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December 14, 1999
Hyde’s Blind Eye: Contras & Cocaine

By Dennis Bernstein & Leslie Kean

Henry Hyde, who starred as chief House manager in President Clinton's impeachment, played a very different role a decade earlier.

In 1987, instead of the grim prosecutor set on punishing Clinton for his sex-and-lies offenses, Hyde was the glib defense attorney searching for reasons to spare President Reagan from possible impeachment over the Iran-contra scandal and related drug crimes implicating the Nicaraguan contra army.

As a member of the congressional Iran-contra committee, Hyde vigorously defended Reagan’s Iran-contra activities and steered the panel away from any serious investigation of the contra-cocaine connection.

The suppression of that contra-cocaine probe, in particular, proved crucial in shielding Reagan and his vice president, George Bush, from blame for a policy that fueled America's cocaine pandemic and wreaked havoc on cities across the nation.

While it is not clear exactly what Hyde knew about the contra-cocaine corruption in 1987, government investigators already had collected strong evidence of widespread criminality.

The contra-cocaine issue had surfaced publicly in 1985 and had become the subject of a Senate inquiry in 1986. Even earlier, the CIA and the Drug Enforcement Administration were aware of the contra-cocaine problem.

Those early suspicions have now been proved out. Last year, CIA inspector general Frederick Hitz issued a lengthy report admitting that drug traffickers permeated the contra movement from its inception in the early 1980s and that contra-cocaine smuggling continued throughout the decade. [For details on Hitz’s report, see Robert Parry's Lost History.]

According to the CIA inspector general's report, the evidence showed that from the start, the CIA knew the contras were involved in "criminal activities," including terrorist bombings, hijackings and narcotics trafficking.

By 1981, contra operatives had delivered their first shipment of cocaine to the United States, the report revealed. The inspector general also confirmed that drug traffickers from the Medellin cartel secretly collaborated with contra operatives to pump money into the contra war.

We now know, too, that in 1982, Reagan's first attorney general, William French Smith, gave the CIA legal clearance to work with drug traffickers without a requirement to report on their criminal activities.

This so-called "memorandum of understanding" was effectively a carte blanche for the CIA to ignore drug operatives working in the contra movement as well as other CIA-backed projects.

Though now confirmed by the CIA’s inspector general and other investigators, the contra-cocaine charges were a matter of heated denials in the mid-1980s -- when the drug smuggling actually was taking place.

"The government made a secret decision to sacrifice a part of the American population for the contra effort," testified Washington attorney Jack Blum before the Senate Intelligence Committee in 1996. Blum had been special counsel to Sen. John Kerry's Senate Foreign Relations subcommittee on terrorism and narcotics.

Reagan administration officials also were "quietly undercutting law enforcement and human-rights agencies that might have caused them difficulty," Blum stated. "Policy makers absolutely closed their eyes to the criminal behavior of the contras."

From his twin perch on the House Intelligence Committee and the congressional Iran-contra panel, Henry Hyde was especially well positioned to stop potential threats to the contras from law-enforcement officials and congressional investigators who were compiling the evidence.

Hyde’s spot at the nexus of information made him one of President Reagan’s most important defenders.

One of the Illinois Republican’s principal contributions to the contra-cocaine cover-up was his championing of a bogus 1987 investigative report largely clearing the contras of drug-trafficking suspicion.

The 900-word memo, drafted by Iran-contra committee staff member Robert A. Bermingham, claimed that a thorough investigation into the drug-trafficking charges had found no evidence that the contra leadership was implicated in narco-trafficking. Bermingham submitted the memo to Iran-contra committee chairman, Rep. Lee Hamilton, on July 23, 1987.

"During the course of our investigation, the role of U.S. government officials who supported the contras and the private resupply effort, as well as the role of private individuals in resupply, were exhaustively examined," Bermingham wrote.

"Hundreds of persons, including U.S. government employees, contra leaders, representatives of foreign governments, U.S. and foreign law enforcement officials, military personnel, private pilots and crews involved in actual operations were questioned and their files and records examined. …

“There was no information developed indicating any U.S. government agency or organization condoned drug trafficking by the contras or anyone else.”

More broadly, Bermingham disparaged the contra-cocaine allegations as self-serving claims coming from disreputable individuals.

