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July 11, 1997, Friday
Section: Foreign Desk

Mexico and Drugs: Was U.S. Napping?


By TIM GOLDEN

Early last year, a handful of senior American officials in Washington received an alarming secret intelligence report on Mexico. It was on its face, officials said, the sort of document that can force policy makers to change the way they think about a country or a region.

In a matter of just weeks, the National Security Agency reported, Mexican drug traffickers had laundered some $6 billion in illicit profits through their country's financial system. The spy agency based its conclusion on an elaborate surveillance of the contacts between drug gangs and their business associates.


Almost immediately, State Department officials delivered an angry protest to the Mexican Ambassador over the apparently vast breach in his country's defenses against drug trafficking.

Then, however, American officials' outrage gave way to chagrin.

The agency, they realized, was asserting that Mexico had taken in a flood of dollars nearly equal to its entire foreign investment that year without any discernible impact on its economy. ''It just couldn't have happened,'' one official said. And he added, ''You have to ask: 'Which reports am I supposed to believe?' ''

An examination by The New York Times, based on scores of interviews and a review of classified documents, indicates that the agency's discredited assessment was by no means an isolated lapse in the annals of United States intelligence on drugs and corruption in Mexico.

Rather, as the United States weighed momentous decisions about Mexico in the 1990's -- from the North American Free Trade Agreement to the $12.5-billion bailout of the Mexican economy after a currency crisis -- American policy makers were blindsided by some important developments, misinformed about others and inattentive to many more.

After insisting for years that Mexican corruption was an old affliction being cured by a new generation of political leaders, senior American officials have begun to acknowledge that the growing power and influence of Mexico's drug traffickers have led to a law-enforcement crisis so deep that it threatens the stability of a country that shares almost 2,000 miles of border with the United States.

Yet a good deal of the information upon which that conclusion is based had languished in the files of American law-enforcement agents and intelligence officers for years, officials said. Only rarely did such intelligence command the time of senior policy makers.

Even less frequently did it prompt them to take any action. ''A lot of this information has been out there, in the bowels of the system,'' said Donald F. Ferrarone, who, before his recent retirement as head of the Drug Enforcement Administration's field office in Houston, oversaw investigations that dealt closely with the political protection of Mexican drug traffickers. ''But it has been ignored, because people don't want to believe it, the extent and degree of corruption.''

Allegations over almost two years of drug-related corruption in the inner circle of former President Carlos Salinas de Gortari have forced American officials to rethink the issue. The governing party's loss of control of the lower house of Congress in mid-term elections last week now raises the possibility that Mexican legislators will examine more closely than the ever the misdeeds of the ruling elite.

In recent weeks, senior Clinton Administration officials have begun to plot a wholesale reorganization of the Federal Government's drug-intelligence apparatus. Officials said the overhaul will seek to pool some information that is now tightly held by different agencies, disseminate important material more quickly, and thin out a vast intelligence bureaucracy in which different offices perform similar work.

But many officials argued that the failures of American intelligence on Mexico are even deeper and more serious than policy makers have acknowledged. And the problems, by all accounts, have been as much ones of demand as of supply.

Law-enforcement agents who worked in and on Mexico while Mr. Salinas was a prized ally of the United States said they were often discouraged by political pressure to keep the drug issue from jeopardizing improvements in the economic relationship between the two countries. At crucial moments, they asserted, intelligence struggled with policy and policy won.

For their part, many officials in Washington said they could not help but grow skeptical of the intelligence after being deluged with vague, uncorroborated informants' reports and analysis that was either so thin on evidence or so carefully hedged as to be of little use.

At the height of such problems, during the American debate over the free-trade accord that was approved in November, 1993, Mexico's strategic importance to the United States came into focus as never before. The personal reputations and political strength of Mexican leaders became central questions of American foreign policy.

Yet in the case of Mr. Salinas's influential elder brother, Raul, American investigators did little more than file away allegations that he was not only taking kickbacks on government contracts but cutting deals with cocaine traffickers, officials familiar with the reports said. Drug-enforcement agents said they dropped an inquiry into telephone calls by drug traffickers to the Mexican President's offices after they had trouble figuring out whom the traffickers had called.

