Summary: This story starts small, with a Mexican political cartoonist and his bank. Then it goes to the former president of Mexico and his corrupt brother. Then it ties them all up with Citigroup and how one of its Mexican banks, implicated in narco business, will open some U.S. branches this year—which is great news for narcos looking to launder money back south.
A Mexican political cartoonist suspects that his bank—Banamex, owned by the U.S.-based Citigroup—froze his account because of his criticism of the banking industry. Via Narco News:
A man who produces comics lampooning the banking industry in one of Mexico’s largest newspapers has now run into trouble with the country’s second-largest bank. Rafael Barajas Durán, who goes by the pseudonym El Fisgón, tells media outlets that Banamex abruptly canceled an account that he had used for more than ten years.
“They didn’t warn me, and they only said that it was in their best interest,” says Barajas Durán to the Mexico City-based newspaper La Jornada, which publishes his work. For more than twenty years Barajas Durán has used his pen to poke fun at the country’s political leaders. His social commentary includes criticizing the government’s response to the financial crisis and the takeover of Mexico’s banking industry by foreign corporations.
Banamex has acted aggressively towards journalists before, suing Narco News after it published a report “linking linking then-CEO Roberto Hernández Ramírez to drug trafficking.” (The suit went to the NY Supreme Court and was tossed out—setting a legal precedent that favored First Amendment protections for online publications.) And the U.S. GAO issued a 1998 report criticizing Citibank entitled: “Raul Salinas, Citibank, and Alleged Money Laundering.” The report suggested that Citibank helped Salinas (brother of a former Mexican president) launder millions of dollars through “complex financial transactions to hide the paper trail of funds.”
Brother Salinas, it’s worth remembering, was not only implicated in narco business, but was convicted of orchestrating a hit against his brother-in-law.
Now Banamex is planning to open branches in the United States, starting in El Paso. This is alarming not only because of Banamex’s dubious behavior in the past, but because banking deregulation (starting with NAFTA and continuing until today, including legislation recently signed by Obama) and the opening of Mexican-run banks and branches in the U.S. has been a huge boon to narco money laundering.
From an article The Stranger ran last November:
The big problem for the narco-capitalists in Colombia, Corva explains, wasn’t so much how to get the drugs north as how to get the cash back south. NAFTA was designed to dramatically increase the flow of goods, services, trucks, people, and money across North America’s borders. It was also, in the words of Guilhem Fabre, professor at l’Institut Universitaire de France in Paris, “a true Trojan horse for the narco-traffickers.”
The banking deregulation and privatization that came along with NAFTA made it much easier to launder money from the U.S. into Mexican banks, where it could disappear into South America. In an excellent story this June, Michael Smith of Bloomberg News detailed how Wells Fargo, Wachovia, American Express Bank, and Bank of America became funnels for sending narco-money back into Mexico. And (alleged) narco-capitalists like Carlos Cabal Peniche ran entire banks. “You don’t have to pay a bank president (or a teller) to look the other way,” Corva writes in his dissertation, “when you are already paying their salaries.”
And from a story a few days ago on a stock-analysis website:
New federal legislation, which President Barack Obama signed into law last summer, allows U.S. banks to open branches across state borders, and that is allowing Banamex to expand, Villar said.
Bienvenidos a los Estados Unidos, Banamex! Or, since you’re owned by Citigroup, should we say “welcome home?”
Either way, we’ll be seeing you around.
Your coverage of the politics in Mexico has been amazing. I wouldn’t believe half of this stuff if it were in a movie.