A new generation of Colombian drug traffickers, light-years ahead of the traditional Medellin and Cali cartels in using the Internet and other modern technology, has sharply increased cocaine production and smuggling in the past two years despite growing budgets for law enforcement, according to senior U.S. and Colombian intelligence officials.

These officials in the United States and Colombia said the nimble new organizations and their high-tech gear are reversing the gains of earlier years that crippled the older, better known cartels. Despite having more resources than ever before, the officials acknowledged that they are finding out little about the new organizations that now control the multibillion dollar business of producing cocaine and heroin in Colombia and moving it, mostly through Mexico, to consumers in the United States.

"It is a whole new generation of traffickers who have carefully studied and learned from the mistakes of the groups that went before them," said Gen. Rosso Jose Serrano, director of the Colombian National Police who oversaw the dismantling of several major drug cartels. "They maintain an extremely low profile, they mix their licit and illicit businesses, they don't carry out terrorist acts and they operate in small, autonomous cells. They are much harder to fight than previous groups because they are much harder to find."

Unlike the previous organizations, the new Colombian traffickers contract out most of their jobs to specialists, who work on a job-to-job basis rather than as part of an integrated structure that would be easier to detect, the sources said. Most Colombian cocaine is sold in bulk to Mexican drug trafficking organizations, which also have undergone major changes in the last several years. They assume the risk of transporting it to the United States and distributing it.

"When you take out the leadership of an organization now, you find that underneath there is really not an integrated structure," one U.S. official said. "It is smart guys going through their Rolodexes and calling up people for specific jobs. . . . They are smarter, less visible and cause us all kinds of trouble."

While increasing in sophistication, the traffickers have greatly expanded the cultivation and improved the quality of coca--the raw material for cocaine--in Colombian territory controlled by Marxist-led guerrillas or right-wing paramilitary groups. A senior U.S. Justice Department official said the estimate that Colombia produced 165 metric tons of cocaine in 1998 "will at least double and maybe triple" in 1999.

At the same time, the official said, cocaine production in Peru and Bolivia has declined because coca cultivation has dropped significantly in both countries. Until two years ago, Colombian drug cartels relied heavily on coca grown in Bolivia and Peru to produce cocaine, but they now grow more high-grade coca than either of the other two Andean nations.

This means, according to U.S. and Colombian officials, that overall estimates of cocaine production in South America may not increase as dramatically as the estimates for Colombia alone, but that, after years of decline, overall drug production is rising significantly and more cocaine than previously estimated is moving into the United States.

Colombian drug traffickers now control most cocaine production from the raw material to the finished product, giving them more control of the drug-making process and enhancing their profits when the finished cocaine is sold to Mexican delivery specialists.

The boom in Colombian cocaine production comes as the United States has ratcheted up aid to the beleaguered government of President Andres Pastrana. In 1999, the United States provided Colombia with $289 million in aid, mostly to the police and military to fight drug trafficking. The Clinton administration is preparing to request a supplemental bill early next year of at least an additional $1 billion over the next three years.

Unlike the previous waves of drug traffickers, who were allied mostly with far-right paramilitary squads, the current leadership is prospering by dealing with all sides in the Colombian conflict.

Most coca is grown in the southern and western regions, where the government has no real presence and where the Revolutionary Armed Forces of Colombia (FARC) makes millions of dollars by protecting the coca fields, taxing cocaine production and guarding laboratories and airstrips. Paramilitary groups allied with the army also profit from the cocaine trade by protecting trafficking routes and running laboratories in areas they control.

The clearest window into the changes and growth in Colombian and Mexican drug trafficking structures was provided by Operation Millennium, a joint U.S.-Colombian operation that netted 31 drug traffickers last month, including several identified by the Drug Enforcement Administration (DEA) and Colombian police as kingpins who moved more cocaine than Pablo Escobar of Medellin or the Rodriguez Orejuela brothers in Cali.

Among the most important, according to the DEA, were Alejandro Bernal, Fabio Ochoa and Orlando Sanchez-Cristancho. Sanchez-Cristancho, wanted for murder in Colombia, is in custody in Ft. Lauderdale, Fla. The man identified as the group's main Mexican operative, Armando Valencia, has eluded arrest.

U.S. and Colombian officials found the traffickers were making use of the latest technology to protect and advance their business. Bernal's operation kept in touch by using Internet chat rooms protected by firewalls that made them impossible to penetrate, officials said. In addition, each part of the operation fed its information on the day's sales and drug movements to a computer on a ship off the coast of Mexico, the officials said, so that if one computer were taken down, it would be impossible to trace the rest of the network.

