As concerns mount over the potential for Mexican drug cartel violence to spill over the border, a steady flow of firearms south from Phoenix is helping give the cartels their lethal firepower.

Jackie “Jippy” Munoz wanted to buy a catering truck, to start his own business, to support his family. He was smart – everyone agreed, even the prosecutor who sent him away for a decade. At Munoz’s sentencing hearing in July, the prosecutor told the court: If he had put his mind, motivation, charisma and creativity to a good cause, Munoz could have “made quite a life for himself.”

But Munoz was paying for his future on installment, and his job as a diner cook didn’t pay much. When he fell behind on the truck payments, his attorney says, he took advantage of a sure-fire way to make money in Phoenix nowadays: He started buying guns for a Mexican drug cartel.

As Mexico has become a war zone, Phoenix has become a key armory – a supply line of weapons and ammunition for the violent drug trafficking organizations that are battling each other and the Mexican government, officials say.

Since Mexican President Felipe Calderón declared war on the cartels in late 2006, nearly 30,000 people have been killed in a war that grows more brutal by the day. Torture. Beheadings. Child deaths. Rampant corruption. Assassinations. Mass graves. The cartel violence has turned some border towns in Mexico into “murder cities” and spurred American fears that it will spill across the border.

For policy makers both in Arizona and nationwide, the focus has been mostly on illegal immigration and border security: President Barack Obama signed a $600 million bill that sent more than 1,200 new National Guard troops to the Southwest border in August, and state legislators passed a controversial immigration law this year aimed at clamping down on illegal immigrants. The U.S. government has also committed more than $1.6 billion in drug war funds to help the Mexican government get an upper hand on the increasingly militarized cartels.

Photos by Laura Segall Bill Newell, ATF special agent in charge for Phoenix, says the agency has “clear evidence” Phoenix is a gun-smuggling hub.

But this is the disturbing paradox: As the U.S. government aids the Mexican military, U.S. firearms bought on the consumer market – including many from Phoenix – are helping give the cartels their lethal firepower.

Firearms are heavily restricted in Mexico and illegal for most citizens to own, so the cartels turn to foreign sources. In May, Calderón told a joint session of Congress that his government has traced about 60,000 guns seized in Mexico back to the U.S. over the last three years. Only a fraction of those guns are traced by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) to the last known owner in the U.S. (Obliterated serial numbers, problems tracing guns resold at pawnshops or in private sales, and other factors make tracing difficult.) But when they are, they are most likely to have originated in Texas, California or Arizona, says Bill Newell, special agent in charge of the ATF’s Phoenix Field Division. If the guns found in Mexico are new, which the ATF says is an indicator of immediate trafficking, the dominant U.S. sources are Texas and Arizona.

More than 2,000 guns seized in Mexico over the last few years have been traced back to Arizona – just a tiny sliver of the weapons that authorities believe have been smuggled south from Phoenix. From October 2009 to July 2010, nearly 400 guns were traced from Mexico back to Arizona. Agents also seized 1,600 guns in the state, most of which ATF officials believe were destined for Mexico. Newell says his agency has “clear evidence from firearms recovered in Mexico that the Phoenix metro area is a significant source of guns, especially in Sonora and Sinaloa.”

“They are not throwing rocks at each other,” Newell says. “They are using U.S. firearms to wage a war against each other and the government of Mexico.”

Some gun-rights advocates, afraid Mexican violence will spur more gun restrictions in the U.S., have vociferously challenged the ATF’s claim that the U.S. is a main source of firearms for Mexican drug cartels. Charles Heller, co-founder of the Arizona Citizens Defense League, says he is convinced most of the guns used in Mexico come from military sources – a common assertion by gun-rights advocates. Even if Calderón’s number is correct, Heller says he does not believe it is a significant portion of the overall weaponry used by the cartels. “The majority of the firearms that come from the drug cartels come not from the civilian populace, they come from other militaries,” Heller insists.

Guns seized by the ATF and kept in a vault in the ATF’s Phoenix offices

Dennis K. Burke, U.S. Attorney for the District of Arizona, whose office is prosecuting Munoz’s case, says the percentage of guns that come from the U.S. is not what is important – it matters that U.S. firearms are ending up there at all. “We have an iron river that flows south of weapons,” he says.

Burke’s office recently prosecuted 10 people accused of smuggling at least 117 guns purchased at gun shows and stores in Phoenix and Tucson to Mexico’s Sinaloa drug cartel. Fifteen of those weapons have been recovered so far in Mexico, including nine found with a large cache of weapons and ammunition in Navojoa, Sonora, in February. The alleged ringleader, 23-year-old Alejandro Medrano from Mesa, was sentenced to four years in federal prison in August. Other defendants got between 14 and 30 months in prison. Gun trafficking is now a top priority in the office: Prosecutions are up significantly from past years, and there are now 21 attorneys in Phoenix alone who work on gun-trafficking cases. “There is no question that we have a troubling and recent phenomenon of individuals trying to make money from trafficking firearms to Mexico,” Burke says. “We see a disturbing amount of it in the Phoenix area.”

 Court records show that when Alfredo Beltran Leyva, a.k.a. “El Mochomo” (“Red Ant”), one of the leaders of the Sinaloa cartel, was arrested in Culiacán in 2008, the pistol he was carrying – an ornate Colt .38 Super with gold inlay, considered a status weapon in Mexico – came from a gun store in Phoenix. When border patrol intercepted a vehicle bringing more than 400 pounds of marijuana into Pima County in late 2007, the smugglers were armed with guns bought in Phoenix. When the Mexican Army seized an arsenal of weapons in 2008 after a deadly shootout near Juarez, many were linked to a trafficker who was caught buying .50-caliber sniper rifles from Phoenix gun stores.

The guns trafficked south are purchased from gun shows, gun shops, pawnshops, sporting goods stores and private sellers. They are then smuggled across the border, sometimes zip-tied under vehicles or tucked in hidden compartments that were used to bring drugs north. (Southbound vehicle inspections have increased at the border in recent months in an effort to stop drug money and weapons going into Mexico, according to federal officials.)

In Phoenix and in other cities, authorities say the cartels often obtain the guns through networks of “straw buyers” – U.S. citizens or legal residents who can buy guns quickly, easily and legally. They may be approached through an acquaintance and paid $100 or so per gun. Peter Forcelli, the special agent who supervises violent crime investigations for the ATF in Phoenix, says the agency has caught single moms, elderly men and women, and people who are sick or otherwise in tough financial straits. In one case, they busted a pregnant woman who bought three AR-15-type assault rifles at a Phoenix gun show. Some of the buyers don’t know where the guns are ultimately headed – others just don’t care.