Following the Money Trail - to Citibank

On the morning of March 1, 1995, there was panic on the 17th floor of the Citicorp-Citibank building in New York City. Alarmed Citibank executives read the top story on the front pages of that day’s newspapers: Raúl Salinas de Gortari [brother of former Mexican President Carlos Salinas de Gortari] had been arrested the day before in Mexico. They knew it was only a matter of time before investigators would arrive and begin to ask questions about the deposits made by Raúl Salinas at Citibank.

Around that time, Citibank of New York was transferring Juárez drug cartel money to Uruguay and Argentina, where Mexican drug lord Amado Carrillo Fuentes and his associates went calmly about their business, with help from local politicians and
businessmen. Not long after, investigations would reveal that in 1998-99, more than $300 million belonging to Mexican drug traffickers went through Citibank.

These converging events are the crux of Ojos vendados (Blindfolded) by Andrés Oppenheimer [published by Plaza & Janés], which digs deep into the role of transnational corporations and the U.S. government in corruption scandals in Latin America.

[In a telephone interview from Buenos Aires, where he presented his book on March 22] Oppenheimer says the thesis emerging from these histories is that the fight against corruption must be globalized. In other words, “Mexico can establish all the commissions it wants....But if Raúl Salinas can go to Citibank of New York and deposit $120 million without being asked any uncomfortable questions, there will be no end to corruption.”

He is confident, however, that things are improving. “The scandal that erupted from the millions...deposited by Raúl Salinas forced Citibank to adopt radical measures....Today it’s not very likely that Citibank would accept huge deposits from a brother of a Mexican politician. So, there’s progress, and I hope there will be more.”

Ojos vendados may read like a novel, but it is based on reliable documents and testimonies gathered in five countries over a four-year period. In addition to tying up loose ends and reconstructing events, the book contains some revelations. One is that U.S. district attorneys extended the inquiry into the Raúl Salinas-Citibank connection by two years, with the objective of presenting criminal charges against the bank. And, among U.S. Senate papers, Oppenheimer found evidence of a $20 million deposit by Carlos Salinas.

According to testimony by Juan Miguel Ponce Edmonson, head of Mexico’s Interpol, Argentina’s federal police had been alerted in June 1997 that Eduardo González Quirarte [one of Carrillo’s lieutenants] was in Buenos Aires. “From that moment on,” narrates Oppenheimer, “Mexico bombarded Argentine authorities with requests to help locate Mexican drug traffickers in the country...[but] Argentine authorities did not do much”—whether from lack of interest or, as Ponce suspects, because the Argentine government did not want the presence of drug traffickers to become public.

The suspicion was corroborated years later, when the U.S. investigation “Operation Casablanca” revealed that [money from] the Juárez cartel entered Argentina through two Citibank accounts and others in shell banks [in the Cayman Islands and the Bahamas]. Ponce, for his part, took advantage of Operation Casablanca to explore the vein of Juárez cartel allies in Argentina. He claims to have discovered documents in Mexico proving that large contributions were made by the cartel to 1999 campaign in Argentina of [Perónist presidential and vice presidential candidates] Eduardo Duhalde and Ramón “Palito” Ortega.

In late 2000, the U.S. Senate subcommittee investigating Citibank received information from Argentine legislators. They claimed “a gigantic political- financial conspiracy involving even Citibank President John Reed.”

In the last part of Ojos vendados, entitled “Salinas’ Loot,” the author describes the Raúl Salinas-Citibank connection in full, revealing the bank’s maneuvers to protect itself and its client Salinas after his arrest. When he started digging at Citibank, Oppenheimer came upon the “political accounts” section, with some 40,000 clients. These accounts belonged to current and former government officials from Latin America, Asia, and Africa and had been classified to be overseen with special attention.

Among the longest-standing Mexican clients is the family of Carlos Hank González [former governor of the state of Mexico, accused of links to drug trafficking]. Oppenheimer writes that “accounts belonging to the Hank family at Citibank branches in New York and San Diego had already reached a level of $42.8 million by 1988.” A few years later, during the Raúl Salinas scandal, [son] Carlos Hank Rohn had $138 million in Citibank London. It was no accident that he was known within the bank as Confidential Client No. 1 or CC1. CC2 was Raúl Salinas, with a balance calculated at $1 billion. Another old client was Gerardo de Prevoisin, president of Aeromexico airlines, “who would later flee the country amid accusations that he had stolen $72 million.”

According to Oppenheimer, “the battle for globalizing the fight against corruption is only beginning. There’s still a great deal to be done—getting rid of legal gaps, for example. The Senate subcommittee has thrown its pebble into the water—to create a ripple effect—and we journalists are throwing in ours, too.”