Sign Up for Free Mailing List

August 2, 2001

Narco News 2001

Narco-Corruption at

U.S. Customs Service

Ex-Agent Files Federal Lawsuit

Accusation: $250,000 bribes to let Cocaine

Trucks Pass and Sec. Rubin Did Nothing

Editorial by Al Giordano

A Narco News Global Alert

The Narco News Bulletin has obtained a copy of a federal lawsuit filed this week in United States Court in San Diego, California, by former U.S. Customs agent John Carman against the Customs Service Commissioner, the U.S. Treasury Secretary and various federal and local police officials.

In the interests of the public's right to know about public documents, we republish the entire lawsuit today on Narco News:

The accusations by Officer Carman reach to the highest levels of law-enforcement, all the way to Washington DC, where the blame for the entrance of cocaine and other illegal drugs into the United States is loudly heaped upon corruption in Latin American countries, that, U.S. officials too often insist, stands at stark contrast with their own supposedly sincere efforts at drug enforcement.

But, according to Officer Carman - veteran of the U.S. Agency charged with interdicting drugs at the Mexican border - U.S. officials have known about a well-oiled corruption machine within the Customs service for years, in which drug traffickers are routinely charged big-money bribes in exchange for the passage of large shipments of cocaine into the United States at the Otay Mesa border checkpoint between Mexico and California.

US Customs Whistle Blower John Carman

Carman - who has been in contact with The Narco News Bulletin since last year - blew the whistle on officials who he has accused of complicity in this cocaine corruption crisis within the Agency. According to his lawsuit, Customs officials, instead of taking his evidence seriously, instead turned against him, demoted him, fired him, and then, in conjunction with local police officials, persecuted him in a search operation later ruled illegal by a state judge.

One prominent civil rights attorney to whom Narco News gave a copy of Carman's lawsuit commented: "This lawsuit is on strong legal grounds and could succeed."

But the attorney cautioned that the road for Officer Carman, in bringing this historic suit, could be long and expensive "before causing the shake-up at Customs that it should provoke" or bringing justice to the Plaintiff.

Shooting the Messenger

The Complaint, filed on Carman's behalf by Attorney Joel C. Golden of San Diego, alleges that Officer Carman "has been subjected to discrimination in the terms and conditions of his employment, unlawful termination and to retaliation by Customs employees and specific employees named herein, on the basis of his being a 'Whistleblower.'"

Carman began work as a Customs Agent in 1983, already a law enforcement veteran who labored the United States Mint Police, the U.S. Secret Service and the San Diego Police Department. In 1989 he was promoted to be Senior Custom's Inspector. In 1997, after he had attempted to alert superiors of the systematic bribe-taking and other narco-corruption within the Agency, he received, according to the lawsuit, "pressure from his superiors" to accept, under protest, a lesser position as Import Specialist. By that time, the complaint states, he suffered a medical condition arising from the inhalation of automobile fumes at the San Ysidro-Tijuana Point of Entry.

The complaint alleges that the discrimination and retaliation has been continuous against Carman even after he was fired by the Customs Service, and that the Customs Service violated its own policy of confidentiality for agents who report or allege illegal behavior by officials within the agency.

"Beginning on or about June 1995," according to the complaint now on file at the U.S. District Court in San Diego, Carman had "filed formal complaints with the U.S. Treasury Department alleging discrimination based on being a 'Whistle Blower' and retaliation for his involvement in making 'confidential disclosures' which were subsequently improperly disclosed to members of high ranking officials that were in fact the subject of the 'confidential disclosures' and he made further disclosures relating to officials accepting money and other illegal activities."

"The same 'persons' that were the subject of the confidential disclosures, conspired to have Plaintiff removed from his position creating a 'hostile work environment' and subsequently Plaintiff was fired/ 'forced to resign'."

The words in quotations - Whistle Blower, Confidential Disclosures, Hostile Work Environment, Forced to Resign - come from explicit federal statutes, including the Civil Rights Act of 1964 and federal statutes to protect Whistle Blowers, upon which the lawsuit is based.

