June 18, 1999
Falling Between the Crack
By Robert Parry
Though the CIA publicly has admitted wrongdoing in the Nicaraguan contra-cocaine scandal, Congress has put the controversy back behind closed doors.
The House Intelligence Committee conducted a secret hearing on the CIAs report on May 25, and the panel has no current plans for a public session. While public hearings could still be called, sources close to the committee predict only that a report will be issued containing the panel's final conclusions.
Given the Washington press corps' disdain for the contra-cocaine issue and the Republican control of Congress, chances for any tough conclusions appear slim. In the present environment in Washington, there is scant incentive for the committee to dig deeply or to put the scattered contra-cocaine admissions into any fuller context.
I asked one committee official why Congress had put the contra-cocaine hearings behind closed doors after the CIA issued a declassified report last fall. Why was Congress acting more secretively than the CIA?
The official, who spoke on condition of anonymity, responded that a closed hearings gave the members a chance to "step back and look at what they'd be interested in without having to worry about classification." If the hearing had been open, the official said, some of the committee members questions might have been deferred to a separate closed session.
Citing the panel's secrecy rules, House Intelligence Committee members -- both Republicans and Democrats -- refused to respond to my calls about the May 25 hearing.
The panel also rebuffed Rep. Maxine Waterss request to sit in at the hearing. Waters, D-Calif., has championed efforts to bring the contra-cocaine facts to light and has criticized what she has perceived as unjustified secrecy in the process.
Asked why Waters was barred, the committee official said normal procedures were followed, denying access to members of Congress not specifically designated by the leadership to attend classified oversight hearings. "It's not how the committee does its oversight," the official explained.
The committee official said the purpose of the hearing was to have a "formal presentation" of the contra-cocaine reports by the inspectors general for the CIA and the Justice Department. The House committee has been conducting its own separate review since summer 1996 when a series in the San Jose Mercury News reignited interest in the contra-cocaine issue.
Former CIA inspector general Frederick Hitz, who wrote the two-volume CIA study, was in attendance along with the current CIA inspector general Britt Snyder. Justice Department inspector general Michael Bromwich also was there, the official said.
Both the CIA and the Justice Department issued reports last year, denying that the federal government willfully colluded with contra operatives to smuggle cocaine into the United States.
But the reports contained broad admissions that the CIA knew about the contra-cocaine smuggling, obstructed criminal investigations and systematically covered up evidence that might have been politically harmful to President Reagan's pro-contra policies.
The major media's handling of last year's disclosures, however, so readily accepted the superficial spin of the press releases that the historically devastating admissions were largely missed.
On Oct. 8, 1998, when the CIA released Volume Two of the internal contra-cocaine investigation -- with detailed admissions of wrongdoing -- most big newspapers downplayed the disclosures or wrote nothing at all.
In large part, the neglect seemed to stem from the refusal of the major news organizations to acknowledge that they had missed -- or mis-reported -- one of the worst scandals of the 1980s. During the CIA-backed war, the major media often ridiculed investigators and journalists who took the contra-cocaine allegations seriously.
The big newspapers dug themselves in deeper when they lambasted Gary Webb, then of the San Jose Mercury News, for a series in 1996 linking contra cocaine to the crack epidemic that devastated black inner-city neighborhoods in the 1980s.
After a decade of relegating contra-cocaine allegations to the inside pages, the major newspapers finally played the controversy on page one, but only to attack Webb. The Washington Post, The New York Times and the Los Angeles Times all insisted that the contra-cocaine smuggling was minor and could not be blamed for the crack epidemic.
As the government investigations unfolded, however, it became clear that nearly every major cocaine smuggling network used the contra operation in some way and that the contras were connected -- directly or indirectly -- with possibly the bulk of cocaine that flooded the United States in the 1980s.
Much of that evidence existed prior to the CIA-DOJ inquiries. Sworn testimony before an investigation by Sen. John Kerry, D-Mass., in the mid-to-late 1980s also revealed that the contra-drug link dated back to the origins of the contra war in 1980.
Then, Bolivian drug kingpin Roberto Suarez invested $30 million in various Argentine-run paramilitary operations in Latin America. The Suarez money financed the so-called Cocaine Coup that ousted Bolivia's elected government in 1980, according to one Argentine intelligence official, Leonardo Sanchez-Reisse.
Sanchez-Reisse testified that Suarezs laundered drug money also was used to start the contra operation in Central America. Argentine intelligence officials, fresh from their own dirty war against leftist dissidents, moved to Honduras and began training the remnants of the Nicaraguan National Guard, which had been defeated by the Sandinista guerrilla army.
