Contra-Cocaine: Evidence of Premeditation

June 1, 1998

By Robert Parry

New evidence, now in the public record, strongly suggests that the Reagan administration's tolerance of drug trafficking by the Nicaraguan contras and other clients in the 1980s was premeditated.

With almost no notice in the national press, a 1982 letter was introduced into the Congressional Record revealing how CIA Director William J. Casey secretly engineered an exemption sparing the CIA from a legal requirement to report on drug smuggling by agency assets.

The exemption was granted by Attorney General William French Smith on Feb. 11, 1982, only two months after President Reagan authorized covert CIA support for the Nicaraguan contra army and some eight months before the first known documentary evidence revealing that the contras had started collaborating with drug traffickers.

The exemption suggests that the CIA's tolerance of illicit drug smuggling by its clients during the 1980s was official policy anticipated from the outset, not just an unintended consequence followed by an ad hoc cover-up.

Before the letter's release, the documentary evidence only supported the allegation that Ronald Reagan's CIA concealed drug trafficking by the contras and other intelligence assets in Latin America. The CIA's inspector general Frederick P. Hitz confirmed that long-held suspicion in an investigative report issued on Jan. 29, 1998.

Laundry List

But the newly released letter, placed into the Congressional Record by Rep. Maxine Waters, D-Calif., on May 7, establishes that Casey foresaw the legal dilemma which the CIA would encounter should federal law require it to report on illicit narcotics smuggling by its agents. The narcotics exemption is especially noteworthy in contrast to the laundry list of crimes which the CIA was required to disclose.

Under Justice Department regulations, "reportable offenses" included assault, homicide, kidnapping, Neutrality Act violations, communication of classified data, illegal immigration, bribery, obstruction of justice, possession of explosives, election contributions, possession of firearms, illegal wiretapping, visa violations and perjury.

Yet, despite reporting requirements for many less serious offenses, Casey fought a bureaucratic battle in early 1982 to exempt the CIA from, as Smith wrote, "the need to add narcotics violations to the list of reportable non-employee crimes."

In his letter, Smith noted that the law provides that "when requested by the Attorney General, it shall be the duty of any agency or instrumentality of the Federal Government to furnish assistance to him for carrying out his functions under" the Controlled Substances Act.

But Smith agreed that "in view of the fine cooperation the Drug Enforcement Administration has received from CIA, no formal requirement regarding the reporting of narcotics violations has been included in these procedures." [At the time of Smith's letter, Kenneth Starr was a counselor in the attorney general's office, although it is not clear whether Starr had any input into the exemption.]

On March 2, 1982, Casey thanked Smith for the exemption. "I am pleased that these procedures, which I believe strike the proper balance between enforcement of the law and protection of intelligence sources and methods, will now be forwarded to other agencies covered by them for signing by the heads of the agencies," Casey wrote.

In the years that followed, "protection of intelligence sources and methods" apparently became the catch-all excuse for the CIA's tolerance of South American cocaine smugglers using the contra war as cover. Though precise volume estimates are impossible, the contra-connected drug pipeline clearly pumped tons of cocaine into the United States during the early-to-mid 1980s.

Contra Umbrella

Some contra defenders have argued that the anti-Sandinista armies in Honduras and Costa Rica were not the primary beneficiaries of the narcotics smuggling, that most of the profits probably went to drug lords with few political interests. Still, over the past 15 years, substantial evidence has surfaced revealing that many drug smugglers scurried under the contra umbrella. They presumably understood that the Reagan administration would be loath to expose its pet covert action to negative publicity and possibly even to criminal prosecution.

According to the accumulated evidence, Bolivia's "cocaine coup" government of 1980-82 was the first in line filling the contra drug pipeline. But other contra-connected drug operations soon followed, including the Medellin cartel, the Panamanian government, the Honduran military and Miami-based anti-Castro Cubans. The contra-connected cocaine also moved through transshipment points in Costa Rica and El Salvador. [For details, see Robert Parry's Lost History; Cocaine Politics by Peter Dale Scott and Jonathan Marshall; or Gary Webb's forthcoming book, Dark Alliance.]

