Clinton Administration Shuts Down U.S. Drug Probe On Top Mexican Official
MURDER, MONEY, & MEXICO
NARRATOR: By now, Raul was making a lot of money. He needed help handling it all, so on the advice of a friend he went to New York and entered the exclusive world of private banking. At CitiBank, as this account application shows, Raul Salinas's references were waived because he was_ quote_ "referred by a very reliable client of long standing"_ close quote_ Carlos Hank Rohn.
Raul's personal banker was CitiBank vice president Amy Elliot, who would use a special CitiBank system called Confidas to transfer Raul's millions out of Mexico. Raul's wife, Paulina, never questioned the arrangement.
PAULINA CASTAÑON: I didn't ask him. I didn't ask him.
LOWELL BERGMAN: You didn't ask him when he said "Deliver these cashier checks"? You didn't ask him?
PAULINA CASTAÑON: To CitiBank? I_ maybe, maybe I would ask him_ I told you_ if it was a smaller bank or something, that I think is something fishy. Why I didn't trust him? It was CitiBank. It was Amy Elliot. It was open. It was his name, Raul Salinas.
NARRATOR: And it was Raul Salinas's accounts that interested the Swiss, including the ones set up by Amy Elliot of CitiBank. Since Paulina's arrest, the Swiss have examined at least 100 suspect accounts and thousands of transactions in seven countries.
Dr. VALENTIN ROSCHACHER, Swiss National Police: It's really a huge case. I can't remember if there was a case like this before.
LOWELL BERGMAN: How much money is involved?
Dr. VALENTIN ROSCHACHER: We blocked about a little bit more than $100 million U.S. in Switzerland. It could be a lot more. And part of the money came into Switzerland and went out, so it's more than we blocked and probably it's a lot more, but I have proofs for a little bit more than $100 millions and the bigger amount I saw passing different countries. But I can't tell you if the amount was $200 million, $300 million, $400 million or $500 millions, but I think everything is possible in this case.
NARRATOR: When Paulina Castañon was arrested back in November of 1995, she was told that the reason for her arrest was a Swiss suspicion that some of the money was connected to drug trafficking.
PAULINA CASTAÑON: Laundering money and something about narcotics. And I was shocked. Shocked. After a year that I was arrested, that everything began, I haven't seen any document or any people who said that it was drug money or laundering money. No documents, nothing.
NARRATOR: The documents the Swiss have on Paulina Patricia Castañon and her husband Raul are in a room in the Swiss national police headquarters called "the Mexico room." What these files contain has led Valentin Roschacher to a startling conclusion.
Dr. VALENTIN ROSCHACHER: We are more convinced than when we started the case that this money is drug money, or the biggest part of it or_ I don't know if every dollar here on every Swiss account is a drug_ is a narco-dollar, but we think that we're on the good way to prove that the money is all drug proceeds.
LOWELL BERGMAN: You have live witnesses?
Dr. VALENTIN ROSCHACHER: Yeah, live witnesses and I hope they are still alive.
LOWELL BERGMAN: What do you mean?
Dr. VALENTIN ROSCHACHER: You know, it's dangerous for a witness to say, "Okay, this guy and this guy was involved in drug trafficking or gave protection to drug traffickers." That's not-- that's not an easy thing to say, even if it's the truth, you know?
LOWELL BERGMAN: What were the drug traffickers paying Raul Salinas for?
Dr. VALENTIN ROSCHACHER: We are talking about protection, you know?
LOWELL BERGMAN: Protection in Mexico?
Dr. VALENTIN ROSCHACHER: In Mexico.
LOWELL BERGMAN: From the government?
Dr. VALENTIN ROSCHACHER: From people that worked for the government, from the police.
NARRATOR: Officially, the police and the government under Carlos Salinas had committed themselves to an all-out war on drugs. With international pressure on Colombia, Mexico had become the major drug pipeline into the United States. But Carlos Salinas defended his government's efforts.
CARLOS SALINAS, Former President of Mexico: In Mexico in the last 16 months during my administration, we have seized 55 tons of pure cocaine. The street value of that cocaine is equivalent to one and half times the external debt of Mexico. Is it enough? Well, we will continue hitting them by seizing the drugs, destroying it and putting in jail whoever participates in drug trafficking.
