2:45 P.M. EDT

There have been efforts to work, I think, on a regional basis here and the Caribbean, Central America and Mexico. We're not working well everywhere. I think we all know that and we are worried about the prolonged risk of areas that are more difficult for effective pressure to be applied. We're worried about those areas becoming havens, if we let this continue.

So the goal is to do as much damage, as rapidly as possible, to these forces of violence and drug trafficking and to keep them from spreading. There is this -- there is a kind of cynical expectation here that it's a balloon. You all have heard this, do you think? You push down one place. You don't really make any progress because it's really just growing someplace else.

The fact is, and what I think is important to say here, in regard to coca cultivation, for the first time, I think, in the last 20 years, the aggressiveness with which things are being pressed in Colombia is so aggressive, it has not been able to respond by growing elsewhere. There have basically been static rates of cultivation in Peru and Bolivia, which have been the previous areas and still are areas of significant cultivation.

There has not been measured growth into Brazil or Venezuela or Ecuador, at this point. Now, we always are concerned about this. But again, remember, this is not about plans. This is about organizations and people who use addiction as a business, who use violence to protect that business. We are going after those organizations and people. The Colombians are going after those organizations and people. The Mexican Government is going after those organizations and people.

We're trying to deprive them every place where they're vulnerable: movement, money, facilitation, marketing. And we have had remarkable progress, not only on eradication, but on interdiction, and those capacities continue to improve, largely on the side of interdiction because of better shared intelligence. We are not just looking everywhere. We know where they are and we are using that information more aggressively to go after the supply.

They will try to move and our goal in working together is, of course, to be flexible, as we are with the Mexican Government, as well. But again, don't think of this as spilled milk on a table that we're chasing plants that are being planted all over the place. We intend to attack the plants through eradication and we have with the leadership of President Uribe and the Colombian Government. But make no mistake, the central issue is the organizations and people that carry out this business, and the real eradication has to be bringing those people to justice.

MR. PRINCE: Right here, in the dark blue blazer, Pablo.

QUESTION: Thank you. Pablo Bachelet with Reuters News Agency. The ambassador mentioned the fact that, you know, the continuing of Plan Colombia has to be -- the continued cooperation is something critical. When you were in Colombia, did you discuss the future of Plan Colombia after it expires in 2006, and sort of, what kind of guidelines do you foresee for that future of Plan Colombia?

MR. WALTERS: Yes, we're in discussion with members of the Colombian Government as well as the agencies of the U.S. Government. We're pleased that thus far in the appropriations process Congress has, at this stage -- not done yet, obviously -- agreed to the Administration request for the next fiscal year to maintain funding in this program. We're obviously looking at what is most appropriate as we move along. I think there's no question -- I don't think there is another program of this magnitude that has been in an area which is obviously one that's controversial, in many respects, in the past, that we've had such bipartisan support.

That's in large measure due to the success that's been achieved through the leadership of President Uribe. It's a lot of hard work by Ambassador Moreno and his colleagues. And it's our effort to try to make clear what the benefits are to U.S. citizens in a competitive budget climate, in an area where we have many demands, obviously, on U.S. personnel and resources, that this is an important and worthwhile investment of U.S. resources and personnel.

But make no mistake, the Colombians, we understand are fighting this fight. They are the ones who are taking the casualties in the large numbers that they are, and they are the ones who are bringing justice to their country. And I think that's what makes American congressional leadership and the American people supportive, is these -- is the brave fight, in a fight that we know we have a common security interest, and we also know we fight together because we're a contributor to the resources.

The amount of desertions from some of the armed groups, the weakening of some of those armed groups through the eradication, it means, in part, also that, as President Bush has said, the United States drug consumer is the single largest funder of anti-democratic forces in this hemisphere. We need to change that. We want our freedom and we do not want a perversion of that freedom through abusing drugs to be used to fund the denial of others' freedom and opportunity.

So our goal in reducing demand is nothing less than reducing terror and standing for the rule of law as well.

MR. PRINCE: I haven't called on a Colombian yet. Are you from Colombian media? Please, go ahead.

QUESTION: Sandra Vergara with RCN TV from Colombia.

