-Caveat Lector- from: http://www.thegrid.net/clear/drug.htm <A HREF="http://www.thegrid.net/clear/drug.htm">Art of Deception: CIA/Drugs </A> ----- The CIA Drug Trafficking Connection The "multinational" business of drug trafficking can be traced back half a century. In 1959 Operation 40 was organized as an assassination unit to kill Fidel Castro. Organized crime leaders Santo Trafficante and John Roselli, with the knowledge of vice-president Nixon, were charged with importing drugs from Laos. Two years later, Operation 40 was replaced by Operation Mongoose, a larger scale paramilitary organization. Its purpose was to land at the Bay of Pigs, and overthrow the Castro regime. The CIA officials who directed Operation Mongoose were Theodore Shackley and Thomas Clines. After the Bay of Pigs, dozens had been indicted for drug trafficking. Start at the Beginning 1. Southeast Asia 7. Morales 13. Cuban-Americans 2. Contra Cocaine 8. Sanchez Family and the Frogman Case 14. Frank Castro 3. Pegasus 9. Honduras 15. Panama 4. Barry Seal 10. Matta-SETCO-Calero 16. Reagan's "War on Drugs" 5. Costa Rica 11. Seizures 17. "Un-Investigating" CIA Involvement (Kerry Commission) 6. John Hull 12. U.S. Government Fronts 18. North's Diary 19. The White House Connection Return to CIA HeaderReturn to Table of Contents ------------------------------------------------------------------------ The Southeast Asia connection. In the 1960s, the CIA lived up to its name: the "Cocaine Import Agency." The CIA drug connection began with the Vietnam War when Theodore Shackley, along with assistant Thomas Clines, became the CIA station chief in Vientiane and Laos. The CIA's biggest asset was recruiting Hmong tribesmen to fight against the nationalistic Pathet Lao, and Vientiane became the drug capital of Laos. Vang Pao eventually gained a monopoly in the Golden Triangle, where Burma, Thailand, and Laos intersect. In Laos Air America, a C IA-sponsored airline, flew opium out of the Vientiane area. In 1971 alone, 60 kilograms of Laotian opium, valued at $13.5 million, were seized from the suitcase of a Laotian member of the World Anticommunist League, which was headed by General John Singlaub. In addition, General Richard Secord worked for Shackley, and his boss in the middle 1970s was CIA director George Bush. Secord oversaw the transportation of raw opium to locations where it could be processed into "China White" heroin. In a lawsuit, Shackley was charged with selling Laotian opium to Santo Trafficante and that "in return Shackley's organization received a fixed percentage of the income." In 1968, Shackley met in Saigon with Trafficante, Vang Pao, and Clines, and they set up a heroin smuggling ring to the United States. A Green Beret official speaking to Green Beret officers, stated that "Shackley had been responsible for 250 political killings in Laos. In 1969, Shackley was transferred to Saigon. Clines followed him, and both ran the CIA operations in Vietnam. Shackley and Clines set up Operation Phoenix, a program which was designed to "neutralize" or assassinate Vietnamese civilians who were suspected of collaborating with the National Liberation Front (NLF). During the Vietnam war, the amount of heroin which was exported to the United States became so immense that the operations could not remain clandestine. Consequently, in the 1960s, it became prudent for CIA operatives to stash heroin in caskets of dead Americans as well as in body bags, areas which would be least searched. When the bodies of American GIs were flown to military bases on the West coast, the heroin could be easily removed. In addition, boxes and crates, which were sent back to the states, carried heroin and coded labels alerted CIA operatives as to where to look. Top ot page ------------------------------------------------------------------------ The contra cocaine train. As the war in Vietnam was winding down, Shackley left Southeast Asia in 1972 to head CIA activities in the Western Hemisphere and sent Ed Wilson and Manuel Artime to meet with right-wing dictator Anastasio Somoza of Nicaragua. However, Somoza's totalitarian regime lasted only another seven years before being overthrown by the Sandinistas. Two months after Reagan's inauguration in 1981, the CIA launched its secret war in an attempt to overthrow the Sandinista government. Soon thereafter, the arms-drug caper began. The drug of choice in the 1960s and 1970s was heroin -- imported from Southeast Asia. Then in the 1980s, the primary addicting drug became cocaine, and its source was Latin America, the new hub of CIA activities. Ironically, "the war on drugs" became an important part of Reagan's domestic agenda. While the United States sent military aid southward to its surrogates fighting the Sandinista government, the rate of cocaine being transported northward into the states quickly escalated. The CIA was involved in a variety of ways -- by air, land, and sea -- in bringing cocaine into the United States. According to author Rodney Stich, high level CIA operative Gunther Russbacher, who was highly opposed to drug capers, stated that he was at high level meetings which involved drug dealers in Colombia. According to Russbacher, drug kingpins divided their territory into two large groups, the Cali and Medellin cartels. According to Stich, Operation Snow Cone was the CIA's primary trafficking operation in Latin America. Under this umbrella, Operation Watch Tower was formed. This consisted of low frequency radio beacons which allowed aircraft, loaded with cocaine, to navigate undetected at low altitudes between Colombia and Panama. The CIA used both Boeing 727s and C-130s which were flown by CIA or commercial pilots. According to Russbacher, two captains from United Airlines and one Pan American pilot supplemented their base salaries by flying drugs into the United States. Stich also has the testimony of Trenton Parker, another CIA operative and a former Marine colonel, who was employed by the CIA from 1964 to 1992. In the late 1970s, Parker was "accidentally" exposed by the Securities and Exchange Commission (SEC) and charged with a money laundering operation. Presumably, the Justice Department had not been informed of his CIA connection. Several years later in 1982, Parker became a scape goat for the CIA when he was exposed in Operation Snow Cone. As a result, a rift developed between Parker and the CIA. Top ot page ------------------------------------------------------------------------ The Pegasus saga. The Pegasus program, initiated by President Harry Truman to spy on other CIA units, revealed numerous illegal activities within the agency. Since the time of its inception, the role of Pegasus substantially changed. Pegasus became an integral part of a drug trafficking operation during the contra war. Gene "Chip" Tatum was initially recruited as a member of the top secret Pegasus unit during the Vietnam War. He and 13 others were assigned to Operation Rock, a covert action to secretly enter Phnom Penh, Cambodia in January 1971. The unit received its briefings from various CIA operatives