U.S., MEXICAN DRUG GANGS FORM ALLIANCES

Mexican drug cartels formed new alliances in 2009 with violent
American street and prison gangs that helped tighten their
stranglehold on the lucrative U.S. narcotics market, but competition
among Mexican smugglers remains fierce and threatens more bloodshed in
the United States, according to a Justice Department report.

The 2010 Drug Threat Assessment, released Thursday, also says Mexican
drug cartels control most of the illicit cocaine, heroin and
methamphetamine trade into the U.S., along with much of the marijuana
distribution. The cartels' tentacles reach every state, including some
unexpected rural areas of the U.S.

"The growing strength and organization of criminal gangs, including
their growing alliances with large Mexican [drug trafficking
organiza[JUMP]tions], has changed the nature of midlevel and retail
drug distribution in many local drug markets, even in suburban and
rural areas," says the National Drug Intelligence Center report.

"As a result, disrupting illicit drug availability and distribution
will become increasingly difficult for state and local law enforcement
agencies."

According to the report, the Mexican connection benefits U.S. street
gangs, as they are able to buy drugs directly from the cartels, which
enables the gangs to flood the streets with less expensive drugs by
cutting out midlevel wholesale dealers.

As an example, according to the report, members of the Chicago-based
Latin Kings gang in Midland, Texas, now purchase cocaine directly from
Mexican traffickers for $16,000 to $18,000 a kilogram. Those drugs
then can be shipped directly to Chicago, where it would have cost the
gang nearly $30,000 more to purchase a kilogram of cocaine from a
midlevel wholesaler.

"With this savings," the report says, "the gang undersells other local
dealers who do not have the capacity to buy large wholesale quantities
directly from Mexican [drug trafficking organizations] in Mexico or
along the Southwest border."

The street gangs also prove useful to the cartels. The report says
drug traffickers use gang members in Mexico and, to a lesser extent,
in the U.S., especially in Texas and California, to protect smuggling
routes, collect debts and kill rival traffickers.

"Gang members who are U.S. citizens are a particularly valuable asset
to Mexican [drug trafficking organizations] because they can normally
cross the U.S.-Mexico border with less law enforcement scrutiny and
therefore are less likely to have illicit drug loads interdicted," the
report says.

Despite the worries of U.S. law enforcement, a vast majority of the
violence still occurs on the Mexican side of the border. In 2009,
according to unofficial estimates, as many as 8,000 people in Mexico,
including 800 police and military officers, were killed as the cartels
fought over smuggling corridors and responded to increased attention
from authorities.

Most of the violence in the U.S. has been limited so far to cartel
members in cities near the southwestern border, including Phoenix,
where hundreds of drug-related kidnappings have been reported in
recent years. According to the report, the kidnappings are generally
the result of a dispute between an individual drug smuggler and a
cartel's leadership.

The report says some assaults against U.S. Border Patrol agents are
the work of cartel members. Assaults against Border Patrol agents
increased 46 percent between fiscal 2006 and fiscal 2008, when 1,097
incidents took place.

Those incidents included the fatal shooting of an agent in Campo,
Calif., who had been investigating suspicious activity. Agent Robert
Rosas, 30, was fatally shot by an unknown assailant in July while
responding to an area notorious for alien and drug smuggling,
according to U.S. Customs and Border Protection (CBP). He is survived
by a wife and two children.

Law enforcement authorities also reported continuing concerns
regarding weapons and tens of billions of dollars in cash destined for
the cartels that is smuggled from the U.S. into Mexico across the
southwestern border.

Meanwhile, Mexican federal police Thursday arrested that country's
so-called "King of Heroin," a powerful drug trafficker suspected of
running hundreds of pounds of heroin into Southern California each
year. Jose Antonio Medina, 36, nicknamed "Don Pepe," was arrested in
the western state of Michoacan and is being held for
prosecution.

Also on Thursday, 41 inmates escaped from a prison on Mexico's
northern border, and two guards also disappeared. The state government
of Tamaulipas said the prisoners escaped in the Mexican city of
Matamoros, across from Brownsville, Texas. Most were being held on
organized crime charges and drug trafficking.

Mexico said the prison director had been fired but gave no further
information.