U.S., Mexico Join Forces Against Drug Cartels : Law enforcement: Police seize $65 million, indict 80 suspects in sweep along border targeting money-laundering operations.

U.S. and Mexican police pursued offensives against drug cartels on both sides of the border Monday, hitting the sophisticated money-laundering industry to the north and entrenched police corruption to the south.

In Mexicali, authorities confirmed the capture of a suspect in the ongoing covert probe of last year’s drug-related murder of the Tijuana police chief. In a link to the assassination of presidential candidate Luis Donaldo Colosio, court testimony revealed that the highway ambush of the chief was carried out by three high-ranking federal police commanders--two of whom were lead investigators on the Colosio case.

In San Diego, a multi-agency task force seized $65 million and indicted 80 suspects in a major undercover operation targeting currency exchanges--known in U.S. and Mexican border communities as casas de cambio --that allegedly launder profits for drug dealers. Undercover agents infiltrated suspect businesses and established phony companies that did business with the suspects in an elaborate sting, uncovering a network sending millions of illicit dollars to Mexican banks.

“You have huge amounts of drug money entering Mexico,” said Agent Thomas J. Clifford of the Drug Enforcement Administration, an architect of the investigation known as Operation Green Ice. “It has become a destabilizing force.”

Agents of the DEA, the Customs Service and other agencies arrested about 40 people in California, Texas, Florida and other states over the weekend and were seeking about 40 more fugitives, most believed to have fled to Mexico.

The suspects include prominent businessmen who own numerous currency exchanges in Southern California and Tijuana. For example, Arnoldo Davalos is accused of establishing a Santa Ana exchange purely as a money-laundering front. Davalos allegedly told undercover agents posing as traffickers that he owned 40 additional businesses in Mexico and offered to launder their proceeds, according to the indictment. Since last August, Davalos has wired a total of $491,000 of what he believed to be drug money to Mexican bank accounts, authorities said.

Currency exchanges have proliferated along the border partly because of their popularity with Latino immigrants who cash checks and wire money south. But authorities said the booming industry has also become integral to the operations of Mexican drug cartels that smuggle Colombian cocaine into the United States.

In recent years, Colombia’s Cali cartel has increasingly paid its Mexican smuggling partners with cocaine rather than money, generating an explosion of profits from the ensuing drug trade that Mexican transporters must remove from the United States, authorities said. The flow of legitimate money from casas de cambio offers natural camouflage, they said.

The investigation provides the administration of new President Ernest Zedillo, which has shown unusual willingness to cooperate on drug enforcement, a detailed trail of suspects, money and businesses to pursue, U.S. officials said.

“We have given them a window of opportunity to look at these operations at a higher level,” said Jack Kelley, the chief customs agent in San Diego.

In Baja California, meanwhile, a massive push to solve the murder of the Tijuana police chief has teamed federal and state authorities in Mexico--a new spirit of cooperation replacing the street warfare between police forces that claimed the life of Chief Federico Benitez Lopez last year.

Gov. Ernesto Ruffo Appel met Monday in Mexicali with Pablo Chapa Bezanilla, the federal special prosecutor investigating the Colosio assassination. At the same time, heavily armed teams of officers continued the hunt for the suspects, whose names were made public Friday in a tightly guarded court hearing in Tijuana.

The former top commanders of the federal police in Baja California and the neighboring state of Sonora, Raul Loza Parra and Rodolfo Garcia Gaxiola, carried out the highway ambush in which Benitez was intercepted and machine-gunned, according to testimony from witnesses and an alleged accomplice arrested last week.

During his preliminary hearing, Salvador Ruvalcaba Castillo, a former civilian enforcer for the federal police, also fingered Cmdr. Marco Antonio Jacome Saldana, who allegedly came to Ruvalcaba’s house to hide a Jeep Cherokee that was one of the vehicles used in the murder.

Those suspects were on the payroll of rival Sonoran and Baja drug cartels fighting for turf in Tijuana, according to investigators. Police say the commanders joined forces to kill Benitez--a newcomer to law enforcement--after he rejected bribes from the Arellano cartel of Tijuana offered to him by police intermediaries.

“He was the only one who wouldn’t take the money,” a Mexican investigator said. “All of us want to be that kind of policeman when we are little boys. And all of a sudden he was a policeman, and he wanted to be honest. So they killed him.”

But Loza and Jacome also figured centrally in the Colosio case at a time when the government says plotters engaged in a major cover-up of the role of a second gunman.

Benitez, who was killed five weeks after Colosio, worked with Loza during those days, turning over information on the gunman arrested at the scene and other reports. But Benitez also suspected a cover-up and looked into the crime on his own. The identity of his alleged killers feeds the theory that his efforts contributed to the decision to kill him--and that both cases involves politics and drug cartels.

As top commander of federal police in Baja California, Loza led the Colosio investigation during the key initial days. At his orders, Jacome filmed the campaign rally where Colosio was slain, resulting in a widely televised videotape of the moment when a hand with a gun emerges from the crowd and shoots the candidate in the head.

Garcia, who investigators describe as a politically well-connected police official with links to Sonoran drug lords, worked in Sonora and, briefly, as the top commander in Tijuana as well.

Gov. Ruffo and Chapa declined to confirm the reported arrests of Garcia and the others Monday. They reportedly do not want to interfere with the extremely sensitive investigation, which U.S. and Mexican officials see as a concerted attack that could lead to arrests of major drug lords.