Less clear is exactly what the U.S. government knew about the contra-connected drug trafficking and when. Reagan authorized CIA support for the contra army in mid-December 1981. But the first publicly known case of contra cocaine shipments appeared in government files in an Oct. 22, 1982, cable from the CIA's Directorate of Operations.

The cable passed on word that U.S. law enforcement agencies were aware of "links between (a U.S. religious organization) and two Nicaraguan counter-revolutionary groups [which] involve an exchange in (the United States) of narcotics for arms." The material in parentheses was inserted by the CIA as part of its declassification of the cable. The name of the religious group remains secret.

Over the next several years, the CIA learned of other suspected links between the contras and drug trafficking. In 1984, the CIA even intervened with the Justice Department to block a criminal investigation into a suspected contra role in a San Francisco-based drug ring, according to Hitz's report.

In December 1985, Brian Barger and I wrote the first news article disclosing that virtually every Nicaraguan contra group had links to drug trafficking. In that Associated Press dispatch, we noted that the CIA knew of at least one case of cocaine profits filtering into the contra war effort, but that DEA officials in Washington claimed they had never been told of any contra tie-in. The Casey exemption explains why that was possible.

After the AP story ran, the Reagan administration attacked it as unfounded and the article was largely ignored by the rest of the Washington press corps. But it did help spark an investigation by Sen. John Kerry, D-Mass., who over the next two years amassed substantial evidence of cocaine smuggling in and around the contra war. Still, the Reagan and Bush administrations continued to disparage Kerry's probe and its many witnesses.

Through the end of the decade, the mainstream Washington media also denigrated the allegations. In April 1989, when Kerry released a lengthy report detailing multiple examples of how the contra war supplied cover for major drug trafficking operations, the nation's most prestigious newspapers -- The New York Times, The Washington Post and the Los Angeles Times -- published only brief, dismissive accounts.

With the end of the contra war in 1990, the controversy faded further into the historical recesses. The Clinton administration quietly rescinded Casey's narcotics exemption in 1995.

Crack Epidemic

The contra-cocaine issue arose again in 1996 with an investigative series by Gary Webb of the San Jose Mercury-News. Those stories traced how one of the contra drug conduits helped fuel the crack epidemic in Los Angeles.

In response, the major newspapers again rallied to the CIA's defense. They denounced the series as overblown, although finally acknowledging that the allegations raised during the 1980s were true. Webb's series also prompted a new investigation by the CIA's inspector general.

In the first volume of his investigative report, Hitz admitted the CIA knew early on about contra drug trafficking and covered it up. The report's second volume reportedly puts the CIA in even a worse light.

The CIA press office acknowledges that the second volume has been completed, but adds that there is no timetable for releasing a declassified version. "They'll only let it out if they're pressured," commented one U.S. official.

But the CIA apparently is counting on continued disinterest by the national press as a sign that there is no need to revisit the issue. That assessment was bolstered on May 7 when Waters introduced the Casey-Smith letters into the Congressional Record and drew very little media interest in the damaging admissions.

For her part, Waters stated that the Casey-Smith arrangement "allowed some of the biggest drug lords in the world to operate without fear that the CIA would be required to report their activities to the DEA and other law enforcement agencies. ... These damning memorandums ... are further evidence of a shocking official policy that allowed the drug cartels to operate through the CIA-led contra covert operations in Central America."

Though Waters's comments focused on the contra war, Casey's narcotics exemption could have had other CIA covert operations in mind. In the early 1980s, the CIA-backed Afghan mujahedeen also were implicated as major heroin traffickers in the Near East.

But whatever the genesis of the drug exemption, the Casey-Smith exchange of letters stands as important historical evidence bolstering the long-denied allegations of CIA complicity in drug trafficking. Worse yet, the documents are evidence of premeditation.

Copyright (c) 1998

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