Before the House Permanent Select Committee on Intelligence
On the CIA OIG Report of Investigation
"Allegations of Connections Between CIA and Contras in Cocaine
Trafficking to the US" "Volume I: The California Story"

March 16, 1998

Mr. Chairman, Members of the Committee, I am here today to testify about
the failure of the Central Intelligence Agency (CIA) to conduct a
serious and thorough investigation into the allegations of CIA
involvement in cocaine trafficking to fund its Contra war activities.
Unfortunately, my fear that the CIA would be unable to investigate
itself has been confirmed with this report. The Inspector General's
Report lacks credibility. It is fraught with contradictions and
illogical conclusions.

In a September 3, 1996 memo, then CIA Director John Deutch laid out the
framework for this investigation. In his instructions to CIA Inspector
General Frederick P. Hitz, Director Deutch stated, "I have no reason to
believe that there is any substance to the allegations published in the
Mercury News." Despite his premature conclusion, a serious, substantial
and credible investigation and interview process would have proven him
wrong. If the CIA Director's premature conclusion was meant to direct
the final outcome, he has succeeded. This Report's sweeping denial of
the CIA's knowledge of drug trafficking related to the Contras defies
the evidence and the logic that the CIA should have known.

From the days of the CIA's first response to the allegations raised in
the "Dark Alliance" series, many skeptics believed that the CIA could
never produce a credible or truthful review of wrongdoings by its own
agency. These skeptics could point to this Sunday's Los Angeles Times to
confirm their fears. The Times reported that, after 37 years, the CIA
finally admitted publicly the most profound deception imaginable on an
American family. Thomas Pete Ray and his top secret squadron of National
Guard bombers were shot down during a CIA bombing mission in the Bay of
Pigs debacle. For 37 years the CIA denied that Mr. Ray and his squadron
even existed, much less were shot down by Cuban troops in 1961. Only
this month, faced with a document obtained by a Freedom of Information
Act request by the National Security Archives, did the CIA finally admit
the truth - 37 years later.

My deep concern about the allegations raised in the "Dark Alliance"
series that my government could have in any way been involved in, or had
knowledge of, drug trafficking, has caused me to spend my own time and
resources to find out more about these allegations.

After reading the "Dark Alliance" series, I interviewed Gary Webb, the
writer of the series. I invited him to come to my district in South
Central Los Angeles to respond to questions from local residents. My
community encouraged my investigation and supported me in my efforts to
delve deeper into these allegations.

I personally interviewed a number of key figures in the "Dark Alliance"
series. I first interviewed Alan Fenster, the attorney for Ricky Ross.
Then I drove to San Diego to interview Mr. Ross who was being held in
the Metropolitan detention facility on drug charges.

I also drove to a restaurant in the Valley where I met with Celerino
"Sully" Castillo, the DEA agent who had investigated the drug
trafficking operation at the Ilopango airfield in El Salvador. Castillo
had documented that the CIA directed this drug trafficking operation out
of two hangers, using the Contra supply network as the route for
shipping drugs into the U.S.

I interviewed former LAPD officer Mike Ruppert, who states he was forced
to leave LAPD after he uncovered a connection between the CIA and
narcotic trafficking operations in California and Louisiana. Mr. Ruppert
also was interviewed by the CIA for its Report.

I met and had numerous telephone conversations with Jerry Guzetta, a
detective with the City of Bell and a key member of the multi-agency
task force working with the LA Sheriff's Department investigating the
Blandon narcotics operation. Guzetta was the Level 1 informant whose
information was the basis of the affidavit of LA Sheriff Tom Gordon that
resulted in the October 1986 raid of the Blandon operation's 14 sites in
Southern California.

I visited the records division of the LA Sheriff's Department and
uncovered the Sheriff's reports regarding the October 1986 drug bust. I
was the first to obtain copies of the documentation regarding the raids.

On January 3, 1997, using my personal funds, I flew to Nicaragua to meet
with Enrique Miranda Jaime, a former Sandanista official and drug
partner of Norwin Meneses, a central figure in the allegations in the
"Dark Alliance" series. I was contacted by someone who had information
about the Colombian Cartels and their connection to Norwin Meneses. When
I arrived in Nicaragua, I was taken to the prison in the town of Grenada
by the State Department where I met with Miranda himself. Mr. Miranda
told me some of the information that he gave to the CIA in this
investigation, which is reported on pages 54 and 55 of the IG's Report.

Mr. Miranda currently is in prison after being convicted for smuggling
764 kilos of cocaine with his partner Norwin Meneses. Meneses told
Miranda - in detail - that Meneses worked for the Contras and that his
drug trafficking operation had the support of the CIA. Meneses also told
Miranda that he was receiving support directly from Oliver North and
passing on the funds to support Contra groups.