And yet, despite the rhetoric in Washington about routing out corruption in law enforcement, officials at the highest levels of the Customs Service and the Treasury Department were, according to the lawsuit, negligent or complicit in illegal acts, including a systematic system for receiving bribes to allow cocaine shipments into the country.

Citigroup's Rubin Named

Two of the defendants are new officials, appointed by the Bush administration, and in fact are being sued for the alleged sins of their immediate predecessors. The lawsuit states:

"Defendant Charles Winwood is the current Commissioner of Customs having succeeded Raymond W. Kelly who was Commissioner when the past acts alleged occurred. Paul J. O'Neill is the current Secretary of Treasury having succeeded Robert Rubin. Defendants Winwood and O'Neill are sued in their official capacities. Customs is a federal agency under the auspices of the United States Department of Treasury."

Ex-Treasury Secretary Robert Rubin (left) with Banamex directors
Alfredo Harp and Roberto Hernández, and Citigroup CEO Sandy Weill

Rubin, now a director of Citigroup, engineered the recent deal by the world's largest financial institution to purchase the National Bank of Mexico ("Banamex") for $12.5 billion dollars. Rubin, as Treasury Secretary under President Bill Clinton, had captained the Operation Casablanca drug-money sting mission in which two Banamex employees were arrested, officials sought to seize $3.8 million dollars in allegedly illicit proceeds from the bank, and the Federal Reserve Board placed a "cease and desist" order upon Banamex. Rubin's prosecution of Operation Casablanca was so aggressive that he received a letter of protest from then-Secretary of State Madelaine Albright. Thus, Rubin raised eyebrows when, upon entering the private sector, he engineered the deal to purchase a bank he had, as a public official, pursued in the largest money-laundering case of the century. (See the Narco News dossier on Operation Casablanca for disclosed public and press documents that support these opinions).

According to Officer Carman's Complaint, then-Secretary Rubin's Treasury Department - in particular, the Customs Service - was a cesspool of narco-corruption. And Rubin, along with other officials, contributed to that corrupt environment through "negligence" and also by allowing the persecution of honest Whistle Blowers within the agency.

Carman states in his complaint that he is "informed" and believes that "because of the financial incentives at stake, corruption within the Customs Service, at least in San Diego, is rampant."

In terms of the Drug War, the San Diego office of U.S. Customs is one of the most important regional offices, just over the border from Tijuana, home of the Arrellano Felix Brothers organization and a major crossing-point for cocaine and other illicit drugs.

And his complaint, now a public document, states Officer Carman's informed belief that "customs personnel, including high ranking personnel, have accepted bribes and engaged in other unethical and illegal activities, including falsifying reports, deleting suspect information from the Customs Intelligence Reporting Computer Systems, aiding and abetting in the facilitating and importing into the United States undocumented persons and contraband such as narcotics. In one case alone 8,500 pounds of cocaine was involved. In another case the entry into the United States of one hundred and sixty-seven unauthorized persons was facilitated. Other cases involved converting seized monies and tampering with export shipments. High ranking officials discouraged line inspectors from searching suspected trucks, ignoring or destroying intelligence reports, providing preferential treatment to companies with ties to drug trafficking, and providing what agency personnel refer to as 'Bingo Cards' or 'Get out of Jail Free Cards' to drug dealers and other unauthorized persons. Said cards, when presented by the holder, entitle the recipient to 'preferential treatment' at the United States borders."

According to Officer Carman's complaint, then-Secretary Rubin was informed by U.S. Senator Dianne Feinstein (D-California) of specific acts of narco-corruption, supported by video evidence, but that Whistle Blowers like himself in the agency were persecuted under Rubin's watch.

Carman's lawsuit "alleges that the rampant corruption within the Customs Service, at least in San Diego, has been the subject of media attention as well as concerns raised by persons such as United States Senator Diane Feinstein. For example, in April, 1997, CBS '60 Minutes' program ran a story about known Mexican drug smugglers knowingly being permitted to enter into the United States without inspection. The footage demonstrated two tanker trucks owned by California Gas Transport coming across the Otay Mesa Port of Entry entirely free from inspection. Customs' own intelligence reports allegedly indicated at the time that California Gas Transport is connected to members of the Mexican-based Zaragosa Fuentes family who are suspected of heavy narcotics smuggling and money laundering."

