story. Asked again to describe every detail of a drug payoff he claimed to have witnessed, the 47-year-old former Mexico federal judicial police officer reeled off the tale he had related earlier during the hot Arizona afternoon. A squat, heavyset man with powerful arms and neck, Fernandez had been through similar debriefings many times. For nearly a decade he had worked undercover for U.S. law-enforcement agencies - first the Immigration and Naturalization Service, then the Drug Enforcement Administration and finally for Customs. Fernandez had been at the center of some of the biggest border-corruption cases ever mounted by Customs and he'd shown great tenacity when dealing with potentially vicious Mexican cartel leaders. On one occasion, after a carefully planned sting operation had gone badly awry, Fernandez had returned to the narcotics traffickers and persuaded them during a tense meeting to use him yet again to navigate, or "load organize," their cocaine through a port of entry and into the United States. To his handlers, Fernandez was pure gold. "Rock steady, always forthright and honest - everything always checked out with him," says one. "Guys like Eloy are always very unusual," remarks another. "We have a lot of informants but they are not of the ilk where they can worm their way right inside. Basically, most of our informants have peripheral knowledge or they're low-echelon players who are only able to supply limited information, and when their drug organization is no longer functioning their value is over. Eloy was of a different order altogether." Now Fernandez was being debriefed not by law-enforcement officers but by Insight. From that interview a series of complex events was triggered that eventually led to Fernandez's arrest - an arrest that raised growing doubts about the integrity of Customs and the Treasury Department's Office of the Inspector General, or OIG. It also has prompted federal lawmakers to raise further questions about Washington's determination to combat alleged drug-related corruption of American law enforcement along the Southwest border. During the interview with Insight in September in a downtown Yuma, Ariz., motel, Fernandez insisted that in the fall of 1992 he had seen Mexican police official Salvador Hirales Barrera bribe Rudy M. Camacho, Customs' Pacific regional commissioner, and Joe Vasquez, a former Customs inspector. The payoff, he said, took place in Tijuana. Through two days of interviews he remained consistent in his retelling of the incident right down to the details of the clothing worn by the alleged coconspirators. Three weeks before Insight's interview, Fernandez told exactly the same story to a California-based investigator for the Treasury Department's OIG, Steve Dimemmo, according to Treasury and Customs sources. Since 1992, Dimemmo has shown an interest in Camacho. He approached Fernandez among others in 1992-93; but at the time, Fernandez says, he had no knowledge of who Camacho was. Later, another source apart from Fernandez - again, a Mexican national - leveled bribery allegations against the Pacific regional commissioner. Dimemmo then recontacted Fernandez in 1996 after hearing he had made bribery accusations against Camacho to a handler. With two people making serious claims against Camacho, Dimemmo initiated a probe in early September. To the fury of the OIG, Alan Bersin, the U.S. attorney in San Diego and U.S. Customs Commissioner George Weise, Insight disclosed the existence of the inquiry into these allegations and also revealed details about separate, ongoing Customs internal-affairs investigations into two other high-ranking West Coast port-of-entry officials, Jerry Martin and Art Gilbert (see "Megacorruption at the Border," Nov. 11). Camacho, Martin and Gilbert were among eight Customs officials subjected to a 17-month probe by the Border Corruption Task Force. No evidence of graft or misconduct was turned up by the FBI-led force which wrapped up its inquiry in August, prompting Bersin, President Clinton's designated "border czar," and Weise to claim a clean bill of health for the U.S. Customs Service. Frustrated with allegations once again being made against Camacho and others along the border, Weise and senior executives at Customs' headquarters in Washington held several discussions about "how to pull the teeth of stories like yours," a Washington-based Customs source tells Insight. "What to do about them became a high priority." In one November meeting, Weise says he saw "the lingering allegations of corruption in our workforce" as a matter of "grave concern," according to an internal Customs E-mail message from Weise. Whether any connection exists between the commissioner's irritation and what befell Fernandez a few days before the presidential election is not clear. What isn't in doubt is that Fernandez's days as an informant came to an abrupt halt. In a move some seasoned Customs and FBI hands insist was a "damage-control operation," Dimemmo arrested Fernandez on Oct. 31 in Yuma, charging him with three counts of making false statements to the U.S. government. The examiner of a polygraph test administered on Oct. 22 by the FBI "concluded that Fernandez was deceptive," and the informant confronted with this "then admitted that he had fabricated the entire allegation," according to a press release issued by Arizona U.S. Attorney Janet Napolitano and distributed by Customs to all 24 land ports of entry along the Southwest border. For Weise, Fernandez's confession clearly concludes the Camacho probe. He says as much in an E-mail message relayed Nov. 13 to all 18,000 Customs employees in which he denounces Insight and bewails the internal Customs talk of border corruption. "Another allegation of corruption - and another case where the allegation was proved groundless," he proclaimed. Weise repeated the sentiment in a fax to Insight. But for Fernandez, his wife, Olivia, and their two teenage daughters the nightmare probably has only just begun. The prosecution, and above all the press release and its wide border distribution have, according to stunned law-enforcement sources, not only finished Fernandez as an undercover operative but endangered his life and placed the lives of his family in grave jeopardy. "The cartels are not stupid and they've long memories. Eloy was already suspected as an informant and during a corruption case a