I met with Tomas Borge, a former Sandanista Interior Minister and head
of intelligence. Mr. Borge also came to South Central LA to meet with
me. I met with him for several hours.

I also had numerous telephone conversations with Coral Talavera Baca,
the girlfriend of Rafael Cornejo, who was a relative and part of Norwin
Meneses' drug trafficking organization, as well as a long-time business
partner of Danilo Blandon, another central figure in the "Dark Alliance"
series. I received information from Ms. Baca and Mr. Cornejo who were
connected to Carlos Lehder, a Columbian drug dealer and co-founder of
the Medellin Cartel. It was through Lehder's private island that the
Medellin Cartel moved massive amounts of cocaine to Miami and the United
States. Ms. Baca had visited Carlos Lehder's private island and have
information regarding the connection between Mr. Lehder and Norwin
Meneses.

I have looked into many of the main allegations raised in Gary Webb's
series and I have thoroughly reviewed the Inspector General's Report. In
addition, I have read many letters and reviewed volumes of information
sent to me and have visited a large number of people who have claimed to
have information about the drug dealing in South Central Los Angeles. In
my informed opinion, the CIA IG Report and the investigation lacks
credibility and its conclusions should be dismissed.

Let me turn to some of the specifics of the Inspector General's Report.

The average reader likely will find the structure of this Report bizarre
and confusing. I also question the Report's methodology, its sweeping
conclusions, its cleverly worded denials and its selective quoting of
documents.

The Report states that 365 interviews were conducted, but only
summarizes statements from 12 individuals connected to the South Central
Los Angeles specific allegations. I have a list of over 70 individuals
who should have been interviewed under oath by the CIA if the
investigation was to be considered credible. Did the CIA interview all
of these people? Because the Report fails to list who was interviewed,
we have no way of knowing.

In addition, only 40 pages of this Report titled "The California Story"
actually deal with the allegations of the South Central/crack
cocaine/Contra connection.

The Report mentions a half dozen other CIA and Contra officials
interviewed, but does not offer even a cursory summary of their
testimony. So let me do what the Report failed to do. The following
individuals associated with the Contras are, or were, either CIA agents
or CIA assets:

Adolpho Calero
Enrique Bermudez
Marcos Aguado - Contra pilot and accused drug dealer.
Francisco Aviles - Contra official in Costa Rica in Frogman case.
Ivan Gomez - CIA agent who accepted drug money from Meneses.
Dagaberto Nunez - ran shrimp company for Oliver North in Costa Rica.
Rene Corvo - Cuban American who worked with Contras in Costa Rica.
Francisco Chanes - Owner of shrimp company for Oliver North in Costa
Rica.
Edmundo Meneses - American-trained Nicaraguan general and Norwin's
brother.
Sebastian Gonzalez - Contra leader in Costa Rica and drug partner of
Meneses.

Today, I am asking this Committee to obtain a written response from the
CIA that either categorically confirms or denies they are or were CIA
assets or agents.

Another major problem with the investigation underlying the Report was
the CIA's lack of subpoena power. This meant that some of the most
important CIA and other officials were never interviewed. Three former
unnamed senior CIA managers would only respond in writing. Six other key
CIA personnel and former DEA agent, "Sully" Castillo, refused to be
interviewed. The CIA agents included Duane Clarridge, Joseph Fernandez,
and Clair George. All of these senior CIA officials had major
responsibilities for the CIA's Contra operation. There can be no
thorough investigation without sworn testimony from each of these
individuals.

Joseph Fernandez was the former CIA station chief in Costa Rica while
the Meneses' drug organization was operating from there. Duane "Dewey"
Clarridge was the CIA officer who helped create the Contras at a time
when the Meneses ring first began dealing cocaine for the FDN. His name
also appeared in Oliver North's notebooks as being responsible for
making quid pro quo deals with known drug kingpin Manuel Noriega.

Clarridge summed up how serious he thought this investigation was when
he told reporters in December 1997 that [the CIA] quote "sent me
questions that were bullshit, and I wrote back they were a bunch of
bullshit."

When I spoke with journalists following the release of the Report this
past January, much to my surprise, many had to admit to me they had not
even read the entire report. They admitted that they only had read the
glossy eight page summary which offered unsubstantiated conclusions of
the CIA's innocence and blanket denials of the "Dark Alliance" series
allegations. Had they only read the report in its entirety as I did,
they would have learned that allegations of drug trafficking and
connections between the Contra and the CIA were not new. In fact, the
Report even lists and summarizes some of the other investigations that
found Contra involvement in drug trafficking.

