MEXICO GOVERNOR HAS SECRET ACCOUNTS ABROAD - PAPER

MEXICO CITY, Jan 12 (Reuters) - A controversial Mexican state governor has
$10 million stashed away in secret bank accounts in California, Switzerland,
the Cayman Islands and the Bahamas, a Mexico City daily reported on Tuesday.

The daily El Universal cited an intelligence report by Mexico's Interior
Ministry that it said had traced the ownership of the accounts to Mario
Villanueva Madrid, governor of Mexico's Caribbean state of Quintana Roo.

El Universal said investigators had also traced the ownership of many
properties and firms, including one farm each in Panama and Belize, to
Villanueva, who has been hounded by allegations of links to drug traffickers
but has steadfastly denied them.

A spokesman for the state government of Quintana Roo, on the Yucatan
peninsula, told Reuters the government had decided not to comment on the
allegations but had "reports stating the contrary."

Villanueva, whose term ends in April, was unavailable for comment. The
Attorney-General's Office said it could not confirm the existence of the
report, and no one was available at the Defence or Interior ministries.

El Universal said Villanueva had not declared the money deposited in
overseas bank accounts.

It said investigators alleged that the $10 million was siphoned out of
political donations made to the ruling Institutional Revolutionary Party
(PRI) to support its candidate for mayor of the Caribbean tourist resort of
Cancun.

El Universal, which said the report was dated Nov. 12, said it cited
"sufficient proof" Villanueva was implicated in drug trafficking, money
laundering and other crimes.

The governor has denied allegations printed by The New York Times and local
Mexican newspapers of ties to Mexico's powerful cocaine cartels.

The coast of Quintana Roo state is known for sandy beaches and for turquoise
seas regarded by scuba-diving enthusiasts as some of the best diving waters
in the world. About 2 million tourists a year, mainly Americans, visit
Cancun.

But anti-drug officials say Quintana Roo, with its long, cove-studded coast,
has become a significant conduit for South American cocaine being smuggled
to the United States.

Universal said Villanueva jointly owned an agricultural trading company in
Panama with Panama's Second Vice President Filipe Virzi. It said the state
governor had imported 2,277 head of cattle since December 1997 and had sold
them at inflated prices under a government agricultural programme.

Villanueva also owns a ranch in neighbouring Belize, together with a
lawmaker of that country, Florencio Marin, the newspaper said.