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CIA Allegedly Linked to Crack Epidemic in Los Angeles; CIA Director Orders Investigation; African-American Leaders Outraged; DEA Agent Supports Charges; Charges Minimized


October 1996

A series of articles in the San Jose Mercury News on August 18-20 alleges that the CIA was involved with Nicaraguan Contra rebels who raised money for weapons by selling cocaine to Los Angeles area street gangs (Gary Webb, "America's 'crack' plague has roots in Nicaragua war," San Jose Mercury News, August 18, 1996, p. A1; Gary Webb, "Shadowy Origins of 'crack' epidemic," San Jose Mercury News, August 19, 1996, p. A1; Gary Webb, "War on drugs has unequal impact on black Americans," San Jose Mercury News, August 20 ,1996, p. A1; Tony Perry and Jesse Katz, "As Drug Debate Rages, Dealer to Be Sentenced," Los Angeles Times (Washington Edition), August 23, 1996, p. B1; Gary Webb, "The Crack Masters," New Times (Los Angeles), September 12-18, 1996, Vol. 1, Num. 4; The San Jose Mercury News series and supporting documentation is available at

Mercury News Allegations

According to the San Jose Mercury News, Nicaraguan Contras, run by the CIA, delivered tons of cut-rate cocaine to a young Los Angeles drug dealer named "Freeway" Rick Ross. Ross, a street-wise drug dealer of mythic reputation, turned the cocaine into crack and supplied the Crips and Bloods street gangs, which saturated the market with crack and used the profits to arm themselves with automatic weapons. The Crips and Bloods developed chapters throughout the west. Ross later moved to Cincinnati and helped spread the crack epidemic across the country. Cocaine was supplied to Ross by Oscar Danilo Blandon Reyes, former leader of the guerrilla army named the Fuerza Democratica Nicaraguense (Nicaraguan Democratic Force) or FDN. Blandon used the millions of dollars paid to him by Ross to buy weapons and equipment for his anticommunist army that unsuccessfully tried to overthrow Nicaragua's Sandinista government in the 1980s. "It is one of the most bizarre alliances in modern history: the union of a U.S.-backed army attempting to overthrow a revolutionary socialist government and Uzi-toting 'gangstas' of Compton and South Central Los Angeles," the Mercury News reported.

The newspaper series said the covert drugs-for-arms trade was implemented because the U.S. Congress had not appropriated funds to help the Contras. But in 1986, after Congress authorized $100 million in military aid to the contras, the operation finally came under fire. On October 27, 1986, agents from the FBI, the IRS, local police and the Los Angeles County Sheriff raided Blandon's organization, but the raids produced no incriminating evidence. Some agents suspected that Blandon was tipped off to the raid. "The cops always believed that investigation had been compromised by the CIA," said Los Angeles federal public defender Barbara O'Connor. But Blandon and Ross eventually received prison sentences for drug offenses. While in prison, Ross testified in 1991 about police corruption in the LA police department.

In 1995 Blandon was given early release on unsupervised probation after serving 28 months of a life sentence. Since then, Blandon has been paid $166,000 by the DEA to provide evidence against Ross and others in the drug trade. Ross, recently paroled, was set up by Blandon and arrested on March 2, 1995 for allegedly buying 100 kilograms of cocaine. During Ross' trial in March 1996, Blandon testified as a witness for the U.S. Department of Justice. Ross' attorney, Alan Fenster sought to question Blandon about his ties with the CIA, but federal prosecutors obtained a court order blocking all questions involving the intelligence agency. Assistant U.S. Attorney L.J. O'Neale objected to the questions because "injecting a false issue would only inflame the truth-seeking process." Fenster said the government's opposition to letting Blandon answer CIA-related questions is damning proof of the agency's culpability. Ross is facing a mandatory life sentence without parole. Sentencing has been postponed because of the allegations in the series.

