Source: Chicago Tribune (IL) Section: 1, page 14 Contact: http://www.chicago.tribune.com/ Pubdate: Wed, 25 Mar 1998 Author: Paul de la Garza DRUG LORDS INFILTRATING MEXICO'S BANKS Officials Concede U.S. Suspicions; Cartels Seek Money-Laundering Bases MEXICO CITY - For U.S. drug agents working in Mexico, talking publicly about Mexico's dismal record in fighting the drug war is discouraged by Washington for fear of straining relations between the two neighbors. Almost two years ago, Thomas Constantine, chief of the U.S. Drug Enforcement Agency in Washington riled the Mexican government when he said that drug barons were laundering billions of dollars through Mexican banks. Over the last few days, information from Mexican officials seems to have vindicated Constantine, with charges that the nation's most powerful cartel laundered $400 million through a Mexican bank it partly owned. The scandal briefly ensnared architect Rodolfo Zedillo, the brother of President Ernesto Zedillo. But more than anything, it forced the government to admit what U.S. officials have said all along - that drug money has not only tainted governors, law makers and the police in Mexico, but also the banking system. According to Mexican drug czar Mariano Herran Salvatti, the purchase of 20 percent of shares of the Finance Group Anahuac allowed the Juarez cartel to launder money through electronic transactions in Mexico, Chile and Miami. Until his death July 4, the Juarez group was run by Amado Carrillo Fuentes, characterized by U.S. intelligence as the world's most powerful drug lord. Carrillo Fuentes died during plastic surgery in Mexico City, setting off a power struggle for control of the organization. The result has been the deaths of dozens of people in Ciudad Juarez, across the border from El Paso, Texas. "Using Anahuac, the organization laundered money through bank branches in the Cayman Islands, a financial paradise where it is difficult to get records of transactions," Herran said. "One estimate of the amount reaches $400 million." Last week, the newspaper Universal reported that a second bank, Banco Obrero, was under investigation for money laundering. Bank officials had no comment. In response to the U.S. crackdown on smuggling routs in the Caribbean, Colombian drug traffickers have turned to Mexican gangs, which have gained power at the expense of the Colombians. Although Colombia still ranks as the world's top producer of cocaine and is a big supplier of heroin and marijuana, the deaths or arrests of some of its most notorious drug barons have strengthened the Mexican organizations, police say. American authorities estimate that $30 billion worth of illegal drugs reach the U.S. from Mexico each year. According to police, Mexican cartels are getting bolder about distributing drugs in the U.S. In Chicago, for example, instead of relying on gang underlings, sources say cartel leaders are traveling from Mexico to Chicago in a strategy aimed at taking control of direct distribution. Cartel leaders easily blend in, officials say, because of the large Latino population in the Chicago area. Last week, authorities in Chicago arrested a former Mexican federal judicial police officer with ties to the Juarez cartel. Roberto Orozco Fernandez, according to the Mexican attorney general's office, had $2 million in cash when he was arrested. Mexico has requested his extradition. "Orozco Fernandez is accused of being a member of a criminal organization dedicated to narcotrafficking, the traffic of arms and money-laundering," the attorney general's office said. With so much cash changing hands, police say it becomes almost physically impossible for drug barons to handle. In Mexico, the money-laundering bank scheme that allowed the Juarez cartel buy a controlling interest in Anahuac in 1995-96 has revealed a web of connections involving some of the nation's most powerful people. Last Thursday, authorities arrested Juan Alberto Zepeda Novelo, reportedly a key player in negotiations to buy the bank, on money-laundering charges. Others caught up in the accusations are relatives of Miguel de la Madrid, the former president of Mexico. Jorge Hurtado Horcasitas, his nephew, was the bank's president when the cartel bought its shares. De la Madrid's son Federico was a vice president of the bank. Hurtado has issued no comment. Federico de la Madrid told reporters he never knew drug traffickers were involved with the bank. According to authorities, Jorge Bastida Gallardo was the cartel's chief envoy in the negotiations to buy Anahuac. Bastida was a union leader. Last week, a newspaper in Guadalajara published an article that linked President Zedillo's younger brother, Rodolfo, to a property deal with Bastida and Zepeda. Rodolfo Zedillo denied the allegations, saying, "They laid a trap for me." Herran said there was no proof Rodolfo Zedillo did anything wrong. On Sunday, the news magazine Proceso outlined narco-traffickers' strategy for infiltrating the presidential palace, Los Pinos, using cash. Raul Salinas, the brother of former president Carlos Salinas, already is in jail on murder charges and charges of illicit enrichment. Authorities discovered tens of millions of dollars in foreign bank accounts belonging to Raul Salinas and allegedly linked to drug lords.