American officials so thoroughly failed to share information on Carlos Salinas's Deputy Attorney General, Mario Ruiz Massieu, that three different agencies raised questions about his conduct without ever hearing of Customs Service reports that suitcase after suitcase of cash had been deposited in Mr. Ruiz Massieu's account in a Texas bank.

Nearly a year after Mr. Salinas left the presidency, a secret Central Intelligence Agency assessment of his own reported misconduct argued that at the least, his hands-on governing style made it ''unlikely that he had no knowledge of his brother's affairs or the shady dealings of other close associates.''

But while a fuller understanding of the drug traffickers' penetration of Mexican politics may await the outcome of criminal investigations that now extend from San Diego to Switzerland, the revelations of wrongdoing have already contributed to a reordering of United States policy.

In a recent interview, the newly departed American Ambassador to Mexico, James R. Jones, recalled his arrival here four years ago. His priorities were to manage trade, promote investment and push for more democratic politics. Then, the list began to change.

''The majority of my time,'' he said in May, as he prepared to leave the country, ''is now spent on administration-of-justice issues, corruption and narcotics trafficking.''


The Background
The Old Priorities: Trade and Politics

As Carlos Salinas took office at the end of 1988, the perspective of United States officials could hardly have been more different.

The Drug Enforcement Agency and the C.I.A. had traced a growing traffic in drugs through Mexico since the mid-1980's, when the United States began to increase pressure on Colombian smuggling routes through the Caribbean. But through the early 1990's, officials said, American experts remained convinced that Mexican traffickers had nothing close to the financial clout or political influence of their Colombian partners.

American officials also drew a sharp distinction between the young, American-trained technocrats whom Mr. Salinas brought to power and the more experienced, conservative -- and corrupt -- politicians whom he appointed in areas like law enforcement, national security and the ruling Institutional Revolutionary Party.

At the start of his six-year term, Mr. Salinas seemed to attack drug trafficking with a new zeal. Having been told by the Bush Administration that the problem could obstruct closer economic ties, Mr. Salinas ordered the seizure of more drug shipments, the eradication of more drug crops, and the capture of a powerful drug trafficker, Miguel Angel Felix Gallardo.

John D. Negroponte, the United States Ambassador to Mexico from 1989 to 1993, gave voice to the prevailing optimism.

In a confidential memorandum to law-enforcement officials at the embassy, Mr. Negroponte hailed Mr. Salinas's early steps as ''clear proof that Mexico is interested in meaningful cooperation with the United States to reduce this flow of drugs.''

In a recent interview, he recalled: ''I don't think we ever doubted Salinas's personal integrity. He was a very disciplined guy. He always wore that Casio sports watch. He worked like hell.''

Several law-enforcement officials who served at the embassy were more skeptical. But they said they also had trouble making their case when the drug problem, like other sources of friction between the two countries, was supposed to be ''managed'' so as not to threaten growing investment and trade.

As United States law enforcement officials had untangled a Mexican cover-up of the 1985 assassination of an American drug-enforcement agent, Enrique S. Camarena, many became convinced that drug corruption reached the highest levels of the Mexican Government. They believed that unless that system was dismantled, drug interdiction efforts were condemned to futility.

Now, American agents were being told to simply do the best they could.

''There was a sense that Mexico was a place that we were just going to have to deal with in the shape that it was in,'' said Matthew J. Maher, a veteran of the Camarena investigation who served as the Drug Enforcement Administration's international-operations chief until 1994. ''The only questions you asked were whom you could deal with and how far you could go. It was a matter of finding a path through the minefield.''

Moves toward the trade agreement increased contacts between the two Governments geometrically. But that only reinforced Washington's belief that a new political day had dawned in Mexico.

''Every American official who came through there met with the Mexicans involved with Nafta,'' Mr. Negroponte said. ''That was the prism through which the American Government was looking at the Mexican Government. We certainly felt that the reformers were in the ascendancy.''

Those bright, English-speaking officials seemed to sustain an American faith: that the more Mexico opened up to competition, the more its Government would have to scale back its economic role -- and the less chance Mexican officials would have to demand bribes in return for waiving rules or awarding contracts.

