April 2002 - VOLUME 23 - NUMBER 4
An Interview with Al Giordano
Al Giordano is the editor and publisher of Narco News, an Internet news magazine (www.narconews.com) that reports on corruption and the drug war in Latin America.
|In August of 2000, unbeknownst to myself or Menendez, Banamex brought suit in New York State Supreme Court against the two of us and the Narco News Bulletin for libel, slander and for ěthe interference with economic advantage.î||
Multinational Monitor: What were the events that led to Banco Nacional
de Mexico (Banamex) attempting to sue you in a U.S. court?
This was important information that strikes to the heart of the credibility
of the U.S. war on drugs in Latin America.
In March of 2000, I was invited to Columbia University Law School in
New York to speak on various drug policy issues on a panel of people that
included a former New York Supreme Court Justice, a representative from
the Washington Office on Latin America and Mario Menendez Rodriguez, the
editor and publisher of Por Esto! I spoke of Menendez story and
his history as one of the most courageous journalists in Latin America.
Menendez himself showed graphic evidence, including photos and maps, of
cocaine trafficking activities on Hernandez land.
Subsequently, I founded the online news journal Narco News Bulletin (www.NarcoNews.com).
One of our goals is to translate what the Latin American press is reporting
about the war on drugs, because frankly theyre doing a better job
than the U.S. press. We translated some of Menendez articles, articles
by other Latin American journalists, and did original stories of our own
about the efforts to persecute the press in Mexico for reporting this
story about Hernandez and cocaine trafficking.
In August of 2000, unbeknownst to myself or Menendez, Banamex brought
suit in New York State Supreme Court against the two of us and the Narco
News Bulletin for libel (through the written reports), for slander (for
the statements at Columbia University) and for the interference
with economic advantage. I first heard about the lawsuit in late
October of 2000. Banamex never succeeded in serving me the papers, so
in February of 2001, I waived service of process in order to go to New
York State Supreme Court and face these charges.
MM: When does Citigroup enter the story?
Keep in mind that Narco News was not the first source in the United States
to accuse Banamex of money laundering. That was done by the U.S. Department
of Treasury and other U.S. agencies in what was called Operation Casablanca,
in which a sting operation was held against various bankers from various
Mexican banks. Two executives from Banamex were charged in criminal court
and the Federal Reserve Board seized $3.8 million from Banamex as a corporation.
The leader of that operation was then-Treasury Secretary Robert Rubin
with the Clinton Administration. He was considered to be the hard-liner
on this investigation. Secretary of State Madeleine Albright wrote a letter
of protest to Rubin about not informing Mexican authorities of this operation.
So this was all a big public issue before Narco News even touched it.
Later, of course, Robert Rubin left Treasury to work for Citigroup. Aside
from Sandy Weill, who is the CEO, Rubin is the most important person at
the worlds largest financial institution.
So Rubin was prosecuting Banamex for drug money laundering in 1998, but
by 2001 according to Citigroups own SEC filings, he was negotiating
the deal to buy the same bank.
Why is that interesting? Banamex alleged in its lawsuit against us that
its business was weakened by journalistic reports. If anything harmed
Banamexs business, it was the prosecutorial actions of the U.S.
government and the investigation led by Robert Rubin. In 1998, he was
prosecuting them, but by 2001 he bought them for $12.5 billion.
There has been a lot of pressure on Citigroup ever since information
about money laundering by the Salinas family came out. Lowell Bergman
produced a comprehensive documentary about this for Frontline Money,
Murder and Mexico. He showed how Citigroup, through its private
banking office and specifically through Amy Elliott, knowingly allowed
Raul Salinas, the brother of the president, as well as the Hank family,
one of the most powerful in Mexico, and others to use false names in banking
and laundering millions of dollars through Citigroup.
Senator Carl Levin, D-Michigan, held hearings. John Reed, who was then
the CEO, embarrassed himself in his testimony before Congress. Many people
feel thats what led to his downfall and replacement by Sandy Weill.
After Rubin came in, Citigroup was under enormous pressure from Congress,
with new laws and regulations and more scrutiny from the Federal Reserve
Bank. So what did they do? Buy Banamex.
All this is happening in the middle of our lawsuit, which showed that
we never caused any financial damage to Banamex by telling the truth about
its owners activities and how that intersected with the activities
of the U.S. government and Mexican government. They were trying to destroy
us two journalists with no comparative resources.
MM: How was the case resolved?
The judge delivered a decision on our motion to dismiss on December 5,
2001. In it, she dismissed the charges against Menendez based on a lack
On the Narco News issues, the judge said the jurisdictional issues would
require discovery. But she said she had read all the 500 pages of articles
we published at the time of the lawsuit, and concluded that Narco
Newss web site and the writers who post information are entitled
to all the First Amendment protections accorded a newspaper, magazine
or journalist. Furthermore, the nature of the articles printed on the
web site and Mr. Giordanos statements at Columbia University constitute
matters of public concern, because the information disseminated relates
to the drug trade and its effect on people living in the hemisphere.
Thus, for the first time in the history of U.S. courts, the New York
Supreme Court extended the protections of Sullivan v. New York Times of
1964 to all internet journalists, and threw the case out of court. So
this offers a clear road map for other Internet journalists
if you follow basic, fair journalistic standards, citing the evidence
and sources of information, you can quote what the Latin American press
says, just like the New York Times can, without fear of harassing lawsuits
by wealthy interests that seek to silence you. Its not a blanket
protection for anyone to just say anything on the Internet. But it is
a strong protection for anyone who exercises an authentic journalistic
practice. This will have far-reaching effects on how journalism is conducted.
It puts a lot more pressure on the commercial press to pay attention to
whats reported on the Internet and extends the First Amendment to
I spent a year working as a defendant and am now $200,000 in debt for
having mounted that defense, and were moving towards a countersuit
to recover those costs.
MM: Are there other examples where Citigroup has been implicated
in activities like money laundering?
During the 2000 election campaign, copies of checks were published by
El Universal, the largest newspaper in Mexico, that showed a very strange
money laundering scheme in the Fox campaign. A large amount of money that
originated in the United States, Europe and other places went through
U.S. banks, one of which was Citigroup. The money was cut down into checks
of less than $10,000 and then transferred over the international borders
to Mexico where it was reassembled and given to TV Azteca and other media
to cover some of the Fox campaigns expenses. Whats significant
about that $10,000 figure? Under U.S. law, any transfer of $10,000 or
more must be reported. So if you have a sum of $100,000 and divide it
into 11 checks, you can evade reporting. That behavior in the Fox campaign
was reported by El Universal and elsewhere. We translated that work of
the Mexican press and that was one of articles Banamex sued us for.
In my view as a reporter who covers the drug war from the front lines in Latin America, the real kingpins of drug trafficking do not wear sombreros or turbans. They wear suits and ties, go to respectable clubs, give money to all the major parties and are allowed to proceed with great impunity and protection. What this says is that the United States government is not really serious about fighting a drug war, and the prohibition on drugs, like the prohibition on alcohol before it, should be repealed.
|Rubin was prosecuting Banamex for drug money laundering in 1998, but by 2001 according to Citigroupís own SEC filings, he was negotiating the deal to buy the same bank.|