U.S. Eyeing Bank Ties to Salinas Kin

The Justice Department said Wednesday that it is conducting a criminal investigation to determine whether U.S. laws were violated when an American bank helped transfer millions of dollars to accounts in Switzerland for Raul Salinas de Gortari, the oldest brother of Mexico’s former president.

Citibank, which has its headquarters in New York, took part in the 1993 transfers of funds from Mexico City to New York to Swiss accounts on behalf of Salinas, a Citibank client, according to government and nongovernmental sources. The bank could have broken U.S. laws if the funds came from illicit sources and the bank knew it, according to a government source who declined to be identified.

Carl Stern, the Justice Department’s chief spokesman, confirmed that the investigation began about two months ago, after it became apparent that Swiss and Mexican investigators were barred by laws in their countries from sharing all of their information with U.S. authorities.

Salinas, now in prison in Mexico, has been charged with having “unexplained wealth,” which Stern noted is “not a violation under U.S. law. We have to show money came from illegal sources to bring a money-laundering case.”

The Justice Department said last year that it was assisting Mexican and Swiss authorities in their investigations of the transfers. A source familiar with the U.S. inquiry said initial suspicions that the funds may have come from narcotics traffickers--and thus reflect “narco-corruption”--have not been established as fact.

*

Another theory being pursued by investigators is that the money came from individuals and businesses eager to involve Mexico’s former first family in business deals.

Richard Howe, designated by Citibank to handle inquiries about the Salinas matter, did not return a reporter’s call Wednesday. But he told the New York Times, which reported the U.S. criminal investigation Wednesday, that the bank’s own inquiry into the Salinas matter had found “no evidence of violation of the laws by the bank or any of its employees.”

A Justice Department source said the bank is cooperating in the investigation.

According to the New York Times, Salinas told Swiss investigators in December that in 1989, he opened bank accounts overseas using false names to “avoid political scandal” shortly after his brother Carlos became Mexico’s president.

But in 1993, Citibank “came up with a whole strategy” under which he did not need aliases, Raul Salinas told the Swiss. Instead, funds were transferred to European banks and deposited under the names of Cayman Islands shell corporations that were established for Salinas with Citibank’s assistance, according to Salinas’ statement.

Stern said the Justice Department could not get a transcript from the Swiss of their interrogation of Salinas.