ALBRIGHT URGES MEXICO TO DROP THREAT IN DRUG STING

Diplomacy: Despite her defense of U.S. officials, behind scenes she is
critical of Treasury Department.

WASHINGTON--Secretary of State Madeleine Albright admonished Mexico on
Thursday to refrain from carrying out its threat to indict U.S. undercover
agents who delved into Mexican territory to catch Mexican bankers in the
Operation Casablanca money-laundering sting.

Despite her public defense of the U.S. agents, new evidence suggests that,
behind the scenes, Albright has been highly critical of the Treasury
Department handling of this matter.

In a scathing letter to Treasury Secretary Robert E. Rubin, published
Thursday in the Congressional Record, Albright complained about his failure
to notify her office and the Mexican government before his announcement of
the sting three weeks ago.

"We might have achieved more favorable results," Albright wrote Rubin, "if
we had brought [Mexican] Atty. Gen. [Jorge] Madrazo [Cuellar] and a few
others into our confidence a few days before the public announcement.

"In this regard," she wrote, "I believe State should have been consulted. We
would have been able to offer some advice that could have ameliorated the
negative reaction."

Her admonition to the Mexicans about the threatened prosecution of U.S.
agents came at a news conference closing the annual meeting of the two
nations' cabinets.

"I do think that prosecution and extradition would be counterproductive,"
she told reporters. "We need to concentrate on the criminals. That is the
point of this. We have to keep our mind on what it is we're trying to do
together, which is to get those who are engaged in criminal activities that
are damaging both our countries."

Mexican Foreign Secretary Rosario Green, while agreeing that the governments
should not dwell on past mistakes, insisted that the Mexican attorney
general had no choice but to keep investigating whether U.S. agents broke
Mexican law.

Green noted, however, that Operation Casablanca will not push Mexico to rule
out future U.S.-Mexican antidrug actions, so long as Mexican sovereignty and
law are respected.

"What we're trying to do right now with both attorneys general,"

she said, "is to discuss the principles according to which we can base joint
operations."

After a meeting in New York on Monday, President Clinton and President
Ernesto Zedillo of Mexico told U.S. Atty. Gen. Janet Reno and Madrazo to
work out procedures for future operations.

As a further aid to future cooperation, Albright said, she and Green had
agreed to set up a direct phone line between their desks.

Mexican officials were incensed that the U.S. agents participating in
Casablanca operated on Mexican soil without Mexican authorization and lured
Mexican bankers into a sting. Sting operations are regarded as illegal
entrapment under Mexican law.

But U.S. Treasury officials continue to express pride in the operation. In
testimony before the House Banking Committee on Thursday, Undersecretary of
the Treasury Raymond W. Kelly called Operation Casablanca "the largest drug
money-laundering investigation in U.S. history." Describing it as a
"significant step forward to curb money laundering," he said it had led to
the arrest of 167 people, including 26 Mexican bankers, and netted $100
million in seizures.

Albright's letter to Rubin was inserted in the Congressional Record by Sen.
Charles E. Grassley (R-Iowa), who attacked Albright for complaining about
the sting instead of praising it.

The senator did not say how he had obtained the letter, dated May 22, which
provides an unusual, public display of anger between members of Clinton's
Cabinet.

Checked-by: "Rolf Ernst"