U.S. MAY END MEXICO DRUG PROBE

WASHINGTON (AP) -- The Mexican embassy formally asked the Clinton
administration Tuesday 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.

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.

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.''

The decision to shut down the probe was sharply questioned by Gately.

``Why are we sitting on this type of information? It's either because we're
lazy, we're stupid or the political will doesn't exist to engage in the kind
of investigation where our law enforcement efforts might damage our foreign
policy,'' Gately said.

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 shut down
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.

President Clinton certified last month that Mexico is a fully cooperating
partner in the drug war despite a decline in narcotics seizures. The
decision drew criticism from some lawmakers who contend the administration
is not doing enough to stop drug trafficking.