as well as from General Alexander Haig and CIA Saigon Chief William Colby. The objective of Pegasus was to destabilize the Cambodian government by sabotaging the city's airport. They captured and murdered some unarmed North Vietnamese military personnel. Tatum claimed that he and the other 13 members of Operation Red Rock were also to be killed by Montagnard tribesmen under orders of the CIA. Then their bodies were to be "disappeared." Thus, American involvement in Cambodia could be denied. However, this CIA plot was not carried out, and the members of Operation Red Rock survived. A copy of the "Pegasus files" had been given to Congressperson, Larry McDonald, a member of the Joint Armed Services Committee between 1976 and 1982. McDonald stated that he would reveal startling evidence about the CIA, but ironically, he was killed when KAL 007 was shot down over the Sakhalin Islands. Tatum continued to serve as a CIA operative for the next 20 years. He continued as a member of Pegasus, becoming a deep-cover CIA pilot involved in covert operations, trafficking cocaine during the contra war. Between the early 1980s and 1990, Tatum became directly involved in the drugs-for-arms scam. He claimed that the marked-up arms, which were sold to Iran, were traded for cocaine which was flown back to American bases, especially to Arkansas, Ohio and Colorado. As a CIA pilot, he was told that he would be contacted by "a man called North." Oliver North was both the chief fundraiser for the contras, after the Boland Amendment cut off American aid, as well one of the principle conduits for drug trafficking. Tatum claimed that North's operation not only involved the Colombian cartels, but it also involved the shipments of cocaine into the United States. In 1985, Tatum was flying out of Palmerola Air Base in Honduras. On one flight in February, he was instructed to contact Felix Rodriguez who was a pivotal player in Iran-contra. Rodriguez informed Tatum that he was to support covert "Pegasus" missions. When Tatum returned to his home base, he contacted North to advise him of the cocaine. North replied that it was "a trophy of war" and that it was not the contras -- but the "Sandinistas ... selling it to fund the military." North added by stating that "the cocaine was bound for the world courts as evidence" against the Sandinistas. Two years earlier, Tatum had flown similar containers, which were labeled "Medical Supplies," into Little Rock ( (Arkansas) Air Force Base, and the crates were picked up by Dan Lasater, a close friend of the Arkansas governor, Bill Clinton. Tatum admitted that he flew several missions out of the American base in Honduras and picked up cocaine containers regularly, sometimes violating Nicaraguan airspace. Now Tatum began to document all Pegasus trips on the back of his flight logs. Not long after his association with North, Tatum was transferred to New York to set up a money-laundering operation for funds from the Iran-contra cocaine pipeline. He was named president of three proprietary construction companies: American National Home Builders, American Constructors and American Homes. In addition to North and Rodriguez, Tatum was to take orders from Amiram Nir, a former Mossad agent and advisor to Vice-President Bush. Tatum was ordered to fly a 200 pound sealed cooler, marked "Vaccine," to a contra camp on the Honduran border. When the cooler was being transferred to an Air Force C-130 transport plane, it accidentally broke and 100 bags of cocaine were exposed. Not surprised by this discovery, Tatum stated that he had suspected that the CIA was involved in trafficking cocaine two years earlier. Pegasus also involved the "neutralizing" of pivotal government leaders during the contra war. For example, a struggle for power emerged among some contra leaders. The United States supported Adolfo Calero, while Enrique Bermudez also sought a prominent position in the contra hierarchy. When Bermudez threatened to expose the role of Vice-President Bush in drug trafficking, Tatum claimed that Bush ordered Bermudez assassinated. Another assassination was carried out by Pegasus against Honduran General Gustavo Alvarez Martinez, the commander-in-chief of the armed forces. When Alvarez demanded a bigger split of the cocaine profits, he was murdered in 1989. Tatum also admitted his involvement in the assassination of Amiram Nir, a former Israeli Mossad agent. After Nir was called to testify before a Senate subcommittee, his plane was shot down by missiles from Tatum's helicopter. Another Pegasus operation occurred soon after the 1990 Nicaraguan elections. President Bush hand-picked Violetta Chamorro to be the new "president," and it took a 15 party coalition and $12 million from the Bush administration to defeat Sandinista president Daniel Ortega. After Chamorro's victory, Tatum stated that another contra leader, whom he would not name, requested that Bush give him a key position in the new government. By refusing to place him in the Chamorro government, Bush put himself in a vulnerable position. This contra leader could expose Bush's involvement in drug trafficking. Thus, a Pegasus unit was assigned to disgrace him in early 1990. Pegasus used the odorless and tasteless drug scopolaphine, which would prevents one from recalling anything which occurred while under its spell. Tatum stated that the former contra leader was invited to a luxury hotel as a guest of his friend, President Bush. After the CIA administered the drug, the contra leader was introduced to an attractive "blonde," and the two went into a bedroom where a hidden video camera recorded their sexual activity. It turned out that the "blonde" was a male prostitute from New York, and he was later killed that evening. According to Tatum, the scopolaphine worked. Weeks later, the contra leader was given a copy of the video tape which revealed his homosexual acts. Tatum claimed that in 1992, President Bush instructed him to "neutralize," presidential contender Ross Perot, but he refused to do so. Tatum turned over a copy of an incriminating tape to President Bush, explaining that it would not be publicized as long as the plot was not carried out. As recently as 1994, Tatum was contacted by North, Felix Rodriquez, and CIA director William Colby and was told to surrender all documents and tapes. Tatum refused to do so. Tatum had turned whistle blower. The next year he was charged with treason. At his trial, his attorney refused to call even one of the 80 witnesses Tatum had requested. Later, the attorney admitted that he had been pressured by the Department of Defense. The charge of treason was subsequently changed to that of fraud. Tatum was found guilty and was sentenced to serve a 15-month sentence. Then, in March 1996, an additional charge - conspiring to embezzle - was brought against him. Found guilty once again, Tatum was sentenced to a 27-month concurrent sentence. Top ot page ------------------------------------------------------------------------ Barry Seal. One of the most infamous CIA drug traffickers from Latin America to