CIA Admits Tolerating Contra-Cocaine Trafficking
by Robert Parry
The Consortium online magazine, June 8, 2000
w.consortiumnews.com agazine, In secret congressional testimony,
senior CIA officials admitted that the spy agency turned a blind
eye to evidence of cocaine trafficking by U.S.-backed Nicaraguan
contra rebels in the 1980s and generally did not treat drug smuggling
through Central America as a high priority during the Reagan administration.
"In the end the objective of unseating the Sandinistas
appears to have taken precedence over dealing properly with potentially
serious allegations against those with whom the agency was working,"
CIA Inspector General Britt Snider said in classified testimony
on May 25, 1999. He conceded that the CIA did not treat the drug
allegations in "a consistent, reasoned or justifiable manner."
Still, Snider and other officials sought to minimize the seriousness
of the CIA's misconduct a position echoed by a House Intelligence
Committee report released in May and by press coverage it received.
In particular, CIA officials insisted that CIA personnel did not
order the contras to engage in drug trafficking and did not directly
join in the smuggling.
But the CIA testimony to the House Intelligence Committee
and the body of the House report confirmed long-standing allegations
dating back to the mid-1980s that drug traffickers
pervaded the contra operation and used it as a cover for smuggling
substantial volumes of cocaine into the United States.
Deep in the report, the House committee noted that in some
cases, "CIA employees did nothing to verify or disprove drug
trafficking information, even when they had the opportunity to
do so. In some of these, receipt of a drug allegation appeared
to provoke no specific response, and business went on as usual."
Former CIA officer Duane Clarridge, who oversaw covert CIA
support for the contras in the early years of their war against
Nicaragua's leftist Sandinista government, said "counter-narcotics
programs in Central America were not a priority of CIA personnel
in the early 1980s," according to the House report.
The House committee also reported new details about how a
major Nicaraguan drug lord, Norwin Meneses, recruited one of his
principal lieutenants, Oscar Danilo Blandon, with promises that
much of their drug money would go to the contras. Meneses and
Blandon were key figures in a controversial 1996 series in the
San Jose Mercury News that alleged a "dark alliance"
between the CIA and contra traffickers.
That series touched off renewed interest in contra-drug trafficking
and its connection to the flood of cocaine that swept through
U.S. cities in the 1980s, devastating many communities with addiction
and violence. In reaction to the articles by reporter Gary Webb,
U.S. government agencies and leading American newspapers rallied
to the CIA's defense.
Like those responses, the House Intelligence Committee report
attacked Webb's series. It highlighted exculpatory information
about the CIA and buried admissions of wrongdoing deep in the
text where only a careful reading would find them. The report's
seven "findings" accepted by the majority Republicans
as well as the minority Democrats absolved the CIA of any
serious offenses, sometimes using convoluted phrasing that obscured
For instance, one key finding stated that "the CIA as
an institution did not approve of connections between contras
and drug traffickers, and, indeed, contras were discouraged from
involvement with traffickers." The phrasing is tricky, however.
The use of the phrase "as an institution" obscures the
report's clear evidence that many CIA officials ignored the contra-cocaine
smuggling and continued doing business with suspected drug traffickers.
The finding's second sentence said, "CIA officials, on
occasion, notified law enforcement entities when they became aware
of allegations concerning the identities or activities of drug
traffickers." Stressing that CIA officials "on occasion"
alerted law enforcement about contra drug traffickers glossed
over the reality that many CIA officials withheld evidence of
illegal drug smuggling and undermined investigations of those
Normally in investigations, it is the wrongdoing that is noteworthy,
not the fact that some did not participate in the wrongdoing.
A close reading of the House report reveals a different story
from the "findings." On page 38, for instance, the House
committee observed that the second volume of the CIA's inspector
general's study of the contra-drug controversy disclosed numerous
instances of contra-drug operations and CIA knowledge of the problem.
"The first question is what CIA knew," the House
report said. "Volume II of the CIA IG report explains in
detail the knowledge the CIA had that some contras had been, were
alleged to be or were in fact involved or somehow associated with
drug trafficking or drug traffickers. The reporting of possible
connections between drug trafficking and the Southern Front contra
organizations is particularly extensive.