Mr. Walters, you already mentioned that you had to attend a funeral in Colombia. I would like you to share more with us, how hard was that experience to you? What were your feelings at the time?

And another question, did you have the opportunity to talk with President Uribe about the paramilitary (inaudible)? Do you have something new on that, or any change on that policy?

MR. WALTERS: Well, I think it's always difficult to attend a funeral of people who obviously committed themselves to serving their country, to serving institutions of justice and had their lives cut short. These are young men who were victims of the violence.

I had the unfortunate necessity of also -- I spoke at the funeral of the Dawson family in Baltimore, a mother and father and five children who were killed by drug dealers in their neighborhood because the mother stood up against them and their house was firebombed by them while they were asleep and they died.

This business involves violence, for reasons I alluded to earlier, because nobody will accept poisoning children and enslaving people to drugs that has any modicum of concern about morality or decency and not stand up. So how do you get people to not stand up? You either intimidate them or you kill them. And drug traffickers do both, in our own streets and in Colombia.

In this case, we have much larger sums of money supporting large armed groups in Colombia. And the diminishment of that business for eradication and interdiction has resulted in reports that these groups now have had increasing problems in some areas supporting the armed people. They have in sections of the country difficulty getting arms themselves, and difficulty in maintaining their control through the money they get from the drug trade, and that's good. The goal is to drain the resources out that support the armed groups and the violence that they perpetuate.

I talked to President Uribe about the peace process, which I think we all see as a parallel effort, both the effort to take those who have deserted and left the armed groups and help them get reinserted in society. I visited last time I was in Colombia a school for child soldiers -- the AUC, the ELN, the FARC -- young children, who were pressed into service, kidnapped from their villages, or grabbed and forced to become workers in terrorist groups and armed bands that brutalize Colombia and that were brutalized themselves. These children who were from groups that were dedicated to killing each other were in a school together learning to be children again and getting a chance to be part of a new kind of society in Colombia that President Uribe is making.

We all want peace here, and I think that the evidence of success is no clearer in Colombia than the fact that all the armed groups are now, in one way or the other, talking peace. Now, there is a danger that they're not serious, and President Bush Uribe's acutely aware of that. He's insisted that they really begin, with the ceasefire, that they really begin by serious disarmament, they really begin by measures that will make a difference, that talk is not going to be a tool to win at the table what you can't win on the battlefield, and he's kept the pressure up. And we have been clear that we also want to keep the pressure through extradition on those people who have committed crimes that are charged in the United States against a United States law.

We've discussed this again. There's no ambiguity about this. We understand the positions of both governments. We obviously support peace here, and I think that the fact is, as time goes by, the continued weakening of these groups means that there is the best opportunity there has been in years for peace to be a part of the Colombian future. But how fast that happens depends on whether these groups are willing to commit, whether they're willing to lay down their arms, whether they're willing to meet real criteria of real criteria of real reintegration into society, and that's a matter for the Colombian Government to negotiate.

But President Uribe has been very clear-sighted about this, he's been very direct about this, and we have also been clear that, as a part of this that is relevant to U.S. laws and interests, that extradition will continue to be a concern and a priority for the United States, and we continue to request -- and make extradition requests, and Colombia continues to extradite individuals that are indicted under U.S. law.

MR. PRINCE: Let's go right here in the blue, and then back to Laura in the back.

QUESTION: Mr. Walters, hello. My name is Maribel González. I am the correspondent of Reforma, a Mexican newspaper.

When you were in Mexico last week, I understand that you talked about the efforts the present Government of Mexico is doing, but, at the same time, you said something about Mexico still being the crossing-point, an important crossing-point for the drugs coming to America.

Yesterday, the Attorney General Macedo said that the Mexican Government has done its part and has ended with the -- what he called the legends of narcotrafficking.

MR. WALTERS: The what of?

QUESTION: The legends --

MR. WALTERS: Okay.

QUESTION: -- of narcotrafficking, and that now is time for other states -- he was talking about the U.S. -- to do something about the demand. I know you just said that it's very important to do both, but what I mean is, do you have estimates, like what percentage of drug that comes to America still comes via Mexico? And even without the big names from the legends of narcotrafficking out there, how strong are the Mexican narcotrafficking organizations yet?

