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SPRING 2000 ISSUE

The Cleanup Crew

From Laredo to Manhattan, cash smugglers and big banks are part of the $40 billion business of laundering money for Mexican drug cartels

by Julia Reynolds
photos by Janjaap Dekker

 

 

"Our world was all about... being too naive to realize how dangerous a game we were playing." -Antonio Giraldi, banker convicted in 1994 of money launderings

I. Life in the southbound lane
International Bridge in Laredo, Texas

That car up ahead, the black Blazer, might have a half a million dollars under the back seat. But it’s gone now — it’s just a trail of exhaust zipping over the Río Grande and into Coahuila.

It is eighty-six degrees and humid and inspectors Hernández and Hinojosa — not their real names — have to dart between pickups, trailers and dented-up station wagons that cruise along Interstate 35 under the noon South Texas sun.

They’re standing right in the southbound lanes before the International Bridge in Laredo. A mile-long trail of vehicles is headed toward Mexico. And while most U.S. customs inspectors spend their days checking people and vehicles coming into the country, Hernández and Hinojosa are among the few who keep an eye on what’s going out.

They plunk orange cones onto the roadway, and soon the traffic down-shifts to a halt. Hernández asks drivers if they have anything to declare before leaving the U.S.

He waves a new red four-by-four over to secondary inspection — under the shade of an awning, thank goodness — where Hinojosa asks the passengers to step out so Hernández can check the driver’s criminal record. Hinojosa searches for contraband. He’s looking for weapons, sure, and precursor chemicals — raw materials used to make drugs or weapons of mass destruction. But most of all he is looking for money.

Inspector Hernández, meanwhile, asks the driver to empty his pockets on a table. This guy has a tightly-wrapped wad of bills — $7500 — in his pocket. It’s perfectly legal: only cash amounts over $10,000 must be declared. But he also has a very expensive, high-tech vehicle and a record that shows up on the computer: he was recently busted for selling marijuana.

Hernández says it’s an art, knowing how to do this job. When he started, he watched the other inspectors to get a feel for how their instinct worked.

There are intangibles, things one only senses from years of doing this: the driver seems nervous, maybe he’s caught in a lie; or he —sometimes, she — has Allen wrenches that match the screws in the floor covering, or a plastic-wrapping machine in the car or just something not right.

This guy has that something, so out comes the inspectors’ arsenal. First, a mirror with a long handle to look under seats and inside bumpers. Hinojosa scans for bulges in the floor or seats that are too high. Now he gets a screwdriver to take apart a television set in the back. He doesn’t go as far as checking the gas tank. For that, he’d use a long, thin snake-periscope, like surgeons use, that can illuminate and view what’s inside the tank. Occasionally there’s a plastic-wrapped pack of cash floating in there. If a case seems to warrant it, they’ll haul the whole vehicle over to a cargo area, where every inch of it is x-rayed.

One hundred thousand dollars doesn’t take up much room: maybe the space of a shoe box if there are lots of twenties, or even less if it’s in large bills. Just a few weeks earlier, the team found nearly a quarter of a million dollars hidden in a bumper with the help of their cash-sniffing dog.

Laredo, population 122,000, is one of the busiest ports of entry into the U.S. The area processes about half of all traffic coming across the border, about 68 percent of the trade, and 80 percent of rail traffic from Mexico. Inspectors just don’t know how much cash gets through in either direction. A lot of it speeds right on by as the traffic of free trade bustles past an ever-more ethereal border.

There is simply not enough of anything to do this job: not enough manpower or time or technology. Laredo has only four inspectors, and they cannot cover the border twenty-four hours a day.

“Most of our outbound team last year got promoted, so they moved,” says port director Eugene Garza, who oversees the three ports of entry (POEs) in Laredo. “…the only thing we can do is augment [the southbound team] with overtime money so that they can be able to work a little bit more and cover a little bit more area.”

“It’s very hard, because we do not have the same facilities that we have coming northbound. There’s no secondary area… there’s no primary booths that the inspectors can work out of like in northbound. The cars literally have to be pulled off to the side of the road.”

Laredo police try to help out by working a few miles before the bridge, up the highway. A few months ago, the police nabbed $3 million that way.

