The Consortium

Contra-Cocaine: Bad to Worse

By Robert Parry

While seeking to clear itself of drug-trafficking guilt, the CIA has acknowledged that cocaine traffickers played a significant early role in the Nicaraguan contra movement and that the CIA intervened to block an image-threatening 1984 federal inquiry into a cocaine ring with suspected links to the contras.

The CIA also admitted that it received intelligence from a law-enforcement agency as early as 1982 that a U.S. religious group was collaborating with the contras in a guns-for-drugs operation. But the CIA turned a blind eye toward the allegations, claiming that to do otherwise would violate the civil liberties of the religious group whose identity remains secret.

The troubling admissions are buried deep in a Jan. 29 report whose main purpose is to bolster the spy agency's denunciation of a 1996 series by Gary Webb, then a reporter for the San Jose Mercury News. That series linked CIA-backed contra operatives to the explosion of the nation's crack cocaine epidemic in the early 1980s.

In the report's volume one, entitled "The California Story," CIA Inspector General Frederick P. Hitz reasserts CIA contentions that key figures from the crack ring did not have direct ties to the CIA and that their donations to the contra cause were relatively small. The report also denies that the CIA took any steps to protect contra-connected drug traffickers, Danilo Blandon or Norwin Meneses, key figures in Webb's series.

But toward the end of the report, the CIA includes broad admissions that many of Webb's contentions were not only true, but understated the contra-cocaine connection.

For instance, in his interview with the CIA, Blandon gives a detailed -- and surprising -- account about private meetings that he and Meneses had with contra military chief Enrique Bermudez, who worked directly for the CIA and ran the largest contra army known as the FDN.

Prior to the Sandinista revolution in 1979, Meneses had been notorious in Nicaragua as a drug kingpin. But Bermudez still welcomed Meneses and Blandon when they stopped in Honduras in 1982 en route to Bolivia where they planned to arrange a shipment of cocaine.

During that stopover, Bermudez asked for their help "in raising funds and obtaining equipment" as well as procuring weapons, the CIA report states. Blandon repeated his account, cited by Webb in the 1996 series, that Bermudez advised the two drug dealers that when it came to raising money for the contras, "the ends justify the means."

Though Blandon insists that he was not sure what exactly Bermudez and the other contras knew about Meneses's cocaine operations, Blandon goes on to describe how the contras helped them continue on their travels to Bolivia. After meeting with Bermudez, contras escorted Blandon and Meneses to the airport in Tegucigalpa. They were carrying $100,000 in drug proceeds for their Bolivian drug deal, Blandon said.

However, at the airport, Blandon was stopped and arrested by Honduran authorities. His $100,000 was confiscated. But the contra escorts quickly intervened to save the day. They told the Hondurans that Blandon and Meneses were contras -- and demanded that the $100,000 be returned. The Hondurans complied and the two drug dealers were able to continue their trip.

In his interview with the CIA, Blandon sought to minimize the sums of drug money that went into the contra coffers. He estimated the amounts in the tens of thousands of dollars, not millions. But he acknowledged that Meneses was active in the contra support operations in California, playing the role of "personnel recruiter."

In a separate interview with the CIA, Meneses confirmed his recruiting position and added that he also served on an FDN fund-raising committee. But, like Blandon, Meneses downplayed the significance of drug trafficking as a contra funding source. Meneses talked to the CIA from prison in Nicaragua where he's been held since November 1991 when Nicaraguan police arrested him on charges of narcotics trafficking.

At the prison, the CIA also interviewed one of Meneses's co-conspirators, Enrique Miranda. In that interview, Miranda maintained that Meneses was more deeply involved in contra drugs than he was now letting on.

Miranda said Meneses had told him that Salvadoran military aircraft would transport arms from the United States to the contras and then return with drugs to an airfield near Ft. Worth, Texas. Miranda said he personally witnessed one such shipment to the Ft. Worth area, where maintenance workers gave the drugs to Meneses's people who then drove the contraband off in vans. Miranda recalled Meneses saying that he did not stop selling drugs for the contras until 1985.

The CIA received more corroboration about Meneses's contra-cocaine work from Renato Pena Cabrera, another convicted drug trafficker associated with Meneses. Pena claimed that he participated in contra-related activities in San Francisco from 1982-84 while serving simultaneously as Meneses's drug buyer in Los Angeles.

"Pena says that a Colombian associate of Meneses's told Pena in 'general' terms that portions of the proceeds from the sale of the cocaine Pena brought to San Francisco were going to the contras," the CIA report states.

Mystery Drug Group

Another startling disclosure in the CIA report appears in an Oct. 22, 1982, cable from the office of the CIA's Directorate of Operations which receives information from U.S. law enforcement agencies. "There are indications of links between [a U.S. religious organization] and two Nicaraguan counter-revolutionary groups," the cable read. "These links involve an exchange in [the United States] of narcotics for arms." The cable added that the participants were planning a meeting in Costa Rica for such a deal.

Initially, when the report arrived, senior CIA officials were interested. On Oct. 27, CIA headquarters asked for more information. The unnamed agency expanded on its report by telling the CIA that representatives of the FDN and another contra force, the UDN, would be meeting with several unidentified U.S. citizens.