MR. WALTERS: Well, the short answer to the last part of the question is they're not as strong as they were when President Fox took office. Significant numbers of the most powerful kingpins have been apprehended and are in Mexican prisons. And those who were thought, you know, the same way we had the Medellin and Cali Cartel leaders, who were thought to be immune from justice, that they could buy anybody or intimidate anybody, well, almost all of them are in jail or dead today. And many of the-- of those who became the most powerful drug traffickers in the atmosphere in their place, through dollars from largely U.S. consumers in Mexico, are now in increasing numbers in Mexican jails and we are working with the Mexican Government as well to seek the extradition of some of those individuals.

Yeah, I think that the weakening of these groups is important, and I know there is some kinds of discussion that while there's a few powerful groups, if you shatter them, you get many smaller groups. Smaller criminals are better than larger criminals. Smaller criminals do not have the power of larger criminals. Smaller criminals can be handled more by direct law enforcement and police action and don't require forces of national security and the kinds of threats that you face with some of these more powerful groups in whatever countries they exist.

Organized crime in the United States that was so powerful several decades ago had to be smashed. Now, yes, we still have criminal gangs in groups, and we still have some remnants of organized crime, but our nation is safer in those areas where organized crime became a power unto itself. That's always true, and it will continue to be true, and it can be particularly important in a time of the increased terror threat, where criminal organizations can be bought as an instrument of allowing people to conduct attacks involving weapons of mass destruction on innocent populations.

We would be fools to believe that those who are criminals and will engage in terror and murder as a part of their business have a scruple about whether they're going to actually support someone who's a real terrorist. Trying to decide between acceptable small-level terror and large-level terror is not something we're going to trust the security of our country to and I don't think other countries are either.

So I believe that, in fact, yes, the Fox government has been decisive in attacking major traffickers in larger numbers than we have seen before, and the lieutenants. There is still, obviously, as my discussion with Mexican officials indicated, they understand well, need to follow through. We want to buttress them by attacking the arms of those businesses in the United States more aggressively. And I have challenged -- I met with the U.S. attorneys of the United States that met last month and challenged them to use our consolidated intelligence on major organizations to more systematically and rapidly break down their wholesale and distribution elements in key regions of the United States, and we are working to do that in the months ahead.

So we are following the Mexican example. We are following, in fact, both the earlier Colombian example of systematically going after and breaking the power of these groups.

Now I know that in the past, the concern has been, well, these groups reconstitute themselves or they reconstitute themselves in another form, the armed groups you see in Colombia. And I think that is the lesson that we have to follow through.

We can make progress. We have had no difficulty showing that when we push back on demand or supply, the problem gets smaller. The difficulty has been follow-through, in taking, when you begin to make positive progress, and shrinking this down dramatically. And I think that's what all of our peoples want, that's what we all want to see, is that we can make both demand and supply dramatically smaller and keep it smaller on a larger scale.

But I will point out that, again, in this hemisphere, for the first time in, I think, an unprecedented way in any other place in the world, both supply and demand of key drugs is down. That's not happening in Europe. That's not happening in other parts of the world. And it's happening not by accident; it's happening because the tools and leadership are being aligned in ways that are making a difference. And that's why we want to continue to support and accelerate this progress.

QUESTION: (Inaudible.)

MR. WALTERS: The rough estimate we have of cocaine, for example, is that roughly 70 percent to 75 percent of cocaine is smuggled through Central America, up through the (inaudible) and across our southwest border. The, roughly, other 25 percent is -- has been moving through the Caribbean. The movement of heroine is largely a division of heroine production between heroine that's being produced and refined in Colombia through poppy growth there -- and the little bit of poppy growth that we've been able to identify so far, and we're still looking at it, in Peru, and poppy growth in Mexico.

Marijuana comes into the United States from both Canada, Mexico and through domestic production here. We do not have precise figures on relevant ratios that are projections are roughly a third from each source, especially as Canadian production grows, we're more aggressively going after both indoor cultivation within our borders and the cultivation that's happening in our national parks.

