Washington (CNSNews.com) – Mexican drug cartels use a “blood wire” to send money to drug and human smugglers, according to Arizona’s attorney general, who testified earlier this week before the Senate Judiciary Committee.

“Western Union is by far the largest provider of illicit money-movement services, so it is the source of valuable information about illicit money movements and has been the focus of interdiction efforts aimed at criminal proceeds in transit,” Terry Goddard, Arizona’s attorney general, told senators.

Goddard was one of several witnesses who testified March 17 before the Judiciary Committee and the Senate International Narcotics Control Caucus on law enforcement responses to Mexican drug cartels.

“Organized, cross-border crime between Mexico and Arizona is concentrated on trafficking in illegal drugs, humans and weapons,” Goddard said, “and each of these activities involves the movement of money.”

“In the effort to secure our border and protect our communities, we have learned that no single law enforcement agency, federal, state or local, has the manpower or expertise to combat our highly organized and sophisticated antagonists alone," Goddard said in a prepared statement for the Senate Judiciary Subcommittee on Crime and Drugs. "We must work together to go after the head of the monster. This means cutting off the financial resources and dismantling the leadership of the violent criminal cartels operating on both sides of the border.
 
“The most effective method of combating human smuggling is to block the flow of funds to the organized criminal cartels," Goddard stated. "The Arizona Attorney General's Office has aggressively pursued these 'blood wires' sent through Western Union and other money transmitters for over six years. In doing so, we have successfully moved millions of dollars in smuggling proceeds out of Arizona."

His office has seized more than $17 million in wire payments and arrested more than 100 smugglers, Goddard told senators.

As a result of the crack down on wire transfers into Arizona, trafficking -- or “coyote” -- organizations began to route wire transfer payments to Sonora in Northern Mexico.
 
To counter-attack the re-routing, Arizona authorities targeted 26 wire transfer locations on the Mexican side of the border, Goddard said.
 
The Arizona attorney general, meanwhile, said his office’s efforts to combat the re-routing of funds had been hindered by Western Union.
 
“Western Union, the nation’s dominant wire transfer company, went to court to stop our efforts,” Goddard told CNSNews.com. “The Arizona Court of Appeals upheld our methods, but the matter is still in litigation.”
 
Raul Duany, director of corporate affairs for Western Union’s U.S. Hispanic/Latin America and Caribbean operations, contradicted Goddard’s claim that his company had meddled with the law enforcement efforts.  

“Western Union has, and will continue to work cooperatively with law enforcement agencies around the world in their efforts to identify and prosecute illegal activity,” Duany told CNSNews.com.  “We remain committed to supporting the needs of law enforcement while also protecting the privacy of our consumers.”
 
A multi-billion dollar problem
 
Senate Majority Whip Richard Durbin (D-Ill.), the chairman of the Judiciary Committee’s crime and drugs subcommittee, provided an estimate of how much money Mexico receives from the illegal drug trade.

“Mexican officials estimate that approximately $10 billion in drug proceeds cross from the United States into Mexico each year in the form of bulk cash,” Durbin said during the hearing.

This kind of financial support allows for traffickers to “expand their operations further in our country, pay off police and politicians and buy more weapons from the U.S,” he added.

Goddard, however, provided his own statistics about the problem.

“Profits from drug sales in the United States generate between $15 billion and $25 billion per year, which is smuggled back into Mexico, either in the form of cash or weapons,” the AG said.
 
Arizona, he added, has become “the gateway for drug and human smuggling in the U.S.”
 
Goddard later told CNSNews.com, meanwhile, that “what we need to be most focused is the major criminal operations, not the individuals who cross the border.”
 
Anthony Placido, assistant administrator and chief of intelligence for the Drug Enforcement Administration, who also testified before the committee, echoed Goddard’s concern with wire transfers.
 
He pointed out that the DEA has been targeting “money remitters” that are facilitating drug trafficking.
 
Kumar Kibble, deputy director for the office of investigations of the Department of Homeland Security’s Immigration and Customs Enforcement (ICE) called for a joint U.S. Mexican crackdown.
 
“One of the most effective methods to deal with violent, transnational criminal organizations is to attack the criminal proceeds that fund their operations,” Kibble said.
 
When lawmakers asked the panel what Congress could do to deal with Mexican drug cartels, Goddard suggested it was necessary to “change our money transmission rules.”
 
Western Union’s spokesman, meanwhile, told CNSNews.com that the company agreed with Goddard’s assessment that neither the federal government nor local and state enforcement agencies have the “manpower or expertise to combat” the drug war in Mexico.
 
“Attorney General Goddard’s call for more consistent federal oversight of these types of situations is valid,” Duany added. “Western Union has long believed such solutions are more effective than the efforts of individual state jurisdictions. Only through such overarching consistency and continuity can the U.S. support international efforts to combat cross-border illegal activities.”