Jack Blum, former special counsel to
the Senate Foreign Relations Committee,
Subcommittee on Terrorism, Narcotics and International Operations;
Frederick Hitz, CIA Inspector General; and
Michael Bromwich, Justice Department Inspector General
216 Hart Office Building
Oct. 23, 1996
The subject of today's hearings involves the allegations of CIA involvement in the United States drug sales to finance the contras in the Nicaraguan war. This is the first day when Senator Kerrey and I could get together after the Senate recess.
We are going to proceed today in our oversight capacity on the Central Intelligence Agency. We are going to hear from witnesses Jack Blum, who was formerly counsel to the Senate Foreign Relations Subcommittee, and the inspector generals from the Department of Justice and also the CIA, to outline the scope of the investigation which will be undertaken on this important matter.
[For brevity sake, a large section of introductory comments have been removed and place here. What immediately follows is Jack Blum's testimony.]
Jack Blum is the former special counsel to the Senate Foreign Relations Subcommittee on Terrorism, Narcotics and International Operations. And that subcommittee conducted an extensive inquiry and filed an extensive report back in 1989, and we're very interested in those findings at that time, and we now turn to you.
MR. BLUM: Mr. Chairman, I very much appreciate the invitation to appear here this morning. I find it ironic in a way that I'm here in the same room where we began hearings on the same subject in 1988, in January of 1988. We began the investigation in 1987. The questions you put this morning are questions which are extraordinarily important. The question of reform of the intelligence community really requires that these issues be debated publicly and discussed publicly. And I would hope that the inquiry goes beyond the narrow questions posed in the San Jose Mercury News story.
The answer you get to the questions you ask depends totally on how you frame the question. If you ask the question: Did the CIA sell drugs in the black neighborhoods of Los Angeles to finance the contra war, the answer will be a categorical no. The fact of the matter is we found no evidence whatsoever to suggest that there was a targeting of the African-American community. Cocaine in the mid-'80s and into the early '90s was a perfect equal opportunity destroyer. We had addiction and problems in school yards across America. It didn't matter what color you were, where you were from, what your national origin was. The problem became more acute in the African-American community because the definition of a problem addict in America is an addict who runs out of money, and if you run out of money quickly, you become involved in the drug trade, you become a visible social problem and you get on the screen. In fact, the stockbrokers, the entertainers, the lawyers who used cocaine around America escaped that attention, but their lives were ruined, too, perhaps not financially.
The second issue is did the CIA do the selling of the cocaine, and did the contras profit? And as far as we were able to determine, no member of the staff of the CIA -- that is someone on the payroll, as opposed to people they work with -- was in the cocaine business. And, certainly, no one on the staff of the CIA, as far as we could determine, was actively selling the drug. And then, finally, the question of was it used to support the contras; I will tell you of two meetings that I had with contra veterans, one in 1986 and one in 1989, at the beginning and the end of my investigation. And they said: "Our problem was we never had any money. Our leadership stole most of it. They had houses in Miami; they had opportunities to gamble. They had girlfriends; they traveled. And we who are in the field" -- and one of the groups that I talked to had men who lost their arms and their eyes and their legs, fighting the Sandanistas -- "we in the field had none of the benefit." So I submit what went on led to the profit of people in the contra movement, not to supporting a war that we were trying to advance.
Now having said that, we have to go back to what is true. And what is true is the policy-makers absolutely closed their eyes to the criminal behavior of our allies and supporters in that war. The policy-makers ignored their drug dealing, their stealing, and their human-rights violations. The policy-makers -- and I stress policy- makers -- allowed them to compensate themselves for helping us in that war by remaining silent in the face of their impropriety, and by quietly undercutting law enforcement and human-rights agencies that might have caused them difficulty.
We knew about the connection between the West Coast cocaine trade and the contras. There was an astonishing case called the "Frogman (sp) Case." In that case -- I believe it was in that case -- the United States attorney for San Francisco, a man by the name of Russonello (sp), returned $35,000 of cocaine proceeds, voluntarily, to the contras, when it had been seized as the proceeds of drug trafficking. And we found that absolutely astonishing. I know of no other situation where the Justice Department was so forthcoming in returning seized property.
SEN. SPECTER: Was that the Justice Department or the district attorney of San Francisco --
MR. BLUM: This was the Justice Department, the United States attorney.
SEN. SPECTER: -- the United States attorney?
MR. BLUM: That's correct.
SEN. SPECTER: All right.
MR. BLUM: We had a telephone conversation with Mr. Russonello (sp) asking him to provide us documents and access to the people involved in the case and he shouted at us, he shouted at Senator John Kerry, who chaired the committee. He accused us of being subversive for wanting to go into it. It should be stressed that the Blandon-Meneses ring was part of a very much larger picture. And to give you an idea of how large that picture was, there was a point where the wholesale price of cocaine on the street in Los Angeles reached $2,500 a kilo. We were talking about cocaine that was available in such quantity they could not find buyers; $2,500 a kilo, according to all the experts, is below cost. And that is a flood of cocaine. And our friend, Freeway Rickie, was touching only a tiny fraction of what was coming in. We had a definite cocaine epidemic.
Now, you might ask, why did the hearings we ran in 1989 and the report we released in -- or the hearings we ran in '88 and the report we released in 1989 not get more attention? And the answer is we were subject to a systematic campaign to discredit everything we did. Every night after there was a public hearing, Justice Department people, administration people would get on the phone and call the press and say the witnesses were all liars, they were talking to us to get a better deal, that we were on a political vendetta, that none of it was to be believed, and please don't cover it. The consequence of that was the hearing and the report were given very modest play in the press. I think the report and the hearing, as you go into this matter and look at some of the transcripts -- and I do hope you'll get the actual records and closed session and deposition hearings from the archives, where they all are, and I hope all of that is made public -- you'll find we did a rather thorough job. It was a systematic effort to discredit us that prevented the conclusions from receiving the attention I believe they warranted.
Now, I would argue that over a period, a long period of years, covert operations were undertaken -- and it's not only the CIA, obviously the decision in that area is at a political level, and the CIA would be an implementing agency --were taken on a ideological basis that verged on religious belief, and with an eye to short-term results and not long-term consequences.
Never again should that kind of ideological blindness and short-term vision infect intelligence assessments.
In the 1980s, all of us could count the number of people dead on the streets of America as a result of the drug problem. You couldn't find me a single person in America who had died as a result of an attack by a Sandinista inside our borders. There should have been some ability to notice that distinction and understand the importance of the drug problem and understand that that had to be addressed, and at the very least, that anything you did to solve any other foreign policy problem not make the drug problem worse.
I think that among the other things you should be looking at is a review of the relationship in general between covert operations and criminal organizations. The two go together like love and marriage. And it's a problem which really has to be understood by this committee. Criminal organizations are perfect allies in a covert operation. If you sent me out of the country to risk my life for the government to do something as a spy in a foreign land, I would think criminals would be my best ally. They stay out of reach of the law, they know who the corrupt government officials are, and they have them on the payroll. They'll do anything I want for money. It's a terrific working partnership. The problem is that they then get empowered by the fact that they work with us. So now they have stature and influence and impact in their own country, and if they have influence with politicians and people who come to power, we now have a new powerful criminal enterprise, and we can't always control what they do once we stand down. And unfortunately, we have yet to figure out how to prevent criminal friends from becoming an albatross.
There's a second problem, and that is, when you run covert operations, you train people in a lot of skills. Unfortunately, the story of Adam and Eve stays with us. Once you learn something, once you've bitten the apple of knowledge, you can't unlearn it, ever.
And when you teach people how to change their identity, how to hide from the law, how to build bombs, how to assassinate people, they don't forget how to do it, and you wind up, after the covert action is over, with a disposal problem. We've never been very good at handling disposal.
We had that problem in the Bay of Pigs. Bay of Pigs veterans have turned up in everything from Watergate to the Letelier assassination. There's a list that's so long it's painful to recount.
Now the connection with the drug trade -- and I had to go into much of this in preparation for the hearing, and we heard it again and again from people we talked to -- goes way back. We were involved in assisting the Kwoman Tong (sp) armies against Mao Zedong in the 1950s. During that period, we supported people who were in the heroin trade in the mountains of Burma, and those Kwoman Tong (sp) armies helped themselves and financed themselves out of the heroin business. It turned up again in the Vietnam War, where our allies the Muong tribesmen were in the heroin business.
There were many accusations and all kinds of stories about was the CIA dealing heroin. And the answer was "We're not doing it" -- probably true -- "it's our allies, and we have to work with whoever we have to work with." In Afghanistan recently, we've had allies who went into the heroin business big-time. It's the largest cash crop in Afghanistan. It's the most important export from the region. It's coming out by the ton. And we also have a disposal problem. We have all kinds of people who have been trained in bomb-making, and by God, they've been with us everywhere from the World Trade Center to Paris and all over the world, wherever there's somebody who doesn't suit their ideological tenor.
Now to turn specifically to the Latin American story and where our investigation picks up on the drug trail, we had testimony from a man who was a civilian employee of Argentine military intelligence, Leandro Sanchez Reiz (sp). He told us that the United States had encouraged the Argentine military to act as proxy for the United States during the Carter administration, because we had a public policy of supporting human rights and another policy of really trying to sustain our anti-communist efforts. And the Argentines, he said, sponsored the cocaine coup in Bolivia and then set up a money- laundering operation in Fort Lauderdale. And we later checked, and indeed he had set up that operation. And he used the money-laundering operation in Fort Lauderdale to provide funds to the Argentines all over Latin America who were in the business of, quote, "fighting communism."
