Reno Contradicts U.S Drug Report
Insight on the News, July 3, 2000 by Jane
U.S. drug warriors say
Justice has undermined a key drug probe and fear that the
department will prove weak in enforcing a new law aimed at
The wording could not have been more direct and yet within
weeks of the highly classified National Drug Intelligence
Center, or NDIC, report being leaked to the media -- first to
Insight in March 1999 and then later to the Washington Post --
the allegations it contained against Mexico's powerful Hank
family were being "discredited" by Attorney General Janet
Despite detailed allegations contained in the report, Reno
dismissed it, writing in a March letter: "The analysis and any
conclusions and inferences contained in the report have not
been adopted as official views and positions of the NDIC, the
Department of Justice, or the various federal, state and local
law-enforcement and regulatory authorities that may have
provided information to the drafters of the report."
The Hank family greeted Reno's statement as amounting to
having been given a clean bill of health. For a year the
family has been fighting the NDIC claim that they pose a
"significant criminal threat to the United States."
For years lawmen on both sides of the U.S.-Mexico border
frequently had been confronted with information suggesting
that billionaire Mexican power broker Carlos Hank Gonzalez and
his two sons were using their political and financial muscle
to protect Mexico's major narcotraffickers, including the
Arellano-Felix brothers in Tijuana as well as the Juarez drug
cartel. But dozens of probes launched by U.S. and Mexican
law-enforcement authorities, including one mounted in 1996 by
Mexican Attorney General Jorge Madrazo, went nowhere. They
were doomed from the start say investigators, who claim they
were unable to cut through webs of intrigue and patronage
surrounding the family.
But there was cautious optimism among agents from the Drug
Enforcement Administration, or DEA, and the U.S. Customs
Service when "Operation White Tiger" was launched in 1997 amid
much secrecy. Their mission: to pull together as much data as
they could on the Hank family and to expose a key relationship
underpinning Mexico's narcotrafficking -- the alleged
association between the country's drug barons and top Mexican
politicians, including former Mexican Cabinet minister Hank
and his sons, Carlos Hank Rhon and Jorge Hank Rhon.
Leaks south of the border imperiled the chances of
Operation White Tiger being successful; so, too, did
nervousness in Washington among federal agency heads, who
learned in the 1990s to step gingerly with drug investigations
that could have a political impact on U.S.-Mexican relations
and might anger the White House.
And so frustrated agents released dozens of pages of their
intelligence analysis on the Hanks' businesses, sweetheart
deals, political strokes and alleged links with drug barons. A
year later law-enforcement frustration has grown, say U.S.
drug warriors, who declined to go on the record for this
They also question whether a new drug-kingpin law that obliges the
federal government annually to name the world's top suspected
narcotraffickers and to seize their assets in the United States, as well
as those of their business associates, will be as effective as it could
if the Justice Department is unprepared to put the war against drugs
ahead of politics.
For them, the Hank case and the demise of Operation White Tiger is
instructive when assessing the prospects of the Foreign Drug Kingpin
Designation Act, which was approved last year and requires the
administration to provide Congress with an annual list of the suspected
top foreign drug traffickers.
In early June, the Clinton administration sent Congress the first
annual blacklist under the act, naming a dozen suspected drug barons,
including six Mexicans: Ramon and Benjamin Arrellano-Felix, Jose de
Jesus, Luis Ignacio Amexcua-Contreras, Rafael Caro-Quintero and Vicente
Following the media revelations about Operation White Tiger, the Hank
family, which has denied it is linked to or protecting top Mexican
narcotraffickers, lobbied the Justice Department. With the assistance of
Republican former U.S. senator Warren Rudman, whom Carlos Hank Rhon
hired to represent his interests in Washington, Hank secured from Reno
the March letter contradicting the NDIC analysis.
"It was determined that the subject matter of the report was beyond
the substantive expertise and area of responsibility for the NDIC, and
the project was terminated," Reno wrote.
The attorney general's retraction of an intelligence analysis based
on dozens of past investigations on the Hank family and on new lines of
inquiry came as a bitter disappointment to members of the San
Diego-based Operation White Tiger Task Force.
