DRUG PROBE AIMED AT MEXICAN OFFICIAL

Investigation of Governor Seen as Attempt To Improve Chances of U.S.
Certification

MEXICO CITY—Mexican authorities are trying to decide how to charge a
powerful ruling party state governor with drug money laundering, even
though he has immunity and cannot be arrested, according to Mexican and
U.S. officials.

The dispute pits Mexico's federal law enforcement agency, which is eager to
prove it has the legal capacity and political will to reel in a
high-ranking member of the ruling party on drug-related charges, against
Mario Villanueva, the governor of the southern state of Quintana Roo, who
has adamantly maintained his innocence with a put up or shut up defiance.

Never before has the country's top law enforcement agency attempted so
publicly to prosecute a sitting ruling party governor in a nation where
governors run their states like independent fiefdoms and officials of the
ruling Institutional Revolutionary Party are considered untouchable until
they leave office. The high-stakes duel has escalated in recent weeks
because of Mexico's attempts to provide tangible evidence of its
willingness to combat drug trafficking just as the United States is
debating the annual certification of Mexico as a reliable partner in the
war on drugs.

But the standoff between government investigators and the governor has
stymied the probe, with the government's lawyers expressing concern about
the quality of the attorney general's case and the legal obstacles to
pursuing criminal charges against Villanueva, according to U.S. and Mexican
officials.

Mexican and U.S. law enforcement agencies are jointly investigating
allegations that Villanueva received millions of dollars in payoffs from
one of Mexico's most powerful drug cartels in return for permitting passage
of cocaine from South America through Quintana Roo en route to the United
States, according to officials from both nations.

Law enforcement sources in both countries say Mexican Attorney General
Jorge Madrazo Cuellar would like to charge Villanueva with drug-related
crimes to prove that no one here is above the law. But Villanueva has
immunity as a sitting governor and cannot be arrested or charged with a
crime unless he first is impeached by the lower house of the federal
Congress under a law designed to protect high-level elected officials from
politically motivated prosecution.

Since the governor's six-year term ends April 5, some legal analysts argue
that the government should simply wait six weeks to arrest Villanueva when
he leaves office and loses his immunity, rather than initiate a lengthy and
politically charged impeachment process. But law enforcement sources in
both countries said they are worried that if federal agents don't act
quickly, Villanueva could flee the country. Elections to replace
Villanueva, who by law cannot run for a second term, will be held on Sunday.

Furthermore, according to Mexican and U.S. law enforcement officials who
spoke on condition that they not be identified, there is deepening concern
that the case against Villanueva is weak and might be thrown out by a
judge. Sources said that investigators have been unable to definitively
link overseas bank accounts that they believe are controlled by Villanueva
to drug money. According to one official familiar with the investigation,
that includes a Swiss bank account in Villanueva's name containing $73
million.

The case has evolved into an extraordinarily public wrangle, with daily
news leaks about supposed evidence investigators have amassed against the
governor and Villanueva's defiant catch-me-if-you-can replies.

This week, Villanueva filed papers asking a judge to order the attorney
general to turn over details of its investigation to him. Late last year he
made a show of voluntarily submitting to interrogation by Mexican law
enforcement officials and took out newspaper advertisements attacking the
allegations against him. "The governor . . . is very calm and confident"
that he will be cleared of the charges, said Roberto Andrade Uscanga,
Villanueva's spokesman. As to reports of law enforcement officials' concern
that the governor might attempt to flee Mexico when he leaves office, the
spokesman said he "has no reason to leave the country since there are no
concrete accusations" against him.

"Villanueva is absolutely convinced that Mexico thinks the way to get
certification is by cutting his head off," said Raymundo Riva Palacio, a
leading news columnist who has followed the case.

But George W. Grayson, a Mexico scholar at Virginia's College of William &
Mary, said the legal pursuit of Villanueva "is an indication the government
is increasingly embarrassed by these characters who are so abjectly corrupt
and are so blatant about it."

Officials of the federal attorney general's office have declined to comment
on the record about their investigation of Villaneuva.

"At this moment I cannot be precise about the status of the investigation,"
Mariano Herran Salvatti, chief of the anti-drug agency of the federal
attorney general's office, said at a news conference Thursday. "What I can
tell you is that we are doing an investigation in general in the Yucatan
peninsula about the operations of the Juarez cartel and the people who may
be involved in such operations."

But officials in both countries familiar with the investigation said that
while Mexican agents have been scrambling to assemble evidence against the
governor, the case is riddled with legal problems.

Although Mexican authorities have tapped the governor's telephone lines,
put Villaneuva and members of his staff under surveillance and examined
bank accounts of the governor, his family, friends and associates, law
enforcement officials are having difficulty tying Villanueva's reported
millions of dollars to drug trafficking, according to U.S. and Mexican
sources.

Officials familiar with the case noted that the governor has made
substantial sums of money in real estate deals in booming Cancun, Mexico's
most opulent beach resort, making it difficult to build a case that his
vast wealth was obtained through illegal drug payoffs.

According to one Mexican official, witnesses bolstering the government's
case allegedly were tortured by army interrogators, and some witnesses
subsequently have retracted or changed their statements accusing Villanueva
of being involved in drug trafficking. The source also said it appears that
at least part of the government's case against Villanueva is based on
illegal wiretaps.

A spokesman for the attorney general's office denied any use of torture or
illegal wiretaps, adding, "The whole investigation is [being conducted]
under the rule of law. . . . We don't use torture because it's against the
law."