We should remember that it was the Argentines who were the original trainers of the contras. They were the ones who brought the original contras to Honduras, Guatemala, and began to teach them how to do what they had to do against the Sandinista government. Sanchez Reiz (sp) told us that he believed that the region the Argentines were so willing to go to war with the British over the Falklands was that the Argentine generals seriously thought that the assistance they had given us, the covert assistance they had given us, was going to put them in our good graces to the point where we would side with them. A tragic mistake, indeed, if he was correct.
The second man who turned up on our screen very big time was General Noriega. And as you'll recall -- press accounts have said it, the government has made this public -- so I'm not saying anything that's classified, Noriega was on our payroll. The accounts we heard were that he was getting paid some $200,000 a year by the United States government. At the time that was going on, virtually everybody who dealt with him knew he was in the drug business. It was an open secret. In fact, it was so open, it appeared on the front page of the New York Times in June of 1986. I testified about it in a closed session of the Foreign Relations Committee in 1986.
We have, as the absolute low point of the contra war, Ollie North having a meeting with General Noriega, and he recorded that meeting in great detail in his notebooks, in which he's bargaining with Noriega. Noriega says to him, I've got this terrible public relations problem over drugs, what can you do to help me? Here's what I'll do to help you; I'll assassinate the entire Sandinista leadership, I'll blow up buildings in Managua. Ollie doesn't call the cops; what Ollie does is he goes back to Poindexter, and Poindexter says, "Gee, that's a little bit extreme. Can't you get him to tone it down? Go back and meet with him again." Which Ollie does.
When our committee asked the General Accounting Office to do a step-by-step analysis of just who in our government knew that General Noriega was dealing drugs and when they knew it and what they did to act on that knowledge, the administration told every agency of the government not to cooperate with GAO, labeled it a national security matter, and swept it into the White House and cloaked it in executive privilege. That investigation never went forward, should have gone forward. I was very much dismayed. Our committee subpoenaed Ollie North's notebooks, and the history of those notebooks is quite astonishing. Not many people realize this, but the Senate never got a clean copy of those notebooks. North's lawyers were permitted to expurgate sections of the notebooks based on, quote, "relevance." Our committee subpoenaed those notebooks and we engaged in a 10-month battle to get them, and ultimately, the investigation ended, the subcommittee's mandate ended, we never got them. On top of the fact that clean copies --
SEN. SPECTER: Well, why wasn't it pursued at that time?
MR. BLUM: The administration, to begin with, classified the notebooks -- and this is truly bizarre because they remained in Ollie's possession -- at the code word level. The expurgated copies were kept in your committee's office --(laughter, cheers) -- under code word -- under code word classification. When I read those diaries --
SEN. SPECTER: Well, it wasn't exactly my committee's office, it was the Senate Committee's office.
MR. BLUM: No, but I said your -- (laughter) -- "your" in the sense of the Intelligence Committee's office.
SEN. SPECTER: And I was not the chairman at that time.
MR. BLUM: Yes. Yes. And that was quite proper because those were the rules.
SEN. SPECTER: Well, the question that I raised, Mr. Blum, is there are ways of dealing with claims of executive privilege, and they can be taken to the courts, and the courts have a rule that the privilege is not well-founded on some occasions, and there are remedies which the Senate can undertake to deal with the administration when the administration acts improperly.
MR. BLUM: Right. Well, we started down the track. The effort to get the subpoenas became mired in the presidential campaign and the political debate surrounding it. The committee --
SEN. SPECTER: There's always one of those going on!
MR. BLUM: (Chuckles.) The committee's mandate expired and, frankly, I can't tell you why in the ensuing Congress it wasn't pursued.
There was a later effort by the National Security Archive under the Freedom of Information Act to get further declassification and release of the notebooks. They succeeded to some degree. The notebooks in their entirety are still not public, and my belief is that your committee, the Intelligence Committee, should undertake at the earliest opportunity a complete investigation of the notebook situation and do your best to make it public to restore some degree of confidence in the process. (Applause.)
Now, the problem of General Noriega and Ollie North's notebooks and what was in them is only one of a number of problems related to this war and related to drug trafficking that we stumbled into. We had problems in Haiti, where friends of ours -- that is, intelligence sources in the Haitian military -- had turned their facilities, their ranches and their farms over to drug traffickers. Instead of putting pressure on that rotten leadership of the Haitian military, we defended them. We held our noses, we looked the other way, and they and their criminal friends distributed, through a variety of networks, cocaine in the United States -- in Miami, in Philadelphia, New York and parts of Pennsylvania.
Honduras was another country that was key for the contras. Honduras was the base of contra operations. Most of the contra supplies came through Honduras. We wanted to do nothing to embarrass the Honduran military. Ramon Matta Ballesteros, a member of a gang that was involved in the Camarena murder, went to Honduras and found refuge there. He was walking the streets of Tegulcigalpa openly and publicly. The response of the United States government was to close the DEA office in Honduras and move the agent stationed there to Guatemala. We took testimony from that DEA agent. He said it made no sense. The drug trafficking was going on in Honduras, and the Honduran military were at the center of it.
When the war ended, almost the minute the war ended, to our credit, the administration arranged the midnight extradition of Mr. Matta Ballesteros, who is currently serving a life term in American prisons. The response of the Honduran military was to allow a mob to burn down a portion of the U.S. facilities in Tegulcigalpa.
But we sat by, as long as they were helping us, and allowed them to carry on their illegal business.
We also became aware of deep connections between the law- enforcement community and the intelligence community. I, personally, repeatedly heard from prosecutors and people in the law-enforcement world that CIA agents were required to sit in on the debriefing of various people who were being questioned about the drug trade. They were required to be present when witnesses were being prepped for certain drug trials. At various times the intelligence community inserted itself in that legal process.
I believe that that was an impropriety; that that should not have occurred.
SEN. SPECTER: Well, when you say -- (applause from audience) -- when you say "inserted itself" into that "process," are you suggesting that the intelligence community thwarted or stopped prosecutions, which should have --
MR. BLUM: That too.
SEN. SPECTER: -- from going forward?
MR. BLUM: That too. That too. (Applause.)
SEN. SPECTER: Well, could you be -- (applause) --
MR. BLUM: Let me explain --
SEN. SPECTER: We're going to have to have this hearing conducted without interruptions from the audience. You are all here, and you're all invited to stay; but if there are interruptions, we can clear the room. Proceed, Mr. Blum.
MR. BLUM: There were first participations in the investigative process; a process and procedure for clearing informants, that were put on by DEA; a process of being there for debriefings of important witnesses.
But then, when there were criminal cases that threatened to expose various covert operations in the region, those criminal cases would be then put aside, for one reason or another. And there was a procedure for doing that within the Department of Justice. We attempted to probe that procedure. The Department of Justice rebuffed us rather systematically. We had some conversations with one of the Justice Department officials involved and took his deposition, but we were never able to get really satisfactory responses to the questions we asked. We do know that Ollie North directly intervened, in a number of cases, to help people who had helped the covert war.
SEN. SPECTER: Well, Mr. Blum, when you come to that subject; during my earlier tenure on this committee, I saw that done, much to my dissatisfaction. There is a statute, which sets forth proceedings where the Department of Justice is authorized to drop prosecutions where they cannot make disclosures of confidential informants. And I personally have questioned the wisdom of that kind of a procedure, but it is authorized by U.S. law.
MR. BLUM: Mmm-hmm. Well --
SEN. SPECTER: And this committee was frequently rebuffed by claims of that sort. But let me ask you, on a question relevant here, did you ever see any of that interference by U.S. intelligence, CIA or otherwise, of any prosecutions against cocaine in Los Angeles?
MR. BLUM: We did not focus on Los Angeles and Los Angeles prosecutions. I can tell you there were cases in Miami, and there were other cases in other parts of the country.
SEN. SPECTER: Well, were they cases --
MR. BLUM: And I think we referred to them -- and if you dig into the materials -- I can't remember them all off the top of my head --
SEN. SPECTER: All right. You say there were not cases in Los Angeles, but were there -- that you saw --
MR. BLUM: I -- we didn't find them. That doesn't mean there weren't any.
SEN. SPECTER: Well, I understand that, but I'm asking whether you found them. But you say you did find such cases in Miami.
MR. BLUM: Right.
SEN. SPECTER: Now did those cases permit cocaine dealers to continue to operate? MR. BLUM: One had the sense they did, but we could not get -- when we got into this area, we confronted an absolute stone wall. Bill Weld, who was then the head of the Criminal Division, put a very serious block on any effort we made to get information. There were stalls. There were refusals to talk to us, refusals to turn over data. An assistant U.S. attorney who gave us some information was reprimanded and disciplined, even though it had nothing to do with the case. In a confidential way --
SEN. SPECTER: And who was he?
MR. BLUM: -- he simply told us about procedure.
SEN. SPECTER: Who was he?
MR. BLUM: I don't recall his name, but it's in our hearing materials, and we can furnish that for the record.
We had a series of situations where Justice Department people were told that if they told us anything about what was going on, they would be subject to very severe discipline. And I got a lot of backdoor information, and then I was told I couldn't ever use it, because the careers of the people involved would be seriously compromised.