Drugs figured little in the equation. But just as Mr. Salinas embraced a trade deal with the United States, the scope of Mexican trafficking began to change as well.

Colombian cocaine producers had already made Mexico their main route to the thriving American market. Then Mexican traffickers, who had been working for fees of $1,000 or $2,000 for every kilogram of cocaine they smuggled, began to demand their cut in kind.

The economics were simple: by taking their payment in cocaine and greatly expanding their distribution network, especially in the western United States, the Mexicans began to increase their profits between 5 and 10 times, officials said. And as the value of their smuggling routes rose, so did their payments for protection to politicians, judges, prosecutors and the police.

New trade regulations began opening the already porous border even more. But drug-intelligence officials said it would still take several years before the implications of this change -- and the threat it posed to Mexican security -- were fully grasped by American policy makers.


The Warnings
Little Response To Early Reports

While Carlos Salinas was being celebrated in Washington and on Wall Street as the man who might lead Mexico into the developed world, American officials began hearing a very different picture of his inner circle from a source they knew well.

In 1991, a Mexican Federal police commander who had carried out sensitive operations for both Salinas brothers came forward with some startling, specific allegations. The commander, Guillermo Gonzalez Calderoni, spoke to officials from the Drug Enforcement Administration, the Federal Bureau of Investigation and a United States Attorney's office in Texas. And he told of drug payoffs and dirty political tricks at the highest levels of Government.

By 1993 at the latest, American officials said, Mr. Gonzalez Calderoni had told them that Luis Medrano, a close associate of one of Mexico's biggest drug traffickers, had told him of paying Raul Salinas two years earlier to help their trafficking group acquire two seaports that the Government was planning to sell to private investors.

American officials who dealt with the case said Mr. Gonzalez Calderoni's claims were strongly debated within Federal law-enforcement agencies because he was widely thought to have had his own corrupt ties to Mr. Medrano's boss, Juan Garcia Abrego, and because Mexico had unsuccessfully sought his extradition.

None of what Mr. Gonzalez Calderoni had to say fit readily into any active drug investigations, the officials said. None of it, without further confirmation, was enough to open a new inquiry into drug-related corruption. So in the end, they said, his reports were simply filed away.

''I don't think he was ever looked at as being a serious witness in corruption cases,'' one former official familiar with the debriefings said. ''Back in 1993, it was very unpopular to say anything against Mexico, basically because of Nafta. Who was going to go and do a direct investigation against the President's brother? You just put it away, and it goes into the batter.''

The Information
Charges Abounded; Evidence Was Scanty

Eventually, Mr. Gonzalez Calderoni's allegations circulated throughout the Government. The C.I.A., in particular, viewed him as a less than compelling source. One official said he came to personify, one official says, ''the difficulty of getting hard, reasonably credible information on these kinds of allegations.''

Several other knowledgeable officials put the C.I.A.'s struggle with Mexican corruption in a different light. Throughout the first half of the decade, they said, the agency that is supposed to be the primary source of information for American policy makers about internal workings of foreign governments spent relatively little time trying to verify the sort of charges that people like Mr. Gonzalez Calderoni made.

The C.I.A. station in Mexico City has generally been the agency's most important in Latin America. But former American intelligence officials said that during the latter half of the cold war -- when the city was a hub of Soviet espionage, a crucial base for Cuban agents and the common sanctuary for leftist Central American guerrilla groups -- turning a blind eye to the drug-related corruption in the Mexican internal-security apparatus was often a condition for securing its assistance.

The quid pro quo became evident as early as 1982, after Federal prosecutors in San Diego indicted the chief of Mexico's internal-security force on charges of helping to run a huge car-theft ring. The prosecutors promptly received a cable from the United States Embassy in Mexico City telling them to desist; the Mexican official, Miguel Nazar Haro, was an ''essential contact'' of the C.I.A. station there. Mr. Nazar Haro remains a fugitive from prosecution in the United States and his whereabouts are unknown.

Mexico is one of two dozen foreign nations where the agency is authorized by a 1986 Presidential decision directive to conduct covert anti-drug operations, intelligence officials said. One official said it is also among the handful of nations where the C.I.A. has even broader authority under a top-secret appendix to the Presidential order.

