MEXICAN CARTELS EXPAND SOUTH

BOGOTA, Colombia-Mexico's biggest cartels are expanding their
operations throughout Central and South America, gaining power as they
diversify and consolidate in new regions but also exposing themselves
to new challenges, according to top law-enforcement officials.

Cartels like the Sinaloa gang and the Zetas are sending more
operatives to South America than ever before, seeking to fill the void
left by the demise in recent years of powerful Colombian drug
organizations.

"There are more Mexican drug-cartel emissaries in South America than
in any other time in the history of Mexican cartels and drug
operations," said Jay Bergman, Andean regional director for the Drug
Enforcement Administration, in an interview this week.

Traffickers in Colombia, Peru and Bolivia, which in the past
constituted the epicenter of the cocaine business, are being relegated
to wholesale suppliers, with Mexican cartels now taking a larger role
in the logistics of shipping out massive cocaine hauls from South
America, Mr. Bergman said.

The move by Mexican cartels to South America reflects a fundamental
restructuring that has been going on for several years in the cocaine
business that has shifted the center of power from South America to
Mexico.

As Colombia waged a successful battle in the 1990s to break up the
Medellin and Cali cartels into many smaller groups, the Colombians
lost their leverage over the Mexicans who had acted as intermediaries
in the business. Thanks to a greater number of less powerful Colombian
cocaine suppliers, Mexican gangs now play the suppliers off one
another and get much lower prices.

The upshot: Mexico's gangs became "price setters" instead of "price
takers," according to Luis de la Calle, a Mexican economist and former
top trade official. "The Mexicans took over from the Colombians as the
oligopolists of the cocaine trade," he said.

The effect was a dramatic increase in profits-and power-for Mexican
gangs, setting the stage for both the growth of Mexican cartels and a
fight over the spoils. Since December 2006, some 40,000 people in
Mexico have died due to the violence between cartels.

Meanwhile, weakened Colombian cartels have become easier targets for
Colombia's law enforcement.

Nowadays, Colombian drug gangs focus on production and leave the
riskier side of trafficking to the Mexicans, Mr. Bergman said.

Mexican gangs are also expanding their operations in Central America,
both to escape attention in Mexico and to exploit countries with fewer
resources and historically weak rule of law.

Cocaine seizures are up throughout Central America, according to
Antonio Mazzitelli, the Mexico representative for the U.N. Office on
Drugs and Crime. The Sinaloa cartel is even trying to grow opium
poppies in Guatemala now, he said.

"Both the Sinaloa cartel and the Zetas think Mexico is getting too
messy, so they are starting to move to Central America," Mr.
Mazzitelli told a conference this week in Mexico. Guatemala, El
Salvador and Honduras are already among the most violent countries in
the world, with homicide rates well above Mexico.

Even though some of Mexico's most notoriously violent cartels, like
the Zetas, are active in Colombia, the Mexicans have been careful to
avoid using violence to take over the business from the Colombians,
according to Mr. Bergman. That's mostly because the Mexicans fear
Colombian law enforcement.

"No Mexican cartel wants to come here and go toe-to-toe with the
Colombians," Mr. Bergman said. "In business schemes, there was never
anything like a Wall Street hostile takeover," he added.

The larger role the Mexicans are taking in the drug trade is opening
new flanks as authorities move to quash their operations. "The
Achilles heel for a drug organization is when they become more
overstretched," Mr. Bergman said.

"The Mexican cartels were insulated, but now they don't have that
insulation because now they have to move to South America."