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Trail of Cash and Land Leads to Raul Salinas

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TIMES STAFF WRITERS

On a government salary that peaked at $70,000 a year, Raul Salinas de Gortari moved millions of dollars through more than 40 bank accounts in Mexico City, federal auditors here say. They also say he purchased six houses, 13 condominiums and 20 parcels of land throughout the country and opened a series of bank accounts under false names in Switzerland and elsewhere in Europe during his decade in public office.

Mexican, U.S. and Swiss investigators suspect that the elder brother of former President Carlos Salinas de Gortari used those accounts to hide and launder up to $250 million in corruption money and profits for Mexico’s powerful drug cartels.

These are among the preliminary disclosures of Mexican, Swiss and American authorities who have been probing the finances of Raul Salinas, an appointed official before and during his brother’s presidency. U.S. and Mexican investigators have confirmed that the former president is also under investigation for possibly harboring or participating in corruption during a six-year term when U.S. officials portrayed him as the epitome of reform.

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The investigations began soon after Raul Salinas was arrested Feb. 28 and charged with masterminding last year’s murder of Mexico’s second-ranking ruling-party official. He also faces charges of falsifying official documents.

The probes were first made public last week after Swiss authorities revealed they had arrested Raul Salinas’ wife, Paulina Castanon, and her brother Antonio as she tried to withdraw more than $83 million from some of those accounts in Geneva. Swiss and U.S. authorities say those arrests were part of a wide-ranging global investigation into drug trafficking and money laundering by Mexican nationals.

Raul Salinas, who has been in jail since his arrest, has asserted through his lawyers that he can explain the origins of the money, which he says are legitimate. Carlos Salinas, who is living in self-imposed exile, issued a brief statement last weekend denying any knowledge of the accounts and declaring that his elder brother should be prosecuted to the full extent of the law if found guilty of wrongdoing.

U.S. and Mexican officials investigating the case told The Times that they are still tracking additional bank accounts in Europe and elsewhere that they suspect are linked to official corruption in Mexico and to the drug mafias that U.S. officials say supply up to three-fourths of the cocaine sold in America.

The FBI believes that Raul Salinas may have stashed more than $100 million overseas, said a high-ranking U.S. Justice Department official. One Mexican official estimated the potential total at more than $250 million.

Officials on both sides of the border said the arrests in Switzerland and the size of the bank accounts intensified their investigations into allegations that Raul Salinas was an intermediary between drug cartels and Mexico’s political and economic elite before and during the years he served in his brother’s government.

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“The recent events taking place with the Swiss bank accounts have sparked renewed interest in looking at all possible links to drug cartels, including other members of the Salinas family,” a senior U.S. anti-narcotics official said.

The power of Mexican drug lords expanded during Salinas’ term, from 1988 to 1994, making them partners with the Colombians who once dominated the international cocaine market. And last week’s disclosures of the vast sums and high levels of government allegedly involved help explain concerns in the administration of current President Ernesto Zedillo that the drug cartels have so much influence that they are now a serious threat to Mexico governability.

The revelation of the Swiss bank accounts also unleashed a torrent of popular and political outrage in Mexico this week--even from the nation’s long-ruling Institutional Revolutionary Party, or PRI, which still lists Raul and Carlos Salinas as members.

A Mexican congressional commission will reportedly be named this week to publicly investigate Raul Salinas’ wealth, in accordance with an unprecedented, unanimous vote by Mexico’s opposition and ruling parties in the federal House of Deputies. So “profound” was the “indignation” within the PRI, as one party legislator put it, that 81 ruling-party deputies signed a letter calling for their central committee to consider expelling Raul and Carlos Salinas from the party that has ruled Mexico for 66 years.

At the same time, the scandal rekindled support for Zedillo’s plan to eliminate the presidential accounting office responsible for policing all federal corruption. The president introduced a bill in Congress on Wednesday that would replace that office with an independent congressional body.

Documents obtained by The Times show that Raul Salinas used intricate accounting and reporting methods to move millions of dollars through accounts in his name and in fake names during the decade he served in public office, among them large “loans” he made to himself through aliases. But investigators suspect that he also operated with near-impunity because he enjoyed the protection not only of his brother’s office but of Mexico’s most alleged powerful drug lord at the time, Juan Garcia Abrego, who they suspect won Salinas’ protection from prosecution.

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Mexican officials are taking the lead in the investigation of Raul Salinas, U.S. officials stressed. But the FBI, the Drug Enforcement Administration and other U.S. agencies have been investigating how political protection aided the multibillion-dollar cross-border operations of Mexican drug lords.

Targets of that probe include Garcia Abrego, the purported boss of the so-called Gulf cartel--who continues to elude capture nine months after he was put on the FBI’s most-wanted list--and officials say they now are investigating whether Garcia Abrego’s protection reached as high as the office of President Salinas.

“There’s a feeling that [Garcia] Abrego was sitting safe, tidy and untouched because of payoffs that reached all the way up the line to the president’s office and his family,” the U.S. Justice Department official said. “Right now they are trying to find out where the money came from, whether Raul took it from the coffers of Mexico or took it from [Garcia] Abrego.”

Law enforcement officials report that Raul Salinas and Garcia Abrego were seen together several times in past years at airports, restaurants and even a party in Monterrey. And The Times reported earlier this year that a former commander of Mexico’s anti-drug police squads told investigators that the ties between the two men were known to Mexican law enforcement while Carlos Salinas was president.

Prosecutors who have been presenting evidence against Raul Salinas in last year’s slaying of Francisco Ruiz Massieu, who was secretary general of the PRI, have yet to build a strong case--or to establish a motive for the killing. Officials believe one factor may have been a conflict between Ruiz Massieu and Raul Salinas over a huge Acapulco real estate development.

Mexican government auditors have said they are investigating whether Raul Salinas was involved in embezzlement and influence-peddling while he held government posts, including the directorship of a national food distribution program for the poor. But some of his money may have come from legitimate sources; Raul Salinas reported in confidential government disclosure forms in 1992 that he was earning about $120,000 a year from various outside sources in addition to his government salary.

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Authorities cautioned that determining conclusively whether the millions in the Swiss accounts originated from specific crimes--drug activity, graft or other offenses--will require painstaking examination of money trails and bank accounts.

“We need to be circumspect,” a DEA official said. “Not all of this may be drug money. There may be political money, kickbacks and bribes. What percentage is drugs, what percentage is other, we may never know. It’s going to be tough.”

Officials said Raul Salinas apparently used banks in Mexico as a conduit to European accounts that he believed were untraceable.

Fineman reported from Mexico City, Rotella from San Diego and Tijuana.

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