In 1981, President Reagan ordered the CIA to collaborate with the Argentines in building up the contra army. According to the CIAs Volume Two, the spy agency learned about the cocaine connection almost immediately, secretly reporting that contra operatives were smuggling cocaine to South Florida.
By early 1982, CIA director William J. Casey negotiated a secret memorandum of understanding with Attorney General William French Smith, an agreement that spared the CIA from any legal responsibility to report drug trafficking by its foreign assets.
Also, by the early 1980s, the Bolivian connection had brought the Colombian Medellin cartel into play. During a crucial period from 1980-82, Bolivia's Cocaine Coup government provided a reliable source of cocaine for the fledgling cartel.
Top-level Medellin cartel figures soon picked up on the value of interlocking their operations with the contras. At that juncture, Miami-based anti-Castro Cubans played an important role, representing the Medellin cartel inside contra operations, especially those base in Costa Rica.
Many of the anti-communist Cubans also had longstanding ties to both the CIA and to Mafia-connected drug networks inside the United States. U.S. government agencies again secretly reported on the work of Frank Castro and other contra supporters who were seen as Medellin cartel operatives. But no action was taken.
Other times, Reagans Justice Department stubbornly ignored eyewitness evidence of the problem.
In 1986, Wanda Palacio, an FBI informant inside the cartel, testified that she witnessed Jorge Ochoa's organization loading cocaine onto planes belonging to Southern Air Transport, a former CIA-owned company that flew supplies to the contras for Oliver North's White House operation. Despite impressive corroboration, the Justice Department rejected Palacios testimony in 1986.
Another contra-cocaine connection ran through Pananamian strongman Manuel Noriega, who was recruited by the Reagan administration to assist the contras despite his reputation as a major drug figure. The CIA worked closely, too, with corrupt military officers in Honduras and El Salvador who were known to double as cocaine traffickers.
In Honduras, the contra operation tied into the vast cocaine-smuggling network of Juan Ramon Matta Ballesteros. His airline, SETCO, was hired by the Reagan administration to ferry supplies to the contras.
Though based in Honduras, the Matta Ballesteros network was considered one of the top Mexican smuggling rings and was implicated in the torture-murder of DEA agent Enrique Camarena.
All told, these huge drug networks -- in Bolivia, Colombia, Panama, Costa Rica, Honduras, El Salvador, Mexico and Miami -- accounted for rivers of cocaine inundating the United States during the 1980s. All of them, to some degree, exploited President Reagan's defensiveness over the contra war to protect their drug smuggling.
Most damagingly, the CIA-DOJ reports made clear that the CIA and other Reagan administration agencies repeatedly disrupted official investigations that threatened to expose the contra-cocaine connections.
In 1984, the CIA intervened to curtail the so-called the Frogman Case in San Francisco. When prosecutors planned to question contra political figures in Costa Rica, CIA lawyers approached the U.S. Attorneys office in San Francisco and convinced the prosecutors to drop those plans. The CIA feared the interrogations might prove politically embarrassing.
Other DEA investigations of CIA-controlled hangars at El Salvadors Ilopango airport were stopped as well, by the CIA and the U.S. Embassy. In the latter half of the 1980s, the CIA frustrated congressional inquiries by withholding crucial evidence about connections between the contras and the Medellin cartel, and about contra operatives who had been convicted of drug trafficking.
Though last year's government reports did not highlight these incriminating facts, the reports did acknowledge them. The reports added reams of corroborating evidence, as well.
For instance, the reports noted that a senior contra official, Frank Arana, worked closely with lieutenants in the Matta Ballesteros network and that U.S. law enforcement had its own evidence implicating Southern Air Transport planes in the drug trade.
The CIA also knew that the contra-cocaine taint implicated contractors working directly for the CIA and for President Reagans National Security Council. But that evidence was concealed or released too late to be used effectively by official investigations. [For details about the contra-drug evidence, see Robert Parry's new book, Lost History.]
As the CIA's Volume Two reported, one station chief explained why the spy agency looked the other way on the contra-drug trafficking. "There was derogatory stuff [about the contras], but we were going to play with these guys. That was made clear by" CIA director William Casey and Latin American Division chief Duane Clarridge.
Despite all the new evidence, the GOP-controlled House Intelligence Committee appears unlikely to put these pieces together in a way to give the public a clear look at the big picture. No one should expect a strong indictment of the Reagan administration for tolerating drug trafficking in the 1980s.
But one committee official insisted that the panel would probably not give the CIA a clean bill of health, either. "I didn't hear any member say, 'there's nothing here. Let's move on'," the official said.
Overall, the official said the committee supported the work done by the CIA inspector general. "We believe the unclassified version was a good piece of work," the official said.
The official added that the panel was putting the finishing touches on its own assessment of the controversy. We are nearing the end of the investigation, the official said. But we still have some things to look into.