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APPENDICES


Appendix A

Jack Terrell

  1. Background. Jack Terrell alleged that John Hull and the Contras were involved in drug trafficking. He also alleged that there was a plot involving Contra supporters to assassinate a U.S. Ambassador on behalf of Colombian drug traffickers. No information has been found to indicate that Jack Terrell had any contact with CIA or that CIA had any information indicating Terrell was involved in drug trafficking with the Contras.
  2. CIA Records A January 28, 1986 cable to Headquarters requested traces concerning Terrell and stated:
  3. . . . according to the local [FBI, Terrell] claims to have contact with [CIA] by virtue of his service with the Nicaraguan Democratic Force in Honduras and Nicaragua from 1984-85. . . . [Terrell] said he is known . . . by his nom de guerre of "Flaco." . . . [Terrell] has identified his [CIA] contact as one "Rob Owens."(1)

  4. A January 28, 1986 response to the trace request stated that Terrell was believed to be identical with a Civilian Military Assistance (CMA) member who used the alias "Flaco" while in Honduras. The cable noted that:

    . . . In March 85 he and 13 other [American citizens] associated with CMA were asked by [the American] Embassy to return to [the continental United States] from the Mosquito [sic] where they allegedly were planning to enter Nicaragua to blow up a bridge. The group including "Flaco" were [sic] repatriated to [continental United States] two days later. [Terrell] was not in contact with [CIA]. . . .
  5. A March 24, 1986 FBI telex to CIA provided information from an FBI New Orleans office March 17, 1986 interview of Terrell. Reportedly, Terrell told the FBI that there had been several meetings in the Miami area between December 9 and December 23, 1984 involving CMA members--including Terrell--and Contras Stedman Fagoth and Wycliff Diego. According to Terrell, he was discussing tactics to be used by the Contras when he was called out of the meeting by the leader of the CMA, Tom Posey, to meet a person called "Corbo," who could provide the CMA with money, weapons, transportation, and "everything we've been looking for." Those who had been discussing tactics with Terrell allegedly became angry and told Terrell, "You don't want to meet with [Corbo] because he is into drugs and arms and he works directly for Francisco Chanes." Terrell also reportedly told the FBI that Posey had arranged for him to meet with Francisco Chanes who offered a million dollars if the CMA would assist in the sale of frozen lobster imported from Costa Rica. According to Terrell, a U.S. citizen associate of John Hull, was also present at this meeting.
  6. An April 4, 1986 Headquarters cable to the FBI provided traces regarding Terrell and persons mentioned by him in his FBI debriefing:

    Results of this Agency's traces on Jack (Terrell) were passed telephonically to the FBI. In addition... Terrell's February trip to Costa Rica was arranged by [U.S. journalist] Avirgan. Besides falsely claiming employment by the . . . CIA, Terrell claimed arms for the . . . FDN come from Miami, Houston, New Orleans, Panama and El Salvador. Further he stated that the CIA buys arms in the Dominican Republic and ships them via Fort Lauderdale to Honduras. While in Costa Rica Terrell also revealed the names of alleged CIA and Department of Defense personnel who he says are involved in Anti-Sandinista activity. Sources who encountered Terrell described him as an extreme rightist and mentally unstable.
  7. On April 11, 1986, an article in The Washington Post stated that:

    Jack Terrell, who was a leader of the American paramilitary group . . . CMA, said FBI agents and prosecutors from the U.S. attorney's office in Miami have met with him several times with at least two of those sessions becoming full-day meetings. Terrell said the investigators asked him about alleged weapons shipments from the United States to contra base camps in Central America, contra involvement in drug smuggling, and a reported conspiracy to assassinate the U.S. ambassador to Costa Rica, Lewis Tambs.
  8. An April 15, 1986 cable to Headquarters commented that Terrell had made "scurrilous attacks on [CIA]".
  9. A May 8, 1986 FBI telex to CIA and other U.S. Government agencies reported that the FBI had attempted "to locate Jack Terrill [sic] at his residence" in New Orleans. The owner of the apartment building where Terrell lived and where he served as building manager and handyman had reportedly said that:

    . . . on or about April 20, 1986, she received a call from another of the tenants in the building, stating that a strange woman of oriental appearance was taking the bed from the apartment previously occupied by Terrell. [The owner] went to the apartments [sic] and discovered that the bed and the . . . oriental woman were both gone. Terrell had apparently left, taking all of his possessions. Upon further checking, she determined that approximately $2000 was missing from the petty cash fund, as was about $2100 from the receipts from the soft drink machine. [The owner] stated that she had gone to the police and filed a complaint against Terrell. . . . [The owner] stated that she understood that Terrell did some very mysterious things and that it was possible that he had been forced to run and hide owing to his peculiar situation vis-a-vis international affairs.

    An unsigned memorandum, dated "summer '86" and entitled "FBI Background on Jack Terrell, stated that:

    . . . [his a]rrest record begins in 1957 with an arrest for auto theft. Thereafter the record indicates numerous arrests for robbery, larceny, grand larceny, and burglary.

