Mexican Authorities Frustrated by Jailed Drug Lords : Law enforcement: It’s easier to put traffickers in prison than to stop them from pursuing their illicit trade.

When Oliverio Chavez was convicted of heroin dealing five years ago, his first impulse was to escape from prison, which he did in 1987.

But after the airplane mechanic was recaptured two years ago, police here believe, he decided that he could run his business just as effectively from prison in Matamoros, a city across the border from Brownsville, Tex.

In November, when federal police closed down a Matamoros currency exchange house on allegations of money-laundering, the registered owner told them the store really belonged to Chavez. “Oliverio gives me orders by telephone,” explained Jose Luis Bazan.

Then, Monday, police said, they stood outside Chavez’s cell and stopped two men as they entered with $20,000 in cash. A little later, two more visitors told police they were there to consult Chavez on arms purchases and cocaine trafficking.

And on Thursday the government announced the arrest of seven people believed to be part of Chavez’s gang, an important Mexican contact for Colombia’s Medellin Cartel. The arrests draw attention to a frustration on the part of Mexican law enforcement officials:

Using sophisticated equipment and surveillance techniques, they can arrest drug dealers and put them in prison, but they cannot stop their illicit trade.

A time-honored Mexican tradition of selling cells among inmates and bribing guards allows drug dealers to serve out their terms in luxury. Today’s modern communication systems, with fax machines and cellular telephones, permits them to relay orders to cronies outside prison walls.

U.S. and Mexican officials told The Times in March that they believe that Mexican cocaine baron Miguel Angel Felix Gallardo has run his drug empire from a Mexico City prison since his arrest two years ago. January’s detention of Felix Gallardo associate Clemente Soto Pena and the arrest earlier this month of Baltazar Diaz Vega are part of a continuing effort to break up Felix Gallardo’s network.

U.S. officials would not comment on whether they believe prison-run drug gangs to be a widespread problem. Mexican authorities said they have not launched a specific operation against jailhouse-based drug trafficking.

“The attorney general’s office has various departments to combat drug dealing, whether in jails or through air operations, by sharing information,” said Guillermo Gonzalez Calderoni, general manager of interception. “We fight drug trafficking wherever it is, inside or outside the jails.”

Still, he said, Chavez probably would not have been caught if it had not been for a surveillance operation on Mexico’s southern border.

Agents on Sunday received a report of a small plane bound for the Mexican coast from South America with no approved flight plan. Sophisticated tracking planes chased the Cessna 404 to a hidden airstrip up the coast from the beachside resort of Acapulco.

They found 692 kilograms of cocaine, a cargo truck, four high-powered rifles and documents that eventually led them to Chavez’s prison cell.

Nor was this the first time that authorities had suspected Chavez of running his drug operation from prison. Besides the currency exchange house incident, in August, 1990, he was questioned in relation to an arsenal and a cache of cocaine found near the prison.

Officials in the attorney general’s office have said they cannot control jailhouse-run drug operations because they do not control the jails, which are under the jurisdiction of local authorities.

Combatting the system that allows drug dealers to operate from jail is difficult.

“While Mexican prisons seem secure in the sense that we heard few reports of escapes, internal security is lax,” the human rights organization Americas Watch said in a recent report. “Guards are poorly paid, poorly trained and required to work long shifts that leave them exhausted much of the time.

“Corruption is an endemic feature of life in Mexican prisons,” the report said. In one case, it added, a new prison director’s efforts to clean up the guard staff were thwarted by a strong union. He could fire guards only when they were caught taking bribes.

Under those circumstances, Mexican officials have said, just keeping wealthy drug dealers in jail is an accomplishment.