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$205 million in milk money…

28 July 2007

This Ye-Gon case is getting weirder by the minute. The only solid result so far has been that Mexico is going to require a prescription to buy cough medicine with pseudoephenidrine. The D.E.A. originally claimed it was entitled to a cut of the loot recovered under the argument that they had provided training materials later used by Mexican police investigators. Ye Gon released through his lawyer a letter claiming PAN officials and the former Fox Administration forced him to act as banker for them. The lawyer later claimed that the letter wasn’t from him, and the Mexican government (the one in Los Pinos, that collects taxes, not the one depending on donations) got a little miffed. They started wondering – as was everyone else – why Ye Gon was considered a drug “kingpin” — but was allowed to walk around free in the United States. When he was finally picked up earlier this week (on a minor drug misdemeanor) court papers revealed yet another twist.


The DEA wasn’t just operating in Mexico (as they said they weren’t), they were up to their eyeballs in this case. Edward Chavez, a D.E.A. agent in Mexico City said in court documents that he personally, and a DEA lab confirmed, that the Ye Gon was in possession of ephinedrine.


In other words, the D.E.A. is NOW saying they had a claim to the loot, but – oops – their rationale was nonsense, and what they were doing was violating treaties and operating illegally in Mexico. Details, details … though this interesting detail might mean Ye Gon might off. A Mexican judge is going to have to sort this mess out in September.


There’s more than enough that doesn’t make sense about this case – who was actually doing the investigation, why the Chinese and U.S. ports didn’t detect the massive quantities of chemicals coming through their ports, and why was the 205 million dollars seized moving around from bank to bank?


El Sentir de Coahuila “follows the money”, and comes up with more questions than answers (my translation):


It is not at all clear why the Mexican government announced with such fanfare the distribution of more than 205 million dollars found last March in Chinese-born Zenli Ye Gon’s residence to the Federal Prosecutor (PGR) and the Secretariat of Health (Ssa): it could have been an attempt to make a media sensation, or to try to partly deflect U.S. claims, or to put an end to the confusing legal situation, and public speculation over the precise location of these funds. As it is, the the present administration is facing a public relations disaster over their handling of the alleged delinquent, who was detained today in the United States on a minor possession charge.


You need to remember that, from the very beginning, the amount of cash disclosed to the public by the PGR didn’t agree with photographic evidence numbers of the piles of bills. The PGR had to adjust the amount of the announced seizure. Days later, the same agency said the money was deposited with the Secretariat of the Treasury and Public Credit (SHCP); that it was then moved to the Soldiers and Sailors’ Bank (Banjército), which was asked about. Then, when asked about it, it turns out the bills were transferred to the Federal Reserve of the United States, and the actual bills were distributed throughout the international financial system.

Moving this much cash around arouses suspicion. It reminds one of the procedures used by organized crime to launder ill-got gains. And, there is the questionable practice of removing paper money, which was potential criminal evidence, with such alacrity, as if someone wanted to cover up a crime.


In order to cut off all discussion, at yesterday’s press conference at Los Pinos, Attorney General Eduardo Medina Mora, and Secretary of Health, José Angel Córdova, together with the SHCP chief financial officer, Luis Mancera, announced the the funds would be split between the PGR and Ssa. They know full well that there are judicial procedures that are followed to legalize moving seized assets into the public coffers, and that there are pending claims by the D.E.A. Despite this, as early as April, Felipe Calderón Hinojosa had announced that the resources seized from the industrialist were destined for drug addiction treatment programs. Such haste could be the beginning of a bitter disappointment for Caderonismo, especially if the courts don’t dole out the “milk money” as promised.


How Zenli Ye Gon’s seized dollars have been handled is only one of several murky aspects of the public administrator’s handing of this incident. Slowly, other indications of serious irregularities are coming to light. Why did the Customs Service (part of SHCP) allow the import of several tons of pseudoephedrine to a wanted – and fugitive – narotics trafficker; why did the Secretariat of Foreign Affairs on the personal recommendation of Vicente Fox and the Secretary of the Interior (Gobernacion) take such an personal interest in Ye Gon’s naturalization?


If we add at this point the conflict with the United States that the Zhenli case caused, the premature disposal of the actual cash makes sense. The present administration has nothing more than slogans to get itself out of trouble and to answer the incongruities and contradictions brought to light. And it is an alarming exhibition of the failure of government action.


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