ustxtxb_obs_1990_02_09_50_00016-00000_000.pdf

English Only The Official Language .tfoventent Brings You: Texas in Translation Art by Jo11 Danzig. for 064,:odifer TEXAS IN TRANSLATION Jeff Danziger’s Amended Map of Texas, a special 10″ x 15″ Observer mini-poster is available for $ 5.00. To order, send your name, address and check to: The Texas Observer Poster Sales 307 West 7th Austin, Texas 78701 Funny Money Why Is the San Antonio Fed Cash-Rich? BY DAN CARNEY Washington 0 NCE AGAIN, there is a connection between U.S. foreign policy toward Panama and the drug trade. It isn’t as direct as the Reagan Administration’s paying Manuel Noriega to help it fight contras in Nicaragua while Noriega allegedly aided Colombian drug traffickers. But it is just as bizarre. On December 29, after the intervention of a Washington lawyer, $50 million in small bills were loaded onto a C-130 military transport at Kelly Air Force Base in San Antonio. The plane was bound for Panama City and the money was part of $375 million belonging to the Panamanians. It had been frozen in two New York escrow accounts. Most of that $375 million represents the taxes American companies would have paid the Panamanian government had Ronald Reagan not banned such payments as part of the sanctions he declared in 1988. The sanctions ordered those companies to calculate their taxes and pay them into escrow accounts set up in New York. After the invasion by American troops and the formation of the government of Guillermo Endara, President Dan Carney is a writer for States News Service in Washington, D.C. Bush lifted the sanctions and allowed the money to go to Panama. Normally, such things are handled by a simple wire transfer, and indeed most of the $171 million that has been shipped so far has gone that way. But in this case the Panamanians who, along with the Liberians in West Africa, use the dollar as official currency were short of cash to meet their government payroll. But why San Antonio? The money originated in New York, and the New York branch of the Federal Reserve Bank is the one designated to deal with foreign transactions. Yet why wasn’t the money flown out of that city? There are two reasons. First, San Antonio is the site of Kelly, which since the invasion last December has been a major staging center for American troops involved in the invasion of Panama. And secondly, the San Antonio Fed has lots of cash, which is almost certainly the result of drug-related money laundering in South Texas. For the last two years, money watchers have noticed a peculiar rise in the cash surpluses at the San Antonio Fed. After years of relatively modest amounts, the cash on hand has jumped to $2.3 billion, behind only Federal Reserve branches in Los Angeles and Miami. In December, an Internal Revenue Service official told the House Banking Committee that he believed most of the San Antonio surplus comes from “casas de cambio,” the currency exchange houses on the border. Other witnesses identified these houses as convenient places for Latin American drug cartels to launder money so they can steer clear of banks, which come under more strict federal regulation. “For the trafficking organizations in the Southwest, physically transporting cash is considerably less risky than having to deal with banks,” FBI agent Michael D. Wilson told the committee. The Banking Committee Chairman, San Antonio Democrat Henry B. Gonzalez, is interested in how the unfrozen money came to be moved to Panama. As is common in Washington, things didn’t start to happen until a lawyer got involved. President Bush lifted the sanctions on December 20. But five days later, the Panamanians hadn’t received a dime. They desperately needed money in the volatile period after the invasion. On Christmas Day, Panamanian ambassador Gabriel Lewis called former undersecretary of state William Rogers, who is now a partner in Arnold & Porter, Washington’s largest law firm, to plead for help. “There is no need for the continued payment of influence peddlers who employ former high government officials such as William Rogers to do that for which our government is responsible,” said Gonzalez. His objections notwithstanding, the money took off five days after the call. President Bush has labeled himself an environmental president. To his credit he did name William Reilly, former head of the Conservation Foundation,, as administrator of the EPA. And the President did introduce a fairly strict clean air bill. But there is a surprising correlation between voting against George Bush and voting for environmental issues. Recently, Congressional Quarterly put together a list of those Texans most likely to vote against Bush on important matters. The League of Conservation Voters has put together its ranking of Texas Congressmen, according to how they voted on 10 issues ranging from oil spill liability to nuclear waste clean up. Guess what? The same two Congressmen, Henry B. Gonzalez of San Antonio and Ron Coleman of El Paso, finished on top of both lists. Likewise, Dick Armey, the suburban Dallas Republican, was ranked most likely to Note with Bush; and the League gave him a big fat zero for voting against its positions on all 10 matters. 16 FEBRUARY 9, 1990