Exclusive: U.S. offers to fund Mexico heroin fight as 2016 output jumps – U.S. official

FILE PHOTO: Policemen keep watch on the perimeter of a scene during a shooting with federal forces in Tepic, in Nayarit state, February 10, 2017. REUTERS/Hugo Cervantes/File Photo

By Gabriel Stargardter

MEXICO CITY (Reuters) – The United States has offered to help fund Mexico’s efforts to eradicate opium poppies, the U.S. assistant secretary for International Narcotics and Law Enforcement Affairs (INL) said on Friday, as Mexican heroin output increased again last year.

“We would be prepared to support (opium eradication efforts) should we reach a basic agreement in terms of how they would do more and better eradication in the future,” William Brownfield of INL, part of the State Department, said in an interview.

“That is on the table, but I don’t want you to conclude that it’s a done deal, because we still have to work through the details,” he said, without specifying how much money the United States could provide.

The United States is in the midst of an opiates epidemic that has killed tens of thousands of people, and with much of its heroin coming from the mountains of Mexico, the issue has become a key topic of discussion between the Mexican government and the administration of U.S. President Donald Trump.

The U.S. offer to help fund Mexico’s war on poppy cultivation stands in stark contrast to Trump’s threats to rip up the North American Free Trade Agreement and force Mexico to pay for a wall along the U.S. border, and reveals the more subtle discussions taking place between the two governments.

Mexico’s president’s office, the Interior Ministry and the Foreign Ministry did not immediately respond to requests for comment.

Speaking on condition of anonymity because the figures are not yet public, a U.S. official said separately that the area of opium poppies under cultivation in Mexico reached 32,000 hectares in 2016, equivalent to about 81 tonnes.

In 2015, Mexico had 28,000 hectares under cultivation, almost triple the area in 2012, according to U.S. data.

Support for eradicating Mexico’s opium crop could come in various forms, Brownfield said. For example, the U.S. government could provide more vehicles, or pay for helicopter flights to access the isolated, mountainous regions where poppy is grown.

“If it’s a matter of having other sorts of equipment, we could talk about support in terms of equipment,” he said.

The INL will not write Mexico a blank check but is willing to help fund specific units involved in eradication, he said.

Mexico is engaged in fraught discussions with the Trump administration over drug trafficking, trade and immigration, and Trump focused on the heroin scourge in his election campaign.

Nonetheless, Brownfield said the two governments were making substantial progress.

“Our cooperation with the Mexican government on the heroin challenge is in fact good, and it is better than it has ever been in the past,” he said.

Brownfield also confirmed a Reuters report that Mexico’s army is allowing the United States and the United Nations to observe eradication efforts.

(Reporting by Gabriel Stargardter; Editing by Lisa Shumaker)

Man’s body, seen tossed from plane, found on roof of Mexican hospital

Police officers stand guard near a crime scene where the body of a man, who witnesses said was tossed from a plane, landed on a hospital roof in Culiacan, in Mexico's northern Sinaloa state April 12, 2017. REUTERS/Jesus Bustamante

By Gabriel Stargardter

MEXICO CITY (Reuters) – The body of a man, who witnesses said was tossed from a plane, landed on a hospital roof in Mexico’s northern Sinaloa state on Wednesday, according to a public health service official in the region, which is home to notorious drug traffickers.

The body landed on the roof of an IMSS hospital in the town of Eldorado, around 7:30 a.m. local time, said the official, who was not authorized to give his name.

Witnesses standing outside the health center reported a plane flying low over the hospital and a person thrown out, the health official said.

Later on Wednesday, Sinaloa’s Deputy Attorney General Jesus Martin Robles said a body, found on the hospital roof, showed injuries that appeared to be related to a strong impact. He did not confirm that it had been thrown from a plane.

The public health service official said two more bodies were reported to have been found in the town, about 60 kilometers (40 miles) south of Culiacan, the state capital. Local media reported that those two bodies were thrown from the same plane as the body that landed on the hospital.

The official did not know if the man was alive when he was thrown from the plane. Officials from the state prosecutor’s office were at the scene, he said.

“This is an agricultural area and planes are regularly used for fumigation,” the official said, adding that the IMSS hospital was operating normally.

Local media reported that suspected gang members had picked up the two other corpses.

