MEXICO SEEKS US RESPONSE TO PROBE

WASHINGTON (AP) The Mexican embassy has formally asked the Clinton
administration to respond to charges from a former U.S. customs
official that his undercover probe 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
probe several weeks after undercover Customs agents were told by
bankers working with Mexico's most powerful cocaine cartel that
General 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."

Through its embassy here, Mexico also questioned the credibility of
William F. Gately, identified by The Times as a former senior Customs
agent, now retired, who ran the undercover operation. The embassy said
the former Customs agent had been the subject of internal affairs
investigation by his superiors.

Meanwhile, Assistant U.S. Attorney Duane R. Lyons in Los Angeles, who
is one of the federal prosecutors involved in "Operation Casablanca,"
took exception to Gately's comments.

"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.

"The evidence I reviewed did not name any particular individual and it
can't be verified that it was Cervantes. They referred to an unnamed
general and it was unclear to me if they were aware who they were
talking about.

"I take (Gately) at his word that he believes what he was quoted as
saying, but I don't share his sentiments based on the investigation,"
said Lyons.

New York Times foreign editor Andrew Rosenthal denied Mexico's claim
that Gately was the single source of the allegations in the story and
said the paper "had no problem with the credibility in the areas we
quoted him."

The story acknowledges that Gately was investigated, but also that he
was later cleared, Rosenthal said. He also denied that story was
misleading or slanderous or that it had been timed to any event in
Congress.

According to The Times, the agents had learned from drug-trade bankers
in early 1998 that certain "clients" wanted to launder $1.15 billion
in illegal funds, "the most important" being Cervantes.

Although the information was passed to Washington, "no further effort
was ever made" to investigate Cervantes' alleged role, and prosecutors
did not even raise the subject with traffickers who had pleaded guilty
and were cooperating with the government in the case, the Times said.

Lyons said the bankers, who are in custody and uncooperative, were
hunting for a finder's fee. They wanted the agents to meet "this
person," but never were able to deliver "this person." So after two
months of dealing with them, the investigation ended as scheduled.

He said the bankers came late in the investigation, in March, when the
agents were in the process of concluding the probe, but never produced
anyone.

The case goes to trial in Los Angeles on March 29. Lyons said he'll be
making opening arguments for the case.

State Department spokesman James P. Rubin said the administration is
well aware of the problem of corruption of government officials by
drug traffickers.

"We have close cooperation with the government of Mexico to combat
such corruption," he said.

"Concerning the highly speculative allegations against General
Cervantes, we note that it is common for drug traffickers to falsely
claim high level connections in the Mexican government. We continue to
work closely with General Cervantes in the fight against narcotics
trafficking."

Customs Commissioner Raymond Kelley told the Times that the report
"obviously... was a significant allegation," but said, "There was
skepticism about it. Was it puffing? It was just not seen as being I
won't use the word credible but it wasn't verified."

A Treasury Department spokesman, who asked not to be identified, said
the investigation was shut down because of concerns about the safety
of undercover Customs agents and informants.

The concerns were heightened by increasing news media attention to the
investigation, the spokesman said, adding that the timing of the
shutdown had nothing to do with politics and international pressure.

According to the spokesman, the investigation netted 168 arrests and
more than $100 million in drug money seized.