Drug Czar Has Ties To Bank Facing Probe

MIAMI - Bob Martinez, the nation's drug czar, owns stock in a Tampa bank that is the target of a money-laundering investigation.

Key Bank and two top employees are under investigation by a task force that includes the Drug Enforcement Administration, the IRS, U.S. Customs and law enforcement agents from Hillsborough and Pinellas counties. The task force is investigating allegations of money laundering and other wrongdoing, law enforcement sources said.

Martinez, who heads the White House Office of National Drug Control Policy, owns Key Bank stock valued at $15,000 to $50,000, according to his latest financial disclosure statement. Martinez served on the bank's board from 1979 to 1986 and still has a savings account there, said Ben Banta, spokesman with the drug office.

Martinez, the former mayor of Tampa and governor of Florida, is traveling in Ecuador and could not be reached for comment, Banta said.

A spokesman with the Hillsborough County state attorney's office said Martinez is not suspected of any wrongdoing.

"I don't believe that's a consideration at this point," said the spokesman, Dennis Pearlman. "It looks like he just happened to be a director a few years back."

Late Friday, federal and state agents arrested Key Bank's chairman, Frank Pupello, and his son, Michael, a vice president at the bank. Agents also searched the offices of the bank's lawyer, Michael Freedman, who is the husband of Tampa Mayor Sandy Freedman.

Agents charged the elder Pupello, 63, with making a false entry in a report to the Federal Deposit Insurance Corp. and delivering false documents to the agency. Those documents involve a contract between the bank and its incoming president, according to a statement by Hillsborough County State Attorney Bill James.

The younger Pupello faces two counts of perjury relating to the investigation.

The new charges are only the latest controversy to hit Key Bank, which has $108.3 million in assets.

While Martinez was on the board, the bank made more than a dozen loans to associates of the late Tampa mobster Santo Trafficante and others later convicted of drug trafficking. Martinez was questioned about those deals during Senate confirmation hearings in 1990. The Senate approved his nomination by a comfortable 88-12.