Sinaloa is the home state of Joaquin “Chapo” Guzman, who ran the Sinaloa drug cartel until his arrest in 2016. He was extradited to the United States earlier this year.

Ever since Chapo’s arrest, security in the state has deteriorated, as the Sinaloa cartel struggles to adapt to infighting and fresh threats from rival groups.

(Additional Reporting by Noe Torres; Editing by Frank Jack Daniel and Leslie Adler)

Sessions visits U.S.-Mexico border to push migrant crackdown

U.S. Attorney General Jeff Sessions speaks to law enforcement officers at the Thomas Eagleton U.S. Courthouse in St. Louis Missouri, U.S. March 31, 2017. REUTERS/Lawrence Bryant

By Brad Poole

Nogales, Ariz. (Reuters) – U.S. Attorney General Jeff Sessions traveled to the U.S.-Mexico border on Tuesday to make his case for increased prosecutions of illegal immigrants.

Sessions, a long-time proponent of tougher immigration enforcement, told U.S. Customs and Border Protection agents at the Port of Nogales, Arizona that more illegal migrants should be prosecuted as criminals.

Sessions said he was asking all U.S. attorneys to prioritize such cases.

It is normally the role of the Secretary of Homeland Security to meet border agents, but Sessions made the visit to highlight his focus on enforcing federal laws as dozens of U.S. cities try to shield illegal immigrants from stepped-up prosecution and deportation efforts.

“Why are we doing this?” the former U.S. senator said. “Because it is what the duly enacted laws of the United States require.”

Sessions said that each U.S. attorney would be required to designate a point person on border security prosecutions by April 18. The person in that position, known as a border security coordinator, would be directed to coordinate with the Department of Homeland Security, according to Sessions’ memo.

The directive did not go beyond existing laws, but Sessions said his order “mandates the prioritizations of such enforcement” by U.S. attorneys.

The Trump administration has threatened to cut off U.S. Justice Department grants to so-called sanctuary cities that fail to assist federal immigration authorities.

Police in such cities have argued that targeting illegal migrants is an improper use of law enforcement resources. Sessions has said a failure to deport aliens convicted of criminal offenses puts whole communities at risk.

Under U.S. law, anyone who harbors or transports an undocumented immigrant, has crossed the border illegally two or more times, resists an immigration officer’s arrest or commits travel document fraud is subject to criminal prosecution.

Other immigrants apprehended for crossing the border illegally face civil procedures, with deportation the only penalty.

He also said the Justice Department plans to add 50 more immigration judges in 2017 and 75 more in 2018. Immigration judges oversee civil immigration cases, where there is a backlog of over 540,000 pending cases due a shortage of judges.

(Writing by Julia Edwards Ainsley in Washington; Editing by Dan Grebler)

Mexico inflation rises at fastest pace in nearly eight years

MEXICO CITY (Reuters) – Mexican annual inflation rose at its fastest pace in nearly 8 years in early March, prompting central bank chief Agustin Carstens to hint at higher interest rates to combat an inflation “bubble” he said would subside later in the year.

The headline inflation rate for the year through mid-March was 5.29 percent <MXCPHI=ECI>, the national statistics institute said on Thursday. The figure was the highest since the second half of February 2009, and was above expectations of economists polled by Reuters for 5.25 percent.

Mexico’s central bank raised its benchmark interest rate last month to a nearly eight-year high after a steep hike in gasoline prices and weakness in the peso sparked by Donald Trump’s election as U.S. president.

Just after the data was published, Carstens said the central bank had room to continue adjusting rates.

The peso has recovered as U.S. officials have taken a more conciliatory tone toward Mexico and the U.S. Federal Reserve said it would stick to gradual interest-rate increases.

Still, many analysts expect the central bank to lift rates again on March 30 following the Fed as inflation climbs.

The core price index <MXCPIC=ECI>, which strips out some volatile food and energy prices, rose 4.32 percent in the 12-month period to mid-March.

The figure was above the 4.29 percent forecast in a Reuters poll.

In the first half of March, consumer prices rose 0.35 percent <MXCPIF=ECI> while the core price index <MXCPIH=ECI> climbed 0.31 percent.

