Progressive Review

SINCE 1964, WASHINGTON'S MOST UNOFFICIAL SOURCE

THE CONTRAS

& COCAINE

Efforts by the media - led by the NY Times, Washington Post, and the Los Angeles Times - to vilify the reporting of the late Gary Webb on the connection between the CIA and the domestic cocaine problem ignores a long history of the CIA getting in bed with the drug dogs and waking up with fleas - from the Mafia in post-World War II Europe to Cambodia to Noriega to Afghanistan. It also ignores (as such media did at the time) congressional inquiries into this issue such as those conducted by a Senate Foreign Relations subcommittee by attorney Jack Blum. Blum differentiates his view from that he saw as being presented by Webb (although what Webb said and what antagonistic media said he said was quickly hopelessly merged), yet in the end he makes a similar case of tremendous - if more indirect - complicity by the CIA


U.S. SENATE SELECT COMMITTEE ON INTELLIGENCE HEARING
ON THE ALLEGATIONS OF CIA TIES TO NICARAGUAN CONTRA REBELS
AND CRACK COCAINE IN AMERICAN CITIES

U.S. SENATOR ARLEN SPECTER (R-PA),CHAIRMAN

OCTOBER 23, 1996

SPECTER: Jack Blum is the former special counsel to the Senate Foreign Relations Subcommittee on Terrorism, Narcotics and International Operations. And that subcommittee conducted an extensive inquiry and filed an extensive report back in 1989. And we're very interested in those findings at that time. And we now turn to you. . .

BLUM: The answer you get to the question you ask depends totally on how you frame the question. If you ask the question, did the CIA sell drugs in the Black neighborhoods of Los Angeles to finance the Contra war, the answer will be a categorical no. The fact of the matter is we found no evidence whatsoever to suggest that there was a targeting of the African-American community. Cocaine in the mid '80s and into the early '90s was a perfect equal opportunity destroyer. . .

The second issue is, did the CIA do the selling of the cocaine? And did the Contras profit? And as far as we were able to determine no member of the staff of the CIA, that is someone on the payroll, as opposed to people they work with was in the cocaine business. And certainly no one on the staff of the CIA as far as we could determine was actively selling the drug.

And then finally the question of, was it used to support the Contras? I will tell you of two meetings that I had with Contra veterans, one in 1986 and one in 1989 at the beginning and the end of my investigation. And they said, our problem was we never had any money. ur leadership stole most of it. They had houses in Miami. They had opportunities to gamble. They had girlfriends. They travelled. And we, who were in the field, and one of the groups that I talked to had men who lost their arms and their eyes and their legs fighting the Sandinistas -- we in the field had none of the benefit. So I submit what went on led to the profit of people in the Contra movement, not to supporting a war that we were trying to advance.

Now having said that we have to go back to what is true. And what is true is the policy makers absolutely closed their eyes to the criminal behavior of our allies and supporters in that war. The policy makers ignored their drug dealing, their stealing, and their human rights violations. The policy makers -- and I stress policy makers -- allowed them to compensate themselves for helping us in that war by remaining silent in the face of their impropriety and by quietly undercutting law enforcement and human rights agencies that might have caused them difficulty.

We knew about the connection between the West Coast cocaine trade and Contras. There was an astonishing case called the Frogman Case. In that case -- I believe it was in that case -- the United States Attorney from San Francisco, a man by the name of Russinello (ph) returned $35,000 of cocaine proceeds voluntarily to the Contras when it had been seized as proceeds of drug trafficking. We found that absolutely astonishing. I know of no other situation where the Justice Department was so forthcoming in returning seized property.

SPECTER: Was that the Justice Department or the district attorney of San Francisco locally?

BLUM: This was the Justice Department, United States attorney.

SPECTER: United States attorney?

BLUM: That's correct. We had a telephone conversation with Mr. Russionello (ph) asking him to provide us documents and access to the people involved in the case. And he shouted at us. He shouted at Senator John Kerry, who chaired the committee. He accused us of being subversive for wanting to go into it.

