Jack Riley is a special agent in charge of the Chicago field division of the DEA. The DEA and other federal and local police are targeting Mexican drug cartels in Chicago, and throughout the United States. (Carlos Javier Ortiz /For the Washington Post)

A few miles west of downtown, past a terra-cotta-tiled gateway emblazoned with “Bienvenidos,” the smells and sights of Mexico spill onto 26th Street. The Mexican tricolor waves from brick storefronts. Vendors offer authentic churros, chorizo and tamales.

Chicago’s Little Village neighborhood is home to more than 500,000 residents of Mexican descent and is known for its Cinco de Mayo festival and bustling Mexican Independence Day parade. But federal authorities say that Little Village is also home to something else: an American branch of the Mexican Sinaloa drug cartel.

Members of Mexico’s most powerful cartel are selling a record amount of heroin and methamphetamine from Little Village, according to the Drug Enforcement Administration. From there, the drugs are moving onto the streets of south and west Chicago, where they are sold in assembly-line fashion in mostly African American neighborhoods.

“Chicago, with 100,000 gang members to put the dope on the street, is a logistical winner for the Sinaloa cartel,” Jack Riley, the DEA’s special agent in charge of the Chicago field division, said after a tour through Little Village. “We have to operate now as if we’re on the Mexican border.”

It’s not just Chicago. Increasingly, as drug cartels have amassed more control and influence in Mexico, they have extended their reach deeper into the United States, establishing inroads across the Midwest and Southeast, according to American counternarcotics officials. An extensive distribution network supplies regions across the country, relying largely on regional hubs like this city, with ready markets off busy interstate highways.

Cartels push methamphetamines, heroin

One result: Seizures of heroin and methamphetamine have soared in recent years, according to federal statistics.

The U.S. government has provided Mexico with surveillance equipment, communication gear and other assistance under the $1.9 billion Merida Initiative, the anti-drug effort launched more than four years ago. But critics say that north of the border, the federal government has barely put a dent into a sophisticated infrastructure that supports more than $20 billion a year in drug cash flowing back to Mexico.

The success of the Mexican cartels in building their massive drug distribution and marketing networks across the county is a reflection of the U.S. government’s intelligence and operational failure in the war on drugs, said Fulton T. Armstrong, a former national intelligence officer for Latin America and ex-CIA officer.

“We pretend that the cartels don’t have an infrastructure in the U.S.,” said Armstrong, also a former staff member of the Senate Foreign Relations Committee and now a senior fellow at American University’s Center for Latin American and Latino Studies. “But you don’t do a $20 billion a year business . . . with ad-hoc, part-time volunteers. You use an established infrastructure to support the markets. How come we’re not attacking that infrastructure?”

A reported 8.9 percent of Americans age 12 or older — 22.6 million people — are current users of illegal drugs, according to the Substance Abuse and Mental Health Services Administration, part of the U.S. Department of Health and Human Services — up from 6.2 percent in 1998. Demand for and the availability of illegal drugs is rising.

Charles Bowden, who has written several books about Mexico and drug trafficking, said policy failures have exacerbated the problems. “The war on drugs is over,” he said. “There are more drugs in the U.S. of higher quality and at a lower price.”

8 A national network

Of the seven Mexican organized crime groups that traffic drugs across the United States, the Sinaloa cartel dominates the business, selling most of the heroin, marijuana, methamphetamine and cocaine. One Mexican national-security expert estimated that the cartel moves a kilo of cocaine over the U.S. border about every 10 minutes.

A photograph appears on a television screen at the Chicago DEA office of Joaquin Guzman. Guzman is a fugitive Mexican drug lord who heads the world's largest and most powerful drug trafficking organization, the Sinaloa cartel. (Carlos Javier Ortiz /For the Washington Post)

The Sinaloa, named after a Mexican Pacific coast state, is headed by Joaquin “El Chapo” Guzman, one of the world’s most brutal and sought-after drug lords.

Officials say the Sinaloa cartel typically sends its drugs across the border to distribution cells in cities such as Los Angeles. From there, dozens of operators — including truck drivers who conceal the packages amid shipments of fruits, vegetables and other consumer goods — bring the drugs east and north, unloading them at nondescript warehouses, condominiums and duplexes managed by the cartel.

