U.S. SEES THREAT FROM CRIMINAL ENTERPRISES OF MEXICAN FAMILY

One of Mexico's wealthiest and most politically powerful families is so
involved in drug trafficking and money laundering that the father and two
sons "pose a significant criminal threat to the United States," according to
a recent report by the U.S. government's main drug intelligence task force.

While U.S. law enforcement officials have spent years investigating the Hank
family -- especially Carlos Hank Gonzalez and his sons Carlos Hank Rhon and
Jorge Hank Rhon -- the assessment by several agencies marks the first time
the family has been linked directly to the operations of major Mexican drug
organizations.

The report was written by the National Drug Intelligence Center, which
coordinates investigations by different agencies. It accuses the Hank family
of using its businesses to move cocaine to the United States and launder
millions of dollars in drug money. The family enjoys impunity in Mexico
because of its high-level political connections, the report says.

The Hank family, often described as Mexico's Rockefellers, is known for its
multi-billion-dollar transportation, construction and financial empire and
its great influence within the Institutional Revolutionary Party (PRI),
which has ruled Mexico for seven decades.

Hank Gonzalez, the patriarch, rose from poverty to become a billionaire,
although he never held a job that paid more than $80,000 a year. He was
mayor of Mexico City, held two cabinet positions in the government of former
resident Carlos Salinas de Gortari and used his position as minister of
agriculture to mobilize electoral support for Salinas's successor,
President Ernesto Zedillo.

Spokesmen for the Hank family denied the assertions in the report, and
Mexican officials said the allegations were politically motivated and
designed to embarrass the Zedillo government.

A senior Clinton administration official acknowledged the authenticity of
the report. "Allegations that significant sums of foreign drug money are
being invested in the United States are extremely serious," the official said.

The report said the Hank family "has begun to extend its interests from
Mexico to the United States. [It] has purchased or exercises control over
several U.S. banks, investment firms, transportation companies and real
estate properties." The report mentioned, for example, that Carlos Hank Rhon
purchased shares of Laredo National
Bankshares, the holding company of two Texas banks, through two of his own
holding companies. It also gave examples of the family's efforts to gain
influence over U.S. gambling businesses.

The report drew on information from the Drug Enforcement Administration,
FBI, U.S. Customs Service, CIA, Interpol and other agencies. It says
intelligence agencies had "intercepted conversations of the Hank family
coordinating drug shipments" at TMM -- a giant Hank-owned shipping company
- -- and personally meeting with drug
kingpins. Stamped "Law Enforcement Sensitive," the internal document was
first described Monday in the Mexican newspaper El Financiero, and The
Washington Post obtained a copy.

The investigation of the Hank family, known in Mexico as Grupo Hank, was
approved Dec. 9, 1997, and concluded earlier this year. "Several years of
investigative information strongly support the conclusion that the Hank
family has laundered money on a massive scale, assisted drug-trafficking
organizations in transporting drug shipments and engaged in large-scale
public corruption," the document says.

"Grupo Hank poses a significant criminal threat to the United States," the
report continues. "Its multibillion-dollar criminal and business empire,
developed over several decades, reaches throughout Mexico and
into the United States."

Carlos Arguelles, a spokesman for Hank Gonzalez, said the accusations are
"completely false, and everyone in Mexico knows they are false . . . [Hank
Gonzalez] travels to the United States frequently, and I don't understand
what is motivating these charges."

Hank Gonzalez's son, Carlos, was a close associate of Raul Salinas, brother
of the former president and a convicted murderer who also has been linked to
drug trafficking. "An analysis of case information shows that [Carlos]
Hank-Rhon continues to launder money and was closely associated with the
late [Juarez cocaine cartel leader] Amado Carrillo Fuentes," the report says.

Robert Siegfried, a New York-based spokesman for Carlos Hank Rhon, called
the report "nothing more than recycled misinformation. . . . Any allegation
or assertion that Carlos Hank-Rhon or any of the businesses in which he has
an interest have been or are involved in illicit activities are and have
been proven to be unequivocally false."

The report was hardest on Jorge Hank Rhon, the younger son. He lives in
Tijuana, owns its largest racetrack and "is reportedly a close associate of
leaders of the Tijuana-based Arellano-Felix drug trafficking organization,"
the report says.

"Case information indicates that Jorge Hank-Rhon launders money, distributes
cocaine and meets with prominent drug traffickers through his businesses,"
the report said. "Jorge is more openly criminal than either his father or
his brother and is regarded as ruthless, dangerous and prone to violence."