MEXICO FURIOUS OVER REPORT LINKING OFFICIAL TO DRUG CASH

WASHINGTON -- The Mexican Embassy has formally asked the Clinton
administration to respond to charges by a former U.S. Customs official
that his undercover investigation into Mexican drug trafficking was
shut down after the name of Mexico's defense minister surfaced in it.

The New York Times reported Tuesday that the administration ended the
investigation several weeks after undercover Customs agents were told
by bankers working with Mexico's most powerful cocaine cartel that
Gen. Enrique Cervantes was a client who wanted money laundered.

The Customs agents were mystified by the decision to end the
investigation on schedule rather than extend it to explore information
involving Cervantes, particularly in view of intelligence reports
"pointing to corruption at the highest levels of the Mexican
military," the Times said.

In a formal letter Tuesday to the State Department, the Mexican
government denounced "unsubstantiated allegations" against Cervantes
and said the Times article "gives prominence to misleading, biased and
slanderous information against Mexican officials."

Meanwhile, Assistant U.S. Atty. Duane R. Lyons in Los Angeles, who is
one of the federal prosecutors involved in "Operation Casablanca,"
took exception to the comments in the Times article of William Gately,
identified by the Times as a former senior Customs agent, now retired.

"Gately believes our defendants were talking about a high-ranking
Mexican official, but I do not share Mr. Gately's sentiment about
Cervantes being involved," Lyons said Tuesday.

New York Times Foreign Editor Andrew Rosenthal said Gately was not the
single source of the allegations.