U.S. Investigating Mexico Drug Sting, Rubin Says

May 25, 1998 - 0:0
KANANASKIS, Alberta, - The U.S. Treasury Department is investigating whether the United States broke Mexican laws in a probe of and sting against alleged drug-money launderers, Secretary Robert Rubin said on Saturday. The three-year operation implicated 12 Mexican banks. There's been concerns expressed, and we're looking at it, he told reporters on the sidelines of a meeting of finance ministers from the Asia-Pacific region in this resort in the Canadian rockies.

We'll have a better idea next week. Rubin spoke after a closed-door meeting with his Mexican counterpart, Jose Angel Gurria, earlier on Saturday. They agreed that the indictments of Mexican bank employees and officials were not a reflection on the safety and soundness of Mexico's banking system, a treasury spokesman said later. Secretary Rubin and Secretary Gurria reaffirmed their strong commitment to continuing their cooperation against money laundering, he added.

Mexico formally protested to the United States last week over its handling of the operation, alleging that U.S. undercover agents had crossed into Mexico. Washington said the probe had been limited to U.S. soil. Rubin defended the fact that only a very small circle of people had been informed about operation Casablanca. In these undercover operations, you have people whose lives are literally at stake, he said.

The Mexican Foreign Ministry last week ordered the country's embassy in Washington to send a formal protest to the U.S. government and to express Mexico's deep concern and surprise over the investigation and sting unusually strong words for a diplomatic exchange. The discord came after U.S. officials announced they had arrested more than 100 people and indicted 26 officials at 12 Mexican banks for allegedly laundering drug money for Mexican and Colombian cartels.

On Wednesday, the U.S. Treasury Department said the investigation had also implicated four Venezuelan banks. The next day Colombian authorities said they had frozen bank accounts holding about $590,000 as a result of the operation. (Reuter)