CIA Clears Self of Drug Charge

by David Corn

The Nation magazine, March 8, 1998


For the covert gang, the headlines were refreshing. "C.I.A. Report Concludes Agency Knew Nothing of Drug Dealers' Ties to Rebels," The New York Times announced. "C.I.A. Finds No Significant Drug-Contra Tie," the Los Angeles Times proclaimed. These and similar media declarations were prompted by the January release of the agency's internal review of allegations, published in a 1996 San Jose Mercury News series, that a California narcotics ring had funneled millions of dollars in drug profits to the Nicaraguan contrast The series, written by Gary Webb, suggested that this one drug outfit was instrumental to the birth of the crack cocaine epidemic. The allegations ignited an uproar. Members of Congress and black talk-radio hosts demanded investigations. Now the inquiring is done, or nearly so. Headlines aside, while this 149-page C.I.A. report dismisses the most explosive portions of Webb's problematic series, it also provides material showing that contras and drug dealers did hobnob together, and that the contras ' patrons in the U.S. government knew that and did little about it.

It is hardly shocking that the C.I.A.'s Inspector General found no evidence that the agency was connected to Danilo Blandon and Norwin Meneses, the Nicaraguan drug dealers featured in the Mercury News "Dark Alliance" series. (The articles had implied such a connection without offering proof, which the paper later admitted in a mea culpa.) The C.I.A. reports that it located no information to support the charge that Blandon and Meneses peddled drugs to raise money for the contras; nor that the C.I.A. had interfered with the prosecution of drug-related cases against them. Then, too, the agency states that "Freeway" Ricky Ross, a Los Angeles drug chieftain who figured prominently in the newspaper series, told its investigators that he'd been a crack peddler years before hooking up with Blandon, and Blandon confirmed It. So, case closed? Not at all.

The C.I.A. promises a second report, on other allegations of contra drug-trafficking- and there are contra-drug links more substantial than those described in the Mercury News series. (Remember Manuel Noriega's offer to bump off Sandinistas if the White House would ~ clean up his coke-tainted reputation? Or drug O runners winning U.S. contracts to haul supplies ~, to the contras?) But even this first self-absolving ^_ ~ volume offers evidence that there was a symbiotic relationship between drug dealers and the contras, that the C.I.A. ignored reports of contra-drug involvement and that the agency and the Justice Department colluded in limiting a prosecution that threatened to expose one contra-drug link.

The report quotes Blandon as claiming he had no tie to the C.I.A. and that he never sold cocaine on direct behalf of the contras. But he did make other interesting statements: for example, that he supplied roughly $40,000 to the contras and that his partner Meneses gave a similar amount. In 1982, Blandon notes, he met with contra leaders in Honduras. Afterward, when he was detained at the Tegucigalpa airport by Honduran officials who discovered that he was carrying $100,000, his contra friends interceded, winning his release and the return of the cash (which was drug money). That is, the contras helped-wittingly or not- a drug dealer escape the authorities because he was a supporter. That same year, according to Blandon, the contras' military chief, Enrique Bermudez, asked him and Meneses to raise money for them, saying, "The ends justify the means." Blandon maintains that Bermudez did not know that he and Meneses were cocaine smugglers. But, as the C.I.A.'s own cables noted, Meneses had been the narcotics kingpin of Nicaragua when Bermudez was a high-level government official, so Bermudez could be expected to know of Meneses' "means." Blandon also says he attended a summit of contra leaders in Florida in 1983 and financially assisted contra leader Eden Pastora (who, by the way, acknowledges having received significant help from another narcotics dealer).

All this is not proof of a contra-cocaine grand conspiracy. But it provides further reason to conclude that the contra war and the drug trade existed in all-too-close proximity to each other.

