MEXICO PAYS THE PRICE OF PROHIBITION

With the world fixated on Vladimir Putin's
expansionist exploits in Georgia, a different sort of assault against
a democracy south of the U.S. border is getting scant attention. But
it is equally alarming. Mexico is engaged in a life-or-death struggle
against organized crime. Last week six more law enforcement officials
were killed in the line of duty battling the country's drug cartels.

This brings the death toll in President Felipe Calderon's blitz
against organized crime to 4,909 since Dec. 1, 2006. A number of the
dead have been gangsters but they also include journalists,
politicians, judges, police and military, and civilians. For
perspective on how violent Mexico has become, consider that the total
number of Americans killed in Iraq since March 2003 is 4,142.

Kidnapping and armed robbery numbers have also soared. In Tijuana, a
kidnapping epidemic has provoked an exodus of upper-middle-class
families across the U.S. border in search of safety.

As this column has pointed out many times, one reason that security
has so deteriorated in the past decade is the demand in the U.S. for
illegal narcotics, and the U.S. government's crackdown on the
Caribbean trafficking route. Mexican cartels have risen up to serve
the U.S. market, and their earnings have made them rich and well-armed.

The victims of last week's killing spree include the deputy police
chief of the state of Michoacan and one of his men, a detective in the
state of Chihuahua, and a deputy police chief in the state of Quintana
Roo. As of July, 449 police and military officers have died in the
Calderon offensive, further underscoring the price Mexico is paying
for the U.S. "war on drugs." But the costs go well beyond the loss of
life.

In a developed country like the U.S., prohibition takes a toll on the
rule of law but does not overwhelm it. In Mexico, where a newly
revived democracy is trying to reform institutions after 70 years of
autocratic governance under the Institutional Revolutionary Party
(PRI), the corrupting influence of drug profits is far more pernicious.

According to Attorney General Eduardo Medina Mora, part of the
explanation for the kidnapping surge can be traced to the success of
the government's squeeze on the drug runners. He told me in February
that he expected the pressure to produce a fragmentation of the
cartels, turf wars and an increase in other criminal activities to
replace shrinking profits in drug trafficking.

If true, the kidnapping spree might be a sign that Mr. Medina Mora's
strategy is working. But when federal investigators recently fingered
Mexico City police in the kidnapping and murder of 14-year-old
Fernando Marti, the son of a wealthy entrepreneur, Mr. Medina Mora's
theory lost some credibility. Rather than being the work of
demoralized criminals, kidnapping, in the capital anyway, appears to
be just one business run by a well-oiled machine with institutional
links.

Ricardo Medina, a leading Mexican opinion writer and the editor of El
Economista, the country's top financial daily, told me on Thursday the
case shows that "independent of the shooting war on drugs there is the
problem of institutions being infiltrated by criminals and corrupted."
Even captured criminals often go free, Mr. Medina says, and all
branches of government share responsibility for this crisis of
impunity. It is true that judges can be intimidated or bribed. But it
is also true, for example, that under Mexican law kidnapping is not a
federal crime, and therefore must be handled by local authorities.
Often victims do not want to press charges because there is a
perception that the local police and local governments are in on it.

That perception has been strengthened in the Marti case, but the
problem of impunity is hardly new. As Mr. Medina wrote in El
Economista on Friday, "impunity is in view of everyone, day after day.
We all see it even to the point of smiling ironically or shrugging our
shoulders." Why hasn't this problem been tackled? One possible
explanation in Mexico City is that the district police and the rest of
the district's bureaucracy represent an important constituency for the
ruling Revolutionary Democratic Party (PRD). If the PRD's base prefers
the status quo, there is a high political cost to challenging it.

Drug profits going to organized crime only complicate the matter.
Writing in the latest issue of the Milken Institute Review, former
U.S. foreign service officer Laurence Kerr takes a page out of U.S.
history. "America has been in Mexico's shoes: flush with the bounty of
illegal liquor sales, organized crime thoroughly penetrated the U.S.
justice system during Prohibition. As long as Americans willingly bury
Mexican drug traffickers in greenbacks, progress in constraining the
trade is likely to be limited." Regrettably, Mexico's institutional
reform will also be limited and the death toll will keep climbing.