San Jose Mercury News (CA)
'CRACK' PLAGUE'S ROOTS
ARE IN NICARAGUA WAR COLOMBIA-BAY AREA DRUG PIPELINE HELPED FINANCE CIA-BACKED
CONTRAS '80S EFFORT TO ASSIST GUERRILLAS LEFT LEGACY OF DRUGS, GANGS IN
August 18, 1996
Edition: Morning Final
GARY WEBB, Mercury News
Memo: See related stories
on pages 16A,17A
Additional reporting for
this series in Nicaragua and Costa Rica was done by Managua journalist
Georg Hodel. Research assistance at the Nicaraguan Supreme Court in Managua
was done by journalist Leonore Delgado.
Illustration: Map, Photos
Caption: MAP: PAI - MERCURY
How the Colombia cocaine
cartels made the California connection
Land, sea and air: the
smuggling routes [from mid 1970s to 1991]
[Map shows smuggling routes
and means of transportation][960818 FR 16A 1; color]
PHOTO: 1984 MEETING: Contra
political chief Adolfo Calero, center, and Norwin Meneses, right, in San
Francisco[960818 FR 17A 1]
PHOTO: Enrique Miranda
Told Meneses' deep secrets[960818
FR 17A 2]
PHOTO: DANILO BLANDON:
The son of a wealthy Managua slumlord set up the system.[960818 FR 1A
PHOTO: NORWIN MENESES:
A drug smuggler with ties to Somoza went to work for the Contras.[960818
FR 1A 4; color]
PHOTO: RICK ROSS: The street
connection in the partnership that started a flood of cocaine into the
United States.[960818 FR 1A 2; color]
For the better part of
a decade, a Bay Area drug ring sold tons of cocaine to the Crips and Bloods
street gangs of Los Angeles and funneled millions in drug profits to a
Latin American guerrilla army run by the U.S. Central Intelligence Agency,
a Mercury News investigation has found.
This drug network opened
the first pipeline between Colombia's cocaine cartels and the black neighborhoods
of Los Angeles, a city now known as the ''crack'' capital of the world.
The cocaine that flooded in helped spark a crack explosion in urban America
- and provided the cash and connections needed for L.A.'s gangs to buy
automatic weapons. 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 the Uzi-toting ''gangstas'' of Compton and South-Central
Los Angeles. The army's financiers - who met with CIA agents both before
and during the time they were selling the drugs in L.A. - delivered cut-rate
cocaine to the gangs through a young South-Central crack dealer named
Ricky Donnell Ross.
Unaware of his suppliers'
military and political connections, ''Freeway Rick''' - a dope dealer
of mythic proportions in the L.A. drug world - turned the cocaine powder
into crack and wholesaled it to gangs across the country. The cash Ross
paid for the cocaine, court records show, was then used to buy weapons
and equipment for a guerrilla army named the Fuerza Democratica Nicaraguense
(Nicaraguan Democratic Force) or FDN, the largest of several anti-communist
groups commonly called the Contras. 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 brought 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. ''There is a saying that the ends justify the means,''
former FDN leader and drug dealer Oscar Danilo Blandon Reyes testified
during a recent cocaine trafficking trial in San Diego. ''And that's what
Mr. Bermudez (the CIA agent who commanded the FDN) told us in Honduras,
OK? So we started raising money for the Contra revolution.''
Recently declassified reports,
federal court testimony, undercover tapes, court records here and abroad
and hundreds of hours of interviews over the past 12 months leave no doubt
that Blandon was no ordinary drug dealer. Shortly before Blandon - who
had been the drug ring's Southern California distributor - took the stand
in San Diego as a witness for the U.S. Department of Justice, federal
prosecutors obtained a court order preventing defense lawyers from delving
into his ties to the CIA. Blandon, one of the FDN's founders in California,
''will admit that he was a large-scale dealer in cocaine, and there is
no additional benefit to any defendant to inquire as to the Central Intelligence
Agency,'' Assistant U.S. Attorney L.J. O'Neale argued in his motion shortly
before Ross' trial on cocaine trafficking charges in March. The most Blandon
would say in court about who called the shots when he sold cocaine for
the FDN was that ''we received orders from the - from other people.''
