BAD NEIGHBORS

Last November a U.S. customs inspector in El Paso, Texas, had a funny feeling about a Honda Accord that was attempting to cross from Mexico into the U.S. He motioned the car over to take a closer look, and the driver leaped out and disappeared down the street. When the El Paso police opened the trunk, they discovered three bodies: those of Josa Munoz Rubalcava, a retired Mexican police official, and his two sons, Alberto, 24, and Casar, 21. Someone had stabbed all three men in the back, trussed them with rope and added a macabre finishing touch to the father's corpse. "[He] had yellow cord tied around the mouth with a bow," says Travis Kuykendall, the agent in charge of El Paso's Drug Enforcement Administration office. "It looked like they were wrapped up for somebody, like a present."

The murders remain unsolved. But Kuykendall, who has served more than 30 years and is considered the dean of the "border rats," as Texas DEA agents call themselves, thinks he knows who sent the present -- Amado Carillo Fuentes. As the purported head of the Chihuahua drug cartel, Carillo is reputed to have littered the streets of Juarez with the bodies of informants each time one of his drug shipments is seized by U.S. agents. Although DEA officials are not exactly sure where Carillo lives (somewhere in Chihuahua, they think), when he was born (perhaps 1955), or what he looks like (they have only one photograph), they do know that he is the smoothest, smartest and most powerful of Mexico's drug lords. He is allegedly the leading figure of the "Mexican federation," a loose amalgam of families that has turned Mexico's drug trade into one that rivals Colombia's in its pervasiveness and the danger it poses to the U.S.

Nearly 70% of the cocaine that reaches the U.S. each year passes through Mexico. In addition, Mexicans have begun to distribute and sell the drug on the streets of American cities. Meanwhile, cocaine has pushed corruption, violence and criminality in Mexico to a new level. Such facts raise embarrassing questions for the Clinton Administration, which fought so hard for NAFTA and has bailed out Mexico by issuing loan guarantees that will cost the U.S. $20 billion if Mexico defaults. "Mexico is not a stable country right now," says Indiana Republican Congressman Dan Burton, chairman of the House Foreign Affairs Western Hemisphere Subcommittee. "It's almost, although not quite, a narco-democracy."

Mexico has five identifiable cartels, and U.S. officials say that a power shift seems to be taking place in their ranks. The Garcia Abrego family, the purported leaders of the once dominant Gulf cartel that controls drug trade along Mexico's east coast, have recently received arrest warrants from the Mexican Attorney General's office for an alleged -- but as yet unproved -- connection to the murder of Josa Francisco Ruiz Massieu, the deputy attorney general of the country's ruling political party. The heads of the Tijuana cartel, the Arrellano Falix brothers, have also come under pressure for their suspected role in accidentally gunning down a bishop in Guadalajara. (The real target of the shooting is thought to have been Joaquin Guzman, another suspected drug lord, whose power base is in Sonora.) With the Garcia Abregos and the Arrellano Felixes lying low, the field has been left open to the low-key, efficient Carillo.