FED, CITIBANK, SALINAS IN DOPE-$-LAUNDERING
By Jeffrey Steinberg
(New Federalist 06/17/96)
June 12 (EIRNS) -- One week after Executive Intelligence Review
[EIR] broke an exclusive story which pointed to probable witting
collusion among the New York Federal Reserve, Citibank, and the
brother of former Mexican President Carlos Salinas de Gotari, in
a multimillion-dollar international drug-money-laundering scheme,
major European and U.S. newspapers, including the Wall Street
Journal and the Miami Herald, have jumped on the scandal. But in
all cases they've avoided the Fed connection emphasized by EIR,
and have gone out of their way to misrepresent the affair as a
case of an isolated corrupt banker or two.
The fact is that the world banking system -- including Citibank
-- is as addicted to drug money as a heroin addict is to smack,
and the banks are far higher on the totem pole in Dope, Inc. than
thugs like the Salinas brothers.
The U.S. Justice Department announced this week that it is
investigating the role of Citibank in the Salinas scandal.
As reported in EIR, Raul Salinas is presently under indictment in
Mexico on charges of murder-conspiracy and "illicit enrichment."
The murder-conspiracy charges stem from his role in the September
1994 assassination of Jose Francisco Ruiz Massieu, then head of
Mexico's ruling PRI Party. At the time of the murder, Raul
Salinas's brother, Carlos Salinas de Gotari, was the President of
In 1989-93, Raul amassed a fortune, which may total as much as $1
billion, through collusion, in part, with top officials in two of
Mexico's narcotics cartels: Juan Garcia Abrego, head of the
so-called Gulf Cartel, and Joaquin Guzman, head of the Sinaloa
Cartel. The story first broke publicly, when, on Nov. 15, 1995,
Raul Salinas's wife, Paulina Castanon, was arrested by Swiss
authorities as she attempted to withdraw $84 million from an
account at the prestigious private bank, Pictet & Cie, in Geneva.
This is where Citibank first surfaced in the scandal. The Pictet
account, which was in a phony name, was reportedly set up for
Raul Salinas by Amelia Grovas Elliot, the head, since 1981, of
the Mexico team at Citibank's exclusive Private Bank. Private
Bank is a bank within Citibank that holds an estimated $80
billion in assets, on behalf of a small, exclusive clientele.
On May 12, 1994, Elliot gave testimony for the prosecution in a
money-laundering case brought against officials of American
Express International Bank, in Brownsville, Tex. In her
testimony, Elliot explained that all of her activities were
cleared through three or four highers-up in the Citibank chain of
command. At the time, prosecutors were using Elliot's testimony
to demonstrate how a "clean" bank screens its clients before
giving them VIP treatment.
When the Salinas case erupted, Elliot's testimony took on a very
different character. It demonstrated that Citibank's role in
helping Raul Salinas to launder what is now believed to be about
a third of a billion dollars, was witting -- from the top down.
That means Citicorp chairman John Reed. And it has important
implications for the New York Fed.
-+- Fed Receivership -+-
In another exclusive that was long covered up by the financial
press, EIR revealed back in 1992 that Citibank had gone bankrupt,
and had been placed -- secretly -- into receivership by the New
York Fed. This story, like the recent Salinas dope scandal, was
later confirmed and reported widely in the Wall Street Journal
In short, at the time that Elliot was helping wash millions of
dollars in Mexican cartel loot through Raul Salinas's
international accounts, Fed regulators were managing the
day-to-day affairs of Citibank. Fed inspectors were
micro-managing any transactions that passed the
one-million-dollar mark! The Fed has never been forced to own up
to its role in the Citibank-Salinas money-laundering scheme,
although the U.S. Justice Department is now probing the entire
affair, including the role of Citibank.
-+- Press Wakes Up -+-
Shortly after EIR published its exclusive on Salinas, the New
York Times jumped in with its own detailed report. The Times
quoted Raul Salinas, declaring that "Amy" Elliot had personally
handled all of his international financial transactions.
The Wall Street Journal weighed in on the story on June 7, after
Swiss authorities discovered yet another trust fund containing
more than $240 million, which they traced to Raul Salinas. This
time, the names of other Swiss banks, including Bank Julius Baer
of Zurich, and Banque Edmond de Rothschild, were mentioned, along
with Pictet, as managers of the Salinas cash. A spokesman for
Pictet told the Journal that the bank had been approached by
longtime associates (probably Citibank's Elliot), and therefore,
had no reason to be suspicious. Swiss authorities are not so
sure. They have since announced that they are probing four Swiss
banks for possible violations of the country's money-laundering
In its initial coverage -- and in every subsequent story -- the
Wall Street Journal was forced to acknowledge that Carlos Salinas
de Gotari, since retiring from the Presidency of Mexico, has been
on the board of the Dow Jones Corporation, publishers of the