SEDUCTION OF A GENERATION

When the Arellano Felix Brothers Transformed Themselves into Vicious Drug
Lords, They Had a Little Help from Members of Tijuana's Best Families.

A hot day in Tijuana is cooling into a golden sunset. businesswoman
Guadalupe Gonzalez is helping a customer select the perfect floral teacup
from a china showroom that is a fantasia of fine figurines. Delicate
swallowtail butterflies rest on china daisies. Mermaids hold out conch
shells with tiny freshwater pearls. Porcelain brides and grooms painted in
reassuring pastels gaze at each other with bland expressions of matrimonial
joy.

The elegant breakables in the tall glass cases seem too fragile for the tale
that Gonzalez is telling. It is the story of her daughter Angelica's first
marriage. And it was anything but bland.

Angelica Bustamante is the granddaughter of Alfonso Bustamante, Tijuana's
Rockefeller, the border pioneer who built the twin business towers that loom
over this boomtown. Her path seemed preordained: an adolescence consumed
with long days at the Tijuana Country Club, the possibility of college in
San Diego, and marriage to another young scion of Tijuana's ruling class.

Instead, when Angelica was 16, she tearfully revealed to her mother that she
was pregnant. Her suitor was a rakish 19-year-old unknown with bedroom eyes
and a crooked smile, a man known as "Kitty" to his friends. Like Angelica,
Kitty partied with a popular crowd of teenagers who studied at the Instituto
Mexico, one of Tijuana's exclusive private schools. They were hastily
married not long before the birth of their twins in 1988. And that was
merely the first chapter in a life never imagined by Angelica's parents.

In May 2001, Arturo "Kitty" Paez, 34, became the first accused lieutenant of
the Tijuana drug cartel to be extradited to the United States for cocaine
trafficking. U.S. prosecutors say he worked for the notorious Arellano Felix
brothers: Benjamin, described by law enforcement authorities as the cartel's
chief executive, and Ramon, considered the "enforcer," the man who planned
the murders of the cartel's enemies. Authorities on both sides of the border
believe the organization was responsible for shipping billions of dollars of
cocaine into the United States over the last decade. Benjamin Arellano Felix
is currently housed in a high-security prison near Mexico City, awaiting
trial on drug-trafficking charges. Ramon was shot to death by Mexican police
in February.

Angelica wasn't the only well-to-do Tijuanan to bring a reputed trafficker
into the family. In 1986, Ruth Serrano Corona, the granddaughter of a top
federal official in Tijuana, married Benjamin Arellano Felix. Ruth was with
Benjamin in March when soldiers barged into their house in Puebla and took
him away.

And consider the saga of Lina Literas, one of Angelica's best friends, a
beautiful young woman whose father's chain of border import stores supplied
much of the crystal that graces the tables of Tijuana's elite. After a
childhood of ballet lessons and society weddings, Lina married the
baby-faced son of a courtly Tijuana colonel who had been a presidential
guardsman. Emilio Valdez Mainero seemed an appropriately upper-tier husband,
but he too allegedly found employment in the Arellano Felix organization,
recruiting 'young assassins who belong to Tijuana's upper class'-some of
them his childhood friends. Emilio ended up in a U.S prison, convicted of
drug trafficking in 1998. Lina disappeared during the 2000 Thanksgiving
weekend and turned up dead.

Gonzalez shakes her head. "So many kids from society got involved with
them," she sighs. "All the ladies my age, we all say that's the worst cancer
to ever hit Tijuana." That cancer was the cartel.

By the time Ramon was killed in Mazatlan in February, at least 25 young
Tijuanans from established families had been killed or jailed in a 15-year
period, all because of their connection to the cartel. They were graduates
of the finest private schools, at home on both sides of the border, the
children of families that knew or were related to some of the most powerful
people in Baja California.

Their fate poses an uncomfortable question for this cosmopolitan border
city: How did a bunch of kids from Tijuana's wealthiest neighborhoods get
mixed up with some of the deadliest men in the hemisphere?

Tijuana is the Mexican city of reinvention. In the last 50 years it has been
transformed from a dusty backwater of 65,000 to an electric border boomtown
whose official population tops 1 million, though many believe it is twice
that size. As in Los Angeles, the past is not taken quite so literally. Once
people move to Tijuana, they are pretty much whoever they say they are.