The customs officers at the International Bridge are proud, too, of the fact that they’ve seized around $1.7 million in the past four and half months. In the last fiscal year, South Texas customs officers seized $21 million, 45 percent more than in the previous year.

But even $21 million is a trickle compared to the torrent of billions said to be smuggled out of Texas each year. Most of the time, this is a difficult, frustrating job, made harder by the fact that people who live far from the border have barely heard of cash smuggling, much less understand how and why it’s done.

Maria P. Reba, director of field operations for the whole South Texas region, knows it’s tough to get people to care. “Congress listens to the people. People think immigration is more of a problem, so that’s what congress funds.”

Reba, originally from Puerto Rico, has worked for the government most of her adult life, coming to Laredo after a stint in Washington where she helped author NAFTA. Her area of responsibility now stretches along 400 miles of Texas-Mexico border, from Del Rio to Brownsville, and she is in charge of ten POEs, including San Antonio and Austin airports.

Reba wishes “a curtain could be brought down on the drug trade,” while still allowing free commerce between the U.S. and Mexico. She admits that NAFTA, by explosively increasing border traffic, has made the smuggling problem more widespread. Reba sees that three things are needed to do the job right: technology, such as x-rays that can quickly scan a vehicle; intelligence “which is difficult because we are, after all, dealing with two sovereign countries,” and automated “selection systems,” which can help flag certain types of vehicles before they reach the checkpoint.

“I know people get frustrated because what we do slows them down. I want to tell people we’re doing this because it’s our job,” says Riba. “Bear with us.”

Outside, Hernández and Hinojosa believe the guy in the red truck is probably trafficking in something. But they’ve got nothing on him today, so he’s told to move on. He lets out a sigh and hits the road. The inspectors step back into the highway of cars to see what fish, if any, they might pull out of this river today.

The smell of money: How cash is smuggled

Since NAFTA opened the doors of commerce in North America, U.S. and Mexican leaders have reveled in the growth it has spawned — fairly shouting that cross-border trade topped $200 billion last year. But NAFTA carries with it another, murkier, stream of dollars: the effluent of the drug trade. Dealing with tainted cash is such a profitable enterprise that U.S. banks have gotten happily in on the action.

The launderers’ work is made easier by the fact that most people don’t have a clue how the process works. There are two stages to the dirty money business these days: first, the cash has to be smuggled out of the country, then it has to come back in, where it often finds a home in a friendly U.S. financial institution.

The first stage is simple, but it’s risky, too: cash from drug sales in the U.S. is hidden in trucks and cars and transported to Mexico, where it is run through Mexican businesses or deposited in banks that do little, if any, investigation into the source of the funds. Then it comes back to the U.S. through more respectable means, such as bank transfers or through large businesses — “repatriated” — and it is deposited into U.S. banks for safe-keeping or to finance other operations.

It’s been estimated that $20 to $40 billion a year in U.S. currency flows through Texas, then in and out of Mexico this way. This is up from the $10 to $30 billion estimated just three years ago. But the real figure is impossible to pin down.

“I know here people measure it; we have an idea of how much reserve cash is in the banks,” says Garza. “[But] for us as an agency, I don’t think we’d be able to measure that. It’s not like the smugglers give a balance sheet.”

Because bulk cash deposits are sent to U.S. banks from prominent Mexican businesses, or arrive as inter-bank transfers from Mexican financial institutions, they are often not scrutinized under U.S. money-laundering laws.

Stanley Morris, director of the Financial Crimes Enforcement Network, described the most common type of operation at a 1997 congressional hearing. Representative Henry B. González of San Antonio called for the inquiry to look into huge cash reserves that were being reported in South Texas banks.

Morris explained that currency is smuggled across the border “in a suitcase or… in the trunk of a car.” Once it arrives in Mexico, it’s deposited into a Mexican bank, and this is where the trail grows dimmer.

“Let’s assume that all this activity occurs in the same day,” Morris continued. “And during this day the bank receives not only the drug dealer’s deposit, but also receives additional U.S. currency from legitimate sources.” At the end of the day, the Mexican bank has more U.S. currency than it needs for peso exchanges and other dollar-based transactions. The Mexican bank ships the excess currency to a U.S. bank where it has a corresponding account relationship.

