MEXICAN DRUG LORDS SEEKING NEW CARTEL

Sources Detail Meeting Of 5 Major Groups

APODACA, Mexico -- Wearing business suits and cowboy boots, they flew in on
private jets, landed at several airports and took a short drive to this
northern Mexican town in a fleet of brand-new SUVs.

They were Mexico's drug lords, who control most of the drugs smuggled
across the border to the United States. Along with them came their
bodyguards, various associates and their contacts in government. Sixty men
in all, they gathered in a restaurant, drawing the notice of local people
as well as police in nearby Monterrey.

A participant in the three-day meeting, as well as associates of the
smugglers, government officials and others familiar with the drug trade,
gave independent accounts of the summit, speaking on condition of
anonymity. Their descriptions differed slightly in detail but agreed on the
central purpose of the meeting: to join forces after 12 years of bloody
turf wars and form a new cartel that would unite operations and cut costs.

The alliance has been in the works for three years, but was made urgent by
a tough line from Mexico's new president, Vicente Fox; by a court decision
making it easier to extradite drug smugglers to the United States; and by a
proposed U.S.-Mexico crackdown on money laundering, according to government
insiders as well as associates of the smugglers.

Although nobody has a good estimate of how much money flows to Mexico from
drug smuggling, the White House estimates that about half of the $65
billion worth of illegal drugs that Americans buy each year comes through
Mexico. By any estimate, drug trafficking is one of Mexico's top sources of
income, rivaling the top legal industries of oil, tourism and assembly for
export.

The industry is so pervasive that it has corrupted law enforcement from top
to bottom. Police assigned to drug duty are routinely arrested for
collaborating with the smugglers. In 1997, Mexico's newly appointed drug
chief, Gen. Jesus Gutierrez Rebollo, was jailed after investigators
discovered he was on the payroll of a drug trafficker.

The last major drug cartel in Mexico collapsed in 1989 when its longtime
boss, Miguel Angel Felix Gallardo, was arrested. The new alliance would end
the war of succession that has killed hundreds of people. It would mean a
major shift in the drug trade in the Western Hemisphere, creating a
syndicate better equipped to evade law enforcement.

Rafael Macedo de la Concha, Fox's new attorney general, said his agents
investigated tips about such a meeting and found no evidence that it had
occurred. The U.S. Drug Enforcement Administration declined to comment.

But the sources said the meeting took place Jan. 26-28 around a long wooden
table in a restaurant's back room, with a picture window offering a garden
view. Screened off from the main dining area, participants talked as
waiters in tuxedos served steaks, roast goat and dried beef soup, a
regional specialty.

According to the accounts, the guest list read like a who's who of Mexican
drug smugglers:

• Juan Esparragosa Moreno, who Mexican authorities say is a veteran drug
boss known as El Azul for his dark, almost blue-toned skin, and other heirs
of the late Amado Carrillo Fuentes, aka the Lord of the Skies, including
Ramon Alcides Magana, a former policeman known as El Metro, who authorities
say saved the life of Carrillo Fuentes's son and became a close confidant.
They represented the Juarez drug-smuggling organization, which operates
along Mexico's Caribbean coast, central Mexico and the West Texas border.

• Humberto Garcia Abrego, accused by Mexican authorities of running the
Gulf drug gang of his brother Juan, who is serving 11 life sentences in a
U.S. prison for drug smuggling. The Gulf gang operates along Mexico's Gulf
of Mexico coast.

• Ignacio "Nacho" Coronel, reputed leader of the Colima gang, which
operates in the Pacific coast state of Colima and along the far eastern
border with Texas.

• Ismael "El Mayo" Zambada, wanted by Mexican authorities, and
representatives of Joaquin "El Chapo" Guzman, who recently escaped from a
Mexican maximum-security prison in a laundry bin. The two men reputedly
work in a semi-independent but coordinated manner along Mexico's Pacific
coast and north to the Arizona border.

• Gilberto Valdes, a businessman who sources said represents smugglers in
the southern state of Chiapas.

• Two men in military uniforms with generals' stars, to whom the others
referred as "representatives of the attorney general's office," the
participant and associates said. Also present, they said, was a group of
Colombians acting as consultants.

These five major drug-smuggling groups make up a new cartel, not yet named,
which encompasses many smaller gangs, the sources said. The only major
group to decline the invitation to the meeting was that of the
Tijuana-based Arellano Felix brothers, who run the bloodiest organization,
all the sources said.

Analysts who study the drug trade confirmed an apparent alliance, although
they did not know about the meeting. Macedo, the attorney general, said his
office asked nearby residents about any unusual movements at the time but
was told nobody had seen anything strange. "It's all speculation," he said.

However, Eduardo Valle, a former drug official at the attorney general's
office, said colleagues told him there was "a lot of movement" in the
agency's office in Monterrey, just a few miles from Apodaca, at the time of
the meeting. He said he did not know why, but added: "Certainly something
major was happening."

The associates said the smugglers opened their books to one another,
discussed how much each paid in bribes and shared contacts, informants and
the names of corrupt officials. According to the insiders, the participants
agreed that members of the new cartel would -- for now at least -- respect
one another's territory and devise a joint strategy for selling drugs
within Mexico and exporting them to the United States.

They decided to pool their bribes in one larger payment to each corrupt
official and the generals agreed to accept the new form of payment, the
sources said. Also, they said, the traffickers agreed to more meetings to
strengthen their new cartel.

Associated Press writer Niko Price in Mexico City contributed to this report.