Citibank Secretly Helped Raul Salinas, Report Says

Citibank helped the brother of a former Mexican president secretly funnel as much as $100 million in alleged drug money out of Mexico and into Swiss bank accounts, according to a congressional report released Friday.

The General Accounting Office, the investigative arm of Congress, concluded that the second-largest U.S. bank ignored its own safeguards against money laundering and failed to verify the source of Raul Salinas’ money.

The GAO said Citibank set up a shell investment company in the Cayman Islands and accounts in London and Switzerland that helped Salinas quietly transfer $90 million to $100 million between 1992 and 1994.

Swiss authorities in October confiscated $114 million that Salinas had stashed in Swiss accounts, saying the funds were protection money paid by Colombian and Mexican drug barons.

Congressional investigators found that Citibank did not run a financial background check on Salinas and allowed his wife to use another name when she wired funds from Mexico City to New York.

Only after Salinas was arrested and jailed in Mexico on murder charges in 1995 did Citibank do a brief financial profile on him, but failed to mention the Cayman Islands shell corporation and gave no source for his wealth other than an unnamed construction business, the GAO said.

Raul Salinas is the older brother of Carlos Salinas de Gortari, who was president of Mexico from 1988 to 1994 but now lives disgraced in self-imposed exile in Ireland. Raul Salinas is still in jail on charges of masterminding the 1994 murder of a top ruling-party official.

Citibank said the GAO investigation did not conclude that the bank had broken any laws. It said the report contained “errors of fact and interpretation,” but declined to specify because of an ongoing investigation in the United States.