Merida initiative for Mexico and Central America: funding and policy Issues.(Congressional Research Service)(Report)

July 6, 2009

Summary

Increasing violence perpetrated by drug trafficking organizations, gangs, and other criminal groups is threatening citizen security in Mexico and Central America. Drug-related violence claimed more than 5,600 lives in Mexico in 2008, and several Central American countries have some of the highest homicide rates in the world. Mexican-based drug cartels dominate the illicit drug market in most regions of the United States and are expanding their operations by forming partnerships with U.S. gangs. As a result, some of the drug-related violence in Mexico has begun to spillover into the United States.

On October 22, 2007, the United States and Mexico announced the Merida Initiative, a multi-year proposal for $1.4 billion in U.S. assistance to Mexico and Central America aimed at combating drug trafficking and organized crime. The Bush Administration first requested funding for Merida in the FY2008 supplemental appropriation. The request did not include domestic programs to complement the Initiative, but U.S. officials pledged to step up efforts to prevent arms, precursor chemicals, and bulk cash from flowing from the United States to Mexico, and to reduce U.S. drug demand.

In June 2008, the 110th Congress appropriated $465 million for FY2008 and FY2009 for Mexico and Central America in the FY2008 Supplemental Appropriations Act, (P.L. 110-252). Mexico received $352 million in FY2008 supplemental assistance and $48 million in FY2009 bridge fund supplemental assistance. Central America, Haiti, and the Dominican Republic received $65 million in FY2008 supplemental assistance. In March 2009, the 111th Congress appropriated another $300 million for Mexico and $110 million for Central America, Haiti and the Dominican Republic in the 2009 Omnibus Appropriations Act, (P.L. 111-8). On April 9, 2009, the Obama Administration requested $66 million for Merida funding for Mexico in a FY2009 supplemental request. The Congress passed a supplemental appropriation in June 2009 (P.L. 111-32) greater than the Administration's request totaling $420 million in Merida assistance for Mexico. With the 2009 supplemental, total funding for the Merida program to date is approximately $1.3 billion. For FY2010, the Obama Administration requested $450 million for Mexico and $100 million for Central America for a total of $550 million. On June 26, 2009, the House Appropriations Committee reported H.R. 3081 which includes security-related assistance of $235.8 million for Mexico, $83 million for Central America under the new Central America Regional Security Initiative and $37 million in the new Caribbean Basin Security Initiative.

The 111th Congress has demonstrated a strong interest in addressing the spiraling drug trafficking violence in Mexico, and held more than a dozen hearings relating to the border violence in the spring of 2009. Congress will continue to examine the Merida Initiative and related funding as it considers the FY2010 budget. Policy issues that have emerged in consideration of Merida include what levels and types of funding should be provided to Mexico and Central America; how well U.S. agencies are coordinating with their foreign counterparts in implementing the Initiative; and the degree to which the nations involved, including the United States, are fulfilling their domestic obligations under Merida. Congress has expressed a keen interest in enforcement of Merida's human rights conditions. This report provides an overview of the funding provided for the Merida Initiative and a discussion of some policy issues that Congress may consider as it oversees implementation of the Initiative. For related information, see CRS Report RL32724, Mexico-U.S. Relations: Issues for Congress, and CRS Report R40582, Mexico's Drug-Related Violence.

Contents

Background
Funding for the Merida Initiative
   Merida Authorization Legislation in the 110th Congress
   FY2008 Supplemental Request and Appropriations for Merida
      Mexico
      Central America
      Haiti and the Dominican Republic
   FY2009 Request and Appropriations
      Mexico
      Central America
      Legislative Action on the FY2009 Request for Merida
      FY09 Supplemental Request and Appropriations
   FY2010 Budget Request and Committee Action
   Additional Merida Initiative Legislation in the 111th Congress
Policy Issues
   Is Merida the Right Drug Control Approach?
   Balancing "Hard-side"
   and "Soft-side" Assistance
   Monitoring Progress
   Pace of Implementation
   Interagency Coordination
   Role of the Department of Defense
   U.S. Pledges Under the Merida Initiative
      Weapons Trafficking
      Drug Demand
      Bulk Cash Smuggling
   Mexico Policy Issues
      Domestic Counterdrug Efforts
      Police Reform and Anti-Corruption Efforts
      Implementation of Judicial Reforms
      Protection of Human Rights
   Central America Policy Issues
   The Caribbean