Many people who come to this freewheeling experiment in urbanism shed the
reserve and formality of central Mexico. Tijuana citizens have acquired a
reputation for being extroverted, unpretentious and open-minded. A large
middle class feeds a pulsing youth culture of crowded discos and hip rock
bands.

Upper-class circles are as newly minted as the modern Tijuana Country Club,
built in 1948 on the grounds of the old casino, a remnant of the time that
the city was a Prohibition getaway for Hollywood movie stars. Families with
such names as Bustamante, Fimbres and Anchondo coalesced into tight-knit
circles that formed the core of Tijuana society.

But by the mid-1980s, even this reliable terrain began to shift. The
devalued Mexican peso was relegating some upper class Tijuana families to
the middle class. A new, cash-rich generation of drug traffickers was
jostling for control of Tijuana; they took advantage of police and
government corruption, and of the city's strategic location at the doorstep
of the world's largest narcotics market. The Arellano Felix brothers did
that and more-they exploited one of Tijuana's treasures: its youth.

To Dario Garin, the president of the Tijuana Country Club, the Arellano
Felixes' allure boiled down to two simple things: Money. "And power," Garin
says with a wry, world-weary air. "They have lots of money. And they go
around spreading it everywhere. "I believe it was the Arellanos' strategy to
infiltrate the young so they could establish themselves in society."

The Arellano Felixes, a prosperous family of seven brothers and four
sisters, were from Sinaloa, the Pacific Coast birthplace of many Mexican
drug traffickers. Mexican police say some of the brothers were the proteges
of a well-connected relative, the Sinaloa drug kinpin Miguel Angel Felix
Gallardo, who was jailed in 1989 in connection with the murder of U.S. DEA
agent Enrique Camarena.

At first, no one on either side of the border took much notice when some of
the brothers drifted into Tijuana in the early 1980s. They seemed
small-time. In 1980, Francisco Arellano Felix, owner of a Mazatlan disco,
failed to appear in a San Diego court to answer charges of selling half a
kilo of cocaine. Drug Enforcement Administration officials say Benjamin
Arellano Felix first appeared on the radar for a petty 1982 drug arrest in
Montebello; he was with his former wife and brother Eduardo. The brothers
skipped bond and returned to Mexico. It was around that time that Benjamin
began coming to church with one of the prettiest girls in town.

Father Gerardo Montano says he was first introduced to Benjamin by Ruth
Serrano Corona, a striking blond in her early 20s who was very devout and
very proper, when he was parish priest at San Francisco Javier church. He
says her stepfather owned an elegant Tijuana restaurant and her grandfather
had been head of immigration and a political party chief.

Like more than a few well-connected Tijuanans, Ruth was born in San Diego
County. She had volunteered at the church since she was 16, reading
Scripture at services and carrying the wine, chalice and water. Her new
boyfriend was "a very polite young man, and very much in love with Ruth,"
says Montano. Benjamin, the priest adds, said he was a contractor.

But Tijuana's upstart investigative newsweekly, Zeta, identified Benjamin
and Ramon Arellano in 1985 as the mysterious men behind a marijuana
warehouse guarded by municipal police. And by the following year, Benjamin
had enough notoriety in certain circles that he raised eyebrows when he and
Ruth arrived at the "Miss Mexico" pageant in Tijuana and were shown to a VIP
area usually reserved for business sponsors and their friends.

Ruth gave birth to their first child-also named Ruth-in San Diego a year
later, and Montano baptized her. "I never saw anything strange about them in
the religious meetings," the priest says. "They wore gala attire. Benjamin
was very well-mannered, very cultivated and gracious, always very gracious."

If Father Montano was in denial, he wasn't alone.

Benjamin opened a nice seafood restaurant in town. He would sit at nearby
Sanborn's cafe on Avenida Revolucion, poring over his ledger books, wearing
a distinctive white linen suit and carrying an executive attache case. He
offered businessmen generous credit to tide them through the tight economy.
Perhaps they were grateful enough to ignore the fact that Benjamin had begun
to move about with an armed security detail, rare for an ordinary
entrepreneur.