The 5,000-man FDN, records
show, 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.
From 1982 to 1988, the
FDN - run by both American and Nicaraguan CIA agents - waged a losing
war against Nicaragua's Sandinista government, the Cuban-supported socialists
who'd overthrown U.S.-backed dictator Anastasio Somoza in 1979.
Blandon, who began working
for the FDN's drug operation in late 1981, testified that the drug ring
sold almost a ton of cocaine in the United States that year - $54 million
worth at prevailing wholesale prices. It was not clear how much of the
money found its way back to the CIA's army, but Blandon testified that
''whatever we were running in L.A., the profit was going for the Contra
At the time of that testimony,
Blandon was a full-time informant for the Drug Enforcement Administration,
a job the U.S. Department of Justice got him after releasing him from
prison in 1994. Though Blandon admitted to crimes that have sent others
away for life, the Justice Department turned him loose on unsupervised
probation after only 28 months behind bars and has paid him more than
$166,000 since, court records show.
''He has been extraordinarily
helpful,'' federal prosecutor O'Neale told Blandon's judge in a plea for
the trafficker's release in 1994. Though O'Neale once described Blandon
to a grand jury as ''the biggest Nicaraguan cocaine dealer in the United
States,'' the prosecutor would not discuss him with the Mercury News.
A known dealer since '74has
stayed out of U.S. jails Blandon's boss in the FDN's cocaine operation,
Juan Norwin Meneses Cantarero, has never spent a day in a U.S. prison,
even though the federal government has been aware of his cocaine dealings
since at least 1974, records show.
Meneses - who ran the drug
ring from his homes in the Bay Area - is listed in the DEA's computers
as a major international drug smuggler and was implicated in 45 separate
federal investigations. Yet he and his cocaine-dealing relatives lived
quite openly in the Bay Area for years, buying homes in Pacifica and Burlingame,
along with bars, restaurants, car lots and factories in San Francisco,
Hayward and Oakland. ''I even drove my own cars, registered in my name,''
Meneses said during a recent interview in Nicaragua.
Meneses' organization was
''the target of unsuccessful investigative attempts for many years,''
prosecutor O'Neale acknowledged in a 1994 affidavit. But records and interviews
revealed that a number of those probes were stymied not by the elusive
Meneses but by agencies of the U.S. government.
Agents from four organizations
- the DEA, U.S. Customs, the Los Angeles County Sheriff's Department and
the California Bureau of Narcotic Enforcement - have complained that investigations
were hampered by the CIA or unnamed ''national security'' interests. 1988
investigationhit a wall of secrecy
One 1988 investigation
by a U.S. Senate subcommittee ran into a wall of official secrecy at the
Justice Department. In that case, congressional records show, Senate investigators
were trying to determine why the U.S. attorney in San Francisco, Joseph
Russoniello, had given $36,000 back to a Nicaraguan cocaine dealer arrested
by the FBI. The money was returned, court records show, after two Contra
leaders sent letters to the court swearing that the drug dealer had been
given the cash to buy weapons for guerrillas. Russoniello said it was
cheaper to give the money back than to disprove that claim.
''The Justice Department
flipped out to prevent us from getting access to people, records - finding
anything out about it,'' recalled Jack Blum, former chief counsel to the
Senate subcommittee that investigated allegations of Contra cocaine trafficking.
''It was one of the most frustrating exercises that I can ever recall.''
It wasn't until 1989, a
few months after the Contra-Sandinista war ended and five years after
Meneses moved from the Peninsula to a ranch in Costa Rica, that the U.S.
government took action against him - sort of. Federal prosecutors in San
Francisco charged Meneses with conspiracy to distribute one kilo of cocaine
in 1984, a year in which he was working publicly with the FDN.
In S.F. photo, Menesesseen
with CIA operative Meneses' work was so public, in fact, that he posed
for a picture in June 1984 in a kitchen of a San Francisco home with the
FDN's political boss, Adolfo Calero, a longtime CIA operative who became
the public face of the Contras in the United States.
