A MEXICAN'S MYSTERY MILLIONS

Riches of Ex-President's Brother May Soon Be Explained

MEXICO CITY--For Mexican investigators on a nearly four-year crusade to
nail the ex-president's brother for alleged corruption, it was the break
they'd been waiting for. On July 15, they arrested Juan Manuel Gomez
Gutierrez, chief accountant for Raul Salinas de Gortari and such a trusted
confidant that some of Salinas's secret Swiss bank accounts were held in
Gomez's name.

But then the Salinas saga took another bizarre twist of the sort that has
become a hallmark. Somehow Gomez made bond less than 24 hours after his
arrest, and somehow he lost the police tail assigned to follow him. The man
that Mexican, Swiss and U.S. investigators had hoped could explain how Raul
Salinas had accumulated hundreds of millions of dollars as a mid-level
government employee during his brother Carlos's presidency slipped away and
has not been seen since.

The incident typifies the difficulties authorities faced trying to decipher
the secret and often Byzantine financial transactions of Raul Salinas.
Investigators describe a Herculean effort to gather enough credible
evidence from an assortment of shady drug mafiosi to prove Salinas
laundered millions of dollars in illicit drug proceeds.

In spite of many setbacks, investigators may yet get an explanation of
Raul's riches. Angry and humiliated by the Gomez debacle, over the
following three months police executed 25 search warrants at 19 homes,
offices and businesses linked to the accountant in Mexico City and the
border city of Ciudad Juarez.

According to the chief prosecutor in the case, Jose Luis Ramos Rivera,
police hauled away a treasure trove of previously unknown financial data --
much contained on encrypted computer disks and hard drives.

With the new findings, Ramos said in announcing the seizures on Oct. 2,
Mexico has traced 289 bank accounts -- containing about $250 million -- and
123 homes, ranches, apartments and other properties to Raul Salinas,
through investigations in Mexico, the United States, Switzerland, France,
Britain, Germany, the Netherlands, Luxembourg, Belgium and nations of the
Caribbean.

Salinas denied that the new accounts and properties were his in a letter
"to public opinion" that Mexican newspapers published a few days later.
"Don't let yourselves be fooled," he wrote from his prison cell. "I don't
have any more accounts, nor any more properties."

Much of the money was first discovered several years ago in secret Swiss
accounts after U.S. investigators told the Swiss they believed Raul Salinas
had stashed illicit drug proceeds in their banks. That prompted a
three-year money laundering investigation by Swiss Attorney General Carla
del Ponte that is expected to climax later this month when the Swiss
government officially seizes more than $132 million that Raul Salinas has
on deposit there.

Three officials familiar with the Swiss investigators' report on their
findings said it concludes that Raul Salinas controlled practically all the
drug shipments transshipped through Mexico during his brother's 1988-94
presidency. Details of the report were first published in the New York Times.

The officials -- a European and two Americans, all of whom spoke on
condition their names not be used -- said the Swiss report mentions the
possibility that some of the money may have been funneled to Carlos
Salinas's 1988 presidential campaign. The report does not implicate Carlos
Salinas in any crimes, the sources said. But according to one of the
officials, it asks, "Could the president of Mexico not have known what his
brother was doing?"

Noting that under Swiss laws, the government can keep the money if it is
seized, Raul Salinas's attorneys charge that the Swiss concocted the case
because they are eager to claim a huge financial windfall. They claim the
Swiss have relied on the testimony of convicted criminals who have lied to
get prison sentences reduced.

One such witness is Luz Estela Salazar, an accountant for Colombia's
Medellin cocaine cartel whose U.S. prison term was reduced from 25 years to
seven in exchange for her testimony. She has told Swiss investigators that
she attended meetings in Mexico City between Raul Salinas and Medellin
cartel members during which Salinas allegedly agreed to protect cocaine
shipments through Mexico for a fee of $300,000 per plane load. She also
said one of the founding Medellin traffickers, Gonzalo Rodriguez Gacha,
gave $200,000 to Carlos Salinas's election campaign, according to Mexican
newspaper accounts.