Cristina Palacios de Hodoyan opens the door to a foyer filled with a large
doll collection and other touches of the decorative juvenilia that adults
somtimes use to reinforce a sense of innocence. She is the mother of Alfredo
Hodoyan, 31, the childhood friend of Emilio who is accused of taking part,
at the behest of the cartel, in the spectacular gangland slaying of Baja
California's federal police commander in September 1996. Cristina, 62, rolls
her eyes dismissively at any suggestion that Alfredo was the killer, the
"Wolf" described by prosecutors. Not Alfredo-tall, good-looking, bilingual,
U.S.-born; a graduate of the prestigious St. Augustine Academy in San Diego.

She shakes her head. Alfredo was openhearted, generous-wasn't he always
issuing invitations to play basketball at the Hodoyans' hoop? And Emilio-Did
you know his father was the cousin of a Mexican president?-lived right
around the corner.

So did skinny little Fabian Martinez, who was so shy that his father, a
respected pediatrician, organized a baseball team so his son would have
children to play with. It's hard to believe Fabian grew into "the Shark,"
alleged by Mexican police to have killed at least a dozen people on behalf
of the cartel.

Authorities said terrible things about other neighborhood boys, too. Boys
whose parents Cristina knows from school PTAs. Boys who played with
Cristina's sons at the Tijuana Country Club years ago. Those were simpler
times.

They began to change around 1985, when Cristina picked up her daughter at a
rock concert and was introduced to a flamboyant teenager with flashy gold
chains on his wrists and a big gold medallion around his neck. He was Ramon
Arellano Felix, the blue-jeaned kid brother of a big family new to Tijuana.
"No one knew who they were," Cristina says. But soon all the teenagers knew
Benjamin's kid brother, 12 years his junior. Ramon roared through the
streets on a motorcycle, wearing splashy Versace shirts, black leather pants
and an easy smile. Cristina's older son, Agustin Hodoyan, would wave when
Ramon drove by in a red sports car, rock-and-roll booming from his stereo.
Once, Agustin served as a translator for Ramon and an attractive young
American at a party given by Lina Literas' boyfriend, Emilio. "How could you
not know him?" Agustin asked after Alfredo's arrest in 1996. "He was a party
boy. Every Friday or Saturday night he would be at a party or a disco. He
was fun."

But "I never wanted to ask him for a favor," Agustin said, "because nothing
is free." Not everybody had those reservations.

Ramon's habit of treating everyone to champagne endeared him to the
Instituto set. His manic charisma drew the admiration of kids such as Emilio
Valdez Mainero, the kind of young men who are known in Mexico by a not
entirely flattering term: "juniors." Eventually Ramon's friends would be
tagged by the press as "narcojuniors."

People whispered about what Ramon and his brothers did. But in those days,
explains one self-described "narcojunior" who is now a protected witness,
"the guys with the nicest cars and girls were the drug dealers. This is
happening at an age where that stuff is very important to you."

Judging from U.S. court files, Ramon's Rat Pack also knew he was not the
most predictable party guest.

According to those same documents, Emilio and Ramon were attending a
birthday party at Tijuana's Club Britania in late 1988 when an unwelcome
guest arrived. The young man had just run off for three weeks with Ramon's
sister. Ramon walked out of the crowded party and shot and killed his
sister's boyfriend and two friends parked outside.

"If he got drunk or started using, you didn't even want to be around him,"
the protected witness says. But if being an enemy was dangerous, being a
member of his entourage could be a rush. Kids admired his long hair, his
rococo Chinese dragon bedside lamps, and the respect and fear he inspired.

"It's unbelievable the power you feel," the witness says. "You have no
rules. You're young. You have women all over the place. It's like this big
adult playground. It was a very unique time of my life."

it's unclear whether Angelica Bustamante and Lina Literas knew exactly what
they were getting into when they started going to the kind of parties where
the bad-boy charms of Emilio Valdez Mainero and Kitty Paez were drawing
sultry glances from teenage girls. Angelica belonged to a sheltered,
well-chaperoned world of weddings and baptisms. But Kitty, with his jeans,
T-shirts and irresistable grin, was considered the coolest guy in his
Instituto clique. He had a nice car, his own place, money, and a lot more
independence than his peers. Friends say that when he dropped by the
Instituto one day to pick up some seniors, Angelica was thrilled to be
noticed.

