UNPROVEN DRUG ALLEGATIONS REND US RELATIONS WITH MEXICO CITY

Attorney General Janet Reno said unfounded reports of drug trafficking by
high Mexican officials were unfair.

MEXICO CITY -- A top-level meeting of Cabinet ministers that ended here
Friday was originally intended to be a showcase of chummy U.S.-Mexican
relations. But it illustrated instead how the two countries can't seem to
get past the divisive issue of drugs.

The day before several U.S. Cabinet members and their aides flew in for the
meeting, The Washington Post and The New York Times ran separate front-page
articles that accused one of Mexico's richest families and the private
secretary to President Ernesto Zedillo of having suspected links to the
country's drug cartels. Both stories cited unnamed U.S. government officials
as their sources.

The articles provoked a swift reaction here. Furious, Mexican Secretary of
State Rosario Green told reporters that the stories were shadowy efforts to
throw the meeting off balance. She demanded that the Clinton administration
hand over any proof to support the charges.

The incident once again illustrated how efforts to improve the United
States' relationship with Mexico, its second-largest trading partner, has
been consistently frustrated by suspicions in Washington of drug corruption
in Mexico City.

"Drugs obscure everything," said Delal Baer, an expert in U.S.-Mexican
relations at the Center for Strategic and International Studies in
Washington.

"Can we work the positive elements of the agenda without becoming obsessed
with the problems? It doesn't seem like we can," he said.

The annual get-together of high-level Mexican and American officials, called
the Bi-National Commission, was created several years ago as a
confidence-building measure for officials of both countries and as a way to
deal with increasingly complex issues facing both countries. This year's
meeting took up items ranging from trade to immigration. In all, more than
600 officials participated, and the meeting was divided into 16 working
groups.

Although Secretary of State Madeleine Albright remained in Washington
because of developments in Yugoslavia, Attorney General Janet Reno, White
House drug czar Barry McCaffrey, and the secretaries of interior,
transportation, commerce and housing and urban development attended the
meeting.

Key issues like immigration and health seemed to slip behind the shadow
created by drugs.

Green's angry press conference on Thursday displayed a frustration over what
many Mexicans see as a consistent tactic: Before major meetings between U.S.
and Mexican officials, stories appear in the American press that suggest
drug corruption at the highest levels of Mexico's government and society.

"It must be a strategy. It's a way of saying, `We're really concerned about
these issues and want to bring them to the table,' " said Sigrid Arzt, a
political scientist in Mexico City.

"These are sensitive issues to bring up directly," she said, "but by the
time the meetings begin, all the Mexican officials have been alerted to them
through leaks in the press."

The question of exactly who is behind the strategy is less clear, Artz and
others here say.

Green put it off to "conservative" elements on the U.S.-side of the drug
debate. Some analysts say the leaks may be coming from American law
enforcement agencies.

But others say the Clinton administration is split between doves, who see
cooperation with Mexico as the key to improved drug-fighting, and hawks, who
believe Mexico ought to be taken to task for the impunity enjoyed by the
drug gangsters who ship 70 percent of cocaine consumed in the United States.

"This is really about a power struggle taking place inside the Beltway,"
Baer said.

That division is fracturing U.S. policy towards Mexico and becoming an
increasing embarrassment for the White House.

The Washington Post article cited a National Drug Intelligence Center report
that concluded the family of Mexican billionaire Carlos Hank Gonzalez -- a
major financier of Mexico's long-ruling party, known as the PRI -- was so
involved in money laundering and the distribution of drugs that its
political and financial empire amounted to "a significant criminal threat to
the United States."

The New York Times reported that Zedillo's private secretary and de facto
chief of staff, Jose Liebano Saenz, had been investigated on allegations of
drug corruption.

After his arrival here, McCaffrey, the U.S. drug czar, distanced himself
from the media reports, telling reporters that he did not have any
information on either the Hank Gonzalez family or Saenz that was worth
taking to Mexican authorities.

McCaffrey directed his ire toward the media.

"If this was classified information around national security, we'd be out
there polygraphing people and we'd prosecute," McCaffrey said, "because it
would be jeopardizing U.S. national interest."

Still, the New York Times report struck many here as especially unfair.

Mexico's attorney general's office said it has already thoroughly
investigated Saenz at his own insistence and cleared him.

Mexican investigators said many informants who accused him of having links
with the country's drug cartels turned out to be unreliable and that at
least one failed a lie-detector test.

For her part, Reno told reporters Friday, "I cannot conclude, based on
information I have, that (Saenz) is guilty of any wrongdoing,"

She added, "It's unfair and just plain wrong ... to make judgments based on
fragmentary reports."

The two press reports, analysts say, point to an underlying problem with the
drug-corruption allegations that Clinton administration officials have
leveled against high-level Mexicans in recent years.

Intelligence information from wiretaps and unnamed informants used in the
allegations does not have to meet the same high standard of proof as
evidence in a court of law, they say.

They add that since the U.S. officials leak the allegations without allowing
the media to identify them, the Clinton administration is losing credibility
here.

"This just does not push the ball down the court in U.S.-Mexican relations,"
Baer said.