Tables
Table 1. FY2008-FY2010 Merida Funding for Mexico by Aid Account
Table 2. FY2008-FY2010 Merida Funding for Central America by Aid
Account
Table 3. Estimated Merida Requests and Appropriations by Country

Appendixes
Appendix. Conditions on FY2008 Supplemental Assistance for Merida

Contacts
Author Contact Information

In October 2007, the United States and Mexico announced the Merida Initiative, a three-year program of U.S. assistance to Mexico and Central America (1) to combat drug trafficking, gangs, and organized crime. (2) Named for the location of a March 2007 meeting between Presidents George W. Bush and Felipe Calderon of Mexico, the Merida Initiative seeks to expand bilateral and regional anticrime and counterdrug cooperation. In June 2008, the 110th Congress appropriated $465 million in supplemental assistance for Mexico, Central America, Haiti, and the Dominican Republic in the FY2008 Supplemental Appropriations Act (P.L. 110-252). On December 3, 2008, the United States and Mexico signed a Letter of Agreement, allowing $197 million in Merida funds to be disbursed. (3) In the first six months of 2009, the Central American countries all signed Letters of Agreement with the United States. (4)

The Bush Administration requested a second installment of Merida funding--$450 million for Mexico and $100 million for Central America--in its FY2009 budget request. Congress did not include Merida Initiative funding in a continuing resolution because the initial pot of Merida funding was provided through a supplemental assistance measure. For this reason, it was taken up early in the first session of the 111th Congress in the 2009 Omnibus Appropriations Act (P.L. 1118) signed into law in March 2009 and Mexico, Central America, Haiti, and the Dominican Republic received a total of $410 million.

On April 9, 2009, the Obama Administration submitted a FY2009 supplemental request that included $66 million in Merida assistance for Mexico. Congress appropriated a total of $420 million for Mexico in the Supplemental Appropriations Act, 2009 (P.L. 111-32) signed into law June 24, 2009. For FY2010, the Obama Administration requested $450 million for Mexico and $100 million for Central America under the Merida Initiative. In late June, the House Appropriations Committee reported out a bill (H.R. 3081) that funded what had been known as the Merida Initiative in three parts : $235.8 million for Mexico, $83 million for Central America under the new Central America Regional Security Initiative (CARSI) and $37 million for the Caribbean in the new Caribbean Basin Security Initiative (CBSI). While this overall funding is less than the Administration's FY2010 request, Congress had appropriated significantly more for Mexico in the FY2009 supplemental spending measure. Notably the House Appropriations Committee described part of the FY2009 supplemental funding for Mexico ($420 million) as advance funding of the FY2010 request.

This report provides an overview and discussion of the funding provided for Merida, and presents several issues that Congress may consider as it oversees implementation of the Initiative and shapes its future direction.

Background

The stated objective of the Merida Initiative, according to the U.S. and Mexican government joint statement of October 2007, is to maximize the effectiveness of efforts against drug, human, and weapons trafficking. The joint statement highlights counterdrug and anticrime efforts of both countries, including Mexico's 24% increase in security spending in 2007 under President Felipe Calderon and U.S. efforts to reduce weapons, human, and drug trafficking along the Mexican border. (5) The Central America portion of the Initiative aims to bolster the capacity of governments to inspect and interdict unauthorized drugs, goods, arms, and people and to support regional anti-gang efforts.

The Merida Initiative is not only the largest foreign aid package for the Western Hemisphere since Plan Colombia, (6) it is, according to its proponents, a new kind of partnership between the United States, Mexico and Central America. Analysts and U.S. officials have said that for the Initiative to be successful, all the countries involved will have to accept their "shared responsibility" to tackle domestic problems contributing to drug trafficking and crime in the region, including U.S. drug demand. (7) Since President Calderon took office in December 2006, Mexico has increased security spending (to some $4 billion in 2008, and a reported $9.3 billion in 2009) (8), mobilized thousands of soldiers and police to drug trafficking "hot-spots" throughout the country, and extradited record numbers of drug traffickers to the United States.