Now we had another problem --
SEN. SPECTER: Well, now wait a minute. When you were told that, did you make any efforts to use that information?
MR. BLUM: Yes.
SEN. SPECTER: What did you do?
MR. BLUM: We went back to the Justice Department. We talked to them. We said, "We really want to talk to these people," and they simply stonewalled us.
SEN. SPECTER: Now you're saying that you received information on a voluntary basis --
MR. BLUM: Mmm-hmm. (Affirmative.)
SEN. SPECTER: -- but under an agreement not to use it, because it would affect the careers of those individuals.
MR. BLUM: Right.
SEN. SPECTER: And you honored those (terms ?)?
MR. BLUM: We honored the confidentiality; it's the only way -- (chuckling) --I'm sure you understand that -- that you can ever get anyone to talk to you. But then we went back and tried to get the information on the cases, and as soon as we did, the answer was: "Sorry, we can't do that." And there were a thousand excuses.
We ran into another procedure which was extremely troubling. There was a system for stopping Customs inspections of inbound and outbound aircraft from Miami and from other airports in Florida. People would call the Customs office and say, "Stand down. Flights are going out. Flights are coming in."
We tried to find out more about that and were privately told, again by Customs people who said "Please don't say anything," that the whole thing was terribly informal and there was no real way of determining the legitimacy of the request to stand down, or the legitimacy of what was on the plane and going out to people in the field. That I found to be terribly troubling, and it's a matter that you all should be looking at very carefully.
There was a flip side to this drug problem, as well. One of the favorite techniques of various people in this operation was whenever there was someone they didn't like, they would label them a "drug trafficker." So we ran into the case of Ron Martin, who had set up an arms warehouse in Tegucigalpa, Honduras. And he did it at the request of various friends of his in the U.S. government, and it was sort of a prepositioning of weapons to help the contras. And the idea was that, when the ban on direct aid was lifted, his stuff could be sold. Ron Martin was a potential competitor of the Secord-North supply network. North started telling everyone that the Martin warehouse was financed by cocaine, not to deal with it. And the impact was to destroy Ron Martin financially. So this became a matter of affirmative and negative use.
I would say that, based on my experience with this affair and my look at the long history of our covert operations dealing with criminals and drug dealers, that this entire affair needs a thorough review; a historical review, as well as the narrow review of the issues posed by the article in the San Jose Mercury. The problem, as I see it, is if you go to bed with dogs, you get up with fleas. (Laughter.) If you empower criminals because empowering them happens to be helpful at the time, the criminals are sure to turn on you next. And the people who plan covert operations should know that, and should be held accountable for not telling their bosses, if in fact they're dealing with this kind of guy and they do come back and bite them.
The most important loss that we had as a result of the covert war in Central America was the loss of public trust in the honesty and integrity of the people who run America's clandestine operations. The measure of that is how ready everyone is to believe Freeway Ricky and his fable about being the arm of the CIA in selling crack in Los Angeles.
Ricky deserves life in prison for what he did to his people in his community. The CIA didn't make him do it, and the profits from his deals certainly didn't go to help the contras. But that does not mean that there is not a need for a very powerfully done investigation and a backward look at the entire 40-year history of this problem.
Thank you, Mr. Chairman. (Applause.)
SEN. SPECTER: We will proceed with 10-minute rounds as to your testimony, Mr. Blum, because it will differ substantially in nature from Mr. Hitz and Mr. Bromwich.
Let me begin with the overall question as to whether you believe that the United States has now placed proper emphasis on counter- narcotics as a foreign policy goal.
MR. BLUM: Yes, I do. I think the priorities have changed very substantially. And I'm very pleased to report that we have correctly now assessed narcotics and international organized crime as a significant threat.
SEN. SPECTER: Do you think the interdiction of the international flow of narcotics has been successful? Have we stopped drugs from coming in from Latin America, from Mexico?
MR. BLUM: We have not. We have terrible problems in Mexico. We have terrible problems still in Latin America. And we have problems coming at us in terms of heroin from Asia and from Latin America, as well.
SEN. SPECTER: Should the United States be doing more to stop the flow of drugs into the United States?
MR. BLUM: I think so, yes.
SEN. SPECTER: Mr. Blum, let me go back to the specifics of the Mercury News series because we are focused on that here. And you have raised quite a number of other issues and they're all very important, but did the principal participants in the current allegations -- that is, Blandon and Meneses --figure in any of the investigation which your subcommittee did?
MR. BLUM: Yes. As I said, we knew about Meneses. I believe one of Senator (Kerry's/Kerrey's ?) staff did interview Meneses at one point. We were aware of that cocaine ring, and as I said, when we tried to get information through government channels, we were blocked.
SEN. SPECTER: Was there any information that you did get that linked either Blandon or Meneses to the CIA?
MR. BLUM: Not directly, no.
SEN. SPECTER: Well, indirectly?
MR. BLUM: Indirectly, I would have to say yes. And here I'm relying on an eight-year memory. When I say yes, let me explain what I mean. We had people in the contra movement, southern front contras -- and indeed, there's a television -- a video deposition of one of them who says, look, I discussed the problem of the drug dealing among our number with my case officer, and he told me --
SEN. SPECTER: Now who was that, who was that who was on the video?
MR. BLUM: This is a contra leader. He was a member of the contra directorate. We took his deposition in video form in San Jose, Costa Rica.
SEN. SPECTER: Do you recall his name?
MR. BLUM: Not off the top of my head.
SEN. SPECTER: Okay.
MR. BLUM: I just -- I just at the moment can't recall who it was. He told us that he had discussed the drug problem, and his case officer said, "Look, there's nothing we can do about it, you do what you have to do. Just don't tell me any more about it."
SEN. SPECTER: He discussed the drug problem with his case officer?
MR. BLUM: That's correct.
SEN. SPECTER: And what kind of a case officer was that?
MR. BLUM: CIA. And we have that just straightforward. The reaction of the people who were running the covert operation, as best as we could determine, was: Look, we've been sent here to Central America to do a job. Our job is to win this war against the Sandinistas and to change the political climate here. We're not in the law enforcement business. We can't be playing cops with the people who are working with us. If there's drug trafficking, let the DEA deal with it, but we have to do what we have to do, and please don't let that other mission interfere with what we have to do because, by God, it's difficult enough.
SEN. SPECTER: So what you're saying is that the CIA individual did not stop him from dealing in drugs?
MR. BLUM: Right.
SEN. SPECTER: But he did not encourage him to deal drugs?
MR. BLUM: No.
SEN. SPECTER: Or did not use the --
MR. BLUM: But he then also --
SEN. SPECTER: Excuse me. Excuse me, the question's not finished. Or did not use the proceeds or encourage the use of those proceeds to finance the contras?
MR. BLUM: Not at all. And as I said before, all of the people who played in this took the money and put it in their pockets.
Now, there's one other thing you have to understand about the situation in Central America at the time, and it's relevant to the question you asked. There were facilities that were needed for running the war -- clandestine airstrips, cowboy pilots who would fly junker airplanes, people who would make arrangements for the clandestine movement of money -- every one of those facilities was a perfect facility for someone in the drug business.
So there were people who were connected very directly to the CIA who had those facilities and allowed them to be used and indeed personally profited from their use as drug trafficking --
SEN. SPECTER: Now do you have any specifics on that -- who from --
MR. BLUM: I do, and I --
SEN. SPECTER: Well, let me finish the question. Who from the CIA permitted those facilities to be used?
MR. BLUM: It's not that someone from the CIA permitted them to be used, it's that a contract employee had the facilities. He was doing a job. That job wasn't delivering drugs for the CIA --
SEN. SPECTER: A contract employee, but not a member of the CIA?
MR. BLUM: That's right. And what --
SEN. SPECTER: So the contract employee allowed those facilities to be used, and the contract employee benefited from the (proceeds ?)?
MR. BLUM: You bet. You bet.
SEN. SPECTER: Okay.
MR. BLUM: And none of that money went to the contras. And I -- I've shared with your staff the name of a person involved. I don't want to here violate the secrecy requirements that we were bound by.
The point is that this was going on in tandem with the war, and the people who were organizing it from our side saw all of it. In fact, you had to be blind not to see it. And instead of trying to stop it or say, "Wait a minute, we really ought to change our policy here or rethink how we're doing it," they went forward and said, "We're going to solve the problem with the Sandinistas, and the devil take this other set of issues."
SEN. SPECTER: Mr. Blum, referring now to some specific individuals who have been cited in the Mercury News series, Adolfo Calero and Enrique Bermudez, were either of those individuals involved in the investigations which you conducted?
MR. BLUM: Certainly. They were central figures in the contra movement, and their names came up again and again in conversations about the problem. Now --
SEN. SPECTER: Were they involved in cocaine drug trafficking?
MR. BLUM: Directly? Directly, to my knowledge, I -- no. I have to say no.
SEN. SPECTER: All right. Indirectly, to your knowledge?
MR. BLUM: Their -- many of their people and their close associates were.
SEN. SPECTER: But how about those individuals specifically?
MR. BLUM: I can't say that I have evidence of it.
SEN. SPECTER: And who among their close associates were involved?
MR. BLUM: We have listed people in the report. We have additional material, and you'll find it in our transcripts. After eight years, I can't list names --
SEN. SPECTER: Okay.
MR. BLUM: -- and if I did, I'd be taking a terrible risk.
