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Mexican Drug Conference Fuels Dispute Over Money Laundering

By Mary Beth Sheridan and Mark Fineman
Los Angeles Times

After U.S. and Mexican narcotics agents spent three days sharing ideas on how to intercept the tons of cocaine that flow into the United States each year, a hemisphere-wide conference on drug trafficking ended Thursday amid a diplomatic row about the laundering of drug money.

Mexico's angry rejection to the U.S. Drug Enforcement Administration's assertion that Mexico's banks are being used to launder millions of dollars of narcotics profits underscored the delicacy of U.S.-Mexican relations in the war on drugs.

Both governments have called narcotics trafficking a major threat to their security, and Mexico hosted the DEA's annual counter-narcotics conference, which drew agents from more than a dozen countries to share intelligence and ideas on curbing the drug trade.

But the headlines in the Mexican press throughout the week were dominated not by the cooperation but by Mexico's fury over DEA chief Thomas Constantine's assertion that drug traffickers were depositing millions of dollars in Mexican banks.

"Of particular seriousness is the fact that Mr. Constantine suggested that the Mexican banking system has been converted into a massive mechanism of money-laundering when there is no concrete accusation or proof that confirms this," the Foreign Ministry declared. Business leaders, the finance ministry and top Mexican anti-drug officials also issued angry denials that the country's banks are tainted. And a 3-inch headline in one afternoon daily screamed, "The DEA: Meddler."

Yet, in a clear expression of its own concern over the inflow of drug profits, the government of President Ernesto Zedillo had earlier this year sent Congress a comprehensive anti-narcotics bill that would outlaw money laundering.

The uproar nonetheless illustrated how sensitive Mexicans remain to U.S. involvement in their country, even as they work increasingly with Washington to combat the growing drug trade.

While Mexican officials lashed out at Constantine, for example, the Pentagon announced it will give several dozen helicopters to Mexico's armed forces to fight drug trafficking. The announcement came during a visit by Gen. Enrique Cervantes Aguirre, Mexico's defense minister, to Washington to strengthen ties between the military of the two countries.

"There is clearly an extremely positive attitude on their (the Mexicans') part, but they remain sensitive when criticism comes from the outside, particularly the U.S.," a senior U.S. official said in a telephone interview from Washington.

The diplomatic flap over money laundering is a case in point.

Constantine and other U.S. officials have asserted that as much as 75 percent of the cocaine reaching the United States passes through Mexico. With the capture last year of the leaders of Colombia's Cali Cartel, they have expressed concern that Mexico will become an even bigger factor in world drug trade.

During a news conference Monday, Constantine said evidence is mounting that Mexico has also become a major center for laundering the proceeds from drug sales in the United States. Drug traffickers are "running the money across the Southwest border in cash, several million dollars at a time," he said.