Her husband, Jose Manuel "Alex" Ramos, a former Medellin cartel lieutenant
serving a life sentence in the United States, also told investigators of
the alleged Mexico City meetings, claiming Raul Salinas eventually
collected $80 million in bribes. He alleged that shipments were protected
by a network in Mexico's Interior Ministry and sometimes were transported
by Mexican military vehicles, and that Colombians were given flight plans
and radio frequencies to avoid detection by U.S. and Mexican anti-drug
forces, according to Mexico's El Universal newspaper.

Carlos Salinas, who lives in self-imposed exile in Ireland, has not been
charged with any crime. He has denied any wrongdoing and has said that he
knows of no wrongdoing by anyone in his family.

Raul Salinas has said that the money he has on deposit in Switzerland was
given to him by rich Mexicans for an investment fund he was in the process
of setting up. He has repeatedly denied any connection to drug trafficking.

Much of the Swiss information about Raul Salinas's alleged ties to drug
trafficking appears to be identical to allegations about Salinas family
drug ties that became public in recent U.S. court cases against Juan Garcia
Abrego, once Mexico's biggest drug kingpin, and former Mexican deputy
attorney general -- and Salinas's former brother-in-law -- Mario Ruiz Massieu.

In October 1996, a jury in Houston found Garcia Abrego guilty of 22 counts
of drug smuggling and money laundering and sentenced him to 11 life
sentences. In 1997, a judge and jury in Houston confiscated $9 million from
a Texas bank account of Ruiz Massieu, concluding the funds were illicit
drug proceeds. He currently is under house arrest in Newark and is the
subject of a drug trafficking investigation by a Houston grand jury.

According to court documents, witness statements, law enforcement sources
and numerous published accounts, Ruiz Massieu and Raul Salinas allegedly
were paid millions by Garcia Abrego and other Mexican kingpins during the
Salinas administration to protect their drug shipments to the United States
- -- a charge both men deny. At the time of the Houston proceedings, however,
prosecutors did not present all the evidence, conceding that much of it
came from unsavory characters whose credibility likely would have been
attacked. Other witnesses got cold feet about testifying when their names
became public, officials said.

The Swiss apparently interviewed many of those people. While many of the
witnesses are less than exemplary, the burden of proof is lower because it
is a civil asset seizure, not a criminal case.

Salinas's attorneys have said they will go to Swiss court to challenge the
seizure and reclaim the funds. At that point, Swiss prosecutors will have
to present their case proving Salinas's drug ties. According to U.S. and
Mexican law enforcement officials and published accounts, some of those
witnesses and their allegations include:

Magdalena Ruiz Pelayo, who said she was the longtime secretary for Raul
Salinas Lozano, 81, father of Carlos and Raul Salinas. Ruiz Pelayo was
convicted on cocaine conspiracy charges in Newark in 1992 and is still in
prison. In a statement to the FBI in 1996, first published last year by the
weekly Mexican newsmagazine Proceso, Ruiz Pelayo said she attended numerous
meetings during which drug trafficking was discussed by kingpin Garcia
Abrego, Ruiz Massieu, Raul Salinas and his father. The Salinases have
denied the allegations.

Marco Enrique Torres, a Mexican drug trafficker jailed in the United
States, who told investigators that in 1994 an airplane loaded with $20
million in drug payoffs landed at a ranch owned by Raul Salinas in northern
Mexico. Enrique Torres said he was paid $1.6 million to help arrange a
truck convoy to transport the money to Banca Cremi in Mexico City. On
another occasion, Enrique Torres told investigators, he was present when
Raul Salinas and Ruiz Massieu helped arrange a $4 million payoff to secure
the release of 1.2 tons of cocaine and a suspected trafficker that Mexican
police had captured.

Guillermo Palomari, the Chilean-born former treasurer of the Cali cartel,
now in the U.S. witness protection program, who told Swiss investigators
that Raul Salinas received more than $80 million in protection payoffs,
sometimes totaling $5 million a month, and that Carlos Salinas also
received some of the funds. Palomari told investigators that in early 1994,
his cartel paid its Mexican partner, drug lord Amado Carrillo Fuentes, $30
million for transporting Colombian cocaine through Mexico. The cartel
authorized Carrillo Fuentes to give a $3 million commission to Raul Salinas
- -- nicknamed El Chupasangre, or the Bloodsucker -- and $1 million to
Mexican senators, he alleged.

Checked-by: Richard Lake