It should be stressed that the Blandon-Meneses ring was part of a very much larger picture. And to give you an idea of how large that picture was, there was a point where the wholesale price of cocaine on the street in Los Angeles reached $2,500 a kilo. We were talking about cocaine that was available in such quantity they could not find buyers. Twenty-five-hundred dollars a kilo, according to all the experts, is below cost.

And that is a flood of cocaine. And our friend Freeway Ricky was touching only a tiny fraction of what was coming in. We had a definite cocaine epidemic.

Now, you might ask, why did the hearings we run in 1989 and the report we released in -- the hearings we ran in '88 and the report we released in 1989 not get more attention. And the answer is, we were subject to a systematic campaign to discredit everything we did. Every night after there was a public hearing, Justice Department people, administration people would get on the phone call the press and say the witnesses were all liars, they were talking to us to get a better deal. That we were on a political vendetta, that none of it was to be believed, and please don't cover it. The consequence of that was the hearing and the report were given very modest play in the press. . .

Now, I would argue that over a long period of years, covert operations were undertaken -- and it's not only the CIA, obviously, the decision in that area is at a political level, and the CIA would be an implementing agency -- were taken on an ideological basis that verged on religious belief, and with an eye to short-term results and not long-term consequences. Never again should that kind of ideological blindness and short-term vision infect intelligence assessments.

In the 1980s, all of us could count the number of people dead on the streets of America as a result of the drug problem. You couldn't find me a single person in America who had died as a result of an attack by a Sandinista inside our borders. There should have been some ability to notice that distinction and understand the importance of the drug problem and understand that that had to be addressed and, at the very least, that anything you did to solve any other foreign policy problem not make the drug problem worse.

I think that among the other things you should be looking at is a review of the relationship in general between covert operations and criminal organizations. The two go together like love and marriage. . . Criminal organizations are perfect allies in a covert operation. If you sent me out of the country to risk my life for the government, to do something as a spy in a foreign land, I would think criminals would be my best ally. They stay out of reach of the law. They know who the corrupt government officials are, and they have them on the payroll. They'll do anything I want for money. It's a terrific working partnership.

The problem is that they then get empowered by the fact that they work with us. So now they have stature and influence and impact on their country. And if they have influence with politicians and people who come to power, we now have a new powerful criminal enterprise, and we can't always control what they do once we stand down. And unfortunately, we have yet to figure out how to prevent criminal friends from becoming an albatross.

There's a second problem, and that is when you run covert operations, you train people in a lot of skills. Unfortunately, the story of Adam and Eve stays with us. Once you learn something, once you've bitten the apple of knowledge, you can't unlearn it, ever.

And when you teach people how to change their identity, how to hide from the law, how to build bombs, how to assassinate people, they don't forget how to do it. And you wind up, after the covert action is over, with a disposal problem. . .

Now the connection with the drug trade . . . goes way back. We were involved in assisting the Quo Man Tong (ph) armies against Mao Zedong in the 1950s. During that period, we supported people who were in the heroin trade in the mountains of Burma. And those Quo Man Tong (ph) armies helped themselves and financed themselves out of the heroine business.

It turned up again in the Vietnam war, where our allies, the Hmong tribesmen, were in the heroine business. There were many accusations and all kinds of stories about was the CIA dealing heroine? And the answer was, we're not doing it. Probably true. It's our allies, and we have to work with whoever we have to work with. In Afghanistan recently, we've had allies who went into the heroine business big time. It's the largest cash crop in Afghanistan. It's the most important export from the region. . .

[One] man who turned up on our screen very big time [in Latin America] was General Noriega. And, as you'll recall -- press accounts have said it, the government has made this public; so I'm not saying anything that's classified -- Noriega was on our payroll. The accounts we heard were that he was getting paid some $200,000 a year by the United States government. At the time that was going on, virtually everybody who dealt with him knew he was in the drug business. It was an open secret. In fact, it was so open it appeared on the front page of the New York Times in June of 1986. I testified about it in a closed session of the Foreign Relations Committee in 1986.