  10. An unsigned memorandum, with a handwritten date of July 18, 1986 and entitled "Traces on Jack Terrell, a.k.a. Colonel Flaco," stated that information was provided that there was:

    a call from Terrell who called from Senator Kerry's office. . . . Because of FBI interest in the whereabouts of Terrell, we informed the Bureau's Counterterrorism Planning and Special Investigations Office at a 2 May meeting that Terrell was in the Washington area and had met with Senator Kerry's Staff. . . .
  11. A July 31, 1986 cable requested traces concerning Terrell on behalf of the FBI. According to the cable, the local FBI office had provided a copy of a report from an FBI office indicating that Terrell had contacted the FBI in Houston, Texas,:

    . . . offering to provide information on Central American groups, Iranians and African National Congress (ANC) principals. [FBI] interviewed [Terrell] in August 1985 and again in February 1986. Terrell provided in-depth details on the "La Tronquera" training camp along the Nicaraguan border with Honduras.
  12. A September 29, 1986 cable to Headquarters reported that a FBI Washington Field Office Special Agent had advised that the FBI interrogated Terrell in the course of an investigation concerning a threat to the President. According to the cable, Terrell told the FBI that:

    . . . he had recently returned from Manila where had had been offered one million USD[ollars] to establish a radio station for the New Peoples' Army by the head of the Communist Party [sic]. [Terrell] asked the case agent to put him in touch with [CIA] so that he might relate the story directly to those involved. . . . [Terrell] works for the Center for Developmental Policies . . . [in] Washington DC.
  13. A March 29, 1988 Headquarters cable provided a draft of a memorandum that Headquarters proposed to distribute to the FBI and several U.S. military organizations as "a summary of all the information [CIA] has received on . . . Terrell since January 1988. . . ." The cable detailed Terrell's involvement with an insurgent leader of the Kachin Independence Organization based in Northern Kachin State, Burma. The cable also noted that "in Burma and Thailand Terrell is advertising himself as a former [CIA] officer." Finally, the cable stated that Terrell has recently arrived in Manila and rented an apartment.
  14. An April 6, 1988 memorandum from the DDO to the Director of the FBI and several U.S. military organizations included the information that was reported in the March 29 cable. The first paragraph of the memorandum stated that "The CIA has no involvement in Terrell's activities nor do we want any type of relationship with him." The memorandum also included the statement that "Terrell has never been employed by CIA." Most of the memorandum recounted a briefing provided by a U.S. Marine who was an intelligence officer serving at the Marine Barracks at Subic Bay. The Marine officer recounted that Terrell had offered his services to an insurgent group in Burma and claimed to be a former CIA officer. The Marine officer reportedly had received his information from a former Marine who was associated with Terrell and also directly from Terrell.
  15. An August 23, 1988 Washington Post article mentioned that Terrell had been indicted along with Mario Calero and other Contra supporters for violations of the U.S. Neutrality Act. A July 14, 1989 Washington Post article reported that a federal judge had dismissed the Neutrality Act charges.
  16. On June 12, 1991, U.S. Embassy Manila reported a plot to assassinate a rebel military leader involving the Philippine Foreign Secretary, Raul Manglapus, and an American. Key evidence of the plot was reportedly a tape recording of a purported discussion of the assassination plot between the Foreign Secretary and the American. An October 8, 1991 cable identified the American as Jack Terrell.
  17. An October 9, 1991 draft DoS cable stated that DoS officers had met with the FBI on October 8 and were told that the American involved in the plot:

    . . . has been an asset of the FBI in a number of cases. When polygraphed in connection with this case and asked whether the other voice on the tape was that of foreign secretary Manglapus, his response was described as indicating deception (this tends to confirm our initial judgment that this affair is a hoax of some kind.)
  18. An October 17, 1991 Foreign Broadcast Information Service translation of a Manila Broadcasting Company report stated that Foreign Secretary Manglapus:

    . . . strongly denied the television news report implicating him in an attempt to assassinate [the] rebel leader. ["]The charge is categorically false, and I have not plotted to kill anyone, and I have not paid money to anyone to undertake matters on my behalf.["] According to Manglapus the source of the story came from [sic] Jack Terrell, an ex-convict with questionable credibility. Manglapus admitted that he got to know Terrell during an occasion at the International Center in Washington, where Terrell said that he was working. . . . Terrell went to Manila to meet him but he was not aware that he was already terminated from the International Center.
  19. An October 17, 1991 U.S. Embassy Manila telegram to the DoS described a meeting between Manglapus and the American Ambassador. According to the telegram:

    While Manglapus was in exile in the United States, he was associated with the Center for Development Policy. . . . The American behind this present story, Terrell, came to Manila about two years ago purporting to represent the Center for Development Policy. He informed Manglapus that he was a shrimp trader. Manglapus admits that he unwisely took Terrell into his home and confidence. He failed to check out Terrell's credentials. He has done so since through an American lawyer and understands that Terrell has a prison record, having served eight to ten years "in Alabama" for armed robbery. Manglapus also notes that Terrell perjured himself in some matter related to Contra affairs.
  20. A column in the October 25, 1991 edition of the Manila Inquirer reported an interview of Terrell's Manila neighbor who had said:

    . . . Jack [Terrell] was by his own account a colonel in the US Army who served in Vietnam and in Guatemala. He knew more about the Iran-Contra affair than did Col. Oliver North who was accused of selling military equipment to Iran to raise funds for the Contra rebels. Jack was forbidden to testify because he knew too much, and was liable to spill the beans on the American high officials. And he was in the Philippines to be out of the reach of US investigators.

