NUEVO LAREDO HANDCUFFED BY DRUG TRADE

Traffickers Imposing Will In Border Town

NUEVO LAREDO, Mexico - The evening calm here is deceiving. As dusk
settles, folks gather and mill around the town square, as they do in
town squares throughout Mexico. But soon the talk turns to the latest
deadly incident, this week's ambush of a federal congressman, which
left him seriously injured and his 31-year-old driver dead. And the
inevitable question arises: Is it too late to save Nuevo Laredo? "You
look around here, and nothing seems real anymore," said Mari Moreno,
whose sons live in Irving. "You do your best to get through the day,
but you know this city will never be normal again."

More than three years after warring drug cartels launched a battle
for Nuevo Laredo and its smuggling routes into Texas, senior U.S. law
enforcement officials say the Gulf cartel and its enforcers, the
Zetas, have established significant control over the beleaguered city.

In the past year, 700 small- and medium-sized businesses shut down in
Nuevo Laredo, and about 40 of the city's top business leaders have
set up shop across the border in Laredo, according to the Mexican
city's Downtown Merchant and Business Association, headed by Jacobo
Suneson, owner of Marti's, a legendary shopping place.

Nuevo Laredo is a city under siege, with no police chief 11 months
after the last one quit, citing stress. His predecessor had been
gunned down within hours of taking the job.

The drug traffickers have threatened local reporters, warning them
away from coverage of their activities. They have broken cameras
being used to shoot video at crime scenes.

Some residents have begun using walkie-talkies rather than cellphones
in an attempt to avoid the heavy surveillance that law enforcement
officials say the cartel places on routine movements and
communication. U.S. officials say there's evidence that the Zetas are
steadily pushing their influence westward toward Monterrey, a center
of Mexican industry, cementing their network of human intelligence in
the border states of Nuevo Leon and Tamaulipas. These states are
gateways for smuggling drugs into Texas and on to cities such as
Chicago, New York City and Miami. 'They operate on fear' To finance
their criminal activities, the traffickers are kidnapping Mexicans
and Americans in rising numbers, a U.S. official said, and have
earned themselves a new nickname: narco secuestradores, or narco
kidnappers. "They operate on fear," said a U.S. law enforcement
official, speaking on condition of anonymity, adding the Gulf cartel
has gained the upper hand in the region over the competing Sinaloa
cartel, led by Joaquin "El Chapo" Guzman. "They're simply more
disciplined, have better intelligence, better training and proven to
be far more effective at recruiting than Chapo's army," the official said.

A congressional report issued this year by the subcommittee on
investigations of the Committee on Homeland Security said that "the
Texas-Mexico border has been experiencing an alarming rise in the
level of criminal cartel activity."

The report, "A Line In the Sand: Confronting the Threat at The
Southwest Border" added that "these criminal organizations and
networks are highly sophisticated and organized, operating with
military style weapons and technology, utilizing counter surveillance
techniques and acting aggressively against both law enforcement and
competitors." On Sunday, under the orders of President Felipe
Calderon, an estimated 3,300 troops were deployed to the two states
to restore order. Mr. Calderon, who came into office Dec. 1, quickly
sent a strong signal when he deployed troops to his home state of
Michoacan and to Tijuana to fight drug traffickers. Federal troops
and police have now been sent to eight of the country's 31 states.

The task remains daunting. This week, an assistant state prosecutor
for the state of Durango, Hugo Resendiz Martinez, was fired from his
post for allegedly passing sensitive criminal information to the
Sinaloa cartel. He has been detained and is also under investigation
in connection with killings, the attorney general's office said.

Hours after the troops arrived in Nuevo Laredo, Horacio Garza, a
federal congressman and two-time mayor of the city, was shot as he
and his driver headed toward the airport Monday evening. The driver
was killed. Mr. Garza received three bullet wounds, to the neck,
shoulder and leg, and was transported to a Mexico City hospital for
medical care and for his own safety. Hitmen in this city have been
known to follow their target to hospitals to finish the job.

No clear motive for the attack has been established, but over the
weekend Mr. Garza met with families whose relatives have disappeared
in recent years from both sides of the border. Mr. Garza vowed to
take the crime files of those who have disappeared and prepare a
report for Mr. Calderon and press him for action on behalf of the
victims' families.

"Garza was the first high-level Mexican official to make such a bold
promise," said Priscilla Cisneros, whose daughter, Brenda, was a
community college student in Laredo when she disappeared in September
2004. "I don't know if that was a coincidence, or the reason. We just
don't know." In 3 1/2 years of intense cartel violence, more than
600 people reportedly have been killed in Nuevo Laredo.

Hundreds more Mexicans have been kidnapped or have disappeared from
the area in recent years. At least 63 Americans have been kidnapped,
according to Laredo's Missing, an organization set up by family
members to pressure authorities on both sides of the border to find
their loved ones. Many of the Americans were later released, but at
least 20 remain missing. Hardly feeling secure The sight of the
troops passing through Nuevo Laredo's main square generated both hope
and skepticism among residents.

"Look at them," said Juan Jose Garcia, 65, whose sons live in Dallas
and San Antonio. "They look so pristine in their nice uniforms, like
they're going to a parade. But they do want to give us a sense of
security," he said, his voice heavy with sarcasm.

"A false sense of security," said Cecilia Garcia Martinez, 26, who
migrated from Veracruz two years ago and is eager to move to the
United States. A garlic farmer, Jose Torres Martinez, 60, screamed at
American reporters, blaming them for "giving Nuevo Laredo a bad name
and killing off our business." Indeed, tourism is virtually gone from
Nuevo Laredo, and the city is moribund. The exodus of the middle
class has continued unabated. A headline in this week's El Manana
newspaper summed up the situation this way: "Nuevo Laredo dies; Laredo booms."

A year ago, El Manana announced it would no longer cover drug-related
crime to protect its employees. Its management now says it is
considering opening a newspaper in Laredo. Mr. Suneson of Marti's
said he is opening a business in San Antonio.

"We're facing some very tough times, and there's no end in sight," he
said. "It's time to go to plan B."

Across the Rio Grande, meanwhile, Laredo is booming, with new
schools, housing projects and shopping centers under construction.
This May, taxpayers will vote on a $400 million bond issue for new
schools, an effort aimed at keeping up with the population growth,
some of it caused by Nuevo Laredo's exodus.

"Laredo is booming, booming, booming," Mayor Raul Salinas said
Wednesday. He said Laredo's growth was second in the nation to Las
Vegas last year. In Nuevo Laredo, as the sun set Tuesday residents
headed for home. Rodolfo Martinez, his wife, Cynthia Jaime, and their
6-month-old, Rodolfo, had finished a day of shopping in Laredo and
were returning home to Monterrey. As they strolled through the plaza,
the couple noted presence of cartel "spotters."

"We used to shrug when we'd hear about the drug killings in Nuevo
Laredo," Mr. Martinez said. "Now we're seeing it in all our own back
yard in Monterrey, and in Acapulco, Morelia, Tijuana, Ciudad Juarez
and on and on and on. The question really is, who can save Mexico?