Webb reports that agents from the DEA, U.S. Customs, the Los Angeles County Sheriff's Department and the California Bureau of Narcotics Enforcement complained that early investigations of the drug ring were hampered by the CIA or unnamed "national security" interests. These investigations included Blandon's boss in the FDN's cocaine operation, Juan Norwin Meneses Cantarero. Meneses, who ran the drug ring from his San Francisco home, never spent a day in a U.S. prison, even though the government was aware of his cocaine dealing since 1974. He was implicated in 45 federal investigations and is listed in the DEA's database as a major international drug smuggler. Still, Meneses managed to live a high profile life in California, buying homes and businesses. "I even drove my own cars, registered in my name," Meneses said during a recent interview in Nicaragua.

News Stories Trigger Demands for Investigation

Los Angeles City Council members voted unanimously on August 23 to ask the U.S. Attorney General for an investigation. Councilman Nate Holden's motion requested the office to "immediately conduct a complete, thorough and independent investigation of. . .allegations as to the ongoing sale of illegal street drugs. . .with the apparent approval of the United States Government" (Associated Press, "L.A. Probes CIA-Cocaine Report," Washington Post (On- line), August 23, 1996).

In a letter to Senator Barbara Boxer (D-CA), dated September 4, CIA Director John Deutch said the CIA inspector general would probe the allegations. "I consider these to be extremely serious charges," Deutch wrote. "Although I believe there is no substance to the allegations in the Mercury News, I do wish to dispel any lingering public doubt on the subject." Deutch added that previous examinations of the issue by the CIA and congressional committees support "the conclusion that the agency neither participated in nor condoned drug trafficking by Contra forces." In particular, he denied that the agency ever had a relationship with Blandon or Meneses, and rejected the allegations that the agency blocked information in the trial of Rick Ross. Boxer had requested the investigation, which Deutch said would be completed within 60 days (Associated Press, "Deutch Orders CIA Drug Probe," Washington Post(On-line), September 5, 1996).

CBC Forum; NAACP Director Arrested at CIA Headquarters

On September 12, members of the Congressional Black Caucus (CBC) called for federal investigations into the allegations. Deutch and Attorney General Janet Reno responded with official denials in separate letters to Rep. Maxine Waters (D-CA), who has led calls for an inquiry. More than 2,500 people attended a discussion of the issue at the Congressional Black Caucus' annual legislative conference in Washington. On the same day, political activist Dick Gregory and national NAACP board member and radio talk show host Joe Madison were arrested outside CIA headquarters as they attempted to hand deliver a copy of the Mercury News series to Deutch. On September 19, Deutch addressed the CBC on Capitol Hill and promised an independent investigation. Though CBC members seemed to be satisfied with Deutch's sincerity, they said it was just a first step (Michael A. Fletcher, "Black Caucus Urges Probe Of CIA-Contra Drug Charge," Washington Post, September 13, 1996, p. A20; Vanessa Gallman, Knight-Ridder News Service, "Talk of CIA coke ring fuels anger," Denver Post, August 13, 1996, p. 1A; Michael A. Fletcher, "Deutch Assures Caucus on Drug Charge," Washington Post, September 20, 1996, p. A4).

According to the Associated Press, the director of national drug control policy, General Barry R. McCaffrey, called for a high-level investigation of the allegations. During an Operation PUSH news conference in Chicago on August 14, McCaffrey said, "Until the American public is fully satisfied, there must be a full and thorough investigation." The charges have become a major topic on black talk radio. "This deserves a serious investigation and debate," said Jesse L. Jackson, head of Operation PUSH (Michael A. Fletcher, "White House Aide Seeks Probe of CIA," Washington Post, September 16, 1996, p. A17; "Drug Director Urges Investigation of C.I.A.," New York Times, September 16, 1996, p. A13).