"Senator Feinstein wrote to Treasury Secretary Robert Rubin on April 25, 1997," according to the complaint.

Feinstein wrote to Rubin, "Based on the information in Customs' own intelligence report just two months earlier, how is it possible that California Gas Transport could possibly be considered a 'minimum threat?'"

Senator Feinstein, according to the complaint "also brought to the attention of Secretary Rubin that Customs Inspectors refuse to come forward because they 'know what happens to whistle blowers.' The above-described California Gas Transport trucks, which were on at least two occasions the subject of a strong alert by Customs K-9 teams, were ordered 'released' by Customs Supervisor, Arthur D. Gilbert, one of the key persons reported by Plaintiff to Internal Affairs. Subsequently one of the trucks was discovered to contain 8,500 pounds of cocaine."

The lawsuit continues: "The CBS story recounted an incident on October 3, 1990 wherein San Diego Supervisor Gilbert tried everything in his power to prevent a hydro propane tanker carrying four tons of cocaine from being searched, even after a K-9 alert on the tanker. The driver of that tanker was allowed to casually walk back across the border to Mexico."

The current Secretary of Treasury, Paul O'Neill, is named as a defendant in the lawsuit for the actions of Rubin and other predecessors. The lawsuit charges the office of Treasury Secretary with negligence, among other charges, for having presided over a Customs Service where whistleblowers like Carman were persecuted and harrassed for bringing evidence of wrongdoing to their superiors:

"As the head of their individual agencies the Secretary of Treasury and Commissioner of Customs owed a duty to its employees, including Plaintiff, to exercise reasonable care to protect them from unlawful and retaliatory actions taken against them by other employees and supervisors. These Defendants breached that duty owed to Plaintiff by not exercising diligent care to insure such actions did not occur. As a direct and proximate result of that breach of duty Plaintiff was retaliated against and wrongfully terminated for which these Defendants are liable. As a direct and proximate result of these Defendants negligence Plaintiff has suffered, emotional distress, loss of enjoyment of life, loss of employment, loss of salary and benefits and loss of retirement benefits."

$250,000 Per Truck

The lawsuit notes that "News reports indicate that drug cartels have virtually routine payoff amounts for cars, trucks and tankers carrying cocaine across the United States borders, ranging from $50,000 for a car to $250,000 for an 18-wheeler. Payoffs for leaking Customs air surveillance schedules likewise generate enormous amounts of money paid as bribes to federal officials who knowingly and unlawfully accept said payments."

And yet, according to Carman's complaint, honest Customs Agents who tried to expose this rampant corruption within the Treasury Department's Customs Service were ignored. Worse, they were harrassed and persecuted, both on the job and off.

Officer Carman, in his lawsuit, "alleges that Customs Inspectors who have complained about corruption or unlawful practices are harassed, retaliated against, demoted, transferred, discredited and/or dismissed. Few Inspectors are willing to reveal their names as "whistleblowers" for fear of reprisals against them, all of this in violation of public policy and both state and federal law."

He also "alleges that anyone who stands up and speaks out to identify unlawful conduct in the agency is labeled a troublemaker and his or her statements are dismissed as those of a disgruntled employee. Plaintiff was specifically ordered by his superiors not to speak with other 'whistleblowers'," and that "the agency has intentionally failed and refuses and continues to fail and refuse to take the affirmative steps necessary to properly investigate and prosecute the offenders."

Instead of combatting the alleged corruption, Rubin's Treasury Department and Customs Service engaged, according to the lawsuit, in a cover-up. Carman "alleges that Customs lacks an independent investigative unit to investigate wrongdoing within the agency. Plaintiff's complaints to Internal Affairs fell on deaf ears and the only significant action taken by the department was to conduct 'damage control' by 'plausible deniability' and to cause the termination of employment and discredit employees, and specifically the Plaintiff, who address this corruption."

