- The Washington Times - Thursday, August 1, 2002

DALLAS The race for Texas governor already one of the most expensive in state history has turned downright mean.

Voters have been inundated this week with a campaign advertisement from Republican Gov. Rick Perry that paints his opponent, Democrat Tony Sanchez, as a sleazy banker who was once in cahoots with narcotics traffickers.

Within hours the Sanchez campaign was airing a rebuttal ad, contending that Mr. Sanchez has done nothing wrong.

"An absolute, utter lie," Mr. Sanchez snapped. "He's crossed the boundaries of honesty and decency and truthfulness."

Though the Perry ad does not say Mr. Sanchez financially benefited from $25 million deposited in his bank by Mexican businessmen in 1983, they do question the Democrat's integrity and say he helped transfer the money into a Panamanian bank instead of giving it to U.S. officials.

The Perry commercial focuses on Mexican cartel cash that flowed through Mr. Sanchez's Tesoro Savings & Loan in 1983 and 1984, delivered there by Mexican money broker Mardoqueo Alfaro. Mr. Alfaro told Mr. Sanchez that he was investing in the United States because of his country's failing economy.

The ad shows men loading a plane with suitcases full of cash, then later carrying the suitcases into a bank vault. Its script: "A federal judge confirmed Sanchez's bank wired millions of laundered drug money to Manuel Noriega's Panama."

Then a calm Mr. Sanchez is shown saying, "I'm very proud of the way our savings and loan handled that matter."

A voice closes: "Can Texans really trust Tony Sanchez?"

Some longtime Texas political watchers were more surprised about the timing of the Perry ad than its content. There are more than 15 weeks left before the election and seldom does a candidate fire such a barrage this early.

Perry aides said the commercial was necessary because Mr. Sanchez already had spent millions questioning Mr. Perry's integrity, hinting that many of the governor's appointments had been made in return for heavy campaign contributions.

"Mr. Sanchez has made ethics the central issues in this campaign, and I think it's appropriate to talk about his ethics, his integrity," an angry Mr. Perry said when asked about the ad by a reporter on Monday.

The television blitz Monday did inject some verve into the campaign, with Mr. Sanchez talking about it with reporters, whom he typically avoids for one-on-one conversations.

"I'm being accused of laundering drug money by Rick Perry," the Laredo billionaire told reporters, whom he invited to ride on his tour bus. "[A]nd that's a lie. Nobody's ever accused us of any of that. We were never involved with that."

He said the Mexican money broker approached officials at his bank and told them Mexican investors were making large cash deposits in banks all over the southern U.S. border, getting the money out before Mexico's banks collapsed.

"Mexico was collapsing," explained Mr. Sanchez, who has spent more than $32 million, mostly on TV ads. "They called it sacadolares take out the dollars."

Federal authorities, operating on information that many such deposits in Texas and California were from the Mexican drug cartels, arrested two Alfaro associates in California in 1984.

A federal judge ruled later that year that funds deposited by the Alfaro group in an El Paso bank were subject to seizure by the United States, since it was clearly from drug receipts. He mentioned similar activity at Tesoro.

The Tesoro money was deposited in 84 different accounts, allowing Mr. Alfaro and his associates to set up the names without loan officials ever meeting the account holders.

Once the Internal Revenue Service determined that the two Alfaro aides had been laundering drug money, they froze the aides' accounts at several banks, including 16 in their names at Tesoro. But that left 68 other accounts, with funds of more than $9 million.

The Perry campaign insists Mr. Sanchez and his officers had three choices then voluntarily hand the depositors' money over to the IRS, hold the money until federal courts decided where it should go or allow the Mexican depositors to withdraw it.

"When given a choice of turning over drug-related funds to federal authorities, Mr. Sanchez and Tesoro instead allowed the drug money launderers to spirit the suspect funds to Panama, then a hotbed of international drug activity," said Ray Sullivan, a Perry spokesman.

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