DRUG-CORRUPTION ALLEGATIONS STRAIN U.S. - MEXICO MEETINGS

PRI Officials Deride Leaked D.C. Reports As Smear Campaign

MEXICO CITY -- Insinuations that drug corruption has reached into the
offices of Mexican President Ernesto Zedillo Ponce de Leon all but drowned
out Friday's public claims of friendship between high-ranking officials from
the United States and Mexico, overshadowing new cooperative agreements on
issues from drugs to trade.

U.S. Attorney General Janet Reno, a last-minute substitute for U.S.
Secretary of State Madeleine Albright because of the Kosovo peace deal, and
Mexican Foreign Minister Rosario Green spoke Friday of cross-border
friendship and cooperation during the 16th annual Binational Commission.

Washington reports

Behind the tranquil scene of the annual day of private talks between White
House policy-makers and their Mexican counterparts, U.S. officials scrambled
to put out a fire started by two Washington reports linking drug traffickers
to two ranking members of Mexico's ruling Institutional Revolutionary Party
(PRI).

Angry Mexicans vented frustration over what officials here say are attempts
by enemies in Washington to discredit Mexico during the high-level meetings.

One report, based on Mexican and U.S. investigations into alleged drug-money
laundering, said U.S. officials are worried because Mexico dropped an
examination of an informant's claims that Zedillo's personal secretary,
Liebano Saenz, had won payment from drug cartels to protect their business.

The other report, by the U.S. government's National Drug Intelligence
Center, outlined links between drug cartels and Carlos Hank Gonzalez -- a
former Mexico City mayor, influential PRI leader and patriarch of one of the
country's richest families.

Green asked U.S. officials to hand over any evidence of Mexican government
corruption and to punish officials who leaked draft reports.

"If there is no direct information," Green said, "please publicly denounce
the information."

The Mexicans' ire had U.S. officials backpedaling.

"I don't have any evidence about Mr. Saenz that would lead me to go to
Rosario Green and say, `We've got a problem with this guy,'" said U.S. drug
czar Barry McCaffrey, who said he had not read the leaked report on Hank
González. "(And) I object to being put in a position of endorsing or
clearing foreign officials."

U.S. Drug Enforcement Administration sources who didn't want to be
identified expressed doubt Friday that Hank Gonzalez was involved with drug
dealers.

The report also alleged that Hank Gonzalez's sons were linked to
money-laundering schemes in Texas and to helping the powerful Arellano-Felix
drug cartel of Tijuana.

In an interview, McCaffrey said the leaks were unprofessional and curiously
timed to the start of the binational conference.

"There's a little bit of gamesmanship going on here," McCaffrey said,
echoing charges by Mexican officials that they were victims of a smear
campaign by "right wing" forces in Washington.

"It is bad to be accusing people without evidence of something so grave,"
said PRI Chairman Jose Antonio González Fernandez."Everything listed in the
(Hank González and Sáenz) reports is circumstantial, yet the charges damage
relations and damage families."

Moving on

Despite the strained reaction, Mexican and U.S. officials said the furor
wouldn't interfere with agreements concluded Friday or with plans for
cooperation in the drug war.

"I don't think we ought to be ever remiss about confronting each other with
hard-edge realities," McCaffrey said, saying the two governments had
survived many such controversies. "We'll do it in private, not in public."

Friday's closed-door sessions between Mexican and U.S. secretaries of
commerce, transportation, urban development and the environment yielded
cooperative plans on forest-fire suppression in border states,
hazardous-waste fills and health studies of border residents.

The two countries will also switch on a fiber-optic cable line along the San
Diego-Tijuana border to facilitate law enforcement communications among
several agencies.