Arizona Attorney General Terry Goddard says Mexican drug cartels use gift card technology to smuggle money across the U.S. border.

The state of Arizona is finding itself on the front line of the war against Mexican drug cartels. Their attorney general will meet this week with leaders of other southwestern states to try to stop the flow of drugs across the border with Mexico. To do that, they say they will have to stop the flow of cash as well, including a new way smugglers are trying to get past the cash-sniffing dogs.

Lawmakers say gift card technology is now making it easier for drug lords to move cash across the border undetected. These 'stored value instruments' are often issued by offshore banks and allow large sums of money to be moved throughout the world. Arizona Attorney General Terry Goddard spoke to Kiran Chetry on CNN’s “American Morning” Wednesday.

Kiran Chetry: Walk us through these gift cards. How have they become so useful to the drug cartels?

Terry Goddard: This isn't your Starbucks or Best Buy gift cards. What we're talking about here are stored value instruments, which have chips in them…that basically can store fairly large amounts of cash. The total amount is undetermined; it depends on who the depositing bank or financial institution is. As a result, since they're not considered monetary instruments, they can be taken across the border and you don't break any laws. It is a huge loophole in our financial crimes observations.

Chetry: So you're talking about gift cards, these blank cards that can be preloaded with large amounts of cash. How do they cash it in once they get across the border?

Goddard: These basically are your passport for cash. They are your way of getting into a financial institution. If you're buying coffee with them, obviously your return is not that big. But if you've got a participating financial institution, say in the Cayman Islands or in Central America, then all you have to do is go to a group that corresponds with that financial institution, present your card and take out your cash. So there's nothing at the border that you have to display. Under U.S. law, these cards, however much they may be worth are not considered financial instruments. Therefore, the border patrol, customs agents when they see them there is no violation because they're not part of the money that you're required to declare. And they can't read them, which is a big problem. Basically we need to have transparency so that if a law enforcement agency looks at one of these cards, he or she knows how much it is worth.

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Homeland Security Secretary Janet Napolitano speaks to CNN's Kiran Chetry about drug violence in Mexico.

President Obama makes his first trip to Mexico today as drug violence continues to plague the border between the U.S. and Mexico. Homeland Security Secretary Janet Napolitano will be with the president on his visit. She joined Kiran Chetry on CNN’s American Morning Thursday.

Kiran Chetry: We heard from Secretary of State Hillary Clinton who said America's insatiable demand for drugs is in part fueling the drug wars. Do you think we're partly to blame for the violence we've been seeing along the border?

Janet Napolitano: Well, there certainly is a relationship. You can't deny it. These are huge drug cartels that have developed over time. They're very violent. Witness the fact that there were over 6,000 homicides in northern Mexico last year including 550 that were assassinations of law enforcement or public officials in Mexico. What we're working to do, is to work to stop the flow of guns and cash in to Mexico that are helping fuel these cartels. But also, we're working at the border to make sure that the spillover violence doesn't occur in our own cities and communities.

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John Ackerman of the Mexican Law Review speaks to CNN's Kiran Chetry about drug violence in Mexico.

President Obama is headed to Mexico today and will be meeting with Mexico’s president, Felipe Calderon. The president will share his vision about what it will take to tackle the drug cartels to combat deadly violence that’s spilling over the border.

John Ackerman is editor-in-chief of the Mexican Law Review and lives in Mexico City. Ackerman spoke to Kiran Chetry on CNN’s American Morning Thursday.

Kiran Chetry: As President Obama gets ready to meet with Mexican President Calderon, what guarantees do we need to give to Mexico first of all?

John Ackerman: I think President Obama should be very aware of the situation that’s occurring here in Mexico, in terms of the serious politicizing that is happening with regards to the combating of the drug traffickers. Calderon has been very much emphasizing the military aspects of the combating of the drug traffickers, which I think is a mistake. We really need to think about institution building and changing the focus of the strategy of the attack on the drug traffickers. Obama should be aware of this. It's very easy to talk about the war on drugs. But it’s also very dangerous because there have been serious attacks on human rights and there hasn’t been enough done in terms of combating corruption in Mexico.

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Former Mexican president Vicente Fox speaks to CNN's John Roberts about drug violence across the border.

Mexico is not in danger of becoming a failed narco-state any time soon.

That’s according to Vicente Fox, the former President of Mexico, who spoke with us on the eve of President Obama’s trip to Mexico city. Watch the interview

Fox dismissed the warnings of a growing number of analysts, saying the worst-case scenario is “far, far, away.”

As for who is to blame for the surge in drug cartel violence, Fox refused to point fingers, saying both sides share responsibility – Mexico, for its role as a producer and trans-shipment point for illegal drugs, the United States for its insatiable appetite.

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We've been along the border all week long bringing you a story that affects all of us: the battle to keep drugs out of this country and the undying addictions that keep ruthless drug cartels in business. Mexican authorities say they found a U.S. Marshal murdered, execution style, in the virtually lawless border town of Juarez. John Gibler, author of "Mexico Unconquered: Chronicles of Power and Revolt," joined us live.

What do you think? Can the U.S. win the war on drugs?

Former DEA Special Agent Robert Strang speaks to CNN's John Roberts about America's appetite for illegal drugs.

Mexico's army is pouring into towns struggling to stop drug cartels' bloody tactics.

Washington is pledging cash and manpower – but the violence is threatening to tear Mexico apart.

Former Drug Enforcement Agency Special Agent Robert Strang joined us live for reaction.

Watch

What do you think? Is America's appetite for drugs fueling the violence?

Phoenix Mayor Phil Gordon discusses illicit drugs coming into the U.S. from Mexico.

This is a developing story we've been covering for you. Secretary of State Hillary Clinton is in Mexico – as violence threatens to rip that country apart.

65-hundred people were slaughtered last year as rival drug cartels battled each other and the authorities. 800 killed so far this year. Many – beheaded to send a message. And the misery is heading north along with the drugs.

Phoenix is now America's kidnapping capital. Phoenix Mayor Phil Gordon, who testified on border violence Tuesday on Capitol Hill, joined us live.

Watch

Happy Tuesday morning!

Legalize drugs?

The idea is gaining some unlikely support in the wake of the growing violence in Mexico. Since late 2006, Mexico’s drug violence has killed more than 9,000 people as cartels and gangs battle each other for territory and fight against government crackdown. The violence has spilled over the U.S. border where kidnappings and killings are on the rise. Read more.

There's a school of thought that it will take more than increased law enforcement to combat the drug problem. Some are now calling for legalizing ALL drugs, not just marijuana, in order to win this war. One of those voices, leading Harvard economist Jeffrey Miron, made the case for legalization on American Morning. Here's my interview with him today.

Here is Jeffrey Miron’s commentary I was talking about and another one with a counterpoint.

As always we'd like to get your thoughts. Comment here or follow us at twitter.com/amfix and twitter.com/kiranchetrycnn.

See you tomorrow!

Kiran

CNN's Kiran Chetry speaks to Michael Ware about the ongoing drug war in Mexico.

CNN International Correspondent Michael Ware has been tracking the deadly gun battles between drug cartels and Mexican authorities.

He joined us live to discuss President Obama's plan and Secretary Clinton's visit south of the border.

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