Madam Chairwoman, Ranking Member Granger and other distinguished Members of the Subcommittee, thank you for inviting me to appear before you today. I appreciate the opportunity to testify on USAID/Mexico's role in the Merida Initiative. Madam Chairwoman, I also wish to thank you and your colleagues for your recent visit to Mexico where we had the opportunity to discuss some of our programs. I especially want to thank you for the delegation's visit to the Trafficking-in-Persons shelter. The young victims were enormously encouraged by your words of support.

As my State Department colleagues have noted, the Merida Initiative is a timely and historic opportunity for the United States to expand our partnership with Mexico, as well as the countries of Central America and the Caribbean, to fight the international criminal organizations that harm the citizens and communities of all of our countries. This fight will be difficult and it will be long. But it is a fight that, by working together, we will win.

USAID's program in Mexico promotes bilateral cooperation to resolve the challenges that confront both nations. Our programs support Mexican initiatives in justice system reform, economic competitiveness, and sustainable development, so that Mexico can provide its citizens economic opportunities and a safe community in which they can raise their families. Our $23 million FY 2008 program helped Mexico to improve natural resource management, increase energy efficiency, broaden access to finance, provide educational opportunities and prevent the spread of infectious diseases such as TB and HIV.

Criminal organizations have prospered due to four factors. First, the demand for drugs fuels the entire multi-billion industry. In addition to the large U.S. market for illicit drugs, criminal organizations have increased their sales in Mexico, Central America and the Caribbean. Mexican parents and educators consistently express their concern over increasing drug use. Drug dealers frequently offer free samples, even on school play grounds, to get young people hooked.

A second factor is unemployment, or the lack of legitimate economic opportunities. Those who are unemployed or underemployed are more easily tempted by offers to work in illegitimate businesses. Mexican criminal organizations have used the internet and banners slung across streets to advertise "good jobs, good salaries, and generous benefits."

Public institutions that are weakened by insufficient budgets, inadequate equipment and poor training also contribute to criminal success. Mexican civil society organizations estimate that only two percent of criminal cases reach the stages of indictment and conviction.

Finally, criminals prosper when coordination between law enforcement efforts is poor across the region. The narco-traffickers have exploited our differences and our borders. They do not respect our borders, our laws, or human life.

The Merida Initiative provides us the opportunity to support progress in addressing all four of these areas. While each individual government is working to reduce their internal demand for illicit drugs, increased regional collaboration allows us to share best practices in demand reduction campaigns and rehabilitation programs.

Across the region, USAID programs strengthen institutions. USAID supports President Calderon's efforts to strengthen law enforcement and justice sector institutions that are key to addressing crime and violence. Better training, equipment and funding are essential. In Mexico, our programs have supported Mexican federal and state reformers who have passed dramatic reforms to increase the transparency and effectiveness of the justice sector. U.S. states have joined with USAID to support Mexican states as they experimented with new justice models. For example, New Mexico provided technical assistance and training to Chihuahua's forensics experts and labs. Colorado recently completed training for the second group of state police investigators from Baja California.

The Mexican federal reformers drew upon the best practices of those state experiences to formulate their new Mexican justice system. In 2007, Mexican President Felipe Calderon proposed constitutional reforms to change the criminal justice system from a mixed inquisitorial to an oral adversarial system. The Mexican Congress passed these reforms in 2008 and the states promptly ratified the constitutional changes. Mexico has set an ambitious eight-year timeline to implement these reforms in all federal and state jurisdictions. Our Merida programs in Mexico are designed to support those Mexican institutions as they fundamentally change their entire justice system and train an estimated 1 million people in new, more transparent and accountable ways of administering justice.

Our Merida programs also foster greater respect for human rights. Mexico's old justice system relied heavily on confessions to prove guilt. This led to many charges that the police and prosecutors had committed human rights violations as confessions were sought. The new justice system is founded on the presumption of innocence, with evidence required to prove guilt. Our programs will share US best practices in defending human rights and criminal investigation. In addition, our Merida programs encourage police units and communities to work together to solve problems, build trust and get the public to be more involved in reporting crimes.