The Hanks and their supporters insist that Reno's intervention was
just and that they have been victims of innuendo spread by their
political and business rivals.
From the get-go agents involved in the probe feared that Washington
would conclude that Operation White Tiger was too controversial and
potentially too disruptive to Mexican-American relations for it to
continue. They suspected it would go the way of previous investigations
of top Mexican politicians. In their minds was a series of probes
launched by individual DEA special agents in charge before the signing
of the controversial North American Free Trade Agreement. Those
investigations encountered strong Washington disapproval, say former
agents Phil Jordan and Hector Berrellez.
Far from lacking substance, agents involved in the inquiry say that
financial investigations and information supplied by confidential
sources established that Hank family "businesses, corporations and
entities, are linked to the major drug-trafficking organizations."
The task force scrutinized an array of business dealings as well as
every tie the Hanks ever had with convicted or suspected
narcotraffickers -- from friendships to joint ownership of businesses,
including the suspected drug-linked commercial airline Taesa and the
cargo-shipping firm Transportation Maritima Mexicana, or TMM.
According to Operation White Tiger documents, agents also explored
allegations made by confidential sources of Carlos Hank's laundering
money through two family-owned Texas banks -- the Laredo National Bank
and the South Texas National Bank of Laredo -- and allegations that
Jorge Hank Rhon is "providing the service of laundering narcotics
proceeds" via the family-owned Agua Caliente Racetrack in Tijuana and
off-track gaming interests on both sides of the Southwest border.
"Through Jorge Hank Rhon's gambling casino and satellite wagering
operations the AFO [Arellano Felix organization] is able to effectively
launder [sic] millions of cash dollars made from the narcotics trade,"
states one document.
The Hank family's response to the allegations against it was
immediate and furious and has been unrelenting. At least one major
Mexican daffy newspaper spiked a follow-up article written by its
Washington correspondent after the family intervened with the paper's
owner. Other publications were threatened with legal action, including a
small California-based Latino magazine, El Andar, which several months
after Insight's expose also secured copies of the NDIC report and
published a major article. An attorney acting for the Hank-owned Laredo
National Bank of Texas demanded a retraction, an apology and $10 million
for legal fees and expenses.
Even so, Rudman is adamant the report is "hogwash." Explaining that
Carlos Hank Rhon is a friend of his, the former senator, who is on the
President's Foreign Intelligence Advisory Board, says he was asked to
take a look at it to see what he thought. "I told them I thought it was
spurious. I did a lot of due diligence on it and I can tell you Carlos
Hank Rhon is not a drug smuggler." He added: "My representation was very
narrow, I looked at it, thought it was dubious and wrote to Reno asking
her what she thought. Three months later she released her letter
discrediting the report. I am pleased at what I did. You know the
sections dealing with the Texas banks, for example, were drawn from open
sources down in Mexico where a lot of people have an axe to grind. I
think this report was a misuse of the process."
Both in Mexico and the United States the Hank family has lobbied
hard, denying the allegations against them and claiming someone is out
to get them. Rudman told Copley News Service recently that he is
conducting his own investigation into the leak of the NDIC report, which
Justice Department officials claim was written by an NDIC official who
eventually was fired after it was disclosed to someone at the Army War
College and then leaked to the media. In fact, the analysis was based on
the work of many hands and several agencies. Asked by Insight whether
there were factual error in the analysis, Justice Department spokesman
Chris Whatney said: "The letter speaks for itself."
Now both the Hank family and the Mexican government are targeting the
new drug-kingpin law, coauthored by Democratic Sen. Dianne Feinstein of
California, arguing that the administration could declare erroneously
that certain individuals are doing business with drug cartels and freeze
their assets. Feinstein disputes this, explaining that a special
commission will monitor the law as it is enforced.
But some veteran U.S. drug warriors, dismayed by the whole Hank case,
say Justice has been hoodwinked and fear that it may prove timid when it
comes to enforcing the new law on foreign kingpins.
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