OBAMA TARGETS MEXICAN CARTELS

Sanctions Imposed; U.S. Firms Warned

President Obama yesterday ratcheted up efforts to curb the flow of
drugs and guns across the southern border, imposing financial
sanctions against three of the most violent Mexican drug cartels and
threatening to prosecute Americans who do business with them.

On the eve of his summit with Mexican President Felipe Calderon
today, Obama added the cartels to the list of banned foreign "drug
kingpins," a move that empowers the federal government to seize their
assets, estimated to be in the billions of dollars. It also allows
the government to seek criminal penalties against U.S. firms or
individuals who provide weapons, launder money, or transport drugs or
cash for the organizations.

By targeting the cartels -- Sinaloa, Los Zetas and La Familia
Michoacana -- the administration expanded its support for Calderon's
crackdown on the narco-traffickers, an effort that has provoked a
violent backlash and led to tens of thousands of deaths in the past two years.

The Obama administration accelerated what is normally a year-long
effort to add names to the banned list. The government did not
identify assets held by the three cartels, but authorities have
estimated that, each year, $19 billion to $39 billion in drug
proceeds flows south from the United States.

The financial sanctions provide an additional tool against the
organizations, whose drug and gun trafficking has proved exceedingly
difficult to curtail. Mexico, for example, has seized more than
35,000 firearms from narco-traffickers since December 2006, and both
governments say 90 percent originated in the United States.

The effort to curb the southbound flow of what some have called an
"iron river of guns" has faced heavy obstacles, including limited
resources, relatively open access to firearms and political
opposition to tighter gun regulation.

Even if the supply of U.S. guns were cut off, as long as the flow of
money to the cartels continues, they could rearm by buying from other
countries, including those in Eastern Europe or Central America,
where surplus weapons from conflicts in the 1980s remain, analysts said.

"It's convenient for the cartels to be able to shop in Arizona, New
Mexico, Texas and elsewhere," said George W. Grayson, a Mexico
scholar at the College of William & Mary and author of the monograph
"Mexico's Struggle With 'Drugs and Thugs.' " But stopping the U.S.
trade, he said, would merely place "a thorn in the side of the
cartels, rather than an AK-47 in the heart."

Since 2000, 78 drug kingpin groups and individuals have been
blacklisted by the U.S. government, along with nearly 500 others who
have supported them. The law has been used most extensively against
Colombian drug traffickers, particularly the Cali cartel.

A Treasury Department official said its office of foreign assets
control is working with other agencies to identify cartel assets, but
the official described a much broader net of potential liability.
Anyone who knowingly deals with a cartel representative or provides
goods, services or other support can face penalties, the official
said, including money launderers, front companies and other
facilitators. That could include banks and other financial
institutions, gun dealers, money-transfer companies, and transportation firms.

"If you are a Mexican company buying or receiving weapons for a
cartel, you can be designated," the official said. "If you are the
U.S. person selling or transporting those weapons to the cartel or
any [other] designated targets, you can be fined civilly and
criminally prosecuted, or both."

Julie L. Myers, a former Justice Department official who led
Immigration and Customs Enforcement until last fall, said kingpin
designations have been powerful tools against Colombian drug cartels,
in some cases persuading defendants to agree to plea deals to protect
family assets.

However, Myers said, the tactic works only if specific assets owned
by the cartels, such as property, are pinpointed.

"If there's no assets [identified], it's an important symbolic
gesture, but it's kind of an empty threat," she said.

Dennis Lormel, former chief of the FBI's financial crimes and
terrorist financing sections, and now an executive with the
consulting firm Ipsa International, said the move creates a
significant deterrent for U.S. companies, which will "really have to
look over their shoulders" if they do business with a cartel.

In the administration's ongoing display of attention to border
issues, Homeland Security Secretary Janet Napolitano and deputy
national security adviser John O. Brennan traveled yesterday to
Texas, New Mexico and Arizona.

Obama has committed to speeding up a three-year, $1.4 billion
countertrafficking aid program for Mexico; announced plans last month
to send 450 more federal agents, equipment and other resources to the
border; and last week asked for $350 million as part of a
supplemental war-funding bill to support border efforts.

Under U.S. prodding, Mexico is submitting more seized guns for
tracing to determine where they were purchased. Also, the United
States and Mexico have agreed to share a database of ballistics
information that will help track weapons.

But Calderon has pressed for more action, specifically citing
weaknesses in U.S. gun laws and enforcement.

His government sees a "direct correlation" between a surge in the
seizures of U.S. guns in Mexico and the 2004 expiration of a U.S. ban
on assault weapons, said Arturo Sarukhan, the Mexican ambassador to
the United States.

Sarukhan has urged the U.S. government to enforce laws against
selling guns to individuals who intend to export them to Mexico,
particularly military-style assault rifles and high-caliber weapons
that have fueled drug-related violence.

He has also proposed that the Obama administration reinstitute a ban
on importing assault weapons that was lifted by President George W.
Bush in 2001, tighten restrictions on .50-caliber rifles and give "a
more prominent role along the border" to law enforcement agencies
such as the Bureau of Alcohol, Tobacco, Firearms and Explosives;
Immigration and Customs Enforcement; and Customs and Border Protection.

"Most of the assault weapons are coming from the United States,"
Sarukhan told CBS's "Face the Nation" on Sunday. "The key issue right
now is, how can the United States help to shut down those guns and
shut down that bulk cash that is providing the drug syndicates in
Mexico with the wherewithal to corrupt, to bribe, to kill?"