Contributions to the
Democratic party, committees and candidates from Gary G. Jacobs
and his wife, 1996-1997, around the time Jacobs attended a White
House coffee with President Clinton. Before this, Jacobs had donated
almost exclusively to Republican candidates and committees.
Gary G. JacobS
Laredo National Bank
Committee To Re-Elect
Esteban E Torres To Congress
Democratic National Committee
DSCC Non-Federal Building
*soft money donation
Texas Democratic Party
Mrs. Gary G. Jacobs
Texas Democratic Party
Gary G. Jacobs
Laredo National Bank
Solomon P Ortiz
Armando Falcon, Jr.
Texas Democratic Party
Center for Responsive
are my only vice.
Jorge Hank Rhon, quoted in Earth
In 1991, Jorge Hank Rhon was driving around San Diego with a four-week
old kitten in the back seat of his car. Blanca was a rare mix of Siberian
white tiger and a white Bengal. Jorge had brought her, the story goes,
from his private zoo in Tijuana to Coronado so that his sister could play
But Jorge has a knack for getting caught, and U.S. customs nabbed him
with the tiger on his way back to Mexico in a random check of cars leaving
She was such a cuddly little baby, customs spokeswoman Bobbie
Cassidy told the San Diego Union-Tribune. Blanca was indeed adorable,
with chocolate stripes, blue eyes and a pink nose.
It turns out white tigers are endangered, and this one was worth around
$45,000. Jorge Hanks only vice can net around $24 million
a year. He ended up losing the animal, first to customs, then to the San
Diego Zoo. He also paid a $25,000 fine.
Jorge, 46, sometimes spins out of control. He is the wild one, the youngest
son of Mexicos powerful billionaire business-político trinity
made up of Carlos Hank González and his sons Jorge and Carlos Hank
Grupo Hank, as the trio is called, pulls political and economic
strings in Mexico at every level. Its operations and influence have even,
in fits and starts, expanded into the U.S., along with the Hanks
dreams of running the financial afffairs of the hemisphere.
Like his father and brother,
Jorge is a man who has been accused of murder, money laundering, rigged
gambling operations and business with drug traffickers. The charges usually
slide off as soon as they are leveled - the Hank men are Teflon-coated,
enjoying such impunity and influence that a U.S. government report this
summer said the Hanks pose a significant criminal threat to the
Let me start by saying that in course of interviewing for this article,
more than one person was clearly frightened and insisted I not identify
them. Watch what you write and be careful, I was told. When
asked why, the person replied, Just ask Jesús Blancornelas.
Jesús Blancornelas is an editor whose co-worker was ambushed and
killed by Jorge Hank Rhons bodyguards (see related story, page 15).
Later, in prison, the same men orchestrated the murder of the warden.
moves like a fish through water without leaving a sign of his presence.
Adolfo Aguilar Zinzer, legislative
Carlos Hank González, 71, is Mexicos legendary self-made
man, though he knows that no man makes it by himself. He started out as
a schoolteacher, the son of a German father and a Mexican mother. Its
a bit hard to comprehend his transformation from a teacher who sold sweets
to supplement his income, to Don Carlos, who today is among
the most powerful of men in Mexico, the man who is said to choose presidents.
Hank built his small businesses into bigger businesses, all the while
adding to his catalogue of political contacts. He became governor of the
state of Mexico, a congressman, secretary of both agriculture and tourism,
and mayor of Mexico City. Hank has built a business empire of banking
and transportation companies, including Taesa airlines, which he founded.
He cannot be president of his country Mexican law says both parents
must be born in Mexico but he holds court nonetheless, as the widely-known
leader of the dinosaurs, the old guard of the ruling PRI party.
Hank acquired greater influence in the late 1980s and early 90s as President
Carlos Salinas de Gortaris right-hand man. Its hard to say
who rode to power on whose coattails: Salinas clearly helped Hank amass
wealth and power, but Hank is said to have hand-picked Salinas for the
Hank González is believed by many to be behind the 1994 assassinations
of presidential candiate Luis Donaldo Colosio and politician Francisco
Ruiz Massieu and in the latter case, he is said to have set up
the ex-presidents bother Raúl Salinas to take the rap, because
no Hank has ever taken the fall.
Last year the Paris-based group Geopolitical Drugs Watch said that Carlos
Hank González is untouchable and will probably remain so,
in the United States and Mexico.
The gratitude he generates is amazing, said Adolfo Aguilar
Zinzer, a Mexican legislator who investigated the Hanks, quoted in Insight
magazine. Gratitude may be the key to the impunity enjoyed by Hank and
his sons. Its the currency with which the Hanks negociate. Because
if people dont feel gratitude, it can always be exchanged for fear.
