Aug 22, 1996
Cocaine pipeline financed rebels
Evidence points to CIA knowing of high-volume drug network
by Gary Webb
San Jose Mercury News
For the better part of a decade, a San Francisco Bay Area drug ring sold tons of
cocaine to the Crips and Bloods street gangs of Los Angeles and funneled
millions in drug profits to an arm of the contra guerrillas of Nicaragua run by
the Central Intelligence Agency, the San Jose Mercury News has found.
This drug network opened the first pipeline between Colombia's cocaine cartels
and the black neighborhoods of Los Angeles, a city now known as the "crack"
capital of the world. The cocaine that flooded in helped spark a crack explosion
in urban America - and provided the cash and connections needed for L.A.'s gangs
to buy weapons.
It is one of the most bizarre alliances in modern history: the union of a
U.S.-backed army attempting to overthrow a revolutionary socialist government
and the "gangstas" of Compton and South-Central Los Angeles.
The army's financiers - who met with CIA agents before and during the time they
were selling the drugs in L.A. - delivered cut-rate cocaine to the gangs through
a young South-Central crack dealer named Ricky Donnell Ross.
Unaware of his suppliers' military and political connections, "Freeway Rick"
turned the cocaine powder into crack and wholesaled it to gangs across the
country.
Drug cash for the contras
Court records show the cash was then used to buy equipment for a guerrilla army
named the Fuerza Democratica Nicaraguense (Nicaraguan Democratic Force) or FDN,
the largest of several anti-communist groups commonly called the contras.
While the FDN's war is barely a memory today, black America is still dealing
with its poisonous side effects. Urban neighborhoods are grappling with legions
of homeless crack addicts. Thousands of young black men are serving long prison
sentences for selling cocaine - a drug that was virtually unobtainable in black
neighborhoods before members of the CIA's army brought it into South-Central in
the 1980s at bargain-basement prices.
And the L.A. gangs, which used their enormous cocaine profits to arm themselves
and spread crack across the country, are still thriving.
"There is a saying that the ends justify the means," former FDN leader and drug
dealer Oscar Danilo Blandon Reyes testified during a recent cocaine-trafficking
trial in San Diego. "And that's what Mr. Bermudez (the CIA agent who commanded
the FDN) told us in Honduras, OK? So we started raising money for the contra
revolution."
Recently declassified reports, federal court testimony, undercover tapes, court
records here and abroad and hundreds of hours of interviews over the past 12
months leave no doubt that Blandon was no ordinary drug dealer.
Shortly before Blandon - who had been the drug ring's Southern California
distributor - took the stand in San Diego as a witness for the U.S. Department
of Justice, federal prosecutors obtained a court order preventing defense
lawyers from delving into his ties to the CIA.
Blandon, one of the FDN's founders in California, "will admit that he was a
large-scale dealer in cocaine, and there is no additional benefit to any
defendant to inquire as to the Central Intelligence Agency," Assistant U.S.
Attorney L.J. O'Neale argued in his motion shortly before Ross' trial on
cocaine-trafficking charges in March.
The 5,000-man FDN, records show, was created in mid-1981 when the CIA combined
several existing groups of anti-communist exiles into a unified force it hoped
would topple the new socialist government of Nicaragua.
Waged a losing war
From 1982 to 1988, the FDN - run by both American and Nicaraguan CIA agents -
waged a losing war against Nicaragua's Sandinista government, the
Cuban-supported socialists who'd overthrown U.S.-backed dictator Anastasio
Somoza in 1979.
Blandon, who began working for the FDN's drug operation in late 1981, testified
that the drug ring sold almost a ton of cocaine in the United States that year -
$54 million worth at prevailing wholesale prices. It was not clear how much of
the money found its way back to the CIA's army, but Blandon testified that
"whatever we were running in L.A., the profit was going for the contra
revolution."
At the time of that testimony, Blandon was a full-time informant for the Drug
Enforcement Administration, a job the U.S. Department of Justice got him after
releasing him from prison in 1994.
Though Blandon admitted to crimes that have sent others away for life, the
Justice Department turned him loose on unsupervised probation after only 28
months behind bars and has paid him more than $166,000 since, court records
show.
"He has been extraordinarily helpful," federal prosecutor O'Neale told Blandon's
judge in a plea for the trafficker's release in 1994. Though O'Neale once
described Blandon to a grand jury as "the biggest Nicaraguan cocaine dealer in
the United States," the prosecutor would not discuss him with the Mercury News.
Blandon's boss in the FDN's cocaine operation, Juan Norwin Meneses Cantarero,
has never spent a day in a U.S. prison, even though the federal government has
been aware of his cocaine dealings since at least 1974, records show.
Meneses - who ran the drug ring from his homes in the Bay Area - is listed in
the DEA's computers as a major international drug smuggler and was implicated in
45 separate federal investigations. Yet he and his cocaine-dealing relatives
lived quite openly in the Bay Area for years, buying homes, bars, restaurants,
car lots and factories.
"I even drove my own cars, registered in my name," Meneses said during a recent
interview in Nicaragua.
Meneses' organization was "the target of unsuccessful investigative attempts for
many years," O'Neale acknowledged in a 1994 affidavit. But records and
interviews revealed that a number of those probes were stymied not by the
elusive Meneses but by agencies of the U.S. government.
CIA hampered probes
Agents from four organizations - the DEA, U.S. Customs, the Los Angeles County
Sheriff's Department and the California Bureau of Narcotic Enforcement - have
complained that investigations were hampered by the CIA or unnamed
"national-security" interests.
One 1988 investigation by a U.S. Senate subcommittee ran into a wall of official
secrecy at the Justice Department.
