Mexico, Still Upset, Now Says It Knew of ‘Sting’ Plan

After two weeks of tirades against American officials for failing to inform Mexico of a money-laundering “sting” operation, authorities here have acknowledged that U.S. agents did tell them of the investigation two years ago--and even asked for support.

But the attorney general’s office declared that the meeting with U.S. agents in January 1996 did not amount to approval for the Americans to stage undercover operations in Mexico. Nor, the office said in a statement late Wednesday night, did the Americans provide details or request specific action from their Mexican counterparts for Operation Casablanca.

The disclosure that the U.S. had, indeed, notified Mexico of the sting did not appear to dampen public demands for prosecution and even extradition for trial here of U.S. agents involved in the operation.

However, senior Mexican officials sought to reduce the confrontational tone on this topic before Monday’s top-level United Nations drug conference in New York, to be attended by presidents Clinton and Ernesto Zedillo.

“What we want to do,” a Zedillo spokesman said, “is avoid having one issue of our relations contaminate the others. While the Casablanca issue has been damaging in our efforts to cooperate in the drug-trafficking area, and we have to address the concerns we have, there are other things on the U.S.-Mexico agenda. . . . This is a good relationship.”

It seemed possible that word of the U.S. probe got lost in the Mexican bureaucracy after the former attorney general was unceremoniously fired in early 1997.

U.S. agents, called in on Wednesday to explain the matter, reminded Mexican prosecutors of the earlier meeting.

Operation Casablanca, a U.S. money-laundering investigation described as the biggest in American history with more than 150 arrests and the seizure of more than $50 million, had been overshadowed in Mexico by the fury over the alleged violation of this nation’s sovereignty by U.S. undercover agents.

Historian Lorenzo Meyer said the sting seemed to be designed to smear Mexican banks, while leaving unscathed U.S. financial institutions involved in possible money laundering.

Of the 1996 U.S. notification, he asserted: “It’s a trick, a very clever way of claiming it was not a secret investigation when in fact it was secret--’We are going to give you a hint, and when it becomes public we can say but we told you.’ ”

Mexican government and banking industry officials were angered to learn on May 18 that U.S. Atty. Gen. Janet Reno and Treasury Secretary Robert E. Rubin had announced the operation at a news conference in Washington. The Mexicans had no warning of indictments, issued in Los Angeles, charging 26 Mexican bankers and three Mexican banks with money laundering.

Zedillo then called on American officials to explain on what basis U.S. agents had carried out certain parts of their work in Mexico; Clinton issued a mild apology.

Reno, who on Thursday called any talk of Mexican legal action against U.S. agents “premature,” said the operation had been kept on a need-to-know basis for security reasons.

Mexican Foreign Minister Rosario Green on Tuesday handed Secretary of State Madeleine Albright a document conveying Mexico’s allegations of wrongdoing by agents involved. Mexico also demanded that U.S. Customs and Drug Enforcement Administration agents come and explain their actions.

U.S. officials did so Wednesday, recalling that two colleagues from the Justice and Treasury departments had met Jan. 16, 1996, with Deputy Atty. Gen. Rafael Estrada, who headed his office’s international affairs, to explain parts of the money-laundering probe. They said Estrada told Atty. Gen. Antonio Lozano Gracia of the meeting; the attorney general in Baja California was also advised of the probe.

But Mexico’s statement added that, even if the discussion with Estrada had occurred, “this in no way can be considered authorization or approval for informants or undercover witnesses in the service of the United States, or even undercover agents of the U.S. government, to realize actions on our national soil.”

The office asserted that in January 1996 such undercover actions were not yet legal because a law against organized crime, which permits such investigations, had not yet been enacted.