Mexico has three very powerful border cartels: Tijuana, the Gulf cartel
and Juárez. Analyst Andrew Reding told the Senate Foreign Relations
Committee in 1995 that the Tijuana cartel essentially dominates the Pacific
drug delivery route.
Tijuana is the domain of Benjamín and Javier Arellano Félix,
said to be the most vicious of cartel leaders, with operations reaching
into San Diego and the Eme, the Mexican prison-based gang made infamous
in the film American Me. San Diego-based hit man David Barrón,
nicknamed CH, who died in an attempted shooting of editor Jesús
Blancornelas, was found upon autopsy to bear an Eme tattoo with sixteen
skulls: one for each hit. He was in the employ of the Arellano Félix
brothers at the time of his death. Reding told the Senate committee that
the Arellanos have hired what amounts to a private army, ranging
from federal and state police to members of San Diego gangs.
Like other drug cartels, the Arellano Félix group has numerous
links to the Hank family. One of the most shocking was the murder of Cardinal
Juan Jesús Posadas in May 1993. The former bishop of Tijuana was
gunned down by close-range hit men under the supervision of the
Arellano brothers in Guadalajaras international airport.
After the slaying, Benjamín and Javier flashed police badges, boarded
an Aeromexico flight and were back in Tijuana in time for dinner. Flight
attendants later stated they saw Jorge Hank Rhon sitting with the Arellanos
in the first class section. Warrants were issued for the Arellano brothers
arrest, and though they have been sighted in public, they have never been
picked up on those charges.
Was the cardinals slaying meant to send a message that no one is
sacred? Some think the cardinal was about to make public findings on the
relationship of drug dealers to government officials.
Soon after, the Los Angeles Times reported that authorities in Mexico
believed that the Arellano brothers answer to a silent boss who
is more worldly than they are and who has his own banker and legitimate
businesses. It is not difficult to conclude theyre talking
about Carlos Hank González, the patriarch.
los Tops Cats, Jorge Hank Rhon es el número uno.
Prensa San Diego, quoting a Mexican
report on gambling interests
If Professor Hank has an achilles heel, its his son
Jorge. The younger Hank Rhon has been called the weak link in the
chain, the loose cannon, the one who one of these days may bring
it all down. According to a recent government report, a criminal investigation
of him is active in San Diego.
Jorge is more openly criminal than either his father or his brother,
says a recent U.S. government report on the Hanks, and is regarded
as ruthless, dangerous and prone to violence. His attraction to
exotic animals is his weakness. He collects paintings of horses by American
artist Barbara Rieger Mittelmann, and he collects endangered species in
his private zoo in Tijuana.
Earth Island Journal reported in 1996 that Jorge Hank was co-owner with
David Ibarra (son of a former finance minister), of Promotora Beta, which
in 1989 served as a way-station in an international conspiracy to
ship endangered birds from Indonesia, through Singapore, Japan, Spain
and Costa Rica. The birds (as many as 500 a month) were then smuggled
into the U.S. aboard private yachts, netting $2 million a month.
The report continued, An inspection into Promotora Betas sale
of puma cubs ended abruptly when the inspector was mysteriously murdered.
In May 1995, Jorge Hank Rhon was arrested at Mexico Citys International
Airport on his way home from Japan. Customs found 12 suitcases full of
rare and endangered animal hides, fur and ivory. Hank Rhon had declared
the total value at $1000, and within hours he went home with a hand-slap.
The fact that he was even arrested startled many Mexicans accoustomed
to the Hanks untouchable status.
Jorge and David were also the creators of Reino Aventura,
a popular animal park near Mexico City, which they later sold to the Mexican
communications giant Televisa. According to journalist John Ross, Hank
Rhon had illegally acquired a whale to serve as the star attraction at
Reino Aventura. The whale, Keiko, later became a star in the movie Free
Jorge owns Tijuanas Agua Caliente racetrack, which has been said
to serve as an excellent money-laundering operation because Hank would
rig the track so that he and his associates got race results seconds before
they showed up on the parks screen. Knowing the winner, they could
instantly cash in for many thousands of dollars a pop.
Jorge has tried to stake a claim in U.S. gambling operations with not
much success. Last year, the Nevada Gaming Control Board began to pressure
Autotote, a U.S. gambling device manufacturer, to end its relationship
with Agua Caliente or face an official probe into its association with
Jorge Hank. Autotote withdrew its bid for a license rather than face the
With that, the advancement of the Hanks into the U.S. market has largely
been left to the elder son, Carlos Hank Rhon.
are crafty, like those mutant strains that develop as you create medicines.