But then, the CIA reversed itself, deciding that it wanted no more information on the grounds that U.S. citizens were involved. "In light of the apparent participation of U.S. persons throughout, agree you should not pursue the matter further," headquarters wrote on Nov. 3, 1982.

Two weeks later, CIA headquarters mentioned the meeting again, however. CIA officials thought it might be necessary to knock down the allegations of a guns-for-drugs deal as "misinformation." The CIA's Latin American Division responded on Nov. 18, 1982, reporting that several contra officials had gone to San Francisco for meetings with supporters.

But no additional information about the scheme was found in CIA files. The CIA inspector general conducted one follow-up interview, with drug trafficker Pena. He stated that the U.S. religious organization was "an FDN political ally that provided only humanitarian aid to Nicaraguan refugees and logistical support for contra-related rallies, such as printing services and portable stages." The name of the religious organization was withheld in the publicly released version of the CIA's report.

Rev. Sun Myung Moon's religious-political groups, some based in the United States, were extremely active supporting the contras in the early 1980s. Moon's organization also had close ties to the so-called "cocaine coup" government of Bolivia. In the mid-to-late 1980s, Moon's Washington Times newspaper led the attack on investigators examining contra-drug allegations.

Given the Bolivian connection to the Meneses drug operation in the same time period, the possibility of a Moon link to the allegations might add credibility to the charges of a Bolvian-contra cocaine pipeline. But other Religious Right groups also were collaborating with the contras at that time, and it could not be ascertained if the CIA's reference was to a Moon organization.

Frogman Case

The CIA report responds touchily to another case where the intelligence agency discouraged a deeper probe into contra-connected drug trafficking: the so-called Frogman Case. In that case, swimmers in wet suits were caught on Jan. 17, 1983, bringing 430 pounds of cocaine ashore near San Francisco. Eventually, 50 individuals, including many Nicaraguans, were arrested.

The case quickly became a potential embarrassment to the CIA when a contra political operative in Costa Rica, named Francisco Aviles Saenz, wrote to the federal court in San Francisco and argued that $36,800 seized in the case belonged to the contras. Aviles wanted the money back.

The new CIA report indicates that CIA officials in Central America fretted about a follow-up plan by Frogman Case lawyers to depose Aviles and other Nicaraguans in Costa Rica. A July 30, 1984, cable from the Latin American Division expressed "concern that this kind of uncoordinated activity [i.e., the AUSA (assistant U.S. attorney) and FBI visit and depositions] could have serious implications for anti-Sandinista activities in Costa Rica and elsewhere."

The CIA's lawyers next contacted the Justice Department and arranged for the Costa Rican depositions to be cancelled. "There are sufficient factual details which would cause certain damage to our image and program in Central America," CIA assistant general counsel Lee S. Strickland wrote in an Aug. 22, 1984, note. Without further ado, the $36,800 was returned to the contras.

On Aug. 24, 1984, CIA headquarters explained to the Latin American Division that "in essence the United States Attorney could never disprove the defendant's allegation that his was [a contra support group] or [CIA] money. ... We can only guess at what other testimony may have been forthcoming. As matter now stands, [CIA] equities are fully protected, but [CIA's Office of General Counsel] will continue to monitor the prosecution closely so that any further disclosures or allegations by defendant or his confidants can be deflected."

When word of the returned contra money surfaced in the San Francisco Examiner on March 16, 1986, the Reagan administration was in the midst of a furious political battle to convince Congress to restore CIA funding for the contra war. The last thing the White House wanted was more evidence of contra-connected drug trafficking.

Within days of the newspaper story, San Francisco U.S. Attorney Joseph Russoniello stepped forward as point man for the counter-attack. In a harsh letter to the newspaper, Russoniello insisted that the return of the money was simply a budgetary decision and "had nothing to do with any claim that the funds came from the contras or belonged to the contras. ... No 'higher ups' were involved, as Congresswoman [Barbara] Boxer wrongfully surmises."

It is now clear that Russoniello's protest does not square with the documentary record as compiled by the CIA's inspector general.

Not the Whole Truth

Still, the CIA's executive summary and its sweeping dismissal of Webb's series seem as disingenuous as Russoniello's letter. While the CIA touts its finding of no CIA relationship with the key cocaine traffickers, the fine print tells a very different story.

Indeed, the actual records reveal a far more disturbing picture, with the contra military commander, Bermudez, in close contact with a notorious drug lord, Meneses. But Bermudez could not be questioned, since he died in a mysterious shooting in Managua after the contra war ended.

The CIA also is working on a second volume of its contra-cocaine report, one that will examine even broader questions of what the CIA knew about the associations between its contra clients and the cocaine cartels. It is unclear when volume two will be made public.

But the consequences of the CIA's over-stated early denials and the mainstream media's ready acceptance of the official story were devastating to Webb. Under pressure from major media outlets and conservative journalism reviews, Webb's editors backed away from the series and publicly joined in criticizing their reporter.

Webb was yanked off the story and was reassigned to a suburban bureau in a move widely seen as a demotion. In December, the CIA leaked its findings while still withholding its actual report. At about the same time, Webb agreed to resign from the Mercury News. He is now out of daily journalism and working on a book. ~

(c) Copyright 1998

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