NARRATOR: Despite his promises, Mexican drug lords like the Arellano-Felix brothers and Amado Carrillo operated with impunity. They flew jet plane-loads of narcotics into the country by paying off the police, the army and officials at every level of the government.
Dr. VALENTIN ROSCHACHER: When I started this case and I heard about the rumors and what the people are telling how it works in Mexico, who's protecting who, and who gives money and the drug loads of 10 tons of cocaine, 50 tons of cocaine passing Mexico, coming from Colombia, going over the Rio Grande into the U.S.-- you know, for a Swiss cop or a Swiss judge, it sounds unbelievable.
U.S. LAW ENFORCEMENT OFFICIAL: What we have here ladies and gentlemen, is the largest seizure of cocaine in the world.
NARRATOR: And the profits are unbelievable_ huge, multi-ton loads of cocaine poured north across the border. Mexico's drug cartels became the most powerful narco-traffickers in the world. Charles Intriago is a former federal prosecutor and an expert on money laundering.
CHARLES A. INTRIAGO: The profits are astounding. If a quarter of that money that the U.S. estimates is made in this country goes to or comes from Mexico, you're talking about $20 billion a year, a massive amount on a daily basis, so that it's not big surprise to me that_ of these allegations of massive amounts in payoffs_ $150 million to this public official, another $10 million to this guy, $40 million a month to these people. There are allegations in FBI documents that are now coming out that there was $150 million a month in payments to Mexican public officials. That doesn't surprise me. That is peanuts.
NARRATOR: The Swiss investigation into Raul Salinas's accounts follow a complex trail through banks in many countries. If any of that money proves to be drug-related, it could have serious consequences, especially for the U.S. banks involved.
Citibank Faulted Over Alleged Mexican Drug Money
Associated Press
December 5, 1998
By Anthony Boadle
WASHINGTON— A U.S. congressional report published Friday faulted Citibank for helping the brother of a former Mexican president secretly funnel $100 million in alleged drug money out of Mexico and into Swiss bank accounts.
Raul Salinas is the older brother of Carlos Salinas de Gortari, who was president of Mexico from 1988 to 1994.
The General Accounting Office, the investigative arm of Congress, concluded that Citibank, the second largest bank in the United States, ignored its own safeguards against money-laundering and failed to verify the source of the money.
The GAO did not find that Citibank, a unit of the banking and insurance giant Citigroup Inc, broke any law.
The GAO said Citibank set up a shell investment company in the Cayman Islands and accounts in London and Switzerland that helped the ex-president's brother, Raul Salinas, quietly transfer $90 million to $100 million between 1992 and 1994.
Swiss authorities in October confiscated $114 million that Salinas had stashed in Swiss accounts, saying the funds were protection money paid by Colombian and Mexican drug barons.
U.S. Congressional investigators found that Citibank did not run a financial background check on Salinas and allowed his wife to use another name when she wired funds from Mexico City to New York.
"Citibank ... facilitated a money-managing system that disguised the origin, destination and beneficial owner of the funds involved," the congressional investigators concluded.
Only after Salinas was arrested and jailed in Mexico on murder charges in 1995 did Citibank do a brief financial profile on him, but failed to mention the Cayman Islands shell corporation and gave no source for his wealth other than an unnamed construction company, the GAO said.
The report said Citibank never knew the company's name, who bought it or how much money the sale generated.
The report said Citibank only acted after Switzerland arrested Salinas' wife, Paulina Castanon, on money laundering and drug trafficking charges in November 1995 while she was trying to withdraw funds from a Swiss bank.
Citibank reported the suspicious transactions to federal authorities at that time, but still failed to mention the shell company or the European accounts it had set up for Salinas, purportedly because no official U.S. documentation existed, the GAO said.
Citibank used three additional shell companies to further insulate Salinas' connection to the Cayman Islands trust called Trocca, the report said.
Following his arrest, Citibank officials contacted his wife in Mexico and advised her to move all funds associated with Trocca out of the bank, the congressional report said.
