Last month, Customs inspectors in Nogales, Ariz., stopped a tractor-trailer bound for Mexico. In a secret ceiling compartment, they found $5.6 million in US currency - probably drug money collected on street corners in US cities and headed for "laundering" south of the border.
For American law-enforcement agencies, it was a bittersweet moment. The seizure is the best evidence yet that recent laws designed to prevent Mexican drug barons from laundering their profits in the US are working. But it also suggested that Mexican banks are picking up the slack.
As the drug trade booms worldwide and as technology provides new ways to transfer large sums of money, officials are paying more attention to the mechanisms drug dealers use to convert their hoards of tainted cash to manageable assets.
Most observers agree that a crackdown on money-laundering would cripple the drug trade, but the consequences of enforcement are numbingly complex. At stake is the viability of Mexico's banking system, the role of the dollar as the world's predominant currency, and perhaps, the future of democratic capitalism itself.
"It's an enormous problem," says Stanley Morris, director of the US Treasury Department's Financial Crimes Enforcement Network. "If we allow criminals to penetrate the economies and develop political power [in emerging nations], they will undermine our ability to nurture democracy."
For decades, the only safeguard against laundering in the US was a requirement that banks report to the federal government any transactions over $10,000.
In recent years, though, Congress has made these records available to more law-enforcement agencies and made it easier for banks to report suspicious transactions. Now, all wire transfers of more than $3,000 must be reported, and this month, the Clinton administration proposed a law that would require individuals wiring more than $750 abroad to identify themselves.
Such measures have ended the era when drug dealers could deposit sackfuls of cash at US bank branches or transfer tens of thousands of dollars abroad without leaving a paper trail.
Yet the momentum seems to be slowing.
Robert Munro, co-director of the Center for International Financial Crimes Studies at the University of Florida in Gainsville, says the Clinton administration seems to be more interested in domestic street crime than money-laundering. Moreover, he says, turf battles between agencies have complicated enforcement, and US banks are not likely to welcome any additional regulations.
In some ways, officials say, it doesn't matter: Mexican "dopers" have already begun to avoid American banks by bundling up their cash - as much as $30 billion a year - and transporting it across the border to be deposited in Mexico.
The most conclusive evidence of this new strategy has surfaced here in south Texas. Last year, the San Antonio branch of the Federal Reserve Bank announced it had amassed a $3 billion cash surplus - by far the largest such glut in the nation. This means that banks in the region take in far more hard currency than they need to conduct daily business.
This unprecedented surplus isn't necessarily proof that the region's banks are awash in drug money. Residents in border areas have always done more business in cash, and the San Antonio Fed has shown a surplus every year since 1951.
But a recent investigation by the Internal Revenue Service (IRS) found that nearly two-thirds of the cash collected by the San Antonio Fed originally came from Mexican banks. Because these banks are not required to report large or suspicious transactions, there's no telling how much of their excess currency comes from narcotics sales.
"The probability is high that some portion of this currency came from narcotics trafficking," says Edward Federico of the criminal investigations unit at the IRS. "It would be foolhardy to think otherwise."
The problem, officials say, is that Mexican banks are unlikely to develop adequate regulations anytime soon - or be able to survive with them in place.
Jack Blum, a Washington lawyer who specializes in money-laundering cases, describes the Mexican banking system as "a world-class basket case." According to Mr. Blum, the peso's collapse made it difficult for Mexican banks to collect interest on outstanding loans - making the banks more dependent than ever on the type of steady cash flow that drug proceeds can provide.
Recent examples of high-level corruption in Mexico's government cause some observers to doubt there's anything Mexican officials can do to stem the flow of illicit revenue to banks.
Nevertheless, Mexico is not the only weak link.
During the trial of Mario Ruiz Massieu, a former Mexican official recently convicted of money-laundering in the US, witnesses from a Houston bank noted that Mr. Massieu made 24 deposits of $200,000 each. Although the bank reported 10 of the transactions as suspicious, nothing was done. IRS officials note that they log about 70,000 such reports a year in their database - far more than officials can investigate.
Moreover, new advancements in electronic banking could allow dopers to circumvent all regulations, and many small nations that serve as tax-exempt banking havens have been slow to cooperate with international efforts to ferret out drug money.
The increasing use of the dollar as the standard currency in developing nations, too, has created a ready market for dopers who need to dispose of greenbacks, officials say.
"Money flows more easily than people or goods," Mr. Morris says. "It flows to areas of least resistance, and technology makes this movement easier all the time. As we have gotten better at sniffing out suspicious money, it's going to Mexico."