The crowning achievement of Salinas’s reign was his successful negotiation of the North American Free Trade Agreement, or NAFTA. Salinas worked closely with both Bush and Clinton to navigate the agreement around opponents on both sides of the border. The US poured money into Mexico to lobby the Mexican public for the trade pact. The National Endowment for Democracy, a foundation with long-standing ties to the CIA, channeled more than $1 million into Mexico in 1990 to build support for NAFTA. Some of the money no doubt returned to the United States as part of the millions that Mexico spent to lobby members of the US Congress who were reluctant to support a pact that might entice even more US companies to relocate American jobs to Mexico.
Questions about human rights, the environment, money laundering and drug trafficking were brushed aside. In fact, both the DEA and the US Customs Service were prohibited by the Bush and Clinton administrations from raising the subject of drugs during the NAFTA negotiations. “They said we could not make drugs part of the debate,” said Carol Hallen, US customs commissioner during the Bush presidency. “I think it was a terrible mistake not to tie the two together.”
It would not have been hard to do. Evidence of the involvement of the Mexican police and military in the drug trade was glossed over by the US government during the period when the terms of NAFTA were being ironed out. When seven Mexican drug agents were gunned down in an ambush by 100 members of the Mexican army on the payroll of a drug cartel, US Ambassador John Negroponte dismissed the slaughter as “a regrettable incident.” The slaughter had been videotaped by the DEA from another plane, which had also been strafed by the army unit.
Robert Nieves, the former chief of the DEA’s international operations, said that his agency could never get an audience for its concerns about how NAFTA might serve as a boon to drug traffickers. “Drugs have never been the number one issue as it relates to Mexico,” Nieves said. “It ranks somewhere below the North American Free Trade Agreement, economic bailout and other bilateral trade and commerce issues.”
But the drug agents had good cause for concern. The reign of Carlos Salinas witnessed an astounding expansion of the Mexican drug trade. By 1990, more than 75 percent of all cocaine entering the United States came through Mexico. Mexico remained a major producer of marijuana, and was well on its way to becoming a leading source of heroin and methamphetamines. The Mexican government itself estimated that the illicit drug business was generating more than $30 billion a year. Other reviews of the trade put the figure at closer to $50 billion.
The drug business in Mexico was dominated by four multibillion dollar cartels. The old Guadalajara cartel, started by Sicilia-Falcon, splintered into two operations after the 1989 arrest of Félix Gallardo, one based in Sinaloa and another headquartered in Tijuana. The Tijuana cartel was run by the violent Arellano-Fé1ix brothers, who were behind more than 200 drug-related slayings in Tijuana in 1992 alone. Many of its victims were tortured and dismembered. In 1993, the Arellano-Félix gang ordered the assassination of Cardinal Juan Jesus Posadas Ocampo at the Guadalajara airport. The four gunmen surrounded the cardinal’s car, opened the door and filled his body with bullets. The killers then walked into the airport, flashed badges identifying them as members of the Federal Judicial Police and got on an AeroMex flight to Tijuana. Since this brazen evidence of drug violence and corruption might have had an adverse impact on the NAFTA debate, the killing was touted as a mystery, alien to Mexico’s normal manner of doing business.
In 1996, another Federal Judicial Police unit working for the Arellano-Félix gang was linked to the murders of Tijuana’s top drug investigators, Ernesto Ibarra Santes and Jorgé García Vargas. Ibarra Santes was gunned down a month after purging 700 corrupt police officers from his unit. Around the same time, García Vargas, Tijuana’s anti-drug chief, was kidnapped at the Mexico City airport, tortured and strangled. His mutilated body was found in the trunk of a car.
The Juárez cartel, headed by Amado Carillo Fuentes until his death on July 4, 1997 from complications following plastic surgery, was perhaps the most profitable of the Mexican drug enterprises. Some estimates showed the Carillo operation to be generating more than $20 billion a year in cocaine sales. Carillo, who was a relative of the Ochoa family, flew huge amounts of cocaine from Medellín and Calí, Colombia on the cartel’s own fleet of Boeing 727 planes: he became known as “Lord of the Skies.”