“At this point there is no information available to U.S. law enforcement or the U.S. bank about the ownership or source of the portion of the currency which originated from the illicit activity.”

In other words, now it’s “clean.”

Armored trucks are a preferred method of bringing this money on home, since they are exempt from reporting requirements for large cash transactions. It’s expected that the receiving bank will account for all the money, not customs inspectors.

“NAFTA had many effects,” observed New York Representative Carlyn Maloney, “one of which is we don’t have to stop all the trucks coming into our borders, so that inspection is not there. …If we’re not stopping these trucks, how are we monitoring what they’re bringing into our country?”

That particular hearing of the House Banking and Financial Services Committee came about because Henry B. González was growing frustrated trying to get a straight answer from the IRS, the Federal Reserve Board and Alan Greenspan about why there was a growing $3 billion cash surplus in South Texas banks, reported by the Federal Reserve branch in San Antonio.

The answers offered by the IRS especially troubled González. Rather than putting effort into trying to track down the admittedly hard-to-find numbers needed to understand where the surplus really came from, the IRS merely spoke to a group of South Texas bankers and came up with several “reasonable explanations.”

One was that “increased tourism and trade on both sides of the border have created significant increased activity, primarily in cash.”

The IRS also said simply that bulk cash deposits from Mexico could explain the rest of the surplus, to which González responded incredulously, “If anything, bulk cash shipments from Mexican banks to the San Antonio Fed raise even more troubling questions.” These inter-bank deposits are, after all, a favorite method used by drug traffickers.

One of the more interesting questions in the hearing was raised by Representative Jim Leach.

“It comes to my mind,” said Leach, “in my state of Iowa, we have a number of farms that feed hogs. And as one drives by one describes this as the smell of money. And the query I have from this observation is, does money have a smell?”

Yes, it does. Which is why U.S. Customs now uses dogs who can smell it, even if human beings can’t. Of course, there are those who would argue otherwise.

Another way that the money can be disguised is through “over-invoicing” at cash-heavy businesses such as casas de cambio or used car lots on both sides of the border. After four doctors turned up murdered, it was discovered that the Carrillo Fuentes drug gang even used two Juárez hospitals to launder cash.

“There’s no doubt that legitimate businesses are being utilized,” said Edward Federico of the IRS’s Criminal Investigation Division. “The money itself has been cleaned up and is just part of the money flow.”

After Representative González’s inquiry, cash surpluses in South Texas continued to climb, at least until recently. In 1997, the San Antonio branch of the Fed reported a $3.4 billion surplus, with a $3.2 billion surplus in 1998. For as yet unexplained reasons, new figures show that the surplus dropped to around $1.6 billion in 1999.

Still, most indications are that laundering and smuggling are on the rise. “We start seeing evidence that the problem is getting worse when we see larger amounts of currency in seizures,” says port director Garza.

Congressman Henry B. retired soon after his inquiry, not fully able to see it through to fruition. But since then there has been some action in Washington.

The Money Laundering and Financial Crimes Strategy Act of 1998 called for the development of a five-year anti-money laundering strategy, mostly aimed at banks and large businesses. Last September, the Departments of Treasury and Justice released a 79-page report detailing the Clinton administration’s “National Money Laundering Strategy for 1999,” which calls for a number of new measures — such as allowing crimes like arms trafficking and “public corruption” to become the basis for money-laundering prosecutions, and urging the Group of Seven (industrialized nations) to adopt consistent rules for international funds transfers. Out of this strategy came a law, the Money Laundering Act of 1999.

And then the highly controversial but little-publicized Foreign Narcotics Kingpin Designation Act became law last December. The act makes it a crime to do business with anyone on a list of “Significant Foreign Narcotics Traffickers,” and allows seizure of U.S. assets linked to those traffickers.

The bill barely made it out of the House, due to efforts by Republican Senator Richard Shelby of Alabama to soften the bill by requiring a legal finding of deliberate drug trafficking before assets could be seized. Shelby was accused by a former aide of responding to lobbying efforts on behalf of Aruban and Mexican business interests. The aide, Jim Stinebower, who helped draft the drug-trafficking bill, said he was fired for refusing to back Shelby’s proposed changes.

