The crew members aboard the USS Underwood could see through their night goggles what was happening on the fleeing go-fast boat: Someone was dumping bales.

When the Navy guided-missile frigate later dropped anchor in Panamanian waters on that sunny August morning, Ensign Clarissa Carpio, a 23-year-old from San Francisco, climbed into the inflatable dinghy with four unarmed sailors and two Coast Guard officers like herself, carrying light submachine guns. It was her first deployment, but Carpio was ready for combat.

Fighting drug traffickers was precisely what she'd trained for.

In the most expensive initiative in Latin America since the Cold War, the U.S. has militarized the battle against the traffickers, spending more than $20 billion in the past decade. U.S. Army troops, Air Force pilots and Navy ships outfitted with Coast Guard counternarcotics teams are routinely deployed to chase, track and capture drug smugglers.

The sophistication and violence of the traffickers is so great that the U.S. military is training not only law enforcement agents in Latin American nations, but their militaries as well, building a network of expensive hardware, radar, airplanes, ships, runways and refueling stations to stem the tide of illegal drugs from South America to the U.S.

According to State Department and Pentagon officials, stopping drug-trafficking organizations has become a matter of national security because they spread corruption, undermine fledgling democracies and can potentially finance terrorists.

U.S. drug czar Gil Kerlikowske, pointing to dramatic declines in violence and cocaine production in Colombia, says the strategy works.

"The results are historic and have tremendous implications, not just for the United States and the Western Hemisphere, but for the world," he said at a conference on drug policy last year.

The Associated Press examined U.S. arms export authorizations, defense contracts, military aid, and exercises in the region, tracking a drug war strategy that began in Colombia, moved to Mexico and is now finding fresh focus in Central America, where brutal cartels mark an enemy motivated not by ideology but by cash.

The U.S. authorized the sale of a record $2.8 billion worth of guns, satellites, radar equipment and tear gas to Western Hemisphere nations in 2011, four times the authorized sales 10 years ago, according to the latest State Department reports.

Over the same decade, defense contracts jumped from $119 million to $629 million, supporting everything from Kevlar helmets for the Mexican army to airport runways in Aruba, according to federal contract data.

Last year $830 million, almost $9 out of every $10 of U.S. law enforcement and military aid spent in the region, went toward countering narcotics, up 30 percent in the past decade.

Many in the military and other law enforcement agencies -- the Drug Enforcement Administration, U.S. Immigration and Customs Enforcement, FBI -- applaud the U.S. strategy, but critics say militarizing the drug war in a region fraught with tender democracies and long-corrupt institutions can stir political instability while barely touching what the U.N. estimates is a $320 billion global illicit drug market.

Congressman Eliot Engel (D-N.Y.), who chaired the U.S. House Subcommittee on the Western Hemisphere for the past four years, says the U.S.-supported crackdown on Mexican cartels only left them "stronger and more violent." He intends to reintroduce a proposal for a Western Hemisphere Drug Policy Commission to evaluate antinarcotics efforts.

"Billions upon billions of U.S. taxpayer dollars have been spent over the years to combat the drug trade in Latin America and the Caribbean," he said. "In spite of our efforts, the positive results are few and far between."

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At any given moment, 4,000 U.S. troops are deployed in Latin America and as many as four U.S. Navy ships are plying the Caribbean and Pacific coastlines of Central America. U.S. pilots clocked more than 46,400 hours in 2011 flying anti-drug missions, and U.S. agents from at least 10 law enforcement agencies spread across the continent.

The U.S. trains thousands of Latin American troops, and employs its multibillion dollar radar equipment to gather intelligence to intercept traffickers and arrest cartel members.

These work in organized-crime networks that boast an estimated 11,000 flights annually and hundreds of boats and submersibles. They smuggle cocaine from the only place it's produced, South America, to the land where it is most coveted, the United States.

One persistent problem is that in many of the partner nations, police are so institutionally weak or corrupt that governments have turned to their militaries to fight drug traffickers, often with violent results. Militaries are trained for combat, while police are trained to enforce laws.

"It is unfortunate that militaries have to be involved in what are essentially law enforcement engagements," said Frank Mora, the outgoing deputy assistant secretary of defense for Western Hemisphere affairs. But he argues that many governments have little choice.

"We are not going to turn our backs on these governments or these institutions because they've found themselves in such a situation that they have to use their militaries in this way," Mora said.

Mora said the effort is not tantamount to militarizing the war on drugs. He said the Defense Department's role is limited, by law, to monitoring and detection. Law enforcement agents, from the U.S. Coast Guard, Customs and Border Protection or other agencies are in charge of some of the busts, he said.

But the U.S. is deploying its own military. Not only is the Fourth Fleet in the Caribbean, the Pacific and the Atlantic, but the Marines were sent to Guatemala last year and the National Guard is in Honduras.

The Obama Administration sees these deployments as important missions with a worthy payoff. Hundreds of thousands of kilograms (pounds) of cocaine are seized en route to the U.S. every year, and the Defense Department estimates about 850 metric tons of cocaine departed South America last year toward the U.S., down 20 percent in just a year. The most recent U.S. survey found cocaine use fell significantly, from 2.4 million people in 2006 to 1.4 million in 2011.

Aboard the Underwood, the crew of 260 was clear on the mission. The ship's bridge wings bear 16 cocaine "snowflakes" and two marijuana "leaves," awarded to the Underwood by the Coast Guard command to be "proudly displayed" for its successful interdictions.

Standing on the bridge, Carpio's team spotted its first bale of cocaine. And then, after 2 1/2 weeks plying the Caribbean in search of drug traffickers, they spotted another, and then many more.

