AFTER CASABLANCA

TIME: Why do you think the U.S. kept Mexico in the dark about Operation Casablanca?

Gurría: I really don't know. We've been in bilateral discussions about drug-money laundering for three or four years now, and we've been working on some 260 joint cases since then. We helped in some of the first cross-border cases, which resulted in indictments in the U.S. And we've been making unprecedented antilaundering progress on both the legislative and enforcement sides here. As for the news that U.S. agents were working secretly in Mexican territory, we're demanding a detailed accounting from U.S. authorities.

TIME: Should the Mexican government and Mexican banks be embarrassed by these arrests?

Gurría: This operation was aimed against money laundering, not against the Mexican financial system. Back when this began, Mexico didn't have a focused antilaundering regime, which may have been one motivation for the operation. Now, as of April 1, we have regulations that make it much more difficult to pull this kind of money laundering off--a structure that is an art form, with computer software developed in conjunction with the U.S. Treasury. Our banks are much more aware now. The U.S. aided the recovery of the Mexican economy in 1995 in a huge way, so I don't think it's logical that they would overtly weaken our financial system now.

TIME: What specific progress is Mexico making at fighting money laundering?

Gurría: Now we have laws that, for example, make jail sentences 50% stronger if you're a government servant or bank worker and you're convicted of money laundering.

TIME: Why do you think the U.S. law-enforcement authorities went after only low-level Mexican bankers?

Gurría: I think it's because those were the only people who were lured into the sting. After such a detailed, three-year investigation, the result is two dozen low-level bankers and a quantity of laundered money that is relatively modest in relation to a day's bank transactions in Mexico. I think the investigation went as far as the U.S. could take it.

TIME: The banks have not exactly been a point of national pride here in the '90s. What do you want to do to reform the system?

Gurría: We advocate cleaning house, and that's being done. But when you do that, when you put the rubbish out, all the neighbors say, "Look at the mess they had over there." You do this at the cost of a few headlines. We do feel very threatened by money laundering. We have to shape up--the world has to shape up--and like the rest of the world, we're going to have to learn from experience. This kind of crime is the challenge of the 21st century, and we're creating a new culture of oversight here--pushing legislation for more autonomy for our federal banking commission, for example. I hope this new incident creates a sense of urgency in Congress to pass these measures.

TIME: Did Operation Casablanca do you a favor in terms of heightening awareness of that sense of urgency?

Gurría: The way this investigation was structured and announced in such a public manner obviously helps to get the word across, especially as it coincides with our own new regulations going into force. I think the message is now loud and clear.