"The second question is what the CIA reported to DOJ
[Department of Justice]. The Committee was concerned about the
CIA's record in reporting and following up on allegations of drug
activity during this period. In many cases, it is clear the
information was reported from the field, but it is less clear
what happened to the information after it arrived at CIA headquarters."
In other words, the internal government investigations found
that CIA officers in Central America were informing CIA headquarters
at Langley, Va., about the contra-drug problem, but the evidence
went no farther. It was kept from law enforcement agencies, from
Congress and from the American public. Beyond withholding the
evidence, the Reagan administration mounted public relations attacks
on members of Congress, journalists and witnesses who were exposing
the crimes in the 1980s.
In a sense, those attacks continue to this day, with reporter
Gary Webb excoriated for alleged overstatements in the Mercury
News stories. As a result of those attacks, Webb was forced to
resign from the Mercury News and leave daily journalism. No member
of the Reagan administration has received any punishment or even
public rebuke for concealing evidence of contra-cocaine trafficking.
[For details on the CIA's internal report, see Robert Parry's
Besides confirming the CIA's internal admissions about contra-drug
trafficking and the CIA's spotty record of taking action to stop
it, the House committee included in its report the Reagan administration's
rationale for blacking out the contra-cocaine evidence in the
"The committee interviewed several individuals who served
in Latin America as [CIA] chiefs of station during the 1980s,"
the report said. "They all personally deplored the use and
trafficking of drugs, but indicated that in the 1980s the counter-narcotics
mission did not have as high a priority as the missions of reporting
on and fighting against communist insurrections and supporting
struggling democratic movements.
"Indeed, most of those interviewed indicated that they
were, effectively speaking, operating in a war zone and were totally
engaged in keeping U.S. allies from being overwhelmed. In this
environment, what reporting the CIA did do on narcotics was often
based on one of two considerations: either a general understanding
that the CIA should report on criminal activities so that law
enforcement agencies could follow up on them, or, in case of the
contras, an effort to monitor allegations of trafficking that,
if true, could undermine the legitimacy of the contras cause."
In other words, the CIA station chiefs admitted to the House
committee that they gave the contras a walk on drug trafficking.
"In case of the contras," only monitoring was in order,
as the CIA worried that disclosure of contra-drug smuggling would
be a public relations problem that "could undermine the legitimacy
of the contra cause."
The House report followed this CIA admission with a jarring
and seemingly contradictory conclusion. "The
committee found no evidence of an attempt to 'cover up' such information,"
the report said.
Yet, that "no cover-up" conclusion flew in the face
of both the CIA inspector general's report and the report by the
Justice Department's inspector general. Both detailed case after
case in which CIA and senior Reagan administration officials intervened
to frustrate investigations on contra-connected drug trafficking,
either by blocking the work of investigators or by withholding
In one case, a CIA lawyer persuaded a federal prosecutor in
San Francisco to forego a 1984 trip to Costa Rica because the
CIA feared the investigation might expose a contra-cocaine tie-in.
In others, Drug Enforcement Administration investigators in Central
America complained about obstacles put in their path by CIA officers
and U.S. embassy officials. [For more details, see Lost History.]
In classified testimony to the House committee, CIA Inspector
General Snider acknowledged that the CIA's handling of the contra-cocaine
evidence was "mixed" and "inconsistent." He
said, "While we found no evidence that any CIA employees
involved in the contra program had participated in drug-related
activities or had conspired with others in such activities, we
found that the agency did not deal with contra-related drug trafficking
allegations and information in a consistent, reasoned or justifiable
Even in this limited admission, Snider's words conflicted
with evidence published in the CIA inspector general's report
in October 1998. That report, prepared by Snider's predecessor
Frederick Hitz, showed that some CIA personnel working with the
contras indeed were implicated in drug trafficking. The tricky
word in Snider's testimony was "employees," that is,
regular full-time CIA officers.
Both the CIA report and the House report acknowledged that
a CIA "contractor" known by the pseudonym Ivan Gomez
was involved in drug trafficking. In the early 1980s, the CIA
sent Gomez to Costa Rica to oversee the contra operation. Later,
Gomez admitted in a CIA polygraph that he participated in his
brother's drug business in Florida.