    He claimed to be a scion of a wealthy Southern family with interest in the railroad line. Disowned when he refused to enter the family business, he joined the US Army which became his second family, and was due to retire in two years. . . .

    He left [the Philippines] to join the war in Iraq, fearful on not surviving it, saying that he had to go because he did not want to lose his retirement pay. . . .

    In 1992(2) Terrell wrote:

    I've lived this life and it didn't count.

    . . . . My sister said to me: "You have lived a lie."


Appendix B

Frank Castro

  1. Background. No evidence has been found to indicate that Frank Castro was a member of the Contras . However, information has been found connecting Frank Castro to the Contras and cocaine trafficking. An April 20, 1990 memorandum provided background information on Castro. The memorandum noted that a biographic questionnaire, in Spanish, asked Castro "in what military service, including the 2506 Brigade (Bay of Pigs) have you participated?" According to the memorandum, Castro answered that he had participated in U.S. Army training at Forts Knox, Jackson and Carson and that:

    . . . .
    21. . . . . because of this question being answered, a misconception took place and it was reported in Castro's file, that he was part of the 2506 Brigade. According to the files of this Directorate, [Frank Castro] did not work for the CIA during the Bay of Pigs Invasion, nor has he ever been an employee of the CIA in any capacity . . .

  2. Eulalio Francisco Castro Paz was born in Cuba on June 4, 1942 and came to the United States, probably in 1961, seeking political asylum. He served in the U.S. Army from November 5, 1962 through December 6, 1963. He changed his name to "Frank Castro" and became a naturalized U.S. citizen sometime during 1971. In the early 1970s, Frank Castro was involved in anti-Fidel Castro activities that included bombings and attempted bombings of Cuban and Soviet facilities.
  3. During the 1970s and 1980s, CIA cooperated with the FBI and other U.S. law enforcement entities in monitoring and reporting on Frank Castro's movements and activities. By 1983, Castro's name began to appear in regard to Contra-related activities.
  4. Allegations of Drug Trafficking. According to an October 12, 1983 cable:

    On October 8, Frank Castro . . . revealed FDN interest in opening FDN front in Costa Rica, separate from ARDE. Castro . . . . [said] the FDN would be willing to provide info[rmation] on where they might establish bases, individuals they can trust, how they can operate without interference from [the Government of Costa Rica], etc.
  5. In November 1983, according to a document captured by U.S. military forces in Panama City in December 1989:

    Frank Castro, a Cuban, is Pastora's assistant in his drug trafficking business. This Cuban has a group of combatants who pretend to be "Contras," but in reality work for the FSLN in Nicaragua (and Pastora knows it).

    According to a November 22, 1983 DO memorandum, OGC had asked for a search of DO records for information concerning Castro. The memorandum noted that Castro was being prosecuted in Texas for drug trafficking, and DoJ had asked CIA about Castro's claims of affiliation with CIA. A handwritten, unsigned, undated note filed with the DO memorandum stated, ". . . DoJ is willing to drop [sic] if he was in fact associated [with] Agency."

  6. On July 12, 1984 Headquarters responded to a cable that requested information concerning Castro. With regard to drug trafficking, the Headquarters cable stated:

    In 1979, Frank Castro was local drug trafficker and no longer involved in the anti-Castro movement. In 1981 [Castro] was arrested by Miami police on narcotics charges and in October 1982 was out on bond awaiting trial. Also in 1982 [Castro] was under court order not to leave Dade County, Florida.

    Also on July 12, 1984, a cable noted that:

    Popo Chamorro had picked up a considerable amount of money in Santo Domingo that has been contributed to [Pastora's] movement. He did not say how much or from whom the money originated.

    A handwritten note on the cable indicated "Frank Castro?"

  7. On October 12, 1984, a cable reported that:

    When queried ... about who controls "Rene," (a Cuban-American who has approximately 30-40 armed Nicaraguan combatants deployed in northern Guanacaste [Province], Costa Rica) [it was] acknowledged that Frank Castro of Miami controlled "Rene". . . . All available information indicates that the group under Rene's command is not presently associated with either the FRS or MDN/ARDE. Previous reporting indicated that approximately seven Cuban Americans were deployed with this unit which previously (early June) was located at "Monico," [Hull's] [landing zone].
  8. According to an October 25, 1984 cable, John Hull said that Frank Castro had donated two helicopters, two light aircraft and one C-47 to the FRS. The cable suggested that the C-47, then located in El Salvador, might be the one that Marcos Aguado had at Ilopango and might be under Dominican Republic registration. According to the cable, Castro had moved from Miami to the Dominican Republic and recently provided an unspecified amount of money to the FRS. John Hull says that, according to Cuban-Americans, Castro gave a lot of money to the Contras and was rumored to be involved in the drug business.
  9. On October 31, 1984, a cable reported that:

    . . . personnel from the FRS, recently in Miami, had contacted Frank Castro and [another non-U.S. individual], the latter reportedly is closely associated with Sarkis G. Soghanalian. Castro was reported as having "connections" in Colombia and the Dominican Republic, and was presently located in the [Dominican Republic].
  10. According to a cable on December 10, 1984 it has been

    commented that Frank Castro of Miami . . . continues to support Rene Corvo and his 40-60 man unit. Although no details were available, [it was] commented that Corvo may be involved in drug trafficking operations, supported by Castro.