We have, as the absolute low point of the Contra War, Ollie North having a meeting with General Noriega. And he recorded that meeting in great detail in his notebooks in which he's bargaining with Noriega. Noriega says to him, I've got this terrible public relations problem over drugs. What can you do to help me? Here's what I'll do to help you. I'll assassinate the entire Sandinista leadership. I'll blow up buildings in Managua.

Ollie doesn't call the cops. What Ollie does is he goes back to Poindexter, and Poindexter says, "Gee, that's a little bit extreme. Can't you get 'em to tone it down? Go back and meet with 'em again." Which Ollie does.

When our committee asked the General Accounting Office to do a step-by-step analysis of just who in our government knew that General Noriega was dealing drugs, and when they knew it, and what they did to act on that knowledge, the administration told every agency of the government not to cooperate with GAO, labeled it a national security matter, and swept it into the White House and cloaked it in executive privilege. . .

Our committee subpoenaed Ollie North's notebooks. And the history of those notebooks is quite astonishing. Not many people realize this, but the Senate never got a clean copy of those notebooks. North's lawyers were permitted to expurgate sections of the notebooks based on "relevance." Our committee subpoenaed those notebooks. And we engaged in a ten-month battle to get them. And ultimately the investigation ended, the subcommittee's mandate ended, we never got them. . .

There was a later effort by the National Security Archive, under the Freedom of Information Act, to get further declassification and release of the notebooks. They succeeded to some degree. The notebooks in their entirety are still not public. . .

Now, the problem of General Noriega and Ollie North's notebooks and what was in them is only [one] of a number of problems related to this war and related to drug trafficking that we stumbled into.

We had problems in Haiti, where friends of ours, that is, intelligence sources, in the Haitian military had turned their facilities, their ranches and their farms over to drug traffickers. Instead of putting pressure on that rotten leadership of the Haitian military, we defended them. We held our noses. We looked the other way. And they and their criminal friends distributed, through a variety of networks, cocaine in the United States, in Miami, in Philadelphia, in New York, in parts of Pennsylvania.

Honduras was another country that was key for the Contras. Honduras was the base of Contra operations. Most of the Contra supplies came through Honduras. We wanted to do nothing to embarrass the Honduran military. Ramon Matabalasteros (ph), a member of the gang that was involved in the Camarena murder, went to Honduras and found refuge there. He was walking in the streets of Tegucigalpa, openly and publicly.

The response of the United States government was to close the DEA office in Honduras and move the agents stationed there to Guatemala. We took testimony from that DEA agent. He said it made no sense. The drug trafficking was going on in Honduras. And the Honduran military were at the center of it. . .

We also became aware of deep connections between the law enforcement community and the intelligence community. I personally repeatedly heard from prosecutors and people in the law enforcement world that CIA agents were required to sit in on the debriefing of various people who were being questioned about the drug trade. They were required to be present when witnesses were being prepped for certain drug trials. Various -- At various times the intelligence community inserted itself in that legal process. I believe that that was an impropriety, that that should not have occurred. . .

SPECTER: Let me ask you on a question relevant here, did you ever see any of that interference by U.S. intelligence, CIA or otherwise, of any prosecutions against cocaine in Los Angeles?

BLUM: We did not focus on Los Angeles and Los Angeles prosecutions. I can tell you there were cases in Miami. And there were other cases in other parts of the country. . .

When we got into this area, we confronted an absolute stone wall. Bill Weld (ph), who was then the head of the criminal division put a very serious block on any effort we made to get information. There were stalls; there were refusals to talk to us, refusals to turn over data. An assistant U.S. attorney who gave us some information was reprimanded and disciplined, even though it had nothing to do with the case in a confidential way, who simply told. . .

We had a series of situations where Justice Department people were told that if they told us anything about what was going on they would be subject to very severe discipline. I got a lot of back door information and then I was told I could never use it because the careers of the people involved would be seriously compromised. . .