In separate testimony, Nicaraguan drug smuggler Carlos Cabezas
fingered Gomez as the CIA's man in Costa Rica who made sure that
drug money went into the contra coffers.
Despite the seeming corroboration of Cabezas's allegation
about Ivan Gomez's role in drug smuggling, the House committee
split hairs again. It attacked Cabezas's credibility and argued
that the Gomez drug money could not be connected definitively
to the contras. "No evidence suggests that the drug trafficking
and money laundering operations in which Gomez claimed involvement
were in any way related to CIA or the contra movement," the
House report said.
What the report leaves out is that one reason for this lack
of proof was that the CIA prevented a thorough investigation of
Ivan Gomez's drug activities by withholding the polygraph admission
from the Justice Department and the U.S. Congress in the late
1980s. In effect, the House committee now is rewarding the CIA
for torpedoing those investigations.
In one surprise disclosure, the House committee uncovered
new details about the involvement of Nicaraguan drug smuggler
Oscar Danilo Blandon in trafficking intended to support the contras
financially. Blandon, a central figure in the Mercury News series,
said he was drawn into the drug business because he understood
profits were going to the contra war.
In a deposition to the House committee, Blandon described
a meeting with Nicaraguan drug kingpin Norwin Meneses at the Los
Angeles airport in 1981. "It was during this encounter, according
to Blandon, that Meneses encouraged Blandon to become involved
with the drug business in order to assist the contras," the
House report stated.
"We spoke a lot of things about the contra revolution,
about the movement, because then he took me to the drug business,
speaking to me about the drug business that we had to raise money
with drugs," said Blandon. "And he explained to me,
you don't know, but I am going to teach you. And, you know, I
am going to tell you how you will do it. You see, you keep some
of the profit for you, and some of the profit we will help the
contra revolution, you see. Meneses was trying to convince me
with the contra revolution to get me involved in drugs. Give a
piece of the apple to the contras and a piece of the apple to
Blandon accepted Meneses's proposal and "assumed the
money he had given Meneses was being sent by Meneses to the contra
movement. However, Blandon stated that he had no firsthand knowledge
that this was actually occurring," the House report said.
Though Blandon claimed ignorance about the regular delivery
of cocaine cash to the contras, other witnesses confirmed that
substantial sums went from Meneses and other drug rings to the
contras. A Justice Department investigation discovered several
informants who corroborated the flow of money.
One confidential informant, identified in the Justice report
only as "DEA CI-1," said Meneses, Blandon and another
cohort, Ivan Torres, contributed drug profits to the contras.
Renato Pena, a money-and-drug courier for Meneses, also described
sharing drug profits with the contras, while acting as their northern
California representative. Pena quoted a Colombian contact called
"Carlos" as saying "We're helping your cause with
this drug thing. We're helping your organization a lot."
The Justice report noted, too, that Meneses's nephew, Jairo,
told the DEA in the 1980s that he had asked Pena to help transport
drug money to the contras and that his uncle, Norwin Meneses,
dealt directly with contra military commander Enrique Bermudez.
The Justice report found that Julio Zavala and Carlos Cabezas
ran a parallel contra-drug network. Cabezas said cocaine from
Peru was packed into hollow reeds which were woven into tourist
baskets and smuggled to the United States. After arriving in San
Francisco, the baskets went to Zavala who arranged sale of the
cocaine for contra operatives, Horacio Pereira and Troilo Sanchez.
Cabezas estimated that he gave them between $1 million and $1.5
million between December 1981 and December 1982.
Another U.S. informant, designated "FBI Source 1,"
backed up much of Cabezas's story. Source 1 said Cabezas and Zavala
were helping the contras with proceeds from two drug-trafficking
operations, one smuggling Colombian cocaine and the other shipping
cocaine through Honduras. Source 1 said the traffickers had to
agree to give 50 percent of their profits to the contras.
The House report made no note of this corroborating evidence
published in the DOJ report.