(Reporting By Alexandra Alper and Miguel Angel Gutierrez; Editing by Bernadette Baum)

Mexico drug war investigators unearth 47 more skulls in mass graves

Clothing is pictured on a wire fence at site of unmarked graves where a forensic team and judicial authorities are working in after human skulls were found, in Alvarado, in Veracruz state, Mexico,

MEXICO CITY (Reuters) – Investigators unearthed the skulls of 47 more suspected victims of Mexico’s drug war in Veracruz state, just days after uncovering 250 skulls at a separate mass grave used by drug cartels, the state’s attorney general said on Sunday.

Veracruz, on Mexico’s Gulf coast, has long been a stomping ground for criminal gangs, who fight over lucrative drug and migrant smuggling routes.

Giving details on the latest grisly find, Jorge Winckler said the skulls and remains of multiple body parts were unearthed from eight unmarked graves, clustered in a 120 sq meter area, about 10 kilometers (6 miles) from the town of Alvarado.

So far, Winckler said, investigators had positively identified one three-person family, missing since September 2016, and the remains of two other men.

“The work continues,” Winckler told a news conference, vowing to track down the perpetrators.

Just days earlier, investigators recovered more than 250 skulls from another unmarked grave 60 kilometers (37 miles)further north in the Gulf state of Veracruz.

That burial site was uncovered by relatives of missing family members, impatient with officials’ apathetic response, who launched their own search for missing family members.

The relatives’ groups have exposed the government’s slow progress in attending to rights abuses and victims.

The former governor of Veracruz, Javier Duarte, who belonged to the country’s ruling party, is a fugitive, fleeing organized crime charges.

Separately, on Sunday the Veracruz attorney general’s office said it was investigating the murder of a journalist, Ricardo Monlui, who was shot dead in the town of Yanga.

Veracruz is the most dangerous state in Mexico for journalists. The Committee to Protect Journalists said in 2016 that at least six reporters had been killed for their work since 2010, when Duarte took office, adding it was investigating nine other cases.

(Reporting by Edgar Garrido; editing by Simon Cameron-Moore)

Captains of German industry to accompany Merkel on Trump trip

Germany's Chancellor Angela Merkel briefs the media during a European Union leaders summit in Brussels, Belgium March 9, 2017.

By Georgina Prodhan

FRANKFURT (Reuters) – Bosses of German companies including engineering group Siemens and car maker BMW  will travel with Chancellor Angela Merkel to meet U.S. President Donald Trump this week, sources familiar with the matter told Reuters.

Faced with Trump’s “America First” policy and threats to impose tariffs on imported goods, the captains of industry will stress how many U.S. jobs are tied to “Deutschland AG”.

Trains-to-turbines group Siemens employs more than 50,000 people in the United States, its single biggest market, where it makes 21 percent of its total revenue, while BMW’s South Carolina plant is its largest factory anywhere in the world.

Trump will meet Merkel, Europe’s longest-serving leader, for the first time on Tuesday in Washington.

Merkel told business leaders in Munich on Monday that free trade was important for both countries, while a German government spokesman confirmed at a press conference that the two leaders would also meet with German business executives.

German chancellors have a long tradition of taking groups of business leaders along with them on trips to important countries. The other business leader accompanying Merkel will be the chief executive of ball-bearings maker Schaeffler.

The three chief executives will cross the Atlantic for a single scheduled meeting of less than an hour with Trump. They will brief the president on the German practice of training workers on the job while also sending them to classes at a vocational school to obtain formal qualifications.

Such training is traditionally offered by large German companies both at home and in their foreign operations, and is particularly prized in emerging economies, where it helps German corporations win business.

Sources of tension between Berlin and the new U.S. administration include an accusation by a senior Trump adviser that Germany profits unfairly from a weak euro, and Trump’s threat to impose 35 percent tariffs on imported vehicles.

The United States is Germany’s biggest trading partner, buying German goods and services worth 107 billion euros ($114 billion) last year while exporting just 58 billion euros’ worth in return.

“The accusations of President Donald Trump and his advisers are plucked out of thin air,” the president of Germany’s VDMA engineering industry association, Carl Martin Welcker, said in a statement on Monday.

He said 81,000 people were employed in German-owned engineering firms in the United States with almost 30 billion euros in total revenue, while German export successes were linked to the high quality of goods, not foreign-exchange effects.

As part of a bid to bring jobs to America, Trump has urged carmakers to build more cars in the United States and discouraged them from investing in Mexico, where German and other carmakers have big plants.