According to the indictment,
Meneses was in the midst of his alleged cocaine conspiracy at the time
the picture was taken. But the indictment was quickly locked away in the
vaults of the San Francisco federal courthouse, where it remains today
- inexplicably secret for more than seven years. Meneses was never arrested.
Reporters found a copy
of the secret indictment in Nicaragua, along with a federal arrest warrant
issued Feb. 8, 1989. Records show the no-bail warrant was never entered
into the national law enforcement database called NCIC, which police use
to track down fugitives. The former federal prosecutor who indicted him,
Eric Swenson, declined to be interviewed. After Nicaraguan police arrested
Meneses on cocaine charges in Managua in 1991, his judge expressed astonishment
that the infamous smuggler went unmolested by American drug agents during
his years in the United States. ''How do you explain the fact that Norwin
Meneses, implicated since 1974 in the trafficking of drugs . . . has not
been detained in the United States, a country in which he has lived, entered
and departed many times since 1974?'' Judge Martha Quezada asked during
a pretrial hearing.
''Well, that question needs
to be asked to the authorities of the United States,'' replied Roger Mayorga,
then chief of Nicaragua's anti-drug agency. U.S. officials amazedMeneses
His seeming invulnerability
amazed American authorities as well. A Customs agent who investigated
Meneses in 1980 before transferring elsewhere said he was reassigned to
San Francisco seven years later ''and I was sitting in some meetings and
here's Meneses' name again. And I can remember thinking, 'Holy cow, is
this guy still around?' '' Blandon led an equally charmed life. For at
least five years he brokered massive amounts of cocaine to the black gangs
of Los Angeles without being arrested. But his luck changed overnight.
On Oct. 27, 1986, agents
from the FBI, the IRS, local police and the Los Angeles County sheriff
fanned out across Southern California and raided more than a dozen locations
connected to Blandon's cocaine operation. Blandon and his wife, along
with numerous Nicaraguan associates, were arrested on drug and weapons
The search warrant affidavit
reveals that local drug agents knew plenty about Blandon's involvement
with cocaine and the CIA's army nearly 10 years ago.
''Danilo Blandon is in
charge of a sophisticated cocaine smuggling and distribution organization
operating in Southern California,'' L.A. County sheriff's Sgt. Tom Gordon
said in the 1986 affidavit. ''The monies gained from the sales of cocaine
are transported to Florida and laundered through Orlando Murillo, who
is a high-ranking officer of a chain of banks in Florida named Government
Securities Corporation. From this bank the monies are filtered to the
Contra rebels to buy arms in the war in Nicaragua.'' Corporate records
show that Murillo - a Nicaraguan banker and relative of Blandon's wife
- was a vice-president of Government Securities Corporation in Coral Gables,
a large brokerage firm that collapsed in 1987 amid allegations of fraud.
Murillo did not respond to an interview request. Despite their intimate
knowledge of Blandon's operations, the police raids were a spectacular
failure. Every location had been cleaned of anything remotely incriminating.
No one was ever prosecuted. Ron Spear, a spokesman for Los Angeles County
Sheriff Sherman Block, said Blandon somehow knew that he was under police
surveillance. Others thought so, too.
''The cops always believed
that investigation had been compromised by the CIA,'' Los Angeles federal
public defender Barbara O'Connor said in a recent interview. O'Connor
knew of the raids because she later defended the raids' leader, Sgt. Gordon,
against federal charges of police corruption. Gordon, convicted of tax
evasion, declined to be interviewed. Lawyer suggests aidwas at root of
FBI records show that soon
after the raids, Blandon's defense attorney, Bradley Brunon, called the
sheriff's department to suggest that his client's troubles stemmed from
a most unlikely source: a recent congressional vote authorizing $100 million
in military aid to the CIA's Contra army. According to a December 1986
FBI Teletype, Brunon told the officers that the ''CIA winked at this sort
of thing. . . . (Brunon) indicated that now that U.S. Congress had voted
funds for the Nicaraguan Contra movement, U.S. government now appears
to be turning against organizations like this.'' That FBI report, part
of the files of former Iran-Contra Special Prosecutor Lawrence Walsh,
was made public only last year, when it was released by the National Archives
at the Mercury News' request.