couple of years ago a poster with his photograph and his real and undercover names was put up in Mexicali by Rafael Ayala [a Customs inspector later convicted of drug-related graft] accusing him of snitching," says one of Fernandez's former handlers. "What has happened now fingers him." Another experienced law-enforcement source concurred when asked whether the prosecution and Customs' publicizing of it endangers Fernandez. "Sure, sure," he remarked. "This doesn't make any sense. If he lied, I don't know why they didn't just walk away. With a [confidential informant] you walk away - you always walk away and blackball him. I've never heard of an informant being prosecuted like this. No, they're trying to make an example of him and get at you. Of course, the consequences are devastating - other informants are going to be a lot less trusting of us." What Fernandez thinks about all of this isn't known - his public defender, Sally Duncan, has advised him not to talk to the press and Duncan hasn't returned telephone interview requests. But in the immediate hours after his arrest and in the days following, Fernandez's wife and daughters certainly felt defenseless. In a telephone call to Insight early on Nov. 1, they reported that Fernandez had left home the previous night with Dimemmo for a pre-arranged meeting and not returned. Olivia Fernandez was nonplussed and feared her husband would be dumped south of the border. She was not informed until the afternoon of Nov. 1, and just minutes before an arraignment hearing, that her missing husband had been arrested. The next concrete information about Fernandez came from an unlikely source. On Nov. 4, returning a call from a Customs official who wanted to give the OIG investigator some information, Dimemmo talked about the arrest and commented: "We are going to issue a press release on Nov. 7 that will discredit all these [border-corruption] stories." The Treasury OIG has refused comment on the Dimemmo call or on anything related to the Camacho probe and says all inquiries should be directed to the Arizona U.S. attorney's Phoenix headquarters - which, until it was informed by Insight of the Fernandez case, appeared to be in the dark both about the arrest and planned press release. Did Fernandez lie? His former handlers are split. "Eloy just out-and-out lied," says one. "I hate to say it because you know how highly I think of him." For a year or so the informant, who had fallen out with Customs about another matter, had been "hurting for money," the former handler claims. He also was facing immigration problems - throughout his undercover career he had been kept on a tight immigration leash and given only six-month visas. "If you corner a rat, if an elephant corners a rat, you know what happens. He wasn't making money and I think he thought if he could concoct a story like this everyone would want to talk to him." According to the Arizona U.S. attorney's press release, "Fernandez said he fabricated the statement because he was concerned about his immigration status, was facing imminent exclusion from the United States, and had concluded that by making the false statement to law-enforcement agents he could get them to allow him to remain in the United States to assist in an investigation." But some Customs sources - and congressional investigators - are concerned about this latest twist in Dimemmo's investigation. "This all doesn't make sense to me," another former handler remarks. "Why would he lie? He'd know he'd get caught eventually and then things would go badly for him. A lot of things don't fit. Why did he roll over and admit he lied when the only evidence against him was a polygraph? Defense attorneys run rings round those things, they aren't reliable and Fernandez would know that. It all goes so much against his character." The press release misleadingly compresses the chronology of Fernandez's statements, arrest and confession, says an FBI source close to the Camacho inquiry. The release mentions only one polygraph, while Fernandez apparently took three, and it implies the informant admitted lying on the same day the examiner concluded some of his answers were deceptive. In fact, law-enforcement sources say, he confessed several days later while in custody. Further, one FBI agent maintains that private promises of help with his immigration status and those of his family were mentioned to him during the interrogation. The OIG, the Arizona U.S. attorney's office and Dimemmo all declined Insight interview requests to comment on the claim. There also is no mention in an 11-page Fernandez plea bargain of any offers of immigration help - though Fernandez is promised a light sentence. The only word from Fernandez's family? "He was trapped," says daughter Esmeralda, translating for her mother. For federal lawmakers who long have been disturbed by the tendency for border internal-affairs probes to go nowhere, the Camacho investigation is being seen as possibly fitting into a pattern of botched inquiries. "We are going to monitor this very carefully and, as we move forward next session, obviously border corruption will be a high priority on our radar screen in terms of hearings," says Rep. Bill Zeliff of New Hampshire, outgoing chairman of the House Government Reform and Oversight subcommittee on National Security, International Affairs and Criminal Justice. "I don't want to get into details about this particular case, but these things are going to be among the first we look at." Meanwhile, judging from his Nov. 13 E-mail message to his far-flung staff, Weise is relieved by the Fernandez confession and appears to be using it to explain away all corruption allegations. "We have had similar allegations lodged in the past, including charges against San Ysidro Port Director Jerry Martin and others," he declared. "These were investigated exhaustively i there was simply no basis in fact to the charges made. It is based on these recent incidents that I now feel it is time to say `enough' - our managers and officers have taken enough abuse.i It is obvious that we cannot tolerate smear campaigns against our people." Weise goes on to note: "Most disturbing is the fact that some of these fabricated allegations are coming from our own employees." A senior Washington-based Customs source quipped of the memo: "Do you notice how Weise can't see the word `allegation' without placing `fabricated' or `phony' in front of it? It is a reflex with him. It never ceases to amaze me how we go for the messengers rather than the message." *****OUT OF JAIL FREE***** Officially they are known as bypass cards; among inspectors down at the California ports of entry they're nicknamed the "get-out-of-jail-free cards." When asked about them, a spokeswoman at Customs headquarters in Washington said she had never heard of them, nor had any of her colleagues. In fact, they do exist and some Senate investigators want to know why. Since the late eighties - and apparently without clearance from Washington - district and regional Customs commissioners in California have been distributing border-bypass cards to certain Mexican officials and businessmen to help speed them through border checkpoints. Pacific Regional Commissioner Rudy M. Camacho has continued the practice and on at least one documented occasion a Mexican official in possession of a Camacho-signed laminated yellow bypass card was found to possess cocaine when he passed through the commercial inspection facility at Otay Mesa, according to entries in Customs' enforcement database. Even more disturbingly, the official, Ricardo Gibert, then a Mexican federal prosecutor, already was a "cocaine violator" when he was given the card by Camacho. There were warnings on the Customs database about cars owned by Gibert in advance of his eventual arrest in December 1994. According to Customs sources, Camacho, when he was the port-of-entry director at Calexico in California, also gave a bypass card to a known trafficker who had been arrested for heroin smuggling years earlier by French authorities. "Most of the cards go to law-enforcement officials on one side or another of the border who are involved in liaison work," says a Customs source who defends the practice. "It allows them to go through the commercial inspection facilities which are less busy than the normal ports of entry. If inspectors want to look at them, they still can. When you are working and you have to make that trip across the border twice a day, that can just about kill a day. They're useful." The source adds: "I have seen a partial list and I didn't see anyone Camacho had given one out to that raised my eyebrows." But when told Gibert had had a card the source momentarily was silent and then remarked: "I certainly wouldn't have given him a card. I suppose that is part of the problem. You are talking about 99 percent of Mexican officials being corrupt. If a Mexican police chief comes to you and asks for one you'd give him one, but there would be a high likelihood you were giving a crook a pass." A retired Customs internal-affairs investigator is nonplussed when told about the bypass cards. "You're joking - that's crazy," he says. "Hell, that's like the old courtesy cards cops gave out in the sixties and the cards got them out of tickets. I am amazed they allow that to happen on the border. Is there any legal basis to do that?" A Senate investigator remarks, "This all is very sloppy. We need to look closely at these cards." - JD *****NO ANSWERS***** In attempting to unravel what some Custom sources see as the odd circumstances surrounding the arrest of Eloy Fernandez-Fernandez, Insight attempted to establish who in the Treasury Office of Inspector General cleared the arrest and whether the OIG had discussions about the case with Customs Commissioner George Weise or Alan Bersin, the U.S. attorney in San Diego and the Clinton administration's designated "border czar." Both Weise and Bersin were known to be unhappy with the OIG probe into Customs Pacific Regional Commissioner Rudy M. Camacho, and Bersin's FBI-led border corruption task force also, according to law-enforcement sources, had made life difficult for OIG investigator Steve Dimemmo. According to some sources, the arrest of Fernandez was part of a political game. Insight fired off a series of questions to Inspector General Valerie Lau, including the following: * Who took the decision to make the arrest and who cleared it at OIG? * Were any members of the FBI-led Border Corruption Task Force involved either in the arrest or the decision to make the arrest? * Who was the lead agency in the inquiry - the OIG or the FBI? * Did you have any contact with Bersin before the arrest and regarding the Camacho inquiry? Lau hasn't responded. Insight then faxed 25 questions to Arizona U.S. Attorney Janet Napolitano's spokeswoman, Rebecca Even, including: * Why was there no mention in the press release that Dimemmo first contacted Fernandez? * Did anyone ask the Assistant U.S. Attorney Charles Steele to ensure there was a press release? * How many confidential informants has the Arizona U.S. attorney's office prosecuted in the past? * Were Customs internal-affairs investigators who have handled Fernandez in the past questioned by the OIG or FBI before this case was brought? * Was there any contact between Bersin and the Arizona U.S. attorney's office about the Fernandez case? * Was there any contact between the Arizona U.S. attorney's office and the Treasury OIG? * Is there any agreement between Fernandez and federal authorities regarding either his, his wife's or his daughters' immigration status? At the time of going to press, Insight hadn't received responses from Napolitano's office. - JD
AT THE BORDER
By Jamie Dettmer
During the last four years the war against drugs has taken another distinctly dangerous turn: An American equivalent of the Retreat from Moscow appears to be occurring. Since the early 1990s an estimated 750,000 pounds of cocaine have been smuggled into the United States each year. Heroin abuse is reaching epidemic proportions. New York, Philadelphia and Los Angeles have reported dramatic jumps in heroin use and deaths attributed to the drug. Teen-age drug abuse nationwide- has soared by nearly 200 percent. South of the U.S.