SEN. SPECTER: Well, I can understand that. Are any of those individuals identified in the San Jose Mercury series?
MR. BLUM: Not to my recollection, no.
SEN. SPECTER: Going back to the issue of covert operations, Mr. Blum, based on what you have found, do you think the United States Congress, as a matter of public policy, ought to ban covert operations?
MR. BLUM: I think that there may in some circumstances, desperate matters of national urgency, be some kind of argument for them. But I will say that in my experience, we have rarely considered the blowback, we have rarely considered the long-term political consequence, and if you look at the kind of catastrophic record that the operations that got us tangled up in the drug business led to, I would say they failed. Remember, we lost the war in the Nicaragua. Remember that our dear friends in the Argentine military disappeared thousands of people. Look at the horrible, brutal reality of Pinochet's Chile and ask what kind of threat there was to the United States that warranted that kind of behavior.
SEN. SPECTER: Well, I come to the public policy question because this committee has been very deeply involved and is continuing at this moment on evaluation of what may or may not be covert activities, and I'm interested in your judgment. But your net conclusion is that there are some situations which may be sufficiently serious to warrant covert activities?
MR. BLUM: There may be, but I believe that nowhere near the scale, not even a smidgen of the scale that they were carried out on in the past, and certainly a complete rethink of the idea of building alliances with criminals and drug dealers.
SEN. SPECTER: Well, are you --
MR. BLUM: I think we need to spend much more money on overt diplomacy and on public help for people who are our friends and on real diplomacy. We've slashed the State Department budget by a tremendous amount and not done the same for the intelligence budget. I find that quite mysterious.
SEN. SPECTER: Do you think we have slashed the State Department too much for the past several years?
MR. BLUM: Way too much. There's no money for people to travel; no money for them to negotiate, no money to bring foreign leaders here to teach them, to educate them; no opportunity to bring emerging leadership here. We have a very real budgetary problem in the State Department.
SEN. SPECTER: Well, my time is up, and I want to just ask you two very pointed questions. When you say that there have been too many covert activities, are you aware of how many covert activities there have been? Because the findings are secret. They're made by the president. They're supposed to be secret.
There are a fair number that do remain secret, believe it or not, because this committee does review them. So I just wonder what your basis --
MR. BLUM: Well --
SEN. SPECTER: Let me finish the --
MR. BLUM: -- you know, one of the difficulties --
SEN. SPECTER: Now wait a minute. Let me finish the question. So the question is, what is your basis of knowledge as to the covert activities which are -- which have been undertaken, to say that there are too many?
MR. BLUM: I have now spent a number of years in the field, that is, traveling around the world talking to people. I will give you just one experience with Washington's notion of secrecy and the world's notion of secrecy. It was one of my first trips to Asia, in the middle of the Vietnam War. I was on a KLM plane flying over Vietnam. The pilot, Dutch, said, "Ladies and gentlemen, look outside the window. We're flying over Laos. See that area? It's been carpet bombed." I came back to Washington and I said to Senator Symington -- I was then working for the Senate -- "Senator, you know we're bombing in Laos." He said, "Shh; that's classified." (Laughter.)
Now, I submit to you --
SEN. SPECTER: He didn't fly KLM.
MR. BLUM: Right. I submit to you that lots of what you sit here and look at and say, "Boy, this is classified, it's code word, it's secret, they can only be talked about on a skiff by people who have had their backgrounds investigated to the nth degree," out in the field is being talked about at 40 decibels in a saloon somewhere.
SEN. SPECTER: Well, let me come back to that. It's a fairly involved subject which I do want to pursue with you. But I want to yield at this time to Senator Kerrey.
SEN. KERREY: Thank you very much, Mr. Chairman.
Mr. Blum, the record should show I disagree with you on that point. I mean, there are people out there who are at considerable risk, and if what you said was true, they wouldn't be alive. So just let the record show that I disagree with what you just said.
First, Mr. Blum, can you tell me -- it seems to me that the subcommittee, and on that committee at the time, Senator John Kerry of Massachusetts, Brock Adams of Washington, Senator Moynihan of New York, on the ranking side, with Senator McConnell of Kentucky and Senator Murkowski of Alaska -- it seems to me that the recommendations -- I'm going to give you an opportunity to talk about this -- it seems to me that the subcommittee was successful in some areas. In other words, that there were some policy changes that occurred both in law and on the administrative side as a consequence of the subcommittee's work. Is that correct?
MR. BLUM: I hope so. Yes. The answer is yes. I think we did begin to change the public perception of the foreign policy issues. I think we did begin to get people to understand the dimension of the drug problem and refocus on the drug problem.
SEN. KERREY: But there were very specific administrative recommendations and very specific legislative recommendations that were made.
Do you know, Mr. Blum, how many of those administrative recommendations and how many of those legislative recommendations were either accepted by the Executive Branch or enacted by the Legislative?
MR. BLUM: I can't really tell you that. I left in 1989 and did not handle the follow-through. I think some of them were considered. Maybe some of them were adopted. But I don't think they were all accepted readily. I think we had some changes, but they were not really very dramatic.
SEN. KERREY: Well, would you be prepared to evaluate this? Or perhaps, I should just ask the Foreign Relations Committee to do it?
MR. BLUM: I think that it would be more appropriate to ask them --
SEN. KERREY: It seems to me that --
MR. BLUM: -- to evaluate them. I know we made some very strong recommendations.
SEN. KERREY: -- it seems to me that on both -- as I look through the list, and there's one, two, three, four, five, six, seven on the administrative side, and one, two, three, four, five, six, seven, eight on the legislative side; as I look at the list, there are a number of them that I recognize immediately as being current U.S. policy. And so, it seems to me that it's likely to be the case that a number of these recommendations were made, both by the Executive Branch and by the Legislative Branch, in response to the subcommittee's work.
MR. BLUM: I think that there were changes, and I think the hearings did have a positive impact.
SEN. KERREY: Secondly, Mr. Blum, when you talked to me, you said there was a systematic effort to discredit the work of the subcommittee. And you separately mentioned that there was a refusal by the Department of Justice to -- was it Justice? --
MR. BLUM: Justice.
SEN. KERREY: -- to provide you with information that you needed.
MR. BLUM: Right.
SEN. KERREY: Is that correct? Can you tell me -- put a little bit more detail on what you mean by "systematic" --
MR. BLUM: Some examples; we would want to talk --
SEN. KERREY: No, no, no. "Systematic" to me means that there was an organized effort --
MR. BLUM: Right.
SEN. KERREY: -- is that a correct --
MR. BLUM: That's an (important ?) way, and I --
SEN. KERREY: How would you define "systematic"?
MR. BLUM: "An organized effort from the top" --
SEN. KERREY: Who was in charge of it?
MR. BLUM: As best I could tell, it was coming from the top of the Criminal Division.
SEN. KERREY: Who was at the top of the Criminal Division?
MR. BLUM: Bill Weld.
SEN. KERREY: And when you say, the effort was made, what would they do? Would they call --
MR. BLUM: They would tell U.S. attorneys, systematically: "You can't talk to them. Don't give them paper. Don't cooperate. Don't let them have access to people who you have in your control." And we had a very tough time finding things out.
SEN. KERREY: And, thirdly, Mr. Blum, I don't want to get into a great deal of arguing about this, but I think it might be important, just from the standpoint of your evaluation, of when, in a covert environment, U.S. personnel should say that we're going to provide this information to law enforcement in order to be able to bring a conviction. It seems to me you're saying --
MR. BLUM: This is one of the trickiest questions in the law-enforcement/intelligence-agency world. And I should spend a minute to give you just a little bit of the flavor of why it's so devilish.
SEN. KERREY: Well, actually, you needn't give me a minute because I could give you an hour as to why it's devilish.
MR. BLUM: (Chuckles.) Okay.
SEN. KERREY: I understand that it's devilish. What I'm -- what's your view, Mr. Blum, of the contra policy itself? Do you -- did you support at the time the contra policy? Do you believe it carried a high priority, that it was good?
MR. BLUM: I thought that next to other things that were going on in the hemisphere, the problem of a Sandinista government in Nicaragua was really at the low end of the scale.
SEN. KERREY: But did you think the contra effort -- I understand that. But did you think the contra effort was worthwhile, did you support it publicly?
MR. BLUM: I didn't think it was worthwhile.
SEN. KERREY: You didn't --
MR. BLUM: I didn't take any position on it publicly. I thought that it was a wrong affair, but my business was to find out what was going on in the drug trade and we looked not only at the contra problem, but we looked at drugs going through Cuba, drugs going through the Bahamas, and all of the different national security issues that were tangled up in those as well.
So -- and we had bipartisan support. This was not a political effort to unstring the contra war, it was a political effort to understand how it could have come to pass that we had tons of cocaine in Miami and people, instead of trying to solve that problem, were telling law enforcement people to look in a different direction.
SEN. KERREY: Can you imagine a scenario, Mr. Blum, under which you would say that the objective, the foreign policy objective was so important that it would in fact be a higher priority than the law enforcement effort?
MR. BLUM: Here's my problem. I think that if people in the government of the United States make a secret decision to sacrifice some portion of the American population in the form of exposing them, let's say, deliberately exposing them to drugs, that is a terrible decision that should never be made in secret.
SEN. KERREY: Are you saying that -- are you -- (applause, cheers).
MR. BLUM: Now, I want to be clear, I'm not saying -- I'm not saying here that there was such a secret decision.