The drug enterprise with the most intimate ties to the Salinas government was the Gulf cartel, based in Tamaulipas and headed, until his arrest in 1996, by Juan García Abrego. Abrego got his start in the drug business in the mid-1970s exporting Mexican marijuana to Texas, Louisiana and Florida. In the early 1980s, García Abrego turned to cocaine. His major innovation was to change the terms on which Mexican cocaine couriers received payment from the Colombian cartels. Instead of accepting the usual $1,500 per kilo as a transport fee, García Abrego demanded a 50 percent share of the Colombians’ cocaine shipments. This allowed him to set up his own distribution networks and dramatically increase his profits and political influence. A 1994 DEA report pegged Abrego’s revenues from the cocaine business at more than $10 billion a year.
By 1990, this flood of drug money had saturated the Salinas administration. The Mexican daily El Financero claimed that during the Salinas years upwards of 95 percent of those working in the attorney general’s office had been bribed by the drug cartel. There’s no better example than Javier Coello Trejo, the man Salinas picked to head the anti-narcotics wing of the attorney general’s office. Coello Trejo, who referred to himself as the Iron Prosecutor, was praised by the US for his tough measures. But according to Eduardo Valle, an investigator in Coello Trejo’s own department, the attorney general was on the payroll of García Abrego to the tune of more than a million dollars a year. One of Coello Trejo’s aides alone pocketed more than $50 million from the drug trade, Valle said. The office’s drug enforcement operations tended to focus on rivals of the Gulf cartel.
In 1994 García Abrego’s cousin and partner in the cocaine business, Francisco Pérez Munroy, testified in a Texas drug trial that he had personally delivered money and expensive gifts to the attorney general and his wife. “Well, the suits and the money,” Pérez testified, “they were so that he wouldn’t be bothered with the movement of drugs.”
The attorney general’s alliance with drug dealers never seemed to concern either Salinas or the US government. But Coello Trejo did land in hot water when four of his bodyguards were convicted of raping nine women in Mexico City. Under pressure from religious groups, Coello Trejo resigned, accompanied by expressions of regret by the US Embassy. “He’s been great,” a state department official told the Los Angeles Times. “This is a blow.”
But Coello Trejo didn’t languish long in the unemployment lines. Salinas soon appointed him to the post of federal attorney for consumer affairs. In 1995, the Mexico City paper La Reforma reported that Coello Trejo was serving as an adviser to Mexico’s new internal security apparatus, the Coordinación de Seguridad Pública de la Nacíon.
The Clinton administration did everything in its power to conceal the criminality saturating the Mexican state apparatus. In October 1996, the Clinton White House invoked executive privilege to keep from turning over to Congress an April 1995 memo written by FBI director Louis Freeh and DEA administrator Thomas Constantine. The memo excoriated the administration’s drug policy, particularly regarding Mexico. According to a report in the New York Times, Freeh and Constantine charged that the Clinton drug policy was “adrift,” “lacked any true leadership,” and was being sabotaged by competing agencies, including the CIA, the Department of Commerce and the NSC.
An internal State Department memo written two years after the passage of NAFTA reached similar conclusions. It identified Mexico as “one of the most important money laundering centers in the Western Hemisphere” and cited it as the “principal transit route for cocaine entering the United States.” The report concluded that “no country in the world poses a more im
mediate narcotics threat to the US than Mexico.”
The Fall of the House of Salinas
Carlos Salinas’s six-year term as president of Mexico ended in a blaze of gunplay. On March 23, 1994, Salinas’s hand-picked successor, Luís Donaldo Colosio, was shot in the head and killed during a campaign stop in Tijuana. Although Colosio was close to Salinas, he had recently angered many PRI hard-liners by vowing to clean out corrupt government officials and take action against the drug cartels. Colosio was killed two days before he was scheduled to meet with Mexican drug investigators looking into ties between the Gulf cartel and the Salinas government. A few days before his murder, Colosio had ordered Humberto García Abrego, Juan’s brother and an executive of the Gulf cartel, removed from the list of attendees at a PRI fundraising event, a move that angered the drug lords.