Drug trafficking organizations (DTOs) and other organized criminal groups pose an increasing security threat to Mexico and Central America. In 2008, the Calderon government's crackdown on the cartels, as well as rivalries and turf wars among Mexico's drug cartels fueled an escalation in violence throughout the country, including northern states along the U.S.-Mexico border. In 2008, more than 5,600 people in Mexico were killed in drug trafficking violence, a 110% increase over 2007. (9) Among those murdered were 522 Mexican military and law enforcement officials according to recent testimony of the U.S. Department of State. (10) In the first two months of 2009, the violence grew with almost 1,000 drug-related killings in Mexico or 146% more than in the comparable period of 2008. (11) Mexico and Central American security officials lack the training and equipment needed to deal with DTOs and other criminal groups who are securing illicit arms and significant cash resources from the United States and elsewhere. In addition, Mexico and Central America continue to have problems with impunity, police corruption, and human rights abuses by security forces that have hindered the performance and reputation of their law enforcement and judicial systems.

Funding for the Merida Initiative

The Bush Administration designed the Merida Initiative as a three-year counterdrug and anticrime package for Mexico and Central America that would begin in FY2008 and last through FY2010. Prior to the FY2008 supplemental request for Merida, neither Mexico nor the countries of Central America had received large amounts of U.S. counternarcotics (CN) assistance. (12) In FY2007, Mexico received $36.7 million in CN assistance and the only Central American countries to receive CN funds were Guatemala ($1.9 million) and Panama ($3.3 million).

This section of the report briefly discusses Merida authorization legislation that was considered, but not enacted, during the 110th Congress. It then compares the FY2008 supplemental request for Merida with the FY2008 supplemental funds that were enacted by Congress in June 2008. This is followed by a brief summary of the Bush Administration's FY2009 request for Merida, and a description of the 2009 Omnibus Appropriations Act passed by the 111th Congress and signed into law on March 11, 2009. It also describes FY2009 supplemental funding for Mexico appropriated by Congress under the Initiative and the President's FY2010 budget request unveiled in May 2009. Finally, it discusses additional legislation concerning the Merida Initiative in the 111th Congress.

Table 3, included at the end of this funding section, provides a country-level breakdown of Merida requests and appropriations.

Merida Authorization Legislation in the 110th Congress

While several Members of Congress initially expressed concern that they were not adequately consulted by the Administration during the development of the Merida Initiative, a majority of House Members subsequently voted to authorize the aid package. On June 11, 2008, the House approved H.R. 6028 (Berman), the Merida Initiative to Combat Illicit Narcotics and Reduce Organized Crime Authorization Act of 2008 by a vote of 311 to 106, demonstrating bipartisan support for the proposed assistance. The Senate did not take any action on the measure so legislative attention turned to consideration of appropriations for the Merida Initiative.

As passed by the House, H.R. 6028 would have authorized $1.6 billion over three years, FY2008-FY2010, for Mexico and Central America, $200 million more than originally proposed by President Bush. (13) Of that amount, $1.1 billion would have been authorized for Mexico, $405 million for the countries of Central America, and $73.5 million for activities of the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) to reduce the flow of illegal weapons from the United States to Mexico. Among the bill's various conditions on providing the assistance, the measure would have required that vetting procedures to ensure that members or units of military or law enforcement agencies receiving assistance were not involved in human rights violations.

FY2008 Supplemental Request and Appropriations for Merida

The Bush Administration requested $500 million for Mexico and $50 million for Central American countries in its FY2008 supplemental appropriations request. (14) All of the funding was requested through the International Narcotics Control and Law Enforcement (INCLE) account, administered by the State Department's Bureau of International Narcotics and Law Enforcement Affairs (INL). Due to the grave security situation in Mexico, Administration officials justified the Merida request in an emergency supplemental request rather than the FY2009 regular foreign aid budget request.

In the FY2008 supplemental request, the size, goals, and composition of the Mexican and Central American portions of the Merida Initiative differed markedly. In advance of the October 2007 joint announcement of the proposed aid package, U.S. and Mexican officials had met over many months to craft the Mexican portion of the Initiative. As a result, the FY2008 supplemental budget request for Mexico was 10 times as large, and much further along in its development than the initial Merida request for Central America. The largest category of assistance to Mexico would fund equipment and technology infrastructure improvements for military and law enforcement agencies. Another category of assistance would fund such items as inspection scanners, x-ray ion scanners, computer and security equipment. A third category would fund institution-building and justice sector projects, while the final category of assistance …