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Mexico's Drug Scandal
by Alejandro Bustos

Not even Hollywood could have come up with a story this good.

Our tale begins with a man by the name of Roberto Hernandez, chairmen of the Banco Nacional de Mexico, commonly known as Banamex. In 1991, Hernandez bought his share of Banamex, one of Mexico's largest banks, during the administration of Raul Salinas de Gortari, the former Mexican president who has since fled his native land in a flood of corruption scandals.

In the eary-90s, Salinas, then-president of Mexico, was privatizing his country's state-run financial sector. Seeing a golden opportunity, Hernandez bought his stake in Banamex at a rock bottom price. Oh, did I mention that Hernandez was a political supporter of Salinas?

Cut to December 1996, when Mario Menendez Rodriguez begins a series of investigations into Hernandez. Mendez is the editor of Por Esto!, a daily in Mexico. In his newspaper, Menendez publishes a long series of articles that the Banamex president to drug trafficking and money laundering. Banamex sues. The result? A Mexican court throws out the lawsuit after ruling that the stories are based on fact. That judgement survives on appeal. A third attempt to press criminal charges in Mexico is thrown out of court.

Mexican judges, it seems, have no problem with their fellow countrymen reporting that one of Mexico's top bankers is engaged in drug dealing.

Enter Al Giordano, a former Boston Phoenix reporter, social activist and friend of 1960s radical Abbie Hoffman. Giordano, a gringo who can't speak Spanish, comes to the conclusion that the mainstream press in his country is failing miserably in its reporting on the war on drugs. So he quits his job, moves to Latin America, learns Spanish and launches the Web site Narconews on April 18, 2000.

Narconews quickly becomes the Internet bible for people interested on the war on drugs. This scrappy, low-cost online site quickly puts the mainstream scribes to shame. For instance, it was a Narconews exclusive that revealed corruption in the Associated Press bureau in Bolivia, leading to the resignation of AP's correspondent there, formerly known as "Mr. Bolivia."

Giordano and Menendez join forces. In March of 2000, these two "authentic journalists" - the term they use to describe themselves - travel to New York where they give an interview to the Village Voice, WBAI radio and speak at Columbia University. The subject is Hernandez and his drug dealing. Banamex freaks out and sues for libel, slander and "interference with prospective economic advantage."

Let's recap: A Mexican banker sues over allegations made in a Mexican newspaper regarding events that took place in Mexico in a New York court. Got it? A court date has been set for July 20 in New York City. The authentic journalists and their friends want the lawsuit tossed out, claiming the purpose of the suit is to shut down investigate journalism at its best. The bankers and their lawyers insist New York courts have jurisdiction because the alleged libel took place in the Big Apple.

Meanwhile, this past May, U.S.-based Citigroup announces a $12.5 billion US proposed acquisition of Banamex. Citigroup, which has been tied to many dubious dealings, owns Citibank. One recent charge levelled against this U.S. banking giant came on June 13 of this year, when the Mexican wire service Notimex reported on allegations that Mexican Senator Jesus Ortega Martinez made.

Martinez, who belongs to the Democratic Revolution Party, or PRD in its Spanish acronym, accused Carlos Menem, former president of Argentina, of using subsidiaries of Citigroup to launder money. Menem is currently under arrest in Argentina for allegedly participating an illegal arms sales of weapons to Croatia and Ecuador while he was president.

Then there was the story this past November in the Peruvian daily La Republica. According to this newspaper, the wife and two daughters of Vladimiro Montesinos the fugitive ex-spy chief of Peru who was captured in Venezuela on June 24 used Citibank to launder $18.6 million. The complex "wash" involved more than a dozen banks, among them the Royal Bank in Canada, said the newspaper. The Peruvian government has accused Montesinos of helping drug traffickers, money laundering and engaging in illegal arms deals.

So let's take one last look at our fascinating tale: the president of one of Mexico's largest banks is tied with drug trafficking by a Mexican newspaper. The subsequent lawsuit is thrown out by Mexican courts. The newspaper editor then joins an Internet reporter and together they travel to New York. Their trip to the Big Apple results in another lawsuit. Meanwhile, Citigroup., which media reports have tied to shady dealings, announced it wants to buy Banamex.

As I said, this story is too rich to have come from Hollywood.

Alejandro Bustos







Supporting Documents

Court documents, background articles, links to other sites and commentary from Al Giordano can be found here: +++

Guardian story here: +++

Banamex (English) here: +++

Citibank (U.S.) here: +++




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