the United States was Barry Seal. He usually flew C-130s and delivered weapons to the contras -- and returned with shipments of cocaine. Seal's base of operations was Mena Airport, Arkansas during the time that Bill Clinton was governor. In July 1985, Michael Tolliver, a convicted American drug smuggler who was at a Georgia halfway house, was contacted by Seal. He was told that he would receive $75,000 a trip if he were to fly arms from Miami's airport into Honduras. According to Tolliver, Seal had 28,000 pounds of marijuana when he arrived at Homestead Air Base in Florida. Upon returning from Central America, Seal was paid $75,000. One of Seal's planes, which he flew to traffic drugs into the United States, was a C-123. Ironically, it was the same plane in which CIA operant Eugene Hasenfus was shot down, while dropping supplies to the contras in Nicaragua in 1986. The Kerry subcommittee learned that Southern Air Transport of Miami had provided the plane. Flight logs in the plane indicated that it had made trips between Barranquilla, Colombia to Florida in 1985. Southern Air denied any knowledge, and no charges were brought against this front. Seal and Tatum became friends during the contra war. For example, Tatum stated that he was at a meeting with North, Felix Rodriguez, former Mossad agent Amiram-Nir and Honduran General Alvarez when North stated that Vice-president Bush was going to have his son, Jeb, arrange "something out of Colombia." Seal provided Tatum with a list of names of high level government officials, going as high as Bush and Casey, who had knowledge of -- or who were directly involved in -- trafficking cocaine into the United States. Eventually, Seal was convicted of drug trafficking. He was soon released from a federal penitentiary when he agreed to become a DEA informer. Seal admitted that he had information which would indict high level government officials, including Vice-president Bush, in cocaine trafficking. In 1986, Seal was assassinated in Baton Rouge, Louisiana. Top ot page ------------------------------------------------------------------------ The Costa Rica connection. The arms-for-drugs operation also thrived in Costa Rica. When the Southern Front against the Sandinista government was established in 1983, Costa Rica was ill equipped to deal with the threat posed by the Colombian drug cartels. Costa Rica had no military and its law enforcement remained limited. Its radar system was so poor that contra planes could fly in and out undetected. The government of Costa Rica only employed civil guards who were underpaid and easily bought. A leadership struggle within the Nicaraguan Democratic Front developed early in the contra war. Eventually Pastora, leader of the southern front operating out of Costa Rica, broke ranks with American favorite Adolfo Calero. Pastora originally was funded by the CIA to run operations for the FDN. As a result of a leadership struggle with other contra leaders such as Calero, within a year Pastora fell out of good grace with the umbrella contra organization which operated out of Honduras. Eventually in the mid-1980s, an assassination attempt on the life of Pastora failed at La Penca, on the Nicaragua-Costa Rica border. By 1985, Associated Press was running stories which stated that the CIA and contras were involved in drug trafficking. Two years later in 1987 CIA chief for Central America, Alan Fiers, testified at the Iran-contra hearings: "With respect to (drug trafficking) by Resistance Forces, it is not a couple of people. It is a lot of people." It was Fiers who was largely responsible for cutting off CIA aid to Eden Pastora in 1984, when it appeared impossible that he would fall in with the rest of the contras. It was Fiers in the summer of 1991 who testified to a Congressional committee that other higher up military and White House personnel were well aware of drug trafficking by the contras. When Pastora was dropped by the CIA, drug dealer Jorge Morales was arrested. In 1986, Morales testified to the United States Attorney in Miami that the Costa Rican contras were running arms for drugs. Later in 1989, the Senate Subcommittee on Terrorism, Narcotics, and International Operations, headed by Massachusetts Senator John Kerry, confirmed these same allegations. Its 144-page report listed a litany of drug operations out of various Latin American countries. Most of the narcotic traffic was directed by contra and CIA officials. The Kerry report stated, "There was substantial evidence of drug smuggling through war zones on the part of the contras, contra suppliers, contra pilots, mercenaries who worked for the contras, and contra supporters throughout the region." A number of Costa Ricans also became drug traffickers for the contras. Jaime "Pillique" Guerra owned a crop dusting service as well as an aircraft business in northern Costa Rica. He refueled and repaired planes which originated in Panama and were carrying weapons to the El Salvador regime in its civil war against the FMLN. These planes carried narcotics as well as weapons. Werner Lotz, one of the pilots, was subsequently convicted of drug smuggling. The head of the Costa Rican "air force" and personal pilot to two of his country's presidents, Werner Lotz, explained the involvement of drug traffickers: "There was no money. There were too many people and too few people to follow them, and everybody was trying to make money as best they could." He continued by stating the government guards could be easily bought off: "To be very clear ... our guard down there is barefoot, and you're talking about 50 men to cover 400 kilometers maybe." Another Costa Rican pilot was Gerardo Duran, who flew a number of missions for the contras' Southern Front. However, the United States eventually severed ties with him after he was indicted for narcotics trafficking. In 1987, he was convicted and imprisoned in Costa Rica. Top ot page ------------------------------------------------------------------------ The John Hull connection. One of Pastora's former pilots, Geraldo Duran, told the Kerry subcommittee that he had been arrested in 1986 in Costa Rica for flying drugs to the United States. When the CIA dropped Pastora in 1984, it had to find another source through which to work. That turned out to be Jorge Morales who conspired with an American, John Hull, who owned a multi-acre farm in northern Costa Rica. Hull's ranch was known as a refueling and storing place for cocaine which originated from the Medellin and Cali cartels in Colombia. Hull was given a $375,000 "loan" to a build a lumber mill on his ranch. He also owned six airstrips on the ranch. In July 1983, Hull traveled to Washington, D.C. to convince members of Congress that Pastora could not be trusted and that he "was a front for the United or the communists." One of the offices which he visited was that of Senator Dan Quayle of Indiana He was introduced to Quayle's assistant, Robert Owen, and to North. Subsequently, Owen resigned from his position with Quayle and started the umbrella organization for the contras, the United