  11. A December 12, 1984, cable reported that:

    . . . .
    2. . . . . Frank Castro, a Miami-based Cuban American with ties to anti-Sandinista guerrillas, is installing or attempting to install a cocaine processing laboratory in northern Costa Rica. Castro is exploiting widespread paramilitary activities in northernmost Costa Rica as a cover for drug trafficking. [Reportedly] . . . Castro sent [an individual], Castro's middleman, to Costa Rica to purchase a ranch (finca) with landing strip near the Nicaraguan border. Reportedly involved with Castro and [this individual] is Rene Corvo, whose independently led anti-Sandinista paramilitary activities in northern Costa Rica and southern Nicaragua were subject of [a previous report]. [It is] said Corvo reportedly traveled briefly to Colombia following Corvo's return to Costa Rica [on or about] 29-30 Nov from Miami. [It was] inferred that travel to Colombia might be drug-related.

    3. Request [Headquarters provide information concerning] Castro, [the individual cited above] and Corvo. There are no [local] traces on [this individual] or Corvo. Castro appears [in files] as anti-Communist Cuban American well-known in the exile community in Miami and also known to be involved with the anti-Sandinista struggle. . . . We would be particularly interested in knowing latest info[rmation] linking Castro to drug trafficking.

  12. A December 15, 1984 draft intelligence report to Headquarters included a "source comment" that:

    There are also fears that Corvo, who has received support from Frank Castro, may be exploiting the military infrastructure in northern Costa Rica as cover for engaging in drug trafficking. Castro, a Cuban-American based in Miami and well-known as an anti-Communist, may be involved in drug trafficking as well.
  13. A February 8, 1985, cable reported that an FBI Special Agent had questioned Moises Ruiz Nunez:

    . . . about ties between [John Hull] and Frank Castro, who has a reputation among Cuban-Americans as an anti-Communist, a right-wing terrorist, and a drug trafficker. [Nunez] told [the FBI Special Agent] that [Hull] knows that Castro should be avoided.

    This was followed by a February 27, 1985 cable in which John Hull was discussed. In part, the cable said that a CIA officer "does not believe that [Hull] is involved with Frank Castro in any narcotics trafficking activities."

  14. A June 1, 1985 cable referred to Frank Castro as a known narcotics dealer and requested details linking Pastora to Castro, Jorge Morales and a third individual. A June 17, 1985 response to the request provided information about Castro's involvement in drug trafficking in 1979, the "considerable" amount of money that possibly came from Castro in July 1984 and the FRS' receipt of a number of aircraft from Castro in October 1984.
  15. A January 2, 1986 cable responding to an FBI request for information concerning Frank Castro reported that Castro was a pilot and gave Castro's most recent address as the Bonnet Travel Agency in Hialeah, Florida. The cable also provided a recapitulation of CIA information concerning Castro's anti-Fidel Castro activities.
  16. On March 7, 1986, an FBI cable reported to CIA allegations by Jack Terrell that, some time before February 1985, Frank Castro had presented himself as the representative of Colombian drug trafficker Ochoa who wanted a U.S. Ambassador assassinated and who offered to pay one million dollars to have it done. The cable noted also that Castro was the main liaison between Colombian drug dealers and the Cubans.
  17. On April 15, 1986, a cable suggested that a review of certain reporting would show that some:

    . . . consider Rene Corvo and Frank Castro as dangerous and counterproductive in the anti-Sandinista endeavor, however anti-Communist both may be. . . . [There have been] reported allegations that Castro may engage in drug trafficking. [Certain people] shun [Pastora], while Corvo and Castro have continued to support him.
  18. In a November 5, 1986 cable, a specifically named individual was referred to as "a Cuban narcotics dealer . . . [known] to have frequent contacts with Rene Corvo and with one Frank Castro, a narcotics kingpin with alleged Sandinista connections."
  19. In a February 10, 1987 cable to CIA regarding information about Carlos Lehder-Rivas, the FBI reported that Frank Castro was considered to be a narcotics trafficker, mercenary and a person who would do anything for money. The cable also noted that Castro was the subject of a Miami narcotics case and that Castro's break from the anti-Fidel Castro movement was consistent with the ideology of Lehder-Rivas who was pro-Fidel Castro.
  20. A February 13, 1987 FBI cable to CIA Headquarters provided background information on Frank Castro, his father, brothers and other associates. With regard to Castro, the cable said that:

    . . . In 1981 he was arrested on four counts of [sale, delivery] and importation of narcotics (case was dismissed); . . . Castro pled guilty to carrying a concealed weapon, [adjudication withheld] fined [$]500.00. In 1983, Castro was [subject] in DEA case [involving conspiracy], importation of 425,000 lbs. of marijuana . . . Beaumont, Texas. Castro was also the main subject in the Miami Police Department Tick-Tock case in 1981.