President Calderon has stated that fighting criminal organizations is his highest priority. His second priority is to create economic opportunities by improving Mexico's competitiveness. It is estimated that 40 percent of Mexico's 110 million citizens live on less than $2 a day. The Mexican Competitiveness Institute identifies the creation of an objective and reliable justice system as Mexico's top priority to improve competitiveness and to attract both foreign and domestic investment. USAID's programs in Mexico support President Calderon's goals by helping public and private organizations reduce barriers that currently encourage many small businesses to avoid the formal business registry process and then avoid paying payroll taxes and contributing to social security type programs. It has been estimated that as much as forty percent of the Mexican economy is in the informal or gray economy.

In addition to providing scholarships to rural indigenous youth like those you met recently in Mexico, our education program supports cross border university-to-university partnerships. Three of the 64 partnerships which we have fostered to date are law school partnerships that supported Mexican state experiments in judicial reform. Southwestern University Law School in Los Angeles and Monterrey Technological Institute teamed up as Nuevo Leon became the first state to try justice reforms. American University and the Benito Juarez Autonomous University support the state of Oaxaca as it institutes judicial reforms. The Illinois Institute of Technology's Kent College of Law in Chicago and Monterrey Technological Institute's Mexico City campus have started a new partnership to expand training in the new justice system.

A primary Merida Initiative goal is to increase cross border collaboration in fighting international organized crime. Our Merida training and technical assistance programs in Mexico are all designed to increase that collaboration, in order of priority, at the federal, state, and municipal levels. USAID programs in Mexico seek first the involvement of federal agencies, such as DHS and DOJ law enforcement officials, to share best practices with their Mexican counterparts.

We are grateful to the Conference of Western Attorneys General for reaching out to Mexican colleagues. Arizona's Attorney General Terry Goddard hosted a working meeting a year ago in Phoenix between Mexican and US state Attorneys General. Mexico's Attorney General Medina Mora opened the conference offering his full support for these cross border initiatives. Increased interactions have fostered greater trust, cooperation and identified simple practical solutions. For example, Arizona shares with Sonora their data base on stolen cars, which allows Sonora's law enforcement officials to better trace the origin of abandoned cars that may have been used to smuggle guns or money from Arizona into Sonora. We would also like to recognize the U.S. city police officials who have been active in sharing their experiences with Mexican officials. Merida funds have allowed us to expand this state and city level program.

Of course the challenges we confront in Mexico are shared and in fact extend into Central America. Geographic isolation and the lack of economic opportunities make some communities especially vulnerable to criminal activity, gangs and drugs. In these locations, USAID will support vocational education, job skills training, computer literacy and bring together businesses to increase employment opportunities.

In Central American communities where serious gang and crime problems already exist, USAID will expand community crime and gang prevention programs that strengthen the role of local government officials and citizen groups in leading, organizing, and mobilizing resources to improve security. USAID will also expand community policing initiatives that bring together community leaders, civil society and the police to increase cooperation, mutual understanding and results.

Invigorating local government ownership and their capacity to play a larger role in community security, helping towns and communities to mobilize both private and public funding, and supporting local leaders as they design and develop their own anti-gang and community development programs, are all key elements that lead to the sustainability of this effort.

Interagency team work is a core value in our Embassy in Mexico. Never in my 25-year career with USAID have I seen such great professional cooperation across all U.S. agencies. The Merida Initiative is a very complex undertaking. The interagency cooperation within the Embassy and the superb relationships all of us enjoy with our Mexican counterparts contribute greatly to our success.

CONCLUSION

I wish to add my thanks for the strong bipartisan support in this committee and in the entire Congress as we implement this important program. Mexico has laid out an ambitious reform program for their police forces and their entire justice system. By participating in these programs, our federal, state and local officials will gain a broader understanding and build trust that will increase international cooperation to defeat international criminal syndicates.

The calendar next to my desk is filled with fun photos of my five children and seven grandchildren. It reminds me of why programs like the Merida Initiative are so important - to make our country and our region safer and more prosperous for our children and grandchildren. Thank you and I would be happy to answer any questions you may have.