Nicaraguan Opposition (UNO). CIA official Felix Rodriguez, who was involved in the Bay of Pigs, was put in charge of drug trafficking from Noriega's Panama. Hull was also aided by two Americans, William Crone and Ian Kniloch, the chief of the contra's air logistics. Both worked with a paramilitary group known as Huerta Norte. Another Hull neighbor was Bruce Jones who owned a 55-acre ranch next door. Jones testified that Hull received 5,000 rifles, 5 million rounds of ammunition, hand grenades, mines, and mortars from the contras. Jones was a liaison between the CIA and contras for whom he was supplying millions of dollars in arms. He testified that between May 1982 and May 1984 approximately 100 deliveries of arms and supplies were coordinated by him and Hull. These supplies were kept on Hull's ranch. Jones stated, "We'd know the date the planes were coming and we'd wait for them. We'd unload the shipments in five or ten minutes -- they'd never turn the engines off." Jones agreed that the shipment of arms was in violation of the Arms Export Control Act and Costa's Rica's neutrality acts. In the 1960s, Ronald Martin had worked for the CIA in Miami along with James McCoy, an ex-attach� to Nicaragua when it was under Somoza's rule. When contra aid was legally cut off by the Boland Amendment in 1984, Martin began organizing North's "munitions supermarket." However, Martin was shut off when North began to use Richard Secord as the arms broker. According to contra leader Adolfo Calero, Martin and McCoy received $2,095,000 for arms from Oliver North. Martin's attorney stated that the amount was "$15 or 20 million." At least five witnesses testified to the Kerry subcommittee that cocaine was loaded onto planes at John Hull's ranch. The committee also was told that Hull received $10,000 a month as a courtesy from Oliver North. Yet the Justice Department took no action against Hull for either obstruction of justice or for drug trafficking. In 1989, Hull was arrested in Costa Rica, but the charges against him for trafficking 2,500 kilograms of cocaine were dropped. He was declared a persona non grata and moved to Miami. After 1988, the Justice Department reluctantly indicted some people working for Hull, but soon afterwards these too were dropped. Felipe Vidal and Rene Corvo were Cuban-Americans involved in transporting arms to Hull's ranch in return for drugs. Revenue from the cocaine was used to purchase military equipment, ammunition, and explosives for the contras. Corvo testified to the Justice Department that "paramilitary supplies were stored in the residence of Frank Chanes in Miami as well as Corvo's own garage." No charges were ever brought against Corvo. Witnesses testified that Corvo loaded guns, including a cannon and declared that he was flying "clothing" and "medical supplies" for "the refugees of El Salvador." Ex-CIA agent Jose Fernandez testified to the Iran-contra committee that "Vidal and Corvo were our people' (CIA) and had a 'problem with drugs,' but that the agency had to 'protect them.' " Vidal was called a CIA contract agent who "had been arrested at least seven times in Miami on narcotics and weapons charges." All this evidence gave the Kerry subcommittee adequate evidence to implicate Vidal, Corvo, North, and others as being part of an arms-for-drugs conspiracy. A convicted drug smuggler admitted flying 500 kilograms of cocaine from Hull's ranch to the United States. "It was arms down, cocaine back . . . with full knowledge of the CIA and DEA." His partner, convicted drug smuggler Jorge Morales, stated "The CIA was very, very aware of it." At a 1986 Costa Rican drug trial, CBS News reported that "the (United States) government presented wiretapped telephone conversations with contra leader Huachen Gonzalez." He discussed the large amounts of cocaine which the contras were sending from Costa Rica to the United States. Also in 1986, the Costa Rican government arrested a Cuban exile carrying 204 kilograms of cocaine from an airstrip. He denied any role in these operations but stated that the contras had asked him to smuggle in arms. Top ot page ------------------------------------------------------------------------ The Morales connection. Medellin cartel dealer George Morales, a convicted Colombian drug trafficker, trained pilots to fly between Florida and Central America. Between 1983 and 1986, his pilots made numerous flights and returned to the United States with millions of dollars in drugs. His flights landed at Ilopango Air base in El Salvador and at Hull's ranch. In a deposition, Morales stated that he had met in secrecy with Hull in Colombia, and that Hull had arrived on a plane involved in drug trafficking. According to the Kerry report, the main front set up by the CIA that operated out of Florida was SETCO Air. This was a CIA-operated company which ran arms down to Honduras and returned with cocaine. The Kerry report states that SETCO was the "principal company used by the contras to transport supplies and personnel to the FDN, carrying at least a million rounds of ammunition, food, supplies, uniforms, and other military supplies for the contras from 1983 through 1985." Morales testified that he had delivered 40 M-79 grenade launchers which were flown from Miami to Ilopango Air Base in El Salvador. In May 1986, Morales was to meet with vice- president Bush to discuss a "secret operation." However, the appointment was canceled when the Iran-contra scandal was about to leak to the public. Morales was dismissed from the CIA and later indicted. Top ot page ------------------------------------------------------------------------ The Sanchez family connection and the San Francisco "frogman" case. Involvement by the Sanchez family in drug trafficking dates back to 1981 when the contras were being trained by the Argentine military. The Kerry report includes an investigation of the involvement of Sanchez in the "frogman" case in San Francisco. In 1983, the "frogman" case netted 430 pounds of cocaine on a freighter outside of San Francisco Bay. Its crew admitted that it was running drugs from the contras in Costa Rica. One was an ex-Somoza air force officer and stated that "the proceeds belonged to "... the contra revolution." Another stated that he had given thousands of dollars from the drug smuggling to Costa Rican contra groups and helped to arrange for the shipment of arms to a small contra group headed by Fernando Chamorro. The United States returned $36,020, which was seized as drug money, after "one of the defendants, Zavala ... submitted letters from contra leaders claiming that the funds were really their property." Court records showed that the cocaine ring's "sources of supply are Troilo Sanchez," who was a relative of "contra leader Aristedes, a member of the FDN (contra) directorate" and had been caught "with pillows of cocaine." The Kerry committee found that two of those arrested had ties to the contras and had received the cocaine from Colombian sources. Thus the committee report implicated higher up contra leaders who were involved in narcotics