MEXICO SAYS U.S. ADVISED ON STING, BUT CONSENT NEVER GIVEN

MEXICO CITY -- Mexican officials have admitted they had some advance
knowledge of a major U.S. money-laundering sting that has inflamed
relations between the two countries, but say they never approved it.

The acknowledgment late Wednesday was a reversal of Mexican complaints in
the past two weeks that U.S. officials carried out the investigation
without notifying Mexico. But the admission did little to ease Mexico's
criticism over the handling of the case.

The investigation, ``Operation Casablanca,'' led to the arrests last month
of 42 people -- including about two dozen Mexican bankers. Some of the
undercover operations were apparently carried out in Mexico, Mexican
officials said.

On Wednesday, Mexico said that U.S. Customs Service officials had discussed
the investigation with a Mexican deputy attorney general two years ago. But
U.S. officials did not request assistance or reveal the case involved a
sting operation -- illegal under Mexican laws.

In a statement, the Mexican attorney general's office said the meeting ``in
no way can be considered an authorization or a validation for undercover
informants or witnesses in the service of the U.S. government ... to carry
out actions on national territory.''

Mexican officials have filed a protest and officials say they will seek the
extradition of U.S. agents who broke their laws. Charges could include
inciting the commission of a crime, facilitating money-laundering
operations and usurping Mexican powers.

Attorney General Janet Reno said at a news conference Thursday in
Washington that talk of extraditing U.S. agents to Mexico is premature.

``I'm sure that the Mexican government does not assume guilt until it has
thoroughly investigated a matter,'' Reno said.

Checked-by: (Joel W. Johnson)