Yet until recently, several officials said, C.I.A. officers in Mexico have been far less active against the drug and corruption problems than their counterparts in Colombia, who trained elite anti-drug forces and guided operations against the leaders of the Medellin and Cali cocaine cartels.

''In Colombia, you had the agency pushing and clamoring and trying to get in on it,'' said a retired American official who worked in both countries. ''In Mexico, you had to go down there and try to get them jump-started. They were not focused on drugs. And a lot of the D.E.A. guys there didn't want them involved anyway.''

Mexico has also been something of a stepchild to the secret coordinating group that has orchestrated the increasingly cooperative efforts of United States law-enforcement, intelligence and military agencies in the Andes, officials said.

The existence of the panel, called the Linear Committee, has not been previously disclosed. But officials describe it as an unusually successful collaboration directed by the C.I.A.'s Counternarcotics Center and the Drug Enforcement Administration to find weak points in the linear chain of cocaine production and distribution.

Until late 1995, several officials who have sat in on its deliberations said, the Linear Committee's priorities were very much in the Andes. Only after most of the main Cali cartel leaders had surrendered or been arrested did it turn more intently to the major Mexican traffickers.

Some officials said that shift has already shown some results. Last year, the committee helped coordinate the pursuit of Jose Luis Pereira, the principal contact between the jailed Cali cocaine baron Miguel Rodriguez Orejuela and a powerful Mexican drug trafficker, Amado Carrillo Fuentes, whom Mexican officials confirmed today had died after plastic surgery last week to change his appearance.

Mr. Pereira, a Bolivian known by the code name Jota, was captured by the Mexican Army after a lengthy surveillance of his safe houses by the C.I.A., officials said. He was then deported home on a plane that stopped in Miami, where Federal agents were waiting for him. He pleaded not guilty and is now standing trial on Federal drug charges.

The Blind Spot
Signs of Trouble Got Little Attention

United States officials explain some of the lapses of intelligence efforts in Mexico by noting that probably nowhere else abroad do American officials deal with a more complicated mesh of economic interests, national-security concerns, law-enforcement problems and domestic political considerations.

But many officials also attributed some of the shortcomings to a chronic inattention by American policy makers.

In the months surrounding the agreement's approval in November 1993, officials said, few policy makers even noted reports by the Defense Intelligence Agency indicating that a shadowy armed group appeared to be active in the southern Mexican state of Chiapas.

Similarly, though some finance and intelligence officials were concerned in late 1994 about the overvaluation of Mexico's peso, C.I.A. analysts decided not to issue a warning about the problem just a few days before the currency collapsed, according to intelligence officials. At the State Department, copies of an intelligence report titled ''A Peso Problem'' sat mostly unread on the shelves.

''We have had, historically, a great deal of information from down there, but nobody wanted to look at it, because they didn't know what to do,'' said former Senator Dennis DeConcini, the Arizona Democrat who was chairman of the Senate Select Committee on Intelligence until the end of 1994.

''They were afraid of how bad it might be, and how they would be able to justify the economic policies,''said Mr. DeConcini, who, at his own request, received regular briefings on Mexico from the C.I.A.

Senior officials who dealt with Mexico under the Bush and Clinton Administrations said it was far easier to get the National Security Adviser or Secretary of State to focus on a short-term problem like Haiti's elections than to devote 20 minutes to a question of Mexico's long-term stability.

In early 1995, for instance, a powerful group of Deputy Secretaries ordered a far-reaching assessment of Mexico's turmoil and its implications for American policy. It was typical, officials said, that this effort was eventually forgotten, and the study never completed.

Nor have United States officials had much success in acting to stop Mexican corruption, even in the rare instances when they have had information they considered solid enough to act on.

One such case, in 1992, began when American drug-enforcement agents in El Paso raided the home of a mid-level cocaine trafficker and happened upon a fascinating video cassette.

Several officials who saw it said the tape showed the trafficker, his wife or girlfriend and several associates cheerfully shooting off automatic weapons with a friend in military fatigues. The friend turned out to be a Mexican Army general, Javier Escobedo.

When the video cassette reached the United States Embassy in Mexico City, Mr. Negroponte, the Ambassador, saw it as an unusual opportunity and he immediately delivered a copy to Mexico's Defense Minister.