Shane Phelps of the Texas District
Attorneys Office, commenting on money launderers to the San Antonio
The architects of NAFTA on
both sides of the Río Bravo have allowed a new, immensely profitable
system to flourish - sometimes creating millionaires overnight
based on a river of cash from drug sales that flows through the banking
industry and into business expansion and acquisitions.
The NAFTA gang is made up of
people who move 21 million dollars here and there this week, who another
week make $100 million in the secondary public offering of a business
subsidized by a subsidiary of a Hank company. If you think Internet stocks
are out of control, try the legal side of Grupo Hanks
empire, which is made of holding companies and subsidiaries that acquire
other companies, financial institutions that make loans to buy more companies,
with hardly anyone knowing what exactly some of these businesses do to
make money, except that they make hell of a lot of it. Forbes says Carlos
Hank González is worth an easy $1.3 billion, but others believe
it is much more.
Back in 1994 and 95, the peso was rapidly cascading. Mexican businesses,
expecting to prosper under NAFTA, were instead hurting badly as the currency
rapidly devalued. President Clinton pushed through emergency bailout legislation
at the desperate request of President Zedillo. Mexico blamed the crash
on former president Salinas and cronies such as Raúl Salinas and
Mario Ruiz Massieu, who fled the country almost as fast as their money
did. Salinas went from being the free-market darling to becoming one of
its most hated villains, blamed for crime, corruption and crisis in Mexico.
But while Mexico reeled, Grupo Hank kept on growing, untouchable, lighter
político pobre es un pobre político. (A politician
who is poor is a poor politician.)
Carlos Hank González
Carlos Hank Rhon, 51, is the trinitys respectable face:
the would-be international financier. Though he is positioned close to
the Juárez cartel, Carlos Jr. fancies himself a Texas businessman,
a banker, the wheeler-dealer behind Grupo Interacciones, a multinational
company that at one time attempted to become the number one Latin American
financial institution. His weakness all the Hanks seem to have
one has been a desperate desire to expand the family business into
the U.S., to advance the kingdom.
In 1991, Carlos began acquiring shares of Laredo National Bank in Texas,
eventually taking control in a series of shifty maneuvers. Laredo is no
small-town player; it is, in fact, a $2 billion company. Carlos Jr. did
so well with his investment, says the Federal Reserve Board, that he impressed
his father and inspired Don Carlos to buy shares $20 million worth.
Professor Hank met with Citibank officals to arrange the deal.
The elder Hank had a good relationship with the New York bank, having
used his vast accounts there to pay for foreign investments, which as
a Mexican government official he could not openly own without risking
some political fallout. Citibank and the Hanks had a nice, discreet relationship.
Carlos Hank Rhon, according to the Fed, used Laredo Bank to move money
around to make loans to his own businesses (which they defaulted
on), to finance friends acquisition of shares (which he later bought
back); he even lent himself money, says the Fed, to purchase greater control
of the bank. Though he had promised he would report to the Federal Reserve
if he ever controlled more than 25 percent of the ownership, the Board
says he eventually owned more than 70 percent without reporting to them.
With such liquid resources, Hank Rhon was also able to buy a majority
interest in Interacciones, S.A., a large financial company with offices
in New York, London and Santiago. The company had at one time planned
to become the biggest financial corporation in Latin America, but it suffered
a sudden loss of more than 60% of its equity capital as a result of the
1995 peso devaluation. Bloomberg Business News reported that Interacciones
was all but abandoning its plan to become a securities-trading power
across Latin America. It fell just in time for Hank Rhon to buy
shares and acquire a majority interest in the company.
Doing this fast, freewheeling sort of business was easy Carlos
Jr. just dealt away like he always had in Mexico, perhaps not paying much
attention to the legal minutiae here in the States. He is, after all,
a Hank,who doesnt seem to understand you cant do it that way.
He happily planned to expand his banking business, his heart set on acquiring
Brownsville Mercantile, another old border bank with seven subsidiaries
in Texas. The good news for the family was that Carlos Jr. was successfully
making inroads into the U.S. business scene. Professor Hank could indeed
In June of 1996, Hank Rhon applied to the Federal Reserve to purchase
Brownsville Mercantile Bank. He may or may not have known that the Justice
Department was already investigating his family, and that the Federal
Reserve Board was getting ready to nail him to the wall.
Too many unsavory individuals were allowed entrance to the White
House and access to President Clinton.
Republican report on the 1996 campaign finance investigation
[Mexico] is working hard to tackle the corruption traffickers have
Clinton, lobbying for recertification of Mexico last spring
On August 23, 1996, the Clinton government was nearly a year into investigating
the Hank family for drug and money-laundering crimes in the US. That was
also the date of one of the Presidents now-famous White House coffees,
and one of the guests was a target of the investigation. Gary Jacobs was
president of Laredo National Bank, and Laredo was believed to be the Texas
base for the Hanks money-laundering operations.
