Albion Monitor /News
[Editor's note: On January 29, the CIA released the first volume of its report on alleged connections between the Agency and crack cocaine dealers. To no one's surprise, the report, "The California Story," claimed that the CIA did not know of any connections between the U.S.-funded contras and the sale of drugs in Los Angeles, San Francisco, or elsewhere.

That report did concede that there was a relationship between U.S. drug dealers and contra leaders including Eden Pastora, and that tens of thousands of dollars and other gifts were given to contras or their associates by top players in the drug trade. The CIA report also noted that another dealer was told that some of the proceeds from several million dollars of coke sales were given to contras. But the Agency notes that there is no connection between that dealer and the CIA.

The Monitor has published many stories on this issue with links to further information. We suggest reading the "Darker Alliances" editorial and three part news feature, where the Monitor named it the top story of 1996. Particularly valuable is a feature, "The CIA, the Contras and Crack Cocaine" by Dennis Bernstein and Robert Knight, also available in a 1996 edition.]

CIA Admits Knowledge of Contra Drug Trafficking

by Peter Zirnite

1982 CIA agreement did not require agency officials to report allegations of drug trafficking
(IPS) WASHINGTON -- CIA officials, while aware that "dozens of individuals and a number of companies" who supported contra rebels in Nicaragua in the 1980s were suspected drug traffickers, did nothing to cut their ties with these people or organizations -- some of whom where bringing drugs into the United States.

CIA Inspector General Frederick R. Hitz revealed this in testimony last week before the House intelligence committee. His statement further undermined CIA efforts to distance itself from drug traffickers who supported contra forces. He revealed, for the first time, a 1982 agreement under which agency officials were not required to report allegations of drug trafficking involving "non-official employees."

Despite the revelations, Hitz insisted that "we found absolutely no evidence to indicate that the CIA as an organization or its employees were involved in any conspiracy to bring drugs into the United States."

The CIA never interviewed several key figures -- including former Reagan White House Aid Oliver North
His conclusions were based on two agency investigations -- one that examined claims of ties between the CIA and Nicaraguan drug dealers who fueled the crack cocaine epidemic in Southern California and an on-going probe into broader claims links between CIA-sponsored contras and drug trafficking.

Members of the House panel and other lawmakers, however, questioned the agency's ability to investigate itself and its claim that it "left no stone unturned" before concluding that it had no direct or indirect ties to two Nicaraguan drug dealers operating in California, each of whom provided some $40,000 to the contras.

Among the shortcomings, the lawmakers said, was the fact that the CIA never interviewed several key figures -- including former Reagan White House Aid Oliver North, who directed fund-raising for the contras.

The hearing on Mar. 16 was called to review the inspector general's 156-page report on his investigation into claims that the CIA, through its ties to Nicaraguan drug dealers, was linked to the introduction of crack cocaine into Los Angeles, allegations that were raised by a series of articles published in the San Jose Mercury News in August 1996.

Hitz said his 17-month investigation, the "most comprehensive and exhaustive ever conducted" by the agency, found no evidence that linked any past of present CIA officials to the drug dealers mentioned in the articles. Nor, he added, could it substantiate claims by two drug dealers -- Norwin Meneses and Danilo Blandon -- that they each provided as much as $40,000 to the Nicaraguan Democratic Front (FDN), one of several contra armies.

Rep. Juanita Millender-McDonald and Rep. Maxine Waters, both Democrats, questioned the thoroughness of the CIA's initial investigation and its conclusions. The two lawmakers' Los Angeles districts were at the epicenter of the crack epidemic.

"The ultimate question is: can the CIA investigate itself?" said Millender-McDonald, who called for the public release of the some 250,000 pages of documents the agency reviewed as part of its initial probe. The report showed that the CIA "turned a blind eye, at best" to allegations that contra forces and their supporters were involved in drug trafficking, she said.

She accused the agency of using cleverly worded denials and selective quotations from documents
Waters declared the report was "fraught with contradictions and illogical conclusions" and said the CIA's sweeping denial of links to drug traffickers in Southern California "defies the evidence."

She accused the agency of using cleverly worded denials and selective quotations from documents to support its conclusions, which should be dismissed because they lacked credibility.

Both Millender-McDonald and Waters questioned why several key former CIA officials were not interviewed as part of the investigation. Among those who declined the agency's request for interviews were former Costa Rican station chief Joseph Fernandez and others who, Waters noted, "had major responsibilities for the CIA's contra operations."

Hitz responded by noting that he lacks the subpoena power needed to compel former agency employees to testify. And he discounted the importance of Fernandez and others to his investigation by saying he did not believe any of those how refused to talk had "any significant information that would have substantially altered the conclusions of the report."

Under questioning from Rep. Norman Dicks, the ranking Democrat on the intelligence panel, Hitz admitted that North, despite his prominent role in organizing contra forces, was not interviewed by the CIA. At first, the inspector general tried to dismiss the need to interview North by noting investigators had reviewed all of the testimony he had given during earlier congressional probes, but he eventually acknowledged that the previous investigations did not address the issues currently being examined.

"I think that is one person you should go interview," Dicks said. He suggested that the intelligence committee call its own hearings to question North, Fernandez and other U.S. officials not interviewed by the CIA.

Waters' questioned how CIA top officials could not be aware that Meneses and other contra supporters were involved in drug trafficking, despite considerable evidence. He was answered when Hitz revealed that in 1982, then Attorney General William French Smith and the CIA reached an agreement under which agency officers were not required to report allegations of drug-trafficking involving "agents, assets and non-officials employees."

Hitz stressed that, despite the agreement, which remained in effect until 1995, agency officials did become aware of numerous allegations of drug trafficking by contra supporters. But, he admitted, "there are instances where CIA did not, in an expeditious or consistent fashion, cut off relationships with individuals supporting the contra program who were allegedly to have engaged in drug-trafficking activity or take action to resolve the allegations."

The CIA's 600-page, classified report on its wider probe into links between U.S.-backed contra forces and drug trafficking will be delivered to Congress later this month, according to Hitz.

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Albion Monitor March 23, 1998 (

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