SEN. KERREY: Well then why did you make the statement, Mr. Blum?
MR. BLUM: Let me explain -- let me explain that.
SEN. KERREY: I mean, I appreciate -- well, it drew a wonderful round of applause --
MR. BLUM: Mr. Chairman, I'm not trying to draw a round of applause --
SEN. KERREY: Well, Mr. Blum --
MR. BLUM: -- I'm trying to explain to you --
SEN. SPECTER: Just a minute, Mr. Blum. Let Senator Kerrey finish his question. (Boos, jeers from audience.)
SEN. KERREY: I mean, you made a statement that was in the context of this overall discussion of what's going on with the CIA's efforts in the contra policy, and it seemed to leave the impression at least that U.S. policy-makers consciously sacrificed a portion of the U.S. population -- (murmurings, comments from audience).
Mr. Chairman, I -- I'm -- I will say to the members, I support the chairman when he says this public hearing has to be conducted with some civility. And the audience is welcome and invited here. But I will support the chairman's decision to clear this room if we continue to get interruptions. It does not work for us. You heard my opening statement. We're not trying to cover up anything. We're -- (groans from audience) -- Mr. Chairman, Mr. Chairman, I --well, Mr. --
MR. BLUM: May I have an opportunity to respond?
SEN. KERREY: Mr. Blum --
SEN. SPECTER: My judgment is that we ought to proceed. There's a lot of public interest in this matter. We want people to be present. We can't identify who's saying what. We're not going to get into any investigations. We just ask for your cooperation in allowing us to proceed with the questions, without a response, to the extent that you can.
MR. BLUM: I would like to try to answer that as best I can. When people who are engaged in an operation say, "We're going to look the other way; we're not going to do anything," interfere in the law enforcement process to protect people who are running the operation and, in that process of interference, permit drugs to flow in, you have an extraordinarily serious problem.
Now the DEA, when it has a --
SEN. KERREY: Mr. Blum, Mr. Blum, let me get you back to the question I asked.
MR. BLUM: Yeah. Right.
SEN. KERREY: I don't disagree with your statement. If you listened, and if the audience listened, who keeps interrupting with their enthusiastic support of what you said earlier, I do think it is a terrible mistake to say that we're going to allow drug trafficking to destroy American citizens as a consequence of believing that the contra effort was a higher priority. I ask you a question. The question is this: Do you, in your own mind, have a situation -- obviously, you were at best lukewarm to the contra effort --
MR. BLUM: Mmm-hmm.
SEN. KERREY: -- do you see, in your own mind, risk to the people of this country that would carry with it a high enough priority that in that circumstance you believe that it would not be wise to bring the evidence out and pursue a prosecution in that case?
MR. BLUM: In the rarest --
SEN. KERREY: Let me give you an example. How about nuclear proliferation?
MR. BLUM: I (can't ?) -- the answer, Senator --
SEN. KERREY: How about a covert operation that's designed to interrupt and to prevent the flow of chemical and biological agents into the United States? In that situation, Mr. Blum --
MR. BLUM: Yeah --
SEN. KERREY: -- in that situation, Mr. Blum, what is your view if they -- if the people that are involved in that uncover evidence that might lead to a prosecution? Should they shut down the operation?
MR. BLUM: I understand that, and there are circumstances --
SEN. KERREY: Mr. Blum?
MR. BLUM: -- where I would agree that you would shut down a prosecution. But you don't do it on -- the question isn't is there a bright line and can we draw a bright line.
SEN. KERREY: Right.
MR. BLUM: There was a judgment call here, and that judgment call erred so far on the wrong side of where judgment should have been that we wound up with a terrible problem. And that terrible problem was a de facto result that I was describing, that is, where many people did suffer as a consequence. And I started to say, when DEA allows a controlled delivery of drugs, there is a furious debate. Those controlled deliveries are monitored because DEA says our job is to prevent it from coming in, and if it escapes on the street, for any reason, we've blown it. And that kind of standard is really the kind of standard that should have, I think, been applied here. And maybe you can give me and maybe we would both agree that there is some dreadful circumstance where this should have occurred and been allowed to occur and so on, and I probably could be convinced in the right set of circumstances. But the problem was that that issue wasn't put that way, and the sensitivity to what was going on was simply missing.
SEN. KERREY: Thank you, Mr. Chairman.
SEN. SPECTER: Thank you very much, Senator Kerrey. Senator Robb?
SEN. ROBB: Mr. Chairman, I think that I will defer any questioning at this point. I think the challenge to the committee has been sufficiently articulated, and I think the sensitivity and volatility of the concerns are such that it would be appropriate to have the two inspectors general complete their work before -- at least as far as my own participation is concerned. It is --the matters that are under discussion are extremely serious and I think they deserve as factual an investigation as we can provide, and I'm not sure that attempting to come to conclusions at this point would advance the cause that I know that the chairman and the vice chairman seek in holding these particular hearings. I would ask a procedural question, perhaps, to Mr. Blum, and that is whether or not you believe that the authority of the inspectors general is sufficient to provide the kind of answers and the kind of objectivity that your concerns have addressed to whatever conclusions this committee might draw from those reports.
MR. BLUM: I think that the authority is sufficient as far as the behavior of people who are employees of a specific agency in question, the Justice Department or the CIA.
The rest of the question, which is at the political level, at the NSC and the policy decisions taken, will undoubtedly wind up in that realm of executive privilege and top secrecy, and therein lies the very great difficulty in expecting the inspectors general to solve the problem. I think we can find out whether CIA employees followed the rules. I don't think that the inspector general can tell you all about what Ollie North did and didn't do or what -- (scattered applause) -- or what was going on in that circle of people and who they brought in and what they told people to do. And we know enough now to know that many people played out of channels and did things out of channels or didn't necessarily report them. So I have a sense you can get a good part of the way. I'm not at all sure you can get all of the way.
SEN. ROBB: Mr. Chairman, I think that I will persist in withholding at this point. I do have a couple of articles that I was going to use as the basis for questions that I would like to simply provide to those who are going to conduct the investigations to consider as a part of any other information they may bring to bear on their investigations, and I will await formal completion of their activities. I know that they haven't had an opportunity to speak formally yet, but some indication of when they believe that their reports would be available would be useful, at least to me, in terms of figuring out what kind of time frame we're talking about getting the kinds of facts that would hopefully address and perhaps put to rest some of the questions that have been raised.
SEN. SPECTER: Senator Robb, we will address that time frame --
SEN. ROBB: Thank you.
SEN. SPECTER: -- what they expect to do.
SEN. ROBB: Thank you, Mr. Chairman.
SEN. SPECTER: Thank you, Senator Robb. Mr. Blum, just a few more questions.
Coming back to the end point of my inquiries as to covert actions -- and you gave the one illustration as to KLM, and I think it is obvious that there are covert activities which are known beyond the realm of secrecy. But your critique is very forceful, and it may well be that the Congress ought to make some different conclusions as to covert activities. So that's why I was asking you the basis for your statement that there are too many covert activities. As a generalization, the covert activities are only known to the oversight committees. The covert activities are undertaken after a finding by the president, so people in the executive branch know, and we have some oversight.
And it is true that sometimes covert activities are disclosed in the public media, but it is a relatively rare occurrence considering how many there are. So that is why I asked you the question, to what extent do you know of the covert activities, to come to a judgment that there are too many and they're too far --
MR. BLUM: Maybe what I should be doing is paying much more careful attention to language. And I understand that in defining a covert activity, you have a very specific definition in mind. The question may turn more on relationships and ongoing arrangements than specific presidentially-authorized covert activities. So on the question of protecting our friends in different places, whether they've been engaged in human rights violations or in drug-trafficking violations, there may not be a covert activity as defined by law, as authorized by the president, but there may be ongoing relationships.
This may be a definitional question. I may be saying something different than what you mean. I can't tell you, though, that I know, and I don't want to deceive you. I don't know what has gone on in the executive branch in secret. I have not been privy to the findings, and I don't want to mislead you.
SEN. SPECTER: Well, it is a different matter as to whether there are human rights violations which are not being pursued. And this committee has been very diligent --
MR. BLUM: I know.
SEN. SPECTER: -- in our pursuit, for example, of what goes on in Guatemala.
MR. BLUM: And the committee is to be commended.
SEN. SPECTER: And behind closed doors -- I'm sorry, I didn't hear you.
MR. BLUM: And the committee is to be commended for it.
SEN. SPECTER: I wanted you to repeat that. (Laughter.)
You had made a comment about things that were taught to people that were hard to erase from their minds, and one of them was to teach people how to assassinate other people. Do you have any evidentiary basis for a conclusion that the United States is seeking to assassinate someone, contrary to existing U.S. policy?
MR. BLUM: Certainly not currently, but I refer you back to the Church committee investigation --
SEN. SPECTER: Well, I'm familiar with that.
MR. BLUM: Yeah, I know you are.
SEN. SPECTER: That goes back to the '70s.
MR. BLUM: But that's the historical base from which I'm talking. I'm not talking about currently. That was specifically prohibited, and that problem was addressed.
SEN. SPECTER: Mr. Blum, in the course of the report which was filed by the Subcommittee on Terrorism, Narcotics and International Operations, what is the most explicit statement, if you can give it to us, on a finding that U.S. intelligence forces were permitting people working for them to engage in drug activities?
