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News 8

Your Health Matters

Drugs tied to $243M in bogus loans

10:42 PM CST on Thursday, December 27, 2007



DALLAS - A News 8 investigation has found that a little known government agency may have unwittingly wasted taxpayers money on top of using the funds to support criminal activity.

The probe originally revealed that small business loans sponsored by the Export-Import Bank of the United States were made to non-existing companies for equipment that wasn't even real.

Now, New 8 has discovered that some of the people who got the Ex-Im Bank loans may have drug connections. The $243 million worth of bad loans were originally made to help trade with Mexico.

The loans have been linked to the Juarez drug cartel, which is known for its brutal murders. The cartel killed one dozen people and buried them in a suburban backyard across the border fro El Paso.

Another loan was linked to the Sinaloa drug cartel, whose business is smuggling heroin into the United States.

The federally funded Ex-Im Bank apparently backed loans to people affiliated with both cartels and the Mexican drug trade.

Under the Freedom of Information Act, News 8 asked for all documentation related to defaulted small business loans made to Mexico from 2002 to 2005. Although there were nearly 200 bad loans, so far, information on only 34 cases has been turned over.

But the bank did give a list of the defaulted loans and the names and addresses of the people who got them in Mexico.

"They have drug connections, which is very disheartening to think that the U.S. government is lending money to documented traffickers in the drug trade that are tied into the cartels in Mexico," said Phil Jordan, the former head of the El Paso Intelligence Center for the DEA and Border Patrol in El Paso.

Jordan ran background checks of the borrowers with two federal sources and found borrowers from Juarez and Sinaloa with criminal ties to money laundering, organized crime or drugs in Mexico. Jordan said he was surprised to find that the Ex-Im Bank didn't do similar checks before guaranteeing the loans.

"To lend them millions of dollars and then to not be a fail safe system of checks and balances is just throwing money away," he said.

Dallas Congressman Jeb Hensarling, who is a long-time opponent of the Ex-Im Bank, said he is ready for a probe.

"Certainly there's enough evidence to warrant an investigation to see if American taxpayers' dollars are funneled into phony Mexican companies that end up in the hands of phony drug cartels," he said. "It's almost the stuff of a spy novel."

Out of $243 million in the medium-sized loans the Ex-Im Bank backed in Mexico from 2003 through 2005, less than $25 million was ever repaid. The bank, a federal agency, declined to be interviewed on camera by News 8.