Raul Salinas is the older brother of Carlos Salinas de Gortari, who was president of Mexico from 1988 to 1994 and who now lives disgraced in self-imposed exile in Ireland.
Salinas is still in jail on charges of masterminding the 1994 murder of a top ruling-party official. But a Mexican judge last month dropped one charge of illegal enrichment against him, saying there was insufficient evidence.
Salinas has denied that his fortune was ill-gotten, saying he received the money from rich Mexicans for the establishment of an overseas investment fund.
The GAO report detailed how Salinas' wife periodically withdrew funds from at least five Mexican banks, hand-carried cashier checks to Citibank Mexico and wired the money to Citibank New York under the name of Patricia Rios.
The funds were then wired to accounts in London and Switzerland, the report said.
Citibank said in a statement that the GAO investigation did not conclude that the bank had broken any laws.
The bank said the report contained "errors of fact and interpretation," but declined to specify due to an ongoing investigation in the United States.
The GAO report is expected to prod the Justice Department to speed up its three-year probe into whether Citibank broke money laundering laws in handling the Salinas money.
U.S. prosecutors would have to prove that the money came from an unlawful source if they are to make a case against Salinas or Citibank for money-laundering.
[End of Transcript]
State Dept. on Colombian Rebel Connection to Mexican Drug Cartel
State Dept. on Colombian Rebel Connection to Mexican Drug Cartel
U.S. DEPARTMENT OF STATE
Office of the Spokesman
November 29, 2000
STATEMENT BY RICHARD BOUCHER, SPOKESMAN
COLOMBIAN REBEL CONNECTION TO MEXICAN DRUG CARTEL
The Office of the Attorney General in Mexico announced on November 23
that Mexican and Colombian officials have exposed a major link between
the Arellano Felix Organization in Mexico and the Revolutionary Armed
Forces of Colombia (FARC). The link was announced after Colombian Dr.
Carlos Ariel Charry Guzman and Mexican Enrique Guillermo Salazar Ramos
were ordered held for arrest and transferred to the Almoloya de Juarez
federal prison in Mexico. Evidence shows FARC guerrillas supplied
cocaine to the cartel in exchange for cash and possibly weapons. This
development is another illustration of the FARC's deep involvement in
narcotics trafficking. Since late 1999 the FARC has sought to
establish a monopoly position over the commercialization of the
cocaine base across much of southern Colombia. The FARC forces all
growers to sell only to the FARC at one fixed price with only the FARC
permitted to sell, at a higher fixed price, to cocaine cartels.
The FARC has denied these charges. We call on the FARC to demonstrate
their non-involvement in narcotics trafficking by severing all ties
with the narcotics industry. The FARC can demonstrate such a
commitment by beginning voluntary eradication in the coca growing
areas under its control - we note they have yet to begin such a
program after two years of managing the demilitarized zone - as well
as by showing demonstrable proof of fighting narcotics trafficking in
these areas.
Source
Global Terrorist Networks in Latin America — The Connection
North-South Center Update
by Antonio Garrastazu and Jerry Haar
Source
October 10, 2001
Terrorism in its broadest sense also includes campaigns by criminal elements in the Latin American and Caribbean military and police forces; state-sponsored, in-country terrorism; and heinous acts perpetrated by bandits, gangs, and vigilante groups. For many Latin Americans who would be disposed to resist collaboration with the United States, September 11 has particular meaning in the history of the Americas as the date of the overthrow of the government of Chile’s Salvador Allende in 1973 and the start of General Augusto Pinochet’s dictatorship.