"During the course of our investigation, we examined files of State, DOD, NSC, CIA, DEA, Justice, Customs and FBI, especially those reportedly involving newspaper allegations of contra drug trafficking,” he said. “We have discovered that almost all of these allegations originate from persons indicted or convicted of drug smuggling."

Bermingham also reported that "contra leaders have been interviewed and their bank records examined. They denied any connection with or knowledge of drug trafficking. Examination of contra financial records, private enterprise business records, and income tax returns of several individuals failed to find any indication of drug trafficking."

Bermingham then concluded, "additional investigation of these allegations is unwarranted in view of the negative results to date."

While Bermingham's description of his investigation sounded impressive, the memo offered virtually no documentation from -- or even identification of -- the "hundreds" of witnesses supposedly questioned.

There were no excerpts from depositions, no quotes from the files, no references to specific records examined, no citation of which foreign governments had cooperated or how, no detailing of the witness accounts alleging contra-drug trafficking and how those stories were debunked.

Though the Democrats soon realized that Bermingham’s sweeping claims were not supported by the evidence, Hyde signed off on it and used the memo to disparage anti-contra evidence coming from other investigators.

Hyde cited the memo as proof that the Democrats had “left no stone unturned” in efforts to hurt the contras, but still had come up empty.

With Hyde’s backing, the Bermingham memo galvanized a Washington conventional wisdom that the contra-cocaine charges had been thoroughly investigated and discredited.

What is now even more troubling about the memo -- and Hyde’s endorsement -- is that recent internal investigations by the CIA and the Justice Department have revealed that the agencies and the groups cited by Bermingham actually possessed significant proof of contra-connected drug trafficking in their files.

The agencies also knew that criminal investigations had been sidetracked for political reasons. For example, the CIA and Justice Department acknowledged that investigative leads into a 1983 drug-smuggling case in San Francisco were dropped after CIA officials expressed concerns that contra leaders in Costa Rica could be implicated.

Consider also what was going on at the NSC and the State Department in 1985-86: NSC aide Oliver North had teamed up with four companies owned and operated by drug traffickers -- and North helped arrange State Department contracts to pay all four for shipping non-lethal supplies to the contras.

According to government documents, the companies were:

--SETCO Air, owned and operated by the notorious Honduran drug trafficker Ramon Matta Ballesteros.

--DIACSA, the Miami-based headquarters for major traffickers, Floyd Carlton and Alfredo Caballero.

--Vortex, an air service partly owned by drug trafficker Michael Palmer, descibed in court records as "working for the largest marijuana cartel in the history of the country."

--Frigorificos de Puntarenas, a Costa Rican seafood exporter established by the Medellin cartel and operated by Cuban-American traffickers.

Months before the Bermingham memo -- on March 25, 1987 -- the CIA also had interviewed Cuban-American Moises "Dagoberto" Nunez about his role in Frigorificos, according to the CIA inspector general’s report.

Nunez "revealed that since 1985 he had engaged in a clandestine relationship with the National Security Council," the CIA report stated, adding: "Nunez … indicated that it was difficult to answer questions relating to his involvement in narcotics trafficking because of the specific tasks he performed at the direction of the NSC."

The Reagan administration also knew that Felipe Vidal, another Cuban-American working for the CIA and Frigorificos, had a criminal record as a drug trafficker, according to the inspector general’s report.

Defenders of Hyde and the Bermingham memo could argue that the CIA withheld much of this evidence from Congress, that Hyde and Bermingham were more dupes than conscious participants in a cover-up.

But there still was a significant body of incriminating evidence before the Iran-contra committees in 1987. Senior CIA officials, Alan Fiers and Joe Fernandez, had told the Iran-contra investigators that drugs were a significant problem on the so-called Southern Front in Costa Rica.

Also, by the time of Bermingham's memo, Robert Owen, a North intermediary and an early congressional witness, had turned over contra files that referred to drug trafficking.

When one of Palmer's planes crash-landed in 1986, Owen had written to North, "no doubt you know that the DC4 … was used at one time to run drugs and part of the crew had criminal records. Nice group the boys chose."