Trump’s order banning citizens of some majority-Muslim countries from entering the United States, and a threat to tear up the NAFTA free trade deal between the United States, Mexico and Canada, have also unnerved business leaders.

Siemens chief executive Joe Kaeser expressed concern last month about developments in the United States since Trump took office, saying: “The new American president has a style that’s different from what we’re accustomed to. It worries us, what we see.”

BMW’s Chief Executive Harald Krueger said last week that introducing protectionist measures and tariffs would not be good for the United States.

The carmaker is expanding its plant in Spartanburg, South Carolina, to have a capacity of 450,000 vehicles, with 70 percent for export.

It is also building a new plant in Mexico, where it plans to invest $2.2 billion by 2019. Mexico’s lower labor costs and unique free trade position mean it now accounts for a fifth of all vehicle production in North America.

“America profits from free trade. We are supporters of free trade and not of protectionism,” Krueger told reporters at the Geneva auto show.

(Additional reporting by Irene Preisinger in Munich, Erik Kirschbaum, Andreas Cremer and Andreas Rinke in Berlin, and Edward Taylor in Frankfurt; Editing by Catherine Evans and Susan Fenton)

Trump administration has found only $20 million in existing funds for wall

A general view shows a newly built section of the U.S.-Mexico border fence at Sunland Park, U.S. opposite the Mexican border city of Ciudad Juarez, Mexico January 26, 2017. REUTERS/Jose Luis Gonzalez

By Julia Edwards Ainsley

WASHINGTON (Reuters) – President Donald Trump’s promise to use existing funds to begin immediate construction of a wall on the U.S.-Mexico border has hit a financial roadblock, according to a document seen by Reuters.

The rapid start of construction, promised throughout Trump’s campaign and in an executive order issued in January on border security, was to be financed, according to the White House, with “existing funds and resources” of the Department of Homeland Security.

But so far, the DHS has identified only $20 million that can be re-directed to the multi-billion-dollar project, according to a document prepared by the agency and distributed to congressional budget staff last week.

The document said the funds would be enough to cover a handful of contracts for wall prototypes, but not enough to begin construction of an actual barrier. This means that for the wall to move forward, the White House will need to convince Congress to appropriate funds.

An internal report, previously reported by Reuters, estimated that fully walling off or fencing the entire southern border would cost $21.6 billion – $9.3 million per mile of fence and $17.8 million per mile of wall.

DHS officials did not respond to a request for comment on this story.

Trump has said he will ask Congress to pay for what existing funds cannot cover and that Mexico will be pressured to pay back U.S. taxpayers at a later date.

Republican House Speaker Paul Ryan has said he will include funding for a border wall in the budget for next fiscal year. He has estimated the cost to be between $12 billion and $15 billion.

Many Republican lawmakers have said they would vote against a plan that does not offset the cost of the wall with spending cuts.

In the document it submitted to Congress, the DHS said it would reallocate $5 million from a fence project in Naco, Arizona, that came in under budget and $15 million from a project to install cameras on top of trucks at the border.

The surveillance project was awarded to Virginia-based Tactical Micro, but was held up due to protests from other contractors, according to the DHS document. Tactical Micro could not be reached for comment.

The DHS only searched for extra funds within its $376 million budget for border security fencing, infrastructure and technology, so it would not have to ask for congressional approval to repurpose funding, according to the document.

Contractors cannot begin bidding to develop prototypes until March 6 but more than 265 businesses already have listed themselves as “interested parties” on a government web site.

Those interested range from small businesses to large government contractors such as Raytheon <RTN.N>.

(Reporting by Julia Edwards Ainsley; Editing by Sue Horton and Bill Trott)

Mexico warns it will end NAFTA talks if U.S. proposes tariffs

Mexico's Economy Minister Ildefonso Guajardo delivers a speech during a "Made in Mexico" event in Mexico City, Mexico,

(Reuters) – Mexico’s economy minister Ildefonso Guajardo warned that his country will break off negotiations on the North American Free Trade Agreement (NAFTA) if the United States were to propose tariffs on products from Mexico, Bloomberg reported on Monday.

“The moment that they say, ‘We’re going to put a 20 percent tariff on cars,’ I get up from the table,” Guajardo told Bloomberg in an interview.