While one arm of the administration was preparing to expose a vast network
of Mexican and U.S. bankers connected to drugs and money laundering, Clinton
and representatives of the Democratic National Committee were breezily
courting Jacobs in the White House Map Room.
A former Republican supporter, Jacobs began donating to Democratic candidates
and the Democratic National Committee several months before the coffee,
including at least one soft money donation to the DNC. This
was right around the time Carlos Hank Rhon applied to the Fed to buy Brownsville.
To his surprise, Hank Rhons chances werent looking good. He
knew he had a less-than-stellar reputation that the Fed was eyeing warily.
Could he have thought naïvely, to be sure that sending
Jacobs to the White House could somehow smoothe the road? Or was it to
show dad that he was moving up?
By August, Gary Jacobs and his wife had donated $23,750 to Democratic
causes, and in the months after the coffee, gave $23,000 more. Although
not a huge sum of money in Washington, the donations would not make the
White House or the DNC look good. Jacobs was linked to the Hanks and Mexican
drug money. He was Carlos Hank Rhons employee. And the Federal Reserve
and Justice Department believed that Hank was using Laredo National Bank
to launder his money.
Did Clinton know that his own administration was investigating the Hanks
when he invited Jacobs to the White House? If the president wasnt
aware that the Hanks were tied to dirty money, why not? The Hanks had
for years been eyed for all sorts of suspect activities, and Justice had
been investigating Laredo since 1995. And if Clinton did know, did he
not care that he may have been soliciting drug-related funds for the DNC?
looks as though the government is getting serious about going after them.
Andrew Reding, World Policy Institute
senior fellow for hemispheric affairs
[The accusations] are completely false, and everyone knows they
[Hank González] travels to the United States frequently,
and I dont understand whats motivating these charges.
Carlos Arguelles, spokesman for Hank González
T he Federal Reserve never granted permission to Carlos Hank Rhon to buy
Brownsville. News reports came out that officals were wary of his reputation.
Rumor also had it the Fed just didnt like his style. Too violent,
too brash. In disgust, Hank Rhon withdrew his application in 1998. Bad
press began to dog the Hanks at every turn.
On December 22, 1998, the Federal Reserve Boards Office of Financial
Institution Adjudication (OFIA) sent a notice to Carlos Hank Rhon, citing
nine counts of violations of banking regulations and laws and calling
for a public hearing that could permanently bar Hank from participating
in any manner in the affairs of a United States depository institution.
In more than 60 pages, the notice chronicles charges of self-funded loans
from Laredo to Hanks businesses, of Hank Rhon setting up paper
board members so he could acquire more shares, of secretly investing his
fathers money in Laredo Bank, and of the shuffling of funds in and
out of Citibank to cover fraudulent transactions.
The hearing is set for July, 2000. Hank faces imprisonment and more than
$40 million in fines. Even for a Hank, thats gotta sting.
Then in July, a confidential
report from the National Center for Drug Intelligence was leaked by the
Mexican daily El Financiero and later by the Washington Post. The report,
marked law enforcement sensitive, examined the Hanks
criminal operations and their impact on the United States, drawing information
from the Drug Enforcement Administration, the FBI, the Customs Service,
the CIA, and Interpol, among others. Its dire tone was clear: Grupo
Hank poses a significant criminal threat to the United States. Its multibillion-dollar
criminal and business empire, developed over several decades, reaches
throughout Mexico and into the United States.
In the U.S. we like our billionaires to be like Bill Gates, seemingly
harmless nerds, who, even if we cant stand them, we cannot really
equate with evil. If Carlos Jr. thought he could ignore the rules and
so easily and cheaply earn favors from the Fed, he underestimated.
How pitiful the White House contact must have looked, how ridiculous in
the scale of things!
And so they may lose ground, the NAFTA gang, not because of moral outrage,
but simply because of their style. The PRI dinosaurs are not as popular
today, as opposition parties gain strength and the Mexican press speaks
up more than before. Rumor has it that Don Carlos is ill with cancer,
and as Gabriel García Márquez would say, this may be the
autumn of the patriarch.
It could very well be that forces of time and style will close in on the
Hanks, just as they did for Raúl Salinas, the ex-presidents
brother who is serving out a fifty-year prison sentence. But we dont
know that yet.
Truth is, if next Julys hearing with the Federal Reserve Board results
in a Hank an untouchable Hank doing jail time, it will be
a bloody miracle.
Julie Reynolds is editorial director of El Andar.
© 1999 El Andar Magazine