MR. BLUM: I think I have to let the language of the report speak for itself, and I'll say why. That report went through so many editorial changes that even after rereading it -- (chuckling) -- I can't remember which version got to where. The report does speak for itself.
The problem that we saw -- and we could definitely speak to, and I know the report speaks to it -- is the problem of standing by when you knew that people were doing the drug -- were in the drug business, when you were an employee of the government. And that's a very tough problem --
SEN. SPECTER: Well, that's a very, very serious matter.
MR. BLUM: -- and we thought that had to be addressed.
SEN. SPECTER: Are you suggesting that it was stated more explicitly, but was cut out in the editorial process?
MR. BLUM: No, I think we were pretty -- I think it is there, but we believed that the government -- that is, the CIA -- was aware of this problem, was aware of trafficking by people, and I think we said that. I don't think that that's something that was edited out. I don't -- I'm not sure what you're referring to.
SEN. SPECTER: With respect to the question of what policy-makers have done, do you have an evidentiary base for concluding that the policy-makers were aware that the intelligence operatives were allowing drugs to be disseminated?
MR. BLUM: Certainly in the case of General Noriega. There was no question about that.
SEN. SPECTER: Beyond General Noriega?
MR. BLUM: My guess is -- and it's a guess, but, I think, a very educated guess -- that in the case of Honduras, yes; in the case of Haiti, yes. They knew. They knew there was a problem.
SEN. SPECTER: Mmm-hmm. How about with specific reference to the distribution of drugs, say, in Los Angeles?
MR. BLUM: I don't think they were ever given the clean understanding of the full implications of what was going on.
SEN. SPECTER: The policy-makers were not --
MR. BLUM: That's right.
SEN. SPECTER: With respect to Colonel North -- and there you raise very, very serious questions -- and the Congress had said there'd be no more support for the contras. I voted with the majority on that -- opposed to supporting the contras. There was a select committee which investigated that matter. The investigation was started by the Intelligence Committee, when I was on it, in an early stage, and it was my hope that the Intelligence Committee would have pursued that, but a select committee took over. And you had access to challenge the refusal of the executive branch to turn over information to you. Let me tell you this, Mr. Blum, that's going on today.
MR. BLUM: I know.
SEN. SPECTER: Senator Kerrey and I are fighting with many of the departments of the executive branch about not disclosing materials to us. And it is an extraordinarily laborious process. And I believe that started in George Washington's day. It didn't -- it's been going on a long time. And it's very frustrating and, I think, very damaging to the country that we do not have access to the materials.
But the Select Committee, with Senator Inouye, an outstanding chairman; you had your own committee. You did not lack for political power to pursue the committee's investigation and to pursue -- in a judicial context, to find out more about Colonel North. Why wasn't it done? Is there really something there that should have been done that wasn't done?
MR. BLUM: We did try to do it, but the committee was for a one- term, two-year mandate. And the mandate of the committee expired at the point of --
SEN. SPECTER: Did you seek a supplemental mandate?
MR. BLUM: Senator (Kerry/Kerrey ?) did, and it was turned down.
SEN. SPECTER: Do you think the Select Committee was derelict in not pursuing North further?
MR. BLUM: I think that North should have been pursued further, that the diaries should never have been accepted in an expurgated form, that they should never have remained classified to the degree they did.
And some of the things that happened with the classification of those diaries was bizarre. Once, when they were declassified in part by the Select Committee, some passages were declassified; other's kept secret. Then in the Freedom of Information suit, they were put through the classification process a second time. And the second time, some of the things that had been released before were classified, and some of the things that were secret before were made public. And that undermined any confidence at all in the process that went on. You have two sets of those diaries with different classifications.
SEN. SPECTER: Senator Kerrey?
SEN. KERREY: I have no follow-up questions, Mr. Chairman.
SEN. SPECTER: Senator Robb?
SEN. ROBB: I have no questions at this time, Mr. Chairman.
SEN. SPECTER: Well, thank you very much, Mr. Blum. We'd appreciate it if you had the time, if you would stay --
MR. BLUM: Certainly.
SEN. SPECTER: -- because there may be some issues, which will arise during the course of the testimony for Mr. Hitz and Mr. Bromwich, we'd like to have your information on.
We now turn to Mr. Fred Hitz, who is the inspector general for the Central Intelligence Agency. Welcome Mr. Hitz. The floor is yours.
MR. HITZ: Thank you, Mr. Chairman. I don't know. Is this microphone on?
SEN. SPECTER: It is.
MR. HITZ: In the letter that you sent on October 18th, inviting me to appear, you asked that, to the extent possible in any open hearing, you would like to hear from me about the nature of the allegations, the scope of our investigation, and the results of any previous investigations or reviews conducted by the CIA that may be relevant.
Now you, sir, have sketched the allegations in the San Jose Mercury, and I don't think I need to repeat those at this time. But I will, if you would permit me, go through how we got involved in this, the direction from DCI Deutch, and what --
SEN. SPECTER: That would be fine, Mr. Hitz. We would appreciate that.
MR. HITZ: On 3, September, after the appearance of the Mercury articles, DCI Deutch wrote to me that he had, quote, "no reason to believe that there is any substance to the allegations published in the Mercury News." End quote. However, he requested that I initiate an immediate inquiry into the matter because of the seriousness of the allegations and the need to resolve definitively any questions in this area. At that time, DCI Deutch also requested that I submit a report to him within 60 days containing our findings and conclusions.
In 4 September letters to several members of Congress, this committee and its counterpart in the House of Representatives, DCI Deutch explained his decision to request an inspector general investigation. He also stated that a review of agency files, quote, "including a study conducted in 1988 and briefed to both the intelligence committees, supports the conclusion that the agency neither participated in nor condoned drug trafficking by contra forces." End quote. Further, according to the DCI, the agency never had any relationship with the two individuals alleged by the Mercury News to have funneled drug trafficking profits to the contras. Also, the DCI stated that the agency had never sought to have information concerning these individuals withheld in a drug-related prosecution of a third individual as alleged in the Mercury News. We also, as an office, recognize the seriousness of these allegations and accordingly, we reacted quickly to the DCI's request by organizing an initial team of three investigators, an auditor, a research assistant, and a secretary to conduct a preliminary review of the scope and nature of the issues involved. That team developed, and I transmitted to all agency components, a 12 September, 1996 request for comprehensive searches of all agency record systems regarding a broad range of relevant subjects. The request also called for the components to designate specific personnel who would be individually responsible for certifying to the thoroughness of those searches. We also published a bulletin to all agency employees explaining the nature of our investigation and asking that they provide us with any relevant information in their possession.
The search request extended to any and all documents and information, regardless of its form or sensitivity, relating to, number one, any CIA connection with a number of specific individuals; two, any possible drug trafficking and related activities by the contras or associated persons; three, what action CIA took in response to such information; and, four, any contacts with federal, state, local or foreign law-enforcement entities in regard to these individuals and activities.
Because of the DCI's request for a report within 60 days, we established a deadline of 18 September for the components to provide our office with copies of all responsive documents and information. It has since become apparent that there is absolutely no chance we will be able to meet anything like a 60-day deadline. The size of the information base that must be thoroughly reviewed by the agency components in order to respond to our documents -- to our request is enormous.
For example, our team has reviewed over 5,000 cables that were identified in our own preliminary and limited electronic search of the agency's cable database. We have just received our first several hundred documents from the Directorate of Operations in response to our request and have been advised that 5,000 to 10,000 electronic records are in the final stages of review for relevance to our tasking, while over 350 boxes of files have been recalled from agency archives and must be manually searched for responsive records. Additional searches are under way in the Directorates of Administration and Intelligence, the Offices of Congressional Affairs and the General Counsel, which have provided only very limited responses so far.
We have been told that a search of the same records base in the 1980s, at the request of the Iran-contra independent counsel, took two years and the efforts of 50 to 60 agency personnel. We are not saying that our investigation will take two years. We're stating merely that we have a lot of ground to cover.
SEN. SPECTER: Mr. Hitz, what are you saying as to how long it will take?
MR. HITZ: I understand, Mr. Chairman, that you're going to seek a precise answer to that question --
SEN. SPECTER: No, I already have.
MR. HITZ: -- and I can't give you one. But let me just sketch a bit what we're about, and perhaps we can return to that. While we are attempting to tailor our requests as much as possible, the bulk of the information that is responsive to our request will not even by received by my office for at least two weeks. Thus, we remain in the preliminary stages of our investigation. Soon we will face the requirements review, catalog and digest substantial amounts of information, in order to move into the interviewing phase.
In anticipation of this requirement, we have assigned three additional investigators, an independent contractor and another research assistant to our team. Another auditor and two inspectors will be joining the team shortly as well.
SEN. SPECTER: Well, how many people do you have in total, then, working on it?
MR. HITZ: We're going to have six plus three plus two. So, 11 at this time.
SEN. SPECTER: Is that enough?
MR. HITZ: I'm not sure, sir. I'm not sure. I think we always have the problem -- and you've been through these investigations yourself -- too many cooks spoil the broth if you haven't got something for them to do initially. But we are prepared to put the resources on this matter that are required to do as expeditious a job as we can.
SEN. SPECTER: Well, Mr. Hitz, I would just suggest, and you're an experienced investigator, that you have to make a determination as to how many people you need and get them at an early stage. It sounds to me as if you have quite a task ahead of you and that it ought to be done as promptly as possible, which is the customary phrase. But there's a lot of concern here, and there's a question about our deferring to you and to the Justice Department IG. And if we're to do that, we have to have some pretty precise ideas as to when it's going to be completed and the resources available to it.