    Frank Castro is a potential subject in the Rene Corvo; et al; neutrality matter . . . where allegations have been made by several individuals that Frank Castro, along with Francisco Chanes . . . plotted to assassinate U.S. Ambassador Lewis Tambs in early 1985. . . . The allegations are that Frank Castro, as drug king Jorge Luis Ochoas [sic] representative, offered several individuals who are subjects in the above investigation, one million dollars, if they killed Ambassador Tambs.

    . . . In 1983 he was the leader and main supporter of another paramilitary training group operating in Naples, Florida. The group trained dozens of Nicaraguans and anti-Communist Cubans who later travelled to Central America to combat the Sandinista Nicaraguan government.

    Frank Castro was also one of the founders and main supporters of the Miami Cuban and Nicaraguan group named the Saturnino Beltran Commandos operating near the Costa Rica/Nicaragua border area. Unsubstantiated allegations have been made that Castro and others have used this Contra camp as a front to traffic drugs between Colombia and the United States.

    . . . Castro has very good connections with [the] Medellin Cartel Ochoa brothers. Castro is also known to travel [frequently] between Miami, Costa Rica and the Dominican Republic. Castro has [opened] a food processing [plant] in Costa Rica. Miami Police Department detectives believe Castro may be currently addicted to cocaine.

    [Another individual], a.k.a. "El Nino," . . . former subject in the MPD Tick-Tock drug investigation and current part owner of [a] Travel Agency . . . is a close associate and partner of Castros [sic]. [He] . . . is a pilot and resides [in] Hialeah, Florida.

  21. A November 25, 1987 cable noted:

    . . . that DEA/Miami requested a meeting . . . . to discuss the development of case involving Frank Castro and [a specifically named] Cuban exile. . . . These individuals also figured in a narcotics case involving Cuba. Both men claimed to be working under the direction of [CIA]. Station assured DEA that we were not in any way involved with these persons.
  22. Information Sharing with Other U.S. Government Entities. As explained above, CIA collected and shared information concerning Frank Castro with various U.S. law enforcement entities before, during and after the 1980s. No records have been found to indicate that CIA shared the information it collected concerning Castro with Congress.


Appendix C

To what extent did CIA have information indicating that the Government of Nicaragua, the Government of Cuba, or Nicaraguan- or Cuban-sponsored individuals were involved in alleged drug trafficking activities of individuals associated with the Contras?