traffic. Several members of the Sanchez family were indicted. The "frogman" case led the Sanchez family to fall from power. Norwin Menese-Canterro was named by the DEA as a major smuggler of "kilogram amounts of cocaine into the United States" and he himself admitted to trafficking cocaine "for a period of six months." When his brother was Managua's chief of police under Somoza, other contra leaders stated that he "helped finance at least four contra functions" and "sent a truck and video equipment to FDN members in Honduras." By 1983, the CIA was using several contra drug connections to maintain support activities for the contras. Top ot page ------------------------------------------------------------------------ The Honduras connection. Honduras had been the classic example of a banana republic. Most of its economy was controlled by United Fruit and Standard Fruit. New Orleans ran its economy, and soon banana trade routes became drug routes. In 1975 Honduran president General Oswaldo Lopez Arellano received $1.5 million in bribes from the American multinational companies, and in return never paid export taxes amounting to $7.5 million. In the 1980s, Honduras accounted for approximately 20 percent of the cocaine imported by the United States. Costa Rica supplied about 10 percent of America's cocaine. Between 1982 and 1987, the Reagan administration pumped in $335 million in military aid and $836 million in "economic" aid to Honduras. A Christian Democrat in Honduras' congress stated that Washington would "just forget about questions about drug trafficking." Top ot page ------------------------------------------------------------------------ The Matta-SETCO-Calero connection. This arms for drugs caper emerged in 1983 when Calero was placed in charge of the contras operating out of Honduras. It was at this time that Eden Pastora in Costa Rica was cut off the CIA payroll. Juan Ramon Matta Ballesteros was a well-known drug dealer who spent part of the 1970s in a Colombian prison. He returned to Honduras in 1986 after bribing his way out of jail with $2 million. The DEA knew about Matta by 1978 when he was arrested at Dulles airport with 54 pounds of cocaine. However, by 1983 SETCO, Matta's air freight company, was used by the contras to run arms to the contras in Honduras. According to the Kerry report, by 1984 SETCO was the contras' main supplier of weapons. For these services, Matta was paid by North. The Kerry report also states, "One of the pilots selected to fly contra mission for the FDN (contras) for SETCO was Frank Moss, who was under investigation as an alleged drug trafficker since 1979." Two years after Iran-contra broke in the United States, the Justice Department finally extradited Matta who was a suspect in the murder of DEA agent Enrique Camarena in Mexico. Top ot page ------------------------------------------------------------------------ The Seizures. In July 1985, Michael Tolliver, a convicted American drug smuggler who was at a Georgia halfway house, was contacted by Barry Seal. Seal had contacts with the CIA and was released from prison early. He was told that he would receive $75,000 a trip if he were to fly arms from Miami's airport into Honduras. According to Tolliver, Seal had 28,000 pounds of marijuana when he arrived at Homestead Air Base in Florida. Upon returning from Central America, Seal met "Hernandez" at the Fountainbleau Hotel and was paid $75,000. On October 28, 1984, FBI agents seized 763 pounds of cocaine with a wholesale value of $10 million in southern Florida. Among those arrested was Honduras' former chief of staff of the army, General Bueso Rosa. In 1987, United States officials confiscated two shipments of cocaine weighing 6.7 tons. United States government investigators stated that it went "right to the doorstep of the Honduran military." The cocaine had come from the Cali cartel with whom Matta dealt directly. In 1987, the DEA had information which linked five top Honduran military officers with drug trafficking but was "persuaded not to act on its information . . . so as not to endanger Honduran cooperation in the contra war." By 1987, it was estimated that Honduras accounted for 20 to 50 percent of the cocaine which entered the United States. Top ot page ------------------------------------------------------------------------ United States government fronts. The State Department selected a number of companies owned and operated by narcotics traffickers to provide humanitarian assistance to the contras. SETCO (Services Ejectutivos Turistas Commander) Air was established by Honduran drug dealer Ramon Matta Ballesteros. Between January and August 1986, the State Department paid his "front" $186,924.25. One of SETCO's pilots, Frank Moss, was investigated but was never charged with drug trafficking. Later in 1985, Moss formed his own company, Hondu Carib, which also flew missions to the contras. On the basis that Moss was presumably bringing back cocaine into the United States, the Customs Service concealed a transponder on his DC-4 airplane. On one occasion his DC-4 was chased off the west coast of Florida while it was dumping what appeared to be drugs. When it landed in Charlotte, no drugs were found aboard. However, the plane's registration was not in order, and the previous owners were known drug traffickers. Law enforcement authorities also found an address book with telephone numbers of contra officials and also the Virginia telephone number of Owen, North's courier. A search of the place also revealed marijuana residue. DIACSA was a Miami-based air company which manufactured airplane parts. It was owned by the Guerra family of Costa Rica and served as the headquarters of a drug trafficker enterprise for convicted dealers Floyd Carlton and Alfredo Caballero. The State Department paid them $3.8 million between March 1985 and January 1986 and then $41,120.90 in the first eight months of 1986. Caballero gave Carlton DIASCA offices as a place for planning his smuggling activities. The State Department continued to do business with DIASCA six months after some of its officials had been indicted. The defendants were allowed to plea bargain. Carlton received nine years and Cabalerro received five years probation for smuggling cocaine into the United States. Frigorificos de Puntarenas was also owned by Cuban-American drug traffickers and served as a broker and supplier for various services to the contras on the Southern Front. This Atlantic based Costa Rican "shrimp" company received State Department payments in the amount of $261,937. In May 1983, Ramon Milian Rodriguez testified that cocaine would be sent out to shrimp boats and eventually shipped to the United States. Rodriguez was a Cuban arrested for money laundering. Owen stated in his memo to Oliver North: "If we can get two shrimp boats, Nunez (owner of the shrimp business) is willing to front a shrimping operation on the Atlantic coast. These boats can be used as mother ships. I brought this up a while ago and you agreed and gave me the name of a DEA person who might help with boats." Jack