-Mexico border, the drug cartels are growing in strength and viciousness - their tentacles reach into every nook and cranny of Mexican politics and law enforcement. Their audacity is not confined to Mexico, nor is their reach. Texas ranchers with land adjacent to the border have testified before Congress recently about how drug traffickers are intimidating them and brazenly using their property for smuggling activities. And allegations are mounting about drug-related corruption of American law-enforcement officers along the border. Slowly, surely and relentlessly, the southern states of America are being drawn into the cocaine economy. According to some U.S. lawmakers, Mexico's narco-traffickers, who are believed to be responsible for 70 percent of the cocaine pouring into America, now constitute a clear and present danger to the national security of the United States. In the first presidential debate of the '96 race, Bill Clinton defended his administration's record on narcotics. He refuted the GOP charge that he has given up on interdiction by trumpeting the work of his drug czar, Barry McCaffrey. He claimed he has "submitted the biggest drug budget ever" and has "dramatically increased control and enforcement at the border." But Clinton's funding figures are disputed by Republican critics - and federal law-enforcement officers - who maintain that his drug strategy has overemphasized treatment for addiction at the expense of interdiction. They point out that Clinton's budget requests consistently have been designed to slash federal interdiction programs and U.S. funding for international and source-country counter-narcotics efforts. Some Democrats also have expressed concern about the thrust of Clinton's drug policy and publicly worried about the president's failure to use the bully pulpit of the White House to send out the old Reagan message of "Just Say No." The president's FBI director, Louis Freeh, and Drug Enforcement Administration, or DEA, head, Tom Constantine, have been critical of the direction of drug policy and, in an April 1995 memo - the full text of which the White House refuses to release - outlined what they see as failings in Clinton's strategy, drawing particular attention to the administration's neglect of interdiction. In an interview during the summer with editors of Insight and the Washington Times, McCaffrey, a retired Army major general, admitted that the administration had, for the first two years, taken its eye off drugs. Drawn by the importance of the issue and prompted by our readers, Insight has set out to discover how the war on drugs is being waged now at its sharpest point - on the front lines at the southwest border. In a series of investigative articles to be published during the next few months, we will try to pierce the fog of this war and show through a series of snapshots the larger picture of what the war on drugs is like for the foot soldiers - for U.S. Customs Service inspectors and Border Patrol officers, for DEA agents and for those police officers and prosecutors battling corruption and narcotics on both sides of the 2,000-mile frontier. Specifically, the series will: * Explain why the foot soldiers believe the battle for the border is lost; * Review what steps can be taken to turn the tide, such as a drug summit with the heads of federal law-enforcement agencies; * Reveal the nature, structure and modes of operation of the Mexican drug cartels; * Identify the narco-traffickers' battle order for control of the border; and * Provide a Who's Who of the drug kingpins and their lieutenants. Some of the information we have gleaned is virtually raw intelligence, such as details about a Mexican ranch close to Arizona that is used for cocaine smuggling by Amado Carillo Fuentes, Mexico's top narco-trafficker. Other information comes from eyewitnesses, documents and interviews with dozens of inspectors, agents and internal-affairs officers of the various federal agencies involved in the war on drugs. We begin our examination with a review of the health of U.S. law enforcement along the 2,000-mile Southwest border. Between San Diego and Brownsville, Texas, for example, there are 24 ports of entry, or POEs, operated by the U.S. Customs Service. Few of these are untainted by allegations of drug-related graft. The crossings in California and Arizona are particularly notorious - with California's San Ysidro and Calexico and Arizona's Douglas and Nogales mentioned most frequently. In 1994, Customs failed to seize any cocaine at the POE in Nogales. At Calexico, a Customs intelligence analyst estimates that 8 to 15 percent of the inspectors and supervisors there are in league with drug-smugglers. CORRUPTION FROM WITHIN? Amid election-year rhetoric about the administration shying away from getting tough on the "bad guys," Insight reveals that three senior Customs officials, including the Pacific regional commissioner, Rudy M. Camacho, are the targets of federal public-corruption probes. Then there is an eye-opening account from one witness about a meeting south of the border in which a U.S. Customs official allegedly received a $200,000 payoff from a Mexican customs chief with ties to that country's narco-terrorist cartels. To help put such anecdotes about alleged corruption into perspective, we must go back six years to a highly successful drug bust - the largest cocaine seizure ever at a U.S. land port of entry. That bust - about which much has been written but little that places it in the larger context of why America is losing the battle against drugs - led to a federal grand-jury investigation in California into eight senior Customs officials. Although none of the eight were charged by the grand jury, three of them, less than two months later, again face new and high-level scrutiny for some of the same allegations of wrongdoing. Camacho is one of the three. U.S. Customs Commissioner George Weise, along with U.S. Attorney Alan Bersin, who led the now-dismissed California grand jury, have declined repeated requests for interviews about the latest high-level federal probes into some of the same people Weise and Bersin both claimed were exonerated fully along with the Customs Service. IS U.S. LAW ENFORCEMENT FOR SALE? In 1990, a House subcommittee chaired by the late Georgia Rep. Doug Bernard asked that same hard question when investigating allegations of widespread graft within Customs. "You know, when you dare ask whether American officials may be in the pay of the cartels, all hell breaks loose in Washington," says Tom Stromenski, a former aide who assisted in the 1990-91 House investigation. "We were never allowed to follow through on our investigation - Customs got its friends on Capitol Hill to stop us," he says. No final report was issued on the House inquiry. Bernard's decision not to seek reelection because of bypass surgery and opposition to the inquiry by some congressmen