The C.I.A. report shows that the agency was hardly vigilant in probing reports of contra-drug links. One 1986 C.I.A. cable revealed that contra leader Fernando Chamorro was asked by Meneses to "move drugs to the U.S." How did Chamorro deal with this request? Did the C.I.A. pursue this lead? The report says nothing further about it. In a similar instance, a 1982 C.I.A. cable reported that "there are indications of links between [a U.S. religious organization] and two Nicaraguan counter-revolutionary groups.... These links involve an exchange in [the United States] of narcotics for arms." The cable noted that representatives of the major contra groups might have been participating in the scheme. In response, C.I.A. headquarters, as reported in the review, initially decided not to dig into the matter because U.S. citizens might be involved. Then it decided to ask one of its foreign stations to find out if such a plot was under way. The station replied that contra leaders had recently traveled to the United States for meetings, but that it had no further information. By all appearances, the agency did little to ascertain the truth of the arms-for-drugs charge. And there is no evidence that in these instances the C.I.A. turned over information to the Drug Enforcement Administration for further investigation.

The most damning portion of the C.I.A. report concerns the "Frogman" case, a contra-drug story broken in 1986 by the San Francisco Examiner and reprised by Gary Webb. In 1983 the Feds in San Francisco arrested fifty people and seized 430 pounds of cocaine. Two of the principals-Julio Zavala and Carlos Cabezas were Nicaraguans who claimed their drug trafficking was linked to the contrast The Inspector General's review found no evidence of this. But the most intriguing aspect of this episode involved about $37,000 seized at Zavala's safehouse by the F.B.I. Zavala said the cash belonged to the contras, and he produced letters written by two contra leaders to support his claim. The U.S. Attorney's office was left with the problem of what to do about the money. In 1984 U.S. Attorney Joseph Russoniello decided that federal officers would travel to Costa Rica and take depositions from the two contra leaders.

But the C.l.A., according to an agency cable, worried that the relationship between Zavala and one of the contra leaders "could prove most damaging" and that a "case could be made that [C.I.A.] funds are being diverted by [C.I.A.] assets into the drug trade." So the agency made a "discreet approach" to the Justice Department, the cable reported. Subsequently, the depositions were canceled and "at [the C.I.A.'s] request the U.S. Attorney...agreed to return the money to Zavala." To recap: The C.I.A. intervened in a law enforcement matter to smother embarrassing exposure of a contra-drug link. Suspiciously, the C.I.A. says it had a hard time determining precisely who in the agency orchestrated the "discreet approach." And-almost as an aside-the report notes that when Senator John Kerry's subcommittee requested information on the Frogman case in 1986, the C.I.A. refused to provide it and succeeded in obstructing a major Congressional investigation.

The C.I.A. study is troubling. Obvious questions go unanswered. In a matter-of-fact tone, it notes that several former senior C.I.A. officers responsible for the contra operation declined to cooperate with the Inspector General's review. The report takes comfort in the finding that Blandon's and Meneses' drug transactions were not "motivated by any commitment to support the Contra cause." But motivation is not the key issue. It appears that the Mercury News did go too far, and that Blandon and Meneses did not sell millions in drugs specifically for the contrast The implication of the series-that the C.I.A. and the contras bore responsibility for the crack epidemic-was over the top. But the real story, as confirmed by the C.I.A. report, is that the cocaine business and the secret war in Nicaragua intersected repeatedly. Not in as cinematic a fashion as Webb portrayed it, but in more subtle and routine ways. The question for the C.I.A. is, What was done about that?

The next C.I.A. volume is supposed to consider this wider topic. But it too will have to be read carefully. Unfortunately, the C.I.A. has the review field to itself. The Justice Department was scheduled to release a report of its own on this subject in mid-December. Then it suddenly pulled the study, claiming that the entire report could somehow compromise an ongoing criminal matter. The Justice review was expected to look beyond the Mercury News allegations and examine the possibility that prosecution of drug cases in the eighties had been compromised because of the Reagan Administration's support of the contrast

On a new Web site, the C.I.A. proclaims that "an informed citizenry [is] vital to a democratic society." Indeed. There are enough substantiations of a contra-drug overlap to support public suspicion that the U.S. government perverted priorities in pursuit of the contra war. The agency and Justice owe the citizenry a full explanation. Thus, they should accede to a request from the National Security Archive, a private nonprofit research group, that they release the tens of thousands of documents gathered for their reviews. The C.I.A. may judge itself innocent, but the public should be able to examine the evidence.


CIA and Third World