Terrell was also involved in using shrimp boats as a conduit in drug trafficking. Terrell was a volunteer for a private contra organization, Civilian Military Assistance (CMA) which operated out of Pastora's contra group in Costa Rica. By 1984, he had moved up the ranks to a "colonel" and was given authority to travel to Honduras to meet with the mainstream contra group under Calero. Terrell testified that the contras were running a "seafood" front operation which could make a million dollars. Terrell also charged that "Hull was involved in cocaine trafficking." Terrell further explained that he "learned later they were speaking of a cocaine operation disguised by imports of frozen fish from Costa Rica." Terrell's testimony to the Kerry subcommittee alarmed Oliver North who wanted to silence him. North's efforts to get the FBI to investigate Terrell failed. Finally, Vortex was an air service which was partially owned by admitted drug trafficker Michael Palmer. This "front" was paid $317,425.17 by the State Department in 1986 to store, pack, and inventory goods for the contras. At the time the State Department and Palmer signed a contract, it was a known fact that he owned two airplanes which he had used for drug trafficking. In addition, he had been under investigation for 10 years for running drugs. Eventually Palmer was indicted and convicted. Between January and August 1986, the State Department payments for "humanitarian" aid to these "companies," operating in drug trafficking, totaled $806,401.20. The Kerry report also corroborated the allegations linking together North and Frank Castro as part of a conspiracy to both gunrunning and drug trafficking. Finally in 1988, only Corvo was indicted but soon afterwards charges were dropped. Top ot page ------------------------------------------------------------------------ The Cuban-American connection. Several groups of Miami-based Cuban-Americans provided direct or indirect support to the contras when it was prohibited by the Boland Amendment. Rene Corbo was one who provided supplies and training with funds in part from drug money. Two other Cuban exiles, Mario Rejas Lavas and Ubaldo Hernandez Perez, were captured by Sandinistas in 1986. They were reportedly members of UNO/FARN which was headed by Fernando "El Nego" Chamorro. When the Kerry committee requested information on these Cuban-Americans, the Justice Department refused to provide any information on the grounds that the committee was merely "rambling through open investigations (and it) gravely risks compromising those efforts." The Justice Department advised this committee that the matter had been fully investigated and that the committee's allegations were untrue. In May 1986, members of the Kerry committee met with CIA officials who categorically denied that weapons had been shipped to the contras on planes involving Corvo. Yet the FBI had learned that Cuban-American supporters had shipped weapons from south Florida to Ilopango Air Base in Honduras as well as to John Hull's ranch in Costa Rica. Colonel Robert L. Earl, a member of the National Security Council, described how the CIA was concerned about the "disreputable characters in the Cuban-American community that are sympathetic to the contra cause" and "there was a lot of corruption and greed and drugs and that it was a real mess." Eventually Corvo was indicted in a Neutrality Act case. Top ot page ------------------------------------------------------------------------ The Frank Castro connection. Castro, an ex-Cuban and Bay of Pigs veteran, was indicted in the 1970s for smuggling more than a million pounds of marijuana to the United States. During the early 1980s, Robert Owen (North's liaison to the contras) stated that Castro was heavily into drugs and that he had furnished Eden Pastora with a DC-3 plane. Castro also hade visited John Hull's ranch in Costa Rica. Owen also testified that "former 'Bay of Pigs' veteran Frank Castro was heavily into drugs." Despite large gaps in the official inquiry, it has been established that Owen worked for Gray and Company after leaving then Senator Dan Quayle's staff in 1983. Owen worked primarily with Neil Livingstone, a mysterious figure who claims to be a mover and shaker in the intelligence world but who is described as a "groupie." Livingstone worked with Ed Wilson, Air Panama, and as a front man for business activities sponsored by the CIA and Israeli intelligence. Owen and Livingstone traveled frequently to Central America to meet with the contras in 1984. Top ot page ------------------------------------------------------------------------ The Panama connection. Before he seized power as head of state, Manuel Noriega was first recruited by the United States Defense Intelligence Agency in 1959 while studying in Peru. By 1967, he was placed on the CIA payroll. At this time, he worked in conjunction with the United States military, which used Panama as a listening post in Latin America. After a failed coup in 1971, General Omar Torillos, who later became dictator, fled to Miami where he stated that Noriega had "operational control" of the narcotics trade through Panama. The Justice Department dropped the idea to attempt to indict Noriega. In 1976, Noriega was placed on the CIA payroll again, this time at $110,000 a year. When Carter was elected, Noriega was again dropped from the CIA. Carter's major objective was to pass the Panama Canal Treaty, so all allegations against Noriega were suppressed. However, once the treaty was ratified by the Senate, the Panamanians got the word that America was open for drug trade. In 1980, Noriega was given full control over a special Panamanian intelligence unit. Noriega supplied at least seven pilots to run arms down from Florida. The pilots returned with cocaine. According to a member of the Panamanian legislature, "They opened the gate so their henchmen utilized the national territory for trafficking in arms and drugs." When Reagan took office in 1981, Noriega was immediately placed back in good faith with the CIA, and his salary jumped to $185,000 a year. It reached $200,000 by 1985. The CIA deposited Noriega's illegal payoffs in the Bank of Credit and Commerce International (BCCI), whose name made front page news in the summer of 1991 for laundering money. CIA Director Casey began meeting with Noriega in 1981. Noriega was paid $100,000 for the use of Panama as a middle country to run drugs from Colombia to the United States. His personal pilot, Floyd Carlton, stated that he received $400 per kilogram to run cocaine from Colombia into Panama. However, things turned sour for Carlton in 1985 when $3 million in cocaine was missing on flights into Costa Rica. Noriega supplied pilots and urged contra leader Eden Pastora to unite with the contra organization in Honduras. By 1985, Noriega promised to train contras in Panama. Noriega met with North in London to discuss plans to set up training for "booby traps, night ops," and to sabotage Nicaraguan targets. Noriega stated that he would try to obtain Israeli commandos, including one who