I should point out that while I was in Colombia, I was able to fly over areas of Colombian parks, which had been a point of debate about eradication. These were areas near -- non-park areas and park areas. Outside the parks, some of the coca cultivation was sprayed and killed. Inside the parks, where they, thus far, have not sprayed, but have tried to do a manual eradication on it -- these are -- this is very rough terrain, very steep hillsides. It's difficult to operate on foot and to eradicate, it's difficult to plant, which I think shows how much the pressure of the Colombian Government has driven people to less ideal circumstances to produce.

But where they are cultivating the coca, near the north coast, where there are areas of streams, is also the most beautiful country I think anywhere in the world. They are, of course, also processing it, not only cutting down the jungle and destroying the biodiversity there, but they are processing it by putting dangerous chemicals into the watershed, running it into nearby rivers, into the ground, and damaging that environment.

It's always puzzling to me when we sometimes have these debates, even the United States, when people talk about eradication being dangerous to the environment. People who cut down the trees, people who put acids and petrochemicals into the watershed are those who are producing drugs. They are the ones who are damaging the parks and the environment, and it's another, I think, great threat that drug consumers are contributing to that needs to be stopped.

QUESTION: Yes, Laura Bonilla, France Presse, Latin American Service.

I think almost two years ago, you said that in the next 12 months, we are going to see changes in the drug availability. From then on, in almost every briefing that you have given us and I have been to, you've said the same thing. What has -- I mean, what happened, we haven't seen those changes in supply and quality and price of the drugs? Or do you have any signs now that things are going to be different?

MR. WALTERS: Yeah, I mentioned this. I had some remarks that I made in Colombia that were misreported. But, first of all, there are signs of this. If you look at UN data from Europe, for example, for 2002 to 2003, a number of those countries are reporting increases in prices and indications of reduction and availability. I think we're at the beginning yet.

The other indications, I think, that, obviously, we would like to see sustained declines and disruption more widely in this hemisphere and in the streets of the United States. At this point, for the first time, our intelligence estimates predict that will happen within this 12 months. There have been some -- we don't have -- these traffickers, as you know, are not kind enough to give us their annual business reports. There have been a number of circumstances that we've tried to account for in these estimates.

First, as you know, Colombian forces, in going into the former safe haven areas of the FARC, have found areas of cultivation that were more extensive than before. There have been some surmises, although we do not have precise information, that stockpiles in those areas were moved out after the Uribe government abandoned the safe haven program and caused the FARC to move some of those.

We're not sure how much is in supplies and -- there has been some speculation that some of the paramilitaries in the movement toward discussions of longer lasting peace have unloaded stockpiles of cocaine. But again, I want to emphasize, we do not have precise measurements of the magnitude of these businesses. But, I repeat, UN data from Europe suggests that between 2002 and 2003, there have been changes that suggest reduced availability. We have seen increases, not only in eradication, but increases in seizures. We believe the rough pipeline to the streets of the United States is about 12 months, so that's why we anticipate that we will begin to see these in the next 12-month period.

We've already seen some indications of this in what goes to Europe. We also don't know, while there is speculation that the price, being higher in Europe, would make Europe a more attractive market. It's obviously farther away. It's obviously been an even greater risk, in some ways, given the seizure and disruption that's happened in the last 12 months. The U.S. market may be a closer and more valuable substitute, and there may be an effort to try to move more toward that market in this environment.

We also don't have precise numbers about consumption in Brazil. We do know that Brazil has become a major consumer of cocaine, and we do not know exactly how much growth there has been in that market.

But, again, the reason that we can make these predictions is, given the limits of our knowledge here, is simply the magnitude of the damage being done to the productive capacity of the cocaine business by eradication and interdiction.

QUESTION: Just a follow-up. But given the dramatic drop in production that you've mentioned, weren't you expecting to see some changes before, to see some, you know, reduction in the supply before?

MR. WALTERS: Yeah, again, the three percent reduction from eradication over the last two years has to be against the backdrop of we believe that there is roughly a one year lag between the farm and the delivery to consumers in the United States. So the first appearance of that first 15 percent from a year -- from the first year of eradication will begin to become visible. Our ability to detect, you know, a non -- a 15 percent change over this large system is limited. But again, that rate of reduction is continuing. It may be even accelerating. We hope we can accelerate it through both eradication and interdiction. So we believe we will see more of it.

