The building was owned by a front man for Cali cocaine cartel leader José Santacruz Londono. Inside was a computer center, manned in shifts around the clock by four to six technicians. The central feature of the facility was a $1.5 million IBM AS400 mainframe, the kind once used by banks, networked with half a dozen terminals and monitors. The next day, Colombia's attorney general secretly granted permission for U.S. agents to fly the mainframe immediately back to the United States, where it was subjected to an exhaustive analysis by experts from the Drug Enforcement Administration and various intelligence agencies. The so-called Santacruz computer was never returned to Colombian authorities, and the DEA's report about it is highly classified. But Business 2.0 has ferreted out many of its details. They make it clear why the U.S. government wants the Santacruz case kept quiet.

According to former and current DEA, military, and State Department officials, the cartel had assembled a database that contained both the office and residential telephone numbers of U.S. diplomats and agents based in Colombia, along with the entire call log for the phone company in Cali, which was leaked by employees of the utility. The mainframe was loaded with custom-written data-mining software. It cross-referenced the Cali phone exchange's traffic with the phone numbers of American personnel and Colombian intelligence and law enforcement officials. The computer was essentially conducting a perpetual internal mole-hunt of the cartel's organizational chart. "They could correlate phone numbers, personalities, locations -- any way you want to cut it," says the former director of a law enforcement agency. "Santacruz could see if any of his lieutenants were spilling the beans."

They were. A top Colombian narcotics security adviser says the system fingered at least a dozen informants -- and that they were swiftly assassinated by the cartel. A high-level DEA official would go only this far: "It is very reasonable to assume that people were killed as a result of this capability. Potential sources of information were compromised by the system."

The discovery of the Santacruz computer gave law enforcement officials a chilling glimpse into the cartels' rapidly evolving technological sophistication. But here's what is truly frightening: Since the discovery of the Santacruz system in 1994, the cartels' technological mastery has only grown. And it is enabling them to smuggle more dope than ever before.

The drug lords have deployed advanced communications encryption technologies that, law enforcement officials concede, are all but unbreakable. They use the Web to camouflage the movement of dirty money. They track the radar sweeps of drug surveillance planes to map out gaps in coverage. They even use a fleet of submarines, mini-subs, and semisubmersibles to ferry drugs -- sometimes, ingeniously, to larger ships hauling cargoes of hazardous waste, in which the insulated bales of cocaine are stashed. "Those ships never get a close inspection, no matter what country you're in," says John Hensley, former head of enforcement for the U.S. Customs Service. Most of the cartels' technology is American-made; many of the experts who run it are American-trained. High-tech has become the drug lords' most effective counter-weapon in the war on drugs -- and is a major reason that cocaine shipments to the United States from Colombia hit an estimated 450 tons last year, almost twice the level of 1998, according to the Colombian navy.