had "killed the head of the PLO in Beirut" to work with the contras. The Kerry report states: "Noriega put his pilots to work flying weapons from Panama to Costa Rica for the contras. "...Many of the pilots moved mixed cargoes of guns and drugs to bases in Costa Rica, dropped off the guns and flew on to the United States with drugs." In 1986, the Iran-contra scandal broke, and this made Noriega expendable. The next year his personal pilot, Carlton, was extradited to the United States. In 1988, Noriega himself was indicted by the Justice Department and was linked to drug trafficking for the first time. The next year the United States invaded Panama, and Noriega was kidnapped and taken to Miami for his trial. The CIA never turned his files over to the Justice Department. After Noriega was brought to the United States, the Bush administration placed Guillermo Endara in power. Endara was director and secretary of Banco Interoceanico, which had been targeted by the DEA and FBI, and named Carlton as a major person who laundered money through that bank from the Medellin and Cali cartels. The CIA also used Banco de Ibereoamerica as a front through which to launder money in Panama. Through this dummy company, North purchased arms from a Syrian drug and arms dealer, Manzer al-Kasser, who had ties to the Medellin cartel. Top ot page ------------------------------------------------------------------------ Reagan's "War on Drugs." At the same time that the CIA was clandestinely involved in drug trafficking in Latin America, President Reagan appointed William Bennett as the nation's "drug czar." In addition, the First Lady toured the country with her proverbial clich�, "Just say no t o drugs." Bennett stated that there was a "remarkable doubling in the frequent use of cocaine since 1985 and that there was "terrible proof that our current drug epidemic has far from run its course." He continued by saying that Americans are faced with "intensifying drug-related chaos," and "an appalling, deepening crisis." Just several months later, the White House stated that there "is evidence that their national drug strategy was succeeding and that narcotic use was becoming unfashionable among young Americans." Shortly thereafter, Bennett declared a victory over drugs in the United States and resigned as drug czar. Top ot page ------------------------------------------------------------------------ "Un-Investigating" the CIA's involvement in drug trafficking. After the Iran-contra scandal broke in 1986, the Senate's Kerry Committee convened in April 1986. Its primary focus was on the illegal transportation of weapons to the contras. Yet, mounting evidence began to surface that the CIA was also involved in narcotics trafficking, originating with Colombian cartels. An immense amount of evidence indicated that high level contra leaders as well as CIA operatives were involved in drug trafficking. As it turned out, the United States government had information regarding the involvement either while it was occurring or immediately afterwards. The Kerry subcommittee found that the CIA and contra arms-for-drugs operations included: �Involvement in narcotics trafficking by individuals who were associated with the contra movement. �Participation of narcotic traffickers in contra supply operations through business relationships with contra organizations. �Provision of assistance to the contras by narcotics traffickers. This included cash, weapons, planes, cash, air supply service, and other materials. �Payments to drug traffickers by the State department from funds authorized by Congress for humanitarian assistance to the contras. In some cases this was after the drug traffickers had been indicted by the Justice Department, and in other cases while traffickers were under investigation. The drug traffickers needed the cover of legitimate authority for their enterprises to succeed. Thus, with anticommunist sentiment at a high pitch, they were able to take advantage of the Sandinista situation. This became a matter of survival for some contras, while it was just another business operation for others. These activities were carried out in connection with contra activities in both Costa Rica and Honduras. Top ot page ------------------------------------------------------------------------ Oliver North's diary. In 1987, the two Iran-contra investigatory committees -- the Subcommittee on Narcotics, Terrorism, and International Operations (chaired by Senator John Kerry) and the Senate Select Committee (chaired by Senator Daniel Inouye) -- determined what evidence would be made available for the hearings. As a member of the NSC, North had compiled 2,848 pages of notes in spiral notebooks between 1984 and 1986. North kept records of correspondence, meetings, and activities involving the NSC. However, after his diary was subpoenaed by the Iran-contra committees, he was allowed to censor his notes. North and his attorneys either totally or partially censored over 1,269 pages -- nearly half of his diary. 155 pages were totally "blacked out." Then a White House committee scrutinized his censored diary and determined that 104 pages were "not relevant to the investigation." North did not delete a significant amount of evidence which linked him to drug trafficking during the contra war. Damaging entries to his diary included: �May 12, 1984. ". . .contract indicates that Gustavo is involved w/drugs �June 26, 1984. "DEA" - (followed by two blocks of text deleted by North) �June 27, 1984. "Drug Case - DEA program on controlling cocaine - Ether cutoff - Colombians readjusting - possible negotiations to move refining effort to Nicaragua - Pablo Escobar - Colombian drug czar - Informant (Pilot) is indicted criminal - Carlos Ledher - Freddy Vaughn." �July 9, 1984. "Call from Clarridge - Call Michael re Narco Issue - RIG at 1000 Tomorrow - DEA Miami - Pilot went talked to Vaughn - wanted A/C to go to Bolivia to p/u paste - want A/C to p/u 1500 kilos - Bud to meet w/Group." �July 12, 1984. "Gen Gorman - *Include Drug Case Call from Johnstone - (White House deletion) leak on Drug." �July 17, 1984. "Call to Frank M - Bud Mullins Re - leak on DEA piece - Carlton Turner Call from Johnstone - McManus, LA Times-says/NSC source claims W.H. has pictures of Borge loading cocaine in Nic." �July 20, 1984. "Call from Clarridge - Alfredo Cesar Re Drugs-Borge/Owen leave Hull alone (Deletions)/Los Brasiles Air Field- Owen off Hull." �July 27, 1984. "Clarridge: - (Block of White House deleted text follows) - Arturo Cruz, Jr. - Get Alfredo Cesar on Drugs." �July 31, 1984. "Finance: Libya - Cuba/Bloc Countries - Drugs ... Pablo Escobar/Frederic Vaughn." �July 31, 1984. "Staff queries re (White House deletion) role in DEA operations in Nicaragua." �Dec. 21, 1984. "Call from Clarridge: Ferch (White House deletion) - Tambs-Costa Rica - Felix Rodriguez close to (White House deletion) - not assoc. W/Villoldo - Bay of Pigs - No drugs." �Jan. 14, 1985. "Rob Owen - John Hull - no drug connection - Believes." �July 9, 1985. "Went and talked to (contra leader) Vaughn, (who) wanted