  1. No information has been found to indicate that either the Government of National Reconstruction (GRN) or the Government of Cuba (GOC) was involved in drug trafficking activities with individuals associated with the Contras. CIA reporting concerning drug trafficking by the GRN and the GOC during the 1980s concerned the use of Nicaragua and Cuba for the transshipment of drugs to the United States. None of the reporting linked any Contra organization or Contra member with such activities.
  2. Allegations of Drug Trafficking. A September 23, 1982 cable reported that Interior Minister Tomas Borge Martinez was interested in making some sort of arrangement with a bank in Panama. Interior Ministry official Federico Vaughan took $350,000 with him to Panama for deposit in the Bank Continental. It was suspected the money and the arrangement with a bank in Panama were both related to drug trafficking.
  3. An October 8, 1982 cable to Headquarters reported that U.S. fugitive Robert Vesco and Interior Ministry official Paul Atha had said in early October 1982 that the GRN was planning a drug smuggling operation to earn cash for the GRN Ministry of the Interior (MINT).
  4. An October 9, 1982 cable to Headquarters reported information that the nine member GRN Junta had approved a plan for narcotics operations in July or August 1982. Reportedly Interior Minister Tomas Borge Martinez would organize and direct the operation with U. S. fugitive Robert Vesco acting as his advisor. According to this report, the GRN was laying the groundwork through trusted collaborators in Colombia, Panama and Costa Rica.
  5. A December 4, 1982 cable to Headquarters reported that the GOC was involved in planning possible narcotics shipments from Colombia to Corn Island in the Caribbean. This report identified Interior Ministry officials Paul Atha and Federico Vaughan as involved in the drug smuggling scheme. A December 9, 1982 cable to Headquarters indicated that Atha had said that Corn Island airstrip and El Bluff, Nicaragua would be used for drug air shipments. Managua airfields, would be used for emergencies and "decoy flights."
  6. A February 1, 1983 cable to Headquarters reported that Atha and Vaughan went to Panama with $380,000 to deposit in a specifically identified bank. The deposit was reportedly the product of drug operations by Borge, Atha and Vaughan. The cable said that it was surmised that "higher GRN officials know about Borge's drug activities."
  7. A May 26, 1983 cable to Headquarters reported rumors concerning cultivation of marijuana on the Nicaraguan Atlantic Coast and shipment to the United States. The cable stated the idea was credible and consistent with the GRN's desire to damage the United States in any way possible through drug trafficking.
  8. A June 30, 1983 cable to Headquarters reported that GRN Vice Minister of Aviation Marco Salinas Pasos, FSLN Party official Jose Talavera, Cuban Ambassador Carlos Diaz, and a Cuban Intelligence Officer were involved in a drug trafficking conspiracy with Colombian drug trafficker Jorge Morales and a Haitian exile. It was reported that Salinas had agreed to arrange the purchase of a DC-6 in Managua for use in transporting a drug shipment from Colombia to the United States.
  9. A December 30, 1983 cable to Headquarters reported that Federico Vaughan and Paul Atha intended to come to San Jose to introduce a person to cocaine dealers so that person could be the go-between for buyers and sellers. Reportedly Vaughan said "The idea is to flood the U.S. with cocaine to the detriment of the imperialist youth while proceeds will help the Nicaraguan revolution." Vaughan also reportedly indicated that the GRN wanted to buy a ranch in Costa Rica with a landing strip to receive shipments of cocaine. Vaughan, Borge, Atha, and the Cubans reportedly used a codebook to encode messages regarding cocaine trafficking.
  10. An April 3, 1984 cable to Headquarters reported information that Paul Atha and Tomas Borge were still involved in delivering drugs to Corn Island as of April 1984.
  11. Cables dated April 28 and May 3, 1984 to Headquarters reported that the drug operation described in June 1983 involving Salinas and the purchase of a DC-6 apparently never occurred. The cable further indicated that there had been reporting beginning in April 1984 that a Salvadoran Farabundo Marti National Liberation representative in Managua, Jacinto Bustillos, and GOC Ambassador Diaz were involved in a drug trafficking conspiracy with Jorge Morales and the GRN leadership.
  12. On December 11, 1984, a cable to Headquarters reported that a Nicaraguan defector who had worked for the GRN Front company H&M believed that Atha and Vaughan were involved in drug trafficking because of the large amounts of dollars they handled without any apparent source. Atha was the Managing Director of H&M and Vaughan worked directly for him.
  13. A July 19, 1985 cable to Headquarters identified a Cuban-American as the General Counsel for COPA airline in Managua and a long-time friend and attorney for Atha. According to the cable, the Cuban-American had commented that Atha "has gone very far into highly dangerous activities that include the smuggling of drugs."
  14. A September 27, 1985 CIA "Narcotics Report" stated that there was confirmation that Minister of Interior Tomas Borge was involved in smuggling cocaine from Colombia to the United States via Nicaragua. Reportedly this was a secret known only to Borge, his assistant Franco Montealegre, the Chiefs of Police and State Security, and members of the National Directorate. Reportedly the Ministry of the Interior (MINT) became involved in drug trafficking in order to obtain money for clandestine operations by Intelligence and State Security Departments outside Nicaragua.
  15. A typewritten Note for File, dated November 4, 1985, indicated that a former MINT officer had stated that H&M officials were former State Security officials or Sandinista policemen whose loyalty was unquestionable and that both Borge and Atha were extremely corrupt individuals.
