Though Jacobs's name is on the lawsuit, it is Carlos Hank Rhon who is the unseen player behind the legal machinations. Carlos Hank's company, Incus, has controlled 70 percent of the shares in Laredo, and it is Hank's name that surfaces most prominently in the White Tiger and related stories. Jacobs's suit was filed a week before the settlement of a longstanding Federal Reserve Board civil complaint against Hank and Incus accusing him of using the names of relatives and associates to cover up his financial interest in Laredo. The settlement does not require Hank to admit guilt, but he is required to turn over his controlling shares in the bank to an independent trust. And he agreed to pay $40 million in penalties--the second-biggest fine in the Federal Reserve's history.

That was not Hank's first run-in with the Fed. In the mid-1990s, as reports similar to those later contained in White Tiger began surfacing in Mexico and the United States, the Fed launched an investigation into Laredo's bid to purchase the Mercantile Bank of Brownsville, Texas. After a lengthy investigation Laredo withdrew its bid.

Jacobs's suit against the NDIC followed, by less than a year, a legal blitzkrieg that transformed the life of a mild-mannered political scientist named Donald Schulz. Currently chairman of the political science department at Cleveland State University, Schulz worked for eight years as a specialist on Latin America and national security for the Strategic Studies Institute at the US Army War College. While researching an academic book exploring the links between the drug trade and Mexican politicians, Schulz interviewed several officials at the National Drug Intelligence Center, one of whom sent him a copy of the draft executive summary of White Tiger containing material on the Hanks. Jacobs filed suit against Schulz in August 2000, accusing him of violations of the RICO act, alleging that he was involved in an "enterprise...designed to...unlawfully acquire, use and disseminate top secret, predecisional, law enforcement sensitive information...to the direct detriment of plaintiffs," that the assertions in White Tiger constituted defamation and that release of the draft report was a violation of Justice Department regulations prohibiting unauthorized release of documents considered "law enforcement sensitive." In essence, Jacobs accuses Schulz of "infiltrating" the NDIC and providing researchers there with "disinformation" that was later leaked to the press in White Tiger.

Laredo's lawyer, Ricardo Cedillo, denies the White Tiger allegations and asserts that they have resulted in deep damage to Jacobs's professional standing. "Gary Jacobs is a border banker with an impeccable reputation," Cedillo said in a telephone interview from his office in San Antonio. "Suddenly, he's not being invited to the seminars and programs on both sides of the border, he's not enjoying the fruits of his labor. He has been on a first-name basis with ambassadors from the United States and Mexico, and now he is [treated like] a pariah after being associated [in White Tiger] with money launderers."

Schulz denies providing any such information or leaking the report. Schulz's trial, when it commences in August 2002, will revolve not necessarily around the truth of such assertions but whether he leaked the report and whether he conspired to interject allegedly defamatory information into the contents of the NDIC report. Schulz says he didn't receive a copy of the summary until late March of 1999 (the court record indicates it was sent to him on March 25), and the Insight magazine story--the first to publish the White Tiger allegations, and running at almost 4,000 words--appeared on March 29. The author of the story, Jamie Dettmer, has declined to name his source, but he insists that it wasn't Schulz. An internal investigation by the Justice Department determined that the source of the leak--and the person who sent the draft summary to Schulz--was the supervisor of the White Tiger project, an NDIC agent named Daniel Huffman; Huffman, a former FBI agent, resigned under pressure last year.

Whoever was the source, the leaks were not popular in Washington, which was on the verge of certifying Mexico as a "partner" in the drug war. In a letter to former Senator Warren Rudman, who as a Hank lobbyist on Capitol Hill had disputed the White Tiger allegations, Attorney General Janet Reno disassociated herself from the findings in the report. Shortly afterward, Schulz's work on Mexico at the War College was terminated, and he was diverted to research on Colombia as the wheels of Plan Colombia were grinding their way through Congress. White Tiger itself was shelved by the NDIC when a new director took over in June 1999.

For Schulz, the lawsuit has had a devastating impact. He has spent, thus far, some $25,000 on legal costs and has received no assistance from either the NDIC or the US Army War College; his appeal to the government for legal help has now been sitting with the Justice Department for more than eight months. If the case goes to trial, Schulz, 59, says it will eat up all his retirement savings. Ironically, Schulz and the NDIC, which tried to distance itself from him after he was sued last year, have now been thrown together as parallel defendants in the legal offensive launched by Jacobs. "It doesn't matter whether I win or lose; I lose," Schulz says. "My time, my costs to lawyers--I will have lost even if I'm vindicated in the end." In June Schulz filed a countersuit for "harassment" against Laredo, asking $1 million in damages and demanding that Carlos Hank Rhon's name be added to Jacobs's complaint as a plaintiff. As the majority owner and chairman of Laredo, and as a primary target of Operation White Tiger, Hank, Schulz argues, dodged behind Jacobs. Keeping Hank's name off the suit, asserts Schulz, protects him from being deposed and keeps information about his business activities in the United States and Mexico from being entered into the legal record.

Cedillo discounts this charge: "Jacobs is no surrogate for Carlos Hank Rhon." Rather, he says, the reason the Mexican mogul has kept his name off the suit is that he "has a thick skin, and didn't want to aggravate Mexican press attention at a time when his father was ill." Indeed, the Mexican press has had a voracious appetite for stories on the Hank family--ranging from serious corruption investigations to salacious tabloid reports, in which they are cast as a symbol of the PRI oligarchy that dominated Mexico for seven decades.

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