Shelby denied that he was influenced by the lobbyists, although other Republican leaders voiced concerns similar to Stinebower’s.

“[The kingpins’] narco-lobbyists were paid well to try to shape and gut this bill through this process,” Florida Representative Bill McCollum commented. “Well, they have not succeeded, fortunately.”

II. Not just any bank: Citibank

“Juárez is the jewel in the crown.”

— Former drug investigator Eduardo Valle

Mexico’s Juárez is a growing, complex city of two million, and among other things it is the geographic point where the old Juárez and Gulf cartels meet. Since the 1997 death of Juárez cartel leader Amado Carrillo Fuentes, a violent reshuffling of turf and leadership began that has done nothing to settle the city’s nerves.

Interestingly, it’s been said that the cartel that now bears the name of Juárez was originally called the “El Paso Cartel” in the 1960s, named for the U.S. city across the Rio Grande where it began. U.S. authorities and media must have found that naming a drug cartel after Juárez presented less of a public relations problem. But nowadays law enforcement usually refers to the cartel as “the Fuentes Organization.” (See “Hooray for Juárez,” page 66)

Last December, when nine bodies were unearthed from ranches near the city, speculation ran high that the syndicate built by the late Carrillo Fuentes, known as “el señor de los cielos (Lord of the Skies)” was responsible.

But another bit of news went almost unnoticed. That same week, U.S. Customs officials, Argentine police and the Mexican Interpol investigators held a news conference and reported that $10.8 million in suspected Juárez cartel earnings were deposited into a New York Citibank account via Mercado Abierto, a Buenos Aires money exchange house.

In fact, as far back as 1997, U.S. District Judge Ellyn Ross of the Eastern District Court in New York had ordered the seizure of two Citibank accounts valued at around $26 million and belonging to Chileans Alejandro and Jaime Ventura Cohen, who were linked to Amado Carrillo Fuentes.

In February 1998, the Ventura Cohen brothers, without acknowledging any wrongdoing, agreed to pay a $856,000 fine to settle the U.S. government charges against them and Citibank.

A Dangerous Game

Despite more stringent U.S. laws, money laundering continues to flourish. How?

One answer is the powerful influence of international private banking. Private banks, which are units of major institutions such as Chase and Citibank, offer services to extremely wealthy clients under conditions of utmost secrecy.

“The money launderer has shed his or her conventional image and now wears a chameleon cloak, provided courtesy of the international private banking industry,” said Antonio Giraldi, a banker indicted in 1994 for money laundering in Texas.

Private banks are responsible for most of the $20 to $40 billion laundered in the U.S. each year, according to a 1999 investigation led by Senator Carl Levin.

Citibank has been a name in the news lately, primarily as the subject of a U.S. Senate investigation titled “Private Banking and Money Laundering.” From 1991 to 1994, Citibank’s elite private banking unit helped Raúl Salinas, brother of the former Mexican president, maneuver at least $90 million through Citibank accounts. Salinas was Citibank’s “CC-2,” or “Confidential Client Number Two.”

Last fall, the U.S. Senate’s Permanent Subcommittee on Investigations took a look at Citibank’s role in helping Raúl Salinas and other questionable VIPs around the world discreetly hide their fortunes through offshore accounts and personal investment companies, or “PICs.”

Only quiet mention was made at the hearing of the man called Confidential Client Number One: Carlos Hank Rhon. Hank Rhon was described as the man who introduced Citibank “relationship manager” Amy Elliot to Raúl Salinas. Hank Rhon had explained that Salinas was an old boyhood chum, and he even kicked in the first $2 million to start Salinas’s new account.

A few years later, when Salinas was convicted of murder and his Citibank accounts were scrutinized, Hank Rhon backed off from his friend and would say only, “I see him socially.”

Elliot says that it was Hank Rhon’s recommendation that influenced her to waive the bank’s usual “know your customer” background check. It was an oversight that enabled Salinas to secretly plow his $90 million through his Citibank accounts and all the way to Switzerland. Swiss investigators determined that much of that money came from protection payoffs from drug cartels.