“I have no doubt that Colosio was killed by narco-politicians or polinarcos,” said Eduardo Valle, the former head of a Mexican drug task force targeting the García Abrego operation. Valle’s investigation was shut down by Carlos Salinas, and Valle fled to safety in the United States in August 1994.
The Salinas administration blamed Colosio’s assassination on a deranged gunman named Mario Aburto Martínez. But Mexican police unearthed evidence that many others may have been behind Colosio’s killing, including the drug cartels and members of Salinas’s government. The police had some suspicion that an officer in Center for Investigation and National Security (an agency thoroughly penetrated by the Gulf cartel) might have aided Aburto in Colosio’s murder. In the end, the attorney general’s office released all suspects other than Aburto, reportedly on the orders of Carlos Salinas.
After Colosio’s death, Salinas tapped Ernesto Zedillo Ponce de León as the new PRI presidential candidate. The PRI had groomed Zedillo from an early age. He was sent to study in England and to Yale, where he received a doctorate in economics. He served a stint as a banker, and then in 1988 he was appointed by Salinas to the important post of secretary of programming and budget. After supervising the Salinas privatization scheme, Zedillo became secretary of education. A 1995 CIA psychological profile of Zedillo described him as “cold, hard, rigid and humorless.”
To assist Zedillo in his run for the presidency, Salinas turned to an old friend and former brother-in-law, José “Pepé” Ruiz Massieu. Ruiz Massieu was appointed the new secretary general of the PRI and was set to be majority leader of the Mexican congress. But Massieu had been a good friend of Colosio’s and used his position to push for a more thorough investigation of the slain candidate’s assassination. Massieu also began to take up Colosio’s unnerving talk about reform. He gave speeches suggesting it was time to shake up the PRI leadership, cut some of its ties to the Mexican business elite, and pursue a more progressive agenda.
On September 28, 1994, Ruiz Massieu got into his car outside the Casablanca Hotel in downtown Mexico City. A 28-year-old farm worker named Daniel Aguilar stepped up to the car and shot him in the neck with an Uzi submachine gun. Ruiz Massieu died an hour later. Aguilar was nabbed by a guard at the scene and wasted little time in telling the police that he had been hired for the hit on Ruiz Massieu by Fernando Rodríguez. Rodríguez was a senior aid to Manuel Muñoz Rocha, a PRI politician from Tamaulipas, the headquarters of the García Abrego cartel. Rodríguez said Muñoz Rocha and a García Abrego associate, Abraham Rubio Canales, ordered him to arrange the assassination.
To quell suspicion of another government cover-up, Carlos Salinas appointed Pepé Ruiz Massieu’s brother, Mario, to lead the investigation into his death. Mario Ruiz Massieu was an assistant attorney general with a reputation as a political reformer and a battler against corruption. US intelligence agencies had known otherwise for years, but apparently neither the CIA nor the Defense Intelligence Agency told any Mexican law enforcement officials that the deputy attorney general was on the payroll of the Gulf cartel until after Mario fled Mexico for the United States, where he had stashed away more than $7 million in the Texas Commerce Bank. Aside from the CIA’s routine monitoring of Ruiz Massieu’s activities, the Texas bank had informed the feds of the prosecutor’s suspicious deposits in March 1994. No action was taken until Ruiz Massieu showed up in New Jersey in January 1995.
Instead of probing the forces behind his brother’s murder, Mario Ruiz Massieu had apparently covered up the involvement of the Mexican president’s brother, Raúl Salinas, and his associates in the Gulf cartel in Pepé’s slaying. It turns out that the key witness in the case, Fernando Rodríguez, had fingered Raúl as the “intellectual author” of Pepé’s assassination. Even stranger, Rodríguez had asserted that Carlos Salinas himself was present at the March 1993 meeting when Pepé Ruiz Massieu’s murder was planned by Raúl Salinas and Muñoz Rocha.
Raúl Salinas was arrested on murder charges on February 28, 1995. His brother Carlos, a man who had been the toast of the town, honored with a slot on the board of the Dow Jones Company, parent company of Salinas’s greatest admirer, the Wall Street Journal, and promoted as the heavy favorite to head the World Trade Organization, fled Mexico for the life of a furtive itinerant, scuttling between a Cuban compound and an estate in Ireland.
