[Congressional Record Volume 144, Number 67 (Friday, May 22, 1998)]
[House]
[Pages H3941-H3942]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 APPLAUDS ``OPERATION CASABLANCA''--DRUG MONEY LAUNDERING CASE--CALLS 
            FOR INVESTIGATION INTO CITICORP/CITIBANK'S ROLE

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentlewoman from California (Ms. Waters) is recognized for 5 minutes.
  Ms. WATERS. Mr. Speaker, it is about time. The big money laundering 
bust successfully executed by the United States Customs Department is 
the kind of work that our government ought to be doing. Clearly we know 
that 70 percent of the cocaine and over half the heroin is imported by 
the multinational drug cartels, like the Colombian Cali cartel and the 
Mexican Juarez cartel. Finally, the money operations of these 
international syndicates have been successfully targeted.
  If we are to get drugs off the streets of our communities, South 
Central Los Angeles, East Los Angeles and other cities, we must 
capture, indict and convict the white collar criminals that run the 
drug trade's money laundering operations and not spend all of our time 
and resources going after the small time street level criminal.
  Without the ability to spend the profits of drug trafficking, the 
drug trade would come to a screeching halt. It is money laundering that 
keeps the drug trade going. But we must go further. We must also target 
the American banks who cooperate with foreign banks to launder drug 
money. Today I wrote to Attorney General Janet Reno to inquire about 
Citicorp/Citibank's involvement in the latest money laundering raid. 
Citicorp/Citibank is currently under investigation into its involvement 
with the drug money laundering activities of Raul Salinas, the former 
senior Mexican official and brother of former President Carlos Salinas. 
Citibank controls one of the three banks that was indicted just the 
other day in the money laundering case. Confia is one of three Mexican 
banks indicted in Operation Casablanca for systematic involvement in 
drug money laundering for the Juarez and Cali cartels.
  According to the Attorney General and Customs officials, they have 
been involved in massive money laundering for years. Confia's previous 
parent group, Abaco Grupo Financiero, was recently implicated in a 
major bank fraud case in which Abaco's chairman was sent to prison for 
defrauding investors of $170 million. During the same period, Citibank 
worked to acquire Confia in order to expand its position in the Mexican 
market.
  In August of 1997, Citibank signed a letter of intent to acquire 
Confia; this is the bank that is known to be trafficking and laundering 
money. They paid $45 million over the market value to secure control of 
Confia. Why? On May 11, 1998, Citibank took control over Mexican bank 
Confia and a week later guess what happened? Confia was indicted in 
this big drug raid. This is the bank that just was acquired by Citicorp 
and Citicorp acquired the bank at the same time that it was under 
investigation by the Justice Department for money laundering.
  I am interested in determining whether Operation Casablanca raises 
new questions about Citicorp/Citibank's banking practices. Today we 
learned that, in addition to that, $4.2 million was seized in this 
operation from an account in Bankers Trust in New York as part of 
further arrests and indictments.
  We do not know where this is going, and we do not know where it is 
going to stop, but there certainly are a lot of unanswered questions. I 
am pleased that this enforcement action appears to have been a success. 
However, we should not allow the indictment of the banks to stop at the 
border. They could not be successful without the cooperation of some of 
our American banks. We cannot allow our American banks off the hook.
  To that end, I am calling on Attorney General Janet Reno to look into 
the role of Citicorp/Citibank, Bankers Trust of New York and any other 
U.S. bank that is involved in this and related money laundering cases.
  Let me just say that this is a big discussion going on in this House. 
The Republicans have taken it up as a political issue in an election 
year. They would like to point their fingers at the Democrats and say, 
oh, you have not done enough. Let me warn the Republicans and the 
Democrats, this issue is not to be played with. This cannot be a short-
term Band-Aid type look at these

[[Page H3942]]

problems. Some of us have invested priority time in trying to get to 
the bottom of drugs in this country. Illegal drugs are destroying 
America. It is our greatest risk.
  I am saying to this entire Congress, we have got to be serious about 
the business of getting to the bottom of it. It is about time we look 
at big boys in high places and white collar criminals who are involved 
in money laundering.
  I submit for the Record the letter to Janet Reno that requires her to 
look further into this matter.


                                     House of Representatives,

                                     Washington, DC, May 21, 1998.
     Hon. Janet Reno,
     U.S. Attorney General, Department of Justice, Washington, DC.
       Dear Attorney General Reno: As a senior member of the House 
     Banking and Financial Services Committee, I read the reports 
     of the U.S. Customs Service break-up of a major drug money-
     laundering operation with great interest. I congratulate all 
     those involved in targeting the top levels of the Juarez and 
     Cali cartels and their bankers and banks. I am encouraged to 
     learn that the Attorney General's office and the Department 
     of Treasury is starting to put more resources into targeting 
     drug money laundering. Cutting the drug lords off from their 
     profits is key to ending this deadly trade.
       However, a careful review of the situation raises 
     additional, unanswered questions regarding the role of U.S. 
     banks in this investigation.
       It is common knowledge that Citicorp/Citibank is under 
     investigation, regarding its involvement with Raul Salinas' 
     money laundering activities. We now learn that Citicorp's 
     banking unit, Citibank, recently assumed management control 
     over Confia--one of the three indicted banks in Operation 
     Casablanca.
       In addition to the current indictment, which came after 
     three years of undercover investigations, Confia's parent 
     group, Abaco Grupo Financiero S.A., recently was implicated 
     in a major fraud case in which Abaco's chairman was 
     imprisoned last November for defrauding investors of $170 
     million dollars. While Confia was engaged in systematic drug 
     money laundering for the Juarez and Cali cartels, Citibank 
     signed a letter of intent to acquire Confia in August of 
     1997. Citibank took over control of Confia on May 11.
       These facts raise some serious questions about the 
     relationship of U.S. based financial institutions to those 
     implicated in this major money laundering case.
       1. Did the acquisition of Confia by Citibank help 
     facilitate money laundering by Confia?
       2. Given what we know of the rampant money laundering 
     activities by Confia, what was the responsibility of Citibank 
     to exercise due diligence in the acquisition of Confia and 
     did Citibank meet its burden?
       3. Is the current investigation of the potential 
     involvement of Citicorp/Citibank in Raul Salinas' drug money 
     laundering activities close to concluding?
       4. Are there any other U.S. financial institutions under 
     investigation for money laundering activities?
       As Members of the House Banking Committee consider the 
     implications of Operation Casablanca with regards to the 
     integrity of our financial system, I would greatly appreciate 
     a prompt response to these questions.
           Sincerely,
                                                    Maxine Waters,
     Member of Congress.

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