"He was cute, he was charming, he was very athletic, and he had all the
girls crazy," a former schoolmate of Angelica's says. "Girls always want to
be with the guy who has all the girls crazy."

That did not qualify Paez as a suitable fiance for the daughter of the
president of the Tijuana Convention and Visitors Bureau. Officially, Kitty
owned a liquor store in Rosarito. But how had a penniless 19-year-old come
up with the money for a liquor license? "Kitty Paez? I'd never heard of
him," Gonzalez says. "It would have been fine with me if they hadn't gotten
married at all. But it wouldn't have mattered. She would have kept seeing
him. When her father found out she was expecting twins, he said, 'She's
getting married.' " Then-Tijuana Mayor Federico Valdes said he officiated at
the wedding.

Lina was a far savvier player in the social scene. "Lina was gorgeous," her
brother Jaime says. "She has always had many admirers. She was the perfect
girl." Her mother tried to discourage her romance with the swaggering
Emilio. But when Lina became pregnant, her family reluctantly consented to
their marriage, a relative says. "She was very young. He was very handsome,"
another mother says. Court documents say Ramon was named godfather of their
son, Emilio Alfredo, in 1991, though relatives say he didn't show up for the
baptism. ("These people have last-minute commitments and problems," one
relative says. "They're like doctors. Their beeper goes off and they have to
go.") An invitation that found its way into U.S. court files directed the
juniors to a splashy post-baptism disco party hosted by Ramon and the baby's
other godfather, Kitty Paez. "Ramon became the godfather of a number of
children in Tijuana," Cristina de Hodoyan said in 1996. "Let's face it, it
was often for the money. He would pay for a big baptism party."

The Arellano Felixes and their entourage became "the beautiful people, the
90210 of drug cartels," says Gonzalo Curiel, the assistant U.S. attorney
assigned to the case. "The Arellanos and the narcojuniors were celebrities."

Her body turned up four days later with the corpse of her married boyfriend.
Police told the family that he appeared to have been tortured in front of
her. Emilio told her family "he won't rest until he finds out what
happened," a relative says.

"She died with the person she loved, like a soap opera," her brother Jaime
says. "That gives us peace.

Lina's father passed away four months later. Her mother is raising her three
grandchildren.

The protected witness returned to the scene of an all-night drinking session
and found two hungover gunmen playing soccer with a ball that, upon closer
inspection, turned out to be a third gunman's head. Now he's trying to sell
his story to Hollywood.

Ruth Serrano Corona was with her husband Benjamin when Mexican soldiers
burst into their bedroom in March. Benjamin's personal assistant turned out
to be Manuelito Martinez, Fabian's brother. Fabian is presumed dead.

Kitty Paez was arrested by U.S. request in downtown Tijuana in 1997. He and
Angelica had been divorced for a year, her family says. Her family says she
has since remarried, but the San Diego Union-Tribune reported that she
showed up with the children at Kitty's sentencing hearing in January as he
choked back tears and apologized to "society in general" for "everything I
did." His freewheeling life was reduced to clinical legal descriptions of
meetings where Ramon plotted "violent acts" by narcojuniors. Kitty was
sentenced to 30 years.

There are still society kids who brag that they know two of the younger
Arellanos, Eduardo and Javier, who, some DEA officials believe, are living
under armed guard in Tijuana, trying to stave off competitors and paying $1
million a week to police.

"I don't think they'll fool them again," Tijuana Country Club president
Dario Garin said. "People have had the experience, and it was a very bitter
one. It won't be so easy now."

But in March, another Tijuana "junior," Walter Ruiz Fimbres, 21, turned up
in Chicago newspapers, arrested in Deerfield, Ill., with a carload of
marijuana, and was slapped with a $10-million bond.

And Tijuana discos are still prowled by charming strangers who seem far too
eager to buy drinks for the whole table.

"History keeps repeating itself," Jaime Literas says. "They keep meeting
these people, in a party, at a disco, they buy bottles of champagne, and
they become the new members of the narco-society. It's the same now: You go
to a party, you meet these guys and you don't even know their names, just
pseudonyms. They have new cars and they invite the girls to a disco and meet
their cousins. Little by little, they get to know a lot of people."