By William Booth
Washington Post Foreign Service
Thursday, September 2, 2010; 10:46 PM
MEXICO CITY - President Felipe Calderon acknowledged Thursday that an increasingly bloody war with powerful drug trafficking organizations continues to pose "the central threat" to Mexico.
"As we all know, we face unscrupulous criminals with enormous economic capacity and great firepower," Calderon said in his fourth state of the nation speech since taking office in December 2006.
"I am fully aware that in the past year the problem of violence has risen," Calderon said before an audience of generals, cabinet secretaries, legislators and dignitaries at the National Palace, just two weeks before Mexico celebrates its bicentennial.
The Calderon administration submitted its annual report to congress Wednesday night. In the past year, authorities made 34,515 drug-related arrests and confiscated more than 34,000 weapons, 2,500 grenades, 12,000 vehicles, 76 aircraft and 60 boats from criminal groups.
Drug lords and their troops are increasingly using grenades in attacks against the state.
Most of the explosives are legacies of the Cold War, manufactured in the United States and shipped to Central America to fight leftist revolutionaries in the 1980s, then diverted or stolen and smuggled to Mexico.
Mexican soldiers and police also seized $72 million in U.S. bank notes and $9 million in Mexican pesos, according to the annual report - evidence of where the cartel cash comes from.
U.S. and Mexican customs inspectors are seizing less than 1 percent of the billions of dollars in drug sales smuggled across the border every year. Most of the weapons seized in Mexico were purchased in the United States, according to traces done by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
In his speech, Calderon stressed that Mexico is winning its fight, and he hailed the capture or killing this year of three major crime bosses. The most recent came this week when federal police captured Edgar Valdez Villarreal, an alleged drug hit man known as "La Barbie," who is wanted for importing tons of cocaine into the United States.
The arrest of La Barbie, who got his nickname from a high school football coach in an allusion to his Ken-doll good looks, came a week after authorities discovered the bound and gagged bodies of 72 illegal migrants in the northern border state of Tamaulipas. The Zeta crime gang allegedly carried out the massacre.
"The savagery committed against migrants a few days ago is another expression of this diversification of criminal activities," said Calderon, who pointed out that drug trafficking groups in Mexico have morphed into international crime organizations that increasingly make their money by extortion, kidnapping, piracy, robbery and contract killing.
David Johnson, assistant secretary of state and chief of the Bureau of International Narcotics and Law Enforcement Affairs, was in Mexico this week to open a new joint U.S.-Mexico office designed to monitor the $1.6 billion in drug-fighting aid the United States has committed.
Johnson was cautious in his praise but said Mexican law enforcement agencies are making progress in their reforms. Earlier this week, Mexican officials revealed that more than 3,200 federal police officers - about 10 percent of the force - have been fired since May after failing drug screening, financial probes and lie detector tests.
"They are building capacity, but they are not there yet," Johnson said of the police. "But we have a receptive partner to work with. At the political level, they have the political will to do it."
Since 2006, more than 28,350 people have been killed in homicides that authorities say were linked to organized crime, according to the Mexican goverment.
Mexican authorities say the vast majority of the deaths resulted from fighting between cartels. The conflict between Joaquin "El Chapo" Guzman's Sinaloa cartel and the Ciudad Juarez cartel accounted for 8,236 of the murders, or 36 percent.
Drug violence in Ciudad Juarez hit an all-time high, with 336 murders in August, according to the local media tallies. The border city of 1.2 million people is on pace for a record number of homicides this year, with 2,029 so far in 2010, accounting for more than a quarter of all the killings in Mexico.