The broader contra-cocaine picture was ignored, too. The evidence
now available from government investigations over the past 15
years makes clear that many major cocaine smuggling networks used
the contra operation, either relying on direct contra assistance
or exploiting the relationship to gain protection from U.S. law
Sworn testimony before an investigation by Sen. John Kerry,
D-Mass, in the late 1980s disclosed that the contra-drug link
dated back to the origins of the movement in 1980. Then, Bolivian
drug lord Roberto Suarez invested $30 million in several Argentine-run
paramilitary operations, according to Argentine intelligence officer
The Suarez money financed the so-called Cocaine Coup that
ousted Bolivia's elected government in 1980 and then was used
by Argentine intelligence to start the contra war against Nicaragua's
leftist government. In 1981, President Reagan ordered the CIA
to work with the Argentines in building up the contra army.
According to Volume Two of the CIA report, the spy agency
learned about the contra-cocaine connection almost immediately,
secretly reporting that contra operatives were smuggling cocaine
into South Florida.
By the early 1980s, the Bolivian connection had drawn in the
fledgling Colombian Medellin cartel. Top cartel figures picked
up on the value of interlocking their operations with the contras.
Miami-based anti-Castro Cubans played a key matchmaker role, especially
by working with contras based in Costa Rica.
U.S. agencies secretly reported on the work of Frank Castro
and other Cuban-American contra supporters who were seen as Medellin
operatives. With the Reagan administration battling Congress to
keep CIA money flowing to the contras, there were no high-profile
crackdowns that might embarrass the contras and undermine public
support for their war.
No evidence was deigned good enough to justify sullying the
contras' reputation. In 1986, for example, Reagan's Justice Department
rejected the eyewitness account of an FBI informant named Wanda
Palacio. She testified that she saw Jorge Ochoa's Colombian organization
loading cocaine onto planes belonging to Southern Air Transport,
a former CIA-owned airline that secretly was flying supplies to
the contras. Despite documentary corroboration, her account was
dismissed as not believable.
Another contra-cocaine connection ran through Panamanian Gen.
Manuel Noriega, who was recruited by the Reagan administration
to assist the contras despite Noriega's drug-trafficking reputation.
The CIA worked closely, too, with corrupt military officers in
Honduras and El Salvador who were known to moonlight as cocaine
traffickers and money-launderers.
In Honduras, the contra operation tied into the huge cocaine-smuggling
network of Juan Ramon Matta Ballesteros. His airline, SETCO, was
hired by the Reagan administration to ferry supplies to the contras.
U.S. government reports also disclosed that contra spokesman Frank
Arana worked closely with lieutenants in the Matta Ballesteros
Though based in Honduras, the Matta Ballesteros network was
regarded as a leading Mexican smuggling ring and was implicated
in the torture-murder of DEA agent Enrique Camarena.
The CIA knew, too, that the contra-cocaine taint had spread
into President Reagan's National Security Council and into the
CIA through Cuban-American anti-communists who were working for
two drug-connected seafood companies, Ocean Hunter of Miami and
Frigorificos de Puntarenas in Costa Rica. One of these Cuban-Americans,
Moises Nunez, worked directly for the NSC.
In 1987, the CIA asked Nunez about allegations tying him to
the drug trade. "Nunez revealed that since 1985, he had engaged
in a clandestine relationship with the National Security Council,"
the CIA contra-drug report said. "Nunez refused to elaborate
on the nature of these actions, but indicated it was difficult
to answer questions relating to his involvement in narcotics trafficking
because of the specific tasks he had performed at the direction
of the NSC."
The CIA had its own link to the Frigorificos/Ocean Hunter
operation through Felipe Vidal, a Cuban-American with a criminal
record as a narcotics trafficker. Despite that record, the CIA
hired Vidal as a logistics coordinator for the contras, the CIA
report said. When Sen. Kerry sought the CIA's file on Vidal, the
CIA withheld the data about Vidal's drug arrest and kept him on
the payroll until 1990.
These specific cases were not mentioned in the House report.
They also have gone unreported in the major news media of the
Now, with the Democrats on the House Intelligence Committees
joining with their Republican counterparts, the official verdict
on the sordid contra-drug history has been delivered a near
full acquittal of the Reagan administration and the CIA. The verdict
is justified as long as no one reads what's in the government's