For example, the Senate Subcommittee on Terrorism, Narcotics and
International Operations, chaired by Senator John Kerry conducted a
two-year investigation into allegations of Contra involvement in drugs
and arms trafficking. The CIA Inspector General's Report summarizes some
of the Kerry Commission's 1,166-page report's devastating findings on
pages 35 through 38. These are some of the admissions:

Drug traffickers used the Contra war and their ties to the Contras as a
cover for their criminal enterprises in Honduras and Costa Rica.
Assistance from the drug lords was crucial to the Contras, and the
traffickers in turn promoted and protected their operations by
associating with the Contra movement.

Drug traffickers provided support to the Contras and used the supply
network of the Contras. Contras knowingly received both financial and
material assistance from the drug traffickers.

In each case, one or another U.S. Government agency had information
regarding these matters either while they were occurring, or immediately
thereafter.

Members of the Contra movement were involved in drug trafficking,
including pilots who flew supplies for the Contras, mercenaries who
worked for the Contras and Contra supporters throughout Central America.

Drug traffickers helped in the Contra supply operations through business
relations with Contra groups.

Drug traffickers contributed cash, weapons, planes, pilots, air supply
services and other materials to the Contras.

U.S. State Department funds, authorized by Congress for humanitarian
assistance, was paid to drug traffickers. In some cases, these drug
traffickers received the State Department funds, after having been
indicted by federal law enforcement agencies on drug charges, and in
other cases, were the subject of pending investigations by those
agencies.

The FDN Contra group moved Contra funds through a narcotics drug
trafficking and money laundering operation.

Drug trafficking for the Contra movement was done by some because they
were told that their actions were either on behalf of, or sanctioned by,
the U.S. Government.

Not included in the CIA IG Report are other key findings by the Kerry
Committee.

Despite widespread trafficking through the war zones of northern Costa
Rica, the Kerry Committee was unable to find a single case which was
made on the basis of a tip or report by an official of a U.S.
intelligence agency. This despite an executive order requiring
intelligence agencies to report drug trafficking to law enforcement
officials and despite direct testimony that drug trafficking on the
Southern Front was reported to CIA officials.

U.S. officials involved with the Contras knew that drug traffickers were
using the Contra infrastructure and that the Contras were receiving
assistance from drug profits. Yet, they turned a blind eye and did not
report these individuals to the appropriate law enforcement agencies.
How can this Report include these incriminating findings by elected
officials, including Senators Kerry, Brock and Moynihan and others while
summarily dismissing any CIA knowledge of, or involvement in, Contra
drug trafficking into the U.S.? This is an outrageous contradiction.

Moreover, the Report is littered with damaging admissions.

Norwin Meneses was one of the biggest drug dealers in America, either
North and South, and he supplied Danilo Blandon. Blandon, in turn, was
the source who supplied Ricky Ross. And Blandon and Meneses did so
unhindered by the CIA.
Is it unreasonable to think Meneses was connected to the CIA given that
the Contras were a CIA creation and that the CIA handled every aspect of
the Contra operation? Pages 22 through 24 of this Report confirms that
the CIA essentially created, funded, supplied, and trained the Contras
and that the CIA was intimately involved in determining their strategy
and running their operations.

Meneses was never arrested by U.S. law enforcement. He was permitted
free entrance to the U.S. and was even issued a visa. How was this
allowed and why was it allowed to continue?

The CIA and DEA records are full of knowledge about Meneses' drug
dealing operation. This knowledge was substantiated in this Report. The
CIA knew of his drug trafficking by 1984 and the DEA had known of his
trafficking activities as early as 1974.

Incredibly, the Report fails to mention anything about the activities of
Adolpho Calero, only mentioning that he was interviewed. He was the key
Contra leader and CIA agent in the Southern Front.
Damning public information ties Calero to drug trafficking. In a
December 1986 interview, Calero told the Costa Rican newspaper La Nacion
that he met with drug kingpin Norwin Meneses at least six times and that
he knew Meneses was involved in illegal activities.

In addition, there were many other key facts confirmed by the Report:

Drug Kingpin Norwin Meneses supported and was involved with the
Contras-- On pages 76 - 77, drug dealer Norwin Meneses admitted giving
money to the California chapter of the FDN/Contras and that he was
involved in the 1985 attempted to obtain "material support, medical and
general supplies" for the Contra movement.
Pages 70 - 71 of the Report documents the connection between CIA asset
and FDN military leader Enrique Bermudez, Meneses and Blandon. Blandon
and Meneses "traveled to Bolivia in 1982 to make a drug deal, and
stopped in route in Honduras." While in Honduras, Blandon and Meneses
met with Bermudez for the second time. Bermudez asked Blandon and
Meneses to help raise money and supplies for the FDN. He let the drug
traffickers know that their support would be welcome because "the ends
justify the means."