The traffickers also had access to highly sophisticated encryption technology, far beyond what law enforcement has the capacity to break quickly, sources said. One U.S. official said it took some of their best computers 24 hours to crack a 30-second transmission by the traffickers, making the exercise pointless. They also used sophisticated cellular phone cloning technology, stealing numbers that were already assigned to legitimate users, using them for a short period of time, then moving on to new numbers.

These new techniques helped the traffickers move hundreds of tons of cocaine over several years before being detected. DEA officials and Colombian authorities said Bernal's group, working with Mexican organizations led by Valencia, shipped 20 to 30 metric tons of cocaine every month to the United States.

Only days before the arrests last month, Barry R. McCaffrey, the Clinton administration's drug policy director, estimated that a total of 350 metric tons of cocaine from the entire Andean region was entering the United States every year. "This group was shipping what previous intelligence estimates had shown to be everything entering the United States," a U.S. official said. "Numbers are all estimates, but clearly we have a lot more coming in than we thought."

The irony, law enforcement officials said, is that many of the changes in drug trafficking strategy are driven by past successes in bringing down less sophisticated and more visible drug trafficking organizations.

"We estimate there are several hundred small cartels now operating in an atomized fashion," said a Colombian intelligence official. "Several of those groups fed into the organization we dismantled. But there are several other people out there as big as Bernal, who can put loads together from small organizations, and we don't even have them identified."

U.S. officials agreed there is little intelligence on the new groups. Until Operation Millennium, U.S. officials said they had not even heard of Armando Valencia, one of the biggest drug transportation operators in Mexico.

According to Colombian and Mexican officials, Bernal had a Miami-based business selling bathroom tiles when, in the mid-1980s, he was taken to Mexico to do a decorating job for Amado Carrillo Fuentes, the leader of the Juarez cartel. Bernal and Carrillo Fuentes became close friends, according to Mexican, Colombian and U.S. officials, growing so close that Carrillo Fuentes was named the godfather of Bernal's twin daughters.

Bernal was arrested in Mexico in 1989 with nearly 1,280 pounds of cocaine. When he was released three years later, he decided to return to Colombia, the sources said.

At the time, Escobar's Medellin cartel waged an open war against the state through a terrorist campaign and high-profile assassinations. Escobar and most of his top henchmen were killed in 1993. The Cali cartel then emerged as the premier trafficking structure, buying political influence and judicial protection. The cartel's dominance ended in 1995, when its leaders were arrested or killed in a series of police raids.

With few strong leaders left in Colombia, intelligence sources said, Bernal slowly began assembling specialists from remnants of different organizations and working with his Mexican connections to assemble a formidable cocaine pipeline.

Carrillo Fuentes died while undergoing cosmetic surgery in July 1997, and shortly after that Colombia revived its extradition agreement with the United States. Fearing indictment and possible extradition if he moved his drugs directly to the United States, Bernal cut a deal in early 1998 with a Carrillo Fuentes lieutenant named Armando Valencia, Colombian and Mexican officials said.

The alliance prospered, according to U.S., Colombian and Mexican officials, because Bernal and Valencia were able to broker deals with drug trafficking organizations often at war with each other: Bernal with the FARC and paramilitaries, and Valencia with the Juarez cartel and its main rival, the Tijuana-based Arellano-Felix organization. Both leaders were able to remain undetected by law enforcement officials for years.

One factor in the rapid growth of the Bernal-Valencia organization, according to U.S., Mexican and Colombian officials, is that Bernal would pay for cocaine delivered to him in Colombia even before he sold it to Valencia, thereby removing the risk for small Colombian traffickers. In addition, Valencia had a reputation for getting his loads safely to the United States and guaranteeing that he would cover the losses of any load that was lost or confiscated.

Law enforcement's big break came in December 1998, when the DEA, with a warrant, searched the south Florida home of Carlos Jaramillo, one of the organization's top U.S. operatives, according to Colombian and U.S. officials. The DEA seized Jaramillo's computer and found a host of information on the group's computer connections.

"It really opened our eyes," said one U.S. official. "What we saw raised serious concerns that law enforcement won't be able to access traffickers' communications."

Correspondent Molly Moore in Mexico City contributed to this report.

CAPTION: HIGH-TECH TRAFFICKERS (This graphic was not available)