prevented a final report from being written. Nonetheless, the transcripts of three days of hearings and assorted other materials were published. In the last few years there've been a smattering of prosecutions of U.S. law-enforcement officials along the border. This year, two Customs inspectors in El Paso, Texas - Eduardo Ontiveros and Jose de Jesus Ramos - were convicted of conspiring to allow smugglers to bring in more than 2,000 pounds of cocaine. This year also, California-based Immigration and Naturalization Service inspector Arthur Garcia was convicted of conspiracy to import and distribute cocaine. A Customs inspector, Francisco Mejia, a 16-year veteran, also was found guilty on related charges. Both men had been helping the cartels for more than a decade and were involved in an extensive smuggling operation that used signals, cellular phones and spotters to coordinate drug-load drivers and direct them to crooked port inspectors. But, according to one Customs intelligence analyst, these recent convictions are merely the "mosquitoes floating around in a cow pat." "We've lost control of the border, that's the plain truth," says a former senior Customs internal-affairs officer. Phil Jordan, who recently retired from Customs and once worked at the El Paso Intelligence Center, or EPIC, says: "The unfortunate part of my time at EPIC was to see an increase in the number of reports about the corruption of American law-enforcement agencies. It was very disturbing. Warnings about the rise in corruption were in every report we sent to Washington. Customs was clearly the worst, but there are also problems in the Immigration and Naturalization Service and the Border Patrol." EPIC is an information-sharing facility jointly run by U.S. law enforcement and intelligence agencies. For years, Washington has denounced the widespread corruption of government officials and police in Colombia and Mexico. The Mexican Federal Judicial Police, or FJP, is considered by many to be an arm of the cartels. Last summer, when drug kingpin Hector Palma was arrested by an army unit in Guadalajara, it was discovered that most of his machine-gun-toting bodyguards were members of the FJP. The Clinton administration has put pressure on Mexico's president, Ernesto Zedillo Ponce de Leon, to abide by his inaugural pledge and mount a serious "renovacion moral" or anticorruption campaign (see news alert! Oct. 22). Republican and some Democratic lawmakers have added their weight and demanded Mexico be denied U.S. aid in the fight against drugs until Zedillo makes progress in cleaning house. Maybe the United States is in need of some housecleaning too? NO SURPRISES. From California to Florida and all points in between, the phrase "something is wrong" crops up time and again. And along with this chorus from worried federal, state and local law-enforcement officers who daily put their lives on the line, there also arises a litany of questions such as: Why are turf battles between the federal agencies allowed to continue to the detriment of the war on drugs? Why are internal-affairs investigations into corruption blocked, interfered with or swept under the carpet? Why are whistle-blowers in federal agencies who report corruption treated so badly? Why are U.S. intelligence agencies allowed to run illegal narcotics and money-laundering operations on American soil without proper authority and coordination? Why? Indeed, why is the Clinton administration (or, for that matter, previous administrations) afraid to call a summit of all 95 U.S. attorneys and the heads of each of the federal antidrug agencies and order them to quit the infighting and start taking back the streets of America? In short, where are the Eliot Nesses? Such questions, posed mainly by the front-line soldiers and Washington insiders who do not come forward because of fear of retribution, are not easy to answer. Perhaps incompetence, lack of political will and budgetary constraints all play a part in holding back America's efforts to fight the scourge of drugs. Egos obviously get in the way, and personalities and ambitions clash. But one answer comes through loud and clear from the federal inspectors and agents: Washington lacks a sense of urgency about the scale of the problems and doesn't appreciate how bad it really is down at the border. Some of the problems predate the Clinton administration. But many officials commenting to Insight over a three-month period agree on one point: It has become far worse in the last four years. "The administration is in a state of denial," says an Arizona inspector. "No doubt about it, the administration has contributed to the problem by being soft on drugs. The biggest dope dealers drive around town in the biggest Lincoln Town Cars. Everyone knows who and what they are, and nothing happens to them, and finally the inspectors say, `To hell with it - everybody else is getting rich, why shouldn't I get rich too?'" Regardless of location, and seemingly notwithstanding party affiliation, Weise also came in for sharp criticism along the border. "Every time the Democrats get into office we get some kind of weak-kneed businessman" as the commissioner, remarks a senior Customs officer. "I don't think Weise is interested in drug interdiction. He's just concerned about facilitating the movement of traffic across the border. He's the invisible man. This is the type of person the Democrats put in as head of law-enforcement agencies. It is a little like the Federal Aviation Administration - is it there to promote the airline industry or police it? We have the same thing in Customs. I see more and more people coming in who say, `Our job is to work with business and facilitate the flow of vehicles.'" Meanwhile, the heads of the federal law-enforcement agencies trot out the seizure figures and declare progress. In congressional testimony to a House Banking subcommittee in September, Weise trumpeted Customs accomplishments in facing up to the "monumental challenge" of policing the U.S.