Contrary to Bermingham’s "exhaustively" researched memo, too, some contra leaders were acknowledging financial and material support from drug traffickers.

One leader, Octaviano Cesar, admitted receiving help from notorious drug trafficker George Morales. Cesar justified the arrangements as necessary for "the security of my country."

Bermingham’s tarring of “almost all” the witnesses as convicted or charged criminals did not turn out to true, either. Indeed, many of the witnesses who described contra-drug activity worked for the DEA or the FBI.

Throughout 1986, the Kerry investigation was forwarding contra-drug evidence to the Justice Department, including the testimony of one FBI informant named Wanda Palacio.

Palacio gave an eyewitness account of Colombian drug traffickers loading cocaine onto planes belonging to the CIA-connected airline, Southern Air Transport, in 1983 and 1985.

She identified one of the SAT pilots as contra fly-boy Wallace "Buzz" Sawyer and placed him at the airport in Barranquilla, Colombia, in early October 1985.

Sawyer died when his contra plane was shot down in Nicaragua on Oct. 5, 1986, but his flight logs were recovered and revealed that he had flown SAT planes into Barranquilla on several days in early October 1985.

Palacio was one of the many corroborated witnesses who was not a convicted criminal, but whose information was nonetheless rejected by Reagan’s Justice Department and, presumably, by Bermingham’s study.

Indeed, from a review of the evidence available just in 1987, it seems like Bermingham must have been interviewing a different set of government officials and contra leaders than those who had caught the attention of Kerry and other investigators.

As Kerry's final report summarized: "It is clear that individuals who provided support for the contras were involved in drug trafficking. It is also clear that the supply network of the contras was used by drug trafficking organizations, and elements of the contras themselves knowingly received financial and material assistance from drug traffickers.

“In each case, one or another agency of the U.S. government had information regarding the involvement either while it was occurring or immediately thereafter."

Though Bermingham's memo now appears to have been a sham report based on a selective reading of the record, it dealt a powerful blow to those who favored a broader Iran-contra investigation in 1987.

In particular, Hyde seized on the document as proof that critics were falsely maligning the contras. Hyde also scolded the Democrats for not highlighting the exculpatory memo in their final Iran-contra report when it was released in November 1987.

"The fact is that the committees' staff left no stone unturned in its efforts to obtain information that might be politically damaging to the Resistance," the contras, declared Hyde and other committee Republicans in a footnote to the final report.

"The committees' investigators reviewed major portions, if not all, of the contras' financial records; met with witnesses who alleged the Resistance was involved in terrorism or drug-running; investigated the financial conduct of the [State Department's non-lethal contra aid program, and] received no credible evidence of misconduct by the Resistance.

"It came as little surprise, of course, that the committees' majority does not explicitly acknowledge this. … For this reason, suggestions that the committees have not investigated such matters, and other committees of Congress should, ought to be seen for what they are: political harassment by congressional opponents of the Resistance."

In the years that followed, some of those most troubled by Hyde's protection of the drug-tainted contra operation have been agents of the Drug Enforcement Administration.

Michael Levine, a former undercover DEA agent, has reviewed the evidence of the Reagan administration’s complicity in the contra-cocaine operations and asserted that he has put corrupt police officers in prison for much less.

"Imagine this, here you have Oliver North, a high-level official in the National Security Council running a covert action in collaboration with a drug cartel," Levine said.

"That's what I call treason [and] we'll never know how many kids died because these so-called patriots were so hot to support the contras that they risked several generations of our young people to do it."

Levine still fumes when he reviews the incriminating entries in North's notebooks that were turned over to the congressional committees. On July 12, 1985, for instance, North wrote about one contra arms warehouse in Honduras: "Fourteen million to finance came from drugs."

"What the hell does that mean, and where does Congressman Hyde think the drugs went that paid for the contras' weapons? Into kids' bodies," Levine said.

Levine viewed Hyde as a protector of the dirty secrets, even if he did not participate directly in the contra-cocaine operations. "As a key member of the joint committees, he certainly played a major role in keeping the American people blindfolded about this story," Levine said. "There was plenty of hard evidence. … The totality of the whole picture is very compelling. This is very damning evidence. ...