But, again, week to week, month to month, you know, you have to figure a 15 percent change over a 12-month period is a little over one percent per month. It's hard to detect that in the individual sale. It's easier for us to detect these things in larger aggregates, and that's what you see, I think, in the UN data for Europe is annual data that is aggregated and you begin to see changes. And so that's what we think may continue to appear.

Also, from the time our data is collected till the time it's reported, there's a bit of a lag. So there's roughly 18-month lag in what we see happening to what we actually see reports of on retail sales.

But we're all impatient, I know. But, you know, this is probably one of the things where once it happens, everybody will say, well, of course it was going to happen, everybody knew that. But remember, it wasn't always certain.

QUESTION: I would like to follow up.

MR. PRINCE: Yes, go ahead.

QUESTION: Sergio Gómez from El Tiempo of Colombia.

At some point, either Congress or the U.S. public is going to start to wonder if the dollars that have been spent in Colombia are worth it. Do you think -- and that's tied to the fact that that prediction that you're making, that in 12 months there's going to be -- this has to show up in the market that the availability is not there. If in 12 months, it's not there yet, do you think that would, maybe put a cast of doubt in Congress when it comes to approval, a new chunk of money for Plan Colombia?

MR. WALTERS: Well, I think Congress is going to look at these investments in their overall context: what's happening, what progress are we making. I don't think there's any question that the bipartisan support for this program that has continued is on the basis of improvements, both in reducing the drug business, but also in reducing terror, in providing greater stability in the region, in providing economic development.

And again, even though I haven't been in Washington so long that these hundreds of millions of dollars are not significant money, we spent $12.5 billion of federal resources on drug control. The international program is a very small portion of that. Forty-five percent of that money goes to demand reduction, prevention and treatment. We're spending over almost $3 billion, when you add the money that our veterans' hospital system, the largest system in the country, spends on drug treatment to the $2 billion in block grant money and the additional $100 million the President spent -- just released on treatment.

These are balanced investments. We are not trying to do this -- in the past, I think there's been a misunderstanding. You either kind of try to stop the supply, you try to do enforcement, you try to do foreign programs, or you try to do prevention and education. We need to do both, and we have -- we cannot emphasize that enough, because I think there is still a sense in which they -- the obvious fact that this is a market phenomena does not translate into the way people think about this phenomena.

You need to stop drug use before it starts. You need to treat those who use. You need to stop those who are the ones who began using, don't look like a drug addict, but are the ones that bring that behavior to others. Nobody looks at a drug addict as a street person and says, "I want to be like him. Give me some drugs." They get this from their friends who are exciting and charming and love them, and say, "I use drugs. You should, too." That's the lie.

And in addition to that, we need to control supply, because if there’s more of these dangerous, addictive substances around, we'll have more people who become victims of it. If they're cheaper and more potent, we get more victims of it. We have to do both. And if we don't do both, gains in one part of this, if it declines in demand or declines in supply, will be undermined by higher demand in dollars, rebuilding supply, or larger quantities undermining the progress we made in reducing use.

So we have to do both. And I do think that Congress is looking at this in terms of other demands on resources and saying, "Is this worthwhile? Is this a good investment? Should we put this money somewhere else?" We make those arguments every day. I spend a great deal of my time with my colleagues up in Congress arguing for the benefit of these resources.

Ambassador Moreno, I don't know if there's anybody else in Washington who's as effective as he in representing his government in these joint efforts before the Congress. But I'm sure he will tell you, and I can give him the chance to, that members of Congress have very hard questions about this. And it's not that we don't get the questions, and it's not that they don't expect results. It's because we've been able to tell them there are results. We've been able to answer those hard questions, and to their satisfaction, that even in a competitive budget environment, they're willing to support these programs.

We need to follow through. We've made commitments to reduce the production of drugs. We believe that we are going to meet those commitments, but we also believe that meeting those commitments is what people should expect of us. If government is going to have the confidence of people here and abroad, it has to keep its promises, it has to show it can do what it's necessary to do to protect the people. And we're not here to kind of say, "Well, we took the money, but don't hold us accountable." That is irresponsible government, and ultimately, it feeds the kind of cynicism that makes people lose confidence in the institutions of justice and government.

