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Cocaine Pipeline Financed Rebels

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Post Wed Sep 07, 2016 3:33 pm

Posts: 119
Cocaine pipeline financed rebels
Evidence points to CIA knowing of high-volume drug network
by Gary Webb
San Jose Mercury News
For the better part of a decade, a San Francisco Bay Area drug ring sold tons of cocaine to the Crips and
Bloods street gangs of Los Angeles and funneled millions in drug profits to an arm of the contra guerrillas of
Nicaragua run by the Central Intelligence Agency, the San Jose Mercury News has found.
This drug network opened the first pipeline between Colombia's cocaine cartels and the black neighborhoods of
Los Angeles, a city now known as the "crack" capital of the world. The cocaine that flooded in helped spark a
crack explosion in urban America - and provided the cash and connections needed for L.A.'s gangs to buy
weapons.
It is one of the most bizarre alliances in modern history: the union of a U.S.-backed army attempting to
overthrow a revolutionary socialist government and the "gangstas" of Compton and South-Central Los Angeles.
The army's financiers - who met with CIA agents before and during the time they were selling the drugs in L.A.
- delivered cut-rate cocaine to the gangs through a young South-Central crack dealer named Ricky Donnell
Ross.
Unaware of his suppliers' military and political connections, "Freeway Rick" turned the cocaine powder into
crack and wholesaled it to gangs across the country.
Drug cash for the contras
Court records show the cash was then used to buy equipment for a guerrilla army named the Fuerza
Democratica Nicaraguense (Nicaraguan Democratic Force) or FDN, the largest of several anti-communist
groups commonly called the contras.
While the FDN's war is barely a memory today, black America is still dealing with its poisonous side effects.
Urban neighborhoods are grappling with legions of homeless crack addicts. Thousands of young black men are
serving long prison sentences for selling cocaine - a drug that was virtually unobtainable in black
neighborhoods before members of the CIA's army brought it into South-Central in the 1980s at bargain-
basement prices.
And the L.A. gangs, which used their enormous cocaine profits to arm themselves and spread crack across the
country, are still thriving.
"There is a saying that the ends justify the means," former FDN leader and drug dealer Oscar Danilo Blandon
Reyes testified during a recent cocaine-trafficking trial in San Diego. "And that's what Mr. Bermudez (the CIA
agent who commanded the FDN) told us in Honduras, OK? So we started raising money for the contra revolution"
Recently declassified reports, federal court testimony, undercover tapes, court records here and abroad and
hundreds of hours of interviews over the past 12 months leave no doubt that Blandon was no ordinary drug
dealer.
Shortly before Blandon - who had been the drug ring's Southern California distributor - took the stand in San
Diego as a witness for the U.S. Department of Justice, federal prosecutors obtained a court order preventing
defense lawyers from delving into his ties to the CIA.
Blandon, one of the FDN's founders in California, "will admit that he was a large-scale dealer in cocaine, and
there is no additional benefit to any defendant to inquire as to the Central Intelligence Agency," Assistant U.S.
Attorney L.J. O'Neale argued in his motion shortly before Ross' trial on cocaine-trafficking charges in March.
The 5,000-man FDN, records show, was created in mid-1981 when the CIA combined several existing groups
of anti-communist exiles into a unified force it hoped would topple the new socialist government of Nicaragua.
Waged a losing war
From 1982 to 1988, the FDN - run by both American and Nicaraguan CIA agents - waged a losing war against
Nicaragua's Sandinista government, the Cuban-supported socialists who'd overthrown U.S.-backed dictator
Anastasio Somoza in 1979.
Blandon, who began working for the FDN's drug operation in late 1981, testified that the drug ring sold almost
a ton of cocaine in the United States that year - $54 million worth at prevailing wholesale prices. It was not
clear how much of the money found its way back to the CIA's army, but Blandon testified that "whatever we
were running in L.A., the profit was going for the contra revolution."
At the time of that testimony, Blandon was a full-time informant for the Drug Enforcement Administration, a
job the U.S. Department of Justice got him after releasing him from prison in 1994.
Though Blandon admitted to crimes that have sent others away for life, the Justice Department turned him loose
on unsupervised probation after only 28 months behind bars and has paid him more than $166,000 since, court
records show.
"He has been extraordinarily helpful," federal prosecutor O'Neale told Blandon's judge in a plea for the
trafficker's release in 1994. Though O'Neale once described Blandon to a grand jury as "the biggest Nicaraguan
cocaine dealer in the United States," the prosecutor would not discuss him with the Mercury News.
Blandon's boss in the FDN's cocaine operation, Juan Norwin Meneses Cantarero, has never spent a day in a
U.S. prison, even though the federal government has been aware of his cocaine dealings since at least 1974,
records show.
Meneses - who ran the drug ring from his homes in the Bay Area - is listed in the DEA's computers as a major
international drug smuggler and was implicated in 45 separate federal investigations. Yet he and his cocaine-
dealing relatives lived quite openly in the Bay Area for years, buying homes, bars, restaurants, car lots and
factories.
"I even drove my own cars, registered in my name," Meneses said during a recent interview in Nicaragua.
Meneses' organization was "the target of unsuccessful investigative attempts for many years," O'Neale
acknowledged in a 1994 affidavit. But records and interviews revealed that a number of those probes were
stymied not by the elusive Meneses but by agencies of the U.S. government.
CIA hampered probes
Agents from four organizations - the DEA, U.S. Customs, the Los Angeles County Sheriff's Department and the
California Bureau of Narcotic Enforcement - have complained that investigations were hampered by the CIA or
unnamed "national-security" interests.
One 1988 investigation by a U.S. Senate subcommittee ran into a wall of official secrecy at the Justice