"Since Plaintiff began reporting to his superiors in Washington his beliefs about corruption in San Diego, Plaintiff has been repeatedly retaliated against," Officer Carman, the plaintiff, states in his lawsuit. "While he was an employee he was refused promotions, to which he was entitled, has had his performance evaluations changed, has had test scores reduced by those very persons who ordered him to attend an Import Academy, and was further told that he was required to 'pass' the training provided there. In further retaliation Plaintiff was stripped of his gun and badge and told not to use the Treasury Enforcement Computer System (TECS). Because Plaintiff believed that he was being 'set up' for failure and based on his physician's directive, Plaintiff declined to attend the Import Specialist Academy."

At that point, Officer Carman took his case to the media, which is a Whistle Blower activity specifically protected by United States and California state law: "On June 19, 1997, after Plaintiff gave several radio interviews about the corruption at Customs, and having, on June 5, 1997, reported Port Director Joyce Henderson and Branch Chief Rosa Hernandez to Commissioner Weise for 'serious mismanagement, and/or illegal conduct,' Plaintiff was wrongfully terminated, in violation of California's public policy, and in violation of the implied covenant of good faith and fair dealing, on the pretext that he failed to attend the Import Specialist Academy training which had been previously ordered. This also followed a demand made on June 6, 1997 by Stephanie Castro, on behalf of Port Director Henderson, to divulge the contents of Plaintiff's confidential report to Commissioner Weise in Washington D.C. which was sent the day prior on June 5, 1997. Plaintiff declined to divulge the protected material, notwithstanding significant and unwarranted pressure to do so."

An Honest Officer Endangered

One of the defendants cited in the lawsuit is Customs Official Rudy Camacho of the San Diego office, against whom Carman seeks "exemplary damages" for his alleged behavior.

Officer Carman "alleges that Rudy Camacho in particular desired to terminate Plaintiff because of negative publicity about Customs and Mr. Camacho in particular... that Rudy Camacho acted with malice and oppression and with an intent to harm and retaliate against Plaintiff for personal reasons as well as to conceal from the public a host of mismanagement errors and corruption within the San Diego Customs District.

Camacho, accuses Officer Carman, caused a situation in which "concerned employees of the Department of the Treasury who want nothing more than to protect their country and to enforce the laws of the United States with the integrity and honesty which the position requires."

And, Carman alleges that Camacho's persecution and harrassment of him continued even after he left the Customs Service: "Camacho and others made a concerted and intentional effort to prohibit Plaintiff from securing a concealed weapons permit which was necessary to Plaintiff's successfully pursuing his livelihood of becoming a California Licensed Private Investigator. Plaintiff's law enforcement and investigative background made this a logical choice for his future career and due to the inherent risks in that occupation it was necessary for Plaintiff to carry a concealed weapon not only for his own protection but for the protection of his clients as well."

In 1998, when the now ex-Customs Agent John Carman applied for a concealed weapon permit from the State of California, according to the complaint, "he was told that he qualified and all that was needed for him to secure that license was copies of his personnel files from United States Customs relating to his employment which they had requested." Carman "continued to inquire of the state as to when his permit would be granted but he continuously received the same response that their request to Customs has not been responded to and without those files he could not get a permit. Upon information and belief, Plaintiff alleges that over the past three years Defendants Camacho and others have deliberately refused to supply California with the requested records as a further act of unlawful retaliation against Plaintiff designed to intentionally deprive him of his constitutional rights."

Illegal Search and Seizure

While the Customs Service and Treasury Department, according to Carman's complaint, allow tons of illegal cocaine to pass into U.S. borders and turn a blind-eye to the rampant acceptance of bribes by agency officials from narco-traffickers in exchange for allowing the cocaine to enter, Customs officials, according to Carman's lawsuit, instead busied themselves with a search and harrassment against Carman that was later deemed by a judge to have been illegal.

The complaint "alleges that, on or about June 16, 1999 United States Customs Officers without basis and/or probable cause, retaliated further against Plaintiff by ordering and directing state law enforcement officers of the La Mesa Police Department, Defendants herein, to stop Plaintiff's vehicle and detain and search him and his vehicle which they did without probable cause violating Plaintiff's right under the Fourth, Fifth, and Fourteenth Amendments of the United States Constitution."

