Grapevine

By PAUL GRAY/

RING AROUND THE MONEY. What country will replace Panama as the world's leading drug-money Laundromat? U.S. law-enforcement agencies are wondering, and so, evidently, are the cocaine cartels. Uruguay, with its stringent bank-secrecy laws, would seem a natural heir. But after Uruguayan officials extradited an accused money launderer and assured the U.S. of further cooperation, cartel financiers began scurrying for alternatives. Among the prospects being watched by investigators: Vanuatu, a Pacific island republic formerly known as the New Hebrides; the Cook Islands, a protectorate of New Zealand; and the island group of Palau, which is about to legalize gambling, a business that generates the kind of cash flow money washers love to swim in.

With reporting by DAVID ELLIS