After being confronted with the evidence by his superiors, however, General Escobedo chose neither to turn informant nor face a court martial. Instead, the officials said, he drove to the grave of his father, who had also been an army general, and shot himself to death.

The circumstances of his suicide were never disclosed.

The Alarm
Growing Turmoil South of the Border

In the fall of 1994, as Washington's Mexico specialists tried to make sense of a guerrilla uprising, a tumultuous presidential election campaign and the assassination of two major ruling-party political figures, many of them began to take the corruption problem more seriously.

So did many Mexicans. Ernesto Zedillo, who was elected President that August, pledged to clean up the country's judicial system, and Mr. Jones, the Ambassador, offered information that he said might help the new Government keep out corurupt officials.

Diplomats at the embassy saw the exchange of information as a unique opportunity to deal with the problem. But by the way it was handled, the episode seemed to demonstrate American ambivalence about the issue once again.

Mr. Jones asked several of the embassy's senior law-enforcement and intelligence officials to draw up a list of current and former Mexican officials who they thought should have no place in the upper ranks of an honest new regime.

The list they produced -- a copy of which was obtained by a reporter and confirmed in its contents by three knowledgeable American officials -- catalogues a much wider presumption of corruption at the senior levels of the Salinas Administration than United States officials have ever acknowledged publicly.

Among its 18 names are those of a former Interior Minister, a former Defense Secretary, and a former Attorney General; three officials who had been in charge of anti-drug efforts, Mr. Salinas's former national security chief and his former drug intelligence chief. It also includes several veterans of the Federal Security Directorate, the state-security force that collaborated closely with the C.I.A. until it was disbanded in 1985.

Those officials who could be contacted by a reporter uniformly denied having ever done anything wrong and said they had no idea that they had been included on the American blacklist.

In any case, United States officials did not press the point. Mr. Jones sent the list without first clearing the action with the State Department or White House. He later described it as a mere ''exchange of information.'' A second list of about 30 lower-ranking Mexicans, against whom the embassy officials felt they had weaker evidence, was never sent at all.

A senior American official said at the time that the list had been a great success because none of those it named were allowed into Mr. Zedillo's Government.

But that does not appear to be true. Among those on the list is Wilfredo Robledo, a senior operations official at Mexico's national-security agency, the Center for Investigations and National Security. Mexican officials who work with Mr. Robledo said he remains on the job and in good standing.

Officials at the center and the Interior Ministry, which controls the center, did not respond to telephone calls asking for comment.

The Bureaucracy
American Agencies Locked in Turf Battles

American law-enforcement and intelligence officials said one of their basic problems in understanding the growing political influence of Mexican drug traffickers stemmed from the failure of government agencies to share information.

While law-enforcement agents are building their cases, their practice is to guard what they know as closely as possible. After it comes out in court, they say, they generally have little time to try to evaluate the strategic significance of the information they have gathered.

C.I.A. analysts who want to borrow such files often have to go to another agency's offices to read them. Often as not, policy makers are the last to find out what law enforcement officials already know.

''There is an impenetrable firewall,'' one State Department official said, ''between what U.S. attorneys are doing and what the policy side of the house knows.''

Rarely, however, has the system appeared so uncommunicative as in the case of Mr. Ruiz Massieu, a Deputy Attorney General who was both a close aide to Carlos Salinas and a brother of a leading politician said to have been killed on the orders of Raul Salinas.

American officials began to suspect Mr. Ruiz Massieu of corruption after Mr. Garcia Abrego, the trafficker, escaped just ahead of a 1993 raid to which he was apparently tipped off.

That December, Mr. Ruiz Masseiu opened a bank account in Houston. A few months later, his closest aide began arriving there with suitcases and boxes stuffed with hundreds of thousands of dollars in cash.

Customs agents in Texas recorded shipments that would eventually leave more than $9 million in the bank. But even after a suspicious bank officer called them to inquire about the money, Customs officials said, the agents did not investigate further.

''Their sense was that there was something wrong there,'' the head of the Customs Service's financial investigations division, Alan Doody, said of the agents in Houston. ''But the realization came pretty quickly that this guy was part of the ruling elite. There was a whiff that something wasn't right. But in order to do something about it, you need more than a whiff.''