The complaint names some names and seeks those of others (John and Jane Does) from the US Customs Service and the local police department of La Mesa, California, who, according to state police testimony, collaborated with US Customs officials in the illegal 1999 search against Carman. "Defendant's Alicia Fuentes, Jeanne M. Daumen, Tom P. Rybczyk, Russell F. Hixon, David C. Wales and at the direction of Rudy M. Camacho, and Does 1 through 15, all agents of the U.S. Customs Service, and then Customs Commissioner Raymond W. Kelly, conspired with David Bond, T. Burgess, B. Stoney, M. Chambers, and Doe 1 an unknown Police Officer of the City of La Mesa and Does 16 through 20, to violate the Plaintiff's rights protected by the United States Constitution to be free from unreasonable search and seizure and malicious criminal prosecution."

In a bizarre tale of the use of law enforcement to harrass its critics that should shock United States citizens, Carman's complaint states: "The Defendant Police Officers, David Bond, T. Burgess, B. Stoney, M. Chambers, and Doe 1, an unknown Police Officer of the City of La Mesa, without probable cause, detained and subjected the Plaintiff to harassment and arrest, at the direction of Defendants Alicia Fuentes, Jeanne M. Daumen, Tom P. Rybczyk, Russell F. Hixon, David C.Wales and at the direction of Rudy M. Camacho, all agents of the U.S. Customs Service and Raymond W. Kelly, as retaliation and intimidation by federal officers and state officers against the Public Policy of protecting 'Whistleblowers'. Each conspired with the other to violate the rights of the Plaintiff through force and fear under the color of law."

Carman was prosecuted, and "prevailed in the motion stage wherein a San Diego County Superior Court Judge found that there was no probable cause for the stopping of the Plaintiff. At that hearing the state officer admitted that the 'pretextual stop' was directed by Defendants, U.S. Customs Officers. United States Customs Officers, together with state law enforcement officers, identified herein violated the Plaintiff's right to be free from harassment, and illegal use of Law Enforcement tactics to threaten, and intimidate and harass Plaintiff."

What's more is that some of the defendants named in the lawsuit - the state of California police officers - "admitted that they were coaxed and directed by the Defendants Alicia Fuentes, Jeanne M. Daumen, Tom P. Rybczyk, Russell F. Hixon, David C. Wales and at the direction of Rudy M. Camacho, and Does 1 through 15, and agents of the U.S. Customs Service and Raymond W. Kelly to violate the rights of the Plaintiff under the color of law, because of the 'Whistleblower' status and to harass the Plaintiff and intimidate and threaten him under the color of law."

Customs Service on Trial

Thus, an historic lawsuit filed by a courageous former US Customs Agent, John Carman, now goes to Court on the West Coast as the Drug-War-on-Trial case of Banamex vs. Narco News is underway on the East Coast.

And in these court cases, Citigroup director Robert Rubin's activities, in and outside of government, are now at issue.

Here in the Narco Newsroom we'll be closely following the progress of Officer Carman's lawsuit, in particular its discovery process (which, being in federal court, may move faster than the backlogged New York State Court system where Banamex chose to bring its case for maximum delay of speedy justice), for information useful in the Drug War on Trial Case, particularly regarding our plan to subpoena of Citigroup director and former Treasury Secretary Robert Rubin.

John Carman, the former 15-year veteran US Customs Agent, has launched a website for Whistle Blowers in the Customs Service, Treasury Department and other agencies:

The Narco News Bulletin congratulates Officer Carman and his legal counsel for standing up in the face of injustice and official impunity and complicity with the narco-traffickers.

The Carman v. Customs lawsuit will now become the point of an important spear that strikes at the heart of United States drug policy: While U.S. officials try to blame Latin America, the real drug bosses are in Washington, in "The Potomac Cartel." And until the prohibition policy that causes the rampant corruption inside the U.S. government is repealed, no honest citizen or law enforcement officer is safe.

John Carman today fights to restore that safety for all citizens. He has our solidarity and support.

From somewhere in a country called América,

Al Giordano


The Narco News Bulletin

Read the Carman v. Customs Lawsuit

Coming Soon to an América Near You:

The Narco News Fall Offensive