MORALES SILENT ON SANCHEZ DURING MONEY-LAUNDERING TESTIMONY

Former state Attorney General Dan Morales testified about drug cartels and
money laundering before Gov. Rick Perry's Anti-Crime Commission today, but
he declined to repeat the campaign charges he leveled against Tony Sanchez
in the Democratic gubernatorial primary last spring regarding similar
issues.

"My role as a participant in this commission is strictly policy oriented,
and I'm going to adhere to that," Morales said, adding that he had been
asked by the commission to avoid partisanship and politics.

Morales told the commission that the state's money-laundering statutes have
not been revised since he first wrote them in 1991.

According to Morales, drug cartels target financial institutions along the
Texas border in order to transfer profits from drug sales and funnel the
money into legitimate businesses. He said money laundering is a primary way
for drug dealers to evade justice.

Morales, who said "about half of all cocaine and marijuana comes into the
United States across the Texas-Mexico border," supported an updating of
Texas' money-laundering laws and cited federal estimates that indicate drug
dealers launder about $50 billion in U.S. banks nationally, including $30
billion in the Lone Star State.

During the heated gubernatorial primary in February, Morales charged that
Sanchez should have known that Mexican drug cartels were using Tesoro
Savings and Loan, which is owned by the Sanchez family, to launder $25
million dollars.

Morales did not mention Sanchez today and declined to repeat those charges.
However, he noted that financial institutions were "the biggest political
hurdle" he faced in trying to pass Texas' money-laundering laws.

Bexar County District Attorney Susan Reed, who co-chairs the crime
commission with former Supreme Court Justice John Hill, said money
launderers are particularly difficult for prosecutors to convict because
most law enforcement organizations do not have the high-tech capabilities
they need to monitor the multiple banking transfers that are frequently
involved in money-laundering schemes.

"It is a lot different from finding drugs on the street," Reed said.

Today's session at the University of Texas at San Antonio's Downtown Campus,
is designed to identify loopholes in Texas money laundering laws.