Elliot immigrated from Cuba when she was seventeen and has worked for Citibank most of her life. She eventually became the relationship manager for prominent Mexicans in the elite private banking unit. She has been the focus of much of the recent fuss about Citibank, having been grilled first by a Department of Justice Grand Jury and then last year in the Senate inquiry.

At that hearing, on November 9, an unusual witness was brought in to testify.

Antonio Giraldi, who had worked under Elliot in the late 1980s, was escorted from a Federal prison where he is serving a ten-year sentence for money-laundering. He came to talk about how the private banking system makes it easy for big-shot criminals to launder money.

Convicted money launderer Antonio Giraldi was sworn in last
November to testify at the Senate Subcommittee on Investigations.
AP Photo/ Joe Marquette

And Giraldi ought to know — in 1994, he was found guilty in a Brownsville, Texas, court for using American Express Bank to launder money on behalf of Juan García Ábrego, the Gulf cartel leader now serving eleven life sentences in a U.S. prison. The bust was a sensational sting operation, resulting in the conviction of Giraldi and another American Express Bank International private banker. The combination of forfeitures and fines totaled $35 million.

The funny thing is, Amy Elliot testified for the prosecution at Giraldi’s trail, and her testimony helped win a conviction. In sworn statements, Elliot boasted that Citibank was extremely careful in checking a customer’s background, in contrast to the recklessness shown by Giraldi and his co-defendant at American Express.

Elliot told the court, “You will be sure to be asked, ‘Who is this person, what do they do, who introduced them to you?’ by at least three or four people higher [up] than you. It’s just the way it is.”

“This is why we go to their homes, this is why we visit with their family, this is why we go to their business, this is why we remember birthdays…” Elliot said. “It’s too risky not to… do the due diligence, not to know who you’re dealing with.”

A recent report by the U.S. General Accounting Office (GAO) said Elliot’s testimony in Brownsville and her actions at Citibank were “inconsistent.”

How Giraldi must have relished the moment last November, when he got his turn before the Senate Subcommittee that was grilling Elliot!

Recalling the days when he was groomed at Citibank, Giraldi laid out the rough and raw side of this seemingly pristine world: “…no one seriously attempted to determine the actual origin of a client’s money. Our world was all about playing the ‘new deposits’ game the way our management ‘coaches’ insisted we play it, about being rewarded by them when we ‘succeeded,’ and about being too naïve to realize how dangerous a game we were playing.”

But it is a very lucrative game, where profits are often twice as much as in other banking units, and a bank may charge fees of $1 million or more per account, according to the Senate subcommittee.

Citibank is still under the lens of a four-year investigation by the Justice Department. Several technical requirements in money-laundering laws may keep the corporation and its officers from ever being prosecuted. One is that a five-year statute of limitations is approaching early next year, and if evidence on some early transactions doesn’t pan out, the case may have to be dropped.

Another is that the law says that bankers must have known or been “willfully blind” to the fact that clients’ funds stem from “specified unlawful activity.”

It hasn’t helped the Justice Department’s case that the Mexican government dropped its own “illicit enrichment” charge against Salinas before he was convicted last year of ordering an assassination, in spite of statements by a number of people who have testified that they witnessed cartel payoffs being made to Salinas. Even during the Salinas presidency, Eduardo Valle, a narcotics investigator for the Mexican attorney general’s office, reported that he found a notebook in the residence of the head of finances for the Gulf cartel mentioning payments made to the president’s brother.

Giraldi’s conviction notwithstanding, few U.S. bankers who collaborate with the narco-system are prosecuted or convicted.

One problem in enforcing new banking laws is that money laundering has always been difficult to prove: the banker will claim that she or he had no way of knowing how the money was made. Which is often true — it can be difficult and embarrassing for bankers to pry into clients’ private affairs.

Yet the number of Suspicious Activity Reports (SARs) filed by banks has jumped from around 80,000 in 1997 to an estimated 124,000 in 1999. Complaints are on the rise from civil libertarians who say new money-laundering laws require bankers to act as deputies by filing SARs on ever-increasing numbers of customers who fit a variety of vague criteria.

It might seem that this increased reporting would defeat the drug traffickers. But it is often the innocent customer — whose activity looks “suspicious” — who is reported, not the wealthy, secretive private banking client.