-Mexico border and noted that the service's drug-seizure rate along the Southwest frontier increased by 17 percent in 1995 over the previous year. CLEAR AND PRESENT DANGER? What was not revealed by Weise, as far as can be determined, was an internal policy at the Customs Service - shared at least one time at a high-level regional meeting in Florida earlier in the year - that seizures in the Southeast quadrant of the country would be reduced by up to 70 percent and, as one participant explained, credit for some of those seizures "moved to the southwest border." Also not reported by Weise has been a policy to reduce funding for fuel, particularly in the Southeast, for airplanes and boats. "In just the last two years," claims a senior Customs official, "fuel budgets have been cut almost 43 percent This means we're grounded - as in, we can't send planes up or launch the boats. What kind of signal do you think that sends to the bad guys?" Also, disturbingly, the 1996 seizure figures show nearly 50 percent of all heroin has been seized in the Southeast, not the Southwest, where major amounts of money and manpower have been diverted as a matter of "political policy," according to a second high-ranking Customs officials. "Why do you think they're `cooking the books?'" the official claims. "It's to make the Southwest region look like we're tough on the bad guys in some important states for the president." Interestingly, even though Clinton has vowed a war on drugs in the Southwest and named Bersin his drug czar for the region, cocaine and heroin seizures have remained roughly static during the last four to five years. "What's that tell you about what's going on?" one of the two senior Customs officials asks. "What it tells me is that something stinks." It reminds many of scenes from Tom Clancy's novel, Clear and Present Danger. To Rep. Brian Bilbray, a California Republican elected in 1994, the message from the front lines is that the battle for the border is being lost, that it's a frontier out of control. Bilbray, whose home is one mile from the border, put it like this: "Every time I leave my family and fly to Washington, I'm afraid for them." And he's not alone. So, too, are the federal and local law-enforcement officers who no longer even trust their comrades in arms. It is here, then, beginning in California, that the series starts. It is not intended to be a slur against honest federal law-enforcement officers or the officials with whom they serve in agencies charged with a difficult task. Fighting the illegal-drug trade is hard and dangerous. Lives often are on the line. The financial temptations to turn a blind eye or pull a shakedown are great. And the enemy is well-financed. As with the major Nigerian heroin ring that was broken up recently in the Northeast by an alert Customs inspector at JFK International Airport, there are successes. And there are many heroes. We will report these stories, too. CALIFORNIA DREAMIN.' twas a crisp, clear, early morning and Snag started to bark as he came within smelling distance of a huge Mexican propane tanker. The dog's handler, U.S. Customs officer Jeff Weitzman, had started his shift 10 minutes early at the Otay Mesa commercial inspection station 10 miles south of San Diego. Those minutes turned out to be crucial. If the 27-year-old New Yorker had begun his work that October 1990 morning exactly on time he never would have made the bust of his Customs career - the biggest cocaine seizure, in fact, ever recorded at an American land POE. The facts of what occurred after Snag, a pit bull and Labrador mix, set off the alarm long have been disputed - within the U.S. Customs Service, occasionally in the press and more recently before a grand jury. According to Weitzman, he met strong protests from on-duty supervisor Art Gilbert whom, he claims, tried to persuade him nothing was wrong with the tanker and not to search it. But eventually an inspection occurred and nearly four tons - almost 8,000 pounds - of coke was discovered wrapped in plastic bin liners. The value, based on the street price of cocaine, was about $260 million. It should have been a moment of pure celebration in the war against drugs. The bad guys had lost a significant shipment. And, indeed, there was public backslapping. But there were few cheers behind the scenes. The seizure spelled nothing but trouble for Customs. Snag's bark triggered the start of a long-running hue and cry that has led to persistent questions about senior Customs figures in California, including Rudy M. Camacho, the Pacific regional commissioner who, Insight has discovered, is the subject of a corruption probe by the Treasury Department's Office of the Inspector General. Weitzman and many of his Customs colleagues found Gilbert's alleged obstruction that morning bewildering and highly suspicious. Some of them remain adamant that the circumstances of the seizure were part of a pattern that had disturbed them for some time. Shortly before the cocaine-filled tanker rumbled across the border a computer warning alerting U.S. ports of entry that the tanker could be connected to drug trafficking mysteriously was deleted from the Customs Service's main information and intelligence database, the Treasury Enforcement Communications System, or TECS. It has not been determined why and by whom. That deletion wasn't an isolated event. For months, Customs inspectors had noticed other odd removals from TECS of important intelligence information and warnings. Some inspectors, including Mike Horner and Terry Kapella, told congressional investigators they were prevented from putting intelligence from their informants into the database. Among the superiors they blamed? Art Gilbert. There also was widespread and growing concern about the fraternizing of senior officials with known or suspected traffickers and felons. Much of this behind-the-scenes criticism centered on District Commissioner Alan Rappaport, who raised eyebrows by making frequent late-night trips to Tijuana. His friendship with Jorge Hank Rhon, a part-owner of the Caliente racetrack in Tijuana and the son of billionaire Mexican politician Carlos Hank Gonzalez, also drew outrage. Like his father, Hank has been linked in U.S. intelligence documents with money laundering, though both men have denied any ties to narco-trafficking. Rappaport's friendship with convicted tax fraudster Johnny Alessio also struck many inspectors as inappropriate. Weitzman complained to his immediate canine-enforcement bosses about Gilbert's reluctance to search the propane tanker, but no internal-affairs investigation of the events of the morning of Oct. 3, 1990, was mounted. That is, until four years later, when a newly formed FBI-led border-corruption task force was charged by U.S. Attorney