We ran into another procedure which was extremely troubling. There was a system for stopping customs inspections of inbound and outbound aircraft from Miami and from other airports in Florida. People would call the customs office and say, stand down, flights are going out, flights are coming in.

We tried to find out more about that and were privately told, again by customs people who said, "Please don't say anything," but the whole thing was terribly informal and there was no real way of determining the legitimacy of the request to stand down or the legitimacy of what was on the plane and going out to people in the field. That I found to be terribly troubling, and it's a matter that you all should be looking at very carefully.

There was a flip side to this drug problem as well. One of the favored techniques of various people in this operation was, whenever there was someone they didn't like, they would label him a drug trafficker. . .

If you empower criminals because empowering them happens to be helpful at the time, the criminals are sure to turn on you next. And the people who plan covert operations should know that and should be held accountable for not telling their bosses if in fact they're dealing with this kind of guy and they do come back and bite them. The most important loss that we had as a result of the covert war in Central America was the loss of public trust in the honesty and integrity of the people who run America's clandestine operations. The measure of that is how ready everyone is to believe Freeway Ricky and his fable about being the arm of the CIA in selling crack in Los Angeles. Ricky deserves life in prison for what he did to his people in his community.

The CIA didn't make him do it. The profits from his deal certainly didn't go to help the Contras. But that does not mean that there is not a need for a very powerfully done investigation and a backwards look at the entire forty year history of this problem. . .

The reaction of the people who were running the covert operation as best as we could determine was: Look, we've been sent here to Central America to do a job. Our job is to win this war against the Sandinistas and to change the political climate here. We're not in the law enforcement business. We can't be playing cops with the people who are working with us. If there's drug trafficking, let the DEA deal with it. But we have to do what we have to do, and please don't let that other mission interfere with what we have, because by God it's difficult enough. . .

Now, there's one other thing you have to understand about the situation in Central America at the time . . . There were facilities that were needed for running the war. Clandestine airstrips. Cowboy pilots, who would fly Junker (ph) airplanes. People who would make arrangements for the clandestine movement of money. Every one of those facilities was a perfect facility for someone in the drug business. So there people who were connected very directly to the CIA who had those facilities, and allowed them to be used, and indeed personally profited from their use as drug trafficking...

BLUM: It's not that someone from the CIA permitted them to be used. It's that a contract employee had the facilities. He was doing a job. That job wasn't delivering drugs for the CIA. . .

SPECTER: So the contract employee allowed those facilities to be used, and the contract employee benefited from the proceeds.

BLUM: You bet.

SPECTER: OK.

BLUM: You bet. And none of that money went to the Contras. . .

SPECTER: Mr. Blum, referring now to some specific individuals who have been cited in the Mercury News series, Adolfo Calero and Enrique Bermudez (ph)...

BLUM: Yes.

SPECTER: Were either of those individuals involved in the investigations which you conducted?

BLUM: Certainly. They were central figures in the Contra movement, and their names came up again and again in conversations about the problem. Not. . .

SPECTER: Were they involved in cocaine trafficking?

BLUM: Directly? Directly, to my knowledge, no. I have to say no.

SPECTER: All right. Indirectly, to your knowledge?

BLUM: Many of their people and their close associates were.

SPECTER: But how about those individuals specifically?

BLUM: I can't say that I have evidence of it. . .

SPECTER: I want to yield at this time to Senator Kerrey. . .

KERREY: Mr. Blum, when you talked to me, you said that there was a systematic effort to discredit the work of the subcommittee, and you separately mentioned that there was a refusal by the Department of Justice to -- was it justice?

BLUM: Justice.

KERREY: ... to provide you with information that you needed.

BLUM: Right. . .

KERREY: Who was in charge in of it?

BLUM: As best I could tell, it was coming from the top of the criminal division.

KERREY: Who was at the top of the criminal division?

BLUM: Bill Weld.

KERREY: And when you say the effort was made -- what would they do? Would they call...

BLUM: They would tell U.S. attorneys, systematically -- you can't talk to them. Don't give them paper. Don't cooperate. Don't let them have access to people who you have in your control. And we had a very tough time finding things out.