In that case, congressional records show, Senate investigators were trying to
determine why the U.S. attorney in San Francisco, Joseph Russoniello, had given
$36,000 back to a Nicaraguan cocaine dealer arrested by the FBI.
The money was returned, court records show, after two contra leaders sent
letters to the court swearing that the drug dealer had been given the cash to
buy weapons for guerrillas.
After Nicaraguan police arrested Meneses on cocaine charges in Managua in 1991,
his judge expressed astonishment that the infamous smuggler went unmolested by
American drug agents during his years in the United States.
His seeming invulnerability amazed American authorities as well.
A Customs agent who investigated Meneses in 1980 before transferring elsewhere
said he was reassigned to San Francisco seven years later "and I was sitting in
some meetings and here's Meneses' name again. And I can remember thinking, `Holy
cow, is this guy still around?' "
Blandon led an equally charmed life. For at least five years he brokered massive
amounts of cocaine to the black gangs of Los Angeles without being arrested. But
his luck changed overnight.
On Oct. 27, 1986, agents from the FBI, the IRS, local police and the Los Angeles
County sheriff fanned out across Southern California and raided more than a
dozen locations connected to Blandon's cocaine operation. Blandon and his wife,
along with numerous Nicaraguan associates, were arrested on drug and weapons
charges.
The search-warrant affidavit reveals that local drug agents knew plenty about
Blandon's involvement with cocaine and the CIA's army nearly 10 years ago.
"Danilo Blandon is in charge of a sophisticated cocaine smuggling and
distribution organization operating in Southern California," L.A. County
sheriff's Sgt. Tom Gordon said in the 1986 affidavit. "The monies gained from
the sales of cocaine are transported to Florida and laundered through Orlando
Murillo, who is a high-ranking officer of a chain of banks in Florida named
Government Securities Corporation. From this bank the monies are filtered to the
contra rebels to buy arms in the war in Nicaragua."
Raids a spectacular failure
Despite their intimate knowledge of Blandon's operations, the police raids were
a spectacular failure. Every location had been cleaned of anything remotely
incriminating. No one was ever prosecuted.
Ron Spear, a spokesman for Los Angeles County Sheriff Sherman Block, said
Blandon somehow knew that he was under police surveillance.
FBI records show that soon after the raids, Blandon's defense attorney, Bradley
Brunon, called the sheriff's department to suggest that his client's troubles
stemmed from a most unlikely source: a recent congressional vote authorizing
$100 million in military aid to the contras.
According to a December 1986 FBI teletype, Brunon told the officers that the
"CIA winked at this sort of thing. . . . (Brunon) indicated that now that U.S.
Congress had voted funds for the Nicaraguan contra movement, U.S. government now
appears to be turning against organizations like this."
That FBI report, part of the files of former Iran-contra special prosecutor
Lawrence Walsh, was made public only last year, when it was released by the
National Archives at the San Jose Mercury News' request.
Blandon has also implied that his cocaine sales were, for a time, CIA-approved.
He told a San Francisco federal grand jury in 1994 that once the FDN began
receiving American taxpayer dollars, the CIA no longer needed his kind of help.
None of the government agencies known to have been involved with Meneses and
Blandon would provide the Mercury News with any information about them, despite
Freedom of Information Act requests.
Blandon's lawyer, Brunon, said in an interview that his client never told him
directly that he was selling cocaine for the CIA, but the prominent Los Angeles
defense attorney drew his own conclusions from the "atmosphere of CIA and
clandestine activities" that surrounded Blandon and his Nicaraguan friends.
"Was he involved with the CIA? Probably. Was he involved with drugs? Most
definitely," Brunon said. "Were those two things involved with each other?
They've never said that, obviously. They've never admitted that. But I don't
know where these guys get these big aircraft."
That very topic arose during the sensational 1992 cocaine-trafficking trial of
Meneses after he was arrested in Nicaragua in connection with a staggering
750-kilo shipment of cocaine. His chief accuser was his friend Enrique Miranda,
a relative and former Nicaraguan military intelligence officer who had been
Meneses' emissary to the cocaine cartel of Bogota, Colombia. Miranda pleaded
guilty to drug charges and agreed to cooperate in exchange for a seven-year
sentence.
In a long, handwritten statement he read to Meneses' jury, Miranda revealed the
deepest secrets of the Meneses drug ring, earning his old boss a 30-year prison
sentence in the process.
"He (Norwin) and his brother Luis Enrique had financed the contra revolution
with the benefits of the cocaine they sold," Miranda wrote. "This operation, as
Norwin told me, was executed with the collaboration of high-ranking Salvadoran
military personnel. They met with officials of the Salvadoran air force, who
flew (planes) to Colombia and then left for the U.S., bound for an Air Force
base in Texas, as he told me."
Meneses - who has close personal and business ties to a Salvadoran air-force
commander and former CIA agent named Marcos Aguado - declined to discuss
Miranda's statements during an interview at a prison outside Managua in January.
He is scheduled to be paroled this summer, after nearly five years in custody.
U.S. General Accounting Office records confirm that El Salvador's air force was
supplying the CIA's Nicaraguan guerrillas with aircraft and flight support
services throughout the mid-1980s.
The same day the Mercury News requested official permission to interview
Miranda, he disappeared.
While out on a routine weekend furlough, Miranda failed to return to the
Nicaraguan jail where he'd been living since 1992. Though his jailers, who
described him as a model prisoner, claimed Miranda had escaped, they didn't call
the police until a Mercury News correspondent showed up and discovered he was
gone.
He has not been seen in nearly a year.