"In my book, Big White Lie, I [wrote] that the CIA stopped us from indicting the Bolivian government at the same time contra assets were going down there to pick up drugs. When you put it all together, you have much more evidence to convict Ollie North, [former senior CIA official] Dewey Clarridge and all the way up the line, than they had in any John Gotti [Mafia] case."

Celerino Castillo III was a top DEA agent in El Salvador who encountered obstructions in the mid-1980s when his undercover work turned up links between the contra-supply operation and cocaine trafficking.

"They were running narcotics and weapons out of Ilopango to support the contras," Castillo said in an interview. "We're talking about very large quantities of cocaine and millions of dollars. … There's no doubt about it; we saw the cocaine and the boxes full of money."

Castillo said the operation was run out of "Hangars 4 and 5 controlled by North and the CIA with [former CIA officer] Felix Rodriguez. The cocaine was transshipped from Costa Rica through El Salvador and into the United States."

The DEA agent detailed how known traffickers with multiple DEA files used the two hangars and how they had obtained U.S. visas with the help of the U.S. government.

Castillo said his reports were very thorough and included "not only the names of traffickers, but their destinations, flight paths, tail numbers and the date and time of each flight." According to Castillo, the drug planes flown by contra pilots came from Costa Rica and sometimes the drugs came on military aircraft from Panama.

The top drug pilot flying for the contra network then was Francisco Guirola Beeche, Castillo said. Guirola's name was all over DEA databases, according to Castillo, and the aircraft was on a watch list for drug trafficking.

Guirola, an associate of Salvadoran death squad leader Roberto D'Aubuisson, ran afoul of U.S. law on Feb. 6, 1985, when his plane landed in Texas with nearly $6 million in suspected drug money on board.

Authorities seized the money -- which Guirola said was going to finance political operations of D’Aubuisson’s right-wing ARENA party. But Reagan administration prosecutors soon released the plane and offered to free Guirola on probation.

The plea bargain was so lenient that it mystified U.S. District Judge Hayden Head Jr., who complained that “the punishment doesn’t fit the crime.” But prosecutors persuaded the judge to approve the deal. [AP, June 13, 1985]

By letting Guirola go free, the plea bargain prevented a thorough examination of the source of Guirola’s money.

The drug-trafficking evidence at Hangars 4 and 5 might have raised suspicions, too, about Cuban-American Felix Rodriguez who oversaw the contra-supply operations for Oliver North. Rodriguez had been placed in El Salvador by Vice President Bush's office.

During the Iran-contra hearings, the former CIA paramilitary expert received laudatory treatment from Hyde and other committee Republicans. When Rodriguez testified, Hyde showered the former CIA officer with praise for battling communism, but Hyde avoided questions about the shadowy operations at Hangars 4 and 5.

Hyde also shifted the blame to Congress for the contras’ need for money. "I know there is a zeal among some to confine this inquiry to who did what, and ignore why," Hyde declared.

"And I just want to make the point that I think why some of these things were done contributes to a fuller understanding of who and what [was done], and that the nonfeasance of Congress may well turn out to be every bit as important as the misfeasance or malfeasance of certain individuals."

A mountain of evidence now exists to back up the fact that the contras were connected to major cartel trafficking operations.

Yet, because of the aggressive defense played by Hyde and other Republicans -- not to mention the timidity of senior Democrats -- North and other key officials escaped serious investigation on drug charges.

Indeed, North nearly won a U.S. Senate seat in 1994 and has emerged since as a national television personality on NBC's cable news networks.

For Hyde, there have been honors, too. On March 4, 1991, then-CIA director William Webster awarded Hyde a CIA Seal Medallion for his "tremendous service" and his "sustained outstanding support" for the CIA.

Without doubt, Hyde performed a “tremendous service” for the spy agency and its public reputation. At a pivotal moment in the 1980s, Hyde helped keep the lid on some of the CIA’s dirtiest secrets.

Hyde’s performance was in marked contrast to his moral zeal in the 1990s when confronting President Clinton’s dissembling about sexual peccadillos.

This article is adapted from a book by Dennis Bernstein and Leslie Kean, entitled Henry Hyde’s Moral Universe: Where More Than Space and Time Are Warped, published by Common Courage Press. The book can be ordered from or by calling 1-800-497-3207.

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