CLINTON EXPRESSES REGRET OVER MEXICO DRUG STING

WASHINGTON -- President Clinton, responding to a complaint by Mexico, told
President Ernesto Zedillo the United States should have informed Mexican
authorities about an undercover U.S. money-laundering sting in that
country, the White House said Tuesday.

``President Clinton expressed regret that better prior consultation had not
been possible in this case,'' spokesman Mike McCurry said, confirming
Clinton called Zedillo after the Mexican leader condemned the secret use of
American undercover agents inside his country.

Clinton made the call on Friday, after Mexico lodged a formal complaint
with the U.S. government over how the three-year investigation was run.
Operation Casablanca culminated last week in 160 indictments, including of
at least two dozen Mexican bankers, many of whom were lured to the United
States, where they were arrested.

McCurry said the two presidents agreed ``the U.S.-Mexico counterdrug
partnership is vital to success'' of efforts to fight drug trafficking,
which results in profits that criminals try to legitimize by illegally
``laundering'' the money through cooperating banks.

Before he talked to Clinton, Zedillo had complained that no cause ``can
justify the violation of our sovereignty nor of our laws.''

U.S. law enforcement officials said they did not notify Mexico of the
operation because they feared endangering undercover agents. Mexico's
anti-drug operations often are infiltrated by drug gangs.

Mexico's Foreign Secretary Rosario Green said Monday that she may try to
extradite and prosecute U.S. undercover agents who may have violated
Mexican law while taking part in the sting operation.

Green said that with revelations that this wasn't just an undercover
operation on U.S. territory, ``it stopped being an issue of money
laundering and became an issue of violating national sovereignty.''

In a meeting with Mexican senators Tuesday, Mexican Deputy Attorney General
Eduardo Ibarrola said that Casablanca case files reviewed by Mexican
officials in Washington indicate ``probable cause'' exists to file a
complaint, the government news agency Notimex reported.

Myron Marlin, a spokesman for the Justice Department, said the agency had
not been notified of any legal action Mexico may take. He refused to
comment on allegations agents violated any laws.

In Los Angeles, more than a dozen suspects arrested in the case pleaded
innocent Tuesday to the money-laundering charges.

Secretary of State Madeleine Albright talked to Green by telephone on
Friday to say the United States should have notified Mexican officials,
State Department spokesman James Rubin said.

``Secretary Albright did express her regret in general terms about the
level of consultations and the manner of announcement of the
investigation,'' Rubin told reporters.

Asked if the ill feelings could hurt U.S.-Mexican relations, Rubin said,
``We value our cooperation with the Mexican government in the fight against
drug traffickers, and we certainly hope they put their need to fight drug
trafficking over any of their concerns about consultations.''

Mexican officials had initially welcomed the indictments after they were
announced May 18 in Washington. But in recent days, Mexico's leaders
claimed the United States violated international agreements and Mexican
laws by failing to inform them of the investigation and by having U.S.
agents operate on their soil without permission.

Checked-by: Mike Gogulski