  16. In a February 27, 1986 cable to a number of Latin America Stations, Headquarters reported the former MINT officer's statement that Tomas Borge was directly involved with Colombian narcotics traffickers who used Nicaragua as a transit point for distributing drugs throughout the world. The Headquarters cable indicated that the officer claimed that Borge made arrangements with GRN Customs officials to ensure that selected aircraft coming from Colombia were not subjected to searches. The officer believed the income from narcotics operations was used to finance espionage operations. He testified to Congress in 1986 that Sandinista officials supported drug trafficking to earn foreign currency for espionage operations.
  17. An August 8, 1986 cable to Headquarters reported that, in a 1982 meeting of MINT personnel, Borge commented that drugs seized in Nicaragua would be used as a "strategic arm" against the United States. According to Borge, this use of cocaine seized in Nicaragua would bring foreign currency to the Government and it would cause chaos within the United States. Further, Borge reportedly stated that the United States would be too occupied attempting to stop the drug traffic to be able to meddle in Nicaragua's affairs.
  18. A November 8, 1988 cable to Headquarters forwarded a FBI Miami Field Office request for comment concerning information provided by the FBI relating to a 1984 agreement between Colombian Medelin Cartel drug traffickers Carlos Lehder Rivas, Pablo Escobar Gaviria, Jose Gonzalo Rodriguez Gacha, and the GRN by which they would be allowed to stay in Managua, establish a base of operations, and be secure from Colombian and U.S. authorities. According to the cable, the FBI information indicated that $3 million had been turned over to Tomas Borge by the cartel leaders as consideration for the agreement. The cable also reported that a number of drug smuggling operations took place at Los Brasiles airport.
  19. The November 8, 1988 cable further reported to Headquarters that the cartel used the services of Robert Vesco in October or November 1984 to gain GOC approval to overfly Cuba with drug shipments. Raul Castro reportedly was involved in the agreement. The cartel established a scheme to transship drugs through Corn Island and Cuba to San Andros Island, Bahamas with all communications concerning impending drug shipments made by secure means between the GRN and the GOC to prevent any disclosure of their association with the Colombian traffickers. The operation came to a halt sometime in early 1985.
  20. An April 20, 1989 cable to Headquarters reported statements attributed to a former assistant to Paul Atha in H&M. The former assistant reportedly stated that the MINT was involved in early 1989 in supporting Borge's front company in transshipping drugs from Colombia through Corn Island, Nicaragua to the Bahamas.
  21. A July 7, 1989 cable to Headquarters reported information provided by a GRN defector. According to him, a GRN officer stated in mid-1984 that the MINT had accommodated international drug traffickers from the Medelin cartel in a MINT safehouse in Managua. He also reportedly had stated that the GRN contact point for the drug traffickers was Paul Atha and that the GRN was involved in international drug trafficking targeted at the United States. The report also indicated that "drug trafficking would support revolutionary goals and was a means to an end," i.e., to improve the dire economic situation in Nicaragua and weaken the United States.
  22. CIA Response to Allegations of Drug Trafficking. Information received by CIA throughout the 1980s alleging that individuals associated with the Cuban and Nicaraguan Governments were involved in drug trafficking appears to have been broadly shared with other U.S. Government entities. This was accomplished through intelligence reports that were disseminated by CIA to Intelligence Community agencies and in finished intelligence publications that were disseminated more broadly. For example:
  23. Information Sharing with Other U.S. Government Entities. As explained above, much of the intelligence regarding alleged drug trafficking by the Sandinista Government was shared with other U.S. Government intelligence and law enforcement agencies. This was accomplished by dissemination of intelligence reports and finished intelligence products.
  24. On April 6, 1984, CIA provided a response to questions posed by the SSCI concerning Nicaraguan involvement in drug trafficking. The response indicated that, although uncorroborated reports indicating Nicaraguan involvement in shipping cocaine to the United States had been received, CIA was unable to confirm reports implicating high-level Sandinista leaders in drug trafficking at that time.
  25. On August 9, 1984, the National Intelligence Officer for Narcotics provided the DCI with summaries used to brief Congress concerning narcotics activity in Cuba and Nicaragua. The summaries described field reporting that indicated Nicaragua had been used as a transit point for the shipment of drugs into the United States, possibly for the purpose of obtaining hard currency for the GRN. The summaries also provided information regarding cooperation between Cuba and Nicaragua in plans for the processing and shipment of narcotics purchased from Colombian drug dealers.
  26. On March 16, 1988, CIA Deputy Director for Intelligence Richard J. Kerr testified before the House Select Committee on Narcotics Abuse and Control that the Nicaraguan Government may have been involved in narcotics activity to obtain hard currency. He cited the 1984 DEA sting operation that resulted in the indictment of Federico Vaughan, an aide to Interior Minister Tomas Borge, as a co-conspirator in a scheme to smuggle drugs into the United States.
  27. According to a May 3, 1988 Memorandum for the Record prepared by OCA, Dewey Clarridge--who served as Chief of DO/Latin America Division from 1981 to 1984--was interviewed by two Staff members of the House Judiciary Committee's Subcommittee on Crime regarding his knowledge of drug trafficking by the Nicaraguan Government or the Contras. Clarridge, the MFR reported, discussed CIA's assistance to the 1984 DEA sting operation.


