[Congressional Record Volume 144, Number 67 (Friday, May 22, 1998)]
[Senate]
[Pages S5463-S5464]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          RECOGNITION OF U.S. CUSTOMS FOR OPERATION CASABLANCA

 Mrs. FEINSTEIN. Mr. President, I rise today to commend the 
U.S. Customs Service and the Departments of Treasury and Justice for 
one of the most important victories they have had in the war on drugs 
to date.
  I would like to thank Attorney General Janet Reno, Secretary of the 
Treasury Robert Rubin, and Undersecretary of the Treasury for Law 
Enforcement Ray Kelly for their leadership in this important endeavor 
and the two hundred U.S. Customs agents, who put their lives at stake, 
diligently and tirelessly for thirty months, to establish this 
necessary beachhead in the war on drugs. It is a testament to the 
dedication and the ability of our law enforcement personnel that they 
were able to complete this difficult and dangerous operation.
  On Monday, May 18, Secretary Rubin and Attorney General Reno 
announced the arrests of 112 people involved in illegal drug money-
laundering in Mexico, which resulted in the seizure of an anticipated 
$157 million in over 100 accounts in the United States, the Caribbean 
and Europe. Furthermore, 4 tons of marijuana and 2 tons of cocaine were 
seized during this 30-month undercover investigation. The indictments 
include officials from 12 of Mexico's 19 largest banks, who stand 
accused of knowingly abetting drug traffickers to launder hundreds of 
millions of dollars.
  As a result of this investigation, for the first time ever, Mexican 
banks have been directly linked to money laundering and have been 
indicted as institutions due to their complicity in money-laundering, 
the significant number of employees involved, the large number of 
illegal transactions, and the institution-wide profiting from these 
illegal transfers, which brought a 4-5% fee per transfer. Bancomer, 
Mexico's second largest bank, Banca Serfin, Mexico's third-largest 
bank, and Confia, also among the top twenty, were the three banks 
involved.
  This investigation, known as ``Operation Casablanca'', involved two 
hundred undercover Customs agents, targeting the Cali cocaine and 
heroine syndicate in Colombia, the Juarez cartel in Mexico, and the 
involvement of Mexican banks. Two hundred individuals face arrest 
warrants as the investigations continue, including warrants issued for 
the Juarez cartel money manager, Victor Alcala Navarro and one of its 
leaders, Jose Alvarez Tostado.
  I would also like to show my support for the Federal Reserve's 
issuance of ``cease and desist'' orders suspending the U.S. operations 
of Banca Serfin, Bancomer, Banamex, Bital of Mexico and Banco Santander 
of Spain, because of ``serious deficiencies in their anti-money 
laundering programs.'' These banks must institute new and tougher 
controls to resume business in the United States.
  Despite Mexico's lax enforcement of its own money-laundering 
statutes, it is good to see that the United States is not afraid to use 
its own resources to address this serious problem.
  I hope that operations like these will continue to bleed the powerful 
drug cartels. The American and the international drug war has benefited 
from this peek into the intricacies of drug-related money laundering.
  However, Mr. President, I cannot help but see this latest good news 
in relation to my concerns about Mexico's insufficient counternarcotics 
cooperation with the United States. The Mexican government was not 
informed of this 3-year, extensive investigation

[[Page S5464]]

until the same morning the press was. Why not? It would seem that this 
would have been a perfect opportunity to engage in a cooperative law 
enforcement effort.
  The Administration's certification of Mexico for its counternarcotics 
cooperation in March certainly suggests that a major investigation like 
``Operation Casablanca'' would have been a joint effort. However, the 
reality is that distrust between U.S. and Mexican law enforcement has 
strained relations and hurt earlier cooperative efforts.
  Undersecretary Ray Kelly, who has been nominated to be the chief of 
the Customs Service, answered this question in an article of The 
Washington Post on May 19th. The Mexican authorities were not informed, 
``Because of fear of compromising the operation and placing the lives 
of U.S. agents in danger.''
  Since the announcement of the indictments this week, the Mexican 
government has made statements in support of this operation, and the 
Mexican Attorney General indicated that his office will investigate 
these banks as well.
  I just hope that this will result in tougher Mexican laws against 
drug traffickers and money-launderers and progress toward real 
cooperation to halt the flow of drugs across our borders, rather than 
the erratic and insufficient cooperation that we have seen until now. 
Let the Mexican government take this opportunity to prove their 
commitment to fighting the spread and profit of drugs. Let this be the 
start of a new concerted and cooperative effort to rid our countries of 
this menace.

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