Blandon then describes how "he and Meneses were escorted to airport by
armed Contras" after the meeting with Bermudez. Blandon left the meeting
with $100,000 to buy drugs. The profits from the sale of these drugs
were to be used to buy supplies and fund the Contras. Blandon tells of
how he ran into trouble at the airport in Honduras when he was caught
with the $100,000. But, the Contras intervened and secured Blandon's
release.

Where did the $100,000 come from? Did they give back the $100,000 to
Blandon because of the Contra-CIA connection?

The CIA knew that Meneses was both a drug dealer and involved with the
Contras On page 45, the Report documents a declaration from the Records
Validation Officer for the CIA (RVO) submitted in response to the CIA IG
Report investigation. The RVO Declaration certified that the CIA had
confirmed to the FBI that Meneses was a drug trafficker.
On page 49, the Report details a June 11, 1986 CIA cable from the LA
Division Station informing CIA Headquarters that Contra leader Fernando
Chamorro was asked by Meneses in August or September 1984 to help "move
drugs to the U.S." At the time, Chamorro was a CIA asset. A second June
1986 CIA cable reported that "Meneses was involved in the transporting
of drugs." What did the CIA do with this information?

A CIA cable, dated Oct. 31, 1986, contained the following two
admissions. First, it details a CIA cable dated Dec. 5, 1984 reporting
that "Norwin Meneses was apparently well known as the Nicaraguan Mafia,
dealing in drugs, weapons and smuggling and laundering of counterfeit
money." Second, it quotes a CIA cable, dated Mar. 25, 1985, which
"described a Norwin ((Meneses)) Cantatero as the kingpin of narcotics
traffickers in Nicaragua prior to the fall of Somoza."

On page 48, the Report describes a 1984 CIA cable discussing Meneses'
drug trafficking activities with Tuto Munkel and Sebastian Gonzalez
Medieta. Sebastian Gonzalez was a key CIA player in the Contras Southern
Front. He was in charge of logistics for the supply of arms supplied by
Manuel Noriega. This cable shows the CIA knew Gonzalez also was involved
in drug trafficking with Norwin Meneses in 1984 - when the CIA was still
directly involved in Contra operations, before the hand off to Oliver
North's operation. Remarkably, this Report makes no mention of Gonzalez
being a key CIA agent, nor mention of his critical role as a Contra in
the Southern Front. Tuto Munkel was arrested in Florida as part of the
Frogman case and is a crucial link between that case and the Meneses
Contra connection detailed above.

What did the CIA do with this information in their cables? The Report
does not indicate that any action was taken.

Despite this damning information to the contrary, the Report goes on to
quote Meneses' own testimony as if it were fact. On page 54, the Report
repeats without comment Meneses' denial that he trafficked in cocaine or
other narcotics on behalf of the CIA or any Contra group, and that he
denied he ever had any contact or relationship with CIA, DoS, the U.S.
military, or U.S. civilian assistance groups that provided assistance to
the Contras.

As I mentioned earlier, Enrique Miranda told me some of what he told the
CIA when it interviewed him a year ago in Central America.

The CIA directly intervened in the Frogman case to protect a CIA asset
In one of the most amazing admissions in this Report, pages 113 through
115 detail the direct intervention of the CIA in the Frogman Case. The
Frogman case was, of course, California's biggest cocaine bust at that
time. The CIA intervened in the case by arranging the return of $36,000
seized from a drug trafficker. The CIA did so because of the
trafficker's involvement with the Contras and CIA agents.
Again, this Report catalogs the pattern of the CIA returning money to
known drug dealers - $100,000 in the Bermudez/Blandon case, $36,000 in
the Frogman case. How many more times did this happen?

An internal CIA cable dated 1984 details that the CIA made contact with
prosecutors in the Zavala/Frogman case in order to protect what the CIA
believed was an operational equity. That cable is included on page 113,
and makes for incredible reading. Evidently, the CIA feared that
exposure of the CIA's connections to the drug case had "the potential
for disaster", according to a cable described on page 115.

Well Mr. Chairman, if I have anything to do with it, that cable and the
confirmed facts sifted from this confused Report will mean disaster for
the CIA.

This Committee has a responsibility to look into the nefarious
activities surrounding the massive Contra-cocaine drug network and to
use its subpoena power to provide the American people with the truth
that has been denied them for too long.
 

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