MR. HITZ: I appreciate your concern, Mr. Chairman, and I'm going to try to refine, if I can, our time frame. But I can assure you that we will devote whatever resources can profitably be expended on this matter.
SEN. SPECTER: Okay.
MR. HITZ: And I'm also happy to report that we've had preliminary discussions, looking forward to working closely with Mike Bromwich, the Justice Department inspector general, who is here, and his staff, since it's obvious that there will be several areas where our investigative interests and jurisdiction will overlap and complement each other.
While we do not have much substantive insight at this point, I can describe what we have learned from the limited documentation provided to us thus far regarding the agency's position when similar questions were raised in the late 1980s. We are not vouching for the accuracy of these statements at this point but are describing for the committee their contents. According to these records, in early 1987 the State Department requested that the agency review all available information relating to the possible involvement of the contras in drug trafficking. The 21 January 1987 paper that resulted was described as coordinated throughout the intelligence community and with DEA, the Drug Enforcement Administration. It began, and I'm quoting from that paper: "Review of information available to the intelligence community gives no indication that anti-Sandinista groups that have received or now are receiving support from the U.S. government have engaged in drug trafficking to fund their operations.
Some allegations of contra involvement in drug trafficking have surfaced over the past few years. DEA and FBI officials, along with intelligence community leaders, however, say no credible information exists to support such allegations." That's from the paper. The paper went on to discuss allegations --
SEN. KERREY: Mr. Hitz, you say in early '87, and then the paper was produced 21 January, '87, that's pretty early as well. I mean, when was the request made --how much time did it take them to produce this report?
MR. HITZ: I'm not sure. (To staff.) Do we know? (Returning.) The initial request, Senator Kerrey, was 9 January.
SEN. KERREY: So on 9 January, State Department requested the agency review all available information --
MR. HITZ: Yes.
SEN. KERREY: -- relating to the possible involvement of the contras in drug traffic. Twelve days later, a response is given. And you're telling us that you can't get your work done in 60 days or 50 days? (Laughter.) I mean, does that cause you to reach some conclusion about the report that was produced in 12 days?
MR. HITZ: It might, sir. We're going to have to determine what documents they reviewed. And I take your point.
The paper went on to discuss allegations regarding certain individuals that had been received and acted upon by the agency.
Just over a year later, on 28 March, 1988, then-Deputy DCI Robert Gates sent a memorandum to the agency's deputy directors for intelligence and for operations asking for a briefing concerning, quote, "contra involvement in narcotics-related activities, to include any pilots involved in the resupply effort who may have had past or current ties to narcotics-related activities." End quote. He indicated in this memorandum that he wanted to be, quote, "fully informed on the facts because so many questions and allegations were being raised about these subjects." The memorandum also suggested that, quote, "There may be some merit in setting all of this down on paper for the record, perhaps to be provided to both the president's intelligence oversight board and to the oversight committees of the Congress." End quote. According to the memorandum, the briefing was to include specifics and comprehensiveness. This request appears to have produced at least two written responses. One is an undated and unsigned paper entitled, quote, "Allegations of Resistance Activities in Narcotics Trafficking," end quote. It begins by stating -- and I'm quoting from the paper, "All allegations implying that the CIA condoned, abetted or participated in narcotics trafficking are absolutely false. The agency constantly checks for any evidence of drug smuggling by Nicaraguan Resistance members, and any person or entity found to be involved in such activity must be separated from the Resistance. In addition, the agency has consistently informed the congressional oversight committees of any Resistance drug activities in briefings and in written responses." The paper then goes on -- that's the end of my quote from the paper. The paper then goes on to describe a variety of allegations as to specific individuals and how the agency responded to each.
The second apparent response is a 31 March, 1988 memorandum to DDCI Gates entitled, quote, "Pilots, Airplanes and Shipping Companies Used in the Resupply Efforts That May Have Had Past or Current Ties to Narcotics-Related Activities," end quote. This memorandum was prepared by the Central America task force, which was responsible for managing the agency's program in support of the contras.
It begins as follows, and I'm quoting again from the memorandum: "During the past several years, there have been numerous allegations in the media that pilots and airline companies that the agency has used in the resupply efforts of the Democratic resistance have been involved in narcotics activities. To our knowledge, no pilot or crew members have engaged in illegal narcotics activities while working for the agency.
"As per your instructions a year ago, and because of agency concerns about drug activities, the agency has been extremely careful to properly vet all pilots, mechanics and companies involved in transporting equipment for the Nicaragua program. The agency runs internal traces on these individuals and companies, and, in addition, routinely queries DEA, FBI and Customs, and in some cases, such as shipping companies, the U.S. Coast Guard.
"If no derogatory information is found, a conditional approval is submitted. If some derogatory information is found or alleged but the various agencies did not believe it would be a problem for the U.S. government to have a contract with the individual or company, a special approval is required which is signed by the chief of the division." That's the end of my quote from that memorandum. This memorandum then discusses allegations regarding specific pilots and organizations and how they were handled by the agency. While we are not yet in a position to vouch for these conclusions -- we'll have to look at all the documentation that underlay them -- these documents illustrate the agency's view of the matter in 1987 and in 1988. Other studies may have been conducted by the agency in the '80s. However, we have not yet been able to find or review such other studies as might exist.
And that, sir, is my effort to try to bring you up to speed on the reviews conducted by the CIA that we have been able to uncover so far, without getting into the kind of vetting and examination of what lay behind them, to see if there's substance to it.
In closing, I would like to assure you and the American public that my office will conduct as thorough a review as possible of all available information and will report what we find candidly and completely. Over the past five years, I believe we have earned a reputation for independence and objectivity as a result (of dealing?) in this fashion with other highly significant and controversial subjects. These have included the Aldrich Ames investigation, human rights abuses in Guatemala, the Paris compromise, the (B&L?) scandal and many others that are not as well-known outside our venue.
In many ways -- and I want to underscore this, Mr. Chairman and Senator Kerrey, Senator Robb -- in many ways, the recent allegations of CIA involvement in narcotics trafficking are the most controversial, politically charged and potentially damaging of any that we've looked at. While some may choose not to believe findings that do not correspond to their preconceptions, we will present the unvarnished truth as we find it, and we'll do so to the best of our abilities. We welcome the support of the oversight committees and believe it will be essential to the credibility of our findings. And I thank you for your attention.
SEN. SPECTER: Thank you very much, Mr. Hitz. Before turning to Mr. Bromwich, could you give us an estimate, a guesstimate, a ballpark figure as to how long it's going to take you?
MR. HITZ: Well, I tried to sketch, Mr. Chairman, the enormity of the document review that we're going to have to undertake. I believe --
SEN. SPECTER: I think you've done that fairly well. Now we'd like to know how long it's going to take.
MR. HITZ: I would not like to give you a specific date, sir. I think it would just be premature at this time. But I give you my solemn assurance that we will expend the resources on it. And this committee, I know, will verify that that is the case, to move on this as thoroughly and as quickly as we can. It's our top priority. Dr. Deutch has made it clear that it's his top priority as well.
SEN. SPECTER: Mr. Hitz, I think we need more than that. Why don't you go back to the drawing board and take a look at the documents you have and take a look at the parameters and take a look at your resources and figure out what you can use and give us a projection as to how long it is going to take?
MR. HITZ: I'll attempt to do that, Mr. Chairman.
SEN. SPECTER: Okay. We now turn to the inspector general for the Department of Justice, Mr. Michael R. Bromwich. Mr. Bromwich, thank you for coming, and the floor is yours.
MR. BROMWICH: Thank you very much, Mr. Chairman, Senator Kerrey, Senator Robb. I have a brief opening statement that I would like to introduce for the record.
SEN. SPECTER: It will be admitted in full, and you may proceed orally as you choose.
MR. BROMWICH: Thank you very much, Senator. I do not want to talk about the issues that are discussed in my prepared testimony. Obviously I invite any questions that you may have. I want to sketch a little bit about how this committee and the American people can be assured that our inquiry will explore independently, fairly, objectively, exactly what the Justice Department's involvement was in the allegations, as first framed by the San Jose Mercury. For better or for worse, Mr. Chairman, I'm not a stranger either to issues of narcotics distribution nor to issues relating to Iran- contra. I served for four years as a narcotics prosecutor in the U.S. attorney's office for the southern district of New York, first under John Martin, who is now a federal judge, and for the bulk of my tenure under now-Mayor Rudolph Giuliani. We did not in that office do street-level drug cases. We focused on high-level narcotics trafficking, both in cocaine and in heroin. The largest cases I tried, the last of which was in December of '86, focused specifically on large rings of people. The last case involved elements of Italian organized crime who were making deals with drug dealers down here in DC, and the sales were ultimately made directly into the African-American community here in the District of Columbia.
I was in that office, Senator, responsible, as deputy chief of narcotics, for supervising the work of from 20 to 22 lawyers who did nothing but focus on high-level narcotics trafficking cases. Shortly before I left the office in December of 1986, I was named the chief of the narcotics unit by Mr. Giuliani. I left that office, Senator, to work for the Iran-contra independent counsel, Lawrence Walsh. I began my service with him in January of 1987. I was one of the first seven lawyers hired by Judge Walsh. Let me just quickly sketch some of the things that I did while in that office that I think do bear at least some relevance to the inquiry that my agency is going to begin and that your body is going to be working on.