Appendix D

Potential Disinformation and CIA-Contra Drug Allegations

Were there indications of foreign government efforts in the 1980s to promote allegations that Contras were engaged in drug trafficking?

  1. In 1985 and 1986, the Sandinista Government made a variety of claims that CIA or the Contras were connected to drug trafficking:

  2. In the mid-1980s, Contra drug allegations were also featured in foreign publications outside Nicaragua. The U.S. Government agencies that reported these allegations, in many cases, attributed them to various Communist Parties, the Soviet Union and Cuba and mentioned a planned propaganda campaign involving the CIA-Contra drug theme.


Appendix E

Allegations by Tony Avirgan and Martha Honey of CIA and Contra Involvement in Drug Smuggling

  1. Allegations of Drug Trafficking by CIA and the Contras. Anthony Avirgan and Martha Honey were husband and wife journalists and U.S. citizens. Avirgan was present at the press conference of Eden Pastora at La Penca, Nicaragua on May 30, 1984 where a bomb exploded. Avirgan and Honey asserted in the media that the perpetrator of the La Penca bombing was a right-wing, Libyan-origin terrorist who they said was named Amac Galil or Ahmed Khalil, and who used the identify of the Danish journalist, Per Anker Hansen. According to Avirgan and Honey, the terrorist was tied to the drug-financed "Secret Team" of FDN Contras and CIA agents. A June 5, 1984 cable to Headquarters reported that Martha Honey had "verified" that an individual at La Penca named Per Anker Hansen was there using false identification papers.
  2. An August 27, 1985 cable notified Headquarters that Hansen, a Danish citizen whose passport had been used as identification by the attempted assassin, had been affiliated with organizations sympathetic to "South America" for several years.
  3. According to media articles, between August 1985 and April 1987, Avirgan and Honey publicized their version of the La Penca incident and of a drug-financed CIA-Contra "Secret Team" in press articles and appearances in Norway, Denmark, The Netherlands, Spain, the United Kingdom, India, Uruguay, Nicaragua, and the United States, as well as in Costa Rica. In an article entitled "The Carlos File," published in the October 5, 1985 edition of The Nation, Avirgan and Honey cited a specific individual--Carlos Rojas Chinchilla--as the source of allegations linking the CIA-Contra "Secret Team" with drug trafficking. The article stated that Rojas said he was in contact with an individual named "David," who allegedly was a driver who had been killed by John Hull and buried on Hull's ranch. Rojas was later arrested by Costa Rican authorities in August 1987 and at that time made a statement that "he made-up the 'David' story. . . . in return for a payment of $10,000." Avirgan and Honey also published their allegations in 1985 as a book titled La Penca: Report of Investigation.
  4. Legal Actions Resulting From Drug Trafficking Allegations. Between 1985 and 1994, Avirgan and Honey were involved in several U.S. and Costa Rican legal actions as a result of their allegations of a CIA-Contra team of drug-financed secret operators with John Hull as their common focal point. The earliest was a libel suit that John Hull filed against the couple in Costa Rica in response to their 1985-86 press allegations. On April 11, 1986, Headquarters was informed of the Christic Institute's interest in this case. The suit was scheduled for final arguments on May 23, 1986.(1)
  5. In May 1986, Daniel Sheehan filed a civil action, Tony Avirgan and Martha Honey, Plaintiffs vs. John Hull, et al., Defendants, in the U.S. District Court for Southern Florida, under the sponsorship of the Christic Institute. The May 29, 1986 complaint in what became known as the "La Penca Case" charged 30 individuals--including John Hull, Rene Corbo, Felipe Vidal, Moises Nunez, and Adolfo Calero--with conspiracy, injuries, battery, assault, intentional infliction of mental distress, and intentional interference with the business of the plaintiffs. The suit charged the defendants used six criminal means to "effectuate the unlawful objective of this Federal Neutrality Act Conspiracy."
  6. Included among these alleged "criminal means" was a violation of Title 18, United States Code, Sections 1401, et seq., and 1952 [sic], to fund the equipping, arming, training, and supplying of members of a "foreign military expeditionary force" by smuggling cocaine from the Republic of Colombia through Costa Rica into the United States. The suit also alleged "one-dozen criminal overt acts committed by the Defendants. . . ." Three of these alleged "criminal overt acts" involved drug trafficking or dealing with drug traffickers:
  7. . . . .
    4. The transportation and sale of thousands of kilograms of cocaine from the Republic of Colombia, through Costa Rica on the land owned or managed by Defendant John Hull in Northern Costa Rica into the United States, where it was sold and distributed inside and beyond the State of Florida;

    5. The purchase of . . . lethal military equipment . . . the money for which purchases being obtained from the sale of said cocaine inside the United States and said money being delivered for such sales of military equipment inside the United States; and

    . . . .

    10. The conspiracy to bomb the United States Embassy in San Jose, Costa Rica, and to assassinate Lewis Tambs, the United States Ambassador . . . for the purpose of obtaining a $1 million "bounty" offered for the death of Lewis Tambs by Defendant PABLO ESCOBAR, a portion of which monies would be used to fund the Defendants' criminal enterprise.
    . . . .

  8. In a June 6, 1986 cable, Headquarters characterized the proceedings:

    On 29 May 1986 Daniel Sheehan filed a lawsuit captioned Tony Avirgan and Martha Honey v. John Hull et al in the United States District Court of Southern Florida in which they asked for $24 Million in damages. This suit tracks the allegations contained in [an earlier cable] and was not unexpected. The complaint is essentially a artfully [sic] woven story about alleged excesses of the Nicaraguan resistance and its supporters in Central America with the La Penca bombing at its center.
  9. The May 29, 1986 complaint was amended twice. On December 12, 1986, Sheehan filed an affidavit that represented his recounting of the "Secret Team theory" as a supplemental filing to the amended complaint.
  10. On June 23, 1988, the presiding judge in the civil action signed an order granting summary judgments to the defendants. On February 2, 1989, the Judge signed an order that granted the defendant's motions for costs and attorney's fees for the defendants and stated:

    After two years of protracted and extensive discovery of scores of witnesses across the United States, Costa Rica, and elsewhere, the plaintiffs were unable to produce a single witness who could state that the defendants exploded the bomb or were responsible for the assassination attempt. . . . The attorneys for the plaintiffs, The Christic Institute, must have known prior to suing that they had no competent evidence to substantiate the theories alleged in their complaint. . . . Based upon the affidavit of plaintiffs' counsel, the plaintiffs were permitted to conduct two years of discovery. This discovery failed to produce any admissible evidence regarding causation. . . . This abuse of the judicial process requires that the plaintiffs make the defendants whole by paying the fees the defendants have been forced to expend for attorneys in this action.

    The Judge awarded the defendants a total of $1,034,381.36.


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