While homegrown Latin American guerrilla organizations such as Peru’s Shining Path and Tupac Amarú have been diminished, several others, such as the Revolutionary Armed Forces of Colombia (FARC), the National Liberation Army (ELN), and the paramilitary groups (AUC) of Colombia, still pose a dangerous threat to the region’s stability. The day before the September 11 attacks, the U.S. Department of State classified these groups as terrorist organizations. The FARC’s demilitarized zone is used to provide safe haven and training for international terrorists, as shown by the recent arrests of militant members of the Irish Republican Army (IRA). In Ecuador, kidnappings and assassinations along the Trans-Ecuadorian Oil Pipeline, linked to Colombian terrorists, have become commonplace. Cuba has become a refuge for terrorists seeking protection from persecution (including members of the FARC and the Basque separatist group ETA) and maintains close relations with countries listed by the State Department as sponsors of terrorism. (2)
In 2000, according to the U.S. State Department, Latin America experienced 193 terrorist attacks from a world total of 423. In early April 2001, the United States temporarily closed its embassies in Uruguay, Paraguay, and Ecuador after the Central Intelligence Agency (CIA) warned of a possible terrorist attack by the bin Laden network.(3) However, it is the tri-border area (shared by Brazil, Paraguay, and Argentina), particularly Ciudad del Este in Paraguay, that has become a safe place for terrorists, with groups such as Hamas and Hezbollah operating in this virtually lawless border area. As early as 1995, Ambassador Philip Wilcox, former State Department Coordinator for Counter-Terrorism (1994-1997), testified before the International Relations Committee of the U.S. House of Representatives that Hezbollah activities in the tri-border area have involved narcotics, smuggling, and terrorism. He further asserted that Hezbollah also has cells in Colombia and Venezuela, engages in fund-raising and recruitment, and receives guidance and logistical support from Iranian intelligence officers assigned to Iranian embassies in the region. (4)
The connection between terrorism and narcotics trafficking has been well documented. U.S. Drug Enforcement Agency statistics indicate that, in 2000, Afghanistan produced 70% of the world’s opium poppies; heroin is processed opium. Terrorist networks in the tri-border area actively engage in narcotics trade to raise cash and buy arms. A guns-for-cocaine ring between Paraguay and the FARC was busted by Paraguayan counternarcotics police in October 2000.(5) In 1998, Mohamed Abed Abdel Aal, a leader of the largest Egyptian terrorist group, Jamaa Islamiyya, was engaged in transactions with Colombian rebels, involving arms, drugs, and cash. He was apprehended by Colombian police, extradited to Ecuador, and then mysteriously "disappeared." (6)
Endnotes:
2. "Search Extends to Latin America," Stratfor, September 19, 2001; also see Michael Radu, "Latin America Has Its Own Problems with Terrorism," The Wall Street Journal, September 21, 2001.
3. "Bin Laden Threats Close Embassies," NewsMax.comWires, April 7, 2001.
4. "International Terrorism in Latin America," Ambassador Philip C. Wilcox, Jr., Testimony to the House of Representatives, Committee on International Relations, September 28, 1995.
5. U.S. Department of State, Patterns of Global Terrorism, April 2001.
6. "Terrorist with Bin Laden Connections Arrested in Colombia," Stratfor, October 23, 1998.
Terrorist with Bin Laden Connections Arrested in Colombia
Stratfor - Global Intelligence Update Red Alert
October 23, 1998
Mohamed Abed Abdel Aal, a leader of the largest Egyptian militant group, which is part of an umbrella group of Islamic militant organizations founded by Osama Bin Laden, was arrested in Bogota on Monday, October 19, two days after arriving in the city on a bus from Quito. On Wednesday, Colombia deported Abdel Aal to Ecuador after Colombian authorities claimed that Egyptian authorities had failed to file the proper paperwork to allow extradition back to Egypt. However, when Abdel Aal arrived in Quito he was met by neither Ecuadorian nor Egyptian authorities, but was driven away from the Mariscal Airport in an unidentified car. The Ecuadorean police would not confirm Abdel Aal's presence in the country when questioned by Agence France Presse.
Abdel Aal, is a senior member of Egypt's largest Islamic militant group, Jamaa Islamiyya, and is wanted by Egyptian authorities for his involvement in the terrorist attack in Luxor, Egypt in 1997. He was arrested on October 19 at a hotel in Bogota. The head of Colombia's intelligence police, Colonel German Jaramillo Piedrahita, labeled Abdel Aal a "very dangerous terrorist" holding an "important post" in an Islamic militant group. In a radio report with Colombia's "Radio Caracol" on October 21, Jaramillo explained the exact circumstances surrounding the militant's arrest and subsequent deportation. Jaramillo said that Abdel Aal had been in Italy under "surveillance" prior to his arrest in Colombia. Abdel Aal then boarded a plane in Amsterdam bound for Ecuador because the Colombian consulate in Italy denied him a visa to travel directly to Bogota. Abdel Aal then took a Bolivarian Express bus to Bogota, arriving at his hotel on October 17.