Bersin with probing Weitzman's bust as part of a major investigation into an array of graft and misconduct allegations against not only Gilbert but seven other Customs officials. The main conduit for the allegations was Horner - who, after resigning from the service in 1991, constantly claimed that corruption was rampant at California's five POEs. His charges eventually prompted calls for a thorough probe from two of the state's federal lawmakers, Democratic Sen. Dianne Feinstein and Bilbray. The border-corruption task force was set up in response by Weise and Attorney General Janet Reno. In August, no indictments were offered up by a San Diego grand jury against any of the officials, who included Camacho; Rappaport, now a member of the San Diego Crime Commission; Jerry Martin, the current San Ysidro port director; and Rex Applegate, the current district director; and Gilbert. Bersin, who is Reno's designated "border czar," and Weise were delighted. They chose to interpret the lack of indictments as evidence that all is well with U.S. law enforcement along the border. Bersin immediately issued a statement dismissing as "rumor, innuendo, speculation and half-truths" all talk of systemic or widespread corruption along the border. And Weise, in an E-mail message to all 18,000 Customs employees, declared: "We have been through a long and difficult ordeal together We have had to bite our tongues while others made wild and baseless accusations attacking our integrity Now we can put this painful episode behind us." But Weise appears to have been premature in thinking a neat line could be drawn and that a mere failure to act by the grand jury would clear the air. Minutes after the commissioner's "good-news" message, Weitzman fired off an E-mail reply: "If I'm a liar then come get me, but don't challenge my integrity." The dog handler isn't alone in reacting angrily to both the grand-jury inaction and Bersin's carte-blanche declaration that there is no widespread border corruption. "If he continues to de-emphasize corruption, an awful lot of people in the ports of entry get the message that no one cares about graft," remarks one internal-affairs, or IA, investigator. "And we have a hell of a problem already. Just because he says the grand jury didn't find anything against those eight doesn't mean that corruption is going to cease along the border." It also doesn't mean that the cases the grand jury considered are completely closed, either. Customs and Treasury Department sources say that three of the Customs officials the San Diego jury scrutinized, including Gilbert, once again are under federal investigation. * Customs IA investigators are examining an alleged relationship between Gilbert and convicted drug trafficker Jose Samuel Gomez Chaidez. During one three-week period, 207 telephone calls were made to Gomez from Gilbert's home phone, according to telephone toll records Insight has seen. When questioned by FBI agents working on the earlier grand-jury investigation, Gilbert said he knew nothing about the calls and claimed someone else had made them, say law-enforcement sources. He now also is being investigated for allegedly permitting a Mexican customs official to return to Mexico after being stopped on the border while driving a stolen Ford Explorer. Gilbert declined interview requests. * Jerry Martin, the director of the sprawling San Ysidro port of entry just north of Tijuana - the world's busiest border crossing - also is under investigation by Customs internal affairs for allegedly freeing a Mexican official who was caught driving drunk on the American side of the frontier. U.S. Customs spokeswoman Bobbie Cassidy said that Martin is not prepared to be interviewed on the subject. * The Treasury Department's Office of the Inspector General, or OIG, and the multi-agency Southwest border task force are in preliminary stages of separate bribery and corruption probes into Camacho. An OIG spokesman says he "could neither confirm nor deny" that an inquiry into the Pacific regional commissioner was ongoing. But Customs sources say that the new investigations into Camacho have been triggered by a set of allegations that began to trickle out shortly before the Bersin grand jury wrapped up its inquiry. Two whistle-blowers have been questioned by OIG investigators led by Steve Dimemmo. The task force's probe is being headed by FBI special agent Gregg Harmon. On behalf of Camacho, Cassidy turned down a request for a phone interview. Why more investigations after Bersin announced all is fine with the service on the border? "It is hard to conclude anything but that the task force didn't do its job," said one of several IA investigators. "I believe [the corruption task force] went into it not wanting to find anything," another IA man said. "The G-men picked up boxes of material they didn't even look at. The will just wasn't there." In fact, sources said no indictment recommendations were made to the grand jury by Bersin, who declined an interview to discuss the grand-jury case, as did Weise. The official line is that much of the talk among inspectors and other internal critics can be attributed to animosity among disgruntled employees who have not been happy in their jobs. "You should look at the record of the people who continue to make claims in the face of the fact that past Customs internal investigations have turned up negative and past Treasury inspector general's investigations have turned up negative," says Cassidy. One of those painted by authorities as a disgruntled former employee is Horner, who has become the bet noire of Customs. He first incurred the wrath of his superiors when he claimed that during the time he worked at the California crossings at San Ysidro, Otay Mesa and Tecate, information he put into Customs computers about specific suspect vehicles was deleted. He maintains his effort to prompt an internal-affairs inquiry led to retaliation from his bosses and his eventual resignation. Horner, a small, wiry man with bright eyes, now earns a living as a caretaker for a private school in San Diego. He has become the front man for information of border misconduct Customs officers want publicized. "They don't want to get hit by going public, so they contact me," he explains in his tiny, document-strewn workroom off the family's small kitchen. Outside, blue-uniformed teenagers scream and shout their