During the early phases of that investigation, a colleague of mine and I focused on allegations that there had been illegal fundraising on behalf of the contras and that in particular certain individuals, most notably Carl Channel (sp) and Richard Miller, had worked together with Lieutenant Colonel North in soliciting wealthy American individuals to provide money, large contributions, to the contras. There was a specific representation by Lieutenant Colonel North and his colleagues that, in fact, the contras were in desperate need of weapons. They assigned particular dollar values to the weapons and made very elaborate presentations to wealthy individuals. That's all a part of the public record, both with the House and Senate select committees as well as that of my office. We early on secured guilty pleas both from Mr. Channel and Mr. Miller, who pled guilty to, in fact, misusing a tax-exempt foundation to solicit contributions for the contras and specifically to buy weapons for the contras. I was, Mr. Chairman, senators, responsible for coordinating the overall grand jury investigation during the first two and a half years of Iran-contra. In approximately the fall of 1987, I headed a team of approximately seven lawyers and approximately the same number of FBI and other law enforcement agents who were specifically looking at possible criminal misconduct on the part of employees of the Central Intelligence Agency, the Department of State, as well as private individuals who were involved in the resupply network.
Out of that team, as I'm sure you recall, came the indictment of former Costa Rican station chief Joseph Fernandez, and that case, as you know, was aborted subsequently in the latter stages of 1989 because the Department of Justice, which, as you well know, was completely separate and independent from our work as the independent counsel, refused to release the documents and declassify the documents that our office needed in order to pursue that matter.
SEN. SPECTER: Were you dissatisfied with that?
MR. BROMWICH: Very much so.
SEN. SPECTER: Now you have the power to get into the inside of that as the inspector general of the Department of Justice?
MR. BROMWICH: I do. Part of the problem obviously is going to be framing an inquiry that can be done in some reasonable period of time. And I really want to work with this committee in trying to determine what framing makes sense so that --
SEN. SPECTER: We're going to come to that. But here you are, having been an adversary of the Department of Justice. Now you're the inspector general of the Department of Justice. I'm not suggesting a conflict of interest, because you work for the people of the United States on both occasions.
MR. BROMWICH: I certainly do.
SEN. SPECTER: How will you be able to proceed on that issue?
MR. BROMWICH: Well, I don't -- that is currently not within the scope of our investigation. If this committee or others ask us to look directly into this, I will certainly do so. I have to be obviously very careful not to pursue an investigative agenda here that others may think may derive from trying to settle old scores or probe into something that I have a particular -- an individual interest in. I just throw that out. I'm happy to have further discussions with you and with members of the committee about that.
SEN. SPECTER: Well, on the surface, it looks to me as if it's relevant. But I don't want to draw any final conclusions at this -- I don't want to do it on horseback today.
MR. BROMWICH: Thank you. Senator, from January of 1989 through May of 1989, I was one of the three courtroom lawyers for the United States of America in the prosecution of Lieutenant Colonel Oliver North. As you recall, some of the newspapers I've seen recently suggest that that case ended in an acquittal. It did not. Lieutenant Colonel North was convicted of three felonies in that case. His conviction was only reversed subsequently by the court of appeals.
I was in that office for two and a half years. I was -- I've described in brief detail what my overall responsibilities were. I left that office in October of 1989 and returned to the private practice of law and did that for approximately four years. I was nominated in the late winter of 1994 and took office in June 1994 as the inspector general of the Department of Justice.
I have not dealt with an issue since I've been inspector general -- I've dealt with some very sensitive and very important ones -- that has resonated so clearly both with the Congress and with the American people. When I first became aware of these allegations in mid- September, I obviously wanted to examine what the allegations were.
I've reviewed the articles in the San Jose Mercury, and it seemed to me that there were enough troubling questions about the points of contact between individuals employed by different components of the Justice Department and the allegations that drew together the CIA and the contras in the introduction of crack cocaine into South-Central Los Angeles that I thought it was very important to launch an investigation. To clarify the record, I did so on my own without being directed by anyone, either inside the department or outside the department.
SEN. SPECTER: We compliment you for that, Mr. Bromwich.
MR. BROMWICH: Thank you. Since that time, I have spent time, because I think it's important, dealing with the representatives of people in the affected communities to try to assure them that, given my background and the reputation that my office has, that we will do our very best to try to get to the bottom of this and to explore fully what the involvement, if any, of Department of Justice employees was with these allegations.
Indeed, the very day that I decided to open the investigation, I met with Congresswoman Waters, who's here today. I subsequently met with her again. She facilitated an introduction to me to Gary Webb, the author of the San Jose Mercury articles, and I have talked with Mr. Webb on subsequent occasions. I then proceeded to talk to other members on both sides of the aisle who clearly had an interest in this matter and having the investigation done properly and well.
I met with your counterpart, Senator Specter, Mr. Combest, the chairman of HPSCI, the House Permanent Select Committee on Intelligence, as well as Mr. Dicks. I met with Julian Dixon, who's the senior member of the House Permanent Select Committee on Intelligence and whose district in California borders on South-Central Los Angeles. And I also met with Juanita Melinder-McDonald (sp), who is a congressperson, as Ms. Waters is, from South-Central Los Angeles. They made me even more aware than I already was of the importance of our investigation and the fact that we were facing deep cynicism and distrust of the federal government and even with the Department of Justice.
I just returned last night, senators, from what for me was an extraordinary trip to South-Central Los Angeles. I was invited to do so by Congresswoman Melinder-McDonald to meet with some community leaders so that they would have a chance to meet first-hand with the person who is going to be conducting one of the investigations that touches on these issues. I won't say that that trip was roundly endorsed by others in the department. It was an extraordinary trip. But I certainly felt a responsibility to go up there and do whatever I could --
SEN. SPECTER: You say it was not roundly endorsed by others in the department?
MR. BROMWICH: No, it was not.
SEN. SPECTER: Was it opposed?
MR. BROMWICH: I prefer not to talk about that in public session.
SEN. SPECTER: Well, you brought the subject up.
MR. BROMWICH: Okay. It was opposed by some. And while I was out in Los Angeles, I met with a number of people. I met with a group of approximately 30 to 35 community leaders. I met with the mayor of Los Angeles. I met with the membership of the county board of supervisors. I met with yesterday a group of from 12 to 15 clergymen from the South-Central area who I'm told represented about 50,000 or so parishioners in South-Central LA.
And what I tried to tell them is what I'm going to tell you and the American people here today is don't rush to any conclusions. What I ask is for people to keep an open mind and let us do our work. The facts, and nothing but the facts, will drive our investigation in its conclusions. And I don't think anybody at this point is in a position to say whether those allegations are true or they are not true.
When I decided to open this investigation on September 20th, I immediately put in place a team, and within a week we had a very comprehensive documents request that went out to all components of the Department of Justice. We have already started to receive the products of that work, and it looks to me that the documents that the Justice Department has that deal with Meneses and Blandon and Ross and others are, in fact, quite voluminous.
Right now we have a team of nine or 10 that are assigned to the matter, and I will pre-empt your question and tell you that that, in my judgment, will not be enough. And I'm in the process of trying to get additional resources to supplement my team. That really is all I want to say at this point, Senator. I take this investigation and the responsibilities that it imposes on me and my office very seriously. I will only mention that I think the work that we have done in my office since I took office should establish that we are capable of calling the tough ones toughly and as we see them.
We did, I think, the definitive review of allegations relating to the Good Old Boy Roundup, around which there were serious allegations of racial misconduct and other kinds of misconduct in a law enforcement-related gathering in southeastern Tennessee from 1980 to 1995. We told that whole story there and laid out that, in fact, some of the worst of the racial allegations were, in fact, true.
We recently completed a review of --
SEN. SPECTER: That was a Department of Treasury matter, wasn't it? Alcohol, Tobacco & Firearms?
MR. BROMWICH: Well, there were more Treasury Department employees who attended than Justice Department. But early on we had information that there were a number of Justice Department employees who attended as well, and I thought it was my responsibility to explore that, even though it wasn't given much publicity.
SEN. SPECTER: How did the Treasury Department do on that investigation?
MR. BROMWICH: I think their investigation was a less complete one than ours. That's why I refer to ours as, I think, the definitive --
SEN. SPECTER: They still haven't admitted to any failings in the Ruby Ridge matter. I don't know if they ever will -- right up to the secretary of the treasury.
MR. BROMWICH: Is that a question for me?
SEN. SPECTER: My question was how they did on your investigation. I just wanted to see on one that you ran side by side with.
MR. BROMWICH: The other investigation that I would draw your attention to is one that we completed in June of this year involving allegations that the congressional task force on immigration reform, led by Representative Gallegly of California, was deceived by high- level officials within the Immigration & Naturalization Service who conspired to create a (Patemkin?) village, if you will, a false appearance to facilities, at the Krome (sp) detention facility at Miami International Airport.
We found that, in fact, the deception had taken place and that high-level officials in the INS were responsible for it. We recommended in our report that 13 officials of the Immigration & Naturalization Service be disciplined to some extent, up through and including termination.
Those are just a couple of the special investigations that we've done. We also have going right now investigations of the FBI lab, which I'm sure you're aware of, and other matters as well. That's all that I would care to say in this statement, but obviously I'm all too happy to respond to any questions that you might have.