Raúl’s Dirty Money
While Raúl Salinas was sitting in a Mexican jail – where, at least as of the spring of 1998, he remains – his wife, Paulina Castañon, was seized by Swiss drug enforcement authorities while trying to withdraw money from a bank account in which Raúl had no less than $90 million under the name Juan Guillermo Gómez Gutierrez.
An interesting account of Raúl Salinas’s banking habits appeared on the front page of the June 4, 1996 New York Times in a story written by Anthony de Palma and Peter Truell. Presumably basing their account on information from Mexican state investigators and from PRI sources around embattled President Ernesto Zedillo – who have no love for the Salinas family – the New York Times reporters gave an account of how Raúl had received special treatment from Citibank as he went about the business of transferring enormous sums from Mexico to secret accounts abroad. The bizarre aspect of an altogether fascinating story was that in an article of 4,200 words the phrase “money laundering” was used a total of two times, neither of them in connection with Citibank. The word “drugs” was similarly inconspicuous, with cautious language from the intrepid journalists to the effect that there were “rumors but no evidence” that what Mexican prosecutors had termed Raúl’s “inexplicable enrichment” had come from the drug trade. De Palma and Truell did note that “US laws bar banks from knowingly accepting money or turning a blind eye from crimes such as drug dealing.”
Raúl Salinas, on an official salary of $190,000 a year, had approached Citibank’s private banking unit, described by the Times as a “bank within a bank, reserved for the very rich.” Here Salinas placed himself and his fortune in the capable hands of a Cuban American woman named Amy Elliot, a vice president of Citibank in charge of private accounts.
Elliot pampered the Mexican tycoon, making ten to twelve trips a year to Mexico for consultations on how Raúl’s torrent of pesos – whose origins she apparently never questioned – would be steered to off-shore accounts in the Caymans, the Bahamas and kindred secret sanctuaries before ending up in the placid harbor of Switzerland. Elliot later said that inquiring into the source of the Salinas’s millions “would be like asking the rockefellers where they got their money.” From 1992 on, there was lavish reporting in the Mexican press of how Raúl had amassed his criminal fortune. His methods included shakedowns of contractors, sale of access to his brother, and partnerships with the Mexican and Colombian drug cartels, by whom he was known unflatteringly as “the leech.”
But Amy Elliot was not a rogue operator at Citibank. “Elliot didn’t do anything on her own,” a federal banking investigator told the Miami Herald in 1996. “Citibank’s top management was behind everything she did.” She told investigators that her boss, Edward Montero, and a Citibank lawyer, Sandra Lopez Bird, had approved the Salinas account and the transfers to Switzerland.
Elliot testified to federal investigators that after Raúl Salinas’s arrest, Montero had instructed her to give his account information to his brother Carlos, who was waiting in a limousine outside Elliot’s Citibank office in New York.
Sometimes Raúl Salinas’s money would spring from Banco Cremi in Mexico City, be transferred into a Citibank account, also in Mexico City, and then be dispatched directly to a Citibank unit in Zurich called Confidas. There were many other paths, but they all added up to the same thing: the brother of the Mexican president was taking in an immense hoard of ill-gotten money and hiding it abroad. Raúl later told Swiss investigators that he was stashing his money in off-shore accounts in order to avoid “political scandal.”
The virtue of the New York Times article was that it showed the minutiae of money-laundering procedures: one can imagine a Third World predator, or a First World one for that matter, studying the text and then thoughtfully reaching for the phone to have a chat with Citibank. What the Times piece did not do was place Raúl’s operations in the context of his overall activities in Mexico, or suggest that operations described in such detail might throw useful light on the ties between the US banking industry and the international traffic in heroin and cocaine.
The Times’s reporters offered no explanation of where the $90 million might have come from. In fact, the figure of $90 million itself is a grotesque underestimate of an operation that has been reckoned by Mexican authorities to have garnered Raúl more than $1 billion during the six years his brother held office.
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