way through a break. Drawing on a Marlboro, Horner says he first started to think that some local Customs supervisors might be in collusion with the cartels when he passed on a tip from an informant about a tanker truck and nothing happened. He gave his superiors the license-plate numbers and the company name. The tanker twice crossed the border without being stopped, he says. In all, 78 Horner-placed warnings disappeared from TECS, according to evidence Insight has seen. Even more disturbing, Horner says that he was ordered by a superior to provide the names of his informants. A few days later one of those men turned up dead south of the border. As far as Customs officially is concerned, Horner's allegations are stale stuff - endlessly repeated and investigated and found wanting. But some senior Customs officials admitted off the record that not enough has been done to probe them thoroughly. "More attention has gone into vilifying Mike Horner than there has been in investigating his allegations," says one. "They just wish he'd keep his mouth shut. I think he is rapidly tiring of this. It is costing him money and he doesn't have much money. And why should he go on with the crusade? He is trying to bring people's attention to things that, at best, have the appearance of corruption. It's the old story of let's kill the messenger. Every year it gets worse. Whenever anyone stands up they're dismissed as disgruntled employees. Anyone who comes forward has their head handed to them." *****WITNESS TO A PAYOFF***** This is an eyewitness account of a meeting that allegedly took place in the main Mexican customs office in Tijuana between a current high-ranking U.S. Customs official, a retired U.S. Customs inspector and the then-head of Mexican customs in Tijuana, Salvador Hirales Barrera. Hirales went on to become the Federal Judicial Police chief in Tijuana, only to be fired because of suspected ties with drug traffickers. [Insight knows the identities of all alleged to have been present - and so do U.S. federal authorities.] "My reasons for being in that office I have somewhat camouflaged. Salvador Hirales was doing his thing on his desk and I was doing my small things at another desk. When I see him open a drawer on the right of his desk, he opened the second drawer. He pulls out four bundles the thickness of these two books. I am about 6 feet away. I could clearly see the $100 bills up. Each bundle is about 2 inches thick; four bundles about 8 inches thick. Hirales then pulled out a leather case, brownish in color and I saw him put the bundles in. It filled the case pretty much. In comes Mr. X. He was retired U.S. Customs, and another individual about the same height - about 5-feet-9 or 10. The commandante moves from behind his desk and embraces first one and then the other. He goes back to his desk and he takes the case and hands it over to the individual whose name I didn't know then. And the commandante says, "Here's your shaving kit." The guy looks at it and squeezes it and passes it over to [the Customs official] and he does the same thing. At this point the commandante looks at me without saying a word - I know he wants me to leave and I know I want to get out of there. I didn't want to be in the conversation. He looked at me and I put what I was doing away and say `con permiso, excuse me, I'm leaving.'" - JD *****BORDER CULTURE***** As with every law-enforcement agency, the whole culture at Customs frowns on those who break ranks. The service is a small one - some would say claustrophobic - and everyone knows everyone else. Inspectors are recruited locally and seldom are rotated outside their state. That is part of the problem, say Customs internal-affairs investigators. The ports of entry often are under the sway of "homeboys" who have grown up with each other and have strong personal ties. They also often have relatives - in some cases, second wives - on the other side of the border. "Let me give you an indication of how it operates," explains a Customs source. "Take Calexico. That's a homeboy port. It is dominated by what's called the Mexican mafia. Half of them have families over in Mexico. Some of them even have wives and marriages on both sides. If you're an inspector and your cousin's kid comes through and he has a load of weed or coke on him - now, if you snag that kid, you are going to be on the shit list - your family's shit list. What are you going to do? You gonna look the other way. And it's the same when you see an inspector you've known for years being dirty." "There is a coziness that develops," says William Von Rabb, a former Customs commissioner. "Some people have talked about the Republic of the Rio Grande. There is a culture there running some 50 to 100 miles either side of the border in which people have more in common as border people than they do as Mexicans or Americans. They have relatives, business associates and friends and what have you. That friendliness if you are a Customs inspector can work against you, particularly if you are not in an environment of tough law enforcement. Other people read the same signs, people on the other side of the border can see whether their pals who work for Customs are really aggressively enforcing the drugs laws or not. They are much less reluctant to approach them to say, `Look, a friend of mine is coming through. Do me a favor, let them through,' if they see they aren't." Despite past congressional criticism, job-promotion procedures are anarchic: Local managers have considerable administrative leeway in their fiefdoms, thereby allowing them to reward those they like and impede "troublemakers" from scaling the ladder - a further deterrent against whistle-blowing. According to a 20-year veteran of the service, many of Customs' problems stem from "the politics of being promoted." He adds: "It's a barter system. You owe people favors who promoted you, and how do you pay them back? By backing them up and turning a blind eye." And the financial temptations for "doing the dirty" are great. Inspectors earn about $30,000 a year. The cartels virtually have a menu list of payoffs for crooked Customs officials: Wave through a cocaine-filled car and the fee is a prompt $50,000 in cash. An 18-wheeler truck eased through will earn a cool $250,000. "It is hard to compete against that kind of financial muscle," complains an internal-affairs investigator. - JD