I think both President Uribe and President Fox and President Bush certainly believe government is a sacred trust. You do your duty, and if you can't do your duty, you should be replaced.

MR. PRINCE: We're almost out of time. This will have to be our last question. José, yes, right there, in the blue.

QUESTION: José López, the Mexican News Agency. Could you be more specific about what is the purpose of this U.S.-Mexico delegation meeting about drug estimates? Is there any official discrepancy between the U.S. and Mexico regarding marijuana and opium production in 2003? And, I guess, is there any policy implication, if there's any -- if you thought the two countries have not an agreement on this?

MR. WALTERS: I think there -- take those in reverse order. The policy implication is, we would like to know how the problem is so that we can measure whether we're putting sufficient resources and whether they're being deployed effectively to shrink that problem. And yes, it's not so easy to estimate these things.

Again, if you look at the actual circumstances here, while drugs are a big problem, where there are -- from plants being grown, they're grown in very small areas and they're very -- on very small parts of the countries involved: the United States, Mexico or Colombia. It's not so easy to find them. It's not so easy to estimate how much is over -- is being produced overall. We use a combination of investigative information, intelligence information, observation from people in the field, observation from our military and national security forces in these countries where we share information. We try to get a sense of demand information.

We had an estimate last year of increases in, for example, marijuana production from Mexico that were quite dramatic, as I said. Attribution was for the -- was because of the unusually good weather for all crops in these areas that caused growth to be greater, even though there had been greater eradication.

We're not -- I'm not confident that those numbers are entirely accurate. The magnitude of increase that was presented in those estimates, and that were made in the best of faith, would have caused us to anticipate significant increases, for example, in emergency room mentions associated with these drugs, testing, and other kinds of prices and availability that would have shown a huge increase in quantity available. We've seen no signs of that. Marijuana is not a drug, as you know, that keeps a long period of time.

So we've over halfway through this year, and the production estimates, I'm concerned, may have been too large.

Again, we want to find ways of measuring it with both governments that are both -- give us a sense of what progress we're making so we can be accountable, but also, these estimates are the basis for deploying eradication resources, deploying interdiction resources, going after the money and the processing, going after the marketing.

So, again, these allow us to look at this as a business and decide where there are vulnerabilities, where there are particular dangers we need to be correspondingly more aggressive about, and to tell whether we're making progress.

So we are increasingly, because of what's been, I think, developed both in Colombia and Mexico, we're sharing the highest level coordination and information between our governments, because we're -- we are trying, we're respecting the sovereignty of the governments to not let our countries be used as a staging ground for crime and violence.

QUESTION: Discrepancies rather between your office and the DEA?

MR. WALTERS: No, our numbers are the production, are the result of multiple agencies sitting down together with our best information, and I want to be clear. I'm not saying that anybody's not doing a professional job and doing a very difficult and doing a good-faith job. But I also think that, as I said, I think, in one of these briefings earlier, the President asked me to take this job. He said, "I'm not interested in doing the best we can against the drug problem. I'm not interested in saying that we tried and made our best effort. That's a minimum requirement for public service, that you try your best. Anybody that's not prepared to do that should not hold the public trust. I want to make the problem smaller. I want to overcome the cynicism that we can't reduce the supply and demand of drugs, because I believe that's false, and I want somebody who's going to accept that responsibility under my direction to make that happen. That's our goal."

So what we want to do with these estimates is provide both accurate and more increasingly accurate information and to bring that together from multiple sources, not only to be able to report to people through the press -- are we making progress? Do we need to do more here? What's working and what's not working? But we also want to be able to use that information to target operations and to put them on the problem more aggressively. Our goal is to make the future of drug trafficking increasingly difficult and to make it increasingly impossible to consider this an area where there is hope for making a living and making a living with some degree of confidence that you're not going to be in prison.

And I think that is certainly the attitude I found in my colleagues, in both Colombia and Mexico, and our goal is to be as impatient as we can to get there.

MR. PRINCE: Thank you very much, Director Walters. Thank you, Ambassador Moreno. Unfortunately, we are out of time. That concludes our briefing.
[End]