The U.S Coast Guard (search) has set a record for the largest drug interdiction, seizing so far this year 240,519 pounds of cocaine worth at least $7.3 billion from ships apprehended in the Pacific and Caribbean.

"The Coast Guard is committed to denying the seas to those who wish to harm our citizens, and this disruption of the illegal drug trade is part of our successful, layered homeland security strategy," said Adm. Thomas Collins, Commandant of the USCG, in a statement following the bust of 18 Colombians with 27 tons of cocaine in the eastern Pacific in late September.

Last month's major bust was part of "Operation Panama Express," a multi-agency effort that has netted 650 individuals and 310 tons of cocaine since 2000, according to Joe Ruddy, a Florida assistant district attorney and lead prosecutor for the operation in Tampa.

Ruddy and USCG officials told FOXNews.com that advanced intelligence gathering and better equipment like armed helicopters and speedboats that can now overtake "go-fast" boats utilized by smugglers typically headed for Mexico have contributed to the gains.

"The drug interdiction numbers are nothing less than spectacular," said Rep. Frank LoBiondo, R-N.J., chairman of the Coast Guard and Maritime Transportation subcommittee of the House Transportation Committee.

Coast Guard officials say enhanced resources following the Sept. 11, 2001, terror attacks have resulted in marked progress in the war on drugs (search), and insist that taking down South American traffickers is just one front in another war — the War on Terror (search).

But not everyone ties the illegal drug trade to efforts to help terrorists. Ted Galen Carpenter, director of foreign policy studies at the Cato Institute (search), said perpetuating the drug war is sucking the life out of very real homeland security efforts.

"I think they are using homeland security and counter-terrorism as a justification for an old policy," said Carpenter. "I want to know if a nuclear or chemical weapon is coming into the United States, I want that Coast Guard combating that — not if someone is smuggling cocaine or marijuana."

LoBiondo said that 60 percent of the USCG budget is going toward homeland security now, a huge shift from pre-Sept. 11, when homeland security efforts took up about 5 percent of the total budget. That budget has increased to $6.3 billion for 2005 from $3.8 billion in 2001, according to officials.

Though illegal immigration and drug interdiction were already a part of the Coast Guard’s mission before Sept. 11, those efforts have intensified because financial investigations have suggested that terrorist organizations worldwide are funded in part by illegal drug trafficking.

"There are paramilitary and guerrilla forces in Colombia that have been designated terrorist organizations," said Ruddy. "They are part of the drug business in Colombia and they use drug trafficking to finance their operations."

Even Middle East terrorist organizations like Hezbollah (search) have been operating out of the tri-border area of Peru, Argentina and Brazil to raise money that eventually makes its way back to Lebanon, say experts.

"They will deal with far-left groups like the Revolutionary Armed Forces of South America (search) in Colombia, get involved in the drug trade, counterfeiting money, money laundering," said Erick Stakelbeck, a researcher for the Investigative Project, a Washington D.C., counter-terrorism think tank.

"We have seen Islamic terrorists willing to engage in un-Islamic activities like selling drugs to engage in Jihad with the West," he added. "Anything goes in South America."

No official linkage yet has been made between Al Qaeda terrorists and South American guerrilla or paramilitary groups. But Robert Charles, assistant secretary of state for international narcotics and law enforcement, said a relationship does exist.

"We know that drug money does flow into the coffers of terrorist organizations and we know we have disrupted the flow," said Charles.

Critics, however, say that despite a growing presence of U.S anti-drug efforts on the seas and in South America, violence has increased in Colombia and the supply of drugs on American streets has not slowed. In the meantime, terrorists benefit from a sidetracked Coast Guard.

"The Coast Guard has a job to do but they are being distracted by the drug war," said Mike Gray, author of "Drug Crazy: How We Got Into This Mess and How We Can Get Out." Gray writes that better border protection, such as scanning containers for weapons when they arrive at ports, will keep the country safer than chasing drugs.

Gray complains that the drug war has created a lucrative black market worth $400 billion worldwide, which is why terrorists, whether they be Al Qaeda (search) in poppy-rich Afghanistan or the FARC in Colombia, feed off it. He suggests that ending the war on drugs will make the business less lucrative and effectively put drug dealers out of business, ending the funding stream to terrorists.

"Anybody who needs a good source in untraceable, tax-free dollars will turn to the drug trade," he said. "It is absolutely essential that we end the drug war to shut off the money to terrorism."

Charles disputes the argument that the drug war in unwinnable, particularly in places like Colombia, which he said has reduced its coca production by 21 percent in the last year and has driven rebels into the jungle.

"(Colombian traffickers and terrorists) are on the defensive in a way they haven’t been for 15 years," he said. "Kidnapping and homicides are actually down. They are on the run."

Ruddy also disagreed that record-breaking busts weren’t helping cut the drug flow and revenue to big drug cartels, and indirectly, terrorists.

"When we interdict cocaine in international waters before it gets to Mexico the people who incur the financial loss are the transportation companies and the suppliers," he said, adding that the big fish come next. "That’s the most apparent consequence that I can see."

Scott McPherson, a policy analyst for the Future Freedom Foundation (search), a Washington D.C.-based libertarian think tank, said it’s been more difficult to question the drug war now that it has become part of the national security effort post-Sept. 11.

"The government has done such a wonderful job in creating an idea in the minds of people that fighting one means fighting the other," he said.

While USCG Chief Petty Officer Paul Rhynard would not talk about the tenets of the drug war, he said the Coast Guard was more than capable of carrying out multiple missions and considers them all related.

"To us, we consider illegal drugs a threat to our homeland security" on a lot of different levels, he said. "Counter-drug and migrant interdiction — they are not exclusive from our homeland security mission."