Mexico drug war funds to be released soon-U.S.

By Susan Cornwell

PUERTO VALLARTA, Mexico, Oct 22 (Reuters) - The United States will soon send Mexico funding for its brutal war on drug gangs amid Mexican impatience for the helicopters and planes, U.S. Secretary of State Condoleezza Rice said on Wednesday.

The U.S. Congress approved in June $465 million in aid for Mexico and Central America to pay for equipment to crush drug cartels, but violence continues to spiral in Mexico, with more than 3,725 people killed in the turf war this year.

Mexican President Felipe Calderon has called on Washington to release the equipment quickly under the so-called Merida Initiative as he tries to halt the violence.

Rice, enroute to Mexico for talks with her counterpart, Patricia Espinosa, said U.S. and Mexican officials were drafting letters of agreement governing the funding, "which I think will be done soon, and the money will start flowing."

"This is an initiative that we consider to be of the utmost importance," Rice told reporters on her plane. "This is a national security priority for Mexico and I think it's a national security priority for the United States."

Political analysts say the United States wants to ensure the equipment does not end up in the hands of drug lords or Mexico's corrupt police forces.

Calderon has sent some 36,000 troops across Mexico to try to restore law and order as rival gangs fight over lucrative smuggling routes into the United States, spending $7 billion for a 3-year military crackdown.

Drug gangs are armed with huge arsenals, including grenades and even rocket-launchers and have become powerful and ruthless. Mexican police are no match for the cartel hitmen.

The Merida Initiative money will pay for inspection equipment like scanners and canine units; helicopters and surveillance aircraft to support interdiction activities; and training and technical advice to support law enforcement operations in Mexico.

U.S. Assistant Secretary of State Thomas Shannon said the letters of agreement on the program dealt with the "nuts and bolts of exchanges of equipment and assistance, and therefore they need to be very carefully worded."

Asked if the letters would be completed within weeks, Shannon said, "I think it will be sooner than weeks."

Congress attached conditions on 15 percent of the Merida funds, saying they cannot be released until Rice can report that the Mexican military is making progress on human rights.

Rice said she thought she, as well as her successors, would be in "good shape" to do so, but did not say when. The Bush administration leaves office in January.

Rice was meeting Espinosa and other officials on Wednesday and Thursday in the Pacific tourist resort of Puerto Vallarta.

She said she also plans to discuss the global financial crisis with Mexican officials, noting that the economic slowdown in the United States has an effect on the Mexican economy as well.