SUIT FILED OVER LEAK OF REPORT ON MEXICAN

DALLAS, Aug. 15 -- A college professor in Ohio has drawn the unwelcome
attention of one of Mexico's most powerful families.

Lawyers for a bank controlled by the family of a Mexican billionaire,
Carlos Hank Gonzalez -- a former mayor of Mexico City -- say that
Donald E. Schulz leaked a secret Justice Department document last year
that described the Hank family as a "significant criminal threat" and
linked it to large-scale drug trafficking and money laundering.

A lawsuit, filed late today in federal court in Cleveland, alleges
that Mr. Schulz, who is now chairman of the political science
department at Cleveland State University, leaked copies of the report
to newspapers last year.

The plaintiffs in that suit are Laredo National Bancshares Inc. of
Laredo, Texas, and the bank's president and chief executive officer,
Gary G. Jacobs. The bank's chairman and controlling shareholder is
Carlos Hank Rhon, the eldest son of Carlos Hank Gonzalez. He is not a
plaintiff in the suit, however.

The suit, which asks for unspecified damages, is an early salvo in
what is expected to be a long and coordinated counterattack by the
Hank family, one of the wealthiest and most politically influential
clans in Mexico, against allegations that it is involved in the
illegal drug trade. The family also faces scrutiny by regulators at
the Federal Reserve, who are examining Carlos Hank Rhon's ownership of
the Laredo bank.

The report, which was produced by the National Drug Intelligence
Center, an agency within the Justice Department, was cited last year
in articles in newspapers including The Washington Post and The Dallas
Morning News at a time when Congress was debating the Foreign
Narcotics Kingpin Designation Act. The law, which Congress later
passed, gives the government the power to freeze bank accounts and
other assets of persons it labels significant drug
traffickers.

The report alleged the Hank family was involved in money laundering
and drug trafficking, and implied that it was protected because of its
strong ties to the Institutional Revolutionary Party, according to the
news reports. Known as PRI, the political machine dominated Mexican
politics until this year, when the National Action Party's candidate,
Vicente Fox, defeated the PRI's candidate in the presidential election.

After the report was disclosed, the Hank family mobilized to rebut the
allegations, hiring high-profile lawyers including Warren Rudman, the
former New Hampshire senator. Earlier this year, Attorney General
Janet Reno disavowed the report after Mr. Rudman wrote to her to
complain about its dissemination.

Ms. Reno, in a letter to Mr. Rudman, said that the subject matter in
the report was beyond the "substantive expertise" of the authors, that
the report's characterizations were not adopted as government policy
and that the document had never received proper vetting from
government officials.

In the lawsuit filed in Cleveland, lawyers for the bank and Mr. Jacobs
allege that an official of the National Drug Intelligence Center gave
a copy of the report to Mr. Schulz, who was then a professor at the
United States Army War College in Carlisle, Pa., and that Mr. Schulz
then leaked the document to reporters. The lawsuit also said that Mr.
Schulz has denied to government investigators that he leaked the
document. Telephone calls to Mr. Schulz's residence in Cleveland were
not returned.

Mr. Jacobs, in an interview, said he was upset by any allegations of
wrongdoing.

"What I am outraged about is that I have always been an honest,
law-abiding and compliant banker," he said. "I believe my
constitutional rights have been violated. They are doing it with
reckless abandon and they should be held accountable for their actions."