The Citicorp/Travelers Group merger ran into congressional criticism Thursday as Rep. Maxine Waters urged regulators to block the deal until money laundering charges against Citibank are settled.

"No merger should go forward unless Citibank is completely exonerated of these charges," the California Democrat said at a press conference. "If any of these devastating allegations lead to criminal conviction, Citicorp never should be allowed to merge or acquire again."

The Justice Department is investigating Citibank's alleged involvement in drug money laundering by Raul Salinas, the jailed brother of former Mexican President Carlos Salinas. Raul Salinas is a former Citibank private banking client.

Citicorp officials Thursday said that there was nothing improper in the bank's relationship with Mr. Salinas. "We have had it thoroughly investigated and find no evidence of wrongdoing," said Citicorp spokesman John M. Morris.

Mr. Morris denied Rep. Waters' charges that the bank has shirked its duties to prevent money laundering. "We take seriously our responsibilities to combat money laundering and endeavor to live up to the spirit and letter of the law and regulations," he said.

At her press conference, Rep. Waters acknowledged that money laundering allegations are not among the issues that the Justice Department or the Federal Reserve Board considers when reviewing merger applications. But she added, "We cannot sit around and watch as our banks become involved in laundering of drug money."

Rep. Waters said she will introduce legislation that would prevent the federal government from reviewing merger requests by institutions convicted of, or under investigation for, money laundering. She also vowed to push House members to include her proposal in financial reform legislation scheduled for a vote in May.

As megamergers create financial institutions with vast global networks, the need for tougher anti-money laundering laws is increasingly urgent, she said. "The challenges of preventing money laundering only will become greater."

Rep. Waters is a member of the House Banking Committee and chairwoman of the Congressional Black Caucus. Her congressional district includes South- Central Los Angeles, a low-income community plagued by drug-related violence.

"The illegal drug trade would come to a screeching halt tomorrow without the ability to launder drug profits through financial institutions worldwide," she said.

She said there is a "disturbing pattern" of drug traffickers using private banking services at Citibank and other large financial institutions to move large amounts of money secretly and efficiently.

"Citibank's private banking system appears to be favored by these global criminals because of its 'don't ask, don't tell' policy toward the wealthiest, and sometimes dirtiest, clients," she said.

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