Banks have little to lose by reporting greater numbers of clients: new “safe harbor” laws protect them from counter-suits. By filing SARs, bankers enjoy the appearance of being tough on crime, while their elite private customers remain comfortably untouched.

Citibank, meanwhile, is expanding its Mexico business, having recently acquired Banco Confia, a move that solidifies Citibank’s control of 16 percent of the financial market in that country. Politically, the company is well-situated now that former Treasury Secretary Robert Rubin has ascended to become co-chair of Citibank.

“With Robert Rubin in place, I doubt that Citibank will ever be prosectuted in the United States,” Juan Ignacio Suárez Huape, a state legislator and president of Mexico’s Congressional Justice and Human Rights Commission, told El Andar.

Suárez Huape, who investigates narco-crimes in the state of Morelos, will become a congressman at the federal level in June, and he plans to launch a national investigation into Amy Elliot and Citibank’s activities in Mexico.

“Citibank is the bank of the Juárez cartel. It is the bank used by the narco-empire in the Americas.”

III. the Laredo Country Club

“At some future date, Laredo will

be standing as the metropolis of the

frontier, the home of a hundred

thousand and the business center

of the border…”

— The Laredo Weekly Times, 1910

There’s a story, and it goes that in 1988, Gary Jacobs, president of Laredo National Bank in Texas, took the presidents of the U.S. and Mexico, Ronald Reagan and Miguel de la Madrid, for a Sea of Cortez cruise aboard a yacht that bore the modest name of “Sheen Gone.”

Not that the ship lacked in luxuries appropriate for heads of state. But Jacobs, fluent in Spanish, had made an ironic inside joke in naming the yacht. In Mexican slang, he bragged that the ship — or its owner — was really chingón. In other words, the friggin’ best there is, boys.

A balding, bespectacled banker, Jacobs has the face of a hawk, with sharp features and sharper eyes. He’s been a friend and guest of presidents in both countries ever since those cruising days.

How did the president of a small South Texas bank find himself playing the role of broker between earth’s most powerful nation and one that was fast rising in economic and political importance?

Well, Jacobs runs a bank, and the bank is in Laredo.

 

Laredo National Bank president Gary Jacobs, center, mingles with clergy and influential Texans at the Laredo Country Club.

The old line that location is everything has proven true here. Back when the rest of the country still thought Texas money was all about oil wells, banking executives along the border were poised like coyotes ‘round a rabbit hole, ready to feast on the great boon that the North American Free Trade Agreement would bring their way.

Jacobs’s level of international influence is still apparent. When NAFTA was up for its scheduled review last year, he was invited to Mexico’s presidential mansion Los Pinos, where he told the world in flowery Spanish, “To reopen NAFTA would be a great mistake, an effort that only the eternal enemies of international trade expansion would attempt.”

Jacobs started out at Laredo National Bank (LNB) in 1966, when he “married the banker’s daughter,” as he puts it. But his real rise to wealth came after 1989, when Carlos Hank Rhon was invited by Jacobs to buy shares. Since Hank Rhon acquired ownership, says the Wall Street Journal, LNB has been “a virtual poster boy for NAFTA.” By 1994, Hank Rhon had taken over the bank in a series of suspicious maneuvers involving the flushing of millions of dollars through his family’s Citibank accounts.

Laredo National has also been in the business of making loans to Hank friends and associates. An example is a $3.5 million loan to help Máximo Haddad buy a $5 million home in Florida. Haddad is a business partner with Carlos Hank González, father of Carlos Hank Rhon, in a Panamanian highway construction project. The Mexican attorney general’s office reported last year that Haddad frequently took business trips to Panama with Mario Villanueva, the fugitive Quintana Roo governor wanted for drug trafficking and money laundering on behalf of the Juárez cartel.

The Federal Reserve Board, meanwhile, has chosen to investigate “irregularities” in the way Carlos Hank Rhon acquired LNB ownership, avoiding the legally sticky charge of money laundering. And who is expected to be the star witness against Hank Rhon? The woman who once called him “one of our most valued clients”: Citibank’s Amy Elliot.