U.S. President Donald Trump has vowed to scuttle NAFTA, the 1994 trade accord which also includes Canada, if he cannot recast it to benefit U.S. interests, raising the risk of a major economic shock for Mexico.

Mexico, which is preparing to discuss changes to some trade rules under the NAFTA, has however expressed confidence that Trump will not be able to impose harsh barriers on imports anytime soon.

Mexican officials expect talks to start in June, Bloomberg reported.

Trump spoke positively about a border adjustment tax being pushed by Republicans in Congress as a way to boost exports in an interview with Reuters last week.

Trump has sent conflicting signals about his position on the border adjustment tax in separate media interviews last month, saying in one interview that it was “too complicated” and in another that it was still on the table.

The White House and the Mexican government were not immediately available for comment.

(Reporting by Kanishka Singh in Bengaluru; Editing by Sai Sachin Ravikumar)

Sanctioned for drugs, Venezuela vice-president slams U.S. ‘aggression’

Venezuela Vice President

By Andrew Cawthorne and Alexandra Ulmer

CARACAS (Reuters) – Venezuela’s powerful Vice President Tareck El Aissami on Tuesday called his blacklisting by the United States on drug charges an “imperialist aggression” in the first bilateral flare-up under the administration of U.S. President Donald Trump.

“We shall not be distracted by these miserable provocations,” he added in a series of tweets. “Truth is invincible and we will see this vile aggression dispelled.”

The U.S. Department of Treasury on Monday sanctioned El Aissami and Samark Lopez, whom it identified as his associate, on accusations of masterminding an international network shipping drugs to Mexico and the United States.

Lopez also said the listings appeared politically motivated.

“Mr. Lopez is not a government official and has not engaged in drug trafficking,” he said in a statement on his website describing himself as a “legitimate businessman.”

President Nicolas Maduro’s government has frequently cast U.S. and opposition accusations of drug-trafficking, corruption and human rights abuses as a false pretext to justify meddling in Venezuela and a push to topple him.

Maduro, 54, narrowly won election in 2013 to replace the late Hugo Chavez, but his popularity has plummeted amid an economic crisis in the nation of 30 million people.

Though he frequently lashed out at former U.S. leader Barack Obama, the Venezuelan president has so far refrained from criticizing Trump.

The sanction on El Aissami will dent Maduro’s hopes Trump might avoid confrontation with Venezuela but could also help him by providing a nationalist card to play, said Tulane University academic and Venezuela expert David Smilde.

“This is a tremendous gift to Maduro as it ensures El Aissami’s loyalty. It essentially increases El Aissami’s exit costs and gives him a personal stake in the continuation of ‘Chavismo’,” he said.

“To be clear, El Aissami and others should be held responsible for their actions. However it should be understood this process has pernicious unintended consequences. I think we are effectively witnessing the creation of a rogue state.”

“CRIMINAL” STATE?

El Aissami, 42, whom local media report is of Syrian and Lebanese extraction, grew up poor in the Andean state of Merida and went on to study law and criminology, according to the ruling Socialist Party. He had been both a lawmaker and a state governor before being named vice president last month.

Venezuelan opposition groups have long accused El Aissami of repressing dissent, participating in drug trafficking rings, and supporting Middle Eastern groups such as Hezbollah.

The head of Venezuela’s Democratic Unity opposition coalition, Jesus Torrealba, said on Tuesday that the El Aissami case demonstrated the rotten and “criminal” nature of the state.

Another opposition leader, Henry Ramos, scoffed that Venezuela would no doubt claim drugs had been planted on officials “just like they plant evidence on Venezuelan opponents to make them rot in the regime’s jails.”

Venezuela is holding more than 100 activists in prison, according to local rights groups. The government denies the existence of political prisoners, saying all politicians in jail are there on legitimate charges.

A senior U.S. official said on Monday that El Aissami controlled drug routes by air and sea. The Treasury Department said he oversaw or partially owned narcotics shipments of more than 1,000 kilograms (2,200 pounds)from Venezuela on multiple occasions.

Another U.S. administration official estimated the value of property in Miami linked to El Aissami but now blocked was worth tens of millions of dollars.

The move was a departure from the so-called “soft landing” approach taken by Obama’s White House. At times it had clashed with efforts by the U.S. Justice Department and Drug Enforcement Administration, which worked with informants in Venezuela to nab influential officials for money laundering and drug trafficking.

