Albion Monitor /News

CIA Funded Contras With Crack Sales

With the aid of the CIA, millions of dollars from the sale of crack cocaine were used to fund the Nicaraguan Contras during the Reagan years, according to an investigative series published last month in the San Jose Mercury News.

In addition to funding the war in Central America, the series notes that the CIA's drug operation also brought misery and bloodshed to urban America, as the Crips, Bloods, and other street gangs expanded their influence to sell tons of cocaine throughout the country.

The full text of the series by Gary Webb, "Dark Alliance," is available on the Internet and linked to many source materials not available elsewhere.

"The ends justify the means," the U.S. commander of the Contra group said as justification of the drug operation

The yearlong Mercury News investigation uncovered proof of how financiers for the Fuerza Democratica Nicaraguense (FDN) sold cocaine to a Los Angeles drug wholesaler who turned it into crack. FDN used the cash to buy weapons and equipment for the guerrilla army.

According to the series, the 5,000-man FDN was run by both American and Nicaraguan CIA agents and was the largest of the organizations commonly called the Contras. It was created in mid-1981 when the CIA combined several existing groups of anti-communist exiles into a unified force it hoped would topple the new socialist government of Nicaragua.

Funded by a secret Dec. 1, 1981 order signed President Reagan authorizing the CIA to spend $19.9 million on covert paramilitary operations in Nicaragua, CIA officials acknowledged this was not nearly enough to fund the army. That same year, Danilo Blandon -- called "the Johnny Appleseed of crack" by the San Jose newspaper -- sold $54 million of wholesale cocaine to benefit the FDN.

Although the FDN waged a losing war against the Sandinista government from 1982 to 1988, the Mercury News revealed that Blandon is today a "well-paid and highly trusted operative for the U.S. Drug Enforcement Administration" and one of the DEA's top informants in Latin America.

In March, Blandon was the DEA's star witness at a drug trial in San Diego, where, for the first time, he testified about his career as a drug smuggler. "The ends justify the means," Blandon quoted the U.S. commander of FDN as justification for the operation.

Besides Blandon's testimony earlier this year, the Mercury News investigation used an FBI report from the files of former Iran-Contra Special Prosecutor Lawrence Walsh. Efforts to uncover further connections were blocked by the CIA and DEA on grounds of "national security" or privacy interests.

Similar government claims of privilege have frustrated reporters investigating the story for the past decade, when CBS News producer Leslie Cockburn and Associated Press reporters Brian Barger and Robert Parry first uncovered the CIA Contra-Coke trail. Until now, reports on the topic have been confined to alternative media such as Covert Action.

L.A. gangs used their enormous cocaine profits to arm themselves and spread crack across the country

As the series notes, the CIA funding operation created misery in America's inner cities:

While the FDN's war is barely a memory today, black America is still dealing with its poisonous side effects. Urban neighborhoods are grappling with legions of homeless crack addicts. Thousands of young black men are serving long prison sentences for selling cocaine -- a drug that was virtually unobtainable in black neighborhoods before members of the CIA's army started bringing it into South-Central in the 1980s at bargain-basement prices.

And the L.A. gangs, which used their enormous cocaine profits to arm themselves and spread crack across the country, are still thriving, turning entire blocks of major cities into occasional war zones.

It was not uncommon, according to one source, for them to move $2 million or $3 million worth of crack in one day. An ex-crack dealer told the Mercury News of visiting one of five "cookhouses," where Blandon's powder was turned into crack, and finding huge steel vats of cocaine bubbling atop restaurant-size gas ranges.

It was crack that turned many casual drug users into hard-core addicts -- a "substance that is tailor-made to addict people," the Mercury News quotes Dr. Robert Byck, a Yale University cocaine expert testifying in 1986. "It is as though (McDonald's founder) Ray Kroc had invented the opium den."

Writes Webb, " Crack turned the cocaine world on its head. Cocaine smokers got an explosive high unmatched by 10 times as much snorted powder. And since only a tiny amount was needed for that rush, cocaine no longer had to be sold in large, expensive quantities. Anyone with $20 could get wasted."

Black groups in Los Angeles and elsewhere have demanded a full-scale investigation of the revelations found in the Mercury News' series.

The Black American Political Association of California's Los Angeles Chapter, the newspaper reported in a followup, took to the steps of L.A.'s City Hall and its city council chambers to demand "an immediate, full, thorough and complete investigation ... to determine not only the identities and roles of those who participated in the activity, but also those who covered it up, protected it and knowingly tolerated it."

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Albion Monitor September 2, 1996 (

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