to go to Bolivia to pick up paste, wanted aircraft to pick up 1500 kilos." �July 12, 1985. "$14 million to finance (arms) came from drugs." �July 21, 1985. "HO (Honduras) plans to seize all mat'l when supermarket comes to bad end." �August 9, 1985. "Honduran DC-6 which is being used for runs out of New Orleans is probably being used for drug runs into U.S." �Aug. 10, 1985. "Mtg. w/A.C. - name of DEA person in New Orleans re Bust on Mario/DC-6." �Feb. 27, 1986. "Mtg. w/Lew Tamb- DEA Auction A/C seized as drug runners. - $250-260K fee." �Undated. "Necessary to give Mr. Hull protection." Top ot page ------------------------------------------------------------------------ The White House Drug Connection. In 1995, press accounts of illegal drug trafficking led to an investigation the following year in Congress. Within the executive branch State Department officials told Congress in 1986 that it had evidence of a limited number of incidents in which known drug traffickers tried to establish relations with Nicaraguan resistance groups." According to the State Department, " . . . these attempts for the most part took place during the period when the resistance was receiving no United States funding and was particularly hard pressed for financial support." The report continued: "...drug traffickers were attempting to exploit the desperate conditions" in which the contras found themselves. The department even conceded that there were "individual members" of the contras who were running drugs " . . . without the authorization of resistance leaders." Months later the Foreign Relations Committee to the State Department reported " . . . the available evidence to involvement with drug traffickers by a limited number of persons having various kinds of affiliations with, or political sympathies for, the resistance groups." In 1987, the CIA's Central American Task Force chief conceded that the contras on the southern front in Costa Rica had links to drug trafficking and that it was much broader than what had been reported by the State department. The chief reported to the Iran-contra committee: "With respect to (drug trafficking by) the Resistance Forces ... it is not a couple of people. It is a lot of people." He continued by stating that "everybody around Pastora was involved in cocaine . . . his staff and friends . . . they were drug traffickers or involved in drug smuggling." In 1986, the Justice Department and other federal agencies failed to respond to any of these allegations. In May 1986, members of the Kerry committee met with representatives from the State Department, Justice Department, FBI, CIA, and DEA. After several days the official statement by the Justice Department read: "The FBI had conducted an inquiry into all these charges and none of them have [sic] any substance . . . (and none of them was) accurate." On national television, Reagan charged that "top Nicaraguan government officials are deeply involved in drug trafficking" (March 16, 1986). Ironically, on the same day as the speech, the United States government returned funds seized in a 430-pound cocaine bust after a defendant stated that contra leaders claimed the funds were theirs. George Bush always claimed that he knew nothing of the CIA involvement in drug trafficking. In 1988, Bush's top drug aide, Admiral Daniel Murphy, stated: "I never saw any intelligence suggesting General Noriega's involvement in drug trade. In fact, we always held up Panama as the model in terms of corporation with the United States in the war on drugs." Iran-contra became more than a George Bush affair. It became a Bush family affair. Bush's older brother, Prescott, was also linked to covert actions. He appeared to have aided the Reagan administration's clandestine support of the contras. In the 1980s, he served on the advisory board of Americares, the United States-based relief organization with ties to prominent right-wing Republicans and the intelligence community. In 1985 and 1986, after Congress cut off American aid to the contras, Americares donated more than $100,000 worth of newsprint to the pro-contra newspaper La Prensa in Managua. Americares supplied $291,383 in food and medicine and $5,750 in cash to Mario Calero, who was a New Orleans-based quartermaster and arms purchaser for the contras, and to the brother of contra leader Calero. During this period, groups associated with North's contra arms network provided covert support for La Prensa. George Bush's second oldest son, Jeb, acted as a liaison to the anti-Castro right and to clandestine schemes in support of the contras. Soon after congressional prohibition of aid to the contras in late 1984, Jeb became linked to Leonel Martinez, a Miami-based right-wing Cuban-American drug trafficker. Martinez, who was linked to the southern front's contra leader Eden Pastora, was involved in efforts to smuggle more than 3,000 pounds of cocaine into Miami in 1985 and 1986. He was arrested in 1989 and later convicted for bringing 300 kilos of cocaine into the United States. He also reportedly arranged for the delivery of two helicopters, arms, ammunition, and clothing to Pastora's Costa Rica-based contras. Federal prosecutors in Miami had a photograph of Jeb Bush and Martinez shaking hands but would not release the photo to the public. Martinez made a $2,200 contribution to the Dade County Republican Party four months after Jeb became the chair of Florida's GOP. It was also known that Martinez wrote $5,000 checks to then Vice President Bush's Fund for America's Future in both December 1985 and July 1986 and made a $2,000 contribution to the Bush for President campaign in October 1987. Martinez's construction company gave $6,000 in October 1986 to Bob Martinez, the GOP candidate for governor in Florida. Before that time he was governor from 1987 to 1991. The war on drugs would have been successful had the United States made an effort to get Asian and Latin American countries to be equally tough on drug traffickers as they were on the peasants and workers in their countries. American policy is less concerned with fighting a war against drugs than it is in using drug traffickers. "For the CIA to target international drug networks, it would have to dismantle prime sources of intelligence, political leverage, and indirect financing for its Third World operations. " During Reagan's Presidency one-third of federal law enforcement funds for fighting organized crime was cut. The Drug Enforcement Agency was reduced by 12 per cent, resulting in the dismissal of 434 DEA employees. ------ Aloha, He'Ping, Om, Shalom, Salaam. Em Hotep, Peace Be, Omnia Bona Bonis, All My Relations. Adieu, Adios, Aloha. Amen. Roads End Kris DECLARATION & DISCLAIMER ========== CTRL is a discussion and informational exchange list. Proselyzting propagandic screeds are not allowed. Substance�not soapboxing! These are sordid matters and 'conspiracy theory', with its many half-truths, misdirections and outright frauds is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. 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