Since 2015, the Obama administration had sought to use behind-the-scenes diplomacy to ease acrimony with Caracas and the fallout of a string of U.S. drug indictments against Venezuelan officials, such as Interior Minister Nestor Reverol.

“When the right wing attacks us, it shows we are advancing. Nothing and nobody will stop our victorious march to peace,” Reverol tweeted in defense of El Aissami.

(Additional reporting by Diego Ore in Caracas, Lesley Wroughton in Washington; Writing by Andrew Cawthorne; Editing by W Simon; Editing by Lisa Von Ahn)

Shootouts in Mexico show Trump’s drug cartel fight will be tough

forensic scientists work at crime scene

By Christine Murray and Lizbeth Diaz

MEXICO CITY (Reuters) – Since Mexico’s top drug kingpin Joaquin “El Chapo” Guzman was extradited to a U.S. jail, gunfights in broad daylight have rocked his home state of Sinaloa in a power struggle that is a reminder of how hard it is to crush the country’s drug cartels.

U.S. President Donald Trump on Thursday signed an executive order aimed at dismantling the cartels his spokesman called “a clear and present danger.” To succeed, history suggests, Trump will have to go further then capturing or killing gang leaders.

When leaders such as Guzman are taken out, others replace them or the cartels splinter. Either way, the flow of drugs to lucrative U.S. markets is rarely interrupted for long.

As boss of the Sinaloa cartel, Guzman escaped from prison twice before Mexico’s navy arrested him last year after a chase through city sewers. Flown to the United States in January, he is awaiting trial in a New York jail.

In his absence, violence has flared. The Sinaloans, long the world’s largest drug gang with a footprint across most of the United States, appear to be facing both an internal power struggle and challenges from upstart rivals.

Last month, there were 116 homicides in Sinaloa, 50 percent more than the same month in 2016, an official at the state attorney general’s office told Reuters.

Shootouts in the state capital Culiacan resulted in 12 deaths over three days in the last week alone, the office said in a statement. The state education ministry suspended classes in 148 schools on Wednesday, citing security issues.

A video obtained by Reuters from a Federal Police official showed a pick-up truck fitted with a mounted machine gun circling a gas station during a two-minute exchange of gunfire.

The official said the footage was taken in Culiacan. Reuters could not independently verify that. Earlier, a Mexican marine and five other people were killed in clashes with a drug gang’s armed convoy that was roaming the city.

Tomas Guevara, who studies crime at Sinaloa State University, attributed the outburst of violence to the breakdown of an alliance between factions, with Guzman’s sons Alfredo and Ivan Archivaldo on one side and another leader, Damaso “El Licenciado” Lopez, on the other.

Scott Stewart, vice president of tactical analysis at security consultancy Stratfor, said Chapo was out of touch now he was in a U.S. jail.

“That seems to have emboldened ‘El Licenciado’,” Stewart said.

After Guzman was extradited the night before Trump’s inauguration, former and current U.S. Drug Enforcement Administration officials told Reuters they expected an imminent move on Chapo’s sons by their rivals. A letter this week to a top Mexican journalist claimed they were injured in the latest violence.

U.S. HELP

In a call with Mexican President Enrique Pena Nieto this month, Trump offered help, saying Mexico had not done a good job knocking the cartels out, according to a CNN report.

Trump’s executive order tells federal agencies to increase help for foreign partners on security and on intelligence sharing. The order was vague on details. The U.S. government and Mexico already work closely to tackle cartels.

For example, on Thursday, Mexican marines used a Black Hawk helicopter to kill eight alleged gang members including the head of the Beltran-Leyva gang, a rival of El Chapo. The United States sold Black Hawks to Mexico under the anti-cartel Plan Merida.

Steve Dudley of think-tank Insight Crime said it was impossible to end the flow of drugs, but more could be done on violence. Success would depend on stabilizing the volatile turn in bilateral relations under Trump.

“The overriding concern on the part of law enforcement officials on both sides of the border is that they are now at the whim of a seemingly erratic, chaotic approach,” he said.

Mexico’s national security commission did not respond to a request for comment.

(Reporting by Christine Murray and Lizbeth Diaz; Editing by Frank Jack Daniel and James Dalgleish)