U.S. Customs Commissioner William von Raab, escalating U.S. public criticism of Mexico's handling of drug traffickers, testified yesterday that there is "massive" official corruption "up and down the ladder" in Mexico and said he believes the governor of Sonora state owns four ranches that produce opium and marijuana.

The accusation came in an unusual hearing of the Senate Foreign Relations subcommittee on Western Hemisphere affairs in which several administration officials harshly criticized the Mexican government for tolerating drug trafficking and related corruption as well as its growing foreign debt.

Previous administration criticism of the Mexicans generally has been couched in more diplomatic language.

Von Raab complained of "an ingrained corruption in the Mexican law enforcement establishment," which he described as "massive . . . all the way up and down the ladder . . . . Until it is corrected, we will never solve the problem."

The Mexican Foreign Ministry, in a statement last night, said "Mexico categorically rejects the accusations and calumnies" directed against it, special correspondent William Orme reported from Mexico City.

[In addition, Mexico's ambassador to the United States was instructed to present a diplomatic protest note to the State Department today "demanding an explanation" for the "libelous" and "interventionist" comments by the U.S. officials, the statement said.]

Leonardo Ffrench, a spokesman for the Mexican Embassy here, called the hearing "biased and partial."

"Of course there is corruption in Mexico, but it is not massive," he said. "There are several isolated cases, but due to the publicity around them, many persons think it is generalized all over the country."

Subcommittee Chairman Jesse Helms (R-N.C.), who held a closed hearing on the same subject Monday, said the Mexican government had pressured him to cancel the hearing. "I was called three or four times and told that this is going to fracture relationships, that this is too sensitive . . . . It has been charged that these hearings are inappropriate and somehow interfere with Mexican sovereignty . . . . "

Federal law enforcement sources confirmed earlier this year that Miguel Felix Gallardo, a fugitive drug trafficker wanted in connection with the murder of a U.S. drug agent last year in Mexico, had been a guest at the ranch of Antonio Toledo Corro, governor of Mexico's Sinaloa state. Yesterday's testimony was the first public allegation that another Mexican governor might be involved in drug trafficking.

Asked whether Felix Gallardo also had been a guest of the governor of Sonora, von Raab said, "I can't confirm that. All I can say is that the governor owns four ranches in Sonora that are believed to grow opium and marijuana." He added that the ranches are under the protection of the Mexican Federal Judicial Police.

Ffrench, asked about Sonora Gov. Rodolfo Felix Valdes, said, "I don't have any specific information on it, but I can tell you he is a very well-known, honorable person . . . I cannot believe these accusations."

Von Raab, asked if relatives of Mexican President Miguel de la Madrid are suspected of drug trafficking, said, "We have no comment on that at a public hearing."

Von Raab was accompanied by Elliott Abrams, assistant secretary of state for inter-American affairs, and representatives of the Drug Enforcement Administration and the Immigration and Naturalization Service. All testified that the border problem is worsening and threatens to destroy relations between the United States and Mexico.

Abrams said the Mexican government would be "angered by this kind of discussion in public . . . But our purpose is not to call names. It's to look forward to a better chance in the future . . . . They have got to get organized to stop this before it gets too late, and it can get too late."

"We have told the Mexicans in no uncertain terms that we are deeply troubled by widespread drug-related corruption . . . ," Abrams said.

Mexico is the top marijuana and heroin source for the United States, von Raab said, and serves as a conduit for more than 30 percent of the cocaine entering the country.

Von Raab said there is no way to secure the border while allowing the free flow of commerce and travel that goes on today. "There's no way to secure an 1,800-mile border. You have to be able to rely on the integrity of your neighbors."