"In all we found 49 bales," Carpio said in an interview aboard the ship. "It was very impressive to see the bales popping along the water in a row."

Wrapped in black and white tarp, they were so heavy she could barely pull one out of the water. Later, officials said they'd collected $27 million worth of cocaine.

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The current U.S. strategy began in Colombia in 2000, with an eight-year effort that cost more than $7 billion to stop the flow from the world's top cocaine producer. During Plan Colombia, the national police force, working closely with dozens of DEA agents, successfully locked up top drug traffickers.

But then came "the balloon effect."

As a result of Plan Colombia's pressure, traffickers were forced to find new coca-growing lands in Peru and Bolivia, and trafficking routes shifted as well from Florida to the U.S.-Mexico border.

Thus a $1.6 billion, 4-year Merida Initiative was launched in 2008. Once more, drug kingpins were caught or killed, and as cartels fought to control trafficking routes, increasingly gruesome killings topped 70,000 in six years.

Mexican cartel bosses, feeling the squeeze, turned to Central America as the first stop for South American cocaine, attracted by weaker governments and corrupt authorities.

"Now, all of a sudden, the tide has turned," said Brick Scoggins, who manages the Defense Department's counter-narcotics programs in most of Latin America and the Caribbean. "I'd say northern tier countries of El Salvador, Honduras, Guatemala and Belize have become a key focus area."

The latest iteration is the $165 million Central America Regional Security Initiative, which includes Operation Martillo (Hammer), a year-old U.S.-led mission. The operation has no end date and is focused on the seas off Central America's beach-lined coasts, key shipping routes for 90 percent of the estimated 850 metric tons of cocaine headed to the U.S.

As part of Operation Martillo, 200 U.S. Marines began patrolling Guatemala's western coast in August, their helicopters soaring above villages at night as they headed out to sea to find "narco-submarines" and shiploads of drugs. The troops also brought millions of dollars' worth of computers and intelligence-gathering technology to analyze communications between suspected drug dealers.

Assistant Secretary of State William Brownfield, head of the Bureau of International Narcotics and Law Enforcement Affairs, predicts the balloon effect will play out in Central America before moving to the Caribbean.

The goal, he said, is to make it so hard for traffickers to move drugs to the U.S. that they will eventually opt out of North America, where cocaine use is falling. Traffickers would likely look for easier, more expanding markets, shifting sales to a growing customer base in Europe, Africa and elsewhere in the world.

Brownfield said almost all Peruvian and Bolivian cocaine goes east through Brazil and Argentina and then to Western Europe. Cocaine that reaches North America mostly comes from Colombia, he said, with U.S. figures showing production falling sharply, from 700 metric tons in 2001 to 195 metric tons today -- though estimates vary widely.

When the drug war turns bloody, he said, the strategy is working.

"The bloodshed tends to occur and increase when these trafficking organizations, which are large, powerful, rich, extremely violent and potentially bloody, ... come under some degree of pressure," he said.

Yet the strategy has often backfired when foreign partners proved too inexperienced to fight drug traffickers or so corrupt they switched sides.

In Mexico, for example, the U.S. focused on improving the professionalism of the federal police. But the effort's success was openly questioned after federal police at Mexico City's Benito Juarez International Airport opened fire at each other, killing three.

In August critics were even more concerned when two CIA officers riding in a U.S. Embassy SUV were ambushed by Mexican federal police allegedly working for an organized crime group. The police riddled the armored SUV with 152 bullets, wounding both officers.

The new strategy in Honduras has had its own fits and starts.

Last year, the U.S. Defense Department spent a record $67.4 million on military contracts in Honduras, triple the 2002 defense contracts there well above the $45.6 million spent in neighboring Guatemala in 2012. The U.S. also spent about $2 million training more than 300 Honduran military personnel in 2011, and $89 million in annual spending to maintain Joint Task Force Bravo, a 600-member U.S. unit based at Soto Cano Air Base.

Further, neither the State Department nor the Pentagon could provide details explaining a 2011 $1.3 billion authorization for exports of military electronics to Honduras -- although that would amount to almost half of all U.S. arms exports for the entire Western Hemisphere.

In May, on the other side of the country, Honduran national police rappelled from U.S. helicopters to bust drug traffickers near the remote village of Ahuas, killing four allegedly innocent civilians and scattering locals who were loading some 450 kilograms (close to 1,000 pounds) of cocaine into a boat.

The incident drew international attention and demands for an investigation when the DEA confirmed it had agents aboard the helicopters advising their Honduran counterparts. Villagers spoke of English-speaking commandos kicking in doors and handcuffing locals just after the shooting, searching for drug traffickers.

Six weeks later, townspeople watched in shock as laborers exhumed the first of four muddy graves. At each burial site, workers pulled out the decomposing bodies of two women and two young men, and laid them on tarps.

Forensic scientists conducted their graveside autopsies in the open air, probing for bullet wounds and searching for signs the women had been pregnant, as villagers had claimed.

Government investigators concluded there was no wrongdoing in the raid. In the subsequent months, DEA agents shot and killed suspects they said threatened them in two separate incidents, and the U.S. temporarily suspended the sharing of radar intelligence because the Central American nation's air force shot down two suspected drug planes, a violation of rules of engagement. Support was also withheld for the national police after it was learned that its new director had been tied to death squads.

As the new year begins, Congress is still withholding an estimated $30 million in aid to Honduras, about a third of all the U.S. aid slotted for this year.

But there are no plans to rethink the strategy.

Scoggins, the Defense Department's counter-narcotics manager, said operations in Central America are expected to grow for the next five years.

"It's not for me to say if it's the correct strategy. It's the strategy we are using," said Scoggins. "I don't know what the alternative is."