DEA Agent Supports Charge

On September 23, former DEA agent Celerino Castillo III said he sent reports about Contra drug flights into the United States to the DEA and even spoke to Embassy officials. Castillo, who retired from the DEA in 1992, said he sent cables to Washington with specific dates and flight numbers out of Ilopango, an air base in El Salvador and CIA logistical support center for the Contras. He claims that Americans hired by Contra leaders piloted many of the drug flights. Castillo accused Edwin G. Corr, then-U.S. ambassador to El Salvador of ignoring the flights. According to Castillo, Corr told him: "My hands are tied because these are Contra operations being run by the White House." Castillo said he first revealed what he knew in 1994 when Oliver North, former Reagan White House aide, was seeking election to the U.S. Senate from Virginia. He strongly opposed North because he believed that North had sanctioned the drug flights. North has denied these charges (Robert L. Jackson, "Ex-DEA Agent Ties Contras to U.S. Drug Flights," Los Angeles Times, September 24, 1996, p. A23).

Washington Post debunks Mercury News Account

A Washington Post investigation into the Mercury News allegations found that the evidence does not support the conclusion that the CIA or Nicaraguans played a major role in the emergence of crack cocaine use. The article found that drug trafficking by Blandon, Meneses and other contra sympathizers accounted for only a small portion of the nation's cocaine trade. Blandon moved an estimated five tons of cocaine during the entire 1980s, when more than 250 tons of cocaine were distributed every year. "We are talking about mid-level operators who were not causes of these events but rather participants in something that would have occurred without them," said Jonathan Caulkins, a professor of public policy at Carnegie Mellon University (Roberto Suro and Walter Pincus, "The CIA and Crack: Evidence Is Lacking Of Alleged Plot," Washington Post, October 4, 1996, p. A1).

Gary Webb and attorney Alan Fenster said that Webb gave Fenster the idea that the CIA was involved with Blandon's drug sales. During Fenster's cross-examination of Blandon, U.S. Attorney L. J. O'Neale objected that Fenster's questions were suggestions that Webb had made to him during breaks in the trial, according to a transcript of the trial. O'Neale complained in a recent court filing that the Mercury News articles depend on the Ross case "as the primary source of information" and Ross "then waves the articles aloft as 'proof' that he was right." Mercury News Executive Editor Jerry Ceppos said on October 3 that he did not know that Webb provided questions to Fenster to be asked of Blandon during the trial.

Testifying during Ross' trial, Blandon said he met Ross after Blandon had broken off with Meneses and had stopped sending money to the contras. He also claimed Ross was already "a big coke dealer" and had other sources of supply by the time he met Ross. Blandon testified that he gave Ross low prices because Ross bought in large quantities. Ross supported that testimony under cross-examination when he admitted that he started selling crack in 1979, years before he met Blandon, and expanded sales by emphasizing volume sales and bargain prices. Ross also said in a 1994 interview with the Los Angeles Times that God "put me down to be the cocaine man," and did not mention Blandon or any other Nicaraguans. According to Blandon, Ross was his only African-American client, a claim that discredits the idea that Blandon based his marketing strategy on race.

Senator John F. Kerrey (D-MA), chairman of the Senate subcommittee on terrorism, narcotics and international operations in the 1980s, said recently, "There is no question in my mind that people affiliated with. . .the CIA were involved in drug trafficking while involved in support of the contras, but it is also important to note that we never found any evidence to suggest that these traffickers ever targeted any one geographic area or population group."

In 1994, former DEA agent Castillo and writer Dave Harmon privately published Powderburns: Cocaine, Contras and the Drug War. The first 100 pages of the book is Castillo's autobiography illustrated with photographs, including pictures posed with former President Jimmy Carter and former Vice Presidents George Bush and Dan Quail (sic). Beyond the Contra-cocaine story, Castillo tells of a DEA agent's helicopter joy ride leading to the crashing and destruction of a $500,000 helicopter next to a Guatemalan primary school. The book reports how DEA agents would "use" cocaine smugglers as informants -- but the informants were using the DEA to refuel their aircraft and bring their loads to airfields where they knew DEA agents were not waiting. (Celerino Castillo and Dave Harmon, Powderburns: Cocaine, Contras and the Drug War, Mosaic Press, 1994) -- EES