In Mexico City and Washington, other American law-enforcement officials were getting more. Some informants told of large gifts to Mr. Ruiz Massieu and his wife. Others described a huge smuggling case in which Mr. Ruiz Massieu and his deputy exonerated corrupt Mexican police agents. The success of Mexican anti-drug operations plummetted.

Even then, officials said, Customs, F.B.I. and drug-enforcement officials shared little information about the case. Senior officials in Washington and Mexico learned of Mr. Ruiz Massieu's Texas deposits only after he was arrested at Newark International Airport as he tried to flee to Europe in March 1995.

When word of Mr. Ruiz Massieu's fortune reached the American Embassy in Mexico City, Mr. Jones assembled law-enforcement and intelligence officers in ''the bubble,'' a secure room adjoining his office. He asked what evidence they might contribute to the case on Mr. Ruiz Massieu's apparent corruption.

''All of our great minds said they didn't have any evidence against him,'' one official at the meeting recalled.

The Mexicans
Political Rivals Traded Graft Charges

In explaining their belated apprehension of the traffickers' connections to the Salinas Administration, law-enforcement and intelligence officials make an insistent point: Mexican political tradition dictates absolute loyalty until a president steps down. The airing of corruption allegations almost always comes later.

Mr. Zedillo appeared to underscore that point as he began his term. Within little more than three months after he took office, Raul Salinas was arrested on murder charges, Mario Ruiz Massieu was accused of taking bribes from drug traffickers, and Carlos Salinas was forced into exile, his reputation in shreds.

As Mexico was being rocked by those tremors, American officials took inventory of the corruption allegations they had against leading members of the Mexican elite.

Perhaps the most comprehensive such search was ordered by senior law-enforcement officials in March 1995, as Republicans in Congress fought Mr. Clinton's plan to rescue the Mexican economy.

The review turned up all kinds of accusations, officials said, none of them entirely convincing.

''There was just no smoking gun,'' said Robert Nieves, who joined the search as the Drug Enforcement Administration's chief of international operations. ''That doesn't mean that it wasn't meaningful. But you couldn't go to court with that information.''

How deeply American agencies dug into such matters is unclear. Several officials who read much of the C.I.A.'s reporting on Mexican corruption between 1992 and 1995 said the reports rarely indicated that intelligence officers had done any significant investigation of the claims of their informants.

United States law-enforcement officials who were stationed in Mexico City said they had little choice but to look skeptically at the allegations they heard.

Within the Mexican police and security apparatus, they said, leaking negative information about one's political enemies to American officials was a basic weapon of bureaucratic struggle.

''Now, all of that information is almost 100 percent,'' said a former law-enforcement official who processed some of the most explosive accusations against Mexican officials, politicians and businessmen. ''But at the time, we had to ask ourselves, 'Is it possible that it goes this high up?' We were afraid to write it up sometimes because we thought people would say we were crazy.''

The Fiasco
A General's Arrest Humiliates U.S.

More recently, even as events in Mexico have forced the Clinton Administration to reassess drug trafficking and corruption here,, American intelligence efforts have continued to run into problems. The fall last February of Mexico's drug-enforcement chief was a case in point.

The official, Gen. Jesus Gutierrez Rebollo, was arrested on charges of working for Mr. Carillo Fuentes, the powerful cocaine trafficker who apparently died last week at a Mexico City clinic. Eight days earlier, the bald, rock-jawed Mexican officer had stood at attention in Washington as the White House drug-policy chief, Gen. Barry R. McCaffrey, described him as ''an honest man and a no-nonsense field commander.''

As commander of a five-state military region that has its headquarters in the western city of Guadalajara, General Gutierrez Rebollo had been credited with the capture of one major cocaine trafficker in 1995, the arrest of another last August and the seizure of a plane loaded with millions of dollars in drug profits in between. The prevailing view, said a White House official who reviewed background information about the general from the Central Intelligence Agency and the Defense Intelligence Agency, was that he was ''a soldier's soldier.''