The DEA has estimated that Mexican drug trafficking organizations now operate in 1,286 American cities. That number, however, includes both major regional hubs such as Chicago, with direct links to large Mexican cartels, and scores of communities where smaller trafficking groups happen to be led by Mexican citizens who may have no operational connections. The DEA said it was not able to provide a full list of the 1,286 cities.

Besides Los Angeles and Chicago, Atlanta has emerged as a major distribution hub. The access to interstate highways and a growing Hispanic population allow cartel members to travel freely and blend into the general population, leading the organizations to bulk up operations.

In Atlanta, officials said, four rival cartels are battling for control: the Beltran Leyva; remnants of La Familia Michoacana; the Knights Templar, a splinter group of La Familia; and the Sinaloa.

Seizures of heroin in the city have increased 70 percent in the past two years and traffickers are selling a better quality of “Mexican Brown” heroin to many who are already addicted to pharmaceutical painkillers, said Harry S. Sommers, the DEA’s special agent in charge of the Atlanta field division. The drug is now mostly being smoked or snorted, not injected by needle.

“There’s not a significant difference between Oxycontin and heroin,” Sommers said. “Sometimes they give the heroin away at first and get people hooked on it.”

The increasing amount of heroin agents are seeing in Chicago and Atlanta is reflected nationwide, a ccording to the DEA. In the first nine months of this fiscal year, 1,394 kilograms of heroin were seized, compared with 487 kilos of heroin seized at the southwest border in fiscal year 2008 and 773 kilos in 2009. Heroin arrests nationwide are up, too. In the first nine months of this fiscal year, 3,350 people were arrested on heroin charges, compared with 2,510 in 2008.

Mexican meth

Officials say the cartels’ ability to infiltrate U.S. cities reflects calculated business decisions.

In recent years, U.S. officials have cracked down on American-made methamphetamine by passing federal and state laws to restrict the sale of the precursor chemicals used to manufacture it, particularly pseudoephedrine, a common over-the-counter decongestant for allergies and colds.

The cartels have filled the void. Mexican-produced meth now accounts for 80 to 90 percent of the product sold in the United States, and it is swiftly moving into major urban hubs including Phoenix, Denver, St. Louis, Chicago and Atlanta, according to the DEA.

Federal agents have seized 7,574 kilos of methamphetamine at the southwest border in the first nine months of this fiscal year, compared with 2,237 kilos in 2008 and 3,064 in 2009.

“We’ve seen a sudden increase of meth in Chicago in just the last several months,” said Riley, the special agent in charge there. “Until now, meth has been mostly a rural phenomenon. We haven’t seen this on the streets in large cities. It’s an indication of the cartels seizing the market.”

The Sinaloa cartel has both slashed the price and produced a purer form of meth that gives users a faster and longer-lasting high, Riley said. To get the methamphetamine on the streets, the cartel is using its existing distribution networks.

Experts say Mexican cartels have also been calculating in their use of violence. In Mexico, more than 60,000 people have been killed in the past six years in mass murders, beheadings and mutilations as the cartels have fought for control.

Bowden, who spent years in Mexico writing about the violence, said it’s no accident U.S. cities haven’t seen the same levels of brutality. “In the U.S., murder is bad for their drug business,” he said. “In Mexico, it is business.”

A tenacious foe

Each time the federal government succeeds in prosecuting cartel members, the groups deploy new lieutenants to keep the drugs flowing north and the cash and U.S. guns going south into Mexico.

The DEA and other federal agencies say that they are making strides in combatting organized crime with new “strike forces,” composed of federal, state and local law enforcement agencies. In Chicago, for example, the DEA-led strike force has worked with the FBI; Bureau of Alcohol, Tobacco, Firearms and Explosives; Chicago police; Immigration Customs and Enforcement; and other state and federal agencies to bring down traffickers.

Officials also said large drug busts across the country have netted scores of dealers, thousands of kilos of drugs and tens of millions of dollars in cash.

The Justice Department, in the meantime, is extraditing an increasing number of high-ranking cartel members to the United States for prosecution, including Jesús Vicente Zambada-Niebla, the son of Guzman’s top partner in the Sinaloa cartel and a trafficker who officials say is the biggest Mexican drug kingpin to be prosecuted in a U.S. courtroom.

Despite major drug seizures, Armstrong, the former national intelligence officer, said officials have not scored lasting gains.

“It’s because the U.S. government hasn’t broken the system,” Armstrong said. “They’ve arrested dealers. But the distribution system and its network are alive and well.”

William Booth in Mexico City and Julie Tate in Washington contributed to this report.