Department.
In that case, congressional records show, Senate investigators were trying to determine why the U.S. attorney in
San Francisco, Joseph Russoniello, had given $36,000 back to a Nicaraguan cocaine dealer arrested by the FBI.
The money was returned, court records show, after two contra leaders sent letters to the court swearing that the
drug dealer had been given the cash to buy weapons for guerrillas.
After Nicaraguan police arrested Meneses on cocaine charges in Managua in 1991, his judge expressed
astonishment that the infamous smuggler went unmolested by American drug agents during his years in the
United States.
His seeming invulnerability amazed American authorities as well.
A Customs agent who investigated Meneses in 1980 before transferring elsewhere said he was reassigned to
San Francisco seven years later "and I was sitting in some meetings and here's Meneses' name again. And I can
remember thinking, `Holy cow, is this guy still around?' "
Blandon led an equally charmed life. For at least five years he brokered massive amounts of cocaine to the
black gangs of Los Angeles without being arrested. But his luck changed overnight.
On Oct. 27, 1986, agents from the FBI, the IRS, local police and the Los Angeles County sheriff fanned out
across Southern California and raided more than a dozen locations connected to Blandon's cocaine operation.
Blandon and his wife, along with numerous Nicaraguan associates, were arrested on drug and weapons charges.
The search-warrant affidavit reveals that local drug agents knew plenty about Blandon's involvement with
cocaine and the CIA's army nearly 10 years ago.
"Danilo Blandon is in charge of a sophisticated cocaine smuggling and distribution organization operating in
Southern California," L.A. County sheriff's Sgt. Tom Gordon said in the 1986 affidavit. "The monies gained
from the sales of cocaine are transported to Florida and laundered through Orlando Murillo, who is a high-
ranking officer of a chain of banks in Florida named Government Securities Corporation. From this bank the
monies are filtered to the contra rebels to buy arms in the war in Nicaragua."
Raids a spectacular failure
Despite their intimate knowledge of Blandon's operations, the police raids were a spectacular failure. Every
location had been cleaned of anything remotely incriminating. No one was ever prosecuted.
Ron Spear, a spokesman for Los Angeles County Sheriff Sherman Block, said Blandon somehow knew that he
was under police surveillance.
FBI records show that soon after the raids, Blandon's defense attorney, Bradley Brunon, called the sheriff's
department to suggest that his client's troubles stemmed from a most unlikely source: a recent congressional
vote authorizing $100 million in military aid to the contras.
According to a December 1986 FBI teletype, Brunon told the officers that the "CIA winked at this sort of thing.
. . . (Brunon) indicated that now that U.S. Congress had voted funds for the Nicaraguan contra movement, U.S.
government now appears to be turning against organizations like this."
That FBI report, part of the files of former Iran-contra special prosecutor Lawrence Walsh, was made public
only last year, when it was released by the National Archives at the San Jose Mercury News' request.
Blandon has also implied that his cocaine sales were, for a time, CIA-approved. He told a San Francisco federal
grand jury in 1994 that once the FDN began receiving American taxpayer dollars, the CIA no longer needed his
kind of help.
None of the government agencies known to have been involved with Meneses and Blandon would provide the
Mercury News with any information about them, despite Freedom of Information Act requests.
Blandon's lawyer, Brunon, said in an interview that his client never told him directly that he was selling cocaine
for the CIA, but the prominent Los Angeles defense attorney drew his own conclusions from the "atmosphere of
CIA and clandestine activities" that surrounded Blandon and his Nicaraguan friends.
"Was he involved with the CIA? Probably. Was he involved with drugs? Most definitely," Brunon said. "Were
those two things involved with each other? They've never said that, obviously. They've never admitted that. But
I don't know where these guys get these big aircraft."
That very topic arose during the sensational 1992 cocaine-trafficking trial of Meneses after he was arrested in
Nicaragua in connection with a staggering 750-kilo shipment of cocaine. His chief accuser was his friend
Enrique Miranda, a relative and former Nicaraguan military intelligence officer who had been Meneses'
emissary to the cocaine cartel of Bogota, Colombia. Miranda pleaded guilty to drug charges and agreed to
cooperate in exchange for a seven-year sentence.
In a long, handwritten statement he read to Meneses' jury, Miranda revealed the deepest secrets of the Meneses
drug ring, earning his old boss a 30-year prison sentence in the process.
"He (Norwin) and his brother Luis Enrique had financed the contra revolution with the benefits of the cocaine
they sold," Miranda wrote. "This operation, as Norwin told me, was executed with the collaboration of high-
ranking Salvadoran military personnel. They met with officials of the Salvadoran air force, who flew (planes) to
Colombia and then left for the U.S., bound for an Air Force base in Texas, as he told me."
Meneses - who has close personal and business ties to a Salvadoran air-force commander and former CIA agent
named Marcos Aguado - declined to discuss Miranda's statements during an interview at a prison outside
Managua in January. He is scheduled to be paroled this summer, after nearly five years in custody.
U.S. General Accounting Office records confirm that El Salvador's air force was supplying the CIA's
Nicaraguan guerrillas with aircraft and flight support services throughout the mid-1980s.
The same day the Mercury News requested official permission to interview Miranda, he disappeared.
While out on a routine weekend furlough, Miranda failed to return to the Nicaraguan jail where he'd been living
since 1992. Though his jailers, who described him as a model prisoner, claimed Miranda had escaped, they
didn't call the police until a Mercury News correspondent showed up and discovered he was gone.
He has not been seen in nearly a year.

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