That no other army commander had taken remotely so much initiative in the fight against drug trafficking did not stir much doubt among experts who assessed his appointment for the two intelligence agencies and the Drug Enforcement Administration. Rather, according to several officials familiar with their reports and briefings, the intelligence analysts appeared to take their main cues from American drug-enforcement agents stationed in Guadalajara. The agents, who had dealt with the general on several cases, thought he was all business.

Some of the analysts did note that General Gutierrez Rebollo had managed to avoid the regular rotations to which other commanders were subjected. But officials said that their reports and briefings raised no particular alarm that he had remained for more than six years in Guadalajara, the Beirut of Mexico's drug underworld.

It is an established pattern of Mexican corruption that successful police commanders sell protection to one trafficking group while attacking others. But it went unnoticed among drug-intelligence analysts, officials said, that General Gutierrez Rebollo had been vigorously attacking the Tijuana-based drug gang run by the Arellano Felix brothers while virtually ignoring their rival, Mr. Carrillo Fuentes.

Had United States officials queried senior Mexican law-enforcement officials, they might have confirmed that the general had balked at turning over suspected associates of the Arellano Felix gang whom his officers had captured, tortured and held incommunicado.

Had they asked officials in Guadalajara, they would have heard about serious allegations of misconduct against a close aide whom General Gutierrez Rebollo had placed as head of the state police. After the state government dismissed the aide, the general hired him back as chief of investigations at Mexico's drug enforcement agency.

''He was showing results,'' said one American official who dealt with General Gutierrez Rebollo. ''His methods were overlooked.''

By the time of his arrest in February, American drug enforcement officials had heard from several informants who questioned the general's honesty. The reports were not vigorously pursued, officials said.

Since the Gutierrez Rebollo episode, officials said, the C.I.A. has instituted a new system to warn of such problems.

Every biography the agency's analysts produce on a Mexican official now includes a caveat: just because no negative information has turned up does not mean that the official can necessarily be trusted.

The Solutions
Structural Changes Encounter Resistance

By late 1995, the new Director of Central Intelligence, John M. Deutch, was sufficiently dissatisfied with the agency's reporting on Mexico that he ordered intelligence officers and analysts to redouble their efforts.

Mr. Deutch, who lived briefly in the Mexican city of Cuernavaca as a boy, took over the post with the Clinton Administration still feeling the sting of Congressional and public anger over the peso crisis. Officials said he included Mexico for the first time on the list of strategic priorities for the C.I.A. He asked his officers to focus on the stability of Mr. Zedillo's Government and the threats it faced from both drug corruption and guerrillas.

Nearly two years later, the White House's drug-policy chief, General McCaffrey, suggested that the problems of intelligence on Mexico are still far from solved.

Fresh from his own embarrassment with the fall of General Gutierrez Rebollo, General McCaffrey said in an interview that he has begun an effort to create ''a newly defined architecture'' for the myriad agencies that collect information to support anti-drug efforts.

General McCaffrey said the goal of the redesign will be to establish new ''roles and missions and a hierarchy'' for such agencies as the Drug-Enforcement Administration's El Paso Intelligence Center, the C.I.A.'s Counternarcotics Center in Langley, Va., the Treasury Department's Financial Crimes Enforcement Network outside Washington, and the National Drug Intelligence Center in Johnstown, Pa.

''We need to make sure that this extraordinary amount of information that we've got supports real-world people involved in drug interdiction better than it does now,'' he said.

General McCaffrey said he had briefed the Secretaries of State, Defense, Justice and Treasury on the idea, described it to the Congressional intelligence committees, and gotten the acting Director of Central Intelligence, George J. Tenet, to join him in leading a study group that is to design a new structure by this fall.

But other officials said there is already strong opposition to the idea, particularly in the Justice and Treasury Departments. Some officials in those agencies said they were concerned about protecting sensitive or confidential information, such as the details of continuing investigations or income-tax returns. Other officials said that to pool any of their information would be to cede power.

''Call me when it happens,'' one senior official said. ''Something like that might work in the military, but those guys don't fight like they do in Washington.''



Organizations mentioned in this article:

Related Terms:
Intelligence Services; Drug Abuse and Traffic; Politics and Government; United States International Relations; Mexico-International Relations-US; Reform and Reorganization


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