DRUG CARTELS IN STEALTH MAKEOVER

Bosses Keeping Lower Profile, Forging Alliances

MEXICO CITY - A new breed of crime leaders seems to be taking over Mexico's
drug trade as the country's biggest gang reorganizes itself, U.S. and
Mexican investigators say.

In contrast to the brutal and flamboyant kingpins of the past, the new
bosses are said to be keen on building alliances among gangs, delegating
some of their organizations' responsibilities to key underlings and staying
out of the limelight.

The result likely will be a multibillion-dollar illicit industry that's
less violent - but more efficient and even harder to stop, officials say.

"The era of the big drug lord is over," said Mario Estuardo Bermudez,
Mexico's top anti-drug prosecutor. "Instead of one leader, they now build
an automated organization with regional managers who can cover more
territory and create zones of influence in practically the whole country."

The White House estimates that about half of the $65 billion in narcotics
that Americans buy each year comes through Mexico.

Until recently, the world of Mexican drugs was dominated by the Arellano
Felix brothers, known for their lavish lifestyles and fierce tempers. But
in February, police in the resort city of Mazatlan gunned down the gang's
feared enforcer, Ramon Arellano Felix. A month later, authorities captured
his brother Benjamin, the gang's operations chief.

As the Arellano Felix gang tries to overcome those blows, other smugglers
are moving to seize a piece of the action in the first major shake-up in
the drug business since 1997.

Juarez Group Still Operating

U.S. and Mexican investigators predict no one man will rise to fill the
void. Instead, a number of bosses - all at least loosely affiliated with
the Juarez cartel - are stepping to the forefront.

Based just across the border from El Paso, the Juarez organization was once
so powerful that it paid Colombian suppliers up to $30 million per cocaine
shipment, then transported enormous amounts of narcotics from Mexico to a
small army of distributors in New York, Chicago, Houston and Los Angeles.

Drug agents had thought the group might collapse after the death of its
leader, Amado Carillo Fuentes, following botched plastic surgery in July
1997. Instead, control fell to his brother, Vicente, who expanded the
organization's operations, opening a control center in the eastern border
city of Reynosa to supplement the Ciudad Juarez headquarters.

Bermudez said Carillo Fuentes also has formed a strong alliance with the
leader of the Gulf cartel, Osiel Cardenas, which has allowed his family to
gain control of key smuggling posts on the Yucatan Peninsula, including the
resort city of Cancun.

"Several arrests have put the Gulf cartel in a difficult position,"
Bermudez said in an interview at his heavily guarded Mexico City office.
"It needs alliances with the Carillo Fuentes organization."

Working To Build Alliances

Luis Astorga, a sociologist at the National Autonomous University who
studies the drug trade, said Carillo Fuentes has become the most powerful
man in modern Mexican trafficking.

"After his brother died, he built a cartel that is very rich and that works
with other drug organizations instead of fighting with them," Astorga said.

Another rising leader is Ismael "El Mayo" Zambada, who was a low- ranking
enforcer in the Juarez cartel but now heads a group of free- lance
smugglers based in Mazatlan, in the western state of Sinaloa.

A former farmer with extensive agricultural and botanical knowledge,
Zambada has worked to increase his gang's production of heroin, U.S.
officials say.

Known as an accomplished alliance-builder, Zambada has remained close to
the Carillo Fuentes family while maintaining independent ties to Colombian
cocaine smugglers. U.S. officials say Zambada helped the Arellano Felix
organization set up its headquarters in the border city of Tijuana before a
disagreement over drug payments made Zambada a chief Arellano Felix target.

Nonaggression Agreement

Bermudez said Zambada has an informal nonaggression pact with Joaquin
Guzman, who controls another Sinaloa-based drug gang once headed by the
now-jailed Hector Luis Palma.

U.S. and Mexican agents are also watching Juan Esparragoza, an important
adviser to Carillo Fuentes, who they say acts as a "narco- diplomat" in
smoothing over problems between the gangs.

Donald Thornhill of the U.S. Drug Enforcement Administration's San Diego
field office said authorities are expecting the rising crop of bosses to
"sit back and quietly get rich."

"Whoever is next in line we expect to keep a much lower profile," Thornhill
said. "They understand that having a lot of heat on them is not a good thing."

Last year, all the major drug smugglers except the Arellano Felix gang
gathered at least twice to forge a working truce, according to one
participant, other associates of smugglers and government officials, all of
whom agreed to discuss the matter only if given anonymity.

Prosecutor Bermudez denied knowledge of the meeting, but he said the new
group of drug lords "has determined that it is more convenient to exchange
information and provide support to one another."

"In the grand scheme of things, the cartels have realized that violence
doesn't have many benefits," he said.

Violence still present

But the shift in Mexico's drug-smuggling leadership won't pass entirely
without bloodshed, officials say. Bermudez said Zambada and other drug
lords are trying to shoot their way into the lesser strongholds of the
Arellano Felix gang in Sinaloa, Jalisco and Michoacan states, all key areas
for growing marijuana and opium poppies.

Bermudez also said police have seen violence as a number of drug gangs try
to develop smuggling routes in Nezahualcoyotl, a city on the western
outskirts of Mexico City.

Investigators say that decentralized gangs will be harder to stop because
authorities will have to split their resources among dozens of major suspects.

Bermudez said Zambada and others have safe houses across Mexico and can fly
to one coast-to-coast or abroad at a moment's notice. He said gang leaders
rely heavily on plastic surgery to disguise their identities, with some
going under the knife every few years.

"There is now no such thing as an untouchable drug lord," Bermudez said.
"But that doesn't mean that they are easy to catch."