Mexican president plans new money-laundering measures, open to changing drug war strategy

MEXICO CITY (AP) — President Felipe Calderon said Tuesday he is willing to change Mexico's drug-war strategy and promised a new offensive against money laundering after hearing blistering criticism from opposition leaders.

Calderon's drug-war talks, the latest session with leaders of most of the country's opposition political parties, come as the government offensive against drug cartels is drawing more criticism. More than 28,000 people have died in drug-related violence since Calderon launched the offensive in late 2006, sending thousands of troops to drug hot spots.

"I know that the strategy has been questioned, and my administration is more than willing to revise, strengthen or change it if needed," Calderon said at the meeting. "What I ask, simply, is for clear ideas and precise proposals on how to improve this strategy."

The series of meetings started last week with Calderon calling together academics, experts and civic groups to exchange ideas on combating drugs.

For more than 3½ years, Calderon fiercely defended his policies, even as vicious cartel turf battles and attacks on police spread deep into Mexico and all along the regions bordering the United States.

He now appears more willing to discuss alternatives — even the legalization of drugs, a proposal that he personally opposes. Calderon repeated his argument again Tuesday that unilateral legalization would increase drug use and do little to reduce the cartels' income.

Some of the toughest criticism from the opposition leaders came on the subject of money laundering. An estimated $10 billion in suspicious cash possibly linked to drug trafficking flows through Mexico annually, fueling the cartels' violence and ability to bribe officials.

"The government's strategy is not working," said Jesus Ortega, leader of the leftist Democratic Revolution Party. "I don't think there even is a strategy ... A government policy implies attacking this financial system that benefits from money laundering, and as a consequence, benefits from the violence."

While Mexico imposed tough restrictions on U.S. dollar transactions in June, limiting tourists and Mexicans without bank accounts to exchanging a maximum of $1,500 in cash each month, critics claim little has been done to combat laundering through banks or other businesses.

"This money — millions and millions of dollars — isn't stuffed under the mattress of the drug lords or the hit men," Ortega said. "The largest part of this money, the immense majority, is in the banks and financial institutions of Mexico and the United States."

Calderon says officials from Mexico's Treasury Department and central bank are drawing up a new strategy to fight money laundering.

"I have asked that this be presented this week," Calderon said, but did not offer specific details.

The Mexican Banking Association proposed earlier this month that the government impose limits on cash transactions in pesos as well as dollars.

Association vice president Luis Pena proposed at the time that transactions conducted in cash be limited to about 50,000 pesos ($4,000).

Calderon said Mexico has had a hard time hiring the kind of financial experts needed to fight money laundering, because wages in the private sector are higher and the risks of government service are greater.

Other political leaders at the meeting said government needs to do more to provide educational and job opportunities for youth who otherwise might lapse into drug addiction or be recruited by drug cartels.

On Tuesday, Mexican troops detained seven people counting more than 16 million pesos ($1.2 million) in cash inside a home in northern Mexico and a gunman who was guarding the house, the Defense Department said.

The department said the gunman ran inside the house in the Monterrey suburb of Guadalupe after seeing the soldiers, who gave chase and found the other suspects.