Blandon has also implied
that his cocaine sales were, for a time, CIA-approved. He told a San Francisco
federal grand jury in 1994 that once the FDN began receiving American
taxpayer dollars, the CIA no longer needed his kind of help.
''When Mr. Reagan get in
the power, we start receiving a lot of money,'' Blandon testified. ''And
the people that was in charge, it was the CIA, so they didn't want to
raise any (drug) money because they have, they had the money that they
''From the government?''
asked Assistant U.S. Attorney David Hall. ''Yes, for the Contra revolution,''
Blandon said. ''So we started - you know, the ambitious person - we started
doing business by ourselves.'' Asked about that, prosecutor Hall said,
''I don't know what to tell you. The CIA won't tell me anything.''
None of the government
agencies known to have been involved with Meneses and Blandon over the
years would provide the Mercury News with any information about them.
A Freedom of Information
Act request filed with the CIA was denied on national security grounds.
FOIA requests filed with the DEA were denied on privacy grounds. Requests
filed months ago with the FBI, the State Department and the Immigration
and Naturalization Service have produced nothing so far.
None of the DEA officials
known to have worked with the two men would talk to a reporter. Questions
submitted to the DEA's public affairs office in Washington were never
answered, despite repeated requests. Blandon's lawyer, Brunon, said in
an interview that his client never told him directly that he was selling
cocaine for the CIA, but the prominent Los Angeles defense attorney drew
his own conclusions from the ''atmosphere of CIA and clandestine activities''
that surrounded Blandon and his Nicaraguan friends.
'Was he involved with the
CIA? Probably. Was he involved with drugs? Most definitely,'' Brunon said.
''Were those two things involved with each other? They've never said that,
obviously. They've never admitted that. But I don't know where these guys
get these big aircraft . . .''
That very topic arose during
the sensational 1992 cocaine trafficking trial of Meneses after Meneses
was arrested in Nicaragua in connection with a staggering 750-kilo shipment
of cocaine. His chief accuser was his friend Enrique Miranda, a relative
and former Nicaraguan military intelligence officer who had been Meneses'
emissary to the cocaine cartel of Bogota, Colombia. Miranda pleaded guilty
to drug charges and agreed to cooperate in exchange for a seven-year sentence.
In a long, handwritten
statement he read to Meneses' jury, Miranda revealed the deepest secrets
of the Meneses drug ring, earning his old boss a 30-year prison sentence
in the process.
''He (Norwin) and his brother
Luis Enrique had financed the Contra revolution with the benefits of the
cocaine they sold,'' Miranda wrote. ''This operation, as Norwin told me,
was executed with the collaboration of high-ranking Salvadoran military
personnel. They met with officials of the Salvadoran air force, who flew
(planes) to Colombia and then left for the U.S., bound for an Air Force
base in Texas, as he told me.'' Meneses - who has close personal and business
ties to a Salvadoran air force commander and former CIA agent named Marcos
Aguado - declined to discuss Miranda's statements during an interview
at a prison outside Managua in January. He is scheduled to be paroled
this summer, after nearly five years in custody.
U.S. General Accounting
Office records confirm that El Salvador's air force was supplying the
CIA's Nicaraguan guerrillas with aircraft and flight support services
throughout the mid-1980s. Miranda did not name the Air Force base in Texas
where the FDN's cocaine was purportedly flown. The same day the Mercury
News requested official permission to interview Miranda, he disappeared.
While out on a routine
weekend furlough, Miranda failed to return to the Nicaraguan jail where
he'd been living since 1992. Though his jailers, who described him as
a model prisoner, claimed Miranda had escaped, they didn't call the police
until a Mercury News correspondent showed up and discovered he was gone.
He has not been seen in
nearly a year.