However, despite an apparently detailed background on the Egyptian militant, he was not arrested for two days. Then, rather than being extradited to Egypt, he was deported to Ecuador in accordance with a Colombian law that states that in lieu of the proper extradition papers being filed, the individual must be returned to the country of origin. Jaramillo said that Colombia could not return Abdel Aal because he had not broken any Colombian laws and Egypt had not filed the proper papers for his extradition within the required 48 hours.
If this were not already a strange turn of events, Agence France Presse reported that when Abdel Aal arrived in Quito, he was escorted to an unmarked car by three unidentified men and was driven to an unknown location. No Egyptian embassy police nor Ecuadorian police were in sight at the airport and Ecuadorian police reportedly would not confirm Abdel Aal's presence in the country.
Jamma Islamiyya is an Islamic militant group that is opposed to Egyptian president Hosni Mubarak's secular government. The group has been responsible for numerous attacks against foreign tourists in Egypt since 1992 and an attempt on Mubarak's life in 1995. The most recent of these tourist attacks occurred in November 1997 when 58 foreign, mostly German tourists and four Egyptians were killed. Jamma Islamiyya and Abdel Aal himself are not only of interest to Egypt but to the U.S. as well.
Jamma Isamiyya is connected to dissident Saudi millionaire Osama Bin Laden,who is believed to be responsible for the attacks on U.S. embassies in Kenya and Tanzania. Bin Laden is thought to have coordinated these attacks through the umbrella group that he created in February of this year in Peshawar, Pakistan, known as the International Islamic Front to Fight Crusaders and Jews (IIFFCJ). Among the groups belonging to IIFFCJ organization are Jamma Islamiyya, another Egyptian Islamic group known as Jihad, and other groups from Bangladesh, the Philippines, Kashmir and Pakistan.
Additionally, following U.S. retaliatory attacks on Bin Laden's training camps in Afghanistan and a suspected chemical weapons plant in Sudan, Jamma Islamiyya threatened to carry out reprisals of its own against U.S. targets. On August 22, Jamma Islamiyya called on Moslems around the world "to stand alongside the peoples of Sudan and Afghanistan, to besiege American embassies in Moslem countries and to force their leaders to close them and expel American diplomats who are spying on us." This refutes statements made by the group's lawyer Mutasser al-Zayat in September that Jamma Islamiyya had cut ties with Bin Laden in July, after deciding to examine a truce in its war against the Egyptian government.
Abdel Aal's presence in Colombia is interesting for two reasons. What was he doing there? And why, after capturing him, did Colombia let him go?
One possible explanation for his presence in Colombia could be that, in his capacity as a member of Bin Laden's terrorist network, he was reconnoitering possible U.S. targets in Colombia, or even preparing for action against such targets. However, this is unlikely, as the U.S. embassy in Colombia is not the same as those in Tanzania or Kenya. Unlike those two embassies, the U.S. has ensured for years that there is a massive security blanket on U.S. targets in Colombia due to already existing threats from Colombia's indigenous terrorist groups, such as the FARC and the ELN. Even other targets in Latin America would be easier, yet Abdel Aal made a focused effort to get to Colombia. Furthermore, Bin Laden lacks the kind of network in Colombia that he enjoyed in East Africa. Finally, despite the fact that he spoke Spanish, Abdel Aal was a very high profile, easily recognizable person to send on a covert mission.
Another possible explanation for Abdel Aal's presence in Colombia was that he was simply trying to hide out. However, again, not only was it difficult for Abdel Aal to blend into Bogota's populace, but his failed attempt to acquire a visa should have sent him elsewhere, if all he sought was quiet anonymity. No, Abdel Aal was a specific man on a specific mission.
The most likely mission that would bring him to Colombia would be to conduct transactions with Colombia's rebels involving some mixture of arms, drugs, and cash. Colombia has well-established networks for these items and already hosts a burgeoning narcotics economy that supports the activities of at least 15,000 guerrillas in the Colombia jungles. Abdel Aal was raising money, suggesting that perhaps Bin Laden's coffers are running a little dry.
