U.S., Mexico press effort to freeze kingpins’ cash

MEXICO CITY — An aggressive U.S.-led effort to pursue money-laundering cases against Mexican cartels is inflicting only fleeting damage on the trafficking organizations, which have grown sensationally rich on drug profits from American consumers.

For the first time, U.S. Treasury agents have begun to share with their Mexican counterparts financial data on drug kingpins that are gleaned from wiretaps, informants and cyberspace probes. The United States has now designated more than 300 people and 180 companies as “significant narcotics traffickers,” which freezes their U.S. assets and bans Americans from doing business with them.

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But while President Obama has boasted of “putting unprecedented pressure on cartels and their finances,” the U.S.-Mexican effort has produced little in the way of arrests or seizures. During the past 11 years, only $16 million tied to suspected Mexican traffickers has been blocked in the United States, or one dollar for every $20,000 estimated by the Congressional Research Service to flow southward from the United States to organized-crime groups in Mexico each year.

Mexican officials complain that the financial intelligence the United States shares with them is of little use, and that the information included in kingpin designations is unsupported by evidence that would allow Mexican courts to go after launderers.

Under U.S. law, a designation can be based on “reasonable belief’’ — a low legal standard that could include, for example, a declaration from an anti-narcotics agent based on a tip from an informant.

Until recently, the U.S. Office of Foreign Assets Control alerted Mexican authorities that it was about to put someone on the kingpin list only a day or two in advance — a diplomatic nicety but meaningless in terms of helping the Mexicans make cases.

U.S. Treasury officials concede that the dollars frozen are few but say the kingpin lists serve to “name and shame” businesses and associates who help launder cash for the cartels. Mexican authorities call this naive. “When they name someone to the list, the people associated with this business quickly go underground,” a senior Mexican official said.

The U.S. government has also had its frustrations. Mexican laws make it far harder to freeze assets than U.S. regulations do. And while Mexico has passed laws limiting deposits and withdrawals in U.S. dollars from Mexican banks, efforts to reform Mexico’s money-laundering laws have stalled in Congress.

Working together

In recent months, the two countries have made what U.S. officials describe as unprecedented efforts to work together.

In October, the U.S. Office of Foreign Assets Control added alleged senior trafficker Alejandro Flores Cacho to its roster of drug kingpins and prohibited Americans from dealing with a dozen of his alleged investments, including a sports club, a cattle ranch, an aviation school, a transport firm and an upscale cantina called the Numero Uno in Mexico City.

U.S. Treasury officials say Flores Cacho is the transportation chief for Joaquin “El Chapo” Guzman, founder of the Sinaloa drug cartel and one of the richest men in Mexico.