When the Fed holds its hearing in Houston this July, it is not expected to be pretty. Jacobs and Hank Rhon have been known to bite back at those they perceive as responsible for their unpopularity. This winter, LNB has been in the process of suing Christopher Whalen, a Hank critic and former author of the Washington-based watchdog newsletter The Mexico Report, along with the U.S. government, for allegedly interfering with LNB’s ability to do business.

The bank and its lawyers deny any wrongdoing, and claim to have “never been the target of any investigation for drug or money-laundering related activities.” But after years of denials by the bank and the Hanks, Assistant U.S. Attorney Hector Ramírez of Laredo recently confirmed in court documents that yes, there is an active criminal investigation of the Hanks underway in the U.S.

There are signs that Jacobs has begun to distance himself from his boss. Jacobs is asking lobbyist Ben Barnes to help — the same Ben Barnes who admitted he helped get George W. Bush into the Texas Air National Guard, handily avoiding a stint in Vietnam.

Jacobs, the National Journal reported in January, has hired Barnes to lobby for changes to Senator Levin’s intelligence authorization bill, especially to the parts regarding property seized in drug investigations. Although both Jacobs and Barnes maintain Hank Rhon is innocent, the changes Jacobs seeks would protect LNB’s minority shareholders from losing any assets, just in case Carlos Hank Rhon happens to be involved in drug trafficking.

For Jacobs, this a radical departure from his usual staunch defense of Carlos Hank, and is perhaps a warning of a shift in the way the river flows.

It’s a February afternoon at the Laredo Country Club. The colors inside, on the walls and on the people, are cool vanilla and light lemon, soft and breezy as chiffon.

The Laredo National Bank is sponsoring the “Mr. South Texas” award, an annual luncheon honoring prominent movers and shakers in the Rio Grande valley. Governor George W. Bush and former Commerce Secretary Robert Mosbacher were once Mr. South Texas. So were Bush family friends Tom Frost, of Frost Bank, and Charles Butt, heir to the HEB food store chain. Amazingly, there have even been five female Mr. South Texases.

Guests are paying a hundred dollars a plate to honor this year’s awardee. Gary Jacobs proudly welcomes Laredo U.S. District Judge George P. Kazen, man of the hour, a hard-working man with a brilliant mind who, Judge Carolyn Dineen King tells the crowd, breezed through his bar exam. Judge Kazen jokes and thanks everyone, including his son who works for Laredo National Bank. Last winter, Judge Kazen removed himself from presiding over the lawsuit involving Laredo National Bank and Christopher Whalen, presumably because of his son’s involvement with LNB.

Except for the extremely tight security, there is no hint in the air that anything is wrong with the world. One cannot imagine, not here, that a bank could have anything to do with drugs, or the Juárez cartel, or the bodies, or Raúl Salinas and his laundered millions. One cannot imagine.

His smiling, relaxed demeanor at the luncheon is in sharp contrast to the face Gary Jacobs will show in court, where in a few days he will fight Whalen, and where in a few months he will fight the Federal Reserve Board as it tries to take away Hank Rhon’s right to be a banker in the United States. There Jacobs will also have to defend his boss against the formidable power of Citibank, that former friend who Hank Rhon’s lawyers say has turned on them to save its neck in the Salinas case.

Far from the air-conditioned country club, out on the southbound side of Interstate 35, Hinojosa and the other inspectors stand in the white-hot sun, hoping that the next guy they pull over isn’t angry and packing a weapon. They’re hoping for the canopy they’ve been promised before summer, when temperatures can reach a hundred and ten. They hope a city contract goes through so they can lease an area where cars can pull over safely.

“We definitely need more resources southbound to be able to address seven-days-a-week, twenty-four-hours-a-day inspections,” says Garza.

“It’s very hard and frustrating.… You have about twenty-two seconds to make up your mind what you’re going to do with this vehicle, because the line is backed up.

“On the southbound side, once you release that vehicle, it’s gone. It’s going to Mexico.”

Hernández sizes up the difficulty of the job as he lets another driver go by. His seems a gargantuan task, here where this army of vehicles carries all the burgeoning pressure and promise of free trade. The army is immense, it wants to push forward, to keep moving and never stop.



© 2000 El Andar Magazine