That would seem to explain Abdel Aal's presence in Colombia, but the real oddity is the manner in which Colombia chose to deal with his arrest, detention, and deportation. Why would Colombia publicize the fact that they had arrested such a wanted terrorist and then just let him go? Such an action would undoubtedly serve to dampen Colombian relations with both Egypt and the U.S. One possible explanation is that Colombia felt it simply has enough problems to deal with regarding its own rebels, and did not wish to become involved in a Middle Eastern mess. Bogota could simply have not wanted to deal with possible reprisals that they would face if they handed over Abdel Aal to Egyptian or U.S. authorities. This is a thin explanation. They could have arranged his capture by Egypt or the U.S. so as not to expose themselves, and the threat of reprisals was slight.
First, Colombia did not arrest Abdel Aal immediately. This means that he was probably under observation, most likely to attempt to uncover his Colombian contacts. Second, Colombia had good intelligence on Abdel Aal's movements in Italy, Amsterdam, and Ecuador, though when they obtained that information is unclear. Certainly Colombian security forces did not follow the Egyptian militant across Europe. This means that Bogota had contact with Interpol. Judging by the handling of the arrest, detention, and deportation, one strong possibility is that, in arresting Abdel Aal, the Colombians accidentally upset either an Interpol or a U.S. intelligence operation. Colombian security services weren't the only ones to identify and track the militant, they just acted too soon.
There is still the question of where Abdel Aal disappeared to. The car he left Quito's airport in may as easily have taken him to detention as to freedom. He could still be under observation, as well. The U.S. embassies in Quito and Bogota were unable to provide additional information, and the State Department in Washington was unavailable for comment. There remain more questions than answers in this case. We are watching to see if Abdel Aal turns up in a Cairo prison in a few days or weeks. If not, it looks like one of Bin Laden's boys got away.
Trail of terrorist dollars that spans the world
US investigators believe about half the $500,000 that the hijackers spent on the September 11 plot was sent by Mustafa Ahmad, who is today regarded by investigators as bin Laden's finance chief, via Dubai money exchanges through Citibank in New York.."
Senator Says Bin Laden Had Accounts in Bank Shut Down in Worldwide Fraud Scandal
The Associated Press
September 26, 2001
WASHINGTON (AP)
Investigators have learned that Osama bin Laden was among those with accounts in a bank shut down in 1991 in one of the world's biggest banking scandals, Sen. John Kerry said Wednesday.
The Bank of Credit and Commerce International(BCCI) was closed after bank regulators around the globe linked it to fraud, theft, secret weapons deals, terrorist financing and drug-money laundering.
Investigators didn't know it at the time, but it turns out bin Laden had accounts at BCCI, said Kerry, a Massachusetts Democrat who led an investigation into the Third World bank.
"We have learned since from law enforcement and intelligence that when we shut it down, we dealt him a very serious economic blow because of the size of those accounts and his dependency on that flow," Kerry said.
Saudi Arabian multimillionaire bin Laden and his al-Qaida network are the prime suspects in the Sept. 11 hijackings of four U.S. commercial jetliners and attacks on the World Trade Center and Pentagon.
U.S. officials are trying to trace the money behind bin Laden's network, leading to a renewed push by Kerry and other lawmakers for tougher money laundering laws.
Kerry commented on BCCI's link to bin Laden at a Senate Banking Committee hearing on money laundering legislation.
Arab terrorist Abu Nidal and Colombian cocaine cartels also were among the bank's 1.3 million customers. Depositors lost millions of dollars when authorities seized BCCI's assets.
Bin Laden had accounts in BCCI
"Citibank", the nation's largest bank, has a notorious track record in handling huge sums of money for Raul Salinas, brother of a former Mexican president. In 1999, Bank of New York was found to have handled more than $7-billion of Russian funds suspected of belonging to crime syndicates.
"Last week, Panama said it began investigating whether bin Laden used bank accounts and companies in the country to finance his activities. President Mireya Moscoso acted on news reports that the Saudi millionaire used an offshore company, whose headquarters is in Panama, and its Swiss affiliate for financial operations."
